CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

1) CURRENT RATIO:Current assets

Current ratio = -------------------------

Current liabilitiesYearCurrent AssetsCurrent liabilitiesRatio

2009-10

7353.64

1570.824.68140207

2010-11

3871.45

2246.551.723286818

2011-12

2384.932599.380.917499558

2012-13

3227.074655.50.69317367

2013-14

3735.525646.720.661538

Figure 1 : CURRENT RATIO

INTERPRETATION AND ANALYSISThe above table and diagram shows that the current ratio on FY year 2009-10 was 4.68 and then it dip to 1.33 in the FY 2010-11, further move downward to 0.92 and in the FY 2012-13 it dip down to 0.69 and finally in the FY 2013-14 it again moved down to 0.66. The bench mark current ratio for Infrastructure Industries is 2:1. The above table shows current ratio is less than 2. Over the year under study it has been observed that the company has not maintained favourable liquidity position and this can be treated as a unhealthy sign.

2) LIQUID RATIO:

Liquid assets

Liquid ratio = -----------------------

Liquid liabilities Quick Assets = Total Current Assets (minus) InventoryYearQuick AssetQuick LiabilitiesQuick ratio

2009-10

7058.591570.82

4.493570237

2010-11

3578.762246.55

1.593002604

2011-12

2084.64

2599.38

0.801975856

2012-13

2786.39

4655.5

0.59851573

2013-14

3466.01

5646.72

0.613809

Figure 2 : LIQUID RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the liquid ratio during the study period except in the FY 2011-12 to 2013-14 is more than the bench mark Liquid ratio (i.e.) 1:1.It reached the highest 4.49 in the FY 2009-10 and then in FY 2010-11 it came down to 1.59 and eventually went on decreasing to 0.61 in FY 2013-14.

This shows that the company is not enjoying credit worthiness. It is clear that the liquid ratio of the company is at an decreasing rate and it is not close to standard ratio and this can be treated as a unhealthy sign. So we can understand that the company is not in a position to meet the short term obligations.

3) ABSOLUTE LIQUIDITY RATIO:

Cash + bank +marketable securities

Absolute liquidity ratio = -----------------------------------------------------

Current liabilities

YearCash

and securitiesCurrent LiabilitiesRatio

2009-10

5652.9

1570.82

3.598693676

2010-11

2175.92

2246.55

0.968560682

2011-12

87.65

2599.38

0.033719579

2012-13

251.01

4655.5

0.05391687

2013-14

301.82

5646.72

0.05345

Figure 3 : ABSOLUTE LIQUID RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the absolute ratio for the study period FY 2009-10 to 2013-14. There is decrease in the absolute ratio. It was 3.60 in the FY 2009-10. In FY 2010-11 it decreased to 0.97.Further it decreased to 0.34 in FY 2011-12. Then in FY 2012-13 and FY 2013-14 it was 0.05

4) DEBT EQUITY RATIO:

Outsiders funds

Debt equity ratio = ------------------------------

Proprietors funds

YearOutsiders fundProprietors fundRatio

2009-10

4494.54

7873.28

0.570859921

2010-11

6114.25

9339.24

0.654683893

2011-12

5257.55

11686.96

0.449864635

2012-13

7526.13

11907.44

0.63205273

2013-14

4272.61

15152.19

0.28198

Figure 4: DEBT-EQUITY RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the debt equity relationship of the Reliance Infrastructure company during the study period. The Bench Mark Debt-Equity ratio is 2:1. During the FY 2009-10 it was 0.57 and then reached its highest in the next year and from there it began to slope downwards and ultimately came to 0.28 in the year 2013-14. In all the years the equity is more when compared with borrowings. Hence the company is maintaining its debt position.

5) PROPRIETARY RATIO:

Proprietors funds

Proprietary ratio = ---------------------------

Total tangible assets

YearProprietors fundTangible assetsRatio

2009-10

7873.28

2647.71

297.3618712

2010-11

9339.24

2806.35

332.7895665

2011-12

11686.96

3056.49

382.365393

2012-13

11907.44

3331.37

357.433728

2013-14

15152.19

3468.61

436.8375

Figure 5: PROPRIETARY RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows that the Proprietors fund ratio as on FY 2009-10 was 297.36 which gradually increased till FY 2013-14. This shows that the firm has good investment in fixed asset and favourable long term solvency position over the year under study.

