PROJECT REPORT

ON

“A Study On Ratio Analysis”

At

ARBRO Pharmaceuticals Private Limited

FOR THE PARTIAL FULFILLMENT OF THE DEGREE OF

“MASTER OF BUSINESS ADMINISTRATION”

TO

Guru Gobind Singh Indraprastha University, Delhi

SUBMITTED TO:- SUBMITTED By:-

Mrs Mansi Saxena Disha Panwar

MBA 3rd SEM

ROLL NO-02015103917

MANAGEMENT EDUCATION AND RESEARCH INSTITUTE

New Delhi- 110058

2017-2019

1
 ACKNOWLEDGMENT

It is my greatest pleasure to acknowledge sincere gratitude towards Dr. Deepak Bhanot(Vice

President of Training & Development) who gave me a good opportunity to do my project

inthe ‘ARBRO Pharmaceuticals Private Limited’.

I am also grateful to Mr.Satish Gupta(Accounting Manager), Rajendra Singh and other

officers who are working in accounts department for their valuable advice, cooperation and

support in completion of my project.

I am thankful to my mentor Mrs. Mansi Saxena madam for helping and guiding me to make

this Project.

I am also thanks to MERI College who helped me to making this project.

Regards

Disha Panwar

2
 Declaration:

I hereby declare that the project report entitled “Report On Ratio Analysis” submitted in
partial fulfilment of the requirements for the degree of the Masters of Business
Administration is my original work and not submitted for the award of any other degree,
diploma, fellowship or any other similar title or prizes. I would like to categorically mention
that all the information has been collected, analysed and known for the project is entirely the
authentic possession of mine.

The assistance and help received during the course of investigation have been fully
acknowledged.

Disha

MBA

02015103917

3
 INDEX

Sr. Page
Particulars Number
Number

1 Need for the Study 5

2 Executive Summary 6

3 Company Profile 7 – 16

4 Research Methodology 17-34

5 Data Collection And Interpretation 35-59

6 Findings 60 – 62

7 Suggestions And Conclusion 63 – 65

8 Limitations 66 – 67

9 Bibliography 68

4
 NEED FOR THE STUDY:

 The study has great significance and provides benefits to various parties whom

directly or indirectly interact with the company.

 It is beneficial to management of the company by providing crystal clear picture

regarding important aspects like liquidity, leverage, activity and profitability.

 The study is also beneficial to employees and offers motivation by showing how

actively they are contributing for company’s growth.

 The investors who are interested in investing in the company’s shares will also get

benefited by going through the study and can easily take a decision whether to invest

or not to invest in the company’s shares.

5
 EXECUTIVE SUMMARY:

I am Disha Panwar, a student of MBA(2017-19) batch studying in M.E.R.I affiliated to

GGSIPU university. Summer Training was undertaken with the ARBRO

Pharmaceuticals Private Limited, Kirti Nagar.

This project is specially designed to understand the subject matter of Financial

Statement Analysis through various ratios in the company. This project gives us

information and report about company’s Financial Position. Throughout the project the

focus has been on presenting information and comments in easy and intelligible manner.

The purpose of the training was to have practical experience of working in an

organization and to have exposure to the various management practices in the field of

Finance. This training has also given me an on the job experience of Financial

Management.

This project is very useful for those who want to know about company and financial

position of the company.

6
Company
Profile

7
 INTRODUCTION OF COMPANY

Arbro Pharmaceuticals Private Limited is a Private incorporated on 28 June 1985. It is

classified as Non-govt company and is registered at Registrar of Companies, Delhi. Its
authorized share capital is Rs. 19,900,000 and its paid up capital is Rs. 17,787,500.It is
inolved in Manufacture of other chemical products

Arbro Pharmaceuticals Private Limited's Annual General Meeting (AGM) was last held on
30 September 2016 and as per records from Ministry of Corporate Affairs (MCA), its balance
sheet was last filed on 31 March 2016.

Directors of Arbro Pharmaceuticals Private Limited are Vinod Kumar Chhabra, Vijay Arora,
Saurabh Arora and Sunil Kumar.

Arbro Pharmaceuticals Private Limited's Corporate Identification Number is (CIN)

U24232DL1985PTC021362 and its registration number is 21362.Its Email address is
arbro@arbropharma.com and its registered address is 6/14,KIRTI NAGAR
INDUSTRIALAREA,NEW DELHI DL 000000 IN ,

Company Details

CIN U24232DL1985PTC021362

Company Name ARBRO PHARMACEUTICALS PRIVATE

LIMITED

Company Status Active

RoC RoC-Delhi

Registration 21362
Number

Company Category Company limited by Shares

Company Sub Non-govt company

8
CIN U24232DL1985PTC021362

Category

Class of Company Private

Date of 28 June 1985

Incorporation

Age of Company 33 years, 2 month, 4 days

ABOUT THE COMPANY

ARBRO PHARMACEUTICALS PRIVATE LIMITED, a tested & trusted name in Indian

pharmaceutical Industry having more than 25 years of experience in manufacturing and
exporting of pharmaceutical formulations , trading of raw materials and Research &
Development for pharmaceutical Industry

Dedicated to provide best quality products in pharmaceutical, bio-technology & healthcare

Industry, Arbro is at paramount & has strong presence in exports, generic formulations,
ethical range of products, institutional & government supplies as well as recognized as
Government approved R & D facility by Department of Science and Technology,
Government of India.

Our MISSION is to provide humanity as a whole with a wide choice of cost effective,
quality products and services for the improvement of health and treatment of medical
conditions.

Our VISION is to product innovation and technology upgradation thereby strengthening our
position to strive for leadership in pharmaceutical and allied services.

Established in 1985 by the chairman of the group Mr. Vijay Kumar Arora with the long
term objective and high corporate values that includes:

“Care for Quality Cure for All”

 To provide quality products at competitive prices without

compromising regulatory requirements.
 Foresight and vision with a great source of motivation
 Strong emphasis on quality since inception

9
  Advanced in-house quality control setup with capability
to support the Industry globally
 To provide clinical & analytical services with excellent
quality.

We have state-of-the-art facility for the manufacturing of pharmaceutical formulations .We

follow revised WHO GMP guidelines that have been certified & accredited for Good
Manufacturing Practices (GMP). We have Export House Status, accorded by Ministry of
Commerce, Govt. of India. We have separate division for Human as well
as Veterinary segments. We have achieved new heights in manufacturing of diverse range of
products such as capsules, tablets, dry syrups, oral powders and oral liquids in different
therapeutic segments and dietary supplements.

