A STUDY ON

RATIO ANALYSIS AT
AMARARAJA BATTERIES LIMITED (ARBL)

A PROJECT REPORT

Submitted in partial fulfillment of the

requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the Guidance of

S.SUJATHA M.B.A., M.Phil

ASSISTANT PROFESSOR OF MANAGEMENT STUDIES
SRM UNIVERSITY

By

SUNEEL.R
(Reg.No.35080623)

DEPARTMENT OF BUSINESS ADMINISTRATION

SRM UNIVERSITY
YEAR-2010

SCHOOL OF MANAGEMENT
SRM UNIVERSITY

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SRM Nagar, Kattankulathur-603203

Phone: 044-27452270, 27417777, Fax: 044-27453903
E-hod@mba.srmuniv.ac.in, website:www.srmuniv.ac.in
________________________________________________________________________

BONAFIDE CERTIFICATE
Certified that this project report titled A STUDY ON RATIO ANALYSIS AT
AMARARAJA BATTERIES LIMITED is the bonafide work of Mr.R.SUNEEL who carried
out the research under my supervision.

Certified further, that to the best of my knowledge the work reported here in does not form
part of any other Project report or dissertation on the basis of which a degree or award was
conferred on an earlier occasion on this or any other candidate.

Signature of the supervisor

Signature of the HOD

DECLARATION

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I hereby declare that the Project Report entitled A STUDY ON RATIO

ANALYSIS AT AMARARAJA BATTERIES LIMITED(ARBL) is a record of independent

research work submitted by me to SRM University, Chennai, for developing the real time
experience as well as award the degree of Master of Business Administration and has been carried
out during the period of my study at SRM UNIVERSITY, Chennai, Under the guidance of
S.SUJATHA, Department of MBA.

PLACE: Chennai

(R.SUNEEL)

ACKNOWLEDGEMENT

I would like to express deepest gratitude and thanks to the Dr.JAYASREE SURESH, Head of
the Department for her valuable support in doing this project. She has been a source of
encouragement and guidance in all our endeavors.

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I would like to sincerely acknowledge thanks to Sri C.Ramachandra raju, Finance

Manager of Amararaja Batteries limited, Mr.C.Ravi Costing Manager of Amararaja Batteries
Limited for their moral support during the research work.
I express our profound thanks to S.SUJATHA project guide, for her consistent
encouragement and invaluable suggestion in completing this project, without his effort the
completion of this project would be practically impossible.

It gives me great pleasure to acknowledge my indebtedness to my family Members for

their substantial moral support and encouragement in my studies.

I would like to extend my sincere thanks to My Dearest Friends and also my classmates
for their unnerving support in the completion of the work.

(R. SUNEEL)

TABLEOFCONTENTS

Chapters
1

TitleandTopics

PageNo

INTRODUCTION
Introduction

12

OBJECTIVES&METHODOLOGY

Needofstudy

Scopeofstudy

5
Page4

Objectivesofstudy

ReviewofLiterature

719

ResearchMethodology

20

Limitationsofstudy

21

COMPANYPROFILE

2229

DATAANALYSISANDINTERPRETATION

FINDINGS&SUGGESTIONS

Findings

62

Suggestions

63

Conclusion

64

3060

Annexure

BIBLOGRAPHY

6571
72

LISTOFTABLES
SI .NO

PARTCULARS

PAGE.NO

CURRENT RATIO

31

QUICK RATIO

33

CASH RATIO

35

NETWORKING CAPITAL RATIO

36

DEBT RATIO

37

DEBT EQUITY RATIO

39

INTEREST COVERAGE RATIO

41

TOTAL LIABILITIES RATIO

42

INVENTORY TURNOVER RATIO

43

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10

DEBTORS TURNOVER RATIO

45

11

FIXED ASSET TURNOVER RATIO

46

12

CURRENT ASSET TURNOVER RATIO

48

13

TOTAL ASSET TURNOVER RATIO

49

14

WORKING CAPITAL TURNOVER RATIO

50

15

NET ASSET TURNOVER RATIO

51

16

CAPITAL TURNOVER RATIO

52

17

CREDITOR TURNOVER RATIO

53

18

GROSS PROFIT

54

19

NET PROFIT

56

20

OPERITING EXPENCES RATIO

57

21

RETURN ON INVESTMENT

59

22

RETURN ON EQUITY SHARE HOLDER FUND

60

LISTOFCHARTS
SI .NO

PARTCULARS

PAGE.NO

CURRENT RATIO

32

QUICK RATIO

34

CASH RATIO

35

NETWORKING CAPITAL RATIO

36

DEBT RATIO

38

DEBT EQUITY RATIO

40

INTEREST COVERAGE RATIO

41

TOTAL LIABILITIES RATIO

42

INVENTORY TURNOVER RATIO

44

10

DEBTORS TURNOVER RATIO

45

11

FIXED ASSET TURNOVER RATIO

47

12

CURRENT ASSET TURNOVER RATIO

48

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13

TOTAL ASSET TURNOVER RATIO

49

14

WORKING CAPITAL TURNOVER RATIO

50

15

NET ASSET TURNOVER RATIO

51

16

CAPITAL TURNOVER RATIO

52

17

CREDITOR TURNOVER RATIO

53

18

GROSS PROFIT

55

19

NET PROFIT

56

20

OPERITING EXPENCES RATIO

58

21

RETURN ON INVESTMENT

59

22

RETURN ON EQUITY SHARE HOLDER FUND

60

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INTRODUCTION

INTRODUCTION
ABOUTRATIOANALYSIS

The ratio analysis is the most powerful tool of financial analysis. Several ratios calculated

from the accounting data can be grouped into various classes according to financial activity or
function to be evaluated.

DEFINITION:

The indicate quotient of two mathematical expressions and as The relationship

between two or more things. It evaluates the financial position and performance of the firm.
As started in the beginning many diverse groups of people are interested in analyzing
financial information to indicate the operating and financial efficiency and growth of firm. These
people use ratios to determine those financial characteristics of firm in which they interested with
the help of ratios one can determine.

The ability of the firm to meet its current obligations.

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The extent to which the firm has used its long-term solvency by borrowing funds.

The efficiency with which the firm is utilizing its assets in generating the sales revenue.

The overall operating efficiency and performance of firm.

The information contained in these statements is used by management, creditors,

investors and others to form judgment about the operating performance and financial
position of firm. Uses of financial statement can get further insight about financial strength
and weakness of the firm if they properly analyze information reported in these statements.
Management should be particularly interested in knowing financial strength of the firm to
make their best use and to be able to spot out financial weaknesses of the firm to take
suitable corrective actions. The further plans firm should be laid down in new of the firms
financial strength and weaknesses. Thus financial analysis is the starting point for making
plans before using any sophisticated forecasting and planning procedures. Understanding the
past is a prerequisite for anticipating the future.

Need of study

Scope of study
Objectives

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NEED OF THE STUDY

The prevalent educational system providing the placement training at an industry being a
part of the curriculum has helped in comparison of theoretical knowledge with practical system. It
has led to note the convergences and divergence between theory and practice.

The study enables us to have access to various facts of the organization. It helps in
understanding the needs for the importance and advantage of materials in the organization, the
study also helps to exposure our minds to the integrated materials management the various
procedures, methods and technique adopted by the organization. The study provides knowledge
about how the theoretical aspects are put in the organization in terms of described below

9 To pay wages and salaries.

9 For the purchase of raw materials, spares and components parts.
9 To incur day-to-day expenses.
9 To meet selling costs such as packing, advertising.
9 To provide credit facilities to customers.
9 To maintain inventories and raw materials, work-in-progress and finished stock.

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Scopeofthestudy

The scope of the study is limited to collecting financial data published in the annual
reports of the company every year. The analysis is done to suggest the possible solutions. The
study is carried out for 4 years (2006 10).

Using the ratio analysis, firms past, present and future performance can be analyzed and

this study has been divided as short term analysis and long term analysis. The firm should
generate enough profits not only to meet the expectations of owner, but also to expansion
activities.

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OBJECTIVESOFSTUDY

1. To study and analyze the financial position of the Company through ratio analysis.
2. To suggest measures for improving the financial performance of organization.
3. To analyze the profitability position of the company.
4. To assess the return on investment.
5. To analyze the asset turnover ratio.
6. To determine the solvency position of company.
7. To suggest measures for effective and efficient usage of inventory.

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REVIEWOFLITERATURE

FINANCIALANALYSIS
Financial analysis is the process of identifying the financial strengths and weakness of the firm.
It is done by establishing relationships between the items of financial statements viz., balance
sheet and profit and loss account. Financial analysis can be undertaken by management of the firm,
viz., owners, creditors, investors and others.

Objectivesofthefinancialanalysis

Analysis of financial statements may be made for a particular purpose in view.

1. To find out the financial stability and soundness of the business enterprise.
2. To assess and evaluate the earning capacity of the business
3. To estimate and evaluate the fixed assets, stock etc., of the concern.
4. To estimate and determine the possibilities of future growth of business.

5. To assess and evaluate the firms capacity and ability to repay short and long term loans

Partiesinterestedinfinancialanalysis
The users of financial analysis can be divided into two broad groups.

Internalusers
1. Financial executives
2. Top management

Externalusers
1. Investors
2. Creditor.
3. Workers
4. Customers
5. Government
6. Public

7. Researchers

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Significanceoffinancialanalysis
Financial analysis serves the following purpose:

Toknowtheoperationalefficiencyofthebusiness:
The financial analysis enables the management to find out the overall efficiency of the firm. This will
enable the management to locate the weak Spots of the business and take necessary remedial action.

Helpfulinmeasuringthesolvencyofthefirm:
The financial analysis helps the decision makers in taking appropriate decisions for strengthening the
short-term as well as long-term solvency of the firm.

