chapter 7 analysis of variance (anova) of various...

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CHAPTER 7

ANALYSIS OF VARIANCE (ANOVA) OF VARIOUS RATIOS

FOR THE PLASTIC INDUSTRY OF GUJARAT, AMONG THE

COMPANIES DURING THE PERIOD OF STUDY

7.1 Introduction Suppose we have m companies under study and have values on a particular composite

ratio (which is useful for studying a particular aspect of performance of a company)

for n years’ period, then on the basis of that particular ratio one would like to study (i)

the difference or variation in that particular aspect of performance (for which the ratio

under study is useful to study) among the m companies over the entire period and (ii)

the difference or variation in performance of plastic industry of Gujarat among the n

years.

In order to study the difference or variation in performance among the companies

during different years under study on the basis of a particular ratio, it is necessary to

carry out ANOVA for the respective composite ratio of the company during the period

of study. In other words if R1, R2, ........, Rn are the values of a particular composite

ratio for the companies under study for the n years period then one-way ANOVA on

these n values of composite ratios provide us the variation in the performance of the

plastic industry in Gujarat on the basis of that particular ratio for the n years period.

Just as we study the difference or variation in the performance of a particular aspect of

plastic industry in Gujarat during the period of n years on the basis of a ratio, we can

also study the difference in performance among the companies strength on the basis

of analysis values of the composite ratios of a particular company for the period under

study. In other words, if R1, R2,...............,Rm are the values of a particular composite

ratios of n companies for the period under study then one-way ANOVA on these

values of that ratios will help us in studying the difference in performance of a

particular aspect among the m companies for the period under study.

In the sections to follow, the ANOVA for the first of above two aspects the difference

or variation in that particular aspect of performance (for which the ratio under study is

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useful to study) among the 15 companies over the entire period of ten years have been

carried out.

7.2 Liquidity Ratios The following liquidity ratios have been studied:

(1) Current ratio

(2) Quick ratio

7.2.1 Current Ratio

ANOVA for Composite Current Ratios among the companies under study (for

the decade) and among the years of the decade (for the companies).

In this subsection ANOVA for composite current ratios among the companies under

study (for a decade) has been carried out on the basis of the data on composite current

ratios furnished in the following table no. - 7.2.1.1

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Table no. - 7.2.1.1 (Composite Current Ratios) Composite Current Ratios based on Weighted Mean where weight (wi) are Paid-up capital & Ri are Current Ratios

WiRi Company 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08 2008-

09 2009-

10 ∑(wiRi) ∑wi wei. R W

JBF 13.0284 15.82 16.7508 61.798 21.4038 53.41 50.0296 86.2634 180.496 160.579 659.579 445.02 1.48213 44.502 Sintex - 17.7632 10.6288 10.0464 14.784 28.6085 28.2114 58.3848 72.981 45.4104 286.819 199.98 1.43424 22.22 Nilkamal 14.6547 24.7673 23.3961 27.5754 21.7678 24.1674 10.0261 9.4579 12.0132 10.9908 178.817 98.33 1.81854 9.833 INEOS ABS 16.0069 15.1274 17.4141 17.4141 18.1177 20.2285 20.756 20.4044 23.0429 20.9321 189.444 175.9 1.077 17.59 Essel Propack 101.4 53.664 51.2008 55.7496 59.1948 30.0672 30.3804 34.1388 27.5616 75.4812 518.838 312.86 1.65837 31.286 Plastiblend - 5.135 4.68 6.63 7.02 7.93 5.33 6.5 9.295 8.06 60.58 65 0.932 7.22222 Gopala 25.6824 3.6408 7.3136 7.3136 10.8642 9.2441 9.1492 8.3752 70.3076 70.8586 222.749 85.27 2.61228 8.527 Shaily - - - - 5.529 5.0634 4.7142 4.656 4.2456 6.0756 30.2838 37.92 0.79862 6.32 Shree Ram 62.275 38.69 20.935 20.67 3.18 4.13 16.5088 9.528 11.4336 16.5152 203.866 286.76 0.71093 28.676 Acrysil 1.799 1.799 2.1074 2.1331 2.1331 2.0817 2.0817 2.187 2.919 3.2967 22.5377 26.49 0.8508 2.649 Jagdamba - - - - 1.144 1.0824 0.7744 2.5608 1.2584 2.4024 9.2224 5.28 1.74667 0.88 Gujarat Craft 2.8612 2.799 6.4377 5.6291 6.8109 5.5836 15.7988 9.3922 11.3204 10.0453 76.6782 31.1 2.46554 3.11 Polylink 7.9361 5.8545 6.505 25.8899 7.1555 10.5468 9.1509 71.6562 44.979 40.0158 229.69 142.6 1.61073 14.26 Promact - 4.7241 6.0273 5.8644 16.0728 14.5524 7.1791 22.134 17.6421 2.604 96.8002 58.62 1.65132 6.51333 Ashish 12.274 11.696 12.512 11.662 24.752 29.852 27.064 27.88 30.804 25.364 213.86 34 6.29 3.4 ∑WjRj 257.918 201.48 185.909 258.376 219.93 246.548 237.155 373.519 520.299 498.631 2999.76 5999.53 1.80928 ∑Wj 160.25 169.99 170.01 170.11 183.73 208.46 218.31 237.99 239.8 239.94 wei R 1.60947 1.18525 1.09352 1.51887 1.19703 1.18271 1.08632 1.56947 2.16972 2.07815 1.40137 W 16.025 13.0762 13.0777 13.0854 12.2487 13.8973 14.554 15.866 15.9867 15.996

where, weighted wiwiRiR / nwiW / n = no. of years

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The summary of ANOVA based on the data given in 7.2.1.2 is as follows. For this

ANOVA the H0 and H1 are as follows.

H0= There is no significant difference in Current Ratios of 15 companies.

H1= There is significant difference in Current Ratios of 15 companies.

Table no. - 7.2.1.2 (Summary of statistics for ANOVA)

Groups Count Sum Average Variance

JBF 10 659.5792 65.95792 3626.077

Sintex 9 286.8185 31.86872 502.3632

Nilkamal 10 178.8167 17.88167 50.15643

INEOS ABS 10 189.4441 18.94441 6.264058

Essel Propack 10 518.8384 51.88384 547.2819

Plastiblend 9 60.58 6.731111 2.330205

Gopala 10 222.7493 22.27493 682.1699

Shaily 6 30.2838 5.0473 0.439298

Shree Ram 10 203.8656 20.38656 319.8298

Acrysil 10 22.5377 2.25377 0.228676

Jagdamba 6 9.2224 1.537067 0.563474

Gujarat Craft 10 76.6782 7.66782 16.18188

Polylink 10 229.6897 22.96897 504.3649

Promact 9 96.8002 10.75558 47.68497

Ashish 10 213.86 21.386 68.01853

Table no. - 7.2.1.3 (ANOVA)

Source of Variation SS Df MS F P-value F crit

Between Groups 42834.66 14 3059.619 6.678367 0.00 1.772316

Within Groups 56809.2 124 458.1387

Total 99643.86 138 Table no.-7.2.1.2 shows descriptive statistics related to the ANOVA. Table no. -7.2.1.3

gives sum of square, degree of freedom and mean sum of square for between

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companies and within companies. For testing the hypothesis by ANOVA procedure, F

– test is applied. In the ANOVA table the calculated value of F – test with

corresponding p – value is given. F value is 6.67 and p – value is 0.00. Here p – value

is less than 0.05. Hence we reject the null hypothesis i.e. there is significant difference

in Composite Current Ratio among the selected 14 companies.

Conclusion

It is found that the composite current ratio of the industry was 1.81 during the

decade for company wise comparison, which is near to the ideal level.

The highest composite current ratio during the decade was 6.29 for the Ashish

Polyplast followed by Gopala 2.61, Polylink 2.47, and Gujarat Craft 2.47

which was unnecessarily too high.

The lowest composite current ratio during the decade was 0.71 for Shree Ram

Multitech followed by Shaily 0.80, Acrysil 0.85, Plastiblend 0.93. The current

ratios of these companies were below 1 which is considered low and risky in

terms of current assets and may create financial crisis for short term expenses.

There is no significant difference in composite current ratios of selected

companies during decade.

All the companies having composite current ratios above 2 and below 1

belonged to small and mid-cap group except Shree Ram Multi-tech.

Out of the selected companies the composite current ratios of 4 companies

were higher than 1.81 and 11 companies were lower than 1.81.

7.2.2 Quick Ratio

ANOVA for Composite Quick Ratios among the companies under study (for a

decade under study) and among the years of the decade (for the companies).

In this subsection ANOVA for Composite Quick Ratios of 15 companies under study

(for the decade) has been carried out on the basis of data on Quick Ratios given from

the following table no. - 7.2.2.1

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Table no. - 7.2.2.1 (Composite Quick Ratio) Composite Quick Ratio based on Weighted Mean where weight (Wi) are Paid-up capital & Ri are ratios

WiRi

Company 2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10 ∑(wiRi) ∑w wei R W

JBF 70.72 30.71 22.95 14.58 25.75 62.72 68.52 87.5 62.24 46.06 491.75 445.02 1.10501 44.502 Sintex 30.28 21.11 18.49 15.87 23.1 43.99 40.53 81.63 77.04 90.82 442.86 199.93 2.21508 19.993 Nilkamal 26.05 17.4 15.08 17.23 17.4 18.25 23.22 27.22 26.07 26.45 214.37 98.33 2.18011 9.833 Ineos ABS 11.26 10.91 9.85 11.61 12.14 15.3 13.72 13.9 16.01 18.29 132.99 175.9 0.75605 17.59 Essel 146.33 54.89 60.57 70.47 56.38 34.45 43.54 97.09 146.26 132.48 842.46 312.86 2.69277 31.286 Plastiblends 9.04 7.61 5.85 6.11 6.96 5.59 7.15 7.67 6.63 7.09 69.7 65 1.07231 6.5 Gopala 21.22 33.69 26.19 27.56 36.5 34.98 52.22 60.28 48.6 46.84 388.08 85.27 4.55119 8.527 Shaily - - - - 8.5 15.31 13.03 11.17 14.42 14.49 76.92 37.92 2.02848 6.52 ShreeRam 104.94 71.29 172.25 34.72 54.59 12.09 7.37 9.85 13.66 18.1 498.86 286.76 1.73964 28.676 Acrysil 4.5 4.5 4.27 4.34 5.94 6.19 4.75 4.4 4.27 3.77 46.93 26.49 1.77161 2.649 Jagdamba - - - - 0.65 0.78 0.42 2.04 1.02 1.8 6.71 5.28 1.27083 0.88 Guj Craft 3.76 2.79 3.05 3.08 4.57 6.28 11.66 4.76 4.39 4.2 48.54 31.1 1.56077 3.11 Polylink 11.71 22.64 24.2 18.34 14.7 38.93 51.8 47.93 33.97 28.23 292.45 142.6 2.05084 14.26 Promact 4.18 7.65 7.87 9.45 10.53 13.79 8.46 18.16 13.87 104.42 198.38 58.62 3.38417 5.862 Ashish 36.31 72.28 15.78 16.99 18.77 22.88 19.31 17.95 20.84 20.13 261.24 34 7.68353 3.4 ∑WjRj 480.3 357.47 386.4 250.35 296.48 331.53 365.7 491.55 489.29 563.17 2.40416 ∑Wj 166.74 169.99 170.01 170.11 183.73 208.46 218.31 237.99 239.8 239.94 wei R 2.88053 2.10289 2.27281 1.47169 1.61367 1.59038 1.67514 2.06542 2.04041 2.34713 2.00601 W 12.8262 13.0762 13.0777 13.0854 12.2487 13.8973 14.554 15.866 15.9867 15.996


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H0= There is no significant difference in Quick Ratio of 15 companies.

