Ratio Analysis,,nit Durgapur
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RATIO ANALYSIS TABLE 1 - CURRENT ASSETS
Gabriel India Ltd.
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Marketable investment
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
0
0
0
0.98
0.98
0.98
9.33
10.07
15.08
17.7
21.11
24.97
Raw materials
8.61
9.46
14.38
16.95
18.41
21.9
Stores and spares
0.72
0.61
0.7
0.75
2.7
3.07
12.53
11.3
13.11
13.91
20.03
21.95
Finished goods
9.97
7.7
8.93
10.05
12.19
13.73
Semi-finished goods
2.56
3.6
4.18
3.86
7.84
8.22
Incomplete construction contracts
0
0
0
0
0
0
Stock real estate
0
0
0
0
0
0
Stock of shares / securities
0
0
0
0
0
0
Other stock
0
0
0
0
0
0
Total Inventory
21.86
21.37
28.19
31.61
41.14
46.92
Sundry debtors
46.11
48.07
54.69
51.11
50.62
68.15
Cash in hand
0.48
0.09
0.21
0.11
0.09
0.14
Bank balance
0.73
2.42
1.8
1.97
15.62
16.11
1.21
2.51
2.01
2.08
15.71
16.25
69.18
71.95
84.89
85.78
108.45
132.3
Raw materials and stores
Finished and semi-finished goods
Cash & bank balance
TOTAL CURRENT ASSETS
TABLE 2 - CURRENT LIABILITIES
Gabriel India Ltd. Sundry creditors
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
36.99
38.44
53.04
49.04
54.68
69.71
2.28
2
2.05
1.27
0.69
0.06
0
0
0
0
0
0
4.54
4.88
3.92
4.59
5.99
6.44
Share application money
0
0
0.05
0
0
0
Advance against WIP
0
0
0
0
0
0
43.81
45.32
59.01
54.9
61.36
76.21
20.2
31.26
19.67
20.59
27.45
69.85
64.01
76.58
78.68
75.49
88.81
146.06
Interest accrued / due Creditors for capital goods Other current liabilities
Current liabilities Short term bank borrowings
TOTAL CURRENT LIABILITIES
TABLE 3 - OPERATING EXPENSES
Gabriel India Ltd. Raw materials, stores, etc.
Mar 2001 12 mths
Mar 2003 12 mths
Mar 2004 12 mths
Mar 2005 12 mths
Mar 2006 12 mths
132.65
150.31
208
213.52
262.01
313.64
18
19.21
24.05
27.65
31.98
38.32
7.88
8.21
9.9
10.18
10.9
12.28
Wages & salaries Energy (power & fuel) Indirect taxes (excise, etc.)
Mar 2002 12 mths
36.52
42.23
52.55
58.75
66.59
80.92
Advertising & marketing expenses
7.26
13.31
11.84
13.93
11.26
16.74
Distribution expenses
3.51
3.78
4.26
4.48
5.1
6.49
205.82
237.05
310.6
328.51
387.84
468.39
Expenditure Less: Depreciation
Operating Expenses
10.87
12.21
13.7
14.58
14.74
15.31
194.95
224.84
296.9
313.93
373.1
453.08
FORMULAS CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES QUICK RATIO = (CURRENT ASSETS - INVENTORY) / CURRENT LIABILITIES CASH RATIO = (CASH + BANK + MARKETABLE SECURITIES) / CURRENT LIABILITIES INTERVAL MEASURE = (CURRENT ASSETS - INVENTORY) / AVG. DAILY OP. EXPENSES
TABLE 4 - LIQUIDITY RATIOS
Gabriel India Ltd. CURRENT RATIO QUICK RATIO CASH RATIO INTERVAL MEASURE
Mar 2001 12 mths
1.08 0.74 0.02 87.38
Mar 2002 12 mths
0.94 0.66 0.03 80.99
Mar 2003 12 mths
1.08 0.72 0.03 68.75
Mar 2004 12 mths
1.14 0.72 0.03 62.12
Mar 2005 12 mths
1.22 0.76 0.18 64.95
Mar 2006 12 mths
0.91 0.58 0.11 67.84
Liquidity ratios is a measure of the firm's ability to meet its current obligations. Ratios in Table 4 indicate that Gabriel India's liquidity is deteriorating, thereby reducing the margin of safety of creditors. It is a note of caution for the creditors. Though it is good for management as they have more liabilities than current assets as idle assets earn nothing. But they must ensure that they don't suffer from lack of liquidity otherwise it will result in poor credit worthiness and loss of creditors' confidence.
