Introduction

Working Capital:

Working capital is the capital available for conducting the day-to-day operations of an organization; normally the excess of current assets over current liabilities.

Working capital (abbreviated WC) is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital equals to current assets. Net working capital (NWC) is calculated as current assets minus current liabilities.[1] It is a derivation of working capital, that is commonly used in valuation techniques such as DCFs (Discounted cash flows). If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit.

A company can be endowed with assets and profitability but short of liquidity if its assets cannot readily be converted into cash. Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash.

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CalculationThe basic calculation of the working capital is done on the basis of the gross current assets of the firm.

Basic formula

working capital = Gross Current assets

Net working capital = Current assets – Current liabilities.

working capital cycle

Definition

The working capital cycle (WCC) is the amount of time it takes to turn the net current assets and current liabilities into cash. The longer the cycle is, the longer a business is tying up capital in its working capital without earning a return on it. Therefore, companies strive to reduce its working capital cycle by collecting receivables quicker or sometimes stretching accounts payable.

Meaning

A positive working capital cycle balances incoming and outgoing payments to minimize net working capital and maximize free cash flow. For example, a company that pays its suppliers in 30 days but takes 60 days to collect its receivables has a working capital cycle of 30 days. This 30 day cycle usually needs to be funded through a bank operating line, and the interest on this financing is a carrying cost that reduces the company's profitability. Growing businesses require cash, and being able to free up cash by shortening the working capital cycle is the most inexpensive way to grow. Sophisticated buyers review closely a target's working capital cycle because it provides them with an idea of the management's effectiveness at managing their balance sheet and generating free cash flow.

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CEAT TYRES LTD

HISTORY OF THE ORGANIZATION

On the road since 1958, CEAT has run up to be one of the best tyre manufacturers

in the business. We not only make trailblazing tyres, but also market tubes and

flaps. And that's not all. At CEAT we personify our business; tough yet smooth,

secure yet ready to explore the undaunted.

They are young and revving to go; with a maturity that comes with years of market

presence. More than 3500 Cr annual turnover, an impressive list of clients and

OEMs, various awards and certificates are statistics that could speak for them. But

they'd rather scorch the road with their performance!

They believe that tyres are not just accessories; they are the force that moves their

aspirations. With them we get to choose from a wide range of tyres that suit their

needs and vehicle type. (Not to mention, their radials are racers in the world

market!) Strength is one of the most important attributes of our products, which

complements our solid foundation as a part of RPG Enterprises. Our commitment

to quality ensures that you have a safe ride, always. So go on, defy destiny.

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PRODUCT OF THE COMPANY

CEAT manufactures a wide range of tyres for various customer radials for Indian vehicles and caters to various user segments including

Heavy-duty Trucks and Buses Light Commercial Vehicles Earthmovers Forklifts Tractors Trailers Cars SUVs Motorcycles and Scooters Auto-rickshaws

It exports to over 110 countries across the world. In April 2007, the de-merger of its investment business to a separate investment and finance company was approved. CEAT is the only tyre company to be awarded the ISO/TS 16949:2002 certification. It is also the 1st Indian tyre company to get a TUV certificate.

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(D) COMPARISON OF LAST FIVE YEAR

Comparison of sales:-

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12Sales 2,32,996 2,51,369 2,80,747 3,46,892 4,49,202

2007-08 2008-09 2009-10 2010-11 2011-120

100000

200000

300000

400000

500000

600000

sales

sales

Interpretation:-

The above graph shows the comparison of sales of the company. In 2007-08 the sales of the company was around 2, 32,996 it increases to 2, 51,369 in next years. In 2011-12 it reaches to 4, 49,202. This shows that the company’s turnover is double in last five year.

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Comparison of profit after tax:-

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12PAT 7.54 22.28 161.04 -16.11 148.60

2007-08 2008-09 2009-10 2010-11 2011-12

-50

0

50

100

150

200

PAT

PAT

Interpretation:-

The above graph shows the profit after tax of the company of last five year. In 2007-08 the profit of the company was very low & it was 7.54%. In 2008-09 it increases to 22028% in 2009-10 it reaches to 160.04% which is very good for the company in 2010-11 the company had made a loss of 16.11% which is not good for the company. In last year the company had made a profit of 148.60%.

