ACTIVITY RATIOS ::

Stock Turnover Ratio of Ht. Leela :

Ht. leela MAR'05 4.28786 MAR'06 4.685617 MAR'07 4.625397 MAR'08 5.4049651

Stock Turnover Ratio

6 5 S.T.R 4 3 2 1 0 MAR'05 MAR'06 MAR'07 MAR'08 FY 2005-08 ht. leela

As per the chart the firm has shown a respectable performance in converting its inventory into stock. The ratio has followed an increasing trend from 4.3 in FY05 to 5.4 in FY08 with a 25.6% increase in efficiency of converting its stock into sales and having an average stock velocity period of 77 days. This is a positive sign for the management and their effective implementation of their efficient sales and inventory management policies as per stock turnover ratio is concerned.

COMPARISON WITH INDUSTRY AND E.I.H ::

industry Ht leela eih MAR'05 10.885 4.28786 1.017225 MAR'06 11.18611 4.685617 1.212406 MAR'07 14.75149 4.625397 1.059833 MAR'08 14.53957 5.404965 1.389175

Stock Turnover ratio (Industry vs ht. leela vs e.i.h)

16 14 12 10 8 6 4 2 0 MAR'05 MAR'06 MAR'07 MAR'08 FY 2005-08

S.T.R

industry ht leela eih

As we can observe from the chart above that industrial standards are very stringent in respect to the stock-turnover ratio with an average stock velocity of only 28 days, both of the firms are not able to perform as per the industrial standard which provides the firms for a greater scope of improvement in their inventory management and overall sales policies. But if we compare ht. leela with e.i.h, we can depict that ht. leela has a better performance in its stock turnover ratio with 77 days of stock velocity and is way above its peer which has a poor stock velocity of 304 days. This is a positive sign for ht. leela in its management activity as per the stock turnover ratio is concerned. Debtors Turnover Ratio of Ht. Leela ::
Ht. leela MAR'05 12.99038 MAR'06 13.32858 MAR'07 10.26577 MAR'08 13.320735

Debtor's turnover ratio 15 D.T.R 10 ht. leela 5 0 MAR'05 MAR'06 MAR'07 MAR'08 FY 2005-08

As we can observe from the above chart that the debtors turnover ratio has followed an overall increasing trend from 12.99 in FY05 to 13.3 in FY08 and has maintained an average debtors turnover ratio of 12.5 over FY05 to FY08. This represents that the management is following, maintaining and implementing an optimum credit policy for its debtors. COMPARISON WITH INDUSTRY AND E.I.H ::
MAR'05 MAR'06 MAR'07 MAR'08

industry ht leela eih

12.44334 12.99038 9.876051

12.5934 13.32858 8.851843

12.11924 10.26577 9.271946

12.58469 13.32074 9.441899

Debtor's turnover ratio (industry vs ht. leela vs. e.i.h)

14 12 10 8 6 4 2 0 MAR'05 MAR'06 MAR'07 MAR'08 FY 2005-08

industry ht leela eih

As we can observe from the above chart that ht. leela has followed the respective trend of the industry but in an amplified manner and is way above its peer. Ht. leela has a better debtors turnover ratio performance as compared with the industry and its peer. Ht. leela has better average debtors turnover ratio of 12.5 vs 12.45 of industry and 9.35 of e.i.h. Also the ht. leela has superior average debtors velocity of 29 days as compared with the weak debtors velocity of 39 days. This shows that the management has implemented an optimum credit policy for generating sales as well as converting the debtors into cash as soon as possible in the industry. This shows a positive sign for the managements activity as per debtors turnover ratio is concerned. Working Capital Turnover ratio of Ht. Leela :
ht. leela MAR'05 0.582579 MAR'06 0.452644 MAR'07 1.75015 MAR'08 0.716131

