Complete Financial analysis of DLF

Complete Financial analysis of DLF.

PPT: https://www.slideshare.net/DivyaKapoor57/financial-analysis-of-dlf

1. INTEGRATED LIVE PROJECT








SUBMITTED BY:
DIVYA KAPOOR
181416
PGDM 18-20
MSRIM

2. A Project Report Submitted In Partial Fulfilment of the Requirements
For The Award of the
POST GRADUATE DIPLOMA IN MANAGEMENT
TO
RAMAIAH INSTITUTE OF MANAGEMENT
BY
DIVYA KAPOOR -181416


BATCH 2018-20
Under the guidance of
DR. P. BHANUMATHI



RAMAIAH INSTITUTE OF MANAGEMENT
NEW BEL ROAD, BANGALORE-560054
September 2018


CERTIFICATE

3. This is to certify that the Project Report undertaken by Divya kapoor (181416)
conducted on DELHI LAND AND FINANCE LTD. (DLF)
Submitted in partial fulfilment of the requirements for the award of the
POST GRADUATE DIPLOMA IN MANAGEMENT
TO
RAMAIAH INSTITUTE OF MANAGEMENT
Is a record of bonafide Integrated Live Project carried out under my supervision and
guidance. This report has not been submitted for the award of any other
degree/diploma/fellowship or similar titles or prizes.

Guide’s Signature:

Name: DR. P. BHANUMATHI
Qualification: B.E. , M.B.A. , Ph.D.,










STUDENT’S DECLARATION

4. I hereby declare that the Integrated Live Project Report conducted on DELHI LAND AND
FINANCE LTD. (DLF ) under the guidance of DR. P. BHANUMATHI.
Submitted in Partial fulfilment of the requirements for the
POST GRADUATE DIPLOMA IN MANAGEMENT
TO
RAMAIAH INSTITUTE OF MANAGEMENT

has not been submitted for the award of any other Degree/Diploma/Fellowship or other similar
titles or prizes.

DIVYA KAPOOR -181416

Place: Bangalore

Date: 27/09/2018






TABLE OF CONTENTS

TOPICS PAGE NO.
1. History and growth of the organization 1-3

5. 2. Vision, Mission & SWOT analysis 4-5
3. Organization Structure 6
4. Products & services 7
5. Major competitors 8-9
6. Financial Data Analysis: 10-27
i. Ratio Analysis. The following ratios
are being calculated:
13 - 27
A. Profitability Ratio 13-18
B. Liquidity Ratio 18-21
B. Solvency Ratio 21-24
C. Efficiency Ratio 25-27
ii. Represented the key data as tables and
graphs and charts.
13-27
7. Bibliography & Annexures -




LIST OF FIGURES AND CHARTS
TOPIC TABLE/ FIGURE NO. PAGE NO.
HISTORY AND
GROWTH
IMAGE 1.1 1
TABLE 1.1 3
IMAGE 1.2 3
ORGANISATIONAL
STRUCTURE
TABLE 1.2 6
COMPETITORS TABLE 1.3 9
IMAGE 1.3 9

6. GROSS PROFIT
RATIO
TABLE 1.4 13
IMAGE 1.4 14
NET PROFIT RATIO TABLE 1.5 14
IMAGE 1.5 15
OPERATING
PROFIT RATIO
TABLE 1.6 15
IMAGE 1.6 16
OPERATING
EXPENSES RATIO
TABLE 1.7 16
IMAGE 1.7 17
RETURN ON
CAPITAL
EMPLOYED
TABLE 1.8 17
IMAGE 1.8 18
WORKING
CAPITAL
TURNOVER RATIO
TABLE 1.9 18
IMAGE 1.9 19
CURRENT RATIO TABLE 1.10 19
IMAGE 1.10 20
QUICK RATIO TABLE 1.11 20
IMAGE 1.11 21
DEBT EQUITY
RATIO
TABLE 1.12 22
IMAGE 1.12 22
DEBT ASSET
RATIO
TABLE 1.13 23
IMAGE 1.13 23
INTEREST TABLE 1.14 24
COVERAGE RATIO IMAGE 1.14 24
INVENTORY
TURNOVER RATIO
TABLE 1.15 25
IMAGE 1.15 25
DEBTORS
TURNOVER RATIO
TABLE 1.16 26
IMAGE 1.16 26
ASSETS
TURNOVER RATIO
TABLE 1.17 27
IMAGE 1.17 27

