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A Project Report Submitted to

PROF. APOORVA RAVAL

P.G.R.I.M.S. – MBA College,

(Afliated Wit G!"ARA#

#$C%&''GICA !&I)$RSI#*+

'

-t /$B!RAR*, 01-1.

I

te Ma2ter o3 Bu2ie22

Admii2tratio Programme.

Submitted b45

%AR6I7 7 S%A% – 89



PREFACE

This is a 21st century today every personwants to be master in the feld they are in. There are many felds to choose master. o!one has to choose only one feld in which hethin"s he can #o $urther deep. %$ he choosesone feld to #o deep! other felds automaticallysubdued.

&aster o$ 'usiness Administration (&.'.A.)is a pro$essional course! so when the studentcompletes the course he should not have only

theoretical "nowled#e he should also havepractical "nowled#e For the purpose o$ #ettin#practical "nowled#e the student are re*uired toprepared the pro+ect report .The pro+ect isprepared on the basis o$ the fnancial analysiso$ some or#ani,ation.

The main purpose in the fnance feld is to"now how the fnancial analysis is done. -e all"now that fnance is the blood o$ any businessand without it no business can run. %n the feldo$ fnance you always learn somethin# new!



and i$ you li"e challen#in# wor" you shouldchoose fnance.

As we li"e calculative sub+ect andchallen#es! we have chosen an or#ani,ationthat is REA TR%P %&%TE/ where we #ete0posure o$ all type o$ wor" and can learnmany thin#s. %t is a private company concernwhich deals in the sin#le product that is coldrolled stainless steel coils.

Financial analysis o$ a company is verydicult and the most important! mostchallen#in# tas" and we li"e challen#es so wehave chosen the sub+ect o$ fnancial analysisand by doin# this we are able to "now itsfnancial position and fnancial structure o$ thecompany.

The most important thin#s re*uired $oranaly,in# the fnancial statements is theannual report o$ the company. This annualreport contains analysis o$ the years annual

reports.

Every mana#ement student should havethe "nowled#e o$ practical application o$ thetheory that he3she learns in the classroom. o!



this #rand pro+ect becomes very help$ul indoin# so.

Ahmedabad.

R/ 4ovember! 2556.

4%7A4T R. 7A7 895

EXECUTIVE SUMMARY

This project report is prepared on the financial analysis of REAL STRIPS LIMITED Situated Bavla Highway, Ahmedabad. Thisreport consists of mainly three parts that is Organiational profile,!ntroduction to the report and the main theme of the report that is thefinancial analysis. The grand project is a good learning e"perience.

By preparing project report we are able to #now the different criteriaand different things about the company.

The initial part of this report contains the brief informationabout the organiation profile that is its History $evelopment %



Achievements, company profile its product, !nfrastructure etc. Thesecond part consists of the introduction to the report.

The practical concern of this report is revealed by learning of

practical business scenario that is the financial analysis .The thirdpart consist of financial analysis , contains &atio analysis , $o 'ont(hart , Horiontal Analysis , )ertical Analysis ,Trend Analysis % (ashflow Analysis etc.

&atio analysis comprising mainly five types of ratio analysis asunder*

+iuidity - Balance sheet ratio

+iuidity &atio

Assets turnover &atio

inance-+everage-(apital &atio

)aluation &atio

/e have done financial analysis of &0A+ ST&!'S+!1!T0$ and ! found that it is well managing its profit, its staff and

achieving more and more height every year. !n the year 233452336,they have occurred profit of &s. 27688392 before ta" and net profit is&s. :828949; .The amount carried forward to the Balance Sheet is&s. 99<7<7::. Their earning per share =0'S> is 6.68 &s. /hich ismore than 7.62? compare to last year.

or any company financial analysis is very important becauseby analying company on the financial basis you are able to #now itsprofit and loss but you can do analysis of their current and liuidity

position. @ot only this you are also able to #now the financial positionof the company and whether to invest in it or not. ou can also #nowthat it is a good company or ma#ing losses.

ou can also #now its promoters and thin# that whether toinvest or divest from the company, the company is occurring debt or euity based. !t is declaring dividend or not and what is the pay5outratio there. The company is listed and has its auditors.



/hat is the earning and is the company creditworthy 5all thisanswers we get from the annual report and from that we can #nowfinancial position of the company. As the level of student or person or

as a company you should always chec# the financial position of acompany so that your money and job are safe. !n the project report !tried my level best to #now more and more about the company, itsposition, its networ# and its profitability.



Table of Contents

CHAPTER

NUMBER

PARTICULAS PAGE NO

Preface

Acknowledgement

Executive Summary

PART: 1 ORGANIZATIONAL PROFILE

Chapter : 1

1.1 Introducton to the Indu!tr"

1.# H!tor" $ %e&e'op(ent

1.) Co(pan" Pro*'e

1.+ In*ra!tructure

1., Mana-e(ent

1. Product!

1./ En&ron(ent

1.0 Pro*or(a O* In2ur" 3or(

1.4 Or-an5atona' Chart

PART: 2 INTRODUCTION TO THE

REPORT

Chapter:#

#.1 Introducton o* the 3nanca' State(ent!

#.# Introducton O* Rato Ana'"!!

#.) %e*nton O* Rato#.+ State(ent o* Co(par!on

#., Nature o* Rato

#. I(portance o* Rato Ana'"!!

#./ L(taton O* Rato Ana'"!!

#.0 6arou! t"pe! o* Rato!



PART:3 FINANCIAL ANALYSIS

Chapter ): 3INANCIAL STATEMENTS

Chapter +: RATIO ANAL7SIS

+.1 L2udt" Rato!

+.# Pro*ta8't" Rato!

+.) Turno&er9Act&t" rato

+.+ Capta'9 3nance9'e&era-e Rato

+., 6a'uaton Rato

+. Co(par!on! O* the Rato! O* the 3our 7ear!

Chapter ,: TREN% ANAL7SIS

,.1 Trend Ana'"!! o* Pro*t $Lo!! A9C *or + 7r!.

,.# Trend Ana'"!! O* Ba'ance Sheet *or + 7ear!

Chapter : CONCLUSION

BIBLIOGRAPH7



PART - I

CHAPTER-1 SHAPE ; MERGE3ORMAT



0"pansion cum moderniation programmes implementedduring the past few years is now yielding result. Turnover has goneup from &s 4394.2<+acs in the previous year to &s. 4;3:.;6 +acs in

the year under report. ull utiliation of the capacity has resulted intoimproved operating margin. Cross profit before depreciation andinterest has gone up to &s. 89;.;; lacs showing an increase of 2:?over the previous year.

(A) FUTURE PROSPECTS *

The company has underta#en an e"pansion project. One morerolling mill is being installed. After completion of the same, theinstalled capacity will go up from the present 8333 1T'A to :23331T'A. !t is the endeavor of the directors to complete the e"pansionduring the third uarter of the current fiscal year. The application of and particularly stainless steel coil is gaining more and moreacceptance in a variety of industrial and domestic use. @ew andinnovative uses of the stainless steel coils are being made.

The prices of H& coils, which is the basic raw material of thecompany have stabilied. +oo#ing at the international scenario it ise"pected that price of H& coils will have declining trend. Anydecrease in the price of Hr coils will be to the benefit of the (ompany

http://window7%28%29/



(B) GREEN ENERGY

'ower tariff in the state of Cujarat is one of the highest in thecountry. (onsumption of power in steel industry is very high. (ost of

power consumption is a major cost of component ne"t to raw materialcost. (ost of the power consumption has been increasing steadily for the past many years, which has been a cause of concern for theconsumers. The government has also been encouraging theinstallation of wind turbine generators. The ban#s also have beenadvancing loan at the lower rate of interest.

+ast year (ompany had installed a wind mill of :.26 1/capacities. 0ncourage by the benefits of wind mill during the year oneor more wind mill of 3.<63 1/ has been installed. $uring the year

under review (ompany had consumed 24344:6 unit of electricity./here as the wind mill had generated 2447:79 units, which are setoff against the energy bill paid to the state electricity Board.

1.2: HISTORY AND DEVELOPMENTS:

Stainless steel production in !ndia has a short history of 23years. !n :;78 government of !ndia allowed production of stainlesssteel by the private sector. Before :;78 only :6333 1T of stainless




steel was produced per year by the state owned units and thedemand for cold rolled materials was met by imports again by theState Trading (orporation.

Stainless steel production has ta#en a giant leap from a measly

:6333 1T'A to :.4 5 :.6 million 1T'A which ma#es !ndia as one of the fastest growing mar#et of steel in the world.

(omparing it with aluminum, plastics and steel all along itsongoing tenure, SS is on the way up, as far as its popularity and thee"tent of the use is concerned.

Share of Stainless Steel was more domestic utensil sector was;3? in the year :;;35;: and today it is about 76? where as usage inindustrial sector compared to <9.6? by the developed countries ismere :3?.

$emand for SS is raising at the rate of 6? p.a. currently thedemand is :.9 1T'A which is targeted to increase to 2 1T within thetwo years which indicates bright prospects for the industry.

Stainless steel production in !ndia is rapidly growing every year.!ndia has emerged as the largest producer of 233 series low nic#el

stales steel in the world. There is greater awareness on the use of stainless steel in the building and construction sector. 1oreover theuses of stainless steel flat products are also increasing in the 'rocess!ndustries, chemical processing, Oil % Cas, 'etrochemicals, ood'rocessing !ndustries Auto % Aerospace industries, &ailways andtelecommunication industries.




(ompany has put up wind mills with capacity of :.26 1/ %3.<6 1/ respectively, to help the drive of alterative energies andsave power cost for us.

The achievement of your company stands on the ground of theintellectual and professional commitment that our people brought totheir wor#. Besides operational efficiency and management s#ills,honed under the most demanding and competitive conditions, it is thespirit of all our employees that are bonded cohesively with theorganiation.

The company believes in employees involvement in achievingthe organiational objectives and focuses its efforts to upgrade thes#ills of its wor#force to ta#e5up the challenges in the presentcompetition. The training system provides need5based training to our employees. /e are putting efforts to ma#e our appraisal system moreeffective to cater the financial and career aspirations of employees toincrease organiational effectiveness and efficiency.




The industrial relations are good and harmonious. Both1anagement and /or#group ta#e positive approach and come tomutual understanding, wherever necessary for betterment of theorganiation.

Our employees are our most valuable asset and we believe that

your companys wor# force is the pivot around which our successrevolves.




1.3 COMPANY PROFILE

Real Strips Li!ited" A# IS$ %&&1 '&&& Accredited o!pancame in to e"istence in :;;4 to cater the demand of old rolled *latprod+cts of stainless steel, for uality conscious manufacturer. &ealStrips +imited is situated on out s#irt of hub city of Cujarat.

(oils-Strips produced by &eal Strips +imited are used in Automobiles" ood % $airy !ndustries, S+gar Ind+stries" /atch

!ndustries, Pipes , T+-es Ind+stries" Dtensils, urniture, Architectural Dtilities, Thermo wares, (hemical process !ndustries,0lectronic !ndustries, Surgical industries, etc for very specialiedapplication.

1. INFRASTRUCTURE

!n our company around 233 wor#ers wor#ing in factory.

Our wor#ing capacity is %&&& MT per annum.

Our total area is /0& s2+are !eter or 0''&& s2+are *eet.



1.5 !A"A#E!E"TS

A. BOARD OF DIRECTORS:

SHRI A.<. <ATARIA CHAIRMAN

SHRI A.%. SANGH6I MANAGING %IRECTOR

SHRI UGAMRA= M. HUN%IA =OINT MANAGING

%IRECTOR

SHRI P.S. =AIN =OINT MANAGING

%IRECTOR

SHRI ASH>IN A. <ATARIA >HOLETIME %IRECTOR

SHRI BABULAL S. =AIN %IRECTOR

SHRI CHAN%RESH 6. SHAH %IRECTOR

SHRI PA>AN R. MURAR<A %IRECTOR

SHRI AMOL %ALAL %IRECTOR

B. AUDITORS:

M9S MEHTA LO%HA $ CO.

CHARTERE% ACCOUNTANTS

C. CONTACT PERSON:

MR . PRA<ASH S. =AIN PUBLIC REL. O33ICER

MR . RAMESH CHAU%HAR7 GENERAL

MANAGER



MR . RAMCHARAN BERI>ALA 3INANCE MANAGER

D. BANKERS:

UNION BAN< O3 IN%IA

STATE BAN< O3 IN%IA

E. REGISTERED OFFICE:

#? MANGAL MURTI COMPLE@?

NEAR SHI6 CINEMA?

ASRAM ROA%?

AHME%ABA% )04

F. WORKS:

SUR6E7 NO.#+,

6ILLAGE: SARI

AHME%ABA%BA6LA HIGH>A7

TALU<A: SANAN%

%ISTRICT: AHME%ABA%.



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/#% Co&d ro&&'d ("%#$&'(( ("''& ("r#+( anne'd $ pc'ed.

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>e-ht MaD(u( ,., - per (( Fdth o* ("%#$&'(( ("''& ("r#+(

dependn- upon re2ured thcne!! $ Fdth o* the co'.

Pacn- He!!an !tan'e!! !tee' !trp! or a! per cu!to(er

re2ure(ent.Co' I% Mn 1, (( to ,1 (( (aD dependn- on thcne!! $

Fdth o* co'.

1.) E"*+%&"!E"T

Rea' Strp! L(ted ha! taen !erou! note to tae care o* en&ron(ent. A''

the -ude'ne! !!ued 8" Ho$or%7&' H#* !or" %$d Go8". o, I$d#% are

thorou-h'" a8ded. The &#0#d 9%("' ',,&'$"; re'ea!ed *ro( our productonunt ! treated Fthn our E,,&'$" Tr'%"'$" P&%$". The E**'uent Treat(ent

P'ant ! *u''" e2upped to treat the e**'uent up to de!red !a*e'" 'e&e'.

Rea' Strp! L(ted ha! !tarted a 8- dr&e *or tree p'antaton at our

ndu!tra' !te. There*ore? Rea' Strp! L(ted ! proud to ca'' t!e'*



en&ron(ent *rend'" or-an5aton? 8e'e&n- n en&ron(ent c'ean'ne!! and

ndu!tra' !a*et" a'on- Fth ndu!tra' -roFth.

