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H M T Ltd. was incorporated in 1953 by the Government of India as a Machine Tool manufacturing company.Over the years diversified into Watches, Tractors, Printing Machinery, Metal Forming Presses, Die Casting & Plastic Processing Machinery, CNC Systems & Bearings.Successful technology absorption in all product groups through collaborations with world renowned manu- facturers & further strengthened by continuous inhouse R&D.Today Main Products Accessories, Watches, Sound Wave Ballast, Tractors, Miscellaneous Sales & Sundry Jobs, Job Work, Lamp Components, Lamps GLS, Fluorescent Lamps, Lamps MV, SV & MH, Miniature Batteries, Lamp Making Machines, Precision Machines, Precision Boring Machinery, Machine Tools (Including Plastic Injection Moulding Machines), CNC Systems, Metal Forming Presses, Printing Machines, Food Processing Machinery, Ball Screws,

Titan Industries is the world's fifth large wrist watch manufacturer and India's leading producer of watches under the Titan, Fastrack, Sonata, Nebula, RAGA, Regalia, Octane & Xylys brand names. It is a joint venture between the Tata Group, and the Tamil Nadu Industrial Development Corporation (TIDCO). Its product portfolio includes watches, accessories and jewellery, in both contemporary and traditional designs. It exports watches to about 32 countries around the world with manufacturing facilities in Hosur, Dehradun, Goa and manufactures precious jewellery under the Tanishq brand name, making it India's only national jewellery brand. It is a subsidiary of the Tata Group. Titan watch division was started in 1987. At launch it was the third watch company in India after HMT and Allwyn. Titan formed a joint venture with Timex, which lasted until 1998, and setup a strong distribution network across India. As of 2010, Titan watches account for a 60% share of the total Indian market and are also sold in about 40 countries through marketing subsidiaries based in London, Aden, Dubai and Singapore. Titan watches are sold in India through retail chains controlled by Titan Industries.

BALANCE SHEET OF HMT LTD. March 2010 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities March 2009

760.35 760.35 443.00 0.00 -506.11 0.00 697.24 254.65 366.26 620.91 1,318.15

760.35 760.35 443.00 0.00 -453.20 0.00 750.15 341.70 231.42 573.12 1,323.27

March 2009 Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses

March 2010

136.39 96.93 39.46 0.82 765.56 29.00 68.64 2.69 100.33 624.66 1.69 726.68 0.00 142.56 71.81 214.37 512.31 0.00

132.49 93.42 39.07 2.29 765.71 40.38 74.44 2.02 116.84 583.89 9.64 710.37 0.00 124.26 70.20 194.46 515.91 0.29
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Total Assets Contingent Liabilities Book Value (Rs)

1,318.15 1,323.27 10.52 3.34 14.40 4.04

P/L ACCOUNTS OF HMT LTD. March 2010 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses March 2009

194.94 1.48 193.46 53.36 -12.23 234.59 120.83 3.97 67.62 0.07 20.11 6.62 -4.62 214.60

164.44 1.92 162.52 54.56 -11.90 205.18 105.96 4.31 63.67 0.06 34.40 5.73 -4.67 209.46

Operating Profit -33.37 PBDIT 19.99 Interest 68.61 PBDT -48.62 Depreciation 3.92 Other Written Off 1.87 Profit Before Tax -54.41 Extra-ordinary items 1.50 PBT (Post Extra-ord -52.91 Items) Tax 0.00 Reported Net Profit -52.91 Total Value Addition 93.77 Preference Dividend 0.00 Equity Dividend 0.00 Corporate Dividend Tax 0.00 Per share data (annualised) Shares in issue (lakhs) 7,603.50 Earning Per Share -0.70 (Rs) Equity Dividend (%) 0.00 Book Value (Rs) 3.34

-58.84 -4.28 63.68 -67.96 3.40 1.38 -72.74 3.77 -68.97 1.81 -70.79 103.50 0.00 0.00 0.00 7,603.50 -0.93 0.00 4.04

ADDITIONAL INFORMATION:

Opening balance of inventory for year 2008-09 is 52.40 Opening balance of share holder equity for year 2008-09 is 377.94 opening balance of debtors for year 2008-09 is 104.02 opening balance of Total assets for year 2008-09 is 1341.93 High and low share prices on 31st march 2009 72.10 and 69.00 High and low share prices on 31st march 2010 70.75 and 68.65

