Ratio Analysis
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This document discusses ratio analysis, which involves comparing financial metrics like profitability, leverage, liquidity, and payout ratios across time periods, companies, or industries to analyze a company's performance and financial position. Various ratios are calculated from the balance sheet, income statement, and cash flow statement for years 2007 and 2006 for a single company. The conclusion states that ratio analysis is a basic tool for financial analysis and an important part of strategic planning as it allows easy profiling of a company from its annual report.
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A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in various companies.[1] If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios.
Ratios can be expressed as a decimal value, such as 0.10, or given as an equivalent percent value, such as 10%. Some ratios are usually quoted as percentages, especially ratios that are usually or always less than 1, such as earnings yield, while others are usually quoted as decimal numbers, especially ratios that are usually more than 1, such as P/E ratio; these latter are also called multiples. Given any ratio, one can take its reciprocal; if the ratio was above 1, the reciprocal will be below 1, and conversely. The reciprocal expresses the same information, but may be more understandable: for instance, the earnings yield can be compared with bond yields, while the P/E ratio cannot be: for example, a P/E ratio of 20 corresponds to an earnings yield of 5%.
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Financial ratios quantify many aspects of a business and are an integral part of the financial statement analysis. Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt.[2] Activity ratios measure how quickly a firm converts non-cash assets to cash assets.[3] Debt ratios measure the firm's ability to repay long-term debt.[4] Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.[5] Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.[6] These are concerned with the return on investment for shareholders, and with the relationship between return and the value of an investment in company’s shares.
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Ratios can be expressed as a decimal value, such as 0.10, or given as an equivalent percent value, such as 10%. Some ratios are usually quoted as percentages, especially ratios that are usually or always less than 1, such as earnings yield, while others are usually quoted as decimal numbers, especially ratios that are usually more than 1, such as P/E ratio; these latter are also called multiples. Given any ratio, one can take its reciprocal; if the ratio was above 1, the reciprocal will be below 1, and conversely. The reciprocal expresses the same information, but may be more understandable: for instance, the earnings yield can be compared with bond yields, while the P/E ratio cannot be: for example, a P/E ratio of 20 corresponds to an earnings yield of 5%.
Values used in calculating financial ratios are taken from the balance sheet, income statement, statement of cash flows or (sometimes) the statement of retained earnings. These comprise the firm's "accounting statements" or financial statements. The statements' data is based on the accounting method and accounting standards used by the organization.
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Financial ratios quantify many aspects of a business and are an integral part of the financial statement analysis. Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt.[2] Activity ratios measure how quickly a firm converts non-cash assets to cash assets.[3] Debt ratios measure the firm's ability to repay long-term debt.[4] Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.[5] Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.[6] These are concerned with the return on investment for shareholders, and with the relationship between return and the value of an investment in company’s shares.
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2. Financial analysis identifies the financial strengths and weaknesses of a firm. It is done by analyzing ratios calculated from a firm's balance sheet and income statement. Key ratios include liquidity ratios, profitability ratios, and leverage ratios.
3. Ratio analysis involves comparing a firm's ratios to standards like its own past ratios, competitor ratios, industry averages, and projected ratios. This allows users to evaluate the firm's financial stability, profitability, and efficiency over time.
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Nestle and Engro Foods are analyzed in the document. Nestle has been operating in Pakistan since 1988 and has a wide range of food products. It aims to be the leading nutrition, health and wellness company in Pakistan. Engro Foods also offers various food products and was the first company to use bactofuge technology. Through financial analysis, it is found that while Nestle has been in business longer, Engro has grown efficiently and increased its share price significantly despite being newer. The document examines the companies' financial statements and ratios to compare their financial performance and positions.
Ratio Analysis
Financial statement analysis involves assessing a firm's past, present, and future financial conditions to identify strengths and weaknesses. Key tools include financial statements and ratio analysis, which standardizes information for comparisons of performance over time, against peers, and to industry standards. Ratio analysis is used for tasks like evaluating loan applications, creditworthiness, mergers, and investment opportunities. Ratios measure liquidity, leverage, activity/efficiency, and profitability.
Types of Ratio analyis and their significance
Ratio analysis is used to analyze financial statements and determine key metrics and relationships between items. It can help management with forecasting, planning, control, and decision making. There are various types of ratios that provide different insights. Liquidity ratios like current and quick ratios measure a company's ability to meet short-term obligations. Leverage or capital structure ratios like debt-to-equity examine how the company is financing its assets and level of financial risk. Activity/turnover ratios review how efficiently a company uses its assets. Profitability ratios assess return on sales, assets, and equity. Ratio analysis provides both opportunities to understand a business better but also has some limitations to consider.
