A STUDY ON FINANCIAL PERFORMANCE USING

RATIO ANALYSIS
WITH REFERENCE TO APARNA ENTERPRISES, PEDDAPURAM

In partial fulfilment of the requirements for the award of

“POST GRADUATE DIPLOMA IN MANAGEMENT”

Submitted by
SHAIK ANJUM SAJID
(Regd No. 35012)

Under the esteemed guidance of

Mrs. BHAVANI
Assistant Professor, IIAM

INTEGRAL INSTITUTE OF ADVANCED MANAGEMENT

(APPROVED BY AICTE NEW DELHI, India)

VISAKHAPATNAM, Andhra Pradesh, India

(2021 – 2023)
 CERTIFICATE

This is to certify that this project work entitled “A STUDY ON RATIO ANALYSIS’’ with
reference to APARNA ENTERPRISES, PEDDAPURAM, is a bona-fide work done by
SHAIK ANJUM SAJID, a student of 35th batch for the award of the degree of Post-
Graduation Diploma in Management under the guidance of Mrs. Suchitra, Assistant
Professor, IIAM.

INTERNAL EXAMINER EXTERNAL EXAMINER

Mrs. Bhavani Name & Signature

Faculty Guide
IIAM Business School

Mr. SURYA TEJA

MUTHYAM EXCECUTIVE
DIRECTOR

IIAM Business School

 DECLARATION

I, SHAIK ANJUM SAJID hereby declare that the project work entitled “A STUDY ON
RATIO ANALYSIS” with respect to APARNA ENTERPRISES of India has been
submitted to INTEGRAL INSTITUE OF ADVANCED MANAGEMENT, in partial
fulfilment of Post Graduate in Diploma Management under the guidance of Mrs. Suchitra,
Assistant Professor, IIAM, Visakhapatnam

Place: Visakhapatnam SHAIK ANJUM SAJID

Date: (Roll no. 35012)

Z
 ACKNOWLEDGEMENT

I am much obliged and thankful to my internal guide Mrs. Bhavani Assistant professor of
IIAM, for his expert guidance, direction.
I would like to express my sincere thanks and gratitude to Dr. P R K RAJU, Director,
DMS, whose motivation and constant encouragement for the successful completion of this
project.

I am very much thankful and gratitude and respect to Dr. M VIJAY KUMAR, Head Of
Department DMS, and constant encouragement for the successful completion of this
project

I am thankful to our principal Dr. P M M SUBRAHMANYA SARMA, for permitting and

encouragement during this project.

I am very much thankful to company guide Mr. CH S MADHUSUDANA RAO,

APARNA ENTERPRISES LIMITED PEDDAPURAM, for his support and
encouragement during the period of project.

I would like to express our gratitude and respect towards MANAGEMENT, INTEGRAL
INSTITUTE OF ADVANCED MANAGEMENT for providing necessary help and
infrastructure.

Finally, I acknowledge all my other Professors, friends, my parents and all those who have
helped me directly or indirectly for the completion of my project.

SHAIK ANJUM SAJID

Roll No. 35012

 ABSTRACT

The present study of the research entitled “A STUDY ON FINANCIAL PERFORMANCE

USING THE RATIO ANALYSIS AT APARNA ENTERPRISES LIMITED
PEDDAPURAM
The study was based on secondary data from records, reports, and profiles of the
organization. The validity of any research is based on the systematic method of data
collection analysis. The Ratio analysis is the process of identifying the financial soundness
and cost-effectiveness of the company by establishing a relationship between the items of the
balance sheet and profit and loss a/c. The present study has thrown major concentration in
ratio analysis, from the 4years balance sheet and profit and loss a/c. An objective of the study
includes the overall financial performance of the company. Based on the four years balance
sheet and profit and loss a/c, suitable suggestions were given by the researcher for better
soundness and cost- effectiveness of the company We conduct a magnitude link study of the
plant for the financial year 2017-2021 as part of this initiative

Keywords: Ratios, Finance, Returns, Analysis.

1
 INDEX
ABSTRACT
TABLE OF CONTENTS
LIST OF TABLES
LIST OF GRAPHS

CHAPTER-1
1.1 INTRODUCTION
1.1.1 INTRODUCTION TO FINANCIAL MANAGEMENT
1.1.2 INTRODUCTION TO RATIO ANALYSIS
1.1.3 MEANING OF RATIO ANALYSIS
1.1.4 TYPES OF RATIO ANALYSIS
1.1.5 CORE ELEMENTS OF FINANCIAL MANAGEMENT
1.1.6 FINANCE FUNCTIONS
1.2 PROJECT LAYOUT
CHAPTER-2
2.1 INDUSTRY PROFILE
2.1.1 INTRODUCTION
2.1.2 HISTORY AND DEVELOPMENT
2.1.3 INDUSTRY CHARACTERISTICS
2.1.4 TYPES
2.1.5 COMPETITORS
2.2 COMPANY PROFILE
2.2.1 ABOUT
2.2.2 HISTORY
2.2.3 VISION
2.2.4 BRANDS
2.2.5 REWARDS
CHAPTER-3
3.1 BASIS OF THE PROJECT
3.1.1 PROBLEM DESCRIPTION

2
3.1.2 THEORETICAL FRAMEWORK
3.1.3 OBJECTIVES OF THE STUDY
3.1.4 NEED OF THE STUDY
3.1.5 SCOPE OF THE STUDY
CHAPTER-4
4.1 DATA HANDLING
4.1.1 PERIOD OF DATA USED
4.1.2 SOURCE OF THE STUDY

4.1.3 DATA ANALYSIS TOOLS

CHAPTER-5
5.1 RESULTS AND DISCUSSIONS
5.1.1 CURRENT RATIO
5.1.2 QUICK RATIO
5.1.3 GROSS PROFIT RATIO
5.1.4 NET PROFIT RATIO
5.1.5 OPERATING RATIO
5.1.6 RETURN ON INVESTMENT
5.1.7 RETURN ON EQUITY
5.1.8 TOTAL ASSETS TURNOVER RATIO
5.1.9 DEBT EQUITY RATIO
5.1.10 INTEREST COVERAGE RATIO
5.1.11 PROPRIETARY RATIO
5.1.12 FIXED ASSETS RATIO
5.1.13 INVENTORY TURNOVER RATIO
5.1.14 DEBTORS TURNOVER RATIO
5.1.15 WORKING CAPITAL TURNOVER RATIO
5.2 FINDINGS

CHAPTER-6
6.1 LIMITATIONS
6.2 SUGGESTIONS
6.3 CONCLUSION

APPENDICES
REFERENCE
CERTIFICATE OF ARTICLE PUBLICATION

3
 LIST OF TABLES

TABLE NO PAGE NO

NAME OF THE TABLE

01 CURRENT RATIO

02 QUICK RATIO

03 GROSS PROFIT RATIO

04 NET PROFIT RATIO

05 OPERATING RATIO

06 RETURN ON INVESTMENT

07 RETURN ON EQUITY

08 TOTAL ASSETS TURNOVER RATIO

09 DEBT EQUITY RATIO

10 INTEREST COVERAGE RATIO

11 PROPRIETARY RATIO

12 FIXED ASSETS RATIO

13 INVENTORY TURNOVER RATIO

14 DEBTORS TURNOVER RATIO

15 WORKING CAPITAL TURNOVER RATIO

4
 LIST OF GRAPHS

TABLE NO PAGE NO
NAME OF THE TABLE

01 CURRENT RATIO

02 QUICK RATIO

03 GROSS PROFIT RATIO

04 NET PROFIT RATIO

05 OPERATING RATIO

06 RETURN ON INVESTMENT

07 RETURN ON EQUITY

08 TOTAL ASSETS TURNOVER RATIO

09 DEBT EQUITY RATIO

10 INTEREST COVERAGE RATIO

11 PROPRIETARY RATIO

12 FIXED ASSETS RATIO

13 INVENTORY TURNOVER RATIO

14 DEBTORS TURNOVER RATIO

15 WORKING CAPITAL TURNOVER RATIO

5
 CHAPTER-1
INTRODUCTION

6
 1.1.1 INTRODUCTION TO
FINANCIALMANAGEMENT
Financial management is the part of management activities such as planning and controlling
the financial resources of a company. It is concerned with finding various financial resources
for the company. Resources for business needs must be sufficient and cost-effective.
Financial management also includes the best use of these assets.

1.1.2 RATIO ANALYSIS INTRODUCTION

Ratio analysis is the examination and understanding of numbers in financial accounts (i.e.,
profit and loss account, balance sheet and fund flow statement, etc.). It is a technique to
compare one with another. It allows consumers such as shareholders, investors, creditors,
government and analysts to better understand financial statements. Ratio analysis is a
powerful analytical technique for assessing an organization's performance. Accounting ratios
are used to indicate symptoms such as blood pressure, pulse rate and body temperature. The
doctor analysis this information to determine the source of the disease. Similarly, the
financial analyst must examine the accounting ratios to ensure the financial health of the
company.

1.1.3 MEANING OF FINANCIAL RATIOS

Accounting ratios, as mentioned earlier, are an essential tool for analysis financial accounts.
Ratio is a mathematical number that is denoted by fraction, percentage, percentage, or the
number of times the connection between two or more values. The accounting ratio is a
number calculated by referring to two accounting numbers obtained from financial
statements. It should be noted that the accounting ratios show whether there are any links
between the accounting numbers obtained from the financial statements. The ratios are
derived numbers, and their effect largely depends on the base numbers used to calculate
7
them. As a result, if there are errors in the financial statements, the resulting statistics in terms
of ratio analysis also illustrate the case. Furthermore, the ratio should be calculated using
really correlated data. The ratio calculated by multiplying two unconnected integers is

useless.

1.1.4 TYPES OF RATIOS

Ratios are divided into two categories:

(1) Traditional classification and

(2) Job classification.

