RATIO ANALYSIS OF

“SAIL” V/S “TISCO”

SUBMITTED TO:

PROFESSOR FEROZ KHAN

SUBMITTED BY:
VAIBHAB DIKSHIT
SANGITA YADAV
MAYANK VARSHNEY
RIDHIMA ARORA
BIBHU PRASAD SAHOO
 PROFITABILITY RATIOS OF SAIL
1. GROSS PROFIT RATIO(GPR) = (GROSS PROFIT / NET SALES)*100
GROSS PROFIT(GP) = NET SALES(NS) – COST OF GOODS SOLD(CGS)

CGS = OPENING STOCK(OS) + NET PURCHASE(NP)+ DIRECT EXPENSE(DE) – CLOSING

STOCK(CS)

2008 2007

GP = 19630.98 GP = 15569.53

NET SALES = 39508.45 NET SALES = 33923.12

GPR = (19630.98 / 39508.45)*100 GPR = (15569.53 / 33923.12)*100

= 49.68 % = 45.89 %

2006 2005

GPR = (12555.01 / 27837.57)*100 GPR = (15967.82 / 28522.83)*100

= 45.10 % = 55.98 %

2004

GPR = (9645.34 / 21296.82)*100

= 45.29 %

2. NET PROFIT RATIO(NPR) = (NET PROFIT(NP) / NET SALES )*100

2008 2007

NP = 7536.78 NP = 6202.29
NS = 39508.45 NS = 33923.12

NPR = (7536.78 / 39508.45)*100 NPR = (6202.29 / 33923.12)*100

= 19.07 % = 18.28 %

2006 2005 2004

NPR=(4012.97 / 27837.57)*100 NPR=(6816.97 / 28522.83)*100 NPR=(2512.08 /

21296.82)*100

= 14.41 % = 23.90 % = 11.79 %

3. OPERATING PROFIT RATIO(OPR)= (OPERATING PROFIT / NET
SALES)*100

OPERATING PROFIT(OP) = GP – OPRATING EXPENSES(OE)

2008 2007
OPR = (16254.66 / 39508.45)*100 OPR = (12874.91 / 33923.12)*100

= 53.27 % = 37.95 %

2006 2005

OPR = (9597.56 / 27837.57)*100 OPR = (13720.83 / 28522.83)*100

= 34.47 % = 48.10 %

2004

OPR = (7494.66 / 21296.82)*100

= 35.19 %

4. OPERATING RATIO(OR) = (OPERATING COST(OC) / NS)*100

OC = (CGS + OE)

2008 2007

OR = (22983.79 / 39508.45)*100 OR = (21048.21 / 33923.12)*100

= 58.17 % = 62.04 %

2006 2005 2004

OR=(18239.11/27837.57)*100 OR=(14802/28522.83)*100 OR=(13802.16/21296.82)*100
= 65.52 % = 51.89 % = 64.80 %

5. RETURN ON CAPITAL EMPLOYED(RCE) =(NPBIT / CAPITAL

EMPLOYED(CE))*100
NPBIT = NET PROFIT BEFORE INTEREST & TAX

2008 2007
RCE = (11719.67 / 17313.16)*100 RCE = (9755.18 / 23063.57)*100
= 67.69 % = 42.29 %
 2006 2005
RCE = (6173.5 / 12601.41)*100 RCE = (9970.4 / 10306.65)*100
= 49 % = 96.73 %

2004

RCE = (3527.71 / 5037.67)*100

= 70.02 %

6. RETURN ON PROPRIETOR'S CAPITAL EMPLOYED(RPCE) =

= (EARNING AFTER TAX / SHAREHOLDER'S FUND)