The unit has been established with the aim to provide high quality, cost effective medicines to
suffering masses for domestic, semi-regulated markets and rest of the world. All the key
operations have been assigned to highly qualified full time professionals. The company is
well-respected in the pharmaceutical market for its reliable products, services and for quality
of personnel.

Arbro group has two well equipped and state of the art laboratories and world class R & D
facilities with a pool of experienced professionals, scientists and medical professionals to
produce the most advance range of safe, effective and affordable medicines.

Manufacturing facilities at Arbro Pharmaceuticals are in accordance with WHO GMP

standards. Arbro Pharmaceutical Ltd. is accredited with WHO GMP and ISO 9001:2008
certification. Arbro specialize in wide gamut of therapeutic segments and nutritional
supplement for Human Division, including:

– Antibiotics

–Anti Uclerant

-Anti- Fungal

-Anti Hisdaminics

-Anti- Viral

-Calcium Channel brokers

-Analgesics/ Anti-inflammatory

-Haematinics

10
Arbro has also set up Animal Health Division, which primarily manufacture feed
supplements & pharmaceuticals for this segment. At present is strongly positioned in several
states in India & are on the mission to expand market in domestic & International arena.

ARBRO Consumer Wellness:

We are delighted to welcome you to our new division “Consumer Wellness” which will
look after the marketing and sales of our innovative products.For last 30 years Arbro
Pharmaceuticals gathered an exceptional expertize in Research and Development. With our
fully owned subsidiaries “Arbro Analytical Division” and “Auriga Research” we are
amongst top Indian Pharmaceutical Research and drug testing houses.

Growth is the virtue of nature and so of us. With our indigenously developed formulation we
decided to forward integrate and start structured marketing. This inspired us to create
“Consumer Wellness Division” under the visionary leadership of young and dynamic
researcher Dr. Saurabh Arora who has been at the helm of Arbro Analytical Division for
more than 10 years. With this creation our intentions are to redefine the market by applying
modern science to traditional knowledge.

At “Arbro Consumer Wellness Division” we make great things happen. With 30 years of
research backup and hard work of more than 300 scientists we have always endeavored to
bring something new to the table. In the same spirit Dr. Saurabh Arora has got breakthrough
in the enhanced Bio-availability of phyto-derivatives by modification of Drug Delivery that
is “Self-Nano Emulsifying System”. We have been awarded the US Patent for this and
about to get an Indian patent as well.

The marketing and sales team at “Arbro Consumer Wellness” will enable us reach millions of
people around and bring health and happiness in their lives.

Brand
SNEC-30 is “Self Nano Emulsifying Curcumin 30mg” is our original patented formulation
which is the highest bio-available form of phyto-derivative Curcumin. This formulation is
based on Nano Technology and knows no barriers. Other simple curcumin formulations get
trapped in the intestine and hepatic first pass system and fail to achieve the desired results.
SNEC-30 by its Self Nano Emulsifying properties does not get trapped in the Intestine and
reaches directly into the Lymphatic system bypassing the Hepatic First pass system making it
the highest Bio-Available Curcumin compound. Radio Labelled studies show that it crosses
even BBB and reaches to even the soft tissues in the extremities. This enables the SNEC-30
to work wonders at very low doses.

More than 4000 research papers published on Curcumin in last 5 years suggest it works in
multi therapeutic domains. It is a very good chemo and radio protective, several times more
potent analgesic and anti-inflammatory than many available painkillers, an anti-oxidant,
Immuno-modulator and so on.

11
With this brand we intend to give a powerful contrivance to the millions of Doctors in their
practice for bringing smile on the face of their patients.

Quality:

At Arbro we believe in “Excellence through Quality”

Arbro maintains strict quality parameters for the manufacturing and distribution of products.

We have independent Corporate Quality Assurance Department responsible for quality

affairs.

Achieved head of state position through our supreme levels of quality. We believe to deliver
highest level of quality and customer satisfaction. ISO 9001:2008 Certification and ISO / IEC
17025:2005 Accreditation explain our efforts to achieve maximum quality level. Quality
Assurance is a measure of the degree of sophistication of managerial, scientific and technical
tools used in the plan and execution of product process of any industry. In the pharmaceutical
industry QUALITY is the most fundamental task of Total Quality Management. We at Arbro
are committed to ensure that every product we manufacture and distribute meets with and
conform over its shelf life to internationally accepted standards of quality, purity, efficacy
and safety. Arbro quality focus encompasses all areas of operation – from procurement of the
best raw materials, to optimum manufacturing technology, to precise delivery of the
customer’s requirements – thus ensuring a rapid access of both domestic and global markets.
All our systems are well documented and are implemented by an expert trained staff with a
line of reporting that is independent of manufacturing.

We have state of the art laboratory with the advanced infrastructure and procedures to support
a stringent quality policy. At our manufacturing site, the latest analytical instruments and
firmly monitored quality assurance and quality control systems ensures consistent quality of
our products.There is regular validation of processes, test methods, water and environment, as
well as periodic calibration of all instruments, to guarantee product output of consistent top
quality. Vendor evaluation and selection is carried out as per stringent quality, product,
manufacturing, service and delivery parameters to ensure the highest quality raw materials.
The Quality Assurance Department accomplished by qualified personnel, constantly monitors
quality parameters and performing systematic sampling and testing at every stage from raw
materials, through each process of intermediate and finished products. A full fledged Quality
Control Laboratory which follows Good Laboratory Practices and incorporates the most
modern testing equipment, in order to perform the stringent quality analytical tests prescribed
by different national and International Pharmacopoeia.

12
Products:

Arbro Pharmaceuticals Limited has a huge product basket includes: Branded and Generic
Formulations covering majority of therapeutic segments for all oral dosage forms.

Arbro is a manufacturer of pharmaceutical formulations mainly Human and Veterinary use.

At present Arbro is in the process of consolidation of product portfolio in selected segment

and are looking to further strengthen its offerings. Arbro is also concentrating its efforts to
build and enhance portfolio in the chronic health, nutraceutical and food segment, thus
creating a healthy balance of both acute and chronic therapies.