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Comparison of dividend:-

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12DIVIDEND 3.42 6.85 13.70 0.00 13.70

2007-2008 2008-2009 2009-2010 2010-2011 2011-20120

2

4

6

8

10

12

14

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DIVIDEND

DIVIDEND

Interpretation:-

The above graph shows the dividend paid by the company to its share holders in last five year. In 2010-11 the company had not paid the dividend to its share holder because of the company had made a loss of 16.11%

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WORKING CAPITAL OF CEAT TYRES LTD

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Meaning and Classification of ratio analysis:-

Meaning:- “A ratio is one number expressed in terms of another. It is a

mathematical yard stick that measures the relationship between two figures.”

“The term accounting ratio is used to describe significant relationship

which exists between figures shows in a balance sheet, in a budgetary

control system or in any other part of the accounting organization.”

Business performance can be measured by use of ratios. In fact an

analysis of financial statements is possible only when figures are

expressed as percentage or ratio. Ratio is of major importance for

financial analysis.

Classification of ratios:-

(1) Profitability Ratio:-

“These are the ratios organized to indicate the

profitability of the business.”

- Gross profit ratio

- Net profit ratio

- Operating ratio

- Expense ratio

- Return on capital employed

- Return on shareholder fund9

- Return on equity share capital

- Earnings per share

- Price earnings ratio

(2) Liquidity ratio:-

“These ratios indicate the poison of liquidity. They are

computed to ascertain whether the company is capable of meeting its

short term obligation.”

- current ratio

- liquid ratio

- acid teat ratio

(3) Leverage ratio:-

“These ratio shows composition of capital i.e. proportion

of owners capital & capital provided by out sides.”

- Proprietary ratio

- Debt equity ratio

- Capital gearing ratio

- Fixed capital to fixed assets ratio

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(4) Turnover ratio:-

“These ratios show the efficiency with which resources

are employed in business.”

- Fixed assets turnover ratio

- Total assets turnover ratio

- Stock turnover ratio

- Debtors ratio

- Creditors ratio

(5) Coverage ratio:-

“These ratios show how better the debts payment is

covered by profits in business.”

- Debt service coverage ratio

- Interest coverage ratio

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(B) Calculation and interpretation of ratio:-

1. Profitability ratio:-

(A) Gross profit ratio = Gross profit * 100

Sales

Gross profit = sales-cogs

2011-12 2010-11 2009-10 2008-09 2007-0895285.29*100464899.71

56358.1*100346892.25

86341.11*100 61059.5*100 67308.86* 100280747.60 251369.25 232996.67

20.50% 16.25% 30.75% 24.29% 28.59%

Interpretation:-

Profitability ratio shows the profit of the company. Gross profit of the company in 2007-08 was 28.59% it reaches 24.29% in next year. In 2009-10 the gross profit of the company was 30.75%. In 2010-11 the company’s profit was very low.

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(B) Net profit ratio = Net profit * 100

Sales

2011-12 2010-11 2009-10 2008-09 2007-081812.95 * 100464899.71

2228.33 * 100346892.25

16104.15* 100280747.60

1611.16 * 100 14860.44* 100251369.25 232996.67

0.39% 0.64% 5.74% 0.64% 6.38%

2011-12; 3.72%

2010-11; 4.00%

2009-10; 3.28%

2008-09; 8.39%

2007-08; 6.92%

Interpretation:-

Net profit ratio shows the profitability of the company. In 2007-08 the profit of the company was 6.38% in 2008-09 the profit of the company was 0.64% which is very low as compare to last year. In 2011-12 the profit of the company is 0.39%which is very low in the five years.

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(C) Operating ratio = COGS+ Operating exp *100

Sales

2011-12 2010-11 2009-10 2008-09 2007-08369614.42+38128.21*100464899.71

290534.15+23627.15*100346892.25

194406.49+16310.03*100 190309.75+29488.53*100 165627.81+23134.4*100280747.60 251369.25 232996.67

87.71% 90.56% 75.05% 87.44% 81.09%

2011-12; 87.71%

2010-11; 90.56%

2009-10; 75.05%

2008-09; 87.44%

2007-08; 81.09%

Interpretation:-

Operating expenses ratio shows that how much expenses had made by the company in one year. In 2007-08 the expenses of the company was 81.09% & it reaches to 90.56% in the year 2010-11. In the year 2009-10 the expenses ratio was 75.05% which is low as compare to the other years.