Comparisonofpastandpresentresults:
Financial statements of the previous years can be compared and the trend regarding various
expenses, purchases, sales, gross profit and net profit can be ascertained.

Helpsinmeasuringtheprofitability:

Financial statements show the gross profit, & net profit.

Interfirmcomparison:
The financial analysis makes it easy to make inter-firm comparison. This comparison can also be made for
various time periods.

BankruptcyandFailure:
Financial statement analysis is significant tool in predicting the bankruptcy and the failure of the business
enterprise. Financial statement analysis accomplishes this through the evaluation of the solvency position.

Helpsinforecasting:

The financial analysis will help in assessing future development by making forecasts and preparing
budgets.

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METHODSOFANALYSIS:
A financial analyst can adopt the following tools for analysis of the financial statements. These are
also termed as methods of financial analysis.
A. Comparative statement analysis
B. Common-size statement analysis
C. Trend analysis
D. Funds flow analysis
E. Ratio analysis

NATUREOFRATIOANALYSIS
Ratio Analysis is a powerful tool of financial analysis. A ratio is defined as "the indicated quotient
of mathematical expression" and as "the relationship between two or more things". A ratio is used as
benchmark for evaluating the financial position and performance of the firm. The relationship between
two accounting figures, expressed mathematically, is known as a financial ratio. Ratio helps to
summarizes large quantities of financial data and to make qualitative judgment about the firm's financial
performance.
The persons interested in the analysis of financial statements can be grouped under three head
owners (or) investors who are desired primarily a basis for estimating earning capacity. Creditors who are
concerned primarily with Liquidity and ability to pay interest and redeem loan within a specified period.
Management is interested in evolving analytical tools that will measure costs, efficiency, liquidity and
profitability with a view to make intelligent decisions.

STANDARDSOFCOMPARISON
The ratio analysis involves comparison for an useful interpretation of the financial statements. A
single ratio in itself does not indicate favorable or unfavorable condition. It should be compared with
some standard. Standards of comparison are:
1. Past Ratios
2. Competitor's Ratios
3. Industry Ratios
4. Projected Ratios

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PastRatios:Ratios calculated from the past financial statements of the same firm.
Competitor'sRatios: Ratios of some selected firms, especially the most progressive and successful
competitor at the same point in time.

IndustryRatios:Ratios of the industry to which the firm belongs.

ProjectedRatios:Ratios developed using the projected financial statements of the same firm.

TIMESERIESANALYSIS
The easiest way to evaluate the performance of a firm is to compare its present ratios with past
ratios. When financial ratios over a period of time are compared, it is known as the time series analysis or
trend analysis. It gives an indication of the direction of change and reflects whether the firm's financial
performance has improved, deteriorated or remind constant over time.

CROSSSECTIONALANALYSIS
Another way to comparison is to compare ratios of one firm with some selected firms in the
industry at the same point in time. This kind of comparison is known as the cross-sectional analysis. It is
more useful to compare the firm's ratios with ratios of a few carefully selected competitors, who have
similar operations.

INDUSTRYANALYSIS
To determine the financial conditions and performance of a firm. Its ratio may be compared with
average ratios of the industry of which the firm is a member. This type of analysis is known as industry
analysis and also it helps to ascertain the financial standing and capability of the firm & other firms in the
industry. Industry ratios are important standards in view of the fact that each industry has its
characteristics which influence the financial and operating relationships.

TYPESOFRATIOS
Management is interested in evaluating every aspect of firm's performance. In view of the requirement of
the various users of ratios, we may classify them into following four important categories:
1. Liquidity Ratio
2. Leverage Ratio
3. Activity Ratio
4. Profitability Ratio

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3.1LiquidityRatio
It is essential for a firm to be able to meet its obligations as they become due. Liquidity Ratios
help in establishing a relationship between cast and other current assets to current obligations to provide a
quick measure of liquidity. A firm should ensure that it does not suffer from lack of liquidity and also that
it does not have excess liquidity. A very high degree of liquidity is also bad, idle assets earn nothing. The
firm's funds will be unnecessarily tied up in current assets. Therefore it is necessary to strike a proper
balance between high liquidity. Liquidity ratios can be divided into three types:
3.1.1 Current Ratio
3.1.2 Quick Ratio
3.1.3 Cash Ratio

3.1.1CurrentRatio
Current ratio is an acceptable measure of firms short-term solvency Current assets includes cash
within a year, such as marketable securities, debtors and inventors. Prepaid expenses are also included in
current assets as they represent the payments that will not made by the firm in future. All obligations
maturing within a year are included in current liabilities. These include creditors, bills payable, accrued
expenses, short-term bank loan, income-tax liability in the current year.
The current ratio is a measure of the firm's short term solvency. It indicated the availability of
current assets in rupees for every one rupee of current liability. A current ratio of 2:1 is considered
satisfactory. The higher the current ratio, the greater the margin of safety; the larger the amount of current
assets in relation to current liabilities, the more the firm's ability to meet its obligations. It is a cured -and
-quick measure of the firm's liquidity.
Current ratio is calculated by dividing current assets and current liabilities.

Current Ratio =

Current Assets
________________
Current Liabilities

3.1.2QuickRatio
Quick Ratio establishes a relationship between quick or liquid assets and current liabilities. An
asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value.
Cash is the most liquid asset, other assets that are considered to be relatively liquid asset and included in
quick assets are debtors and bills receivables and marketable securities (temporary quoted investments).

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Inventories are converted to be liquid. Inventories normally require some time for realizing into
cash; their value also has a tendency to fluctuate. The quick ratio is found out by dividing quick assets by
current liabilities.

Quick Ratio =

Current assets - Inventories

_________________________
Current Liabilities

Generally, a quick ratio of 1:1 is considered to represent a satisfactory current financial condition.
Quick ratio is a more penetrating test of liquidity than the current ratio, yet it should be used cautiously. A
company with a high value of quick ratio can suffer from the shortage of funds if it has slow- paying,
doubtful and long duration outstanding debtors. A low quick ratio may really be prospering and paying its
current obligation in time.

3.1.3CashRatio
Cash is the most liquid asset; a financial analyst may examine Cash Ratio and its equivalent
current liabilities. Cash and Bank balances and short-term marketable securities are the most liquid assets
of a firm, financial analyst stays look at cash ratio. Trade investment is marketable securities of equivalent
of cash. If the company carries a small amount of cash, there is nothing to be worried about the lack of
cash if the company has reserves borrowing power. Cash Ratio is perhaps the most stringent Measure of
liquidity. Indeed, one can argue that it is overly stringent. Lack of immediate cash may not matter if the
firm stretch its payments or borrow money at short notice.

Cash and bank balances + Current Investment

Cash Ratio= -------------------------------------------------------------------Current Liabilities

3.2LEVERAGERATIOS
Financial leverage refers to the use of debt finance while debt capital is a cheaper source of
finance: it is also a riskier source of finance. It helps in assessing the risk arising from the use of debt
capital. Two types of ratios are commonly used to analyze financial leverage.
1. Structural Ratios &
2. Coverage ratios.

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Structural Ratios are based on the proportions of debt and equity in the financial structure of firm.
Coverage Ratios shows the relationship between Debt Servicing, Commitments and the sources
for meeting these burdens.
The short-term creditors like bankers and suppliers of raw material are more concerned with the
firm's current debt-paying ability. On the other hand, long-term creditors like debenture holders, financial
institutions are more concerned with the firm's long-term financial strength. To judge the long-term
financial position of firm, financial leverage ratios are calculated. These ratios indicated mix of funds
provided by owners and lenders.
There should be an appropriate mix of Debt and owner's equity in financing the firm's assets. The
process of magnifying the shareholder's return through the use of Debt is called "financial leverage" or
"financial gearing" or "trading on equity". Leverage Ratios are calculated to measure the financial risk
and the firm's ability of using Debt to share holder's advantage.

Leverage Ratios can be divided into five types.

3.2.1 Debt equity ratio.

3.2.2 Debt ratio.
3.2.3 Interest coverage ratio
3.2.4 Proprietary ratio.
3.2.5 Capital gearing ratio

3.2.1Debtequityratio
It indicates the relationship describing the lenders contribution for each rupee of the owner's
contribution is called debt-equity ratio. Debt equity ratio is directly computed by dividing total debt by
net worth. Lower the debt-equity ratio, higher the degree of protection. A debt-equity ratio of 2:1 is
considered ideal. The debt consists of all short term as well as long-term and equity consists of net worth
plus preference capital plus Deferred Tax Liability.

Long term Debts

Debt Equity Ratio = ---------------------Share holder funds (Equities)

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3.2.2Debtratio
Several debt ratios may used to analyze the long-term solvency of a firm. The firm may be
interested in knowing the proportion of the interest-bearing debt in the capital structure. It may, therefore,
compute debt ratio by dividing total total debt by capital employed on net assets. Total debt will include
short and long-term borrowings from financial institutions, debentures/bonds, deferred payment
arrangements for buying equipments, bank borrowings, public deposits and any other interest-bearing
loan. Capital employed will include total debt net worth.

Debt
Debt Ratio = ---------Equity

3.2.3InterestCoverageRatio

The interest coverage ratio or the time interest earned is used to test the firms debt servicing
capacity. The interest coverage ratio is computed by dividing earnings before interest and taxes by interest
charges. The interest coverage ratio shows the number of times the interest charges are covered by funds
that are ordinarily available for their payment. We can calculate the interest average ratio as earnings
before depreciation, interest and taxes divided by interest.

EBIT
Interest Coverage ratio = --------------Interest

3.2.4Proprietaryratio

The total shareholder's fund is compared with the total tangible assets of the company. This ratio
indicates the general financial strength of concern. It is a test of the soundness of financial structure of the
concern. The ratio is of great significance to creditors since it enables them to find out the proportion of
share holders funds in the total investment of business.

