company analysis report on M/s Vimal Oil & Foods ltd

Vimal &Oil Foods Ltd

Company Profile

M/s Vimal Oil & Foods (Vimal) was incorporated on 14th May 1992. It received

the certificate of commencement of business on 19 May 1992 from the Registrar

of Companies Gujarat.

The company has embarked upon a project for setting up a 200 TPD solvent

extraction and 50 TPD edible refined oil plant at village Hanumant Heduva Dist.

Mehsana (North Gujarat). Presently the company is engaged in the production of

edible oils in its edible oil refinery which commenced commercial production on

25.09.93. Vimal is promoted by a group of qualified entrepreneurs viz. Shri

Chandubhai I Patel Shri G K Patel Shri J C Patel and Shri K S Patel from

Mehsana (Gujarat)

2003

-Members approve delisting from Delhi Stock Exchange

M/s. Vimal Oil & Foods Limited (Vimal) was incorporated on 14th May 1992. It

received the certificate of commencement of Business on 19th May 1992 from

the Registrar of Companies Gujarat. The Company is engaged in the production

of edible oil in its edible oil refinery whichcommenced commercial production with

a 50 TPD capacity in September 1993.

The Company made the Public Issue of 27 50 000 Equity Shares of Rs. 10/- for

cash at par aggregating Rs. 2 75 00 000/- in March 1994 to part finance the

project for setting up a 200 TPD Solvent Extraction Plant which was commenced

in December 1994.

In the year 1995 additional Oil Refinery capacity of 100 TPD was commenced. In

the year 1995 the Company has set up a Wind Mill at Survey No. 128 Mouj:

Kalyanpur Tal: Kalyanpur Dist: Jamnagar. The Company has set up a Milk

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Powder plant in the year 1997 at Village: Hanumant Heduva Nr. Palvasna

Railway Crossing Highway and Mehsana- 384 002.

In the year 2003 refining capacity was enhanced to 80 000 TPA (approx. 300

TPD). The said expansion was funded by term loan and internal accruals.

The Company is exporting the De-oiled Cake (DOC) a by-product under the

solvent extraction to various foreign countries. The Company has been

presented with the Export Awards in the years 1998 1999 and 2001. The

Company has obtained One Star Export House status from the office of theJoint

Director General of Foreign Trade Ahmedabad on 18th October 2005 which is

valid from 01.04.2005 to 31.03.2009.

The Company has adhered to the Quality Management System Standard of ISO

9001: 2000 issued by the Det Norske Veritas (DNV).

MAJOR EVENTS IN THE HISTORY OF THE COMPANY:

Year Events

1992 Incorporation of the company as the limited company1993 50 TPD capacity

refinery of Cotton seed/Rapeseed Oil was commenced1994 200 TPD Solvent Extraction

Plant was commenced1995 Additional Oil Refinery capacity of 100 TPD was

commenced1995 Company has set up a Wind Mill1997 Company has set up a Milk

Powder plant1998 Award for the highest Exporter of Rapeseed De-oiled cakes (DOC) in

India during the year 1997-98 from the Solvant Extraction Association of India.1998-99

2000-01 Award for the Second Highest Exporter's of Rapeseed DOC for the year 1998-

99 2000-01 2001 Company has also ISO 9001 : 2000 Registration for Quality System

Certification from DNV Netherlands2003 Refining capacity was enhanced to 80 000

TPA. (approx. 300 TPD)2006 Implementation of Customised Enterprise Resource

Planning System

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1992 Incorporation of the company as the limited company

1993 50 TPD capacity refinery of Cotton seed/Rapeseed Oil was commenced

1994 200 TPD Solvent Extraction Plant was commenced

1995 Additional Oil Refinery capacity of 100 TPD was commenced

1995 Company has set up a Wind Mill

1997 Company has set up a Milk Powder plant

1998 Award for the highest Exporter of Rapeseed De-oiled cakes

(DOC) in ndia during the year 1997-98 from the Solvant Extraction

Association of India.

1998-99,

2000-01 Award for the Second Highest Exporter's of Rapeseed DOC for

the year 1998-99, 2000-01

2001 Company has also ISO 9001 : 2000 Registration for Quality

System Certification from DNV, Netherlands

2003 Refining capacity was enhanced to 80,000 TPA. (approx. 300

TPD)

2006 Implementation of Customised Enterprise Resource Planning System

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Business Description

Vimal Oil & Foods Limited. The Group's principal activity is to produce edible oil and

de-oiled cake (DOC). It operates in three segments, namely, Integrate Oil Division,

Powder Manufacturing and Wind Mill. It exports its by-product de-oiled cake to foreign

countries. The products include refined cotton seed oil, groundnut oil, rape seed oil and

de-oil cake, refined soya bean oil and others The plant is located in Gujarat.

