RATIO ANALYSIS:

Ratio analysis is referred to as the study or analysis of the line items present in the financial
statements of the company. It can be used to check various factors of a business such as profitability,
liquidity, solvency and efficiency of the company or the business. Ratio analysis is mainly performed
by external analysts as financial statements are the primary source of information for external
analysts. The analysts very much rely on the current and past financial statements in order to obtain
important data for analysing financial performance of the company. The data or information thus
obtained during the analysis is helpful in determining whether the financial position of a company is
improving or deteriorating.

CLASSIFICATION OF RATIO:

1. SHORT-TERM SOLVENCY RATIOS:

• Current ratio
• Quick ratio
• Inventory turnover ratio
• Debtors turnover ratio
2. LONG-TERM SOLVENCY RATIOS:
• Fixed asset ratio
• Proprietary ratio
• Debt equity ratio
• Solvency ratio
3. PROFITABILITY RATIO:
• Gross profit ratio
• Operating expense ratio
• Operating profit ratio
• Net profit ratio

DATA ANALYSIS AND INTERPRATATION:

SHORT-TERM SOLVENCY RATIO:

A financial ratio that is intended to provide information about a firm’s solvency or liquidity over
the short run, i.e., its ability to meet short-term requirements for payment of obligations without
undue stress. Mainly, short-term liquidity ratios focus on current assets and current liabilities. These
ratios concern short-term creditors, in their attempt to ensure a borrowing firm is able to meet its
short-term obligations (loans, bills, etc.). Short-term solvency ratios are also known as short-term
liquidity ratios.
Current ratio:

The current ratio is a measure of a company’s ability to pay off the obligations within the next
twelve months. This ratio is used by creditors to evaluate whether a company can be offered short
term debts. It also provides information about the company’s operating cycle. It is also popularly
known as Working capital ratio. It is obtained by dividing the current assets with current liabilities.

Current ratio is calculated as follows: Current ratio = Current Assets / Current Liabilities

CURRENT RATIO

YEAR CURRENT ASSETS CURRENT LIABILITIES CURRENT RATIO

Mar-13 237 149 1.590604027

Mar-14 634 462.4 1.371107266

Mar-15 585.8 475.2 1.232744108

Mar-16 1348.4 536 2.515671642

Mar-17 1524.1 600.3 2.538897218

Mar-18 1719.3 783.3 2.194944466

Mar-19 1762.6 1128.6 1.56175793

Mar-20 1611.4 1540 1.046363636

Mar-21 1801 1130.4 1.593241331

Mar-22 2203.6 1231.5 1.789362566

TOTAL CURRENT RATIO 17.43469419

AVERAGE CURRENT RATIO 1.743469419

INTERPRATATION: Table 1 shows that average of current ratio is which representation that the
company has performed best

Quick ratio:

Quick ratio is also known as Acid test ratio is used to determine whether a company or a business
has enough liquid assets which are able to be instantly converted into cash to meet short term dues. It
is calculated by dividing the liquid current assets by the current liabilities.

It is represented as Quick Ratio = (Cash + Marketable securities + Accounts receivable) / Current

liabilities
 QUICK RATIO
CURRENT
CURRENT CURRENT QUICK
YEAR INVENTORY ASSETS -
ASSETS LIABILITIES RATIO
INVENTORY
1.47046979
Mar-13 237 17.9 219.1 149 9
1.33888408
Mar-14 634 14.9 619.1 462.4 3
1.15193602
Mar-15 585.8 38.4 547.4 475.2 7
2.44533582
Mar-16 1348.4 37.7 1310.7 536 1
2.48525737
Mar-17 1524.1 32.2 1491.9 600.3 1
Mar-18 1719.3 86 1633.3 783.3 2.08515256
1.52330320
Mar-19 1762.6 43.4 1719.2 1128.6 8
Mar-20 1611.4 25.2 1586.2 1540 1.03
1.54051663
Mar-21 1801 59.6 1741.4 1130.4 1
1.64368656
Mar-22 2203.6 179.4 2024.2 1231.5 1
16.7145420
TOTAL QUICK RATIO 6
1.67145420
AVERAGE QUICK RATIO 6
.

