GROUP 5

Sector-Cement
Team Members:
Priyesh Raj – Ultratech Cement
Gurudatta Dakhole – Shree Cement
Mayuri Kuchanwar – Birla Corporation Ltd
Mayur Naik – India Cement
Aditya Dhokne – JK Lakshmi Cement
Aditya Kartha – Ramco cement
 ULTRATECH COMPANY

UltraTech Cement Ltd. ranks at first in the list of top 10 cement companies in
India. It is the largest producer and exporter of cement in India. It is also one of the
leading cement manufacturers in the world. UltraTech Cement Ltd. has 23
integrated, 1 clinkerisation plant, 26 grinding units, 7 bulk terminals and 100+ ready
mix concrete plants in India. In which Vikram Cement Works is the Asia’s largest
cement plant. Its operations span across India, UAE, Bahrain, Bangladesh and Sri
Lanka.
➢ Company's Owner: Aditya Birla Group
➢ Establishment: 1983
➢ Headquarter: Mumbai, Maharashtra
➢ Production Capacity: More than 116.75 MTPA (million tons per annum).
➢ Revenue: ₹ 42,772.60 Cr.
➢ Total Assets: ₹ 79,337.13 Cr.
➢ Total Equity: ₹ 39,115.48 Cr.
➢ Market Share: 21.45 %
Products

Gray Cement New Age Products

UltraTech Cement (OPC, PPC and UltraTech Xtralite UltraTech Weather Plus
PSC)

UltraTech Super Cement (PPC) UltraTech Fixoblock UltraTech Seal & Dry

UltraTech Premium Cement (PSC) UltraTech Powercrout UltraTech Readiplast

Birla Super Cement (OPC and PPC) UltraTech Concrete UltraTech Super Stucco

Birla White Cement & Putty (White Cement)

➢
Market analyses of ultratech cement

Reviewing the market price (For the last 3 years)

The share price of the company was 3998.35 rupees on march 2019. On
mar 2020 the price of the share was 3244.854 and due to the covid 19
restrictions and lockdown there was a slight drop in market price of
company as compared to march 2019. The market price of the company
again improves and it was priced at rupees 6785.60 about two times as
compared to march 2020. Currently it is priced at rupees 7237.00.
 Shree Cement Ltd.

Base Company- Ultratech Cement

Sector- Cement Industry

1. Introduction
Shree Cement is an Indian cement manufacturer, founded in Beawar, Rajasthan, in 1979.
Now headquartered in Kolkata, it is one of the biggest cement makers in Northern India. It
also produces and sells power under the name Shree Power (Captive Power Plant) and Shree
Mega Power (Independent Power Plant).
Shree Cement has a consolidated Cement Production Capacity of 47.4 Million tonnes per
annum (including overseas) and a Power Generation Capacity of 752 Megawatts.
It’s operations span across India and the UAE with 4 integrated plants in India, 1 in UAE and
9 Grinding Units. Shree Cement was also among the industry pioneers for the use of alternate
fuel resources in the production of cement.
Shri BG Bangur is now the chairman of the company
The company has a Revenue of Rs 13,142 crores INR (US$1.8 billion, 2020) net profit of
2,289 cr in 2020.
The company also received Corporate Governance and Sustainability Vision Award-2019 by
Indian Chamber of Commerce.
 2. Analysis
The share price of the company was 18667.65 rupees on march 2019 there was a dividend of
600 on the aug 2019. On mar 2020 the price of the share was 17666.25 which went down
down due to the covid 19 restrictions and lockdown and company gave 1100 dividend on aug
2020. After that share price went up to 29951.63 company gave 600 dividend on mar 2021.
The market price of the company gave dividend of 600 on sep 2021.
 Birla Corporation Ltd

