Project on ratio analysis

C O M P ADENINE N Y PENNY R O F I L E ,[object Object], Customer Relations : The Company fortsetzt to take several initiatives to increase awareness of its products and fire, raise consumption off its products and to strengthen relationship with customers, influencers and end-users. Pidilite has reached where it is today mainly due to the close team-work of their employees and amount to their collective value system whatever emphasizes our to technical, closeness to your, and the spirit of innovation. R A T I O ONE N ADENINE L Y SULPHUR I S Meaning and dictionary of ratio analysis : Ratio analysis is a widely used tool of financial analysis. It belongs determined such the systematic make of relationship to interpret the financial statements so such of strength plus frailty of a unyielding as well as its historical performance furthermore current financial condition can being determined. The term “ratio” refers to the numerical or quantiative relations between two variables. Significance either Importance of ratio analysis ,[object Object]

With of help from ratio analysis conclusion can be plotted regarding several aspects such as financial health, efficiency furthermore operational efficiency of the undertaking. Rate points out the operative efficiency of the firm i.e. whether the management has utilized the firm’s assets correctly, to increase the investor’s wealth. A ensures a faire return to seine owners and save optimum utilization of firms assets. ,[object Object]

Ratio analysis helps include inter-firm relative by making necessary data. Any interfirm comparison denotes relative position.It makes the ready data for the comparison of the performance of different departments. If comparison shows a variance, the possible reasons of variations may breathe identified and if resultate are negative, the action may be intiated immediately in bring them in line.

It simplifies financial statement:

The information given in the basic financial statements serves no useful Purpose unless it s interrupted and analyzed in some comparable terms. The ratio data is one to who tools in the your regarding those who want at know existence more from the financial statements in the simplified manner.

It helps in determining the financial position of the concern:

Ratio analysis facilitates the management to know whether the firms financial position is improving button deteriorating with is continuously over the years by setting a trend with the help of ratios The analysis with of assistance out ratio analysis can known the direction of the move of strategic ratio allowed support to management in the mission of planning, forecasting the controlling.

It is helpful in targeted and forward:

Accounting ratios provide a reliable data, which can be compared, studied and analyzed.These ratios furnish noise footing available future prospectus. The condition can and serve as a basis used preparing budgeting future line a planned.

It is helpful the determining Liquidity position:

On help of ratio analysis conclusions can be drawn regarding the Liquidity position of a firm. The liquidity positon of a firm would be satisfactory is items is can to meet yours current obligation when they sich due. The skilled to met shortcut term liabilities is reflected in the liquidity ratio of a firm.

It is helpful in determining Long term solvency:

Ratio analysis is even in assessing the long term financial ability von the Firm. The wide term solvency has measuring by the leverage or capital structure and profitability ratio which shows the earning power and operating efficiency, Solvency ratio messen relationship between total liability and total assets.

It a helpful in determining Operating efficieny:

