This document analyzes and compares the ratio analysis of ITC and Britannia over five fiscal years from 2018-2022 across several metrics including liquidity, leverage, profitability, turnover, return, and valuation ratios. The key findings are that ITC generally has stronger liquidity and leverage ratios compared to Britannia, indicating it is more financially stable, while Britannia has better profitability, turnover, and valuation ratios, suggesting it may provide higher returns to shareholders. Overall, the document evaluates and benchmarks the financial performance and health of these two companies using various accounting ratios.
This document analyzes and compares the ratio analysis of ITC and Britannia over five fiscal years from 2018-2022 across several metrics including liquidity, leverage, profitability, turnover, return, and valuation ratios. The key findings are that ITC generally has stronger liquidity and leverage ratios compared to Britannia, indicating it is more financially stable, while Britannia has better profitability, turnover, and valuation ratios, suggesting it may provide higher returns to shareholders. Overall, the document evaluates and benchmarks the financial performance and health of these two companies using various accounting ratios.
This document analyzes and compares the ratio analysis of ITC and Britannia over five fiscal years from 2018-2022 across several metrics including liquidity, leverage, profitability, turnover, return, and valuation ratios. The key findings are that ITC generally has stronger liquidity and leverage ratios compared to Britannia, indicating it is more financially stable, while Britannia has better profitability, turnover, and valuation ratios, suggesting it may provide higher returns to shareholders. Overall, the document evaluates and benchmarks the financial performance and health of these two companies using various accounting ratios.
This document analyzes and compares the ratio analysis of ITC and Britannia over five fiscal years from 2018-2022 across several metrics including liquidity, leverage, profitability, turnover, return, and valuation ratios. The key findings are that ITC generally has stronger liquidity and leverage ratios compared to Britannia, indicating it is more financially stable, while Britannia has better profitability, turnover, and valuation ratios, suggesting it may provide higher returns to shareholders. Overall, the document evaluates and benchmarks the financial performance and health of these two companies using various accounting ratios.
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Sakshi kshirsagar
N20223021 Section D Sub- Financial Management Assignment – Ratio Analysis Companies selected – ITC and Britannia
LIQUIDITY RATIOS
Britannia CURRENT RATIOS- QUICK RATIO- Mar 2018 2.03 Mar 2018 1.59 Mar 2019 1.94 Mar 2019 1.49 Mar 2020 1.45 Mar 2020 1.16 Mar 2021 1.21 Mar 2021 0.91 Mar 2022 0.93 Mar 2022 0.61
As per the rule the ideal ratio is 2:1 but Britannia has been maintaining an average of 1.5 in current ratio and the ideal ratio for quick ratio is 1:1 and it is maintaining the average of 1.1:1
ITC CURRENT RATIOS- QUICK RATIOS- Mar 2018 2.85 Mar 2018 2.03 Mar 2019 3.17 Mar 2019 2.38 Mar 2020 4.13 Mar 2020 3.19 Mar 2021 3.27 Mar 2021 2.29 Mar 2022 2.81 Mar 2022 1.91 As per the rule the ideal ratio is 2:1, but ITC has been maintaining an average of 2.8 in current ratio and 2.0 in quick ratio.
Comparatively, ITC’s Liquidity ratios are more suitable than Britannia. ITC is more financially stable.
LEVERAGE RATIOS
Britannia DEBT TO EQUITY RATIO- INTEREST COVERAGE RATIOS- Mar 2018 0.00 Mar 2018 201.05 Mar 2019 0.00 Mar 2019 195.60 Mar 2020 0.28 Mar 2020 25.20 Mar 2021 0.54 Mar 2021 23.66 Mar 2022 0.91 Mar 2022 16.80
ITC DEBT TO EQUITY RATIO- INTEREST COVERAGE RATIOS- Mar 2018 0.00 Mar 2018 189.95 Mar 2019 0.00 Mar 2019 422.36 Mar 2020 0.00 Mar 2020 369.66 Mar 2021 0.00 Mar 2021 403.54 Mar 2022 0.00 Mar 2022 571.51
Comparatively Debt to Equity ratio of Britannia is slightly higher than ITC and ITC is more stable in terms of Interest coverage ratio than Britannia. So here we can conclude that ITC is more stable than Britannia.
PROFITABILITY RATIOS
ITC
GROSS PROFIT- Mar 2018 42.15 Mar 2019 42.56 Mar 2020 44.24 Mar 2021 39.85 Mar 2022 37.07
NET PROFIT- Mar 2018 26.43 Mar 2019 26.52 Mar 2020 31.54 Mar 2021 27.17 Mar 2022 25.52 OPERATING PROFIT- Mar 2018 39.30
Mar 2019 39.67
Mar 2020 40.91
Mar 2021 36.51
Mar 2022 34.22
Britannia GROSS PROFIT- Mar 2018 16.82 Mar 2019 17.54 Mar 2020 18.29 Mar 2021 21.48 Mar 2022 17.14
NET PROFIT- Mar 2018 10.12 Mar 2019 10.46 Mar 2020 12.01 Mar 2021 14.08 Mar 2022 10.72
OPERATING PROFIT- Mar 2018 16.82 Mar 2019 17.54 Mar 2020 18.29 Mar 2021 21.48 Mar 2022 17.14
The profitability ratios of ITC are better than Britannia which means ITC is earning more revenue with respect to its turnover and expense than what Britannia is earning.
Turnover Ratios
Britannia ITC ASSET TURNOVER RATIO- ASSET TURNOVER RATIOS- Mar 2018 1.78 Mar 2018 0.76 Mar 2019 164.02 Mar 2019 66.74 Mar 2020 147.91 Mar 2020 63.85 Mar 2021 177.10 Mar 2021 67.34 Mar 2022 191.09 Mar 2022 67.58
RETURN RATIO
Britannia RETURN ON EQUITY RATIO- RETURN ON ASSETS RATIOS- Mar 2018 29.48 Mar 2018 19.35 Mar 2019 27.25 Mar 2019 18.57 Mar 2020 31.85 Mar 2020 17.88 Mar 2021 52.53 Mar 2021 23.27 Mar 2022 59.60 Mar 2022 20.28 .
ITC RETURN ON EQUITY RATIO- RETURN ON ASSETS RATIOS- Mar 2018 21.46 Mar 2018 17.53 Mar 2019 21.29 Mar 2019 17.53 Mar 2020 23.44 Mar 2020 19.78 Mar 2021 21.80 Mar 2021 17.82 Mar 2022 24.40 Mar 2022 19.72
On average basis, turnover of Britannia are more growing than that of ITC, we can say Britannia is performing better than ITC in respect to turnover ratios.
VALUATION RATIOS
Britannia EV/EBITDA- EPS- Mar 2018 35.78 Mar 2018 78.96 Mar 2019 38.21 Mar 2019 46.71 Mar 2020 31.15 Mar 2020 61.75 Mar 2021 31.65 Mar 2021 73.12 Mar 2022 32.79 Mar 2022 66.56 ITC EV/EBITDA- EPS- Mar 2018 16.91 Mar 2018 9.22 Mar 2019 17.49 Mar 2019 10.19 Mar 2020 9.36 Mar 2020 12.33 Mar 2021 13.48 Mar 2021 10.59 Mar 2022 13.55 Mar 2022 12.22
The valuation ratios of Britannia are better than ITC , means the shareholders of Britannia will earn better returns than that of ITC
