2. Ind
ex
Serial
Number
Topic
1 Introduction And Meaning Of Ratio Analysis
2 Objectives Of Ratio Analysis
3 Advantages And Uses Of Ratio Analysis
4 Limitations Of Ratio Analysis
5 Classification Of Ratio Analysis
6 Meaning Formula Objectives And Significance Of
Ratio Analysis
7 Introduction To GAIL
8 Products & Services Offered By GAIL
9 Balance Sheet Of GAIL
10 Statement Of Profit And Loss
11 Computation Of 17 Ratios
12 Comparative Statement
13 Format of Comparative Statement
14 Comparative Balance Sheet
15 Learning Outcome & Conclusion
13 Bibliography
3. Introduction &
Meaning Of
Ratio Analysis
• ‘Ratio’ is an arithmetical expression of relationship
between two related or independent items. Ratios calculated
on the basis of accounting data are called Accounting Ratio.
Ratio Analysis is the study of relationship among various
financial factors in a business. Ratio analysis is an
accounting tool, which can be used to measure the solvency,
the profitability, and the overall financial strength of a
business, by analysing its financial accounts (specifically the
balance sheet and the profit and loss account).
• Accounting ratios are very easy to calculate and they
enable a business to highlight which areas of its finances are
weak and therefore require immediate attention.
• Ratio analysis is a quantitative method of gaining
insight into a company's liquidity, operational efficiency, and
profitability by studying its financial statements such as the
balance sheet and income statement. Ratio analysis is a
cornerstone of fundamental equity analysis.
• It is a technique of analysing financial statements. It
is a process of determining and interpreting
relationships between the related or independent items
of financial statements to have a meaningful
understanding of the performance and financial position
of an enterprise.
4. Objectives of
Ratio Analysis
1 Measure of Profitability –
Profit is the ultimate aim of every organisation. Context is
required to measure profitability, which is provided by ratio
analysis. Gross Profit Ratios, Net Profit Ratio, Expense ratio
etc provide a measure of the profitability of a firm. The
management can use such ratios to find out problem areas
and improve upon them.
2 Ensure Suitable Liquidity –
Every firm has to ensure that some of its assets are liquid, in
case it requires cash immediately. So the liquidity of a firm
is measured by ratios such as Current ratio and Quick Ratio.
These help a firm maintain the required level of short-term
solvency.
3 Overall Financial Strength –
There are some ratios that help determine the firm’s long-
term solvency. They help determine if there is a strain on
the assets of a firm or if the firm is over-leveraged. The
management will need to quickly rectify the situation to
avoid liquidation in the future. Examples of such ratios are
Debt-Equity Ratio, Leverage ratios etc.
5. Advantages &
Uses of Ratio
Analysis
1 Useful in Analysis of Financial Statements –
Accounting Ratios are useful for understanding the financial
position of the enterprise. Bankers, investors, creditors, all
analyse Balance Sheet and Statement of Profit and Loss by
means of ratios.
2 Useful in Simplifying Accounting Information –
Accounting Ratio simplifies, summarises, and systematises a
long array of accounting information to make them
understandable. Its main contribution lies in communicating
precisely the interrelationships which exist between various
elements of financial statements. In the words of Biramn
and Dribin, “Financial Ratios are useful because they
summarise briefly the results of detailed and complicated
computation.”
3 Useful in Assessing the Operating Efficiency of
Business –
The management can determine the operating efficiency of
business with the help of Activity Ratios such as Inventory
Turnover Ratio, Trade Receivables Turnover Ratio and
Working Capital Turnover Ratio.
6. 4 Useful in Determining Profitability –
Management and Investors can determine the profitability
with respect to Revenue from Operations and Capital
Employed with the help of Profitability Ratios such as Gross
Profit Ratio, Net Profit Ratio, Operating Profit Ratio, and
Return on Investment.
5 Useful for Forecasting –
Ratios are helpful in business planning and forecasting. The
trend of ratios is analysed and used as a guide to future
planning. What should be the future course of action is
decided, many a times, on the basis of trend of ratios, that
is, ratios are calculated for a number of years.