Net worth

Proprietary Ratio = -------------------------------------x 100

Total tangible assets

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3.2.5Capitalgearingratio:
This ratio makes an analysis of capital structure of firm. The ratio shows relationship between
equity share capital and the fixed cost bearing i.e., preference share capital and debentures.
Equity capital
Capital gearing ratio = ----------------------------------------------P.S capital +Debentures +Loans

3.3ACTIVITYRATIOS
Turnover ratios also referred to as activity ratios or asset management ratios, measure how
efficiently the assets are employed by a firm. These ratios are based on the relationship between the level
of activity, represented by sales or cost of goods sold and levels of various assets. The improvement
turnover ratios are inventory turnover, average collection period, receivable turn over, fixed assets
turnover and total assets turnover.
Activity ratios are employed to evaluate the efficiency with which the firm manages and utilize its assets.
These ratios are also called turnover ratios because they indicate the speed with which assets are being
converted or turned over into sales. Activity ratios thus involve a relationship between sales and assets. A
proper balance between sales and assets generally reflects that asset utilization.

Activityratiosaredividedintofourtypes:
3.3.1 Total capital turnover ratio
3.3.2 Working capital turnover ratio
3.3.3 Fixed assets turnover ratio
3.3.4 Stock turnover ratio

3.3.1Totalcapitalturnoverratio:This ratio expresses relationship between the amounts invested

in this assets and the resulting in terms of sales. This is calculated by dividing the net sales by total sales.
The higher ratio means better utilization and vice-versa.
Some analysts like to compute the total assets turnover in addition to or instead of net assets
turnover. This ratio shows the firm's ability in generating sales from all financial resources committed to
total assets.

Sales
Total assets turnover = ---------------------------Capital employed.

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3.3.2 Working capital turnover ratio: This ratio measures the relationship between working
capital and sales. The ratio shows the number of times the working capital results in sales. Working
capital as usual is the excess of current assets over current liabilities. The following formula is used to
measure the ratio:
Sales
Working capital turnover ratio = ------------------------------Working capital

3.3.3Fixedassetturnoverratio: The firm may which to know its efficiency of utilizing fixed
assets and current assets separately. The use of depreciated value of fixed assets in computing the fixed
assets turnover may render comparison of firm's performance over period or with other firms.
The ratio is supposed to measure the efficiency with which fixed assets employed a high ratio
indicates a high degree of efficiency in asset utilization and a low ratio reflects inefficient use of assets.
However, in interpreting this ratio, one caution should be borne in mind, when the fixed assets of firm are
old and substantially depreciated, the fixed assets turnover ratio tends to be high because the denominator
of ratio is very low

Net sales

Fixed asset turnover

ratio = ------------------------Fixed assets

3.3.4Stockturnoverratio
Stock turnover ratio indicates the efficiency of firm in producing and selling its product. It is
calculated by dividing the cost of goods sold by the average stock. It measures how fast the inventory is
moving through the firm and generating sales.
The stock turnover ratio reflects the efficiency of inventory management. The higher the ratio,
the more efficient the management of inventories and vice versa .However, this may not always be true.
A high inventory turnover may be caused by a low level of inventory which may result if frequent stock
outs and loss of sales and customer goodwill.

Cost of goods sold

Stock turnover ratio = -----------------------------Average stock

Average stock

Opening stock + Closing stock

= -------------------------------------------2

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3.4PROFITABILITYRATIOS
A company should earn profits to survive and grow over a long period of time. Profits are
essential but it would be wrong to assume that every action initiated by management of a company should
be aimed at maximizing profits. Profit is the difference between revenues and expenses over a period of
time.
Profit is the ultimate 'output' of a company and it will have no future if it fails to make sufficient
profits. The financial manager should continuously evaluate the efficiency of company in terms of profits.
The profitability ratios are calculated to measure the operating efficiency of company. Creditors want to
get interest and repayment of principal regularly. Owners want to get a required rate of return on their
investment.
Generally, two major types of profitability ratios are calculated:

Profitability in relation to sales

Profitability in relation to investment

ProfitabilityRatioscanbedividedintosixtypes:
3.4.1 Gross profit ratio
3.4.2 Operating profit ratio
3.4.3 Net profit ratio
3.4.4 Return on investment
3.4.5 Earns per share
3.4.6 Operating expenses ratio

3.4.1Grossprofitratio

First profitability ratio in relation to sales is the gross profit margin the gross profit margin
reflects.
The efficiency with which management produces each unit of product. This ratio indicates the
average spread between the cost of goods sold and the sales revenue. A high gross profit margin is a sign
of good management. A gross margin ratio may increase due to any of following factors: higher sales
prices cost of goods sold remaining constant, lower cost of goods sold, sales prices remaining constant. A
low gross profit margin may reflect higher cost of goods sold due to firm's inability to purchase raw
materials at favorable terms, inefficient utilization of plant and machinery resulting in higher cost of
production or due to fall in prices in market.

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This ratio shows the margin left after meeting manufacturing costs. It measures the efficiency of
production as well as pricing. To analyze the factors underlying the variation in gross profit margin, the
proportion of various elements of cost (Labor, materials and manufacturing overheads) to sale may
studied in detail.

Gross profit
Gross profit ratio = ------------------------x 100
Net sales

3.4.2Operatingprofitratio
This ratio expresses the relationship between operating profit and sales. It is worked out by
dividing operating profit by net sales. With the help of this ratio, one can judge the managerial efficiency
which may not be reflected in the net profit ratio.

Operating profit
Operating profit ratio = ---------------------------x 100
Net sales

3.4.3Netprofitratio
Net profit is obtained when operating expenses, interest and taxes are subtracted from the gross
profit. Net profit margin ratio established a relationship between net profit and sales and indicates
management's efficiency in manufacturing, administering and selling products.
This ratio also indicates the firm's capacity to withstand adverse economic conditions. A firm with
a high net margin ratio would be in an advantageous position to survive in the face of falling selling
prices, rising costs of production or declining demand for product
This ratio shows the earning left for share holders as a percentage of net sales. It measures
overall efficiency of production, administration, selling, financing. Pricing and tax management. Jointly
considered, the gross and net profit margin ratios provide a valuable understanding of the cost and profit
structure of the firm and enable the analyst to identify the sources of business efficiency / inefficiency.

Net Profit
Net Profit Ratio = --------------------------- x 100
Net sales

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3.4.4Returnoninvestment: This is one of the most important profitability ratios. It indicates the
relation of net profit with capital employed in business. Net profit for calculating return of investment
will mean the net profit before interest, tax, and dividend. Capital employed means long term funds.

E.B.I.T
Return on investment = ---------------------------------------- x 100
Capital employed

3.4.5Earningspershare
This ratio is computed by earning available to equity share holders by the total amount of equity
share outstanding. It reveals the amount of period earnings after taxes which occur to each equity share.
This ratio is an important index because it indicates whether the wealth of each share holder on a per
share basis as changed over the period.

Net profit
Earnings per share = ------------------------------------ x 100
Number of equity shares

3.4.6Operatingexpensesratio
It explains the changes in the profit margin ratio. A higher operating expenses ratio is unfavorable
since it will leave a small amount of operating income to meet interest, dividends. Operating expenses
ratio is a yardstick of operating efficiency, but it should be used cautiously. It is affected by a number of
factors such as external uncontrollable factors, internal factors. This ratio is computed by dividing
operating expenses by sales. Operating expenses equal cost of goods sold plus selling expenses and
general administrative expenses by sales.

Operating
expenses
Operating expenses ratio = ----------------------------- x 100
Sales

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ResearchMethodology

ResearchDesign
In view of the objects of the study listed above an exploratory research design has been
adopted. Exploratory research is one which is largely interprets and already available information
and it lays particular emphasis on analysis and interpretation of the existing and available
information.

To know the financial status of the company.

To know the credit worthiness of the company.

To offer suggestions based on research finding.

DataCollectionMethods
PrimaryData
Information collected from internal guide and finance manager. Primary data is first hand
information.
SecondaryData
Company balance sheet and profit and loss account. secondary data is second hand
information.

DataCollectionTools
To analyze the data acquire from the secondary sources Ratio AnalysisThe scope of the
study is defined below in terms of concepts adopted and period under focus.
First the study of Ratio Analysis is confined only to the Amarraja Batteries Limited.
Secondly the study is based on the annual reports of the company for a period of 4 years
from 2006-07 to 2009-10 the reason for restricting the study to this period is due time constraint.

LIMITATIONS

Page26

The study was limited to only four years Financial Data.

The study is purely based on secondary data which were taken primarily from
Published annual reports of Amararaja batteries Ltd.,

There is no set industry standard for comparison and hence the inference is made
on general standards.

The ratio is calculated from past financial statements and these are not indicators of
future.

The study is based on only on the past records.

Non availability of required data to analysis the performance.

The short span of the time provided also one of limitations.

Page27

Company profile

Page28

COMPANYPROFILE
Amara Raja Batteries (ARBL) incorporated under the companies Act, 1956 in 13th
February 1985, and converted into public Limited Company on 6th September 1990.
The chairman and Managing Director of the company is Sri Gala Ramachandra Naidu,
ARBL is a first company in India, which manufactures Values regulated Lead Acid (VRLA)
Batteries. The main objectives of the company are a manufacturing of good quality of Sealed
Maintenance Free (SMF) acid batteries. The company is setting up to Rs.1, 920 lakhs plant is in
185 acres in Karakambadi village, Renigunta Mandal. The project site is notified under B
category.
The company has the clear-cut policy of direct selling without any intermediate. So they
have set up six branches and are operated by corporate operations office located in Chennai. The
company has virtual monopoly in higher A.H.(Amp Hour) rating Market its product VRLA . It is
also having the facility for industrial and automotive batteries.
Amara Raja is 5 S Company and its aim are to improve the work place environment by
using 5S techniques which is A systematic and rational approach to workplace organization and
methodical house keeping with a sense of purpose, consisting of the following five elements
CULTURE AND ENVIRONMENT
Amara Raja is putting a number of HRD initiatives to foster a spirit of togetherness and a
culture of meritocracy. Involving employees at all levels in building organizational
support plans and in evolving our vision for the organization.
ARBL encourages initiative and growth of young talent allows the organization to develop
innovation solution and ideas.
Benchmark pollution control measures, energy conversation measures, waste reduction
schemes, massive green belt development programs, employee health monitoring and
industrial safety programs have helped ARBL to take further environment management
program.
Amara Raja has now targeted to secure the ISO 14001 certification.