Ratio analysis
Ratio analysis involves calculating and interpreting various financial ratios to evaluate a company's liquidity, solvency, operational efficiency, and profitability. Key ratios include current ratio, quick ratio, debt-to-equity ratio, inventory turnover, gross profit margin, return on equity, and earnings per share. Ratio analysis is used to analyze a company's financial health and performance over time as well as compare it to other companies.
Ratio Analysis
The document discusses financial statement analysis and ratio analysis. It provides examples of various ratios, such as liquidity ratios, leverage ratios, coverage ratios, activity ratios, and profitability ratios. For each ratio, it calculates the ratio for Basket Wonders using data from their income statement and balance sheet. It then compares Basket Wonders' ratios to industry averages to evaluate their financial performance relative to peers. The document finds that while some of Basket Wonders' ratios are similar to industry averages, others indicate potential problems, such as weak profit margins, high inventory levels, and declining interest coverage.
ratio analysis assignment
The document provides consolidated financial information for Infosys Ltd. from 2008 to 2012. It includes the consolidated balance sheet, key financial ratios, and interpretations of key ratios such as gross profit margin, net profit margin, operating profit margin, return on capital employed, current ratio, and quick ratio. The ratios show Infosys' profitability, liquidity, and ability to meet current obligations generally increased over the period except for some fluctuations in a few years.
Financial ratio analysis
The document discusses various financial ratios used to analyze the financial performance of Atlas Honda, including liquidity, activity, debt, profitability, and market ratios. Many of Atlas Honda's ratios have improved over the past five years, such as current ratio, inventory turnover, asset turnover, times interest earned, net profit margin, return on assets, and return on equity. However, some ratios like quick ratio and debt ratio were still below target levels. Overall, the analysis indicates that Atlas Honda has generally strengthened its financial position in recent years through better working capital management and an increased focus on reducing debt.
accounts ppt on ratio analysis
This document defines and discusses various types of ratio analysis used in accounting. It begins by defining a ratio as a mathematical relationship between two quantitative figures. It then outlines the main steps in ratio analysis and some key advantages and limitations. The rest of the document categorizes ratios in several ways: by financial statements, by intended users, by relative importance, and by purpose/function. It provides examples of specific ratios that fall under each of these categories, such as liquidity ratios, profitability ratios, and turnover ratios. The document aims to provide an overview of the different approaches to ratio analysis in accounting.
Project report on ratio analysis of axis bank
The document provides information about Axis Bank's products and services. It describes various retail banking facilities like ATMs, internet banking, loans, and cash management services. The cash management services help corporate customers in managing receivables through collection solutions and payments through options like bulk payments. It also discusses managing resources through liquidity management and managing taxes using CBDT and CBEC collection services.
Ratio analysis....
This document discusses various financial statement analysis concepts including ratios, tools, and purposes. It provides definitions and formulas for key ratios used to analyze liquidity (current ratio, quick ratio, cash ratio), profitability (gross profit ratio, net profit ratio, return on capital employed), and capital structure (capital gearing ratio). Ratio analysis involves calculating ratios, comparing them to standards, and interpreting the relationships between financial statement figures to evaluate a company's performance and financial position.
association of attributes
This document discusses association and attributes in statistics. It provides three methods for determining the association between two attributes/variables: the frequency method, proportion method, and Yule's coefficient of association. The frequency method compares observed and expected values, the proportion method compares ratios, and Yule's coefficient ranges from -1 to 1 to measure the intensity of association. Formulas are provided for the proportion method and Yule's coefficient to calculate the nature and strength of association between two attributes.
Vertical common size balance sheet
Vertical common size balance sheets are presented for HDFC Mutual Fund for the financial years 2011 and 2012. Key points include:
1) Share capital increased slightly while reserves decreased from 2011 to 2012.
2) Investments decreased as a percentage of total funds from 97% to 95.15% over the period.
3) Current assets increased from 3.99% to 5.50% of total funds while current liabilities also increased slightly.
The vertical common size balance sheets allow comparison of line items as a percentage of total funds employed for the two periods.
tTitan ar 2014
- The document provides information about the board of directors, auditors, bankers, registered office, corporate office, regional offices and registrar and transfer agents of Titan Company Limited.
