ABOUT THE COMPANY   The company deals in chemicals and fertilizers.   It is the companys aim to make India self-reliant ...
RATIO ANALYSIS2011-2012
WHAT IS RATIO ANALYSIS   It is a powerful tool of financial analysis useful for    measuring the performance of an organi...
CLASSIFICATION OF RATIOSSolvency RatiosCapital Structure RatiosTurnover(Efficiency)RatiosProfitability Ratios
CURRENT                     RATIOS                    SOLVENCY                     RATIOSLIQUID/QUICK/ACID              PR...
PARTICULARS                     Rs. (In Lakhs) 2011               Rs.(In Lakhs) 20121.SOURCES OF FUNDSA.OWNERS FUNDShare C...
CURRENT RATIOSA liquidity ratio that measures a companys ability topay short-term obligations.Calculated         as:CURR...
INVENTORIES + TRADE RECEIVABLES + CASH OR BANK       +SHORT TERM LOANS AND ADVANCES / SHORT TERMBORROWINGS      + TRADE PA...
LIQUID/QUICK/ACID TEST RATIO   An indicator of a companys short-term liquidity.    QUICK ASSETS/CURRENT LIABILITIES
CASH AND BANK BALANCES/ LIQUID LIABILITIES  2011                   2012  35560.62/ 11047.74     17257.53/ 29237.21 = 3.2...
PROPRIETORS RATIOS   Proprietary ratio establishes relationship between    proprietors funds to total resources of the un...
2011                     2012 193541.01/ 211441.34    201450.91/ 236789.17  x 100                    x 100= 91.534%     ...
CAPITAL STRUCTURE RATIO                   CAPITAL   DEBT/EQUITY                   GEARING      RATIO                    RA...
DEBT/EQUITY RATIO   A measure of a companys financial leverage    calculated by dividing its total    liabilities by stoc...
2011                     2012 6852.59/ 193541.01      6101.05/ 201450.91= 0.035:1                = 0.03:1* All figures i...
CAPITAL GEARING RATIO   Capital Gearing Ratio explains the relationship    between fixed term capital/loans carrying fixe...
2011                      2012 6852.59/ 193541.01       6101.05/ 201450.91= 0.035%                  = 0.03% * All figure...
TURNOVER (EFFICIENCY) RATIOS                    INVENTORY                  TURNOVER RATIO                                 ...
CREDIT TURNOVER RATIO   It compares creditors with the total credit    purchases.   CREDIT PURCHASES/ AVERAGE (CREDITORS...
2011                     2012 9225.89/ 1155.73        31200/ 434.12= 7.89:1                 = 71.86:1* All figures in la...
PARTICULARS                                    RS. (IN LAKHS) 2012Gross Sales                                             ...
INVENTORY TURNOVER RATIO   Inventory Turnover Ratio is a ratio showing how    many times a companys inventory is sold and...
2011                     2012 19446.89- 10215.2/      48958.86- 17733.86/  14033.2                  16999.44= 0.657 time...
INVENTORY VELOCITY   Inventory Velocity is number of hours or days that    elapse between receipt of inputs and dispatch ...
2011                         2012 14033.2/ 19446.89-          16999.44/ 48958.86-  10215.2 x 365                17733.86...
DEBTOR’S TURNOVER RATIO   An accounting measure used to quantify a firms    effectiveness in extending credit as well as ...
2011                   2012    19446.89/378.58        48958.86/2200      = 51.36 times          = 22.25 times* All figur...
DEBTOR’S VELOCITY(DSO)   Average Debtors + Average Bills Receivable/Credit    sales x 365
2011                        2012   378.58/19446.89 x 365      2200/48958.86 x 365    = 7.105 days                 = 16.4...
FIXED ASSETS TURNOVER RATIO   The fixed-asset turnover ratio measures a    companys ability to generate net sales from fi...
2011                         2012   19446.89/2633.98            48958.86/2049.45     = 7.38 times                = 23.88...
WORKING CAPITAL TURNOVER RATIO   A measurement comparing the depletion of working    capital to the generation of sales o...
