CURRENT RATIO Current Assets ------------------------Current Liabilities

Current Assets 24678965 21588683 20683915 Current Liabilities 21128392 11339964 25537988 Current Ratio 1.16 1.90 0.80

Current ratio

=

Year 2006-2007 2007-2008 2008-2009

ANALYSIS The current ratio decreased to 1.16 in the year 2006-2007 , and again it is increased to 1.90 in 2007-2008, later it is again fallen down to 0.80. This shows that there is no improvement in the short-term solvency of the company for the year 2008-2009.

2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Current Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: Due to instability in the rate of ratios, it shows that there is no improvement in the short-term solvency of the company for the year 2008-2009.

Acid test ratio

=

Liquid Assets ---------------------------Current liabilities

Year 2006-2007 2007-2008 2008-2009

Liquid assets 23362359 15428377 16701025

Current liabilities 21128392 11339964 25537988

Liquid ratio 1.10 1.36 0.65

ANALYSIS The liquid ratio is decreased to 1.10 in the year 2006-2007 , and again it is increased to 1.36 in the year 2007-2008. This further confirms that there are fluctuations in the short-term liquidity .

1.4 1.2 1 0.8 0.6 0.4 0.2 0 Liquid ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: This further confirms that there are fluctuations in the short-term liquidity of the company. This is mainly because of low realization of sundry debtors and an in increase in quick assets and decrease in cash and bank.

DEBT-EQUITY RATIO Debt-Equity ratio = Total debts ---------------------Equity
Equity 28416205 28057713 30391887 Debt-Equity Ratio 0.87 0.56 0.47

Year 2006-2007 2007-2008 2008-2009

Total debt 24812845 15626471 14358681

ANALYSIS Debt equity ratio is 0.87 in 2006-2007 and it is decreased to 0.56 in the year 20072008 though it was decreased to 0.47 in the year 2008-2009. This shows that there is improvement in the long-term solvency position of the company.

GRAPH SHOWING DEBT-EQUITY RATIO

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Debt-Equity Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: It indicates the relative proportions of capital contribution by creditors and shareholders.

Proprietory Ratio =

Equity ---------------------Total Asset
Year 2006-2007 2007-2008 2008-2009 Equity 28416205 28057713 30391887 Total Assets 53229050 43684184 44750568 Proprietory Ratio 0.53 0.64 0.67

ANALYSIS This ratio is decreased in the year 2006-2007 to 0.53 when compared to 2005-2006 and further increased to 0.67 in the year 2008-2009 when compared to 2007-2008. this shows that there is an increase in the long-term solvency of the business.

TABLE SHOWING PROPRIETORY RATIO

0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Proprietory Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: This shows that there is an increase in the long-term solvency of the business. It shows proprietor have invested their portion to the growth and welfare of the company.

Fixed assets to Net worth Ratio =
Year

Fixed Assets (After depreciation) --------------------------------------------Shareholder·s funds
Fixed Asset Net worth Fixed assets to Net worth Ratio

2006-2007 2007-2008 2008-2009

6079307 5378748 7775901

28416205 28057713 30391887

0.21 0.19 0.25

ANALYSIS The ratio of fixed assets to net worth ratio is found to be fluctuating in the year 2006-2007 and 2007-2008. But it is slightly increased in the year 2008-2009 to 0.25.

INVENTORY TURNOVER RATIO Sales ---------------Inventory

Stock Turnover Ratio

=

Year

Sales

Inventory

Stock turnover Ratio

2006-2007 2007-2008 2008-2009

483975 21 62649553 90124231

22444998 17500270 29520878

2.15 3.57 3.05

ANALYSIS Inventory turn over ratio has decreased to 2.15 in the year 2006-2007 when compared to 2005-2006 and again increased in the year 2007-2008 to 3.57 but in the year 2008-2009 it shows a fall that is 3.05.

GRAPH SHOWING INVENTORY TURNOVER RATIO

4 3.5 3 2.5 2 1.5 1 0.5 0 Stock turnover Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: From the above table, its shown the adequacy of goods available to sell in comparison to the actual sale order. Running out of stock due to low inventory (high turnover) may indicate future shortages. It also identifies of poor management.

Debtors Turnover Ratio

Credit Sales = -----------------------Average Debtors
Credit Sales Debtors Debtors Turnover Ratio

Year

2006-2007 2007-2008 2008-2009

48397521 62649553 90124131

11818945 4174430 5947413

4.09 15.0 15.15

ANALYSIS The debtors turn over ratio has decreased to 4.09 in the year 2006-2007 and again has increased to 15.15 in the year 2008-2009.

GRAPH SHOWING DEBTORS TURNOVER RATIO

16 14 12 10 8 6 4 2 0 Debtors Turnover Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: This shows that the company is running out of cash shortage. Since credit facilities are provided to debtors, it has lead to less avoid of competitors.

Debtors Debt collection period = ---------------- * 365 days Credit Sales
Year Debtors Credit Sales Debt collection Ratio 2006-2007 2007-2008 2008-2009 11818945 4174430 5947413 48397521 62649553 90124131 89 Days 24 Days 24 Days

ANALYSIS The debt collection period ratio remains constant in the 2007-2008 and 2008-2009 but has increased in the year 2006-2007 to 89 days .

GRAPH SHOWING DEBT COLLECTION PERIOD RATIO

2006-2007

90 80 70 60 50 40 30 20 10 0 Debt collection Ratio
2007-2008 2008-2009

INTERPRETATION: The debt collection period ratio has increased to 89 days in the year 2006-2007. but has remained constant in the future i.e,24 days. Hence it shows that the company has been extending its credit facilities to customer to avoid competition.

