A Study On Impact of Ratios On Share Price

A STUDY ON IMPACT OF RATIOS ON SHARE PRICE
By
SANDHYA.J
Reg.No:41904631036
of
SRI SAI RAM ENGINEERING COLLEGE
A PROJECT REPORT
Submitted to the
FACULTY OF MANAGEMENT SCIENCES
In partial fulfillment of the requirements

for the award of the degree
of
MASTER OF BUSINESS ADMINISTRATION
ANNA UNIVERSITY
CHENNAI 600 025
June 2006
ABSTRACT
This project basically throws light on whether the ratios have any impact
on the share price. Thought there are so many ratios, this study has taken ratios
recommended by L.C. GUPTA. The reasons behind the selection of those ratios
are they are failure-predicting ratios, which in turn predict corporate governance
of the company.
So the first work was to segregate the ratios from a bunch of ratios and
study whether there is any impact on share price. Here in this project has taken
28 Companies under Steel sector and analyzed them using ratio analysis over a
period of five years from 2001 to 2005.And yearly average of share price of those
companies were taken, and regression analysis were done by taking these share
price as dependent variable and ratios as independent variable.
Then it has been seen that whether there is relationship between share
price and ratios. If the significance is less than .05 then there is significance
between the share price and ratios.
Initially this study has started with an assumption that there is significant
impact of ratios on Share price. But after having done the analysis with the help
of regression it is found that there is no significant impact of ratios on share price.
This confirms the fact that Share price is indeed influenced by so many other
factors like economic factors, political factors apart from ratios.
TABLE OF CONTENTS
CHAPTER TITLE PAGE
NO NO
Acknowledgement
Abstract
List of tables
Table of regression and correlation i
Table of ratio analysis ii
List of Figures iii
List of Abbreviations iii
1.INTRODUCTION 1
1.1 Industry Profile 3
1.2 Company Profile 7
1.3 Theoretical Perspective 11
CHAPTER-1
1.4 Need For The Study 18
1.5 Scope Of The Study 18
1.6 Objectives Of The Study 19
1.7 Limitations Of The Study 19
CHAPTER-2 2. RESEARCH METHEODOLOGY 20
3.DATA ANALYSIS
3.1 Regression And Correlation 22
CHAPTER-3 Analysis Inference.
3.2 Ratio Analysis Inference. 53
4.FINDINGS AND SUGGESTIONS

4.1 Findings 82
CHAPTER-4 4.2 Suggestions 84
4.3 Implications Of The Study 85
4.4 Conclusion 86
APPENDICES
APPENDIX I
APPENDIX II
REFERENCES
1. INTRODUCTION
Basically there are two types of Analysis for analyzing the performance of
the stocks. Fundamental Analysis and Technical Analysis, Former deals with
financial performance of the company by analyzing Companies balance sheet,
profit & loss, etc, latter deals with demand and supply conditions of the stock.
This project throws light on Fundamental strength of the companies

through ratio analysis and verifies whether ratios have any impact on stock
price. Fundamental analysis is the process of looking at a business at the basic
or fundamental financial level. This type of analysis examines key ratios of a
business to determine its financial health and gives the investor an idea of
picking the value for money stocks.
Many investors use fundamental analysis alone or in combination with

other tools to evaluate stocks for investment purposes. The goal is to determine
the current worth and more importantly, how the market values the stock. This
project focuses on the key tools of fundamental analysis and what they tell us. It
will help the investors follow stocks more closely by having understood the key
ratios and its implications.
The Balance Sheet and the Statement of Income are essential, but they
are only the starting point for successful financial management. Applying Ratio
Analysis to Financial Statements to analyze the success, failure, and progress of
the business is a key tool. Ratio Analysis enables the business owner/manager
to spot trends in a business and to compare its performance and condition with
the average performance of similar businesses in the same industry. To do this
comparing the ratios with the average of ratios of similar businesses and the
same with own ratios for several successive years, watching especially for any
unfavorable trends that may be starting. Ratio analysis may provide the all-
important early warning indications that allow solving the business problems
before the business is destroyed.
1.1 INDUSTRY PROFILE
Iron and Steel industry in India is over 125 years old. India is the tenth
largest producer of crude steel in the world with production of 24 million tonnes
and investment of Rs.1,000 billion. The country produced 23.82 million tonnes
finished steel in 1998-99, compared to a meager one million tonne in 1947. In the
year 1999-2000 it produced 26.48 million tonnes of Finished Steel showing an
increase of 11.16 per cent against the previous year.
HISTORY
The first steel plant was set up by Iron Work Company at Kulti in 1870.
However, large scale production got underway only when the Tata Iron and Steel
Company (TISCO) was set up at Jamshedpur in 1907. The Indian Iron and Steel
Company (IISCO) was set up at Burnpur in 1919. The first unit in the public
sector, now known as Visveswaraya Iron & Steel Limited (VISL) began
production at Bhadravati in 1923. After Independence, three integrated steel
plants were set up in the public sector at Bhilai, Durgapur and Rourkela with one
million tonne capacity. Later two more public sector integrated steel plants came
up at Bokaro and Visakhapatnam and several steel units in the private sector.
Even before the economic liberalization of the 1990s, a few sectors of the
Iron and Steel Industry were liberalized. The major impetus for growth in this
sector came with the economic liberalization of 1991. The industry was
delicensed and opened for private participation; price and distribution controls
were removed; "iron and steel" was placed in the high priority list for automatic
approval of Foreign Direct Investment; and Import-Export procedures were
streamlined. Nineteen major steel plants have been sanctioned in the private
sector, involving an investment of about Rs.300 billion and capacity generation of
13 million tonnes.
GLOBAL SCENARIO
The fast changing world steel scenario has opened up new opportunities
and challenges for India. Out of the total world crude steel production of over 790
million tonnes, about 50 per cent is produced in the developing countries. While
production in the Western countries had reached a plateau, the emerging
demand would boost further production in the developing world. The Indian Steel
Industry has competitive advantages, like abundance of raw materials, highly
skilled technical manpower and cheap labor.
PRODUCTION
The health of the iron and steel industry is linked with the economic condition of
the nation. The expected growth rate of the economy, led by large-scale
investments in infrastructure and housing sectors, the iron and steel sector has
shown growth. The production of finished steel has gone up by 12 per cent
during 1999-2000 compared to 1998-99 while that of pig iron increased by 5 per
cent and sponge iron by 2 per cent.
EXPORTS
The export performance of the Indian steel industry was very good during
1999-2000. Exports of finished steel increased by almost 51 per cent to 2.6
million tonnes while exports of pig iron increased to 2.9 million tonnes.
International prices have started firming up, and this would ensure the continued
presence of Indian steel in the global markets. Exports are also expected to take
care of the increased supply of some finished steel products especially from the
new producers in the country. Domestic steel prices have also firmed up in line
with the international markets. This is expected to improve the bottom line of the
major steel producers in the country.
PER CAPITA CONSUMPTION
India’s present per capita consumption of crude steel is only 24 kg. which
is very low compared to the developed and developing countries – 422 kg. in
USA, 417 kg. in Germany, 109 kg. in Russia and 87 kg. in China. Our
consumption is less than 1/5th of the world average i.e. 121 kg. Government of
India has taken a number of steps to boost up the per capita consumption of
steel in the country.
MAJOR PLAYERS
Steel Authority of India Limited (SAIL) is the leading steel-making

company in India. It is a fully integrated iron and steel maker, producing both
basic and special steels for domestic construction, engineering, power, railway,
automotive and defence industries and for sale in export markets. SAIL is the
largest producer of steel in India and eleventh largest in the world. Others major
steel producers are Tisco ( Tata Iron and Steel Corporation ltd),Essar Steel,
Jindal Vijaynagar Steels Ltd, Jindal Strips Ltd , JISCO, Saw Pipes, Uttam Steels
Ltd ,Ispat Industries Ltd ,Mukand Ltd ,Mahindra Ugine Steel Company Ltd ,Tata
SSL Ltd ,Usha Ispat Ltd ,Kalyani Steel Ltd ,Electro Steel castings Ltd ,Sesa Goa
Ltd ,NMDC ,Lloyds SteeI Industries Ltd
STEPS TAKEN TO BOOST STEEL INDUSTRY
In budget 2004-05, the customs duty on several raw materials used by the
steel sector like noncoking coal, metcoke and nickel has been reduced to 5 per
cent and on coking coal to 'zero'. To bring down the prices of steel, the excise
duty on steel products was reduced from 16 per cent to 8 per cent with effect
from February 28, 2004 with a caveat that the duty regime will be reviewed.
MINISTRY’S INITIATIVES
The government has been making all out efforts to help the domestic steel
industry to overcome their problems. To boost the demand and consumption of
steel, an Institution for Steel Development and Growth (INSDAG) has been set
up involving the leading steel producers in the country. The Development
Commissioner for Iron and Steel had launched a national campaign for
increasing the demand for steel in the non-traditional sectors, particularly in the
construction, rural and agro-based industrial sectors. Setting up a steel exporters
forum and an empower committee for research and development.
THE GROWTH PROFILE
The liberalization of industrial policy taken by the government has given a

definite impetus for entry, participation and growth of the private sector in the
steel industry. While the existing units are being expanded, a large number of
new steel plants have also come up in different parts of the country based on
modern, cost effective, state of-the-art technologies.
At present, total (crude) steel making capacity is over 34 million tonnes

and India, the 8th largest producer of steel in the world, has to its credit, the
capability to produce a variety of grades and that too, of international quality
standards. As per the ratings of the prestigious “World Steel Dynamics", Indian
HR Products are classified in the Tier II category quality products. While the
increase in the domestic prices of steel because of an increase in international
demand cannot be avoided, attention needs to be paid to the problem of
adequate and reliable supply of coal to the steel industry. The movement of raw
materials and finished steel would need good rail and road network as well as
substantial improvement in port handling, storage and haulage facilities.
1.2 COMPANY PROFILE
Apollo Sindhoori Capital Investments Limited is a professionally

managed Financial Services organization, belonging to Apollo Hospitals Group.
Being the group’s maiden foray into the financial services sector, Apollo
Sindhoori successfully carries the strong linage of service, as demonstrated by
the flagship company of the group.
Apollo Sindhoori is a Corporate Member of National Stock Exchange

(NSE), The Stock Exchange, Mumbai and Depository Participant of National
Securities Depository Limited (NSDL), with a network of 250 branches spread
all over India. Transparency and efficiency have been the hallmarks of their
operations and has earned them goodwill of a large client base.
The company’s Board of Directors feature many illustrious personalities.

The Board is managed by the Chairperson Mrs. Suneetha Reddy, Diploma
holder from Institute of Financial Management and Research [IFMR], one of the
top business schools in India. Mrs. Reddy spearheaded the first investment by a
Foreign Institutional Investor [FII] into the healthcare sector in India. She
shoulders huge responsibility as the Director – Finance of Apollo Hospitals.
The company’s day-to-day affairs are managed by the Executive Director

Mr. P B Subramaniyan, qualified Company Secretary. After spending over a
decade with Apollo Hospitals as its company Secretary, Mr. P B Subramaniyan
has taken over as whole time Director of Apollo Sindhoori in 1995 and is solely
responsible for the company’s overall functioning and development.
After a smooth beginning in early 1996 at Chennai, Apollo Sindhoori has

spent the initial period in establishing and consolidating its presence throughout
South India. The company has established its credentials very early and made its
mark in the industry in a very short time.
Apollo Sindhoori has become Depository Participant of National Securities
Depository Limited in 1999, acquired the membership of The Stock Exchange,
Mumbai during 2000. However, maintaining the tradition of the group in
identifying the world trends, whereby trading in Derivatives segments was
improving by leaps and bounds, Apollo Sindhoori has been one of the foremost
members to obtain license to trade in Derivatives in 2001.
The year 2004 has seen Apollo Sindhoori becoming a corporate member
of NMCE and NCDEX, for trading in commodities segment, through another
group company, Apollo Sindhoori Commodities Trading Limited. These additional
services helped Apollo Sindhoori in establishing a stranglehold on the stock
markets and enabled it to provide one stop solution for all Capital & Commodities
market services to its clients.
Apollo Sindhoori manages a huge client base, in excess of 45,000 clients

throughout the country, achieved through transparent trading systems, effective
client service, highly competitive brokerage structure and prompt payouts. The
focus had always been on client satisfaction through advanced technology,
adopting latest trading methods and adding all other related services. The
widespread presence of the organization has also helped in rendering very
efficient client service.
Apollo Sindhoori is a technology driven company and takes pride as the

first in introducing the most scientific and advanced trading systems in an
otherwise conventional Indian stock broking industry. The state of the art
software contains many phenomenal features.
Commodities’ trading is just witnessing the beginning of phenomenal

