CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
1) CURRENT RATIO:
Current ratio =
Year
Current assets
------------------------Current liabilities
2009-10
Current
Assets
7353.64
Current
liabilities
1570.82
Ratio
4.68140207
2010-11
3871.45
2246.55
1.723286818
2011-12
2384.93
2599.38
0.917499558
2012-13
3227.07
4655.5
0.69317367
2013-14
3735.52
5646.72
0.661538
Figure 1 : CURRENT RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows that the current ratio on FY year 2009-10
was 4.68 and then it dip to 1.33 in the FY 2010-11, further move downward to
0.92 and in the FY 2012-13 it dip down to 0.69 and finally in the FY 2013-14 it
again moved down to 0.66. The bench mark current ratio for Infrastructure
Industries is 2:1. The above table shows current ratio is less than 2. Over the
year under study it has been observed that the company has not maintained
favourable liquidity position and this can be treated as a unhealthy sign.
2) LIQUID RATIO:
Liquid ratio =
Liquid assets
----------------------Liquid liabilities
Quick Assets = Total Current Assets (minus) Inventory
Year
Quick Liabilities
Quick ratio
2009-10
Quick
Asset
7058.59
1570.82
4.493570237
2010-11
3578.76
2246.55
1.593002604
2011-12
2084.64
2599.38
0.801975856
2012-13
2786.39
4655.5
0.59851573
2013-14
3466.01
5646.72
0.613809
Figure 2 : LIQUID RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the liquid ratio during the study period
except in the FY 2011-12 to 2013-14 is more than the bench mark Liquid ratio
(i.e.) 1:[Link] reached the highest 4.49 in the FY 2009-10 and then in FY 2010-11
it came down to 1.59 and eventually went on decreasing to 0.61 in FY 2013-14.
This shows that the company is not enjoying credit worthiness. It is clear that
the liquid ratio of the company is at an decreasing rate and it is not close to
standard ratio and this can be treated as a unhealthy sign. So we can understand
that the company is not in a position to meet the short term obligations.
3) ABSOLUTE LIQUIDITY RATIO:
Cash + bank +marketable securities
Absolute liquidity ratio = ----------------------------------------------------Current liabilities
Year
2009-10
Cash
and
securities
5652.9
2010-11
Current
Liabilities
Ratio
1570.82
3.598693676
2175.92
2246.55
0.968560682
2011-12
87.65
2599.38
0.033719579
2012-13
251.01
4655.5
0.05391687
2013-14
301.82
5646.72
0.05345
Figure 3 : ABSOLUTE LIQUID RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the absolute ratio for the study period FY
2009-10 to 2013-14. There is decrease in the absolute ratio. It was 3.60 in the
FY 2009-10. In FY 2010-11 it decreased to [Link] it decreased to 0.34 in
FY 2011-12. Then in FY 2012-13 and FY 2013-14 it was 0.05
4) DEBT EQUITY RATIO:
Debt equity ratio =
Year
2009-10
Outsiders
fund
4494.54
2010-11
Outsiders funds
-----------------------------Proprietors funds
Proprietors fund Ratio
7873.28
0.570859921
6114.25
9339.24
0.654683893
2011-12
5257.55
11686.96
0.449864635
2012-13
7526.13
11907.44
0.63205273
2013-14
4272.61
15152.19
0.28198
Figure 4: DEBT-EQUITY RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the debt equity relationship of the Reliance
Infrastructure company during the study period. The Bench Mark Debt-Equity
ratio is 2:1. During the FY 2009-10 it was 0.57 and then reached its highest in
the next year and from there it began to slope downwards and ultimately came
to 0.28 in the year 2013-14. In all the years the equity is more when compared
with borrowings. Hence the company is maintaining its debt position.
5) PROPRIETARY RATIO:
Proprietary ratio =
Year
2009-10
Proprietor
s fund
7873.28
2010-11
Proprietors funds
--------------------------Total tangible assets
Tangible assets
Ratio
2647.71
297.3618712
9339.24
2806.35
332.7895665
2011-12
11686.96
3056.49
382.365393
2012-13
11907.44
3331.37
357.433728
2013-14
15152.19
3468.61
436.8375
Figure 5: PROPRIETARY RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows that the Proprietors fund ratio as on FY
2009-10 was 297.36 which gradually increased till FY 2013-14. This shows that
the firm has good investment in fixed asset and favourable long term solvency
position over the year under study.
