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GAJRAULA
DECLARATION/CERTIFICATE
I MAYUR KUMAR GOEL hereby declare that the work which is being presented in this report entitled A STUDY ON RATIO ANALYSIS OF TEVA API INDIA LTD. GAJRAULA is an authentic record of my own work carried out under the supervision of Dr. SHOBHIKA TYAGI.
The matter embodied in this report has not been submitted by me for the award of any other degree.
Dated:
This is to certify that the above statement made by the candidate are correct to the best of my knowledge.
Name of the Supervisor Dr. Shobhika Tyagi Asst. Prof. MBA Date:
ACKNOWLEDGEMENT
When I embarked this project, it appeared to me an onerous work. Slowly as I progressed, I did realize that I was not alone after all!! There were friends and well wishers, who with their magnanimous and generous help and support made it a relative easier affair.
I wish to express my gratitude to all that concerned persons who have extended their kind help, guidance and suggestions without which it could not have been possible for me to complete this project report.
I am deeply indebted to my guide Dr. shobhika tyagi, (Faculty of MBA), ABES ENGINEERING COLLEGE Ghaziabad, for not only his valuable and enlightened guidance but also for the freedom he rendered to me during this project work. My heart goes out to my parents who bear with all types of troubles I caused them with smile during the entire study period and beyond.
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6 9 12 13
PART II Chapter II
1. ResearchMethodology 2. Limitation
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15 16
Chapter III
1. Descriptive study of ratio analysis
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19
Chapter IV Chapter V
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Chapter VI
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1. Bibliography
Chapter VII
1. Appendices Balance sheet
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68 69
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PART 1 Chapter I
INTRODUCTION
TAPI is a division of Teva Pharmaceutical Industries Ltd., the global generic pharmaceutical leader and one of the worlds top 15 pharmaceutical companies.
Gajraula Site is located in Northern India. This manufacturing plant was acquired by TAPI in 2003. The plant specializes in the production of intermediates for the various APIs manufactured by the division and APIs for the US market and other regulated markets. Gajraula Site is a fast growing plant in terms of production and R&D. History of Strategic Acquisitions
TAPI is a unit of Teva Pharmaceutical Industries, the worlds largest generic drug manufacturer and one of the 15 largest pharmaceutical companies worldwide. The rich history of the TAPI Division dates back to 1935 with the founding of Assia, a company that specialized in the production of veterinary and pharmaceutical ingredients. TAPI has grown by acquiring and establishing top-rated manufacturing and development facilities around the world. The already high-quality standards of each acquired plant are fully synchronized with TAPI best practices through a comprehensive integration program. At the heart of TAPI lies the Israel-based Teva-Tech plant, a state-of the-art facility established in 1995 with numerous dedicated high-volume production areas. TAPI today operates 21 production plants and 7 research and development centers across the globe. Each facility contributes to our accumulated knowledge and ongoing excellence in R&D, production and customer service for the benefit of our demanding customer base. Major Growth Milestones
2011: acquisition of Theramex (Monaco) B 2008: acquisition of Archimica (Puerto Rico) acquisition of Bentley (Spain) acquisition of Barr-Pliva (Croatia)
2006: establishment of TAPI China 2005: acquisition of Ivax API (Czech Republic, Puerto Rico) 2004: acquisition of Sicor API (Italy, Mexico, Switzerland) 2003: establishment of TAPI India 7
2002: acquisition of PFC (Italy) 1996: acquisition of Biocraft (US) 1995: establishment of Teva-Tech (Israel) 1991: acquisition of Prosintex (Italy)
1988: acquisition of Abic (Israel) 1980: acquisition of Plantex (Israel) TAPI is a division of Teva Pharmaceutical Industries Ltd., the global generic pharmaceutical leader and one of the worlds top 15 pharmaceutical companies.
