Professional Documents
Culture Documents
CONTENTS
1.
Introduction
2.
Ratio Analysis
3.
1.
Introduction
Ratio Analysis
5
2.
Ratio Analysis
1.
Activity ratios measure how quickly a firm converts non-cash assets to cash assets.
a. Average collection period = Accounts receivable / (Annual credit sales / 365 days) b. Average payment period = Accounts payable / (Annual credit purchases / 365 days)
Inventory Turnover
A ratio showing how many times a company's inventory is sold and replaced over a period. Inventory Turnover = Sales/Inventory Inventory Turnover = Cost of goods sold/Average inventory
Asset Turnover
The amount of sales generated for every ruppee's worth of assets. Asset Turnover = Revenue / Assets
3.
4.
Liquidity ratios measure the availability of cash to pay debt a. Current ratio = Current assets / Current liabilities
measures a company's ability to pay short-term obligations
3.
Ratio Analysis
BRITANNIA
HUL
P&G
18525 14576
1.3
7299 6839
1.1
6797
2742
2.5
3.
Ratio Analysis
BRITANNIA
HUL
P&G
29.7 0.6
5.2 1.4
2737.1 0
52
D/E Ratio
3.
Ratio Analysis
BRITANNIA
HUL
P&G
63 5.79
28
13.04
53 6.89
24
15.21
32 11.41
6 60.83
18 20.28
11 33.18 6
3.
Ratio Analysis
BRITANNIA
HUL
P&G
2.96 38217
4.91 16366
75.48 100285
17.65
8777
5.
The short term operating activities of the firm & their impact on cash & working capital
15
5.
THE OPERATING CYCLE & THE CASH CYCLE - Short Term Operating Activities :
1
2
Buying raw-material
Paying cash & purchases
4 5
15
Net working capital (NWC) NWC refers to the difference between current assets and current liabilities. NWC can be positive or negative.
Positive NWC = CA > CL Negative NWC = CA < CL
28
29
30
31
5.
DABUR
5.
P&G
HUL
74.87
+ 16.22 -
217.87
= -126.78 days
P&G
21.55
+ 22.39 -
72.42
= -28.48 days
DABUR
7.59
+ 18.31 -
10.11
= 15.85 days
BRITANNI A
26.07
+ 3.87 -
31.48
= -1.54 days
18