Ration Analysis Jsw Steel Essay

4445 Words Sep 21st, 2012 18 Pages
RATIO ANALYSIS COMMON SIZE STATEMENT ANALYSIS

2011168

Rutul Mehta

1

RATIO ANALYSIS
LIQUIDITY RATIOS
1. Current Ratio = = = Current Assets/ Current Liabilities 10188.37/10064.73 1.01 201103 4138.41 838.65 1886.88 3324.43 10188.37 9667.33 397.4 10064.73 1.01 201003 2585.77 563.25 287.11 2123.39 5559.52 7357.67 264.22 7621.89 0.73 200903 2051.42 398.14 419.96 1762.12 4631.64 7476.28 80.93 7557.21 0.61 200803 1549.16 337.39 339.22 860.23 3086 3738.12 363.71 4101.83 0.75 200703 1011.35 245.16 337.8 884.87 2479.18 2232.27 68.77 2301.04 1.08

Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions
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Moreover, it is much lower than the industry standard of 1.2. Around 40% of the current assets are tied up in the inventories, leading to a low liquidity position. The liquidity position, though, has improved significantly over the last few years, increasing from 0.39 in the previous year to 0.6 in the current year.

3.

Cash Performance Ratio = = =

(Cash + Bank + Cash Equivalents)/ Current Liabilities 1886.88/10064.73 0.187

Cash and Bank Current Liabilities Provisions Total Current Liabilities Cash Performance Ratio

1886.88 9667.33 397.4 10064.73 0.187

287.11 7357.67 264.22 7621.89 0.038

419.96 7476.28 80.93 7557.21 0.056

339.22 3738.12 363.71 4101.83 0.083

337.8 2232.27 68.77 2301.04 0.147

Cash Performance Ratio of 0.187 again highlights the poor liquidity position of the company, from a cash perspective. The company is not in a position to pay all its current liabilities through the available cash and bank reserves. The company may have to sell of its inventory or raise short-term loans to meet its short-term obligations. The ratio, however, has been the highest in the last 5 years, indicating the best performance over this period.

4. Cash Flow from Operating activities/ Current Liabilities = 2042.98/10064.73 = 0.20
201103 Net Cash from Operating Activities Total Current Liabilities Ratio 2042.98 10064.7 0.203 201003 3282.6 7621.89 0.431 200903 4175.56 7557.21 0.553 200803 3551.87 4101.83

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