ASSIGNMENT- 1

COURSE CODE- ACCM506

COURSE TITLE- FINANCIAL REPORTING,
STATEMENTS AND ANALYSIS-I

SUBMITTED BY
NAME- Anuvartika Bharti
SECTION- Q2143
MITTAL SCHOOL OF BUSINESS
REGISTRATION NO- 12107644
ROLL NO- RQ2143B45

COMPANY- RAMCO SYSTEM LTD.

SUBMITTED TO
Mr. Sushant Gupta
Faculty, Mittal School of Business
 RAMCO SYSTEMS LIMITED

INTRODUCTION
Ramco Systems Limited is a company which provides software and services headquartered in
Chennai, Tamil Nadu, India. The company was established in the year 1992. Earlier when the
company started it was segment of Ramco Group but in the year 1997 it became a stand-alone
company. Ramco is a global provider of Enterprise Solutions and Services in key areas such as
Manufacturing Aviation Asset Management Trading & Logistics Healthcare at Governance Banking
& Financial Services Corporate Performance Management and Human Resources Management. It is
also a Siebel Alliance Partner and provides CRM implementation services to global clients.

Companies stock is being traded in Bombay Stock Exchange at 481.85 and National Stock Exchange
at 481.65. Ramco System Limited is globally having 24 offices. It has users over 150000. Company’s
employee strength is over 1900 and trusted by more than 1000 customers in more than 35 countries.
Total Income of Ramco Systems Limited is $86.90 million with total revenue of $84.92 million.

Ramco's Enterprise Applications help suite is helpful for Call for more business conversions, Make
Competition an important competitive advantage, Create an intelligent environment for customers,
partners, and employees who are always connected, Real-time performance visibility with the click
of a button, Start marketing immediately with new or innovative products or service, Deliver a stellar
user experience that drives high engagement and customer retention, Create new incoming streams
by integrating with the market using APIs, Downsize the cost of basic IT applications.

Ramco is the provider of Converged Networking Solutions Information Services and full Contact
Center Solutions. In the Automation space of factory, Ramco offers Engineering Process
Optimization solutions in the domains of Cement Chemical and Power. Software development
methods are ISO 9001 Certified and Development Centers tested at SEI CMMI-SW Level 5. 9
countries across the USA Europe Asia-Pacific Middle East and South Africa.

Ramco Systems offers innovative business solutions that transform organizations. They are fast
growing software company which is creating competition in market with multi-layered cloud and
business software based on the location of Global Payroll and HR, ERP, Logistics and M&E MRO
for Aviation through Ramco VirtualWorks.
COMPARATIVE STATEMENT OF RAMCO SYSTEMS LIMITED
The Comparative statement (Balance sheet) of the company for the past 3 years (2021, 2020,2019)
using Financial Statement Analysis.

Year 2019-2020

Ramco System Limited In Rs. Cr.

Increase or Decrease (2019-

Mar-20 Mar-19
2020)

