Analysis …. A :- Indian Hotels ◦ High reserves and surplus for operations and future expansions. ◦ Huge fund raising through secured loans. ◦ Higher proportion of fixed assets. ◦ Higher Investments in lands, infrastructures and other subsidiaries. ◦ High proportions of current assets due to debtors and service management. ◦ Higher operating margin being a service sector. ◦ Higher inventory turnover ratio.
Analysis cont…… B :- Infosys Ltd. ◦ Company doesn’t rely on external sources of funding. ◦ Huge cash reserves & surplus for operating expenses, training of employees and as contingency reserves. ◦ Negligible inventory being service sector. ◦ Moderate fixed assets in the form of infrastructure. ◦ Current assets are high as they have large debtors because of outsourcing services. ◦ Higher profit and return on net worth because of service sector. ◦ Company has a good financial structure that is why high capital and quick ratio.
Analysis cont… C :- RANBAXY ◦ Huge reserves and surplus for R&D. ◦ High fixed assets in form of production houses. ◦ High investments for patents and advancements in technology. ◦ High current assets as debtors are high.
Analysis cont… D:-PROCTER AND GAMBLE(P&G) ◦ Huge reserves and surplus for meeting operating expenses. ◦ Company does not rely on external sources for fund raising. ◦ Huge gross block in form of stores, factories and warehouses. ◦ High current assets as high inventory and high current liabilities as creditors are more ◦ Net profit margin is good and high return on net worth ◦ Inventory turnover ratio is high as fast moving goods.
Analysis cont… E:- BHEL ◦ High reserves and surplus for purchase of machines and contingency reserves ◦ Current assets are high as manufacturing sector has high inventory. ◦ High current liabilities as large creditors.
Analysis cont… F:- TATA ◦ Depends on external sources of funds. ◦ Higher unsecured loans for meeting short term obligations. ◦ Being a manufacturing sector it has huge gross block ◦ Operating profit is +ve but net profit margin and return on net worth is negative because company has to bear huge interest on secured as well as unsecured loans. ◦ High inventory turnover ratio being a manufacturing sector.
Analysis Cont… G:- Zee TV ◦ Being a service sector has high reserves and surplus. ◦ Lower gross blocks for low area of production. ◦ Higher investments in technological advancements and necessary equipments . ◦ Lower current liabilities.
Analysis Cont… H :- ACC Cements ◦ Manufacturing sector demands higher loans for operating expenses. ◦ Huge gross blocks for inventory management and stores. ◦ Greater current liabilities than current assets due to more creditors and interests. ◦ Higher inventory turnover ratio being a manufacturing sector.