CONTENTS

S.No. Title ACKNOWLDGEMENTS List of Tables Chapter . !"tro#$%tio" . Theoreti%al ba%'gro$"# . . )se a"# sig"ifi%a"%e of *atio A"al+sis . ., Li-itatio"s . .3 Classifi%atio"s of ratios ., *esear%h Metho#olog+ .,. Nee# for the st$#+ .,., S%ope of the st$#+ .,.3 Ob.e%ti/es of the st$#+ .,.4 Data so$r%es .,.& Li-itatio"s Chapter ,. Profiles ,. Co-pa"+ profile Chapter 3. *e/ie1 of Literat$re Chapter 4. Data A"al+sis Chapter &. 3i"#i"gs Chapter 0. S$ggestio"s Chapter 4 5ibliograph+ 3 33 33 33 33 34 34 3& 30 && &2 (0 (( 26 Page No. 3 4 & ( (

LIST OF TABLES
Sl. No Table No Title of the tables Page No

4. , 3 4 & 0 4 ( 2 6 , 3 4 & 0 4 ( 2 ,6 , ,, 4., 4.3 4.4 4.& 4.0 4.4 4.( 4.2 4. 6 4. 4. , 4. 3 4. 4 4. & 4. 0 4. 4 4. ( 4. 2 4.,6 4., 4.,,

C$rre"t *atio 7$i%' *atio Cash *atio Net1or'i"g %apital *atio Debt *atio Debt e8$it+ *atio Capital E8$it+ *atio !"terest %o/erage ratio !"/e"tor+ t$r"o/er *atio !"/e"tor+ %o"/ersio" Perio# Debtor t$r"o/er ratio Debt Colle%tio" of perio# Net Assets T$r"o/er *atio 3i9e# assets t$r"o/er ratio" C$rre"t assets t$r"o/er ratio Total assets t$r"o/er ratio Wor'i"g Capital T$r"o/er *atio Net profit ratio Net profit 5ase# o" No PAT *et$r" o" i"/est-e"t ratio *et$r" of e8$it+ ratio Ear"i"g per share ratio

06 0 03 04 0& 00 04 02 46 4, 43 44 4& 40 44 4( 42 (6 (, (3 (4 (&

(i)

1.

Introduction

*atio a"al+sis is a po1erf$l tool of fi"a"%ial a"al+sis. A ratio is #efi"e# as :the i"#i%ate# 8$otie"t of t1o -athe-ati%al e9pressio"s; a"# :the relatio"ship bet1ee" t1o or -ore thi"gs;. !" fi"a"%ial a"al+sis< a ratio is $se# as a be"%h-ar' for e/al$atio" the fi"a"%ial positio" a"# perfor-a"%e of a fir-. The absol$te a%%o$"ti"g fig$res reporte# i" the fi"a"%ial state-e"ts #o "ot pro/i#e a -ea"i"gf$l $"#ersta"#i"g of the perfor-a"%e a"# fi"a"%ial positio" of a fir-. A" a%%o$"ti"g fig$re %o"/e+s -ea"i"g 1he" it is relate# to so-e other rele/a"t i"for-atio". 3or e9a-ple< a" *s.& %ore "et profit -a+ loo' i-pressi/e< b$t the fir-=s perfor-a"%e %a" be sai# to be goo# or ba# o"l+ 1he" the "et profit fig$re is relate# to the fir-=s !"/est-e"t. The relatio"ship bet1ee" t1o a%%o$"ti"g fig$res e9presse# -athe-ati%all+< is '"o1" as a fi"a"%ial ratio >or si-pl+ as a ratio?. *atios help to s$--ari@e large 8$a"tities of fi"a"%ial #ata a"# to -a'e qualitative judgment abo$t the fir-=s fi"a"%ial perfor-a"%e. 3or e9a-ple< %o"si#er %$rre"t ratio. !t is %al%$late# b+ #i/i#i"g %$rre"t assets b+ %$rre"t liabilitiesA the ratio i"#i%ates a relatio"shipB a 8$a"tifie# relatio"ship bet1ee" %$rre"t assets a"# %$rre"t liabilities. This relatio"ship is a" i"#e9 or +ar#sti%'< 1hi%h per-its a 8$a"titati/e .$#g-e"t to be for-e# abo$t the fir-=s li8$i#it+ a"# /i%e /ersa. The poi"t to "ote is that a ratio refle%ti"g a 8$a"titati/e relatio"ship helps to for- a 8$alitati/e .$#g-e"t. S$%h is the "at$re of all fi"a"%ial ratios.

Standards of comparison:
The ratio" a"al+sis i"/ol/es %o-pariso" for a $sef$l i"terpretatio" of the fi"a"%ial state-e"ts. A si"gle ratio i" itself #oes "ot i"#i%ate fa/orable or $"fa/orable %o"#itio". !t sho$l# be %o-pare# 1ith so-e sta"#ar#. Sta"#ar#s of %o-pariso" -a+ %o"sist ofC Past ratios< i.e. ratios %al%$late# for- the past fi"a"%ial state-e"ts of the sa-e fir-A Competitors ratios< i.e.< of so-e sele%te# fir-s< espe%iall+ the -ost progressi/e a"# s$%%essf$l %o-petitor< at the sa-e pi"t i" ti-eA Industry ratios< i.e. ratios of the i"#$str+ to 1hi%h the fir- belo"gsA a"# Protected ratios, i.e.< #e/elope# $si"g the prote%te# or proforma< fi"a"%ial state-e"ts of the sa-e fir-. !" this pro.e%t %al%$lati"g the past fi"a"%ial state-e"ts of the sa-e fir- #oes ratio a"al+sis.

1.1 Theoretical background:

1.1.1 se and significance of ratio analysis:!
The ratio is o"e of the -ost po1erf$l tools of fi"a"%ial a"al+sis. !t is $se# as a #e/i%e to a"al+@e a"# i"terpret the fi"a"%ial health of e"terprise. *atio a"al+sis sta"#s for the pro%ess of #eter-i"i"g a"# prese"ti"g the relatio"ship of ite-s a"# gro$ps of ite-s i" the fi"a"%ial state-e"ts. !t is a" i-porta"t te%h"i8$e of the fi"a"%ial a"al+sis. !t is the 1a+ b+ 1hi%h fi"a"%ial stabilit+ a"# health of the %o"%er" %a" be .$#ge#. Th$s ratios ha/e 1i#e appli%atio"s a"# are of i--e"se $se to#a+. The follo1i"g are the -ai" poi"ts of i-porta"%e of ratio a"al+sisC

a" #anagerial uses of ratio analysis:!

1. $elps in decision making:! 3i"a"%ial state-e"ts are prepare# pri-aril+ for #e%isio"B-a'i"g. *atio a"al+sis helps i" -a'i"g #e%isio" fro- the i"for-atio" pro/i#e# i" these fi"a"%ial State-e"ts. %. $elps in financial forecasting and planning:! *atio a"al+sis is of -$%h help i" fi"a"%ial fore%asti"g a"# pla""i"g. Pla""i"g is loo'i"g ahea# a"# the ratios %al%$late# for a "$-ber of +ears a 1or' as a g$i#e for the f$t$re. Th$s< ratio a"al+sis helps i" fore%asti"g a"# pla""i"g. &. $elps in communicating:! The fi"a"%ial stre"gth a"# 1ea'"ess of a fir- are %o--$"i%ate# i" a -ore eas+ a"# $"#ersta"#able -a""er b+ the $se of ratios. Th$s< ratios help i" %o--$"i%atio" a"# e"ha"%e the /al$e of the fi"a"%ial state-e"ts.

'. $elps in co!ordination:! *atios e/e" help i" %oBor#i"atio"< 1hi%h is of at -ost i-porta"%e i" effe%ti/e b$si"ess -a"age-e"t. 5etter %o--$"i%atio" of effi%ie"%+ a"# 1ea'"ess of a" e"terprise res$lt i" better %oBor#i"atio" i" the e"terprise (. $elps in control:! *atio a"al+sis e/e" helps i" -a'i"g effe%ti/e %o"trol of b$si"ess.The 1ea'"esses are other1ise< if a"+< %o-e to the '"o1le#ge of the -a"agerial< 1hi%h helps< i" effe%ti/e %o"trol of the b$si"ess.

b" tility to shareholders)in*estors:!

A" i"/estor i" the %o-pa"+ 1ill li'e to assess the fi"a"%ial positio" of the %o"%er" 1here he is goi"g to i"/est. Dis first i"terest 1ill be the se%$rit+ of his i"/est-e"t a"# the" a ret$r" i" for- of #i/i#e"# or i"terest. *atio a"al+sis 1ill be $sef$l to the i"/estor i" -a'i"g $p his -i"# 1hether prese"t fi"a"%ial positio" of the %o"%er" 1arra"ts f$rther i"/est-e"t or "ot.

C" tility to creditors: !

The %re#itors or s$ppliers e9te"t shortBter- %re#it to the %o"%er". The+ are i"/este# to '"o1 1hether fi"a"%ial positio" of the %o"%er" 1arra"ts their pa+-e"ts at a spe%ifie# ti-e or "ot.

d" tility to employees:!

The e-plo+ees are also i"tereste# i" the fi"a"%ial positio" of the %o"%er" espe%iall+ profitabilit+. Their 1age i"%reases a"# a-o$"t of fri"ge be"efits are relate# to the /ol$-e of profits ear"e# b+ the %o"%er".

e" tility to go*ernment:!

Go/er"-e"t is i"tereste# to '"o1 o/erall stre"gth of the i"#$str+. Eario$s fi"a"%ial state-e"t p$blishe# b+ i"#$strial $"its are $se# to %al%$late ratios for #eter-i"i"g short ter-< lo"gBter- a"# o/erall fi"a"%ial positio" of the %o"%er"s.

f" Ta+ audit re,uirements:!

Se%44A5 1as i"serte# i" the i"%o-e ta9 a%t b+ fi"a"%ial a%tA 2(4.Cal$se 3, of the i"%o-e ta9 a%t re8$ires that the follo1i"g a%%o$"ti"g ratios sho$l# be gi/e"C . Gross profitFt$r"o/er. ,. Net profitFt$r"o/er. 3. Sto%' i" tra#eFt$r"o/er. 4. Material %o"s$-e#Ffi"ishe# goo#s pro#$%e#.

3$rther< it is a#/isable to %o-pare the a%%o$"ti"g ratios for the +ear $"#er %o"si#eratio" 1ith the a%%o$"ti"g ratios for earlier t1o +ears so that the a$#itor %a" -a'e "e%essar+ e"8$iries< if there is a"+ -a.or /ariatio" i" the a%%o$"ti"g ratios.

1.1.% -imitations:

*atio a"al+sis is /er+ i-porta"t i" re/eali"g the fi"a"%ial positio" a"# so$"#"ess of the b$si"ess. 5$t< i"spite of its a#/a"tages< it has so-e li-itatio"s 1hi%h restri%t its $se. These li-itatio"s sho$l# be 'ept i" -i"# 1hile -a'i"g $se of ratio a"al+sis for i"terpreti"g the fi"a"%ial the fi"a"%ial state-e"ts. The follo1i"g are the -ai" li-itatio"s of ratio a"al+sisC 1. .alse results:! *atios are base# $po" the fi"a"%ial state-e"t. !" %ase fi"a"%ial state-e"t are i" %orre%t or the #ata of o" 1hi%h ratios are base# is i" %orre%t< ratios %al%$late# 1ill all so false a"# #efe%ti/e. The a%%o$"ti"g s+ste- it self s$ffers fro- -a"+ i"here"t 1ea'"esses the ratios base# $po" it %a""ot be sai# to be al1a+s reliable. %. -imited comparability:! The ratio of the o"e fir- %a""ot al1a+s be %o-pare 1ith the perfor-a"%e of other fir-< if $"ifor- a%%o$"ti"g poli%ies are "ot a#opte# b+ the-. The #iffere"%e i" the -etho#s of %al%$latio" of sto%' or the -etho#s $se# to re%or# the #epre%atio" o" assets 1ill "ot pro/i#e i#e"ti%al #ata< so the+ %a""ot be %o-pare#. &. /bsence of standard uni*ersally accepted terminology:! Differe"t -ea"i"gs are gi/e" to a parti%$lar ter-< egg. So-e fir-s ta'e profit before i"terest a"# ta9A others -a+ ta'e profit after i"terest a"# ta9. A ba"' o/er#raft is ta'e" as %$rre"t liabilit+ b$t so-e fir-s -a+ ta'e it as "o"B %$rre"t liabilit+. The ratios %a" be %o-parable o"l+ 1he" all the fir-s a#apt $"ifor- ter-i"olog+.

'. Price le*el changes affect ratios:! The %o-parabilit+ of ratios s$ffers< if the pri%es of the %o--o#ities i" t1o #iffere"t +ears are "ot the sa-e. Cha"ge i" pri%e effe%t the %ost of

pro#$%tio"< sale a"# also the /al$e of assets. !t -ea"s that the ratio 1ill be -ea"i"gf$l for %o-pariso"< if the pri%es #o "ot %ha"ge. (. Ignoring ,ualitati*e factors:! *atio a"al+sis is the 8$a"titati/e -eas$re-e"t of the perfor-a"%e of the b$si"ess. !t ig"ores 8$alitati/e aspe%t of the fir-< ho1 so e/er i-porta"t it -a+ be. !t shoes that ratio is o"l+ a o"e si#e# approa%h to -eas$re the effi%ie"%+ of the b$si"ess. 0. Personal bias:! *atios are o"l+ -ea"s of fi"a"%ial a"al+sis a"# a" e"# i" it self. The ratio has to be i"terprete# a"# #iffere"t people -a+ i"terpret the sa-e ratio i" #iffere"t 1a+s. 1. 2indo3 dressingCB 3i"a"%ial state-e"ts %a" easil+ be 1i"#o1 #resse# to prese"t a better pi%t$re of its fi"a"%ial a"# profitabilit+ positio" to o$tsi#ers. De"%e< o"e has to be /er+ %aref$ll+ i" -a'i"g a #e%isio" fro- ratios %al%$late# fro- s$%h fi"a"%ial state-e"ts. 4. /bsolute figures distorti*e:! *atios #e/oi# of absol$te fig$res -a+ pro/e #istorti/e< as ratio a"al+sis is pri-aril+ a 8$a"titati/e a"al+sis a"# "ot a 8$alitati/e a"al+sis.

1.1.& Classification of ratios:

Se/eral ratios< %al%$late# fro- the a%%o$"ti"g #ata %a" be gro$pe# i"to /ario$s %lasses a%%or#i"g to fi"a"%ial a%ti/it+ or f$"%tio" to be e/al$ate#.