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1. &%#A"+SAT+&" CA%T



PART – II

4APTER5'

2.1 +"T%&'(CT+&" &- -+"A"C+A3 STATE!E"T

A 3nanca' !tate(ent ! an or-an5ed co''ecton o* data accordn-

to 'o-ca' and con!!tent accountn- procedure!. It! purpo!e ! to con&e" an

under!tandn- o* !o(e *nanca' a!pect! o* a 8u!ne!! *r(. A *r(

co((uncate! *nanca' n*or(aton to the u!er throu-h *nanca' !tate(ent!

and report!. TFo 8a!c *nanca' !tate(ent! prepared *or the purpo!e o*

eDterna' reportn- to oFner!? n&e!tor! and credtor! are:

1 Ba'ance !heet

# Pro*t and 'o!! account.

3or the nterna' (ana-e(ent purpo!e that ! p'annn- and contro''n-?

(uch (ore n*or(aton ! needed than contaned n the pu8'!hed *nanca'

!tate(ent ! needed. The 8a!c o8ect&e o* *nanca' !tate(ent ! dec!on

(an-. Much can 8e 'earnt a8out a *r( *ro( care*u' eDa(naton o* t!

*nanca' !tate(ent! a! n&a'ua8'e docu(ent!. Thu!? t ! an (portant ad to

*nanca' ana'"!!.

2.2 +"T%&'(CT+&" &- TE %AT+& A"A30S+S

Rato ana'"!! ! a poFer*u' too' o* *nanca' ana'"!!? Fhere rato! are u!ed

a! a "ard!tc *or e&a'uatn- the *nanca' condton and per*or(ance o* a

*r(. Ana'"!! and nterpretaton o* &arou! accountn- rato! -&e a !''ed



and eDperenced ana'"!t! a 8etter under!tandn- o* the *nanca' condton

and per*or(ance o* the *r( that Fhat he cou'd ha&e o8taned on'" throu-h a

per!uade o* the *nanca' !tate(ent!. The ter( rato re*er! to the nu(erca'

or 2uantt&e re'aton!hp 8etFeen tFo te(! or &ara8'e!. It can 8e

eDpre!!ed a! 1 percenta-e! # *racton! and ) proporton o* nu(8er!.

The!e a'ternat&e (ethod! o* eDpre!!n- te(! Fhch are re'ated to

each other are? *or purpo!e o* *nanca' ana'"!! re*erred to a! rato ana'"!!.

It !hou'd 8e noted that co(putn- the rato! doe! not add an" n*or(aton

that a'read" nherted n the *-ure! o* pro*t! and !a'e!. >hat the rato! do !

a (ore (eann-*u' Fa" !o a! to ena8'e u! to draF conc'u!on! *ro( the(.

The !"!te(atc u!e o* rato to nterpret the *nanca' !tate(ent! *or noFn-

the !tren-th and Feane!! o* a *r( a! Fe'' a! t! h!torca' per*or(ance and

current *nanca' condton.

The rato ana'"!! a! a 2uantt&e too' ena8'e! ana'"!!t! to draF

2uantt&e n*or(aton a8out net pro*t! ade2uate? e**cent u!e! o* a!!et!?

*r(! current! o8'-aton! etc.

2.4 'E-+"+T+&" &- %AT+&:

The re'aton!hp 8etFeen tFo accountn- *-ure! eDpre!!ed

(athe(atca''"? ! noFn a! rato or *nanca' rato.

The a'ternat&e (ethod! o* eDpre!!n- te(! Fhch are re'ated to

each other are? *or purpo!e o* *nanca' ana'"!!? re*erred to a! rato

ana'"!!.

2. STA"'A%' &- C&!PA%+S+&"

The rato ana'"!! n&o'&e! co(par!on *or a u!e*u' nterpretaton o*

the *nanca' !tate(ent! a !n-'e rato n t!e'* doe! not ndcate! *a&ora8'e or



un*a&ora8'e condton. So(e !tandard! o* co(par!on are u!e*u' here? Fhch

(a" con!!t o*:

Rato ca'cu'ated *ro( the pa!t *nanca' !tate(ent! o* the !a(e *r(.

Rato de&e'oped u!n- the proected or pro *or(a? *nanca' !tate(ent

o* the !a(e "ear.

Rato! o* !o(e !e'ected *r(!? e!peca''" the (o!t pro-re!!&e and

!ucce!!*u'. At the !a(e pont o* t(e? and

Rato! o* the ndu!tr" to Fhch the *r( 8e'on-!.

The ea!e!t Fa" to e&a'uate the per*or(ance o* a *r( ! to co(pare

t! current rato! Fth the pa!t rato!. It -&e! an ndcaton o* the drecton o*

chan-e and re*'ect! Fhether the *r(! *nanca' per*or(ance ha! (pro&ed?

deterorated or re(aned con!tant o&er t(e. The chan-e (a" 8e a**ected 8"

chan-e! n the *r(! per*or(ance.

So(et(e! *uture rato! are u!ed a! the !tandard! o* co(par!on o*

pa!t rato! Fth *uture rato! !hoF the *r(! re'at&e !tren-th! and

Feane!!e! n the pa!t and the *uture. I* the *uture rato ndcate! the Fea

*nanca' po!ton? correct&e acton! !hou'd 8e ntated.

In the other Fa"? Fe can co(pare rato! o* one *r( Fth !o(e

!e'ected *r(! n the !a(e ndu!tr" at the !a(e pont n t(e. It ! (oreu!e*u' to co(pare the *r(! rato! Fth rato o* a *eF care*u''" !e'ected

co(pettor!? Fho ha&e !('ar operaton!. It ndcate! the re'at&e *nanca'

po!ton o* the *r(.

3or deter(nn- the *nanca' condton and per*or(ance o* a *r(?

th! rato (a" 8e co(pared Fth a&era-e rato! o* the ndu!tr" o* Fhch the

*r( ! a (e(8er. It he'p! to a!certan the *nanca' !tandn- and capa8't"

o* the *r( n the ndu!tr" to Fhch t 8e'on-!. Indu!tr" rato! are (portant

!tandard! n &eF o* the *act that each ha! t! oFn character!tc! Fhch

n*'uence the *nanca' and operatn- re'aton!hp!.

2.5 "AT(%E &- %AT+& A"A30S+S



Rato ana'"!! ! a poFer*u' too' o* *nanca' ana'"!!. A rato ! a

ndcaton 2uotent o* tFo (athe(atca' eDpre!!on!? Fhch ! u!ed a! an

ndeD or "ard!tc *or e&a'uatn- the *nanca' po!ton and per*or(ance o* a

*r(. The a8!o'ute accountn- *-ure! do not pro&de a (eann-

under!tandn- o* the per*or(ance and *nanca' po!ton o* the *r(.

An accountn- *-ure con&e"! (eann- Fhen t ! re'ated to !o(e

other re'e&ant n*or(aton. Rato! he'p to !u((ar5e the 'ar-e 2uantte! o*

*nanca' data and to (ae 2ua'tat&e ud-(ent a8out the *r(!

per*or(ance. The -reater the rato? the -reater the *r(! '2udt" and the

&ce&er!a. The pont to note ! that a rato ndcate! a 2uantt&e

re'aton!hp? Fhch can 8e u!ed to (ae a 2uantt&e ud-(ent. Such ! the

nature o* a'' the *nanca' rato!.

2.$ +!P&%TA"CE &- %AT+& A"A30S+S

The (portance o* rato ana'"!! 'e! n the *act that t repre!ent! *act!

on a co(parat&e 8a!c and ena8'e! the draFn-! o* a n*erence! re-ardn-

the per*or(ance o* a *r(. In re!pect o* the *o''oFn- a!pect!? rato ana'"!!

! re'e&ant.

1. LIUI%IT7 POSITION.

#. LONG TERM SOL6ANC7.

). OPERATING E33ICIENC7.

+. O6ER ALL PRO3ITABILIT7.

,. INTER 3IRM COMPARISON.

. TREN% ANAL7SIS.

2.) 3+!+TAT+&"S &- %AT+& A"A30S+S

There are !e&era' '(taton! o* rato ana'"!!.



1. COMPARATI6E STU%7 REUIRE%

#. LIMITATION O3 THE 3INANCIAL STATEMENT.

). RATIOS ALOME ARE NOT A%UATE.

+. >IN%O> %RESSING.,. PROBLEMS O3 PRICE LE6EL CHANGES.

. NO 3I@E% STATEMENTS

/. RATIOS ARE A COMPOSITE O3 MAN7 3IGURES.

2., *A%+&(S T0PES &- %AT+&S :

There are (an'" *&e nd! o* Rato!:

1. LIUI%IT7 RATIO.

#. PRO3ITABILIT7 RATIO.

). ASSETS TURNO6ER RATIO.

+. 3INANCE 9 LE6ERAGE 9 CAPITAL RATIO.

,. 6ALUATION RATIO.

1. LIUIDITY RATIO:

a CURRENT RATIO:

8 LIUI%IT7 RATIO9 UIC< RATIO

c UIC< RATIO

d NET >OR<ING CAPITAL

e CASH GENERATE% PER RUPPES O3 SALES:

* BAN< 3INANCE GAP RATIO:

- CAPITAL GEARING RATIO:

2. PROFITABILITY RATIO.

a OPERATING PRO3IT RATIO:

8 GROSS PRO3IT RATIO:



cNET PRO3IT RATIO

d RATE O3 RETURN ON IN6ESTMENT:

e RATE O3 RETURN ON EUIT7:

* RETURN ON ASSETS:

3. ASSETS TURNO<ER RATIO.

a IN6ENTOR7 9 STOC< TURNO6ER RATIO:

8 A6ERAGE AGE O3 IN6ENTORIES:

c TOTAL ASSETS TURNO6ER:

d NET 3I@E% ASSETS TURNO6ER

e NET >OR<ING CAPITAL TURNO6ER:

* %EBTORS TURNO6ER:

- CRE%ITORS TURNO6ER RATIO:

=. FINANCE 4 LE<ERAGE 4 CAPITAL RATIO.

a PROPRIETOR7 RATIO:

8 EUIT7 RATIO:

c %EBT RATIO

d %EBT EUIT7 RATIO:

e %EBT TO TOTAL ASSETS RATIO

* 3I@E% ASSETS TO NET >ORTH RATIO:

- INTEREST CO6ERAGE RATIO:

h %EBT SER6ICE CO6ERAGE RATIO:

>. <ALUATION RATIO.

a EARNING PER SHARE EPS

8 PRICE EARNING RATIO:



PART –III

4APTER53

FINAICIAL STATE)ENTS

BALANCE SHEET AS ON 31ST )ARCH 2553

PARTICULARS SC. NO. AS ON

31-53-2553

AS ON

31-53-2552

A.SOURCES OF FUNDS

1.SHAREHOLDERS FUNDS a Share capta' 1 ,#4) +/4)

8 Re!er&e! Surp'u! 2 ))/+/0 #++,4

?@56?6 336>@

2. LOANS FUNDS

a Secured Loan! 3 0)#1/ 0/0)

8 Un!ecured Loan! = )4+,044 +104##,

1255@6116 1516?2?

3 DEFERRED TA

LIABILITY NET;

1?>32?2 1=>5=6=3

TOTAL 226@6= 1@>315135

B. APPLICATION OF

FUNDS

1. 3I@E% ASSETS >



a. Gro!! B'oc 14/4+0++ 1##+,14#1

8 .Le!!Q %eprecaton ,,#/#0/4 ++/)1#

NET BLOC< 1+10#14, ////0014

c. Capta' For n pro-re!! #+4+, ,,,#/+1

1==312=1> 1332?1>65

2. CURRENT ASSETS

LOANS AD<ANCES

6

a. In&entore! #/#))/0 #0##

8. Sundr" %e8tor! #4/0, ,,#41+

c. Ca!h and Ban 8a'ance! ,)+41 141+4

d. Loan! and Ad&ance! ,+1+)+ ,441)

4/,400 0#000,+

Le!!Q Current La8'te! $

Pro&!on!

1+4+0)0 #10),4)

?21652 615>2651

3.)ISCELLANEOUS

EPENDITURE

to the eDtent not Frtten o** or

adu!ted

Pu8'c I!!ue EDpen!e! +/1,0) /+##0)

Pre'(nar" EDpen!e! 14,1/+ #))0

666> @>@6@

TOTAL 226@6= 1@>315135



BALANCE SHEET AS ON 31ST )ARCH 255=

PARTICULARS SC. NO. AS ON

31-53-5=

AS ON

31-53-53

A.SOURCES OF FUNDS

1.SHAREHOLDERS

FUNDS

a Share capta' 1 ,#4) ,#4)

8 Re!er&e! Surp'u! 2 ,)+04 ))/+/0

156151@66 ?@56?6

2. LOANS FUNDS

a Secured Loan! 3 11/,/4)0 0)#1/

8 Un!ecured Loan! = #/++,004 )4+,044

1=>52>2> 1255@6116

3 DEFERRED TA

LIABILITY NET;

216355> 1?>32?2

TOTAL 22?@522? 226@6=

B. APPLICATION OF

FUNDS

1. 3I@E% ASSETS >

a. Gro!! B'oc #440/4 14/4+0++

B Le!!Q %eprecaton 0/+,1)# ,,#/#0/4

NET BLOC< 1/)),),+/ 1+10#14,

C Capta' For n pro-re!! )0,+/ #+4+, 16@625@= 1==312=1>

2. CURRENT ASSETS

LOANS AD<ANCES

6

a. In&entore! +0#)0#/, #/#))/0

8. Sundr" %e8tor! ,,# #4/0,



c. Ca!h and Ban 8a'ance! 1044 ,)+41

d. Loan! and Ad&ance! 14)14 ,+1+)+

11),+4+, 4/,400


Pro&!on!

#/0+), 1+4+0)0

@>>5>?@ ?21652

3.)ISCELLANEOUS

EPENDITURE

to the eDtent not Frtten o**

or adu!ted

Pu8'c I!!ue EDpen!e! #00) +/1,0)

Pre'(nar" EDpen!e! 1,# 14,1/+

3>>=> 666>

TOTAL 22?@522? 226@6=



BALANCE SHEET AS ON 31ST )ARCH 255>

PARTICULARS SC.

NO.

AS ON

31-53-5>

AS ON

31-53-5=

A.SOURCES OF FUNDS

1.SHAREHOLDERS FUNDS

a Share capta' 1 ,#4 ,#4)

8 Re!er&e! Surp'u! 2 /0/)/11 ,)+04

125>6@11 156151@66

2. LOANS FUNDSa Secured Loan! 3 1)+#,1#0/ 11/,/4)0

8 Un!ecured Loan! = //+,4/ #/++,004

1=1@@6@?= 1=>52>2>

3 DEFERRED TA

LIABILITY NET;

2>>361@ 216355>

TOTAL 2??153=1= 22?@522?

