A STUDY ON PERFORMANCE OF RATIO ANALYSIS AT AGILITY LOGISTICS PRIVATE LIMITED

CHAPTER 1 INDUSTRY PROFILE

INDUSTRY PROFILIE
AGILITY LOGISTICS BUSINESS WITH INTEGRETY
Agilitys uncompromising commitment to integrity, fairness and accountability is reinforced at all levels of the organization by setting high standards in our Code of Business Ethics & Conduct, that emphasize the Agility values of integrity, personal ownership, teamwork and excellence. Maintaining a strong ethics and compliance management structure that reports to the highest levels of the company Ensuring Agility employees receive comprehensive ethics training, couraging and empowering employees to identify and report ethical concerns through systems that include an alert line available to any employee wishing to provide anonymous input.

AGILITYS STANDARDS OF BUSINESS CONDUCT

Agilitys formal Code of Business Ethics & Conduct is an important part of our comprehensive compliance program. It details Agilitys commitment to employees, shareholders and the local communities. It sets forth standards of behavior and expectations regarding adherence to doing what is right and observing regulations and laws. This list provides a quick reference to some of the topics covered in the Code: Competition and Unfair Selling Practices  Bribes, Gifts, Conflicts of Interest  Recordkeeping and Reporting  Employee Rights and Working Conditions  Health, Safety and Environmental Protection


ETHICS TRAINING
Agility invests in growing its ethics training program designed to provide every employee with access to courses appropriate to their work. Training in ethics and compliance is delivered online and in

classroom sessions. The core Code of Ethics program is required of all employees from the executive suite to the warehouse. Agilitys ethics courses concentrate on real-world situations. As Agility is also a US government contractor, there is also a special focus on the laws and regulations that apply to U.S.

REPORTING VIOLATION
Agilitys reputation for integrity is an asset that every employee takes pride in. Agility encourages employees to report possible violations of our Code of Business Ethics and Conduct and offers several ways for employees to elevate their concerns:
 By notifying their supervisor or manager if they are comfortable

doing so  By sending an email to the personal mailbox of any member of the Ethics team or to ethics@agilitylogistics.com  By entering a report on our secure website from our employee intranet  By calling the Agility Alert Line, a toll-free number that enables employees in 35 or our operating countries to make anonymous reports through multi-lingual third-party operators. The U.S. number is answered 24/7 in more than 10 languages Any employee who submits a report in good faith will be protected from retaliation. Incidents reported are reviewed and, when appropriate, investigated by Ethics and Compliance team. Agility brings a new spirit of enterprise, flexibility and personal service to the delivery of logistics solutions for our customers. We understand emerging markets their needs and unique challenges. As a result, we have developed powerful and unique capabilities.

MARKET SCENARIO: THE EMERGING MARKETS LOGISTICS INDEX

Agility and Transport Intelligence have developed an exclusive and unique new index comparing the world's major developing markets on a number of different metrics. The index identifies the key

attributes which will make the market an attractive investment proposition from the point of view of logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution property companies. Tight shipment schedules and multiple venue stops are common logistics headaches facing trade fair organizers, show promoters and exhibitors. Agilitys Specialty Fairs & Events experts understand these challenges. In fact, our experts have a proven track record for solving time sensitive challenges. We deploy dedicated resources to each event including state-of-the-art global exhibition management and tracking systems, along with access to specialized handling and transportation capabilities all in order to offer Agility customers a true one-stop door to door solution. Agilitys experts are positioned on-site at major locations and have access to storage and warehouse facilities to deliver true personalized service. We coordinate every aspect of shipments, including delivery from countries of origin to exhibition sites, handling exhibition goods on-site, and returning shipments to their originating locations upon show closings. In addition to personalized solutions, we offer tailor-made service packages for Exhibitions, Events, Standbuilders, and Fine Arts. We also offer the finest in Venue Logistics and Relocation Services. Agilitys award winning services and well-earned reputation as a premier, world-class exhibition forwarding specialist is affirmed by our yearly official appointments for major trade fairs, exhibitions and events around the world.

SOCIAL RESPONSIBILITY
As a player in the world marketplace Agility recognizes that our global presence in business demands a global commitment to social responsibility. Agility today deploys its logistics expertise, global network and multicultural workforce to:
 

provide humanitarian disaster relief support employee-led community programs and

improve sustainability of our own and customers operations

The company has made a long-term commitment to addressing these priorities, working with customers, suppliers, employees, humanitarian partners and even competitors to improve our world.

COMPETITION ANALYSIS: AGILITY'S COPETITION COMPLIANCE POLICY

Agility is a leading emerging market multinational with more than 32,000 employees and over 550 offices in 100 countries around the world. The international and complex nature of our business makes it particularly crucial that the conduct of all employees be above reproach. Integrity is one of our core values, and lawful and ethical business practice is an essential element in all of our business relationships and dealings. We are firmly convinced of the benefits to our company of a fully competitive marketplace, and we are committed to full compliance with all applicable competition laws. In June 2006 we issued a mandatory Code of Business Ethics and Conduct and established a comprehensive corporate compliance program. Although the Code does not address every conceivable kind of business practice and behavior, it is intended to clearly communicate, at a minimum, what is expected of Agility employees. This policy booklet complements the Code's review of competition compliance and is intended to help you understand: What the competition rules mean for us; why it is essential to comply with them; and How to comply with them in practice.

CHAPTER 2 COMPANY PROFILE

COMPANY PROFILE
AGILITY LOGISTICS PRIVATE LIMITED
Agility was established in Kuwait in 1979.The company pursued an aggressive merger strategy from 2004-2008, acquiring many global brands, some with a history dating back to the 1800s. All acquired firms were unified into a seamless global network under the agility brand name in 2006. Agility is one of the worlds leading provides of integrated logistics with more than 25,000 employees. In 2006, the company unified its services under the new name of agility. In 2009, agility was also named to the Boston consulting groups list of global challengers from emerging markets. As of 2009, agility has more than 32,000 employees worldwide and annual revenues of close to $ 6 billion over 550 offices and 100 countries. VISION To be a new type of logistics leader meeting the challeges of global trade. MISSION To facilitate trade through innovative supply chain solutions. VALUES Integrity, personal ownership, teamwork and excellence. AGILITY CORE STRENGTHS Agility concentrate on its capabilities on areas that are critical to modern supply chains.
 Expertise in emerging markets  Deep knowledge of local markets and culture  Far reaching

