CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

1) CURRENT RATIO:
Current ratio =

Year

Current assets
------------------------Current liabilities

2009-10

Current
Assets
7353.64

Current
liabilities
1570.82

Ratio
4.68140207

2010-11

3871.45

2246.55

1.723286818

2011-12

2384.93

2599.38

0.917499558

2012-13

3227.07

4655.5

0.69317367

2013-14

3735.52

5646.72

0.661538

Figure 1 : CURRENT RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows that the current ratio on FY year 2009-10
was 4.68 and then it dip to 1.33 in the FY 2010-11, further move downward to
0.92 and in the FY 2012-13 it dip down to 0.69 and finally in the FY 2013-14 it
again moved down to 0.66. The bench mark current ratio for Infrastructure
Industries is 2:1. The above table shows current ratio is less than 2. Over the
year under study it has been observed that the company has not maintained
favourable liquidity position and this can be treated as a unhealthy sign.

2) LIQUID RATIO:
Liquid ratio =

Liquid assets
----------------------Liquid liabilities

Quick Assets = Total Current Assets (minus) Inventory

Year

Quick Liabilities

Quick ratio

2009-10

Quick
Asset
7058.59

1570.82

4.493570237

2010-11

3578.76

2246.55

1.593002604

2011-12

2084.64

2599.38

0.801975856

2012-13

2786.39

4655.5

0.59851573

2013-14

3466.01

5646.72

0.613809

Figure 2 : LIQUID RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the liquid ratio during the study period
except in the FY 2011-12 to 2013-14 is more than the bench mark Liquid ratio
(i.e.) 1:1.It reached the highest 4.49 in the FY 2009-10 and then in FY 2010-11
it came down to 1.59 and eventually went on decreasing to 0.61 in FY 2013-14.
This shows that the company is not enjoying credit worthiness. It is clear that
the liquid ratio of the company is at an decreasing rate and it is not close to
standard ratio and this can be treated as a unhealthy sign. So we can understand
that the company is not in a position to meet the short term obligations.

3) ABSOLUTE LIQUIDITY RATIO:

Cash + bank +marketable securities
Absolute liquidity ratio = ----------------------------------------------------Current liabilities
Year

2009-10

Cash
and
securities
5652.9

2010-11

Current
Liabilities

Ratio

1570.82

3.598693676

2175.92

2246.55

0.968560682

2011-12

87.65

2599.38

0.033719579

2012-13

251.01

4655.5

0.05391687

2013-14

301.82

5646.72

0.05345

Figure 3 : ABSOLUTE LIQUID RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the absolute ratio for the study period FY
2009-10 to 2013-14. There is decrease in the absolute ratio. It was 3.60 in the
FY 2009-10. In FY 2010-11 it decreased to 0.97.Further it decreased to 0.34 in
FY 2011-12. Then in FY 2012-13 and FY 2013-14 it was 0.05

4) DEBT EQUITY RATIO:

Debt equity ratio =

Year
2009-10

Outsiders
fund
4494.54

2010-11

Outsiders funds
-----------------------------Proprietors funds

Proprietors fund Ratio

7873.28

0.570859921

6114.25

9339.24

0.654683893

2011-12

5257.55

11686.96

0.449864635

2012-13

7526.13

11907.44

0.63205273

2013-14

4272.61

15152.19

0.28198

Figure 4: DEBT-EQUITY RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the debt equity relationship of the Reliance
Infrastructure company during the study period. The Bench Mark Debt-Equity
ratio is 2:1. During the FY 2009-10 it was 0.57 and then reached its highest in
the next year and from there it began to slope downwards and ultimately came
to 0.28 in the year 2013-14. In all the years the equity is more when compared
with borrowings. Hence the company is maintaining its debt position.

5) PROPRIETARY RATIO:

Proprietary ratio =

Year
2009-10

Proprietor
s fund
7873.28

2010-11

Proprietors funds
--------------------------Total tangible assets
Tangible assets

Ratio

2647.71

297.3618712

9339.24

2806.35

332.7895665

2011-12

11686.96

3056.49

382.365393

2012-13

11907.44

3331.37

357.433728

2013-14

15152.19

3468.61

436.8375

Figure 5: PROPRIETARY RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows that the Proprietors fund ratio as on FY
2009-10 was 297.36 which gradually increased till FY 2013-14. This shows that
the firm has good investment in fixed asset and favourable long term solvency
position over the year under study.

