RATIO ANALYSIS

FOR
SUN PHARMACEUTICALS LIMITED IN
 SUN PHARMACEUTICAL LIMITED

Balace Sheet (Figurs in Crores)

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 94.16 94.27 98.07 103.56 103.56
Equity Share Capital 92.76 92.87 96.7 103.56 103.56

Share Application Money 0.01 0 0 0 0

Preference Share Capital 1.4 1.4 1.37 0 0

Reserves 1,011.28 1,370.67 2,351.42 4,104.06 5,047.86

Revaluation Reserves 0 0 0 0 0
Networth 1,105.45 1,464.94 2,449.49 4,207.62 5,151.42

Secured Loans 13.92 18.23 20.39 22.88 23.6

Unsecured Loans 1,800.73 1,727.59 1,047.76 79.64 0
Total Debt 1,814.65 1,745.82 1,068.15 102.52 23.6

Total Liabilities 2,920.10 3,210.76 3,517.64 4,310.14 5,175.02

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 612.05 744.26 838.7 935.03 1,061.90

Less: Accum. Depreciation 172.9 208.07 249.41 304.99 362.64
Net Block 439.15 536.19 589.29 630.04 699.26
Capital Work in Progress 47.94 30.8 33.43 75.95
Investments 985.24 779.62 1,057.49 1,843.57 2,694.59
Inventories 186.62 263.41 333.38 389.63 486.74
Sundry Debtors 234.97 256.47 310 1,055.44 680.03
Cash and Bank Balance 4.01 11.26 35.69 23.29 20.17
Total Current Assets 425.6 531.14 679.07 1,468.36 1,186.94
Loans and Advances 445.55 509.25 345.82 394.13 311.42
Fixed Deposits 886.02 1,219.56 1,166.99 1,049.13 1,245.30

Total CA, Loans & Advances 1,757.17 2,259.95 2,191.88 2,911.62 2,743.66
Deffered Credit 0 0 0 0 0
Current Liabilities 224.95 273.3 345.23 845.73 696.34

Provisions 84.45 122.5 7.7 262.79 342.1

Total CL & Provisions 309.4 395.8 352.93 1,108.52 1,038.44
Net Current Assets 1,447.77 1,864.15 1,838.95 1,803.10 1,705.22
Miscellaneous Expenses 0 0 0 0 0
Total Assets 2,920.10 3,210.76 3,517.64 4,310.14 5,175.02

Contingent Liabilities 39.77 39.76 107.62 72.08 85.36

Book Value (Rs) 59.51 78.8 126.58 203.15 248.72
 PROFIT AND LOSS STATEMENTS (FIG IN CRORES)
Mar '05 Mar '06 Mar '07 Mar '08

12 mths 12 mths 12 mths 12 mths

Income
Sales Turnover 1056.01 1353.01 1722.13 2427.35
Excise Duty 48.73 61.37 59.57 58.84
Net Sales 1007.28 1291.64 1662.56 2368.51
Other Income 232.87 525.55 750.26 914.83
Stock Adjustments -0.45 57.23 41.41 17.38
Total Income 1239.7 1874.42 2454.23 3300.72
Expenditure
Raw Materials 563.75 899.67 1214.48 1564.61
Power & Fuel Cost 14.48 25.55 31.14 37.36
Employee Cost 82.78 82.01 98.87 120.2
Other Manufacturing Expenses 24.97 23.11 25.08 35.21
Selling and Admin Expenses 163.72 287.47 370.2 415.35
Miscellaneous Expenses 37.1 15.97 18.85 14.62
Preoperative Exp Capitalised 0 0 0 0
Total Expenses 886.8 1333.78 1758.62 2187.35
Mar '05 Mar '06 Mar '07 Mar '08

