The document discusses various debt ratios used to measure a company's use of leverage and risk of default. It defines the debt ratio as total liabilities divided by total assets, showing a company's ability to pay off debt with its assets. The debt to equity ratio compares total debt to total equity to show what percentage of financing comes from creditors versus shareholders. Interpretations of Sun Pharma's ratios over five years are provided, noting that lower debt ratios generally imply less risk and potential for longer-term stability as less assets need to be sold to pay off debt.

1. Date Name 1
DEBT MANAGEMENT RATIO
OF

2. Debt Management Ratio
• Debt Management Ratios attempt to measure the firm's use
of Financial Leverage and ability to avoid financial distress in
the long run. The measurement of a company’s total debt
amount compared to its total financing amount. It provides
information about how much of a business’s operation stems
from debt as opposed to other forms of financing including
personal savings funds and stocks. The ratio is used to
measure a company's risk and the potential for default.
• These ratios are also known as Long-Term Solvency Ratios.
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3. Debt Ratio
Debt ratio is a solvency ratio that measures a firm's total liabilities as a percentage of
its total assets. In a sense, the debt ratio shows a company's ability to pay off its
liabilities with its assets. In other words, this shows how many assets the company must
sell in order to pay off all of its liabilities.
Debt to Equity Ratio
The debt to equity ratio is a financial, liquidity ratio that compares a company's total
debt to total equity. The debt to equity ratio shows the percentage of company financing
that comes from creditors and investors. A higher debt to equity ratio indicates that
more creditor financing (bank loans) is used than investor financing (shareholders)
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Mar-17 Mar-16 Mar-15 Mar-14 Mar-13
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 239.93 240.66 207.12 207.12 103.56
Total Share Capital 239.93 240.66 207.12 207.12 103.56
Reserves and Surplus 20,631.58 21,242.43 22,530.77 7,200.76 7,685.32
Total Reserves and Surplus 20,631.58 21,242.43 22,530.77 7,200.76 7,685.32
Total Shareholders Funds 20,871.51 21,483.09 22,737.89 7,407.88 7,788.88
Equity Share Application Money 0 0.67 14.9 0 0
Share Capital Suspense 0 0 33.48 0 0
NON-CURRENT LIABILITIES
Long Term Borrowings 760.64 1,929.27 1,170.32 4.64 4.64
Deferred Tax Liabilities [Net] 0 0 0 192.84 165.41
Other Long Term Liabilities 0.68 13.57 14.37 1.38 1.01
Long Term Provisions 1,132.83 1,924.55 2,422.51 2,524.19 131.49
Total Non-Current Liabilities 1,894.15 3,867.39 3,607.20 2,723.05 302.55
CURRENT LIABILITIES
Short Term Borrowings 4,054.04 3,733.72 4,252.81 2,404.37 38.49
Trade Payables 2,094.20 1,772.44 1,485.03 380.06 363.27
BALANCESHEET OFSUNPHARMA FOR FIVEFINANCIAL YEARS

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0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Total Debt/Equity (X)
Mar-17 Mar-16 Mar-15 Mar-14 Mar-13
Total
Debt/Equity
(X)
0.23 0.26 0.24 0.33 0.01

6. INTEPRETATIONS
 Debt ratio is shown in decimal format because it calculates total
liabilities as a percentage of total assets, lower ratios is more favourable
than a higher ratio.
• A lower debt ratios usually implies a more stable business with the
potential of longetivity because a company with lower ratio has lower
overall debt.
• A ratio of 1 means that total liabilities equals total assets, once in assets
are sold off, the business no longer can operate.
• As we see from 2013 , its going on decreasing , so If its 0.5 its less risky
and if its less then that there is no risky at all .. 1 mean its equal to
liabilities equal to asset , so if we want to pay then if its less its good.
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7. MEETINGS
• Group no.5
• GROUP LEADER: SHARONE SINGH
• Members of the group: Bhuvana chandu,
Manedeep, Deepthi C.
Time taken for preparation of presentation 20-
25 mins
All contribution is equal towards presentation.
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