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Lets Build Better Roads

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads

HISTORY OF COMPANY
The company was establishing in 1974. At that time in the India, road construction
and other related to equipment work was going on. At that time the owner the Anilbhai Patel
had thought that why they cant establish one branch in Mehsana in G.I.D.C related to produce
these type of machinery or equipment and his thought applied and established this company
APOLLO EARTHMOVERS LTD in Mehsana.

The Group started business operation in 1965 by establishing Apollo Engineering


Company for water welt drilling constructs over a period of time, the company integrated
backwards into production of drilling rigs. It has also started manufacturing of trailers and
agriculture equipments.
An Apollo Industrial Product Private Limited had set up for manufacture mechanical
pavers finisher and hot mox plants. The companys business grew steadily and its product earned
a good reputation in the market
In 1986 the Apollo Earthmover Private Limited termed with Gujarat Industrial
Investment Corporation (GIIC) to set up Gujarat Apollo Equipments Limited (G.A.E.L.).The
company started manufacturing drum type asphalt plant and hydrostatic sensor paver finishers
under a technical collaboration arrangement with Barber Greene, USA.Apollo earthmovers
Limited has been entered in stock exchange just from 19 th June 2001.Apollo Earthmover Limited
company is ISO 9001:2000 certified.

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads

DEVELOPMENT OF COMPANY
The company today offers almost the entire range of equipment that lends them
selves admirably to the road building industry.
The company investment in R&D and quality manpower help in continuous
improvement in product quality that more then meets the existing quality standards of ministry of
surface transport. Indian roads congress irrigation projects. The Apollo group is a Gujarat
industrial house with a business track record of 35 yrs. Their main interests are in,

Road Construction Equipment

Road Construction

Filtration System

Ship Breaking.
For 35 year Apollo have retained leadership by offering state of the art construction

equipment developed through in house R &D and strategic technology tie-ups Apollo company
today offers the entire range of road construction equipment that helps in building roads, which
are safe, durable & economical. Apollos mission is to retain the leadership through continuous R
&D and world class technology availed through technology transfers.
They believe that customer satisfaction is achieved through quality of products &
procedure.

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads

Reason for select this (G.I.D.C.) location for firm:


In those days there was one rule that the company should be in premises. And
electricity was also less costly. The transportation actively very easy because it is established in
the G.I.D.C. The third reason for this location is the mainly this locations very easy to get more
labor for production of product.

Reason for select the name of the company Apollo Earthmovers


Ltd.
When the company was started at that time the satellite name was Apollo was
fallen down on the earth approximately in 1982, so the decider has thought that the name should
be kept the Apollo. And the company producing the road construction or related to help in earth
work so the company have decide the companys name as APOLLO EARTHMOVER LTD

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads

COMPANY PROFILE
Name of the company
APOLLO EARTHMOVERS LTD
Establishment year
The APOLLO EARTHMOVERS LTD was established in1974.

Registered Office
The firms registered office is located in
212-A, G.I.D.C.
ESTATE,
Mehsana-384002
North Gujarat
Ph- (02762) 252362
Fax: 251337
Banker
BANK OF BARODA
Auditor
M.M.SALVI & CO.
Chartered Accountants, Mahesana.
Production Unit
The production of this unit is located at

SHREE T.S. PATEL COLLEGE OF M.B.A.

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APOLLO EARTHMOVERS LTD
212-A, G.I.D.C.
ESTATE,
Mehsana-384002
Board of Directors
Ajitkumar. T. Patel.

Chairman & Managing Director

Anand. A. Patel.

Executive Director

Mitul A.Patel

Executive Director

Manibhai. V. Patel

Director

Rashminbhai. H. Patel

Director

Dharmeshbhai. M. Mashru

Director

Tejas. M. Patel.

Director

Corporate Office
Parishram,
5/B, Rashmi Society, Mithakhali Circle,
Navrangpura,
Ahmedabad- 380009.

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads

Vision of the company


To increase turn over of the product. And to establish prestige of number one at the
world level

Mission of the company


The companys goal is to retain the leadership by designing & building the state of
the art equipment, through technology that is proven and is the best in the world, availed by
license and joint venture with pioneers and leaders in respective field. To make it possible to give
India and the developing world.
With the Ps process, product and people, well and truly in place, Apollo shall be the
supplier by choice of the road construction industry.

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads

SIZE & FORM ORGANISATION

Generally size of the unit is based on the total investment & total employment
made by particular unit. While form of organization is decide on the basis of internal
relationship, authority & responsibility to concerned departments.

Industry can how classified into three categories


(1) small scale industry
(2) medium scale industry
(3) large scale industry
An industry unit said to be large scale unit which invest capital in plant & machinery
APPOLO EARTHMOVERS LTD.
More than 1 crore & use power and also employed workers more than small scale &
medium scale industry.
It is a small industry which is obvious following are the main forms of organization.

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads

EXPERTISE
We are in the road construction industry for a long time - from day 1 of the
mechanization of road construction. From a modest beginning in the year 1972, the group today
offers almost the entire range of equipment that lend themselves admirably to the bituminous
road building industry. One may ask - are you still doing the same thing even 30 years later? The
answer is yes but with one important difference. Today we are doing it better and are moving
forward with the firm belief that our best is yet to come.
The reason- we are constantly on the job to improve on the quality of our products &
services and avoid "waste".
Our definition of "waste" is simple. Any activity that does not add value to the
customer is a waste.We keep abreast of the changes and aim to maintain our leadership through
innovation and world class technology. Value engineering is a way of life at Apollo. No wonder
the advances in Production Engineering you notice in an Apollo equipment is rarely matched by
competition. Advances that help you complete the job faster with high cost savings.
Indigenisation of the technologies for optimum utilization in Indian conditions is the
focus of our design department. Apollo's investment in R & D and quality manpower helps in
continuous improvement in product quality that more than meets the exacting quality standards
of Ministry of Surface Transport, Indian Roads Congress, International Consultants and
customers.
Yes, we have been in this business for a long time, 30 years long. Thirty years during
which we have earned an enviable reputation with the customers for high quality road
construction equipment , prompt after sales service and a customer friendly approach.

