MALAVIYA NATIONAL INSTITUTE OF TECHNOLOGY JAIPUR

DEPARTMENT OF MANAGEMENT STUDIES

Comparing a company’s ratios over time show if a company is changing, for the better or for
worse. Comparing ratios among different companies bring a company’s particular
characteristics into focus. This uses ratios to identify companies by comparing their
similarities and differences between companies within the same sector.

Submitted by: Submitted to:

Harsh Nangia Dr.Shridev Devji
2021PBM5030 Assistant Professor
In this assignment I have given a comparison between the important Financial Ratios of BAJAJ
ELECTRICALS of year 2020 with 2021 of the same. Similarly, for the HAVELLS INDIA of year 2020
with 2021. And then a comparison between the two of these companies. As they produce the
same segment product so the comparison between them will be very informative.
There are various financial ratios a company reveals in its financial report annually. But some of
them are very useful for the invertors and for the company itself to know. These ratios can be
compared for the consecutive year in order to know about the performance of the company.
The following ratios are, figures are in (In Rs. Crore)

Profitability Ratios
 Return on Net worth/Equity Ratio: - Return on equity (ROE) is a measure of
financial performance calculated by dividing net income by shareholders' equity.
Because shareholders' equity is equal to a company’s assets minus its debt, ROE is
considered the return on net assets.
  Return on Net Worth = Annual Net worth of the company/ shareholders equity
capital. 

RETURN ON NET WORTH/EQUITY (%)

BAJAJ ELECTRICALS HAVELLS INDIA
Mar-21 Mar-19 Mar-21 Mar-20
11.52 15.63 20.13 17.03

% change in Bajaj Electricals from (19-21) = 35.67

% difference in Bajaj Electricals w.r.t Havells = 74.7 negative

 Return on Capital Employed: - Return on capital employed (ROCE) is a financial

ratio that can be used to assess a company's profitability and capital efficiency. In other
words, this ratio can help to understand how well a company is generating profits from
its capital as it is put to use.
 ROCE=EBIT/ Capital Employed where:
EBIT=Earnings before interest and taxCapital Employed=Total assets − 
Current liabilities

RETURN ON CAPITAL EMPLOYED (%)

BAJAJ ELECTRICALS HAVELLS INDIA
Mar-21 Mar-20 Mar-21 Mar-20
16.36 9.04 27.06 21.40
 % change in Bajaj Electricals from (20-21) = 80.97
% difference in Bajaj Electricals w.r.t Havells(2021)= 38.76

 Return on Assets Ratio: - Return on assets (ROA) is an indicator of how profitable a

company is relative to its total assets. ROA gives a manager, investor, or analyst an idea
as to how efficient a company's management is at using its assets to generate earnings.
The formula for ROA is:

 ROA=Net Income/ Average Total Assets 

RETURN ON ASSETS (%)

BAJAJ ELECTRICALS HAVELLS INDIA
Mar-21 Mar-20 Mar-21 Mar-20
139.06 120.13 82.50 68.78
% change in Bajaj Electricals from (19-21) = 15.75
% difference in Bajaj Electricals w.r.t Havells(2021)= 68.55

Liquidity Ratios
 Current Ratio: - The current ratio is a liquidity ratio that measures a company’s ability
to pay short-term obligations or those due within one year. It tells investors and analysts
how a company can maximize the current assets on its balance sheet to satisfy its
current debt and other payables.
 Current Ratio= Current Assets/ Current Liabilities
CURRENT RATIO
BAJAJ ELECTRICALS HAVELLS INDIA
Mar-21 Mar-20 Mar-21 Mar-20
1.31 1.09 1.57 1.32

% change in Bajaj Electricals from (20-21) = 20.18

% difference in Bajaj Electricals w.r.t Havells(2021)= 16.56 negative

 Quick Ratio: - The quick ratio is an indicator of a company’s short-

term liquidity position and measures a company’s ability to meet its short-term
obligations with its most liquid assets.
 Quick Ratio= (Current Assets- Inventory)/ Current Liabilities
 QUICK RATIO
BAJAJ ELECTRICALS HAVELLS INDIA
Mar-21 Mar-20 Mar-21 Mar-20
1.14 1.37 0.77 0.63

% change in Bajaj Electricals from (19-21) = 20.17 negative

% difference in Bajaj Electricals w.r.t Havells(2021)=48.05

Management Efficiency Ratios

Inventory Turnover Ratio:- Inventory turnover is a financial ratio showing how
many times a company has sold and replace inventory during a given period. A
company can then divide the days in the period by the inventory turnover formula to
calculate the days it takes to sell the inventory on hand.

.Inventory Turnover= Net Sales/ Average Inventory at Selling Price

Inventory Turnover Ratio
BAJAJ ELECTRICALS HAVELLS INDIA
% Mar-21 Mar-20 Mar-21 Mar-20
4.71 7.21 3.98 5.04

change in Bajaj Electricals from (20-21) = 53.07 negative

% difference in Bajaj Electricals w.r.t Havells(2021)= 18.34

Total Asset Turnover Ratio:- The total asset turnover ratio measures the
efficiency of a company's assets to generate revenue or sales. It compares the
dollar amount of sales or revenues to its total assets. The asset turnover ratio
calculates the net sales as a percentage of its total assets.
TATR= Net sales/ Average Total Assets
Total Asset Turnover
BAJAJ ELECTRICALS HAVELLS INDIA
Mar-21 Mar-20 Mar-21 Mar-20 %
2.46 2.35 2.53 3.30

change in Bajaj Electricals from (20-21) = 4.44

% difference in Bajaj Electricals w.r.t Havells(2021)= 2.76 negative

REFERENCES
All the data has been taken from the yearly financial ratios of the individual companies.