AN APPLICATION OF RATIO ANALYSIS FOR CELLO PLASTIC PRODUCTS LTD

Submitted in partial fulfillment of the requirement for the Degree of Master of Business Administration)

Under the supervision of: Submitted by:Ms Neha Aggarwal Sonali Kukreja

CONTENTSS.NO. TITLE

1 CELLO –AN INTRODUCTION

2 OBJECTIVES OF THE STUDY

3 RATIO ANALYSIS

4 RESEARCH METHODOLOGY

5 DATA ANALYSIS

6 SUGGESTIONS AND FINDINGS

7 CONCLUSIONS

CELLO-AN INTRODUCTION Cello plastic products ltd founded by Mr G.D. RATHOD in May 10,1986, at a small factory in Goregaon , Mumbai,with just 60 workers and 7 machines

First and largest Manufacturer of Branded household products in India ,having wide range of plastic moulded products.

Largest Exporter of Insulated Thermoware from India

2100 employees-more than 300 engineers and plastic technologist.

OBJECTIVES OF THE STUDY

To have an indepth knowledge of ratio analysis of the company

To make comparisons between the ratios during different periods(2years data from 2011 to 2012 )

RATIO ANALYSIS Ratio analysis is a technique of analysis ,comparison and interpretation of financial statements.

According to Accountant’s Handbook by Wixon, Kell and Bedford, “a ratio is an expression of the quantitative relationship between two numbers”

It is helpful to know about the liquidity, solvency, capital structure and profitability of an organization.

CLASSIFICATION OF RATIO

Types of ratios

Liquidity ratio

Leverage ratio

Activity ratio

Profitability ratio

RESEARCH METHODOLOGY DATA COLLECTION:-Primary Data: No primary data was collected in this project-Secondary Data: Balance sheet,Profit and loss account of the company ,Newspapers and Journals TOOLS USED : •Tables•Bar graphs•diagram

DATA ANALYSIS1) LIQUIDITY RATI0a) Current ratio (RS IN CRORE)

YEAR 2010-11 2011-12

Current assets 98.77 127.38

Current liabilities 21.97 25.34

CURRENT RATIO 4.49 4.49

2010-11 2011-12012345

CURRENT RATIO

CURRENT RATIO

b) Quick ratio (RS IN CRORE)

YEAR 2010-11 2011-12Quick assets 66.68 84.64Current liabilities 21.97 25.34QUICK RATIO 3.03 3.34

2010-11 2011-122.82.9

33.13.23.33.4

QUICK RATIO

QUICK RATIO

2) LEVERAGE RATIOa) Debt equity ratio (RS IN CRORE)

YEAR 2010-11 2011-12

Long term loans 0.89 1.36

Shareholder’s fund 118.41 151.12

DEBT EQUITY RATIO 0.007 0.009

2010-11 2011-120

0.0020.0040.0060.008

0.01

DEBT EQUITY RATIO

DEBT EQUITY RATIO

b) Proprietary ratio (RS IN CRORE)

YEAR 2010-11 2011-12

Shareholder’s funds 118.41 151.12

Long term loan .89 1.36

PROPRIETARY RATIO 99.25% 99.11%

2010-11 2011-1299.00%99.05%99.10%99.15%99.20%99.25%99.30%

PROPRIETARY RATIO

PROPRIETARY RATIO

3) ACTIVITY RATIOa) Stock turnover ratio (RS IN CRORE)

YEAR 2010-11 2011-12Cost of good sold 122.95 134.24

Average stock 24.49 37.41

STOCK TURNOVER RATIO

5.02 3.588

2010-11 2011-120

2

4

6

STOCK TURNOVER RATIO

STOCK TURNOVER RATIO

b) Debtor turnover ratio (RS IN CRORE)

YEAR 2010-11 2011-12

Sales 162.71 174.47

Average debtor 48.57 65.90

DEBTOR TURNOVER RATIO

3.35 2.64

2010-11 2011-120

1

2

3

4

DEBTOR TURNOVER RATIO

DEBTOR TURNOVER RATIO

4) PROFITABILITY RATIOa) Gross profit ratio (RS IN CRORE)

YEAR 2010-11 2011-12

Gross profit 39.76 40.23

Net sales 162.71 174.47

GROSS PROFIT RATIO 24.43% 23.05%

2010-11 2011-1222.00%

23.00%

24.00%

25.00%

STOCK TURNOVER RATIO

STOCK TURNOVER RATIO

b) Net profit ratio (RS IN CRORE)

YEAR 2010-11 2011-12

Net profit 22.41 15.23

Net sales 162.71 174.47

NET PROFIT RATIO 13.77% 8.72%

2010-11 2011-120.00%

5.00%

10.00%

15.00%

NET OROFIT RATIO

NET OROFIT RATIO

SUGGESTIONS AND FINDINGSSUGGESTIONSThe profit ratio is decreased in current year so the company should pay attention to this because profit making is the primeobjective of every business

The company should make the balance between liquidity and solvency position of the company

FINDINGS

CONCLUSIONSLiquidity ratio is increasing from the last year , fixed assets are also increasing compare to the previous year and equity share capital remain same in the current year.

Debtors turnover ratio has decreased which shows that the company is not utilizing its debtor’s efficiency and creditors turnover ratio has also reduced which indicates less period of credit enjoyed by the business.

Profitability ratio decreases which is not the good indicator for the company

THANK YOU