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TABLE 4.

14
NET DEBT TO EQUITY

COMPANY NETDEBT SHAREHOLDERS DEBT-


FUND EQUITY
RATIO
IZON (1728.55) 15108.68 (0.12)
TECHNOLOGYINDUSTRY

SOFTWARE (5454.57) 17184 (0.32)


SOFTWARE 3642.29 5788.92 0.63

FINANCIAL YEAR 2011-2012

COMPANY NET SHAREHOLDER DEBT-


DEBT S FUND EQUIT
Y
RATIO
IZON 16519.85 27455.84 0.61
TECHNOLOGYINDUST
RY
SOFTWARE (10737.7 23004.09 (0.47)
7)
SOFTWARE 6283.78 7677.25 0.82
FINANCIAL YEAR 2012-2013

COMPANY NET SHAREHOLDER DEBT-


DEBT S FUND EQUIT
Y
RATIO
IZON 22086.25 30281.33 0.73
TECHNOLOGYINDUST
RY
SOFTWARE (10714.2 0.79841 (0.38)
0)
SOFTWARE 9602.56 7959.25 1.21

FINANCIAL YEAR 2013-2014

COMPANY NET DEBT SHAREHOLDERS DEBT-


FUND EQUITY
RATIO
IZON 20285.83 36961.80 0.55
TECHNOLOGY
INDUSTRY
SOFTWARE (5925.12) 33316.70 (0.18)
SOFTWARE 9529.64 9706.34 0.98
FINANCIAL YEAR 2014-2015

COMPANY NET SHAREHOLDER DEBT-


DEBT S FUND EQUIT
Y
RATIO
IZON 21159.8 46944.63 0.45
TECHNOLOGYINDUST 1
RY
SOFTWARE 2638.56 37069.47 0.07
SOFTWARE 5965.65 17225.27 0.35
CHART

1.4
1.21
1.2
0.98
1
0.82
0.8 0.73
0.63 0.61
0.55
0.6 0.45
0.35 SIDHICK
0.4 PLATE
0.2 0.07 INDUSTRY

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
-0.2 -0.12
-0.18
-0.4 -0.32
-0.38
-0.6 -0.47

INTERPRETATION:

The debt-equity ratio is calculated to assess the firms ability to meet its long term
liabilities. Generally, a ratio of 2:1 is considered to be safe for the long term lenders and
a ratio below 2:1 provides sufficient protection to the long term lenders and thus they are
more secure and a higher ratio thus would indicate a more risky financial position of the
firm.

The debt- equity ratio for all the year and of all the three companies has been less than
2:1 and this is indicative of a sound financial position of the firm.

SHAREHOLDERS EQUITY RATIO

This ratio helps to determine how much shareholders would receive in the event
of a company-wide liquidation. It represents the amount of assets on which shareholders
have a residual claim. The higher the ratio the more shareholders may receive and vice-
versa.

FORMULA= SHAREHOLDRES EQUITY

TOTAL ASSETS
FINANCIAL YEAR 2010-2011

COMPANY SHAREHOL TOTAL SHAREHOL


DERS ASSETS(TAN DERS
EQUITY GIBLE) EQUITY
RATIO
IZON 580.67 25597.50 0.023
TECHNOLOGYIN
DUSTRY
SOFTWARE 4130.40 22906.33 0.18
SOFTWARE 525.80 10779.74 0.049

FINANCIAL YEAR 2011-2012

COMPANY SHAREHOLDE TOTAL SHAREHOLDER


RS EQUITY ASSETS(TANGIBLE S EQUITY RATIO
)
IZON 6203.30 47075.52 0.132
TECHNOL
OGYINDU
STRY
SOFTWAR 4130.40 27677.41 0.15
E
SOFTWAR 537.01 16475.62 0.032
E
FINANCIAL YEAR 2012-2013

COMPANY SHAREHOLDERS TOTAL SHAREHOLDERS


EQUITY ASSETS(TANGIBLE) EQUITY RATIO
IZON 6203.45 58741.77 0.11
TECHNOLO
GYINDUSTR
Y
SOFTWARE 4130.40 36855.04 0.11
SOFTWARE 537.01 20653.04 0.03

FINANCIAL YEAR 2013-2014

COMAPNY SHAREHOLDERS TOTAL SHAREHOLDERS


EQUITY ASSETS(TANGIBL EQUITY RATIO
E)
IZON 887.41 64232.78 0.014
TECHNOLO
GY
INDUSTRY
SOFTWARE 4130.40 51242.87 0.08
SOFTWARE 527.11 23256.39 0.023
FINANCIAL YEAR 2014-2015

COMPANY SHAREHOL TOTAL SHAREHOL


DERS ASSETS(TAN DERS
EQUITY GIBLE) EQUITY
RATIO
IZON 959.41 78555.91 0.012
TECHNOLOGYIN
DUSTRY
SOFTWARE 4130.40 58726.03 0.07
SOFTWARE 563.18 31493.65 0.018

CHART
0.2
0.18
0.18

0.16 0.15

0.14 0.132

0.12 0.11
0.11
SIDHICK PLATE INDUSTRY
0.1
PAPER
0.08
0.08 0.07 PLATES
0.06 0.049

0.04 0.032 0.03


0.023 0.023
0.018
0.02 0.014 0.012

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

A ratio used to help determine how much shareholders would receive in the event of a
company-wide liquidation. The ratio is calculated by dividing total shareholders' equity
by total assets of the firm, and it represents the amount of assets on which shareholders
have a residual claim.

If we consider as in the case of IZON TECHNOLOGYINDUSTRY, the ratio for the


year 2010-2011 is 0.023 so this means that the shareholders would have a claim of 2.3%
on the assets in the event of the wind up of the company.

The lower the ratio, the better it is for the company since the company would be then
able to pay off to its shareholders in case of liquidation without any burden.

