BVBV

Project work of Accounts (055)

RATIO ANALYSIS
SUBMITTED BY-
AVISHKAAR JAIN
 ACKNOWLEDGEMENT
I express my gratitude to MS. Bharti Mam, my accounts teacher
and guide,who guided me though the project and also gave valuable
suggestions and guidence for completing the project. She
Helped me to understand the intricate issues involved in making the project
, besides effectively presenting it. These intricates would have been lost
otherwise.
My project has been a success only because of her guidence.

-Avishkaar Jain
XII-C
S.NO
INDEX
DESCRIPTION NO OF
SLIDES
1. ABOUT COMPANY
2. BALANCE SHEET
3. STATEMENT OF P&L
4. MEANING AND OBJECTIVE
5. RATIOS CALCULATION
6. ANALYSIS
7. SOURCE OF MATERIAL
8. THANKU
HIMALAYA DRUG COMPANY
Himalaya Drug Company is an Indian
multinational pharmaceutical company established by
Mohammed Manal in 1930 and based
in Bengaluru, Karnataka, India. It produces health care
products under the name Himalaya Herbal
Healthcare whose products include ayurvedic ingredients. It
is spread across locations in India, United States, Middle
East, Asia, Europe and Ocean, while its products are sold in
106 countries across the world.
 STATEMENT OF PROFIT AND LOSS
FOR YER ENDING 31 MARCH 2018,2019,2020
PARTICULAR 31 31 MARCH 31 MARCH
MARCH 2019 2020
2018
1 Income
. i)Revenue from operations 8,00,00,000 12,60,00,000 12,40,00,000
ii)Other incomes 10,00,000 40,00,000 85,00,000
Total 8,10,,00,00 13,00,00,000 18,25,00,000
0
Expenditure
i)Purchase of stock in trade 80000000 95000000
ii)Change in inv of stock in trade 6,00,00,000 (5000000) (1500000)
2 iii)Employees benefit funds 20000000 (28000000)
(30,00,000)
. iv)Finance cost 110,00000 - 7000000
v)Dep. And amort.exp - 900000 1000000
vi)Other expenses 800000 10000000 12000000
Total 8000000 105900000 133500000
76800000
3 Profit before tax 4200000 24100000 47000000
4 Less:-tax 2100000 10000000 18000000
5 Net profit before tax 2100000 14100000 29000000
BALANCE SHEET AS ON 31 MARCH 2018,2019,2020
I.EQUITY AND LIABLITY
1.Shareholders fund
a)share capital 20000000 20000000 20000000
b)reserve & surplus 3300000 8950000 15000000
2.Non-current-liablity
a)Long term borrowings - - 20000000
b)Other long term liablity 6000000 4000000 2000000
c)long term provision 1000000 1500000 1500000
3.Current liablity
a)short term borrowings 2000000 1500000 2000000
b)trade payable 11200000 22400000 33200000
c)other current liablity 2000000 2000000 2000000
d)short term provisions 500000 4000000 6500000
TOTAL 46000000 64350000 102200000
II ASSETS
1.Non-current assets
a)fixed assets
b)tangible assets 7800000 9700000 14000000
 ii)Intangible Assets 3000000 3800000 4200000
iii)Capital work in progress 5000000 4000000 -
iv)Intangible assets under 2000000 1100000 -
progress 6000000 6650000 3000000
b)Non-Current Investment
c)Long term loan & advanves

2.Current Assets 200000 700000 4300000

a)Current investments 7000000 12000000 19500000
b)Inventories 8000000 19000000 48000000
c)Trade receivables 1500000 1000000 2000000
d)Cash & cash equivalents 1000000 2000000 2400000
e)Short term loan & advances 1500000 1200000 1300000
f)Other current assets 46000000 64350000 102200000
TOTAL

ADDITIONAL
IMFORMATION:-
PARTICULAR 2018 2019 2020
S
Opening inventory 4000000 7000000 12000000
Purchases 60000000 80000000 95000000
Closing Inventory 7000000 12000000 19500000
 RATIO ANLYSIS MEANING
AND OBJECTIVE
MEANING
Ratio analysis is a quantitative method of gaining insight
into a company's liquidity, operational efficiency, and
profitability by studying its financial statements such as
the balance sheet and income statement. Ratio analysis
is a cornerstone of fundamental equity analysis.
 OBJECTIVE
To study whether the company has performed better than
before and to assess whether the company business is on
the right path or not.

SOURCE OF
MATERIAL
FROM OFFICIAL WEBSITE OF HIMALAYS
DRUG COMPANY.
 WORKING NOTES
Q u i c k A s s e t s = C u r re n t A s s e t s - I n v e n t o r i e s
2018=19200000-7000000=12200000
2019=35900000-12000000=23900000
2020=77500000-19500000=58000000

COST OF GOODS
S O L D = O P. I N V + P U R C H S E S - C L O S I N G I N V
2018=4000000+60000000-7000000=57000000
2019=7000000+80000000-12000000+75000000
2020=12000000+95000000-19500000=87500000
GROSS PROFIT=NET SALES-COST
OF GOODS SOLD
2018=8000000-57000000+23000000
2019=126000000-75000000-=51000000
2020=174000000-87500000=86500000

W O R K I N G C A P I TA L = C U R R E N T
ASSETS-CURRENT LIABLITIES
2018=19200000-15700000=3500000
2019=35900000-29900000=6000000
2020=77500000-43700000=33800000
 LIQUIDITY RATIO