Encouraging our people to show initiative and cultivate bold ideas Challenging the status quo Creating open channels of communication and limiting bureaucracy Promoting cooperation and teamwork across functions and organizational lines Spurring innovation and creative thinking
Creating a challenging and stimulating work environment Working as a team with mutual respect and trust Sharing knowledge among our peers and colleagues Respecting local customs while uniting around a global corporate culture 8
question, funnily enough! The answer to that question then means we need to make a list of all of the ratios we might use: we will list them and give the formula for each of them. Once we have discovered all of the ratios that we can use we need to know how to use them, who might use them and what for and how will it help them to answer the question we asked at the beginning? At this stage we will have an overall picture of what ratio analysis is, who uses it and the ratios they need to be able to use it. All that's left to do then is to use the ratios; and we will do that step- by-step, one by one. What do we want ratio analysis to tell us? The key question in ratio analysis isn't only to get the right answer: for example, to be able to say that a business's profit is 10% of turnover. We have to start working on ratio analysis with the following question in our heads: What are we trying to find out? Isn't this just blether, won't the exam just ask me to tell them that profit is 10% of turnover? Well, yes, but then they want to know that you are a good student who understands what it means to say that profit is 10% of turnover. We can use ratio analysis to try to tell us whether the business 1. 2. is profitable has enough money to pay its bills
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3. 4. 5. 6. 7.
could be paying its employees higher wages is paying its share of tax is using its assets efficiently has a gearing problem is a candidate for being bought by another company or investor
What do the Users of Accounts Need to Know? The users of accounts that we have listed will want to know the sorts of things we can see in the table below: this is not necessarily everything they will ever need to know, but it is a starting point for us to think about the different needs and questions of different users.
Investors
To help them determine whether they should buy shares in the business, hold on to the shares they already own or sell the shares they already own. They also want to assess the ability of the business to pay dividends.
Lenders Managers
To determine whether their loans and interest will be paid when due Might need segmental and total information to see how they fit into the overall picture
Employees
Information about the stability and profitability of their employers to assess the ability of the business to provide remuneration, retirement benefits and employment opportunities
Suppliers and other Businesses supplying goods and materials to other businesses will read trade creditors their accounts to see that they don't have problems: after all, any supplier wants to know if his customers are going to pay their bills! Customers The continuance of a business, especially when they have a long term
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involvement with, or are dependent on, the business Governments and their agencies The allocation of resources and, therefore, the activities of business. To regulate the activities of business, determine taxation policies and as the basis for national income and similar statistics
Local community
Financial statements may assist the public by providing information about the trends and recent developments in the prosperity of the business and the range of its activities as they affect their area
Financial analysts
They need to know, for example, the accounting concepts employed for inventories, depreciation, bad debts and so on
Many organizations now publish reports specifically aimed at informing us about how they are working to keep their environment clean. Researchers' demands cover a very wide range of lines of enquiry ranging from detailed statistical analysis of the income statement and balance sheet data extending over many years to the qualitative analysis of the wording of the statements
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Ratios to watch Return on Capital Employed Gearing ratios Profitability ratios Return on Capital Employed
Suppliers and other trade creditors Liquidity Customers Governments and their agencies Local Community Financial analysts Environmental groups Researchers Profitability Profitability This could be a long and interesting list Possibly all ratios Expenditure on anti-pollution measures Depends on the nature of their study
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Objective of Study
To study the financial position of company. To know the relationship between items of Balance sheet and Profit and Loss Account. To know the trend of company from last three years in terms of ratio. To Measure the profitability of organization To Judge the operational efficiency of the organization To Comparative analysis of the firm
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PART II Chapter II
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RESEARCH METHODOLOZY
Types of Research:
Research which is being done in this report is of DESCRIPTIVE type in which Researcher has no control on present things that have being studied.
Span of study :
3 years: 2010, 2011, 2012,
Analytical tool:
Ratio Analysis
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Limitations
1) Time constraint :This project report is prepared within 40 is not sufficient for detail study which is the requirement of this topic.
