Session :- 2025-26

Accountancy
Project

Ratio Analysis

Name – Pranjal Rao

Class – XII-C
Roll number –
School – Salwan Public School Gurugram

Acknowedgement
I would like to express my sincere gratitude to my
Accountancy teacher(Ms.Anshu Modi) for her valuable
guidance, support, and encouragement throughout the
completion of this project. I am also thankful to my
school(Salwan Public School, Gurugram) for providing me
with the necessary resources and a conducive
environment to work effectively.
I would like to acknowledge the help of my classmates
and family members for their constant motivation and
assistance.
This project has helped me gain practical knowledge and
a better understanding of the topic.

Certificate
This is to certify that Pranjal Rao bearing roll no.
_______________ of class XII has successfully
completed his accountancy project as per the
guidelines of CBSE for the academic year 2025-26.

It is further certified that this project is the

individual and Bonafide word of the individual
candidate.

Index
1. Introduction
 2. Founder
3. Logo
4. Trent ltd. – company profile
5. Board of Directors
6. Objective
7. Period of Study, Source of Material, Tools and analysis used
8. Accounting Ratios
9. Classification of Ratios
10. Financial Statements
11. Current Ration
12. Inventory Turnover Ration
13. Debt Equity Ratio
14. Proprietary Ratio
15. Working Capital Turnover Ration
16. Gross Profit Ratio
17. Return on Investments
18. Operating Profit Ratio
19. Net Profit Ratio
20. Cashflow Statement
21. Bibliography
TRENT LTD

Introduction
Trent Limited, is one of India’s leading organised-retail
companies. Founded in 1998 (originally incorporated as
Lakmé Limited in 1952), Trent was formed after the sale
of Lakmé and launched its first store under the brand
Westside.

Today, Trent operates multiple retail formats across

fashion, lifestyle, ethnic wear, and groceries — including
brands such as Westside (premium fashion & home-
furnishing), Zudio (value-fashion), Utsa (ethnic &
lifestyle), and Star Bazaar (supermarket/grocery).

Through this diversified portfolio, Trent aims to cater to a

wide range of customer needs — from affordable fast
fashion to quality lifestyle products — making it a key
player in India’s organised retail sector.

Founder
Noel N. Tata is an Indian business leader who played a
key role in shaping Trent Limited into one of the country’s
leading retail companies. He became Managing Director
of Trent in 1999 and led the expansion of prominent
brands like Westside and Zudio, focusing on modern,
customer-centric retail formats. Under his leadership,
Trent grew from a small retail venture into a nationwide
network known for affordable fashion and quality
lifestyle products.

LOGO
Trent ltd.
 Formally Trent ltd.
Company Type Public ltd. Company
Traded as NSE : TRENT
BSE : 500251
Industry Retail
Founded Mid 1999
Noel N. Tata
Founder
Headquarters Bombay House, 24 Homi
Mody Street, Fort, Mumbai
Area Served Major cities across India
Key People Noel N. Tata, P. Venkatesalu
Services Retail of apparel, footwear,
accessories, home-
furnishings, lifestyle goods
etc.
Revenue 17,624 crore rupees
Parent Tata Group
Subsidiaries Westside, Zudio, Utsa, Samoh,
Star Bazaar, Booker Wholesale
Website Trentlimited.com

Board of Directors
 Noel Naval Tata (Chairman)

Harish Ramananda Bhat Jayesh Tulsidas Merchant Ravneet Singh Gill

(Non-Executive Director) (Independent Director) (Independent Director)

Hema Ravichandar P.Venkatesalu Kiran Mazumdar Shaw

(Independent Director) (Managing Director) (Independent Director)

Objective
The project is to analyse the financial data of Trent
ltd. And give assessment on the profitability and
liquidity of the company, for the last year on the
basis of the tools of analysis to assess whether the
company will be able to meet its short term
financial oblidation.

Period of Study
 Year 2024-25

Source of material

From official website of trent ltd.

Tools of analysis used

Analytical tool used for the analysis of financial

statement in ‘Accounting Ratio’
 Ratio
Analysis

Accounting Ratios
It is an important subset of financial ratios, are a
group of metrics used to measure the efficiency and
profitability of a company based on its financial
reports. They provide a way of expressing the
relationship between one accounting data point to
another and are the basis of ratio analysis.

An accounting ratio compares two line items in a

company’s financial statements, namely made up of
its income statement. These ratios can be used to
evaluate a company’s fundamentals used and
provide information about the performance of the
company over the last fiscal year.

Classification of Ratios

Liquidity Ratios
Those ratios which are computed to evaluate the
capability of the entity to meet its short term liabilities
are called liquid ratios

Solvency Ratios
These are the ratios which show ability of the enterprise
to make upto its long term liabilities

Activity Ratios
Activity ratios measure how well the resources have been
used by the enterprise

Profitability Ratios
Efficiency in business is measured by profitability ratios
they measure the profitability of the business

Consolidates P&L Statement

Consolidated Balance Sheet

Current Ratio
 Meaning: Indicates the company’s ability to meet its
short-term obligations using current assets. It reflects the
liquidity position and financial health in the near term.

