AFS Ratio Main

8/7/2019 AFS Ratio Main

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Business AnalysisBusiness AnalysisTypes of Business AnalysisTypes of Business Analysis

Credit AnalysisCredit AnalysisEquity AnalysisEquity AnalysisBusiness Envi ronment and st rategy AnalysisBusiness Envi ronment and st rategy Analysis

Financial AnalysisFinancial AnalysisProspective AnalysisProspective Analysis Valuati on Valuati on



Roadmap t o Financial AnalysisRoadmap t o Financial AnalysisBusiness AnalysisBusiness Analysis

Business Envi ronment AnalysisBusiness Envi ronment Analysis Company sCompany sec onomic & indust ry circumstances, SWOT Analysis ,ec onomic & indust ry circumstances, SWOT Analysis ,indust ry analysisindust ry analysis

Business st rategy AnalysisBusiness st rategy Analysis Company s businessCompany s businessdecisi ons leading t o a c ompetitive advantage , itsdecisi ons leading t o a c ompetitive advantage , itsproduct mix , c ost st ructu reproduct mix , c ost st ructu re

Company p rof ile and signi f icant eventsCompany p rof ile and signi f icant events

Company sha reh olding patte rnCompany sha reh olding patte rn



Company AnalysisCompany Analysis

Financial pe rformanceFinancial pe rformanceRevenuesRevenuesProf itabilityProf itability

Asset Utilisati on Asset Utilisati onCash f lowsCash f lowsWork ing capital Management Work ing capital Management

St ock pe rformanceSt ock pe rformance



R ATIO ANALYSIS

R ATIO ANALYSIS



TermsTerms

Capital empl oyed =Capital empl oyed =Equity sha reh olde rs f unds + P ref erence sha reEquity sha reh olde rs f unds + P ref erence sha recapital + L ong te rm b orrow ed f undscapital + L ong te rm b orrow ed f unds

Net wor th = Equity sha reh olde rs f unds +/Net wor th = Equity sha reh olde rs f unds +/- -Def e rred taxDef e rred tax= Equity sha re capital + Rese rves & su rplus= Equity sha re capital + Rese rves & su rplus Miscellane ous Expenditu re n ot written off +Miscellane ous Expenditu re n ot written off +Def e rred taxDef e rred tax

Turnove r = SalesTurnove r = Sales



R OI ratiosR OI ratios1. ROI =1. ROI = NP be fore tax and inte rest NP be fore tax and inte rest

Total capital empl oyedTotal capital empl oyedThis ratio indicates the retu rn ea rned by the c ompanyThis ratio indicates the retu rn ea rned by the c ompanyon its t otal investment . This is ve ry imp or tant t o on its t otal investment . This is ve ry imp or tant t o sha reh olde rs and othe r sta ke h olde rs as it is thesha reh olde rs and othe r sta ke h olde rs as it is the

ultimate measu re of the c ompany s ove rallultimate measu re of the c ompany s ove rallpe rfor mance . This ratio when c ompa red with indust rype rfor mance . This ratio when c ompa red with indust ryave rage gives an indicati on ab out the f inancialave rage gives an indicati on ab out the f inancialpe rfor mance of the c ompany .pe rfor mance of the c ompany .

2. RONW =2. RONW = PATPAT Pref erence dividendPref erence dividend * 100 * 100 Net wor th ( ESHs Fund )Net wor th ( ESHs Fund )

This ratio indicates the retu rn ea rned by equityThis ratio indicates the retu rn ea rned by equitysha reh olde rs . High ratio means high dividend , bette r sha reh olde rs . High ratio means high dividend , bette r

grow th p rospects and high valuati on in capital ma rket .grow th p rospects and high valuati on in capital ma rket .