2) Non Availability of Primary Data:This project report is based on Secondary Data. No Primary data is being used in this report. This data is collected by someone else so nothing can be said about its reliability. 3) Reliability:every ratio has it's variations, some people exclude things that others include. Use what you feel comfortable with, but be sure to have consistency when comparing against other companies. 4) Lack of Resources:Resources which available for doing the research are not sufficient. 5) Ignoring qualitative factors :Ratio analysis is a quantitative measurement of the performance of business. It ignores the qualitative aspect of the firm.
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Chapter III
Descriptive study of ratio analysis
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INTERPRETATION OF RATIOS
(1) Interpretation of individual Ratio: An individual may have its own significance. For example if the current ratio is 2:1, it can be interpreted that current assets are twice the current liabilities.
(2) Interpretation by referring to a group of Ratios: Sometimes, it is difficult to understand an individual ratio. In such circumstances, to conduct meaningful analysis, other related ratios should be calculated. For example, to study the liquidity position, besides the current ratio, debtors turnover ratio and stock turnover ratio should also be calculated.
(3) Interpretation of Ratios by trend : Under this method, a ratio or group of ratios for different periods should be calculated so that their trend can be studied. On the basis of increasing, decreasing or static trend, important conclusions can be drawn. Sometimes, average ratio for the various years is found out.
(4) Interpretation by inter-firm comparison: Under this method, the ratios of one firm are compared with those other firms.
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Type of Ratios :Ratios are used for the achievement of special objectives. The different parties interested in the business use only those ratios which help them in evaluating their interests. Short term creditors want to know whether the business has the capacity to pay their debts or not. Long term creditors and financial institutions are interested both in the long term solvency and profitability so that their loans and interests can be paid. Similarly management is interested to know whether the interests of all parties are safe and different assets are being used effectively or not. According to purpose, the ratios can be of following types:
Liquidity Ratios Profitability Ratios Turnover or Activity Ratios Leverage or Capital Structure Ratios.
These Liquidity, Leverage, Profitability, and Turnover Ratios allow the business owner to identify trends in a business and to compare its progress with the performance of others through data published by various sources. The owner may thus determine the business's relative strengths and weaknesses.
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Chapter IV
Data analysis & interpretation
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LIQUIDITY RATIOS:
Liquidity means ability of the firm to pay its short term debts in time. Liquidity ratios are calculated to measure the short term financial position or short term solvency of the firm. Commercial banks and short term creditors are interested in such type of analysis. Management can also make use of
these ratios to find out how efficiently the working capital is being used. To understand liquidity position
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Current Ratio
With its help, the ability of the business to pay its short term liabilities is determined. It is also called working capital Ratio. It is calculated as
2010
2011
90,90,925
16,88,985 5,37,986
2,10,34,789
12,14,632 23,99,106 2,34,790
4,29,48,221
25,68,086 33,58,147 5,09,377
22,26,971 4.08
38,48,528 5.46
64,35,610 6.67
Remarks: Standard ratio is 2:1 So, Current ratio is very good. In 2005 it is 6.67 because of high cash and bank balances which is 40% of Current Assets.
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With the help of this ratio, the capacity of the firm to pay its current liabilities immediately is measured. This ratio is calculated as
Liquidity Ratio = Liquid Assets Current Liabilities = Current Assets-Inventory Current liabilities Current Assets Current liability Liquidity Ratio 2009 90,90,925 22,26,971 4.08 2010 2,10,34,789 38,48,528 5.46 2011 4,29,48,221 64,35,610 6.67
Remarks: Standard ratio is 1:1 .There is no difference in Liquid Assets and Current Assets because of absence of inventory.
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This ratio is also called super acid test or super quick ratio. Super liquid assets means cash and marketable securities. This ratio is calculated as
2010
10,283 43,51,622
2011
19,481 1,75,51,739
1.47
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Remarks: Standard Ratio is 0.5:1. So, Absolute Liquidity Ratio is also very high because of high Cash and Bank balances. It means TEVA have cash and bank balance of Rs.1,75,71,220 to meet current liability of Rs. 64,35,610.
