LOVELY PROFESSIONAL UNIVERSITY Lovely school of business

Report on Summer Training Ratio analysis of ANDRITZ HYDRO

Submitted to Lovely Professional University Mr. Manoj Kumar, Asst Prof . In partial fulfillment of the Requirements for the award of Degree of Master of Business Administration Submitted by: Rohit Singh 10901313

LOVELY SCHOOL OF BUSINESS LOVELY PROFESSIONAL UNIVERSITY PHAGWARA

TABLE OF CONTENTS
Acknowledgement…………………………………………………. CHAPTER I………………………………………………………. Introduction ……………………………………………………… Objective…………………………… Need of study……………………… Scope of study…………………… Significance of study……………… Review of literature……………………………………………… Methodology………………………………………………………. Problem recognition……………………………………… Research design…………………………………… Data collection…………………………… Limitation……………………………… CHAPTER II Company profile…………………………………………………. History and organization of Andritz in India…………… Vision of Andritz Board Members Recent trend in Andritz Industry………………………………. SWOT Analysis…………………………………………………. Analysis and interpretation……………………………………. Findings………………………………………………………… Recommendation……………………………………………… Conclusion…………………………………………………… Limitation………………………………………………………. Bibliography……………………………………………………..

Executive summary
Every countries economic condition depends upon the performance of its Industry. How the investors are interested in it as it will help in the increment in the flow of foreign exchange. A sound and well performing industry will always attract investors as it will give them a return in a less time period. But it is not easy for a layman to understand or to properly analyze the performance of the company. To understand the performance of any company we have to do financial statement analysis. Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two variables. Ratio analysis helps in inter-firm comparison by providing necessary data. An inter firm
comparison indicates relative position. It provides the relevant data for the comparison of the performance of different departments. If comparison shows a variance, the possible reasons of variations may be identified and if results are negative, the action may be initiated immediately to bring them in line.

In my study I have tried to make out a clear picture of Andritz Hydro PVT ltd. Performance in the turbine industry with the help of Ratio analysis. While doing my interpretation through Ratio analysis I have focused on 5 main areas: 1. Liquidity 2. Investment/shareholder

3. Gearing 4. Profitability 5. Financial

With the help of ratio analysis we measures relationship between resources and financial flows. It show ways in which firm‘s situation deviates from Its own past. Other firm‘s The industry All firms… There are some other tools through which the investors try to bring out the clear picture of the company so that the investor can easily understand that on which company they should invest their money and the tools are: 1. Cash flow statement 2. Comparative income statement 3. Fund flow statement

Finally I shall consider my hard work worthwhile if this endeavor is able to satisfy all those concerned and proves useful to anyone or for any further study in future. Finance is the heart of any organization.e. findings and recommendations from the study of Ratio Analysis at ANDRITZ HYDRO PVT LTD. With the purpose of getting myself well dressed with the atmosphere of Prevailing industry. This report presents the workings. To bridge the gap between theory & practice and to cultivate proper temperament and generate much needed morale i. I went for eight week training at ―ANDRITZ HYDRO PVT LTD‖.B. . to help the students to identify their strong and weak points in the following and appreciating various organizational activities.PREFACE As a new paradigm based on proper integration of formal teaching and actual practice.A) to get a feel of actual Business Environment. So that appropriate measures can be taken at an earliest time. this Summer Training has been introduced under the Degree of Master of Business Administration (M. Proper utilization of financial resources is necessary for any organization to survive. It gives the better understanding of the financial position of ANDRITZ HYDRO PVT LTD.

I sincerely believe that the road of improvement is never ending. Jalandhar for acting as a Guiding star for me and helped me in their own way to complete this interim report. I am highly grateful to Mr. First of all I would like to thank God for his grace . I firmly believe that there is always scope for improvement and accordingly.ACKNOWLEDGMENT I am grateful to all those who have helped me directly or indirectly in company this project. I further welcome inspiration and suggestion to make it best.I am further thankful to ANDRITZ HYDRO PRITHLA which give me chance to held my project study upon of it I exuberantly thankful to Mr. Rajesh Sharma (finance manager) I further want to thank to all staff members of hydro Andritz who guide me and helps to make project report. I shall take forward to receive Suggestions. Hence I shall forward to end gratefully acknowledge all suggestions received. Rohit Singh (10901313) . Manoj Kumar faculty of LSB.

. Corporate finance is closely related to managerial finance. government agency and organization has one or more financial managers who oversee the preparation of financial reports.g. Training. direct investment activities. Job outlook 6. and when or whether to pay dividends to shareholders.Introduction Financial Management is the specific area of finance dealing with the financial decision corporations make. Employment 4. without taking excessive financial risks. describing the financial techniques available to all forms of business enterprise. many . and the tools and analysis used to make the decisions. Related occupations Let us discuss each of these in a detailed manner. The discipline as a whole may be divided between long-term and short-term decisions and techniques. Short-term corporate finance decisions are called working capital management and deal with balance of current assets and current liabilities by managing cash. which is slightly broader in scope. the credit terms extended to customers). As computers are increasingly used to record and organize data. Capital investment decisions comprise the long-term choices about which projects receive investment. corporate or not. Other qualifications and Advancement 5. whether to finance that investment with equity or debt. Nature of work Almost every firm. inventories. and implement cash management strategies. Working conditions 3. and short-term borrowings and lending (e. 1. Role of Financial Managers: The role of a financial manager can be discussed under the following heads: 1. Both share the same goal of enhancing firm value by ensuring that return on capital exceeds cost of capital. Nature of work 2.

and analyses of future earnings or expenses. operations. objectives. determine credit ceilings. They also manage the organization‘s insurance budget. which include controller. treasurer or finance officer. savings and loan associations. balance sheets. Managers specializing in international finance develop financial and accounting systems for the banking transactions of multinational organizations. and budgets. Regulatory authorities also in charge of preparing special reports require controllers. such as lending. credit unions. controllers oversee the accounting. and monitor the collections of past-due accounts. such as income statements. and deal with mergers and acquisitions. and mortgage and finance companies. cash flow projections are needed to determine whether loans must be obtained to meet cash requirements or whether surplus cash should be invested in interest-bearing instruments. audit. such as commercial banks. Credit managers oversee the firm‘s issuance of credit. and investments. execute capital-raising strategies to support a firm‘s expansion. or programs. mortgages. cash manager. They establish credit-rating criteria. Financial institutions. employ additional financial managers who oversee various functions. Risk and insurance managers oversee programs to minimize risks and losses that might arise from financial transactions and business operations undertaken by the institution. and budget departments. credit manager. These managers may be required to solicit business. or electronic financial services. including sales. For example. Often. . They oversee the investment of funds and manage associated risks. Controllers direct the preparation of financial reports that summarize and forecast the organization‘s financial position. supervise cash management activities.financial managers are spending more time developing strategies and implementing the longterm goals of their organization. The duties of financial managers vary with their specific titles. Treasurers and finance officers direct the organization‘s financial goals. and risk and insurance manager. trusts. Cash managers monitor and control the flow of cash receipts and disbursements to meet the business and investment needs of the firm.

authorize loans. These areas require extensive. which may include hiring personnel. government financial managers must be experts on the government appropriations and budgeting processes. In fact. approving loans and lines of credit. Working conditions Financial managers work in comfortable offices. Financial managers play an increasingly important role in mergers and consolidations and in global expansion and related financing. The role of the financial manager. Financial managers commonly work long . often close to top managers and to departments that develop the financial data these managers need. particularly in business. specialized knowledge on the part of the financial manager to reduce risks and maximize profit. all financial managers perform tasks unique to their organization or industry. acting as business advisors to top management. some small firms contract out all accounting and financial functions to companies that provide these services. Financial managers who work for financial institutions must keep abreast of the rapidly growing array of financial services and products. Financial managers now perform more data analysis and use it to offer senior managers ideas on how to maximize profits. They typically have direct access to state-ofthe-art computer systems and information services. is changing in response to technological advances that have significantly reduced the amount of time it takes to produce financial reports. financial managers must be aware of special tax laws and regulations that affect their industry. establishing a rapport with the community to attract business. and direct the investment of funds. always adhering to State laws and regulations. They often work on teams. Moreover. and assisting customers with account problems. Financial managers increasingly are hired on a temporary basis to advise senior managers on these and other matters. Financial managers need to keep abreast of the latest computer technology in order to increase the efficiency of their firm‘s financial operations. For example. Branch managers of financial institutions administer and manage all of the functions of a branch office. In addition to the general duties described above. whereas healthcare financial managers must be knowledgeable about issues surrounding healthcare financing. 2.

However. Firms often provide opportunities for workers to broaden their knowledge and skills by encouraging employees to take graduate courses at colleges and universities or attend conferences related to their specialty. These academic programs develop analytical skills and provide knowledge of the latest financial analysis methods and technology. Financial managers should be creative thinkers and problem solvers applying their analytical skills to business. sponsor numerous national and local training programs. ability. approximately 1 out of 4 are employed by insurance and finance establishments. finance companies. Other qualifications and Advancement A bachelor‘s degree in finance. and leadership are emphasized for promotion. In addition. Employment While the vast majority is employed in private industry. As financial . international banking. Financial management.hours. financial managers also may broaden their skills and exhibit their competency by attaining professional certification. and information systems. They generally are required to attend meetings of financial and economic associations and may travel to visit subsidiary firms or to meet customer 3. branch managers in banks. In some cases. budget management. or risk management. Many firms pay all or part of the costs for employees who successfully complete courses. or business administration is the minimum academic preparation for financial managers. banking. such as banks. Although experience. Training. 4. often in cooperation with colleges and universities. economics. savings institutions. and credit union associations. finance. There are many different associations that offer professional certification programs. economics. often up to 50 or 60 per week. corporate cash management. They must be comfortable with the latest computer technology. Experience may be more important than formal education for some financial manager positions—notably. this type of special study may accelerate advancement. and securities dealers. credit unions. financial analysis. although they can be found in every industry. preferably in business administration. Persons enrolled prepare extensively at home and then attend sessions on subjects such as accounting management. nearly 1 in 10 works for the different branches of government. accounting. many employers now seek graduates with a master‘s degree.

profits. credit operations. 6. Financial managers who are familiar with computer software that can assist them in this role will be needed. lending. and financial services sales agents. or insurance risk and loss control. Workers in other occupations requiring similar training and skills include accountants and auditors. financial managers must have knowledge of international finance. and generating ideas and creative ways to increase profitability will become a major role of corporate financial managers over the next decade. securities investment. loan counselors and officers. however. . Computer technology has reduced the time and staff required to produce financial reports. budget analysts. financial analysts and personal financial advisors. and costs. to see the organization through a short-term crisis or to offer suggestions for boosting profits. Those with extensive experience and access to sufficient capital may start their own consulting firms. well-trained. Job outlook Some companies may hire financial managers on a temporary basis. Some financial managers transfer to closely related positions in other industries. Other companies may contract out all accounting and financial operations. insurance underwriters. Even in these cases. 5. commodities. Related occupations Financial managers combine formal education with experience in one or more areas of finance. securities. experienced financial managers who display a strong grasp of the operations of various departments within their organization are prime candidates for promotion to top management positions. As a result. and real estate brokers and sales agents. financial managers may be needed to oversee the contracts.operations increasingly are affected by the global economy. Proficiency in a foreign language also may be important. Because financial management is critical for efficient business operations. such as asset management. forecasting earnings.

