Post on 04-Jun-2018
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E c o n o m i c A s s i g n m e n t
S u b m i t t e d t o :
D r . M a n o j K u m a r S h a r m a
9 / 6 / 2 0 1 2
Ravinder Singh Atwal
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VARDHMAN TEXTILES
The industrial city of Ludhiana, located in the fertile Malwa region of Central Punjab is otherwise known
as the "Manchester of India". Within the precincts of this city is located the Corporate headquarters of
the Vardhman Group, a household name in Northern India. The Vardhman Group, founded in 1965,
under the entrepreneurship of Late Lala Rattan Chand Oswal has today blossomed into one of the
largest Textile Business houses in India.
At its inception, Vardhman had an installed capacity of 14,000 spindles, today; its capacity has increasedmultifold to over 8 lacs spindles. In 1982 the Group entered the sewing thread market in the country
which was a forward integration of the business. Today Vardhman Threads is the second largest
producer of sewing thread in India. In 1990, it undertook yet another diversification - this time into the
weaving business. The grey fabric weaving unit at Baddi (HP), commissioned in 1990 with a capacity of
20,000 meters per day, has already made its mark as a quality producer of Grey poplin, sheeting, shirting
in the domestic as well as foreign market. This was followed by entry into fabric processing by setting up
Auro Textiles at Baddi and Vardhman Fabric at Budhni, Madhya Pradesh. Today the group has 900
shuttle less looms and has processing capacity of 90mn meters fabrics/annum.
In the year 1999 the Group has added yet another feather to its cap with the setting up of Vardhman
Acrylics Ltd., Bharuch (Gujarat) which is a joint venture in Acrylic Fibre production undertaken with
Marubeni and Exlan of Japan. The company also has a strong presence in the markets of Japan, Hong
Kong, Korea, UK and EU in addition to the domestic market. Adherence to systems and a true dedication
to quality has resulted in obtaining the coveted ISO 9002/ ISO 14002 quality award which is the first in
Textile industry in India and yet another laurel to its credit.
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ACHIEVEMENTS OF VARDHMAN TEXTILE
Vardhman Group became India's first textile company to be awarded ICO9002/ ISO 14002 Certification.
It is the largest producer and exporter of yarns and Grey woven fabrics from India. Vardhman is also the
largest producer of tyercord yarns and the second largest producer of sewing threads in India. The
Vardhman Group vision of excellence is matched by a dedication and sincerity to be the best and excel
in every industry it has a presence.
Textile Export Promotion Council 2007-08
Special Achievement Award in Yarn Category
Textile Export Promotion Council 2007-08
Silver Top Exporter Award in Yarn Category
Textile Export Promotion Council 2007-08
Bronze Trophy in Processed Yarn Category
Textile Export Promotion Council 2005-06
World Trophy in highest export in Yarn Category
Textile Export Promotion Council 2005-06
Bronze Trophy for Highest Global Export Category (Overall)
Textile Export Promotion Council 2004-05
World Trophy in highest export in Yarn Category
Textile Export Promotion Council 2004-05
Silver Trophy for Highest Global Export Category (Overall)
Textile Export Promotion Council 2003-04
Gold trophy in EOU/EPZ for export of cotton yarn
Textile Export Promotion Council 2003-04
Bronze trophy in mill fabric exporter category
Textile Export Promotion Council 2002-03Gold Trophy in EOU/EPZ for export of cotton yarn
Textile Export Promotion Council 1998-99
Silver Trophy
Textile Export Promotion Council 1997-98
Bronze Trophy
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Textile Export Promotion Council 1996-97
Silver Trophy
Govt. of India Award 1994-5, 1995-96
Award of Merit
Textile Export Promotion Council 1993-94
(Merchant Export Category for Fabrics)
Bronze Trophy
Textile Export Promotion Council 1993-94
(Merchant Export Category for Fabrics)
Gold Trophy
Textile Export Promotion Council 1990-00
Trophy
Products
Yarns
Cotton Yarn Special Blended YarnOrganic Cotton Yarn Core Spun YarnFair Trade cotton Yarn MelangesOrganic Fair Trade Cotton Yarn Gassed MercerisedEllitwist Modal YarnVortex Yarn Tencel YarnSlub Yarn Viscose YarnAcrylic Yarn Hand Knitting YarnPoly -Cotton Yarn Speciality YarnAcrylic - Cotton yarn
Fabrics
ShirtingCount range Ring spun Ne 20's to 80's Ring spun Blends 2/40's to 2/210's
100% cotton, Polyester cotton, Cotton stretch DowXLA,Cotton Tencel, Cotton Modal, Cotton Bamboo, Cotton silk,Cotton Nylon, Cotton Nylon stretch, Cotton Linen.