Table 1
LIQUIDITY RATIOS
2009 Current Ratio Liquidity Ratio Absolute liquidity Ratio 4.08 4.08 1.47 2010 5.46 5.46 1.13 2011 6.67 6.67 2.73
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LIQUIDITY RATIOS:
Current Assets should be at least two times of current liabilities. Here in 2009, 2010 & 2011 current ratio is 4.08,5.46 & 6.67 respectively. It shows that liquidity position is very good of company. In 2011 current ratio has been increased 22% because of increase in Current Assets is 104% and increase in current liabilities is 67%. Increase in Current Assets is due to increase in cash and bank balances which is 300%.Here both current Ratio and liquidity Ratio are same because of absence of Inventory. Absolute liquidity Ratio is also very good because of increase in cash and bank balances. It was 1.47, 1.13 & 2.73 in 2009, 2010 & 2011 respectively. It is decreased in 2010 by23% but increase in 2011 by141.6%.
So, Liquidity position of company is very good which will be beneficial for efficient working of company.
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TURNOVER RATIOS:
The efficiency of a firm depends on the fact how efficiently its assets are being used in business. Turnover ratios are measures of efficient management of various assets. The efficient utilization of these assets depends on the speed at which these assets are converted in sales. Higher velocity of their conversion in sales indicates that assets are being efficiently managed. Thus, turnover ratios measures the rate of change of assets in sales. These ratios are also known as Activity Ratios or performance Ratios. Following ratios are calculated under it:
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Debtors or receivables are current assets of business. The debtors turnover ratio measures how quickly the debtors or receivables of business are realized. It also indicates how efficiently the debtors of business are being realized. It is an indicator of the liquidity of debtors. This ratio establishes relationship between credit sales and average debtors.
Avg Accounts = Opening (Debtors & B/R.)+closing (debtors &B/R) Receivables 2 2009 Revenue
Average Debtors 4,87,19,292 28,53,628
2010
8,57,39,628 71,56,162
2011
16,27,49,977 1,42,09,903
17.07
11.98
11.45
= = 21 days
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Remarks: Debtors Turnover Ratio is decreasing because increase in debtors is more than increase in Revenue. This is reason of increasing collection period.
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Working Capital Turnover Ratio :This ratio indicates whether the working capital has been efficiently used to increase sales. It indicates that whether the firm has sufficient short term investment for meeting its liabilities on time. Working capital Turnover Ratio = Revenue Net Working capital
2010
8,57,39,628 2,10,34,789 38,48,528
2011
1,62,74,99,77 4,29,48,221 64,35,610 3,65,12,611
68,63,953 7.10
1,71,86,261 5
4.46
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Remarks: Working Capital Turnover Ratio is decreasing but decreasing rate is less in 2005 than 2004.
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Fixed Assets Turnover Ratio :This ratio indicates how far the fixed assets of business have been utilized to increase sales
Fixed Assets Turnover Ratio = Revenue Fixed assets Fixed assets turnover ratio
2009 4,87,19,292
51,32,868
2011
16,27,49,977 1,40,17,627
9.49
13.46
11.61
Remarks: Fixed Assets Turnover Ratio represents the revenue which is earning on every rupee invested in fixed assets. In 2004 it is increased by 41.83% but in 2005 it is decreased by 16%.
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Table 2
TURNOVER RATIOS
2009 2010 2011
Debtor Turnover Ratio Average Accounts Receivable Working Capital Ratio Fixed Assets Ratio
11.98
11.45
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TURNOVER RATIOS:Debtors Turnover Ratio should be high. In 2009 it is 17.07 which decreased upto 11.98 in 2010 by 42 %. This is because of increase in debtors by 151 %. In 2005 it is decreased by 4.6 %. Debtors Turnover Ratio is decreasing thats why collection period is increasing. It was 21 days in 2003 but increased in 2010 upto 30 days and in 2005 upto 32 days. Working Capital Ratio is 7.10 in 2003 which is decreased in 2010 by 42% and in 2011 by 12%. Fixed Assets Ratio is 9.49 in 2009 which increased by 42% in 2010 because increase in revenue is more than increase in fixed assets. In 2010 it is 13.46 and in 2011 it is 11.61. It shows that in 2011 firm is earning 11.61 on every one rupee which is invested in fixed Assets.