H1= There is significant difference in Quick Ratio of 15 companies.



JBF 10 491.75 49.175 605.0375

Sintex 10 442.86 44.286 811.339

Nilkamal 10 214.37 21.437 22.81765

Ineos ABS 10 132.99 13.299 6.973166

Essel 10 842.46 84.246 1857.432

Plastiblends 10 69.7 6.97 1.027267

Gopala 10 388.08 38.808 160.2854

Shaily 6 76.92 12.82 6.5956

ShreeRam 10 498.86 49.886 2875.096

Acrysil 10 46.93 4.693 0.588223

Jagdamba 6 6.71 1.118333 0.429057

Guj Craft 10 48.54 4.854 6.771782

Polylink 10 292.45 29.245 186.8936

Promact 10 198.38 19.838 898.8986

Ashish 10 261.24 26.124 296.2508


Source of Variation SS df MS F P-value F crit

Between Groups 68960.402 14 4925.743 8.988089 0.000000 1.770392897

Within Groups 69599.817 127 548.0301

Total 138560.22 141 Above table no. - 7.2.2.2 shows descriptive statistics related to the ANOVA. Table no.

- 7.2.2.3 gives sum of square, degree of freedom and mean sum of square for between


– test is applied. In ANOVA table calculated value of F – test with corresponding p –

value is given. F value is 8.988 and p – value is 0.000. Here p – value is less than 0.05.

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Hence the given hypothesis is rejected i.e. there is significant difference in Composite

fixes assets turnover among selected companies.

Conclusion

It is found that the composite quick ratio of the industry during the decade for

company wise comparison was 2.4 for the industry which is high in terms of

liquidity.

The highest composite quick ratio was 7.68 for Ashish Polyplast, followed by

Gopala 4.55, Promact 3.38, Essel Propack 2.68. It indicate high level of

liquidity and it needs to be controlled.

The lowest composite quick ratio was 0.76 for INEOS ABS, followed by

Plastiblends 1.01, JBF 1.1. The quick ratio below 1 indicates liquidity risk of

liquid assets.

Out of selected companies the composite quick ratios of 4 companies were

higher than 2.4 and that of 11 companies were having lower than 2.4.

The companies having the composite quick ratios more than 1 were Ashish,

Gopala, Promact and Essel Propack which belonged to small and mid-cap

segment.

11 companies quick ratios were in the range of (1 to 2).

7.3 Profitability ratios The following profitability ratios have been studied:

1. Gross Profit Margin Ratio

2. Net Profit Margin Ratio

3. Operating Profit Margin Ratio

4. Return on Capital Employed Ratio

5. Return on Net Worth Ratio

6. Earning per Share Ratio

7.3.1 Gross Profit Margin Ratio ANOVA for Composite Gross Profit Margin Ratios among the companies under

study (for the decade).

In this sub section ANOVA for Composite Gross Profit Margin Ratios of 15

companies under study (for the decade) have been carried out on the basis of data on

Gross Profit Margin Ratio given from the following table no. - 7.3.1.1

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Table no. - 7.3.1.1 (Composite Gross Profit Margin)

Composite gross profit margin ratios based on weighted mean where weights (Wi) are paid up capital and Ri are ratios WiRi

Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑w wei R W

JBF 4.963 251.262 292.519 419.390 316.404 546.350 565.552 593.294 621.155 473.646 4084.535 445.020 9.178 44.502 Sintex - 176.467 184.766 192.338 281.450 299.107 395.407 478.161 492.757 397.882 2898.335 185.370 15.635 20.597

Nilkamal 86.643 108.753 93.670 94.441 76.016 63.847 43.279 93.805 79.492 114.764 854.710 98.330 8.692 9.833 INEOS 206.507 277.570 265.083 - - - - - - - 749.160 52.770 14.197 17.590 Essel 1116.024 1052.688 1190.731 1183.583 1139.422 978.750 785.519 713.783 497.988 488.905 9147.392 312.860 29.238 31.286

Plastiblends - 111.800 117.065 124.215 93.535 88.205 72.280 67.730 55.900 49.595 780.325 58.500 13.339 6.500 Gopala 18.401 22.724 -4.898 3.004 31.830 48.412 4.180 -2.204 -43.088 26.228 104.590 85.270 1.227 8.527 Shaily - - - - 43.941 63.147 65.533 47.084 16.909 55.412 292.027 37.920 7.701 6.320

Shree Ram 977.320 876.620 -165.625 -1816.310 582.205 481.735 -4102.437 -578.350 -448.451 -1486.637 -5679.929 286.760 -19.807 28.676 Acrysil 14.341 26.394 31.328 27.319 26.060 32.202 34.130 44.204 62.090 59.489 357.557 26.490 13.498 2.649

Jagdamba - - - - 6.846 9.891 12.003 9.073 10.305 8.518 56.637 5.280 10.727 0.880 Gujarat craft 12.222 13.218 11.072 8.055 14.928 8.084 9.206 16.296 19.780 17.385 130.244 31.100 4.188 3.110

Polylink -94.973 -81.573 -2.472 27.321 8.847 92.129 21.714 16.286 -28.228 12.408 -28.541 142.600 -0.200 14.260 Promact - 21.774 40.399 44.635 42.300 -104.365 -120.370 41.924 -36.131 25.194 -44.639 53.140 -0.840 5.904 Ashish 34.476 34.170 21.624 12.478 15.708 15.764 16.150 9.826 5.406 12.138 177.740 34.000 5.228 3.400 ∑WjRj 2375.923 2891.868 2075.263 320.469 2679.492 2623.258 -2197.854 1550.912 1305.883 254.928 7.467 ∑Wj 140.250 166.990 170.010 152.520 171.140 190.870 200.720 219.800 222.210 222.350

wei R 16.941 17.318 12.207 2.101 15.657 13.744 -10.950 7.056 5.877 1.147 8.110 W 14.025 12.845 13.078 12.710 12.224 13.634 14.337 15.700 15.872 15.882


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H0 = There is no significant difference in Gross Profit Margin Ratio of 15 companies.

H1 = There is significant difference in Gross Profit Ratio of 15 companies.



JBF 10 4084.5354 408.45354 37433.4

Sintex 9 2898.335 322.037222 15460.54

Nilkamal 10 854.7096 85.47096 443.5191

INEOS 3 749.1598 249.719933 1439.527

Essel 10 9147.392 914.7392 74963.42

Plastiblends 9 780.325 86.7027778 737.7024

Gopala 10 104.5895 10.45895 635.3147

Shaily 6 292.0266 48.6711 314.6078

Shree Ram 10 -5679.9294 -567.99294 2441175

Acrysil 10 357.5567 35.75567 230.4961

Jagdamba 6 56.6368 9.43946667 3.046479

Gujarat craft 10 130.2443 13.02443 16.35134

Polylink 10 -28.5411 -2.85411 2955.407

Promact 9 -44.6391 -4.9599 4343.124

Ashish 10 177.74 17.774 94.38935



Between Groups 13097394 14 935528.142 4.719934 0.0000 1.777190142

Within Groups 23190324.5 117 198207.901

Total 36287718.5 131 Above table no. – 7.3.1.2 shows descriptive statistics related to the ANOVA. Table no.

- 7.3.1.3 gives sum of square, degree of freedom and mean sum of square for between

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value is given. F value is 4.719 and p – value is 0.000. Here p – value is less than

0.05. Hence the given hypothesis is rejected i.e. there is significant difference in

Composite Gross Profit Margin Ratios among selected companies.

Conclusion

It is found that the composite gross profit margin ratio was 7.5 for the industry

during the decade.

The highest composite gross profit ratio was 29.24 for Essel Propack and the

lowest was -19.8 for Shree Ram Multi-Tech.

Out of selected companies the composite gross profit ratio of 9 companies

were higher than 7.5 and 6 companies were having lower than 7.5.

All the companies having gross profit margin ratio less than 7.5 belong to

small and mid-cap segment.

Shree Ram Multitech was having most negative gross profit margin ratio

suffering from over capitalization.

9 companies have the gross profit margin ratios in the range of (7 to 29). And 6

have the ratios in the range of (-19 to 5).

7.3.2 Operating Profit Margin Ratio: ANOVA for Composite Operating Profit Margin Ratios among the companies

under study (for the decade).

In this sub section ANOVA for Composite Operating Profit Margin ratios of 15

companies under study (for the decade) has been carried out on the basis of Operating

Profit Margin ratios given from following table no. - 7.3.2.1

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Table no. - 7.3.2.1 (Composite Operating Profit Margin Ratios) Composite operating profit margin ratios based on weighted mean where weights (Wi) are paid up capital and Ri are ratios

WiRi

Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑w wei R W JBF 242.576 469.643 429.007 548.434 382.166 603.680 640.053 725.481 756.838 617.421 5415.299 445.020 12.169 44.502 Sintex - 251.888 269.214 253.490 328.390 340.737 439.740 562.494 582.226 510.867 3539.046 185.430 19.086 20.603 Nilkamal 124.779 141.834 111.667 103.526 83.643 68.560 55.876 132.145 124.094 154.510 1100.634 98.330 11.193 9.833 INEOS ABS 240.455 297.271 268.248 - - - - - - - 805.974 52.770 15.273 17.590 Essel Propack 1143.480 1216.488 1198.224 1223.986 1136.916 970.920 841.882 767.653 690.606 699.689 9889.843 312.860 31.611 31.286 Plastiblend - 119.730 114.725 113.750 92.040 77.935 69.745 77.415 67.990 60.288 793.618 58.500 13.566 6.500 Gopala 47.560 54.787 23.965 21.680 56.322 73.190 66.512 23.473 -20.056 -7.714 339.718 85.270 3.984 8.527 Shaily - - - - 99.289 107.379 101.210 79.327 60.464 93.476 541.145 37.920 14.271 6.320 Shree Ram 1299.560 1248.680 396.175 581.145 636.795 442.795 -2603.084 627.895 795.588 -17.468 3408.081 286.760 11.885 28.676 Acrysil 23.747 35.723 37.368 38.036 41.531 44.847 43.304 58.455 73.835 76.359 473.203 26.490 17.863 2.649 Jagdamba - - - - 3.564 13.042 17.829 14.098 13.781 10.416 72.729 5.280 13.774 0.880 Gujarat Craft 29.887 30.913 27.990 -0.622 21.241 12.720 15.084 20.899 24.756 23.481 206.349 31.100 6.635 3.110 Polylink 108.634 98.746 155.860 86.777 23.524 126.251 87.942 62.040 26.212 104.693 880.678 142.600 6.176 14.260 Promact 59.621 75.911 74.880 71.622 -71.350 -33.286 -39.906 71.936 -1.237 64.254 272.444 58.620 4.648 5.862 Ashish 41.072 40.732 26.588 15.538 18.768 16.762 17.918 16.184 11.968 17.850 223.380 34.000 6.570 3.400 ∑WjRj 3361.372 4082.346 3133.910 3057.359 2852.840 2865.532 -245.898 3239.495 3207.064 2408.121 12.580 ∑Wj 145.680 169.990 170.010 152.520 168.140 190.870 200.720 220.400 222.210 222.350 wei R 23.074 24.015 18.434 20.046 16.967 15.013 -1.225 14.698 14.433 10.830 15.628 W 13.244 13.076 13.078 12.710 12.010 13.634 14.337 15.743 15.872 15.882


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H0 = There is no significant difference in Operating Profit Margin Ratios of 15

companies.

H1 = There is significant difference in Operating Profit Margin Ratios of 15

companies.