Credit Turnover Ratio =

credit purchases ------------------------------------average creditors

Year

Credit purchase

Creditors

Creditors turn over Ratio

2006-2007 2007-2008 2008-2009

25501189 32984848 69718267

12827919 7452623 20032834

1.98 4.42 3.48

ANALYSIS The creditors turnover ratio has decreased to 1.98 in 2006-2007 again it is increased to 4.42 in 2007-2008 but again there is slight fall in the year 2008-2009 to 3.48.

GRAPH SHOWING CREDITORS TURNOVER RATIO

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Creditors turn over Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: There has been a decline in creditors turn over ratio in 2006-2007 but a rise in next year and again a decline in 2008-2009

Sales Fixed assets turnover ratio = -----------------Fixed Asset
Year Sales Fixed Assets Fixed assets turn over Ratio 2006-2007 2007-2008 2008-2009 48397521 62649553 90124131 6079307 5378248 7775901 7.96 11.64 11.59

ANALYSIS Fixed assets turnover ratio is 7.96 in the year 2006-2007 and more or less remains constant in the years 2007-2008 and 2008-2009 with slight variations standing at 11.64 and 11.59.

GRAPH SHOWING FIXED ASSETS TURNOVER RATIO

12 10 8 6 4 2 0 Fixed assets turn over Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATIONS: There is a an increase in fixed asset turnover ratios from year 2006-2007 and it remains almost the same for two year 2007 to 2009.

GROSS PROFIT RATIO Gross profit Gross profit ratio = ------------------ * 100 Sales
Year Gross profit 2006-2007 2007-2008 2008-2009 ------------3711530 2736963 48397521 62649553 90124131 Sales Gross profit Ratio -------5.92% 3.03%

ANALYSIS Gross profit ratio has increased in the year 2007-2008 to 5.92% having no profits in the year 2006-2007 and shows a fall in 2008-2009 to 3.03%.

GRAPH SHOWING GROSS PROFIT RATIO

2006-2007

0.06 0.05 0.04 0.03 0.02 0.01 0 Gross profit Ratio

2007-2008 2008-2009

INTERPRETATION: This shows that the gross profit relate to sales is average and the profit standpoint is that the firm be able to generate adequate profit on each unit of sales.

NET PROFIT RATIO
. Net profit ratio Net profit = ------------------- * 100 Sales
Year Net profit Sales Net profit Ratio 2006-2007 2007-2008 2008-2009 --------------------2334174 48397521 62649553 90124131 ------------2.6%

ANALYSIS The net profit ratio has decreased in the year 2008-2009 to 0.02% having no profit in the immediate previous years . This shows there is decline in the profitability of the company

GRAPH SHOWING NET PROFIT RATIO

0.0002 0.00015 0.0001 0.00005 0 Net profit Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: It is shown that net profit ratio is low which would indicate some mismanagement in the areas ex cluding production. This shows there is decline in the profitable of the company.

OPERATING RATIO Operating cost Operating ratio = ------------------------ * 100 Sales

Year

Operating cost

Sales

Operating Ratio

2006-2007 2007-2008 2008-2009

15647946 11102218 21072481

48397521 62649553 90124131

32.33% 18% 23.38%

ANALYSIS The operating ratio in the year 2005-2006 increased to 32.33% . But it is increased in the year 2007-2008 to 23.38% when compared to that of 17.72% in the year 20062007. So this is the reason for decline in the net profit of the company

GRAPH SHOWING OPERATING RATIO

35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Operating Ratio

2006-2007 2007-2008 2008-2009

INTERPRETATION: There was an increase in operating ratio in 2006-2007 and decline in 2007-2008 and a slight increase in 2008-2009.

RETURN ON CAPITAL EMPLOYED Net profit before tax Return on capital employed = ----------------------------capital employed

* 100

Year

Profit before tax

Capital employed 53229050 43684184
44750568

Return on capital employed ------8.5% 6.1%

2006-2007 2007-2008 2008-2009

-106398 3711530 2736963

ANALYSIS The return on capital employed ratio shows nil return on capital employed in the year 2006-2007 because of losses incurred by the company in that year. In the next year it reaches to 8.5% which is 6.1% more when compared to the one in the year 2008-2009 .

GRAPH SHOWING RETURN ON CAPITAL EMPLOYED
2006-2007 2007-2008 2008-2009

0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 Return on capital employed

INTERPRETATION: Capital employed is strong in 2007 & 2008 and its decline in 2008 & 2009

Net profit after tax ² preference dividend Earning per share= ------------------------------------------------------------no. of equity shares

Year

Number of equity shares

Profit after tax --------------------2334174

Earnings per share --------------156

2006-2007 2007-2008 2008-2009

15000 15000 15000

ANALYSIS: The earnings per share have increased to 156 in the year 2008-2009 when compared to all the remaining previous year·s earnings per share.

GRAPH SHOWING EARNING PER SHARE (EPS)

160 140 120 100 80 60 40 20 0 Earnings per share
2006-2007 2007-2008 2008-2009

INTERPRETATION: From the above table, it can easily understood that the company EPS is steadily progressed. The share capital of the company has increased without the proportionate increase in the net income.

1.In spite of incurring losses ,it has successfully managed to overcome this by making profits in future, which is a good sign of prosperity to the company. 2.The long-term solvency position of the company has shown a recurrent increase. 3.The sales of the company has increased in the year 2008-2009 which indicates that the foreign companies are well satisfied with the company·s product, which is a good sign to company·s prosperity. SUGGESTIONS 1.Modern Collections should make proper financial planning so that the available funds are utilized in more efficient and effective manner. 2.The company must try to maintain its short-term liquidity position, by investing only in those investments, which are easily convertable into cash The company should reduce the idle capacity in order to increase the efficiency in the operations. 3.Modern Collections must take immediate measures to reduce the length of the Operating cycle

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