CHAPTER 4
RATIO ANALYSIS AND COMPARISON OF GLASSLINE
VESSELS AND ITS ALLIED COMPANIES IN INDIA
4.1
INTRODUCTION
Ratio analysis is one of the techniques of financial analysis where ratios are used as a
yardstick for evaluating the financial condition and performance of a firm. Analysis and
interpretation of various accounting ratios gives a skilled and experienced analyst, a better
understanding of the financial condition and performance of the firm than what he could
have obtained only through a perusal of financial statements.
The most important task of a financial manager is to interpret the financial information in
such a manner that it can be well understood by the people, who are not well versed in
financial information figures. The technique, by which it is so done, is known as 'Ratio
Analysis.'
The point to be noted is that a ratio reflecting a quantitative relationship helps to form a
qualitative judgment. A comparative study of the relationships between various items of
financial statements reveals the profitability, liquidity, solvency as well as the overall
position of the concern. As ratios are simple to calculate and easy to understand, there is
tendency to employ them profusely. The absolute accounting figures reported in these
financial statements do not provide a meaningful understanding of the performance and
financial position of the concern. An accounting figure conveys meaning when it’s related
to some other relevant information. Ratios are useful indication of the progress position
and prospects of a business unit in which the many parties are interested in different
ways.
Meaning
Ratios are relationships expressed in mathematical terms between figures, which are
connected with each other in some manner. Obviously, no purpose will be served by
comparing two sets of figures, which are not at all connected with each other. Moreover,
absolute figures are also unfit for comparison.
'Ratio' is relationship between two or more variable expressed in,
1. Percentage,
2. Rate
3. Proportion.
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Ratio analysis is an important technique of financial analysis. It depicts the efficiency or
short-fall of the organization in the form of trend analysis.
4.2
STANDARDS OF COMPARISON
A single ratio in itself does not indicate favorable or unfavorable financial condition. It
should be compared with some standard. Standards of comparison may consist of:
1. Time Series Analysis / Past Ratios
Past ratios are the ratios calculated from the past financial statements of the same firm. By
comparing current years ratios with past ratio the improvement or deterioration in firm's
performance over the period can be studied. It is also known as Time Series Analysis.
2. Cross-sectional Analysis / Competitor's Ratios
Competitor’s Ratios are ratios of some selected firms, especially the most progressive
competitor, at the same point in time. By comparing firm’s ratios with competitor's ratios
the firm’s financial position in respect to competitors can be known.
3. Industry Analysis / Industry Ratios
Industry Ratios are the ratios of industry to which the firm belongs. By comparing firms
ratios with industry average ratios the firm's position vis a vis other firms in the industry
can be understood.
4. Proforma Analysis / Projected Ratios
Projected Ratios are the ratios developed by using the projected financial statements of
the firm. The comparison of current or past ratios with future ratios indicates the firm's
relative strength and weaknesses in the past and in the future.
4.3
PRECAUTIONS TO BE TAKEN WHILE USING RATIOS
1. Standard for Comparison
Ratios have meaning only if they are compared with some standards. Usually it is
recommended that ratios should be compared with industry average, but industry average
data is not easily available in India. Even while comparing ratios with the past ratios
forecast may not be correct since several factors like market conditions, management
policies etc. may affect the future operations.
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2. Price Level Changes
Financial analysis based on accounting ratios will give misleading results if the effects of
changes in price level are not taken into account. The accounting data, presented in
financial statements is assumed to remain constant. In fact, prices change over years
which affect accounting earnings. Therefore, financial statements should be adjusted as
per price level changes. For this current purchasing power and current cost accounting are
quite helpful.
3. Historical Data
The ratios indicate what has happened in the past because it is calculated on the basis of
historical financial statements. Analysts are more interested in future and these ratios may
not necessarily reply the firm's financial position and performance in future.
4. Ratios Alone Are Not Adequate
Ratios are only indicators, they cannot be considered as the final regarding financial
position of the business. Other things also have to be seen. A high current ratio not
necessarily mean sound liquidity position if most of current assets comprise outdated
stocks.
5. Window Dressing
Window dressing means manipulation of accounts in a way so as to conceal vital facts
and present financial statements in a way to show better position than what it actually is.
In this case ratios cannot indicate true situation the quality of ratios depends on accuracy
of accounts.
