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Ratio Analysis - Case Study - ITC LTD
1. ITC LTD โ RATIO ANALYSIS
BY: ISHAM, SAI ROHIT, RAHUL AND DEEPESH
2. INTRODUCTION
๏ก It is a multi-industry company headquartered in Kolkata, West Bengal.
๏ก Established in 1910 as Imperial Tobacco Company LTD.
๏ก Later changed to Indian Tobacco Company LTD generally known as ITC LTD.
๏ก Its diversified business includes five segments: Fast-Moving Consumer Goods, Hotels, Paperboards &
Packaging, Agriculture Business & Information Technology.
๏ก In 2012-13, had an annual turnover of US$8.31 billion and a market capitalization of US$45 billion.
๏ก Employs over 25,000 people at more than 60 locations across India.
3. OBJECTIVES
๏ก To analyse liquidity of ITC LTD.
๏ก To analyse profitability of ITC LTD
๏ก To analyse solvency.
๏ก To analyse efficiency.
๏ก To study growth of ITC LTD.
4. FINANCIAL SUMMARY OF LAST 5 YEARS
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2013 2014 2015 2016 2017
Amountin$US
Year 2013 - 2017
Sales/Revenue
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
2013 2014 2015 2016 2017
Amountin$US
Year 2013 - 2017
Retained Earnings/Reserves and Surplus
7. RATIO ANALYSIS
๏ก Financial tool used by top management to conduct a quantitative analysis of information in a
company's financial statements.
๏ก Ratios that are to be analysed will be in form of %, times and proportion.
๏ก They are classified into:
1. Liquidity
2. Profitability
3. Activity or Efficiency
4. Solvency
๏ก Not only useful to businessmen but also to the investors, suppliers, bankers and customers to
analyse performance of a company.
8. LIQUIDITY RATIOS
๏ก Indicates short term solvency of the business. In other words: companyโs ability to meet
current obligations.
๏ก It includes:
๏ก Current Ratio
๏ก Quick Ratio
๏ก Cash Ratio
๏ก Working Capital
9. CURRENT RATIO
๏ก It is the proportion of current assets to current liabilities. Expressed by the formula:
๐ถ๐ข๐๐๐๐๐ก ๐ ๐๐ก๐๐ =
๐ถ๐ข๐๐๐๐๐ก ๐ด๐ ๐ ๐๐ก๐
๐ถ๐ข๐๐๐๐๐ก ๐ฟ๐๐๐๐๐๐๐ก๐๐๐
๏ก Current assets: cash in hand, bank balance, debtors, bills receivable, stock, prepaid
expenses, accrued income, and short-term investments (marketable securities).
๏ก Current liabilities: creditors, bills payable, outstanding expenses, provision for taxation net of
advance tax, bank overdraft, short-term loans, income received in advance, etc.
๏ก Ideal value of current ratio is 2:1.
10. CURRENT RATIOS OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก In 2015, ITC LTD approximately is having ideal current ratio value. Hence at this stage, it properly
makes use of available resources as well as not in danger of not paying short-term debt on time.
๏ก In 2016, there is drop in the value of current ratio. It is lower than the standard value. This indicates
that ITC is in danger of not being able to pay short-term debt on time.
๏ก In 2017, there has been rise in the value of current ratio. It is higher than the standard value which
indicates that the usage of resources is not proper and effects the profit.
Year 2015 2016 2017
Current Ratio 2.103 1.727 3.689
11. QUICK RATIO
๏ก Ratio of quick (or liquid) asset to current liabilities. It is expressed as:
๐๐ข๐๐๐ ๐ ๐๐ก๐๐ =
๐๐ข๐๐๐ ๐ด๐ ๐ ๐๐ก๐
๐ถ๐ข๐๐๐๐๐ก ๐ฟ๐๐๐๐๐๐๐ก๐๐๐
๏ก Quick assets โ assets quickly can be converted into cash.
๏ก It is obtained by excluding inventories/stock and prepaid expenses.
๏ก It is more better indicator to measure liquidity position of business as non-liquid current asset
is excluded.
๏ก Ideal value is 1:1.
12. QUICK RATIOS OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก Since prepaid expense wasnโt in the balance sheet, only inventories was excluded.
๏ก In 2015, it had slightly higher than ideal value. This indicates that little extra resources are used.
๏ก In 2016, the ratio is approximately equals ideal value. Hence ITC can pay off its short-term dues
without any flaw.