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(D) Expenses ratio:-

(1) Administration expenses= Adman. Exp. *100

Sales

2011-12 2010-11 2009-10 2008-09 2007-08977.24*100 1063.53*100 1188.79*100 1669.92*100 1176.23*100464899.71 346892.25 280747.60 251369.25 232996.670.21% .31% 0.42% 0.66% 0.50%

2011-12; 0.21%

2010-11; 0.31%

2009-10; 0.42%

2008-09; 0.66%

2007-08; 0.50%

Interpretation:-

Administration expenses show the business expenses of the company. In 2007-08 the administration Expenses was 0.50% of the total operating expenses. It reaches to 0.66% in the next year; in 2011-12 the expenses of the company is 0.21% which is very low as compare to 2007-08.

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(2) Financial expenses= finance exp.*100

sales

2011-12 2010-11 2009-10 2008-09 2007-0819865.91*100 8675.85*100 5901.44*100 6723.61*100 5841.79*100464899.71 346892.25 280747.60 251369.25 232996.674.27% 2.33% 2.10% 2.67% 2.51%

2011-12; 4.27%

2010-11; 2.33%

2009-10; 2.10%

2008-09; 2.67%

2007-08; 2.51%

Interpretation:-

Financial expenses shows the company’s financial expenses which the company had made for improving its performance, its productivity, & for its development. In 2007-08it was 2.51% & it reaches to 4.27% which is double in five years. In 2008-09 it was 2.67%, in 2010-11 it was 2.33%.

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(3) Selling & dis. Exp= selling exp*100

Sales

2011-12 2010-11 2009-10 2008-09 2007-0838128.21*100 23627.15*100 16310.03*100 29488.53*100 2313.44*100464899.71 346892.25 280747.60 251369.25 232996.673.72% 4.00% 3.28% 8.39% 6.92%

2011-12; 3.72%

2010-11; 4.00%

2009-10; 3.28%

2008-09; 8.39%

2007-08; 6.92%

Interpretation:-

Selling & distribution expenses Shows Company’s manufacturing expenses & transportation expenses. Advertising & marketing expenses is also covered in selling & distribution expenses. In 2007-08 the expense was 6.92% it reaches 3.72% in 2011-12. In 2008-09 it was 8.39% which is very high.

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(E) Return on capital employed= Ebit *100

Capital employed

2011-12 2010-11 2009-10 2008-09 2007-082426.99*100 3324.19*100 23899.65*100 3317.22*100 19731.04*100124925.2 127327.98 94076.50 88650.58 77864.811.94% 2.61% 25.40% 3.74% 25.34%

2011-12; 1.94% 2010-11; 2.61%

2009-10; 25.40%

2008-09; 3.74%

2007-08; 25.34%

Interpretation:-

The above ratio shows the return on capital employed by the company on one year. The company had earned 25.34% return on its capital employed. In 2011-12 its return is very low & it is 1.94% of its total capital which is very low & not good for the company.

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(F) Return on shareholder fund= PAT *100

SHARE HOLDER FUND

2011-12 2010-11 2009-10 2008-09 2007-081812.95*100 2228.33*100 16104.15*100 1611.16*100 14860.44*10067761.25 64914.52 62871.45 48838.15 51325.732.68% 3.43% 25.61% 3.30% 28.95%

2011-12; 2.68%2010-11; 3.43%

2009-10; 25.61%

2008-09; 3.30%

2007-08; 28.95%

Interpretation:-

Return on shareholders’ funds shows the hoe much return the shareholder were get in return. In 2007-08 the ratio was 28.95% & after that the return of the company were declined & reaches to 3.30% in 2008-09. In 2009-10 it increases to 25.61% which is good for the company.

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(G) Return on equity share holder fund= PAT – pref.div *100

Equity share holder fund

2011-12 2010-11 2009-10 2008-09 2007-081812.95-0*100 2228.33-0*100 16104.15-0*100 1611.16-0*100 14860.44-0*10067761.25 64914.52 62871.45 48838.15 51325.732.68% 3.43% 25.61% 3.30% 28.95%

2011-12; 2.68%2010-11; 3.43%

2009-10; 25.61%

2008-09; 3.30%

2007-08; 28.95%

Interpretation:-

This ratio indicates the earning of equity share holders of the company. In 2007-08 the ratio was 28.95% & after that the return of the company were declined & reaches to 3.30% in 2008-09. In 2009-10 it increases to 25.61% which is good for the company.