4.4
IMPORTANCE OF RATIO ANALYSIS
The ratio analysis is the most powerful tool of the financial analysis. It is a quantitative
technique for assessing the financial health of a unit from the accounting data. It helps to
describe the significant relationship between two comparable figures in the financial
statements with the help of Ratios, one can determine.
a. The ability of the firm to meet its current obligations.
b. The extent to which the firm has used its long term solvency by borrowing
funds.
c. The efficiency with which the firm is utilizing its various assets in generating
sales revenue.
d. The overall operating efficiency and performance of the firm.
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It has been realized that the short term and long term financial position and the
profitability of the firm are tested in every kind of financial analysis, the emphasis would
differ. Some ratios are more important in one kind of analysis while other ratios are
important in a different kind of analysis.
Management has to protect the interests of all concerned parties, creditors, owners etc.
They have to ensure some minimum operating efficiency and keep the risk of the firm at
minimum level. Their survival depends upon their operating performance from time to
time management used Ratio Analysis to determine the firm’s financial strengths and
weaknesses, and accordingly takes actions to improve the firm's position.
4.5
LIMITATIONS OF RATIO ANALYSIS
The ratio analysis is a very useful tool to evaluate the financial position and performance
of a business. The following are some of the limitations of the ratio analysis.
a. It is difficult to find out a proper basis of comparison. Usually, it is recommended that
ratio should be compared with the industry average. But the industry averages are not
equally available.
b. The situations of two companies are never the same. Similarly, the factors influencing
the performance of a company in one year may change in another year. Thus,
comparison of the ratios of two companies becomes difficult.
c. The interpretation and comparison of ratios are also rendered invalid by the changing
value of money. The accenting figures, presented in a financial statement, one
expressed in a monetary unit which is assumed to remain constant, in fact, prices
changes over years and as a result assets acquired at different dates will be expressed
at different rupees in the balance sheet. This makes comparison meaningless.
d. In practice, the difference in the definitions of items in the balance sheet and the
income statement make the interpretation of ratios difficult.
e. The ratios calculated at a point of time are less informative and defective as they
suffer from short term changes.
f. The basis to calculate ratios are historical financial statements. The financial analysis
is more interested in what happens in future, while the ratios, indicate what happened
in the past. The management has information about the company's future plans and
policies and therefore is able to predict future happening to a certain extent. But the
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outside analyst has to rely on the past ratios, which may not necessarily reflect the
firm's financial position and performance in future.
4.6
TYPES OF RATIO ANALYSIS
Several ratio’s calculated from the accounting data can be grouped into various classes
according to the financial activity or function to be evaluated. The parties which generally
undertake financial analysis all short and long term creditors, owners and management
short term auditors main interest in liquidity position or the short term solvency of the
firm. Long term auditors on the other hand, all are more interested in the long term
solvency and profitability and the analysis of the firms performance. They have to profit
the interest of all parties and see that the firm grows profitably.
Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic
use of ratio to interpret the financial statement, so that the strength and weakness of a firm
as well as its historical performance and current financial conditions can be determined.
The term ratio refers to the numerical or quantitative relationship between two items. A
ratio is calculated by dividing one items of relation with other.
Several ratio's calculated from the accounting data can be grouped into various classes
according to the financial activity or function to be evaluated. In the view of the
requirement of the various users of ratio we may classify term in to the following four
important categories.
A. Liquidity Ratio
B. Activity Ratio
C. Profitability Ratio
D. Capital Structure Ratio
A.
LIQUIDITY RATIO
The important of adequate liquidity in the sense of ability meet current or short term
obligation when they become due to for payment can hardly be over stressed. In fact,
liquidity is a pre-requisite for the very survived of the firm. The short creditors of the firm
are interested in the short term solvency as liquidity of a firm.
These ratios indicate the position of liquidity. A firm should ensure that it does not suffer
from lack of liquidity and also it does not have excess liquidity lack of liquidity loads will
result in poor credit worthiness. A very high degree liquidity is also had idle asset earn
65
nothing. Firms fund will be unnecessarily lied up as current assets. Therefore it is
necessary to stick proper balance between high liquidity and lack of liquidation.