Weave Yarn Dyed: Chambray, fil-a-fil, checks, stripes, Oxford, HBTOthers (yarn dyed & piece dyed) Plain, twill, satin, oxford,dobby, herringbone, Pique Cord.
Fabric weight 2-5.6 oz/yd'2Finished width 58"
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Bottom weights
Count range Ring spun Ne 20's to Ne 2/80's Open end Ne 6's to Ne 16's100% cotton, Polyester cotton, Cotton stretch DowXLA,Cotton Tencel, Cotton Modal, Cotton Bamboo, Cotton silk,Cotton Nylon, Cotton Nylon stretch, Cotton Linen Coolmax.
Weave Chambray, fil-a-fil, checks, stripes, Oxford, HBT Others (yarndyed & piece dyed) Plain, twill, Drill, satin, oxford, dobby,herringbone, Pique Cord, Honey comb
Fabric weight 6.00 to 12.00 Oz.yd'2Finished width 58" to 60
Finishes Soft, Peach, Mechanical stretch, Microsand, Easy to iron,Water resistant, Stain Release, Stiff finish, Airo finish, Carbonfinish, Diamond finish, Airo enzyme, Soft Easy Care, Soilresistant, Thirsty finish, Feather touch, Banana Peel and toadd Ammonia finish.
Eco-Friendly Blends Bamboo, Organic Cotton, LinenAlso certified by FLO, OEKOTEX, SKAL.
GarmentsVardhman Group has Just started manufacturing garments and they have planned to start the
factory in Punjab.
ThreadVardhman manufactures variety of threads for embroidery, industrial use and consumer
products
Fibre
Acrylic Bright & Semi-dull Non shrinkable fibre in 1.2,1.5,2,3,5,7,10,15 deniers in a wide range of cut
lenghts.
Acrylic Bright & Semi-dull Shrinkable fibre with different shrinage levels in 2,3,5 deniers in a wide range
of cut lengths
Acrylic Tow endless Bright & Semi dull in 2,3 denier.
Specialty acrylic fibres suitable for Open end spinning; Soft handle, Water absorbent applications etc.
SteelVardhman Special Steels incorporates some of the most advanced manufacturing facilities with
equally reliable support facilities. The plant has well conceived layout plan with modern material
handling facilities-all designed for economic processing of materials and human skills.
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Vardhman's ability to adopt changes in technology is evident in its extensive use of automation
and contemporary concepts.
DETERMINANTS OF DEMAND
Vardhman Textiles manufactures a lot of products like yarns, fibre, garments and steel. If we talk about
the Vardhman Textiles , it is the major producer of wool in India.
Demand of the yarns is determined by following factors:
1. Price of the commodity is one of the most important factor of demand.
2. Income of consumer : The income of the consumers has a really strong effect on the demand,
and so is In the case of Real juice, the consumers can be divided into 3 classeslower class,
middle class and high class. The demand of juice is more in middle and high class of the society.
3. Season: As wool is a seasonal product the demand is high duringthe winter season or just
before the arrival of winters.
4. Advertisement: Advertisement is used to inform, persuade and retain the consumers, so to
make a consumer aware about the product advertisement is most important and with that it
also become as a determinant of demand for the product.
5. Competition: Vardhman Textiles being a reputed and old company in India is now facing tough
competition from Phoenix Mills, Jindal Cotex and Trident and they are taking away the sales of
the Vardhman and its demand is decreasing.
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CONCLUSION
Vardhman is facing a tough competition from its competitors
Advertisement is very important factor for a product, and Vardhman need to look at its
advertisement strategy. Seasons also play important role in selling a product.