6 Useful in Identifying the Weak Areas –
Ratio Analysis assists in identifying weak areas in the
business even though the overall performance may be
satisfactory. Management can pay attention to the
weaknesses and take remedial action. For example, if the
firm finds that the increase in distribution expenses is more
than the proportionate to the results achieved, these can be
examined in detail to prevent wastage, if any.
7 Useful in Inter-firm and Inter-firm Comparison –
Performance of the enterprise is compared with that of
other enterprises and with industry in general. The
comparison is called inter-firm comparison. If the
performance of different units of the same firm is to be
7. Limitations of
Ratio Analysis
1 Misleading if Based on Incorrect Information –
Ratios are calculated from the financial statements, thus, the
reliability of ratios and their analysis is dependent upon the
correctness of the financial statements. If the Financial
Statements are misleading, the analysis will also show false
picture.
2 Definitions of Terms not standardised –
Elements and sub-elements of financial statements are not
defined in a unique manner. An enterprise may compute
ratios on the basis of profit after interest and tax; another
enterprise may consider profit after interest but the ratios
that will be computed will be different and will not be
comparable. Before comparison is made, one must ensure
that the ratios have been worked out on the same basis.
3 Not Comparable if Different Firms Follow Different
Accounting Policies –
When results of two enterprises are being compared, it
should be kept in mind that the enterprises may follow
different accounting policies. For example, one enterprise
may charge depreciation on the straight line basis and the
other on diminishing value basis. Such differences will
adversely affect the comparison of the financial statements.
8. 4 Effect of Price Level Changes –
Change in price level affects the comparability of ratios. But
price level changes are not considered in the accounting
variables from which ratios are computed, This handicaps
the utility of accounting ratios.
5 Ignores Qualitative Factors –
Ration Analysis is a technique of quantitative analysis and
not qualitative analysis, which is important in decision
making. For example, average collection period may be
equal to standard credit period, but debtors may be in the
list of doubtful debtors, which is not discussed by ratio
analysis.
6 Limitation of a Single Ratio –
A single ratio cannot be explained and no decision can be
taken on its basis. For example, X Ltd has Current Ratio of
2:1.5 can only tell that when current assets are 2, current
liabilities are 1.5. Hence, a single ratio is of less use.
7 Difficult to Evolve a Standard Ratio –
The financial and economic scenario is dynamic, therefore,
it is not easy to evolve a standard ratio acceptable for all
times. Again the underlying conditions of different firms
and different industries are not similar. Therefore, an
acceptable standard ratio cannot be evolved.
9. Classification of Ratio Analysis
Liquidity Ratio Solvency
Ratio
Activity Ratio Profitability
Ratio
• Current Ratio
• Quick Ratio /
Acid Test
Ratio
• Debt To
Equity Ratio
• Proprietary
Ratio
• Debt to Total
Asset Ratio
• Interest
Coverage
Ratio
• Trade
Receivable
Turnover Ratio
• Trade Payable
Turnover Ratio
• Working
Capital
Turnover Ratio
• Inventory
Turnover Ratio
• Gross Profit
Ratio
• Net Profit
Ratio
• Operating
Ratio
• Operating
Profit Ratio
• Earning Per
Share
• Price Earning
Ratio
• Return On
Investment
10. Formula,
Objectives &
Significance Of
The 17 Ratios
1) Current Ratio –
Meaning -- It is a relationship of current assets to current
liabilities and is computed to assess the short-term financial
position of the enterprise.
Formula -- Current Assets
Current Liabilities
Objectives & Significance -- The objective of calculating
Current Ratio is to assess the ability of the enterprise to
meet its short-term liabilities as they become due for
payment. It is a ratio used to assess the short-term solvency
of the enterprise.
2) Quick Ratio –
Meaning -- It is a relationship of Quick Assets with Current
Liabilities. It is computed to assess short-term liquidity of
the enterprise.
Formula -- Quick Assets
Current Liabilities
Objectives & Significance -- The objective of computing
Quick Ratio is to assess the ability of firm to meet its short-
term obligations as and when due for payment without
11. relying on the realisation of inventories. Higher the Quick
Ratio, better the short-term financial position.
3) Debt to Equity Ratio –
Meaning -- It expresses relationship between borrowings
(debt) and equity.
Formula -- Debt / Long Term Debt
Equity / Shareholder’s Funds
Objectives & Significance -- It aims to measure the relative
proportions of outsiders’ funds and shareholders’ funds
invested in the company.
