3. Introduction to Company
• Name of the Company: Watawala Plantation PLC
• Location : Kandy Road , Kalaniya
• Products : Tea, Rubber, Palm oil
• Vision
“We will take a path no one has walked before and many will
want to follow”
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4. Industry Outlook and Contribution
• Sri Lanka’s tea industry is a significant
contributor to the National economy valued at
USD 658.4Mn and accounting for 0.8% of GDP
in 2015. It is the 2nd largest export commodity, 4th
largest foreign exchange earner and the single
largest employer in the agricultural sector.
• The contribution of the tea industry towards the
Sri Lankan economy is significant in respect of
the rural and socio-economic development,
poverty reduction and environmental conservation
initiatives the sector consciously engages in.
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6. Importance
• Decision Making
• Financial Forecasting and Planning
• Co-ordination is Facilitated
• Control is more Effective
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21. Cash Generating
2011/12 (%) 2012/13(%) 2013/14(%) 2014/15(%) 2015/16(%)
Return on capital Employed (cash) 9.77 16.94 8.93 17.35 12.94
Total Long term debt to cash
Generated from operations
283.82 152.02 307.55 158.57 217.18
Net cash from operating activities to
capital expenditure
172.95 61.11 194.09 323.72
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22. Conclusion
Company profitability increased focused marketing of high quality
products, attracting premium pricing and generating high margins.
Current ratio improved to 2.41 times and quick assets ratio to 1.59 times,
largely due to the cash generated from operations, held in short term
deposits pending investment in the proposed dairy project in early
2016/17 providing information that Current and quick ratios of the
company are not in the accepted level, although increasing.
Company have achieve optimal level of generating cash and reduce
usage of debt in order to allocate funds to ascertain assets.
Market price get high during the year hence industry market price is
low .
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23. Recommendation
1. The company should look at their current assets and
liability acquisitions policies and should make
actions to increase the current assets in an efficient
way.
2. The company should pay their consideration on
operating costs and purchasing policies of the
company.
3. Company’s dividend policy should be look at and
pay special consideration to attract future investors.
4. Pay attention to the industry change because
external factors (climate, politician rules)may
influence to the company performance in future.
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24. Limitations of Ratio analysis
1. Historical Information.
2. Different Accounting Policies.
3.Ratios Account for one Variable.
4. Seasonal Factors Affect Financial Data.
5.Companies Can Use Window Dressing to
Manipulate Their Financial Statements.
6.Ratio Analysis Just Gives you Numbers, not
Causation Factors.
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25. Overall Idea
1. Forecasting and Planning
2. Budgeting
3. Measurement of Operating Efficiency
4. Communication
5. Control of Performance and Cost
6. Inter-firm Comparison
7. Indication of Liquidity Position
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26. Continue………….
8. Indication of Long-term Solvency Position
9. Indication of Overall Profitability
10. Signal of Corporate Sickness
11. Aid to Decision-making
12. Simplification of Financial Statements
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