REGRESSION ANALYSIS
YEAR SALES (X) in crores
2001 773.06
2002 768.60
2003 781.60
2004 908.50
2005 1159.28
2006 1938.81
2007 1961.81
2008 2159.24
2009 2346.36
2010 2495.38
2011 2767.22
2012 3636.96
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SALES (X) ADVERTISEMENT (Y)
773.06 14.6
768.60 15.4
781.60 15.9
908.50 15.4
1159.28 17.2
1938.81 15.1
1961.81 19.7
2159.24 24.8
2346.36 39.0
2495.38 39.1
2767.22 41.4
3636.96 45.5
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SALES (X) ADVERTISEMENT
EXPENSE (Y)
X2 Y2
773.06 14.6 597621.8 213.16
768.60 15.4 590746 237.16
781.60 15.9 610898.6 252.81
908.50 15.4 825372.3 237.16
1159.28 17.2 1343930 295.84
1938.81 15.1 3758984 228.01
1961.81 19.7 3848698 388.09
2159.24 24.8 4662317 615.04
2346.36 39.0 5505405 1521
2495.38 39.1 6226921 1528.81
2767.22 41.4 7657507 1713.96
3636.96 45.5 13227478 2070.25
X Y X2
Y2
21696.82 303.1 48855879.89 9301.29
Y = aN + X
XY = a X + b X2
303.1=10a+21696.82
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Cost Analysis
Distribution analysis
Year Distribution Expense Sales Distribution per Sales
1989 1.72 88.4 1.945701357
1990 2.75 149.19 1.843287084
1991 3.8 189.87 2.001369358
1992 5.41 244.79 2.2100576
1993 5.96 256.96 2.319427148
1994 7.18 317.17 2.263770218
1995 9.31 405.66 2.295025391
1996 11.72 564.07 2.077756307
1997 15.08 707.77 2.130635658
1998 16.82 813.4 2.06786329
1999 19.06 918.62 2.0748514082000 22.49 1046.83 2.148390856
2001 24 1173.79 2.044658755
2002 25.26 1168.14 2.16241204
2003 30.68 1236.37 2.481457816
2004 27.15 1152.32 2.356116357
2005 32.88 1273.78 2.581293473
2006 40.5 1372.52 2.950776674
2007 48.5 1641.57 2.9544886912008 52.42 2128.17 2.463149091
2009 50.07 2435.93 2.055477785
2010 52.88 2891.51 1.828802252
2011 62.87 3311.37 1.898609941
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Analysis:
The distribution expense per sales has a regular graph and its value lies between
13 , it can be seen that the value of it is highest in the year 2006 and 2007 andthat is 2.9 , in those 2 years the distribution expense was the most as compared to
the other years.
0
0.5
1
1.5
2
2.5
3
3.5
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Distribution expence per Sales
Total
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Rent
Year Rent Sales Rent per Sales
1989 0.29 88.4 0.3280542991990 0.41 149.19 0.274817347
1991 0.56 189.87 0.294938642
1992 0.74 244.79 0.302299931
1993 1.17 256.96 0.455323786
1994 1.92 317.17 0.605353596
1995 2.13 405.66 0.5250702561996 3.56 564.07 0.631127342
1997 2.44 707.77 0.344744762
1998 2.31 813.4 0.283993115
1999 3.15 918.62 0.342905663
2000 3.61 1046.83 0.344850644
2001 3.81 1173.79 0.3245895772002 4.59 1168.14 0.392932354
2003 4.79 1236.37 0.387424476
2004 4.37 1152.32 0.379234935
2005 5.07 1273.78 0.398027917
2006 6.29 1372.52 0.458281118
2007 6.38 1641.57 0.3886523272008 10.67 2128.17 0.501369721
2009 14.1 2435.93 0.578834367
2010 17.14 2891.51 0.592769868
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0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
1989
1990
19
91
19
92
19
93
19
94
19
95
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Rent per Sales
Total
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Advertisement Expense
year Advertisement expense Sales Advertisement expense per Sales
1989 4.58 88.4 5.180995475
1990 7.57 149.19 5.074066626
1991 9 189.87 4.740085322
1992 12.05 244.79 4.922586707
1993 13.01 256.96 5.063044832
1994 21.21 317.17 6.687265504
1995 25.92 405.66 6.389587339
1996 41.75 564.07 7.401563636
1997 39.52 707.77 5.583734829
1998 69 813.4 8.482911237
1999 114.12 918.62 12.4229823
2000 120.02 1046.83 11.465089842001 146.07 1173.79 12.44430435
2002 154.45 1168.14 13.22187409
2003 159.97 1236.37 12.9386834
2004 154.95 1152.32 13.44678562
2005 171.79 1273.78 13.48663034
2006 151.66 1372.52 11.04974791
2007 197.6 1641.57 12.03725702
2008 248.1 2128.17 11.65790327
2009 284.93 2435.93 11.69696995