7.  Consolidated Revenue : Rs 7,663 crore
 Achieved net sales of Rs 1,000 crore during the year
 Completed projects of 8.6 msf (approx.)
 Net leasing of 1.13 msf (approx.) of office space during the year


IMAGE
1.1
HISTORY OF DLF

Delhi Land and finance (DLF) formally known as DLF Limited is one of the largest
commercial real estate developer in India . DLF have many residential colonies in Delhi such
as Shivaji Park, Rajouri Garden, Krishna Nagar, South Extension, Greater Kailash, Kailash
Colony and Hauz Khas.
DLF has approx. 25 million sq. ft of leased office space spread across Gurgaon, Kolkata,
Chandigarh , Chennai and Hyderabad. DLF has embarked its footprint in commercial real

8. estate market as well where it has leased about 1 lakh sq. feet office spaces to various
companies like Samsung.
People like MR. Kushal pal Singh , Mohit Gujral and Rajiv Singh are some of the people who
has huge contribution in the expansion and growth of DLF.

GROWTH AND MILE STONES
DLF's first residential project was in Krishna nagar in east Delhi which completed in the year
1949. Further the company developed 21 colonies in Delhi including some in the south
extension, greater kailash and kailash colony.
Company's revenue was increasing extensively until Delhi development act in 1957 hit its
growth Company's revenue was increasing extensively until Delhi development act in 1957
hit its growth. DLF has to come up with the strategy to acquire land at relatively low cost
outside the area controlled by the Delhi development authority in Gurgaon and Haryana.
This land purchase strategy adopted a humane approach so that the sellers do not feel short
changed. DLF did partnership with farmers so that they also got a share in profits, which
encouraged more farmers to come forward and be a partner with DLF and hence this proved
to be a milestone in the progress of DLF.
In 2008 DLF became the title sponsor of the Indian premier league.
Again a hit had come to growth of DLF in august 2011, when the buyers in its residential
projects located in Gurgaon lodged a complaint against DLF and had to pay a penalty of Rs.
6.3 billion which was imposed by competition commission of India.

GROWTH OF DLF
YEAR ACHIEVEMENTS
1950-64 Developed 22 urban colonies in Delhi in collaboration with farmers
1985-95 Commenced development of DLF city Gurgaon
1996-98 Ventured into group housing projects
1999-00 Ventured into grade A office space in Gurgaon
2002 Ventured into organized retail complexes
2003 Commenced development of DLF cyber city in Gurgaon
2004 Launched premium residential complexes
2005 Focus on IT parks and next generation malls
2006 Significant progress in pursuing and ramping up new business
2007 Entered capital market with listing in BSE and NSE
2008 Commenced operation of India’s first luxury mail-emporia
2009 Launched capital greens

9. 2010 Launched new suburb
2011 Commenced operation of first automated multi-level car parking in
Sarojini nagar
2012 Launched 8.2km expressway project in partnership with HUDA
2013 Launched cyberhug
2014 Emporia concluded India’s first CMBS issue
2015 Becomes India’s first development company to get ISO certificate
2016 Launches DLF mall of India
2017 Launch of Chanakya mall
Table
1.1
IM AGE 1.2

DLF VISION

“To contribute significantly to building the new India and become the world’s most
valuable real estate company.”
The DLF Group seeks to usher in a better tomorrow by providing people with improve quality
of life and living standards. DLF believe that the key element of this transformation is change.
DLF endeavoured in providing comprehensive solutions to all valued customers across the
Real Estate Industry.

10. The group is also intensely committed to playing a key role in discharging its social
obligations by adhering to specified norms of legal, environmental and ethical practices. The
aim is for DLF as Group to be a professional and responsive corporate entity, which
positively transforms the quality of life of society at large.


DLF MISSION

“To build world-class real-estate concepts with the highest standards of professionalism,
ethics, quality and customer service.”
The words are an intrinsic reflection of the Group's commitment and its 60-year heritage. The
typeface represents :
 the solidity of the enterprise;
 emphasizes accountability, responsibility as being a strong and integral part of the
Group's ethos.