3 . EPS =3 . EPS = PATPAT Pre f erence dividendPre f erence dividendNumbe r of equity sha resNumbe r of equity sha res

This ratio gives the retu rn ea rned on eachThis ratio gives the retu rn ea rned on eachsha re . It is an imp or tant measu re of sha re . It is an imp or tant measu re of prof itability for the invest ors . This ratio is theprof itability for the invest ors . This ratio is thebasis for valuati on of companies in the event of basis for valuati on of companies in the event of me rge rs etc, st rategic investments by owne rs . me rge rs etc, st rategic investments by owne rs . Highe r ratio sh ows c ompany in a p ositive light . Highe r ratio sh ows c ompany in a p ositive light . Highe r ratio indicates highe r retu rnsHighe r ratio indicates highe r retu rns



Compa rative Standa rds / Benchma rkingCompa rative Standa rds / Benchma rking

Indust ry leade rIndust ry leade rIndust ry ave rageIndust ry ave rageWACCWACC

Cost of borrow ingsCost of borrow ings

In f luencing f act orsIn f luencing f act ors

SalesSalesCost ec onomiesCost ec onomiesOptimum capital st ructu reOptimum capital st ructu re



Structural ratios / Gearing ratios / Long term solvency ratiosStructural ratios / Gearing ratios / Long term solvency ratios

1. 1. Debt equity ratio =Debt equity ratio = Long termLong term DebtDebtTotal net worth ( ESHs Funds + PC )Total net worth ( ESHs Funds + PC )

This ratio helps in assessing whethe r the c ompany is relying on own f undsThis ratio helps in assessing whethe r the c ompany is relying on own f undsor borrow ed f unds . Highe r the debt m ore f ixed liabilities by way of inte rest . or borrow ed f unds . Highe r the debt m ore f ixed liabilities by way of inte rest . FI s gene rally look for a D/E of 1.5 :1 while f inancing p rojects . This ratio FI s gene rally look for a D/E of 1.5 :1 while f inancing p rojects . This ratio also indicates whethe r the c ompany has a optimum capital st ructu re t o also indicates whethe r the c ompany has a optimum capital st ructu re t o improve the retu rns available t o equity sha reh olde rs . improve the retu rns available t o equity sha reh olde rs .

2. 2. Debt service coverage ratio =Debt service coverage ratio = NPBIT NPBITInterest + Loan repaymentInterest + Loan repayment

This ratio indicates the p rof its available t o se rvice the debts . This ratio isThis ratio indicates the p rof its available t o se rvice the debts . This ratio isvery imp or tant for lende rs . Highe r the ratio highe r is the ability of thevery imp or tant for lende rs . Highe r the ratio highe r is the ability of thecompany t o f inance the debt and less risk of de f ault .company t o f inance the debt and less risk of de f ault .

3 . Inte rest c overage ratio =3 . Inte rest c overage ratio = NPBITNPBITInte rest Inte rest




Indust ry ave rageIndust ry ave rageNAV of indust ry leade r / lagga rdNAV of indust ry leade r / lagga rdInstituti onal n ormsInstituti onal n ormsGrow th / Decline ove r the p revious yea rsGrow th / Decline ove r the p revious yea rs

In f luencing f act orsIn f luencing f act orsROI & EPSROI & EPSDividend p olicyDividend p olicy



Liquidity ratiosLiquidity ratios1. 1. Current ratio =Current ratio = Current Assets, loans & AdvancesCurrent Assets, loans & Advances

Current liabilities & ProvisionsCurrent liabilities & Provisions

2. 2. Quick ratio =Quick ratio =Current Assets, loans & AdvCurrent Assets, loans & Adv inventoriesinventories prepaid Expprepaid Exp

Current liabilities & ProvisionsCurrent liabilities & Provisions Bank overdraftBank overdraft

These 2 ratios helps in analyzing the cu rrent assets and cu rrent These 2 ratios helps in analyzing the cu rrent assets and cu rrent

liabilities of the c ompany and its ability t o discha rge its day t o liabilities of the c ompany and its ability t o discha rge its day t o day obligati ons Quic k ratio is m ore realistic . It indicates theday obligati ons Quic k ratio is m ore realistic . It indicates theextent t o which the c ompany has cu rrent assets t o meet itsextent t o which the c ompany has cu rrent assets t o meet itscurrent liabilities . Highe r the ratio highe r is the s olvency level of current liabilities . Highe r the ratio highe r is the s olvency level of the c ompany and less risk of de f ault .the c ompany and less risk of de f ault .



