A STUDY ON FINANCIAL STATEMENTS AND RATIOS OF
PHARMACEUTICALS INDUSTRYA MINI PROJECT report submitted to
SRM UNIVERSITY
For the partial fulfillment of the requirements for the degree
of
MASTER OF BUSINESS ADMINISTRATION
BY
LAVANYA. R
3511210076
Under the Supervision of
Mr.BALAJI
Asst.Professor
Dept. of Business Administration
Faculty of Engineering and Technology
Kattankulathur-603203
SEPT - DEC 2012
TABLE OF CONTENTS
S. NOCONTENT NAMEPAGE NO
1.INTRODUCTION TO THE STUDY
2.COMPANY PROFILE
3.FINANCIAL STATEMENTS AND RATIOS
4.RATIO TABLE FOR INTERPRETATION
5.INTERPRETATION
6.CONCLUSION
INTRODUCTION TO THE STUDY
FINANCIAL STATEMENTS
Financial statements (or financial reports) are formal records
of the financial activities of a business, person, or other entity.
Financial statements provide an overview of a business or person's
financial condition in both short and long term. All the relevant
financial information of a business enterprise, presented in a
structured manner and in a form easy to understand is called the
financial statements. There are four basic financial
statements:
1. Income statement: It is also referred to as Profit and Loss
statement (or "P&L"), reports on a company's income, expenses,
and profits over a period of time. Profit & Loss account
provide information on the operation of the enterprise. These
include sale and the various expenses incurred during the
processing state.
2. Balance sheet: It is also referred to as statement of
financial position or condition, reports on a company's assets,
liabilities, and Ownership equity as of a given point in time.
3. Funds flow statements: It explains the changes in a company's
retained earnings over the reporting period.
4. Cash flow statement: It reports on a company's cash flow
activities, particularly its operating, investing and financing
activities.
1. PROFIT & LOSS STATEMENT:
Income statement, also called profit and loss statement
(P&L) and Statement of Operations is financial statement that
summarizes the revenues, costs and expenses incurred during a
specific period of time - usually a fiscal quarter or year. These
records provide information that shows the ability of a company to
generate profit by increasing revenue and reducing costs. The
purpose of the income statement is to show managers and investors
whether the company made or lost money during the period being
reported. The important thing to remember about an income statement
is that it represents a period of time. This contrasts with the
balance sheet, which represents a single moment in time.
CONTENTS OF PROFIT & LOSS STATEMENT
(a) Revenue - Cash inflows or other enhancements of assets of an
entity during a period from delivering or producing goods,
rendering services, or other activities that constitute the
entity's ongoing major operations.
(b) Expenses - Cash outflows or other using-up of assets or
incurrence of liabilities during a period from delivering or
producing goods, rendering services, or carrying out other
activities that constitute the entity's ongoing major
operations.
(c) Turnover
The main source of income for a company is its turnover,
primarily comprised of sales of its products and services to
third-party customers.
(d) Sales
Sales are normally accounted for when goods or services are
delivered and invoiced, and accepted by the customer, even if
payment is not received until some time later, even in a subsequent
trading period.
(e) Cost of Sales (COS)
The sum of direct costs of goods sold plus any manufacturing
expenses relating to the sales (or turnover) is termed cost of
sales, or production cost of sales, or cost of goods sold. These
costs include:
costs of raw materials stocks
costs of inward-bound freight paid by the company Packaging
costs direct production salaries and wages production expenses,
including depreciation of trading-related fixed assets.
(f) Other Operating Expenses
These are not directly related to the production process, but
contributing to the activity of the company, there are further
costs that are termed other operating expenses.
These comprises of costs like:
Distribution costs and selling costs, Administration costs, and
Research and development costs (unless they relate to specific
projects and the costs may be deferred to future periods).
(g) Other Operating Income
Other operating income includes all other revenues that have not
been included in other parts of the profit and loss account. It
does not include sales of goods or services, reported turnover, or
any sort of interest receivable, reported within the net interest
category.
(h) Gross Margin (or Gross Profit)
The difference between turnover, or sales, and COS is gross
profit or gross margin. It needs to be positive and large enough to
at least cover all other expenses.