Financial accounts specifying ratios have traditionally been the basis for classification. How
are proportions classified based on:

Profit and Loss Ratio Statement: The profit and loss statement ratio is a two-variable ratio
to the profit and loss statement.

Balance Sheet Ratios: When two variables are derived from the Balance Sheet, the ratio is
referred to as Balance Sheet Ratio.

Compound Ratios: The compound ratio is the ratio of the profit and loss statement to one
variable and another variable calculated from the balance sheet.

Although accounting ratios are derived using data from financial statements, classification of
financial statements is rarely used in practice. It should be noted that the primary objective of
accounting is to shed light on financial performance (profitability) and financial condition
(the ability to produce and invest money wisely), as well as changes in financial position (the
possible interpretation of changes). activity level).

8
1.1.5 CORE ELEMENTS OF FINANCIAL MANAGEMENT
Planning and budgeting:

Linking an organization's goals or strategy to the budgeting procedures of planning and

monitoring, as well as determining any necessary actions.

Financial reporting:

Use of annual financial statements, reporting to the board of directors and other stakeholders
(those who have an interest in the company, such as employees, customers, beneficiaries, the
general public, and funders).

Accounts record-keeping:

Ensure proper records of transactions are maintained to provide raw data for information
submitted to the Board of Directors, directors, and other employees.

Financial controls:

Internal financial controls protect the company's assets by reducing the risks of
fraud and theft.

1.1.6 FINANCE FUNCTIONS:

● Estimates capital requirements.

● Makes the choice of sources of funds.
● Disposal of surplus.
● Controls finances.
● Tax planning and protection of assets.

9
● Manages the cash flows.
● Decision on capital budgeting.

10
 10

1.2 PROJECT LAYOUT

CHAPTER-1: INTRODUCTION

In this section we will quickly explain what we have done with ratio analysis.

Ratio analysis refers to the testing and interpretation of figures in financial accounts
(i.e. Profit and Loss Account, Balance Sheet, Fund Flow Statement, etc.). It is a
technique of comparing one person to another. It allows consumers such as
shareholders, investors, creditors, government and analysts to better understand
financial statements.

CHAPTER 2: ORGANIZATION PROFILE

Detailed information about the organization.

Name : APARNA ENTERPRISE

LIMITED
Address : PEDDAPURAM
Telephone : 08852243366
Website : www.aparnaenterprisesltd.com
Aparna Enterprises Limited, which is known throughout the world for establishing
standards in technology, research, design, and quality, provides a broad variety of
construction material products. When it comes to providing new era goods, AEL
stands for path-breaking breakthroughs with over two decades of building excellence.

CHAPTER 3: PROJECT BASIS

Project Description:
● What are the root causes of changes in sales?
 ● What are the major effects on the balance sheet?
● How can the enterprise increase profit?

CHAPTER IV: DATA HANDLING

For this research, the data display techniques are mostly mathematical tools, tables,
and charts. The following are some of the most significant aspects of tools:

● Tables
● Graphical Representations
● Liquidity Ratios
● Solvency Ratios
● Profitability Ratios
● Activity Ratios

CHAPTER 5: SEARCH RESULTS AND DISCUSSION

Work has brought us to the last stage of this care as body projects. In this work, the argument
was addressed. Economic facts from the report and the results of the
responses to the questions determine the conclusion.

This policy applies solely to data collected by the government, including extensive
tables of data on a form, and is limited to that fist. It's hazy, and it's easy to boost it,
particularly for setting cue joints and chapters split into parts and subsections for the
project. This is the ideal location for construction projects.

12
CHAPTER 6: LIMITATIONS, SUGGESTIONS
AND CONCLUSIONS

According to the study's statistical findings, this should be encouraged wherever

feasible. There is a wide variety of thinking styles on display. As a result, zid includes
the other half of the rationment and would be desirable. The final phase of the
framework process reveals the overall interest in the area.

Including an appendix with the present situation is something that can be shown by people
who read it instead of the text of the statements. He had been recognized as
the measure of the association in its partner.

13
 CHAPTER-2

ORGANISATION PROFILE

2.1 INDUSTRY PROFILE

2.1.1 INTRODUCTION

The word "porcelain" comes from the Greek word "ceramos", which literally means "pots". It
is derived from the Sanskrit word meaning "burning", but was originally used to refer to
"burning objects". Of course, the tiles are handmade, hand-shaped and hand-painted.
However, the ceramic tiles used in many pieces are no longer handmade or painted by hand.
In fact, ceramic tile is used in the bathrooms and kitchens of his contemporary home, as well
as in every other important area. Ceramic tiles are basically a health product, proven by their
widespread use in the bathrooms and kitchens of ordinary Indian homes, as well as in medical
centers, laboratories, milk stands, schools and public places. Ceramic tile is considered a
"utilitarian product" and popular home appliances are rapidly changing from traditional
mosaic to granite or marble for a variety of reasons, including installation simplicity,
flexibility, low cost and most importantly cleanliness.

The main product segments are wall tiles, floor tiles, vitrified tiles and porcelain tiles. For wall
and floor tiles and glazed/ceramic tiles, the market share is 35 percent, 53 percent and 12
percent, respectively.

The manufacture of ceramic tiles has increased to three million tons annually. The potential
looks enormous in light of recent booms, particularly in housing management, retail,
information technology and business operations. The ceramic tile business has achieved
consistent growth of 12-15 percent over the past several years. In the past five years, nearly Rs
2,000 crore has been invested in the ceramic sector, which employs 550,000 people, of whom

14
50,000 are women. Considering the per capita consumption of ceramic tiles in India, the
potential is enormous. Compared to countries such as China, Brazil and Malaysia, the
area is now 0.5 square meters per retiree.

2.1.2 HISTORY AND DEVELOPMENT OF CERAMIC

CULTURE

According to legend, the first clay tablets were made in Palestine seven to eight thousand
years ago. Several known sources indicate that the history of tiles (and the use of tile
coverings on walls and floors) was discovered in Egypt in the fourth millennium BC (4000
BC).

Tiles were often used to decorate many Egyptian homes during this period. The first bottles
were blue, covered with copper and dried or baked on clay bricks.

At that time, porcelain was also known to be present in Mesopotamia. White and blue striped
motifs appeared on these ceramics, which later became more distinctive patterns and colors.
Later, during the Shang-Yin Dynasty in China, beautiful white stoneware with ancient
Chinese lacquer (1523-1028 BC) was produced.

Decorative tiles were widely used in Persia, Syria, Turkey and North Africa by 900 CE and
the experience of producing and manufacturing ceramic tiles spread throughout the region.
With the increase in transportation and communication, the use and spread of tiles in other
areas also increased. As a result of wars and land grabs, art grew faster.
When the Romans conquered some parts of Western Europe, they introduced the tile
industry. The lower countries of Northern Europe received the technology via Persia, but the
Moors conquered Iberia and brought with them the African Court (Spain). Decorative
terracotta tiles reached the Spanish occupation of the New World, where they were used
mainly to decorate the churches of newly established cities.

15
By the end of the 12th century, the use and manufacture of ceramic tiles had spread

16
 throughout Italy and Spain, as well as the rest of Europe. Until that time, it was mainly used to
decorate the floors of cathedrals and churches. This skill became extinct in Europe after the
Reformation in the 16th century. However, decorative wall tile art persisted in Turkey,
revitalizing the Middle East, and Delft tile art did not exist in the highlands.
The people of North and South America established a kind of tile industry at some point. After
the theft of Dutch technology, the first decorative tiles found in the North American colony
were imported from Northern Europe, i.e., England. Tiles for everyday use in the colonies
were expensive and thus only found in the homes of the wealthy.
Similar to tile decoration techniques, tile decoration has evolved over time. In the Islamic era
of Persia, for example, all kinds of tile decoration were ideal. The production of ceramics and
decorations in various countries and cities around the world has reached an amazing level.

The tile mosaics of Spain and Portugal, the Italian Renaissance floor tiles, the walls of
Antwerp, the emergence of tile symbols in the Netherlands, and thus German ceramic tiles
are all significant milestones in the history of ceramic tiles.

For the most part today, ceramic tiles are not handcrafted or hand painted anywhere in the
world. Due to the use of automated production methods, the human hand does not enter the
picture until the tiles are installed. They can be used in almost unlimited variety and you don't
need to be wealthy to own them. Ceramic tiles are found in commercial buildings, where
aesthetics and durability are important, especially in the hallway and bathroom areas.

2.1.3 INDUSTRY CHARACTERISTICS

Working Capital Requirements

The raw ingredients must be kept ahead of time. Because mining is not feasible throughout the
season, clay must be stored for at least four to six months. It may also be heavier to carry at
that period owing to absorption. The expensive glazes, which are also imported, must be
kept on hand for approximately four months.

17
Institutional caterers have credit terms of 90 to 100 days, compared to 30 to 35 days for those
operating in the retail sector. Because the business caters to a wide range of preferences, tiles
of various sizes and colors must be supplied in at least 20 to 25 patterns. These figures

indicate that the working capital cycle is about 7 and a half months.

Expensive in terms of capital

The new factory would need a minimum investment of Rs. 1.60 crore. The fact that the asset
turnover ratio is low 0.70 indicates that the capital intensive nature of the business. Capacity
utilization should also be as high as 75 percent break-even.

Expends a lot of energy and fuel

These account for about 20% of the total production cost. Since the wall tiles are fired twice,
they need more energy. The most common fuels used to burn tiles are natural gas, LPG and
naphtha. Natural gas is cheaper, followed by naphtha and LPG. Players like Khazaria and Bell
in the North and West now have an edge as natural gas is available through the HPG
pipeline.

Markets are close by.