growth. Recognizing the huge potential in this segment Apollo Sindhoori has
enabled all the branches in the network to trade on Commodities at all the
locations through CTCL solution. Apollo Sindhoori is an active participant of all
major IPO’s.
SERVICES OFFERED
Apollo sindhoori offers branch and internet trading services. The various
branch based services offered by Apollo sindhoori are buying and selling of
shares both on NSE and BSE, Derivatives Trading, Margin trading, Depository
services with NSDL and Facilitating Securities borrowing
Internet trading with the following facilities
Research: Historical financials for 5,000 companies, Give your self the
advantage of making informed decisions. Streaming Quotes: Streaming Stock
And Derivatives Quotes Charting: Charting allows users to view Intra-day and
End of the Day prices to perform Technical Analysis. Portfolio: A comprehensive
Portfolio Management Console that allows creation of multiple accounts News:
Updated Corporate News to predict the market movements based on external
factors IPO: To conduct in depth analysis of new issues Decision Support
Systems (DSS).Intra-day market information.
SERVICES PROVIDED
Dematerialization:
Conversion of the physical securities to electronic form. All you have to do

is to fill up the Demat Request Form and surrender your physical share certificate
to us. We will process the shares and electronically inform the depository. Upon
confirmation from the Registrar / company, your account with us will be credited
with electronic shares by the depository. This normally takes 15-45 days.
Rematerialisation:
Similarly, conversion of the electronic shares back into physical form is

also processed as fast as Dematerialization.
Electronic Custody:
Every Apollo Sindhoori Demat Account holder will be provided a periodical

holding / transaction statement. In addition one could also confirm the balance
over phone, or in person and now also through Internet.
Pledge Marking:
In case of contingencies, pledge marking for availing loans from your

banker against demat shares is possible. You can pledge your electronic shares
and avail up to 75% of the market value (up to Rs.20 lakhs per account), at
reduced rates of interest compared to physical shares.
Transfer of Securities:
When you buy shares, you have to inform your Client Id and DP Id to your
broker. Your account with us will be credited with securities bought by you on
payout day. On sale of securities you have to give us the delivery instruction slip
duly signed by you and the securities will be transferred to the brokers account.
You may also use the services of Speed E. for online transfer. We are however
coming out with our own fully secured digitally signed Transfer Instructions
feature at a low cost to enable you transfer with the convenience of transferring
from trading site itself.
Apollo Sindhoori has ambitious plans and is striving hard to achieve them.
With further up-gradation of technology and plans to add more products to the
portfolio like trading on Retail Debt Markets and distribution of financial products
including Mutual Funds and Insurance schemes the company aims at reaching
the status of Financial Supermarket and provide one stop solution to all their
clients.
1.3 THEORETICAL PERSPECTIVE
1.3.1 RATIO ANALYSIS
MEANING: RATIO ANALYSIS
Ratio analysis is the calculation and comparison of ratios which are

derived from the information in a company's financial statements. The level and
historical trends of these ratios can be used to make inferences about a
company's financial position, its operations and attractiveness as an investment.
Ratios are calculated from one or more pieces of information from a company's
financial statements. A financial ratio can give a financial analyst an excellent
picture of a company's situation and the trends that are developing.
A ratio gains utility by comparison to other data and standards. If the

historical trend is upwards, for example has been increasing steadily for the last
few years, this would also be a favorable sign that management is implementing
effective business policies and strategies.
Financial ratio analysis groups the ratios into categories which tell us about
different facets of a company's finance and operations. An overview of some of
the categories of ratios is given below.
• Leverage Ratios which show the extent that debt is used in a company's
capital structure.
• Liquidity Ratios which give a picture of a company's short term financial
situation or solvency.
• Operational Ratios which use turnover measures to show how efficient a
company is in its operations and use of assets.
• Profitability Ratios which use margin analysis and show the return on
sales and capital employed.
• Solvency Ratios which give a picture of a company's ability to generate
cash flow and pay it financial obligations.
1.3.1.1 LIQUIDITY RATIOS
The degree to which an asset or security can be bought or sold in the

market without affecting the asset's price. Liquidity is characterized by a high
level of trading activity. The ability to convert an asset to cash quickly. It is safer
to invest in liquid assets than illiquid ones because it is easier to get money out
of the investment. A liquidity ratio that measures a company's ability to pay short-
term obligations.
CURRENT RATIO
The ratio is mainly used to give an idea of the company's ability to pay
back its short-term liabilities (debt and payables) with its short-term assets (cash,
inventory, receivables). The higher the current ratio, the more capable the
company is of paying its obligations. A ratio under 1 suggests that the
company would be unable to pay off its obligations if they came due at that
point. While this shows the company is not in good financial health,
Current asset
Current ratio =
Current liability
CREDITORS TURNOVER RATIO
A short-term liquidity measure used to quantify the rate at which a

company pays off its suppliers. Creditors turnover ratio is calculated by taking the
total purchases made from suppliers and dividing it by the average accounts
payable amount during the same period.
Credit purchases
Creditors turnover ratio =
Average accounts payable
The measure shows investors how many times per period the company
pays its average payable amount. If the turnover ratio is falling from one period to
another, this is a sign that the company is taking longer to pay off its suppliers
than it was before. The opposite is true when the turnover ratio is increasing,
which means that the company is paying of suppliers at a faster rate.
DEBTORS TURNOVER RATIO
An accounting measure used to quantify a firm's effectiveness in

extending credit as well as collecting debts. The receivables turnover ratio is an
activity ratio, measuring how efficiently a firm uses its assets.
Credit sales
Debtors turnover ratio =
Average accounts Receivables
By maintaining accounts receivable, firms are indirectly extending interest-

free loans to their clients. A high ratio implies either that a company operates on
a cash basis or that its extension of credit and collection of accounts receivable is
efficient. A low ratio implies the company should re-assess its credit policies in
order to ensure the timely collection of imparted credit that is not earning interest
for the firm.
1.3.1.2 LEVERAGE RATIOS
Any ratio used to calculate the financial leverage of a company to get an

idea of the company's methods of financing or to measure its ability to meet
financial obligations. There are several different ratios, but the main factors
looked at include debt, equity, assets and interest expenses.
DEBT- EQUITY RATIO
A measure of a company's financial leverage calculated by dividing long-

term debt by stockholder equity. It indicates what proportion of equity and debt
the company is using to finance its assets.
Total liabilities
Debt equity ratio =
Share holders equity
A high debt/equity ratio generally means a company has been aggressive
in financing its growth with debt. This can result in volatile earnings as a result of
the additional interest expense. If a lot of debt is used to finance
increased operations (high debt to equity), the company could potentially
generate more earnings than it would have without this outside financing.
The debt/equity ratio will also be dependent on the industry in which the
company operates. For example, capital-intensive industries such as
auto manufacturing tend to have a debt/equity ratio above 2, while personal
computer companies have a debt/equity of under 0.5.
1.3.1.3 PROFITABILITY RATIOS
EBDIT
EBDIT is the abbreviation of Earnings before Depreciation Interest and

Tax.EBDIT can be used to analyze and compare profitability between companies
and industries because it eliminates the effects of financing and accounting
decisions.A common misconception is that EBDIT represents cash earnings.
EBDIT is a good metric to evaluate profitability, but not cash flow.
OPERATING CASH FLOW
Operating cash flow is the cash generated in the course of a company

running its business. It's arguably a better measure of a business's profits than
earnings because a company can show positive net earnings (on the income
statement) and still not be able to pay its debts. It's cash flow that pays the bills.
We can also use OCF as a check on the quality of a company's earnings. If a
firm reports record earnings but negative cash, it may be using aggressive
accounting techniques.
1.3.1.4 BALANCE SHEET RATIOS
NETWORTH TO DEBT
Net worth includes share capital, Reserve and surplus and Profit after tax.
Debt includes both secured and unsecured loans.This ratios indicates that
whether the business is relying on loans or internal accruals to meet its current
obligation.
NETWORTH TO TANGIBLE ASSET
Net worth includes share capital, Reserve and surplus and Profit after tax.
Tangible asset: An asset that has a physical form such as machinery, buildings
and land.
Tangible asset = total asset - intangible asset
1.3.2 REGRESSION ANALYSIS
Multiple regression can establish that a set of independent variables

explains a proportion of the variance in a dependent variable at a significant level
(through a significance test of R2), and can establish the relative predictive
importance of the independent variables (by comparing beta weights). Power
terms can be added as independent variables to explore curvilinear effects.
Cross-product terms can be added as independent variables to explore
interaction effects. One can test the significance of difference of two R2's to
determine if adding an independent variable to the model helps significantly.
Using hierarchical regression, one can see how most variance in the dependent
can be explained by one or a set of new independent variables, over and above
that explained by an earlier set. Of course, the estimates (b coefficients and
constant) can be used to construct a prediction equation and generate predicted
scores on a variable for further analysis.
The Regression Equation. A line in a two dimensional or two-variable space is

defined by the equation Y=a+b*X; in full text: the Y variable can be expressed in
terms of a constant (a) and a slope (b) times the X variable. The constant is also
referred to as the intercept, and the slope as the regression coefficient or B
coefficient. For example, GPA may best be predicted as 1+.02*IQ. Thus, knowing
that a student has an IQ of 130 would lead us to predict that her GPA would be
3.6 (since, 1+.02*130=3.6).
In the multivariate case, when there is more than one independent

variable, the regression line cannot be visualized in the two dimensional space,
but can be computed just as easily. For example, if in addition to IQ we had
additional predictors of achievement (e.g., Motivation, Self- discipline) we could
construct a linear equation containing all those variables. In general then,
multiple regression procedures will estimate a linear equation of the form:
Y = a + b1*X1 + b2*X2 + ... + bn*Xn

1.3.3 CORRELATION COEFFICIENT
The correlation coefficient r is a measure of the linear relationship

between two attributes or columns of data. The correlation coefficient is also
known as the Pearson product-moment correlation coefficient. The value of r can
range from -1 to +1 and is independent of the units of measurement. A value of r
near 0 indicates little correlation between attributes; a value near +1 or -1
indicates a high level of correlation.
When two attributes have a positive correlation coefficient, an increase in

the value of one attribute indicates a likely increase in the value of the second
attribute. A correlation coefficient of less than 0 indicates a negative correlation.
That is, when one attribute shows an increase in value, the other attribute tends
to show a decrease.
Consider two variables x and y:
 If r = 1, then x and y are perfectly positively correlated. The possible

values of x and y all lie on a straight line with a positive slope in the (x,y)
plane.
 If r = 0, then x and y are not correlated. They do not have an apparent
linear relationship. However, this does not mean that x and y are
statistically independent.
 If r = -1, then x and y are perfectly negatively correlated. The possible
values of x and y all lie on a straight line with a negative slope in the (x,y)
plane.
1.4 NEED FOR THE STUDY
To outline a set of key ratios out of numerous available ratios for analyzing
the companies performance. This is keeping in view the interest of the retail
investor, who would find difficult to segregate important ratio from the numerous
ratios available in ratio analysis.
1.5 SCOPE OF THE STUDY
The scope of the project is to analyse fundamental strength of the

companies by doing ratio analysis. In ratio analysis twelve ratios were taken to
identify the performance of the company they are EBDIT/sales, EBDIT /Total
asset+dep, OCF/sales, OCF/ total asset+dep,Net worth/debt, Net worth /tangible
asset,C.L / tan asset, drs-crs/sales,Debt -Equity ratio,Current ratio, Debtors
turnover ratio, Creditors turnover ratio.
1.6 OBJECTIVES OF THE STUDY
Primary objective:
 To identify the level of impact of ratios on share price.
Secondary objective:
 To identify the financial performance of companies of the steel industries.
 To know the share price movement in the market.
 To identify the financial ratios that very much influences the share price.
 To identify the prime ratio.
1.7 LIMITATIONS OF THE STUDY
 This study is mainly based on information gathered from secondary data.
 This study is limited to the steel sector industries only.
 All the firms do not follow the same accounting standards and convictions.
Not all the ratios were taken to identify the company’s performance.
Ratio analysis is not the only method to analyze the company performance
 Time constraint
2. RESEARCH METHODOLOGY
2.1 RESEARCH DESIGN : ANALYTICAL RESEARCH
Analytical research design is that to analyze the data that is already

available with the company by using statistical tools.
2.2 DATA COLLECTION METHOD : SECONDARY DATA
When the data was not collected by the researcher, but it is derived
from other source through net and past records maintained by the
company then such data is referred to as secondary data.
In my study the secondary data’s are collected through
 Journals , magazine and Company web sites
 Capital line plus database
2.3 TOOLS USED:
The tools that are used in my study are
2.3.1 Ratio Analysis

Ratio analysis is the calculation and comparison of ratios which are
derived from the information in a company's financial statements. The
level and historical trends of these ratios can be used to make inferences
about a company's financial condition, its operations and attractiveness as
an investment.
2.3.2 SPSS
2.3.2.1 Regression analysis

Regression analysis is a method of analysis that enables you to
quantify the relationship between two or more variables (X) and (Y) by
fitting a line or plane through all the points such that they are evenly
distributed about the line or plane.
2.3.2.2 Correlation analysis

Correlation is a technique for investigating the relationship between
two quantitative, continuous variables. Correlation is the degree or extent
of the relationship between two variables. If the value of one variable
increases when the value of the other increases, they are said to be
positively correlated. If the value of one variable decreases when the
value other variable is increasing it is said to be negatively correlated. If
one variable does not affect the other they are considered to not be
correlated.
3. 1 REGRESSION AND CORRELATION ANALYSIS INFERENCE.
ADITYA ISPAT
ANOVA
H0: Regression equation cannot explain the dependence between share price
and OCF/Total Asset + depreciation
H1: Regression equation explains the dependence between the variables,
REGRESSION
H0: There is no relationship between share price and OCF / total asset + dep
H1: There is relationship between the share price and OCF/total asset + dep.
Null hypothesis is rejected since the significance is 0.014
Table 3.1.1
Regression and Correlation Aditya Ispat
Ratio R2 ADJ.R2 ANOVA sig B