BALANCE SHEET OF TITAN INDUSTRIES March 2010 Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 44.39 44.39 0.00 0.00 679.99 0.00 724.38 72.79 0.00 72.79 797.17 Mar '10 March 2009 44.39 44.39 0.00 0.00 506.85 0.00 551.24 116.76 58.65 175.41 726.65 Mar '09

Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories

624.33 361.70 262.63 12.29 7.63 1,340.33

593.04 318.56 274.48 19.52 7.66 1,202.69

Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

93.61 61.72 1,495.66 200.99 125.00 1,821.65 0.00 1,172.28 134.74 1,307.02 514.63 0.00 797.18 72.19 163.19

106.22 54.69 1,363.60 128.82 0.00 1,492.42 0.00 974.00 93.44 1,067.44 424.98 0.00 726.64 65.46 124.18

P/L ACCOUNTS OF TITAN INDUSTRIES.

Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income

4,703.12 28.70 4,674.42 8.62 111.66 4,794.70

3,926.09 44.34 3,881.75 -5.91 178.67 4,054.51

Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

3,561.05 17.47 275.64 6.11 458.69 30.86 -0.04 4,349.78 Mar '10 12 mths

2,940.86 16.11 234.20 8.99 427.47 86.20 -0.09 3,713.74 Mar '09 12 mths 346.68 340.77 68.46

Operating Profit PBDIT Interest

436.30 444.92 63.52

PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax

381.40 60.08 0.00 321.32 -2.92 318.40 68.08 250.32 788.73 0.00 66.58 11.06

272.31 41.76 0.00 230.55 -10.92 219.63 60.68 158.96 772.88 0.00 44.39 7.54

Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

443.89 56.39 150.00 163.19

443.89 35.81 100.00 124.18

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ADDITIONAL INFORMATION:

Opening balance of inventory for year 2008-09 is 1021.09 Opening balance of share holder equity for year 2008-09 is 436.17 opening balance of debtors for year 2008-09 is 96.45 opening balance of Total assets for year 2008-09 is 694 High and low share prices on 31st march 2009 74.75 and 71.10 High and low share prices on 31st march 2010 181.75 and 176.75

PROFITIBILTY RATIO
Profit Margin Ratio

Profit margin shows how much of each sales rupee shows up as net income after all the expenses paid. Profit Margin Ratio = (Profit After Tax/ Sales) * 100

HMT ltd. Profit margin (2008-2009) = (-70.79/162.52)*100 = -43.55% Profit margin (2009-2010) = (-52.91/193.46)*100 = -27.34%

Here HMT Ltd is suffering loss, as the loss margin has decreased from -43.55% in 2009 to -27.34% in 2010 because sales has increase more in comparison to increases in expenses and as profit maximization is equal to loss minimization , it is good sign for the company.

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Titan industries Profit margin (2008-2009) = (158.96/3881.75)*100 = 4.09% Profit margin (2009-2010) = (250.32/4794.70)*100 = 5.22% Titan industries profit margin has increased from 4.09 to 5.22% because in our view sales has increased more in comparison of expenses . COMPARISON: For year 2008-2009:- HMT Ltd.is suffering loss with loss margin of -43.55 % as Titan Industries has profit margin of 4.09 %.It clearly indicates Titan Industry is better. For year 2010-2011 :- HMT Ltd.is suffering loss and as Titan Industry has profit margin of 5.22%,it clearly indicates Titan is better.

2 ASSETS TURNOVER: The assets turnover ratio measures the ability of a company to use its assets to generate sales. It can be calculated in the following manner: ASSETS TURNOVER = Sales/Average Total Assets Average Total Assets = [Opening Assets+ Closing Assets] / 2

HMT Ltd.
Asset turnover ratio (2008-2009) = [164.44/ {(341.93 +1323.27)/2}]*100 =0.1219times Asset turnover ratio (2009-2010) = [193.46/ {(1318.15 +1323.27)/2}]*100 =0.15times

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The assets turnover has increased from 0.12 times in 2009 to 0.15 times in 2010 mainly because of inventory management has improved as we can see with closing figures of inventories of both the years.

Titan industries
Asset turnover ratio (2008-2009) = [3881.75/ {(694.05 +726.64)/2}] = 5.4times Asset turnover ratio (2010-2011) = [4794.70/ {(726.04+797.18)/2}] = 6.30times Assets turnover has improved as in 2009, assets turnover ratio was 5.46 times as in 2010 it was 6.30.It indicates company is managing its assets efficiently.