4) Proprietary Ratio –
Meaning -- It establishes the relationship between
proprietors’ funds and total assets.
Formula -- Shareholders’ Funds / Equity
Total assets
Objectives & Significance -- It aims to measure the relative
proportions of outsiders’ funds and shareholders’ funds
invested in the company.
5) Debt to Total Assets Ratio –
Meaning -- It establishes relationship between debt and
total assets of the enterprise.
12. Formula – Debt
Total Asset
Objectives & Significance – It computes the ratio to
establish the relationship between debt and total assets of
the enterprise. It also measures the safety margin available
to the lenders of long- term debt.
6) Interest Coverage Ratio –
Meaning -- It establishes the relationship between net
profit before interest and tax and interest on long-term
debts.
Formula -- Net Profit before Interest and Tax Interest on
Long Term Borrowings
Objectives & Significance -- It aims to ascertain the
amount of profit available to cover the interest. It indicates
that an enterprise can increase borrowing. This ratio is
meaningful to debenture holders and lenders of long-term
credit.
7) Trade Receivables Turnover Ratio –
Meaning -- It is the ratio that establishes relationship
between Credit Revenue from Operations and Average
Trade Receivables of the year.
Formula -- Credit Revenue from Operations
Average Trade Receivables
13. Objectives & Significance -- This ratio shows the number
of times amount invested in trade receivables is turned over
in a year in relation to Revenue from Operations. Higher it
is, the better.
8) Trade Payables Turnover Ratio –
Meaning -- It shows the relationship between net credit
purchases and average trade payables.
Formula -- Net Credit Purchases
Average Trade Payables
Objectives & Significance -- It determines the efficiency
with which Trade Payables are managed and paid. A high
ratio indicates shorter payment period.
9) Working Capital Turnover Ratio –
Meaning -- It establishes the relationship between Working
Capital and Revenue from Operations.
Formula -- Revenue from Operations
Working Capital
Objectives & Significance -- It is computed to ascertain
whether or not working capital has been utilised efficiently
in making sales. Higher the ratio, more efficient the
management.
14. 10) Inventory Turnover Ratio –
Meaning -- It establishes the relationship between Cost of
Revenue or Cost of Goods Sold during a period and
average inventory carried during that period.
Formula -- Cost of Revenue from Operations
Times Average Inventory
Objectives & Significance -- It determines the efficiency
with which inventory is being used (inventory management).
Higher the ratio, more the sales generated by a unit of
rupee in inventory.
11) Gross Profit Ratio –
Meaning -- It establishes the relationship of Gross Profit
with Revenue from Operations of an enterprise.
Formula -- Gross Profit x 100
Revenue from Operations
Objectives & Significance -- It helps in fixing selling prices
and assessing efficiency of trading activities. It helps
investigate for a change. It determines how much selling
price per unit may decline without resulting in operational
losses.
15. 12) Net Profit Ratio –
Meaning -- It establishes the relationship between Net
Profit and Revenue from Operations.
Formula -- Net Profit x 100
Revenue from Operations
Objectives & Significance -- It indicates overall efficiency of
the business. Higher the Net Profit Ratio, better it is for the
business. Increase in Ratio over the previous period shows
improvement in operational efficiency.
13) Operating Ratio –
Meaning -- It establishes relationship between Operating
Cost and Revenue from Operations.
Formula -- Operating Cost x 100
Revenue from Operations
Objectives & Significance -- It is the test of operational
efficiency of the business. Lower the Operating Ratio, the
better, because it would leave higher margin profit to meet
interests and dividends.
14) Operating Profit Ratio –
Meaning -- It measures the relationship between Operating
Profit and Revenue from Operations.
Formula -- Net Operating Profit x 100
Revenue from Operations
16. Objectives & Significance -- It helps determine the
operational efficiency of the management. It also helps
assess profitability of the enterprise.
15) Earning per Share (EPS) –
Meaning -- It is the earnings of a company attributable to
the Equity Shareholders divided by the number of Equity
Shares.
Formula -- Net Profit after Tax and Preference
. Dividend Number of Equity Shares
Objectives & Significance -- This ratio helps in evaluating
the prevailing market price of share in the light of profit
earning capacity. More the EPS, better the performance
and prospects of the company.
