Final Apollo Print

Lets Build Better Roads
A
PROJECT REPORT
ON
RATIO ANALYSIS
OF
GUJARAT APPOLO ERTHMOVERS LTD
Submitted To:
S.K.School of Business Management,
Hemchandracharya North Gujarat University, Patan
In partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION
Submitted By:
KULDIP PRAJAPATI
Roll no: 41
ENROLLMENT NO: MBA0941484742
16TH May 2015 30TH JUNE 2015
Academic Year 2014-15

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.
PREFACE
As per the course of MBA prescribed by H.N.G University Practical project work
is an essential element for coming MBA postgraduates. The theoretical study is
important, but with Practical knowledge, because the Practical experience teaches
us the way of operation. The objective of preparation of project report is to
apply practical knowledge about financial analysis through ratio analysis of
company.
We have given detail about real business situation and their different important
terminology to get easy & suitable understanding & interpretation of the financial
statements of the company.
Place:
S.K School of business management,
Hemchandracharaya North Gujarat University,
Patan (Gujarat)
ACKNOWLEDGEMENT
My sincere acknowledgement to APOLLO EARTHMOVERS LIMITED for
giving me a valuable opportunity to work with them. This project report is
dedicated to all the people, whom I met, took guidance, talked and gained
knowledge from them.
I am indebted and whole-heatedly thankful for the assistance received from

various individuals in making this project a success. I have no words to
express my gratitude towards those who were constantly involved with me
throughout my wonderful experience working with the project on Ratio
Analysis.
I would specially like to thank Mr. Vishal Suthar (HR Manager) for giving
me golden chance of internship at APOLLO EARTHMOVERS LIMITED.
I am highly indebted to Mr. Bharat Dave (Accountant) for their guidance

and constant supervision as well as for providing necessary information
regarding the project & also for their support in completing the project.
I would like to express my gratitude to my college S.K.School of Business

Management & my faculty member for giving me the opportunity of
making project report as a part of summer internship so as to learn the
various aspects on practical basis.
DECLARATION
I, kuldip Prajapati, hereby declare that the report for Summer Training Project
entitled for Ratio analysis of APOLLO EARTHMOVERS LIMITED for past four
years is result of my own work and my indebtedness to other work publications,
references, if any, have been duly acknowledged.
Place: PATAN
Date:
Kuldip Prajapati
EXECUTIVE SUMMARY
The company Gujarat Apollo earth movers ltd. was incorporate on 7th
October 1986. In the settle of Gujarat Apollo equipment Ltd. received the
certificate of commencement of business from the register of companies
Gujarat 11th November 1986.
They sales their products by sources of marketing. They give advertisements
in newspapers, Internets, TV, magazines etc. But they sales directly to the
dealers. Dealers are sales to the customer s and government of India.
Companies products Paver finisher, wet mix plant, bitumen pressure
distributor front-end loader etc. all the products specially designed to suit the
typical Indian sight condition.
Research department research the quality and feature of the product then
launching of it in the market then go for advertise because dealer know
easily that product.
Here research and development department is separate so product research is

become easy in this department.
Objective of preparing project report subjected on Ratio Analysis of

APOLLO EARTHMOVERS LTD at Mehsana unit give us complete
Review and analysis of current trend acquainted in the finance section. The
initial part of this report contains the brief information about the
organization, type and different activities involved in formulation of finance.
The core project areas, which have been focused, are benefits, finding and
suggesting advance technique to improve the Ratio analysis measures.
It helps in providing a comparative study of various business concerns.
It makes it easy to grasp the relationship between various items and helps in
understanding the financial statement. Ratio analysis is a facility of the
compression of financial statement and thereby evaluation of several aspect
such as financial health, profitability and operational efficiency.
CONTENTS
Ch.No.
Sub.Point Contents
Page No.
Preface
Acknowledgement
Declaration
Executive Summary
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
Introduction of company
History Of The Company
Development Of The Company
Company Profile
Board of Directors
Size & Form Organization
Expertise
Quality Policy
Pricing Policy
1
2
6
8
10
11
12
13
14
2.1
2.2
2.3
Information of Finance Department

Meaning
Structure & Function
Accounting Process
15
16
16
18
2.4
2.5
Financial Information
Accounting Policy
19
21
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
Balance Sheet
Profit and Loss A/c
Research Methodology
Ratio Analysis
Meaning
Objective of Ratio
Advantages of Ratio Analysis
Disadvantage of Ratio Analysis
Liquidity Ratio
Asset Turnover Ratio
Finance Structure Ratios
Profitability Ratio
Valuation Ratio
26
28
30
33
34
35
38
39
41
45
56
62
70
SWOT Analysis
Conclusion
Bibliography
77
79
80
3
4
5
6
7
8
9
CHAPTER: 1.
Introduction of Company
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
History of the Company

Development of the Company
Company Profile
Board of Directors
Size & Form Organization
Expertise
Quality Policy
Pricing Policy
1.1 HISTORY OF COMPANY
The company was establishing in 1974. At that time in the India, road
construction and other related to equipment work was going on. At that time the
owner the Anilbhai Patel had thought that why they cant establish one branch in
Mehsana in G.I.D.C related to produce this type of machinery or equipment and
his thought applied and established this company APOLLO EARTHMOVERS
LTD in Mehsana.
The Group started business operation in 1965 by establishing Apollo
Engineering Company for water welt drilling constructs over a period of time, the
company integrated backwards into production of drilling rigs. It has also started
manufacturing of trailers and agriculture equipments.
An Apollo Industrial Product Private Limited had set up for manufacture
mechanical pavers finisher and hot mox plants. The companys business grew
steadily and its product earned a good reputation in the market
In 1986 the Apollo Earthmover Private Limited termed with Gujarat
Industrial Investment Corporation (GIIC) to set up Gujarat Apollo Equipments
Limited (G.A.E.L.) .The Company started manufacturing drum type asphalt plant
and hydrostatic sensor paver finishers under a technical collaboration arrangement
with Barber Greene USA. Apollo earthmovers Limited has been entered in stock
10

th
exchange just from 19 June 2001.Apollo Earthmover Limited Company is ISO

9001:2000 certified.
Year Events:
2005
Gujarat Apollo Industries has given the Bonus in the Ratio of 1:1
2007
Gujarat Apollo Equipments Ltd has informed that the Board of Directors of
the Company at its meeting held on January 30, 2007, inter alia, has proposed
to
issue Bonus Shares in the
proportion of one (1) Equity share for every two (2) Equity Shares held on a
Record date to be fixed at a later date. The existing paid up share capital of the
Company Rs 700 Lacs.
Members of are hereby informed that trading symbol of Gujarat Apollo
Industries Limited shall be changed from GUJAPOLIND to GUJAPOLLO
W.E.F. July 6, 2007.
Company name has been changed from Gujarat Apollo Equipments Ltd to
Gujarat Apollo Industries Ltd.
The Company has issued Bonus Shares in the Ratio of 1:2.
2008
11
The Company has issued Bonus Shares in the Ratio of 1:2.