12 mths 12 mths 12 mths 12 mths

Operating Profit 120.03 15.09 -54.65 198.54

PBDIT 352.9 540.64 695.61 1113.37
Interest 0 11.23 8.8 5.06
PBDT 352.9 529.41 686.81 1108.31
Depreciation 32.83 40.73 46.27 56.11
Other Written Off 2.45 0 0 0
Profit Before Tax 317.62 488.68 640.54 1052.2
Extra-ordinary items 12.45 0 -0.05 0
PBT (Post Extra-ord Items) 330.07 488.68 640.49 1052.2
Tax 17.77 27.39 11.61 38.16
Reported Net Profit 305.71 461.29 628.93 1014.04
Total Value Addition 323.05 434.11 544.14 622.74
Preference Dividend 0.08 0.08 0.08 0.05
Equity Dividend 69.57 102.3 130.01 217.47
Corporate Dividend Tax 9.91 14.36 18.25 37.2
Per share data (annualised)
Shares in issue (lakhs) 1855.11 1857.32 1934.02 2071.16
Earning Per Share (Rs) 16.48 24.83 32.52 48.96
Equity Dividend (%) 75 110 135 210
Book Value (Rs) 59.51 78.8 126.58 203.15
RORES)
Mar '09

12 mths

2833.65
59
2774.65
1276.22
23.78
4074.65

1961.89
50.44
148.31
43.93
494.98
18.06
0
2717.61
Mar '09

12 mths

80.82
1357.04
2.77
1354.27
58.86
0
1295.41
11.7
1307.11
30.12
1265.29
755.72
0
284.79
48.4
2071.16
61.09
275
248.72
 RATIO ANALYSIS

Short term liquidity

Current ratio
Mar '05 Mar '06 Mar '07 Mar '08
Measures the ability to pay current
liabilities out of current assets.
Current assets
425.6 531.14 679.07 1,468.36
/ Current liabilities
224.95 273.3 345.23 845.73
= Current ratio
1.89 1.94 1.97 1.736204226

Quick ratio (Acid Test) Mar'05 Mar'06 Mar'07 Mar'08

Measures the ability to pay current
liabilities out of the most liquid of
current assets.

(Cash 4 11 36 23.29
+ Marketable secrities - - - -
+ Accounts receivable) 235 256 310 1,055
/ Current liabilities 224.95 273.3 345.23 845.73
= Quick ratio 1.06 0.98 1.00 1.275501638

3.Accounts receivable turnover

Mar'05 Mar'06 Mar'07 Mar'08
Measures the ability to collect from
customers.
Annual net credit sales 1,007.28 1,291.64 1,662.56 2,368.51
/ Average net account receivables
234.97 256.47 310 1,055.44
= Accounts receivable turnover 4.286845129 5.03622256 5.36309677 2.244097249

4.Average collection period (Days

Sales Outstanding)
Mar'05 Mar'06 Mar'07 Mar'08
Measures the average number of day
that it takes to collect accounts
receivable.

365 days 365 365 365 365

/ Accounts receivable turnover 4.286845 5.036223 5.363097 2.244097
 = Average collection period (Days
Sales Outstanding)
85.14420279 72.474948 68.0576913 162.6489408

Inventory turnover Mar'05 Mar'06 Mar'07 Mar'08

Measures the saleability of inventory.
Indicates the number of time
inventory is sold or "turned" per year.

Net sales 1,007.28 1,291.64 1,662.56 2,368.51

/ Average inventory 186.62 263.41 333.38 389.63
= Inventory turnover 5.39749223 4.90353441 4.98698182 6.078869697

Days sales in inventory Mar'05 Mar'06 Mar'07 Mar'08

Measures inventory levels based on
days sales.
365 days 365 365 365 365
/ Inventory turnover 5.39749223 4.90353441 4.98698182 6.078869697
Days sale in inventory 67.6239973 74.4361045 73.1905615 60.04405723

LONG TERM SOLVENCY

RATIOS

Debt ratio Mar'05 Mar'06 Mar'07 Mar'08

Indicates the percentage of assets
financed with debt or liabilities

Total liabilities 309.40 2,259.95 679.07 1,468.36

/ Total assets 2,920.10 3,210.76 3,517.64 4,310.14
= Debt ratio 0.11 0.70 0.19 0.340675709

