1) Ratio Calculations

(1) Current Ratio

Current ratio=

Current Assets For the year 2006-07 07-08 08-09 09-10 10-11 Current Liabilities For the year 2006-07 = 126,30,67,678 07-08 = 174,60,60,189 08-09 = 290,58,88,347 09-10 = 343,45,13,463 10-11 = 377,52,91,262 = 352,13,50 ,877 = 1160,45,59,068 = 2,755,44,88,321 = 1,168,81,99,772 = 1,209,80,50,111

Current Ratio For the year 2006-07 352,13,50,877 126,30,67,678 = 2.79 : 1

07-08

1160,45,59,068 174,60,60,189

= 6.64 : 1

08-09

2,755,44,88,321 290,58,88,347

= 9.4 : 1

09-10

1,168,81,99,772 343,45,13,463

= 3.4 : 1

10-11

1,209,80,50,111 377,52,91,262

= 3.20 : 1

CURRENT RATIO
10 9 8 V A L U E 7 6 5 4 3 2 1 0
2006-07 2007-08 2008-09 2009-10 2010-11

9.4 6.64 3.4 3.2

2.79

YEAR

Interpretation
The ratio is mainly used to give an idea of the companys ability to pay back its short- term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables) . It indicates the strength of

the working capital. Higher ratio, i.e. more than 2:1 indicates sound solvency position. Lower ratio, i.e. less than 2:1 indicates inadequate working capital. Higher the current ratio, the more capable the company is of paying its obligations. In 2006-07 the company has less value in debtors and loans and advances, due to that the ratio has gone to 2.79 . In 2007-08 the value of current assets is increased by 6.6 due to the increase in the value of debtors, cash and bank balances and loans and advances. In 2008-09 the current ratio again gone up to 9.4 as there is an increase in the value of debtors, cash and bank balances and loans and advances. As compared to 08-09 the value of current assets during 09-10 and 10-11 are reduced because of the decline in the value of debtors ,cash and bank balances and loans and advances but at the same time the value of current liabilities and provisions are increased respectively so that the ratio is gone down to 3.4 and 3.2.

(2) Quick Ratio

Quick Ratio=

Quick Assets Current Liabilities- Bank OD

Quick Assets = Current asset Inventories

For the year 2006-07 = 07-08 = 08-09 = 09-10 = 10-11 = Quick ratio For the year 2006-07

3 52,13,50,877 - 60,59,51,538 = 291,53,99,339 11 60,45,59,068 - 69,10,47,358 = 1,091,35,11,710 2,755,44,88,321 - 59,78,70,259 = 2,695,66,18,062 1168,81,99,772 - 65,90,69,847 = 1,102,91,29,925 1209,80,50,111 - 77,36,95,590 = 1,132,43,54,521

= 2.3 : 1 291,53,99,339 126,30,67,678 = 6.4 : 1

07-08

1,091,35,11,710 174,60,60,189

= 9.2 : 1 08-09 2,695,66,18,062 290,58,88,347

09-10

1,102,91,29,925 343,45,13,463

= 3.2 : 1

10-11

1,132,43,54,521 377,52,91,262

=3:1

QUICK RATIO
10 9 8 7 VALUE 6 5 4 3 2 1 0 2006-07 2007-08 YEAR 2008-09 2009-10 2010-11 2.3 6.4 3.2 3 9.2

Interpretation
The acid-test ratio is far more forceful than the current ratio, primarily because the current ratio includes inventory assets which might not be able to turn to cash immediately. Companies with ratios of less than 1 cannot pay their current liabilities and should be looked at with extreme caution. Furthermore, if the acid-test ratio is much lower than the current ratio, it means current assets are highly dependent on inventory. In the year 06-07 the value of quick assets were decreased as compared to the year 07-08 because of decline in the value of debtors and loans and advances. Increase in the ratio of 6.4 from 2.3 indicates the increase of current assets i.e. debtors and loans and advances during the year 07-08. Due to a huge increase in the value of debtors and loans and advances in 08-09, the quick asset ratio has raised from 6.4 to 9.2. In the year 09-10 and 10-11 value of debtors ,cash and bank

balances and loans and advances reduced and also current liabilities, provisions are increased ,as a result the ratio has declined by 3.2 and 3.

(3) Cash ratio

Cash ratio =

__cash____ Current liabilities

For the year 2006-07

178,07,01,918 126,30,67,678

= 1.41 : 1

07-08
59,13,78,695 174,60,60,189

= .33 : 1

08-09

234,27,56,135 290,58,88,347

= .80 : 1

09-10

63,06,10,937_ 343,45,13,463

= .18 : 1

10-11

178,07,01,918 377,52,91,262

= .47 : 1

CASH RATIO
1.6 1.4 1.2 1 VALUE 0.8 0.6 0.4 0.2 0 2006-07 2007-08 2008-09 YEAR 0.33 1.41 0.8 0.47 0.18 2009-10 2010-11

Interpretation: The cash ratio is perhaps the most stringent measure of liquidity indeed. One can argue that it is overly stringent lack of immediate can may not matter it. The firm can starch its payment or borrow many of short notice cash and bank balance and short term marketable security and liable assets of firm financial analysis looks at cash ratio which is define. Management has to maintain a level of cash ratio so that cash is required urgently they can get it. We can see that Cash ratio in the year 06-07 is very high as compared to next four years. This increase was due to the increase of cash during the year, and at the same time the value of current liabilities was low as compared to next four years. After 06-07 the cash ratio started reducing due to the decrease in the value of cash and increase in current liabilities on the other side. During the year 0910 the ratio was totally decreased by .18 because of a huge increase in the value of current liabilities. In the year 10-11, ratio shows an increase due to a slight change in the value of cash.

