Ratios Analysis

CURRENT RATIO =
CURRENT ASSETS
CURRENT LIABILITIES
CURRENT SUNDRY
ASSETS = INVENTORIES + DEBTORS + BALANCES + ASSETS.
CASH AND BANK OTHER CURRENT
CURRENT LIABILITIES = SUNDRY CREDITORS+ BILLS BILLS PAYABLE + OTHER CURRENT LIABILITIES.
2006
CURRENT ASSETS = Rs.6210.06 (inventories) + Rs.1881.73 (Sundry debtors) + Rs.6172.64 (Cash & bank Balance) + Rs.85.48 (Other Current assets) = Rs.14349.91
CURRENT LIABILITIES = Rs.5191.70
CURRENT RATIO =
CURRENT ASSETS CURRENT LIABILITIES
14349.91 5191.70 2.76: 1
2007
CURRENT ASSETS = Rs.6651.47 (inventories) + Rs.2314.75 (Sundry debtors) + Rs.9609.83 (Cash & bank Balance) + Rs.152.56 (Other current assets) = Rs.18728.61
CURRENT RATIO =
18728.61 5397.77 3.47: 1
2008
CURRENT ASSETS = Rs.6857.23 (inventories) + Rs.3048.12 (Sundry debtors) + Rs.13759.44 (Cash & bank Balance) + Rs.273.08 (Other current assets) = Rs.23937.87
CURRENT RATIO =
23937.87 6400.92 3.73: 1
INTERPRETATION
IDEAL RATIO = 2:1
2006
CURRENT RATIO IS 2.76:1 WHICH SHOWS THAT THE RATIO IS SATISFACTORY AND CURRENT ASSETS ARE SUFFICIENT TO MEET CURRENT LIABILITIES AND THE COMPANY SHOULD NOT DEPEND UPON ITS LONG TERM SOURCES TO PAY ITS SHORT TERM LIABILITIES.
2007
CURRENT RATIO IS 3.47:1 WHICH IMPLIES HEAVY INVESTMENT IN CURRENT ASSETS WHICH IS NOT A GOOD SIGN AS IT REFLECTS UNDER UTILISATION OR IMPROPER UTILISATION OF RESOURCES.
2008
CURRENT RATIO IS 3.73:1 WHICH IMPLIES HEAVY INVESTMENT IN CURRENT ASSETS WHICH IS NOT A GOOD SIGN AS IT REFLECTS UNDER UTILISATION OR IMPROPER UTILISATION OF RESOURCES
QUICK RATIO =
LIQUID ASSETS LIQUID LIABILITIES
LIQUID ASSETS / = STOCK QUICK ASSETS EXPENSES.
CURRENT ASSETS PREPAID
LIQUID LIABILITIES / = CURRENT LIABILITY QUICK LIABILITIES BANK OVERDRAFT
2006
LIQUID ASSETS = Rs.14349.91 (current assets) Rs.6210.06 (inventories) = Rs.8139.85
LIQUID LIABILITIES = Rs.5191.70
QUICK RATIO =
8139.85 5191.70
1.57: 1
2007
QUICK RATIO =
127077.14 5397.77
2.24: 1
2008
QUICK RATIO =
17080.64 6400.92
2.67: 1
INTERPRETATION
IDEAL RATIO = 1:1
2006
QUICK RATIO IS 1.57:1 WHICH SHOWS THAT THE RATIO IS SATISFACTORY AND THE ASSETS CAN BE CONVERTED INTO CASH PROMPTLY OR VERY SHORTLY.
2007
QUICK RATIO IS 2.24:1 WHICH SUGGESTS UNNECESSARILY DEPLOYMENT OF RESOURCES IN OTHERWISE LESS PROFITABLE SHORT TERM INVESTMENTS.
2008
QUICK RATIO IS 2.67:1 WHICH SUGGESTS UNNECESSARILY DEPLOYMENT OF RESOURCES IN OTHERWISE LESS PROFITABLE SHORT TERM INVESTMENTS.
PROPRIETORY RATIO =
SHAREHOLDER FUNDS TOTAL ASSETS
SHAREHOLDER FUNDS/ = SHARE CAPITAL + PROPRIETORY FUND RESERVES AND SURPLUS TOTAL ASSETS = FIXED ASSETS + INVESTMENTS + CURRENT ASSETS + LOANS AND ADVANCES +
MISCELLENOUS EXPENDITURE
2006
SHAREHOLDER FUNDS = Rs.4130.40 (share capital) + Rs.8471.01 (reserves And surplus) = Rs.12601.41 TOTAL ASSETS = Rs.12162.14 (fixed assets) + Rs.292.00 (investments) + Rs.15630.83 (current assets And loans) + Rs.215.82 (misc. Expenditure) = Rs.28300.79
PROPRIETORY RATIO = SHAREHOLDER FUNDS TOTAL ASSETS
= 12601.41 28300.79 = 0.45: 1
2007
= 17313.15 33817.79 = 0.51: 1
2008
= 23063.57 40876.16
= 0.56: 1
INTERPRETATION
IDEAL RATIO = 1:3 THIS RATIO SHOWS THE GENERAL FINANCIAL POSITION OF THE COMPANY.
2006
PROPRIETORY RATIO IS 0.45 WHICH INDICATES POSITIVE FEATURES AS IT PROVIDES SECURITY TO CREDITORS.
2007
2008
FIXED ASSETS TO PROPRIETORY FUND RATIO = FIXED ASSETS PROPRIETORY FUND
PROPRIETORY FUND / SHAREHOLDERS FUND = SHARE CAPITAL + RESERVES AND SURPLUS
2006
FIXED ASSETS = Rs.12162.14
PROPRIETORY FUND = Rs.4130.40 (share capital) Rs.8471.01 (reserves And surplus) = Rs.12601.41
FIXED ASSETS TO PROPRIETORY FUND RATIO = FIXED ASSETS PROPRIETORY FUNDS
12162.14
12601.41
0.97: 1
2007
12796.23 17313.15
0.74: 1
2008
13960.86 23063.57
0.61: 1
INTERPRETATION
IDEAL RATIO = 1:1
2006
FIXED ASSETS TO PROPRIETORY FUND RATIO IS 0.97:1 WHICH INDICATES THAT ASSETS HAVE BEEN MAINLY FINANCED BY OWNERS FUNDS. THE EXTENT OF COVERAGE OF THEIR DEBT IS COVERED BY ASSETS.
2007
FIXED ASSETS TO PROPRIETORY FUND RATIO IS 0.74:1 WHICH INDICATES THAT ASSETS HAVE BEEN MAINLY FINANCED BY OWNERS FUNDS. THE EXTENT OF COVERAGE OF THEIR DEBT IS COVERED BY ASSETS.
2008
FIXED ASSETS TO PROPRIETORY FUND RATIO IS 0.61:1 WHICH INDICATES THAT ASSETS HAVE BEEN MAINLY FINANCED BY OWNERS FUNDS. THE EXTENT OF COVERAGE OF THEIR DEBT IS COVERED BY ASSETS
CAPITAL GEARING RATIO =