๏ก In 2017, the ratio is very high in contrast to ideal value. This suggests that excess of resources are
used and hence will result in less profit.
Year 2015 2016 2017
Liquid Ratio 1.397 1.114 2.471
13. CASH RATIO
๏ก Ratio of cash and cash equivalents of a company to its current liabilities. It is expressed as:
๐ถ๐๐ โ ๐ ๐๐ก๐๐ =
๐ถ๐๐ โ ๐๐๐ ๐ถ๐๐ โ ๐ธ๐๐ข๐๐ฃ๐๐๐๐๐ก๐
๐ถ๐ข๐๐๐๐๐ก ๐ฟ๐๐๐๐๐๐๐ก๐๐๐
๏ก Extreme liquidity ratio since only cash and cash equivalents are compared with the current
liabilities.
๏ก Measures the ability of a business to repay its current liabilities by only using its cash and
cash equivalents.
๏ก Idea value is 1:1. This indicates that the company will be able to pay all of the short debts
using cash equivalents.
14. CASH RATIOS OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก For all of three years: 2015, 2016 and 2017, the cash ratio is less than 1. This indicates current
liabilities are greater than cash and cash equivalents.
๏ก So ITC LTD will require more cash reserves in future to avoid delay of paying of short-term debts.
Year 2015 2016 2017
Cash Ratio 0.6494 0.4692 0.4167
15. WORKING CAPITAL
๏ก Financial metric which represents operating liquidity available to a business, organisation or
other entity, including governmental entity.
๏ก It is a measure of both efficiency and its short-term financial health of an organization.
๏ก It is expressed by:
๐๐๐๐๐๐๐ ๐ถ๐๐๐๐ก๐๐ = ๐ถ๐ข๐๐๐๐๐ก ๐ด๐ ๐ ๐๐ก๐ โ ๐ถ๐ข๐๐๐๐๐ก ๐ฟ๐๐๐๐๐๐๐ก๐๐๐
๏ก Positive working capital ensures that a firm is able to continue its operations and that it has
sufficient funds to satisfy both short-term debt and upcoming operational expenses.
๏ก If working capital is negative, then company may run into trouble paying back creditors in the
short term. The worst-case scenario is bankruptcy.
16. WORKING CAPITAL OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก In all three of the years, ITC LTD had positive working capital. So company is in the safe position.
๏ก Though in 2016, the company will have slight difficulty in order to pay off short-debts compared to
2015 and 2017 as working capital value is least.
๏ก In 2017, the company will have least financial difficulties as working capital value is highest.
Year 2015 2016 2017
Working Capital in $US 134,145 108,661 191,481
17. PROFITABILITY RATIO
๏ก It is used to measure the overall performance of a company.
๏ก Profitability ratios to be discussed in relation to sales:
๏ก Gross Profit Ratio
๏ก Operating Margin/Operation Profit Ratio
๏ก Profit Margin/Net Profit Ratio
๏ก Profitability ratio to be discussed in relation to investment:
๏ก Return on Investment Ratio
18. GROSS PROFIT RATIO
๏ก Used to assess a company's financial health and business model by revealing the proportion
of money left over from revenues after accounting for the cost of goods sold. It is expressed
by:
๐บ๐๐๐ ๐ ๐๐๐๐๐๐ก ๐ ๐๐ก๐๐ =
๐บ๐๐๐ ๐ ๐๐๐๐๐๐ก
๐๐๐ก ๐๐๐๐๐ ๐๐ ๐๐๐ก ๐ ๐๐ฃ๐๐๐ข๐
ร 100
๏ก No standard value for comparison.
๏ก Indicates margin available to cover operating expenses, non-operating expenses, etc.
๏ก High gross profit ratio indicates that the firm has higher profitability.
๏ก Also, reflects effective standard of performance of firmโs business.
๏ก Low gross profit ratio may indicate unfavourable purchasing and mark-up policies.
19. GROSS PROFIT RATIOS OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก From 2015 to 2016, there has been rise in gross profit ratio by 3.76%.
๏ก From 2016 to 2017, there has been decline in gross profit ratio by 1.21%.
๏ก This decline is not by large value so the company is not in an unfavourable position in 2017.
๏ก In 2016, the company is doing better in terms financial health and performance compared to 2015
and 2017 as revenue is higher without increase in cost of goods.
