SUMMER INTERNSHIP

PRESENTATION
ON
RATIO ANALYSIS

Presented By:
Name: Sujit Tigga
Enrollment No. : BB/15/003
Course: BBA 5th SEMESTER
 TABLE OF CONTENT

• INTRODUCTION
• OBJECTIVE OF THE STUDY
• RESEARCH METHODOLOGY
• DATA ANALYSIS
• FINDINGS
• SUGGESTION
• CONCLUSION
 INTRODUCTION OF HEC
• Set-up in the year 1958
• Sri Avijit Ghosh (Chairmen & Managing Director)
• Area of around 2100,000 sq.m.
• Headquarter in Ranchi (capital city of Jharkhand)
• Heavy engineering corporation ltd. Is supplier of capital equipment in India for steel, mining
,railways, power, defense, space, research, nuclear, strategic sector.
• HEC has facilities starting from steel melting, casting, forging, fabrication, machining,
assembly and testing. It has its own in –house research and product development wing to
deliver products suiting customers specification,
 HEC PLANTS

 Heavy machine tools Plant(HMBP) it is engaged in design, it has fenced area of 5,70,000
sq.m. And a floor area of nearly 200,000 sq.m.

 Heavy machine Tool Plant(HMTP) it design and manufacture medium &heavy duty and
conventional machine tools, covers area 2,13,500.

 Foundry Forge Plant(FFP)area of plant is 13,16,930 sq.m.

 INTRODUCTION OF RATIO ANALYSIS

• Ratio analysis is a form of financial statement

analysis that is used to obtain a quick
indication of a firm’s financial performance in
several key areas. the ratio are categorized as
short-term solvency ratios, debt management
ratios, asset management ratios, profitability
ratios, and market value ratio.
 OBJECTIVE OF THE STUDY
• Short term and long term financial position of the business can be
measured by calculating liquidity and solvency ratios.
• Facilitating comparative analysis to discover the plus and minus points.
comparison with other competitive firms can also be made.
• Indicating overall efficiency, the profitability can be known by calculating
financial ratios.
• Help in financial forecasting and planning. calculated for a number of years
work as a guide for the future .
• Operational efficiency of the business can be determined by calculating
operating/activity ratios.
 RESEARCH METHODOLOGY

• The preparation of this project the information

collected from personal interaction with financial
Assistant manager Asha Singh(FFP), Monisha
Sharma(HMBP), Pashupati Nath sinha(HMTP) ., and
other staff member and the major source of data for
this project was collected.
• Place of study
• Source of data
 Current ratio
• Current ratio is one of the most fundamental
liquidity ratio. It measures the ability of a business to
repay current liabilities with current assets.
• Ideal ratio is 2:1
• It means CA more than CL and the company
should not face any liquidity problem.
• A current ratio below 1 means that CL more
than CA, which may indicate liquidity problem.
 Current ratio=current assets/current liabilities

YEAR CURRENT ASSETS CURRENT RATIO

LIABILTIES
31.03.14 78633.16 72190.57 1.08
31.03.15 54234 71510 0.75
31.03.16 50756.06 91604.17 0.55
 Current Ratio index
1.2

0.8

0.6

0.4

0.2

0
2014 2015 2016
 Quick Ratio
• It is a relationship between liquid assets and
liquid liabilities.
ideal ratio is 1:1
The quick ratio is a measure of how well a
company can meet its short term financial
liabilities. that provides rigorous assessment of
company ability to pay its current liabilities.
 Quick Ratio= quick assets-(stock, prepaid
expenses)/Quick liabilities
Year Quick Assets Quick liabilities Ratio
31.03.2014 49420.14 72190.57 0.68
31.03.2015 30623 71510 0.42
31.03.2016 34432.58 91604.17 0.37
 Quick ratio index
0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2014 2015 2016
 Gross profit Ratio
• GP Ratio is a profitability ratio that shows the
relationship between gross profit and net
sales revenue. It is a popular operational
performance of the business.
 Gross Profit ratio=Gross profit
net sales *100
year Gross profit Net sales 100 ratio
2013-14 57713 42539 100 135
2014-15 60383 40618 100 148
2015-16 62529 44463 100 140
 Gross profit ratio
150

145

140

135

130

125
2013-14 2014-15 2015-16
 Net profit ratio
• The net profit percentage is the ratio of after-
tax profits to net sales. It reveal the remaining
profit after all costs of production,
administration, and financing have been
deducted from sales, income tax recognized.
 Net profit ratio=net profit/net
sales*100
year Net profit Net sales 100 ratio
2013-14 29931 42539 100 70
2014-15 24169 40618 100 59
2015-16 14477 44463 100 33
 findings
1.current ratio-High ratio indicates under trading and
over capitalization.
Low ratio indicates over trading and under
capitalization.
2.Quick ratio-of the firm is not better liquidity position.
means it has insufficient liquid asset.
3.Gross profit- its not much performance ,during year
2014-15 it increased ,but again 2015-16 its decreased.
4.Net profit-also net profit not much perform,
during year to back year.
 Suggestion
• It should increase the current ratio so, that
could meet short term obligation.
• And also can seek increase gross profit and
net profit.
 CONCLUSION
• From the study of ratio analysis at HEAVY
ENGNEERING CORPORATION LTD. ,I found out
that company’s performance in the last three
years was Unsatisfactory and it is not well
established in market. Total revenue that a
company is generating through sales and
distribution of heavy machine.
THANK YOU