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(H) Earnings per share= profit available for share holder

No of equity shares

2011-12 2010-11 2009-10 2008-09 2007-081812.95 2228.33 16104.15 1611.16 14860.443424.35 3424.35 3424.35 3424.25 3424.250.53 rs 0.65 rs 4.70 rs 0.47 rs 4.34 rs

2011-12; 0.532010-11; 0.65

2009-10; 4.7

2008-09; 0.47

2007-08; 4.34

Interpretation:-

Earnings per share shows that how much profit each equity shareholders received. In 2007-08 the earnings of the company was 4.34 Rs & it reaches to 4.70 Rs in 2009-10.in 2008-09, 2010-11 it was 0.47 Rs & 0.65 Rs accordingly. This ratio is not good for the company.

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(J) Price earnings ratio= market price of share

Earnings of share holders

2011-12 2010-11 2009-10 2008-09 2007-08107.20 107.20 107.20 107.20 107.200.53 0.65 4070 0.47 4.33202.26rs 164.92 rs 22.81 rs 228.09 rs 24.76 rs

2011-12; 202.26

2010-11; 164.92

2009-10; 22.81

2008-09; 228.09

2007-08; 24.76

Interpretation:-

price earnings ratio shows that how much return the shareholders had made by its current market price in the market. In 2007-08 it was around 24.76 Rs, in 2008-09 the earnings was 228.09 Rs, in 2010-11 it was 164.92 Rs. This ratio is very good for the company.

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2. Liquidity ratio:-

(A) Current ratio:- Current assets

Current liabilities

2011-12 2010-11 2009-10 2008-09 2007-08144851.18 108402.33 92238.09 73964.32 69055.52177686.09 106734.27 75467.05 48904.12 52827.320.82:1 1.02:1 1.22:1 1.51:1 1.31:1

2011-12; 0.82

2010-11; 1.02

2009-10; 1.22

2008-09; 1.51

2007-08; 1.31

Interpretation:-

Current ratio shows that how much current assets & current liabilities were there in the company. In 2007-08 it was 1.31:1 which means that the company had 1.31 current assets against its current liabilities. In 2008-09 it was 1.51:1, in 2009-10 it was 1.22:1, & in 2011-12 it was 0.82:1 which was very low in the five years.

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(A) Liquid ratio:- liquid Assets

Liquid liabilities

2011-12 2010-11 2009-10 2008-09 2007-0888182.71 51656.03 51630.52 52022.69 34949.52177686.09 106734.27 75467.05 48904.12 52827.320.50:1 0.48:1 0.68:1 1.06:1 0.66:1

2011-12; 0.5

2010-11; 0.48

2009-10; 0.68

2008-09; 1.06

2007-08; 0.66

Interpretation:-

Liquid ratio shows that how much liquidity the company has in the market. Whether the company is liable to pay its liabilities or not. This all were calculated on the bases of liquidity ratio. The company has more liquidity in 2008-09 which was 1.06:1 means the company is in strong position to repay its liabilities. In 2011-12 it was 0.50:1 which shows that the company had borrowed more money from the market.

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(B) Acid test ratio:- cash & bank

Liquid liabilities

2011-12 2010-11 2009-10 2008-09 2007-083595.98 4788.06 13998.91 20151.84 4158.70177686.09 106734.27 75467.05 48904.12 52827.320.20:1 0.05:1 0.19:1 0.41:1 0.08:1

2011-12; 0.2

2010-11; 0.05

2009-10; 0.19

2008-09; 0.41

2007-08; 0.08

Interpretation:-

Acid test ratio shows that how much cash is there in the hand of the company against its liquid liabilities. In 2007-08 it was around to 0.08:1, in 2009-10 it was 0.41:1. In last year it was around to 0.2:1 which is very low & it is not good for the company.