Table 5 - Total Debt
Gabriel India Ltd.
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Bank borrowings
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
20.2
31.26
44.01
68.46
62.56
92.31
Short term bank borrowings
20.2
31.26
19.67
20.59
27.45
69.85
Long term bank borrowings
0
0
24.34
47.87
35.11
22.46
Financial institutional borrowings
30.68
24
0
0
0
0
Govt. / sales tax deferral borrowings
11.49
0
0
0
0
0
Debentures / bonds
43.86
31.46
17.26
0
0
0
Fixed deposits
22.64
22.98
19.47
13.24
3.81
0.16
Foreign borrowings
0
0
0
0
12.14
0
Borrowings from corporate bodies
0
0
0
1
0
0
0
0
0
0
0
0
Borrowings from promoters / directors
0
0
0
0
0
0
Commercial paper
0
0
0
0
0
0
8.24
18.5
24.21
17.63
14.7
15.19
137.11
128.2
104.95
100.33
93.21
107.66
Group / associate cos.
Other borrowings
Total Debt
Table - 6 Net Worth
Gabriel India Ltd. Paid-up equity capital
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
7.12
7.13
7.13
7.19
7.18
0
0
0
0
0
0
1.24
1.24
1.24
1.24
1.24
1.24
Buy back amount
0
0
0
0
0
0
Buy back shares (nos.)
0
0
0
0
0
0
8.36
8.37
8.37
8.43
8.42
8.42
Preference capital Bonus equity capital
Equity Capital Free reserves
7.18
62.1
51.6
56.12
76.84
89.02
92.12
Share premium reserves
34.29
34.29
34.29
34.36
34.36
34.36
Other free reserves
27.81
17.31
21.83
42.48
54.66
57.76
21.21
16.16
9
0.17
0.17
0.17
Revaluation reserves
0
0
0
0
0
0
Accumulated losses
0
0
0
0
0
0
83.31
67.76
65.12
77.01
89.19
92.29
0.26
0.19
0
0
0
0
91.41
75.94
73.49
85.44
97.61
100.71
228.52
204.14
178.44
185.77
190.82
208.37
Specific reserves
Reserves & surplus Less: Share issue expenses not written off Net Worth Capital Employed = Net Worth + Total Debt
Long Term Debt = Total Debt - Short Term Borrowing
116.91
96.94
85.28
79.74
65.76
37.81
EBDIT
35.64
37.49
47.74
49.50
50.41
41.46
Depreciation
10.87
12.21
13.70
14.58
14.74
15.31
EBIT
24.77
25.28
34.04
34.92
35.67
26.15
Interest
19.73
17.86
13.71
8.80
7.33
8.60
4.57
3.96
11.72
16.68
17.89
8.84
PAT
Table - 7 Leverage Ratios
Gabriel India Ltd.