12 mths 12 mths Amount %

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 30.64 30.63 0.01 0.032647731
Total Share Capital 30.64 30.63 0.01 0.032647731
Reserves and Surplus 799.27 775.86 23.41 3.017296935
Total Reserves and Surplus 799.27 775.86 23.41 3.017296935
Total Shareholders Funds 829.91 806.49 23.42 2.903941772
Equity Share Application Money 0 0.05 -0.05 -100
NON-CURRENT LIABILITIES
Long Term Borrowings 6.67 0 6.67
Deferred Tax Liabilities [Net] 0 0 0
Other Long Term Liabilities 53.72 0.64 53.08 8293.75
Long Term Provisions 6.43 5.9 0.53 8.983050847
Total Non-Current Liabilities 66.81 6.55 60.26 920
CURRENT LIABILITIES
Short Term Borrowings 82.7 80.3 2.4 2.98879203
Trade Payables 25.91 21.23 4.68 22.04427697
Other Current Liabilities 44.87 29.42 15.45 52.51529572
Short Term Provisions 0.48 0.51 -0.03 -5.882352941
Total Current Liabilities 153.96 131.46 22.5 17.11547239
Total Capital And Liabilities 1,050.68 944.55 106.13 11.23603833
ASSETS
NON-CURRENT ASSETS
Tangible Assets 73.85 16.79 57.06 339.8451459
Intangible Assets 248.43 243.29 5.14 2.112705002
Fixed Assets 322.27 260.08 62.19 23.91187327
Non-Current Investments 368.76 302.28 66.48 21.99285431
Deferred Tax Assets [Net] 10.94 37.43 -26.49 -70.77210793
Long Term Loans And Advances 0 4 -4 -100
Other Non-Current Assets 33.51 26.09 7.42 28.44001533
Total Non-Current Assets 735.48 629.88 105.6 16.76509811
CURRENT ASSETS
Inventories 0 0 0
Trade Receivables 135.53 156.72 -21.19 -13.52092905
Cash And Cash Equivalents 3.08 2.51 0.57 22.70916335
 Short Term Loans And Advances 104.87 100.9 3.97 3.934588702
Other Current Assets 71.72 54.54 17.18 31.49981665
Total Current Assets 315.21 314.67 0.54 0.171608352
Total Assets 1,050.68 944.55 106.13 11.23603833
OTHER ADDITIONAL
INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS
Contingent Liabilities 100.95 95.68 5.27 5.507943144
CIF VALUE OF IMPORTS
Raw Materials 0.63 0.16 0.47 293.75
Trade/Other Goods 0 0 0
Capital Goods 2.33 0.98 1.35 137.755102
EXPENDITURE IN FOREIGN
EXCHANGE
Expenditure In Foreign Currency 47.78 34.78 13 37.37780334
REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS
Dividend Remittance In Foreign
0 0
Currency 0
EARNINGS IN FOREIGN
EXCHANGE
FOB Value Of Goods 0 110.61 -110.61 -100
Other Earnings 187.33 101.8 85.53 84.01768173
BONUS DETAILS
Bonus Equity Share Capital 0 0 0
NON-CURRENT
INVESTMENTS
Non-Current Investments Quoted
0 0
Market Value 0
Non-Current Investments Unquoted
1.5 300.78
Book Value -299.28 -99.50129663
CURRENT INVESTMENTS
Current Investments Quoted Market
0 0
Value 0
Current Investments Unquoted Book
0 0
Value 0

INTERPRETATION

Long Term Borrowing are 0 for Ramco System Limited which implies that the company has paid all
its long-term loans and it shows that company is holding good position currently as there is no amount
due and to be paid.

Deferred Tax Liability is the taxes that are incurred but are not paid and Ramco System Limited is
having 0 Deferred Tax Liabilities for the year 2019-2020 which implies that company has paid all of
it and there is no Deferred Tax Liabilities. It shows that company is working well and there is no tax
due for next year if there is due record for next year it will increase expenses of the company which
will in turn impact the cash flow of the company. But as the company has no Deferred Tax Liabilities
so it is having no increased expenses for the next year.

Other Long-Term Liabilities of Ramco System Limited in 2019 was 5.9 crore whereas in 2020 it was
6.43 crore which means long term liabilities of the company are increasing by 8234% which implies
that company as compared to 2019 has taken more loan or taken more money in 2020 from outsider
and if more loans are taken we have to pay interest on it too which will in turn increase the interest
expense of the company which will increase the financial risk of the company because this long term
money have to paid at specific time and the companies fixed assets are also increasing by 24%
approximately which means company is using the borrowed money to purchase fixed asset for
expansion.

Long Term Provisions are increasing debts that are not certain and which company have to pay after
longer term and in Ramco System Limited the long-term provision is increasing by approximately
8.98% as compared to previous year which means company is creating safe environment for them as
they are aiming that some liability that they have to pay in future for that particular liability they are
creating provision to play safe.

Total Non-Current Liabilities in 2019 is 6.55 and in 2020 is 66.81 and the companies Non-current
Liabilities are increasing by 920% it implies that there is increase in financial risk due to increase in
interest payment obligation, outsider’s claim on business got increased, may be Ramco System
Limited is on its way of expansion or undertaking strategic changes. Companies is not using its money
or it is possible that company don’t have sufficient funds or capital that’s why it is taking funds from
outsiders which in turn increases the Non-Current Liabilities.

Short-Term Borrowing is the money borrowed from banks or other institutions to fund the ongoing
operations of a business that will come due within one year and the Short-Term Borrowing are
increasing by 3% for Ramco System Limited which implies that the company is not having sufficient
fund so that it can complete its ongoing work that’s why the company is taking short term loan from
banks and other institutions to fulfil its capital need to complete its ongoing operations. It shows that
company is not having good capital position as short-term borrowings are increasing.

