Objective of the Assignment

The assignment assigned was to analyze the Annual Report of any company in the country and to study its financial health. ITC Ltd. is one of India’s biggest companies (under the leadership of Mr. Y.C. Deweshwar) in a sector that has rapidly grown over the last few years. ITC Ltd. has been able to diversify successfully. Through this report, we try and analyze and evaluate the various ratios to appreciate their impact on company’s performance over the last few years.A Dupont analysis is also done to check the credibility of company as per shareholders, financial analysts and other mutual funds.

The financial statements of last few years are identified, studied and interpreted in light of company’s performance. As a benchmark, we also analyze various components of the company vis-à-vis other competitors in the same segment.

2. Prospects of FMCG Sector
The fast moving consumer goods (FMCG) sector would witness over 40 per cent growth in the semi-urban and urban areas, according to an analysis carried out by the Associated Chambers of Commerce and Industry of India on `Future prospects of FMCG'. The size of the sector would go up from the present Rs 38,500 crore to Rs 50,000 crore by 2010, says the analysis. In urban India alone, the sector would witness over 100 per cent growth with its size increasing to Rs 35,000 crore by 2010 from the present Rs 16,500 crore, says the analysis adding that the overall size of the sector, which would include the rural and semi-urban market, would grow to Rs 85,000 crore. Over the years the FMCG sector has registering an increase of double digit per cent. Currently, the urban market for FMCG is growing at an annual growth rate of around 20 per cent while the growth for semi-urban and rural areas is less than 10 per cent, says the analysis. Though the semi-urban and urban market for FMCG would grow larger, according to the analysis, it is bound to put a severe pressure on the margins of manufacturers of FMCG products due to intense competition. With 12.2% of the world population living in the villages of India, the Indian rural FMCG market is something no one can overlook. More focus on farm sector will boost the rural income thus providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. Also, with rising income and growing consumerism, FMCG sectors are likely to benefit. Growth potential for all the FMCG companies is huge as the per capita consumption of almost all products in the country is amongst the lowest in the world. Further, if these companies can change consumer’s mindset and offer new generation products, they would be able to generate higher growth in the future.

3. Company Overview

ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 18 billion and a turnover of over US $ 5.1 Billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today. ITC also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety

is aggressively pursuing emerging opportunities in providing end-toend IT solutions. ITC is widely perceived to be dedicatedly nation-oriented. productivity. superior brand-building capabilities. is expected to progressively create for ITC a huge rural distribution infrastructure. Branded Apparel. ITC is one of the country's biggest foreign exchange earners (US $ 3. As one of India's most valuable and respected corporations. Paperboards. Over time.000 people at more than 60 locations across India. which has already become the subject matter of a case study at Harvard Business School.2 billion in the last decade). effective supply chain management and acknowledged service skills in hoteliering. This transformational strategy. While ITC is an outstanding market leader in its traditional businesses of Cigarettes. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach. ITC's wholly owned Information Technology subsidiary. safety and environment management systems. it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery.Matches and other FMCG products. Packaging and Agri-Exports. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC employs over 24. ITC's production facilities and hotels have won numerous national and international awards for quality. the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. Personal Care and Stationery. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". ITC Infotech India Limited. The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. Hotels. significantly enhancing the Company's marketing reach. ITC was the first company in India to voluntarily seek a corporate governance rating. In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. The Company continuously endeavors to enhance its wealth generating . including e-enabled services and business process outsourcing.

