B.K.

BIRLA COLLEGE OF ARTS, SCIENCE &COMMERCE

(Autonomous)

PROJECT REPORT

ON

Analysis on Annual Report on National Thermal Power Ltd.

M.Sc. (Finance) SEMESTER – I

(2019-2020)

SUBMITTED

BY

ROHINI PATIL
ROLL NO. - 12

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1 Contents
CHAPTER - PROFILE OF THE COMPANY ..................................................... 4
1.1 INTRODUCTION .................................................................................... 4
1.2 DIRECTORS ............................................................................................ 5
1.3 RECOGNITIONS AND AWARDS ........................................................ 5
1.4 CSR ACTIVITIES ................................................................................... 5
1.5 HISTORY ................................................................................................. 6
1.6 VISION & MISSION ............................................................................... 7
1.7 CORE VALUES –BE COMMITTED ..................................................... 7
1.8 FUTURE GOALS .................................................................................... 8
1.9 LISTINGS AND SHAREHOLDING ...................................................... 8
1.10 EMPLOYEES .......................................................................................... 9
1.11 LOCATIONOFNTPC PLANTS ............................................................ 10
1.12 SUBSIDIARIES OF NTPC ................................................................... 10
1.13 COMPETITORS OF NTPC ................................................................. 12
2 CHAPTER - INTRODUCTION .................................................................. 13
2.1 INTRODUCTION OF THE STUDY .................................................... 13
2.2 PURPOSE OF STUDY .......................................................................... 13
2.3 OBJECTIVE OF STUDY ...................................................................... 13
2.4 SCOPE OF THE STUDY ...................................................................... 14
2.5 METHODOLOGY ................................................................................. 14
2.6 DATA COLLECTION ........................................................................... 14
2.7 TOOLS ................................................................................................... 14
3 CHAPTER - PROJECT OVERVIEW ......................................................... 15
3.1 INTRODUCTION OF FINANCIAL STATEMENT ............................ 15
3.2 TYPES OF FINANCIAL ANALYSIS .................................................. 15
3.3 PROCEDURE OF FINANCIAL STATEMENTS ANALYSIS ........... 17
3.4 METHODS OR DEVICES OF FINANCIAL ANALYSIS .................. 17
4 CHAPTER - DATA ANALYSIS ................................................................. 18

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 4.1 BALANCE SHEET ................................................................................ 19
4.2 PROFIT AND LOSS ACCOUNT ......................................................... 20
4.3 RATIO ANALYSIS ............................................................................... 21
4.3.1 A. PROFITABILITY RATIOS ....................................................... 21
4.3.2 B. LIQUIDITYRATIOS .................................................................. 27
4.3.3 C. ACTIVITY RATIOS ................................................................... 32
4.3.4 D. LEVERAGE RATIOS OR LONG-TERM SOLVENCY
RATIOS: ....................................................................................................... 36
5 CHAPTER – FINDINGS ............................................................................. 40
5.1 FINDING ................................................................................................ 40
5.2 References: ............................................................................................. 40

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 CHAPTER - PROFILE OF THE COMPANY

1.1 INTRODUCTION
NTPC limited known as National Thermal Power Corporation Limited, is an Indian
Public Sector Undertaking, engaged in the business of generation of electricity and allied
activities. It was founded by Government of India in 1975, which now holds 64.74% of its
equity shares on 30th, June 2016 it is a company incorporated under the Companies Act 1956
and is promoted by the Government of India. The headquarters of the company is situated at
New Delhi. NTPC's core business is generation and sale of electricity to state-owned power
distribution companies and State Electricity Boards in India. The company also undertakes
consultancy and turnkey project contracts that involve engineering, project management,
construction management and operation and management of power plants.
In May 2010, NTPC was conferred Maharatna status by the Union Government of India, one
of the only four companies to be awarded this status. It is ranked 400th in the Forbes Global
2000 for 2016.
The company has also ventured into oil and gas exploration and coal mining activities. It is the
largest power company in India with an electric power generating capacity of 53,651 MW.
Although the company has approx. 16% of the total national capacity it contributes to over
25% of total power generation due to its focus on operating its power plants at higher efficiency
levels (approx. 80.2% against the national PLF rate of 64.5%). NTPC currently produces 25
billion units of electricity per month.

Listing: NTPC got listed on BSE and NSE on 5 November 2004. Against the issue price of
INR 62 per share, it closed the first day of listing with INR 75.55 per share. On the day of
listing, it became the third largest company in India in terms of market capitalisation.

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 1.2 DIRECTORS

 Chairman& Managing Director Shri Gurdeep Singh

 (Technical)Director Shri P.K. Mohapatra
 (Human resources) Director Shri Saptarshi Roy
 (Commercial) Director Shri Anand Kumar
 (Projects) Director Shri Sushanta Kumar Roy
 (Operations) Director Shri Prakash Tiwari

1.3 RECOGNITIONS AND AWARDS

It feels great to be recognized and rewarded for our efforts. It motivates and Inspires us to better
ourselves. We have been felicitated by various national and
International for a time and again.

 Performance Awards
 NTPC Gets Best Performance Award for PSUs on Central Public Procurement Portal
 NTPC Wins ISTD National Award for Innovative Training Practices 2016-17
 Golden Peacock Award on Energy Efficiency to NTPC-Ramagundam
 NTPC Awarded for Financial Excellence
 NTPC Communication Awards

 CSR Awards
 NTPC Sipat Awarded with Gold Award
 Green Tech CSR and HR Award to NTPC Corporate Centre and Vindhyachals
 Special Award for ‘Swachh Iconic Places’ to NTPC

 Company Rankings
 NTPC Awarded by CBIP as Best Performing Power Utility
 NTPC is the National Champion in AMIA NCM
 NTPC Pavilion bagged the First Prize at 7th Coal Summit and Expo
 NTPC PMI bags ATD Award 2018, Global Award second in succession

1.4 CSR ACTIVITIES

Like the colors of a rainbow, The Corporation’s involvement in community development
projects/ CSR covers a diverse range of issues such as basic infrastructure development,
education, community health & sanitation, capacity building and gender empowerment. The
projects are customized based on specific local requirements and guided by extensive Need
Assessment Surveys and consultations through various participative forums like Village

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 Development Advisory Committee, Rehabilitation and Periphery Development Advisory
Committee etc. The active participation/engagement and ownership of these initiatives by the
local communities is the key to the smooth and successful implementation of these schemes.

