Comparative Analysis of

Financial Statement of
Cosmos Infra Engineering India Pvt Ltd

Under Guidance Of: Presented By:

Miss Twinkle Arora Shalu Aggarwal
INTRODUCTION
• Every business has two primary objectives: profitability and solvency.
• Profitability is the ability of a business to make profit, while solvency
is the ability of a business to pay debts as they come due.
• To take the right decision at the right time executives should know the
financial position of the organization , without which it is not easy to
take any type of action for the expansion and growth of the
organization .
• Through financial information an executive can take imperative
decision as and when they are required.
I had done financial analysis on the
company in this report of last two
years using appropriate Analytical
techniques such as Ratios and
hence it is possible for me to
compare them with last two years
in order to identify the trends.
 Ratios Analysis
Ratio analysis is a widely used tool in financial analysis.
 It is defined as the systematic use of ratios to interpret the financial statements
so that the strength and weaknesses of a firm as well as its historical
performance and current financial condition can be determine.
Ratios can be divided into four major categories:
Liquidity ratio
 Leverage ratios or Solvency Ratios or Capital Structure Ratios
Activity or Turnover Ratios or Working Capital Ratios
Profitability Ratio
 Objectives
• To interpret the financial ratios and
their significance.
• To evaluate the current performance of
a company.
• To know about liquidity position.
• To find out the company’s positions to
meet their long term obligations.
• To suggest the measure to improve the
financial position of cosmos infra
Engineering India Pvt Ltd.
 Research Methodology
RESEARCH DESIGN:
• Descriptive study.
• Research is based on Secondary data.

SOURCES OF SECONDARY DATA:

• Company Manuals and Reports.
• Financial Statement.
• Books.
• Journals.
• Websites.

TOOLS & TECHNIQUES OF DATA:

• Percentage Analysis.
• Ratio Analysis.
• Tables.
• Graphs.
DATA ANALYSIS
Liquidity ratio
• Current Ratio= Current Ratio/Current Liablities

YEAR 2017 2016

CURRENT ASSETS 23397.85 21211.15

CURRENT
4333.07 4039.95
LIABILITIES

CURRENT RATIO 5.39 5.25

 25000

Interpretation
20000

 A high Current Ratio

means a firm can easily pay
15000
its current liabilities or
meet its current obligations.
 On the other side if current 10000

ratio is lower, then a firm

would not be able to meets
its short term liabilities. 5000

 A firm’s current ratio must

be higher than its ideal ratio
i.e. 2:1. 0
CA CL CR

2017 2016 Column1

Quick ratio
• QUICK RATIO= QUICK ASSETS/ CURRENT LIABILITIES

YEAR 2017 2016

QUICK ASSETS 363.68 1985.38

CURRENT
4333.07 4039.95
LIABILITIES

QUICK RATIO 0.08 0.49

 Interpretation 5000

4500

 The quick ratio is that the latter 4000

offers a more conservative view
of the company’s ability to meets
3500

its short-term liabilities with its 3000

short term assets. 2500

 Here the company’s quick assets 2000

is lower in 2017 i.e.(363.68) as 1500

compare to 2016 i.e.(1985.58). 1000

 Which shows the lower liquidity 500

(cash) in the company to meet its 0

QA CL QR
current obligations.

2017 2016 Column1

 2.LONG TERM SOLVENCY RATIO /
CAPITAL STRUCTURE RATIO
• Debt Equity Ratio: Total Debt/Shareholder’s Equity

YEAR 2017 2016

TOTAL DEBT 12345.52 12522.46

SHAREHOLDER’S FUND 8521.14 8413.20

DEBT EQUITY RATIO 1.44 1.48

 DEBT EQUITY RATIO

Interpretation
 A ratio of 1:1 means that
creditors and stakeholder
equity contribution to the
assets of the business.