16) Price Earning (P/E) Ratio –
Meaning -- This ratio measures the relationship between
the market price share and earning per share.
Formula - Market Value of an Equity Share
Earnings per Share
Objectives & Significance -- The objective of computing
.
this ratio is to find out the expectations of the shareholders.
It helps decide whether shares should be purchased or not
in a company.
17. 17) Return on Investment –
Meaning -- It shows the relationship of profit with Capital
Employed.
Formula -- Net Profit before Interest & Tax x 100
Capital Employed
Objectives & Significance -- It assesses overall
performance of the enterprise. It measures how efficiently
the resources of the business are used.
19. Introduction
to GAIL
Gail (India) Limited (GAIL) (formerly known as Gas Authority of India
Ltd.) is Government of India undertaking company. Gail is the
largest state-owned natural gas processing and distribution
company in India. It is headquartered in New Delhi. It is a state-
owned enterprise of the Government of India, under the
administrative control of the Ministry of Petroleum and Natural Gas.
It was one of the largest cross-country natural gas pipeline projects
in the world. This 1750-kilometre-long pipeline was built at a cost
of ¹17 billion (US$240 million) and it laid the foundation for
development of market for natural gas in India. GAIL
commissioned the 1,750 kilometres (1,090 mi) Hazira-Vijaipur-
Jagdishpur (HVJ) pipeline in 1991. GAIL began its city gas
distribution in New Delhi in 1997 by setting up nine compressed
natural gas (CNG) stations. In order to secure gas for its
mainstream business, the Exploration and Production department
was created.
As a strategy of going global and further expanding global
footprint, GAIL has formed a wholly owned subsidiary company,
GAIL Global (Singapore) Pte Ltd. in Singapore for pursuing
overseas business opportunities including LNG & petrochemical
trading. GAIL has also established a wholly owned subsidiary, GAIL
Global (USA) Inc. in Texas, USA. The US subsidiary has acquired
20% working interest in an unincorporated joint venture with
Carrizo Oil & Gas Inc in the Eagle Ford shale acreage in the state of
Texas. In addition to having two wholly owned subsidiaries in
Singapore and the US, GAIL has a representative
office in Cairo, Egypt to pursue business opportunities in Africa and
the Middle East.
20. GAIL is also an equity partner in two retail gas companies in Egypt,
namely Fayum Gas Company (FGC) and National Gas Company
(Natgas). Besides, GAIL is an equity partner in a retail gas company
involved in city gas and CNG business in China – China Gas
Holdings Limited (China Gas). Further, GAIL and China Gas have
formed an equally owned joint venture company – GAIL China Gas
Global Energy Holdings Limited for pursuing gas sector
opportunities primarily in China.
In terms of the guidelines issued by the Department of Public
Enterprises, GAIL has allocated an annual budget of 2% of the
previous year's profit after tax for CSR activities, which is effectively
used for carefully chosen programmes. Socially useful programmes
have been undertaken in GAIL since its inception in and around the
areas adjoining its major work centres under the SCP/TSP Plan. But
over the years, the scope of the CSR activities, the nature of
programmes undertaken and the systems adopted for the
implementation of these programmes have been streamlined and
strengthened and the work under SCP/TSP came under the wider
scope of CSR. Today, CSR & sustainability development is accorded
high priority in the organisational ethos and attempted to be
interwoven in all the business activities and the projects that are
being undertaken by the company. It is currently a sponsor of
Durand Cup.
21. Products & Services Provided by GAIL
1 LPG Transmission –
GAIL is the first company in India to own and operate pipelines for
LPG transmission. It has 1,900 km LPG pipeline network 1,300 km
of which connects the western and northern parts of India and 600
km of networks is in the southern part of the country connecting
Eastern Coast. The LPG transmission system has a capacity to
transport 3.8 MMTPA of LPG. LPG transmission through pipelines
was 3337 TMT in the year 2010-11.