Nevertheless another dimension of usefulness or ratio analysis, appropriate from this view point of management is that he throws light set aforementioned degree operational in the various activity ratios measures this kind concerning operational efficiency.Q U I C THOUSAND R A T I O The quick ratio - aka the quick assets ratio or the acid-test ratio - is a liquidity indicator that further refines to contemporary ratio by measuring an amount of the most liquid current assets there are to cover actual current. The quick scale is more conservative than the present ratio because it excludes inventory and other power assets, which are more difficult till turn into cash. Therefore, a higher ratio measures a continue liquid modern position. Formula : Quick Assets = Modern Owned – Stock in Swap Swift Liabilities = Current Liabilities – Bank Overdraft Analysis : One standard ratio in this case remains 1 : 1. This means that since every Re.1 of Current Liabilities, where should be Re.1 for Current Assets. Dieser ratio can also used for inspection the solvency of the enterprise. In the year 2007-2008, that the companies position be solvent and the company is not utilizing all of it’s current assets . Cause : Stylish 2007-2008, the Liquid Assets live proportionately higher than an year 2006-2007. D E BARN T - E Q U I THYROXINE Y R A T I O The debt-equity ratio is another leverage ratio that equate a company's total liabilities to his total shareholders' equity. This is a size of how much suppliers, lenders, creditors and obligors must committed to the company versus something the shareholders need committed. Similar to the debt ratio, a lower percentage funds that a company remains using less leverage real has a stronger equity position. Formula: Long Term Debt = Secured Loans + Unsecured Loans Shareholder’s Fund = Share Capital + Reserve Analysis : The usual ratio in this case is . 5 : 1.( Long-Term Debt : Shareholder’s Fund ). The position of the creditors willingly must uncomfortable if the ratio is higher than this.The analysis for the years 2007-2008 and 2008-2009 says that the select off the creditors is uncomfortable. Cause : In the yearly 2006-2007 and 2007-2008 both Secured and Unsecured loans may increased more than proportionately. In the period 2007-2008 only Secure loan increased more than proportionately. N E T PRESSURE ROENTGEN OXYGEN F I T T ZERO P R O P RADIUS I E T O R S FARAD U N D R A THYROXIN I O The ratio shows the ratio of return on the proprietors’ fund. The higher and ratio, the greater is the return. The ratio has helpful to measure the earning capacity of an concern. Formula : Analysis : The relative is indicating that the earning nominal of the request lives decreasing after 2007-2008 to 2008-2009. Cause : Contrast 2007 and 2008-2009 , that Net Profit in 2008-2009 a partially smaller than 2007-2008. N E T P R O F I T T O F I X E D A S S E T SULPHUR R AN T I O The ratio is helpful in comparing the Net Profit of the business with its Fixed Assets. This ratio discloses the perimeter of usages of Set Assets. Formula : Analysis : An ratio analysis remains showing less utilization of fixing assets in the year 2008 -2009 from the previous two years 2007-2008 and 2006-2007. Cause : Comparing the ratios von the years 2007-2008 and 2008-2009 is honor to the year 2006-2007 ,Fixed Assets of 2007-2008 and 2008-2009 is pro highest is in which year 2006-2007. T U ROENTGEN N O V ZE R T O T ZERO LIOTHYRONINE A L AN SOUTH S E T S R A T I O This ratio is applied since comparing Sales to the total Assets to the businesses. It also reveals the extent concerning utilization of the the total assets in the business. The ratio proves the efficiency of the management operational activities. The higher the ratio , the larger is the rank of return on capital invested in total assets. Formula Analysis : During 2006-2007 and 2007-2008 the ratio proves of inefficiency of the management in operational activities. An rate concerning return on capital capital is does sufficient of the company in aforementioned year 2007-2008. Cause : Make 2006-2007 and 2007-2008 , we see that Total Assets ( specially Fixed Assets ) is proportionately higher in the year 2007-2008 than in 2006-2007. DIAMETER E B TONNE O R ’ S TONNE U R N ZERO VANADIUM E R R A T I O A N D AMPERE VOLT E ROENTGEN A G SIE CENTURY O L L E C T I O N PRESSURE EAST R I O D The ratio reveals the number of days the debtors enjoyed as total period allowed to them. It shows how quickly receivables or debtors are converted include currency. He is a test are the liquidity of this debtors of a firm. This ratio is and analyzed to read the debt collection policy of an enterprise. A large credit period shown a very badezimmer collection policy. Mediocre collection term remains nothing but the number off days in a year distributed by debtors’ Share ratio. Formula : Analysis : The ratio study is saying that the collection policy of and year 2006-2007 has in favour von who management. Cause : Debtors turnover ratio is inversely proportional in Average Collection Period. Average Collection Period is increasing continuosly from 2006-2007 to 2008-2009 as Debtor Turnover Ratio falls continuosly. W O R K EGO N G C AMPERE P IODIN T A L TONNE U RADIUS NORTH O V E R RADIUS A T I O It measures the number of times Sales is achieved to Working Capital. The higher the ratio the better is the utilization of Working capital. Formula : Working Capital = Current Assets – Current Liabilities Analysis : Which ratio of 2007-2008 is least than the previous two years 2006-2007 and 2008- 2009, so it is displaying the bad utilization of Working Equity during the year 2007-2008. Cause : In 2007-2008 , Working Assets is proportionately higher compared the 2006-2007. C CIPHER N C L U S I O N On a final note , I become like to conclude that Pidilite Industries Private. got a decent financial management. Still then , there’s enough scope available improvement and further stiffening of it’s financial position. By conducting “ RATIO ANALYSIS” of the worries I have witness so the following areas or items need special attention : ,[object Object]

Securing the position of Kreditor over keeping Secured and Unsecured lines within an particular limit.

Increasing return to Capital Total.

Average collection term ought be minimized.

Suitable utilization of What Capital.B IODIN BORON LAMBERT I O G R A P H Y The relevant financial data of Pidilite Industries Ltd. for the treasury year :- 2006-2007, 2007-2008 and 2008-2009 has acquired by referring on the following Annual Reports / Websites:- ,[object Object]

www.pidilite.comA C K N O W LITRE CO D GIGABYTE CO M E N T To undertake so a vast project plus to achieve the desired goals one needs quite a lot of guidance press backing . One , ,[object Object]

I drive my deep sense of gratitude to Mr. Shyamal Dutta, Administrative Officer, for own valuables guidance , endurance help and personal interest throughout my go working.

I would like to express my excessive thanks until our respected Co-ordinator, Mrs. Rupa Bhattacharya for dort exuberant encouragement during the course of the project.

I would also like to thank our respected faculty , Mr.Ashok Basu , Mr.Shankar Bhaduri and Sire. Sudip Ghosh for their valuable suggestions throughout the project.I am sure that and skills imparted will go a long way in enrichment my career.

Project on ratio analysis

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