OCF/Tot asset+dep 0.902 0.869 0.014 204.101
RATIO CORRELATION
OCF/sales 0.931
OCF/Total asset+dep 0.95
INFERENCE:
OCF/Sales, OCF/Total Asset+Dep, and share price were highly
correlated. That is when there is increase in one variable there is increase in the
other variable vice versa.
Here the independent variable (OCF/Tot asset+dep) explains the 90.2% of
variance .The significance between the variable is good as the sig is .014 which
is less than .05.Thus OCF/Total Asset+dep influence the share price a lot than
any other ratios.
ANIL
ANOVA
H0: Regression equation cannot explain the dependence between the share
price and the other variable.
H1: Regression equations explain the dependence between the share price and
the other variables.
REGRESSION
H0: There is no relationship between share price and other variables.
H1: There is relationship between the share price and other variables.
Null hypothesis is rejected since all the significance between the share price and
the other variable were less than .05
Table 3.1.2
Regression and Correlation Anil special steel industries limited
RATIO R2 ADJ. R2 ANOVA sig B

Net worth/debt 0. 839 0.786 0.029 37.128
Net worth/Tan asset 0.988 0.977 0.012 -117.72
creditors turnover ratio 1 1 0.002 1.35
Debtors turnover Ratio 1 1 . 0.163
RATIO CORRELATION
Net worth/ Debt 0.916
Debt-Equity ratio 0.904
Creditors turnover ratio 0.802
Debtors turnover ratio 0.888
INFERENCE:
Net worth/ Debt, Debt-Equity Ratio, Creditors turnover ratio, debtors
turnover ratio and share price were highly correlated. That is when there is
increase/decrease in one variable there is increase/decrease in the other
variable. The independent variable Net worth/ Debt, Net worth/Tan asset,
creditors turnover ratio, Debtors turnover Ratio explains 83.9%,98.8%,100%
and100% of variance. The significance between the variable is good as the sig is
less than .05.thus these ratios influences share price.
ASHIRWAD
ANOVA
price and the D.E Ratio, net worth to tangible asset.
the D.E Ratio, net worth to tangible asset.
REGRESSION
H0: There is no relationship between the share price and D.E Ratio, net worth to
tangible asset.
H1: There is relationship between the share price and D.E Ratio, net worth to
tangible asset.
Null hypothesis is rejected as the sig are .008 and .005 which is less than
less than .05
Table 3.1.3
Regression and Correlation of Ashirwad steel industries limited
Ratio R2 ADJ. R2 ANOVA sig B

Debt-Equity ratio 0.933 0.91 0.008 18.083
Net worth /tan asset 0.995 0.991 0.005 103.184
Ratio CORRELATION
Debt-Equity Ratio 0.966
Current Ratio 0.922
Net worth /tan asset -0.908
INFERENCE:
Debt-Equity ratio, Current ratio and share price were highly correlated.
Net worth /tan asset and share price is negatively correlated i.e., when there is
increase/decrease in one variable there increase/decrease in the other variable.
Here the independent variable Debt-Equity ratio, Net worth /tan asset
explains the 93.3%, 99.5% of variance. The significance between the variable is
good as the sig is .008 and .005 which is less than .05.Thus these ratios
influences the share price.
BHUSHAN
ANOVA
price and the D.E Ratio, debtors turnover ratio
the D.E Ratio, debtors turnover ratio
REGRESSION
H0: There is no relationship between the share price and D.E Ratio, debtors
turnover
H1: There is relationship between the share price and D.E Ratio, debtors
turnover Ratio
Null hypothesis is rejected as the sig are .003 and .004 which is less than
less than .05
Table 3.1.4
Regression and Correlation of Bhushan steel & Strips ltd

Debtors turnover Ratio 0.962 0.949 0.003 39.773
RATIO CORRELATION
EBDIT/sales -0.966
OCF/Tot asset+dep 0.971
Drs-crs/sales -0.92
Net worth /debt -0.912
Net worth /tan asset -0.924
Debtors turnover Ratio 0.981
INFERENCE:
OCF/Total asset+dep, Debt-Equity ratio, Debtors turnover ratio and share
price were highly correlate, where as EBDIT/sales, Drs-crs/sales, Net worth/debt,
Net worth /tan asset and share price were negatively correlated. That is when
there is increase/decrease in one variable there will be increase/decrease in the
other variable.
The independent variable Debtors turnover Ratio, Debt-Equity ratio
explains the 96.2%, 99.6% of Variance. There is significance between the
variable as it is less than .05. Thus Debt-Equity ratio, Net worth /tan asset
influence the share price a lot than any other ratios.
BHUWALKA
ANOVA
price and the C.L to tangible asset, D.E Ratio, OCF to Sales, Net worth/debt
H1: Regression equations explain the dependence between the share price
and the C.L to tangible asset, D.E Ratio, OCF to Sales, Net worth to debt.
REGRESSION
H0: There is no relationship between the share price and C.L to tangible asset
D.E Ratio, OCF to Sales, Net worth to debt
H1: There is relationship between the share price and C.L to tangible asset D.E
Ratio, OCF to Sales, Net worth to debt
Null hypothesis is rejected as the significance are .015, .002 and .002 which
is less than less than .05
Table 3.1.5
Regression and Correlation of Bhuwalka Steel industries limited

C.L / Tan Asset 0.894 0.858 0.015 236.343
Net worth/debt 0.998 0.997 0.002 128.757
OCF/sales 1 1 0.002 -65.764
Debt-Equity Ratio 1 1 . 9.842
RATIO CORRELATION
C.L / Tan Asset 0.945
INFERENCE:
C.L / Tan Asset and share price were moderately correlated. That is when
there is increase/decrease in one variable there is increase/decrease in the other
variable. The independent variable C.L / Tan Asset, Net worth/Debt, OCF/sales
Debt-Equity Ratio explains the 89.4%, 99.8%, 100%, 100%, of variance. The
significance between the variable is good as the sig are .015, .002, .002 which is
less than .05. Thus C.L / Tan Asset, Net worth/debt, OCF/sales, Debt-Equity
Ratio influences the share price a lot than any other ratios.
BILPOWER
ANOVA
price and the Net worth to tangible asset, creditors turnover ratio, OCF to
Sales, Net worth to debt.
The Net worth to tangible asset, creditors turnover ratio, OCF to Sales, Net
worth to debt.
REGRESSION
H0: There is no relationship between the share price and Net worth to tangible
asset, Creditors turnover ratio, OCF to Sales, Net worth to debt.
H1: There is relationship between the share price and Net worth to tangible
asset, Creditors turnover ratio, OCF to Sales, Net worth to debt.
Null hypothesis is rejected since the significance is less than less than .05
Table 3.1.6
Regression and Correlation Analysis of Bilpower ltd
RATIO R2 ADJ. R2 ANOVA B

sig
OCF/sales 0.962 0.949 0.003 899.123
creditors turnover ratio 1 0.999 0 -6.007
Net worth/ Tan Asset 1 1 0.001 -9.137
Net worth/debt 1 1 . -0.107
RATIO CORRELATION
EBDIT/Sales 0.939
EBDIT/tot asset+dep 0.953
OCF/sales 0.981
Net worth/ Tan Asset -0.909
creditors turnover ratio -0.623
INFERENCE:
As per the thumb rule of correlation + 0.7 to + 1 is highly correlated. Here
EBDIT/Sales, EBDIT/tot asset+dep, OCF/sales, OCF/Tot asset+dep, Debt-Equity
Ratio and share price were highly correlated. That is when there is increase in
one variable there is increase in the other variable. Net worth/ Tan Asset,
creditors turnover ratio and share price were negatively correlated. That is when
there is increase/decrease in one variable there will be increase/decrease in the
other variable.
Here the independent variable (C.L / sales) explains the 96.2% of
variance, creditors turnover ratio explains the 100% of variance, Net worth/ Tan
Asset explains the 100% of variance, Net worth/debt explains the 100% of
variance.
The significance between the variable is good as the sig are .003, .001
which is less than .05.Thus OCF/sales, creditors turnover ratio, Net worth/ Tan
Asset, Net worth/debt influences the share price a lot than any other ratios.
EAST COAST STEEL
ANOVA
price and the debt-equity ratio.
the debt-equity ratio.
REGRESSION
H0: There is no relationship between the share price and debt-equity ratio.
H1: There is relationship between the share price and debt-equity ratio.
Null hypothesis is rejected since the significance is less than less than .05.
Table 3.1.7
Regression and Correlation of East coast steel Ltd

Debt-Equity Ratio 0.944 0.925 0.006 -3.733
RATIO CORRELATION
Debt-Equity Ratio -0.972
INFERENCE:
Debt-Equity Ratio and share price were negatively correlated. That is
when there is increase in one variable there will decrease in the other variable
and vice versa. Here the independent variable (Debt-equity Ratio) explains the
94.4% of variance. The significance between the variable is good as the sig is .
006 which is less than .05.Thus Debt-equity ratio influences the share price a lot
than any other ratios.
ESSAR STEEL
ANOVA
price and the debtors turnover ratio.
the debtors turnover ratio.
REGRESSION
H0: There is no relationship between the share price and debtors turnover ratio.
H1: There is relationship between the share price and debtors turnover ratio.
Null hypothesis is rejected since the significance is less than less than .05.
Table 3.1.8
Regression and Correlation of Essar steel Ltd

Debtors turnover Ratio 0.937 0.906 0.032 34.962
RATIO CORRELATION
INFERENCE:
Debt-equity ratio, debtors turnover ratio and share price were highly
other variable.
Here the independent variable (Debtors turnover Ratio) explains the
032 which is less than .05.Thus Debtors turnover ratio influences the share price
a lot than any other ratios.
ISHIBARS
Table 3.1.9
Regression and Correlation of Ishibars Ltd
RATIO CORRELATION
EBDIT/Sales 0.804
EBDIT/tot asset+dep 0.768
OCF/sales 0.77
INFERENCE:

EBDIT/Sales, EBDIT/tot asset +dep, OCF/sales, OCF/Tot asset+dep, Creditors
Ratio and share price were highly correlated. That is when there is increase in
one variable there is increase in the other variable.
ISPAT INDUS
ANOVA
price and the Debtors-Creditors to sales, Creditors turnover ratio.
the Debtors-Creditors to sales, Creditors turnover ratio.
REGRESSION
H0: There is no relationship between the share price and Debtors-Creditors to
sales, Creditors turnover ratio.
H1: There is relationship between the share price and Debtors-Creditors to sales,
Creditors turnover ratio.
Null hypothesis is rejected as the significance is .001, .002 which is less
than less than less than .05.
Table 3.1.10
Regression and Correlation of Ispat Industries Ltd

Drs – Crs / Sales 0.978 0.97 0.001 134.636
Creditors turnover ratio 0.998 0.997 0.002 14.299
RATIO CORRELATION
EBDIT/Tot asset+dep 0.968
OCF/Sales 0.893
Drs – Crs / Sales 0.989
INFERENCE:
EBDIT/Tot asset+dep, OCF/Sales, OCF/Total asset+dep, Drs – Crs /
Sales and share price were highly correlated. The independent variables Drs –
Crs / Sales and Creditors turnover ratio explains the 97.8% and 99.8% of
variance. The significance between the variable is good as the sig is .001 and .
002 which is less than .05.Thus Drs – Crs / Sales, Creditors turnover ratio
influence the share price a lot than any other ratios.
JSW STEEL
ANOVA
price and the Net worth/debt, Net worth/Tan asset.
the Net worth/debt, Net worth/Tan asset.
REGRESSION
H0: There is no relationship between the share price and Net worth/debt,
Net worth/Tan asset
H1: There is relationship between the share price and Net worth/debt,
Net worth/Tan asset
Null hypothesis is rejected as the significance is .004; 001which is less than
less than less than .05
Table 3.1.11
Regression and Correlation of JSW Steel Ltd

Net Worth/Debt 0.955 0.94 0.004 226.964
Net worth /tan asset 0.999 0.999 0.001 -1089.19
RATIO CORRELATION
Net worth/debt 0.977
Net worth/Tan asset 0.953
C.L/Tan asset 0.969
Debtors turnoverratio 0.944
INFERENCE:
Net worth/debt, Net worth/Tan asset, C.L/Tan asset, Debtors turnover
ratio, Creditors turnover ratio and share price were highly correlated. That is
when there is increase in one variable there is increase in the other variable.
The independent variable Net Worth/Debt, Net worth /tan asset explains
the 95.5%, 99.9%of Variance. There significance between the variable as it is
less than .05.Thus these ratios influence the share price than any other ratios.
KHANISHK
ANOVA
price and the Net worth/debt.
the Net worth/debt.
REGRESSION
H0: There is no relationship between the share price and Net worth/debt.
H1: There is relationship between the share price and Net worth/debt.
Null hypothesis is rejected as the significance is .005 which is less than
Table 3.1.12
Regression and Correlation of Kanishk steel Industries Ltd