CSR OBJECTIVES

To lead the sector in

environment protection
including effective ash
utilization, peripheral
development and energy
conversation practic

To contribute to
sustainable power To lead the sector in
development by the area of
discharging resettlement and
corporate social rehabilitation
responsibility

1.5 HISTORY
 The company was founded on 7 November 1975as "National Thermal Power Corporation
Private Limited". It started work on its first thermal power project in 1976 at Shaktinagar
(named National Thermal Power Corporation Private Limited Singrauli) in Uttar Pradesh. In
the same year, its name was changed to "National Thermal Power Corporation Limited".
 In 1983, NTPC began commercial operations (of selling power) and earned profits of INR 4.5
crores in FY 1982-83.
 By the end of 1985, it had achieved power generation capacity of 2000 MW.
 In 1986, it completed synchronization of its first 500 MW unit at Singrauli.
 In 1988, it commissioned two 500 MW units, one each in Rihand and Ramagundam.
 In 1989, it started a consultancy division.
 In 1992, it acquired Feroze Gandhi Unchahar Thermal Power Station (with from Uttar Pradesh
Rajya Vidyut Utpadan Nigam of Uttar Pradesh.
 By the end of 1994, its installed capacity crossed 15,000 MW.
 In 1995, it took over the Talcher Thermal Power Station from Orissa State Electricity Board.

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 In the year 1997; Government of India conferred it with "Navratna" status. In the same year it
achieved a milestone of generation of 100 billion units of electricity in a year.
 In 1998, it commissioned its first naptha-based plant at Kayamkulam with a capacity of 350
MW.
 In 1999, its plant in Dadri, which had the highest plant load factor (PLF) in India of 96%, was
certified with ISO-14001.
 During 2000, it commenced construction of its first hydro-electric power project, with 800
MW capacity, in Himachal Pradesh.
 In 2002, it incorporated 3 subsidiary companies: "NTPC Electric Supply Company Limited"
for forward integration by entering into the business of distribution and trading of power;
"NTPC Vidyut Vyapar Nigam Limited" for meeting the expected rise in energy trading;
"NTPC Hydro Limited" to carry out the business of implementing and operating small and
medium hydro-power projects. In the same year its installed capacity crossed 20,000 MW.

1.6 VISION & MISSION

To be the world’s Largest and best power

ProducerPowering India’s growth

“Develop and provide reliable power, related products and services

at competitive prices, integrating multiple energy sources with
innovative and eco-friendly technologies and contribute to society.”

1.7 CORE VALUES –BE COMMITTED

B Business ethics.
E Environmentally & economically sustainable.
C Customer focus.
O Organizational & professional pride.
M Mutual respect & trust.

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M Motivating Self & Others.
I Innovation &speed.
T Total quality for excellence.
T Transparent & respected organization.
E Enterprising.
D Devoted.

1.8 FUTURE GOALS

The company has developed a long-term plan to become 128000 MW Company by the year
2032. NTPC Limited is on an expansion spree to meet the power requirements of the country
– it has targeted to add 14,058 MW in 12th Plan (From FY13 to FY 17) of which it had already
added 4,170 MW in the year 2012-13, 1835 MW in the year 2013-14 1290 MW in the year
2014-15 and 1150 MW from April 2015 to 30 November 2015.
NTPC also plans to go global. The public sector company has signed a memorandum of
agreement with the Government of Sri Lanka and Ceylon Electricity Board for setting up a 500
MW (2x250) coal-based thermal power plant in the island nation. A MoU has also been signed
with Kyushu Electric Power Co. Inc., Japan, for establishing an alliance for exchange of
information and experts from different areas of the business. The company is also in the process
of finalising a MoU with Nigeria for setting up power plants against allocation of LNG on
long-term basis for NTPC plants in India. NTPC also developing a joint-venture coal-based
power plant 1,320 MW (2x660) with Bangladesh Power Development Board known
as Bangladesh India Friendship Power Company in Rampal, Bangladesh which is facing
tremendous opposition from the people of Bangladesh owing to the plant's dangerously close
proximity to the Sundarbans.

1.9 LISTINGS AND SHAREHOLDING

The equity shares of NTPC are listed on the Bombay Stock Exchange, where it is a constituent
of the BSE SENSEX index, and the National Stock Exchange of India, where it is a constituent
of the S&P CNX Nifty.

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 Shareholding

Pramoters
Foreign Institutional Investors
Financial Institutions/Banks
Individuals/HUFs
Others

1.10 EMPLOYEES
As of 31 March 2015, the company had 24,067 employees. The attrition rate for the FY 2014-
15, including the trainee employees and employees working for subsidiaries and JVs, was
1.35%. Men MW Ratio of the company has fallen from 0.77 in the FY11 to 0.61 in FY 15.
NTPC has been awarded continuously as great places to work for in PSUs category. And now
they provide government job in the Railway Department. To know more check Exam
Duty post. NTPC was ranked 2nd among the 250 largest power producers and energy traders
in the world by Platts in 2015. On overall basis NTPC ranked 56th amongst Platts 250
companies.

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 1.11 LOCATIONOFNTPC PLANTS

1.12 SUBSIDIARIES OF NTPC

 NTPC Electric Supply Company Ltd. (NESCL)

The company was formed on August 21, 2002. It is a wholly owned subsidiary company of
NTPC with the objective of making a foray into the business of distribution and supply of
electrical power, as a sequel to reforms initiated in the power sector. The company was also
mandated to take up consultancy and other assignments in the area of Electrical Distribution
Management System.

 NTPC Vidyut Vyapar Nigam Ltd. (NVVN)

NTPC Vidyut Vyapar Nigam Ltd. (NVVN) was formed by NTPC Ltd, as its wholly owned
subsidiary to tap the potential of power trading in the country thereby promoting optimum
capacity utilization of generation and transmission assets in the country and to act as a catalyst

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in the development of a vibrant electricity market in India. The company holds the highest
category ‘I’ trading license from CERC.

 Kanti Bijlee Utpadan Nigam Limited,

(Formerly known as Vaishali Power Generating Company Limited) To take over the
Muzaffarpur Thermal Power Station (2*110MW), a subsidiary company named ‘Vaishali
Power Generating Company Limited (VPGCL)’ was incorporated on September 6, 2006 with
NTPC contributing 51% of equity and the balance equity was contributed by the Bihar State
Electricity Board. The company was rechristened as ‘Kanti Bijlee Utpadan Nigam Limited’ on
April 10, 2008. Present equity holding is NTPC 64.57% & BSEB 35.43%. The company is
upgrading the existing unit and establishing new plant.

