Presentation1

[Virtual Presenter] We are thrilled to present our group assignment for MBM 5132 Accounting for Managerial Decision Making submitted by a group of six students. This group assignment is the second one in the Master of Business Management program at the Institute of Human Resource Advancement University of Colombo and is focused on the subject of Accounting for Managerial Decision Making as part of the course MBM 5132 Group Assignment Group No. 2. The group assignment consists of six students each with a unique student ID number as follows: D P Jayawardana: MBM/12/2024/18 W T H Botheju: MBM/12/2024/04 A D N Perera: MBM/12/2024/29 R.Sakthitharan: MBM/12/2024/32 A B T M T M Bandaranayake: MBM/11/2023/06 M W S H Marasinghe: MBM/11/2023/18 We take pride in presenting our work and assure that our assignment meets the highest standards of academic integrity and professionalism. We hope that our submission will contribute to the ongoing academic discourse and provide valuable insights for future generations of business leaders..

[Audio] D P Jayawardana W T H Botheju A D N Perera R.Sakthitharan A B T M T M Bandaranayake and M W S H Marasinghe comprise the group. Our analysis of the financial statements of Hatton Plantations P-L-C and Horona Plantations P-L-C for 2022 & 2023 was submitted on 27.06.2024..

[Audio] The group will discuss a group assignment submission for MBM 5132 Accounting for Managerial Decision Making by a group of 6 students. The submission includes a comprehensive analysis of the company's financial statements specifically the Statement of Comprehensive Income Statement of Financial Position and Cash Flow Statement. Through this analysis the group aims to provide insight into the financial health and performance of the company..

[Audio] Financial statement analysis is a crucial tool for businesses to make informed decisions. It entails an examination of financial statements including the income statement balance sheet and cash flow statement to obtain insights into a company's financial health and performance. Several financial statement analysis methods are available such as horizontal analysis vertical analysis and ratio analysis. Horizontal analysis compares the financial data of a company across different periods to identify trends and patterns. Vertical analysis compares the financial data of a company to its industry averages to identify areas for improvement and potential risks. Ratio analysis involves calculating ratios from the financial statements to gain insights into a company's liquidity solvency profitability and efficiency. Businesses can use these analysis methods to make informed decisions about credit risk investment opportunities cost management cost-cutting measures and strategic partnerships..

[Audio] We will discuss the various types of ratios their calculations and their practical applications in our presentation. We believe that ratio analysis is an essential tool for evaluating a company's financial health and performance and we are confident that our presentation will provide valuable insights and recommendations to our audience..

[Audio] Our analysis focuses on profitability ratios investor ratios/market ratios liquidity ratios leverage ratios efficiency ratios/asset management and debt management/gearing ratios. Under each of these categories we examined various ratios and their implications for the company's financial health and performance. Our findings suggest that the company's profitability ratios are below average indicating challenges in generating profits. However investor ratios/market ratios indicate positive growth prospects. Liquidity ratios show sufficient short-term liquidity to meet obligations. Leverage ratios indicate moderate debt which is manageable. Efficiency ratios/asset management ratios reveal effective asset utilization. Finally debt management/gearing ratios suggest healthy gearing within debt capacity. Our analysis provides valuable insights into the company's financial health and performance informing managerial decision-making..

[Audio] We present the profitability ratios submitted by D P Jayawardana W T H Botheju A D N Perera R.Sakthitharan A B T M T M Bandaranayake and M W S H Marasinghe. These ratios are essential for investors and analysts to assess a company's financial health and performance over a specific duration. These ratios are crucial for evaluating a company's ability to generate profit relative to its revenue operating costs assets or shareholders' equity..

[Audio] We are analyzing the Gross Profit Margin for Horana Plantation P-L-C and Hatton Plantation P-L-C for the years 2022 and 2023. As you can see from the data Horana Plantation P-L-C had a higher Gross Profit Margin in both years compared to Hatton Plantation P-L-C--. This could be due to various factors such as efficient cost control measures better marketing strategies and higher demand for their products. In conclusion analyzing the Gross Profit Margin for these two companies can provide valuable insights into their financial performance and help managers make informed decisions..

[Audio] We present an analysis of the gross profit margins for Horana Plantations P-L-C and Hatton Plantations P-L-C from 2022 to 2023. In 2022 Horana Plantations P-L-C achieved a gross profit margin of 14.47% while Hatton Plantations P-L-C had a lower margin of 6.67%. However both companies showed improvement in their operations in 2023. Horana Plantations P-L-C achieved a gross profit margin of 32.5% while Hatton Plantations P-L-C attained 24.47%. This increase in gross profit margins suggests that both companies improved their cost efficiency and revenue generation. Overall our analysis reveals significant insights into the profitability and cost management of these two companies..