Mar 2001 12 mths
Mar 2002 12 mths
Mar 2003 12 mths
Mar 2004 12 mths
Debt Ratio = Total Debt / Capital Employed 0.60 0.63 0.59 0.54 Debt Equity Ratio = Total Debt / Net Worth 1.50 1.69 1.43 1.17 Capital Employed / Net Worth 2.50 2.69 2.43 2.17 Long Term Debt Ratio = Long Term0.56 Debt / Net 0.56 Worth + Long 0.54Term Debt 0.48 Coverage Ratio = EBDIT / Interest 1.81 2.10 3.48 5.63
Mar 2005 12 mths
Mar 2006 12 mths
0.49
0.52
0.95
1.07
1.95 0.40
2.07 0.27
6.88
4.82
Leverage ratios show the proportions of debt and equity in financing the firm's assets. They are calculated to measure the financial risk and the firm's ability of using debt to shareholders' advantage. The debt ratio in Table 7 shows that within this period the debt employed is reduced from 60% to 50%. It shows that the company is lowering the amount of debt which is evident from debt-ratio and longterm debt ratio, which has been reduced significantly. It is a good sign that the debt is maintained within 50% during the last three years. This implies that the firm can borrow funds on easier terms. Moreover, the amount of interest paid on debt is also reduced, thus increasing the coverage ratio. Therefore, it is good for creditors as their money as well as the owners money is equally used for expansion.
Table 8 - Cost of Good Sold
Gabriel India Ltd.
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
Sales
270.16
310.23
379.13
424.63
482.73
568.31
PBDIT
35.64
37.49
47.74
49.5
50.41
41.46
234.52
272.74
331.39
375.13
432.32
526.85
21.9
Cost Of Goods Sold =Sales - PBDIT
Table 9 - Average Inventory Raw materials
8.61
9.46
14.38
16.95
18.41
Stores and spares
0.72
0.61
0.7
0.75
2.7
3.07
Finished goods
9.97
7.7
8.93
10.05
12.19
13.73
2.56
3.6
4.18
3.86
7.84
8.22
Total Inventory
Semi-finished goods
21.86
21.37
28.19
31.61
41.14
46.92
Avg Inv{(op.sto+clo.sto)/2}
21.86
21.62
24.78
29.90
36.38
44.03
68.15
Table 10 - Average Debtors Sundry debtors Debtors exceeding six months
Total debtors Average Debtors = (Opening - Closing Debtor)/2
46.11
48.07
54.69
51.11
50.62
1.4
0.88
1.5
1.01
1.83
1.35
46.11
48.07
54.69
51.11
50.62
68.15
46.11
47.09
51.38
52.9
50.87
59.39
Table 11 - Net Current Asset & Net Asset Short term bank borrowings
20.2
31.26
19.67
20.59
27.45
69.85
36.99
38.44
53.04
49.04
54.68
69.71
Interest accrued / due
2.28
2
2.05
1.27
0.69
0.06
Other current liabilities
4.54
4.88
3.92
4.59
5.99
6.44
4.96
7.2
12.32
19.48
31.15
39.62
68.97
83.78
91
94.97
119.96
185.68
Sundry creditors
Provisions Total Current Liabilities Marketable investment
0
0
0
0.98
0.98
0.98
Raw materials
8.61
9.46
14.38
16.95
18.41
21.9
Stores and spares
0.72
0.61
0.7
0.75
2.7
3.07
Finished goods
9.97
7.7
8.93
10.05
12.19
13.73
Semi-finished goods Sundry debtors Accrued income Advance payment of tax Other receivables
2.56
3.6
4.18
3.86
7.84
8.22
46.11
48.07
54.69
51.11
50.62
68.15
0
0
0
0
0
0
4.69
5.23
3.84
13.44
22.85
33.83 33.92
30.43
31.11
40.98
41.19
34.31
Cash in hand
0.48
0.09
0.21
0.11
0.09
0.14
Bank balance
0.73
2.42
1.8
1.97
15.62
16.11
104.3
108.29
129.71
140.41
165.61
200.05
Total Current assets
Gabriel India Ltd. Net Current Assets(Current AssetsCurrent Liabilities) Net fixed assets Group / associate cos. Other cos. Deposits with govt. / agencies In group / associate cos. In mutual funds Other investments
Net Fixed Assets Total Assets Net Assets(Net Fixed Assets+Net Current Assets)
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
35.33
24.51
38.71
45.44
45.65
14.37
135.08
131.37
138.09
139.24
134.11
136.34
23.73
7.18
0.33
0
0
0