 Bharatiya Rail Bijlee Company Limited (BRBCL)

A subsidiary of NTPC under the name of ‘Bhartiya Rail Bijlee Company Limited’ was
incorporated on November 22, 2007 with 74:26 equity contribution from NTPC and Ministry
of Railways, Govt. of India respectively for setting up of four units of 250 MW each of
coalbased power plant at
Nabinagar, Bihar. Investment approval of the project was accorded in January, 2008. 90%
power from this project is to be supplied to Railways to meet the traction and non-traction
power requirements.

 Patratu Vidyut Utpadan Nigam Limited (PVUNL)

PVUNL has been incorporated on 15.10.2015 as a subsidiary of NTPC with74% stake in the
Company and 26% of stake held by JBVNL to acquire, establish, operate, maintain, revive,
refurbish, renovate and modernize the performing existing units and further expand capacity
of Patratu Thermal PowerStation, District Ramgarh, Jharkhand in two phases i.e. Phase-I
(3x800 MW) and Phase-II (2x800MW). Government of Jharkhand has issued the Notification
dated 01.04.2016 for transfer of assets of Patratu Thermal Power Station to Patratu Vidyut
Utpadan Nigam Limited.

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1.13 COMPETITORS OF NTPC

COMPANY CUEENT CHANGE (%) TODAY EPS PE

PRICE LOW/HIGH

NTPC Ltd. 121 1.05 (0.88%) 119.25 / 121.75 10.19 11.88

Adani Power Ltd. 66 -0.25 (-0.38%) 65.60 / 67.00 -113.03 -0.58

Gujarat Industries Power Company Ltd. 71.60 -0.10 (-0.14%) 71.50 / 72.15 6.14 11.66

Jaiprakash Power Ventures Ltd. 1.11 -0.01 (-0.89%) 1.10 / 1.14 -1.76 -0.63

NLC India Ltd. 59.90 1.40 (2.39%) 59.10 / 60.50 6.56 9.14

Reliance Power Ltd. 3.32 -0.04 (-1.19%) 3.28 / 3.49 -1.55 -2.14

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 2 CHAPTER - INTRODUCTION

2.1 INTRODUCTION OF THE STUDY

Finance is defined as the provision of money when it is required. Every enterprise needs
finance to start and carry out its operation. Finance is the life blood of an organization. So
finance should be managed effectively. Financial statements are prepared primarily for
decision making. Financial strength and weakness of the firm by properly establishing
statergic relationship between the items of the balance sheet and profit and loss account.
There are various methods and techniques used in analyzing financial statements, such as
comparative statements, trend analysis, common size statement, schedule of changes in
working capital, ratio analysis the analysis of financial statement is used for decision making
by various parties.
1. First work is to analyze and select the information which is required for the study.
2. Then second work is to arrange the information in a way to highlight significant
relationship.
3. Final task is the interpretation and drawing of inferences and conclusions.

2.2 PURPOSE OF STUDY

The present study is made as a student of MSc Finance forms of the practical work with the
following activities.
 To know the financial position of the NTPC
 The company has the strength to fulfill its obligation or not
 Find out strength and weakness of ntpc
 Performance as well as growth rate of NTPC
 Know the liquidity position, long term solvency, operation efficiency, overall
profitability of ntpc

2.3 OBJECTIVE OF STUDY

The major objectives of financial statement analysis are to provide decision makers
information about a business enterprise for use in decision-making. Users of financial
statement information are the decision makers concerned with evaluating the economic
situation of the firm and predicting its future course.
Past performance is often a good indicator of future performance. Therefore, an investor or
creditor is interested in the trend of past sales, expenses, net income, cast flow and return on
investment. These trends offer a means for judging management’s past performance and are
possible indicators of future performance.

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Similarly, the analysis of current position indicates where the business stands today. For
instance, the current position analysis will show the types of assets owned by a business
enterprise and the different liabilities due against the enterprise. It will tell what the cash
position is, how much debt the company has in relation to equity and how reasonable the
inventories and receivables are.
The financial statement analysis helps in predicting the earning prospects and growth rates in
the earnings which are used by investors while comparing investment alternatives and other
users interested in judging the earning potential of business enterprises. Financial statement
analysis is a significant tool in predicting the bankruptcy and failure probability of business
enterprises.

2.4 SCOPE OF THE STUDY

The data and information were gathere from website of the company
The scope is limited to the secondary data only

2.5 METHODOLOGY
The research involved extensive and intensive studies of ntpc in this project
report a sincere effort has been made to study the financial statements analysis of the
company. During this study, I study the financial position and performance of the company.
At last, I have given interpretation and conclusion of the study.

2.6 DATA COLLECTION

The whole of my study is based on secondary data of ntpc. I have not taken any primary data
for my study because primary data would not have been helpful to my study. During the
tenure of my study I have taken help of the following secondary data.
 Annual report of ntpc
 Annual audit report of ntpc
 Balance sheet of ntpc
 Development action plan of ntpc
 Profit and loss account of ntpc

2.7 TOOLS
 Ratio analysis
 Trend analysis
 Fund flow analysis

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 3 CHAPTER - PROJECT OVERVIEW

3.1 INTRODUCTION OF FINANCIAL STATEMENT

Finance is defined as the provision of money when it is required. Every enterprise needs
finance to start and carry out its operation. Finance is the lifeblood of an organization. So,
finance should be managed effectively.
Financial statement is prepared primarily for decision making. Finance statement analysis
refers to the process of determining financial strength and weakness of the firm by properly
establishing strategic relationship between the items of the balance sheet and profit and loss
account. There are various methods and techniques used in analyzing financial statements,
such as comparative statements, trend analysis, common size statements, schedule of changes
in working capital, funds flow and cash flow analysis, cost volume profit analysis and ratio
analysis and other operative data. The analysis of financial statement is used for decision
making by various parties.

3.2 TYPES OF FINANCIAL ANALYSIS

Financial statements analysis are classified according to their objectives, Materials used and
Modus operandi.

