Академический Документы
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Культура Документы
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.
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
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.
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
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.
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.
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.
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
Asst.
Devang/chirag
10
Gen. Mnts
Vasuji
Electric depart.
Raju & team
QUALITY POLICY
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)
SHREE T.S. PATEL COLLEGE OF M.B.A.
11
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.
12
13
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
14
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.
15
ACCOUNTING PROCESS
Identification of Transaction.
Posting to Ledger.
16
FINANCIAL INFORMATION
17
Particular
Amount(2008)
Paid up Capital
Reserve and surplus
1,20,00,000
195,221,997
18
5,86,689,827
1,21,763,888
78,012,088
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
19
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.
Depreciation/ amortization
20
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.
21
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
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.
Taxation:
1. Provision for current income tax is made as per working under the income tax act,1961.
22
2. (a)
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.
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.
23
24
Mar-08
Mar-09
25
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
26
Mar-07
Mar-08
Mar-09
27
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
11905041
31632922
78012888
2771145
4676186
21309109
14676186
10000000
4676186
36309108
15000000
21309108
99321997
60000000
39321997
for
Research Methodology
The methods or the techniques which have been used for collection and analysis of data in this
study are as follows:
28
(i)
(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:
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.
29
30
MEANING
31
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.
32
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
33
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.
34
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
35
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
36
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.
37
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
Inventory
38
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,
39
Goods
Sold
40
Mar-08
Mar-09
15.44
17.62
16.96
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
41
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.
Credit
Mar-07
Mar-08
Mar-09
15.71
19.41
25.80
Sales
42
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.
43
Mar-08
Mar-09
5.41
5.08
5.82
44
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
SHREE T.S. PATEL COLLEGE OF M.B.A.
45
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
46
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.
47
Mar-08
Mar-09
0.34
0.13
0.14
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
48
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
Mar-08
Mar-09
49
12.99%
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
SHREE T.S. PATEL COLLEGE OF M.B.A.
50
Mar-08
Mar-09
7.76%
12.51%
19.88%
51
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
SHREE T.S. PATEL COLLEGE OF M.B.A.
52
Mar-08
Mar-09
4.75%
8.01%
13.49%
53
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.
54
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.
Mar-08
Mar-09
2.67%
2.38%
2.72%
Ratio
2.70%
2.72%
2.67%
2.60%
2.50%
2.38%
2.40%
2.30%
2.20%
2007
2008
2009
Years
55
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.
56
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%
Operating
expenses
57
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.
58
Mar-07
Mar-08
9.58%
22.10%
33.28%
after
Tax
59
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.
60
Mar-07
Mar-08
99.21%
263.61%
650.11%
Taxes
61
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.
SHREE T.S. PATEL COLLEGE OF M.B.A.
62
Mar-07
Mar-08
9.92
26.36
65.01
equity
shareholders
63
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.
64
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
65
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.
66
BIBLIOGRAPHY
WEBSITE: - www.apollo.co.in
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