INTRODUCTIO N

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“A study on Financial Performance analysis of Alkem

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Finance is so indispensable today that it is rightly said to be the lifeblood of an enterprise without adequate finance, no enterprise can possible accomplish its objectives. “Business finance is that business activity which is concerned with the acquisition and conservation of capital funds in meeting the financial needs and overall objectives of the business enterprise.”
-Wheeler

Meaning:
The term ‘business finance’ connotes finance of business activities. It is an activity or a process, which is concerned with acquisition and use of funds and distribution of profits by a business firm. Thus, business actually deals with financial planning, acquisition of funds, use, and allocation of funds and financial controls. “Corporate finance deals with the financial problems of corporate enterprise. These problems include the financial aspects of the promotion of new enterprise and their administration during early development, the accounting problems connected with the distinction between capital and income, the administrative questions created by growth and expansion, and finally, the financial adjustments required for the bolstering up or rehabilitation or a corporation which has come into financial difficulties.”

DITM COLLEGE Laboratories Limited.”

“A study on Financial Performance analysis of Alkem

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Encyclopedia of Social Science
To sum up in simple words, we can say that financial management as practiced by corporate firms can be called corporation finance or business finance. Finance function has become so important that it has given birth to Financial Management as a separate subject. It deals with finding out various sources for raising funds for the firm. The sources must be suitable and economical for the needs of the business. The most appropriate use of such funds also forms a part of financial management.

Need & importance of business finance:
Finance is life-blood of business. It is one of the basic requirements of a business. The plans of a business concern would remain mere dreams unless adequate finance is available to convert them (i.e., the plans) into reality.A business requires finance at every stage. For example, finance is needed for bringing a business into existence, (i.e. for starting a business). Finance is required for financing the fixed capital (i.e. for financing the acquisition of fixed assets like lands, buildings, plant and machinery, patents etc) Finance is needed for expansion and modernization of business. Finance is also needed for financing the working capital (i.e., for financing the acquisition of raw materials, finished goods, etc., and for the payment of wages and the other day-to-day running of expenses of the business.

DITM COLLEGE Laboratories Limited.”

“A study on Financial Performance analysis of Alkem

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Economic improvements. bui           To expand its liquidation. Liquidity & profitability.” “A study on Financial Performance analysis of Alkem Page 4 . Maximum yield.up of capitalization.E SCOPE OF FINANCIAL MANAGEMENT : e lands. To minimize the risk. Maximize earnings. Make. Cash receivables. It helps in long term and short term investment decisions. Optimal financing mix. DITM COLLEGE Laboratories Limited.

No business can survive without earning profit. competition in other units.” “A study on Financial Performance analysis of Alkem Page 5 . It means that by maximizing stockholder’s wealth the firm is operating consistently towards maximizing shareholder’s utility. thus profit maximization is concerned as the main objective of the business. Profits also serve as a protection against risks. A business being an economic institution must earn profit to cover its costs and provide funds for the growth. The accumulated profits enable a business to face risk like fall in price.FINANCIAL GOALS:  Profit maximization: Profit earning is the main aim of every economic activity. Financial theory asserts that wealth maximization is the single substitute for a stockholder’s utility. which cannot be ensured. Profit is a measure of efficiency of a business enterprise. adverse government policies etc. When the firm maximizes the stockholder’s wealth. the individual stockholder can use this wealth to maximize his individual utility. Wealth Maximization: Wealth maximization is the appropriate objective of an enterprise. DITM COLLEGE Laboratories Limited.

” “A study on Financial Performance analysis of Alkem Page 6 . To judge the financial position (i. comparison of one department of a firm with   other departments of the same firm) DITM COLLEGE Laboratories Limited. solvency.the trends in regard to purchase.e. To judge managerial performance and efficiency. Objective of Financial Performance:   To determine the profitability or earning capacity of the concern. etc. sales. and the long-term solvency) of the concern. the liquidity or short-term solvency. . i.FINANCIAL PERFORMANCE Financial performance is the process of analyzing the performance of financial activities which can be done by analyzing the financial statements and other financial reports to know financial strength and weakness of the concern as will as financial position of the company either by comparing financial statement with previous year of on the basis of standards prescribed by the various methods of analyzing the financial statements.e. To make inter-firm comparison (i.e. profits. liquidity.  To measure the financial performance of the concern.  To know the trends of the business.

 What will be the rate of return on their investments?  Whether the concern would be in a position repay its debts. which have. Financial analysis helps the prospective investors to know.IMPORTANCE OF FINANCIAL PERFORMANCE: The importance of financial performance is: • Importance of Financial Performance to shareholders: Financial analysis is of much importance to shareholders or owners of the business enterprise.  The financial position of the concern.  The earning per share and the dividend per share.  What will be the future prospects of the concern? Importance of Financial Performance to Banks and other financial Institutions. DITM COLLEGE Laboratories Limited. It helps the owners of the business to know  The present and future profitability of their concern. An impact on the market prices of their shareholders.” “A study on Financial Performance analysis of Alkem Page 7 . Importance of Financial Performance to management : Financial analysis is useful to prospective investors who would like to know the earning capacity and the financial position of the enterprise before investing their funds on the shares of the enterprise.

Note: A ratio on its own has little or no meaning at all. Whether the concern has liquidity or short-term solvency to pay interest on advances. Introduction to Ratio Analysis A ratio : Is the mathematical relationship between two quantities in form of fraction or ratio. leverage. and to repay the short-term advances. Although ratios report mostly on past performances. Ratios are highly important profit tools in financial analysis that help financial analysts implement plans that improve profitability. Ratio analysis: is essentially concerned with the calculation of relationships which after proper identification and interpretation may provide information about the operations and state of affairs of a business enterprise. This assistance in decision-making reduces reliance on guesswork and intuition and establishes a basis for sound judgement. Ratio analysis is primarily used to compare a company's financial figures over a period of time. they can be predictive too.  Whether the concern has sufficient assets to offer as security for advances. reordering. and interest coverage.” “A study on Financial Performance analysis of Alkem Page 8 . DITM COLLEGE Laboratories Limited. liquidity. financial structure.  Whether the concern has long-term solvency to pay the long-term debts on maturity. The analysis is used to provide indicators of past performance in terms of critical success factors of a business. and provide lead indications of potential problem areas.

a method sometimes called trend analysis. 2. you can identify trends. DITM COLLEGE Laboratories Limited. Through trend analysis. both in and out of your industry. 4) Utility to Employees. • Use and Significance of Ratio Analysis 1) Managerial Uses of Ratio Analysis a) Helps in decision making. good and bad. f) Other uses. b) Helps in financial forecasting. You can also see how your ratios stack up against other businesses. Quantitative only. e) Helps in control. Standards of comparison imperfect. 2) Utility to Shareholders/Investors 3) Utility to Creditors. 5) Utility to Government.” “A study on Financial Performance analysis of Alkem Page 9 . d) Helps in co-coordination. c) Helps in communicating. • Limitations of Ratio Analysis 1. and adjust your business practices accordingly.