IZON TECHNOLOGYINDUSTRY has made efforts to lower the ratio and finally
succeeded to do so. If we consider the ratios for the year 2014-2015, we can see that
IZON TECHNOLOGY INDUSTRY is in a better position than the other two companies.
1. DEBT TO NET WORTH RATIO -The net debt to net worth
ratio has significance to lenders, analysts and business managers. If affects the
ability of a company to borrow money and to finance its growth. A business
owner needs to know the optimal debt to net worth ratio for the benefit of its
company. The net debt should never be higher than the net worth; it is a bad
sign for the company.

FORMULA = LONG TERM DEBT


NET WORTH

LONG TERM DEBT = SECURED LOANS + UNSECURED LOANS CASH


& BANK CURRENT INVESTMENTS

NET WORTH= EQUITY SHARE CAPITAL + PREFERENCE SHARE


CAPITAL+ RESERVES & SURPLUS MISCELLANOUS EXPENSES TO
THE EXTENT NOT WRITTEN OFF.
FINANCIAL YEAR 2010-2011

COMPANY LONG NET DEBT-


TERM WORTH NET
DEBT WORTH
RATIO
IZON (1728.55) 13893.62 (0.125)
TECHNOLOGYINDUSTRY
SOFTWARE (5454.57) 17184 (0.32)
SOFTWARE 3642.29 5399.18 0.67
FINANCIAL YEAR 2011-2012

COMPANY LONG NET DEBT-


TERM WORTH NET
DEBT WORTH
RATIO
IZON 16519.85 27145.62 0.61
TECHNOLOGYINDUSTRY
SOFTWARE (10737.77) 23004.09 (0.47)
SOFTWARE 6283.78 7677.25 0.82

FINANCIAL YEAR 2012-2013

COMPANY LONG TERM NET WORTH DEBT- NET


DEBT WORTH
RATIO
IZON 22086.25 30071.19 0.73
TECHNOLOGY
INDUSTRY
SOFTWARE (10714.20) 27984.10 (0.38)
SOFTWARE 9602.56 7959.25 1.21

FINANCIAL YEAR 2013-2014

COMPANY LONG NET DEBT-


TERM WORTH NET
DEBT WORTH
RATIO
IZON 20285.83 36961.80 0.55
TECHNOLOGYINDUSTRY
SOFTWARE (5925.12) 33316.70 (0.18)
SOFTWARE 9529.64 9706.34 0.98
FINANCIAL YEAR 2014-2015

COMPANY LONG NET DEBT-


TERM WORTH NET
DEBT WORTH
RATIO
IZON 21159.81 46944.63 0.45
TECHNOLOGYINDUSTRY
SOFTWARE 2638.56 37069.47 0.07
SOFTWARE 5965.65 16695.89 0.36

1.4
1.21
1.2
0.98
1
0.82
0.8 0.73
0.67
0.61
0.6 0.55
0.45 SIDHICK PLATE INDUSTRY
0.36
0.4 PAPER
PLATES
0.2
0.07

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
-0.2 -0.125
-0.18
-0.4 -0.32
-0.38
-0.47
-0.6

INTERPRETATION:

This ratio is used in the analysis of financial statements to show the amount
of protection available to creditors. A high ratio usually indicates that the
business has a lot of risk because it must meet principal and interest on its
obligations.
IZON TECHNOLOGYINDUSTRY has a fluctuating ratio throughout the
five years. But anyhow it has tried to maintain its position by reducing the debts
and increasing the net worth of the company.
SOFTWAREhas a negative ratio but in the year 2014-2015 it has finally
achieved a positive ratio.
SOFTWAREhas a fluctuating graph throughout the five years but in the
year 2014-2015, it has been able to lower the ratio and thus reduce the risk
involved in the business.
2. FIXED ASSETS TO LONG TERM RATIO - This ratio
indicates the proportion of long-term funds deployed in fixed assets. The higher
the ratio, the safer will be the funds available in case of liquidation. It also
indicates the proportion of funds that is invested in working capital.
It indicates the level of fixed assets owned by a company in relation to the
long-term debts of the company. The higher the ratio the better it is for a
company and the assets which are debt free and fully owned by the company.
FORMULA = FIXED ASSETS

LONG TERM LOANS


FIXED ASSETS = GROSS FIXED ASSETS DEPRICIATION
LONG TERM LOANS = SHARE CAPITAL+ RESERVES+ LONG TERM LOANS

FINANCIAL YEAR 2010-2011


COMPANY FIXED ASSETS LONG TERM FIXED ASSTES
FUNDS TO LONG TERM
RATIO
IZON 11040.56 23594.42 0.47
TECHNOLOGYIN
DUSTRY
SOFTWARE 11597.71 21493.67 0.54
SOFTWARE 8189.10 9767.08 0.84
FINANCIAL YEAR 2011-2012

COMPANY FIXED LONG FIXED


ASSETS TERM ASSTES
FUNDS TO LONG
TERM
RATIO
IZON 12623.56 45322.42 0.28
TECHNOLOGYINDUSTRY
SOFTWARE 11571.31 26108.81 0.44
SOFTWARE 10955.49 15223.78 0.72

FINANCIAL YEAR 2012-2013

COMPANY FIXED LONG FIXED


ASSETS TERM ASSTES
FUNDS TO LONG
TERM
RATIO
IZON 14482.22 57122.44 0.25
TECHNOLOGYINDUSTRY
SOFTWARE 12268.83 35522.89 0.35
SOFTWARE 13086.44 19231.88 0.68
FINANCIAL YEAR 2013-2014

COMPANY FIXED LONG FIXED


ASSETS TERM ASSTES
FUNDS TO LONG
TERM
RATIO
IZON 16006.03 62201 0.26
TECHNOLOGYINDUSTRY
SOFTWARE 13615.28 49827.95 0.27
SOFTWARE 16866.14 21291.44 0.79

FINANCIAL YEAR 2014-2015

COMPANY FIXED LONG FIXED


ASSETS TERM ASSTES
FUNDS TO LONG
TERM
RATIO
IZON 18774.48 75067.57 0.25
TECHNOLOGYINDUSTRY
SOFTWARE 15082.66 57234.96 0.26
SOFTWARE 21102.15 28647.23 0.74

CHART
0.9 0.84
0.79
0.8 0.74
0.72
0.68
0.7

0.6 0.54

0.5 0.47 SIDHICK PLATE INDUSTRY


0.44

0.4
PAPER
0.35
0.28 0.27
PLATES
0.3 0.25 0.26 0.25 0.26

0.2

0.1

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

This is a difficult set of ratios to interpret as asset values are based on the
historical cost. An increase in the fixed asset figure may result from the
replacement of an asset at an increased price or the purchase of an additional
asset intended to increase the production capacity.
A latter transaction might be expected to result in increased sales.
3. PROPERITARY RATIO- This ratio indicates the proportion of long-term funds
deployed in fixed assets. The higher the ratio, the safer will be the funds available in
case of liquidation. It also indicates the proportion of funds that is invested in
working capital.
It indicates the level of fixed assets owned by a company in relation to the long-term
debts of the company. The higher the ratio the better it is for a company and the assets
which are debt free and fully owned by the company.