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3. Leverage ratio:-

(A) Proprietary ratio: - proprietary fund *100

Total assets

2011-12 2010-11 2009-10 2008-09 2007-0867761.25 64914.52 62871.45 48838.15 51325.73306216.95 265504.23 198365.44 157725.72 149025.2122.13% 24.45% 31.69% 30.96% 104.69%

2011-12; 22.13%

2010-11; 24.45%

2009-10; 31.69%

2008-09; 30.96%

2007-08; 104.69%

Interpretation:-

Proprietary ratio shows the total proprietary fund against its total assets. In 2007-08

The proprietary ratio was around 104.69% which is very high against its total assets. In 2008-09 it was around 30.96%, in 2009-10 it was 31.69% & in 2011-12 it was 22.30% which is good for the company.

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(B) Debt equity ratio:- long term debt *100

Eq. share cap.

Long term debt = secured loan

2011-12 2010-11 2009-10 2008-09 2007-0857163.95 62413.46 31205.11 39812.43 26539.0867761.25 64914.52 62871.45 48838.15 51325.7384.36% 963.15% 49.63% 81.52% 51.71%

2011-12; 84.36%

2010-11; 963.15%

2009-10; 49.63%

2008-09; 81.52%2007-08; 51.71%

Interpretation:-

The above ratio shows how much debt the company has against its equity share holders. In 2007-08 the company has 51.71% debts against its equity. In 2010-11 it reaches to 963.15% which is very high & not good for the company, in 2011-12 it was around 84%. This ratio shows that the company has more debt against its equity share holders.

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(C) Capital gearing ratio:- Fixed charge bearing cap. *100

Equity share capital

Fixed charge bearing capital = secured loan + preference share

2011-12 2010-11 2009-10 2008-09 2007-0857163.95 62413.46 31205.11 39812.43 26539.083424.35 3524.35 3424.35 3424.25 3424.2516.69% 18.23% 9.11% 11.63% 7.75%

2011-12; 16.69%

2010-11; 18.23%2009-10; 9.11%

2008-09; 11.63%

2007-08; 7.75%

Interpretation:-

Capital gearing ratio shows the company’s long term borrowing funds which a company had borrowed. In 2007-08 the company had 7.75% of the total equity. In 2008-09 it was around 11.63%, in 2009-10 it was around 9.11% in 2011-12 it was 16.69% which shows that the company had had taken more borrowings from out siders.

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(C) Fixed asset to fixed capital:- Fixed assets

Fixed capital

2011-12 2010-11 2009-10 2008-09 2007-08150152.73 148448.92 100276.58 79494.69 79009.96124925.2 127327.98 94076.56 88650.58 77864.811.20:1 1.17:1 1.07:1 0.89:1 1.01:1

2011-12; 1.2

2010-11; 1.17

2009-10; 1.07

2008-09; 0.89

2007-08; 1.01

Interpretation:-

The above ratio shows that how much fixed assets were there in the company against its fixed capital. In 2007-08 it was around 1.01:1 which is good for the company. In 2008-09 it reaches to 0.89:1 means the company has 0.89 fixed assets against its 1 capital. In 2011-12 it was around 1.2:1 which is good for the company.

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4. Turnover ratio:-

(A) Fixed assets turnover ratio:-Sales

Fixed assets

2011-12 2010-11 2009-10 2008-09 2007-08464899.71 346892.25 280747.60 251369.25 67308.86150152.73 148448.92 100276.58 79494.69 79009.963.10 times 2.34 times 2.80 times 3.16 times 0.85 times

2011-12; 3.1

2010-11; 2.34

2009-10; 2.8

2008-09; 3.16

2007-08; 0.85

Interpretation:

Fixed assets turnover ratio shows that how much fixed assets were there in the company against sales of the company. In 2007-08 it was around 3.16 times of the sales. In 2009-10 it was 2.8 times, in 2011- 12 the fixed assets turnover ratio was 3.1 times of its sales.

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(B) Total assets turnover ratio:-Sales

Total assets

2011-12 2010-11 2009-10 2008-09 2007-08464899.71 346892.25 280747.60 251369.25 67308.86306216.95 169213.86 130272.83 114982.95 101815.991.52 times 2.05 times 2.16 times 2.19 times 0.66 times

2011-12; 1.52

2010-11; 2.05

2009-10; 2.16

2008-09; 2.19

2007-08; 0.66

Interpretation:-

Total assets turnover ratio shows the total assets of the company against its sales. In 2007-08 the total assets were 2.19 times of its sales which are good for the company. In 2010-11 it was around 2.05% , in 2011-12 the total assets were 1.52 times of the sales.

