RATIO ANALYSIS:

LIQUIDITY RATIO:

CURRENT RATIO:

Current assets
Current ratio =
Current liability

TABLE 4.1
TABLE SHOWING CURRENT RATIO (AMOUNT IN RUPEES RS)

YEAR CURRENT CURRENT CURRENT RATIO

ASSETS LIABILITY
2012-2013 384390000 321223000 1.196
2013-2014 497992000 373882000 1.331
2014-2015 548194000 457409000 1.198
2015-2016 579431000 384788000 1.505
2016-2017 1091754000 603841000 1.808

INTERPRETATION
A Current Ratio of 2:1 is ideal. A higher ratio indicates the firm’s ability and sound
position to meet its current obligation in time. Here the ratio is not up to the standard during the
period of study. In the year 2015-2016 and 2016-2017 the company is having the higher ratio
compared to previous years. Overall the liquidity is not satisfactory
CHART 4.1
CHART SHOWING CURRENT RATIO (AMOUNT IN RUPEES RS)

CURRENT RATIO
2
1.8
1.6
1.4
RATIO VALUE

1.2
1 1.808
0.8 1.505
1.331
0.6 1.196 1.198

0.4
0.2
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
YEAR
QUICK RATIO:

Quick assets
Quick ratio =
current liability

TABLE 4.2
TABLE SHOWING QUICK RATIO

YEAR QUICK ASSETS CURRENT CURRENT

LIABILITY RATIO
2012-2013 58269561 321223000 0.181

2013-2014 83159000 373882000 0.222

2014-2015 74479000 457409000 0.162
2015-2016 82441000 384788000 0.214
2016-2017 431688000 603841000 0.714

INTERPRETATION
A quick ratio of 1:1 is ideal. High quick ratio is an indication that firm is liquid and has the
ability to meet current or liquid liabilities in time and on the other hand a low quick ratio
indicates the firm’s liquidity position is not good. From the year 2012-2013 to 2016-2017 the
firm has insufficient quick assets to meet its current liabilities. It represents the firms quick asset
is not in a sound position.
CHART 4.2
CHART SHOWING QUICK RATIO

QUICK RATIO
0.8

0.7

0.6
RATIO VALUE

0.5

0.4 0.714
0.3

0.2
0.181 0.222 0.214
0.1 0.162

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
YEAR
ABSOLUTE LIQUIDITY RATIO:

Cash + marketable securities

Absolute Liquid Ratio =
current liability

TABLE 4.3
TABLE SHOWING ABSOLUTE LIQUIDITY RATIO

YEAR ABSOLUTE CURRENT ABSOLUTE LIQUIDITY

LIQAUID ASSETS LIABILITY RATIO
2012-2013 34806000 321223000 0.108
2013-2014 58333000 373882000 0.156
2014-2015 37578000 457409000 0.082
2015-2016 31441000 384788000 0.081
2016-2017 377775000 603841000 0.625

INTERPRETATION:
The acceptable norm is 0.75. Here absolute liquidity ratio is below the acceptable norm, i.e. there
is no sufficient fund for meeting the current liabilities. The absolute liquidity ratio reached 0.62
in the year 2016-2017, showing an increasing trend which is good for the firm.
TABLE 4.3
TABLE SHOWING ABSOLUTE LIQUIDITY RATIO

0.7
ABSOLUTE LIQUIDITY RATIO
0.6

0.5

0.4
RATIO

0.3

0.2

0.1

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
YEAR

1. LEVERAGE RATIO:

a) DEBT EQUITY RATIO:

Debt
Debt Equity Ratio =
Equity
TABLE 4.4
TABLE SHOWING DEPT EQUITY RATIO

YEAR DEPT EQUITY DEBT EQUITY RATIO

2012-2013 594240905 333534348 1.781
2013-2014 466631000 397118000 1.175
2014-2015 546280000 406950000 1.342
2015-2016 469220000 485809000 0.965
2016-2017 662147000 718107000 0.922

INTERPRETATION:

