1

PROJECT REPORT

ON

RATIO ANALYSIS

AT

PITAARA COMPANY

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE

AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

2022 – 2024

SUBMITTED BY:

AVI SHARMA

ROLL No. 2203104011

UNIVERSITY SCHOOL OF MANAGEMENT STUDIES

RAYAT BAHRA UNIVERSITY, MOHALI

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CERTIFICATE
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DECLARATION

I, Avi Sharma hereby declare that the project report entitled “Ratio Analysis” is a record of
independent work carried out by me under supervision and guidance of Coordinator, Meenakshi,
Department of Management Studies, The information and data given in the report is authentic to the
best of my knowledge. The report has not been previously submitted for the award of any Degree,
Diploma, Associating or other similar title of any other university or institute.

Place: Mohali
Date: 30/11/23
Avi Sharma
2203104011
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ACKNOWLEDGEMENT

I would like to take the opportunity to express my sincere gratitude to all people who have helped me with
sound advice and able guidance.

Above all, I express my eternal gratitude to the Lord Almighty under whose divine guidance, I have been
able to complete this work successfully.

I would like to express my sincere obligation to Dr. Prof. Balvir Lal, Management School, Rayat Bahra
University providing various facilities.

I am thankful to Mr Ajeet sidhu, Co-ordinator Management Department for providing pro help and
encouragement in the preparation of this report.

I am thankful to Prof Pooja mahajan the Class incharge for her cordial support, valuable information and
guidance, which helped me in completing this task through various stages.

I would like to express my gratitude to all the faculties of the Department for their interest and cooperation
in this regard. I extent my hearty guidance to the librarian and other library staffs of my college for their
wholehearted cooperation

Cooindator sign
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CONTENTS

CHAPTER PARTICULARS PAGE NO.

1 STUDENT DECLARATION

2 ACKNOWLEDGEMENT

3 EXECUTIVE SUMMARY

4 CHAPTER-1 INTRODUCTION

5 CHAPTER2: REVIEW OF LITERATURE

6
CHAPTER3: RESEARCH METHODOLOGY

7
CHAPTER4: DATA ANAYLSIS AND
INTERPRETATION

8
CHAPTER5: FINDINGS,SUGGESTIONS AND
CONCLUSION
9
BIBLIOGRAPY
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CHAPTER 1: INTRODUCTION
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INTRODUCTION

INTRODUCTION TO RATIO ANALYSIS

A ratio analysis is a quantitative analysis of information contained in a company’s financial statements.

Ratio analysis is based on line items in financial statements like the balance sheet, income statement and
cash flow statement; the ratios of one item – or a combination of items - to another item or combination
are then calculated. Ratio analysis is used to evaluate various aspects of a company’s operating and
financial performance such as its efficiency, liquidity, profitability and solvency. The trend of these
ratios over time is studied to check whether they are improving or deteriorating. Ratios are also
compared across different companies in the same sector to see how they stack up, and to get an idea of
comparative valuations. Ratio analysis is a cornerstone of analysis. Ratio analysis refers to the analysis
and interpretation of the figures appearing in the financial statements (i.e., Profit and Loss Account,
Balance Sheet and Fund Flow statement etc.). It is a process of comparison of one figure against
another. It enables the users like shareholders, investors, creditors, Government, and analysts etc. to get
better understanding of financial statements.

DEFINITION: Khan and Jain define the term ratio analysis as “the systematic use of ratios to interpret
the financial statements so that the strengths and weaknesses of a firm as well as its historical
performance and current financial conditions can be determined.”

ADVANTAGES OF RATIO ANALYSIS

1. Forecasting and Planning: The trend in costs, sales, profits and other facts can be known by
computing ratios of relevant accounting figures of last few years. This trend analysis with the
help of ratios may be useful for forecasting and planning future business activities.
2. Budgeting: Budget is an estimate of future activities on the basis of past experience. Accounting
ratios help to estimate budgeted figures. For example, sales budget may be prepared with the
help of analysis of past sales.
3. Indication of Overall Profitability: The management is always concerned with the overall
profitability of the firm. They want to know whether the firm has the ability to meet its short-
term as well as long-term obligations to its creditors, to ensure a reasonable return to its owners
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and secure optimum utilization of the assets of the firm. This is possible if all the ratios are
considered together.
4. Indication of Liquidity Position: Ratio analysis helps to assess the liquidity position i.e., short-
term debt paying ability of a firm. Liquidity ratios indicate the ability of the firm to pay and help
in credit analysis by banks, creditors and other suppliers of short-term loans.
5. Aid to Decision-making: Ratio analysis helps to take decisions like whether to supply goods on
credit to a firm, whether bank loans will be made available etc.