(i) Operating Profit (OP)
The operating profit is the net of all operating revenues and
costs, regardless of the financial structure of the company and
whatever exceptional events occurred during the period that
resulted in exceptional costs. The profit earned from a firm's
normal core business operations. Also known as Earnings before
Interest and Tax (EBIT).
OP = Turnover - COS - other Operating Expenses + Other Operating
Income
(j) Profit before Tax (PBT)
A profitability measure that looks at a company's profits before
the company has to pay corporate income tax. This measure deducts
all expenses from revenue including interest expenses and operating
expenses, but it leaves out the payment of tax.(k) Profit after Tax
(PAT)
PAT, or net profit, is the profit on ordinary activities after
tax. The final charge that a company has to suffer, provided it has
made sufficient profits, is therefore corporate taxation.
PAT = PBT - Corporation Tax
(l) Retained Profit
The retained profit for the year is what is left on the profit
and loss account after deducting dividends for the year. The
balance on the profit and loss account forms part of the capital
(or equity, or shareholders funds) of the company.2. BALANCE
SHEET
Infinancial accounting, abalance sheetorstatement of financial
positionis a summary of the financial balances of asole
proprietorship, abusiness partnership, acorporationor other
business organization, such as anLLCor
anLLP.Assets,liabilitiesandownership equityare listed as of a
specific date, such as the end of itsfinancial year. A balance
sheet is often described as a "snapshot of a company's financial
condition".[1]Of the four basicfinancial statements, the balance
sheet is the only statement which applies to a single point in time
of a business' calendar year.
A standard company balance sheet has three parts: assets,
liabilities and ownership equity. The main categories of assets are
usually listed first, and typically in order ofliquidity.Assets are
followed by the liabilities. The difference between the assets and
the liabilities is known as equity or thenet assetsor thenet
worthorcapitalof the company and according to theaccounting
equation, net worth must equal assets minus liabilities.
Another way to look at the same equation is that assets equals
liabilities plus owner's equity. Looking at the equation in this
way shows how assets were financed: either by borrowing money
(liability) or by using the owner's money (owner's equity). Balance
sheets are usually presented with assets in one section and
liabilities and net worth in the other section with the two
sections "balancing."
A business operating entirely in cash can measure its profits by
withdrawing the entire bank balance at the end of the period, plus
any cash in hand. However, many businesses are not paid
immediately; they build up inventories of goods and they acquire
buildings and equipment. In other words: businesses haveassetsand
so they cannot, even if they want to, immediately turn these into
cash at the end of each period. Often, these businesses owe money
to suppliers and to tax authorities, and the proprietors do not
withdraw all their original capital and profits at the end of each
period. In other words businesses also haveliabilities.
TYPES OF BALANCE SHEET:
A balance sheet summarizes an organization or individual's
assets, equity and liabilities at a specific point in time. We have
two forms of balance sheet. They are the report form and the
account form. Individuals and small businesses tend to have simple
balance sheets. Larger businesses tend to have more complex balance
sheets, and these are presented in the organization'sannual report.
Large businesses also may prepare balance sheets for segments of
their businesses. A balance sheet is often presented alongside one
for a different point in time (typically the previous year) for
comparison.
Personal balance sheetA personal balance sheet lists current
assets such as cash inchecking accountsandsavings accounts,
long-term assets such ascommon stockandreal estate, current
liabilities such asloandebt andmortgagedebt due, or overdue,
long-term liabilities such asmortgageand other loan debt.
Securities and real estate values are listed atmarket valuerather
than athistorical costorcost basis. Personalnet worthis the
difference between an individual's total assets and total
liabilities.
US small business balance sheetA small business bump that
balance sheet lists current assets such as cash,accounts
receivable, andinventory, fixed assets such as land, buildings, and
equipment,intangible assetssuch aspatents, and liabilities such
asaccounts payable, accrued expenses, and long-term debt.Contingent
liabilitiessuch aswarrantiesare noted in the footnotes to the
balance sheet. The small business's equity is the difference
between total assets and total liabilities.
