INTRODUCTION

 Ratio Analysis is a form of Financial

Statement Analysis that is used to obtain
a quick indication of a firm's financial
performance in several key areas.
The ratios are categorized as Short-term
Solvency Ratios, Debt Management,
Asset Management Ratios,
Profitability Ratios, and Market
Value ratios.

DEFINITION
 A ratio analysis is a quantitative
analysis of information contained in a
company’s financial statements. Ratio
analysis is used to evaluate various
aspects of a company’s operating and
financial performance such as its
efficiency, liquidity, profitability and
solvency.
Classification of Ratios:-
In ratio analysis the ratios may be classified into the
four categories as follows;
(I) Profitability Ratios
(II) Turnover Ratios
(III) Financial Ratios
(IV) Leverage Ratios

PROFITABILITY RATIO:
Profitability ratios are a class of financial metric that
are used to assess a business's ability to generate
earnings 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 relative to the same
ratio from a previous period indicates that the
company is doing well.
Gross profit ratio = (Gross profit / Net sales) x
100

The ratio is compare with earlier

years ratio and important conclusions are drawn
from such comparison.
2. Operating Profit Ratio: -
This ratio measures the proportion of an enterprise’s.
Cost of sales and operating expenses in comparison to
its sales

Operating profit ratio = (Operating profit /

Net sales) x 100
EBIT = Earnings Before Interest and Taxes.
Operating Ratio is a measurement of the
efficiency and profitability of the business enterprise. The
ratio indicates the extent of sales that is absorbed by the
cost of goods sold and operating expenses. Lower the
operating ratio, the better it is, because it will leave higher
margin of profit on sales.

3. Net Profit Ratio: -

This ratio measures the rate of net profit earned on
sales. It helps in determining the overall efficiency of
the business operation. An increase in the ratio over
the previous year shows improvement in the overall
efficiency of the business.

Net profit ratio = (Net profit / Net

sales) x l00

4.Return on Capital Employed Ratio:-

This ratio reflects the overall
profitability of the business. It is calculated by
comparing the profit earned and the capital employed
to earn it. This ratio is usually in percentage. And is
also known as “Rate of Return” or “Rate on capital
Employed".
Since the capital employed includes shareholders'
funds and long-term loans, interest paid on long-term
loans will not be deducted from profits while
calculating this ratio.

Return on capital employed (ROI) = (Net profit

before interest, tax / Capital employed) x 100

Capital Employed = Equity Share Capital

+Preference Share Capital +All Reserves+ P & L A/C
Balance + Long term Loans- Fictitious Assets.
Or
Capital Employed =Fixed Assets + Working Capital.
OR [FA + (C.A-C.L)]
This ratio measures how efficiently the capital
employed in the business is being used.
5.Return on Total assets: -
The return on total assets (ROTA) is a
ratio that measures a company's earnings before
interest and taxes (EBIT) against its total net assets.
The ratio is considered to be an indicator of how
effectively a company is using its assets to generate
earnings before contractual obligations must be paid.
 Return on total assets=(net profit/total
assets )*100

6.Earning per Share Ratio: -

It measures the profit available to the
equity share holders on a per share basis, i.e. the
amount that they can get on every share held. It is
calculated by dividing the profits available to the
equity shareholders by the number of the outstanding
shares. The profits available to the ordinary
shareholders are represented by net profits after taxes
and preference dividend. Thus,

Earning per share = net profit available for equity

shareholders / Number of equity shares

(II) Turnover Ratios:

The turnover ratio is the percentage of a
mutual fund or other investment's holdings that have
been replaced in a given year, which varies by
the type of mutual fund , its investment
objective and/or the portfolio manager's investing
style.
s are generally calculated on the basis of sales or cost
of sales. Some of the important activity ratios are
discussed below:
 1. Inventory Turnover Ratio: -
It is computed by dividing the cost of
goods sold by average inventory. Thus ,The cost of
goods sold means sales minus gross profit. The
average inventory refers to the simple average of the
opening and closing inventory. The ratio indicates
how fast inventory is sold. A high ratio is good from
the view point of liquidity and vice versa. A low ratio
would signify that inventory does not sell fast and
stays on the shelf or in the warehouse for a long time.
This ratio indicates the number of times inventories
replaced during the year. It measures the relationship
between the cost of goods sold and the inventory
level.

Inventory Turnover = Cost of Sales ÷

Average Inventory

2. Debtors Turnover Ratio: -

This ratio indicates the relationship
between credit sales and average debtors during the
year .Bill receivable is added in debtors for the
purpose of calculation of this ratio. This ratio
indicates the speed with which the amount is
collected from debtors. The higher the ratio, the
better it is, since it indicates that amount from
debtors is being collected more quickly. The more
quickly the debtors pay, the less the risk from bad
debts, and so the lower the expenses of collection and
increase in the liquidity of the firm. A lower debtor
turnover ratio will indicate the inefficient credit sales
policy of the management.