Because long-distance transportation is expensive and profit is based on volume, proximity to
markets is critical to profitability. The north is dominated by KAJARIA and SPL, while the
west is dominated by H&R JOHN SON and BELL, and the south is shared by
MURUDESHWAR, REGENCY, and SPARTEK.

Image/Distribution Network of a Brand

A strong brand image is unquestionably a barrier to entrance. A strong dealer network not
only helps to popularize the brand, but it also preserves profits in the retail sector, where
realizations are quicker.

Techniques of Production
The modern single firing and the older double rapid firing methods are the two main
18
techniques utilized. A third double rapid firing system is also utilized, although it is used less
often. In most cases, multiple burning is used, and each batch takes about 45 hours to
complete. The differences in size and color are insignificant, the strength is greater, the gloss
is higher, but the fuel consumption is higher, which leads to a higher manufacturing cost. In
double shooting, there are three more options. Yes they are.

1. ROLLER/ROLLER
2. TUNNEL/TUNNEL
3. TUNNEL/ROLLER

Continuous manufacturing is the goal of roller technology. The Tunnel technique, on the other
hand, is for batch manufacturing. The processing time is shortened to just 45 minutes, and fuel
consumption is also decreased, since it is typically an unending operation. Roller methods are
often used to produce floor tiles. For the first time, the single Roller method was used to
manufacture floor tiles in India. The firing technique of wall tiles may be doubled. For larger
tiles, roller technology is utilized, whereas for smaller tiles, tunnel technology is used.

Market Structure
The international ceramic tile market is worth about Rs 80,000 crore and the exports market
amounts to Rs 21,000 crores approximately. The exports are growing at the rate of 8% to
10%. India with an estimated market size of Rs 11.31 crores presents an even more dismal
picture with a share of 0.4% of the global market. The exports present an even more dismal
picture with a share of 04%. Italy and Spain dominate the exports with 19% and 13% of the
worldwide installed capacity.

The organized sector in India accounts for 85% and the rest is the unorganized sector. The
unorganized industry is limited to the segment of wall tiles and is exempt from excise charges.
The continuous lowering of excise by the government on the ceramic tiles and the
optimum. As a result many within the industry went on a capacity addition spree.

19
Application
Ceramic tiles were previously used in the bathrooms as luxury items. When exercise duties were
high, the ceramic tiles have come a long way now being used for floor and wall
coverings in drawing rooms, kitchen and offices and even as decorative hangings, they are
hygienic, easy to clean, scratch proof, fireproof, resistant to wear and durable.

Segments and Market Shares

● Mosaic Tiles (90 percent) o Mosaic tiles are used to adhere foundation tiles. o
Mosaics are made from marble fragments.

o Mosaic is inexpensive, with prices ranging from Rs 5 to Rs 14

per square foot.

o Mosaic tiles have a limited lifespan. o Mosaic tiles are man-

made decorations.

● Ceramic Tiles (5% of total) o Clay basic tiles are used to make ceramic tiles.
o Ball clay, Feldspar, Dolerite, and Chips are used to make ceramic tiles. o
Ceramic tiles range in price from Rs 15 to Rs 25 per sq. ft. on average. o
Ceramic tiles are man-made and stand in the center of the run.

● Marble/Granite Tiles (5% of total) o Marble is a natural stone, and it and

mosaic tiles are neither acid or alcoholic resistant. o Marble tiles are expensive,
costing up to Rs 20 every 200 square feet. o Marble is not a man-made material,
and marble tiles have a lengthy lifespan.

2.1.4 TYPES OF CERAMIC TILES:

Based on the method of manufacture, water absorption and surface finish, they are classified
as under
1. GLAZED & UNGLAZED

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2. VITRIFIED

1. Glazed and Unglazed

(a) Tile’s surface has a different composition than the body since the surface of the tiles is
coated with glaze before firing.

(b) Unglazed tiles are not coated with any glaze.

2. Vitrified
It features a dense and impervious body. The color of the tile and the body depend on the tiles.
The surface finish can be met or natural and they are polished in order to get a glossy
surface.

2.1.5 COMPETITORS
Below are the main competitors that indicate their company names and the name of their
manufacturing specialty product.

1. H&R JOHNSON

In the wall tile sector, it is the oldest and has the highest market share. With the largest dealer
network of 600 and designs could ensure that it continues in its leadership status.

1. SPA

The second largest agent network with a long presence in the industry and 400 orders, the second
largest share in the wall tiles sector, the two most used factories in the North and West,
which translates economically in transportation.

21
3. KAJARIA CERAMICS

It is the only segment player with good market share in both floor and wall tiles Segment. Its
plant being located in the higher dormant regions of north and west, the transportation costs
reduced, these advantages will help the company to price its product. India’s first tiles
company with ISO: 9002 Certification.

4. SPARTEK CERAMICS
Once a pioneer in its field, it is now in a sad state, with acquisition of land near India. Delhi
based international ceramics landed the company in a financial mess. With the good brand
images and with a dealership network of 300 it has a long road to go.

2.2 COMPANY PROFILE

2.1.1 ABOUT
Aparna Enterprises Limited (AEL) is a subsidiary of the Aparna Group. Established in 1990,
AEL has the largest market share in South India with its diversified portfolio in the building
materials industry such as RLC (Ready Mix Concrete), UPVC Window and Door Systems,
UPVC Profiles, Tiles, Sanitary Ware, Kitchens and Aluminum Window. Facades and door
systems. Over three decades, AEL has been associated with many important projects and is
known worldwide for setting standards in technology, research, design and quality.

What started as a ceramic tile distribution business has become a market leader in many areas.
Over the past 30 years, AEL has established itself as one of the most innovative and
recognized building materials company in India.

Not only because of the high quality of our merchandise, but also because of our workers'
commitment to providing excellent customer service and their willingness to provide
innovative solutions to problems.

22
Although our approach in this regard has not changed over the past three decades, some
things have changed, such as the different types of building materials we currently offer.

When you look into the past, it's amazing how quickly things change. While nothing can
replace our commitment to customer service, we have always recognized the benefits of new
technology. Even after 30 years we are still at the top of our game.
AEL now offers a wide range of high-quality, high-quality products to industry leaders,
selectors, contractors and other stakeholders. Any specification standard that meets all
protocol standards can be met by AEL. As we celebrate our 30th anniversary this year, we
look forward to continuing your congratulations and innovations so you can create faster,
better and smarter.

23
2.2.2 HISTORY
Aparna Group is an Indian company that specializes in the manufacture, trade, manufacture
and manufacture of building materials. Aparna set, turnover around Rs. With a staff of over
1,700 crores and more than 4,000, it is known for its innovations in the distribution of new
age goods.

ANSWER (Aparna Novel Society for Welfare and Research) is a charitable arm of the
Aparna Group that strives to nurture, educate, and empower the less fortunate.

2.2.3 VISION
Aparna Enterprises aims for excellence and quality as a leader in all of its products and services.
Aparna Enterprises wants to change the real estate industry by setting new
standards. The company wants to build a future oriented with the following focus:

Providing high quality building materials while continually improving industry standards;
To deal with difficult issues and provide normative answers on all aspects of building
materials.

24
To become the preferred owner of the industry by hiring, nurturing and motivating the best
people.

To introduce world-class technology to America and strive for technological advancement on

a continuous basis.

2.2.4 BRANDS
Aparna Enterprises Ltd. (AEL), via a variety of enterprises in the building-materials industry,
has the highest market share in South India. The firm promotes research, innovative designs,
and high-quality goods in collaboration with premier technology suppliers throughout the
world. Seven significant brands are currently part of the company's portfolio.

Vitero Tiles

Vitero offers never-before-seen designs and colors in the Indian tile industry. The company
creates high-quality floor and wall tiles with consistent size, color, and pattern. Vitero
produces Double Charged Vitrified Tiles utilizing the latest nanotechnology in the world's
biggest gas-fired kiln, which is 265 meters long.

Advanced Feeding Systems, State-of-the-Art Gear, and Next-Generation Technology: With

advanced feeding systems, state-of-the-art gear, and next-generation technology, there are no
sacrifices on quality or consistency. Because of the Nano polishing, Vitero tiles are
consistent, durable, and lustrous.

RMC Aparna

Aparna RMC has been a pioneer in the production of ready-mix concrete (RMC) in South
India for the past decade. As an ISO 9001 certified company, our goal is to provide our
customers with the best quality products possible. With their immense knowledge of all
aspects of building materials, our efficient team of experts has allowed us to expand far

25
beyond just concrete

26
manufacturers. Their determination to achieve and innovate has allowed us to design concrete
and concrete technology solutions to meet the needs of our clients,
making us into our classroom.

Aparna Craft is a company based in India.

Aparna-Craft is a joint venture with the Aparna Group of India and Hong Kong's Craft
Holdings, a world leader in the design and engineering of exterior facades. The goal of the
association is to bring world-class exteriors and facades into reality. Aparna Enterprises
Limited and Kraft Holdings of Hong Kong have established Aparna-Craft Exterior Limited as
a joint venture. One of the world leaders in craft collectibles, Hong Kong, facade design and
project architecture.

Venster Aparna

Aparna Venster is one of the most reputable window and door companies in India,
specializing in bespoke UPVC window and door solutions. Aparna Venster has installed
nearly 1.5 million UPVC windows and doors. Provides comprehensive surveying, design,
manufacturing, delivery, installation and maintenance services. Aparna Venster's construction
facilities in Hyderabad and Bangalore are equipped with the latest German manufacturing
technology. Aparna Venster's UPVC window and door systems meet the most stringent
European manufacturing standards thanks to advanced technology and precision engineering.

Okotech

The Aparna heritage counts Okotech as a valued partner. We are India's fastest growing uPVC
brand because to our strong dedication to producing technology-driven profiles. The aim has
always been to design high-quality uPVC profiles that are simple to manufacture.
Transparency, expertise, and customization are the characteristics that distinguish us from our
competitors. Our partners benefit from Aparna's assurance.

