Ratio Analysis

4.1. Current Ratio

Current Ratio =

Current Assets, Loan and Advances

---------------------------------------------Current liabilities & Provisions

Year
2007 08
2008 09

Current Asset
9097.41
16074.53

Current liabilities
1014.45
1674.84

Current Ratio
8.97
9.60

2009 10
2010 11
2011 12

19626.76
22460.82
25357.96

2576.61
4681.67
6830.13

7.62
4.80
3.71

Interpretation :
Here in this current ratio was high during the period 2008 - 09 , and decreases during
the year 2011 - 12 .

4.2. Quick ratio / Liquid ratio / Near Money Ratio

Current Ratio =

Current Assets, Loan and Advances - Inventories

------------------------------------------------------------Current liabilities & Provisions - Bank over due

Year
2007 08
2008 09

Current Asset
9097.41 56.65
16074.53 0.67

Current liabilities
1014.45
1674.84

Quick Ratio
8.91
9.60

2009 10
2010 11
2011 12

19626.76 1.27
22460.82 3.64
25357.96 4.27

2576.61
4681.67
6830.13

7.62
4.80
3.71

Interpretation :
Here in this Quick ratio was high during the period 2008 - 09, and decreases during the
year 2011 - 12.

4.3. Absolute liquidity ratio

Absolute liquidity ratio

Current Assets (Inventory + Debtors)

--------------------------------------------------Current Liability and provisions

Year
2007 08
2008 09

Current Asset
9037.27
16071.38

Current liabilities
1014.45
1674.84

Quick Ratio
8.90
9.60

2009 10
2010 11
2011 12

19621.50
22452.40
25349.06

2576.61
4681.67
6830.13

7.61
4.79
3.71

Interpretation :
Here in this Absolute liquidity ratio was high during the period 2008 - 09 , and
decreases during the year 2011 - 12.

CAPITAL STRUCTURE AND LEVERAGE RATIO

4.4. Longterm Debt to Shareholders Networth Ratio

Long term Debt

--------------------------------------------------Share holders Networth

Year

Long term debt

Ratio

8257.41
15099.44

Shareholders
Networth
1086.41
1816.62

2007 08
2008 09
2009 10
2010 11
2011 12

20476.62
18715.60
20143.36

2316.64
3842.38
4904.39

8.84
4.87
4.11

7.60
8.31

Interpretation :
Here in this Long term debt was high during the period 2009 - 10 , and decreases
during the year 2011 - 12 .

4.5. Capital gearing Ratio

Fixed interests Fund

--------------------------------------------------Equity share holders fund

Fixed Interest bearing fund = Preference share capital + Debentures

Year

Fixed Interest

Ratio

857.41
15699.44

Equity share
holders fund
204.18
245.64

2007 08
2008 09
2009 10
2010 11
2011 12

20476.62
18715.60
20143.36

249.07
233.16
229.73

82.21
80.27
87.68

40.44
61.47

Interpretation :
Here in this Capital gearing ratio was high during the period 2011 - 12 , and decreases
during the year 2007 - 08.

4.6. Debt Equity Ratio

Outsiders Fund / External Equity

--------------------------------------------------Shareholders Fund / Internal Equity

Outsiders Fund
Share holders Fund

=
=

Debentures
Preference & Equity share capital + General
Reserve + Profit & Loss

Year
2007 08
2008 09

Outside Fund
8257.41
15099.44

Share holders fund

1086.41
1816.36

Ratio
7.60
8.31

2009 10
2010 11
2011 12

20476.62
18715.60
20143.36

2316.64
3842.38
4904.39

8.84
4.87
4.11

Interpretation :
Here in this Debt Equity ratio was high during the period 2009 - 2010 , and decreases
during the year 2011 - 2012.

4.7. Proprietary Ratio

Year

Shareholders Networth
------------------------------------Total Assets
Total Assets

Ratio

2007 08
2008 09

Share holders
Networth
1086.41
1816.36

11058.27
18590.64

0.10
0.10

2009 10
2010 11
2011 12

2316.64
3842.38
4904.39

25369.87
27236.65
31877.88

0.10
0.14
0.15

Interpretation :
Here in this Proprietary ratio was high during the period 2011 - 12 , and decreases
during the year 2007 - 2010.