Basic information

INDUSTRY : VIMAL OIL *&FOODS LTD

ROC Reg. No. : 51577

Incorporation Year : 1989

Ownership : Private (Indian)

Website : WWWW. VIMALOIL .COM ISIN Code : INE345E01013

BSE Demat Code : 523576

BSE Listing group : B

Face value (Rs) : 10

Beta : 1.66

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BOARD OF DIRECTORS

Directors Name Designation

J C Patel Ch & Md

Mahendrabhai V Patel Director

Mukesh N Patel Director

Harnarayan J Patel Director

Bankers

Bank of America Bank of Baroda Central Bank of India Citibank NA. Hongkong & Shanghai Banking Corporation Ltd. Punjab National Bank Standard Chartered Bank State Bank of India ICICI Bank Ltd. HDFC Bank Ltd. IDBI Bank Ltd. Canara Bank Not Reported American Express Bank

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CONTACT

Registered Office : 4th Floor Heritage Nr. The Grand Bhagwati Sarkhej Gandhinagar

Highway Ahmedabad Gujarat - 380054 Tel: 26841851 26841852 26841853

Industry Type: Edible Oils & Solvent Extraction

Key Officials:

Mr. Harnarayan J Patel Director

Mr. Mahendrabhai V Patel Director

Mr. Mukesh N Patel Director

Mr. Jayesh C Patel Chairman and Managing director

BSE CODE: 519373 NSE CODE: Not Available

ISIN: INE067D01015

Current Market Capital: 9.828

Promoters %: 26.4218

Promoters Shares: 1202193

Institution Investment %: 0.0176

Institution Investment Shares: 800

Auditor: Rajesh Rasiklal Shah & Associates

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Study objectives

To know the liquidity activity and profitability position of the company

To determine the impact of selected ratios on profitability

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Executive Summary

Vimal Oil & Foods Ltd. Mar 2003

Mar 2004

Mar 2005

Mar 2006

Mar 2007

Mar 2008

Rs. Crore (Non-Annualised) 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

-

Total income 236.55 248.85 248.56 363.79 492.67 637.87

Sales 236.26 247.74 247.83 363.17 491 635.47

Income from financial services 0.28 0.71 0.68 0.53 1.61 2.18

Total expenses 237.53 247.32 249.12 365.27 496.41 634.6

Raw material expenses 213.41 217.06 129.42 162.55 275.31 322.24

Power, fuel & water charges 2.61 1.94 1.71 2.16 2.72 2.87

Compensation to employees 0.6 0.59 0.65 0.64 0.85 1.14

Indirect taxes 1.12 7.27 6.4 2.1 0.13 0.41

Selling & distribution expenses 2.83 2.11 1.69 2.92 4.63 4.7

Other operational exp. of indl. enterprises 0.02 0.37 0.14 0.01 0.03 0.02 Other oper. exp. of non-fin. service enterprises 0 0 0 0 0 0

PBDITA 5.08 4.95 5.83 7.21 11.34 17.19

PBDTA 2.8 2.83 2.7 4.28 6.95 11.26

PBT 1.82 1.81 1.71 3.28 5.5 8.71

PAT 1.28 1.23 1.05 2.02 3.43 5.58

Net worth 9.96 10.42 10.64 14.64 14.93 24.5 Paid up equity capital (net of forfeited capital) 4.55 4.55 4.55 4.55 4.55 4.55

Reserves & surplus 5.41 5.87 6.09 7.59 10.38 14.95

Total borrowings 26.87 34.33 30.7 38.73 47.25 69.8

Current liabilities & provisions 7.22 7.72 16.91 29.04 79.25 48.2

Total assets 46.86 55.28 60.98 84.98 144.37 146.12

Gross fixed assets 19.67 19.49 19.42 20.4 24.28 31.24

Net fixed assets 13.95 12.81 11.77 11.79 14.55 20.36

Investments 0.01 0.01 0 0 0 0

Current assets 31.64 39.92 47.31 73.06 126.13 123.15

Loans & advances 1.23 2.54 1.9 0.05 2.26 2.61

Growth (%)

Total income 55.074079 5.1997464 -0.116536 46.359028 35.427032 29.47206

Total expenses 59.662566 4.1215846 0.727802 46.624117 35.902209 27.83788

PBDITA 24.815725 -2.559055 17.777778 23.670669 57.281553 51.5873

PAT 9.4017094 -3.90625 -14.63415 92.380952 69.80198 62.68222

Net worth 2.9015544 4.9345418 2.1113244 36.842105 -6.456044 79.88253

Total assets 37.419355 17.968417 10.311143 39.357166 69.887032 1.212163

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Profitability ratios %

PBDITA Net of P&E/Total income net of P&E 2.1475375 1.8708509 2.3456989 2.0126478 2.3120801 2.702787

