Professional Documents
Culture Documents
List of figures
List Of Tables
S No Topic Page No
1. Profit & Loss Account.
2. Balance Sheet
3. Cash Flow Statement.
Chapter-1
Profile Of The Company
Asian Paints
TYPE Multinational
FOUNDED 1942
HEADQUARTER Mumbai, India
Tel : 022-39818000
Fax : 022-39818888
Asian Paints Helpline : 1800-209-5678
1.1 Profile/Introduction
1.1.1. In 1st February,1942 ,Armed with little knowledge and great determination,
Sh.Champaklal H. Choksey, Sh. Chimanlal N. Choksi, Sh. Suryakant C. Dani and Sh.
Arvind R. Vakil get together to manufacture paint in a garage on Foras Road,
Bombay. They name their company 'The Asian Oil & Paint Company', a name that they
picked randomly from a telephone directory.
1.1.2.. In 1945 , Asian Paints touches a turnover of Rs. 3,50,000, with an
innovative marketing strategy "to reach consumers in the remotest corners of the
country with small packs."
1.1.3. Asian Paints Ltd. has a combined turnover of 630 million US dollars. With
its strong presence in the Indian subcontinent, south East Asia, Far East, South
pacific Caribbean, Africa & Europe. Along with Asian paints the group consists of
SCIB chemicals, Berger International & APCO coatings. Together the group has 30
manufacturing unit globally.
1.1.5. The company was incorporated in the year 1942 in India. Asian paints have
extensively computerized its operations in India using the cutting edge solution
provided by SAP & i2. It helped the company drive benefits of faster market
analysis for better decision making.
1.1.6 The Company's paint business in India consists of Decorative, Industrial &
Automotive coatings. During the fiscal year ended March 31, 2006, paints accounted
for 79.1% of the Company's sales. Decorative paints include wall finishes for
interior and exterior use, enamels, wood finishes and ancillary products, such as
primers and putties. Industrial Coatings comprise high performance coatings,
powder coatings and auto refinish coatings. The automotive coating segments are
catered to by the joint venture Asian PPG Industries Ltd. The Company also has
chemicals businesses consisting of phthalic anhydride and pentaerythritol
manufactured at Ankleshwar, Gujarat and Cuddalore, Tamil Nadu, respectively.
1.1.7. Asian paints’ wonderful promotional strategy helped the company to extend
its business in several other countries with success. A very attractive
distribution policies & proper distribution channel with more than 15000 dealers
helped Asian paints to spread its business in more than 3500 big & small cities in
India.
1.1.8. The Group's principal activities are to manufacture and market paints. The
Group also manufactures Phthalic Anhydride and Pentaerythritol. The Group operates
in Australia, Fiji, Solomon Islands, Tonga, Vanuatu, Myanmar, China, Thailand,
Malaysia, Singapore, Bangladesh, Nepal, Srilanka, Bahrain, the UAE, Oman,
Barbados, Jamaica, Trinidad, Tobago, Egypt, Mauritius and Malta
1.2 Vision And Mission
1.2.1. VISION
Asian Paints aims to become one of the top five Decorative coatings companies
world-wide by leveraging its expertise in the higher growth emerging markets.
Simultaneously, the company intends to build long term value in the Industrial
coatings business through alliances with established global partners.
1.2.3. VALUES:
Even though we frequently talk about mission and vision first, the basic
underlying
foundations for both are our core values. Core values are the principles and
standards
at the very center of our character, and from which we will not budge or stray.
Core values are extremely stable and change only very slowly over long periods of
time. Core values form the basis for our beliefs about life, ourselves and those
around
us, and the human potential of ourselves and others. Values and beliefs form our
attitudes and guide our behavior. The behaviors we engage in are what people
around us see, along with our skills and actions. Our outer or public shell of
behaviors
and skills can change rapidly and dramatically through our lives, influenced by
our
environment and guided by our more stable core values and beliefs.
Keeping in mind the values of oneself and believing in them, mother dairy focuses
to:
• Be aligned with the core values of both the individuals and the business
Along with the above mentioned views , asian paints also looks after the
following
aspects:
• Trust
• Openness
• Commitment
• Integrity
• Growth Orientation
• Quality
• Customer Orientation
Ancillaries
Automotive
The actual look and feel of a vehicle undergoes a sea of change over time. The
paint on a vehicle loses gloss, is subjected to a lot of wear and tear and hence
starts deteriorating. Asian Paints is not having a very good market share in this
segment.