Public Business Entities balance sheet structure
Guidelines for balance sheets of public business entities are
given by theInternational Accounting Standards Boardand numerous
country-specific organizations/companys.
Balance sheet account names and usage depend on the
organization's country and the type of organization. Government
organizations do not generally follow standards established for
individuals or businesses.
If applicable to the business, summary values for the following
items should be included in the balance sheet: Assets are all the
things the business owns, this will include property, tools, cars,
etc.
AssetsCurrent assets1. Cash and cash equivalents2. Accounts
receivable3. Inventories4. Prepaid expensesfor future services that
will be used within a year
Non-current assets (Fixed assets)
1. Property, plant and equipment2. Investment property, such
asreal estateheld for investment purposes
3. Intangible assets4. Financial assets (excluding investments
accounted for using the equity method,accounts receivables, and
cash andcash equivalents)
5. Investmentsaccounted for using theequity method6. Biological
assets, which are living plants or animals. Bearer biological
assets are plants or animals which bear agricultural produce for
harvest, such as apple trees grown to produce apples and sheep
raised to produce wool.
Liabilities SeeLiability (accounting)1. Accounts payable2.
Provisionsfor warranties or court decisions
3. Financial liabilities (excluding provisions and accounts
payable), such aspromissory notesandcorporate bonds4. Liabilities
and assets for currenttax5. Deferred taxliabilities and deferred
tax assets
6. Unearned revenue for services paid for by customers but not
yet provided
EquityThe net assets shown by the balance sheet equals the third
part of the balance sheet, which is known as theshareholders'
equity. It comprises:
1. Issued capital andreservesattributable to equity holders of
theparent company(controlling interest)
2. Non-controlling interestin equity
Formally, shareholders' equity is part of the company's
liabilities: they are funds "owing" to shareholders (after payment
of all other liabilities); usually, however, "liabilities" is used
in the more restrictive sense of liabilities excluding
shareholders' equity. The balance of assets and liabilities
(including shareholders' equity) is not a coincidence. Records of
the values of each account in the balance sheet are maintained
using a system of accounting known asdouble-entry bookkeeping. In
this sense, shareholders' equity by construction must equal assets
minus liabilities, and are a residual.
Regarding the items in equity section, the following disclosures
are required:
1. Numbers ofsharesauthorized, issued and fully paid, and issued
but not fully paid
2. Par valueof shares
3. Reconciliation of shares outstanding at the beginning and the
end of the period
4. Description of rights, preferences, and restrictions of
shares
5. Treasury shares, including shares held bysubsidiariesand
associates
6. Shares reserved for issuance underoptionsandcontracts7. A
description of the nature and purpose of each reserve within
owners' equity
DEFINITION OF 'BALANCE SHEET':A financial
statementthatsummarizes a company's assets, liabilities and
shareholders' equityat a specific point intime. These three balance
sheet segments give investors an idea as to what the company owns
andowes, as well as the amount invested by the shareholders.
The balance sheetmust follow the following formula:
Assets = Liabilities + Shareholders' EquityRATIO ANALYSIS
Financial Analysis is the process of identifying the financial
strength and weaknesses of the firm by property establishing
relationships by means of ratio between the firm of the balance
sheet and profit and loss account. Ratio Analysis is the most
widely used tool of analysis. A ratio is the quotient of tow
numbers and is an expression of relationship between the figures or
two amounts. It indicates a quantitative relationship, which is
used for a qualified judgment and decision-making. The following
are the four steps involved in the ratio analysis:
Selection of relevant data from the financial statements
depending upon the objective of the analysis.
Calculation of appropriate ratios from the above data.
Comparison of the calculated ratios of the same firm in the
past, or the ratios developed from the projected financial
statements or the ratios of some other firms or the comparison with
ratios of the industry to which the firm belongs.
Interpretation of the ratios.STANDARDS FOR COMPARISON: For
making a proper use of ratio, it is essential to have fixed
standards for comparison. The four most common standards used in
ratio analysis in financial management are:
1. Absolute: absolute standards are those, which become
generally recognized as being desirable regardless of the types of
company, the time, stage of business cycle, or the objective of the
analysis.2. Historical: Historical standards involve comparing a
companys own past performance as a standard for the present or
future.3. Horizontal: In the case of Horizontal standards, one
company is compared with the average of other companies of the same
companies.