4. To determine the Profitability. To understand the liquidity. 3. profitability and efficiency positions of the company during the study period.NEED FOR THE STUDY The study has great significance and provides benefits to various parties whom directly or indirectly interact with the company. To analyze the capital structure of the company with the help of Leverage ratio. 2. leverage. To check the return on equity and return on capital employed of Andritz 6. To evaluate and analyze various facts of the financial performance of the company. The main objectives of resent study aimed as: To evaluate the performance of the company by using ratios as a yardstick to measure the efficiency of the company. OBJECTIVES The major objectives of the resent study are to know about financial strengths and weakness of ANDRITZ through FINANCIAL RATIO ANALYSIS. The investors who are interested in investing in the company‘s shares will also get benefited by going through the study and can easily take a decision whether to invest or not to invest in the company‘s shares. To derive findings. activity and profitability. OBJECTIVES 1. The study is also beneficial to employees and offers motivation by showing how actively they are contributing for company‘s growth. . Liquidity Ratios for know about liquidity of the company. To offer appropriate suggestions for the better performance of the organization 5. It is beneficial to management of the company by providing crystal clear picture regarding important aspects like liquidity. To study the present financial system at Andritz. conclusions and means to improve various ratios. To make comparisons between the ratios during different periods.

It gives information to the taxation authorities. financial soundness and growth of that company. To get a view about the business happiness. The present study covers a period of years from 2005 –2010. Current year's ratios are compared with those of previous years and if some weak spots are thus located remedial measures are taken to correct them. SIGNIFICANCE OF THE STUDY It is useful for the management. It gives information to the financial institution for providing the finance to the company. efficiency . The present study has been undertaken to analyze the Ratio analysis is being managed in the company and how far it contributes to the overall objective of maximization of shareholders wealth and the organization wealth. It gives information to the investors about the earning capacity of the business. . With the help of Ratio Analysis comparison of profitability and Financial soundness can be made between one firm and another. the past data of some year relating to the problem are studied and trend is determined.SCOPE OF THE STUDY It become quite difficult rather impossible to make judgment about the position of any business by way of analyzing the financial statements of one year. A large period may prove inconvenient while a short period would not give desired results. It gives information to the researchers for conducting research in respect of profitability . A period of five years is to be considered to be the optimum one.

. This industrial training project gives the pre idea about planning of the industries and deals with various field of industry.The work which has been planned is done by the help of co . After planning.Review PROJECT: AN OVERVIEW Managerial persons have vital role in this new management era. by this we can improve our quality of estimation. It's each word or letter has it own meaning.assigned project's subject. Meaning of PROJECT: . It means that the effort of jointing to all these procedures which come in the work is known as joint effort.It is way of performing different type of works in a systematic way of procedure. execution. P : Planning :. J: Joint efforts: . we should fully aware about the meaning of project.The work project has generate significance role in the field of management.In planning stage all the aspect has regards to types of work to be carried out is taken into consideration estimate with full details of requirement cost and probable activity of the project is prepared. It is essentially required for management work as detailed scene in order to give the practical form of work as indicated.operation of labor.As per estimate man and material are arranged and work is organized according to the time schedule. Before starting the project.These are guided to promote the function of a plan from which the way problem will be solved and the matter will be select. In general words ―Project is scheme of work to be completed within stimulated time by an adequate man & machine‖ complete or proper information can be grasp by trainee on the pre . By this project persons get the opportunity to face the problems that will come ahead in his path. O: Organization: . E: Execution / Engineering junction: . Industry's growth is depend upon these managerial personnel‘s because the production field is depend upon these personnel‘s. Before making the project planning of requirement is necessary. R: Resources: . completion and evaluation are the future process of the project.

The general form of conclusion. while still allowing for a safety margin above the required amount needed to pay current obligations. When all the activity is completed. the project is a systematic consideration discussed and proposed on a particular subject.Each of the activity in accordance with the plan is completed. In general form of conclusion. As the matter of fact project is the work which used for construction purpose before work planned and performed. C: Construction: . The paper states that the current ratio measures the ability of the firm to pay is current bills.The technique of working with due to co-operation of working project and then controlled the body.This tells about the phenomenon of construction which is the most essential for doing the work. Hence the project is an engineering junction. OR Co-operation:. to do this working better way to find out the better result. In my project topic ―ratio analysis‖ various research has been held The reviews of these researches are as follows: 1.A well educated engineer which is related. the project is systematic and consideration subject. the project as whole is considered to be completed. . Academon 2006 has analyzed in his article ratio Analysis is an early warning indicator that enables the business owner and manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. watching especially for any unfavorable trends that may be starting. T: Technique: . The author relates that Ratio Analysis is done by comparing the specific company's ratios with the average of similar businesses and comparing the business's own ratios for several successive years.

growth in size and. Ross1986 has analysed in his research the results of an investigation into the financial structure of accounting variables and ratios of New Zealand listed firms. Seven major factors were identified and these accounted for more than 82 percent of the information contained in a set of forty-four variables.T.. Although the first five factors have also been identified as separate corporate dimensions in studies conducted in the United States and elsewhere. Ferner. or in the number of observations which affect statistical power of the tests used. variables representing growth have not been examined before. Academon 2006 has focuses on two large retailers in the area of retail home improvements. size. and compares and contrasts their financial ratios in a five-year trend table along with the most recent industry averages. solvency. Financial Ratios Used Home Depot Lowes Efficiency Ratio Analysis Liquidity Ratio Analysis Leverage Analysis Profitability Analysis. while the majority of the individuals favored the more accurate subtractive model. Hamilton. 3. 4. Mear. growth in profits-profitability. liquidity. Lowes and Home Depot.2. activity. These factors are labeled profitability. Our study suggests that the growth variables represent two distinct and significant factors. Ramadhar 1996 has analyzed in his study the Group and individual decisions on what is fair allocation differ. Group analyses favored the ratio model.1987 has analyzed in his study is Multiple discriminant analysis is applied to financial ratios of New Zealand listed companies and a model developed which exhibits better classification ability than other New Zealand-based models. These results show the need for an . The discrepancy may be due to the differences in the models per se. Culture and age also inform decision making discrepancies at both group and individual levels. R. Firth. The information presented in this report can be used to help determine the over-all financial status of these two companies. D.G. Singh. Michael. The predictive ability of the New Zealand model is tested on a hold-out sample of listed companies and performs reasonably well for predictions close to the point of failure. 5.

A generalized partial adjustment-adaptive expectations model is proposed. Taffler. High cost penalties such as immediate loan repayment or conversion to an on-demand loan were imposed on borrowers that violate these covenants. The study also showed that disclosed voluntary accounting policy changes to produce favorable financial statements were not acted on by the lenders in 60% of cases. Other lenders renegotiate the contracts with temporary waiver of the breach if the borrower constantly communicates with the bank. Empirical results gained from this study. Mills. The survey showed that at least two-thirds of loans exceeding one billion pounds sterling were covered by financial ratio covenants. Results indicate that target ratio adjustment is not instantaneous. Roger 1993 has analyzed in his study the extent to which financial ratio covenants are used and lenders' reactions to covenant violations and potential violations were surveyed among 50 UK banks. P. Wu. however. The model incorporates the endurance of industry averages changes into the financial ratio adjustment process.. 6.. Chunchi 1988 has analyzed is offered of financial ratio adjustment processes when there is expensive adjustment and uncertainty about information. R. a condition that could be satisfied if the ratio's numerator and denominator are proportional. 7. The model is designed to characterize financial adjustment processes that are dynamic. The Gauss-Newton non-linear regression technique is employed to estimate the generalized model's structural boundaries.S.alternative approach to predict decision making strategies regarding allocations and the role of the individual allocator. This financial tool was designed to control firm size. Cheng F. Sudarsanam. 1995 has analyzed in his study of 500 firms belonging to six different industries in the UK was undertaken to find out the effectiveness of the use of financial ratio analysis in achieving its desired results. Contract renegotiations may involve helping secure the lender's position or ensuring retention of funds within the company by dividend capital spending restrictions.J. Results also suggest that differences exist in companies' ratio adjustment patterns in different industries of different sizes. . 8.

indicate that no such proportionality has been observed. industries. 9. classification of financial ratios. and time periods. distributional characteristics of financial ratios. This leaves much space for the development of a more robust theoretical basis and for further empirical research. while financing ratios relate to gearing. The methods that companies use to compile their accounting data are important for successful financial analysis. The value of a brand may be included in a balance sheet. 10. Healey. a fact that should warn users of ratio analysis to exercise caution in the derivation of their conclusions. they are not necessarily stable across the different ratios. Nigel 1997 has analyzed in his study those Companies are listed on the UK stock market have to issue financial reports from which a number of ratios can be calculated. Timo Salmi and Teppo Martikainen (1994). . Performance ratios vary from one industry to another. Financial ratio analysis can be misleading on its own. The research areas reviewed are the functional form of the financial ratios. and the estimation of the internal rate of return from financial statements. has analyzed in this paper provides a critical review of the theoretical and empirical basis of four central areas of financial ratio analysis. Liquidity ratios relate to cash flow. Performance ratios include return on capital employed. It is observed that it is typical of financial ratio analysis research that there are several unexpectedly distinct lines with research traditions of their own. and stock turnover. A common feature of all the areas of financial ratio analysis research seems to be that while significant regularities can be observed.

