Studds Accessories Annual Report and Financials

Studds Accessories Limited Balance Sheet (Rs in Millions)

 Studds Accessories Limited Profit & Loss Statement (Rs in Millions)

 Studds Accessories Limited Consolidated Cash Flow Statement (Rs in Millions)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flow from Operating Activities:

In 2024, the company generated Rs. 965.04 million from operating activities, a significant increase compared to Rs. 282.49 million in 2023. This improvement was driven by a higher profit before tax of Rs. 763.75 million (2024) compared to Rs. 464.41 million (2023), along with various adjustments, including depreciation and amortisation (Rs. 190.28 million in 2024 vs. Rs. 181.01 million in 2023) and finance costs of Rs. 16.05 million. Other key adjustments include interest income and loss on sale of property and equipment.

The working capital changes in 2024 saw an improvement, with an increase in receivables contributing Rs. 293.36 million, and a decrease in payables amounting to Rs. 21.65 million, signaling a more efficient management of working capital compared to 2023, where payables saw a sharp decline of Rs. 99.51 million. Inventories, however, showed a decrease of Rs. 52.09 million in 2024 compared to a positive movement of Rs. 74.16 million in 2023. These working capital adjustments helped to boost the overall cash generated from operations to Rs. 1,148.33 million in 2024 from Rs. 391.70 million in 2023. Taxes paid in 2024 amounted to Rs. 183.29 million, leaving a net operating cash inflow of Rs. 965.04 million.

Cash Flow from Investing Activities:

Investing activities resulted in a net cash outflow of Rs. 535.31 million in 2024, a stark contrast to the Rs. 8.87 million net inflow in 2023. The primary driver of this outflow was the purchase of property, plant, and equipment (PPE), amounting to Rs. 407.37 million in 2024, compared to Rs. 189.63 million in 2023. The company also invested in fixed deposits (Rs. 181.38 million), which further contributed to the cash outflow. However, the company received interest income of Rs. 36.69 million and generated other income of Rs. 13.61 million in 2024, which helped mitigate the overall negative cash flow from investing activities.

Cash Flow from Financing Activities:

Financing activities saw a net cash outflow of Rs. 322.74 million in 2024, compared to an outflow of Rs. 233.07 million in 2023. The primary cause of this outflow was the repayment of non-current borrowings (Rs. 299.65 million), as well as the payment of dividends amounting to Rs. 78.41 million. The company, however, added lease liabilities worth Rs. 71.37 million, which provided some relief. Interest payments were lower at Rs. 16.05 million in 2024, compared to Rs. 28.20 million in 2023.

Net Increase in Cash and Cash Equivalents:

The net result of the cash flow activities was an increase in cash and cash equivalents by Rs. 106.99 million in 2024, compared to Rs. 58.29 million in 2023. The closing cash and cash equivalents for 2024 amounted to Rs. 355.72 million, up from Rs. 248.73 million at the beginning of the year

Financial Ratios of Studds Accessories Limited

Here is a summary of the financial and operational metrics for Studds Accessories Limited for the year 2024 and 2023:

Current Ratio:

The current ratio has improved from 1.34 in 2023 to 2.05 in 2024. This indicates that the company’s liquidity has improved, meaning it is in a better position to cover its short-term liabilities with its short-term assets. A current ratio above 2 is generally seen as a strong liquidity position.

Net Debt-Equity Ratio:

The net debt-equity ratio decreased from 0.09 in 2023 to 0.02 in 2024. This indicates that the company has significantly reduced its reliance on debt financing. A lower ratio suggests that the company is more financially stable and has lesser financial leverage, which reduces financial risk.

Debt Service Coverage Ratio:

The debt service coverage ratio decreased from 3.01 in 2023 to 2.37 in 2024. Although it has declined, a DSCR above 1.0 still shows that the company has sufficient operating income to cover its debt obligations. However, the decrease indicates slightly reduced ability to service its debt compared to the previous year.

Return on Equity (ROE):

ROE increased from 10.22% in 2023 to 15.78% in 2024. This shows a significant improvement in profitability relative to shareholders' equity. The company is generating higher returns for shareholders, which reflects more efficient use of equity capital.

Inventory Turnover Ratio:

The inventory turnover ratio has slightly declined from 6.76 in 2023 to 6.34 in 2024. This suggests that the company is holding onto its inventory for a slightly longer period. While the decrease is minimal, a lower ratio may indicate slower sales or excess inventory.

Trade Receivables Turnover Ratio:

The trade receivables turnover ratio increased from 16.8 in 2023 to 17.74 in 2024. This is a positive development as it indicates that the company is collecting its receivables more efficiently, improving cash flow and reducing the risk of bad debts.

Trade Payables Turnover Ratio:

The trade payables turnover ratio increased from 6 in 2023 to 7.47 in 2024. This means the company is paying its suppliers faster than before, which could either reflect better cash management or pressure from suppliers to reduce payment terms.

Net Capital Turnover Ratio:

The net capital turnover ratio decreased from 16.32 in 2023 to 10.7 in 2024. A decline in this ratio suggests that the company is generating less revenue per unit of working capital compared to the previous year. This could be a sign of less efficient use of its capital.

Net Profit Ratio:

The net profit ratio improved from 6.64% in 2023 to 10.82% in 2024. This indicates that the company is more profitable, retaining a higher percentage of revenue as profit. This improvement points to better cost control and increased efficiency.

Return on Capital Employed (ROCE):

The ROCE increased from 12.79% in 2023 to 18.89% in 2024, indicating that the company is generating more profit from the capital it employs. This ratio measures overall efficiency and profitability, and a higher ROCE reflects more effective use of both debt and equity financing.

Dividend history