[Audio] We will discuss the Operating Profit Margin of Horana Plantation P-L-C and Hatton Plantation P-L-C for the years 2022 and 2023..

[Audio] In 2022 Hatton Plantations P-L-C had a higher operating profit margin of 9.63% compared to Horana's 8.1% indicating better operational efficiency. In 2023 both companies significantly improved their operating profit margins with Horana's margin increasing up to 26% and Hatton's to 27.91%. This indicates that both companies were able to optimize their operations and increase their profit margins. We believe that this analysis provides valuable insights into the performance of these two companies and can be used to inform decision-making for managers and investors..

[Audio] In 2022 and 2023 we conducted a thorough analysis of the financial performance of Horana Plantation P-L-C and Hatton Plantation P-L-C--. Our findings reveal that Horana Plantation P-L-C had a Net Profit Margin of 1.65% in 2022 and 4.48% in 2023 while Hatton Plantation P-L-C had a Net Profit Margin of 10.6% in both years. These differences can be attributed to various factors such as revenue operating expenses and capital expenditures. Furthermore our analysis shows that both companies have seen an increase in their Net Profit Margin over the years which indicates their financial health..

[Audio] Our analysis shows that both Hatton and Horana experienced significant improvements in their Net Profit Margin in 2023. Hatton's margin rose from 10.6% in 2022 to 4.48% in 2023 indicating a marked improvement in operational efficiency. Similarly Horana's margin increased from 1.5% in 2022 to 22.39% in 2023 indicating a significant improvement in operational efficiency. Our group comprises six students including D P Jayawardana W T H Botheju A D N Perera R.Sakthitharan A B T M T M Bandaranayake and M W S H Marasinghe. We would like to thank our instructor for providing us with the opportunity to complete this group assignment and for guiding us through the research process. Our findings will be submitted..

[Audio] We analyzed the Return on Total Assets (Net Profit/Average Total Assets)*100 of Horana Plantation P-L-C and Hatton Plantation P-L-C for the years 2022 and 2023. Our analysis revealed that Horana Plantation P-L-C had a Return on Total Assets of 1.09% in 2022 and 4.08% in 2023 while Hatton Plantation P-L-C had a Return on Total Assets of 10.87% in 2022 and 26.9% in 2023. Our analysis highlights that Horana Plantation P-L-C and Hatton Plantation P-L-C have different Return on Total Assets and their performance in the years 2022 and 2023..

[Audio] Our analysis of the financial data of these two companies revealed that Hatton Plantations P-L-C outperformed Horana Plantations P-L-C in terms of Return on Total Assets (R-O-T-A-) from 2022 to 2023. In 2022 Hatton's rota was significantly higher than Horana's indicating Hatton's superior efficiency in generating profit from its assets. By 2023 both companies improved their rota with Horana increasing to 4.08% and Hatton to an impressive 26.9%. However Hatton's growth was much stronger than Horana's demonstrating a much stronger ability to convert its asset base into net profit. These trends reflect improved operational effectiveness and financial performance for both companies. Our analysis provides valuable insights into the financial performance of these two companies and their ability to generate profit from their assets..

[Audio] We present our findings on the Return on Capital Employed (R-O-C-E-) of two companies for the financial years 2022 and 2023. Our analysis shows that the second company had a roce of 41.5% in 2023 while the first company had a roce of 3.42% in 2022 and 30.9% in 2023. These findings suggest that the second company had a higher roce in both years compared to the first company..

[Audio] Rewritten Text: Our discussion is focused on the financial performance of two leading plantation companies in Sri Lanka. We can see from the data that Hatton Plantations P-L-C had a significantly higher Return on Capital Employed (R-O-C-E-) of 11.15% in the year 2022 compared to Horana's 3.42% indicating better efficiency in generating returns from its capital. By 2023 both companies showed remarkable improvement with Horana's roce increasing to 30.9% and Hatton's to 41.5%. This indicates enhanced profitability and effective use of capital. We believe that they will continue to lead the industry and set a high standard for others to follow..

[Audio] In 2022 Horana Plantation P-L-C had a R-O-E of 4.07% while Hatton Plantation P-L-C had a R-O-E of 16.92%. In 2023 Horana Plantation P-L-C had a R-O-E of 18.28% while Hatton Plantation P-L-C had a R-O-E of 37.19%. These results show that Hatton Plantation P-L-C outperformed Horana Plantation P-L-C in terms of R-O-E in both years. Our analysis provides valuable insights into the financial performance of these two companies and can be used to inform future decision-making..