2K Nexa Auto color
Our Mission
• The same set of hardeners and thinners can be used for all the tintable
shades on offer.
• The clearcoats offer exceptionally high levels of gloss and mar-resistance.
This ensures that the cars finished in Deltron retain their superior finish even
years after they have been painted
Delfleet
Bilux
Aspa
Old is Gold - This popular adage best describes AsianPPG's oldest brand in the
automotive paints category which was integrated from Asian Paints. Since its
launch in 1973, Aspa (an Alkyd based product) won the hearts of all its patrons
and continues to remain the market leader.
With a network of over 1300 direct dealers spread across the country, its
consumers vouch for its quality. This brand offers variety of hues i.e. 45 shades
in metallics and 85 in solids.
With technological advancement, Aspa is now available on the mixing rack. The
dealers are therefore able to generate over 80 different shades by combining
various base and tinters.
The distinctive attributes of Aspa are :
• Unmatched coverage
• Quick drying
• High gloss level
• Good Distinctiveness of Image(DOI) feature giving mirror like finish
DECORATIVE PAINTS
Major segments in decoratives include exterior wall paints, interior wall paints,
wood finishes and enamel and ancillary products such as primers, putties etc.
Decorative paints account for over 75% of the overall paint market in India. Asian
Paints is the market leader in this segment. Demand for decorative paints arises
from household painting, architectural and other display purposes. Demand in the
festive season (September-December) is significant, as compared to other periods.
This segment is price sensitive and is a higher margin business as compared to
industrial segment.
Exterior Walls
Interior Walls
Metal Surface
Product Name: Asian Paints Luxury Ultra Gloss Enamel
Description:Luxury Ultra Gloss Enamel is an enamel with far superior performance
parameters than conventional enamels. Luxury Ultra Gloss Enamel offers Superior
Gloss, superi anti yellowing properties and a Unique formulation with anti fungal
properties.This product is currently available in only Sparkling White.
Cost Range: Premium
Finish: High Gloss
Availability: Available in select markets
Wood Surface
INDUSTRIAL
PROTECTIVE COATING
Floor Coatings
Concrete floors represent a significant investment for any industry. Despite this,
it is often the most neglected and abused part of the structure. Apart from the
mechanical abuse, spillages of various kinds of chemicals also occur often
weakening the reinforcement and concrete surface. The need to protect the surface
with a suitable coating is quite obviously there.
An increasing awareness of the limitations/drawbacks of concrete flooring is now
resulting in wider acceptance of floor coatings. Limitations include the
accumulation of dust due to the formation of laitance and difficulty encountered
during cleaning owing to surface texture. Furthermore, the presence of cracks and
surface porosity allows various oils to seep in, resulting in unappealing patches.
Weakening of the reinforcement and concrete surface due to chemical spillage and
the possibilities of microbial growth are other significant drawbacks.
Apart from these, concrete floors are aesthetically unappealing making the
workplace dull.
The APCOFLOR coatings are hard wearing, abrasion resistant coatings available in
wide range of attractive colours. They have excellent mechanical properties and
provide floors that are tough and long lasting. They, apart from protecting the
concrete surface, help tide over the limitations without affecting the intrinsic
strength of concrete floor.
Road Markings
Road markings are the silent custodians of road safety in this era of four and six
lane highways. Markings signify the delineation of traffic path and the lateral
clearance from traffic hazard for the safe, smooth and orderly movement of
traffic. Apart from traffic guidance, they also serve as a tool for controlling,
warning and providing information to road users.
Though the cost of road markings is fractional in comparison to the cost of the
road, its importance is indisputable. Often a key parameter used to judge the road
quality is the quality of the installed road marking.
Asian paints commands market leadership in the field of thermoplastic road
markings.
Asian Paints offers a variety of road markings. These include hot applied
retroreflective thermoplastic material, fast drying highly durable 100% acrylic
retro-reflective water borne paints and conventional water / solvent based road
marking paints.