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(C) Debtors turnover ratio:-

Debtors ratio: - debtors + Bills receivables*360

Credit sales

2011-12 2010-11 2009-10 2008-09 2007-0860268.47+63664.69*360 46867.97+0*360 37631.61+0*360 31870.85+0*360 30790.82+0*360464899.71 346892.25 280747.60 251369.25 67308.8696 days 49 days 48 days 46 days 165 days

2011-12 2010-11 2009-10 2008-09 2007-08360 360 360 360 36096 49 48 46 1653.75 times 7.35 times 7.5 times 7.83 times 2.18 times

2011-12; 96

2010-11; 49

2009-10; 48

2008-09; 46

2007-08; 165

Interpretation:-

Debtor’s ratio shows that how much debt the company has to recover from the debtors of the company. In 2007-08 debtors turnover ratio was around 2.18 times or more than 160 days in a single year. In 2008-09 it was 46 days; in 2009-10 this ratio was 48 days. In 2011-12 it increases to 96 days.

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(D) Creditors turnover ratio:-

Creditor’s ratio: - Creditors + bills payables *360

Credit purchase

2011-12 2010-11 2009-10 2008-09 2007-0866894.25+0*360 28308.34+0*360 49159.76+0*360 29496.17+0*360 37039.33+0*360337931.29 264969.78 172825.69 170428.51 147852.8371 days 38 days 102 days 62 days 90 days

2011-12 2010-11 2009-10 2008-09 2007-08360 360 360 360 36071 38 102 62 905.07 times 9.47 times 3.53 times 5.8 times 4 times

2011-12; 71

2010-11; 38

2009-10; 102

2008-09; 62

2007-08; 90

Interpretation:-

The above ratio shows credit period which the company gave to its creditors. In 2007-08 this ratio was around 90 days. It reaches to 71 days in 2011-12. In 2008-09 the creditor’s ratio was 62 days; in 2009-10 it was 102 days.

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(D) Stock turnover ratio:- COGS

Average stock

2011-12 2010-11 2009-10 2008-09 2007-08369614.42 290534.15 194406.49 190309.75 165687.8120683.7 19856.58 11395.63 10059.92 9833.6117.87 times 14.63 time 17.06 times 18.92 times 16.85 times

2011-12; 17.87

2010-11; 14.63

2009-10; 17.06

2008-09; 18.92

2007-08; 16.85

Interpretation:-

Stock turnover ratio shows that how much stock were being turnover in one year. In 2007-08 the stock turnover ratio of the company was 16.85 times. In 2008-09 the turnover ratio was 18.92 times; in 2009-10 it was 17.06%. In 2011-12 the ratio was 17.87 times. This ratio of the company is very good for the company.

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5. Coverage Ratio:-

(A) Debt Service coverage ratio: - P.A.D.P.

Installment+ interest

2011-12 2010-11 2009-10 2008-09 2007-0824693.94 13501.08 24946.07 11615.74 23853.4443891.61 -24358.83 14290.45 -24652.55 -20845.20.56 times 10857.75 times (loss) 1.75 times 13036.81 times(loss) 3008.24 times

2011-12; 0.56

2010-11; 10857.75

2009-10; 1.75

2008-09; 13036.81

2007-08; 3008.24

Interpretation:-

This ratio show that how much debt covered by the company in one year. Debt service coverage ratio shows that how much debt the company recovers in the last five year. In 2007-08 the debt coverage ratio of the companywas3008.24 times. In 2011-12 it was around to 0.56 times which is very low in the five year. In 2008-09 the company has a loss of 13036.80 times of its profit.

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(B) Interest coverage ratio: - EBIT

Interest

2011-12 2010-11 2009-10 2008-09 2007-0819731.04 3717.22 23899.65 3324.19 2426.995693.88 6552.56 5683.13 7849.52 15600.780.16 times 0.42 times 4.21times 0.57 times 3.47 times

2011-12; 0.16 2010-11; 0.42

2009-10; 4.21

2008-09; 0.57

2007-08; 3.47

Interpretation:-

Interest coverage ratio shows the company’s interest recovery from the creditors. In 2007-08 it was 3.47 times, in 2011-12 it was around to 0.16 times or in 2009-10 this ratio of the company was 4.21 times which is very high.

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