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A PROJECT REPORT IN EQUITY RESEARCH

PROJECT TITLE: FINANCIAL ANALYSIS OF ADITYA BIRLA GROUP.

Submitted On: 17TH MARCH 2013


UNDER THE AEGIS OF

Submitted To: Mrs. Anubha Gupta

Submitted By: Dilip Kumar PGDFS - 2011-13 Roll No. : FT-(FS)-11-319

INTRODUCTION TO THE COMPANY

A US$ 29 billion corporation, the Aditya Birla Group is in the League of Fortune 500. It is anchored by an extraordinary force of 130,600 employees, belonging to 40 different nationalities. In the year 2009, the Group was ranked among the top six great places for leaders in the Asia-Pacific region, in a study conducted by Hewitt Associates, RBL Group and Fortune magazine. In India, the Group has been adjudged the best employer in India and among the top 20 in Asia by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 60 per cent of the Group's revenues flow from its overseas operations. The Group operates in 27 countries Australia, Bahrain, Bangladesh, Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Indonesia, Italy, Korea, Laos, Luxembourg, Malaysia, Myanmar, Philippines, Singapore, Sri Lanka, Switzerland, Thailand, UAE, UK, USA and Vietnam. Globally, the Aditya Birla Group is: A metals powerhouse, among the world's most cost-efficient aluminum and copper producers. Hindalco-Novelis is the largest aluminum rolling company. It is one of the three biggest producers of primary aluminum in Asia, with the largest single location copper smelter No.1 in viscose staple fiber The fourth-largest producer of insulators The fourth-largest producer of carbon black The fifth-largest producer of acrylic fiber The ninth-largest cement producer Among the best energy-efficient fertilizer plants

In India
One of the leading cement producers. The top fashion (branded apparel) & lifestyle player. The second largest of viscose filament yarn.

The second largest in the chlor alkali sector. Among the top four mobile telephony companies Among top 10 Indian BPO companies by revenue size. Among the top three supermarket chains in the retail business.

Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh, to keep experimenting.

Beyond Business
Transcending business for over 50 years now, the Group has been and continues to be involved in meaningful welfare-driven initiatives that distinctly impact the quality of life of the weaker sections of society in India, South-East Asia and Egypt. In India, the Group's social projects span 2,500 villages. It reaches out to seven million people annually through the Aditya Birla Centre for Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla. Its focus is healthcare, education, sustainable livelihood, infrastructure and espousing social causes. The Group runs 42 schools, which provide quality education to over 45,000 children in India's interiors. Of these, over 18,000 children receive free education. An additional 8,000 students receive merit scholarships. Likewise at its 18 hospitals in India, more than a million patients are given extremely subsidized medical care. To embed corporate social responsibility as a way of life in organizations, the Group has set up the FICCI Aditya Birla CSR Centre for Excellence, in Delhi. The Group transcends the conventional barriers of business and reaches out to the marginalized because of its conviction of bringing in a more equitable society. Group Companies Grasim Industries Ltd. Hindalco Industries Ltd.

Aditya Birla Nuvo Ltd. UltraTech Cement Ltd. Indian Companies Aditya Birla Minacs Worldwide Ltd. Essel Mining & Industries limited Idea Cellular Limited Aditya Birla Insulators Aditya Birla Retail Limited Aditya Birla Chemicals (India) Limited

WHY ABG?

Successful and Growing From a turnover of US $ 2 billion in 1997, today we are a US $ 29.2 billion global conglomerate. In the same period, our market capitalization has moved from US $ 3 billion to US $ 31.5 billion. In terms of revenues, profitability and market capitalization, we are already in the League of the Fortune 500. Through acquisitions and expansions, we plan to continue capitalizing on emerging global opportunities.

One Employer Many Opportunities Whichever part of the Group you join, our career progression and talent management process allows you to take your career to greater heights in any of the sectors/geographies in which we operate. We also encourage our employees to take up cross functional exposures to accelerate their development.

Continuous Learning and Development Continuously learning and growth are an integral part of our Group ethos and the opportunities to enhance your skills are immense. Opportunities to work with industry leaders on challenging

assignments, working on a specific task force/project, on the job training, structured classroom training and e - learning are some of the ways you can prepare for bigger responsibilities.

