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#  LIQUIDITY RATIOS

## 1) Calculation of CURRENT RATIO:-

Current Assets Current Ratio
Year Current Liabilities

## 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)

## 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

## 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

## 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

## 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

## 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

## 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

## 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

## 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

## 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

## 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