DISSERTATION

ON

A STUDY OF RATIO ANALYSIS OF

PROMPT TRADE FAIRS LTD, CHENNAI

Dissertation submitted by

AHMED

MBA | 2nd year

A31001918014

In partial fulfillment of the requirement for

The degree of Masters of Business Administration

At

Amity Global Business School (AGBS, CHENNAI)

Under the guidance of:

Prof.Radhika-Finance

Amity Global Business School, Chennai.

 BONAFIDE CERTIFICATE

AMITY GLOBAL

BUSINESS SCHOOL CHENNAI

This is to certify that the report is a record of original work done by AHMED of 2nd year MBA
(Enrollment No.A31001918014) on the subject of Finance in partial fulfillment for the award of
MBA degree.

Faculty Guide

Prof. Radhika

Finance Amity Global Business School, Chennai

 DECLARATION

I hereby declare that the project, entitled a study of “STUDY ON RATIO ANALYSIS OF
PROMPT TRADE FAIRS LTD, CHENNAI” submitted to the Amity Global Business School,
Chennai in partial fulfillment of the requirements for the award of the Degree of Masters of
Business Administration is a record of original research work done by me under the supervision
and guidance of Prof.Radhika.

I further declare that this project work is based on my original work and no part of this project
has been published or submitted to anybody.

Place: Chennai

Date: Signature of student:

 ACKNOWLEDGEMENT

I would like to express my deep thankfulness and sincere thanks to Dr. Vengadamani (Director)
of Amity Global Business School, Chennai for providing me the opportunity to undergo
summer internship during the MBA 2018-2020 period.

My profound thanks Prof. Radhika (Project Guide), Amity Global Business School, Chennai
for guiding me throughout the project.

Last but not the least, my profound thanks to my parents, friends and faculties who gave their
guidance and support in a way that helped me in bringing out my project in a presentable
manner.

AHMED

(AGBS, CHENNAI MBA 2018-2020

 ABSTRACT

Finance is the backbone of any company, and is very much required for the smooth running of
the activities without causing any interruption.

This aim of this study is to make a comprehensive examination of Ratio Analysis of Prompt
Trade Fairs private limited.

This project includes the analysis of financial statements of the company the significance of this
study is to evaluate several issues with an entity, such as its liquidity, efficiency of operations
and profitability. These studies are usually useful to analysts outside the business, since their
primary source of data about a firm is its financial statements, whereas these analysis is less
useful to corporate insiders
S.NO TITLE PAGE NO

1 INTRODUCTION

1.1 INDUSTRY PROFILE

1.2 COMPANY PROFILE

2 REVIEW OF LITERATURE

3 RESEARCH METHODOLOGY

4 DATA ANALYSIS AND INFERENCE

 1. INTRODUCTION

The Analysis of ratio is a technique of analyzing the financial statement of industrial

concerns. In this generation this method is sophisticated and is commonly used in
business concerns. Ratio Analysis is especially used for understand the strength and
weakness of a firm and its capacity.

Ratio Analysis is a strongly built tool which helps in analyzing and interpreting the
health of the firm. Ratio can be useful for business forecasts.

Ratios can help ascertain the following:

 The capability of a firm to pay its current obligations.

 The limit to which an organization has fully utilized borrowed funds

 How the firm utilizes its efficiency to generate sales revenue

 Performance of the company whether it is doing well or not.

Types of Ratios

Ratios can be categorized into different division depending upon the basis of
classification.

I. TRADITIONAL CLASSIFICATION

Traditional grouping has been one of the foundation of financial statement, on

which ratio may be classified as follows.

1. Profit & loss account ratios.

E.g. Gross Profit Ratio, Net Profit Ratio, Operating Ratio etc.

2. Balance sheet ratio.

E.g. Debt Equity Ratio, current ratio, Working Capital Ratio etc.
3. Mixed Ratio.
E.g. Stock turnover Ratio, debtors Turnover Ratio, fixed Assets
Turnover Ratios etc.