 Logistics capabilities for warehousing and distribution

worldwide  Services for speciality industries such as project logistics, chemicals, fairs and events and fuel

EVALUTION AND GROWTH: A NEW LOGISTICS LEADER Agility is a global logistics leader with two main lines of business: commercial logistics and a portfolio of logistics-related businesses. GLOBAL INTEGRATED LOGISTICS Three interlocking areas -- Freight Forwarding, Logistics Solutions and Specialty Businesses form Global Integrated Logistics (GIL), Agility's commercial business, headquartered in Switzerland. Agility GIL provides supply chain solutions to meet complex and standard customer needs. From well-travelled trade lanes to remote environments, our worldwide network brings substantial leverage to your organization in the form of local points of contact, service delivery and cost savings. AWARDS & ACHIEVEMENT Agility, a leading global logistics provider, has been honored with the Logistics Company of the Year award by Arabian Business, a well respected business publication in the region. The award was presented to Agility during the recent Arabian Business Achievement Award ceremony in Kuwait and honors Agilitys success and position as the leading logistics provider in Kuwait. The Arabian Business Awards celebrate the very best in business achievement, both on a corporate and individual level. As the leading logistics provider in Kuwait, Agility was presented the award based on its wide range of solutions and extensive assets, as well as consistently high levels of quality service. The award follows Agilitys

recognition with the Special Corporate Social Responsibility award at last years ceremony. Agility Fairs & Events Malaysia picked up the prestigious International Exhibition Logistics Associates (IELA) Best Onsite Agent Award at the IELA Congress 2007 held recently in Santiago, Chile. The companys Thailand and Singapore offices came second and third respectively. Agility Fairs & Events Singapore also won the third place in the Best Export Agent category.

PARTNERS Agility, the leading global providers of integrated supply chain solutions has chosen Rasmussen & Simonsen International (RSI) as a key partner of its in-house Logistics University. RSI is a specialized training company for the international transportation and logistics industry. The partnership between Agility and RSI is based on the common belief that training and development is a key success factor in the global logistics industry. Both organizations work towards building on logistics talents by enhancing skills and knowledge as well as ensuring opportunities for practical application based training as a part of the Universitys curriculum.

CHAPTER -3 FUNCTIONAL DEPORTMENTS

PERFORMANCE ANALYSIS
Performance analysis is an analysis of a companys past and current financial performance and compares such performance to similar sized companies within its industry providing insight into a companys historical growth, profitability, debt capacity and overall liquidity. All such factors can be important indicators of a companys ultimate value. We analyse the past five-year history of financial statements as well as financial information relative to your industry. We calculate the financial ratios ( liquidity, coverage, leverage and operating ) for the company, prepare common size financial statements and analyse the information on a trended and composite basis. A financial performance analysis may provide the following benefits.


Identify financial strengths and weaknesses and evaluate financial performance in relation to the industry performance as a whole and acquire useful information concerning competitors. Historical financial ratio analysis can be used as an effective preliminary in preparing a budget or in making a forecast.  Evaluate past performance and set objectives for future performance. Also provides an ongoing means to evaluate a companys performance financially.  Financial statements help interpret a particular companys performance. Ratio analysis helps compare financial performance among different companies. Additionally looking at how ratios have changed over time can help reveal if a company is headed in the right direction and can enable you to spot trends. In some cases, ratio analysis can predict future bankruptcy.

RATIO ANALYSIS
Meaning of Ratio:- A ratio is simple arithmetical expression of the relationship of one number to another. It may be defined as the indicated quotient of two mathematical expressions. According to Accountants Handbook by Wixon, Kell and Bedford, a ratio is an expression of the quantitative relationship between two numbers. Ratio Analysis:- Ratio analysis is the process of determining and presenting the relationship of items and group of items in the statements. According to Batty J. Management Accounting Ratio can assist management in its basic functions of forecasting, planning coordination, control and communication. It is helpful to know about the liquidity, solvency, capital structure and profitability of an organization. It is helpful tool to aid in applying judgement, otherwise complex situations. Ratio analysis can represent following three methods. Ratio may be expressed in the following three ways : 1. Pure Ratio or Simple Ratio :- It is expressed by the simple division of one number by another. 2. Rate or So Many Times :- In this type , it is calculated how many times a figure is, in comparison to another figure. 3. Percentage :- In this type, the relation between two figures is expressed in hundredth. ADVANTAGE OF RATIO ANALYSIS 1. Helpful in analysis of Financial Statements.

2. Helpful in comparative Study.

3. Helpful in locating the weak spots of the business. 4. Helpful in Forecasting. 5. Estimate about the trend of the business. 6. Fixation of ideal Standards. 7. Effective Control. 8. Study of Financial Soundness. LIMITATIONS OF RATIO ANALYSIS Comparison not possible if different firms adopt different accounting policies.  Ratio analysis becomes less effective due to price level changes.  Ratio may be misleading in the absence of absolute data.  Limited use of a single data.  Lack of proper standards.  False accounting data gives false ratio.  Ratios alone are not adequate for proper conclusions.  Effect of personal ability and bias of the analyst.


CLASSIFICATION OF RATIO Ratio may be classified into the four categories as follows: A. Liquidity Ratio a. b. B. Current Ratio Quick Ratio or Acid Test Ratio

Solvency ratio a. b. Debt Equity Ratio Debt to Total Fund Ratio

c. d. e. f. C.

Proprietary Ratio Fixed Assets to Proprietors Fund Ratio Capital Gearing Ratio Interest Coverage Ratio

Activity Ratio or Turnover Ratio a. b. c. d. e. f. g. Stock Turnover Ratio Debtors or Receivables Turnover Ratio Average Collection Period Creditors or Payables Turnover Ratio Average Payment Period Fixed Assets Turnover Ratio Working Capital Turnover Ratio

D.

Profitability Ratio or Income Ratio

(A) Profitability Ratio based on Sales : a. Gross Profit Ratio b. Net Profit Ratio c. Operating Ratio d. Expenses Ratio e. Operating profit Ratio (B) Profitability Ratio Based on Investment : I. II. Return on Capital Employed Return on Shareholders Funds :

a. b. c. d. e. f. g.