2011                         2012   19446.89/155423.39          48958.86/98397.71     = 0.125 times               = 0.49...
PROFITABILITY RATIOS        GROSS      PROFIT RATIOOPERATING               EXPENSENET PROFIT                RATIO  RATIO
GROSS PROFIT RATIO   A financial metric used to assess a firms financial    health by revealing the proportion of money l...
2011                         2012   10215.2/19446.89 x          17733.86/48958.86 x    100 = 52.528%                100 ...
OPERATING NET PROFIT RATIO   This ratio indicates the profitability of current    operations.     Generally Calculated as...
2011                         2012   7942.57/19446.89 x          13005.23/48958.86 x    100 = 40.84%                 100 ...
EXPENSE RATIO   A measure of what it costs an investment company    to operate a mutual fund    Generally calculate as: E...
RETURN ON INVESTMENTS(ROI/ROCE)   A performance measure used to evaluate the    efficiency of an investment or to compare...
OTHER RATIOS  INTEREST                     PR ICE COVERAGE         YIELD       EARNING    RATIOS                     RATIO...
PRICE EARNING RATIOS(PE )   The relationship between market price of the share    and the current earnings per share.   ...
PRESENTED BY   MEGHNA GULATI   SANJANA PARULEKAR   LOMA SISODIA   VISHAL CHAWLA   AKSHAY DUGGAD   HANS PUNJABI
THANK YOU
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Accounts

  1. 1. ABOUT THE COMPANY The company deals in chemicals and fertilizers. It is the companys aim to make India self-reliant in these fields. The company is committed to the production of products that fall in the core sector. Our management plays a large role in recruiting and keeping its large flock of personnel together. Technology is a major area of concern and they take care to see that they have the latest available technology at our disposal.
  2. 2. RATIO ANALYSIS2011-2012
  3. 3. WHAT IS RATIO ANALYSIS It is a powerful tool of financial analysis useful for measuring the performance of an organization. Ratios are calculated from current year numbers and are then compared to previous years. There are many ratios that can be calculated from the financial statements. Some common ratios include the price-earnings ratio, debt-equity ratio, earnings per share, asset turnover and working capital.
  4. 4. CLASSIFICATION OF RATIOSSolvency RatiosCapital Structure RatiosTurnover(Efficiency)RatiosProfitability Ratios
  5. 5. CURRENT RATIOS SOLVENCY RATIOSLIQUID/QUICK/ACID PROPRIETORS TEST RATIO RATIOS
  6. 6. PARTICULARS Rs. (In Lakhs) 2011 Rs.(In Lakhs) 20121.SOURCES OF FUNDSA.OWNERS FUNDShare Capital 25680.92 25680.92ADD:Reserves and Surplus 175769.99 167860.09 201450.91 193541.01B.BORROWED FUNDSa.Secured LoansLong Term Borrowings 128.3Other Long Term Liabilities 6002.77 6594.34Long Term Provisions 98.28 129.95 611.05 6852.59TOTAL FUNDS EMPLOYED 207551.96 200393.62.APPLICATION OF FUNDSA.FIXED ASSETSIntangible 1.49Tangible 2047.96 2398.51Capital work in progress 235.47 2049.45 2633.98B.INVESTMENTSNon Current Investments 9783.05 4618.72Long Term Loan and Advances 93790.33 31941.02Other Non Current Assets 3531.42 5776.49 107104.8 42336.23C.WORKING CAPITALa.Current AssetsInventories 16607.96 114030.3Trade Receivables 2200 378.58Cash and Bank Balances 17257.53 32560.62Short Term Loans and Advances 119501.63 127634.92 166471.13b.Current LiabilitiesShort Term Borrowings 27650 9407Trade Payable 434.12 1155.73Other Current Liabilities 976.13 327.21Short Term Provisions 176.96 157.8 29237.21 111047.74WORKING CAPITAL(a-b) 98397.71 155423.39TOTAL CAPITAL EMPLOYED 207551.96 200393.6