(4) Net working capital

Net working capital = current assets current liabilities

For the year 2006-07

= 225,82,83,199

07-08

1160,45,59,068 - 174,60,60,189

= 985,84,98,879

08-09

2,755,44,88,321 - 290,58,88,347

= 2,464,85,99,974

09-10

1168,81,99,772 - 343,45,13,463

= 825,36,86,309

1209,80,50,111 - 377,52,91,262 10-11

= 8322758849

working capital
3 2.5 V 2 A L 1.5 U E 1 0.5 0 0.22 2006-07 2007-08 YEAR 2008-09 2009-10 2010-11 0.98

2.4

0.82

0.83

Interpretation: Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets. In a general sense, the higher the working capital turnover, the better because it means that the company is generating a lot of sales compared to the money it uses to fund the sales..During the year 2006-07 the company has less working capital of .22 as compared to other years. This decline was caused because of the decrease in some current assets i.e. debtors and loans and advances. In the year 2007-08 the ratio is increased to .98 because of increase in sundry debtors, inventory and loans and advances. In 2008-09 company had a higher rate of working capital of 2.4, due to increase in the value of debtors, cash and bank balances and loans and advances. But after the years it shows a decline due to increase in the value of current liabilities.

Inventory ratio

Inventory ratio = inventory____ Current assets

For the year 2006-07

60,59,51,538__ 352,13,50,877 69,10,47,358__ 1160,45,59,068

= .17 : 1

07-08

= .059 : 1

08-09

59,78,70,259__ 2,755,44,88,321
65,90,69,847__ 1168,81,99,772

= .021 : 1

09-10

= .056 : 1

10-11

77,36,95,590__ 1209,80,50,111

= .063 : 1

INVENTORY RATIO
0.18 0.16 0.14 0.12 VALUE 0.1 0.08 0.06 0.04 0.02 0 2006-07 2007-08 0.059 0.021 2008-09 YEAR 2009-10 2010-11 0.056 0.063 0.17

Interpretation: This ratio shows a relation between sales and inventory. It shows the no of time an inventory is converted in to sales over a year. Altogether the inventory turnover ratio means lesser the stock as compare to sales where as lesser the inventory turnover ratio means more inventory in stock. As we can see that in the year 2006-07 ratio is 17 % that is higher than 2007-08 , 2008-09 , 2009-10 & 2010-11 that is 5 % ,2 %,5% respectively and also 2010-11 is 6%. That means investment in inventory is decreasing over the last 4 years. During 2008-09 the company had more sales, as a result they had less stock in inventory.

(8) debt equity ratio Debt equity ratio = total debt_ Net worth

total debt = secured loans + unsecured loans Net worth = share capital + reserve and surplus

For the year 2006-07

10349751545
6624445197

= 1.5 : 1

07-08

14563185206 10129137307 30731345227 12451761952 31531498552 21729150604 29024750714_ 23570664850

= 1.4 : 1

08-09

= 2.4 : 1

09-10

= 1.4 : 1

= 1.2 : 1

10-11

3 2.5 V 2 A L 1.5 U E 1 1.5 0.5 0 2006-07 1.4

Debt Equity Ratio

2.4 1.4 1.2

2007-08

2008-09 YEAR

2009-10

2010-11

Interpretation: In this ratio shareholders fund is the share capital plus reserve and surpluses. In case of high debt equity it would be obvious that the investment of creditors is more than owners. And if it is so high then it brings the firm in a risky position. Or if it is too low it might indicate that the organization has not utilized its capacity of borrowing which must be utilized and that is because the borrowing from outsiders is a good source of fund for business with lower returns in compare to equity. A ratio of 1:1 is

considered safe.
We can see that in above ratio that abans lenders have contributed more funds than owners. In the years 2006 -07,07-08, 08-09, 09-10, & 10-11 ratio are 1.51, 1.4, 2.4, 1.4, and 1.2 respectively. it shows the company is utilizing more funds from lenders and so that they pays lower return as compared to equity. During the year 2008- 09 ratio is again increased by 2.4, because the company had raised more secured loans as compared to other years. But after the year 2008-09 it shows that the ratio is started decreasing. During the year 10-11 the ratio is declined by 1.2 because the company has increased their networth (equity and reserve and surplus).

Net Profit Margin

Net Profit Margin = _PAT_ sales

For the year 2006-07

_99,59,56,351__ 4953198397 159,10,12,018 6579205727 259,76,17,145__

= .20 : 1

07-08

= .24 : 1

08-09

10050132197
280,44,31,597__

= .25 : 1

09-10

10001762969 2339494122__ 11907429212

= .28 : 1

10-11

= .19 : 1

Net Profit Margin

0.24 0.2

0.25

0.28 0.19

Interpretation: The net profit margin is indicate of managements ability to operate the business with sufficient success not only to recover from revenues of the period, the cost of merchandise or services, the expenses of operating the business and the cost of the borrowed funds, but also to leave a margin of reasonable compensation to the owners for providing their capital at risk. The ratio of net profit to sales essential expresses the cost price effectiveness of the operation. In 2006-07 companys profit was 20 % and till 2009-10 also they maintain this profit margin. But in the year 2010-11 the net profit margin has gone down to 19 % due to increase in sales.