APCOTRAK range of coatings includes coatings such as water based road marking
paints conforming to IS-164, 1981 (Amended 1993) - Specification for ready mixed
paint for road marking, ordinary water based road marking paint and the 3rd
generation road markings: APCOTRAK WBR, fast drying highly durable 100% acrylic
retro-reflective water borne paints. These represent a generational shift in
markings. They are safer to handle as heating is not required. Do not soften on
environmental heat and hence dirt pickup is eliminated. They take less time for
application as can be sprayed by Air / Airless spray machines leading to lower
disruption in traffic movements, provide very high retroreflectivity, very ideal
for edge lines on highways and apron / taxiways at airports.
APCOMARK range of markings includes hot applied retroreflective thermoplastic road
markings conforming to clause 803.4, "Specifications for Road and Bridge Works" of
Ministry of Road Transport & Highways. APCOMARK has been widely used in the famed
Golden Quadrilateral and NSEW project of NHAI and on various national and state
highway projects across the country.
THERMOLINE range of markings include hot applied retroreflective thermoplastic
road markings conforming to BS 3262 specifications
Asian Paints also offers Type 2 Retro-reflective Drop-On Glass Beads conforming to
BS 6088 specification.
1.4. Size of Organisation
Manpower
Asian Paints believes that people are its strongest assets, for a company can go
only as high as its people aim. It is people who innovate and invent, and who
engineer the efficiencies that make a business succeed. It is they who drive
growth and lead to greater heights. At Asian Paints, our human resources systems
are designed to create a focused, performance oriented and agile company. A talent
pool of over 4700 employees employed across 23 countries bring in a unique blend
of mindsets and skills.
An open and interactive work culture brings out the best in our people. A sense of
ownership and freedom to experiment at their workplace brings out creativity and
innovation in every individual. Excellent training is provided to develop leaders
and re-strengthen competencies from within the organisation. Besides encouraging
achievers from within the organisation, we absorb the best talent from some of the
best management and technology institutes in the country.
Turnover
Asian Paints’s turnover has been growing at the rate of 11.85% (CAGR) over the
last 3 years and is expected to exceed Rs. 112 billion to 156.7 billion by end of
2010. Asian Paints is India's largest paint company and the third largest paint
company in Asia today, with a turnover of Rs 36.7 billion (around USD 851
million).The Indian Paint Industry growing at 1.5 times the GDP growth. Assuming
thecountry GDP grows @7.5% p.a, the Indian paint industry is expected to grow ata
CAGR of 11.85% from Rs. 112 bn. in FY07 to Rs. 156.7 bn in FY10E.In order to cater
the incremental demand of the domestic paint industry, totalcapacity addition
coming upstream in over the period of two year i.e. from FY08Eto FY10E is around
255450 tonne. Out of this incremental supply around 82%will be contributed from
APL resulting in increase in market share from 37% inFY07 to 42% in FY10E.APL’s
dominance in paint industry and presence across all segments will enableit to
maintain the margins going forward.
Valuations
We expect the company to register a 3-year EPS CAGR of 28.2% from 29.3 in FY07(Rs.
mn) to 61.7 FY10E. At CMP of Rs. 1200.0 the stock is trading at 25.0x FY09E &
19.5x FY10E earnings per share. We initiate coverage on Asian Paints Ltd with a
BUY recommendation and price-objective of Rs.1419 (implying a forward P/E multiple
(Rs. mn) of 23x) on account of robust domestic demand for decorative paints.
1.6.2. Asian paint is following unlque strategy of marketing in the rural areas
by using their official mascot. According to the company it feels that picture are
more dominant than name.
• Asian paint website Asian paints com provides several information regarding
the product and various other information that is being required by customer and
dealer.
• Asian paint is now targeting to provide paint solution with insurance.
1.7.2. Asian Paints Limited (APL) incorporated in 1942 ranks among the top ten
decorative
paint companies in the world. It has presence in decorative and industrial coating
segment of the paint business. Besides, the Company operates around the world
through its subsidiaries Berger International Limited, Apco Coatings
and SCIB
Chemicals. APL has its presence in almost all the segment through its brands
Royale
in the premium segment, Apcolite in the mid-segment, Gattu, Tractor, Utsav and 3-
Mango etc. in the lower segment.
1.7.3 The Board of Directors recommended the payment of final dividend of Rs. 11
per share (110 %). An interim dividend of Rs. 6.50 per share (65%) was distributed
in Nov’08 Thus total dividend announced for financial year 2008-09 will be Rs
17.50 per share (175%). The total dividend distributed in FY2008 was Rs. 17 per
share (170%).