SWOT ANALYSIS

11. ORGANISATIONAL STRUCTURE

12. TABLE1.2








DLF PRODUCTS

Rapid Metro Captive Power Plant

13. Automated Car Parks Private Fire Station


Solar Power 24x7 CISF Ring Security


Patents CCTVs


Sewage Treatment Plant Huda Expressway


DLF's primary business is development of residential, commercial and retail properties.
DEVELOPMENT BUSINESS
The development business focuses on the development and sale of residential real estate which
include houses, villas and apartments with a focus on the high-end, luxury residential
developments. The business also consists of certain commercial and shopping complexes.
LEASE BUSINESS
The lease business involves leasing of its developed offices and retail properties. One of the
key objectives is to achieve returns from investments in its portfolio properties within a
targeted time frame. DLF has become a preferred name with many IT and leading Indian and
International corporate giants, including GE, IBM, Microsoft, Canon, Citibank, google, etc.
DLF's retail portfolio includes India’s first luxury mall DLF Emporia, Premium malls - DLF
Promenade (Vasant Kunj, Delhi), DLF Place (Saket, Delhi), DLF City Centre (Chandigarh)
and India’s largest destination mall – The Mall of India (Noida). The latest addition to the
Luxury collection is Chanakya which is situated in the heart of Lutyens’ Delhi.
It is also engaged in the business of generation of power, provision of maintenance services,
hospitality and recreational activities, life insurance and retail chain outlet.

14. DLF COMPETITORS



Omaxe is in the Real Estate Development &
Operations field. Omaxe generates $10.4B
more revenue than DLF.

Sobha is one of DLF's top competitors.
Sobha competes in the Real Estate
Development & Operations field. Sobha
generates 94% the revenue of DLF.

Unitech is now one of the leading real estate
developers in the residential, retail,
hospitality & commercial space.

Prestige is a provider of real estate property
development services for residential,
commercial, leisure and hospitality sectors.
It has a presence in Bangalore, Goa,
Hyderabad, Mangalore, Cochin & Chennai.

It is a real estate developer that specializes
in townships, commercial spaces, group
housing and entertainment zones.

It is the young and vibrant real estate arm of
Bharti Enterprises, a leading business group
with interests in telecom, Agri business,
financial services and manufacturing.

It is a real estate developer based in
Mumbai. The company has developed over
42 projects at locations across Mumbai. Its
main interest is in Residential, Office Space,
Retail, Hospitality and Social Infrastructure
properties in Mumbai. Oberoi Realty also
has the distinction of developing the
2
nd
tallest tower of India – Oasis Tower.

It is a textile group based in Ludhiana. The
group is engaged in manufacturing and
trading in Yarn, Greige and Processed
Fabric, Sewing Thread, Acrylic
fibre and Alloy steel.


It is a real estate company with its head
office in Mumbai. The company is currently
developing projects that are estimated to
cover more than 89.7 million square feet. It
is operational in 12 major cities across India.

TABLE1.3

15. IM AGE
1.3

FINANCIAL STATEMENTS OF DLF

ANNUAL REPORTS OF THE COMPANY:

Profit & Loss Consolidated (Rs in Crs.) FROM F.Y. 2013-14 TO F.Y. 2017-
2018



YEARS Mar 14 Mar 15 Mar 16 Mar 17 Mar 18


INCOME :

Sales Turnover 8,298.04 7,648.73 9,925.61 8,221.23 6,706.79

Excise Duty 0 0 0 0 0

Net Sales 8,298.04 7,648.73 9,925.61 8,221.23 6,706.79

Other Income 1,651.11 572.91 671.43 1,205.76 11,571.91
Stock Adjustments 0 0 0 0 0

Total Income 9,949.15 8,221.64 10,597.04 9,426.99 18,278.70

EXPENDITURE :

Raw Materials 0 0 0 0 0

Power & Fuel Cost 92.42 81.09 170.61 51.68 33.27

Employee Cost 557.61 348.82 315.24 328.32 343.59

Other Manufacturing Expenses 3,985.42 3,367.47 4,619.50 3,536.50 3,240.78

Selling and Administration Expenses 687.49 523.68 607.19 568.58 476.16

Miscellaneous Expenses 999.81 383.44 412.56 360.08 2,085.20

Less: Pre-operative Expenses Capitalised 0 0 0 0 0

Total Expenditure 6,322.75 4,704.50 6,125.10 4,845.15 6,179.00

16. Operating Profit 3,626.40 3,517.13 4,471.95 4,581.84 12,099.70

Interest 2,463.25 2,303.86 2,679.80 2,979.82 2,950.71

Gross Profit 1,163.15 1,213.27 1,792.15 1,602.02 9,148.99

Depreciation 662.93 544.79 765.89 572.49 533.53

Minority Interest (before tax) 0 0 0 0 0

Profit Before Tax 500.22 668.48 1,026.26 1,029.53 8,615.46

Tax 368.42 650.19 354.82 203.57 267.18

Fringe Benefit Tax 0 0 0 0 0

Deferred Tax -450.8 -492.07 209.42 25.69 4,055.87

Net Profit 582.59 510.36 462.02 800.26 4,292.41

Minority Interest (after tax) -56.54 -33.3 -1.1 -6.8 12.93

Profit/Loss of Associate Company 7.08 -3.43 -156.92 -92.26 184.38

Net Profit after Minority Interest & P/L
Asso.Co. 646.21 540.23 306.2 714.8 4,463.86

Extraordinary Items 140.44 -1.9 -26.36 215.49 4,150.58

Adjusted Net Profit 505.77 542.13 332.56 499.31 313.28

Adjs. below Net Profit -37.04 59.89 -792.87 121.45 1,114.21

P & L Balance brought forward 10,664.56 10,472.51 6,446.87 5,320.28 6,027.05

Statutory Appropriations 0 0 0 0 0

Appropriations 801.21 777.35 639.91 129.48 -9.39

P & L Balance carried down 10,472.51 10,295.28 5,320.28 6,027.05 11,614.51

Dividend 519.2 517.68 0 0 0

Preference Dividend 0 0 0 0 0

Equity Dividend (%) 100 100 100 100 100

Dividend Per Share(Rs) 2 2 2 2 2

EPS before Minority Interest 2.72 2.27 2.59 4.49 24.06

EPS before Minority Interest 2.72 2.27 2.59 4.49 24.06

EPS after Minority Interest 3.07 2.44 1.72 4.01 25.02

EPS after Minority Interest 3.07 2.44 1.72 4.01 25.02
Book Value 153.78 153.59 134.94 137.74 193.72

Book Value 153.78 153.59 134.94 137.74 193.72








Balance Sheet Consolidated (Rs in Crs.)



YEAR Mar 14 Mar 15 Mar 16 Mar 17 Mar 18


SOURCES OF FUNDS :

Share Capital 2,155.49 356.39 356.74 356.8 356.81

Reserves Total 27,038.58 27,012.51 23,712.34 24,216.03 34,203.53

Equity Share Warrants 0 0 0 0 750.1

Equity Application Money 0.02 0 0 0 0

Total Shareholders’ Funds 29,194.09 27,368.90 24,069.08 24,572.83 35,310.44

Minority Interest 202.29 174.72 126.14 123.89 48.8

17. Secured Loans 21,390.07 23,732.20 22,906.32 29,196.96 8,490.93

Unsecured Loans 944 762.74 2,357.45 5.27 8,999.86

Total Debt 22,334.07 24,494.94 25,263.77 29,202.23 17,490.79

Policy Holders Fund 0 0 0 0 0

Other Liabilities 2,269.85 4,363.46 2,336.18 2,464.59 1,462.07

Total Liabilities 54,000.30 56,402.02 51,795.17 56,363.54 54,312.10

APPLICATION OF FUNDS :

Gross Block 21,786.25 23,049.77 4,142.64 25,758.43 8,562.67

Less: Accumulated Depreciation 2,951.61 3,431.01 199.46 1,118.22 480.39

Less: Impairment of Assets 0 0 0 0 0

Net Block 18,834.64 19,618.76 3,943.18 24,640.21 8,082.28

Lease Adjustment 0 0 0 0 0

Capital Work in Progress 5,978.69 5,900.90 1,779.06 152.76 137.33

Producing Properties 0 0 0 0 0

Investments 891.23 623.41 21,309.72 1,209.27 20,831.55

Current Assets, Loans & Advances

Inventories 18,511.20 17,610.47 16,834.24 20,098.80 19,847.85

Sundry Debtors 1,561.23 1,586.40 3,416.93 1,417.36 1,285.79

Cash and Bank 2,442.03 2,747.65 3,381.32 4,098.93 2,277.93

Loans and Advances 11,415.24 11,901.53 2,504.10 4,033.25 5,328.10
Total Current Assets 33,929.70 33,846.05 26,136.59 29,648.33 28,739.67