 More than 700 formulations

 Generics
 Branded Generics
 NDDS

Therapeutic Categories

 Antibiotics
 Ami Tubercular
 Anti Epileptic
 Antacid
 Anti Diabetic
 Anti Malarial
 Anti Histaminic
 Cardio Vascular
 Anti Diarrhea
 Laxative
 Anti Migraine/ Anti Vertigo
 Cough Medicine
 Analgesics/ Antipyretics
 Anti Asthmatic
 Psychotrapic
 Anti Emetic/ Anti Nausea
 Steroids
 Minerals/ calcium

13
Director Details

DIN Director Name Designation

00554990 VINOD KUMAR CHHABRA Director

00555040 VIJAY ARORA Managing Director

00555403 SAURABH ARORA Director

00555451 SUNIL KUMAR Wholetime Director

Functions of Finance & Accounts Department of APL:

Accounting function is necessary is a necessary input into the finance function

i.e. accounting is a sub-function of finance. Accounting generates information \ data relating

to operations/ activities of the firm. The end product of accounting constitutes financial

statements such as Balance sheet, The Income Statement and The Statement of changes in

Financial position/ sources and uses of funds statement/ Cash flow statement. The

information contained in these statements and reports assists Financial Managers in assessing

the past performance & future direction of the firm and meeting the legal obligation, such as

payment of taxes and so on. Thus Accounting and Finance are functionally closely related.

14
 STRUCTURE OF ACCOUNTS DEPERTMENT

COMMERCIAL

MANAGER

ACCOUNTS

HEAD

JUNIOR OFFICER JUNIOR OFFICER JUNIOR OFFICER

Various Sections in Accounts Department :

1. Financial:

Funds are arranged from head office for the payment of expenses, engineering bills,

transportation bills etc. Reports are maintained related to operating expenses that means total

expenses during the month like, salary, wages, freight, welfare etc.

2. Excise:

Accounts of modvat received and payment of the central excise duty on the finished goods

dispatches.

3. GST:

Accounts of GST received on purchase and payment of GST on finished goods dispatches.

15
The various duties and responsibilities of Accounts department:

1. Recording day-to-day operating expenses

2. Excise duty analysis

3. Transportation bill passing

4. Engineering bill passing

5. Powder coating bill passing

6. Day-to-day cash transactions

7. MIS Activities

16
 RESEARCH

METHODOLOGY

17
 OBJECTIVES OF STUDY

The major objectives of the resent study are to know about financial strengths and weakness

of ARBRO Pharmaceuticals Private Limited through FINANCIAL RATIO ANALYSIS.

The main objectives of resent study aimed as:

 To evaluate the performance of the company by using ratios as a yardstick to measure

the efficiency of the company.

 To understand the liquidity, profitability and efficiency positions of the company

during the study period.

 To evaluate and analyze various facts of the financial performance of the company.

To make comparisons between the ratios during different periods.

Secondary Objectives:

 To study the present financial system at ARBRO Pharmaceuticals Private Limited.

 To determine the Profitability, Liquidity Ratios.

 To simplifies and summarizes a long array of accounting data and makes them

understandable.

18
Research methodology is a way to systematically solve the research problem. it may be

understood as a science of studying how research is done scientifically. So, the research

methodology not only talks about the research methods but also considers the logic behind

the method used in the context of the research study.

Research Design:

Descriptive research is used in this study because it will ensure the minimization of bias and

maximization of reliability of data collected. The researcher had to use fact and information

already available through financial statements of earlier years and analyze these to make

critical evaluation of the available material. Hence by making the type of the research

conducted to be both Descriptive and Analytical in nature.

From the study, the type of data to be collected and the procedure to be used for this purpose

were decided.

Data Collection:

The required data for the study are basically secondary in nature and the data are collected

from the audited reports of the company.

Primary Data:

Primary data are those data, which is originally collected afresh. In this project,

Questionnaire Method and Interview Method has been used for gathering required

information.

19
Sources of Data:

The sources of data are from the annual reports of the company from the year 2007-

2008 to 2009-2010.

Methods of Data Analysis:

The data collected were edited, classified and tabulated for analysis. The analytical tools used

in this study.

Analytical Tools Applied:

The study employs the following analytical tools:

 Comparative statement.

 Common Size Statement.

 Trend Percentage.

 Ratio Analysis.

RATIO ANALYSIS

Financial Analysis:

Financial analysis is the process of identifying the financial strengths and

weaknesses of the firm and establishing relationship between the items of the balance sheet

and profit & loss account.

Financial ratio analysis is the calculation and comparison of ratios, which are

derived from the information in a company’s financial statements. The level and historical

20
trends of these ratios can be used to make inferences about a company’s financial condition,

its operations and attractiveness as an investment. The information in the statements is used

by;

 Trade creditors, to identify the firm’s ability to meet their claims i.e. liquidity position

of the company.

 Investors, to know about the present and future profitability of the company and its

financial structure.

 Management, in every aspect of the financial analysis. It is the responsibility of the

management to maintain sound financial condition in the company.

Ratio Analysis:

The term “Ratio” refers to the numerical and quantitative relationship between

two items or variables. This relationship can be exposed as

 Percentages

 Fractions

 Proportion of numbers

Ratio analysis is defined as the systematic use of the ratio to interpret the

financial statements. So that the strengths and weaknesses of a firm, as well as its historical

performance and current financial condition can be determined. Ratio reflects a quantitative

relationship helps to form a quantitative judgment.

Ratios Are Useful For Several Parties Such As:

1) Investors, both present as well as potential investors.

2) Financial analyst.

3) Mutual funds.

21
 4) Stock broker and stock exchange authorities.

5) Government.

6) Tax department.

7) Competitors.

8) Research analysts and students.

9) Company’s management.

10) Creditors and Suppliers

11) Lending Institutions – Banks and Financial Institutions

12) Financial Manager

13) Other Interested parties like credit rating agencies etc.

Nature of Ratio Analysis:

Ratio analysis is a technique of analysis and Interpretation of financial statements. It is

the process of establishing and interpreting various ratios for helping in making certain

decisions. It is only a means of understanding of financial strengths and weaknesses of a firm.

There are a number of ratios which can be calculated from the information given in the

financial statements, but the analyst has to select the appropriate data and calculate only a few

appropriate ratios. The following are the four steps involved in the ratio analysis.

 Selection of relevant data from the financial statements depending upon the objective

of the analysis.

 Calculation of appropriate ratios from the above data.

22
  Comparison of the calculated ratios with the ratios of the same firm in the past, or the

ratios developed from projected financial statements or the ratios of some other firms

or the comparison with ratios of the industry to which the firm belongs.

Classification of Ratios:

A) Liquidity Ratios

It is also known as liquidity ratios. it includes the following

1) Measures ability of a company to meet its current obligations.

2) Indicates short term financial stability of a company.

3) Indicates present cash solvency and ability to remain solvent in times of adversities.