Recognized as the Best Employer We have built a reputation of being a caring organization with people policies that set benchmarks. Our Group was recently awarded the Number One position as Best Employer in India and among The Top 20 in Asia by the Hewitt - Economic Times and Wall Street Journal Study 2007.

Socially Responsible The Group is widely acknowledged for its good corporate governance and commitment to the community. We support several social and cultural causes and are an active promoter of valuebased education as a cornerstone for national progress. Naturally, we encourage our employees to contribute to their communities in a manner of their choosing.

ABG Values
Our path to excellence.
Over the years, we have grown increasingly diverse. Yet, we have stayed together, bound by five values: Integrity: Honesty in Every Action : Acting and taking decisions in a manner that these are fair, honest, following the highest standards of professionalism and are also perceived to be so.

Commitment: Deliver on the Promise: On the foundation of Integrity, doing whatever it takes to deliver value to stakeholders. Passion: Energized Action: A missionary zeal arising out of emotional engagement with the organization that makes work joyful and inspires each one to give his or her best.

Seamlessness: Boundary Less in Letter and Spirit: Thinking and working together across functional silos, hierarchies, businesses and geographies. Speed: One Step Ahead Always: Continuously seeking to crash timelines and choosing the right rhythm to optimize organizational efficiencies.

FINANCIAL RATIO ANALYSIS OF ADITYA BIRLA GROUP

What is Financial Ratio: Financial ratio analysis is a study of ratios between various items or group of items in financial statements. Importance & Advantages of Ratio Analysis : Ratio analysis is an important tool for analyzing the companys financial performance. The following are the important advantages of the accounting ratios. 1. Analyzing Financial Statements: Ratio analysis is an important technique of financial statement analysis. Accounting ratios are useful for understanding the financial positions of the company. Different users such as investors, managements. Bankers & creditors use the ratios to analyze the financial situations of the company for their decision making purpose. 2. Judging Efficiency: Accounting ratios are important for judging the companys efficiency in the terms of its operations & management. They help judge how well the company has been able to utilize its assets & earns profits. 3. Locating Weakness: Accounting Ratios can be also used in locating weaknesses of the companys operations even though its overall performance may be quite good. Management can then pay attention to the weaknesses & then take remedial measures to overcome them. 4. Formulating Plans: Although accounting ratios are used to analyze the companys past financial performance, they can also be used to establish future trends of its financial performance. As a result, they help formulate the companys future plans. 5. Comparing Performances: It is essential for a company to know how well it is performing over the years & as compared to the other firms of the similar nature. Besides, it is also

important to know how well its different divisions are performing among themselves in different years. Ratio analysis facilitates such comparison. Types Of Ratios: Ratios can be classified into the following broad groups : Profitability Ratios Liquidity Ratios Capital Structure or Leverage Ratios Activity Ratios

Profitability Ratios : Profitability Ratios are based on premise that a firm should earn sufficient profit not only on turnover but also for shareholders. Profitability reflects the final result of any business. If the profit are inadequate then the operating expenses cant be recovered so also dividend cant be paid to the owners. Generally the ratios under this category are broadly classified under two heads. A. Profit ratios based on Turn Over B. Profit ratios based on Investments A. Profit ratios based on Turn Over : The various ratios under this category are as follows. a. Gross Profit Ratios : It is defined as : Gross profit ratios = ( Gross profit/Net Sales) * 100

Where, Gross profit = Net Sales Cost of Goods sold b. Net Profit Ratios : It is defined as : Net profit Ratio = (Net Profit After Tax/Net Sales) * 100 c. Operating Ratios : It is defined as : Operating Ratio = [(Cost of Goods sold +Operating Expenses)/Net Sales] * 100