2 Petrochemicals –
GAIL's the country’s premier Natural Gas Marketer & Transporter,
diversified into the manufacturing and marketing of downstream
HDPE & LLDPE from natural gas cracking at its Pata (Uttar Pradesh
state, India) unit from 19th April 1999. GAIL has also formed a Joint
venture company by the name of M/s Bhramaputra Cracker and
Petrochemicals Ltd. (BCPL) to accelerate the GoI’s only authoriSed
petrochemical project in the North East of India (at Lepetkata,
Assam, India). The BCPL is a JV between the Government of
Assam, GAIL(I) Ltd., OIL (India) Ltd. & NRL. In a successful span of
about a decade of establishing and marketing its grades under the
brand names G-Lex & G-Lene, GAIL has alongside augmented its
name plate capacity of HDPE & LLDPE to 4,10,000 MTPA by
adding another dedicated HDPE downstream polymerization unit
of 1,00,000 MTPA.
3 City Gas Distribution –
GAIL is the pioneer of city gas distribution in India. GAIL took many
initiatives to introduce PNG for households and CNG for
22. the transport sector to address the rising pollution levels. Pilot
projects were launched in early 1990s in two metros Delhi and
Mumbai through joint venture companies Indraprastha Gas Limited
(IGL) and Mahanagar Gas Limited (MGL) leading to the start of
commercial operation of city gas projects. The results of these
ventures are quite visible through the improvement in air quality in
these cities.
4 E and P –
Every cloud has a silver lining and every adversity hides an
opportunity. GAIL's Exploration and Production (E&P) unit was born
in just such a scenario.
As the Indian Economy opened up around the year 2000, the
business environment changed dramatically. For GAIL,
liberalisation meant competition in our core business, that is,
midstream and downstream national gas distribution. No longer
could we rely on statutory support mandating secured sources of
Natural Gas for GAIL. The reserves contained in existing contracted
fields were fast depleting. The writing was on the wall that we had
to find new sources.
5 Liquid Hydrocarbons –
GAIL is marketing Gas Processing Unit’s (GPU’s) products namely
Liquefied Petroleum Gases (LPG), Propane, Pentane, Naphtha and
by-products of polymer plant namely MFO, Propylene &
Hydrogenated C4 Mix. LPG is being sold exclusively to PSU Oil
Marketing Companies (OMCs) while other products are sold
directly to customers in Retail segment.
GAIL is India's major producer of Propane, popularly known as
GAIL Propane. It is an eco-friendly fuel and provides an effective
way of reducing pollution and increasing productivity.
23. GAIL produces and markets Pentane. GAIL is presently operating 7
Gas Processing Units (GPU) located at Vijaipur (2 Units), Auraiya,
Vaghodia, Usar, Lakwa & Gandhar plant for production of LPG and
GCU at Pata plant for production of Polymer. In the process of
production of main products viz.
6] GAIL TEL –
GAILTEL, the Telecom & Telemetry services arm of GAIL (India)
Limited, is providing communication services for its business critical
pipeline Supervisory Control and Data Acquisition (SCADA),
Enterprise Resource Planning (ERP) for automation of organization-
wide business processes/functions and inter/intra office
communications apart from commercially leasing telecom services
to telecom operators across India since 2001. GAILTEL services
include long term lease of Dark Fibre and Duct under IRU, Tower
space & collocation facilities and point-to-point leased line
Bandwidth services. With SDH & DWDM as the core layer, GAILTEL
network is built largely along the highly secured GAIL’s cross
country pipeline corridor and ensure highly reliable and error free
service to its internal & external customers.
