Presented By: Suman Tripathy(11202195) Abhilash mishra(11202196) Pankaj panda(11202197) Sailaja Mohanty(11202198) Shagun Agarwal(11202199) Priyambada mahopatro(11202274) Subhankar

satapathy(11202275) Vedika Agrawal(11202276)

National Aluminum Company was incorporated in 1981 as a public sector company under the ministry of mines,Govt of India. NALCO is Asias largest integrated aluminum complex having Bauxite mines, Alumina Refinery,Aluminium Smelter and captive power plant situated in the state of Odisha, along with port facilities in Vishakhapatnam.

To understand the financial performance of Nalco. To analyze & interpret the financial statements of Nalco. To give independent opinion & trend of performance of Nalco.

Study is limited to NALCO only.

Study is limited to two years that is 2005 & 2006. The study is also based only on secondary data.

Ratio analysis is taken as a methodology considering the transparency in the technique of analysis . For this purpose following are various ratios enclosed. Short term solvency. Long term solvency. Overall profitability. Activity analysis.

Short-term Solvency Ratios attempt to measure the ability of a firm to meet its short-term financial obligations. In other words, these ratios seek to determine the ability of a firm to avoid financial distress in the short run . They are as followsCurrent

Ratio Quick Ratio Stock turnover Ratio

current ratio=current assets/current liabilities A ratio of 2:1 is considered satisfactory as per the thumb rule.
Particulars
Current asset Current liabilities Current ratio

2005
1811.04 616.25 2.94

2006
3297.88 607.33 5.43 6 5 4 3 2 1 0

current ratio
5.43 2.94 current ratio

2005 2006

Interpretation: We can see that for the year 2005 the current ratio is a bit high than the normal standards, while for the year 2006 it is quite high. so we can conclude that current ratio for both the years is quite satisfactory.

Quick ratio=liquid assets/current liabilities 1:1 is considered as satisfactory.

Particulars
Liquid assets Current liabilities Quick ratio

2005
1281.98 616.25

2006
5 2706.30 607.33 4 3 2 1 0

quick ratio

quick ratio

2.08

4.45

2005 2006

Interpretation: We can clearly see that the quick ratio has increased from 2.08 to 4.45 which is more than the standard norms. It shows the company liquidity position is quite good. It is able to meet the short term obligations.

STR=cost of goods sold/average stock

No standard norms can be determined for it as it is based on nature of industry & sales policy of firms.
Particulars 2005 2006 8.4

STR

Net sales
Average stock STR

4104.11
529.06

4851.90
591.58

8.2 8

8.2
7.75 STR

7.8
7.6 7.4

7.75

8.20

2005 2006

Interpretation: Generally lesser the STR better it is for the company. It means the company is able to sell its product quickly in the market. By comparing both the years we can find that in the year 2005 the STR is less. It means the company is able to sell its goods quickly in 2005 as compared to 2006.

One of many ratios used to measure a company's ability to meet long-term obligations. It provides a measurement of how likely a company will be to continue meeting its debt obligations. They are as follows

Proprietary Ratio Solvency Ratio Fixed Assets To Net Worth Ratio Ratio Of Current Assets to Proprietors Fund Ratio Of Current Assets to Total Liabilities Proprietors Liability Ratio

Higher the ratio lesser is the dependence for working capital on outside sources, and better the long term solvency.
Particulars 2005 2006 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2005006 2

S.F TA Ratio

4697.81 6156.65 0.56

5892.67 7474.55 0.7

P.F

Solvency Ratio = Total Assets/Total Liabilities Higher the ratio is, the greater is the dependence of the firm on outsiders.

The ratio should not exceed 1:1 as per the Thumb Rule.

Current Assets/Proprietors Fund

There is no specific Rule of Thumb for this ratio.
Particulars 2005
Current Assets 1811.04

2006
3297.88 5892.67 0.559658 0.6 0.5 0.4 0.3 0.2 0.1 0

Current Assets To Proprietor's Fund

Current Assets To Propriet or's Fund
2005006 2

Proprietor 4697.81 s Fund Current 0.3855073 Assets To Proprietor s Fund

Current Assets /Total Liabilities

Particulars 2005
Current Assets Total Liabilities Current Assets To Total Liabilities 1811.04 6156.65 0.29416

2006
3297.88 7474.55 0.44121 0.5 0.4 0.3 0.2 0.1 0

Current Assets To Total Liabilities

Current Assets To Total Liabiliti es

2005 2006

Proprietors Fund/Total liabilities

Higher the ratio, better is the security of the creditor.
Particulars
Proprietor s Fund Total Liabilities Proprietor s liability Ratio

2005
4697.81

2006
5892.67 0.8 0.79 0.78

Proprietor's Liability Ratio

6156.65

7474.55

0.77
0.7630465 0.7883645 0.76 0.75 2005 2006

Proprietor 's Liability Ratio

Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return. They are as follows: Return On equity Capital Ratio Earnings Per Share Return On Share Holders Return On Total Investment Return On Total Assets Return On Capital Employed

Net profit Paid up equity share capital100

Particulars Net Profit Equity Share Capital Ratio 2005 1562.20 644.31 2006

Return on equity capital

300 250 200 150 100 50 0 20052006

1234.84
644.31

Ratio

242.46

191.65

INTERPRETATION: 2005 results are more satisfactory than that of 2006.

Net Profit after Tax & Preference Dividend No. of equity shares
Particulars Net Profit after tax No of Equity Shares Ratio 2005 15.58 81.27 2006 10.49 43.25 30 20

Earnings Per Share

10
0

Ratio

0.19

0.24

INTERPRETATION: Higher the EPS, better it is. Hence, 2006 was better than 2005.

Net profit Share holders fund 100

Particulars Net Profit Share Holders Fund Ratio 2005 1174.23 4697.81 2006 1562.20 5892.62 27 26 25 24 24.99 26.51 2005 2006 Ratio

Return on Sh. Holders

INTERPRETATION :Higher the ratio better it is for the firm and when compared with the previous year there is improvement but the condition is not satisfactory.

Net profit (before interest and tax) x 100 Total Asset

37.5 37 36.5 36 35.5 35 34.5 34 33.5 2005 2006

2005

2006

34.95

37.18

INTERPRETATION: Increased from 34.95 to 37.18 which is satisfactory. The profitability of the firm in relation to assets employed has also Increased

(Profit after tax/ Capital Employed) x 100

300 2005 2006

250
200 150

191.65

242.46

100 50

Interpretation
Increased from 191.65 to 242.46 which is satisfactory. The company has utilized its resources very well.

0 2005 2006

Activity ratios measure the effectiveness of the firms use of resources. They Are as follows: Total Assets Turnover Ratio Fixed Assets Turnover Ratio Current Assets Turnover Ratio

Net sales / Total Assets

A ratio of 2:1 is considered as satisfactory according to the Thumb Rule.
Particular 2005 2006

Net Sales Total Assets Ratio

4104.11 6156.65 0.67

4851.90 7474.55 0.65

Net Sales / Fixed Assets

A ratio of 5:1 is considered satisfactory as per the Thumb Rule.
Particulars Net Sales 2005 4104.11 2006 4851.90 4176.67 1.16

Fixed Assets 4345.61 Ratio 0.94

Net Sales / Current Assets

Particular 2005 Net Sales Current Assets Ratio 4104.11 1811.04 2006 4851.90 3297.88

2.26

1.47

The firm has liquidity to meet its short term obligations . The firm would be able to meet its long term commitments. The current ratio for the firm is satisfactory. The firm has better earnings per share in 2006 as compared to 2005. The company is in good position since has got a good return of capital employed