SHREE T.S. PATEL COLLEGE OF M.B.A.

Lets Build Better Roads


No stopping but. We will continue to build on our strengths-rich experience, accent
on R & D, customer orientation and adaptability to change. We will keep on improving,
Refining,Changing, Leading the way. Apollo - the best piece of road construction equipment
you'll ever own.

Organization chart
M.D
AJIT.T.PATEL

DGM
MITUL. A. PATEL

Production
Manager
S.K.Patel

Roller prod.
Mr.Prajapati

DM Prod
Jayesh Dave

PLNG, S&S,

K,R.SonI

Finance Dept
Fin. Manager

Asst.
Bela Raturi

Accountant
B.P.Dave

Service team.

Taxes
V.L.Desai

Marketing
manager
Marketing
Executive
Sales force &
Time keeper

Purchase
manager
Anil M Patel

Purchase
Assistant
R.K.Sharma
Store
K.K.Patel

Bpd Prod.
Jignesh Modi

Designing
Babulal
/Tripathi

Mnts & Training


M.G.Darji

Asst.
Devang/chirag

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Gen. Mnts
Vasuji

Electric depart.
Raju & team

QUALITY POLICY

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WE AT APOLLO EARTHMOVERS LIMITAD shall strive to enhance customer
satisfaction by manufacturing product and excellent Quality with customer requirement in focus
quick delivery and providing nation wide services.
We shall continuously improve our quality management system, customer satisfaction
and bring new technology to the customer.

PRODUCTS
Stationary Drum Mix Plants. (DM Series 30 to 150tph)
Mobile Drum Mix Type Asphalt Plants (Mobimix Series 20 to 90tph)
Wet Mix Macadam Plants. (wm Series 60 to 300 tph)
Bitumen Pressure Distributor ( Atm Series 3000 to 10000 liters
Mechanical Broomer.
Hydraulic Broomer.
Tandem Vibratory Roller.
Wet dust Collector.
Chips Spreader
Mechanical Paver Finisher
Hydrostatic Paver Finisher
Wet Mix Paver Finisher
Kerb Laying Machine
Job Work Of;- Mahindra & Mahindra, Sicom (ITALY)
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PRICING POLICY
Price is the main base of the marketing department. Pricing policy is most important
feature in any organization. Without prepare pricing policy organization can not declared the
price of the product. The Apollo Earthmover Ltd is the Sole proprietor firm. The goal of the
company is to provide better quality of the product with reasonable profit.
DM 60- which most costlier then the other equipment the capacity of the machine is
90-120 ton the price is 30-40 lacs
Mechanical Broomer is cheapest machine of all the product the price is 1.75 lacs.

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MEANING
Financial department is concerned with acquisition of funds and investing those funds
in such sources where earning will be higher. Finance play very important role in the every
company. The process of estimation of fund which is requirement for firm & main source of the
fund is called financial planning.
Management Finance is concerned with funds management or treasury function. It is
the duty of the finance manager to arrange for the funds at competitive rates & terms & advises
on its deployment to maximize share holders or owners wealth.

STRUCTURE
Managing Director

Chief Accountant

Accountant

Taxes

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FUNCTION
Budget Preparation.
Budget Administration.
Cost Allocation.
Account Payable.
Bring benefits.
Grants Administration..
Contract administration.
Billing.
Property Inventory.
General Accounting Records.
Fixed Assets Records.
Custody of Funds.
Cash Flow.
Investment.
Debt Administration.
Risk Management.
Internal Financial Reports.
External Financial Reports.
Statutory Reports.
Tax Reports.
Preparation of Budget, Appropriation of accounts, re-appropriation surrender and savings.
Control of expenditure & ways & means position.
Audit.

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Treasury Administrations.
Administrations of Taxes i.e. Sales Tax, Entertainment tax, Entry Tax etc.
Resource mobilization through loans, Institutional finance, small savings, credit &
investment & public debt.

ACCOUNTING PROCESS

Identification of Transaction.

Preparation of Business documents.

Recording of Transaction in Journal.

Posting to Ledger.

Preparation of Unadjusted Trial Balance.

Passing of Adjusted Entries.

Preparation of Adjusted Trial Balance

Profit & Loss Account


SHREE T.S. PATEL COLLEGE OF M.B.A.
Balance Sheet

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Fund Flow Statement

FINANCIAL INFORMATION

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When the company was started at that time the company was initial basis. The
production of goods was less and the sale of the company was also less at that time.
Finance play very important role in the every company. The process of estimation of
fund which is requirement for firm & main source of the fund is called financial planning.
The accountant of the company spares most of the time in making the financial
planning. In Apollo Earthmovers Ltd for requirement of fund the accountant has decided six
monthly or some time yearly forecast of fund.
The company has set targets for each job in terms of money period, time consumed,
and quality assured etc. Apollo Earthmovers Limited makes effective use of fund & collect wild
source of funds. In company financial planning has grater significance.

Particular

Amount(2008)

Paid up Capital
Reserve and surplus

1,20,00,000
195,221,997

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Turn over
Profit before tax

5,86,689,827
1,21,763,888

Profit after tax

78,012,088

Earning Per share

65.01

The above table shows the information about finance of the company. The paid up capital of the
company is Rs.1, 20, 00, 000. On other hand the turnover of the company is more than Rs.58.66
cr. That we can see. In the year 2008 the profit before tax of the company was more than 1.21 cr.
And after tax profit was 0.78 cr. Their earning per share is 65.01. In the G.I.D.C, The Company
gets no. 1 prestige in turn over because in the G.I.D.C this is the first in the turnover more then
any other which is situated in G.I.D.C.

ACCOUNTING POLICY
Convention and basis of preparation of financial statements

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There financial statements have been prepared on the accrual basis of accounting as
per double entry system, under the historical convention, and in accordance with relevant
presentational requirements of the companies Act, 1956 and in accordance with applicable
accounting standards issued by the institute of chartered Accountants of India.