TOTAL DEBT SHAREHOLDER'S FUND DEBT EQUITY RATIO

2017 2016 Column1

Proprietary Ratio
• PROPRIETARY RATIO= SHAREHOLDER’S FUND/ TOTAL
ASSETS
YEAR 2017 2016
SHAREHOLDER’S
8521.14 8413.20
FUND

TOTAL ASSETS 29150.25 26625.65

PROPRIETARY
RATIO 0.29 0.31
 35000

Interpretation 30000

 The proprietary ratio shows the contribution

25000
of stockholder’s in total capital of the
company.
 As compared last year 2017, there is a low 20000

proprietary ratio that indicates a lower

position of the company and lesser security 15000
for creditors.
 It means that it reduce creditor’s interest,
10000
increase interest expenses and also the risk
of bankruptcy.
5000

0
Shareholder's fund Total Assets Proprietary Ratio

2017 2016 Column1

ACTIVITY RATIO
• INVENTORY TURNOVER RATIO=COST OF GOODS
SOLD/AVERAGE INVENTORY

YEAR 2017 2016

COGS 974.97 1516.26

AVERAGE
1141.74 1102.89
INVENTORY

INVENTORY
0.85 1.37
TURNOVER RATIO
 1600

Interpretation 1400

 High inventory turnover ratio implies either 1200

strong sales or ineffective buying.

 Low inventory turnover ratio is a signal of
1000

inefficiency. It also implies either poor sales

or excess inventory. 800

 Here the company’s inventory turnover ratio

is lower in 2017 (i.e.0.85)as compare to 600

2016(i.e. 1.37).
400

200

0
COGS AVG INVENTORY ITR

2017 2016 Column1

Working Capital Turnover Ratio
• WORKING CAPITAL TURNOVER RATIO= COST OF SALES/
NET WORKING CAPITAL

YEAR 2017 2016

COGS 974.97 1516.26

NET WORKING
19064.77 17171.20
CAPITAL

WORKING CAPITAL
0.051 0.088
TURNOVER RATIO
 25000

Interpretation
20000
 The working capital turnover ratio shows
the company’s ability to pay its current
liabilities with its current assets.
 High working capital turnover ratio can 15000

potentially give you a competitive edge in

your industry.
 This gives you more spending flexibility 10000
and can help avoid financial trouble.
 Here the working capital turnover ratio is
lower from 2016 which means that the
5000
company is not able to meet its sales during
the year(2017).

0
COGS NWC WCTR

2017 2016 Column1

PROFITABILITY RATIO
• RETURN ON CAPITAL EMPLOYED= NET PROFIT*100/
TOTAL CAPITAL EMPLOYED

YEAR 2017 2016

NET PROFIT 107.94 181.35

TOTAL CAPITAL
108.40 108.40
EMPLOYED

RETURN ON CAPITAL
0.99 1.67
EMPLOYED
 200

Interpretation 180

 Return on capital employed is a profitability 160

ratio that measure how efficiently a company

can generate profits from its capital employed 140

by comparing net operating profit to capital

employed. 120

 ROCE is a long term profitability ratio because

100
its shows how effectively assets are performing
while taking into consideration long term
80
financing.
 This is why ROCE is more useful ratio than 60
return on equity to evaluate the longevity of a
company. 40

20

0
NET PROFIT TOTAL CAPITAL EMPLOYED RETURN ON CAPITAL
EMPLOYED

2017 2016 Series 3

 Findings
• As we know that ideal current ratio for any firm is 2:1. If we see the current ratio of the
company for last two years it has increased from 2016 to 2017. This depicts that
company’s liquidity position is sound. Its current assets are more than its current
liabilities.
• A quick ratio is an indication that the firm is liquid and has the ability to meet its current
liabilities in time. The ideal quick ratio is 1:1. Company’s quick ratio is lower than 1 (<1).
Which means company can face the liquidity problem.
• A company is having a lower debt to equity ratio which implies a more financially stable
business.
• A company is having a lower proprietary ratio that indicates a low financial position of the
company and there is no security for their creditors.
• Gross profit has been decreases from 2.87% to 1.02% in year 2017 i.e. inefficient in
managing its trading operations.
• Return on investment (ROI) has declined drastically during the last two years.
 Conclusion
Based on the analysis that has been presented, it can be concluded that:
• The current ratio and liquidity ratio indicates the better short term financial position of
cosmos infra engineering India Pvt Ltd.
• Financial performance of the company for the last two years is analysed and it can be
possible that company can face problem related with the debt ratios, risk of creditor’s.

By conducting “ RATIO ANALYSIS” of the concern I have observed that following

areas need special attention:

• Timely using current assets

• Inventory management or inventory control.
• Liquidity position of the company is within control.
thank you !