6) FIXED ASSETS TURNOVER RATIO:

Fixed assets turnover ratio =

Net sales
------------------Fixed assets

Year
2009-10

Net sales
4607.89

Fixed assets
2873.71

Ratio
1.603463815

2010-11

6575.25

3104.36

2.118069425

2011-12

7501.2

3636.5

2.062752647

2012-13

10958.79

3904.59

2.80664295

2013-14

10908.06

4079.41

2.673931

Figure 6: FIXED ASSET TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the fixed assets
and sales. The sale is 1to 2 times more than the fixed assets from FY 2009-10 to
2009 -10. This indicates that fixed assets turnover ratio of the company is
gradually increasing which is a healthy indication that less amount of money is
tied up with fixed assets and thus fixed assets are effectively used to generate
the sales.

7) WORKING CAPITAL TURNOVER RATIO:

Working capital turnover ratio =

Year

Net sales

Net sales
---------------------------Net working capital

Net
working Ratio
capital
5782.82

2009-10

4607.89

0.796824041

2010-11

6575.25

1624.9

4.046556711

2011-12

7501.2

(214.45)

(34.9787829)

2012-13

10958.79

(1428.43)

(7.67191252)

2013-14

10908.06

(1911.2)

(5.70744)

Figure 7: WORKING CAPITAL TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram indicates that working capital turnover ratio is
negative. Generally a negative working capital is a sign of managerial efficiency
in a business with low inventory and accounts receivable, which means they
operate on an almost strictly cash basis.

8) TOTAL ASSETS TURNOVER RATIO:

Total assets turnover ratio =

Year
2009-10

Total
assets
12367.82

2010-11

Total assets
---------------------Net assets

Net sales

Ratio

4607.89

2.684052788

15453.49

6575.25

2.350251321

2011-12

16944.51

7501.2

2.258906575

2012-13

19433.57

10958.79

1.77333173

2013-14

19424.8

10908.06

1.780775

Figure 8: TOTAL ASSET TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the total assets to
net sales. During all the study period years the relationship between sales to
total assets is Low. The ratio increased from 2.68 (2009-10) to 1.78 (2013-14)
due to the heavy rise in the sales.

9) CAPITAL TURNOVER RATIO:

Capital turnover ratio =

Year

Net sales

Sales
---------------------Proprietors fund

2009-10

4607.89

Proprietor
s fund
7873.28

Ratio

2010-11

6575.25

9339.24

0.704045511

2011-12

7501.2

11686.96

0.641843559

2012-13

10958.79

11907.44

0.92033132

2013-14

10908.06

15152.19

0.7199

0.585256716

Figure 9: CAPITAL TURNOVER RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the sales and
proprietors funds. It indicates that the sales are in between 0.58 and 0.90 times
less than the proprietor's funds. It shows the firms is not maintaining the better
utilization of own funds.

10) Return on total assets:

Return on total assets =

Year
2009-10

Net profit
------------------- x100
Total assets

Net
profit Total assets
After Tax
650.34
12367.82

Ratio
0.052583236

2010-11

801.45

15453.49

0.051862071

2011-12

1084.63

16944.51

0.064010703

2012-13

1138.88

19433.57

0.05860375

2013-14

1151.69

19424.8

0.05929

Figure 10: RETURN ON TOTAL ASSET

INTERPRETATION AND ANALYSIS

The above table and figure as on FY 2010 remain modest at 6% indicating that
the long term fixed asset investments are not yet effectively managed to
generate net income.

11) GROSS PROFIT RATIO:

Gross profit ratio =

Gross profit
----------------------------------- x 100
Net sales

Year

Net sales

2009-10

Gross
Profit
4607.89

4607.89

40.4825202

2010-11

2028.1

6575.25

30.84445458

2011-12

2530.7

7501.2

33.7372687

2012-13

3045.83

10958.79

27.7934881

2013-14

2949.67

10908.06

27.0412

Ratio

Figure 11: GROSS PROFIT RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the gross profit
and net sales in percentage. During 2009-10 the gross profit position was
40.48% and in the very next year it slashed down to 30.84% and again raised to
33.73% and finally reached to 27.04% in the year 2013-14. However it can be
noticed that sales are increasing but gross profit is not increasing
proportionately every year. This show there is low efficiency in managing
purchases, production, labour, sales and moderate amount is available to meet
the other expenses.

12) NET PROFIT RATIO:

Net profit sales =

Net profit
----------------- x 100
Net sales

Year
2009-10

Net Profit
650.34

Net sales
4607.89

Ratio

2010-11

801.45

6575.25

12.18889016

2011-12

1084.63

7501.2

14.45941983

2012-13

1138.88

10958.79

10.3923882

2013-14

1151.69

10908.06

10.55816

14.11361816

Figure 12: NET PROFIT RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between net profit and net
sales. During 2009-10 it was 14.11% on sales and in2010-11 it decreased
to12.18%. There is an further in percentage of 10.55 in 2013-14 The sales of the
organization are also increasing and the profit of the organization is also
increasingly proportionately .This shows Reliance infrastructure limited have
good control over direct and indirect cost and they have large amount available
to meet non-operating expenses/losses.