Page29

QUALITY POLICY
ARBLs main aim is to achieve customer satisfaction through the collective
commitment of employees in design; manufacture and marketing of reliable power systems,
batteries, allied products and services.

To accomplish above, ARBL focus on

Establishing superior specifications for our products and processes.
Employing state-of-the-art technologies and robust design principles.
Striving for continuous improvements in process and product quality.
Implementing methods and techniques to monitor quality levels.
Providing prompt after sales service.

RESEARCH & DEVELOPMENT

Specific areas in which the company carries out R&D are;
New product development.
Process technology up gradation.
Application engineering for new market place.
Quality improvement.
Benefits derived as a result of above R&D,
Developed 4v/200 AH batteries.
Design optimization of higher AH batteries for DOT application.
Design optimization of batteries 92v/1285 AH for TL/AC-Railway application.
Formation cycle optimization results in reduced duration and rejection.
Chemist curing cycle optimization.
Manufacture of automobile battery for four-wheeler vehicles.

Page30

FUTURE PLAN OF ACTION

Commercialization of motorcycle batteries.
Development of new range high integrity VRLA cell design.
Establishment of product for new application segment.
Studies on paste additives to enhance the battery performance.
In-depth evaluation of metal surface treatment chemical to reduce the process cycle time.
Validating alternative grades of propylene to conserve energy and to improve productivity.
MILE STONES
YEAR

Mile stone

1997

100 crores turnover

1997

ISO-9001 Accreditation

1999

S-9000 Accreditation

2002

SO-14001 Certification

AWARDS
The spirit of Excellence- Awarded by academy of fine arts, Tirupati.
Best Entrepreneur of the year 1998-awarded by Hyderabad Management
Association.
Industrial Economist Business Excellence Award 1991- Awarded by the industrial
Economist, Chennai.
Excellence Award-by institution of economic studies (ES), New Delhi.
Udyog Rattan Award- by institution of economic studies, New Delhi.
QI CERTIFICATE 2002 - By FORD Company

Page31

AMARA RAJA GROUP OF COMPANIES

AMARA RAJA POWER SYSTEMS PRIVATE Ltd. (ARPSL), Karakambadi,
Tirupati.
MANGAL PRECISION PRODUCTS PRIVATE Ltd1. (MPPL1), Karakambadi,
Tirupati.
MANGAL PRECISION PRODUCTS PRIVATE Ltd2. (MPPL2), Petamitta, Chittoor.
AMARA RAJA ELECTRONICS PRIVATE LIMITED (AREPL), Dighavamgham,
Chittoor.
GALLA FOODS PRIVATE LIMITED (GFPL), Puthalapattu Mandal, Chittoor.
This ratio is calculated by dividing sales in to current assets. This ratio expressed the
number of times current assets are being turn over in stated period. This ratio shows how well
the current assets are being used in business. The higher ratio is showing that better utilization
of the current assets another a low ratio indicated that current assets are not being efficiently
utilized.
INDUSTRIAL BATTERY DIVISION (IBD)
Amara Raja has become the benchmark in the manufacturer of industrial batteries. India is
one of the largest and fastest growth markets for industrial batteries in the world. Amara Raja is
leading in the front, with an 80% market share is stand by VRAL batteries point of view. It is also
having the facility for production plastic components.
ARBL id the first company in India to manufacture VRLA (SMF) Batteries. The initial
investment of the company has Rs.1920 lakhs; the total land is around 18 acres in Karambadi
village, Renigunta Mandal. The project site is notified under B category.
Capacity
The capacity per the year 2005-2006 of IBD is 3, 70,000 cells per annum.
Products
Amara Raja being the first entrant in this industry and has the privilege of pioneering VRLA
technology in India.
Amara Raja has established itself as a reliable supplier of high quality products to major
segments like Telecom, Railways and power.

2. PLATE PREPARATION
Using lead oxide production in earlier stage positive and negative paste is prepared with
addition of sulphuric acid and water. These pastes are applied to respective grids using industrial
fasting machines.

Page32

3. CALL ASSEMBLY
Here positive and negative grids are separated by a sheet of fibreglass mat bush bars are
welded and as assembled into a jar or container to form battery cells. Then these cells are
assembled according to the customers specification into battery sets or systems.
4. FORMATION
In this process cells are filled with the electrolyte (surphuric acid) and then the set is
charged and discharged repeatedly, after final charging the battery comes out ready to be used.
Competitors
The Major competitors for Amara Raja Batteries are Exude industries Ltd, and GNB.
AUTOMOTIVE BATTERY DIVISION (ABD)
ARBL has inaugurated its new automotive plant at Karakambadi in Tirupati on September
24th, 2001. This plan is a part of the most completely integrated battery manufacturing facility in
India with all critical components, including plastics sourced in-house from existing facilities on
site. In this project, Amara Rajas strategic alliance partners Johnson Control Inc., of USA have
closely worked technology and plant engineering. It is also having the facility for producing
plastic components required for automotive batteries.
Capacity
With an existing production capacity of 5 lakhs units of automotive batteries, the new
Greenfield plant will now be able to produce 1 million batteries per annum. This is the first phase
in the enhancement of Amara Rajas production capacity, for this the company has invested Rs.45
crores and the next phase, at an additional cost of Rs.25 crores, for this the production capacity
will be increase to 2 million units and the company has estimated to complete around 3 years,
after that ARBL will become the single largest battery of manufacturer in Asia. The fiscal year
2005-2006s capacity Of ABD is 2.2 million numbers of batteries per year.

Products
The products of ABD are
Amaron Hi-way
Amaron Harvest
Amaron shield
Amaron Highlife
The plastic products of ABD arejars and jar covers.

Page33

Customers
ARBL has prestigious OEM (Original Equipment Manufacture) clients like FORD,
GENERAL MOTORS, DAEWOO MOTORS, MERCEDES BENZ, DAIMLER CHRYSLER,
MARUTI UDYOG LTD., premier Auto Ltd., and recent acquired a preference supplier alliance
with ASHOK LEYLAND, HINDUSTAN MOTORS, TELCO, MAHINDRA & MAHINDRA and
SWARAJ MAZDA.
COMPETITORS
EXIDE
PRESTOLITE
AMCO.
MAJOR USERS
1. RAILWAYS
Train lighting air conditioning, diesel engine starting, signaling systems, control
systems, emergency breaking systems, and telecommunications.
2. TELECOMMUNICATION
Central office power plants, microwave repeaters station, RAX in public building,
emergency lighting system at airports, fire alarm system etc.,
3. POWER SYSTEMS
Switch gear control systems, powerhouse control systems, rural street lighting etc.
4. UPS SYSTEM
Back up power to computers in progress control systems in industry etc.
5. TRACTION
Forklift trucks, earth moving machinery, mining locomotives and road vehicles etc.
6. PETROCHEMICALS
Offshare and noshore oil exploration lighting systems, security systems etc.
7. DEFENCE
Defence communication, aircraft and helicopter ground starting, stationary and mobile
diesel engine starting etc.

Page34

PRODUCTION PROCESS
The process for the production of lead acid batteries consists essentially of five operations
described below
1. GRID CASTING
In the process grids to hold the active materials are made. Battery grids are produced using
microprocessor-casting machines with patented alloys. Different sizes of moulds are used to get
the required size of grids.
2. PLATE PREPARATION
Using lead oxide production in earlier stage positive and negative paste is prepared with
addition of sulphuric acid and water. These pastes are applied to respective grids using industrial
fasting machines.
3. CALL ASSEMBLY
Here positive and negative grids are separated by a sheet of fibreglass mat bush bars are
welded and as assembled into a jar or container to form battery cells. Then these cells are
assembled according to the customers specification into battery sets or systems.
4. FORMATION
In this process cells are filled with the electrolyte (surphuric acid) and then the set is
charged and discharged repeatedly, after final charging the battery comes out ready to be used.
5. TESTING & INSPECTION
Testing the battery is discharged to the customer it is tested for quality specifications.

Page35

Data analysis &

Interpretation

Page36

DATAANALYSISANDINTERPRETATIONS

4.1LIQUIDITYRATIOS

4.1.1 CURRENT RATIO

The ratio between all current assets and all current liabilities; another way of expressing

liquidity. It is a 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 of greater than one means that the
firm has more current assets than current claims against them.

Current Assets
Current ratio = ----------------------------------------
Current Liabilities

Table4.1.1Currentratio

S.No

Year

1.

2.

3.

4.

200607

200708

CURRENT
LIABILITIES

CURRENTRATIO

1,612,642,497

638,958,266

2.52

2,280,704,176

1,181,003,846 1.93

3,500,193,294

1,312,272,610

2.67

5,975,961,025

2,020,744,952

2.96

CURRENTASSETS

200809

200910

Page37

Graph4.1.1C
Currentratio
o

2.96

3
2
2.67
2.5
52
2.5
5
1.93

1.5
5

0.5
5

0
2006
607

200708

200
0809

200910

Interpre
etation:
The standarrd norm forr current rattio is 2:1. During the yeear 2006 the ratio is 2.52 and it haas
decreassed to 1.93 during
d
the year
y 2007 annd increased to 2.67 inn 2008 and iit is increassed to 2.67 in
i
the yearr 2009 and it has increeased to 2.96 in the yeaar 2010. Thhe ratio aboove was stan
ndard exceppt
in the year
y 2008. So
S the ratio was satisfaactory.