FIXED INTEREST/DIVIDEND BEARING FUND
EQUITY SHAREHOLDER FUNDS
FIXED INTEREST/DIVIDEND BEARING FUNDS = PREFERENCE SHARE CAPITAL + LONG TERM DEBTS
EQUITY SHAREHOLDER FUNDS / PROPRIETORY FUNDS / SHAREHOLDER FUNDS = EQUITY SHARECAPITAL + RESERVRS AND SURPLUS
2006
FIXED INTEREST/DIVIDEND BEARING FUNDS = Rs.4297.62 (long term debts)
EQUITY SHARE CAPITAL = Rs.4130.40 (equity Share capital) + Rs.8471.01 (reserves And surplus) = Rs.12601.41 CAPITAL GEARING RATIO =
FIXED INTEREST/DIVIDEND BEARING RATIO EQUITY SHAREHOLDERS FUNDS
= 4297.62 12601.41
= 0.34: 1
2007
EQUITY SHARE CAPITAL = Rs.4130.40 (equity Share capital) + Rs.13182.75 (reserves And surplus) = Rs.17313.15 CAPITAL GEARING RATIO =
= 4180.52 17313.15 = 0.24: 1
2008
EQUITY SHAREHOLDERS FUND = Rs.4130.40 (equity Share capital) + Rs.18933.17 (Reserves and surplus) = Rs.23063.57 CAPITAL GEARING RATIO =
= 3045.24 23063.57 = 0.13: 1
INTERPRETATION
THIS RATIO SHOWS THE MIX OF FINANCE EMPLOYED IN THE BUSINESS.
2006
CAPITAL GEARING RATIO IS 0.34:1 WHICH INDICATES THST GEARING IS SAID TO BE LOW, LESS SPEED AND TRADING ON THICK EQUITY THUS OVER CAPITALISATION.
2007
2008
DEBT EQUITY RATIO = LONG-TERM DEBT SHAREHOLDERS FUND
LONG-TERM DEBT = SECURED LOAN + UNSECURED LOAN
SHAREHOLDER S FUND = EQUITY SHARECAPITAL + PREFERENCE SHARECAPITAL + RESERVES AND SURPLUS
2006
LONG-TERM DEBT = Rs.1122.16 (secured loan) + Rs.3175.46 (unsecured loan) = Rs.4297.62 SHAREHOLDER FUNDS = Rs.4130.40 (share capital) + Rs.8471.01 (reserves And surplus) = Rs.12601.41 DEBT EQUITY RATIO = LONG-TERM DEBT SHAREHOLDERS FUND
= 4297.62 12601.41
= 0.34: 1
2007
LONG-TERM DEBT = Rs.1556.39 (secured loan) + Rs.2624.13 (unsecured loan) = Rs.4180.52 SHAREHOLDERS FUND= Rs.4130.40 (Equity Sharecapital) +Rs.13182.75 (Reserves & Surplus) = Rs.17313.15
DEBT EQUITY RATIO = LONG-TERM DEBT SHAREHOLDERS FUND
= 4180.52 17313.15 = 0.24: 1
2008
LONG-TERM DEBT = 925.31(secured loan) + 2119.93(unsecured loan) = 3045.24
SHAREHOLDERS FUND= 4130.40(Equity sharecapital) +18933.17(Reserves & surplus) = 23063.57
DEBT EQUITY RATIO = LONG-TERM DEBT SHAREHOLDERS FUND = 3045.24 23063.57
= 0.13: 1
INTERPRETATION
IDEAL RATIO = 2:1
2006
DEBT EQUITY RATIO IS 0.34:1 WHICH IMPLIES GREATER CLAIM OF OWNERS THAN CREDITORS. FROM THE PERSPECTIVE OF THE OWNERS, GREATER USE OF DEBT TRADING ON EQUITY MAY HELP IN ENSURING HIGHER RETURN FOR THEM IF THE RATE OF EARNING ON CAPITAL EMPLOYED IS HIGHER THAN THE RATE OF INTEREST PAYABLE. FROM THE POINT OF VIEW OF CREDITORS, IT REPRESENTS A SATISFACTORY CAPITAL STRUCTURE SINCE A HIGH PROPORTION OF EQUITY PROVIDES A LARGER MARGIN OF SAFETY FOE THEM.
2007
DEBT EQUITY RATIO IS 0.24:1 WHICH IMPLIES GREATER CLAIM OF OWNERS THAN CREDITORS.
2008
DEBT EQUITY RATIO IS 0.13:1 WHICH IMPLIES GREATER CLAIM OF OWNERS THAN CREDITORS
LONG-TERM FUND TO FIXED ASSETS RATIO = LONG-TERM FUNDS FIXED ASSETS
LONG-TERM FUNDS = SHAREHOLDERS FUND + LONGTERM DEBTS
2006
LONG-TERM FUNDS = Rs.12601.41 (shareholders Fund) +Rs.4297.62. (longterm Debt) = Rs.16899.03
LONG-TERM FUND TO FIXED ASSETS RATIO = LONG-TERM FUNDS FIXED ASSETS = 16899.03 12162.14
= 1.39: 1
2007
LONG-TERM FUNDS = 17313.15(shareholders fund) +4180.52(long-term debt) = 21493.67
FIXED ASSETS = 12796.23
= 1.68: 1
2008
LONG-TERM FUNDS = Rs.23063.57 (shareholders Fund) +Rs.3045.24 (long-term Debt) = Rs.26108.81
1.87: 1
GROSS PROFIT RATIO =
GROSS PROFIT NET SALES
*100
GROSS
PROFIT =
NET SALES COGS
NET SALES = SALES EXCISE DUTY
COGS (COST OF GOODS SOLD) = OPENING STOCK + PURCHASES CLOSING STOCK + ALL OTHER MANUFACTURING RELATED EXPENSES.
2006
NET SALES = SALES - EXCISE DUTY = Rs.32279.75 Rs.4419.41 = Rs.27860.34
COGS = Rs.4220.69 (opening stock) + (COST OF GOOGS SOLD) Rs.21320.03(purchase) Rs.6210.06(closing stock) + Rs.3247.36 (manufacturing expenses) = Rs.22578.02
GROSS PROFIT = NET SALES COGS = Rs.27860.34 22578.02 = Rs.5282.32 GROSS PROFIT RATIO = GROSS PROFIT*100 NET SALES = 52582.32 *100 27860.34
= 19 %
2007
COGS = Rs.6210.06 (opening stock) + (COST OF GOOGS SOLD) Rs.22766.57 (purchase) Rs.6651.47 (closing stock) + Rs.4885.59 (manufacturing expenses) = Rs.27210.76
GROSS PROFIT = NET SALES COGS = Rs.33923.12 Rs.27210.76 = Rs.6712.36 GROSS PROFIT RATIO = GROSS PROFIT*100 NET SALES = 6712.36 *100 33923.12
= 20 %
2008
COGS = Rs.6651.47 (opening stock) + (COST OF GOODS SOLD) Rs.26254.18 (purchase) Rs.6857.23 (closing stock) + Rs.5379.73 (manufacturing expenses) = Rs.31428.15
GROSS PROFIT = NET SALES COGS = Rs.39508.45 Rs.31428.15 = Rs.8080.3 GROSS PROFIT RATIO = GROSS PROFIT*100 NET SALES = 8080.3 *100 39508.45
= 21 %
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 GROSS PROFIT RATIO HAS INCREASED TO 19% WHICH DETERMINED REDUCTION IN COST OF PRODUCTION OR DIRECT EXPENSES OR SALE AT REASONABLY GOOD PRICE.HIGHER G.P.R IS ALWAYS A GOOD SIGN.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 GROSS PROFIT RATIO HAS INCREASED TO 20% WHICH DETERMINED REDUCTION IN COST OF PRODUCTION OR DIRECT EXPENSES OR SALE AT REASONABLY GOOD PRICE.HIGHER G.P.R IS ALWAYS A GOOD SIGN.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 GROSS PROFIT RATIO HAS INCREASED TO 21% WHICH DETERMINED REDUCTION IN COST
OF PRODUCTION OR DIRECT EXPENSES OR SALE AT REASONABLY GOOD PRICE.HIGHER G.P.R IS ALWAYS A GOOD SIGN.
OPERATING RATIO =
EXPENSES*100
TOTAL OPERATING NET SALES
TOATAL OPERATING EXPENSES = COST OF GOODS SOLD + OPERATING EXPENSES + FINANCIAL EXPENSES
NET SALES =
SALES -
EXCISE DUTY
2006
TOTAL OPERATING EXPENSES= Rs.23702.80
NET SALES = SALES EXCISE DUTY = Rs.32279.75 Rs.4419.41 = Rs.27860.34
OPERATING RATIO=
TOTAL OPERATING EXPENSES*100 NET SALES
= 23702.80*100 27860.34
85.08 %
2007
TOTAL OPERATING EXPENSES= Rs.26483.93
OPERATING RATIO=
= 26483.93*100 33923.12
78.07 %
2008
TOTAL OPERATING EXPENSES=Rs.30423.47
OPERATING RATIO=
= 30423.47*100 39508.45
77 %
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 OPERATING RATIO HAS DECREASED TO 85.08% WHICH DETERMINED HIGHER EFFICIENCY BECAUSE A MAJOR PART OF SALES IS NOT EATEN UP BY OPERATING COST.LOWER OPERATING RATIO IS ALWAYS IN THE INTEREST OF THE ENTERPRISE.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 OPERATING RATIO HAS DECREASED TO 78.07% WHICH DETERMINED HIGHER EFFICIENCY BECAUSE A MAJOR PART OF SALES IS NOT EATEN UP BY OPERATING COST.LOWER OPERATING RATIO IS ALWAYS IN THE INTEREST OF THE ENTERPRISE.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 OPERATING RATIO HAS DECREASED TO 77% WHICH DETERMINED HIGHER EFFICIENCY BECAUSE A MAJOR PART OF SALES IS NOT EATEN UP BY OPERATING COST.LOWER OPERATING RATIO IS ALWAYS IN THE INTEREST OF THE ENTERPRISE.
OPERATING PROFIT RATIO
OPERATING PROFIT*100 NET SALES
NET SALES = SALES EXCISE DUTY COGS (COST OF GOODS SOLD) = OPENING STOCK + PURCHASES CLOSING STOCK + ALL OTHER MANUFACTURING RELATED EXPENSES.
GROSS
PROFIT =
NET SALES COGS
OPERATING PROFIT = NET SALES COGS GROSS PROFIT OPERATING EXPENSES
2006
NET SALES = SALES EXCISE DUTY = Rs.39188.66 Rs.4419.41 = Rs.27860.34 COGS = Rs.4220.69 (opening stock) + (COST OF GOOGS SOLD) Rs.21320.03 (purchase) Rs.6210.06 (closing stock) + Rs.3247.36 (manufacturing expenses) = RS.22578.02
GROSS PROFIT = NET SALES COGS = Rs.27860.34 Rs.22578.02 = Rs.5282.32
OPERATING PROFIT = Rs.5282.32 (Gross profit) Rs.2611.87 (Operating Expenses) = Rs.2670.45