0.1
0.04
0
0.06
0.03
0.34
0.97
1.04
1.88
2.33
3.67
4.37
10
26
0
0
0
0
1.46
1.46
1.46
0
0
0
0
0
0
0.98
0.98
0.98
171.34 275.64
167.09 275.38
141.76 271.47
142.61 283.02
138.79 304.4
142.03 342.08
206.67
191.6
180.47
188.05
184.44
156.4
Table 12 - Activity Ratio
Inventory Turnover = Cost of Goods Sold / Avg. Inventory DIH = 360/ Inventory Turnover Debtors Turnover = Sales/ Avg Debtors Collection Period = 360 / Debtor Turnover Total Asset Turnover = Sales / Total Asset
10.73
12.62
13.37
12.55
11.89
11.97
33.56
28.53
26.92
28.69
30.29
30.09
5.86
6.59
7.38
8.03
9.49
9.57
61.44
54.64
48.79
44.85
37.93
37.62
1.31
1.62
2.10
2.26
2.62
3.63
The activity ratios are employed to evaluate the efficiency with which the firm manages and utilises its assets. They indicate the speed with which assets are being converted into sales. Inventory turnover indicates the efficiency of the firm in producing and selling its product. Gabriel India's inventory turnover has gradually increased in the past years. In other words, the inventory holding period has reduced marginally. On an average, they are holding an inventory of 30 days, which is neither too low, nor too high.
Debtor turnover indicate the number of times debtors turnover each year. Gabriel India's debtor turnover has increased considerably to 9.57 times. In other words, the average collection period hs reduced to 37 days in 2006 compared to 61 days in 2005. This shows that credit management efficiency of Gabriel India. Total asset turnover shows the firm's ability in generating sales from all financial resources. Gabriel India's total asset turnover has been increasing gradually in the past years to 3.63, i.e, it almost tripled from 2001 to 2006. This shows that Gabriel India generate a sale of Rs. 3.63 for every one rupee of investment. Table 13 - Profitability Ratios
Gabriel India Ltd. Net Profit Margin = EBIT/ Sales Operating Expense Ratio = Cost of Goods Sold / Sales ROTA = EBIT/ Total Assets RONA = EBIT/ Net Assets ROE = PAT/ NW EPS* = PAT / No. of Outstanding Shares DPS = Dividend / No. of Outstanding Shares PE Ratio = Market Value / EPS
Mar 2001 12 mths
Mar 2002 12 mths
Mar 2003 12 mths
Mar 2004
Mar 2005
12 mths
12 mths
Mar 2006 12 mths
0.09
0.08
0.09
0.08
0.07
0.05
0.87 0.09 0.12 0.05
0.88 0.09 0.13 0.05
0.87 0.13 0.19 0.16
0.88 0.12 0.19 0.20
0.90 0.12 0.19 0.18
0.93 0.08 0.17 0.09
N.A.
N.A.
N.A.
23.22
24.91
1.23
N.A.
N.A.
N.A.
6.00
7.00
0.70
N.A.
N.A.
N.A.
5.90
7.43
27.50
*In 2006, the shares of the company having face value Rs. 10 were split into 10 shares of Re. 1 each. Profitability Ratios indicate the operating efficiency of a firm. The profitability of Gabriel India has increased till 2005, but in the last year, it has reduced considerably. This is because of the fact that though the sales has increased, the propotionate increase in COGS is more(because of increase in Raw Material price). As a result, operating expenses has increased. This has also reduced the EBIT and thus PAT. As a cascading effect, all the profitability ratios have reduced. Table 13 shows that EPS and DPS have increased in the year 2005 because of increase in PAT. However, in the year 2006, as a result of decreased profit margin, the EPS has declined but the DPS is maintained at 70% of face value. P-E Ratio reflects investors' expectations about growth in the firm earning. P-E Ratio of Gabriel India has increased to 27.50 because of fall in EPS which is due to decrease in PAT. Thereby indicating that the share is priced more.
Gabriel India Ltd.