Trade Payables is obligation to be paid for goods and services that has been acquired by the company
and Trade Payable of the company is increasing by 22% which means good and services acquired by
the company from its suppliers is acquired on credit, and the company have to repay the amount to
the suppliers.

Short-Term Liabilities increasing by 52% which means there are some expenses which are due and
to be paid like wages and salaries of employees or any other expense that is due and not paid.
Trade Payable and Short-Term Borrowing is increasing by 22% and 52% respectively which implies
that company might have purchased materials required for its product or services on credit from their
suppliers due to which their short-term labilities are increased and the company has to pay that money
to those suppliers in future, which in turn increasing its short-term liabilities.

Short-Term Provisions are decreasing by 5.88% implies that liabilities that company has thought will
be liabilities has not become a liability or it is paid or occurred so it is no more a liability and the
company is removing that provision, like provision the company might have created for debtors the
debtors have paid them the money and it has become income for the company which leads to
reduction of Short-Term Provision.

Total Current Liabilities is increasing by 17.1% which means the company has purchased more
materials on credit and have to pay it but not paid it yet.

Tangible assets are physical things and tangible asset of the company is increasing by 339.8% which
means the company is investing more in tangible assets like equipment, property etc. so that company
can grow its business and company is in profit that’s why it is investing so that in future company
can cope up the losses and get future benefit.

Intangible assets are not physical in nature. Intangible assets of the company is increasing by 2.1 %
which means companies goodwill is increasing people are liking their products and services. Increase
in use of its copyrights but no cashflow involved in it.

Non-current investment initiated to earn the income from the outside other than the normal activities
of the company. Non-current investments of the company is increasing by 21.9% it means that
company has bought some land, property and started new plant. This shows that company is working
well and gaining profit which is helping them to invest in Land, property, plant which will help the
company earn in future.

Deferred Tax Assets are items that may be used for tax relief purposes in the future. Deferred Tax
Assets are decreasing by 70.7% which means

Long Term Loans are the long-term financing and advance are the are short term financing source.
Long term loans and advances are decreasing by -100% which means company is managing its
expenses by its own not taking loan for long term or short-term purposes which shows company is
growing and working well and managing its expenses well. It can be possible that company is not
expanding more that’s why it is not requiring the long-term or short-term loans.

Other Non-Current Assets of the company is increased by 28.4% company is investing in different
sectors more in 2020 as compared to 2019.
Inventories are 0 for Ramco Systems Limited because it is a software company and software
companies don’t have any prestored stocks.

Trade Receivables are decreasing by 13.5% for the company as the company has reduced selling its
products and services on credit as compared to previous year that’s why its trade receivables are
decreasing. Company is seeing less delinquent customers and not selling much on credit.

Cash and Cash Equivalents are increasing by 22.7% implies that company’s liquidity position is high,
which shows assets can be converted to cash easily which implies company is healthy and have low
risk.

Short Term Loans and Advances are the short-term finances advances which are paid for now but
realize at future date. Short Term Loans and Advances means that company is buying assets

Other current assets are increasing by 31.5% company owner investing addition cash in the company
the cash invested is increasing the other current assets. Company met its short-term obligations.
Keeping some extra current assets ensures that a company can pay its bills on time.

Total current assets are increasing which implies that company is investing more in current assets
which is helping them to fulfilling all the current liabilities.

Year 2020-2021

Ramco System Limited In Rs. Cr.

Mar 21 Mar-20 Increase or Decrease (2020-2021)