4.8. Current Assets to Networth Ratio

Current Assets
------------------------------------Networth

Year
2007 08
2008 09

Current Assets
9097.41
16074.53

Networth
1086.41
1816.36

Ratio
8.37
8.85

2009 10
2010 11
2011 12

19626.76
22460.82
25357.96

2316.64
3842.38
4904.39

8.47
5.84
5.17

Interpretation :
Here in this current assets on networth was high during the period 2008 - 2009 , and
decreases during the year 2011 12.

Assets management Rato (or) Turnover Ratio (or) Performance (or) Activity Ratio
4.9. Inventory Turnover ratio

Sales
------------------------------------Ending Inventory

Year
2007 08
2008 09

Sales
1396.35
2439.06

Ending Inventory
56.65
0.67

Ratio
24.65
3640.39

2009 10
2010 11
2011 12

3692.43
4439.71
5259.71

1.27
3.67
4.27

2907.65
1219.70
1231.78

Interpretation :
Here in this Inventory turnover ratio was high during the period 2008 - 09 , and
decreases during the year 2007 - 2008 .

4.10. Inventory Ratio

Inventory
------------------------------------- x 100
Current Assets

Year
2007 08
2008 09

Inventory
56.65
0.67

Current Assets
9097.41
16074.53

Ratio
0.62
0.01

2009 10
2010 11
2011 12

1.27
3.64
4.27

19626.76
22460.82
25357.96

0.01
0.02
0.02

Interpretation :
Here in this Inventory was high during the period 2007 - 08 , and decreases during the
year 2008 2010.

4.11. Profitability Ratio

Gross profit ratio

Gross profit
= ------------------------------------- x 100
Sales

Year
2007 08
2008 09

Gross profit
1025
1939.51

Sales
1396.35
2439.06

Ratio
73.41
79.52

2009 10
2010 11
2011 12

2938.71
3586.34
4131.71

2439.06
4439.71
5259.71

79.59
80.78
78.55

Interpretation :
Here in this Gross profit was high during the period 2010 - 11 , and decreases during
the year 2007 - 08 .

4.12. Net profit ratio :

Net profit ratio

Net profit
------------------------------------- x 100
Sales

Year
2007 08
2008 09

Net profit
190.41
389.82

Sales
1396.35
2439.06

Ratio
13.64
15.98

2009 10
2010 11
2011 12

612.40
582.30
1229.88

3692.43
4439.71
5259.71

16.58
13.50
23.38

Interpretation :
Here in this net profit was high during the period 2011- 12 , and decreases during the
year 2010 - 11.

4.13. Operating Profit Ratio :

Operating profit ratio

Operating profit
= ------------------------------------- x 100
Sales

Year
2007 08
2008 09

Operating profit
1018.74
1898.34

Sales
1396.35
2439.06

Ratio
72.96
77.83

2009 10
2010 11
2011 12

2907.35
3494.72
3943.77

3692.43
4439.71
5259.71

78.74
78.71
74.98

Interpretation :
Here in this Operating profit was high during the period 2009 - 10, and decreases
during the year 2007 - 08 .

4.14. Cash Profit Ratio :

Cash profit ratio

Cash profit
------------------------------------- x 100
Sales

Cash profit = Net profit + Depreciation

Year
2007 08
2008 09

Cash profit
202.25
426.88

Sales
1396.35
2439.06

Ratio
14.48
17.50

2009 10
2010 11
2011 12

652.81
888.08
1240.70

3692.43
4439.71
5259.71

17.68
20
23.59

Interpretation :
Here in this cash profit was high during the period 2011 - 12 , and decreases during the
year 2007 - 08 .