B. APPLICATION OF FUNDS

1. 3I@E% ASSETS >

a. Gro!! B'oc #4#00#+ #440/4

B .Le!!Q %eprecaton 1#44/))+, 0/+,1)#

NET BLOC< 1#441 1/)),),+/

C .Capta' For n pro-re!! 41+1# )0,+/

12>6?313 16@625@=

2. CURRENT ASSETS LOANS AD<ANCES

6

a. In&entore! 0#++41 +0#)0#/,

8. Sundr" %e8tor! /4)+,+/ ,,#

c. Ca!h and Ban 8a'ance! 1/1/00 1044



d. Loan! and Ad&ance! 1++0)4/0 14)14

1/0/1#4 11),+4+,


Pro&!on!

#,41/0 #/0+),

11>=16@>1 @>>5>?@

3.)ISCELLANEOUS

EPENDITURE

to the eDtent not Frtten o** or

adu!ted

Pu8'c I!!ue EDpen!e! #00)

Pre'(nar" EDpen!e! 1101, 1,#

11?1>5 3>>=>

TOTAL 2??153=1= 22?@522?



PARTICULARS 2552-2553 2551-2552

-

+"C&!E

SALES )),1#11 #/+)0#0+

other Inco(e ,+)01# )0/+4)1

Increa!e9decrea!en Stoc +#1+00 41+) )+/11)11 #/#100+/)

E6PE"'+T(%E

Matera' Co!t #,+4)+0 10044#4,

Manu*acturn- and other EDp +111/// )0#1)00

E(p'o"ee Re(uneraton +4/0# +++#1)

Se''n- $%!tr8uton eDp. +11,0 )11+44,

Pu8'c I!!ue! EDpen!e! >rtten

O**

#// #//

Pre'(nar" EDpen!e! >rtten O** )0,1# )0,1#3nanca' eDpen!e! 4001)0+ 1))1404

%eprecaton 1101+ 411)1/

))1+1, #,//0#

Pro*t 3or The "ear EBIT 1,,,1#4 1+++1)

LESS: Pro&!on 3or TaDaton

1Current TaD 1##, 11)))))

#%e*erred TaD ),41/, +)/1)+1

Pro*t A*ter TaD PAT 1/)1#1 00),/#

A%%9LESS:Inco(e TaD *or

Ear'er 7ear

,#+#14

A%%9LESS: Pror Perod

Adu!t(ent

)# 1##,

1/0101 0)1#/0



A%%Q Ba'ance a! Per La!t 7ear #+,++,4 1)#0#/0)

LESS: A(ount Tran!*erred to

%e*erred La8't"

+)0,+ ,#)1/,,

B%&%$!' C%rr#'d For9%rd To

B%&%$!' S*''"

)+0/+/0 1))1

PROFIT LOSS ACCOUNT FOR THE YEAR ENDED

2552-2553

PROFIT LOSS ACCOUNT FOR THE YEAR ENDED

2553-255=PARTICULARS 2553-255= 2552-2553

+"C&!E

SALES +10+4)1 )++/+///

other Inco(e +,/)#0, 11,+

Increa!e9decrea!en Stoc 1)/+,4 #01)1

+14+44/, )+/4/4,+

E6PE"'+T(%E

Matera' Co!t #),/++) #,+4)+0

Manu*acturn- and other EDp ,0++#, +,0/+#

E(p'o"ee Re(uneraton ,)++1/ +4/0#

Se''n- $%!tr8uton eDp. )#1) +11,0

Pu8'c I!!ue! EDpen!e! >rtten O** #// #//Pre'(nar" EDpen!e! >rtten O** )0,1# )0,1#

3nanca' eDpen!e! 10/41 4001)0+

%eprecaton )#04+1 1101+

con&er!aton char-e! +,)10)# #0

)4+/#44/ ))1#+,0

Pro*t 3or The "ear EBIT #)#)4/0 1,,,1#4


1Current TaD #/ 1##,

#%e*erred TaD )#)1)) ),41/,

Pro*t A*ter TaD PAT 1/))0+, 1/)1#1

A%%9LESS:Inco(e TaD *or Ear'er

7ear

)),

A%%9LESS: Pror Perod Adu!t(ent )#



1/)+10 1/0101

A%%Q Ba'ance a! Per La!t 7ear )+0/+/0 #+,++,4

LESS: A(ount Tran!*erred to %e*erred

La8't"

+)0,+

B%&%$!' C%rr#'d For9%rd ToB%&%$!' S*''"

,1404 )+0/+/0

PROFIT LOSS ACCOUNT FOR THE YEAR ENDEDS

255=-255>PARTICULARS 255=-255> 2553-255=

+"C&!E

SALES +/++1/)) +10+4)1

other Inco(e 1,/))1# +,/)#0,

Increa!e9decrea!en Stoc 4410/1 1)/+,4

,11), +14+44/,

E6PE"'+T(%E

Matera' Co!t #4/+,),)0 #),/++)

Manu*acturn- and other EDp //0+/))# ,0++#,

E(p'o"ee Re(uneraton 00#/ ,)++1/

Se''n- $%!tr8uton eDp. ##11#,/ )#1)

Pu8'c I!!ue! EDpen!e! >rtten O** #00) #//

Pre'(nar" EDpen!e! >rtten O** )0,1# )0,1#3nanca' eDpen!e! 1,,4+,+) 10/41

%eprecaton +)01,4,# )#04+1

con&er!aton char-e! #,)00 +,)10)#

+/#,#,,+ )4+/#44/

Pro*t 3or The "ear EBIT #/,00# #)#)4/0


1Current TaD ,)1, #/

#%e*erred TaD )//)/1+ )#)1))

Pro*t A*ter TaD PAT 10+44)+0 1/))0+,

A%%9LESS:Inco(e TaD *or Ear'er

7ear

A%%9LESS: Pror Perod Adu!t(ent #1#0/4 )),

10#0+4 1/)+10

A%%Q Ba'ance a! Per La!t 7ear ,1404 )+0/+/0



LESS: A(ount Tran!*erred to %e*erred

La8't"

))0

LESS: %&dend TaD ++1/#+

7alance Carried -orward To 7alance

S8eet

)/)/11 ,1404



CHAPTER5

RA#I' A&A*SIS

.1 3+/(+'+T0 %AT+&.

t ! eDtre(e'" e!!enta' *or a *r( to 8e a8'e to (eet t!

o8'-aton a! the" 8eco(e due. L2udt" rato (ea!ure! the

a8't" o* the *r( to (eet t! current o8'-aton!. L2udt"

rato! 8" e!ta8'!hn- a re'aton!hp 8etFeen ca!h and other current a!!et! to

current o8'-aton! pro&de a 2uc (ea!ure o* '2udt". The *a'ure o* a

co(pan" to (eet t! o8'-aton! due to 'ac o* !u**cent '2udt"? F'' re!u't

n 8ad credt (a-e or e&en n 'aF !ut! re!u'tn- n the c'o!ure o* the

co(pan". Proper 8a'ance 8etFeen '2udt" and pro*ta8't" ! re2ured *or

e**cent (ana-e(ent.

I

The '2udt" rato (ea!ure! the a8't" o* the *r( to (eet t!

!hort ter( o8'-aton and re*'ect the !hort ter( *nanca' !tren-th9 !o'&enc"

o* a *r(. The (an rato Fhch ndcate! the '2udt" o* a *r( !:

1 Current Rato

# L2udt" Rato 9 uc Rato

) Acd Te!t Rato

+ Net Forn- capta' , Ca!h -enerated per rupee o* !a'e!

Ban *nance -ap rato

/ Capta' Gearn- Rato



1. CURRENT RATIO:

Current rato ! the (o!t Fde'" u!ed rato Fhch !hoF! the proporton

o* current a!!et! to current 'a8't". It ! a (ea!ure that Forn- capta' !

a&a'a8'e on t(e or not.

Current rato: !rr'$" %(('"(

Crr'$" &#%7#&#"

SIGNI3ICANCE:

The current rato ! not on'" a (ea!ure o* !o'&enc" 8ut t ! an ndeD

o* the Forn- capta' a&a'a8'e to the (ar-n o* !a*et". It (ean!? t ! a

crude and 2uc (ea!ure o* the *r(! '2udt".

R!. In (''on

E:7%'%T ;.1

YEAR 2551-2552 2552-2553 2553-255= 255=-255>

CURRENT

ASSETS

0.#/ 4.// 11.+ 1/.01

CURRENT

LIABILITY

+.,1 +.) ,.+1 11.#,

RATIO

C.A4C.L;

1.0)+ #.+#+ #.1,# 1.,0)



INTERPRETATION:

Co(po!ton o* current rato ! &er" (portant at the t(e o* nterpretaton. Current rato ndcate! the !ound !hort ter(

*nance *ro( the credtor! pont o* &eF. But on the other

hand the h-her rato ndcate! 8'ocn- o* *und! n current

a!!et!. A! a con&entona' ru'e? current rato o* #:1 or (ore !

con!dered !at!*actor". To throu-h (ore '-ht on the 2ua't"

o* current a!!et! the percenta-e o* the current a!!et! ! to 8e

ca'cu'ated.

HoFe&er? an ar8trar" !tandard o* #:1 !hou'd not 8e 8'nd'"

*o''oFed. 3r(! Ft 'e!! then #:1 current rato! (a" 8e

don- Fe''? Fh'e *r(! Fth #:1 or e&en h-her (a" 8e

*ndn- -reat d**cu'te! n pa"n- ther 8''!. Th! ! 8ecau!e

the current rato ! a te!t o* 2uantt" not 2ua't".

The current a!!et! Fere ncrea!ed n the "ear ###) 8ut

t ha! 8een decrea!n-.

The current rato n the "ear ###) $#)#+ t (ore

than #:1 Fhch (ore than the con&entona' ru'e !o t !

con!dered Fhch !hoF! the !tron- po!ton o* *r(.

In the "ear #+#, t ! 8t 'oFer than the con&entona'ru'e 8ecau!e the ca!h ha! 8een 8'oced (ore n n&entore!.

The *r( ha! -ood ca!h and 8an 8a'ance and other current

a!!et! 'e? ntere!t on 8ond!? *Ded depo!t!? and depo!t

Fth 8an!.



2. LIUIDITY RATIO4 UICK RATIO

A &arant o* current rato ! the '2ud rato or 2uc rato Fhch !

de!-ned to !hoF the a(ount o* ca!h a&a'a8'e to (eet ((edate pa"(ent!. It ! o8taned 8" d&dn- the '2ud a!!et! to '2ud 'a8'te!.

L2ud a!!et! are o8taned 8" deducting stock 9in trade *ro( current

a!!et!. L2ud 'a8'te! are o8taned 8" deducting bank overdraft *ro(

current 'a8't".

It ! a'!o ca''ed '2ud rato.

L2ud rato: L2ud A!!et!

L2ud 'a8't"

R!.In M''on!

E:7%'%T ;.2

YEAR 2551-2552 2552-2553 2553-255= 255=-

255>

LIUID ASSETS .#1 /.1 .01 4.,

LIUID

LIABILITIES

+.,1 +.) ,.+1 11.#,

RATIO L.A4L.L; 1.)0 1./+ 1.# .0,



INTERPRETATION:

The dea' '2ud rato ! 1:1. The *r( ha! (ore '2ud po!ton and

t ! -ood *or the co(pan" 8ecau!e the *r( !hou'd ha&e !o(e

ca!h on hand to (eet da'" eDpen!e.

The '2udt" rato n the "ear ###) Fa! (ore co(pared to

other "ear Fh'e n the "ear #+#, Fhch !hoF decrea!e n

the rato to .0, that (ean! the 'a8'te! ha! 8een ncrea!ed n

th! "ear Fhch 'ead! to decrea!e n the rato So? I* the co(pan"

Fant! to 8e n '2ud po!ton The 'a8'te! 'oan ha! decrea!ed up

to certan eDtent. The" ha&e to pa" (ore ad&ance! and t !hoF!

-ood credtForthne!! and the" are ea!'" con&ert8'e a!!et!. It !hoF! -ood po!ton o* *r(. It !hoF! -ood '2udt" po!ton.

The" are a8'e to (eet unp'anned eDpen!e! 8ecau!e the" had (ore

'2ud a!!et!.

3. ACID TEST RATIO

The acd te!t rato ! the (ea!ure o* a8!o'ute '2udt" po!ton o* *r(. The !at!*actor" rato ! ., to 1.. It ! co(pared 8" '2ud

'a8't" and 2uc a!!et!.

ACI% TEST RATIO: UIC< ASSETS



LIUI% LIABILITIES

SIGNI3ICANCE: It ! (ea!ure o* a *r(! a8't" to !er&ce !hort ter(

'a8'te!. The u!e*u'ne!! o* the rato 'e! n the *act that t ! Fde'"

accepted a! the 8e!t a&a'a8'e te!t o* the '2udt" po!ton o* a *r(.

RS n M''on!

E:7%'%T ;.7EAR #1## ###) #)#+ #+#,

UIC< ASSETS /.+#, ,.),,4 ,.4#+1 ,.1+1+

LIUI%

LIABILITIES

+.,1 +.) ,.+1 11.#,

RATIO

.A9L.L

1.1+ 1.+/ .44 .

INTERPRETATION:



Genera''" a 2uc rato o* 1:1 ! con!dered to repre!ent a

!at!*actor" current *nanca' condton. A 2uc rato o* 1:1 or

(ore doe! not nece!!ar'" (p'" !ound '2udt" po!ton.

A co(pan" Fth a h-h &a'ue o* 2uc rato can *'ounder * t ha!

!'oFpa"n-? dou8t*u' and !tretched outna-e rece&a8'e!. On the

other hand? a co(pan" Fth a 'oF &a'ue o* 2uc rato (a" 8e

pro!pern- and pa"n- t! current o8'-aton n t(e? * t ha! 8een

(ana-n- t! n&entore! &er" e**cent'" Ft a contnuou! !ta8't".

The rato n #1## t Fa! 1.1+ 8ut n the "ear ###)t Fa!

(pro&ed and ncrea!e to 1.+/due to ncrea!e n de8tor! and a'!o n

the ca!h and 8an 8a'ance But n the "ear #)#+ $#+#,t Fa! decrea!e or dec'ne .44 $ . re!pect&e'" 8ecau!e o*

decrea!e n de8tor! and a'!o n the 8an and ca!h 8a'ance. Th!