27
Aparna Uni-space

Aparna Uni-space is a one-of-a-kind premium sanitary ware shop with an international vibe.
Uni-space, a forerunner in its field, not only sells bath space items, but also exhibits the most
up-to-date models. Uni-space has the largest customer configuration lounge in Hyderabad,
setting the benchmark for modern exhibition and sale of Bathspace premium goods. This
enables potential consumers to choose precise fittings as well as modify and personalize
items to match their individual needs and wants.

Aparna Crusher is a character in the film Aparna Crusher

Under the Aparna Crusher brand name, Aparna Enterprises plunged into a quarry of metal
gravel such as crushed robot sand / metal chips for road and construction equipment. Since
then, we have become one of the most trusted crushing plants in the states of Telangana and
Andhra Pradesh.

Alteza

Aparna-Craft offers you customized aluminium window and door systems via a joint venture
between Aparna Enterprises Limited, a major producer of construction materials, and Craft
Holdings, Hong Kong, a global leader in façade and exterior design and engineering. Whether
you need a single aluminum window or a sliding door for a penthouse apartment, a complete
glazing package for a dream villa, or hundreds of aluminum windows and doors for a new
construction project, each product is precisely designed for you. All Altera products are
handmade in our state-of-the-art facility in Hyderabad, utilizing only the highest quality
materials and hardware components and sophisticated German technology. They are
subjected to extensive testing to guarantee that they meet the most stringent international
requirements. Alteza provides a full range of aluminium window and door services, including
design, manufacture, and installation. Alteza brings a high level of commitment, expertise,

28
and responsive customer service to the table.

Ethics & Compliance

Aparna prides itself on outstanding quality management, backed by its experience in the
business over the past 30 years. Aparna is a well-known business leader who knows how to
run a successful company. The company is committed to providing high quality products
and services. Aparna Enterprises Limited does not condone or engage in any unethical or
illegal conduct. The basis of AEL's philosophy is that operations should be transparent.

2.2.5 REWARDS

29
 30

CHAPTER-3

BASIS OF PROJECT

3.1.1 PROBLEM DESCRIPTION

In spite of the fact that, in this examination we attempt to discover answers for these issues.

● What are the root causes of changes in sales?

● What are the major effects on the balance sheet?
● How can the enterprise increase profit?
● How can operational expenses be controlled?

3.1.2 THEORETICAL FRAMEWORK

Meaning of Ratio:

A ratio is a basic arithmetic statement that expresses the relationship between two numbers. It
can be defined based on quoting two mathematical expressions.

According to Wicksam, the handbook of Kill and Bedford Accountant "ratio" refers to the
quantitative correlation between two numbers.

Ratio analysis is the act of recognizing and expressing the relationship between a subject and
a group of subjects in a statement.

Patty c. According to management accounting, this ratio assists management in the basic
functions of evaluation, planning, coordination, control and communication. It is helpful to
understand a company's liquidity, solvency, capital structure, and profitability.

Financial data is backed by ratio analysis that looks for and understands numerical
relationships. A ratio is a statistical measure used to determine the association between two or
more variables in a data set. This correlation is expressed as a coefficient or percentage.
Ratio analysis is a useful technique of financial analysis. The financial analysis ratio acts as a
standard for the company. Absolute accounting statistics for a financial statement provide
meaningful knowledge of financial performance and facts, as well as the ability to make
qualitative judgments about a company's financial success.

Ratio analysis is a method of applying ratios to a budget to determine a company's strengths

and weaknesses, as well as its past performance and current financial condition.

The relevant factor for ratio analysis comes from the fact that the related data are compared. It
doesn't matter to one person, but when it comes to meeting the others, it makes sense. This
leaves great doubt in the case of the corresponding numbers. The ratio can be expressed in
three ways:

Pure ratio: The net ratio, often called the normal ratio, is calculated by dividing one whole
number by another. For example, a company has current assets worth Rs. 200,000 and its

current liabilities are Rs. 100,000, the ratio of “current assets to current debt” is 2:1.

Rate approximately many times: Approximately several times the rate: In this type,
the percentage of imprints of a number compared to another is calculated. For example, the
company’s credit sales per year are Rs. If 200,000 / 40000 = 5 times, the answer is yes. This
indicates that credit sales are five times higher than lenders.

Percentage: The relationship between the two numbers in the hundreds is shown in this
picture. For example, if the company has a capital of Rs.1,000,000 and its share capital of

Rs.2,000,000, the profit-to-capital ratio is 200,000 / 1,000,000 * 100 = 20%.

29
ADVANTAGE OF RATIO ANALYSIS:

1. It is useful in analyzing the financial statements.

2. Useful in comparative research.
3. It helps to identify weaknesses in the company.
4. Helpful in pointing out.
5. Evaluate the direction of the company.

30
LIMITATIONS TO RATIO ANALYSIS

Standard for comparison:

Ratio of a business has significance only when they are compared with certain
standards and it is always a difficult task to establish an acceptable benchmark.

Company differences:
The terms of the two companies are never the same. Likewise, the variables that
affect the success of the business in one year change in another year. In this way, the
comparison of the ratios of the two companies becomes difficult and useless when
working in different situations.

Price Level Challenges:

Description and comparison of ratios als0 is invalid by the variable value of money; A
change in the price level significantly affects the correctness of comparing ratios
calculated for different periods of time.

Different definitions of a variable:

Comparisons are sometimes difficult due to differences in definitions. Phrases such as
gross profit margin, operating profit, net income, etc., do not have exact meanings
because there is a lot of variation in practice on how they are estimated.

Changing circumstances:
The balance sheet fails to represent average or normal conditions because it is
produced simultaneously. It ignores short-term changes in assets and stocks that occur
during the two dates of the covered balance sheet.

Differences in Accounting Techniques:

31
There are different differences in the accounting methods used by different companies that
affect the comparison of cash accounts differently. Notary Public Practices and Written
Assets - Deductions, charges, expenses, etc. vary from company to company.

Types of ratios:

Ratios are usually broken down into different groups based on the financial activity or
performance to be evaluated. Parties interested in financial analysis include short- and long-
term lenders and the solvency of the business. Long-term lenders to owners and management.
On the other hand, there are short-term concerns about the long-term solvency and
profitability of the business. The business owner is concerned with the company's profitability
and financial health. Management is concerned with analyzing every aspect of increasing the
profitability of the company. To meet the needs of different customers, the
proportions are divided into four main categories

1) Liquidity ratios
2) Leverage Ratios / Capital Formation Ratios
3) Operating ratios
4) Profitability ratios

1) Liquidity Ratios:

Liquidity refers to the ability of a company to fulfill its commitments within the short term,
typically one year. The liquidity ratios indicate the short-term financial health and solvency of
a company. In reality, analysis of liquidity requires the creation of cash budgets and cash and
funds flow statements. But liquidity ratios by creating a connection between cash and other
current assets to current liabilities offer fast gauges of liquidity.

A company should make sure that it doesn’t suffer from lack of liquidity and also that it
doesn’t have excess liquidity. The inability of a business to fulfill its commitments owing to

32
lack of

33
adequate cash may result in a bad credit rating, loss of creditor trust. A extremely high degree
of liquidity is undesirable, since idle assets yield nothing. The firm's finances are likely to be
needlessly involved in current assets. Therefore it’s essential to create a proper
balance between excessive liquidity and lack of liquidity.
The most frequent liquidity ratios which reflect the degree of liquidity or absence of it are the
following

a) Current Ratio
b) Quick Ratio
c) Cash Ratio
d) Net Working Capital Ratio

a) Current Ratio:
Current ratio is calculated by dividing current assets by current liabilities

Current Ratio = Current Assets/Current Liabilities

The company's current assets represent assets that can be converted into cash in a short period
of time, usually not exceeding one year, and include cash and bank balances, marketable
securities, raw material stocks, semi-finished and finished goods, receivables and bills
receivables and prepaid expenses.

Current liabilities include lenders, receivables for debentures, accrued expenses, short-term
bank loans, income tax liabilities, and long-term loans ending in the current year. Current
ratio is a measure of a company's short-term solvency. It shows the current asset capacity in
rupees for every rupee of current debt. A ratio of more than one indicates that the company
has more current assets than current liabilities.

b) Quick Ratio:
Quick ratio, often called Acid-test ratio creates a connection between quick or liquid assets
and current liabilities. An asset is liquid; it may be turned into cash instantly or fairly soon

34
without

35
loss of value. Cash is the most liquid asset. Other assets that are regarded to be relatively
liquid in fast assets include debtors and bill received and marketable securities. Inventories
are regarded to be less liquid since they usually need some time for conversion into cash and
their value also has a propensity to fluctuate. The quick ratio is determined by

dividing Quick assets by current liabilities.

Quick ratio= (Current Assets - Inventory)/Current Liabilities

Quick ratio may be a rigorous measure of a firm ability to service short term liabilities.

c) Cash Ratio:
Cash is the most liquid asset; The security analyst can analyze the cash ratio and its
equivalent current liabilities. Business investments or marketable securities equivalent to
cash; Therefore, it is included in the cash ratio calculation.

Cash ratio = (cash + marketable securities) / current liabilities

d) Net Working Capital Ratio:

The difference between current assets and current liabilities other than short-term debt is
called net working capital or net current assets. Net working capital is sometimes used as a
measure of company liquidity. Of the two companies, the company with the highest working
capital is believed to have the best potential to fulfill its current responsibilities. It is
necessary for the measure of liquidity to be a relationship, and not just a distinction between
current assets and current liabilities. However, Net Working Capital Company measures
potential cash reserves. Often related to net assets (or working capital) (or working capital)

36
Net Working Capital Ratio = Net Working Capital / Net Assets or Working
Capital

Note: The liquidity ratio is misleading because current assets and current liabilities fluctuate
rapidly.
2) LEVERAGE RATIO /CAPITAL STRUCTURE RATIOS:

Leverage refers to the use of borrowed capital as an inexpensive financial resource and is a
risky form of financing. Leverage ratios help estimate the risks arising from the use of
borrowed capital.