Fixed Assets
Cost of fixed assets comprises purchase price, duties levies and any directly
attributable cost of bringing the asset to its working conditions for the intended use. Borrowing
costs related to the acquisition or construction of the qualifying fixed assets for the period up to
completion of their acquisition or construction are included in the book value of the assets.
All costs relating to up gradations/enhancements are generally charged off revenue expenditure
unless they bring significant additional benefits of lasting nature.
Convert claimed on fixed assets is reduced from the cost of respective assets.

Impairment of fixed assets


An asset is treated impaired when the carrying cost of the assets exceeds its
recoverable. An impairment loss is changed to profit and loss account in the year in which an
asset is identified as impaired. A previously recognized impairment loss is increased or revered
depending on changes in circumstances. However, the carrying value after reversal is not
increased beyond the carrying value that would have prevailed by charging usual depreciation if
there was no impairment.

Depreciation/ amortization

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Depreciation on assets (except intangible assets) is provided in a manner that
amortizes the cost of the assets after commissioning, on the straight-line method at the rates and
in the rates and in the manner prescribed in schedules XIV to the companies, Act, 1956.

Investments
Long-term investments are valued at cost.

Inventories
Inventories are stated at the lower of cost and net realizable value, cost comprise of
expenditure incurred in the normal course of business in bringing such inventories to its location
and includes, where applicable, appropriate overheads based on normal level of activity.
Obsolete slow moving items and provision is made for such inventories. The cost of categories
of inventories is arrived at as follow:
-

Store, spares, raw materials and components-at rates determined on first in first out basis.

Finished goods at full absorption cost method based on annual average cost of product.

Packing materials, loose tools and miscellaneous consumables are charged off at the point
of purchase.

A. excise duty on finished goods and custom duty on raw material is accounted for on
clearance of goods from the factory.
B. Credit of excise duty under cenvat scheme on goods purchased is reduced from the cost
of purchase.

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Retirement benefits
-

Contributions payable, which are under defined contribution scheme and funded

and recognized as years expenditure. Contributions under defied benefit schemes, as determined
on the basis of actuarial valuation, are also funded and recognized as years expenditure.
-

Liability for gratuity determined on basis of actuarial valuation is funded with life

insurance corporation of India under group gratuity ( Cash Accumulation) scheme and annual
premium thereon is paid and accounted for accordingly.
-

Provision is made for Leave Encashment benefits based on actuarial valuation and

charged to the profit and loss account.

Revenue Recognition
-

Sales of products and services are recognized on dispatch of goods or when the services
are rendered sales are stated at contractual realizable values, and trade discounts.

Expenses are accounted for on accrual basis and provision is made for all known losses
and liabilities.

Liquidated damages/penalties are provided for wherever there is a delayed delivery.

Commission income if any is recognized as per contracts/receipt of credit note.

Dividend income is recognized when the right to receive dividend is established.

Interest income is recognized on the time proportion method.

Research and Development:


No such expenditure incurred during the year

Taxation:
1. Provision for current income tax is made as per working under the income tax act,1961.

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2. (a)

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Deferred tax is recognized as timing differences, being the difference between

taxable income and accounting income that originate in one period and are capable of
reversing in one or more subsequent periods.
(b) Deferred tax assets are recognized only to the extent there is a reasonable certainty of its
realization.
(c) Deferred tax assets arising from temporary timing differences are recognized to the
extent there is reasonable certainly that the assets can be realized in future. A deferred tax
asset on unabsorbed depreciation and carry forward losses is recognized only when there is
virtual certainty that there will be sufficient future taxable income available to realize such
assets.
3. Provision of fringe Benefit Tax(FBT) is made on the basis of expenses incurred on
employees/ other expenses as prescribed under the income tax act, 1961.

Foreign Currency Transactions


Transactions in foreign currencies are recorded at the exchange rate of the date of
transaction or at the exchange rates under forward exchange contracts. Current assets and current
liabilities not covered by forward exchange contracts are translated at the year end exchange
rates and the profit/ loss so determined and also the realized exchange gain/ losses are in the
profit & loss account, except those relating to acquisition of fixed assets which are capitalized.
Gains or losses on foreign exchange rate fluctuations relating to current assets and
liabilities are accounted at the year end.

Contingent liabilities
Contingent liabilities are not provided for in the accounts for in the accounts and are
disclosed separately in notes to accounts.

Borrowing Cost
No such has been made during the year.

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BALANCE SHEET AS AT 31ST MARCH

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Mar-07

SHREE T.S. PATEL COLLEGE OF M.B.A.

Mar-08

Mar-09

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SOURCES OF FUNDS
Owners s Fund
Equity Share Capital
Share Application Money
Preference Share Capital
Reserve & Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax
Deferred Tax liabilities
Total
Application Of Fund
Fixed Assets
Gross Block
Less: Revaluation Reserve
Less: Accumulated Depreciation
Net Block
Capital Work in-progress
Investment
Net Current Assets
Current Assets Loans & Advance
Less: Current Liabilities & Provision
Total net Current Assets
Miscellaneous expenses not written
Total
Note:
Book Value of Unquoted Investments
Market Value of quoted Investments
Contingent Liabilities
Number of Equity shares outstanding (in
lacs)

SHREE T.S. PATEL COLLEGE OF M.B.A.

12000000
0
0
85576186

12000000
0
0
117209108

12000000
0
0
195221997

1473873
22750296

9727947
1619225

4782592
19944062

2441617
124241972

2574195
143130475

2465195
234413846

29807680
0
12374601
17433079
0

34720966
0
14267802
20453164
0

65934638
0
16331353
49603285
0

52514500

56949353

56914500

94536740
40242347
54294393
0
124241972

147004376
81276418
65727958
0
143130475

212942059
85045998
127896061
0
234413846

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PROFIT AND LOSS FOR ENDED 31ST MARCH


Apollo Earthmovers Ltd

SHREE T.S. PATEL COLLEGE OF M.B.A.