1.7.4 APIL is primarily engaged in the manufacture and sale of decorative paints.
In addition, the company is integrated backwards for manufacture of two major
intermediate chemicals - Phthalic anhydride and Pentaerythritol. During 2001-02,
APIL has acquired the powder coatings business from Hawcoplast Chemicals, with the
objective to establish itself in the fast growing powder coating segment. The
company also has an international presence through its subsidiaries in Sri Lanka,
Australia, Fiji, Middle East, Mauritius and Nepal. APIL, through its 50:50 joint
venture (Asian PPG Industries Ltd) with PPG Industries Inc USA, also operates in
the automotive paints segment
1.7.5 The market size of the Indian paints sector has been pegged at Rs 134 bn in
value terms and is very fragmented. While in value terms, the industry grew by 18%
in FY08, in volume terms, the growth stood at 15% YoY. The current demand is
estimated to be around 650,000 tonnes per annum and is seasonal in nature. The per
capita consumption of paints in India stands at 0.5 kg per annum as compared to
1.6 kgs in China and 22 kgs in the developed economies. India's share in the world
paint market is just 0.6%.
The unorganised sector controls around 35% of the paint market, with the organised
sector accounting for the balance. In the unorganised segment, there are about
2,000 units having small and medium sized paints manufacturing plants. Top
organised players include Asian Paints (30% market share), Kansai Nerolac (20%
market share), Berger Paints (19% market share) and ICI (12% market share
1.8. Present Leadership
P M Murthy – CEO
P M Murthy – Managing Director
Mr. Ashwin Choksi – Non-Executive Chairman
Mr. Ashwin Dani – Non-Executive Vice Chairman
1.10.3 Online marketing for urban customer: Asian paint online marketing system is
helping company in lot of ways many customers all the necessary information to the
customer. It is an unique way of promotion.
Asian paint had established 30 colur world through out the country giving the
people real taste of colour. The punchline for the colour world is “Jahan Milen
world ke saare colour”
Asian paint has large area of Network of distribution. It has almost retail
outlets through out the country situated in the different city of India. All the
customer could easily access the product of Asian paint anywhere and any time.
Berger Paints :
Berger paints is considered as the dark horse of paint industry. While company’s
main strength is in decorative sector, it has been actively pushing its presence
in the industrial paint segment. To improve its business the company have some
strategy :
i) Company is mainly spreaded in Eastern & Southern part of the company, now it
is looking for a rapid expansion at the western region also.
ii) Recognizing the saturation of the urban market, Berger is targeting the
rural market.
iii) They are looking to export in nearby countries such as Bangladesh, Bhutan,
Nepal to boost its revenue.
iv) Within the paint industry, Industrial paint segment has a higher growth
rate. Keeping this in mind company has targeted a 15% share of Industrial paints
in the company’s product mix.
v) Berger’s performance in Automotive sector over the lst few years has been
fairly. Here also they are targeting to build up some tie-up with automobile
companies.
vi) Berger had ticups with Nippon paints of Japan & orica of Australia. Here
they would like to go for the branding of products through proper advertisement
compaign & with their new logo.
vii) An establishment of new plant in Russia was done in 2005, which is expected
to start production by the end of 2006. company is likely to utilize the Russian
plant to cater to the markets of CIS countries in the future.
ICI Paints :
Within 3 years of launch of colour future from ICI it proved to define the
International interior designing trend. The company has invested a million dollars
in the R&D of the colour futures concept. Which helps to forecast the
international colour trends in paints. Though ICI is considered as the 4th paint
against in India, but its presence & development can be a threat to the others.
CHAPTER-2
SWOT Analysis of the Company
SWOT ANALYSIS OF ASIAN PAINTS
SWOT analysis is a basic, straightforward model that provides direction and serves
as a
basis for the development of marketing plans. It accomplishes this by assessing an
SWOT analysis is done for a company, to find out its overall Strengths,
Weaknesses,
The SWOT Analysis enables a company to recognize its market standing and adopt
2.1. Strengths:
1. Market leaders with 35% market share in the organized sector, the closest
competitor does not have even half of AP’s share;
6. A network of 13,000 dealers spread all over the country. The nearest
competitor has less than 8,000. For this, they have large network of regional
offices and company depots and sales personnel to service the nationwide dealer
network;
11. Leader in profit and operating margins, ROI of AP is 40% while ROI of the
rest of the industry is 22%, Net worth of Rs 204 crores against Rs 58 crores of
Goodlass Nerolac and Rs 41 crores of Berger.