Ma"ge-e"t is i"tereste# i" e/al$ati"g e/er+ aspe%t of the fir-=s perfor-a"%e. The+ ha/e to prote%t the i"terests of all parties a"# see that the fir- gro1s profitabl+.!" /ie1 of thee re8ire-e"t of the /ario$s $sers of ratios< ratios are %lassifie# i"to follo1i"g fo$r i-porta"t %ategoriesC -i,uidity ratios -e*erage ratios Profitability ratios /cti*ity ratios B shortBter- fi"a"%ial stre"gth B lo"gBter- fi"a"%ial stre"gth B lo"g ter- ear"i"g po1er B ter- of i"/est-e"t $tili@atio"

-i,uidity ratios -eas$re the fir-=s abilit+ to -eet %$rre"t obligatio"sA -e*erage ratios sho1 the proportio"s of #ebt a"# e8$it+ i" fi"a"%i"g the fir-=s assetsA /cti*ity ratios refle%t the fir-=s effi%ie"%+ i" $tili@i"g its assetsA a"# Profitability ratios -eas$re o/erall perfor-a"%e a"# effe%ti/e"ess of the fir-

-I5 I6IT7 8/TI9S:

!t is e9tre-el+ esse"tial for a fir- to be able to -eet the obligatio"s as the+ be%o-e #$e. -i,uidity ratios -eas$re the abilit+ of the fir- to -eet its %$rre"t obligatio"s >liabilities?. The liquidity ratios reflect the short-term

financial strength and solvency of a firm. !" fa%t< a"al+sis of li8$i#it+ "ee#s the

preparatio" of %ash b$#gets a"# %ash a"# f$"#s flo1 state-e"tsA b$t li8$i#it+ ratios< b+ establishi"g a relatio"ship bet1ee" %ash a"# other %$rre"t assets to %$rre"t obligatio"s< pro/i#e a 8$i%' -eas$re of li8$i#it+. A firsho$l# e"s$re that it #oes "ot s$ffer fro- la%' of li8$i#it+< a"# also that it #oes "ot ha/e e9%ess li8$i#it+. The fail$re of a %o-pa"+ to -eet its obligatio"s #$e to la%' of s$ffi%ie"t li8$i#it+< 1ill res$lt i" a poor %re#it 1orthi"ess< loss of %re#it 1orthi"ess< loss of %re#itors= %o"fi#e"%e< or e/e" i" legal ta"gles res$lti"g i" the %los$re of the %o-pa"+. A /er+ high #egree of li8$i#it+ is also ba#A i#le assets ear" "othi"g. The fir-=s f$"#s 1ill be $""e%essaril+ tie# $p i" %$rre"t assets. Therefore< it is "e%essar+ to stri'e a proper bala"%e bet1ee" high li8$i#it+ a"# la%' of li8$i#it+. The -ost %o--o" ratios 1hi%h i"#i%ate the e9te"t of li8$i#it+ are la%' of it< areC :i" Current ratio :ii" 5uick ratio. :iii"Cash ratio and :i*";et3orking capital ratio.

1. Current 8atioC
C$rre"t ratio is %al%$late# b+ #i/i#i"g %$rre"t assets b+ %$rre"t liabilities. C$rre"t assets C$rre"t *atioG

C$rre"t Liabilities C$rre"t assets i"%l$#e %ash a"# other assets that %a" be %o"/erte# i"to %ash 1ithi" i" a +ear< s$%h as -ar'etable se%$rities< #ebtors a"# i"/e"tories. Prepai# e9pe"ses are also i"%l$#e# i" the %$rre"t assets as the+ represe"t the pa+-e"ts that 1ill "ot be -a#e b+ the fir- i" the f$t$re. All obligatio"s -at$ri"g 1ithi" a +ear are i"%l$#e# i" the %$rre"t liabilities. C$rre"t liabilities i"%l$#e %re#itors< bills pa+able< a%%r$e# e9pe"ses< shortBter- ba"' loa"< i"%o-e ta9< liabilit+ a"# lo"gBter- #ebt -at$ri"g i" the %$rre"t +ear. The %$rre"t ratio is a -eas$re of fir-=s short!term sol*ency. !t i"#i%ates the a/ailabilit+ of %$rre"t assets i" r$pees for e/er+ o"e r$pee of %$rre"t liabilit+. A ratio of greater tha" o"e -ea"s that the fir- has -ore %$rre"t assets tha" %$rre"t %lai-s agai"st the- C$rre"t liabilities.

%. 5uick 8atio:
7$i%' ratio also %alle# /cid!test ratio< establishes a relatio"ship bet1ee" 8$i%'< or li8$i#< assets a"# %$rre"t liabilities. A" asset is a li8$i# if it %a" be %o"/erte# i"to %ash i--e#iatel+ or reaso"abl+ soo" 1itho$t a loss of /al$e. Cash is the -ost li8$i# asset. Other assets that are %o"si#ere# to be relati/el+ li8$i# a"# i"%l$#e# i" 8$i%' assets are #ebtors a"# bills re%ei/ables a"# -ar'etable se%$rities >te-porar+ 8$ote# i"/est-e"ts?. %o"si#ere# to be less li8$i#. !"/e"tories are !"/e"tories "or-all+ re8$ire so-e ti-e for

reali@i"g i"to %ashA their /al$e also has a te"#e"%+ to fl$%t$ate. The 8$i%' ratio is fo$"# o$t b+ #i/i#i"g 8$i%' assets b+ %$rre"t liabilities.

>7$i%' AssetsGC$rre"t AssetsG!"/e"tories? 7$i%' Assets 7$i%' *atioG C$rre"t Liabilities

&. Cash 8atio:

Si"%e %ash is the -ost li8$i# asset< it -a+ be e9a-i"e# %ash ratio a"# its e8$i/ale"t to %$rre"t liabilities. Tra#e i"/est-e"t or -ar'etable se%$rities are e8$i/ale"t of %ashA therefore< the+ -a+ be i"%l$#e# i" the %o-p$tatio" of %ash ratioC

Cash I Mar'etable Se%$rities Cash *atioG C$rre"t Liabilities

'. Inter*al #easure Het a"other< ratio< 1hi%h assesses a fir-=s abilit+ to -eet its reg$lar %ash e9pe"ses< is the i"ter/al -eas$re. !"ter/al -eas$re relates li8$i# assets to a/erage #ail+ operati"g %ash o$tflo1s. The #ail+ operati"g e9pe"ses 1ill be e8$al to %ost of goo#s sol# pl$s selli"g< a#-i"istrati/e a"# ge"eral e9pe"ses less #epre%iatio" >a"# other "o" %ash e9pe"#it$res #i/i#e# b+ "$-ber of #a+s i" a +ear >sa+ 306?.

C$rre"t assets B i"/e"tor+ !"ter/al -eas$re G A/erage #ail+ operati"g e9pe"ses

(. ;et 2orking Capital 8atio The #iffere"%e bet1ee" %$rre"t assets a"# %$rre"t liabilities e9%l$#i"g short J ter- ba"' borro1i"gs i" %alle# "et 1or'i"g %apital >NWC? or "et %$rre"t assets >NCA?. NWC is so-eti-es $se# as a -eas$re of fir-=s li8$i#it+. !t is %o"si#ere# that bet1ee" t1o fir-=s the o"e ha/i"g larger NWC as the greater abilit+ to -eet its %$rre"t obligatio"s. This is "ot "e%essaril+ soA the -eas$re of li8$i#it+ is a relatio"ship< rather tha" the #iffere"%e bet1ee" %$rre"t assets a"# %$rre"t liabilities. NWC< ho1e/er< -eas$res the fir-=s pote"tial reser/oir of f$"#s. !t %a" be relate# to "et assets >or %apital e-plo+e#?C Net 1or'i"g %apital >NWC? NWC ratio G >Net assets >or? Capital E-plo+e#?

0. -<=<8/>< 8/TI9:

The shortBter- %re#itors< li'e ba"'ers a"# s$ppliers of ra1 -aterials< are -ore %o"%er"e# 1ith the fir-=s %$rre"t #ebtBpa+i"g abilit+. O" other ha"#< li"gBter- %re#itors li'e #ebe"t$re hol#ers< fi"a"%ial i"stit$tio"s et% are -ore %o"%er"e# 1ith the fir-=s lo"gBter- fi"a"%ial stre"gth. !" fa%t a fir- sho$l# ha/e a stro"g short as 1ell as lo"gBter- fi"a"%ial stre"gth. !" fa%t a fir- sho$l# ha/e a stro"g shortBas 1ell as lo"gBter- fi"a"%ial positio". To .$#ge the lo"gB ter- fi"a"%ial positio" of the fir-< financial le*erage< or capital structure ratios are %al%$late#. These ratios i"#i%ate -i9 of f$"#s pro/i#e# b+ o1"ers a"# le"#ers. As a ge"eral r$le there sho$l# be a" appropriate -i9 of #ebt a"# o1"ers e8$it+ i" fi"a"%i"g the fir-=s assets. Le/erage ratios -a+ be %al%$late# fro- the bala"%e sheet ite-s to #eter-i"e the proportio" of #ebt i" total fi"a"%i"g. Ma"+ /ariatio"s of these ratios e9istA b$t all these ratios i"#i%ate the sa-e thi"g the e9te"t to 1hi%h the fir-s has relie# o" #ebt i" fi"a"%i"g assets. Le/erage ratios are also %o-p$te# for- the profit a"# loss ite-s b+ #eter-i"i"g the e9te"t to 1hi%h operati"g profits are s$ffi%ie"t to %o/er the fi9e# %harges. 1. 6<?T 8/TI9: Se/eral #ebt ratios -a+ be $se# to a"al+se the lo"g ter- sol/e"%+ of the firThe fir- -a+ be i"tereste# i" '"o1i"g the proportio" of the i"terest beari"g #ebt >also %alle# as f$"#e# #ebt? i" the %apital str$%t$re. !t -a+< therefore< %o-p$te debt ratio b+ #i/i#i"g total #ebt b+ %apital e-plo+e# or "et assets. Capital e-plo+e# 1ill i"%l$#e total #ebt a"# "et 1orth Total #ebt >TD? Debt ratio G Total #ebt >TD? I Net 1orth >NW?

Total #ebt >TD? Debt *atioG Capital e-plo+e# >CE?

6ebt!<,uity 8atio: The relatio"ship #es%ribi"g the le"#ers %o"trib$tio" for ea%h r$pee of the o1"ers= %o"trib$tio" is %alle# #ebtBe8$it+ >DE? ratio is #ire%tl+ %o-p$te# b+ #i/i#i"g total #ebt b+ "et 1orthC Total #ebt >TD? Debt B e8$it+ ratio G Net 1orth >NW?

4. Capital <mployed to ;et 3orth 8atio !t is a"other 1a+ of e9pressi"g the basi% relatio"ship bet1ee" #ebt a"# e8$it+. O"e -a+ 1a"t to '"o1C Do1 -$%h f$"#s are bei"g %o"trib$te# together b+ le"#ers a"# o1"ers for ea%h r$pee of o1"ers= %o"trib$tio" K Cal%$lati"g the ratio of %apital e-plo+e# or "et assets to "et 1orth %a" fi"# this o$tC Capital e-plo+e# >CE? Capital e-plo+e# to "et 1orth *atio G Net 1orth >NW?

C9=<8/>< 8/TI9:

Interest Co*erage 8atio: Debt ratios #es%ribe# abo/e are stati% i" "at$re< a"# fail to i"#i%ate the fir-=s abilit+ to -eet i"terest >a"# other fi9e# %harges? obligatio"s. The interest co*erage ratio or the times interest!earned is $se# to test the fir-=s #ebtBser/i%i"g %apa%it+. the i"terest %o/erage ratio is %o-p$te# b+ #i/i#i"g ear"i"gs before i"terest a"# ta9es>E5!T?b+ i"terest %hargesC

E5!T !"terest %o/erage ratioG !"terest

/CTI=IT7 8/TI9S:
3$"#s of %re#itors a"# o1"ers are i"tereste# i" /ario$s assets to ge"erate sales a"# profits. The better the -a"age-e"t of assets< the larger the a-o$"t of sales. A%ti/it+ ratios are e-plo+e# to e/al$ate the effi%ie"%+ 1ith

1hi%h the fir- -a"ages a"# $tili@es its assets. These ratios are also %alle# t$r"o/er ratios be%a$se the+ i"#i%ate the spee# 1ith 1hi%h assets are bei"g %o"/erte# or t$r"e# o/er i"to sales. A%ti/it+ ratios< th$s< i"/ol/es a relatio"ship bet1ee" sales a"# assets. A proper bala"%e bet1ee" sales a"# assets ge"erall+ refle%ts that assets are -a"age# 1ell. Se/eral a%ti/it+ ratios are %al%$late# to .$#ge the effe%ti/e"ess of asset $tili@atio". 1@. In*entory Turno*er 8atio: !"/e"tor+ t$r"o/er i"#i%ates the effi%ie"%+ of the fir- i" pro#$%i"g a"# selli"g its pro#$%t. !t is %al%$late# b+ #i/i#i"g the %ost of goo#s sol# b+ the a/erage i"/e"tor+C Cost of goo#s sol# !"/e"tor+ t$r"o/er *atio G A/erage i"/e"tor+ >O*? Net sales !"/e"tor+ The a/erage i"/e"tor+ is the a/erage of ope"i"g a"# %losi"g bala"%es of i"/e"tor+. The %ost of goo#s sol# -a+ "ot be a/ailable so 1e %a" %o-p$te i"/e"tor+ t$r"o/er as sales #i/i#e# b+ i"/e"tor+ !" a -a"$fa%t$ri"g %o-pa"+ i"/e"tor+ of fi"ishe# goo#s is $se# to %al%$late i"/e"tor+ t$r"o/er. This i"/e"tor+ t$r"o/er ratio i"#i%ates 1hether i"/est-e"t i" i"/e"tor+ is effi%ie"tl+ $tili@e# or "ot. !t< therefore< e9plai"s 1hether i"/est-e"t i" i"/e"tor+ i" 1ithi" proper li-its or "ot. !t is %al%$late# b+ #i/i#i"g the %ost of goo#s sales b+ the a/erage i"/e"tor+. The i"/e"tor+ t$r"o/er sho1s ho1 rapi#l+ the i"/e"tor+ i" t$r"i"g i"to re%ei/able thro$gh sales. A high i"/e"tor+ t$r"o/er is i"#i%ati/e of goo# i"/e"tor+ -a"age-e"t.

A lo1 i"/e"tor+ t$r"o/er i-plies e9%essi/e i"/e"tor+ le/els tha" 1arra"te# b+ pro#$%tio" a"# sales a%ti/ities or a slo1 -o/i"g or obsolete i"/e"tor+.