.28 billion.700 employees worldwide. the company reported revenue of €3. The group gets its name from the district Andritz in which it is located. process technologies. ANDRITZ runs more than 150 production sites. The ANDRITZ GROUP is a global market leader for Customized plants. The service offering includes the supply of spare parts. and services for hydropower stations. Andritz employs more than 13.400 employees at 35 production and service facilities and 120 subsidiaries. manufacture of engineered wear products. Each of the ANDRITZ GROUP’s five business areas is among the global technology leaders. In 2007. for the pulp and paper industry. and other industries (solid/ liquid separation. offering full-line capabilities in all major process areas. and technical support to help customers optimize production processes and reduce overall costs. as well as service and sales companies all around the world. a gross profit of €242 million and a net profit of €193 million. The Group is headquartered in Graz. feed and biofuel). the metals industry. the Production of pulp and paper and feed and biofuels.Company profile Andritz AG is an Austrian plant engineering group headquartered in Graz. Austria and has approximately 13. Kurt stiassny (Chairman of the supervisory board) Products Turnkey equipment for hydro power plants. Austria Wolfgang Leitner (CEO). Type Industry Founded Head quarters Key people Aktiengesellschaft (WBAGANDR) Industrial processing 1852 GRAZ.

198 billion (2009) €147. industrial separation Technologies.0 120.Plants for steel production.8 million (2009) 13050(2009) Pulp and Paper.1% 20. Feed and Biofuel Website www.2 2.823. Metals.5 1.4 8.6% Q1 2009 574.9 8.378.8 8.5 6.4 3.8 349.0 6. Revenue Operating income Profit Employees Divisions €3.894.5 7.com Key figures FRS.9 2.0 28.8% 100.1 million (2009) €96.693. Environment and Process.6 316.024. Hydro Power.6 25.andritz.5% 2009 1.3% .1% 23. in MEUR Order intake Order backog (as of end of period) Sales EBITDA EBITDA margin EBITA EBITA margin Q1 2010 391.

In 2000 the hydro business units of the companies SULZER HYDRO. CH Delivery of the first water turbine Sulzer acquires Escher Wyss Change of name to Sulzer Hydro .Business areas Andritz consists of 5 business areas:      Andritz Hydro Andritz Pulp and Paper Andritz Metals Andritz Feed & Biofuel Andritz Environment and Process History ANDRITZ HYDRO has more than 160 years of experience and expertise in hydraulic power generation. Zurich. The history of ANDRITZ HYDRO is based on a number of pioneers which laid the groundwork for its success: ESCHER WYSS 1805 1839 1969 1995 Foundation of Escher Wyss. which was purchased by the International ANDRITZ GROUP in 2006. VA TECH VOEST MCE and VA TECH ELIN were merged to create VA TECH HYDRO.

CH Ateliers de Construction Mécaniques de Vevey Takeover of Ateliers des Charmilles Foundation of HYDRO Vevey. 1991 Integration into VOEST-ALPINE MCE Foundation of BALDWIN Locomotive. Brazil VA TECH VOEST MCE integrated into VA TECH HYDRO Group . Vevey. USA Invention of the first Pelton waterwheel in USA First water turbine of I. including I.P. Austria License of BLH BALDWIN-LIMA-HAMILTON Acquisition of BALDWIN-LIMA-HAMILTON´s hydro sector. Philadelphia. MORRIS Manufacturing of turbine parts in Linz.MORRIS and PELTON-WATER-WHEEL Foundation of VOEST-ALPINE MCE Foundation of HYDRO VEVEY Foundation of BOUVIER HYDRO Strategic alliance with GE Canada Foundation of VA TECHNOLOGIE AG Joint Venture VAMEC.P.Roy & Cie.1999 2000 VA TECH acquires Sulzer Hydro Change of name to VA TECH ESCHER WYSS and into VA TECH HYDRO Group integration BLH / VOEST MCE 1831 1878 1903 1950 1957 1971 1989 1991 1992 1993 1994 1995 2000 VEVEY 1863 1895 1981 Foundation of Ateliers B.

CH 1981 Ateliers des CHARMILLES integrated into Vevey BOUVIER 1874 1992 Foundation of Ateliers Bouviers. Austria Change of name to ELIN AG Merger with AEG Union Split into ELIN Energieanwendung and ELIN Energieversorgung Cooperation with GE USA Strategic alliance with GE Canada Foundation of VA TECHNOLOGIE AG Joint Venture Crompton Greaves Joint Venture with ENERG Brazil VA TECH ELIN integrated into the VA TECH HYDRO Group . Integration into VOESTALPINE MCE ELIN 1892 1922 1959 1989 1991 1993 1994 1997 1999 2000 SAT Automation 1973 1985 Foundation of Schrack Automatisierungstechnik GmbH Change of name to SAT Systeme fur Automatisierungstechnik Foundation of Pichlerwerke in Weiz. Genf. Grenoble. F Foundation of BOUVIER HYDRO.CHARMILLES 1918 Foundation of Ateliers des CHARMILLES.

and turbo generators – and services for new hydropower stations as well as for modernizations of existing hydropower stations. and certain other industry. turbines. Mission:We want our market partners to recognize us as the number one company when it comes to hydro power generation Quality We lead the industry by continuous important of our products and process Shareholder We strive for optimum utilization of resources to exceed industry standards of profitability Employees We shall become the most preferred employer in our industry Andritz hydro Electromechanical systems – in particular. pumps for the pulp and paper industry and for other applications (drinking water supply. Protection) with VA TECH Reyrolle Protection Participation of VA TECH HYDRO at VA TECH SAT (50%) Vision World market leader for plants. and services for hydropower stations. process technologies.GmbH 1988-1997 2000 2001 Foundation of Subsidiaries in several countries Business Unit ACP (Austomation. the metals industry.). for the pulp and paper industry. The Hydro Power business area was renamed ANDRITZ HYDRO as of January 1. hydropower generators. etc. Control. 2009 .

the rising demand for peak electricity as well as the capacity increases in wind energy has led to additional investments in pumped storage power stations in order to secure stability of the European electric grid. the Federal Reserve Board (FED) indicated that interest rates will remain at the present low level for the foreseeable future. there are many new hydropower projects in the development and realization phase in order to meet the rising demand for energy in these rapidly growing economic regions in the long term. the economic environment continued to stabilize in the main economic regions of the world. however. The main concern focused on the considerable national debt in single countries and the resulting uncertainty regarding their ability to meet their solvency. Due to the unchanged difficult situation in the labor market. the economy recovered further during the reporting period. private consumption (which is the largest contributor to the US gross domestic product) remained subdued. placed a further burden on economic recovery. the number of projects realized was significantly lower than in the previous year. but was more modest than in the USA in most of the member countries due to subdued consumer spending. In Europe.Recent trends of the company Market development During the first quarter of 2010. with over 10% unemployment. As a result. In South America and Asia (especially in India). there are a number of projects for modernization. High unemployment in most EU member states. As a result of the high average age of hydropower plants in Europe and North America. project activity for hydropower plant equipment remained high in the main markets served by ANDRITZ. In China. as well as government programs initiated to consolidate and reduce budget deficits. General economic conditions During the first quarter of 2010. this was mostly driven by investments related to the government‘s incentive program as well as inventory re-stocking in most industries. In Europe. In the USA. rehabilitation. and capacity increases at existing plants. the economic recovery continued in the first quarter of 2010. Project activity continued to be high for irrigation and drinking water pumps in Asia (mainly in the Middle East and India) and for standard water pumps during the reporting period. .

316. 70.0 MEUR in Q1 2010 vs. 135. Economic activities in China were supported by the stimulus program implemented by the Chinese government.The economies in Asia and in other large emerging regions continued their solid development during the reporting period. there is no guarantee that the monitoring and risk control systems are sufficiently effective. The global financial and economic crisis may also necessitate complete or partial impairments of single goodwill created in the course of acquisitions if the business development goals cannot be .3 MEUR during the first quarter of 2010. and whether adequate sales proceeds are realized from the high order backlog.3% compared to the first quarter of 2009 (790.6 MEUR in Q1 2009).0 MEUR in Q1 2009) and the ENVIRONMENT & PROCESS (55. The essential risks for the business development of the ANDRITZ GROUP in 2010 relate above all to: the Group‘s dependence on the general economic development and the development of the industries it serves. Cancellations of existing contracts could adversely affect the ANDRITZ GROUP‘s order backlog. While sales in the HYDRO business area rose compared to last year‘s reference period (349.0 MEUR in Q1 2010 vs.7 MEUR in Q1 2010 vs. thus decreasing by 7.1 MEUR). sales in the other business areas saw a decline. if necessary. whether major orders are received and the risks they entail. In particular. However. Sales Sales of the ANDRITZ GROUP amounted to 732. The global economic weakness may lead to further delays in the execution of existing orders and to the postponement or cancellation of projects. Japan and most South American countries also developed favorably during the first quarter of 2010. sales in the METALS (78. as well as by rising export figures.8 MEUR in Q1 2009) business areas dropped significantly compared to the previous year Major risks during the remaining months of the financial year and risk management The ANDRITZ GROUP has a long-established Group-wide risk management system whose goal is to identify nascent risks early and to take countermeasures. The persistent financial crisis and substantial economic slowdown in the main economic regions of the world also constitute a serious risk for the ANDRITZ GROUP‘s financial development during the 2010 business year. This is an important element of active risk management within the Group. which would in turn have a negative impact on utilization of the Group‘s manufacturing capacities.

Effects from exchange rates Changes in exchange rates are hedged by forward rate contracts. as well as by customers. in particular forward exchange contracts and swaps.reached. the financial market crisis and its effects have led to unfavorable price developments for various securities in which the Group has invested (e. The Group avoids dependence on one single or only a few banks. The crisis has also heightened the risk of default by some issuers of securities. the Group has sufficient liquidity reserves and secures access to liquidity. guarantees. Net currency exposure of orders in foreign currencies (mainly US dollar. However. Cash is largely invested in low-risk financial assets. the risk of payment failure by customers is mitigated by means of bank guarantees and export insurance. no bank will receive more than a certain defined amount of the business in any important product (cash and cash equivalents. and derivatives). governmentguaranteed bonds. see the ANDRITZ annual financial report 2009. there is always some risk that partial or full provisions will have to be made for some trade accounts receivable. and Swiss franc) is hedged by forward contracts. this would have a considerable negative influence on earnings development and shareholders‘ equity of the ANDRITZ GROUP. Risks related to deliveries to countries with medium to high political risks typically are also insured to a large extent. financial liabilities. or term deposits. In addition. financial assets. if one or more banks were to become insolvent.g. Interest and exchange rate risks are minimized and controlled by derivative financial instruments. The ANDRITZ GROUP‘s position in terms of liquidity is very good. For the majority of orders. . Canadian dollar. money market funds. Cash flow risks are monitored via monthly cash flow reports. To ensure independence. but individual payment failures can have a substantial negative impact on earnings development of the Group. bonds). such as government bonds. or made them nontradable. For further information on the major risks for the ANDRITZ GROUP. This may influence the earnings development of the ANDRITZ GROUP. Nevertheless. investment funds to cover pension obligations. This could have an adverse effect on the ANDRITZ GROUP‘s financial result or shareholders‘ equity due to necessary depreciation or value adjustments.