Where, Operating Expenses = Office & Administration + Selling & Distribution Expenses

d. Expense Ratios : There are following ratios under this. Cost Of Good Sold Ratios = (Cost of goods sold/ Net sales) * 100 Operating Expenses Ratios = (Operating Expenses/ Net sales) * 100 Administrative Expenses Ratios = (Administrative Expenses/ Net sales) * 100 Selling Expenses Ratios = (Selling Expenses/ Net sales) * 100 Financial Expenses Ratios = (Financial Expenses/ Net sales) * 100 e. Operating Profit Ratios : It is defined as Operating Profit Ratios = (Operating Profit/Net Sales) * 100 Where, Operating Profit = Net profit + Non Operating Expenses Non Operating Income B. Profit Ratios Based On Investment : The various ratios under this category are follows : a. Return On Capital Employed (ROCE) : It is defined as : ROCE = (Net Profit after tax/ Average Capital Employed) * 100 Where, Capital Employed = Fixed Asset + Net Working capital & Average Capital Employed = [(Opening + Closing) Capital Employed]/2

b. Return On Shareholders Fund : It is defined as : Return on shareholder fund = (Net Profit after tax/ Average Shareholder Fund) * 100

Where, Average Shareholders Fund = [(Opening + Closing) Shareholders Funds]/2

c. Earning Per Share (EPS): It is defined as: Earning Per Share = Net Profit available to Equity Shareholders / No. Of Equity Shares

d. Dividend Per Share (DPS) : It is defined as Dividend Per Share = Net Distributed Profit to equity Shareholders / No. Of Equity Shares

e. Dividend Payout Ratio : It is defined as : Dividend Payout Ratio = ( Dividend Per share / Earning Per share) * 100

f. Earning Yield Ratio : It is defined as : Earning Yield Ratio = (EPS / Market Value Per Share) * 100 g. Dividend Yield Ratio : It is defined as : Dividend Yield Ratio = (DPS / Market Value Per Share) * 100

h. Price Earning Ratio : It is defined as : Price Earning Ratio = Market Price Of Share / EPS

Liquidity Ratio : Liquidity refers to the ability of a firm to meet its obligations in the short run usually for the one year. Liquidity ratio are generally based on the relationship between the current asset & current liability . The objective of this ratio is to access the ability of the firm to meet its current or short term obligations. The important liquidity ratio are : 1. Current Ratio : It is defined as : Current Ratio = Current Assets/ Current Liabilities

2. Acid-test Ratio or Quick Ratio : It is defined as : Quick Ratio = Quick Assets / Current Liabilities Where, Quick Asset = CA (Inventory + Prepaid Expenses)

Leverage Ratios : Financial leverage refers to the use of debt finance. The ratios under this category are very relevant from the point of view of long terms funds providers. They are interested to know whether the company is viable enough to refund the long term loan along with the interest or whether the company shall be able to pay dividend to shareholders.

The important ratios under this category are as follows : 1. Debt Equity Ratio : It is defined as :

Debt Equity Ratio = Total Debt/Total Equity Where, Total Equity = Preference Share Capital + Equity Share Capital + Reserve & Surplus Accumulated Loss

2. Interest Coverage Ratio : It is defined as : Interest Coverage Ratio = Net Profit before Interest & Tax / Fixed Interest Charges

3. Dividend Coverage Ratio : It is defined as : Dividend Coverage Ratio = Earning After Tax / Preference Dividend

4. Capital Gearing Ratio : It is defined as : Capital Gearing Ratio = (Equity Share Capital + Reserve & Surplus)/ (Preference Share Capital + Long Term Debt)

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Activity Ratio Or Turn Over Ratio : As the term itself speaks, the various activities of a firm should aim at maximizing the overall objective of the company. So the firm has to ensure that all the activities should be efficiently managed, properly supported by the assets or resources. In other words, it can be said that there should be optimum and efficient utilization of the assets or all resources of the firm, leading to more profitable activities. These ratios are also called turnover ratio because they indicate the speed with which assets are converted or turned over into sales. The various ratios under this category are as follows : 1. Debtors Turn Over Ratio : It is defined as : Debtors Turn Over Ratio = Net Credit Sales / Average Debtors Where, Net Credit Sales = Total Sales Cash Sales Sales Return Average Debtors = (Opening Debtors + Closing Debtors) / 2 & Average Collection Period = No. Of Days in a Year / Debtors Turn Over Ratio

2. Creditors Turn Over Ratio : It is defined as : Creditors Turn Over Ratio = Net Credit Purchases / Average Creditors Where, Net Credit Purchase = Total Purchase Cash Purchase Return Average Creditors = (Opening Creditors + Closing Creditors) / 2 & Average Payment Period = No. Of Days in a Year / Creditors Turn Over Ratio