Year 2015 2016 2017
Gross Profit Ratio 61.35 65.11 63.89
20. OPERATING MARGIN/OPERATION PROFIT RATIO
๏ก It is used to measure a company's pricing strategy and operating efficiency. It is expressed
by:
๐๐๐๐๐๐ก๐๐๐ ๐๐๐๐๐๐ =
๐๐๐๐๐๐ก๐๐๐ ๐๐๐๐๐๐ก ๐๐ ๐ผ๐๐๐๐๐
๐๐๐ก ๐๐๐๐๐ ๐๐ ๐๐๐ก ๐ ๐๐ฃ๐๐๐ข๐
ร 100
๏ก It is very useful for inter-firm as well as intra-firm comparisons.
๏ก Lower operating margin is a very healthy sign.
21. OPERATING MARGIN OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก For all of three years โ 2015, 2016 and 2017, operating margin is comparatively low in contrast to
gross profit ratio.
๏ก Hence, the data indicates company is healthy financially.
Year 2015 2016 2017
Operating Margin 34.68 36.64 35.22
22. PROFIT MARGIN/NET PROFIT RATIO
๏ก It reveals the firm's overall efficiency in operating the business.
๏ก It is used to measure relationship between net profit(after tax and interest) and sales. It is
expressed by:
๐๐๐๐๐๐ก ๐๐๐๐๐๐ =
๐๐๐ก ๐๐๐๐๐๐ก
๐๐๐ก ๐๐๐๐๐ ๐๐ ๐๐๐ก ๐ ๐๐ฃ๐๐๐ข๐
ร 100
๏ก Non-operating incomes(dividend, received, interest on investment, profit on sales of fixed
assets, commission received, discount received etc) and profits are included in net profit.
๏ก Net profit indicates margin available after deduction cost of production, other operating
expenses, and income tax from the sales revenue.
๏ก Higher profit margin implies standard performance of a company.
23. NET PROFIT RATIOS OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก The percentage difference in all of these 3 years are very less. Therefore, the performance of
company is more or less approximately the same.
๏ก From 2015 to 2016, there has been increase in net profit ratio as well similar to gross profit and
operating profit ratios.
๏ก Hence at 2016, it indicates that the company is performing little better financially compared to 2015
and 2017.
Year 2015 2016 2017
Net Profit Ratio 24.88 25.14 24.04
24. RETURN ON INVESTMENT RATIO
๏ก It measures a return on the owner's or shareholdersโ investment.
๏ก It establishes the relationship between net profit after interest and taxes and the owner's
investment. Expressed as percentage and formula is expressed as:
๐ ๐๐ก๐ข๐๐ ๐๐ ๐ผ๐๐ฃ๐๐ ๐ก๐๐๐๐ก ๐ ๐๐ก๐๐ =
๐๐๐ก ๐๐๐๐๐๐ก (๐๐๐ก๐๐ ๐ก๐๐ฅ ๐๐๐ ๐๐๐ก๐๐๐๐ ๐ก)
๐๐๐ก๐๐ ๐โ๐๐๐โ๐๐๐๐๐โฒ ๐ ๐น๐ข๐๐๐
ร 100
๏ก It highlights how successful business from the ownerโs point of view.
๏ก Helps to measure income on the shareholderโs investments.
๏ก Allows to determine efficiently handling of ownerโs investment.
25. RETURN ON INVESTMENT RATIOS OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก From the table above, we can observe that Return on Investment Ratio has been on decline.
๏ก This indicates that there has been decline in the profitability as well.
๏ก In the year 2015, ROI is highest compared to 2016 and 2017.
๏ก In 2016, though ROI is slightly less compared to 2015.
๏ก But in 2017, there has been significant drop in the value of ROI, indicating profitability is least at
present compared to past 2 years.
Year 2015 2016 2017
Return on Investment Ratio 30.45 29.18 22.17
26. ACTIVITY OR EFFICIENCY RATIO
๏ก Highlights the different aspect of financial statement to satisfy the requirements of different
parties interested in the business.
๏ก Indicates the effectiveness with which different assets are vitalized in a business.
๏ก Turnover means the number of times assets are converted or turned over into sales. Higher
turnover ratio means better utilisation of assets and signifies improved efficiency and
profitability.
๏ก Activity ratio to be discussed such as:
๏ก Inventory Turnover Ratio
๏ก Debt Turnover Ratio
๏ก Creditorโs Turnover Ratio
๏ก Fixed Assets Turnover Ratio
27. INVENTORY TURNOVER RATIO
๏ก Determines the number of times stock is turned in sales during the accounting period under
consideration.