= 2670.45*100 27860.34 = 9.59 %
2007
NET SALES = SALES EXCISE DUTY = Rs.39188.66 Rs.5265.54 = Rs.33923.12 COGS = Rs.6210.06 (opening stock) + (COST OF GOOGS SOLD) Rs.22766.57 (purchase) Rs.6651.47 (closing stock) + Rs.4885.59 (manufacturing expenses) = RS.27210.76
GROSS PROFIT = NET SALES COGS = Rs.33923.12 Rs.27210.76 = Rs.6712.36
OPERATING PROFIT = Rs.6712.36 (Gross profit) Rs.2463.15 (Operating Expenses) = Rs.4249.21

= 4249.21*100 33923.12 = 12.53 %
2008
NET SALES = SALES EXCISE DUTY = Rs.45555.34 Rs.6046.89 = Rs.39508.45 COGS = Rs.6651.47 (opening stock) + (COST OF GOOGS SOLD) Rs.26254.18 (purchase) Rs.6857.23 (closing stock) + Rs.5379.73 (manufacturing expenses) = Rs.31428.15
GROSS PROFIT = NET SALES COGS = Rs.39508.45 Rs.31428.15
= Rs.8080.3 OPERATING PROFIT = Rs.8080.3 (Gross profit) Rs.2716.28 (Operating Expenses) = Rs.5364.02
INTERPRETATION
2006
= 5364.02*100 39508.45 = 13.58%
IN COMPARISION TO 2005 PERFORMANCE 2006 OPERATING PROFIT RATIO HAS INCREASED TO 9.59% WHICH DETERMINED LOWER EFFICIENCY OF THE FIRM.THUS IT IS NOT A HEALTHY SIGN.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 OPERATING PROFIT RATIO HAS INCREASED TO 12.53% WHICH DETERMINED LOWER
EFFICIENCY OF THE FIRM.THUS IT IS NOT A HEALTHY SIGN.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 OPERATING PROFIT RATIO HAS INCREASED TO 13.58% WHICH DETERMINED LOWER EFFICIENCY OF THE FIRM.THUS IT IS NOT A HEALTHY SIGN.
DIRECT OPERATING RATIO= COGS*100