As a result. The ENVIRONMENT & PROCESS and the FEED & BIOFUEL business areas should also see satisfactory development. 2010 The status of the global economy and the financial markets did not change substantially in the period between the date of the balance sheet and publication of this report. the ANDRITZ GROUP expects sales in 2010 to remain unchanged or slightly up compared to the full year of 2009. Status report On the basis of these expectations and the order backlog of more than 4. the condensed interim financial statements of the ANDRITZ GROUP drawn up in compliance with the applicable accounting standards provide a true and fair view of the asset. Declaration pursuant to Article 87 (1) of the (Austrian) Stock Exchange Act We hereby confirm that. and that the status report for the first quarter of 2010 provides a true and fair view of . the expectations of the ANDRITZ GROUP for its economic development in the coming quarters have not changed. there may be further need for restructuring that will affect the 2010 earnings development accordingly. and earnings positions of the ANDRITZ GROUP. a substantial economic recovery is not expected for 2010. Outlook According to recent forecasts by leading economic experts. however.Information pursuant to Article 87 (4) of the (Austrian) Stock Exchange Act During the first quarter of 2010. Based on the prevailing economic environment and the current project activity in those markets that are relevant for ANDRITZ‘s business. a negative impact can be expected on the future development of sales and earnings of the ANDRITZ GROUP. the global economy weakens again in 2010. no major business transactions were conducted with related persons and companies. Significant events after March 31. however.7 billion EUR at the end of March 2010. financial. Moderate project activity is expected to continue in the PULP & PAPER and the METALS business areas. Continuing positive market development is expected for the HYDRO business area in the coming months. the economic situation in the relevant regions is expected to stabilize further over the next few months. If. to the best of our knowledge. Cost savings resulting from the restructuring measures initiated in 2009 should have a positive impact on the net income.

Graz.the asset. and also with regard to the major business transactions subject to disclosure and concluded with related persons and companies. CEO)09 Franz Hofmann Karl Hornhofer Humbert Köfler Friedrich Papst . and with regard to the major risks and uncertainties during the remaining nine months of the financial year. May 7. 2010 The Executive Board of ANDRITZ AG Wolfgang Leitner (President. financial. and earnings positions of the ANDRITZ GROUP with regard to the important events of the first three months of the financial year and their impact on the condensed interim financial statements of the ANDRITZ GROUP.

‘2009 will be difficult –but we are well positioned for 2009’ The 2008 financial year was characterized by the global economic and financial crisis. mainly PULP & PAPER and METALS. in particular. thus. President & CEO of ANDRITZ AG. to have a negative influence on the development of the real economy. In the PULP & PAPER and METALS business areas. if not longer. order intake developed very favorably. Wolfgang Leitner. Especially in the HYDRO business area. The other business areas have not. It is very difficult to predict how business will develop during the coming months and the full year 2009. Experts expect the effects of this crisis to become even more heavily felt by most industries in the course of 2009 and. the expectations and strategies of the ANDRITZ GROUP for 2009. as well as the successes achieved during the year 2008. been affected by the economic slump. discusses the effects of the global financial and economic crisis. The other ANDRITZ . and the world‘s large economic regions have either already slipped into recession or are seeing a clear slow-down of their economic growth. where we have experienced delays in order awards and order execution on the customer side. The global economy is continuing to cool off. and there have been no delays in order execution either. which has impacted practically all areas of the real economy. or only partially. We are prepared for significant decreases in project activity in one business area or the other. investments are likely to remain at a low level during the first half of 2009. What are the effects of this crisis on ANDRITZ? Wolfgang Leitner (president & CEO) The effects of the worldwide economic slowdown have indeed been strongly felt during the past few months by some of our business areas.

I would also like to stress the very good development of the pumps business. a company with a very good reputation in the industry. We were able to continue our growth both through organic expansion and further important acquisitions. We are watching the economic development very closely and will immediately take further measures if necessary. KG. What were the essential developments of ANDRITZ in 2008? Despite the heavy economic turmoil we can be satisfied with the development during the 2008 business year. In the PULP & PAPER area. including the affiliates in Slovakia and China. and we have further strengthened our competitive position in the rapidly growing hydropower market by acquiring General Electric‘s hydropower activities. create added value for the ANDRITZ GROUP. and to consolidate our market position in many areas. which became a member of the ANDRITZ GROUP in March 2008. With an order intake of more than 150 million Euros and very good profitability.business areas should be less affected by the economic weakness. in general. Germany. where 2008 has been another record year. 2009 will be difficult – but. Düren. we acquired major assets of Andreas Kufferath GmbH & Co. We must continuously look for opportunities to become yet more competitive by introducing structural and operative measures – several operative measures were taken in 2008 already to adjust ANDRITZ to the changes in the general economic situation. thus considerably extending our product portfolio in the services area by paper machine fabrics. the company. Many industries have been impacted by the global financial and economic crisis already in 2008. has developed better than expected. In the METALS area. It has considerably extended our product portfolio for furnaces for the steel and copper industry. we have purchased ANDRITZ Maerz. Only quick integration into the existing ANDRITZ organization will allow utilization of existing synergies and. . What are the goals and strategies for 2009? The main goal is the rapid and successful integration of the newly acquired companies. I believe we are well-positioned to cope with the effects of the financial and economic criss. In particular. thus. we achieved a very positive order intake development in the HYDRO business area.

I would like to thank all employees of the ANDRITZ GROUP for their outstanding performance in 2008. Brazil. . Thus. We were able to continue our growth both through organic expansion and further important acquisitions. Global care and economic crisis do not contradict each other’ Andritz hydro acquires hydro Power activities from general electric In 2008. we will not be able to stand our ground and retain our good market position in an environment that has become even more competitive than before due to the current financial and economic crisis. Unless we execute all orders to the full satisfaction of our customers. On behalf of the Executive Board. despite the global economic weakness.ANDRITZ is prepared for a comparatively rapid recovery of the global economy beginning in 2009 – but also for a continuation of the recession beyond 2009. Sweden. Finland. Another important goal for 2009 is to process the high order backlog – especially in the HYDRO and METALS areas – according to schedule and in conformity with the customer requirements. and shareholders for the confidence placed in us in 2008. ANDRITZ HYDRO took over hydropower activities from General Electric (GE) with 400 employees in Canada. ANDRITZHYDRO has been able to further strengthen its position as a globally leading supplier of hydropower equipment. Great Britain. and to consolidate our market position in many areas.We will continue to investigate potential acquisitions in 2009 to further enhance our product and technology portfolio through the purchase of complementary companies. Our high cash position provides us with the necessary funds to be able to continue our external growth strategy. and China. We will continue to do our utmost in 2009 and in the future to promote the success of ANDRITZ in the best possible way. and all customers. business partners.

Treasury .Executive Board President and CEO Wolfgang Leitner Joined ANDRITZ in 1987 as CFO and has served as President and CEO since 1994. Information Technology. Controlling and Finance. as well as Organization and Business Process Development. Professional career: member of the Managing Board of AGIV AG founder and president of GENERICON Pharma GmbH Management consultant at McKinsey & Company Research chemist at Vianova/HOECHST. Investor Relations .His responsibilities encompass central Group functions such as Human Resources Management. Corporate Communications. Internal Auditing. Pulp & paper (service & units) Humbert Köfler Head of the Paper Mill Services division at ANDRITZ AG Head of the Mechanical Pulping Systems division at ANDRITZ AG Regional sales manager at ANDRITZ Sprout-Bauer GmbH Export marketing manager at Biochemie GmbH. Pulp & paper (capital systems) Karl Hornhofer Head of the Pulp and Paper Machines division at ANDRITZ AG Head of the Pulp Drying Systems division at ANDRITZ AG Design engineer at Austrian Energy. .

. and Stahl.m. Christian Nowotny Full-time professor at the University of Economics in Vienna. Klaus Ritter President & CEO of AVI Alpenländische Veredelungs Industry Ges.H.H.H. Kurt Stiassny (Chairman of the Supervisory Board) Chief Executive Officer of Buy-Out Central Europe II Beteiligungs-Invest AG. .b.m. deputy chairman of the Supervisory Board of ANDRITZ AG since 2004.Hydro.und Walzwerk Marienhütte Ges. chairman of the Supervisory Board of ANDRITZ AG since 1999 and elected until the Annual General Meeting of ANDRITZ AG in 2010. Peter Mitterbauer Chairman of the Managing Board of MIBA AG.b. member of the Supervisory Board of ANDRITZ AG since 2000 and elected until the Annual General Meeting of ANDRITZ AG in 2009. member of the Supervisory Board of ANDRITZ AG since 1999 and elected until the Annual General Meeting of ANDRITZ AG in 2013.b. Director of Manufacturing at ANDRITZ AG Director of Production Planning at ANDRITZ AG. Hellwig Torggler (Deputy Chairman of the Supervisory Board) Attorney-at-law.Bauer Inc. member of the Supervisory Board of ANDRITZ AG since 2004 and elected until the Annual General Meeting of ANDRITZ AG in 2012. member of the Supervisory Board of ANDRITZ AG since 2003 and elected until the Annual General Meeting of ANDRITZ AG in 2010. EVG Entwicklungsund Verwertungs-Gesellschaft m. feed & biofuel Friedrich Papst Vice President of ANDRITZ Sprout..

Frowing Importance of Environment Protection Opportunity . member of the Supervisory Board of ANDRITZ AG since 2006 and elected until the Annual General Meeting of ANDRITZ AG in 2011.Legal Proceedings Andritz AG .Strengths Strength .Opportunities Opportunity .Diversified Operations Strength .Global Presence Strength .Declining Operating Margin Weakness .Fritz Oberlerchner Deputy chairman of the Managing Board of STRABAG SE.Unfavorable Business Environment Threat .Higher Growth Prospects in Hydro Power Sector Andritz AG .Strong Growth in Revenues Andritz AG – Weaknesses Weakness . SWOT Analysis of Andritz Hydro Andritz AG .Strategic Acquisitions Opportunity .Threats Threat .Volatility of Incoming Orders Threat .Efficient Use of Resources Strength .Intense Competition .

