Appendix 2

( A typical Specimen of table content )

CHAPTER
NO .
TITLE
1
INTRODUCTION
1.1 Techniques Used in Ratio Analysis
1.2 Different Users of Ratio Analysis
1.3 Limitations of Ratio Analysis
1.4 Capital Structure Ratio
1.5 Debt to Equity Ratio
1.6 Debt Ratio
1.7 Equity to Fixed Assets Ratio
1.8 Proprietary Ratio
1.9 Interest Coverage Ratio
1.10 Degree of Financial Leverage Ratio
1.11 Degree of Operating Leverage Ratio
1.12 Degree of Combined Leverage Ratio
1.13 Introduction to Cash Flow Ratios
1.14 Cash Flow to Debt Ratio
1.15 Free Cash Flow to Operating Cash Flow
1.16 Operating Cash Flow to Sales Ratio
1.17 Market Related Ratios
1.18 Price to Earnings (PE) Ratio
1.19 Price Earnings Growth (PEG) Ratio
1.20 Price to Book Value Ratio
1.21 Price to Cash Flow Ratio
1.22 Price to Sales Ratio
1.23 Dividend Yield Ratio
1.24 Put Call Ratio

1.25
1.26
1.27
1.28

Introduction to Liquidity Ratios

Current Ratio
Quick Ratio
Cash Ratio

CALCULATION

2.1 Current Ratio

2.2 Net Working Capital
2.3 Acid test ratio
2.4 Gross profit ratio
2.5 Operating profit ratio
2.6 NET PROFIT RATIO
2.7 Earning per share

FINANCIAL STATEMENT
3.1 Balance sheet
3.2 Profit and loss

CONCLUSION

2.1 Current Ratio : It is the relationship between the current assets and current
liabilities of a concern.
Current Ratio = Current Assets/Current Liabilities

Particulars

11-12

Current asset

10-11

09-10

08-09

07-08

28,157.37

21,165.87

16,750.54

20,124.17

14,722.07

34,095.20

28,748.41

21,803.06

18,079.25

13,682.23

1.20

1.20

1.19

1.22

1.09

Current liability

Current ratio

2.2 Net Working Capital : This is worked out as surplus of Long Term Sources
over Long Tern Uses, alternatively it is the difference of Current Assets and Current
Liabilities.
NWC = Current Assets Current Liabilities
Particulars

11-12

10-11

09-10

08-09

07-08

Current asset
28,157.37

21,165.87

16,750.54

20,124.17

14,722.07

34,095.20

28,748.41

21,803.06

18,079.25

13,682.23

-5937.83

-7852.54

-5052.52

2044.92

1039.84

Current liability

Net working
capital

2.3 ACID TEST or QUICK RATIO : It is the ratio between Quick Current Assets and
Current Liabilities. The should be at least equal to 1.
Quick Current Assets : Cash/Bank Balances + Receivables upto 6 months + Quickly
realizable securities such as Govt. Securities or quickly marketable/quoted shares and
Bank Fixed Deposits
Acid Test or Quick Ratio = Quick Current Assets/Current Liabilities
Particulars

Quick Current
Assets

Current
Liabilities

Acid Test or
Quick Ratio

11-12

10-11

09-10

08-09

07-08

42,959.95

33,923.12

25,073.52

17,536.87

11,766.72

34,095.20

28,748.41

21,803.06

18,079.25

13,682.23

1.26

1.18

1.15

0.97

0.86

2.4 GROSS PROFIT RATIO : By comparing Gross Profit percentage to Net Sales we
can arrive at the Gross Profit Ratio which indicates the manufacturing efficiency as well
as the pricing policy of the concern.
Gross Profit Ratio = (Gross Profit / Net Sales ) x 100
Alternatively , since Gross Profit is equal to Sales minus Cost of Goods Sold, it
can also be interpreted as below :

Gross Profit Ratio = [ (Sales Cost of goods sold)/ Net Sales] x 100
A higher Gross Profit Ratio indicates efficiency in production of the unit.
Particulars

11-12

10-11

09-10

08-09

07-08

Gross profit
8579.37

6323.62

5567.68

4596.88

3582.39

64,313.11

52,089.14

43,702.39

40,358.94

29,387.93

13.34

12.14

12.74

11.39

12.19

Net sales

Gross Profit
Margin(%)

2.5 OPERATING PROFIT RATIO :

It is expressed as

Particulars

=>

11-12

(Operating Profit / Net Sales ) x 100

10-11

09-10

08-09

07-08

Operating
profit

8,769.95

7,766.60

7,286.38

5,896.39

4,287.13

Net sales

64,313.11

52,089.14

43,702.39

40,358.94

29,387.93

Operating profit
ratio

14.65

13.46

13.78

12.23

12.98

Higher the ratio indicates operational efficiency

2.6 NET PROFIT RATIO :

It is expressed as

=>

( Net Profit / Net Sales ) x 100

It measures overall profitability.