The Company has recommended dividend of Rs 3/- per equity share (previous
year Rs 2/-).
Gujarat Apollo Industries Ltd (GAIL) has invested INR 74 millions in Apollo
Earthmovers Ltd (AEML) to make it a subsidiary Company.
2009
The Company announces incorporation a wholly owned subsidiary, Apollo
Maschinenbau GmbH in the Federal Republic Germany, near to the port of
Hamburg.
The Company has recommended the dividend of Rs 2/- per equity share.
2010
Apollo made an entry in to Egypt, Tunisia, Trinidad & Tobago, Angola, Malawi
and Botswana, An addition to already long list of country of exports.
The Company recommended the dividend of Rs. 2.50/- per Equity Share.
2011
Apollo makes a break through entry in Seychelles & Zimbabwe.
The Board of Directors has appointed Ms. Neha Chikani Shah, who was Deputy
Company Secretary, as the Company Secretary and Compliance Officer.
The Company has recommended the dividend of Rs. 2.5/- per Share along with
Rs. 2.5/- per Share as one time special dividend, totaling to Rs. 5/- per equity
Share.
2012
12
The Board of Directors of the Company has recommended the dividend of Rs.
2.5/- per Share.
The boards of Directors have proposed to re-appoint Mr. Anand A. Patel,
Whole-Time Director of the Company.
2013
"Gujarat Apollo Industries Limited launches strategic joint venture with
Switzerland based Ammann Group".
2014
Gujarat Apollo Industries Ltd have recommended the dividend of Rs. 2.50/- per
equity Share
13
1.2 DEVELOPMENT OF COMPANY

The company today offers almost the entire range of equipment that lends
them selves admirably to the road building industry.
The company investment in R&D and quality manpower help in
continuous improvement in product quality that more then meets the existing
quality standards of ministry of surface transport. The Indian roads congress
irrigation projects in The Apollo group is a Gujarat industrial house with a business
track record of 35 yrs. Their main interests are in,
Road Construction Equipment

Road Construction
Filtration System
Ship Breaking.
For 35 year Apollo have retained leadership by offering state of the art
construction equipment developed through in house R&D and strategic technology
tie-ups Apollo company today offers the entire range of road construction
equipment that helps in building roads, which are safe, durable & economical.
Apollos mission is to retain the leadership through continuous R&D and world
class technology availed through technology transfers.
They believe that customer satisfaction is achieved through quality of
products & procedure.
14
Reason for select this (G.I.D.C.) location for firm:
In those days there was one rule that the company should be in premises.
And electricity was also less costly. The transportation actively very easy because
it is established in the G.I.D.C. The third reason for this location is the mainly this
locations very easy to get more labor for production of product.
Reason for select the name of the company Apollo Earthmovers

Ltd.
When the company was started at that time the satellite name was
Apollo was fallen down on the earth approximately in 1982, so the decider has
thought that the name should be kept the Apollo. And the company producing the
road construction or related to help in earth work so the company have decide the
companys name as APOLLO EARTHMOVER LTD
15
1.3 COMPANY PROFILE

Name of the company
APOLLO EARTHMOVERS LTD
Establishment year
The APOLLO EARTHMOVERS LTD was established in1974.
Registered Office
The firms registered office is located in
212-A, G.I.D.C.
ESTATE,
Mehsana-384002
North Gujarat
Ph- (02762) 252362
Fax: 251337
Banker
Bank Of Baroda
Auditor
16
M.M.SALVI & CO.

Chartered Accountants, Mahesana.
Production Unit
The production of this unit is located at
APOLLO EARTHMOVERS LTD
212-A, G.I.D.C.
ESTATE,
Mehsana-384002
Vision of the company

To increase the turnover of the product, And to establish prestige of
number one at the world level
Mission of the company

The companys goal is to retain the leadership by designing & building
the state of the art equipment, through technology that is proven and is the best in
the world, availed by license and joint venture with pioneers and leaders in
respective field. To make it possible to give India and the developing world.
With the Ps process, product and people, well and truly in place, Apollo
shall be the supplier by choice of the road construction industry.
17
1.4 BOARD OF DIRECTORS

BOARD OF DIRECTORS
MR. ANIL T. PATEL
DIRECTOR
MR. MANIBHAI V. PATEL
DIRECTOR
MR. ASIT A. PATEL
MANAGING DIRECTOR
MR. ANAND A. PATEL
WHOLE-TIME DIRECTOR
MR. UGRABHAI V. PATEL
INDEPENDENT DIRECTOR
MR. NAVINCHANDRA V. SHAH
INDEPENDENT DIRECTOR
COMPANY SECRETARY
CS NEHA CHIKANI SHAH
STATUTORY AUDITORS
M/s. DJNV & CO.,
Chartered Accountants,
Ahmadabad
BANKERS
HDFC BANK LTD.
KOTAK MAHINDRA BANK LTD.
Corporate Office
18
Parishram,
5/B, Rashmi Society, Mithakhali Circle,
Navrangpura,
Ahmadabad, - 380009
1.5 SIZE & FORM ORGANIZATION

Generally size of the unit is based on the total investment & total
employment made by particular unit. While form of organization is decide on
the basis of internal relationship, authority & responsibility to concerned
departments.
Industry Can How Classified Into Three Categories

(1) small scale industry
(2) medium scale industry
(3) large scale industry
An industry unit said to be large scale unit which invest capital in plant &
machinery APPOLO EARTHMOVERS LTD.
More than 1 crore & use power and also employed workers more than
small scale & medium scale industry.
It is a small industry which is obvious following is the main forms of
organization.
19
1.6 EXPERTISE
We are in the road construction industry for a long time - from day 1 of
the mechanization of road construction. From a modest beginning in the year 1972,
the group today offers almost the entire range of equipment that lends them
admirably to the bituminous road building industry. One may ask - are you still
doing the same thing even 30 years later? The answer is yes but with one important
difference. Today we are doing it better and are moving forward with the firm
belief that our best is yet to come.
The reason- we are constantly on the job to improve on the quality of our
products & services and avoid "waste".
Our definition of "waste" is simple. Any activity that does not add value
to the customer is a waste. We keep abreast of the changes and aim to maintain our
leadership through innovation and world class technology. Value engineering is a
way of life at Apollo. No wonder the advances in Production Engineering you
notice in an Apollo equipment is rarely matched by competition. Advances that
help you complete the job faster with high cost savings.
Indigenization of the technologies for optimum utilization in Indian
conditions is the focus of our design department. Apollo's investment in R & D and
quality manpower helps in continuous improvement in product quality that more
than meets the exacting quality standards of Ministry of Surface Transport, Indian
Roads Congress, International Consultants and customers.
Yes, we have been in this business for a long time, 30 years long. Thirty
years during which we have earned an enviable reputation with the customers for
20
high quality road construction equipment, prompt after sales service and a
customer friendly approach.
No stopping but, we will continue to build on our strengths-rich
experience, accent on R & D, customer orientation and adaptability to change. We
will keep on improving, Refining, Changing, and Leading the way. Apollo - the
best piece of road construction equipment you'll ever own.
1.7 QUALITY POLICY

WE AT APOLLO EARTHMOVERS LIMITAD shall strive to enhance
customer satisfaction by manufacturing product and excellent Quality with
customer requirement in focus quick delivery and providing nation wide services.
We shall continuously improve our quality management system,
customer satisfaction and bring new technology to the customer.
PRODUCTS
Stationary Drum Mix Plants. (DM Series 30 to 150tph)
Mobile Drum Mix Type Asphalt Plants (Mobimix Series 20 to
90tph)
Wet Mix Macadam Plants. (wm Series 60 to 300 tph)
Bitumen Pressure Distributor ( Atm Series 3000 to 10000 liters
Mechanical Broomer.
Hydraulic Broomer.
Tandem Vibratory Roller.
Wet dust Collector.
Chips Spreader
Mechanical Paver Finisher
Hydrostatic Paver Finisher
21
Wet Mix Paver Finisher