PAT Net of P&E/Total income net of P&E 0.5411118 0.3741702 0.4224672 0.5856475 0.7064125 0.882639

PAT Net of P&E/Avg. net worth 13.014743 9.1265947 9.97151 16.851266 23.537369 28.55694

PAT/Avg. net worth 13.014743 12.070658 9.97151 15.981013 23.199188 28.30332

PAT Net of P&E/Avg. total assets 3.1620553 1.82103 1.8062962 2.9186078 3.0346632 3.876209

PAT/Avg. total assets 3.1620553 2.408459 1.8062962 2.7678816 2.9910617 3.841785

Liquidity ratios (times)

Current ratio 1.3475298 1.2762148 1.3141667 1.3444976 1.064478 1.266454

Debt to equity ratio 2.7059416 3.2946257 2.8853383 2.6600275 3.469163 2.84898

Interest cover 1.7982456 1.7122642 1.5463259 2.1569966 2.2642369 2.477234

Debtors (days) 16.291056 24.213995 36.907961 33.261764 30.757383 27.24849

Creditors (days) 8.2911881 7.5063881 21.782548 27.457505 34.692282 26.0567

Efficiency ratios (times)

Total income / Avg. total assets 5.8501298 4.8741553 4.2759333 4.987524 4.322425 4.411578

Total income / Compensation to employees 394.25 421.77966 382.4 568.42188 579.61176 559.5351

Assets


Mar 2004

Mar 2005

Mar 2006

Mar 2007

Mar 2008


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-

Gross fixed assets 19.67 19.49 19.42 20.4 24.28 31.24

Land & building 3.58 3.7 3.66 3.82 4.39 4.51

Plant & machinery 15.11 14.67 14.59 14.73 18 22.45

Transport & comm. equipment/infrastructure 0.59 0.73 0.65 0.57 0.58 0.65

Furniture,amenities & other fixed assets 0.39 0.39 0.52 1.28 1.31 1.52

Capital work-in-progress 0 0 0 0 0 2.11

Intangible assets 0 0 0 0 0 0

Net pre-operative expenses pending allocation 0 0 0 0 0 0

Net lease reserve adjustment 0 0 0 0 0 0

Less: Cumulative depreciation 5.72 6.68 7.65 8.61 9.73 10.88

Less: Arrears of depreciation 0 0 0 0 0 0

Net fixed assets 13.95 12.81 11.77 11.79 14.55 20.36

Investments 0.01 0.01 0 0 0 0

Equity shares 0.01 0.01 0 0 0 0

Preference shares 0 0 0 0 0 0

Mutual funds 0 0 0 0 0 0

Debt instruments 0 0 0 0 0 0

Approved securites (slr/statutory req.) 0 0 0 0 0 0

Assisted companies 0 0 0 0 0 0

Others 0 0 0 0 0 0 Less: Provision for dimunition in value of investments 0 0 0 0 0 0

Group companies 0 0 0 0 0 0

Non-group companies 0.01 0.01 0 0 0 0

Market value of quoted investments 0 0 0 0 0 0

Deferred tax assets 0 0 0 0 0.12 0

Current assets 31.64 39.92 47.31 73.06 126.13 123.15

Cash & bank balance 1.92 1.07 0.11 1.1 36.32 14.42

Inventories 15.73 14.57 13.33 27.98 37.27 50.95

Receivables 13.99 24.28 33.87 43.67 52.54 57.78

Expenses paid in advance 0 0 0 0.31 0 0

Loans & advances 1.23 2.54 1.9 0.05 2.26 2.61

Deferred revenue expenditure 0.03 0 0 0.08 1.31 0

Total assets 46.86 55.28 60.98 84.98 144.37 146.12

Liabilities


Mar 2004

Mar 2005

Mar 2006

Mar 2007

Mar 2008


-

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Net worth 9.96 10.42 10.64 14.64 14.93 24.5

Authorised capital 6 6 6 6 18 18

Issued equity capital 4.55 4.55 4.55 4.55 4.55 4.55

Paid up equity capital (net of forfeited capital) 4.55 4.55 4.55 4.55 4.55 4.55

Forfeited equity capital 0 0 0 0 0 0

Paid up preference capital (net of forfeited capital) 0 0 0 0 0 5 Capital contibution, suspense and application money 0 0 0 2.5 0 0