LIMITATIONS OF RATIO ANALYSIS

1. Ratios Account for one Variable: Since ratios account for only one variable, they cannot always
give correct picture since several other variables such Government policy, economic conditions,
availability of resources etc. should be kept in mind while interpreting ratios.
2. Limitations of Financial Statements: Ratios are calculated from the information recorded in the
financial statements. But financial statements suffer from a number of limitations and may,
therefore, affect the quality of ratio analysis.
3. Changes in Price Level: Fixed assets show the position statement at cost only. Hence, it does not
reflect the changes in price level. Thus, it makes comparison difficult.
4. Different Accounting Policies: Different accounting policies regarding valuation of inventories,
charging depreciation etc. make the accounting data and accounting ratios of two firms non-
comparable.

INTRODUCTION TO PITAARA COMPANY

Overview

Punjab’s first movie satellite TV channel that has captivated 1.3 billion viewers worldwide, Pitaara TV,
stands tall as the ultimate global entertainment destination. With a dedicated team crafting extraordinary
content, we curate a vast array of TV shows, films, and digital experiences. Join us on an exciting
entertainment journey as we continue to redefine the boundaries of entertainment.
Pitaara offers something for every section of the audience.
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Not just movies, Pitaara is a complete package of entertainment with music, and celebrity chit-chat
shows featuring all the who’s who of the Punjabi entertainment industry.

Pitaara has the biggest catalogue of Punjabi movies with the biggest blockbusters such as Ardab
Mutiyaran, Chal Mera Putt, Carry On Jatta 2, Aaja Mexico Challiye, making it the first choice for the
lovers of Punjabi cinema. Pitaara also caters to global audiences through its availability in Canada, the
UK and the US. We at Pitaara would like to thank all our viewers for their constant and ever-growing
love and support over the years with a promise to entertain you more.

Vision
To be the foremost entertainment channel for Punjabis and the Punjabi diaspora

Mission
To satisfy our audience with creative, innovative and quality content matching their taste.

PURPOSE

Bringing Movies Home

At Pitaara TV, our aim is to bring the magic of movies directly to your home. Understanding the
power of storytelling and the joy of great cinematic experiences, we strive to curate a captivating
collection of films that will transport you to different worlds, evoke emotions, and ignite your
imagination. Latest blockbusters, timeless classics, or hidden gems – we have it all to ensure
exceptional cinematic entertainment you can enjoy from the comfort of your living room.

MANAGING DIRECTOR

Mr. Sandeep Bansal

The channel is under the leadership of Mr. Sandeep Bansal, (Managing Director) who with over a
quarter of a century of experience in the Media, Entertainment and Broadcasting Industry is also among
the pioneers in the evolution of Cable & Satellite Business. Mr. Bansal has spearheaded the channel’s
growth in the last 4 years from a new entry in the market into a well-established channel, available on all
DTH and cable channels. Pitaara is also available internationally in Canada, UK, and the US.
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CHAPTER 2: REVIEW OF LITERATURE

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INTRODUCTION:

A literature review is a critical and in-depth evaluation of previous research. It is a summary and synopsis of
a particular area of research, allowing anybody reading the paper to establish why the study is pursuing this
particular research. A good literature review expands on the reasons behind selecting a particular research
question. A literature review is likewise not a collection of quotes and paraphrasing from other sources. A
good literature review should critically evaluate the quality and findings of the research.

Maria Zain (2018), in this article he discusses about the return on assets is an important percentage that
shows the company’s ability to use its assets to generate income. He said that a high percentage indicates
that company’s is doing a good utilizing the company’s asset to generate income. He notices that the
following formula is one method of calculating the return on assets percentage. Return on Assets = Net
Profit/Total Assets. The net profit figure that should be used is the amount of income after all expenses,
including taxes.