In*entory Con*ersion Period: !t -a+ also be of i"terest to see the a/erage ti-e ta'e" for %leari"g the sto%'. This %a" be possible b+ %al%$lati"g the i"/e"tor+ %o"/ersio" perio#. This perio# is %al%$late# b+ #i/i#i"g the "o. of #a+s b+ i"/e"tor+ t$r"o/er ratioC

No. of #a+s i" the +ear !"/e"tor+ t$r"o/er ratioG !"/e"tor+ t$r"o/er ratio

11. 6ebtors :/ccounts 8ecei*able" Turno*er 8atio: A fir- sells goo#s for %ash a"# %re#it. Cre#it is $se# as a -ar'eti"g tool b+ "$-ber of %o-pa"ies. Whe" the fir- e9te"#s %re#its to its %$sto-ers< #ebtors >a%%o$"ts re%ei/able? are %reate# i" the fir-=s a%%o$"ts. Debtors are %o"/ertible i"to %ash o/er a short perio# a"#< therefore< are i"%l$#e# i" %$rre"t assets. The li8$i#it+ positio" of the fir- #epe"#s o" the 8$alit+ of #ebtors to a great e9te"t. 3i"a"%ial a"al+st applies these ratios to .$#ge the 8$alit+ or li8$i#it+ of #ebtors >a? Debtors T$r"o/er *atio >b? Debtors Colle%tio" Perio# Debtors= t$r"o/er is fo$"# o$t b+ #i/i#i"g %re#it sales b+ a/erage #ebtorsC Cre#it sales Debtors t$r"o/er A Debtors

Debtors= t$r"o/er i"#i%ates the "$-ber of ti-es #ebtors= t$r"o/er ea%h +ear ge"erall+< the higher the /al$e of #ebtors= t$r"o/er< the -ore effi%ie"t is the -a"age-e"t of %re#it. To o$tsi#e a"al+st< i"for-atio" abo$t %re#it sales a"# ope"i"g a"# %losi"g bala"%es of #ebtors -a+ "ot be a/ailable. Therefore< #ebtors= t$r"o/er %a" be %al%$late# b+ #i/i#i"g Total sales b+ the +earBe"# bala"%es of #ebtorsC Sales Debtors t$r"o/er G Debtors

/*erage Collection Period: A/erage Colle%tio" Perio# is $se# i" #eter-i"i"g the %olle%tibles of #ebtors a"# the effi%ie"%+ of %olle%tio" efforts. !" as%ertai"i"g the fir-s %o-parati/e stre"gth a"# a#/a"tage relati/e to its %re#it poli%+ a"# perfor-a"%e The a/erage "$-ber of #a+s for 1hi%h the #ebtors re-ai" o$tsta"#i"g is %alle# the A/erage Colle%tio" Perio#. The A/erage Colle%tio" Perio# -eas$res the 8$alit+ of the #ebtors si"%e it is i"#i%ate# the spee# of their %olle%tio".

306 A/erage Colle%tio" Perio#G Debtors T$r"o/er *atio

BorC Debtors G Sales 1&. ;et /ssets Turno*er 8atio: Net assets t$r"o/er %a" be %o-p$te# si-pl+ b+ #i/i#i"g sales b+ "et sales >NA? Sales Net Assets T$r"o/er G Net assets !t -a+ be re%alle# that "et assets >NA? i"%l$#e "et fi9e# assets >N3A? a"# "et %$rre"t assets >NCA?< that is< %$rre"t assets >CA? -i"$s %$rre"t liabilities >CL?. Si"%e "et assets e8$al %apital e-plo+e#< "et assets t$r"o/er -a+ also be %alle# %apital e-plo+e#< "et assets t$r"o/er -a+ also be %alle# capital employed turno*er. Total /ssets Turno*er: So-e a"al+sts li'e to %o-p$te the total assets turno*er i" a##itio" to or i"stea# of the "et assets t$r"o/er. This ratio sho1s the fir-s abilit+ i" ge"erati"g sales fro- all fi"a"%ial reso$r%es %o--itte# to total assets.
L 306

Th$sC Sales Total Assets T$r"o/er G Total assets

Total Assets >TA? i"%l$#e "et fi9e# Asses >N3A? a"# %$rre"t assets >CA? >TAGN3AICA? 1(. Current /ssets Turno*er A fir- -a+ also li'e to relate %$rre"t assets >or "et 1or'i"g gap? to sales. !t -a+ th$s %o-plete "et1or'i"g %apital t$r"o/er b+ #i/i#i"g sales b+ "et 1or'i"g %apital. Sales C$rre"t assets t$r"o/er G C$rre"t assets 10. .i+ed /ssets Turno*er: The fir- to '"o1 its effi%ie"%+ of $tili@i"g fi9e# assets separatel+. This ratio -eas$res sales i" r$pee of i"/est-e"t i" fi9e# assets. A high ratio i"#i%ates a high #egree of $tili@atio" i" assets a"# lo1 ratio refle%ts the i"effi%ie"t $se of assets Sales 3i9e# Assets T$r"o/er G 3i9e# Assets

11. 2orking Capital Turno*er 8atioC Wor'i"g Capital of a %o"%er" is #ire%tl+ relate# to sales. The %$rre"t assets li'e #ebtors< bills re%ei/able< %ash< a"# sto%' et%. %ha"ge 1ith the i"%rease or #e%rease i" sales. The Wor'i"g Capital is ta'e" asC

Wor'i"g Capital G C$rre"t Assets J C$rre"t Liabilities This *atio i"#i%ates the /elo%it+ of the $tili@atio" of "et 1or'i"g %apital. This *atio i"#i%ates the "$-ber of ti-es the 1or'i"g %apital is t$r"e# o/er i" the %o$rse of a +ear. This *atio -eas$res the effi%ie"%+ 1ith 1hi%h the 1or'i"g %apital is bei"g $se# b+ a fir-. A higher ratio i"#i%ates the effi%ie"t $tili@atio" of 1or'i"g %apital a"# the lo1 ratio i"#i%ates i"effi%ie"t $tili@atio" of 1or'i"g %apital. Sales Wor'i"g %apital t$r"o/er G Net 1or'i"g %apital

P89.IT/?I-IT7 8/TI9S
A %o-pa"+ sho$l# ear" profits to s$r/i/e a"# gro1 o/er a lo"g perio# of ti-e. Profits are esse"tial< b$t it 1orl# be 1ro"g to ass$-e that e/er+ a%tio" i"itiate# b+ -a"age-e"t of a %o-pa"+ sho$l# be ai-e# at -a9i-i@i"g profits< irrespe%ti/e of %o"%er"s for %$sto-ers< e-plo+ees< s$ppliers or so%ial %o"se8$e"%es. !t is $"fort$"ate that the 1or# profit is loo'e# $po" as a ter- of

ab$se si"%e so-e fir-s al1a+s 1a"t to -a9i-i@e profits ate the %ost of e-plo+ees< %$sto-ers a"# so%iet+. E9%ept s$%h i"fre8$e"t %ases< it is a fa%t that s$ffi%ie"t profits -$st be able to obtai" f$"#s fro- i"/estors for e9pa"sio" a"# gro1th a"# to %o"trib$te to1ar#s the so%ial o/erhea#s for 1elfare of the so%iet+. Profit is the #iffere"%e bet1ee" re/e"$es a"# e9pe"ses o/er a perio# of ti-e >$s$all+ o"e +ear?. Profit is the $lti-ate o$tp$t of a %o-pa"+< a"# it 1ill ha/e "o f$t$re if it fails to -a'e s$ffi%ie"t profits. Therefore< the fi"a"%ial -a"ager sho$l# %o"ti"$o$sl+ e/al$ate the effi%ie"%+ of the %o-pa"+ i" ter-s of profit. The profitabilit+ ratios are %al%$late# to -eas$re the operati"g effi%ie"%+ of the %o-pa"+. 5esi#es -a"age-e"t of the %o-pa"+< %re#itors a"# o1"ers are also i"tereste# i" the profitabilit+ of the fir-. Cre#itors 1a"t to get i"terest a"# repa+-e"t of pri"%ipal reg$larl+. O1"ers 1a"t to get a re8$ire# rate of ret$r" o" their i"/est-e"t. This is possible o"l+ 1he" the %o-pa"+ ear"s e"o$gh profits. Ge"erall+< t1o -a.or t+pes of profitabilit+ ratios are %al%$late#C Profitabilit+ i" relatio" to sales. Profitabilit+ i" relatio" to i"/est-e"t.

10. ;et Profit #argin Net profit is obtai"e# 1he" operati"g e9pe"sesA i"terest a"# ta9es are s$btra%te# for- the gross profit -argi" ratio is -eas$re# b+ #i/i#i"g profit after ta9 b+ salesC Net Profit Net profit *atio G Sales L 66

Net profit ratio establishes a relatio"ship bet1ee" "et profit a"# sales a"# i"#i%ates a"# -a"age-e"t=s i" -a"$fa%t$ri"g< a#-i"istrati"g a"# selli"g the pro#$%ts. This ratio is the o/erall -eas$re of the fir-=s abilit+ to t$r" ea%h r$pee sales i"to "et profit. !f the "et -argi" is i"a#e8$ate the fir- 1ill fail to a%hie/e satisfa%tor+ ret$r" o" sharehol#ers= f$"#s. This ratio also i"#i%ates the fir-=s %apa%it+ to 1ithsta"# a#/erse e%o"o-i% %o"#itio"s.A fir- 1ith high "et -argi" ratio 1o$l# be a#/a"tageo$s positio" to s$r/i/e i" the fa%e of falli"g pri%es< selli"g pri%es< %ost of pro#$%tio" . 11. ;et #argin ?ased on ;9P/T The profit after ta9 >PAT? fig$re e9%l$#es i"terest o" borro1i"g. !"terest is ta9 #e#$%ts able< a"# therefore< a fir- that pa+s -ore i"terest pa+s less ta9. Ta9 sa/e# o" a%%o$"t of pa+-e"t of i"terest is %alle# i"terest ta9 shiel#. Th$s the %o"/e"tio"al -eas$re of "et profit -argi"BPAT to sales ratioB is affe%te# b+ fir-=s fi"a"%ial poli%+. !t %a" -islea# if 1e %o-pare t1o fir-s 1ith #iffere"t #ebt ratios. 3or a tr$e %o-pariso" of the operati"g perfor-a"%e of fir-s< 1e -$st ig"ore the effe%t of fi"a"%ial le/erage< /i@.< the -eas$re of profits sho$l# ig"ore i"terest a"# its ta9 effe%t. Th$s "et profit -argi" >for e/al$ati"g operati"g perfor-a"%e? -a+ be %o-p$te# i" the follo1i"g 1a+C

E5!T > BT? Net profit -argi" G Sales G

NOPAT Sales

14. 9perating <+pense 8atio:

The operati"g e9pe"se ratio e9plai"s the %ha"ges i" the profit -argi" >E5!T to sales? ratio. This ratio is %o-p$te# b+ #i/i#i"g operati"g e9pe"ses viz., %ost of goo#s sol# pl$s selli"g e9pe"se a"# ge"eral a"# a#-i"istrati/e e9pe"ses >e9%l$#i"g i"terest? b+ sales. Operati"g e9pe"ses Operati"g e9pe"ses ratioG Sales 1D. 8eturn on In*estment :89I? The ter- i"/est-e"t -a+ refer to total assets or "et assets. The f$"#s e-plo+e# i" "et assets i" '"o1" as %apital e-plo+e#. Net assets e8$al "et fi9e# assets pl$s %$rre"t assets -i"$s %$rre"t liabilities e9%l$#i"g ba"' loa"s. Alter"ati/el+< %apital e-plo+e# is e8$al to "et 1orth pl$s total #ebt. The %o"/e"tio"al approa%h of %al%$lati"g ret$r" of i"/est-e"t >*O!? is to #i/i#e PAT b+ i"/est-e"ts. !"/est-e"t represe"ts pool of f$"#s s$pplie# b+ sharehol#ers a"# le"#ers< 1hile PAT represe"t resi#$e i"%o-e of sharehol#ersA therefore< it is %o"%ept$all+ $"so$"# to $se PAT i" the %al%$latio" of *O!. Also< as #is%$sse# earlier< PAT is affe%te# b+ %apital str$%t$re. !t is< therefore< -ore appropriate to $se o"e of the follo1i"g -eas$res of *O! for %o-pari"g the operati"g effi%ie"%+ of fir-sC

5!T > BT? *O! G *OTA G Total assets E5!T > BT? *O! G *ONA G Net assets G G

E5!T > BT? TA E5!T > BT? NA

Si"%e ta9es are "ot %o"trollable b+ -a"age-e"t< a"# si"%e fir-=s opport$"ities for a/aili"g ta9 i"%e"ti/es #iffer< it -a+ be -ore pr$#e"t to $se before ta9 to -eas$re *O!. Ma"+ %o-pa"ies $se E5!TDA >Ear"i"gs before Depre%iatio"< !"terest< Ta9 a"# A-orti@atio"? i"stea# of E5!T to %al%$late *O!. Th$s the ratio isC E5!T *O!G Total Assets >TA?

%@. 8eturn on <,uity :89<" Co--o" or or#i"ar+ sharehol#ers are e"title# to the resi#$al profits. The rate of #i/i#e"# is "ot fi9e#A the ear"i"gs -a+ be #istrib$te# to sharehol#ers or retai"e# i" the b$si"ess. Ne/ertheless< the "et profits after ta9es represe"t their ret$r". A ret$r" o" sharehol#ers e8$it+ is %al%$late# to see the profitabilit+ of o1"ers= i"/est-e"t. The sharehol#ers e8$it+ or "et 1orth 1ill i"%l$#e pai#B$p share %apital< share pre-i$-< a"# reser/es a"# s$rpl$s less a%%$-$late# losses. Net 1orth also be fo$"# b+ s$btra%ti"g total liabilities fro- total assets. The ret$r" o" e8$it+ is "et profit after ta9es #i/i#e# b+ sharehol#ers e8$it+< 1hi%h is gi/e" b+ "et 1orthC Profit after ta9es *OE G Net 1orth >E8$it+? G NW PAT

*OE i"#i%ates ho1 1ell the fir- has $se# the reso$r%es of o1"ers. !" fa%t< this ratio is o"e of the -ost i-porta"t relatio"ships i" fi"a"%ial a"al+sis. The ear"i"g of a satisfa%tor+ ret$r" is the -ost #esirable ob.e%ti/e of b$si"ess.

The ratio of "et profit to o1"ers= e8$it+ refle%ts the e9te"t to 1hi%h this ob.e%ti/e has bee" a%%o-plishe#. This ratio is< th$s< of great i"terest to the prese"t as 1ell as the prospe%ti/e Sharehol#ers a"# also of great %o"%er" to -a"age-e"t< 1hi%h has the respo"sibilit+ of -a9i-i@i"g the o1"ers= 1elfare. The ret$r" o" o1"ers= e8$it+ of the %o-pa"+ sho$l# be %o-pare# 1ith the ratios of other si-ilar %o-pa"ies a"# the i"#$str+ a/erage. This 1ill re/eal the relati/e perfor-a"%e a"# stre"gth of the %o-pa"+ i" attra%ti"g f$t$re i"/est-e"ts. %1. <arnings per Share :<PS" The profitabilit+ of the sharehol#ers i"/est-e"ts %a" also be -eas$re# i" -a"+ other 1a+s. O"e s$%h -eas$re is to %al%$late the ear"i"gs per share. The ear"i"gs per share >EPS? are %al%$late# b+ #i/i#i"g the profit after ta9es b+ the total "$-ber of or#i"ar+ shares o$tsta"#i"g. Profit after ta9 EPS G N$-ber of share o$tsta"#i"g %%. 6i*idends per Share :6PS or 6I=" The "et profits after ta9es belo"g to sharehol#ers. 5$t the i"%o-e< 1hi%h the+ 1ill re%ei/e< is the a-o$"t of ear"i"gs #istrib$te# as %ash #i/i#e"#s. Therefore< a large "$-ber of prese"t a"# pote"tial i"/estors -a+ be i"tereste# i" DPS< rather tha" EPS. DPS is the ear"i"gs #istrib$te# to or#i"ar+ sharehol#ers #i/i#e"# b+ the "$-ber of or#i"ar+ shares o$tsta"#i"g.