1. Current Ratio
The ratio is used to assess the firm’s ability to meet its short-term liabilities on time. It is
generally believed that 2:1 ratio shows a comfortable working capital position. However
this rule should not be taken as a hard & fast rule, because ratio that is satisfactory for one
company may not be satisfactory for other. It means that current assets of an organization
should, at least be twice of its current liabilities. The higher the ratio, the better it is.
Current Assets
Current Ratio =
Current Liabilities
Current Assets = Cash & Bank Balance + Stock + Debtors + Bills Receivable + Prepaid
Expenses + Investments readily convertible into cash + Loans and Advances
Current Liabilities = Creditors + Bills Payable + Bank Overdraft + Unclaimed Dividend +
Provision for Taxation + Proposed Dividend]
Table 4.1: Current Ratio of selected Glassline Companies
Year
GMM
SGEL
NILE
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
1.41
100.00
1.21
100.00
1.03
100.00
1997
1.49
105.67
1.15
95.04
2.89
280.58
1998
1.43
101.42
1.29
106.61
3.84
372.82
1999
1.39
98.58
1.28
105.79
3.49
338.83
2000
1.76
124.82
1.17
96.69
3.19
309.71
2001
2.00
141.84
1.10
90.91
2.91
282.52
2002
1.63
115.60
0.97
80.17
2.06
200.00
2003
1.64
116.31
0.92
76.03
1.74
168.93
2004
1.62
114.89
0.93
76.86
1.67
162.14
2005
1.35
95.74
0.94
77.69
1.49
144.66
2006
1.32
93.62
0.96
79.34
1.46
141.75
2007
1.42
100.71
1.02
84.30
1.46
141.75
2008
1.60
113.48
1.08
89.26
1.49
144.66
2009
1.78
126.24
1.09
90.08
1.34
130.10
2010
2.01
142.55
1.05
86.78
1.25
121.36
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
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Chart 4.1: Current Ratio of selected Glassline Companies
4.50
Current Ratio
4.00
3.50
3.00
2.50
GMM
2.00
SGEL
1.50
NILE
1.00
0.50
0.00
It is realized from the table 4.1 and chart 4.1 that the current ratio was showing increasing
trend during 1996-2001 and 2005-2010 for GMM. The same pattern was also seen in
SGEL. NILE shows increasing pattern during 1996-2000 and then decreasing trend was
seen during 2001-2010. In NILE highest current ratio was appeared in 1998-99. Overall
NILE is better than other companies.
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Table 4.2: Current Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
1.33
100.00
1.29
100.00
1.40
100.00
1.39
100.00
1.45
100.00
1.29
100.00
1.47
100.00
-
-
1.30
100.00
1.19
100.00
1997
1.26
94.74
1.32
102.33
1.36
97.14
1.35
97.12
1.45
100.00
1.03
79.84
1.46
99.32
-
-
2.08
160.00
1.15
96.64
1998
1.20
90.23
1.34
103.88
1.42
101.43
1.30
93.53
1.41
97.24
0.86
66.67
1.30
88.44
-
-
0.97
74.62
1.22
102.52
1999
1.11
83.46
1.33
103.10
1.59
113.57
1.31
94.24
1.40
96.55
0.92
71.32
1.31
89.12
1.69
100.00
0.63
48.46
1.23
103.36
2000
1.23
92.48
1.28
99.22
1.70
121.43
1.33
95.68
1.51
104.14
0.97
75.19
1.31
89.12
1.84
108.88
0.46
35.38
1.01
84.87
2001
1.22
91.73
1.22
94.57
1.46
104.29
1.18
84.89
1.57
108.28
0.83
64.34
1.27
86.39
1.77
104.73
0.37
28.46
0.80
67.23
2002
1.08
81.20
1.18
91.47
1.22
87.14
1.08
77.70
1.51
104.14
0.79
61.24
1.30
88.44
1.48
87.57
0.31
23.85
0.70
58.82
2003
1.12
84.21
1.12
86.82
1.19
85.00
1.15
82.73
1.37
94.48
1.03
79.84
1.29
87.76
1.17
69.23
0.42
32.31
0.66
55.46
2004
1.20
90.23
1.17
90.70
1.29
92.14
1.13
81.29
1.37
94.48
1.35
104.65
1.25
85.03
1.03
60.95
0.77
59.23
0.75
63.03
2005
1.53
115.04
1.31
101.55
1.36
97.14
1.15
82.73
1.25
86.21
1.41
109.30
1.19
80.95
1.10
65.09
1.00
76.92
0.99
83.19
2006
1.78
133.83
1.37
106.20
1.36
97.14
1.29
92.81
1.20
82.76
1.38
106.98
0.99
67.35
1.03
60.95
1.15
88.46
1.18
99.16
2007
1.59
119.55
1.38
106.98
1.31
93.57
1.26
90.65
1.22
84.14
1.09
84.50
0.98
66.67
0.88
52.07
1.08
83.08
1.36
114.29
2008
1.66
124.81
1.51
117.05
1.28
91.43
1.22
87.77
1.23
84.83
0.91
70.54
1.37
93.20
1.11
65.68
1.03
79.23
1.60
134.45
2009
1.94
145.86
1.76
136.43
0.96
68.57
1.29
92.81
1.25
86.21
0.94
72.87
1.58
107.48
1.25
73.96
0.92
70.77
1.72
144.54