COMPARISON:
For year 2008-2009:-as HMT Ltd is suffering loss, and by the figures of assets turnover ratio we can say that Titan Industries is performing better.

For year 2009-2010:- Also in this year HMT Ltd. is suffering huge loss and Titan Industries assets turnover ratio has improved, it clearly shows that titan industries is better.

3) Return on Assets :It measures the profitability from a given level of investment.

Return on Assets= [Profit after Tax / Average Total Assets] * 100

Average Total Assets= (Opening Assets+ Closing Assets) / 2

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HMT Ltd.
Return on Assets (2008-2009) = [-70.79/ {(1341.93 + 1323.27)/2}]*100 = -5.31% Return on Assets (2009-2010) = [-52.91/ {(1318.15 +1323.27)/2}]*100 = -4.006% In HMT Ltd, return on assets has increased from -5.31%to -4%. This shows overall loss of HMT ltd has drecresed.

Titan industries
Return on Assets (2008-2009) = [158.96/ {(694.05 + 726.64)/2}]*100 = 22.38% Return on Assets (2010-2011) = [250.32/ {(726.64+797.18)/2}]*100 = 32.85% In titan industries return on assets has increased from 22.38% to 32.85 this shows that overall profitability of Titan industries is increased.

COMPARISON:
For year 2008-2009:- HMT Ltd has return on assets of 5.31% and that of Titan industries it is 5.46% which menace Titan industries is more profitable. For year 2009-2010:- HMT Ltd has return on assets of 4.006% and that of Titan industries it is 6.30% which menace Titan industries is more profitable.

4) Return on Equity:The Return on Equity or return on net worth allows investors to see how effective the money invested is being used. Return on Equity= [Profit after Tax / Avg. Shareholders Equity]* 100
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Avg. Shareholders Equity= [Opening+ closing Shareholder Equity] / 2 Share holder equity = Share capital + Preferential share capital+ Reserve & Surplus

HMT Ltd.
Return on Equity (2008-2009) = [-70.79/ {(307.15 + 377.90)/2}]*100 = -20.66% Return on Equity (2009-2010) = [-52.91/ {(254.24 + 307.15)/2}]*100 = -18.84% As HMT Ltd is suffering loss Return on equity is in negative but Return on equity has shown some improvement from -20.66% in 2009 to -18.84% in 2010.This is the good sign for the company.

Titan industries
Return on Equity (2008-2009) = [158.96/ {(436.17 + 151.24)/2}]*100 = 32.20%

Return on Equity (2009-2010) = [250.32/ {(551.24 + 724.38)/2}]*100 = 39.25% Titan industries has shown improvement in return on equity of 7.05% it is good sign for the company.

COMPARISON:
For year 2008-2009:- As HMT Ltd. return on equity is negative and Titan industries has return on equity of 32.20%, which means Titan industries has good profitability from shareholders view.
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For year 2009-2010:-As HMT Ltd has ROE of -18.84% which is slightly good than previous year but still HMT Ltd is less profitable than Titan industries which has ROE of 32.85%.

5) Earning Per Share:Earning per share shows income earned per share by the share holders. Earning per Share = [Profit after tax / Number of Equity shares]

HMT LTD.
Earning per share (2008-2009) = -70.99*10000000/7603.5*100000 = Rs -0.93 per share Earning per share (2009-2010) = -52.91*10000000/7603.50*100000 = Rs -0.70 per share Earning per share of HMT has improvement from -0.93 to -0.77. This gives ray of hope to share holder that company may turn out to be profitable.

Titan Industries
Earning per share (2008-2009) = 158.96*10000000/443.89*100000 = Rs. 35.81 per share Earning per share (2009-2010) = 250.32*10000000/443.89* 100000 = Rs 56.39 per share EPS has improved from 35.8% to 56.39% which means profitability has improved i.e. earning of share holder has increased.

COMPARISON:
For year 2008-2009:-EPS of HMT ltd. is negative that is o -0.93 whereas Titan industries has EPS of 35.81 which clearly means Titan Industries is better from investors point of view.

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For year 2009-2010:-EPS of HMT ltd. is of -0.70 whereas Titan industries has EPS of 56.39 which clearly means Titan Industries is better from investors point of view.

LIQUIDITY RATIOS

1) Current Ratio:The current ratio is used to evaluate the firms ability to pay its short term debts obligations. Current Ratio = Current Assets / Current Liabilities Current Assets = Inventories + sundry debtors + cash + Loan & Advances Current Liability = Current Liabilities + Provision

HMT ltd:
Current Ratio (2008-2009) = 724.99/214.37 = 3.38:1 Current Ratio (2009-2010) = 700.73/194.46 =3.60:1 In 2009 current ratio was 3.38:1 which moved to 3.60 :1 which shows that company is moving towards ideal ratio of 2:1.It also shows that company has sufficient current assets to pay its debts in short term.

Titan Industries:
Current Ratio (2008-2009) = 1492.42/1067.44 = 1.40:1 Current Ratio (2009-2010) = 1821.65/1307.02 =1.39:1 As current ratio of Titan Industries is less than 2:1 which is ideal position, it means that Titan Industries may default in payment of its short term debts.
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COMPARISON:
For the year 2009-2010:- In this year HMT Ltd has current ratio more than Titan Industries, but Titan Industries has current ratio of 1.40:1 which in our opinion is dangerous for the company. As higher current ratio is better than lower i.e. lower than 2:1, so HMT Ltd is better. For the year 2010-2011:- In this year HMT Ltd has current ratio more than Titan Industries, but Titan Industries has current ratio of 1.39:1 which in our opinion is dangerous for the company. As higher current ratio is better than lower than 2:1, So HMT Ltd is better.

2) Quick Ratio:It is a measurement of how well a business can meet its short term financial obligation without selling any inventory.

Quick Ratio = Quick Assets / Current Liabilities Quick Assets = Current Assets - Inventories

HMT Ltd.
Quick Ratio (2008-2009) = (700.73-40.38)/194.46 =3.40:1 Quick Ratio (2009-2010) = (724.99 29)/214.37 = 3.25:1 In both the years quick ratio is higher than ideal level of 1:1.It means company does not require to sell its inventory to generate cash.

Titan Industries
Quick Ratio (2008-2009) = (1492.42 1202.69)/1067.44 =0.27 Quick Ratio (2009-2010) = (1821.65 1340.33)/1307.02 = 0.37
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In both years quick ratio is lower than 1:1 which means company should consider liquidating some inventory to generate cash.

COMPARISON:
For the year 2008-2009 HMT Ltd. has quick ratio of 3.40 and Titan Industries has 0.27.In our view HMT Ltd. is better because Titan Industries will require to sell its inventories to generate cash which may take time. For year 2009-2010:- HMT Ltd. is better quick ratio in comparison to Titan Industries because quick ratio of Titan Industries is less than 1:1.

3) Debtor Turnover Ratio:It shows the number of times each year the debtor turns into cash. It indicates the quality of a firms debtors and collection efforts.

Debtor Turnover Ratio = Sales / Average Debtors Average Debtors = [Opening Debtors + Closing Debtors] / 2

HMT Ltd:Debtor Turnover Ratio (2008-2009) = [162.52/ {(104.02 + 74.44)/2}] = 1.82 Debtor Turnover Ratio (2009-2010) = [193.46/ {(68.64 + 74.44)/2}] = 2.70 Debtors turnover has increased from 1.82 in 2009 to 2.70 in 2010 which is good sign for the company because debtors are being converted rapidly in cash comparison to 2009.

Titan Industries:Debtor Turnover Ratio (2008-2009) = [3881.75/ {(96.45 + 106.22)/2}] = 38.31

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Debtor Turnover Ratio (2009-2010) = [4674.42/ {(93.61 + 106.22)/2}] = 46.78 DTR has increased from 38.31 to 46.78 which means debtors are being quickly converted in cash in comparison to 2009 which reflects good portfolio of debtor.

COMPARISON:As DTR of Titan Industries is very high than HMT Ltd. which clearly indicates that Titan Industries has quality debtors and debt collection mechanism is good than HMT Ltd.

4) Average debt collection period:It is basically measures the time taken for collection of debt.

Average Debt Collection Period = 360 days / Debtors Turnover

HMT Ltd.
Average debt collection period (2008-2009) = 360/1.82 = 197.80 days Average debt collection period (2009-2010) = 360/2.70 = 133.33 days

Average Debt Collection period has decreased from 197.80 to 133.33.In 20092010 recovery of debt from debtors are taking less days as compared to previous years but still this period is quite high which is not good for the company.