Short-term lenders, such as lenders and suppliers of raw materials, are more interested in the
company's existing ability to repay the loan. On the other hand, long-term lenders like bond
holders, banking institutions, etc. They are more concerned with the long-term financial
strength of the company. In fact, companies have strong short and long-term financial
positions. Leverage ratios or capital structure are calculated to assess the long-term financial
position. These ratios reflect the mix of funds provided by owners and lenders. There must be
a mixture of debt and equity in financing the assets of the company. Therefore, leverage ratios
are calculated to assess the financial risk and the company's ability to use debt for the
benefit of shareholders.

Leverage ratios are calculated using balance sheet items to find out the discount rate on the
total financing. Leverage ratios are also calculated from the profit and loss factors by
estimating the amount of operating profit sufficient to cover fixed costs.

Here are the ratios of the different levers:

a) Debt ratio
b) Debt to equity ratio
c) Debt to total funds ratio
d) Capital to net worth ratio

37
a) Debt Ratio:
Many debt ratios may also not assess a company's long-term solvency. Thus the debt ratio
may be calculated by dividing total debt by capital employed or net assets. Total debt consists
of short- and long-term borrowing from financial institutions, debentures/debentures, late
payment agreements to purchase capital equipment, and bank borrowing. General deposits
and any other interest-bearing loans. The capital employed will include total debt and net
worth.

Debt Ratio = Total Debts / Total Assets

Note: Capital = Net Assets

Net Assets = Net Fixed Assets + Net Current Assets

Net Current Assets = Current Assets - Current Liabilities

b) Debt to Equity Ratio:

The debt-to-equity ratio shows the relationship between long-term debt and net wealth. Stay
long for responsibilities that mature after one year. These include bonds, mortgage loans,
bank loans, loans from financial institutions and public deposits.

Equity Ratio = (Long Term Debt or Total Debt) / Net Worth

c) Debt to Total Funds Ratio:

The debt-to-total funds ratio is a variant of the debt equity ratio and provides the same signals
as the debt equity ratio. In the ratio, debt is expected in proportion to the total finances, i.e.,
equity and debt. In other words, the percentage of long-term loans should not be greater than
the total funds.

38
A larger percentage indicates the burden of regularly paying large amounts of interest fees
and repaying huge amounts of loans when due. Paying interest can become difficult if
earnings decline. It is preferable to have a lower ratio from the standpoint of long-term
solvency.
Debt to Total Funds Ratio = Long Term Loans / (Shareholder Funds +
Long Term Loans)

d) Capital employed to net worth ratio:

The capital employed to net worth ratio also shows the relationship between debt and equity.
By this ratio, one can determine the amount of money being given jointly by the lenders and
owners for each rupee of the owner’s contribution.

The ratio of capital employed and net worth or net assets and net worth provides value.

Capital employed to net worth ratio = Working capital / Net worth

3) ACTIVITY RATIOS:

Operating ratios are used to estimate a company's ability to manage and use its assets. These
ratios are also called turnover ratios because they show the speed at which assets are
converted or converted into sales. Operating ratios are the relationship between sales and
assets. A good balance between sales and assets usually indicates that the assets are managed
efficiently. An increased turnover shows a better use of capital or resources and gradually
leads to higher profitability.

The most commonly used activity ratios are as follows:

a) Inventory turnover ratio

b) Debtors turnover
c) Total asset turnover
d) Turnover of fixed assets
39
e) Current asset turnover
f) working capital turnover
a) Inventory turnover ratio
Inventory turnover shows a business's ability to produce and sell its goods. This is determined
by dividing the price of goods sold by average inventory. Average Inventory is the average of
the open and close outstanding balances.

Inventory Turnover Ratio = Selling Price / Average Inventory of Goods

Here, Price of Goods Sold = Net Sales - Gross Profit \ Average Inventory = (Opening Stock +
Closing Inventory)/2

b) Debtors Turnover (Accounts Receivable):

The business provides products for cash and credit. Credit is used as a marketing strategy by
many companies. Credit to a company account is created when the company provides credit
to the account of the customer (borrowers). Borrowers are expected to be converted into cash
in a short period of time and included in current assets. The liquidity condition of the
business largely depends on the quality of borrowers.

Debtor turnover is determined by dividing credit sales by ordinary borrowers. Borrower

turnover shows the number of times borrowers achieve turnover in a year. In general, the
higher the sales value of the borrower, the more efficient the credit management.

Debtors Turnover = Credit Sales / Average Borrowers

For foreigners, information on credit sales and opening and closing balances of borrowers may
not be available. So, the borrower's total sales can be divided by the borrower's year-end
balance:

c) Total Asset Turnover:

40
Some analysts prefer to calculate total asset turnover rather than net asset turnover. Total
Asset Turnover Ratio refers to the company's ability to generate sales from all financial
resources allocated to total assets.

Total Asset Turnover = Sales / Total Assets

d) Turnover of Fixed Assets:

Fixed asset turnover calculates sales for every rupee invested in fixed assets. The ratio
measures the ability to depreciate fixed assets

Fixed asset turnover = Sales / Net fixed assets

e) Current Asset Turnover:

The current asset turnover ratio measures the rupee sales of investments in current assets.

Current asset turnover = Sales / Current assets

f) Turnover of Working Capital:

The company also wants to sell net current assets (or net working capital). He can calculate

net working capital turnover by dividing sales by net working capital. Working

Capital Turnover Ratio = Sales / Net Working Capital

4) PROFITABILITY RATIOs:

A company should earn profits to survive and grow over an extended period of time,

profitability reflects the final result of business operation. Profit must be earned to sustain the
operation of the business to be able to fund investors and for expansion and growth and to

contribute toward social overheads for the welfare of the society.

41
Profit is the difference between revenues and expenses over a period of time. Profit is the
ultimate output of the corporation and it will have no future if it fails to form sufficient
profits. The profitability ratios are calculated to measure the operating efficiency of the
corporation. Besides management of the corporation, creditors and owners are also curious
about the profitability of the firm. Creditors want to urge interest and repayment of principal
regularly. Owners want to urge a required rate of return on their investment. This is possible
only when the corporation earns sufficient profits. The efficiency and the success of a
business are often measured with the assistance of profitability ratio.

The profitability ratios are as follows:

a) Gross Profit Margin

b) Net Profit Margin
c) Operating Net Profit to Net Sales
d) Operating Expenses Ratio
e) Return on Investment
f) Return on Equity

a) Gross Profit Margin:

The first measure of profit in relation to sales is the gross profit margin (or gross margin ratio
only) (or gross margin ratio). This is determined by dividing the gross profit margin by sales.

Gross Profit Margin = (Gross Profit / Net Sales) x 100

Here, Gross Profit = Net Sales - Price of Goods Sold

Gross profit margin reflects maintenance production per unit of goods. This ratio shows the
average gap between the price of products sold and sales revenue. When we subtract the gross
profit margin from 100 percent, we get the percentage of the price of goods sold for

sale.

42
b) Net Profit Margin:
The net profit is formed when operating expenses, interest and taxes are deducted from the
gross profit. The net profit percentage is calculated by dividing profits after tax on sales.

Net Profit Margin = (Profit After Tax / Net Sales) x 100

Net profit establishes the relationship between net profit and sales and shows the efficiency of
management in the production, management and marketing of goods. This ratio measures the
company's total ability to convert every rupee of sales into a net profit.

b) Maintaining net profit for net sale:

Net sales management is determined by net sales dividing net operating profit by net sales.

Net operating profit for net sales = (Net profit / Net sales) x 100 Here,

net operating profit = total operating costs and profit

c) Operating Expenses Ratio:

The operating cost ratio describes the differences in the profit margin ratio (sales from EBIT).
This ratio is calculated by dividing operating expenses by earnings.

Operating Cost Ratio = Operating Expenses / Net Sales

Operating costs include price and sales fees for products sold, and general and administrative
costs. The operating ratio shows the average total changes in costs affecting a portion of the
cost ratio through various variables such as internal factors, labour and managerial efficiency,
and external and uncontrollable external factors.
investment profitability:

d) Return on Investment (or) Capital Employment:

43
The term investment refers to total assets or net assets. The money used in net assets is
referred to as employing capital. Net assets are equal to net fixed assets + current assets
minus current loans excluding bank loans. Investment return is determined by dividing
pre-interest income by tax capital.

This ratio shows the company's overall profitability. This ratio is usually a percent and is
sometimes referred to as the 'rate of return' or 'return on capital'.

ROI = (PROFIT BEFORE INTEREST & TAX / CAPITAL EMPLOYED)

x 100

e) Return on equity:
Return on equity is of significant importance to equity owners. Ordinary stockholders are
entitled to the remaining earnings. If the rate of dividend is not set the profits may be paid to
shareholders or kept in the company. A return on shareholders' equity is computed to assess
the profitability of the owner's investment. The return on equity is net profit after taxes
dividend by shareholders equity or net value.

Return on Equity = (Net Profit After Tax/Net Worth or Shareholders

Equity) x 100

The shareholders equity or net worth will contain paid up share capital share premium and
reserves and surplus minus cumulative losses. Return on equity evaluates the profitability of
equity capital invested inside the company. It is extremely essential to assess return on equity
since it represents the productivity of the ownership capital used in the form. It is affected by
many variables including earning power debt ratio and average cost of loan funds and tax
rate.

44
 48

3.1.3 OBJECTIVES OF THE STUDY

● To examine business efficiency, in its use of money.