(a" 8e 8ecau!e o* decrea!e n the !a'e!.

=. NET WORKING CAPITAL

Th! rato repre!ent that part o* 'on- ter( *und! repre!ented 8" net

Forth and 'on- ter( de8t Fhch are per(anent'" 8'oced n the current

a!!et!. Certan (n(u( 'e&e' o* !a*et" !toc? per(anent cu!to(er!? unpad

8''! co(pen!ator" (n(u( 8an 8a'ance and (n(u( ca!h 8a'ance are

the eDa(p'e o* the per(anent Forn- capta'

NET >OR<ING CAPITAL: TOTAL CURRENT ASSETS TOTAL CURRENT LIABILITIES

RS. In

M''on

E:7%'%T ;.;



YEAR 2551-2552 2552-2553 2553-255= 255=-255>

CURRENT

ASSETS

0.#/ 4.// 11.+ 1/.01

CURRENT

LIABILITIES

+.,1 +.) ,.+1 11.#,

NET

WORKING

CAPITAL

)./ ,./+ .#) .,

>. CASH GENERATED PER RUPPES OF SALES:

Th! rato !hoF! that percenta-e o* !a'e! Fhch ! a&a'a8'e n ca!h

*or(.

C.G.P.R.O.S.:

P.A.T J %EPRECIATIONJNON CASH E@PENSES ;1

SALES

R!. In M''on

E:7%'%T ;.9



7EAR #1## ###) #)#+ #+#,

P.A.T 1#?+0?11/ 1?/0?101 1/?)+?10 1?0#0?+4

NON CASH

E@PENSES

)+?0##?), #1?#/,?//4 +4?+0/?,4) ,?,04?4##

C.G.P.R +/?#4?/,# )#?+)?4 ?,#1?//) ,0?+10?)41SALES +11?,/+?# )),?1#?11 +1?0+4?)1 +/+?+1?/))

RATIO 11.+4 4., 1.,, 1#.)1

INTERPRETATION:

In the "ear #)#+ the rato that ! percenta-e Fa! h-h that !

1.,, Fhch !hoF! that that (uch percenta-e o* !a'e! Fhch !

a&a'a8'e n the ca!h *or( .Fh'e n the other "ear t ! 'e!! than #)

#+ that ! n the "ear #1## ###)$ #+#, t Fa!

11.+4? 4., $ 1#.)1 re!pect&e'".

6. BANK FINANCE GAP RATIO:

B.3.G.R. TOTAL CURRENT ASSET MPB3 UN%ER TAN%ON

COMMITTEE



MPB3 ndcate! MaD(u( Per(!!8'e 8an 3nance under Tandon

Co((ttee reco((endaton! o* 14/,. The (aD(u( per(!!8'e 8an

*nance Fa! re!trcted to /, o* the Forn- capta' -ap under (ethod o*

8an 'endn-.

Method: a /, C.A C.L8 /, C.A C.L

c /, C.A.C.C.AC.L

E:7%'%T ;.<

7EAR #1 ## ###) #)#+ #+#,

RA>

MATERIAL

#?)44?0+1 #?14+?/4 4?#?)/1 )1?4/4?/0+

>OR< IN

PROGRESS

1?,++?/,0 1,?+14?++ #,?10+?+4/ )1?0#?/,)

3INISHE%

GOO%

,?,?/1) /?,)?,,, 1?1+?/0 1+?/+?1/

CORE

CURRENT

ASSET

10?+,1?)1# #+?/?0 ++?,)1?,+ /0?,+?++

%EBTORS ,,?#41?+ #?4/?0, ,??,# /4?)+?,+/

CURRENT

ASSET

/)?/+#?4,# 0/?)+?/,) 1?,40?) 1,/?001?141



CURRENT

LIABILITIE

S

#1?0),?4) 1+?4+0?)0 #?/0+?), #?,4?1/0

CACL ,1?4?404 /#?0?)/ /4?01)?4, 4,?#41?1)

>CA-CL; 3?@352=1.> >=>1=>.2> >@?65=62.> 1=6?2>@.>

/, C.A ,,)/#1+ ,/#+./, /,++0/#4., 110+104).#,

>C.A;-

C.L

33=12>1 >56?.> >=66=33.> >>?251>.2>

CACCA ,,#41+ #?4/?0, ,??,# /4?)+?,+/

/,CA

CCA

+1+0/) +/##,)1)./, +#+4404 ,4,,+1.#,

>C.A-

CCA;-C.L

1@6326 3226@2.> 2126>633 35?=6.>;

. CAPITAL GEARING RATIO:

It ! the rato o* *D d&dend -earn- capta'Q to uncertan d&dend 8earn-

capta'.

CAPITAL GEARING RATIO

PRE3ERENCE CAPITAL J %EBENTURES

EUIT7 SHARE CAPITAL

E:7%'%T ;.=

7EAR #1## ###) #)#+ #+#,



PRE3. CAP. $

%EBENTURES

,+/4)+0 ,1010+, ,1+ +)4+)+#+

E. SHARE

CAPITAL

)#4) )#4) )#4) )#4

RATIO IN

TIMES

1./ 1.,0, 1.,# 1.)++

INTERPRETATION:

H-her the rato -reater the proporton o* pre*erence !hare capta' and

de8enture! to e2ut" !hare capta. In other Ford! the co(pan" ! !ad

to 8e h-h'" -eared n !uch crcu(!tance! the e2ut" !hare o* the

co(pan" F'' 8e !pecu'at&e n the (aret 8ecau!e e&en 8" the !(a''

ncrea!e n the pro*t the rate o* return on the e2ut" capta' F''

ncrea!e !u8!tanta''". H-her the rato (aor !hare o* the pro*t F'' 8e a8!or8ed 8" the pre*erence d&dend and de8enture ntere!t.

In the "ear #+#, the rato Fa! the 'oFe!t? that ! 1.)++ t(e!.

>hch (a" due to h-her !hare o* the pro*t a8!or8ed 8" the

pre*erence d&dend and de8enture ntere!t



In the "ear #1## t Fa! the h-he!t .e.1./ that (ean! the

po!ton the co(pan" ! !ad to 8e h-h'" -eared 8ecau!e o* the

ncrea!e n !(a'' rate o* return on e2ut".

.2 P%&-+TA7+3+T0 %AT+&

Pro*ta8't" ! an ndcaton o* the e**cenc" Fth Fhch the

operaton! o* the 8u!ne!! are carred on. Poor operatona' per*or(ance (a"

ndcate poor !a'e! and poor pro*t. A LoFer pro*ta8't" (a" ar!e due to

'ac o* contro' o&er the eDpen!e!. Baner!? *nanca' n!ttuton! and other

credtor! 'oo at the pro*ta8't" rato! a! an ndcator Fhether or not the

*r( earn! !u8!tanta''" (ore than t pa"! ntere!t *or the u!e o* 8orroFed

*und! Fhether the u't(ate repa"(ent o* ther de8t! appear rea!ona8'"

certan. OFner! are ntere!ted to noF the pro*ta8't" a! t ndcate! the

return Fhch the" can -et on ther n&e!t(ent!.



1;GROSS PROFIT RATIO:

The dea' rato ! #, *or the tradn- concern Fh'e 1, *or the

(anu*acturn- concern. Th! rato !hoF! the (ar-n 'e*t a*ter (eetn-

(anu*acturn- co!t!. It (ea!ure! the e**cenc" o* producton a! Fe'' a! prcn-.

Gro!! pro*t rato Gro!! pro*t ;1

Sa'e!

R!. In M''on

E:7%'%T ;.>

7EAR #1## ###) #)#+ #+#,GROSS

PRO3IT

1/1+#0/ ++44)1+ /,04 0)0,4,,+

SALES +11,/+# )),1#11 +10+4)1 +/++1/))

RATIO .1+44+/ .1#0+0 .100/4++ .1//+/

RATIO 1+.44+/ 1#.0+0 10.0/4++ 1/./+/

INTERPRETATION:

Gro!! pro*t (ar-n rato ! -ood n the "ear #)#+ that ! near'"

14 Fh'e n the "ear #+#, t ! near'" a8out 10.



It ! 'oFer n ###) 8ecau!e o* ncrea!e n co!t o* the -ood !o'd

n ###)! 1#.)1 percent Fhch ! (ore than ncrea!e n !a'e!

Fhch ! 1##.1+

It ! 8etter n #)#+ 8ecau!e o* the ncrea!e n the !a'e ! +.+

and ncrea!e n the co!t o* -ood !o'd ! on'" )4./ Fhch ! 'oFer than !a'e!.

In the "ear #+#, the ncrea!e n the !a'e ! /#.4# and the

ncrea!e n COGS ! /.+/ Fhch ! 'oFer.

2;NET PROFIT RATIO:

The rato he'p! n deter(nn- the e**cenc" Fth Fhch a**ar! o* the 8u!ne!! are 8en- (ana-ed. It a'!o ndcate! the *r(! capact" to Fth!tand

ad&er!e econo(c condton.

NET PRO3IT RATIO: EARNING A3TER TA@ ;1

SALES

E:7%'%T ;.67EAR #1## ###) #)#+ #+#,

EARNING

A3TER TA@

1#+011/ 1/0101 1/)+10 10#0+4

NET SALES +11,/+# )),1#11 +10+4)1 +/++1/))

RATIO .)) .)#1 .+#+ .)0,

RATIO ).) ).#1 +.#+ ).0,



INTERPRETATION:

The rato ! an e**ect&e (ea!ure to chec the pro*ta8't" o*

8u!ne!!. HoFe&er? con!tant ncrea!e n the net pro*t rato "ear

a*ter "ear ! a de*nte ndcaton o* (pro&n- condton o* the

8u!ne!!. I* the net (ar-n ! nade2uate? the *r( F'' *a' to

ache&e !at!*actor" return on oFner! e2ut".

The pro*t (ar-n ! !hoFn- h-h rate n the "ear #)#+ that

! +.#+ n other "ear t ! !hoFn- 'e!! rate than #) #+

8ecau!e o* ne**cenc" o* ncrea!e n !a'e!.

It ! 8etter n the "ear #)#+ 8ecau!e o* u!n- o* !o(e

*a&ora8'e condton! 'e? ncrea!e n the !a'e! e**ort!? u!e o* 'oF producton co!t techn2ue! and tr" to co&er (ore (aret !hare

(ae e**ect on pro*t n the "ear #)#+.

3;OPERATING PROFIT RATIO:

Operatn- pro*t rato can 8e *ound out a*ter eDc'udn- a'' non

operatn- eDpen!e! 'e ntere!t and taDe! that (ean! earnn- 8e*ore ntere!t

and taD.



OPERATING PRO3IT RATIO OPERATING PRO3IT ;1

SALES

E:7%'%T ;.15

7EAR #1## ###) #)#+ #+#,OPERATING

PRO3IT

#1414 1,,,1#4 #)#)4/0 #/,00#

SALES +11,/+# )),1#11 +10+4)1 +/++1/))

RATIO .,) .+ .,/ .,0

RATIO ,.#, +.+ ,./) ,.01,

OPERATING COST RATIO: OPERATING COST ;1

SALES

E:7%'%T ;.11

7EAR #1## ###) #)#+ #+#,

OPERATING

COST

)0/)4 ))1+1, )4+/#44/ +/#,#,,+

SALE +11,/+# )),1#11 +10+4)1 +/++1/))

RATIO .4)4 .404 .40/ .44

RATIO 4).4, 40.4 40.# 44.,4#



INTERPRETATION

Th! rato ! -&n- the o&era'' pcture o* the *r(. A! the pro*t are

h-h? the *r(! a8't" to pa" d&dend? ntere!t? re!er&e! *or de8t!

etc. ! !u**cent and the return! on ther n&e!t(ent!. >h'e 'oF

pro*t or 'o!!e! !hoF! ne**cenc" o* the *r( to !u!tan the

operaton! o* the 8u!ne!!.

In the "ear #1##? the operatn- pro*t rato o* the *r( !hoFed

the rato o* ,.#,. It Fa! !'-ht'" decrea!n- n the "ear ###)

that ! +.+ that (ean! the co(pan" ! *acn- h-h operatona'

eDpen!e! Fhch drect'" e**ect to the pro*t. The co(pan" ! a8'e to

earn the pro*t on'" Fhen the !a'e! ! ncrea!e 8ut a-an n the "ear #)#+ $ #+#, t ! ncrea!n- that ! ,./) $ ,.01, that

(ean! the !a'e n 8oth "ear ha! 8een ncrea!ed.

=;RATE OF RETURN ON IN<EST)ENT:

It ! a'!o noFn a! return on capta' e(p'o"ed or return on a!!et!. It(ea!ure! hoF e**cent'" the capta' ! e(p'o"ed.

R.O.R.O.I EBIT ;1

TOTAL ASSETS



INTERPRETATION:



The rate o* return on n&e!t(ent n the "ear #1## Fa! the

h-he!t co(pare to other "ear 8ecau!e pro*t (ar-n ,.#, and the

a!!et! turno&er Fa! #.1# t(e! !o the rate o* return on n&e!t(ent

Fa! a8out 11.1#.

In the "ear ###) t decrea!ed to .0, due decrea!e n the pro*t (ar-n and the a!!et turno&er that ! +.+ $ 1.+0 t(e!

re!pect&e'".

In the "ear #)#+$ #+#, the rate o* return on the

n&e!t(ent Fa! ncrea!ed due to ncrea!ed n the pro*t (ar-n and

the a!!et! turno&er that ! n the "ear #)#+ ,./) $ 1.+/

t(e! Fh'e n the "ear #+#, ,.01 $1., t(e! that ! the

rate o* return on the n&e!t(ent! Fa! 0.+, $ 4.,0.

>; RATE OF RETURN ON EUITY:

It (ea!ure! the pro*ta8't" o* e2ut" *und! n&e!ted n the *r(.

Here the pro*t! *or the e2ut" F'' 8e con!dered a*ter deductn-

pre*erence d&dend.

I* no pre*erence !hare capta' eD!t! n the 8a'ance !heet! then net

pro*t F'' 8e taen n the nu(erator. The *or(u'a o* rate o* return ! a!