II. FUNCTIONAL CLASIFICATION OF RATIOS

Functional ratios

1. Liquidity ratios

a) current Ratio

b) quick Ratio

2. Leverage ratios

a) Debt-equity Ratio

b) Current Asset to Proprietor’s fund Ratio

III. PROBABILITY RATIOS

a) Gross Profit Ratio

b) Operating Profit Ratio

c) Return On Investment

IV. ACTIVITY RATIO

1. Inventory Turnover Ratio

2. Asset Turnover Ratio:

 a. Fixed Asset Turnover Ratio

b. Current Asset Turnover Ratio

3. Working Capital Turnover Ratio

 INDUSTRY PROFILE

Trade Fairs (India) Private Limited is a quickly developing Exhibition Organizing Company,
filling in as an expert display coordinator in India. We function as business visionaries with a
multi central methodology and work in different fields of Exhibitions Organizing
administrations, showcasing activities and customer arrangement. Brief Trade Fairs (India)
Private Limited was set up since 2002, with the energy to exceed expectations in the field of
sorting out Exhibitions. Today, we are considered as a real part of the rumored Exhibition
Organizers that are occupied with offering Exhibitions Organizing administrations all inclusive.
We, at Prompt hold an encounter of numerous years in the field of arranging Exhibitions and are
totally familiar with the personal conduct standards of various business fragments and
prerequisites of differed clients. This causes us in offering the most ideal answers for our
customers disregarding their budgetary requirements. Brief Trade Fairs is upheld by solid
business relations, enticing relational abilities, intense learning frame of mind and flexibility that
enable us to execute our administrations in a compelling and best way. With the intend to build
up long haul connections, we are ceaselessly refreshing our expert abilities in the field of
Exhibitions

Prompt trade Fairs Pvt Ltd, with an immense encounter of over 10 years in the field of arranging
displays are demonstrated experts who best comprehend your business and furnish you with the
ideal stage to improve your business. Brief is overseen by a group of masters who adequately set
to work their one of a kind knowledge and assets to investigate and comprehend the
requirements of each exhibitor in every display and empower them to arrive at their items to their
intended interest groups. With a solid base of enrolled guests in every area, brief's shows, any
place sorted out, guarantee the business for the exhibitors

Prompt Trade fairs India pvt ltd, is an association which grasps demonstrable skill and greatness
in all stages and intends to furnish the exhibitors and guests with a one of a kind involvement in
their presentations. Brief Trade Fairs is the most looked for after and favored show coordinator
in southern India and is currently growing its span to rest of India.
Prompt trade fairs has composed more than 300 displays in fluctuated portions including
building and development material expos design and home inside expos, property fairs,
instructive fairs, inside and outside expos. Brief has cut a specialty for itself by increasing
present expectations of the purchaser shopping shows sorted out in south India in areas including
chennai, Bangalore, Hyderabad, Ahmedabad, Nasik, Coimbatore, Erode, Salem, Pondicherry,
Neyveli, Triupathi, Vijayawada, Visakhapatnam, Warangal, Guntur, Rajahmundry, Nellor

Each show is conceptualized and sorted out after fastidious arranging with extraordinary
advancements spread crosswise over different mediums. Prevalent client assistance being the
announcement of PROMPT. We are a one - stop and complete arrangement supplier for your
presentation prerequisites. Prompts display are out and out greatness and are viewed as
exceptionally effective expos in the nation.
 COMPANY PROFILE

Name of the company: Prompt Trade Fairs

Email: prompttradefairs@gmail.com

Mobile: +91 4442142438

The Managing director of the company is “udaya Kumar”. Prompt trade fairs is a reputed
company which organizes exhibitions, the motive of the company is to promote businesses at
cost effective rates and maintain good relationships between them. The main office is situated in
Chennai, whereas the branch office is located in Hyderabad.