2010 390.03 2891.51 13.48879997
2011 390.19 3311.37 11.78334043
0
2
4
6
8
10
12
14
16
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Advertisement per sales
Total
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Power and Fuel Charges
Year Power and fuel Charges Sales Power per Sales
1989 1.03 88.4 1.165158371
1990 1.54 149.19 1.032240767
1991 2.15 189.87 1.132353716
1992 2.38 244.79 0.972261939
1993 3.31 256.96 1.288138232
1994 4.2 317.17 1.324210991
1995 5.86 405.66 1.444559483
1996 7.53 564.07 1.334940699
1997 8.59 707.77 1.213671108
1998 10.8 813.4 1.32776002
1999 12.37 918.62 1.346585095
2000 15.49 1046.83 1.479705396
2001 18.66 1173.79 1.589722182
2002 18.31 1168.14 1.567449107
2003 19.84 1236.37 1.604697623
2004 17.12 1152.32 1.485698417
2005 21.69 1273.78 1.702805822
2006 26.28 1372.52 1.914726197
2007 30.59 1641.57 1.86345998
2008 38.42 2128.17 1.805306907
2009 36.63 2435.93 1.503737792
2010 35.43 2891.51 1.225311343
2011 42.39 3311.37 1.280134808
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Analysis:
The power and fuel charges were highest in the year 2006 and 2007 in which the
distribution expenses were highest.
0
0.5
1
1.5
2
2.5
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Power and fuel charges per Sales
Total
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Wages
Year Wages Sales Wages per Sales
1989 3.1 88.4 3.506787331990 4.42 149.19 2.962665058
1991 5.7 189.87 3.002054037
1992 8.07 244.79 3.296703297
1993 10.04 256.96 3.907222914
1994 12.03 317.17 3.792918624
1995 17.02 405.66 4.19563181
1996 24.39 564.07 4.323931427
1997 31.42 707.77 4.439295251
1998 43.57 813.4 5.356528153
1999 54.88 918.62 5.974178659
2000 63.14 1046.83 6.031542848
2001 77.69 1173.79 6.618730778
2002 83.15 1168.14 7.118153646
2003 93.22 1236.37 7.539814133
2004 77.49 1152.32 6.724694529
2005 79.81 1273.78 6.265603165
2006 98.31 1372.52 7.162737155
2007 128.87 1641.57 7.850411496
2008 154.89 2128.17 7.278083988
2009 171.17 2435.93 7.026885009
2010 218 2891.51 7.539313369
2011 247.44 3311.37 7.47243588
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t
Analysis:The wages per sales are highest in the year 2007, this can be due to the strict rules
and labor acts.
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Raw Material
Year Raw Material Sales Raw Material per Sales
1989 23.51 88.4 26.595022621990 62.06 149.19 41.59796233
1991 74.48 189.87 39.22683942
1992 87.41 244.79 35.70815801
1993 78.65 256.96 30.60787671
1994 56.91 317.17 17.94305893
1995 80.29 405.66 19.79243702
1996 105.1 564.07 18.63243924
1997 128.76 707.77 18.19235062
1998 148.71 813.4 18.28251783
1999 158.72 918.62 17.27809105
2000 165.3 1046.83 15.7905295
2001 161.62 1173.79 13.76907283
2002 161.43 1168.14 13.81940521
2003 172.1 1236.37 13.9197813
2004 147.41 1152.32 12.79245349
2005 225.7 1273.78 17.71891535
2006 266.66 1372.52 19.42849649
2007 374.13 1641.57 22.79098668
2008 463.18 2128.17 21.76423876
2009 578.36 2435.93 23.7428826
2010 607.06 2891.51 20.994566852011 785.06 3311.37 23.70801209
0
5
10
15
20
25
30
35
40
45
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Raw material per sales for different years
Total
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0
0.2
0.4
0.6
0.8
1
1.2
0
5
10
15
20
25
30
35
40
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Sum of Average
Count of Marginal
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Ratio Analysis
The term Ratio refers to the numerical and quantitative relationship between two
items or variables. This relationship can be exposed as
Percentages
Fractions
Proportion of numbers
Ratio analysis is defined as the systematic use of the ratio to interpret the financial
statements. So that the strengths and weaknesses of a firm, as well as its historical
performance and current financial condition can be determined. Ratio reflects a
quantitative relationship helps to form a quantitative judgment.