2010
2.20
165.41
1.72
133.33
0.81
57.86
1.34
96.40
1.22
84.14
0.86
66.67
1.53
104.08
1.00
59.17
0.97
74.62
1.77
148.74
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.2 shows the current ratios of selected allied companies in last fifteen years. On an average, current ratio of CUMI and ELECON companies are better than
other allied companies. All companies showed flat trend throughout the study period. In 2010, AWL reported the highest current ratio in comparison to other
selected allied companies.
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Table 4.3: Comparison of Current Ratio between Glassline Companies
H0 : There is no significant difference in mean current ratio between selected companies
H1 : There is significant difference in mean current ratio between selected companies
Descriptive Statistics
95% Confidence
N
Company
Std.
Mean
Deviation
Std. Error
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
1.5900
.22071
.05699
1.4678
1.7122
SGEL
15
1.0773
.12337
.03185
1.0090
1.1457
NILE
15
2.0873
.91613
.23654
1.5800
2.5947
Total
45
1.5849
.67918
.10125
1.3808
1.7889
ANOVA test
Source of variation
Sum of Squares
df
Mean Square
F
p-value
Between Groups
7.651
2
3.826
12.707
.000
Within Groups
12.645
42
.301
20.297
44
Total
The table 4.3 shows mean current ratio of selected companies. The descriptive table
shows that mean value of this ratio was higher in NILE company followed by GMM and
SGEL. To check the statistical difference in these mean values researcher had applied
ANOVA test. In ANOVA table, applying this test corresponding F-value and its p-values
were obtained. F-value was 12.707 and p-value was 0.000. As p-value in above table was
less than 0.05, above null hypothesis was rejected and concluded that there is a significant
difference in mean Current Ratio between selected companies.
2. Quick Ratio
The measure of absolute liquidity may be obtained by comparing only cash and bank
balance as well as readily marketable securities with liquid liabilities. This is a very
exacting standard of liquidity and it is satisfactory if the ratio is 0.5: 1. It is computed by
dividing the value of quick assets by liquid liabilities. Here, quick assets do not include
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both stock and debtors, because payments from debtors would not generally be received
immediately when liquid liabilities are to be paid. Thus the quick assets comprise only
cash balance, bank balance and readily marketable securities only. Some writers call this
ratio as Absolute Liquidity Ratio, (or Absolute Cash Ratio).
Quick Assets
Quick Ratio =
Liquid Liabilities
Table 4.4: Quick Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
0.19
100.00
0.02
100.00
0.11
100.00
1997
0.10
54.57
0.03
145.71
0.07
67.97
1998
0.66
349.59
0.05
277.72
0.14
126.74
1999
0.22
118.60
0.06
304.78
0.11
104.29
2000
0.22
117.90
0.10
496.31
0.10
90.11
2001
0.24
126.52
0.11
552.35
0.13
116.99
2002
0.22
119.07
0.16
827.03
0.11
99.51
2003
0.57
304.19
0.14
732.38
0.13
113.93
2004
0.07
39.30
0.15
749.62
0.08
73.86
2005
0.04
23.50
0.14
688.91
0.11
97.40
2006
0.05
27.99
0.37
1908.94
0.11
98.82
2007
0.07
37.30
0.33
1671.73
0.09
82.56
2008
0.04
23.08
0.15
740.11
0.13
118.38
2009
0.07
34.76
0.20
1017.24
0.11
97.63
2010
0.09
46.38
0.16
828.57
0.04
34.67
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
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Chart 4.2: Quick Ratio of selected Glassline Companies
0.7
Quick Ratio
0.6
0.5
0.4
GMM
0.3
SGEL
NILE
0.2
0.1
0
It reveals from the table 4.4 and chart 4.2 that the quick ratio of GMM was showing
increasing trend during 1996-2003 and after that it was decreasing. In SGEL, the quick
ratio was showing increasing trend during 1996-2007 and after that it was declined. NILE
shows flat pattern during study period. NILE shows better performance of quick ratio as
compared to other companies and hence it is better.