Prompt trade fairs conducts exhibitions this helps to boost the sales of the participating
companies, not only does it help to boost the sales but it also promotes the business and brings to
existence about such business. The exhibitions take place in chennai trade Centre which is
located in Nandambakkam. Prompt trade fairs have successfully organized over 300 exhibitions,
and has established good relationships with the participants who are happy to work again

Exhibitions not only takes place in chennai, but also in cities like Visak, Guntur, Ahmedabad,
Hyderabad, and Pondicherry.

Top Clients:
2. Review of Literature
Financial Analysis

Financial Analysis is the way toward distinguishing the money related quality and shortcoming
of the firm. It is finished by setting up connections between the things of fiscal reports, asset
report and benefit and P&L account. Financial examination can be embraced by the board of the
firm. Proprietors, leasers, speculators.

Objectives of the financial analysis

1. To determine the financial constancy and reliability of the firm

2. To measure and assess the producing ability of the firm
3. To forecast the future growth
4. To ascertain the firm’s ability and strength to repay loans

Parties interested in financial analysis

Internal users

1. Financial executives
2. Top Management

External users

1. Creditors
2. Workers
3. Customers
 4. Government
5. Public
6. Researchers
7. Investors

Importance of financial analysis

 To know the operational efficiency of the firm:

The financial analysis helps the management to find out the effectiveness of the firm, this will
help the management to find out its weak spot and take necessary action to fix it.

 Measuring the solvency of the firm :

Financial analysis helps the decision makers to take the right decision for scaling up the
long term and short term solvency of the enterprise.

 Comparison of the past and present outcome:

Financial statements of the previous years can be compared to the present year which can
give an idea how the company is doing.

 Helps in estimating the profitability :

Financial analysis can help estimate the profitability of a firm which can be referred in
the financial statements showing the gross profit and net profit.
  Inter‐firm comparison:
The financial analysis makes it easy to make inter-firm comparison. This comparison can
also be made for various time period

 Bankruptcy and Failure:

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.

 Helps in preparing budgets:

Financial analysis enables the management to forecast and prepare budgets

METHODS OF ANALYSIS:

A financial analyst can adopt the following tools for analysis of the financial statements.
These are also termed as methods of financial analysis

1. Comparative statement analysis

2. Common-size statement analysis
3. Trend analysis
4. Funds flow analysis
5. Ratio analysis

NATURE OF RATIO ANALYSIS

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. The board is keen on developing expository instruments that will quantify
costs, proficiency, liquidity and productivity so as to settle on wise choices.

STANDARDS OF COMPARISON

The ratio analysis involves comparison for a 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

Past Ratios: Ratios calculated from the past financial statements of the same firm.

Competitor's Ratios: Ratios of some selected firms, especially the most progressive and
successful competitor at the same point in time.

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

Projected Ratios: Ratios developed using the projected financial statements of the same firm.
TIME SERIES ANALYSIS

The most straightforward approach to assess the exhibition of a firm is to contrast its present
proportions and past proportions. At the point when budgetary proportions over some undefined
time frame are looked at, it is known as the time arrangement examination or pattern
investigation. It provides a sign of the guidance of progress and reflects whether the company's
budgetary exhibition has improved, weakened or remind consistent after some time.

CROSS SECTIONALANALYSIS

Another approach to correlation is to contrast proportions of one firm and some chose firms in
the business at a similar point in time. This sort of examination is known as the cross-sectional
investigation. It is progressively helpful to contrast the association's proportions and proportions
of a couple of deliberately chosen contenders, who have comparative activities

INDUSTRY ANALYSIS

To decide the money related conditions and execution of a firm. Its proportion might be
contrasted and normal proportions of the business of which the firm is a part. This sort of
investigation is known as industry examination and furthermore it learns the money related
standing and capacity of the firm and different firms in the business. Industry proportions are
significant measures in perspective on the way that every industry has its qualities which impact
the budgetary and working connections.