Mar-07

Mar-08

Mar-09

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Income:
Operating Income

250873716

395005374

578169689

Expenses:
Material Consumed
Manufacturing Expanses
employee cost
Selling Expanses
Administrative Expenses
sales tax

200508015
11221515
6274868
1978294
4724097
4847749

302642859
22042992
5959252
7612859
1794818
3646880

417993381
17716693
6579931
2450935
13262645
3167558

Cost of sales

229554538

343699660

461171143

Operating Profit

21319178

51305714

116998546

Adjusted PBDIT

21319178

51305714

116998546

Financial Expenses :

1085351

-102987

-6828893

Depreciation
Other write offs
Adjusted PBT

1853093

1893201

2063551

18380734

49515500

121763888

Tax Charges

6475693

17882578

43751000

Adjusted PAT
Non Recurring Item
Other Non Cash Adjustment

11905041

31632922

78012888

Reported Net Profit

11905041

31632922

78012888

2771145

4676186

21309109

14676186
10000000
4676186

36309108
15000000
21309108

99321997
60000000
39321997

Other Recurring Income

Last Year Profit


Amt.
Available
Appropriation
General Reserve
Retained Earnings

for

Research Methodology

The methods or the techniques which have been used for collection and analysis of data in this
study are as follows:

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(i)

Collection of Data: The data of study for the period 2008 to


2010 used in this study has been collected from the Annul
Reports for the years 2008 to 2010.

(ii)

Analysis of Data : For analysing the data the technique of ratio analysis , simple
mathematical tools like percentages and averages etc. and simple statistical
technique like Simple Correlation Technique have been used

REASEARCH DESIGN: DATA COLLECTION:The information is collected through the PRIMARY SOURCES like:

Getting information from HR department.

Data was collected from following SECONDARY SOURCES like

Account department
Audit department

PRIMARY DATA:The primary data is collected by discussion with the manager of account department and
HR department.
SECONDARY DATA:Secondary data regarding sales figures, promotional expenses were collected from the
company own record to analyze the impact on sales due to the running scheme and make
cost benefit analysis.

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MEANING

Ratio, broadly speaking, is the numerical relationship between to


numbers, and hence ratio analysis of statement stands for the process of
determining and presenting the relationship of items and groups of items in the
statements. The following are the importance and uses of ratio analysis.
Ratio analysis is the powerful tool of financial analysis. A ratio is defined as relation
between two or more thing or as the systematic use of the ratio to interpret the financial
statement. So that the strength and weakness of a firm as well historical performance & Current
financial condition can be defined.
According to Meyers, ratio analysis is a study of relation among the various
financial factors in a business.
It is used as benchmark for evaluation the financial position and performance of the
company.
A ratio indicated quantities relationship which can be used to qualitative conclusion.
This relationship can be expressed as:
Percentage
Proportion
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Fraction

IMPORTANCE OF RATIO
The ratio analysis is one of the powerful tools of the financial analysis.
It is used as a device to analysis more clearly and decisions made from such
analysis.
The use of ratio is not confined to financial manager only. There are
different parties in ratio analysis for knowing the financial position of the firm
for different purposes. The supplier of the goods on credit, banks, financial
institutions, investors, shareholders and management make use of ratio analysis
as a tool in evaluating the financial position and performance of a firm for
granting credit, providing loans for making investments in the firm. Thus, ratios
have wide applications and are of immense use today.

Ratio analysis is the powerful tool of financial analysis. A ratio is defined as relation
between two or more thing or as the systematic use of the ratio to interpret the financial
statement. So that the strength and weakness of a firm as well historical performance & Current
financial condition can be defined.
According to Meyers, ratio analysis is a study of relation among the various
financial factors in a business.

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It is used as benchmark for evaluation the financial position and performance of the company.
A ratio indicated quantities relationship which can be used to qualitative conclusion.
This relationship can be expressed as:
Percentage
Proportion
Fraction

ADVANTAGES OF RATIO ANALYSIS

I. Lee observed that the process of producing financial ratio is essentially concerned with
the identification of the significant accounting data relationships, which give the decision
makers insights into the company that is assessed.
II. A ratio analysis involves the study of total financial picture. By basing conclusion upon
thorough understanding of the important of each ratio, the analyst can recommend and
indicate positive action with confidence.
III. One of the most fruitful areas for the use of traditional financial ratio seems to be that of
predication company failures.
IV. Ratio are tool which enables management to analysis business situation and to monitor
their performance as well as that of their competitors.
V. Ratio analysis helps the management to diagnose the situation, monitor the performance
and help plan forward.
VI. There are certain priority ratios for chief executives. There are related to key areas, which
are common to nearly all businesses and with which top management is seriously
concerned. These priority ratios enable the chief executive to understand the relationship
between his organizations. At one end, and the market, investors, suppliers and
employees. He is also in a position to watch how well the organization is using its assets
and how well it is providing for the future.
VII. There are ratio which help the marketing manager, the purchasing manager, the financial
manager and other representing the middle management to know the what positions are
like how to make a way in typical situations, from time to time

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DISADVANTAGES OF RATIO ANALYSIS

I. Erich Helfert points out that it is essential for a person analyzing business performance to
have a clear awareness of the tests he should apply and the specific reasons for which he
should apply them. Temptation arises in financial ratio analysis to run all the numbers,
yet select only a few relationships, which would provide clues for judgment.
II. Financial statement is generally based on historical or original cost. The current economic
conditions are ignored.
III. Not all ratio and percentages are significant and useful. One should be aware of the
temptation to calculate them for their own sake.
IV. In using ratio computed by others, one should realize, that the computation of a particular
ratio not necessarily been standardize.
V. Most ratios represent avg. and therefore, may tend to obscure large variations in the
underlying causative factors above and below the avg.
VI. Ratio are based on financial statement suffer from the limitation inherent in these
statements.
VII. Changes in many ratios are closely associated with one another.