Ear"i"gs pai# to sharehol#ers >#i/i#e"#s? DPSG N$-ber of or#i"ar+ shares o$tsta"#i"g

%&. 6i*idend E Payout 8atio The Di/i#e"# J pa+o$t *atio or si-pl+ pa+o$t ratio is DPS > or total e8$it+ #i/i#e"#s? #i/i#e# b+ the EPS > or profit after ta9?C E8$it+ #i/i#e"#s Di/i#e"# Pa+o$t *atio G Profit after ta9 Di/i#e"#s per share G Ear"i"gs per share G EPS DPS

1.% 8<S</8C$ #<T$969-9>7

1.%.1;eed for the study:
The proble-s< 1hi%h are %o--o" to -ost of the p$bli% se%tors $"#er ta'i"g< are -aterials s%ar%it+. Capa%it+ $tili@atio" a"# -ai"l+ 1or'i"g %apital re8$ire-e"ts a"# Es1ar r$bber P/t.Lt#. are "o e9%eptio". Th$s the i-porta"%e of the st$#+ re/eals as to ho1 effi%ie"tl+ the 1or'i"g %apMital has bee" $se# so far i" the orga"i@atio".

1.%.% SC9P< 9. T$< ST 67: The s%ope of the st$#+ is li-ite# to %olle%ti"g fi"a"%ial #ata p$blishe# i" the a""$al reports of the %o-pa"+ e/er+ +ear. The a"al+sis is #o"e to s$ggest the possible sol$tio"s. The st$#+ is %arrie# o$t for &+ears>,663B64?.

1.%.& 9bFecti*es of the study:

To e9a-i"e the fi"a"%ial perfor-a"%e of the =iFai <lectricals -td. for the perio# of ,663 to ,664. To a"al+ses i"terpret a"# to s$ggest the operatio"al effi%ie"%+ of the =iFai <lectricals -td. b+ %o-pari"g the bala"%e sheetN profit N loss AO%

To %riti%all+ a"al+ses the fi"a"%ial perfor-a"%e of the =iFai <lectricals -td. With Delp of the ratios.

1.%.' 6ata sources: The st$#+ is base# o" se%o"#ar+ #ata. Do1e/er the pri-ar+ #ata is also %olle%te# to fill the gap i" the i"for-atio"..

Pri-ar+ #ata 1ill be thro$gh reg$lar i"tera%tio" 1ith the offi%ials of =iFai <lectricals -td. .

Se%o"#ar+ #ata %olle%te# fro- a""$al reports a"# also e9isti"g -a"$als a"# li'e %o-pa"+ re%or#s bala"%e sheet a"# "e%essar+ re%or#s. 1.%.( -I#IT/TI9;SC The st$#+ is base# o" o"l+ se%o"#ar+ #ata. The perio# of st$#+ 1as ,663B64 fi"a"%ial +ears o"l+.

2.
$76<8/?/6, I;6I/ C9#P/;7 P89.I-<

PROFILE

=IG/I <-<CT8IC/-S -I#IT<6

The %o-pa"+ 1as pro-ote# b+ Shri D P *a-esh< a first ge"eratio" e"trepre"e$r a"# its prese"t Chair-a" N Ma"agi"g Dire%tor< i" the +ear 243 for the -a"$fa%t$re of Distrib$tio" a"# Po1er Tra"sfor-ers. Shri D P *a-esh hol#s a Master #egree i" Ele%tri%al E"gi"eeri"g spe%ialisi"g i" Tra"sfor-er #esig". Dis professio"al approa%h to orga"isatio"al iss$es< re-ar'able b$si"ess a%$-e" %o$ple# 1ith abilit+ to fore%ast b$si"ess s%e"ario ahea#< the stro"g #eter-i"atio" to p$rs$e the e9%elle"%e ha/e all bee" his %hief %hara%teristi%s of his perso"alit+ that 1ere i"str$-e"tal i" bri"gi"g the orga"isatio" to a stat$re of a global pla+er. Cateri"g to the "ee#s of Ele%tri%it+ 5oar#s a"# Pri/ate E"terprises 1ithi" the %o$"tr+< the %o-pa"+ /er+ soo" be%a-e o"e of the lea#i"g -a"$fa%t$rers of Tra"sfor-ers i" the %o$"tr+. !ts 1orl# %lass #esig" s$pple-e"te# b+ StateBofB theBart te%h"olog+< establishe# a"# -a"age# professio"all+ 1ith rob$st 8$alit+ s+ste-s a"# -o#er" -a"$fa%t$ri"g a"# testi"g fa%ilities< sta"# testi-o"+ to the rep$te of the %o-pa"+.

T$< 298HS Of the Se/e" -ost -o#er" -a"$fa%t$ri"g pla"ts of the Co-pa"+< o"e is sit$ate# at 5ala"agar i" D+#eraba#< A"#hra Pra#esh< the first Pla"t of Ei.ai Ele%tri%als< 1hi%h has the re8$isite o$tfit to %ater "ot o"l+ to -a"$fa%t$re

Distrib$tio" Tra"sfor-ers of /ario$s rati"gs b$t also to $"#erta'e ser/i%i"g. C$rre"tl+ this $"it is bei"g $se# to $"#erta'e ser/i%i"g .obs. The Pla"t , at *$#rara-< Me#a' Distri%t< A"#hra Pra#esh has a h$ge set of 1i#e ra"gi"g fa%ilities a%ross the /ario$s #is%ipli"es 1ith %apa%it+ to -eet the e/er gro1i"g "ee#s of the %$sto-ers i" ter-s of their e9a%ti"g #esig" spe%ifi%atio" a"# stri"ge"t 8$alit+ re8$ire-e"ts. While the -a.or portio"s of operatio"s %e"tre ro$"# the Distrib$tio" a"# Po1er Tra"sfor-ers of /ario$s rati"gs $pto 6 MEA< the pla"t has also the fa%ilit+ to -a"$fa%t$re Cast *esi" Dr+ T+pe Tra"sfor-ers< a pro#$%t bei"g pro#$%e# o"l+ b+ a fe1 re"o1"e# -a"$fa%t$rers i" the %o$"tr+. The Pla"t 3 b$ilt e9%l$si/el+ for the -a"$fa%t$re of si"gle a"# three phase E"erg+ Effi%ie"t A-orpho$s Metal Distrib$tio" Tra"sfor-ers of Co"/e"tio"al a"# Co-pletel+ Self Prote%te# >CSP? t+pes< sta"#s o$t as a #isti"g$ishable -a"$fa%t$ri"g Pla"t 1ith the -ost -o#er" e8$ip-e"t< hiBte%h fa%ilities a"# pra%ti%es. The pla"t e"gage# i" 1orl# %lass -a"$fa%t$ri"g pra%ti%es is the o"l+ o"e of its 'i"# i" the %o$"tr+ a"# the 1orl# o$tsi#e )SA. The Pla"t 4 is a %apti/e Co"#$%tor Pla"t %ateri"g to the "ee#s of all the )"its of the Co-pa"+ for all t+pes of %oate# a"# %o/ere# %opper a"# al$-i"$%o"#$%tors. Co"ti"$o$sl+ Tra"spose# Co"#$%tors >CTC? -a"$fa%t$ri"g fa%ilit+ is +et a"other a#.$"%t to the Pla"t a"# has the %apa%it+ to %ater to the "ee#s of the gia"t $sers i" the %o$"tr+. The other )"its are ba%'1ar# i"tegratio" pro.e%ts %ateri"g to s$ppl+ of -aterial to the %o-pa"+ a"# also a Pa%'i"g 1oo# $"it of e9port 8$alit+ a"# sta"#ar#s.

P896 CTS The product range of VEL covers the entire gamut of Transformers, some of the major ones being: A-orpho$s Metal Distrib$tio" Tra"sfor-ers $pto 666 KEA< Si"gle phase a"# Three phase. Si"gle Phase Oil 3ille# Tra"sfor-ers $pto 3333 KEA< 30 'E Class. Three Phase Oil 3ille# Tra"sfor-ers $pto 6666 KEA< 00 'E Class. Si"gle Phase Dr+ T+pe Cast *esi" Tra"sfor-ers $pto 004 KEA< 30 'E Class. Three Phase Dr+ T+pe Cast *esi" Tra"sfor-ers $pto (666 KEA< 30 'E QClass. Co-pletel+ SelfBProte%te# Tra"sfor-ers $pto &66 KEA. Do$ble Paper Co/ere#< M$ltiple Paper Co/ere#< S$per E"a-ele#< 3iber Glass Co/ere# Copper a"# Al$-i"$- Co"#$%tors. Co"ti"$o$sl+ Tra"spose# Co"#$%tors >CTC? Mo"oblo% P$-p Sets. A$to Tra"sfor-ers. CL* N C7* 5rea'ers

T<C$;IC/- H;92 $92

The company has the most modern technical know how absorbed from world leaders and some of it indigenously developed over a period of 3 decades since the inception of the company. Following is the summary of technical know how absorbed from leading companies:

Single

hase !ound "ore - $%s. !estinghouse "orporation& 'S( - $%s. !estinghouse "orporation& $etal 'S( "ore - $%s. #aihen "orporation& ,apan

#istribution Transformers ")* +reakers. (morphous

#istribution Transformers

>89 P C9#P/;I<S

S/#8/HS$/;/ <-<CT8IC/-S -I#IT<6

Ma"$fa%t$res CSP Cir%$it 5rea'ers for $se i" Distrib$tio" Tra"sfor-ers a"# -eets the re8$ire-e"ts of the Co-pa"+< #o-esti% "ee#s a"# e9ports to )SA. !t also -a"$fa%t$res !"s$late# Copper a"# Al$-i"$- %o"#$%tors< Distrib$tio" Tra"sfor-ers a"# Digh Effi%ie"%+ Si"gle Phase Mo"oblo% P$-p Sets for the Agri%$lt$re Se%tor of the %o$"tr+. >892T$ !" its -a"ifol# stages of gro1th< the earl+ brea'thro$gh 1as -a#e 1he" the %o-pa"+ bagge# a -assi/e or#er for the s$ppl+ of Distrib$tio" Tra"sfor-ers fro- A"#hra Pra#esh State Ele%tri%it+ 5oar#. 3ollo1i"g this<

"e1er approa%hes to a%hie/e higher sta"#ar#s of Pro#$%t 7$alit+< e"ha"%e# Pro#$%ti/it+ 1ere a#opte# i" 8$i%' s$%%essio" 1ith bright prospe%ts for higher gro1th a"# progress. Most -o#er" a##itio"al fa%ilities 1ere a##e# for #esig" a"# -a"$fa%t$re< s$pporte# b+ 1ellBestablishe# s+ste-s a"# DiBte%h pra%ti%es i" all the f$"%tio"s a%ross the e"tire orga"isatio"< a"# the perfor-a"%e rea%he# "e1er heights. The Co-pa"+ e-bar'e# o" a "e1 /e"t$re to -a"$fa%t$re Si"gle Phase Wo$"# Core Tra"sfor-ers a"# to#a+ the %o-pa"+ has a#-irabl+ %re#ite# itself 1ith bei"g the sole -a"$fa%t$rer i" the %o$"tr+< %ar/i"g o$t a "i%he for itself i" the #esig" a"# -a"$fa%t$re of Si"gle Phase Wo$"# Core Tra"sfor-ers i" the 1orl#. At this .$"%t$re< the %o-pa"+ 1it"esse# a %li-ate of highl+ -oti/ate# a"# e-po1ere# 1or' for%e 1illi"g to gi/e f$rther i-pet$s to the gro1th a"# this triggere# off a -a.or e9pa"sio"< %$l-i"ati"g i" the establish-e"t of the e9%l$si/e A-orpho$s Metal Tra"sfor-ers Pla"t %o-prisi"g of -ost -o#er" i"tegrate# -a"$fa%t$ri"g fa%ilities. The s$bse8$e"t phase 1it"esse# the begi""i"g of a" era of e9port 1ith the %o-pa"+ e9e%$ti"g the firstBe/er e9port or#er 1hi%h rapi#l+ e"ha"%e# %$l-i"ati"g i" a "e1er height 1ith a 1hoppi"g e9port t$r"o/er of )S R ,2 -illio" #$ri"g the +ear 220B24. Efforts to a$g-e"t this share i" the 1orl# -ar'et are top-ost i" the age"#a of the Co-pa"+=s 5$si"ess Pla". $ #/; 8<S9 8C< To#a+ the orga"isatio" #ra1s its stre"gth fro- the highl+ -oti/ate# 1or'for%e 1hi%h %o"sists of 8$alifie#< trai"e# a"# e9perie"%e# Ma"agers< E"gi"eers< S$per/isors a"# Wor'-e"< e/er 1illi"g to -eet the e9a%ti"g a"#

%ha"gi"g #e-a"#s of the e"lighte"e# %$sto-ers< a"# 1holl+ %o--itte# to 1or'i"g to1ar#s the %o-pa"+=s /isio" of lea#ership i" the Tra"sfor-er !"#$str+. While the Wor'-e" a"# S$per/isors $"#ergo the i"#$%tio" trai"i"g< the Gra#$ate E"gi"eers $"#ergo a /igoro$s o"eB+ear trai"i"g progra--e to gai" s'ill< '"o1le#ge a"# %o-pete"%e< i" or#er that the+ %a" -eas$re $pto the %halle"gi"g tas's a"# ass$-e higher respo"sibilities. 3or a%hie/i"g Ma"agerial e9%elle"%e< i"#i/i#$als i#e"tifie# for ta'i"g $p /ital Ma"agerial positio" $"#ergo lo"gBter- trai"i"g i" the rep$te# Pre-ier Ma"age-e"t !"stit$tes of the %o$"tr+. E-plo+ees at /ario$s le/els a"# fro- #i/erse f$"%tio"s are e9pose# to /ario$s Te%h"i%al a"# 5eha/ioral trai"i"g progra--es base# o" the i#e"tifie# "ee#s for selfB#e/elop-e"t a"# for the e"ha"%e-e"t of orga"isatio"al effe%ti/e"ess.