Change of accounting procedure. Price level changes. • Classification of Ratios :Ratios may be classified in a number of ways keeping in view the particular purpose. 8. 5. 7.” “A study on Financial Performance analysis of Alkem Page 10 . Absolute figures distortive. 4. 6.3. 1) Liquidity Ratios a) Current Ratio b) Quick Ratio c) Absolute Liquid Ratio 2) Long-term Solvency Ratio a) Debt-Equity Ratio b) Proprietary Ratio c) Solvency Ratio d) Fixed Assets to Net Worth Ratio e) Current Assets to Net Worth Ratio 3) Turnover or Activity Ratio a) Stock Turnover Ratio DITM COLLEGE Laboratories Limited. Window dressing. Personal Bias. Inherent limitation of accounting.

b) Debtors Turnover Ratio c) Creditors Turnover Ratio d) Cash Turnover Ratio e) Working Capital Turnover Ratio f) Fixed Assets Turnover Ratio g) Current Assets Turnover Ratio h) Total Assets Turnover Ratio i) Sales to Net Worth Ratio 4) Profitability Ratios a) Gross Profit Ratio b) Net Profit Ratio c) Cash Profit Ratio d) Operating Profit ratio e) Total Assets Ratio f) Return on Equity Introduction to the Company Company History DITM COLLEGE Laboratories Limited.” “A study on Financial Performance analysis of Alkem Page 11 .

world class manufacturing facilities approved by several regulatory authorities. a special reputation in the field of sales and marketing. Thus. ShriSamprada Singh. along with its expertise in brand buildings are recognized widely and are considered as amongst the very best. Gastro Enterology products.Alkem Laboratories Ltd. Europe. Gynaecology products. the strength of Alkem's sales and marketing. ranging from Anti bacterials. Alkem's formulation facilities for cephalosporins (oral & sterile). South Africa and Australia. CNS and CVS products along with an impressive oncology range. seeking sales and marketing partners in India. The Alkem product portfolio encompasses a wide spectrum of therapeutic groups. Some of the biggest brands in the Indian Pharma market are the Alkem brands. DITM COLLEGE Laboratories Limited. NSAIDS. Alkem emerges as the ideal Indian partner. Alkem has successfully emerged as a leading domestic Pharma major in and is rapidly multiplying its international footprint. In India. Alkem has shown remarkable success with new products and converted several of them into market leaders. was founded in 1974 by one of India's respected entrepreneurs. For a company with patented new molecules. In the last three and a half decades of its operations. Penicillins (oral & sterile) and General products have been approved by the regulatory authorities of US FDA.” “A study on Financial Performance analysis of Alkem Page 12 . Alkem offers a plethora of product opportunities for companies interested in sourcing products from India. Alkem also has to its credit. Alkem has carved out for itself.

Alkem is a financially secure company. Research and development are its major focus areas and Alkem has undertaken several initiatives and activities in order to continue a steady process of enhancement in these areas. Alkem possesses its own CRO. an unit approved by ANVISA. Alkem has been conferred for two consecutive years (2007 and 2008) the P1+ RATING by CRISIL INDIA (SUBSIDIARY OF STANDARD AND POOR). Phoenix Bio Pharma Research Centre in Mumbai. vision and leadership. the best possible rating for a short term debt. he has managed to turn it into a premier DITM COLLEGE Laboratories Limited.” “A study on Financial Performance analysis of Alkem Page 13 . ShriSamprada Singh's success is noteworthy since he started his enterprise from scratch and through tremendous dynamism. ShriSamprada Singh is the Chairman of the Alkem Group of Companies which produces a turnover of US $ 250 mio.Brazil About the founder ShriSamprada Singh is one of the most respected and successful entrepreneurs of the Indian Pharmaceutical industry. Currently.

During his high school days. Mr. Patna University in 1946 to specialize in Commerce. In 1953. Singh made a small beginning as a Retail Chemist. Mr. DITM COLLEGE Laboratories Limited. Alkems products are supplied to approximately 30 countries. and went onto eschew foreign textiles and choose Khadi. a freedom fighter. successive draughts in the State of Bihar from 1951 onwards. In 1960. In fact. he started a business of Pharmaceutical distribution in Patna under the banner of 'MagadhPharma'. SHRI SAMPRADA SINGH was born into a family of agriculturists in Bihar. The credit for this huge success is to be given to none other than ShriSamprada Singh for seeing Alkem through its various stages of progress Today. India's struggle for independence had intensified and he was instinctively drawn into this historic cataclysm. a symbol of patriotism even at the tender age of 13. Mr.company in the Indian Pharmaceutical Industry. worldwide. Singh exhibited his dynamism through various student activities It was understood that after his B. Alkem Laboratories Limited. During his four years as an undergraduate. compelled him to look elsewhere to nourish his entrepreneurial zeal. Singh entered Gaya College.6 pharmaceutical company in India. His intense patriotism made him decide at that stage to contribute significantly to his beloved motherland. Singh drew his inspiration from his uncle.Com. Singh also took an active plunge in the 1942 QUIT INDIA Movement. However.Alkem is a huge corporate house and a name to reckon with in the Indian pharmaceutical industry. Degree from Patna University in 1950.” “A study on Financial Performance analysis of Alkem Page 14 . Mr. Mr. Mr. Singh would join his family activities in the agricultural sector and introduce advanced and modern farming techniques. is today the No.

Singh received yet another award. Realizing the limitations of expanding in the distribution business. hard work and affablenature. Mr. His brother. In the year 2004.Due to his sincerity. The sole objective of this venture was to serve his countrymen with high quality and affordable medicines.Samprada Singh was honoured with the prestigious "Life Time Contribution Award" by the Express Pharma Excellence Awards. Under the able leadership of Mr.” “A study on Financial Performance analysis of Alkem Page 15 . in the year 1972. Singh. Today. Singh became the founder Director of a Bombay based Pharmaceutical company. a post graduate in Political Science. B. In June 2002. Singh went on to launch a new company of his own.Samprada Singh. under the name of ALKEM LABORATORIES LIMITED in 1973-74. The 'Medicine Update Lifetime DITM COLLEGE Laboratories Limited. which is reckoned by many as the Oscar of the Indian Pharmaceutical Industry. Later. Singh was able to acquire the distributorship of several renowned multinationals and soon. Mr. ALKEM has shown a spectacular growth. N. successfully built up a sound distribution network in the eastern region of India. Alkem enjoys a place of distinct honour and respect in the Indian Pharmaceutical Sector. Mr. joined him in this new venture as a Director. Mr. Mr. Mr.