4.15. Return on Total Assets :

Return on Total Assets

Year

Net profit After Tax

= ------------------------------------- x 100
Total Assets

Total Assets

Ratio

2007 08
2008 09

Net profit After

Tax
190.41
389.82

11058.27
18590.64

1.72
2.10

2009 10
2010 11
2011 12

612.40
873.12
1229.88

25369.87
27236.35
31877.88

2.41
3.20
3.86

Interpretation :
Here in this Return on total assets was high during the period 2011 - 12 , and decreases
during the year 2007 - 08 .

4.16. Return on Shareholders fund :

Year
2007 08
2008 09
2009 10
2010 11
2011 12

Net profit After

Tax
190.41
389.82
612.40
873.12
1229.88

Net profit after interest and tax

------------------------------------- x 100
Net worth

Net worth

Ratio

1086.41
1816.36
2316.64
3842.38
4904.39

17.53
21.46
26.43
22.72
25.08

Interpretation :
Here in this return on share holders fund was high during the period 2009 - 10, and
decreases during the year 2007 -08.

4.17. Expenses ratio :

Expenses ratio

Year
2007 08
2008 09
2009 10
2010 11
2011 12

Expenses
= ------------------------------------- x 100
Net sales

Expenses
390.52
554.63
792.42
913.30
1297.94

Net Sales
1396.35
2439.06
3692.43
4439.71
5259.71

Ratio
27.97
22.74
21.46
20.57
24.68

Interpretation :
Here in this Expenses was high during the period 2007-08 , and decreases during the
year 2010 - 11 .

4.18. Interest cover :

Interest cover

Year
2007 08
2008 09
2009 10
2010 11
2011 12

Profit before depreciation & Taxes

--------------------------------------------- x 100
Interest

Profit
1023.28
1939.65
2938.72
3591.33
4143.79

Interest
723.92
1296.62
1977.67
2246.79
2271.96

Ratio
1.41
1.49
1.49
1.60
1.82

Interpretation :
Here in this Profit was high during the period 2011 - 2012 , and decreases during the
year 2007 - 2008 .

4.19. Total Assets Turnover Ratio :

Total Assets Turnover Ratio

Year
2007 08
2008 09
2009 10
2010 11
2011 12

Sales
1396.35
2439.06
3692.43
5259.71

Sales
----------------- x 100
Total Assets

Total Assets
11058.27
18590.64
25369.87
27236.65
31877.88

Ratio
0.13
0.13
0.41
0.15
0.16

Interpretation :
Here in this Sales was high during the period 2009 - 10 , and decreases during the year
2007 - 2009

4.20. Total Assets to Networth :

Total Assets to Networth

Year
2007 08
2008 09
2009 10
2010 11
2011 12

Total Assets
11058.27
18590.64
25369.87
27236.65
31877.88

Total Assets
-------------------------- x 100
Networth

Networth
1086.41
1816.36
2316.64
3842.38
4904.39

Ratio
10.18
10.23
10.95
7.09
6.50

Interpretation :
Here in this Total assets was high during the period 2009 - 10 , and decreases during
the year 2011 - 12 .

4.21. Return on Equity :

Return on Equity = Net profit margin x total turnover assets to networth

Year
2007 08
2008 09
2009 10
2010 11
2011 12

Return on Equity = Net profit margin x

total turnover assets to networth
13.64 x 0.13 x 10.18
15.98 x 0.13 x 10.23
16.58 x 0.14 x 10.95
19.67 x 0.16 x 7.09
23.38 x 0.16 x 6.50

Ratio
18.05
21.25
25.42
22.31
24.31

Interpretation :
Here in this return on equity was high during the period 2009-10 , and decreases during
the year 2007-08 .

4.21. Return on Equity :

Return on Investment

Year
2007 08
2008 09
2009 10
2010 11
2011 12

Operating profit
= -------------------------- x 100
Capital Employed

Operating Profit
1005.83
1884.43
2900.01
3526.41
3961.77

Capital employed
10196.86
17186.08
23225.97
23320.51
26298.04

Ratio
9.86
10.96
12.49
15.12
15.06

Interpretation :
Here in this Operating profit ratio was high during the period 2010 - 2011 , and
decreases during the year 2007 - 2008.