FORMULA = NET WORTH


TOTAL ASSETS
NET WORTH = EQUITY SHARE CAPITAL + PREFERENCE SHARE CAPITAL+
RESERVES & SURPLUS MISCELLANOUS EXPENSES TO THE EXTENT NOT
WRITTEN OFF.
TOTAL ASSETS = FIXED ASSETS + CURRENT ASSETS
FINANCIAL YEAR 2010-2011
COMPANY NET WORTH TOTAL PROPERITARY
ASSETS RATIO
IZON 13893.62 25597.50 0.54
TECHNOLOGY
INDUSTRY
SOFTWARE 17184 22906.33 0.75
SOFTWARE 539 10779.74 0.50
9.18
FINANCIAL YEAR 2011-2012

COMPANY NET WORTH TOTAL PROPERITARY


ASSETS RATIO
IZON 27145.62 47075.52 0.57
TECHNOLOGY
INDUSTRY
SOFTWARE 23004.09 27677.41 0.83
SOFTWARE 767 16475.62 0.47
7.25
FINANCIAL YEAR 2012-2013

COMPANY NET WORTH TOTAL PROPERITARY


ASSETS RATIO
IZON 30071.19 58741.77 0.52
TECHNOLOGY
INDUSTRY
SOFTWARE 27984.10 36855.04 0.76
SOFTWARE 7959.25 20653.04 0.39

FINANCIAL YEAR 2013-2014

COMPANY NET WORTH TOTAL PROPERITARY


ASSETS RATIO
IZON 36961.80 64232.78 0.58
TECHNOLOGY
INDUSTRY
SOFTWARE 33316.70 51242.87 0.65
SOFTWARE 9706.34 23256.39 0.42

FIANANCIAL YEAR 2014-2015


COMPANY NET TOTAL PROPERITAR
WORT ASSETS Y RATIO
H
IZON 46944.6 78555.9 0.60
TECHNOLOGYINDUSTR 3 1
Y
SOFTWARE 37069.4 58726.0 0.63
7 3
SOFTWARE 17225.2 31493.6 0.55
7 5

CHART
0.9
0.83
0.8 0.75 0.76

0.7 0.65
0.63
0.6
0.57 0.58
0.6 0.54 0.55
0.52
0.5
0.5 0.47 SIDHICK PLATE INDUSTRY
0.42
0.39 PAPER
0.4
PLATES
0.3

0.2

0.1

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

Proprietary ratio indicates the proportion of total assets funded by owners or


shareholders. A higher proprietary ratio is an indicator of sound financial
position from the long term point of view because it means a large proportion of
total assets are provided by equity and hence the firm is thus less dependent on
the external sources of finance. A lower proprietary ratio is a danger signal for
l.ong term lenders as it indicates a lower margin of safety available to them.
IZON TECHNOLOGY INDUSTRY has maintained an overall consistent ratio
throughout as in the five year time.
The proprietary ratio of PAPER has been declining since the year 2011-
2012.The proprietary ratio of PLATES has been increasing since 2012-2013.
IZON TECHNOLOGY INDUSTRY has been improving over the years and
though PAPER has a declining ratio throughout but anyhow it is in a better
position than the other companies.

4. INTEREST COVER -This ratio is also known as time interest


- earned ratio. It measures the firms ability to make contractual interest
payments. This ratio measures the debt servicing capacity of a firm insofar as
fixed interest on long term loan is concerned. It indicates the extent to which a
fall in EBIT is tolerable in that the ability of the firm to service its interest
payments would not be adversely affected. For instance, coverage of five times
would indicate that a fall in operating earnings only to up to one-fifth level can
be tolerated.
The higher the ratio the greater is the ability of the firm to handle fixed
charge liabilities and the more assured is the payment of interest to them.
However, too high a ratio would imply unused debt capacity. A low ratio is
danger signal that the firm is using excessive debt and does not have the ability
to offer assured payment of interest to the lenders.

FORMULA = PBIT
INTEREST
FINANCIAL YEAR 2010-2011
COMPANY PBIT INTEREST INTEREST
COVER
IZON 6435.55 173.90 37.01
TECHNOLOGYINDUSTRY
SOFTWARE 9754.75 332.13 29.37
SOFTWARE 2314.72 399.54 5.79

FINANCIAL YEAR 2011-2012


COMPANY PBIT INTEREST INTEREST
COVER
IZON 7945.06 878.70 9.04
TECHNOLOGY
INDUSTRY
SOFTWARE 11719.67 250.94 46.70
SOFTWARE 2924.56 440.44 6.64

FINANCIAL YEAR 2012-2013

COMPANY PBIT INTEREST INTEREST


COVER
IZON 8468.30 1152.69 7.35
TECHNOLOGYINDUSTRY
SOFTWARE 9656.69 253.24 38.13
SOFTWARE 1474.88 797.25 1.85
FINANCIAL YEAR 2013-2014
COMPANY PBIT INTEREST INTEREST
COVER
IZON 8722.70 1508.40 5.78
TECHNOLOGY
INDUSTRY
SOFTWARE 10534.04 402.01 26.20
SOFTWARE 3678.57 858.92 4.28

FINANCIAL YEAR 2014-2015

COMPANY PBIT INTEREST INTEREST


COVER
IZON 11077.34 1300.49 8.52
TECHNOLOGYINDUSTRY
SOFTWARE 7669.26 474.95 16.15
SOFTWARE 3477.46 695.18 5.00
CHART

50 46.7

45

37.01 38.13
40

35
29.37
30 26.2 SIDHICK PLATE INDUSTRY
25 PAPER

20 16.15 PLATES

15
9.04 8.52
10 5.79 6.64 7.35 5.78 5
4.28
5 1.85

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

The interest cover ratio is used to determine how easily a company can be
relieved of its burden to pay interest expenses on outstanding debt. The lower
the ratio, the more the company is burdened by debt expense. When a
company's interest coverage ratio is only 1.5 or lower, its ability to meet interest
expenses may be questionable.