Managing director Mr.Samprada Singh in establishing Alkem Laboratories in 1974 and has since been integral to the evolution of the organization in every facet.BasudeoNarain Singh is the Managing Director of Alkem Laboratories ltd. B N Singh is the president of Indian Drug Manufacturer's association (IDMA). a post graduate in political science. Singh was conferred upon with the 'Life Time Achievement Award' by Pharma Business and Technology.Health Care Award' went onto honour his achievement in the pharmaceutical industry as one of it's most successful entrepreneurs In October 2000. the largest Pharma Association in India (with 650 members) representing large. B N Singh. has nurtured the organization in its early days and with dynamic vision and strategic leadership has professionally managed Alkem's progress in becoming one the leading Pharma companies in India Mr.Achievement . He joined Mr. one of the most distinguished and respected entrepreneurs of the Indian Pharmaceutical industry. Mr. medium DITM COLLEGE Laboratories Limited.” “A study on Financial Performance analysis of Alkem Page 16 . Mr.

Focus on the generics business strategy will provide the company with a sustainable model to move up the value chain. Mr Singh leads the IDMA activities which play an important role in shaping the Indian Pharma Industry's future in becoming a global player.Bihar Association. vaccines and herbal drugs. Today. Mr. biological. Generic drug development encompasses both small and large molecules. is also actively involved in various capacities with many charitable organizations. In this capacity. The business focus is backed with the building up of captive manufacturing operations and of complying with the regulatory standards of the advanced markets. prominent among them are: President . active ingredients. intermediates. the company includes a group of more than 200 R & D scientists.” “A study on Financial Performance analysis of Alkem Page 17 . B N Singh. not only in vanilla generics but also in value added and difficult to develop complex generics. Mumbai Indian Red Cross Society Association for Blind. in all the DITM COLLEGE Laboratories Limited. Mumbai Research & Development Alkem has reinforced its focus on R & D and has substantially scaled up on its investments to build its capabilities in all the areas of generic research as a short to medium term strategy. with performance driven credentials. in addition to the professional commitments. Alkem strongly believes that there are attractive opportunities in the highly competitive global generic space.and small scale units manufacturing pharmaceutical dosage forms.

Alkem has committed a substantial amount of its resources to the development of Novel Drug Delivery Systems and this shall be the key element in providing momentum to consolidate its objective of value addition Alkem has an aspiration to make pioneer within the area of drug discovery.” “A study on Financial Performance analysis of Alkem Page 18 . as all the elements of research have been conducted within the same campus. as their asset to steer forward in its current aspirations. TGA and ANVISA Brazil. Alkem's generic drug development meets the speed and quality attributes. Alkem is also collaborating with several Indian Universities and Indian companies for their development of difficult-to-make products and the development of other unique DITM COLLEGE Laboratories Limited. and is looking into various models and therapeutic segments to carve out a meaningful space in the arena of medical needs that are not fulfilled. Alkem can proudly claim its own 40 bed bioavailability and bioequivalence testing facilities that could meet up to the standards of all the regulatory agencies. Navi Mumbai. Backward integration through in-house API development and front-end efficient marketing/distribution of products would provide the desired impetus to the generics program from lab scale development to commercialization. including US FDA. and continue to do so to provide the most advanced therapy avenues to the Indian patients. form overseas collaborators. sometime in the recent future. MHRA. situated at Taloja. Alkem has inlicensed a number of novel products for the domestic market.disciplines of generic drug development.

Alkem is progressing with leaps and bounds in the Nutraceutical segment of healthcare and wellness. Backed by its internal R & D competence and track record. Alkem's Group Company has TGA approval for its soft gelatin capsules facility. oral cephalosporins and general category products. Research at Alkem is guided a seasoned top team supported by over 200 scientist working on challenging assignments. Mumbai to carry out most advance research. Alkem would go on to DITM COLLEGE Laboratories Limited. Alkem has state of the art manufacturing facility located at Taloja. A number of patent applications are emerging from the in-house innovations which have gone on to be filed. Alkem has also built a segregated facility for manufacturing immunosuppressant drugs and plans to create further facilities for other niche segments like lyophilized injectables.R&D has inherent strength in analytical chemistry and specialization in creating high quality formulations as per the required specifications.technologies. This initiative would make Alkem a formidable India based manufacturing house. Nutraceutical R & D efforts are mainly directed towards providing low fat and low calorie nutritional products for the better management of health. steroid and oncology portfolios. Alkem is building its future upon appropriate and timely protection of its R & D efforts. Alkem has MHRA approval of its parenteral cephalosporins. premixed ready to use Parenterals.” “A study on Financial Performance analysis of Alkem Page 19 . Alkem . Commendable success has been achieved in this area of research and development.

A part of the first floor and the third floor house the HVAC system etc. The General block is a three-floor structure having production on ground and first floors measuring 3025.94 sa. on ground floor and 1893. mtrs. The ware housing facility has available area measuring1893.04 sq. warehouse. mtrs.35 sq. and 1596. respectively. The Cephalosporin block is a three-floor structure having production on ground and first floors measuring 877.85 sq. on first DITM COLLEGE Laboratories Limited.” “A study on Financial Performance analysis of Alkem Page 20 .mtrs.85 sq.04 sq. and 877. mtrs.mtrs. These production blocks are designed to meet the domestic and export production requirements. Manufacturing AmaliyaManfacturing Facility – I It comprises two production blocks (General and Cephalosporins). utilities block and an effluent treatment plant. mtrs. respectively. quality assurance cum administrative block. The third floor houses the HVAC system etc.have a sustainable presence in a variety of dosage form segments across the markets of the globe.

capsules and dry syrups for domestic and export markets. The unit has an independent. This GMP unit is designed for production of injections. mtrs. quality assurance.mtrs. administrative office and a separate utilities block.mtrs. mtrs.mtrs on ground floor and 428 sq. This plant is a four storeyed structure having production on ground and second floors measuring 1996 sq. The major equipments installed in this unit are three high-speed dry powder injection and two high-speed dry syrup filling and packing lines as well as tablets and hard gelatin capsules production and packing lines. and 2450 sq.” “A study on Financial Performance analysis of Alkem Page 21 . water system etc. well-equipped quality. Kachigam Unit The Kachigam unit is four storeyed structure with available area of 2275 sq. respectively.mtrs. and 2072 sq. The ware housing facility has an available area of 875 sq. A part of the first floor and the third floor house the HVAC. for the ground and the second floor respectively with the first and the fourth floors mainly housing the HVAC etc. tablets.mtrs. assurance department DITM COLLEGE Laboratories Limited. on second floor. The injection facility of this plant is a modular clean room based design and this is one of the best and most modern manufacturing facilities in the country The ware housing facility has the available area measuring 504 sq. This plant is designed to meet the domestic and export production requirements.Amaliya B-Lactam Facility – IIt comprises one production block (for ß-Lactams) having warehousing.

