Final Apollo Print

“Let’s Build Better Roads” A

PROJECT REPORT

ON

“RATIO ANALYSIS”

OF

GUJARAT APPOLO ERTHMOVERS LTD

Submitted To:

S.K.School of Business Management,

Hemchandracharya North Gujarat University, Patan

In partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted By:

KULDIP PRAJAPATI

Roll no: 41

ENROLLMENT NO: MBA0941484742

16TH May 2015– 30TH JUNE 2015

Academic Year 2014-15

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN. 1

“Let’s Build Better Roads”

PREFACE

As per the course of MBA prescribed by H.N.G University Practical project work is an essential element for coming MBA postgraduates. The theoretical study is important, but with Practical knowledge, because the Practical experience teaches us the way of operation. The objective of preparation of project report is to apply practical knowledge about financial analysis through ratio analysis of company.

We have given detail about real business situation and their different important terminology to get easy & suitable understanding & interpretation of the financial statements of the company.

Place:S.K School of business management,Hemchandracharaya North Gujarat University,Patan (Gujarat)



ACKNOWLEDGEMENT

My sincere acknowledgement to APOLLO EARTHMOVERS LIMITED for giving me a valuable opportunity to work with them. This project report is dedicated to all the people, whom I met, took guidance, talked and gained knowledge from them.

I am indebted and whole-heatedly thankful for the assistance received from various individuals in making this project a success. I have no words to express my gratitude towards those who were constantly involved with me throughout my wonderful experience working with the project on “Ratio Analysis”.

I would specially like to thank Mr. Vishal Suthar (HR Manager) for giving me golden chance of internship at APOLLO EARTHMOVERS LIMITED.

I am highly indebted to Mr. Bharat Dave (Accountant) for their guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project.

I would like to express my gratitude to my college S.K.School of Business Management & my faculty member for giving me the opportunity of making project report as a part of summer internship so as to learn the various aspects on practical basis.



DECLARATION

I, kuldip Prajapati, hereby declare that the report for “Summer Training Project” entitled for Ratio analysis of APOLLO EARTHMOVERS LIMITED for past four years is result of my own work and my indebtedness to other work publications, references, if any, have been duly acknowledged.

Place: PATANDate: Kuldip Prajapati



EXECUTIVE SUMMARY

The company Gujarat Apollo earth mover’s ltd. was incorporate on 7th

October 1986. In the settle of Gujarat Apollo equipment Ltd. received the certificate of commencement of business from the register of companies Gujarat 11th November 1986.

They sales their products by sources of marketing. They give advertisements in newspapers, Internets, TV, magazines etc. But they sales directly to the dealers. Dealers are sales to the customer s and government of India.

Companies’ products Paver finisher, wet mix plant, bitumen pressure distributor front-end loader etc. all the products specially designed to suit the typical Indian sight condition.

Research department research the quality and feature of the product then launching of it in the market then go for advertise because dealer know easily that product.

Here research and development department is separate so product research is become easy in this department.


“Let’s Build Better Roads” Objective of preparing project report subjected on “Ratio Analysis” of

APOLLO EARTHMOVERS LTD at Mehsana unit give us complete Review and analysis of current trend acquainted in the finance section. The initial part of this report contains the brief information about the organization, type and different activities involved in formulation of finance. The core project areas, which have been focused, are benefits, finding and suggesting advance technique to improve the Ratio analysis measures.

It helps in providing a comparative study of various business concerns.It makes it easy to grasp the relationship between various items and helps in understanding the financial statement. Ratio analysis is a facility of the compression of financial statement and thereby evaluation of several aspect such as financial health, profitability and operational efficiency.


“Let’s Build Better Roads” CONTENTSCh.No. Sub.Point Contents Page No.

PrefaceAcknowledgementDeclarationExecutive Summary

1 Introduction of company 11.1 History Of The Company 21.2 Development Of The Company 61.3 Company Profile 81.4 Board of Directors 101.5 Size & Form Organization 111.6 Expertise 121.7 Quality Policy 131.8 Pricing Policy 14

2 Information of Finance Department 152.1 Meaning 162.2 Structure & Function 162.3 Accounting Process 182.4 Financial Information 192.5 Accounting Policy 21

3 Balance Sheet 264 Profit and Loss A/c 285 Research Methodology 306 Ratio Analysis 33

6.1 Meaning 346.2 Objective of Ratio 35



6.3 Advantages of Ratio Analysis 386.4 Disadvantage of Ratio Analysis 396.5 Liquidity Ratio 416.6 Asset Turnover Ratio 456.7 Finance Structure Ratios 566.8 Profitability Ratio 626.9 Valuation Ratio 70

7 SWOT Analysis 778 Conclusion 799 Bibliography 80



CHAPTER: 1.

Introduction of Company

1.1 History of the Company 1.2 Development of the Company 1.3 Company Profile 1.4 Board of Directors 1.5 Size & Form Organization 1.6 Expertise 1.7 Quality Policy 1.8 Pricing Policy



1.1 HISTORY OF COMPANY

The company was establishing in 1974. At that time in the India, road construction and other related to equipment work was going on. At that time the owner the “Anilbhai Patel” had thought that why they can’t establish one branch in “Mehsana” in G.I.D.C related to produce this type of machinery or equipment and his thought applied and established this company “APOLLO EARTHMOVERS LTD” in “Mehsana”.

The Group started business operation in 1965 by establishing Apollo Engineering Company for water welt drilling constructs over a period of time, the company integrated backwards into production of drilling rigs. It has also started manufacturing of trailers and agriculture equipments.

An Apollo Industrial Product Private Limited had set up for manufacture mechanical pavers finisher and hot mox plants. The company’s business grew steadily and its product earned a good reputation in the market

In 1986 the Apollo Earthmover Private Limited termed with Gujarat Industrial Investment Corporation (GIIC) to set up Gujarat Apollo Equipments Limited (G.A.E.L.) .The Company started manufacturing drum type asphalt plant and hydrostatic sensor paver finishers under a technical collaboration arrangement with Barber Greene USA. Apollo earthmovers Limited has been entered in stock exchange just from 19th June 2001.Apollo Earthmover Limited Company is ISO 9001:2000 certified.



Year Events:

2005

Gujarat Apollo Industries has given the Bonus in the Ratio of 1:1

2007

Gujarat Apollo Equipments Ltd has informed that the Board of Directors of the Company at its meeting held on January 30, 2007, inter alia, has proposed to issue Bonus Shares in the proportion of one (1) Equity share for every two (2) Equity Shares held on a Record date to be fixed at a later date. The existing paid up share capital of the Company Rs 700 Lacs.

Members of are hereby informed that trading symbol of Gujarat Apollo Industries Limited shall be changed from GUJAPOLIND to GUJAPOLLO W.E.F. July 6, 2007.

Company name has been changed from Gujarat Apollo Equipments Ltd to Gujarat Apollo Industries Ltd.

The Company has issued Bonus Shares in the Ratio of 1:2.

2008

The Company has issued Bonus Shares in the Ratio of 1:2.

