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    Financial Anbalysisbpsm

    Uploaded by

    Dinesh Raghavendra
    The document analyzes various financial ratios for Micromax, an electronics company, compared to industry averages for 2012-2009. It examines liquidity ratios like the current ratio, solvency ratios like the debt-to-equity ratio, profitability ratios like return on capital employed, and activity/cash flow ratios like fixed asset and inventory turnover. The conclusions drawn are that Micromax has lower debt levels but higher profitability than competitors, and utilizes assets well to generate sales despite having lower inventory turnover.

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    Financial Anbalysisbpsm

    Uploaded by

    Dinesh Raghavendra
    55 views2 pages
    The document analyzes various financial ratios for Micromax, an electronics company, compared to industry averages for 2012-2009. It examines liquidity ratios like the current ratio, solvency ratios like the debt-to-equity ratio, profitability ratios like return on capital employed, and activity/cash flow ratios like fixed asset and inventory turnover. The conclusions drawn are that Micromax has lower debt levels but higher profitability than competitors, and utilizes assets well to generate sales despite having lower inventory turnover.

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    dgkh

    Original Title

    Financial Anbalysisbpsm (1)

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    The document analyzes various financial ratios for Micromax, an electronics company, compared to industry averages for 2012-2009. It examines liquidity ratios like the current ratio, solvency ratios like the debt-to-equity ratio, profitability ratios like return on capital employed, and activity/cash flow ratios like fixed asset and inventory turnover. The conclusions drawn are that Micromax has lower debt levels but higher profitability than competitors, and utilizes assets well to generate sales despite having lower inventory turnover.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    55 views2 pages

    Financial Anbalysisbpsm

    Uploaded by

    Dinesh Raghavendra
    The document analyzes various financial ratios for Micromax, an electronics company, compared to industry averages for 2012-2009. It examines liquidity ratios like the current ratio, solvency ratios like the debt-to-equity ratio, profitability ratios like return on capital employed, and activity/cash flow ratios like fixed asset and inventory turnover. The conclusions drawn are that Micromax has lower debt levels but higher profitability than competitors, and utilizes assets well to generate sales despite having lower inventory turnover.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Financial Analysis

    Liquidity ratios- Ability to pay cash expenses in the short term as they come due
    Current Ratio 2012 2011 2010 2009
    Micromax 1.77 1.67 1.49 1.47
    Industry 1.83 1.77 1.83 2.3

    Conclusion-

    Solvency ratios- Information about firms financial leverage and ability to meet long term
    obligations

    Debt-Equity Ratio 2012 2011 2010 2009
    Micormax 0.05 0.06 0.02 0.06
    Industry 1.08 0.92 0.89 1.01

    Conclusion- Debt to equity are lower than the competitors which states that it employs less of
    borrowed funds and hence it makes company less prone to solvency risks and interest obligation
    .

    Profitability Ratios- Information about how well the company generates operating and net
    profits from its sales

    ROCE (%)
    micromax 6.72 97.72 238.03 86.1
    industry 0 3.5 7.16 6.1


    Conclusion- Profitability ratio of company is more than its competitors which states that the
    company is doing well and it is good at generating profits, revenues and cash flows.


    Activity Ratios/ Cash Flow Ratio- Information about how well the firm utilizes its assets


    Fixed Assets
    turnover ratio 2012 2011 2010 2009
    micromax 95.3 187.12 157.32 39.13
    Industry 0.94 1.26 1.39 1.59



    Inventory
    turnover ration 2012 2011 2010 2009
    micromax 4.72 11.59 23.63 10.28
    Industry 6.81 8.89 10.51 9.68

    Conclusion- The inventory turnover ratio are very low for Micromax as compared to
    industry which states that the inventory held minimum number of days as a result of which
    the costs gets increased. Even the company is utilising its assets to generate additional sales
    and revenue

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