12 mths 12 mths Amount %

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 30.75 30.64 0.11 0.359007833
Total Share Capital 30.75 30.64 0.11 0.359007833
Reserves and Surplus 845.67 799.27 46.4 5.805297334
Total Reserves and
845.67 799.27
Surplus 46.4 5.805297334
Total Shareholders Funds 876.42 829.91 46.51 5.604222145
Equity Share Application
0 0
Money 0
NON-CURRENT LIABILITIES
Long Term Borrowings 0 6.67 -6.67 -100
Deferred Tax Liabilities
12.91 0
[Net] 12.91
Other Long Term -
50.03 53.72
Liabilities -3.69 6.868950112
 -
Long Term Provisions 6.29 6.43
-0.14 2.177293935
Total Non-Current
69.23 66.81
Liabilities 2.42 3.622212244
CURRENT LIABILITIES
Short Term Borrowings 0 82.7 -82.7 -100
Trade Payables 29.08 25.91 3.17 12.23465843
Other Current Liabilities 52.52 44.87 7.65 17.0492534
Short Term Provisions 0.53 0.48 0.05 10.41666667
-
Total Current Liabilities 82.14 153.96
-71.82 46.64848012
Total Capital And -
1,027.79 1,050.68
Liabilities -22.89 2.178589104
ASSETS
NON-CURRENT ASSETS
-
Tangible Assets 65.07 73.85
-8.78 11.88896412
Intangible Assets 262.54 248.43 14.11 5.679668317
Fixed Assets 327.61 322.27 5.34 1.656995687
Non-Current Investments 368.76 368.76 0 0
Deferred Tax Assets [Net] 0 10.94 -10.94 -100
Long Term Loans And
0 0
Advances 0
Other Non-Current Assets 45.73 33.51 12.22 36.46672635
Total Non-Current Assets 742.1 735.48 6.62 0.900092457
CURRENT ASSETS
Inventories 0 0 0
-
Trade Receivables 117.54 135.53
-17.99 13.27381392
Cash And Cash -
2.34 3.08
Equivalents -0.74 24.02597403
Short Term Loans And -
84.87 104.87
Advances -20 19.07123105
OtherCurrentAssets 80.95 71.72 9.23 12.86949247
-
Total Current Assets 285.69 315.21
-29.52 9.365185115
-
Total Assets 1,027.79 1,050.68
-22.89 2.178589104
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS
-
Contingent Liabilities 94.98 100.95
-5.97 5.913818722
CIF VALUE OF IMPORTS
Raw Materials 0 0.63 -0.63 -100
Trade/Other Goods 0 0 0
Capital Goods 0 2.33 -2.33 -100
EXPENDITURE IN FOREIGN
EXCHANGE
Expenditure In Foreign -
30.66 47.78
Currency -17.12 35.83089159
REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS
 Dividend Remittance In
0 0
Foreign Currency 0
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods 0 0 0
Other Earnings 212.01 187.33 24.68 13.17461165
BONUS DETAILS
Bonus Equity Share Capital 0 0 0
NON-CURRENT INVESTMENTS
Non-Current Investments
0 0
Quoted Market Value 0
Non-Current Investments
1.5 1.5
Unquoted Book Value 0 0
CURRENT INVESTMENTS
Current Investments
0 0
Quoted Market Value 0
Current Investments
0 0
Unquoted Book Value 0

INTERPRETATION

Long Term Borrowing are reducing for Ramco System Limited which implies that the company is
not taking much loans from outsiders to meet its long-term longs it could be the reason that company
is generating more revenue than previous year and raising capital by its own to meet its goal so they
are not requiring long-term borrowing to meet their goals, company is holding good position
currently.

Deferred Tax Liability is the taxes that are incurred but are not paid and Ramco System Limited is
having 0 Deferred Tax Liabilities for the year 2020 which implies that company has paid all of it and
there is no Deferred Tax Liabilities, whereas in the year 2021 it is increased to 12.9 it means
companies tax has incurred but not yet paid for the year 2021 that’s why it is increasing as compared
to the 2020 which will increase expenses of the company which will in turn impact the cash flow of
the company.

Other Long-Term Liabilities of Ramco System Limited in 2020 was 53.72 crore whereas in 2021 it
is 50.03 crore which means long term liabilities of the company are decreasing by 6.86% which
implies that company as compared to 2020 has taken less loan or taken less money in 2021 from
outsider and if less loans are taken companies interest expenses will also decrease, which will
decrease the financial risk of the company and the companies fixed assets are also increasing less as
compared to previous years which means company is not buying more fixed assets so they don’t need
to borrow more money.

Long Term Provisions are increasing debts that are not certain and which company have to pay after
longer term and in Ramco System Limited the long-term provision is decreasing by approximately
2.17% as compared to previous year which implies that for meeting future liabilities company is
keeping less funds aside as compared to previous year which will in turn affect the company if they
will have more liabilities in future than provisions.

Total Non-Current Liabilities in 2020 is 66.8 and in 2021 is 69.23 and the companies Non-current
Liabilities are increasing by 3.6% it implies that there is increase in financial risk due to increase in
interest payment obligation, outsider’s claim on business got increased, may be Ramco System
Limited is on its way of expansion or undertaking strategic changes. Company is not using its money
or it is possible that company don’t have sufficient funds or capital that’s why it is taking funds from
outsiders which in turn increases the Non-Current Liabilities.

Short-Term Borrowing is the money borrowed from banks or other institutions to fund the ongoing
operations of a business that will come due within one year and the Short-Term Borrowing are
decreasing by 100% for Ramco System Limited which implies that the company is having sufficient
fund so that it can complete its ongoing work that’s why the company is not taking short term loan
from banks and other institutions to fulfil its capital needs to complete its ongoing operations. It shows
that company is having good capital position or generating more revenue or profit as short-term
borrowings are decreasing.

Trade Payables is obligation to be paid for goods and services that has been acquired by the company
and Trade Payable of the company is increasing by 12.4% which means good and services acquired
by the company from its suppliers is acquired on credit, and the company have to repay the amount
to the suppliers.

Other Current Liabilities increasing by 17.04% which means there are some expenses which are due
and to be paid like wages and salaries of employees or any other expense that is due and not paid.

Trade Payable and Other current liabilities is increasing by 12.23% and 17.04% respectively which
implies that company might have purchased materials required for its product or services on credit
from their suppliers due to which their short-term labilities are increased and the company has to pay
that money to those suppliers in future, which in turn increasing its short-term liabilities.

Short-Term Provisions are increasing by 10.4% implies that provision the company have created for
debtors the debtors have not paid them the money yet and it has become receivables for the company
which leads to increment in Short-Term Provision.

Total Current Liabilities is decreasing by 46.6% which means the company has paid for the material
purchased there is reduction in on credit material and company making all its due payments and there
is out flow of cash due to which current liabilities are decreasing.
Tangible assets are physical things and tangible asset of the company is decreasing by 11.8% which
means the company is not investing more in long term tangible assets like equipment, property, plant
etc. It may be the reason that company is in not generating much profit that’s why it is not investing
more.

Intangible assets are not physical in nature. Intangible assets of the company is increasing by 5.6%
which means companies goodwill is increasing people are liking their products and services. Increase
in use of its copyrights but no cashflow involved in it.

Non-current investment initiated to earn the income from the outside other than the normal activities
of the company. Non-current investments of the company is constant for the year 2020 and 2021 so
its change is 0, it means that company has not bought any land, property and started new plant. This
shows that company is stagnant and not growing.

Deferred Tax Assets are items that may be used for tax relief purposes in the future. Deferred Tax
Assets are decreasing by 100% which means there is reduction in company assets that can give relief
from tax in future, or company has not overpaid taxes which leads to decrease in deferred tax assets.

Long Term Loans are the long-term financing and advance are the are short term financing source.
Long term loans and advances are decreasing is 0 for both 2020 and 2021 which means company has
not taken any financial help from outsiders or company is managing its expenses by its own not taking
loan for long term or short-term purposes or It can be possible that company is not expanding or
growing more that’s why it is not requiring the long-term or short-term loans.

Other Non-Current Assets of the company is increased by 36.4% company is investing in different
sectors more in 2021 as compared to 2020.

Total non-current assets are increasing by 0.9% which implies that company is investing is long term
assets to get benefit in future.

Inventories are 0 for Ramco Systems Limited because it is a software company and software
companies don’t have any prestored stocks.

Trade Receivables are decreasing by 13.27% for the company as the company has reduced selling its
products and services on credit as compared to previous year that’s why its trade receivables are
decreasing. Company is seeing less delinquent customers and not selling much on credit.

Cash and Cash Equivalents are decreasing by 24.02% implies that company’s liquidity position is not
good, which shows assets can’t be converted to cash easily.
Short Term Loans and Advances are the short-term finances advances which are paid for now but
realize at future date. Decrease in Short-Term Loans and Advances means that company is not buying
assets or not investing more or not having much short-term expenses.

Other current assets are increasing by 19.07% company’s owner investing addition cash in the
company the cash invested is increasing the other current assets. Keeping some extra current assets
ensures that a company can pay its bills on time and help company met its short-term obligations.

Total current assets are decreasing by 9.36% which implies that company is selling its current assets
to meet its short-term obligation.
 RAMCO SYSTEMS LIMITED COMPANY ANALYSIS

Key Financial Ratios in crore

values
Mar-21 Mar-20
Liquidity and Solvency Ratio
Current Ratio 3.478086194 2.047349961
Debt Equity Ratio 0.007176924 0.015784844
Management Efficiency Ratios
Debtors Turnover Ratio 1.911767087 1.494553275
Proprietary ratio 0.852722832 0.789878936

Current ratio = current asset / current liabilities

Current ratio is a liquidity ratio that measures a company's ability to cover its short-term obligations
with its current assets. Current ratio of Ramco System Limited has increased in the year 2021 as
compared to the year 2020 that is in the year 2020 the company was having current ratio of 2.04 and
it increased to 3.47 in the year 2021. In the year 2020 current ratio was 2.04 which is in between 1.5
and 3 so it is excellent and because after paying every rupee of the liabilities there is appropriate
amount left to do day to day operations. In ratio we can say it is approximately 143:41 here we can
see current assets are more than current liabilities so company is in good position and can pay its short
obligations easily. Whereas in 2021 current ratio is 3.47 which is greater than three and it is too much
for the company which means the company has high cash and cash equivalents means more of the
ideal cash is with the company, high prepaid expenses, high accounts receivable the payments are
being pending from debtors, high short term investments company is more dependent upon short term
investments where returns are not guaranteed more money is stuck in these current assets which
means investment is high and company is not managing its assets properly. In 2021 ratio is
315.21:153.96 here we can see that current assets are higher than current liabilities which implies
company can meet its short-term obligation easily, there is margin of safety is available for creditors
who have lent the money to the company and company can pay them back easily. Margin for safety
for creditors is good which means liquidity position is satisfactory but current ratio is high here which
implies that company has invested heavily in current assets which is not considered that good as huge
investments should be done in fixed assets which will give long term future benefits and implies
under-utilization of resources.
 Debt Equity Ratio= (Long term borrowing + long term provision) / total shareholder funds

Debt Equity Ratio is decreasing as compared to the year 2020 and become 0.0071 from 0.015 which
shows it has less contribution of creditors and shareholder debt equity ratio is low which implies a
lower amount of financing by debt via lenders, versus funding through equity via shareholders. It
indicates that the company is getting less of its financing by borrowing money, which subjects the
company to low potential risk if debt levels are too high.

Debtors turnover ratio= net credit sales / average trade receivable

Debtors turnover ratio is increasing it 2021 as compared to the year 2020 and becoming 1.9 from 1.4
which shows that debtors turnover ratio is high which implies that the company's collection of
accounts receivable is efficient and the company has a high proportion of quality customers that pay
their debts quickly.

Proprietary ratio= shareholder fund / total assets*100

Proprietary ratio is increasing a lit bit as compared to last year and become 0.8 from 0.7 which implies
that a company has a sufficient amount of equity to support the functions of the business, and
probably has room in its financial structure to take on additional debt, if necessary. as proprietary
ratio is increasing the company’s solvency position will be good for long term.

Liquidity position is satisfactory and Solvency position is good for Ramco system limited.

Ramco Systems Limited 3i Infotech Limited

values values
2021 2020 2021 2020

Profitability Ratios

Return on Assets 0.337172117 0.124726834 0.08106326 0.304250581

Return on Investment 9.269528308 7.385138148 30.55278436 26.19500911

Return on Assets= Net after tax/ average total assets

Return on Assets are increasing for Ramco system the company is efficiently using its assets for
generating earnings where as it is decreasing for Infotech the company’s management is not efficient
in managing their assets to generate earnings. With this we can say that Ramco System Limited is
managing more efficiently their assets than infotech limited.
 Return on Investment= EBIT/ Total shareholder funds*100

Return on Investment increasing for both Ramco System Limited and Infotech Limited implies that
the company is generating more sales and revenues by raising the prices of its products and services.
Through this we can say that both companies are having neck to neck competition according to Return
on Investment.

CONCLUSION

I would like to invest in Ramco System Limited because company’s liabilities are lower than assets
with each year which shows companies management is effective and the company is solvent because
the realizable value of its assets is greater than its liabilities and company pays of all its liabilities of
the year within the year itself. Company also meets its short-term obligations easily as its current ratio
is good and in turn its asset management is effective. Liquidity position of the company is also
satisfactory the current the current ratio of the company is increasing that means the company is able
to pay short term publications or those due within one year it tells investors that a company can
maximise the current assets on its balance sheet to satisfy its current debts and other payables. Return
on Asset is also showing increasing trend in the company it is sowing the that company’s management
is efficient at using its asset to generate earnings which shows how profitable a company is in relative
to its total asset. As company is generating more revenue and earning profit that’s why I will surely
invest in company.