SUMMER TRAINING PROJECT REPORT

On

“A STUDY ON WORKING CAPITAL AT EIGHTEEN

PIXELS INDIA PVT. LTD, LUCKNOW”
]

Towards partial fulfilment of

Master of Business Administration (MBA)
School of Management, Babu Banarasi Das University, Lucknow

Submitted by
ARPITA MANI TRIPATHI
MBA IIIrd Semester
Roll No- 1220672089

Session 2023-2024
School of Management

Babu Banarasi Das University

Sector I, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (U.P.) India
Certificate from the Organization

ii
Bona-fide Certificate of Dean -School of Management

iii
 DECLARATION

I do hereby declare that all the work presented in the Internship Report

entitled “Ascertaining the Financial Health of Eighteen Pixels India Pvt. Ltd

with the Help of Ratios” is carried out and being submitted at the school of

management for the award of Master of Business Administration (MBA), is an

authentic record of ARPITA MANI TRIPATHI. The work is carried out under the

guidance of Dr. Jyoti Shukla (faculty guide). It hasn‟t been submitted at any

other place for any other academic purpose.

ARPITA MANI TRIPATHI

iv
 ACKNOWLEDGEMENT

Before I get into the thick of the things I would like to add a few heartfelt

words for the people who were part of this research report in numerous ways and

people who gave unending support right from the stage the project was started,

appreciated and encouraged when being depressed.

In this context I would like to express my gratitude towards my parents and

family members who have constantly supported and played a pivotal role in shaping

my career.

I owe my sincere gratitude towards Dean Prof (Dr.) Sushil Pande SOM,

BBDU Lucknow of school of management faculty guide Dr. Jyoti Shukla (Assistant

Professor) of BBDU, Lucknow for extending the support towards the completion of

the Internship Report.

And finally I would like to thank my friends for their unending support.

ARPITA MANI TRIPATHI

v
 PREFACE

It was a privilege for me to work in a reputed organization Eighteen Pixels India Pvt.

Ltd A well planned, properly executed and evaluated training helps a lot in

inoculating good work culture. The project on “Ascertaining the Financial Health

of Eighteen Pixels India Pvt. Ltd with the Help of Ratios” has been made to

facilitate effective understanding about the marketing aspects.

The project training has provided me an opportunity to gain practical experience,

which has helped me to increase my sphere of knowledge to a greater extent. I have

tried to summarize all our experience and knowledge acquired up till now, in this

report. This project is a keen effort to obtain the expected results and fulfill all the

information required.

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 TABLE OF CONTENT

Certificate ii-iii

Declaration iv

Acknowledgement v

Preface vi

1. Introduction 1-40

2. Company Profile 41-43

3. Objectives of the study 44-45

4. Research Methodology 46-48

5. Limitations of the study 49-50

6. Data Analysis & Interpretation 51-88

7. Findings 89-94

8. Recommendations 95-96

9. Conclusion 97-98

10. Bibliography 99-100

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INTRODUCTION

1
 INTRODUCTION TO THE TOPIC

Working Capital:

Working capital in simple terms means the amount of funds that a company requires

for financing its day -to- day operations. Working Capital includes the current assets

and current liabilities areas of the balance sheet.

Working Capital Management is concerned with the problems that arise in attempting

to manage the current assets, the current liabilities and the interrelationship that exists

between them. Working Capital Management is the process of planning and

controlling the level and mix of current assets of the firm as well as financing these

assets. Analysis of working capital is of major importance to internal and external

analysis because it is closely related to the current day -to- day operations.

Concept of Working Capital:-

There are two concepts of working capitals: -

Gross Working capital: -

It means the current assets which represent the proportion of investment that

circulates from one form to another in the ordinary conduct of business.

Net Working Capital: -

It is the difference between current assets and current liabilities or alternatively the

portion of current assets financed with long-term funds.

2
Constituents of Current Assets:-

 Cash in hand and cash at Company.

 Bill receivables.

 Sundry debtors.

 Short term loans and advances.

 Inventories.

 Prepaid Expenses.

 Accrued Income.

 Marketable Securities.

Constituents of Current Liabilities:-

 Accrued and outstanding expenses.

 Short term loans, advances and deposits.

 Dividends payable.

 Company overdraft.

 Provision for taxation.

 Sundry Creditors.

 Bills payable.

The gross concept is sometimes preferred to the concept of working capital for the

following reasons:

 It enables the enterprise to correct amount of working capital at correct time.

 Every management is more interested in total current assets with which it has to

operate then the source from where it is made available.

 It take into consideration of the fact every increase in the funds of the enterprise

would increase its working capital. The net working capital concept, However, is

also important for following reasons:

3
 It‟s a qualitative & quantitative concept, which indicates the firm‟s ability to meet

its operating expenses and short term liabilities.

 It indicates the margin of protection available to the short term creditors.

 It is an indicator of the financial soundness of enterprise.

 It suggests the need of financing a part of working capital requirement out of the

permanent sources of funds.

CLASSIFICATION OF WORKING CAPITAL

Working capital may be classified in two ways:

1. On the basis of concept.

2. On the basis of time.

1 .On the basis of concept

Working capital can be classified as gross working capital and net working capital.

On the basis of time, working capital may be classified as:

 Permanent or Fixed working capital.

 Temporary or variable working capital.

1. PERMANENT OR FIXED WORKING CAPITAL:

Permanent or fixed working capital is minimum amount which is required to ensure

effective utilization of fixed facilities and for maintaining the circulation of current

assets. Every firm has to maintain a minimum level of raw material, work- in-process,

finished goods and cash balance. This minimum level of current assets is called

permanent or fixed working capital as this part of working is permanently blocked in

current assets. As the business grow the requirements of working capital also

increases due to increase in current assets.

4
2.TEMPORARY OR VARIABLE WORKING CAPITAL:

Temporary or variable working capital is the amount of working capital which is

necessary to meet the seasonal demands and some special necessities. Variable

working capital can further be categorized as seasonal working capital and

special working capital. The capital necessary to meet the seasonal need of the

enterprise is called seasonal working capital. Special working capital is that part

of working capital which is required to meet special demands.

Temporary working capital differs from permanent working capital in the sense that is

required for short periods and cannot be permanently employed profitably in the

business.

IMPORTANCE OF ADEQUATE WORKING CAPIATAL:

 SOLVENCEY OF THE BUSINESS: - Adequate working capital helps in

maintaining the solvency of the business by providing uninterrupted of

production.

 GOODWILL: -Sufficient amount of working capital enables a firm to make

prompt payments and makes and maintain the goodwill.

 ESAY LOANS: - Adequate working capital leads to high solvency and credit

standing can arrange loans from Companys and other on easy and favorable terms.

 CASH DISCOUNT: Adequate working capital also enables a concern to avail

cash discounts on the purchases and hence reduces cost.

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 REGULAR SUPPLY OF RAW MATERIAL: - Sufficient working capital

ensures regular supply of raw material and continuous production.

 REGULAR PAYMENT OF SALARIES, WAGES AND OTHER DAY TO

DAY COMMITMENTS: - It leads to the satisfaction of the employees and raises

the morale of its employees, increases their efficiency, reduces wastage and costs

and enhances production and profits.

 EXPLOITATION OF FAVORABLE MARKET CONDITIONS:- If a firm is

having adequate working capital then it can exploit the favorable market

conditions such as purchasing its requirements in bulk when the prices are lower

and holdings its inventories for higher prices.

 ABILITY TO FACE CRISES:- A concern can face the situation during the

depression.

 QUICK AND REGULAR RETURN ON INVESTMENTS:- Sufficient

working capital enables a concern to pay quick and regular of dividends to its

investors and gains confidence of the investors and can raise more funds in future.

 HIGH MORALE: - Adequate working capital brings an environment of

securities, confidence, high morale which results in overall efficiency in a

business.

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DISADVANTAGES OF EXCESSIVE WORKING CAPITAL:

1. Excessive working capital means ideal funds which earn no profit for the firm and

business cannot earn the required rate of return on its investments.

2. Redundant working capital leads to unnecessary purchasing and accumulation

of inventories.

3. Excessive working capital implies excessive debtors and defective credit policy

which causes higher incidence of bad debts.

4. It may reduce the overall efficiency of the business.

5. If a firm is having excessive working capital then the relations with Companys

and other financial institution may not be maintained.

6. Due to lower rate of return n investments, the values of shares may also fall.

7. The redundant working capital gives rise to speculative transactions.

WORKING CAPITAL IS NEEDED FOR THE FOLLOWING PURPOSES: -

 For the purpose of raw material, components and spares.

 To pay wages and salaries.

 To incur day-to-day expenses and overload costs such as office expenses.

 To meet the selling costs as packing, advertising, etc.

7
 To provide credit facilities to the customer.

 To maintain the inventories of the raw material, work-in-progress, stores and

spares and finished stock.

FACTORS DETERMINING THE WORKING CAPITAL REQUIRMENTS:

1. NATURE OF BUSINESS: - The requirements of working is very limited in public

utility undertakings such as electricity, water supply and railways because they offer

cash sale only and supply services not products, and no funds are tied up in

inventories and receivables. On the other hand the trading and financial firms requires

less investment in fixed assets but have to invest large amt. of working capital along

with fixed investments.

2. SIZE OF THE BUSINESS: - Greater the size of the business, greater is the

requirement of working capital.

3. PRODUCTION POLICY:- If the policy is to keep production steady by

accumulating inventories it will require higher working capital.

4. LENGTH OF PRODUCTION CYCLE: - The longer the manufacturing time the

raw material and other supplies have to be carried for a longer in the process with

progressive increment of labor and service costs before the final product is obtained.

So working capital is directly proportional to the length of the manufacturing process.

5. SEASONALS VARIATIONS: - Generally, during the busy season, a firm

requires larger working capital than in slack season.

8
6. WORKING CAPITAL CYCLE: - The speed with which the working cycle

completes one cycle determines the requirements of working capital. Longer the cycle

larger is the requirement of working capital.

DEBTORS

FINISHED GOODS
CASH

RAW MATERIAL WORK IN PROGRESS

Fig.: Working Capital Cycle

7. RATE OF STOCK TURNOVER: - There is an inverse co-relationship between

the question of working capital and the velocity or speed with which the sales are

affected. A firm having a high rate of stock turnover will needs lower amt. of working

capital as compared to a firm having a low rate of turnover.

8. CREDIT POLICY: - A concern that purchases its requirements on credit and sales

its product / services on cash requires lesser amt. of working capital and vice-versa.

9
9. BUSINESS CYCLE: - In period of boom, when the business is prosperous, there

is need for larger amt. of working capital due to rise in sales, rise in prices, optimistic

expansion of business, etc. On the contrary in time of depression, the business

contracts, sales decline, difficulties are faced in collection from debtor and the firm

may have a large amt. of working capital.

10. RATE OF GROWTH OF BUSINESS: - In faster growing concern, we

sTVSMotorl require large amt. of working capital.

11. EARNING CAPACITY AND DIVIDEND POLICY: - Some firms have more

earning capacity than other due to quality of their products, monopoly conditions, etc.