2008 2007
RPCE = (7536.78 / 17313.16)*100 RPCE = (6202.29 / 23063.57)*100
= 43.53 % = 26.89 %

2006 2005 2004

RPCE=(4012.97/12601.41)*100 RPCE=(6816.97/10306.65)*100
RPCE=(2512.08/5037.67)*100
= 31.84 % = 66.14 % = 49.86 %

7. RETURN ON EQUITY(ROE) =
= (EARNING AFTER TAX – PREFERENCE DIVIDEND)/ EQUITY
SHAREHOLDER'S FUND

2008 2007
ROE = (7536.78 / 17313.16)*100 ROE = (6202.29 / 23063.57)*100
= 43.53 % = 26.89 %

2006 2005 2004

ROE=(4012.97/12601.41)*100 ROE=(6816.97/10306.65)*100 ROE=(2512.08/5037.67)*100
= 31.84 % = 66.14 % = 49.86 %

8. EARNING PER SHARE(EPS) = EARNING AFTER TAX / NO.

OF EQUITY SHARES
2008 2007
EPS = (7536.78 / 413.04) EPS = (6202.29 / 413.04)
= 18.25 = 15.02
2006 2005 2004
EPS=(4012.97/413.04) EPS=(6816.97/413.04) EPS=(2512.08/413.04)
= Rs 9.72 = Rs 16.50 =Rs 6.08

9. DIVIDEND PER SHARE(DPS) = TOTAL EQUITY

DIVIDEND / NO. OF SHARES
 2008 2007
DPS = (1528.25 / 413.04) DPS = (1280.42 /413.04)
= 3.70 = 3.09

2006 2005 2004

DPS=(826.02/413.04) DPS=(1362.47/413.04) DPS = NILL
= Rs 2 = Rs 3.30

10. DIVIDEND PAYOUT RATIO (DPR)= (DPS / EPS)*100

2008 2007
DPR = (3.70 / 18.25)*100 DPR = (3.09 / 15.02)*100
= 20.27 % = 20.57 %

2006 2005 2004

DPR=(2/9.72)*100 DPR=(3.30/16.50)*100 DPR = NILL
= 20.57 % = 20 %

PROFITABILITY RATIOS OF TISCO

1. GROSS PROFIT RATIO(GPR) = (GROSS PROFIT / NET SALES)*100
GROSS PROFIT(GP) = NET SALES(NS) – COST OF GOODS SOLD(CGS)

CGS = OPENING STOCK(OS) + NET PURCHASE(NP)+ DIRECT EXPENSE(DE) – CLOSING

STOCK(CS)

2008 2007

GP = 13678.21 GP = 12014.25

NET SALES = 19693.28 NET SALES = 17551.09

GPR = ( 13678.21 / 19693.28 )*100 GPR = (12014.25 / 17551.09)*100

= 69.45 % = 68.45 %

2006 2005

GPR = (10774.95 / 15139.39)*100 GPR = (11036.72 / 14498.95)*100

= 71.17 % = 76.12 %
 2004

GPR = 69.18 %

2. NET PROFIT RATIO(NPR) = (NET PROFIT(NP) / NET SALES )*100

2008 2007

NP = 4687.03 NP = 4222.15
NS = 19693.28 NS = 17551.09

NPR = (4687.03 / 19693.28 )*100 NPR = (4222.15 / 17551.09)*100

= 23.80 % = 24.05 %

2006 2005 2004

NPR=(3506.38 / 15139.39)*100 NPR=(3474.16 / 14498.95)*100 NPR= 25.86 %

= 23.16 % = 23.96 %

3. OPERATING PROFIT RATIO(OPR)= (OPERATING PROFIT / NET

SALES)*100

OPERATING PROFIT(OP) = GP – OPRATING EXPENSES(OE)