000 shareholders.capabilities in a globalizing environment to consistently reward more than 3. Information Technology.000. for the sum of Rs 310. The Company celebrated its 16th birthday on August 24. which came up on that plot of land two years later. 'Virginia House'. For the Shareholder. by purchasing the plot of land situated at 37. ITC chose the hotels business for its . Lifestyle Retailing and Greeting Gifting & Stationery . Packaging. and the name of the Company was changed to I. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses . For the nation. The Company's ownership progressively Indianised.L. fulfill the aspirations of its stakeholders and meet societal expectations. Nehru Road) Kolkata. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value.the full stops in the Company's name were removed effective September 18. This decision of the Company was historic in more ways than one. The Company now stands rechristened 'ITC Limited'.C. 1926. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses. 2001. The Company's headquarter building. would go on to become one of Kolkata's most venerated landmarks." HISTORY OF ITC TC was incorporated on August 24. It was to mark the beginning of a long and eventful journey into India's future.T.81. Kolkata. ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business.Cigarettes & Tobacco. A leased office on Radha Bazar Lane. Its beginnings were humble. was the centre of the Company's existence. It is today India's most sophisticated packaging house. the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. Agri-Exports. (now renamed J. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. Paperboards & Specialty Papers. 1910 under the name of 'Imperial Tobacco Company of India Limited'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. Hotels. Limited in 1974. Chowringhee. Foods.

this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. The Kovai Unit allows ITC to improve customer service with reduced lead time and a wider product range. Also in 1990. christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. Tamil Nadu. quality and manufacturing processes are comparable to the best in the world. ITC's paperboards' technology. In 1979. environmental protection and community development. Maharashtra and Uttar Pradesh. in Nepal as an Indo-Nepal and British joint venture. ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited. create tourism infrastructure and generate large scale direct and indirect employment. In 1985. near Coimbatore. In November 2002. leveraging its agri-sourcing competency. Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). its shares have been held by ITC. an economically backward area in the state of Andhra Pradesh. which today has become the market leader in India. In 1990. In 2004. with over 70 owned and managed properties spread across India. ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002. Since then ITC's Hotels business has grown to occupy a position of leadership. ITC's first rural mall. Bhadrachalam Paperboards Division. 2002 and became a Division of the Company. Since inception. Now it extends to 10 states covering over 4 million farmers. Bhadrachalam Paperboards amalgamated with the Company effective March 13. ITC set up the Agri Business Division for export of agri-commodities. British American Tobacco and various independent shareholders in Nepal. 24 'Choupal Saagars' are now operatonal in the 3 states of Madhya Pradesh.potential to earn high levels of foreign exchange. The merged entity was named the Tribeni Tissues Division (TTD). ITC set up Surya Tobacco Co. The Division is today one of India's largest exporters. To harness strategic and operational synergies. It is directly involved in education. . On the rural retail front. Ltd (BIPCO). ITC's unique and now widely acknowledged eChoupal initiative began in 2000 with soya farmers in Madhya Pradesh. productivity. In August 2002. It has also made an immense contribution to the development of Sarapaka. ITC acquired Tribeni Tissues Limited.

John Players. Autograph books and Slam books. Financial Services & Insurance). ITC also launched 'Expressions Matrubhasha'. the Company introduced 'Miss Players'. ITC spun off its information technology business into a wholly owned subsidiary. In 2002. in 2002. Wills Lifestyle became title partner of the country's most premier fashion event . a range of premium stationery products. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour). In 2000. Hospitality and Transportation) and Media & Entertainment. 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. the company rolled out 'Classmate'. In just six years. BFSI (Banking. ITC launched a special 'Celebration Series'. THT (Travel. ITC Infotech India Limited. ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands. a rapidly growing market share and a solid market standing. In 2002.Wills Lifestyle India Fashion Week . taking the event forward to consumers. ITC launched a line of high quality greeting cards under the brand name 'Expressions'. to more aggressively pursue emerging opportunities in this area. CPG&R (Consumer Packaged Goods & Retail). with an enviable distribution reach. a vernacular range of greeting cards in eight languages and 'Expressions Paperkraft'.that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry.In 2000.a fashion brand in the popular segment for the young woman. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. a range of notebooks in the school stationery segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007. . providing outsourced IT solutions and services to leading global customers across key focus verticals . ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. In 2007. ITC also initiated a foray into the popular segment with its men's wear brand. To mark the occasion. In 2006. In the same year. In 2003.Manufacturing. the product range was enlarged with the introduction of Gift wrappers. Today ITC Infotech is one of India’s fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing.