To measure the liquidity of a firm the following ratios can be calculated

 Current ratio

 Quick (or) Acid-test (or) Liquid ratio

(a) Current Ratio:

Current ratio is useful to find out solvency of the company. High current ratio

indicates that company will be able to pay its debt maturity within a year. Low current ratio

indicates that company will not be able to meet its short term debts.

Minimum standard current ratio is 2:1.

Current Assets

Current Ratio=
Current Liabilities

23
(b) Quick Ratio:

Quick ratio is also known as acid test ratio. It indicates immediate ability of

a company to pay off its current obligations. And also shows the solvency and financial

soundness of the business. Greater the ratio stronger the financial position of the

company.

The standard quick ratio should be 1:1

Quick Assets

Quick Ratio=
Quick Liabilities

B) Profitability Ratios:

The primary objectives of business undertaking are to earn profits. Because

profit is the engine, that drives the business enterprise.

It measures the overall efficiency of the business. It indicates whether

utilization of business assets and funds are done efficiently and best way or not , so as to

generate adequate profits or returns.

Profitability ratios fall in two categories:

a) Related To Sales:

1) Gross Profit Ratio:

It shows the operating efficiency of the business. It measures the efficiency of

production as well as pricing. Decrease in the ratio indicates reduction in selling price or

increase in the cost of production or decline in the business activity. Increase in the ratio

indicates increase in the selling price or reduction in the cost of production.

24
 Gross Profit
Gross Profit Ratio = X 100
Sales

2) Operating Profit Ratio:

It indicates profitability of entire business after meeting all operating cost

including direct and indirect cost of administrative and distribution expenses.

Operating Profit
Operating Profit Ratio: X 100
Sales

3) Net Profit Ratio:

It shows the overall efficiency of the business. Higher the ratio indicates

higher efficiency of business and better utilization of total resources. In addition it indicates

efficiency of financing operations as well as tax management.

Net profit after tax

Net Profit Ratio: X 100
Sales

b) Related To Investment Of Capital Employed:

1) Return On Investment:

It measures the overall performance of the company that is utilization of total resources and

funds available with the company. Higher the ratio better utilization of funds. It indicates

earning capacity of the business. It measures the management performance.

25
 EBT But AT

Return on Investment: X 100

Total Assets/ Liability

2) Return On Net Worth Or Proprietors Funds:

It measures the productivity of shareholders funds. Higher the ratio indicates better utilization

of shareholders funds or higher productivity of owner’s funds. It helps to investor to compare

the earning capacity of company with that of other companies.

Net Profit after Tax

Return on Net Worth: X 100
Equity Shareholder Fund

C) Turnover Ratio-

It measures how efficiently the assets are employed. These ratios are

expressed in number of times the assets is used during the period.

1) Inventory Turnover Ratio:

It indicates number of times the replacement of inventory during the given

period usually a year. Higher the ratio more efficient is the management of inventory. But

higher inventory turnover ratio is not always good if it is lower level of inventory because it

invites problem of frequency stock outs and loss of sales and customer or goodwill.

26
 Cost of Goods Sold
Inventory Turnover Ratio:
Average Stock in Hand

2) Average Collection Period:

It indicates credit and collection policy and also indicates efficiency in

management of debtors. Smaller no. of dates, higher will be the efficiency of the collection

department.

Avg. collection period should not exceed 1.5 times the credit period allowed.

Receivable (Debtors)
Avg. Collection Period:

Average Sales per Day.

3) Receivable Turnover Ratio:

The ratio indicates average credit period enjoyed by debtors.

Debtors + Bills Receivable

Receivable Turnover Ratio: X 100
Total Credit Sales

27
4) Fixed Asset Turnover Ratio:

It indicates efficiency in the utilization of fixed assets like plant and machinery by

management.

Net Sales
Fixed Assets Turnover Ratio =

Fixed Assets

5) Total Asset Turnover Ratio =

It indicates how efficiently the assets are employed overall. It indicates

relationships between the amount invested in the assets and the result accrues in terms of

sales.

Net Sales
Total Asset Turnover Ratio =
Total Assets

6) Creditors Turnover Ratio:

It indicates the how the credit period enjoyed by the creditors.

Net Credit Purchases

Creditors Turnover Ratio=

Average Creditors

28
D) Financial Ratio –

1) Capital Gearing Ratio:

This ratio indicates the relationship between preferential capital, debenture.

Term loan and capital which does not carry fixed rate of interest or dividend.

When the ratio is more than one then the capital is said to be highly geared that means low

equity share capital and greater amount of preference share capital, debenture, long term loan.

When the ratio is less than one then the capital is said to be very lowly geared

that means low earning per share. Equity shareholder will control the company. It results in

over capitalization.

Preferential Capital + Debenture + Term Loan

Capital Gearing Ratio:

Equity Share Capital + Reserve and Surplus

2) Proprietary Ratio:

It measures the relationship between funds invested in business by the owners

with the total funds invested in business. It indicates long run solvency of the business. High

ratio means company is less dependent on outside funds and company is quite solvent. Low

ratio indicates company is more dependent on outside funds solvency and solvency may be

danger.

Proprietary Fund
Proprietary Ratio:
Total Assets

29
3) Stock Working Capital Ratio:

It indicates weightage of stock in the current assets or in the working funds. It

indicates strength and weaknesses of working capital; high ratio indicates slow movement in

stock and also reflects better management of inventory as well as working capital.

Stock
Stock Working Capital Ratio:
Working Capital

E) Financial Leverage Ratio:

It indicates financial structure of the organization that is proportion of debts as

compare to owner’s fund.

1) Debt Equity Ratio:

Higher the ratio less secured is the creditors, lower the ratio creditors enjoy

higher degree of safety.

Debt
Debt Equity Ratio:
Equity

30
2) Debt Asset Ratio:

It indicates the percentage of the total asset created by the company through

short term and long term debt. Higher the ratio less safe is the creditors and vice versa.

Debt
Debt Asset Ratio:
Total Assets

3) Long Term Debt to Total Capitalization:

It explains the relationship between long term debts borrowed from

outsiders with owner’s contribution. Lower the ratio better is the solvency of the business

and safer is the creditor so far as his repayment.

Long Term Debt

Long Term Debt to Total Capitalization:

Total Capital Employed

4) Interest Coverage Ratio:

This indicates earning capacity of the business to pay its interest burden.

Higher the ratio business can easily pay the interest.

Earnings before Interest and Tax

Interest Coverage Ratio:

Interest

31
F) Dividend Ratio:

These ratios for a particular company are relevant for an investor for

making an investment decision as to whether he should invest in the share of the company.