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Marketable investment
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
0
0
0
0.98
0.98
0.98
9.33
10.07
15.08
17.7
21.11
24.97
Raw materials
8.61
9.46
14.38
16.95
18.41
21.9
Stores and spares
0.72
0.61
0.7
0.75
2.7
3.07
12.53
11.3
13.11
13.91
20.03
21.95
Finished goods
9.97
7.7
8.93
10.05
12.19
13.73
Semi-finished goods
2.56
3.6
4.18
3.86
7.84
8.22
Incomplete construction contracts
0
0
0
0
0
0
Stock real estate
0
0
0
0
0
0
Stock of shares / securities
0
0
0
0
0
0
Other stock
0
0
0
0
0
0
Total Inventory
21.86
21.37
28.19
31.61
41.14
46.92
Sundry debtors
46.11
48.07
54.69
51.11
50.62
68.15
Cash in hand
0.48
0.09
0.21
0.11
0.09
0.14
Bank balance
0.73
2.42
1.8
1.97
15.62
16.11
1.21
2.51
2.01
2.08
15.71
16.25
69.18
71.95
84.89
85.78
108.45
132.3
Raw materials and stores
Finished and semi-finished goods
Cash & bank balance
TOTAL CURRENT ASSETS
TABLE 2 - CURRENT LIABILITIES
Gabriel India Ltd. Sundry creditors
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
36.99
38.44
53.04
49.04
54.68
69.71
2.28
2
2.05
1.27
0.69
0.06
0
0
0
0
0
0
4.54
4.88
3.92
4.59
5.99
6.44
Share application money
0
0
0.05
0
0
0
Advance against WIP
0
0
0
0
0
0
43.81
45.32
59.01
54.9
61.36
76.21
20.2
31.26
19.67
20.59
27.45
69.85
64.01
76.58
78.68
75.49
88.81
146.06
Interest accrued / due Creditors for capital goods Other current liabilities
Current liabilities Short term bank borrowings
TOTAL CURRENT LIABILITIES
TABLE 3 - OPERATING EXPENSES
Gabriel India Ltd. Raw materials, stores, etc.
Mar 2001 12 mths
Mar 2003 12 mths
Mar 2004 12 mths
Mar 2005 12 mths
Mar 2006 12 mths
132.65
150.31
208
213.52
262.01
313.64
18
19.21
24.05
27.65
31.98
38.32
7.88
8.21
9.9
10.18
10.9
12.28
Wages & salaries Energy (power & fuel) Indirect taxes (excise, etc.)
Mar 2002 12 mths
36.52
42.23
52.55
58.75
66.59
80.92
Advertising & marketing expenses
7.26
13.31
11.84
13.93
11.26
16.74
Distribution expenses
3.51
3.78
4.26
4.48
5.1
6.49
205.82
237.05
310.6
328.51
387.84
468.39
Expenditure Less: Depreciation
Operating Expenses
10.87
12.21
13.7
14.58
14.74
15.31
194.95
224.84
296.9
313.93
373.1
453.08
FORMULAS CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES QUICK RATIO = (CURRENT ASSETS - INVENTORY) / CURRENT LIABILITIES CASH RATIO = (CASH + BANK + MARKETABLE SECURITIES) / CURRENT LIABILITIES INTERVAL MEASURE = (CURRENT ASSETS - INVENTORY) / AVG. DAILY OP. EXPENSES
TABLE 4 - LIQUIDITY RATIOS
Gabriel India Ltd. CURRENT RATIO QUICK RATIO CASH RATIO INTERVAL MEASURE
Mar 2001 12 mths
1.08 0.74 0.02 87.38
Mar 2002 12 mths
0.94 0.66 0.03 80.99
Mar 2003 12 mths
1.08 0.72 0.03 68.75
Mar 2004 12 mths
1.14 0.72 0.03 62.12
Mar 2005 12 mths
1.22 0.76 0.18 64.95
Mar 2006 12 mths
0.91 0.58 0.11 67.84
Liquidity ratios is a measure of the firm's ability to meet its current obligations. Ratios in Table 4 indicate that Gabriel India's liquidity is deteriorating, thereby reducing the margin of safety of creditors. It is a note of caution for the creditors. Though it is good for management as they have more liabilities than current assets as idle assets earn nothing. But they must ensure that they don't suffer from lack of liquidity otherwise it will result in poor credit worthiness and loss of creditors' confidence.