Kerb Laying Machine
Job Work Of;- Mahindra & Mahindra, Sicom (ITALY)
1.8 PRICING POLICY

Price is the main base of the marketing department. Pricing policy is
most important feature in any organization. Without prepare pricing policy
organization can not declared the price of the product. The Apollo Earthmover Ltd
is the Sole proprietor firm. The goal of the company is to provide better quality of
the product with reasonable profit.
DM 60- which most costlier then the other equipment the capacity of the
machine is 90-120 ton the price is 30-40 lacs
Mechanical Broomer is cheapest machine of all the product the price is
1.75 lacs
22
CHAPTER: 2.
Information of finance Department
2.1
2.2
2.3
2.4
2.5
Meaning
Structure & Function
Accounting Process
Financial Information
Accounting Policy
23
2.1 MEANING
Financial department is concerned with acquisition of funds and
investing those funds in such sources where earning will be higher. Finance play
very important role in the every company. The process of estimation of fund which
is requirement for firm & main source of the fund is called financial planning.
Management Finance is concerned with funds management or treasury
function. It is the duty of the finance manager to arrange for the funds at
competitive rates & terms & advises on its deployment to maximize share holders
or owners wealth.
2.2 STRUCTURE & FUNCTION
Managing Director
Chief Accountant
24
Accountant
Taxes
FUNCTION
Budget Preparation.
Budget Administration.
Cost Allocation.
Account Payable.
Bring benefits.
Grants Administration..
Contract administration.
Billing.
Property Inventory.
General Accounting Records.
Fixed Assets Records.
Custody of Funds.
Cash Flow.
Investment.
Debt Administration.
Risk Management.
Internal Financial Reports.
External Financial Reports.
Statutory Reports.
Tax Reports.
25
Preparation of Budget, Appropriation of accounts, re-appropriation surrender

and savings.
Control of expenditure & ways & means position.
Audit.
Treasury Administrations.
Administrations of Taxes i.e. Sales Tax, Entertainment tax, Entry Tax etc.
Resource mobilization through loans, Institutional finance, small savings,
credit & investment & public debt.
2.3 ACCOUNTING PROCESS

Identification of Transaction
Preparation of Business documents
Recording of Transaction in Journal
Posting to Ledger
Preparation of Unadjusted Trial Balance
Passing of Adjusted Entries
S.K.SCHOOL OF BUSINESS
MANAGEMENT,
PATAN.
Preparation
of Adjusted
Trial Balance
26
Balance Sheet
Profit & Loss Account
Fund Flow Statement
2.4 FINANCIAL INFORMATION

When the company was started at that time the company was initial basis.
The production of goods was less and the sale of the company was also less at that
time.
27
Finance play very important role in the every company. The process of
estimation of fund which is requirement for firm & main source of the fund is
called financial planning.
The accountant of the company spares most of the time in making the
financial planning. In Apollo Earthmovers Ltd for requirement of fund the
accountant has decided six monthly or some time yearly forecast of fund.
The company has set targets for each job in terms of money period, time
consumed, and quality assured etc. Apollo Earthmovers Limited makes effective
use of fund & collect wild source of funds. In company financial planning has
grater significance.
Particular
Amount(2014)
Paid up Capital
Reserve and surplus
Turn over
Profit before tax
159,406,210
2,768,363,065
5,99,509,940
1,334,543,352
Profit after tax
1,359,651,800
Earning Per share
85.29
The above table shows the information about finance of the company. The paid up
capital of the company is Rs.1, 594, 06210. On other hand the turnover of the
company is more than Rs.59.95 cr. That we can see. In the year 2014 the profit
28
before tax of the company was more than 1.33 cr. And after tax profit was 1.35 cr.
Their earning per share is 85.29. In the G.I.D.C, The Company gets no. 1 prestige
in turn over because in the G.I.D.C this is the first in the turnover more then any
other which is situated in G.I.D.C.
2.5 ACCOUNTING POLICY

Convention and basis of preparation of financial statements
There financial statements have been prepared on the accrual basis of
accounting as per double entry system, under the historical convention, and in
29
accordance with relevant presentational requirements of the companies Act, 1956

and in accordance with applicable accounting standards issued by the institute of
chartered Accountants of India.
Fixed Assets
Cost of fixed assets comprises purchase price, duties levies and any
directly attributable cost of bringing the asset to its working conditions for the
intended use. Borrowing costs related to the acquisition or construction of the
qualifying fixed assets for the period up to completion of their acquisition or
construction are included in the book value of the assets.
All costs relating to up gradations/enhancements are generally charged off revenue
expenditure unless they bring significant additional benefits of lasting nature.
Convert claimed on fixed assets is reduced from the cost of respective assets.
Impairment of fixed assets

An asset is treated impaired when the carrying cost of the assets exceeds
its recoverable. An impairment loss is changed to profit and loss account in the
year in which an asset is identified as impaired. A previously recognized
impairment loss is increased or revered depending on changes in circumstances.
However, the carrying value after reversal is not increased beyond the carrying
value that would have prevailed by charging usual depreciation if there was no
impairment.
Depreciation/ amortization
Depreciation on assets (except intangible assets) is provided in a manner
that amortizes the cost of the assets after commissioning, on the straight-line
method at the rates and in the rates and in the manner prescribed in schedules XIV
to the companies, Act, 1956.
30
Investments
Long-term investments are valued at cost.
Inventories
Inventories are stated at the lower of cost and net realizable value, cost
comprise of expenditure incurred in the normal course of business in bringing such
inventories to its location and includes, where applicable, appropriate overheads
based on normal level of activity. Obsolete slow moving items and provision is
made for such inventories. The cost of categories of inventories is arrived at as
follow:
- Store, spares, raw materials and components-at rates determined on first in
first out basis.
- Finished goods at full absorption cost method based on annual average
cost of product.
- Packing materials, loose tools and miscellaneous consumables are charged
off at the point of purchase.
A. Excise duty on finished goods and custom duty on raw material is accounted
for on clearance of goods from the factory.
B. Credit of excise duty under convent scheme on goods purchased is reduced
from the cost of purchase.
Retirement benefits
- Contributions payable, which are under defined contribution scheme
and funded and recognized as years expenditure. Contributions under defied
benefit schemes, as determined on the basis of actuarial valuation, are also funded
and recognized as years expenditure.
31
- Liability for gratuity determined on basis of actuarial valuation is

funded with life insurance Corporation of India under group gratuity (Cash
Accumulation) scheme and annual premium thereon is paid and accounted for
accordingly.
- Provision is made for Leave Encashment benefits based on actuarial
valuation and charged to the profit and loss account.
Revenue Recognition
- Sales of products and services are recognized on dispatch of goods or when
the services are rendered sales are stated at contractual realizable values, and
trade discounts.
- Expenses are accounted for on accrual basis and provision is made for all
known losses and liabilities.
- Liquidated damages/penalties are provided for wherever there is a delayed
delivery.
- Commission income if any is recognized as per contracts/receipt of credit
note.
- Dividend income is recognized when the right to receive dividend is
established.
- Interest income is recognized on the time proportion method.
Research and Development:

