1.

Following are some accounting ratios for a few selected industries from India for the
financial year 2021.
Table: Financial ratios for selected Indian Industries
Industry LTD/Assets ICR CR QR AT NPM ROA ROE Pay-out
(%) (%) (%)
Manufacturing 0.30 0.75 2.91 1.35 1.02 -79.39 2.58 -54.77 2125
Automobile 0.06 1.01 1.05 0.61 1.37 4.65 10.38 1233 2099
Capital Goods 0.12 0.70 2.21 1.36 0.93 -4.28 5.74 973.3 6120.12
Consumer 0.51 1.42 1.67 0.79 1.10 -128.31 3.5 634.8 1335.77
Durable
Healthcare 0.45 0.46 1.99 NA 0.91 -21.62 6.99 938.82 1324.38
IT 0.38 -0.09 2.10 4.20 0.64 5.25 -330.99 1654.2 523.84

Table: Financial ratios for selected US Industries

Industry LTD/Assets ICR CR QR AT NPM ROA ROE Pay-out
(%) (%) (%)
Manufacturing 0.25 3.85 1.32 0.88 0.62 8.05 4.99 11.85 0.59
Motor Vehicle 0.14 6.82 1.08 0.77 1.24 5.39 6.66 15.98 0.49
Industrial 0.22 2.56 1.46 0.94 0.66 4.83 3.19 4.32 1.11
Machinery
Food Product 0.27 5.74 1.64 1.06 0.82 8.18 7.03 12.71 0.40
Healthcare 0.32 3.42 0.98 0.73 0.31 16.93 5.21 16.77 0.43
Computer & 0.25 3.65 1.37 1.12 0.39 10.34 4.05 13.94 0.45
electronic
Where: LTD/Asset= Long Term Debt/Assets
ICR= Interest Coverage Ratio
CR= Current Ratio
QR= Quick Ratio
AT= Asset Turnover
NPM= Net Profit Margin
ROA= Return on Asset
ROE= Return on Equity
a. Compare the financial performance of Indian manufacturing companies with that of
their US counterparts.
b. Identify all the industries with the Asset Turnover ratio of less than one. what does
this indicate?
c. Compare the financial performance of the Indian IT industry with Capital Goods
Industry.
d. Also comment on the financial health of the Indian Healthcare sector in comparison
with US Healthcare.
 2. Given below is the financial information pertaining to non-financial companies listed
in BSE for the financial year 2021. Estimate the EVA of these companies.

Company Debt to Equity to Cost of Cost of Tax Rate Capital ROA

Asset Asset Equity Debt Employed
(in ₹
million)
Asian Paints Ltd. 0.34 0.66 .075 0.09 0.34 74,717.00 0.25

Bajaj Auto 0.21 0.79 0.084 0.09 030 181,893.3 0.22

Coal India 0.32 0.68 0.09 0.09 0 137,479 0.27
Bharti Airtel 0.53 0.47 0.078 0.11 0.23 1,647,843.5 0.11
ITC 0.19 0.81 0.065 0.09 0.34 483,924.30 0.23
Infosys 0.17 0.83 0.10 0.09 0.20 654,280 0.25
NTPC 0.64 0.36 0.25 0.09 0.26 2,130,041.15 0.05
Sun Pharma 0.45 0.55 0.15 0.12 0.05 268,565.95 0.01
TCS 0.17 0.83 0.21 0.09 0.20 369,122 0.03
Vedanta 0.49 0.51 0.22 0.09 0.21 1,230,185 0.06