d.t.r

Working Capital Turnover Ratio

2 1.5 W.C.T.R 1 0.5 0 MAR'05 MAR'06 MAR'07 MAR'08 FY 2005-08 ht. leela

As we can observe from the above chart that the working capital turnover ratio has performed in an overall increased trend from .58 in FY05 to .72% in FY08 with an increase of 22.8%. The ratio has traveled a fluctuating path from FY05 to FY08 with firstly dipping in FY06 by 22.3% to .45 and then peaking up to 1.75 with an quantum increase of 286% and the settling down to . 716 in FY08. The firm might not have high working capital turnover ratio but has managed an average of .89 from FY05 to FY08, this means that firstly that the majority percent of net working capital requirements are covered by the sales and on an average 89% of net working capital invested in the year of operation are flushed back through sales. COMPARISON WITH INDUSTRY AND E.I.H ::
industry ht leela eih MAR'05 1.221208 0.582579 8.069059 MAR'06 1.159434 0.452644 5.270961 MAR'07 3.613578 1.75015 10.62698 MAR'08 1.967427 0.716131 -129

Comparison with Industry and e.i.h

20 0 -20 W.C.T.R -40 -60 -80 -100 -120 -140 FY 2005-08 MAR'05 MAR'06 MAR'07 MAR'08 industry ht leela eih

As we can observe from the chart that ht. leela has followed the pattern of the industrial standards in case of working capital turnover ratio. The firm may not have high working capital ratio as that of the industry but has a sustained its turnover ratio in a stable manner with optimum levels of working capital available at all times, unlike its peer which has shown volatile performance of working capital ratio. The chart also represents that Ht. leela has never got out off its working capital and has managed its working capital requirements in an efficient manner, unlike its peer. This is a positive sign for the management of Ht. leela with respect to the working capital turnover ratio. Fixed Assets Turnover Ratio of Ht. Leela :
MAR'05 MAR'06 MAR'07 MAR'08

ht. leela

0.089271

0.088892

0.096032

0.092159

Fixed Assets Turnover Ratio

0.098 0.096 0.094 0.092 0.09 0.088 0.086 0.084 MAR'05 MAR'06 MAR'07 MAR'08 FY 2005-08

F.A.T.R

ht. leela

As we can observe from the chart that the fixed assets turnover ratio as shown an increasing trend from .089 in FY05 to .092 in FY08 with a change of 3.4%. The firm is operating at a low fixed assets turnover ratio this means that the firm has low volume of sales as compared to the value of its fixed assets. By analyzing the chart, we can reckon that the overall percentage increase in the ratio is also very minute only 3.3% in 4 years. This represents that the sales of the firm are under pressure and the fixed assets are under utilized. This is a negative aspect as per the trend analysis is concerned with respect to the fixed assets turnover ratio of the firm and will have a better insight after comparing the firm with its peer and the industry. COMAPRISON WITH INDUSTRY AND E.I.H :
industry ht leela Eih MAR'05 0.273225 0.089271 0.287558 MAR'06 0.295147 0.088892 0.328082 MAR'07 0.267544 0.096032 0.386742 MAR'08 0.257552 0.092159 0.373024

Comparison with Industry and e.i.h

0.5 0.4 F.A.T.R 0.3 0.2 0.1 0 MAR'05 MAR'06 MAR'07 MAR'08 FY 2005-08 industry ht leela eih

As we can observe from the chart, ht. leela is an under-performer in its fixed assets turnover ratio. The ratio is way below the industrial standards and it can not match its peer as E.I.H has a better performance than the industry.

By analyzing the chart we can now reckon distinctly that Ht. leela has a low and poor performance in its fixed assets turnover ratio. This means that the fixed assets of the firm are utilized and the sales volumes of the firm are under pressure. The firm has a cope-up at least come up to match with the industrial standards in the coming years. This shows that the management of the firm has to work in generating more volumes of sales and to utilize its fixed assets in a more efficient manner. This is a negative sign for the firm as per the ratio is concerned and the management has to work forward efficiently to improve the ratio in the coming years.