- It lists the names and details of the chairman, managing director, and other board members. It also provides contact information for the head of legal, auditors, bankers and offices.
- The notice is for the 30th Annual General Meeting of Titan Company Limited to be held on 1st August 2014 to transact ordinary and special business which includes adoption of accounts, appointment and re-appointment of directors and auditors, and other matters.
motorola 2001 Summary Annual Report
Motorola experienced a difficult year in 2001 with declining sales and losses. The company implemented a 5-point plan to rebuild value that included strengthening management, stabilizing finances, reducing costs, pursuing growth through innovation, and reevaluating strategies. While most sectors struggled, PCS improved market share and profitability and BCS bolstered its leadership in cable equipment through acquisitions. The company remains focused on innovation in communications solutions and returning to profitability.
Inventory accounting
- Apollo Tyres Ltd is an Indian tire manufacturing company headquartered in Gurgaon, India. It has a global presence with manufacturing facilities in Asia, Europe and Africa.
- The document analyzes Apollo's financial statements from 2011-2013, finding that gross and net profit margins increased from 2011 to 2013 while inventory turnover ratio also increased, indicating more frequent sales.
- A conclusion is that Apollo Tyres is a good long-term investment as the company's performance and global presence continues to grow through acquisitions like the purchase of Cooper Tire & Rubber in 2013.
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Financial ratios analysis project at Nestle and Engro Foods
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The document analyzes the profitability ratios of State Bank of India (SBI) from March 2006 to March 2010. It provides key financial metrics like net profit, earnings per share, return on net worth, basic earning power ratio, net profit margin, and return on assets for SBI over these years. Most ratios showed an improving trend over time, indicating higher profitability. The document also discusses monetary policy factors like lending rates, reverse repo rates, cash reserve ratios, and statutory liquidity ratios that affected SBI's performance during this period.
05-AFM.docx
This document provides financial performance analysis for Tata Motors for the years 2021 to 2017. It includes various ratio analyses like liquidity ratios, solvency ratios, profitability ratios and return on investment ratios. Key ratios discussed are current ratio, debt equity ratio, net profit ratio, earnings per share, debtors turnover ratio and return on equity. Ratio values for each year are presented to analyze the trend. The document aims to evaluate Tata Motors' financial position and performance over the period through ratio analysis.
Template economic factor and compensation and benefit analysis 2014
The document summarizes economic indicators and company financials from 2009-2014. It includes data on GDP growth, inflation, unemployment, salaries, bonuses, exchange rates, and fuel prices. It also outlines the company's salary structure, typical time to move within salary ranges, remuneration mix, and key financial ratios such as EBITDA, net profit, returns on assets and equity, and debt levels. The majority of companies use a single salary structure applied throughout and it typically takes 2-4 years for a fully competent employee to move from the minimum to middle of their salary range.
Indian coding and marking sector reaching maturity, Buy Control Print
The document provides an analysis of Control Print Ltd, an Indian company that provides coding and marking solutions. It includes details of the company's quarterly and annual financial performance, future projections, valuation metrics, and a recommendation to buy the stock with a target price of Rs. 330. The company saw increases in net profit, revenue, and earnings per share in the quarter ending March 2015 compared to the prior year period. The analysis also provides an industry overview and positive outlook for future growth.
Basic principle of financial statement analysis
the basic principle of financial statement analysis. purpose's analysis, method of financial statement analysis, and technic of financial statement analysis
Prabhudas lilladher techmahindra_29june_2015
Tech Mahindra reported a weak Q1FY16 outlook, with marginal revenue decline and sustained pressure on margins expected. The company anticipates challenges in its communication business to persist through FY16, though its enterprise business is expected to grow in line with industry averages. Analysts revised down their estimates for FY16 and FY17 but maintained a 'buy' rating, expecting improvement in the second half of FY16. Margins are forecast to bottom out in the first half before showing gains from cost optimization and currency benefits in the latter half of the year.
For this assignment, you will complete the Financial Overview compon.docx
For this assignment, you will complete the Financial Overview component of your course project. To complete this assignment, use the Financial Analysis Toolkit Excel file, provided in the Resources, to complete a financial analysis of your chosen company (Apple Inc,) over the last two most recent years available in annual reports. Replace the numbers provided in the Excel file with the appropriate numbers for your firm. Then, write a 2–3 page financial analysis of your company, addressing the following elements:
Identify your company, its industry, and analyze the important segments (percentage of sales or subsidiaries) of your company compared to its industry and its overall business.