Such firms may generate cash profits from operations and contribute to their working

capital. The dividend policy also affects the requirement of working capital.

12. PRICE LEVEL CHANGES: - Changes in the price level also affect the working

capital requirements. Generally rise in prices leads to increase in working capital.

MANAGEMENT OF WORKING CAPITAL:

Management of working capital is concerned with the problem that arises in

attempting to manage the current assets, current liabilities. The basic goal of working

capital management is to manage the current assets and current liabilities of a firm in

such a way that a satisfactory level of working capital is maintained, i.e. it is neither

10
adequate nor excessive as both the situations are bad for any firm. There should be no

shortage of funds and also no working capital should be ideal.

WORKING CAPITAL MANAGEMENT POLICES of a firm has a great on its

probability, liquidity and structural health of the organization. So working capital

management is three dimensional in nature as:

1. It concerned with the formulation of policies with regard to profitability, liquidity

and risk.

2. It is concerned with the decision about the composition and level of current assets.

It is concerned with the decision about the composition and level of current liabilities.

11
 Based on Financial Statement

Accounting ratios express the relationship between figures taken from financial

statements. Figures may be taken from Balance Sheet, P& P A/C, or both. One-way of

classification of ratios is based upon the sources from which are taken.

1] Balance sheet ratio:

If the ratios are based on the figures of balance sheet, they are called Balance Sheet

Ratios. E.g. Ratio of current assets to current liabilities or Debt to equity ratio. While

calculating these ratios, there is no need to refer to the Revenue statement. These

ratios study the relationship between the assets & the liabilities, of the concern. These

ratios help to judge the liquidity, solvency & capital structure of the concern. Balance

sheet ratios are Current ratio, Liquid ratio, and Proprietary ratio, Capital gearing ratio,

Debt equity ratio, and Stock working capital ratio.

2] Revenue ratio:

Ratio based on the figures from the revenue statement is called revenue statement

ratios. These ratios study the relationship between the profitability & the sales of the

concern. Revenue ratios are Gross profit ratio, Operating ratio, Expense ratio, Net

profit ratio, Net operating profit ratio, Stock turnover ratio.

3] Composite ratio:

These ratios indicate the relationship between two items, of which one is found in the

balance sheet & other in revenue statement.

There are two types of composite ratios-

a) Some composite ratios study the relationship between the profits & the investments of

the concern. E.g. return on capital employed, return on proprietors fund, return on

equity capital etc.

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b) Other composite ratios e.g. debtors turnover ratios, creditors turnover ratios, dividend

payout ratios, & debt service ratios

Based on Function:

Accounting ratios can also be classified according to their functions in to liquidity

ratios, leverage ratios, activity ratios, profitability ratios & turnover ratios.

1] Liquidity ratios:

It shows the relationship between the current assets & current liabilities of the concern

e.g. liquid ratios & current ratios.

2] Leverage ratios:

It shows the relationship between proprietors funds & debts used in financing the

assets of the concern e.g. capital gearing ratios, debt equity ratios, & Proprietary

ratios.

3] Activity ratios:

It shows relationship between the sales & the assets. It is also known as Turnover

ratios & productivity ratios e.g. stock turnover ratios, debtors‟ turnover ratios.

4] Profitability ratios:

a) It shows the relationship between profits & sales e.g. operating ratios, gross profit

ratios, operating net profit ratios, expenses ratios

b) It shows the relationship between profit & investment e.g. return on investment,

return on equity capital.

5] Coverage ratios:

13
It shows the relationship between the profit on the one hand & the claims of the

outsiders to be paid out of such profit e.g. dividend payout ratios & debt service

ratios.

Based on User:

1] Ratios for short-term creditors:

Current ratios, liquid ratios, stock working capital ratios

2] Ratios for the shareholders:

Return on proprietors fund, return on equity capital

3] Ratios for management:

Return on capital employed, turnover ratios, operating ratios, expenses ratios

4] Ratios for long-term creditors:

Debt equity ratios, return on capital employed, proprietor ratios.

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Liquidity Ratio: -
Liquidity refers to the ability of a firm to meet its short-term (usually up to 1 year)
obligations. The ratios, which indicate the liquidity of a company, are Current ratio,
Quick/Acid-Test ratio, and Cash ratio. These ratios are discussed below

Current Ratio
Meaning:
This ratio compares the current assets with the current liabilities. It is also known as
„working capital ratio‟ or „solvency ratio‟. It is expressed in the form of pure ratio.
E.g. 2:1
Formula:

15
 Current assets
Current ratio =
Current liabilities
The current assets of a firm represents those assets which can be, in the ordinary
course of business, converted into cash within a short period time, normally not
exceeding one year. The current liabilities defined as liabilities which are short term
maturing obligations to be met, as originally contemplated, with in a year.
Current ratio (CR) is the ratio of total current assets (CA) to total current liabilities
(CL). Current assets include cash and Company balances; inventory of raw materials,
semi-finished and finished goods; marketable securities; debtors (net of provision for
bad and doubtful debts); bills receivable; and prepaid expenses. Current liabilities
consist of trade creditors, bills payable, Company credit, and provision for taxation,
dividends payable and outstanding expenses. This ratio measures the liquidity of the
current assets and the ability of a company to meet its short-term debt obligation.

CR measures the ability of the company to meet its CL, i.e., CA gets converted into
cash in the operating cycle of the firm and provides the funds needed to pay for CL.
The higher the current ratio, the greater the short-term solvency. This compares
assets, which will become liquid within approximately twelve months with liabilities,
which will be due for payment in the same period and is intended to indicate whether
there are sufficient short-term assets to meet the short- term liabilities. Recommended
current ratio is 2: 1. Any ratio below indicates that the entity may face liquidity
problem but also Ratio over 2: 1 as above indicates over trading, that is the entity is
under utilizing its current assets.

Liquid Ratio:

Meaning:

Liquid ratio is also known as acid test ratio or quick ratio. Liquid ratio compares the
quick assets with the quick liabilities. It is expressed in the form of pure ratio. E.g.
1:1.
The term quick assets refer to current assets, which can be converted into, cash
immediately or at a short notice without diminution of value.
Formula:

16
 Quick assets
Liquid ratio =

Quick liabilities

Quick Ratio (QR) is the ratio between quick current assets (QA) and CL. QA refers to
those current assets that can be converted into cash immediately without any value
strength. QA includes cash and Company balances, short-term marketable securities,
and sundry debtors. Inventory and prepaid expenses are excluded since these cannot
be turned into cash as and when required.

QR indicates the extent to which a company can pay its current liabilities without
relying on the sale of inventory. This is a fairly stringent measure of liquidity because
it is based on those current assets, which are highly liquid. Inventories are excluded
from the numerator of this ratio because they are deemed the least liquid component
of current assets. Generally, a quick ratio of 1:1 is considered good. One drawback of
the quick ratio is that it ignores the timing of receipts and payments.

Cash Ratio:
Meaning:

This is also called as super quick ratio. This ratio considers only the absolute liquidity
available with the firm.
Formula:

Cash + Company + Marketable securities

Cash ratio =

Total current liabilities

Since cash and Company balances and short term marketable securities are the most
liquid assets of a firm, financial analysts look at the cash ratio. If the super liquid
assets are too much in relation to the current liabilities then it may affect the
profitability of the firm.

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Investment/ Shareholder

EARNING PER SHARE:-

Meaning:

Earnings per Share are calculated to find out overall profitability of the organization.
Earnings per Share representearning of the company whether or not dividends are
declared. If there is only one class of shares, the earning per share are determined by
dividing net profit by the number of equity shares.
EPS measures the profits available to the equity shareholders on each share held.
Formula:
Net Profit after Tax
Earnings per share =
Number of equity share

The higher EPS will attract more investors to acquire shares in the company as it
indicates that the business is more profitable enough to pay the dividends in time. But
remember not all profit earned is going to be distributed as dividends the company
also retains some profits for the business
Dividend Per Share:-

Meaning:

DPS shows how much is paid as dividend to the shareholders on each share held.

Formula:

Dividend Paid to Ordinary Shareholders

Dividend per Share =

Number of Ordinary Shares

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Dividend Payout Ratio:-

Meaning:

Dividend Pay-out Ratio shows the relationship between the dividends paid to equity
shareholders out of the profit available to the equity shareholders.

Formula:

Dividend per share

Dividend Payout ratio = *100

Earning per share

D/P ratio shows the percentage share of net profits after taxes and after preference
dividend has been paid to the preference equity holders.

Gearing

CAPITAL GEARING RATIO:-

Meaning:

Gearing means the process of increasing the equity shareholders return through the
use of debt. Equity shareholders earn more when the rate of the return on total capital
is more than the rate of interest on debts. This is also known as leverage or trading on
equity. The Capital-gearing ratio shows the relationship between two types of capital
viz: - equity capital & preference capital & long term borrowings. It is expressed as a
pure ratio.

Formula:
Preference capital+ secured loan
Capital gearing ratio =
Equity capital & reserve & surplus

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Capital gearing ratio indicates the proportion of debt & equity in the financing of
assets of a concern.

Profitability
These ratios help measure the profitability of a firm. A firm, which generates a
substantial amount of profits per rupee of sales, can comfortably meet its operating
expenses and provide more returns to its shareholders. The relationship between profit
and sales is measured by profitability ratios. There are two types of profitability
ratios: Gross Profit Margin and Net Profit Margin.

GROSS PROFIT RATIO:-

Meaning:

This ratio measures the relationship between gross profit and sales. It is defined as the
excess of the net sales over cost of goods sold or excess of revenue over cost. This
ratio shows the profit that remains after the manufacturing costs have been met. It
measures the efficiency of production as well as pricing. This ratio helps to judge how
efficient the concern is I managing its production, purchase, selling & inventory, how
good its control is over the direct cost, how productive the concern , how much
amount is left to meet other expenses & earn net profit.

Gross profit
Gross profit ratio = * 100
Net sales

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Net Profit Ratio:-

Meaning:

Net Profit ratio indicates the relationship between the net profit & the sales it is
usually expressed in the form of a percentage.

Formula:
NPAT
Net profit ratio = * 100
Net sales

This ratio shows the net earnings (to be distributed to both equity and preference
shareholders) as a percentage of net sales. It measures the overall efficiency of
production, administration, selling, financing, pricing and tax management. Jointly
considered, the gross and net profit margin ratios provide an understanding of the cost
and profit structure of a firm.

Return on Capital Employed:-

Meaning:

The profitability of the firm can also be analyzed from the point of view of the total
funds employed in the firm. The term fund employed or the capital employed refers to
the total long-term source of funds. It means that the capital employed comprises of
shareholder funds plus long-term debts. Alternatively it can also be defined as fixed
assets plus net working capital.