4. Budgeted: The Budgeted standards are arrived at after
preparing the budget for a period. Ratios developed from actual
performance are compared to the planned ratios in the budget in
order to examine the degree of accomplishment of the anticipated
targets of the firmsLIMATIONS OF RATIO ANALYSIS:
Limitations of ratio analysis arise due to difficulties in
making comparisons. Though ratio is simple and easy to calculate,
they suffer from some serious limitations.
1. Lack of adequate standards.
2. Limited use of a single ratio.
3. Inherent limitations of accounting.
4. Change of accounting procedure.
5. Personal bias.
6. Absolute figure are distort.
7. Window dressing
8. Price level changes.
9. Incomparable.
10. Ratio has on substitutes.LIQUIDTY RATIOS: Liquidity refers
to the ability of a concern to meet its current obligations as and
when these become due. The short-term obligations are met by
realizing amounts from current floating or circulating assets. The
current assets should either be liquid or near liquidity. These
should be convertible into cash for paying obligations of
short-term nature. The sufficiency or insufficiency of current
assets can be assessed, by comparing them with short-term (current)
liabilities. If current assets can pay off current liabilities then
liquidity position will be satisfactory. To measure the liquidity
of a firm, the following ratios can be calculated.
(1) Current Ratio
(2) Quick/ Acid Test Ratio
(3) Absolute Liquid Ratio1.Current ratio:
Current Ratio indicates the firms ability to pay its current
liabilities. Current ratio as one which is generally recognized as
the patriarch among ratios. A relatively low ratio represents that
the liquidity position of the firm is not good and the firm shall
not be able to pay its current liabilities in time without facing
difficulties. A high ratio is an indication that the firm is liquid
and has the ability to pay its current obligations in time as and
when they become due.
Current ratio = Current assets/Current liabilities
(Ideal ratio = 2:1)
2.Quick ratio: The quick ratio (or) Acid test ratio is a fairly
stringent measure of liquidity. It is determined by dividing quick
assets, i.e., cash, marketable investments and sundry debtors by
current liabilities. This ratio is a better test of financial
strength than the current ratio as it does not consider inventory,
which may be very slow moving.
It may be calculated as follows:
Quick ratio = Liquid assets/Current liabilitiesLiquid assets =
current-(inventories + prepaid expenses)
A quick ratio of 1:1 considered satisfactory.
3.Absolute liquid ratio: This ratio considers only the absolute
liquidity available with the firm. This ratio is also called Cash
Position Ratio or Super Quick Ratio. This is a variation of quick
ratio. This ratio is calculated when liquidity is highly restricted
in terms of cash and cash equivalents.
An ideal cash position is 0.50:1. This ratio is a more rigorous
measure of a firms liquidity position. It is not a widely used
ratio.
It can be calculated as follows:Absolute Liquid Ratio = Absolute
Liquid Assets/Current Liabilities
CASH POSITION RATIO: Cash position ratio explains the percentage
of current liabilities that can be met with the liquid cash. It
expresses the firms ability to meet its current obligations.
Cash position Ratio = cash in hand/ current liabilities
SOLVENCY RATIO: In order to know the long-term financial
position, leverage ratios are calculated. These are also called
capital structure ratios and Leverage ratios. This ratio will
indicate the proportion of debt and equity in the capital structure
of an organization. These are calculated to know the extent to
which operating profits are sufficient to cover fixed interest
charges.
Debt-equity ratio:
Debt equity ratio is an important tool of financial analysis.
Depicts an arithmetical relation between loan funds and owners
funds. This ratio is also known as External Internal Equity Ratio.
This ratio is the basic and the most common measure of studying the
indebtedness of the firm. This ratio is ascertained to determine
long term solvency position of a company. Debt includes both long
term and short term loans in the form of bills payable, mortgages,
debentures, creditors and outstanding or accrued expenses. A high
debt equity ratio indicates the claim of outsiders is greater than
creditors may not consider those of owners because it gives lesser
margin of safety for them at the time of liquidation of the
firm.