Perform a complete financial analysis of your chosen company's financial statements—horizontal, vertical (Percentage of Sales and Common-Size), and changes in ratios—for the last two years.
Compare all ratios to industry averages. Evaluate the company's ratios against the industry averages.
Explain the significance of the company's ratios when compared to industry averages.
Analyze the company's cash flows.
Assess the overall financial health of your company based on this financial analysis.
A great way to integrate your completed calculations from your Excel sheet into your written analysis is to paste pieces of the worksheet directly into your Word document. You are also encouraged to create graphs or charts from the data that may illustrate your analyses as well.
Tool Kit for Analysis of Financial Statements
Financial statements are analyzed by calculating certain key ratios and then comparing them with the ratios of other firms and by examining the trends in ratios over time.
We can also combine ratios to make the analysis more revealing, those indicated below are exceptionally useful for this type of analysis.
RATIO ANALYSIS (Section 3.1)
*NVIDIA Fiscal Years starts and ends on Jan 31, such that FY13 represents Jan 31,2012 to Jan31, 2013
Input Data:
2013
2012
Year-end common stock price
$12.26
$13.86
Year-end shares outstanding (in thousands)
616,756
612,191
Tax rate
15%
12%
After-tax cost of capital
Lease payments (in thousands)
$18,998
$21,439
Required sinking fund payments
$0
$0
Balance Sheets
(in thousands of dollars)
Assets
2013
2012
Cash and equivalents
$906,223
$767,218
* Added to cash and quivalents prepaid expense and deferred income taxes
Short-term investments
$2,995,097
$2,461,700
2013
2012
Accounts receivable
$454,252
$336,143
69,701
49,411
prepaid expenses and other
Inventories
$419,686
$340,297
103,736
49,931
deferred income taxes
Total current assets
$4,775,258
$3,905,358
Net plant and equipment
$1,636,987
$1,647,570
* In addition to equpment also includes goodwill, intangible assets, and other assets
Total assets
$6,412,245
$5,552,928
2013
2012
641,030
641,030
goodwill
.
Financial Ratios
The document discusses financial ratio analysis for companies in the FMCG (Fast Moving Consumer Goods) sector in India. It provides definitions of common financial ratios used to analyze companies, including liquidity, leverage, and profitability ratios. Tables then show the financial ratio values for major FMCG companies like ITC, HUL, Dabur, and Nestle over several years from 2008 to 2007. Key highlights noted are that FMCG companies have shown stable profit margins over the years, low debt-to-equity ratios, current ratios below 1 for most companies except ITC, and high dividend payout and equity dividend ratios.
Capital First: Q4FY15 net profit up 22.28% y/y to Rs. 364.73 mn; Buy
Capital First Ltd. is a provider of financial services across consumer and wholesale businesses. For the quarter ending March 31, 2015 (Q4 FY15), the company reported a net profit of Rs. 364.73 million, an increase of 22.28% compared to the corresponding period the previous year. Net sales increased 33.83% to Rs. 3850.42 million for Q4 FY15. Earnings per share for Q4 FY15 were Rs. 4.01, up from Rs. 3.61 in the same quarter of the previous year. The company has recommended a dividend of Rs. 2.20 per share.
Intellect 1QFY18
- Intellect Design Arena reported steady Q1 results with revenues of $37.4 million, flat quarter-over-quarter but up 22% year-over-year, in line with estimates. Higher operating leverage led to a significant improvement in EBITDA margins to 5.6% compared to -6.5% a year ago.
- While maintaining a Buy rating, the analyst lowered the target price to Rs 150 from Rs 175 previously to account for a 23% dilution from a rights issue and currency movements.
- Revenue growth is expected to continue but estimates were lowered slightly to reflect currency impacts. Positive free cash flow and a stronger balance sheet are anticipated in FY19.
Intrasoft 1QFY18
- Intrasoft Technologies reported accelerated revenue growth of 21.6% year-over-year in the first quarter of fiscal year 2018, with revenues reaching $40 million. However, margins declined as the company prioritized growth over profits.
- While revenue growth was strong, the EBITDA margin declined 56 basis points to 1.5% as the company focused on gaining market share by sharing margin benefits with customers in a competitive environment.
- The analyst maintains a Buy rating but cuts fiscal year 2019 earnings estimates by 13.6% to factor in currency movements, competition, and the company's cash focus, which may lead to some short-term margin sacrifice. The target price is revised to Rs. 530 per
Financial statement of Steel Ind..