Capital employed refers to the long-term funds invested by the creditors and the
owners of a firm. It is the sum of long-term liabilities and owner's equity. ROCE
indicates the efficiency with which the long-term funds of a firm are utilized.
Formula:
NPAT
Return on capital employed = *100
Capital employed

21
Financial

These ratios determine how quickly certain current assets can be converted into cash.
They are also called efficiency ratios or asset utilization ratios as they measure the
efficiency of a firm in managing assets. These ratios are based on the relationship
between the level of activity represented by sales or cost of goods sold and levels of
investment in various assets. The important turnover ratios are debtors turnover ratio,
average collection period, inventory/stock turnover ratio, fixed assets turnover ratio,
and total assets turnover ratio. These are described below:

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DEBTORS TURNOVER RATIO (DTO)

Meaning:

DTO is calculated by dividing the net credit sales by average debtors outstanding
during the year. It measures the liquidity of a firm's debts. Net credit sales are the
gross credit sales minus returns, if any, from customers. Average debtors are the
average of debtors at the beginning and at the end of the year. This ratio shows how
rapidly debts are collected. The higher the DTO, the better it is for the organization.
Formula:
Credit sales
Debtors turnover ratio =

Average debtors

Inventory or Stock Turnover Ratio (ITR)

Meaning:
ITR refers to the number of times the inventory is sold and replaced during the
accounting period.

Formula:
Cost of Goods Sold
Stock Turnover Ratio =
Average stock

ITR reflects the efficiency of inventory management. The higher the ratio, the more
efficient is the management of inventories, and vice versa. However, a high inventory
turnover may also result from a low level of inventory, which may lead to frequent
stock outs and loss of sales and customer goodwill. For calculating ITR, the average
of inventories at the beginning and the end of the year is taken. In general, averages
may be used when a flow figure (in this case, cost of goods sold) is related to a stock
figure (inventories).

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Fixed AssetsTurnover (FAT)

The FAT ratio measures the net sales per rupee of investment in fixed assets.

Formula:
Net sales
Fixed assets turnover =
Net fixed assets

This ratio measures the efficiency with which fixed assets are employed. A high ratio
indicates a high degree of efficiency in asset utilization while a low ratio reflects an
inefficient use of assets. However, this ratio should be used with caution because
when the fixed assets of a firm are old and substantially depreciated, the fixed assets
turnover ratio tends to be high (because the denominator of the ratio is very low).

Proprietors Ratio:
Meaning:
Proprietary ratio is a test of financial & credit strength of the business. It relates
shareholders fund to total assets. This ratio determines the long term or ultimate
solvency of the company.
In other words, Proprietary ratio determines as to what extent the owner‟s interest &
expectations are fulfilled from the total investment made in the business operation.
Proprietary ratio compares the proprietor fund with total liabilities. It is usually
expressed in the form of percentage. Total assets also know it as net worth.
Formula:
Proprietary fund
Proprietary ratio = OR

Total fund

Shareholders fund

Proprietary ratio =
Fixed assets + current liabilities

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Stock Working Capital Ratio:
Meaning:
This ratio shows the relationship between the closing stock & the working capital. It
helps to judge the quantum of inventories in relation to the working capital of the
business. The purpose of this ratio is to show the extent to which working capital is
blocked in inventories. The ratio highlights the predominance of stocks in the current
financial position of the company. It is expressed as a percentage.

Formula:
Stock
Stock working capital ratio =
Working Capital
Stock working capital ratio is a liquidity ratio. It indicates the composition & quality
of the working capital. This ratio also helps to study the solvency of a concern. It is a
qualitative test of solvency. It shows the extent of funds blocked in stock. If
investment in stock is higher it means that the amount of liquid assets is lower.
Debt Equity Ratio:
Mening:
This ratio compares the long-term debts with shareholders fund. The relationship
between borrowed funds & owners capital is a popular measure of the long term
financial solvency of a firm. This relationship is shown by debt equity ratio.
Alternatively, this ratio indicates the relative proportion of debt & equity in financing
the assets of the firm. It is usually expressed as a pure ratio. E.g. 2:1
Formula:
Total long-term debt
Debt equity ratio =
Total shareholders fund

Debt equity ratio is also called as leverage ratio. Leverage means the process of the
increasing the equity shareholders return through the use of debt. Leverage is also
known as „gearing‟ or „trading on equity‟. Debt equity ratio shows the margin of
safety for long-term creditors & the balance between debt & equity.

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Return on Proprietor Fund:

Meaning:

Return on proprietors fund is also known as „return on proprietor‟s equity‟ or „return

on shareholders‟ investment‟ or „investment ratio‟. This ratio indicates the
relationship between net profits earned & total proprietor‟s funds. Return on
proprietors fund is a profitability ratio, which the relationship between profit &
investment by the proprietors in the concern. Its purpose is to measure the rate of
return on the total fund made available by the owners. This ratio helps to judge how
efficient the concern is in managing the owner‟s fund at disposal. This ratio is of
practical importance to prospective investors & shareholders.

Formula:

NPAT
Return on proprietors fund = * 100
Proprietor’s fund

Creditors Turnover Ratio:

It is same as debtors turnover ratio. It shows the speed at which payments are made to
the supplier for purchase made from them. It is a relation between net credit purchase
and average creditors
Net credit purchase
Credit turnover ratio =
Average creditors

Months in a year
Average age of accounts payable =
Credit turnover ratio

Both the ratios indicate promptness in payment of creditor purchases. Higher

creditors turnover ratio or a lower credit period enjoyed signifies that the creditors are
being paid promptly. It enhances credit worthiness of the company. A very low ratio
indicates that the company is not taking full benefit of the credit period allowed by the
creditors.

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What is finance? What are firm are financial activities? How are they related

to firm‟s other activities?

There exists an inseparable relation between finance on one hand and on the

other. Almost all kinds of business activities directly or indirectly involved the

acquisition and use of funds. E.g.: recruitment and promotion of employees,

buying of machines, advertising, sales promotion activities requires outlay of

cash and therefore affect financial resources. Finance functions or decision

includes investment decision, finance decision, dividend decision, and liquidity

decision.

A firm performs functions simultaneously and continuously in the normal

course of business. They do not necessarily occur in a sequence. Finance

functions call for skillful planning control and execution of firm‟s attitudes.

Functions Of Finance:-

There are three major functions of finance:

a) Investment decision

b) Financing decision

c) Dividend decision.

a) Investment decision:

Investment decision relates to selection of asset in which funds will be inverted

by a firm. The assets that can be acquired by a firm may be long term asset and

short term assets.

b) Financing decision:

27
Financing decision is concerned with financing mix or capital structure the mix

of department and equity is known as capital structure. Determination of the

proportion of equity and debt is the main issue in financing to share holders and

also financial risk.

c) Dividend decision:

A firm may distribute its profits or retain the balance with it the decision

depends upon the preference of the shareholders and investment opportunities

available to the firm. Dividend decision has a strong influence on the market

price of share.

Therefore, the dividend policy is too determined in terms of its impact on

shareholders‟ value. The optimum dividend policy is one. Which maximize

the value of shares and wealth of shareholders the financial manager should

determine the optimum payout ratio that is the proportion of net profit to be

paid out to shareholders? The financial manager should also consider those

factors. This determines the dividend policy in practice.

Financial Management:-

Financial management is a part of managerial activity, which is mainly

concerned with the planning, and controlling of financial resources of a firm.

Prof Solomon defines “Financial management is concerned with efficient use

of an important economic resource is capital funds.

28
Importance of Financial Management:-

Financial management is that managerial activity which is concerned with the

planning and control of firm‟s financial resources. As a separate activity or

discipline it is of recent origin. It was a branch of economics till 1890 still

today it has no unique body of knowledge of its own and draws heavily on

economics for its theoretical concepts. The subject of financial management is

of immense interest to both academicians and practicing managers. It is of

great interest to academicians, because the subject is still developing and are

still certain areas where controversies exist for which no enormous solution

have been reached as yet. The most crucial decision of the firm are those

which relate to finance and an understanding of the theory of financial

management provides than with conceptual and analytical insights to make

those decisions skilfully.

Objectives of Financial Management:-

The term objective reforms to a goal or decision criterion for taking financial

decisions. There are two objectives:

a) Profit maximization

b) Wealth maximization

a) PROFIT MAXIMIZATION:

The term profit maximization is deep rooted in the economic theory. It is

needed that when pursue the policy of maximizing profits society‟s resources

29
are efficiently utilized. The firms should undertake those actions that would

pursue profits and drop those actions that would decrease profits. The financial

decisions should be oriented to the maximization of profits.

Profits provides yardstick for measuring the economic performance of firms. It

makes allocation of resources to profitable and desirable areas. It also ensures

maximum social welfare. On these grounds profit maximization serves as

criteria for financial decision.

b) WEALTH MAXIMISATION:

Wealth maximization or value maximization or net present Value

maximization provides an appropriate and operationally feasible decision

criterion for financial management decisions. It provides an unambiguous

measure of what financial management should seek to maximize in making

investment and financing decisions. It satisfies the three requirements of a

suitable criterion namely precise, time value of money and quality of benefits.

In wealth maximization criterion the benefits associated with assets are

measured in terms of cash flows rather than accounting profits. The cash flows

are a precise concept with definite meaning. It overcomes the deficiencies

associated with accounting profits.

30
Financial Analysis:

Financial analysis is the analysis of financial statement of a Company to assess

its financial health and soundness of its management. „Financial Statement

Analysis‟ involves a study of the financial statements of a company to ascertain

its prevailing state of affairs and the reasons thereof. Such a study would

enable the public and the investors to ascertain whether one company is more

profitable than the other and also to state the causes and factors that are

probably responsible.

Ratio Analysis:-

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as “the

indicated quotient of two mathematical expressions as relationship between

two or more things”. In financial analysis, a ratio is used as a bench mark for

evaluating the financial position and performance of a firm. The absolute

accounting figures reported in the financial statement do not provide a

meaningful understanding of the performance and financial position of a firm.

An accounting figure conveys meaningful message when it is related to some

other relevant information. For example Rs 5 corer net profit may look

impressive but the firm‟s performance can be said to be good or bad only when

the net profit figure is related to firm‟s investments. The relationship between

two accounting figures expressed mathematically is known as financial ratio.

A ratio quantitative relationship, which can be in turn used to make a

qualitative judgment.

31
Classification of Ratios:-

Ratios may be classified in a number of ways keeping in view the

particular purpose. Ratios indicating profitability are calculated on the basis of

the profit and loss account; those indicating financial position are computed on

the basis of balance sheet. This classification is rather crude and unsuitable to

determine the profitability and financial position of business. To achieve these

purpose ratios may be classified as

1. Liquidity Ratios

2. Return On Investments Ratios

3. Solvency Ratios

4. Efficiency or Turnover Ratios

5. Profitability Ratios

6. Capital Market Ratios

Liquidity Ratios:-

i. Current Ratio

ii. Quick or Acid Test Ratio

iii. Debtors Ratio

iv. Debtors Turnover Ratio

v. Creditors Ratio

vi. Creditors Turnover Ratio

vii. Inventory Holding Period

viii. Inventory Turnover Ratio

32
 Literature review
1. Bhatt V. V. 2018 he broadly contacts on technique for evaluating working

capital account uses extensive assembling concerns. It expresses that

comparative strategies should be contrived for different areas, for example,

horticulture, exchange and so forth. The author has a view on the bank while

providing short-term financing, focuses on the diversity of security and

repayment capabilities of their existence. On being happy if they meet these

two criteria details examination of the working of the concerns.

