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 LIQUIDITY RATIOS

1) Calculation of CURRENT RATIO:-


Current Assets Current Ratio
Year Current Liabilities

2013-14 86,895,155.79 / 48,257,131.00 1.8:1

2014-15 100,952,822.09 / 38,451,574.00 2.6:1

2015-16 115,222,988.74 / 42,008,189.00 2.7:1

Graphical Representation:
current ratio
3 2.7
2.6
2.5

2 1.8

1.5
current ratio
1

0.5

0
2013-14 2014-15 2015-16

Interpretation:
2) Calculation of QUICK RATIO:-
Quick Assets (CA-Stock-prepaid
Year expenses) Quick Ratio
Quick Liabilities (CL-Bank o/d-
o/s expenses)

2013-14 41,460,008.79 / 4,825,131.00 0.85:1

2014-15 44,489,740.09 / 38,451,574.00 1.15:1

2015-16 46,019,096.74 / 42,008,189.00 1.09:1

Graphical Representation:

quick ratio
1.5 1.15 1.09
0.85
1
quick ratio
0.5

0
2013-14 2014-15 2015-16

Interpretation:
3) Calculation of ABSOLUTE LIQUID RATIO:-
Cash at Bank+ Short-term Absolute liquid
Year investments ratio
Current Liabilities
2013-14 169,076.89 / 48,257,131.00 0.0035:1

2014-15 749,423.09 / 38,451,574.00 0.019:1

2015-16 426,000.34 / 42,008,189.00 0.010:1

Graphical representation:-
These ratio shows that company carries a small amount of cash. But
there is nothing to be worried about the lack of cash because company
has reserve, borrowing power & long term investment. In India, firms
have credit limits sanctioned from banks and can easily draw cash.

absolute liquid ratio


0.02 0.019

0.018
0.016
0.014
0.012
0.01
0.01
absolute liquid ratio
0.008
0.006
0.0035
0.004
0.002
0
2013-14 2014-15 2015-16
4) Calculation of TOTAL ASSETS TURNOVER RATIO:-
Net sales Total assets t/o
Year Total assets ratio

2013-14 188,572,437.00 / 92,467,990.65 2.03 times

2014-15 228,457,373.00 / 111,060,690.52 2.05 times

2015-16 227,059,813.28 / 1.77 times


128,033,313.27

Graphical representation:-

total assets t/o ratio


2.1 2.05
2.03
2.05
2
1.95
1.9
1.85
1.77 total assets t/o ratio
1.8
1.75
1.7
1.65
1.6
2013-14 2014-15 2015-16
5) Calculation of FIXED ASSETS TURNOVER RATIO:-
Net sales Fixed assets t/o
Year Fixed Assets ratio

2013-14 188,572,437.00 / 5,572,834.86 33.8 times

2014-15 228,457,373.00 / 10,107,868.43 22.6 times

2015-16 227,059,813.28 / 12,810,324.53 17.7 times

Graphical representation:-

fixed assets t/o ratio


40
33.8
35
30
25 22.6

20 17.7
fixed assets t/o ratio
15
10
5
0
2013-14 2014-15 2015-16
6) Calculation of CURRENT ASSETS TURNOVER RATIO:-
Net sales Current assets
Year Current Assets t/o ratio

2013-14 188,572,437.00 / 86,895,155.79 2.1 times

2014-15 228,457,373.00 / 100,952,822.09 2.2 times

2015-16 227,059,813.28 / 115,222,988.74 1.9 times

Graphical representation:-

current assets t/o ratio


2.25
2.2
2.15
2.1
2.05
2
current assets t/o ratio
1.95
1.9
1.85
1.8
1.75
2013-14 2014-15 2015-16
7) Calculation of DEBTORS TURNOVER RATIO:-
Net credit sales Debtors
Year Trade Debtors turnover ratio