A low ratio is considered satisfactory for the shareholders
because it indicates that the firm has not able to sue low cost
outsiders fund to magnify their earnings.It may be calculated by
dividing the long-term debts by shareholders equity earnings.
Debt-Equity Ratio = Outsider Funds / Shareholders Funds i.e. Loan
funds/own funds
Note: Shareholders funds = Capital + Reserves & Surplus.
Proprietary ratio: It indicates the long-term financial solvency
of the firm. The proprietary ratio can never exceed 1:1 i.e., 100%.
When there are no outside liabilities, the ratio would be 1:1;
Standard ratio would be 60% to 70%. It is also known as equity
ratio.
It may express as:
Equity ratio = Share Holders equity / Total assets The higher
the proprietary ratio the lesser is the danger to the creditors in
event of company being wound up. The lower the proprietary ratio
the greater is the risk to the creditors since in the event of
losses a part of their money may be lost besides loss to the
proprietors of the business.
Solvency ratio: It is the ratio of total long-term liabilities
to total assets. It expresses how far the total assets are financed
by the outsiders fund. It also expresses the firms ability to pay
its long-term liabilities with its assets.
Solvency Ratio = Total Long term liabilities / Total assets
FIXED ASSETS RATIO: A variant to the ratio of fixed assets to
net worth is the ratio of fixed assets to the long term funds,
which is calculated as follows:
Fixed assets ratio = Fixed Assets(after deprecation)/Total
Long-term funds
The ratio indicates the extent to which the total fixed assets
are financed by long-term funds of the firm. Generally, the total
of fixed assets should be equal to the long-term funds or say the
ratio should be 100%. The ratio should not be more than 1. If it is
less than one, it shows that a part of the working capital has been
financed through long-term funds.
FIXED ASSETS TO NETWORTH RATIO: It is used to assess how far the
fixed assets are financed by shareholders fund. It helps to assess
the solvency position of the firm. A ratio between 60-65 percent is
considered to be satisfactory.
Fixed assets to net worth ratio=Fixed assets(after
depreciation)/share fund * 100
CURRENT ASSETS TO PROPRITORS FUND RATIO: The purpose of the
ratio is to show percentage of proprietors fund to the current
assets. The ratio indicates the extent to which proprietors funds
are invested in current assets. The ratio is calculated as
follows:
Current assets to proprietors funds ratio = Current assets /
Proprietors fund * 100
PROFITABILITY RATIOS:
Profitability ratios indicate the profitability of a company
during an accounting year and profitability from the point of view
of shareholders of the company. A lower profitability may arise due
to the lack of control over the expenses. Generally, profitability
ratios are calculated either in relation to sales or in relation to
investments. The various ratios are:
(1) Gross profit ratio
(2) Net profit ratio
(3) Return on assets
(4) Return on capital employed
(5) Return on shareholders investments1.Gross profit ratio:
Gross Profit Ratio measures the relationship of gross profit to
net sales and is usually represented as a percentage.It is
calculated as:
Gross profit Ratio = (Gross Profit / Net sales) * 100
Note: Gross Profit = Sales Cost of Goods Sold
2.Net profit ratio: It indicates the relationship between net
profit and net sales. Higher ratio indicates higher profitability
and lower ratio indicates lower profitability.
NPR = Profit after tax / sales * 100
The ratio is thus an effective measure to check the
profitability of the business.
3.Return on assets: Returns on assets are the relationship
between profit after tax and interest and average assets.
The ratio is calculated as under:
Return on assets = Profit after tax and interest / Average
assets * 100
4.Return on capital employed: The ratios express the ability of
the firm to generate profit from the total capital employed. It
shows how far the firm was able to generate profit by properly
utilizing the capital employed.
Return on capital employed = Profit after tax and interest /
Total capital employed * 100
5.Return on shareholders investment: Return on shareholders
investment (or) Shareholders fund are the relationship between net
profit (after interest and taxes) and the shareholders fund.