2. Smith Keith V. 2019 He trusts that Research that concerned research of

working capital and short-range basic leadership would seems productivity is

falling. Budget manager has no ability to plan and control legitimately the

current liabilities and current assets of the particular organisation has been the

reasonable justification of business disappointment lately. Current assets

aggregately speak to the single biggest venture for some organizations, while

current liabilities represent a noteworthy piece of all out financing in

numerous occurrences. His paper covers eight unmistakable ways to deal with

working capital Management. The initial three - total rules, limitations set and

cost adjusting are incomplete models; two different methodologies - likelihood

models and portfolio hypothesis, underline future vulnerability and bury

subordinate while the staying three methodologies - scientific programming,

various objectives and budgetary recreation have a more extensive deliberate

core interest.

33
3. S.K. Chakraborthy 2020 He tries to distinguish between working capital cash

v / s work capital balance sheet. The scope of the analysis is as follows: 1)

Common Parlance Working Capital (CPWC), 2) Operating Cycle Concept

(OCC) 3) Calculation of the operating cycle period (OCP) in each of the four

cases. The purpose of the analysis is to show the operational cycle concept

based on the company's published annual reports.

4. Natarajan Sundar 2021 he believes that Working Capital is critical in both

domestic and business dimensions. Working Capital Control is mainly

exercised at national level by means of credit controls. The Tandon group of

study has made available the equivalent with an exhaustive operating system.

Effective working capital operationally involves deciding the ideal dimension

of Working Capital, creatively financing it and exercising power over it. He

assumes that interest in working capital in the corporate dimension is as vital

as interest in fixed resources. moreover, survival will be conceivable,

especially for an organisation that is not developing, just in so far as it can

coordinate operational expenditure increases Improved operational

productivity, of which working capital executives are one of the most critical

parts.

5. V.S Kaveri 2022 Based on her consideration of large open, restricted

organizations ' funds by RBI in its composition. This audit of working capital

finances refers to two times, i.e. the accounting years that ended in 1979 and

1983, and depends on the information provided by Reserve Bank of India on

individual dates of investigation by these organizations. She sees that, with

34
 regard to the standards proposed by the Chore Committee, the Indian business

has neglected to change its working capital funding example. While the

situation of Working Capital Management (WCM) showed some venture

between 1975 - 79 and 1979 - 83 when expanding the long - haul asset base,

businesses did not prevail to the ideal degree. The writer concludes with the

perception that the progress made towards this end missed the mark on what

was wanted under the second working capital money strategy, despite giving

the ventures sufficient time to correct the capital structure to move from the

main strategy to the second technique.

6. Bhattacharyya Rishikesh 2023 He is trying to build a far-reaching hypothesis

and device of working capital management from the perspective of the

framework. According to this study, capital is regularly used to refer to capital

products consisting of an incredible variety of things, specifically in-process

machines of different types, plants, houses, tools, raw materials and goods. On

the balance sheet asset side, the account manager of a company searches for

these things. In contrast to the balance sheet, he directs his concentration for

capital and never makes an error. His motivation is to adjust the opposing

sides to increase the company's total assets without increasing the company's

risk. This adjustment is financing, i.e. financing the company's assets by

consistently generating liability surges to coordinate with past dynamism. The

study is an enhancement of the concept of Park and Gladson that was not

ready to catch the entire techno - money - related company‟s work structure.

The study is an enhancement of the concept of Park and Gladson that was not

ready to catch the entire techno - money - related company‟s work structure.

35
7. Rao K.V. and Rao Chinta 2019 Watch conventional methods of working

capital analysis for strong and weak purposes. The result was clearly blended

as a portion of the ordinary systems that could appreciate the working capital

performed well; others flopped in properly fulfilling the responsibility. Using

regular procedures, i.e. ratio analysis, authors have tried to assess the

effectiveness of managing Working Capital. The article ends with prospective

researchers looking for a comprehensive and definitive measuring stick to

evaluate the productivity of working capital.

8. Heath field and David F Hamlin Alan P. 2022 Working Capital is an important

contribution to the creation process, but is then unknown in the financial

models of most generations. The ramifications of the time measurement of

creation and later the requirement of working capital of the company are

investigated, with the specific upper hand pressure being captured by

companies that maintained adaptability in the time structure of their

generation. They have tried in this article to investigate this very fundamental.

Time work in the generation process is therefore centred around the

ramifications of an unequivocal perception of the working capital requirement.

9. Zaman M. 2012 He studies the Jute Enterprises Public Sector Working Capital

Management Practices in Bangladesh that have been found to be truly

influenced. This has been attributed to some variables such as low interest in

jute products and genuine challenges on the world market, lack of stock 96

Board arrangements, poor strategy to collect and a wasteful approach to

money. A long - haul adaptable and operational work capital management

36
 show has been detailed by the creator. Ultimately, he recommended the model

that would also help improve the working capital management practices of

Bangladesh's particularly jute business and other open enterprises.

10. Petersen, Bruce C. And Steven M. Fazzari (2018) illuminates new financial

constraint tests by highlighting work capital's often ignored work as both a use

and a source of assets. The creators are confident that working capital is also a

source of liquidity that should be used when firms face fund limitations to

smooth speculation on fixed revenue stunts. They discovered that speculation

on working capital is "exorbitantly sensitive" to variances in income. In

addition, it has a negative coefficient when working capital speculation is

incorporated as a utilization or wellspring of assets into a fixed - venture

relapse. They assume that controlling for the smoothing work of working

capital outcomes in a much larger gage of the long - run effect of account

imperatives than revealed in different investigations.

11. Akon Md. Habibur Rahman and Hossain Saiyed Zabid 2019. Highlight the

essential objective of managing working capital, i.e. arranging the required

working capital assets at the right time, at the right expense and from the right

source with the ultimate objective of achieving liquidity and profitability trade

- offs. The review reveals that BTMC has been pursuing a policy of aggressive

liquidity risk work capital funding. Throughout the duration of the study, there

was a continuous pattern of expansion of negative net working capital, which

recommended that BTMC had exploited all the available short-term sources

without taking into account real needs.

37
12. Ahmed Habib 2020 points out that when the interest rate is interest

incorporated; cash loses its precious yield efficiency. Examination explains

this finding by using a rational expectation template where business-required

bond creation choices fund working capital. Working Capital is a major factor

and its cost, interest rate, influences businesses ' supply of goods. In line with

these lines, monetary policy shocks influence the cost of financing and the

supply side, and subsequently the cost and yield of companies. The template

shows this can result in lowering the prescient intensity of monetary policy

shocks on yield when using the interest rate in 97 accurate investigations. In

line with these lines, shocks in monetary policy influence financing costs and

supply side, and subsequently firms ' costs and yield. The model shows that

this can lead to a lowering in 97 accurate investigations of the prescient

intensity of monetary policy shocks on yield.

13. Sur Debasish and Prof. Mallick Amit 2023 Efforts to conduct an empirical

analysis of AFT Industries limited, an association providing tea in Assam, to

investigate the effect of Working Capital on its Profitability in the period

from1986 - 87 to 1995 - 96. Author investigated the ROI co - connection and a

few working capital management related ratios. All in all, this investigation

into the correlation between the selected ratios in working capital management

area & the organization's profitability Negative and positive results uncovered.

Furthermore, the organization's WCL during the investigation period, a

fluctuating pattern was recorded.

38
14. Syed Zabid and Hossain 2019 The various parts of the working capital (WC)

position are illuminated. Using ratio analysis, he evaluated working capital

and its parts. Some ratio is figured for every aspect of the investigation and

subsequently the results are contrasted and Standard or normal industry ratio.

15. P.Singaravel 2020 Concentrate on interdependence between working capital,

liquidity and productivity, the primary preference of which is the adequacy of

Profitability and working capital. The article is a top - to - bottom liquidity

analysis and its working capital and productivity interrelationship. Due to the

triangular position of working capital, liquidity and productivity, none is non -

essential when the other is fulfilled. The abundance of stocks - in - exchange

over bank overdraft and excess liquid assets over non - current liabilities -

creates business capital. On the other hand, necessities of working capital are

made for long - haul finances that affect productivity.

16. Garg Pawan Kumar 2021 Focuses around the investigation of working capital

trend and liquidity examination in the chose open division endeavours of

Haryana. The examination proposes Working capital necessity forecasting is

largely linked to different working capital segments. The author understood

the requirement for adequate evaluation and Working capital forecast in the

public sector undertaking after the actualities are taken into account. For this

reason, the analysis of the production plan, the sales pattern, the cost of work,

etc., should be considered. He also recommended the requirement that parts of

working capital be better managed.

39
17. Sharma A. K. and Batra G. S. (2022)

He examines Goetze (I) Ltd.'s working capital position Using different ratios.

They believe the working capital position of the organization is acceptable

because they have recommended some further improvement measures Similar

to the need for more notable consideration in stock control in the management

of working capital; dynamic deals office, rapid dispatch of requests and

reduced reliance on exchange banks.

18. Batra Gurdeep Singh (2023) Provides a working capital diagram with its

determinants. Settling on the sum and piece of current assets and how to fund

them, as indicated by the author working capital management. He emphasizes

the supporting way of dealing with current financial assets. He also states that

the working capital ratio analysis can be used by a management as method of

verifying the skills employed by working capital in companies.

19. Bansal S. P. 2022 notes that's because the partnership's preservationist strategy

I) the short-term position of creditors ii) The organization did not follow a

uniform approach to the accumulation of account holders, and iii) Inefficiency

with respect to the administration causes over interest in inventories.

Accordingly, a difficult circumstance emerged because of lack of working

capital. The creator cautions the organization that in the event that it didn't

design its money needs appropriately, it was going to be insolvency.

40
COMPANY
PROFILE

41
 COMPANY PROFILE

Eighteen Pixels India Private Limited is a Private incorporated on 06 September 2012.

It is classified as Non-govt company and is registered at Registrar of Companies,

Kanpur. Its authorized share capital is Rs. 1,000,000 and its paid up capital is Rs.

50,000. It is inolved in Data processing. [This includes the processing or tabulation of

all types of data. Provision of such services on (i) an hourly or time -share basis, and

(ii) management or operation of data processing facilities of others on a time sharing

basis; on a fee or contract basis].

Eighteen Pixels India Private Limited's Annual General Meeting (AGM) was last held

on N/A and as per records from Ministry of Corporate Affairs (MCA), its balance

sheet was last filed on 31 March 2023.

Directors of Eighteen Pixels India Private Limited are Raj Kumar Yadav and Neelam

Yadav.

Eighteen Pixels India Private Limited's Corporate Identification Number is (CIN)

U72300UP2012PTC052402 and its registration number is 52402.Its Email address is

raj.siet@gmail.com and its registered address is 603, 604, 6TH FLOOR, ELDECO

CORPORATE TOWER VIBHUTI KHAND, GOMTI NAGAR LUCKNOW

Lucknow UP 226010 IN.

Current status of Eighteen Pixels India Private Limited is - Active.