the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme). Source: http://itcportal. Aim.In 2002. Sandalwood. an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Bouquet. ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. Sambrani and Nagchampa. ITC introduced Essenza Di Wills. Shower Gels and Soaps in September. Mangaldeep. Aim Mega and Aim Metro. a premium range of Shampoos. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008. Inizio. ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC now markets popular safety matches brands like iKno.com . October and December 2007 respectively. Madhur. Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills'. ITC's popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose. Jasmine.

the more liquid the company is.58 times says that the company is in relatively good short-term financial standings. The reason why the ratio increases mainly is because of a more than proportionate increase of the Current Assets when compared to the Current Liabilities.4) 7019. Financial Statement Analysis 1.4.27 4432.30 1.3:Current assets.4:Current liabilities and provisions (II. Refer Table # 1 . Liquidity Ratios 2008 Current ratio: Current assets / Current Liabilities II. The ratio is an indication of a company's ability to meet short term debt obligations. the higher the ratio.3/II. Year a. Loans and advances II.58 The current ratio of 1.

4: Current liabilities and provisions (II.27 4050.4) 7019.1.52 2968.3: Current assets.67 . Year b.75 4432.inventories)/ Current Liabilities II.30 0. Liquidity Ratios 2008 Quick ratio or Acid test ratio: (Current assets . Loans and advances Less: II.3-II.3a: Inventories II.3a)/(II.

The company has also shown an increasing trend in the liquidity ratio over the years. In general. however. Refer Table # 1 1. i.The small ‘Quick ratio’. ITC has strong financial positions in many other aspects. 0. Liquidity Ratios 2008 Cash ratio or Absolute liquidity ratio: (Cash + Marketable securities) /Current liabilities . The current assets (less inventories) have again increased more than proportionately reflecting in an increasing liquidity ratio.67 times says that the company's financial strength is not so strong. quick ratios vary greatly from industry to industry and ITC does not have as such any worries in getting creditors. Year c.e. a quick ratio of 1 or more is accepted by most creditors.

13 times says that the company is not in the position to very quickly liquidate its assets and cover short-term liabilities.13 The cash ratio of 0. But there is no such liquidity need for the company and so the small value of the ratio has no such important implications.0 570.4) 570. Refer Table # 1 .25 4432. The increase again is because of a more than proportionate increase in the cash items (and near cash items) of ITC Limited.II.4: Current liabilities and provisions (II. (The ratio is of interest to short-term creditors) The absolute cash ratio follows more or less the same trend as the other two liquidity measures.3c)/(II.3c:Cash and bank Balances Add: Marketable securities II.3 0.25 0.

67 0.43 12057.018 The debt-to-equity ratio offers one of the best pictures of a company's leverage. Refer Table # 1 . The ratio of 0. Year a. The higher the figure.2: Loan funds I. which means that the company has not been aggressive in financing its growth with debt. Over the years. Thus its earnings are stable. Solvency Ratios 2008 Debt – equity ratio: Long term debt/ equity (net worth) I. the higher is the leverage the company enjoys.1: Shareholders funds (I.018 times.1) 214.2)/(I. ITC Limited has shown a mix-match of the debt-equity ratio. The company has better support from the shareholders.2.

Year b.018 The ratio of 0.1 0.1) (I.2)/(I.2)+(I. 2.43 12057.2.2: Loan funds I.1) 214. Thus the company is efficiently utilizing its loan funds.67 12272.1: Shareholders funds (I. Solvency Ratios 2008 Debt ratio: debt (long term)/ (debt (long term) + equity) or debt /capital employed I.2+I.018 times signifies that the company has employed more capitals over its debts. Year Solvency Ratios 2008 .