On the basis of material used. According to material used, financial analysis can be of two
types:

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a) External Analysis - This analysis is done by outsiders who do not have access to the
detailed internal accounting records of the business firm. These outsiders include
investors, potential investors, creditors, potential creditors, government agencies, credit
agencies, and the general public. For financial analysis, these external parties to the firm
depend almost entirely on the published financial statements. External analysis, thus
serves only a limited purpose. However, the recent changes in the government
regulations requiring business firms to make available more detailed information to the
public through audited published accounts have considerably improved the position of
the external analysis.
b) Internal Analysis - The analysis conducted by persons who have access to the internal
accounting records of a business firm is known as internal analysis. Such an analysis can,
therefore, be performed by executives and employees of the organization as well as
government agencies which have statutory powers vested in them. Financial analysis for
managerial purposes is the internal type of analysis that can be affected depending upon
the purpose to be achieved.
On the basis of modus operandi. According to the method of operation followed in the
analysis, financial analysis can also be of two types:

a) Horizontal Analysis - Horizontal analysis refers to the comparison of financial

data of a company for several years. The figures for this type of analysis are presented
horizontally over a number of columns. The figures of the various years are compared
with standard or base year. A base year is a year chosen as beginning point. This type
of analysis is also called 'Dynamic Analysis' as it is based on the data from year to year
rather than on data of any one year. The horizontal analysis makes it possible to focus
attention on items that have changed significantly during the period under review.
Comparison of an item over several periods with a base year may show a trend
developing. Comparative statements and trend percentages are two tools employed in
horizontal analysis.

b) Vertical Analysis - Vertical analysis refers to the study of relationship of the

various items in the financial statements of one accounting period. In this types of
analysis the figures from financial statement of a year are compared with a base
selected from the same year's statement. It is also known as 'Static Analysis'. Common-
size financial statements and financial ratios are the two tools employed in vertical
analysis. Since vertical analysis considers data for one time period only, it is not very
conducive to a proper analysis of financial statements. However, it may be used along
with horizontal analysis to make it more effective and meaningful.

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 3.3 PROCEDURE OF FINANCIAL STATEMENTS
ANALYSIS
Broadly speaking there are three steps involved in the analysis of financial statements. These
are: (i) selection, (ii) classification, and (iii) interpretation. The first step involves selection of
information (data) relevant to the purpose of analysis of financial statements. The second step
involved is the methodical classification of the data and the third step includes drawing of
inferences and conclusions.
(1) The analyst should acquaint himself with the principles and postulates of accounting. He
should know the plans and policies of the management so that he may be able to find out
whether these plans are properly executed or not.
(2) The extent of analysis should be determined so that the sphere of work may be decided.
If the aim is to find out the earning capacity of the enterprise then analysis of income
statement will be undertaken. On the other hand, if financial position is to be studied then
balance sheet analysis will be necessary.
(3) The financial data given in the statements should be re-organized and rearranged. It will
involve the grouping of similar data under same heads, breaking down of individual
components of statements according to nature. The data is reduced to a standard form.
(4) A relationship is established among financial statements with the help of tools and
techniques of analysis such as ratios, trends, common size, funds flow etc.
(5) The information is interpreted in a simple and understandable way. The significance and
utility of financial data is explained for helping decision taking.
(6) The conclusions drawn from interpretation are presented to the management in the form
of reports.

3.4 METHODS OR DEVICES OF FINANCIAL ANALYSIS

The analysis and interpretation of financial statements is used to determine the financial
position and results of operations as well. A number of methods or devices are used to study
the relationship between different statements. An effort is made to use those devices which
clearly analyze the position of the enterprise. The following methods of analysis are generally
used:
(1) Comparative statements
(2) Trend analysis
(3) Common -size statements
(4) Funds flow analysis
(5) Cash flow analysis
(6) Ratio analysis
(7) Cost-volume-profit analysis the first three methods, i.e., comparative statements, trend
analysis and common-size statements are discussed in the following pages of this chapter.

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Funds flow, cash flow, ratio analysis and cost-volume-profit analysis have been discussed in
separate chapters later in the book

4 CHAPTER - DATA 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 a fascinating topic to study because it can teach us so much about
accounts and businesses. When we use ratio analysis, we can work out how profitable a
business is, we can tell if it has enough money to pay its bills and we can even tell whether
its shareholders should be happy! Ratio analysis can also help us to check whether a business
is doing better this year than it was last year; and it can tell us if our business is doing better
or worse than other. Businesses doing and selling the same things. In addition to ratio analysis
being part of an accounting and business studies syllabus, it is a very useful thing to know
any way! The overall layout of this section is as follows: We will begin by asking the
question, what do we want ratio analysis to tell us? Then, what will we try to do with it? This
is the most important question, funnily enough! The answer to that question then means we

18
need to make a list of all of the ratios we might use: we will list them and give the formula
for each of them. Once we have discovered all of the ratios that we can use we need to know
how to use them, who might use them and what for and how will it help them to answer the
question. We asked at the beginning? At this stage we will have an overall picture of what
ratio analysis is, who uses it and the ratios they need to be able to use it. All that's left to do
then is to use the ratios; and we will do that step- by-step, one by one.

4.1 BALANCE SHEET

Balance sheet as on 31st March 2019

Rs (In Crores)
Particulars Mar'19 Mar'18 Mar'17 Mar'16 Mar'15
Liabilities
Share Capital 9894.56 8245.46 8245.46 8245.46 8245.46
Reserves & 97513.61 93532.31 87985.77 83048.24 73411.89
Surplus
Net Worth 107408.17 101777.77 96231.23 91293.7 81657.35
Secured Loan 48003.6 26185.84 26854.74 86396.45 23017.83
Unsecured 87197.38 89012.08 73485.1 0 55514.5
Loan
Total Liabilities 242609.15 216975.69 196571.07 177690.15 160189.68
Assets
Gross Block 153305.99 141070.95 111707.62 97605.89 128323.66
Depreciation 27685.37 20018.74 12351.9 5832.64 49474.59
Net Block 125620.62 121052.21 99355.72 91773.25 78849.07
Capital Work in 91206.69 77783.23 80737.09 66423.2 56493.49
Progress
Investments 13145.94 10047.48 8248.11 8393.04 9032.13
Inventories 7988.02 6057.38 6504.81 7010.37 7453
Sundry Debtors 8433.86 7577.97 8137.92 7732.22 7604.37
Cash and Bank 2144.34 3978.38 2930.49 4460.78 12878.81
Loans and 42338.3 33696.91 30663.35 29345.46 24773.85
Advances
Total Current 60904.52 51310.64 48236.57 48548.83 52710.03
Assets
Current 40839.52 34648.14 31578.35 30236.07 28020.58
Liabilities
Provisions 7429.1 8569.73 8428.07 7212.1 8874.46
Total Current 48268.62 43217.87 40006.42 37448.17 36895.04
Liabilities

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Net Current 12635.9 8092.77 8230.15 11100.66 15814.99
Assets
Misc. Expenses 0 0 0 0 0
Total Assets 242609.15 216975.69 196571.07 177690.15 160189.68

4.2 PROFIT AND LOSS ACCOUNT

Profit and Loss a/c for the year ended 31st March 2019
Rs (in Crores)
Mar'19 Mar'18 Mar'17 Mar'16 Mar'15