42
Company Details

CIN U72300UP2012PTC052402

Company Name EIGHTEEN PIXELS INDIA PRIVATE

LIMITED

Company Status Active

RoC RoC-Kanpur

Registration Number 52402

Company Category Company limited by Shares

Company Sub Non-govt company

Category

Class of Company Private

Date of Incorporation 06 September 2012

Age of Company 11 years, 0 month, 16 days

43
OBJECTIVES OF
THE STUDY

44
 OBJECTIVES OF THE STUDY

 To study the financial analysis of eighteen Pixels India Pvt. Ltd

 To ascertain the overall profitability of the company.

 To analyze trends on the basis of ratios for consecutive 4 years.

 To gain insight as to how a financial statement can be use to predict

future.

 To analyze working capital funds with the help of ratios.

45
 RESEARCH
METHODOLOGY

46
 RESEARCH METHODOLOGY

PROBLEM STATEMENT

In every step of life resources are always scarce. In the same way, Business

organizations are also facing such type of problems. In this respect every

organization wishes to use available resources in an optimum manner. This

study is basically emphasizing on the financial analysis of Eighteen Pixels

India Pvt. Ltd ltd and tries to find out ways of optimum utilization of financial

resources.

The topics are dealt with in a general manner. There would be details, which

could vary from company to company.

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 economy in procedure .A research design is purely

and simply the framework of plan for a study that guides the collection

and analysis of data. It is a blue print that is followed in completing a

study. Keeping in view the objectives of the project

Research design used in the report is Descriptive. Type of research

conducted is analytical in nature.

47
Descriptive Research:

This is kind of research structure which is concerned with describing

the characteristics of the problem. In this way the main purpose of such

a research design is to present a descriptive picture about the marketing

problem on the basis of actual facts. For this it is important to obtain

the complete and actual information about the subjects.

TYPE OF DATA AND DATA COLLECTION

Secondary data:

Secondary data are those which have already been collected by someone else

and have already been passed through the statistical process.

The Annual reports of EIGHTEEN PIXELS INDIA PVT. LTD was the main

source of data in the study, annual reports from 2014 to 2018 were collected

and referred.

All the data has been collected from internal source that includes:-

 Books

 Websites

 Official Files

 Company‟s Manual related to Working Capital

Techniques of Analysis:-
 The data are analyzed through ratio analysis common size balance sheet,
comparative balance sheet and fund flow analysis.

48
LIMITATIONS
OF THE STUDY

49
 LIMITATIONS OF THE STUDY
1. The study is limited to Eighteen Pixels India Pvt. Ltd and the finding

need not apply in similar sense to other firms.

2. The inferences that have been framed only on the basis of financial

statement.

3. Based on the limited information it is not possible to arrive at a proper

conclusion.

4. Limitations of Financial analysis.

50
DATA ANALYSIS
&
INTERPRETATION

51
 DATA ANALYSIS & INTERPRETATION

Current Ratio (Working Capital Ratio)

= Current Assets

Current Liabilities

Current Ratio (2018 to 2023) (Rs in CRS.)

YEAR CURRENT CURRENT RATIO

ASSETS LIABILITIES

2018-19 8439.39 14362.33 0.59

2019-20 10466.63 14466.89 0.73

2020-21 10021.39 13638.30 0.73

2021-22 13730.10 16732.40 0.82

2022-23 23957.90 17842.70 1.34

Interpretation: From the above table we can indicate that the current assets are

very less compared to current liability of the company. The company doesn‟t have

enough current assets in meeting their liabilities. So, the company can‟t meet

immediate emergencies.

The company needs to increase current assets in order to meet its short-term

obligation. We can conclude that the ratio isn‟t favorable as the current asset is less

than the current liabilities.

52
Quick (Acid Test or Liquid) Ratio:

= Quick Assets

Current Liabilities

Table:2 Quick Ratio (2018 to 2019) (Rs in CRS.)

YEAR QUICK CURRENT RATIO

ASSETS LIABILITIES

2018-19 8382.53 14362.33 0.58

2019-20 10404.48 14466.89 0.72

2020-21 9994.15 13638.30 0.73

2021-22 13695.70 16732.40 0.82

2022-23 22866.90 17842.70 1.28

Interpretation: As per as quick ratio is concern whether a firm has enough short-

term assets to cover its immediate liabilities without selling inventory. Here,

EIGHTEEN PIXELS INDIA PVT. LTD review that in 2019-20 increase their assets

and then after very small percentage increase. That point of Time it has not enough

asset to cover its liabilities. Company ideal ratio is 1.5 so is below the ratio. This is

not good for company should be improving that point.

53
Debtors Turnover Ratio

= Credit Sales

Avg. Debtors

Table:3 Debtors Turnover Ratio (2018 to 2023) (Rs in CRS.)

YEAR CREDIT SALES AVG. DEBTORS RATIO DAYs

2018-19 25761.11 2097.49 12.28 30

2019-20 34048.32 1515.76 22.46 16

2020-21 35609.54 2327.52 15.30 24

2021-22 38015.80 2240.39 16.97 23

2022-23 41,603.80 2134.50 18.45 18

Interpretation: Higher turnover signifies speedy and effective collection. Lower

turnover indicates sluggish and inefficient collection leading to the doubts that

receivables might contain significant doubtful debts. Receivables collection period is

expressed in number of days. Here the company in 1st year 1month to collection &

after decline then after increase. Company does not maintain lower collection period.

54
Return On Investments Ratios:-

i. Return On Net Worth

ii. Earnings Per Share (EPS)

iii. Cash Earnings Per Share (CEPS)

iv. Return On Capital Employed

Return on Net Worth

PAT – Preference Dividend x 100

Net Worth

Table:4 Return On Net Worth (2018 to 2023) (RS IN CRS.)

YEAR PAT – PREFERENCE NET WORTH RATIO

DIVIDEND

2018-19 6244.19 20241.49 30.85

2019-20 7743.84 27643.97 28.01

2020-21 9426.15 36737.18 25.66

2021-22 7716.90 44111.60 17.49

2022-23 5266.00 49429.60 10.65

Interpretation: As per as net worth ratio states the return that shareholders could

receive on their investment in a company. Here the company continuous declines year

by year this not well for company. But actually is right because bank rate is low like

12 % is good for investors.

55
 Earnings Per Share PAT

No. Equity Shares

Table:5 (2018 to 2019) (RS IN CRS.)

YEAR PAT NO. OF EQUITY RATIO

SHARES

2018-19 6244.19 189.79 32.90

2019-20 7743.84 189.82 40.79

2020-21 9426.15 379.75 24.82

2021-22 7716.90 379.75 20.32

2022-23 5266.00 379.75 13.87

Interpretation: As per as EPS ratio is concern the portion of a company's profit

allocated to each outstanding share of common stock. Earnings per share serve as an

indicator of a company‟s profitability. Here the company shows high profitability so it

is good for company as well as investor.

56
4.6 Return on Capital Employed

PBIT

Capital Employed

Table: 6 (RS IN CRS.)

YEAR PBIT CAPITAL EMPLOYED RATIO

2018-19 9450.20 56009.10 16.87

2019-20 11194.72 41776.10 26.80

2020-21 8747.65 35357.53 24.74

2021-22 7599.87 26811.63 28.35

2022-23 7514.80 11565.07 0.64

Interpretation: It is expressed as a percentage and can be very revealing about the

industry a company operates in, the skills of the management and occasionally the

general business climate. Here, the company continuous increases efficiency. It is

good for the company.

57
Solvency Ratios:-

i. Net Asset Value (NAV)

ii. Debt Equity Ratio

iii. Int. Coverage Ratio

iv. Debt Service Coverage Ratio

v. Proprietary Ratio

vi. Total Assets to Debt Ratio

vii. Liabilities to Equity Ratio

Net Asset Value

Net Worth

No. Equity Share

Table:7 Net Asset Value (2018 to 2023) (RS IN CRS.)

YEAR NET WORTH NO. OF EQUITY RATIO

SHARES

2018-19 20241.49 189.79 106.65

2019-20 27643.97 189.82 145.63

2020-21 36737.18 379.75 96.74

2021-22 44111.60 379.75 116.16

2022-23 49429.60 379.75 130.16

Interpretation: The net asset value in companies is the book value deducting

liabilities and intangible assets from the total assets. For companies, the net asset

value is always used in market book ratio or price book ratio to compare the net asset

value of the company with its market value. Here condition of company is good due

to high profitability.

58
Debt Equity Ratio

Long Term Debt

Share Holder Fund

Table:8 Debt Equity Ratio (2014 to 2018) (RS IN CRS.)

YEAR LONG TERM DEBT SHARE RATIO

HOLDER FUND

2018-19 6570.43 20241.49 0.32

2019-20 7713.65 27643.97 0.29

2020-21 5038.92 36737.18 0.14

2021-22 11897.50 44111.60 0.27

2022-23 14129.40 49429.60 0.28

Interpretation: 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. Here the company ratio so

good in the current situation as to the previous years. This is good for the company.

59
Proprietary Ratio

Proprietary Fund

Total Asset

Table:9 Proprietary Ratio (2014 to 2018) (RS IN CRS.)

YEAR PROPRIETARY TOTAL ASSET RATIO

FUND

2018-19 20241.49 26811.84 0.75

2019-20 27643.97 35357.62 0.78

2020-21 36737.18 41776.12 0.88

2021-22 44111.60 56009.10 0.79

2022-23 49429.60 63559.00 0.78

Interpretation: Proprietary Ratio refers to a ratio which helps the creditors of the

company in seeing that their capital or loans which the creditors have given to the

company are safe. Ideal ratio is <1 so Here company has all year is <1 so it is good

for company.

60
Total Asset to Debt Ratio

Total Asset

Long Term Debt

Table:10 Total Asset to Debt Ratio (2014 to 2018) (RS IN CRS.)

YEAR TOTAL ASSET LONG TERM RATIO

DEBT

2018-19 26811.84 6570.43 4.08

2019-20 35357.62 7713.65 4.58

2020-21 41776.12 5038.92 8.29

2021-22 56009.10 11897.50 4.71

2022-23 63559.00 14129.40 4.50

Interpretation: As per as the total asset to debt ratio to debt ratio is concern

ratio between asset & long term debt. In the ratio total asset more than long

term debt. So here company total asset is high in 2020-21 but company can‟t

maintain that so improve that point is actually it is good.

61
Liabilities to Equity Ratio

Total Liabilities

Share Holders Equity

Table:11 Liabilities to Equity Ratio (2018 to 2019) (RS IN CRS.)

YEAR TOTAL SHARE HOLDERS RATIO

LIABILITIES EQUITY

2018-19 26811.84 20241.49 1.32

2019-20 35357.62 27643.97 1.28

2020-21 41776.12 36737.18 1.14

2021-22 56009.10 44111.60 1.27

2022-23 63559.00 49429.60 1.28

Interpretation: The liability to equity ratio is the relationship between the capital

contributed by creditors and the capital contributed by shareholders. It also shows the

extent to which shareholders' equity can fulfill a company's obligations to creditors in

the event of liquidation. Here the company increases their equity year by year. Ideal

ratio is 1 here company is work on more than 1 so it is good for the company.