Groups Count Sum Average Variance JBF 10 5415.299 541.5299 25796.836

Sintex 9 3539.046 393.22731 17777.021

Nilkamal 10 1100.634 110.06342 1031.9972

INEOS 3 805.9738 268.65793 807.13228

Essel Pro. 10 9889.843 988.98428 48910.202

Plastiblend 9 793.618 88.179778 514.38228

Gopala 10 339.7179 33.97179 970.28878

Shaily 6 541.1445 90.19075 302.43437

Shree Ram 10 3408.081 340.80812 1220708.9

Acrysil 10 473.2032 47.32032 289.04994

Jagdamba 6 72.7288 12.121467 23.243528

Guj. Craft 10 206.3485 20.63485 90.687168

Polylink 10 880.6776 88.06776 1726.4723

Promact 10 272.4441 27.24441 3303.0455

Ashish 10 223.38 22.338 109.16981



Between Groups 9973293 14 712378.05 7.0781901 0.0000 1.776457963

Within Groups 11876003 118 100644.1

Total 21849296 132 Above table no. – 7.3.2.2 shows descriptive statistics related to the ANOVA. Table no.

-7.3.2.3 gives sum of square, degree of freedom and mean sum of square for between

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corresponding p – value is given. F value is 7.078 and p – value is 0.00. Here p –

value is less than 0.05. Hence the given hypothesis is rejected i.e. there is significant

difference in Composite Operating Profit Margin Ratios among the selected

companies.

Conclusion

It is found that the composite operating profit margin ratio of the industry

during the decade was 12.58.

The highest composite operating profit margin ratio was 31.61 for Essel

Propack, followed by Sintex 19.08, Acrysil 17.86 and INEOS ABS 15.27. All

these companies belong to large size group except Acrysil India Ltd. It

indicates healthy ratios and efficient management.

The lowest composite operating profit margin ratio among the companies was

3.98 for Gopala Ployplast, followed by Promact 4.64, Ashish 6.57, Gujarat

Craft 6.64. All these companies belong to small and mid-cap segment, these

companies need to reduce the cost of production and to raise the sales.

Out of the selected companies the composite operating profit margin ratio 7

companies were higher than 12.58 and 8 companies have less than 12.58.

The composite operating profit margin ratio was in the range between (4 to

31).

7.3.3 Net Profit Margin Ratio: ANOVA for Composite Net Profit Margin Ratios among the companies under


In this sub section ANOVA for Composite Net Profit Margin Ratios among the

companies under study (for the decade) has been carried out on the basis of the data

on composite net profit margin ratios furnished in the following table no. - 7.3.3.1

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Table no. - 7.3.3.1 (Composite Net Profit Margin Ratios) Composite Net Profit Margin ratios based on weighted mean where weights (Wi) are paid up capital & Ri are ratios

WiRi Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑w wei R W

JBF 242.576 469.643 429.007 548.434 382.166 603.680 640.053 725.481 756.838 617.421 5415.299 445.020 12.169 44.502 Sintex - 251.888 269.214 253.490 328.390 340.737 439.740 562.494 582.226 510.867 3539.046 185.430 19.086 20.603 Nilkamal 124.779 141.834 111.667 103.526 83.643 68.560 55.876 132.145 124.094 154.510 1100.634 98.330 11.193 9.833 INEOS ABS 240.455 297.271 268.248 - - - - - - - 805.974 52.770 15.273 17.590 Essel Propack 1143.480 1216.488 1198.224 1223.986 1136.916 970.920 841.882 767.653 690.606 699.689 9889.843 312.860 31.611 31.286 Plastiblend - 119.730 114.725 113.750 92.040 77.935 69.745 77.415 67.990 60.288 793.618 58.500 13.566 6.500 Gopala 47.560 54.787 23.965 21.680 56.322 73.190 66.512 23.473 -20.056 -7.714 339.718 85.270 3.984 8.527 Shaily - - - - 99.289 107.379 101.210 79.327 60.464 93.476 541.145 37.920 14.271 6.320 Shree Ram 1299.560 1248.680 396.175 581.145 636.795 442.795 -2603.084 627.895 795.588 -17.468 3408.081 286.760 11.885 28.676 Acrysil 23.747 35.723 37.368 38.036 41.531 44.847 43.304 58.455 73.835 76.359 473.203 26.490 17.863 2.649 Jagdamba - - - - 3.564 13.042 17.829 14.098 13.781 10.416 72.729 5.280 13.774 0.880 Gujarat Craft 29.887 30.913 27.990 -0.622 21.241 12.720 15.084 20.899 24.756 23.481 206.349 31.100 6.635 3.110 Polylink 108.634 98.746 155.860 86.777 23.524 126.251 87.942 62.040 26.212 104.693 880.678 142.600 6.176 14.260 Promact 59.621 75.911 74.880 71.622 -71.350 -33.286 -39.906 71.936 -1.237 64.254 272.444 58.620 4.648 5.862 Ashish 41.072 40.732 26.588 15.538 18.768 16.762 17.918 16.184 11.968 17.850 223.380 34.000 6.570 3.400 ∑WjRj 3361.372 4082.346 3133.910 3057.359 2852.840 2865.532 -245.898 3239.495 3207.064 2408.121 12.580 ∑Wj 145.680 169.990 170.010 152.520 168.140 190.870 200.720 220.400 222.210 222.350 wei R 23.074 24.015 18.434 20.046 16.967 15.013 -1.225 14.698 14.433 10.830 15.628 W 13.244 13.076 13.078 12.710 12.010 13.634 14.337 15.743 15.872 15.882


120



H0 = There is no significant difference in Net Profit Ratio of 15 companies.

H1 = There is significant difference in Net Profit Ratio of 15 companies.



JBF 10 1618.1138 161.8114 29840.63

Sintex 9 1937.106 215.234 15242.85

Nilkamal 10 363.8414 36.38414 629.1384

INEOS ABS 10 1125.4082 112.5408 1937.828

Essel Propack 10 4370.2592 437.0259 17423.73

Plastiblend 9 609.558 67.72867 415.0934

Gopala 10 -151.4793 -15.1479 586.3143

Shaily 6 74.5008 12.4168 410.5448

Shree Ram 10 -24549.73 -2454.97 11025160

Acrysil 10 175.6976 17.56976 198.2484

Jagdamba 6 21.34 3.556667 1.779336

Gujarat Craft 10 42.5137 4.25137 19.8549

Polylink 10 -363.4833 -36.3483 21344.65

Promact 9 -666.8979 -74.0998 114086.2

Ashish 10 60.18 6.018 26.74111


Source of Variation SS Df MS F P-value F crit

Between Groups 61416970 14 4386926 5.390492 0.00000 1.772315666

Within Groups 100914515 124 813826.7

Total 162331484 138

121

Above table no. – 7.3.3.2 shows descriptive statistics related to the ANOVA. Table no.




value is given. F value is 5.39 and p – value is 0.00. Here p – value is less than 0.05.

Hence the given hypothesis is rejected i.e. there is significant difference in Composite

Net Profit margin Ratios among the selected companies.

7.3.3(A) ANOVA for Composite Net Profit Margin Ratios among the companies

under study (for the decade) when Shree Ram Multi-tech is excluded from the

analysis.

In this subsection ANOVA for composite Net profit Margin ratios among the 14

companies (i.e. after excluding the company Shree Ram Multitech from the analysis

for the reasons given in the section 6.2.2.3 of chapter-VI) has been carried out on the

basis of the data on composite Net Profit margin ratio furnished in the following table

no.7.3.3(A).1

122

Table no. - 7.3.3(A).1 (Composite Net Profit Margin Ratios) Revised Composite Net Profit Margin ratios based on weighted mean where weights (Wi) are paid up capital & Ri are ratios

WiRi

Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑w wei R W JBF -179.606 5.273 34.432 158.522 122.219 290.080 295.827 398.425 196.678 296.262 1321.851 445.020 2.970 44.502 Sintex - 75.130 78.187 92.165 148.949 208.941 256.589 348.417 367.878 360.851 1576.256 185.370 8.503 20.597 Nilkamal 22.368 38.394 35.823 42.250 33.680 18.168 12.770 93.677 8.563 58.149 305.692 98.330 3.109 9.833 INEOS ABS 52.418 133.156 129.287 166.753 69.305 96.041 109.410 51.715 152.505 164.818 960.590 175.900 5.461 17.590 Essel Propack 544.440 487.032 563.209 507.071 527.429 530.248 423.760 356.735 218.300 212.036 4158.223 312.860 13.291 31.286 Plastiblend - 60.775 83.330 90.220 74.685 94.055 63.558 65.260 45.500 32.175 577.383 58.500 9.870 6.500 Gopala 1.640 -11.558 -29.059 -21.288 7.529 16.582 9.972 -34.823 -59.398 -31.076 -120.403 85.270 -1.412 8.527 Shaily - - - - 20.836 27.296 25.375 12.047 -27.304 16.250 58.250 37.920 1.536 6.320 Acrysil 2.570 12.824 11.154 5.962 5.628 11.077 15.549 32.130 41.233 37.571 138.127 26.490 5.214 2.649 Jagdamba - - - - 3.080 2.957 5.614 1.901 4.638 3.150 18.190 5.280 3.445 0.880 Gujarat Craft 2.177 0.249 2.768 0.435 7.309 3.234 15.643 3.732 3.452 3.514 38.999 31.100 1.254 3.110 Polylink -173.814 -169.130 -158.202 -66.871 294.026 35.363 -31.330 1.706 -156.651 61.420 -424.903 142.600 -2.980 14.260 Promact - 43.983 15.584 16.453 18.028 -155.841 -907.885 295.749 -104.420 111.451 -778.349 53.140 -14.647 5.904 Ashish 11.254 16.422 1.870 -0.476 1.292 6.018 7.990 4.012 3.128 8.670 51.510 34.000 1.515 3.400 ∑(wiRi) 283.448 692.550 768.383 991.196 1333.993 1184.219 302.842 1630.683 694.103 1335.242 2.652 ∑Wj 140.240 143.490 143.510 143.610 157.230 178.960 188.830 206.230 208.040 208.180 wei R 2.021 4.826 5.354 6.902 8.484 6.617 1.604 7.907 3.336 6.414 5.347

W 14.025 13.076 13.078 13.085 12.249 13.897 14.554 15.866 15.987 15.996 where, weighted wiwiRiR / nwiW / n = no. of years

Excluding the data of Shree Ram.

123

The summary of ANOVA based on the data given in 7.3.3(A).1 is as follows. For this


H0 = There is no significant difference in Net Profit Ratio of 14 companies.

H1 = There is significant difference in Net Profit Ratio of 14 companies.

Table no.-7.3.3(A).2


Sintex 9 1937.106 215.234 15242.85

Nilkamal 10 363.8414 36.38414 629.1384

INEOS ABS 10 1125.408 112.5408 1937.828

Essel Propack 10 4370.259 437.0259 17423.73

Plastiblend 9 609.558 67.72867 415.0934

Gopala 10 -151.479 -15.1479 586.3143

Shaily 6 74.5008 12.4168 410.5448

Acrysil 10 175.6976 17.56976 198.2484

Jagdamba 6 21.34 3.556667 1.779336

Gujarat Craft 10 42.5137 4.25137 19.8549

Polylink 10 -363.483 -36.3483 21344.65

Promact 9 -666.898 -74.0998 114086.2

Ashish 10 60.18 6.018 26.74111

Table no. - 7.3.3(A).3 (ANOVA)


Between Groups 2180906 13 167762 11.42875 0 1.806181

Within Groups 1688079 115 14678.95

Total 3868985 128

Above table no. – 7.3.3(A).1 shows descriptive statistics related to the ANOVA. Table

no. -7.3.3(A).2 gives sum of square, degree of freedom and mean sum of square for

between companies and within companies. For testing the hypothesis by ANOVA

procedure, F – test is applied. In ANOVA table calculated value of F – test with


124


difference in Composite Net Profit margin Ratios among the selected companies.