● To detect the reasons for changes in financial and liquidity situation from time to time.

● To evaluate business performance using ratio analysis.

3.1.4 NEED OF THE STUDY

● The entity's financial reports inform owners, creditors and the public of its
financial performance.

● It is used by all persons involved in the work as a basis for selection.

● All financial investment decisions by equity shareholders through financial

institutions are based on the strengths and weaknesses of the company's financial
parameters.

44
3.1.5 SCOPE OF THE STUDY

1. The examination of financial statements is helpful in analyzing the various areas

where certain actions can be taken for development.

2. The study is useful for Investment Bankers, Financial Institutions regards

Aparna Enterprises Limited.

3. This research is more valuable to academicians and scholars to make for insight

into the various aspects of the financial statements analysis in other comparable

enterprises.

4. Studies of this type are also useful to policy makers. To make appropriate changes

in the policies and to know the financial feasibility of the enterprise at glance.

45
 CHAPTER-4

DATA

HANDLING

4.1.1 PERIOD OF DATA USED

A period of 6 weeks i.e., 13-07-20 to 24-08-20 had been allowed for this study.

4.1.2 SOURCE OF STUDY

Each study is centered around noisy data and information assembled by the
researchers. The kind of data accumulated and the methods used to recover the
information has an exceptionally huge component of the study. The following are two
basic knowledge selection techniques:

Primary Data

It is data that has been collected without the usage of any sources. It is primarily via
contacts with relevant officials & employees, either individually or collectively; some of
the material has been confirmed or augmented with first hand observation. These
sources include:

1. Thorough contacts with the different department workers of the business.

2. Guidelines provided by the relevant department head, personnel, budget division, F &
A.

Secondary Data

It is the information collected as a further link from previous information. Secondary

data required to research is gathered from written documents that yield as pamphlets of
46
quarterly accounts and inner documents, quotes from text books and journal governance.

47
 1. Accounting manuals of AEL
2. Brochure, Magazines of AEL
3. News papers
4. Capital budgeting manual of AEL
5. Annual Reports of AEL
THIS

48
4.1.3 DATA ANALYSIS TOOLS

The data presentation techniques are primarily mathematical tools, tables and charts are
utilized for this research. The essential components of tools include:

● Tables
● Graphical Representations
● Liquidity Ratios ● Solvency Ratios
● Profitability Ratios
● Activity Ratios

49
 CHAPTER-5 RESULTS AND

DISCUSSION

DATA ANALYSIS

5.1.1 TABLE-1 CURRENT RATIO

CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES

YEAR CURRENT ASSETS CURRENT LIABILITIES CURRENT RATIO

2021-22 750.01 337.94 2.30

2020-21 749.00 337.06 2.22

2019-20 955.87 366.41 2.61

2018-19 934.27 343.89 2.72

OPERATING RATIO
3

2.5

1.5
OPERATING RATIO

0.5

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the current ratio of year 2017-18 is 2.72 which is taken as base year for
the purpose of comparing the current ratio of year 2018-19 is 2.61, thus showing a decline of
0.11%. And the current ratio of 2018-19 is 2.61 when compared with the current ratio of year

2019-20 is 2.22, thus showing a decline of 0.39%. And the current ratio of year 2022-21 is
2.20, thus showing a decline 0.40%.

50
 5.1.2 TABLE-2 QUICK RATIO
QUICK RATIO = QUICK ASSETS/CURRENT LIABILITIES

QUICK ASSETS = (CURRENT ASSET-INVENTORY)

YEAR QUICK ASSETS CURRENT LIABILITIES QUICK RATIO

2021-22 550.43 334.24 1.47

2020-21 502.84 337.06 1.49

2019-20 647.71 366.41 1.84

2018-19 622.59 343.89 1.81

QUICK RATIO
15.5

15

14.5

14
GROSS PROFIT RATIO

13.5

13

12.5
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the quick ratio of year 2017-18 is 1.81 which is taken as base period for
the purpose of comparing the quick ratio of year 2018-19 is 1.84, thus showing an increase of
0.03%. And the quick ratio of 2018-19 is 1.84 when compared with the quick ratio of year
2019-20 is 1.49, thus showing a decline of 0.35%. And the quick ratio of year 2020-21 is
1.47, thus showing a decline of 0.30%

51
5.1.3 TABLE-3 GROSS PROFIT RATIO
GROSS PROFIT RATIO = (GROSS PROFIT / NET SALES) x 100
YEAR GROSS PROFIT NET SALES GROSS PROFIT RATIO

2021-22 590.32 4026.44 15.08

2020-21 589.31 3905.32 15.09

2019-20 563.80 4136.47 13.63

2018-19 423.22 3130.35 13.52

GROSS PROFIT RATIO

15.5

15

14.5

14
GROSS PROFIT RATIO

13.5

13

12.5
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the gross profit ratio of 2017-18 is 13.52 which is taken as base year for
the purpose of comparing the gross profit ratio of 2018-19 is 13.63, thus showing an increase
of 0.11%. And the gross profit of 2018-19 is 13.63 when compared with the gross profit of
year 2019-20 is 15.09, thus showing an increase of 1.46%. And the gross profit of 2020-21 is
15.08, thus showing an increase of 1.40%.

52
5.1.4 TABLE-4 NET PROFIT RATIO
NET PROFIT RATIO = (NET PROFIT / NET SALES) x 100
YEAR NET PROFIT NET SALES NET PROFIT RATIO

2021-22 405.57 4026.44 10.072

2020-21 381.55 3905.32 9.77

2019-20 373.11 4136.47 9.02

2018-19 339.33 3130.35 -10.84

NET PROFIT RATIO

12

10

6
NET PROFIT RATIO

0
2021-22 2021-21 2019-20 2018-19

INTERPRETATION

From the above data, the net profit ratio of 2017-18 is 10.84 which is taken as base year for the
purpose of comparing the net profit ratio of 2018-19 is 9.02, thus showing a decline of 1.46%.
And the net profit ratio of 2018-19 is 9.02 when compared with the net profit ratio of
year 2019-20 is 9.77, thus showing an increase of 0.75%. And the net profit ratio of 2020-21
is 10.720, thus showing an increase of 1.00%

53
5.1.5 TABLE-5 OPERATING RATIO
OPERATING RATIO = (OPERATING EXPENSES / NET SALES) x 100

YEAR OPERATING EXPENSES NET SALES OPERATING RATIO

2021-22 482.37 4026.44 11.98006

2020-21 609.94 3905.32 15.61

2019-20 713.60 4136.47 17.25

2018-19 646.64 3130.35 20.65

RETURN ON INVERSTMENT
25

20

15

RETURN ON INVERSTMENT
10

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the operating ratio of year 2017-18 is 20.65 which is taken as the base
year for the purpose of comparing the operating ratio of year 2018-19 is 17.25, thus showing a
decline of 3.40%. And the operating ratio of 2018-19 is 17.25 when compared with the
operating ratio of year 2019-20 is 15.61, thus showing a decline of 1.64%. And the operating
ratio of year 2020-21 is 11.98006, thus showing a decline of 1.20%

54
5.1.6 TABLE-6 RETURN ON INVESTMENT
RETURN ON INVESTMENT = (PROFIT BEFORE INTEREST & TAX/CAPITAL
EMPLOYED) x 100

YEAR PROFIT BEFORE CAPITAL RETURN ON

INTEREST & TAX EMPLOYED INVESTMENT

2021-22 405.57 1878.20 30.06

2012-21 339.33 1494.08 25.53

2019-20 373.11 1681.08 22.19

2018-19 339.33 1851.4 18.32

RETURN ON INVERSTMENT
25

20

15

10 RETURN ON
INVERSTMENT
5

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION
From the above data, the return on investment of 2017-18 is 18.32 which is taken as the base
year for the purpose of comparing the return on investment of 2018-19 is 22.19, thus showing
an increase of 3.87%. And the return on investment of 2018-19 is 22.19 when compared with
the return on investment of 2019-20 is 25.53, thus showing an increase of 3.34%. And the
return on investment of 2020-21 is 30.05, thus showing an decrease of 4.32%.

55
5.1.7 TABLE-7 RETURN ON EQUITY
RETURN ON EQUITY = PROFIT AFTER TAX / NET WORTH

YEAR PROFIT AFTER TAX NET WORTH RETURN ON EQUITY

2021-22 301.75 1878.20 16.0659

2020-21 252.32 1376.57 18.32

2019-20 245.90 1565.98 15.70

2018-19 278.80 1729.96 16.11

RETURN ON EQUITY
19
18.5
18
17.5
17
16.5
RETURN ON EQUITY
16
15.5
15
14.5
14
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the return on equity of year 2017-18 is 16.11 which is taken as base year
for the purpose of comparing the return on equity of year 2018-19 is 15.7, thus showing a
decline of 0.41%. And the return on equity of 2018-19 is 15.7 when compared with the
return on equity of year 2019-20 is 18.32, thus showing an increase of 2.62%. And the return
equity of year 2020-21 is 16.0589, thus showing an increase of 1.23%.

56
5.1.8 TABLE-8 TOTAL ASSETS TURNOVER RATIO
TOTAL ASSETS TURNOVER RATIO = NET SALES / TOTAL ASSETS X 100

TOTAL ASSETS = FIXED ASSETS + CURRENT ASSETS

INTERPRETATION

From the aforementioned statistics, the total asset turnover ratio of 2017-18 is 191.1 which is
chosen as base year for the purpose of comparing the total asset turnover ratio of 2018-19 is
248.38, thus indicating an increase of 57.28 percent. And the total asset turnover ratio of
2018- 19 is 248.38 when compared with the total asset turnover ratio of year 2019-20 is
261.2,
thus indicating an increase of 12.82 percent. And the turnover ratio of 2020-21 is 231.3035,
thus indicating an increase of 13.12 percent.