Table 5 - Total Debt
Gabriel India Ltd.
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Bank borrowings
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
20.2
31.26
44.01
68.46
62.56
92.31
Short term bank borrowings
20.2
31.26
19.67
20.59
27.45
69.85
Long term bank borrowings
0
0
24.34
47.87
35.11
22.46
Financial institutional borrowings
30.68
24
0
0
0
0
Govt. / sales tax deferral borrowings
11.49
0
0
0
0
0
Debentures / bonds
43.86
31.46
17.26
0
0
0
Fixed deposits
22.64
22.98
19.47
13.24
3.81
0.16
Foreign borrowings
0
0
0
0
12.14
0
Borrowings from corporate bodies
0
0
0
1
0
0
0
0
0
0
0
0
Borrowings from promoters / directors
0
0
0
0
0
0
Commercial paper
0
0
0
0
0
0
8.24
18.5
24.21
17.63
14.7
15.19
137.11
128.2
104.95
100.33
93.21
107.66
Group / associate cos.
Other borrowings
Total Debt
Table - 6 Net Worth
Gabriel India Ltd. Paid-up equity capital
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
7.12
7.13
7.13
7.19
7.18
0
0
0
0
0
0
1.24
1.24
1.24
1.24
1.24
1.24
Buy back amount
0
0
0
0
0
0
Buy back shares (nos.)
0
0
0
0
0
0
8.36
8.37
8.37
8.43
8.42
8.42
Preference capital Bonus equity capital
Equity Capital Free reserves
7.18
62.1
51.6
56.12
76.84
89.02
92.12
Share premium reserves
34.29
34.29
34.29
34.36
34.36
34.36
Other free reserves
27.81
17.31
21.83
42.48
54.66
57.76
21.21
16.16
9
0.17
0.17
0.17
Revaluation reserves
0
0
0
0
0
0
Accumulated losses
0
0
0
0
0
0
83.31
67.76
65.12
77.01
89.19
92.29
0.26
0.19
0
0
0
0
91.41
75.94
73.49
85.44
97.61
100.71
228.52
204.14
178.44
185.77
190.82
208.37
Specific reserves
Reserves & surplus Less: Share issue expenses not written off Net Worth Capital Employed = Net Worth + Total Debt
Long Term Debt = Total Debt - Short Term Borrowing
116.91
96.94
85.28
79.74
65.76
37.81
EBDIT
35.64
37.49
47.74
49.50
50.41
41.46
Depreciation
10.87
12.21
13.70
14.58
14.74
15.31
EBIT
24.77
25.28
34.04
34.92
35.67
26.15
Interest
19.73
17.86
13.71
8.80
7.33
8.60
4.57
3.96
11.72
16.68
17.89
8.84
PAT
Table - 7 Leverage Ratios
Gabriel India Ltd.
Mar 2001 12 mths
Mar 2002 12 mths
Mar 2003 12 mths
Mar 2004 12 mths
Debt Ratio = Total Debt / Capital Employed 0.60 0.63 0.59 0.54 Debt Equity Ratio = Total Debt / Net Worth 1.50 1.69 1.43 1.17 Capital Employed / Net Worth 2.50 2.69 2.43 2.17 Long Term Debt Ratio = Long Term0.56 Debt / Net 0.56 Worth + Long 0.54Term Debt 0.48 Coverage Ratio = EBDIT / Interest 1.81 2.10 3.48 5.63
Mar 2005 12 mths
Mar 2006 12 mths
0.49
0.52
0.95
1.07
1.95 0.40
2.07 0.27
6.88
4.82
Leverage ratios show the proportions of debt and equity in financing the firm's assets. They are calculated to measure the financial risk and the firm's ability of using debt to shareholders' advantage. The debt ratio in Table 7 shows that within this period the debt employed is reduced from 60% to 50%. It shows that the company is lowering the amount of debt which is evident from debt-ratio and longterm debt ratio, which has been reduced significantly. It is a good sign that the debt is maintained within 50% during the last three years. This implies that the firm can borrow funds on easier terms. Moreover, the amount of interest paid on debt is also reduced, thus increasing the coverage ratio. Therefore, it is good for creditors as their money as well as the owners money is equally used for expansion.
