Economic Slowdown catalysed by few Individuals

Economic Slowdown catalysed by few  Individuals

To understand economic slowdown and massive talk about auto slowdown I tried to look into balance sheet and income statement of Maruti ( which has 50% market share in car segment ) .

Some facts

Profit & Loss account of Maruti Suzuki India

------------------- in Rs. Cr. -------------------

Mar '19

Mar '18

Mar '17

Mar '16

Mar '15

Sales Turnover	86,020.30	81,994.40	77,266.20	65,054.60	55,133.60
Reported Net Profit	7,500.60	7,721.80	7,350.20	5,364.30	3,711.20
Earning Per Share (Rs)	248.30	255.62	243.32	177.58	122.85
Equity Dividend (%)	1,600.00	1,600.00	1,500.00	700.00	500.00
Book Value (Rs)	1,527.46	1,382.33	1,206.01	989.28	784.70

Balance Sheet of Maruti Suzuki India

------------------- in Rs. Cr. -------------------

Mar '19

Mar '18

Mar '17

Mar '16

Mar '15

Reserves	45,990.50	41,606.30	36,280.10	29,733.20	23,553.20
Networth	46,141.50	41,757.30	36,431.10	29,884.20	23,704.20
Current Liabilities	15,976.80	16,915.50	13,865.00	11,564.70	8,013.60
Book Value (Rs)	1,527.46	1,382.33	1,206.01	989.28	784.70

I do not have last 3-4 months data but assuming that sales are down as per various report should this company can be called a loss making company which has fired thousands of employees .

Sitting on a net profit of 7500 cr which rose from 3711 cr in just 4 years . Reserves doubled in same 4 years . Its very simple the promoter wants book value not to go down and so be the very very high dividend payout rate ( 1600% on face value of a share ) so has reduced the current liability through salary cut/losses by firing employees .

Economic showdown is a result of lesser spending due to lesser earning . Those thousands employee will add more to slowdown and not solve the economic slowdown problems . If the Management had been prudent they would have withered the present situation at least for a year as has enough reserves ( 3 times of their current liability ) , can think of skipping/reducing extremely high dividend ( reward to shareholder but most going to promoter ) .

This is the analysis of just one company . If 100 such companies behave the same manner then the economic slowdown which could have been avoided will definitely balloon to unmanageable level as personal income will get reduced drastically ( layoffs ) which will have an impact on spending and consumption ,

Just think and analyse how economic slowdown are catalysed even by a profit making big company . Its not a God creation but a result of greed of few individuals .