Reserves & surplus 5.41 5.87 6.09 7.59 10.38 14.95

Free Reserves 5.41 5.87 6.09 7.59 10.38 14.95

Security premium reserves (Net of deductions) 0 0 0 0 0 0

Other free reserves 5.41 5.87 6.09 7.59 10.38 14.95

Specific Reserves 0 0 0 0 0 0

Revaluation Reserves 0 0 0 0 0 0

Less Accumulated losses 0 0 0 0 0 0

Total borrowings 26.87 34.33 30.7 38.73 47.25 69.8

Bank borrowings 18.32 26.29 21.15 26.76 40.3 52.71

Short term bank borrowings 16.66 23.79 19.17 25.36 39.39 49.66

Long term bank borrowings 1.66 2.5 1.98 1.4 0.91 3.05

Financial institutional borrowings 0.38 0 0 0 0 0

Central & state govt. (usually sales tax deferrals) 0 0 0 0 0 0

Debentures / bonds 0 0 0 0 0 0

Convertible 0 0 0 0 0 0

Non-convertible 0 0 0 0 0 0

Fixed deposits 0 0 0 0 0 0

Foreign borrowings 0 0 0 0 0 0

Of which : euro convertible bonds 0 0 0 0 0 0

Borrowings from corporate bodies 3.55 0 9.55 11.97 6.95 7.09

Group / associate cos. 0 0 0 0 0 0

Borrowings from promoters / directors 0.11 0.12 0 0 0 10

Commercial paper 0 0 0 0 0 0

Hire purchase borrowings 0 0 0 0 0 0

Deferred credit 0 0 0 0 0 0

Other borrowings 4.51 7.92 0-7.11E-

15 0 0

Secured borrowings 18.73 26.3 21.15 26.76 40.3 52.71

Unsecured borrowings 8.14 8.03 9.55 11.97 6.95 17.09

Current portion of long term debt 0 0 0 0 0 0

Current liabilities & provisions 7.22 7.72 16.91 29.04 79.25 48.2

Sundry creditors 5.22 4.86 14.35 26.85 45.75 43.93

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Acceptances 0 0 0 0 0 0 Deposits & advances from customers & employees 0.01 0.11 0.13 0.07 0.32 0.11

Interest accrued 0 0 0 0 0.13 0

Share application money 0 0 0 0 29.16 0.01

Other current liabilities 0.07 0.02 0.06 0.18 0.27 0.26

Provisions 1.92 2.73 2.37 1.94 3.62 3.89

Deferred tax liability 2.81 2.81 2.73 2.57 2.94 3.62

Total liabilities 46.86 55.28 60.98 84.98 144.37 146.12

Net worth (net of reval & DRE) 9.93 10.42 10.64 14.56 13.62 24.5

Contingent liabilities 14.16 66.3 157.05 138.08 97.94 182.89

Profits


Mar 2004

Mar 2005

Mar 2006

Mar 2007

Mar 2008


-

PBDITA 5.08 4.95 5.83 7.21 11.34 17.19

Depreciation 0.95 0.99 0.99 1 1.12 1.24

Amortisation 0.03 0.03 0 0 0.33 1.31

PBIT 4.1 3.93 4.84 6.21 9.89 14.64

Interest paid 2.28 2.12 3.13 2.93 4.39 5.93

Financial charges on instruments 0 0 0 0 0 0

Fee based financial services expenses 0 0 0 0 0 0

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PBT 1.82 1.81 1.71 3.28 5.5 8.71

Provision for direct tax 0.54 0.58 0.66 1.26 2.07 3.13

Corporate tax 0.36 0.58 0.74 1.4 1.8 2.3

Deferred tax 0.18 0 0 0 0.24 0.8

Less: Deferred tax assets / credit 0 0 0.08 0.16 0 0

Other direct tax 0 0 0 0.02 0.03 0.03

Fringe benefits tax 0 0 0 0.02 0.03 0.03

PAT 1.28 1.23 1.05 2.02 3.43 5.58

Prior period & extra-ordinary income 0 0.3 0.02 0.09 0.04 0.01

Prior period & extra-ordinary expenses 0 0 0.02 0.2 0.09 0.06Net prior period & extraordinary transactions 0 -0.3 0 0.11 0.05 0.05

PBDITA net of P&E 5.08 4.65 5.83 7.32 11.39 17.24

PBIT net of P&E 4.1 3.63 4.84 6.32 9.94 14.69

PBT net of P&E 1.82 1.51 1.71 3.39 5.55 8.76

PAT net of P&E 1.28 0.93 1.05 2.13 3.48 5.63

Distribution of profits (%)

PBDITA 100 100 100 100 100 100

Depreciation & Amortisation 19.291339 20.606061 16.981132 13.869626 12.786596 14.834206

