Indus Motor

2011 2010 2009

1. Liquidity Ratio
Current Ratio Current
= Assets = 22,587,737 = 1.8422 23,138,278 = 1.6266 16,715,319 = 1.691
Current
Liabilities 12,260,958 14,224,866 9,884,850

In year 2011 Indus Motor company Limited is in very strong position if you compare this to the previous years you can
easily to reach the decision that 2011 is the best year and 2010 year is not satisfactory.
C.A -
Quick Ratio = Inventory = 22,587,737 - 5,690,052 23,138,278 - 5,198,367 16,715,319 - 4,088,858
Current
Liabilities 12,260,958 14,224,866 9,884,850
= 16,897,685 = 17,939,911 = 12,262,461
12,260,958 14,224,866 9,884,850
= 1.37817 = 1.2611656 = 1.2405308

The quick ration is 1:1 and you can see in 2009 the company has over quick assets which goes idol but in 2011 it is good
because it is very close to an ideal ratio.
Net working C.A - C.L = 22,587,737 - 12,260,958 23,138,278 - 14,224,866 16,715,319 - 9,884,850
Total
capital Ratio = Assets 26,834,618 = 27,138,278 = 20,685,523
= 10,326,779 8,913,412 6,830,469
26,834,618 27,138,278 20,685,523
= 0.3848305 = 0.3284443 = 0.3302053

If the net working capital ratio is less it is benefited for the company its means the company is spending less and getting
more products.
Cash &
Cash Ratio = cash equiv = 8,812,199 = 0.7187 15,755,980 = 1.1076 9,731,166 = 0.9845
Current
liabilities 12,260,958 14,224,866 9,884,850

Cash ratio measures the immediate amount of cash available to satisfy short-term liabilities. A cash ratio of 0.5:1 or higher
is preferred. So in this position 2010 is the most stable year for the company.
Operating Operating
Ratio = Expense = 355,796 = 0.236 416,106 = 0.2317 156,479 = 0.2152
Operating
Income 1,507,878 1,796,075 727,080
 A high or increasing operating margin is preferred because if the operating margin is increasing, the company is earning
more per dollar of sales. And in this situation operating ratio is incresing in 2011.
Operating
Opeating Exp Expense = 355,796 = 0.0058 416,106 = 0.0069 156,479 = 0.0041
Total Net
to Sales = Sales 61,702,677 60,093,139 37,864,604

The operating expenses to sales ratio give an indication of the efficiency of the cost structure of the business. And according
to this 2010 is the most efficient year for the company.

2. Asset Ratio
Total
Inventory Sales = 61,702,677 = 11.334 60,093,139 = 12.941 37,864,604 = 11.258
Turnover Average
ratio= Inventory 5,444,210 4,643,613 3,363,244

In all the years the company has high turnover which is a good sign for company it means company earning a lot of profit
and that has overcome its expenses.
Total
Fixed Asset Sales = 61,702,677 = 14.602 60,093,139 = 18.077 37,864,604 = 9.6238
Turnover Fixed
Ratio= Assets 4,225,710 3,324,333 3,934,473

The ratio is growing year by year which is a good sign it means if company want to take some extra debts that can take
because company has very good ratio. But unfortunately, this ratio is decreased in 2011 by a very large margin.
Total
Total Asset Sales = 61,702,677 = 2.2994 60,093,139 = 2.2143 37,864,604 = 1.8305
Turnover Total
Ratio= Assets 26,834,618 27,138,278 20,685,523

The company’s total asset turnover ratio is very good it has minimum ratio in 2009 and maximum ratio in 2011 it means the
company ratio is growing up steady which is a good sign. It means the company utilizing its fewer resources and getting
high profit.
Total
Assets To Assets = 26,834,618 = 1.9005 27,138,278 = 2.156 20,685,523 = 2.0089
Owners’
Equity Ratio = Equity 14,119,648 12,587,615 10,296,973

This ratio provides a good picture of a company’s strength. Investors, and those considering lending money to a company,
look at the asset/equity ratio to help determine if a company is a good investment or is over-extended with credit.

3. Profitability Ratio

Net
Return on Income = 2,743,384 = 0.1017 3,443,403 = 0.144 1,385,102 = 0.0805
 Average
Asset Ratio= Assets 26,986,448 23,911,901 17,216,816

Return on Equity varies substantially across different industries. Therefore, it is recommended to compare return on equity
against company's previous values or return of a similar company.

Net
Return on Income = 2,743,384 = 0.2054 3,443,403 = 0.3009 1,385,102 = 0.1404
Average
Equity Assets= Owners' 13,353,634 11,442,294 9,866,657

Net
Profit Margin Income = 2,743,384 = 0.0445 3,443,403 = 0.0573 1,385,102 = 0.0366
Total Net
Ratio= Sales 61,702,677 60,093,139 37,864,604

The company’s profit marging ratio result is very proficient because in 2009 the company’s ratio was very low but with
passing of year it gain very good result and in 2010 it got very good result.

Basic earning EBiT = 4,011,455 = 0.1495 5,242,539 = 0.1932 2,046,013 = 0.0989

Total
Ratio= Assets 26,834,618 27,138,278 20,685,523

The basic earnings ratio compares earnings apart from the influence of taxes or financial leverage, to the assets of the
company.

4. Debt Ratio

Total
Total Debt Liabilities = 12,714,970 = 0.4738 14,550,663 = 0.5362 10,388,550 = 0.5022
Total
Ratio= Assets 26,834,618 27,138,278 20,685,523

In all years the company has very satisfactory debt ratio but in 2011 it is not good it means that company has more self-
proportion in the investment that should take more money as a loan and in other years company has good ration that can
take ratio without any hesitation.

Interest EBiT = 4,011,455 = 8.6731 5,242,539 = 13.739 2,046,013 = 5.8084

Coverage Interest
Ratio= Expense 462,517 381,575 352,249

The lower the ratio, the more the company is burdened by debt expense. So the ideal yeat in this ratio is 2009.
 Total
Debt/ Equity Liabilities = 12,714,970 = 0.9005 14,550,663 = 1.156 10,388,550 = 1.0089
Owners'
Ratio= Equity 14,119,648 12,587,615 10,296,973

5. Market Ratio

Net
EPS Ratio = Income = 2,743,384 = 0.0349 3,443,403 = 0.0438 1,385,102 = 0.0176
Avg No.
of Stocks 78,600,000 78,600,000 78,600,000

Earnings per share are generally considered to be the single most important variable in determining a share's price.
Book
value/
Price to share = 179..63 = 5.147 160..14 = 3.6562 131 = 7.4347
Market
Earnings value/
Ratio= share 34..90 43..80 17..62

Companies with high P/E ratios are more likely to be considered risky investments than those with low P/E ratios because a
high P/E ratio means high expectations for a company’s potential earnings growth. Since P/E ratio varies from industries to
industries, it is more valuable to comparing P/E ratios of companies within the same industry or against a company’s
historical P/E ratios.
Dividend
Dividend Paid = 1,174,056 = 0.428 1,174,263 = 0.341 510,853 = 0.3688
Net
Payout Ratio= Income 2,743,384 3,443,403 1,385,102

Large slow-growth companies, or companies like utility companies, are likely to pay out larger dividends to shareholders.
These companies will have a higher payout ratio. And in this situation company is paying dividends according to their
growth.