It is situated in clean. Alkem covers almost 40% of retail pharmacy in India. Capsules. The plant has been designed for Cephalosporins& General categories products.” “A study on Financial Performance analysis of Alkem Page 22 . green & scenic surrounding. DITM COLLEGE Laboratories Limited. The production at Baddi caters to both domestic & International business. Dry Powder Injectables& Oral Suspensions are he dosage forms that can be manufactured in this facility Distribution / Logistics Alkem also has one of the largest logistic networks distribution set up in India covering each and every state. Alkem distributes its products through 20 depots and 4 C & F agents and a network of 5500 stockists. Tablets.The new plant at Baddi was commissioned in the year 2005.

Of this. It DITM COLLEGE Laboratories Limited. Alkem'semployees strength is 6000. It places a premium on innovation and gives its people the freedom to think differently. "Professionalism" is the guiding principle of every activity in all departments of Alkem.” “A study on Financial Performance analysis of Alkem Page 23 .Careers Alkem has always recognized that its greatest strength are its people. experiment and grow. the company gives great importance to providing a work culture that allows its members the space to learn. around 3000 is the sales force itself. People have always been the strength of Alkem Laboratories Ltd and the reason for its success. covering every nook and corner of India. Recognizing this. innovate.

” “A study on Financial Performance analysis of Alkem Page 24 . who are more relaxed and spontaneous are likely to be more tolerant. and a culture of equal opportunity in which individual success depends solely on personal merit and performance. open lines of communication. we have an induction program that comprises classroom. We believe that people who are cheerful and fun loving are more successful than the others. They are those who can think more clearly and creatively. We create and maintain an atmosphere of fun to improve the work environment and sets high level of commitment and involvement from each and every individual. We hire the best-in-class talent. we must provide the right environment in which they feel positive and enthusiastic about what they are doing. research. We also encourage and support a healthy work/life balance which we know is essential to the continued wellbeing of our employees. we believe that if we are to expect people's continued energy and commitment at work. company and business unit. Their sense of humour is their defence. excellent learning and development opportunities. with a clear sense of purpose. confidence in their ability to meet the challenges and pride in their individual contribution to the company's success. production and sales insights combined with on-the-job training. At Alkem. We provide a desirable and conducive working environment for our employees at Alkem. a safe and energising workplace.also encourages individuals to take on increased responsibility and thereby contribute to the growth of the company In today's demanding world. This helps the new recruits get acclimatized to the realities of the industry. competitive reward and benefits. This means providing inspiring and effective leadership. DITM COLLEGE Laboratories Limited.

our culture and how we manage our work. vision. learn things faster. Our people have the opportunity to learn from and be coached by the best in the business . learn things faster.” “A study on Financial Performance analysis of Alkem Page 25 . Also you will have started up valuable relationships with colleagues at all levels. and derive the most benefit from the shortest possible time. We provide an insight into the company's values. multiple functions. Also you will have started up valuable relationships with colleagues at all levels. our culture and how we manage our work. This holistic induction enables employees to understand the realities of the corporate world. culture and strategy rounded off by training in social sensitivity. and derive the most benefit from the shortest possible time. vision. we make them familiar with Alkem business operations. Well-trained employees are the key to any business success. This holistic induction enables employees to understand the realities of the corporate world. We offer more training hours and make constant investments in our employees development to keep them at the top of their Our training programs are tailored to individual needs. multiple functions.Training is not just something our people do when they first join the company. At Alkem we hire the best people and then we help them get even better. we make them familiar with Alkem business operations. and field sales.supportive leaders and colleagues who DITM COLLEGE Laboratories Limited. experience and areas of interest. and field sales. As part of the induction program. Our training program is designed to prepare our staff for the next stage in their career. culture and strategy rounded off by training in social sensitivity. We provide an insight into the company's values.As part of the induction program. and the courses people take depend on their skills.

practical experience and feedback to enable our people to develop specialist skills which help them grow.S. Financial ratios: Financial Management (14719185). We use a well-managed combination of courses.” “A study on Financial Performance analysis of Alkem Page 26 . p34-35. Vol. Apr2005. technical and functional expertise. 49 Issue 1. Benchmark analysis can provide important insights about a company's performance. Literature Review The Importance of Financial Ratio and Benchmark Analysis: Supply House Times. Financial ratio refers to the comparison of one performance indicator which when considered becomes useful in relating to how profitable and productive the firm is. Mar2006. 2p The article provides reasons why financial ratio and benchmark analysis is important in the success of a business in the U. p68-69. 2p Focuses on the use of enterprise stewardship model to bridge the gap of understanding among financial managers during the presentation of results in the form of DITM COLLEGE Laboratories Limited.can pass on their industry.

particularly in construction equipment investments. p73-74. Michael mcdennis@coveringcredit. Key Financial Ratios For The Credit Department: Dennis. Vol. The best way to do the calculation is to draw a graph showing how NPV of the annual cash flows goes down as the discount rate increases. The point at which the graph crosses the zero line is. the rate of return of the investment.S.financial ratios. 2p The article offers tips on how to calculate the rate of return. Importance of mutual trust and understanding for effective teamwork. Importance of financial managers to understand the financial reports in order for them to challenge the number How to Calculate Rate of Return: Construction Equipment. A simple definition of rate of return is that rate which causes net present value (NPV) of the annual cash flows to be zero.” “A study on Financial Performance analysis of Alkem Page 27 . 110 Issue 7. by definition. Tips for bridging the gap between the financial ratios and the people who influence them the most. Jul2007.com The article focuses on the importance of financial ratio analysis to credit department of several businesses in the U. Financial ratios are important because of its usefulness for determining and comparing the financial status of a company. These financial DITM COLLEGE Laboratories Limited.