Particulars

11-12

10-11

09-10

08-09

07-08

Net Profit
4,682.29

4,447.66

5,442.32

2,934.66

2,257.82

64,313.11

52,089.14

43,702.39

40,358.94

29,387.93

7.28

8.54

12.45

7.27

7.68

Net Sales

Net profit ratio

2.7 EARNING PER SHARE : EPS indicates the quantum of net profit of the year that
would be ranking for dividend for each share of the company being held by the equity
share holders.
Net profit after Taxes and Preference Dividend/ No. of Equity Shares
Particulars

Np

11-12

10-11

4,682.29

4,447.66

09-10

5,442.32

08-09

2,934.66

07-08

2,257.82

No of shares
340730.243

EPS

72.77

289142

65.01

395439

72.66

174466

59.45

167869

74.35

3.1
Balance sheet

------------------- in Rs. Cr. ------------------11-12

10-11

09-10

08-09

07-08

12 mths

12 mths

12 mths

12 mths

12 mths

Total Share Capital

Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Networth

122.48
122.48
0.00
0.00
25,079.40
21.14
25,223.02

121.77
121.77
368.31
0.00
21,334.05
22.13
21,846.26

120.44
120.44
25.09
0.00
18,142.82
23.29
18,311.64

117.14
117.14
0.00
0.00
12,317.96
24.59
12,459.69

58.47
58.47
0.00
0.00
9,470.71
25.90
9,555.08

Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

1,453.34
8,442.43
9,895.77
35,118.79
Mar '12

1,063.04
6,098.07
7,161.11
29,007.37
Mar '11

955.73
5,845.10
6,800.83
25,112.47
Mar '10

1,102.38
5,453.65
6,556.03
19,015.72
Mar '09

308.53
3,275.46
3,583.99
13,139.07
Mar '08

12 mths

12 mths

12 mths

12 mths

12 mths

Gross Block
Less: Accum. Depreciation
Net Block

10,618.74
2,952.61
7,666.13

8,897.02
2,220.82
6,676.20

7,235.78
1,727.68
5,508.10

5,575.00
1,421.39
4,153.61

4,188.91
1,242.47
2,946.44

Capital Work in Progress

Investments

807.94
15,871.90

785.00
14,684.82

857.66
13,705.35

1,040.99
8,263.72

699.00
6,922.26

Sources Of Funds

Application Of Funds

Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets

1,776.62
18,729.84
1,020.09
21,526.55
21,445.72
885.17
43,857.44
0.00
30,697.53
2,387.09
33,084.62
10,772.82

1,577.15
12,427.61
1,518.98
15,523.74
19,499.23
211.37
35,234.34
0.00
26,139.56
2,233.43
28,372.99
6,861.35

1,415.37
11,163.70
1,104.89
13,683.96
12,662.55
326.98
26,673.49
0.00
19,443.77
2,188.36
21,632.13
5,041.36

5,805.05
10,055.52
693.13
16,553.70
7,198.85
82.16
23,834.71
0.00
15,211.04
3,066.53
18,277.57
5,557.14

4,305.91
7,365.01
779.86
12,450.78
3,861.10
184.60
16,496.48
0.00
11,892.75
2,035.42
13,928.17
2,568.31

Miscellaneous Expenses
Total Assets

0.00
35,118.79

0.00
29,007.37

0.00
25,112.47

0.26
19,015.72

3.06
13,139.07

2,500.19
411.53

1,647.66
352.40

1,719.39
303.28

1,371.86
212.32

1,013.51
325.98

Contingent Liabilities
Book Value (Rs)

3.2
Profit & Loss account

------------------- in Rs. Cr. ------------------11-12

10-11

09-10

08-09

07-08

12 mths

12 mths

12 mths

12 mths

12 mths

Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure

53,849.48
583.53
53,265.95
885.32
539.77
54,691.04

44,055.55
398.84
43,656.71
1,781.28
559.49
45,997.48

37,187.50
317.31
36,870.19
2,321.67
-422.99
38,768.87

34,249.85
393.31
33,856.54
1,612.58
105.11
35,574.23

25,280.49
334.38
24,946.11
616.69
746.17
26,308.97

Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Preoperative Exp Capitalised
Total Expenses