James Clausen (2018), in this article expresses about the liquidity ratio. He Pronounce that it is analysis of
the financial statements is used to measure company performance. It also analyses of the income statement
and balance sheet. Investors and lending institutions will often use ratio analyses of the financial statements
to determine a company’s profitability and liquidity. If the ratios indicate poor performance, investors may
be reluctant to invest. Therefore, the current ratio or working capital ratio, measures current assets against
current liabilities

Gopinathan Thachappilly (2018), in his studies, states that the Liquidity Ratios help Good Financial. He
knows that a business has high profitability, it can face short-term financial problems and its funds are
locked up in inventories and receivables not realizable for months. Any failure to meet these can image its
reputation and creditworthiness and in extreme cases even lead to bankruptcy

Al-Aameri and Alrikabi (2019) was focusing on one of the important techniques in financial analysis,
namely, the financial ratios, for the purpose evaluating the performance of petroleum projects company, and
to find out the main strength and weakness points, so as to suggest the remedial actions for treatment of
negative points and enhance the positive one. The papers contains detail study for the data included in
financial statements to explain the financial performance of the company, and that will help the management
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for planning the future according to the previous performance, and also contain the converting process of the
data of financial statements to meaningful information through several techniques, the financial statement
analysis among them.

Lucia Jenkins (2019), Understanding the use of various financial ratios and techniques can help in gaining a
more complete picture of a company's financial outlook. He thinks the most important thing is fixed cost and
variable cost. Fixed costs are those costs that are always present, regardless of how much or how little is
sold. Some examples of fixed costs include rent, insurance and salaries. Variable costs are the costs that
increase or decrease in ratios proportion to sales.

M. Ganga (2020) on the evaluation of financial performance of Equitas Micro Finance Private Limited in
Chennai. According to them financial analysis is important to plan and control the firm’s financial resources.
They adopted various research techniques to find the evaluation of financial performance of the
organization. They found that the managers must concentrate on gray area which would be useful for future
growth of the company.

Dr. M. Ravichandran (2020) the financial performance can be measured by using various financial tools
such as profitability ratio, solvency ratio, comparative statement, etc. Based on the analysis, findings have
been arrived that the company has got enough funds to meet its debts & liabilities, the income statement of
the company shows sales of the company increased every year at good rate and profit also increased every
year.

Gopinathan Thachappilly (2020), in this article he discusses about the Financial Ratio Analysis for
Performance evaluation. Its analysis is typically done to make sense of the massive number of numbers
presented in company financial statements. It helps evaluate the performance of a company, so that investors
can decide whether to invest in that company.
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CHAPTER 3:
RESEARCH METHODOLOGY
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CHAPTER 3 – RESEARCH METHODOLOGY

3.1 INTRODUCTION

Research Methodology is a systematic way to solve a research problem. It includes various steps that are
generally adopted by a researcher in studying the problem along with the logic behind them. The present
study was conducted at Pitaara tv. The study depends mainly on the secondary data namely the annual
reports of the company. Five years annual reports had been collected from the company. Data had also been
collected from text books, journals, newspapers, magazines and internet.

3.2 STATEMENT OF THE PROBLEM

Ratio analysis is used to evaluate various aspects of a company’s operating and financial performance such
as its efficiency, liquidity, profitability and solvency. The trend of these ratios over time is studied to check
whether they are improving or deteriorating. Ratio analysis is widely used as a powerful tool of financial
statement analysis to check the company’s operations or financial performance is difficult task by some
other tools for the company. So, the study on ratio analysis at Pitaara tv is taken as the study to measure the
performance of the company.

3.3 OBJECTIVES THE STUDY

Primary objective
To study on ratio analysis towards the Pitaara tv.

Secondary objectives
 To study the short-term liquidity positions of company.
 To study the efficiency of inventory management.
 To study the effectiveness of credit management of the company.
 To analyze the long-term solvency of the business concern.
 To study how best the working capital is utilized in the company.

3.4 SCOPE OF THE STUDY

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 The scope of the study defined below in terms of concept adopted and period under focus.
 The study of management of working capital at Pitaara tv.
 Thus, the whole purpose of the project is to analyze the past and present performance of the company
on various financial areas like cash, inventories and receivables.
 Since the past performance data essential for predicting future planning process.

3.5 RESEARCH DESIGN

“A Research Design is the arrangement of conditions for collection and analysis of data in a manner that
aims to combine relevance to the research purpose with the economy in procedure”. In fact, the research
design is the conceptual structure with in which research is conducted; it constitutes the blue print for the
collection, measurement and analysis of data, the research design utilized in this study is analytical research.