No such expenditure incurred during the year
Taxation:
1. Provision for current income tax is made as per working under the income
tax act, 1961.
2. (a) Deferred tax is recognized as timing differences; being the difference
between taxable incomes and accounting income that originate in one period
and are capable of reversing in one or more subsequent periods.
32
(b) Deferred tax assets are recognized only to the extent there is a
reasonable certainty of its realization.
(c) Deferred tax assets arising from temporary timing differences are
recognized to the extent there is reasonable certainly that the assets can be
realized in future. A deferred tax asset on unabsorbed depreciation and carry
forward losses is recognized only when there is virtual certainty that there will
be sufficient future taxable income available to realize such assets.
3. Provision of fringe Benefit Tax (FBT) is made on the basis of expenses
incurred on employees/ other expenses as prescribed under the income tax act,
1961.
Foreign Currency Transactions

Transactions in foreign currencies are recorded at the exchange rate of
the date of transaction or at the exchange rates under forward exchange contracts.
Current assets and current liabilities not covered by forward exchange contracts are
translated at the year end exchange rates and the profit/ loss so determined and also
the realized exchange gain/ losses are in the profit & loss account, except those
relating to acquisition of fixed assets which are capitalized.
Gains or losses on foreign exchange rate fluctuations relating to current
assets and liabilities are accounted at the year end.
Contingent liabilities
Contingent liabilities are not provided for in the accounts for in the
accounts and are disclosed separately in notes to accounts.
Borrowing Cost
No such has been made during the year.
33
CHAPTER: 3.
Balance Sheet
BALANCE SHEET AS AT 31ST MARCH

Year End
SOURCES OF FUNDS
Owners s Fund
Equity Share Capital
Mar-14
Mar-13
Mar-12
Mar-11
159406210
165750000
165750000
165750000
34

Share Application Money
Preference Share Capital
Reserve & Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax
Deferred Tax liabilities
Total
Application Of Fund
Fixed Assets
Gross Block
Less: Revaluation Reserve
Less: Accumulated Depreciation
Net Block
Capital Work in-progress
0
0
2768363065
400753402
0
14705161
386048241
16086487
612890354
0
38823540
574066814
14427601
614720724
0
34924347
579796377
788824
553705637
0
29480573
524225064
210324053
Investment
1696412435
457693013
473309255
419557718
1576541097 1527300344
595277692 575467356
981263405 951832988
0
0
2027450833 2005727444
1256446806
448624008
807822798
0
1961929633
80000000
735209461
31717773
3774696509
Net Current Assets

Current Assets Loans & Advance
Less: Current Liabilities & Provision
Total net Current Assets
Miscellaneous expenses not written
Total
Note:
Book Value of Unquoted Investments
Market Value of quoted Investments
Contingent Liabilities
Number of Equity shares outstanding (in
lacs)
1937831254
261681908
1676149346
0
3774696509
0
0
0
0
1520537340 1502484159
80068000
204269272
0
0
1364166660
83468000
200474060
130032000
261891865
56826221
53551225
2027450833 2005727444
40089108
1961929633
CHAPTER: 4.
35
Profit and Loss A/c
PROFIT AND LOSS FOR ENDED 31ST MARCH

Apollo Earthmovers Ltd
Income:
Operating Income
Other income
Total Income
Expenses:
Material Consumed
Changes in inventories of finished goods &
stock in trade
Mar-14
Mar-13
Mar-12
Mar-11
475442911
124067029
599509940
2053537004
56415857
2109952861
2177797199
49407531
2227204730
1921015846
47413196
1968429042
295577609
1323549841
1420990397
1338809800
58338334
7557302
63924230
(94178015)
36

Employee Benefit Expenses
Other expenses
37891295
188360657
106800287
313252284
96162701
283696874
71840205
272182403
580167895
1751159714
1864774202
1588654393
Operating Profit
19342045
358793147
362430528
379774649
Adjusted EBITDA
Depreciation
Other write offs
Financial Expenses
19342045
14705161
0
38128583
358793147
38823540
0
54591235
362430528
34924346
0
46564871
379774649
29480573
(33491699)
265378372
280941311
307559845
1368035051
1334543352
(25108448)
35970000
301348372
84274996
0
280941311
98462117
307559845
116514023
Adjusted PAT
Non Recurring Item
Other Non Cash Adjustment
1359651800
217073376
182479194
191045822
Reported Net Profit
1359651800
217073376
182479194
191045822
85.29
82.25
13.10
13.10
11.01
11.01
12.28
12.28
Cost of sales
Profit before exceptional items & tax

Exceptional items being income from sales of
investments
Adjusted PBT
Tax Charges
Earning Per Share

Basic EPS
Diluted EPS
42734231
37
CHAPTER: 5.
38
Research Methodology
RESEARCH METHODOLOGY
The methods or the techniques which have been used for collection and analysis of
data in this study are as follows:
(i)
Collection of Data: The data of study for the period 2011 to 2014 used
in this study has been collected from the Annul Reports for the years
2011 to 2014.
39
(ii)
Analysis of Data : For analyzing the data the technique of ratio analysis
, simple mathematical tools like percentages and averages etc. and
simple statistical technique like Simple Correlation Technique have been
used
REASEARCH DESIGN:
DATA COLLECTION:
The information is collected through the PRIMARY SOURCES like:

Getting information from HR department.
Data was collected from following SECONDARY SOURCES like
Account department
Audit department
PRIMARY DATA:
The primary data is collected by discussion with the manager of account
department and HR department.
40
SECONDARY DATA:
Secondary data regarding sales figures, promotional expenses were
collected from the company own record to analyze the impact on sales due
to the running scheme and make cost benefit analysis.
CHAPTER: 6.
41
Ratio Analysis
6.1 MEANING
Ratio, broadly speaking, is the numerical relationship between to
numbers, and hence ratio analysis of statement stands for the process of
determining and presenting the relationship of items and groups of items in the
statements. The following are the importance and uses of ratio analysis.
42
Ratio analysis is the powerful tool of financial analysis. A ratio is defined

as relation between two or more thing or as the systematic use of the ratio to
interpret the financial statement. So that the strength and weakness of a firm as
well historical performance & Current financial condition can be defined.
According to Meyers, ratio analysis is a study of relation among the
various financial factors in a business.
It is used as benchmark for evaluation the financial position and
performance of the company.
A ratio indicated quantities relationship which can be used to qualitative
conclusion. This relationship can be expressed as:
Percentage
Proportion
Fraction
6.2 OBJECTIVES OF RATIO

(i) To analyze an earning capacity of the enterprises.
(ii) To ascertain the financial position (liquidity and solvency) and
(iii) To determine the operating efficiency of business entities.
43
Basis or Standards of Comparison

Ratios are relative figures reflecting the relation between variables. They enable
analyst to draw conclusions regarding financial operations. The use of ratios as a
tool of financial analysis involves the comparison with related facts. The basis of
ratio analysis is of four types which are as under:
Past ratios calculated from past financial statements of the firm.
Selection of relevant data from the financial statements depending on the
objective of the analysis.
Calculation of competitors ratios for inter-firm comparison.
Comparison of the calculated ratios with the ratios of the same firm in the
past or the ratios developed from projected financial statements or the ratios
of some other firms or the comparison with the ratios of the industry to
which the firm belongs.
Interpretation of the Ratios

The interpretation of ratios is an important factor. The inherent limitations of ratio
analysis should be kept in mind while interpreting them. The impact of factors
such as price level changes, change in accounting policies, window dressing, etc.,
should also be kept in mind when attempting to interpret ratios. The interpretation
of ratios can be made in the following ways:
Single absolute ratio
Group of ratios
Historical comparison
Projected ratios
Inter-firm comparison
44
Guidelines or Precautions For Use Of Ratios