Times interest earned - income

(interest coverage) Mar'05 Mar'06 Mar'07 Mar'08
Measures the ability to pay interest
out of profits.
Net income before interest expense
and taxes
320.07 499.91 649.34 1,057.26
/ Interest expense 0 11.23 8.8 5.06
= Times interest earned - income
(interest coverage)
44.5155833 73.7886364 208.944664

Total asstes to equity Mar'05 Mar'06 Mar'07 Mar'08

Total assets 2,920.10 3,210.76 3,517.64 4,310.14
 / Total stockholders equity 94.16 94.27 98.07 103.56
= Total assets to equity 31.01210705 34.0591917 35.8686652 41.61973735
Total liabilities to total assets Mar'05 Mar'06 Mar'07 Mar'08
Total liabilities 309.40 2,259.95 679.07 1,468.36
/ Total assets 2,920.10 3,210.76 3,517.64 4,310.14
= Total liabilities to total assets
0.11 0.70 0.19 0.340675709

Total liabilities to equity Mar'05 Mar'06 Mar'07 Mar'08

Total liabilities 309.40 2,259.95 679.07 1,468.36
/ Total stockholders equity 94.16 94.27 98.07 103.56
= Total liabilities to equity 3.29 23.97 6.92 14.17883353

DEBT-EQUITY RATIO Mar'05 Mar'06 Mar'07 Mar'08

Outsiders Fund 2,039.60 2,019.12 1,413.38 948.25
Total shareholders fund 1,105.44 1,464.94 2,449.49 4,207.62
D/E ratio 1.845057172 1.37829536 0.57700991 0.225364933

Propreitory Equity ratio Mar'05 Mar'06 Mar'07 Mar'08

Shareholder fund 2,812.01 3,098.26 3,399.18 4,183.70
/Total Assets 309.40 2,259.95 679.07 1,468.36
Propreitory Equity ratio 9.088590821 1.37094183 5.00564007 2.849233158

PROFITABILITY RATIOS

Return on assets Mar'05 Mar'06 Mar'07 Mar'08

Measures the effectiveness of assets
used to produce profits.
Net income 305.71 461.29 628.93 1,014.04
/ Average total assets 309.40 2,259.95 679.07 1,468.36
= Return on assets 0.988073691 0.20411514 0.92616372 0.690593587
Return on equity Mar'05 Mar'06 Mar'07 Mar'08
Measures the profitibility of owners
investments.
Net income 305.71 461.29 628.93 1,014.04
/ Average stockholders equity 94.16 94.27 98.07 103.56
= Return on equity 3.246707732 4.89328524 6.4130723 9.79181151
Gross margin Mar'05 Mar'06 Mar'07 Mar'08
Gross profit 321.30 261.30 292.99 611.13
/ Sales 1,007.28 1,291.64 1,662.56 2,368.51
= Gross margin % 0.318977841 0.20230095 0.17622823 0.258022976
Operating margin Mar'05 Mar'06 Mar'07 Mar'08
 Operating profit 120.03 15.09 -54.65 198.54
/ Sales 1,007.28 1,291.64 1,662.56 2,368.51
= Operating margin 0.119162497 0.01168282 -0.03287099 0.083824852
Profit margin Mar'05 Mar'06 Mar'07 Mar'08
Measures the % of each $1 of revenue
that is left over as profit.
Net income 305.71 461.29 628.93 1,014.04
/ Sales 1,007.28 1,291.64 1,662.56 2,368.51
= Profit margin 0.303500516 0.35713512 0.37829011 0.428134143
Total asset turnover Mar'05 Mar'06 Mar'07 Mar'08
Measures the efficiency of assets used
to produce sales.
Sales 1,007.28 1,291.64 1,662.56 2,368.51
/ Average total assets 2,920.10 3,210.76 3,517.64 4,310.14
= Total asset turnover 0.344947091 0.40228482 0.47263506 0.549520433
Fixed assets turnover Mar'05 Mar'06 Mar'07 Mar'08
Measures the efficiency of fixed assets
used to produce sales.
Sales 1,007.28 1291.64 1662.56 2368.51
/ Average fixed assets 439.15 536.19 589.29 630.04
= Fixed asset turnover 2.293703746 2.40892221 2.82129342 3.759300997
Current asset turnover Mar'05 Mar'06 Mar'07 Mar'08
Sales 1007.28 1291.64 1662.56 2368.51
/ Average current assets 425.6 531.14 679.07 1,468.36
= Current asset turnover 2.366729323 2.43182588 2.44828957 1.613030864