Base Company- Birla Corporation

Sector- Cement

3. Introduction
Birla corporation limited is the flagship company of the M.P Birla group.
Incorporated as Birla Jute Manufacturing company limited in 1919, it was late
MR. Madhav Prasad Birla who gave shape to it. As a chairman of company he
transformed it form a manufacturing of jute goods to a leading multi-product
corporation with a wide spread activities. Under the chairmanship of MRS.
Priyamvada Birla, the company crossed the Rs.1300 crore turnover mark and
the name was changed to Birla Corporation Ltd. In 1998.
MR. Harsh V Lodha is now the chairman of the company
The company has turnover PF Rs.6785.45 cr in 2020-21 and a net profit of
630.12 cr. The company is primarily engaged in the manufacturing of cement as
its core business activity.
The company has acquired 100% shares of reliance cement company private
limited (Reliance Cement). The entire RIL has been acquired a enterprise value
of Rs.4800 cr. The acquisition provides Birla Corporation Ltd. with the
ownership of high quality assets, taking its total capacity from 10 MPTA to 15.6
MPTA.
4. Management
Founder- Ghanshyam Das Birla
Charman- MR. Harsh V Lodha
CEO- MR. Arvind Pathak
5. Analysis

a. Reviewing the market price (For the last 3 years)

The share price of the company was 472.15 rupees on march 2019 there
was a dividend of 7.5 on the aug 2019. On mar 2020 the price of the share
was 701.05 and due to the covid 19 restrictions and lockdown there was a
drop in market price of company and it reached to 414.10. After that
company gave 7.5+7.5 dividend on aug 14 & aug 17 2020. The market
price of the company gave dividend of 10 on sep 2021.
The pro of company is that the company has delivered good profit growth
of 33.85% CAGR over last 5 years.
 India Cement
Base Company- India Cement
Sector- Cement
1. Introduction
India Cements Limited is a cement manufacturing company in India. The
company is headed by former International Cricket Council chairman N.
Srinivasan.
It was established in 1946 by S. N. N. Sankaralinga Iyer and the first plant was
set up at Thalaiyuthu in Tamil Nadu in 1949. It has 7 integrated cement plants
in Tamil Nadu, Telangana and Andhra Pradesh, one in Rajasthan (through its
subsidiary, Trinetra Cement Ltd) and two grinding units, one each in Tamil
Nadu and Maharashtra with a capacity of 15.5 million tonnes per
annum. Sankar Cement, Coramandel Cement and Raasi Gold are the brands
owned by India Cements.

2. Management
Founder- Shri S N N Sankaralinga Iyer and Sri T S Narayanaswami
Chairman-N Srinivasan
CEO- Rakesh Singh
 3. Analysis

(a)Reviewing the market price (for last 3 years):

The share price of the company was 180.30 rupees on march 2019
there was a gradual decrease in the share price after march 2020 due to
lockdown. The market gained its price after June 2020 and since then
the market is still growing. The current share price of India cement is
184.50 Rs.
The pro of this company is that the company has gained the good
profit growth even after the down of 70.750Rs.
 JK Lakshmi Cement Limited

JK Lakshmi Cement Limited is a part of the prestigious JK Organisation. This

eminent industrial house is over a hundred and twenty five years old and boasts
operations in India and abroad with a leadership presence in the fields of tyre,
cement, paper, power transmissions, sealing solutions, dairy products and
textiles.
We are a renowned and well established name in the Indian Cement industry for
three decades and have an annual turnover of over Rs 4000 crores. We have a
formidable presence in Northern, Western and Eastern India's cement markets.
➢ Company's Owner: Bharat Hari Singhania
➢ Establishment: 1938
➢ Headquarter: New Delhi
➢ Production Capacity: 11.0 Million Tones of cement
➢ No. of Employees: 1,765 total employees
➢ Revenue: ₹ 4384.71 Cr.
➢ Total Assets: ₹ 1021.32 Cr.
➢ Total Sales: ₹ 4459.18 Cr.
Market Analysis of JK Lakshmi Cement