The Company has recommended dividend of Rs 3/- per equity share (previous year Rs 2/-).

Gujarat Apollo Industries Ltd (GAIL) has invested INR 74 millions in Apollo Earthmovers Ltd (AEML) to make it a subsidiary Company.



2009

The Company announces incorporation a wholly owned subsidiary, Apollo Maschinenbau GmbH in the Federal Republic Germany, near to the port of Hamburg.

The Company has recommended the dividend of Rs 2/- per equity share.

2010

Apollo made an entry in to Egypt, Tunisia, Trinidad & Tobago, Angola, Malawi and Botswana, An addition to already long list of country of exports.

The Company recommended the dividend of Rs. 2.50/- per Equity Share.

2011

Apollo makes a break through entry in Seychelles & Zimbabwe.

The Board of Directors has appointed Ms. Neha Chikani Shah, who was Deputy Company Secretary, as the Company Secretary and Compliance Officer.

The Company has recommended the dividend of Rs. 2.5/- per Share along with Rs. 2.5/- per Share as one time special dividend, totaling to Rs. 5/- per equity Share.

2012

The Board of Directors of the Company has recommended the dividend of Rs. 2.5/- per Share.

The boards of Directors have proposed to re-appoint Mr. Anand A. Patel, Whole-Time Director of the Company.



2013

"Gujarat Apollo Industries Limited launches strategic joint venture with Switzerland based Ammann Group".

2014

Gujarat Apollo Industries Ltd have recommended the dividend of Rs. 2.50/- per equity Share



1.2 DEVELOPMENT OF COMPANY

The company today offers almost the entire range of equipment that lends them selves admirably to the road building industry.

The company investment in R&D and quality manpower help in continuous improvement in product quality that more then meets the existing quality standards of ministry of surface transport. The Indian roads congress irrigation projects in The Apollo group is a Gujarat industrial house with a business track record of 35 yrs. Their main interests are in,

Road Construction Equipment Road Construction Filtration System Ship Breaking.

For 35 year Apollo have retained leadership by offering state of the art construction equipment developed through in house R&D and strategic technology tie-ups Apollo company today offers the entire range of road construction equipment that helps in building roads, which are safe, durable & economical. Apollo’s mission is to retain the leadership through continuous R&D and world class technology availed through technology transfers.

They believe that customer satisfaction is achieved through quality of products & procedure.



Reason for select this (G.I.D.C.) location for firm:

In those days there was one rule that the company should be in premises. And electricity was also less costly. The transportation actively very easy because it is established in the G.I.D.C. The third reason for this location is the mainly this locations very easy to get more labor for production of product.

Reason for select the name of the company” Apollo Earthmovers Ltd.”

When the company was started at that time the satellite name was “Apollo” was fallen down on the earth approximately in 1982, so the decider has thought that the name should be kept the Apollo. And the company producing the road construction or related to help in earth work so the company have decide the company’s name as “APOLLO EARTHMOVER LTD”



1.3 COMPANY PROFILE

Name of the company

“APOLLO EARTHMOVERS LTD”

Establishment year

The “APOLLO EARTHMOVERS LTD” was established in1974.

Registered Office

The firm’s registered office is located in

212-A, G.I.D.C.ESTATE,Mehsana-384002North GujaratPh- (02762) 252362

Fax: 251337

BankerBank Of Baroda

Auditor M.M.SALVI & CO. Chartered Accountants, Mahesana.



Production Unit

The production of this unit is located at

APOLLO EARTHMOVERS LTD

212-A, G.I.D.C.

ESTATE,

Mehsana-384002

Vision of the company

To increase the turnover of the product, And to establish prestige of number one at the world level

Mission of the company

The company’s goal is to retain the leadership by designing & building the state of the art equipment, through technology that is proven and is the best in the world, availed by license and joint venture with pioneers and leaders in respective field. To make it possible to give India and the developing world.

With the P’s process, product and people, well and truly in place, Apollo shall be the supplier by choice of the road construction industry.



1.4 BOARD OF DIRECTORS

BOARD OF DIRECTORSMR. ANIL T. PATEL DIRECTOR

MR. MANIBHAI V. PATEL DIRECTOR

MR. ASIT A. PATEL MANAGING DIRECTOR

MR. ANAND A. PATEL WHOLE-TIME DIRECTOR

MR. UGRABHAI V. PATEL INDEPENDENT DIRECTOR

MR. NAVINCHANDRA V. SHAH INDEPENDENT DIRECTOR

COMPANY SECRETARYCS NEHA CHIKANI SHAH

STATUTORY AUDITORSM/s. DJNV & CO.,Chartered Accountants,Ahmadabad

BANKERSHDFC BANK LTD.KOTAK MAHINDRA BANK LTD.

Corporate Office

“Parishram”,5/B, Rashmi Society, Mithakhali Circle,Navrangpura,Ahmadabad, - 380009



1.5 SIZE & FORM ORGANIZATION

Generally size of the unit is based on the total investment & total employment made by particular unit. While form of organization is decide on the basis of internal relationship, authority & responsibility to concerned departments.

Industry Can How Classified Into Three Categories

(1) small scale industry

(2)medium scale industry

(3) large scale industry

An industry unit said to be large scale unit which invest capital in plant & machinery APPOLO EARTHMOVERS LTD.

More than 1 crore & use power and also employed workers more than small scale & medium scale industry.

It is a small industry which is obvious following is the main forms of organization.



1.6 EXPERTISE

We are in the road construction industry for a long time - from day 1 of the mechanization of road construction. From a modest beginning in the year 1972, the group today offers almost the entire range of equipment that lends them admirably to the bituminous road building industry. One may ask - are you still doing the same thing even 30 years later? The answer is yes but with one important difference. Today we are doing it better and are moving forward with the firm belief that our best is yet to come.

The reason- we are constantly on the job to improve on the quality of our products & services and avoid "waste".

Our definition of "waste" is simple. Any activity that does not add value to the customer is a waste. We keep abreast of the changes and aim to maintain our leadership through innovation and world class technology. Value engineering is a way of life at Apollo. No wonder the advances in Production Engineering you notice in an Apollo equipment is rarely matched by competition. Advances that help you complete the job faster with high cost savings.

Indigenization of the technologies for optimum utilization in Indian conditions is the focus of our design department. Apollo's investment in R & D and quality manpower helps in continuous improvement in product quality that more than meets the exacting quality standards of Ministry of Surface Transport, Indian Roads Congress, International Consultants and customers.

Yes, we have been in this business for a long time, 30 years long. Thirty years during which we have earned an enviable reputation with the customers for high quality road construction equipment, prompt after sales service and a customer friendly approach.

No stopping but, we will continue to build on our strengths-rich experience, accent on R & D, customer orientation and adaptability to change. We will keep on improving, Refining, Changing, and Leading the way. Apollo - the best piece of road construction equipment you'll ever own.



1.7 QUALITY POLICY


WE AT APOLLO EARTHMOVERS LIMITAD shall strive to enhance customer satisfaction by manufacturing product and excellent Quality with customer requirement in focus quick delivery and providing nation wide services.

