1.

PROFIT MARGIN RATIO: This ratio, also known as Return on sales (ROS), measures the amount of net profit earned byeach rupee of revenue. This indicates relationship between profit after tax and sales for the year.This ratio indicates amount of net profit earned for each rupee of revenue. Formula = Profit after Tax/ Sales Profit margin ratio in 2009 =_ 303.84_*100__= 12.53% 2423.90 Profit margin ratio in 2010=477.74 *100=16.61% 2876.15 Profit margin ratio in 2011=727.10*100 =15.61% 4658.12

Series 1
18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2009 2010 2011 Series 1 12.53% 16.61% 15.61%

Comment:The profit margin ratio of Yes Bank shows increase, 12.53 % in 2009 to 16.61 % in 2010.In the year 2009 the profit margin level of the company increases more from the level of 2010-11. It decreases from 16.61% of 2010 to the level of loss 15.61% in 2011. It is bad for companys profit earning capacity. It affects companys credit in the market. The company has to take certain steps immediately to improve their management, which lead the company to sufficient profit earning level. 2. ASSETS TURNOVER RATIO: This ratio measure firms efficiency in utilizing its assets. It indicates how many times the assets were turned over in a period and there by generated sales. If assets turnover is high, the is managing its assets efficiently. If it is low, it means the company has more assets then it really needs for its operation. This ratio shows the firms ability in generation sales from all financial resources committed total assets. Formula= Sales______ Average Total Assets

ASSET TURNOVER RATIO SALES AVERAGE TOTAL ASSETS RATIO

YEARS 2009 2010 2011 2423.9 2876.15 4658.12 194.88 206.4 255.3 12.43 13.93 18.25

ASSET TURNOVER RATIO

RATIO

18.25 12.43 13.93

2009

2010

2011

COmment: In the year 2007, Yes Bank had sales of about Rs. 8.5 per rupee of investment in assets as compare to about Rs. 11.96 in 2008. The increase of 3.46 in sales per rupee of investment indicates significant improvement in utilization of assets in the year 2008. The higher this ratio the greater is the efficiency with which the fix assets being used. This ratio also shows increase in the year 2009 from the year 2008. It shows that company has made good use of their Funds by utilizing them into assets. This ratio suggests that the company is utilizing its fixed assets efficiently. GROSS PROFIT RATIO:This ratio is found out to know the gross profit margin in respect to sales. This is used to know how much the firm is earning for the specific level of sales. Formula= Gross Profit * 100 Sales

Gross profit ratio:years gross profit sales ratio 2009 2010 2011 520.79 791.17 1193.6 2423.9 2876.15 4658.12 21.49 27.51 25.62

GROSS PROFIT RATIO

80 70 3060 Axis Title 2550 2040 1530 1020 510 0 0 Series3 Series2 Series1 ratio Series3 Series2 Series1 ratio 25.62 27.51 21.49 21.49 Series1 Series2 Series3 25.62 27.51

Comment: Here gross profit of the firm is decreasing from the year 2007 to 2008. But after 2008 gross profit again start to increase in the year 2009, but at the decreasing rate. The increase in the ratio is low compared to decrease in the ratio. This shows that firms earnings are not in respect to sales.

LIQUIDITY RATIO : Liquidity is the ability of a business to meet its short-term obligations when they fall due. An enterprise should have enough cash and other current assets which can be converted into cash, so that it can pay its suppliers and lenders on time. The most commonly used ratios are: Current ratio Quick ratio Debtor turnover ratio

Inventory turnover ratio 1. CURRENT RATIO:This is the ratio of current assets to current liabilities. It is a widely used indicator of a companys ability to pay its debts in the short term. It shows the amount of current assets a company has per rupee of current liabilities. Formula= Current assets_______________ Current liabilities

current ratio years current assets current liabilities ratio

2009 2010 2011 1326.86 1190.73 2186.11 2918.1 1745.32 2583.07 0.45 0.68 0.85

CURRENT RATIO
years ratio

0.85

0.68

0.45 2010 2009

2011

Comment:The Current ratio indicates the working position of the company. There has been considerable deterioration in the current ratio of the company from 2008 to 2009. As we have seen on one hand current assets and current liabilities both are increasing. The decrease in current ratio means, that in the year 2009 compared to 2008 the company had less current assets to meet its current liabilities. As shown that the decrease in the year 2009 is less as compared to increase in the year 2008. The situation of working capital of the company is more declined year to year. If immediate steps are not to be taken by the company to remedy the situation, the company will be put into considerable trouble.

2. QUICK RATIO/ACID TEST RATIO: The quick ratio or acid test ratio is computed as a supplement to the current ratio. This ratio relates relatively more liquid current assets, usually current assets less inventories, to current liabilities. All current assets are not equally liquid. While cash is readily available to make payments to suppliers and debtors can be quickly converted into cash, inventories are two steps away from conversion into cash. Thus, a large current ratio by itself is not a satisfactory measure of liquidity when inventories constitute a major part of the current assets. Formula= Quick assets (current assets-stock-debtors) Current Liabilities quick ratio years 2009 2010 2011 quick assets 1326.86 1190.73 2186.11 current liabilities 2918.1 1745.32 2583.07 ratio 0.45 0.68 0.85

Formatted Table

QUICK RATIO
years ratio

Formatted: Font: (Default) Calibri, Font col Black

0.85 0.68 0.45 2010 2009 2011

Formatted Table Comment:Companys inventories drove the improvement in the current ratio of the company. Once, we remove them there is no change in the liquidity measure of the company. As we have seen in the year 2008, there is a continuous decrease. It shows that the companys liquidity is continually decreases. The more cash in the company shows more liquidity of the company. We show that ratio is in the decreasing trend. It also describes the less liquidity of cash in the company. In the year 2008 ratio is more compared to 2007 but it again decreases in the year 2009.

EARNING PER SHARE:Financial analysts regard the earning per share(EPS)as an important measure of profitability.EPS is useful in comparing performance over time. But it is not of much help in making comparisons across firms because the no. of equity shares can differ even if all of them have identical amount of share holders equity. It is useful as an input into the price earning ratio. Formula= Profit After Tax*10 No. of equity Shares

PROFIT MARGIN RATIO

YEAR S PROF IT SALES RATI O

2009 2010 303. 84 477.74 2423 2876.1 .9 5 12.5 3 16.61

2011 727.1 4658. 12 15.61

Comment [u1]: Comment [u2]:

Comment [u3]:

Formatted Table

Formatted Table

Comment:This ratio shows the profitability of the firm from the owners point of view. In the year 2007, EPS is Rs. 3.37 but then after the EPS ratio has increasing trend and it reach at Rs.10.23 in the year 2009. This financial position of the company shows a considerable increase from its position of the previous year. The EPS capacity of company increase more in the year 2009 compare to the year 2008. The overall financial position of the company is satisfactory. It increases the attraction of shareholders to invest in the company. It also affects the current market price of the share in the share market. As we have shown in the past, the high EPS always attracts the investors to invest in companys share. .

4 Series 1 3 Series 2 Series 3 2

0 Category 1 Category 2 Category 3 Category 4

Project report On Financial statement analysis of Yes Bank through Ratio Analysis technique For the partial fulfillment of the requirement of Bachelor of Business Administration (BBA) Time (2011-12) Submitted by Neetu Chawla BBA 6thSEM.