Conclusion

Composite net profit margin ratio was (-3.13) during the decade for the

industry in the company wise comparison which is unhealthy.

The highest composite net profit margin ratio was 13.29 for Essel Propack and

the lowest was -84 for Shree Ram Multi-tech.

Out of selected companies the composite net profit margin ratio of 11

companies was negative.

Due to huge loss of Shree Ram Multi-tech, the whole ratio of composite net

profit margin of the industry became negative. It shows the poor picture of the

industry in terms of performance in net profit margin.

Individual performance of the selected companies was very poor in terms of

net profit margin except Essel Propack during the decade.

In comparison to operating profit margin ratio, the net profit margin ratio was

very poor, it indicates that the operating expenses were rising.

The companies having very poor performance, in net profit belong to small

and mid-cap segment.

From revised table we conclude that

The composite net profit margin ratio for revised table was 2.65 during the

decade for the industry.

The highest composite net profit margin ratio was 9.87 for Plastiblends.

Out of selected companies the composite net profit margin ratio of 8

companies was above 2.65.

7.3.4 Return on Capital Employed: ANOVA for Composite Return on Capital Employed ratios among the companies


In this sub section ANOVA for Composite Return on Capital Employed ratios of 15

companies under study (for the decade) has been carried out on the basis of data on

Return on Capital Employed Ratios given from following table no. - 7.3.4.1

125

Table no. - 7.3.4.1 (Composite ratios of Return on Capital Employed) Composite ratios of Return on Capital Employed based on weighted mean where weights (Wi) are paid up capital & Ri ratios


JBF 55.836 247.850 338.118 699.191 598.686 459.130 859.748 1151.834 1152.685 918.662 6481.739 445.020 14.565 44.502 Sintex - 109.928 145.600 162.781 206.606 242.679 336.074 276.789 316.522 168.938 1965.916 185.370 10.605 20.597 Nilkamal 95.898 132.064 99.326 14.998 79.444 69.503 56.476 147.226 159.367 246.398 1100.699 98.330 11.194 9.833 INEOS ABS 290.235 513.628 527.876 - - - - - - - 1331.739 52.770 25.237 17.590 Essel Propack 574.392 274.560 386.191 362.372 348.278 344.520 298.480 236.153 295.661 429.711 3550.318 312.860 11.348 31.286 Plastiblend - 211.835 200.135 217.230 160.680 138.385 113.685 129.155 113.750 102.765 1387.620 58.500 23.720 6.500 Gopala 36.310 54.395 6.399 3.657 84.055 103.877 93.754 -4.298 -93.560 -79.564 205.024 85.270 2.404 8.527 Shaily - - - - 48.131 75.136 80.374 53.544 20.569 73.200 350.955 37.920 9.255 6.320 Shree Ram 368.085 335.755 -21.465 -65.750 -136.740 -184.965 -981.389 304.578 -236.294 -241.376 -859.561 286.760 -2.997 28.676 Acrysil 22.256 48.702 52.325 34.721 25.186 26.522 39.270 65.313 108.248 88.031 510.573 26.490 19.274 2.649 Jagdamba - - - - 12.302 9.319 12.390 9.284 12.408 11.642 67.346 5.280 12.755 0.880 Gujarat Craft 38.875 31.660 41.332 30.167 37.289 30.540 29.047 26.093 32.643 27.150 324.796 31.100 10.444 3.110 Polylink 29.533 6.375 102.389 64.660 51.520 102.056 64.211 69.330 -5.584 31.330 515.819 142.600 3.617 14.260 Promact - 51.585 102.790 85.794 77.595 -62.228 -39.386 33.592 -29.816 19.790 239.717 53.140 4.511 5.904 Ashish 12.478 14.314 6.562 2.788 7.072 9.622 13.260 12.614 7.514 19.482 105.706 34.000 3.109 3.400 ∑WjRj 1523.898 2032.650 1987.579 1612.608 1600.104 1364.097 975.995 2511.206 1854.112 1816.160 17278.406 10.603 ∑Wj 140.250 169.990 170.010 152.520 166.140 190.870 200.720 220.400 222.210 222.350 wei R 10.866 11.957 11.691 10.573 9.631 7.147 4.862 11.394 8.344 8.168 9.463 W 14.025 13.076 13.078 12.710 11.867 13.634 14.337 15.743 15.872 15.882


126



H0 = There is no significant difference in Return on Capital Employed of 15

companies.

H1 = There is significant difference in Return on Capital Employed of 15 companies.



Sintex 9 1965.916 218.4351 6277.363

Nilkamal 10 1100.6993 110.0699 4187.871

INEOS ABS 3 1331.7389 443.913 17763.44

Essel Propack 10 3550.3182 355.0318 9134.195

Plastiblend 9 1387.62 154.18 2030.897

Gopala 10 205.0239 20.50239 4652.865

Shaily 6 350.955 58.4925 508.4298

Shree Ram 10 -859.5612 -85.9561 155779.7

Acrysil 10 510.5727 51.05727 817.1973

Jagdamba 6 67.3464 11.2244 2.298442

Gujarat Craft 10 324.7964 32.47964 25.90814

Polylink 10 515.8191 51.58191 1331.37

Promact 9 239.7165 26.63517 3506.999

Ashish 10 105.706 10.5706 23.06591



Between Groups 4725875.85 14 337562.6 13.20742 0.0000 1.77719014

Within Groups 2990351.64 117 25558.56

Total 7716227.5 131 Above table no. – 7.3.4.2 shows descriptive statistics related to the ANOVA. Table

no.-7.3.4.3 gives sum of square, degree of freedom and mean sum of square for


procedure, F – test is applied. In the ANOVA table the calculated value of F – test

with corresponding p – value is given. F value is 13.207 and p – value is 0.000. Here

127

p – value is less than 0.05. Hence the given hypothesis is rejected i.e. there is

significant difference in Composite Return on Capital Employed among selected

companies.

Conclusion

It is found that the composite ratio of return on capital employed for the

industry during the decade was 10.6.

The highest composite ratio of return on capital employed was 25.24 for

INEOS ABS, followed by Plastiblend 23.72, Acrysil 19.27.

The lowest composite ratio of return on capital employed was -3 for Shree

Ram Multi-tech.

The companies among the poor performance in terms of return on capital

employed were Gopala 2.4, Ashish 3.11, Polylink 3.61, Promact 4.5 belong to

small and mid-cap group except Polylink.

Acrysil even though in small cap group maintained consistency in profitability

ratios.

Out of selected companies the composite ratio of return on capital employed, 8

were higher than 10.6 and 9 were lower than 10.6.

Composite ratio of return on capital employed of selected companies were in

the range of (-2 to 25).

7.3.5 Return on Net worth: ANOVA for composite Return on Net Worth Ratios among the companies under


In this sub section ANOVA for Composite Return on Net Worth ratios of 15


Return on Net Worth given from the following table no. 7.3.5.1

128

Table no. - 7.3.5.1 (Composite ratios of Return on Net Worth) Composite ratios of return on net worth based on weighted mean where weights (Wi) are paid up capital & Ri are ratios

WiRi Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑w wei R W JBF -303.996 10.857 89.648 89.648 482.051 697.760 1132.192 1441.654 761.195 1097.914 5498.922 445.020 0.200 44.502 Sintex - 80.808 95.914 139.922 191.083 399.335 449.367 399.503 442.751 393.016 2591.700 185.370 13.981 20.597 Nilkamal 58.276 104.811 96.241 116.466 90.671 53.048 45.592 352.345 36.806 240.264 1194.521 98.330 12.148 9.833 INEOS ABS 128.231 344.236 321.193 383.110 170.447 251.889 - - - - 1599.107 105.540 15.152 17.590 Essel Propack 540.384 172.536 261.311 220.493 222.059 264.654 233.960 207.652 145.638 180.403 2449.090 312.860 7.828 31.286 Plastiblend - 150.345 184.990 191.230 156.715 170.625 132.730 148.330 100.425 82.550 1317.940 58.500 22.529 6.500 Gopala 5.707 -69.218 -279.027 -297.050 85.198 143.998 79.670 -363.770 -1256.941 -4058.556 -6009.988 85.270 -70.482 8.527 Shaily - - - - 84.739 92.072 34.544 -67.337 67.856 104.603 316.478 37.920 8.346 6.320 Shree Ram 380.915 217.035 513.570 688.205 42446.110 183.950 1991.668 1206.880 141.014 -931.203 46838.144 286.760 163.336 28.676 Acrysil 6.528 45.643 36.109 17.348 13.981 28.527 51.374 106.248 132.303 84.200 522.259 26.490 19.715 2.649 Jagdamba - - - - 9.777 5.544 9.750 4.312 14.590 13.350 57.323 5.280 10.857 0.880 Gujarat Craft 8.242 1.026 12.689 2.519 30.385 20.650 78.030 18.442 17.261 17.323 206.566 31.100 6.642 3.110 Polylink 3952.698 928.524 609.258 215.706 11746.729 310.665 -483.290 32.571 4788.867 -4501.467 17600.261 142.600 123.424 14.260 Promact - -186.249 67.712 9.883 67.549 -404.264 1428.815 2004.299 18259.008 659.789 21906.541 53.140 412.242 5.904 Ashish 6.358 10.268 1.190 -0.442 1.292 5.984 9.656 5.304 4.182 13.260 57.052 34.000 1.678 3.400 ∑WjRj 4783.343 1810.623 2010.798 1777.037 55798.785 2224.439 5194.060 5496.432 23654.956 -6604.556 49.839 ∑Wj 140.190 169.990 170.010 170.110 183.730 208.460 200.720 220.400 222.210 222.350 wei R 34.120 10.651 11.828 10.446 303.700 10.671 25.877 24.938 106.453 -29.703 50.898


129



H0 = There is no significant difference in Return on Net worth of 15 companies.

H1 = There is significant difference in Return on Net worth of 15 companies.



JBF 10 5498.9216 549.8922 327676.5

Sintex 9 2591.69993 287.9667 24623.76

Nilkamal 10 1194.5208 119.4521 10095.82

INEOS 6 1599.1069 266.5178 10238.03

Essel Pro. 10 2449.0902 244.909 12204.91

Plastiblend 9 1317.94 146.4378 1323.604

Gopala 10 -6009.9882 -600.999 1641930

Shaily 6 316.4778 52.7463 4047.781

Shree Ram 10 46838.1442 4683.814 1.77E+08

Acrysil 10 522.2591 52.22591 1776.215

Jagdamba 6 57.3232 9.553867 16.68376

Guj. Craft 10 206.5662 20.65662 482.869

Polylink 10 17600.2612 1760.026 18604447

Promact 9 21906.5412 2434.06 35846367

Ashish 10 57.052 5.7052 19.34882



Between Groups 2.44E+08 14 17428465 1.014264 0.443906201 1.775030638

Within Groups 2.06E+09 120 17183355

Total 2.31E+09 134 Above table no. – 7.3.5.2 shows descriptive statistics related to the ANOVA. Table




with corresponding p – value is given. F value is 1.042 and p – value is 0.4439. Here

p – value is greater than 0.05. Hence the given hypothesis is not rejected i.e. there is

130

no significant difference in Composite Return on Net Worth among selected

companies.

Conclusion

It is found that composite return on net worth ratio for the industry was 49.84.