3.6 PERIOD OF STUDY

The duration taken by the researcher for the data collection and analysis regarding the ratio analysis of
pitaara tv. for three months. The data used are of last four years from 2019 – 2022.

3.7 METHOD OF COLLECTION

The study basically uses primary and secondary data. Primary data means data which is fresh collected data.
Secondary data means the data that are already available. Generally speaking, secondary data is collected by
some organizations or agencies which have already been processed when the researcher utilizes secondary
data. The process of secondary data collection and analysis is called desk research.

3.8 TOOLS USED

RATIO ANALYSIS
A ratio is the quotient of two mathematical expressions and the relationship between two or more numbers.
In financial analysis, a ratio is used as an index or yardstick for evaluating the financial position and
performance of a firm. The relationship between the two accounting figures expressed mathematically is
known as a financial ratio. It involves comparison for a useful interpretation of the financial statements and
it should be compared with some standards
 Current ratio
 Quick ratio
 Cash ratio 17

 Inventory turnover ratio

 Receivable turnover ratio
 Return on Equity Ratio

 Return on Total Assets Ratio

 Profit Margin Ratio
 Fixed Interest Coverage Ratio
 Debt Ratio
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CHAPTER 4:
DATA REPRESENTATION & ANALYSIS
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CHAPTER 4: DATA REPRESENTATION & ANALYSIS

4.1 DATA REPRESENTATION & INTERPRETATION

2021-2022 2020-2021 2019-2020

Item/Year 2018-2019

Current Assets 1,195,835,700 1,228,275,200 1,362,648,300 1,163,336,400

Current Liabilities 1,397,398,500 1,447,750,600 1,427,782,700 1,152,886,200

Inventories 374,527,800 390,015,900 424,296,200 352,953,800

Cash 441,588,100 410,723,400 492,394,200 509,206,700

Receivables 111,726,900 189,961,700 198,933,000 140,755,500

3,140,802,100
Total Assets 2,987,119,900 3,235,937,200 2,666,646,000

Total Liabilities 2,542,767,400 2,429,052,500 2,321,989,900 2,127,803,800

Total Equity 589,801,200 552,738,700 908,589,800 534,197,000

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Sales 2,594,251,200 2,993,662,400 2,882,951,100 2,656,495,100

1,651,970,900
Cost of Goods Sold 1,978,855,800 1,869,682,900 1,670,895,400

-201,422,500 -203,091,700 -115,737,500 -63,956,100

EBIT

72,553,100 57,586,000 46,365,000 42,365,700

Interest

-113,940,300 -293,142,700 66,660,800 61,210,500

Net Income/Loss

*Amounts in Thousands

LIQUIDITY ANALYSIS

Liquidity analysis aims to determine the ability of a business to meet its financial
obligations during the short-term and to maintain its short-term debt paying ability.
(Thakur) The liquidity ratios answer the question of whether a business firm can meet its
current debt obligations with its current assets. (CARLSON, 2020)

1. Current Ratio

The Current ratio is also known as working capital ratio or banker’s ratio. It expresses the
relationship of a current asset to current liabilities.

Current Ratio = Current Assets / Current Liability

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Financial Year Current Current Current ratio

Assets Liabilities

2022 1,195,835,700 1,397,398,500 0.85

2021 1,22,82,75,200 1,44,77,50,600 0.85

2020 1,36,26,48,300 1,42,77,82,700 0.95

2019 1,16,33,36,400 1,15,28,86,200 1.01

Current ratio
1.05

1.00

0.95

0.90
Current ratio
0.85

0.80

0.75
2022 2021 2020 2019

INTERPRETATION: Out of the four years, 2018-2019 had the highest current ratio. As shown
in the graph, it has fallen at a constant rate to 0.85. It demonstrates how liquidity has dropped
significantly since 2019, with a ratio difference of 0.169.
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2. Quick Ratio

Quick ratio is also known as the Acid test ratio. The quick ratio measures whether the firm can
meet its short-term debt obligations without selling any inventory. (CARLSON, 2020)

Quick Ratio = Current assets – Inventories / Current liabilities

Financial Current assets – Current Quick

Year Inventory Liabilities Ratio

2022 82,13,07,900 1,397,398,500 0.58

2021 83,82,59,300 1,44,77,50,600 0.58

2020 93,83,52,100 1,42,77,82,700 0.65

2019 81,03,82,600 1,15,28,86,200 0.7

Quick Ratio
0.8
0.7
0.6
0.5
0.4
0.3
0.2
Quick Ratio
0.1
0

2022202120202019
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INTERPRETATION: This diagram shows the drastic fall of quick ratio of the corporation
from 0.7 to 0.28 since 2019-2020. It means that the company's ability to meet its short-term
obligations is deteriorating.

