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Case study Anand Nagar Electricity co.

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The document discusses the privatization of AEB, a state-controlled electricity company, in 2000. It provides financial data from 2001-2004 showing that after privatization, the company's revenues, profits, assets, and dividends increased while costs, debt, and number of employees decreased. This indicates that privatizing the company achieved the goal of generating more electricity funds and improving performance.

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Case study Anand Nagar Electricity co.
Case study Anand Nagar Electricity co.
AEB was operated & controlled under the state of Anandnagar since 1961, but state Govt. was not able to generate sufficient funds out of it. Privatization was intended to pave the way for the company, as the demand for electricity always exceeded the supply so it was privatized in the year (2000). At the time of privatization, a large financial institution valued the company at `4,000 million.
(Rs. In million) Revenues Op. Profit Taxes PBDT PAT Dividends Salaries Tot Asset Capital Exp. Debtors Creditors Employees (num) P/E Ratio CPI 2001 13500 810 160 900 650 200 3000 3000 500 6000 4500 32000 0 100 2002 14250 1100 200 960 900 320 3000 3600 900 3200 2400 31400 10.5 102.7 2003 17500 1790 300 1030 1490 600 2700 4500 1750 3000 2300 30500 12 105.8 2004 19500 2730 400 1190 2330 900 2600 5750 2250 3600 2400 30100 11.5 107.4
35000 30000 25000 20000 2001 2002 15000 2003 2004 10000 5000 2004 0 Revenues 2003 Op. Profit Taxes PAT 2002 Dividends Salaries 2001 Tot Asset Employees CPI
Profit after the payment of tax (PAT) of the firm increased. Revenue of the company increased from `13500 million in the year 2001 to `19500 million in the year 2004. Profit of the firm increased so payment of dividend to shareholders increased. Profit of the firm increased so the companys debt value decreased from `6000 mn (2001)to `3600 mn (2004)
Payment of employees decreased from `3000mn (2001) `2600mn (2004),and number of employees also decreased. PE ratio also increased from 10.5(2001) 11.5(2004) Progress of CPI also increased from 100(2001) 107.4(2004)
Stake holders are the company investors. They may be employees of the organization, share holders, govt. etc. Stake holders are also some what owners of the organization so they should be informed about the performance and change in policy of the organization. In case of AEC we can see that stake holders are fully satisfied as dividend of the company increased from time to time, as the company is earning profit.
Case study Anand Nagar Electricity co.
According to the data provided we can say that, yes the company been able to fulfill their objectives. The objective of the company was to maximize the supply of power and fulfill the day to day raising demand of electricity and also to gain high revenues. By analyzing the data of given four years we can say that it has fulfilled its objective because the revenue and profit has continuously increased and it has also increased in the asset side also whereas the creditors has decreased.
As per the data provided we can see the Debtors are decreasing year on year. Decreasing Debtors can improve the cash flow of the company, at the same time somewhere company looses its client base.
After privatization, AEC is generating sufficient funds and earning profits. And debt of the firm has decreased from( 2001 to 2004). And the PE ratio and CPI also increased. As a whole, we can say that after privatization the company's performance has increased leading to high revenue generation and creating optimum profit which results in regular and high distribution of dividends to its stakeholders.
Case study Anand Nagar Electricity co.
Case study Anand Nagar Electricity co.

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Case study Anand Nagar Electricity co.

  • 3. AEB was operated & controlled under the state of Anandnagar since 1961, but state Govt. was not able to generate sufficient funds out of it. Privatization was intended to pave the way for the company, as the demand for electricity always exceeded the supply so it was privatized in the year (2000). At the time of privatization, a large financial institution valued the company at `4,000 million.
  • 4. (Rs. In million) Revenues Op. Profit Taxes PBDT PAT Dividends Salaries Tot Asset Capital Exp. Debtors Creditors Employees (num) P/E Ratio CPI 2001 13500 810 160 900 650 200 3000 3000 500 6000 4500 32000 0 100 2002 14250 1100 200 960 900 320 3000 3600 900 3200 2400 31400 10.5 102.7 2003 17500 1790 300 1030 1490 600 2700 4500 1750 3000 2300 30500 12 105.8 2004 19500 2730 400 1190 2330 900 2600 5750 2250 3600 2400 30100 11.5 107.4
  • 6. Profit after the payment of tax (PAT) of the firm increased. Revenue of the company increased from `13500 million in the year 2001 to `19500 million in the year 2004. Profit of the firm increased so payment of dividend to shareholders increased. Profit of the firm increased so the companys debt value decreased from `6000 mn (2001)to `3600 mn (2004)
  • 7. Payment of employees decreased from `3000mn (2001) `2600mn (2004),and number of employees also decreased. PE ratio also increased from 10.5(2001) 11.5(2004) Progress of CPI also increased from 100(2001) 107.4(2004)
  • 8. Stake holders are the company investors. They may be employees of the organization, share holders, govt. etc. Stake holders are also some what owners of the organization so they should be informed about the performance and change in policy of the organization. In case of AEC we can see that stake holders are fully satisfied as dividend of the company increased from time to time, as the company is earning profit.
  • 10. According to the data provided we can say that, yes the company been able to fulfill their objectives. The objective of the company was to maximize the supply of power and fulfill the day to day raising demand of electricity and also to gain high revenues. By analyzing the data of given four years we can say that it has fulfilled its objective because the revenue and profit has continuously increased and it has also increased in the asset side also whereas the creditors has decreased.
  • 11. As per the data provided we can see the Debtors are decreasing year on year. Decreasing Debtors can improve the cash flow of the company, at the same time somewhere company looses its client base.
  • 12. After privatization, AEC is generating sufficient funds and earning profits. And debt of the firm has decreased from( 2001 to 2004). And the PE ratio and CPI also increased. As a whole, we can say that after privatization the company's performance has increased leading to high revenue generation and creating optimum profit which results in regular and high distribution of dividends to its stakeholders.