Net Worth/Debt 0.951 0.935 0.005 11.817
RATIO CORRELATION
Net Worth/Debt 0.975
INFERENCE:
Net Worth/Debt, Net worth/Tan asset and share price were highly
correlated, where as Debt-Equity Ratio and share price were negatively
correlated. That is when there is increase/decrease in one variable there will be
increase/decrease in the other variable.
Here the independent variable (Net Worth/Debt) explains the 95.1% of
Variance. The significance between the variable is good as the sig is .005 which
is less than .05. Thus OCF/Total Asset+dep influence the share price a lot
MAHALAKSHIMI
ANOVA
price and the OCF/total asset+dep.
the OCF/total asset+dep.
REGRESSION
H0: There is no relationship between the share price and OCF/total asset+dep.
H1: There is relationship between the share price and OCF/total asset+dep.
Null hypothesis is rejected as the significance is .011 which is less than
Table 3.1.13
Regression and Correlation of Mahalaxmi Ltd

OCF/Tot asset+dep 0.913 0.884 0.011 51173.26
RATIO CORRELATION
INFERENCE:
As per the thumb rule of correlation + 0.7 to + 1 is highly correlated.
Here OCF/Total asset+dep and share price were highly correlated. That is when
there is increase in one variable there is increase in the other variable. Debt-
Equity Ratio and share price were negatively correlated. That is when there is
increase in one variable there is decrease in the other variable and vice versa.
Variance. The significance between the variable is good as the sig is .011 which
is less Than 0.05.Thus OCF/Total Asset+dep influence the share price a lot than
any other ratios.
METAL COATING
ANOVA
price and the Debtors turnover Ratio, Debt-Equity ratio, OCF/Total
asset+dep and EBDIT/Total asset+dep.
the Debtors turnover Ratio, Debt-Equity ratio, OCF/Total asset+dep and
EBDIT/Total asset+dep.
REGRESSION
H0: There is no relationship between the share price and Debtors turnover Ratio,
Debt- Equity ratio, OCF/Total asset+dep and EBDIT/Total asset+dep.
H1: There is relationship between the share price and Debtors turnover Ratio,
Debt-Equity ratio, OCF/Total asset+dep and EBDIT/Total asset+dep.
Null hypothesis is rejected since the significance is less than less than .05
Table 3.1.14
Regression and Correlation of Metal coating Ltd

Debtors turnover Ratio 0.866 0.821 0.022 1.21E-02
OCF/Total asset+dep 1 1 0.002 15.245
EBDIT/Total asset+dep 1 1 . -3.842
RATIO CORRELATION
Debtors turnoverratio 0.93
INFERENCE:
Debtors turnover ratio and share price were highly correlated. That is
when there is increase in one variable there is increase in the other variable.The
independent variable Debtors turnover Ratio, Debt-Equity ratio OCF/Total asset
+dep , EBDIT/Total asset+dep explains the 86.6%, 99.4%,100% 100%of
variance. There is significance between the variable. Thus these ratios influence
the share price than any other ratios.
MODERN STEEL
ANOVA
price and the Net worth/debt, D.E Ratio.
the Net worth/debt, D.E Ratio.
REGRESSION
H0: There is no relationship between the share price and Net worth/debt, D.E
Ratio.
H1: There is relationship between the share price and Net worth/debt, D.E Ratio.
Null hypothesis is rejected as the significance is .005; .003 which is less than
Table 3.1.15
Regression and Correlation of Modern steel Ltd

Net Worth/Debt 0.947 0.929 0.005 113.289
RATIO CORRELATION
EBDIT/Total asset+dep 0.93
OCF/Sales 0.912
INFERENCE:
EBDIT/Total asset+dep, OCF/Sales, OCF/Total asset+dep, Net
worth/debt, Net worth/Tan asset, and share price were highly correlated. That is
when there is increase in one variable there is increase in the other variable. The
independent variable Net Worth/Debt, Debt-equity ratio explains the 94.7%,
005 and .003 which is less than .05. Thus Net Worth/Debt, influences the share
price than any other ratios.
RAIPUR STEEL
Table 3.1.16
Regression and Correlation of Raipur Alloys &Steel Ltd
RATIO CORRELATION
INFERENCE:

Net worth / tan asset, Debtors turnover ratio and share price were highly
other variable.
RAJENDRA STEEL
ANOVA
and OCF/Total Asset + depreciation
H1: Regression equation explains the dependence between the variables, share
price and OCF/Total Asset + depreciation
REGRESSION
H0: There is no relationship between share price and OCF / total asset +
depreciation
H1: There is relationship between the share price and OCF / total asset +
depreciation.
Null hypothesis is rejected since the significance is 0.016.
Table 3.1.17
Regression and Correlation of Rajendra Mechanical Ltd

OCF/Tot asset+dep 0.891 0.855 0.016 -53.702
RATIO CORRELATION
EBDIT/tot asset+dep -0.925
OCF/Tot asset+dep -0.944
INFERENCE:
Here EBDIT/tot asset+dep, OCF/Tot asset+dep and share price were
negatively correlated. That is when there is increase in one variable there is
decrease in the other variable and vice versa.
variance.The significance between the variable is good as the sig is .016 which is
less than .05.Thus OCF/Total Asset+dep influence the share price a lot than any
other ratios.
RATANMANI
Table3.1.18
Ratio analysis of Ratnamani Metals &Tubes Ltd
RATIO CORRELATION
Net worth/Debt 0.564
C.L/Tan asset 0.584
INFERENCE:
As per the thumb rule of correlation + 0.3 to + 0.7 is moderatly correlated.

Here Net worth / Debt, C.L/Tan asset and share price were moderately
other variable.
SHAH ALLOYS STEEL
ANOVA
and Debtors turnover ratio, Creditors turnover ratio
price and Debtors turnover ratio, Creditors turnover ratio.
REGRESSION
H0: There is no relationship between share price and Debtors turnover ratio,
H1: There is relationship between the share price and Debtors turnover ratio,
Null hypothesis is rejected since the significance is 0.026, .006.
Table 3.1.19
Regression and Correlation of Shah Alloys Ltd

Debtors turnover ratio 0.851 0.802 0.026 44.658
Creditors turnover ratio 0.994 0.988 0.006 108.539
RATIO CORRELATION
INFERENCE:
Debtors turnover ratio and share price were highly correlated. That is when there
is increase in one variable there is increase in the other variable.
Here the independent variable (Debtors turnover ratio) explains the 85.1%
of variance Creditors turnover ratio explains the 99.4% of variance.
The significance between the variable is good as the sig is .026 and .006
which is less than .05.Thus Debtors turnover ratio, Creditors turnover ratio
influences the share price a lot than any other ratios.
SOUTHERN STEEL
ANOVA
and EBDIT/Tot asset+dep, OCF/Sales, Current Ratio, Creditors turnoverratio
H1: Regression equation explains the dependence between the variables,
share price and EBDIT/Total asset+dep, OCF/Sales, Current Ratio,
REGRESSION
H0: There is no relationship between share price and EBDIT/Total asset+dep,

OCF/Sales, Current Ratio, Creditors turnover ratio.
H1: There is relationship between the share price and EBDIT/Total asset+dep,
OCF/Sales, Current Ratio, Creditors turnover ratio.
Null hypothesis is rejected as the significance is less than .050.
Table 3.1.20
Regression and Correlation of southern iron & Steel company Ltd
ANOVA
RATIO R2 ADJ. R2 B
sig
EBDIT/Total asset+dep 0.992 0.99 0 179.671
OCF/Sales 1 1 0 -3.765
Current Ratio 1 1 0 -1.374
Creditors turnover ratio 1 1 . -1.08E-02
RATIO CORRELATION
EBDIT/Sales 0.977
C.L/Tan asset 0.987
Current Ratio 0.968
INFERENCE:
EBDIT/Sales, EBDIT/Totalasset+dep, C.L/Tan asset, Creditors turnover
ratio, current ratio and share price were highly correlated. That is when there is
increase in one variable there is increase in the other variable. The independent
variable EBDIT/Total asset+dep and OCF/Sales, Current Ratio, Creditors
turnover ratio explains the 99.2% and 100% of variance.
STELLCO
ANOVA
and OCF to total asset+dep.
price and OCF to total asset+dep.
REGRESSION
H0: There is no relationship between share price and OCF to total asset+dep.
H1: There is relationship between the share price and OCF to total asset+dep.
Table 3.1.21
Ratio analysis of Stelco Strips Ltd

OCF/Tot asset+dep 0.921 0.894 0.01 167.703
RATIO CORRELATION
INFERENCE:
OCF/Total asset+dep, debtors turnover ratio and share price were highly
other variable.
variance.The significance between the variable is good as the sig is .010 which is
less than .05.Thus OCF/Total Asset+dep influences the share price a lot than
any other ratios.
SURYA ROSHINI
ANOVA
and Debtors turnover ratio.
price and Debtors turnover ratio
REGRESSION
H0: There is no relationship between share price and Debtors turnover ratio.
H1: There is relationship between the share price and Debtors turnover ratio.
Table 3.1.22
Regression and Correlation of Surya Roshini Ltd

RATIO CORRELATION
EBDIT/Sales -0.948
EBDIT/tot asset + dep -0.91
OCF/sales -0.924
INFERENCE:
Debtors turnover ratio and the share price is positively correlated. When there is
increase in debtors turnover ratio there is also increase in share
price.EBDIT/Sales, EBDIT/Tot asset +dep, OCF/Sales and share price were
negatively correlated. That is when there is increase in one variable there is
decrease in the other variable and vice versa.
Here the independent variable (Debtors turnover ratio) explains the 90.8%
of variance. The significance between the variable is good as the sig is .012
which is less than .05.Thus Debtors turnover ratio influences the share price a lot
than any other ratio.
TISCO
ANOVA
and EBDIT/tot asset + depreciation
price and EBDIT/tot asset + depreciation .
REGRESSION
H0: There is no relationship between share price and EBDIT/tot asset +
depreciation .
H1: There is relationship between the share price and EBDIT/tot asset +
depreciation .
Table 3.1.23
Regression and Correlation of Tata Steel Ltd

EBDIT/Total asset+dep 0.99 0.987 0 1152.48
RATIO CORRELATION
EBDIT/Sales 0.981
OCF/Sales 0.961
Drs-crs/sales -0.912
Creditors turnover ratio -0.885
INFERENCE:
As per the thumb rule of correlation + 0.7 to + 1 is highly correlated.Here

EBDIT/Sales, EBDIT/Total asset+dep, OCF/Sales, OCF/Total asset+dep, Net
worth/debt, Net worth/Tan asset, Debtors turnover ratio and share price were
highly correlated. That is when there is increase in one variable there is increase
in the other variable. Drs-crs/sales, Creditors turnover ratio and share price were
negatively correlated i.e. when there is increase in the Drs-crs/sales, Creditors
turnover ratio there will be decrease in the share price and vice versa.
Here the independent variable (EBDIT/Tot asset+dep) explains the 99.0% of
Variance and Adjusted r square explains the 98.7% of variance.
Since is the significance is less than .05, EBDIT/ tot asset +dep has more
influence on share price
TULSYAN
ANOVA
and C.L/Tan asset .
price and C.L/Tan asset .
REGRESSION
H0: There is no relationship between share price and C.L/Tan asset.
H1: There is relationship between the share price and C.L/Tan asset.
Table 3.1.24
Regression and Correlation of Tulsyan Ltd

C.L/Tan asset 0.835 0.78 0.03 56.858
RATIO CORRELATION
C.L/Tan asset 0.914
INFERENCE:
C.L/Tan Asset and share price were highly correlated. That is when there is
increase in one variable there is increase in the other variable.
Here the independent variable (C.L/Tan Asset) explains the 83.5% of
variance and Adjusted r square explains the 78% of variance. The significance
between the variable is good as the sig is .030 which is less than .05.Thus
C.L/Tan Asset influences the share price a lot than any other ratios.
UTTAM GALVA
ANOVA
and Net worth to debt, debtors turnover ratio.
price and Net worth to debt ,debtors turnover ratio.
REGRESSION
H0: There is no relationship between share price and Net worth to debt, debtors
turnover Ratio.
H1: There is relationship between the share price and Net worth to debt, debtors
turnover Ratio.
Table 3.1.25
Regression and Correlation of Uttam Galva Steels Ltd

Net Worth/Debt 0.994 0.992 0 207.527
Debtors turnover ratio 1 1 0 0.555
RATIO CORRELATION
Creditors turnover ratio -0.98
INFERENCE:
EBDIT/Total asset+dep, OCF/Total asset+dep, Net worth/debt, Net
worth/Tan asset, Debtors turnover ratio and share price were highly correlated.
Debt-Equity Ratio, Creditors turnover ratio and share price were negatively
correlated i.e., when there is increase/decrease in one variable there will
increase/decrease in the other variable. The independent variable Net
Worth/Debt, Debtors turnover ratio explains the 99.4%,100% of variance .
VALLABH STEEL
Table 3.1.26
Regression and Correlationof Vallabh Steels Ltd
RATIO CORRELATION
INFERENCE:

