This document provides a common size balance sheet and selected financial ratios for companies A through H. It then analyzes each company based on their balance sheet and ratio figures. Some key highlights include: Company A (Indian Hotels) has high reserves, secured loans, fixed assets, and current assets. Company B (Infosys) has huge cash reserves and surplus with negligible inventory. Company C (Ranbaxy) has high reserves for R&D and fixed assets for production. Company D (P&G) has large reserves, gross block of assets, and current assets/liabilities. Company F (Tata) relies on external funding and has high interest expenses. Company G (Zee TV) is a service sector with

2. Common Size Balance Sheet
SOURCES OF FUNDS
Owner’s Fund
A B C D E F G H
Equity 2.73 1.59 6.69 9.93 4.77 6.7 0.93 6.76
Share
Capital
Reserve 50.99 98.41 86.04 90.06 82.27 44.95 90.13 33.55
s&
Surplus
Loan Funds
Secured 43.55 0.00 2.95 0.00 9.74 28.18 5.48 43.69
Loans
Unsecure 2.74 0.00 4.32 0.00 3.22 20.18 3.47 16.00
d Loans
Total 100.0 100 100 100 100 100 100 100
0

3. USES OF FUNDS
Fixed Assets
Gross 52.35 46.1 53.00 101.68 61.48 120.88 3.04 131.16
Block 8
Less : Acc 17.58 18.8 18.16 52.72 39.05 50.95 0.45 43.75
Dep. 9
Net Block 34.78 27.2 34.83 48.96 22.42 69.93 2.59 87.71
8
Capital 4.79 7.24 0.54 0.00 1.59 2.95 0.23 4.92
Work in
progress
Investment 32.70 2.14 29.30 0.00 4.99 24.93 79.89 9.84
s & Other
Net Current Assets
Assets
Current 43.90 85.42 76.86 143.88 173.69 59.76 23.28 34.57
Asset,
loans &
Advances
Less CL & 16.17 22.08 41.54 92.85 102.60 57.57 5.99 37.04
P
Total net 27.73 63.34 35.32 51.04 71.01 2.19 17.29 -2.47

4. Selected Financial Ratios
PROFITABILITY RATIOS
Operating 15.9 39.88 14.35 26.11 9.12 7.73 31.69 15.89
Margin (%) 0
Net Profit 13.2 30.41 12.11 18.34 6.60 -0.85 16.51 4.58
Margin (%) 0
Return On -0.62 38.20 11.84 32.20 8.72 -4.16 2.41 11.40
Net Worth
(%)
Return On 4.66 44.74 14.65 43.70 13.14 5.10 4.56 17.67
Cap.
Employed
(%)
Leverage Ratios
Long Term 0.81 0.00 0.03 0.00 0.18 0.79 0.04 0.68
Debt/Equity
Total 0.86 0.00 0.07 0.00 0.14 0.93 0.09 1.48
Debt/Equity

5. LIQUIDITY RATIOS
Curren 2.72 3.87 1.85 1.55 1.69 1.04 3.90 0.93
t Ratio
Quick 2.60 3.87 1.21 1.33 1.26 0.64 3.37 0.61
Ratio
ACTIVITY RATIO
Inventory 83.27 n.a. 5.09 16.63 3.97 9.90 2.99 18.30
Turnover
Ratio
Fixed Assets 0.68 2.71 2.36 1.85 2.18 1.27 2.99 0.84
Turnover
Ratio

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

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