IZON TECHNOLOGY INDUSTRY has had a steep fall in the ratio from
the year 2010-2011(37.01) to the year 2011-2012(9.04) and this was mainly
because the interest expenses had risen by leaps and bounds. And thereafter the
interest expenses continued to rise.

SOFTWAREhas a fluctuating ratio. The rise in the ratio was because of the
reduction in the interest expenses and a sudden fall was when the interest
expenses were high.

SOFTWARE has witnessed a ratio of 1.85 for the year 2012-2013 because
this year the profit before interest and tax was 1474.88 which was quite less as
compared to the previous year and the interest expenses were 797.25 which had
risen by 1.8 times as compared to the previous year.

5. DIVIDEND COVER RATIO -It measures the ability of a firm to pay dividend on
preference shares which carry a stated rate of return. This ratio is the ratio of net
profits after taxes (EAT) and the amount of preference dividend. The higher the
coverage the better it is and vice versa

FORMULA = NET PROFIT AFTER TAX


DIVIDEND
FINANCIAL YEAR 2010-2011

COMPANY PROFIT DIVIDEND DIVIDEND


AFTER TAX COVER
IZON 4222.15 1104.33 3.82
TECHNOLOGY
INDUSTRY
SOFTWARE 6202.29 1478.40 4.20
SOFTWARE 1292 199.39 6.48

FINANCIAL YEAR 2011-2012


COMPANY PROFIT DIVIDEND DIVIDEND
AFTER COVER
TAX
IZON 4687.03 1393.55 3.36
TECHNOLOGYINDUSTRY
SOFTWARE 7536.78 1787.16 4.22
SOFTWARE 1728.19 241.49 7.16

FINANCIAL YEAR 2012-2013


COMPANY PROFIT DIVIDEND DIVIDEND
AFTER TAX COVER
IZON 5201.74 1492.5 3.49
TECHNOLOGY
INDUSTRY
SOFTWARE 6174.81 1255.16 4.92
SOFTWARE 958.50 55.41 17.30

FINANCIAL YEAR 2013-2014


COMPANY PROFIT DIVIDEND DIVIDEND
AFTER COVER
TAX
IZON 5046.80 878.45 5.75
TECHNOLOGYINDUSTRY
SOFTWARE 6754.37 1590.55 4.25
SOFTWARE 2022.74 240.93 8.40

FINANCIAL YEAR 2014-2015


COMPANY PROFIT DIVIDEND DIVIDEND
AFTER TAX COVER
IZON 6865.69 1307.77 5.25
TECHNOLOGY
INDUSTRY
SOFTWARE 4904.74 1152.45 4.26
SOFTWARE 2014.67 350.09 5.74

CHART
20

18 17.3

16

14

12
SIDHICKPLATE INDUSTRY
10
8.4 PAPER
8 7.16 PLATES
6.48
5.75 5.74
6 4.92 5.25
4.22 4.25 4.26
3.824.2 3.49
4 3.36

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

The dividend cover ratio means that how easily the company can be relieved
of its burden of paying the dividends to the company.

IZON TECHNOLOGYINDUSTRY has been paying off its dividends at a


consistent rate. And it seems that it has been following a conservative approach.

SOFTWARE had paid a very high dividend for the year 2011-2012,
which means that the company had declared ala large part of its profit as
dividend and thus following a liberal approach for paying the dividends.

6. EBIDTA TO TURNOVER RATIO -This ratio is used to assess a


companys profitability by comparing its turnover and earnings. Since EBITDA
is derived from revenue this would indicate the percentage of a company
remaining after operating expenses.
Generally a higher ratio would indicate that the company is able to keep its
earnings at a good level through efficient processes that have kept certain
expenses low.

FORMULA = EARNING BEFORE INTEREST, TAX ANDDEPRICIATION

TURNOVER

FINANCIAL YEAR 2010-2011


COMPANY EBIDT TURNOVE EBIDTA
A R TO
TURNOVE
R RATIO
IZON 7254.84 17984.76 0.40
TECHNOLOGYINDUSTR
Y
SOFTWARE 10966.2 35924.07 0.31
3
SOFTWARE 2812.95 8699.59 0.32

FINANCIAL YEAR 2011-2012


COMPANY EBIDT TURNOVE EBIDTA
A R TO
TURNOVE
R RATIO
IZON 8779.67 20028.28 0.44
TECHNOLOGYINDUSTR
Y
SOFTWARE 12955.1 41890.91 0.31
5
SOFTWARE 3611.74 11677.14 0.31

FINANCIAL YEAR 2012-2013


COMPANY EBIDTA TURNOVER EBIDTA TO
TURNOVER
RATIO
IZON 9441.70 24624.04 0.38
TECHNOLOGY
INDUSTRY
SOFTWARE 10941.81 46248.61 0.24
SOFTWARE 2302.54 14260.81 0.16
FINANCIAL YEAR 2013-2014
COMPANY EBIDTA TURNOVER EBIDTA TO
TURNOVER
RATIO
IZON 9805.88 25875.77 0.38
TECHNOLOGY
INDUSTRY
SOFTWARE 11871.28 43319.61 0.27
SOFTWARE 4801.98 18735.32 0.26

FINANCIAL YEAR 2014-2015


COMPANY EBIDTA TURNOVER EBIDTA TO
TURNOVER
RATIO
IZON 12223.53 30187.02 0.40
TECHNOLOGY
INDUSTRY
SOFTWARE 9155.06 44918.67 0.20
SOFTWARE 4856.17 23445.88 0.21