*o''oF!:

RATE O3 RETURN

NET PRO3IT PRE3ERENCE %I6I%EN% ; 1

NET >ORTH

R!. In (''on

E:7%'%T ;.1



7EAR #1## ###) #)#+ #+#,

NET

PRO3IT

A3TER

%I6I%EN%

#.+ ).+4 ,.14 .+

NET

>ORTH

/.#0 0.0+ 1.,/ 1#.,

RATIO .)+ .)4 .+4 .,,

RATIO ))./4 )4.+0 +4.1 ,,.1

INTERPRETATON:

Return on e2ut" o* the co(pan" ha! 8een ncrea!n- "ear 8" "ear that ! *ro( #1## ))./4 to ,,.1, n the "ear #+#,.

That (ean the e2ut" *und! n&e!ted n the co(pan"9 *r( ! -ood

Fhch !hoF! that the pro*ta8't" o* the 8u!ne!! ! ncrea!n- "ear

8" "ear.

6; RETURN ON ASSETS:

Th! rato ! he'p*u' n noFn- the product&t" o* the tota' a!!et!. ItF'' 8e proper to nc'ude the ntere!t n co(putn- the return on tota' a!!et!.

The o8ect&e o* co(putn- the return on the tota' a!!et! ! to *nd out hoF

e**ect&e'" the *und! poo'ed to-ether ha&e 8een u!ed.

RETURN ON ASSETS PRO3IT A3TER TA@ ;1

TOTAL ASSETS



E:7%'%T ;.1;

7EAR #1## ###) #)#+ #+#,

PRO3IT

A3TER TA@

1#+011/ 1/0101 1/)+10 10#0+4

TOTAL

ASSETS

14+))+11 ##/))1/ #/#,)#0) #0/40,#+

RATIO .+ .+/ .) .)

RATIO .+# +./+ .#, .),

INTERPRETATION:

The 8u!ne!! can !er&ce on'" Fhen the return on the capta'

e(p'o"ed ! (ore than the co!t o* capta' e(p'o"ed n the

8u!ne!!.

The rate o* return on a!!et! Fa! +./+ durn- the "ear ###)

8ecau!e there ! decrea!e n a!!et! (an'" n the current a!!et!

Fh'e t Fa! ncrea!n- n the "ear #)#+ $ #+#, that

to .#, $ .), re!pect&e'" 8ecau!e o* (ore pro*t a! the tota'a!!et! ha&e a'!o ncrea!ed. It (ean! the n&e!t(ent! n a!!et!

-&e *a&ora8'e return!.

.4 T(%" &*E% : ACT+*+T0 %AT+&



Turno&er or act&t" Rato! are e(p'o"ed to e&a'uate the e**cenc"

Fth Fhch the *r( (ana-e! and ut'5e! t! a!!et!. 3und! o* credtor! and

oFner! are n&e!ted n &arou! a!!et! to -enerate !a'e! and pro*t. So? the!e

rato! are he'p*u' n noFn- the !peed Fth Fhch a!!et! are 8en-co(pared or turned nto !a'e!. It !hoF! re'aton!hp 8etFeen !a'e! and

a!!et!.

1; A. IN<ENTORY 4 STOCK TURNO<ER RATIO:

In&entor" turno&er ! a &a'ua8'e (ea!ure o* !e''n- e**cenc" andn&entor" 2ua't". It eDpre!!e! the *re2uenc" Fth Fhch a&era-e 'e&e' o*

n&entor" n&e!t(ent ! turned o&er throu-h operaton!. It !-n*e! the

'2udt" o* the n&entor".

Th! rato ndcate! hoF (an" t(e! n a "ear the !toc ! turno&er.

H-her the rato 8etter t !.

STOC< TURNO6ER RATIO COST O3 GOO% SOL%

A6ERAGE STOC<

WHERE AVERAGE STOCK

OPENING STOC< J CLOSING STOC<

#

E:7%'%T ;.19

7EAR #1## ###) #)#+ #+#,

COGS )+40,4/)4 #4+#4/ )#,40#/1 )4#1/4

A6ERAGE

STOC<

#0## #+#1+0# )/4)0#., ,),1,4,.,

RATIO In

t(e!

1.0# 1#.1/ 0.,4 ,.40



INTERPRETATION:

In&entor" turno&er rato ndcate! the re'aton!hp 8etFeen the co!t

o* -ood !o'd and the n&entor" 'e&e'. H-her the n&entor" rato?

'ar-er the a(ount o* !a'e!? the !(a''er the a(ount o* the capta'

ted up n n&entor" and the (ore current the (erchand!e !toc.

Nor(a''" to4 ! hea&" turno&er rato !uppo!e * t ! 'e!! than th!

that (ean! ether !toc ! not !e''a8'e or e**ort *or (aretn- are

'acn-.

The rato ! &er" (portant n ud-n- the a8't" o* (ana-e(ent

Fth Fhch t can (o&e the !toc. H-her the rato (ore pro*ta8'e

the 8u!ne!! Fou'd 8e.

In other Ford! * the turno&er ! h-her the or-an5aton or the *r(

can !e'' t! -ood Fth 'e!! (ar-n o* -ro!! pro*t con&er!e'" 'oF

turno&er ndcate! accu(u'aton o* !'oF (o&n-? a8!o'ute or 'oF

2ua't" -ood Fhch ! dan-er !-na' to the (ana-e(ent.

The chart !hoF! that the !toc turno&er rato ! decrea!n- "ear 8"

"ear that ! n the "ear #1## t Fa! the h-he!t that ! 1.0#

Fhch dec'ne to ,.40 n the "ear #+#,.Th! !hoF! that the'oF turno&er ndcate! accu(u'aton o* !'oF (o&n-? a8!o'ute or

'oF 2ua't" -ood .



1; B. A<ERAGE AGE OF IN<ENTORIES:

Th! rato ndcate! the Fatn- perod o* the n&e!t(ent! n the

n&entore! and ! (ea!ured n da"!? Fee or (onth!. In&entor" turno&er and

a&era-e a-e o* the n&entore! are n&er!e'" re'ated. H-h n&entor" turno&er rato ! -ood! 8ut 'on-er a-e o* the n&entor" ! 8ad a! t ndcate! d'e

8'ocn- o* (one" n the n&entore!.

R!. In M''on

E:7%'%T ;.1<

7EAR #1## ###) #)#+ #+#,%A7S ) ) ) )

IN6ENTOR7

TURNO6ER

1.0# 1#.1/ 0.,4 ,.40

A6ERAGE AGE O3

IN6ENTORIES

IN %A7S

#1.+ #4.,0 +1.41 .#

INTERPRETATION:



In the "ear #1## t Fa! the 'oFe!t that ! #1 da"! and t Fa!

ncrea!n- "ear 8" "ear to ) da"! +# da"! $ da"! n the "ear

###)? #)#+ $#+#, re!pect&e'" Fhch !hoF! or ndcate! that d'e 8'ocn- o* (one" n the n&entore! "ear 8"

"ear Fhch ! not -ood *or the co(pan" or *r(. To reduce the

a&era-e a-e o* the n&entore!? n&entor" turno&er !hou'd 8e

ncrea!ed a! Fe'' a! the 8'ocn- o* the (one" !hou'd 8e a&oded.

2; TOTAL ASSETS TURNO<ER:

The a(ount n&e!ted n 8u!ne!! ! n&e!ted n a'' a!!et! *or earnn-

pro*t.

CAUTION:

I* the a!!et! are o'd and (ore deprecaton ha! 8een deducted than the

turno&er F'' !een (ore Fhch n *act doe! not !hoF e**cenc".

TOTAL ASSETS TURNO6ER SALES

TOTAL ASSETS

E0hibit ;.1=

YEAR 2551-2552 2552-2553 2553-255= 255=-255>

SALES +11,/+# )),1#11 +10+4)1 +/++1/))

TOTAL

ASSETS

14+))+11 ##/))1/ #/#,)#0) #0/40,#+

TOTALASSETS

TURNO6ER

#.1# 1.+0 1.+/ 1.,



INTERPRETATION:

3o''oFn- pont! !hou'd 8e ept n (nd Fh'e nterpretn-

T"pe o* a!!et! Fhether neF or o'd $ 8" Fhch (ethod

deprecaton ! pro&ded.

The n&e!t(ent n *Ded a!!et! chan-e! n the t"pe o* 8u!ne!! *or

eDa(p'e !tee' 8u!ne!! n&e!t(ent n the *Ded a!!et! ! &er" h-h.

Sa'e! depend upon o&era'' e**cenc" n the part o* (ana-e(ent $

not on'" on the u!e o* *Ded a!!et!.

It ! not a'Fa"! the ca!e that (ore the !a'e! (ore the pro*t? *or th!

purpo!e d**erence 8etFeen !e''n- prce and co!t o* !a'e! !hou'd 8e taen nto account.

The (ethod o* &a'uaton o* a!!et! and n partcu'ar (ethod o*

&a'uaton o* !toc (u!t 8e eDa(ned.

Here n the -raph n the "ear #1## t Fa! h-her that ! #.1#

than t decrea!e! to 1.+0 t(e! n the "ear ###) t (a" due to

h-h n&e!t(ent n the *Ded a!!et! than n the "ear #)#+ $

#+#, t ncrea!e! to 1.+/ $1., t(e! re!pect&e'".

3;NET FIED ASSETS TURNO<ER

Th! rato (ea!ure! !a'e! per rupee! o* n&e!t(ent n *Ded a!!et!.

Th! rato !uppo!ed to (ea!ure the e**cac" Fth Fhch *Ded a!!et! are

e(p'o"ed. A h-h rato ndcate! a h-h de-ree o* e**cac" n a!!et!

ut'5aton and &ce&er!a.



3I@E% ASSETS TURNO6ER NET SALES

NET 3I@E% ASSETS

E:7%'%T ;.1>

7EAR #1## ###) #)#+ #+#,

NET SALES +11,/+# )),1#11 +10+4)1 +/++1/))

NET 3I@E%

ASSETS

1))#01, 1++)1#+1, 1/4#4+ 1/#,0)1)

RATIO IN

TIMES

).4 #.)# #.#/ #./,

INTERPRETATION:

A *Ded a!!et! turno&er rato ha! ncrea!ed re*'ect! the e**cent u!e

o* *Ded a!!et.

But n the -raph t !hoF! n the "ear #1## t Fa! h-he!t that

! ).4 t(e! and t decrea!ed to #.)#?#.#/ $#./, t(e! n the "ear

###)? #)#+? $ #+#, re!pect&e'"

It ! due to decrea!e n the net !a'e! 8" 10.,/ n the "ear ##

#) and n the #)#+ decrea!ed 8" #.) 8" tan- the "ear

#1## a! the 8a!e "ear Fh'e ther Fa! an ncrea!e n the

percenta-e o* the !a'e! n the "ear #+#, 8" 1,.).



It (a" 8e due to ncrea!e n the *Ded a!!et! "ear 8" "ear that ! n

the "ear ###) t Fa! 0.#0 and the "ear #)#+ t Fa!

)#.// and t decrea!e! to #4.+0 n the "ear #+#,.

=; NET WORKING CAPITAL TURNO<ER:

Th! rato (ea!ure! !a'e! per rupee! o* n&e!t(ent n the Forn-

capta'. Th! rato !uppo!ed to (ea!ure the e**cac" Fth Fhch Forn-

capta' ! e(p'o"ed. A h-h rato ndcate! a h-h de-ree o* e**cac" n

Forn- capta' ut'5aton and &ce&er!a.

NET >OR<ING CAPITAL TURNO6ER

SALES

NET >OR<ING ASSETS

E:7%'%T ;.16

7EAR #1## ###) #)#+ #+#,

NET SALES +11,/+# )),1#11 +10+4)1 +/++1/))

NET

>OR<ING

ASSETS

0#/1/# 1,#1 4,,/,04 11,+14,1

N.>.C.T +.40 ,.+4 +.# +.11

INTERPRETATION:



IN #1## the rato Fa! +.40 t(e! and Fa! ncrea!ed n the

"ear ###) to ,.+4t(e! than t decrea!e! to +.# t(e! $ +.11

t(e! n the "ear #)#+ $ #+#,.

It ! due to decrea!e n the net !a'e! 8" 10.,/ n the "ear ##

#) and n the #)#+ decrea!ed 8" #.) 8" tan- the "ear #1## a! the 8a!e "ear Fh'e ther Fa! an ncrea!e n the

percenta-e o* the !a'e! n the "ear #+#, 8" 1,.).

>; DEBTORS TURNO<ER:

The ana'"!! o* the de8tor! turno&er rato !upp'e(ent! the

n*or(aton re-ardn- the '2udaton o* one te( o* current a!!et! o* the*r(. It (ea!ure! hoF rapd'" de8t! are co''ected. It ! a (ea!ure o*

a!!e!!n- the a8't" o* the co(pan" to pro(ote !a'e! Fth (n(u(

n&e!t(ent! n unco''ected de8tor!. It ndcate! t(e'" 2uc co''ecton or

pre(atured co''ecton! throu-h ca!h d!countn- ncent&e!? 8'' d!countn-

or *actorn- the 8oode8t!.

%EBTORS TURNO6ER CRE%IT SALES

A6ERAGE %EBTOR

E0hibit ;.25

7EAR #1## ###) #)#+ #+#,

NET SALES +11,/+# )),1#11 +10+4)1 +/++1/))

A6ERAGE

%EBTORS

,,#41+ ,41#4)#., ,4,100., //),44.,

%EBTOR

TURNO6ER

IN TIMES

/.++ ,./ ./, /.1

%A7S ) ) ) )

%EBT

COLLECTION

PERIO%

+0.) ).,# ,).)# ,1.)/



INTERPRETATION:

a %EBTORS TURNO6ER RATIO:

%e8tor! con!ttute an (portant con!ttuent o* current a!!et! and there*ore

the 2ua't" o* de8tor! to a -reat eDtent deter(ne! a *r(! '2udt". Theh-her the rato the 8etter t !? !nce t Fou'd ndcate that de8t! are 8en-

co''ected (ore pro(pt'". 3or (ea!urn- the e**cenc"? t ! nece!!ar" to !et

a *-ure? a rato 'oFer than the !tandard F'' ndcate ne**cenc".

8 %EBT COLLECTION PERIO%:



%e8tor! co''ecton perod (ea!ure! the 2ua't" o* de8tor! !nce t (ea!ure!

the rapdt" or !'oFne!! Fth Fhch (an" ! co''ected *ro( the(.

A !horter co''ecton perod (p'e! pro(pt pa"(ent 8" de8tor!. It reduce!

the chance! o* 8ad de8t!. A 'on-er co''ected perod (p'e! too '8era' and

ne**cent credt co''ecton per*or(ance. In -enera'? the a(ount o*

rece&a8'e! !hou'd not eDceed )+ (onth! credt !a'e!.