2008 2007
OPR = (10894.27 / 19693.28)*100 OPR = (9327.93 / 17551.09)*100

= 55.32 % = 53.14 %

2006 2005

OPR = (8262.83 / 15139.39)*100 OPR = (8639.39 / 14498.95)*100

= 54.57 % = 59.58 %

2004

OPR = 60.69 %

4. OPERATING RATIO(OR) = (OPERATING COST(OC) / NS)*100

OC = (CGS + OE)
 2008 2007

OR = (8799.01 / 19693.28)*100 OR = (8223.16 / 17551.09)*100

= 44.68 % = 46.85 %

2006 2005 2004

OR=(6876.56/15139.39)*100 OR=(5859.56/14498.95)*100 OR= 43.27 %
= 45.42% = 40.41 %

5.RETURN ON CAPITAL EMPLOYED(RCE) =(NPBIT / CAPITAL

EMPLOYED(CE))*100
NPBIT = NET PROFIT BEFORE INTEREST & TAX

2008 2007
RCE = (7945.06 / 27300.73)*100 RCE = (6435.55 / 14096.15)*100
= 29.10 % = 45.65 %

2006 2005
RCE = 40.76 % RCE = 49.69 %

2004

RCE = 28.10 %

6. RETURN ON PROPRIETOR'S CAPITAL EMPLOYED(RPCE) =

= (EARNING AFTER TAX / SHAREHOLDER'S FUND)

2008 2007
RPCE = (4687.03 / 27300.73)*100 RPCE = (4222.15 /14096.15)*100
= 17.17 % = 29.95 %

2006 2005 2004

RPCE=(3506.38/9502.03)*100 RPCE=(3474.16/6845.10)*100 RPCE = 64.47 %
= 36.94 % = 50.75 %

7. RETURN ON EQUITY(ROE) =
= (EARNING AFTER TAX – PREFERENCE DIVIDEND)/ EQUITY
SHAREHOLDER'S FUND
 2008 2007
ROE = (4664.84 / 27300.73)*100 ROE = (4222.15 / 14096.15)*100
= 17.09 % = 29.95 %

2006 2005 2004

ROE=(3506.38/9502.03)*100 ROE=(3474.16/6845.10)*100 ROE = 64.47 %
= 36.94 % = 50.75 %

8. EARNING PER SHARE(EPS) = EARNING AFTER TAX / NO.

OF EQUITY SHARES
2008 2007
EPS = Rs 67.17 EPS = Rs 65.28

2006 2005 2004

EPS=Rs 63.65 EPS=Rs 62.77 EPS=Rs 31.55

9. DIVIDEND PER SHARE(DPS) = TOTAL EQUITY

DIVIDEND / NO. OF SHARES

2008 2007
DPS = (1168.93 / 73.07) DPS = (943.91 /58.06)
= Rs 15.99 = Rs 16.25

2006 2005 2004

DPS=(719.51/55.3) DPS=(719.51/55.3) DPS = Rs 15.30
= Rs 13.01 = Rs 13.01

10. DIVIDEND PAYOUT RATIO (DPR)= (DPS / EPS)*100

2008 2007
DPR = (15.99/ 67.17)*100 DPR = (16.25 / 65.28)*100
= 23.80 % = 24.89

2006 2005 2004

DPR = 23.40 % DPR= = 23.61% DPR = 23.89 %
2004 2005 2006 2007 2008

SAIL 45.29% 55.98% 45.10% 49.68% 45.89%

TISCO 69.18% 76.12% 71.17% 68.45% 69.45%

GROSS PROFIT RATIOS

Gross profit ratio is to test the profitability and management efficiency.
Higher the GPR,better it is for the company.
As we can see , GPR of TISCO is higher than SAIL so, we can say that in terms of
profitability, TISCO is a better company.
The low ratio of SAIL can be due to over investment in company's fixed assets.
80

70

60

50
SAIL
40
TISCO
30

20

10

0
2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

SAIL 11.79% 23.90% 14.41% 18.28% 19.07%

TISCO 25.86% 23.96% 23.16% 24.05% 23.80%

Net profit Ratio

This ratio indicates the net results of the working of the company during the period
& reveals the overall profitability of the concerned company. Higher the ratio the
better it is because the available residual income shareholders become more.
The above table shows that the overall profitability condition of both the companies
is not good but TISCO is at a better position than SAIL.

