MSE Financial Annual Report, Balance Sheet, and Financials

MSE Financial Service Limited Balance Sheet (Rs in Hundred)

MSE Financial Service Limited Profit & Loss Statement (Rs in Hundred)

 MSE Financial Service Limited Consolidated Cash Flow Statement (Rs in Hundred)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023(₹ in hundreds):

Cash Flows from Operating Activities:

This section provides insight into the cash generated or used in the core business operations.

·        Net profit before tax and extraordinary items:

o   For FY 2024, the net profit before tax (PBT) is ₹84,461 compared to ₹52,878 in FY 2023. This increase indicates that the company has made a higher profit before accounting for tax or extraordinary items.

·        Adjustments for non-cash items:

o   Depreciation:

§  Depreciation decreased from ₹5,842.27 in FY 2023 to ₹2,529.74 in FY 2024. This could indicate a reduction in capital assets or a lower depreciation expense in the current year.

o   Interest expense:

§  In FY 2023, there was an interest expense of ₹35,478.90, while in FY 2024, there is no such expense. This could imply that the company did not incur any interest expenses during FY 2024 or it was accounted elsewhere.

o   Interest income:

§  Interest income decreased slightly from ₹1,27,238.73 in FY 2023 to ₹1,13,569.36 in FY 2024. This shows a reduction in earnings from interest on investments or other financial assets.

·        Operating profit/loss before working capital changes:

o   The company recorded a loss of ₹26,578.63 in FY 2024, compared to a loss of ₹33,039.56 in FY 2023, indicating a smaller operational loss before adjustments for working capital.

·        Working capital changes:

o   Changes in working capital components (like assets, liabilities, provisions, receivables, etc.) have significant effects on cash flow.

o   Other Non-current assets showed a reduction of ₹58,976 in FY 2024, while it increased by ₹6,91,080.80 in FY 2023.

o   Trade payables showed a negative change of ₹46,818.16 in FY 2024, compared to a positive change of ₹39,794.49 in FY 2023, indicating a decrease in the payables position in FY 2024.

o   Trade receivables decreased by ₹14,660.29 in FY 2024, whereas they had increased by ₹1,04,128.60 in FY 2023, showing an improvement in the collection of receivables in FY 2024.

o   Other working capital items like Short Term Loans & Advances, Other Current Assets, and Short-Term Provisions also show significant changes, which resulted in an overall decrease in cash from operations.

·        Cash generated from operations:

o   The company experienced a negative cash flow from operations amounting to ₹2,80,973.30 in FY 2024, compared to ₹1,66,014.57 in FY 2023, indicating that the business operations did not generate sufficient cash during the period.

·        Income tax adjustments:

o   There was an income tax adjustment of ₹18,457.84 in FY 2024, higher than the ₹9,049 in FY 2023, leading to a decrease in net cash from operating activities.

·        Net cash from operating activities:

o   The overall net cash outflow from operating activities for FY 2024 was ₹2,99,431.14, significantly higher than the outflow of ₹1,75,063.87 in FY 2023. This indicates a larger cash drain from operations in FY 2024.

2. Cash Flows from Investing Activities:

This section details the cash inflows and outflows related to the company’s investments.

·        Proceeds from disposal of non-current assets:

o   There were no proceeds from disposal of non-current assets in either FY 2024 or FY 2023.

·        Purchase of investments:

o   In FY 2023, the company purchased investments worth ₹1,00,000, but there was no such purchase in FY 2024.

·        Interest income:

o   Interest income from investments decreased from ₹1,27,238.73 in FY 2023 to ₹1,13,569.36 in FY 2024, as noted earlier.

·        Purchase of property, plant, and equipment:

o   The company made an expenditure of ₹4,085.88 for property, plant, and equipment in FY 2024, compared to ₹1,518.38 in FY 2023.

·        Net cash flow from investing activities:

o   The net cash flow from investing activities in FY 2024 was ₹1,25,759.42, compared to ₹26,294.54 in FY 2023. The increase is mainly due to a reduction in investment purchases and higher interest income.

3. Cash Flows from Financing Activities:

This section reflects the cash flows related to raising capital and managing borrowings.

·        Proceeds from issuance of share capital & borrowings:

o   No new borrowings or share capital issuance took place in FY 2024 or FY 2023.

·        Interest paid:

o   In FY 2023, the company paid ₹35,478.90 in interest, but there were no interest payments in FY 2024.

·        Net cash used in financing activities:

o   The company had a net outflow of ₹35,478.90 in FY 2023 due to interest payments, but there was no such outflow in FY 2024, indicating no significant financing activities during the current period.

4. Net Increase/Decrease in Cash and Cash Equivalents:

This section shows the overall change in cash for the period.

·        In FY 2024, the company experienced a net decrease of ₹1,73,671.72 in cash and cash equivalents, compared to a decrease of ₹1,84,248.23 in FY 2023. The decrease in cash was driven by the negative operating cash flow, despite positive investing activities.

5. Cash and Cash Equivalents at the Beginning and End of the Period:

·        At the beginning of the period:

o   Cash at the beginning of FY 2024 was ₹38,07,708.09, slightly lower than ₹39,91,956.32 at the beginning of FY 2023.

·        At the end of the period:

o   Cash at the end of FY 2024 stood at ₹36,34,036.37, which reflects the overall decrease in cash and cash equivalents during the year.

Financial Ratios of MSE Financial Service Limited

Here is a summary of the financial and operational metrics for MSE Financial Service Limited for the years 2024 and 2023:

Current Ratio: The slight increase to 1.17 indicates stable liquidity but remains relatively low, suggesting the company has limited cushion for short-term obligations.

Return on Equity (ROE): The negative ROE worsened to -0.67%, reflecting poor profitability for shareholders and signaling a need for improved profitability strategies.

Net Capital Turnover Ratio: The improvement to 1.67 shows better utilization of capital to generate sales, indicating better operational efficiency.

Net Profit Ratio: The slight increase to 0.06 indicates marginal improvement in profitability, but still reflects low profit margins.

Return on Capital Employed (ROCE): The increase to 4% suggests better returns on capital employed, although it remains low and highlights room for further improvement.