Financial charges 44.88189 42.828283 53.687822 40.638003 38.712522 34.4968

Tax 10.629921 11.717172 11.320755 17.475728 18.253968 18.208261

PAT 25.19685 24.848485 18.010292 28.016644 30.246914 32.460733

Non--provisions 0 0 0 0 0 0

Diminution in investement 0 0 0 0 0 0

Sundry debtors 0 0 0 0 0 0

Loans & advances including NPAs 0 0 0 0 0 0

Loans & advances to group cos. 0 0 0 0 0 0

Interest expenses 0 0 0 0 0 0

Power expenses 0 0 0 0 0 0

TOOLS OF ANALYSIS

NATURE OF RATIO ANALYSIS

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as “the

indicated quotient of to mathematical expressions “and as “the relationship between two

or more things”. In financial analysis, a ratio is used as a bench mark for evaluating

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The financial position and performance of firm. The absolute accounting figures reported

in the financial statements do not provide a meaningful understanding of the

performance and financial position of a firm. An accounting figure conveys meaning

when it is related to some relevant information

CLASSIFICATION OF RATIOS

Ratio analysis was pioneered by Alexander. Interpretation of financial statements

can be made easier by establishing quantitative relationships between various items of

financial statements.

Accounting ratios may be classified as:

Liquidity Ratios

Solvency Ratios

Turnover Ratios

Profitability Ratios

Statistical Tools

Trend analysis y=a+bx

Σ y = na + bΣx

Σxy = aΣx + bΣx2

Co-efficient of correlation:-

The Correlation matrix is a powerful tool for degree of relationship among

predictors. To examine the correlation among various variables, Pearson product

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movement correlation (r) was computed. Thus, the growth is outcome number of strategic

decisions taken by a firm in the every-changing business environment.

Co-efficient of correlation

LIQUIDITY RATIO:(a) CURRENT RATIO (CR): The ratio of current assets to current liabilities is called “current ratio”. The term current assets includes debtors, stock, bills receivable, bank and cash balance, prepaid expenses, income due and short term investments. The term current liabilities includes creditors, bank overdraft, bills payable, out standing expenses, income received in advances, etc. standard expected current ratio internationally accepted current ratio is 2:1 i.e. current assets shall be 2times to current liabilities.

Current assets

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Current ratio =----------------------------Current liability

TABLE NO: 1 calculation Of CR during 2003-2008 (RS in Crores)

Years C.A’S C.L’S Ratio Trend2003 31.64 5.8 5.45 -2004 39.92 4.99 8 increase2005 47.31 14.54 3.25 decrease2006 73.06 27.1 2.69 decrease2007 126.13 75.63 0.59 decrease2008 123.15 119,26 1.03 increase

SOURCE: completed from the annual reports of ‘Vimal oil & foods Ltd”.GRAPH NO: 1

5.45

8

3.25 2.690.59 1.03

02468

2003 2004 2005 2006 2007 2008

years

cr

INTERPRETATION:

From the above table & chart it is observed that the current ratio is during the

study period this is due to increase in proportionate change in current assets is less than

the proportionate change in current liabilities .the current ratio of the company is more

than the standard norm of 2:1 but it is less in the years 2007 & 2008.

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(b)QUICK RA TIO (QR): This ratio is called “LIQUID” OR “ACID TEST RATIO”. It is calculated by

comparing the quick assets with quick liabilities. A quick or liquid asset refers to assets which are quickly convertible cash. Quick assets other than stock and pre paid expenses are considered as quick assets.

The ideal ratio or generally accepted “norm” for liquid ratio is “1”.

Quick assets Quick ratio = -------------------------------

Current liabilities

TABLE NO: 2 Calculation of QR during 2003-2008 (RS in Crores)Years Quick assets Current

liabilitiesratios trend

2003 15.91 7.22 2.20 ------2004 25.35 7.72 3.28 increase2005 33.98 16.91 2.00 decrease2006 44.77 29.04 1.54 decrease2007 88.86 79.25 1.12 decrease2008 72.2 48.2 1.49 increase

SOURCE: completed from the annual reports of ‘Vimal oil & foods Ltd”.

GRAPH NO :2

QUICK RATIO

2.2

3.28

2

1.541.12

1.49

0

0.5

1

1.5

2

2.5

3

3.5

2003 2004 2005 2006 2007 2008

years

rati

o

INTERPRETATION:

From the above table it is observed that it is observed that the quick ratio is

decreased in the year 2005-2007 fluctuating the years due to increase the year 2004

&2008 of quick ratio.

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(c) ABSOLUTE QUICK RATIO (AQR):

Absolute assets are cash, bank balance &marketable securities. This ratio reveals the relationship between absolute quick assets and quick liability.