Research Design is the arrangement of conditions for the collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. Redman & Mory defines research as ―systematized effort to gain new knowledge.In project sample size 1 company i. Sample size:.METHODOLOGY Research Methodology is a way to systematically solve the research problem. The main characteristic of this method is that the researcher has no control over the variables.‖ RESEACH DESIGN: Research Design is the way in which the research is carried out. It can also be defined as a scientific and systematic search for pertinent information on a specific topic. The degree and nature of the limitation varies with the topic. In fact. It works as a blue print. The present study has been undertaken to analyze the Ratio analysis is being managed in the company and how far it contributes to the overall objective of maximization of shareholders wealth and the organization wealth. he can only report what has happened or what is happening. It become quite difficult rather impossible to make judgment about the position of any business by way of analyzing the financial statements of one year. The present project is descriptive in nature. step-by-step methods are followed to solve a particular problem.e. It refers to a search for knowledge. The major purpose of descriptive research is the description of state of affairs. research is an art of scientific investigation. Andritz hydro pvt ltd PROBLEM RECOGNITION:Any type of research study suffers from certain limitation relating to either the research itself or to the topic thought. as it exists at present. To know the financial position of the company through various ratios. Testing Research Design. In it. Is Andritz is able to meets its current liability against its current assets? .

which is not sufficient to carry out proper interpretation and analysis. 3. Secondary Data: Secondary Data are those data which are already collected and stored and which has been passed through statistical research. interpretations were made. DATA COLLECTION: The data can be of two types: Primary Data Secondary Data The study is based on both primary and secondary data. The below mentioned are the constraints under which the study is carried out.The information is collected through secondary sources during the project. The study provides an insight into the financial. Most of the calculations are made on the financial statements of the company provided statements. Referring standard texts and referred books collected some of the information regarding theoretical aspects. 2. Primary Data: Primary data are those data. LIMITATIONS 1. 3. That information was utilized for calculating performance evaluation and based on that. Method. Every study will be bound with certain limitations. marketing and other aspects of ANDRITZ. The whole study was conducted in a period of 45 days. which is originally collected afresh. In this project. 2. Time is an important limitation.to assess the performance of the company method of observation of the work in finance department in followed. 4. One of the factors of the study was lack of availability of ample information. personnel. Most of the information has been kept confidential and as such as not assed as art of policy of company. . secondary data has been collected from following sources:Sources of secondary data: 1.

.5. Busy Schedule of Concerned Executives: The concerned executives were not having very busy schedule because of which they were reluctant to give appointment. 6. . Unawareness: Executives were unaware of many terms related to Financial Analysis while asking to them.

to know about the present and future profitability of the company and its financial structure. . Management. This relationship can be exposed as · Percentages · Fractions · Proportion of numbers Ratio analysis is defined as the systematic use of the ratio to interpret the financial statements. as well as its historical performance and current financial condition can be determined. in every aspect of the financial analysis. its operations and attractiveness as an investment. Financial ratio analysis is the calculation and comparison of ratios.e. liquidity position of the company.RATIO ANALYSIS FINANCIAL ANALYSIS Financial analysis is the process of identifying the financial strengths and weaknesses of the firm and establishing relationship between the items of the balance sheet and profit & loss account. to identify the firm‘s ability to meet their claims i. RATIO ANALYSIS The term ―Ratio‖ refers to the numerical and quantitative relationship between two items or variables. Ratio reflects a quantitative relationship helps to form a quantitative judgment. Investors. which are derived from the information in a company‘s financial statements. The information in the statements is used by Trade creditors. The level and historical trends of these ratios can be used to make inferences about a company‘s financial condition. It is the responsibility of the management to maintain sound financial condition in the company. So that the strengths and weaknesses of a firm.

the industry ratios to which the firm belongs to Projected ratios. of the sum most progressive and successful same point of time. ratios of the future developed from the projected or pro forma financial statements. Third step is to interpretation. To compare the calculated ratios with the ratios of the same firm relating to the pas6t or with the industry ratios. Past ratios. BASIS OR STANDARDS OF COMPARISON Ratios are relative figures reflecting the relation between variables. This is the basis of ratio analysis. They use of ratios as a tool of financial analysis involves the comparison with related facts. Competitor‘s ratio. competitor firm at the . Industry ratio. The basis of ratio analysis is of four types. It facilitates in assessing success or failure of the firm.STEPS IN RATIO ANALYSIS The first task of the financial analysis is to select the information relevant to the decision under consideration from the statements and calculates appropriate ratios. calculated from past financial statements of the firm. They enable analyst to draw conclusions regarding financial operations. drawing of inferences and report writing conclusions are drawn after comparison in the shape of report or recommended courses of action.

There are a number of ratios which can be calculated from the information given in the financial statements. The impact of factors such as price level changes.. window dressing etc.NATURE OF RATIO ANALYSIS Ratio analysis is a technique of analysis and interpretation of financial statements. It is only a means of understanding of financial strengths and weaknesses of a firm. Single absolute ratio Group of ratios Historical comparison Projected ratios Inter-firm comparison . or the ratios developed from projected financial statements or the ratios of some other firms or the comparison with ratios of the industry to which the firm belongs. Calculation of appropriate ratios from the above data. The inherent limitations of ratio analysis should be kept in mind while interpreting them. The following are the four steps involved in the ratio analysis. Selection of relevant data from the financial statements depending upon the objective of the analysis. Comparison of the calculated ratios with the ratios of the same firm in the past. change in accounting policies. should also be kept in mind when attempting to interpret ratios. The interpretation of ratios can be made in the following ways. but the analyst has to select the appropriate data and calculate only a few appropriate ratios. INTERPRETATION OF THE RATIOS The interpretation of ratios is an important factor. It is the process of establishing and interpreting various ratios for helping in making certain decisions.

GUIDELINES OR PRECAUTIONS FOR USE OF RATIOS:The calculation of ratios may not be a difficult task but their use is not easy. Following guidelines or factors may be kept in mind while interpreting various ratios is:Accuracy of financial statements Objective or purpose of analysis Selection of ratios Use of standards Caliber of the analysis IMPORTANCE OF RATIO ANALYSIS Aid to measure general efficiency Aid to measure financial solvency Aid in forecasting and planning Facilitate decision making Aid in corrective action Aid in intra-firm comparison Act as a good communication Evaluation of efficiency Effective tool LIMITATIONS OF RATIO ANALYSIS Differences in definitions Limitations of accounting records Lack of proper standards No allowances for price level changes Changes in accounting procedures Quantitative factors are ignored Limited use of single ratio Background is over looked Limited use and Personal bias .

Various accounting ratios can be classified as follows: 1.. e. stock turnover ratio. Functional Classification These include Liquidity ratios Long term solvency and Leverage ratios. the ratio of current assets to current liabilities etc. e. Profit & loss account (or) revenue statement ratios: These ratios deal with the relationship between two profit & loss account items. Traditional Classification It includes the following. Functional Classification 3. e. however. 2. both the items must.g. Significance ratios 1. . There are different parties interested in the ratio analysis for knowing the financial position of a firm for different purposes. Traditional Classification 2..CLASSIFICATIONS OF RATIOS The use of ratio analysis is not confined to financial manager only. or the ratio of total assets to sales.g. Balance sheet (or) position statement ratio: They deal with the relationship between two balance sheet items. the ratio of gross profit to sales etc. pertain to the same balance sheet. Activity ratios and Profitability ratios. Composite (or) inter statement ratios: These ratios exhibit the relation between a profit & loss account or income statement item and a balance sheet items.g.

If current assets can pay off current liabilities. The sufficiency (or) insufficiency of current assets should be assessed by comparing them with short-term current liabilities. Significance ratios Some ratios are important than others and the firm may classify them as primary and secondary ratios.3. Leverage ratio 3. which is of the prime importance to a concern. Liquidity ratio 2. then liquidity position will be satisfactory. Profitability ratio 1. Activity ratio 4. To measure the liquidity of a firm the following ratios can be calculated:Current ratio Quick (or) Acid-test (or) Liquid ratio Absolute liquid ratio (or) Cash position ratio . IN THE VIEW OF FUNCTIONAL CLASSIFICATION THE RATIOS ARE:1. The primary ratio is one. floating (or) circulating assets The current assets should either be calculated liquid (or) near liquidity. The short term obligations are met by realizing amounts from current. LIQUIDITY RATIOS Liquidity refers to the ability of a concern to meet its current obligations as & when there becomes due. The other ratios that support the primary ratio are called secondary ratios. The short term obligations of a firm can be met only when there are sufficient liquid assets. They should be convertible into cash for paying obligations of short term nature.

Quick ratio may be defined as the relationship between quick or liquid assets and current liabilities. The term liquidity refers to the ability of a firm to pay its short-term obligations as & when they become due. This ratio also known as Working capital ratio is a measure of general liquidity and is most widely used to make the analysis of a short-term financial position (or) liquidity of a firm. Current ratio = _Current assets__ Current liabilities Components of current ratio Current assets Cash in hand Cash at bank Bills receivable Inventories Work-in-progress Marketable securities Short-term investments Sundry debtors Prepaid expenses C Current liabilities Outstanding or accrued expenses Bank over draft Bills payable Short-term advances Sundry creditors Dividend payable Income-tax payable (b) QUICK RATIO Quick ratio is a test of liquidity than the current ratio. . An asset is said to be liquid if it is converted into cash within a short period without loss of value.(a) CURRENT RATIO: Current ratio may be defined as the relationship between current assets and current liabilities.

Absolute liquid ratio = Absolute liquid assets Current liabilities Absolute liquid assets include cash in hand etc. The acceptable forms for this ratio is 50% (or) 0.e. yet there may be doubts regarding their realization into cash immediately or in time.. . absolute liquid ratio should also be calculated together with current ratio and quick ratio so as to exclude even receivables from the current assets and find out the absolute liquid assets. Rs.5:1 (or) 1:2 i.1 worth absolute liquid assets are considered to pay Rs. debtors and bills receivable are generally more liquid than inventories.Quick ratio = Quick or liquid assets Current liabilities Components of quick or liquid ratio Quick assets Cash in hand Cash at bank Bills receivable Sundry debtors Marketable securities Temporary investments Current liabilities Outstanding or accrued expenses Bank over draft Bills payable Short-term advances Sundry creditors Dividend payable Income tax payable (c) ABSOLUTE LIQUID RATIO Although receivable. Hence.2 worth current liabilities in time as all the creditors are nor accepted to demand cash at the same time and then cash may also be realized from debtors and inventories.

long term solvency ratios indicate firm‘s ability to meet the fixed interest and costs and repayment schedules associated with its long term borrowings.Components of Absolute Liquid Ratio SOLUTEID ASSETS Absolute liquid assets Cash in hand Cash at bank Current liabilities Outstanding or accrued expenses Bank over draft Interest on Fixed Deposit Bills payable Short-term advances Sundry creditors Dividend payable Income tax payable CURRENT LIABILITIES 2. The following ratio serves the purpose of determining the solvency of the concern. Proprietary ratio = Shareholders funds Total assets Components of proprietary ratio Share holder’s fund Total assets Share Capital Reserves & Surplus Fixed Assets Current Assets Cash in hand & at bank . This ratio establishes relationship between shareholders funds to total assets of the firm. Accordingly. LEVERAGE RATIOS The leverage or solvency ratio refers to the ability of a concern to meet its long term obligations. Proprietary ratio (a) PROPRIETARY RATIO A variant to the debt-equity ratio is the proprietary ratio which is also known as equity ratio.

