Project Prepared By:

Nikhil Javeri
T. Y. BAF
Management Accountancy
 Acknowledgement

My deepest thanks to our Lecturer, Mr. Jusin for guiding

and correcting various documents of mine with great
attention and
care. He has taken pain to go through the project and
make necessary correction as and when needed.

I also extend my heartfelt thanks to my family and well

wishers for constantly supporting me throughout the
project.
CONSOLIDATED BALANCE SHEET
AS AT 31st DECEMBER, 2009
CONSOLIDATED PROFIT AND LOSS STATEMENT
FOR THE YEAR ENDED 31st DECEMBER, 2009
 Key Accounting Ratios

Liquidity Ratios:

1) Current Ratio:

Formula: Current Assets / Current Liabilities

Particulars 2008 2009

Current Assets, Loans & 2727.20 2330.17
Advances
Current Liabilities & Provisions 2866.19 3265.26
Current Assets / Current 0.95 0.71
Liabilities

Analysis:
The industry norm value of current ratio is 2:1. However
it does not mean so that higher current ratio means good
company profile.

In 2008, the Current ratio for the company was much

higher than that in 2009. Hence, it had a better scope for
meeting the current obligations in the previous year.
Moreover, there was a greater safety of funds for the
short term creditors in the previous year.
2) Quick Ratio:

Formula: Current Assets - Inventories / Current Liabilities

Particulars 2008 2009

Current Assets, Loans & 2727.20 2330.17
Advances
Inventories 799.34 786.09
Quick Assets 1927.86 1544.08
Current Liabilities & Provisions 2866.19 3265.26
Current Assets / Current 0.67 0.47
Liabilities

Analysis:
This ratio is calculated on pre assumption that all the
current assets are of same level of liquidity. But this is
not the reality. Cash in hand is more liquid that the same
cash equivalent of inventory. So to get a real picture of
liquidity we calculate Liquid Ratio.

The ideal quick raio for a company should be 1:1. In

2008, the company had moved towards the ideal ratio
but the scenario changed in 2009 where the ratio
decreased to quite some extent. This is mainly due to
huge amounts of unutilized cash in hands of company in
2009.

3) Stock to Working Capital Ratio:

 Formula: Closing Stock / Working Capital

Particulars 2008 2009

Closing Stock 799.34 786.09
Current Assets (a) 2727.20 2330.17
Current Liabilities (b) 2866.19 3265.26
Working Capital [(a)-(b)] (138.99) (935.09)
Closing Stock / Working Capital (5.75) (0.84)

Capital Structure Ratios:

1) Debt Equity Ratio:

Formula: Total Debt / Shareholder’s Equity

Particulars 2008 2009

Total Debt 482.03 566.92
Shareholder’s Equity 4,824.25 5,869.94
Debt / Shareholder’s Equity 10.00 9.66

2) Proprietary Ratio:

Formula: Shareholder’s Equity / Total Assets

Particulars 2008 2009

Shareholder’s Equity 4,824.25 5,869.94
Total Assets 8,515.87 10,058.18
Shareholder’s Equity / Total 0.57 0.58
Assets

Profitability Ratios:

1) Gross Profit Ratio:

 Formula: [Gross Profit / Net Sales] x 100

Particulars 2008 2009

Gross Profit 1,624.82 2,250.70
Net Sales 7,693.94 8,479.55
Gross Profit / Net Sales] x 100 21.12% 26.54%

2) Net Profit Ratio:

Formula: [Net Profit / Net Sales] x 100

Particulars 2008 2009

Net Profit 1,099.65 1,563.91
Net Sales 7,693.94 8,479.55
[Net Profit / Net Sales] x 100 14.29% 18.43%

3) Operating Profit Ratio:

Formula: [Operating Profit / Net Sales] x 100

Particulars 2008 2009

Operating Profit 1,896.16 2,631.74
Net Sales 7,693.94 8,479.55
[Operating Profit / Net Sales] x 24.64% 31.04%
100

4) Operating Expenses Ratio:

Formula: [Operating Expenses / Net Sales] x 100

Particulars 2008 2009

Operating Expenses 6,031.53 6,017.28
Net Sales 7,693.94 8,479.55
[Operating Expenses / Net Sales] x 78.39% 70.96%
100

Efficiency Ratios:

1) Fixed Assets Turnover Ratio:

Formula: Net Sales / Net Fixed Assets

Particulars 2008 2009

Net Sales 7,693.94 8,479.55
Net Fixed Assets 5,271.79 6,535.90
Net Sales / Net Fixed Assets 1.46 1.30

2) Total Assets Turnover Ratio:

Formula: Net Sales / Total Assets

Particulars 2008 2009

Net Sales 7,693.94 8,479.55
Total Assets 8,515.87 10,058.18
Net Sales / Total Assets 0.90 0.84

Miscellaneous Ratios:

1) Price Earning Ratio:

Formula: Market Price / Earning Per Share

Particulars 2008 2009

Market Price 10.00 10.00
Earning Per Share 58.51 83.14
Market Price / Earning Per 0.17 0.12
Share

2) Return On Proprietary Fund Ratio:

Formula: [Net Profit After Tax / Proprietary Fund] x100

Particulars 2008 2009

Net Profit After Tax 1,099. 1,563.
6 91
Proprietary Fund 4,824. 5,869.
2 94
[Net Profit After Tax / Proprietary Fund] 22.78 26.63
x100

3) Return On Investment Ratio:

Formula: [Net Profit Before Tax / Capital Employed] x100

Particulars 2008 2009

Net Profit Before Tax 1,624. 2,250.
8 7
Capital Employed 6,793. 5,650.
8 8
[Net Profit Before Tax / Capital Employed] 23.91 39.82
x100 % %