Reviewing the market price (For the last 3 years)

The share price of the company was 347.15 INR on march 2019. On mar 2020
the price of the share was 200.80 INR and due to the covid 19 restrictions and
lockdown there was a slight drop in market price of company as compared to
march 2019. The market price of the company again improves and it was priced
at rupees 362.85 INR as compared to march 2020. Currently it is priced at
rupees 550.50
 Ramco Cement Ltd

1) Introduction

The Ramco Cements Limited is the flagship company of the Ramco Group, a well-known
business group of South India. It is headquartered at Chennai. The main product of the company
is Portland cement, manufactured in eight state-of-the art production facilities that includes
Integrated Cement plants and Grinding units with a current total production capacity of 16.45
MTPA (out of which Satellite Grinding units capacity alone is 4 MTPA). The company is the fifth
largest cement producer in the country. The company also produces Ready Mix Concrete and
Dry Mortar products, and operates one of the largest wind farms in the country.
In the 1950s, investment in Cement Industry was not attractive due to price controls and the
massive investments required. Only those entrepreneurs who were not profit-minded but cared
for the country's development came forward to invest in the Cement Industry.

When Shri. Manubai Shah, Central Minister for Industries in late fifties came to Madras to meet
the Industrialists, he called upon Shri P A C Ramasamy Raja and requested him to start a
cement factory in TN. This was readily accepted by Shri PACR and this marked the birth of The
Ramco Cements Limited in 1961.

2) Management

Founder- Shri P A C Ramasamy Raja

Chairman & Managing Director- Shri.P.R.Venketrama Raja
(B) LIQUIDITY RATIOS
1. Current Ratio

Company/ Ultratech Shree Birla India JK Lakshmi Ramco

Year Cement Cement Corporation Cement Cement
2021 0.81 2.04 0.73 1.16 1 0.6
2020 1.01 2.13 0.65 1.26 0.85 0.67
2019 1.04 2 0.74 1.22 0.72 0.67
Current ratio gives the proportion of current assets to current liabilities of a business
concern.
𝐶𝑢𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Current Ratio
2021 2020 2019

2.5

1.5

0.5

0
Ultratech Cement Shree Cement Birla Cement India Cement JK Lakshmi Romco
Cement

Interpretation:
• The current ratio is a liquidity ratio that measures a company's ability to pay short-
term obligations or those due within one year.
• A decrease in current ratio means that there are problems with inventory
management, ineffective or lax standards for collecting receivables or an excessive
cash burn rate.
• If a company’s current ratio falls below 1 the company likely won’t have enough liquid
asset to pay off its liabilities
• From the above graph it is observed that Birla corporation and Ramco has the lowest
current ratios, whereas Shree cement has the highest followed with India, Ultratech
and JK Lakshmi cement.
• Thus Ramco and Birla does not have enough liquid assets to pay off its liabilities.
 2. Quick ratio
Quick ratio gives the proportion of quick assets to current liabilities. It indicates
weather the business concern is it able to pay its current liabilities as and when they
become due, out of its quick assets.
𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Company/ Ultratech Shree Birla India JK Lakshmi Ramco

Year Cement Cement Corporation Cement Cement
2021 0.98 1.62 0.46 0.96 0.76 0.35
2020 0.77 1.41 0.42 0.98 0.54 0.4
2019 0.61 1.2 0.47 0.93 0.48 0.4

Quick Ratio
2021 2020 2019

1.5

0.5

0
Ultratech Shree Cement Birla corporation India Cement JK Lakshmi Romco
Cement

Interpretation:
• A decline in quick ratio can be attributable to an short term debt a decrease in current
asset or a combination of both regardless of the reasons, a decline in this ratio means a
reduced ability to generate cash marely paying of some current liabilities can improve
your current ratio.
• From the above graph it is observed that Ultratech, Shree and JK Lakshmi cement
has a gradual decline, whereas Birla, India and Ramco has no decline.
• Thus Ultratech, Shree and JK Lakshmi needs to pay off their current liabilities to
improve the current ratio.