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CLASSIFICATION OF RATIO
A. LIQUDITY RATIO
1) Current Ratio
2) Quick Ratio
3) Inventory Turnover Ratio
4) Debtor Turnover Ratio
5) Creditors Turnover Ratio
B. LEVERAGE RATIO
1) Debt-Equity Ratio
2) Debt Total Assets/capital Ratio
C. PROFITABILITY RATIO
1) Gross Profit Margin Ratio
2) Operating Profit Margin Ratio
3) Net Profit Ratio
D. EXPENSE RATIO
1) Operation Expense Ratio
2) Operating Ratio

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E. PROFITABILITY RATIO RELATED TO INVESTMENT
1) Return on Assets
2) Return on Shareholders Equity
3) Earning per Share

LIQUIDITY RATIO
1) Current Ratio:
The current ratio is the measure of the firms short term solvency. It indicates the
availability of current assets in rupees for every one rupee of current liability. A ratio greater than
one means that the firm has more assets than the current claims against them. Current assets
normally include cash, marketable securities, accounts receivable and inventories. Current
liabilities consist of accounts payable, short term notes payable, short-term loans, current
maturities of long term debt, accrued income taxes and other accrued expenses (wages). The
current ratio can be found out from the following equation.
Current Ratio =
Current
--------------------Current Liabilities

Assets

Mar-07

Mar-08

Mar-09

2.35

1.81

2.50

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Current Ratio
3.00

Ratio

2.50

2.35

2.50

1.81

2.00
1.50
1.00
0.50
0.00
2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=
=

94536740
40242347
2.35 times
147004376
81276418
1.81 times
212942059
85045998
2.50 times

Interpretation:
A ratio of 1 would indicate that the company has exactly enough cash (or assets
that is relatively easy to turn into cash) to pay off its debt. If the ratio is higher than 1, the
company can successfully pay off its debt while at the same time still has cash leftover to
continue operating. Naturally, if the ratio is under 1, then investors should be weary of the
fact that the company cannot pay off its short-term debt if necessary. A company has a ratio of
2.5; one can say the company can pay off its liabilities more than two times over.

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From the graph we can see the current ratio of the company of the last three years. We
can see that the current ratio of the company decrease 1.81 times in 2008 and increase 2.50 in
2009 as compare 2.35 in 2007. The conventional rule for this ratio is 2:1 or more is considered
satisfactory. The higher the current ratio the greater the margin of safety for creditors. That
means companys currents assets are increasing in current year. So company is growing in strong
position against its current obligation.

2) Quick Ratio
This ratio is called the Acid Test Ratio. It established the relationship between quick
assets and current liabilities. An asset is liquid if it can be converted in to cash immediately
without a loss of value. The quick ratio is a variant of the current ratio. It takes into account the
fact that inventory, while it is a current asset, is not as liquid as cash or accounts receivable. Cash
is completely liquid; accounts receivable can normally be converted to cash fairly quickly, by
pressing for collection from the customer. But inventory cannot be converted to cash except by
selling it. This ratio is calculated from the following equation.
Quick Ratio =
Current
--------------------Current Liabilities

Assets

Mar-07

Mar-08

Mar-09

1.94

1.53

2.13

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Inventory

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Quick Ratio
2.50

2.13
1.94

Ratio

2.00

1.53
1.50
1.00
0.50
0.00
2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=
=

94536740-16506906
40342347
1.94 times
147004376-22500455
81276418
1.53 times
212942059-31867935
85045998
2.13 times

Interpretation:
Quick ratio represents the company ability to meet its immediate obligation.
Generally, a quick ratio of 1:1 is considered to present a satisfactory current financial condition.
A quick ratio 1:1 or more does not necessarily imply sound liquidity position. Thus, a company
with high value of quick ratio can suffer from the shortage of funds if it has slow paying,

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doubtful and long-duration outstanding debtors. On the other hand, a company with a low value
of quick ratio may really be prospering and paying its current obligating in time if it has been
turning over its inventories efficiently.
From the graph we can see the quick ratio of the company of the last three years. The
company has very well in the quick ratio. In 2009, it increases. But it slightly decreases in the
year 2008. Over all the companys position is good in terms of quick ratio. So we can say that
firm can able to pay their liability quickly.

3) Inventory Turnover Ratio


The inventory turn over ratio indicates the efficiency of the firm in producing and
selling the product. It shows how much time the inventory has turnover in a year. More the
turnover, it is a better the companys efficiency in handing the inventory. No company wants to
have too large an inventory (the sales force accepted: salespeople prefer to be able to tell their
customers that they can obtain their purchase this afternoon). Goods that remain in inventory too
long tie up the company's assets in idle stock, often incur carrying charges for the storage of the
goods, and can become obsolete while awaiting sale.
Just-in-Time inventory procedures attempt to ensure that the company obtains its
inventory no sooner than absolutely required in order to support its sales efforts. That is, of
course, an unrealistic ideal, but by calculating the inventory turnover rate you can estimate how
well a company is approaching the ideal. The inventory turnover ratio is calculated from the
following equation.
Inventory Turnover Ratio =
Cost
of
--------------------Avg. Inventory

SHREE T.S. PATEL COLLEGE OF M.B.A.

Goods

Sold

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Mar-07

Mar-08

Mar-09

15.44

17.62

16.96

Inventory Turnover Ratio


18.00

17.62

17.50

16.96

Ratio

17.00
16.50
16.00

15.44

15.50
15.00
14.50
14.00

2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=

229554538
{(13218970+16506906)/2}
15.44 times
343699660
{(16506906+22500455)/2}
17.62 times
461171143
{(22500906+ 31867935)/2}
=
16.96 times

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Interpretation:
It is important to see how well the company is able to sell its inventory compared to
its competitors. Naturally, the higher the ratio, the stronger the sales. A low ratio would possibly
indicate poor sales. The ratio shows a relatively high stock turnover which would seem to
suggest that the business deals in fast moving consumer goods.
The company turned over stock 15.44 times in 2007 and 16.96 in 2002. The trend shows a
marginal increase in times which indicates a fast turnover of stock. The high stock turnover ratio
would also tend to indicate that there was little chance of the firm holding damaged or obsolete
stock. The company is efficiency in handing the inventory. That means it is increase the sales.