The above data shows that the company’s debt equity ratio is below the standard norm 2:1,
which means the owners prefer equity more than debt. The company should try to use more debt
finance in order to maintain its shareholder’s earnings.
TABLE 4.4
TABLE SHOWING DEPT EQUITY RATIO

1.8
DEPT EQUITY RATIO
1.6
1.4
1.2
RATIO

1
0.8
0.6
0.4
0.2
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
YEAR
PROPRIETARY RATIO:

Shareholders Fund
Proprietory or Equity Ratio =
Total Asset

TABLE 4.5
TABLE SHOWING PROPRITORS RATIO
YEAR SHAREHOLDER TOTAL ASSETS PROPRITORS
FOUNDS RATIO
2012-2013 333534000 606552253 0.549
2013-2014 397118000 863749000 0.459
2014-2015 406950000 953230000 0.426
2015-2016 485809000 955029000 0.508
2016-2017 718107000 1380254000 0.520

INTERPRETATION:

The acceptable norm is 1:3. Proprietary ratio shows the strength of the company. Lower
ratio indicates greater risk to the creditors. Here the ratio doesn’t reach the acceptable norm
during the 5 years of study, which indicates that there is greater risk to the creditors.
TABLE 4.5
TABLE SHOWING PROPRITORS RATIO

0.6
Chart Title
0.5

0.4
Axis Title

0.3

0.2

0.1

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Axis Title

FIXED ASSETS TO NET WORTH RATIO:

Fixed Assets
Fixed Assets to Net Worth Ratio =
Shareholders′ fund
TABLE 4.6
TABLE SHOWING FIXED ASSETS TO NETWORTH RATIO

YEAR SHAREHOLDER FIXED ASSETS FIXED ASSETS TO

FOUNDS NETWORTH
2012-2013 333534000 381009711 1.142
2013-2014 397118000 358340000 0.902
2014-2015 406950000 394445000 0.969
2015-2016 485809000 365368000 0.752
2016-2017 718107000 274531000 0.382

INTERPRETATION:

From the year 2011-2012 to 2014-2015 the fixed assets to net worth ratio is below the standard
1:1, if the ratio is less than 100% it implies that the owners funds are less than total fixed assets,
which means that the shareholder’s funds are not sufficient to finance the fixed assets of the
company.

TABLE 4.6
TABLE SHOWING FIXED ASSETS TO NETWORTH RATIO
 FIXED ASSETS TO NETWORTH RATIO
1.2

0.8
RATIO
0.6

0.4

0.2

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
YEAR
ACTIVITY TURNOVER RATIO

INVENTORY TURNOVER RATIO:

Cost of goods sold

Inventory turnover ratio =
Average inventory

TABLE 4.7

TABLE SHOWING INVENTORY TURN OVER RATIO

YEAR COST OF GOODS AVERAGE INVENTORY

SOLD INVENTORY TURNOVER
RATIO
2012-2013 3814756000 381009711 0.099
2013-2014 4536454000 358340000 0.078
2014-2015 6047214000 394445000 0.065
2015-2016 6918024000 365368000 0.052
2016-2017 7407696000 274531000 0.037

Interpretation:

The table shows the inventory turnover ratio. In the year 2014-2015 the company has low
inventory turnover ratio, due to stock accumulation but during the year 2010-2011 there is a high
inventory turnover ratio, indicate brisk sales. The company is not in a favorable situation. This is
mainly due to excessive cost.
TABLE 4.7

TABLE SHOWING INVENTORY TURN OVER RATIO

0.1
INVENTORY TURN OVER RATIO
0.09
0.08
0.07
0.06
RATIO

0.05
0.04
0.03
0.02
0.01
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
YEAR

Debtors Turnover Ratio:

Net sales
Debtors turnover ratio =
Average Debtors

Table 5.8

NET AVERAGE DEBTORS TURNOVER

YEAR SALES DEBTORS RATIO

2010-11 4536803000 3886500 1167.323556

2011-12 5422200000 2817000 1924.813632

2012-13 6971771000 3765500 1851.486124

 2013-14 8063033000 3162000 2549.978811

2014-15 8997005000 3720500 2418.224701

Chart 5.8

DEBTORS TURNOVER RATIO

3000

2500

2000

1500
DEBTORS TURNOVER RATIO

1000

500

0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

This table shows the velocity of debt collection of the company. Here the company doesn’t
promote credit sales. They are encouraging only cash sales. It shows that the management of
debtors is good. The ratio is increasing year by year, which indicates that the debtors are being
collected within short time. It minimizes the risk of the firm.