We shall continuously improve our quality management system, customer satisfaction and bring new technology to the customer.

PRODUCTS

Stationary Drum Mix Plants. (DM Series 30 to 150tph) Mobile Drum Mix Type Asphalt Plants (Mobimix Series 20 to

90tph) Wet Mix Macadam Plants. (wm Series 60 to 300 tph) Bitumen Pressure Distributor ( Atm Series 3000 to 10000 liters Mechanical Broomer. Hydraulic Broomer. Tandem Vibratory Roller. Wet dust Collector. Chips Spreader Mechanical Paver Finisher Hydrostatic Paver Finisher Wet Mix Paver Finisher Kerb Laying Machine Job Work Of;- Mahindra & Mahindra, Sicom (ITALY)



1.8 PRICING POLICY

Price is the main base of the marketing department. Pricing policy is most important feature in any organization. Without prepare pricing policy organization can not declared the price of the product. The Apollo Earthmover Ltd is the Sole proprietor firm. The goal of the company is to provide better quality of the product with reasonable profit.

DM 60- which most costlier then the other equipment the capacity of the machine is 90-120 ton the price is 30-40 lacs

Mechanical Broomer is cheapest machine of all the product the price is 1.75 lacs



CHAPTER: 2.

Information of finance Department

2.1 Meaning 2.2 Structure & Function 2.3 Accounting Process 2.4 Financial Information 2.5 Accounting Policy



2.1 MEANING

Financial department is concerned with acquisition of funds and investing those funds in such sources where earning will be higher. Finance play very important role in the every company. The process of estimation of fund which is requirement for firm & main source of the fund is called financial planning.

Management Finance is concerned with funds management or treasury function. It is the duty of the finance manager to arrange for the funds at competitive rates & terms & advises on its deployment to maximize share holder’s or owner’s wealth.

2.2 STRUCTURE & FUNCTION

Managing Director

Chief Accountant

Accountant

Taxes



FUNCTION

Budget Preparation. Budget Administration. Cost Allocation. Account Payable. Bring benefits. Grants Administration.. Contract administration. Billing. Property Inventory. General Accounting Records. Fixed Assets Records. Custody of Funds. Cash Flow. Investment. Debt Administration. Risk Management. Internal Financial Reports. External Financial Reports. Statutory Reports. Tax Reports. Preparation of Budget, Appropriation of accounts, re-appropriation surrender

and savings. Control of expenditure & ways & means position. Audit. Treasury Administrations. Administrations of Taxes i.e. Sales Tax, Entertainment tax, Entry Tax etc. Resource mobilization through loans, Institutional finance, small savings,

credit & investment & public debt.



2.3 ACCOUNTING PROCESS

.

S.K.SCHOOL OF BUSINESS MANAGEMENT, PATAN.

Identification of Transaction

Preparation of Business documents

Recording of Transaction in Journal

Posting to Ledger

Preparation of Unadjusted Trial Balance

Passing of Adjusted Entries

Preparation of Adjusted Trial Balance

Balance Sheet Profit & Loss Account

Fund Flow Statement26


2.4 FINANCIAL INFORMATION

When the company was started at that time the company was initial basis. The production of goods was less and the sale of the company was also less at that time.

Finance play very important role in the every company. The process of estimation of fund which is requirement for firm & main source of the fund is called financial planning.

The accountant of the company spares most of the time in making the financial planning. In Apollo Earthmovers Ltd for requirement of fund the accountant has decided six monthly or some time yearly forecast of fund.

The company has set targets for each job in terms of money period, time consumed, and quality assured etc. Apollo Earthmovers Limited makes effective use of fund & collect wild source of funds. In company financial planning has grater significance.

Particular Amount(2014)Paid up Capital 159,406,210Reserve and surplus 2,768,363,065Turn over 5,99,509,940Profit before tax 1,334,543,352Profit after tax 1,359,651,800Earning Per share 85.29



The above table shows the information about finance of the company. The paid up capital of the company is Rs.1, 594, 06210. On other hand the turnover of the company is more than Rs.59.95 cr. That we can see. In the year 2014 the profit before tax of the company was more than 1.33 cr. And after tax profit was 1.35 cr. Their earning per share is 85.29. In the G.I.D.C, The Company gets no. 1 prestige in turn over because in the G.I.D.C this is the first in the turnover more then any other which is situated in G.I.D.C.



2.5 ACCOUNTING POLICY

Convention and basis of preparation of financial statements

There financial statements have been prepared on the accrual basis of accounting as per double entry system, under the historical convention, and in accordance with relevant presentational requirements of the companies Act, 1956 and in accordance with applicable accounting standards issued by the institute of chartered Accountants of India.

Fixed AssetsCost of fixed assets comprises purchase price, duties levies and any

directly attributable cost of bringing the asset to its working conditions for the intended use. Borrowing costs related to the acquisition or construction of the qualifying fixed assets for the period up to completion of their acquisition or construction are included in the book value of the assets.All costs relating to up gradations/enhancements are generally charged off revenue expenditure unless they bring significant additional benefits of lasting nature.Convert claimed on fixed assets is reduced from the cost of respective assets.

Impairment of fixed assetsAn asset is treated impaired when the carrying cost of the assets exceeds

its recoverable. An impairment loss is changed to profit and loss account in the year in which an asset is identified as impaired. A previously recognized impairment loss is increased or revered depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.



Depreciation/ amortizationDepreciation on assets (except intangible assets) is provided in a manner

that amortizes the cost of the assets after commissioning, on the straight-line method at the rates and in the rates and in the manner prescribed in schedules XIV to the companies, Act, 1956.

InvestmentsLong-term investments are valued at cost.

InventoriesInventories are stated at the lower of cost and net realizable value, cost

comprise of expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete slow moving items and provision is made for such inventories. The cost of categories of inventories is arrived at as follow:

- Store, spares, raw materials and components-at rates determined on first in first out basis.

- Finished goods – at full absorption cost method based on annual average cost of product.

- Packing materials, loose tools and miscellaneous consumables are charged off at the point of purchase.

A. Excise duty on finished goods and custom duty on raw material is accounted for on clearance of goods from the factory.

B. Credit of excise duty under convent scheme on goods purchased is reduced from the cost of purchase.



Retirement benefits- Contributions payable, which are under defined contribution scheme

and funded and recognized as year’s expenditure. Contributions under defied benefit schemes, as determined on the basis of actuarial valuation, are also funded and recognized as year’s expenditure.

- Liability for gratuity determined on basis of actuarial valuation is funded with life insurance Corporation of India under group gratuity (Cash Accumulation) scheme and annual premium thereon is paid and accounted for accordingly.

- Provision is made for Leave Encashment benefits based on actuarial valuation and charged to the profit and loss account.

Revenue Recognition- Sales of products and services are recognized on dispatch of goods or when

the services are rendered sales are stated at contractual realizable values, and trade discounts.

- Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.

- Liquidated damages/penalties are provided for wherever there is a delayed delivery.

- Commission income if any is recognized as per contracts/receipt of credit note.