1) Earnings per Share:

This ratio indicates weather over a given period their have been change in

the wealth per share holder. Other the ratio increases the possibility for the higher dividends

and increase in the market price of the shares.

Earnings after Tax – Preference Dividend

Earnings per Share:
No. Of Shares Paid Up

2) Price Earnings Ratio:

It indicates relationship between market price of the share and the current

earnings per share. It helps to determine the future price of the share.

Market Price per Share

Price Earnings Ratio:

Earning Per Equity Share

3) Payout Ratio:

32
 It indicates how much proportion of the earning per share is retaining for

plaguing back and portion distributed as dividend to the share holder.

Dividend per Equity Shares

Payout Ratio:
Earnings per Share

4) Dividend Yield Ratio:

It indicates the ultimate current return which investor will get as a

percentage of is investment. It indicates the feature like the profitability and dividend policy

of the company. When dividend yield is lower than the expected return, market price for the

share may fall in future or vice versa.

Equity Dividend
Dividend per Share:
No. Of Equity Shares

Dividend per Share

Dividend Yield
Market Price per Share

33
Interpretation of the Ratios:

The Interpretation of ratios is an important factor. The inherent limitations of ratio analysis

should be kept in mind while interpreting them. The impact of factors such as price level

changes, change in accounting policies, window dressing etc.

Guidelines or Precautions for Use of Ratios:

The calculation of ratios may not be a difficult task but their use is not easy.

Following guidelines or factors may be kept in mind while interpreting various ratios is

 Accuracy of financial statements

 Objective or purpose of analysis

 Selection of ratios

 Use of standards should also be kept in mind when attempting to interpret ratios.

34
 DATA ANALYSIS
AND
INTERPRETATION

35
1)Financial stability Ratios:

To measure the liquidity of a firm the following ratios can be calculate the following

ratios,

a) CURRENT RATIO:

Current Asset
Current Ratio:
Current Liabilities

Table1.a:
(Rupees in lakhs)
Year Current Assets Current Liabilities Ratio

31-3-15 48468.47 21582.46 2.2:1

31-3-16 51764.02 27739.78 1.8:1

31-3-17 49807.77 32808.36 1.5:1

Current Ratio
2.5
2.2
2
1.8
1.5 1.5
1 Current Ratio

0.5
0
2015-16 2016-17 2017-18

ANALYSIS AND INTERPRETATION:

The current ratio of the firm measures the short term solvency. It indicates the rupees of

current asset available for each rupee of current liabilities.

36
 The above chart shows that decline trend from the F.Y. 2015 to F.Y. 2017.

This is mainly due to increasing creditors from F.Y. 2015 to F.Y. 2017. In the F.Y. 2015-16,

it shows 2.2:1 which was higher than the standard ratio i.e. 2:1. There was continuous decline

in the current ratio which is not good sign for the company.

b) QUICK RATIO:

Quick Asset
Quick Ratio:
Quick Liabilities

Table.1.b:
(Rupees in lakhs)
Year Quick Asset Quick Liabilities Ratio

31-3-07 23199.99 21582.46 1.07:1

31-3-08 27062.4 27739.78 0.975:1

31-3-09 28573.68 32808.36 0.870:1

Quick Ratio
1.2
1.07
1 0.975
0.87
0.8

0.6
Quick Ratio
0.4

0.2

0
2015-16 2016-17 2017-18

37
ANALYSIS AND INTERPRETATION:

The above chart indicates the decline trend from the F.Y. 2015 to F.Y. 2017. In the F.Y. 2016

and F.Y. 2017 the quick ratio of the company was below standard that means large part of

current asset of the firm is tie up in slow moving and unsellable investment of Finish goods

and also slow moving of debts, but, the overall trend shows declining which is not a positive

sign for APL.

2) PROFITABILITY RATIO :

A) RELATED TO SALES

a) Operating Profit Ratio:

Earnings before Interest Taxes

Operating Profit Ratio: X 100
Sales

Table 2.A.a:
(Rupees in lakhs)
Earning Before
Year Sales Ratio
Interest Taxes

31-3-07 15542.89 129345.66 12.02 %

31-3-08 16759.11 139992.48 11.97 %

31-3-09 14272.70 139639.94 10.22 %

38
 Operating Profit Ratio
12.50%

12.00% 12.02% 11.97%

11.50%

11.00%

10.50% Operating Profit Ratio

10.22%
10.00%

9.50%

9.00%
2015-16 2016-17 2017-18

ANALYSIS AND INTERPRETATION:

The above chart shows that there was a continuous decreased in the ratio. That means the

ratio was decreased from 12.02% in FY 2015-16 to 10.22% in FY 2017-18. This is due to

increases in the expenditure of the company.

b) Net Profit Ratio:

Net Profit
Net Profit Ratio: X 100
Sales

Table .2.A.b:
(Rupees in lakhs)
Year Net Profit Sales Ratio

31-3-15 10202.8 129345.66 7.88 %

31-3-16 11702.72 139992.48 8.35 %

31-3-17 10136.19 139639.94 7.25 %

39
 Net Profit Ratio
8.50%

8.00%

7.50% 8.35% Net Profit Ratio

7.88%
7.00%
7.25%

6.50%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

The above chart indicates the Net Profit Ratio in 2015-16 was 7.88 % which

further increases to 8.35% in FY 2016-17. Further it had fallen to 7.25% in FY 2017-18. That

means company suffers the losses after the FY 2016-17. In FY 2016-17 the net profit was

high to increase in the sales of the company.

(B) RELATED TO CAPITAL EMPLOYED

a) Return on investment:

Earnings before interest but after tax

Return on investment: X 100
Total asset / liability

40
Table 2.B.a:
(Rupees in lakhs)
Earnings Before
Total Asset /
Year Interest But After Ratio
Liability
Tax

31-3-15 10378.39 65912.12 15.74 %

31-3-16 11929.75 73746.32 16.17 %

31-3-17 10257.99 75662.49 13.55 %

Return On Investment
16.50%
16.00%
15.50%
15.00%
14.50%
16.17% Return On
14.00% 15.74% Investment
13.50%
13.00%
13.55%
12.50%
12.00%
2015-16 2016-17 2017-18

ANALYSIS AND INTERPRETATION:

It can be found that the return on investment ratio of APL was slightly increased in first two
years. Further it was decreased by 0.13% which implies an ineffective decisions made by the
managers.