Average Collection Period:

No of Working days
Average Collection Period =
Debtors Turnover Ratio
Table 5.9

DEBTORS
NO OF WORKING TURNOVER AVERAGE COLLECTION
YEAR DAYS RATIO PERIOD

2010-11 365 1167.323 0.312681237

2011-12 365 1924.813 0.189628811

2012-13 365 1851.486 0.197138947

2013-14 365 2549.978 0.14313849

2014-15 365 2418.224 0.150937217

Chart 5.9

AVERAGE COLLECTION PERIOD

0.35

0.3

0.25

0.2

0.15 AVERAGE COLLECTION PERIOD

0.1

0.05

0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

Low average collection period indicate quick payment by debtors. Here the firm is not having
credit sales, so the collection period is also very low. So the payment is received quickly.
Working Capital Turnover Ratio:

Net Sales
Working Capital Turnover Ratio =
Net Working Capital

Table 5.10

NET NET WORKING WORKING CAPITAL

YEAR SALES CAPITAL TURNOVER RATIO

2010-11 4536803000 63167000 71.82235978

2011-12 5422200000 124110000 43.68866328

2012-13 6971771000 90785000 76.79430523

2013-14 8063033000 194643000 41.42472629

2014-15 8997005000 487913000 18.43977307

Chart 5.10
 WORKING CAPITAL TURNOVER RATIO
90
80
70
60
50
WORKING CAPITAL
40
TURNOVER RATIO
30
20
10
0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

Highest working capital is favorable for the company’s liquidity position. A high turnover of
working capital is a sign of over trading. The working capital ratio of the company shows a
decreasing trend over the years. In the year 2014-2015 the ratio is very low as compared to other
years. It shows that the working capital is turned over in a stated period of time. During 2011-
2012 the working capital ratio decreases to 43.68 from 71.82 of previous year ratio. In the year
2012-2013 it changed to 76.79. The ratio again falls during the year 2013-14 and 2014-15.

Fixed Assets Turnover Ratio:

.
Net sales
Fixed asset turnover ratio =
Fixed asset

Table 5.11

NET FIXED ASSETS TURNOVER

YEAR SALES FIXED ASSETS RATIO

2010-11 4536803000 381009000 11.90733815

 2011-12 5422200000 358340000 15.13143942

2012-13 6971771000 394445000 17.6748875

2013-14 8063033000 365368000 22.06825174

2014-15 8997005000 274531000 32.77227344

Chart 5.11

FIXED ASSETS TURNOVER RATIO

35

30

25

20
FIXED ASSETS TURNOVER
15 RATIO
10

0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

In the year 2010-2011 the fixed assets turnover ratio of the company is low as compared to other
years. It shows that the fixed assets are not being turnover in a stated period of time. But in the
last year the ratio shows an increasing trend. In the year 2014-2015 it shows a highest value of
32.77, ie the fixed asset has been utilized properly.