The highest composite return on net worth ratio was 412.24 for Promact. It was

due to the exceptionally high i.e. 1975.27, return on net worth ratio during

2008-09.

The composite return on net worth ratio for Shree Ram was 163.34. It was also

due to the exceptionally high return on net worth ratio i.e. 1601.74 during

2004-05.

The lowest composite return on net worth ratio was -70.48 for Gopala followed

by Ashish 1.68, Gujarat Craft 6.64 considered very low reward to the owners

capital. These companies belong to small and mid-cap group.

Out of the selected companies 3 companies have the composite return on net

worth ratio higher than 49.84 and 12 companies have lower than 49.84.

Three companies achieved higher performance in terms of return on net worth

belong to large cap segment.

7.3.6 Earning per Share ANOVA for Composite Earning per Share Ratios among the companies under


In this sub section ANOVA for Earning per Share ratios of 15 companies under study

(for the decade) has been carried out on the basis of data on Earning per Share given

from the following table no. 7.3.6.1.

131

Table no. - 7.3.6.1 (Composite Earning per Share Ratios) Composite Earning per Share ratios based on Weighted mean where weight (Wi) are Paid-up capital & Ri are ratios

WiRi

Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑w wei R W

JBF -160.373 5.273 45.289 273.596 292.519 429.240 807.543 1387.041 762.440 1290.235 5132.803 445.020 11.534 44.502 Sintex - 173.410 220.730 325.416 539.246 184.081 261.291 414.911 528.166 541.950 3189.201 185.370 17.205 20.597 Nilkamal 64.704 112.438 113.467 154.517 131.978 78.416 69.417 573.439 60.961 472.349 1831.685 98.330 18.628 9.833 INEOS ABS 73.174 231.836 253.472 388.387 162.883 270.886 349.689 179.594 490.057 700.434 3100.414 175.900 17.626 17.590 Essel Propack 555.672 292.032 448.007 399.643 408.726 459.776 82.058 74.542 54.497 69.217 2844.170 312.860 9.091 31.286 Plastiblend - 53.755 81.900 106.210 104.130 136.565 120.835 159.250 118.300 104.325 985.270 58.500 16.842 6.500 Gopala 3.149 -17.435 48.844 -38.854 10.388 10.292 6.168 -20.938 -33.721 -23.520 -55.627 85.270 -0.652 8.527 Shaily - - - - 10.418 17.751 21.825 8.148 -23.936 21.155 55.360 37.920 1.460 6.320 Shree Ram 216.240 144.425 -299.890 -325.950 -1365.810 -108.560 -386.778 -510.490 -56.533 312.158 -2381.187 286.760 -8.304 28.676 Acrysil 0.925 6.605 6.069 3.161 2.699 5.885 12.156 36.315 73.806 59.044 206.665 26.490 7.802 2.649 Jagdamba - - - - 4.496 2.930 5.658 2.737 10.894 11.449 38.165 5.280 7.228 0.880 Gujarat Craft 0.995 0.124 1.493 0.311 4.012 2.923 11.631 2.861 2.830 3.017 30.198 31.100 0.971 3.110 Polylink -36.298 -29.793 -36.818 -15.612 106.032 9.151 -10.857 0.776 -52.889 12.718 -53.591 142.600 -0.376 14.260 Promact -19.059 7.928 8.525 9.394 -26.227 -65.160 53.447 -18.488 17.317 -9.505 -41.829 53.140 -0.787 5.314 Ashish 0.680 1.122 0.136 -0.035 1.136 0.646 1.088 0.612 0.476 1.564 7.425 34.000 0.218 3.400 ∑WjRj 699.809 981.721 891.224 1280.185 386.625 1434.823 1405.173 2290.307 1952.665 3566.590 6.566 ∑Wj 145.680 169.990 170.010 170.110 183.730 208.460 218.310 237.390 239.800 239.940 wei R 4.804 5.775 5.242 7.526 2.104 6.883 6.437 9.648 8.143 14.865 7.143 W 13.244 13.076 13.078 13.085 12.249 13.897 14.554 15.826 15.987 15.996


132



H0 = There is no significant difference in Earning per Share Ratio of 15 companies.

H1 = There is significant difference in Earning per Share Ratio of 15 companies.



JBF 10 5132.8034 513.2803 284436.7

Sintex 9 3189.2005 354.3556 24042.82

Nilkamal 10 1831.6845 183.1685 33568.88

INEOS 10 3100.4136 310.0414 33127.72

Essel Pro. 10 2844.17 284.417 38227.84

Plastiblend 9 985.27 109.4744 918.65

Gopala 10 -55.6265 -5.56265 697.8254

Shaily 6 55.3602 9.2267 295.2068

Shree Ram 10 -2381.187 -238.119 231649.9

Acrysil 10 206.6653 20.66653 695.806

Jagdamba 6 38.165 6.360833 15.06303

Guj. Craft 10 30.1984 3.01984 10.81845

Polylink 10 -53.5913 -5.35913 1991.241

Promact 10 -41.8291 -4.18291 992.7068

Ashish 10 7.425 0.7425 0.240746



Between Groups 4967661 14 354832.9 7.608118 0.000000 1.771664374

Within Groups 5829840 125 46638.72

Total 10797501 139 Above table no. – 7.3.6.2 shows descriptive statistics related to the ANOVA. Table




with corresponding p – value is given. F value is 7.60 and p – value is 0.000. Here p –

133


difference in Composite Earning per Share ratios among selected companies.

Conclusion

It is found that the composite ratio of earning per share for the industry for

company wise comparison was 6.57.

The highest composite earning per share ratio was 18.63 for Nilkamal,

followed by INEOS ABS 17.63, Sintex 17.20, Plastiblends 16.84. These

companies belong to large size group while Plastiblends belong to mid size

group.

Out of the selected companies the composite earning per share ratio 8 higher

than 6.57 and 7 companies have lower than 6.57.

Companies among the lowest composite earning per ratio was Shree Ram -8.3,

followed by Promact -0.79, Gopala -0.65, Polylink -0.38, Ashish 0.22 were

poor performers in terms of earning per share ratio. Out of these companies

Ashish belong to small cap segment and the rest belong to large size group.

The composite ratio of earning per share was in the range of (-8.3 to 18.63).

7.4 Activity Ratios The following activity ratios have been studied:

1. Inventory Turnover Ratio

2. Debtors Turnover Ratio

3. Fixed Assets Turnover Ratio

4. Investment Turnover Ratio

7.4.1 Inventory Turnover Ratio: ANOVA for Composite Inventory Turnover Ratios among the companies under


In this sub section ANOVA for Composite Inventory Turnover ratios of 15 companies

under study (for the decade) has been carried out on the basis of data on Inventory

Turnover ratios given from following table no. - 7.4.1.1

134

Table no. - 7.4.1.1 (Composite Ratios Inventory Turnover) Composite Inventory Turnover ratio based on Weighted Mean where weight (Wi) are Paid-up capital and Ri are ratios


JBF 666.620 1177.209 857.703 967.204 1398.071 795.270 10044.096 1621.007 689.619 529.040 18745.839 445.020 42.124 44.502 Sintex - 88.379 81.099 102.939 115.500 198.681 175.314 319.495 320.576 359.229 1761.212 185.370 9.501 20.597 Nilkamal 75.930 68.474 58.105 60.933 58.876 70.360 62.818 103.262 109.013 103.262 771.034 98.330 7.841 9.833 INEOS ABS 116.974 158.662 156.903 103.781 143.710 158.838 - - - - 838.867 105.540 7.948 17.590 Essel Propack 323.544 278.304 60.216 428.458 237.092 233.334 220.493 227.383 280.940 432.842 2722.607 312.860 8.702 31.286 Plastiblend - 82.485 58.370 43.095 45.370 45.630 47.125 45.955 49.335 41.535 458.900 58.500 7.844 6.500 Gopala 36.244 121.654 102.913 94.032 136.470 158.865 134.257 149.431 146.015 195.274 1275.155 85.270 14.954 8.527 Shaily - - - - 62.099 52.031 50.576 61.110 73.639 77.738 377.194 37.920 9.947 6.320 Shree Ram 1191.970 172.780 213.325 189.210 164.035 249.570 283.892 215.650 179.126 191.830 3051.390 286.760 10.641 28.676 Acrysil 14.109 17.502 14.443 9.946 9.817 11.925 12.079 18.063 18.537 16.157 142.578 26.490 5.382 2.649 Jagdamba - - - - 9.513 10.877 9.064 8.677 10.894 8.782 57.807 5.280 10.948 0.880 Gujarat Craft 13.175 6.811 9.703 15.395 20.522 36.177 34.814 13.435 20.775 10.823 181.630 31.100 5.840 3.110 Polylink 94.062 117.871 130.100 178.107 168.349 171.696 173.867 184.259 344.942 231.254 1794.507 142.600 12.584 14.260 Promact - 23.621 29.702 28.833 27.150 111.206 63.603 48.760 41.859 30.076 404.810 53.140 7.618 5.904 Ashish 10.302 10.302 9.248 12.274 13.362 17.238 16.830 14.484 16.456 27.642 148.138 34.000 4.357 3.400 ∑WjRj 2542.930 2324.053 1781.830 2234.205 2609.938 2321.697 11328.828 3030.972 2301.728 2255.486 11.082 ∑Wj 140.250 169.990 170.010 170.110 183.730 208.460 200.720 220.400 222.210 222.350 wei R 18.131 13.672 10.481 13.134 14.205 11.137 56.441 13.752 10.358 10.144 17.146


135



H0 = There is no significant difference in Inventory Turnover Ratio of 15 companies.

H1 = There is significant difference in Inventory Turnover Ratio of 15 companies.



JBF 10 18745.8392 1874.584 8357193

Sintex 9 1761.2115 195.6902 12221.61

Nilkamal 10 771.0337 77.10337 407.4342

INEOS 6 838.8671 139.8112 568.8829

Essel Pro. 10 2722.6068 272.2607 11703.86

Plastiblend 9 458.9 50.98889 162.6837

Gopala 10 1275.1548 127.5155 1845.944

Shaily 6 377.1936 62.8656 121.8744

Shree Ram 10 3051.3896 305.139 98448.15

Acrysil 10 142.5778 14.25778 10.60801

Jagdamba 6 57.8072 9.634533 1.02284

Guj. Craft 10 181.6297 18.16297 102.5967

Polylink 10 1794.5073 179.4507 4869.928

Promact 9 404.8101 44.9789 780.896

Ashish 10 148.138 14.8138 28.61769



Between Groups 29956404.77 14 2139743 3.361721 0.000142219 1.775030638

Within Groups 76380270.98 120 636502.3




136




difference in Composite Inventory Turnover ratios among the selected companies.

Conclusion

It is found that the composite inventory turnover ratio for the industry was

11.08.

The highest composite inventory turnover ratio was 42.12 for JBF, followed by

Gopala 14.95, Jagdamba 10.94 and Shree Ram 10.64. These companies belong

to large size group while Jagdamba in a small size group.

The lowest composite inventory turnover ratio was 4.36 for Ashish Polyplast

followed by Acrysil 5.38, Gujarat Craft 5.84, were the poor performers in

inventory turnover ratio. These companies belong to small cap segment.

Out of the selected companies only two companies have the higher inventory

turnover ratio than 11.08 and 13 have lower than 11.08.

The composite inventory turnover ratios were in the range of (4.36 to 42.12).