3.Cash Ratio

This ratio gives a more conservative view of the firm's liquidity since it uses only cash and cash
equivalents, such as short-term marketable securities, in the numerator. It indicates the ability of
the firm to pay off all its current liabilities without liquidating any other assets. (CARLSON,
2020)

Cash Ratio Formula = Cash + Marketable Securities / Current Liability

Year end Total Cash Current Total

Liabilities

2022 44,15,88,100 1,39,73,98,500 0.31

2021 41,07,23,400 1,44,77,50,600 0.28

2020 49,23,94,200 1,42,77,82,700 0.34

2019 50,92,06,700 1,15,28,86,200 0.44

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Cash Ratio
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15 Cash Ratio
0.1
0.05
0

2022202120202019

INTERPRETATION: This graph shows that liquidity has declined over time from 0.44 to
0.28, which can cause problems with bill repayment, but it has marginally recovered in 2022.

EFFICIENCY ANALYSIS

Efficiency analysis measures activity or turnover ratios to assess how effectively a company's
assets are being used to produce revenue and increase profit or shareholder capital. They assess
the internal and short-term efficiency of a company's operations.

1.Inventory Turnover Ratio

This ratio indicates how easily inventory is sold, restocked, or turned over during the year. The
inventory turnover ratio helps to see if the company is running out of stock or has obsolete
inventory.

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

Financial COGS Inventory Inventory turnover

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year Ratio

2022 1,65,19,70,900 37,45,27,800 4.41

2021 1,97,88,55,800 39,00,15,900 5.07

2020 1,86,96,82,900 42,42,96,200 4.4

2019 1,67,08,95,400 35,29,53,800 4.73

Inventory turnover Ratio

5.2

4.8

4.6
Inventory turnover Ratio

4.4

4.2

2022 2021 2020 2019

INTERPRETATION: In this graph, the company's operations are seen to be inconsistent. With
a rate of 4.40 in 2017-2018, it fell slightly before rapidly rising to 5.07 and then dropping to 4.41
in 2021-2022. It demonstrates that the company's operation has been volatile and that
consistency is needed.
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2. Receivables turnover ratio

The Receivable turnover ratio also called the Debtor’s turnover ratio shows how many times the
receivables were turned into cash during the period.

Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable

Year Sales Receivables Receivable

Turnover Ratio

2022 2,59,42,51,200 11,17,26,900 23.22

2021 2,99,36,62,400 18,99,61,700 15.75

2020 2,88,29,51,100 19,89,33,000 14.49

2019 2,65,64,95,100 14,07,55,500 18.87

Receivable TO Ratio
25

20

15

10 Receivable TO Ratio

0
2022 2021 2020 2019
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INTERPRETATION: This figure shows the average amount of time needed to collect accounts
receivables for the company has increased. The ratio fell from 18.87 in 2018-2019 to 14.47 in
2019-2020, the lowest in the last four years, and has since improved dramatically to 23.22 in
2021-2022, indicating that the business is handling credit more efficiently.

PROFITABILITY ANALYSIS

Profitability ratios are the summary ratios for the business firm. When profitability ratios are
calculated, they sum up the effects of liquidity management, asset management, and debt
management on the firm. (CARLSON, 2020)

1.Return On Equity Ratio

This ratio indicates how much money shareholders make on their investment in the business
firm. The ROE ratio is most important for publicly traded firms.

ROE = Net income / Common equity

Year end Net income Equity Return on Equity

(%)

2022 -11,39,40,300 58,98,01,200 -19.3

2021 -29,31,42,700 55,27,38,700 -53.03

2020 6,66,60,800 90,85,89,800 7.33

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2019 6,12,10,500 53,41,97,000 11.4

Return on Equity (%)

20

10

0
2022 2021 2020 2019
-10

-20Return on Equity (%)

-30

-40

-50

-60

INTERPRETATION: This figure shows that the return on equity rate has had a massive
decline since 2019 from positive 11.4% to negative 19.3%, though it has risen marginally in
2021-2022. Its equity is performing extremely poorly.

