Ratio Analysis Unitech Limited
31st mar (2009) (Rs mn)
First ratio Analysis is
Liquidity ratio
Current ratio
Current ratio
=current assets/ current liabilities
Where current assets= 95497.50
Current liabilities= 65758.35
Current ratio= 95497.50/ 65758.35
Current ratio= 1.452
Quick ratio
= current assets – inventory/ current
liabilities
Where current assets= 95497.50
Current liabilities= 65758.35
Inventory= 86535.92
Quick ratio
= 95497.50 – 86535.92/ 65758.35
Quick ratio= 0.136
Second ratio IS
SOLVENCY RATIOS
Debt equity ratio
Debt equity ratio
= long term loan/ shear holder funds
Where long term loan= 67757.33
Shear holders funds= 3246.75
Debt equity ratio= 67757.33/ 3246.75
Debt equity ratio= 20.869
Proprietary ratio
Proprietary ratio
= equity/ tangible assets
Where equity= 3246.75
Tangible assets= 1078.44
Proprietary ratio= 3246.75/ 1078.44
Proprietary ratio= 3.016
31st mar (2008) (Rs mn)
First ratio Analysis is
Liquidity ratio
Current ratio
Current ratio
=current assets/ current liabilities
Where current assets= 82033.46
Current liabilities= 63105.38
Current ratio= 82033.46/ 63105.38
Current ratio= 1.299
Quick ratio
= current assets – inventory/ current
liabilities
Where current assets= 82033.46
Current liabilities= 63105.38
Inventory= 70924.20
Quick ratio
= 82033.46 – 70924.20/ 63105.38
Quick ratio = 0.176
Second ratio IS
SOLENCY RATIO
Debt equity ratio
Debt equity ratio
= long term loan/ shear holder funds
Where long term loan= 72161.87
Shear holders funds= 3246.75
Debt equity ratio= 72161.87/ 3246.75
Debt equity ratio= 22.226
Proprietary ratio
Proprietary ratio
= equity/ tangible assets
Where equity= 3246.75
Tangible assets= 960.82
Proprietary ratio= 3246.75/ 960.82
Proprietary ratio= 3.379
Third ratio is
ACTIVITY/ TURNOVER RATIO:
inventory turnover ratio (2009)
inventory turnover ratio
= cost of goods sold/ average stock
Cost of goods sold= net sales – gross profit
Average stock
= opening stock + closing stock/ 2
Where Net sales= 17672.05
Gross profit= 10682.46
Opening stock= 70924.20
Closing stock= 86535.92
Inventory turnover ratio= 0.143
Inventory holding period
365days/ inventory turnover ratio
365/ 0.143= 2552 days
Fixed assets turnover ratio
Fixed assets turnover ratio
= Net sales/ fixed assets
Where net sales= 17672.05
Fixed assets= 1531.89
Fixed assets turnover ratio= 17672.05/ 1531.89
Fixed assets turnover ratio= 11.361
Return on total assets
Return on total assets
= Net profit/ total assets* 100
Where net profit= 7396.63
Total assets=171452.45
Return on total assets
= 7396.63/ 171452.45* 100
Return on total assets= 4.314
Third ratio is
ACTIVITY/ TURNOVER RATIO:
inventory turnover ratio (2008)
inventory turnover ratio
= cost of goods sold/ average stock
Cost of goods sold= net sales – gross profit
Average stock
= opening stock + closing stock/ 2
Where Net sales= 24867.86
Gross profit= 13633.10
Opening stock= 44384.79
Closing stock= 70924.20
Inventory turnover ratio= 0.195
Inventory holding period
365days/ inventory turnover ratio
365/ 0.195= 1872 days
Fixed assets turnover ratio
Fixed assets turnover ratio
= Net sales/ fixed assets
Where net sales= 24867.86
Fixed assets= 1007.29
Fixed assets turnover ratio= 24867.86/ 1007.29
Fixed assets turnover ratio= 24.688
Return on total assets
Return on total assets
= Net profit/ total assets* 100
Where net profit= 10302.99
Total assets= 166277.97
Return on total assets
= 10302.99/ 166277.97* 100
Return on total assets= 6.196
Profitability ratio Profitability ratio
Gross profit ratio Gross profit ratio
Gross profit ratio= gross profit/ net sales* 100 Gross profit ratio= gross profit/ net sales* 100
Where gross profit= 10682.46 Where gross profit= 13633.10
Net sales= 17672.05 Net sales= 24867.86
Gross profit ratio= 10682.46/ 17672.05* 100 Gross profit ratio= 13633.10/ 24867.86* 100
Gross profit ratio= 60.448 Gross profit ratio= 54.822

Net profit ratio Net profit ratio

Net profit sales Net profit sales
Net profit sales= net profit/ net sales* 100 Net profit sales= net profit/ net sales* 100
Where net profit= 7396.63 Where net profit= 10302.99
Net sales= 17672.05 Net sales= 24867.86
Net profit ratio= 7396.63/ 17672.05* 100 Net profit ratio= 10302.99/ 24867.86* 100
Net profit ratio= 41.854 Net profit ratio= 41.431

Interpretation
(1) Current ratio:- The ideal current ratio is between 1.33 to 2 but the current ratio of
unitech is in 2009 1.452 and in 2008 I was 1.299 so its look like this year company
has increase its working capital and its good for the company.
(2) Quick ratio:-
(3) Debt equity ratio:-
(4) Proprietary ratio:- this year company proprietary ratio is 3.016 and last year it was
3.379 so the proprietary ratio is not so good for shareholders this year as what was
last year.
(5) Inventory turnover ratio:- in 2009-0.143 in 2008- 0.195 this year the inventory
turnover ratio is 0.143 and last year it was 0.195 if we see both the year we found
out this year it is lower than last year so this year company has to return less but the
risk is very high and less margin of safety.
(6) Fixed assets turnover ratio:- in 2009-11.361 in 2008-24.688 it is like inventory
turnover ratio company has to return less risk is high and margin of safety for the
company less as what was last year.
(7) Return on total assets:- if we see last year in 2008 the return on total assets was
6.196 which was little good to this year this year in 2009 it is 4.314 it’s also like all
other turnover ratio company has to return less risk is so high and margin of safety
is lee for the company.
(8) Gross profit ratio:- This year the gross profit ratio has increase by 5.626 so it’s
look like company is doing well in the market.
(9) Net profit ratio:- it is also increase by 0.423 it is not so much but the company has
increase its profit so it is also shows the company is doing well this tear and it may
continue like this.