- Dividend income is recognized when the right to receive dividend is established.

- Interest income is recognized on the time proportion method.

Research and Development:No such expenditure incurred during the year


“Let’s Build Better Roads”Taxation:

1. Provision for current income tax is made as per working under the income tax act, 1961.

2. (a) Deferred tax is recognized as timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversing in one or more subsequent periods.

(b) Deferred tax assets are recognized only to the extent there is a reasonable certainty of its realization.

(c) Deferred tax assets arising from temporary timing differences are recognized to the extent there is reasonable certainly that the assets can be realized in future. A deferred tax asset on unabsorbed depreciation and carry forward losses is recognized only when there is virtual certainty that there will be sufficient future taxable income available to realize such assets.3. Provision of fringe Benefit Tax (FBT) is made on the basis of expenses

incurred on employees/ other expenses as prescribed under the income tax act, 1961.

Foreign Currency TransactionsTransactions in foreign currencies are recorded at the exchange rate of

the date of transaction or at the exchange rates under forward exchange contracts. Current assets and current liabilities not covered by forward exchange contracts are translated at the year end exchange rates and the profit/ loss so determined and also the realized exchange gain/ losses are in the profit & loss account, except those relating to acquisition of fixed assets which are capitalized.

Gains or losses on foreign exchange rate fluctuations relating to current assets and liabilities are accounted at the year end.

Contingent liabilitiesContingent liabilities are not provided for in the accounts for in the

accounts and are disclosed separately in notes to accounts.Borrowing Cost

No such has been made during the year.



CHAPTER: 3.

Balance Sheet



BALANCE SHEET AS AT 31 ST MARCH

Year End Mar-14 Mar-13 Mar-12 Mar-11SOURCES OF FUNDSOwners’ s FundEquity Share Capital 159406210 165750000 165750000 165750000Share Application Money 0 0 0 0Preference Share Capital 0 0 0 0Reserve & Surplus 2768363065 1520537340 1502484159 1364166660Loan FundsSecured Loans 80000000 80068000 83468000 130032000Unsecured Loans 735209461 204269272 200474060 261891865Deferred TaxDeferred Tax liabilities 31717773 56826221 53551225 40089108Total 3774696509 2027450833 2005727444 1961929633Application Of FundFixed AssetsGross Block 400753402 612890354 614720724 553705637Less: Revaluation Reserve 0 0 0 0Less: Accumulated Depreciation 14705161 38823540 34924347 29480573Net Block 386048241 574066814 579796377 524225064Capital Work –in-progress 16086487 14427601 788824 210324053

Investment 1696412435 457693013 473309255 419557718

Net Current AssetsCurrent Assets Loans & Advance 1937831254 1576541097 1527300344 1256446806Less: Current Liabilities & Provision 261681908 595277692 575467356 448624008Total net Current Assets 1676149346 981263405 951832988 807822798Miscellaneous expenses not written 0 0 0 0Total 3774696509 2027450833 2005727444 1961929633Note:Book Value of Unquoted InvestmentsMarket Value of quoted InvestmentsContingent LiabilitiesNumber of Equity shares outstanding (in lacs)



CHAPTER: 4.

Profit and Loss A/c



PROFIT AND LOSS FOR ENDED 31 ST MARCH

Apollo Earthmovers Ltd Mar-14 Mar-13 Mar-12 Mar-11Income:Operating Income 475442911 2053537004 2177797199 1921015846Other income 124067029 56415857 49407531 47413196Total Income 599509940 2109952861 2227204730 1968429042Expenses:Material Consumed 295577609 1323549841 1420990397 1338809800Changes in inventories of finished goods & stock in trade 58338334 7557302 63924230 (94178015)Employee Benefit Expenses 37891295 106800287 96162701 71840205Other expenses 188360657 313252284 283696874 272182403

Cost of sales 580167895 1751159714 1864774202 1588654393

Operating Profit 19342045 358793147 362430528 379774649

Adjusted EBITDA 19342045 358793147 362430528 379774649Depreciation 14705161 38823540 34924346 29480573Other write offs 0 0 0Financial Expenses 38128583 54591235 46564871 42734231

Profit before exceptional items & tax (33491699) 265378372 280941311 307559845Exceptional items being income from sales of investments 1368035051 35970000 0Adjusted PBT 1334543352 301348372 280941311 307559845Tax Charges (25108448) 84274996 98462117 116514023

Adjusted PAT 1359651800 217073376 182479194 191045822Non Recurring Item


“Let’s Build Better Roads”Other Non Cash Adjustment

Reported Net Profit 1359651800 217073376 182479194 191045822

Earning Per ShareBasic EPS 85.29 13.10 11.01 12.28Diluted EPS 82.25 13.10 11.01 12.28



CHAPTER: 5.

Research Methodology



RESEARCH METHODOLOGY

The methods or the techniques which have been used for collection and analysis of data in this study are as follows:

(i) Collection of Data: The data of study for the period 2011 to 2014 used in this study has been collected from the Annul Reports for the years 2011 to 2014.

(ii) Analysis of Data : For analyzing the data the technique of ratio analysis , simple mathematical tools like percentages and averages etc. and simple statistical technique like Simple Correlation Technique have been used

REASEARCH DESIGN:

DATA COLLECTION:

The information is collected through the PRIMARY SOURCES like:

Getting information from HR department.

Data was collected from following SECONDARY SOURCES like


“Let’s Build Better Roads” Account department Audit department

PRIMARY DATA:

The primary data is collected by discussion with the manager of account department and HR department.

SECONDARY DATA:

Secondary data regarding sales figures, promotional expenses were collected from the company own record to analyze the impact on sales due to the running scheme and make cost benefit analysis.



CHAPTER: 6.

Ratio Analysis



6.1 MEANING

Ratio, broadly speaking, is the numerical relationship between to numbers, and hence ratio analysis of statement stands for the process of determining and presenting the relationship of items and groups of items in the statements. The following are the importance and uses of ratio analysis.

Ratio analysis is the powerful tool of financial analysis. A ratio is defined as relation between two or more thing or as the systematic use of the ratio to interpret the financial statement. So that the strength and weakness of a firm as well historical performance & Current financial condition can be defined.

According to Meyers, ratio analysis is a “study of relation among the various financial factors in a business.”

It is used as benchmark for evaluation the financial position and performance of the company.

“A ratio indicated quantities relationship which can be used to qualitative conclusion. This relationship can be expressed as:

Percentage Proportion Fraction



6.2 OBJECTIVES OF RATIO

(i) To analyze an earning capacity of the enterprises. (ii) To ascertain the financial position (liquidity and solvency) and (iii) To determine the operating efficiency of business entities.

Basis or Standards of Comparison

Ratios are relative figures reflecting the relation between variables. They enable analyst to draw conclusions regarding financial operations. The use of ratios as a tool of financial analysis involves the comparison with related facts. The basis of ratio analysis is of four types which are as under:

Past ratios calculated from past financial statements of the firm. Selection of relevant data from the financial statements depending on the

objective of the analysis. Calculation of competitor’s ratios for inter-firm comparison. Comparison of the calculated ratios with the ratios of the same firm in the

past or the ratios developed from projected financial statements or the ratios of some other firms or the comparison with the ratios of the industry to which the firm belongs.