4) Debtor Turnover Ratio


Measures the firms ability to collect payment from its customers, ex. its ability to
collect the cash from someone who paid by credit. A higher ratio indicates the firms efficiency
in its ability to collect those payments, and/or the company operates more on a cash basis. A low
ratio may mean that the company should possibly re-think its credit policies and find out why the
firm cannot collect its customers payments on a timely fashion.
Debtor Turnover Ratio =
Net
--------------------Avg. Debtors

Credit

Mar-07

Mar-08

Mar-09

15.71

19.41

25.80

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Sales

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Debtor Turnover Ratio
30.00

25.80

Ratio

25.00
19.41

20.00

15.71

15.00
10.00
5.00
0.00
2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=
=

250873716
{(11670861+20269067)/2}
15.71 times
395005374
{(20269067+20433538)/2}
19.41 times
578169689
{(20433538+24388657)/2}
25.80 times

Interpretation:
From the graph we can see the debtor turnover ratio of the company of the last three
years. From the graph we can say that the companys management of credit is efficient. The
debtors turnover ratio was 15.71 times in 2007 which goes up in last two years. That means the
company is efficient in their credit recovery.

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5) Creditors Turnover Ratio


It is ratio between net credit purchase and the average amount of creditors
outstanding during the year. A low turnover ratio reflects liberal credit terms granted by
suppliers, while a high ratio shows that accounts are to be settled rapidly. The creditors turnover
ratio is an important tool of analysis as a firm can reduce its requirement of current assets by
relying on suppliers credit. The creditors turnover ratio can be found out from the following
equation.

Creditors Turnover Ratio =


NetCreditPurchase
--------------------Avg. Creditors
Mar-07

Mar-08

Mar-09

5.41

5.08

5.82

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Creditors Turnover Ratio
6.00

5.82

Ratio

5.80
5.60

5.41

5.40
5.20

5.08

5.00
4.80
4.60
2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=
=

200508015
{(34087954+39990116)/2}
5.41 times
395005374
{(39990116+79141246)/2}
5.08 times
417993381
{(79141246+64612250)/2}
5.82 times

Interpretation:
From the graph we can see the creditors turnover ratio of the company of the last
three years. We can see that the creditors turnover ratio was 5.41 times in 2006 which come
down for normal point in two years. That means it is low turnover ratio. It is liberal credit terms
granted by suppliers.

LEVERAGE RATIO
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1) Debt Equity Ratio


The Total Debt to Equity ratio helps us measure a companys financial leverage. It
reflects the relative position of the equity holders and the lenders and indicates the companys
policy on the mix of capital funds. It shows us how much of a companys financing of assets is
due to investors putting in money into the company, or perhaps loans taken out by banks. The
debt-equity ratio can be found out from the following equation.
Debt Equity Ratio =
LongTermDebt
--------------------Share Holders Equity
Mar-07

Mar-08

Mar-09

0.02

0.08

0.02

Debt-Equity Ratio
0.08

0.08
0.07
Ratio

0.06
0.05
0.04
0.03

0.02
0.02

0.02
0.01
0.00

2007

2008

2009

Years

Year 2007

4173873

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=
Year 2008

Year 2009

=
=
=

12000000+85576186
0.02
9727947
12000000+117209108
0.08
4782592
12000000+195221997
0.02

Interpretation:
The D/E ratio is an important tool of financial analysis to appraise the financial
structure of a firm. It has important implications from the view point of the creditors, owners and
the firm itself. The ratio reflects the relative contribution of creditors and owners of business in
its financing. The D/E ratio indicates the margin of safety to the creditors. A ratio greater than
1 indicates the companys assets are mainly financed with debt, while a ratio less than 1
indicates the companys assets are primarily supplied with equity. The higher the ratio, the more
leverage a company has, also indicating that it is aggressively financing its assets with debt. The
benefits are two-fold: This may mean that their earnings are/will be more volatile and at a higher
risk of defaulting (going bankrupt), but also means a higher potential payout to the companys
investors and shareholders.
From the graph we can see that it is low ratio that means to the creditors, a relatively
high stake of the owners implies sufficient safety margin and substantial protection against
shrinkage in assets.

2) Debt Total Assets / Capital Ratio


The relationship between creditors funds and owners capital can also be expressed
in terms of another leverage ratio. This is the debt to total capital ratio. Here, the outside
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liabilities are related to the total capitalization of the firm and not merely to the shareholders
equity. The debt to capital ratio is to relate the total debt to the total assets of the firm the debt of
the firm comprises long term debt plus current liabilities. The debt total assets/capital ratio can
be found out from the following equation.

Debt Total Assets / Capital Ratio =


TotalDebt
--------------------Total Assets
Mar-07

Mar-08

Mar-09

0.34

0.13

0.14

Debt Total Assets/capital Ratio


0.40
0.34

0.35

Ratio

0.30
0.25
0.20
0.15

0.13

0.14

2008

2009

0.10
0.05
0.00
2007

Years

Year 2007

=
=

Year 2008

Year 2009

=
=

4173873+22750296
17433079+54294393
0.34
9727947+1619225
20453164+65727958
0.13
4782592+19944062

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=

12000000+195221997
0.14

Interpretation:
If the ratio is above 1, that would indicate that the majority of the companys
assets are financed through debt, while if the ratio is under 1, than the company is primarily
financed through equity.
From the graph we can see that the debt total assets ratio is 0.13 in 2008 and 0.14 in
2008 as compare to the year of 2006. That means a low ratio is desirable from the creditors as
there is sufficient margin of safety available to them. But its implications for the shareholders are
that debt is not being exploited to make available to them the benefit of trading on equity

PROFITABILITY RATIO
1) Gross Profit Margin Ratio
The gross profit margin measures the amount that customers are willing to pay for a
company's product, over and above the company's cost for that product. As mentioned
previously, this is the value that the company adds to that of the products it obtains from its
suppliers. This margin can depend on the attractiveness of additional services, such as
warranties, that the company provides. The gross profit margin also depends heavily on the
ability of the sales force to persuade its customers of the value added by the company. The gross
profit margin ratio can be found out from the following equation.
Gross Profit Margin Ratio =
GrossProfit
--------------------Sales
Mar-07

SHREE T.S. PATEL COLLEGE OF M.B.A.