The calculation of ratios may not be a difficult task but their use is not easy.
Following guidelines or factors may be kept in mind while interpreting various are
as follows:
Accuracy of financial statements
Objective or purpose of analysis
Selection of ratios
Use of standards
Caliber of the analysis
Classification of ratios
The use of ratio analysis is not confined to financial manager only. There are
different parties interested in the ratio analysis for knowing the financial position
of a firm for different purposes. Various accounting ratios can be classified as
follows:
Traditional Classification
Functional Classification
Significance ratios
Functional Classification
45
These include liquidity ratios, long-term solvency and leverage ratios, activity
ratios and profitability ratios.
Significance Ratios
Some ratios are important as compared to others and the firm may classify them as
primary and secondary ratios. The primary ratio is one which is of prime
importance to an entity. The other ratios that support the primary ratio are called
secondary ratios.
In the view of Functional Classification the ratios are
Liquidity ratio
Solvency or Leverage ratio
Activity ratio
Profitability ratio
46
6.3 ADVANTAGES OF RATIO ANALYSIS

I. Lee observed that the process of producing financial ratio is essentially
concerned with the identification of the significant accounting data
relationships, which give the decision makers insights into the company that
is assessed.
II. A ratio analysis involves the study of total financial picture. By basing
conclusion upon thorough understanding of the important of each ratio, the
analyst can recommend and indicate positive action with confidence.
III. One of the most fruitful areas for the use of traditional financial ratio seems
to be that of predication company failures.
IV. Ratio are tool which enables management to analysis business situation and
to monitor their performance as well as that of their competitors.
V. Ratio analysis helps the management to diagnose the situation, monitor the
performance and help plan forward.
VI. There are certain priority ratios for chief executives. There are related to key
areas, which are common to nearly all businesses and with which top
management is seriously concerned. These priority ratios enable the chief
executive to understand the relationship between his organizations at one
end, and the market, investors, suppliers and employees. He is also in a
position to watch how well the organization is using its assets and how well
it is providing for the future.
VII. There are ratio which help the marketing manager, the purchasing manager,
the financial manager and other representing the middle management to
know the what positions are like how to make a way in typical situations,
from time to time
47
6.4 DISADVANTAGES OF RATIO ANALYSIS
I. Erich Helfert points out that it is essential for a person analyzing business
performance to have a clear awareness of the tests he should apply and the
specific reasons for which he should apply them. Temptation arises in
financial ratio analysis to run all the numbers, yet select only a few
relationships, which would provide clues for judgment.
II. Financial statement is generally based on historical or original cost. The
current economic conditions are ignored.
III. Not all ratio and percentages are significant and useful. One should be aware
of the temptation to calculate them for their own sake.
IV. In using ratio computed by others, one should realize, that the computation
of a particular ratio not necessarily been standardize.
V. Most ratios represent avg. and therefore, may tend to obscure large
variations in the underlying causative factors above and below the avg.
VI. Ratio are based on financial statement suffer from the limitation inherent in
these statements.
VII. Changes in many ratios are closely associated with one another.
48
RATIO ANALYSIS
A. LIQUDITY RATIO
1) Current Ratio
2) Quick Ratio
B. ASSET TURNOVER RATIOS

1)
2)
3)
4)
5)
Total Asset turnover

Net Fixed Turnover Ratio
Net Working Capital Turnover Ratio
Inventory Turnover Ratio
Debtor Turnover Ratio
C. FINANCE STRUCTURE RATIOS

1)
2)
3)
4)
Equity ratio
Debt Ratio
Interest Coverage Ratio
Debt-Equity Ratio
D. PROFITABILITY RATIO
1)
2)
3)
4)
5)
Gross Profit Margin Ratio

Operating Profit Margin Ratio
Net Profit Ratio
Rate of return on Investments
Rate of Return on equity
E. VALUATION RATIO
1)
2)
3)
4)
Return on Assets
Return on Shareholders Equity
Earning per Share
Dividend Pay-out Ratio
49
6.5 LIQUIDITY RATIO

1) Current Ratio:
The current ratio is the measure of the firms short term solvency. It
indicates the availability of current assets in rupees for every one rupee of current
liability. A ratio is greater than one means that the firm has more assets than the
current claims against them. Current assets normally include cash, marketable
securities, accounts receivable and inventories. Current liabilities consist of
accounts payable, short term notes payable, short-term loans, current maturities of
long term debt, accrued income taxes and other accrued expenses (wages). The
current ratio can be found out from the following equation.
Current Ratio =
Current Assets
--------------------Current Liabilities
Year
Current Ratio
2014
7.40
2013
2.64
2012
2.65
2011
2.80
Gr a p h n o . 1
50
Interpretation:
1.
In the above graph companies Current Ratio is high in year of 2011. But it is
somewhat decrease initially in 2012 and 2013 after it was increase in the end 2014
2. This situation arise because firm or industry have to manage ascertain amount of
standard ratio say 2:1 the lower of it indicating that firm may not able to meet its
short-term solvency on a time and higher ratio indicating that funds are lying idle
and not fully utilized.
3.
The higher current ratio indicate that the greater the margin of safety for
creditors. That means companys currents assets are increasing in current year. So
company is growing in strong position against its current obligation.
4. Here companies Current ratio is lower in the year 2013 at 2.64:1 and it is higher
in the year of 2013 at 7.40:1
2) Quick Ratio
This ratio is called the Acid Test Ratio. It established the relationship
between quick assets and current liabilities. An asset is liquid if it can be converted
in to cash immediately without a loss of value. The quick ratio is a variant of the
current ratio. It takes into account the fact that inventory, while it is a current asset,
is not as liquid as cash or accounts receivable. Cash is completely liquid; accounts
receivable can normally be converted to cash fairly quickly, by pressing for
collection from the customer. But inventory cannot be converted to cash except by
selling it. This ratio is calculated from the following equation.
51
Quick Ratio =
Quick Assets
--------------------Quick Liabilities
Year
Quick Ratio
2014
6.44
2013
2.05
2012
2.05
2011
1.82
Graph no.2
Interpretation:
1. Quick ratio represents the company ability to meet its immediate obligation.
Generally, a quick ratio of 1:1 is considered to present a satisfactory current
financial condition. A quick ratio 1:1 or more does not necessarily imply sound
liquidity position.
52
2. Thus, a company with high value of quick ratio can suffer from the shortage of
funds if it has slow paying, doubtful and long-duration outstanding debtors. On the
other hand, a company with a low value of quick ratio may really be prospering
and paying its current obligating in time if it has been turning over its inventories
efficiently.
3. From the graph we can see the quick ratio of the company of the last four years.
The company is not very well in the quick ratio. It increases constantly. Over all
the companys position is not good in terms of quick ratio. So we can say that firm
can not able to pay their liability quickly.
53
6.6 ASSET TURNOVER RATIOS
1) Total Asset turnover Ratio =
Years
TAT (times)
2014
1.55
Sales
------------------Total Assets
2013
1.87
2012
2.04
2011
1.66
Graph no.3
Interpretation:
54
1. In the above graph companies Total assets turnover is increasing during year
2012 as compare to 2011. But on or after 2012 it is reducing till 2014
2. This is because that increase/decrease in the ratio indicates that the investment in
the stock is increasing/decreasing, which lead to increase/decrease sales.
3. But here companies Total Assets Turnover ratios is better utilize its investment
in stock efficiently
2) Net Fixed Turnover Ratio=
Years
Net FA
(times)
2014
turnover 1.55
SALES
-----------------Net Fixed Assets
2013
3.68
2012
3.84
2011
3.75
55
Gr a p h n o . 4
Interpretation:
1. Here companies Net Fixed Turnover Ratio is higher in the year 2012 but very
lower in 2014
2. This situation of low ratio arises due to inefficient use of fixed assets after
deduction of depreciation amount. Which remain idle in firm but increased ratio
indicates that it is more efficient to utilize its fixed assets.
3. Here companies Net Fixed Turnover Ratio is higher in the year 2012 at 3.84 as
compared to year 2014 at 1.55.
56
3) Net Working Capital Turnover Ratio =
Years
2014
Net WC turnover 0.36
(times)
2013
2.15
SALES
-----------------Net Working Assets
2012
2.33
2011
2.43
Gr a p h n o . 5
Interpretation:
1. In the above graph companies net working capital is constantly decrease from
previous year. And in year 2014 was very low as compare to previous year.
57
2. This situation shows that a company ratio is decreasing means that working
capital is not fully utilizing properly and a very high ratio is indicating of
companies over trading during the year.
3. Here in the graph companies ratio in the year 2013 is at 1.79 times more in
comparison with 2013 ratio is at 0.36 times.
4) Inventory Turnover Ratio