7.4.2 Debtors Turnover Ratio: ANOVA for Composite Debtors Turnover Ratios among the companies under


In this sub section ANOVA for Composite Debtors Turnover ratios of 15 companies

under study (for the decade) has been carried out on the basis of data on Debtors

Turnover ratios given from following table no. - 7.4.2.1

137

Table no. - 7.4.2.1 (Composite Debtors Turnover Ratios) Composite Debtors Turnover Ratios based on Weighted Mean Where weights(wi) are paid-up capital & Ri are Debt Turnover Ratios

WiRi

Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑wi wei R W

JBF 183.328 214.969 294.07 398.297 451.651 539.98 762.408 791.995 637.96 639.205 4913.86 445.02 11.0419 44.502 Sintex - 61.0064 66.6848 66.6848 92.2152 113.529 137.475 130.014 104.876 92.7129 865.198 185.37 4.66741 20.5967 Nilkamal 45.6781 46.5351 56.9048 71.6452 57.5904 55.7907 66.9317 102.879 97.128 110.547 711.63 98.33 7.23716 9.833 INEOS ABS 79.3309 83.3766 91.9957 93.9306 97.0968 117.501 110.817 130.87 124.01 134.036 1062.96 175.9 6.043 17.59 Essel Propack 242.736 162.864 271.302 300.046 238.345 243.356 246.175 192.305 146.264 170.381 2213.77 312.86 7.07593 31.286 Plastiblend - 31.915 36.27 44.265 49.335 50.57 58.24 51.155 47.775 55.185 424.71 58.5 7.26 6.5 Gopala 11.5128 30.2339 31.0175 33.6948 56.227 52.9868 61.0632 71.1892 72.4014 73.9442 494.271 85.22 5.79994 8.522 Shaily - - - - 19.0314 18.8568 22.4652 24.7932 34.6236 30.0852 149.855 37.92 3.95188 6.32 Shree Ram 841.375 132.5 130.38 91.425 84.27 33.335 18.2776 40.9704 99.7264 108.619 1580.88 286.76 5.5129 28.676 Acrysil 5.14 7.4273 6.7848 8.425 5.0115 4.6003 5.4998 7.398 13.0746 13.2165 76.5778 26.49 2.89082 2.649 Jagdamba - - - - 5.9136 6.9608 8.2896 8.2896 6.9256 5.6584 42.0376 5.28 7.96167 0.88 Gujarat Craft 19.9351 17.5093 23.325 21.3657 15.5811 23.2317 19.1265 18.352 21.2413 22.4231 202.091 31.1 6.4981 3.11 Polylink - - - - 235.741 75.0684 117.876 111.517 - - 540.203 59.54 9.07293 14.885 Promact - 14.3895 11.1858 10.2627 10.1541 16.3986 - 49.6713 - 47.7834 159.845 40.17 3.97922 5.73857 Ashish 0.238 0.306 0.136 0.204 0.204 0.17 0.136 0.17 0.102 0.204 1.87 34 0.055 3.4 ∑WjRj 1429.27 803.032 1020.06 1140.25 1418.37 1352.34 1634.78 1731.57 1406.11 1504 5.93652 ∑Wj 127.24 156.98 157 157.1 183.73 208.46 211.8 237.99 217.78 224.43 wei R 11.2329 5.1155 6.49717 7.25809 7.71985 6.48727 7.71851 7.2758 6.45655 6.70142 7.24631 W 14.1378 13.0817 13.0833 13.0917 13.8973 13.8973 15.1286 15.866 16.7523 16.0307


138



H0 = There is no significant difference in Debtors Turnover Ratio of 15 companies.

H1 = There is significant difference in Debtors Turnover Ratio of 15 companies.



JBF 10 4913.8622 491.3862 47777.65

Sintex 9 865.1984 96.13316 778.9319

Nilkamal 10 711.63 71.163 569.9061

INEOS ABS 10 1062.9637 106.2964 391.9516

Essel Pro. 10 2213.7742 221.3774 2559.432

Plastiblend 9 424.71 47.19 72.40488

Gopala 10 494.2708 49.42708 465.4551

Shaily 6 149.8554 24.9759 39.6601

Shree Ram 10 1580.8786 158.0879 59208.52

Acrysil 10 76.5778 7.65778 9.895523

Jagdamba 6 42.0376 7.006267 1.262626

Gujarat Craft 10 202.0908 20.20908 6.617014

Polylink 4 540.2025 135.0506 4861.754

Promact 7 159.8454 22.83506 318.3225

Ashish 10 1.87 0.187 0.003404



Between Groups 2152357.28 14 153739.8 17.44283 0.0000 1.777935098

Within Groups 1022415.37 116 8813.926

Total 3174772.65 130 Above table no. – 7.4.2.2 shows descriptive statistics related to the ANOVA. Table-

7.4.2.3 gives sum of square, degree of freedom and mean sum of square for between




139


difference in Composite Debtors Turnover among the selected companies.

Conclusion

It is found that the composite debtors turnover ratio for the industry for

company wise comparison was 5.94.

The highest composite debtors turnover ratio was 11.04 for JBF followed by

Polylink 9.07, Jagdamba 7.96 were comparatively good performers.

The lowest composite debtors turnover ratio was 0.055 for Ashish Polymers,

followed by Acrysil 2.89, Promact 3.97 were the poor performers in terms of

debtors turnover ratio.

Out of the selected companies 8 companies have the composite debtors

turnover higher than 5.94 and 7 companies were lower than 5.94.

Companies among poor performers Ashish and Acrysil belong to small size

group while Shaily Engineering and Promact belong to mid-cap group.

The composite debtors turnover ratio of the companies were in the range of

(0.055 to 11.04).

7.4.3 Fixed Assets Turnover Ratio:

ANOVA for Composite Fixed Assets Turnover Ratios among the companies


In this sub section ANOVA for Composite Fixed Assets Turnover ratios of 15


Fixed Assets Turnover ratios given from following table no. - 7.4.3.1

140

Table no. - 7.4.3.1 (Composite Fixed Assets Turnover Ratios) Composite Fixed Assets Turnover Ratio based on Weighted Mean where weight (Wi) are Paid-up capital & Ri are ratios

WiRi

Company 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ∑(wiRi) ∑w wei R W JBF 28.228 29.159 38.465 50.252 68.864 83.300 135.950 146.462 123.858 529.040 1233.578 445.020 2.772 44.502 Sintex - 19.802 21.840 23.587 35.112 39.855 42.989 41.626 32.436 30.814 288.061 185.370 1.554 20.597 Nilkamal 17.482 18.254 22.111 26.396 27.767 31.966 38.308 27.094 27.860 30.672 267.910 98.330 2.725 9.833 INEOS ABS 29.199 35.180 38.522 45.382 45.030 54.001 - - - - 247.315 105.540 2.343 17.590 Essel Propack 43.680 34.320 49.640 60.255 65.459 60.134 56.689 59.508 22.864 28.188 480.736 312.860 1.537 31.286 Plastiblend - 24.700 26.520 29.510 33.475 32.690 28.600 16.510 15.210 18.070 225.285 58.500 3.851 6.500 Gopala 7.938 25.010 28.797 33.891 25.636 20.108 22.513 23.693 21.820 29.313 238.719 85.270 2.800 8.527 Shaily - - - - 5.413 5.995 5.587 4.656 8.052 11.053 40.756 37.920 1.075 6.320 Shree Ram 50.880 7.420 7.550 5.830 3.975 4.720 0.120 9.210 20.008 29.502 139.216 286.760 0.485 28.676 Acrysil 6.913 9.458 9.689 7.607 5.371 5.885 8.712 4.401 5.632 4.544 68.213 26.490 2.575 2.649 Jagdamba - - - - 1.681 1.153 0.519 0.748 0.854 1.197 6.151 5.280 1.165 0.880 Gujarat Craft 11.005 10.730 14.928 18.631 17.323 30.913 24.414 8.335 7.557 7.371 151.206 31.100 4.862 3.110 Polylink 15.482 13.661 18.865 19.515 32.395 33.191 48.546 29.779 24.351 14.890 250.674 142.600 1.758 14.260 Promact - 10.426 12.272 13.195 14.009 3.638 3.841 5.208 5.078 4.427 72.093 53.140 1.357 5.904 Ashish 1.768 1.938 2.074 2.754 3.162 10.506 13.940 8.262 8.364 9.044 61.812 34.000 1.818 3.400 ∑WjRj 212.576 240.056 291.272 336.805 384.672 418.056 430.729 385.492 323.942 748.125 2.178 ∑Wj 140.250 169.990 170.010 170.110 183.730 208.460 200.720 220.400 222.210 222.400 wei R 1.516 1.412 1.713 1.980 2.094 2.005 2.146 1.749 1.458 3.364 1.944 W 14.025 13.076 13.078 13.085 12.249 13.897 14.337 15.743 15.872 15.886


141



H0 = There is no significant difference in Fixed Assets Turnover Ratio of 15

companies.

H1 = There is significant difference in Fixed Assets Turnover Ratio of 15 companies.



JBF 10 1233.5778 123.3578 22257.68

Sintex 9 288.0606 32.00673 76.14929

Nilkamal 10 267.9095 26.79095 39.80682

INEOS 6 247.3154 41.21923 76.69195

Essel Pro. 10 480.7364 48.07364 226.9954

Plastiblend 9 225.285 25.03167 47.82529

Gopala 10 238.7185 23.87185 48.08959

Shaily 6 40.7556 6.7926 5.659611

Shree Ram 10 139.2158 13.92158 243.3728

Acrysil 10 68.2127 6.82127 3.868047

Jagdamba 6 6.1512 1.0252 0.167572

Guj. Craft 10 151.2059 15.12059 61.39014

Polylink 10 250.674 25.0674 120.9508

Promact 9 72.0933 8.010367 19.08216

Ashish 10 61.812 6.1812 19.04492



Between Groups 120051 14 8575.057 4.929425 0.000000 1.775030638

Within Groups 208748 120 1739.565

Total 328799 134 Above table no. – 7.4.3.2 shows descriptive statistics related to the ANOVA. Table


between and within companies. For testing the hypothesis by ANOVA procedure, F –

test is applied. In the ANOVA table the calculated value of F – test with corresponding

p – value is given. F value is 4.92 and p – value is 0.000. Here p – value is less than

142

0.05. Hence the given hypothesis is rejected i.e. there is significant difference in

Composite Fixed Assets Turnover among the selected companies.

Conclusion

It is found that the composite fixed assets turnover ratio for the industry was

2.18.

The highest composite fixed assets turnover ratio was 4.86 for Gujarat Craft,

followed by Plastiblends 3.85.

The lowest composite fixed assets turnover ratio was 0.49 for Shree Ram. It

indicate inefficient use of fixed assets.

Out of the selected companies 7 have the ratios higher than 2.18 and 8 have

lower than 2.18.

The composite fixed assets turnover ratios of the selected companies were in

the range of (0.49 to 4.86).

Shree Ram, Shaily and Jagdamba were among the poor performers.