%urn- "ear #1##? the de8tor! turno&er rato Fa! /.++ Fhch

!hoFed the 8etter co''ecton po!ton o* the *r(. It (ean! the

out!tandn- Fa! 'e!! and the co''ecton perod Fa! !hort.

But n the "ear ###) the rato dec'ne! ,./t(e and the

co''ecton perod Fa! ncrea!ed. It !hoF! the 'e!! e**ect&e

co''ecton po'c" o* the *r(. It (ae! e**ect to the need *or theForn- capta'. The (an rea!on *or dec'nn- trend o* de8t

co''ecton rato ! the 'oF a(ount o* !a'e! and (ore nu(8er! o*

de8tor!.

In the "ear #)#+ $#+#, the -raph !hoF! the ncrea!e n

the trend o* the de8tor! turno&er rato and dec'ne n the de8t

co''ecton perod t (a" 8e due to the nu(8er! o* the de8tor! (a"

8e decrea!ed and the a(ount o* !a'e! ha! 8een ncrea!ed.

6; CREDITORS TURNO<ER RATIO:

It ndcate! the !peed Fth Fhch the pa"(ent! *or credt purcha!e are

(ade to the credtor!. It ! a'!o he'p*u' n noFn- the po'c" o* ca!h

pa"(ent! to the credtor!.

CRE%ITORS TURNO6ER RATIO: TOTAL PURCHASES

A6ERAGE CRE%ITORS.

E:7%'%T ;.217EAR #1## ###) #)#+ #+#,



PURCHASES #0)))4+) #,+4)+0 #),/++) #4/+,),)0

A6ERAGE

CRE%ITORS

1)0#,)/4 110,4 1)41,,10., ),,),

RATIO IN

TIMES

#., #1.+4 1.04 0.)+

%A7S ) ) ) )

PA7MENT

PERIO%

1/., 1./, #1.)1 +).1,

INTERPRETATION:

The credtor! turno&er rato ndcate! a8out the pro(ptne!! or

other n (an- pa"(ent o* credt purcha!e!. The h-her credtor!



turno&er rato or a 'oFer credt perod eno"ed rato !-n*e! that

the credtor! are 8en- pad pro(pt'". Thu!? enhancn- the credt

Forthne!! o* the co(pan". HoFe&er? a &er" *a&ora8'e rato to th!

e**ect a'!o !hoF! that the 8u!ne!! ! not tan- *u'' ad&anta-e o*

credt *ac'te! Fhch can a''oF 8" the credtor!.

%urn- the "ear ###) $ #1## the rato Fa! #1.+4 $

#., t(e! re!pect&e'" Fhch !hoF! the 2uc pa"(ent! *or the

credt purcha!e. It (a" 8e 8ecau!e o* 'e!! credt *ac'te! u!ed 8"

the *r(. But the turno&er rato ! decrea!n- &er" rapd'" durn-

the "ear #)#+ $ #+#, that ! to 1.04 $ 0.)+ t(e!.

The purcha!e! durn- the!e "ear! are -on- on decrea!n- 8ut the

credt purcha!e are (ore So? the turno&er rato! are 'oF! and the

pa"(ent perod! are 8eco(e (ore that ! #1 da"! and +) da"! n

the "ear #)#+ and #+#,. It (ae! e**ect on Forn-

capta' re2ure(ent o* the co(pan".



. CAP+TA3: 3E*E%A#E : -+"A"CE

ST%(CT(%E %AT+&S

To ud-e the 'on- ter( *nanca' po!ton o* the *r(? *nanca''e&era-e or capta' !tructure rato ! ca'cu'ated. It ndcate! (D o* the *und!

pro&ded 8" the oFner! and the 'ender!. Lon-ter( credtor!? 'e de8enture!

ho'der!? *nanca' n!ttuton! !tren-th. In *act? the *r( !hou'd ha&e a !tron-

!hort ter( a! Fe'' a! 'on- ter( *nanca' po!ton.

Le&era-e can For n oppo!te drecton a'!o. I* the co!t o* de8t !

h-her than the *r(! o&era'' rate o* return? the earnn-! o* !hareho'der! F''

8e reduced. I* the *r( ! actua''" '2udated *or nonpa"(ent o* de8t

ho'der! due!? the For!e !u**er! F'' 8e !hare ho'der!.

1; PROPRIETORY RATIO:

The rato ndcate! the proporton o* tota' a!!et! *nanced 8" oFner!. It

! a &arant o* de8t e2ut" rato. It e!ta8'!hed re'aton!hp 8etFeen the

propretor! *und! and the tota' a!!et!. Th! rato *ocu!e! the attenton on the

-enera' *nanca' !tren-th o* the 8u!ne!! enterpr!e. H-her the rato

!tron-er the po!ton o* enterpr!e!. It ndcate! that propretor ha&e pro&ded(ore *und to purcha!e the a!!et!. I* t ! 1 that ! 8u!ne!! doe! not u!ed

an" out!de *und that ! not u!n- t! reputaton $ 8rn-n- ca!h *ro(

out!de? 8rn-n- (ore a!!et! $ (u'tp'"n- 8u!ne!!. Th! opportunt" !

'o!t 8" the con!er&at&e approach.

PROPRITEOR RATIO: PROPRIETORS 3UN% ;1

TOTAL ASSETS

E:7%'%T ;.22



7EAR #1## ###) #)#+ #+#,

PROPRIETORS

3UN%

+/4) ,#4) ,#4) ,#4

TOTAL ASSETS 14+))+11 ##/))1/ #/#,)#0) #0/40,#+

RATIO #+.,+ #).#1 14.)) 10.)

INTERPRETATION

It ! a &arant o* de8t e2ut" rato. The rato ! o* partcu'ar

(portance to the credtor! Fho can *nd out the proporton o*

!hare ho'der! *und! n the tota' a!!et! e(p'o"ed n the 8u!ne!!.

A h-h rato F'' ndcate a re'at&e'" 'tt'e dan-er to the credtor!?

etc n the e&ent o* *orced reor-an5aton or Fndn- up o* the

co(pan". A 'oF rato ndcate! -reater r! to the credtor! !nce n

the e&ent! o* 'o!!e! a part o* ther (one" (a" 8e 'o!t 8e!de! 'o!!

to the propretor! o* the 8u!ne!!. The h-her the rato the 8etter t

!. A rato 8e'oF , (a" 8e a'ar(n- *or the credtor! !nce the"

(a" ha&e to 'o!e hea&'" n the e&ent o* co(pan"! '2udaton on

account o* hea&" 'o!!e!.

3or a'' the "ear!? the percenta-e ! !hoFn- 8e'oF ,. It (ean!

the *und! are &er" 'oF a! co(pared to the tota' a!!et!. In the "ear #+#,? t ! the 'oFe!t and n the "ear#1## t !hoF!

#+.,+ Fhch ! the h-he!t n a'' three "ear!.

2; EUITY RATIO:



Th! rato can 8e *ndn- out 8" d&dn- net Forth to tota' capta'

e(p'o"ed. Th! rato *ocu!e! the attenton on the -enera' *nanca' !tren-th

o* the 8u!ne!! enterpr!e. H-her the rato !tron-er the po!ton o*

enterpr!e.

EUIT7 RATIO: NET >ORTH

TOTAL CAPITAL EMPLO7E%

E:7%'%T ;.27EAR #1## ###) #)#+ #+#,

NET >ORTH /#/14 00+1#4 1,/+++#1 1#+,1,1TOTAL

CAPITAL

EMPLO7E%

1/40#4,10 #0+4/1+, #,/4/0 ##++0,+,

RATIO .+ .+# .+# .+

3; DEBT RATIO:



Th! rato can 8e *ound out 8" d&dn- 'on- ter( de8t to tota' capta'

e(p'o"ed .Th! rato! are ca'cu'ated to (ea!ure the *nanca' r!.

%EBT RATIO LONG TERM %EBT

TOTAL CAPITAL EMPLO7E%

E:7%'%T ;.2;

7EAR #1## ###) #)#+ #+#,

LONG

TERM

%EBTS

1//0#0 1#411 1+,#,#,/ 1+14440+

TOTAL

CAPITAL

EMPLO7E%

1/40#4,10 #0+4/1+, #,/4/0 ##++0,+,

RATIO . .,0 .,0 .,+

=; DEBT EUITY RATIO:



Le&era-e rato! are ca'cu'ated to (ea!ure the *nanca' r! and the

*r(! a8't" o* u!n- the de8t *or the 8ene*t o* the !hare ho'der!. It

deter(nn- the eDtent to Fhch operatn- pro*t! are !u**cent to co&er the

*Ded char-e!.

%EBT EUIT7 RATIO: LONG TERM %EBTS

NET >ORTH

E:7%'%T ;.29

7EAR #1## ###) #)#+ #+#,

LONG

TERM%EBTS

1//0#0 1#411 1+,#,#,/ 1+14440+

NET

>ORTH

/#/14 00+1#4 1,/+++#1 1#+,1,1

RATIO 1.+/ 1.) 1.)/ 1.10

INTERPRETATION:

The %EBT EUIT7 RATIO ha! (portant *ro( the credtor! and

oFner! pont o* &eF and a'!o *or the *r( t!e'*. The rato can 8e



taen a! dea' * t ! 1:1 there cannot 8e a r-d ru'e? t F'' depend

upon the crcu(!tance!. H-h rato !hoF! a 'ar-er !hare o*

*nancn- 8" the credtor! n re'aton to the cu!to(er! and 'oF rato

(p'e! a !(a''er c'a( o* credtor!.

In #1##? the rato Fa! h-h a! co(pared to other "ear

8ecau!e o* h-h a(ount o* 'on- ter( de8t! and 'e!! net Forth. In

the "ear #+#,? the rato 1.10 Fa! !at!*actor" n the credtor!

pont o* &eF. It !hoF! that co(pan" ha! !ucce!!*u''" adopted the

po'c" o* tradn- o* e2ut" Fhch re!u't! n a h-her return to e2ut"

!hare ho'der!. In the "ear #1## the rato Fa! h-he!t 8ecau!e

o* (ore a(ount! o* !ecured 'oan!. It ndcate! that the co(pan"

depend! upon the 8an 'oan ! and (ore on e2ut" capta' *or the

"ear #1##.

>; DEBT TO TOTAL ASSETS RATIO

The rato ndcate! the e**ect o* the u!e o* *Ded ntere!t or d&dend

!ource! o* the *und! on the earnn-! a&a'a8'e to the e2ut" !hare ho'der!.

%EBT TO TOTAL ASSETS RATIO

TOTAL LONG TERM %EBT

TOTAL ASSETS

E:7%'%T ;.2<

7EAR #1## ###) #)#+ #+#,

LONG

TERM

%EBTS

1//0#0 1#411 1+,#,#,/ 1+14440+

TOTALASSETS

14+))+11 ##/))1/ #/#,)#0) #0/40,#+

RATIO .,, .,) .,) .+4



INTERPRETATION:

Th! rato ! !('ar to de8t e2ut" rato n re!pect o* the capta'

!tructure o* a *r(. Lon- ter( credtor! are ntere!ted n th! rato.

It ndcate! the eDtent to Fhch the *r( ha! re'ed on de8t n

*nancn- a!!et!. A *r( !hou'd ha&e nether a h-h rato nor a &er"

'oF de8t to tota' a!!et! rato. H-h rato ! a 8urden *or credtor!

and a'!o a h-h'" de8t 8urden *r( F'' *nd d**cu't" n ra!n-

*und! *ro( credtor! and oFner! n *uture.

3ro( the a8o&e -raph Fe can !ee that n a'' the "ear ? the rato are

!at!*actor" 8ecau!e o* 'e!! proporton o* 'on- ter( de8t a!co(pared to tota' a!!et!. %urn- the "ear #+#, Fa! the

'oFe!t 8ecau!e o* h-h ncrea!e n the *Ded a!!et! and the current

a!!et! Fhere (an'" de8tor! and ca!h $ 8an 8a'ance are ncrea!ed

Fh'e the 8an 'oan! are decrea!n-. It ndcate! that the

n&e!t(ent n *Ded a!!et! ! done throu-h nterna' !ource! or *ro(

e2ut" !hare capta'. It (ean! that durn- the "ear #+#,? the

*r( Fa! 'e!! dependent on 'oan!.

6; FIED ASSETS TO NET WORTH RATIO:

It !hoF! the re'aton!hp 8etFeen the capta' he'd 8" e2ut" capta'?

re!er&e! and the net *Ded a!!et!. It (ean! hoF (uch e2ut" Fe needed

a-an!t the *Ded a!!et!.

3I@E% ASSETS TO NET >ORTH RATIO



NET 3I@E% ASSET

NET >ORTH

E:7%'%T ;.2=7EAR #1## ###) #)#+ #+#,

NET 3I@E%

ASSETS

1))#01, 1++)1#+1, 1/4#4 1/#,0)1)

NET

>ORTH

/#/14 00+1#4 1,/+++#1 1#+,1,1

RATIO 1.0) 1.) 1./ 1.+)

INTERPRETATION

The rato !hou'd not 8e (ore than 1. I* t 'e!! than 1? t !hoF! that a

part o* the Forn- capta'? Fhch ! (ore or 'e!! o* a *Ded nature.

The dea' rato ! ./. In other Ford!? the (ore the !hareho'der!

contr8uton ! ted up n *Ded a!!et! the 'e!! ! the a(ount

a&a'a8'e *or the n&e!t(ent n current a!!et!? t (ean! that

credtor! ha&e contr8uted toFard! 'ar-e proporton o* the net *Ded

a!!et!.

The h-her the rato the 'e!! the proporton *or credtor!? Fhere net

*Ded a!!et! eDceed! net Forth. It (a" 8e a !-na' *or (an"

ndu!tra' concern! Fhch !hou'd p'an *or an addtona' e2ut"

capta'.

In a'' the "ear t ! (ore than the dea' rato that ! ./? t (ean!

that *und! Fere 8'oced n the *Ded a!!et! that (ean! the '2udt"

po!ton o* a *r( For!e 8ut n the "ear #+#, Fhch !

!hoFn- the rato o* 1.+) ! 'e!! co(pare to other "ear that (ean!



the *r( ! (pro&n- that (ean! there ! a !(a'' decrea!e n the

*Ded a!!et! Fh'e the '2udt" po!ton ! 2ute (pro&n-.

; INTEREST CO<ERAGE RATIO:

Th! rato ndcate! the de8t! !er&cn- capact" o* a *r( n !o *ar a!