The inventory turn over ratio indicates the efficiency of the firm in
producing and selling the product. It shows how much time the inventory has
turnover in a year. More the turnover, it is a better the companys efficiency in
handing the inventory. No company wants to have too large an inventory. Goods
that remain in inventory too long tie up the company's assets in idle stock, often
incur carrying charges for the storage of the goods, and can become obsolete while
awaiting sale.
Just-in-Time inventory procedures attempt to ensure that the company
obtains its inventory no sooner than absolutely required in order to support its sales
efforts. That is, of course, an unrealistic ideal, but by calculating the inventory
turnover rate you can estimate how well a company is approaching the ideal. The
inventory turnover ratio is calculated from the following equation.
Inventory Turnover Ratio =
Cost of Goods Sold

-----------------------------------Avg. Inventory
Year
2014
2013
Inventory turnover
1.92
5.02
S.K.SCHOOL OF(times)
BUSINESS MANAGEMENT, PATAN.
2012
4.78
2011
3.93
58
Gr a p h n o . 6
Interpretation:
1. In the above graph companies Inventory Turnover Ratio is fluctuating. ITR is
3.93 in the year 2011 and constantly increase up to year 2013 but in 2014 it is
decrease to 1.92.
2. Here decrease in the ITR in current year indicates decrease in amount of sales by
decreasing per unit investment in the stock. But decrease in the ratio shows that
investment are not fully or efficiently utilize in business.
3. Here companies maximum in the year 2013 at 5.02 times in compare to the year
2014 it was at 1.92 times.
5) Inventory Holding Period=
Avg. Inventory
59
- - - - - - - - - - - - - - - - - - - - - *360
COGS
Inventory holding period shows for how many days the inventory stays in the
business. It shows the holding period of inventory in the business. The lesser the
holding period better for the company. It will save the carrying cost of the
inventory. The inventory holding period is calculated from the following equation.
Year
Inventory holding
period (Day s)
2014
187
2013
71
2012
75
2011
92
Graph no.7
Interpretation:
60
1. In the above company Inventory Holding Period is fluctuating during this year.
Inventory Holding Period is higher in the year 2011 and after then it constantly
decreasing up to year 2013 and there after highly increase in the year 2014
2. This situation arise that if Inventory Holding Period is lower it indicates that
firm is working efficiently and selling more stock in less days. But increase in
Inventory Holding Period indicates that company stock or inventory is remaining
idle and frequently used at time.
3. Here company Inventory Holding Period is high in the year 2014 at 187 days as
compare to all previous year. So its not good for company or companys inventory
remains same.
6) Debtor Turnover Ratio

Measures the firms ability to collect payment from its customers, ex. its
ability to collect the cash from someone who paid by credit. A higher ratio
indicates the firms efficiency in its ability to collect those payments, and/or the
company operates more on a cash basis. A low ratio may mean that the company
should possibly re-think its credit policies and find out why the firm cannot collect
its customers payments on a timely fashion.
Debtor Turnover Ratio =
Credit Sales
--------------------Avg. Debtors
Year
Debtors turnover Ratio
2014
2.68
2013
5.18
2012
5.73
2011
5.58
61
(Times)
Gr a p h n o . 8
Interpretation:
1. In the above graph the companies Debtor Turnover Ratio is fluctuating during
this four year. In the year of 2012 it was higher, while it is lower in the year of
2014
2. The increase in the ratio indicates better since it would indicate that debt are
being collected more promptly means there is more available of fund then it can be
use for other purpose and lower the ratio indicates inefficient collection of debts
from debtors.
3. Here companies Debtor Turnover Ratio is high in the year 2011 at 5.58 times
and it was lover in the year 2014 at 2.68 times. There fore the company is not good
in collecting of debts from debtors.
62
(7)
Average Age Of Debtors =
Average Debtors
------------------------- *360
Credit Sales
The collection period measures the quality of the debtors since it indicates the
speed of their collection. The shorter the period averages of collection period the
better the quality of debtors. The collection period
Can be found out from the following formula
63
Year
Avg. collection
Period (Days)
2014
134
2013
70
2012Build 2011
Lets
Better Roads
63
65
Gr a p h n o . 9
Interpretation:
1. In the above graph the ratio of the company is fluctuating during the year. And it
is initially higher in year 2014 and it was higher from last years.
2. in this situation high ratio indicates that debtors are enjoying high credit period
form debt collection from them by company but a lower ratio indicates vice versa
of it.
3. Here companies ratio in the year 2014 is at 134 days. Its high from last three
years. So companys collection Quality is not better from previous year.
64
6.7 FINANCE STRUCTURE RATIOS

1) Equity Ratio =
Years
Equity Ratio ( :)
Net Worth
-----------------------Total Capital Employed
2014
0.98
2013
0.92
2012
0.92
2011
0.91
Graph no.10
65
Interpretation:
1. In the above diagram companies equity ratio is constantly increasing from the
year 2011 to 2014, no doubt it is change compare to 2013-2012 equity ratios.
2. This situation arise that in high ratio indicating that it providing adequate safety
to the creditors who give loan to firm or invest in the firm assets . But lower ratio
indicates that it provide low safety to the creditors because in case of liquidation
creditors are likely to be loose their money.
3. Here companies equity ratio is higher in the year 2014 at 0.98:1 and it was
lower in the year of 2011 at 0.91:1. A ratio constantly increase so company is good
in providing adequate safety to the creditors who give loan to firm or invest in the
firm assets.
2) Debt Ratio =
Long term debt