Pagee38

4.1.2.Quickratio

Quick ratio establishes a relationship between quick, or liquid, assets and current liabilities. An
asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value.

Current Assets Inventories

Quick Ratio =

_______________
Current liabilities

Table4.1.2QuickRatio

S.NO

Year

200607

1,171,683,584

638,958,266

200708

200809

1,708,741,955

1,181,003,846

2,578,479,879

1,312,272,610

1.96

4,032,625,321

2,020,744,952

1.99

3.

4.

200910

QUICKASSETS

CURRENTLIABILITIES

QUICKRATIO
1.83
1.45

Page39

Graaph4.1.2Qu
uickRatio

2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
200607

20070
08

200
0809

200910

Interpre
etation:

The
T standardd norm for the quick ratio
r
is 1:1. Quick ratiio is decreaased in the year
y
2007 to
t
1.83 froom 2.45. Then,
T
it decrreased to 1..45 in the year
y
2008. And
A it has increased to
o 1.96 in thhe
year 20009 and theen it increaased to 1.999 in the yeaar 2010.

However tthe ratio waas above thhe

standardd norm so thhe ratio wass satisfactorry.

Pagee40


4.1.3.C
Cashratio
o: The ratio between caash plus maarketable seccurities andd current liabbilities.

Cassh & Bank balances

b
Cash Ratio
R
= _____ ________
_____
Cuurrent liabilitiies

Table4.1.3Cash
hRatio

S.N
NO
Year
CASH
H&BANK
CU
URRENT

BAL
LANCES
LIA
ABILITIES
S

169,121,,827
638,958,266
1
1
200607

2
2

200708

200809

3.
3

4
4.

CAS
SH RATIO
0.26

205,212,,363

1,181,0033,846

0.17

256,000,,280

1,312,2722,610

0.20

511,453,,739

2,020,7444,952

0.25
0

200910

Graaph4.1.3CashRatio
0.3
0.25
0.2
0.15
0.1
0.05
0
200607

200708

200809

200910

Interpre
etation:
Inn all the above years thhe absolutee quick ratioo is very low
w. The stanndard norm for absolutte
quick ratio
r
is 1:22 the comppany is failled in keep
ping sufficiient Cash & Bank Balances
B
annd
Marketaable Securitties.

Pagee41

4.1.4 NET WOR

RKING CA
APITAL RA
ATIO: The difference between
b
cuurrent assetss and currennt
liabilitiees excluding short-term
m bank borrrowing is caalled net woorking capitaal or net currrent assets..

Net workin
ng capital

Net woorking capittal ratio =

_____
_____________

Neet assets

Table4.1.4Neetworkingcaapitalratio
S.NO Year
NETWOR
RKING

CAPITTAL
1
200607 973,68
84,231 1,935,207,7
1
14
2

200708

200809

200910

NETTWORKING
G
CAPITALRATIO
O
0.50

1,099,70
00,330

2,191,397,0
2
06

0.50

2,187,92
20,684

3,817,892,8
3
62

0.57

3,955,216
6,073

6,501,134,460
0

0.61

Graph4.1.4
4Networkin
ngcapitalrattio

0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
200607

200708

200809

200910

Interpre
etation:
C
ratioo is 0.45 in 2006
2
but inccreased to 00.50 in the next
n year i.ee.,
Nett Working Capital
2007. From
F
that year
y the ratioo increasedd to 0.50 in 2008 and foollowed in 22009 also and
a increaseed
to 0.61iin 2010 but condition of
o business working
w
cap
pital is not shortage.
s

Pagee42

4.2LEVERAGERATIOS
4.2.1DebtRatio
If the firm may be Interested in knowing the proportion of the interest bearing debt
in the capital structure.

Total Debt
Debt ratio = ----------------------------------------
Total Debt + Net Worth

Table4.2.1Debtratio

S.No

Year

1.

2.

3.

4.

200607

233,058,880

TOTAL
DEBT + NET
WORTH
2,039,907,551

378,672,427

2,391,525,347

0.16

1,407,083,880

3,843,741,557

0.37

3,162,620,560

3,493,635,030

1.10

TOTAL DEBT

DEBT RATIO
0.11

200708

200809

200910

Page43

Graaph4.2.1De
ebtratio

1.2

1.1
1

1
0.8
0.6
0.37
7

4
0.4
0.2

0.11

0.16

0
200607

20070
08

200809

2009
910

Interpre
etation:
Thhis ratio givves results relating to the capital structure of a firm. D
Debt ratio is 0.08 in thhe
year 20006 it increeased to 0.11 & 0.16 in the corrrespondingg years 20007 & 2008. Again it is
i
increaseed to 0.37 & 1.10 in the
t year 20009& 2010. From the above in flluctuating trend
t
we caan
concludde that the companys dependennce on deb
bt is increaasing. It is not betterr position in
i
collection of debt.

Pagee44

4.2.2Debtequityratio

Debt equity ratio indicates the relationship describing the lenders contribution for each
rupee of the owners contribution is called debt- equity ratio. Debt equity ratio is computed by
dividing Long term Liabilities divided by Equity. Lower debt equity ratio higher the degree of
protection. A debt-equity ratio of 2:1 is considered ideal.

LONG TERM
LIABILITIES
Debt equity ratio = ----------------------------------------
EQUITY

Table4.2.2Debtequityratio

S.No

Year

1.

2.

3.

4.

200607

TOTALDEBT
233,058,880

NETWORTH
D.E.RATIO
1,806,848,671
0.13

378,672,427

2,012,852,920

0.19

1,407,083,880

2,436,657,677

0.58

3,162,620,560

3,331,014,470

0.95

200708

200809

200910

Page45

Graph4.2.2Debtequityratio
o

0.95

0.9

0.8

0.7
0.58

0.6

0.5

0.4

0.3
0.2

0.19
0.13

0.1

0
200607

200708

2
200809

200910

etation:
Interpre
Th
heratiogiveesresultsreelatingtoth
hecapitalsttructureof afirm.Deb
btequityratiois0.09iin
theyear2006anditincreased
dto0.13&0.19intheyear2007and2008.Intheyear2
2009&201
10
theratiohasincreasedto0.5
58&0.95.W
Wecanconcludethattthecompan
nydependsonthedeb
bt
fundisincreasing.

Pagee46

4.2.3IN
NTERESTCO
OVERAGER
RATIO: The ratio showss the numbeer of times the interestt charges arre
coveredd by funds thhat are ordiinarily availlable for theeir payment.

E
EBIT

Interest coverage ratio =

_______________________
Intterest

Table4.2.3Interest coverageraatio
S.NO
O
Ye
ear

EB
BIT
INTEREEST
I.C.RATIO
1

200
0607

200
0708

200
0809

137,259,58
83

1
1,448,427

94.76

386,899,738

13
3,435,515

28.80

742,908,74
41

30
0,924,293

24.02

1
1,588,690,29
99

129,308,874

12.29

200
0910

Graph
h4.2.3Intere
estCoverageeratio
100
80
60
40
20
0
20060
07 200708 200809 200910
2

Interpre
etation: Intterest coverrage ratio iss 07.56 in th
he year 20006. It is inccreased auto
omatically to
t

94.76 inn the year 2007.

2
But, itt is decreaseed to 28.80 in the year 2008 and ddecreased to
o 24.02 in thhe
year 20009 and it again
a
decreased to 12.229 in the year
y
2010. In
I this posittion outsidee investors is
i
interested to investt the moneyy in this com
mpany.
4.2.4TO
OTALLIABILLITIESRATIO

Pagee47

Formuula: Total Liabilities

Total Assets
T
Total
liabilitties: Currennt liabilities + Secured & Unsecureed
Loans.
To
otalAssetss:Fixedassets+In
nvestmentss+Curren
ntassets
Table4.2.4:TotalLiabilitiesraatio

S.NO
O

Year

TOTALL
LIABILITTIES

OTALASSETS
TO

20
00607

872,017
7,146

2,8
809,793,132
2

0.3

1,559,676
6,273

3,6
692,541,508
8

0.4

20
00809

2,719,356
6,490

5,2
292,107,128
8

0.5

20
00910

5,183,,365
5,512

8,6
683,886,037
7

0.6

20
00708

T.L.RATTIO

Graph4.2
2.4:TotalLiaabilitiesratio
o

0.6
0.5
0.4
0.3
0.2
0.1
0
2006072007
708200809 200910

Interpre
etation:In the
t years, 2006 & 20077 the total liiabilities is 0.2&0.3
0
butt in the yearr 2008 the
total liaabilities incrreased to 0.44 and the raatio increaseed to 0.5 & 0.6 in the correspondin
ng years of
2009 &2010.
&

4.3 ACT
TIVITY RATIOS
R

Pagee48


4.3.1Inventoryturnoverratio
It indicates the firm efficiency of the firm in producing and selling its product. It is calculated
by dividing the cost of goods sold by the average inventory.

Cost of goods sold

Inventory turnover ratio =_____________________

Average inventory

Cost of goods sold = Raw materials consumed +payments &benefits to employees +mfr, selling
&admin expenses +duties & taxes

Table4.3.1:Inventoryturnoverratio

S.NO
Year
COSTOFGOODS

AVGINVENTORY
I.T.RATIO
SOLD

200607

2,228,549,828

374,102,223

5.96

O
3

200708

3,499,805,230

506,460,567

6.91

200809

5,324,665,192

746,837,818

7.13

200910

9,782,463,974

1,432,524,559

6.83

Page49

Graph4.3.1:Inventorryturnoverrratio

8
7
6
5
4
3
2
1
0
200
0607

200708

200809

20
00910

Interpre
etation:
I
Inventory
tuurnover ratiio is 5.57 tiimes in the year 2006. But, it is iincreased to 5.96 in thhe
year 20007. Then, it
i is increased to 6.91 in the yearr 2008 and again increased to 7.13
3 in the yeaar
2009. But,
B it is deccreased to 6.83
6
in the year
y 2010. Inventory tuurn over rattio increased
d for year by
b
year thaat is companny production is also inncreased. Su
ubsequentlyy sales are aalso increaseed.