(b) Return on Net Worth or Proprietor’s Funds:

Net Profit after Tax

Return on net worth: X 100
Equity shareholder fund

41
Table .2.B.b:
(Rupees in lakhs)
Net Profit after Equity shareholder
Year Ratio
Tax fund

31-3-15 10202.8 51721.18 19.72 %

31-3-16 11702.72 59875.12 19.54 %

31-3-17 10136.19 66299.87 15.28 %

Return On Net Worth

25.00%

20.00%

15.00%

10.00% Return On Net Worth

19.72% 19.54%
15.28%
5.00%

0.00%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

This ratio indicates how well the firm has used the resources of owner. The earning of a

satisfactory result is the most desirable objective of the business. This ratio is important to

present as well as prospective shareholders and also of great concern to management.

The above chart shows that the ratio was almost constant in first two years. Further it

declined to 15.28% this is due to increased in the reserve and surplus of the company.

Higher the ratio indicates better utilization of recourses but in APL It shows decreasing trend

which is not good.

42
3. TURNOVER RATIOS:

a) Inventory turnover ratio:

Net Sales
Inventory turnover ratio:
Closing Stock

Table 3.a:
(Rupees in lakhs)
Year Net Sales Closing Stock Ratio

31-3-15 129345.66 19996.18 6.46 times

31-3-16 139992.48 19926.90 7.02 times

31-3-17 139639.94 17063.39 8.18 times

Inventory Turnover Ratio

9
8 8.18
7 7.02
6.46
6
5
Inventory Turnover
4 Ratio
3
2
1
0
2015-16 2016-17 2017-18

ANALYSIS AND INTERPRETATION:

The above chart shows that the stock gets converted into cash was 6.46 times, 7.02 times and

8.18 times in the FY 2015 to 2016 respectively. If we compared the figures of sales and

inventory of first two years, the level of inventory is almost same, but in the FY 2016 and17

the sales was increased with low cost of inventory which implies the management is

successful to reduce the cost involved for management of inventory.

43
b) Average Collection Period:

Receivable (Drs)
Average collection period:
Average sales per day

Table 3.b:
(Rupees in lakhs)
Average sales per
Year Receivable (Drs) Ratio
day

31-3-15 20994.41 129345.66 59.24days

31-3-16 23637.37 139992.48 61.62 days

31-3-17 20957.29 139639.94 54.77 days

Average Collection Period

64

62 61.62
60
59.24
58
Average Collection
56 Period
54.77
54

52

50
2015-16 2016-17 2017-18

ANALYSIS AND INTERPRETATION:

The above chart shows that the collection period was high in FY 2016-17i.e. 62 days. This

means, a very long collection period would imply either for credit selection or an inadequate

collection. The average collection period short in FY 2017-18 which means that better is a

credit management and prompt payment on the part of debtors.

44
c) Receivable turnover ratio:

Credit sales
Receivable turnover ratio:
Average debtors

Table 3.c:
(Rupees in lakhs)
Year Credit sales Average debtors Ratio

31-3-15 129345.66 20994.41 6.1times

31-3-16 139992.48 23637.37 5.9 times

31-3-17 139639.94 20957.29 6.6 times

Receivable Turnover Ratio

6.8

6.6 6.6

6.4

6.2
6.1 Receivable Turnover
6 Ratio
5.9
5.8

5.6

5.4
2015-16 2016-17 2017-18

ANALYSIS AND INTERPRETATION:

This ratio indicates the average credit period enjoyed by debtors. The above chart shows that

the customers to whom the credit sales are made pay 6.1times, 5.9 times & 6.6 times in the

FY 2015 to 2017 respectively. In the FY 2016-17 THE DEBTORS TURNOVER RATIO was

low which indicates the absence of a strict credit policy and also point out that there were

45
delayed to recover the revenue from sales. This point out into the huge block up of working

capital in book debt.

It was high in FY 2017-18 i.e. 6.6 times which indicate prompt payment on

the part of debtors. Overall debtor’s turnover ratio was good.

d) Fixed Asset Turnover Ratio:

Net sales
Fixed asset turnover ratio:
Fixed assets

Table 3.d:
(Rupees in lakhs)
Year Net sales Fixed assets Ratio

31-3-15 129345.66 22538.61 5.73 times

31-3-16 139992.48 24140.44 5.79 times

31-3-17 139639.94 23861.99 5.85 times

Fixed asset Turnover Ratio

5.86
5.85
5.84
5.82
5.8
5.79
5.78
5.76 Fixed asset Turnover
5.74 Ratio
5.73
5.72
5.7
5.68
5.66
2015-16 2016-17 2017-18

46
ANALYSIS AND INTERPRETATION:

It indicates efficiency in the utilization of fixed assets like plant and machinery by

management.

From the above chart the fixed asset turnover ratio of APL slowly increases

over period of time. From this we can say that a company has been successful to manage and

utilized its assets. Also a company has been more effective in using the investment in fixed

assts to generate revenue.

e) Total Asset Turnover Ratio:

Net sales
Total asset turnover ratio:
Total asset

Table.3.e:
(Rupees in lakhs)
Year Net sales Total asset Ratio

31-3-15 129345.66 65912.12 1.962 times

31-3-16 139992.48 73746.32 1.898 times

31-3-17 139639.94 75662.49 1.845 times

47
 Total Asset Turnover Ratio
1.98
1.96 1.962
1.94
1.92
1.9 1.898
1.88 Total Asset Turnover
1.86 Ratio
1.84 1.845
1.82
1.8
1.78
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

The total asset turnover ratio indicates the firm’s ability to generate sales from all financial

resources.

From the above chart the total asset turnover ratio was decreased from 1.9 times in FY 2015-

16 to 1.8 in FY 2017-18. The total asset turnover of the company was 1.8 times implies that

APL generate a sell of Rs. 1.8 for one rupee investment in fixed and current asset together.

f) Creditor’s Turnover Ratio:

Net credit purchases

Creditor’s turnover ratio:
Average creditors

Table 3.f:
(Rupees in lakhs)

Net credit
Year Average creditors Ratio
purchases

31-3-15 84723.95 15906.86 5.3 times

31-3-16 89136.85 18430.47 4.8 times

31-3-17 92418.41 23007.12 4.0 times

48
 Creditor's Turnover Ratio
6
5.3
5
4.8
4 4

3 Creditor's Turnover
Ratio
2

0
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

The above chart dips from 5.3 times to 4.0 times from the FY 2015-16 to FY 2017-18. From

this we can interpret that APL has successful to manage its creditors because, over the years

trend is declining.