----------------------Total Capital Employed
Years
2014
Debt Ratio ( :) 0.013
2013
0.079
2012
0.077
2011
0.081
66
Gr a p h n o . 11
Interpretation:
1. In the above graph companies debt ratio is increasing and decreasing. But in the
year of 2014 it was going too much down other than previous year.
2. In this situation the higher ratio indicating the risky financial position that totals
capital assets would be less to meet its long term liabilities. While low ratio
indicating that shows more safety margin to the investors or creditors.
3. Here companies debt ratio lower in the year 2014 is just
0.013: 1 There fore its good for company to indicating that shows more safety
margin to the investors or creditors.
3) Interest coverage ratio=
Years
2014
Interest Coverage 0.51
Ratio (times)
EBIT
-------------Interest
2013
7.37
2012
8.55
2011
11.19
67
Gr a p h n o . 1 2
Interpretation:
1. In the above graph companies Interest Coverage Ratio is higher in the year 2011
and there after constantly decrease.
2. The situation of high ratio indicating that firm/industry is utilizing its interest
bearing debt funds more efficiently. While a low ratio indicating under utilization
of the debt funds of business.
3. Here companies Interest Coverage Ratio in the year 2011 is higher at 11.19
times and it is lower in the year 2014 0.51. Because of that the company is not
good in utilization of the debt funds of business.
4) Debt Equity Ratio

The Total Debt to Equity ratio helps us measure a companys financial
leverage. It reflects the relative position of the equity holders and the lenders and
68
indicates the companys policy on the mix of capital funds. It shows us how much
of a companys financing of assets is due to investors putting in money into the
company, or perhaps loans taken out by banks. The debt-equity ratio can be found
out from the following equation.
Debt Equity Ratio =
Total Long-Term Debt

--------------------Net Worth
Years
Debt Equity Ratio
2014
0.01
2013
0.09
2012
0.08
2011
0.09
Gr a p h n o . 1 3
69
Interpretation:
1. The companys debt equity ratio is fluctuating during four year and it was higher
in the year 2013 and 2011 while it was lowest in the year 2014 debt equity ratio.
2. In this higher ratio indicating a risky financial position of the firm that it shows
less use of equity fund than debt. But low ratio indicating that it use fund
efficiently than debt and give larger safety margin to the creditors. Here this ratio is
only acceptable if it is 2:1 or nearby.
3. Here companies is lower in the year 2014 at 0.01:1 so its better for company to
use fund efficiently than debt and give larger safety margin to the creditors.
6.8 PROFITABILITY RATIO

1) Gross Profit Margin Ratio
The gross profit margin measures the amount that customers are willing
to pay for a company's product, over and above the company's cost for that
product. As mentioned previously, this is the value that the company adds to that of
the products it obtains from its suppliers. This margin can depend on the
attractiveness of additional services, such as warranties, that the company provides.
The gross profit margin also depends heavily on the ability of the sales force to
persuade its customers of the value added by the company. The gross profit margin
ratio can be found out from the following equation.
70
Gross Profit Margin Ratio =
Gross Profit
--------------------Sales
Years
GP Ratio (%)
2014
12.95%
2013
2012
17.36% 19.14%
2011
14.50%
Gr a p h n o . 1 4
Interpretation:
1. In the above graph companies gross profit ratio is increase or decrease. In 2012
gross profit ratio is 19.14% and then it is decrease and reaches to 12.95% in 2014.
2. This may be arising due to fluctuation in the selling price of a product, relatively
with change in material price or wages.
3. Here industrial gross profit ratio is better than company in comparison to
subsequent years which shows that industry is more efficient than company to
cover its admin & marketing exp.
71
2) Operating Profit Margin Ratio

The operating profit margin indicates how much profit a company makes
after paying for variable costs of production such as wages, raw materials, etc. It
shows the efficiency of a company controlling the costs and expenses associated
with its business operations. The operating margin is another measurement of
managements efficiency. It compares the quality of a companys operations to its
competitors. A business that has a higher operating margin than its industrys
average tends to have lower fixed costs and a better gross margin, which gives
management more flexibility in determining prices. This pricing flexibility
provides an added measure of safety during tough economic times.
Operating profit Ratio=
Operating profit
--------------------Sales
Years
2014
Operating profit 4.06%
2013
2012
2011
17.47%
16.64%
19.76%
72
Gr a p h n o . 1 5
Interpretation:
1. Operating profit margin measures a companys operating efficiency and pricing
efficiency with its successful cost controlling. The higher the ratio, the better a
company is. The ratio indicates that there is increase in operating profit margin
from 7.76% in 2007 to 19.88% in 2009.
2. In the above graph the companies Operating profit margin ratio is reducing an
increase.
3. This is because of fluctuation in different indirect costs over its sales like cost of
goods sold, administration Expense a highly ratio reduce in the year 2014 at 4.06%
4. That means a companys operating efficiency and pricing efficiency is not with
its successful cost controlling.
3) Net Profit Margin Ratio

The net margin is indicative of managements ability to operate the
business with sufficient success not only to recover from revenues of the period,
the cost of merchandise or service, the expenses of operating the business and the
73
cost of the borrowed funds but also to leave a margin of reasonable compensation
to the owners for providing their capital at risk. The ratio of net profit to sales
essentially expresses the cost price effectiveness of the operation. The net profit
margin ratio can be found out from the following equation.
Net Profit Ratio =
Net Profit Ratio

---------------------*100
Sales
Years
Net profit
2014
5.58%
2013
2012
10.28% 8.19%
2011
9.70%
Gr a p h n o . 1 6
Interpretation:
1. In the above graph companies net profit ratio is increase and decrease. In 2011
ratio is 9.70% and then it is and reach to 5.58% in 2014
74
2. It could be because of in sufficient profit available to cover its cost of goods

sold & indirect costs incurred during the business.
3. But here industrial net profit ratio is fluctuating & trying to improve its
efficiency & operational activity during this subsequent year than company.
4. We can conclude Apollo being not very efficient with keeping its expenses at a
minimum and its ability to retain much of its sales as profit.
4) Rate of Return on Investment=
EBIT
--------------------- *100
Total Assets
This is a measure of profitability from a given level of investment. It is an

excellent indicator of overall performance of a company. Rate of return on
investment is also known as return on assets. The return on investment is computed
as follow;
Years
Ratio (%)
2014
5.01%
2013
2012
31.92% 33.28%
2011
32.08%
75
Gr a p h n o . 1 7
Interpretation:
1. In the above graph the companies rate of return on investment fluctuating is
with lower margin as compared to other years especially in 2012.
2. This is because that before paying interest, dividend and tax. The available
profit is less than the capital employed in business say total assets.
3. This kind of Situation Company will increase burden of interest payment and
dividend. Hence, both are not enough good for investment.
76
(5) Rate of Return on Equity =
Profit for the Equity

------------------------------*100
Net worth
Return on equity indicates how well the firm has used the resources of owners. In
fact, this ratio is one of the most important relationships in financial analysis. The
earning satisfactory return is the most desirable objective of a business.
Years
2014
Ratio (%) 46.43%
2013
2012
12.87% 10.39%
2011
12.49%
Graph no.18
77
Interpretation:
1. Here companies roe is decreasing during year 2012 as compare to 2011. But
than after it increase till 2014
2. This situation shows that after paying sufficient dividend to its preference
shareholders, both have sufficient profit to entitle the equity dividend to equity
shareholders.
3. Such situation will attract investors and may increase in its shareholding. It also
suggests that it is properly utilizing its business resources.
78
6.9 VALUATION RATIO

1) Return on Assets
One of management's most important responsibilities is to bring about a
profit by effective use of the resources it has at hand. One ratio that speaks to this
question is return on assets. Here, the profitability ratio is measured in terms of the
relationship between net profit and assets. The ROA may also be called profit-toasset ratio. The real return on the total assets is the net earning available to owners.
The return on assets ratio can be found out from the following equation.
Return on Assets =
Net Profit after Tax