62
Efficiency Ratios or Turnover Ratios:-

i. Fixed Assets Turnover Ratio

ii. Net Worth Turnover Ratio

iii. Working Capital Turnover Ratio

Fixed Assets Turnover Ratio

Net Sales

Net Block of Fixed Asset

Table:12 Fixed Assets Turnover Ratio (2018 to 2023) (RS IN CRS.)

YEAR NET SALES NET BLOCK OF RATIO

FIXED ASSET

2018-19 25761.11 19030.65 1.35

2019-20 34048.32 25013.36 1.36

2020-21 35609.54 28024.97 1.27

2021-22 38015.80 40700.80 0.93

2022-23 41603.80 43984.30 0.94

Interpretation: 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. Here the

company‟s decline the use of the asset continues decline. This is not good for the

company.

63
Net Worth Turnover Ratio

Net Sales

Net Worth

Table:13 Net Worth Turnover Ratio (2018 to 2019) (RS IN CRS.)

YEAR NET SALES NET WORTH RATIO

2018-19 25761.11 20241.49 1.27

2019-20 34048.32 27643.97 1.23

2020-21 35609.54 36737.18 0.97

2021-22 38015.80 44111.60 0.86

2022-23 41603.80 49429.60 0.84

Interpretation: As per as Net worth Turnover Ratio is concern it show the

relationship between the net worth & net sales. Ideal ratio is 1.5 but company is

not performance better in this case ratio is continues decline. It is not good for

the company.

64
Working Capital Turnover Ratio

Net Sales

Working Capital

Table:14 Working capital Turnover Ratio (2014 to 2018) (RS IN CRS.)

YEAR NET SALES WORKING RATIO

CAPITAL

2018-19 25761.11 (-)5922.94 (-)4.35

2019-20 34048.32 (-)4000.26 (-)8.51

2020-21 35609.54 (-)3616.91 (-)9.85

2021-22 38015.80 (-)3002.30 (-)12.66

2022-23 41603.80 6115.20 6.80

Interpretation: The working capital turnover ratio concern to increasing ratio

indicates that working capital is more active; it is supporting, comparatively, higher

level of production and sales; it is being used more intensively. Here company is not

performing well due to negative working capital. This is not good for company.

65
Profitability Ratios:-

i. Gross Profit Ratio

ii. Profit Before Depreciation, Interest & Tax Ratio (PBDIT)

iii. Profit Before Interest & Tax Ratio (PBIT) or Operating Profit Ratio

iv. Profit Before Tax Ratio (PBT)

v. Net Profit or Profit After Tax Ratio (PAT)

vi. Defective Tax Rate

vii. Operating Ratio

PBDIT Ratio

PBDIT x 100

Net Sales

Table:14 PBDIT Ratio (2014 to 2018) (RS IN CRS.)

YEAR PBDIT NET SALES RATIO

2018-19 10766.45 25761.11 41.79%

2019-20 11953.93 34048.32 35.11%

2020-21 15084.80 35609.54 42.36%

2021-22 13643.90 38015.80 35.89%

2022-23 13430.80 41603.80 32.28%

Interpretation: Financial metric used to assess a company's profitability by

comparing its revenue with earnings. More specifically, since PBDIT is derived from

revenue, this metric would indicate the percentage of a company is remaining after

operating expenses. Here high ratio indicate good position in market this is good for

company.

66
PBIT or Operating Profit Ratio

PBIT x 100

Net Sales

Table:15 PBIT Ratio (2018 to 2023) (RS IN CRS.)

YEAR PBIT NET SALES RATIO

2018-19 7333.80 25761.11 28.47%

2019-20 8568.83 34048.32 25.17%

2020-21 10986.88 35609.54 30.85%

2021-22 9032.30 38015.80 23.76%

2022-23 7514.80 41603.80 18.06%

Interpretation: As per as ratio is concern a higher operating margin means that

the company has less financial risk. Here company has average high ratio so the

company is a good position.

67
PBT Ratio

PBT x 100

Net Sales

Table:16 PBT Ratio (2018 to 2023) (RS IN CRS.)

YEAR PBT NET SALES RATIO

2018-19 6879.70 25761.11 26.71%

2019-20 8088.52 34048.32 23.75%

2020-21 10652.75 35609.54 29.92%

2021-22 8747.40 38015.80 23.00%

2022-23 6989.70 41603.80 16.80%

Interpretation: As per as ratio is concern a higher interest margin means that the

company has less financial risk. Here company has average high ratio so the company

is a good position.

68
Net Profit Ratio

Net Profit x 100

Net Sales

Table:17 Net Profit Ratio (2018 to 2023) (RS IN CRS.)

YEAR NET PROFIT NET SALES RATIO

2018-19 6244.19 25761.11 24.24%

2019-20 7743.84 34048.32 22.74%

2020-21 9426.15 35609.54 26.47%

2021-22 7716.90 38015.80 20.30%

2022-23 5266.00 41603.80 12.66%

Interpretation: This ratio is a measure of the overall profitability net profit is

arrived at after taking into accounts both the operating and non-operating items of

incomes and expenses. The ratio indicates what portion of the net sales is left for the

owners after all expenses have been met. Here the company high profit in year 2021-

22 then decline. This is not good for company. Company should be maintaining the

NP ratio.

69
Capital Market Ratios:-

i. Price Earnings Ratio (PE Ratio)

ii. Market Price to NAV Ratio

iii. Market Capitalization Ratio

iv. Yield to Investor

v. Price to Book Ratio

Price Earnings Ratio

Market Price of a Share

Earnings per Share

Table:18 Price Earnings Ratio (2018 to 2023) (RS IN CRS.)

YEAR MARKET PRICE EARNINGS PER RATIO

OF A SHARE SHARE

2018-19 420.00 32.90 12.77

2019-20 508.30 40.79 12.46

2020-21 174.60 24.82 7.03

2021-22 270.70 20.32 13.32

2022-23 273.30 15.09 18.11

Interpretation: The P/E looks at the relationship between the stock price and the

company‟s earnings. Here the company has a high P/E ratio in last year it suggests

that stock is undervalued and investor can earn from it.

70
Market Price to NAV Ratio

Market Price of a Share

NAV

Table:19 Market Price to NAV Ratio (2018 to 2023) (RS IN CRS.)

YEAR MARKET PRICE NAV RATIO

OF A SHARE

2018-19 420.00 106.65 3.94

2019-20 508.30 145.63 3.49

2020-21 174.60 96.74 1.80

2021-22 270.70 116.16 2.33

2022-23 273.30 130.16 2.10

Interpretation: As per as this ratio is concern the investment potential of a share.

It also offers opportunity to the company to buy back its own shares from the market.

Hear the company has higher ratio represent the ability to buy own shares in the

market. Ideal ratio is 2 so all year is above the 2.

71
Market Capitalization Ratio

Market Price of a Share x Total No. of Shares

Table: 20 Market Capitalization Ratio (2018 to 2023) (RS IN CRS.)

YEAR MARKET PRICE TOTAL NO. OF RATIO

OF A SHARE SHARES

2018-19 420.00 189.97 79787.40

2019-20 508.30 189.82 96485.15

2020-21 174.60 379.75 66304.35

2021-22 270.70 379.75 102798.33

2022-23 273.30 379.75 103785.67

Interpretation: The ratio provides a base for total valuation of a company based

on the market price of its equity. It immensely helpful in negotiating mergers,

takeover, acquisition act. Hear the company perfume well in market but decline way

so company should be improve & take expansion strategy.

72
Multi Step Profit & Loss Account (RS IN CRS.)

C.Y. P.Y.
Particulars
(2022-23) (2021-22)

Gross Sales 41603.80 38015.80

Less: Excise duty - -

Net Sales 41603.80 38015.80

-Administrative, Selling and Other Expenses 27843.50 24590.10

+ other income (operating) 329.50 218.20

Profit Before Depreciation Interest and Tax - PBDIT 13430.80 13643.90

Profit Before Depreciation Interest and Tax - PBDIT 13430.80 13643.90

-Depreciation 5916.00 4193.70

-Amortisation - 417.90

-Impairment - -

Operating Profit – PBIT 7514.80 9032.30

Operating Profit – PBIT 7514.80 9032.30

-Interest & Finance Charges 1199.30 296.70

+Other Income (Non-Operating) - -

Profit Before Tax & Extra Ordinary Items - PBTEOT 6315.50 8735.60

Profit Before Tax & Extra Ordinary Items - PBTEOT 6315.50 8735.60

+/ - extra ordinary items 17.50 11.8

Profit Before Tax for the year – PBT-Y 6333.00 8747.40

73
+/ - Prior year adjustments - -

Profit Before Tax 6333.00 8747.40

Profit Before Tax 6333.00 8747.40

Provision for tax:

Current income tax 1226.20 1007.60

+/ - deferred income tax liability - -

+ fringe benefit tax - -

+/ - tax adjustments for previous year - -

Total Income Tax 1067.00 1030.50

Profit After Tax – NP/PAT 5266.00 7716.90

Analysis and Interpretation:

It equally, and probably, more to study analysis the profitability of the company at

different step or at intermediate levels, of business activities, in relation to net sales. It

may be observed that in case of EIGHTEEN PIXELS INDIA PVT. LTD profit has

decline at every intermediate stage. However, since absolute figures are not amenable

to further analysis.

74
Horizontal Analysis:-

Horizontal Profit & Loss Acc of EIGHTEEN PIXELS INDIA PVT. LTD

for the year 2021-22 & 2022-23: (RS IN CRS.)

2022-23 2021-22 Increase/ Increase/

Particular (C. Y.) (P. Y.) Decrease Decrease

(%)

Sales 41603.80 38015.80 3588.00 9.44

(-) Administrative, Selling

and Other Expenses 27843.50 24590.10 3253.40 13.23

PBDIT 13760.30 13425.70 334.60 2.50

(-) Depreciation & 5916.00 4611.60 1304.40 28.28

Amortization 7844.30 8814.10 (-)969.80 (-)11.00

PBIT 545.90 308.50 237.40 76.95

(-) Interest Expenses 7298.40 8505.60 (-)1207.20 (-)14.19

PBT 1067.00 1030.50 (-)196.10 (-)15.99

(-) Income Tax 6231.40 7475.10 (-)1243.70 (-)16.64

PAT

75
Horizontal Balance Sheet of EIGHTEEN PIXELS INDIA PVT. LTD for

the year 2021-22 & 2022-23: (RS IN CRS.)