Types of Ratios

1. The Management expects to assess each component of the company's

performance. In perspective on the prerequisite of the different clients of
proportions, we may order them into following four significant classes: Liquidity
Ratio
2. Leverage Ratio
3. Activity Ratio
1. Liquidity Ratio

It is essential for a firm to be able to meet its obligations as they become due. Liquidity Ratios
help in setting up a connection among cast and other current advantages for current commitments
to give a fast proportion of liquidity. A firm ought to guarantee that it doesn't experience the ill
effects of absence of liquidity and furthermore that it doesn't have overabundance liquidity.

An extremely high level of liquidity is additionally awful, inactive resources win nothing. The
company's finances will be pointlessly tied up in current resources. Thus, it is important to find
some kind of harmony between high liquidity ratios can be divided into three types:

 1.1 Current Ratio

 1.2 Quick Ratio
 1.3 Cash Ratio

1.1 Current Ratio

Current ratio is an acceptable measure of firm’s short-term solvency Current assets includes
cash within a year, such as marketable securities, debtors and inventors. Prepaid costs are
additionally incorporated into current resources as they speak to the installments that won't made
by the firm in future. All obligations maturing within a year are included in current liabilities.
These include creditors, bills payable, accumulated expenses, short-term bank loan, income-tax
liability in the current year. The current ratio is a proportion of the association's transient
dissolvability. It demonstrated the accessibility of current resources in rupees for each one rupee
of current obligation. A present proportion of 2:1 is viewed as agreeable. The higher the present
proportion, the more noteworthy the edge of security; the bigger the measure of current resources
in connection to current liabilities, the more the association's capacity to meet its commitments.
It is a restored - and - brisk proportion of the association's liquidity. Current proportion is
determined by separating current resources and current liabilities.

Current Ratio is determined by diving the current assets and current liabilities
 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬
Current Ratio =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐞𝐬

1.2 Quick Ratio

Quick Ratio distinguishes the connection between snappy or otherwise called fluid resources and
current liabilities. An advantage can be called fluid just in the event that it tends to be changed
over into money on the spot or soon without a misfortune. Money is viewed as the most fluid
resource, different resources considered generally fluid resources and incorporated into snappy
resources are indebted individuals and bills receivable and attractive protections

Inventories are changed over to be fluid. Inventories as a rule set aside a lot effort for it to
acknowledge into money, likewise these qualities will in general change.

Quick Ratio is ascertained by dividing quick assets by current liabilities

𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬−𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐢𝐞𝐬
Quick Ratio =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
1.3 Cash Ratio

It is obvious that cash is the most liquid asset, a financial analyst may determine cash ratio and
its equivalent current liabilities. Short term marketable securities and bank and cash balances are
the most liquid assets of any firm. Trade investment is marketable security of equivalent of cash.
Cash ratio is the most stiff measure of liquidity. Cash ratio is obtained by dividing cash and bank
balances+current investment by current liabilities

𝐂𝐚𝐬𝐡 𝐚𝐧𝐝 𝐁𝐚𝐧𝐤 𝐛𝐚𝐥𝐚𝐧𝐜𝐞

Cash Ratio = 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬

2. Leverage Ratios

Monetary influence implies the utilization of obligation account when obligation capital is a less
expensive wellspring of money and is likewise a dangerous wellspring of financing. It helps in
find out the hazard emerging from the utilization of obligation capital. Monetary influence can
be processed by the two most ordinarily utilized proportion which are1. Structural Ratios

2. Coverage Ratios

Structural ratios are based on the proportions of debt and equity in the financial structure of a
firm.

Coverage Ratios demonstrates the connection between Debt Servicing, Commitments and the
hotspots for gathering these weights.
The transient loan bosses like investors and providers of crude material are progressively worried
about the company's present obligation paying capacity. Then again, long haul lenders like
debenture holders, money related foundations are increasingly worried about the company's long
haul budgetary quality. To pass judgment on the long haul budgetary situation of firm, monetary
influence proportions are determined. These proportions demonstrated blend of assets gave by
proprietors and moneylenders.

There ought to be a fitting blend of Debt and proprietor's value in financing the company's
advantages. The way toward amplifying the investor's arrival using Debt is classified "monetary
influence" or "money related equipping" or "exchanging on value".