--------------------Average total Assets
Years
2014
Ratio (%) 36.17%
2013
2012
10.87% 9.10%
2011
10.90%
79
Graph no.19
Interpretation:
1. This ratio measures the pre tax rate of return on assets and can be used to
measure the effective utilization of assets on the profitability of the business. An
indicator of how profitable a company is relative to its total assets. ROA gives an
idea as to how efficient management is at using its assets to generate earnings.
2. The ratio indicates that there is increase in the ROA from 10.90% in 2011 to
36.17% in 2014. That means the percentage of the real return on the assets is lead
to increase net earning of the owners. The company is effective utilization of assets
on the profitability of the business.
2) Return on Total Shareholders' Equity

Return on Equity judges the profitability from the point of view of equity
shareholders. This ratio has great interest to equity shareholders. The return on
equity measures the profitability of equity funds invested in the firm. The investors
favour the company with higher ROE. The amount of net income returned as a
percentage of shareholders equity. Return on equity measures a corporation's
profitability by revealing how much profit a company generates with the money
shareholders have invested. The return on shareholders equity ratio can be found
out from the following equation.
Return on Total Shareholders' Equity =
Net Profit after Taxes

--------------------Average total shareholders equity
80
Years
Ratio (%)
2014
852.94%
2013
130.96%
2012
110.10%
2011
115.26%
Graph no.20
Interpretation:
1. This ratio relates the pre tax returns to the level of equity capital employed in the
business. Caution should be used when interpreting this ratio. A high ratio,
normally associated with a profitable firm, may indicate an under capitalized firm
while a low ratio, which normally indicates an inefficient or unprofitable firm.
2. The ratio indicates that there is increase in the ROE from 115.26 % in 2011 to
852.94% in 2014. That means the firm has earned a satisfactory return for its
equity shareholders. The rate of return on shareholders equity is of crucial
significance in ratio analysis vis--vis from the point of the owners of the firm.
81
3) Earning Per Share

Whatever income remains in the business after all prior claims, other than
owners claims (i.e. ordinary dividends) have been paid, will belong to the ordinary
shareholders who can then make a decision as to how much of this income they
wish to remove from the business in the form of a dividend, and how much they
wish to retain in the business. The shareholders are particularly interested in
knowing how much has been earned during the financial year on each of the shares
held by them. The earning per share ratio can be found out from the following
equation.
Earning Per Share =
Net Profits for Equity Shares

--------------------Number of Equity Shares
Years
Earning (rs per share)
2014 2013
85.29 13.10
2012
11.00
2011
11.52
82
Gr a p h n o . 2 1
Interpretation:
1. In the above graph earning per share of the company is constantly increasing
from the year of 2012.
2. In this higher earning per share is indicating that after paying preference
dividend out of the available profit, what could be the profit earning capacity of the
business on per equity shares and is showing better performance & prospect of the
company and vice-versa.
3. Here a company EPS higher in the year 2014 is 85.29 per share while EPS is
lower in the year 2012 is 11.00.
4. The ratio indicates that there is increase in the EPS from 11.52% in 2011 to
85.29% in 2014. That means it is increase the growth of company. The company is
able to use its equity share capital effectively with compare to other companies.
83
(4) Dividend pay-out ratio=
Years
Dividend
share)
pay
(rs
2014
per 0.29
Dividend per Share

----------------------- *100
Earning per Share
2013
0.90
2012
1.36
2011
0.43
Gr a p h n o . 2 2
Interpretation:
1. The companies Dividend Pay-Out Ratio is increase from 2011 to 2012 but it was
decrease constantly up to 2014.
84
2. In this higher ratio indicating that firm is loosing its long term projects
investments(if had ) by paying large portion of the profit in a form of dividend but
on the other side more dividend will able attract more investors and shows better
performance & policies of the company.
3. Here companies Dividend Pay-Out Ratio is highest in the year 2012 is at 1.36
times and it is lowest in the year 2014 at 0.29times.
85
SWOT ANALYSIS
STRENGHTS
ISO 9001 certified company
Acknowledged market leader with high level of customer goodwill
Always close to the customer. Proactive lather than reactive to changing
market needs
Large customer base & high brand loyalty
Fastest delivery of equipment and spare parts
WEAKNESSES
In competition with the foreign companies, price of the equipment is high

compare to the foreign companies
There is a lot of noise pollution at the work place. This noise is dangerous
for the workers
86
OPPORTUNITIES
Opportunity always exists but main thing is they need to be realized and
recognized. This requires a strong motivational factor and premium foresight
THREATS
There is no interference of anyone except the government because the
Apollo Earthmovers Limited is limited company
87
CONCLUSION
APOLLO EARTHMOVERS LTD is Indias No 1 manufacture of
road construction & maintenance equipment. There are very less competitors
against Apollos product in market and quality of its products is better than
competitors. Its products are increasing every year so there is bright future for
company. The chairman and managing director is well-experienced person. He has
experience in this field. The most important is that companys main aim is not
make profit but with profit to provide maximum service to the company in any
time or position.
Company also contributes to the nation by earning foreign exchange.
Company serves society providing full employment to the skilled and also
unskilled people and brings up their standard of living. APOLLO
EARTHMOVERS LTD is able to use maximum capacity of manpower and also
of technical know how nowadays. This shows quality improvement of product and
best management company. By these step of company there may be possible of
improvement in technology knowledge in country.
I have really a unique experience in Apollo Earthmovers Ltd, mehsana
during my training period. I have learnt many unknown things, which are out of
my knowledge of management aspects. I have found there the management in my
practical life. I have collected all my necessary information from the concerning
department by myself. I have come across many intelligent and expert persons in
the Apollo Earthmovers Ltd.
88
BIBLIOGRAPHY
BOOKS:
Narayanaswamy, Financial Accounting a Managerial Perspective.
Financial Management: By Prasanna Chandra, 7th Edition, and Tata
McGraw Hill Publications
Search Engine:
www.google.co.in
Websites:
www.Apollo.co.in
www.economictimes.com
www.moneycontrol.com
89
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Lets Build Better Roads

In partial fulfillment of the requirement for the award of the degree of

Academic Year 2014-15

Lets Build Better Roads

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

I am indebted and whole-heatedly thankful for the assistance received from

I am highly indebted to Mr. Bharat Dave (Accountant) for their guidance

I would like to express my gratitude to my college S.K.School of Business

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

Here research and development department is separate so product research is

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

Objective of preparing project report subjected on Ratio Analysis of

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

Information of Finance Department

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

History of the Company

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

1.1 HISTORY OF COMPANY

Lets Build Better Roads

exchange just from 19 June 2001.Apollo Earthmover Limited Company is ISO

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

The Company has issued Bonus Shares in the Ratio of 1:2.

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

1.2 DEVELOPMENT OF COMPANY

Road Construction Equipment

Lets Build Better Roads

Reason for select this (G.I.D.C.) location for firm:

Reason for select the name of the company Apollo Earthmovers

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

1.3 COMPANY PROFILE

Lets Build Better Roads

M.M.SALVI & CO.

Vision of the company

Mission of the company

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

1.4 BOARD OF DIRECTORS

MR. MANIBHAI V. PATEL

MR. ASIT A. PATEL

MR. ANAND A. PATEL

MR. UGRABHAI V. PATEL

MR. NAVINCHANDRA V. SHAH

Lets Build Better Roads

1.5 SIZE & FORM ORGANIZATION

Industry Can How Classified Into Three Categories

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Lets Build Better Roads