2013-14 188,572,437.00 / 39,308,718.00 4.7 times

2014-15 228,457,373.00 / 42,781,374.00 5.3 times

2015-16 227,059,813.28 / 43,317,033.00 5.2 times

Graphical representation:-

debtors t/o ratio


5.4

5.2

5
debtors t/o ratio
4.8

4.6

4.4
2013-14 2014-15 2015-16
8) Calculation of COLLECTION PERIOD:-
No. of days in a year Collection
Year Debtors t/o ratio Period

2013-14 365 / 4.7 77 days

2014-15 365 / 5.3 68 days

2015-16 365 / 5.2 70 days

Graphical representation:-

collection period
78
76
74
72
70
collection period
68
66
64
62
2013-14 2014-15 2015-16

9) Calculation of CREDITORS TURNOVER RATIO:-


Net Purchases Creditors
Year Creditors turnover ratio

2013-14 149,382,124.00 / 45,211,137.00 3.3 times

2014-15 173,936,638.00 / 37,715,889.00 4.6 times

2015-16 160,975,469.99 / 41,003,409.00 3.9 times

Graphical representation:-

creditors t/o ratio


5
4.5
4
3.5
3
2.5
creditors t/o ratio
2
1.5
1
0.5
0
2013-14 2014-15 2015-16

10) Calculation of PAYMENT PERIOD:-


No. of days in a year Payment
Year Creditors t/o ratio period

2013-14 365 / 3.3 110 days

2014-15 365 / 4.6 79 days


2015-16 365 / 3.9 93 days

Graphical representation:-

payment period
120

100

80

60
payment period
40

20

0
2013-14 2014-15 2015-16

11) Calculation of WORKING CAPITAL TURNOVER RATIO:-


Net sales Working capital
Year Working capital t/o ratio

2013-14 188,572,437.00 / 36,638,024.79 5.1 times

2014-15 228,457,373.00 / 62,501,248.09 3.6 times


2015-16 227,059,813.28 / 73,214,799.74 3.1 times

Graphical representation:-

working capital t/o ratio


6
5.1
5

4 3.6
3.1
3
working capital t/o ratio
2

0
2013-14 2014-15 2015-16

12) Calculation of INVENTORY TURNOVER RATIO:-


Cost of goods sold Inventory t/o
Year Average stock ratio
(opening stock +closing stock / 2)
2013-14 170,099,283.00 / 41,128,233.00 4.1 times

2014-15 203,401,400.00 / 50,888,315.00 3.9 times


2015-16 191,122,076.99 / 316,344,954.5 0.6 times

Graphical representation:-

inventory t/o ratio


4.5 4.1
3.9
4
3.5
3
2.5
2 inventory t/o ratio
1.5
1 0.6
0.5
0
2013-14 2014-15 2015-16

13) Calculation of GROSS PROFIT RATIO:-


Gross profit / Net sales Gross profit
Year *100 ratio

2013-14 18,473.154.00 / 188,572,437.00 9.7%


*100
2014-15 25,055,973.00 / 228,457,373.00 10.9%
*100
2015-16 35,937,736.29 / 227,059,813.28 15.8%
*100

Graphical representation:-

gross profit ratio


18.00%
15.80%
16.00%
14.00%
12.00% 10.90%
9.70%
10.00%
8.00% gross profit ratio
6.00%
4.00%
2.00%
0.00%
2013-14 2014-15 2015-16

14) Calculation of NET PROFIT RATIO:-


Net profit / Net sales Net profit ratio
Year *100

2013-14 2,114,659.25 / 188,572,437.00 1.12%


*100
2014-15 3,642,536.63 / 228,457,373.00 1.59%
*100
2015-16 7,508,345.97/ 227,059,813.28 3.37%
*100

Graphical representation:-

net profit ratio


3.50% 3.31%

3.00%

2.50%

2.00% 1.59%
1.50% net profit ratio
1.12%
1.00%

0.50%

0.00%
2013-14 2014-15 2015-16