CHART
0.5
0.44
0.45
0.4 0.4
0.4 0.38 0.38

0.35
0.31 0.32 0.31 0.31
0.3 0.27
0.26 SIDHICK PLATE INDUSTRY
0.24
0.25
PAPER
0.2 0.21
0.2 PLATES
0.16
0.15

0.1

0.05

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:
EBIDTA to turnover ratio signifies that higher the ratio the better it is. Since
it means that earnings before interest, depreciation and taxation.
IZON TECHNOLOGY INDUSTRY has maintained a positive rising graph
throughout. And it has a ratio better than the other two companies.
7. EARNING PER SHARE -This ratio measures the profitability on
a per share basis i.e. the amount that they can get on every share held. The
higher the ratio the more amount the equity shareholders receive.
FORMULA = PROFIT ATTRIBUTABLE TO SHAREHOLDERS

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES FOR BASIC EPS

FINANCIAL YEAR 2010-2011


COMPANY PROFIT O WEIGHT EARNIN
ATTRIBUTAB ED G PER
LE AVERAG SHARE
SHAREHOLDE E NO. OF
RS ORDINA
RY
SHARES
IZON 4222.15 64682312 73.76
TECHNOLOGYINDUS 2
TRY
SOFTWARE 6202.29 41304005 15.02
45
SOFTWARE 1259.35 15720882 80.11
0

FINANCIAL YEAR 2011-2012


COMPANY PROFIT WEIGHTED EARNING
ATTRIBUTABLE AVEARGE PER SHARE
TO NO. OF
SHAREHOLDERS ORDINARY
SHARES
IZON 4687.03 697748601 67.17
TECHNOLOGYINDUSTRY
SOFTWARE 7536.78 4130400545 18.25
SOFTWARE 1694.19 177855318 95.26

FINANCIAL YEAR 2012-2013


COMPANY PROFIT WEIGHTED EARNING
ATTRIBUTABLE AVEARGE PER
TO NO. OF SHARE
SHAREHOLDERS ORDINARY
SHARES
IZON 5073.69 730584834 69.45
TECHNOLOGY
INDUSTRY
SOFTWARE 6174.81 4130400545 14.95
SOFTWARE 424.58 187048666 22.70

FINANCIAL YEAR 2013-2014


COMPANY PROFIT WEIGHT EARNIN
ATTRIBUTAB ED G PER
LE TO AVEARG SHARE
SHAREHOLDE E NO. OF
RS ORDINA
RY
SHARES
IZON 4993.12 82855081 60.26
TECHNOLOGYINDUS 1
TRY
SOFTWARE 6754.37 41304005 16.35
45
SOFTWARE 1989.01 18704868 106.34
2

FINANCIAL YEAR 2014-2015


COMPANY PROFIT WEIGHTED EARNING
ATTRIBUTABLE AVEARGE PER
TO NO. OF SHARE
SHAREHOLDERS ORDINARY
SHARES
IZON 6861.15 907252572 75.63
TECHNOLOGY
INDUSTRY
SOFTWARE 4904.74 4130400545 11.87
SOFTWARE 1978.24 203595864 97.17

CHART

97.17
2014-2015 11.87
75.63

106.34
2013-2014 16.35
60.26

22.7 PLATES
2012-2013 14.95
69.45 PAPER
SIDHICK PLATE INDUSTRY
95.26
2011-2012 18.25
67.17

80.11
2010-2011 15.02
73.76

0 20 40 60 80 100 120

INTERPRETATION:
The ratio is helpful in the determination of the market price of the equity
share of the company. The ratio is also helpful in estimating the capacity of
company to declare dividends on equity shares.

Higher the EPS the better is the capital productivity. It is an important


measure of the economic performance of a corporate entity.

the highest EPS as compared to the other two firms. And IZON
TECHNOLOGY INDUSTRY has been quite consistent in maintaining its ratio
throughout.

8. GROSS PROFIT MARGIN -The ratio measures the margin of


profit available on sales. The higher the ratio the better it is for the company. It
reflects the efficiency with which a firm produces its products.

FORMULA = GROSS PROFIT * 100


SALES
FINANCIAL YEAR 2010-2011
COMPANY GROSS SALES GROSS
PROFIT PROFIT
MARGIN
IZON 6153.98 17551.09 35.06
TECHNOLOGY
INDUSTRY
SOFTWARE 8656.19 34223.92 25.29
SOFTWARE 2169.49 8554.36 25.36

FINANCIAL YEAR 2011-2012


COMPANY GROSS SALES GROSS
PROFIT PROFIT
MARGIN
IZON 7388.93 19693.28 37.52
TECHNOLOGY
INDUSTRY
SOFTWARE 10057.87 39508.45 25.46
SOFTWARE 2667.42 11420.00 23.35

FINANCIAL YEAR 2012-2013


COMPANY GROSS SALES GROSS
PROFIT PROFIT
MARGIN
IZON 8160.03 24315.77 33.55
TECHNOLOGYINDUSTRY
SOFTWARE 8040.59 43150.08 18.63
SOFTWARE 2005.45 14001.25 14.32
FINANCIAL YEAR 2013-2014
COMPANY GROSS SALES GROSS
PROFIT PROFIT
MARGIN
IZON 7868.91 25021.98 31.44
TECHNOLOGYINDUSTRY
SOFTWARE 8190.83 40551.38 20.20
SOFTWARE 3149.49 18202.48 17.30
FINANCIAL YEAR 2014-2015
COMPANY GROSS SALES GROSS
PROFIT PROFIT
MARGIN
IZON 10286.67 29396.35 34.99
TECHNOLOGYINDUSTRY
SOFTWARE 5304.80 42718.71 12.42
SOFTWARE 3194.82 23163.24 13.79
CHART

40 37.52
35.06 34.99
35 33.55
31.44
30
25.36
25.29 25.46
25 23.35
20.2 SIDHICK PLATE INDUSTRY
20 18.63
17.3 PAPER
14.32 13.79 PLATES
15 12.42

10

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTEPRETATION:

The ratio measures the margin of profit available on sales. The higher the
ratio the better it is. The ratio of IZON TECHNOLOGY INDUSTRY has been
fluctuating but it has been on a constant platform. The sales figures have been
rising so the fluctuations in the ratio can be attributed to the difference in the
prices of the raw materials, freights and wages.