13) RETURN ON SHAREHOLDERS FUND

Net profit after Interest and Tax

Return on shareholders fund = -------------------------------------- X 100
Shareholders fund
Year
2009-10

Profit
After Proprietor Ratio
Tax
s fund
650.34
7873.28
8.260089823

2010-11

801.45

9339.24

8.581533401

2011-12

1084.63

11686.96

9.280685482

2012-13

1138.88

11907.44

9.56444038

2013-14

1151.69

15152.19

7.600815

Figure 8: RETURN ON SHAREHOLDER'S FUND

INTERPRETATION AND ANALYSIS

The above Table and Diagram shows that there is a fluctuation in this ratio
and this is due to fluctuating debt capital and interest burden on the
company. It is evident from this that the percentage return on Owners
fund is between 7-9 %.

a) 14) ADMINISTRATIVE AND SELLING EXPENSES RATIO:

Administrative and Selling expenses
Administrative expenses ratio = ----------------------------------- x 100
Sales
Year
2009-10

Administration&
Selling expenses
543.41

Net sales

Ratio

4607.89

11.79303325

2010-11

664.99

6575.25

10.1135318

2011-12

847.3

7501.2

11.29552605

2012-13

1277.02

10958.79

11.6529288

2013-14

1040.68

10908.06

9.540468

Figure 14: ADMINSTRATION AND SELLING EXPENSE RATIO

INTERPRETATION AND ANALYSIS

The above table and diagram shows the relationship between the administration
and selling expenses and sales in percentage. The administration and selling
expenses during 2009-10 is very high and gradually decreased to 9.54 in year
2013-14.This shows there is a good control on expenditure and may be one of
the reasons to net profit during the study years.

15) COST OF ENERGY EXPENSE RATIO

Cost of energy
Expenses ratio = -----------------------------------------Sales
Year

Cost of Energy

Net sales

x 100

Ratio

2009-10

1087.56

4607.89

23.60212592

2010-11

1532.43

6575.25

23.30603399

2011-12

2487.69

7501.2

33.16389378

2012-13

4253.99

10958.79

38.8180629

2013-14

3321.94

10908.06

30.45399

Figure 15: COST OF ENERGY EXPENSE RATIO

INTERPRETATION AND ANALYSIS

The above table and figure show that the cost of energy and net sales are
increasing gradually indicating that there is good control on the expenditure and
ultimately resulting in higher productivity.

16) COST OF FUEL RATIO

Expenses ratio =

Year

Cost of Fuel
------------------------------------ x 100
Sales
Cost of fuel

Net sales

Ratio

2009-10

812.1

4607.89

17.62411863

2010-11

921.27

6575.25

14.01117828

2011-12

1015.52

7501.2

13.53810057

2012-13

1166.78

10958.79

10.6469784

2013-14

1219.83

10908.06

11.18283

Figure 16: COST OF FUEL EXPENSE RATIO

INTERPRETATION AND ANALYSIS

The above table and figure shows that As on FY 2010 the Cost of fuel to sale ,
ratio is 11.18 as compared to FY 2009-10 i.e. 17.62 indicating that increasing in
the net sales is not proportionate with increasing cost of fuel as the ratio is
dipping. This shows that the company has good control over the cost of fuel
over the study period.

17) COST OF TAX RATIO

Expenses ratio =

Year

Cost of Tax
------------------------------------ x 100
Sales

Cost of Tax

Net sales

Ratio

2009-10

114

4607.89

2.474017392

2010-11

124.26

6575.25

1.889814076

2011-12

131.58

7501.2

1.754119341

2012-13

152.96

10958.79

1.39577453

2013-14

154.13

10908.06

1.412992

Figure 17: COST OF TAX EXPENSE RATIO

INTERPRETATION AND ANALYSIS

The above table and figure show that the cost of tax and net sales are increasing
proportionately indicating that there is good control on the expenditure and
ultimately resulting in higher productivity. From FY 2005 to FY 2010 the ratio
are marginally varied and remained more or less close to 1.50.

18) EXPENDITURE ON EPC RATIO

Expenses ratio =

Year

Expenditure on EPC
------------------------------------ x 100
Sales
Ratio

2009-10

Expenditure on Net sales

EPC
728.84
4607.89

2010-11

1969.19

6575.25

29.94851907

2011-12

1335.71

7501.2

17.80661761

2012-13

2339.23

10958.79

21.345696

2013-14

3262.49

10908.06

29.90898

15.81721786

Figure 18: EXPENDITURE ON EPC EXPENSE RATIO

INTERPRETATION AND ANALYSIS

The above table and figure shows that as on FY 2010 the Expenditure on EPC
ratio, had increased as against FY 2009 on account of substantial increase in the
Sales.