A higher ratio indicates efficient utilization of working capital and a lower ratio indicates inefficient utilization. The efficiency with which assets are managed directly affects the volume of sales. Working capital = Current assets . These ratios are also called ―Turn over ratios‖ because they indicate the speed with which assets are converted or turned over into sales.Bills receivable Inventories Marketable securities Short-term investments Sundry debtors Prepaid Expenses SHARE HOLDERS FUND TOETS 3. Working capital turnover ratio Fixed assets turnover ratio Capital turnover ratio Current assets to fixed assets ratio (a) WORKING CAPITAL TURNOVER RATIO Working capital of a concern is directly related to sales. Working capital turnover ratio= cost of goods sold Working capital . of times the working capital is turned over in the course of a year. Activity ratios measure the efficiency (or) effectiveness with which a firm manages its resources (or) assets. ACTIVITY RATIOS Funds are invested in various assets in business to make sales and earn profits. This indicates the no.Current liabilities It indicates the velocity of the utilization of net working capital.

Lower ratio means under-utilization of fixed assets. greater is the intensive utilization of fixed assets. Higher the ratio. Fixed assets turnover ratio = Cost of Sales Net fixed assets Cost of Sales = Income from Services Net Fixed Assets = Fixed Assets – Depreciation . This ratio measures the efficiency and profit earning capacity of the firm.Components of Working Capital :-CURRENT ASSETS C Current assets Cash in hand Cash at bank Bills receivable Inventories Work-in-progress Marketable securities Current liabilities Outstanding or accrued expenses Bank over draft Bills payable Short-term advances Sundry creditors Dividend payable Short-term investments Income-tax payable Sundry debtors Prepaid expenses ABILITIES (b) FIXED ASSETS TURNOVER RATIO It is also known as sales to fixed assets ratio.

If current assets increase with the corresponding increase in profit. Current Assets to Fixed Assets Ratio = Current Assets Fixed Assets . All Capital Turnovers are calculated to study the uses of various types of capital. Capital turnover ratio = Cost of goods sold Capital employed Cost of Goods Sold = Income from Services Capital Employed = Capital + Reserves & Surplus (d) CURRENT ASSETS TO FIXED ASSETS RATIO This ratio differs from industry to industry. Capital invested in the business may be classified as long-term and short-term capital or as fixed capital and working capital or Owned Capital and Loaned Capital. A decline in the ratio means that debtors and stocks are increased too much or fixed assets are more intensively used.(c) CAPITAL TURNOVER RATIOS Sometimes the efficiency and effectiveness of the operations are judged by comparing the cost of sales or sales with amount of capital invested in the business and not with assets held in the business. though in both cases the same result is expected. it will show that the business is expanding. The increase in the ratio means that trading is slack or mechanization has been used.

that drives the business enterprise. Net profit ratio Return on total assets Reserves and surplus to capital ratio Earnings per share Operating profit ratio Return on investments (a) NET PROFIT RATIO Net profit ratio establishes a relationship between net profit (after tax) and sales and indicates the efficiency of the management in manufacturing.Component of Current Assets to Fixed Assets Ratio CURRENT ASSETS FIXED Current Assets Cash in hand Cash at bank Bills receivable Inventories Work-in-progress Short-term investments Marketable securities Sundry debtors Prepaid expenses Machinery Buildings Plant Vehicles Fixed Assets S 4. PROFITABILITY RATIOS The primary objectives of business undertaking are to earn profits. Net profit ratio= Net profit after tax . Because profit is the engine. selling administrative and other activities of the firm.

Net sales

Net Profit after Tax = Net Profit (–) Depreciation (–) Interest (–) Income Tax

Net Sales = Income from Services

It also indicates the firm‘s capacity to face adverse economic conditions such as price competitors, low demand etc. Obviously higher the ratio, the better is the profitability.

(b) RETURN ON TOTAL ASSETS Profitability can be measured in terms of relationship between net profit and assets. This ratio is also known as profit-to-assets ratio. It measures the profitability of investments. The overall profitability can be known. Return on assets = Net profit Total assets

Net Profit = Earnings before Interest and Tax

Total Assets = Fixed Assets + Current Assets

(c) RESERVES AND SURPLUS TO CAPITAL RATIO It reveals the policy pursued by the company with regard to growth shares. A very high ratio indicates a conservative dividend policy and increased ploughing back to profit. Higher the ratio better will be the position.

Reserves & surplus to capital = Reserves& surplus Capital

(d) EARNINGS PER SHARE Earnings per share is a small verification of return of equity and is calculated by dividing the net profits earned by the company and those profits after taxes and preference dividend by total no. of equity shares. Earnings per share = Net profit after tax Number of Equity shares

The Earnings per share is a good measure of profitability when compared with EPS of similar other components (or) companies, it gives a view of the comparative earnings of a firm.

(e) OPERATING PROFIT RATIO Operating ratio establishes the relationship between cost of goods sold and other operating expenses on the one hand and the sales on the other.

Operation ratio = Operating cost Net sales

However 75 to 85% may be considered to be a good ratio in case of a manufacturing under taking. Operating profit ratio is calculated by dividing operating profit by sales. Operating profit = Net sales - Operating cost

Operating profit ratio = Operating profit Sales

(f) RETURN ON INVESTMENTS Return on share holder‘s investment, popularly known as Return on investments (or) return on share holders or proprietor‘s funds is the relationship between net profit (after interest and tax) and the proprietor‘s funds. Return on shareholder’s investment = Net profit (after interest and tax) Shareholder’s funds

The ratio is generally calculated as percentages by multiplying the above with 100.

Data analysis & Interpretation

Liquidity Ratio 1. Current Ratio (Amount in rupees) YEAR 2005 2006 2007 2008 2009 CURRENT ASSETS 1,562,475,862 1,723,438,572 2,502,250,930 3,530,893,480 8,288,081,862 CURRENT LIABILITIES 1,316,312,883 1,367,910,032 2,066,591,896 3,087,897,029 7,273,211,337 RATIO
1.187009473 1.259906377 1.210810385 1.143462184 1.13953541

Current assets & liabilities trend line:-

Current assets tred line
10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000 0 2005 2006 2007

Current laibilities trend line

2008

2009

Comment:- This graph represents current assets more than current liabilities because debtors
in all years 2005-2009 regular increased because my company is project based company debtors can‘t easily converted in to cash till the project is not completed. Inventories are also increased in 2007-2009. Cash &bank balance fluctuates because of purchase of raw material for project and increased when project is completed.

303.28 1.488670168 0.910.08 1.1 1.686841327 0.029 7.160 2.06 1.3687099 .024 1.2 1.098. So finally we can say that current ratio is in moderate situation.18 1. the current ratio with 2:1 (or) more is considered as satisfactory position of the firm.706775697 0.927 1.273.316.14 1.032 2125249044 3.337 Ratio 0.705.367.26 1.19 1. 2.12 1.963.837 1.087 782.26 1.Current ratio Current Ratio 1.16 1.616.24 1.681.883 1.22 1.211.21 1.460.508. In this company initially current ratio is low but next year higher in all year. QUICK RATIO: Year 2005 2006 2007 2008 2009 Quick assets 904.087.897.312.14 2005 2006 2007 2008 2009 INTREPETATION:As a rule.14 (Amount in Rs.) Current liabilities 1.571897141 0.

000. This graph represents current liabilities is more than quick assets because in project based company initially they deal a contract and send the material at project sight.000.000.000.000 0 2005 2006 2007 2008 2009 current laibilities trend line Quick assets trend line Comment:.000 10.3 0.000.000 8.5 0.49 0.000.8 0.000.7 0.000 4.000 6.In project based company the quick assets is very less (cash & bank balance. in project based company they consider sundry debtors as long term assets because of long project take long time after the completion of project debtors are turn liquid.000.57 0.Quick assets and current liabilities trends :12.6 0. sundry debtors) because of cycle of purchase of raw material through cash and it may take a long time to convert in to cash. Initially the other party can‘t pay more cash as per project so this creates more current liabilities than quick assets.69 0.000.4 0.000.37 0.1 0 2005 2006 2007 2008 2009 0.000. Quick ratio 0.000.2 0.000 2.71 .

089357598 Absolute assets & Current laibilities trend line:9.663 649.000.416.324 944.000 8.000.000.000 0 current laibilities liquid assets trend line 2005 2006 2007 2008 2009 Comment:.000.697 Current liabilities 1.636.000.211.000.000.039965325 0.969 376.000. ABOSULTE LIQUIDITY RATIO:(Amount in Rs.) Year 2005 2006 2007 2008 2009 Absolute liquid assets 138.000.668.000.113 54.910.883 1.000 6.000. .000 3. 3.312.In this graph represents less in absolute liquid assets as compare to the current laibilities in this company only cash & bank is consider as absolute liquid asset.000.000 1.367. This graph represents quick ratio in moderate situation.087.000.Interpretation:As a rule quick ratio is 1:1.30584461 0.897. Due to fluctuation in cash balance and debtors take long time converted in to cash.104927267 0.000 2.916.591.000.066.182249976 0. or Quick assets are those assets which can be converted into cash within a short period of time.000.029 7.000 4.000. say to six months.000.032 2.000 7.117.316.000.896 3.000 5.337 Ratio 0.273.