Liquidity Ratio
Liquidity refers to the ability of a concern to meet its current obligations as &
when there becomes due. The short term obligations of a firm can be met only
when there are sufficient liquid assets. The short term obligations are met by
realizing amounts from current, floating (or)circulating assets The current assets
should either be calculated liquid (or)near liquidity. They should be convertible
into cash for paying obligations of short term nature. The sufficiency (or)
insufficiency of current assets should be assessed by comparing them with short-
term current liabilities. If current assets can pay off current liabilities, then liquidity
position will be satisfactory.
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A)Current Ratio
Current ratio may be defined as the relationship between current assets andcurrent liabilities. This ratio also known as Working capital ratio as it is a
measure of general liquidity and is most widely used to make the analysis of
a short-term financial position (or) liquidity of a firm
Current ratio = Current assets/ Current liabilities
YEAR
CURRENT
ASSET CURRENT LIABILITY CURRENT RATIO
2010 129,598 49,628 2.611388732
2009 91,795 43,206 2.124589177
2008 55,281.33 31,722.51 1.742653088
2007 39,641.22 27,859.39 1.422903373
2006 28,436.22 19,342.06 1.470175359
2005 25,197.18 23,838.05 1.05701515
2004 21,932.21 16,452.07 1.333097294
2003 40,611.07 15,986.42 2.540347995
2002 40757.06 12885.67 3.162975616
2001 39285.09 11285.72 3.480955579
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B)Quick Ratio
Quick ratio is a test of liquidity than the current ratio. The term liquidity refers to
the ability of a firm to pay its short-term obligations as &when they become due.
Quick ratio may be defined as the relationship between quick or liquid assets and
current liabilities. An asset is said to be liquid if it is converted into cash within a
short period without loss of value.
Quick or liquid assets Quick ratio = Quick or liquid assets
__________________
Current liabilities
YEAR QUICK ASSET CURRENT LIABILITY QUICK RATIO
2010 83,540 49,628 1.68332393
2009 61,951 43,206 1.43385178
2008 35,167 31,722.51 1.108570539
2007 23,904 27,859.39 0.8580331442006 16,875 19,342.06 0.872467566
2005 12,395 23,838.05 0.519950667
2004 10,782 16,452.07 0.655384398
2003 22,746 15,986.42 1.422824497
2002 24,904 12885.67 1.932668616
2001 25,360 11285.72 2.247083039
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C)Cash Ratio
The ratio of a company's total cash and cash equivalents to its current
liabilities. The cash ratio is most commonly used as a measure of company
liquidity. It can therefore determine if, and how quickly, the company can repay its
short-term debt. A strong cash ratio is useful to creditors when deciding how much
debt, if any, they would be willing to extend to the asking party.
YEAR CASH CURRENT LIABILITY CASH RATIO
2010 19,241 49,628 0.387704522
2009 16,391 43,206 0.379368606
2008 6,826.46 31,722.51 0.215192934
2007 5,024.75 27,859.39 0.180361092
2006 3,804.41 19,342.06 0.196691045
2005 1,065.38 23,838.05 0.044692414
2004 1,188.72 16,452.07 0.072253522
2003 3,758.25 15,986.42 0.235090158
2002 2177.15 12885.67 0.168959006
2001 2343.7 11285.72 0.207669515
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D)Debtor Turnover Ratio
It is a component of current assets and as such has direct influence on working
capital position (liquidity) of the business. Perhaps, no business can afford to make
cash sales only thus extending credit to the customers is a necessary evil. But care
must be taken to collect book debts quickly and within the period of credit allowed.
