ratios of tata teleservices

7/31/2019 Ratios of Tata Teleservices

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1. Liquidity Ratios of Tata Teleservices-Table: 1

CURRENT ASSET At March31. 2011

Rs.

Inventory 353981303.44

Sundry Debtors 85516779.40

Loans and advances 1279541364.24

Cash in hand 943530.07

Cash at bank 1916215508.11

Total 3636197482.26

Table: 2

CURRENT LIABILITIES At March31. 2011

Rs.

Sundry Creditors 138784778.42

Other Liabilities 108686563.39

Provision for taxation 1063000000.39

Proposed dividend 634300.00

Dividend tax 107768.00

Total 1311213409.81

Computation of Current and Quick Ratio is as follow:-

a.) Current Ratio.Current assets

Current ratio=

Current Liabilities


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Table: 3

Particulars As on

March31.2011

Current assets 3636197482.26

Current liabilities 1311213409.81

Current ratio 2.78

Interpretation-

Standard ratio is 2:1 and Tata Teleservices ltd.s ratio is 2.78:1. It is better than the standard

ratio.

0

5

10

15

20

25

30

35

40

Current asset Current Liabilities

x

100000

000


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b.)Quick ratio/Acid test ratioLiquid asset

Quick ratio/Acid test ratio =

Current Liabilities

Table: 4

Particulars At March31. 2011

Rs.

Liquid assets 3282216179

Current liabilities 1311213410

Quick/Acid Test Ratio 2.50

Interpretation-

Tata Teleservices ltd.s Quick ratio/ acid test ratio at March 31.2011 is 2.50.

0

5

10

15

20

25

30

35

Liquid assets Current liabilities

x

100000000


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2. Solvency Ratios:

a) Debt Equity RatioLong term loans

Debt equity ratio=

Shareholders funds or Net worth

Long term loans= Debentures, mortgage loan, bank loan, loans from financial institutions and

public deposits etc.

Shareholders Fund=Equity share capital, preference share capital, share premium, general

reserves, capital reserves credit balance of profit & loss accountfictitious assets.

Table: 5


Rs.

Long term loan 426398140.72

Equity share capital 634300

Reserves & surplus 2284393451.33

Shareholders fund 2285027751.33

Debt equity ratio 0.187

Interpretation-

This ratio expresses the relationship between debt and equity and Tata Teleservices ltd.s Debt

equity ratio is 0.187.

0

20

40

Long term fundsShareholder's fund

x

100000000


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b) Debt ratio-Long term loans

Debt ratio =

Capital Employed

Table: 6


Rs.

Long term debt 426398140.72

Capital employed 2285027751.33

Debt ratio .187

Interpretation-

This ratio refers to Tata Teleservices ltd.s ratio of long term debt to total of external and internal

funds, and Tata Teleservices ltd.s Debt. Ratio at March 31.2011 is 0.187.

0

5

10

15

20

25

Long term Debt. Capital employed

x

100000000


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c) Proprietary ratio-Shareholder Fund

Proprietary =

Capital Employed

Table: 7


Rs.

Shareholder fund 2285027751.33

Capital employed 2285027751.33

Proprietary ratio 1:1

Interpretation-

Proprietary ratio refers the proportion proprietors funds to net, and after calculation ofTata

Teleservices ltd.s Proprietary Ratio at March 31.2011 is 1:1.

0

5

10

15

20

25

Shareholders Fund Capital employed

x

100000000


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d) Total assets to Debts ratio-Total assets

Total asset to debts ratio=

Long term Loans

Table: 8


Rs.

Total assets 4027822953.23

Long term loans 426398140.72

Total asset to debt ratio 9.45

Interpretation-

According to above statement we can say that Tata Teleservices ltd.s has total asset is greater

than long term debts, and its total asset to debt ratio is 9.45.

0

5

10

15

20

25

30

35

40

45

Total asset Long term debts

x

100000000


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e) Interest coverage ratio-

Net profit before interest and tax

Interest coverage ratio =

Fixed interest Charges


Rs.

