Final Ratio Analysis
RATIO ANALYSIS
Submitted to:- Fac. Pinakin Jaisval
submitted by :- Sahista Baxi
Abhilasha Kashyap
Nidhi shah
Company profile
Tata Power is a Indian electric utility company based in Mumbai, Maharashtra, India and is part of the Group. The core business of the company is to generate, transmit and distribute electricity.
With an installed electricity generation capacity of about 8560 MW, it is India's second largest private power producer. At the end of August
2013, its market capitalization was $2.74 billion
(INR 182 billion).
Ratio analysis
Ratio Analysis is the process of determining and interpreting numerical relationship based on financial statements. It is the technique of interpretation of financial statements with the help of accounting ratios derived from the balance sheet and profit and loss account.
Types of ratio
There are 5 main heads of ratio under which all the other ratios are defined. They are
• Liquidity ratio
• Activity ratio
• Capital structure ratio
• Flow ratio
• Profitability ratio
Most important ratio
The most important ratio that are generally used in analyzing the financial statements are
•
•
•
•
•
Current ratio (liquidity ratio)
Quick ratio (liquidity ratio)
Debt to equity ratio (capital structure ratio)
Return on equity (profitability ratio)
Net profit margin (profitability ratio )
Liquidity ratio
The liquidity ratios are used to test the short term solvency or liquidity position of the business.
It indicates whether a firm has adequate working capital to carry out routine business activity.
Types of liquidity ratio
• Net working capital ratio
• Current ratio
• Quick ratio
Current ratio
• It is the most widely used of all analytical devices based on balance sheet. It establishes relationship between total current assets and current liabilities.
• Current ratio = current assets /current liability
Calculation
Current assets
2010
2011
2012
2013
2014
Current investments
92.73
584.14
258.56
1.36
Inventories
Submitted to:- Fac. Pinakin Jaisval
submitted by :- Sahista Baxi
Abhilasha Kashyap
Nidhi shah
Company profile
Tata Power is a Indian electric utility company based in Mumbai, Maharashtra, India and is part of the Group. The core business of the company is to generate, transmit and distribute electricity.
With an installed electricity generation capacity of about 8560 MW, it is India's second largest private power producer. At the end of August
2013, its market capitalization was $2.74 billion
(INR 182 billion).
Ratio analysis
Ratio Analysis is the process of determining and interpreting numerical relationship based on financial statements. It is the technique of interpretation of financial statements with the help of accounting ratios derived from the balance sheet and profit and loss account.
Types of ratio
There are 5 main heads of ratio under which all the other ratios are defined. They are
• Liquidity ratio
• Activity ratio
• Capital structure ratio
• Flow ratio
• Profitability ratio
Most important ratio
The most important ratio that are generally used in analyzing the financial statements are
•
•
•
•
•
Current ratio (liquidity ratio)
Quick ratio (liquidity ratio)
Debt to equity ratio (capital structure ratio)
Return on equity (profitability ratio)
Net profit margin (profitability ratio )
Liquidity ratio
The liquidity ratios are used to test the short term solvency or liquidity position of the business.
It indicates whether a firm has adequate working capital to carry out routine business activity.
Types of liquidity ratio
• Net working capital ratio
• Current ratio
• Quick ratio
Current ratio
• It is the most widely used of all analytical devices based on balance sheet. It establishes relationship between total current assets and current liabilities.
• Current ratio = current assets /current liability
Calculation
Current assets
2010
2011
2012
2013
2014
Current investments
92.73
584.14
258.56
1.36
Inventories