Otherwise chances of debts becoming bad and unrealizable will increase. How
effective or efficient is the credit collection? To provide answer debtors turnover
ratio or debtor turnover ratio is calculated.
YEAR SALES AVERAGE DEBTORSDEBTOR TURNOVERRATIO
2010 331,383 20,246 16.36782574
2009 288971 13,048 22.14676579
2008 211,130.46 10,046.43 21.01547117
2007 179,453.60 6,097.87 29.42889894
2006 137,503.31 2,694.25 51.03583929
2005 128,021.83 4,928.27 25.97703251
2004 115,902.32 4,207.22 27.54843341
2003 124,059.41 11,665.84 10.63441724
2002 117706.53 11996.57 9.8116820062001 118533.61 13768.46 8.609068117
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Profitability Ratio
A class of financial metrics that are used to assess a business's ability to
generate earnings as compared to its expenses and other relevant costs incurred
during a specific period of time. For most of these ratios, having a higher value
relative to a competitor's ratio or the same ratio from a previous period is indicative
that the company is doing well.
The primary objectives of business undertaking are to earn profits. Because profit
is the engine, that drives the business enterprise.
Net profit ratio
Return on total assets
Reserves and surplus to capital ratio
Earnings per share
Operating profit ratio
Price earnings ratio
Return on investments
A)Asset Turnover
This ratio is useful to determine the amount of sales that are generated from each
dollar of assets. As noted above, companies with low profit margins tend to have
high asset turnover, those with high profit margins have low asset turnover. Cory'sTequila Co.'s asset turnover seems to be relatively low, meaning that it makes a
high profit margin on its products. For companies in the retail industry you would
expect a very high turnover ratio - mainly because of cutthroat and competitive
pricing.
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YEAR SALES
AVERAGE TOTAL
ASSET ASSET TURNOVER
2010 326437 129,598 2.5188428832009 285687 91,795 3.112228335
2008 211130 55,281.33 3.81919176
2007 179453 39,641.22 4.526929292
2006 137503 28,436.22 4.83548798
2005 128021 25,197.18 5.080766975
2004 115902 21,932.21 5.284556367
2003 124059 40,611.07 3.05480747
2002 117706 40757.06 2.887990449
2001 118533 39285.09 3.017251583
B)Profit Margin
A profit margin of 17% means that for each dollar of sales that Cory's Tequila Co.
generates it is contributing 17 cents to itsbottom line(net income). These ties in
with gross profit margin, Cory's Tequila Co. has a healthy pricing strategy which is
evident in both ratios. In cutthroat pricing industries such as retail and gasoline you
would expect the profit margin much lower because of the heavy competition. We
can interpret that Cory's Tequila Co. either has exceptional products which
customers are willing to pay a substantial premium for, or Cory's Tequila Co.
really doesn't have much competition therefore they can charge what they wish.
YEAR SALES PROFIT AFTER TAX PROFIT MARGIN
2010 326437 47,141 14.44107132
2009 285687 43333 15.16799854
2008 211130 31,677.21 15.003651782007 179453 25,207.63 14.04692594
2006 137503 18,908.37 13.75124179
2005 128021 14,801.99 11.56215777
2004 115902 11,344.03 9.787605046
2003 124059 9,553.00 7.700368373
2002 117706 7551 6.415136017
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2001 118533 7763 6.549231016
C)Return on Asset
An indicator of how profitable a company is relative to its total assets. ROA givesan idea as to how efficient management is at using its assets to generate
earnings. Calculated by dividing a company's annual earnings by its total assets,
ROA is displayed as a percentage. Sometimes this is referred to as "return on
investment".
