Liquidity Ratios

Current ratio = Current assets / Current liabilities

Year

Mar 16

Mar 15

Mar 14

Mar
13

Mar
12

Mar
11

Mar
10

Current
Ratio
3.0
2.8
2.4
2.2
2.3
2.3
2.3
The current ratio measures a companys ability to pay off its current
liabilities (payable within one year) with its current assets such as
cash, accounts receivable and inventories. The higher the ratio, the
better the companys liquidity position.

Current Ratio
3.5
3.0
2.5
2.0

Current Ratio

1.5
1.0
0.5
0.0

Comment:
It is seen that the companies Current Ratio is increasing Y-o-Y
basis .

The Company has a high degree of liquidity.

Based on its current ratio, it has Rs 3 of current assets for every

rupee of current liabilities for the FY 2016

Mar
09

1.8

Mar
08

2.5

M
0

Quick Ratio
Quick ratio = (Current assets Inventories) / Current liabilities
= (Cash and equivalents + Marketable securities + Accounts
receivable) / Current liabilities
The quick ratio measures a companys ability to meet its shortterm obligations with its most liquid assets, and therefore
excludes inventories from its current assets. It is also known as
the acid-test ratio.

Year

Mar
16

Quick
Ratio

2.90
4

Mar
15

2.77
4

Mar
14

2.34
7

Mar
13

2.18
2

Mar
12

Mar
11

2.20
2

2.15
4

Mar
10

2.26
2

Mar
09

Mar
08

1.76
5

Quick Ratio
3.500
3.000
2.500
2.000
1.500

Quick Ratio

1.000
0.500
0.000

Comments:

The companies quick ratio points to adequate liquidity even

after excluding inventories, with Rs 2.904 in assets that can be
converted rapidly to cash for every rupee of current liabilities
for the FY 2016

2.43
7

Mar
07

1.59
7

Solvency Ratios
Debt to Equity
Debt to equity = Total debt / Total equity
This ratio indicates the degree of financial leverage being used by
the business and includes both short-term and long-term debt. A
rising debt-to-equity ratio implies higher interest expenses, and
beyond a certain point it may affect a companys credit rating,
making it more expensive to raise more debt.

Year

Debt to
Equity

Mar
16

0.17

Mar
15

0.18

Mar
14

Mar
13

0.1
6 0.25

Mar
12

0.22

Mar
11

0.22

Mar
10

Mar
09

Mar
08

0.31

0.40

0.33 0.03

Debt to Equity
0.45
0.40
0.35
0.30
0.25

Debt to Equity

0.20
0.15
0.10
0.05
0.00

Comments:

Financial leverage of company appears to be at comfortable levels, with debt at

only 17% of equity for the FY 2016

Mar
07

The level of the Debt to Equity is coming down which shows the Debt level of
company is lowering

Debt to Assets
Debt to assets = Total debt / Total assets
Another leverage measure, this ratio measures the percentage
of a companys assets that have been financed with debt
(short-term and long-term). A higher ratio indicates a greater
degree of leverage, and consequently, financial risk.

Mar
16

Year

Debt
to
Asset
s

0.14
1

Mar
15

0.14
9

Mar
14

0.13
4

Mar
13

0.19
9

Mar
12

0.17
7

Mar
11

0.17
8

Mar
10

Mar
09

0.23
8

0.28
6

Mar
08

0.24
8

Debt to Assets
0.350
0.300
0.250
0.200
0.150
0.100
0.050
0.000

Comments:

Debt to Assets

Mar
07

0.02
5

The Debt to Assets ratio of company is at 14.1 % which means

only 14 % of assets are financed by debt.
Since the ratio is coming down drastically is shows the companies debt level
are coming down.

Interest Coverage Ratio

Interest coverage ratio = Operating income (or EBIT) / Interest
expense
This ratio measures the companys ability to meet the interest
expense on its debt with its operating income, which is equivalent to
its earnings before interest and taxes (EBIT). The higher the ratio,
the better the companys ability to cover its interest expense.
Mar 16
(12)

Year

Interest
Coverage
Ratio

5.25

Mar
15
(12)

6.89

Mar
14
(12)

4.30

Mar
13
(12)

3.76

Mar 12
(12)

Mar 11
(12)

2.03

5.01

Mar
10
(12)

8.68

Interest Coverage Ratio

45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00

Interest Coverage Ratio

Comments:
The Interest Coverage Ratio of the company is 5.25 for FY
2016 which shows the companies ability to meet its

Mar 09
(12)

2.73

Mar
08
(12)

3.6

interest expense on its debts with its operating income is

5.25 times
The higher the ratio the better will be the companys
ability to cover its interest expense

Profitability Ratio
Gross Profit Margin

Gross Profit Margin - A company's cost of sales, or cost of goods

sold, represents the expense related to labor, raw materials and
manufacturing overhead involved in its production process. This
expense is deducted from the company's net sales/revenue, which
results in a company's first level of profit, or gross profit. The gross
profit margin is used to analyze how efficiently a company is using
its raw materials, labor and manufacturing-related fixed assets to
generate profits. A higher margin percentage is a favorable profit
indicator.

