RATIO

ANALYSIS
M/s Enn Company
TOTAL INDEBTEDNESS RATIO = TOL/TNW

TOL = SHORT TERM + LONG TERM LIABILITIES

(OCC, CREDITOR, BILLS PAYABLE, EXPENSES PAYABLE
PROVISIONS, TERM LOAN, UNSECURED LOAN )
TNW = CAPITAL + RESERVES AND SURPLUS
INTANGIBLE ASSETS.
2014 2015
TOL 1160 1250
TNW 390 460
TOL/TNW 2.97:1 ~ 3:1 2.7:1

BENCH MARK 3:1

CAPACITY TO REPAY DEBT IS INCREASED
 CURRENT & QUICK RATIO
CURRENT RATIO = CA/CL
QUICK RATIO = (CA- INV OR STOCK) / CL

[ CA- INVESTMENTS, RAW MATERIAL, SIP, FINISHED GOODS, CASH,

RECEIVABLES, LOANS AND ADVANCES REDEMEBLE WITH IN 12 MONTHS ]
[CL - OCC, CREDITOR, BILLS PAYABLE, EXPENSES PAYABLE PROVISIONS]
[ INV - RAW MATERIAL, SIP, FINISHED GOODS ]

CA CL CA CURRENT QUICK
-INV RATIO RATIO
201 75 690 395 1.09 0.57
4 5
201 89 800 475 1.11 0.59
5 BENCH5MARK 1.33
LIQUIDITY INCREASED SLIGHTLY WRT 2014
DEBT EQUITY RATIO
DER = LONG TERM DEBT / TANGIBLE NETWORTH

2014 2015
LONG TERM 470 450
DEBT
TNW 390 460
DER 1.2:1 0.97:1
HIGHER THE RATIO LOWER THE CAPACITY TO REPAY THE DEBT

GOOD REPAYING CAPACITY

STOCK TURNOVER RATIO
SALES/ AVG INVENTORY

AMT IN CR 2014 2015

SALES 20 15
AVG INV 3.60 4.20
S.T.R 5.55 3.57

EFFICIENCY OF UTILIZING OF INVENTOTY WENT

DOWN
DEBT SERVICE COVERAGE RATIO
DSCR = { NET PROFIT AFTER TAX + DEP + INT
ON TL } / { INT ON TL + INSTALLMENT ON TL }

201 201
4 5
[1] P.A.T 1.55 1.10 BENCH MARK : 1.5-
[2] DEP 0.50 0.55 1.25
HIGHER THE RATIO
[3] INT ON TL 0.80 0.80 BETTER THE REPAYING
[4] INST ON 0.40 0.40 CAPACITY
TL
(A) [1+2+3] 2.85 2.45
(B) [3+4] 1.20 1.20
DSCR { A/B 2.28 2.04
}
INTEREST COVERAGE RATIO
EARNINGS BEFORE INT, DEP AND TAX / INT
AMOUNT IN 2014 2015
CR
PBT 1.75 1.50
DEP 0.5 0.55
INT 0.8 0.8
PBT +DEP +INT 3.05 2.85
INT COV RATIO 3.81 3.56
BENCHMARK: 1.5
HIGHER THE RATIO GREATER THE INTEREST SERVING
CAPACITY
DEBTORS VELOCITY
RECEIVABLE x {12 or 52 or 365} / AVG MONTHLY
CREDIT SALES

IN LAKHS 2014 2015

Receivables 310 240
Receivables more than 2 yrs. old 15 15
TOTAL 295 225
CREDIT SALES 2000 1500
DEBTORS VELOCITY 54 55
DAYS DAYS
EFFICIENCY OF REALIZING SALES IS ALMOST
REMAINS SAME