Return on Total Shareholders Funds Return on Equity Shareholders Funds Earning Per Share Dividend Per Share Dividend Payout Ratio Earning and Dividend Yield Price Earning Ratio

LIQUIDITY RATIO (A) Liquidity Ratio:- It refers to the ability of the firm to meet its current liabilities. The liquidity ratio, therefore, are also called Shortterm Solvency Ratio. These ratio are used to assess the short-term financial position of the concern. They indicate the firms ability to meet its current obligation out of current resources. In the words of Saloman J. Flink, Liquidity is the ability of the firms to meet its current obligations as they fall due. Liquidity ratio include two ratio :a. b. Current Ratio Quick Ratio or Acid Test Ratio

a. Current Ratio:- This ratio explains the relationship between current assets and current liabilities of a business. Formula: Current Ratio = Current Liabilities Current Assets/

Current Assets:-Current assets includes those assets which can be converted into cash with in a years time. Current Assets = Cash in Hand + Cash at Bank + B/R + Short Term Investment + Debtors(Debtors Provision) + Stock(Stock of Finished Goods + Stock of Raw Material + Work in Progress) + Prepaid Expenses. Current Liabilities :- Current liabilities include those liabilities which are repayable in a years time. Current Liabilities = Bank Overdraft + B/P + Creditors + Provision for Taxation + Proposed Dividend + Unclaimed Dividends + Outstanding Expenses + Loans Payable with in a Year. Significance :- According to accounting principles, a current ratio of 2:1 is supposed to be an ideal ratio. It means that current assets of a business should, at least , be twice of its current liabilities. The higher ratio indicates the better liquidity position, the firm will be able to pay its current liabilities more easily. If the ratio is less than 2:1, it indicate lack of liquidity and shortage of working capital. The biggest drawback of the current ratio is that it is susceptible to window dressing. This ratio can be improved by an equal decrease in both current assets and current liabilities. b. Quick Ratio:- Quick ratio indicates whether the firm is in a position to pay its current liabilities with in a month or immediately. Formula: Quick Ratio = Liquid Assets/ Current Liabilities Liquid Assets means those assets, which will yield cash very shortly. Liquid Assets = Current Assets Stock Prepaid Expenses

Significance :- An ideal quick ratio is said to be 1:1. If it is more, it is considered to be better. This ratio is a better test of short-term financial position of the company. SOLVENCY RATIO

(B) Solvency ratio :- This ratio disclose the firms ability to meet the interest costs regularly and Long term indebtedness at maturity. These ratio include the following ratios : a. Debt Equity Ratio:- This ratio can be expressed in two ways: First Approach : According to this approach, this ratio expresses the relationship between long term debts and shareholders fund.

Formula: Debt Equity Ratio=Long term Loans/Shareholders Funds or Net Worth Long Term Loans:- These refer to long term liabilities which mature after one year. These include Debentures, Mortgage Loan, Bank Loan, Loan from Financial institutions and Public Deposits etc. Shareholders Funds :- These include Equity Share Capital, Preference Share Capital, Share Premium, General Reserve, Capital Reserve, Other Reserve and Credit Balance of Profit & Loss Account. Second Approach : According to this approach the ratio is calculated as follows:Formula: Debt Equity Ratio=External Equities/internal Equities

Debt equity ratio is calculated for using second approach. Significance :- This Ratio is calculated to assess the ability of the firm to meet its long term liabilities. Generally, debt equity ratio of is considered safe. If the debt equity ratio is more than that, it shows a rather risky financial position from the long-term point of view, as it indicates that more and more funds invested in the business are provided by longterm lenders. The lower this ratio, the better it is for long-term lenders because they are more secure in that case. Lower than 2:1 debt equity ratio provides sufficient protection to long-term lenders.

b. Debt to Total Funds Ratio : This Ratio is a variation of the debt equity ratio and gives the same indication as the debt equity ratio. In the ratio, debt is expressed in relation to total funds, i.e., both equity and debt. Formula: Debt to Total Funds Ratio = Long-term Loans/Shareholders funds + Long-term Loans Significance :- Generally, debt to total funds ratio of 0.67:1 (or 67%) is considered satisfactory. In other words, the proportion of long term loans should not be more than 67% of total funds. A higher ratio indicates a burden of payment of large amount of interest charges periodically and the repayment of large amount of loans at maturity. Payment of interest may become difficult if profit is reduced. Hence, good concerns keep the debt to total funds ratio below 67%. The lower ratio is better from the long-term solvency point of view.

c. Proprietary Ratio:- This ratio indicates the proportion of total funds provide by owners or shareholders. Formula: Proprietary Ratio = Shareholders Funds/Shareholders Funds + Long term loans Significance :- This ratio should be 33% or more than that. In other words, the proportion of shareholders funds to total funds should be 33% or more. A higher proprietary ratio is generally treated an indicator of sound financial position from long-term point of view, because it means that the firm is less dependent on external sources of finance. If the ratio is low it indicates that long-term loans are less secured and they face the risk of losing their money. d. Fixed Assets to Proprietors Fund Ratio :- This ratio is also know as fixed assets to net worth ratio. Formula: Fixed Asset to Proprietors Fund Ratio = Fixed Assets/Proprietors Funds (i.e., Net Worth) Significance :- The ratio indicates the extent to which proprietors (Shareholders) funds are sunk into fixed assets. Normally , the purchase of fixed assets should be financed by proprietors funds. If this ratio is less than 100%, it would mean that proprietors fund are more than fixed assets and a part of working capital is provided by the proprietors. This will indicate the long-term financial soundness of business. e. Capital Gearing Ratio:- This ratio establishes a relationship between equity capital (including all reserves and undistributed profits) and fixed cost bearing capital.

Formula: Capital Gearing Ratio = Equity Share Capital+ Reserves + P&L Balance/ Fixed cost Bearing Capital

Whereas, Fixed Cost Bearing Capital = Preference Share Capital + Debentures + Long Term Loan Significance:- If the amount of fixed cost bearing capital is more than the equity share capital including reserves an undistributed profits), it will be called high capital gearing and if it is less, it will be called low capital gearing. The high gearing will be beneficial to equity shareholders when the rate of interest/dividend payable on fixed cost bearing capital is lower than the rate of return on investment in business. Thus, the main objective of using fixed cost bearing capital is to maximize the profits available to equity shareholders. f. Interest Coverage Ratio:- This ratio is also termed as Debt Service Ratio. This ratio is calculated as follows: Formula: Interest Coverage Ratio = Net Profit before charging interest and tax / Fixed Interest Charges Significance :- This ratio indicates how many times the interest charges are covered by the profits available to pay interest charges. This ratio measures the margin of safety for long-term lenders. This higher the ratio, more secure the lenders is in respect of payment of interest regularly. If profit just equals interest, it is an

unsafe position for the lender as well as for the company also , as nothing will be left for shareholders. An interest coverage ratio of 6 or 7 times is considered appropriate.