Interpretation of the Ratios

The interpretation of ratios is an important factor. The inherent limitations of ratio analysis should be kept in mind while interpreting them. The impact of factors


“Let’s Build Better Roads”such as price level changes, change in accounting policies, window dressing, etc., should also be kept in mind when attempting to interpret ratios. The interpretation of ratios can be made in the following ways:

Single absolute ratio Group of ratios Historical comparison Projected ratios Inter-firm comparison

Guidelines or Precautions For Use Of Ratios

The calculation of ratios may not be a difficult task but their use is not easy. Following guidelines or factors may be kept in mind while interpreting various are as follows:

Accuracy of financial statements Objective or purpose of analysis Selection of ratios Use of standards Caliber of the analysis

Classification of ratios

The use of ratio analysis is not confined to financial manager only. There are different parties interested in the ratio analysis for knowing the financial position of a firm for different purposes. Various accounting ratios can be classified as follows:



Traditional Classification Functional Classification Significance ratios

Functional Classification

These include liquidity ratios, long-term solvency and leverage ratios, activity ratios and profitability ratios.

Significance Ratios

Some ratios are important as compared to others and the firm may classify them as primary and secondary ratios. The primary ratio is one which is of prime importance to an entity. The other ratios that support the primary ratio are called secondary ratios.

In the view of Functional Classification the ratios are

Liquidity ratio Solvency or Leverage ratio Activity ratio Profitability ratio



6.3 ADVANTAGES OF RATIO ANALYSIS

I. Lee observed that the process of producing financial ratio is essentially concerned with the identification of the significant accounting data relationships, which give the decision makers insights into the company that is assessed.

II. A ratio analysis involves the study of total financial picture. By basing conclusion upon thorough understanding of the important of each ratio, the analyst can recommend and indicate positive action with confidence.

III. One of the most fruitful areas for the use of traditional financial ratio seems to be that of predication company failures.

IV. Ratio are tool which enables management to analysis business situation and to monitor their performance as well as that of their competitors.

V. Ratio analysis helps the management to diagnose the situation, monitor the performance and help plan forward.

VI. There are certain priority ratios for chief executives. There are related to key areas, which are common to nearly all businesses and with which top management is seriously concerned. These priority ratios enable the chief executive to understand the relationship between his organizations at one end, and the market, investors, suppliers and employees. He is also in a position to watch how well the organization is using its assets and how well it is providing for the future.

VII. There are ratio which help the marketing manager, the purchasing manager, the financial manager and other representing the middle management to know the what positions are like how to make a way in typical situations, from time to time



6.4 DISADVANTAGES OF RATIO ANALYSIS

I. Erich Helfert points out that it is essential for a person analyzing business performance to have a clear awareness of the tests he should apply and the specific reasons for which he should apply them. Temptation arises in financial ratio analysis to run all the numbers, yet select only a few relationships, which would provide clues for judgment.

II. Financial statement is generally based on historical or original cost. The current economic conditions are ignored.

III. Not all ratio and percentages are significant and useful. One should be aware of the temptation to calculate them for their own sake.

IV. In using ratio computed by others, one should realize, that the computation of a particular ratio not necessarily been standardize.

V. Most ratios represent avg. and therefore, may tend to obscure large variations in the underlying causative factors above and below the avg.

VI. Ratio are based on financial statement suffer from the limitation inherent in these statements.

VII. Changes in many ratios are closely associated with one another.



RATIO ANALYSIS

A. LIQUDITY RATIO1) Current Ratio2) Quick Ratio

B. ASSET TURNOVER RATIOS 1) Total Asset turnover 2) Net Fixed Turnover Ratio 3) Net Working Capital Turnover Ratio 4) Inventory Turnover Ratio 5) Debtor Turnover Ratio

C. FINANCE STRUCTURE RATIOS1) Equity ratio2) Debt Ratio3) Interest Coverage Ratio4) Debt-Equity Ratio

D. PROFITABILITY RATIO1) Gross Profit Margin Ratio2) Operating Profit Margin Ratio3) Net Profit Ratio4) Rate of return on Investments5) Rate of Return on equity

E. VALUATION RATIO1) Return on Assets2) Return on Shareholders’ Equity3) Earning per Share4) Dividend Pay-out Ratio



6.5 LIQUIDITY RATIO

1) Current Ratio:

The current ratio is the measure of the firm’s short term solvency. It indicates the availability of current assets in rupees for every one rupee of current liability. A ratio is greater than one means that the firm has more assets than the current claims against them. Current assets normally include cash, marketable securities, accounts receivable and inventories. Current liabilities consist of accounts payable, short term notes payable, short-term loans, current maturities of long term debt, accrued income taxes and other accrued expenses (wages). The current ratio can be found out from the following equation.

Current Ratio = Current Assets --------------------- Current Liabilities


Year 2014 2013 2012 2011Current Ratio 7.40 2.64 2.65 2.80

49

“Let’s Build Better Roads” Graph no.1

Interpretation:

1. In the above graph companies Current Ratio is high in year of 2011. But it is somewhat decrease initially in 2012 and 2013 after it was increase in the end 2014

2. This situation arise because firm or industry have to manage ascertain amount of standard ratio say 2:1 the lower of it indicating that firm may not able to meet its short-term solvency on a time and higher ratio indicating that funds are lying idle and not fully utilized.

3. The higher current ratio indicate that the greater the margin of safety for creditors. That means company’s currents assets are increasing in current year. So company is growing in strong position against its current obligation.

4. Here companies’ Current ratio is lower in the year 2013 at 2.64:1 and it is higher in the year of 2013 at 7.40:1

2) Quick Ratio

This ratio is called the Acid Test Ratio. It established the relationship between quick assets and current liabilities. An asset is liquid if it can be converted in to cash immediately without a loss of value. The quick ratio is a variant of the current ratio. It takes into account the fact that inventory, while it is a current asset, is not as liquid as cash or accounts receivable. Cash is completely liquid; accounts receivable can normally be converted to cash fairly quickly, by pressing for collection from the customer. But inventory cannot be converted to cash except by selling it. This ratio is calculated from the following equation.



Quick Ratio = Quick Assets --------------------- Quick Liabilities

Graph no.2

Interpretation:

1. Quick ratio represents the company ability to meet its immediate obligation. Generally, a quick ratio of 1:1 is considered to present a satisfactory current


Year 2014 2013 2012 2011Quick Ratio 6.44 2.05 2.05 1.82

51

“Let’s Build Better Roads”financial condition. A quick ratio 1:1 or more does not necessarily imply sound liquidity position. 2. Thus, a company with high value of quick ratio can suffer from the shortage of funds if it has slow paying, doubtful and long-duration outstanding debtors. On the other hand, a company with a low value of quick ratio may really be prospering and paying its current obligating in time if it has been turning over its inventories efficiently.