Absolute liquid assets

Absolute quick ratio =-------------------------------------- Current liability

TABLE NO: 3 calculation of AQR during 2003-2008 (Rs in crores)

Years A.l.A’S C.L’S Ratio Trend2003 1.92 7.22 0.26 -2004 1.07 7.72 0.13 DECREASE2005 0.11 16.91 0.006 DECREASE2006 1.1 29.04 0.03 DECREASE2007 36.32 79.25 0.45 INCREASE2008 14.42 48.2 0.29 DECREASE


GRAPH NO: 3

ABSOLUTE QUICK RATIO

0.26

0.13

0.006 0.03

0.45

0.29

0

0.1

0.2

0.3

0.4

0.5

2003 2004 2005 2006 2007 2008

YEARS

RA

TIO

INTERPRITATION:From the above table it is observed that absolute quick ratio is during the study period..

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SOLVENCY RATIO:(a) PROPRIETARY (PR):

The ratio compares the shareholder’s fund or owners fund and total tangible assets. In other words this ratio expresses the relationship between the proprietors fund and the total tangible assets.

Shareholders fund (Net worth)Proprietary ratio =----------------------------------------------

Tangible assets

CHART NO:4 calculation of PR during the year 2003-2008 (Rs in cores)

Years Net worth T.A’S Ratio Trend2003 9.96 46.86 0.21 -2004 10.42 55.28 0.19 DRCREASE2005 10.64 60.98 0.18 DECREASE2006 14.64 84.98 0.17 DECREASE2007 14.93 144.37 0.10 DECREASE2008 24.5 146.12 1.73 INCREASE


GRAPH NO :4

INTERPRETATION:

From the above table it is observed that proprietary ratio is decreasing from 2003 to 2007 and it increased in 2008 .this is due to increase in net worth and tangible assets.

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(b) DEBT-EQUITY RATIO (DER):

This ratio is ascertained to determine long term solvency position of a company. It is also called as “external-internal equity ratio”. This ratio relationship between outsiders fund and internal equities. The norm of this ratio is 2:1.

Debt (total borrowings)Debt-equity ratio = -------------------------------------------

Equity (Networth)

CHART NO: 5 Calculation of DER during the year 2003-2008 (Rs in crores)

Years Debt Equity Ratio Trend2003 26.87 9.96 2.69 -2004 34.33 10.42 3.29 INCREASE2005 30.7 10.64 2.88 DECREASE2006 38.73 14.64 2.64 DECREASE2007 47.25 14.93 3.16 INCREASE2008 69.8 24.5 2.84 DECREASE


GRAPH NO: 5

2.693.29 2.88 2.64

3.16 2.84

01234

2003 2004 2005 2006 2007 2008

YEARS

DER

INTERPRETATION:

From the above table it is observed that debt equity ratio is having fluctations in the

Year 2004 it is increased due to increase in debt equity ratio but it is decreased in the

year 2005, 2006,2008 due to increased in the year 2007 debt total borrowings

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TURN OVER RATIO (T.O.R):

These ratios are called performance ratios. Activity ratios highlight the operational efficiency of the business concern. (a) Working capital turn over ratio: Working capital turnover ratio measures the effective utilization of working capital. Working capital turn over ratio = sales

Net working capital Net working capital = current assets –current liabilities. CHART NO: 6 Calculation of WCTOR during the year 2003-2008 (Rs in crores)

years sales Net working capital

Ratio Trend

2003 236.26 24.42 9.67 -2004 247.74 32.2 7.69 decrease2005 247.83 30.4 8.15 Increase2006 363.17 44.02 8.25 Increase2007 491 46.88 10.47 increase2008 635.47 74.95 8.47 decrease


GRAPH NO: 6

9.677.69 8.15 8.25

10.478.47

0

5

10

15

2003 2004 2005 2006 2007 2008

YEARS

WCTOR

INTERPRETATION:

From the above table it is observed that the working capital turnover ratio is showing fluctuation during the study period. It is observed that it is high in the year 2004-2007 due to increase in the sales & decrease in the working capital.

CAPITAL TURN OVER RATIO (C.T.O.R):

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This ratio determines capital turnover of the company, which will determine capacity of sales, shares & many more. cost of sales C.T.O.R = ------------------------- Capital employed

CHART NO: 7 Calculation of C.T.O.R during 2003-2008(RS in crs)

years sales Capital employed Ratio Trend

2003 236.26 36.83 6.41 -

2004 247.74 44.75 1.06 Decrease

2005 247.83 41.34 5.99 Increase

2006 363.17 53.37 5.84 Decrease

2007 491 62.18 7.89 Increase

2008 635.47 94.3 6.73 decrease

SOURCE: completed from the annual reports of ‘Vimal oil & foods Ltd”.GRAPH NO: 7

Capital turnover Ratio

6.41

1.06

5.99 5.84

7.89

6.73

0123456789

2003 2004 2005 2006 2007 2008

Years

Ratio

INTERPRETATION: From the above table it is observed that the capital turnover ratio is increased &

decreased in 2008 .It is due to increase in sales and decrease in capital employed.