Table 8 - Cost of Good Sold
Gabriel India Ltd.
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
Sales
270.16
310.23
379.13
424.63
482.73
568.31
PBDIT
35.64
37.49
47.74
49.5
50.41
41.46
234.52
272.74
331.39
375.13
432.32
526.85
21.9
Cost Of Goods Sold =Sales - PBDIT
Table 9 - Average Inventory Raw materials
8.61
9.46
14.38
16.95
18.41
Stores and spares
0.72
0.61
0.7
0.75
2.7
3.07
Finished goods
9.97
7.7
8.93
10.05
12.19
13.73
2.56
3.6
4.18
3.86
7.84
8.22
Total Inventory
Semi-finished goods
21.86
21.37
28.19
31.61
41.14
46.92
Avg Inv{(op.sto+clo.sto)/2}
21.86
21.62
24.78
29.90
36.38
44.03
68.15
Table 10 - Average Debtors Sundry debtors Debtors exceeding six months
Total debtors Average Debtors = (Opening - Closing Debtor)/2
46.11
48.07
54.69
51.11
50.62
1.4
0.88
1.5
1.01
1.83
1.35
46.11
48.07
54.69
51.11
50.62
68.15
46.11
47.09
51.38
52.9
50.87
59.39
Table 11 - Net Current Asset & Net Asset Short term bank borrowings
20.2
31.26
19.67
20.59
27.45
69.85
36.99
38.44
53.04
49.04
54.68
69.71
Interest accrued / due
2.28
2
2.05
1.27
0.69
0.06
Other current liabilities
4.54
4.88
3.92
4.59
5.99
6.44
4.96
7.2
12.32
19.48
31.15
39.62
68.97
83.78
91
94.97
119.96
185.68
Sundry creditors
Provisions Total Current Liabilities Marketable investment
0
0
0
0.98
0.98
0.98
Raw materials
8.61
9.46
14.38
16.95
18.41
21.9
Stores and spares
0.72
0.61
0.7
0.75
2.7
3.07
Finished goods
9.97
7.7
8.93
10.05
12.19
13.73
Semi-finished goods Sundry debtors Accrued income Advance payment of tax Other receivables
2.56
3.6
4.18
3.86
7.84
8.22
46.11
48.07
54.69
51.11
50.62
68.15
0
0
0
0
0
0
4.69
5.23
3.84
13.44
22.85
33.83 33.92
30.43
31.11
40.98
41.19
34.31
Cash in hand
0.48
0.09
0.21
0.11
0.09
0.14
Bank balance
0.73
2.42
1.8
1.97
15.62
16.11
104.3
108.29
129.71
140.41
165.61
200.05
Total Current assets
Gabriel India Ltd. Net Current Assets(Current AssetsCurrent Liabilities) Net fixed assets Group / associate cos. Other cos. Deposits with govt. / agencies In group / associate cos. In mutual funds Other investments
Net Fixed Assets Total Assets Net Assets(Net Fixed Assets+Net Current Assets)
Mar 2001
Mar 2002
12 mths
Mar 2003
12 mths
Mar 2004
12 mths
Mar 2005
12 mths
Mar 2006
12 mths
12 mths
35.33
24.51
38.71
45.44
45.65
14.37
135.08
131.37
138.09
139.24
134.11
136.34
23.73
7.18
0.33
0
0
0
0.1
0.04
0
0.06
0.03
0.34
0.97
1.04
1.88
2.33
3.67
4.37
10
26
0
0
0
0
1.46
1.46
1.46
0
0
0
0
0
0
0.98
0.98
0.98
171.34 275.64
167.09 275.38
141.76 271.47
142.61 283.02
138.79 304.4
142.03 342.08
206.67
191.6
180.47
188.05
184.44
156.4
Table 12 - Activity Ratio
Inventory Turnover = Cost of Goods Sold / Avg. Inventory DIH = 360/ Inventory Turnover Debtors Turnover = Sales/ Avg Debtors Collection Period = 360 / Debtor Turnover Total Asset Turnover = Sales / Total Asset
10.73
12.62
13.37
12.55
11.89
11.97
33.56
28.53
26.92
28.69
30.29
30.09
5.86
6.59
7.38
8.03
9.49
9.57
61.44
54.64
48.79
44.85
37.93
37.62
1.31
1.62
2.10
2.26
2.62