57
5.1.9 TABLE-9 DEBT EQUITY RATIO
DEBT EQUITY RATIO = LONG TERM DEBT / NET WORTH
YEAR LONG TERM DEBT NET WORTH DEBT EQUITY RATIO

2021-22 102.74 1878.20 0.05471

2020-21 117.51 1376.57 0.085

2019-20 115.10 1565.98 0.073

2018-19 121.44 1729.96 0.070

DEBIT EQUTY RATIO

0.09

0.08

0.07

0.06

0.05

0.04 DEBIT EQUTY RATIO

0.03

0.02

0.01

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the aforementioned statistics, the debt equity ratio of 2017-18 is 0.07 which is chosen as
base year for the purpose of comparing the debt equity ratio of 2018-19 is 0.073, thereby
indicating a rise of 0.003 percent. And the debt equity ratio of 2018-19 is 0.073 when
compared with the debt equity ratio of year 2019-20 is 0.085, thus indicating an increase of
0.012 percent. And the debt equity ratio of 2020-21 is 0.05471, thus indicating an increase of
0.010 percent.

58
5.1.10 TABLE-10 INTEREST COVERAGE RATIO
INTEREST COVERAGE RATIO = PROFIT BEFORE INTEREST & TAX / INTEREST
CHARGES

PROFIT
INTEREST
BEFORE INTEREST
YEAR COVERAGE
INTEREST CHARGES
RATIO
& TAX
2021-
405.57 159.08 2.5494
22

2020-
381.55 28.37 13.44
21
2019-
373.11 47.69 7.82
20

2018-
339.33 95.38 3.55
19

INTEREST COVERAGE
RATIO
16

14

12

10

8
INTEREST COVERAGE RATIO
6

0
2021-22 2020-21 2019-20 2018-19
INTERPRETATION
From the above data, the interest coverage ratio of 2017-18 is 3.55 which is taken as base
year for the purpose of comparing the interest coverage ratio of 2018-19 is 7.82, thus showing
an increase of 4.27%. And the interest coverage ratio of 2018-19 is 7.82 when compared with
the interest coverage ratio of year 2019-20 is 13.44, thus showing an increase of 5.62%. And
the interest coverage ratio of 2020-21 is 2.5494, thus showing an increase of 3.32%.

59
 67

5.1.11 TABLE-11 PROPRIETARY RATIO

PROPRIETARY RATIO = NET WORTH / TOTAL ASSETS
YEAR NET WORTH TOTAL ASSETS PROPRIETARY RATIO

2021-22 1878.20 1740.76 1.0785

2020-21 1376.57 1495.13 0.92

2019-20 1565.98 1665.33 0.94

2018-19 1729.96 1638.02 1.05

PROPRIETARY RATIO
1.1

1.05

0.95
PROPRIETARY RATIO

0.9

0.85

0.8
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the aforementioned statistics, the proprietary ratio of year 2017-18 is 1.05 which is
chosen as base year for the purpose of comparing the proprietary ratio of year 2018-19 is
0.94, thereby indicating a decrease of 0.11 percent. And the proprietary ratio of 2018-19 is
0.94 when compared with the proprietary ratio of year 2019-20 is 0.92, thus indicating a
decrease of 0.02 percent. And the proprietary ratio of 2020-21 is 1.0785, thus indicating a
decrease of 0.10 percent.
5.1.12 TABLE-12 FIXED ASSETS RATIO
FIXED ASSETS RATIO = FIXED ASSETS / CAPITAL EMPLOYED
YEAR FIXED ASSETS CAPITAL EMPLOYED FIXED ASSETS RATIO

2021-22 697.78 1494.09 0.500

2020-21 746.13 1494.08 0.499

2019-20 709.46 1681.08 0.422

2018-19 703.75 1851.4 0.380

FIXED ASSET RATIO

0.6

0.5

0.4

0.3
FIXED ASSET RATIO

0.2

0.1

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the fixed asset ratio of 2017-18 is 0.38 which is taken as base year for
the purpose of comparing the fixed asset ratio of 2018-19 is 0.422, thus showing an
increase of 0.042%. And the fixed asset ratio of 2018-19 is 0.422 when compared with the
fixed asset ratio of year 2019-20 is 0.499, thus showing an increase of 0.077%. And the
fixed asset ratio of 2020-21 is 0.500, thus showing an increase of 0.088%.

60
5.1.13 TABLE-13 INVENTORY TURNOVER RATIO
INVENTORY TURNOVER RATIO = NET SALES / AVERAGE INVENTORY
YEAR NET SALES AVERAGE INVENTORY INVENTORY TURNOVER RATIO

2021-22 4026.44 373.65 11.01

2020-21 3905.32 372.64 10.48

2019-20 4136.47 426.44 9.70

2018-19 3130.35 379.43 8.25

INVENTORY TURNOVER
RATIO
12

10

6
INVENTORY TURNOVER RATIO

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the inventory turnover ratio of year 2017-18 is 8.25 which is taken as
base year for the purpose of comparing the inventory turnover ratio of year 2018-19 is 9.7,
thus showing an increase of 1.45%. And the inventory turnover ratio of 2018-19 is 9.7
when compared with the inventory turnover ratio of year 2019-20 is 10.48, thus showing an
increase an 0.78%. And the inventory turnover ratio of year 2020-21 is 11.01, thus showing
an increase an 1.02%.

61
5.1.14 TABLE-14 DEBTORS TURNOVER RATIO
DEBTORS TURNOVER RATIO = NET CREDIT SALES / AVERAGE DEBTORS

YEAR NET SALES AVERAGE DEBTORS TURNOVER

DEBTORS RATIO

2021-22 4026.44 371.89 10.826

2020-21 3905.32 406.59 9.60

2019-20 4136.47 410.01 10.08

2018-19 3130.35 347.80 9.00

DEBITORS TURNOVER RATIO

12

10

6
DEBITORS TURNOVER RATIO

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the debtors turnover ratio of 2017-18 is 9 which is taken as base year for
the purpose of comparing the debtors turnover ratio of 2018-19 is 10.08, thus showing an
increase of 1.08%. And the debtors turnover ratio of 2018-19 is 10.08 when compared with
the debtors turnover ratio of year 2019-20 is 9.6, thus showing a decline of 0.48%. And the
debtors turnover ratio of 2020-21 is 10.286, thus showing a decline of 0.60%.

62
5.1.15 TABLE-15 WORKING CAPITAL TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO = NET SALES / AVERAGE WORKING
CAPITAL

YEAR NET SALES AVERAGE WORKING CAPITAL

WORKING TURNOVER RATIO
CAPITAL

2021-22 4026.44 305.79 19.65

2020-21 3905.32 205.97 18.96

2019-20 4136.47 294.73 14.03

2018-19 3130.35 295.19 10.60

WORKING CAPITAL TURN OVER

RATIO
25

20

15
WORKING CAPITAL TURN OVER
RATIO
10

0
2021-22 2020-21 2019-20 2018-19

INTERPRETATION

From the above data, the working capital turnover ratio of year 2017-18 is 10.6 which is taken
as base year for the purpose of comparing the working capital turnover ratio of year 2018-19
is 14.03, thus showing an increase of 3.43%. And the working capital turnover ratio of 2018-
19 is 14.03 when compared with the working capital turnover ratio of year 2019-20
is 18.96, thus showing an increase of 4.93%. And the working capital turnover ratio of year

63
2020-21 is 19.65, thus showing an increase of 5.20%

64
5.2 FINDINGS

● The current ratio is declining on an annual basis, which indicates a decrease in the
repayment of obligations.

● The quick ratio for the year increased in the first year and decreased in the second
year, which depends only on closing stock available in those years.

● The gross profit ratio varies from year to year, which is a good indicator for
the company.

● The percentage of net profit to sales decreased in one year due to higher tax payment
due to higher sales and increased in the second year due to lower tax payment due to
lower sales.

● The annual activity rate is declining year after year, which indicates a
decrease in operating costs, which is a positive indicator for the company.

● The return on investment increases every year, which is a positive sign

for the company.

● The return on equity for the year decreased in one year, possibly due to
various circumstances such as tax overpayments and the decrease in equity with
debt due to the increase in the second year.

● Asset turnover is increasing year on year, which is a positive indicator

of the company's success in using assets to generate revenue.

● Debt Equity Ratio rises year by year which leads in greater usage of debt for its
operations yet dqr is < than 1 which is a positive component.
● Interest Coverage Ratio rises year by year which leads in the business being
able to service its debt extremely efficiently on the loan it has taken.
65
● Proprietary Ratio lowers year by year which leads in lack of security to
creditors which is related to purchase of assets utilizing outside financing.

● Fixed Asset Ratio inclines year by year which leads in appropriate use of long
term money for buying fixed assets. Due to this there is a reduction in proprietor
ratio. Lower ratio is excellent < 1.

● Inventory Turnover Ratio rises year by year which leads in inventory rotation
which results in higher sales & Profit. Higher liquidity.

● Debtors turnover ratio changes may be owing to change in credit policy of

company for corresponding years & current customers pay late.

● Working Capital turnover ratio inclines year by year owing to decrease in the
average working capital of the business.

66
 CHAPTER-6 LIMITATIONS AND

CONCLUSION

6.1 LIMITATIONS OF THE STUDY

● The duration of research of 6 to 8 weeks isn't adequate to conduct a point by

point examination of the business.

● The evaluation is passed on subject to the information and reports provided by the
business and totally reliant on the connection with the various employees of the specific
offices

● Absence of information. Some require indisputable knowledge about the concept

and it's hard to obtain a specific evaluation from them.

● Time restriction. The duration of the job is brief to gather the required data accurately.

67
 6.2 SUGGESTIONS

● Since the current ratio is too high than standard level, it is advised to properly
maintain short term financing facilities.