  7. 7. CURRENT RATIOSA liquidity ratio that measures a companys ability topay short-term obligations.Calculated as:CURRENT ASSETS /CURRENT LIABILITIES
  8. 8. INVENTORIES + TRADE RECEIVABLES + CASH OR BANK +SHORT TERM LOANS AND ADVANCES / SHORT TERMBORROWINGS + TRADE PAYABLE + OTHER CURRENTLIABILITIES + SHORT TERM PROVISIONS2011 2012 166471.13/ 11047.74  127634.92/ 29237.21 = 15.068: 1 =4.365:1* All figures in lakhs
  9. 9. LIQUID/QUICK/ACID TEST RATIO An indicator of a companys short-term liquidity. QUICK ASSETS/CURRENT LIABILITIES
  10. 10. CASH AND BANK BALANCES/ LIQUID LIABILITIES 2011 2012  35560.62/ 11047.74  17257.53/ 29237.21 = 3.21:1 = 0.59:1* All figures in lakhs
  11. 11. PROPRIETORS RATIOS Proprietary ratio establishes relationship between proprietors funds to total resources of the unit. PROPRIETORS FUND/TOTAL ASSETS x 100
  12. 12. 2011 2012 193541.01/ 211441.34  201450.91/ 236789.17 x 100 x 100= 91.534% = 85.076%* All figures in lakhs
  13. 13. CAPITAL STRUCTURE RATIO CAPITAL DEBT/EQUITY GEARING RATIO RATIO
  14. 14. DEBT/EQUITY RATIO A measure of a companys financial leverage calculated by dividing its total liabilities by stockholders equity Debt/Equity Ratio = Debt/Debt + Equity
  15. 15. 2011 2012 6852.59/ 193541.01  6101.05/ 201450.91= 0.035:1 = 0.03:1* All figures in lakhs
  16. 16. CAPITAL GEARING RATIO Capital Gearing Ratio explains the relationship between fixed term capital/loans carrying fixed rate of dividend/interest CAPITAL WITH FIXED RATE OF RETURN/CAPITAL NOT WITH FIXED RATE OF RETURN
  17. 17. 2011 2012 6852.59/ 193541.01  6101.05/ 201450.91= 0.035% = 0.03% * All figures in lakhs
  18. 18. TURNOVER (EFFICIENCY) RATIOS INVENTORY TURNOVER RATIO WORKING CREDIT CAPITAL TURNOVER RATIO TURNOVER RATIOINVENTORY FIXED ASSETS VELOCITY TURNOVER RATIO DEBTORS DEBTORS TURNOVER RATIO VELOCITY(DSO)
  19. 19. CREDIT TURNOVER RATIO It compares creditors with the total credit purchases. CREDIT PURCHASES/ AVERAGE (CREDITORS+ BILLS PAYABLE)
  20. 20. 2011 2012 9225.89/ 1155.73  31200/ 434.12= 7.89:1 = 71.86:1* All figures in lakhs
  21. 21. PARTICULARS RS. (IN LAKHS) 2012Gross Sales 48958.86(-) Sales ReturnNET SALES 48958.86LESS:COST OF GOODS SOLDPurchase of Stock in Trade 31200Change in Inventories 25Cost of Sales 31225GROSS PROFIT(NET SALES - COST OF GOODS SOLD) 17733.86LESS:OPERATING EXPENSESADMINISTRATIVE EXPENSES:Employee Benefit expense 1023.01Depreciation and Amortization expense 233.11SELLING EXPENSES:Travelling Expense 307.3FINANCIAL EXPENSES:Finance Cost 1132.59TOTAL OPERATING EXPENSES 2696.01OPERATING NET PROFIT 15037.85ADD:NON OPERATING INCOMEOther Income 43.01LESS:NON OPERATING EXPENSESExceptional Items 2816.53Prior Period Adjust 127.01LESS:TAX PAID 2151.79NET PROIT 9985.53
  22. 22. INVENTORY TURNOVER RATIO Inventory Turnover Ratio is a ratio showing how many times a companys inventory is sold and replaced over a period. Generally calculated as: Cost of Goods Sold/Average Stock