3. Inventory Turn Over Ratio : It is defined as : Inventory Turn Over Ratio = Cost Of Goods Sold / Average Inventory Where,

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Cost Of Good Sold = Total Net Sales Gross Profit Average Inventory = (Opening Inventory + Closing Inventory) /2

4. Working Capital Turn Over Ratio : It is defined as : Working Capital Turn Over Ratio = Cost Of Goods Sold / Net Working Capital

5. Fixed Assets Turn Over Ratio : It is defined as : Fixed Assets Turn Over Ratio = Net sales/ Fixed Asset

6. Proprietary Ratio : It is defined as : Proprietary Ratio = Shareholders Funds / Total Assets

FINANCIAL RATIOS CALCULATIONS PROFITABILITY RATIO: The important ratios under this section are : Gross Profit Ratio, Net Profit Ratio, Operating Profit Ratio, Return on Capital Employed (ROCE), Earning Per Share, Dividend Per Share, Return On Shareholder Fund, & Dividend Pay Out Ratio etc. 1. Gross Profit Ratio = (Gross Profit / Net sales) * 100 Where Gross Profit = Total Income Total Expense Aditya Birla Money 2012 = {(97.24-102.62)/88.28}*100 = 6.1 (Loss) Aditya Birla Money 2011 = {(115.87-114.42)/114.28}*100 = 1.26 Aditya Birla Money 2010 = {(115.9-86.53)/112.37}*100 = 26.13 Aditya Birla Money 2009 = {(86.28-72.03)/83.1}*100 = 17.14 Aditya Birla Money 2008 = {(126.4-77.13)/122.77}*100 =40.13

2. Net Profit Ratio = (Net profit After Tax / Net sales) *100

Aditya Birla Money 2012 = (17.83/88.28)*100 = 20.19 (Loss) Aditya Birla Money 2011 = (8.44/114.28)*100 = 7.38 (Loss)

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Aditya Birla Money 2010 = (12.68/112.37)*100 = 11.28 Aditya Birla Money 2009 = (1.21/83.1)*100 = 1.45 Aditya Birla Money 2008 = (22.02/122.77)*100 = 17.93

3. Operating Profit Ratio = (Operating Profit / Net sales) *100

Aditya Birla Money 2012 = (14.34/88.28)*100 = 16.24 (Loss) Aditya Birla Money 2011 = (0.14/114.28)*100 = 0.12 (Loss) Aditya Birla Money 2010 = (25.74/112.37)*100 = 22.90 Aditya Birla Money 2009 = (11.07/83.1)*100 = 13.32 Aditya Birla Money 2008 = (45.94/122.77)*100 = 37.41

4. ROCE = (Net Profit after tax/ Average Capital Employed) * 100 Where, Capital Employed = Fixed Asset + Net Working capital & Average Capital Employed =Net Worth + Secured Loans + Unsecured Loans Average Capital Employed : Aditya Birla Money 2012 = (51.18+10+40.37) = 101.55 Aditya Birla Money 2011 = (69.01+0+24.93) = 93.94 Aditya Birla Money 2010 = (57+.45+5+35) = 97.45 Aditya Birla Money 2009 = ( 44.77+0+5) = 49.77 Aditya Birla Money 2008 = (43.86+40.3+0.06) = 84.22

Now Return on Capital Employed (ROCE) Aditya Birla Money 2012 = (17.83/101.55) * 100 =17.55 Aditya Birla Money 2011 = (8.44/93.94) * 100 = 8.98 Aditya Birla Money 2010 =(12.68/97.45) * 100 = 13.01 Aditya Birla Money 2009 =(1.21/49.77) * 100 = 2.44 Aditya Birla Money 2008 =(22.02/84.22) * 100 = 26.14

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5. Earning Per Share (EPS) = Net Profit available to Equity Shareholders / No. Of Equity Shares Aditya Birla Money 2012 = 3.22 (Loss) Aditya Birla Money 2011 =1.52 (Loss) Aditya Birla Money 2010 =2.29 Aditya Birla Money 2009 =0.22 Aditya Birla Money 2008 =39.74 6. Dividend Per Share (DPS) = Net Distributed Profit to equity Shareholders / No. Of Equity Shares