2.Return On Total Assets Ratio

Return on assets is a financial ratio that shows the profit a company earns in relation to its
overall resources. It is commonly defined as net income divided by total assets. Net income is
derived from the income statement of the company and is the profit after taxes. (Staff, 2021)

ROA = Net income/ Total Assets

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Year end Net income Total assets Return on

assets (%)

2022 -11,39,40,300 3,14,08,02,100 -3.6

2021 -29,31,42,700 2,98,71,19,900 -9.81

2020 6,66,60,800 3,23,59,37,200 2.06

2019 6,12,10,500 2,66,66,46,000 2.2

Return on assets (%)

4
2
0
-2
2022 2021 2020 2019

-4 Return on assets (%)

-6
-8
-10
-12

INTERPRETATION: This graph shows that the company's return on total assets ratio has
deteriorated significantly over the last few years. It was stable in 2019 and 2020 before it fell to
3.62 percent, indicating that the company's assets are not being used efficiently to generate
profit.

3.Profit Margin Ratio

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The net profit margin is a profitability ratio that expresses the profit from business operations as
a percentage of revenue or net sales. It compares a company's profits to the total amount of
money it brings in. It measures how effectively a company operates. (CARLSON, 2020)

Net profit margin ratio = Net income / Net Sales

Year Net Income Sales Profit margin (%)

2022 -11,39,40,300 2,59,42,51,200 -4.3

2021 -29,31,42,700 2,99,36,62,400 -9.7

2020 6,66,60,800 2,88,29,51,100 2.31

2019 6,12,10,500 2,65,64,95,100 2.30

Profit margin (%)

4

0
2022 2021 2020 2019
-2

-4Profit margin (%)

-6

-8

-10

-12
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INTERPRETATION: This figure indicates that the business made a profit in 2019 and 2020,
with a consistent rate of 0.023. While they were able to maintain a consistent profit margin for
two years, it plummeted in 2021 to -0.97, rising slightly in 2022 to -0.043, indicating a
significant shift in the profit margin as seen in the chart.

LEVERAGE ANALYSIS

Here we measure how leveraged the company is and how it is placed with respect to its debt
repayment capacity.

1.Fixed Interest Coverage Ratio

This ratio measures how well a business can service its total debt or cover its interest payments
on debt. It is used to measure business profitability and its ability to repay the loan.

Interest coverage ratio = Earnings before interest and taxes (EBIT) / Interest expense

Financial EBIT Interest Interest Coverage

Year Ratio

2022 -20,14,22,500 7,25,53,100 -2.78

2021 -20,30,91,700 5,75,86,000 -3.52

2020 -11,57,37,500 4,63,65,000 -2.49

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2019 -6,39,56,100 4,23,65,700 -1.5

Interest Coverage Ratio

0
2022 2021 2020 2019
-0.5

-1

-1.5

-2 Interest Coverage Ratio

-2.5

-3

-3.5

-4

INTERPRETATION: This figure shows that the company’s ability to make contractual interest
payments is massively negative and decreasing. From negative 1.50 in 2019 to negative 2.78 in
2022 which shows that the company isn’t in a good position to make payments.

2.Debt Ratio

The debt-to-asset ratio shows the percentage of total assets that were paid for with borrowed
money, represented by debt on the business firm's balance sheet. It is an indicator of financial
leverage or a measure of solvency. It also gives financial managers critical insight into a firm's
financial health or distress. (CARLSON, 2020)

Debt Ratio = Total Liabilities / Total Assets

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Year Total Liabilities Total assets Debt Ratio

2022 2,54,27,67,400 3,14,08,02,100 0.809

2021 2,42,90,52,500 2,98,71,19,900 0.813

2020 2,32,19,89,900 3,23,59,37,200 0.717

2019 2,12,78,03,800 2,66,66,46,000 0.797

Debt Ratio
0.84

0.82

0.8

0.78

0.76
Debt Ratio
0.74
0.72

0.7

0.68

0.66 2022 2021 2020 2019

INTERPRETATION: This figure shows the proportion of total assets financed by pitaara
creditors. The debt ratio is at its highest in 2021 and lowest in 2020. It shows that debt- financed
is more now.
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4.2.HYPOTHESIS TESTING

H1 - Performance of pitaara is not satisfactory.