[Audio] Hatton Plantations P-L-C demonstrated significantly higher profitability relative to owners' equity in 2022 achieving a R-O-E of 16.92% compared to Horana's 4.07%. In 2023 both companies showed improvement with Horana's R-O-E increasing to 18.28% and Hatton's soaring to 37.19%. However despite Horana's notable improvement Hatton continues to outperform demonstrating a stronger ability to provide returns to its equity holders indicating superior financial performance and management. This growth reflects enhanced efficiency in generating profits from owners' equity..

[Audio] We will present a comparison of the administrative expenditure to sales ratio for Horona Plantation P-L-C and Hatton Plantation P-L-C in 2022 and 2023. The findings reveal that the administrative expenditure to sales ratio for Horona Plantation P-L-C was 7.2% in 2022 and 6.18% in 2023 respectively. Meanwhile for Hatton Plantation P-L-C the administrative expenditure to sales ratio was 3.25% in 2022 and 3.71% in 2023..

[Audio] Horana Plantation P-L-C and Hatton Plantation P-L-C are two of the largest tea plantations in Sri Lanka. In the year 2022 Horana marked an administrative expenditure-to-sales ratio of 7.2% while Hatton marked 3.25%. Despite the increase in administrative costs in 2023 Horana's ratio decreased to 6.18% showing improved cost efficiency. In contrast Hatton's ratio increased slightly to 3.71%. However Horana's administrative costs were significantly higher than Hatton's indicating better management of administrative expenses relative to their sales. In this presentation we will explore the factors that contributed to Horana's higher administrative costs relative to sales and how they were able to improve their cost efficiency in 2023. We will also compare and contrast the administrative costs of both Horana and Hatton Plantation P-L-C highlighting the strengths and weaknesses of each company's management of administrative expenses..

[Audio] In the year 2022 Horona Plantation P-L-C had a liquidity ratio of 0.38 times while Hatton Plantation P-L-C had a liquidity ratio of 1.40 times. Horona Plantation P-L-C had a lower liquidity ratio in 2022 compared to Hatton Plantation P-L-C-. In the year 2023 Horona Plantation P-L-C had a liquidity ratio of 0.54 times while Hatton Plantation P-L-C had a liquidity ratio of 2.43 times. Horona Plantation P-L-C had a lower liquidity ratio in 2023 compared to Hatton Plantation P-L-C-. In conclusion based on the liquidity ratios for the years 2022 and 2023 it is evident that Hatton Plantation P-L-C had a higher liquidity ratio compared to Horona Plantation P-L-C--. This indicates that Hatton Plantation P-L-C had a stronger financial position and was better able to meet its short-term obligations than Horona Plantation P-L-C-..

[Audio] Hatton's current ratio was 1.40 times in 2022 while Horana's was 0.38 times. In 2023 Horana improved its current ratio to 0.54 times while Hatton significantly increased its current ratio to 2.43 times. This improvement in both companies' current ratios suggests enhanced liquidity. Overall Hatton Plantations P-L-C maintained a stronger liquidity position compared to Horana Plantations P-L-C-..

[Audio] Horona Plantation PLC's quick asset ratios for 2022 and 2023 are presented. In 2022 Horona Plantation PLC's quick asset ratio was 0.14 times meaning the current assets were 0.14 times the current liabilities. In 2023 Horona Plantation PLC's quick asset ratio was 0.18 times meaning the current assets were 0.18 times the current liabilities. Hatton Plantation PLC's quick asset ratio in 2022 was 0.8 times meaning the current assets were 0.8 times the current liabilities. In 2023 Hatton Plantation PLC's quick asset ratio was 1.46 times meaning the current assets were 1.46 times the current liabilities..

[Audio] Our group assignment for MBM 5132 Accounting for Managerial Decision Making for Master of Business Management Course No.12/2024 presents a financial analysis of two leading tea plantation companies in Sri Lanka Hatton Plantations P-L-C and Horana Plantations P-L-C over the years 2022 and 2023. Our group consists of six students including D P Jayawardana W T H Botheju A D N Perera R.Sakthitharan A B T M T M Bandaranayake and M W S H Marasinghe. We have analyzed the financial performance of both companies and found that Hatton Plantations P-L-C consistently maintained a stronger quick asset ratio compared to Horana Plantations P-L-C indicating better short-term liquidity. By the end of 2023 both companies improved their quick asset ratios with Horana increasing to 0.18 times and Hatton significantly rising to 1.46 times. This suggests enhanced liquidity for both companies and Hatton maintained a superior position reflecting better financial stability and a lower risk of liquidity problems compared to Horana Plantations P-L-C-..