12. High caliber human resource, employs maximum number of MBAs, as a proportion
to total number of employees;
13. Corporate reputation has been a major strength for AP. The image is that of
a successful and well-managed company. They have won many accolades and awards.
For example, 1995 Corporate Excellence Award from HBSA and ET, IDBI study rated AP
as one of India’s most excellent companies, another study rated AP among top 5
paint manufacturers in the world. They have an enviable track record in breaking
the position of MNCs in the Indian paint industry.
2.2. Weaknesses:
1. In industrial paints, AP has only a 15% market share. It is far behind the
leader Goodlass Nerolac, which has a market share of 43%. Since this is going to
be the major growth segment in the future, a lag in this segment will end up as a
major weakness;
4. AP has a major weakness on the technology front in industrial paints. Most
paint firms have technology tie-ups with manufacturers abroad. For example,
Goodlass Nerolac has a tie-up with Kansai paints, which has provided the company
with Cathodic Electro Deposition (CED) technology. Since Kansai is the supplier to
Suzuki, Japan, Goodlass with its Kansai connection finds it easy to tap Maruti in
India. AP has not been able to make any significant advances either with Maruti or
the auto segment in general. Berger has a technical tie up wuth Herbets, Germany,
for automotive paints, Valspar Corp, USA for heavy-duty coatings and Teodur NV,
Holland for powder coatings;
6. Seasonal demand and hence in off seasons it can lead to cash flow problems;
2.3. Opportunities:
3. AP has always encashed on opportunities that have come its way. It has
maintained a product profile keeping the market trends in picture. It shifted to a
predominance in industrial paints than industrial paints than in decorative paints
as was evident from the production figures of 1995-96;
4. The automobile industry accounted for 50% of the industrial paint market.
2.4. Threats:
2. Since both Goodlass Nerolac (43%) and Berger’s (14%) have a higher market
share than AP’s (14%), it is possible that in the future, they may capture the
entire industrial paint market;
3. Competitors have gone in for hi-tech with instacolour spot mixing. For
example, J&N’s instacolour offers 626 shades;
4. Automated paint blending in retail points already there. ICI’s Touch Colour
and Berger’s Colour Bank are indicative of this;
The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far
weaknesses and threats are transitory. Any investment idea can do well only when
innovative approach (in product lines and marketing) and values (of
quality/ethics).
Benjamin Franklin discovered electricity, but it was the man who
CHAPTER-3
ANALYSIS OF FINANCIAL STATEMENTS
Balance Sheet
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sources of funds
Owner's fund
Equity share capital 95.92 95.92 95.92 95.92 95.92
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 998.55 832.58 648.16 526.36 476.30
Loan funds
Secured loans 24.59 36.70 66.90 31.88 28.37
Unsecured loans 40.70 40.70 40.70 40.70 36.68
Total 1,159.76 1,005.90 851.68 694.86 637.27
Uses of funds
Fixed assets
Gross block 1,116.93 937.89 806.20 736.14 712.70
Less : revaluation reserve - - - - -
Less : accumulated depreciation 494.02 509.06 471.29 435.71
401.47
Net block 622.91 428.83 334.91 300.43 311.23
Capital work-in-progress 164.64 136.25 16.31 5.87 12.53
Investments 234.77 422.88 334.39 274.55 258.43
Net current assets
Current assets, loans & advances 1,172.36 1,035.22 869.21 686.15
597.47
Less : current liabilities & provisions 1,034.92 1,017.28 703.15 596.40
542.38
Total net current assets 137.44 17.94 166.06 89.75 55.08
Miscellaneous expenses not written - - - 24.26 -
Total 1,159.76 1,005.90 851.68 694.86 637.27
Notes:
Book value of unquoted investments 157.39 345.50 257.01 197.17
163.91
Market value of quoted investments 178.76 254.26 183.02 158.25
92.50
Contingent liabilities 356.87 222.05 180.22 187.26 148.83