Ratio 2019 2020 2021 2022 Mean

Current Ratio 0.85 0.85 0.95 1.01 0.915

Quick Ratio 0.58 0.58 0.65 0.7 0.6275

Cash Ratio 0.31 0.28 0.34 0.44 0.3425

Inventory Turnover 4.41 5.07 4.4 4.73

Ratio 4.6525

Receivable 23.22 15.75 14.49 18.87

Turnover Ratio 18.0825

Return On Equity -19.3 -53.03 7.33 11.4

(%) -13.4%

Return On Total -3.6 -9.81 2.06 2.2

Assets (%) -2.2875%

Profit Margin (%) -4.3 -9.7 2.31 2.3 -2.3475%

Fixed Interest -2.78 -3.52 -2.49 -1.5

Coverage Ratio -2.5725

Debt Ratio 0.809 0.813 0.717 0.797 0.784

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INTERPRETATION

In general, a current ratio of 2:1 is considered ideal, while a quick ratio of 1:1 is considered ideal.
The fact that the average current ratio is less than one indicates that the company is unable to
meet its short-term obligations. The company's quick ratio indicates that it is cash-strapped. The
company's cash ratio reflects that too. Overall, the company's liquidity situation is very poor.

The profitability ratios of the company are negative; indicating that the company’s income is less
than its expenditure, implying that the company is making losses.

Pitaara tv has a negative fixed interest coverage ratio, which is concerning because it indicates
that the company is having trouble servicing its debt. Furthermore, the company's debt ratio is
greater than 0.5, implying that debt is used to fund the company's assets.

From the above findings we can conclude that the performance of the company is not
satisfactory.
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CHAPTER 5:

FINDINGS, SUGGESTIONS AND

CONCLUSIONS
 37

FINDING FROM THE STUDY

MAJOR FINDINGS

At this stage, the financial analysis has been done in order to draw some broad conclusions about
Pitaara tv results. One of the most important things to understand about financial analysis is that
the financial statements provide all of the details needed to make a definitive decision about what
is going on in the business. From the brief explanation and illustrations of four years, financial
statements of pitaara tv have been used to analyze the financial performance for the years under
study (20).

PROFITABILITY ANALYSIS

 Net profit margin which measures how profitable a company’s sales are after deducting
all expenses interest, taxes & preferred stock dividends declines from 2.3% to -4.3%
during the given period, which implies lower level of profitability of company.

 Return on total assets is a pure measure of the efficiency of a company in generating

returns from its assets. So here there are declines from 2.2% to -3.6% during the given
period, which shows negativity of the profitability of the company.

 Return on equity which measures the returns earned on the common stock holder’s
investment in the company which is decrease from 11.4% to -19.3% within given
periods. This indication reflects the bad performance of the management on the invested
financial resources.

 The overall performance of pitaara tv regarding profitability was bad, despite the fact
that the company's customer base was increasing.
 38

LIQUIDITY ANALYSIS

 In the year 2019 the company had the current ratio 1.01 which is highest but since then it
has fallen. It demonstrates how liquidity has dropped significantly since 2019, with a
ratio difference of 0.169.

 Since 2018-2019, the corporation's quick ratio has dropped dramatically from 0.7 to 0.28.
It indicates that the firm's ability to fulfill short-term obligations is declining.

 The company’s cash ratio which measures its ability to cover its short-term obligations
using only cash and cash equivalents has also declined from 0.44 to 0.31.

 Overall the liquidity position of the company is not good.

EFFICIENCY ANALYSIS

 In terms of Inventory turnover ratio, the company's operations are seen to be inconsistent
indicating that company's operation has been volatile and that consistency is needed.

 The receivable turnover ratio fell from 18.87 in 2018-2019 to 14.47 in 2019-2020, the
lowest in the last four years, and has since improved dramatically to 23.22 in 2021-2022,
indicating that the business is handling credit more efficiently.

