DANKOTUWA PORCELAIN PLC

Main objective of this documentation is comprehensively analyzing 2013,2014,2015,2016 & 2017 financial annual reports of DANKOTUWA PORCELAIN PLC for get the clear idea about the existing financial position of DANKOTUWA PORCELAIN PLC . I have focused on mainly following major techniques

·         Horizontal Analysis

·         Vertical Analysis.

·         Ratio Analysis

 Horizontal Analysis (Trend Analysis)

Horizontal analysis is the comparison of historical financial information over a series of reporting periods, or of the ratios derived from this financial information. The intent is to see if any numbers are unusually high or low in comparison to the information for bracketing periods, which may then trigger a detailed investigation of the reason for the difference. The analysis is most commonly a simple grouping of information that is sorted by period, but the numbers in each succeeding period can also be expressed as a percentage of the amount in the baseline year, with the baseline amount being listed as 100%.

·         Trend Analysis of the Income Statement

·         Trend Analysis of the Balance sheet

A common problem with horizontal analysis is that the aggregation of information in the financial statements may have changed over time, due to ongoing changes in the chart of accounts, so that revenues, expenses, assets, or liabilities may shift between different accounts and therefore appear to cause variances when comparing account balances from one period to the next.

 (1). Trend Analysis of the Income Statement

Elements of Income statements have been analyzed for the past five years and for the purpose of comparing them, trends have been plotted in the same graph. Here the base year was taken as 2013.

(1).A. Income Statement Trend Analysis on Revenue Perspective

When comparing to base year always gross profit going down to till 2015, but in 2016 it goes up and 2017 it came down, although it is not beyond the base line.

Analyze this according to the base year, over the year wise current assets went up small amount and Total non-current asset went up in high amount. Hence both were in up and Total Assets also came up. So both current and non-current assets are equally important for the company. While current assets are involved and used for ready income-generation, non-current assets are generally involved with profit generation.