Receivable Turnover = Net Credit Sales ÷ Average

Accounts Receivable
3. Fixed Asset Turnover Ratio: -
This ratio is also known as the
investment turnover ratio. It is based on the
relationship between the cost of goods sold and assets
of a firm. A reference to this was made while working
out the overall profitability of a firm as reflected in
its earning power.

Fixed asset turnover ratio=costs of goods

sold/avg. fixed asset

4. Investment Turnover Ratio: -

It is based on relationship between the
cost of goods sold and investments of firm. A
reference to this was made while working out the
overall profitability of the firm as reflected in its
earning power. Depending upon the different
concepts of assets employed, there are many variance
of this ratio. Thus , Here, the total assets and fixed
assets are net of depreciation and the assets are
exclusive of fictitious assets like debit balance of
profit and loss account and deferred expenditure and
so on. The assets turnover ratio, however defined,
measure the efficiency of a firm in managing and
utilizing its assets. The higher the turnover ratio, the
more efficient is the management and utilization of
the assets while low turnover ratios are indicative of
under utilization of available resources and presence
of idle capacity.

1. Total Asset Turnover = Net Sales ÷ Average Total

Assets
2. Fixed Asset Turnover = Net Sales ÷ Average fixed
Assets
3. Capital Turnover = Net Sales ÷ Average capital
employed

(lV) LEVERAGE RATIOS:

A leverage ratio is any one of several
financial measurements that look at how much
capital comes in the form of debt (loans), or assesses
the ability of a company to meet its financial
obligations. The leverage ratio is important given
that companies rely on a mixture of equity and debt
to finance their operations, and knowing the amount
of debt held by a company is useful in evaluating
whether it can pay its debts off as they come due.
• OPERATING LEVERAGES=contribution/earning
before intrest and tax(EBIT)
• FINANCIAL LEVERAGES=EBIT/profit before
tax
• Combined leverages= operating leverages and
financial leverage.
- Sales –variable cost=contribution
- Contribution-operating expenses or fixed
assets=operating profit (EBIT)
- EBIT-interest= EBT(earning before tax)
- EBT-tax=EAT(earning after tax)
- EAT-dividend to share holders=net income
available to share holders
- Earning per share= net income available to share
holders/no.of equity shares
 Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

INCOME
Revenue From Operations [Gross] 62,276.30 60,300.20 55,496.40 49,918.50 45,350.90
Revenue From Operations [Net] 62,276.30 60,300.20 55,496.40 49,918.50 45,350.90
Total Operating Revenues 62,276.30 60,300.20 55,496.40 49,918.50 45,350.90
Other Income 184.30 1,485.60 5,193.00 853.40 1,463.10
Total Revenue 62,460.60 61,785.80 60,689.40 50,771.90 46,814.00
EXPENSES
Purchase Of Stock-In Trade 0.00 51.60 71.40 20.50 183.60
Operating And Direct Expenses 29,528.10 15,074.70 14,602.50 12,751.40 12,121.00
Employee Benefit Expenses 1,738.50 1,869.30 1,691.50 1,648.10 1,511.30
Finance Costs 2,912.50 3,559.00 1,409.10 1,336.40 1,652.30
Depreciation And Amortisation Expenses 12,203.40 9,543.10 7,559.70 7,231.30 6,826.70
Other Expenses 7,316.80 20,968.40 19,699.90 19,199.70 18,064.30
Total Expenses 53,699.30 51,066.10 45,034.10 42,187.40 40,359.20
Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