INTERPRETATION: Table 2 shows that average of quick ratio is which representation that the
company has performed best

Debtors turnover ratio:

The accounts receivable turnover ratio, also known as the debtor’s turnover ratio, is an efficiency
ratio that measures how efficiently a company is collecting revenue – and by extension, how
efficiently it is using its assets. The accounts receivable turnover ratio measures the number of times
over a given period that a company collects its average accounts receivable.
 DEBTORS TURNOVER RATIO

YEAR NET SALES AVERAGE DEBTORS DEBTORS TURNOVER RATIO

Mar-13 550 76.6 7.180156658

Mar-14 699.5 94.3 7.417815483

Mar-15 842.7 179.9 4.684269038

Mar-16 1085.6 185.2 5.861771058

Mar-17 1200.9 198.7 6.0437846

Mar-18 1423.1 266.8 5.333958021

Mar-19 1825.6 338.7 5.390020667

Mar-20 2011.9 398.2 5.052486188

Mar-21 2179.4 339 6.428908555

Mar-22 2601.4 508.2 5.118850846

TOTAL DEBTORS TURNOVER RATIO 58.51202111

AVERAGE DEBTORS TURNOVER RATIO 5.851202111

INTERPRATATION: Table 3 shows that average of debtors turnover ratio is which representation that
the company has performed best

Long term solvency ratio:

Long term solvency means the firm’s ability to meet its liabilities in the long run. Long term
solvency ratios help to determine the ability of the business to repay its debts in the long run. Long-
term solvency ratios are designed to measure the ability of a business to meet its financial obligations
in the medium and longer term. Solvency is the ability of a company to meet its long-term debts and
financial obligations. Solvency can be an important measure of financial health, since it's one way of
demonstrating a company's ability to manage its operations into the foreseeable future.

DEBTORS TURNOVER RATIO

YEAR NET SALES AVERAGE DEBTORS DEBTORS TURNOVER RATIO

Mar-13 550 76.6 7.180156658

Mar-14 699.5 94.3 7.417815483
Mar-15 842.7 179.9 4.684269038
Mar-16 1085.6 185.2 5.861771058
Mar-17 1200.9 198.7 6.0437846
Mar-18 1423.1 266.8 5.333958021
Mar-19 1825.6 338.7 5.390020667
Mar-20 2011.9 398.2 5.052486188
Mar-21 2179.4 339 6.428908555
Mar-22 2601.4 508.2 5.118850846
TOTAL DEBTORS TURNOVER RATIO 58.51202111
AVERAGE DEBTORS TURNOVER RATIO 5.851202111
Solvency ratio:

A solvency ratio measures how well a company's cash flow can cover its long-term debt. Solvency
ratios are a key metric for assessing the financial health of a company and can be used to determine
the likelihood that a company will default on its debt.

SOLVENCY RATIO

TOTAL LIABILITIES TO
YEAR TOTAL ASSETS SOLVENCY RATIO
OUTSIDER

Mar-13 82.7 724.2 0.114194974

Mar-14 231.5 1190.9 0.194390797

Mar-15 224.2 1421.5 0.157720718

Mar-16 956.4 2389.5 0.400251099

Mar-17 889.5 2774.8 0.320563644

Mar-18 867 3188.4 0.271923222

Mar-19 760.8 3702.3 0.205493882

Mar-20 531.7 4162 0.127751081

Mar-21 1011.4 4877.5 0.207360328

Mar-22 1024.9 5560.8 0.184308013

TOTAL SOLVENCY RATIO 2.183957757

AVERAGE SOLVENCY RATIO 0.218395776

INTERPRATATION: Table 4 shows that average of solvency ratio is which representation that the
company has performed best

proprietary ratio:

Proprietary ratio is a type of solvency ratio that is useful for determining the amount or contribution
of shareholders or proprietors towards the total assets of the business. It is also known as equity ratio
or shareholder equity ratio or net worth ratio. The main purpose of this ratio is to determine the
proportion of the total assets of a business that is funded by the proprietors. Proprietary ratio can be
used to evaluate the stability of the capital structure of a business or company and also show how the
assets of a business are formed by issuing a number of equity shares rather than taking loans or debt
from outside.

