CHAPTER –IV

DATA ANALYIS & INTREPRETATION

CURRENT RATIO

Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio is known as working capital ratio. It is a measure of general liquidity and is
not widely used to make the analysis of short-term financial position.

The thumb rule for current ratio is 2:1 however the rule cannot be followed blindly. A
relatively high current ratio is an indication that the firm has the ability to pay its current
obligation in time as and when they are due

𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬
CURRENT RATIO=
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
 TABLE: 4.1

CURRENT RATIO

CURRENT CURRENT
YEAR RATIO
ASSETS LIABILITIES
2014-2015 14788.68 13136.50 1.13
2015-2016 12836.65 9452.88 1.36
2016-2017 12230.98 12454.98 0.98
2017-2018 19138.33 15149.77 1.26
2018-2019 20803.06 16424.43 1.27
(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION : The above table shows the position of current ratio of the firm from
2014-2015 to 2018-2019. It has been decreased in further year. (1.43 to 1.27).
 CHART: 4.1

CURRENT RATIO CHART

1.36
1.4
1.26 1.27

1.2 1.13

0.98
1

0.8

0.6

0.4

0.2

0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
 QUICK OR LIQUID RATIO

LIQUID ASSETS RATIO

This ratio is also called ‘liquid ratio’ or ‘Acid test’ ratio. It is calculated by comparing the
quick assets with current liabilities. Quick ratio refers to assets which are quickly convertible
into cash. Current assets other than stock and prepaid expense are considered as quick assets.

𝐋𝐈𝐐𝐔𝐈𝐃 𝐀𝐒𝐒𝐄𝐓𝐒
LIQUID RAIO OR QUICK RATIO =
𝐂𝐔𝐑𝐑𝐄𝐍𝐓 𝐋𝐈𝐀𝐁𝐈𝐋𝐈𝐄𝐒
 TABLE 4.2

LIQUID ASSET RATIO

LIQUID CURRENT
YEAR ASSETS LIABILITIES RATIO

2014-2015 5351.87 13136.50 0.41

2015-2016 4520.92 9452.88 0.73

2016-2017 6918.28 12454.98 0.56

2017-2018 11767.18 15149.77 0.78

2018-2019 12699.55 16424.43 0.77

(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION: The above table shows the position of Liquid Asset Ratio of the firm
from 2014-2015 to 2018-2019. It has been increased in the further year (0.57 to 0.77).
 CHART: 4.2

QUICK OR LIQUID RATIO CHART

0.78 0.77
0.8 0.73

0.7

0.6 0.56

0.5
0.41
0.4

0.3

0.2

0.1

0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
OPERATING RATIO

The ratio indicates the relationship between total operating expenses and sales. Total
operating expenses here include cost of goods sold administrative expenses. Generally finance
expenses like interest are not included under operating expenses.

𝐂𝐎𝐒𝐓 𝐎𝐅 𝐒𝐀𝐋𝐄𝐒+𝐎𝐏𝐄𝐑𝐀𝐓𝐈𝐍𝐆 𝐄𝐗𝐏𝐄𝐍𝐒𝐄𝐒

OPERATING RATIO =
𝐍𝐄𝐓 𝐒𝐀𝐋𝐄𝐒
 TABLE 4.3

OPERATING RATIO

SALES+OPERATING
NET SALES RATIO
YEAR EXPENSES

2014-2015 22429.76 23587.64 1.95

2015-2016 23866.51 26254.65 1.91

2016-2017 31226.93 31285.14 2.00

2017-2018 94141.43 98357.76 1.96

2018-2019 102538.40 107838.50 1.95

(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION: The above table shows the position of Operating Ratio of the firm from
2014-2015 to 2018-2019. It has been fluctuating in the further year.
 CHART: 4.3

OPERATING RATIO CHART

2
2

1.98
1.96
1.96 1.95 1.95

1.94

1.92 1.91

1.9

1.88

1.86
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
CURRENT ASSET TURNOVER RATIO

The asset turnover ratio is an efficiency ratio that measures a company’s ability to
generate sales from its assets by comparing net sales with average total assets. In other words,
this ratio shows how efficiently a company can use its assets to generate sales.

The total asset turnover ratio calculates net sales as a percentage of assets to show how
many sales are generated from each dollar of company assets. For instance, a ratio of .5 means
that each dollar of assets generates 50 cents of sales.

𝐒𝐀𝐋𝐄𝐒
CURRENT ASSET TURNOVER RATIO =
𝐂𝐔𝐑𝐑𝐄𝐍𝐓 𝐀𝐒𝐒𝐄𝐓𝐒
 TABLE 4.4

CURRENT ASSET TURNOVER RATIO

SALES CURRENT ASSETS RATIO

YEAR

2014-2015 23587.64 14788.68 1.59

2015-2016 26254.65 12836.65 2.05
2016-2017 31285.14 12230.98 2.56

2017-2018 98357.76 19138.33 5.14

2018-2019 107838.5 20803.06 5.18
(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION:. The above table shows the position of Current Asset Turnover Ratio of
the firm from 2014-2015 to 2018-2019. It has been increased in the further year.(1.59 to 5.18 )
 CHART: 4.4

CURRENT ASSET TURNOVER RATIO CHART

6
5.14 5.18
5

3 2.56
2.05
2 1.59

0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
FIXED ASSET TURNOVER RATIO

The fixed-asset turnover ratio is, in general, used by analysts to measure operating
performance. It is a ratio of net sales to fixed assets. This ratio specifically measures a company's
ability to generate net sales from fixed-asset investments, namely property, plant and
equipment (PP&E), and net of depreciation. In general, a higher fixed-asset turnover ratio
indicates that a company has more effectively utilized investment in fixed assets to generate
revenue.