NET SALES
2006

NET SALES
= 22578.02*100
27860.34
= 81.04 %
2007
NET SALES = SALES - EXCISE DUTY = Rs.39188.66 Rs.5265.54
Rs.33923.12

NET SALES
= 27210.76*100
33923.12
= 80.2 %
2008

NET SALES
= 31428.15*100
39508.45
= 80 %
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 DIRECT OPERATING RATIO HAS DECREASED TO 81.04% WHICH DETERMINED HIGHER EFFICIENCY BECAUSE A MAJOR PART OF SALES IS NOT EATEN UP BY DIRECT OPERATING COST.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 DIRECT OPERATING RATIO HAS DECREASED TO 80.2% WHICH DETERMINED HIGHER
EFFICIENCY BECAUSE A MAJOR PART OF SALES IS NOT EATEN UP BY DIRECT OPERATING COST.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 DIRECT OPERATING RATIO HAS DECREASED TO 80% WHICH DETERMINED HIGHER EFFICIENCY BECAUSE A MAJOR PART OF SALES IS NOT EATEN UP BY DIRECT OPERATING COST.
NET PROFIT RATIO =
NET PROFIT*100 NET SALES
2006
NET PROFIT RATIO =
= 4012.97*100 27860.34
= 14.40%
2007
NET PROFIT RATIO =
NET PROFIT*100
NET SALES
= 6202.29*100 33923.12
=18.28%
2008
NET PROFIT RATIO =
= 7536.78*100 39508.45
=19.08%
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 NET PROFIT RATIO HAS INCRESED TO 14.40% WHICH DETERMINED THAT THE PERFORMANCE OF THE MANAGEMENT IS APPRECIATED AND PLUS POINT REINFORCED.
2007
IN COMPARISION TO 2006 PERFORMANCE
2007 NET PROFIT RATIO HAS INCRESED TO 18.28% WHICH DETERMINED THAT THE PERFORMANCE OF THE MANAGEMENT IS APPRECIATED AND PLUS POINT REINFORCED.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 NET PROFIT RATIO HAS INCRESED TO 19.08% WHICH DETERMINED THAT THE PERFORMANCE OF THE MANAGEMENT IS APPRECIATED AND PLUS POINT REINFORCED.
RETURN ON
INTEREST*100
PROFIT AFTER TAX + TOTAL CAPITAL EMPLOYED
CAPITAL EMPLOYED
SHAREHOLDERS FUND = SHARE CAPITAL + RESEVES
AND SURPLUS
TOTAL LONG TERM DEBTS= SECURED LOANS + UNSECURED LOANS
TOTAL CAPITAL EMPLOYED = SHAREHOLDERS FUND LONG TERM DEBTS
+ TOTAL
2006
SHAREHOLDER FUNDS = Rs.4130.40 (share capital) + Rs.8471.01 (reserves
And surplus) = Rs.12601.41 LONG-TERM DEBT = Rs.1122.16 (secured loan) + Rs.3175.46 (unsecured loan) = Rs.4297.62
TOTAL CAPITAL EMPLOYED =Rs.12601.41 (shareholders
Fund) Rs.4297.62 (long Term debts) = Rs.16899.03

RETURN ON
PROFIT AFTER TAX + INTEREST*100 TOTAL CAPITAL EMPLOYED
CAPITAL EMPLOYED =
= 4012.97 + 467.76*100 16899.03 = 26.51%
2007
SHAREHOLDERS FUND = Rs.4130.40 (share capital) + Rs.13182.75 (reserves
And surplus) = Rs.17313.15
LONG TERM DEBTS = Rs.1556.39 (secured loans) + Rs.2624.13 (unsecured loans) = Rs.4180.52

RETURN ON
CAPITAL EMPLOYED =
= 6202.29 + 332.13*100 21493.67 = 30.40%
2008
LONG TERM DEBTS = Rs.925.31 (secured loans) + Rs.2119.93 (unsecured loans) = Rs.3045.24

RETURN ON
CAPITAL EMPLOYED =
= 7536.78 + 250.94*100 26108.81 = 29.83%
INTERPRETATION
2006
2006 RETURN ON CAPITAL EMPLOYED HAS INCREASED TO 26.51% WHICH DETERMINED THE CAPITAL EMPLOYED IN THE BUSINESS IS EFFECTIVELY USED.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 RETURN ON CAPITAL EMPLOYED HAS INCREASED TO 30.40% WHICH DETERMINED THE CAPITAL EMPLOYED IN THE BUSINESS IS EFFECTIVELY USED.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 RETURN ON CAPITAL EMPLOYED HAS DECREASED TO 29.83% WHICH DETERMINED THE CAPITAL EMPLOYED IN THE BUSINESS IS NOT EFFECTIVELY USED.
RETURN ON
PROFIT AFYER TAX *100
SHAREHOLDERS FUND
SHAREHOLDERS FUND
SHAREHOLDERS FUND = SHARE CAPITAL + RESEVES AND SURPLUS
2006
SHAREHOLDER FUNDS = Rs.4130.40 (share capital)
+ Rs.8471.01 (reserves And surplus) = Rs.12601.41
RETURN ON = SHAREHOLDERS FUND
PROFIT AFTER TAX *100 SHAREHOLDERS FUND
4012.97 *100 12601.41
31.85 %
2007
6202.29 *100 17313.15
35.82%
2008
SHAREHOLDERS FUND = Rs.4130.40 (share capital) + Rs.18933.17 (reserves And surplus) = Rs.23063.57
7536.78 *100 23063.57
32.68%
INTERPRETATION
2006
2006 RETURN ON SHAREHOLDERS FUND HAS INCREASED TO 31.85% WHICH IMPLY THAT COMPANYS FUNDS HAVE BEEN EMPLOYED PROFITABLY AS RETURN ON SHAREHOLDER FUNDS IS HIGHER THAN RETURN ON CAPITAL EMPLOYED.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 RETURN ON SHAREHOLDERS FUND HAS INCREASED TO 35.82% WHICH IMPLY THAT COMPANYS FUNDS HAVE BEEN EMPLOYED PROFITABLY AS RETURN ON SHAREHOLDER FUNDS IS HIGHER THAN RETURN ON CAPITAL EMPLOYED.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 RETURN ON SHAREHOLDERS FUND HAS DECREASED TO 32.68% WHICH IMPLY THAT COMPANYS FUNDS HAVE NOT BEEN EMPLOYED PROFITABLY AS RETURN ON SHAREHOLDER FUNDS IS HIGHER THAN RETURN ON CAPITAL EMPLOYED.
RETURN ON EQUITY
SHAREHOLDERS FUND =
TOTAL EARNING AVAILABLE TO EQUITY SHAREHOLDER *100 EQUITY SHAREHOLDERS FUND
TOTAL EARNING AVAILABLE TO EQUITY SHAREHOLDER = AFTER TAX PREFERENCE DIVIDEND
PROFIT
EQUITY SHAREHOLDERS FUND = EQUITY SHARE CAPITAL + RESERVES SURPLUS AND
2006
TOTAL EARNING AVAILABLE TO EQUITY SHAREHOLDER = Rs.4012.97 (profit After tax) nil (Preference dividend) = Rs.4012.97
EQUITY SHAREHOLDERS FUND = Rs.4130.40 (Equity share capital) + Rs.8471.01 (reserves And surplus) = Rs.12601.41 RETURN ON EQUITY SHAREHOLDERS FUND =
4012.97 *100 12601.41
31.85%
2007
6202.29 *100 17313.15
35.82%
2008
7536.78 *100 23063.57
32.68%
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 RETURN ON EQUITY SHAREHOLDERS FUND HAS INCREASED TO 31.85% WHICH IMPLY THAT COMPANYS FUNDS HAVE BEEN EMPLOYED PROFITABLY AS RETURN ON SHAREHOLDER FUNDS IS HIGHER THAN RETURN ON CAPITAL EMPLOYED
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 RETURN ON SHAREHOLDERS FUND HAS INCREASED TO 35.82% WHICH IMPLY THAT COMPANYS FUNDS HAVE BEEN EMPLOYED PROFITABLY AS RETURN ON SHAREHOLDER FUNDS IS HIGHER THAN RETURN ON CAPITAL EMPLOYED.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 RETURN ON SHAREHOLDERS FUND HAS DECREASED TO 32.68% WHICH IMPLY THAT COMPANYS FUNDS HAVE NOT BEEN EMPLOYED
PROFITABLY AS RETURN ON SHAREHOLDER FUNDS IS HIGHER THAN RETURN ON CAPITAL EMPLOYED.
STOCK TURNOVER RATIO = COST OF GOODS SOLD

