Ratio Analysis- Jitendra Nainani
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Transcript of Ratio Analysis- Jitendra Nainani
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COMPARATIVE ANALYSIS
PRESENTED BY- GROUP 5
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How a Ratio is expressed?
As Percentage - such as 25% or 50%. For example if net profit is Rs.25,000/-and the sales is Rs.1,00,000/- then the
net profit can be said to be 25% of thesales.
As Proportion -The above figures maybe expressed in terms of the relationshipbetween net profit to sales as 1 : 4.
As Pure Number /Times - The samecan also be expressed in an alternativelyway such as the sale is 4 times of the netprofit or profit is 1/4th of the sales.
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Classification of RatiosBalance Sheet RatioP&L Ratio or
Income/RevenueStatement Ratio
Balance Sheet and
Profit & Loss Ratio
Financial Ratio Operating Ratio Composite Ratio
Current RatioQuick Asset RatioProprietary RatioDebt Equity Ratio
Gross Profit RatioOperating RatioExpense Ratio
Net profit RatioStock Turnover Ratio
Fixed Asset TurnoverRatio, Return on TotalResources Ratio,Return on Own FundsRatio, Earning per
Share Ratio, DebtorsTurnover Ratio,
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Assets
Current
Liabilities Tata Power1.123
Reliance Power
0.334
.uisite for the very survival of a firm A proper balance bet
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Quick Ratio = Quick
Current Assets
Current Liabilities
0.812
0.335
it is a measurement of a firms ability to convert its assets
quickly into cash in order to meet its current liabilities. Acid test ratio is a rigorous measure of firm s.ability to service short term liabilities The
usefulness of the ratio lies in the fact that itis widely accepted as the best available test of
.liquidity position of a firm
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Interval Measure = CurrentAsset Inventory/ Avg. Daily
Cash Opt. Exp.
99 Days
Nil
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Total debt ratio = totaldebt/Capital employed
0.598
0.0031
l
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DEBT EQUITY RATIO = TotalDebt
Net Worth
0.64
0.0032
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Capital equity ratio = Capitalemployed /Net worth
1.07
2.158
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Inventory Turnover= COGS /Inventory
12.94
NA
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Debtor Turnover Ratio = CreditSales / Debtors
4.56
NA
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Assets turnover = Sales /Net assets
0.83
NA
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Net Margin = Profit After Tax /Sales
0.13
0.75
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Gross Margin = GrossProfit / Sales
0.14
0.50
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PAT to EBIT Ratio = PAT /EBIT
0.84
0.97
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ROI before Tax = EBIT / NetAsset
0.13
0.018
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Return on Equity = PAT / NetWorth
0.114
0.018
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EPS = PAT / No. of Shares
4.06
1.04
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DPS = Profit Distributed / No.of Shares
4.26
NA
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Price To Earning Ratio = MarketValue of Share / EPS
325.23
138.5
Mkt Value to Book Value Ratio
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Mkt. Value to Book Value Ratio= Mkt. Value of Sh. / Book
Value of Sh.