This document contains financial ratio analyses for three steel companies - Jindal Steel, Bhushan Steel, and Mukand Steel for the years 2007-2009.
Some key highlights include: Jindal Steel's profitability ratios declined in 2009 due to increased operating expenses. Bhushan Steel's current and quick ratios improved in 2009, indicating better working capital management. Mukand Steel suffered losses in 2009 with many of its profitability and liquidity ratios deteriorating significantly from the previous years.
Presentation Material for 3Q / Mar. 2020
- The document summarizes Ricoh Leasing Company's financial results for the third quarter of the fiscal year ending March 2020. Net sales and profits reached record highs and performance was progressing steadily towards full-year forecasts. Operating assets increased by 69.1 billion yen from the previous term due to acquiring contracts. The default rate decreased due to increased operating assets while default loss showed a slight increase.
Chembond Chemicals: To keep its growth story; Maintain buy
The document provides a research report on Chembond Chemicals Ltd by CMP Securities. Some key points:
- Chembond reported a 34.88% increase in net profit to Rs. 48.76 million for Q4 FY15 compared to the same period last year.
- Revenue was up 0.47% to Rs. 741.44 million for Q4 FY15. Earnings per share increased 34.88% to Rs. 7.32.
- The report recommends buying Chembond shares with a target price of Rs. 460, citing expected sales and profit growth over the next few years. Net sales and profit are estimated to grow at a CAGR of 9%
Q2FY15: Hold Mahindra & Mahindra Financial Services - Nirmal Bang
M&M Financial Services reported quarterly results that were in line with expectations. While profit declined slightly year-over-year due to higher provisions, asset quality issues were arrested and loan growth improved driven by growth in pre-owned vehicles. The company's asset quality and margins showed signs of improvement due to better collections and controlled slippages. However, valuations leave limited upside, leading analysts to maintain a HOLD rating with a target price slightly above current levels.
Mastek 1QFY18
- Mastek reported strong revenue growth of 6.9% quarter-over-quarter and 48.5% year-over-year in US dollar terms for the first quarter of fiscal year 2018.
- EBITDA margins remained steady at 12.1% despite wage hikes, as operational efficiencies offset increased costs.
- While execution remains solid, valuations have converged with peers following price appreciation; the analyst downgrades the stock to "Hold" and sets a target price of Rs 355.
MMS - initiation of equity research report
This document summarizes a stock analysis report on McMillan Shakespeare (MMS) from Evans & Partners. The report maintains a positive recommendation on MMS. In the first half of 2012, MMS's Remuneration Services segment saw strong earnings growth while its Asset Management segment remained flat. The report upgrades its valuation of MMS from $10.40 to $11.27 per share based on modest earnings forecast revisions for fiscal years 2012-2014. Key growth opportunities for MMS include cross-selling products, new financing programs, and potential outsourcing contracts.
ACCT608: Investment Analysis of Sheng Siong Group
The document analyzes Sheng Siong Group as an investment opportunity. It provides three scenarios for the company's performance and finds that the base case scenario would yield a 30.1% return on investment, higher than a 9.3% return from an A-grade bond. The analysis also shows Sheng Siong has higher profitability and return on equity than Dairy Farm International based on financial metrics. Overall the document recommends buying shares in Sheng Siong Group.
Second Quarter of Fiscal Year Ending March 2016 Briefing on Financial Results
Ricoh Leasing Company reported financial results for the second quarter of fiscal year ending March 2016. Net sales increased 6.1% year-over-year to 1,363 billion yen. Operating income grew 1.6% to 83 billion yen. For the full fiscal year ending March 2016, the company forecasts net sales growth of 2.8% and a 6.5% increase in net income. Ricoh aims to strengthen its leading position in key markets such as office equipment, medical, and nursing care through collaboration within the Ricoh Group.
Chapter 14
This document discusses accounting and financial analysis. It explains that accounting provides financial information about a company through statements. Managers use statement information to evaluate performance and make decisions. The document also discusses ratio analysis and its use in evaluating a firm's financial condition compared to industry averages. Specific ratios are calculated for a sample company, Kayu Kayan Bhd, to assess liquidity, efficiency, leverage, and profitability.