6) FIXED ASSETS TURNOVER RATIO:
Fixed assets turnover ratio =
Net sales
------------------Fixed assets
Year
2009-10
Net sales
4607.89
Fixed assets
2873.71
Ratio
1.603463815
2010-11
6575.25
3104.36
2.118069425
2011-12
7501.2
3636.5
2.062752647
2012-13
10958.79
3904.59
2.80664295
2013-14
10908.06
4079.41
2.673931
Figure 6: FIXED ASSET TURNOVER RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the relationship between the fixed assets
and sales. The sale is 1to 2 times more than the fixed assets from FY 2009-10 to
2009 -10. This indicates that fixed assets turnover ratio of the company is
gradually increasing which is a healthy indication that less amount of money is
tied up with fixed assets and thus fixed assets are effectively used to generate
the sales.
7) WORKING CAPITAL TURNOVER RATIO:
Working capital turnover ratio =
Year
Net sales
Net sales
---------------------------Net working capital
Net
working Ratio
capital
5782.82
2009-10
4607.89
0.796824041
2010-11
6575.25
1624.9
4.046556711
2011-12
7501.2
(214.45)
(34.9787829)
2012-13
10958.79
(1428.43)
(7.67191252)
2013-14
10908.06
(1911.2)
(5.70744)
Figure 7: WORKING CAPITAL TURNOVER RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram indicates that working capital turnover ratio is
negative. Generally a negative working capital is a sign of managerial efficiency
in a business with low inventory and accounts receivable, which means they
operate on an almost strictly cash basis.
8) TOTAL ASSETS TURNOVER RATIO:
Total assets turnover ratio =
Year
2009-10
Total
assets
12367.82
2010-11
Total assets
---------------------Net assets
Net sales
Ratio
4607.89
2.684052788
15453.49
6575.25
2.350251321
2011-12
16944.51
7501.2
2.258906575
2012-13
19433.57
10958.79
1.77333173
2013-14
19424.8
10908.06
1.780775
Figure 8: TOTAL ASSET TURNOVER RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the relationship between the total assets to
net sales. During all the study period years the relationship between sales to
total assets is Low. The ratio increased from 2.68 (2009-10) to 1.78 (2013-14)
due to the heavy rise in the sales.
9) CAPITAL TURNOVER RATIO:
Capital turnover ratio =
Year
Net sales
Sales
---------------------Proprietors fund
2009-10
4607.89
Proprietor
s fund
7873.28
Ratio
2010-11
6575.25
9339.24
0.704045511
2011-12
7501.2
11686.96
0.641843559
2012-13
10958.79
11907.44
0.92033132
2013-14
10908.06
15152.19
0.7199
0.585256716
Figure 9: CAPITAL TURNOVER RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the relationship between the sales and
proprietors funds. It indicates that the sales are in between 0.58 and 0.90 times
less than the proprietor's funds. It shows the firms is not maintaining the better
utilization of own funds.
10) Return on total assets:
Return on total assets =
Year
2009-10
Net profit
------------------- x100
Total assets
Net
profit Total assets
After Tax
650.34
12367.82
Ratio
0.052583236
2010-11
801.45
15453.49
0.051862071
2011-12
1084.63
16944.51
0.064010703
2012-13
1138.88
19433.57
0.05860375
2013-14
1151.69
19424.8
0.05929
Figure 10: RETURN ON TOTAL ASSET
INTERPRETATION AND ANALYSIS
The above table and figure as on FY 2010 remain modest at 6% indicating that
the long term fixed asset investments are not yet effectively managed to
generate net income.
11) GROSS PROFIT RATIO:
Gross profit ratio =
Gross profit
----------------------------------- x 100
Net sales
Year
Net sales
2009-10
Gross
Profit
4607.89
4607.89
40.4825202
2010-11
2028.1
6575.25
30.84445458
2011-12
2530.7
7501.2
33.7372687
2012-13
3045.83
10958.79
27.7934881
2013-14
2949.67
10908.06
27.0412
Ratio
Figure 11: GROSS PROFIT RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the relationship between the gross profit
and net sales in percentage. During 2009-10 the gross profit position was
40.48% and in the very next year it slashed down to 30.84% and again raised to
33.73% and finally reached to 27.04% in the year 2013-14. However it can be
noticed that sales are increasing but gross profit is not increasing
proportionately every year. This show there is low efficiency in managing
purchases, production, labour, sales and moderate amount is available to meet
the other expenses.
12) NET PROFIT RATIO:
Net profit sales =
Net profit
----------------- x 100
Net sales
Year
2009-10
Net Profit
650.34
Net sales
4607.89
Ratio
2010-11
801.45
6575.25
12.18889016
2011-12
1084.63
7501.2
14.45941983
2012-13
1138.88
10958.79
10.3923882
2013-14
1151.69
10908.06
10.55816
14.11361816
Figure 12: NET PROFIT RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the relationship between net profit and net
sales. During 2009-10 it was 14.11% on sales and in2010-11 it decreased
to12.18%. There is an further in percentage of 10.55 in 2013-14 The sales of the
organization are also increasing and the profit of the organization is also
increasingly proportionately .This shows Reliance infrastructure limited have
good control over direct and indirect cost and they have large amount available
to meet non-operating expenses/losses.