Compa rative Standa rds / Benchma rkingCompa rative Standa rds / Benchma rkingInstituti onal n ormsInstituti onal n ormsEff ective asset utilisati onEff ective asset utilisati onCost ec onomiesCost ec onomiesPropor tion of non cash cha rges in expensePropor tion of non cash cha rges in expensest ructu rest ructu re


Prope r asset liability management Prope r asset liability management Credit pe riod availed and c redit pe riod all owedCredit pe riod availed and c redit pe riod all owedInvent ory management / Supply chainInvent ory management / Supply chain

management/ level of obs olescencemanagement/ level of obs olescence



Efficiency ratiosEfficiency ratios1.Fixed assets turnover ratio =1.Fixed assets turnover ratio = Net sales Net sales

Net block of fixed assetsNet block of fixed assets

Fixed assets a re inc ome gene rating assets for any c ompany . Fixed assets a re inc ome gene rating assets for any c ompany . This ratio indicates the e ff iciency with which the f ixed assetsThis ratio indicates the e ff iciency with which the f ixed assetsare used t o gene rate revenue . Highe r the ratio bette r is theare used t o gene rate revenue . Highe r the ratio bette r is theutilizati on of assets for gene rating sales .utilizati on of assets for gene rating sales .

2. 2. Net worth turnover ratio =Net worth turnover ratio = Net salesNet salesNet worthNet worth

This ratio indicates the overall f inancial and ope rationalThis ratio indicates the overall f inancial and ope rationaleff iciency of the c ompanyeff iciency of the c ompanyIt is an indicati on ab out the optimum capital st ructu re andIt is an indicati on ab out the optimum capital st ructu re and

producti on e ff iciencies of the c ompany. producti on e ff iciencies of the c ompany

.



3 . Debt ors Tu rnove r ratio =3 . Debt ors Tu rnove r ratio = Net SalesNet Sales

Avg . Debt ors Avg . Debt ors

This ratio indicates the numbe r of times theThis ratio indicates the numbe r of times the

debt ors a re c onve rted int o cash .debt ors a re c onve rted int o cash .

4. Average debt c ollection pe riod =4. Average debt c ollection pe riod =

Avg . Debt ors Avg . Debt ors * 36 0 days* 36 0 daysSalesSales



5. Invent ory Tu rnove r ratio =5. Invent ory Tu rnove r ratio = COGSCOGS

Avg . invent or ies Avg . invent or ies

This ratio sh ows the numbe r of times aThis ratio sh ows the numbe r of times a

company s invent ory is tu rned int o sales .company s invent ory is tu rned int o sales .

6 . Avg. Invent ory h olding pe riod =6 . Avg. Invent ory h olding pe riod =

Avg invent or ies Avg invent or ies * 36 0* 36 0

COGSCOGS




Indust ry ave rageIndust ry ave rageIndust ry leade r Indust ry leade r

Trend ove r a pe riod of timeTrend ove r a pe riod of time

Influencing factorsInfluencing factorsProducti on e ff icienciesProducti on e ff icienciesInvestment in relevant techn ologiesInvestment in relevant techn ologiesPrice and quality of productsPrice and quality of products



Profitability ratiosProfitability ratios1.

GPrati

o=

1.GP

rati

o= GPGP*

100*

100

SalesSales

2. Net p rof it ratio =2. Net p rof it ratio = PAT * 100PAT * 100

SalesSales

These ratios study the p rof itability in relati on t o sales . These ratios study the p rof itability in relati on t o sales . It helps t o assess the business pe rfor mance sta rtingIt helps t o assess the business pe rfor mance sta rtingfrom Gross P rof it . Multi level p rof itability ratios helpsfrom Gross P rof it . Multi level p rof itability ratios helpst o unde rstand the levels at which the re is p ressu re ont o unde rstand the levels at which the re is p ressu re onma rginma rgin ( profit )( profit )



Compa rative Standa rds / Benchma rkingCompa rative Standa rds / Benchma rkingTrend ove r a pe riod of timeTrend ove r a pe riod of timeIndust ry ave rageIndust ry ave rageIndust ry leade r / lagga rdIndust ry leade r / lagga rdWACCWACC