The gross profit ratio of SOFTWARE has been falling and which is again
because of the rise in the prices of the raw materials, wages and freight which
have ultimately reduced the margin of the gross profit.

The gross profit margin of SOFTWAREhas also decreased since the selling
prices have not risen in the same proportion to the increase in the cost of the raw
materials and other expenses.
IZON TECHNOLOGY INDUSTRY has a much favourable ratio as
compared to the other two companies. PAPER can take some measures such as
procure raw materials at a cheaper price or to increase the selling price in order
to improve its gross profit margin.

9. NET PROFIT MARGIN -This ratio measures the relationship


between EBIT to sales. It indicates the efficiency of the management in
manufacturing, selling, administration and other activities of the firm. It is the
overall measure of a firms profitability. It is represented as a percentage.
A high net profit margin would ensure adequate returns to the owners as
well as enable a firm to withstand adverse economic conditions when selling
price is declining, cost of production is rising and demand for product id falling.
A low net profit margin has the opposite implication.

FORMULA = NET PROFIT BEFORE INTEREST AND TAX * 100


SALES
FINANCIAL YEAR 2010-2011

COMPANY NPBIT SALES NET PROFIT


MARGIN
IZON 6435.55 17551.09 36.67
TECHNOLOGY
INDUSTRY
SOFTWARE 9754.75 34223.92 28.50
SOFTWARE 2314.72 8554.36 27.06
FINANCIAL YEAR 2011-2012
COMPANY NPBIT SALES NET PROFIT
MARGIN
IZON 7945.06 19693.28 40.34
TECHNOLOGY
INDUSTRY
SOFTWARE 11719.67 39508.45 29.66
SOFTWARE 2924.56 11420.00 25.60
FINANCIAL YEAR 2012-2013
COMPANY NPBIT SALES NET PROFIT
MARGIN
IZON 8468.30 24315.77 34.82
TECHNOLOGY
INDUSTRY
SOFTWARE 9656.69 43150.08 22.38
SOFTWARE 1474.88 14001.25 10.53

FINANCIAL YEAR 2013-2014


COMPANY NPBIT SALES NET PROFIT
MARGIN
IZON 8722.70 25021.98 34.86
TECHNOLOGY
INDUSTRY
SOFTWARE 10534.04 40551.38 25.98
SOFTWARE 3678.57 18202.48 20.21

FINANCIAL YEAR 2014-2015


COMPANY NPBIT SALES NET PROFIT
MARGIN
IZON 11077.34 29396.35 37.68
TECHNOLOGY
INDUSTRY
SOFTWARE 7669.26 42718.71 17.95
SOFTWARE 3477.46 23163.248 15.01
CHART
45
40.34
40 37.82
36.67
34.82 34.86
35
29.66
28.5
30 25.98
27.06 25.6
SIDHICK PALTE INDUSTRY
25 22.38
20.21 PAPER
20 17.95
15.01 PLATES
15
10.53
10

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

Net profit ratio reflects the net profit margin on the total sales after
deducting all the expenses but before deducting the interest and taxation. This
ratio measures the efficiency of the operation of the company.

The trend of the graph of the net profit ratio is quite similar to that of the
gross profit margin ratio. Higher the ratio the better it is. IZON
TECHNOLOGY INDUSTRY has been quite efficient in managing the
operating expenses of the firm.

10. CASH PROFIT RATIO -The Cash Ratio is the most


conservative of all these measures of cash resources, as only actual cash and
securities easily convertible to cash are used to measure cash resources. The
short-term liquidity of a company may be measured through cash ratio.

FORMULA = CASH PROFIT


SALES
CASH PROFIT= NET PROFIT+ DEPRICIATION

FINANCIAL YEAR 2010-2011


COMPANY CASH SALES CASH
PROFIT PROFIT
RATIO
IZON 5041.44 17551.09 28.72
TECHNOLOGY
INDUSTRY
SOFTWARE 7413.77 34223.92 21.85
SOFTWARE 1790.23 8554.36 20.93

FINANCIAL YEAR 2011-2012


COMPANY CASH SALES CASH
PROFIT PROFIT
RATIO
IZON 5521.64 19693.28 28.38
TECHNOLOGY
INDUSTRY
SOFTWARE 8772.26 39508.45 22.20
SOFTWARE 2415.37 11420.00 21.15
FINANCIAL YEAR 2012-2013
COMPANY CASH SALES CASH
PROFIT PROFIT
RATIO
IZON 6175.14 24315.77 25.40
TECHNOLOGY
INDUSTRY
SOFTWARE 7459.93 43150.08 17.29
SOFTWARE 1313.16 14001.25 9.38

FINANCIAL YEAR 2013-2014


COMPANY CASH SALES CASH
PROFIT PROFIT
RATIO
IZON 6129.98 25021.98 24.50
TECHNOLOGY
INDUSTRY
SOFTWARE 8091.61 40551.38 19.95
SOFTWARE 3146.15 18202.48 17.28

FINANCIAL YEAR 2014-2015


COMPANY CASH SALES CASH
PROFIT PROFIT
RATIO
IZON 8011.88 29396.35 27.25
TECHNOLOGY
INDUSTRY
SOFTWARE 6890.54 42718.71 14.95
SOFTWARE 3389.38 23163.25 14.63

Equity= shareholders fund- miscellaneous expenses


Financial year 2011-2016

30 28.72 28.38
27.25
25.4
24.5
25
21.85 22.2
20.93 21.15 19.95
20
17.29
17.28 SIDHICK PALTE INDUSTRY
14.95
14.63
15 PAPER
PLATES
10 9.38

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:
The ratio measures the cash generation in the business as a result of the
operation expressed in terms of sales. The cash profit ratio is more reliable
indicator of performance where there are sharp fluctuations in profit before tax
and the net profit from year to year owing to the difference in depreciation.
It facilitates the inter firm comparison of performance since different
methods of depreciation may be adopted by different companies.
IZON TECHNOLOGY INDUSTRY is ahead of the other two companies
and has a better graph as compared to PAPER and PLATES.
11. RETURN ON ASSETS -Here the profitability is measured in
terms of the relationship between net profits and assets. The ROA may be also
called as profit-to-asset ratio. It can be interpreted in two ways. First, it
measures managements ability and efficiency in using the firms assets to
generate (operating) profits. Second, it reports the total return accruing to all
providers of capital (debt and equity), independent of the source of capital.

