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FINANCIAL STATEMENT

ANALYSIS

PROJECT

FINANCIAL Ratios

EXIDE BATTERIES LTD.

MADE BY:
Rajan kumar yadav
1. Current Ratio:

Current Assets
Current Liabilities

Current Ratio of four years are:

YEAR 2016 2017 2018 2019


RATIO 1.86 1.97 1.79 1.77
CURRENT RATIO
1.88

1.86

1.84

1.82

1.8

1.78

1.76

1.74

1.72
2015-16 2016-17 2017-18 2018-19

Analysis: this ratio shows short term financial soundness


of the business .Higher ratio means better capacity to
meet its current obligation .The idea current ratio is 2:1
In case it is very high it shows the idleness of fund. As in
above diagrame year 2017 shows that it meets the
obligation
2.Liquid Ratio

Quick Assets
Current liabilities

Quick Assets=Current Assets-Inventories-Prepaid


Expenses.
Years 2015-16 2016-17 2017-18 2018-19
Ratio 1.11 1.02 0.82 0.85

Liquid Ratio
1.2

0.8

0.6

0.4

0.2

0
2015-16 2016-17 2017-18 2018-19

Analysis: Liquid ratio is a fairly stringent measure of


liquidity.it is based on those current assets which are
highly liquid. Ratio 1:1 is considered as ideal.in above
diagrame 2015-16 shows ideal ratio condition which
means higher quick ratio better the short term
financial position.
3.Debt to Equity Ratio

Debt
Equity

Years 2015-16 2016-17 2017-18 2018-19


Ratio 0.008 0.041 0.009 0.008
Debt to EQUITY Ratio
0.045
0.04
0.035
0.03
0.025
0.02
0.015
0.01
0.005
0
2015-16 2016-17 2017-18 2018-19

Analysis: This ratio asseses the long term financial


position and soundness of enterprises . In general
,lower the debt to equity ratio higher the degree of
protection enjoyed by the lenders
4. Total Assets To Debt Ratio

Total Assets
Debt

Years 2015-16 2016-17 2017-18 2018-19


Ratio 155.31 139.58 138.44 156.46

Total Assets To Debts Ratio


160

155

150

145

140

135

130

125
2015-16 2016-17 2017-18 2018-19

Analysis: this ratio measures the safety margin


available to lenders of long term debt. It measures the
extent to which debt is being covered by assets.Pure
ratio 2:1
5.Proprietary Ratio

Equity
Total Assets

Years 2015-16 2016-17 2017-18 2018-19


Ratio 0.72 0.73 0.73 0.73

Proprietary Ratio
0.732
0.73
0.728
0.726
0.724
0.722
0.72
0.718
0.716
0.714
2015-16 2016-17 2017-18 2018-19

Analysis:
This ratio shows the extent to which total assets have
been financed by the proprietor.Higher the ratio,
higher the safety margin for lenders and creditors.
6. Interest Coverage Ratio

Profit Before Interest and tax


Interest on long term debt

Years 2015-16 2016-17 2017-18 2018-19


Ratio 3020.9 244.4 199.9 186.8

Interest Coverage Ratio


3500

3000

2500

2000

1500

1000

500

0
2015-16 2016-17 2017-18 2018-19

Analysis: this ratio shows the extent to which total


assets have been financed by the proprietor. Higher
the ratio, higher the safety margin for lenders and
creditors.
7.Inventory Turnover Ratio

Cost of goods sold


Average inventory

Years 2015-16 2016-17 2017-18 2018-19


Ratio 0.6 3.75 3.75 3.93
Inventory Turnover Ratio
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2015-16 2016-17 2017-18 2018-19

Ratio

Analysis: The ratio measures how fast inventory is


moving and generating sales.Higher the ratio,more
efficient management of inventories and vice versa.
8.Working capital turnover ratio

Revenue from operations


Working capital

Years 2015-16 2016-17 2017-18 2018-19


Ratio 0.19 5.48 5.97 6.99

Working capital turnover Ratio


8

0
2015-16 2016-17 2017-18 2018-19

Analysis:The ratio shows the number of items working


capital has been employed in the –process of carrying
on business. Higher the,better the efficiency in the
utilization of working capital.
9.Gross profit ratio

Gross profit x100


Revenue from operations
Years 2015-16 2016-17 2017-18 2018-19
Ratios 39 41 34.93 33.82

Gross profit ratio


45
40
35
30
25
20
15
10
5
0
2015-16 2016-17 2017-18 2018-19

Ratios

Analysis: This ratio indicates the relationship between


gross profit and net sales.Higher the ratio,lower the
cost of good sold.
10.Operating ratio
Cost of revenue from operations x100
Revenue from operations

Years 2015-16 2016-17 2017-18 2018-19


Ratios 60 58 65 66

Operating Ratios
68

66

64

62

60

58

56

54
2015-16 2016-17 2017-18 2018-19

Analysis:This ratio is calculated to assess the operation


efficiency of the business. A decline in the operating
ratio, is better because it means higher margin
,andthus, more profit.
11.Operating profit ratio

Operating profit x100


Revenue from operations

Years 2015-16 2016-17 2017-18 2018-19


Ratios 13.30 11.34 11.07 10.67

Operating profit ratio


14

12

10

0
2015-16 2016-17 2017-18 2018-19

Ratios

Analysis:
The objective of computing this ratio is to determine
the operational efficiency of management.in the
above diagrame we can analys the situation.
12.Net profit ratio

Net profit after tax x100


Revenue from operation

Years 2015-16 2016-17 2017-18 2018-19


Ratio 9.14 8.06 7.06 7.97
Net profit Ratio
10
9
8
7
6
5
4
3
2
1
0
2015-16 2016-17 2017-18 2018-19

Analysis: it indicates overall efficiency of the


business.Higher the net profit ratio, better the business.
So from the above we can analys the overall situation
of the company.
13.Return on investment

Profit before interest tax x100


Capital employed

Years 2015-16 2016-17 2017-18 2018-19


Ratios 20.43 17.32 17.4 17.6
Return on investment
21
20.5
20
19.5
19
18.5
18
17.5
17
16.5
16
15.5
2015-16 2016-17 2017-18 2018-19

Ratios

Analysis: It assesses the overall performance of the


enterprise.It measures, how efficienctly the resources
entrusted to the business are used.