Leverage Ratios are calculated to measure the financial risk and the firm's ability of using Debt
to shareholder’s advantage.

 2.1 Debt equity ratio

 2.4 Proprietary ratio

2.1 Debt Equity Ratio

Debt Equity Ratio shows the relationship elaborating the lenders contribution for each money of
the owner’s contribution is called debt-equity ratio. Debt equity ratio is computed by dividing
total debt by net worth. Lower the debt equity ratio, higher the degree of protection. Normally a
debt equity ratio of 2:1 is considered to be good.
 𝐋𝐨𝐧𝐠 𝐭𝐞𝐫𝐦 𝐝𝐞𝐛𝐭𝐬
Debt Equity Ratio =
𝐒𝐡𝐚𝐫𝐞 𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐟𝐮𝐧𝐝𝐬

2.2 Proprietary Ratio

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 shareholders funds in the total investment of business

𝐍𝐞𝐭 𝐖𝐨𝐫𝐭𝐡
Proprietary Ratio = x 100
𝐓𝐨𝐭𝐚𝐥 𝐓𝐚𝐧𝐠𝐢𝐛𝐥𝐞 𝐀𝐬𝐬𝐞𝐭𝐬

3. Activity Ratios

Activity ratios measure how efficiently a firm’s asset are employed, it is also known as turnover
ratios. Turnover ratios are based on the relationship between the level of activity, represented by
sales or cost of goods sold and level of several assets.
Generally Activity ratios are undertaken to measure the degree of efficiency how a firm uses its
assets. Activity ratios or turnover ratios indicate the speed in which the assets are being
converted to sales.

Activity Ratios can be divided into four types:

 3.1 Net Working capital ratio

 3.2 Working capital turnover ratio
 3.3 Fixed assets turnover ratio
 3.4 Total asset turnover ratio

3.1 Net working capital ratio

Net working capital ratio is the total amount of all the components of working
capital. It shows if the business has enough amount of total funds in short term to
ensure the operation.

𝐍𝐞𝐭 𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥

Net working capital Ratio =
𝐍𝐞𝐭 𝐚𝐬𝐬𝐞𝐭𝐬

3.2 Working Capital Turnover Ratio

Working capital turnover ratio shows the relationship between working capital and sales. The
result indicates the amount of times the working capital results in sales. Working capital ratio
reveals whether a firm can pay its obligations. To measure the working capital turnover ratio
sales is divided by working capital.

𝐒𝐚𝐥𝐞𝐬
Working Capital Turnover Ratio =
𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥

3.3 Fixed Assets Turnover Ratio

Fixed turnover ratio determines how efficiently a firm is using its assets, fixed assets should be
used efficiently to generate high revenue. Higher the fixed assets turnover ratio the more
effective a firms investment in fixed assets, if the ratio shows a declining state then it means the
firm has over invested in fixed assets. Fixed asset turnover ratio is very helpful to the
management and obviously the investors so they get an idea how efficiently the fixed assets are
being used. This ratio can be ascertained by dividing net sales by fixed assets

𝐍𝐞𝐭 𝐬𝐚𝐥𝐞𝐬
Fixed Assets Turnover Ratio =
𝐅𝐢𝐱𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬

3.4 Total asset turnover ratio

The total assets turnover ratio measures how resourcefully a firm uses its assets to make a sale.
Total sales are divided by total assets to see how capable a business is using its assets. Lesser
ratios may specify that the company is holding higher levels of inventory instead of selling.
 𝐒𝐚𝐥𝐞𝐬
Total asset Turnover Ratio =
𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭𝐬

then it is doing well. 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.

Gross profit ratio can be estimated by dividing the total gross profit with the net sales multiplied
by 100

3. Research Methodology

Research Design
In vision of the objects of the study listed above an exploratory research design has been
adopted. Exploratory research is one which mostly interprets and already accessible information
and it lays precise emphasis on analysis and interpretation of the prevailing and available
information.
• To identify the financial status of the firm.

