This document provides an analysis of ratios for a company involved in chemicals and fertilizers for the years 2011-2012. It includes calculations and explanations of key financial ratios to analyze liquidity, solvency, capital structure, turnover, profitability, and other metrics. The ratios indicate the company had strong liquidity and current ratios in 2011 but these declined in 2012, while inventory turnover and fixed asset turnover improved between the two years. Return on investments was around 6% in 2012. Overall the document performs a comprehensive ratio analysis to evaluate the company's financial performance and position.

2. ABOUT THE COMPANY
 The company deals in chemicals and fertilizers.
 It is the company's aim to make India self-reliant in
these fields.
 The company is committed to the production of
products that fall in the core sector.
 Our management plays a large role in recruiting
and keeping its large flock of personnel together.
 Technology is a major area of concern and they
take care to see that they have the latest available
technology at our disposal.

3. RATIO ANALYSIS
2011-2012

4. WHAT IS RATIO ANALYSIS
 It is a powerful tool of financial analysis useful for
measuring the performance of an organization.
 Ratios are calculated from current year numbers
and are then compared to previous years.
 There are many ratios that can be calculated from
the financial statements.
 Some common ratios include the price-earnings
ratio, debt-equity ratio, earnings per share, asset
turnover and working capital.

5. CLASSIFICATION OF RATIOS
Solvency Ratios
Capital Structure Ratios
Turnover(Efficiency)Ratios
Profitability Ratios

6. CURRENT
RATIOS
SOLVENCY
RATIOS
LIQUID/QUICK/ACID PROPRIETORS
TEST RATIO RATIOS

7. PARTICULARS Rs. (In Lakhs) 2011 Rs.(In Lakhs) 2012
1.SOURCES OF FUNDS
A.OWNERS FUND
Share Capital 25680.92 25680.92
ADD:Reserves and Surplus 175769.99 167860.09
201450.91 193541.01
B.BORROWED FUNDS
a.Secured Loans
Long Term Borrowings 128.3
Other Long Term Liabilities 6002.77 6594.34
Long Term Provisions 98.28 129.95
611.05 6852.59
TOTAL FUNDS EMPLOYED 207551.96 200393.6
2.APPLICATION OF FUNDS
A.FIXED ASSETS
Intangible 1.49
Tangible 2047.96 2398.51
Capital work in progress 235.47
2049.45 2633.98
B.INVESTMENTS
Non Current Investments 9783.05 4618.72
Long Term Loan and Advances 93790.33 31941.02
Other Non Current Assets 3531.42 5776.49
107104.8 42336.23
C.WORKING CAPITAL
a.Current Assets
Inventories 16607.96 114030.3
Trade Receivables 2200 378.58
Cash and Bank Balances 17257.53 32560.62
Short Term Loans and Advances 119501.63
127634.92 166471.13
b.Current Liabilities
Short Term Borrowings 27650 9407
Trade Payable 434.12 1155.73
Other Current Liabilities 976.13 327.21
Short Term Provisions 176.96 157.8
29237.21 111047.74
WORKING CAPITAL(a-b) 98397.71 155423.39
TOTAL CAPITAL EMPLOYED 207551.96 200393.6

8. CURRENT RATIOS
A liquidity ratio that measures a company's ability to
pay short-term obligations.
Calculated
as:
CURRENT ASSETS /CURRENT LIABILITIES

9. INVENTORIES + TRADE RECEIVABLES + CASH OR BANK +
SHORT TERM LOANS AND ADVANCES / SHORT TERM
BORROWINGS + TRADE PAYABLE + OTHER CURRENT
LIABILITIES + SHORT TERM PROVISIONS
2011 2012
 166471.13/ 11047.74  127634.92/ 29237.21
= 15.068: 1 =4.365:1
* All figures in lakhs

10. LIQUID/QUICK/ACID TEST RATIO
 An indicator of a company's short-term liquidity.
QUICK ASSETS/CURRENT LIABILITIES

11. CASH AND BANK BALANCES/ LIQUID LIABILITIES
2011 2012
 35560.62/ 11047.74  17257.53/ 29237.21
= 3.21:1 = 0.59:1
* All figures in lakhs

12. PROPRIETORS RATIOS
 Proprietary ratio establishes relationship between
proprietor's funds to total resources of the unit.
PROPRIETORS FUND/TOTAL ASSETS x 100

13. 2011 2012
 193541.01/ 211441.34  201450.91/ 236789.17
x 100 x 100
= 91.534% = 85.076%
* All figures in lakhs

14. CAPITAL STRUCTURE RATIO
CAPITAL
DEBT/EQUITY
GEARING
RATIO
RATIO

15. DEBT/EQUITY RATIO
 A measure of a company's financial leverage
calculated by dividing its total
liabilities by stockholders' equity
Debt/Equity Ratio = Debt/Debt + Equity

16. 2011 2012
 6852.59/ 193541.01  6101.05/ 201450.91
= 0.035:1 = 0.03:1
* All figures in lakhs

17. CAPITAL GEARING RATIO
 Capital Gearing Ratio explains the relationship
between fixed term capital/loans carrying fixed rate
of dividend/interest
CAPITAL WITH FIXED RATE OF
RETURN/CAPITAL NOT WITH FIXED RATE OF
RETURN

18. 2011 2012
 6852.59/ 193541.01  6101.05/ 201450.91
= 0.035% = 0.03%
* All figures in lakhs

19. TURNOVER (EFFICIENCY) RATIOS
INVENTORY
TURNOVER RATIO
WORKING
CREDIT
CAPITAL
TURNOVER RATIO
TURNOVER RATIO
INVENTORY FIXED ASSETS
VELOCITY TURNOVER RATIO
DEBTORS DEBTORS
TURNOVER RATIO VELOCITY(DSO)

