ACKNOWLDGEMENTS 3
List of Tables 4 Chapter 1. Introduction 5
1.1 Theoretical background 8
1.1.1 Use and significance of Ratio Analysis 8
1.1.2 Limitations 11
1.1.3 Classifications of ratios 13
1.2 Research Methodology 33
1.2.1 Need for the study 33
1.2.2 Scope of the study 33
1.2.3 Objectives of the study 33
1.2.4 Data sources 34
1.2.5 Limitations 34
Chapter 2. Profiles 35
2.1 Company profile 36
Chapter 3. Review of Literature 55 Chapter 4.Data Analysis 59 Chapter 5.Findings 86
Chapter 6.Suggestions 88
Bibliography 90

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|Sl. No |Table No |Title of the tables |Page No | |1 |4.1 |Current Ratio |60 | |2 |4.2 |Quick Ratio |61 | |3 |4.3 |Cash Ratio |63 | |4 |4.4 |Networking capital Ratio |64 | |5 |4.5 |Debt Ratio |65 | |6 |4.6 |Debt equity Ratio |66 | |7 |4.7 |Capital Equity Ratio |67 | |8 |4.8 |Interest coverage ratio |69 | |9 |4.9 |Inventory turnover Ratio |70 | |10 |4.10 |Inventory conversion Period |72 | |11 |4.11 |Debtor turnover ratio |73 | |12 |4.12 |Debt Collection of period |74 | |13 |4.13 |Net Assets Turnover Ratio |75 | |14 |4.14 |Fixed assets turnover ration |76 | |15 |4.15 |Current assets turnover ratio |77 | |16 |4.16 |Total assets turnover ratio |78 | |17 |4.17 |Working Capital Turnover Ratio |79 | | | |Net profit ratio | | |18 |4.18 |Net profit Based on No PAT |80 | |19 |4.19 |Return on investment ratio |82 | |20 |4.20 |Return of equity ratio |83 | |21 |4.21 |Earning per share ratio |84 | |22 |4.22 | |85 |

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1. Introduction

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as “the indicated quotient of two mathematical expressions” and “the relationship between...

...Financial ratioanalysis
A reading prepared by Pamela Peterson Drake
OUTLINE
1.
2.
3.
4.
5.
1.
Introduction
Liquidity ratios
Profitability ratios and activity ratios
Financial leverage ratios
Shareholder ratios
Introduction
As a manager, you may want to reward employees based on their performance. How do you know
how well they have done? How can you determine what departments or divisions have performed
well? As a lender, how do decide the borrower will be able to pay back as promised? As a manager of
a corporation how do you know when existing capacity will be exceeded and enlarged capacity will be
needed? As an investor, how do you predict how well the securities of one company will perform
relative to that of another? How can you tell whether one security is riskier than another? We can
address all of these questions through financial analysis.
Financial analysis is the selection, evaluation, and interpretation of financial data, along with other
pertinent information, to assist in investment and financial decision-making. Financial analysis may be
used internally to evaluate issues such as employee performance, the efficiency of operations, and
credit policies, and externally to evaluate potential investments and the credit-worthiness of
borrowers, among other things.
The analyst draws the financial data needed in financial...

...well-tested ratios out there make the task a bit less daunting. Comparative ratioanalysis helps you identify and quantify of the desert hotel company's strengths and weaknesses, evaluate its financial position, and understand the risks you may be taking.
As with any other form of analysis, comparative ratio techniques are not definitive. Numerous off the balance sheet and income statement factors can play a role in the success or failure of a company. This discussion contains descriptions and examples of the eight major types of ratios used in financial analysis: Profitability, Liquidity, short-term liquidity and Long-Term AnalysisRatios are highly important profit tools in financial analysis that help financial analysts implement plans that improve profitability, liquidity, financial stability and management efficiency for the business. Although, ratios report generally show the professional way, of the desert lodge accommodation of beds and breakfast boutique hotel in the desert of Kuwait.
There are several considerations it must be aware of when comparing ratios from one financial period to another.
Short-term Liquidity
Short-term liquidity is the ability of the company to meet its short-term financial commitments. Short-term liquidity ratios measure the relationship between...

...LIQUIDITY
Liquidity ratios are used to determine a company’s ability to meet its short-term debt obligations. Investors often take a close look at liquidity ratios when performing fundamental analysis on a firm. Since a company that is consistently having trouble meeting its short-term debt is at a higher risk of bankruptcy, liquidity ratios are a good measure of whether a company will be able to comfortably continue as a going concern.
Working Capital
Working capital is the amount by which the value of a company's current assets exceeds its current liabilities. Also called net working capital. Sometimes the term "working capital" is used as synonym for "current assets" but more frequently as "net working capital", i.e. the amount of current assets that is in excess of current liabilities. Working capital is frequently used to measure a firm's ability to meet current obligations. It measures how much in liquid assets a company has available to build its business.
Working capital is a common measure of a company's liquidity, efficiency, and overall health.
Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between an entity's short-term assets (inventories, accounts receivable, cash) and its short-term liabilities.
Working capital (net working capital) = Current Assets - Current Liabilities
2008
2009...