๏ก Expresses the relationship between the cost of goods sold and stock of goods using formula:
๐ผ๐๐ฃ๐๐๐ก๐๐๐ฆ ๐๐ข๐๐๐๐ฃ๐๐ ๐ ๐๐ก๐๐ =
๐ถ๐๐ ๐ก ๐๐ ๐บ๐๐๐๐ ๐๐๐๐
๐ด๐ฃ๐๐๐๐๐ ๐๐ก๐๐๐
๏ก Determines how many times stock is purchased or replaced during a year.
๏ก Lower ratio may be due to bad buying, obsolete stock, etc. Therefore indicates efficiency
management of stock is low.
๏ก High turnover is good but it must be carefully interpreted as it may be due to buying in small
lots or selling quickly at low margin to realise cash. Therefore this indicates efficiency
management is high.
28. INVENTORY TURNOVER RATIOS OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก From 2015 to 2016, there is decrease in the value of inventory turnover ratio.
๏ก This indicates the management of stock was not properly done in 2016 in comparison to 2015.
๏ก From 2016 to 2017, there has been rise in the value of inventory turnover ratio.
๏ก This indicates the company was able to improve their efficiency management of stock.
Year 2015 2016 2017
Inventory Turnover Ratio 1.789 1.550 1.734
29. DEBTORS TURNOVER RATIO/DEBTOR'S VELOCITY
๏ง Indicates the number of times the receivables are turned over in business during a particular
period.
๏ง This ratio establishes the relationship between receivables and sales.
๐ท๐๐๐ก๐๐๐ ๐๐ข๐๐๐๐ฃ๐๐ ๐ ๐๐ก๐๐ =
๐๐๐ก ๐ถ๐๐๐๐๐ก ๐๐๐๐๐
๐ด๐ฃ๐๐๐๐๐ ๐ ๐๐๐๐๐ฃ๐๐๐๐๐
๏ง It is used to measure the liquidity position of a concern.
๏ง This ratios can be used to judge a firm's liquidity position on the basis of efficiency of credit
collection and credit policy.
30. DEBTOR TURNOVER RATIO OF 2015, 2016 AND 2017
Year 2015 2016 2017
Debtor Turnover Ratio 17.56 20.20 19.48
๏ง From 2015 to 2016 there is an increase and again a fall in 2017.
๏ง This ratio indicates the efficiency of firmโs credit collection and efficiency of credit policy.
๏ง From 2016 to 2017 the companies adequacy of liquidity came down.
๏ง This indicates that liquidity position of this firm came down.
31. CREDITOR'S TURNOVER RATIO
๏ก Creditorโs turnover ratio is also called as Payable Turnover Ratio or Creditorโs Velocity.
๏ก This ratio establishes the relationship between the net credit purchases and the average trade
creditors.
๐ถ๐๐๐๐๐ก๐๐โฒ
๐ ๐๐ข๐๐๐๐ฃ๐๐ ๐ ๐๐ก๐๐ =
๐๐๐ก ๐ถ๐๐๐๐๐ก ๐๐ข๐๐โ๐๐ ๐๐
๐ด๐ฃ๐๐๐๐๐ ๐ด๐๐๐๐ข๐๐ก๐ ๐๐๐ฆ๐๐๐๐
๏ก It indicates the number of times with which the payment is made to supplier in respect of
credit purchase.
32. CREDITOR TURNOVER RATIO OF 2015, 2016 AND 2017
Year 2015 2016 2017
Creditor Turnover Ratio 7.434 6.474 5.913
๏ก Analysis:
๏ก At 2015, the creditors turnover ratio is highest in comparison to 2016 and 2017.
๏ก This indicates that in 2015, the company paid its creditors punctually compared to 2016 and 2017.
๏ก Punctuality of payment to the companyโs creditors declines as years passed by.
33. FIXED ASSETS TURNOVER RATIO
๏ก This ratio indicates the efficiency of assets management.
๏ก It is used to measure the utilization of fixed assets.
๏ก This ratio establishes the relationship between cost of goods sold and total fixed assets
๐น๐๐ฅ๐๐ ๐ด๐ ๐ ๐๐ก๐ ๐๐ข๐๐๐๐ฃ๐๐ ๐ ๐๐ก๐๐ =
๐ถ๐๐ ๐ก ๐๐ ๐๐๐๐๐ ๐ ๐๐๐
๐๐๐ก๐๐ ๐น๐๐ฅ๐๐ ๐ด๐ ๐ ๐๐ก๐
๏ก Higher the ratio highlights a firms has successfully utilized the fixed assets.