Less : Current Liabilities and
Provisions

Current Liabilities 9,968.63 9,111.37 9,433.11 7,518.25 5,791.59

Provisions 556.01 748.95 501.03 72.49 137.3

Total Current Liabilities 10,524.64 9,860.32 9,934.15 7,590.74 5,928.90

Net Current Assets 23,405.06 23,985.73 16,202.45 22,057.59 22,810.78

Miscellaneous Expenses not written
off 0 0 0 0 0

Deferred Tax Assets 1,349.48 1,924.00 4,635.47 4,909.30 4,006.24

Deferred Tax Liability 331.72 413.19 456.3 551.2 4,444.70

Net Deferred Tax 1,017.76 1,510.81 4,179.17 4,358.10 -438.46

Other Assets 3,872.92 4,762.40 4,381.61 3,945.61 2,888.63

Total Assets 54,000.30 56,402.01 51,795.19 56,363.54 54,312.11

Contingent Liabilities 8,930.00 8,634.51 7,995.98 9,015.32 10,064.92





INCOME STATEMENT :

PARTICULARS 2014 2015 2016 2017 2018
NET SALES 8298.04 7648.73 9925.61 8221.23 6706.79
- COGS 7134.89 6435.46 8133.46 6619.21 2442.2
GP/ EBIT 1163.15 1213.27 1792.15 1602.02 9148.99
EBT 500.22 668.48 1026.26 1029.53 8615.46
-TAX 368.42 650.19 354.52 203.57 267.18

18. EAT 582.59 510.36 462.02 800.26 4292.41
- PREFRENCE
DIVIDEND
0 0 0 0 0
EQUITY
EARNINGS
582.59 510.36 462.02 800.26 4292.41
NO. OF EQUITY
SHARES
190 209 269 200 172
EPS 3.07 2.44 1.72 4.01 25.02




FINANCIAL ANALYSIS OF DLF

Ratio Analysis is the most popular and most widely used of all the techniques of financial
analysis. The financial/accounting figures and financial statements in isolation do not make
much sense as they will not be able to reveal the relative position. Ratio analysis is a very
important tool for analysing the financial strengths and weaknesses of business entities.

Types of Ratios :
 Liquidity Ratios
 Profitability Ratios
 Solvency Ratios
 Turnover Ratios


A. Profitability Ratios : Profitability Ratios indicate the profitability of the firm. It
includes the following ratios:

1. GP RATIO
2. NP RATIO
3. OPERATING PROFIT RATIO
4. OPERATING EXPENSES RATIO
5. RETURN ON CAPITAL EMPLOYED


1. GROSS PROFIT RATIO= GROSS PROFIT / NET SALES

YEAR GROSS PROFIT NET SALES RATIO
2018 9148.99 6706.79 1.36
2017 1602.02 8221.23 0.19
2016 1792.15 9925.61 0.18
2015 1213.27 7648.73 0.15
2014 1163.15 8298.01 0.14
TABLE 1.4

19. GROSS PROFIT = Net sales- COGS

NET SALES = Gross sales – Returns


IMAGE 1.4


INTERPRETATION: Gross profit arrived by deducting COGS from Net sales. It is
evaluating the operational performance of the firm. In 2018, there is a considerable increase
in GP ratio as there is rise in “Other income” of the firm due to rise in miscellaneous income
from Rs. 160.56 to Rs. 10690.85, leading to increase in total income and subsequently in the
gross profit.


2. NET PROFIT RATIO: NET PROFIT/ NET SALES

YEAR NET PROFIT SALES RATIO
2018 4292.41 6706.79 0.64
2017 800.26 8221.23 0.09
2016 462.02 9925.61 0.05
2015 510.36 7648.73 0.07
2014 582.59 8298.01 0.07
TABLE 1.5


1.36
0.19 0.18 0.15 0.14
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2018 2017 2016 2015 2014
RATIO
YEARS
GP RATIO

20. IMAGE 1.5


INTERPRETATION: Net profit ratio is a useful tool to measure the overall profitability of the
business. A high ratio is indicating the efficient management of the affairs of business. There is a
increase in the ratio in year 2018 as the gross profit has increased due to increase in miscellaneous
income of the company.