(c)Turnover Ratios
1.Inventory TurnOver Ratio
This Ratio shows the relationship between the costs of goods sold during
a given period and the average amount of stock carried during the
period.
 Inventory Turnover Ratio = Cost of goods sold
Average Inventory
Average Inventory = Opening Inventory + Closing Inventory 2

Company Ultra Shree Birla India JK Ramco

Year Tech Cement Corp Cement Lakshmi

2021 11.6 8.52 7.51 7.6 8.31 8.81

2020 10.6 8.34 8.13 6.12 7.66 8.32

2019 10.56 7.38 7.52 6.84 9.7 9.2

70
62
60

50
42
38
40

30 25.4
22.81 23.63 25.7 25.35
21 19.3519.67
18.2720.5316.23
20 14.09 12 10.56 11
10

0
Ultra Tech Shree Cement Birla Corp India Cement JK Lakshmi Ramco

2021 2020 2019

Interpretation
As per the graph Ultra Tech Cement has the higher Inventory Turnover Ratio in 2021 than the other
company followed by Ramco and Shree Cement.
There is a decrease in Inventory turnover ratio of JK Lakshmi Cement from 9.7 in year 2019 to 7.66
in year 2020.

2.Account Receivables turnover Ratio

This ratio indicates the relationship between net credit sales and trade
debtors. It shows the rate at which cash is generated by turnover of
debtors.

Account Receivables Turnover Ratio = Net Credit Sales

 Average Accounts Receivable
Average Accounts Receivable = Beginning accounts receivable + Ending accounts receivable
2
Company Ultra Shree Birla India JK Ramco
Year Tech Cement Corp Cement Lakshmi

2020-2021 21 14.09 23.63 18.27 62 12

2019-2020 19.35 25.4 25.70 20.53 42 10.56
2018-2019 19.67 22.81 25.35 16.23 38 11

2021 2020 2019

62

42
38

25.4
22.81 23.6325.725.35
21 19.3519.67 20.53
18.27 16.23
14.09 12 10.56 11

Ultra Tech Shree Cement Birla Corp India Cement JK Lakshmi Ramco

Interpretation
As per the graph the account receivable turnover Ration is higher for the Jk Lakshmi Cement
in 2021 followed by Birla Corp and Ultra Tech.
For all the years the account Receivable turnover Ratio is high for Jk Lakshmi cement than
the other companies in three years.
A higher account receivable turnover ratio indicates that debts are being collected more
quickly.
(d) Profit Margin Ratios
Profitability refers to the ability of a business to earn a profit. It shows the
efficiency of the business. These ratios measure the profit earning capacity of
the company.

1.Gross Profit Ratio = This ratio shows the margin of profit on sales.
The formula for its calculation is as follows:
Gross Profit Ratio = Gross Profit * 100
Net Sales
YEAR ULTRATECH SHREE BIRLA INDIA JK RAMCO
CORP. CEMENT LAKSHMI
2020- 19.75 22.36 10.10 1.34 13.58 22.63
2021
2019- 15.24 16.59 11.03 1.65 11.97 15.11
2020
2018- 11.89 10.75 5.80 2.16 6.06 14.14
2019

Gross Profit Ratio

25 22.36 22.63
19.75
20 16.59
15.24 15.11
14.14
13.58
15 11.89 11.97
10.75 10.111.03
10 5.8 6.06
5 1.341.652.16
0
ULTRATECH SHREE BIRLA CORP. INDIA CEMENT JK LAKSHMI RAMCO