24. 12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 4,510.14 2,255.07
TOTAL SHARE CAPITAL 4,510.14 2,255.07
Reserves and Surplus 39,460.96 41,837.87
TOTAL RESERVES AND SURPLUS 39,460.96 41,837.87
TOTAL SHAREHOLDERS FUNDS 43,971.10 44,092.94
NON-CURRENT LIABILITIES
Long Term Borrowings 3,612.12 870.58
Deferred Tax Liabilities [Net] 4,497.19 5,947.71
Other Long Term Liabilities 4,485.98 3,438.38
Long Term Provisions 529.67 694.55
TOTAL NON-CURRENT LIABILITIES 13,124.96 10,951.22
CURRENT LIABILITIES
Short Term Borrowings 1,799.70 0.00
Trade Payables 4,128.43 3,961.18
Other Current Liabilities 4,754.40 4,642.48
Short Term Provisions 755.04 730.79
25. TOTAL CURRENT LIABILITIES 11,437.57 9,334.45
TOTAL CAPITALAND LIABILITIES 68,533.63 64,378.61
ASSETS
NON-CURRENT ASSETS
TangibleAssets 31,772.04 29,682.92
IntangibleAssets 1,872.94 1,403.17
Capital Work-In-Progress 10,581.89 9,202.46
Other Assets 0.00 0.00
FIXED ASSETS 44,226.87 40,288.55
Non-Current Investments 7,498.47 9,528.17
Deferred Tax Assets [Net] 0.00 0.00
Long Term Loans And Advances 3,101.88 667.76
Other Non-Current Assets 2,592.47 3,586.52
TOTAL NON-CURRENT ASSETS 57,419.69 54,071.00
CURRENT ASSETS
Current Investments 0.00 0.00
Inventories 2,960.08 2,321.91
Trade Receivables 4,546.84 4,060.19
Cash And Cash Equivalents 803.91 1,214.69
Short Term Loans And Advances 1,074.88 828.39
26. OtherCurrentAssets 1,728.23 1,882.43
TOTAL CURRENT ASSETS 11,113.94 10,307.61
TOTALASSETS 68,533.63 64,378.61
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 2,06,242.59 35,372.15
CIF VALUE OF IMPORTS
Raw Materials 0.00 0.00
Stores, Spares And Loose Tools 0.00 0.00
Trade/Other Goods 0.00 0.00
Capital Goods 0.00 0.00
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency 26,485.00 29,868.59
REMITTANCES IN FOREIGN CURRENCIES
FOR DIVIDENDS
Dividend Remittance In Foreign Currency -- --
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods -- --
Other Earnings 13,078.00 14,805.41
BONUS DETAILS
Bonus Equity Share Capital 3,664.49 1,409.42
Downloaded by Vishnu Kant Sharma (vishnukantsharma001@gmail.com)
27. NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market Value 18,479.00 21,380.00
Non-Current Investments Unquoted Book Value 5,946.01 5,256.90
CURRENT INVESTMENTS
Current Investments Quoted Market Value -- --
Current Investments Unquoted Book Value -- --
28. 12 mths 12 mths
INCOME
REVENUE FROM OPERATIONS [GROSS] 71,729.57 74,807.98
Less: Excise/Sevice Tax/Other Levies 5.39 0.46
REVENUE FROM OPERATIONS [NET] 71,724.18 74,807.52
TOTAL OPERATING REVENUES 71,870.96 75,126.30
Other Income 1,416.84 1,544.81
TOTAL REVENUE 73,287.80 76,671.11
EXPENSES
Cost Of Materials Consumed 4,411.97 4,584.26
Operating And Direct Expenses 0.00 0.00
Changes In Inventories Of FG,WIPAnd Stock-
In Trade
-598.62 -382.45
Employee Benefit Expenses 1,519.25 1,778.37
Finance Costs 108.50 138.54
Depreciation And Amortisation Expenses 1,835.99 1,550.22
Other Expenses 4,621.79 4,928.68
TOTAL EXPENSES 65,446.07 67,259.96
PROFIT/LOSS BEFORE EXCEPTIONAL,
EXTRAORDINARYITEMS AND TAX
7,841.73 9,411.15
29. Downloaded by Vishnu Kant Sharma (vishnukantsharma001@gmail.com)
Exceptional Items 101.63 -326.33
PROFIT/LOSS BEFORE TAX 7,943.36 9,084.82
TAX EXPENSES-CONTINUED OPERATIONS
Current Tax 2,077.23 2,464.26
Less: MAT Credit Entitlement 0.00 0.00
Deferred Tax -1,654.81 620.51
Tax For Earlier Years 900.31 -25.62
TOTALTAX EXPENSES 1,322.73 3,059.15
PROFIT/LOSS AFTER TAX AND BEFORE
EXTRAORDINARYITEMS
6,620.63 6,025.67
PROFIT/LOSS FROM CONTINUING
OPERATIONS
6,620.63 6,025.67
PROFIT/LOSS FOR THE PERIOD 6,620.63 6,025.67
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 14.68 26.72
Diluted EPS (Rs.) 14.68 26.72
VALUE OF IMPORTED AND
INDIGENIOUS RAW MATERIALS STORES,
SPARESAND LOOSE TOOLS
Imported Raw Materials 1,788.72 1,221.00
Indigenous Raw Materials 2,623.25 3,363.26
30. STORES, SPARESAND LOOSE TOOLS
Imported Stores And Spares 186.42 158.99
Indigenous Stores And Spares 269.88 289.32
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 3,285.63 1,734.14
Tax On Dividend 656.87 356.46
Equity Dividend Rate (%) 64.00 71.00
31. Computatio
n of 17
Ratios
1)Current Ratio = Current Assets
Current Liabilities
=11113.94/11216.55=0.97
= Quick Assets
Current Liabilities
2)Quick Ratio
=7963.75/11216.55= 0.71
3)Debt To Equity Ratio = Debt / Long Term Debt
Equity / Shareholder’s Funds
=13,124.96/43,971.10=0.30
4)Proprietary Ratio = Shareholders’ Funds / Equity
Total assets
=43,971.10/68,533.63 = 0.64
6)Interest Coverage Ratio = Net Profit Before Interest And Tax.