4.2. TREND ANALYSIS

4.2.1. Current Assets:
Year

2007

2008

2009

Current

1396.35

2439.06

3692.43

2010

2011

4439.71

5259.71

Assets

Year

Current Assets

X2

XY

(Rs)
2007 - 2008

1396.35

-2

-2792.71

2008 - 2009

2439.06

-1

-2439.06

2009 - 2010

3692.43

2010 - 2011

4439.71

4439.71

2011 - 2012

5259.71

10519.42

X2=10

XY=9727.37

N=5

Y=17227.26

A=Y/N

B=XY/X2

=17227.26 / 5

= 9727.37 / 10

= 3445.45

= 972.74

The force the trend equation is:

(i) Forecasted value of Current Assets for the period 2012
Y=a+bx
= 3445.45 + (972.74 x 5)
= 3445.45 + 4863.70
= 8309.15

(ii) Forecasted value of Current Assets for the period 2013

Y=a+bx
= 3445.45 + (972.74 x 6)
= 3445.45 + 5836.44
= 9281.89

(iii) Forecasted value of Current Assets for the period 2014

Y=a+bx
= 3445.45 + (972.74 x 7)
= 3445.45 + 6809.18
= 10254.63
(iv) Forecasted value of Current Assets for the period 2015
Y=a+bx
= 3445.45 + (972.74 x 8)
= 3445.45 + 7781.92
= 11227.37

Interpretation
The table shows the linear trend analysis of future Current assets value for the
period 2012 to 2015. By using the formula y= a+bx, the forecasted value of Current assets
for the Period.

Estimated Current Assets

Year
(Rs)
2012

8309.15

2013

9281.89

2014

10254.63

2015

11227.37

4.2.2. Net profit:

Year

2007

2008

2009

2010

2011

Current

190.41

389.82

612.40

873.12

1229.88

Assets

Net Profit (Rs)

X2

XY

2007 - 2008

190.41

-2

-380.82

2008 - 2009

389.82

-1

-389.82

2009 - 2010

612.40

2010 - 2011

873.12

873.12

2011 - 2012

1229.88

2459.76

Year

N=5

Y=3295.63

X2=10

XY=2562.24

A=Y/N

B=XY/X2

=3295.63 / 5

= 2562.24 / 10

= 659.13

= 256.22

The force the trend equation is:

(i) Forecasted value of Net profit for the period 2012
Y=a+bx
= 659.13 + (256.22 x 5)
= 659.13 + 1281.10
= 1940.23
(ii) Forecasted value of Net profit for the period 2013
Y=a+bx
= 659.13 + (256.22 x 6)
= 659.13 + 1537.22
= 2196.35

(iii) Forecasted value of Net profit for the period 2014

Y=a+bx
= 659.13 + (256.22 x 7)
= 659.13 + 1793.54
= 2452.67
(iv) Forecasted value of Net profit for the period 2015
Y=a+bx
= 659.13 + (256.22 x 8)
= 659.13 + 2049.76
= 2708.89

Interpretation
The table shows the linear trend analysis of future Net profit value for the period
2012 to 2015. By using the formula y= a+bx, the forecasted value of Net profit for the
Period.

Estimated Net profit

Year
(Rs)
2012

1940.23

2013

2196.35

2014

2452.67

2015

2708.89

4.2.3. Total Income:

Year

2007

2008

2009

Current

1415.52

2494.14

3731.13

2010

2011

4499.64

5429.65

Assets

Total Income (Rs)

X2

XY

2007 - 2008

1415.52

-2

-2831.04

2008 - 2009

2494.14

-1

-2494.14

2009 - 2010

3731.13

2010 - 2011

4499.64

4499.64

2011 - 2012

5429.65

10859.30

Year

N=5

Y=17570.08

X2=10

XY=10859.30

A=Y/N

B=XY/X2

=17570.08 / 5

= 10033.76 / 10

= 3514.02

= 1003.38

The force the trend equation is:

(i) Forecasted value of Total Income for the period 2012
Y=a+bx
= 3514.02 + 1003.38 x 5)
= 3514.02 + 5001.90
= 8515.92
(ii) Forecasted value of Total Income for the period 2013
Y=a+bx
= 3514.02 + 1003.38 x 6)
= 3514.02 + 6002.28
= 9516.30

