LIST OF CONTENTS

Chapter No
List Of Tables List Of figures.

Title

Page no

1.
General Company Profile Industry Profile

Introduction

2.
2.1 2.2 2.3 2.4 2.5 2.6 2.7

Research Methodology
Statement of Objectives Need of the Study Scope of the Study Period of the Study Tools applied in the Study Methodology Limitations of Study

3.
3.1 3.2 3.3 3.4 3.5

Data Analysis And Interpretation
working Capital Ratio’s statement Changes In Working Capital Operating Cycle Liquidity Ranking Analysis of Current Assets And Current Liabilities

4. 5.

Findings And Suggestions Bibliography

1

CHAPTER-1 1.1 INTRODUCTION 1.2 INDUSTRY PROFILE 1.3. COMPANY PROFILE
1.3.1. CORPORATE GOAL :1.3.2. CORPORATE POLICY :1.3.3. SELLING POLICY:1.3.4.PRODUCT LINE:1.3.5.1. AWARDS RECEIVED: 1.3.5.2. ENVIRONMENTAL PROGRAMMES:1.3.5.3. SOCIAL PROGRAMMES:1.3.5.4. PLANS:-

1.3.6. GROUP OF COMPANIES
1.3.7. PRODUCTS:-

1.3.12. BUSINESS PROFILE
Name , Affiliated to ,Regd.Office & Factory, Commencement of Production Line of Activity-Manufacturing of……………………, Man Power ,Factory Staff:Paid up Capital Net Worth Turn Over Auditors Bankers

2

I have undertaken this study and it would be a great advantage to the company also. STATEMENT OF OBJECTIVES: Primary objective Secondary objective 2. Primary data Primary data has been collected through personal interviews with finance department and the executive Secondary data Secondary data collected from the records like B/S.1. The data collected from both primary and secondary data. The information from annual reports is insufficient to calculate few ratios.CHAPTER-2 RESEARCH METHODOLOGY 2. PERIOD OF THE STUDY:3 . SCOPE OF THE STUDY: The scope of the study is confined to the analysis of solvency & profitability position of the company.3. to know it’s working capital position. NEED OF THE STUDY:  Working capital management plays a vital role in any organization and one should have a thorough knowledge about the working capital position. Limited time does not allowed to do more analysis. This is set back while drawing the conclusion. The study is based on 5 annual financial reports only. 2.  In view of this context.2. 2.4.     Disclosed fully. income statement and necessary records.

 Finally Analysis of current assets and current liabilities. 2. LIMITATAIONS OF THE STUDY:1.The period of the study was four months from January to April 2008.7. It includes data collection analysis of data and interpretation. 2. from and to achieve those objective the following 4 .  Thirdly to estimate the working capital requirement of the company by using Operating cycle.  Firstly to find out liquidity and solvency position of the company through working capital ratios.5. . 2. METHODOLOGY:The objective of the study is to analyze the working capital position of the company for the past five years from methodology was adopted. During the period all the required data was collected through secondary sources and analyzed with the help of financial tools of analysis.6.  Secondly to study the Liquidity position of the company by using liquidity ranking method. Financial statement of prepare on the basis of certain accounting concepts in conventions any change in methods are procedures of accounting will limit the utility of financial statements. TOOLS APPLIED IN THE STUDY: Working capital ratios  Liquidity ranking  Operating cycle  Analysis of current assets and current liabilities. The analysis was confined to a period of five years during 2.

5 .CHAPTER-3 DATA ANALYSIS AND INTERPRETATION DEFNITION OF WORKING CAPITAL CONCEPTS OF WORKING CAPITAL 1. The firm has to invest enough funds in current assets for the success of sales activity current assets are needed because sales don’t convert into cash instantaneously there is always an operating cycle involved in the conversion of sales into cash. In its endeavor to maximize shareholder’s wealth a firm should earn sufficient return from its operation earning a steady amount of profits required successfully sales activity. GROSS WORKING CAPITAL 2. NET WORKING CAPITAL PROPRIETORS FUNDS CASH CASH FROM DEBTORS CREDITORS DEBTORS NEED FOR WORKING CAPITAL Business firms aim at maximizing the wealth of shareholders.