5 /-IT7 The Co-pa"+ has 1ellBestablishe# 7$alit+ s+ste-s to e"s$re 8$alit+ at all stages a"# i" all f$"%tio"s i" a %li-ate of Total 7$alit+ Wor' C$lt$re< 1here parti%ipatio" b+ e/er+o"e reig"s s$pre-e. 7$alit+ is a 1at%h1or# a%ross the

e"tire orga"isatio" a"# has pro/e# to be a %or"er sto"e for the Co-pa"+=s s$stai"e# gro1th a"# s$%%ess. The three -a.or Pla"ts of the Co-pa"+ ha/e their i"#epe"#e"t !SO 266 J ,666 %ertifi%atio" a"# ha/e bee" s$%%essf$ll+ passi"g thro$gh the %ertifi%atio" of S$r/eilla"%e a"# re"e1al a$#its si"%e the +ear 224. A%hie/i"g C$sto-er Satisfa%tio" is the 8$alit+ poli%+ of the %o-pa"+ a"# to this e"# the %o-pa"+ has bee" a#opti"g progressi/e -eas$res /is$alisi"g 8$alit+ as a 'e+ strateg+ to sta+ %o-petiti/e i" the b$si"ess.

-/;6#/8HS Shi"i"g E9a-ples of E9%eptio"al E"trepre"e$rial Spirit The "a-e Ei.ai Ele%tri%als Lt#. has bee" asso%iate# 1ith a large "$-ber of sig"ifi%a"t a%%o-plish-e"tsC 243 Establish-e"t of the Orga"i@atio" 2(3 !"tro#$%tio" of CSP Tra"sfor-ers i" the %o$"tr+ 2(4 Te%h"i%al Collaboratio" 1ith MFs Westi"gho$se Corporatio"< )SA

for Si"gle Phase Wo$"# Core Tra"sfor-ers 2(( Co--e"%e-e"t of Cast *esi" Tra"sfor-ers Pro#$%tio". Co--e"%e-e"t of E9ports. 2(2 Te%h"i%al Collaboratio" 1ith MFs Daihe" Corporatio"< Papa" for -a"$fa%t$re of AMDT=s. *e%og"itio" b+ Go/er"-e"t of !"#ia as :E9port Do$se;. 224 Ma"$fa%t$re of Earth8$a'e *esista"t Tra"sfor-ers for the first ti-e i" !"#ia. !SO 266 Certifi%atio" 22& 220 Se%$re# a" e9port or#er 1orth )S R 2. , Millio" fro- Philippi"es< the largest e/erBsi"gle e9port or#er of Tra"sfor-er i" the %o$"tr+. Co--e"%e-e"t of Pro#$%tio" for A-orpho$s Metal Distrib$tio" Tra"sfor-ers i" the e9%l$si/e AMDT Pla"t S$%%essf$l T+pe testi"g of 666 KEA A-orpho$s Metal Distrib$tio" Tra"sfor-ers.

224 *e%og"itio" b+ Go/er"-e"t of !"#ia as :Tra#i"g Do$se; 22(

222 Se%$re# SWorl# 5a"'= or#er 1orth abo$t )S R , Millio". Obtai"e# )S pate"t for TCo"ti"$o$s A""eali"g 3$r"a%eT i" A-orpho$s ,666 Metal Tra"sfor-er Pla"t E9porte# a %o"sig"-e"t of *s . Millio" to Ger-a"+ ,66 S$%%essf$l T+pe Testi"g for /e"#or registratio" i" Papa"

E9ports %ross )S R 66 -illio" E"tr+ i"to t$r"'e+ ele%trifi%atio" N s$bstatio" pro.e%ts. ,66, S$%%essf$l %o-pletio" of Ar% Proof Test o" 36 'EA Si"gleBPhase Tra"sfor-ers as per P!S >Papa"ese Sta"#ar#s? for the first ti-e i" !"#ia. ,663 !SO 266 J ,666 series Certifi%atio". Co--issio"i"g of e9%l$si/e a"# %o-plete Corr$gatio" Li"e.

,664 *e%or#s highest e/er t$r"o/er of *s.,24 %rores i" the 3H ,663B64.

Te%h"i%al Collaboratio" 1ith Daihe" Corp. Papa" for Large Po1er Tra"sfor-ers $p to &66 MEA< &66 KE Class. Co--issio"i"g of Por%elai" Pla"t. Co--issio"i"g of *a#iator Pla"t. Co--issio"i"g of *oboti% Wel#i"g. Co--issio"i"g of Plas-a Ar% C$tti"g fa%ilities. A%%re#itatio" to all Testi"g laboratories /i@.< Tra"sfor-er Testi"g ,66& Laboratories )"itsB 6, N 63< Co"#$%tor Testi"g Laborator+ J )"itB 64 a"# Tra"sfor-er Oil Testi"g laborator+ i" )"it B,< fro- Natio"al A%%re#itatio" 5oar# for Testi"g a"# Calibratio" Laboratories >NA5L?. ,660 !"%orporatio" of 5ra@ilia" S$bsi#iar+ of Ei.ai Ele%tri%als Lt#. !"#ia. !"%orporatio" of the Me9i%a" 1i"g of Ei.ai Ele%tri%als Lt#. !"#ia. ,664 S$%%essf$l SC testi"g of the first &6 MEA Tra"sfor-ers pro#$%e# b+ the EDE 1i"g i" the first atte-pt.

T$< /2/86S The Co-pa"+ 1as 8$i%' "ot o"l+ to se"se the e-ergi"g tre"#s i" te%h"olog+ 1orl# o/er< b$t alo"gsi#e pla+e# %o"siste"tl+ a sig"ifi%a"t role i" e9peri-e"ti"g< i""o/ati"g a"# pio"eeri"g "e1er %o"%epts. E"erg+ Sa/i"g a"# Cost Effe%ti/e"ess be%a-e the t1i" pri"%iples of the Co-pa"+=s -issio" a"# beari"g e/i#e"%e to this %o--itte# effort< Ei.ai Ele%tri%als i"tro#$%e# E"erg+B Effi%ie"t< CostBEffe%ti/e A-orpho$s Metal Tra"sfor-ers< the firstBe/er pro#$%e# i" the %o$"tr+. The Orga"isatio" is o" a perpet$al %a-paig" a#/o%ati"g the $se of A-orpho$s Metal Tra"sfor-ers< tirelessl+ #ri/i"g ho-e the -essage of the

i-perati/e a"# the $rge"t "ee# for sa/i"g of E"erg+ to -eet the e/erBgro1i"g #e-a"#s of Po1er i" the %o$"tr+. The s$%%essf$l .o$r"e+ perfor-e# 1ith #+"a-is-< /isio" a"# i"#efatigable e"erg+ i" the path of e9%elle"%e o/er a perio# of t1o a"# a half #e%a#es< has ope"e# $p "e1 hori@o"s for a prospero$s a"# /i%torio$s e"tr+ i"to the "e1 -ille""i$-. Cro1"i"g all these efforts< the Co-pa"+ has re%ei/e# se/eral A1ar#s< Trophies a"# Shiel#s i" re%og"itio" of its perfor-a"%e a"# lea#i"g roles i" the #o-ai"s of Do-esti% a"# E9port -ar'ets a"# to 8$ote a sig"ifi%a"t fe1<

In 8ecognition of 9utstanding <+cellence: )#+og Patra A1ar# fro- Ei%e Presi#e"t of !"#ia i" the +ear 2(,. )#+og *at"a A1ar# fro- the the" )"io" Mi"ister of E"erg+< Go/t. of !"#ia i" the +ear 2(4. Certifi%ate of Merit fro- EEPC for o$tsta"#i"g E9port for the +ears 22,< 223 a"# 224. All !"#ia A1ar# for E9port E9%elle"%e b+ EEPC for the +ears 224B 2&< 22&B20 a"# 220B24. *olli"g Trophies for E9port b+ Co"fe#eratio" of !"#ia" !"#$stries >C!!?< %o"ti"$all+ for fo$r +ears begi""i"g fro- 224 to 224. *e%og"i@e# as SE9port Do$se= i" 223B24 b+ the Go/t. of !"#ia. *e%og"ise# as STra#i"g Do$seT i" 224B2( b+ the Go/er"-e"t of !"#ia

 EEPC *egio"al A1ar# for the o$tsta"#i"g E9port Perfor-a"%e #$ri"g the +ear 222B,666 >)"#er the Categor+ Ele%tri% Po1er 22( re%ei/e# b+ o$r Ma%hi"er+< S1it%hgear a"# Co"trol Gear?. Natio"al Citi@e"=s A1ar# for the +ear Chair-a" for o$tsta"#i"g %o"trib$tio" i" the fiel# of !"#$str+. )#+og P+oti A1ar# fro- the the" Mi"ister of Labor N E-plo+-e"t< Go/t. of !"#ia. i" the +ear ,666. A1ar# for the 5est E9port Effort i" the State >S$ra"a )#+og Sil/er *olli"g Troph+? #$ri"g ,66 B6, fro- the 3APC!!. !T!D >!"stit$te of Tra#e a"# !"#$strial De/elop-e"t? 7$alit+ E9%elle"%e A1ar# ,66, a1ar#e# i" re%og"itio" of 7$alit+ Pro#$%t >A-orpho$s Metal Tra"sfor-ers? b+ !T!D< Ne1 Delhi. 4th 5est E9porter A1ar# for the +ear ,66 B,66, fro- Co"tai"er Corporatio" of !"#ia< Mi"istr+ of *ail1a+s< Go/t. of !"#ia. 5harat *at"a Dr. M.Eis/es/ara+a !"#$strial A1ar# ,663 for 5est !-port S$bstit$tio" Effort froAll !"#ia Ma"$fa%t$rers Orga"i@atio"< A.P. EEPC *egio"al A1ar# for the o$tsta"#i"g E9port Perfor-a"%e #$ri"g the +ear ,666B,66 . EEPC *egio"al A1ar# for the o$tsta"#i"g E9port Perfor-a"%e >Co"ti"$o$s e9%elle"%e? #$ri"g the +ear ,66 B,66,. EEPC *egio"al A1ar# for the o$tsta"#i"g E9port Perfor-a"%e >Ne1 F Diffi%$lt Mar'et? #$ri"g the +ear ,66,B,663. EEPC *egio"al A1ar# for the o$tsta"#i"g E9port Perfor-a"%e #$ri"g the +ear ,66&B,660.

C ST9#<8 S<8=IC<

The Orga"isatio" has a" e9%l$si/e C$sto-er Ser/i%e Wi"g -a""e# b+ a %o-ple-e"t of highl+ s'ille# E"gi"eers a"# Te%h"i%ia"s to pro/i#e pro-pt a"# effi%ie"t ser/i%e to the %$sto-ers. Perio#i% a"al+sis of the fee#ba%' is -a#e a"# appropriate %orre%ti/e a"# pre/e"ti/e -eas$res are ta'e" to e"s$re "ot o"l+ 8$alit+ b$t also reliabilit+< #o1"ti-e re#$%tio" a"# life %+%le e9te"sio". The staff re-ai"s i" %o"sta"t to$%h 1ith the %$sto-ers a"# ass$res Total C$sto-er Ser/i%e thro$gh i"tera%tio"< pro-pt ser/i%e a"# effe%ti/e fee#ba%' s+ste-.

C ST9#<8S

The Co-pa"+ e".o+s the pro$# pri/ilege of bei"g a 1ell '"o1" s$pplier to all State Ele%tri%it+ 5oar#s i" the %o$"tr+ a"# Ele%tri%it+ Ge"erati"g %o-pa"ies a"# "$-ber of Pri/ate !"#$stries. With its a%%e"t o" e9port< it has %$sto-ers i" a "$-ber of %o$"tries a%ross the 1orl# a"# the %o-pa"+ has pla"s to fora+ i"to E$rope a"# North A-eri%a for a higher Global Mar'et share. The %$sto-ers fro- 1ithi" the %o$"tr+ i"%l$#e the follo1i"g

69#<STIC All State Ele%tri%it+ 5oar#s i" !"#ia< i" parti%$lar the APT*ANSCO< KE5< G*!DCO< MSE5< et%. Other Ele%tri% )tilities a"# !"#$strial Do$ses i"%l$#eC MFs ABU Co"s$lta"ts.

 Ah-e#aba# Ele%tri%it+ Co-pa"+ Lt#. Assa- State Ele%tri%it+ 5oar#. 5o-ba+ S$b$rba" Ele%tri% S$ppl+ Li-ite#< M$-bai 5o-ba+ Ele%tri% S$ppl+ a"# Tra"sport )"#erta'i"g< M$-bai 5ihar State Ele%tri%it+ 5oar# Delhi Ei#+$t 5oar# Depart-e"t of Ato-i% E"erg+< M$-bai Gri#%o< 5h$ba"esh1ar Go/t. of Pa--$ a"# Kash-ir G$.arat Ele%tri%it+ 5oar# Dar+a"a State Ele%tri%it+ 5oar# Di-a%hal Pra#esh State Ele%tri%it+ 5oar# !"#ia" *ail1a+s D$bli Ele%tri%it+ S$ppl+ Co-pa"+ Li-ite#. Kalpatar$ Po1er Tra"s-issio" Li-ite#. Kerala State Ele%tri%it+ 5oar# Larse" N To$bro Lt#. Ma#h+a Pra#esh Ele%tri%it+ 5oar# Maharashtra D!SCOM Ne1 Delhi M$"i%ipal Co$"%il N$%lear Po1er Corporatio" *a.astha"D!SCOM a? AEENL b? PEENL Sie-e"s Lt#. Ta-il Na#$ Ele%tri%it+ 5oar#. )ttar Pra#esh State Ele%tri%it+ 5oar#.

 Po1er Gri# Corporatio" of !"#ia Lt#.

Natio"al Ther-al Po1er Corporatio" . <IP98T E/er si"%e Ei.ai Ele%tri%als e"tere# the e9port -ar'et i" 2(2< it has

establishe# a sig"ifi%a"t prese"%e i" se/eral e9port -ar'ets li'e Philippi"es< 5a"gla#esh a"# )AE. The %o-pa"+ has also %o/ere# other %o$"tries li'e 5ra@il< Gha"a a"# Nepal. So-e of the %o$"tries ha/e pla%e# repeat or#ers 1ith the %o-pa"+ #$e to perfor-a"%e of the pro#$%t. !t e-erge# as the largest e9porter of Tra"sfor-ers i" the %o$"tr+ #$ri"g t$r"o/er rea%he# *s 24.23 Crores. D$ri"g ,66 B6, it also e"tere# i"to the E$ropea" -ar'et 1ith a" i"itial %o"sig"-e"t of *s . -illio" e9porte# to Ger-a"+. The %$sto-ers fro- abroa# i"%l$#e the follo1i"g *$ral Ele%trifi%atio" 5oar#< 5a"gla#esh 3aso"s Metal !"#$stries< 5a"gla#esh Ge"eral Ele%tri% Ma"$fa%t$ri"g Co-pa"+< 5a"gla#esh Se"a Kal+a" Sa"gstha< 5a"gla#esh Natio"al Ele%trifi%atio" A#-i"istratio"< Philippi"es D$bai Ele%tri%it+ a"# Water A$thorit+< D$bai Ele%tri%it+ A$thorit+< C+pr$s Ele%tri%it+ Corporatio" of Gha"a< Gha"a Ele%tro Pa$lo Ele%tri%i#a#o< Saopa$lo< 5ra@il Do Chi Mi"h Cit+ Po1er Corporatio"< Eiet"a Mi"istr+ of Ele%tri%it+ a"# Water< O-a" Nepal Ele%tri%it+ A$thorit+< Nepal Water a"# Ele%tri%it+ Depart-e"t< Al Ai"< )AE WESCOSA< Sa$#i Arabia 220B24 1he" its e9port

 Ui-bab1e Ele%tri%it+ S$ppl+ A$thorit+< Ui-bab1e. MNC< Ger-a"+ S%h"ei#er Corporatio" J ).K.

