INFERENCES

Ratios 1) Current Ratio Current Ratio

Mar '13

Mar '12

Mar '11

1.44

1.26

1.19

The current ratio has increased subsequently from 2011-13, the reason behind it being the increase in current assets. Though current liabilities have also increased but the increase in Current assets is more than the per year increase in current liabilities. The factors that have contributed to increase in current assets are as followsInventories Sundry Debtors Net Block 2) Quick Ratio Quick ratio 0.74 0.53 0.48 56,829.20 49,284.52 15,502.87 8,869.65 60,119.33 58,187.40 36,404.08 5,799.28 41,581.07

The quick ratio has increased subsequently from 2011-13, this shows that the short term liquidity position of the company is improving.

3) Debt Ratio Debt ratio 0.55 0.49 0.47

The debt ratio has increased marginally over the years, this indicates that the percentage of a company's assets that are provided via debt have increased i.e. more proportion of a company's assets are financed through debt. 4) Debt Equity Ratio Debt Equity Ratio 1.22 0.95 0.88

The ratio is increasing from 2011-13this implies that the company has been aggressive in financing its growth with debt.

5) Asset Turnover Ratio Asset Turnover Ratio 3.61 3.31 3.06

The asset turnover ratio has increased this implies that the company is using its assets efficiently to generate sales revenue.

6) Times Interest Earned Times Interest Earned 1.62 4.32 9.70

The TIE Ratio has decreased over the years this signifies that the income before interest and tax is decreasing and at present it is just enough to pay of its interest expense.

7) Return on Assets
ROA 3.08% 6.89% 10.75%

A deteriorating trend means that profitability is decreasing. This is shown in Profit & Loss account. The profit is continuously decreasing
Mar '13 Net Profit 3,954.62 Mar '12 7,445.48 Mar '11 10,220.55

8) Return on Equity ROE 6.83% 13.46% 20.22%

Return on equity is an important measure of the profitability of a company, it can imply the company is not able to generate good revenues on investments.

9) Inventory Turnover Ratio Inventory Turnover Ratio 7.72 6.72 7.40

For the year 2011-2012 the ratio has decreased, it might be because of decrease in sales that has led to keeping of more stock of inventory, later on it has increased showing increase in sales and less hoarding of inventory.

10) Daily Sales Outstanding Days Sales outstanding 12 9 7

The ratio is increasing implying the sales are now taking more time to get converted into cash and increase in the trend is unfavourable and indicates inefficiency in credit sales collection.

11) Debtors Turnover Ratio Debtors turnover ratio 29.88 40.28 50.23

The ratio is decreasing which signifies that the company should re-assess its credit policies in order to ensure the timely collection of imparted credit that is not earning interest for the firm. 12) Equity multiplier Ratio Equity Multiplier 221.51% 195.30% 188.16%

The higher the ratio the higher the financial leverage, which means the company is relying more on debt to finance its assets.