3.63
The activity ratios are employed to evaluate the efficiency with which the firm manages and utilises its assets. They indicate the speed with which assets are being converted into sales. Inventory turnover indicates the efficiency of the firm in producing and selling its product. Gabriel India's inventory turnover has gradually increased in the past years. In other words, the inventory holding period has reduced marginally. On an average, they are holding an inventory of 30 days, which is neither too low, nor too high.
Debtor turnover indicate the number of times debtors turnover each year. Gabriel India's debtor turnover has increased considerably to 9.57 times. In other words, the average collection period hs reduced to 37 days in 2006 compared to 61 days in 2005. This shows that credit management efficiency of Gabriel India. Total asset turnover shows the firm's ability in generating sales from all financial resources. Gabriel India's total asset turnover has been increasing gradually in the past years to 3.63, i.e, it almost tripled from 2001 to 2006. This shows that Gabriel India generate a sale of Rs. 3.63 for every one rupee of investment. Table 13 - Profitability Ratios
Gabriel India Ltd. Net Profit Margin = EBIT/ Sales Operating Expense Ratio = Cost of Goods Sold / Sales ROTA = EBIT/ Total Assets RONA = EBIT/ Net Assets ROE = PAT/ NW EPS* = PAT / No. of Outstanding Shares DPS = Dividend / No. of Outstanding Shares PE Ratio = Market Value / EPS
Mar 2001 12 mths
Mar 2002 12 mths
Mar 2003 12 mths
Mar 2004
Mar 2005
12 mths
12 mths
Mar 2006 12 mths
0.09
0.08
0.09
0.08
0.07
0.05
0.87 0.09 0.12 0.05
0.88 0.09 0.13 0.05
0.87 0.13 0.19 0.16
0.88 0.12 0.19 0.20
0.90 0.12 0.19 0.18
0.93 0.08 0.17 0.09
N.A.
N.A.
N.A.
23.22
24.91
1.23
N.A.
N.A.
N.A.
6.00
7.00
0.70
N.A.
N.A.
N.A.
5.90
7.43
27.50
*In 2006, the shares of the company having face value Rs. 10 were split into 10 shares of Re. 1 each. Profitability Ratios indicate the operating efficiency of a firm. The profitability of Gabriel India has increased till 2005, but in the last year, it has reduced considerably. This is because of the fact that though the sales has increased, the propotionate increase in COGS is more(because of increase in Raw Material price). As a result, operating expenses has increased. This has also reduced the EBIT and thus PAT. As a cascading effect, all the profitability ratios have reduced. Table 13 shows that EPS and DPS have increased in the year 2005 because of increase in PAT. However, in the year 2006, as a result of decreased profit margin, the EPS has declined but the DPS is maintained at 70% of face value. P-E Ratio reflects investors' expectations about growth in the firm earning. P-E Ratio of Gabriel India has increased to 27.50 because of fall in EPS which is due to decrease in PAT. Thereby indicating that the share is priced more.
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