2020-2021 2019-2020 2018-2019

➢ As per chart, SHREE and Ramco has highest GPR in year 2020-21,
followed by Ultratech and Jk Lakshmi.
➢ There is decrease in GPR of BIRLA in 2021 as compared to 2020.
➢ Negative growth is observed in GPR of India cement, continuously from
2019 to 2021. An increase in the manufacturing expenses such as
carriage, freight, wages and power will increase the cost of production
and reduce gross profit margin.
2.Net Profit Ratio = Net Profit is the gross profit less selling, distribution and
financial Expense.
Net Profit = (Gross Profit + Operating and non-Operating income –
operating and non-operating expenses)
The formula for its calculation is as follows:
Net Profit Ratio = Net Profit * 100
Net Sales

YEAR ULTRATECH SHREE BIRLA INDIA JK RAMCO

CORP. CEMENT LAKSHMI
2020-2021 12.36 18.36 9.64 1.23 8.35 14.44
2019-2020 13.42 13.19 6.65 -0.7 5.84 11.19
2018-2019 6.03 8.11 3.11 1.23 2.06 9.83

20 18.36 NPR RATIOS

14.44
15 13.42 13.19
12.36
11.19
9.64 9.83
10 8.11 8.35
6.03 6.65 5.84
5 3.11
1.23 1.23 2.06

0
ULTRATECH SHREE BIRLA CORP. INDIA-0.7
CEMENT JK LAKSHMI RAMCO
2020-2021 2019-2020 2018-2019
-5

➢ Ultratech, Shree, Birla Corp, Jk Lakshmi and Ramco has a positive

increase in NPR, since last three years which shows better
Performance except India Cements.
➢ India cements has a negative NPR in year 2019-2020, which may
be due to managerial inefficiency and excessive selling and
distributive expenses.
3.Operating Ratio = This ratio indicates the proportion that the cost of goods
sold bears to sales. It reveals the cost content and operational expenses
absorbed in the sales.
The formula for its calculation is as follows:

Operating Ratio = (Cost of goods sold + Operating Expenses) * 100

Net Sales

YEAR ULTRATECH SHREE BIRLA INDIA JK RAMCO

CORP. CEMENT LAKSHMI
2020- 25.38 31.41 13.72 11.57 19.00 30.05
2021
2019- 21.28 30.86 14.22 11.33 17.12 21.89
2020
2018- 17.69 22.63 9.16 12.97 11.32 20.72
2019

40
OPERATING RATIO
31.41 30.05
30.86
30 25.38
21.28 22.63 21.89
19 20.72
20 17.69 17.12
14.22
13.72 12.97
11.57
11.33 11.32
9.16
10

0
ULTRATECH SHREE BIRLA CORP. INDIA CEMENT JK LAKSHMI RAMCO
2020-2021 2019-2020 2018-2019

➢ Higher ratio indicates lower efficiency because a major part of sales is

eaten up by operating cost.
➢ In case the operating ratio is higher the business will have to identify the
causes for its increase, because it may not be the good symptom for the
business.
➢ Ratio is lower, indicates better efficiency of the business.
➢ EPS (Earning per Share):
 (e)
1. Return on Asset
Company/ Ultratech Shree Birla India JK Lakshmi Ramco
Year Cement Cement Corporation Cement Cement
2021 6.64 10.98 5.39 2.04 7.8 6.7
2020 7.59 8.11 4.02 0.52 5.17 5.98
2019 3.48 6.25 1.76 0.62 1.78 6.23

Chart Title
2021 2020 2019

12 10.98

10
8.11 7.8
7.59
8 6.7
6.64 6.25 5.986.23
6 5.39 5.17
4.02
4 3.48

1.76 2.04 1.78

2
0.520.62
0
Ultratech Cement Shree Cement Birla Corporation India Cement JK Lakshmi Cement Ramco

2.Return on Equity:

16
14
12
10
Axis Title

8
6
4
2
0
Shree India
Ultra Tech Birla Corp JK Lakshmi Ramco
Cement Cement
2021 12.32 14.84 4.1 7.04 7.8 13.52
2020 14.4 11.66 9.11 4.24 13.73 12.22
2019 8.64 10.4 11.38 4.2 5.22 11.34
 (f)
1. Earning Per Share is a financial ratio, which divides net
earnings available to common shareholders by the average outstanding
shares over a certain period of time. The EPS formula indicates a
company’s ability to produce net profits for common shareholder