Creditors turnover ratio and share price were highly correlated. That is when
there is increase in one variable there is increase in the other variable.
WELCAST STEEL
ANOVA
and Current ratio, debtors turnover ratio.
price and Current ratio, debtors turnover ratio.
REGRESSION
H0: There is no relationship between share price and Current ratio, debtors
turnover Ratio.
H1: There is relationship between the share price and Current ratio, debtors
turnover Ratio.
Table 3.1.27
Regression and Correlation of Welcast Steel Ltd

Current Ratio 0.935 0.913 0.007 -131.993
RATIO CORRELATION
Current Ratio -0.967
INFERENCE:
Debt-Equity Ratio and share price were highly correlated, Where as
current ratio and share price is negatively correlated. i.e., when there is
increase/decrease in one variable there will be increase/decrease in the other
variable.The independent variable Current Ratio, Debtors turnover ratio explains
the 93.5% and 99.9% of variance. The significance between the variable is
good as the sig is .007 and .001 which is less than .05.
Thus Current Ratio, Debtors turnover ratio influences the share price a lot
WELSPUN
ANOVA
and Debt-Equity ratio.
price and Debt-equity ratio.
REGRESSION
H0: There is no relationship between share price and Current ratio, debtors
turnover Ratio.
H1: There is relationship between the share price and Current ratio, debtors
turnover Ratio.
Table 3.1.28
Regression and Correlation of Welspun Gujarat Stahl Rohern Ltd

Debt-Equity Ratio 0.886 0.848 0.017 -29.125
RATIO CORRELATION
INFERENCE:
Debt-Equity Ratio and share price were negatively correlated. That is when
there is increase in one variable there is decrease in the other variable.The
independent variable (Debt-equity Ratio) explains the 88.6% of variance and
Adjusted r square explains the 84.8% of variance.
The significance between the variable is good as the sig is .017 which is
less than .05.Thus Debt-equity ratio influences the share price a lot than any
other ratios.
3. 2 RATIO ANALYSIS INFERENCE.
ADITYA ISPAT
Table 3.2.1
Ratio analysis for Aditya Ispat
Ratio Analysis for Aditya Ispat

2005 2004 2003 2002 2001
Profitability ratios
EBDIT/sales 2.54% 2.89% 3.78% 2.63% 2.21%
EBDIT/tot asset+dep 1.83% 1.47% 1.62% 1.28% 0.86%
OCF/sales 4.62% 1.44% 2.10% 1.88% 2.21%
OCF/Tot asset+dep 3.32% 0.73% 0.90% 0.91% 0.86%
Balancesheet ratios
Solvency ratio
Net worth/debt 765.63% 1703.57% 1111.63% 1260.53% 935.19%
Net worth/Tan asset 88.45% 94.46% 91.75% 92.65% 90.34%
C.L / Tan Asset 1.44% 5.35% 11.13% 7.54% 9.12%
drs-crs/sales 25.17% 44.77% 52.94% 41.35% 53.10%
Levarage ratio
Debt-Equity Ratio 10.00% 7.00% 8.00% 9.00% 10.00%
Liquidity ratio
Current Ratio 5.12 4.33 3.93 4.32 5.51
debtors turnover ratio 3.61 2.01 1.72 1.88 1.4
creditors turnover ratio 73 18.25 28.077 16.591 0
INFERENCE:
The company’s earnings were moderate when compared to the

sales. The sales and the EBDIT have been increasing year to year, but when
compared to the sales, the earning is not sufficient. The OCF to Sales ratio is
increasing year by year.
The net worth to debt ratios indicate that the business is having
sufficient amount of internal accruals to pay its debt. The Current ratios of firm
are high which implies there are adequate current assets which has ability to
meet the current obligations.
The debts were collected rapidly with less time-lag. As the ratio of
the company is very high, this shows that the company is paying its suppliers at a
fast rate. The company has been financing its growth with debt.
ANIL STEEL
Table 3.2.2
Ratio analysis of Anil special steel industries limited
Ratio Analysis for Anil Special Steel Industries Ltd

2005 2004 2003 2002 2001
EBDIT/sales 12.52% 12.74% 10.96% 3.47% -1.07%
EBDIT/tot asset+dep 9.40% 9.25% 6.01% 0.69% -0.52%
OCF/sales 5.94% 6.23% 3.51% -28.76% -26.36%
OCF/Tot asset+dep 4.46% 4.52% 1.92% -5.72% -12.96%
Balancesheet ratios
Solvency ratio
Net worth/debt 13.05% -2.89% -29.84% -26.32% -19.45%
Net worth/Tan asset 10.63% -2.68% -37.72% -31.54% -21.14%
C.L / Tan Asset 22.29% 17.40% 15.51% 11.57% 16.81%
drs-crs/sales 0.65% -1.04% -0.02% 16.42% 8.13%
Levarage ratio
Debt-Equity Ratio 21.87 0 0 0 0
Liquidity ratio
Current Ratio 1.12 1.14 1.29 1.31 1.33
Debtors turnover ratio 9.64 9.25 6.13 3.83 3.43
creditors ratio 8.11 8.49 7.02 6.4 6.4
INFERENCE:
The increasing EBDIT/sales ratio is increasing. The operating cash

flow is doing well as the ratio is increasing year by year. The net worth to debt
indicates that the firm has sufficient has Sufficient internal accruals to meet its
debt.The firm is generating cash flow and is capable to pay its financial
obligations. The ratios of firm are high which implies there are adequate current
assets which has ability to meet the current obligations.
The high ratio is the indicative of shorter time-lag between credit
sales and cash collection, i.e., the debts was collected rapidly. The high ratio
means that the firm is paying its suppliers at a faster rate. The company has
been aggressive in financing its growth with debt. This has result in volatile
earnings as a result of the additional interest expense.
ASHIRWAD STEEL
Table 3.2.3
Ratio analysis of Ashirwad steel industries limited
Ratio Analysis for Ashirwad Steels & Industries Ltd

2005 2004 2003 2002 2001
EBDIT/sales 13.44% 15.72% 13.29% 14.35% 10.50%
OCF/sales 7.50% 9.22% 7.97% 8.20% 7.24%
OCF/Tot asset+dep 11.07% 12.66% 11.03% 13.40% 9.41%
Balancesheet ratios
Solvency ratio
Net worth/debt 48.56% 78.99% 126.02% 171.18% 217.67%
C.L / Tan Asset 17.18% 29.21% 14.27% 17.00% 17.45%
drs-crs/sales 0.14% -5.70% 4.45% 1.46% -3.09%
Leverage ratio
Debt-Equity Ratio 1.73 1.06 0.7 0.52 0.34
Liquidity ratio
Current Ratio 2.52 1.98 2.02 2.04 2.05
creditors ratio 15.87 28.08 14.04 13.52 14.04
INFERENCE:
The earning of the company is doing well. The operating cash flow
is doing well as the ratio is increasing year by year. The net worth to debt
indicates that the firm has sufficient has Sufficient internal accruals to meet its
debt. The firm is generating cash flow and is capable to pay its financial
obligations.
The ratios of firm are high which implies there are adequate current
assets which has ability to meet the current obligations. The high ratio is the
indicative of shorter time-lag between credit sales and cash collections, i.e., the
debts were collected rapidly.
The high ratio means that the firm is paying its suppliers at a faster
rate. The firm has to settle the accounts rapidly, i.e., the supplier doesn’t have
liberal credit term. The company has been financing its growth with debt.
BHUSHAN STEEL
Table 3.2.4
Ratio analysis of Bhushan steel & Strips ltd
Ratio Analysis for Bhushan Steels & Strips Ltd

2005 2004 2003 2002 2001
EBDIT/sales 15.54% 17.59% 18.20% 18.22% 18.94%
OCF/sales 12.06% 12.44% 11.37% 10.06% 11.19%
OCF/Tot asset+dep 11.96% 9.74% 7.60% 7.65% 7.96%
Balancesheet ratios
Solvency ratios
Net worth/debt 55.45% 63.26% 64.66% 76.89% 79.66%
C.L / Tan Asset 19.39% 22.01% 14.48% 12.81% 12.48%
drs-crs/sales -1.73% 1.66% 6.81% 16.80% 13.83%
Leverage ratio
Liquidity ratio
Current Ratio 1.12 1.19 1.27 1.46 1.7
creditors turnover ratio 7.16 8.49 7.93 8.49 8.69
INFERENCE:
Earnings and sales were increasing year by year. Here the EBDIT to total asset
+depreciation ratio is in increasing path.
The net worth to debt ratios indicates that the business is having
sufficient amount of internal accruals to pay its debt. The firm is generating cash
flow and is capable to pay its financial obligations. The ratios of the firm are high
which implies there are adequate current assets which has ability to meet the
current obligations.
The increasing ratio of the firm means that the debts were
collected rapidly with fewer time lags between credit sales and the cash
collection. The company takes leisure time to pay its debt. This shows that the
supplier has granted liberal credit terms. The company has been financing its
growth with debt.
BHUWALKA STEEL
Table 3.2.5
Ratio analysis of Bhuwalka steel industries limited
Ratio Analysis for Bhuwalka Steel Industries Ltd

2005 2004 2003 2002 2001
EBDIT/sales 4.25% 5.55% 6.38% 7.02% 5.43%
OCF/sales 1.42% 1.69% 1.45% 1.14% -0.99%
OCF/Tot asset+dep 4.81% 4.48% 2.98% 2.37% -1.71%
Balancesheet ratios
Solvency ratio
Net worth/debt 26.93% 23.05% 19.83% 18.14% 23.69%
C.L / Tan Asset 17.87% 10.27% 8.95% 9.40% 6.41%
drs-crs/sales 2.54% 1.90% 1.55% 1.53% 4.60%
Leverage ratio
Debt-Equity Ratio 395% 461% 523% 477% 420%
Liquidity ratio
Current Ratio 1.21 1.28 1.24 1.25 1.38
INFERENCE:
The earnings of the firm are not very healthy. The net worth to debt
ratios indicate that the business is having sufficient amount of internal accruals to
pay its debt. The firm is generating better cash flow and is capable to pay its
financial obligations.
The current ratio of the firm is high which implies that there are
adequate current assets which have ability to meet the current obligations. The
debts were collected rapidly with less time-lag. The firm is paying the debt at a
faster rate. The firm is financing it’s with debt. This has result in volatile earnings
as a result of the additional interest expense.
BILPOWER STEEL
Table 3.2.6
Ratio analysis of Bilpower ltd
Ratio Analysis for Bilpower Ltd

2005 2004 2003 2002 2001
EBDIT/sales 10.05% 7.02% 4.12% 4.89% 5.94%
OCF/sales 7.84% 4.69% 2.25% 2.91% 2.87%
OCF/Tot asset+dep 15.88% 10.16% 4.79% 6.31% 4.79%
Balancesheet ratios
Solvency ratio
Net worth/debt 145.72% 229.90% 336.28% 651.27% 427.56%
C.L / Tan Asset 28.50% 43.24% 34.49% 36.98% 24.77%
drs-crs/sales 26.37% 19.51% 21.37% 18.28% 21.32%
Leverage ratio
Liquidity ratio
Current Ratio 3.25 2.88 2.71 2.39 2.31
creditors ratio 8.90 10.74 9.36 10.14 10.43
INFERENCE:
The company is improving its performance every year. The net

worth to debt ratios indicate that the business is having sufficient amount of
internal accruals to pay its debt.
The firm is generating cash flow and is capable to pay its financial
obligations. The ratio of more than 2:1 of the company means that there are
adequate current asset to meet the current obligations.
The debts were collected rapidly with less time-g between the credit
sales and cash collection. The company has been financing its growth with debt.
This has result in volatile earnings as a result of the additional interest expense.
EAST COAST STEEL
Table 3.2.7
Ratio analysis of East coast steel Ltd
Ratio Analysis for East Coast Steel Ltd

2005 2004 2003 2002 2001
EBDIT/sales 0.0% -1600.0% 0.0% -1200.0% 277.8%
EBDIT/tot asset+dep -4.2% -5.0% -126.0% -1.0% -0.8%
OCF/sales 0.0% -1800.0% 0.0% -1450.0% 311.1%
OCF/Tot asset+dep -4.6% -5.6% -126.0% -1.2% -0.9%
Balancesheet ratios
Solvency ratio
Net worth/debt 0.0% 0.0% 0.0% 267.7% 101.5%
C.L / Tan Asset 0.0% 0.0% 0.0% 68.6% 7.0%
drs-crs/sales 0.0% -700.0% 0.0% 1150.0% -266.7%
Leverage ratio
Liquidity ratio
Current Ratio 1.37 1.50 1.33 2.16 9.02
creditors ratio 4.35 4.74 3.15 3.07 2.72
INFERENCE:
The EBDIT/Sales ratio is in negative value and zero. The ratio

indicates that the firm is fully dependant on loans than the internal accrual. The
net worth and the tangible asset were at the same rate, thus The ratio is zero; the
firm is not generating enough cash flow. The current ratio shows that the firm has
adequate current asset to meet the current obligation. The debtors turnover ratio
that the debts were not collected rapidly. The creditors turnover ratio shows that
the company is paying its suppliers rapidly. The firm is doing well.
ESSAR STEEL
Table 3.2.8
Ratio analysis of Essar steel Ltd
Ratio Analysis for Essar Steel Ltd

2005 2004 2003 2002 2001
EBDIT/sales 29% 28% 31% -12% 26%
EBDIT/tot asset+dep 17% 11% 6% -5% 8%
OCF/sales 16% 13% 12% -21% -5%
OCF/Tot asset+dep 10% 5% 2% -8% -1%
Balancesheet ratios
Solvency ratio
Net worth/debt 11% 10% 6% 7% 7%
Net worth/Tan asset 8% 9% 5% 7% 6%
C.L / Tan Asset 15% 23% 19% 58% 42%
drs-crs/sales -3% -3% -17% -29% -5%
Leverage ratio
Liquidity ratio
Current Ratio 1.39 1.35 1.03 0.79 0.83
INFERENCE:
The earnings of the firm have to be improved. The operating cash

flow to sales ratio helps to know the Performance of the firm, the firm has to
improve with regard to the performance. The net worth to debt ratios indicate that
the business is having sufficient amount of internal accruals to pay its debt.
The ratio indicates that the asset is high and also shows sufficient
profit. The ratio shows that there is enough current assets to meet its current
obligation. The debt was collected rapidly with less time-lag. The debts were paid
to suppliers at a faster rate. The debt-equity ratio of the firm indicates the better
solvency position.
ISHIBARS STEEL
Table 3.2.9
Ratio analysis of ishibars Ltd
Ratio Analysis for ishibars Ltd

2005 2004 2003 2002 2001
EBDIT/sales 108.04% 10.45% 1.15% -0.66% 5.13%
EBDIT/tot asset+dep 20.14% 1.68% 0.28% -0.21% 2.48%
OCF/sales 93.36% -7.01% -22.05% -35.47% -1.46%
OCF/Tot asset+dep 17.40% -1.12% -5.30% -11.40% -0.71%
Balancesheet ratios
solvency ratio
Net worth/debt -5.51% -17.91% -11.74% 1.30% 23.18%
Net worth/Tan asset -5.77% -20.52% -12.55% 1.22% 18.66%
C.L / Tan Asset 16.04% 11.08% 11.61% 11.51% 15.43%
drs-crs/sales -2.29% -6.55% -9.88% -9.57% 1.87%
leverage ratio
Debt-Equity Ratio 0 0 5101.91 6.7 3.82
Liquidity ratio
Current Ratio 0.26 0.17 0.19 0.36 0.63
INFERENCE:
The EBDIT/Sales ratio indicates the better earnings of the firm.

The company is improving its performance, and not up to the mark. The net
worth to debt ratio indicates the firm is fully dependent on Loans. The firm has
assets at high level but it is not utilized for yielding out profit.
The current ratio shows that there is no sufficient current asset to
meet the current obligation. The debts were collected rapidly with less time-lag.
The firm is paying the debt to its suppliers at a faster rate. Though the firm might
have more debt in 2003 later that it has no debt .the firm is doing well.
ISHPAT INDUS STEEL
Table 3.2.10
Ratio analysis of Ispat Industries Ltd
Ratio Analysis for Ispat Industries Ltd

2005 2004 2003 2002 2001
EBDIT/sales 33.66% 17.69% 21.41% -2.56% 12.47%
EBDIT/tot asset+dep 19.92% 6.58% 6.85% -0.53% 3.06%
OCF/sales 19.29% 7.35% 10.09% -12.76% -6.30%
OCF/Tot asset+dep 11.41% 2.73% 3.23% -2.65% -1.55%
Balance sheet ratios
Solvency ratio
Net worth/debt 24.54% 10.73% 10.60% 9.47% 18.95%
C.L / Tan Asset 20.83% 13.31% 13.96% 21.36% 19.79%
drs-crs/sales 1.07% -7.97% -11.90% -16.07% -16.02%
Leverage ratio
Liquidity ratio
Current Ratio 1.44 1.4 1.05 0.94 0.99
INFERENCE:
The health of earnings of the firm is good as it is improving every

year. The operating cash flow of the firm is improving. The firm has increased
earnings and it own better amount of asset.
The firm has sufficient internal accruals to meet it current
obligations. The ratio indicates that the assets of the firm is high and also shows
sufficient profit. The current ratio indicates that the firm has the sufficient current
asset to meet its current obligation.
The debt is being collected rapidly with less time-lag. The firm is
paying its debt to the suppliers at faster rate. The firm has invested it growth with
debt, which leads more expense by paying interest to the debt borrowed.
JSW STEEL
Table 3.2.11
Ratio analysis of JSW Steel Ltd
Ratio Analysis for JSW Steel Ltd

2005 2004 2003 2002 2001
EBDIT/sales 80.36% 115.75% 63.81% 26.88% 20.34%
OCF/sales 42.83% 68.97% 24.57% -18.67% 2.50%
OCF/Tot asset+dep 8.80% 6.69% 1.28% -1.17% 0.23%
balance sheet ratios
solvency ratio
Net worth/debt 74.83% 25.49% 11.64% 14.29% 21.90%
C.L / Tan Asset 23.02% 14.28% 13.42% 14.47% 15.71%
drs-crs/sales -7.82% -0.32% -30.08% -32.09% -18.35%
leverage ratio
Liquidity ratio
Current Ratio 1.06 1.29 1.06 0.79 0.56
creditors ratio 10.43 9.36 9.13 9.61 8.90
INFERENCE:
The firm has to improve its earnings still more. The operating cash
flow to sales indicates that the firm has to improve still better. The EBDIT to
Sales is used to test the health of earnings of the Company. Here the ratio
indicates that the firm’s earnings were improving.
The firm has less dependency on loan. The ratio indicates that the
asset of the firm is high and the sufficient profit. The current ratio shows that
there are enough current assets to meet the current obligation, but still it can
reduce its liability.
The debt were collected rapidly with less time lag between the
credit sales and the cash collection. The firm is paying the debt to its supplier at
faster rate. The D/E ratio indicates shows that the firm currently is financing its
growth with debt at lesser percentage than compared to the previous year.
KANISHK STEEL
Table 3.2.12
Ratio analysis of Kanishk steel Industries Ltd
Ratio Analysis for Kanishk Steel Industries Ltd

2005 2004 2003 2002 2001
EBDIT/sales 2.93% 3.86% 2.52% 2.68% 2.43%
OCF/sales 1.89% 2.57% 1.35% 1.59% 1.27%
OCF/Tot asset+dep 5.48% 6.21% 3.41% 3.38% 2.82%
solvency ratio
Net worth/debt 495.92% 304.00% 239.10% 237.53% 240.57%
C.L / Tan Asset 36.68% 42.48% 66.10% 12.39% 13.88%
drs-crs/sales -0.01 -0.08 -0.15 0.07 0.07
Leverage ratio
liquidity ratio
Current Ratio 1.53 1.39 1.51 2.82 2.99
creditors ratio 11.41 9.13 12.59 11.41 11.77
INFERENCE:
OCF/Tot asset+dep ratio is used to test the health of the earnings of the
company. The ratio indicates that the firm is improving. The firm has sufficient
internal accruals to meet its current obligation.
The Net worth to tangible asset ratio indicates that the firm has high
asset and sufficient profit. The current ratio indicates that the firm has sufficient
current asset to meet its current obligation. The debt is collected rapidly with
fewer time lags between the credit sales and cash collection.
The firm is paying its debt to its supplier at a faster rate. The low
debt equity ratio of the firm indicates that the firm has financed its with share
holders.
MAHALAKSHIMI STEEL
Table 3.2.13
Ratio analysis of Mahalaxmi Ltd
Ratio Analysis for Mahalaxmi ltd

2005 2004 2003 2002 2001
EBDIT/sales 15.05% 12.70% 18.22% 12.48% 11.37%
OCF/sales 10.26% 10.61% 15.46% 10.97% 4.58%
OCF/Tot asset+dep 0.03% 0.02% 0.02% 0.01% 0.01%
solvency ratio
Net worth/debt 0.11% 0.06% 0.05% 0.05% 0.05%
C.L / Tan Asset 20.83% 13.31% 13.96% 21.36% 19.79%
drs-crs/sales 221.11% -1616.42% -3278.56% -3979.56% -2016.80%
leverage ratio
Liquidity ratio
Current Ratio 1.51 1.28 1.27 1.64 1.69
cerditors ratio 12.17 9.86 15.87 15.87 16.59
INFERENCE:
The health of earnings of the firm is satisfactory. The firm as to

improve its performance. The ratio show that the company records poor
earnings, it has to be improved. The ratio shows that the firm is fully dependent
on loans. The ratio shows that the assets is relatively high but does not yield out
high profit to the firm.
The firm has sufficient current asset to meet the current liability.
The ratio indicates that the firm collects the debt rapidly with less time-lag. The
suppliers of the firm are not liberal to the credit terms so the firm has to pay the
debt at faster rate. The debt equity ratio indicates that the firm has started to
reduce the usage of debt to finance its growth and using share holders fund to
finance.
METAL COATING STEEL
Table 3.2.14
Ratio analysis of Metal coating Ltd
Ratio Analysis for Metal Coatings Ltd

2005 2004 2003 2002 2001
EBDIT/sales 4.80% 6.39% 4.35% 7.61% 7.32%
OCF/sales 2.35% 3.11% 1.91% 3.74% 3.78%
OCF/Tot asset+dep 5.70% 6.45% 3.29% 8.47% 10.77%
Balancesheet ratios
solvency ratio
Net worth/debt 76.45% 81.95% 76.71% 96.19% 92.56%
C.L / Tan Asset 8.01% 12.69% 14.74% 9.99% 11.36%
drs-crs/sales 14.67% 14.32% 22.27% 19.72% 17.38%
leverage ratio
Liquidity ratio
Current Ratio 5.75 4.53 4.51 5.70 2.15
creditors ratio 60.83 45.63 40.56 45.63 22.81
INFERENCE:
The firm has to improve its earning a lot. the firm has sufficient
internal accruals to meet its current obligation. The ratio shows that there is
sufficient profit for the amount of asset.
The ratio shows that the company has a high current asset to meet
the current liability. The firm is collecting the debt rapidly with less time.The firm
has been paying the debt to its suppliers at a faster rate.The firm has been
financed its growth with debt and share holders fund at equal rate.
MODERN STEEL
Table3.2.15
Ratio analysis of Modern steel Ltd
Ratio Analysis for modern Steels Ltd

2005 2004 2003 2002 2001
EBDIT/sales 11.59% 7.62% 1.48% 7.87% 9.95%
OCF/sales 6.62% 3.74% -1.52% 0.70% 0.83%
OCF/Tot asset+dep 24.89% 13.78% -3.09% 1.12% 1.08%
Balancesheet ratios
solvency ratio
Net worth/debt 89.10% 39.49% 13.11% 22.00% 28.13%
C.L / Tan Asset 43.46% 47.43% 40.60% 35.33% 24.66%
drs-crs/sales 3.54% 3.85% 5.96% 13.30% 21.01%
leverage ratio
liqudity ratio
Current Ratio 1.30 1.22 1.18 1.25 1.33
creditor ratio 20.28 20.28 17.38 20.28 19.21
INFERENCE:
The firm has to improve to improve its earnings. The firm can
improve the operating cash flow still further. The firm has sufficient internal
accruals to meet its current obligation.
The firm has sufficient amount of profit to the asset. The firm has
enough current assets to meet its current obligation. The ratio indicates that the
firm is collecting the debt at the rapidly with less time lag.
The ratio indicates that the firm is paying the debt to its suppliers at
a faster rate. The debt-equity ratio shows that the firm has been financing its
growth with less amount of share holders fund than the debt.
RAIPUR ALLOYS STEEL
Table 3.2.16
Ratio analysis of Raipur Alloys &Steel Ltd
Ratio Analysis for Raipur Alloys & Steel Ltd

2005 2004 2003 2002 2001
EBDIT/sales 16.04% 27.16% 48.26% 11.89% 15.93%
OCF/sales 9.74% 25.74% 43.63% 10.72% 15.58%
OCF/Tot asset+dep 12.91% 27.37% 18.65% 5.69% 10.67%
Balancesheet ratios
Solvency ratio
Net worth/debt 82.36% 155.86% 35.38% 0.09% 12.22%
C.L / Tan Asset 12.12% 20.81% 8.29% 7.08% 3.92%
drs-crs/sales 12.20% 5.88% 16.25% 27.50% 19.85%
Leverage ratio
Liquidity ratio
Current Ratio 1.36 1.54 1.82 2.76 4.80
creditors ratio 60.83 91.25 40.56 40.56 33.18
INFERENCE:
There is sufficient profit for the sales, the firm has to be improved
further. The operating cash flow can be improved further. The ratio shows that
though it has sufficient internal accruals it also rely on outside loans.
The firm has fixed assets at high level but it is not utilized for
yielding out profit. The ratio shows that the firm has enough current asset to meet
its current obligation.
The ratio shows that the firm is collecting its debt rapidly with less
time lag. The ratio shows that the firm is paying debts to its suppliers at a faster
rate. Though the firm might be financing its growth with more amount of debt
earlier later the amount of debt financed was less than share holders fund.
RAJENDRA STEEL
Table 3.2.17
Ratio analysis of Rajendra Mechanical Ltd
Ratio Analysis for Rajendra Mechanical Industries Ltd