Formula:
Current Ratio=Current Assets/Current Liabilities

Values:
Current Assets = 3673.45
Current Liabilities = 2010.69

Calculation:
3673.45/2010.69=1.83:1

Interpretation:
Strong liquidity position. Trent can comfortably cover its
short-term obligations, which is favorable for creditors
and ensures smooth operational functioning.

Quick Ratio
Meaning: Measures immediate liquidity by considering
only highly liquid assets (excluding inventory). It shows
 the ability to meet current liabilities without relying on
inventory sales.

Formula:
Quick Ratio=Current Assets – Inventories/Current Liabiliti
es

Values:
Current Assets = 3673.45
Inventories = 2045.05
Current Liabilities = 2010.69

Calculation:
3673.45−2045.05/2010.69 = 1628.402010.69 = 0.81:1

Interpretation:
Moderate liquidity. Slightly below the ideal 1:1, but
acceptable for a retail business where a significant
portion of assets is held in inventory.
Debt-Equity Ratio
Meaning: Measures the long-term financial risk by
comparing debt to shareholders’ equity. Lower ratios
indicate less reliance on external borrowings and better
financial stability.

Formula:
Debt-Equity=Total Debt/Shareholders’ Equity

Values:
Total Non-current Borrowings = 499.20
Equity = 5583.36
Calculation:
499.20/5583.36=0.089≈0.09:1

Interpretation:
Very low leverage. Trent relies mostly on its own funds,
indicating strong financial safety and minimal long-term
risk.

Proprietary Ratio
Meaning: Shows the proportion of total assets financed
by owners’ equity. Higher ratios indicate greater financial
stability and lower dependence on external financing.
 Formula:
Proprietary Ratio=Shareholders’ Funds/Total Assets

Values:
Shareholders’ Equity = 5583.36
Total Assets = 9419.64

Calculation:
5583.36/9419.64=0.593≈0.59

Interpretation:
Good financial stability. About 59% of Trent’s assets are
financed by owners, which reduces financial risk and
increases investor confidence.

Interest Coverage Ratio

Meaning: Shows the company’s ability to pay interest on
borrowings from operating profits. Higher ratios indicate
greater safety for lenders and financial strength.
 Formula:
ICR=EBIT/Finance Cost

Values:
EBIT = Profit before tax + Finance cost = 2029.74 + 138.59
= 2168.33
Finance Cost = 138.59

Calculation:
2168.33/138.59=15.64

Interpretation:
Excellent. Trent earns over 15 times its interest
obligation, showing strong profitability and a very safe
position for creditors.

Inventory Turnover Ratio

Meaning: Measures how efficiently inventory is sold or
used during the year. Higher turnover indicates better
inventory management and faster conversion to sales.
Formula:
Inventory Turnover=COGS/Average Inventory
 Values:
Purchases = 10143.39
Change in inventory = –454.25 (negative → inventory
increased)
COGS Calculation:
10143.39−(−454.25)=10597.64
Average Inventory:
2045.05+1582.73/2=1813.89
Final Ratio:
10597.64/1813.89=5.84
Interpretation:
Good. Inventory is sold quickly, indicating efficient stock
management and fast-moving retail operations.

Trade Receivables Turnover Ratio

Meaning: Measures efficiency in collecting receivables.
Higher ratios suggest quick recovery of credit sales and
better liquidity.

Formula:
TR Turnover=Net Credit Sales/Average Trade Receivables

Values:
Net Sales = 17134.61
Average receivables = (62.95 + 81.74) / 2 = 72.35

Calculation:
17134.61/72.35=236.9

Interpretation:
Very efficient. Trent collects receivables extremely fast,
typical for retail businesses with low credit exposure.

Total Asset Turnover Ratio

Meaning: Indicates how effectively the company uses its
assets to generate revenue. Higher ratios reflect better
asset utilization.

Formula:
Total Asset Turnover=Net Sales/Total Assets
 Values:
Net Sales = 17134.61
Total Assets = 9419.64

Calculation:
17134.61/9419.64=1.82

Interpretation:
Good. Trent generates ₹1.82 of revenue for every ₹1
invested in assets, showing efficient use of resources.

Net Profit Ratio

Meaning: Measures the percentage of sales converted
into net profit. Indicates overall profitability and
management efficiency.
Formula:
NP Ratio=Net Profit after Tax/Net Sales×100
 Values:
Net Profit = 1534.41
Sales = 17134.61

Calculation:
1534.41/17134.61×100=8.95%

Interpretation:
Good profitability. Trent earns nearly 9 paise as profit for
every ₹1 of sales, indicating healthy margins for a retail
chain.

Operating Ratio
Meaning: Shows the proportion of operating expenses
and COGS to net sales. Lower ratios indicate better
control over costs and higher efficiency.

Formula:
Operating Ratio=COGS + Operating Expenses/Net Sales×1
00
 Values:
COGS = 10597.64
Operating Expenses = Employee 1308.45 + Depreciation
895.18 + Other 3378.57 = 5582.20
Net Sales = 17134.61

Calculation:
10597.64+5582.20/17134.61×100=94.42%

Interpretation:
Moderate. High due to the retail business structure, but
still acceptable; indicates that a small portion of sales
remains as profit.
Consolidated Cashflow Statement
Bibliography
Trentlimited.com
Wikipedia
The Economic Times
Equity master
Times of India