Qualitative and quantitative g row th in salesQualitative and quantitative g row th in sales Age of f ixed assets ( depn ) Age of f ixed assets ( depn )Cost of borrow ingCost of borrow ing

Eff icient tax planningEff icient tax planning



V aluation ratios V aluation ratios1. 1. P/E ratio =P/E ratio = Market price of equity shareMarket price of equity share

EPSEPS

This ratio is the m ost p opula r ratio for valuati on of a c ompanyThis ratio is the m ost p opula r ratio for valuati on of a c ompanyby the invest ors . This ratio indicates ma rket c onf idence in theby the invest ors . This ratio indicates ma rket c onf idence in the

company and its f utu re p rospects.

company and its f utu re p rospects.

2. 2. Book value per share ( Net Asset V alue ) =Book value per share ( Net Asset V alue ) = Net worthNet worthNo. of equityNo. of equity

sharesshares

This ratio measu re the net wor th pe r equity sha re . This ratio This ratio measu re the net wor th pe r equity sha re . This ratio indicates the e ff iciency of the c ompany s management inindicates the e ff iciency of the c ompany s management inbuilding up rese rves and its p rudent f inancial p ractices .building up rese rves and its p rudent f inancial p ractices .




Indust ry ave rageIndust ry ave rageLeade rs & lagga rds in indust ryLeade rs & lagga rds in indust ryTrend ove r a pe riod of timeTrend ove r a pe riod of time

In f luencing f act orsIn f luencing f act orsDividend p olicyDividend p olicySize of the c ompanySize of the c ompanyMarket c onditionsMarket c onditionsNAVNAV



Cash f low ratiosCash f low ratios

RelevanceRelevance

Large n on cash expensesLarge n on cash expenses

Rapid g row thRapid g row thWindow dressingWindow dressing reality chec kreality chec k



1. Cash f low t o net inc ome =1. Cash f low t o net inc ome =

Cash from ope rations / Net inc omeCash from ope rations / Net inc ome

2. Cash f low adequacy =2. Cash f low adequacy =Cash from ope rations / Cash paid for Cash from ope rations / Cash paid for

investment investment

Cash paid for investment = cash paid for capitalCash paid for investment = cash paid for capitalexpenditu re + cash paid for acquisiti onsexpenditu re + cash paid for acquisiti ons

The den ominat or can als o include cash paid for dividendThe den ominat or can als o include cash paid for dividend





Analysts sh ould ta ke the follow ing p recauti ons Analysts sh ould ta ke the follow ing p recauti ons

Analysis of t rends ove r a long pe riod of time Analysis of t rends ove r a long pe riod of timeInte rpretati on of obse rvati on against indust ryInte rpretati on of obse rvati on against indust rybench ma rkbench ma rk

Analysis of core ratios only Analysis of core ratios onlyInte r f irm c ompa rison for va riations inInte r f irm c ompa rison for va riations in

acc ounting p oliciesacc ounting p oliciesIn case of conglome rates c ompa rativeIn case of conglome rates c ompa rativepe rformance of diff erent lines of businesspe rformance of diff erent lines of business



Potential red f lagsPotential red f lags

Unexplained change in acc ounting p olicyUnexplained change in acc ounting p olicyUnusual inc rease in receivables, invent ory,Unusual inc rease in receivables, invent ory,

credit ors & dep reciati on .credit ors & dep reciati on .Inc rease in unusual sh or t te rm f inancingInc rease in unusual sh or t te rm f inancingQualif ied audit opinionQualif ied audit opinion

Change in exte rnal audit orChange in exte rnal audit orInc rease in related pa rty t ransacti onsInc rease in related pa rty t ransacti ons



1. Which c ompany is m ore success f ul in using1. Which c ompany is m ore success f ul in using

leve rage ?leve rage ? A B A B

PBITPBIT 18000 2000018000 20000Inte rest on debentu res 3 000 14400Inte rest on debentu res 3 000 14400

Inc ome tax 7 000 2500Inc ome tax 7 000 2500

Debentu res 20000 6 0000Debentu res 20000 6 0000

Avg . t otal assets 7 0000 90000 Avg . t otal assets 7 0000 90000

Avg . sha reh olde rs equity 3 5000 20000 Avg . sha reh olde rs equity 3 5000 20000



Comment on the capital ma rket standing of Comment on the capital ma rket standing of both the c ompanies . Which c ompany s sha reboth the c ompanies . Which c ompany s sha rewould y ou rec ommend t o a risk ta king invest or . would y ou rec ommend t o a risk ta king invest or .