3. OPERATING PROFIT RATIO: EBIT/ NET SALES

YEAR EBIT NET SALES RATIO
2018 12099.71 6706.79 1.80
2017 4581.84 8221.23 0.56
2016 4471.95 9925.61 0.45
2015 3517.13 7648.73 0.46
2014 3626.40 8298.01 0.44
TABLE 1.6

EBIT = Earnings before interest and tax

NET SALES = Gross sales – Returns


0.64
0.09 0.05 0.07 0.07
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2018 2017 2016 2015 2014
RATIO
YEARS
NP RATIO

21. IMAGE 1.6


INTERPRETATION: The operating profit margin ratio is indicating how much profit a
company is making after paying for variable costs of production such as raw materials,
employee cost, manufacturing expenses, etc. It is indicating such incomes that are generated
from core business activity.


4. OPERATING EXPENSES RATIO = OPERATING EXPENSES/ NET SALES

YEAR OPERATING
EXPENSES
NET SALES RATIO
2018 3716.94 6706.79 0.55
2017 4105.08 8221.23 0.50
2016 5226.69 9925.61 0.53
2015 3891.15 7648.73 0.51
2014 4672.91 8298.01 0.56
TABLE 1.7

OPERATING EXPENSES = Administrative expenses + Selling expenses
NET SALES = Gross sales – Returns


1.8
0.56
0.45 0.46 0.44
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2018 2017 2016 2015 2014
RATIO
YEARS
OPEARTING PROFIT RATIO

22. IMAGE 1.7

INTERPRETATION: The operating expense ratio (OER) is measuring what it the costs to
operate as compared to the income that is being generated. In 2016, there is increase in ratio
because manufacturing expenses has increased and also there is increase in net sales.



5. RETURN ON CAPITAL EMPLOYED = EBIT/ CAPITAL EMPLOYED


YEAR EBIT CAPITAL
EMPLOYED
RATIO
2018 12099.71 52801.23 0.23
2017 4581.84 53775.06 0.09
2016 4471.95 49332.85 0.09
2015 3517.13 51863.84 0.07
2014 3626.40 51528.16 0.07
TABLE
1.8

CE= Equity + long term debt

EQUITY= Equity share capital + Preference share capital + Reserves and surplus –
Miscellaneous losses (not yet written off)

0.55
0.5
0.53
0.51
0.56
0.47
0.48
0.49
0.5
0.51
0.52
0.53
0.54
0.55
0.56
0.57
2018 2017 2016 2015 2014
RATIO
YEARS
OPERATING EXPENSE RATIO

23. IMAGE 1.8

INTERPRETATION: ROCE is indicating how efficiently a company is generating profits
by comparing net operating profit to capital employed. In year 2018, there is an excess ratio
as there is considerable increase in “Other income” of the firm, leading to increase in total
income and subsequently in the EBIT.

B. Liquidity Ratios : It indicates the ability of firm to satisfy its short term obligations
as they become due for payment . It is associated by comparing current assets and
current liabilities. It includes the following ratios:

1. WORKING CAPITAL TURNOVER RATIO
2. CURRENT RATIO
3. QUICK RATIO


1. WORKING CAPITAL TURNOVER RATIO = NET SALES / WORKING
CAPITAL

YEAR Net sales Working capital RATIO
2018 6706.79 22810.77 0.29
2017 8221.23 22057.59 0.37
2016 9925.61 16202.44 0.61
2015 7648.73 23985.73 0.32
2014 8298.01 23405.06 0.35
TABLE 1.9

Working Capital= Current assets - Current liabilities

0.23
0.09 0.09
0.07 0.07
0
0.05
0.1
0.15
0.2
0.25
2018 2017 2016 2015 2014
RATIO
YEARS
ROCE

24. IMAGE 1.9

INTERPRETATION: A high turnover ratio is indicating that management is being
extremely efficient in using a firm's short-term assets and liabilities to support sales. In
year 2016 , there is increase in the ratio due to fall in Loans and advances in current assets
and increase in the net sales. In year 2018 ,ratio has fallen as there is fall in net sales of
the company.


