Ratio Analysis

Current Ratio Current Assets / Current Liabilities 0.543357 The current ratio is very low, this shows that the company cannot even meet half of its short term obligations, raising serious concerns weather this is a going concern or not. Quick Ratio Current assets (less Inventories and prepaid expenses) / Current Liabilities 21534156 (1350389+19304866+878901) (21534156/60747573) 0.354486 The quick ratio presents even a worse picture as compared to the current ratio, again posting an existential question for the firm Total Debt Ratio Total Debt / Total Assets 0.541077 The company has an ordinate amout of assets which are funded by debt, but the figure of assets are inflated by 100 Million of intangible asset, which is highly questionalbe taking out that figure changes the value of this ratio to. (92500073)/(170955622-100000000) 1.303633 Which means that the total assets cannot cover the total liabilities of the company. The debt is about 30% more than the actual worth of all the tangible assets of the company, including the account recivables which the company hopes to realize in the near future. Basic Earning per Share The financial statements show the earnings per share ratio, which is: 5894627/10687500 0.551544 This ratio shows that the company is having an earning on a per share basis, but in actual the company has a huge carried forward loss, which if factored in shows that the company proabably wont be able to give out a divident for atleast next 3 years. (Assuming the current profits %age growth is maintained) Gross Profit Ratio Gross profit ratio is: 13,630,954/52,158,800 0.261336 Net profit to sales ratio: The net profit to sales ratio is: 5,894,627/52,158,800 0.113013 11% net profit ratio is a normal profit ratio, but at this rate, it would take the company atleast 3 to 4 years to get rid of all the accumilated losses on its balance sheet.

ROI:

The ROI given by the company is: 5,894,627/170,955,622 3.448045 A rate of return that low does not even match with the simple deposit rate being offered by commercial banks in our economy, therefore investors might be tempted to withdraw their investments in the company. Inventory Turn over ratio: The inventory turnover ratio shows that at what speed assets are being converted into sales. It is given by: Cost of goods sold / Avg inventory at cost 52158800/((7145692+8052151)/2) 6.863974 This is a very low inventory turnover ratio for a company which manufactures products which can be considered in the FMCG sector. Total asset turn over: This ratio gives us an estimate of the firms assets in generating cash or revenues for the firm It is given by : Sales / Total Assets 52158800/170955622 0.305101 This shows that the company has a low turover, which is due to its very low capacity utilization.

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