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FIXED ASSETS RATIO (F.A.R):

The ratio establishes the relationship b/n fixed assets & long term funds. The objective of calculating this ratio is to ascertain the proportion of long term funds invested in fixed assets. F.A.R = fixed assets Long term funds CHART NO: 8 calculation of fixed assets ratio during 2003-2008(RS in crs)

year Fixed assets Long term funds

Ratio Trend

2003 15.22 39.64 0.38 -2004 15.36 47.56 0.32 Decrease2005 13.67 44.07 0.31 Decrease2006 11.92 55.94 0.21 Decrease2007 18.24 65.12 0.28 increase2008 22.97 97.92 0.23 decrease


GRAPH NO : 8

0.380.32 0.31

0.210.28

0.23

00.10.20.30.4

2003 2004 2005 2006 2007 2008

YEARS

FAR

INTERPRETATION:

From the above table it is observed that fixed assets ratio showing fluctuations. In the year 20043the fixed assets ratio is high because of increasing of fixed assets. In the year 2006 it is low because of decreasing of fixed assets.

RETURN ON TOTAL ASSETS (ROTA):

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The ratio calculated to measure the productivity of total assets. The term

fictitious assets refer to preliminary expenses, debit balance of profit and loss account and

other similar losses shown on Balance sheet assets side.

PAT

ROTA =------------------------------------ *100

Total assets

TABLE NO: 9 Calculation of ROTA during the year 2003-2008 (Rs in crores)

Years PAT Total assets Ratio Trend

2003 1.28 46.86 0.02 -2004 1.23 55.28 0.02 constant2005 1.05 60.98 0.o1 decrease2006 2.02 84.98 0.02 increase2007 3.43 144.37 0.02 constant2008 5.58 146.12 0.03 increase


GRAPH NO : 9

46.86 55.28 60.9884.98

144.37146.12

0

50

100

150

2003 2004 2005 2006 2007 2008

YEARS

ROTA

INTERPRETATION:

From the above table it is observed that return on total assets is fluctuating during

the study priod.This is due to fluctuation in PAT and increase in total assets.

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PROFITABULITY RATIOS:

Ability to make maximum profit from optimum utilization of resources by a

business concern is termed as “profitability”.

(1)RETURN ON INVESTMENT (ROI):

This ratio is called “overall profitability ratio” or “Return on capital employed”. It

measures the sufficiency or otherwise of profit in relation in capital employed.

Operating profit

ROI =------------------------------------ *100

Capital employed

CHART: 10 Calculation of ROI during the year 2003-2008 (Rs in crores)Years Operating

profitCapital employed Ratio Trend

2003 1.28 36.83 3.47 -2004 1.23 44.75 2.74 Decrease

2005 1.05 41.32 2.53 Decrease2006 2.02 53.37 3.78 Increase2007 3.43 62.18 5.51 Increase2008 5.58 94.3 5.91 Increase SOURCE: completed from the annual reports of ‘Vimal oil & foods Ltd”.

GRAPH NO : 10

3.472.74 2.53

3.78

5.515.91

0

1

2

3

4

5

6

Ratio

2003 2004 2005 2006 2007 2008

Years

ROI Ratio

INTERPRETATION:

From the above table it is observed that return on investment ratio it is decreased in the year 2004 to 2005 and it increased from the year 2006 to 2008.This is due to fluctuations in operating profit and increase in capital employed.

INTEREST COVERAGE RATIO (ICR):

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This ratio establishes the relationship between profit before interest and tax and Interest.

Operating Profit Interest Coverage Ratio = ------------------------ Interest

Operating Profit =PBIT

CHART : 11 Calculation of ICR during the year 2003-2008 (Rs in crores)

Years pbit Interest Ratio Trend2003 4.1 0.27 15.18 -

2004 3.93 0.7 5.61 DECREASE2005 4.84 0.68 7.11 INCREASE2006 6.21 0.53 11.71 INCREASE2007 9.89 1.61 6.14 DECREASE2008 14.64 2.18 6.71 INCREASE


GRAPH NO: 11

15.18

5.61 7.1111.71

6.14 6.71

05

101520

2003 2004 2005 2006 2007 2008

YEARS

ICR

INTERPRETATION:From the above table it is observed that interest coverage ratio is having fluctuating from the year 2003 to 2008 year it is decreased in the year 2004 & 2007 due to increase the year 2005,2006 2008 year .