CHANGE IN PRICE: 4. PROFIT LEVEL:7. MARKET CONDITIONS:9. . TECHNOLOGICAL CHANGES:. NATURE OF BUSINESS: 2. fluctuating or variable working capital. Any amount over and above the permanent level of working capital is temporary.CHANGES IN WORKING CAPITAL 1. CHANGES IN SALES AND OPERATING EXPENSES:2. FACTORS INFLUENCE IN WORKING CAPITAL REQUIREMENT 1. This is portion of the required working capital is needed to meet fluctuating in demand consequent upon changes in production and sales as a result of seasonal changes PERMANENT AND TEMPORARY WORKING CAPITAL Both kinds of working capital are necessary to facilitate the sale process through the operating cycle. FORM OF OPERATIONS: 3. CONDITIONS OF SUPPLY:- 6 . Temporary working capital is created to meet liquidity requirements that are purely transient in nature. LEVEL OF PRODUCTION:6. PRODUCTION POLICY: 8. POLICY CHANGES:3. This requirement is referred to as permanent of fixed working capital. CREDIT POLICY: 5.Level of working capital is necessary on a continuous and uninterrupted basis.

10. FUNDS FLOW STATEMENT CONCEPT OF FUND USES AND SIGNIFICANCE OF THE FUND FLOW STATEMENT 7 . PERMANENT AND TEMPORARY WORKING CAPITAL PROBLEMS OF WORKING CAPITAL MANAGEMENT THE DANGERS OF EXCESSIVE WORKING CAPITAL INADEQUATE WORKING CAPITAL ROLE OF FINANCIAL MANAGER IN WORKING CAPITAL MANAGEMENT: 1. 4. SALES GROWTH:. Working capital management requires much of the finance management time as it represent larger position of investment in assets. 5. Action should be taken to curtail unnecessary investment in current assets. Working capital management requires must of the finance manager time as it represent a large position of investment is assets 2. 3. The financial manager should pay special attention to the management of Current assets on continuing basis. 6. All precaution should be taken for the effective and efficient management of working capital. Larger firms have to manage their current assets and current liabilities very carefully and should see that the work should be done properly in order to achieve predetermined organizational goals.

8 . FACTS OF CASH MANAGEMENT MANAGING THE CASH FLOWS: OPTIMUM CASH LEVEL:INVESTING SURPLUS CASH:- RECEIVABLES MANAGEMANT COLLECTIONS POLICIES CALCULATION AND INTERPRETATION 3.1 CURRENT RATIO: CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES For the calculation this ratio • • Current assets include inventories. PRECAUTIONERY MOTIVE:3. SPECULATIVE MOTIVE:. cash and bank balances and loans & advances Current liabilities include Current liabilities and provisions. TRANSACTIVE MOTIVE 2.OBJECTIVES OF FUNDS FLOW ANALYSIS CASH MANAGEMENT:CASH MANAGEMENT STRATEGIES:MOTIVE OF HOLDING CASH 1. sundry debtors.

The standard ratio 1:1 is considered ideal ratio for a concern. Hence only absolute liquid assets such as Cash in hand. Cash at bank. INTERNAL MEASURE:Yet another ratio. Cash and Bank balance and Loan & Advances. which assets a firm’s ability to meet its regular cash expenses.4. Current liabilities include Current Liabilities and Provisions.2. The daily operating expenses will be equal to cost of goods sold plus selling administrative and general expenses less depreciation divided by number of days in the year. This ratio also called absolute Liquid Ratio. 3. Liquid assets are those.3. 3.5. This ratio can be calculated by using the formula: LIQUID RATIO = LIQUID ASSETS / CURRENT LIABILITIES For the calculation of this ratio A liquid asset of quick asset includes Sundry Debtors. CASH RATIO:Generally receivables are more liquid the inventories. but there may be dough regarding their reliability in time. the internal measure relates liquid assets to average daily operating cash out flows. This ratio is shown as :CASH RATIO = ABSOLUTE LIQUID ASSETS / CURRENT LIABITIES 3. INTERNAL MEASURE = CURRENT ASSETS – INVENTORY / AVERAGE DAILY OPERATING EXPENCES. NET WORKING CAPITAL RATIO:- 9 . QUICK RATIO (OR) ACID TEST RATIO: This is the ratio of liquid assets to current liabilities. Is shows a firm’s ability to meet current liabilities with its most liquid or quick assets. Marketable Securities are ideal taken into consideration 1:2 is considered as ideal ratio.3. which can be easily converted in to cash within a short period of time without loss of value.