  23. 23. 2011 2012 19446.89- 10215.2/  48958.86- 17733.86/ 14033.2 16999.44= 0.657 times = 1.836 times* All figures in lakhs
  24. 24. INVENTORY VELOCITY Inventory Velocity is number of hours or days that elapse between receipt of inputs and dispatch of finished product Average Stock/Cost of goods sold x 365
  25. 25. 2011 2012 14033.2/ 19446.89-  16999.44/ 48958.86- 10215.2 x 365 17733.86 x 365= 554.84 days = 198.71 days * All figures in lakhs
  26. 26. DEBTOR’S TURNOVER RATIO An accounting measure used to quantify a firms effectiveness in extending credit as well as collecting debts. Credit Sales/Average(Debtors + Bills Receivable)
  27. 27. 2011 2012  19446.89/378.58  48958.86/2200 = 51.36 times = 22.25 times* All figures in lakhs
  28. 28. DEBTOR’S VELOCITY(DSO) Average Debtors + Average Bills Receivable/Credit sales x 365
  29. 29. 2011 2012 378.58/19446.89 x 365  2200/48958.86 x 365 = 7.105 days = 16.401 days* All figures in lakhs
  30. 30. FIXED ASSETS TURNOVER RATIO The fixed-asset turnover ratio measures a companys ability to generate net sales from fixed- asset investments - specifically property, plant and equipment (PP&E) - net of depreciation Total sales/Gross fixed assets
  31. 31. 2011 2012 19446.89/2633.98  48958.86/2049.45 = 7.38 times = 23.88 times * All figures in lakhs
  32. 32. WORKING CAPITAL TURNOVER RATIO A measurement comparing the depletion of working capital to the generation of sales over a given period. Total Sales/Average Working Capital
  33. 33. 2011 2012 19446.89/155423.39  48958.86/98397.71 = 0.125 times = 0.497 times * All figures in lakhs
  34. 34. PROFITABILITY RATIOS GROSS PROFIT RATIOOPERATING EXPENSENET PROFIT RATIO RATIO
  35. 35. GROSS PROFIT RATIO A financial metric used to assess a firms financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Calculated as: Gross Profit/Net Sales*100
  36. 36. 2011 2012 10215.2/19446.89 x  17733.86/48958.86 x 100 = 52.528% 100 = 36.22% * All figures in lakhs
  37. 37. OPERATING NET PROFIT RATIO This ratio indicates the profitability of current operations. Generally Calculated as: Operating Net Profit/Net Sales x 100
  38. 38. 2011 2012 7942.57/19446.89 x  13005.23/48958.86 x 100 = 40.84% 100 = 26.56% * All figures in lakhs
  39. 39. EXPENSE RATIO A measure of what it costs an investment company to operate a mutual fund Generally calculate as: Each type or item of expenses/Net Sales x 100 2696.01/ 48958.86 x 100 = 5.506%* All figures in lakhs
  40. 40. RETURN ON INVESTMENTS(ROI/ROCE) A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. Generally Calculated as: EBIT/Capital Employed x 100 12137.32/200393.6 x 100 = 6.05% * All figures in lakhs
  41. 41. OTHER RATIOS INTEREST PR ICE COVERAGE YIELD EARNING RATIOS RATIODEBT SERVICE DIVIDEND COVERAGE PAYOUT RATIORATIOS(DSCR) EARNINGS DIVIDEND PER PER SHARE(DPS)SHARE(EPS)
  42. 42. PRICE EARNING RATIOS(PE ) The relationship between market price of the share and the current earnings per share. MARKET PRICE PER SHARE/EARNINGS PER EQUITY SHARE 35.55/ 4= 8.89* All figures in lakhs
  43. 43. PRESENTED BY MEGHNA GULATI SANJANA PARULEKAR LOMA SISODIA VISHAL CHAWLA AKSHAY DUGGAD HANS PUNJABI
  44. 44. THANK YOU

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