14,456.43
638.79
3,506.72
24,286.29
2,439.36
689.10
-18.75
45,997.94
Mar '12

12,372.32
355.45
2,884.53
19,886.12
2,103.38
773.70
-37.87
38,337.63
Mar '11

9,593.53
334.08
2,379.14
16,913.31
1,854.23
325.58
-36.25
31,363.62
Mar '10

9,316.38
456.39
1,998.02
15,659.17
1,844.83
569.32
-24.48
29,819.63
Mar '09

8,256.46
365.25
1,535.44
10,632.83
1,393.80
280.69
-11.42
22,453.05
Mar '08

12 mths

12 mths

12 mths

12 mths

12 mths

Operating Profit

7,807.78

5,878.57

5,083.58

4,142.02

3,239.23

PBDIT

8,693.10

7,659.85

7,405.25

5,754.60

3,855.92

Income

Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)

1,683.31
7,009.79
699.46
0.00
6,310.33
-3.89
6,306.44
1,853.83
4,456.50

1,199.23
6,460.62
575.81
23.41
5,861.40
-49.05
5,812.35
1,858.47
3,957.89

995.37
6,409.88
383.65
30.95
5,995.28
-45.13
5,950.15
1,577.02
4,375.52

770.00
4,984.60
284.83
21.16
4,678.61
-21.09
4,657.52
1,176.19
3,481.66

501.83
3,354.09
195.94
15.66
3,142.49
12.21
3,154.70
982.05
2,173.42

31,541.51
0.00
1,010.46
101.44

25,965.31
0.00
882.84
112.82

21,770.09
0.00
752.75
110.25

20,503.25
0.00
614.97
101.83

14,196.59
0.00
495.32
76.26

6,123.99
72.77

6,088.52
65.01

6,021.95
72.66

5,856.88
59.45

2,923.27
74.35

825.00
411.53

725.00
352.40

625.00
303.28

525.00
212.32

850.00
325.98

3.3

Investment Valuation Ratios

Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share (Rs)
Free Reserves Per Share (Rs)
Bonus in Equity Capital
Profitability Ratios
Operating Profit Margin(%)
Profit Before Interest And Tax Margin(%)
Gross Profit Margin(%)
Cash Profit Margin(%)
Adjusted Cash Margin(%)
Net Profit Margin(%)
Adjusted Net Profit Margin(%)
Return On Capital Employed(%)
Return On Net Worth(%)
Adjusted Return on Net Worth(%)
Return on Assets Excluding Revaluations
Return on Assets Including Revaluations
Return on Long Term Funds(%)
Liquidity And Solvency Ratios

2.00
16.50
127.50
869.79
405.30
73.43

2.00
14.50
96.55
717.03
347.12
73.86

2.00
12.50
84.42
612.26
294.74
74.67

2.00
10.50
70.72
578.06
205.21
76.77

2.00
17.00
110.81
853.36
319.09
53.71

14.65
13.05
13.34
10.04
10.04
8.18
8.18
23.67
17.68
18.94
411.53
411.87
25.84

13.46
11.82
12.14
8.96
8.96
8.82
8.82
22.35
18.44
15.94
352.40
352.76
23.23

13.78
12.41
12.74
9.21
9.21
11.56
11.56
22.49
23.95
16.81
303.28
303.66
23.19

12.23
11.14
11.39
8.50
8.50
10.06
10.06
24.14
27.99
21.21
212.31
212.73
25.62

12.98
11.97
12.19
8.78
8.78
8.54
8.54
26.72
22.81
21.21
325.87
326.76
28.73

Current Ratio
Quick Ratio
Debt Equity Ratio
Long Term Debt Equity Ratio
Debt Coverage Ratios
Interest Cover
Total Debt to Owners Fund
Financial Charges Coverage Ratio
Financial Charges Coverage Ratio Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio
Debtors Turnover Ratio
Investments Turnover Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
Asset Turnover Ratio

1.20
1.26
0.39
0.28

1.20
1.18
0.33
0.30

1.19
1.15
0.37
0.33

1.22
0.97
0.53
0.44

1.09
0.86
0.38
0.28

13.62
0.39
5.35
4.06

10.01
0.33
5.90
4.80

11.17
0.37
6.09
5.81

13.09
0.53
6.35
5.92

28.57
0.38
7.41
5.75

31.82
3.42
31.82
5.12
1.53
1.66

29.73
3.70
29.73
5.03
1.52
1.61

28.73
3.48
28.73
5.20
1.48
1.67

6.01
3.89
6.01
6.23
1.80
2.11

6.00
3.88
6.00
6.09
1.92
6.09

Average Raw Material Holding

Average Finished Goods Held
Number of Days In Working Capital
Profit & Loss Account Ratios