LEVERAGE ANALYSIS

 Fixed interest coverage ratio shows that the company’s ability to make contractual
interest payments is massively negative and decreasing. From negative 1.50 in 2019 to
negative 2.78 in 2020 which shows that the company isn’t in a good position to make
payments
 39

A debt ratio greater than 1.0 tells you that a company has more debt than assets. A debt ratio
less than 1indicates that a company has more assets than debt. (HAYES, 2021) The debt ratio
has increased over the years indicating that the business now has more debt.

RECOMMENDATIONS

From the above findings we can say that the company is making losses or, more accurately,
decreasing its profitability, but it has promising potential prospects. To avoid meeting tough
financial conditions in the future, it must closely monitor prices, reduce expenditures, and manage
its finances.

CONCLUSION

To conclude, the Pitaara tv has maintained its influence on the industry. We can see Pitaara tv
downfall, but it is expected to rebound because it is such a big company. We can see from this study
that Pitaara tv ’willingness to make contractual payments has been severely harmed. Looking at all
four years, 2018-2019 is regarded as the strongest financial year of the four. Company had the
highest current and quick ratio in 2018-2019, and the rate has since fallen, indicating that liquidity
has declined over time. It is expected that the company will rebound from the loss if its assets are
well managed and its debts are adequately financed.
 40

BIBLOGRAPHY

1. I.M.Pandey : Financial Management

2. M.Y.Khan &P.K.Jai : Financial Management
3. S.P.Jain&K.L.Narang : Cost&Managementaccounting
4. K.Rajeswararao&G.Prasad :Accounting&Finance
5. P.Kulakarni :Financial Management

Web-sites:

www.google.com
www.pitaara.tv

ANNEXURE 1 : QUESTIONNAIRE
 41

Myself, Avi Sharma Student of Rayat Bahra university, Chandigarh pursuing MBA Program, wish to
study in depth the importance of Life Insurance Policies and factors affecting for purchase of Life
Insurance Policies, as a part of Summer Internship Project. The survey would not take more than 5
minutes of your time.

The data collected will be confidential.

Email Address:

1. My Gender -  - Male  - Female

2. My Age  - 21 to 30 years  - 31 to 40 years

 - 41 to 50 years  - 51 to 60 years
 - 61 years and above

3.Marital Status  - Single  - Married

4.My Occupation  - Govt. Service  - Business/Private

 - Professional  - Agriculture
 - Others :

5. My Salary Range (Monthly)  - ₹0 - ₹20000  - ₹20001 - ₹40000

 - ₹40001 - ₹60000 - ₹60001 - ₹80000
 - ₹80001 - ₹100000
 - ₹100001 and above.

6. What is the purpose of ratio analysis in financial management?

a. To evaluate the overall profitability
b. To assess liquidity and solvency
c. Both a and b
d. None of the above

7.Which ratio measures a company's ability to meet short-term obligations?

a. Return on Investment (ROI)

b. Debt to Equity Ratio
c. Current Ratio
 42

d. Earnings Per Share (EPS)

8. What does a high Debt to Equity Ratio indicate?

a. Strong financial position
b. High risk due to excessive debt
c. Efficient use of equity
d. Positive earnings growth

9. Which ratio helps in assessing the efficiency of inventory management?

a. Quick Ratio
b. Inventory Turnover Ratio
c. Price to Earnings (P/E) Ratio
d. Gross Profit Margin

10. What does a high Return on Equity (ROE) signify?

a. Inefficient use of equity
b. Strong profitability in relation to shareholder equity
c. Low risk
d. Declining sales

11. Which ratio measures the company's ability to generate profit from its operations?
a. Net Profit Margin
b. Debt Ratio
c. Price to Sales (P/S) Ratio
d. Dividend Yield

12. What is the significance of the Price to Earnings (P/E) Ratio?

a. Indicates market sentiment towards the stock

b. Measures liquidity
c. Evaluates leverage
 43

d. None of the above

13. How is the Quick Ratio different from the Current Ratio?
a. Quick Ratio excludes inventory
b. Current Ratio includes prepaid expenses
c. Quick Ratio is a profitability ratio
d. Current Ratio excludes accounts receivable

14.In terms of financial health, what does a declining Gross Profit Margin suggest?
a. Improved efficiency
b. Increasing production costs
c. Strong sales performance
d. Decreased profitability

15.Which ratio is useful for evaluating the long-term sustainability of a company's dividend payments?
a. Dividend Payout Ratio
b. Current Ratio
c. Times Interest Earned Ratio
d. Inventory Turnover Ratio
44