• To know the credit worthiness of the company.

• To offer recommendations based on research finding.

Data Collection Methods

Primary Data

Information collected from internal guide and finance manager. Primary data is direct information.

Secondary Data

Company balance sheet and profit and loss account. Secondary data is second hand information.

Data Collection Tools

To examine the data obtained from the secondary sources “Ratio Analysis “The scope of the study is
defined below in terms of ideas adopted and period under focus.

First the study of Ratio Analysis is confined only to the prompt trade fairs private limited. Secondly the
study is based on the annual reports of the company for a period of 4 years from 2015-2018.

4. Data Analysis and Inference

1. CURRENT RATIO
The ratio between all current assets and all current liabilities; another way of expressing
liquidity. It is a measure of the firm’s 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

S.No Year Current Assets Current Liabilities Current Ratio

1 2013-2014 320,198,94 843,672,5 3.80

2 2014-2015 34,227,573 10,476,329 3.26

3 2015-2016 38,940,180 3,303,317 11.78

4 2016-2017 43,403,178 2,522,111 17.20

 20

18 17.2

16

14
11.78
12

10

6
3.8
4 3.26

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation:
2. Quick Ratio:

Quick ratio establishes a correlation amongst quick, or liquid, assets and current liabilities. An
asset is liquid if it can be changed into cash immediately or sensibly soon without a loss of value.
Quick assets are current assets that can be converted to cash within 90 days or in the short-term

S.No Year Quick Assets Current Liabilities Quick Ratio

1 2013-2014 32,019,894 843,672,5 3.80

2 2014-2015 34,227,573 10,476,329 3.26

3 2015-2016 38,940,180 3,303,317 11.78

4 2016-2017 43,403,178 2,522,111 17.20

20

18 17.2

16

14
11.78
12

10

6
3.8
4 3.26

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation:
3. Cash Ratio

The cash ratio is a measurement of a company's liquidity, specifically the ratio of a company's
total cash and cash equivalents to its current liabilities. The formula calculates a
company's ability to repay its short-term debt with cash, such as marketable
securities. This information is valuable to creditors when they decide how much
money they would be willing to loan a company.

S.No Year Cash and Bank Current Liabilities Cash Ratio

Balances

1 2013-2014 107,925 843,672,5 0.01

2 2014-2015 360,253 10,476,329 0.03

3 2015-2016 (979,398) 3,303,317 -0.29

4 2016-2017 15,28,587 2,522,111 0.60

0.7

0.6

0.5

0.4

0.3 0.6

0.2

0.1

0 0.01 0.03
2013-2014 2014-2015 2015-2016 2016-2017
-0.1
-0.29
-0.2

-0.3

-0.4

Ratio

Interpretation:
4. Net Working Capital Ratio

The net working capital ratio is the net amount of all components of working capital it is
anticipated to disclose whether a business has an adequate amount of net funds available in
the short term to stay in operation, the difference between current assets and current
liabilities excluding short-term bank borrowing is called net working capital ratio.

S.No Year Net Working Net Assets Net Working

Capital capital ratio

1 2013-2014 23,583,169 50,491,845 0.46

2 2014-2015 23,751,244 56,265,873 0.42

3 2015-2016 35,636,863 50,775,530

0.70

4 2016-2017 40,881,067 50,546,520 0.80

0.9

0.8

0.7

0.6

0.5

0.4 0.8

0.3 0.7

0.46
0.2 0.42

0.1

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation:
5. Proprietary ratio

Proprietary ratio indicates the long term or future solvency position of the business
it is also known as equity ratio.