Net profit before interest & tax 730831826.17

Fixed interest charges 0.00

Interest coverage ratio

Interpretation-

This ratio is also termed as Debt services ratio. After the calculation there is found that TTSL

has do not fixed interest charges in this year, so the Interest coverage ratio of this year is Infinity.

0

1

2

3

4

5

6

7

8

Net profit before

interest & tax

Fixed interest charges

x

100000000


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3. Turnover Ratio-

a) Stock turnover ratio-Cost of goods sold

Stock turnover ratio =

Average stock

Where average stock refers to arithmetic average of opening and closing stock and cost of goods

sold is the difference between net sales and gross profit.

Table: 10


Rs.

Cost of goods sold 1599614352.18

Average stock 82585520.03

Stock turnover ratio 19.36 times

Interpretation-

According to above statement we can say that stock turnover ratio of Tata Teleservices Ltd. is

19.36 times in March 2011.

0

5

10

15

20

Cost of goods sold Average stock

x

100000000


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b) Debtors turnover ratio-Net Credit sales

Debtors turnover ratio =

Average accounts receivables

Where average accounts receivable = (opening debtors and B/R + closing debtors and B/R)/2

Note- debtors have been taken before making any provision for bad and doubtful debts.

Table: 11


Rs.

Net credit sales 0Average debtors 0

Debtors turnover ratio 0 times

Interpretation-

Higher the debtors turnover ratio, the better it is for the organization but Tata Teleservices ltd.s

Debtor turnover ratio is zero.

0

0.2

0.4

0.6

0.8

1

Net credit sales Average debtors


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C) Average collection period-12 months or 365 days

Average collection period =

Debtor turnover ratio

Table: 12


Rs.

Days in year 365

Debtors turnover ratio 0

Average collection period 0

Interpretation-

This ratio indicates the time with in which the amount is collected from debtors and bills

receivable. After our research we calculated that at March 2011 Tata Teleservices ltd.s Average

collection period is Zero

0

50

100

150

200

250

300

350

400

Days in year Debtors turnover ratio


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D) Creditors turnover ratioNet credit purchases

Creditors Turnover ratio =

Average Account Payable

Where average accounts payable = (Opening creditors and opening bills payable + closing

creditors and closing bills payable)/2

Table: 13


Rs.

Net credit purchases 34390129.25

Average creditors 14723315.65

Creditors turnover ratio 7.28 Times

Interpretation-

The creditors turnover ratio ofTata Teleservices ltd.s at March 2011 is 7.28 times.

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

Net credit purchases Average creditors


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E) Average payment period-12 months or 365 days

Average payment period =

Creditors turnover ratio

Table: 14


Rs.

Days in year 365

Creditors turnover ratio 7.28

Average payment period 50.13 days

Interpretation-

The Tata Teleservices ltd.s Average payment period is aprox. 50 days.

0

50

100

150

200

250

300

350

400

Days in year Creditors turnover ratio


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F) Working capital turnover ratio-Cost of goods sold

Working capital turnover ratio =

Working Capital

Table: 15


Rs.

Cost of goods sold 1599614352.18

Working capital 2109184779.39

Working capital turnover ratio 0.76 times

Interpretation-

The working capital turnover ratio ofTata Teleservices ltd.s is 0.76 times.

0

5

10

15

20

25

Cost of goods sold Working capital

x

100000000


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4.) Profitability Ratios-

A.) Gross profit ratio-

Gross Profit

Gross profit ratio = * 100

Net Sales

Table: 16


Rs.

Gross profit 905212031.58

Net sales 2504826383.76

Gross profit ratio 36.14%

Interpretation-

Gross profit ratio as a percentage of sales is compounded to have an idea about gross margin.

And Tata Teleservices ltd.s Gross profit ratio of this year is 36.14%.

0

5

10

15

20

25

30

Gross profit Net sales

x

100000

000


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B) Operating Ratio-Cost of sales + operating expenses

Operating ratio = * 100

Net Sales

Table: 17


Rs.

Cost of operation 1934971265.38

Net sales 2504826383.76

Operating ratio 77.29%

0

5

10

15

20

25

30

Cost of operation Net sales

x

100000000

ratios of tata teleservices

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