2005 2004 2003 2002 2001
EBDIT/sales 8.62% 8.06% 9.31% 8.99% 9.02%
OCF/sales 5.82% 5.37% 5.88% 5.49% 6.78%
OCF/Tot asset+dep 8.40% 6.09% 5.64% 5.02% 9.17%
Balancesheet ratios
Solvency ratio
Net worth/debt 130.44% 112.28% 148.79% 142.17% 232.22%
C.L / Tan Asset 44.21% 21.20% 28.83% 17.75% 29.32%
drs-crs/sales -4.02% 12.37% -1.44% 13.69% 0.85%
Levarage ratio
Liquidity ratio
Current Ratio 1.48 1.65 1.51 1.85 2.29
creditors ratio 6.89 6.29 12.17 11.41 7.93
INFERENCE:
The ratio indicates that the firm can improve its health of
earningsThe operating cash flow to sales ratio shows that the firm can still
improve it earnings. The firm yet to improve its earnings. The firm has less
dependence on loans. The ratio indicate that the amount of fixed assets is
relatively high and also it is giving out higher profit.
The current ratio indicates that there is enough current asset to
meet the current obligation.The firm collects the debt rapidly with less time-lag.
The firm pays the debt to its supplier at a faster rate. The firm has financed its
growth with the share holders funds as the major part than the debt.
RATANMANI STEEL
Table 3.2.18
Ratio analysis of Ratnamani Metals &Tubes Ltd
Ratio Analysis for Ratnamani Metals & Tubes Ltd

2005 2004 2003 2002 2001
EBDIT/sales 16.45% 10.77% 10.29% 11.93% 11.43%
OCF/sales 9.73% 6.42% 6.31% 7.22% 6.83%
OCF/Tot asset+dep 13.53% 9.83% 8.22% 8.20% 8.01%
Balancesheet ratios
Solvency ratio
Net worth/debt 100.48% 302.76% 273.67% 223.44% 231.17%
C.L / Tan Asset 50.61% 58.85% 59.56% 37.78% 26.16%
drs-crs/sales -11.86% -8.90% -4.92% 8.46% 5.63%
Leverage ratio
Liquidity ratio
Current Ratio 0.91 1.03 1.07 1.32 1.65
cerditors ratio 4.40 4.56 5.21 5.98 5.70
INFERENCE:
The firm shows a slight improvement in the earnings. The OCF to

sales ratio shows the health of the earnings of the firm. The firm has less internal
accruals than it dependent on loans.
The ratio indicate that the amount of fixed assets is relatively high
and also it is giving out higher profit. The current ratio indicates that there is
enough current asset to meet the current obligation.
The firm collects the debt rapidly with less time-lag. The firm pays
the debt to its supplier at a faster rate. The firm has financed its growth with the
share holders funds as the major part than the debt.
SHAH ALLOYS STEEL
Table 3.2.19
Ratio analysis of Shah Alloys Ltd
Ratio Analysis for Shah Alloys Ltd

2005 2004 2003 2002 2001
EBDIT/sales 8.28% 8.28% 9.19% 8.75% 8.44%
OCF/sales 5.24% 5.33% 4.92% 4.19% 4.74%
OCF/Tot asset+dep 13.46% 12.98% 11.58% 7.45% 8.86%
Balancesheet ratios
Solvency ratio
Net worth/debt 76.39% 58.95% 53.26% 39.91% 49.28%
C.L / Tan Asset 55.18% 49.43% 62.31% 46.92% 34.97%
drs-crs/sales -13.78% -5.20% -9.14% -2.89% 0.70%
Leverage ratio
Liquidity ratio
Current Ratio 1.24 1.28 1.17 1.21 1.40
creditors ratio 6.64 6.76 7.60 9.13 9.36
INFERENCE:
The firm has to improve its earnings. There is increase in both the
asset and the earnings. There is increase in both the asset and the OCF.the firm
has less internal accruals than it dependent on loans.
and also it is giving out higher profit. current ratio indicates that there is enough
current asset to meet the current obligation.
SOUTHERN STEEL
Table 3.2.20
Ratio analysis of southern iron & Steel company Ltd
Ratio Analysis for Southern Iron & Steel Company Ltd

2005 2004 2003 2002 2001
EBDIT/sales 17.99% 3.40% 2.52% -4.43% -2.75%
EBDIT/tot asset+dep 5.62% 1.22% 0.73% -0.24% -0.30%
OCF/sales 23.42% -27.88% -10.15% -40.33% -22.94%
OCF/Tot asset+dep 7.31% -10.05% -2.94% -2.20% -2.54%
Balancesheet ratios
Solvency ratio
Net worth/debt -17.66% -21.70% -6.11% -0.68% 3.49%
Net worth/Tan asset -19.33% -24.85% -5.87% -0.62% 2.99%
C.L / Tan Asset 22.04% 14.60% 10.31% 10.62% 9.61%
drs-crs/sales 0.71% -5.00% -10.85% -77.89% -46.93%
Leverage ratio
Liquidity ratio
Current Ratio 0.94 0.72 0.66 0.54 0.52
creditors ratios 9.13 7.45 6.40 7.30 6.19
INFERENCE:
The firm has to improve its earnings. There is increase in both the
asset than the earnings. The ratio shows that the firm is seem to be better in the
2005 and expected to be in future.The firm is fully dependent on loan. Though
the firm has records better asset, the net worth is in negative.
The current ratio must have at least 2:1 ratio. But here it is less
than one, i.e., it doesn’t have current asset to meet the liability.The firm collects
the debt rapidly with less time-lag. The firm pays the debt to its supplier at a
faster rate. The firm is doing well. That it has no debt at present.
STELLCO STEEL
Table 3.2.21
Ratio analysis of Stelco Strips Ltd
Ratio Analysis for Stelco Strips Ltd

2005 2004 2003 2002 2001
EBDIT/sales 5.58% 5.38% 2.81% 3.99% 3.64%
OCF/sales 3.65% 2.08% 2.74% 1.55% 2.01%
OCF/Tot asset+dep 11.42% 5.60% 4.20% 2.26% 2.28%
Balancesheet ratios
Solvency ratio
Net worth/debt 117.21% 141.90% 109.21% 223.17% 205.87%
C.L / Tan Asset 23.34% 33.84% 30.91% 21.25% 19.91%
drs-crs/sales 3.35% -1.36% 1.79% 1.49% 2.30%
Levarage ratio
Liquidity ratio
Current Ratio 1.43 1.38 1.28 1.25 1.64
creditors ratio 15.87 16.59 14.60 14.04 15.87
INFERENCE:
The firm has to improve its performance. The firm has to improve it
earnings, which is not up to the mark .There is increase in both the asset than
the earnings.There is increase in both the asset and the OCF.The firm is
dependent on loan in a major part than the internal accruals to meet its current
obligation.The ratio indicate that the amount of fixed assets is relatively high
and also it is giving out higher profit.
meet the current obligation.The firm collects the debt rapidly with less time-lag
.The firm pays the debt to its supplier at a faster rate The firm has financed its
SURYA ROSHINI STEEL
Table 3.2.22
Ratio analysis of Surya Roshini Ltd
Ratio Analysis for Surya Roshni Ltd

2005 2004 2003 2002 2001
EBDIT/sales 6.59% 8.73% 10.72% 13.03% 14.53%
OCF/sales 3.67% 4.91% 5.28% 6.65% 7.46%
OCF/Tot asset+dep 5.01% 5.48% 5.51% 6.60% 7.11%
Balancesheet ratios
solvency ratio
Net worth/debt 42.67% 40.70% 36.97% 34.47% 45.11%
C.L / Tan Asset 7.93% 8.63% 7.86% 5.59% 6.04%
drs-crs/sales 7.29% 10.42% 9.27% 12.88% 10.49%
Levarage ratio
Liqudity ratio
Current Ratio 1.23 1.19 1.18 1.34 1.54
INFERENCE:
The firm has to improve its performance. There is increase in asset

and not in the earnings, where the firm has to improve its earnings. This ratio
shows that the firm can improve it health of earnings.
The firm is dependent on loan in a major part than the internal
accruals to meet its current obligation. The ratio indicates that the amount of
fixed assets is relatively high and also it is giving out higher profit. The current
ratio indicates that there are enough current assets to meet the current obligation
TISCO STEEL
Table 3.2.23
Ratio analysis of TISCO
Ratio Analysis for TISCO

2005 2004 2003 2002 2001
EBDIT/sales 42.38% 32.87% 24.77% 17.60% 22.04%
OCF/sales 28.23% 22.16% 17.98% 10.89% 15.29%
OCF/Tot asset+dep 26.16% 17.82% 12.79% 5.91% 7.87%
Balancesheet ratios
Solvency ratio
Net worth/debt 257.69% 133.52% 75.36% 73.23% 101.63%
C.L / Tan Asset 53.21% 54.17% 55.79% 36.79% 31.07%
drs-crs/sales -12.37% -12.45% -8.86% -6.33% -4.06%
Levarage ratio
Liqudity ratio
Current Ratio 0.65 0.67 0.70 0.76 0.95
INFERENCE:
The firm has to improve its performance. There is increase in both

the asset than the earnings. There is increase in both the asset than the
operating cash flow.The firm is dependent on loan in a major part than the
The ratio indicates that the amount of fixed assets is relatively high
and also it is giving out higher profit.The current ratio indicates that there is
enough current assets to meet the current obligation The firm collects the debt
rapidly with less time-lagThe firm pays the debt to its supplier at a faster rate.The
firm has financed its growth with the share holders funds as the major part than
the debt.
TULSYAN STEEL
Table 3.2.24
Ratio analysis of Tulsyan Ltd
Ratio Analysis for Tulsyan NEC Ltd

2005 2004 2003 2002 2001
EBDIT/sales 4.70% 4.60% 4.56% 5.14% 5.78%
OCF/sales 2.17% 1.87% 1.93% 1.84% 2.33%
OCF/Tot asset+dep 5.15% 3.71% 4.87% 4.14% 5.48%
Balancesheet ratios
Solveny ratio
Net worth/debt 28.71% 25.86% 39.51% 33.53% 58.71%
C.L / Tan Asset 75.56% 33.49% 42.60% 26.78% 45.25%
drs-crs/sales -3.07% 1.57% 1.33% 6.52% 7.44%
Levarage ratio
Liquidity ratio
Current Ratio 1.10 1.07 1.20 1.46 1.38
INFERENCE:

operating cash flow.The firm is dependent on loan in a major part than the
internal accruals to meet its current obligation. The ratio indicate that the amount
of fixed assets is relatively high and also it is giving out higher profit.
meet the current obligation. The firm collects the debt rapidly with less time-
lagThe firm pays the debt to its supplier at a faster rate.The firm has financed its
UTTAM GULVA STEEL
Table 3.2.25
Ratio analysis of Uttam Galva Steels Ltd
Ratio Analysis for Uttam Galva Steels Ltd

2005 2004 2003 2002 2001
EBDIT/sales 10.13% 9.10% 11.40% 7.42% 7.09%
OCF/sales 6.07% 4.67% 4.71% 1.19% -1.91%
OCF/Tot asset+dep 12.59% 7.14% 5.65% 1.05% -1.98%
Balancesheet ratios
Solvency ratio
Net worth/debt 51.04% 36.97% 32.81% 30.99% 27.58%
C.L / Tan Asset 68.04% 76.14% 52.31% 36.94% 38.57%
drs-crs/sales -9.00% -19.52% -9.88% 3.37% 4.89%
Leavarage ratio
Liquidity artio
Current Ratio 1.02 0.99 0.96 0.88 0.84
INFERENCE:

operating cash flow. The firm is dependent on loan in a major part than the
VALLABH STEEL
Table 3.2.26
Ratio analysis of Vallabh Steels Ltd
Ratio Analysis for Vallabh Steels Ltd

2005 2004 2003 2002 2001
EBDIT/sales 3.39% 3.21% 3.51% 2.73% 3.70%
OCF/sales 2.10% 2.14% 2.39% 1.77% 2.10%
OCF/Tot asset+dep 6.39% 6.92% 7.55% 5.52% 7.71%
Balancesheet ratios
Solvency ratio
Net worth/debt 46.52% 64.65% 64.74% 55.75% 58.96%
C.L / Tan Asset 22.84% 32.54% 40.68% 25.47% 32.28%
drs-crs/sales 4.71% 5.38% 7.25% 9.93% 6.44%
Levarage ratio
Liquidity ratio
Current Ratio 1.31 1.35 1.33 1.33 1.36
INFERENCE:

the asset than the earnings. There is increase in both the asset than the debt.
The firm is dependent on loan in a major part than the internal accruals to meet
its current obligation.
WELCAST STEEL
Table 3.2.27
Ratio analysis of Welcast Steel Ltd
Ratio Analysis for Welcast Steels Ltd