Net Working Capital how ever. 3. it is calculated to know whether the creditors are secured or unsecured. a low stock turnover ratio is not desirable because it reveals the accumulation of obsolete stock. Net Working Capital in sometimes used as a measure of a firm’s liquidity.CLOSING STOCK AVERAGE STOCK = OPENING STOCK + CLOSING STOCK /2 SIGNIFICANCE 10 . or the carrying of too much stock. rather than the difference between Current Assets and Current Liabilities. establishes relationship between cost of goods sold during a given period and the average amount of inventory held during that period.The difference between current assets and current liabilities including short term bank borrowing is called Net Working Capital or Net Current Assets. between two firms. In other words. in respect of their periodical interest income it is also called as ‘Debt Secure Ratio’ or fixed charges cover. the one having the larger Net Working Capital has the greater the ability to meet its current obligation. measure the firm’s potential reservoir of funds. Higher the ratio the better it is because it shows that finished stock rapidly turned over. This ratio is calculated as follows: INVENTORY TURNOVER= COST OF GOODS SOLD / AVERAGE STOCK For the calculation of this ratio • COST OF GOODS COLD = OPENING STOCK + PURCHASES + MANUFACTURING EXPENSES . INTEREST COVERAGE RATIO = NET PROFIT BEFORE INCOME TAX / INTEREST CHARGES. On the other hand. NET WORKING CAPITAL = NET WORKING CAPITAL / NET ASSETS. INVENTORY TURNOVER RATIO: This ratio. This is not necessarily so the measure of liquidity is a relationship. It is considered that. 3. This ratio reveals the number of items finished stock is turned over during a given accounting period. It can be related to net assets. also known as Stock Turnover Ratio.7.6. INTEREST COVERAGE RATIO:This ratio indicates whether the earnings of a firm are sufficient to pay interest charges periodically or not.

To a great extent. the higher the value of debtor’s turnover.O Ratio indicators more efficient collection of debtors and signifies the more liquidity of debts and lower D.If this ratio is high. on an average the debtors or receivables turnover each year. Generally. DEBTORS TURNOVER RATIO: When a firm sells goods on credit. the amount and quality of debtors determine the liquidity position of the firm. opening balance and closing balance of debtors may not be available.9. data relating to credit sales.T. it indicates the efficient of management in converting stock into cash quickly. DEBTORS TURNOVER RATIO = CREDIT SALES / AVERAGE DEBTORS (OR) AVERAGE TRADE DEBTORS = TOTAL SALES / CLOSING DEBTORS (OR) AVERAGE TRADE DEBTORS = (OPENING TRADE DEBTORS + BILLS PAYABLE) + (CLOSING TRADE DEBTORS + BILLS RECIEVABLES) / 2 SIGNIFICANCE:Higher D.O Ratio. book debts are created. Sometimes. the more efficiency is the management of assets. sound liquidity position and liquidity of goods maintained 3. This ratio indicates the number of times.T. 3.8. Debtor’s Turnover Receivables Turnover is calculated by dividing credit sales by average debtors. Debtors are expected to be converted into cash over a short period. COLLECTION PERIOD:The average number of days for which Debtors remain outstanding is called the average collection period and can be computed as follows. Then the debtor’s turnover can be calculated by dividing total sales by closing balance of debtors. AVERAGE COLLECTION PERIOD = DEBTORS / SALES * 360 11 . indicates more inefficient collection of debts and signifies less liquidity of debts.