Profit/Loss Before Exceptional,

8,761.30 10,719.70 15,655.30 8,584.50 6,454.80
ExtraOrdinary Items And Tax
Exceptional Items -17,270.80 -679.90 0.00 -207.10 0.00
Profit/Loss Before Tax -8,509.50 10,039.80 15,655.30 8,377.40 6,454.80
Tax Expenses-Continued Operations
Current Tax 9.50 2,050.10 3,109.20 1,998.00 1,360.40
Less: MAT Credit Entitlement 121.80 1,763.10 779.00 18.00 315.50
Deferred Tax 1,867.30 2,206.30 124.60 -202.80 313.60
Tax For Earlier Years -338.90 0.00 0.00 0.00 0.00
Total Tax Expenses 1,416.10 2,493.30 2,454.80 1,777.20 1,358.50
Profit/Loss After Tax And Before
-9,925.60 7,546.50 13,200.50 6,600.20 5,096.30
ExtraOrdinary Items
Profit/Loss From Continuing Operations -9,925.60 7,546.50 13,200.50 6,600.20 5,096.30
Profit/Loss For The Period -9,925.60 7,546.50 13,200.50 6,600.20 5,096.30
Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.) -24.84 18.88 33.00 16.69 13.42
Diluted EPS (Rs.) -24.84 18.88 33.00 16.69 13.42
VALUE OF IMPORTED AND INDIGENIOUS RAW
MATERIALS
STORES, SPARES AND LOOSE TOOLS
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 399.70 543.60 1,539.00 719.50 379.80
Tax On Dividend 145.90 -70.00 58.60 62.20 0.00
Equity Dividend Rate (%) 20.00 27.00 77.00 36.00 20.00
Bharti Airtel Previous Years »

Consolidated Balance Sheet ------------------- in Rs. Cr. -------------------

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 1,998.70 1,998.70 1,987.30 1,964.50 1,898.80

Total Share Capital 1,998.70 1,998.70 1,987.30 1,964.50 1,898.80

Reserves and Surplus 65,457.60 40,298.90 59,969.10 57,791.50 48,422.90

Total Reserves and Surplus 65,457.60 40,298.90 59,969.10 57,791.50 48,422.90

Total Shareholders Funds 67,456.30 42,297.60 61,956.40 59,756.00 50,321.70

Minority Interest 6,875.00 7,446.50 4,852.50 4,210.20 4,088.60

NON-CURRENT LIABILITIES

Long Term Borrowings 89,637.30 89,774.50 45,228.30 54,991.90 61,548.50

Deferred Tax Liabilities [Net] 942.90 4,602.80 1,511.00 1,685.00 1,587.30

Other Long Term Liabilities 4,146.90 4,534.00 18,165.30 4,724.70 3,680.20

Long Term Provisions 747.10 1,859.80 624.80 1,004.40 1,054.80

Total Non-Current Liabilities 95,474.20 100,771.10 65,529.40 62,406.00 67,870.80

CURRENT LIABILITIES

Short Term Borrowings 12,944.20 5,723.80 21,138.90 20,903.90 11,412.30

Trade Payables 26,853.70 17,471.70 33,967.00 28,398.10 27,313.40

Other Current Liabilities 22,925.30 34,976.60 8,131.50 7,330.50 6,132.90

Short Term Provisions 221.50 1,256.50 206.10 172.50 183.50

Total Current Liabilities 62,944.70 59,428.60 63,443.50 56,805.00 45,042.10

Total Capital And Liabilities 232,750.20 209,943.80 195,781.80 183,177.20 167,323.20

ASSETS
NON-CURRENT ASSETS

Tangible Assets 62,008.80 73,217.20 57,915.70 59,642.90 68,843.00

Intangible Assets 82,418.10 88,778.00 92,228.30 80,971.60 68,080.80

Capital Work-In-Progress 2,394.20 4,852.20 0.00 0.00 0.00

Intangible Assets Under Development 8,444.30 972.50 0.00 0.00 0.00

Assets Held For Sale 0.00 0.00 4,564.50 0.00 0.00

Fixed Assets 155,265.40 167,819.90 154,708.50 140,614.50 136,923.80

Non-Current Investments 12,646.40 2,432.50 7,751.70 9,304.30 24.20

Deferred Tax Assets [Net] 2,626.20 764.30 5,950.20 6,262.70 5,924.50

Long Term Loans And Advances 3,101.50 10,974.50 2,332.10 2,009.10 2,056.50

Other Non-Current Assets 4,987.50 7,146.10 2,838.30 2,600.90 2,103.80

Total Non-Current Assets 212,435.20 189,137.30 173,580.80 160,791.50 147,032.80

CURRENT ASSETS

Current Investments 1,692.30 1,485.10 9,284.00 6,226.50 6,745.10

Inventories 48.80 169.10 133.90 142.20 110.90

Trade Receivables 4,983.80 5,868.10 6,725.20 6,244.10 6,643.00

Cash And Cash Equivalents 1,617.70 5,138.80 1,171.90 4,980.80 1,729.50

Short Term Loans And Advances 5,416.50 6,548.50 3,878.50 3,979.40 1,313.70

OtherCurrentAssets 6,555.90 1,596.90 1,007.50 812.70 3,748.20

Total Current Assets 20,315.00 20,806.50 22,201.00 22,385.70 20,290.40

Total Assets 232,750.20 209,943.80 195,781.80 183,177.20 167,323.20

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 23,682.80 28,229.70 55,868.00 38,098.20 21,932.10