Saving is the DITM COLLEGE Laboratories Limited. 8p This paper applies principal component analysis (PCA) to investigate the effects of fundamental financial ratios on returns of initial public offerings (IPOs) from electronics firms listed on the Taiwan Stock Exchange. How Well Do We Understand Ratios and Spreads?: Journal of Portfolio Management. The fact that the increase in the coefficient estimates of variables was significant suggests that the model has considerable explanatory power. not absolutes. leverage ratios. Vol. p1-1. The empirical findings show that returns of IPOs were significantly affected by the eight selected financial ratios. All of these ratios are indicative for customer's ability to pay debts and applicant's long-term viability. The Effect of Financial Ratios on Returns from Initial Public Offerings: An Application of Principal Components Analysis: International Journal of Management. including liquid ratio and cash flow ratio. and efficiency ratios. Investors are also reluctant to make objective judgments about corporate bond yields without reference to the spreads between corporate and the yield on government bonds of similar maturity. Winter2005. Mar2006. Ratios and spreads measure relatives. 23 Issue 1. 1p The article presents information about double-numbers like ratios or spreads. 31 Issue 2. Vol. profitability ratios.determinants include liquidity ratios.” “A study on Financial Performance analysis of Alkem Page 28 . It eliminates high multicollinearities among independent variables and transforms original variables into independent variables in the regression model. p187-194.

Such a broad understanding will be of great relevance to the managers of the company.. which reflect financial performance well and adequately. The financial position of the company cannot be stationary. investors (present potential) as well as to any other party/parties interested in the company. Analysis of the financial performance tries to find out the reasons for shit in position and tries to establish a trend of the direction in which the business is moving in. changes in profit. but it is dynamic owing to the shift in its financial position with regard to various financial parameters. the company could understand its own position over time. the statement of the problem could be general terminology. DITM COLLEGE Laboratories Limited. the statement of the problem could be generalized as a detection of various reasons for variation in the financial position of the company. changes in operating efficiency.” “A study on Financial Performance analysis of Alkem Page 29 . changes in quality of debtors and many more other reasons. Therefore using general terminology. but because household incomes have grown unusually slowly. By analyzing systematically the identified financial ratios. NEED FOR THE STUDY Changes in the financial performance of the company could be due to several reasons.difference between income and spending. The savings rate is low not because spending has gone through the roof.

if found necessary. • To evaluate the financial statement by which financial position of the company can be obtained which helps to strength the profitability of the concern in future by avoiding the losses.” “A study on Financial Performance analysis of Alkem Page 30 . • The company wants to know their profitability position so that it can strengthen its profitability in future etc. • To form conclusions and suggest solution’s and remedies for correcting the drawbacks. • To understand the drawback prevalent in the functioning of the firm. To evaluate the financial performance of the company for better understanding of various aspects of financial statements.In other words financial performance evaluation will serve as an eye opener to any company in question is no exception to this study. • • The company wants to know their financial soundness. OBJECTIVES OF THE STUDY • To analysis the financial performance of the company from last 5 years. DITM COLLEGE Laboratories Limited. • To gain a working knowledge of the financial aspects of the company. • The company wants to know their financial position based on which the company can try to improve financial position in future.

A good strategy is to compare the ratios to some sort of bench mark. ratios are used to analyze. In these reports.” “A study on Financial Performance analysis of Alkem Page 31 . In finance. DITM COLLEGE Laboratories Limited. ratio are simply one number divided by another. such as industry averages or to what the company has done in past or both.METHODOLOGY Financial statements provide a solid base for making decision at all levels of management especially at the top level. The trick is in the way ratio analyzed and used by the decision maker. One of the ways in which financial statements can be put to work is through ratio analysis. an analyst needs some bench marks to find out where the company stands at that particular point. Through the figures of financial statements. one can analyze and interpret information for making decisions relating to various aspects in the organization. Useful bench marks are industry comparisons and company trends. ratios are usually two financial statements items that may be related to one another and may provide the prudent user a good deal of information. as such they may or not be meaningful. Once ratios are calculated.

Data Collection Methods The main sources of data were primary sources and secondary sources. Primary Sources Information as obtained from primary sources through management.. Miscellaneous Records. •    Internal Secondary Sources Financial accounts Discussion. o Content Analysis Secondary Sources Data taken is taken from Alkem Laboratories limited. The data was provided with sufficient guidance from the employees of the concern o Study of secondary data (Desk Work to collect all relevant information) o Unstructured in-depth personal interviews through direct communication. opinions and views of experts.” “A study on Financial Performance analysis of Alkem Page 32 . External Secondary Sources DITM COLLEGE Laboratories Limited.

” “A study on Financial Performance analysis of Alkem Page 33 .   Books Subject Literature Internet Tools Used   Ratios Graphical Presentation DITM COLLEGE Laboratories Limited.

1)Current Ratio: Current Ratio is the ratio.” “A study on Financial Performance analysis of Alkem Page 34 . DITM COLLEGE Laboratories Limited. which expresses the relationship between Current Assets and Current Liabilities.

31 Current Liabilities Current Ratio (Rs. current liabilities.11 10.18 36.Cr.58 4.10 25. and Current Ratio from 2005-2006 to 2009-2010 .05 3.” “A study on Financial Performance analysis of Alkem Page 35 .Expression of Current Ratio: Current Assets (CA) Current Ratio = Current Liabilities (CL) # 1 Table showing the calculation of Current Ratio from 2005-2006 to 2009-2010: Current Assets Year (Rs.77 27.79 32.) 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 21.) 4.23 # 1 Diagram showing increase or decrease in current assets.47 8.36 5. Cr.69 5.65 5.07 4. DITM COLLEGE Laboratories Limited.06 5.

that is the current assets should meet current liabilities at least twice In the year 2005-2006 to 2009-2010 Current Ratio is above than the expected standard or ideal current ratio.” “A study on Financial Performance analysis of Alkem Page 36 . DITM COLLEGE Laboratories Limited. It also indicates whether there is over – stocking or under – stocking. it indicates that the finance has huge inventories.) Quick Ratio / Acid Test Ratio: Quick ratio is the index of the financial liquidity or the short . the ability of a concern to meet its short – term obligations out of its quickly realizable assets). but the quick ratio is poor. 2.The rule of thumb says that the current ratio should be at least 2.term solvency of the concern is sound.Analysis and Interpretation: The standard or ideal Current Ratio is 2:1..e. If the current ratio is good. Hence. it can be inferred that the liquidity or the short.term solvency of a concern (i.