2022-23 2021-22 Increase/ Increase/

Particular (C. Y.) (P. Y.) Decrease Decrease

(%)

Sources of Funds:-

Owned Funds:

Share Capital 1898.80 1898.80 0.00 0.00

Reserves & Surplus 47530.80 42212.80 5318.00 21.17

49429.60 44111.60 5318.00 12.05

Loan Funds:

Secured Loans 2.90 17.10 (-)14.20 (-)83.04

Unsecured Loans 14126.40 11880.40 2246.00 18.90

14129.30 11897.50 2231.80 18.76

Total 63558.90 56009.10 7549.80 13.48

Application of Funds:-

1.)Fixed Assets

 Gross Block 70450.30 61437.50 9012.80 14.67

 Less: depreciation (-)26466.0 (-)20736.7 5729.30 27.62

 Net Block 43984.30 40700.80 3283.50 8.07

 Capital work in progress 1072.50 6497.60 (-)5425.10 (-)83.45

2.)Investments 12337.80 11813.00 524.80 4.44

3.)Current Assets, Loans &

Advances

 Inventories 32.10 34.40 (-)2.3 26.28

76
  Sundry Debtors 2134.50 2375.80 (-)270.82 (-)6.69

 Cash & Bank Balance 159.20 126.60 32.60 25.75

 Fixed Deposit 322.60 7.20 315.4 43.80

 Loans & Advances 23957.90 11186.10 12771.80 114.17

Less: Current Liabilities (-)17145.2 (-)16104.8 1040.4 6.46

Provisions (-)697.50 (-)627.60 69.90 11.13

Net Current Assets: 6115.20 (-)3002.30 614.61 (-)303.68

4.) Miscellaneous Exp. - -

Profit & Loss Account - -

Total 63559.00 56009.10 7549.90 13.48

Analysis and Interpretation of EIGHTEEN PIXELS INDIA

PVT. LTD :-

Profit & loss account

1. Net sales growth by 9.44%

2. Increase in expenses like Administrative, Selling and Other Expenses by

13.23% this is very high to camper to sales growth so it is not good for the

company.

3. Depreciation & Amortization even increase by 28.28% that shows that

company noncash charges increase not well for the company.

4. Interest Expenses is decline by 76.95% this is good for the company.

5. Decline in income tax by 15.99% due to low profit margin. This is not good

for company.

6. Decline in PAT by 16.64% is not good for company.

77
Balance Sheet

1. Total asset / liabilities up by 13.48%

2. Net worth up by 12.05%

3. Lone fund also decreased by 13.48% this shoe the company good will in the

market to give lone.

78
Vertical Analysis:-

Vertical Profit & Loss Acc of EIGHTEEN PIXELS INDIA PVT. LTD for

the year 2021-22 & 2022-23:

(RS IN CRS.)

Particulars Sche Current Year Previous Year

dule (2022-23) (2021-22)

Inner Outer Inner Outer

Column Column Column Column

Income

Sales 41603.80 38015.80

Less: return

Other Income 329.50 218.20

41933.30 38234.00

Expenditure

Administrative, Selling and Other 27843.50 24585.50

Expenses

Interest & Finance Charges 1199.30 296.70

Depreciation 5916.00 4193.70

Impairment loss on fixed assets 417.90

Adjustment due to (increase) / (-)2.30 (-)7.20

Decrease in stock of finished goods

& W.I.P

Provision for contingencies

34961.10 29510.20

79
Profit Before Taxation 6989.70 8747.40

Provision for Income Tax 1067.00 1030.50

Profit After Taxation 5730.00 7716.90

80
Vertical Balance Sheet of EIGHTEEN PIXELS INDIA PVT. LTD for the

year 2021-22 & 2022-23:

(RS IN CRS.)

Schedule Current Year Previous Year

Particulars
No. (2022-23) (2021-22)

I Sources of funds

1.) Shareholder‟s Funds:

a.) Capital 1898.80 1898.80

b.) Reserves & Surplus 47530.80 42212.80

2.) Loan Funds

a.) Secured Loans 2.90 17.10

b.) Unsecured Loans 14126.50 11880.40

Total 63559.00 56009.10

II Application of Funds

1.) Fixed Assets

a.) Gross Block 70450.30 61437.50

b.) less: depreciation (-)26466.00 (-)20736.70

c.) Net Block 43984.30 40700.80

d.) Capital work-in progress 1072.50 6497.60

2.) Investments 12337.80 11813.00

3.) Current Assets, Loans &

Advances:

a.) Inventories 32.10 34.40

b.) Sundry Debtors 2134.50 2375.80

81
 c.) Cash And Bank Balances 159.20 126.60

d.) Fixed Deposit 322.60 7.20

e.) Loans And Advances 23957.90 11186.10

Less:

Current Liabilities and Provisions

a.) Liabilities 17145.20 16104.80

b.) Provisions 697.50 627.60

Net Current Assets: 6115.20 (-)3002.30

4.) a.) Miscellaneous Expenditure - -

b.) Profit and Loss Account - -

Total 63559.00 56009.10

Analysis and Interpretation:

1. Income is increase as camper to previous year due to sales increase.

2. Expenditure more than the previous year this bed for company that‟s way

decline in profits margin.

3. Share holders fund is increase as camper to previous year this good for the

company.

4. In application of fund is not proper managed by the company because net

working capital is in negative but we show the some improvement in this. So,

this not good for the company.

5. As all aspect of the vertical analysis part over all company tries to increase his

performance by increases of his efficiency.

82
Vertical Analysis:-

Common size Profit & Loss Acc of EIGHTEEN PIXELS INDIA PVT.

LTD for the year 2021-22 & 2022-23:

(RS IN CRS.)

Particulars Current Year Previous Year

(2022-23) (2021-22)

Amount % Amount %

Sales 41603.80 100 38015.80 100

(-)Selling, Administrating & Other 27843.50 66.92 24371.90 64.11

Expenses

PDBIT 13760.30 33.07 13643.90 35.89

(-)Depreciation & Amortization 5916.00 14.22 4599.80 12.10

PBIT 7844.30 18.85 9044.10 23.71

(-)Interest 545.90 1.31 296.70 0.78

PBT 7298.40 17.54 8747.40 23.01

(-)Income Tax 1067.00 2.56 1030.50 2.71

PAT 6231.40 14.98 7716.90 20.30

83
Common size Profit & Loss Acc of EIGHTEEN PIXELS INDIA PVT.

LTD for the year 2021-22 & 2022-23:

(RS IN CRS.)

Current Previous

Particulars Year % Year %

(2022-23) (2021-22)

Sources of funds

1.) Shareholder‟s Funds:

a.) Capital 1898.80 2.99 1898.80 3.39

b.) Reserves & Surplus 47530.80 74.78 42212.80 75.37

2.) Loan Funds

a.) Secured Loans 2.90 0.00 17.10 0.03

b.) Unsecured Loans 14126.50 22.22 11880.40 21.21

Total 63559.00 100 56009.10 100

Application of Funds

1.) Fixed Assets

a.) Gross Block 70450.30 110.84 61437.50 109.69

b.) less: depreciation (-)26466.00 (-)41.64 (-)20736.70 (-)37.02

c.) Net Block 43984.30 69.21 40700.80 72.67

d.) Capital work-in progress 1072.50 1.69 6497.60 11.60

2.) Investments 12337.80 19.41 11813.00 21.09

3.) Current Assets, Loans & Advances:

a.) Inventories 32.10 0.05 34.40 0.06

b.) Sundry Debtors 2134.50 3.36 2375.80 4.24

84
 c.) Cash And Bank Balances 159.20 0.25 126.60 0.23

d.) Fixed Deposit 322.60 0.51 7.20 0.01

e.) Loans And Advances 23957.90 37.69 11186.10 19.97

Less:

Current Liabilities and Provisions

a.) Liabilities 17145.20 26.97 16104.80 28.75

b.) Provisions 697.50 1.10 627.60 1.12

Net Current Assets: 6115.20 9.62 (-)3002.30 (-)5.36

4.) a.) Miscellaneous Expenditure - -

b.) Profit and Loss Account - -

Total 63559.00 100 56009.10 100

85
Analysis and Interpretation:

1. As camper to sales to other selling and administrative & other expense cover

64.11% & 66.92% respectively for 2021-22 & 2022-23. cover the large

amount of revenue so that‟s not good for the company and mostly affected the

company performance.

2. Hear that profitability of company„s performance that sows as per profit

before tax is as camper to sale is 23.01 & 17.54 respectively 2021-22 & 2022-

23. That shows that company profit margin is low than capitalization rate that

is 23.77% but is not good for the company as well as investor.

3. According to reserve & surplus is 75.37% & 74.78% respectably to 2021-22 &

2022-23. That‟s show hat company is not maximize use of their funds in

implication is not proper meaner.

4. Company fixed asset is very high i.e. 72.67% & 69.21 % respectively 2021-22

& 2022-23. it shows that company bare low fix cost during operation that is

good for the company.

5. As camper the total asset to investment that 21.09 % & 19.41 % respectively

in 2021-22 & 2022-23 hear the company sales there in current year by same

proportion this not good for the company.

6. Overall performance of the company that better could in next year by that

increasing performance by sale and low cost that should be improving that.

86
Trend Analysis:- (RS IN CRS.)

Particulars 2022-23 2021-22 2020-21 2019-20 2018-19

Sales 41603.80 38015.80 35609.54 34048.32 25761.11

Index 1.61 1.48 1.38 1.32 1

PBDIT 13760.30 13643.90 15084.80 11953.93 10766.45

Index 1.28 1.27 1.40 1.11 1

PBIT 7844.30 9032.30 10986.88 8568.83 7333.80

Index 1.07 1.23 1.50 1.17 1

PBT 7298.40 8747.40 10652.75 8088.52 6879.70

Index 1.06 1.27 1.55 1.18 1

PAT 6231.40 7716.90 9426.15 7743.84 6244.19

Index 1.00 1.24 1.51 1.24 1

Share Holders Fund 49429.60 44111.60 36737.18 27643.97 20241.49

Index 2.44 2.18 1.81 1.37 1

Total Debt 14129.40 11897.50 5038.92 7713.65 6570.34

Index 2.14 1.81 0.77 1.17 1

Net Block 43984.30 40700.80 28024.97 25013.36 19030.65

87
Index 2.31 2.14 1.47 1.35 1

Net Current Assets 6115.20 (-)3002.30 (-)3616.91 (-)4000.26 (-)5922.94

Index 1.02 0.50 0.61 0.67 1

Total Assets/Total Liability 63559.00 56009.10 41776.12 35357.62 26811.80

Index 2.37 2.09 1.56 1.32 1

Trend Analysis and Interpretation:

1. In sale continuously increase. This is good performance of the company that is

currently company is market leader in telecom industry.

2. As per as profit after tax is concern high profit sow the high performance of

the company hear the company 2020-21 is very high but company should be

maintain that profitability.

3. Share holders fund continuous up by creating the good image in the market

that‟s shows the goodwill of the company.

4. Total debt of the company is in year 2020-21 is very low as camper the base

year of 2018-19 this is good for company but in year 2022-23 is very high so

that not maintain by the company.

5. net current asset of the company is in negative that not good for the company

6. Total asset/ total liability of the company is continues increasing that shows

that turnover year by year that‟s good for the company.

88
FINDINGS

89
 FINDINGS

 The current ratio of the company for the year 2018-19 is 0.59, 2019-20 is 0.73,

2020-21 is 0.73, 2021-22 is 0.82 and 2022-23 is 1.34, the current ratio has

increased by 23.73% in the year 2019-20, and in 2020-21 it remains constant.