ROI = Profit after tax and interest / Shareholders funds *
100
The two basic components of this are net profit and shareholders
fund. This ratio is one of the most important ratios used for
measuring the overall efficiency of the firm. As this ratio reveals
how well the resources of a firm are being used, higher the ratio,
better are the results.
RETURN ON EQUITY CAPITAL:It shows the earnings capacity of
proprietors funds. A high ratio gives scope for more retained
earnings, which can be used for expansion, diversification and
consequential development of business.
It is calculated as follows:
Return on Total Equity = Profit after tax / Equity share capital
* 100
EARNING PER SHARE:It indicates the earning power of equity share
capital. EPS is of considerable importance in estimating the market
price of shares.
It is expressed as follows:
Earnings per Share = Net profit after tax / No: of equity
shares
ACTIVITY RATIOS:
Activity ratios measure the efficiency of effectiveness with
which a firm manages its resources or assets. These ratios are
called turnover ratio because they indicates the speed with assets
are converted or turned over into sales. These ratios are based on
the relationship between the level of activity represented by sales
or cost of goods sold, and levels of various asters.
As both the current ratio and the quick ratio the movement of
current assets, it is important to calculate the following turnover
or efficiency ratios to comment upon the liquidity or the
efficiency with which the liquid resources are being used by a
firm.
The various turnover ratios are:
(1) Inventory turnover ratio
(2) Debtors turnover ratio
(3) Creditors turnover ratio
(4) Working capital turnover ratio1.Inventory (stock) Turnover
ratio:It indicates the number of items its average inventory has
been sold and replaced during the year. An important factor
controls profitability of the firm.
Inventory turnover ratio = Cost of goods sold / average
inventory
Note: Average inventory = opening stock + closing stock / 2
A ratio of six or seven times is considered satisfactory. A high
inventory turnover ratio is an indication of good inventory
management. A low inventory turnover ratio indicates excessive
inventory including slow moving and obsolete items resulting in
blocking of funds.
2.Receivable (or debtors) Turnover ratio:It indicates the number
of times on the average the receivable is turnover in each year.
The higher the value of ratio, the more is the efficient management
of debtors. It measures the accounts receivables in terms of number
of days of credit sales during a particular period.
It is calculated as follows:
Debtors Turnover Ratio = Net credit / Average debtors
Average collection period:This ratio is a measure of the
collectibles of accounts receivables and tells about how the credit
policy of the company is being enforced. It indicates on an average
that credit sales are pending uncollected by the concern. It shows
the quality of debtors since it ventilates the speed at which
debtors arte collected.
The ratio may be calculated as:
Collected period = 365 / Debtors turnover ratio
(Or) Average debtors / Net credit sales * No of working days
3.Creditors (or accounts payable) ratio: Creditors turnover
ratio gives the average period enjoyed from the creditors and is
calculate as:
Creditors turnover ratio = Credit purchases / Average accounts
payable
Note: Average accounts payable = Creditors + Bills payable
A higher ratio indicates that creditors are not paid in time
while a low ratio gives an idea that the business is not talking
full advantage of credit period allowed by the creditors.
Average payment period:Average payment period indicate the speed
with which payments for credit purchases are made to creditors.
It is calculated as:
Average age of payables = Months (days) in a year / Creditors
turnover ratio
(or)Average accounts payable / Credit purchases * Months (days)
in a year.
Lower the ratio, the better is the liquidity position of the
firm and higher the ratio it denotes the greater credit period
enjoyed by the firm.
4.Working Capital Turnover ratio:This ratio shows the number of
times working capital is turned-over in a sated period.
It is calculated as follows:Working capital turnover ratio =
Sales / Net working capital
Note: Net working capital = Current assets Current
Liabilities
LEVERAGE RATIO:The term capital structure refers to the
relationship between various (long-term) Preference share capital
and equity share capital including reserves and surplus. Leverage
or capital structure ratio is calculated to test the long-term
financial position of a firm. It helps in assessing the risk
arising from the use of debt capital.