47 3.26 3.Cr.99 4.11 10.Expression of Quick Ratio: Quick Assets (QA) Quick Ratio = Quick Liabilities (QL) # 2 Table showing the calculation of Quick Ratio from 2005-2006 to 2009-2010: Quick Liabilities (Rs.47 8. quick liabilities and Quick Ratio from 2005-2006 to 2009-2010: DITM COLLEGE Laboratories Limited.65 5.16 20.) 15.06 5.67 Quick Ratio # 2 Diagram showing increase or decrease in quick assets.11 2.Cr.” “A study on Financial Performance analysis of Alkem Page 37 .) 4.58 3.17 20.46 Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Quick Assets (Rs.99 25.90 29.

Expression of Inventory Turnover Ratio: Net Sales Inventory Turnover Ratio = Inventory # 3 Table showing the calculation of Inventory Turnover Ratio from 2005-2006 to 2009-2010: DITM COLLEGE Laboratories Limited. Since the firm’s quick ratio is more than the normal standard it can be inferred that it has good liquidity position.Analysis and Interpretation: The standard or ideal Quick Ratio is 1:1. it indicates how efficiently stocks are being sold. In short. 3) Inventory Turnover Ratio: The inventory turnover ratio services the following purposes:  This ratio indicates the velocity or speed with which goods move out of the business. A high acid-test ratio is an indication that the firm is liquid and has the ability to meet its current or liquid liabilities in time.” “A study on Financial Performance analysis of Alkem Page 38 . it indicates the number of times the average stock of finished goods is turned over or sold during a year. In other words.

21 Inventory Turnover Ratio 6.35 6.10 4.92 4.64 4.” “A study on Financial Performance analysis of Alkem Page 39 . the lower amount of money is required to the inventory.63 6.27 6. DITM COLLEGE Laboratories Limited.81 6.82 44.96 29.35 30.45 6.54 # 3 Diagram showing increase or decrease in Inventory Turnover Ratio from 20052006 to 2009-2010: Analysis and Interpretation: A high inventory turnover ratio indicates efficient management because more frequently the stocks are sold.Inventory Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Net Sales 28.97 4.87 30.

i.82 22. Expression of Fixed Assets Turnover Ratio: Net Sales Fixed Assets Turnover Ratio = Fixed Assets # 4 Table showing the calculation of Fixed Assets Turnover Ratio from 20052006 to 2009-2010: Year Net Sales Fixed Assets Fixed Asset Turnover Ratio 2005DITM COLLEGE Laboratories Limited..26 “A study on Financial Performance analysis of Alkem Page 40 . Fixed Assets. mean net fixed assets. fixed assets less depreciation. total sales less sales returns.” 28.The inventory turnover ratio during the year 2006-07 and 2007-08 was better than the rest of the years.e.81 1. i. This ratio indicates as to what extent the fixed assets of a concern have contributed to sales. it indicates as to what extent the fixed assets have been utilized.. Turnover means net sales. It can be inferred that the company should take steps to in order to improve the inventory turnover ratio and make the business more prosperous. here.e. In other words. 4)Fixed Assets Turnover Ratio: The Fixed Assets Turnover Ratio indicates the proportionate of utilization fixed assets over total turnover of the company.

51 1.46 23.41 25.2006 20062007 20072008 20082009 20092010 44.32 1.35 30.87 30.18 # 4 Diagram showing increase or decrease in Fixed Assets Turnover Ratio from 2005-2006 to 2009-2010: Analysis and Interpretation: The standard or Ideal Fixed Assets Turnover Ratio is 5 times. DITM COLLEGE Laboratories Limited.84 1.” “A study on Financial Performance analysis of Alkem Page 41 .51 23.21 24.96 29.25 1.

By seeing the fixed assets turnover ratio it can be inferred that it is less than the ratio and there is no effective utilization of fixed assests. • • The firm should manage its assets efficiently to maximize sales. Expression of Total Assets Turnover Ratio: Net Sales Total Assets Turnover Ratio = Total Assets # 5 Table showing the calculation of Total Assets Turnover Ratio from 2005-2006 to 2009-2010: DITM COLLEGE Laboratories Limited. The total asset turnover indicates the efficiency with which the firm uses all its assets to generate sales.” “A study on Financial Performance analysis of Alkem Page 42 . standard 5) Total Assets Turnover Ratio: Asset turnover is the relationship between sales and assets. the more efficiently its assets have been utilized. the higher the firm’s total asset turnover. It is calculated by dividing the firm’s sales by its total assets. • Generally.

30 51.21 47.55 0.61 0.96 29.35 30.23 0.82 44.87 0.60 0.10 55.Year Net Sales Total Assets Total Assets Turnover Ratio 20052006 20062007 20072008 20082009 20092010 28.47 # 5 Diagram showing increase or decrease in Total Assets Turnover Ratio from 2005-2006 to 2009-2010: DITM COLLEGE Laboratories Limited.99 64.” “A study on Financial Performance analysis of Alkem Page 43 .68 49.87 30.

But it has decreased from that year.67 20.) Debt -Equity Ratio: This ratio indicates the extent to which debt is covered by shareholders’ funds.63 31. It reflects the relative position of the equity holders and the lenders and indicates the company’s policy on the mix of capital funds.16 29. Table showing the calculation of Debt-Equity Ratio from 2005-2006 to 20092010: Debt-Equity Ratio Year Debt Equity 20052006 2006DITM COLLEGE Laboratories Limited.59 0. Therefore the company has to take steps for effective utilization of its assets 6.” 17. Expression of Debt Equity Ratio: Debt Debt Equity Ratio = Equity # 6.52 0.Analysis and Interpretation: The year 2006-2007 shows effective utilization of total assets.63 “A study on Financial Performance analysis of Alkem Page 44 .

52 0.74 0.15 32.” “A study on Financial Performance analysis of Alkem Page 45 .95 23.79 36.74 # 6 Diagram showing increase or decrease in the Debt-Equity Ratio from 20052006 to 2009-2010: DITM COLLEGE Laboratories Limited.2 27.49 32.70 0.2007 20072008 20082009 20092010 16.

” “A study on Financial Performance analysis of Alkem Page 46 .  It indicates the long-term solvency of the concern.e.  It indicates the general financial strength of the concern. proprietor’s funds) and loaned capital (i.. borrowed funds).term creditors is relatively more. 7.) Proprietary Ratio: The proprietary ratio serves the following purposes:  It indicates the proportion of total assets financed by the proprietors.e..  It indicates the proportion between owned capital (i.Analysis and Interpretation: The standard or ideal Debt-Equity Ratio is 1:1Since the debt-equity ratio is less than the standard throughout the 5 years it can be inferred that the financial structure of the undertaking is not strong and so the stake of the long.  It indicates the relative risk of the owners and the creditors of the enterprise.  It is a test of the long-term credit strength of the concern. Expression of Proprietary Ratio: Net Worth Proprietary Ratio = DITM COLLEGE Laboratories Limited.