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 − 𝑃𝑟𝑒𝑓𝑓𝑒𝑟𝑒𝑑 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑

𝐸𝑃𝑆 =
𝑊𝑒𝑖𝑔ℎ𝑡𝑒𝑑 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆ℎ𝑎𝑟𝑒 𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔

Company/ Ultratech Shree Birla India JK Lakshmi Ramco

Year Cement Cement Corporation Cement Cement Cement
2021 185.2 640.77 55.65 7.15 30.92 32
2020 189.15 445.08 41.02 6.62 19.99 25
2019 84.33 273 17.89 2.07 6.76 21

700
650
600
550
500
450
400
2021
350
300 2020
250
200 2019
150
100
50
0
Ultratech Shree Birla India JK Ramco
Lakshmi
➢

Interpretation:
• Highest EPS has been observed of Shree Cement which is 640.77
in the year 2021.
• Lowest EPS has been observed of India Cements which is 2.07 in
the year 2019.
• EPS of Shree Cements has been highest with an average EPS of
452 in 3 years , followed by Ultratech Cement of average EPS which is
153 and average EPS of Birla Corporation which is 38.
• From the above, it has been observed that the performance of
Shree Cement has been exceptional.
 2.P/E Ratio is calculated by dividing the market price of a share by the
earnings per share.
𝑆ℎ𝑎𝑟𝑒 𝑃𝑟𝑖𝑐𝑒
𝑃𝐸 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

Company/ Ultratech Shree Birla India JK Lakshmi Ramco

Year Cement Cement Corporation Cement Cement Cement
2021 36.63 6.6 11.62 0.64 13.84 28.8
2020 25.63 8 6.36 0.61 9.7 22.7
2019 47.41 10 15.81 0.92 51.2 33.18

60

50

40
2021
30 2020
2019
20

10

0
➢ Ultratech Shree Birla India JK Lakshmi Ramco

Interpretation:

• Highest PE ratio has been observed of JK Lakshmi which is 51.2 in the year 2019.

• Lowest PE ratio has been observed of India Cements which is 0.61 in the year 2020.

• EPS of Ultratech Cements has been highest with an average PE ratio of 36.6 in 3 years ,
followed by JK Lakshmi Cement of average PE ratio which is 24.9 and average PE ratio of Birla
Corporation which is 11.26.
 3.Dividend Yield Ratio
The dividend yield, expressed as a percentage, is a financial ratio (dividend/price) that
shows how much a company pays out in dividends each year relative to its stock price

Company
Financial Year Ultratech Shree Birla India J K Laxmi Ramco
2018-19 0.16 0.03 1.43 0.02 0.75 0.4
2019-20 0.4 0.05 1.8 0.01 2.5 0.4
2020-21 0.5 0.02 1.05 0.04 3.75 0.3

Dividend Yield Ratio

4
3.5
3
2.5
Ratio

2
1.5
1
0.5
0
Ultratech Shree Birla India J K Laxmi Ramco
2018-19 0.16 0.03 1.43 0.02 0.75 0.4
2019-20 0.4 0.05 1.8 0.01 2.5 0.4
2020-21 0.5 0.02 1.05 0.04 3.75 0.3

