A STUDY ON COMPANY ANALYSIS AND INDUSTRY ANALYSIS OF SAGAR CEMENTS

COMPANY ANALYSIS

1) CURRENT RATIO: Current Ratio= Current Assets/Current Liabilities YEAR CA CL 2010 2011 2012 INTERPRETATION: The current ratio has been decreased in the year 2012 compared to the year 2010. There is no new assets has been included.
2 1.5 1 0.5 0 1 2 3 Series1

1366.7 1616.88 2093.35

8038.8 2186.6 2627.5

CURRENT RATIO 1.70 0.73 0.79

2) QUICK RATIO: Quick Ratio= Quick(or)Liquid Assets/Current Liabilities YEAR 2010 2011 2012 LIQUID ASSETS 3575.3 3464.0 4598.3 CURRENT LIABILITIES 8038.8 2186.6 2627.5 QUICK RATIO 0.44 1.58 1.75

INTERPRETATION: The quick ratio of the company has been increased as compared to the last years. Thus its use of liquid assets is increased.
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3) INVENTORY TURNOVER RATIO: Inventory Turnover Ratio= Cost of Goods Sold/Average Stock YEAR COST OF GOODS SOLD -2089.6 5840.1 5370.07 AVERAGE STOCK INVENTORY TURNOVER RATIO -8.55 20.29 12.53

2010 2011 2012

244.30 287.69 428.44

INTERPRETATION: The inventory turnover ratio has been increased in 2011 but decreased in the next year.
25 20 15 10 5 0 -5 -10 1 2 3 Series1

4) AVERAGE COLLECTION PERIOD: Average Collection Period= (Trade Debtors*No. of Working Days)/Net Credit Sales

YEAR

TRADE DEBTORS 411.8 459.42 484.48

2010 2011 2012 INTERPRETATION:

NO. OF WORKING DAYS 365 365 365

NET CREDIT SALES 0.116 8.57 12.51

AVERAGE COLLECTION PERIOD 31.46 42.54 29.17

The average collection period is decreased in 2012 rather than 2011.

45 40 35 30 25 20 15 10 5 0 1 2 3

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5) FIXED ASSET TURNOVER RATIO: Fixed Asset Turnover Ratio= Cost of Sales/Net Fixed Assets YEAR 2010 2011 2012 INTERPRETATION: In the last year, the fixed asset turnover of the company has been increased. COST OF SALES 4795 4250 6061 NET FIXED ASSETS 208.84 4498.39 4598.37 FIXED ASSET TURNOVER RATIO 2.30 0.94 1.31

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6) TOTAL ASSET TURNOVER RATIO: Total Asset Turnover Ratio= Net Sales/Total Assets YEAR 2010 2011 2012 NET SALES 4795 4250 6061 TOTAL ASSETS 199.9 6115.25 6627.7 TOTAL ASSET TURNOVER RATIO 0.002 0.694 0.914

INTERPRETATION: The use of total assets to net sales is increased in the last three years.
1 0.8 0.6 0.4 0.2 0 1 2 3 Series1

7) DEBT EQUITY RATIO: Debt Equity Ratio= Total Long Term Debts/Total Long Term Funds YEAR 2010 2011 2012 INTERPRETATION: TOTAL LONG TERM DEBTS 2351.8 720.54 754.29 TOTAL LONG TERM FUNDS 2198.8 2216.4 2597.01 DEBT EQUITY RATIO 0.1069 0.3250 0.2904

The total long term funds of the company has been increased in the year 2011 but decreased in the last year.
0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1 2 3 Series1

8) INTEREST COVERAGE RATIO: Interest Coverage Ratio= Earnings Before Interest and Taxes(EBIT)/Interest Expenses YEAR EBIT INTEREST EXPENSES 1141.52 310.25 344.96 INTEREST COVERAGE RATIO 1.830 5.125 2.002

2010 2011 2012 INTERPRETATION:

2089.7 1590.10 690.93

The EBIT of the company has been increased and the interest expenses has also been increased in the second year but it has been decreased in 2012.
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9) OPERATING PROFIT MARGIN: Operating Profit Margin= Operating Income/Net Sales

YEAR 2010 2011 2012

OPERATING INCOME 4848.9 4841.9 6972.9

NET SALES 4795.7 4250 6061

OPERATING PROFIT MARGIN 0.10 1.13 1.15

INTERPRETATION: The operating income has been increased in the last three years with regard to net sales of the company.
1.4 1.2 1 0.8 0.6 0.4 0.2 0 1 2 3 Series1

10) NET PROFIT MARGIN: Net Profit Margin= Net Income/Sales Revenue YEAR 2010 2011 2012 INTERPRETATION: The net profit has been increased in the year 2012 compared to the previous years. NET INCOME 530.2 4339 6068 SALES REVENUE 5302.2 4339.7 6068.2 NET PROFIT MARGIN 1.00 0.99 0.99

1.002 1 0.998 0.996 0.994 0.992 0.99 0.988 0.986 0.984 1 2 3

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11) RETURN ON INVESTMENT: Return on Investment= (Net Profit/Cost of Investment)*100 YEAR 2010 2011 2012 INTERPRETATION: The return on investment is favourable since the companys net profit seems to be increased in the last year.
1 0.8 0.6 0.4 0.2 0 1 2 3 Series1

NET PROFIT 298.2 174.12 441.16

COST OF INVESTMENT 1500 173.88 173.88

RETURN ON INVESTMENT 0.19 1.00 2.53

12) RETURN ON ASSETS: Return on Asset= Net Income/Total Assets YEAR 2010 2011 2012 NET INCOME 530.2 4339 6068 TOTAL ASSETS 4648 6115 6627 RETURN ON ASSETS 0.11 0.70 0.91

INTERPRETATION: Though the total assets have been increased, the return on assets also has been increased in the last year.
1 0.8 0.6 0.4 0.2 0 1 2 3 Series1

13) EARNINGS PER SHARE: Earnings Per Share= (Net Profit After Tax-Preference Dividend)/No. of Equity Shares

YEAR 2010 2011 2012

EPS 12.75 11.61 25.37

INTERPRETATION: The Earnings Per Share was increased in the year 2012.

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COMPANY ANALYSIS 1. The quick ratio of the company has been increased as compared to the last years. Thus its
use of liquid assets is increased. Hence the liquidity position of the company has been increased. 2. The company has the ability to manage the assets. Comparing to the last years there is no purchase of current assets in the current year. 3. The profit of the company has been increased gradually when comparing to the past years. The dividend has been declared for all the years this influences the increase in profitability. 4. Though the shareholder fund has been increased in the current year the company investment is increased. Hence the working capital also increased. This also influenced by the decline of current assets. 5. Cost of inventory comprises all cost of purchase, cost of conversion and other costs incurred. The share holding period rate decreased which causes increase in profit. Dividend Summary For the year ending March 2012, Sagar cements has declared an equity dividend of 30.00% amounting to rs.3 per share. At the current share of rs.228.85 this results in a dividend yield of 1.31%. The company has a good dividend track report and has consistently declared dividends for the last 5 years.