1)CURRENT RATIO=CURRENT ASSETS/CURRENT LIABLITIES

2018=19200000/15700000=1.22:1
2019=35900000/29900000=1.20:1
2020=77500000/43700000=1.77:1
2)LIQUID RATIO=QUICK ASSETS/CURRENT LIBLITIES
2018=12200000/15700000=0.78:1
2019=23900000/29900000=0.80:1
2020=58000000/43700000=1.33:1
 SOLVENCY RATIO
1)DEBT TO EQUITY RATIO=DEBT/EQUITY
2018=7000000/23300000=0.30:1
2019=5500000/28950000=0.18:1
2020=23500000/35000000=0.67:1
2)TOTAL ASSETS TO DEBT RATIO=TOTAL ASSETS/DEBT
2018=46000000/7000000=6.57:1
201964350000/5500000=11.70:1
2020=102200000/23500000=4.35:1
3)PROPRIETRY RATIO=EQUITY/TOTAL ASSETS
2018=23300000/46000000=0.053:1
2019=28950000/64350000=0.44:1
2020=35000000/102200000=0.35:1
 ACTIVITY RATIO
1) INVENTORY TURNOVER RATIO=
COST OF GOODS SOLD/AVERGE INVENTORY
2018=57000000/5500000=10.36 TIMES
2019=75000000/9500000=7.89 TIMES
2020=87500000/15750000=5.56 TIMES

2)TRADE RECEIVABLE RATIO=

CREDIT REVENUE FORM OPERA./AVERGE TRADE RECEI
2018=80000000/8000000=10 TIMES
2019=126000000/19000000=6.68 TIMES
2020=174000000/48000000=3.625 TIMES
 3) WORKING CAPITAL TURNOVER RATIO=
REVENUE FROM OPER/WORKING CAPITAL
2018=20000000/19200000-15700000=22.85 TIMES
2019=126000000/6000000=21 TIMES
2020=174000000/38800000=5.14 TIMES

4)TRADE PAYABLE TURNOVER RATIO=

NET CREDIT PURCHASE/AVERAGE TRADE PAYABLE
2018=60000000/11200000=5.35 TIMES
2019=80000000/22400000=3.57 TIMES
2020=95000000/33200000=2.86 TIMES
 PROFITABLITY RATIO
1)GROSS PROFIT RATIO=GROSS PROFIT
/REVENUE FROM OPERATIONS*100
2018=23000000/80000000*100=28.75%
2019=51000000/126000000*100=40.48%
2020=86500000/174000000*100=49.71%

2)NET PROFIT RATIO=NET PROFIT AFTER TAX/

REVENUE FROM OPERATIONS*100
2018=2100000/80000000*100=2.63%
2019=14100000/126000000*100=11.19%
2020=29000000/174000000*100=16.67%
3)RETURN ON INVESTMENT =NET PROFIT BEFORE
INT,TAX, DIVIDENT /CAPITAL EMPLOYED*100
2018=4200000/30300000*100=13.86%
2019=24100000/34450000*100=65.95%
2020=47000000/58500000*100=80.34%

ANALYSIS
 1) CURRENT RATIO:-
Current ratio is approximately the
same in the
first 2 years . However it was
improved in the 3
year . However in all 3 years current
ratio is lower
Than the accepted norm of 2:1.The
company may face
Difficulty in meeting its short term
liability on time.
 2) LIQUID RATIO:-
It is observed that the
liquid ratio is also on the
Same pattern as current
ratio is approximately
The same in first 2 year
but improved in 3 year.
 3)DEBT TO EQUITY RATIO:-
It is observed that in 2018
the ratio is low and in
2019 it reduced with
significant amount which
Shows that company is very
less dependent
On external funds this
shows that company is using
finance req properly.
 4)TOTAL ASSETS TO DEBT RATIO:-
It is observed that there was
a rise in total assets to debt
ratio from 2018 to 2019
which is good indicator of
higher safety for lender as
well as easily availablity of
loans, but in 2020 the ratio
droped with huge amount
means lower safety for
lender.
 5) PROPRIETARY RATIO:-
The proprietary ratio is
decreasing by nominal
rate in each year . This
indicates greater risk to
unsecured lenders and
creditors and the
enterprise getting
benefit of trading on
equity.
 6) INVENTORY TURNOVER RATIO:-
Inventory turnover ratio is
10.36 in year 2018 it
decreases to 7.89 in year
2019 and further decreased
to 5.56 in year 2020.This
means company started
maintaining more stocks in
comparison to sale.
 7) TRADE RECEIVABLE RATIO:-
It is observed that in
the given consecutive
years trade receivable
turnover ratio is falling
which shows more
investment is debtors
than required and
insufficient in
collection.
 8) TRADE PAYABLE TURNOVER
RATIO:-
Trade payable
turnover ratio has
negative fall . It grew
due to inefficiency in
collection of payment
from debtors and less
investment than
required.
9) GROSS PROFIT AND NET PROFIT RATIO:-

Revenue from operation

show significant growth
each year . Also there is a
significant increase in gross
profit ratio & net profit
ratio . That means both the
direct and indirect expenses
have decreased in
comparison to the previous
year.
 10)ROI (RETURN ON INVESTMENT)
RATIO:-
Return on investment shows
the overall performances of
the enterprises. It means it
measures how efficiently the
resources of the business are
used. Since, net profit
before interest and tax
increased with high rate
than investment.
 BIBLIOGRAPHY
 SULTAN CHAND PUBLICATION-T.S GREWAL
 CBSE.NIC.IN
 TOPPERSGUIDE.COM
 HIMALAYASWELLNESS.IN
 YOUTUBE.COM
 MERITNATION.COM
THANKY
YOU