Income:
Sales Turnover 90307.4 83452.7 78273.4 70843.8 73915.7
Excise Duty 0 0 0 0 669.64
Net Sales 90307.4 83452.7 78273.4 70843.8 73246.1
Other Income 1872.13 1755.25 1068.86 1165.35 2318.22
Total Income 92179.6 85208 79342.3 72009.2 75564.3
Expenditure:
Manufacturing 56586.3 50778.8 48336.7 44513.8 49500.9
Expenses
Material Consumed 86.31 73.61 57.48 53.89 48.34
Personal Expenses 4779.89 4734.67 4324.6 3581.65 3669.78
Selling Expenses 20.52 30.74 18.88 17.32 0
Administrative 6062.92 6167.6 4251.52 4790.1 4477.2
Expenses
Total Expenditure 67535.9 61785.4 56989.2 52956.7 57696.2
Operating Profit 22771.5 21667.3 21284.3 17887.1 15549.9
EBITDA 24643.6 23422.6 22353.1 19052.4 17868.1
Depreciation 7254.36 7098.86 5920.82 5172.34 4911.65
EBIT 17389.3 16323.7 16432.3 13880.1 12956.4
Interest 4716.74 3984.25 3597.2 3296.41 2743.62
EBI 12672.5 12339.5 12835.1 10583.7 10212.8
Taxes 2918.71 1996.29 2666.9 173.83 255.79
Profit and Loss for The 15591.2 10343.2 10168.2 10757.5 9957.03
Year
Nonrecurring Items 4026.47 7.28 1021.61 26.26 0
Other Non-Cash 0 0 0 0 333.83
Adjustments
Other Adjustments 185.13 7.28 238.66 38.35 0
Reported Pat 11749.9 10343.2 9385.26 10769.6 10290.9
Key Items
Preference Dividend 0 0 0 0 0

20
 Equity Dividend 3922.06 3223.88 2867.24 2199.92 1643.98

Equity Dividend (%) 39.63 39.09 34.77 26.68 19.93

Shares In Issue (Lakhs) 98945.6 82454.6 82454.6 82454.6 82454.6
Eps - Annualised (Rs) 11.88 12.54 11.38 13.06 12.48

4.3 RATIO ANALYSIS

Ratio analysis is one of the techniques of financial analysis to evaluate the financial condition
and performance of a business concern. Simply, ratio means the comparison of one figure to
other relevant figure or figures. According to Myers, “Ratio analysis of financial statements is
a study of relationship among various financial factors in a business as disclosed by a single
set of statements and a study of trend of these factors as shown in a series of statements.”

4.3.1 A. PROFITABILITY RATIOS

1. Gross Profit Ratio (GP ratio):

Gross profit ratio is the ratio of gross profit to net sales expressed as a percentage. It expresses
the relationship between gross profit and sales. Gross profit ratio may be indicated to what
extent the selling prices of goods per unit may be reduced without incurring losses on
operations. It reflects efficiency with which a firm produces its products. As the gross profit
is found by deducting cost of goods sold from net sales, higher the gross profit better it is.

GROSS PROFIT RATIO = (GROSS PROFIT / NET SALES) *100

YEAR 2019 2018 2017 2016 2015

GROSS PROFIT 15514.82 14562.50 15357.24 12709.38 10635.33

NET SALES 90307.43 83452.7 78273.44 70843.81 73246.05

GROSS PROFIT RATIO 17.18 17.45 19.62 17.94 14.52

GRAPHICAL REPRESENTATION

21
 Gross Profit

19.62
17.45 17.94
17.18
14.52

GROSS PROFIT RATIO

2019 2018 2017 2016 2015

INTERPRITATION
From 2015 to 2018 the gross profit ratio is continuously increasing up to 2017. it is slightly
decreasing from 2017-2019. In 2019 as compare to 2017 the net sales is increase’s but the
gross profit remains same. that’s why it is reflected in ratio. But the overall ntpc gross profit
margin is good.

2. Net Profit Ratio (NP Ratio):

Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage.
NP ratio is used to measure the overall profitability and hence it is very useful proprietors.
The ratio is very useful as if the net profit is not sufficient, the firm shall not be able to achieve
a satisfactory return on its investment. This ratio also indicates the firm's capacity to face
adverse economic conditions such as price competition, low demand, etc. Obviously, higher
the ratio the better is the profitability

NET PROFIT RATIO = (NET PROFIT/NET SALES*100)

YEAR 2019 2018 2017 2016 2015
NET PROFIT 11749.89 10343.17 9385.26 10769.6 10290.86

22
 NET SALES 90307.43 83452.7 78273.44 70843.81 73246.05
NET PROFIT RATIO 13.01 12.39 11.99 15.20 14.05

GREPRESENTATION

NP Ratio

15.20
14.05
13.01
12.39 11.99

NET PROFIT RATIO

2019 2018 2017 2016 2015

INTERPRITATION
From above representation we can say this the highest net profit margin is in year 2016. NTPC
converted only 12.5 % her sales into profit in average another 4 years. But the graph says that
after the ups and downs NTPC continuously growing her gross profit from 2017 to 2019.

3. Operating Ratio:
Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales. It is
generally expressed in percentage. It measures the cost of operations per dollar of sales. This
is closely related to the ratio of operating profit to net sales. Operating ratio shows the
operational efficiency of the business. Lower operating ratio shows higher operating profit
and vice versa. An operating ratio ranging between 75%and 80% is generally considered as
standard for manufacturing concerns.

OPERATING RATIO = (OPERATING PROFIT / NET SALES) *100

YEAR 2019 2018 2017 2016 2015

23
 OPERATING PROFIT 22771.49 21667.32 21284.27 17887.08 15549.87
NET SALES 90307.43 83452.7 78273.44 70843.81 73246.05
OPERATING PROFIT RATIO 25.22 25.96 27.19 25.25 21.23

GRAPHICAL REPRESENTATION

Operating Profit Ratio

27.19
25.22 25.96 25.25

21.23

OPERATING PROFIT RATIO

2019 2018 2017 2016 2015

INTERPRITATION
In 2015 the operating profit ratio is 21.23% it means 78.77% is used to pay for variable cost
and only 21.23 % remains to cover all non-operating expenses or fixed costs. The proportion
of not profit expenses is increase’s and along with the variable cost proportion is decreases.

4. Return on Equity (ROE):

Return on equity measures the profitability of equity fund invested in the firm. This ratio
reveals how profitably of the owner funds have been utilized by the firm. Return on equity is
one of the most important indicators of a firm’s profitability and potential growth. Companies
that boast a high return on equity with little or no debt are able to grow without large capital
expenditure, allowed the owner of the business to it draw cash and reinvest it elsewhere.