” “A study on Financial Performance analysis of Alkem Page 47 .58 0.63 31.57 20052006 20062007 20072008 20082009 20092010 29.10 55.15 32. total assets and the Proprietary Ratio from 2005-2006 to 2009-2010: DITM COLLEGE Laboratories Limited.52 32.74 47.79 36.30 51.Total assets #7 Table showing the calculation of Proprietary Ratio from 2005-2006 to 20092010: Year Net Worth Total Assets Ratio 0.99 64.23 # 7 Diagram showing increase or decrease in net worth.68 49.63 0.61 0.65 0.

) Interest Coverage Ratio: The Interest Coverage Ratio indicates as to how many times the net profit of a concern covers its fixed charges.57 times in the year 2009-2010. it can be inferred the company has to take steps to make the financial position of the concern strong. In the year 2007-2008 Proprietary Ratio was 0. 8. If indicates whether the business would earn sufficient profits to pay the interest charges periodically.” “A study on Financial Performance analysis of Alkem Page 48 . which decreased to 0.65 times. Thus as the Proprietary ratio has decreased during the year.Analysis and interpretation: There is no standard or ideal Proprietary Ratio. Expression of Interest Coverage Ratio: DITM COLLEGE Laboratories Limited.

” “A study on Financial Performance analysis of Alkem Page 49 .95 1.45 1.88 2.99 1.09 1.) Interest coverage Ratio Year 20052006 20062007 2007-2008 (Rs.40 1.68 1.75 1.67 0.67 1.11 20082009 20092010 1.Cr.15 # 8 Diagrams showing increase or decrease in Interest Coverage Ratio from 20052006 to 2009-2010: DITM COLLEGE Laboratories Limited.16 1.89 2.Interest Coverage Ratio = N/P before deducting fixed charges and income tax Fixed Charges # 8 Table showing the calculation of Interest Coverage Ratio from 2005-2006 to 2009-2010: PBIT Interest (Rs.28 1.Cr.) 1.

Analysis and Interpretation:

The standard or ideal Interest Coverage Ratio is 6 times. In the year 2005-2006 Interest Coverage Ratio was 1.09 times. 0.53 which increased to 1.16 times in the year 2006-2007 which afterwards decreased. Thus it can be inferred to ensure greater margin of safety for long term creditors and so there will not be any difficulty for the concern to obtain long term funds it has to improve its performance.

9) Return on Net Worth: It expresses the relationship between net profits (after interest and tax) and the proprietor’s funds. Expression of Return on Net Worth

DITM COLLEGE Laboratories Limited.”

“A study on Financial Performance analysis of Alkem

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Net Profit Return on Net Worth= Shareholder’s Funds

# 9 Table showing the calculation of Return on Net Worth from 2005-2006 to 20092010:

Year

Net Profit(Rs.Cr.)

Shareholder’s funds(Rs.Cr.)

Return on net Worth

20052006 20062007 20072008 20082009 20092010

0.18 0.33 0.25 0.17 0.26

29.63 31.52 32.15 32.79 36.74

0.61 1.05 0.78 0.52 0.70

# 9 Diagrams showing increase or decrease in Return on Net Worth from 2005-2006 to 2009-2010:

DITM COLLEGE Laboratories Limited.”

“A study on Financial Performance analysis of Alkem

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Analysis and Interpretation: The ratio measures the overall efficiency of a firm. As this ratio reveals how well the resources are being used, higher the ratio, better are the results. So the concern has to work upon improving its efficiency for the coming years.

10). Gross Profit Ratio: Gross Profit Ratio measures the relationship between gross profit to net sales and is usually represented as a percentage. The two basic components of the gross profit ratio are sales and cost of goods sold since gross profit is simply the

DITM COLLEGE Laboratories Limited.”

“A study on Financial Performance analysis of Alkem

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84 % 9% DITM COLLEGE Laboratories Limited.96 29.. if any.01 2.Cr.21 8.26 % 8.73 2. It reflects the efficiency with which a firm produces its products or acquires them. Expression of Gross Profit Ratio: Gross Profit Gross Profit Ratio = Net Sales # 10 Table showing the calculation of Gross Profit Ratio from 2005-2006 to 20092010: Gross Year Profit (Rs.) (Rs.87 30. Net sale scan be found by deducting sales returns or returns inwards.52 % 10.26 % 6.) Net Sales Gross Profit Ratio * 100 20052006 20062007 20072008 20082009 20092010 2. out of the sales.38 2.93 3.excess of net sales over cost of goods sold. There is no standard norm for Gross profit ratio and hence it may vary from business to business.72 28.” “A study on Financial Performance analysis of Alkem Page 53 .82 44.35 30.Cr.

etc . excessive competition. lesser sales. The higher the Gross Profit Ratio. Net Profit Ratio: Net Profit Ratio measures the relationship between Net profit (after taxes) to net sales and is usually represented as a percentage DITM COLLEGE Laboratories Limited.It seems that the concern is in good position. lower selling prices. better the result. generally indicates high cost of goods sold due to unfavourable purchasing policies. A low Gross profit ratio. over investment in plant and machinery. 11).” “A study on Financial Performance analysis of Alkem Page 54 .# 10 Diagram showing increase or decrease in Gross Profit Ratio from 2005-2006 to 2009-2010: Analysis and Interpretation: The Gross Profit Ratio indicates the extent to which selling prices of goods per unit may decline without resulting in loses on operations of a firm.

85 % 0.) 28.21 0.96 29.87 30.Expression of Net Profit Ratio: Net Profit after tax Net Profit Ratio = Net Sales *100 # 11 Table showing the calculation of Net Profit Ratio from 2005-2006 to 20092010: Net Year Net Sales (Rs.) 20052006 20062007 20072008 20082009 20092010 0.33 0.Cr.55 % 0.17 0.18 0.35 30.” “A study on Financial Performance analysis of Alkem Page 55 .25 0.62 % 0.86 % Net Profit Ratio Profit (Rs.Cr.73 % 0.82 44.26 DITM COLLEGE Laboratories Limited.

” “A study on Financial Performance analysis of Alkem Page 56 . selling. Obviously higher the ratio. It can be inferred that the profitability of the firm is good. administrative.# 11 Diagram showing increase or decrease in Net Profit Ratio from 2005-2006 to 2009-2010: Analysis and Interpretation: The Net Profit Ratio indicates the efficiency of the management in manufacturing. DITM COLLEGE Laboratories Limited. and other activities of the firm. the better is the profitability.

