Ratio Analysis of

Ratio Analysis of JDW Sugar Mills
Ratio Analysis of
Sugar Mills
Superior University Lahore
Page 1
Submitted To
Sir Younas
Submitted By
Imran Siddique 10149
Waqas Dastageer 10134
Rayyan Ansar 10264
Imran Rasool 10112
Sameul Stephan 10263
Page 2
1. Profitability Ratios:
a) Gross Profit Ratio

2011
2010
Gross Profit
= 4,215,670,940
=3,636,032,719
Net Sales
= 24,729,491,207
=20,380,683,879
Gross Profit Ratio
= G.P Net Sales 100
= 4,215,670,94024,729,491,207100 3,636,032,719 20,380,683,879100

= 17.04%
=17.84%
Comment: Gross profit ratio decreases then previous year. Its alarming condition
for company
b) Operating Profit Ratio

2011
2010
Operating Profit
= 3,512,801,651
=3,125,896,458
Net Sales
= 24,729,491,207
=20,380,683,879
Operating Profit Ratio = Operating Profit Net Sales 100

= 3,512,801,651 24,729,491,207 100
=3,125,896,458 20,380,683,879100
= 14.20 %
= 15.34 %
Comment: Operating profit ratio decreases as respected to previous year; its not good for
company.
Page 3
c) Net Profit Ratio

2011
2010
Net Profit
1,343,185,766
=1,245,983,556
Net Sales
24,729,491,207
=20,380,683,879
Net Profit Ratio = Net Profit Net Sales 100

=1,343,185,766 24,729,491,207 100
=5.43%
=1,245,983,55620,380,683,879100
= 6.11%
Comment: Net profit ratio is decreases as respected to precious year its not good for company.
d) Return on Capital Employed

2011
PBIT
2010
= 2,179,708,348
Capital Employed
=1,957,456,955
= Total Assets Current Liabilities

= 19,244,044,908 8,320,707,048 =12,179,586,049 4,365,876,854
= 10,923,337,860
ROCE
= 7,813,709,195
PBIT Capital Employed 100
= 2,179,708,348 10,923,337,860 100 =1,957,456,9557,813,709,195100

= 19.96 %
= 25.05%
Comment: ROCE decreases with respect to previous financial year its not good for company
Page 4
2. Liquidity and Working Capital Ratios

a) Current Ratios
2011
Current Assets
2010
6,505,191,648
=3,322,456,862
Current Liabilities =
8,320,707,048
=4,365,876,854
Current Ratios
Current Assets Current Liabilities
= 6,505,191,648 8,320,707,048
=3,322,456,8624,365,876,854
= 0.76 Times
0.78 Times
Comment: its increases as respected to previous year its good for company.
b) Quick Ratios
2011
Quick Assets
2010
= Current Assets Inventories Prepaid Expenses

= 6,505,191,648 1,922,057,309 16,176,487
=3,322,456,862-206,682,011-12,637,267
= 4,566,957,852
=3,103,137,584
Current Liabilities = 8,320,707,048

Quick Ratio
= Quick Assets Current Liabilities

= 4,566,957,852 8,320,707,048
= 0.55 Times
=3,103,137,5844,365,876,854
= 0.71 Times
Comment: it decrease then previous year its not good for the company.
Page 5
c) Account Receivable Collection Period Ratio

2011
2010
A/R
= 9,298,229
=13,128,930
Net sales
= 24,729,491,207
=20,380,683,879
= A/R Net Sales 365

= 9,298,22924,729,491,207 365
=13,128,93020,380,683,879365
= 0.137 Days
= 0.235 Days
Comment: Collection period ratio decreases it not good for the company.
d) Account Payable Ratio Period

2011
A/P
2010
= 278,027,973
=324,909,679
Net purchases = 20,215,929,565
=13,767,259,901
= A/P Net Purchases 365

= 278,027,973 20,215,929,565 365
=324,909,67913,767,259,901365
5.01 Days
8.61 Days
Comment: Payable period ratio decreases it not good for the company.
Page 6
e) Average Inventory turnover Period

2011
2010
Inventory
= 1,922,057,309
= 206,682,011
CGS
= 20,513,820,267
= 15,515,036,266
Av. Inventory turnover Period = inventory CGS 365

= 1,922,057,309 20,922,057,309 365 =206,682,01115,515,036,266365
= 34.2 Times
= 4.86 Times
Comment: it increases too much its very good for the company.
3. Leverage Ratios
a) Debt Equity Ratios

2011
Long term debt
2010
= 4,068,000,001
=2,571,888,890
Shareholders capital = 4,816,905,952

Debt equity ratio
=3,417,492,310
= Long term Debt Shareholders Capital

= 4,068,000,001 4,816,905,952
=2,571,888,8903,417,492,310
= 0.85
= 0.75
Comment: Debt ratio increases so its poor for the company.
Page 7

b) Interest Coverage Ratios
4)
2011
2010
Nill
Nill
Shareholders Investment Ratios

a) Return on Shareholders Equity Ratio
Net profit after tax
= 1,343,185,766
Average shareholder equity = opening shareholder equity + closing shareholder equity 2

= 3,417,492,310 + 4,816,905,957 2
= 0+3,417,492,3102
= 8,234,398,262 2
=1,708,746,155
= 4,117,199,131
= Net profit after tax average shareholder equity
= 1,343,185,766 4,117,199,131
=1,245,983,5561,708,746,155
= 0.33
= 0.73
Comment: its not good for the company.
Page 8
b) Earnings per Share

2011
EPS
2010
= Net profit after tax + pr. Dividend number of ordinary shares
N.P after tax = 1,343,185,766

No. of ordinary shares = 54,998,113
= 1,343,185,766 54,998,113
= 24.42 Rs.
22.89 Rs.
Comment: as earning per share increases its in favour of company.
c) Dividend Yield
2011
2010
Nill
Nill
Page 9
Limitations of Ratio Analysis

Ratio analysis is a widely used tool of financial analysis. Yet it suffers from various limitations.
12345-
Ratios are not defined in standard form

Interpretation needs careful analysis and should not be considered in isolation
Availability of comparable information
Use of historical data
It can be subject to manipulation
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Ratio Analysis of JDW Sugar Mills

Superior University Lahore