Titan Industries

Average debt collection period (2008-2009) = 360/38.31 = 9.40 days

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Average debt collection period (2009-2010) = 360/46.78 = 7.70 days Average debt collection period has decreased from 9.40 days to 7.70 days. It shows limited blockage of funds with debtors which decreases chance of bad debt and also indicates the efficiency of good management. In this year recovery of debt from debtors are taking less days as compare to previous year.

COMPARISON:For the year 2008-2009:- Average debt collection period of both companies clearly shows that titan industries is better as it has average collection period of 9.40 in comparison to 197.80 of HMT Ltd. Titan industries Debtors are being quickly converted into cash. For the year 2009-2010:-. In this year HMT Ltd collects debt from its debtors in 133.33 days where as Titan industry collects debts from its debtors in 7.70 days. It is clearly being concluded that the amount from debtors of Titan Industry has being quickly collected as compared to HMT ltd.

5) Inventory Turnover Ratio:It measures the number of times a companys inventory is turned into sales.

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventories

Average Inventory = [Opening Inventory + Closing Inventory] / 2

HMT Ltd.
Inventory Turnover Ratio (2008-2009) = [208.4/ {(552.40 + 40.38)/2}] = 4.49 times
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Inventory Turnover Ratio (2009-2010) = [212.6/ {(29 + 40.38)/2}] = 6.13 times It has increased from 4.49 times in 2008-2009 to 6.13 times in 2009 it shows that stock has been efficiently used and also that stock is selling quickly in comparison to previous year.

Titan Industries
Inventory Turnover Ratio (2008-2009) = [3627.63/ {(1021.09 + 1202.69/2}] = 3.26 times Inventory Turnover Ratio (2009-2010) = [4318.96/ {(1340.33 +1202.69)/2}] = 3.40 times There is marginal increase of 0.14 from 2009-2010 it shows bit improvement in inventory management but still inventory turnover is quite low which is not good.

COMPARISON:
For the year 2008-2009:- Here HMT Ltd. Has inventory turnover of 4.49 and where as Titan Industries has inventory turnover of 3.26 it shows HMT Ltd. has slightly better Inventory management. For the year 2009-2010:- In this year HMT Ltd. had inventory turnover ratio of 6.13 times and where as Titan Industries had inventory turnover ratio is 3.40 times. It is clearly being concluded that the HMT Ltd. indicates efficient inventory management and fast moving inventory as compared to Titan Industries.

6) Average Inventory Holding Period:It means the period or average no. of days the company is holding the inventory.
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Average inventory holding period = 360 days / Inventory Turnover Ratio

HMT Ltd:Average Inventory Holding period (2008-2009) = 360/4.49 =80.17 days

Average Inventory Holding period (2009-2010) = 360/6.13 = 58.13 days Average Inventory Holding Period has gone down from 80.17 days to 58.13 days which is good for HMT Ltd. as the money blocked in Inventories will get converted into sales in fewer days this year as compare to previous year.

Titan Industries:-

Average Inventory Holding period (2008-2009) = 360/3.26 = 110.42 days

Average Inventory Holding period (2009-2010) = 360/3.42 = 105.88days

Average Inventory Holding Period has gone down from 110.42 days to 105.88 days which is good for Titan industries as the money blocked in Inventories will get converted into sales in fewer days this year as compare to previous year.

COMPARISON:
For the year 2008-2009:- In this year HMT Ltd. had Average Inventory Holding Period is 80.17 days and where as Titan industries had Average Inventory Holding Period is 110.42 days. It is clearly being concluded that the HMT Ltd. indicates efficient inventory management as compared to Titan industries. For the year 2009-2010:- In this year HMT Ltd. had Average Inventory Holding Period is 58.13 days and where as Titan Industries had Average Inventory
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Holding Period is 105.88 days. It is clearly again being concluded that the HMT Ltd. indicates efficient inventory management as compared to Titan Industries.

7)OPERATING CYCLE PERIOD:It is the time taken to turn inventory into debtors via credit sales PLUS time taken to turn debtors into cash.

HMT Ltd:-

Average Inventory holding period Average Debt Collection period Operating Cycle

2008-2009 80.17 days 197.80 days 277.97 days

2009-2010 58.13 days 133.33 days 191.46 days

It is clearly been seen from the above table that operating cycle has improved from the previous year.