6) FIXED ASSETS TURNOVER RATIO:

Net sales

Fixed assets turnover ratio = -------------------

Fixed assets

YearNet salesFixed assetsRatio

2009-10

4607.89

2873.71

1.603463815

2010-11

6575.25

3104.36

2.118069425

2011-12

7501.2

3636.5

2.062752647

2012-13

10958.79

3904.59

2.80664295

2013-14

10908.06

4079.41

2.673931

Figure 6: FIXED ASSET TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the fixed assets and sales. The sale is 1to 2 times more than the fixed assets from FY 2009-10 to 2009 -10. This indicates that fixed assets turnover ratio of the company is gradually increasing which is a healthy indication that less amount of money is tied up with fixed assets and thus fixed assets are effectively used to generate the sales.

7) WORKING CAPITAL TURNOVER RATIO:

Net sales

Working capital turnover ratio = ----------------------------

Net working capital

YearNet salesNet working capitalRatio

2009-10

4607.89

5782.82

0.796824041

2010-11

6575.25

1624.9

4.046556711

2011-12

7501.2

(214.45)(34.9787829)

2012-13

10958.79

(1428.43)

(7.67191252)

2013-14

10908.06

(1911.2)

(5.70744)

Figure 7: WORKING CAPITAL TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram indicates that working capital turnover ratio is negative. Generally a negative working capital is a sign of managerial efficiency in a business with low inventory and accounts receivable, which means they operate on an almost strictly cash basis.

8) TOTAL ASSETS TURNOVER RATIO:

Total assets

Total assets turnover ratio = ----------------------

Net assets

YearTotal assetsNet salesRatio

2009-10

12367.82

4607.89

2.684052788

2010-11

15453.49

6575.25

2.350251321

2011-12

16944.517501.2

2.258906575

2012-13

19433.57

10958.79

1.77333173

2013-14

19424.8

10908.06

1.780775

Figure 8: TOTAL ASSET TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the total assets to net sales. During all the study period years the relationship between sales to total assets is Low. The ratio increased from 2.68 (2009-10) to 1.78 (2013-14) due to the heavy rise in the sales.

9) CAPITAL TURNOVER RATIO:

Sales

Capital turnover ratio = ----------------------

Proprietors fund

YearNet salesProprietors fundRatio

2009-10

4607.89

7873.28

0.585256716

2010-11

6575.25

9339.24

0.704045511

2011-12

7501.2

11686.96

0.641843559

2012-13

10958.79

11907.44

0.92033132

2013-14

10908.06

15152.19

0.7199

Figure 9: CAPITAL TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the sales and proprietors funds. It indicates that the sales are in between 0.58 and 0.90 times less than the proprietor's funds. It shows the firms is not maintaining the better utilization of own funds.

10) Return on total assets:

Net profit

Return on total assets = ------------------- x100

Total assetsYearNet profit After TaxTotal assetsRatio

2009-10

650.34

12367.82

0.052583236

2010-11

801.45

15453.49

0.051862071

2011-12

1084.63

16944.510.064010703

2012-13

1138.88

19433.57

0.05860375

2013-14

1151.69

19424.8

0.05929

Figure 10: RETURN ON TOTAL ASSET

INTERPRETATION AND ANALYSIS

The above table and figure as on FY 2010 remain modest at 6% indicating that the long term fixed asset investments are not yet effectively managed to generate net income.

11) GROSS PROFIT RATIO:

Gross profit

Gross profit ratio = ----------------------------------- x 100

Net sales

YearGross ProfitNet salesRatio

2009-10

4607.89

4607.89

40.4825202

2010-11

2028.1

6575.25

30.84445458

2011-12

2530.7

7501.2

33.7372687

2012-13

3045.83

10958.79

27.7934881

2013-14

2949.67

10908.06

27.0412

Figure 11: GROSS PROFIT RATIO

Interpretation and Analysis

The above table and diagram shows the relationship between the gross profit and net sales in percentage. During 2009-10 the gross profit position was 40.48% and in the very next year it slashed down to 30.84% and again raised to 33.73% and finally reached to 27.04% in the year 2013-14. However it can be noticed that sales are increasing but gross profit is not increasing proportionately every year. This show there is low efficiency in managing purchases, production, labour, sales and moderate amount is available to meet the other expenses.

12) NET PROFIT RATIO:

Net profit

Net profit sales = ----------------- x 100

Net sales

YearNet ProfitNet salesRatio

2009-10

650.34

4607.89

14.11361816

2010-11

801.45

6575.25

12.18889016

2011-12

1084.63

7501.2

14.45941983

2012-13

1138.88

10958.79

10.3923882

2013-14

1151.69

10908.06

10.55816

Figure 12: NET PROFIT RATIO

Interpretation and Analysis

The above table and diagram shows the relationship between net profit and net sales. During 2009-10 it was 14.11% on sales and in2010-11 it decreased to12.18%. There is an further in percentage of 10.55 in 2013-14 The sales of the organization are also increasing and the profit of the organization is also increasingly proportionately .This shows Reliance infrastructure limited have good control over direct and indirect cost and they have large amount available to meet non-operating expenses/losses.