DuPont Return on Investment Mar'05 Mar'06 Mar'07 Mar'08

Net income 305.71 461.29 628.93 1,014.04
/ Average total assets 2,920.10 3,210.76 3,517.64 4,310.14
= Return on investment 10.5% 14.4% 17.9% 23.526846
or
Net profit margin 0.303500516 0.35713512 0.37829011 0.428134143
/ Total asset turnover 0.34 0.40 0.47 0.549520433
= Return on investment 10.5% 14.4% 17.9% 77.91050478
Modified DuPont - Return on Equity

Net profit after tax 306 461 629 1,014.04

/ Average stockholders equity 94 94 98 103.56
= Return on equity 324.7% 489.3% 641.3% 979.181151
or
Average total assets 2,920 3,211 3,518 4,310.14
/ Average equity 94 94 98 103.56
= Equity mutliplier 31.01 34.06 35.87 41.61973735
x ROI 10.5% 14.4% 17.9% 23.526846
= Return on equity 324.7% 489.3% 641.3% 979.181151
 Mar '09

1,186.94
696.34

1.70

Mar'09

20.17
-
680
696.34
1.01

Mar'09

2,774.65

680.03
4.08018763878064

Mar'09

365
4.080188
 89.4566622910513

Mar'09

2,774.65
486.74
5.70047664050623

Mar'09

365
5.70047664050623
64.0297334798984

Mar'09

1,186.94
5,175.02
0.23

Mar'09

1,298.18
2.77

468.657039711191

Mar'09
5,175.02
 103.56
49.9712244109695
Mar'09
1,186.94
5,175.02
0.23

Mar'09
1,186.94
103.56
11.46

Mar'09
719.94
5,151.42
0.139755640192413

Mar'09
5,047.86
1,186.94
4.25283502114681

Mar'09

1,265.29
1,186.94
1.06601007633073
Mar'09

1,265.29
103.56
12.2179412900734
Mar'09
570.08
2,774.65
0.205460148126791
Mar'09
 80.82
2,774.65
0.02912799812589
Mar'09

1,265.29
2,774.65
0.456017876128521
Mar'09

2,774.65
5,175.02
0.536162179083366
Mar'09

2774.65
699.26
3.9679804364614
Mar'09
2774.65
1,186.94
2.33764975483175

Mar'09
1,265.29
5,175.02
24.4499538166036

0.456017876128521
0.54
85.05

1,265.29
103.56
1221.8%

5,175.02
104
49.97
2445.0%
1,221.79
 ANALYSIS OF FINANCIAL RATIO
1.LIQUIDITY RATIOS
These ratios indicate the ease of turning assets into cash. These ratios are important in
measuring the ability of a company to meet both its short term and long term
obligations.