3. From the graph we can see the quick ratio of the company of the last four years. The company is not very well in the quick ratio. It increases constantly. Over all the company’s position is not good in terms of quick ratio. So we can say that firm can not able to pay their liability quickly.



6.6 ASSET TURNOVER RATIOS

1) Total Asset turnover Ratio = Sales -------------------

Total Assets

Graph no.3

Interpretation:


Years 2014 2013 2012 2011TAT (t imes) 1.55 1.87 2.04 1.66

53


1. In the above graph companies Total assets turnover is increasing during year 2012 as compare to 2011. But on or after 2012 it is reducing till 2014 2. This is because that increase/decrease in the ratio indicates that the investment in the stock is increasing/decreasing, which lead to increase/decrease sales.

3. But here companies Total Assets Turnover ratios is better utilize its investment in stock efficiently

2) Net Fixed Turnover Ratio= SALES ------------------ Net Fixed Assets

Years 2014 2013 2012 2011Net FA turnover ( t imes)

1.55 3.68 3.84 3.75



Graph no.4

Interpretation:

1. Here companies Net Fixed Turnover Ratio is higher in the year 2012 but very lower in 2014 2. This situation of low ratio arises due to inefficient use of fixed assets after deduction of depreciation amount. Which remain idle in firm but increased ratio indicates that it is more efficient to utilize its fixed assets.

3. Here companies Net Fixed Turnover Ratio is higher in the year 2012 at 3.84 as compared to year 2014 at 1.55.


“Let’s Build Better Roads”3) Net Working Capital Turnover Ratio = SALES ------------------ Net Working Assets

Graph no.5

Interpretation:1. In the above graph companies’ net working capital is constantly decrease from previous year. And in year 2014 was very low as compare to previous year.

2. This situation shows that a company ratio is decreasing means that working capital is not fully utilizing properly and a very high ratio is indicating of companies over trading during the year.


Years 2014 2013 2012 2011Net WC turnover ( t imes)

0.36 2.15 2.33 2.43

56


3. Here in the graph companies ratio in the year 2013 is at 1.79 times more in comparison with 2013 ratio is at 0.36 times.

4) Inventory Turnover Ratio

The inventory turn over ratio indicates the efficiency of the firm in producing and selling the product. It shows how much time the inventory has turnover in a year. More the turnover, it is a better the company’s efficiency in handing the inventory. No company wants to have too large an inventory. Goods that remain in inventory too long tie up the company's assets in idle stock, often incur carrying charges for the storage of the goods, and can become obsolete while awaiting sale.

Just-in-Time inventory procedures attempt to ensure that the company obtains its inventory no sooner than absolutely required in order to support its sales efforts. That is, of course, an unrealistic ideal, but by calculating the inventory turnover rate you can estimate how well a company is approaching the ideal. The inventory turnover ratio is calculated from the following equation.

Inventory Turnover Ratio = Cost of Goods Sold ------------------------------------ Avg. Inventory


Year 2014 2013 2012 2011Inventory turnover

( t imes)1.92 5.02 4.78 3.93

57


Graph no.6

Interpretation:1. In the above graph companies Inventory Turnover Ratio is fluctuating. ITR is 3.93 in the year 2011 and constantly increase up to year 2013 but in 2014 it is decrease to 1.92.

2. Here decrease in the ITR in current year indicates decrease in amount of sales by decreasing per unit investment in the stock. But decrease in the ratio shows that investment are not fully or efficiently utilize in business.

3. Here companies maximum in the year 2013 at 5.02 times in compare to the year 2014 it was at 1.92 times.

5) Inventory Holding Period= Avg. Inventory - - - - - - - - - - - - - - - - - - - - -*360


“Let’s Build Better Roads” COGS

Inventory holding period shows for how many days the inventory stays in the business. It shows the holding period of inventory in the business. The lesser the holding period better for the company. It will save the carrying cost of the inventory. The inventory holding period is calculated from the following equation.

Graph no.7

Interpretation:

1. In the above company Inventory Holding Period is fluctuating during this year. Inventory Holding Period is higher in the year 2011 and after then it constantly decreasing up to year 2013 and there after highly increase in the year 2014


Year 2014 2013 2012 2011Inventory holding

period (Days)187 71 75 92

59


2. This situation arise that if Inventory Holding Period is lower it indicates that firm is working efficiently and selling more stock in less days. But increase in Inventory Holding Period indicates that company stock or inventory is remaining idle and frequently used at time.

3. Here company Inventory Holding Period is high in the year 2014 at 187 days as compare to all previous year. So it’s not good for company or company’s inventory remains same.

6) Debtor Turnover Ratio

Measures the firm’s ability to collect payment from its customers, ex. its ability to collect the cash from someone who paid by credit. A higher ratio indicates the firm’s efficiency in its ability to collect those payments, and/or the company operates more on a cash basis. A low ratio may mean that the company should possibly re-think its credit policies and find out why the firm cannot collect its customer’s payments on a timely fashion.

Debtor Turnover Ratio = Credit Sales --------------------- Avg. Debtors

Year 2014 2013 2012 2011Debtors turnover Ratio

(Times)2.68 5.18 5.73 5.58



Graph no.8

Interpretation:1. In the above graph the companies Debtor Turnover Ratio is fluctuating during this four year. In the year of 2012 it was higher, while it is lower in the year of 2014

2. The increase in the ratio indicates better since it would indicate that debt are being collected more promptly means there is more available of fund then it can be use for other purpose and lower the ratio indicates inefficient collection of debts from debtors.

3. Here companies Debtor Turnover Ratio is high in the year 2011 at 5.58 times and it was lover in the year 2014 at 2.68 times. There fore the company is not good in collecting of debts from debtors.



(7) Average Age Of Debtors = Average Debtors ------------------------- *360 Credit Sales

The collection period measures the quality of the debtors since it indicates the speed of their collection. The shorter the period averages of collection period the better the quality of debtors. The collection period Can be found out from the following formula

.

Graph no.9


Year 2014 2013 2012 2011Avg. col lect ion Period (Days)

134 70 63 65

62


Interpretation:

1. In the above graph the ratio of the company is fluctuating during the year. And it is initially higher in year 2014 and it was higher from last years.

2. in this situation high ratio indicates that debtors are enjoying high credit period form debt collection from them by company but a lower ratio indicates vice versa of it.

3. Here companies’ ratio in the year 2014 is at 134 days. It’s high from last three years. So company’s collection Quality is not better from previous year.

6.7 FINANCE STRUCTURE RATIOS

1) Equity Ratio = Net Worth ------------------------ Total Capital Employed


Years 2014 2013 2012 2011Equity Ratio ( :) 0.98 0.92 0.92 0.91

63


Graph no.10

Interpretation:

1. In the above diagram companies’ equity ratio is constantly increasing from the year 2011 to 2014, no doubt it is change compare to 2013-2012 equity ratios.

2. This situation arise that in high ratio indicating that it providing adequate safety to the creditors who give loan to firm or invest in the firm assets . But lower ratio indicates that it provide low safety to the creditors because in case of liquidation creditors are likely to be loose their money.