FORMULA = EBIT
AVERAGE TOTAL ASSETS

FINANCIAL YEAR 2010-2011


COMPANY EBIT AVERAGE RETURN ON
TOTAL ASSETS
ASSETS
IZON 6435.55 20147.33 0.32
TECHNOLOGY
INDUSTRY
SOFTWARE 9754.75 20644.91 0.47
SOFTWARE 2314.72
FINANCILA YEAR 2015-2012

COMPANY EBIT AVERAGE RETURN ON


TOTAL ASSETS
ASSETS
IZON 7945.06 36336.51 0.22
TECHNOLOGY
INDUSTRY
SOFTWARE 11719.67 25291.87 0.46
SOFTWARE 2924.56 13627.68 0.21
FINANCIAL YEAR 2012-2013

COMPANY EBIT AVERAGE RETURN ON


TOTAL ASSETS
ASSETS
IZON 8468.30 52908.65 0.16
TECHNOLOGY
INDUSTRY
SOFTWARE 9656.69 32266.23 0.30
SOFTWARE 1474.88 18564.33 0.08

FINANCIAL YEAR 2013-2014

COMPANY EBIT AVER RET


AGE URN ON
TOTAL ASSETS
ASSETS
IZON 8722.70 61487.28 0.14
TECHNOLOGY
INDUSTRY
SOFTWARE 10534.04 44143.57 0.24
SOFTWARE 3678.57 21954.72 0.17
FINANCIAL YEAR 2014-2015

COMPANY EBIT AVERAGE RETURN ON


TOTAL ASSETS
ASSETS
IZON 11077.34 71394.35 0.11
TECHNOLOGY
INDUSTRY
SOFTWARE 7669.26 54984.45 0.14
SOFTWARE 3477.46 27375.02 0.13

CHART

0.5 0.47 0.46


0.45

0.4

0.35 0.32
0.3
0.3
SIDHICK PALTE INDUSTRY
0.24
0.25
0.21 0.21 PAPER
0.2 0.17 PLATES
0.16 0.150.14
0.14 0.13
0.15

0.1 0.08

0.05

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

The ratio indicates how profitable a company is relative to its total assets.
The ratio illustrates how well management is employing companys total assets
to make a profit. The higher the return, the more efficient management is in
utilizing the assets base.
Here we can conclude that SOFTWARE has not been utilizing its asset
base efficiently and so the graph has taken a downward trend.

IZON TECHNOLOGY INDUSTRY has also not been very efficient in


utilizing the asset base of the company.

12. RETURN ON AVERAGE NET WORTH-This ratio measures


the return on the total equity funds of ordinary shares. From this ratio it can be
judged whether the firm has earned a satisfactory return for its shareholders or
not. The higher the ratio, the better it is for the shareholders.

FORMULA= PROFIT AFTER TAX


AVERAGE NET WORTH

FINANCIAL YEAR 2010-2011


COMPANY PROFIT AVERAGE RETURN ON
AFTER TAX NET WORTH AVEARGE
NET WORTH
IZON 4222.15 11697.83 0.36
TECHNOLOGY
INDUSTRY
SOFTWARE 6202.29 14784.80 0.42
SOFTWARE 1292

FINANCIAL YEAR 2011-2012


COMPANY PROFIT AVERAGE RETURN ON
AFTER TAX NET WORTH AVEARGE
NET WORTH
IZON 4687.03 20519.62 0.23
TECHNOLOGY
INDUSTRY
SOFTWARE 7536.78 20134.05 0.38
SOFTWARE 1728.19 6538.22 0.26
FINANCIAL YEAR 2012-2013
COMPANY PROFIT AVERAGE RETURN ON
AFTER TAX NET WORTH AVEARGE
NET WORTH
IZON 5201.74 28608.41 0.18
TECHNOLOGY
INDUSTRY
SOFTWARE 6174.81 25494.10 0.24
SOFTWARE 958.50 7827.25 0.12

FINANCIAL YEAR 2013-2014


COMPANY PROFIT AVERAGE RETURN ON
AFTER TAX NET WORTH AVEARGE
NET WORTH
IZON 5046.80 33516.50 0.15
TECHNOLOGY
INDUSTRY
SOFTWARE 6754.37 30650.40 0.22
SOFTWARE 2022.74 8832.80 0.23

FIANANCIAL YEAR 2014-2015


COMPANY PROFIT AVERAGE RETURN ON
AFTER TAX NET WORTH AVEARGE
NET WORTH
IZON 6865.69 41953.22 0.16
TECHNOLOGY
INDUSTRY
SOFTWARE 4904.74 35193.09 0.14
SOFTWARE 2014.67 13465.81 0.15
CHART

0.45 0.42

0.4 0.38
0.36
0.35

0.3
0.26
0.23 0.24 SIDHICK PALTE INDUSTRY
0.25 0.220.23
PAPER
0.2 0.18
0.15 0.16 PLATES
0.14 0.15
0.15 0.12

0.1

0.05

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

It expresses the net profit in terms of equity shareholders fund. It is an


important yardstick of performance for equity shareholders since it indicates the
return on funds employed by them. However this measure is based on the
historical net worth and will be high for old plants and low for new plants.

The factor which motivates the shareholders to invest


in a company is the expectations of an adequate rate of return on their funds,
they will want to assess the rate of return in order to decide whether to continue
their investments or not.