● As the quick ratio is greater than standard level, it allows the enterprise to
settle its current liabilities.

● Gross profit ratio can still increase by reducing the total cost of the labor and materials.

● It can be suggested to take remedial measures to increase the net profit ratio such
that it leads to increasing the company’s performance.

● It is suggested that the company needs to reduce the expenses which in turn
leads to profits.

● Efforts should be made to improve the overall efficiency in the return on

capital employed by making efficient use of the available resources.

● The company may expand its source of funds to establish an excellent R&D
system for greater profits in the coming years.

6.3 CONCLUSION
68
Aparna Enterprises Ltd. Research on financial performance using ratio analysis using three years
of data. Annual accounts issued by Aparna Enterprises Limited from 2017-18 to 2019-

69
20 as well as many other accounts, published reports are the primary sources of data relating to
this business. Brief conversations were held with accounting department officials
for clarification when necessary.

The current ratio and the liquidity ratio show the short-term financial position of Aparna
Enterprises Limited, while the debt-to-equity ratio as well as the equity ratios represent the long-
term financial position. Likewise, operating ratios as well as profit ratios help in evaluating the
performance of Aparna Enterprise Limited. Correcting or improving the top line ratios of the
business is a common activity pursued by the company. Based on the above results, I can assume
that the business will generate acceptable profits during my studies in the aforementioned
company. The following study shows that the company is financially sound.

70
APPENDICES

BALANCE SHEETS FOR RESPECTIVE YEARS

Balance Sheet
2021-22 2020-21 2019-20 2018-19

Sources Of Funds
Total Share Capital 15.91 15.90 15.90 15.90
Equity Share Capital 15.91 15.90 15.90 15.90
Reserves 1,852.95 1,698.37 1,559.00 1,335.12
Networth 1,868.86 1,714.27 1,574.90 1,351.02
Secured Loans 97.06 117.14 81.60 118.04
Unsecured Loans 0.00 0.00 13.34 17.05
Total Debt 97.06 117.14 94.94 135.09
Minority Interest 64.60 63.74 65.91 66.09
Total Liabilities 2,030.52 1,895.15 1,735.75 1,552.20
Application Of Funds
Gross Block 1,928.29 1,870.64 1,669.57 1,689.14
Less: Accum. Depreciation 735.86 675.88 591.74 544.03
Net Block 1,192.43 1,194.76 1,077.83 1,145.11
Capital Work in Progress 14.90 26.63 93.39 17.60
Investments 4.97 10.14 0.34 0.34
Inventories 373.08 512.72 405.80 378.47
Sundry Debtors 431.67 396.69 475.05 450.67
Cash and Bank Balance 442.75 225.17 252.38 82.47
Total Current Assets 1,247.50 1,134.58 1,133.23 911.61
Loans and Advances 66.80 72.49 68.44 65.63
Total CA, Loans & Advances 1,314.30 1,207.07 1,201.67 977.24
Current Liabilities 473.23 514.66 617.45 570.17
Provisions 22.85 28.79 20.03 17.92
Total CL & Provisions 496.08 543.45 637.48 588.09
Net Current Assets 818.22 663.62 564.19 389.15
Total Assets 2,030.52 1,895.15 1,735.75 1,552.20
Contingent Liabilities 7.02 15.37 54.22 58.99
Book Value (Rs) 117.48 107.85 99.08 85.00

1
PROFIT AND LOSS ACCOUNT FOR RESPECTIVE YEARS

Profit & Loss account

2021-22 2020-21 2019-20 2018-19

Income
Sales Turnover 2,780.90 2,808.01 2,956.20 2,782.55
Excise Duty 0.00 0.00 0.00 71.95
Net Sales 2,780.90 2,808.01 2,956.20 2,710.60
Other Income 21.43 23.44 13.36 11.52
Stock Adjustments -133.30 84.36 36.51 12.87
Total Income 2,669.03 2,915.81 3,006.07 2,734.99
Expenditure
Raw Materials 1,187.17 1,273.59 1,275.10 1,161.65
Power & Fuel Cost 414.90 564.42 616.16 519.44
Employee Cost 324.65 356.86 345.45 317.65
Selling and Admin Expenses 46.41 89.57 90.30 105.26
Miscellaneous Expenses 165.65 192.03 216.21 163.11
Total Expenses 2,138.78 2,476.47 2,543.22 2,267.11
Operating Profit 508.82 415.90 449.49 456.36
PBDIT 530.25 439.34 462.85 467.88
Interest 10.71 19.51 15.59 24.10
PBDT 519.54 419.83 447.26 443.78
Depreciation 106.67 108.09 89.06 88.53
Profit Before Tax 412.87 311.74 358.20 355.25
PBT (Post Extra-ord Items) 412.87 311.74 358.20 355.25
Tax 103.84 58.92 129.28 126.72
Reported Net Profit 308.05 255.33 226.57 234.96

Net P/L After Minority Interest & Shares 308.90 253.33 223.59 227.85
of Associates
Total Value Addition 951.61 1,202.88 1,268.12 1,105.46
Equity Dividend 159.08 95.37 47.69 28.37
Corporate Dividend Tax 0.00 19.60 9.80 9.71
Per share data (annualized)
Shares in issue (lakhs) 1,590.81 1,589.50 1,589.50 1,589.50
Earning Per Share (Rs) 19.36 16.06 14.25 14.78
Book Value (Rs) 117.48 107.85 99.08 85.00
CASH FLOW

Cash flow 2021-22 2020-21 2019-20 2018-19

Net profit Before Tax 412.74 312.45 358.03 355.32
Net Cash From Operating Activities 508.76 224.43 317.36 238.17
Net Cash (Used in)/from
Investing Activities -295.54 -90.06 -260.86 -136.79

Net Cash (Used in)/ Financial Activities -204.51 -140.37 -114.14 -71.84

Net (decrease)/increase in Cash a

Cash Equivalent 8.71 -6.00 -57.64 29.54

Opening Cash & Cash Equivalents 16.11 22.12 79.76 50.22

Closing Cash & Cash Equivalent 24.82 16.12 22.12 79.76
 Financial Ratios 2021-22 2020-21 2019-20 2018-19

Investment Valuation Ratios

Face Value 1.00 1.00 1.00 1.00
Dividend Per Share -- -- -- --
Operating Profit Per Share (Rs) 31.98 26.17 28.28 28.71
Net Operating Profit Per Share
(Rs) 174.81 176.66 185.98 170.53
Free Reserves Per Share (Rs) -- -- -- --
Bonus in Equity Capital -- -- -- --
Profitability Ratios
Operating Profit Margin (%) 18.29 14.81 15.20 16.83
Profit Before Interest And Tax
Margin (%) 14.35 10.86 12.11 13.51
Gross Profit Margin (%) 14.46 10.96 12.19 13.57
Cash Profit Margin (%) 14.83 12.76 10.84 11.62
Adjusted Cash Margin (%) 14.83 12.76 10.84 11.62
Net Profit Margin (%) 11.07 9.09 7.66 8.66
Adjusted Net Profit Margin (%) 10.99 9.01 7.61 8.63
Return On Capital Employed (%) 21.53 18.12 22.66 25.48
Return On Net Worth (%) 16.48 14.89 14.38 17.39
Adjusted Return on Net Worth
(%) 16.52 14.78 14.83 16.86
Return on Assets Excluding
Revaluations 121.54 111.86 103.23 89.15
Return on Assets Including
Revaluations 121.54 111.86 103.23 89.15
Return on Long Term Funds (%) 22.28 19.12 23.56 26.84
Liquidity And Solvency Ratios
Current Ratio 2.09 1.64 1.57 1.32
Quick Ratio 1.89 1.27 1.25 1.02
Debt Equity Ratio 0.05 0.07 0.06 0.10
Long Term Debt Equity Ratio 0.02 0.01 0.02 0.04
Debt Coverage Ratios
Interest Cover 39.54 17.01 24.28 15.71
Total Debt to Owners Fund 0.05 0.07 0.06 0.10
Financial Charges Coverage
Ratio 49.50 22.56 29.99 19.39
Financial Charges Coverage
Ratio Post Tax 39.72 19.63 21.25 14.42
Management Efficiency Ratios
Inventory Turnover Ratio 7.45 5.48 7.28 7.35
Debtors Turnover Ratio 6.71 6.44 6.39 6.87
Investments Turnover Ratio 1.41 1.53 7.28 7.35
Fixed Assets Turnover Ratio 1.45 1.51 1.78 1.62
Total Assets Turnover Ratio 1.38 1.49 1.71 1.76
Asset Turnover Ratio 1.42 1.55 1.80 1.82

Average Raw Material Holding -- -- -- --

Average Finished Goods -- -- -- --
Held
Number of Days In Working 112.13 89.43 76.50 60.63
Capital
Profit & Loss Account
Ratios
Material Cost Composition 42.69 45.35 43.13 42.85
Imported Composition of
Raw Materials Consumed -- -- -- --
Selling Distribution Cost
Composition 1.66 3.18 3.05 3.88
Expenses as Composition of
Total Sales -- -- -- --
Cash Flow Indicator
Ratios
Dividend Payout Ratio Net
Profit 51.64 45.02 25.37 16.20
Dividend Payout Ratio Cash
Profit 38.35 31.63 18.21 11.77
Earning Retention Ratio 48.51 54.66 75.39 83.29
Cash Earning Retention
Ratio 61.73 68.21 82.19 87.97
Adjusted Cash Flow Times 0.23 0.32 0.29 0.43

5
REFERENCES

BIBLIOGRAPHY

1. ▪Fundamentals of financial management (2016) by I.M, Pandey-

published by Vikas
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a. Tata-McGraw-Hill co ltd
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a. International Pvt ltd
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a. McGraw-Hill co ltd
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