Refer Table # 1 3.1 times is magnificently very high and hence the company has very sound financial position.77 0. This is measured as the ratio between the profit before interest and taxes to the interest amount paid that year. Lower the ratio. Year Turnover Ratios 2008 .4a-13: Interest accrued but not due on loans (P.74 6178.1 The interest coverage ratio is a measurement of the number of times a company could make its interest payments with its earnings before interest and taxes.4a-13) 4571.c. Interest Coverage ratio : (earnings before interest and tax) / Interest P/L:III: profit before taxation and exceptional items II. The ratio of 6178. It has no tension of paying interests over its loans.III)/(II. higher is the company’s debt burden.

15 116 116 days or about four months periods for the liquidation of stocks is quiet 3. 3.53 4432.15 The ratio of 3. Inventory turnover: Cost of goods sold or net sales /Average (or closing) inventory. P/L:IB:Net sales II. Year b.a. Number of days in a year Inventories turnover ratios (360)/(ITR) 365 3. Debtors turnover ratio: Credit sales or net sales/ Average (or closing) debtors (or accounts receivable (total debtors +bills receivable) .3a:) 13947.3a:Inventories (P/L:IB)/(II.43 3. Year 2008 c.15 times signifies that the company is efficient in selling its stocks. Turnover Ratios 2008 Days of Inventory holding: Number of days in the year (say 360)/ Inventory turnover ratio. Turnover Ratios efficient.

P/L:IB:Net sales II. Year d.28 The debt collection period of 19 days is quiet good and the company is efficient in getting back its dues.53 736.93 times signifies that the company is getting good returns and has no visible risk but benefits out of its debtors.93 The ratio of 18. Year e. Turnover Ratios 2008 Current assets turnover: Net sales/ Current assets . 3.3b:Sundry debtors (P/L:IB)/(II.3b) 13947.93 19.93 18. Turnover Ratios 2008 Collection period: Number of days in the year (say 360)/ Debtors turnover Number of days in the year Debtors turnover (365)/(DTR) 365 18. 3.

Year f. Turnover Ratios 2008 Net current assets turnover: Net sales/ Net current assets P/L:IB:Net sales Net Current assets (P/L:IB)/(NCA) 13947.3: Current assets.97 5. the company is efficient in making sales revenue. . loans and advances ((P/L:IB)/(II.15 times signifies that.53 4432.P/L:IB:Net sales II.30 3. in spite of the current liabilities. 3.39 The ratio of 5.39 times signifies that the company is highly efficient in utilizing its net current assets and generating sales revenue.53 2586.3) 13947.15 The ratio of 3.

3.91 The ratio of 1. Turnover Ratios 2008 Fixed assets turnover: Net sales/ Net fixed assets P/L:IB:Net sales II.53 7295.3.65 1. Turnover Ratios 2008 Net assets turnover: Net sales/ Net assets or capital employed : (Net assets = all assets – accumulated depreciation) .91 times signifies that the company is very efficiently utilizing its fixed assets for generating sales revenue. Year g.1:Net Fixed Assets (P/L:IB)/(II. Year h.1) 13947.

ITC Limited has done well in the last few years and has continuously reported higher and higher profit every subsequent time.17 1. the ratio between them has not changed significantly. The sales of the company have also experienced a similar trend that has led to the expansion of profit.77 13947. Because the growth in the two components has nearly been equal. in our case) to that of the sales for the given period during which the profit has been earned is a measure of the profitability of the company for that period.53 7295.2: Investments Net Current assets Net assets (P/L:IB)/(NA) 13947.09 times signifies that the company is efficient in utilizing its Year 2008 net assets in generating sales revenue but needs to improve more.09 4.78 The ratio between the profit before interest and taxes (equal to the operating income.97 12817.1:Net Fixed Assets II.78% is quiet impressive and the company is making good profits. a. Profitability Ratios The ratio of 1. Profit Margin: (Profit before interest and tax (PBIT)/ Net sales)×100 P/L:III:Profit before Exceptional items P/L:IB:Net Sales (P/L:III)/(P/L:IB)×100 taxation and 4571. Refer Table # 1 .P/L:IB:Net sales II.55 2586. The Profit margin of 32.65 2934.53 32.

like PBIT. the profit after tax is directly correlated with the profit before tax. .4 PAT or.1 13947.4% is quiet impressive. and the company is performing well.53 22. The financing decisions and also the tax have altered the overall impact on the profitability of the company. Profitability Ratios 2008 Net margin: Profit after tax (PAT) ×100 / Net sales P/L:III:Profit after taxation P/L:IB:Net Sales (P/L:III)/(P/L:IB)×100 3120. Year b. The interest component is the sole parameter that can differentiate the trend followed by the ratio above and this one.4. has shown an upward trend. The net margin of 22. PAT for ITC Limited.