Titan Industries:-

Average Inventory holding period Average Debt Collection period Operating Cycle

2008-2009 110.42 days 9.40 days 119.82 days

2009-2010 105.85 days 7.70 days 113.85 days

It is clearly been seen from the above table that operating cycle has improved from the previous year.

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COMPARISON:
For the year 2008-2009:-As operating cycle period of HMT Ltd. is 277.97 days and whereas of Titan industries is 119.82 days, so we can easily conclude that Titan industries is having better position in operating cycle period as compared to HMT Ltd. For the year 2009-2010:-As operating cycle period of HMT Ltd. is 191.46 days and whereas of Titan industries is 113.85 days, so we can again conclude that Titan industries is having better position in operating cycle period as compared to HMT Ltd.

SOLVENCY RATIOS
It gives a picture of a companys ability to generate cash flow and pay it financial obligations. It includes Debt Equity Ratio, Liability to Equity Ratio and Interest coverage ratio.

1) Debt Equity Ratio:It measure the relationship of the capital provided by the creditors to the amount provided by the shareholders .

Debt Equity Ratio = Debt / Equity Debt = Secured loans + Unsecured loans Equity = Share capital + Reserve & Surplus

HMT Ltd
Debt Equity Ratio (2008-2009) = [573.10/(760.35+(-453.20))] = 1.86 Debt Equity Ratio (2009-2010) = [620.91/(760.35+(-506.11))] = 2.44 Debt-Equity ratio in 2008-2009 is 1.86 and where as in 2009-2010 is 2.44 which is clearly showing that it is low in present year, which indicates company is increasing its degree of financial leverage and company is taking more risk than to previous year.
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Titan Industries:Debt Equity Ratio (2008-2009) = [175.41 /(44.39+506.89)] = 0.32 Debt Equity Ratio (2009-2010) = [72.79/ (44.39+679.99)] = 0.10 Debt-Equity ratio in 2008-2009 is 0.32 and where as in 2009-2010 is 0.10 which is clearly showing that it is low in present year, which indicates there is a small degree of leverage and the company is too conservative and it is less risky for creditors.

COMPARISON:For the year 2008-2009:-Debt-Equity Ratio of HMT Ltd. is 1.86 and whereas of Titan Industries is 0.32. So we can easily conclude that HMT Ltd. has higher leverage and risky for creditors. For the year 2009-2010:-Debt-Equity Ratio of HMT Ltd. is 2.44 and that of titan industries is 0.10 and we can clearly conclude that titan industry is less risky and more conservative using less leverage than HMT Ltd.

2) Liability to Equity Ratio:A variant of the Debt-Equity Ratio is the liabilities to equity Ratio. Here, the numerator has not only debt but also current liabilities and deferred tax liability in order to get the firms total liabilities.

Liability to Equity Ratio = All Liabilities / Shareholders Equity

All Liabilities = Total Liabilities - Shareholders Equity All liabilities = Secured loans + Unsecured Loans + Current liability & Provisions Share holder equity = Share capital + Preferential share Surplus capital+ Reserve &

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HMT Ltd.
Liability to Equity ratio (2008-2009) = All liabilities= total liabilities- share holders equity =(1590-{760.35-382.41})=1212.7 Liability to Equity ratio= (1212.7 / 377.94) = 3.21

Liability to Equity ratio (2009-2010) = All liabilities= total liabilities- share holders equity= (1087.52-{160.35-506.11})= 833.28 Liability to Equity ratio= (833.28/254.24) =3.28

Liability-Equity Ratio in 2008-2009 is 3.21 and it has increased to 3.28 in 20092010. It shows that liabilities has increased and shareholders equity had also increased but at low rate

Titan Industries:Liability to Equity ratio (2008-2009) = All liabilities= total liabilities- share holders equity= (1794.09 551.24)=1242.85 Liability to Equity ratio = (1242.85 / 551.24) = 2.25 Liability to Equity ratio (2009-2010) = All liabilities= total liabilities- share holders equity =(2104.19-724.38)=1379.81
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Liability to Equity ratio = (1379.81 / 724.38) = 1.90

Liability-Equity Ratio in 2008-2009 is 2.25and it has decreased to 1.90 in 20092010. It shows that shareholder equity has increased but all liabilities had decreased at high rate.