13) Return on shareholders fund Net profit after Interest and TaxReturn on shareholders fund = -------------------------------------- X 100

Shareholders fundYearProfit After TaxProprietors fundRatio

2009-10

650.34

7873.28

8.260089823

2010-11

801.45

9339.24

8.581533401

2011-12

1084.63

11686.96

9.280685482

2012-13

1138.88

11907.44

9.56444038

2013-14

1151.69

15152.19

7.600815

Figure 8: RETURN ON SHAREHOLDER'S FUND

Interpretation and Analysis

The above Table and Diagram shows that there is a fluctuation in this ratio and this is due to fluctuating debt capital and interest burden on the company. It is evident from this that the percentage return on Owners fund is between 7-9 %.a) 14) ADMINISTRATIVE AND SELLING EXPENSES RATIO:

Administrative and Selling expenses

Administrative expenses ratio = ----------------------------------- x 100

Sales

YearAdministration&

Selling expensesNet salesRatio

2009-10

543.41

4607.89

11.79303325

2010-11

664.99

6575.25

10.1135318

2011-12

847.3

7501.2

11.29552605

2012-13

1277.02

10958.79

11.6529288

2013-14

1040.68

10908.06

9.540468

Figure 14: ADMINSTRATION AND SELLING EXPENSE RATIO

Interpretation and AnalysisThe above table and diagram shows the relationship between the administration and selling expenses and sales in percentage. The administration and selling expenses during 2009-10 is very high and gradually decreased to 9.54 in year 2013-14.This shows there is a good control on expenditure and may be one of the reasons to net profit during the study years.

15) Cost of energy expense ratioCost of energy

Expenses ratio = ------------------------------------------ x 100

Sales

YearCost of EnergyNet salesRatio

2009-10

1087.56

4607.89

23.60212592

2010-11

1532.43

6575.25

23.30603399

2011-12

2487.69

7501.2

33.16389378

2012-13

4253.99

10958.79

38.8180629

2013-14

3321.94

10908.06

30.45399

Figure 15: COST OF ENERGY EXPENSE RATIO

Interpretation and AnalysisThe above table and figure show that the cost of energy and net sales are increasing gradually indicating that there is good control on the expenditure and ultimately resulting in higher productivity.

16) Cost of Fuel RatioCost of Fuel

Expenses ratio =

------------------------------------ x 100

SalesYearCost of fuelNet salesRatio

2009-10

812.1

4607.89

17.62411863

2010-11

921.27

6575.25

14.01117828

2011-12

1015.52

7501.2

13.53810057

2012-13

1166.78

10958.79

10.6469784

2013-14

1219.83

10908.06

11.18283

Figure 16: COST OF FUEL EXPENSE RATIO

Interpretation and AnalysisThe above table and figure shows that As on FY 2010 the Cost of fuel to sale , ratio is 11.18 as compared to FY 2009-10 i.e. 17.62 indicating that increasing in the net sales is not proportionate with increasing cost of fuel as the ratio is dipping. This shows that the company has good control over the cost of fuel over the study period.

17) Cost of tax Ratio Cost of Tax

Expenses ratio =

------------------------------------ x 100

Sales

YearCost of TaxNet salesRatio

2009-10

114

4607.89

2.474017392

2010-11

124.26

6575.25

1.889814076

2011-12

131.58

7501.2

1.754119341

2012-13

152.96

10958.79

1.39577453

2013-14

154.13

10908.06

1.412992

Figure 17: COST OF TAX EXPENSE RATIO

Interpretation and AnalysisThe above table and figure show that the cost of tax and net sales are increasing proportionately indicating that there is good control on the expenditure and ultimately resulting in higher productivity. From FY 2005 to FY 2010 the ratio are marginally varied and remained more or less close to 1.50.18) Expenditure on EPC ratio

Expenditure on EPC

Expenses ratio =

------------------------------------ x 100

Sales

YearExpenditure on EPCNet salesRatio

2009-10

728.84

4607.89

15.81721786

2010-11

1969.19

6575.25

29.94851907

2011-12

1335.71

7501.2

17.80661761

2012-13

2339.23

10958.79

21.345696

2013-14

3262.49

10908.06

29.90898

Figure 18: EXPENDITURE ON EPC EXPENSE RATIO

Interpretation and AnalysisThe above table and figure shows that as on FY 2010 the Expenditure on EPC ratio, had increased as against FY 2009 on account of substantial increase in the Sales.