Year c. Profitability Ratios 2008 Net assets turnover: Net sales/ Net assets or capital employed : (Net assets = all assets – accumulated depreciation) .4.

The ratio of 25.P/L:III:Profit before Exceptional items II. Refer Table # 1 .1:Net Fixed Assets II.65 2934.55 2587. Year d.69% is quiet good and company is performing well.67 25. This ratio indicates the return on stockholder's total equity that is invested in the business.97 12817.17 42.88 The ratio of net income after taxes to total end of the year net-worth of the company is called the RONW for that company.77 7295.1:Shareholders funds (P/L:III)/(P/L:IB)×100 3120.1 12057.69 The Return of 42. Profitability Ratios 2008 Return on equity: (PAT/Equity (net worth)) ×100 P/L:III:Profit after taxation I.2: Investments Net Current assets Net assets (P/L:IB)/(NA)x100 taxation and 5471.88% is quiet good and the company is utilizing the shareholders funds in a better way. 4.

28 rupee) Earnings per share.5.8.28 is very good. It is to be noted that there was a stock split in the year 2005-06 due to which the face value of the shares changes from Rs. Year a. It is therefore measured as the portion of a company's profit allocated to each outstanding share of common stock. 1/per share. In comparison to the face value of Re. Refer Table # 1 . as it is called.per share to from Rs. EPS serves as an indicator of a company's profitability. 10/. Equity-related Ratios 2008 Earning per share (EPS): PAT/Number of ordinary shares P/L:III:Profit after taxation 3120. are a company's profit after tax (PAT) divided by its number of outstanding (equity) shares.1 P/L:IV-19(iv):Weighted average Number 3764167486 of ordinary shares outstanding (P/L:III)/(P/L:IV)(×10^7: to convert in per 8.1/share the EPS of Rs.

Equity-related Ratios 2008 Dividends per share (EPS): PAT/Number of ordinary shares P/L:IV:Proposed Dividend 1319. DPS of Rs.00/share.1. over a year. It is the amount of the dividend that shareholders have (or will) receive. Refer Table # 1 . In compared to the face value of the shares. Re. there was a stock split for ITC Limited in the year 2005-06 that resulted in more than a 10 fold increase in the number of equity shares in the market. for each share they own.50 is quiet good.5.50 ruppes) Dividend per share (DPS) is a simple and intuitive number.e. Year b. i. As mentioned earlier.01 P/L:IV-19(iv):Weighted average Number 3764167486 of ordinary shares outstanding (P/L:III)/(P/L:IV)×10^7(to convert into unit 3.3.

. So the value of 0.28 .5. the more secure the dividend because smaller dividends are easier to pay out than larger dividends.42 A very low payout ratio indicates that a company is primarily focused on retaining its earnings rather than paying out dividends.5 8. Equity-related Ratios 2008 Pay out ratios: DPS/EPS or Dividends/PAT DPS EPS (DPS)/(EPS) 3. The payout ratio also indicates how well earnings support the dividend payments: the lower the ratio.43 times is quiet good. Year c.

Price-Earnings ratio is a measure of the price paid for a share relative to the income or profit earned by the firm per share. Market Price Per Share The closing price of the common or preferred stock as reported on the applicable stock exchange consolidated tape as of the date indicated 5. Year d. Equity-related Ratios 2008 Price/Earning ratio: Market value per share/ EPS We have to get the Market value per share of the relevant period. Refer Table # 1 . A higher P/E ratio means that investors are paying more for each unit of income.5. Equity-related Ratios 2008 Dividend Yield: DPS/Market value per share We have to get the Market value per share of the relevant period. Year e.