Pagee50

4.3.2D
Debtorstu
urnoverraatio: It is found
fo
out by
y dividing thhe credit salles by averaage debtors..
Debtors turnover indicates
i
thhe number of
o times debtors turnovver each yeaar.

Debtorss turnover ratio

r
=

Sales
S
________
_________

Average Debtoors

Sales = Gross Salees

Table4.3.2
2:Debtorstu
urnoverratio
o
S.NO Year
AVERAGEE
SALEES

DEBTORS

D.T.RATIO

200607

2,685,43
36,096

560,689,88
81

4.79

200708

4,458,29
95,779

753,113,33
38

5.92

200809

7,451,03
32,998

1,158,032,7
1
67

6.43

13,499,86
67,499

1,862,113,4
1
98

7.25

200910

Graph4.3.2:Debtorstturnoverratio

8
7
6
5
4
3
2
1
0
200607

200708

200809

200910

Interpre
etation:Deebtors turnnover ratio is
i 4.31 timees in the yeaar 2006 andd it is increaased to 4.779
times inn the year 2007 and inccreased to 5.92
5
times in
n the year 2008
2
and it increased to
o 6.43 timees
&7.25 times
t
in the years 20099 &2010.

Pagee51

4.3.3Fixedassetturnoverratio

The ratio is supposed to measure the efficiency with which fixed assets are employed a high ratio
indicates a high degree of efficiency in asset utilization and a low ratio reflects inefficient use of assets.
However, in interpreting this ratio, one caution should be borne in mind. When the fixed assets of the
firm are old and substantially depreciated, the fixed assets turnover ratio tends to be high because the
denominator of the ratio is very low.

Net Sales

Fixed Asset Turnover Ratio =

__________

Net Fixed Asset

Sales = Gross Sales

Netfixedassets:Netblock

Table4.3.3:Fixedassetturnoverratio

S.NO

Year

200607

200708

200809

200910

SALES

NETFIXED
ASSETS

F.A.T.RATIO

2,685,436,096

948,631,374

2.83

4,458,295,779

1,043,547,559

4.27

7,451,032,998

1,568,304,581

4.75

13,499,867,499

1,888,508,475

7.15

Page52

Graph4.3.3
3:Fixedasse
etturnoverratio

8
7
6
5
4
3
2
1
0

20062007200708 200809 200910

0

Interpre
etation:
Fixed assets
a
turn over
o
ratio is 2.01 in the year 2006 and
a it is inccreased to 2.83 in the year
y 2007. In
I
the yearr 2008 the ratio
r
is 4.27 and it continued up to 4.75 and too 7.15 in thhe years 200
09&2010.

Pagee53

4.3.4C
Currentasssetturnovverratio

Sales

Curren
nt asset turnover ratioo =

__
________________

Cu
urrent assetss

Table4.3.4
4:Currentasssetturnoveerratio
S.NO Year
CURRENT
SALE
ES
C.A.T
T. RATIO

AS
SSETS
1

200607 2,685,4366,096

1,612,642,4977

1.67

200708

4,458,2995,779 2,280,704,1766

1.95

200809

7,451,0332,998 3,500,193,2944

2.12

13,499,8667,499 5,975,961,025

2.26

200910

Graaph4.3.4Cu
urrentassets turnoverratio

2..5
2
1..5
1
0..5
0
20060
07

200708

2008
809

200
0910

Interpre
etation:
Current assets
a
turnovver ratio is 1.68 in th
he year 20066 and it is ddecreased to
o 1.67 in thhe
year 20007. But, in the year 20008 the ratioo is increased to 1.95 and
a it continnuously inccreased up to
t
2.26 inn the year 2010.

Froom above we can co

onclude thaat current aassets turno
over ratio is
i

increasiing.

Pagee54

4.3.5TTotalassettsturnove
erratio
This ratiio ensures whether
w
the capital
c
emplo
oyed has beeen effectivelyy used or no
ot. This is alsso
test of managerial
m
efficiency and
a businesss performancce. Higher total
t
capital turnover raatio is alwayys
requiredd in the intereest of the com
mpany.

Sales

=
Total asset turnoover ratio

____
______________

Ca
apital emplooyed
Total asssets: Fixedd assets + Current
C
assetts + Investm
ments

Table4.3
3.5:Totalassetturnoverratio
S.NO Year
SALEES
TOTALASSE
T
ETS

T.A
A.T.RATIO

200607

2,685,43
36,096

2,809,793,1
2
32

0.96

200708

4,458,29
95,779

3,692,541,5
3
08

1.21

200809

7,451,03
32,998

5,292,107,1
5
28

1.41

200910

13,499,86
67,499

8,683,886,0
8
37

1.55

Graph4.3.5:Totalassetsturno
overratio

1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
200
0607

20
00708

2
200809

200910

Interpre
etation:
Totaal assets rattio is 0.83 in the year 2006
2
and it gradually increased
i
yeear by year and reacheed
to 1.55 in the year 2010.It meaans Total Assets
A
is incrreased in evvery year.

Pagee55

4.3.6Workingca
W
apitalturnoverratio
o

A firm maay also like to relate neet current assets or net working
w
cappital to saless. Working
capital turnover
t
inddicates for one
o rupee of
o sales the company
c
neeeds how m
many net currrent assets.
This rattio indicatess whether orr not workinng capital has
h been effe
fectively utillized markeet sales.

S
Sales

W
Working
cap
pital turnovver ratio = _______________________

Workin
ng capital

Taable4.3.6:W
Workingcapiitalturnoverrratio
S.NO
O
Ye
ear
NET CURRENT
SALES

ASSETS
A
2
2,685,436,09
96
97
73,684,231
1
200
0607

4
4,458,295,77
79
1,09
99,700,330
2
200
0708

7
7,451,032,99
98
2,18
87,920,684
3
200
0809

133,499,867,4499
3,95
55,216,073
4
200
0910

W
W.C.T. RATIO
2.76
4.05
3.41
3.41

G
Graph4.3.6::Workingcaapitalturnovverratio
5
4
3
2
1
0

Interpre
etation:

20060
07 200708 200809 200910
2

Worrking capitaal turnover ratio is 2.441 in the yeaar 2006 andd it is increased to 2.76
6 in the yeaar
2007. Inn the year 2008
2
increassed to 4.05 . Again it decreased
d
too 3.41 in thee year 2009&2010. Thhe
higher the
t workingg capital turnnover the more
m
favorab
ble for the company.
c

4.3.7N
Netassettturnoverrratio

Pagee56

Net Asset Turnoverr Ratio =

Saless
___________

Neet Asset

Net Asssets: Net Fiixed Assets + Net Currrent Assets

Table4.3..7:Netassettturnoverraatio
S.NO
O

Year

20
00607

20
00708

SALESS

20
00809

20
00910

NETTASSETS

N.A.T.RATTIO

2,685,436
6,096

1,9
935,207,714
4 1.39

4,458,295
5,779

2,1
191,397,006
6 2.03

7,451,032
2,998

3,8
817,892,862
2 1.95

13,499,867
7,499

6,5
501,134,460
0 2.08

Graph4.3
3.7:Netasssetturnoverrratio

2.5

1.5

0.5

0
20062007200708200809200910

Interpre
etation:
Net Asseets turnoverr ratio is 1.111 in the yeear 2006 andd it is increeased to 1.39 in the yeaar
2007 annd it is increeased to 2.003 in the yeaar 2008. An
nd, it decreaased to 1.955 in the yearr 2009 and it
slightlyy

inccreased

to

2.08

in

the

year

4.3.8C
Capitalturrnoverratiio

Pagee57

20100.

The rattio obtains by

b dividing sales with the
t capital employed.
e

S
Sales

C
Capital
turn
nover ratio =

________________________
Capitall Employed

Table4.3.8:capitalturnoverrattio

S.NO
O

Year
Y

200
0607

200
0708

200
0809

200
0910

SALES

CAPITTALEMPLOY
YED

C.T.RATTIO

2
2,685,436,0
096

2,1
170,834,866
6

1.24

4
4,458,295,7
779

2,5
511,537,662
2

1.78

7
7,451,032,9
998

3,9
979,834,518
8

1.87

13,499,867,4
499

6,6
663,141,085
5

2.03

Graph4.3.8
8:capitalturrnoverratio

2.5
2
1.5
1
0.5
0
200607

200708

200809

200910

Interpre
etation:
Capiital turnoveer ratio is 0.98 in the year
y
2006 and it is incrreased 1.24
4 in the yeaar

2007 annd it is increeased to 1.778 in the yeaar 2008 and

d again it is increased tto 1.87 in th
he year 20009
. Then, it increasedd to 2.03 in the year 2010.

Creditorstturnoverrratio
4.3.9C

Pagee58

The raatio obtaineed by dividing the annuual credit pu

urchases witth average aaccounts paayable.