30

25

20

SAIL
15
TISCO

10

0
2004 2005 2006 2007 2008
 2004 2005 2006 2007 2008

SAIL 35.19% 48.10% 34.47% 37.95% 53.27%

TISCO 60.69% 59.58% 54.57% 53.14% 55.32

Operating profit ratio

The above ratio shows the extent of pure profit earned on every one rupee of sales.
The profit earned from operations of TISCO is higher as compared to SAIL.
The higher the ratio the better it is.
70
60
50
40
SAIL
TISCO
30
20
10
0
2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

SAIL 64.80% 51.89% 65.52% 62.04% 58.17%

TISCO 43.27% 40.41% 45.42% 46.85% 44.68%

Operating ratio
The above ratio measures the extent of expenditure incurred in production and
sales of goods. Higher the ratio the better it is.As we can see that the Operating
cost of SAIL is higher than TISCO this means the revenue generated by sales are
being discarded by
70

60
Operating cost.
50

40 SAIL
TISCO
30

20

10

0
2004 2005 2006 2007 2008
 2004 2005 2006 2007 2008

SAIL 70.02% 96.73% 49.00% 42.29% 67.69%

TISCO 28.10% 49.69% 40.76% 45.65% 29.10%

Return on Capital Employed

It analyses the net income per rupee of average total assets. Higher the ratio the
better it is. This means SAIL is earning good returns on capital employed as
compared to TISCO. In the year 2005 , SAIL received the maximum return i.e 96.73%

120

100

80
SAIL
60
TISCO
40

20

0
2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

SAIL 49.86% 66.14% 31.84% 26.89% 43.53%

TISCO 64.47% 50.75% 36.94% 29.95% 17.17%

Return on Proprietor's Capital Employed

The above ratio analyses the profitability of shareholder's fund invested in the
business. Higher the ratio the better it is. This means SAIL is providing better
returns on
70
60
shareholders fund as
50 compared to TISCO.
40 SAIL
30 TISCO

20
10
0
2004 2005 2006 2007 2008
 2004 2005 2006 2007 2008

SAIL 49.86% 66.14% 31.84% 26.89% 43.53%

TISCO 64.47% 50.75% 36.94% 29.95% 17.09%

Return on Equity
This ratio analyses the profitability of Equity fund invested in the business. Higher
the ratio the better it is for the company. The above table shows that SAIL has a
better return on Equity than TISCO for the year 2008.

70

60

50

40 SAIL
TISCO
30

20

10

0
2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

SAIL 6.08 16.5 9.72 15.02 18.25

TISCO 31.55 62.77 63.65 65.28 67.17

Earning per Share

This ratio analyses the earnings per share available to Equity shareholders, whether
distributed or not. Higher the amount the mor will be the earning. The above table
shows that the Earning per share of TISCO is more than SAIL.
 80
70
60
50
SAIL
40
TISCO
30
20
10
0
2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

SAIL Nill 3.3 2 3.09 3.7

TISCO 31.55 62.77 63.65 16.25 15.99

Dividend per share

This ratio analyses the amount of profit distributed per share to Equity share-
-holders. Higher the amount the better it is. The above table shows that TISCO is
declaring good dividend to its Equity shareholders as compared to SAIL.

70
60
50

40 SAIL
TISCO
30
20
10
0
2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

SAIL Nill 20.00% 20.57% 20.57% 20.27%

TISCO 15.30% 13.01% 13.01% 24.89% 23.80%

Dividend Payout ratio

It analyses the amount of dividend distributed out of the earnings of Equity shares.
Higher the ratio the better it is. SAIL did not declare any dividend in the year 2004 .
30

25

20

SAIL
15
TISCO

10

0
2004 2005 2006 2007 2008