[Audio] We have analyzed the cash ratios for Horona Plantation P-L-C and Hatton Plantation P-L-C for the years 2022 and 2023. Horona Plantation PLC's cash ratio in 2022 was 0.026 times while Hatton Plantation PLC's cash ratio in 2022 was 0.53 times. In contrast Horona Plantation PLC's cash ratio in 2023 was 0.0277 times whereas Hatton Plantation PLC's cash ratio in 2023 was 0.75 times. These findings reveal the differences in the liquidity position of these two companies..

[Audio] We will provide an analysis on the cash ratios of Horana and Hatton Plantations PLC. In 2022 Hatton's cash ratio was significantly higher than Horana's indicating that Hatton was better able to cover its current liabilities with its most liquid assets. This suggests that Hatton had a stronger financial position compared to Horana. However both companies experienced changes in their cash ratios by 2023. Horana's cash ratio increased slightly to 0.0277 times while Hatton's cash ratio improved significantly to 0.75 times. This substantial rise in Hatton's cash ratio indicates enhanced liquidity and a stronger financial position while Horana's minimal increase suggests ongoing challenges in maintaining sufficient liquid assets to meet short-term liabilities. Therefore we recommend that Horana focus on improving its liquidity position to maintain a stronger financial footing in the long run..

[Audio] Leverage ratios/solvency ratios are financial indicators that assess a company's debt compared to its equity or assets. These ratios are crucial for evaluating the financial structure and risk of a company. By understanding these ratios managers can make informed decisions about their company's financial stability and growth prospects. We will provide examples of these ratios and their interpretation..

[Audio] We can rewrite the given text to: The Debt to Asset Ratio for Horona Plantation P-L-C provides valuable insights into the financial health of the company. Or alternatively we can remove the greetings sentence to get: The Debt to Asset Ratio for Horona Plantation P-L-C provides valuable insights into the financial health of the company..

[Audio] We analyzed the debt-to-asset ratios of Horana Plantations P-L-C and Hatton Plantations P-L-C over a two-year period. Our findings revealed significant differences in the way these companies financed their assets. While Horana relied heavily on debt to finance its assets in 2022 with a debt-to-asset ratio of 0.3 times Hatton's debt-to-asset ratio was significantly lower at 0.12 times. By 2023 Horana's ratio slightly decreased to 0.27 times while Hatton's ratio dropped significantly to 0.058 times. This decline for both companies especially Hatton suggests reduced debt levels relative to their assets indicating improved financial stability and a lower risk profile with Hatton showing a particularly strong reduction in debt dependency. Our analysis underscores the importance of maintaining a healthy balance between debt and equity financing in order to achieve financial stability and sustainability..

[Audio] We recommend that Horona Plantation P-L-C implement a debt reduction strategy to improve its financial position..

[Audio] In this slide deck we will discuss the debt-to-equity ratio of Horana Plantations P-L-C and Hatton Plantations P-L-C--. Horana had a debt-to-equity ratio of 1.5 times in 2022 which is considered high leverage compared to Hatton's 0.20 times. This indicates that Horana had a significant amount of debt relative to its equity. However the ratio of Horana Plantations P-L-C slightly decreased to 1.28 times in 2023 showing a reduction in leverage compared to the previous year indicating that Horana is making progress towards reducing its debt-to-equity ratio. On the other hand Hatton Plantations PLC's debt-to-equity ratio significantly decreased to 0.09 times in the same year indicating that Hatton had very low debt relative to its equity. This indicates that Hatton is in a stronger financial position with minimal reliance on debt. In conclusion while Horana has made progress in reducing its debt-to-equity ratio it still has relatively high leverage compared to Hatton which is in a stronger financial position with minimal reliance on debt..

[Audio] The I-C-R presented for Hatton Plantation P-L-C in 2022 and 2023 is as follows: The I-C-R in 2022 is 1.38 times and 4.90 times respectively in 2023..

[Audio] This slide presents the interest coverage ratio of Hatton Plantations P-L-C and Horana Plantations P-L-C for the year 2022. The slide compares the financial performance of both companies and highlights their interest coverage ratios. We can see that Hatton had a higher interest coverage ratio of 3.87 times compared to Horana's 1.38 times. This indicates that Hatton was better able to cover its interest expenses with its earnings. By 2023 both companies improved significantly with Horana's ratio increasing to 4.90 times and Hatton's to 7.80 times. This improvement reflects enhanced earnings and a stronger capacity to meet interest obligations. The superior interest coverage ratio of Hatton Plantations P-L-C highlights its stronger financial health and lower risk of financial distress compared to Horana Plantations P-L-C--. This slide provides valuable insights into the financial performance of these two companies and can be used as a basis for further analysis and decision making..