COMPARISON:For the year 2008-2009:-Liability-Equity Ratio of HMT Ltd. is 3.21 and whereas of Titan is 2.25, which means HMT Ltd. has more liability than Titan industries. For the year 2009-2010:-Liability-Equity Ratio of HMT Ltd. is 3.28 and whereas of Titan industries is 1.90, which means that Titan industries has less liability as compare to HMT Ltd. Interest Coverage Ratios Measures the protection available to the creditors for payment of interest charges by the company. This shows whether the company has sufficient income to cover its interest payments Interest coverage ratio =PBIT/Interest Expense PBIT=PBDIT-Dep.

HMT Ltd:Interest coverage ratio(2008-2009) = (-4.28-3.20)/63.68 = -0.12 Interest coverage ratio(2009-2010) = (19.99-3.92)/68.61=0.23 As Interest coverage ratio has improved from -0.12 to 0.23,it shows that company has sufficient income for the payment of interest in comparison to previous year.

Titan industries:Interest coverage ratio(2008-2009)= (340.77-41.76)/68.46=4.37

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Interest coverage ratio(2009-2010)= (444.92-60.08)/63.52=6.06 As Interest coverage ratio has improved from 4.37 to 6.06,it shows that company has sufficient income for the payment of interest in comparison to previous year.

COMPARISON
For 2008-2009:- As HMT Ltd.has interest coverage ratio of -0.12 and that of Titan Industries it is 4.37. Which clearly shows that Titan Industries has more safety for the payment of interest. 2009-2010:- As HMT Ltd.has interest coverage ratio of 0.23 and that of Titan Industries it is 6.06. Which clearly shows that Titan Industries has more safety for the payment of interest.

Capital Market Ratios

Capital Market ratio evaluate the economic status of the company in the wider market place.

1) Price Earning Ratio:It is considered as an indicator of a firms growth prospects.

Price Earning Ratio = Average stock price per Share / Earning per Share

HMT Ltd:Price Earning ratio (2008-2009) = Average Stock Price= (72.10+69)/2=70.55 Price Earning ratio = 70.55 / -0.93 = -75.86 times

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Price Earning ratio (2009-2010) = Average Stock Price= (70.75+68.65)/2= 69.7 Price Earning ratio = 69.7/-0.70= -99.57times

In 2008 -2009 HMT Ltd has profit earning ratio of -75.86 in 2009-2010 it is -99.52 which shows stock market has almost no faith that company will recovered from loss in future.

Titan Industries:Price Earning ratio (2008-2009) = Average Sock Price=(74.75+70.76)/2=72.76

Price Earning ratio= 72.76/ 35.81= 2.03 times

Price Earning ratio (2009-2010) = Average stock price=(181.75+176.75)/2=179.25 Price earning ratio=179.25/56.39 = 3.18 times

In 2008-2009 Titan industries has profit earning ratio of 2.03 and in 2009-2010 it is 3.18. It shows stock market is showing some confident in companies future earning.

COMPARISON:For the year 2008-2009:- In 2008-2009 HMT Ltd. Has profit earning ratio of -75.86 and Titan industries has that of 2.03 which clearly indicates that stock market is more confident about titan industries.
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For the year 2009-2010:- Price Earning ratio of HMT Ltd. is -99.57 whereas of Titan industries is 3.18. We can easily conclude that Titan industries is having a bright future earning growth.

2) Dividend Yield Ratio:It represents the current cash return to shareholders. Dividend Yield Ratio = Dividend per Share / Average stock Price per Share HMT Ltd:Dividend Yield Ratio (2008-2009) = 0 /69.15 =0 Dividend Yield Ratio (2010-2011) = 0/ 69.10 =0 In both the year dividend yield is 0 as no dividend by the company which means shareholders are not getting any return of their investment.

Titan industries:Dividend Yield Ratio (2008-2009) = 10/72.76 = 0.14 Dividend Yield Ratio (2009-2010) = 15/ 179.25 = 0.08

Dividend yield has declined from 0.14 in2008-209 to 0.08in 2009-2010 which shows declining cash return to shareholders.

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COMPARISON:For the year 2008-2009:- As HMT Ltd. has 0 dividend yield and Titan industries has dividend yield of 0.19 therefore, Titan industries is better than HMT ltd.

For the year 2009-2010:- Dividend Yield ratio of HMT Ltd. is 0 whereas of Titan Industries is 0.08. So we can easily conclude that Titan industries is having high Dividend Yield ratio which indicates that the cash return on the shares went up.

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