ACTIVITY RATIO OR TURNOVER RATIO (C) Activity Ratio or Turnover Ratio :- These ratio are calculated on the bases of cost of sales or sales, therefore, these ratio are also called as Turnover Ratio. Turnover indicates the speed or number of times the capital employed has been rotated in the process of doing business. Higher turnover ratio indicates the better use of capital or resources and in turn lead to higher profitability. It includes the following : a. Stock Turnover Ratio:- This ratio indicates the relationship between the cost of goods during the year and average stock kept during that year. Formula: Stock Turnover Ratio = Cost of Goods Sold / Average Stock Here, Cost of goods sold = Net Sales Gross Profit Average Stock = Opening Stock + Closing Stock/2 Significance:- This ratio indicates whether stock has been used or not. It shows the speed with which the stock is rotated into sales or the number of times the stock is turned into sales during the year. The higher the ratio, the better it is, since it indicates that stock is selling quickly. In a business where stock turnover ratio is high,

goods can be sold at a low margin of profit and even than the profitability may be quit high.
b. Debtors Turnover Ratio :- This ratio indicates the

relationship between credit sales and average debtors during the year :

Formula: Debtor Turnover Ratio = Net Credit Sales / Average Debtors + Average B/R While calculating this ratio, provision for bad and doubtful debts is not deducted from the debtors, so that it may not give a false impression that debtors are collected quickly. Significance :- This ratio indicates the speed with which the amount is collected from debtors. The higher the ratio, the better it is, since it indicates that amount from debtors is being collected more quickly. The more quickly the debtors pay, the less the risk from bad- debts, and so the lower the expenses of collection and increase in the liquidity of the firm. By comparing the debtors turnover ratio of the current year with the previous year, it may be assessed whether the sales policy of the management is efficient or not. c. Average Collection Period :- This ratio indicates the time with in which the amount is collected from debtors and bills receivables. Formula:

Average Collection Period = Debtors + Bills Receivable / Credit Sales per day Here, Credit Sales per day = Net Credit Sales of the year / 365 Second Formula :Average Collection Period = Average Debtors *365 / Net Credit Sales

Average collection period can also be calculated on the bases of Debtors Turnover Ratio. The formula will be: Average Collection Period = 12 months or 365 days / Debtors Turnover Ratio Significance :- This ratio shows the time in which the customers are paying for credit sales. A higher debt collection period is thus, an indicates of the inefficiency and negligency on the part of management. On the other hand, if there is decrease in debt collection period, it indicates prompt payment by debtors which reduces the chance of bad debts. d. Creditors Turnover Ratio :- This ratio indicates the relationship between credit purchases and average creditors during the year . Formula:Creditors Turnover Ratio = Net credit Purchases / Average Creditors + Average B/P Note :- If the amount of credit purchase is not given in the question, the ratio may be calculated on the bases of total purchase.

Significance :- This ratio indicates the speed with which the amount is being paid to creditors. The higher the ratio, the better it is, since it will indicate that the creditors are being paid more quickly which increases the credit worthiness of the firm.
c. Average Payment Period :- This ratio indicates the period

which is normally taken by the firm to make payment to its creditors.

Formula:Average Payment Period = Creditors + B/P/ Credit Purchase per day This ratio may also be calculated as follows : Average Payment Period = 12 months or 365 days / Creditors Turnover Ratio Significance :- The lower the ratio, the better it is, because a shorter payment period implies that the creditors are being paid rapidly. d. Fixed Assets Turnover Ratio :- This ratio reveals how efficiently the fixed assets are being utilized. Formula:Fixed Assets Turnover Ratio = Cost of Goods Sold/ Net Fixed Assets

Here, Net Fixed Assets = Fixed Assets Depreciation

Significance:- This ratio is particular importance in manufacturing concerns where the investment in fixed asset is quit high. Compared with the previous year, if there is increase in this ratio, it will indicate that there is better utilization of fixed assets. If there is a fall in this ratio, it will show that fixed assets have not been used as efficiently, as they had been used in the previous year. e. Working Capital Turnover Ratio :- This ratio reveals how efficiently working capital has been utilized in making sales. Formula :Working Capital Turnover Ratio = Cost of Goods Sold / Working Capital Here, Cost of Goods Sold = Opening Stock + Purchases + Carriage + Wages + Other Direct Expenses - Closing Stock Working Capital = Current Assets Current Liabilities Significance :- This ratio is of particular importance in nonmanufacturing concerns where current assets play a major role in generating sales. It shows the number of times working capital has been rotated in producing sales. A high working capital turnover ratio shows efficient use of working capital and quick turnover of current assets like stock and debtors. A low working capital turnover ratio indicates under-utilisation of working capital. Profitability Ratios or Income Ratios (D) Profitability Ratios or Income Ratios:- The main object of every business concern is to earn profits. A business must be able to earn adequate profits in relation to the risk and capital invested in it. The efficiency and the success of a business can be measured with the help of profitability ratio.

Profitability ratios are calculated to provide answers to the following questions: i. ii. sales? iii. firm? Is the firm earning adequate profits? What is the rate of gross profit and net profit on What is the rate of return on capital employed in the

iv. What is the rate of return on proprietors (shareholders) funds?

v.

What is the earning per share?

Profitability ratio can be determined on the basis of either sales or investment into business. (A) Profitability Ratio Based on Sales :

a) Gross Profit Ratio : This ratio shows the relationship between gross profit and sales. Formula : Gross Profit Ratio = Gross Profit / Net Sales *100 Here, Net Sales = Sales Sales Return Significance:- This ratio measures the margin of profit available on sales. The higher the gross profit ratio, the better it is. No ideal standard is fixed for this ratio, but the gross profit ratio should be adequate enough not only to cover the operating expenses but also to provide for deprecation, interest on loans, dividends and creation of reserves. b) Net Profit Ratio:- This ratio shows the relationship between net profit and sales. It may be calculated by two methods:

Formula: Net Profit Ratio = Net Profit / Net sales *100 Operating Net Profit = Operating Net Profit / Net Sales *100

Here, Operating Net Profit = Gross Profit Operating Expenses such as Office and Administrative Expenses, Selling and Distribution Expenses, Discount, Bad Debts, Interest on short-term debts etc.