AVERAGE INVENTORY
OR OR
= =
NET SALES AVERAGE INVENTORY
NET SALES CLOSING STOCK
COST OF GOODS SOLD = OPENING STOCK + PURSHASE - CLOSING STOCK + ALL OTHERS DIRECT EXPENSES AVERAGE INVENTORY
= OPENING STOCK+CLOSING STOCK 2
2006
COST OF GOODS SOLD = RS.4220.69 (opening stock) + RS21320.03 (purchase) - RS.6210.06(closing stock) + RS.3247.36 (All other direct expenses) = RS.22578.02 AVERAGE INVENTORY = RS.4220.69(opening stock)+ RS.6210.06(closing stock)
2
=RS.5215.375 STOCK TURNOVER RATIO = COST OF GOODS SOLD AVERAGE INVENTORY = 22578.02 5215.375
= 4.33 times
2007
COST OF GOODS SOLD = RS.6210.06 (opening stock) + RS.22766.57 (purchase) - RS.6651.47(closing stock) +RS. 4885.59 (All other direct expenses) = RS.27210.76 AVERAGE INVENTORY = RS.6210.06(opening stock)+ RS.6651.47(closing stock)
2
=RS.6430.765 STOCK TURNOVER RATIO = COST OF GOODS SOLD AVERAGE INVENTORY = 27210.76 6430.765
=4.23 times
2008
COST OF GOODS SOLD = RS.6651.47 (opening stock) + RS.26254.18 (purchase) - RS.6857.23(closing stock) + RS.5379.73 (All other direct expenses) = RS.31428.15 AVERAGE INVENTORY = RS.6651.47(opening stock)+ RS.6857.23(closing stock)
2
=RS.6754.35 STOCK TURNOVER RATIO = COST OF GOODS SOLD AVERAGE INVENTORY = 31428.15
6754.35 =4.65 times
Average inventory holding period Or Stock velocity

AVERAGE INVENTORY HOLDING PERIOD = 365 DAYS OR 12 MONTHS STOCK TURNOVER RATIO
2006
AVERAGE INVENTORY HOLDING PERIOD = 365 days 4.33 =84 days
2007
AVERAGE INVENTORY HOLDING PERIOD = 365 days 4.23 = 86 days
2008
AVERAGE INVENTORY HOLDING PERIOD = 365 days 4.65 = 78 days
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 STOCK TURNOVER RATIO HAS DECREASED TO 4.33 TIMES WHICH SHOWS THAT THE STOCK IS BLOCKED AND NOT IMMEDIATELY SOLD AND INEFFICIENCY OF THE MANAGEMENT.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 STOCK TURNOVER RATIO HAS DECREASED TO 4.23 TIMES WHICH SHOWS THAT THE STOCK IS BLOCKED AND NOT IMMEDIATELY SOLD AND INEFFICIENCY OF THE MANAGEMENT.
2008
2008 STOCK TURNOVER RATIO HAS INCREASED TO 4.65 TIMES WHICH IMPLIES GOOD INVENTORY MANAGEMENT AND AN INDICATOR OF GOOD SALES POLICY.
RAW MATERIAL TURNOVER RATIO = RAW MATERIAL CONSUMED AVERAGE RAW MATERIAL STOCK
RAW MATERIAL CONSUMED = OPENING STOCK OF RAW MATERIAL + PURCHASE CLOSING STOCK
AVERAGE RAW MATERIAL STOCK = OPENING STOCK OF RAW MATERIAL + CLOSING STOCK OF RAW MATERIAL 2
2006
RAW MATERIAL CONSUMED =RS.12325.63 AVERAGE RAW MATERIAL STOCK =RS.892.85 (opening stock of raw material) +RS.1133.49 (closing stock of raw material) 2 = RS.1013.17 RAW MATERIAL TURNOVER RATIO = RAW MATERIAL CONSUMED AVERAGE RAW MATERIAL STOCK =12325.63 1013.17 =12.17 times
2007
RAW MATERIAL CONSUMED = 13271.08 AVERAGE RAW MATERIAL STOCK = 1133.49(opening stock of raw material) +1201.81(closing stock of raw material) 2 = 1167.65
RAW MATERIAL TURNOVER RATIO = RAW MATERIAL CONSUMED AVERAGE RAW MATERIAL STOCK =13271.08 1167.65 =11.37 times
2008
RAW MATERIAL CONSUMED = 13960.14
AVERAGE RAW MATERIAL STOCK = 1201.81(opening stock of raw material) +758.29(closing stock of raw material) 2 = 980.05 RAW MATERIAL TURNOVER RATIO = RAW MATERIAL CONSUMED AVERAGE RAW MATERIAL STOCK
= 13960.14 980.05 =14.24 times
Average raw material holding period Or Stock velocity