030.722.Liquid ratio:- liquid Ratio 0.849.720 186483.09 0.526 Ratio 0. In this represents liquid ratio fluctuates.1 2007 2008 2009 Interpretation:The current assets which are ready in the form of cash are considered as absolute liquid assets. the cash and bank balance are absolute liquid assets. Proprietary Ratio :(Amount in Rs.10 0.483. but in 2008 higher the liquid ratio in all years.2 0.15 0.31 0.206. Here.271901683 0. Leverage Ratio 4.) Year 2005 2006 2007 2008 2009 Share holder’s fund 186.464.493 1.054.18 0.25 0.435.720 583.35 0.28581456 0.818 744.938.05 0 2005 2006 0.3 0.483.747 Total assets 633310740 652.700716357 .046 1.032 685.04 0.720 186.783643747 0.294458483 0.

000.500.000.000 0 2005 2006 2007 2008 2009 Total assets trend share holder's fund Trend Comments: .In this graph represents company not issued share capital but also increased in assets means sales increased and company invested in purchasing assets.Share holders fund &total assets trend line:3.000.70 2009 0.000.29 2008 Interpretation:The proprietary ratio establishes the relationship between shareholders funds to total assets.000 1.1 0 2005 2006 2007 0.3 0.500.000 3. Total assets are in increasing trend share capital also increase trend but less to total assets trend. It determines the long-term solvency of the firm.6 0.000. Proprietary ratio of .9 0.000 2.27 0.29 0. This ratio indicates the extent to which the assets of the company can be lost without affecting the interest of the company.8 0.000.000.000.2 0.500.78 0.4 0.000 1.000.000.000 500.5 0. Properitary Ratio 0.000 2.7 0.

869 722.000 4.738702592 Income & working capital trend line:8.163.273503717 4. but 2009 due recession company ratio going less but still is good position.274.879 1.823 Ratio 6.345921657 10.000.000.000 0 2005 2006 2007 2008 2009 Comments: .000. ACTIVITY RATIOS 5.000 5.000. Company earns and reinvested in to future projects.000 3.000.001.000.290.) Year 2005 2006 2007 2008 2009 Income 1.000 6.825.335507187 5.000.000.36600453 8.373.759 6.909 1.000.000.644.758.000.000 Working capital trend Income trend 2. WORKING CAPITAL TURNOVER RATIO (Amount inRs.000.company is increasing trend.000 7.638.In this graph represents income trend and working capital are in increased trend It is good indication of the company.413.420.310.774.024. .685 377.872 Working capital 203657709 311.000.886 291.000.661 3.000.000.000 1.

638.310.661 3.74 2005 2006 2007 4.27 8 6 4 2 0 6.37 8.774.980 749.167.932.739.024.382202268 8. but it is good condition.872 Net fixed assets 202.474356016 10.) Year 2005 2006 2007 2008 2009 Income 1.879 1.355 172.261. FIXED ASSETS TURNOVER RATIO (Amount in Rs.759 6.373.working capital ratio is increased but in 2009 it affects by recession.909 1.140 295.35 2008 2009 Interpretation: .422654838 .926.413.644.290.420.34 10.960 Ratio 6.274. 6.Working capital ratio:- Working capital Ratio 12 10 5.853341334 9.657 185.22000008 8.

000.000.000 5.000.000.000.000.000. This ratio shows the firm‘s ability in generating sales from all financial resources committed to total assets.000.000.000 2.000.000 6. In this graph represents fixed ratio is in increasing trends but 2009 ratio is affected by recession in economy.000 1.42 .Income & net fixed assets Trend :8.000.000 0 2005 2006 2007 2008 2009 Net fixed assets Income Comments:.000.47 12 10 8 6 4 2 0 2005 6.000.38 10. But this ratio is good for the company.000.000.This graph shows income and fixed assets are in increased trends means income is further invested in acquiring fixed assets like machines.000 7.85 9.000. land etc Fixed assets Ratio 8.000 3.22 2006 2007 2008 2009 Interpretation Fixed assets are used in the business for producing the goods to be sold.000 4. 8. The ratio indicates the account of one rupee investment in fixed assets .

000 0 2005 2006 2007 2008 2009 Income trend Capital employed trend Comments: .720 186.720 186.661 3.483.918967935 8.000.909 1.483.000.206.000 3.420.638.000 2.000.000.228744945 Income & capital employed trend 7.290.000.000.872 Capital employed 186.000 5.785864316 5.000 6.938. This company‘s income and financial position is very good.720 583.024. .747 Ratio 6.187120235 5.493 1.310.818002499 8.644.000.483.7.000 4.000.054. In this shows capital employed is almost constant but income is increase at very high rate.274.000.774.373.000.413.000.879 1.759 6.) Year 2005 2006 2007 2008 2009 Income 1.000.In this graph represents capital employed trend it is a combination of share capital and reserve and surplus and income trend. CAPITAL TURNOVER RATIO (Amount in Rs.000 1.000.000.

469.930 3.669 531.512.) Year 2005 2006 2007 2008 2009 Current assets 1.060 368.362 1. CURRENT ASSETS TO FIXED ASSETS RATIO (Amount in Rs. The company no needs to issue share capital and its reserve.572 2.081.79 2005 2006 2007 2008 5.Capital turnover Ratio 8.601031775 6.250. It earns more and more income through sales without issue share capital and reserves.438.502.893.288.532.496 Ratio 4.19 2009 Interpretation:This is another ratio to judge the efficiency and effectiveness of the company like profitability ratio. 8.862 Fixed assets 358.906.853 379.643106976 7.92 8.480 8.677285151 6.723.82 10 9 8 7 6 5 4 3 2 1 0 6.23 .051.879105123 5.862 1. In this graph shows the capital turnover ratio initially increase but after 2007 it was decreasing.562.530.357980879 4.069.475.

000.000. The company saves its assets in recession time also and makes a good structure or position of the company.000 8.This graph shows increasing the current assets and fixed assets ratio is good for the company.36 4.000.68 6 6.60 6.000 3. It shows sound financial position of the company.000.000.000 7.88 2005 2006 2007 2008 2009 1 0 Interpretation:.000. CURRENT ASSETS TO FIXED ASSETS RATIO current assets & fixed assets ratio 9 7 5 4 3 2 4.000 4. .000.In this graph represents current assets more than its fixed assets it is good for the company because in short run current assets is more to pay the day-day expenses so it is good for the company and its financial position of the company.000.000 6.000.Current assets & fixed assets trends:9.000.000.000.000.000.000 0 current assets trend fixed assets trend 2005 2006 2007 2008 2009 Comments:.000 2.000 1.000 5.000.64 8 7.000.000.000.

373.420.000 6.000 5. in this graph represents income increasing at very high rate as comparison of profit.310.334 257.909 1.000.759 6.000.065473709 Profit after tax &income trend:7.In this graph represents income is more than its profit of the company because of tax depreciation etc.703) 48.029279391 0.752 413.000.000 2005 2006 2007 2008 2009 Comments: .026411196 0.879 1.000.000.642.189.000.386.000.000.000 profit after tax trend income trend 2.000.638.024.000.000 1.000 0 -1.000. .000.839 Income 1.085104148 0.437 43.274.000.026636831 0.PROFITABILITY RATIOS GENERAL PROFITABILITY RATIOS 9.000.000.000.290.147.872 Ratio -0.661 3.077.644.000 4.000 3. NET PROFIT RATIO (Amount in rupees) Year 2005 2006 2007 2008 2009 Net profit after tax (34.774.413.

234 5.809) 70.03 0.872 Ratio -0. High net profit ratio will help the firm service in the fall of income from services.02 0 -0. rise in cost of production or declining demand.1 0.637 392.02 -0.12963551 0.879 1.651. OPERATING PROFIT RATIO (Amount in rupees) Year 2005 2006 2007 2008 2009 Operating profit (25.661 3.07 Interpretation:The net profit ratio is the overall measure of the firm‘s ability to turn each rupee of income from services in net profit. This graph shows initially decline but company profit in 2006 -2007 constant after in will be increased.NET PROFIT RATIO Net profit ratio 0.03 0.042 Income 1. 10. If the net margin is inadequate the firm will fail to achieve return on shareholder‘s funds.534.413.774.310.399 64. But 2009 it was decreased due recession.06 0.04 2005 -0.290.909 1.09 0.373.274.299.03938832 0.759 6.03 2006 2007 2008 2009 0.420.233.066.04 0.08 0.638.644.042750428 0.247.019567775 0.895489565 .024.

000 2005 2006 2007 2008 2009 operating profit trend income trend Comments:-In this graph represents income trend and operating profit(sales – operating cost).000 6.000. In this graph represents operating profit ratio is .2 0 2005 -0.000. Depending on the concept. In this company performance is good.6 0.2 -0.000 0 -1.000 5.000.000.8 0.04 0.000.000. it will decide.02 2006 2007 2008 2009 0.000.000.000.000 2.000.13 0.000 1. Operating profit ratio:- operating profit ratio 1 0.000.000.000 4.000.90 Interpretation:The operating profit ratio is used to measure the relationship between net profits and sales of a firm.Operating profit & income trend:7.000.000.04 0.000 3. In this graph income is increase and operating profit is also increasing rate but less to the income.000.4 0.

000 1.334 257.345935965 0.000.077. .000 1.437 43.increasing trend means it is good for the company.000 Net profit trends Total assets trends 2005 2006 2007 2008 2009 Comments:- In this graph represents total assets is more than is profits.740 652.752 413.400.000.386.000.000.464.046 1.600.849.147.818 744. and 2006-2008 not more improve in this ratio but 2009 it was achieve highest level in all years because company involved in various profitable project. 11.800.032 685.000.435.000.073793243 0.642.703) 48.063632493 0.000.000 400.053808819 0. Initially operating profit ratio decline.200.000 0 -200.000 800.000.000.189.839 Total assets 633. Company focus in accquiring as much more assets for future projects.000.000 200.310.000.000 600. RETURN ON TOTAL ASSETS RATIO Year 2005 2006 2007 2008 2009 Net profit after tax (34.000 1.030.526 Ratio -0.000.000 1.000.23988697 Net profit & total assets trends:2.722.000 1.

080 398. The ratio indicates the return on total assets in the form of profits.147153942 -0. In this graph represents return to total assets is very good position.35 0.35 0.05 .080 165.794062334 7.640 21. RESERVES & SURPLUS TO CAPITAL RATIO (Amount in rupees) Year 2005 2006 2007 2008 2009 Reserve & surplus 165.028.25 0.1 2005 2006 0.054.278. 12.493 915.200 Ratio 7.640 185.05 0 -0.000 291.640 21.000.547 Capital 21.151645908 3.080 165.24 0.205.794062334 7.4 0. Initially the ratio is decline but after it was fluctuates and in 2008 increased but 2009 it was decreased due to recession in economy.205.278.07 2007 0.910.06 2008 2009 Interpretation This is the ratio between net profit and total assets.2 0. The return is good as per standards.1 0.15 0.3 0.278.Return to total assets ratio:- RETURN ON TOTAL ASSETS RATIO 0.05 -0.205.794062334 2.