4) Financial ratio:

a) Proprietary ratio:

Proprietary Fund
Proprietary ratio: X 100
Total assets

Table 4.a
(Rupees in lakhs)

Year Proprietary fund Total assets Ratio

31-3-15 51721.18 65912.12 78.46 %

31-3-16 59875.12 73746.32 81.19 %

31-3-17 66299.62 75662.49 87.62 %

49
 Proprietary Ratio
90.00%
88.00%
86.00%
84.00%
82.00%
80.00% 87.62% Proprietary Ratio
78.00%
76.00% 81.19%
78.46%
74.00%
72.00%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

From the above chart the ratio was consistently increased in three years. The

ratio was high in the FY 2009-10 i.e. 0.87%. It indicates the company is quite solvent.

b) Stock working capital ratio:

Stock
Stock working capital ratio:
Working capital

Table 4.b:
(Rupees in lakhs)

Year Stock Working capital Ratio

31-3-15 19996.18 26886.01 74.37%

31-3-16 19926.90 24024.24 82.94%

31-3-17 17063.39 16999.41 100.37%

50
 Stock Working Capital Ratio
120.00%

100.00%

80.00%

60.00% Stock Working Capital

100.37% Ratio
40.00% 82.94%
74.37%

20.00%

0.00%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

The above chart shows the continuous increase in the trend of the ratio. The weightage of

stock in the current assets is high in the FY 2017 – FY 2018 as compare to other FY. That

means there was a slow movement of stock.

5) Financial Leverage Ratio:

It indicates financial structure of the organization that is proportion of debts as compare to

owner’s fund.

a) Debt Equity Ratio:

Debt
Debt equity ratio:
Equity

51
Table 5.a: (Rupees in lakhs)

Year Debt Equity Ratio

31-3-15 12657.80 51721.18 24.47%

31-3-16 12480.40 59875.12 20.84%

31-3-17 9362.62 66299.62 14.12%

ANALYSIS AND INTERPRETATION:

The above chart shows the continuous increase in the trend of the ratio. The

weightage of stock in the current assets is high in the FY 2009 – FY 2010 as compare to other

FY. That means there was a slow movement of stock.

Financial Leverage Ratio:

It indicates financial structure of the organization that is proportion of debts as compare to

owner’s fund.

a) Debt Equity Ratio:

Debt
Debt equity ratio:
Equity

Table 5.a:
(Rupees in lakhs)

Year Debt Equity Ratio

31-3-15 12657.80 51721.18 24.47%

31-3-16 12480.40 59875.12 20.84%

31-3-17 9362.62 66299.62 14.12%

52
 Debt Equity Ratio
30.00%

25.00%

20.00%

15.00%
Debt Equity Ratio
24.47%
10.00% 20.84%

5.00% 12.14%

0.00%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

This ratio is useful to judge long term financial solvency of a firm. This ratio reflects the

relative claim of creditor and shareholder against the assets of the firm.

From the above chart the debt equity ratio of the APL was consistently declined from 24.47%

in FY 2015-16 to 14.12% in FY 2017-18.The low debt equity ratio in FY 2017-18 indicates

the firm had less claims from outsiders as compared to those of owner.

b) Debt Asset Ratio:

Debt
Debt asset ratio:
Total assets

Table5.b:
(Rupees in lakhs)
Year Debt Total assets Ratio

31-3-15 12657.80 65912.12 19.20%

31-3-16 12480.40 73746.32 16.92%

31-3-17 9362.62 75662.49 12.37%

53
 Debt Asset Ratio
25.00%

20.00%

15.00%

Debt Asset Ratio

10.00% 19.20%
16.92%
12.37%
5.00%

0.00%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

From the above chart the debt asset ratio was consistently decreased from

19.20% in FY 2015-16 to 12.37% in FY 2017-18. That means at beginning creditors of APL

bear the high risk than the other years.

c) Long Term Debt to Total Capitalization:

Long term debt

Long term debt to total capitalization:
Total capital employed

Table 5.c:
(Rupees in lakhs)

Total Capital
Year Long Term Debt Ratio
Employed

31-3-15 4660.29 65912.12 7.07%

31-3-16 4603.14 73746.32 6.24%

31-3-17 1608.29 75662.49 2.12%

54
 Long Term Debt to Total
Capitalisation Ratio
8.00%
7.00%
6.00%
5.00%
4.00% Long Term Debt to Total
7.07%
3.00% 6.24% Capitalisation Ratio
2.00%
1.00% 2.12%
0.00%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

The above chart indicates that the ratio was consistently decreased from 7.07%

in FY 2015-16 to 2.12% in FY 2017-18, means that APL is successful to manage its long

term debt which further implies that the APL is in better position in terms of solvency.

d) Interest Coverage Ratio:

Earning before interest and tax

Interest coverage ratio:
Interest

Table 5.d:
(Rupees in lakhs)

Earnings Before
Year Interest Ratio
Interest And Tax

31-3-15 15718.48 175.59 89.51times

31-3-16 16986.14 227.03 74.91 Times

31-3-17 14505.05 212.8 68.16 Times

55
 Interest Coverage Ratio
100
90 89.51
80
74.91
70 68.16
60
50 Interest Coverage
40 Ratio
30
20
10
0
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

From the above chart the trend of the ratio was decreased from 89.51 times in

FY 2015-16 to 68.16 times in FY 2017-18. From this, it indicates that APL is trying to reduce

its interest burden which is good sign for both i.e. there creditors and shareholders.

6) Dividend Ratio:

These ratios for a particular company are relevant for an investor for making an investment

decision as to whether he should invest in the share of the company.

a) Earnings per Share:

Earning after tax – preference dividend

Earning per share:
No. of shares paid up

56
Table .6.a: (Rupees in lakhs)

Earnings After
No. Of Shares Paid
Year Tax – Preference Ratio
Up
Dividend

31-3-15 10202.08 255.07666 39.99

31-3-16 11702.72 269.45986 43.43

31-3-17 10136.19 269.45986 37.61

Earning Per Share

44
43
42
41
40
39 43.43 Earning Per Share
38
37 39.99
36 37.61
35
34
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

From the above chart the EARNING PER SHARE of the company was high

in FY 2016-17 i.e. Rs.43.43. This means that as compare to the other FY there has been

increase in wealth per shareholder.

b) Payout Ratio:

Dividend per equity share

Payout ratio: X 100
Earnings per share

57
Table 6.b: (Rupees in lakhs)

Dividend per Earning per equity

Year Ratio
equity share share

31-3-15 12.14 39.99 30.35%

31-3-16 12.00 43.43 27.63%

31-3-17 12.00 37.61 31.90%

Payout Ratio
33.00%
32.00%
31.00%
30.00%
29.00%
31.90% Payout Ratio
28.00%
30.35%
27.00%
27.63%
26.00%
25.00%
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

It indicates how much proportion of the earning per share is retaining for

plugging back and portion distributed as dividend to the share holder.