YEAR
PROFIT AFTER
TAX
SHAREHOLDER
EQUITY RETURN ON EQUITY2010 47,141 17,407 270.8163383
2009 43333 8,690 498.6536249
2008 31,677.21 8,640.23 366.6246153
2007 25,207.63 8,628.84 292.1323144
2006 18,908.37 5,733.03 329.8146007
2005 14,801.99 2,864.20 516.7931709
2004 11,344.03 2,862.49 396.2993757
2003 9,553.00 2,857.50 334.3132108
2002 7551 2855.94 264.3963108
2001 7763 2852.13 272.1825443
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D)Earnings per Share Ratio
Earnings per share is a small verification of return of equity and is calculated by
dividing the net profits earned by the company and those profits after taxes and
preference dividend by total no. of equity shares
YEAR
PROFIT AFTER
TAX(IN
RUPEE)
AVERAGE NO EQUITY
SHARE EARNING PER SHARE
2010 4714100000 4548000 1036.521548
2009 433330000 4548000 95.27924362
2008 3167700000 4548000 696.50395782007 2520700000 4548000 554.2436236
2006 1890800000 4548000 415.7431838
2005 1480100000 4548000 325.4397537
2004 1134400000 4548000 249.4283201
2003 955300000 4548000 210.0483729
2002 755100000 4548000 166.0290237
2001 776300000 4548000 170.6904134
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E)Cash Return Asset
A ratio used to compare a businesss performance among other industry members.
The ratio can be used internally by the company's analysts, or by potential and
current investors. The ratio does not however include any future commitments
regarding assets, nor does it include the cost of replacing older ones.
A high cash return on assets ratio can indicate that a higher return is to be
expected. This is because the higher the ratio, the more cash the company hasavailable for reintegration into the company, whether it be in upgrades,
replacements or other areas.
YEAR
AVERAGE
TOTAL ASSET
CASH FLOW
OPERTIONS
CASH RETURN ON
ASSET
2010 129,598 46,615 0.359689193
2009 91,795 60,587 0.660025056
2008 55,281.33 38,098.68 0.689178064
2007 39,641.22 30,274.23 0.763705809
2006 28,436.22 23,391.16 0.822583311
2005 25,197.18 23,302.80 0.924817777
2004 21,932.21 21,973.60 1.001887179
2003 40,611.07 15,174.18 0.3736463972002 40757.06 16597.87 0.407239138
2001 39285.09 15,054.78 0.383218672
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F)Return on Sales
Profitability can be measured in terms of relationship between net profit and
assets. This ratio is also known as profit-to-assets ratio. It measures the
profitability of investments. The overall profitability can be known.
YEAR NET PROFIT SALES RETURN ON SALES
2010 47,141 326437 0.144410713
2009 43333 285687 0.1516799852008 31,677.21 211130 0.150036518
2007 25,207.63 179453 0.140469259
2006 18,908.37 137503 0.137512418
2005 14,801.99 128021 0.115621578
2004 11,344.03 115902 0.09787605
2003 9,553.00 124059 0.077003684
2002 7551 117706 0.06415136
2001 7763 118533 0.06549231
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G)Operating Margin Ratio
Operating margin is a measurement of what proportion of a company's revenue is
left over after paying for variable costs of production such as wages, raw materials,
etc. A healthy operating margin is required for a company to be able to pay for its
fixed costs, such as interest on debt
YEAR SALES
NET FLOW FROM
OPERATIONS OPERATING MARGIN
2010 326437 46,615 0.142799376
2009 285687 60,587 0.212074753
2008 211130 38,098.68 0.180451286
2007 179453 30,274.23 0.168702836
2006 137503 23,391.16 0.170113816
2005 128021 23,302.80 0.182023262
2004 115902 21,973.60 0.189587755
2003 124059 15,174.18 0.122314221
2002 117706 16597.87 0.141011248
2001 118533 15,054.78 0.127009187
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H)Return on Investment
Return on share holders investment, popularly known as Return on investments
(or) return on share holders or proprietors funds is therelationship between net
profit (after interest and tax) and the proprietors funds
YEAR
NET PROFIT
BEFORE TAX
SHAREHOLDER
EQUITY
RETURN ON
INVESTMENT
2010 59,626 17,407 3.425403573
2009 52703 8,690 6.0647871122008 36,517.59 8,640.23 4.226460407
2007 28,422.30 8,628.84 3.293872641
2006 21,435.53 5,733.03 3.738953049
2005 16,501.82 2,864.20 5.761406326
2004 115,020.00 2,862.49 40.18179976
2003 123,327.00 2,857.50 43.15905512
2002 14020.78 2855.94 4.909339832
2001 8517.34 2852.13 2.986308478
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I) Cash Return to Shareholder Ratio
YEAR
CASH FLOW
OPERTIONS
SHAREHOLDER
EQUITY
CASH RETURN TO
SHAREHOLDER RATIO
2010 46,615 17,407 2.677945654
2009 60,587 8,690 6.972036824
2008 38,098.68 8,640.23 4.409452063
2007 30,274.23 8,628.84 3.50849361
2006 23,391.16 5,733.03 4.080069353
2005 23,302.80 2,864.20 8.135884366
2004 21,973.60 2,862.49 7.676393629
2003 15,174.18 2,857.50 5.310299213
2002 16597.87 2855.94 5.811701226
2001 15,054.78 2852.13 5.278434012
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Solvency Ratio
One of many ratios used to measure a company's ability to meet long-term
obligations. The solvency ratio measures the size of a company's after-tax income;
excluding non-cash depreciation expenses, as compared to the firm's total debt
obligations. It provides a measurement of how likely a company will be to
continue meeting its debt obligations.
