Question

In: Accounting

The following financial data relate to Lakme, a cosmetic and toiletries company in the Tata Group...

The following financial data relate to Lakme, a cosmetic and toiletries company in the Tata Group of Companies for the period ending on 31 March 20X6 and 20X7.

Lakme Financial Data for the year ending on 31 March

(Rs. In lakh)

Particulars

20X6

20X7

Revenue

6561

9773

Operating profit (EBDIT)

625

839

Depreciation

88

115

EBIT

537

724

Interest

216

376

Tax

0

65

PAT

321

283

Share Capital

316

316

Reserve and Surplus

1130

1264

Borrowings

1473

1530

Capital Employed

2919

3110

Gross Fixed Assets

1339

1589

Earnings per Share (EPS)

10.7

8.97

Dividend per share (DPS)

5.00

5.00

Discussion Questions

  1. Comment on Lakme’s performance. Show computation to support your answer.
  2. How effectively has Lakme used its assets in generating sales?
  3. Do you think there is appropriate balance between equity and borrowed funds? Show relevant ratios.
  4. Critically evaluate Lakme’s profitability?
  5. Does Lakme have sufficient liquidity?

Solutions

Expert Solution

Answer is given below

ekkarill92 answered 1 year ago
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