Interpretation:
• As per chart, J K Laxmi Cement has the highest Dividend Yield ratio in 2020-21 and
India cement has the lowest in that particular year.
• In the financial year 2019-20 J K Laxmi cement and India cement is highest and
lowest with 2.5 and 0.01 respectively.
• In the year 2018-19 the case is different as Birla has the highest with 1.43 and india
with lowest at 0.02.
 (G)Debt Equity Ratio
Debt equity ratio is calculated to assess the long-term solvency position of a business
concern.
𝐿𝑜𝑛𝑔𝑡𝑒𝑟𝑚 𝐷𝑒𝑏𝑡
𝐷𝑒𝑏𝑡 𝐸𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜 =
𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝐹𝑢𝑛𝑑𝑠
Company/ Ultratech Shree Birla India JK Lakshmi Ramco
Year Cement Cement Corporation Cement Cement
02021 0.34 0.11 0.21 0.57 0.54 0.55
2020 0.47 0.22 0.3 0.58 0.86 0.54
2019 0.7. 0.26 0.38 0.43 1.06 0.32

Debt Equity Ratio

2021 2020 2019

1.2

0.8

0.6

0.4

0.2

0
Ultratech Cement Shree Cement Birla Corporation India Cement JK Lakshmi Romco
Cement

Interpretation:
• A low dept equity ratio indicates a lower amount of financing by debt via
lenders, vs funding through equity via shareholders.
• A higher ratio indicates that the company is getting more of its financing
by borrowing money. Which subject the company to potential risk if debt
levels are too high.
• From the above graph we can see that Shree and Birla cement has the
lowest debt ratio, whereas JK Lakshmi has the hisgest folowed with
Ultratech, India and Ramco.
 (h) Fixed Asset Turnover Ratio
The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure operating
performance. This efficiency ratio compares net sales (income statement) to fixed assets
(balance sheet) and measures a company's ability to generate net sales from its fixed-asset
investments, namely property, plant, and equipment (PP&E).

Company
Financial Year Ultratech Shree Birla India J K Laxmi Ramco
2019 0.86 1.068 1.13 1.02 1.17 1.08
2020 0.83 0.951 1.26 1.08 1.16 1.18
2021 0.87 0.909 1.13 1.01 1.19 1.04

Fixed Asset Turnover Ratio

1.4

1.2

0.8
Ratio

0.6

0.4

0.2

0
Ultratech Shree Birla India J K Laxmi Ramco

Interpretation:
• As per the above chart, fixed asset turnover ratio has very little variation over the
three years among different companies.
• Birla has the highest fixed asset turnover ratio in 2019-20, J K Laxmi highest in 2020-
21 and 2018-19.
Conclusion:
Based on the above calculations financial conditions from the point of different stakeholders -
Owners, Management, creditors, Prospective investors are as follows:

I. Owner-Profitability
II. II. Creditors-Liquidity:
III. III.Management – Turnover
IV. IV. Prospective Investors - Market Indicators (EPS, P/E, DividendYield, Dividend Payout).

Creditors Point of View –

The Current Ratio of 1.33 or more is generally considered to be good ratio. In this project Shree
Cement’s current ratio is greater than 1.33, so from creditor's point of view all Shree Cement is
performing well and can easily meet short term liabilities.

Owner's Point of View -

The owner of a company is always interested in the profitability of a business. Profitability ratios are
a measure of the business's ability to generate revenue compared to the amounts of expenses it
incurs. A profit ratio between 10% and 20% is an average performance. Considering the GPR, NPR
and OR, ULTRATECH and Shree cement has a good profitability ratio. So owner of company have to
recognize what strategy company

Management's Point of View -

In manager's point of view turnover is most important for business. Under turnover ratio we
calculate two ratios. Namely: Inventory/Stock turnover ratio and account receivables turnover. So
from manager's point of view this company is performing moderate than other. According to the
above interpretation JK Lakshmi has the good turnover ratio.

Prospective Investor's Point Of View -

Prospective investors are always interested in market indicators like EPS, P/E ratio, dividend payout,
dividend yield ratio if these indicators give good signal, then only investors believe in company and
invests their capital. In the above graphs it is seen that Shree cement has the good EPS ratio,
whereas Ultratech and JK Lakshmi cement has good PE ratio and JK Lakshmi has good Dividend Yield
ratio.