S.No Year Shareholders funds Net Assets Proprietary

ratio

1 2013-2014 42,055,120 50,491,845 0.83

2 2014-2015 45,789,545 56,265,873 0.81

3 2015-2016 47,472,213 50,775,530

0.93

4 2016-2017 48,024,409 50,546,520

0.95
 1

0.95

0.9

0.85

0.95
0.8 0.93

0.83
0.75 0.81

0.7
2013-2014 2014-2015 2015-2016 2016-2017
Ratio

Interpretation:
6. Debt Equity Ratio

Debt equity ratio shows the relationship describing the lenders contribution for each rupee of the
owner’s contribution is called debt- equity ratio. Debt equity ratio is calculated 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
S.No Year Total long term Shareholders Funds Debt Equity
debt Ratio

1 2013-2014 16,007,902 42,055,120 0.38

2 2014-2015 19,575,305 45,789,545 0.42

3 2015-2016 9,372,448 47,472,213 0.19

4 2016-2017 46,80,519 48,024,409 0.09

0.45

0.4

0.35

0.3

0.25

0.2 0.42
0.38

0.15

0.1
0.19
0.05 0.9

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation:
7. Fixed asset turnover ratio

Fixed asset turnover ratio is used 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 reveals
inefficient use of assets. Though, in interpreting this ratio, it should be kept in mind that when
the fixed assets of the firm are old and considerably depreciated, the fixed assets turnover ratio
inclines to be high because the denominator of the ratio is very little.

S.No Year Sales Net fixed assets Fixed asset

turnover ratio

1 2013-2014 43,93,818 15,58,052 2.82

2 2014-2015 3,779,599 15,56,690 2.42

3 2015-2016 3,397,851 15,56,690 2.18

4 2016-2017 15,66,763 15,56,690 1.00

 3

2.5

1.5
2.82
2.42
1 2.18

0.5 1.00

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation
8. Current asset turnover ratio

Current Assets Turnover Ratio specifies that the current assets are turned over in the method of
sales more number of times. A high current assets turnover ratio shows the ability of the
organization to attain maximum sales with the least investment in current assets

S.No Year Sales Current assets Current asset

turnover ratio

1 2013-2014 43,93,818 32,019,894

0.13
2 2014-2015 3,779,599 34,227,573

0.11

3 2015-2016 3,397,851 38,940,180 0.08

4 2016-2017 15,66,763 43,403,178 0.03

0.14

0.12

0.1

0.08

0.13
0.06
0.11

0.04
0.08

0.02
0.03

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation:
9. Total assets turnover ratio

Total assets turnover ratio measures the ability of a firm to effectively and efficiently produce
sales, and it is commonly used by third parties in order to ascertain the operations of a business.
As it compares the sales of a company to its assets.

S.No Year Sales Total assets Total assets

turnover
ratio
1 2013-2014 43,93,818 50,491,845
0.08

2 2014-2015 3,779,599 56,265,873 0.06

3 2015-2016 3,397,851 50,775,530 0.06

4 2016-2017 15,66,763 50,546,520 0.03

0.09

0.08

0.07

0.06

0.05

0.04 0.08

0.03 0.06
0.06

0.02
0.03
0.01

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation:
10. Working capital turnover ratio

Working capital turnover ratio shows how well a company generates sales with regard to the
working capital of the organization. The difference between current assets and current liabilities
of the company is known as working capital.

S.No Year Sales Working capital Working

( Total assets) capital
turnover ratio
1 2013-2014 43,93,818 27,056,619
0.16

2 2014-2015 3,779,599 23,751,244

0.15

3 2015-2016 3,397,851 35,636,863 0.09

4 2016-2017 15,66,763 40,881,067 0.03

0.18

0.16

0.14

0.12

0.1

0.08 0.16
0.15

0.06

0.04 0.09

0.02
0.03

0
2013-2014 2014-2015 2015-2016 2016-2017

Ratio

Interpretation:
 Comparative Balance sheet for the year 2013-2014 and 2014-2015

Particulars 2014 2015 Absolute Percentage

Change Change
Share Capital 50,000,000 50,000,000 0 0

Reserves (7,944,880) (4,210,455) 3,734,425 (47.0%)