...
RatioAnalysis University of Phoenix
HCS/571 Finance Resource Management Sept 24, 2013Rosetta Stringfellow, MBA, BSRatio AnalysisRatioanalysis is a widely used managerial tool that compares one number with another to gain insights that would not arise from looking at either of the numbers separately. Ratioanalysis is used to examine and interpret the relationship between two numbers on a financial statement. This is done so that the managers of a facility can determine whether or not the organization needs to change any of their financial variables in order to remain competitive in their market. The ratioanalysis converts numbers into meaningful comparisons which managers can use to compare their facilities with others within the same market. The management team can also use the ratioanalysis to see how the facility is performing from year to year. In sum, ratioanalysis shows the strengths and weaknesses of a health care facility (Finkler, Kovner, & Jones, 2007).
The financial data for this paper are from the financial statements of Norwalk Hospital located in Fairfield County, Connecticut. Common size ratios allow comparisons between comparable health care organizations. It is important to see how the...

...RATIOANALYSISRatios | 2007 | 2008 | 2009 |
Current Ratio | 0.98 | 0.79 | 0.91 |
Quick Ratio | 0.66 | 0.41 | 0.46 |
Working Capital | (43318926) | (480192556) | (199882615) |
-------------------------------------------------
2007
Current Ratio (C.R):-
It shows the relationship between size of current assets and size of current liabilities.
CurrentRatio=Current Assets (C.A)/Current Liabilities (C.L)
The standard of current ratio is (2/1) means company must have “2” or twice assets to be paid out “1” liability. In this case company’s current ratio is 0.98 means it has 0.98 assets to be out “1” liability. So this company is not performing well and it is not up-to the mark (rule of thumb).It’s Current Assets are (2,049,482,448) and Current Liabilities are (2,092,801,374).
Though it is not up to the mark but still it’s condition in 2007 is better as compared to 2008 and 2009. Moreover it’s liabilities is low compared with other years which means that company is satisfying it’s liabilities. By the satisfying of liabilities it gains the trust of creditors and stakeholders. Another reason is that it gave high amount of loans and advances to the others. Higher amount of loans and advances means that company was giving loans and advances to the others thereby gaining or earning income or profit from...

...1.1.1 Financial Performance Analysis.
The financial statement provides the basic data for financial performance analysis.
Basic limitation of the traditional financial statement comprising the balance sheet and the profit and loss account is that they do not give all the information regarding the financial operations of a firm. Nevertheless, they provide some useful information to the extent the balance sheet mirrors the financial position on a particular date in terms of the structure of assets, liabilities and owners equity, and so on. The profit and loss account shows the results of operations during a certain period of time in terms of the revenues obtained and the incurred during the year. Thus, the financial statements provide a summarized view of the financial position and operations of a firm. Therefore, much can be learnt about a firm from a careful examination of its financial statements as invaluable documents / performance reports. The analysis of financial statements is, thus, an important aid to financial analysis.
The focus of financial analysis is on key figures in the financial statements and the significant relationship that exists between them. The analysis of financial statements is a process of evaluating relationship between component parts of financial statements to obtain a better understanding of the firm’s position and performance. The first task of...

...for extracting meanings out of them, for which ratioanalysis is used. It is usually used to give meanings to different variables by comparing them with other variables to make effective decisions. A proper benchmark is needed for instance industry average, competitor or target set by the company itself. We have used company’s previous year’s performance for comparison. SOCI and SOFP of Fauji Fertilizer Company 2010 and 2011 have been taken from the annual report (also attached in appendix for reference).
The results mainly indicate an improved performance of the company over the year 2011 in profitability terms and in liquidity terms. Additional information about company’s policy, industry average, credit rating of the company in the market and asset valuation methods is required for better conclusions. The possible reasons behind any change are discussed precisely throughout the analysis. A major focus is the concern of relating ratios with each other. Hence, prominent linkage exists between increased liquidity ratio and decreased receivable collection period. Also the low difference between current and quick ratio shows a better control of FFC over handling its working capital effectively. Furthermore, a low difference between gross profit margin and net profit margin indicates a better control of FFC over its expenses.
All in all, for a better understanding of changes, industry...

...RatioAnalysis – Unit II
Problem 1
A company having the Net working capital of 2.8 Lacs as on 30.06.10 indicates the following financial ratios and performance figures
Current Ratio 2.4
Liquidity ratio 1.6
Inventory Turnover 8
(on cost of sales )
Gross Profit on Sales 20%
Credit Allowed (months ) 1.5
The company s fixed Assets is equivalent to 90% of its net worth ( Share capital plus reserves ) while reserves amounted to 40 % of share capital
Prepare the balance sheet of the company as on 30.06.2003 showing all calculation
Problem 2
Calculate Creditors Turnover Ratios from the following Data
Particulars Rs
Opening Creditors 25000
Purchase returns 5000
Cash paid to Crs 1,30,000
Closing Crs 15,000
Problem 3
Calculate the following Ratios
Current Assets Rs 5,00,000, Opening Stock – Rs 50,000, Cl Stock Rs 1,50,000, Cost of Goods Sold –Rs 12,00,000 , Gross profit – Rs 2,00,000 indirect expenses Rs 20,000 ,Equity Share Capital – Rs 7,00,000 , 10 % Preference share capital - Rs 3,00,000, 12 % debentures – Rs 2,00,000, Current liabilities Rs 2,00,000 and General Reserve – Rs 1,00,000
Problem 4
From the following figures and ratios draw out Balance sheet and Trading and P& L Account
Particulars RS
Share Capital 1,80,000
working Capital 63,000
O/D...