2. CURRENT RATIO = CURRENT ASSETS/ CURRENT LIABILITIES


YEAR Current assets Current liability RATIO
2018 28739.67 5928.90 4.85
2017 29648.33 7590.74 3.91
2016 26136.59 9934.15 2.63
2015 33846.05 9860.32 3.43
2014 33929.70 10524.64 3.22
TABLE 1.10

0.29
0.37
0.61
0.32
0.35
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2018 2017 2016 2015 2014
RATIO
YEARS
WORKING CAPITAL TURNOVER RATIO

25. IMAGE 1.10



INTERPRETATION: The current ratio is indicating a rough estimate of a company’s
financial health. It is giving a sense of the efficiency of a company's operating cycle or its
ability to turn its product into cash. The ideal ratio should be 2:1, the company’s current ratio
is much higher as though the assets have decreased in 5 years but the liabilities has also
reduced. Therefore is recommended that the company should invest its currents assets in some
investments rather than keeping them spare.


3. QUICK RATIO = QUICK ASSETS/ CURRENT LIABILITY


YEAR Quick assets Current liability RATIO
2018 8891.82 5928.90 1.50
2017 9549.54 7590.74 1.26
2016 9302.35 9934.15 0.94
2015 16235.58 9860.32 1.65
2014 15418.50 10524.64 1.46
TABLE 1.11

QUICK ASSETS = Current assets- (inventory + prepaid expenses)


4.85
3.91
2.63
3.43
3.22
0
1
2
3
4
5
6
2018 2017 2016 2015 2014
RATIO
YEARS
CURRENT RATIO

26. IMAGE 1.11


INTERPRETATION: The quick assets are those which are convertible in cash quickly. The
inventory and prepaid expenses are removed as they take comparatively more time to convert
into cash and ideal ratio of quick ratio is 1:1. From year 2014 to 2016, it has increased and
decreased due to rise and fall in “short term loans and advances” in current assets.



C. SOLVENCY RATIO/ CAPITAL STRUCTURE RATIO/
LEVERAGE RATIOS : These ratios indicate the long term solvency position
of the firm. Solvency has two aspects – firstly ability to repay the principal and
secondly ability to pay the interest. It includes the following ratios :

1. Debt- Equity ratio
2. Debt- Asset ratio
3. Interest coverage ratio





1. DEBT-EQUITY RATIO = LONG TERM DEBT/ SHAREHOLDER’ EQUITY

YEAR LONG TERM
DEBT
SHAREHOLDER’S
EQUITY
RATIO
1.5
1.26
0.94
1.65
1.46
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2018 2017 2016 2015 2014
RATIO
YEARS
QUICK RATIO

27. 2018 17490.79 35310.44 0.50
2017 29202.23 24572.83 1.19
2016 25263.77 24069.08 1.05
2015 24494.94 27368.90 0.89
2014 22334.07 29194.09 0.77
TABLE 1.12

LONG TERM DEBT = Debentures + Mortgage Loans + any other long term loans

SHAREHOLDER’S EQUITY = Equity share capital + Preference share capital + Reserves
and surplus – Losses (not yet written off)



IMAGE 1.12

INTERPRETATION: A high Debt - Equity Ratio indicates that outsiders’ claims are more
than owners’ claims. In the year 2018 ,the ratio has reduced as secured loans have been
reduced considerably and also there is increase in total reserves.


2. DEBT – ASSET RATIO = TOTAL DEBT/ TOTAL ASSETS

YEAR TOTAL DEBT TOTAL ASSETS RATIO
2018 23419.69 54312.11 0.43
2017 36792.97 56363.54 0.65
2016 35197.92 51795.19 0.68
0.5
1.19
1.05
0.89
0.77
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2018 2017 2016 2015 2014
RATIO
YEARS
DEBT-EQUITY RATIO

28. 2015 34355.26 56402.01 0.61
2014 32858.71 54000.30 0.61
TABLE 1.13
TOTAL DEBT = Long term debt + Current Debt ( Current liabilities )

TOTAL ASSETS = Fixed Assets + current assets


IMAGE 1.13


INTERPRETATION: The debt to assets ratio indicates the proportion of a
company's assets that are being financed with debt, rather than equity. The ratio is used to
determine the financial risk of a business. In the year 2018 ,the ratio has reduced as secured
loans have been reduced considerably.