Proprietary Ratio = Proprietors Funds / Total Assets

 PROPRIETORY RATIO

YEAR SHAREHOLDER FUNDS TOTAL ASSETS PROPRIETORY RATIO

Mar-13 518.6 724.2 0.716100525

Mar-14 659.3 1190.9 0.553614913

Mar-15 844.9 1421.5 0.594372142

Mar-16 1052.8 2389.5 0.440594267

Mar-17 1413.9 2774.8 0.509550238

Mar-18 1720.1 3188.4 0.53948689

Mar-19 1967.2 3702.3 0.53134538

Mar-20 2174.1 4162 0.522369053

Mar-21 2818.3 4877.5 0.577816504

Mar-22 3292 5560.8 0.592001151

TOTAL PROPRIETORY RATIO 5.577251063

AVERAGE PROPRIETORY RATIO 0.557725106

INTERPRATATION: Table 5 shows that average of proprietor ratio is which representation that the
company has performed best

Debt equity ratio:

The Debt to Equity ratio (also called the “debt-equity ratio”, “risk ratio”, or “gearing”), is a
leverage ratio that calculates the weight of total debt and financial liabilities against total
shareholders’ equity. This ratio highlights how a company’s capital structure is tilted either toward
debt or equity financing. Debt Equity Ratio = Outsider’s funds / Shareholders fund
 DEBT EQUITY RATIO

YEAR OUTSIDER'S FUND SHAREHOLDER'S FUND DEBT EQUITY RATIO

Mar-13 82.7 518.6 0.159467798

Mar-14 231.5 659.3 0.351129986

Mar-15 224.2 844.9 0.265356847

Mar-16 956.4 1052.8 0.90843465

Mar-17 889.5 1413.9 0.62911097

Mar-18 867 1720.1 0.504040463

Mar-19 760.8 1967.2 0.386742578

Mar-20 531.7 2174.1 0.244560968

Mar-21 1011.4 2818.3 0.358868822

Mar-22 1024.9 3292 0.311330498

TOTAL DEBT EQUITY RATIO 4.11904358

AVERAGE DEBT EQUITY RATIO 0.411904358

INTERPRATATION: Table 6 shows that average of Debt equity ratio is which representation that the
company has performed best

Fixed asset ratio:

The fixed asset turnover ratio reveals how efficient a company is at generating sales from its
existing fixed assets. The fixed asset turnover ratio is calculated by dividing net sales by the average
balance in fixed assets. A higher ratio implies that management is using its fixed assets more
effectively.
 FIXED ASSET RATIO

YEAR GROSS PROFIT SALES GROSS PROFIT RATIO

Mar-13 539.5 550 98.09090909

Mar-14 687.1 699.5 98.22730522

Mar-15 842.7 842.7 100

Mar-16 1085.6 1085.6 100

Mar-17 1169.5 1200.9 97.38529436

Mar-18 1324.5 1423.1 93.07146371

Mar-19 1715.6 1825.6 93.9745837

Mar-20 1879.7 2011.9 93.42909687

Mar-21 2084.7 2179.4 95.65476737

Mar-22 2503.9 2601.4 96.25201814

TOTAL GROSS PROFIT RATIO 966.0854385

AVERAGE GROSS PROFIT RATIO 96.60854385

INTERPRATATION: Table 7 shows that average of Fixed asset ratio is which representation that the
company has performed best.
Gross profit ratio:

Gross profit ratio is a ratio or metric that helps in determining the efficiency and performance of a
company. It is computed by dividing the gross profit of a company by its total net sales. Moreover, the
GP ratio can also be obtained in a percentage firm by multiplying the above result by 100. When done
so, it is regarded as the gross profit margin or gross profit percentage. Gross Profit Ratio Formula =
(Gross Profit/Net Sales) X 100.

GROSS PROFIT RATIO

YEAR GROSS PROFIT SALES GROSS PROFIT RATIO

Mar-13 539.5 550 98.09090909

Mar-14 687.1 699.5 98.22730522

Mar-15 842.7 842.7 100

Mar-16 1085.6 1085.6 100

Mar-17 1169.5 1200.9 97.38529436

Mar-18 1324.5 1423.1 93.07146371

Mar-19 1715.6 1825.6 93.9745837

Mar-20 1879.7 2011.9 93.42909687

Mar-21 2084.7 2179.4 95.65476737

Mar-22 2503.9 2601.4 96.25201814

TOTAL GROSS PROFIT RATIO 966.0854385

AVERAGE GROSS PROFIT RATIO 96.60854385

INTERPRETATION: Table 8 shows that average of Gross profit ratio is which representation that the
company has performed best.