Aditya Birla Money 2012 = (0*100)/554 = 0 Aditya Birla Money 2011 = (0*100)/554 = 0 Aditya Birla Money 2010 = (0*100)/554 = 0 Aditya Birla Money 2009 =(0*100)/554 = 0 Aditya Birla Money 2008 = (4.43*100)/55.4 = 7.99 7. Dividend Pay Out Ratio = ( Dividend Per share / Earning Per share) * 100

Aditya Birla Money 2012 = (0/39.74)*100 = 0 Aditya Birla Money 2011 = (0/0.22)*100 = 0 Aditya Birla Money 2010 =(0/2.29)*100 = 0 Aditya Birla Money 2009 =(0/1.52)*100 = (Loss) Aditya Birla Money 2008 = (7.99/3.22)*100 = (Loss) LIQUIDITY RATIO: There are two important ratios i.e. Current Ratio & Quick Ratio. 1. Current Ratio = Current Assets / Current Liability

Aditya Birla Money 2012 = 155.6/133.71 = 1.16 Aditya Birla Money 2011 = 107.3/117.26 = 0.91 Aditya Birla Money 2010 =114.88/163.84 =0.70 Aditya Birla Money 2009 = 42.01/88.7 = 0.47 Aditya Birla Money 2008 = 107.26/123.48 = 0.86

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2. Quick Ratio = Quick Assets/ Current Liability Where Quick Asset = CA (Inventory +Prepaid Expenses) Aditya Birla Money 2012 = (155.6-0)/133.71 = 1.163 Aditya Birla Money 2011 = (107.3-0)/117.26 = 0.91 Aditya Birla Money 2010 = (114.88-0)/163.84 = 0.70 Aditya Birla Money 2009 = (42.01-0.1)/88.7 = 0.47 Aditya Birla Money 2008 = (107.26-0.33)/123.48 = 0.86

LEVERAGE RATIO : Important ratios under this are Debt Equity Ratio, Interest Coverage Ratio.

1. Debt Equity Ratio = Total Debt/Total Equity


Where, Total Equity = Preference Share Capital + Equity Share Capital + & Surplus Accumulated Loss Total Equity Aditya Birla Money 2012 = 8+5.54+37.64-0 = 51.18 Aditya Birla Money 2011 = 8+5.54+55.47-0 = 69.01 Aditya Birla Money 2010 = 0+5.54 + 51.91 = 57.45 Aditya Birla Money 2009 = 0+ 5.54 +39.23 = 44.77 Aditya Birla Money 2008 = 0+5.54 +38.32 = 43.86 Reserve

Now Debt Equity Ratio is as follows : Aditya Birla Money 2012 = 50.37/51.18 = 0.98 Aditya Birla Money 2011 = 24.93/69.01 = 0.36 Aditya Birla Money 2010 = 40/57.45 = 0.69 Aditya Birla Money 2009 = 5/44.77 = 0.11 Aditya Birla Money 2008 = 40.36/43.86 = 0.92

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ACTIVITY RATIO: The important ratio under this section are Inventory Turn Over Ratio, Working Capital Turn Over Ratio, Fixed Assets Turn Over Ratio, Debtors Turn Over Ratio, & Creditors Turn Over Ratio. 1. Inventory Turn Over Ratio = Cost Of Goods Sold / Average Inventory Where, Cost Of Good Sold = Total Net Sales Gross Profit Average Inventory = (Opening Inventory + Closing Inventory) /2

Gross Profit = Total Income Total Expense So, Cost of Good Sold = Total Net Sales (Total Income Total Expense) Aditya Birla Money 2012 = 88.28-(97.24-102.62) = 93.66 Aditya Birla Money 2011 = 114.28-(115.87-114.42) = 112.83 Aditya Birla Money 2010 = 112.37-(115.9-86.53) = 83 Aditya Birla Money 2009 = 83.1-(86.28-72.03) = 68.85 Aditya Birla Money 2008 = 122.77-(126.4-77.13) = 73.5 Now Inventory Turn Over Ratio: Aditya Birla Money 2012 = Not Possible (Due To Zero Inventory) Aditya Birla Money 2011 = Not Possible (Due To Zero Inventory) Aditya Birla Money 2010 = Not Possible (Due To Zero Inventory) Aditya Birla Money 2009 = 68.85/{(0.1+0.33)/2} = 320.23 Aditya Birla Money 2008 = 73.5/{(0.33+0)/2} = 445.45