AVERAGE RAW MATERIAL HOLDING PERIOD = 365 DAYS OR 12 MONTHS STOCK OF RAW MATERIAL TURNOVER RATIO
2006
AVERAGE RAW MATERIAL HOLDING PERIOD = 365 days 12.17 = 30 days
2007
2008
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 RAW MATERIAL TURNOVER RATIO HAS DECREASED TO 12.17 TIMES WHICH SHOWS THAT THE STOCK IS BLOCKED AND NOT IMMEDIATELY SOLD AND INEFFICIENCY OF THE MANAGEMENT.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 RAW MATERIAL TURNOVER RATIO HAS DECREASED TO 11.37 TIMES WHICH SHOWS THAT THE STOCK IS BLOCKED AND NOT IMMEDIATELY SOLD AND INEFFICIENCY OF THE MANAGEMENT.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 RAW MATERIAL TURNOVER RATIO HAS INCREASED TO 14.24 TIMES WHICH IMPLIES
GOOD INVENTORY MANAGEMENT AND AN INDICATOR OF GOOD SALES POLICY.
DIVIDEND PAYOUT RATIO = DIVIDEND PER SHARE * 100 EARNING PER SHARE
DIVIDEND PER SHARE = TOTAL PROPOSED DIVIDEND TOTAL NO. OF EQUITY SHARES EARNING PER SHARE = TOTAL EARNING AVAILABLE TO EQUITY SHAREHOLDER TOTAL NO. OF EQUITY SHARES
2006
DIVIDEND PER SHARE = TOTAL PROPOSED DIVIDEND TOTAL NO. OF EQUITY SHARES = 309.78(in crs.) 4,13,04,00,545 = RS.7.50 EARNING PER SHARE = TOTAL EARNING AVAILABLE TO EQUITY SHAREHOLDERS TOTAL NO. OF EQUITY SHARES = 4012.97(in crs) 4,13,04,00,545 = RS.97.16 DIVIDEND PAYOUT RATIO = DIVIDEND PER SHARE*100 EARNING PER SHARE = 7.50*100 97.16
= 7.72 %
2007
DIVIDEND PER SHARE = TOTAL PROPOSED DIVIDEND TOTAL NO. OF EQUITY SHARES = 619.56(in crs.) 4,13,04,00,545 = RS.15 EARNING PER SHARE = TOTAL EARNING AVAILABLE TO EQUITY SHAREHOLDERS TOTAL NO. OF EQUITY SHARES = 6202.29(in crs) 4,13,04,00,545 = RS.150.16 DIVIDEND PAYOUT RATIO = DIVIDEND PER SHARE*100 EARNING PER SHARE = 15*100 150.16
= 10 %
2008
DIVIDEND PER SHARE = TOTAL PROPOSED DIVIDEND TOTAL NO. OF EQUITY SHARES = 743.47(in crs.) 4,13,04,00,545 = RS.18 EARNING PER SHARE = TOTAL EARNING AVAILABLE TO EQUITY SHAREHOLDERS TOTAL NO. OF EQUITY SHARES = 7536.78 (in crs) 4,13,04,00,545 = RS.182.47 DIVIDEND PAYOUT RATIO = DIVIDEND PER SHARE*100 EARNING PER SHARE =
18*100 182.47
= 10 %
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 DIVIDEND PAY OUT RATIO HAS INCREASED TO 7.72% WHICH SHOWS BETTER FUTURE PROSPECTS OF THE COMPANY.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 DIVIDEND PAY OUT RATIO HAS INCREASED TO 10% WHICH SHOWS BETTER FUTURE PROSPECTS OF THE COMPANY.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 DIVIDEND PAY OUT RATIO HAS REMAINED CONSTANT.
DEBTORS TURNOVER RATIO =
NET CREDIT SALES
AVERAGE ACCOUNTS RECIEVABLE
( OR) NET SALES AVERAGE ACCOUNTS RECIEVABLE
(OR)
NET SALES CLOSING BALANCE OF ACCOUNTS RECIEVABLE
(OR) NET CREDIT SALES AVERAGE DEBTORS
(OR)
NET SALES CLOSING DEBTORS
NET CREDIT SALES= NET SALES CASH SALES AVERAGE ACCOUNTS RECIEVABLE = OPENING BILLSRECIEVABLE +CLOSING BILLSRECIEVABLE + OPENING DEBTORS+CLOSING DEBTORS / 2 AVEREAGE DEBTORS =
OPENING DEBTORS + CLOSING DEBTORS 2
2006
NET SALES = SALES EXCISE DUTY = Rs.32279.75 Rs.4419.41 = Rs.27860.34 AVEREAGE DEBTORS = OPENING DEBTORS + CLOSING DEBTORS 2 = 1908.45+1881.73 2 = 1895.09
DEBTORS TURNOVER RATIO = NET SALES AVEREAGE DEBTORS = 27860.34 1895.09 14.70 TIMES OR
15 TIMES
2007
NET SALES = SALES - EXCISE DUTY = Rs.39188.66 Rs.5265.54 = Rs.33923.12 AVEREAGE DEBTORS = OPENING DEBTORS + CLOSING DEBTORS 2 = 1881.73+2314.75 2 = 2098.24
DEBTORS TURNOVER RATIO = NET SALES CLOSING DEBTORS = 33923.12 2098.24 16.17 TIMES OR
16 TIMES
2008
NET SALES = SALES - EXCISE DUTY = Rs.45555.34 Rs.6046.89 = Rs.39508.45 AVEREAGE DEBTORS = OPENING DEBTORS + CLOSING DEBTORS 2 = 2314.75 + 3048.12 2 = 2681.44 DEBTORS TURNOVER RATIO = NET SALES AVERAGE DEBTORS = 39508.45 2681.44 14.73 TIMES OR = 15 TIMES
AVERAGE COLLECTION PERIOD OR DEBTORS VELOCITY =

365 DAYS DEBTORS TURNOVER RATIO (OR) 12MONTHS DEBTORS TURNOVER RATIO
DEBTORS TURNOVER RATIO = NET SALES AVERAGE DEBTORS
2006
DEBTORS TURNOVER RATIO = NET SALES AVEREAGE DEBTORS = 27860.34 1895.09 14.70 TIMES OR 15 TIMES

365 DAYS DEBTORS TURNOVER RATIO = 365 15 24 DAYS
2007
DEBTORS TURNOVER RATIO = NET SALES CLOSING DEBTORS = 33923.12 2098.24 16.17 TIMES OR 16 TIMES

2008
DEBTORS TURNOVER RATIO = NET SALES AVERAGE DEBTORS = 39508.45 2681.44 14.73 TIMES OR = 15 TIMES

INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 DEBTORS TURNOVER RATIO HAS INCREASED TO 15 TIMES WHICH INDICATES THAT DEBTS ARE COLLECTED QUICKLY AND ALSO REFLECTS THE EFFECTIVENESS OF THE CREDIT SALES POLICY OF THE MANAGEMENT.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 DEBTORS TURNOVER RATIO HAS INCREASED TO 16 TIMES WHICH INDICATES THAT DEBTS ARE COLLECTED QUICKLY AND ALSO REFLECTS THE EFFECTIVENESS OF THE CREDIT SALES POLICY OF THE MANAGEMENT.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 DEBTORS TURNOVER RATIO HAS DECREASED TO 15 TIMES WHICH INDICATES THAT PAYMENT BY DEBTORS HAS DELAYED.
CREDITORS TURNOVER RATIO = NET CREDIT PURCHASE

AVERAGE ACCOUNTS PAYABLE
( OR)
NET PURCHASE AVERAGE ACCOUNTS PAYABLE
(OR)
NET PURCHASE CLOSING BALANCE OF ACCOUNTS PAYABLE
(OR) NET CREDIT PURCHASE AVERAGE CREDITORS
(OR)
NET PURCHASE CLOSING CREDITORS
NET CREDIT PURCHASE= NET PURCHASE CASH PURCHASE AVERAGE ACCOUNTS PAYABLE = OPENING BILLSPAYABLE +CLOSING BILLSPAYABLE + OPENING CREDITORS+CLOSING CREDITORS / 2 AVEREAGE CREDITORS =
OPENING CREDITORS + CLOSING CREDITORS 2
2006
NET PURCHASES = Rs.21320.03
AVEREAGE CREDITORS = OPENING CREDITORS + CLOSING CREDITORS 2 = 2207.50+2427.36 2 = 2317.43
CREDITORS TURNOVER RATIO = NET PURCHASE AVERAGE CREDITORS
21320.03 2317.43 9.2 TIMES
OR = 9 TIMES
2007
AVEREAGE CREDITORS = OPENING CREDITORS + CLOSING CREDITORS 2 2427.36+ 2545.07 2 = 2486.21 = CREDITORS TURNOVER RATIO = NET PURCHASE AVEREAGE CREDITORS
22766.58 2486.21
9.28 TIMES
OR = 9 TIMES
2008
AVEREAGE CREDITORS = OPENING CREDITORS + CLOSING CREDITORS 2 =
2545.07+ 3048.12
2
= Rs.2796.6
CREDITORS TURNOVER RATIO = NET PURCHASE AVERAGE CREDITORS = 26254.18 2796.6
9.38 TIMES
OR = 9 TIMES
AVERAGE PAYMENT PERIOD OR CREDITORS VELOCITY =

