ANG Industries

ANG Industries Limited is a diversified engineering and manufacturing company with an interest in Heavy
Structural Fabrication Tractor Trailers Specialised Containers and Automotive Components for Heavy
Commercial Vehicles. The Company operates in three segments: manufacturing of auto components and
assemblies transportation and heavy fabrication. The Company manufactures heavy fabrication boiler support
Structures columns beams general fabrication trailers and manufacturer and exporter of trailer components and
air brake components. Its products include brake pins and rollers brake shoe brake assembly welded axle
mechanical suspension air brake kits automatic slack adjuster brake s-camshafts fully dressed dummy axle
manual slack adjuster landing gear and transmission components. The Company’s subsidiaries include ANG
Auto (U.K.) Ltd. ANG Auto (Hongkong ) Ltd. and ANG Auto (USA) Inc. The company has been serving the key
infrastructure sectors of power construction and surface transport - roadways and railways. The company shares
were listed on two leading stock exchanges of India ie Bombay Stock Exchange and National Stock
Exchange.The company has 7 manufacturing and assembly units across northern India.

Ratio Analysis

Ratio analysis consists of calculating financial performance using five basic types of ratios: profitability,
liquidity, activity, debt, and market.

Profitability Ratio

Profitability ratios are a class of financial metrics that are used to assess a business's ability to generate
earnings relative to its revenue, operating costs, balance sheet assets, and shareholders' equity over time,
using data from a specific point in time. In other words, these ratios are financial metrics used by analysts
and investors to measure and evaluate the ability of a company to generate income (profit) relative to
revenue, balance sheet assets, operating costs, and shareholders’ equity during a specific period of time.
They show how well a company utilizes its assets to produce profit and value to shareholders.

A. Asset turnover Ratio

YEAR 2018 2017 2016

Asset turnover ratio (%) 00.00 56.30 58.66

Sources : https://www.moneycontrol.com/financials/ang%20industries/consolidated-ratiosVI/ANG?
classic=true
 Intrepretation

The asset turnover ratio can be used as an indicator of the efficiency with which a company is
using its assets to generate revenue. In this case, the company’s asset turnover ratio was
diminishing. Thus, indicated that the company was not efficiently using its assets to generate
sales.

B. Net Profit Ratio (Margin)

YEAR 2018 2017 2016

Net profit ratio (%) -335.40 -120.36 -6.30

sources:https://www.moneycontrol.com/financials/ang%20industries/consolidated-
ratiosVI/ANG?classic=true

Interpretation:
Net profit (NP) ratio is a useful tool to measure the overall profitability of the business. A high ratio indicates
the efficient management of the affairs of business. In the above, we can see, the net profit margin
of the company was in negative value that means it was deteriorating year by year. Hence, they
are not efficiently managing their assets.

C. Return on Capital Employed

Year 2018 2017 2016

Return on Capital 0.00 883.19 -9.27

Employed (%)

sources : https://www.moneycontrol.com/financials/ang%20industries/consolidated-ratiosVI/ANG?classic=true

Interpretation:
The return on capital employed ratio shows how much profit each dollar of employed
capital generates. Obviously, a higher ratio would be more favorable because it
means that more dollars of profits are generated by each dollar of capital employed.
In the above, we can see that the money invested in capital employee they were
incurring loss.

D. Return on asset

Year 2018 2017 2016

Return on 0.00 -67.77 -3.69
asset(%)

Sources: https://www.moneycontrol.com/financials/ang%20industries/consolidated-
ratiosVI/ANG?classic=true

intrepretation : The return on assets ratio, often called the return on total assets, is a
profitability ratio that measures the net income produced by total assets during a
period by comparing net income to the average total assets. In the above case, the
ratios are negative that means it is not favorable to invest because it shows that the
company is not managing its assets to produce amounts of net income.

E. Profit before tax

Year 2018 2017 2016

PBT (%) -335.40 -123.58 -6.31

Sources: https://www.moneycontrol.com/financials/ang%20industries/consolidated-ratiosVI/ANG?
classic=true
intrepretation : PBT holds much value in providing internal management and external users of
financial data with a company’s operating performance. By excluding income tax, PBT
minimizes one additional variable that may hold different indicators that influence the
way financial data reads. Here, the company was facing unfavourable taxation policies,
that negatively influenced the net income of the company.

II. ANALYSIS BASED ON COMPARISON WITH COMPETITORS

Positioning helps to establish your products’ or services' identity within the eyes of the purchasers/ investors. A
company’s positioning strategy is affected by a number of variables related to customers’ motivation and
requirements, as well as by its competitors’ action. By positioning of a company we can get to know about
how competitors are effecting to a organisation and where the company stands financially.

a. Liquidity ratio
Liquidity ratios are an important class of financial metrics used to determine a debtor's
ability to pay off current debt obligations without raising external capital. Liquidity ratios
measure a company's ability to pay debt obligations and its margin of safety through
the calculation of metrics including the current ratio, quick ratio etc.

I. Current Ratio

Year 2018 2017 2016

Competitors

Ang Industries 0.00 0.35 1.02

Varroc engineering 0.76 0.92 0.93

Enkei wheels 0.74 1.03 0.82

interpretation :
The current ratio of ANG Industry is less than 1 which means the company’s debts due
in a year are greater than its assets (cash or other short-term assets expected to be
converted to cash within a year or less.)

b. Efficiency ratio
Efficiency ratios, also known as activity ratios, are used by analysts to measure the
performance of a company's short-term or current performance. All these ratios use
numbers in a company's current assets or current liabilities, quantifying the operations
of the business.

c. Solvency ratio
The solvency ratio is a comprehensive measure of solvency, as it measures a firm's
actual cash flow—rather than net income—by adding back depreciation and other non-
cash expenses to assess the company’s capacity to stay afloat. It measures this cash
flow capacity in relation to all liabilities, rather than only short-term debt. This way, the
solvency ratio assesses a company's long-term health by evaluating its repayment
ability for its long-term debt and the interest on that debt.