Mar-08

Mar-09

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8.50%

12.99%

20.24%

Gross Profit Margin Ratio


25.00%
20.24%

Ratio

20.00%
15.00%

12.99%
8.50%

10.00%
5.00%
0.00%

2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=
=

23319178
250873716
8.50%
51305714
395005374
12.99%
116998546
578169689
20.24%

Interpretation:
The ratio above shows the increasing trend in the gross profit since the ratio has
improved from 8.50% in 2007 to 20.24% on 2009. A high ratio of gross sales is sign of good
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management as it implies that the cost of production of the firm is relatively low. This indicates
that the rate in increase in cost of goods sold are less than rate of increase in sales, hence the
increased efficiency.

2) Operating Profit Margin Ratio


The operating profit margin indicates how much profit a company makes after paying
for variable costs of production such as wages, raw materials, etc. It shows the efficiency of a
company controlling the costs and expenses associated with its business operations. The
operating margin is another measurement of managements efficiency. It compares the quality of
a companys operations to its competitors. A business that has a higher operating margin than its
industrys average tends to have lower fixed costs and a better gross margin, which gives
management more flexibility in determining prices. This pricing flexibility provides an added
measure of safety during tough economic times.

Operating Profit Margin Ratio =


EBIT
--------------------Sales
Mar-07

Mar-08

Mar-09

7.76%

12.51%

19.88%

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Operating Profit Margin Ratio
25.00%
19.88%

Ratio

20.00%
15.00%

12.51%

10.00%

7.76%

5.00%
0.00%
2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=
=

18380734+108551
250873716
7.76%
49515500+(102987)
395005374
12.51%
121763888+(6828893)
578169689
19.88%

Interpretation:
Operating profit margin measures a companys operating efficiency and pricing
efficiency with its successful cost controlling. The higher the ratio, the better a company is. A
higher operating profit margin means that a company has lower fixed cost and a better gross
margin or increasing sales faster than costs, which gives management more flexibility in
determining prices. It also provides useful information for investors to determine the quality of a
company when looking at the trend in operating margin over time and to compare with industry
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peers. The ratio indicates that there is increase in operating profit margin from 7.76% in 2007 to
19.88% in 2009. That means a companys operating efficiency and pricing efficiency with its
successful cost controlling.

3) Net Profit Ratio


The net margin is indicative of managements ability to operate the business with
sufficient success not only to recover from revenues of the period, the cost of merchandise or
service, the expenses of operating the business and the cost of the borrowed funds but also to
leave a margin of reasonable compensation to the owners for providing their capital at risk. The
ratio of net profit to sales essentially expresses the cost price effectiveness of the operation. The
net profit margin ratio can be found out from the following equation.

Net Profit Ratio =


EAT
--------------------Sales
Mar-07

Mar-08

Mar-09

4.75%

8.01%

13.49%

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Net Profit Ratio
16.00%
13.49%

14.00%

Ratio

12.00%
10.00%

8.01%

8.00%
6.00%

4.75%

4.00%
2.00%
0.00%
2007

2008

2009

Years

Year 2007

=
=

Year 2008

Year 2009

=
=
=

11905041
250873716
4.75%
31632922
395005374
8.01%
78012888
578169689
13.49%

Interpretation:
The ratio above shows the increasing trend in the net profit since the ratio has
improved from 4.75% in 2007 to 13.49% on 2009. That means a high net margin and it is
efficient managements ability to operate the business. It can make better use of favorable
conditions, such as rising selling price, filling costs of production and increasing demand for the
products. We can conclude Apollo being very efficient with keeping its expenses at a minimum
and its ability to retain much of its sales as profit.

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EXPENSE RATIO
1) Operation Expanse Ratio
The Operating Expense Ratio is usually viewed as a measurement of management
efficiency. This is because management usually has greater control over operating expenses than
they do over revenues. The operating expense ratio can tell you if management can expand
operations without dramatically increasing expenses. The earning per share ratio can be found
out from the following equation.

Operation Expanse Ratio =


Administrativeexpenses+sellingexp
--------------------Net Sales
Mar-07

Mar-08

Mar-09

2.67%

2.38%

2.72%

Operation Expanse Ratio


2.80%

Ratio

2.70%

2.72%
2.67%

2.60%
2.50%
2.38%

2.40%
2.30%
2.20%
2007

2008

2009

Years

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Year 2007

4724097+1978294
250873716
2.67%

=
Year 2008

Year 2009

=
=
=

1794818+7612859
395005374
2.38%
13262645+2450935
578169689
2.72%

Interpretation:
The operating expense ratio is an indicator of how efficiently a property is being
managed. The lower the operating expense ratio, the greater the profit for the investor or
investors. As the owner or manager of an income producing property, you should be assessing
what steps you can take to reduce vacancies, reduce operating expense items. The ratio indicates
that there is increase normal point from 2.67% in 2006 to 2.72% in 2008. That means it is
controlling the expenses and effective managed the firm.

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2) Operating Ratio
Operating Ratio is calculated in order to calculate the operating efficiency of the
concern. As this ratio indicates about the percentage of operating cost to the net sales, so it is
better for a concern to have this ratio in less percentage. The less percentage of cost means
higher margin to earn profit. A company's operating ratio gives an indication of what percentage
of net sales is used to pay for the cost of goods and overhead. The lower the ratio, the more
money is available to pay off debts or to invest into the business.
Operating Ratio =
Cost
of
--------------------Net Sales

goods

sold+

Mar-06

Mar-07

Mar-08

95.98%

92.59%

82.83%

SHREE T.S. PATEL COLLEGE OF M.B.A.

Operating

expenses

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Year 2006
250873716
=

229554538+11221515

Year 2007
395005374
=
Year 2008
578169689
=

343699660+22042992

92.59%
=

461171143+17716693

95.98%

82.83%

Interpretation:
Operating Ratio is a measurement of the efficiency and profitability of the business
enterprise. The ratio indicates the extent of sales that is absorbed by the cost of goods sold and
operating expenses. Lower the operating ratio is better, because it will leave higher margin of
profit on sales and higher the operating ratio is bad, because it will leave lower margin of profit
on sales. The ratio indicates that there is decrease from 95.98% in 2006 to 82.83% in 2008. That
means it will leave higher margin of profit on sales.