NET ASSETS TURN OVER RATIO:The firm can compute net assets turnover simply by dividing sales by net assets NET ASSETS TURNOVER = SALES / NET ASSETS It may be recalled that net assets (or) net fixed assets and net current i.EQUITY SHARE CAPITAL + PREFERANCE SHARE CAPITAL + ACCUMULATED.10. 3. current assets equal capital liabilities.O.3.12. 3. RETURN ON EQUITY:This ratio is also known as “Net Worth” ratio or “Return on Share Holders Funds”.E is very significant in measuring the overall profitability or operational efficiency of a company. It enables the management to know whether the basic objective of the business maximization of profits is achieved or not and the shareholders to decide 12 . This ratio is shown as.11. SIGNIFICANCE:This ratio is very significant for the manufacturing concerns. net assets turnover may also be called capital employed turnover. It is expressed as ROE = NET PROFIT (after tax) / SHAREHOLDERS FUND * 100 SHAREHILDERS: .PROFITS – ACCUMULATED LOSES SIGNIFICANCE:R. FIXED ASSETS TURN OVER RATIO = COST OF GOODS SOLD (OR) SALES / NET FIXED ASSETS. ROE established relationship between Net Profit after Tax and Share Holders Funds. Since net assets equal to net capital employed.e. FIXED ASSETS TURNOVER RATIO:Fixed Assets turn over ratio is calculated to measure the adequacy or otherwise of shown as Investment in Fixed Assets. High ratio indicates efficiency in work performance where as low ratio means inadequate investment in fixed assets.

On the other hand. it indicates that there is not much contribution of Current Assets in generating of sales. It is expressed as Current ratio = {current assets / current liabilities} Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Current assets (Rs) Current liabilities(Rs) Ratio 2.1. Sundry Debtors.1.06 3. It is calculated by dividing the Net Sales value by the Current Assets Value. 3. Cash & Bank Balance and Loans & Advances. CURRENT RATIO: Current ratio is the relation ship between current assets and current liabilities.67 3.whether their investment is safe and remunerative of a company can also be measured by means of a trend ratios calculated for several number of years.81 4. • Current Assets included inventories. CURRENT ASSETS TURNOVER RATIO: This ratio measures the contribution of current assets to sales generation. CURRENT ASSETS TURNOVER RATIO = NET SALES / CURRENT ASSETS For the calculation of this ratio • Net Sales included all Sales during the particular year. it indicates that there is more contribution of Current Assets in generating sales.60 3. If we get higher ratio. if we get lower ratio.54 13 .

company has more that 2 rupees to pay for it for all years of study the current ratio is more than the standard ratio of 2:1 3.06 3.60.54 years INTERPRETATION:During 2002-2007.29 2. 3.2.06 3. Quick ratio is also means Liquid ratio or Acid test ratio.81 4.Current Ratio 5 4 Ratio 3 2 1 0 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2.68 14 . QUICK RATIO: Quick ratio is the relationship between quick assets and current assets and current assets means current assets-stock-prepaid expenses. Quick ratio = Quick assets Current liabilities Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Quick assets(RS) Current liabilities(RS) Ratio 1.1.83 2.79 2.54.81 4. This indicates that for every rupees of Current Liability.6 ratio 3. the current ratio of the company was 2.67 and 3.67 3.85 2. This ratio may be expressed as follows.

3.39 0.QUICK RATIO 3 2. It was more than the standard ratio of 1:1 3.40 0.1.29.22 0. 2.83.29 2.5 0 2002-2003 2003-2004 2004-2005 YEARS 2005-2006 2006-2007 1.79.5 2 RATIO 1.5 1 0. 2.69 0.68 times. 2. the quick ratio of the company was 1.68 INTERPRETATION:- standard ratio is 1:1 During 2002-2007.79 2.85 RATIO 2.59 15 .83 2. 2. CASH RATIO:Cash ratio = Absolute Liquid Ratio / Current Ratio Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Absolute Liquid Assets Current liabilities(RS) Ratio 0.85.

4 0.0.43 154.69 0.4.5 0.1 0 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 YEARS INTERPRETATION:- During 2002-2007. the Cash Ratio of the company was 0. 0.95 16 . 3.22. During 2000-2007 on an average company has 0.45 times of current liabilities. 0.8 0.69.01 165.39.39 RATIO RATIO 0.1. times.4 0.59 0. and 0. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Current assets Inventory Average Daily Operating Expenses Ratio 193. 0.16 234.2 0.13 213.6 CASH RATIO 0. INTERNAL MEASURE:Internal measure = {Current Assets Inventory / Average Daily Operating Expenses}.3 0.22 0.44.7 0.59.

