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Cross Sectional Analysis

y Current Ratio = Current Assets/Current Liability4793612/3885809 = 1.233

Interpretation: A current ratio measures a firms ability to meet its short term obligation and

also shows the relationship between current assets and current liabilities. In the Co. the current

for this year is 1.233 times which shows that how 1.233 times Current assets are more than

that of current liabilities.

If we compare the results of the companys current ratio with the industrys current ratio than

the company is showing better position because companys current ratio is more than that of

industry current ratio

y Quick Ratio = Current assets - inventories/ Current Liabilities1844482/ 3885809 = 0.47

Interpretation: It is an indicator of a company's short-term liquidity. The quick ratio measures a

company's ability to meet its short-term obligations with its most liquid assets. The higher the

quick ratio, the better the position of the company. In this co. the quick ratio is 0.47 times

which means that its quick assets are 0.47 times more than that of its current liability.

If we compare the results of the company with the industry than the company is in worse

position because the companys quick ratio is less than that of industry ratio.

y Cash Ratio= cash/ current liabilities63263/ 3885809 = 0.016

Interpretation: It shows the relationship b/w cash and current liabilities. In this co. cash ratio is

used as a measure of company liquidity. It can therefore determine if, and how quickly, the

company can repay its short-term debt. In this co. the cash is 0.016 times more than that of the

current liability.

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If we compare the results of the with the industrys results than company is showing worse

position because the companys cash ratio is less than that of industrys ratio.

y Working Capital= current assets current liability4793612 3885809 = 907803

Interpretation: It shows the relationship b/w current assets and current liability. Its a measure

of both a company's efficiency and its short-term financial health. Positive working capital

means that the company is able to pay off its short-term liabilities. In this co. a working capital

is of 907803.

If we compare the results of the co. with the industry results than company is showing better

position because the companys working capital is less than that of industrys working capital.

y Debt Ratio= Total debts / total assets3967596 / 5743371 = 0.690

Interpretation: It shows the relationship b/w total debts and total assets. It measures a firms

ability to meet it long term obligations. The measure of this ratio gives an idea to the leverage

of the company along with the potential risks the company faces in terms of its debt-load. In

this co. the debt ratio is 0.690 which means that total assets are 0.690 times more than that of

total liability.

If we compare the results of the company with the industry ratio than the industry is showing

better position than the company because companys debt ratio is less than that of industry

debt ratio.

y Debt to Equity Ratio = Total debts / Total share holder equity3967596 / 1503979 = 5.221

Interpretation: It shows the relationship b/w total debts and Total share holder equity. It

indicates what proportion of equity and debt the company is using to finance its assets. In this

company the ratio is 5.221 which means that in this co. the total debts 5.221 is more than that

of total share holder equity.

If we compare the results of the co. with the industry results than the co. is showing worse

position because the company debt to equity ratio is more than that of industry debt to equity

ratio.

y Times Interest Earned = EBIT / Interest expense130419 / 85363 = 2 times

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Interpretation: It shows the relationship between operating profit/ebit and interst expense. It

indicates how many times a company can cover its interest charges on a pretax basis. In this co.

the times interest earned is 2 times.

If we compare the results of the company with the industry than the co. is showing worse

position because industry ratio is more than that of companys one.

y Fixed Asset Turnover : net sales / fixed assets11127551 / 918593 = 12 times

Interpretation: It shows the relationship b/w net sales and fixed asset. The fixed-asset turnover

ratio measures a company's ability to generate net sales from fixed-asset investments. In this

co. the fixed asset turnover is 12 times which shows that co. generates 12 times net sales fromfixed assets investments.

If we compare the results of the co. with the industry than the co. is showing better position

than industry because the fixed asset turnover is more than that of industry fixed asset turn

over.

y Total asset Turnover : net sales / total assets11271551 / 5743371 = 2 times

Interpretation: It shows the relationship b/w net sales and total assets. Asset

turnover measures a firm's efficiency at using its assets in generating sales or revenue. In this

co. a total assets turnover is 2 times which means that this co. generates 2 times revenue from

its assets.

If we compare the results of the co. with the industry ratio than the co. is showing worse

position because industry ratio is more than that of co.s total asset turn over.

y Gross Profit Margin: gross profit / net sales389481 / 11127151 = 0.035 or 3.5%

Interpretation: It shows the relationship b/w gross profit and net sales. It assess a firm's

financial health by revealing the proportion of money left over from revenues after accounting

for the cost of goods sold. In this co. the gross profit margin is 3.5% which means that 3.5%

money is more than net sales.

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If we compare the results of the company than the industry than the co. is showing worse

position because its gross profit margin is less tha that of industry one.

y Operating Profit Margin: operating profit / net sales(130419) / 11127551 = -0.011 or -1.1 %

Interpretation: It shows the relationship b/w operating margin and net sales. This ratio is used

to measure a company's pricing strategy and operating efficiency. Operating margin is a

measurement of what proportion of a company's revenue is left over after paying for variable

costs of production such as wages, raw materials, etc. It shows that in this co. operating profit

margin is (1.1)% which means that (1.1%) revenue is left.

If we compare the results of the company with the industry average than the co. is showing

worse position because its operating profit margin is less than that of industry ratio.

y Net Profit Margin: net profit / total assets(148069)/11127551= -0.013 or (-1.3 %)

Interpretation: It shows the relationship b/w net profit and total assets. It measures how much

amount of sales a company actually keeps in earnings. In this co. the net profit margin is (1.3%)

which means that (1.3%) amount of sales is kept by the company.

If we compare the results of the company with the industry than the co. is showing worse

position because its result is less than industry net profit margin.

y Return on asset : Net Profit/ total assets(148069) / 5743371 = (0.025) or (2.5%)

Interpretation: It shows the relationship b/w net profit & total assets. ROA gives an idea as to

how efficient management is at using its assets to generate earnings. In this co. the ROA is

(2.5%) and (2.5%) are being used by the co. to generates its profit.

If we compare the results of the co. with the industry averages than the co. is showing worse

position because its ROA is more than that of industry ROA.

y Return on Equity: net profit / total shareholder equity69923 / 1668055 = (0.984) or (9.84%)

Interpretation: It shows the relationship b/w net profit and total share holder equity. The

amount of net income returned as a percentage of shareholders equity. Return on

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equity measures a corporation's profitability by revealing how much profit a company

generates with the money shareholders have invested. In this co. the ROE is (9.84%) which

means a co. generates (9.84%) amount of money from shareholders investment.

If we compare the results of the co. with industry results than the co. is showing worse position

because its return on equity is less than that of industry ROE

.