13) RETURN ON SHAREHOLDERS FUND
Net profit after Interest and Tax
Return on shareholders fund = -------------------------------------- X 100
Shareholders fund
Year
2009-10
Profit
After Proprietor Ratio
Tax
s fund
650.34
7873.28
8.260089823
2010-11
801.45
9339.24
8.581533401
2011-12
1084.63
11686.96
9.280685482
2012-13
1138.88
11907.44
9.56444038
2013-14
1151.69
15152.19
7.600815
Figure 8: RETURN ON SHAREHOLDER'S FUND
INTERPRETATION AND ANALYSIS
The above Table and Diagram shows that there is a fluctuation in this ratio
and this is due to fluctuating debt capital and interest burden on the
company. It is evident from this that the percentage return on Owners
fund is between 7-9 %.
a) 14) ADMINISTRATIVE AND SELLING EXPENSES RATIO:
Administrative and Selling expenses
Administrative expenses ratio = ----------------------------------- x 100
Sales
Year
2009-10
Administration&
Selling expenses
543.41
Net sales
Ratio
4607.89
11.79303325
2010-11
664.99
6575.25
10.1135318
2011-12
847.3
7501.2
11.29552605
2012-13
1277.02
10958.79
11.6529288
2013-14
1040.68
10908.06
9.540468
Figure 14: ADMINSTRATION AND SELLING EXPENSE RATIO
INTERPRETATION AND ANALYSIS
The above table and diagram shows the relationship between the administration
and selling expenses and sales in percentage. The administration and selling
expenses during 2009-10 is very high and gradually decreased to 9.54 in year
[Link] shows there is a good control on expenditure and may be one of
the reasons to net profit during the study years.
15) COST OF ENERGY EXPENSE RATIO
Cost of energy
Expenses ratio = -----------------------------------------Sales
Year
Cost of Energy
Net sales
x 100
Ratio
2009-10
1087.56
4607.89
23.60212592
2010-11
1532.43
6575.25
23.30603399
2011-12
2487.69
7501.2
33.16389378
2012-13
4253.99
10958.79
38.8180629
2013-14
3321.94
10908.06
30.45399
Figure 15: COST OF ENERGY EXPENSE RATIO
INTERPRETATION AND ANALYSIS
The above table and figure show that the cost of energy and net sales are
increasing gradually indicating that there is good control on the expenditure and
ultimately resulting in higher productivity.
16) COST OF FUEL RATIO
Expenses ratio =
Year
Cost of Fuel
------------------------------------ x 100
Sales
Cost of fuel
Net sales
Ratio
2009-10
812.1
4607.89
17.62411863
2010-11
921.27
6575.25
14.01117828
2011-12
1015.52
7501.2
13.53810057
2012-13
1166.78
10958.79
10.6469784
2013-14
1219.83
10908.06
11.18283
Figure 16: COST OF FUEL EXPENSE RATIO
INTERPRETATION AND ANALYSIS
The above table and figure shows that As on FY 2010 the Cost of fuel to sale ,
ratio is 11.18 as compared to FY 2009-10 i.e. 17.62 indicating that increasing in
the net sales is not proportionate with increasing cost of fuel as the ratio is
dipping. This shows that the company has good control over the cost of fuel
over the study period.
17) COST OF TAX RATIO
Expenses ratio =
Year
Cost of Tax
------------------------------------ x 100
Sales
Cost of Tax
Net sales
Ratio
2009-10
114
4607.89
2.474017392
2010-11
124.26
6575.25
1.889814076
2011-12
131.58
7501.2
1.754119341
2012-13
152.96
10958.79
1.39577453
2013-14
154.13
10908.06
1.412992
Figure 17: COST OF TAX EXPENSE RATIO
INTERPRETATION AND ANALYSIS
The above table and figure show that the cost of tax and net sales are increasing
proportionately indicating that there is good control on the expenditure and
ultimately resulting in higher productivity. From FY 2005 to FY 2010 the ratio
are marginally varied and remained more or less close to 1.50.
18) EXPENDITURE ON EPC RATIO
Expenses ratio =
Year
Expenditure on EPC
------------------------------------ x 100
Sales
Ratio
2009-10
Expenditure on Net sales
EPC
728.84
4607.89
2010-11
1969.19
6575.25
29.94851907
2011-12
1335.71
7501.2
17.80661761
2012-13
2339.23
10958.79
21.345696
2013-14
3262.49
10908.06
29.90898
15.81721786
Figure 18: EXPENDITURE ON EPC EXPENSE RATIO
INTERPRETATION AND ANALYSIS
The above table and figure shows that as on FY 2010 the Expenditure on EPC
ratio, had increased as against FY 2009 on account of substantial increase in the
Sales.