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DEBT RATIO: Debt ratio is stable all throughout 3 years.

It seems most of the assets are financed through the Debts .The company relies more on Debt than the competitor company IDFC.IDFC assets are even financed mostly by debt but less than Power Finance Co. DEBT TO EQUITY RATIO: IF we CO. IDFC, it has less ratio through all 3 years in comparison to Power Finance which has more ratio than the former. IDFC has smaller number means a company is less reliant on debt as compared to equity, but Power Finance is more reliant on Debt than equity which may not be good for the company. Generally, a smaller number also translates to less risk; this is because more debt means more interest payments and more outstanding loans that must be paid. On the other hand, shareholder’s equity carries no guarantee of income to investors. Again, acceptable numbers will vary across industries and companies. TIE : IDFC TIE has been declining consecutively for all 3 years. IT is seen that both the Cos. Times Interest Earned is below 2.5, which is not a good sign for both the company. If compared, IDFC TIE is strong over Power Finance has an edge over Power Finance to meet its debt obligations. When the interest coverage ratio is smaller than 1, the company is not generating enough cash from its operations EBIT to meet its interest obligations. The Company would then have to either use cash on hand to make up the difference or borrow funds. Typically, it is a warning sign when interest coverage falls below 2.5. CURRENT RATIO: In all three years of both companies there has not been any improvement in the current ratio. Current ratio is a useful test of the short-term-debt paying ability of any business. It seems Power Finance co. has an edge over IDFC in the current ratio. Power Finance has more liquidity and can pay off the current liability more than the IDFC. A ratio of 2:1 or higher is considered satisfactory for most of the companies but analyst should be very careful while interpreting it. It requires a deep analysis of the nature of individual current assets and current liabilities. On the other hand, a company with low current ratio may be able to pay its current obligations as they become due if a large portion of its current assets consists of highly liquid assets i.e., cash, bank balance, marketable securities and fast moving inventories. FIXED ASSET TURNOVER RATIO: Power Finance company over three years has been able to maintain the ratio, with a slight dip in 2012.IDFC ratio is not good and has been almost same throughout the years. IDFC has not been able to squeeze out more sales from its existing FIXED ASSETS, but where as Power Finance has been able to use its fixed assets efficiently. A lower turnover ratio tells that the company is not using its assets optimally. Total asset turnover ratio is a key driver of return on equity as discussed in the DuPont analysis.

IDFC has decreased slightly over three years. It has been seen that IDFC ratio is below the average which mean it has been using a conservative debt amount. Its ratio is near to the average this means it has is at good risk. a decreasing trend means that profitability is deteriorating. IDFC is on the slight advantage. It means Power Finance co. IDFC is doing slightly better than Power Finance. EQUITY MULTIPLIER: The higher the ratio the lower the financial leverage and the lower the ratio the higher the financial leverage. TOTAL ASSETS TURNOVER-RATIO: IDFC ratio has been on rise. Their ROA will naturally be lower than the ROA of companies which are low asset-insensitive.efficiently to generate sales and that is a very good thing. On the other hand Power Finance I doing better than IDFC. If compared the ratios of these two companies. Power Finance CO. where as Power Finance co.its asset base . is efficient in generating income than Power Finance. IDFC is less profitable than Power finance for the owners of the investment PROFITABILITY RATIO : There is a t in the profitability ratio of IDFC over the three years and Power Finance Company ratio has increased in 2013. employs its equity more profitably than IDFC. An increasing trend of ROA indicates that the profitability of the company is improving.ROE is high of Power Finance in comparison to IDFC .ROE: For IDFC ROE has been the same. but where as Power Finance has been nearly the same.It seems IDFC has been little sluggish over the performance and not been able to make much profit for various other reasons that could be cost (expenditures) or low sales. Conversely. . Power Finance Co. roe has been high in 2011 decreased in 2012 and again increased in 2013. More or less. This mean both the firm are utilizing all its assets . has increased over the year. ROA: IDFC has almost the same ratios throughout three years and it’s the same with Power finance. the sales of IDFC has been on the better Side and of Power Finance being fair. where there was a dip in 2012.

IDFC is better than Power Finance Co. Considering 2013. its net profit margin has gone down periodically. . IDFC can improve using its assets more efficiently is generating sales and Power finance Co.DU POINT ANALYSIS: For IDFC. in terms of using its assets in churning out revenues. can also improve by checking with the low performance of assets that lead to low sales. but unable to capitalise this advantage into higher Equity Multiplier ratio due to in efficient usage of FIXED ASSETS or low profitability ratio.