A B A BEPSEPS 3 .503 .50 6 .756 .75

DPS 2.00 3 .00DPS 2.00 3 .00

Market p rice pe r sha re 6 0.00 95.00Market p rice pe r sha re 6 0.00 95.00

Beta 1. 3 0 1.50Beta 1. 3 0 1.50



Du Pont AnalysisDu Pont Analysis

Retu rn on Assets =Retu rn on Assets =Prof it ma rgin * Asset Tu rnove rProf it ma rgin * Asset Tu rnove r

PATPAT * 100 =* 100 = PATPAT * 100 ** 100 * SalesSalesTotal Assets Sales T otal AssetsTotal Assets Sales T otal Assets

etu rn on Assets indicates the ove rall e ff iciency of etu rn on Assets indicates the ove rall e ff iciency of e business d riven by p rof itability and e ff iciency ine business d riven by p rof itability and e ff iciency in

se of assets .se of assets .



ROE = P rof it ma rgin * T otal Assets T .O * Equity MROE = P rof it ma rgin * T otal Assets T .O * Equity M

NPATNPAT == NPATNPAT ** SalesSales ** Total AssetsTotal Assets

Net wor th Sales T otal Assets Net wor thNet wor th Sales T otal Assets Net wor th

Equity multiplie r depends up on the leve rage of Equity multiplie r depends up on the leve rage of

the c ompany . A highly leve red f irm will have athe c ompany . A highly leve red f irm will have ahigh equity multiplie r whe reas a l ow leve red f irhigh equity multiplie r whe reas a l ow leve red f irwill have a l ow equity multiplie r.will have a l ow equity multiplie r.



Illust rationIllust ration200 9 2008200 9 2008

Sales 121000 110000Sales 121000 110000

PAT 15 3 96 1 3 545PAT 15 3 96 1 3 545

Avg . Total Assets 7 4800 66 0 94 Avg . Total Assets 7 4800 66 0 94

Analyse ROA using Du P ont frame work Analyse ROA using Du P ont frame work



200 9 2008200 9 2008

Net inc ome 97 3 1841Net inc ome 97 3 1841

Sales 2 6 996 2400 6Sales 2 6 996 2400 6

T. Assets 3 70 3 9 3 4 6 21T. Assets 3 70 3 9 3 4 6 21

Equity 97 81 90 63Equity 97 81 90 63

Analyse the ROE using Du P ont F rame work Analyse the ROE using Du P ont F rame work



2. The numbe rs bel ow are for Iff y Co. and M odel Co. 2. The numbe rs bel ow are for Iff y Co. and M odel Co. Explain the reas on of low retu rn on equity .Explain the reas on of low retu rn on equity .

Iff yIff y ModelModelCashCash 120 120 900900

ReceivablesReceivables 6 00 6 00 45004500

Invent oryInvent ory 480 480 6 0006 000Prope rty, plant & equipment Prope rty, plant & equipment 3 440 3 440 1500015000

Total liabilitiesTotal liabilities 3 1 90 181503 1 90 18150

Sha reh olde rs equitySha reh olde rs equity 1450 82501450 8250

SalesSales 10000 7500010000 75000COGSCOGS 9200 66 7509200 66 750

Wage expensesWage expenses 7 00 5250700 5250

Net inc omeNet inc ome 100 3 000100 3 000



Below is the data ext racted from Doyle c o.Below is the data ext racted from Doyle c o.200 9 2008200 9 2008