RETURN ON EQUITY= (NET PROFIT AFTER TAX - PREFERENCE

DIVIDEND)/NET WORTH*100
YEAR 2019 2018 2017 2016 2015
NET PROFIT AFTER TAX 15591.23 10343.17 10168.21 10757.51 9957.03
(NPAT)

24
 NET WORTH 107408.17 101777.77 96231.23 91293.7 81657.35
RETURN ON EQUITY RATIO 14.52 10.16 10.57 11.78 12.19

GRAPHICAL REPRESENTATION

Return on Equity Ratio

14.52

11.78 12.19

10.16 10.57

RETURN ON EQUITY RATIO

2019 2018 2017 2016 2015

INTERPRITATION
This ratio indicates the productivity of the owned funds employed in the firm. NTPC Ltd.
Decreasing the returns from the year 2015 to year 2018. but then in the year 2019 its changed
returns are incasing. NTPC had good return on investment in last year and it is good for
company.

5. Earnings Per Share Ratio (EPS):

Earnings per share ratio (EPS Ratio) are a small variation of return on equity capital ratio and
are calculated by dividing the net profit after taxes and preference dividend by the total number
of equity shares. The earnings per share is a good measure of profitability and when compared
with EPS of similar companies, it gives a view of the comparative earnings or earnings power
of the firm. EPS ratio calculated for a number of years indicates whether or not the earning
power of the company has increased.

EARNINGS PER SHARE= (NET PROFIT AFTER TAX - PREFERENCE

DIVIDEND)/NO. OF EQUITYSHARE
YEAR 2019 2018 2017 2016 2015

25
 PROFIT AVAILABLE FOR 11749.89 10343.17 9385.26 10769.6 10290.86
EQUITY SHAREHOLDERS
NO OF EQUITY SHARES 989.46 824.55 824.55 824.55 824.55
EARNINGS PER SHARE (EPS) 11.88 12.54 11.38 13.06 12.48

GRAPHICAL REPRESENTATION

Earning Per Ratio

13.06

12.54 12.48

11.88

11.38

EARNINGS PER SHARE

2019 2018 2017 2016 2015

INTERPRITATION
From the above graph, we can say that NTPC had the highest earning per share in 2016 and
lowers in 2017 this fluctuation is very big due to the net profit changes. The no. of shareholders
are remains same. NTPC have ability to increase their earning per share.

6. Price Earnings Ratio (PE ratio):

Price earnings ratio (P/ E ratio) is the ratio between market price per equity share and earning
per share. The ratio is calculated to make an estimate of appreciation in the value of a share
of a company and is widely used by investors to decide whether or not to buy shares in a
particular company. Price earnings ratio helps the investor in deciding whether to buy or not
to buy the shares of a particular company at a particular market price. Generally, higher the
price earnings ratio the better it is. If the P/E ratio falls, the management should look into the
causes that have resulted into the fall of this ratio.

PRICE EARNINGS RATIO = (MARKET PRICE PER EQUITY SHARE

/EARNING PER SHARE)

26
 YEAR 2019 2018 2017 2016 2015

MARKET PRICE PER SHARE 121 107 138 141 135

EARNING PER SHARE (EPS) 11.88 12.54 11.38 13.06 12.48

PRICE-EARNING PER SHARE 10.19 8.53 12.12 10.80 10.82

GRAPHICAL REPRESENTATION

PE Ratio

12.12
10.8 10.82
10.19

8.53

PRICE-EARNING PER SHARE

2019 2018 2017 2016 2015

INTERPRITATION
The Price earnings ratio shows the valuation of the company, in the year 2017 company had
high P/E ratio which was good for the year. And also, other four years apart from 2018 the
company had good P/E ratio which was good for the organization. This ratio encourages
investors to invest in NTPC.

4.3.2 B. LIQUIDITYRATIOS

1. Current Ratio:
Current ratio may be defined as the relationship between current assets and current liabilities.
This ratio is also known as "working capita l ratio". It is a measure of general liquidity and is
most widely used to make the analysis for short term financial position or liquidity of a firm.
It is calculated by dividing the total of the current assets by total of the current liabilities. A
relatively high current ratio is an indication that the firm is liquid and has the ability to pay
its current obligations in time and when they become due. An increase in the current ratio
represents improvement in the liquidity position of the firm while a decrease in the current

27
ratio represents that there has been deterioration in the liquidity position of the firm. A ratio
equal to or near 2:1 is considered as a standard or normal or satisfactory.

CURRENT RATIO= (CURRENT ASSESTS/CURRENT LIABILITY)

YEAR 2019 2018 2017 2016 2015
CURRENT ASSEST 60904.52 51310.64 48236.57 48548.83 52710.03
CURRENT LIABILITY 48268.62 43217.87 40006.42 37448.17 36895.04
CURRENT RATIO 1.26 1.19 1.21 1.30 1.43

GRAPHICAL REPRESENTATION

Current Ratio

1.43
1.26 1.30
1.19 1.21

CURRENT RATIO

2019 2018 2017 2016 2015

INTERPRITATION
The performs of the current ratio might have decreased but after the 2018 it is upward. this
ratio shows the ability to pay the short-term borrowing. NTPC had good enough assets to pay
the liability.

2. Liquid or Quick Ratio:

Liquid ratio is also termed as "Liquidity Ratio”, “Acid Test Ratio" or "Quick Ratio ". It is the
ratio of liquid assets to current liabilities. The true liquidity refers to the ability of a firm to
pay its short-term obligations as and when they become due It is used as a complementary

28
ratio to the current ratio. Liquid ratio is more rigorous test of liquidity than the current ratio
because it eliminates inventories and prepaid expenses as a part of current assets. Usually a
high liquid ratio an indication that the firm is liquid and has the ability to meet its current or
liquid liabilities in time and on the other hand a low liquidity ratio represents that the firm’s
liquidity position is not good

LIQUIDITY RATIO= (QUICKASSETS/CURRENTLIABILITY)

YEAR 2019 2018 2017 2016 2015
QUICK ASSEST 52916.5 45253.26 41731.76 41538.46 45257.03
CURRENT LIABILITY 48268.62 43217.87 40006.42 37448.17 36895.04
QUICK RATIO 1.10 1.05 1.04 1.11 1.23

GRAPHICAL REPRESENTATION

Quick ratio

1.23

1.11
1.10

1.05 1.04

QUICK RATIO

2019 2018 2017 2016 2015

INTERPRITATION
This ratio is more effective to the current ratio. It shows the liquidity to pay the short-term
borrowing. All five years apart from 2015 the ratio is below 1.20 and the year 2017-18 is
shows the lower liquidity. But the overall ratio is good.