Significance :- This ratio measures the rate of net profit earned on sales. It helps in determining the overall efficiency of the business operations. An increase in the ratio over the previous year shows improvement in the overall efficiency and profitability of the business. (c) Operating Ratio:- This ratio measures the proportion of an enterprise cost of sales and operating expenses in comparison to its sales. Formula: Operating Ratio = Cost of Goods Sold + Operating Expenses/ Net Sales *100 Where, Cost of Goods Sold = Opening Stock + Purchases + Carriage + Wages + Other Direct Expenses - Closing Stock Operating Expenses = Office and Administration Exp. + Selling and Distribution Exp. + Discount + Bad Debts + Interest on Short- term loans. Operating Ratio and Operating Net Profit Ratio are inter-related. Total of both these ratios will be 100. Significance:- Operating Ratio is a measurement of the efficiency and profitability of the business enterprise. The ratio indicates the extent

of sales that is absorbed by the cost of goods sold and operating expenses. Lower the operating ratio is better, because it will leave higher margin of profit on sales. (d) Expenses Ratio:- These ratio indicate the relationship between expenses and sales. Although the operating ratio reveals the ratio of total operating expenses in relation to sales but some of the expenses include in operating ratio may be increasing while some may be decreasing. Hence, specific expenses ratio are computed by dividing each type of expense with the net sales to analyse the causes of variation in each type of expense. The ratio may be calculated as :

(a) Material Consumed Ratio = Material Consumed/Net Sales*100 (b) Direct Labour cost Ratio = Direct labour cost / Net sales*100 (c) Factory Expenses Ratio = Factory Expenses / Net Sales *100 (a), (b) and (c) mentioned above will be jointly called cost of goods sold ratio. It may be calculated as: Cost of Goods Sold Ratio = Cost of Goods Sold / Net Sales*100 (d) Office and Administrative Expenses Ratio = Office and Administrative Exp./ Net Sales*100 (e) Selling Expenses Ratio = Selling Expenses / Net Sales *100 (f) Non- Operating Expenses Ratio = Non-Operating Exp./Net sales*100 Significance:- Various expenses ratio when compared with the same ratios of the previous year give a very important indication whether

these expenses in relation to sales are increasing, decreasing or remain stationary. If the expenses ratio is lower, the profitability will be greater and if the expenses ratio is higher, the profitability will be lower. (B) Profitability Ratio Based on Investment in the Business:These ratio reflect the true capacity of the resources employed in the enterprise. Sometimes the profitability ratio based on sales are high whereas profitability ratio based on investment are low. Since the capital is employed to earn profit, these ratios are the real measure of the success of the business and managerial efficiency.

These ratio may be calculated into two categories: I. Return on Capital Employed II. Return on Shareholders funds I. Return on Capital Employed :- This ratio reflects the overall profitability of the business. It is calculated by comparing the profit earned and the capital employed to earn it. This ratio is usually in percentage and is also known as Rate of Return or Yield on Capital. Formula: Return on Capital Employed = Profit before interest, tax and dividends/ Capital Employed *100

Where, Capital Employed = Equity Share Capital + Preference Share Capital + All Reserves + P&L Balance +Long-Term LoansFictitious Assets (Such as Preliminary Expenses OR etc.) NonOperating Assets like Investment made outside the business.

Capital Employed = Fixed Assets + Working Capital Advantages of Return on Capital Employed:Since profit is the overall objective of a business enterprise, this ratio is a barometer of the overall performance of the enterprise. It measures how efficiently the capital employed in the business is being used. Even the performance of two dissimilar firms may be compared with the help of this ratio.

The ratio can be used to judge the borrowing policy of the enterprise. This ratio helps in taking decisions regarding capital investment in new projects. The new projects will be commenced only if the rate of return on capital employed in such projects is expected to be more than the rate of borrowing. This ratio helps in affecting the necessary changes in the financial policies of the firm. Lenders like bankers and financial institution will be determine whether the enterprise is viable for giving credit or extending loans or not. With the help of this ratio, shareholders can also find out whether they will receive regular and higher dividend or not. II. Return on Shareholders Funds :Return on Capital Employed Shows the overall profitability of the funds supplied by long term lenders and shareholders taken together. Whereas, Return on shareholders funds measures only the profitability of the funds invested by shareholders. These are several measures to calculate the return on shareholders funds:

(a) Return on total Shareholders Funds :For calculating this ratio Net Profit after Interest and Tax is divided by total shareholders funds. Formula: Return on Total Shareholders Funds = Net Profit after Interest and Tax / Total Shareholders Funds

Where, Total Shareholders Funds = Equity Share Capital + Preference Share Capital + All Reserves + P&L A/c Balance Fictitious Assets Significance:- This ratio reveals how profitably the proprietors funds have been utilized by the firm. A comparison of this ratio with that of similar firms will throw light on the relative profitability and strength of the firm. (b) Return on Equity Shareholders Funds:Equity Shareholders of a company are more interested in knowing the earning capacity of their funds in the business. As such, this ratio measures the profitability of the funds belonging to the equity shareholders. Formula: Return on Equity Shareholders Funds = Net Profit (after int., tax & preference dividend) / Equity Shareholders Funds *100 Where, Equity Shareholders Funds = Equity Share Capital + All Reserves + P&L A/c Balance Fictitious Assets Significance:- This ratio measures how efficiently the equity shareholders funds are being used in the business. It is a true

measure of the efficiency of the management since it shows what the earning capacity of the equity shareholders funds. If the ratio is high, it is better, because in such a case equity shareholders may be given a higher dividend.

(c) Earning Per Share (E.P.S.) :- This ratio measure the profit available to the equity shareholders on a per share basis. All profit left after payment of tax and preference dividend are available to equity shareholders. Formula: Earning Per Share = Net Profit Dividend on Preference Shares / No. of Equity Shares Significance:- This ratio helpful in the determining of the market price of the equity share of the company. The ratio is also helpful in estimating the capacity of the company to declare dividends on equity shares. (d) Dividend Per Share (D.P.S.):- Profits remaining after payment of tax and preference dividend are available to equity shareholders. But these are not distributed among them as dividend . Out of these profits is retained in the business and the remaining is distributed among equity shareholders as dividend. D.P.S. is the dividend distributed to equity shareholders divided by the number of equity shares. Formula: D.P.S. = Dividend paid to Equity Shareholders / No. of Equity Shares *100

(e) Dividend Payout Ratio or D.P. :- It measures the relationship between the earning available to equity shareholders and the dividend distributed among them. Formula: D.P. = Dividend paid to Equity Shareholders/ Total Net Profit belonging to Equity Shareholders*100

(f) Earning and Dividend Yield :- This ratio is closely related to E.P.S. and D.P.S. While the E.P.S. and D.P.S. are calculated on the basis of the book value of shares, this ratio is calculated on the basis of the market value of share (g) Price Earning (P.E.) Ratio:- Price earning ratio is the ratio between market price per equity share & earnings per share. The ratio is calculated to make an estimate of appreciation in the value of a share of a company & is widely used by investors to decide whether or not to buy shares in a particular company. Significance :- This ratio shows how much is to be invested in the market in this companys shares to get each rupee of earning on its shares. This ratio is used to measure whether the market price of a share is high or low.