P
Purchases

C
Creditors
tu
urnover rattio = _____
__________________

Avge.C
Creditors

TTable4.3.9:C
Creditorsturrnoverratio
S.NO
O
Ye
ear
AVERAGE
A
PURCHASEES

CR
REDITORS

C.T.RATIO

200
0607

422,358,585
5
1,4

192,242,196

7.4

200
0708

2
2,244,170,1
72

44
41,904,975

5.1

200
0809

4,0
086,818,721

591,059,052

6.9

200
0910

8,1
125,662,265
5

7,0
081,427,12

11.47

Graph4.3.9
9:Creditorsturnoverratio

12
10
8
6
4
2
0
200607

200708

200809

200910

Interpre
etation:
Creditoors turnoverr ratio is 6.1 in the yeaar 2006. It is increased to 7.4 in th
he year 20007

and it is
i suddenly decreased to 5.1 in thhe year 2008
8 and it sudddenly increeased to 6.9
9 in the yeaar
2009 buut increasedd in the nextt year 2010 to 11.47.

4.4P
PROFITABILITYRATIIOS

Pagee59


4.4.1Grossprofitratio
This ratio shows that the margin left after meeting manufacturing costs. It measures the
efficiency of production as well as pricing.

Gross profit

Gross profit margin Ratio = ____________ X100

Net sales

Gross profit= Net sales-Cost of goods sold

Cost of goods sold= Opening stock+ material consumed+ mfg .exp- closing stock

Table4.4.1:Grossprofitratio

S.NO

Year

GROSSPROFIT

SALES

G.P.RATIO(%)

200607

456,886,268

2,685,436,096

17

200708

958,490,549

4,458,295,779

21.5

200809

2,126,367,806

7,451,032,998

28.5

3,717,403,516

13,499,867,499

27.5

200910

Page60


Graph4.4.1:Grosssprofitratio

30
0

25
5

R
Ratio

20
0

15
5

10
0

200607

2
200708

200809

2009
910

Interpre
etation:
F
From
the aboove we cann say that grross profit ratio is 16.2%
% in the yeear 2006 butt it increaseed
to 17 % &21.5% in 2007& 2008
2
and again
a
it incrreased to 28.5%
2
in thhe year 200
09 and it is
i
decreassed to 27.5% in the year
y
2010. The comp
pany is maaintaining pproper contrrol on tradde
activitiees.

Pagee61

4.4.2N
Netprofiitratio:Thhis ratio alsoo indicates thhe firm's cappacity to withh stand adveerse economiic
conditioons. A firm with
w a high net margin ratio would be in an addvantageous position to survive
s
in thhe
face fallling selling prices,
p
rising costs of production or declining
d
dem
mand for the product.

Net proofit ratio=

Net pro
ofit

______
___ X I00

Net salles

Taable4.4.2:Ne
etprofitratio
o
S.NO
Yeaar
PROFITAFTTER
SALES

TAX
1

2006
607

2007
708

2008
809

2009
910

NETPROFIT
MARGIN(%)

86,900,56
63

2,6
685,436,096
6

3.2
3

238,465,730

4,4
458,295,779
9

5.3
5

470,434,575

7,4
451,032,998
8

6.3
6

9,436,315,,11

13,4
499,867,499
9

6.99
6

Graph4.4
4.2:Netproffitratio
8
6
4
2
0
2
4
6
8

200
0607 200708 200809 200910

Interpre
etation:

i
too 3.2% in th
he year 20007
During the year 20006 the net profit marggin is 0.7 itt suddenly increased
becausee of decreassed in adminnistration annd selling expenses. Inn the next yeear, it again
n increased to
t
5.3 in thhe year 20008 and it agaain increased to 6.3 in 2009
2
and too 6.99 in thee year 2010..

4.4.3O
Operatingexpensesratio

Pagee62


The Operating expenses ratio explains the changes in the profit margin ratio. A higher operating
expense is unfavorable since it will leave a small amount of operating income to meet interest, dividends.

Operating expenses X 100

Operating expenses ratio= __________________

Sales

Operating expenses =Admin expenses+ Selling expenses

Table4.4.3:Operatingexpensesratio

S.NO

Year

I
1

OPERATING
EXPENSES

SALES

O.E.RATIO

200607

376,620,609

2,685,436,096 14.02

200708

550,626,756

4,458,295,779 12.35

200809

767,790,197

7,451,032,998 10.30

1,388,735,777

13,499,867,499 10.30

4
200910

Graph4.4.3:Operatingexpensesratio

Page63

16

Interpretation:
Operating expenses ratio is 17.86%of sales in the year 2006 it decreased to 14.02% in
the year 2007 and decreased in 2008 to12.35% and again it decreased in the next year 2009 to
10.30% and continued the same way. Then, it reached 10.30% in the year 2010.

4.4.4ReturnonInvestment
The conventional approach of calculated ROI is to divide PAT by investment.

EBIT
Return on investment(ROI)=

_________________
Capital Employed

Page64

Table4.4.4:Returnoninvestment
CAPITAL
S.NO
Year
EBIT

EMPLOYED
1
200607
137,259,583
2,170,834,866

R.O.I.RATIO
0.06

200708

386,899,738

2,511,537,662

0.15

200809

742,908,741

3,979,834,518

0.19

200910

1,588,690,299

6,663,141,085

0.24

Graph4.4.4:ReturnonInvestment

0.25

0.2

0.15

0.1

0.05

200607
200708
200809
200910

Interpretation:
Return on Investment is very low in all years. But, in the year 2006, it reached to
6.51 due to less earnings.

4.4.6Returnonequityshareholdersfund
The return on equity share holders fund explains about the return of share holders with they
get on their investment.

Page65

Net profit
Return on equity share holders fund=

_________________
Equity share holders fund

Table4.4.6:Returnonequityshareholder'sfund
S.NO
Year
PROFITAFTER
NETWORTH
R.O.E.RATIO(%)

TAX
1

200607

86,900,563

1,806,848,671

4.8

200708

238,465,730

2,012,852,920

11.8

200809

200910

470,434,575

2,436,657,677

19.3

943,631,511

3,331,014,470

28.33

Graph4.4.7:Returnonequityshareholder'sfund

30

25

20

15

10

0
200607

200708

200809

200910

Interpretation:
Return on equity in the year 2006 is 0.8 and it increased suddenly to 4.8 in the year 2007
and again it increased to 11.8 in the year 2008. Return on Equity of the company is at
satisfactory level and then it increased to 19.3 in 2009 and again increased to 28.33 in 2010 .

Page66

CHAPTER-5
Findings
Suggestions
Conclusion

Page67

FINDINGS
Except in the year 2008, the company is maintaining current ratio as 2 and more, standard
which indicates the ability of the firm to meet its current obligations is more. It shows
that the company is strong in working funds management.
The company is maintaining of quick assets more than quick ratio. As the company
having high value of quick ratio. Quick assets would meet all its quick liabilities with out
any difficulty.
The company is failed in keeping sufficient cash & bank balances and marketable
securities.
In above all current assets and liabilities ratios are better that also it is double the
normal position. Observe the absolute & super quick ratio the company cash
performance is down position.
In the year 2006 debt equity ratio is 0.08 (8%) but it is increased to 0.11 (11%) &
0.16(16%) in 2007 and 2008 increased every year. It shows that the company is losing
its condition.
Net working capital ratio is 0.45 in 2006 but also 0.50 in 2007. It is increased very high
but condition of business working capital is not shortage .
Debt Equity ratio is increasing every year. It indicates the company depends on the debt
fund increasing.
Total liabilities ratio is also increasing year by year.
In the year 2006, the interest coverage ratio 7.56 which increased to 94.76 in the year
2007 and high fluctuations in the followed years. In this position, outside investors are
interested to invest their money in this company.
The company is declining of its coverage ratio to serve long term debts.
Inventory turnover also increased for year by year that is company production is also
increased. Subsequently sales are also increased.
The net profit ratio of the company increasing over the study period. Hence the
organization having the good control over the operating expenses.

Page68

SUGGESTIONS
The company has to increase the profit maximization and has to decrease the operating
expenses.
By considering the profit maximization in the company the earning per share, investment
and working capital also increases. Hence, the outsiders are also interested to invest.
The company should maintain sufficient cash and bank balances; they should invest the
idle cash in marketable securities or short term investments in shares, debentures, bonds
and other securities.
The company must reduce its debtors collection period from 83 & 84 days to 40 days be
adopting credit policy by providing discounts to the debtors.
Return on investment is fluctuates every year. The company has to make efforts in
increasing return on investments by reducing its administration, selling and other
expenses.
The company should increase its interest coverage ratio to serve long term debts.
The net profit of the company is increasing over the study period. Hence the organization
maintaining good control on all trees of expenses.
The dividend per share has observed as raising trend over the study period, hence it may
be suggested Amara Raja Batteries Limited should take key interest to maximize the
share holder wealth by increasing dividend pay out.

Page69

Conclusion

Liquidity ratios, both current ratio and quick ratio are showing effectiveness in
liquidity as in all the years current ratio is greater than the standard 2:1 and quick ratio is
greater than the standard 1:1 ratio.

The firm is maintaining a low cash balance and marketable securities which means they
done cash payments.
Debt equity ratio, solvency ratio and interest coverage ratio are showing an average
increase in the long term solvency of the firm.
The proprietary ratio is showing an average increase which means, the shareholders have
contribute more funds to the total assets.
Average payment period of the firm is showing the credit worthiness of the firm to its
suppliers.
Fixed assets turnover ratio is showing that the firm needs lesser investment in fixed assets
to generate sales.
The increasing trend of current assets turnover ratio indicates that the firm needs more
investment in current assets for generating sales.
The gross profit ratio, net profit ratio is showing the increasing trends. The profitability
of the firm the increasing

Operating ratio of the company has observed decreasing trend, hence it may be good
control over the operating expenses.
The interest that has to be paid is very less when compared to the sales. The firm is not
utilizing the debt conservatively.
The firm is retaining much of the earnings (based on dividend payout ratio) .
The company financial performance is very good and also they will increase their
business year by year by expanding their branches.

Page70

CHAPTER-6

Annexure

Bibliography

Page71

BALANCESHEETASAT31stMARCH2007

Particulars
SOURCES OF FUNDS
Shareholders Funds
Share Capital
Reserves & Surplus

Schedule
No.