*Ded ntere!t on 'on- ter( 'oan! ! concerned. It !hoF! hoF (an" t(e! the

ntere!t char-e! are co&ered 8" the Earnn- 8e*ore Intere!t and TaD EBIT

out o* Fhch the" F'' 8e pad.

INTEREST CO6ERAGE RATIO EBIT

INTEREST

E:7%'%T ;.2>

7EAR #1## ###) #)#+ #+#,

EBIT #1414 1,,,1#4 #)#)4/0 #/,00#

INTEREST #++/40) 4001)0+ 10/41 1,,4+,+)

RATIO 1. 1.,/ 1.+) 1.//

INTERPRETATION:

The !tandard *or th! rato *or an ndu!tra' co(pan" ! that ntere!t

char-e! !hou'd 8e co&ered !D to !e&en t(e!. 3ro( the credtor!

pont o* &eF the 'ar-er the co&era-e? the -reater the a8't" o* the

*r( to hand'e *Ded char-e! 'a8'te! and the (ore a!!ured the

pa"(ent o* ntere!t to the credtor!. Too h-h the rato (a" ndcate



unu!ed de8t capact". In contra!t? a 'oF rato ! a dan-er !-na' that

the *r( ! u!n- eDce!!&e de8t and doe! not ha&e the a8't" to

o**er a!!ured pa"(ent o* ntere!t to the credtor!.

3ro( ta8'e Fe can !ee that the ntere!t co&era-e ! &er" 'oF n the

"ear #1## that ! 1., and n the "ear ###)? #)#+

$ #+#, t Fa! 1.,/ 1.+) $ 1.//t(e! . t (ean! that the

eDtent o* earnn- a&a'a8'e *or the pa"(ent o* ntere!t ! not 8etter .

It ! 8ecau!e the pro*t ! h-her and the ntere!t on *Ded 'oan! !

'oF

?; DEBT SER<ICE CO<ERAGE RATIO:

Th! rato ndcate! hoF (an" t(e! the pro*t co&er! the pa"(ent! o*

prncpa' and the ntere!t on 'oan.

>hen a credtor! or a 8an 'end! (one" to the 8u!ne!!? the" a'Fa"!

eDa(ne the repa"n- capact" o* the 8orroFer. The" F'' tr" to a!certan

Fhether the 8orroFer F'' a8'e to repa" n!ta''(ent o* prncpa' a(ount and

the ntere!t re-u'ar'"? %e8t !er&cn- (ean! pa"(ent o* prncpa' n!ta''(ent

and ntere!t 8oth. Nor(a''" co(pan" (ae! !uch pa"(ent *ro( earned pro*t or retaned pro*t o* the pa!t pro*t o* the pa!t "ear!. There*ore the

proporton o* the net pro*t a! co(pared to the a(ount o* the prncpa'

n!ta''(ent J ntere!t ! a!certaned. Th! proporton or rato ! ca''ed %EBT

SER6ICE CO6ERAGE RATIO.

Here the pro*t pro*t a&a'a8'e *or the pa"(ent o* the de8t.

In other Ford!:

PRO3IT PAT J %EP. J INT. PA7ABLE ON LOAN.

%.S.C.R. PRO3IT P.A.T. J %EP. JINT.

INSTALLMENT O3 PRINCIPAL SUM J INTEREST

E:7%'%T ;.26



7EAR #1## ###) #)#+ #+#,

PRO3IT +,0,# )1/)1#, 1/ //44+

PRINCIPAL

J INT.

1#/,1,011 1#44//, 1111)1/ 1,/,41,#/

RATIOIN TIMES .)/ .#+ .+1 .+4

INTERPRETATION:

The rato *or a'' the "ear ! not -ood that (ean! the pro*t *or a''

the "ear ! not !u**cent *or the pa"(ent o* the de8t.

In the "ear #1## t Fa! .)/ and n the "ear ###)?#)

#+? #+#, t Fa! .#+? .+1 $ .+4 t(e! re!pect&e'".

.5 *A3(AT+&" %AT+&S



6a'uaton rato! are the re!u't! o* the (ana-e(ent o* a8o&e *our

cate-ore! o* the *unctona' rato!. 6a'uaton rato! are -enera''" pre!ented

on a per !hare 8a!! and thu! are (ore u!e*u' to the e2ut" n&e!tor!.

1; EARNING PER SHARE EPS;

Th! ! the (ea!ure(ent o* ca'cu'atn- the pro*ta8't" o* the co((on

!hare ho'der!. A! a pro*ta8't" ndeD? t ! a &a'ua8'e and Fde'" u!ed rato.

Adu!t(ent! *or 8onu! or r-ht! !!ue! !hou'd 8e (ade Fh'e co(parn-

earnn- per !hare o&er a perod o* t(e.

EARNING PER SHARE: PRO3IT A3TER TA@

NUMBER O3 EUIT7 SHARE

E:7%'%T ;.267EAR #1## ###) #)#+ #+#,

P.A.T 1#+011/ 1/0101 1/)+10 10#0+4

NO. O3 E.

SHARE

)#0 )#0 )#0 )#0

RATIO ).0 ).#0 ,.14 ,.,0

INTERPRETATION:



Th! rato !hoF! the pro*ta8't" o* the *r( on a per !hare 8a!!. It

he'p! n decdn- that the e2ut" !hare capta' ! 8en- u!ed

e**ect&e'" or not.

The earnn- per !hare durn- the "ear ###) Fa! the 'oFe!t

that ! ).#0 8ut n the n the #)#+ $#+#, t ncrea!ed to,.14 $ ,.,0 8ecau!e o* (ore pro*t!. It Fa! -ood *or the

!hareho'der! pont o* &eF.

2; PRICE EARNING RATIO:

The rato ndcate! the nu(8er o* t(e! the earnn- per !hare !

co&ered 8" t! (aret prce. It he'p! the n&e!tor! n decdn- Fhether to 8u"

or not to 8u" !hare o* a co(pan" at a partcu'ar (aret prce.

PRICE EARNING RATIO

MAR<ET PRICE PER EUIT7 SHARE CAPITAL

EARNING PER SHARE

E:7%'%T ;.57EAR #1## ###) #)#+ #+#,

M.P.P.E.S.C. 0.#, ,., 4.# #4.,,

E.P.S. ).0 ).#0 ,.14 ,.,0RATIO #.1/ 1./# 1.0, ,.)

INTERPRETATION



Th! rato he'p! n noFn- Fhether the !hare! o* a co(pan" are

under or o&er &a'ued. It ndcate! n&e!tor! ud-(ent or

eDpectaton a8out the *r(! per*or(ance. It ! a ru'e o* thu(8 that

the e2ut" !hare! n ndu!tra' co(pane! !hou'd !e'' at 1 t(e! o*

the earnn-!. But t ! not !a(e *or a'' nd o* *r(!. It depend! onthe t"pe and the earnn- capact" o* the *r(.

%urn- the "ear #+#,? the prce earnn- rato Fa! h-h? Fhch

Fa! !hoFn- !at!*actor" re!u't durn- th! "ear. But re!t o* the

"ear t ! near'" a8out # t(e! the!e ndcate! the ne**ect&e

earnn- capact" o* the *r(.

=.6: CO)PARISIONS OF THE RATIO OF THE REAL STRIPS

LI)ITED FOR THE FOUR YEAR



E:7%'%T .1

SR. NO

PARTICULARSRATIO

#1## ###) #)#+ #+#,

1. CURRENT RATIO 1.0)+ #.+#+ #.1,# 1.,0)

#. LIUI%IT7

RATIO 9UIC<

RATIO

1.)0 1./+ 1.# .0,

) ACI% TEST

RATIO

1.1+ 1.+/ .44 .

+ NET >OR<ING

CAPITAL

)./ ,./+ .#) .,

, CASH

GENERATE% PER

RUPPES O3

SALES

11.+4 4., 1.,, 1#.)1

BAN< 3INANCE

GAP RATIO:

a >CA-CL; 3?@352=1.> >=>1=>.2> >@?65=62.> 1=6?2>@.>

8 >C.A;-C.L 33=12>1 >56?.> >=66=33.> >>?251>.2>

c >C.A-CCA;-

C.L

1@6326 3226@2.> 2126>633 35?=6.>

/ CAPITAL

GEARING RATIO

1./ 1.,0, 1.,# 1.)++

0 OPERATING

PRO3IT RATIO

,.#, +.+ ,./) ,.01,

4 OPERATING

COST RATIO

4).4, 40.4 40.# 44.,4#

1 GROSSPRO3IT

RATIO

1+.44 1#.4 10.00 1/.0

11 NET PRO3ITRATIO

).) ).#1 +.#+ ).0,

1# RATE O3

RETURN ON

IN6ESTMENT

11.1# .0, 0.+, 4.,0

1) RATE O3 ))./4 )4.+0 +4.1 ,,.1



RETURN ON

EUIT7

1+ RETURN ON

ASSETS

.+# +./+ .#, .),

1, IN6ENTOR7TURNO6ER

RATIO

1.0# 1#.1/ 0.,4 ,.40

1 A6ERAGE AGE

O3

IN6ENTORIES

#1.+ #4.,0 +1.41 .#

1/ TOTAL ASSETS

TURNO6ER

#.1# 1.+0 1.+/ 1.,

10 NET 3I@E%ASSETS

TURNO6ER

).4 #.)# #.#/ #./,

14 NET >OR<ING

CAPITAL

TURNO6ER

+.40 ,.+4 +.# +.11

# %EBTORS

TURNO6ER

/.++ ,./ ./, /.1

#1 %EBT

COLLECTION

PERIO%

+0.) ).,# ,).)# ,1.)/

## CRE%ITORS

TURNO6ER

RATIO

#., #1.+4 1.04 0.)+

#) PA7MENT

PERIO%

1/., 1./, #1.)1 +).1,

#+ PROPRIETOR7

RATIO

#+.,+ #).#1 14.)) 10.)



#, EUIT7 RATIO .+ .+# .+# .+

# %EBT RATIO . .,0 .,0 .,+

#/ %EBT EUIT7

RATIO

1.+/ 1.) 1.)/ 1.10

#0 %EBT TO TOTAL

ASSETS RATIO

.,, .,) .,) .+4

#4 3I@E% ASSETS

TO NET >ORTH

RATIO

1.0) 1.) 1./ 1.+)

) INTEREST

CO6ERAGE

RATIO

1. 1.,/ 1.+) 1.//

)1 %EBT SER6ICE

CO6ERAGE

RATIO

.)/ .#+ .+1 .+4

)# EARNING PER

SHARE EPS

).0 ).#0 ,.14 ,.,0

)) PRICE EARNING

RATIO

#.1/ 1./# 1.0, ,.)



CAPTE% ; 5

#R$&6 A&A*SIS

rend ana'"!! n&o'&e! ca'cu'aton o* percenta-e chan-e! n *nanca'

!tate(ent te(! *or a nu(8er o* !ucce!!&e "ear!. It ! an eDten!on

o* hor5onta' ana'"!! to !e&era' "ear!. Trend ana'"!! ! carred out

8" *r!t a!!-nn- a &a'ue o* 1 to the *nanca' !tate(ent! te(! n a pa!t

*nanca' "ear u!ed a! the 8a!e "ear and then eDpre!!n- *nanca' !tate(ent!

te(! n the *o''oFn- "ear! a! percenta-e! o* the 8a!e "ear &a'ue.

T

Trend ana'"!! o&er 'on-er perod! he'p! n dent*"n- certan 8a!c

chan-e! n the nature o* the 8u!ne!!. Snce (an" 'ar-e corporaton! pu8'!h

a !u((ar" o* operatn- re!u't! and !e'ected *nanca' ndcator! *or *&e

"ear! or (ore? t ! po!!8'e to per*or( trend ana'"!! u!n- pu8'!hed

report!.



>.1:

TREN% ANAL7SIS

REAL STRIPS LI)ITED: SELECTED DATA OF PROFIT AND LOSS

ACCOUNT

E:7%'%T 9.1

PARTICULARS #+, #)+ ###) #1##

SALES$ OTHER

INCOME

,11), +14+44/, )+/11)11 #/#100+/)

E@PEN%ITURE +/#,#,,+ )4+/#44/ ))1+1, #,//0#

EARNING BE3ORE

INT.$TA@

#/,00# #)#)4/0 1,,,1#4 1+++1)

PRO6ISION 3OR

TA@ATION

400/1+ ,404/40 +/0)11, ,,/1)+1

PRO3IT A3TER TA@ 10#0+4 1/)+10 1/0101 0)1#/0

PRO3IT A3TER INT? $

TA@

)/)/11 ,1404 )+0/+/0 1))1

PARTICULARS #+, #)+ ##

#)

#1##

SALES$ OTHER INCOME 10+ 1,+ 1#/ 1

SE@PEN%ITURE 10) 1,+ 1#4 1

EARNING BE3ORE

INT.$TA@

141 1 10 1

PRO6ISION 3OR

TA@ATION

1) 10 0 1

PRO3IT A3TER TA@ ## #, 1) 1

PRO3IT A3TER INT? $

TA@

+ )1/ #1) 1



INTERPRETATION:

The !a'e! and the other nco(e! are ncrea!n- that ! 1.#/? 1.,+ $

1.0+ t(e! o* !a'e! and nco(e o* the 8a!e "ear that ! #1##.

The trend percenta-e ndcate! that the #+#, !a'e! are 1.0+

t(e! #1## !a'e!? a r!e o* 0+ percenta-e!.

Pro*t a*ter ntere!t and taD ro!e 8" a Fhoppn- ) percenta-e.

The eDpendture n !hoF! the r!e o* #4? ,+ $ 0) percenta-e n the

"ear ###)? #)#+ $ #+#, re!pect&e'".

The trend o* the percenta-e !hoF! that the !a'e! and the

eDpendture ro!e n the !a(e proporton.