(iii) Forecasted value of Total Income for the period 2014

Y=a+bx
= 3514.02 + 1003.38 x 7)
= 3514.02 + 7002.66
= 10516.68
(iv) Forecasted value of Total Income for the period 2015
Y=a+bx
= 3514.02 + 1003.38 x 8)
= 3514.02 + 8003.04
= 11517.06

Interpretation
The table shows the linear trend analysis of future Total Income value for the
period 2012 to 2015. By using the formula y= a+bx, the forecasted value of Total Income
for the Period.

Estimated Total Income

Year
(Rs)
2012

8515.92

2013

9516.30

2014

10516.68

2015

11517.06

4.2.4. Total Expenses:

Year

2007

2008

2009

2010

2011

Current

390.52

554.63

792.42

913.30

1297.94

Assets

Year

Total Expenses

X2

XY

(Rs)
2007 - 2008

390.52

-2

-781.04

2008 - 2009

554.63

-1

-554.63

2009 - 2010

792.42

2010 - 2011

913.30

913.30

2011 - 2012

1297.94

2595.88

N=5

Y=3948.81

X2=10

XY=2173.51

A=Y/N

B=XY/X2

= 3948.81 / 5

= 2173.5 / 10

= 789.76

= 217.35

The force the trend equation is:

(i) Forecasted value of Total Expenses for the period 2012
Y=a+bx
= 789.76 + (217.35 x 5)
= 789.76 + 1086.75
= 1876.51
(ii) Forecasted value of Total Expenses for the period 2013
Y=a+bx
= 789.76 + (217.35 x 6)
= 789.76 + 1304.10
= 2093.86
(iii) Forecasted value of Total Expenses for the period 2014
Y=a+bx
= 789.76 + (217.35 x 7)
= 789.76 + 1521.45
= 2311.21
(iv) Forecasted value of Total Expenses for the period 2015
Y=a+bx
= 789.76 + (217.35 x 8)
= 789.76 + 1738.80
= 2528.56

Interpretation
The table shows the linear trend analysis of future Total Expenses value for the
period 2012 to 2015. By using the formula y= a+bx, the forecasted value of Total Expenses
for the Period.

Estimated Total Expenses

Year
(Rs)
2012

1876.51

2013

2093.86

2014

2311.21

2015

2528.56

4.2.5. Total Assets:

Year

2007

Current

2008

11058.27

2009

18590.64

25369.87

2010

2011

27239.65

31877.88

Assets

Total Assets (Rs)

X2

XY

2007 - 2008

11058.27

-2

-22116.54

2008 - 2009

18590.64

-1

-18590.64

2009 - 2010

25369.87

2010 - 2011

27239.65

27239.65

2011 - 2012

31877.88

63755.76

Year

N=5

Y=114136.31

X2=10

XY=50288.23

A=Y/N

B=XY/X2

= 114136.31 / 5

= 50288.23 / 10

= 22827.26

= 5028.82

The force the trend equation is:

(i) Forecasted value of Total Assets for the period 2012
Y=a+bx
= 22827.26 + (5028.82 x 5)
= 22827.26 + 25144.10
= 47971.36
(ii) Forecasted value of Total Assets for the period 2013
Y=a+bx
= 22827.26 + (5028.82 x 6)
= 22827.26 + 30172.92
= 53000.18
(iii) Forecasted value of Total Assets for the period 2014
Y=a+bx
= 22827.26 + (5028.82 x 7)
= 22827.26 + 35201.74
= 58029
(iv) Forecasted value of Total Assets for the period 2015
Y=a+bx
= 22827.26 + (5028.82 x 8)
= 22827.26 + 40230.56
= 63057.82

Interpretation
The table shows the linear trend analysis of future Total assets value for the period
2012 to 2015. By using the formula y= a+bx, the forecasted value of Total Assets for the
Period.

Estimated Total Assets

Year
(Rs)
2012

47971.36

2013

53000.18

2014

58029

2015

63057.82