CHAPTER 4 PRODUCT AND SERVICE PROFILE

PRODUCT AND SEVICE PROFILE OF AGILITY

Agility in emerging markets brings efficiency to supply chains in some of the world's most challenging environments, offering unmatched personal service, a global footprint and customized capabilities in developed countries and emerging economies. Agility is one of the worlds leading providers of integrated logistics with more than 22,000 employees in over 550 offices and 100 countries.

AGILITYS CUSTOMER PROMISE OF PERSONAL SERVICE

Agility employees around the world to tackle todays uncertainties with the confidence that stems from their deep knowledge of local markets and their logistics expertise. Unmatched personal service sets us apart. Each one at Agility assumes a high degree of personal responsibility for the job; and they will not rest until that job is done to customers satisfaction. They anticipate instead of react, and they follow through. Behind every contract, supply chain solution, phone call and shipment is a personal relationship with the customer. Whether they are managing their supply chain or offering a specialized service, ability to listen and learn before taking action is what makes their employees partners and their solutions more effective.

AIR FREIGHT EASE

Air freight ease specalists on daily priorities for time, space, frequency and cost, are Agilitys brand of Personal Service. They listen,learn form a close partnership with you to identify your needs and understand your goals. Our standard Air Freight products and their customizable options bring added flexibility to your supply chain. Whether were taking extra measures for your sensitive cargo or giving you added supply chain visibility through our online tracking tools,

Agility Air Freight experts are looking to build your trust as they look after your cargo.

SEA FREIGHT EASE

When you have Sea Freight professionals matching frequent sailings and flexible service options to your specific business objectives, you have Agilitys brand of Personal Service. Our freight management experts partner with you to learn your business firsthand. Equipped with an intimate understanding of your supply chain requirements, we pull from a range of standard Sea Freight products and supplementary options to secure the space allocation, timing, frequency and rates that fit your precise objectives. Whether we need to reserve an oversize container or securely transport your high-value cargo, Agility Sea Freight specialists treat each shipment with the care and attention it takes to earn your trust.

ROAD FREIGHT EASE

When you have a trusted Road Freight partner who knows as much about your business goals as transportation issues in your region, you have Agilitys brand of Personal Service. Through clear communication, thoughtful collaboration and dedicated followthrough, our Road Freight management teams seek to understand your objectives and create solutions that deliver. We combine simple, standardized Road Freight products with a host of customizable options to achieve the ideal balance of lead-time, capacity, frequency and cost. Whether it means providing same day delivery or hauling hazardous cargo, Agilitys freight specialists know the key to a successful supply chain is a committed relationship with our customer.

WAREHOUSING AND DISTRIBUTION

Agilitys logistics experts combine warehousing and distribution, advanced systems and technology, as well as Value Added Services to customize your supply chain to meet your precise goals and requirements. Our dedicated teams select and apply the exact resources you need to improve your businesss performance and provide flexibility for a dynamic marketplace.

SCALABLE WAREHOUSING AND DISTRIBUTION

As the heart and driving force of our successful supply chain solutions, Agilitys warehousing and distribution capabilities include full-service management. Backed by Road, Air, Sea and Sea/Air freight forwarding products, advanced technology and strategic facilities, our experts have the resources to put their plans into action. From consulting to overseeing delivery, Agility does not rest until your products reach your customers hands. Agilitys scope of management encompasses:

FACILITY MANAGEMENT
Our facilities are strategically located for ease of reach and equipment access. With flexibility in facility size and type, we are able to select an existing site or set up what you need for optimal proximity.

INVENTORY MANAGEMENT
We manage end-to-end inventory planning and replenishment tailored to your requirements. Taking complete responsibility for your inventory, we find the efficiencies that eliminates unnecessary stock holding and subsequently decreases logistics cost.

MATERIAL MANAGEMENT
From the acquisition of spare parts and replacements to purchasing, ordering and quality control, we manage the materials and products necessary to keep your business running smoothly.

CHEMICAL EXPERTISE
Agilitys specialty Chemicals business has a unique industry heritage. Our established pedigree and considerable experience enables us to deliver many benefits to our customers, including: supply chain solutions, leveraged freight procurement and supply

chain operations outsourcing while maintaining our impeccable reputation for safety. This unique combination of services is what we call Intelligent Logistics, a comprehensive package that delivers significant cost, efficiency and service benefits to customers within the chemical industry. As a recognized global leader in chemical logistics management and service provision, Agility delivers real value to our customers by implementing practical, impartial and, most importantly, cost saving solutions. These solutions are the result of many years practical knowledge and experience by our team of chemical industry supply chain experts. The practical application of this knowledge requires a privileged view into our clients supply chains. This privilege is earned and established through the excellent interpersonal relationships we build with our clients. With a global presence afforded by Agilitys global network, our chemical specialty business can effectively and efficiently meet the requirements of global chemical multinationals as well as niche specialty chemical businesses. In mature markets, Agilitys solutions are typically asset light. However, in rapidly growing, emerging markets, Agility has the resources, experience and expertise necessary to deliver cost effective, asset-based solutions. At Agility Chemicals, we provide services to the chemical, petrochemical, polymer, biofuels, life science and pharmaceutical sectors, as well as serving specialty commodity-based industries.

CHAPTER 5 RESEARCH IN FUNCTIONAL AREA

OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES:
To analyse the performance of ratio analysis of Agility

SECONDARY OBJECTIVES:
To  To  To  To  To


prepare the balance sheet of the company find the current assets and current liabilities prepare the operating profit of the company calculate the ratios from the balance sheet analyze the performance from the findings

SCOPE OF THE STUDY

Ratio points out the operating efficiency of the firm whether the management has utilized the firms assets correctly, to increase the investors wealth, it ensures a fair return to its owners and recurs optimum utilization of the forms assets. The information given in the basic financial statements serves no useful purpose unless it is interrupted and analyzed in some comparable items. Ratio analysis facilitates the management to know whether the firms financial position is improving or deteriorating or is constant over the years by setting a trend with the help of ratios. Accounting ratios provide a reliable data, which can be compared, studied and analyzed. These ratios provide future prospectus. The ratio can also serve as a basis for preparing budgeting future of action. Accounting ratios help to measure the profitability of the business by calculating the various profitability ratios. It helps the management to know about the earning capacity of the business concern. In this way profitability ratios show the actual performance of the business.