There was increase positive value is found by 12.33% in year 2021-22 and

increased by 63.41% in the year 2022-23

 The quick ratio of the company for the year 2018-19 is 0.58, 2019-20 is 0.72,

2020-21 is 0.72, 2021-22 is 0.82, and 2022-23 is 1.28. The quick ratio has

increased by 24.14 % in the year 2019-20 and the year 2020-21 is increased by

1.39% there is increased positive value is found by 12.33% for the year 2021-

22 and increased by 56.10% in the year 2022-23.

 The debtors turnover ratio of the company for the year 2018-19 is 12.28 times,

2019-20 is 22.46 times, 2020-21 is 15.30 times, 2021-22 is 16.97 times, and

2022-23 is 18.45 times the debtors turnover ratio has increased by 82.90% in

the year 2019-20, and in 2020-21 it decreased by 31.88%. There was increase

positive value is found by 10.92% in year 2021-22 and increased by 8.72% in

the year 2022-23.

 The return on net worth of the company for the year 2018-19 is 30.85, 2019-

20 is 28.01, and 2020-21 is 25.66, 2021-22 is 17.49, and 2022-23 is 10.65.

The return on net worth has decreased by 9.21% in the year 2019-20, and

decreased by 8.39% in the year 2020-21 and again decreased by 31.84% in the

year 2021-22 and again decreased by 39.11% in the year.

 The earnings per share of the company for the year 2018-19 is 32.90, 2019-20

is 40.79, and 2020-21 is 24.82, 2021-22 is 20.32, and 2022-23 is 13.87. The

earnings per share has increased by 23.98% in the year 2019-20, and

90
 decreased by 39.15% in the year 2020-21 and again decreased by 18.13% in

the year 2022-22 and again decreased by 31.74% in the year 2022-23.

 The return on capital employed of the company for the year 2018-19 is 16.87,

2019-20 is 26.80, and 2020-21 is 24.74, 2021-22 is 28.35 and 2022-23 is 0.64.

The return on capital employed has increased by 58.87% in the year 2019-20,

and decreased by 7.69% in the year 2020-21 and increased by 14.59% in the

year 2021-22 and again decreased by 97.74% in the year.

 The return on net asset value of the company for the year 2018-19 is 106.65,

2019-20 is 145.63, and 2020-21 is 96.74, 2021-22 is 116.16, and 2022-23 is

130.16. The net asset value has increased by 36.55% in the year 2019-20, and

decreased by 33.57% in the year 2020-21 and again increased by 20.01% in

the year 2021-22, and again increased by 12.05% in the year 2022-23.

 The debt equity ratio of the company for the year 2018-19 is 0.32, 2019-20 is

0.29, and 2020-21 is 0.14, 2021-22 is 0.27, and 2022-23 is 0.28. The debt

equity ratio has decreased by 9.38% in the year 2019-20, and decreased by

51.72% in the year 2020-21, increased by 92.29% in the year 2021-22 and

again increased by 3.70% in the year 2022-23.

 The proprietary ratio of the company for the year 2018-19 is 0.75, 2019-20 is

0.78, and 2020-21 is 0.88, 2021-22 is 0.79, and 2022-23 is 0.78. The

proprietary ratio has increased by 4.00% in the year 2019-20, and increased by

11.54% in the year 2020-21 and decreased by 10.23% in the year 2021-22 and

again decreased by 1.27% in the year 2022-23.

 The total assets to debt ratio of the company for the year 2018-19 is 4.08,

2019-20 is 4.58, and 2020-21 is 8.29, 2021-22 is 8.71, and 2022-23 is 4.50.

The total asset ratio has increased by 12.25% in the year 2019-20, and

91
 increased by 81.00% in the year 2020-21 and decreased by 43.18% in the year

2021-22 and again decreased by 4.46% in the year 2022-23.

 The liabilities to equity ratio of the company for the year 2018-19 is 4.08,

2019-20 is 4.58, and 2020-21 is 8.29, 2021-22 is 8.71, and 2022-23 is 1.28.

The liabilities to equity ratio has decreased by 3.03% in the year 2019-20, and

decreased by 10.94% in the year 2020-21 and increased by 11.40% in the year

2021-22 and again increased by 0.79% in the year 2022-23.

 The fixed asset turnover ratio of the company for the year 2018-19 is 1.35,

2019-20 is 1.36, and 2020-21 is 1.27, 2021-22 is 0.93, and 2022-23 is 0.94.

The fixed asset turnover ratio has increased by 0.70% in the year 2019-20, and

decreased by 6.62% in the year 2020-21 and again decreased by 26.77% in the

year 2021-22 and increased by 1.07% in the year 2022-23.

 The net worth turnover ratio of the company for the year 2018-19 is 4.08,

2019-20 is 4.58, and 2020-21 is 8.29, 2021-22 is 8.71, and 2022-23 is 0.84.

The net worth turnover ratio has decreased by 3.15% in the year 2019-20 and

decreased by 21.14% in the year 2020-21 and decreased by 11.34% in the year

2021-22 and again decreased by 2.32% in the year 2022-23

 The working capital turnover ratio of the company for the year 2018-19 is -

4.35, 2019-20 is-8.51, and 2020-21 is -9.85, 2021-22 is -12.66, and 2022-23 is

6.80. The working capital turnover ratio has decreased by 95.63% in the year

2019-20, and decreased by 15.75% in the year 2020-21 and again decreased

by 28.53% in the year 2021-22 and increased by 153.71% in the year 2022-23.

 The PBDIT ratio of the company for the year 2018-19 is 41.79%, 2019-20 is

35.11%, and 2020-21 is 42.36%, 2021-22 is 35.89%, and 2022-23 is 32.28%.

The PBDIT ratio has decreased by 15.98% in the year 2019-20, and increased

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 by 20.65% in the year 2020-21 and decreased by 15.27% in the year 2021-22

and again decreased by 10.05% in the year 2022-23.

 The PBIT ratio of the company for the year 2018-19 is 28.47%, 2019-20 is

25.17%, and 2020-21 is 30.85%, 2021-22 is 23.76%, and 2022-23 is 18.06%.

The PBIT ratio has decreased by 11.59% in the year 2019-20, and increased

by 22.57 in the year 2020-21, decreased by 22.98% in the year 2021-22 and

decreased by 23.98% in the year 2022-23.

 The PBIT ratio of the company for the year 2018-19 is 26.71%, 2019-20 is

23.75%, and 2020-21 is 29.92%, 2021-22 is 23.00% and 2022-23 is 16.80%.

The PBT ratio has decreased by 11.08% in the year 2019-22, and increased by

25.99% in the year 2020-21 and again decreased by 23.12% in the year 2021-

22 and decreased by 26.97% in the year 2022-23

 The net profit ratio of the company for the year 2018-19 is 24.24%, 2019-20 is

22.74%, and 2020-21 is 26.47%, 2021-22 is 20.30% and 2022-23 is 12.66.

The net profit ratio has decreased by 6.19% in the year 2019-20, and

decreased by 16.40% in the year 2020-21 and again decreased by 23.31% in

the year 2021-22 and decreased by 37.63% in the year 2022-23.

 The net profit ratio of the company for the year 2018-19 is 12.77, 2019-20 is

12.46, and 2020-21 is 7.03, 2021-22 is 13.32 and 2022-23 is 18.11. The net

profit ratio has decreased by 2.43% in the year 2019-20, and decreased by

43.57% in the year 2020-21 and increased by 89.47% in the year 2021-22 and

again increased by 35.96%.

 The market price to NAV ratio of the company for the year 2018-19 is 3.94,

2019-20 is 3.49, and 2020-21 is 1.80, 2021-22 is 2.33 and 2022-23 is 2.10.

The market price to NVA ratio has decreased by 11.42% in the year 2019-20,

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 and decreased by 48.42% in the year 2020-21 and increased by 29.44% in the

year 2021-22 and decreased by 9.87% in the year.

 The market capitalization ratio of the company for the year 2018-19 is

79787.40, 2019-20 is 96485.15, and 2020-21 is 66304.35, 2021-22 is

102798.33 and 2022-23 is 103785.67. The market capitalization ratio has

increased by 20.93% in the year 2019-20, and decreased by 31.28% in the year

2020-21 and increased by 55.04% in the year 2021-22 and increased by 0.96%

in the year 2022-23.

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SUGGESTIONS

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 SUGGESTIONS

1. The company should maintain an adequate cash and bank balance in order to

meet the emergency requirements.

2. The current ratio of the company has decreasing year to year. The company must

utilize their current asset accurately.

3. The sales of the company go on increasing better to increase sales for more profit

in future.

4. Net profit of the company has decreased when compare to last year. Better to

decrease the unnecessary expenses of the company to increase the profit.

5. The Net working capital of the company has negative. Shows excess of current

liabilities over current assets. It must positive for future years.

6. Loans of the company increasing in year 2021 compare to previous year, it shows

that the profit was distributed to the interest, better it should not the same for next

year.

7. Better to maintain the same amount of fixed assets in future for full utilize fixed

assets.

8. Allowing debt for long period by company shows it is not strict in its debt

collection. Better it should collect its debt as early.

9. Better to maintain high return on share holder‟s investments.

10. Better to curtail the debenture interest to avoid paying interest.

11. For the smooth operation of the company if must make sure that it is made liquid

in the coming year, because right now a lot rests on the operation of the business.

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CONCLUSION

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 CONCLUSION

The company has been doing their activity effectively and efficiently. The company

has a sound long term solvency. The company can rise from the financial crush it is

in right now by taking proper steps to increase its sales of production and to minimize

cost by maximize utilization of resources. A already known there is a thin line

between profitability and liquidity and the company lost two years made a profit has

very low and another two making better profit. This shows the company in a good

position and the management of the company has much as better so that does way

maintain the market leadership.

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BIBLIOGRAPHY

99
 BIBLIOGRAPHY
 Pandey, I.M. (2018), “Financial Management (Eighth Revised Edition)”,Vikas

Publishing House Pvt. Limited, New Delhi.

 Pandey, I.M. (2018), “Financial Management”, Vikas Publishing House Pvt.

Limited, New Delhi.

 Porterfield (2018), “Investment Decisions and Capital Costs”, Prentice Hall, Engle

Wood Cliffs, N.J.

 Porwal, L.S.(2020), “Capital Budgeting in India”, Sultan Chand and Sons, New

Delhi.

 Khan M.Y. and Jain, P.K. (2018), “Financial Management: Text and Problems”,

Tata

 McGraw-Hill Publishing Company Limited, New Delhi.

 Kothari, C.R. (2019), “Research Methodology: Methods and Techniques”, Willey

Eastern

 Limited.

 Kuchhal, S.C. (2023), “Corporate Finance: Principles and Problems”, Chaitanya

 Annual Reports of eighteen pixels india pvt. ltd s 2018-2023.

 Departmental Records.

Websites:

 http://www.moneycontrol.com/financials/muthootfinance/balance-

sheet/MF10

 http://www.muthootfinance.com/investors/annual-reports

 http://www.muthootfinance.com/investors/financial-reports

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