๏ก If the ratio is depressed, it indicates the under utilization of fixed assets.
34. FIXED ASSETS TURNOVER RATIO OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก As per the table, it can be observed that all three years, 2015, 2016 and 2017, fixed assets turnover
ratio is approximately constant.
๏ก Hence the utilization of fixed assets by ITC is approximately constant in all of these three years.
๏ก In 2017, efficiency of asset utilization by the company is slightly, higher compared to 2015 and 2016.
Year 2015 2016 2017
Fixed AssetsTurnover Ratio 2.252 2.210 2.259
35. SOLVENCY RATIO
๏ก The term โSolvencyโ generally refers to the capacity of the business to meet its short-term and
long term obligations.
๏ก Short term obligations include creditors, bank loans and bills payable etc. Long term
obligations consists of debenture, long-term loans, and long-term creditors etc.
๏ก It indicates the sound financial position of a concern to carry on its business smoothly and
meet its all obligations.
๏ก Some of the important ratios are given below to determine the long-term solvency of the
concern :
๏ง Debt-Equity Ratio
๏ง Proprietary Ratio
๏ง Capital Gearing Ratio
๏ง Debt Service Ratio or Interest Coverage Ratio
36. DEBT- EQUITY RATIO
๏ก This ratio also termed as External-Internal Equity Ratio
๏ก This ratio is calculated to ascertain the firmโs obligation to creditors to creditors in relation to
funds invested by the owners.
๐ท๐๐๐ก โ ๐ธ๐๐ข๐๐ก๐ฆ ๐ ๐๐ก๐๐ =
๐๐๐ก๐๐ ๐ฟ๐๐๐ ๐ก๐๐๐ ๐ท๐๐๐ก
๐โ๐๐๐ ๐ป๐๐๐๐๐โฒ ๐ ๐น๐ข๐๐
๏ก The ideal Debt Equity Ratio is 1:1.
๏ก The Long-Term Debt refers to outside debt including debenture and long-term loans raised
from banks.
๏ก This ratio indicates all external liabilities to owner recorded claims.
37. DEBT- EQUITY RATIO OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก In all of the three years, it can be observed that the debt-equity ratio is very low.
๏ก This indicates that the company very low in debt.
๏ก Therefore, in all of the three years, company is in the least state of risk to repay loans to its lenders.
Year 2015 2016 2017
Debt- equity Ratio 0.0660 0.0693 0.0519
38. PROPRIETARY RATIO
๏ก Proprietary ratio is also known as Capital Ratio or Net worth to Total Asset Ratio.
๏ก This is one of the variant of Debt-Equity Ratio.
๐๐๐๐๐๐๐๐ก๐๐๐ฆ ๐ ๐๐ก๐๐ =
๐โ๐๐๐โ๐๐๐๐๐๐ ๐น๐ข๐๐
๐๐๐ก๐๐ ๐ด๐ ๐ ๐๐ก๐
๏ก This ratio shows the relationship between shareholders fund and total assets.
๏ก This ratio is used to determine the financial stability of the concerned firm in general.
๏ก It indicates the share of owners in the total assets of the company.
39. PROPRIETARY RATIO OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก Ratio below 0.5 is alarming to the creditors.
๏ก In all of the three years, proprietary ratio is higher than 0.5. So it can be stated that the company is
on the safe side in order to pay to its creditors.
๏ก Though in 2017, the company has highest proprietary ratio compared to 2015 and 2016. So in this
year, company is at least risk to its creditors.
Year 2015 2016 2017
Proprietary Ratio 0.690040182 0.662541599 0.829641798
40. CAPITAL GEARING RATIO
๏ก This ratio also called as Capitalization or Leverage Ratio.
๏ก This ratio describes the relationship between fixed and/or fixed dividend bearing securities
and the equity shareholderโs fund.
๐ถ๐๐๐๐ก๐๐ ๐บ๐๐๐๐๐๐ ๐ ๐๐ก๐๐ =
๐ธ๐๐ข๐๐ก๐ฆ ๐โ๐๐๐ ๐ถ๐๐๐๐ก๐๐
๐น๐๐ฅ๐๐ ๐ผ๐๐ก๐ก๐๐๐๐ ๐ก ๐ต๐๐๐๐๐๐ ๐น๐ข๐๐๐
๏ก A high ratio indicates that company is having large funds bearing fixed interest and/or fixed
dividend as compared to equity share capital.