Year
Gross
Profit
Margin

Mar 16

25.40
%

Mar 15

27.51
%

Mar 14

26.69
%

Mar-13

Mar-12

Mar-11

Mar-10

Mar-09

23.79
%

20.96
%

23.88
%

27.25
%

18.88
%

Mar 0

22.2
%

Gross Profit Margin

30.00%
25.00%
20.00%

Gross Profit Margin

15.00%
10.00%
5.00%
0.00%

Comments:

Gross Profit margin shows how efficiently a company is using its raw
materials, labor and manufacturing-related fixed assets to generate profits.
25.4 % Gross profit Margin shows the company is 25% efficient in using its
resources to generate profit
A higher margin percentage is a favorable profit indicator

Operating Profit Margin

Operating Profit Margin= Operating Profit/Net Sales
Operating Profit Margin - By subtracting selling, general and
administrative (SG&A), or operating, expenses from a company's
gross profit number, we get operating income. Management has
much more control over operating expenses than its cost of sales
outlays. Thus, investors need to scrutinize the operating profit
margin carefully. Positive and negative trends in this ratio are, for
the most part, directly attributable to management decisions.
A company's operating income figure is often the preferred metric
(deemed to be more reliable) of investment analysts, versus its net
income figure, for making inter-company comparisons and financial
projections.
Year

Mar 16

Mar 15

Mar 14

Mar 08
Mar-13

Mar-12

Mar-11

Mar-10

Mar-09

Mar 07

Operating
Profit Margin

26.58
%

28.39
%

27.65
%

24.85
%

22.86
%

24.40
%

27.68
%

19.80
%

22.89
%

25.75
%

Operating Profit Margin

30.00%
25.00%
20.00%
Operating Profit Margin

15.00%
10.00%
5.00%
0.00%

Comments:
The companies operating margin has dipped from 28.39% to
26.58 % in FY 2016.
Higher operating incomes is the real indicator of good
performance of a company
Pretax Profit Margin

Pretax profit Margin= Pretax Profit/Net Sales Revenue

Pretax Profit Margin - Again many investment analysts prefer to
use a pretax income number for reasons similar to those
mentioned for operating income. In this case a company has
access to a variety of tax-management techniques, which allow
it to manipulate the timing and magnitude of its taxable
income.
Year

Pretax
Profit
Margin

Mar 16

23.46
%

Mar 15

25.62
%

Mar 14

24.79
%

Mar-13

Mar-12

Mar-11

Mar-10

Mar-09

21.68
%

18.61
%

21.61
%

24.73
%

16.42
%

Mar 08

Mar 07

19.65
%

23.09
%

Pretax Profit Margin

30.00%
25.00%
20.00%
Pretax Profit Margin

15.00%
10.00%
5.00%
0.00%

Net Profit Margin

Net Profit Margin= Net Income/ Net Sales Revenue
Net Profit Margin - Often referred to simply as a company's profit
margin, the so-called bottom line is the most often mentioned
when discussing a company's profitability. While undeniably an
important number, investors can easily see from a complete profit
margin analysis that there are several income and expense
operating elements in an income statement that determine a net
profit margin. It behooves investors to take a comprehensive look
at a company's profit margins on a systematic basis.
Year

Mar 16

Mar 15

Mar 14

Mar-13

Mar-12

Mar-11

Mar-10

Mar-09

Mar 08

Net Profit
Margin

18.12
%

19.88
%

19.06
%

17.00
%

14.73
%

18.35
%

21.29
%

13.76
%

17.35
%

Net Profit Margin

25.00%
20.00%
15.00%

Net Sales Revenue

10.00%
5.00%
0.00%

Comments:
The companys net profit margin has shown a dip to 18.12%
from 19.88%
This is due the increase in expenses of the company as
compared to the previous year.

Return on Asset
The Return on Assets ratio is an important profitability ratio because
it measures the efficiency with which the company is managing its
investment in assets and using them to generate profit. It measures
the amount of profit earned relative to the firm's level of investment
in total assets. The return on assets ratio is related to the asset
management category of financial ratios.
The calculation for the return on assets ratio is: Net Income/Total
Assets
Yea

Mar 16

Mar 15

Mar 14

Mar 13

Mar 12

Mar 11

Mar 10

Mar 09

Mar

RO
A

16.40
%

19.22
%

21.20
%

17.91
%

15.61
%

18.15
%

20.98
%

ROA

ROA

Comments:

The companys ROA is declining for the past couple of years

which is not a good indicator of profitability performance
The company is not properly managing its assets to generate
profit

Return on Equity
The Return on Equity ratio is perhaps the most important of all the
financial ratios to investors in the company. It measures the return
on the money the investors have put into the company. This is the
ratio potential investors look at when deciding whether or not to
invest in the company.
The calculation is: Net Income/Stockholder's Equity = _____%.

16.63
%

19

In general, the higher the percentage, the better, with some

exceptions, as it shows that the company is doing a good job using
the investors' money.
Yea
r

RO
E

Mar 16

Mar 15

19.31
%

22.78
%

Mar 14

24.76
%

Mar 13

Mar 12

22.60
%

19.18
%

Mar 11

22.65
%

Mar 10

27.54
%

Mar 09

23.30
%

Mar 08

25.79
%

ROE

ROE

Comments:

The ROE of the company is also going down for the past 2
years which shows the companies performance is going down
in the past two years which is not a good sign for the investors

Mar 07

29.86
%