20. CREDIT TURNOVER RATIO
 It compares creditors with the total credit
purchases.
 CREDIT PURCHASES/ AVERAGE (CREDITORS+
BILLS PAYABLE)

21. 2011 2012
 9225.89/ 1155.73  31200/ 434.12
= 7.89:1 = 71.86:1
* All figures in lakhs

22. PARTICULARS RS. (IN LAKHS) 2012
Gross Sales 48958.86
(-) Sales Return
NET SALES 48958.86
LESS:COST OF GOODS SOLD
Purchase of Stock in Trade 31200
Change in Inventories 25
Cost of Sales 31225
GROSS PROFIT(NET SALES - COST OF GOODS SOLD) 17733.86
LESS:OPERATING EXPENSES
ADMINISTRATIVE EXPENSES:
Employee Benefit expense 1023.01
Depreciation and Amortization expense 233.11
SELLING EXPENSES:
Travelling Expense 307.3
FINANCIAL EXPENSES:
Finance Cost 1132.59
TOTAL OPERATING EXPENSES 2696.01
OPERATING NET PROFIT 15037.85
ADD:NON OPERATING INCOME
Other Income 43.01
LESS:NON OPERATING EXPENSES
Exceptional Items 2816.53
Prior Period Adjust 127.01
LESS:TAX PAID 2151.79
NET PROIT 9985.53

23. INVENTORY TURNOVER RATIO
 Inventory Turnover Ratio is a ratio showing how
many times a company's inventory is sold and
replaced over a period.
Generally calculated as:
Cost of Goods Sold/Average Stock

24. 2011 2012
 19446.89- 10215.2/  48958.86- 17733.86/
14033.2 16999.44
= 0.657 times = 1.836 times
* All figures in lakhs

25. INVENTORY VELOCITY
 Inventory Velocity is number of hours or days that
elapse between receipt of inputs and dispatch of
finished product
Average Stock/Cost of goods sold x 365

26. 2011 2012
 14033.2/ 19446.89-  16999.44/ 48958.86-
10215.2 x 365 17733.86 x 365
= 554.84 days = 198.71 days
* All figures in lakhs

27. DEBTOR’S TURNOVER RATIO
 An accounting measure used to quantify a firm's
effectiveness in extending credit as well as
collecting debts.
Credit Sales/Average(Debtors + Bills Receivable)

28. 2011 2012
 19446.89/378.58  48958.86/2200
= 51.36 times = 22.25 times
* All figures in lakhs

29. DEBTOR’S VELOCITY(DSO)
 Average Debtors + Average Bills Receivable/Credit
sales x 365

30. 2011 2012
 378.58/19446.89 x 365  2200/48958.86 x 365
= 7.105 days = 16.401 days
* All figures in lakhs

31. FIXED ASSETS TURNOVER RATIO
 The fixed-asset turnover ratio measures a
company's ability to generate net sales from fixed-
asset investments - specifically property, plant and
equipment (PP&E) - net of depreciation
Total sales/Gross fixed assets

32. 2011 2012
 19446.89/2633.98  48958.86/2049.45
= 7.38 times = 23.88 times
* All figures in lakhs

33. WORKING CAPITAL TURNOVER RATIO
 A measurement comparing the depletion of working
capital to the generation of sales over a given
period.
Total Sales/Average Working Capital

34. 2011 2012
 19446.89/155423.39  48958.86/98397.71
= 0.125 times = 0.497 times
* All figures in lakhs

35. PROFITABILITY RATIOS
GROSS
PROFIT RATIO
OPERATING
EXPENSE
NET PROFIT
RATIO
RATIO

36. GROSS PROFIT RATIO
 A financial metric used to assess a firm's financial
health by revealing the proportion of money left
over from revenues after accounting for the cost of
goods sold.
Calculated as: Gross Profit/Net Sales*100

37. 2011 2012
 10215.2/19446.89 x  17733.86/48958.86 x
100 = 52.528% 100 = 36.22%
* All figures in lakhs

38. OPERATING NET PROFIT RATIO
 This ratio indicates the profitability of current
operations.
Generally Calculated as: Operating Net Profit/Net
Sales x 100

39. 2011 2012
 7942.57/19446.89 x  13005.23/48958.86 x
100 = 40.84% 100 = 26.56%
* All figures in lakhs

40. EXPENSE RATIO
 A measure of what it costs an investment company
to operate a mutual fund
Generally calculate as: Each type or item of
expenses/Net Sales x 100
 2696.01/ 48958.86 x 100 = 5.506%
* All figures in lakhs

41. RETURN ON INVESTMENTS(ROI/ROCE)
 A performance measure used to evaluate the
efficiency of an investment or to compare the
efficiency of a number of different investments.
Generally Calculated as: EBIT/Capital Employed
x 100
12137.32/200393.6 x 100 = 6.05%
* All figures in lakhs

42. OTHER RATIOS
INTEREST PR ICE
COVERAGE YIELD EARNING
RATIOS RATIO
DEBT SERVICE
DIVIDEND
COVERAGE
PAYOUT RATIO
RATIOS(DSCR)
EARNINGS
DIVIDEND PER
PER
SHARE(DPS)
SHARE(EPS)

43. PRICE EARNING RATIOS(PE )
 The relationship between market price of the share
and the current earnings per share.
 MARKET PRICE PER SHARE/EARNINGS PER
EQUITY SHARE
35.55/ 4= 8.89
* All figures in lakhs

44. PRESENTED BY
 MEGHNA GULATI
 SANJANA PARULEKAR
 LOMA SISODIA
 VISHAL CHAWLA
 AKSHAY DUGGAD
 HANS PUNJABI

45. THANK YOU