𝐒𝐀𝐋𝐄𝐒
FIXED ASSET TURNOVER RATIO =
𝐅𝐈𝐗𝐄𝐃 𝐀𝐒𝐒𝐄𝐓𝐒
 TABLE 4.5

FIXED ASSET TURNOVER RATIO

SALES FIXED ASSETS RATIO

YEAR

2014-2015 23587.64 3665.53 6.43

2015-2016 26254.65 2493.58 10.53

2016-2017 31285.14 3699.85 8.46

2017-2018 98357.76 5374.79 18.30

2018-2019 107838.5 6687.66 16.12

(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION: The above table shows the position of Fixed Asset Turnover Ratio of the
firm from 2014-2015 to 2018-2019. It has been fluctuating in the further year.
 CHART: 4.5

FIXED ASSET TURNOVER RATIO CHART

20 18.3
18
16.12
16

14

12 10.53
10 8.46
8 6.43
6

0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
TOTAL ASSET TURNOVER RATIO

The asset turnover ratio is an efficiency ratio that measures a company’s ability to
generate sales from its assets by comparing net sales with average total assets. In other words,
this ratio shows how efficiently a company can use its assets to generate sales.
The total asset turnover ratio calculates net sales as a percentage of assets to show how
many sales are generated from each dollar of company assets. For instance, a ratio of .5 means
that each dollar of assets generates 50 cents of sales.

𝐒𝐀𝐋𝐄𝐒
TOTAL ASSET TURNOVER RATIO =
𝐓𝐎𝐓𝐀𝐋 𝐀𝐒𝐒𝐄𝐓𝐒
 TABLE 4.6

TOTAL ASSET TURNOVER RATIO

SALES TOTAL ASSETS RATIO

YEAR

2014-2015 23587.64 18454.24 1.28

2015-2016 26254.65 15330.26 1.71

2016-2017 31285.14 15930.86 1.96

2017-2018 98357.76 24513.15 4.01

2018-2019 107838.5 27490.75 3.92

(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION: The above table shows the position of Total Turnover Ratio of the firm
from 2014-2015 to 2018-2019.. It has been increased in the 2014-15 to 2017-18, but last year it
has been decrease .
 CHART: 4.6

FIXED ASSET TURNOVER RATIO CHART

4.5
4.01 3.92
4

3.5

2.5
1.96
2 1.71

1.5 1.28

0.5

0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
NET PROFIT RATIO

Net profit ratio establishes a relationship between net profit and sales. It is determined by
dividing the net income after tax to the sales for the period and measures the profit per rupee of
sales.

𝐍𝐄𝐓 𝐏𝐑𝐎𝐅𝐈𝐓
NET PROFIT RATIO =
𝐍𝐀𝐓 𝐒𝐀𝐋𝐄𝐒

TABLE 4.17

NET PROFIT RATIO

NET PROFIT NET SALES RATIO

YEAR

2014-2015 -696.94 23587.64 -0.03

2015-2016 -107.26 26254.65 0.00

2016-2017 293.65 31285.14 0.01

2017-2018 1019.36 98357.76 0.01

2018-2019 1549.94 107838.5 0.01

(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION: The above table shows the position of Net Profit Ratio of the firm from
2014-2015 to 2018-2019. It has been increased in the further year.
 CHART: 4.7

NET PROFIT RATIO CHART

0.01 0.01 0.01

0.01

0.005
0
0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
-0.005

-0.01

-0.015

-0.02

-0.025

-0.03
-0.03
WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It also
measures the smooth running of business or otherwise. The ratio establishes relationship between
cost of sales and working capital.

𝐒𝐀𝐋𝐄𝐒
WORKING CAPITAL TURNOVER RATIO =
𝐖𝐎𝐑𝐊𝐈𝐍𝐆 𝐂𝐀𝐏𝐈𝐓𝐀𝐋
 TABLE 4.8

WORKING CAPITAL TURNOVER RATIO

WORKING
SALES RATIO
YEAR CAPITAL

2014-2015 23587.64 1652.18 14.28

2015-2016 26254.65 3383.77 7.76

2016-2017 31285.14 -224.00 -139.67

2017-2018 98357.76 3988.56 24.66

2018-2019 107838.5 4378.63 24.63

(Rs in lakhs)

SOURCE: Secondary data of Tamilnadu Cements Corporation Limited.

INTREPRETATION: The above table shows the position of Net Working Capital Ratio of the
firm from 2014-2015 to 2018-2019. It has been increased (14.28 to 24.63).
 CHART: 4.8

WORKING CAPITAL TURNOVER RATIO CHART

24.66 24.63
25

20
14.28
15

10 7.76

0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
-5

-10

-15

-20
-19.67