2. Working Capital Turn Over Ratio = Cost Of Goods Sold / Net Working Capital Where, Net Working Capital = Current Assets Current Liabilities

Aditya Birla Money 2012 = 93.66/(155.6-133.71) = 4.27 Aditya Birla Money 2011 = 112.83/(107.3-117.26) = -11.32 (Loss)

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Aditya Birla Money 2010 = 83/(114.88-163.84) = -1.69 (Loss) Aditya Birla Money 2009 = 68.85/(42.01-88.7) = -1.47 (Loss) Aditya Birla Money 2008 = 73.5/(107.26-123.48) = -4.53 (Loss)

3. Fixed Assets Turn Over Ratio = Net sales/ Fixed Asset

Aditya Birla Money 2012 = 88.28/0.01 = 8828 Aditya Birla Money 2011 = 114.28/10.01 = 11.41 Aditya Birla Money 2010 = 112.37/0.01=1123.7 Aditya Birla Money 2009 = 83.1/0.03 = 2770 Aditya Birla Money 2008 =122.77/0.05 = 2455.4

4. Return on Assets = Profit After Tax / Average Total Assets

Aditya Birla Money 2012 = -17.83/{(0.01+10.01)/2} = -3.55 (Loss) Aditya Birla Money 2011 = -8.44/ {(10.01+0.01)/2} = -1.68 (Loss) Aditya Birla Money 2010 = 12.68/ {(0.01+0.03)/2} = 634 Aditya Birla Money 2009 = 1.21/ {(0.03+0.05)/2} = 30.25 Aditya Birla Money 2008 = 22.02/ {(0.05+0)/2} = 880.8

INTERPRETATION OF DIFFERENT RATIOS

1. CURRENT RATIO : CURRENT RATIO YEARS Aditya Birla Money Mar08 0.86 Mar09 0.47 Mar10 0.70 Mar11 Mar12 0.91 1.16

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Aditya Birla Money


1.4 1.2 1 0.8 0.6 0.4 0.2 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation: To a creditor, the higher the ratio the better. To the firm, a high current ratio indicates liquidity, but it also may indicate and inefficient use of cash and other short-term assets. Absent some extraordinary circumstances, we would expect to see a current ratio of at least 1, because a ratio of less than 1 would imply a negative working capital number, which over time could mean insolvency. Generally, a number closer to the 2 range would be most desirable for most industry. If we talk about current ratio about of Aditya Birla Money, it is continuously increasing from 2009 to 2012. Its means that its liquidity is increasing continuously. To compete this, it has to increase & maintain its liquidity constantly.

2. QUICK RATIO : QUICK RATIO YEARS Aditya Birla Money Mar08 0.86 Mar09 0.47 Mar10 0.70 Mar11 Mar12 0.91 1.16

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Aditya Birla Money


1.4 1.2 1 0.8 0.6 0.4 0.2 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : The quick ratio or the acid-test ratio - is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The quick ratio is more conservative than the current ratio because it excludes inventory and other current assets, which are more difficult to turn into cash. In the event that short-term obligations need to be paid off immediately, there are situations in which the current ratio would overestimate a company's short-term financial strength. Therefore, a higher ratio means a more liquid current position. If we talk about quick ratio of Aditya Birla Money, this ratio is decreasing from 2008 to 2009 and thereafter continuously increasing (0.47 to 1.16) from 2009 to 2012. It means that in the last four years company has maintained more liquid current positions. which is good for the company. 3. DEBT EQUITY RATIO : DEBT EQUITY RATIO YEARS Aditya Birla Money Mar08 0.92 Mar09 0.11 Mar10 0.69 Mar11 Mar12 0.36 0.98

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Aditya Birla Money


1.2 1 0.8 0.6 0.4 0.2 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : The debt-equity ratio is another leverage ratio that compares a company's total liabilities to its total shareholders' equity. This is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. To a large degree, the debt-equity ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity. Generally, companies with higher ratios are thought to be more risky because they have more liabilities and less equity. If we talk about debt equity ratio of Aditya Birla Money, this ratio is lower than the industry and Indiabulls. It indicates that the company is less risky company than the Indiabulls because the company has less liabilities and more equity.