13. RETURN ON AVERAGE CAPITAL EMPLOYED-Return on


average capital employed is a profitability ratio. The term capital employed
refers to long-term funds supplied by the lenders and owners of the firm. Capital
employed basis provides a test of profitability related to the sources of long-
term funds. It is an insight into how efficiently the long-term funds of owners
and lenders are being used. The higher the ratio, the more efficient is the use of
capital employed.

CAPITAL EMPLOYED = TOTAL FUNDS EMPLOYED


MISCELLANOUS EXPENSES TO THE EXTENT NOT WRITTEN OFF

FIANANCIAL YEAR 2010-2011


COMPANY EBIT AVERAGE RETURN ON
CAPITAL AVERAGE
EMPLOYED CAPITAL
EMPLOYED
IZON 6435.55 19879.43 0.32
TECHNOLOGYIN
DUSTRY
SOFTWARE 9754.75 20601.58 0.47
SOFTWARE 2314.72

FIANANCIAL YEAR 2011-2012


COMPANY EBIT AVERAGE RETURN ON
CAPITAL AVERAGE
EMPLOYED CAPITAL
EMPLOYED
IZON 7945.06 36157.69 0.22
TECHNOLOGY
INDUSTRY
SOFTWARE 11719.67 25326.71 0.46
SOFTWARE 2924.56 13530.25 0.22
FIANANCIAL YEAR 2012-2013
COMPANY EBIT AVERAGE RETURN ON
CAPITAL AVERAGE
EMPLOYED CAPITAL
EMPLOYED
IZON 8468.30 52778.56 0.16
TECHNOLOGY
INDUSTRY
SOFTWARE 9656.69 32236.49 0.30
SOFTWARE 1474.88 18564.33 0.08
FIANANCIAL YEAR 2013-2014
COMPANY EBIT AVERAGE CAPITAL RETURN ON
EMPLOYED AVERAGE
CAPITAL
EMPLOYED
IZON 8722.70 61434.74 0.14
TECHNOLOGY
INDUSTRY
SOFTWARE 10534.04 44048.96 0.24
SOFTWARE 3678.57 21954.72 0.17

FIANANCIAL YEAR 2014-2015


COMPANY EBIT AVERAGE RETURN ON
CAPITAL AVERAGE
EMPLOYED CAPITAL
EMPLOYED
IZON 11077.34 71394.35 0.16
TECHNOLOGY
INDUSTRY
SOFTWARE 7669.26 54984.45 0.14
SOFTWARE 3477.46 27375.02 0.13

CHART

0.5 0.47
0.46
0.45

0.4

0.35 0.32
0.3
0.3
SIDHICK PLATE INDUSTRY
0.24
0.25 0.22 0.22 PAPER
0.2 0.17 PLATES
0.16 0.16
0.14 0.14
0.15 0.13

0.1 0.08

0.05

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:
Return on average capital employed ratio narrows the focus to gain a better
understanding of a company's ability to generate returns from its available
capital base.
By comparing net income to the sum of a company's debt and equity capital,
investors can get a clear picture of how the use of leverage impacts a company's
profitability. Financial analysts consider the ROCE measurement to be a more
comprehensive profitability indicator because it gauges management's ability to
generate earnings from a company's total pool of capital.
14. DIVIDEND PAYOUT RATIO -This ratio indicates the
percentage PAT distributed as dividends to equity shareholders. It is also known
as pay-out ratio. For instance PAT are Rs. 500000 and the dividend is Rs.
300000 then the dividend pay -out ratio would be 60%. This implies that 40% of
the profits of the firm are retained (retention ratio) and 60% distributed as
dividends. Therefore, the higher the ratio the more dividends can be received.
FORMULA= DIVIDEND (EQUITY)/ PROFIT AFTER TAX

FINANCIAL YEAR 2010-2011


COMPANY DIVIDEND(EQUITY) PROFIT DIVIDEND
AFTER PAYOUT
TAX RATIO
IZON 1104.33 4222.15 26.16
TECHNOLOGY
INDUSTRY
SOFTWARE 1478.40 6202.29 23.89
SOFTWARE 199.39 1292 15.43
FINANCIAL YEAR 2011-2012
COMPANY DIVIDEND(EQUITY) PROFIT DIVIDEND
AFTER PAYOUT
TAX RATIO
IZON 1393.55 4687.03 29.73
TECHNOLOGY
INDUSTRY
SOFTWARE 1787.16 7536.78 23.71
SOFTWARE 241.49 1728.19 13.97

FINANCIAL YEAR 2012-2013


COMPANY DIVIDEND(EQUITY) PROFIT DIVIDEND
AFTER PAYOUT
TAX RATIO
IZON 1492.5 5201.74 28.69
TECHNOLOGY
INDUSTRY
SOFTWARE 1255.16 6174.81 20.33
SOFTWARE 55.41 958.50 5.78

FINANCIAL YEAR 2013-2014


COMPANY DIVIDEND(EQUITY) PROFIT DIVIDEND
AFTER TAX PAYOUT
RATIO
IZON 878.45 5046.80 17.41
TECHNOLOG
Y INDUSTRY
SOFTWARE 1590.55 6754.37 23.55
SOFTWARE 240.93 2022.74 11.91

FINANCIAL YEAR 2014-2015


COMPANY DIVIDEND(EQUITY) PROFIT DIVIDEND
AFTER PAYOUT
TAX RATIO
IZON 1307.77 6865.69 19.05
TECHNOLOGY
INDUSTRY
SOFTWARE 1152.45 4904.74 23.50
SOFTWARE 350.09 2014.67 17.41
CHART
35

29.73
30 28.69
26.16
25 23.89 23.71 23.55 23.5

20.3
20 19.05
17.41 17.41 SRI MEENAKSHI GARMENTS
15.43 CLOTHS
15 13.97
11.97 TEXTILES

10
5.78
5

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

INTERPRETATION:

This ratio identifies the percentage of earnings (net income) per common
share allocated to paying cash dividends to shareholders. The dividend payout
ratio is an indicator of how well earnings support the dividend payment.

It indicates the extent to the net profit distributed to the


shareholders as dividend. A high payout signifies a liberal distribution policy
and a low payout reflects conservative distribution policy,

CHART