$I>$-I>$TS 9. T$< .I;/;CI/- 7</8 %@@&!@': *e%or#e# highest e/er gross t$r"o/er of *s.,23 %rores. Se%$re# si"gle largest or#er e/er i" the #istrib$tio" tra"sfor-er seg-e"t i" o$r %o$"tr+ fro- G$.arat Ele%tri%it+ 5oar# >GE5? to1ar#s s$ppl+ of A-orpho$s Metal Distrib$tio" Tra"sfor-er >AMDTs? /al$i"g *s. 46 %rores. E9e%$te# prestigio$s or#er /al$i"g *s. ( %rores fro- !ra8< 1ith $"i8$e pro#$%t spe%ifi%atio"s< i" a re%or# ti-e of 4& #a+s. E"tere# i"to strategi% part"eri"g agree-e"t 1ith MFs S%h"ei#er Ele%tri% Corporatio"< ).K. for s$ppl+ of tra"sfor-ers. !-ple-e"te# 5aa" E*P S+ste- for effe%ti/e reso$r%e pla""i"g. We"t li/e o" 36.2.,664. E"tere# i"to o"e -ore te%h"i%al %ollaboratio" agree-e"t 1ith MFs Daihe" Coropartio"< Papa" for tra"sfer of te%h"olog+. T$r"'e+ Pro.e%ts #i/isio" e9pa"#e#. $I>$-I>$TS 9. T$< .I;/;CI/- 7</8 %@@'!@(: *e%or#e# highest e/er "et sales of *s.44 .0( %rores #$ri"g the ele/e" -o"ths perio# i" a +ear si"%e i"%eptio". S$pplie# & Nos 36 KEA tra"sfor-ers to PAPAN< a %o$"tr+ '"o1" for 7$alit+< Pre%isio" a"# *eliabilit+ for the pro#$%ts. Ge"eral phe"o-e"o" is that if 1e are able to s$ppl+ o$r pro#$%t to Papa" a"# E$rope< it establishes that o$r pro#$%t is a%%eptable i" a"+ part of the 1orl#.

 !"%rease# the a/erage pro#$%tio" pla"t %apa%it+ fro- *s.,& %rores per -o"th to *s.&6 %rores per -o"th b+ a##i"g li"e bala"%i"g e8$ip-e"ts i" respe%t of Tra"sfor-er Di/isio" a"# also 1ith the help of 5aaN pro#$%tio" s%he#$ler. !"stalle# a"# %o--issio"e# t1o *O5OT Wel#i"g -a%hi"es of 3AN)C< Papa" -a'e i" 3abri%atio" ba+. !t is first of its 'i"# i" tra"sfor-er i"#$str+. This 1ill fa%ilitate higher pro#$%ti/it+< 8$alit+< pre%isio" a"# re#$%tio" i" -a" po1er. Stre"gthe"e# ba%'1ar# i"tegratio" fa%ilities /i@.< a? De/elope# b$shi"gs for all Si"gle a"# Three phase #istrib$tio" tra"sfor-ers e9%ept e9port Po1er Tra"sfor-ers. b? !"#ige"o$sl+ #e/elope# s$bstit$tio" for i-porte# Tap s1it%h for S%h"ei#er Pobs. %? De/elope# press boar#s for all t+pes of tra"sfor-ers i"%l$#i"g i"tro#$%tio" of Press boar# sheari"g li"e $p to 3--. #? Epo9+ #otte# paper for all rati"gs of tra"sfor-ers t+pes i" the 1i"#i"g se%tio". e? Wi#e"e# the fabri%atio" %apa%it+ b+ i"tro#$%i"g fabri%atio" of 3i" T+pe *a#iators for the tra"sfor-er rati"gs $p to 6 MEA et%. Se%$re# si"gle largest or#er 1orth *s. 6,.(, %rores fro- *elia"%e E"erg+ Lt# #$ri"g %$rre"t fi"a"%ial +ear a"# se%o"# largest i" the tra"sfor-er i"#$str+ i" !"#ia. 3irst bei"g GE5 or#er 1orth *s. 46 %rores se%$re# b+ $s o"l+. E"teri"g i" a big 1a+ for s$ppl+ of #istrib$tio" tra"sfor-ers to Wi"# E"erg+ Se%tor. MFs.E"er%o" has alrea#+ pla%e# or#er o" $s a"# e9pe%ti"g -ore or#ers fro- MFs. E"er%o" a"# MFs.S$@lo" et%. !#e"tifie# pote"tial e9port -ar'et i" the %o$"tries s$%h as Ethiopia< Ta"@a"ia< Nigeria< Ke"+a< Ua-bia< )ga"#a et%.< S$%%essf$ll+ %o-plete# o"e +ear of 5aa" E*P s+ste-. The %o-pa"+ is bei"g be"efite# 1ith better pro#$%tio" pla""i"g i" ter-s of pro#$%t -i9 1hi%h +iel#s high ret$r"s a"# effe%ti/e $tilisatio" of -a%hi"er+

-i"i-isi"g the i-bala"%es i" %apa%ities of -a%hi"er+ res$lti"g i" high o$tp$t as -$%h as *s.066 %rores per a""$-. Te%h"i%al '"o1 absorptio" $"#er progress fro- MFs. Daihe" Corporatio"< Papa" to1ar#s tra"sfer of te%h"olog+ i" respe%t of Po1er Tra"sfor-ers Desig" a"# Ma"$fa%t$ri"g.

$I>$-I>$TS 9. T$< .I;/;CI/- 7</8 %@@0!@1: Pro.e%t #i/isio" is the first i" the %o$"tr+ to ha/e all the E*P f$"%tio"alities. E!PA! goes ahea# i" 3o$"#atio" of its o1" e9%l$si/e Corr$gatio" Ta"' Li"e. S$%%essf$ll+ %o"#$%te# Ar% Proof Test for the first ti-e i" !"#ia. Sets $p a "e1 pla"t i" )ttara"%hal for the -a"$fa%t$re of Si"gle Phase Distrib$tio" Tra"sfor-ers. E"ters i"to Te%h"i%al Collaboratio" 1ith Daihe" Corporatio"< Papa" for -a"$fa%t$re of EDE Po1er Tra"sfor-ers $p to &66 MEA< &66 KE %lass. This StateBofBtheBart -a"$fa%t$ri"g fa%ilit+ is lo%ate# at *$#rara-< "ear D+#eraba#. *e/e"$e is a 1hoppi"g !N* 3,4 %rores >)S R 336 Millio"? i" the %$rre"t fi"a"%ial +ear of ,660B64. Set $p e9%l$si/e -a"$fa%t$ri"g fa%ilities of Copper foils a"# Kraft paper.

 3abri%atio" fa%ilit+ ho$ses hite%h pro%esses s$%h as Plas-a ar% %$tti"g a"# *oboti% 1el#i"g. Deplo+s E*P to opti-ise the a/ailable reso$r%es a"# re#$%e the respo"se ti-e to the %$sto-ers. E9plori"g possibilities to /e"t$re i"to Wi"# a"# D+#el po1er pro.e%ts. Pla"s for setti"g $p Massi/e Ser/i%e Ce"tre a%ross #iffere"t parts of !"#ia. !"tro#$%es the "e1 VDelta Core Tra"sfor-ersV. Pla"s for setti"g $p a" e9%l$si/e -a"$fa%t$ri"g pla"t i" Me9i%o for e"erg+ effi%ie"t A-orpho$s Metal Core Distrib$tio" Tra"sfor-ers. . T 8< P-/;S The Co-pa"+ has e-bar'e# $po" -a.or e9pa"sio" a"# #i/ersifi%atio" pro.e%ts i"%l$#i"g Po1er Tra"sfor-ers< Me#i$- Distrib$tio" Tra"sfor-ers< 5ioBMass Po1er Pla"t< a"# other ba%'1ar# i"tegratio" pro.e%ts to 1i#e" its %$sto-er base a"# %apt$re "e1 gro1th possibilities a"# re#$%e -a"$fa%t$ri"g %osts a"# has also pla"s to la$"%h "e1er /ersio"s of Tra"sfor-ers 1hi%h sho$l# pro/e "ot o"l+ e%o"o-i%al i" ter-s of %ost a"# e"erg+ b$t as allBti-e s$perior pro#$%t to pro/i#e. Total Satisfa%tio" to the e"# $sers< be the+ Ele%tri%it+ 5oar#s< Po1er Ge"erati"g Co-pa"ies or Pri/ate E"terprises. E9port 1o$l# %o"ti"$e to be a thr$st area b$t 1ith the greater a%%e"t o" e9pa"#i"g the 1orl# -ar'et espe%iall+ fora+i"g i"to E$rope a"# )S. The Co-pa"+< 1hi%h has a" e"tr+ i"to Distrib$tio" S+ste- !-pro/e-e"t Pro.e%ts< 1o$l# %o"ti"$e to loo' for gree"er past$res to progressi/el+ %apt$re si-ilar %o"tra%ts of Pro.e%ts< #o-esti% as 1ell as foreig"< i" the i--e#iate f$t$re.

3.

Review of literature

3i"a"%ial state-e"ts ha/e t1o -a.or $ses i" fi"a"%ial a"al+sis .first< the+ are $se# to prese"t a histori%al re%o/er of the fir-=s fi"a"%ial #e/elop-e"t. Se%o"#< the+ are $se# for a %o$rse of a%tio" for the fir-. A perfor-a"%e fi"a"%ial state-e"t is prepare# for a f$t$re perio#. !t is the fi"a"%ial -a"ager=s esti-ate of the fir-=s f$t$re perfor-a"%e. The operatio" a"# perfor-a"%e of a b$si"ess #epe"#s o" -a"+ i"#i/i#$als are %olle%ti/e #e%isio"s that are %o"ti"$all+ -a#e b+ its -a"age-e"t tea-. E/er+ o"e of these #e%isio"s $lti-atel+ %a$ses a fi"a"%ial i-pa%t< for better or 1or's o" the %o"#itio" a"# the perio#i% res$lts of the b$si"ess. !" esse"%e< the pro%ess of -a"agi"g i"/ol/es a series of e%o"o-i% %hoi%es that a%ti/ates -o-e"ts of fi"a"%ial reso$r%es %o""e%te# 1ith the b$si"ess. So-e of the #e%isio"s -a#e b+ -a"age-e"t o"e 1ill be the -a.or< s$%h as i"/est-e"t i" a "e1 fa%ilit+< raisi"g large a-o$"ts of #ebts or a##i"g a "e1 li"e of pro#$%ts or ser/i%es. Most other #e%isio"s are part of the #a+ to #a+ pro%ess i" 1hi%h e/er+ f$"%tio"al area of the b$si"ess is -a"age#. The %o-bi"e of effe%t of all #e%isio"s %a" be obser/e# perio#i%all+ 1he" the perfor-a"%e of the b$si"ess is .$#ge# thro$gh /ario$s fi"a"%ial state-e"ts a"# spe%ial a"al+sis. These %ha"ges ha/e profo$"#l+ affe%te# all o$r li/es a"# it is i-porta"t for %orporate -a"agers< share hol#ers< te"#ers< %$sto-ers a"# s$ppliers to i"/est-e"t a"# the perfor-a"%e of the %orporatio"s o" 1hi%h the" rela+. All 1ho #epe"# o" a %orporatio" for pro#$%ts< ser/i%es< or a .ob -$st be -e# abo$t their %o-pa"+=s abilit+ to -eet their #e-a"#s ti-e a"# i" this %ha"gi"g 1orl#. The gro1th a"# #e/elop-e"t of the %orporate e"terprises is refle%te# i" their fi"a"%ial state-e"t.

-I5 I6IT7 /;6 P89.IT/?I-IT7: Li8$i#it+ a"# profitabilit+ are t1o i-porta"t #e-a"#ers i" #eter-i"i"g the so$"#"ess of a" e"terprise. Li8$i#it+ -ea"s abilit+ of a fir- to -eet its %$rre"t obligatio"s 1he" the+ be%o-e #$e for pa+-e"t. !t has t1o aspe%ts J 8$a"titati/e a"# 8$alitati/e. 7$alitati/e aspe%t i-plies the 8$a"t$- of %$rre"t assets a fir- possesses irrespe%ti/e of -a'i"g a"+ #iffere"%e bF1 /ario$s t+pes of %$rre"t assets s$%h as i"/e"tories< %ash a"# so o". 7$alitati/e aspe%t refor-s the 8$alit+ of %$rre"t i" ter-s of their reali@atio" i" to %ash %o"si#eri"g ti-e #i-e"sio" i"/ol/e# i" -at$ri"g #iffere"t %o-po"e"ts of %$rre"t assets. Profitabilit+ is the %apa%it+ of ear"i"g profits a"# #$e -ost i-porta"t -eas$re of perfor-a"%e of affir-s. !t is ge"erall+ ass$-e# that there is "egati/e relatio"ship bF1 li8$i#it+ a"# profitabilit+ i.e. higher li8$i#it+ res$lts i" lo1er profitabilit+ a"# /i%eB/ersa.

The obFecti*es of the study: To st$#+ the gro1th a"# #e/elop-e"t of the %o-pa"+. To st$#+ the beha/ior of li8$i#it+ a"# profitabilit+ of the %o-pa"ies. To a"al+@e the fa%tors #eter-i"i"g the li8$i#it+ a"# profitabilit+. To %o-parati/e st$#+ of sele%te# %o-pa"ies o" the basis of sele%te# ratios.

Statement of the problem:

De/elop-e"t of i"#$stries #epe"#s o" se/eral fa%tors s$%h as fi"a"%ial perso""el< te%h"olog+< a"# 8$alit+ of the pro#$%t a"# -ar'eti"g art of these. 3i"a"%ial aspe%ts ass$-e a sig"ifi%a"t role i" #eter-i"i"g the gro1th of i"#$stries. All of the %o-pa"+=s operatio"s /irt$all+ affe%t its "ee# for %ash. Most of these #ata %o/eri"g operatio"s areas are ho1e/er o$tsi#e the #ire%t respo"sibilit+ of the fi"a"%ial e9e%$ti/es. Eal$es top -a"age-e"t appre%iates the /al$e of goo# fi"a"%ial e9e%$ti/es to '"o1 the profitabilit+ a"# li8$i#it+ of the %o"%er". The fir- 1hose prese"t operatio"s are i"here"tl+ #iffi%$lt sho$l# tr+ to -a'es its fi"a"%ial a"al+sis to e"able its -a"age-e"t to sta+ o" top of its 1or'i"g positio". !" this %o"te9t the resear%her is i"tereste# i" $"#erta'i"g a" a"al+sis of the fi"a"%ial perfor-a"%e of %o-pa"ies to e9a-i"e a"# to $"#ersta"# ho1 -a"age-e"t of fia"%W pla+s a %r$%ial role of the fi"a"%ial perfor-a"%e a"al+sis of sele%te# %o-pa"ies i" !"#ia has bee" $"#erta'e".