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4. GROSS PROFIT RATIO : GROSS PROFIT RATIO YEARS Aditya Birla Money Mar08 40.13 Mar09 17.14 Mar10 26.13 Mar11 1.26 Mar12 6.1

Aditya Birla Money


45 40 35 30 25 20 15 10 5 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : If we talk about gross profit ratio of Aditya Birla Money, this ratio is variable from year to year i.e. decreasing & increasing. It means that company was unable to maintained its expenses & income constantly. This is not good sign for the company.

5. NET PROFIT RATIO : NET PROFIT RATIO YEARS Aditya Birla Money Mar08 17.93 Mar09 1.45 Mar10 11.28 Mar11 Mar12 7.38 20.19

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Aditya Birla Money


25 20 15 10 5 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : If we talk about net profit ratio of Aditya Birla Money, this ratio has increased from 2009 to 2010 & from 2011 to 2012 and decreased in the 2009 & 2011. means that company has reduced its expenses & increased its income. .

6. OPERATING PROFIT RATIO :

OPERATING PROFIT RATIO YEARS Aditya Birla Money Mar08 37.41 Mar09 13.32 Mar10 22.90 Mar11 Mar12 0.12 16.24

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Aditya Birla Money


40 35 30 25 20 15 10 5 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : Operating profit margin ratios can give investors deeper insight into management efficiency. But instead of measuring how much managers earn from assets, equity or invested capital, these ratios measure how much money a company squeezes from its total revenue or total sales. Simply it reflects operating efficiency of the firm.

If we talk about operating profit ratio of Aditya Birla Money, it is increased from 2009 to 2010 & from 2011 to 2012 and decreased in the 2009 & 2011 Its means that its company is underperforming in 2009 & 2010 with respect to 2008 and after that it is performing well in the last years. And hope so to performed well in upcoming years.

7. RETURN ON CAPITAL EMPLOYED (ROCE): RETURN ON CAPITAL EMPLOYED (ROCE) YEARS Aditya Birla Money Mar08 26.14 Mar09 2.44 Mar10 13.01 Mar11 Mar12 8.98 17.55

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Aditya Birla Money


30 25 20 15 10 5 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : ROCE is sometimes referred to as the "primary ratio"; it tells us what returns management has made on the resources made available to them before making any distribution of those returns. An increasing Rate of Return is a positive sign, showing the company is making effective use of the assets it has acquired. It is used to show a business' health, specifically by showing how efficiently its investments are used to create a profit. A good ROCE is one that is greater than the rate at which the company borrows. If we talk about ROCE of Aditya Birla Money, it is decreasing in 2009 & 2011 and again it increase in 2010, and 2012. Its means that its company is not able to use of its resources in alternate year

8. EARNING PER SHARE : EARNING PER SHARE RATIO YEARS Aditya Birla Money Mar08 39.74 Mar09 0.22 Mar10 2.29 Mar11 Mar12 1.52 3.22

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Aditya Birla Money


45 40 35 30 25 20 15 10 5 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : If we talk about earning per share of Aditya Birla Money, this ratio has decreased continuously from 2008 to 2011 means that company is not performing very well.

9. DIVIDEND PER SHARE :

DIVIDEND PER SHARE RATIO YEARS Aditya Birla Money Mar08 7.99 Mar09 Mar10 Mar11 Mar12 -

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Aditya Birla Money


9 8 7 6 5 4 3 2 1 0 Mar08 Mar09 Mar10 Mar11 Mar12 Aditya Birla Money

Interpretation : If we talk about dividend per share of Aditya Birla Money, this ratio is almost zero in last four years.

BIBLIOGRAPHY
www.investopedia.com www.adityabirlamoney.com www.moneycontrol.com http://en.wikipedia.org/wiki/Aditya_Birla_Group#Aditya_Birla_Group_of_Companies http://www.adityabirla.com/

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