CURRENT RATIO
The ratio is regarded as a test of liquidity for a company. It expresses the 'working capital'
relationship of current assets available to meet the company's current obligations.
Current Ratio = Total Current Assets/ Total Current Liabilities

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

Current Ratio 1.89 1.94 1.97 1.74 1.7

Current Ratio
2
3; 1.97
1.95 2; 1.94
1.9 1; 1.89
1.85
1.8 Current Rati

1.75 4; 1.74
1.7 5; 1.7
1.65
1.6
1.55
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Generally acceptable current ratio is 2 to 1. But also depends on the nature of the
business and the characteristics of its current assets and liabilities. Company is never at
an optimal figure and has seen decline in its ratio which is risky. Company should
increase its current assets by either taking debt or converting non into current one so
as to have a safety cover and credit worthiness.
 Generally acceptable current ratio is 2 to 1. But also depends on the nature of the
business and the characteristics of its current assets and liabilities. Company is never at
an optimal figure and has seen decline in its ratio which is risky. Company should
increase its current assets by either taking debt or converting non into current one so
as to have a safety cover and credit worthiness.

QUICK RATIO

The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best
measures of liquidity.
Quick Ratio = Cash + Government Securities + Receivables / Total Current Liabilities
It is measure of true working capital and readiness of them to be converted into liquid
assets without obsolete inventory.

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

Quick Ratio 1.06 0.98 1 1.275502 1.01

Quick Ratio
1.4
4; 1.27550164
1.2
1; 1.06
1 2; 0.98 3; 1 5; 1.01

0.8 Quick Ratio

0.6

0.4

0.2

0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

INTERPRETATION
An acid-test of 1:1 is considered satisfactory .It is maintaining optimal ratio with huge
amount of receivables. They have to maintain control over their collection policy so as to
meet its requirements.
 An acid-test of 1:1 is considered satisfactory .It is maintaining optimal ratio with huge
amount of receivables. They have to maintain control over their collection policy so as to
meet its requirements.

2.SOLVENCY RATIOS

DEBT-EQUITY RATIO
This Debt/Equity indicates the extent to which the business is reliant on debt financing
Debt/Equity Ratio = Total Liabilities / Net Worth

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

D/E Ratio 1.845057 1.378295 0.57701 0.225365 0.139756

D/E Ratio
2
1.8 1; 1.845057172

1.6
1.4 2; 1.3782954
1.2 D/E Ratio
1
0.8
0.6 3; 0.5770099
0.4
0.2 4; 0.22536493
5; 0.13975564
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

INTERPRETATION
Generally, the higher this ratio, the more risky a creditor will perceive its exposure in
your business, making it correspondingly harder to obtain credit. But it is beneficial
from owner point of view as cost of debt is lower than equity but exposes firm to
distress costs. Over the years firm is moving towards the lower debt may be as a
measure to trade off between risk and debt.

DEBT RATIO
 This ratio determines proportionate of debt in financing total assets of company.
DEBT RATIO = Total debt (secured loans +unsecured loans + C.liabilities)/Total Assets

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

Debt ratio 0.11 0.7 0.19 0.340676 0.23

Debt ratio
0.8
0.7 2; 0.7
0.6
0.5
Debt ratio
0.4
4; 0.34067571
0.3
5; 0.23
0.2 3; 0.19
0.1 1; 0.11

0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

INTERPRETATION
This ratio is important from investors point as it helps in calculating leverage factor for
firm and thus determines borrower ability to pay back. Owners generally prefer high
values as it reduces their cost but trade off has to be maintained so as to balance both
benefit and costs of debt. Over the years, company has reduce the level of debt in their
capital mix may be to save itself from bankruptcy or to increase their worthiness in
market.

INTEREST COVERAGE RATIOS

Interest coverage is a financial ratio that provides a quick picture of a company’s ability to
pay the interest charges on its debt. The 'coverage' aspect of the ratio indicates how
many times the interest could be paid from available earnings, thereby providing a sense
of the safety margin a company has for paying its interest for any period.
Ratio=PBIT/total interest expenses
 many times the interest could be paid from available earnings, thereby providing a sense
of the safety margin a company has for paying its interest for any period.
Ratio=PBIT/total interest expenses

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

Coverage ratio 0 44.51558 73.78864 208.9447 468.657

Coverage ratio
500
5; 468.6570397
450
400
350
300 Coverage ratio
250
200 4; 208.944664
150
100
3; 73.788636
50 2; 44.515583
0 1; 0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