Long term borrowing
=10428.94/3612.12=2.89
32. 7)Trade Receivable Turnover Ratio
= Credit Revenue From Operation
Average Trade Receivable
=75126.76/4060.19 = 18.50
8)Trade Payable Turnover Ratio
= Net Credit Purchases
Average Trade Payables
=65953.65/4060.19 = 16.24
9)Working Capital Turnover Ratio
= Revenue From Operations
Working Capital
=9223.36/2136 = 4.32 Times
10)Inventory Turnover Ratio
= Cost Of Revenue From Operations
Average Inventory
=46833.20/2321.91 = 20.17
11)Gross Profit Ratio = Gross Profit x100
Revenue From Operations
=922336/13644 = 67.6 %
33. 12)Net Profit Ratio
= Net Profit x100
Revenue From Operations
=602567/13644 = 44.16 %
13)Operating Ratio
= Operating Cost x100
Revenue From Operations
=50238.09/7673.46 = 6.55 %
14)Operating Profit Ratio
= Operating Profit x100
Revenue From Operations
=9555.10/9223.36 = 1.04 %
15)Earning Per Share
= Net Profit After Tax And Preference Dividend
Number Of Equity Shares
=602567/22550.71 = 26.72 Rupees
16)Price Earning Ratio
= Market Value Of Equity Share
Earning Per Share
=93.65/26.72 = 3.50 Times
15)Return On Investment
= Net Profit Before Interest And Tax
Number Of Equity Shares
=898674/6500 = 138.26 %
34. Comparative
Balance Sheet
Comparative balance sheet analyses the assets
and liabilities of business for the current year
and also compares the increase or decrease in
them in relative as well as absolute parameters.
A comparative balance sheet not only provides
the state of assets and liabilities in different time
periods, but it also provides the changes that
have taken place in individual assets and
liabilities over different accounting periods.
The following points should be studied when
analysing a comparative balance sheet
1. The present financial and liquidity position
(study working capital)
2. The financial position of the business in the
long term
3. The profitability of the business
35. Comparative
Balance Sheet
Steps in preparing a comparative balance sheet
The below steps can be followed
1. Determine the absolute value of assets and
liabilities related to the accounting periods.
2. Determine absolute changes in the items of
the balance sheet relative to the accounting
periods in question.
3. Calculate the percentage change in assets
and liabilities by comparing current year values
with values of previous accounting periods.
38. Learning
Outcome &
Conclusion
1)Discipline – I have learned to sit at the same place for
hours with the help of this project. It has helped me to
concentrate better and taught me to remain focused.
2)Knowledge – This project has also provided a
sufficient amount of knowledge to me. It has helped me
discover and learn about things I had never know if it had not
been for this.
3)Independency – I learned that I could do this project
beautifully even though I was alone in this journey.
I would like to conclude this project by stating that consumer
exploitation is not in a particular state or a country, the whole
world is facing this. The consumer must know his/her rights as
well as duties so as to prevent illegal trade practices and
continue with the day to day life without fear of being
cheated/harassed.
Information regarding this topic should be shared worldwide and
awareness should be spread with the help of campaigns.
Consumer is the king and that is how he/she should be treated
because he/she is the one who helps sellers keep their business
alive and meet his needs.