NET PROFIT RATIO(NPR):

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This ratio is called net profit sales ratio it is a measures of management’s

efficiency operating the business successfully from the owner’s point of view.Net profit

includes non operating incomes and profits.

Net profit after tax

NET PROFIT RATIO =----------------------------------*100

Net sales

CHART: 12 Calculation of NPR during the year 2003-2008 (Rs in crores)

Years PAT Net sales Ratio Trend

2003 1.28 236.26 0.54 -2004 1.23 247.74 0.49 decrease2005 1.05 247.83 0.42 decrease2006 2.02 363.17 0.55 increase2007 3.43 491 0.69 increase2008 5.58 635.47 0.87 increase


GRAPH NO: 12

0.54 0.49 0.420.55

0.690.87

0

0.5

1

2003 2004 2005 2006 2007 2008

YEAR

NPR

INTERPRETATION:

From the above table it is observed that net profit ratio decreased in the year

2004 to 2005 and it increased from the year 2006-2008. This is due to fluctuations in

PAT and increase in netsales.

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SIMPLE CORRELATION TABLE

YEARS WCTR CTR ICR ROI

2003 9.67 3.47 15.18 3.47

2004 7.69 2.74 5.61 2.74

2005 8.15 2.53 7.11 2.53

2006 8.25 3.78 11.71 3.78

2007 10.47 5.51 6.14 5.51

2008 8.47 5.91 6.71 5.91

Coefficient of

correlation

0.0851

0.080 0.579 -

INTERPRITATION:

The coefficient of correlation between WCR and ROI is 0.0851.This shows that

they are moving in same/opposite direction.As thers is a 100% change in WCR leads to

100% change in ROI negatively/positively.

TREND ANALYSIS

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The table shows the estimated values during 2003-2008

YEAR CURRENTRATIO PROPRIETORY

RATIO

NETPROFIT

RATIO

ROI

2003 5.45 0.21 0.54 3.47

2004 8 0.19 0.49 2.74

2005 3.25 0.18 0.42 2.53

2006 2.69 0.17 0.55 3.78

2007 0.59 0.10 0.69 5.51

2008 1.03 1.73 0.87 5.91

Estimated

value for

2009

6.7 1.84 0.423 23.94

* = ESTIMATED VALUES

The forecasted value of cueent ratio for 2009 is 6.7

The forecasted value of proprietory ratio for 2009 is 1.84

The forecasted value of netprofit ratio for 2009 is 0.423

FINDINGS

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The current is fluctuation the year current ratio is also decreased in the year 2005

to fluctuating the year due to increased 2004 & 2008 year.

The quick ratio it is observed decreased in the year 2005 to 2007 fluctuating the

year due to increased the year 2004 &2008 year of the quick ratio.

They absolute quick ratio is observed is decreased in the year 2004 to 2008 but it

is increased in 2007 year.

The proprietary ratio share holder funds it is observed that ratio decreased in the

year 2004 to 2007.due to increase in 2008 year.

The dept equity ratio is having fluctuations in the year 2004. it is increased due to

increase indebt equity ratio to increased in the years 2007 debt total borrowings.

The working capital turn over ratio it is observed that turn over ratio is decreased

from the year 2004 and 2008 due to increased in the year 29\005 to 2007 year of

the working capital turn over ratio.

It is observed that capital turn over ratio is decreased from the year 2004 and 2008

year due to increased in the year 2005 to 2007 year capital turn over ratio.

The return on total asset it is observed that the ratio constant the years 2004 and

2008 year due to decreased in the 2005 year. But only increased in 2006 and 2008

year.

The fixed assets ratio showing fluctuations. In the year 20043the fixed assets ratio

is high because of increasing of fixed assets. In the year 2006 it is low because of

decreasing of fixed assets.

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The interest coverage ratio is having fluctuating from the year 2003 to 2008

year it is decreased in the year 2004 & 2007 due to increase the year 2005,2006

2008 year .

It is observed that the netprofit ratio decreased in the year 2004 and 2005 due to

increased in the year 2006 to 2008 of net profit ratio.

CONCLUSION

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The study period reveals that the liquidity position of Vimal oil & food ltd

results are more of standard norms .Return on shareholders funds is more

and the Return on investment is also more because the company having

more operating due the company is in good position . The coefficient of

correlation between the working capital turn over ratio ,capital turn over

ratio ,and return on investment ratio is positive it means that the company

is in a good positio is good for that we can conclude that the company

should more concentrate on the liquidity area by concentrating on the

liquidity area the company well get the profits in the lesser time period . The

forecasted statistical values are also indicating the company well get the

good financial profits. Finally I can conclude that the vimal oil& food ltd

well become very good in the future.

AITS, Rajampet 32

Documents

company analysis report on M/s Vimal Oil & Foods ltd