RATIO OF CURRENT LIABILITIES TO PROPRIETORS FUND
The ratio of current liabilities to proprietors fund establishes
the relationship between current liabilities and the proprietors
funds and indicates the amount of long-term funds raised by the
proprietors as against short-term borrowing. This ratio may be
calculated as:Ratio of current liabilities to proprietors fund =
current liabilities / proprietors fund
TOTAL INVESTEMENT TO LONG TERM LIABILITIES
This ratio is calculated by dividing the total of long term
funds by the long term liabilities. It is calculated as:
Total investment to long term liabilities = Shareholders funds +
Long term liabilities / Long-term liabilitiesRESERVE TO EQUITY
CAPITALThis ratio indicates the relationship between the reserves
and equity. It may be expressed as:
Reserve to equity capital = Reserves/Equity share capital *
100
The ratio indicates how much profit the firm generally allocates
for future growth. Higher the ratio generally, better is the
position of the firm
TVS Motor Company
Balance Sheet in Rs. Cr.
Mar '12Mar '11Mar '10Mar '09Mar '08
12 mths12 mths12 mths12 mths12 mths
Sources Of Funds
Total Share Capital47.5147.5123.7523.7523.75
Equity Share Capital47.5147.5123.7523.7523.75
Share Application Money00000
Preference Share Capital00000
Reserves1,121.79951.9841.63789.38797.83
Revaluation Reserves00000
Net worth1,169.30999.41865.38813.13821.58
Secured Loans356.7565.93829.98622.42452.68
Unsecured Loans358.76219.49173.31283.56213.66
Total Debt715.46785.421,003.29905.98666.34
Total Liabilities1,884.761,784.831,868.671,719.111,487.92
Mar '12Mar '11Mar '10Mar '09Mar '08
12 mths12 mths12 mths12 mths12 mths
Application Of Funds
Gross Block2,142.431,972.251,909.141,865.361,790.97
Less: Accum. Depreciation1,116.861,034.66953.41869.42774.49
Net Block1,025.57937.59955.73995.941,016.48
Capital Work in Progress52.5157.3927.0540.4326.57
Investments930.92661.13739.26477.71338.96
Inventories584.56527.92289.73320.55405.38
Sundry Debtors234.07270.62220.31181.5687.86
Cash and Bank Balance13.035.9439.74423.44
Total Current Assets831.66804.48549.78544.11496.68
Loans and Advances299.84464.09410.98427.11342.87
Fixed Deposits00.0761.270.050.29
Total CA, Loans &
Advances1,131.501,268.641,022.03971.27839.84
Deffered Credit00000
Current Liabilities1,149.471,047.94838.62776.08725.71
Provisions106.2791.9866.8765.4960.99
Total CL & Provisions1,255.741,139.92905.49841.57786.7
Net Current Assets-124.24128.72116.54129.753.14
Miscellaneous Expenses0030.0975.3352.77
Total Assets
1,884.761,784.831,868.671,719.111,487.92
Contingent Liabilities212.51204.19121.27170.1135.65
Book Value (Rs)24.6121.0436.4334.2334.59
RATIO ANALYSISRatioYears
Mar '12
Mar '11
Mar '10
Mar '09
Mar '08
12 months12 months12 months12 months12 months
Current ratio0.731.011.21.211.07
Quick ratio0.470.530.720.640.41
Debt equity ratio 1.581.551.871.781.07
Long term debt equity ratio1.211.411.871.781.07
Inventory turnover ratio11.812.0714.8311.738.95
Fixed asserts turnover ratio2.712.632.051.721.58
Total asserts turnover ratio3.973.362.281.892.10
Assets turnover ratio2.712.632.051.721.58
Net profit margin ratio1.781.940.72-1.65-0.84
Adjusted net profit margin1.781.940.72-1.65-0.84
Cash profit margin3.904.123.451.812.17
Net operation profit per share156.18135.41191.28157.73137.68
Profit before interest and tax margin4.0420.28-2.06-3.26
Operation profit margin6.184.133.31.45-
Operating profit per share9.665.596.322.290
SUGGESTION:
TATA STEELS is the ideal company for the investor to
invest,creditors to give product on credit and good for employees
as they are assured for their salary as it has a very good
financial position.
CONCLUTION:
This company is having a great potential for growth both for
investors, shareholders,employees and business partners.