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Inventory Control ABC Analysis
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A vendor should only be added to an approved vendor list after careful consideration so that materials are received on time, at competitive prices, and without issues. It is important to have cooperative relationships with vendors as they provide needed materials and services at reasonable costs and can help in emergencies. When selecting vendors, factors like product range, location, financial stability, technical competence, market reputation, and pricing should be evaluated. Maintaining an approved vendor list helps ensure satisfactory performance and increases competition during the bidding process.
Supply Chain Management
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The document discusses several projects that provide services and opportunities to rural communities in India. It describes Drishtee, an organization that operates computer-based kiosks staffed by rural entrepreneurs to deliver services like computer education, digital photography, and selling products. It also discusses SKS Microfinance, one of the largest microfinance institutions in India, which provides small loans to help empower poor women and support their small businesses through a group-lending model. The document shares stories of individuals who have benefited from these programs.
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Navigating Your Financial Future: Comprehensive Planning with Mike Baumann
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Ending stagnation: How to boost prosperity across Scotland
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
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China's Investment Leader - Dr. Alyce SU
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
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Ratio Analysis
- 3. Profitability Ratios for Ratio Formula Mar’07 Mar’06 Gross profit margin (%) Revenue – COGS x100 Revenue 28.57 28.58 Net profit margin (%) Net profit x 100 Revenue 28.05 26.17 Adjusted return on net worth(%) Net income x100 Avg. stockholder’s equity 33.47 36.21 Return on long term funds (%) EBIT x 100 Long term funds 36.64 40.62
- 4. Per Share Ratios for Ratio Formula Mar’07 Mar’06 Adjusted EPS (Rs.) EBIT-Adjustments Total No. of Shares 65.42 90.65 Dividend per share (Rs.) Total Dividend Total No. of Shares 11.50 45.00 Operating profit per share (Rs.) Operating profit Total No. of Shares 73.98 108.51 Net operating income per share (Rs.) Net Operating Income Total No. of Shares 230.20 327.63 Free reserves per share (Rs.) Total free reserves Total No. of Shares 190.30 245.07
- 5. Leverage Ratios for Ratio Formula Mar’07 Mar’06 Long term debt/ Equity Long Term Debt Equity 0 0 Total debt/ equity Total Debt Equity 0 0 Owners fund as % of total source Equity *100 Total Funds 100 100 Fixed assets turnover ratio Sales Fixed Assets 3.38 3.18
- 6. Liquidity Ratios for Ratio Formula Mar’07 Mar’06 Current ratio Current Assets Current Liabilities 4.96 2.75 Quick ratio Current Assets-Inventories Current Liabilities 4.91 2.73
- 7. Payout Ratios for Ratio Mar’07 Mar’06 Dividend payout ratio (net profit) 19.85 58.32 Dividend payout ratio (cash profit) 17.66 49.89 Earning retention ratio 79.91 43.48 Cash earnings retention ratio 82.15 51.43
- 8. Per Share Ratio for the year 06-07 Ratio Adjusted EPS 65.42 6.68 Dividend Per Share 11.5 2.00 Operating Profit per share 73.98 12.91 Net Operating income per share 230.20 59.04 Free Reserves per share 190.30 54.23
- 9. Profitability Ratios for the year 06-07 Ratio Operating Margin(%) 32.13 21.87 Gross Profit Margin(%) 28.57 17.72 Net Profit Margin(%) 28.05 14.48 Adjusted Return On Net worth(%) 33.47 16.91 Return on long term funds(%) 36.64 6.81
- 10. Leverage Ratios for the year 06-07 Ratio Long Term Debt/Equity 0 1.75 Total Debt/Equity 0 1.79 Owners Fund as % of total source 100 35.88 Fixed assets Turnover Ratio 3.38 2.96
- 11. Liquidity Ratios for the year 06-07 Ratio Current Ratio 4.96 3.24 Quick Ratio 4.91 3.03
- 12. Payout Ratios for the year 06-07 Ratio Formula Dividend payout Ratio (net profit) Dividends (yearly) /Net Income 19.85 32.63 Earning Retention Ratio Net Income-Dividends / Net Income 79.91 62.61
- 13. CONCLUSION Ratio Analysis is the basic tool of financial analysis and Financial analysis itself is an important part of any business planning process as SWOT ,being basic tool of the strategic analysis plays a vital role in a business planning process and no SWOT analysis would be complete without an analysis of companies financial position. In this way Ratio Analysis is very important part of whole business strategic planning.
- 14. As Companies Dispatch their long annual report once a year, the financial ratio help us to profile a company easily.