Number of equity sharesoutstanding (Lacs) 959.20 959.20 959.20
959.20 959.20
Profit and loss Account
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Income:
Operating income 4,510.12 3,595.53 2,953.38 2,447.78 2,052.28
Expenses
Material consumed 2,640.48 1,969.47 1,661.78 1,365.30 1,125.40
Manufacturing expenses 86.23 75.12 64.82 53.05 49.34
Personnel expenses 239.77 195.54 155.60 129.43 118.35
Selling expenses 779.34 646.58 508.88 423.76 352.83
Adminstrative expenses 170.37 139.33 126.00 110.20 101.62
Expenses capitalised - - - - -
Cost of sales 3,916.19 3,026.04 2,517.09 2,081.74 1,747.55
Operating profit 593.93 569.49 436.29 366.04 304.73
Other recurring income 35.63 50.93 32.32 25.12 21.50
Adjusted PBDIT 629.56 620.42 468.61 391.16 326.23
Financial expenses 15.91 13.46 15.34 8.16 6.58
Depreciation 57.15 43.77 45.42 45.53 47.61
Other write offs - - - - 2.29
Adjusted PBT 556.50 563.19 407.86 337.47 269.76
Tax charges 185.97 186.66 139.99 117.08 96.98
Adjusted PAT 370.53 376.53 267.86 220.39 172.77
Non recurring items -11.77 1.36 2.06 -34.52 1.04
Other non cash adjustments 3.60 -2.69 2.12 0.91 -0.33
Reported net profit 362.36 375.20 272.05 186.78 173.48
Earnigs before appropriation 562.36 525.20 382.05 286.78 255.48
Equity dividend 167.86 163.06 124.70 119.90 91.13
Preference dividend - - - - -
Dividend tax 28.53 27.72 17.77 16.82 12.54
Retained earnings 365.97 334.42 239.58 150.06 151.82
CASH FLOW
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Profit before tax 547.88 564.55 409.92 304.89 270.80
Net cashflow-operating activity 325.21 457.29 312.25 218.69
156.45
Net cash used in investing activity -16.69 -331.91 -110.92 -105.97
-73.08
Netcash used in fin. activity -221.61 -126.52 -187.23 -110.06 -82.19
Net inc/dec in cash and equivlnt 86.91 -1.14 14.11 2.66 1.18
Cash and equivalnt begin of year 41.35 42.49 28.39 25.73 24.55
Cash and equivalnt end of year 128.26 41.35 42.49 28.39 25.73
Ratio Analysis
1. Liquidity Ratios
08 07
Comments
1. Current ratio of the company is 1.24 in 2007 and it has decreased to 1.02 in
2008 which indicates good investment policies of the management and good inventory
control. A current ratio of 2 is normally considered satisfactory. In other words,
a low ratio indicates that the company may not be able to meet its current
liabilities on time and inadequate working capital.
2. Quick ratio of the company is 0.59 in 2007 and it has increased to 0.47 in
2008 which indicates there is not overstocking by the management of the
organization.
2. Leverage Ratios
08 07
Comments
1. Long term debt ratio expresses a relationship between debt and the equity.
The company has a debt equity ratio of 0.07 in 2007 and it decreases to 0.06 in
2008 which indicates that the utilization and management of resources is has
decreased as in the previous year.
2. The company has total debt equity ratio of 0.14 in 2007 and decreased to
0.08 in 2008 which means that company’s shareholders funds has increased but
total long term debts remain unchanged. In other words, it indicates that the
company’s shares have not been favored by investors.
3. Fixed assets turnover ratio indicates a relationship between net sales and
net fixed assets. The company had a fixed asset turnover ratio of 3.81 in 2007 and
it increased to 3.97 in 2008 which indicates efficient utilization of fixed assets
by the company.
3. Profitability Ratios
08 07
• Operating Ratio 15.83 14.77
• Gross Profit Ratio 14.62
13.23
• Net Profit Ratio 10.28 9.11
• Return On Long Term
Funds 58.11
52.70
2. The Gross Profit Ratio establishes relationship of gross profit to net sales
of a company. The company had a ratio of 13.23 in 2007 and it increased to 14.62
in 2008 which indicates that there has been adequate coverage of administrative
and marketing expenses.
3. Net Profit Ratio establishes the relationship between net profit and sales.
The company had a ratio of 9.11 in 2007 and it decreased to 10.28 in 2008
which means the company’s efficiency has increased because higher the net profit
ratio better the business.