365 DAYS CREDITORS TURNOVER RATIO (OR) 12 MONTHS CREDITORS TURNOVER RATIO
CREDITORS TURNOVER RATIO = PURCHASE CREDITORS
NET AVERAGE
2006
CREDITORS TURNOVER RATIO = NET PURCHASE AVERAGE CREDITORS
21320.03
2317.43
9.2 TIMES OR
9 TIMES
AVERAGE COLLECTION PERIOD OR CREDITORS VELOCITY =

365 DAYS CREDITORS TURNOVER RATIO
365 9 41 DAYS
2007
CREDITORS TURNOVER RATIO = NET PURCHASE AVEREAGE CREDITORS
23075.18 2486.21
9.28 TIMES OR
9 TIMES

365 9 41 DAYS
2008
CREDITORS TURNOVER RATIO = NET PURCHASE AVERAGE CREDITORS = 26254.18 2796.6
9.38 TIMES OR
9 TIMES

365 9 41 DAYS
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 CREDITORSTURNOVER RATIO HAS REMAINED CONSTANT AT 9 TIMES WHICH REFLECTS THAT THE PATTERN OF PAYMENT TO THE SUPPLIERS IS CONSTANT.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 CREDITORSTURNOVER RATIO HAS REMAINED CONSTANT AT 9 TIMES WHICH REFLECTS THAT THE PATTERN OF PAYMENT TO THE SUPPLIERS IS CONSTANT.
2007
2008 CREDITORSTURNOVER RATIO HAS REMAINED CONSTANT AT 9 TIMES WHICH REFLECTS THAT THE PATTERN OF PAYMENT TO THE SUPPLIERS IS CONSTANT.
WORKING CAPITAL TURNOVER RATIO =

COST OF GOODS SOLD NET WORKING CAPITAL
CURRENT SUNDRY
ASSETS = INVENTORIES + DEBTORS +
CASH AND BANK
BALANCES + OTHER CURRENT ASSETS.
CURRENT LIABILITIES = SUNDRY CREDITORS+ BILLS BILLS PAYABLE + OTHER CURRENT LIABILITIES.
NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES
2006
COGS = Rs.4220.69 (opening stock) + (COST OF GOOGS SOLD) Rs.21320.03 (purchase) Rs.6210.06 (closing stock) + Rs.3247.36 (manufacturing expenses) = Rs.22578.02 CURRENT AEETS = Rs.6210.06 (inventories) + Rs.1881.73 (Sundry debtors) + Rs.6172.64 (Cash & bank
Balance) + Rs.85.48 (Other Current assets) = Rs.14349.91 CURRENT LIABILITIES = Rs.5191.70 NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES = Rs.14349.91 Rs.5191.70 = Rs.9158.21 WORKING CAPITAL TURNOVER RATIO = COST OF GOODS SOLD NET WORKING CAPITAL = 22578.02 9158.21 = 2.46 TIMES
2007
Balance) + Rs.152.56 (Other Current assets) = Rs.18728.61 CURRENT LIABILITIES = Rs.5397.77 NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES = Rs.18728.61 Rs.5397.77 = Rs.13330.84 WORKING CAPITAL TURNOVER RATIO = COST OF GOODS SOLD NET WORKING CAPITAL = 27210.76 13330.84 = 2 TIMES
2008
Balance) + Rs.273.08 (Other Current assets) = Rs.23937.87 CURRENT LIABILITIES = Rs.64002.92 NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES = Rs.23937.87 Rs.6400.92 = Rs.17536.95 WORKING CAPITAL TURNOVER RATIO = COST OF GOODS SOLD NET WORKING CAPITAL = 31428.15 17536.95 = 2 TIMES
INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 WORKING CAPITAL TURNOVER RATIO HAS INCREASED TO 2.46 TIMES WHICH SHOWS OVER TRADING AND REFLECTS WEAKNESS OF THE ENTERPRISE.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 WORKING CAPITAL TURNOVER RATIO HAS DECREASED TO 2 TIMES WHICH SHOWS UNDER TRADING AND REFLECTS WEAKNESS OF THE ENTERPRISE.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 WORKING CAPITAL TURNOVER RATIO HAS REMAINED CONSTANT AT 2 TIMES.
FIXED ASSETS TURNOVER RATIO =

COST OF GOODS SOLD NET FIXED ASSETS
2006
NET FIXED ASSETS = Rs.12162.14

COST OF GOODS SOLD NET FIXED ASSETS = 22578.02 12162.14 1.85 TIMES
2007
COGS = Rs.6210.06 (opening stock) + (COST OF GOOGS SOLD) Rs.22766.58 (purchase) Rs.6651.47 (closing stock) +
Rs.4885.59 (manufacturing expenses) = Rs.27210.76

COST OF GOODS SOLD NET FIXED ASSETS = 27210.76 12796.23
2 TIMES
2008
COGS = Rs.6651.47 (opening stock) +
(COST OF GOOGS SOLD) Rs.26254.18 (purchase) Rs.6857.23 (closing stock) + Rs.5379.73 (manufacturing expenses) = Rs.31428.15

COST OF GOODS SOLD NET FIXED ASSETS = 31428.15 13960.86
2.25 TIMES
INTERPRETATION
2006
2006 FIXED ASSETS TURNOVER RATIO HAS INCREASED TO 1.85 TIMES WHICH INDICATES BETTER PERFORMANCE AND INTENSIVE UTILISATION OF FIXED ASSETS.
2007
IN COMPARISION TO 2006 PERFORMANCE 2007 FIXED ASSETS TURNOVER RATIO HAS INCREASED TO 2 TIMES WHICH INDICATES BETTER PERFORMANCE AND INTENSIVE UTILISATION OF FIXED ASSETS.
2008
IN COMPARISION TO 2007 PERFORMANCE 2008 FIXED ASSETS TURNOVER RATIO HAS INCREASED TO 2.25 TIMES WHICH INDICATES BETTER PERFORMANCE AND INTENSIVE UTILISATION OF FIXED ASSETS.
CAPITAL TURNOVER RATIO =
COST OF GOODS SOLD TOTAL CAPITAL EMPLOYED
COGS (COST OF GOODS SOLD) = OPENING STOCK + PURCHASES CLOSING STOCK + ALL OTHER MANUFACTURING RELATED EXPENSES. SHAREHOLDER FUNDS/ = SHARE CAPITAL + PROPRIETORY FUND RESERVES AND SURPLUS
TOTAL LONG TERM DEBTS= SECURED LOANS + UNSECURED LOANS TOTAL CAPITAL EMPLOYED = SHAREHOLDERS FUND
+ TOTAL LONG TERM DEBTS
2006
COGS = Rs.4220.69 (opening stock) + (COST OF GOOGS SOLD) Rs.21320.03 (purchase) Rs.6210.06 (closing stock) + Rs.3247.36 (manufacturing expenses) = Rs.22578.02 SHAREHOLDER FUNDS = Rs.4130.40 (share capital) + Rs.8471.01 (reserves And surplus) = Rs.12601.41 LONG-TERM DEBT = Rs.1122.16 (secured loan) + Rs.3175.46 (unsecured loan) = Rs.4297.62