1
2

As at 31.03.2007
Rupees
Rupees

As at 31.03.2006
Rupees
Rupees

113,875,000
1,692,973,671

113,875,000
1,632,042,302
1,806,848,671

Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax liability
Total
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
Investments
Current Assets, Loans &
Advances
Inventories
Sundry Debtors
Cash & Bank Balances
Loans, Advances & Deposits
Other Current Assets
Less: Current Liabilities &
Provisions
Liabilities
Provisions

3
4

44,945,252
103,853,138
233,058,880
130,927,315
2,170,834,866

148,798,390
145,000,360
2,039,716,052

6
1,672,298,054
723,666,680
948,631,374
12,892,109

8
9
10
11
12

1,583,508,897
591,622,548
991,886,349
9,514,644
961,523,483
235,627,152

1,001,400,993
208,778,082

440,958,913
649,706,121
169,121,827
342,929,588
9,926,048
1,612,642,497

307,245,534
471,673,642
152,292,556
251,402,682
7,622,683
1,190,237,097

345,042,817
293,915,449
638,958,266

162,283,498
198,416,622
360,700,120

13

Net Current Assets

Misc. Expenditure

73,665,914
159,392,966

1,745,917,302

973,684,231
14

--

829,536,977
--

Page72

Total

2,170,834,866

2,039,716,052

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2007

Particulars
INCOME
Sales
Other Income
Increase / (Decrease) in stocks
Total
Expenditure
Raw Material Consumed
Payments & Benefits to Employees
Mfg., Selling Admn., & Other
Expenses
Taxes & Licenses
Interest
Depreciation
Total
Profit Before Taxation
Add: Excess provision of Income Tax
Less: Tax Provision for earlier years
Provision for Income Tax
Provision for Wealth Tax
Add: Excess provision for Dividend
Tax Written Back
Profit After Taxation
Profit brought forward
Year from Previous
Profit available for appropriation
Less: Transfer to General Reserve
Proposed Dividend
Dividend Tax
Balance carried to Balance Sheet
Basic Earnings per equity share

Schedule
No.

Year Ended on 31.03.07

Rupees

Year Ended on 31.03.06

Rupees

15
16

2,368,057,275
63,043,449
71,015,819
2,502,116,543

1,759,017,304
41,581,593
11,120,770
1,811,719,667

17
18

1,382,962,610
170,091,901

831,843,012
157,730,759

19

494,265,237

561,985,559

20
21

181,230,080
1,448,427
136,307,132
2,366,305,387
135,811,156
-14,073,045
59,500,000
3,440,615

123,834,416
1,754,335
123,052,249
1,800,200,330
11,519,337
4,954,943
30,473,038
33,000,000
--

43,023
86,900,563
512,460,202
599,360,765
6,517,542
22,775,000
3,194,194
566,874,029
7.63

49,721
13,897,597
518,882,390
532,779,987
1,050,000
17,081,250
2,188,535
512,460,202
1.22

Page73

BALANCE SHEET AS AT 31 MARCH 2009

Particulars
SOURCES OF FUNDS
Shareholders Funds
Share Capital
Reserves & Surplus

Schedule
No.

1
2

As at 31.03.2009
Rupees
Rupees

As at 31.03.2008
Rupees
Rupees

113,875,000
2,322,782,677

113,875,000
1,898,977,921
2,436,657,677

Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax liability
Total
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
Investments
Current Assets, Loans &
Advances
Inventories
Sundry Debtors
Cash & Bank Balances
Loans, Advances & Deposits
Other Current Assets
Less: Current Liabilities &
Provisions
Liabilities

3
4

1,074,874,049
332,209,831

2,012,852,921
189,001,189
216,407,580

1,407,083,880
136,092,961
3,979,834,518

405,408,769
120,012,315
2,538,274,005

6
2,577,786,073
1,009,481,492
1,568,304,581
61,667,597
1,629,972,178
161,941,656

8
9
10
11
12

1,907,116,068
863.568,510
1,043,547,558
48,149,118
1,091,696,676
320,140,656

921,713,415
1,459,544,977
256,000,280
859,824,054
3,110,568
3,500,193,294

571,962,221
856,520,556
205,212,363
634,750,549
12,035,439
2,280,481,128

735,304,583

673,895,907

13

Page74

Provisions

576,968,027
1,312,272,610

Net Current Assets

Misc. Expenditure
Total

14

480,148,548
1,154,044,455
2,187,920,684

1,126,436,673

-3,979,834,518

-2,538,274,005

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2009

Particulars
INCOME
Sales
Other Income
Increase / (Decrease) in stocks
Total
Expenditure
Purchase Of Finished Goods
Raw Material Consumed
Payments & Benefits to Employees
Mfg., Selling Admn., & Other
Expenses
Taxes & Licenses
Interest
Depreciation
Total
Profit Before Taxation
Add: Excess provision of Income Tax
Less :Tax Provision for -Current Tax
Including Deferred tax, Earlier
Tax, Wealth tax, Fringe
benefits tax
Profit After Taxation
Profit brought forward
Year from Previous
Profit available for appropriation
Less: Transfer to General Reserve
Proposed Dividend
Dividend Tax
Balance carried to Balance Sheet

Schedule
No.

Year Ended on 31.03.09

Rupees

Year Ended on 31.03.08

Rupees

5,958,016,404
97,738,804
181,845,189
6,237,600,397

3,636,709,293
72,509,746
41,637,449
3,750,856,488

17
18

1,190,212
3,937,812,454
265,997,094

4,353,496
2,229,601,146
207,269,383

19

1,093,657,443

760,841,717

20
21

26,007,989
30,924,293
170,026,464
5,525,615,949
711,984,448
--

14,881,894
13,435,515
147,009,114
3,377,392,265
373,464,223
10,915,000

241,549,873

145,913,493

470,434,575

238,465,730

749,031,694

566,874,029

1,219,466,269
47,043,458
39,856,250
6,773,570
1,125,792,991

805,339,759
23,846,573
28,468,750
3,992,742
749,031,694

15
16

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41.31

Basic Earnings per equity share

20.94

BALANCE SHEET AS AT 31 MARCH 2010

Particulars
SOURCES OF FUNDS
Shareholders Funds
Share Capital
Reserves & Surplus

Schedule
No.

1
2

As at 31.03.2009
Rupees
Rupees

As at 31.03.2010
Rupees
Rupees

113,875,000
2,322,782,677

113,875,000
3,217,139,470
2,436,657,677

3,331,014,470

Loan Funds
Secured Loans
Unsecured Loans

3
4

Deferred Tax liability

Total

APPLICATION OF FUNDS
Fixed Assets
Gross Block

Capital Work-in-Progress

Inventories
Sundry Debtors
Cash & Bank Balances
Loans, Advances & Deposits

2,266,545,502
896,075,058
1,407,083,880
136,092,961
3,979,834,518

3,162,620,560
169,506055
6,663,141,085

Less: Depreciation
Net Block

Investments
Current Assets, Loans &
Advances

1,074,874,049
332,209,831

2,577,786,073

3,105,843,108

1,009,481,492
1,568,304,581

1,217,334,633
1,888,508,475

61,667,597

657,409,912
1,629,972,178
161,941,656

2,545,918,387
162,006,625

921,713,415

1,943,335,704

9
10
11

1,459,544,977
256,000,280
859,824,054

2,264,682,019
511,453,739

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Other Current Assets

12

Less: Current Liabilities &

Provisions
Liabilities
Provisions

3,110,568
3,500,193,294

1,248,478,477
8,011,086
5,975,961,025

735,304,583
576,968,027
1,312,272,610

1,027,373,819
99,371,133
2,020,744,952

13

Net Current Assets

Misc. Expenditure
Total

14

2,187,920,684

3,955,216,073

-3,979,834,518

-6,663,141,085

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010

Particulars
INCOME
Sales
Other Income
Increase / (Decrease) in stocks
Total
Expenditure
Purchase Of Finished Goods
Raw Material Consumed
Payments & Benefits to Employees
Mfg., Selling Admn., & Other
Expenses
Taxes & Licenses
Interest
Depreciation
Total
Profit Before Taxation
Add: Excess provision of Income Tax
Less :Tax Provision for -Current Tax
Including Deferred tax, Earlier
Tax, Wealth tax, Fringe
benefits tax
Profit After Taxation
Profit brought forward
Year from Previous
Profit available for appropriation

Schedule
No.

Year Ended on 31.03.09

Rupees

Year Ended on 31.03.10

Rupees

5,958,016,404
97,738,804
181,845,189
6,237,600,397

10,833,256,904
256,100,643
582,065,982
11,671,423,529

17
18

1,190,212
3,937,812,454
265,997,094

6,378,425
7,794,794,675
408,078,078

19

1,093,657,443

1,579,591,221

20
21

26,007,989
30,924,293
170,026,464
5,525,615,949
711,984,448
--

49,538,561
129,308,874
244,452,070
10,212,042,104
1,459,381,425

15
16

241,549,873

523,262,294

470,434,575

943,631,511

749,031,694

1,125,792,991

1,219,466,269

2,069,424,502

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47,043,458
39,856,250
6,773,570
1,125,792,991
41.31

Less: Transfer to General Reserve

Proposed Dividend
Dividend Tax
Balance carried to Balance Sheet
Basic Earnings per equity share

94,363,151
39,856,250
6,773,570
1,928,431,531
82.87

BIBLOGRAPHY

1. I.M.Pandey

Financial Management

2. M.Y.Khan & P.K.Jai

Financial Management

3. S.P. Jain & K.L. Narang

Cost & Management accounting

4. K.Rajeswara rao & G. Prasad

Accounting & Finance

5. P.Kulakarni

Financial Management

Web-sites:
www.google.com
www.amaron.co.in

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