43 days to 56 days.13. days.89 0. 165.01 165. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Net Working Capital Net Assets Ratio 0.82 0.43 154.83 0. 213.01.95.95 150 100 50 0 2002-2003 2003-2004 2004-2005 YEARS RATIO 2005-2006 2006-2007 INTERPRETATION:During 2002-2003 Internal Measure was 193.13 250 200 RATIO 193.43 days.83 0. During 2003-2007 the measure was 154.84 17 . 3. 193.e.INTERNAL MEASURE 234.16.5. 234.1. NET WORKING CAPITAL RATIO:Net working capital = Net Working capital / Net Assets.43 days. This indicates that company will be able to run the business without cash for about 193.16 213. During the period of study 2002-2003 ratio has reduced i.

for one rupee of Net assets with the company.2 0. The Net Working Capital Ratio of the Company was 0.69 18 .83.8 0.4 0. 3.6 0.7 0.89 NET WORKING CAPITAL 0.69 2.1. 0.83 0.02 -2. 0.83 0.89.5 0. INTEREST COVERAGE RATIO:Interest coverage ratio = Earning Before Income Tax / Interest charges. For all the years of Analysis.6.9 0.84 RATIO 0.68 8.823 and 0. 0.82 0.3 0.1 0.84 times.12 3.1 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 YEARS INTERPRETATION:During 2002-2007.83. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Earning Before Income Tax Net Assets Ratio 2. it has less than one rupee of Net Working Capital.

8.02 RATIO -2.12. 2.7. it has a satisfactory interest coverage ratio.93 19 .2 146.12 -4 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 YEARS INTERPRETATION:During 2002-2007. 3.1.45 Reciprocal Days 95.78 2.23 175. it showed a negative rate.69 times.06 160 102. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Cost Of Goods Sold Average Inventory Ratio 3. the interest coverage ratio of the company was 2.69 INTEREST COVERAGE RATIO 6.69 2.25 3.02.68 8.05 2. INVENTORY TURNOVER RATIO:Inventory Turnover Ratio = Cost Of Goods Sold / Average Inventory. 3. indicate the inefficient operation of the company.10 8 6 4 RATIO 2 0 -2 2.68. -2.52 2.69. During 2002-2004 and 2005-2007. Bit During 2004-2005.

456.INVENTORY TURNOVER RATIO 4 3. It has shown a decreasing trend during the period of study.5 0 2002-2003 2. and 312 days in a year. and 1.05 ratio 2003-2004 2004-2005 2005-2006 2006-2007 YEARS INTERPRETATION:During 2000-2007 the company was turning its inventory of finished goods into sales 7.5 1 0. 1.96 1.72 20 . Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Credit Sales Average Trade Debtors Ratio 2. times in a year.5 2 1.25 2.87 1.8 DEBTORS TURNOVER RATIO:Debtors Turnover Ratio = Credit Sales / Average Trade Debtors.09.5 times. 147.45. 2. From past two years it was very high.154. 247.78 0. The reciprocal of inventory turnover which gives the average inventory holdings in a year shows that company was holding inventory for 48.45 3.52 2.78 RATIO 2. 115.1.5 3 3. indicating the poor management of sales affairs. 3.25 1. 3.

This indicates that the collection of debt is good in this year also indicates that debtors that debtors are being connected into cash 2times in a year.96 1.25 1.72 times 3.72 Ratio 2002-2003 2003-2004 2004-2005 YEARS 2005-2006 2006-2007 INTERPRETATION:During 2002-2003 the Debtors Turnover Ratio was around 2.5 1 0.03 21 .16 125.5 3 2. 1.18 2.57 3. During 2003-2004. 2006-2007 the ratio was 1.78 1.DEBTORS TURNOVER RATIO 3.78.79 2.08 200.88 1.5 2.16 Days 165.96.87 times. Debtors Collection Period: Collection Period = Debtors / Sales * 100.87 TIMES 2 1. 2004-2005.25 0. 0.9. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Debtors Credit Sales Ratio 2.5 0 1.06 114.59 140.1.