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PROFITABILITY RATIO RELATED TO INVESTMENT


1) Return on Assets
One of management's most important responsibilities is to bring about a profit by
effective use of the resources it has at hand. One ratio that speaks to this question is return on
assets. Here, the profitability ratio is measured in terms of the relationship between net profit and
assets. The ROA may also be called profit-to-asset ratio. The real return on the total assets is the
net earning available to owners. The return on assets ratio can be found out from the following
equation.
Return on Assets =
Net
Profit
--------------------Average total Assets
Mar-06

Mar-07

Mar-08

9.58%

22.10%

33.28%

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after

Tax

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Year 2006
=
17433079+52514500+54294393
=
9.58%

11905041

Year 2007
=
20453164+56949353+65727958
=
22.10%
Year 2008
=
49603285+56914500+127896061
=
33.28%

31632922

78012888

Interpretation:
This ratio measures the pre tax rate of return on assets and can be used to measure the
effective utilization of assets on the profitability of the business. An indicator of how profitable a
company is relative to its total assets. ROA gives an idea as to how efficient management is at
using its assets to generate earnings. The ratio indicates that there is increase in the ROA from
9.58% in 2006 to 33.28% in 2008. That means the percentage of the real return on the assets is
lead to increase net earning of the owners. The company is effective utilization of assets on the
profitability of the business.

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2) Return on Total Shareholders' Equity


Return on Equity judges the profitability from the point of view of equity
shareholders. This ratio has great interest to equity shareholders. The return on equity measures
the profitability of equity funds invested in the firm. The investors favour the company with
higher ROE. The amount of net income returned as a percentage of shareholders equity. Return
on equity measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested. The return on shareholders equity ratio
can be found out from the following equation.
Return on Total Shareholders' Equity =
Net
Profit
after
--------------------Average total shareholders equity
Mar-06

Mar-07

Mar-08

99.21%

263.61%

650.11%

SHREE T.S. PATEL COLLEGE OF M.B.A.

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Year 2006
12000000
=

11905041

Year 2007
12000000
=
Year 2008
12000000
=

31632922

263.61%
=

78012888

99.21%

650.11%

Interpretation:
This ratio relates the pre tax returns to the level of equity capital employed in the
business. Caution should be used when interpreting this ratio. A high ratio, normally associated
with a profitable firm, may indicate an under capitalized firm while a low ratio, which normally
indicates an inefficient or unprofitable firm. The ratio indicates that there is increase in the ROE
from 9.58% in 2006 to 33.28% in 2008. That means the firm has earned a satisfactory return for
its equity shareholders. The rate of return on shareholders equity is of crucial significance in
ratio analysis vis--vis from the point of the owners of the firm.
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3) Earning Per Share


Whatever income remains in the business after all prior claims, other than owners
claims (i.e. ordinary dividends) have been paid, will belong to the ordinary shareholders who can
then make a decision as to how much of this income they wish to remove from the business in
the form of a dividend, and how much they wish to retain in the business. The shareholders are
particularly interested in knowing how much has been earned during the financial year on each
of the shares held by them. The earning per share ratio can be found out from the following
equation.
Earning Per Share =
Net
profit
available
to
--------------------Number of ordinary share outstanding
Mar-06

Mar-07

Mar-08

9.92

26.36

65.01

SHREE T.S. PATEL COLLEGE OF M.B.A.

equity

shareholders

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Year 2006
12000000
=

11905041

Year 2007
12000000
=
Year 2008
12000000
=

31632922

26.36
=

78012888

9.92

65.01

Interpretation:
The earnings per share ratio is mainly useful for companies with publicly traded
shares. Most companies will quote the earnings per share in their financial statements saving you
from having to calculate it yourself. By itself, EPS doesn't really tell you a whole lot. But if you
compare it to the EPS from a previous quarter or year it indicates the rate of growth a companies
earnings are growing (on a per share basis). The ratio indicates that there is increase in the EPS
from 9.58% in 2006 to 33.28% in 2008. That means it is increase the growth of company. The
company is able to use its equity share capital effectively with compare to other companies.

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SWOT ANALYSIS
STRENGHTS
ISO 9001 certified company
Acknowledged market leader with high level of customer goodwill
Always close to the customer. Proactive lather than reactive to changing market needs
Large customer base & high brand loyalty
Fastest deliveries of equipment and spare parts.

WEAKNESSES
In competition with the foreign companies, price of the equipment is high compare to the
foreign companies
There is a lot of noise pollution at the work place. This noise is dangerous for the workers

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OPPORTUNITIES
Opportunity always exists but main thing is they need to be realized and recognized. This
requires a strong motivational factor and premium foresight

THREATS
There is no interference of anyone except the government because the Apollo
Earthmovers Limited is limited company

CONCLUSION
APOLLO EARTHMOVERS LTD is Indias No 1 manufacture of road
construction & maintenance equipment. There are very less competitors against Apollos product
in market and quality of its products is better than competitors. Its products are increasing every
year so there is bright future for company. The chairman and managing director is wellexperienced person. He has experience in this field. The most important is that companys main
aim is not make profit but with profit to provide maximum service to the company in any time or
position.
Company also contributes to the nation by earning foreign exchange. Company serves
society providing full employment to the skilled and also unskilled people and brings up their
standard of living. APOLLO EARTHMOVERS LTD is able to use maximum capacity of
manpower and also of technical know how nowadays. This shows quality improvement of
product and best management company. By these step of company there may be possible of
improvement in technology knowledge in country.

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I have really a unique experience in Apollo Earthmovers Ltd, mehsana during my
training period. I have learnt many unknown things, which are out of my knowledge of
management aspects. I have found there the management in my practical life. I have collected all
my necessary information from the concerning department by myself. I have come across many
intelligent and expert persons in the Apollo Earthmovers Ltd.

BIBLIOGRAPHY

FINANCIAL MANAGEMENT: - BY I M Pandey

FINANCIAL MANAGEMENT: - M Y Khan & P K Jain

WEBSITE: - www.apollo.co.in

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