26.39
3.27
72.81

25.77
4.21
56.58

32.32
3.54
49.22

38.11
4.02
59.09

34.14
5.21
37.06

Material Cost Composition

Imported Composition of Raw Materials
Consumed
Selling Distribution Cost Composition
Expenses as Composition of Total Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash Profit
Earning Retention Ratio
Cash Earning Retention Ratio
AdjustedCash Flow Times

27.14

28.34

26.01

27.51

33.09

38.88

36.78

54.43

44.34

39.78

0.53
15.12

0.80
14.58

0.83
18.62

0.92
21.70

1.28
22.67

24.95
21.56
76.71
79.69
1.81

25.15
21.84
70.90
75.24
1.78

19.72
18.01
71.91
75.25
1.95

20.58
18.92
72.84
75.66
2.23

26.29
23.96
71.72
74.40
1.61

72.77
411.53

65.01
352.40

72.66
303.28

59.45
212.32

74.35
325.98

Earnings Per Share

Book Value

CONCLUSION

2.1 Current Ratio

It is in increasing decreasing trend and has not exceed the standard norms so liquidity
position of the company is better. If the current assets of a company are more than
twice the current liabilities, then that company is generally considered to have good
short-term financial strength. If current liabilities exceed current assets, then the
company may have problems meeting its short-term obligations. This ratio is considered
one of the indicators of the ability to pay bills in a timely fashion, though it is not the only
measure
2.2 Net Working Capital

This ratio indicates whether a company has enough short term assets to cover its short
term debt. Anything below 1 indicates negative W/C (working capital). While anything
over 2 means that the company is not investing excess assets. Most believe that a ratio
between 1.2 and 2.0 is sufficient.
Also known as "net working capital", or the "working capital ratio".
2.3 Acid test ratio

This ratio is continuously in an increasing trend during last five years.It does
not include inventory because it is not realized quickly in cash.It determines
whether a firm has enough short-term assets to cover its immediate
liabilities without selling inventory. The acid-test ratio is far more strenuous
than the working capital ratio, primarily because the working capital ratio
allows for the inclusion of inventory assets.
2.4 Gross profit ratio

In the year 11-12 this ratio was 13% which is higher as compared to last
five years.Gross profit ratio may be indicated to what extent the selling
prices of goods per unit may be reduced without incurring losses on
operations. It reflects efficiency with which a firm produces its products. As
the gross profit is found by deducting cost of goods sold from net sales,
higher the gross profit better it is. There is no standard GP ratio for

evaluation. It may vary from business to business. However, the gross profit
earned should be sufficient to recover all operating expenses and to build up
reserves after paying all fixed interest charges and dividends.
2.5 Operating profit ratio

It is in an increasing trend this means the financial risk is going up.It is a

measurement of what proportion of a company's revenue is left over, before
taxes and other indirect costs (such as rent, bonus, interest, etc.), after
paying for variable costs of production as wages, raw materials, etc. A good
operating margin is needed for a company to be able to pay for its fixed
costs, such as interest on debt. A higher operating margin means that the
company has less financial risk.
Operating margin can be considered total revenue from product sales less all
costs before adjustment for taxes, dividends to shareholders, and interest on
debt.

2.6 NET PROFIT RATIO

In 10-11 and 09-10 it was higher in the last five years but in year 11-12 it
has declined.A company with a low or negative net profit margin can
potentially increase its profitability by taking steps to reduce costs and
increase sales. Cost-cutting measures such as producing goods more
inexpensively, laying off workers and shutting down nonperforming projects
can help boost net profit margin. Similarly, altering the price of a product or
service or improving advertising or distribution could potentially increase
sales and lead to a higher net profit margin.
2.7 Earning per share

This was higher in 07-08 as compared to last five years but it has been
increasing from 10-11.The earnings per share is a good measure of
profitability and when compared with EPS of similar companies, it gives a
view of the comparative earnings or earnings power of the firm. EPS ratio
calculated for a number of years indicates whether or not the earning power
of the company has increased.

REFERENCES
http://smallbusiness.chron.com/types-financial-ratios-used-analyze-financialperformance-3969.html
http://www.managementstudyguide.com/ratio-analysis.htm
http://www.moneycontrol.com/stocks/company_info/print_main.php

Source : Dion Global Solutions Limited