>.2:

TREN% ANAL7SIS

REAL STRIPS LI)ITED: BALANCE SHEET

$:%IBI# .0PARTICULARS 255=-5> 2553-5= 2552-53 2551-52

Share Capta' ,#4 ,#4) ,#4) +/4)

Re!er&e! $Surp'u! /0/)/11 ,)+04 ))/+/0 #++,4

Secured Loan 1)+#,1#0/ 11/,/4)0 0)#1/ 0/0)

Un!ecured Loan //+,4/ #/++,004 )4+,044 +104##,

%e*erred TaD La8't" #,,)/14 #1/), 10,)#0/# 1+,++)

Current La8't"

pro&!on

#,41/0 #/0+), 1+4+0)0 #10),4)

TOTAL FUNDS ),4),4# #4)/+,0+ #+#+,1 #1/1+4)

ASSETS

3Ded A!!et! 1/#,0)1) 1/4#4+ 1++)1#+1, 1))#01,

In&entore! 0#++41 +0#)0#/, #/#))/0 #0##

Sundr" %e8tor! /4)+,+/ ,,# #4/0, ,,#41+

Ca!h 8a'. $8an 8a'. 1/1/00 1044 ,)+41 141+4

Loan! $ Ad&ance! 1++0)4/0 14)14 ,+1+)+ ,441)

M!ce''aneou!

EDpendture

1101, ),/,+, /,/ 4/,44

TOTAL ASSETS ),4),4# #4)/+,0+ #+#+,1 #1/1+4)

PARTICULARS 255=-5> 2553-5= 2552-53 2551-52

Share Capta' 11.+4 11.+0 11.+0 1

Re!er&e! $Surp'u! #.1 #,./ 1)4. 1

Secured Loan #./+ 1/,.01 1#., 1

Un!ecured Loan 14.#/ 0.#4 40.# 1

%e*erred TaD La8't" 1/. 1,.+ 1#/.// 1Current La8't"

pro&!on

#0.+ 4,.10 0.+ 1

TOTAL FUNDS 11., 1),.#+ 111./+ 1

ASSETS

3Ded A!!et! 1#4.+0 1)#.// 10.#0 1

In&entore! )4.), #)1.0+ 1)#./ 1



Sundr" %e8tor! 1+).+4 11.+ 11).00 1

Ca!h 8a'. $8an 8a'. 11.,+ +.#, )1.,/ 1

Loan! $ Ad&ance! #0+., #1, 1#0.#4 1

M!ce''aneou!

EDpendture

1#.11 ).) 0.)# 1

TOTAL ASSETS 11., 1),.#+ 111./+ 1

TRENDS IN SHARE HOLDERS FUNDS AND LIABILITIES

E:7%'%T ? 9.

PARTICULARS 255=-5> 2553-5= 2552-53 2551-52

Share Capta' 11.+4 11.+0 11.+0 1.

Re!er&e!

$Surp'u!

#.1 #,./ 1)4. 1.

Secured Loan #./+ 1/,.01 1#., 1.

Un!ecured Loan 14.#/ 0.#4 40.# 1.

%e*erred TaD

La8't"

1/. 1,.+ 1#/.// 1.

Current La8't"

pro&!on

#0.+ 4,.10 0.+ 1.

TOTAL FUNDS 11., 1),.#+ 111./+ 1.



INTERPRETATION:

The trend percenta-e ndcate! that the re!er&e! and !urp'u!

!hoF! the r!e o* )4.? 1,./? and 1.1 percent n the "ear

###)? #)#+ $ #+#, re!pect&e'".

The !ecured 'oan! ha&e !hoFn a r!e 8" #.,? /,.01 $ 1./+

percent n the "ear ###)? #)#+ $ #+#,

re!pect&e'".

The un!ecured 'oan !hoF! the re&er!e trend that (ean e&er" t !decrea!n- that n the 8a!e "ear t Fa! 1 then t decrea!e n the

"ear #1## to 40.# and n the "ear ###) t a-an

decrea!e to 0.#4 and n the "ear #+#, t decrea!e!

dra!tca''" to 14.#/ percent .

The %e*erred 'a8't" a'!o !hoF r!e 8" /. n the "ear

#+#, co(pare to the 8a!e "ear #1##.

Current 'a8'te! Fa! *r!t decrea!e to 0.+ percent n ##

#) then t !hoF! !'-ht ncrea!e to 4,.10 co(pare to 'a!t "ear

8ut !hoF! decrea!e co(pare to the 8a!e "ear Fh'e n the "ear #+#, t !hoF! an ncrea!e o* 10.+ that (ean! #.0/ t(e

co(pare to 8a!e "ear.

La!t'"? the Tota' *und! !hoF! the r!e co(pare to the 8a!e "ear n

the "ear ###)?#)#+ $ #+#, 8" 11./+? ),.#+ $

1., percent re!pect&e'".



TRENDS IN ASSETS

E:7%'%T 9.;

PARTICULARS 255=-5> 2553-5= 2552-53 2551-523Ded A!!et! 1#4.+0 1)#.// 10.#0 1

In&entore! )4.), #)1.0+ 1)#./ 1

Sundr" %e8tor! 1+).+4 11.+ 11).00 1

Ca!h 8a'. $8an 8a'. 11.,+ +.#, )1.,/ 1

Loan! $ Ad&ance! #0+., #1, 1#0.#4 1

M!ce''aneou!

EDpendture

1#.11 ).) 0.)# 1

TOTAL ASSETS 11., 1),.#+ 111./+ 1

INTERPRETATION:

The porton o* the *Ded a!!et! ha! !hoF the ncrea!e 8" 0.#0 nthe "ear ###) and n the neDt "ear that ! #)#+ t

ncrea!e to )#.// 8ut t decrea!e! 8" #.#4 n the "ear

co(pare to 'a!t "ear 8ut !hoF! the ncrea!e o* #4.+0 co(pare to

8a!e "ear.

Unut'5ed or underut'5ed a!!et! ncrea!e the *r(! need *or co!t'"

*nancn- a! Fe'' a! eDpen!e! *or (antance and upeep!. A h-h



rato !u--e!t! (ana-e(ent! a8't" to (ae a -ood u!e o* t!

a!!et! and 'oF rato !u--e!t! the 8'ocn- o* (one" n *Ded a!!et!.

A! the a!!et! are u!ed to -enerate !a'e!? the *r( !hou'd (ana-e t!

a!!et! e**cent'" to (aD(5e the !a'e!.

The n&entore! ha! !hoFn the ncrea!e o* )#./ n the "ear ##

#) then a*ter n the "ear #)#+ t !hoF! the ncrea!e o*

1)1.0+ Fh'e n the "ear #+#, t ncrea!e 8" #4.),

co(pare to the 8a!e "ear. The ncrea!e n the n&entore! ! *ar

h-her than the ncrea!e n !a'e!. Th! ! the rea!on the n&entore!

turno&er !hoF! decrea!e e&er" "ear.

The 'oan! and the ad&ance! !hoF! the ncrea!n- trend that ! 8"

#0.#4? 11, and 10+., n the "ear ###)? #)#+ and

#+#, re!pect&e'". It ! one o* the part! o* the current a!!et!

Fhch are u!ed to *nd out the current rato. I* the current rato

o* the co(pan" ! h-h? th! ndcate! the !ound !hort ter(*nance *ro( the credtor! pont o* &eF. But on the other and the

h-her rato ndcate! 8'ocn- o* *und! n current a!!et!.

The ca!h and the 8an 8a'ance !hoF! the decrea!n- trend n the

"ear ###) t decrea!e to )1.,/ then a*ter t ncrea!e! to

+.#, co(pare to the 'a!t "ear 8ut co(pare to the 8a!e "ear t

!hoF! the decrea!e n the trend 8ut n the n the "ear t ncrea!e! to

11.,+ that ! 8" 1.,+ n the "ear #+#,.

The (!ce''aneou! eDpendture ! decrea!n- e&er" "ear that ! to

0.)#? )#.) and 1#.11 n the "ear ###)? #)#+ $#+#, re!pect&e'".

The tota' A!!et! !hoF! the r!n- trend that ! 8" 11./+? ),.#+

and 1., n the "ear ###)? #)#+ $ #+#,

re!pect&e'" Fhch !hoF! that the co(pan" ! e**cent Fth Fhch

a**ar! o* the 8u!ne!! are 8en- (ana-ed. It a'!o ndcate! the

*r(! capact" to Fth!tand ad&er!e econo(c condton



CHAPTER: 6

C'&C!SI'&

RATIO ANALYSIS:

The L2udt" po!ton o* the co(pan" ha! 8een decrea!ed th! "ear

8ecau!e the current rato $ the 2uc rato ha&e decrea!ed th! "earco(pared to 'a!t "ear.

The pro*ta8't" rato! o* the co(pan" are not !o -ood In*act? the

Gro!! pro*t ha! decrea!e *ro( 10.00 to 1/.0 n current "ear

Fhch ndcate! that the co!t o* !a'e! ! h-h or that purcha!e !

ne**cent Fh'e the Net pro*t ha! a'!o decrea!e *ro( +.#+ to ).0,

Fhch !hoF! that the ad(n!trat&e eDpen!e! are !'oF'" r!n-.

A'' the 'e&era-e rato! Fere not !o -ood n the 'a!t "ear #)#+ 8ut

th! "ear #+#, t ha! 8een ncrea!e e!peca''" ntere!t co&era-e

rato *ro( 1.+) to 1.// and a'!o the de8t !er&ce co&era-e rato

ha! a'!o ncrea!e *ro( .+1 to .+4

In&entor" turno&er rato ! decrea!n- e&er" "ear Fh'e the de8tor

turno&er rato ! ncrea!n- *ro( the "ear ###) to #+#,.

3Ded a!!et! turno&er rato ! ncrea!n- "ear.

Credtor! turno&er rato ! decrea!n- e&er" "ear that (ean! the

co(pan" ! not tan- the ad&anta-e o* the credt perod a''oFed to

the(.

6a'uaton rato ha! a'!o !hoFn ncrea!e e!peca''" E.P.S. and a'!o

prce earnn- rato.



HORIZONTAL ANALYSIS

The -roFth o* the co(ponent! o* the pro*t and 'o!! account n the

'a!t three "ear ! !hoFn a! under:

PARTICULARS Gro9"* I$ P'r!'$"%' ;

###) #)#+ #+#,

Inco(e #/.+4 #.4 14.##

EDpendture #0.,0 14.4 14.00

Pro*t'o!! 8e*ore ntere!t and taD /.4, +0., 14.0#

Pro&!on 3or TaDaton 1).,/ #1.+ ,1./)

Pro*t'o!! A*ter taD #1.,# ,0.14 0.

Pro*t'o!! carred to Ba'ance Sheet 11).1) +4.0+ #/.0/

<ERTICAL ANALYSIS:

The *o''oFn- the !oo$ (#' +ro,#" %$d &o(( *or a'' the "ear :

PARTICULARS 255=-5> 2553-5= 2552-2553 2551-

2552

SALES$ OTHER INCOME 1 1 1 1

E@PEN%ITURE 4+.+0 4+.,1 4,.,# 4+./1

EARNING BE3ORE

INT.$TA@

,.,# ,.+4 +.+0 ,.#4

PRO6ISION 3OR

TA@ATION

1.0# 1.+) 1.)0 #.,

PRO3IT A3TER TA@ ). +. ).1 ).,

PRO3IT A3TER INT? $ TA@ 1).#/ 1#.)/ 1., .1



The *o''oFn- ! the !o+o(#"#o$ o, (*%r' *o&d'r( ,$d(

&#%7#&#"#'( :

SHARE HOLDERSFUNDSLIABILITIES

2551-52 2552-53 2553-5= 255=-5>

Share Capta' #1.4 #1./# 1/.4+ 1,.)

Re!er&e! $Surp'u! 11.44 1+.44 10.14 14.),

Secured Loan ).0 )).#) +.+ )0.#0

Un!ecured Loan 10.,1 1.# 4.), #.#1

%e*erred TaD La8't" .0 /.+ /.+1 /.#0

Current La8't" pro&!on

1. .1 /.0 1/.0,

TOTAL FUNDS 1. 1. 1. 1.

The *o''oFn- the co(po!ton o* the %(('"(

ASSETS 2551-52 2552-53 2553-5= 255=-5>

3Ded A!!et! 1.)0 ,4.+/ .# +4.#1In&entore! 4.,0 11.)0 1.+) #).,1

Sundr" %e8tor! #,.+ #,.4, 14.4 ##.#

Ca!h 8a'. $8an

8a'.

./0 .## .)/ .+4

Loan! $

Ad&ance!

#.), #./ )./) +.1)

M!ce''aneou!

EDpendture

.+, .#/ .1# .)

TOTAL ASSETS 1. 1. 1. 1.



TREND ANALYSIS

3o''oFn- are the !e'ected te(! o* the pro*t $ 'o!! account

PARTICULARS #+, #)+ ##

#)

#1##

SALES$ OTHER INCOME 10+ 1,+ 1#/ 1

SE@PEN%ITURE 10) 1,+ 1#4 1

EARNING BE3ORE

INT.$TA@

141 1 10 1

PRO6ISION 3OR

TA@ATION

1) 10 0 1

PRO3IT A3TER TA@ ## #, 1) 1

PRO3IT A3TER INT? $

TA@

+ )1/ #1) 1

TREN% IN SHARE HOL%ERS 3UN%S $ LIABILITIES

PARTICULARS 255=-5> 2553-5= 2552-53 2551-52Share Capta' 11.+4 11.+0 11.+0 1.

Re!er&e!

$Surp'u!

#.1 #,./ 1)4. 1.

Secured Loan #./+ 1/,.01 1#., 1.

Un!ecured Loan 14.#/ 0.#4 40.# 1.

%e*erred TaD

La8't"

1/. 1,.+ 1#/.// 1.

Current La8't"

pro&!on

#0.+ 4,.10 0.+ 1.

TOTAL FUNDS 11., 1),.#+ 111./+ 1.



TREN% IN THE ASSETS

PARTICULARS 255=-5> 2553-5= 2552-53 2551-52

3Ded A!!et! 1#4.+0 1)#.// 10.#0 1

In&entore! )4.), #)1.0+ 1)#./ 1

Sundr" %e8tor! 1+).+4 11.+ 11).00 1

Ca!h 8a'. $8an 8a'. 11.,+ +.#, )1.,/ 1

Loan! $ Ad&ance! #0+., #1, 1#0.#4 1

M!ce''aneou!

EDpendture

1#.11 ).) 0.)# 1

TOTAL ASSETS 11., 1),.#+ 111./+ 1



BIBLIOGRAPHY

7&&<S

Nara"ana!Fa(" R.: -inancial Accounting ? #nd Edton? Prentce Ha''

Pu8'caton Inda? #,.

Shah Sudhr B.: Advance Accounting = Auditing ; ? 1th Edton? Sudhr

Pu8'caton? #+.

Shah Sudhr B.: Accountancy >Com?any Accounts@? ,th Edton? Sudhr

Pu8'caton? #,.

eb93inks

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