Current Assets Turnover Ratio:

Current assets turnover ratio = sales / current assets

Table 5.12

CURRENT CURRENT ASSETS

YEAR SALES ASSETS TURNOVER RATIO

2010-11 4536803000 384390000 11.80260413

2011-12 5422200000 497992000 10.88812672

2012-13 6971771000 548194000 12.7177076

2013-14 8063033000 579431000 13.91543255

2014-15 8997005000 1091754000 8.240872028

Chart 5.12

CURRENT ASSETS TURNOVER RATIO

16
14
12
10
8 CURRENT ASSETS
6 TURNOVER RATIO

4
2
0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

A high current asset turnover ratio indicates the capability of the organization to achieve
maximum sales with the maximum investment in current assets. It indicates that the current asset
are turned over in the form of sales more number of times. Higher the current asset turnover ratio
is better for the firm. In the year 2010-11 the ratio is 11.80, it decreased to 10.88 in the year
2011-12, again increased to 12.71 in 2012-13 and to 13.91 in 2013-14. The ratio then decreased
to 8.24 in the year 2014-15, which shows it is not in a sound position at the end.

Net Profit Ratio:

Net profit ratio = (net profit/ sales)*100

Table 5.13

NET PROFIT
YEAR NET PROFIT NET SALES RATIO

2010-11 44981000 4536803000 0.991469103

2011-12 104493000 5422200000 1.927132898

2012-13 46530000 6971771000 0.667405742

2013-14 153736000 8063033000 1.906677053

2014-15 436341000 8997005000 4.849847255

Chart 5.13
 NET PROFIT RATIO
6

3
NET PROFIT RATIO
2

0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

From the above data it is clear that net profit ratio is maximum in the year 2014-15. In the
year 2010-11 the ratio is 0.99, it has increased to 1.92 in the year 2011-12, in 2012-13 it again
decreased to 0.66 and in 2013-14 the ratio increased to 1.90. Totally the net profit ratio is
fluctuating year to year. It indicates the overall inefficiency of the firm. It shows the profitability
of the firm is not favorable.

TREND PERENTAGE:

Trend percentages are immensely helpful in making a comparative study of the financial
statements for several years. The method of calculating trend percentage involves the calculation
of percentage relationship that each items bears to the same item in the base year.

TREND ANALYSIS OF SALES :

Table 5.14

TREND PERCENTAGE OF SALES

YEAR NET SALES PERCENTAGE

 2010-11 4536803000 100

2011-12 5422200000 119.5158794

2012-13 6971771000 153.671451

2013-14 8063033000 177.7249971

2014-15 8997005000 198.3115643

Chart 5.14

PERCENTAGE
250

200

150

100 PERCENTAGE

50

0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

From the above data it is clear that sales is maximum in the year 2014-15. In all other
years it is increasing, because of increase in production. In all the years the trend percentage of
sales is high as compared with the base year. The increase in sales shows the efficient
management of stock.

TREND ANALYSIS OF NET PROFIT:

Table 5.15
 TREND PERCENTAGE OF NET PROFIT

YEAR NET PROFIT PERCENTAGE

2010-11 44981000 100

2011-12 104493000 232.3047509

2012-13 46530000 103.4436762

2013-14 153736000 341.7798626

2014-15 436341000 970.056246

Chart 5.15

PERCENTAGE
1200

1000

800

600
PERCENTAGE
400

200

0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

The above data shows the fluctuating trend movement in net profit. In the year 2012-2013 the
trend movement shows a decreasing trend and is 103.44. it is due to didproportionate increase in
the cost of goods sold. But last two years shows upward trend.All the years the trend is higher
than the base year.
TREND ANALYSIS OF NET WORKING CAPITAL:

Table 5.16

TREND PERCENTAGE OF WORKING CAPITAL

YEAR NET WORKING CAPITAL PERCENTAGE

2010-11 63167000 100

2011-12 124110000 196.4791743

2012-13 90785000 143.7221967

2013-14 194643000 308.1403264

2014-15 487913000 772.4175598

Chart 5.16
 PERCENTAGE
900
800
700
600
500
400 PERCENTAGE
300
200
100
0
2010-11 2011-12 2012-13 2013-14 2014-15

Interpretation:

From the above data it is clear that the trend percentage of working capital shows a
downward trend in the year 2012-2013. But the percentage of working capital is high in all the
years when compared with base year. This is because of the changes in the current asset is more
than the changes in the current liability. It reveals availability of adequate working capital.