Ratio analysi
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This document is a report analyzing the financial ratios of Cello Plastic Products Ltd for the years 2010-11 and 2011-12. It contains 7 sections - an introduction to the company, objectives of the study, an overview of ratio analysis and classifications of ratios, research methodology, data analysis of key ratios including liquidity, leverage, activity and profitability ratios, suggestions and findings from the analysis, and conclusions. The data analysis section calculates various ratios for the two years and compares the trends, finding that liquidity is increasing while profitability ratios are decreasing from 2010-11 to 2011-12.
Ratio analysi
- 1. AN APPLICATION OF RATIO ANALYSIS FOR CELLO PLASTIC PRODUCTS LTD Submitted in partial fulfillment of the requirement for the Degree of Master of Business Administration) Under the supervision of: Ms Neha Aggarwal Submitted by: Sonali Kukreja
- 2. CONTENTS S.NO. TITLE 1 CELLO –AN INTRODUCTION 2 OBJECTIVES OF THE STUDY 3 RATIO ANALYSIS 4 RESEARCH METHODOLOGY 5 DATA ANALYSIS 6 SUGGESTIONS AND FINDINGS 7 CONCLUSIONS
- 3. CELLO-AN INTRODUCTION Cello plastic products ltd founded by Mr G.D. RATHOD in May 10,1986, at a small factory in Goregaon , Mumbai,with just 60 workers and 7 machines First and largest Manufacturer of Branded household products in India ,having wide range of plastic moulded products. Largest Exporter of Insulated Thermoware from India 2100 employees-more than 300 engineers and plastic technologist.
- 4. OBJECTIVES OF THE STUDY To have an indepth knowledge of ratio analysis of the company To make comparisons between the ratios during different periods(2years data from 2011 to 2012 )
- 5. RATIO ANALYSIS Ratio analysis is a technique of analysis ,comparison and interpretation of financial statements. According to Accountant’s Handbook by Wixon, Kell and Bedford, “a ratio is an expression of the quantitative relationship between two numbers” It is helpful to know about the liquidity, solvency, capital structure and profitability of an organization.
- 6. CLASSIFICATION OF RATIO Types of ratios Liquidity ratio Leverage ratio Activity ratio Profitability ratio
- 7. RESEARCH METHODOLOGY DATA COLLECTION: -Primary Data: No primary data was collected in this project -Secondary Data: Balance sheet,Profit and loss account of the company ,Newspapers and Journals TOOLS USED : •Tables •Bar graphs •diagram
- 8. DATA ANALYSIS 1) LIQUIDITY RATI0 a) Current ratio (RS IN CRORE) YEAR 2010-11 2011-12 Current assets 98.77 127.38 Current liabilities 21.97 25.34 CURRENT RATIO 4.49 4.49 CURRENT RATIO 6 4 2 0 CURRENT RATIO 2010-11 2011-12
- 9. b) Quick ratio (RS IN CRORE) YEAR 2010-11 2011-12 Quick assets 66.68 84.64 Current liabilities 21.97 25.34 QUICK RATIO 3.03 3.34 QUICK RATIO 3.4 3.3 3.2 3.1 3 2.9 2.8 QUICK RATIO 2010-11 2011-12
- 10. 2) LEVERAGE RATIO a) Debt equity ratio (RS IN CRORE) YEAR 2010-11 2011-12 Long term loans 0.89 1.36 Shareholder’s fund 118.41 151.12 DEBT EQUITY RATIO 0.007 0.009 DEBT EQUITY RATIO 0.01 0.005 DEBT EQUITY RATIO 0 2010-11 2011-12
- 11. b) Proprietary ratio (RS IN CRORE) YEAR 2010-11 2011-12 Shareholder’s funds 118.41 151.12 Long term loan .89 1.36 PROPRIETARY RATIO 99.25% 99.11% PROPRIETARY RATIO 99.30% 99.20% PROPRIETARY RATIO 99.10% 99.00% 2010-11 2011-12
- 12. 3) ACTIVITY RATIO a) Stock turnover ratio (RS IN CRORE) YEAR 2010-11 2011-12 Cost of good sold 122.95 134.24 Average stock 24.49 37.41 STOCK TURNOVER RATIO 5.02 3.588 STOCK TURNOVER RATIO 6 4 STOCK TURNOVER RATIO 2 0 2010-11 2011-12
- 13. b) Debtor turnover ratio (RS IN CRORE) YEAR 2010-11 2011-12 Sales 162.71 174.47 Average debtor 48.57 65.90 DEBTOR TURNOVER RATIO 3.35 2.64 DEBTOR TURNOVER RATIO 4 3 2 1 0 DEBTOR TURNOVER RATIO 2010-11 2011-12
- 14. 4) PROFITABILITY RATIO a) Gross profit ratio (RS IN CRORE) YEAR 2010-11 2011-12 Gross profit 39.76 40.23 Net sales 162.71 174.47 GROSS PROFIT RATIO 24.43% 23.05% STOCK TURNOVER RATIO 25.00% 24.00% STOCK TURNOVER RATIO 23.00% 22.00% 2010-11 2011-12
- 15. b) Net profit ratio (RS IN CRORE) YEAR 2010-11 2011-12 Net profit 22.41 15.23 Net sales 162.71 174.47 NET PROFIT RATIO 13.77% 8.72% NET OROFIT RATIO 15.00% 10.00% NET OROFIT RATIO 5.00% 0.00% 2010-11 2011-12
- 16. SUGGESTIONS AND FINDINGS SUGGESTIONS The profit ratio is decreased in current year so the company should pay attention to this because profit making is the prime objective of every business The company should make the balance between liquidity and solvency position of the company FINDINGS
- 17. CONCLUSIONS Liquidity ratio is increasing from the last year , fixed assets are also increasing compare to the previous year and equity share capital remain same in the current year. Debtors turnover ratio has decreased which shows that the company is not utilizing its debtor’s efficiency and creditors turnover ratio has also reduced which indicates less period of credit enjoyed by the business. Profitability ratio decreases which is not the good indicator for the company
- 18. THANK YOU