3. Here companies’ equity ratio is higher in the year 2014 at 0.98:1 and it was lower in the year of 2011 at 0.91:1. A ratio constantly increase so company is good


“Let’s Build Better Roads”in providing adequate safety to the creditors who give loan to firm or invest in the firm assets.

2) Debt Ratio = Long term debt ----------------------- Total Capital Employed


Years 2014 2013 2012 2011Debt Ratio ( :) 0.013 0.079 0.077 0.081

65


Graph no.11

Interpretation:

1. In the above graph companies’ debt ratio is increasing and decreasing. But in the year of 2014 it was going too much down other than previous year.

2. In this situation the higher ratio indicating the risky financial position that totals capital assets would be less to meet its long term liabilities. While low ratio indicating that shows more safety margin to the investors or creditors.

3. Here companies debt ratio lower in the year 2014 is just 0.013: 1 There fore it’s good for company to indicating that shows more safety margin to the investors or creditors.

3) Interest coverage ratio= EBIT -------------- Interest


Years 2014 2013 2012 2011Interest Coverage Ratio (t imes)

0.51 7.37 8.55 11.19

66


Graph no.12 Interpretation:

1. In the above graph companies Interest Coverage Ratio is higher in the year 2011 and there after constantly decrease.

2. The situation of high ratio indicating that firm/industry is utilizing its interest bearing debt funds more efficiently. While a low ratio indicating under utilization of the debt funds of business.

3. Here companies Interest Coverage Ratio in the year 2011 is higher at 11.19 times and it is lower in the year 2014 0.51. Because of that the company is not good in utilization of the debt funds of business.

4) Debt Equity Ratio

The Total Debt to Equity ratio helps us measure a company’s financial leverage. It reflects the relative position of the equity holders and the lenders and indicates the company’s policy on the mix of capital funds. It shows us how much of a company’s financing of assets is due to investors putting in money into the


“Let’s Build Better Roads”company, or perhaps loans taken out by banks. The debt-equity ratio can be found out from the following equation.

Debt Equity Ratio = Total Long-Term Debt --------------------- Net Worth

Graph no.13

Interpretation:


Years 2014 2013 2012 2011Debt Equity Ratio 0.01 0.09 0.08 0.09

68

“Let’s Build Better Roads”1. The company’s debt equity ratio is fluctuating during four year and it was higher in the year 2013 and 2011 while it was lowest in the year 2014 debt equity ratio.

2. In this higher ratio indicating a risky financial position of the firm that it shows less use of equity fund than debt. But low ratio indicating that it use fund efficiently than debt and give larger safety margin to the creditors. Here this ratio is only acceptable if it is 2:1 or nearby.

3. Here companies is lower in the year 2014 at 0.01:1 so it’s better for company to use fund efficiently than debt and give larger safety margin to the creditors.

6.8 PROFITABILITY RATIO

1) Gross Profit Margin Ratio

The gross profit margin measures the amount that customers are willing to pay for a company's product, over and above the company's cost for that product. As mentioned previously, this is the value that the company adds to that of the products it obtains from its suppliers. This margin can depend on the attractiveness of additional services, such as warranties, that the company provides. The gross profit margin also depends heavily on the ability of the sales force to persuade its customers of the value added by the company. The gross profit margin ratio can be found out from the following equation.

Gross Profit Margin Ratio = Gross Profit --------------------- Sales



Graph no.14

Interpretation:1. In the above graph companies gross profit ratio is increase or decrease. In 2012 gross profit ratio is 19.14% and then it is decrease and reaches to 12.95% in 2014.

2. This may be arising due to fluctuation in the selling price of a product, relatively with change in material price or wages.

3. Here industrial gross profit ratio is better than company in comparison to subsequent years which shows that industry is more efficient than company to cover its admin & marketing exp.

2) Operating Profit Margin Ratio

The operating profit margin indicates how much profit a company makes after paying for variable costs of production such as wages, raw materials, etc. It


Years 2014 2013 2012 2011GP Ratio (%) 12.95% 17.36% 19.14% 14.50%

70

“Let’s Build Better Roads”shows the efficiency of a company controlling the costs and expenses associated with its business operations. The operating margin is another measurement of management’s efficiency. It compares the quality of a company’s operations to its competitors. A business that has a higher operating margin than its industry’s average tends to have lower fixed costs and a better gross margin, which gives management more flexibility in determining prices. This pricing flexibility provides an added measure of safety during tough economic times.

Operating profit Ratio= Operating profit --------------------- Sales

Years 2014 2013 2012 2011

Operating profi t

4.06% 17.47% 16.64% 19.76%


“Let’s Build Better Roads” Graph no.15

Interpretation:1. Operating profit margin measures a company’s operating efficiency and pricing efficiency with its successful cost controlling. The higher the ratio, the better a company is. The ratio indicates that there is increase in operating profit margin from 7.76% in 2007 to 19.88% in 2009.

2. In the above graph the companies’ Operating profit margin ratio is reducing an increase.

3. This is because of fluctuation in different indirect costs over its sales like cost of goods sold, administration Expense a highly ratio reduce in the year 2014 at 4.06%

4. That means a company’s operating efficiency and pricing efficiency is not with its successful cost controlling.3) Net Profit Margin Ratio

The net margin is indicative of management’s ability to operate the business with sufficient success not only to recover from revenues of the period, the cost of merchandise or service, the expenses of operating the business and the cost of the borrowed funds but also to leave a margin of reasonable compensation to the owners for providing their capital at risk. The ratio of net profit to sales essentially expresses the cost price effectiveness of the operation. The net profit margin ratio can be found out from the following equation.

Net Profit Ratio = Net Profit Ratio ---------------------*100 Sales


Years 2014 2013 2012 2011Net profi t 5.58% 10.28% 8.19% 9.70%

72


Graph no.16

Interpretation:1. In the above graph companies’ net profit ratio is increase and decrease. In 2011 ratio is 9.70% and then it is and reach to 5.58% in 2014

2. It could be because of in sufficient profit available to cover its cost of goods sold & indirect costs incurred during the business.

3. But here industrial net profit ratio is fluctuating & trying to improve its efficiency & operational activity during this subsequent year than company.

4. We can conclude Apollo being not very efficient with keeping its expenses at a minimum and its ability to retain much of its sales as profit.



4) Rate of Return on Investment= EBIT --------------------- *100 Total Assets

This is a measure of profitability from a given level of investment. It is an excellent indicator of overall performance of a company. Rate of return on investment is also known as return on assets. The return on investment is computed as follow;

Graph no.17

Interpretation:


Years 2014 2013 2012 2011Ratio (%) 5.01% 31.92% 33.28% 32.08%

74

“Let’s Build Better Roads”1. In the above graph the companies’ rate of return on investment fluctuating is with lower margin as compared to other years especially in 2012.

2. This is because that before paying interest, dividend and tax. The available profit is less than the capital employed in business say “total assets”.

3. This kind of Situation Company will increase burden of interest payment and dividend. Hence, both are not enough good for investment.