7.4.4 Investment Turnover Ratio:

ANOVA for Composite Investment Turnover Ratios among the companies under


In this sub section ANOVA for Composite Investment Turnover ratios of 15


Investment Turnover ratios given from following table no. - 7.4.4.1

143

Table no. - 7.4.4.1(Composite Investments Turnover Ratios) Composite Investments Turnover Ratios based on weighted mean where weights (Wi) are paid up capital & Ri are ratios


JBF 992.020 1915.795 1232.735 1481.205 2224.134 1029.000 1213.218 1621.007 689.619 529.040 12927.773 445.020 29.050 44.502 Sintex - 104.978 93.330 115.898 130.838 218.017 199.719 319.495 320.576 359.229 1862.078 185.370 10.045 20.597 Nilkamal 91.785 81.501 68.903 72.245 69.760 82.272 73.531 77.702 109.013 103.007 829.718 98.330 8.438 9.833 INEOS ABS 148.877 202.813 184.343 125.241 178.714 198.239 180.298 234.827 197.712 213.191 1864.253 175.900 10.598 17.590 Essel Propack 456.144 290.472 487.032 597.899 312.260 346.399 305.057 336.690 280.940 4578.842 7991.736 312.860 25.544 31.286 Plastiblend - 94.315 65.975 47.970 51.415 50.830 53.105 45.955 49.335 41.535 500.435 58.500 8.554 6.500 Gopala 37.261 136.542 112.120 103.435 136.470 158.865 134.257 149.431 146.015 195.274 1309.671 85.270 15.359 8.527 Shaily - - - - 62.099 52.031 50.576 61.110 73.639 77.738 377.194 37.920 9.947 6.320 Shree Ram 1191.970 172.780 213.325 189.210 218.095 394.415 456.940 215.650 197.547 224.861 3474.793 286.760 12.117 28.676 Acrysil 15.060 18.633 14.880 11.102 10.743 12.953 13.364 18.063 18.537 16.157 149.491 26.490 5.643 2.649 Jagdamba - - - - 9.601 11.352 9.064 8.677 10.894 8.782 58.370 5.280 11.055 0.880 Gujarat Craft 14.804 7.651 10.450 15.768 22.672 38.937 37.227 13.435 11.408 10.823 183.173 31.100 5.890 3.110 Polylink 125.937 156.771 185.523 198.403 217.527 222.879 221.018 184.259 344.942 231.254 2088.511 142.600 14.646 14.260 Promact - 28.182 36.327 34.806 31.005 111.206 68.941 48.760 41.859 30.076 431.163 53.140 8.114 5.904 Ashish 4.760 5.814 6.018 8.432 9.996 17.714 17.340 14.484 16.456 27.642 128.656 34.000 3.784 3.400 ∑WjRj 3078.616 3216.245 2710.960 3001.613 3685.330 2945.109 3033.652 3349.545 2508.493 6647.452 11.919 ∑Wj 140.250 169.990 170.010 170.110 183.730 208.460 218.310 237.990 239.800 239.940 wei R 21.951 18.920 15.946 17.645 20.058 14.128 13.896 14.074 10.461 27.705 17.478


144

The summary of ANOVA based on the data given in 7.4.4.1is as follows. For this


H0 = There is no significant difference in Investment Turnover Ratio among 15

companies.

H1 = There is significant difference in Investment Turnover Ratio among 15

companies.



Sintex 9 1862.0776 206.8975 10791.52

Nilkamal 10 829.7183 82.97183 196.0384

INEOS 10 1864.2533 186.4253 983.2627

Essel Pro. 10 7991.736 799.1736 1774332

Plastiblend 9 500.435 55.60389 255.1627

Gopala 10 1309.6705 130.9671 1716.373

Shaily 6 377.1936 62.8656 121.8744

Shree Ram 10 3474.7934 347.4793 96949.96

Acrysil 10 149.4911 14.94911 8.510929

Jagdamba 6 58.3704 9.7284 1.290824

Guj. Craft 10 183.1733 18.31733 124.8861

Polylink 10 2088.5111 208.8511 3365.35

Promact 9 431.1627 47.90697 723.1206

Ashish 10 128.656 12.8656 51.95403

Table no.-7.4.4.3

Source of Variation SS df MS F P-value F crit Between Groups 17392930.2686 14 1242352 7.895954 0.0000 1.772315666

Within Groups 19510204.5740 124 157340.4

Total 36903134.8426 138

Above table no. – 7.4.4.2 shows descriptive statistics related to the ANOVA. Table




145

with corresponding p – value is given. F value is 7.89 and p – value is 0.000. Here p –


difference in Composite Investment Turnover among the selected companies.

Conclusion

It is observed that the composite investment turnover ratio for the industry was

11.92.

The highest composite investment turnover ratio was 29.05 for JBF followed

by Essel Propack 25.54, Gopala Polyplast 15.36 and Polylink 14.65 were the

good performers.

The high performers in composite investment turnover ratio belong to large

cap segment.

The lowest composite investment turnover ratio was 3.78 for Ashish Polyplast,

followed by Acrysil 5.64 and Gujarat Craft 5.89. These companies belong to

small cap group.

Out of selected companies 5 of them have composite investment turnover

ratios higher than 11.92 and 10 of them have composite investment turnover

ratios lower than 11.92.

The composite investment turnover ratios were in the range of (3.78 to 29).

7.5 Solvency Ratios The following solvency ratios have been studied:

1. Debt-Equity Ratio

2. Interest Coverage Ratio

7.5.1 Debt-Equity Ratio ANOVA for Composite Debt-Equity Ratios among the companies under study

(for a decade).

In this sub section ANOVA for Composite Debt-Equity ratios of 15 companies under

study (for the decade) has been carried out on the basis of data on Debt-Equity ratios

given from following table no. - 7.5.1.1

146

Table no. - 7.5.1.1 (Composite Debt-Equity Ratios) Composite Debt Equity Ratios based on Weighted Mean where weights (Wi) are Paid-up capital and Ri are ratios


JBF 39.395 39.395 34.742 26.057 24.506 69.580 72.869 56.475 73.443 70.331 506.794 445.020 1.139 44.502 Sintex - 10.220 11.066 12.376 12.382 25.649 23.286 28.382 32.166 31.355 186.880 199.980 0.934 22.220 Nilkamal 10.713 8.313 6.428 5.913 5.571 5.142 9.684 19.681 17.253 14.186 102.883 98.330 1.046 9.833 INEOS ABS 8.267 3.518 - - - - - - - - 11.785 35.180 0.335 17.590 Essel Propack 17.472 8.736 7.493 6.890 5.638 8.456 14.094 21.924 29.754 24.743 145.200 312.860 0.464 14.520 Plastiblend - 2.080 1.755 1.235 0.975 0.520 1.560 1.820 0.910 3.380 14.235 65.000 0.219 7.222 Gopala 8.069 15.084 23.247 35.784 32.307 29.924 29.195 42.758 94.441 455.236 766.046 85.270 8.984 76.605 Shaily - - - - 7.450 9.428 11.233 18.449 16.324 16.470 79.354 37.920 2.093 6.320 Shree Ram 16.960 25.175 35.245 51.410 - - - - - 128.790 106.000 1.215 26.500 Acrysil 2.673 3.084 2.673 3.855 4.703 4.266 4.189 3.547 2.377 1.544 32.911 26.490 1.242 2.649 Jagdamba - - - - 0.616 0.431 0.625 1.074 1.417 1.839 6.002 5.280 1.137 0.880 Gujarat Craft 4.167 5.598 4.696 3.639 2.301 2.892 3.421 6.562 6.531 6.749 46.557 31.100 1.497 3.110 Polylink - - - - 235.741 75.068 117.876 111.517 - - 540.203 59.540 9.073 14.885 Promact - 14.390 11.186 10.263 10.154 16.399 - 49.671 - 47.783 159.845 58.620 2.727 8.374 Ashish 0.238 0.306 0.136 0.204 0.204 0.170 0.136 0.170 0.102 0.204 1.870 34.000 0.055 0.187 ∑WjRj 107.954 135.899 138.666 157.626 342.547 247.927 288.168 362.029 274.718 673.821 2.144 ∑Wj 127.060 156.980 139.410 139.510 139.640 161.370 164.730 188.640 168.430 175.080 wei R 0.850 0.866 0.995 1.130 2.453 1.536 1.749 1.919 1.631 3.849 1.698 W 12.706 13.082 12.674 12.683 10.742 12.413 13.728 14.511 15.312 14.590


147


ANOVA the H0 and H1 are as follows. H0 = There is no significant difference in Debt-equity Ratios among 15 companies.

H1 = There is significant difference in Debt-equity Ratios among 15 companies.

Table No. - 7.5.1.2 (Summary of statistics for ANOVA)


JBF 10 506.794 50.6794 398.6181

Sintex 9 186.8798 20.764422 84.53373

Nilkamal 10 102.8828 10.28828 26.57331

INEOS 2 11.7853 5.89265 11.27793

Essel Pro. 10 145.2 14.52 73.00074

Plastiblend 9 14.235 1.5816667 0.704519

Gopala 10 766.0455 76.60455 18245.55

Shaily 6 79.3536 13.2256 19.83295

Shree Ram 4 128.79 32.1975 219.9681

Acrysil 10 32.9112 3.29112 0.980876

Jagdamba 6 6.0016 1.0002667 0.299032

Guj. Craft 10 46.5567 4.65567 2.652316

Polylink 4 540.2025 135.05063 4861.754

Promact 7 159.8454 22.835057 318.3225

Ashish 10 1.87 0.187 0.003404


Source of Variation SS df MS F P-value F crit Between Groups 109968 14 7854.8829 4.291933 0.0000 1.789919

Within Groups 186675 102 1830.1504

Total 296644 116 Above table no. - 7.5.1.3 shows descriptive statistics related to the ANOVA. The next

table gives sum of square, degree of freedom and mean sum of square for between



corresponding p – value is given. F value is 4.29 and p – value is 0.00. Here p – value

148

is less than 0.05. Hence the given hypothesis is rejected i.e. there is significant

difference in Composite Debt -Equity Ratio among the selected companies.

Conclusion

It is observed that the composite debt-equity ratio for the industry was 2.14

which considered moderate.

The highest composite debt-equity ratio was 9.07 for Polylink followed by

Gopala 8.98.

It indicate high level of borrowed capital.

The lowest composite debt-equity ratio was 0.05 for Ashish Polyplast,

followed by Plastiblends 0.22 and INEOS ABS 0.34. It indicate the owners

capital was more than the borrowed capital and shows less burden of paying

interest and there is scope for trading on equity.

Out of the selected companies 3 have the ratios higher than 2.14 and 12 of

them have the ratios lower than 2.14.

The range of composite debt-equity ratio was (0.05 to 9.07).

7.5.2 Interest Coverage Ratio: ANOVA for Composite Interest Coverage Ratios among the companies under


In this sub section ANOVA for Composite Interest Coverage ratios of 15 companies

under study (for the decade) has been carried out on the basis of data on Interest

Coverage ratios given from following table no. 7.5.2.1. The summary of ANOVA

based on the data given in 7.5.2.1 is as follows.

149

Table no. - 7.5.2.1(Composite Ratios of Interest Coverage) Composite Ratios of Interest Coverage based on Weighted Mean where weights (Wi) are Paid-up capital & Ri are ratios


JBF 9.616 39.706 62.350 99.264 129.353 327.810 302.353 316.506 291.906 275.723 1854.587 445.020 4.167 44.502 Sintex - 28.829 31.450 40.331 71.518 86.615 109.039 150.017 176.506 176.236 870.539 185.370 4.696 20.597 Nilkamal 15.169 19.968 26.139 36.851 29.052 24.767 15.426 27.988 18.659 48.053 262.072 98.330 2.665 9.833 INEOS ABS 78.627 176.252 482.142 - - - - - - - 737.021 52.770 13.967 17.590 Essel Propack 182.520 98.592 142.051 176.645 238.032 196.690 115.884 128.099 56.689 52.931 1388.132 312.860 4.437 31.286 Plastiblend - 41.405 83.980 102.895 152.880 204.230 152.425 57.395 39.990 44.915 880.115 58.500 15.045 6.500 Gopala 3.477 5.877 0.653 0.522 12.294 13.437 14.495 -0.661 -13.004 -22.481 14.609 85.270 0.171 8.527 Shaily - - - - 21.767 16.994 11.233 2.735 10.394 11.200 74.323 37.920 1.960 6.320 Shree Ram 80.030 63.600 -3.180 -7.685 -335.225 -15737.070 -1459.555 -52.086 -36.842 -2105.370 -19593.383 286.760 -68.327 28.676 Acrysil 3.701 7.299 8.224 6.476 4.523 5.269 7.736 16.011 15.395 43.748 118.382 26.490 4.469 2.649 Jagdamba - - - - 1.857 2.015 4.066 2.332 2.719 1.901 14.890 5.280 2.820 0.880 Gujarat Craft 3.888 3.919 3.950 4.261 5.007 5.380 5.163 4.960 4.247 4.247 45.021 31.100 1.448 3.110 Polylink 1.821 0.520 7.156 5.594 4.293 32.261 8.375 17.371 -0.465 3.567 80.494 142.600 0.564 14.260 Promact - 6.245 9.611 10.860 10.697 -9.177 -48.890 4.883 -3.450 2.604 -16.618 58.620 -0.283 6.513 Ashish 10.234 12.920 7.208 3.740 8.330 10.778 18.700 14.484 18.734 47.770 152.898 34.000 4.497 3.400 ∑WjRj 389.083 505.131 861.733 479.755 354.378 -14820.001 -743.551 690.033 581.479 -1414.957 -0.514 ∑Wj 140.250 169.990 170.010 152.520 166.140 190.870 200.720 220.400 222.210 222.350 wei R 2.774 2.972 5.069 3.146 2.133 -77.644 -3.704 3.131 2.617 -6.364 -6.587


150


ANOVA the H0 and H1 are as follows. H0 = There is no significant difference in Interest Coverage Ratio among 15

companies.