“Here “diluted” value in considering numbers of shares is not considered.67 P/L:IV-19(iv):Weighted average Number 3764167486 of ordinary shares outstanding (I.e. i.” . i.32.e.×10^7(to convert into unit 32. drastically different than what the market is valuing the stock at. The book value.03 is far higher than the face value of each share.1:Shareholders funds 12057. Re. Equity-related Ratios 2008 Book value per share: Net worth/ Number of ordinary shares I. Rs. Year g.03 Rs) BV is considered to be the accounting value of each share.

Equity-related Ratios 2008 Return on assets or earning power (ROTA): (PAT/ Average total assets (of the given years.17 35. This is expressed as the ratio between the profit before interest and taxes (PBIT) to the Capital Employed (Loans and Owner’s Fund) in the business.77 12817. 4571. Year a. Equity-related Ratios 2008 Return on capital employed) ×100 employed (ROCE): (EBIT(PBIT)/ Capital P/L:III:Profit before items I:Sources of Funds ((P/L:III)/I)×100 taxation and Exp. The ROCE of 35. Refer Table # 1 6. here 2006&07)) ×100 or ((PAT+ .6.67% signifies that the company is getting good return out of its investment decisions. Year b.67 The return on capital employed is another measure of the returns that the business generates.

27 5610. Earning power of the company. i.77 6289.94 19.55 7019. This is calculated by taking the ratio between the PBIT (Profit before Interest and Taxes) to the Total Assets of the company. 19.72 16108.10 7295. Refer Table # 1 .e.Interest)/Average fixed assets) ×100 P/L:III:Profit after taxation Fixed assets 2008 Investments 2008 Current assets 2008 Fixed assets 2007 Investments 2007 Current assets 2007 Average total assets (PAT/ATA)×100 3120.37 The return on Total Assets is yet another method of calculating the return of the company.65 2934.37% is quiet good and the company is doing well.91 3067.

1:Shareholders funds (P/L:III)/(P/L:IB)×100 3120. .6.88 The ratio (25. since there are no preference shares. Year c.88 times) is same as that of “Return on equity”.1 12057. Equity-related Ratios 2008 ROTSE (return on total shareholders equity) ×100 shareholders equity): (PAT/ Total P/L:III:Profit after taxation I.67 25.

53 0.53 22.10 13947.27 7295.98 times Return on Total Assets: 21.65 14314.92 13947.Du Pont analysis for year 2008: Net Profit after Tax: Net sales: Net Profit Margin: Current Asset: Fixed Asset: Total Asset: Net Sales: Total Asset Turnover: 3120.70% Du Pont analysis for year 2007: .27% 7019.

63 12164.76% Du Pont analysis for year 2006: Net Profit after Tax: Net sales: Net Profit Margin: Current Asset: Fixed Asset: Total Asset: Net Sales: Total Asset Turnover: 2280.Net Profit after Tax: Net sales: Net Profit Margin: Current Asset: Fixed Asset: Total Asset: Net Sales: Total Asset Turnover: 2699.53 0.98 times Return on Total Assets: 21.72 5610.37 9790.20% 6289.29 0.13 9567.03 9790.90 4405.29 22.29% 5161.97 12164.98 times Return on Total Assets: 22.53 23.82% .91 11900.

91 7676.85 6470.40 6470.05 7097.07 7639.20 7639.91 times Return on Total Assets: 22.Du Pont analysis for year 2005: Net Profit after Tax: Net sales: Net Profit Margin: Current Asset: Fixed Asset: Total Asset: Net Sales: Total Asset Turnover: 1837.60 0.45 24.29 4136.05% 3539.93% Du Pont analysis for year 2004: Net Profit after Tax: Net sales: Net Profit Margin: Current Asset: Fixed Asset: Total Asset: Net Sales: Total Asset Turnover: 1592.99 times Return on Total Assets: 23.45% .62% 3485.35 3612.60 24.45 0.

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