The above chart indicates that the pay out ratio was high in FY 2017-18 i.e.

31.90%. If the divided pay out ratio is subtracted from 100, retention ratio is obtained. Means

that in APL the retention ratio from FY 2015 to FY 2017 was 69.65%, 72.37%, 68.1%

respectively and APL is ploughed back its maximum percentage of its profit.

58
c) Dividend per shares ratio:

Equity dividend
Dividend per share:
No. of equity shares

Table 6.c: (Rupees in lakhs)

No. Of Equity
Year Equity Dividend Ratio
Shares

31-3-15 309879000 25507666 Rs. 12.14

31-3-16 323352000 26945986 Rs. 12.00

31-3-17 323352000 26945986 Rs. 12.00

Dividend Per Share Ratio

12.2

12.15

12.1

12.05
Dividend Per Share Ratio
12.14
12

11.95 12 12

11.9
31-3-15 31-3-16 31-3-17

ANALYSIS AND INTERPRETATION:

The dividend per share ratio of the APL was almost same i.e. Rs. 12 in the FY

2016 to FY 2017 .But if we compared earning per share with Dividend per share it shows that

Earning per share is more than Dividend per share. In this case of Earning per share,

adjustment of bonus or right issue should be made while calculating Dividend per share over

the year.

59
FINDINGS

60
1. The ideal current ratio is 2:1 which the firm obtains only in the FY 2015-16 it shows the

positive impact.

2. The ideal liquid ratio is 1:1 which is also obtained by the firm in FY 2015-16 and FY

2016-17 it indicates that APPL, without selling its inventory, has enough short-term assets to

cover its immediate liabilities.

3. The net profit ratio shows fluctuating trend, it shows that more or less the company is

successful to maintained efficiency in sales value and operating expenses.

4. The operating profit ratio of the APPL is in fluctuating manner as 12.02%, 11.97%, and

12.22% from FY 2015to FY 2017.

5. The return on investment ratio is increased from 0.15% to .016% in FY 2015 to FY 2016

because both the EBIT and total asset increased.

6. The company is maintaining the proper record of inventory. Management is successful to

manage the cost involved in inventory, because of increasing ratio of inventory.

7. The fixed asset turnover ratio of the firm is in increasing trend from the F.Y. 2015 to 2017,

means that the company is efficiently utilizing the fixed assets.

8. The proprietary ratio of the firm shows increasing trend, means that the long term solvency

of the firm is increased.

9. APPL borrowed loans in such a way that the cost of this debt financing do not outweigh

the return that the company generates on the debt through investment and business activities

And become too much for the company to handle.

10. The APPL is successful to manage its long term debt. In the FY 2015-16 the long term

debt was Rs. 4660.29 which was reduced to Rs. 1608.29 in FY 2017-18.

61
11. APPL is far better in covering its fixed cost with the interest coverage ratio.

12. The sales, profit before tax, profit after tax shows the increasing trend during the period

under review. It depicts that the company is working with more efficiency.

13. The company has not made any preferential allotment of shares and also company has not

issue any debentures.

62
 SUGGESTIONS
AND CONCLUSION

63
Suggestions:

1. The CURRENT RATIO of APPL was less than the standard in FY 2016-17 and 2017-

18i.e.1.8, 1.5 respectively. A low current ratio indicates that co will not be able to meet its

short term debts.

2. APPL should look into its credit policies in order to ensure the timely collection of

imparted credit that is not earning interest for the firm.

3. There is decreasing trend in interest coverage ratio which is due to heavy investment

which further effect on the return on investment ratio. So APPL should keep up its

investment unto sufficient level.

4. The APPL should formulate the strategy to use the fixed assets more effectively to

generate more revenues.

5. Operating expenses should be especially considered to be reduced.

6. Inventory is the biggest item of balance sheet that must have demanded a large amount of

maintaining cost. So there is need for efficient Inventory Management.

7. There should be efficient utilization of share holder fund to increase return on investment

and return on equity to maintain its goodwill in investors mind.

CONCLUSION:

Finance is the life blood of every business. Without effective financial

management a company cannot in this competitive world. A Prudent financial Manager has

to measure the working capital policy followed by the company.

The company’s overall position is at a good position. Through the losses were

there in the FY 2011-2012, they were able to come out of it successfully and regain into

profitable scenario. Particularly the last three year’s position is well due to raise in the profit

level from the FY 2015 to FY 2017. It is better for the firm to diversify the funds to different

sectors in the present market scenario.

64
 On a whole ARBRO Pharmaceuticals Private Limited has once again

demonstrated its potential to ride through the difficult times. Despite the slowdown in its

growth, it has determined to grab numerous opportunities that are facing Indian

Pharmaceuticals Industry.

As mentioned earlier, other opportunities in India are pegged to the transport

sector. Car ownership in India stands at little more than one percent. However, rising

affordability and the launch of economical cars such as the Tata Nano are expected to propel

the market for OEM coatings and refinishes in the coming years.

Higher demand for marine paints can be expected in the next decade, once

investments in ports and port development have started to reach fruition. As India is hopeful

of competing with other established shipbuilding nations, the multinationals are likely to find

plentiful opportunity in India, given the compliance requirements imposed by effects of

international legislation on Snec 30 Capsules.

Also other segments are showing promising opportunities to grow. With these

many opportunities at hand along with the potential player who would be able to make use of

the situation well, I would rather start looking at a career in APPL.

So from this we can conclude that there is a better opportunities for investors

to invest in this company.

65
LIMITATIONS

66
The main limitations of the project undertaken are as under:-

 Time: The time of around two months was too short to study as wide subject like

Financial Analysis.

 Confidential information: The executives were hesitant to reveal complete

information since it was confidential.

 Busy Schedule of Concerned Executives: The concerned executives were not having

very busy schedule because of which they were reluctant to give appointment.

67
 BIBLIOGRAPHY

 Financial Management: M Y KHAN AND P K JAIN Fifth Edition

 FINANCIAL MANAGEMENT - I. M. PANDEY

 Financial Management (BMS): MR. Kale.

 ARBRO Pharmaceuticals magazines, brochures etc.

 Annual Reports of the ARBRO Pharmaceuticals Pvt. Ltd.

o annual report 2015-16

o annual report 2016-17

 https://arbropharma.com/

 Search Engine : www.google.com

68