SalesSales 211200 1 77 6 00211200 1 77 6 00

Total AssetsTotal Assets 201 6 00 1 6 8000201 6 00 1 6 8000Sha reh olde rs equity 52800 48000Sha reh olde rs equity 52800 48000

Net inc ome 1 7280 11520Net inc ome 1 7280 11520

Cash from ope rations 2 3 040 3 1200Cash from ope rations 2 3 040 3 1200Cash paid for capital exp . 21 36 0 15840Cash paid for capital exp . 21 36 0 15840

Cash paid for acquisiti ons 6 000 480Cash paid for acquisiti ons 6 000 480

Cash paid for inte rest 36 00 2 6 40Cash paid for inte rest 36 00 2 6 40

Taxes paid 9 840 96 00Taxes paid 9 840 96 00

In which yea r did the c ompany pe rfor m bette r. Explain .In which yea r did the c ompany pe rfor m bette r. Explain .

Which questi ons would y ou as k the management Which questi ons would y ou as k the management be fore y ou invest in the said c ompanybe fore y ou invest in the said c ompany



The follow ing is the inc omplete set of f inancialThe follow ing is the inc omplete set of f inancial

statements of Arogya Co. statements of Arogya Co. Inc ome Statement for the y .e 3 1.0 3 .0 9Inc ome Statement for the y .e 3 1.0 3 .0 9Net salesNet sales 33 00033 000

COGS ?COGS ?Gross P rof it Gross P rof it 90009000

PBITPBIT ??

Inte rest Inte rest ??PBTPBT ??ITIT ??

PATPAT 3 50003 5000



Balance Sheet as on 31.03.09Balance Sheet as on 31.03.09Shareholders fundShareholders fundSha re capitalSha re capital 2800028000Rese rves & Su rplus ?Rese rves & Su rplus ?LiabilitiesLiabilitiesSecu red l oansSecu red l oans 2100021000

Unsecu red l oans 1 7000Unsecu red l oans 1 7000Current liabilities ?Current liabilities ?

Assets AssetsFixed Assets ?Fixed Assets ?

Investments 2400Investments 2400Invent or ies ?Invent or ies ?Debt ors ?Debt ors ?Cash 1500Cash 1500

Othe r Current Assets6 00

Othe r Current Assets6 00



a) P rof it ma rgin 7%a) P rof it ma rgin 7%b) Current ratio 1. 3b) Current ratio 1. 3

c) Debt equity 1.5c) Debt equity 1.5

d) Invent ory tu rnove r 2 timesd) Invent ory tu rnove r 2 timese) Avg . debt c ollection pe riod 7 3 days ( 36 5 dayse) Avg . debt c ollection pe riod 7 3 days ( 36 5 daysf )f ) Inte rest c ove rage is 8 timesInte rest c ove rage is 8 timesg)g) Retu rn on assets is 3 .5 Retu rn on assets is 3 .5



Predicting f inancial dist ressPredicting f inancial dist ress

Beave r and Altman empl oyed statisticalBeave r and Altman empl oyed statisticaltechniques t o predict f inancial dist ress . Fivetechniques t o predict f inancial dist ress . Fivef inancial ratios were able t o disc riminatef inancial ratios were able t o disc riminatebet ween ban krupt and n on ban krupt bet ween ban krupt and n on ban krupt

companies .companies .



Manu f actu ring c ompaniesManu f actu ring c ompanies

Z = 1.2X1 + 1.4 X2 + 3 . 3 X 3 + 0. 6 X4 + 1.0 X5Z = 1.2X1 + 1.4 X2 + 3 . 3 X 3 + 0. 6 X4 + 1.0 X5

Pvt . Manu f actu ring c ompaniesPvt . Manu f actu ring c ompanies

Z1 = 0. 71 7X1 + 0.84 7X2 + 3 .10 7X 3 + 0.42X4 AZ1 = 0. 71 7X1 + 0.84 7X2 + 3 .10 7X 3 + 0.42X4 A+ 0. 998 X5+ 0. 998 X5

Gene ral useGene ral useZ2 = 6 .5 6 X1 + 3 .2 6 X2 + 6 .72X 3 + 1.05 X4 AZ2 = 6 .5 6 X1 + 3 .2 6 X2 + 6 .72X 3 + 1.05 X4 A