79 36.55 25.91 0.52 32.12) Fixed Assets to Net Worth Ratio: The ratio establishes the relationship between fixed assets and shareholder’s funds.) 20052006 20062007 20072008 20082009 20092010 DITM COLLEGE Laboratories Limited.74 Net FA to Worth Ratio 0.20 28. Expression of Fixed Assets to Net Worth Ratio Net Fixed Assets Fixed Assets to Net Worth Ratio = Shareholder’s Funds # 12 Table showing the calculation of Fixed Assets to Net Worth Ratio from 20052006 to 2009-2010: Net Fixed Year Shareholde rs Funds (Rs.Cr.86 0.84 0.69 Assets (Rs.81 27.67 27.92 0.) 29.51 “A study on Financial Performance analysis of Alkem Page 57 .Cr.15 32.63 31.” 27.

” “A study on Financial Performance analysis of Alkem Page 58 . DITM COLLEGE Laboratories Limited. It can be inferred that ratio is decreasing from 2005-06 and so it is satisfactory and the company is in good position.# 12 Diagram showing increase or decrease in Fixed Assets to Net Worth Ratio from 2005-2006 to 2009-2010: Analysis and Interpretation: The ratio indicates the extent to which the shareholder’s funds are sunk into fixed assets.

” “A study on Financial Performance analysis of Alkem Page 59 . 2. Total Assets Turnover Ratio: The year 2005-2006 shows effective utilization of total assets. Inventory Turnover Ratio: The inventory turnover ratio during the year 2006-07 and 2007-08 was better than the rest of the years. 3. Therefore the company has to take steps for effective utilization of its assets DITM COLLEGE Laboratories Limited. Quick Ratio: The firm’s quick ratio is more than the normal standard it can be inferred that it has good liquidity position. Fixed Assets Turnover Ratio: By seeing the fixed assets turnover ratio it can be inferred that it is less than the standard and so there is no effective utilization of fixed assets 5.FINDINGS AND CONCLUSION 1. it can be inferred that the liquidity or the short.term solvency of the concern is sound. But it has decreased from that year. Hence. Current Ratio: In the year 2005-2006 to 2009-2010 Current Ratio is above than the expected standard or ideal current ratio. It can be inferred that the company should take steps to in order to improve the inventory turnover ratio and make the business more prosperous 4.

As this ratio reveals how well the resources are being used. which increased to 1. 8. DITM COLLEGE Laboratories Limited.65 times. better the result. Gross Profit Ratio: The Gross Profit Ratio indicates the extent to which selling prices of goods per unit may decline without resulting in loses on operations of a firm.It seems that the concern is in good position.16 times in the year 2006-2007 which afterwards decreased.term creditors is relatively more 7. Proprietary Ratio: In the year 2005-2006 Proprietary Ratio was 0. So the concern has to work upon improving its efficiency for the coming years. it can be inferred the company has to take steps to make the financial position of the concern strong.09 times. Return on Net Worth: The ratio measures the overall efficiency of a firm. 9.57 times in the year 2007-2008. Thus as the Proprietary ratio has decreased during the year.6. Debt-Equity Ratio: The debt-equity ratio is less than the standard through out the 5 years it can be inferred that the financial structure of the undertaking is not strong and so the stake of the long. Thus it can be inferred to ensure greater margin of safety for long term creditors and so there will not be any difficulty for the concern to obtain long term funds it has to improve its performance.” “A study on Financial Performance analysis of Alkem Page 60 . better are the results. higher the ratio. Interest Coverage Ratio: In the year 2005-2006 Interest Coverage Ratio was 1. . The higher the Gross Profit Ratio. 10. which decreased to 0.

Thus. Fixed Assets to Net Worth Ratio: Ratio is decreasing from 2005-06 and so it is satisfactory and the company is in good position. selling. The concern also has sufficient funds to meet its day-to-day expenditure and there is also high productivity of assets. It can be inferred that the profitability of the firm is good.11. it can be concluded that the financial position of the Alkem Laboratories Limited. the better is the profitability. administrative. and other activities of the firm. is strong and the risk for creditors is relatively less. Net Profit Ratio: It indicates the efficiency of the management in manufacturing. Obviously higher the ratio. Thus the performance of Alkem Laboratories Limited and the future prospects is better. Alkem Laboratories is also sound and it is in a position to pay off its short-term liabilities out of its quickly realizable assets without any difficulty.” “A study on Financial Performance analysis of Alkem Page 61 . But there should be effective utilization of fixed and current assets. The firm’s profitability position is good. The liquidity position of. 12. DITM COLLEGE Laboratories Limited.

LIMITATIONS DITM COLLEGE Laboratories Limited.  The concern is paying higher interest on some of its liabilities and therefore interest coverage ratio is low.” “A study on Financial Performance analysis of Alkem Page 62 .  The company should finance its long term funds by debt and thus achieve a balance between debt and equity.  The company should finance its long term funds through public issue and thus achieve a balance between equity and debt  Sales should be improved through various measures which would help to improve the turnover ratios and proper utilization of assets and better return to shareholders.Suggestions  The company should concentrate on improving the overall efficiency of the concern by increasing its return on net worth so as to attract more investors and to increase the market value of the shares. Therefore the concern should take some measures regarding it.  The company should try to minimize excessive investment in inventories as it reduces profitability.

I was unable to get better responses from them.  Scarcity of monetary fund.  Due to the busy schedule of the employees. BIBLIOGRAPHY Books: DITM COLLEGE Laboratories Limited.  The vast. Restriction to enter in the plant area. i. Financial performance analysis.” “A study on Financial Performance analysis of Alkem Page 63 . vague and controversial topic of the study.  Paucity of time.e.

com www. Management Accounting. Himalaya Publication House. Financial Management. Prof. United Publishers. Tata McGraw Hill Publishing Co.alkemlabs. Financial Management Theory and Practice. ltd. 2002 2. 2002 4. & Sharma.K. 2000 Websites: Wikipedia. Kalyani Publishers.) Chandra. Prasanna. Shashi K.M. I.. 2002 3.) Khan & Jain. Management Accountancy. 2001 5.) Reddy and Appannaih.) Pandey. P.com Investopedia.” “A study on Financial Performance analysis of Alkem Page 64 . Vikas Publishing House pvt ltd.) Gupta.1.com DITM COLLEGE Laboratories Limited. Financial Management.

DITM COLLEGE Laboratories Limited.” “A study on Financial Performance analysis of Alkem Page 65 .

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