2005 2004 2003 2002 2001
EBDIT/sales 7.51% 10.28% 9.90% 11.90% 8.59%
OCF/sales 4.70% 6.87% 6.85% 7.57% 5.44%
OCF/Tot asset+dep 10.99% 11.71% 10.47% 7.65% 10.13%
Balancesheet ratios
solvency ratio
Net worth/debt 71.69% 69.78% 130.09% 118.98% 661.11%
C.L / Tan Asset 60.64% 62.07% 32.58% 25.26% 64.02%
drs-crs/sales 0.14% 5.99% -2.70% 8.36% 15.27%
Levarage ratio
Liquidity ratio
Current Ratio 1.03 1.17 1.81 1.93 1.88
crs raio 9.36 11.77 11.41 10.14 11.06
INFERENCE:

the asset than the earnings. The firm is dependent on loan in a major part than
the internal accruals to meet its current obligation
enough current assets to meet the current obligation.
WELSPUN STEEL
Table 3.2.28
Ratio analysis of Welspun Gujarat Stahl Rohern Ltd
Ratio Analysis for Welspun Gujarat Stahl Rohren Ltd

2005 2004 2003 2002 2001
EBDIT/sales 10% 19% 15% 23% 21%
EBDIT/tot asset+dep 14% 36% 12% 14% 12%
OCF/sales 6% 11% 5% 6% 6%
OCF/Tot asset+dep 7% 20% 4% 4% 3%
Balancesheet ratios
solvency ratio
Net worth/debt 71% 132% 51% 52% 46%
Net worth/Tan asset 40% 57% 34% 34% 31%
C.L / Tan Asset 116% 45% 16% 15% 20%
drs-crs/sales 11% 10% 14% 17% 38%
Levarage ratio
Liquidity ratio
Current Ratio 1.10 1.21 1.25 1.27 1.40
INFERENCE:

the asset than the earnings. The firm is dependent on loan in a major part than
the internal accruals to meet its current obligation
enough current assets to meet the current obligation.
Chart-1
EBDIT/Sales
we lspun 18
we lcast 10
vallabh 3
uttam gulva 9
tulsyan 5
tisco 28
surya roshini 11
ste lco 4
southe rn stee l 3
shah alloys 9
ratanmani 12
raje ndra 9
raipur 24
mode rn 8
me tal coating 6
COMPANY
mahalakshimi 14
khanishk 3
JSW 61
ispatindus 17
ishibars 25
-70 e ast coast
essar 20
bilpower 6
buwalia 6
bhushan 18
ashirwad 13
anil 8
aditya 3
-100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 90 100
PROFIT ebdit/sal
es
4.1 FINDINGS
 Out of the 12 ratios analyzed over a sample of 28 companies, most of the

ratios was correlated with almost all the companies. Over a sample of 28,
maximum correlation of ratios with respect to share price in the given
sample size was not more than 11. This indicates the fact that a few of the
ratios could solely influence the share price.
 Out of the 12 ratios analyzed over a sample of 28 companies, altogether a

few of the ratios had significant influence on the share prices. This
indicates the fact that ratios where not the only variables which could
influence the share price. This confirms the fact that the share price is in
fact influence by so many internal and external factors.
 Out of the 12 ratios analyzed, it is found that EBDIT/Total Asset+dep(R2),

OCF/Total Asset+dep(R4), Net worth/tan asset(R6), Debt-Equity Ratio
(R9) and Debtors turnover Ratio(R11) were better correlated with share
price of the companies in the sample of 28 companies.(refer appendix 2)
 It is found that among the five ratios the order of precedence is observed
to be R9, R11, R4, R2 and R6.
 When regression was done using 12 ratios with share price over a sample
of 28 companies, it is found that Net worth/debt (R5), Debt-Equity
Ratio(R9) and Debtors turnover Ratio (R11) together had better significant
impact on the share price.(refer appendix 1)
 The maximum number of ratios in combination with others had significant

impact on the share price where between 4. (i.e. 33.33% of ratios
analyzed)
 The maximum number of ratios independently has significant impact on
the share price where between 9. (i.e. 75% of ratios analyzed)
 It is found that a ratio might have significant correlation with share price
when analyzed independently. But when you group a set of ratios then the
same ratio may not have significant correlation with respect to share price
when compared with the other ratios.
 It is found that Profitability ratios were better than Balance Sheet ratios in
analyzing the financial status of the company. This is because the
profitability ratios were directly related to revenues where the scope for the
manipulations is minimal. Where as same is not the case with Balance
Sheet ratios.
 Earnings before depreciation interest and tax measure of profitability is a

better predictor than an earnings before interest and tax .
 It is found that OCF is arguably a better measure of a business's profits

than EARNINGS because a company can show positive net earnings (on
the income statement) and still not be able to pay its debts.
 The share price of the companies is doing well and coincides with certain
ratios viz. EBDIT/Total Asset+dep(R2), OCF/Total Asset+dep(R4), Net
worth/debt (R5), Net worth/tan asset(R6), Debt-Equity Ratio(R9) and
Debtors turnover Ratio(R11) and these ratios were considered as prime
ratio.
 It is found that the financial performance of the Aditya ispat, Ashirwad

steel, Bilpower, and Metal coating were doing well.
 The share price of Tata steel, Bhushan steel, shah alloys the following
companies are having a better share price movement in the market
compared to others.
4.2 SUGGESTIONS
 The company can concentrates on strengthening the Net worth/dept,
Debt-Equity Ratio and Debtors turnover Ratio.
 In future when the firm goes to initial public offer it can consider operating
cash flow than earnings for effective decision making.
 In spite of financial performance of the organization the share price and
the market share are also influenced by the firm’s goodwill. Hence the
organization should maintain it at any cost.

4.3 IMPLICATIONS OF THE STUDY
Out of the 12 ratios analyzed over a sample of 28 companies under
steel sector the following six ratios EBDIT/Total Asset+dep(R2), OCF/Total
Asset+dep(R4), Net worth/debt (R5), Net worth/tan asset(R6), Debt-Equity
Ratio(R9) and Debtors turnover Ratio(R11) were having better significance with
the share price. While the company (Apollo sindhoori) analyse the performance
of the steel sector company, Apollo sindhoori make use of these six ratios.
It will be easier to the company, in the sense that it need not take all
the ratios, it can take these six ratios only to analyse the performance of the
company which has the better significance with the share price. So that the
financial performance and the share price of the company will be enhanced.
4.4 CONCLUSION
Initially we have started with an assumption that there is significant

impact of ratios on Share price. Out of the 12 ratios analyzed over a sample of 28
companies, none of the ratios was correlated with almost all the companies. Over
a sample of 28 companies, the number of companies that exhibited correlation
between ratios analyzed with respect to share price were not more than 11.
This indicates the fact that neither all the companies exhibited
correlation between the ratios and share price not all the ratios could solely
influence the share price.
After having done the analysis with the help of regression it is found
that there is no significant impact of ratios on share price. This confirms the fact
that the share price is in fact influenced by so many internal and external factors.
Keeping in mind the needs of the retail investors, it is found that among
all the ratios analyzed EBDIT/Total Asset+dep(R2), OCF/Total Asset+dep(R4),
Net worth/tan asset(R6), Debt-Equity Ratio(R9) and Debtors turnover Ratio(R11)
were better correlated with share price of the companies. And also it is found that
Net worth/debt (R5), R9 and R11 together had better significant impact on the
share price.
APPENDIX – I
COMPARISON TABLE FOR REGRESSION ANALYSIS
RATIOS R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 R11 R12 Total
COMPANIES
adithya ispat 1 1
Anil 1 1 1 1 4
Ashirwad 1 1 2
Bhushan 1 1 2
bhuwalia 1 1 1 1 4
bilpower 1 1 1 1 4
essar steel 1 1
east coast 1 1
ishibars 0
ispatindus 1 1 2
JSW 1 1 2
Khanishk 1 1
Mahalakshimi 1 1
Metal coating 1 1 1 1 4
modern 1 1 2
Raipur 0
Rajendra 1 1
Ratnamani 0
Shah alloys 1 1 2
southern steel 1 1 1 1 4
stelco 1 1
Surya roshini 0
Tisco 1 1
tulsyan 1 1
Uttam gulva 1 1 2
Vallabh 0
Welcast 1 1 2
Welspun 1 1
TOTAL 0 3 3 5 7 4 2 1 7 1 7 6 46
Note:
R5 -Net worth/debt
R9 -Debt-Equity Ratio
R11 –Debtors turnover Ratio
These ratios together had better significant impact on the share
price.
APPENDIX - II
COMPARISON TABLE FOR CORRELATION ANALYSIS
RATIOS R1 R2 R3 R4 R5 R6 R7 R8 R9 10 R11 R12 TOTAL

COMPANY
adithya ispat 1 1 2
Anil 1 1 1 1 4
Ashirwad 1 1 1 3
Bhushan 1 1 1 1 1 1 1 7
bhuwalia 1 1
bilpower 1 1 1 1 1 1 1 7
essar steel 1 1 2
east coast 1 1
ishibars 0
ispatindus 1 1 1 1 4
JSW 1 1 1 1 1 5
Khanishk 1 1 1 3
Mahalakshimi 1 1 2
Metal coating 1 1
modern 1 1 1 1 1 5
Raipur 0
Rajendra 1 1 2
Ratnamani 0
shah alloys 1 1
southern
steel 1 1 1 1 1 5
stelco 1 1 2
surya roshini 1 1 1 1 4
tisco 1 1 1 1 1 1 1 1 1 9
tulsyan 1 1
uttam gulva 1 1 1 1 1 1 1 7
Vallabh 0
Welcast 1 1 2
Welspun 1 1
TOTAL 5 8 6 10 7 8 4 3 11 4 10 5 81
Note :
R2- EBDIT/ Total asset+depreiciation
R4 -OCF/Total asset+depreiciation
R6 –Net worth/tangible asset
R9 -Debt-Equity Ratio
R11 –Debtors turnover Ratio
These ratios were better correlated with share price of the
companies in the sample of 28 companies.

A Study On Impact of Ratios On Share Price

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A STUDY ON IMPACT OF RATIOS ON SHARE PRICE

SRI SAI RAM ENGINEERING COLLEGE

FACULTY OF MANAGEMENT SCIENCES

In partial fulfillment of the requirements

MASTER OF BUSINESS ADMINISTRATION

CHAPTER-2 2. RESEARCH METHEODOLOGY 20

4.FINDINGS AND SUGGESTIONS

This project throws light on Fundamental strength of the companies

Many investors use fundamental analysis alone or in combination with

Steel Authority of India Limited (SAIL) is the leading steel-making

STEPS TAKEN TO BOOST STEEL INDUSTRY

THE GROWTH PROFILE

The liberalization of industrial policy taken by the government has given a

At present, total (crude) steel making capacity is over 34 million tonnes

Apollo Sindhoori Capital Investments Limited is a professionally

Apollo Sindhoori is a Corporate Member of National Stock Exchange

The company’s Board of Directors feature many illustrious personalities.

The company’s day-to-day affairs are managed by the Executive Director

After a smooth beginning in early 1996 at Chennai, Apollo Sindhoori has

Apollo Sindhoori manages a huge client base, in excess of 45,000 clients

Apollo Sindhoori is a technology driven company and takes pride as the

Commodities’ trading is just witnessing the beginning of phenomenal

Internet trading with the following facilities

Conversion of the physical securities to electronic form. All you have to do

Similarly, conversion of the electronic shares back into physical form is

Every Apollo Sindhoori Demat Account holder will be provided a periodical

In case of contingencies, pledge marking for availing loans from your

1.3.1 RATIO ANALYSIS

MEANING: RATIO ANALYSIS

Ratio analysis is the calculation and comparison of ratios which are

A ratio gains utility by comparison to other data and standards. If the

The degree to which an asset or security can be bought or sold in the

CREDITORS TURNOVER RATIO

A short-term liquidity measure used to quantify the rate at which a

DEBTORS TURNOVER RATIO

An accounting measure used to quantify a firm's effectiveness in

By maintaining accounts receivable, firms are indirectly extending interest-

1.3.1.2 LEVERAGE RATIOS

Any ratio used to calculate the financial leverage of a company to get an

A measure of a company's financial leverage calculated by dividing long-

1.3.1.3 PROFITABILITY RATIOS

EBDIT is the abbreviation of Earnings before Depreciation Interest and

Operating cash flow is the cash generated in the course of a company

1.3.1.4 BALANCE SHEET RATIOS

NETWORTH TO TANGIBLE ASSET

Multiple regression can establish that a set of independent variables

The Regression Equation. A line in a two dimensional or two-variable space is

In the multivariate case, when there is more than one independent

Y = a + b1*X1 + b2*X2 + ... + bn*Xn

The correlation coefficient r is a measure of the linear relationship

When two attributes have a positive correlation coefficient, an increase in

Consider two variables x and y:

 If r = 1, then x and y are perfectly positively correlated. The possible

1.5 SCOPE OF THE STUDY

The scope of the project is to analyse fundamental strength of the

 To identify the level of impact of ratios on share price.

 To identify the financial performance of companies of the steel industries.

 To know the share price movement in the market.

 To identify the prime ratio.

1.7 LIMITATIONS OF THE STUDY

 This study is mainly based on information gathered from secondary data.

 This study is limited to the steel sector industries only.

Y = a + b1X1 + b2X2 + ... + bn*Xn