(5) Rate of Return on Equity = Profit for the Equity ------------------------------*100 Net worth

Return on equity indicates how well the firm has used the resources of owners. In fact, this ratio is one of the most important relationships in financial analysis. The earning satisfactory return is the most desirable objective of a business.


Years 2014 2013 2012 2011Ratio (%) 46.43% 12.87% 10.39% 12.49%

75


Graph no.18

Interpretation:

1. Here companies’ roe is decreasing during year 2012 as compare to 2011. But than after it increase till 2014

2. This situation shows that after paying sufficient dividend to its preference shareholders, both have sufficient profit to entitle the equity dividend to equity shareholders.


“Let’s Build Better Roads”3. Such situation will attract investors and may increase in its shareholding. It also suggests that it is properly utilizing its business resources.

6.9 VALUATION RATIO

1) Return on Assets

One of management's most important responsibilities is to bring about a profit by effective use of the resources it has at hand. One ratio that speaks to this question is return on assets. Here, the profitability ratio is measured in terms of the relationship between net profit and assets. The ROA may also be called profit-to-asset ratio. The real return on the total assets is the net earning available to owners. The return on assets ratio can be found out from the following equation.

Return on Assets = Net Profit after Tax


“Let’s Build Better Roads” --------------------- Average total Assets

Graph no.19

Interpretation:

1. This ratio measures the pre tax rate of return on assets and can be used to measure the effective utilization of assets on the profitability of the business. An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings.

2. The ratio indicates that there is increase in the ROA from 10.90% in 2011 to 36.17% in 2014. That means the percentage of the real return on the assets is lead to increase net earning of the owners. The company is effective utilization of assets on the profitability of the business.


Years 2014 2013 2012 2011Ratio (%) 36.17% 10.87% 9.10% 10.90%

78


2) Return on Total Shareholders' Equity

Return on Equity judges the profitability from the point of view of equity shareholders. This ratio has great interest to equity shareholders. The return on equity measures the profitability of equity funds invested in the firm. The investors favour the company with higher ROE. The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. The return on shareholder’s equity ratio can be found out from the following equation.

Return on Total Shareholders' Equity = Net Profit after Taxes --------------------- Average total shareholders’ equity

Years 2014 2013 2012 2011Ratio (%) 852.94% 130.96% 110.10% 115.26%



Graph no.20

Interpretation:1. This ratio relates the pre tax returns to the level of equity capital employed in the business. Caution should be used when interpreting this ratio. A high ratio, normally associated with a profitable firm, may indicate an under capitalized firm while a low ratio, which normally indicates an inefficient or unprofitable firm.

2. The ratio indicates that there is increase in the ROE from 115.26 % in 2011 to 852.94% in 2014. That means the firm has earned a satisfactory return for its equity shareholders. The rate of return on shareholders’ equity is of crucial significance in ratio analysis vis-à-vis from the point of the owners of the firm.

3) Earning Per Share

Whatever income remains in the business after all prior claims, other than owners claims (i.e. ordinary dividends) have been paid, will belong to the ordinary


“Let’s Build Better Roads”shareholders who can then make a decision as to how much of this income they wish to remove from the business in the form of a dividend, and how much they wish to retain in the business. The shareholders are particularly interested in knowing how much has been earned during the financial year on each of the shares held by them. The earning per share ratio can be found out from the following equation.

Earning Per Share = Net Profits for Equity Shares --------------------- Number of Equity Shares

Years 2014 2013 2012 2011 Earning (rs per share) 85.29 13.10 11.00 11.52

Graph no.21


“Let’s Build Better Roads”Interpretation:1. In the above graph earning per share of the company is constantly increasing from the year of 2012.

2. In this higher earning per share is indicating that after paying preference dividend out of the available profit, what could be the profit earning capacity of the business on per equity shares and is showing better performance & prospect of the company and vice-versa.

3. Here a company EPS higher in the year 2014 is 85.29 per share while EPS is lower in the year 2012 is 11.00.

4. The ratio indicates that there is increase in the EPS from 11.52% in 2011 to 85.29% in 2014. That means it is increase the growth of company. The company is able to use its equity share capital effectively with compare to other companies.

(4) Dividend pay-out ratio= Dividend per Share ----------------------- *100

Earning per Share

Years 2014 2013 2012 2011Dividend pay (rs per share)

0.29 0.90 1.36 0.43



Graph no.22

Interpretation:1. The companies Dividend Pay-Out Ratio is increase from 2011 to 2012 but it was decrease constantly up to 2014.

2. In this higher ratio indicating that firm is loosing its long term projects investments(if had ) by paying large portion of the profit in a form of dividend but on the other side more dividend will able attract more investors and shows better performance & policies of the company.

3. Here companies Dividend Pay-Out Ratio is highest in the year 2012 is at 1.36 times and it is lowest in the year 2014 at 0.29times.



SWOT ANALYSIS

STRENGHTS

ISO 9001 certified company

Acknowledged market leader with high level of customer goodwill

Always close to the customer. Proactive lather than reactive to changing market needs

Large customer base & high brand loyalty

Fastest delivery of equipment and spare parts

WEAKNESSES

In competition with the foreign companies, price of the equipment is high compare to the foreign companies

There is a lot of noise pollution at the work place. This noise is dangerous for the workers



OPPORTUNITIES

Opportunity always exists but main thing is they need to be realized and recognized. This requires a strong motivational factor and premium foresight

THREATS

There is no interference of anyone except the government because the “Apollo Earthmovers Limited” is limited company



CONCLUSION

“APOLLO EARTHMOVERS LTD” is India’s No 1 manufacture of road construction & maintenance equipment. There are very less competitors against Apollo’s product in market and quality of its products is better than competitors. Its products are increasing every year so there is bright future for company. The chairman and managing director is well-experienced person. He has experience in this field. The most important is that company’s main aim is not make profit but with profit to provide maximum service to the company in any time or position.

Company also contributes to the nation by earning foreign exchange. Company serves society providing full employment to the skilled and also unskilled people and brings up their standard of living. “APOLLO EARTHMOVERS LTD” is able to use maximum capacity of manpower and also of technical know how nowadays. This shows quality improvement of product and best management company. By these step of company there may be possible of improvement in technology knowledge in country.

I have really a unique experience in Apollo Earthmovers Ltd, mehsana during my training period. I have learnt many unknown things, which are out of my knowledge of management aspects. I have found there the management in my practical life. I have collected all my necessary information from the concerning department by myself. I have come across many intelligent and expert persons in the Apollo Earthmovers Ltd.



BIBLIOGRAPHY

BOOKS:

Narayanaswamy, “Financial Accounting a Managerial Perspective”.

Financial Management: By Prasanna Chandra, 7th Edition, and Tata McGraw Hill Publications

Search Engine:

www.google.co.in

Websites:

www.Apollo.co.in www.economictimes.com www.moneycontrol.com


http://www.moneycontrol.com/

http://www.economictimes.com/

http://www.Apollo.co.in/



Documents

Final Apollo Print