So, it can be said that Turnover Ratios has been weakened in 2010 & 2011 in comparison to 2009.
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Solvency of business is related to its debt paying capacity. With the help of liquidity ratios, short term solvency of business can be analysed. Under this head, long term solvency of business has been analysed. Normally the ordinary shareholders, debenture holders, financial institutions and other long term creditors are interested in these ratios. With the help of these ratios, long term creditors can analyse the capacity of business to pay interest and principal. Long term solvency of business means the ability to pay the long term debts and interest thereon regularly. Therefore, the long term solvency of business means its ability to pay the long term debts and interest thereon regularly. Following Ratios are calculated under it
7) Debt Equity Ratio 8) Proprietary Ratio 9) Fixed Assets to Proprietors fund Ratio 10) Current Assets to Proprietors fund Ratio 11) Fixed Assets Ratio
The necessary funds for the assets of business are provided by ordinary shareholders, preferential shareholders and creditors. In any business, there should by equitable balance between owned capital and debt capital because it affects long term solvency of business. If a business procures more funds from the owners of business, it will secure the interests of creditors. Debt-Equity Ratio = External Equities Internal Equities
2009 External Equities Current liability Total Internal Equities Share capital Share application money Reserve & Surplus Dr. balance of P&L a/c Total Debt Equity Ratio 22,26,971 22,26,971 53,63,320 13,330 1,27,19,700 (84,93,555) 96,02,795 0.23
2,35,556,791 0 .16
5,05,30,238 0.13
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0.23
0 .16
0.13
Remarks: High Ratio represents that company is in risk. TEVA has Net Worth of Rs. 1 for meeting the liabilities of 0.13. So it represents good position of company.
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Proprietary Ratio
This ratio is another form of debt equity ratio. It is also known as Net Worth
to Total
Assets Ratio. This ratio establishes relationship between shareholders funds and total assets of business. Its main objective is to find out how much funds have been provided by shareholders for investment in assets of business.
2009 Shareholders fund Share capital Share Application money Reserves & Surplus Dr. balance of P&L A/c Total Total Assets Fixed Assets Current Assets Total 53,63,320 13,330 1,27,19,700 (84,93,555) 96,02,795 27,38,841 90,90,924 1,18,29,765 0.81
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Remarks: Higher the ratio, the more profitable it is for the creditors and the less management will have to depend on external debt. It is showing that in 2005, 89% of Total Assets is being invested by Shareholders.
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Fixed Assets to proprietors Funds Ratio :This ratio establishes relationship between fixed assets and proprietors funds. The main objective of this ratio is to find out what proportion of owners funds are invested in fixed assets.
Remarks: The standard ratio is 65%. It shows that 28% in 2003 and 27% in 2004 and 2005 is being invested by shareholders in fixed Assets.
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Current Assets to proprietors funds Ratio :This ratio establishes relationship between current assets and proprietors funds. The main objective of this ratio is to find out what proportion of proprietors funds has been invested in current assets.
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Remarks:
There is no rule of thumb regarding it. It is showing that 95% in 2003 and 85% in
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Fixed Assets to current Assets Ratio :With the help of this ratio, it is determined whether the investments in current assets are more or less as compared to fixed assets.
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Remarks: It shows that Fixed Assets are one third of Current Assets.