A) Liquidity to Equity Ratio
YEAR
ALL
LIABILITY
SHAREHOLDER
EQUITY
LIQUIDITY
TO EQUITY
RATIO
2010 103,164 17,407 5.92658126
2009 87,216 8,690 10.0363636
2008 58,263.48 8,640.23 6.74327882
2007 35,608.47 8,628.84 4.126680992006 30,731.00 5,733.03 5.36034174
2005 32,222.99 2,864.20 11.2502584
2004 23,621.88 2,862.49 8.25221398
2003 21,224.43 2,857.50 7.42762205
2002 14629.02 2855.94 5.12231349
2001 15753.48 2852.13 5.52340882
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B) Current Liability to Net Worth
YEAR
CURRENT
LIABILITY NET WORTH
CURRENT
LIABILITY
TO NET
WORTH
RATIO
2010 49,628 103,164 0.48105928
2009 43,206 87,216 0.49539075
2008 31,722.51 58,263.48 0.54446645
2007 27,859.39 35,608.47 0.78238099
2006 19,342.06 30,731.00 0.62939898
2005 23,838.05 32,222.99 0.73978392
2004 16,452.07 23,621.88 0.69647589
2003 15,986.42 21,224.43 0.75320845
2002 12885.67 14629.02 0.88082934
2001 11285.72 15753.48 0.71639536
C) Current Liability to Inventory Ratio
YEAR
CURRENT
LIABILITY INVENTORIES
CURRENT
LIABILITY TO
INVENTORY
RATIO
2010 49,628 46,058 1.07751096
2009 43,206 29,844 1.44772819
2008 31,722.51 20,114.69 1.57708172
2007 27,859.39 15,736.94 1.77031812
2006 19,342.06 11,560.90 1.67305833
2005 23,838.05 12,802.57 1.86197381
2004 16,452.07 11,149.78 1.47555109
2003 15,986.42 17,865.20 0.89483577
2002 12885.67 15853.33 0.81280526
2001 11285.72 13925.14 0.81045648
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D) Fixed Asset to Net worth Ratio
YEAR FIXED ASSET NET WORTH
FIXED ASSET
TO NET
WORTH
RATIO
2010 49,756 103,164 0.48230003
2009 45,095 87,216 0.51704962
2008 29,443.01 58,263.48 0.50534245
2007 23,904.05 35,608.47 0.67130236
2006 19,883.68 30,731.00 0.64702353
2005 19,160.61 32,222.99 0.594625452004 15,494.33 23,621.88 0.65593128
2003 20,465.64 21,224.43 0.96424922
2002 24442.4 14629.02 1.67081595
2001 24286.93 15753.48 1.54168666
Structure Performance and Conduct
MISSION
Vardhmanaims to be world class textile organization producing
diverse range of products for the global textile
market.Vardhmanseeks to achieve customer delight through
excellence in manufacturing and customer service based on creative
combination of state-of-the-art technology and human
resources. Vardhmanis committed to be responsible corporatecitizen.