5.
-I5 I6IT7 8/TI9S:
Current 8atioC

Data analysis

C$rre"t ratio is %al%$late# b+ #i/i#i"g %$rre"t assets b+ %$rre"t liabilities. C$rre"t assets C$rre"t *atioG C$rre"t Liabilities 7ear Current /ssets T/?-< '!1 Current -iabilities ,(04. 2 043&.24 ,433. 4 ,44,,.44 34402.2,
"urrent ratio 3 -.0 2.0 2 1.0 1 -113 -11/ -110 "urrent ratio -113 -114 -../ -.-0 -.10 -.-3 -.-3

Current 8atio ,.(4 ,.,& ,.6& ,.,3 ,.,3

,663 ( 33.64 ,664 4442. , ,66& ,&4&2.0 ,660 && 3,.6, ,664 (3404.,4 >So$r%eC A""$al *eports?

I;.<8/;C<: !" abo/e table sho1" the %$rre"t ratio of fi/e +ears >,663B ,664?. The C$rre"t *atio of Ei.ai Ele%tri%als Lt#. Earie# fro- ,.(4 to ,.,3 1ith

a" a/erage of ,.3, #$ri"g the st$#+ perio#. The sol/e"%+ positio" of Ei.ai Ele%tri%als Lt#. !" ter-s of %$rre"t ratio 1as abo/e the sta"#ar# "or- /ol$-e of ,C for the e"tire perio#. The %$rre"t *atio i" the +ear ,66,B63 1as ,.(4. This %a-e #o1" to ,.,3 i" the last , +ears This sho1s $tili@atio" of i#le f$"#s i" the %o-pa"+

5uick8atioC
>7$i%' AssetsGC$rre"t AssetsB!"/e"tories? 7$i%' Assets 7$i%' *atioG C$rre"t Liabilities T/?-< '!% 7ear ,663 ,664 ,66& ,660 ,664 5uick /ssets &026. (26,.42 44&&.40 3430&.(, 43442.6& Current -iabilities ,(04. 2 043&.24 ,433. 4 ,44,,.44 34402.2, .22 .3( . 2 .32 . 0 5uick 8atio

>So$r%eCA""$al*eports?

5uick *atio -.0 2.0 2 1.0 1 -113 -11/ -110 5uick *atio -113 -114

2.66 2.3. 2.26 2.36 2.23

I;.<8/;C<C The !#eal *atio is C e9%ept i" the first +ear the fir-=s has a goo# %apa%it+ to pa+ of %$rre"t obligatio"s i--e#iatel+ a"# is a test of li8$i#it+. The high 7$i%' *atio i"#i%ates that the fir- has the abilit+ to -eet its %$rre"t liabilities. The abo/e table sho1s the 7$i%' *atio of fi/e +ears >,663B ,664?. The 7$i%' *atio of Ei.ai Ele%tri%als Lt#./arie# fro- .22 to . 0 1ith a" a/erage of .4,. !t 1as abo/e the sta"#ar# "or- of C for the e"tire perio#. !t %o"fir-s that the li8$i#it+ positio" of this Ei.ai Ele%tri%als Lt#. i" ter-s of 8$i%' ratio 1as -ore tha" the sta"#ar#.

Cash ratioC

Cash I Mar'etable Se%$rities Cash *atio G C$rre"t Liabilities

T/?-< '!& 7ear Cash J ?ank Current Cash 8atio

?alances ,663 ,4&.00 ,664 ,34.(3 ,66& 342 .(4 ,660 436 .(3 ,664 (306.42 >So$r%eC A""$al *eports?

-iabilities ,(04. 2 043&.24 ,433. 4 ,44,,.44 34402.2,

6.44&4 6. 2,3 6.36&6 6.,2&3 6.,,3

"ash *atio 1.0 1./ 1.3 1.1.2 1 -113 -11/ -110 "ash *atio -113 -114 1.26-3 1.//0/ 1.310 1.-603 1.--32

I;.<8<;C<C This Cash *atio i"#i%ates that the %apa%it+ of the %o-pa"+ to reali@e %$rre"t liabilities 1ith its li8$i#it+ positio". !" the abo/e Table the Cash Positio" *atio of 3i/e Hears >,663B,664?. The Cash *atio of Ei.ai Ele%tri%als Lt#.has has $"#ergo"e -a"+ fl$%t$atio"s. !t starte# 1ith high ratio at first b+ 6.4& i" the +ear ,663A it 1as #e%rease# to 6. 2 b+ "e9t +ear it 1as slightl+ i"%rease# i" "e9t +ear i.e.,66& to 6.36.agai" falle" #o1" to 6.,2& i" the +ear ,660 a"# #e%rease# to 6.,, i" the +ear ,664.

;et 3orking capital 8atio:

Net 1or'i"g %apital >NWC? NWC ratio G

>Net assets >or? Capital E-plo+e#? T/?-< '!' 7ear ;et3orking capital ,663 &,0(.(2 ,664 (60 . 0 ,66& 36,0.44 ,660 36462.,3 ,664 4&224.3, >So$r%eC A""$al *eports? ;etassets :./K2C" 03.,& &334.,( , 4(3.&0 &6(30.&6 (44(2.46 8atio 6.44, 6.&,0 6.060 6.&2( 6.&4

!orking "apital *atio 1.4 1.3 1.0 1./ 1.3 1.1.2 1 -113 -11/ -110 !orking "apital *atio -113 -114 1./41.0-3 1.313 1.06.

1.0/

I;.<8<;C<C Net 1or'i"g %apital has i"%rease fro- 6.44 i" ,663 to 6.060 i" ,66& a"# #e%rease# to 6.&4i" ,664. so this %learl+ sho1s that the fir- has s$ffi%ie"t a-o$"t of 1or'i"g %apital

-<=<8/>< 8/TI9S:
6<?T 8/TI9:

Total #ebt >TD? Debt ratio G

Total #ebt >TD? I Net 1orth >NW?

T/?-< '!(
year ,663 ,664 ,66& ,660 ,664 Total debt :a" ;et3orth 02,&.&3 (006.(2 6334.,, 36443.&2 4332&.3 :b" 3&(6.42 &42(.(4 6,, .4, 264(.43 4,346.2( Capital employed:aKb" 6&60.3, 44&2.40 ,6&&&.24 4242,.3, (&430.,2 ratio 6.0&4 6.&22 6.&63 6.0 4 6.&60

>So$r%eC A""$al *eports?

#ebt *atio 1.4 1.3 1.0 1./ 1.3 1.1.2 1 1.304 1.066 1.013 1.324 1.013

-113

-11/

-110 ear #ebt *atio

-113

-114

I;.<8<;C<: The *atios i"#i%ates that the %o-pa"+ 1as ta'e" -ore #ebt i"

the first t1o +ears a"# the+ re#$%e# their #ebt ta'e" for f$rther +ears. Table sho1s the Debt *atio of fi/e +ears >,663B,664?.The Debt *atio of Ei.ai Ele%tri%als Lt#. is starte# 1ith 6.00 i" the +ear ,663 a"# it 1as slightl+ #e%rease# to 6.&22 i" the "e9t +ear a"# #e%rease# #$ri"g the +ear ,66& to 6.&6 a"# rea%he# 6.&60 i" ,664. 6ebt E e,uity ratio: Total #ebt >TD? Debt J e8$it+ ratio G Net 1orth >NW?

T/?-< '!0 7ear Total debt ,663 02,&.&3 ,664 (006.(2 ,66& 6334.,, ,660 36443.&2 ,664 4332&.3 >So$r%eC A""$al *eports? ;et3orth 3&(6.42 &42(.(4 6,, .4, 264(.43 4,346.2( ratio .234 .424 .6 6.0 4 .6,&

#ebt-7quity *atio -.0 2.0 2 1.0 1 -113 -11/ -110 !ear #ebt-7quity *atio -113 -114

2.63/ 2./6/ 2.122 1.32/ 2.1-0

I;.<8<;C<: The sta"#ar# "or- for the ratio is ,C . The a%t$al #ebtBe8$it+ ratio

i" the abo/e table sho1s< the first t1o +ears less tha" the sta"# ratio after the ratio has #e%rease# fro- .234 i" ,663 to .424 i" ,664. After that the ratio starts #e%li"i"g tre"# fro- .6 i" ,66& to 6.0 4 i" ,660. a"# agai" raises to .6,& i" ,664 This i"#i%ates fro- the st$#+ that the fir- tries to re#$%e the #ebt a"# re#$%i"g fi"a"%ial ris' of the fir- 1he" both ratios of the +ears ,663 a"# ,664 are %o-pare#. Capital <,uity 8atio: Capital E-plo+e# Capital E-plo+e# To Net Worth *atioG Net Worth T/?-< '!1

7ear Capital<mployed ,663 6&60.3, ,664 44&2.40 ,66& ,6&&&.24 ,660 4242,.3, ,660 (&430.,2 >so$r%eC A""$al *eports?

;et 3orth 3&(6.42 &42(.(4 6,, .4, 264(.43 4,346.2(

8atio ,.234 ,.423 ,.6 ,.0 3 ,.6,&

"apital 7mployed To 8et!orth *atio 3.0 3 -.0 2.0 2 1.0 1 -113 -11/ -110 -113 -114 -.63/ -./63 -.122

-.323 -.1-0

"apital 7mployed To 8et!orth *atio

I;.<8<;C<:The abo/e table sho1s the Capital E8$it+ *atio of fi/e

+ears>,663B,664? . The Capital E8$it+ *atio of Ei.ai Ele%tri%als Lt#. Sho1s fl$%t$atio" i" the perio# of st$#+. The ratio goes #o1" fro- ,.23 i" ,663 to ,.6 ,664. i" the +ear ,660 a" agai" raises to ,.6 3 i" ,660 a"# rea%hes to ,.6,& i"

C9=<8/>< 8/TI9S:
Interest Co*erage 8atio: E5!T !"terest Co/erage *atioC !"terest T/?-< '!4 7ear <?IT ,663 32 4.,& ,664 &,(,.36 ,66& 2&33.(, ,660 04&3.44 ,664 ,06(3.36 >So$r%eC A""$al *eports? interest ((3.30 43(.0( 32.40 3,2.36 3432.43 ratio 4.43 4. & (.30 ,.3( 4.&(

9nterest "overage *atio 2/ 221 . 3 / 1 -113 -11/ -110 9nterest "overage *atio -113 -114 /./3 ..33 2-.3.

4.20

4.0.

I;.<8<;C<C !"terest %o/erage ratio 4 to ( per%e"t is %o"si#ere# a" i#eal. .The

i"terest %o/erage ratio is highl+ i"%rease# #$ri"g the st$#+ perio# fro- 4.43 i"

,663 to ,.3( i" ,660 a"# go"e #o1" to 4.&( i" ,664.5$t these fig$res is i"#i%ates /er+ high.

/CTI=IT7 8/TI9S:
In*entory turno*er 8atioC Cost of goo#s sol# !"/e"tor+ t$r"o/er G A/erage i"/e"tor+ >or? Net sales !"/e"tor+

T/?-< '!D
7ear ;et sales ,663 44 4. 4 ,664 ,0434.(6 ,66& &4332. 0 ,660 (&6 ,.43 ,664 3, 44.33 >So$r%eC A""$al *eports? in*entory 4 3.64 4&&. ( 3&((.0& 4303.4, 066(.26 ratio 4,. 4 3&.46 &. 4 2.4( , .22

9nventory Turnover *atio 01 /1 31 -1 21 1 -113 -11/ -110 -113 -114 20.2/ 26./. /-.24 30./ -2.66

9nventory Turnover *atio

I;.<8<;C<: The !"/e"tor+ T$r"o/er *atio i"%rease# a"# #e%rease# o" the

b$+s of sales that sales i"%rease#. The ratio i"%rease# be%a$se the +ear sales are i"%rease#. The ratio is #e%rease# be%a$se the +ear sales are #e%rease#. !" the abo/e Table sho1s the !"/e"tor+ T$r" o/er *atio of fi/e +ears >,663B ,664?.The i"/e"tor+ ratio of Ei.ai Ele%tri%als Lt#. 1as starte# fro- 4,. 4 i" the +ear ,663 a"# it 1as slightl+ #e%rease# to 3&.4 i" the "e9t +ear. !t 1as #e%rease# to &. 4 i" the +ear ,66&< it i"%rease# slightl+ b+ "e9t t1o +ears.

In*entory con*ersion period: No. of #a+s i" the +ear !"/e"tor+ %o"/ersio" perio#G !"/e"tor+ t$r"o/er ratio

T/?-< '!1@ 7ear 6ays :&0@ In*entory turno*er ratio 4,. 4 3&.46 &. 4 2.4( , .22 Con*ersion days 2 6 ,4 ( 0 days" ,663 306 ,664 306 ,66& 306 ,660 306 ,664 306 >So$r%eC A""$al *eports?

9nventory "onversion eriod 31 -0 -1 20 21 0 1

-/ 2. 6 21 23

no.of da!s

-113

-11/

-110 !ear

-113

-114

9nventory "onversion eriod

6ebtor turno*er 8atio:

Cre#it sales Debtors t$r"o/er A Debtors

T/?-< '!11 7ear Sales ,663 44 4. 4 ,664 ,0434.(6 ,66& &4332. 0 ,660 (&6 ,.43 ,664 3, 44.33 >So$r%eC A""$al *eports? debtors 332 .2 &243.&2 4446.,4 ,6262.0( 466 (.62 ratio &. 3& 4.2( 4.6, 4.64 3.36

#ebtors Turnover *atio . 3 / 1 -113 -11/ -110 !ear #ebtors Turnover *atio -113 -114 0.230 /.6. 4.1/.14

3.3

I;.<8<;C<C Debtors T$r"o/er *atio sho$l# be /er+ high the" o"l+ the

%o-pa"+ 1ill be re%ei/i"g its #ebts 1ith i" a short perio#. !t i"#i%ates the %o-pa"+ has ta'e" less ti-e to %o"/ert the %re#it sales i"to %ash. !" the abo/e Table sho1s the Debtors t$r"o/er ratio of fi/e +ears >,663B,664?. The #ebtors t$r"o/er ratio of Ei.ai Ele%tri%als Lt#. 1as starte# 1ith &. 3& i" the +ear ,663 a"# it i"%rease# to 4.6, i" the +ear ,66&< it 1as #e%rease# to4.64 i" "e9t +ear ,660< a"# it 1as #e%rease# to 3.3 b+ the e"# of +ear ,66&.