3. INTEREST COVERAGE RATIO = EBIT / INTEREST

YEAR EBIT INTEREST RATIO
2018 12099.71 2950.71 4.10
2017 4581.84 2979.82 1.53
2016 4471.95 2679.80 1.67
2015 3517.13 2303.86 1.53
2014 3626.40 2463.25 1.47
TABLE 1.14
0.43
0.65
0.68
0.61 0.61
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2018 2017 2016 2015 2014
RATIO
YEARS
DEBT-ASSET RATIO

29. IMAGE 1.14

INTERPRETATION : This ratio indicates the number of times operating profits is more
than the interest. Higher the ratio, higher is the company’s ability to pay interest to
creditors. In the year 2018 ,it is increased due to increase in “Other income” leading to
increase in operating profit.

D. EFFICIENCY RATIOS / ACTIVITY RATIOS :
These ratios are based on sales as sales is an indication of performance or efficiency. They
measure sales in relation to various assets and liabilities. Generally, higher the ratio, higher
is the efficiency. This ratio includes the following:

1. Inventory turnover ratio
2. Debtors turnover ratio
3. Assets turnover Ratio

1. INVENTORY TURNOVER RATIO = COGS / AVERAGE INVENTORY

YEAR COGS AVG
INVENTORY
RATIO
2018 2442.2 19847.85 0.12 Times
2017 6619.21 20098.80 0.33 Times
2016 8133.46 16834.24 0.48 Times
2015 6435.46 17610.47 0.37 Times
4.1
1.53
1.67
1.53 1.47
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2018 2017 2016 2015 2014
RATIOS
YEARS
INTEREST COVERAGE RATIOS

30. 2014 7134.89 18511.20 0.39 Times
TABLE 1.15
COST OF GOODS SOLD = Opening stock + purchases + direct expenses – closing stock
(Or ) Sales- Gross Profit
AVERAGE INVENTORY = (Opening stock + closing stock)/2


IMAGE 1.15

INTERPRETATION: The ratio is indicating the velocity with which the inventory is moving
in the business. It is showing how quickly inventory converted into cash and the number of
times stock is turned over (i.e. number of times stock is replenished in a year). In the year
2018 , ratio is reduced due to reduction in COGS .

2. DEBTORS TURNOVER RATIO: NET CREDIT SALES/ AVERAGE OR
TOTAL DEBTORS :


YEAR NET CREDIT
SALES
AVERAGE
DEBTORS
RATIO
2018 6706.79 1,285.79 5.22 Times
2017 8221.23 1,417.36 5.80 Times
2016 9925.61 3,416.93 2.90 Times
0.12
0.33
0.48
0.37
0.39
0
0.1
0.2
0.3
0.4
0.5
0.6
2018 2017 2016 2015 2014
RATIO
YEARS
INVENTORY TURNOVER RATIO

31. 2015 7648.73 1,586.40 4.82 Times
2014 8298.01 1,561.23 5.32 Times
TABLE 1.16
AVERAGE DEBTORS = (Opening Debtors + Closing Debtors)/2

IMAGE 1.16


INTERPRETATION : The ratio indicates the number of times debtors is turned over (i.e.
number of times payment is received in a year).In year 2016, the ratio is reduced as debtors
and the net sales , both have increased.

3. ASSETS TURNOVER RATIO = SALES / AVERAGE OR TOTAL
ASSETS
YEAR SALES TOTAL ASSETS RATIO
2018 6706.79 54312.11 0.12 Times
2017 8221.23 56363.54 0.15 Times
2016 9925.61 51795.19 0.19 Times
2015 7648.73 56402.01 0.14 Times
2014 8298.01 54000.30 0.15 Times
TABLE
1.17
TOTAL ASSETS = Fixed Assets + Current Assets
5.22
5.8
2.9
4.82
5.32
0
1
2
3
4
5
6
7
2018 2017 2016 2015 2014
RATIO
YEARS
DEBTOR TURNOVER RATIO

32. IMAGE 1.17

INTERPRETATION :This ratio is indicating the number of times the Sales is
compared to Total Assets. It shows the efficiency with which the Total Assets are being
used to generate sales.

BIBLIOGRAPHY AND ANNEXURES

A. WEB LINKS :

 www.dlf.in

 wikipedia.org

 economictimes.indiatimes.com

 www.ndtv.com

 MSRIM CAPITALINE



B. TEXT BOOKS :

 A textbook of accounting for management ( S MAHESHWARI)
0.12
0.15
0.19
0.14
0.15
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0.2
2018 2017 2016 2015 2014
RATIO
YEARS
ASSETS TURNOVER RATIO