[Audio] Horona Plantation P-L-C and Hatton Plantation PLC's financial performance for 2022 and 2023. The equity ratio of Horona Plantation P-L-C in 2022 was 0.20 times and 0.21 in 2023. Similarly the equity ratio of Hatton Plantation P-L-C in 2022 was 0.6 times and 0.64 times in 2023. These ratios indicate the financial health of the two companies and their ability to generate profits..

[Audio] We will analyze the financial stability and risk of Hatton Plantations P-L-C and Horana Plantations P-L-C--. By examining their equity ratios in 2022 and 2023 we will understand their financial positions relative to their assets. In 2022 Hatton Plantations P-L-C had an equity ratio of 0.6 times while Horana Plantations P-L-C had an equity ratio of 0.20 times. This suggests that Hatton's equity position is stronger relative to its assets compared to Horana. By 2023 both companies saw slight improvements in their equity ratios. Horana's equity ratio increased to 0.21 times while Hatton's equity ratio increased to 0.64 times. This suggests that Hatton continues to maintain a stronger financial structure with a higher proportion of equity funding its assets reflecting greater financial stability and lower risk compared to Horana..

[Audio] Our analysis has uncovered critical financial indicators for our assigned company. These ratios are essential for assessing the performance value and profitability of a business. Investors use these ratios to make informed decisions and maximize their returns. We have identified important trends and patterns that provide insight into the financial well-being of the company. These ratios are critical for any investor seeking to make knowledgeable decisions and achieve long-term success..

[Audio] We will be discussing two of the largest companies in the stock market. We will be looking at their Earnings Per Share (E-P-S--) for the years 2022 and 2023. As you can see from the table both companies have performed well in terms of E-P-S--. Horana PLC's E-P-S increased from 1.7 in 2022 to 6.8 in 2023 while Hatton PLC's E-P-S increased from 2.4 in 2022 to 7.21 in 2023. We believe that these strong E-P-S figures indicate that both companies are profitable and well-managed..

[Audio] We analyzed the financial performance of Hatton and Horana and found that Hatton had a dividend yield of 21% for both years which indicates a strong financial position and a commitment to returning value to its shareholders. In contrast Horana did not pay dividends in both years because it reinvested its profits and did not have enough to declare dividends..

[Audio] We present the dividend cover of two companies Hatton P-L-C and Horona P-L-C for the years 2022 and 2023. Hatton PLC's dividend cover in 2022 was 4.8 times and in 2023 it was 4.87 times. This indicates that the company's earnings were able to cover its dividend payments providing a sense of financial stability. Horona P-L-C on the other hand did not report dividend cover in both years as the dividend was not declared. This means that the company's earnings were not sufficient to cover its dividend payments and therefore the company's financial stability cannot be determined from this metric alone. In conclusion while dividend cover is an important metric for investors to consider when making investment decisions it should be analyzed in conjunction with other financial ratios and statements to gain a more comprehensive understanding of a company's financial health..

[Audio] We have analyzed the Price Earnings (P/E) ratios of two leading companies in the Sri Lankan stock market Horana P-L-C and Hatton P-L-C--. The P/E ratio of Horana P-L-C decreased from 12.88 times in 2022 to 7.72 times in 2023 indicating a decrease in investor confidence in the company's earnings potential. Similarly the P/E ratio of Hatton P-L-C decreased from 3.5 times in 2022 to 2.59 times in 2023 indicating a decrease in investor confidence in the company's earnings potential. This trend suggests that investors are becoming more cautious about investing in companies with high P/E ratios as they may indicate overvaluation and a potential for future declines in earnings..

[Audio] Our research shows that Hatton Plantation P-L-C is the better investment choice due to its higher revenue returns on total assets and equity and return on capital. Additionally Hatton Plantation P-L-C has improved its efficiency with a reduced admin expenses to sales ratio. Hatton Plantation PLC's liquidity ratios including the current ratio of 2.43 quick ratio of 1.46 and cash ratio of 0.75 are significantly stronger than Horana Plantation P-L-C indicating better short-term financial health. In terms of debt management Hatton Plantation P-L-C has lower debt ratios indicating a more conservative method to financing. This shows lower financial risk. Furthermore Hatton Plantation P-L-C has a considerable dividends yield of 21% making it appealing for income-focused investors..