6ebtors Collection of period:

306 Colle%tio" of perio# G DE5TO*S T)*N OEE*

T/?-< '!1% 7ear ,663 ,664 days 306 306 6ebtors ratio &. 3& 4.2( turno*er Collection period 46 (6

,66& 306 ,660 306 ,664 306 >So$r%e C A""$al *eports?

4.6, 4.64 3.36

"ollection eriod

& (( 62

2-1 211 .1 31 /1 -1 1

216 41 .1 02 ..

no. of da!s

-113

-11/

-110 !ear "ollection eriod

-113

-114

I;.<8<;C<C

!f the Debtors T$r" o/er *atio i"%reases the #ebtors %olle%tio" perio# 1ill be short. !f the #ebtors t$r"o/er ratio #e%reases the #ebtors %olle%tio" perio# 1ill ta'e lo"g ti-e. !" the abo/e Table sho1s the Debtors Colle%tio" Perio# >Da+s? of fi/e +ears >,663B,664?. D$ri"g the +ear ,663 the perio# of #a+s is 46 #a+s. !t rose to (6 #a+s i" ,664. !t is #e%rease# to & #a+s i" ,66&. !t agai" i"%rease# to (( #a+s i" the +ear ,660< it raise# to /er+ high i" the +ear ,664.

;et /ssets Turno*er 8atio:

Net assets t$r"o/er %a" be %o-p$te# si-pl+ b+ #i/i#i"g sales b+ "et sales Sales Total Assets T$r"o/er G Net assets T/?-< '!1& 7ear ,663 ,664 ,66& ,660 sales 44 4. 4 ,0434.(6 &4332. 0 (&6 ,.43 ;et assets 03.,& &334.,( , 4(3.&0 &6(30.&6 ratio .&0 .44 ,.&3 .04

,664 3, 44.33 >So$r%eC A""$al *eports?

(44(2.46

.&0

8et (ssets Turnover *atio 3 -.0 2.0 2 1.0 1 -.03 2.03 2.4/ 2.34 2.03

"atio

-113

-11/

-110 !ear

-113

-114

8et (ssets Turnover *atio

I;.<8<;C<C Net assets t$r"o/er ratio 1as .&0 i" ,663 a"# .44 i" ,664< ,.&3

i" ,66& a"#

.04 i" ,660 a"#

.&0 i" ,664.so this %o-pa"+ ear"e# least

t$r"o/er ratio i" the +ear ,663 a"# ,664

.i+ed /ssets Turno*er 8atio:

Sales 3i9e# Assets T$r"o/er *atio G 3i9e# Assets

T/?-< '!1' 7ear sales ,663 44 4. 4 ,664 ,0434.(6 ,66& &4332. 0 ,660 (&6 ,.43 ,664 3, 44.33 >So$r%eC A""$al *eports? ;et fi+ed assets &(24.30 4,43. , (4&4.62 ,64,4.,& 3(42,.3( ratio ,.2& 3.0( 0.43 4. 0 3.4

Fi:ed (ssets Turnover *atio 4 3 0 / 3 2 1 3./3 3.3. /.23

"atio

-.60

3./2

-113

-11/

-110 !ear

-113

-114

Fi:ed (ssets Turnover *atio

I;.<8<;C<C 3i9e# assets t$r"o/er ratio 1as ,.2&< 3.0(< 0.43< 4. 0< 3.4

i"

respe%ti/e +ears of ,663< ,664< ,66&< ,660< a"# ,664 so the %o-pa"+ a%hie/e# -a9i-$- fi9e# asset t$r"o/er ratio i" ,66&.

Current assets turno*er 8atioC

Sales C$rre"t assets t$r"o/er G C$rre"t assets

T#$LE %&'( 7ear sales ,663 44 4. 4 ,664 ,0434.(6 ,66& &4332. 0 ,660 (&6 ,.43 ,664 3, 44.33 >So$r%eC A""$al *eports? Current assets ( 33.64 4424. , ,&4&2.0 && 3,.6, (3404.,4 ratio ,. 4 .(4 ,. 3 .&4 .&(

"urrent (ssets Turnover *atio -.0 "atio 2.0 2 1.0 1 -113 -11/ -110 !ear "urrent (ssets Turnover *atio -113 -114 -.2/ -.23 2.0/ 2.0.

2../

I;.<8<;C<C !" this %hart it sho1s the %$rre"t assets t$r" o/er ratio b+ 1hi%h %o-pa"+ is %$rre"tl+ rotati"g the assets for b$si"ess p$rpose. !t 1as highl+ p$r%hase# %$rre"t assets b+ the e"# of the +ear ,66&. The C$rre"t Assets T$r"o/er *atio for the fi/e +ears >,663B,664?. C$rre"t assets t$r"o/er ratio 1as ,. 4< .(4< ,. 3< .&4 a"# .&( i" respe%ti/e +ear of ,663< ,664< ,66&< ,660 a"# ,664 so the %o-pa"+ a%hie/e# -a9i-$- C$rre"t assets t$r"o/er ratio i" ,66&.

Total /ssets Turno*er 8atio: Sales Total Assets T$r"o/er *atioG Total Assets
T/?-< '!10 Total assets 4633.,4 , 44&.(4 332,4.33 4&&00.26 33436 .0,

7ear ,663 ,664 ,66& ,660 ,664

sales 44 4. 4 ,0434.(6 &4332. 0 (&6 ,.43 3, 44.33

ratio .,4 .,3 .06 . , 6.32

>So$r%eC A""$al *eports?

Total (ssets Turnover *atio 2.0 "atio 2 1.0 1 -113 -11/ -110 !ear Total (ssets Turnover *atio -113 -114 1.36 2.-/ 2.-3 2.3 2.2-

I;.<8<;C<: Total Assets T$r"o/er *atio of the %o-pa"+ is rotati"g their

assets i"to b$si"ess p$rpose. !t sho1s that the %o-pa"+ %a" able to rotate the total assets i" the b$si"ess. Abo/e Table sho1s the Total Assets T$r"o/er *atio for the perio# of fi/e +ears >,663B,664?. Total assets t$r"o/er ratio 1as .,4 i" ,663 a"# .,3 i" ,664< .0 i" ,66&< . , i" ,66& a"# 6.32i" the +ear ,664.so this %o-pa"+ ear"e# last t$r"o/er ratio i" the +ear ,664.

2orking Capital Turno*er 8atio: Sales Wor'i"g Capital T$r"o/er *atioG Wor'i"g Capital
T/?-< '!11 sales 2orking capital 44 4. 4 &,0(.(2 ,0434.(6 (60 . 0 &4332. 0 36,0.44 (&6 ,.43 36462.,3 3, 44.33 4&224.3,

7ear ,663 ,664 ,66& ,660 ,664

ratio 3.3 3.3, 4. 4 ,.(6 ,.(4

>So$r%eC A""$al *eports?

!orking "apital Turnover *atio 0 / "atio 3 2 1 -113 -11/ -110 !ear !orking "apital Turnover *atio -113 -114 3.32 3.3/.24 -.. -..4

I;.<8<;C<: !" the abo/e Table a"# Chart the /elo%it+ of the $tili@atio" of Net Wor'i"g Capital. !t has bee" obser/e# that the 1or'i"g %apital t$r"o/er ratio of Ei.ai Ele%tri%als Lt#. !" the abo/e Table sho1s the Wor'i"g Capital T$r"o/er *atio of fi/e +ears >,663B,664?. !" the +ear ,66& Ei.ai Ele%tri%als Lt#. hol#s 1ith effi%ie"t 1or'i"g %apital. After +ears ratio is #e%li"e#.

P89.IT/?I-IT7 8/TI9S:
;et Profit 8atio:
Net Profit Net profit *atio G Sales T/?-< '!14 7ear P/T ,663 &,2.2, ,664 ,466.26 ,66& 4064.0& ,660 (244.04 ,664 3&&2.(3 >So$r%eC A""$al *eports? sales 44 4. 4 ,0434.(6 &4332. 0 (&6 ,.43 3, 44.33 ratio (.4( (.2( (.4( 6.&0 6.,0 L 66

8et 221 . 3 / 1

rofit *atio 21.03 ../. 21.-3

..4.

..6.

"atio

-113

-11/

-110 !ear 8et rofit *atio

-113

-114

I;.<8<;C<C Net profit ratio 1as (.4(< (.2(< (.4(< 6.&0< a"# 6.,0 i" respe%ti/e

+ear of ,663< ,664< ,66&< ,660 a"# ,664 so the %o-pa"+ a%hie/e# -a9i-$Net profit ratio i" ,660 a"# ,664.

;et Profit ?ased 9n ;o P/T: E5!T> Bt? Net Profit 5ase# O" No PATG Sales >or? E5!T Sales G Sales No PAT

T/?-< '!1D 7ear ,663 <?IT 33( .0& sales 44 4. 4 ratio ,,.44

,664 ,66& ,660 ,664

434,.36 (434.4, &6&&.(2 ,4, ,.402

,0434.(6 &4332. 0 (&6 ,.43 3, 44.33

2.40 4.&& 2.3& 2.44

>So$r%e C A""$al *eports?

8et -0 -1 "atio 20 21 0 1 -113 -11/ -110 ear 8et rofit +ased ;n 8o (T -113 -114 --./4 rofit +ased ;n 8o (T

26.43

24.00

26.30

26.4/

8eturn on In*estment 8atio:

E5!T *O! G *OTA G Total assets G TA E5!T

T/?-< '!%@
7ear ,663 ,664 ,66& ,660 ,664 <?IT 33( .0& 434,.36 (434.4, &6&&.(2 ,4, ,.402 Total assets 4633.,4 , 44&.(4 332,4.33 4&&00.26 33436 .0, 8atio 6.,4 6.,6 6.,& 6.,6 6.64 PercentageL ,4. 6 ,6.6( ,4.(4 2.2, 4. (

>So$r%eC A""$al *eports?

*eturn ;n 9nvestment 31 -0 -1 20 21 0 1 -/.2 -1.1. -/..4 26.6-

percentage)*+

4.2.

-113

-11/

-110 !ear *eturn ;n 9nvestment

-113

-114

I;.<8<;C<C *et$r" o" i"/est-e"t ratio 1as ,4. < ,6.6(< ,4.(4< 2.2, a"# 4. ( i"

respe%ti/e +ear of ,663< ,664< ,66&< ,660 a"# ,664 so the %o-pa"+ a%hie/e# -a9i-$- *et$r" o" i"/est-e"t ratio i" ,66&.

8eturn on e,uity ratioC

Profit after ta9es *OE G Net 1orth >E8$it+? G NW PAT

T/?-< '!%1 7ear P/T ,663 &,2.2, ,664 ,466.26 ,66& 4064.0& ,660 (244.04 ,664 3&&2.(3 >So$r%eC A""$al *eports? ;et 3orth 3&(6.42 &42(.(4 6,, .4, 264(.43 4,346.2( 8atioL 4,.43 4 .46 4&.6( 44. 3 3,.63

*eturn on 7quity 01 Percentage /1 31 -1 21 1 -113 -11/ -110 ear *eturn on 7quity -113 -114 /-.43 /2./ /0.1. /4.23 3-.13

I;.<8<;C<C *et$r" o" e8$it+ ratio 1as 4,.43< 4 .4< 4&.6(< 44. 3 a"# 3,.63 i"

respe%ti/e +ear of ,663< ,664< ,66&< ,660 a"# ,664 so the %o-pa"+ a%hie/e# -a9i-$- *et$r" o" e8$it+ ratio i",660.

<arning per share ratio:

Profit after ta9 EPS G N$-ber of share o$tsta"#i"g

T/?-< '!%% 7ear ,663 ,664 ,66& ,660 ,664 P/T &,&4 20( ,3204632 40640440 (244046 3&&2(36 ;o of e, shares 4(4( 06 4(4( 06 (00&2406 (46(42&0 (20(36 ( 8atioL 2.30 36.4, &.3 6.36(4 &. 24

>So$r%eC A""$al *eports?

7arnings 30 31 -0 -1 20 21 0 1 31./26.33 21.31.4 0.32 er Share

Percentage

20.2264

-113

-11/

-110 ear 7arnings er Share

-113

-114

I;.<8<;C<: Ear"i"g per share ratio 1as 2.30< 36.4,< &.3 < 6.36 a"# &. -a9i-$- ear"i"g per share ratio i" ,664.

i"

respe%ti/e +ear of ,663< ,664< ,66&< ,660< a"# ,664 so the %o-pa"+ a%hie/e#

6.
fi"#i"gs are fo$"#.

FINDINGS

O" the o/erall e/al$atio" at ea%h a"# e/er+ aspe%t< the follo1i"g

Li8$i#it+ ratios ha/e %o"ti"$o$sl+ go"e $"#er /ario$s fl$%t$atio"s i" the last fi/e +ears. Do1 e/er the ratios are -ore tha" the i"#$str+ sta"#ar#. This i"#i%ates e9%ess %ash is -ai"tai"e# i" the orga"i@atio". Le/erage ratios are as per the i"#$str+ "or- of 3C a"# it is -ore or less is -ai"tai"e# stea#il+ i" &+ears. T$r"o/er ratios are also i" li"e 1ith the sta"#ar#s. Altho$gh a "et profit ratio has bee" -ai"tai"e# %o"sta"tl+ i" the last three +ears ie ,663< ,664< ,66& it has sho1" stea#+ i-pro/e-e"t i" the "e9t , +ears. *et$r" o" i"/est-e"ts >*O!? a"# *et$r" o" e8$it+ >*OE? ha/e #e%li"e# #rasti%all+ #$ri"g the last t1o +ears.

7.
of -+ e"8$ir+ a"# i"/estigatio"s.

Suggestions

The %o-pa"+ has a goo# re%or# of 8$alit+ of goo#s i" the -ar'et 1ith best

The+ sho$l# see that the #ebtors sho$l# be %olle%te# 1ith i" a spe%ifie# ti-e b+ the %o-pa"+. So< that the+ %a" #is%harge so-e of its %re#itors or %$rre"t liabilities a"# a/oi# pa+-e"t of i"terest. *atio a"al+sis are i--e"sel+ helpf$l i" -a'i"g a %o-parati/e of the fi"a"%ial state-e"t for se/eral +ears. The %o-pa"+ fi"a"%ial positio" is /er+ se%$re. !t is obser/e# that -ost of the ratios are as per the i"#$str+ sta"#ar#. Co-pa"+ a#opts proper i"/e"tor+ %o"trol te%h"i8$es to properl+ -a"age-e"t i"/e"tor+.

BIBLOGRAPHY
!.M Pa"#e+< ,664< 3!NANC!AL MANAGEMANT< 2 th E#itio"< Ei'as p$blishi"g Do$se pri/ate Li-ite#< Ne1 Delhi. Prasa""a Cha"#ra ,66,< 3!NANC!AL MANAGEMENT< &th E#itio"< TATAB M%Gra1 D!LL< Ne1 Delhi. S.P. Pai"< K.L Nara"g< ,663< ADEANCED ACCO)NTANCH< EOL)ME !! < 3thE#itio"< Kal+a"i p$blishers< L$#hia"a.

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