X1 = W ork ing capital t o t otal assetsX1 = W ork ing capital t o t otal assetsX2 = Retained ea rnings t o t otal assetsX2 = Retained ea rnings t o t otal assetsX 3 = EBIT t o t otal assetsX 3 = EBIT t o t otal assetsX4 = Ma rket value of equity t o book value of t otalX4 = Ma rket value of equity t o book value of t otal

liabilitiesliabilitiesX4 A = Net wor th t o Total liabilitiesX4 A = Net wor th t o Total liabilitiesX5 = Sales t o t otal assetsX5 = Sales t o t otal assets



ScoresScores

Safe Grey BankruptSafe Grey BankruptZZ > 2. 99> 2. 99 1.811.81 --2. 992. 99 < 1.81< 1.81

Z1Z1 > 2. 90> 2. 90 1.2 3 1.2 3 2. 902. 90 < 1.2 3< 1.2 3Z2Z2 > 2. 6 0 1.10 > 2. 6 0 1.10 2. 6 02. 6 0 < 1.10< 1.10



Illust rationIllust ration

Dete rmine impact of the t ransacti ons listed on theDete rmine impact of the t ransacti ons listed on the

follow ing ratios :follow ing ratios :1.1. Current ratioCurrent ratio2.2. Asset tu rnove r ratio Asset tu rnove r ratio

3 .3 . Debt Equity ratioDebt Equity ratio4.4. Debt ors tu rnove r ratioDebt ors tu rnove r ratio5.5. Quick ratioQuick ratio6 .6 . Invent ory ratioInvent ory ratio

7 .7 . Retu rn on equityRetu rn on equity8.8. Retu rn on capital empl oyedRetu rn on capital empl oyed9 .9 . Prof it ma rginProf it ma rgin10.10. Debt se rvice c ove rage ratioDebt se rvice c ove rage ratio



1.R eceived dividend from an ass ociate1.R eceived dividend from an ass ociate

2. Made d own payment for pu rchase of machine ry2. Made d own payment for pu rchase of machine ry3 .Sold investments for cash3 .Sold investments for cash4.R eceived payment from cust ome r4.R eceived payment from cust ome r5. Issued c onve rtible debentu res for cash5. Issued c onve rtible debentu res for cash6 . Accrued inc ome tax6 . Accrued inc ome tax7.Paid advance t o a supplie r of mate rials7.Paid advance t o a supplie r of mate rials8. Exchanged equipment for a m ot orca r8. Exchanged equipment for a m ot orca r9.Sold machine ry for a loss9.Sold machine ry for a loss10.R eti red a f ully dep reciated plant form use .10.R eti red a f ully dep reciated plant form use .



Calculate cash f lows from ope rating activities, investing activities andCalculate cash f lows from ope rating activities, investing activities andf inancing activities .f inancing activities .

Rs . lacsRs . lacs1.1.

Issue of sha resIssue of sha res10.0010.00

2.2. Dividend receivedDividend received 0.250.253 .3 . Dividend paid 0.50Dividend paid 0.504.4. NPATNPAT 12.0012.005.5. Dep reciati on 1.00Dep reciati on 1.006 .6 . Goo dwill w / off Goo dwill w / off 1.001.00

7.7. Inc rease in D rsInc rease in D rs 3 .003 .008.8. Inc rease in CrsInc rease in Crs 3 .003 .00

9.9. Repayment of loanRepayment of loan 5.005.0010.10. Purchase of f ixed assets 6 .00Purchase of f ixed assets 6 .0011.11. Sale of investments 0.55Sale of investments 0.5512.12.

TaxTax2.502.50

1 3 .1 3 . Capital advances paid 1. 75Capital advances paid 1. 7514.14. Inte rest paid on loansInte rest paid on loans 0.250.2515.15. Impai rment l oss on f ixed assets 1. 3 5Impai rment l oss on f ixed assets 1. 3 51 6 .1 6 . Inte rest received on I CDs 0.45Inte rest received on I CDs 0.45

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AFS Ratio Main