3.Average Collection Period

The average collection period is the amount of time it takes for a business to receive payments
owed by its clients in terms of accounts receivable (AR). Companies calculate the average

29
collection period to make sure they have enough cash on hand to meet their financial
obligations.

The average collection period is calculated by dividing the average balance of accounts
receivable by total net credit sales for the period and multiplying the quotient by the number
of days in the period.

Average collection periods are most important for companies that rely heavily on receivables
for their cash flows.

AVERAGE TURNOVER RATIO = ACCOUNT RECIVABLE/NET

SALES/365

YEAR 2019 2018 2017 2016 2015

AVERAGE RECIVABLE 8005.92 7857.95 7935.07 7668.30 6412.23

TURNOVER
NET SALES/365 247.42 228.64 214.45 194.09 200.67

AVERAGE COLLECTION 32.36 34.37 37.00 39.51 31.95

PERIOD

GRAPHICAL REPRESENTATION

Average Collection Period

39.51
37
34.37
32.36 31.95

AVERAGE COLLECTION PERIOD

2019 2018 2017 2016 2015

INTERPRITATION

30
As per the last 5years data company had a less collection period which is good for the
organization. In the year 2016 only the average collection period was 39 days other than that
all are less than this. The company had a good collection period. Which means the company
use to take short run to turn receivable into cash.

4. Net Working Capital Ratio:

Net working capital is more a measure of cash flow than a ratio. The result of this calculation
must be a positive number. Bankers look at net working capital over time to determine a
company’s ability to weather financial crises. Loans are often tied to minimum working
capital requirements.

NET WORKING CAPITAL RATIO= CURRENT ASSESTS-CURRENT

LIABILITY
YEAR 2019 2018 2017 2016 2015
CURRENT ASSEST 60904.52 51310.64 48236.57 48548.83 52710.03
CURRENT LIABILITY 48268.62 43217.87 40006.42 37448.17 36895.04
WORKING CAPITAL RATIO 12635.90 8092.77 8230.15 11100.66 15814.99

GRAPHICAL REPRESENTATION

Working Capital Ratio

15814.99

12635.90
11100.66

8092.77 8230.15

WORKING CAPITAL RATIO

2019 2018 2017 2016 2015

INTERPRITATION

31
This ratio shows the companies ready to face the uncertainty. working capital tell us after the
payment of liabilities how much we have retained. And the above graph shows all positive no.
it is clear NTPC have enough cash flow. Between 2015 to 2019 it is fall down but after that it
is raised in 2019

4.3.3 C. ACTIVITY RATIOS

1. Debtors Turnover Ratio:

Debtor’s turnover ratio indicates the velocity of debt collection of a firm. In simple word sit
indicates the number of times average debtors (receivable) are turned over during a year. This
ratio indicates the number of times the debtors are turned over a year. The higher the value of
debtor’s turnover the more efficient is the management of debtors or more liquid the debtors
are. Similarly, l debtors turnover ratio implies inefficient management of debtors or less liquid
debtors. It is the reliable measure of the time of cash flow from credit sales.

DEBTORS TURNOVER RATIO= (NET CREDITSALES/AVERAGE

TRADE DEBTOR)
YEAR 2019 2018 2017 2016 2015
NET CREDIT SALES 90307.43 83452.7 78273.44 70843.81 73246.05
AVERAGE TRADE DEBTORS 8005.92 7857.95 7935.07 7668.30 6412.23
DEBTORS TURNOVER RATIO 11.28 10.62 9.86 9.24 11.42

GRAPHICAL REPRESENTATION

32
 Debtors Turnover Ratio

11.28 11.42
10.62
9.86
9.24

DEBTORS TURNOVER RATIO

2019 2018 2017 2016 2015

INTERPRITATION
From the above graph it is clearly define that stability of the firm to debtor’s turnover. From
2015 to 2019 the ratio is fluctuated. But the debt collection capacity is remains the same. It is
very low in 2016. After that they try to increase the debtor’s turnover.

2. Working Capital Turnover Ratio:

Working capital turnover ratio indicates the velocity of the utilization of net working capital.
This ratio represents the number of times the working capital is turned over in the course of
year. The working capital turnover ratio measures the efficiency with which the working
capital is being used by a firm. A high ratio indicates efficient utilization of working capital
and a low ratio indicates otherwise. But a very high working capital turnover ratio may also
mean lack of sufficient working capital which is not a good situation

WORKING CAPITAL TURNOVER RATIO = (COST OF SALES/NET

WORKING CAPITAL)
YEAR 2019 2018 2017 2016 2015
NET SALES 90307.43 83452.7 78273.44 70843.81 73246.05
NET WORKING CAPITAL 12635.90 8092.77 8230.15 11100.66 15814.99
WORKING CAPITAL 7.15 10.31 9.51 6.38 4.63
TURNOVER RATIO

GRAPHICAL REPRESENTATION

33
 Working Capital Turnover Ratio

10.31
9.51

7.15
6.38

4.63

WORKING CAPITAL TURNOVER RATIO

2019 2018 2017 2016 2015

INTERPRITATION
This ratio tells us that NTPC have sufficient working capital and also they utilized this from
the year 2015 to 2018 the use of working capital is raised. But the more use of this capital
shows lack of efficiency of NTPC. then in the year 2019 NTPC maintain the proper utilization
of working capital.

3. Fixed Assets Turnover Ratio:

Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio measures the
efficiency and profit earning capacity of the concern. Higher the ratio indicates intensive
utilization of fixed assets in generating sales. Lower ratio means under-utilization of fixed
assets.

FIXED ASSETS TURNOVER RATIO: (NET SALES/FIXED ASSETS)

YEAR 2019 2018 2017 2016 2015
NET SALES 90307.43 83452.7 78273.44 70843.81 73246.05
FIXED ASSEST 181704.63 165665.05 148334.5 129141.32 107479.65
FIXED ASSESTS TURNOVER 0.50 0.50 0.53 0.55 0.68
RATIO

GRAPHICAL REPRESENTATION

34
 Fixed Assests Turnover Ratio

0.68

0.53 0.55
0.50 0.50

FIXED ASSESTS TURNOVER RATIO

2019 2018 2017 2016 2015

INTERPRITATION

Profit earning capacity is very good in 2015 by the time is not much changes. the utilization
of fixed assets for the earning profit is good. Fixed assets are properly used but it requires
more utilization. For the increasing the profit earning capacity.

