Financial Analysis of Dr Reddy

Presented By
Group-1.3
Liquidity Ratios: It gives a picture of a company’s short
term financial situation.
Current Ratio: Current Assets/Current Liabilities
2003 2004
Current Asset 15,174,680 13,286,826
Current Liabilities 3,225,323 4,389,959
CURRENT RATIO 4.7/1 3.02/1

Acid Test or Quick Ratio:

Acid Test or Quick Ratio = (Current Assets - Inventories)/Current
Liabilities
2003 2004
Current Asset-Inventories 15,174,680- 13,286,826-
2,779,673 3,021,939
Current Liabilities 3,225,323 4,389,959
QUICK RATIO 3.84/1 2.33/1
Leverage Ratios: It shows the extent that debt is used in a
company’s capital structure.
Total Debt Ratio: Total Debt/Capital Employed

2003 2004
Total Debt 378,441 686,005
Capital Employed 17,683,889 20,077,731
TOTAL DEBT RATIO 0.02
Debt Equity Ratio: Total Debt / Net Worth

2003 2004
Total Debt 15377828 13216260
Net Worth 2735876 3495255
DEBT EQUITY RATIO 3.78/1 5.65/1
Capital-equity Ratio: Capital employed or net assets/Net
Worth

2003 2004
Net Asset 15377828 13216260
Net Worth 2735876 3495255
CAPITAL EQUITY RATIO 3.78/1 5.65/1

Interest Coverage: (EBIT + Depreciation)/Interest

2003 2004
EBIT+Depriciation 15377828 13216260
Interest 2735876 3495255
INTEREST COVERAGE RATIO 3.78/1 5.65/1
Activity Ratios: It shows how efficient a company is in its
operations & use of assets.
Inventory Turnover Ratio: Cost of Goods Sold/Inventory
2003 2004
COGS 15377828 13216260
Inventory 2735876 3495255
INVENTORY TURNOVER RATIO 3.78/1 5.65/1

No. of Days, Inventory Ratio: 360*Inventory Turnover

2003 2004
365 15377828 13216260
Inventory Turnover 2735876 3495255
No Of Days 3.78/1 5.65/1
Debtors Turnover Ratio: Credit Sales or Sales/Debtors

2003 2004
Sales 15377828 13216260
Debtors 2735876 3495255
DEBTORS TURNOVER RATIO 3.78/1 5.65/1

Collection Period Ratio: 360/Debtors Turnover

2003 2004
365 15377828 13216260
Debtors Turnover 2735876 3495255
Collection Period 3.78/1 5.65/1
Assets Turnover Ratio: Sales/Net Assets or Capital
Employed
2003 2004
Sales 15377828 13216260
Net Asset or capital Employed 2735876 3495255
ASSET TURNOVER RATIO 3.78/1 5.65/1

Working Capital Turnover Ratio: Sales/Net Working

Capital
2003 2004
Sales 15377828 13216260
Net Working Capital 2735876 3495255
WORKING CAPITAL TURNOVER 3.78/1 5.65/1
RATIO
Fixed Asset Turnover Ratio: Net Sales /Fixed Assets
2003 2004
Net Sales 15377828 13216260
Fixed Asset 2735876 3495255
FIXED ASSET TURNOVER RATIO 3.78/1 5.65/1

Current Asset Turnover Ratio: Net Sales / Current

Assets 2003 2004
Net Sales 15377828 13216260
Current Assets 2735876 3495255
CURRENT ASSET TURNOVER 3.78/1 5.65/1

Creditors Turnover Ratio: (Creditors/Purchase)/360

2004: 2003 2004
Creditors/Purchase 15377828 13216260
2003:
365 2735876 3495255
CREDITORS TURNOVER RATIO 3.78/1 5.65/1
Profitability Ratios:
Gross margin: Gross Profit/Sales
2003 2004
Gross Profit 15377828 13216260
Sales 2735876 3495255
GROSS MARGIN 3.78/1 5.65/1

Net margin: PAT/sales

2003 2004
PAT 15377828 13216260
Sales 2735876 3495255
NET MARGIN 3.78/1 5.65/1
Return on Capital Employed: EBIT/Net Assets or
Capital Employed

2003 2004
EBIT 15377828 13216260
Net Assets 2735876 3495255
RETURN ON CAPITAL EMPLOYED 3.78/1 5.65/1
Composite Ratios:
Return on Equity: PAT/Net worth
2003 2004
PAT 15377828 13216260
Net Worth 2735876 3495255
Return on Equity 3.78/1 5.65/1

Earning Per Share: PAT/No. of Shares

2003 2004
PAT 15377828 13216260
Number of Shares 2735876 3495255
Earning P 3.78/1 5.65/1
 2003 2004
PAT 15377828 13216260
Net Worth 2735876 3495255
Return on Equity 3.78/1 5.65/1
Conclusion: