Return on investment ratios

Return on net worth ratio:A measure of a corporation's profitability; ROE reveals how much profit a company generates with the money shareholders have invested. Also known as return on net worth (RONW). Return on net worth = (PAT Preference Dividend * 100) / Equity Share Holders Fund Where, Equity Share Holders Fund = Equity Share Capital + Preference Share Capital + Reserves And Surplus Misc Expense not written off. Return on investment ratio.

RONW= PAT Preference Dividend * 100 Equity Share Holders Fund

2011

2010

= (8759167.533 * 100) / 19345493

= (8305782 * 100) / 16360734

= 45% Note:-

= 50.7%

1. PAT is taken after considering delayed completion of project. 2. There is no preference dividend. 3. Equity capital is taken excluding forfeited share. 4. There is no misc expense.

Solvency ratio:NAV Ratio:An expression for net asset value that represents a fund's (mutual, exchange-traded, and closed-end) or a company's value per share. It is calculated by dividing the total net asset value of the fund or company by the number of shares outstanding.

Also referred to as "book value per share". Calculated as:

NAV =

2011 = (19345493) / 500000 = 38.69RS.

2010 = 16382697 / 500000 = 32.76 RS.

Debt Equity Ratio:

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.

Note: Sometimes only interest-bearing, long-term debt is used instead of total liabilities in the calculation.

Also known as the Personal Debt/Equity Ratio, this ratio can be applied to personal financial statements as theyll as corporate ones. Debt equity ratio 2011 = 77357066 /19345493 = 3.99 times 2010 = 79025311 /16382697 = 4.8 times

Note:In calculation of long term loan debentures term loan is taken. While calculating total net worth forfeited shares are not considered. Here in our case only interest-bearing, long-term debt is used instead of total liabilities.

Interest coverage ratio:

A ratio used to determine how easily a company can pay interest on outstanding debt. The interest coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) of one period by the company's interest expenses of the same period:

ICR

2011

2010

=17582599.53 / 6967300

= 16879060.12/ 1228020.65

= 2.52times = 1.37 times Notes:1. Interest on debt term is taken. 2. Depreciation is on revalued amount.

Liquidity ratio:
1. In corporate finance, it is the amount of cash flow available to meet annual interest and principal payments on debt, including sinking fund payments. 2. In government finance, it is the amount of export earnings needed to meet annual interest and principal payments on a country's external debts. 3. In personal finance, it is a ratio used by bank loan officers in determining income property loans. This ratio should ideally be over 1. That would mean the property is generating enough income to pay its debt obligations.

In general, it is calculated by:

A liquidity ratio that measures a company's ability to pay short-term obligations.

Current Ratio
The Current Ratio formula is:

Also known as "liquidity ratio", "cash asset ratio" and "cash ratio". 2011 2010 Current ratio = 65927131 / 14187417 = 0.46 = 64785444 / 13584570 = 0.47

Quick ratio:
An indicator of a company's short-term liquidity. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company.

The quick ratio is calculated as:

Also known as the "acid-test ratio" or the "quick assets ratio".

Quick ratio

2011

2010

= (65927131 - 32483580) /14187417

= 6485444-2906368 /13584570

= 2.35

= 2.63

The ratio measures the credit period allot to the customers on credit sales or how fast a company realises its outstanding dues. It is also known as days sales in receivables ratio. Collection period allotheyd to customers = (receivables * 365)/ credit sales Notes:1. Calculation of this ratio is not applicable as none credit sales are allothed in this company.

COLLECTION PEROD 2011 =RECEVABLES*365/CREDIT SALES =32002714*365 / 194829122.5 = 71DAYS. = 35062016*365/ 179345245.9 = 60DAYS. 2010

Suppliers credit This ratio measures the average credit period availed by a company from its suppliers on credit purchase or how much leverage it possesses to settle its outstanding payables. Also known as days purchases in payables ratio. Suppliers credit (days) = payables*365/credit purchases 2011 2010

=12723633*365 / 149318259.5 = 31DAYS.

= 12223633*365/ 144966681.2 = 31DAYS.

Notes:1. Calculation of this ratio is not applicable as no credit purchases are therefor this company.

Inventory holding period

The ratio measures the period of the inventory build up or the number of days that cash is blocked in the inventory or how fast the company is able to convert its inventory into cash or near cash. Inventory holding period (days) = Inventory * 365 /COGS Where, COGS=opening stock + purchase + direct expense related to purchase closing stock. Inventory holding period = Inventory * 365 /COGS 2011 =30747174.08 * 365 / 167878107.4 =66 days 2010 =20792916*365/153543474.4 = 50 days

Resource turnover ratio:Fixed asset turnover ratio:-

A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio measures a company's ability to generate net sales from fixed-asset investments - specifically property, plant and equipment (PP&E) - net of depreciation. A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues. The fixed-asset turnover ratio is calculated as:

Fixed assets turnover ratio

2011

2010

= 38969.23 / 24032.07

= 57402.88 / 26255.90

= 1.6215 times

= 2.1862 times

Net worth turnover ratio:

The ratio measures the extent of turnover or volume of gross income generated by the net worth of a company. In other words, it is the efficiency in the resources utilisation from the angle of residual interest that is equity share holder. Net worth turnover ratio = net sales/ net worth Net worth turnover 2011 2010

= net sales/ net worth

= (194829122.5/30775428)

= (17934524.9/30600601)

= 6.33 times

= 5.8 times

Profitability ratio:

Gross Profit Marg1in GROSS PROFIT*100 = SALES Indicates what the company's pricing policy is and what the true mark-up margins are. Gross profit margin 2011 2010

GROSS PROFIT*100 = SALES

= 27836899.39 * 100 / = 194829122.5 = 14.29 %

2663903248

*100

/179345245.9 = 14.85 %