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Table 3
LEVERAGE RATIOS
2009 Debt Equity Ratio Proprietary Ratio Fixed Asset to current Asset Ratio Fixed Assets to proprietors fund Ratio Current Assets to proprietors fund Ratio 0.23 0.81 0.30 0.28 0.95 2010 0.16 0.86 0.30 0.27 0.89 2011 0.13 0.89 0.33 0.27 0.85
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LEVERAGE RATIOS:
Debt Equity Ratio is 0.23, 0.16 & 0.13 in 2009, 2010 &2011 respectively. It shows that debt burden is very less which represents the security of creditors. Proprietary Ratio is 0.81 in 2009. In 2010,2011 it is 0.86 &0.89 respectively which is more than standard ratio i.e. 67 %.Fixed Assets to Current Assets Ratio says that fixed Assets are one third of Current Assets. Fixed Assets to proprietors fund is 0.28, 0.27 & 0.27 in 2003, 2004 & 2005 respectively. There is no rule of thumb for it. Actually it depends upon the nature of business. Current Assets to proprietors fund is 0.95, 0.89 & 0.89. It shows that most part of shareholders fund is sunk in current Assets.
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Profitability is a measure of efficiency and control. Earning of more and more profit with the optimum use of available resources of business is called profitability. All parties are interested in profitability of business. The owners of the business or shareholders invest their money in the expectation of earning reasonable return on their investment. Profits also help to pay interest and provide funds to discharge debts. Necessary funds for the expansion and growth of business can be managed out of profits. Profitability is the basis of liquidity and solvency of business. Following Ratios are included under it 13) Net Profit Ratio 14) Operating Ratio 15) Return on Total shareholders fund 16) Return on Equity shareholders fund 17) Dividend per share 18) Earnings per share 19) Dividend Payout Ratio
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Net Profit Ratio :Net profit is used to measure the overall profitability of business. Net profit is considered an indicator of success of management to operate the margin business
successfully. Net Profit Ratio = Net Profit Revenue 2009 84,20,545 4,87,19,292 0.17 2010 1,39,67,326 8,57,39,628 0.163 2011 2,69,73,447 16,27,49,997 0.16
Remarks: The greater the ratio, the more profitable the business will be. In 2004 it is decreased by only 5%.
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Operating Ratio :-
Remarks: Operating Ratio is near 80% in all three years. It is due of high employees costs. 52
Return on Total Shareholders funds :With the help of this ratio it can be ascertained how effectively the funds of the shareholders are being utilized. Shareholders funds are also known as Net Worth.
Return on Total Shareholders Equity= Net profit after tax Total shareholders Equity
2009
Net profit before tax Less: current tax Add: Reversal of deferred tax Net profit after tax Shareholders funds: 88,22,799 (4,02,254)
2010
1,46,25,684 ( 5,98,440) 59918 1,39,67,326 2,35,56,791
2011
27155281 (2,41,752) 59918 2,69,73,447 5,05,30,238
84,20,545 96,02,795
Ratio =
0.88
0.59
0.53
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Remarks: TEVA earns 88% in 2003 on capital invested by total shareholders. In 2004 it is being decreased by 33% and in 2005 it is being decreased by 10%.
Equity shareholders are the actual owners of the business because they bear all risks. They participate in management.
Return on Equity Shareholders fund = Net profit after tax and preference dividend Equity shareholders funds
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Remarks: Return on Total shareholders fund and Return on Equity Shareholders fund are same because there is only Equity Shares.
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This ratio measures the earnings per share available to ordinary shareholders.
EPS= Net profit after Tax and preference Dividend Number of Equity Shares
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Remarks: Earning per share is increased by 66% in 2004 and by 93% in 2005.
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Dividend Per Share :All the profits after tax and preference dividend available for equity shareholders are not distributed among them as dividend. Rather, a part of it is retained in business. DPS = Profit distributed to Equity Shareholders Number of Equity Sharess 2009 for 84,20,545 5,36,332 15.70 2010 1,39,67,326 5,36,332 26.04 2011 2,69,73,447 5,36,332 50.29
Remarks: Earnings per share and Dividend Per share are same because there is only equity shares so neither dividend is paid to preference shareholders nor earnings are retained.