A higher value indicates firm healthy position to face turbulent time. Owing to low
interest charges and low debt, it has higher coverage ratio improvising over years
ANCIAL RATIOS
3.PROFITABILITY RATIOS
atios are important in
nd long term
GROSS MARGIN RATIO
It measures the percentage of sales remaining (after obtaining or manufactu
goods sold) available to pay the overhead expenses of the company.
Gross Margin Ratio = Gross Profit / Net Sales

ses the 'working capital' Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09
rrent obligations. Gross
margin 0.318978 0.202301 0.176228 0.258023 0.20546

Gross margin
0.35
1; 0.318977841
0.3
0.25 4; 0.25802298
0.2 2; 0.202301 5; 0.20546014
3; 0.1762282
0.15
0.1
0.05
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Current Ratio

NET MARGIN
5; 1.7

This ratio is the percentage of sales dollars left after subtracting the Cost of
5 5.5 and all expenses, except income taxes. It provides a good opportunity to com
company's "return on sales" with the performance of other companies in yo
is calculated before income tax because tax rates and tax liabilities vary from
the nature of the company for a wide variety of reasons, making comparisons after taxes muc
s. Company is never at difficult.
Company should Net Profit Margin Ratio = Net Profit Before Tax / Net Sales
n into current one so
 the nature of the company for a wide variety of reasons, making comparisons after taxes muc
s. Company is never at difficult.
Company should Net Profit Margin Ratio = Net Profit Before Tax / Net Sales
n into current one so

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

NET
MARGI
N 0.303501 0.357135 0.37829 0.428134 0.456018

ne of the best NET MARGIN

0.5
Current Liabilities
0.45 5; 0.456017876
converted into liquid 4; 0.42813414
0.4
3; 0.3782901
0.35 2; 0.3571351
0.3 1; 0.303500516
0.25
0.2
0.15
0.1
0.05
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Over the years.net profit has increased showing growth as well as better effi
reflected in the lower operating costs.
5; 1.01

Quick Ratio Return on Assets Ratio

This measures how efficiently profits are being generated from the assets e
the business when compared with the ratios of firms in a similar business.
Return on Assets = Net Profit Before Tax / Total Assets

5 5.5
Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09
ROA 0.988074 0.204115 0.926164 0.690594 1.06601

timal ratio with huge

collection policy so as to

ROA
1.2
5; 1.06601
1 1; 0.988073691
3; 0.9261637
0.8
timal ratio with huge
collection policy so as to

ROA
1.2
5; 1.06601
1 1; 0.988073691
3; 0.9261637
0.8
4; 0.69059359
0.6
0.4

ant on debt financing 0.2 2; 0.2041151

0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

INTERPRETATION
Barring first year, has performed well over the last years reaching at a aroun
indicating around more than 100% growth on the invested fund.

RETURN ON INVESTMENT
D/E Ratio
 
The ROI is perhaps the most important ratio of all. It is the percentage of retu
invested in the business by its owners. In short, this ratio tells the owner whe
all the effort put into the business has been worthwhile.
Return on Investment = Net Profit before Tax / Net Worth
5; 0.13975564

5 5.5
Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09
ROI 0.988074 0.204115 0.926164 0.690594 1.06601

ROI
ceive its exposure in
But it is beneficial 1.2
t exposes firm to 1
5; 1.066
1; 0.988073691
ebt may be as a 3; 0.9261637
0.8
4; 0.69059359
0.6

0.4

0.2 2; 0.2041151

0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
 4; 0.69059359
0.6

0.4

0.2 2; 0.2041151
ets of company.
bilities)/Total Assets 0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

 
Over the last 5years, company has seen increase in return over the invest
in the net value addition rising to around 24% in last fiscal year.

