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INFERENCES

Ratios Mar '13 Mar '12 Mar '11

1) Curr ent Ratio

Current Ratio 1.44 1.26 1.19

The current ratio has increased subsequently from 2011-13, the reason behind it being the

increase in current assets. Though current liabilities have also increased but the increase in

Current assets is more than the per year increase in current liabilities.

The factors that have contributed to increase in current assets are as follows-

Inventories 56,829.20 49,284.52 36,404.08

Sundry Debtors 15,502.87 8,869.65 5,799.28

Net Block 60,119.33 58,187.40 41,581.07

2) Quick Ratio

Quick ratio 0.74 0.53 0.48

The quick ratio has increased subsequently from 2011-13, this shows that the short term

liquidity position of the company is improving.

3) Debt Ratio

Debt ratio 0.55 0.49 0.47

The debt ratio has increased marginally over the years, this indicates that the percentage of a

company's assets that are provided via debt have increased i.e. more proportion of a

company's assets are financed through debt.

4) Debt Equi ty Ratio

Debt Equity Ratio 1.22 0.95 0.88

The ratio is increasing from 2011-13this implies that the company has been aggressive in

financing its growth with debt.

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5) Asset Turnover Ratio

Asset Turnover Ratio 3.61 3.31 3.06

The asset turnover ratio has increased this implies that the company is using its assetsefficiently to generate sales revenue.

6) Times I nterest Earned

Times Interest Earned 1.62 4.32 9.70

The TIE Ratio has decreased over the years this signifies that the income before interest and

tax is decreasing and at present it is just enough to pay of its interest expense.

7) Retur n on Assets

A deteriorating trend means that profitability is decreasing. This is shown in Profit & Loss

account. The profit is continuously decreasing

8) Return on Equity

ROE 6.83% 13.46% 20.22%

Return on equity is an important measure of the profitability of a company, it can imply the

company is not able to generate good revenues on investments.

9) I nventory Turnover Ratio

Inventory Turnover Ratio 7.72 6.72 7.40

For the year 2011-2012 the ratio has decreased, it might be because of decrease in sales that

has led to keeping of more stock of inventory, later on it has increased showing increase in

sales and less hoarding of inventory.

ROA 3.08% 6.89% 10.75%

Net Profit

Mar '13 Mar '12 Mar '113,954.62 7,445.48 10,220.55

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10) Dai ly Sales Outstanding

Days Sales outstanding 12 9 7

The ratio is increasing implying the sales are now taking more time to get converted into cashandincrease in the trend is unfavourable and indicates inefficiency in credit sales collection.

11) Debtors Turnover Ratio

Debtors turnover ratio 29.88 40.28 50.23

The ratio is decreasing which signifies that the company should re-assess its credit policies in

order to ensure the timely collection of imparted credit that is not earning interest for thefirm.

12) Equity multipli er Ratio

Equity Multiplier 221.51% 195.30% 188.16%

The higher the ratio the higher the financial leverage, which means the company is relying

more on debt to finance its assets.