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Dividend payout Ratio :It explains what percentage of profit after tax and preference dividend has been paid to equity shareholders as dividend.
D/P Ratio = Total Dividend paid to Equity Shareholders Total Net profit belonging to Equity Shareholders OR DPS EPS
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Remarks: Dividend payout Ratio is 100% because all earnings are paid as dividend to equity shareholders.
2010 it is being increased by 28 % and in 2011 it is being decreased by 11.3 %. Return on Total shareholders and Return on equity shareholder funds are same because only equity share are being issued by company. Earnings per share have been increased because of increase in earnings by 66 % in 2010 and by 93 % in 2011. Dividend per share and Earnings per share are same because whole earnings are distributed as dividend nothing is being kept in business. Thats why dividend payout ratio is 100 %.
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Chapter V
Conclusion & suggestion
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SUGGESTIONS
1) Debtors Turnover Ratio is decreasing because increase in debtors is more than increase in Revenue.
In 2011 debtors represent 40% of total Current Assets that is quiet high. So Company should make efforts for reducing their debtors.
2) Operating Expenses are high which 95% of total expenses are in 2011. In Operating Expenses
employee costs are high which 42% of total operating expenses is. So if company will make some efforts to reduce these expenses its profits can be increased.
3) Cash and Bank Balance is 42% in 2011 of total current Assets which is high. But this is because
company was planning to take the building on lease for which Rs. 5 crores were deposit as security.
4) Return on Shareholders funds are decreased because increase is net profit is less than increase in
shareholders funds.
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CONCLUSION
Ratio Analysis explains the relationship between items in Balance Sheet and Profit and loss Account. Ratio Analysis is a tool of analyzing financial Statements. Four types of Ratios are calculated for studying the financial situation. Firstly, Liquidity Ratios are calculated which
represent short term solvency situation Because these ratios are related with those assets which can be converted into cash within one year and those liabilities which have to paid in one year. For efficient working of business it is necessary that short term solvency situation should be better. In exchanging short term solvency situation is very good. Secondly, Turnover Ratios are calculated which represents that how quickly assets can be converted in sales. Here Share of debtors in Current Assets are very high that is 31%, 55% and 40%. So company has to make efforts to collect funds from debtors. Remaining turnover ratios are satisfactory. Next type is Long term solvency Ratio. For long term success, these ratios are very important. Here Proprietary Ratio of all three years is near 90%. It shows that debt burden is very less on company. It shows security of creditors. Mostly funds are invested by shareholders in current Assets. Lastly, there is Profitability Ratios. Company is earning 0.46, 0.59 and 0.53 in 2009, 2010 and 2011 respectively on every rupee invested by shareholders. Shareholders are getting Rs. 50.29 on every share in 2011. Whole Profits are being distributed in shareholders. Dividend payout Ratio is 100%.
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Chapter VI
Bibliography
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BIBLIOGRAPHY
BOOKS 1. Khan M Y, Jain P K Financial Management Tata McGraw Hill, 2004
Websites
1. www.answers.com 2. www.tevaapiindia.com
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Chapter VII
Appendices
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2009
2010
2011
SOURCES OF FUNDS Shareholdersfund Share capital Advance against share capital Reserve & Surplus Deferred Tax
APPLICATION OF FUNDS FIXED ASSETS Gross Block Less : Accumulated Depreciation Net Block Add.Capital work in progress CURRENT ASSETS(Including loans and Advances Sundry Debtors Cash and bank balances Loans and advances Less : Current liabilities and provisions Net Current Asset Balance in the profit & loss Account
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88,22,799
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Provision for tax Current Tax Deferred Tax/Reversal of Deferred Tax Net profit/loss for the year
PROFIT AND LOSS ACCOUNT, Beginning PROFIT AND LOSS ACCOUNT, end
(4,02,254)
(5,98,440) -59,918
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