57 2.5 COLLECTION PERIOD 2. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Sales Net Fixed Assets Ratio 17.5 3 2.1.3.88 2.06 0. and 114 times in a year.82 6. 200.08 22 . FIXED ASSETS TURNOVER RATIO:Fixed Assets Turnover Ratio = Sales / Net Fixed Assets. it was high indicating the poor quality of debtors.18 1. it has shown declining trend indicating the improvement of quality of debtors. But during 2004-2007.38 8.5 Ratio 1 0.11 0.85 13.54 8.5 0 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 YEARS INTERPRETATION:During 2002-2007 the company was turning its debtors 165.79 3.112 0. 125.10. 140. 3. During 2002-2005.02 Reciprocal Days 0.16 RATIO 2 1.15 0.

times.38. and 2.85 Ratio 2003-2004 2004-2005 2005-2006 2006-2007 YEARS INTERPRETATION:During 2002-2007. 0. 8.06. NET ASSETS TURNOVER RATIO:Net Assets Turnover Ratio = Sales / Net Assets.02 8.1.46.08 23 .82 6.19.02 times. 3. 0.17. This indicates that for every one rupee of sales company needs respective 0.54. 1. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Sales Net Assets Ratio 1.58.33. the FAT Ratio was 17.90.53 1.75. and 0.47. 0.11.11.95 1.40 times. and 0.83.15.85.06 invested in FA’s and 0.54 8. 0. 1. The Current Assets Turnover Ratio was 2.11 1.46 invested in CA’s.82. 0. 0.08. 6. and 13. 1.54.112.38 18 16 14 RATIO IN TIMES 12 10 8 6 4 2 0 2002-2003 FIXED ASSETS TURNOVER RATIO 13. 8.56 2. The reciprocal of this ratio was 0. The reciprocal of this ratio was 0.

During 2003-2007 the Net Assets Turnover Ratio of the Company was 1.08 RATIO(%) Ratio YEARS INTERPRETATION:During 2002-2003 the Net Assets Turnover Ratio of the company was 1.5 0 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 1.08 times. 1.56.80 29.11.95 1. Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Net Profit Share Holders Funds Ratio 24. 3.12. 1.53 16. 2. RETURN ON EQUITY:Return on Equity = Net Profit / Share Holders Funds * 100.95 of sales for 1 rupee of capital employed in Net Assets.17 -10.53.5 2 1.31 12.5 1 0.56 2.37 24 .1.53 1.95 times it implies the company is producing Rs 1.11 1.NET ASSETS TURNOVER RATIO 2.

53.53 12. It was very low during 2004-2005.54 0.8 29. where as 2006-2007 showed an improvement by 29.40 25 .O. 12.13 CURRENT ASSETS TURN OVER RATIO: Current Assets Turnover Ratio = {Sales / Net Current Assets} Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Sales Net current Assets Ratio 2.E(%) 5 0 -5 -10 -15 2002-2003 2003-2004 2004-2005 YEARS 2005-2006 -10.85 1.RETURN ON EQUITY 30 25 20 15 10 R.31 16. -10.19 1.37 %.75 0.47 Reciprocal Ratio(Times) 0.33 1.46 0. 16.17 24.17.1.37 %. 3. and 29.90 2.80.37 Ratio 2006-2007 INTERPRETATION:During 2002-2007 the return on equity of the company was 24031.53 0.

0. 1.19. 0.75.47 Ratio(times) 1. 1.33. This indicates that for every One Rupee of sales company needs respectively 0.90.33 1. 1.47 times.85 1.19 1.5 1 0.46 investment.5 2 2. 0.5 0 2002-2003 2003-2004 ratio 2004-2005 2005-2006 2006-2007 years Interpretation:The Current Assets Turnover ratio was 2. 26 .53.40 times. and 0.46. The reciprocal of this ratio was 0.85.Current Assets Turnover Ratio 2.06 investments in FA’s and Rs 0.54.9 2. and 2.

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