000.79 2005 2006 2007 2008 2.000.000 800.000 400.000 900.000 600. Initially the ratio is very high but in 2008.000 reserve & surplus trends capital trends 100.000.000.In this represents reserve of the company increased but the share capital not much high as compare to the reserve .15 .000 0 2005 2006 2007 2008 2009 Comments:.000 300.79 9 8 7 6 5 4 3 2 1 0 7.79 7.000.000.Reserve & surplus trends:1.000 200.000.15 2009 Interpretation:The ratio is used to reveal the policy pursued by the company a very high ratio indicates a conservative dividend policy and vice-versa.000.2009 it is less because of recession company used it reserves.000 700.000. It will beneficial to company for future contigencies. It is good for the company or good financial position of the company.000.Higher the ratio better will be the position. 3.000 500.000. RESERVES & SURPLUS TO CAPITAL Ratio 7.

077.028.000.7050148 20.120.120.000.564 2.000.000.437 43.000 2005 2006 2007 2008 2009 Comments:. .000 Net profit after tax No of shares 100.564 18.000 150.000.000 400.07011295 22.000 250.OVERALL PROFITABILITY RATIOS 13.000.000 50.58053141 13.839 No of shares 2.000.386.000 300.91279741 14.642.000.19758769 Net profit after tax & no of shares trends:450.000. EARNINGS PER SHARE (Amount in rupees) Year 2005 2006 2007 2008 2009 Net profit after tax (34.000 291.120.703) 48.000 200.334 257.000 0 -50.In this graph shows net profit after tax is increasing trend and the number of share is not much high it means company not issued share capital but profit always increased through its profitable project.000 350.000.20 Ratio -16.000 -100.189.564 2.147.752 413.000.500.

342345326 .71 EARNINGS PER SHARE RATIO 25 20 15 10 5 0 -5 -10 -16.703) 48.493 1.441445448 0.437 43. After charging depreciation and after payment of tax.938.20 Interpretation:Earnings per share ratio are used to find out the return that the shareholder‘s earn from their shares.258185739 0.334 257.07 -15 -20 2005 2006 2007 2008 2009 20.720 186.91 14.752 413. RETURN ON INVESTMENT (Amount in rupees) Year 2005 2006 2007 2008 2009 Net profit after tax (34.Earnings per share ratio:22.147.054.747 Ratio -0. the remaining amount will be distributed by all the shareholders.483.483.206.642. 14.18273822 0.839 Shareholder’s fund 186.234027582 0.386.720 583.58 13.720 186483.189.077.

5 0.000 1.000.000.2 0.23 2009 -0.000.In this graph shows initially company invested in project so it shows loss in 2005.1 0 -0.000.000.2 -0.26 0.000 800.34 .000.3 2005 2006 2007 2008 0.000 200.Net profit after tax & Shareholder’s fund Trends:1.000.44 0.000 2005 2006 2007 2008 2009 Net profit after tax Shareholder’s fund Comments:.1 -0.000 0 -200.000.000 400.000 1.400.but after that profit increased but less to share holder‘s fund Return on investment ratio:- Return on investment 0.3 0.18 0.4 0.000.000 600.200.

Summary General The interim consolidated financial statements as of March 31. The accounting and valuation methods as of December 31. which form the basis for this interim consolidated financial report. 2010 were prepared in accordance with the principles set forth in the International Financial Reporting Standards (IFRS) – guidelines for interim reporting (IAS 34) – which are to be applied in the European Union. consolidated financial statements. or only partially. 2010. and transactions with non-controlling interests.Interpretation:This is the ratio between net profits and shareholders‘ funds. 2009: ANDRITZ Rollteck GmbH: design and manufacturing of winders for the paper industry. . 2009. 2009 have been maintained without any change. included in the ANDRITZ GROUP‘s consolidated financial statements of the reference period January 1-March 31. The amendments do not have a material impact on the interim consolidated financial statements. Due to the utilization of automatic calculation programs. In this graph shows return on investment ratio fluctuates. see the consolidated financial statements as of December 31. Application of new standards ANDRITZ applies the standards IFRS 3 (revised) ‗Business Combinations‘ and IAS 27 (revised) ‗Consolidated and Separate Financial Statements‘ for the financial year beginning on January 1. The revised standards IFRS 3 and IAS 27 are the most essential standards for the treatment of business combinations. Changes in consolidated companies The following companies were not. The interim consolidated financial statements as of March 31. 2010 were neither subject to a complete audit nor to an audit review by an auditor. The ratio is generally calculated as percentage multiplying with 100. For additional information on the accounting and valuation principles. It shows company invests that project gives not proper return on investment. differences can arise in the addition of rounded totals and percentages.

Edinburgh.538. Tokyo. ANDRITZ Precision Machine & Supply Inc.26 EUR (March 25.: producer of separators for applications in the dairy and olive oil industry. .3 MEUR). the ANDRITZ share developed very favorably. Share price development In the first quarter of 2010. which increased by 3. 2009 (3. Dublin.0 MEUR.8% during the same period. 2010 amounted to 3. During the first quarter of 2010. 2010).309.r. 2009: -104. the leading share index on the Vienna Stock Exchange.S. thus 228.ANDRITZ Biax S. and Zurich. Notes to the consolidated statement of financial position Total assets of the ANDRITZ GROUP as of March 31.49 EUR (February 12.3 MEUR). thus again outperforming the ATX. During the current business year. ANDRITZ Perfojet S. meetings with institutional investors and financial analysts were held in Denver.A. The share price increased by 7. The initial accounting for the companies/businesses acquired in 2009/2010 was based on preliminary figures. organized by the stock exchange magazine ‗Der Börsianer‘. ANDRITZ AG paid dividends in the amount of 51. ANDRITZ Frautech S. The net working capital as of March 31.: service for the hydropower sector.0 MEUR (December 31. 2010).S.A. the lowest was 39.: machinery and systems for the production of nonwovens. Investor relations ANDRITZ took 2nd place in the category ‗Share of the Year 2009‘ in the first Austrian retail investor award. San Diego.0%. London.7 MEUR for the 2009 business year.l.7 MEUR higher than as of December 31. The highest closing price of the ANDRITZ share during the reporting period was 46. 2010 amounted to -316.: systems and equipment for the production of biaxially stretched plastic films. No shares were bought back during the first quarter of 2010.

10. The return on investment of the company is in moderate situation not much high. 2. 8. The of effects shows clearly in the figures. In the current assets over fixed assets ratio shows current assets is more but company fixed assets is less so consider on fixed assets also. It also shows the good indication to the company. Share capital of the company is almost constant . 9. RECOMMENDATION:Company is in good condition but still have some kind of suggestions like:1. 2. The EPS of the company is in good situation. 6. Company invests in profitable projects and earn more profits 3. The company income is also in increasing trend. If we can see the liquid assets in this case current liabilities is more this shows moderate situation. Total assets of the company is much high than its profit so more assets not always good. 7. . Recession effects all over the organization transaction. The recession of economy affects this company. Focus on cooperate social responsibilities of the country.company no need to issue share capital to its investors 4. Liquid ratio is also in moderate situation. 4. 3.Findings & Recommendation Findings:In the project various kinds of findings includes which are as follows:1. 5. Net profit of the company also fluctuates but it still be good. Current assets of the company is more than its current liabilities this shows good indications to the company. Company‘s total assets are at high position.

showing a better position than the one which really exists. Ratios derived from analysis of statement alone are not sure indicator of good or bad financial position and profitability of a firm. In above show articles also show ratio analysis is very effective technique for measure profitability and financial position of the organization.. Comparison not possible if different firms adopt different accounting policies regarding depreciation. Financial position of the company is good. Ratio Analysis becomes less effective due to price level changes. Effect of personal ability and bias of analyst. Reserve and surplus in appropriate which meets any kind of contingency. creation of provision for doubtful debts method of valuation of closing stock etc.e. Earning per share of company is also very good. Conclusion:After making my project I conclude the financial position of the company is good. Return on investment of the company is always good. Circumstances differ from firm to firm hence no single ratio can be fixed for all firms against which the actual ratio may compare.LIMITATIONS False accounting data gives false ratios. Some companies in order to cover up their bad financial position to Window dressing i. Limited use of a single ratio. The company meets all the standards and makes good profits through sales of hydro turbines. Ratio may be misleading in the absence of absolute data. . Overall all ratios show good return and makes the financial position of the company is good.

com/book.com/book. Mear. AcaDemon November 12.andritzhydro. 1995 Financial ratio proportionality and inter-temporal stability: an empirical analysis Publisher: Elsevier B.com/book 10. R.Bibliography:- 1..J. 5. Timo Salmi and Teppo Martikainen (1994).com/book. www. 3.com/book . 8.V.uwasa.shvoong..com/book.T. Lee. 2.shvoong. 2006 Book Review Summary rating: 2 stars (4 Ratings) Visits: 341 words: 300. The Finnish Journal of Business Economics 4/94.com/book. Nigel 1997 Financial ratio analysis Publisher: Longman Group Ltd. . Hamilton. www. 426-448. Roger 1993 Financial ratio covenants in UK bank loan contracts Publication Name: Journal of General Management www. 6. Firth. 7. P. . www.com/book. www.shvoong.com/book.shvoong.html www.shvoong. Singh.stocklive. Also published on the World Wide Web at http://www.S.fi/~ts/ejre/ejre.V www. "A Review of the Theoretical and Empirical Basis of Financial Ratio Analysis". Mills. Wu. 2006 Book Review Summary: 1 stars (1 Ratings) Visits: 194 words: 300. AcaDemon November 12. 4. 9.com www.com Books: . (UK).. www. Financial accounting D. Ferner 1987 predictability of financial distress in New Zealand listed companies Publisher: Blackwell Publishers Ltd.shvoong. Ratio analysis Publisher: Blackwell Publishers Ltd www. Taffler. Ramadhar 1996 Subtractive versus ratio model of "fair" allocation: can the group level analyses be misleading? Publisher: Elsevier B.shvoong. R. Cheng F. Ross 1986 Accounting.shvoong. Michael.financial management I. D. Financial statements.M Pandey 9th edition VIKAS Publishing PVT ltd.K GOEL 11th edition SHAHITYA Publishing PVT ltd. Healey.shvoong. Chunchi1988 Expectation formation and financial ratio adjustment processes Publisher: American Accounting Association www.G. Sudarsanam.

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