H1 = There is significant difference in Interest Coverage Ratio among 15 companies.



JBF 10 1854.587 185.4587 16497.53

Sintex 9 870.5392 96.72658 3558.402

Nilkamal 10 262.0719 26.20719 104.2054

INEOS 3 737.021 245.6737 44320.55

Essel Pro. 10 1388.1322 138.8132 3658.275

Plastiblend 9 880.115 97.79056 3564.221

Gopala 10 14.6094 1.46094 138.0773

Shaily 6 74.3232 12.3872 41.81504

Shree Ram 10 -19593.38 -1959.34 23995017

Acrysil 10 118.3817 11.83817 143.3824

Jagdamba 6 14.8896 2.4816 0.706625

Guj. Craft 10 45.0205 4.50205 0.320441

Polylink 10 80.4943 8.04943 98.02135

Promact 9 -16.6178 -1.84642 356.2524

Ashish 10 152.898 15.2898 153.0878


Source of Variation SS df MS F P-value F crit Between Groups 37987076.51 14 2713363 1.467761 0.134027075 1.777190142

Within Groups 216290976.2 117 1848641






151

value is greater than 0.05. Hence the given hypothesis is not rejected i.e. there is no

significant difference in Composite Interest Coverage Ratio among the selected

companies.

Conclusion

It is observed that the composite interest coverage ratio of the industry was (-

0.51) which is very poor.

The highest composite interest coverage ratio was 15.04 for Plastiblends

followed by INEOS ABS 13.97. It indicates less borrowed capital and high

interest paying capacity.

The lowest composite interest coverage ratio was -68.33 for Shree Ram

followed by Promact -0.28 indicate low earning capacity and so inability to

pay the burden of interest.

Out of selected companies 14 have the composite interest coverage ratios

higher than -0.51 and 1 of them have composite interest coverage ratio lower

than -0.51.

The range of composite interest coverage ratio was (-68.32 to 15.04).

Polylink, Shaily and Gujarat Craft showed the poor capacity to pay the interest

and should increase their earning capacity.

7.6 Summary of various Composite (weighted mean) ratios of each of

the companies and the industry for the period of study. It is important to summarize the various ratios of each of the companies related and

that of industry, for the period of study as it facilitates a quick overview of the various

ratios of financial performance of the companies as well as the industry during the

period of study and it also facilitates a quick comparison between any two companies,

as well as a company the industry as a whole. Hence, this summary is provided in the

following table.

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Table no. - 7.6 (Summary of various Composite ratios for each company for the period of the study.)

Liquidity Ratios Profitability Ratios Activity Ratios Solvency Ratios

Companies Current Quick Gross

Profit Operating

Profit Net

Profit

Return on

Capital Employed

Return on Net worth

Earning per

Share

Inventory Turnover

Debtors Turnover

Fixed Assets

Turnover

Investment Turnover

Debt-Equity

Interest Coverage

JBF 1.482 1.11 9.718 12.168 2.97 14.565 12.356 11.53 42.123 11.04 2.712 29.049 1.138 4.167

Sintex 1.434 2.22 15.64 19.085 8.503 10.605 13.981 17.2 9.501 4.667 1.554 10.045 0.934 4.696

Nilkamal 1.818 2.18 8.692 11.193 3.108 11.193 12.148 18.63 7.841 7.237 2.725 8.438 1.046 2.665

Ineos ABS 1.076 0.76 14.2 15.273 5.461 25.236 15.151 17.63 7.948 6.043 2.343 10.598 0.335 13.97

Essel 1.658 2.69 29.24 31.611 13.291 11.347 7.828 9.091 8.702 7.076 1.536 25.544 0.464 4.437

Plastiblends 0.932 1.07 13.34 13.566 9.869 23.72 22.528 16.84 7.844 7.26 3.851 8.554 0.219 15.05

Gopala 2.612 4.55 1.226 3.984 -1.412 2.404 -70.48 -0.65 14.954 5.799 2.799 15.359 8.984 0.171

Shaily 0.798 2.03 7.701 14.27 1.536 9.255 8.345 1.459 9.947 3.952 1.075 9.947 2.093 1.96

ShreeRam 0.711 1.74 -19.8 11.884 - -2.997 163.34 -8.3 10.641 5.513 0.485 12.117 1.215 -68.33

Acrysil 0.851 1.77 13.5 17.863 5.214 19.274 19.715 7.802 5.382 2.891 2.575 5.643 1.242 4.469

Jagdamba 1.746 1.27 10.73 13.774 3.445 12.755 10.856 7.228 10.948 7.962 1.165 11.055 1.137 2.82

Guj Craft 2.465 1.56 4.187 6.635 1.254 10.443 6.642 0.971 5.84 6.498 4.862 5.889 1.497 1.447

Polylink 1.61 2.05 -0.2 6.175 -2.979 3.617 123.42 -0.38 12.584 9.073 1.758 14.646 9.073 0.564

Promact 1.651 3.38 -0.48 4.647 -14.65 4.511 412.24 -0.79 7.617 3.979 1.356 8.114 2.726 -0.283

Ashish 6.29 7.68 5.227 6.57 1.515 3.101 1.678 0.218 4.357 0.055 1.818 3.784 0.055 4.497

Industry Ratio 1.81 2.4 7.5 12.58 2.4753 10.6 49.84 6.57 11.08 5.94 2.18 11.92 2.14 -0.51

153

From the above table of summary we may conclude the following.

Conclusion

JBF was consistently good in terms of all the ratios but in case of Inventory

Turnover and Return on Net worth it is below the industry average.

Sintex industry’s Quick Liquidity Ratio is too high, its Return on Net worth,

Inventory Turnover, Debtors Turnover are below the industry level but in other

ratios it is consistently good in financial performance.

Nilkamal’s composite ratio of Return on Net worth, Inventory Turnover and

Investment Turnover were lower than the industry but in other ratio it is

comparatively better in financial performance.

INEOS ABS’s composite ratio on Return on Net worth, Inventory Turnover

and Debt-Equity were below the industry but in other ratios it is higher than

the industry.

Essel Propack’s composite ratio of Return on Net worth, Inventory Turnover

and Fixed Assets Turnover were lower than the industry ratio.

Plastiblends composite ratio of Return on Net worth, Inventory Turnover,

Investment Turnover and Debt-Equity were below the industry ratio.

Gopala was also below in Gross Profit Margin, Operating Profit Margin,

Return on Capital Employed, Return on Net worth and Earning per Share

when compared to industry ratio. It indicates poor financial performance in

Profitability, Solvency and Liquidity.

Shaily Engineering’s financial performance was also poor in terms of

Liquidity, Profitability and Activity ratio.

Shree Ram Multi-tech was also consistently poor in terms of Liquidity,

Profitability and Solvency ratios.

Acrysil India’s composite ratio of Return on Net worth, Inventory Turnover,

Investment Turnover, Debtors Turnover were lower than the industry ratio. So

it was a poor performance in Activity ratio.

Jagdamba’s financial performance was consistently healthy except Return on

Net worth. It was almost better than the industry ratios among all ratios. So

this is the best company in financial performance in small cap segment.

154

Gujarat Craft’s composite ratios in Return on Net worth, Earning per Share,

Inventory Turnover were lower than the industry ratios. It was good in

Liquidity but poor performance in Profitability and Solvency.

Polylink Polymer was also poor in Profitability ratios.

Promact was very poor in financial performance in terms of Profitability and

Solvency ratios.

Ashish could not control on Liquidity, poor performance in Profitability and

needed to give attention in Debtors Turnover Ratio.

7.7 Summary of relative performance of selected company during

the period of study on the basis of values of various ratios of the

industry during the period under study. Having obtained various ratios of plastic industry of Gujarat for the period of

study (i.e. 2000-01 to 2009-10) and the various ratios of the selected companies

for the same period, one can classify the performance of a selected company as

healthy or unhealthy if the value of that ratio of the selected company is smaller

or greater (or as the case maybe greater or smaller) than the ratio of the industry

as benchmark ratio. Then on the basis of number of healthy or unhealthy ratios

one can comment about the relative health of financial performance of a

company during the period of study. The summary of healthy/unhealthy ratios of

the selected companies for the period under study is presented in the following

table.

155

Table no. – 7.7 Performance wise healthy ratios of selected companies

Company Current Quick Gross Profit

Margin

Operating Profit

Margin

Net Profit

Margin

Return on

Capital Employed

Return on Net worth

EPS Inventory Turnover

Debtors Turnover

Fixed Assets

Turnover

Investment Turnover

Debt-Equity

Interest Coverage Total

JBF 12

Sintex 8

Nilkamal 9

INEOS 8

Essel 9

Plastiblends 9

Gopala 4

Shaily 6

Shree Ram 3

Acrysil 8

Jagdamba 11

Guj. Craft 7

Polylink 6

Promact 3

Ashish 2

Total 9 10 9 8 11 9 3 8 3 8 7 6 3 11

156

From the above table of summary we may conclude the following.

Conclusion

Out of all selected companies JBF Industry was best in financial performance

because maximum number of the composite ratios of JBF in Liquidity,

Profitability, Activity and Solvency were healthy. It belongs to large cap

segment.

Jagdamba was next best in financial performance during the decade because

its composite ratios were healthier than the other competitors in terms of

Liquidity, Profitability, Activity and Solvency ratios. It belongs to small cap

segment.

Plastiblends is the third best company in financial performance in comparison

with other companies because its composite ratios of Profitability, Activity,

Solvency and Liquidity are better than the rest of the companies during the

decade. It belongs to mid-cap segment.

Essel Propack is also another company having healthier Profitability, Activity,

Solvency and Liquidity ratios.

Next one is Nilkamal which also has healthy Profitability, Liquidity, Acitivity

and Solvency ratios.

Sintex is also better in Liquidity and Profitability ratios.

INEOS ABS is also good at Profitability ratio and moderate in Activity and

Solvency ratios.

Gujarat Craft was moderate in Liquidity, Profitability, Activity and Solvency

ratios.

Shaily was only good at the Profitabilty and Solvency ratios as compared to

the other ratios.

Polylink was good in Liquidity and Activity raitos, poor in Profitabilty ratios.

Promact and Ashish were poor in all of the four ratios.

chapter 7 analysis of variance (anova) of various...

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