Trade Payables 6,700,000 6,900,000 200,000 2.98%

Short Term Provisions 1,736,725 3,576,329 1,839,604 105%

Total Liabilities 50,491,845 56,265,873 5,774,028 11.43%

Fixed Assets 1,558,052 1,556,690 -1362 -0.08%
Noncurrent- 900,000 900,000 0 0
Investments
Deferred Tax assets 5996 6,306 310 5.17%
Long term loans and 16,007,902 19,575,305 3,567,403 22.28%
advances
Current investments 22,589,952 33,702,313 11,112,361 49.19%
Trade receivables 9,258,857 94,173 -9,164,684 -99%
Cash and cash 107,925 360,253 252,328 234%
equivalents
Short-term loans and 63,160 70,834 7,674 12.15%
advances
Total Assets 50,491,845 56,265,873 5,774,028 11.43%
 Comparative Balance sheet for the year 2015-2016 and 2016-2017

Particulars 2016 2017 Absolute Percentage

Change Change
Share Capital 50,000,000 50,000,000 0 0

Reserves (25,27,787) (19,75,591) (552,196) 21.8%

Trade Payables 15,000 50,280 35280 235%

Short Term Provisions 32,88,317 24,71,831 -816,486 -24%

Total Liabilities 50,775,530 50,546,520 -229,010 -0.45

Fixed Assets 1,556,690 1,556,690 0 0
Noncurrent- 900,000 900,000 0 0
Investments
Deferred Tax assets 6,212 6,132 -80 -1.28%
Long term loans and 93,72,448 46,80,519 -4,691,929 -50%
advances
Current investments 39,856,302 41,874,591 2,018,289 5.06%
Trade receivables 0 0 0 0
Cash and cash (979,398) 15,28,587 549,189 56%
equivalents
Short-term loans and 63,276 0 -63,276 0
advances
Total Assets 50,775,530 50,546,520 -229,010 -0.45%
Common size statement for the year 2013-2014 and 2014- 2015

Particulars 2014 2015

Amount(cr) % Amount(cr) %
Share Capital 50,000,000 99.02% 50,000,000 88.86%
Reserves (7,944,880) -15.7 (4,210,455) -7.4%
Trade Payables 6,700,000 13.26% 6,900,000 12.26%
Short Term Provisions 1,736,725 3.43% 3,576,329 6.35%
Total Liabilities 50,491,845 100% 56,265,873 100%
Fixed Assets 1,558,052 3.08% 1,556,690 2.76%
Noncurrent-Investments 900,000 1.78% 900,000 1.59%
Deferred Tax assets 5996 0.01% 6,306 0.11%
Long term loans and 16,007,902 31.70% 19,575,305 34.79%
advances
Current investments 22,589,952 44.73% 33,702,313 59.89%
Trade receivables 9,258,857 18.33% 94,173 0.16%
Cash and cash equivalents 107,925 0.21% 360,253 0.64%
Short-term loans and 63,160 0.12% 70,834 0.12%
advances
Total Assets 50,491,845 100% 56,265,873 100%
Common size statement for the year 2015-2016 and 2016-2017

Particulars 2016 2017

Amount(cr) % Amount(cr) %
Share Capital 50,000,000 98.47% 50,000,000 98.91%
Reserves (25,27,787) -4.97% (19,75,591) -3.90%
Trade Payables 15,000 0.02% 50,280 0.09%
Short Term Provisions 32,88,317 6.47 24,71,831 4.89%
Total Liabilities 50,775,530 100% 50,546,520 100%
Fixed Assets 1,556,690 3.06% 1,556,690 3.07%
Noncurrent-Investments 900,000 1.77% 900,000 1.78%
Deferred Tax assets 6,212 0.12% 6,132 0.01%
Long term loans and 93,72,448 18.45% 46,80,519
advances 9.25%
Current investments 39,856,302 78.49% 41,874,591 82.84%
Trade receivables 0 0 0 0
Cash and cash equivalents (979,398) -1.92% 15,28,587 3.02%
Short-term loans and 63,276 0.12% 0 0
advances
Total Assets 50,775,530 100% 50,546,520 100%