ANALYSIS AND INTERPRETATION

PERFORMANCE ANALYSIS LIQUIDITY RATIO
Liquidity ratios play a key role in assessing short-term financial position of a business. This ratio also indicates the ability of the business to meet the maturing or current debts, the efficiency of the management in utilizing the working capital and the progress attained in the current financial position. This ratio is classified in to the following categories  Current ratio  Liquid ratio

CURRENT RATIO:
This ratio explains the relationship between current assets and current liabilities of a business. Formula:

Current assets Current ratio = ------------------------Current liabilities

CURRENT PARTICULARS YEAR ( 2010) YEAR (2009) PREVIOUS

Current assets

2,075,421,854

2,363,069,764

Current liabilities

1,733,305,201

2,219,460,541

2,075,421,854 Current ratio = --------------------1,733,305,201 Current ratio for current year = 1.1973 2,363,069,764 Current ratio = ------------------------2,219,460,541 Current ratio for previous year = 1.0647

LIQUID RATIO:
Liquid ratio may be defined as the ratio of liquid assets to liquid liabilitiesor current liabilities. It is concerned with the relationship between liquid assets and liquid liabilities. The other terms used for this ratio are QUICK RATIO. Formula: Liquid assets Liquid ratio = -------------------Liquid liabilities
CURRENT PARTICULARS YEAR ( 2010) YEAR (2009) PREVIOUS

Liquid assets 2,075,421,854 2,363,069,764

Liquid liabilities 1,449,340,249 2,048,258,071

2,075,421,854 Liquid ratio = ------------------------1,449,340,249

Liquid ratio for current year = 1.4319 2,363,069,764 Liquid ratio = ------------------------------2,048,258,071 Liquid ratio for previous year = 1.1536

SOLVENCY RATIO:
This ratio disclose the firms ability to meet the interest costs regularly and Long term indebtedness at maturity This ratio is classified into following categories      Debt-Equity ratio Propriety ratio Fixed assets to proprietors funds Capital gearing ratio Current assets to shareholders funds

DEBT-EQUITY RATIO:

This ratio expresses the relationship between long term debts and shareholders fund. In other words,this Ratio is calculated to assess the ability of the firm to meet its long term liabilities. Generally, debt equity ratio of is considered safe. Formula: External Equities Debt-Equity ratio = -------------------------Internal Equities
CURRENT PARTICULARS YEAR ( 2010) YEAR (2009) PREVIOUS

External equities Internal equities

2,652,029,895 1,396,340,986

2,698,392,727 918,357,022

2,652,029,895 Debt-Equity ratio = ---------------------------1,396,340,986 Debt-Equity ratio for current year = 1.8992 2,698,392,727 Debt-Equity ratio = -------------------------918,357,022 Debt-Equity ratio for previous year = 2.9382

PROPRIETARY RATIO:

This ratio indicates the proportion of total funds provide by owners or shareholders. Formula: Shareholders Funds Proprietary Ratio = ----------------------------Total assets

CURRENT PARTICULARS YEAR ( 2010) YEAR

PREVIOUS (2009)

Shareholders funds Total assets

2,652,029,895 4,048,370,881

2,698,392,727 3,623,903,407

2,652,029,895 Proprietary ratio = ------------------------4,048,370,881 Proprietary ratio for current year = 0.6550 2,698,392,727 Proprietary ratio = ----------------------3,623,903,407 Proprietary ratio for previous year = 0.7446

FIXED ASSETS TO PROPRIETORS FUNDS:

This ratio is also know as fixed assets to net worth ratio. Formula:

Fixed assets Fixed Asset to Proprietors Fund Ratio = -----------------------Proprietors funds

CURRENT PARTICULARS YEAR ( 2010) YEAR

PREVIOUS (2009)

Fixed assets Proprietors funds

2,627,675,074 2,652,029,895

2,438,555,763 2,698,392,727

2,627,675,074 Fixed assets to proprietors funds = ----------------------------2,652,029,895 Fixed assets to proprietors funds for current year = 0.9908 2,438,555,763 Fixed assets to proprietors funds = --------------------------2,698,392,727 Fixed assets to proprietors funds for previous year = 0.9037

CAPITAL GEARING RATIO:

This ratio establishes a relationship between equity capital (including all reserves and undistributed profits) and fixed cost bearing capital. Formula: Equity share capital Capital gearing ratio = ------------------------Fixed interest and dividend bearing funds

Current particulars
Equity share capital Fixed interest and dividend bearing funds

Previous year (2009)

2,698,392,727

year
( 2010)

2,652,029,895

1,396,340,986

918,357,022

2,652,029,895 Capital gearing ratio = ----------------------1,396,340,986 Capital gearing ratio for current year = 1.8992 2,698,392,727 Capital gearing ratio = -------------------------918,357,022

Capital gearing ratio for previous year = 2.9382 CURRENT ASSETS TO SHAREHOLDERS FUNDS RATIO: This ratio shows the relationship between current assets and proprietors funds. Formula: Current assets Current assets to shareholders funds ratio = -----------------------Proprietors funds

particulars
Current assets

Current year (2010)

2,075,421,854

Previous year (2009)

2,363,069,764 2,698,392,727

Proprietors funds 2,652,029,895

2,075,421,854 Current assets to shareholders funds = --------------------------2,652,029,895 Current assets to shareholders funds for current year = 0.7825 2,363,069,764 Current assets to shareholders funds = --------------------------2,698,392,727

Current assets to shareholders funds for previous year = 0.8757

ACTIVITY TURNOVER RATIO:

These ratio are calculated on the bases of cost of sales or sales, therefore, these ratio are also called as Turnover Ratio. Turnover indicates the speed or number of times the capital employed has been rotated in the process of doing business. Higher turnover ratio indicates the better use of capital or resources and in turn lead to higher profitability. This ratio is classified into the following categories:  Fixed assets turnover ratio  Working capital turnover ratio

FIXED ASSETS TURNOVER RATIO:

This ratio is particular importance in manufacturing concerns where the investment in fixed asset is quit high. Compared with the previous year, if there is increase in this ratio, it will indicate that there is better utilization of fixed assets. If there is a fall in this ratio, it will show that fixed assets have not been used as efficiently, as they had been used in the previous year Formula: Cost of goods sold Fixed assets turnover ratio = ---------------------Net fixed assets

particulars

Current year (2010)

7,372,612,601

Previous year (2009)

8,108,654,466

Cost of goods sold

Net fixed assets

2,461,084,351 2,294,914,394

7,372,612,601 Fixed assets turnover ratio = -----------------------2,461,084,351 Fixed assets turnover ratio for current year = 2.9956 8,108,654,466 Fixed assets turnover ratio = ------------------------2,294,914,394 Fixed assets turnover ratio for previous year = 3.5333

WORKING CAPITAL TURNOVER RATIO:

This ratio is of particular importance in non-manufacturing concerns where current assets play a major role in generating sales. It shows the number of times working capital has been rotated in producing sales. A high working capital turnover ratio shows efficient use of working capital and quick turnover of current assets like stock and debtors. A low working capital turnover ratio indicates under-utilisation of working capital. Formula: Cost of goods sold

Working capital turnover ratio = -----------------------Working capital

Particulars
Cost of goods sold

Current year (2010)

7,372,612,601

Previous year (2009)

8,108,654,466

342,116,653 Working capital

143,609,223

7,372,612,601 Working capital turnover ratio = --------------------------342,116,653 Working capital turnover ratio for current year = 21.5499 8,108,654,466 Working capital turnover ratio = -------------------------143,609,223 Working capital ratio for previous year = 56.4633

PROFITABILITY RATIO:
The main object of every business concern is to earn profits. A business must be able to earn adequate profits in relation to the risk and capital invested in it. The efficiency and the success of a business can be measured with the help of profitability ratio. This ratio is classified into the following categories:  Net profit ratio  Operating ratio  Expenses ratio

NET PROFIT RATIO:

This ratio measures the rate of net profit earned on sales. It helps in determining the overall efficiency of the business operations. An increase in the ratio over the previous year shows improvement in the overall efficiency and profitability of the business. Formula: Net profit Net profit ratio = ------------------ *100 Net sales

particulars
Net profit

Current year (2010)

46,362,832 7,372,612,601

Previous year (2009)

46,240,727

Net sales

8,108,654,466

46,362,832 Net profit ratio = ------------------------ *100 7,372,612,601 Net profit ratio for current year = 0.6288 46,240,727 Net profit ratio = ------------------------- *100 8,108,654,466 Net profit ratio for previous year = 0.5702

OPERATING RATIO:
This ratio measures the proportion of an enterprise cost of sales and operating expenses in comparison to its sales. Formula: Operating cost Operating ratio = ----------------------- *100 Net sales

particulars
Operating cost Net sales

Current year (2010)

6,357,334,020 7,372,612,601

Previous year (2009)

7,011,835,194

8,108,654,466

6,357,334,020 Operating ratio = ---------------------------- *100 7,372,612,601 Operating ratio for current year = 86.2290 7,011,835,194 Operating ratio = --------------------------- *100 8,108,654,466 Operating ratio for previous year = 86.4734

EXPENSES RATIO:
These ratio indicate the relationship between expenses and sales. Although the operating ratio reveals the ratio of total operating expenses

in relation to sales but some of the expenses include in operating ratio may be increasing while some may be decreasing. Hence, specific expenses ratio are computed by dividing each type of expense with the net sales to analyse the causes of variation in each type of expense. Formula: Administrative expense Expenses ratio = ------------------------------- *100 Net sales

particulars
Administrative expenses Net sales

Current year (2010)

430,464,906

Previous year (2009)

389,196,442

7,372,612,601 8,108,654,466

430,464,906 Administrative expenses = -------------------------- *100 7,372,612,601 Administrative expenses for current year = 5.8387 389,196,442 Administrative expenses = ----------------------------- *100 8,108,654,466 Administrative expenses for previous year = 4.7997

PROFITABILITY RATIO BASED ON INVESTMENT:

These ratio reflect the true capacity of the resources employed in the enterprise. Sometimes the profitability ratio based on sales are high whereas profitability ratio based on investment are low. Since the capital is employed to earn profit, these ratios are the real measure of the success of the business and managerial efficiency. This ratio is classified into the following categories: Return on capital employed Return on total shareholders funds Earning per share

RETURN ON CAPITAL EMPLOYED:

This ratio reflects the overall profitability of the business. It is calculated by comparing the profit earned and the capital employed to earn it. This ratio is usually in percentage and is also known as Rate of Return or Yield on Capital. Profit before interest and tax dividends Return on capital employed = ---------------------------------------Capital employed

particulars
Profit before interest and tax dividends Capital employed

Current year (2010)

62,869,286

Previous year (2009)

83,553,102

2,969,791,727 2,582,164,986

62,869,286 Return on capital employed = ------------------------2,969,791,727

Return on capital employed for current year = 0.0211 83,553,102 Return on capital employed = -------------------------2,582,164,986 Return on capital employed for previous year = 0.0323

RETURN ON TOTAL SHAREHOLDERS FUNDS:

This ratio reveals how profitably the proprietors funds have been utilized by the firm. A comparison of this ratio with that of similar firms will throw light on the relative profitability and strength of the firm. Formula: Net profit after interest and tax Return on total shareholders funds = ------------------------------------------Total shareholders funds

Particulars
Net profit after interest and tax Total shareholders funds

Current year (2010)

46,362,832

Previous year (2009)

46,240,727

2,652,029,895

2,698,392,727

46,362,832 Return on total shareholders funds = -----------------------2,652,029,895 Return on total shareholders funds for current year = 0.0174 46,240,727 Return on total shareholders funds = --------------------------2,698,392,727 Return on total shareholders funds for previous year = 0.0171

EARNING PER SHARE:

This ratio measures the profit available to the equity shareholders on a per share basis. All profit left after payment of tax and preference dividend are available to equity shareholders. Formula: Net profit Dividend on preference shares Earning per share = -------------------------------------No. of equity shares

Particulars

Current year (2010) 46,362,832

Previous year (2009) 46,240,727

Net profit Dividend on preference shares No.of equity shares

776,000,000

776,000,000

46,362,832 Earning per share = -------------------776,000,000 Earning per share for current year = 0.0597 46,240,727 Earning per share = -------------------776,000,000 Earning per share for previous year = 0.0595