Kingfisher Airlines was founded in 2005 by Dr. Vijay Mallya and grew to become one of the largest carriers in India's domestic market. However, from 2008 onward, the airline began reporting substantial losses due to economic downturn and high costs. By 2012, Kingfisher's debts had reached over $1.5 billion and it had defaulted on loans from multiple banks. Restructuring efforts by lenders to reduce interest rates and convert debt to equity failed to save the struggling carrier.

1. Group Number – 6
Dheeraj Chaubey
Mohit Shukla
Mrigankshi
Venkat

2. Introduction
• Owned by “Dr. Vijay Mallya” of
United Beverages Group.
• Started its operations on May 9,
2005, a flight from Mumbai to
Delhi.
• Kingfisher the largest carrier in the
shrinking domestic Indian market
• December 2009, Kingfisher
Airlines had the second largest
share in India's domestic air travel
market.
• Passenger growth increased 61.1%
year-on-year in Mar-2009

3. Rise Of The King
• First airline in India to operate
with all new aircrafts.
• First airline in the country to
order the “Airbus A380”.
• Offers several unique services to
its customers.
• First Indian airline to have in-
flight entertainment (IFE) systems
on every seat even on domestic
flights.
• Alliance was formed with Dish
TV to provide live TV in-flight.

4. Achievements
• Kingfisher Red, Kingfisher
Airline's low-cost class on
domestic routes.
• Kingfisher Airlines has received
three global awards at the Skytrax
World Airline Awards 2010
• Brand Leadership Award.
• India's only 5 Star airline, rated
by Skytrax and 6th airline in the
world

5. Start of the crisis
• Ever since the airline commenced
operations in 2005, it has been
reporting losses.
• In 2008, more losses due to
economic downturn.
• After acquiring Air Deccan,
Kingfisher suffered a loss of over
1,000 crore for three consecutive
years.
• By early 2012, the airline
accumulated losses of over
Rs 7,000 crore

6. Contd….
• By Feb 2012, Kingfisher has been
declared NPA by following banks
– SBI
– Bank of Baroda
– PNB
– IDBI
– Central bank
– BOI
– Corporation Bank
• Loss> US$1.50 billion

7. Total Dues

8. Current Ratio
• A liquidity ratio that measures a company's ability to pay short-term obligations. The higher
the current ratio, the more capable the company is of paying its obligations.
CR = Current Assets / Current Liabilities.
Current Asset :- All assets that are expected to be converted into cash within one year Current
assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses
and other liquid assets that can be readily converted to cash.
Current Liabilities:- A company's debts or obligations that are due within one year. Current
liabilities include short term debt, accounts payable, accrued liabilities and other debts.

9. Current Ratio
(Rs in Crs)

10. Quick Ratio
• An indicator of a company's short-term liquidity. The quick ratio measures a
company's ability to meet its short-term obligations with its most “liquid assets”.
The higher the quick ratio, the better the position of the company
QR= Liquid Assets/ Current Liabilities..
[Liquid Assets = Current Assets – (Inventories + prepaid expenses)]
Liquid Asset:- Liquid assets are generally regarded in the same light as
cash because their prices are relatively stable when they are sold on the open
market.

11. Quick Ratio
(Rs in Crs)

12. Gross Profit Ratio
• Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a
percentage. It expresses the relationship between gross profit and sales.
Gross Profit Ratio = (Gross profit / Net sales) × 100
Net sales means that sales minus sales returns.
Gross profit would be the difference between net sales and cost of goods sold

13. Gross Profit Ratio

14. DEBT-EQUITY RATIO

15. DEBT-EQUITY RATIO
YEAR 2011 2010 2009 2008 2007
TOTAL DEBT 7057.08 7922.60 5665.56 934.38 916.71
YEAR 2011 2010 2009 2008 2007
TOTAL EQUITY -2951.20 -3870.47 -2125.35 188.78 373.68
YEAR/ RATIO 2011 2010 2009 2008 2007
D/B RATIO -2.39 (0.00) -2.04 (0.00) 2.66 ( 0.00) 4.94 2.45
(Rupees in crores)

16. FIXED ASSET TURNOVER
RATIO

17. FIXED ASSET TURNOVER
RATIO
YEAR 2011 2010 2009 2008 2007
F.S RATIO 2.90 2.57 4.73 5.80 5.52
(Rupees in crores)

18. NET WORKING CAPTIAL
• It is the difference of Current Assets and Current Liabilities.
• NWC = Current Assets – Current Liabilities
• Net Working Capital is a measurement of the operating liquidity available
for a company to use in developing and growing its business.
• If NWC is high, it indicates that an entity has a working capital
deficiency,
• If NWC is low, it indicates that an entity has a working capital deficit.

19. NET WORKING CAPTIAL
YEAR 2011 2010 2009 2008 2007
C.A 3105.10 2637.17 2199.69 659.59 1090.06
YEAR 2011 2010 2009 2008 2007
C. L 4172.28 3554.57 3540.23 676.60 493.49
YEAR/ RATIO 2011 2010 2009 2008 2007
NWC -1067.18 -917.4 -1340.54 -17.01 596.57
(Rupees in crores)

20. EARNINGS PER SHARE
• Earnings per share serves as indicator of a company's profitability.
EPS= Net profit available to equity-holders
Number of ordinary shares outstanding
• Earnings per share is generally considered to be the single most important
variable in determining a share's price.

21. EARNINGS PER SHARE
YEAR 2011 2010 2009 2008 2007
EPS -20.64 -61.95 -60.50 -13.85 -30.97
(Rupees in crores)

22. FINANCIAL LEVERAGE
• The degree to which an investor or business is utilizing
borrowed money.
FINANCIAL LEVERAGE= TOTAL ASSETS
OWNER’S EQUITY.
• Financial leverage is a way for achieving bigger results with
relatively small amount of capital/financial resources.
• Companies that are highly leveraged may be at
risk of bankruptcy if they are unable to make payments on
their debt; they may also be unable to find new lenders in
the future.

23. FINANCIAL LEVERAGE
YEAR 2011 2010 2009 2008 2007
F.L -1.39 -1.04 -1.66 5.94 3.45
(Rupees in crores)

24. Equity Ratio
• The equity ratio is a financial ratio indicating the relative proportion
of equity used to finance a company's assets.
Equity Ratio=(Total Shareholders Equity)/(Total Assets)
• A high ER would expose creditors to a higher risk.
• ER should neither be very high nor very low.

25. Equity Ratio
2011 2010 2009 2008 2007
-2951.20 -3870.47 -2125.35 188.78 373.68
4105.88 4052.13 3540.21 1123.16 1290.39
-0.71877 -0.955169 -0.600345 0.168079 0.289586

26. DEBT TO TOTAL CAPITAL RATIO :
• The ratio measures a company's capital structure , financial
solvency , and degree of leverage, at a particular point in time.
Debt To Total Capital Ratio=Total Debt/Total Assets
Debt: Is an obligation owed by one party (the debtor) to a second
party

27. DEBT TO TOTAL CAPITAL RATIO :
2011 2010 2009 2008 2007
7057.08 7922.60 5665.56 934.38 916.71
4105.88 4052.13 3540.21 1123.16 1290.39
1.7187 1.9551 1.6003 0.8319 0.71041
(Rupees in crores)

28. Inventory Turnover Ratio
• It is a measure of the number of times inventory is sold or used in a time period
such as a year.
• Inventory Turnover Ratio :(Cost of goods sold) / (Average Inventory).
• Cost of goods sold = (Sales) – (Gross Profit).
• Cost of goods sold (COGS) refer to the inventory costs of those goods a business
has sold during a particular period.
• Average Inventory = (Opening Stock + Closing Stock) / 2.
• Inventory : describes the goods and materials that a business holds for the
ultimate purpose of resale.
 Indicates how fast inventory is sold.
 High ITR indicates higher liquidity.

29. Inventory Turnover Ratio
2011 2010 2009 2008 2007
5289.34 4747.92 5822.37 1781.46 2062.61
182.2 159.285 97.945 55.13 -
29.03040615 29.80770317 59.44530093 32.31380374 -

30. RETURN ON CAPITAL EMPLOYED
• A ratio that indicates the efficiency and profitability of a company's capital
investments.
ROCE = EBIT-OTHER INCOME
AVRAGE LONGTERM ASSET USED + NWC
• ROCE should always be higher than the rate at which the company
borrows, otherwise any increase in borrowing will reduce shareholders'
earnings.

31. RETURN ON CAPITAL EMPLOYED
RATIO/ 2011 2010 2009 2008 2007
YR
ROCE 0 0 0 0 0

32. INTEREST COVERAGE RATIO
• A ratio used to determine how easily a company can pay interest on
outstanding debt.
INTEREST COVERAGE RATIO = EBIT
INTEREST
• The lower the ratio, the more the company is burdened by debt expense. An interest
coverage ratio below 1 indicates the company is not generating sufficient revenues
to satisfy interest expenses.

33. INTEREST COVERAGE RATIO
RATIO/ YR 2011 2010 2009 2008 2007
ICR -0.16 -0.87 -1.77 -7.76 -10.29

34. CORPORATE GOVERNANCE
• Act ethically, deli gently, openly, honestly in good faith with integrity.
• Act in a good faith responsibility and due fair.
• Dedicate best effort for welfare of the customer.
• Conduct our self in a professional, courtesy and respectful manner.

35. CORPORATE GOVERNANCE
• Uphold legal standard vigoursly.
• Act for the welfare investor and stake holder.
• Involve in the best interest of company and the stakeholder.
• Maintain the confidentiality of all material non-public information about the
company its business and affairs.

36. Saving The Ship
• All 18 lenders agreeing to cut interest
rates and convert part of loans to
equity.
• Lenders have
converted Rs.650 crore debt into
preference shares which will be
converted into equity when the airline
lists on the Luxembourg Stock
Exchange by selling GDR’s.
• Besides the Rs.1,400 crore debt
which will be converted into
preference shares.
• Kingfisher Airlines has pledged its
brand as collateral with its lender
consortium for Rs.4,100 crore.

37. Result
Total
# From To Months Cost Net Profit EPS
Income
1 Apr-05 Jun-06 15 1,352 1,689 -337 -68
2 Jul-06 Jun-07 12 2,142 2,562 -420 -42
3 Jul-07 Mar-08 9 1,546 1,734 -188 -11
4 Apr-08 Mar-09 12 5,577 7,186 -1,609 -55
5 Apr-09 Mar-10 12 5,271 6,918 -1,647 -54
6 Apr-10 Mar-11 12 6,496 7,523 -1,027 -16
7 Apr-11 Sep-11 6 3,410 4,142 -732 n/a
Total 78 25,793 31,754 -5,960

38. Thank You