BONUS DETAILS

Bonus Equity Share Capital 1,566.39 1,566.39 1,566.39 1,566.39 1,566.39

NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market
0.00 2,809.40 0.00 0.00 0.00
Value

Non-Current Investments Unquoted

0.00 35.70 0.00 0.00 24.20
Book Value

CURRENT INVESTMENTS

Current Investments Quoted Market

0.00 1,614.90 0.00 0.00 0.00
Value

Current Investments Unquoted Book

0.00 398.80 0.00 0.10 0.00
Value

RATIO ANALYSIS OF AIRTEL FROM 2013

TO 2017
Profitability ratio:

• GROSS PROFIT RATIO: gross profit /sales *100

• OPERATING PROFIT RATIO= operating profit/sales*100
• NET PROFIT RATIO =net profit /sales *100
• RETURN ON TOTAL ASSETS=net profit/total sales *100
• Returns to capital employed=net profit/capital*100
Mar’17 Mar’16 Mar’15 Mar’14 Mar’13

Gross Profit ratio(%) 18.44 21.21 21.39 18.16 14.65

Operating Profit ratio(%) 38.04 37.04 35.01 32.65 29.70

Net Profit ratio(%) -15.93 12.51 23.78 13.22 11.23

Return on total Assets 253.18 211.25 195.81 166.93 142.58

Return On Capital Employed(%) 7.38 11.25 17.32 12.18 12.07

Turnover ratio:
• ASSEST TURNOVER RATIO= sales or cost of goods
sold/avg. total assets
• FIXED ASSETS TURNOVER RATIO=sales or cost of
goods sold/fixedassets
• TOTAL ASSETS TURNOVER RATIO=sales or cost of
goods sold/working capital
• STOCK (or) INVENTORY TURNOVER RATIO=sales
or cost of goods sold/total assets
• RECEIVABLE (or) DEBTOR TURNOVER
RATIO=credit sales/average debtors
• INVESTMENT TURNOVER RATIO=net sales
/(shareholder’s equity+debt outstanding)

Mar’17 Mar’16 Mar’15 Mar’14 Mar’13

Stock Turnover Ratio 129.38 84.92 85.96 169.80 103.68

Debtors Turnover Ratio 17.78 16.98 20.27 22.23 20.70
11377.4 45380.4 21595.
Investments Turnover Ratio 15968.28 5903.87
0 5 67
Fixed Assets Turnover Ratio 0.69 0.79 0.85 0.86 0.82
Total Assets Turnover Ratio 0.83 0.97 0.78 0.84 0.90
Asset Turnover Ratio 0.46 0.54 0.64 0.70 0.69
•
FINANCIAL RATIOS:
• CURRENT RATIO=current assets/current liability
• LIQUID OR ACID OR QUICK RATIO=liquid
assets/current liability
• DEBT EQUITY RATIO=debt/equity

Mar’17 Mar’16 Mar’15 Mar’14 Mar’13

Current Ratio 0.60 0.65 0.73 0.93 0.65

Quick Ratio 0.70 0.66 0.75 0.98 0.75

Debt Equity Ratio 0.56 0.50 0.26 0.13 0.24

Interpretation:
✓ In profitability ratio, the gross profit ratio, operation
profit ratio, net profit ratio and return on capital are
increased and decreased eventually. Where as result on
total assets is keep on increasing.
✓ In turnover ratio the stock, fixed asset and asset
turnover ratio are increased and decreased.
✓ Debtors turnover ratio is keep on increasing gradually
from year to year and total asset turnover ratio is keep on
decreasing gradually from year to year.
✓ In financial ratio current, debt equity and quick ratio
are fluctuating by once increasing and decreasing
simultaneously.

Conclusion:
This project reports gives a viewed
picture of how AIRTEL company has molded itself
into a well established company.Good revenue growth
and EPS growth in the last 10 years.

FINANCIAL RATIO GRAPH:

1.2

0.8
Current Ratio

0.6 Quick Ratio

Debt Equity Ratio
0.4

0.2

0
Mar’17 Mar’16 Mar’15 Mar’14 Mar’13
PROFITABILITY RATIO GRAPH:
300

250

Gross Profit ratio(%)

200
Operating Profit ratio(%)
150
Net Profit ratio(%)

100
Return on total Assets

50 Return On Capital
Employed(%)

0
Mar’17 Mar’16 Mar’15 Mar’14 Mar’13

-50

TURNOVER RATIO GRAPH:

50000
45000
40000
35000
30000
25000
Mar’17
20000
15000 Mar’16
10000 Mar’15
5000
Mar’14
0
Mar’13