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4.

1 Ratio Analysis:

4.2.1

Current Ratio:

Current ratio is a financial ratio that measures whether or not a company has enough resources to pay its debt over the next business cycle (usually 12 months) by comparing firm's current assets to its current liabilities. Acceptable current ratio values vary from industry to industry. Generally, a current ratio of 2:1 is considered to be acceptable. The higher the current ratio is, the more capable the company is to pay its obligations. Current ratio is also affected by seasonality.

Current Ratio:

Mar '11 1.7 0.95 1.33 1.45 0.97 0.96

Mar '10 1.43 0.97 1.8 1.15 0.98 0.68

Mar '09 0.8 0.64 1.59 0.96 0.97 0.96

Mar '08 0.62 0.63 1.04 0.89 0.91 1.26

Mar '07 1.32 0.67 1.17 0.84 0.98 1.55

Bharat Fertlizer CHAMBLFERT DEEPAKFERT GSFC GNFC ZUARIAGRO

Current Ratio
2 1.5 Ratio 1 0.5 0
ize G SF FE R BL FE G N G RO C RT FC r T er tl

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Bh ar at F

DE E

CH

Company Name

Interpretation:

ZU AR IA

AM

PA K

Current ratio gives an idea of company's operating efficiency. A high ratio indicates "safe" liquidity, but also it can be a signal that the company has problems getting paid on its receivable or have long inventory turnover, both symptoms that the company may not be efficiently using its current assets.

4.2.2

Debt-Equity Ratio:

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.

Debt Equity Ratio:

Mar '11 0.08 1.53 0.73 0.14 0.5 0.8

Mar '10 0.24 1.88 0.79 0.32 0.27 1.01

Mar '09 8.34 2.01 0.76 0.17 0.18 0.34

Mar '08 1.91 1.66 0.5 0.38 0.17 0.99

Mar '07 1.61 1.99 0.51 0.71 0.22 1.1

Bharat Fertlizer CHAMBLFERT DEEPAKFERT GSFC GNFC ZUARIAGRO

Debt/Equity Ratio
9 8 7 6 5 4 3 2 1 0
ize G SF FE R BL FE G N G RO C RT FC r T er tl

Ratio

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Bh ar at F

DE E

CH

Company Name

Interpretation:

ZU AR IA

AM

PA K

A high debt/equity ratio generally means that 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.

4.2.3

Net Profit Ratio:

Net profit margin measures how much of each dollar earned by the company is translated into profits. A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss. Net profit margin provides clues to the company's pricing policies, cost structure and production efficiency. Different strategies and product mix cause the net profit margin to vary among different companies.

Net Profit Margin(%):

Mar '11 56.73 6.89 11.73 15.45 9.27 2.97

Mar '10 23.42 6.86 13.09 6.2 4.66 3.59

Mar '09 -37.49 4.89 10.26 8.39 7.65 1.5

Mar '08 -391.99 7.41 9.31 6.57 10.74 2.74

Mar '07 4.72 5.8 10.76 7.89 11.81 16.28

Bharat Fertlizer CHAMBLFERT DEEPAKFERT GSFC GNFC ZUARIAGRO

Net Profit Margin


100 0 Percentage Bh ar at Fe r tl ize CH r AM BL FE RT DE EP AK FE R T
G SF G N G

-100 -200 -300 -400 -500

RO

FC

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Company Name

Interpretation: Net profit margin is an indicator of how efficient a company is and how well it controls its costs. The higher the margin is, the more effective the company is in converting revenue into actual profit. Net profit margin is mostly used to compare company's results over time.

4.2.4 Inventory Turnover Ratio:

Inventory Turnover Ratio is one of the efficiency ratios and measures the number of times, on average, the inventory is sold and replaced during the fiscal year. Inventory Turnover Ratio measures company's efficiency in turning its inventory into sales. Its purpose is to measure the liquidity of the inventory. Inventory Turnover Ratio is figured as "turnover times". Average inventory should be used for inventory level to minimize the effect of seasonality.

ZU AR IA

Inventory Turnover Ratio:

Mar '11 0.85 14.62 20.08 12.7 17.72 8.28

Mar '10 42.36 18.97 26.45 6.76 19.89 12.64

Mar '09 1.32 18.27 25.21 10.57 15.6 12.36

Mar '08 0.52 11.44 25.52 8.61 19.61 8.13

Mar '07 1.78 7.4 7.49 6.28 7.11 7.24

Bharat Fertlizer CHAMBLFERT DEEPAKFERT GSFC GNFC ZUARIAGRO

Inventory Turnover Ratio


45 40 35 30 25 20 15 10 5 0
ize G SF FE R BL FE G N G RO C RT FC r T er tl

Ratio

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Bh ar at F

DE E

CH

Company Name

Interpretation: A low inventory turnover ratio is a signal of inefficiency, since inventory usually has a rate of return of zero. It also implies either poor sales or excess inventory. A high inventory turnover ratio implies either strong sales or ineffective buying (the company buys too often in small quantities, therefore the buying price is higher).A high inventory turnover ratio can indicate better liquidity, but it can also indicate a shortage or inadequate inventory levels, which may lead to a loss in business.

ZU AR IA

AM

PA K