COST OF GOODS SOLD TOTAL CAPITAL EMPLOYED = = 22578.02 16899.03 1.33 TIMES
2007
COGS = Rs.6210.06 (opening stock) + (COST OF GOOGS SOLD) Rs.22766.58 (purchase) Rs.6651.47 (closing stock) + Rs.4885.59 (manufacturing expenses) = Rs.27210.76 SHAREHOLDERS FUND = Rs.4130.40 (share capital) + Rs.13182.75 (reserves And surplus) = Rs.17313.15 LONG TERM DEBTS = Rs.1556.39 (secured loans) + Rs.2624.13 (unsecured loans) = Rs.4180.52

2008
COGS = Rs.6651.47 (opening stock) + (COST OF GOOGS SOLD) Rs.26254.18 (purchase) Rs.6857.23 (closing stock) + Rs.5379.73 (manufacturing expenses) = Rs.31428.15 SHAREHOLDERS FUND = Rs.4130.40 (share capital) + Rs.18933.17 (reserves And surplus) = Rs.23063.57 LONG TERM DEBTS = Rs.925.31 (secured loans) + Rs.2119.93 (unsecured loans) = Rs.3045.24

INTERPRETATION
2006
IN COMPARISION TO 2005 PERFORMANCE 2006 CAPITAL TURNOVER RATIO HAS DECREASED TO 1.33 TIMES WHICH SHOWS LOWER PROFIT AND REFLECTS INEFFICIENT UTILISATION RESULTING IN LOWER LIQUIDITY AND LOWER PROFITABILITY IN THE BUSINESS.
2007
2008

Ratios Analysis

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ratios Analysis

Uploaded by

Copyright:

Available Formats

CURRENT RATIO =

ASSETS = INVENTORIES + DEBTORS + BALANCES + ASSETS.

CASH AND BANK OTHER CURRENT

CURRENT LIABILITIES = Rs.5191.70

CURRENT ASSETS CURRENT LIABILITIES

14349.91 5191.70 2.76: 1

CURRENT LIABILITIES = Rs.5397.77

CURRENT ASSETS CURRENT LIABILITIES

18728.61 5397.77 3.47: 1

CURRENT LIABILITIES = Rs.64002.92

CURRENT ASSETS CURRENT LIABILITIES

23937.87 6400.92 3.73: 1

LIQUID ASSETS LIQUID LIABILITIES

LIQUID ASSETS / = STOCK QUICK ASSETS EXPENSES.

CURRENT ASSETS PREPAID

LIQUID LIABILITIES / = CURRENT LIABILITY QUICK LIABILITIES BANK OVERDRAFT

LIQUID LIABILITIES = Rs.5191.70

LIQUID ASSETS LIQUID LIABILITIES

LIQUID LIABILITIES = Rs.5397.77

LIQUID ASSETS LIQUID LIABILITIES

LIQUID ASSETS = Rs.23937.23 (current assets) Rs.6857.23 (inventories) = Rs.17080.64

LIQUID LIABILITIES = Rs.6400.92

LIQUID ASSETS LIQUID LIABILITIES

IDEAL RATIO = 1:1

SHAREHOLDER FUNDS TOTAL ASSETS

PROPRIETORY RATIO = SHAREHOLDER FUNDS TOTAL ASSETS

= 12601.41 28300.79 = 0.45: 1

PROPRIETORY RATIO = SHAREHOLDER FUNDS TOTAL ASSETS

= 17313.15 33817.79 = 0.51: 1

PROPRIETORY RATIO = SHAREHOLDER FUNDS TOTAL ASSETS

FIXED ASSETS TO PROPRIETORY FUND RATIO = FIXED ASSETS PROPRIETORY FUND

PROPRIETORY FUND / SHAREHOLDERS FUND = SHARE CAPITAL + RESERVES AND SURPLUS

FIXED ASSETS TO PROPRIETORY FUND RATIO = FIXED ASSETS PROPRIETORY FUNDS

FIXED ASSETS TO PROPRIETORY FUND RATIO = FIXED ASSETS PROPRIETORY FUNDS

FIXED ASSETS TO PROPRIETORY FUND RATIO = FIXED ASSETS PROPRIETORY FUNDS

CAPITAL GEARING RATIO =

FIXED INTEREST/DIVIDEND BEARING RATIO EQUITY SHAREHOLDERS FUNDS

FIXED INTEREST/DIVIDEND BEARING RATIO EQUITY SHAREHOLDERS FUNDS

= 4180.52 17313.15 = 0.24: 1

FIXED INTEREST/DIVIDEND BEARING RATIO EQUITY SHAREHOLDERS FUNDS

= 3045.24 23063.57 = 0.13: 1

DEBT EQUITY RATIO = LONG-TERM DEBT SHAREHOLDERS FUND

LONG-TERM DEBT = SECURED LOAN + UNSECURED LOAN

SHAREHOLDER S FUND = EQUITY SHARECAPITAL + PREFERENCE SHARECAPITAL + RESERVES AND SURPLUS

DEBT EQUITY RATIO = LONG-TERM DEBT SHAREHOLDERS FUND

= 4180.52 17313.15 = 0.24: 1

SHAREHOLDERS FUND= 4130.40(Equity sharecapital) +18933.17(Reserves & surplus) = 23063.57

DEBT EQUITY RATIO = LONG-TERM DEBT SHAREHOLDERS FUND = 3045.24 23063.57

LONG-TERM FUND TO FIXED ASSETS RATIO = LONG-TERM FUNDS FIXED ASSETS

LONG-TERM FUNDS = SHAREHOLDERS FUND + LONGTERM DEBTS

LONG-TERM FUNDS = Rs.12601.41 (shareholders Fund) +Rs.4297.62. (longterm Debt) = Rs.16899.03

FIXED ASSETS = Rs.12162.14

LONG-TERM FUNDS = 17313.15(shareholders fund) +4180.52(long-term debt) = 21493.67

FIXED ASSETS = 12796.23

LONG-TERM FUNDS = Rs.23063.57 (shareholders Fund) +Rs.3045.24 (long-term Debt) = Rs.26108.81

FIXED ASSETS = Rs.13960.86

GROSS PROFIT RATIO =

GROSS PROFIT NET SALES

NET SALES COGS

NET SALES = SALES EXCISE DUTY

TOTAL OPERATING NET SALES

NET SALES = SALES EXCISE DUTY = Rs.32279.75 Rs.4419.41 = Rs.27860.34

TOTAL OPERATING EXPENSES*100 NET SALES

NET SALES = SALES EXCISE DUTY = Rs.39188.66 Rs.5265.54 = Rs.33923.12