4.EFFICIENCY RATIOS
 
Debt ratio Inventory Turnover Ratio
This ratio reveals how well inventory is being managed. It is important beca
more times inventory can be turned in a given operating cycle, the greater
5; 0.23
Inventory Turnover Ratio = Net Sales / Average Inventory at Cost

5 5.5

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

I.T.R 5.397492 4.903534 4.986982 6.07887 5.700477
D.S.O 67.624 74.4361 73.19056 60.04406 64.02973
ng leverage factor for
80
enerally prefer high
so as to balance both 70
e level of debt in their 60
heir worthiness in
50
40
30
20
10
0
0 1 2 3 4 5 6 7
of a company’s ability to
ratio indicates how
ereby providing a sense
period. INTERPRETATION
Company is maintaining on an average around 5 its conversion ratio whic
has its effect on its cash conversion cycle as it increase a lot due to highe
outstanding sales in inventory.
ereby providing a sense
period. INTERPRETATION
Company is maintaining on an average around 5 its conversion ratio whic
has its effect on its cash conversion cycle as it increase a lot due to highe
outstanding sales in inventory.

ACCOUNTS RECEIVABLE RATIO

An accounting measure used to quantify a firm's effectiveness in extendi

468.6570397 well as collecting debts. The receivables turnover ratio is an activity ratio
how efficiently a firm uses its assets.
A.R.T=Net sales/Avg accounts receivable
Coverage ratio

Year Mar’05 Mar’06 Mar’07 Mar’08 Mar’09

A.R.T 4.286845 5.036223 5.363097 2.244097 4.080188
D.S.O 85.1442 72.47495 68.05769 162.6489 89.45666
5.5

me. Owing to low

Chart Title
180
vising over years 160 4; 162.648941
140
120
100
1; 85.14420279 5; 89.4566
80
2; 72.474948 3; 68.057691
60
40
20
0 1; 4.286845129 2; 5.0362226 3; 5.3630968 4; 2.24409725 5; 4.08018
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Company has low receivable turn–over ratio giving to increase or decrea

different years. But no major improvement is seen indicating poor perfo
company in realising their receivable which is also reflected in high colle
period. It needs to work on its collection policy albeit it will have far effe
schedules or will find itself unable to finance its requirements.
company in realising their receivable which is also reflected in high colle
period. It needs to work on its collection policy albeit it will have far effe
schedules or will find itself unable to finance its requirements.
aining or manufacturing the
e company.

5802298
5; 0.205460148 Gross margin

4.5 5 5.5

racting the Cost of Goods sold

d opportunity to compare your
her companies in your industry. It
liabilities vary from company to
ons after taxes much more
s
ons after taxes much more
s

5; 0.456017876
813414

NET MARGIN

4.5 5 5.5

as well as better efficiency as

d from the assets employed in

a similar business.

5; 1.066010076

ROA
 5; 1.066010076

.69059359 ROA

4.5 5 5.5

reaching at a around 1.1 ratio

d fund.

e percentage of return on funds

tells the owner whether or not

5; 1.066010076

; 0.69059359 ROI

4.5 5 5.5
; 0.69059359

4.5 5 5.5

urn over the investment i.e increase

scal year.

It is important because the

g cycle, the greater the profit.
y at Cost

Year
I.T.R
D.S.O

6 7

onversion ratio which ultimately

e a lot due to higher days
onversion ratio which ultimately
e a lot due to higher days

ctiveness in extending credit as

o is an activity ratio, measuring

4; 162.648941

5; 89.45666229 A.R.T
D.S.O

4; 2.24409725 5; 4.080187639
4.5 5 5.5

o increase or decrease way in

dicating poor performance of
flected in high collection
it will have far effect on its
rements.
flected in high collection
it will have far effect on its
rements.
SUMMARY
Company has increased its return on assessment as well as the profitability but it has very low re
turnover ratio. It needs to work on its collection policy so as to realise its receivable early or lest h
crunch. It also needs to convert its non-current assets to current so as to finance its working cap
ty but it has very low receivable accounts
receivable early or lest he will face financial
finance its working capital efficiently