4. Inventory Turnover Ratio:

This ratio also known as stock turnover ratio establishes the relationship between the cost of
goods sold during the year and average inventory held during the year. It measures the
efficiency with which a firm utilize and manages its inventory. The ratio indicates that how
fast inventory is used or sold. A high ratio is good from the view point of liquidity and vise
versa. A low ratio indicate that inventory not used/lost/sold and stays in a shelf or in the
warehouse for a long time.
INVENTORY TURNOVER RATIO= (SALES/AVERAGE INVENTORY)

YEAR 2019 2018 2017 2016 2015

NET SALES 90307.43 83452.7 78273.44 70843.81 73246.05
AVERAGE INVENTORY 3994.01 3028.69 3252.405 3505.185 3726.5
INVENTORY TURNOVER 22.61 27.55 24.07 20.21 19.66
RATIO

GRAPHICAL REPRESENTATION

35
 Inventory Turnover Ratio

27.55

24.07
22.61
20.21 19.66

INVENTORY TURNOVER RATIO

2019 2018 2017 2016 2015

INTERPRITATION
This ratio same as the working capital turnover ratio the difference is only their it shows the
use of working capital here it is shows the inventory utilization. From the above graph we can
say this the utilization of inventory is more in 2018. And overall utilization of inventory is
good.

4.3.4 D. LEVERAGE RATIOS OR LONG-TERM SOLVENCY RATIOS:

1. Debt–to-Equity Ratio:
Debt-to-Equity ratio indicates the relationship between the external equities or out siders
funds and the internal equities or shareholders’ funds. It is also known as external internal
equity ratio. It is determined to ascertain soundness of the long-term financial policies of the
company. The purpose is to get an idea of the cushion available to outsiders on the liquidation
of the firm. A ratio of 1:1 is usually considered to be satisfactory ratio although there cannot
be rule of thumb or standard norm for all types of businesses. Theoretically if the owner’s
interests are greater than that of creditors, the financial position is highly solvent.

DEBT EQUITY RATIO= (EXTERNAL EQUITIES/INTERNAL EQUITIES)

YEAR 2019 2018 2017 2016 2015

36
 EXTERNAL EQUITY 135200.9 115197. 100339. 86396.4 78532.3
8 9 8 5 3
INTERNAL EQUITY 107408.1 101777. 96231.2 91293.7 81657.3
7 8 3 5
DEBT TO EQUITY 1.26 1.13 1.04 0.95 0.96

GRAPHICAL REPRESENTATION

Debt to Equity

1.26
1.13
1.04
0.95 0.96

DEBT TO EQUITY

2019 2018 2017 2016 2015

INTERPRITATION
This ratio shows us from the above graph the external liability is less the internal liability in
2015 and 2016. But the year 2018 and 2019 the external liability more from the internal
liability. It is not good or bad. It only tells us the situation of the NTPC. In year 2017 the ratio
is nice it equal to internal and external liabilities.

2. Proprietary or Equity Ratio:

This is a variant of the debt-to-equity ratio. It is also known as equity ratio or net worth to total
assets ratio. This ratio relates the shareholder's funds to total assets. Proprietary /Equity ratio
indicates the long-term or future solvency position of the business. This ratio throws light on
the general financial strength of the company. It is also regarded as a test of the soundness of
the capital structure. Higher the ratio or the share of shareholders in the total capital of the
company better is the long-term solvency position of the company. A low proprietary ratio
will include greater risk to the creditors.

37
PROPRIETARY RATIO= (SHAREHOLDERS FUNDS/TOTAL ASSETS)
*100
YEAR 2019 2018 2017 2016 2015
SHAREHOLDERS FUND 107408.17 101777.7 96231.23 91293.7 81657.35
7
TOTAL ASSEST 242609.1 216975.7 196571. 177690.1 160189.6
5 1 5 8
EQUITY RATIO 44.27 46.91 48.95 51.38 50.98

GRAPHICAL REPRESENTATION

Equity Ratio

51.38
50.98

48.95

46.91

44.27

EQUITY RATIO

2019 2018 2017 2016 2015

INTERPRITATION
The equity ratio is highest in 2016 and low in 2019. The return on equity is very low in last
year as compare to 2015 and 2016. The slope is decreases year by year and it is not good for
the NTPC. NTPC have to focused on their Equities.

3. Interest Coverage Ratio:

This ratio indicates the firm’s ability to meet interest (and other fixed-charges) obligations.
Earning before interest and tax are used in the numerator of this ratio because the ability to
pay interest is nor affected by tax burden as interest on debt funds is deductible expenses. A
high interest coverage ratio means that an enterprise can easily meet its interest obligations
even is earning before interest and taxes suffer a considerable decline.

38
INTEREST COVERAGE RATIO = (EARNING BEFORE INTEREST AND
TAX/INTEREST)

YEAR 2019 2018 2017 2016 2015

EARNING BEFORE INTEREST 17389.26 16323.71 16432.31 13880.09 12956.44

AND TAX(EBIT)
INTEREST 4716.74 3984.25 3597.2 3296.41 2743.62
INTEREST COVERAGE RATIO 3.69 4.10 4.57 4.21 4.72

GRAPHICAL REPRESENTATION

Interest Coverage Ratio

4.72
4.57
4.10 4.21
3.69

INTEREST COVERAGE RATIO

2019 2018 2017 2016 2015

INTERPRITATION
The ability to meet the interest of NTPC is good. Overall stability is good but from 2015 to
2019 it is decreases by 2% but it is not that much harmful to NTPC. The highest interest
coverage ratio is in 2015 and 2017 is almost close to 5%.

39
 5 CHAPTER – FINDINGS

5.1 FINDING
There is a huge crisis over energy in the world especially in the field of electricity. India is
also victim of the same condition. In spite of several effort taken by the governments in this
regard, there is enormous possibility exists. NTPC is a key organization in India as far as the
supply of power is concerned. After successfully conducting this project work, it can be said
that the financial health of NTPC is sound enough and it appears positive in accordance with
its balance sheet and profit & loss A/c which are available to me. Some other finding there are
1.We can easily find that company net profit ratio fallen compare to previous years means
company profit decrease.
2.Return on equity capital ratio compare to previous year ratio which shows the company
regularly dividend paid.
3. Company earning per ratio is also good.
4. Company current ratio is very good which shows highly liquidity available.
5. Company stock turnover ratio which shows full utilization of stock.

5.2 REFERENCES:

https://www.ntpc.co.in

https://www.moneycontrol.com

https://m.economictimes.com

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41