RKB Global Annual Report | Balance Sheet and Financials

RKB Global Limited Consolidated Balance Sheet (Rs in Crores)

RKB Global Limited Consolidated Profit & Loss Statement (Rs in Crores)

RKB Global Limited Consolidated Cash Flow Statement (Rs in Crores) 

Summary of cash flow statement for the year 2025 and 2024:

Cash Flow from Operating Activities

The company reported a net profit before tax of ₹15.44 crore in FY 2025, up from ₹10.59 crore in FY 2024, indicating improved profitability at the accounting level. After adjusting for non-cash and financial items like depreciation (₹4.81 crore) and finance charges (₹14.22 crore), the operating profit before working capital changes stood stable at ₹32.08 crore, almost unchanged from last year.

However, the real concern lies in working capital movements. A sharp increase in trade receivables (₹79.45 crore outflow) suggests that a large portion of sales has not yet been converted into cash, potentially indicating delayed collections or aggressive credit policies. On the positive side, inventory reduction (₹40.98 crore inflow) helped partially offset this. Still, declines in trade payables (₹21.93 crore outflow) and increases in other assets further strained liquidity.

As a result, the company ended up with a negative cash flow from operations of ₹32.00 crore, worse than last year’s ₹27.23 crore outflow. This indicates that despite accounting profits, the core business is not generating cash efficiently—an important red flag for sustainability.

Cash Flow from Investing Activities

Investing activities show a net cash outflow of ₹25.86 crore in FY 2025, compared to an inflow of ₹5.68 crore in FY 2024. The company continued to invest heavily in property, plant, and equipment (₹25.22 crore) and capital projects (₹5.31 crore), indicating ongoing expansion or capacity building.

Unlike the previous year, where significant inflows came from the sale of property (₹34.78 crore), FY 2025 had only modest proceeds (₹2.27 crore), which explains the shift to a net outflow. Interest income and bank deposit movements provided minor support but were not enough to offset capital expenditure.

Overall, this suggests the company is in an investment phase, prioritizing long-term growth over short-term liquidity.

Cash Flow from Financing Activities

Financing activities were the primary source of cash inflow, contributing ₹57.93 crore in FY 2025. The biggest driver was fresh equity infusion (₹46.03 crore) through share capital issuance, indicating reliance on external funding. Additionally, the company raised net borrowings of ₹18.50 crore, reversing the previous year’s heavy debt repayment trend.

At the same time, interest payments decreased to ₹6.60 crore, reflecting either reduced borrowing costs or improved debt structure.

This section clearly shows that the company is funding its operational deficits and investments through external financing, particularly equity, rather than internal cash generation.

Net Change in Cash Position

Despite significant operating and investing outflows, the strong financing inflow resulted in a marginal increase in cash and cash equivalents by ₹0.07 crore, ending the year at ₹0.14 crore. This is a very low absolute cash balance, suggesting tight liquidity management.

The minimal net increase also indicates that almost all funds raised were immediately deployed, leaving little buffer for contingencies.

Financial Ratios of RKB Global Limited

Summary of ratios for the year 2025 and 2024:

Current Ratio

The current ratio improved to 1.98 in FY 2025 from 1.80 in FY 2024, indicating a better short-term liquidity position. This suggests the company has more current assets available to cover its current liabilities. However, given the sharp rise in receivables seen earlier, the quality of this liquidity may depend on how efficiently the company collects its dues.

Debt-Equity Ratio

The debt-equity ratio increased slightly to 0.31 from 0.26, showing a moderate rise in leverage. This indicates that the company has taken on additional debt relative to equity, but the ratio still remains at a comfortable level, suggesting a conservative capital structure.

Debt Service Coverage Ratio

The DSCR improved significantly to 1.58 from 0.27, reflecting a strong improvement in the company’s ability to service its debt obligations. A ratio above 1 indicates that earnings are sufficient to cover debt repayments, making this a major positive change compared to the previous year.

Return on Equity

The return on equity remained almost stable at 5.48% in FY 2025 compared to 5.46% in FY 2024. This indicates consistent but relatively modest returns for shareholders, suggesting that while profitability has improved slightly, it has not significantly enhanced shareholder value.

Inventory Turnover Ratio

The inventory turnover ratio remained nearly unchanged at 3.48 compared to 3.53, indicating stable inventory management. This suggests that the company is maintaining a consistent pace in converting inventory into sales without major inefficiencies.

Trade Receivables Turnover Ratio

The trade receivables turnover ratio dropped sharply to 3.88 from 16.49, which is a significant concern. This indicates that the company is taking much longer to collect payments from customers, leading to higher receivables and potential liquidity pressure.

Trade Payables Turnover Ratio

The trade payables turnover ratio declined to 3.99 from 9.37, suggesting that the company is taking longer to pay its suppliers. While this may temporarily ease cash flow pressure, it could affect supplier relationships if the trend continues.

Net Capital Turnover Ratio

The net capital turnover ratio decreased to 3.12 from 4.46, indicating reduced efficiency in utilizing capital to generate revenue. This may be due to increased investment in assets or working capital that has not yet translated into proportional sales growth.

Net Profit Ratio

The net profit ratio improved to 2.70% from 1.83%, reflecting better profitability and improved cost efficiency. This indicates that the company is earning higher profit per unit of revenue compared to the previous year.

Return on Capital Employed

The return on capital employed declined to 14.66% from 18.46%, suggesting that the company is generating lower returns from its overall capital base. This may indicate that recent investments are not yet yielding optimal returns.

Return on Investments

The return on investments increased slightly to 3.15% from 2.74%, indicating a marginal improvement in income generated from investments. However, the return remains relatively low, suggesting limited contribution from investment activities.