๏ก A low ratio indicates that preference share capital and other fixed interest bearing loans are
less than equity share capital.
41. CAPITAL GEARING RATIO OF 2015, 2016 AND 2017
๏ก Analysis:
๏ก In 2017, capital gearing ratio is the highest compared to 2015 and 2016.
๏ก Therefore, at present the company is having highest funds bearing fixed interest or fixed dividend as
compared to equity share capital.
๏ก In 2016, capital gearing ratio is the least compared to 2015 and 2017. So at this stage, company is
having least funds.
Year 2015 2016 2017
Capital Gearing Ratio 15.15 14.43 19.26
42. INTEREST COVERAGE RATIO
๏ก Interest Coverage Ratio is also termed as Debt Service Ratio.
๏ก This ratio establishes the relation between the amount of net profit before deduction of interest and tax
and the fixed interest charges.
๏ก It is used as a yardstick for the lenders to know the business concern will be able to pay its interest
periodically.
๐ผ๐๐ก๐๐๐๐ ๐ก ๐ถ๐๐ฃ๐๐๐๐๐ ๐ ๐๐ก๐๐ =
๐๐๐ก ๐๐๐๐๐๐ก ๐ต๐๐๐๐๐ ๐ผ๐๐ก๐๐๐๐ ๐ก ๐๐๐ ๐๐๐ฅ
๐น๐๐ฅ๐๐ ๐ผ๐๐ก๐๐๐๐ ๐ก ๐ถโ๐๐๐๐๐
๏ก Higher the ratio the more secure the debenture holders and other lenders would be with respect to their
periodical interest income.
๏ก Lower ratio indicates that the company is not in a position to pay the interest but also to repay the
principal loan on time.
43. INTEREST COVERAGE RATIO OF 2015, 2016 AND 2017
๏ก Analysis:-
๏กIn 2015 the ratio is infinite which means the debenture holders and other lender are secured than in
2016 and 2017.
๏กCompared to 2016, 2017 is more secured for debenture holders and lenders.
Year 2015 2016 2017
Interest coverage Ratio #DIV/0! 269.5 620.3
44. CONCLUSION
๏ก Overall, there has been increase in sales, reserves and surplus, net income and net worth continuously
for 5 years.
๏ก As per the analysis of ratios, overall, the company in 2016 is in better position compared to 2017.
๏ก Even then at present, the companyโs financial state is sound.
๏ก In 2016, the overall liquidity and profitability of the company is doing better compared to 2015 and 2017.
๏ก In 2015 and 2017, the overall liquidity, profitability, activity and solvency of the company is varying.
๏ก Since the company is not in danger of any credential risks, the company will again be able to gain back
its form like it was in 2016 or better if they are able to maintain the optimal ratios.
45. REFERENCES
ITC >> Shareholding Pattern - March 2017. 2018. ITC >> Shareholding Pattern - March 2017. [ONLINE]
Available at: http://www.moneycontrol.com/company-facts/itc/shareholding-pattern/ITC. [Accessed 04 January
2018].
Investopedia. 2018. UK Home | Investopedia. [ONLINE] Available at: https://www.investopedia.com. [Accessed
04 January 2018].
Periasamy, P., 2010. A Textbook of Financial Cost and Management Accounting. revised ed. India: Himalaya
Publishing House.
Balance Sheet for ITC Ltd (ITC) from Morningstar.com. 2018. Balance Sheet for ITC Ltd (ITC) from
Morningstar.com. [ONLINE] Available at: http://financials.morningstar.com/balance-
sheet/bs.html?t=ITCยฎion=ind&culture=en-US. [Accessed 04 January 2018].
Income Statement for ITC Ltd (ITC) from Morningstar.com. 2018. Income Statement for ITC Ltd (ITC) from
Morningstar.com. [ONLINE] Available at: http://financials.morningstar.com/income-
statement/is.html?t=ITCยฎion=ind&culture=en-US. [Accessed 04 January 2018].
Editor's Notes
Revenue of ITC continued to increase from 2013 till 2017. On march 2013, sales was $313,234 which went up to $428,036 by march 2017. In terms of percentage, sales have increased by 37% during the last 5 years.
For reserves and surplus, there has been increase by wide gap. In 2013, the value was only $41,637 and in 2017 it is $182,003. Therefore there has been increase of reserves and surplus by 337% over the last 5 years.
The increasing trend continues for income before taxation and net worth.