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Table 4.5: Quick Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
0.19
100.00
0.19
100.00
0.42
100.00
0.00
100.00
0.04
100.00
0.04
100.00
0.13
100.00
-
-
1.06
100.00
0.13
100.00
1997
0.61
314.48
0.18
97.44
0.33
78.93
0.11
3187.09
0.04
104.43
0.04
119.99
0.10
76.53
-
-
1.92
180.53
0.06
43.59
1998
0.39
199.89
0.09
46.75
0.50
118.25
0.00
69.08
0.03
70.78
0.07
191.54
0.11
86.07
0.08
100.00
0.68
63.83
0.12
88.11
1999
0.18
92.33
0.09
48.00
0.36
86.61
0.00
50.64
0.02
52.69
0.03
97.95
0.20
150.00
0.06
67.59
0.06
5.64
0.07
53.65
2000
0.22
113.30
0.10
56.12
0.33
77.77
0.00
37.91
0.15
360.59
0.05
145.86
0.06
41.93
0.09
105.18
0.04
3.43
0.08
60.91
2001
0.21
110.45
0.11
58.92
0.19
44.91
0.11
3247.74
0.03
74.96
0.03
92.83
0.06
48.21
0.10
118.46
0.02
1.73
0.14
102.71
2002
0.72
373.30
0.10
55.45
0.37
87.66
0.10
2806.68
0.03
83.95
0.02
68.91
0.21
160.31
0.11
132.74
0.01
1.17
0.09
65.96
2003
0.23
120.00
0.08
42.25
0.30
72.43
0.12
3565.15
0.03
63.83
0.04
105.02
0.05
37.50
0.07
83.18
0.18
16.85
0.11
85.70
2004
0.22
113.91
0.08
43.46
0.35
83.24
0.11
3205.51
0.03
63.67
0.07
203.49
0.99
743.36
0.09
107.56
0.06
6.10
0.46
346.36
2005
1.87
972.45
0.32
169.31
0.17
40.55
0.17
4856.82
0.06
134.12
0.25
722.06
0.24
178.34
0.05
60.16
0.06
5.51
1.28
962.90
2006
0.76
395.34
0.09
50.00
0.33
77.97
0.20
5577.35
0.12
283.32
0.29
831.03
0.08
59.63
0.07
79.01
0.12
11.54
1.19
892.53
2007
0.18
93.73
0.09
47.48
0.39
93.98
0.15
4326.88
0.05
124.18
0.13
357.04
0.49
368.72
0.54
655.12
0.07
6.93
1.78
1336.48
2008
0.29
148.02
0.06
31.94
0.21
49.63
0.40
11369.22
0.02
55.73
0.12
350.02
0.47
354.96
0.13
153.20
0.06
5.82
2.15
1613.68
2009
0.28
146.54
0.09
45.85
0.38
91.73
0.38
10835.37
0.15
363.73
0.20
568.56
0.27
199.27
0.02
25.15
0.04
3.32
2.38
1783.28
2010
0.55
287.63
0.08
41.17
0.06
14.12
0.10
2819.50
0.10
244.24
0.41
1161.11
0.14
102.87
0.02
22.25
0.13
12.09
2.05
1540.00
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.5 shows the quick ratios of selected allied companies in last fifteen years. On an average, quick ratio of SAIL showed best performance among all allied
companies and hence SAIL is the best company among selected allied companies. All other companies showed almost flat trend throughout the study period.
72
Table 4.6: Comparison of Quick Ratio between Glassline Companies
H0 : There is no significant difference in mean quick ratio between selected companies.
H1 : There is significant difference in mean quick ratio between selected companies.
Descriptive Statistics
95% Confidence
N
Company
Std.
Mean
Deviation
Std. Error
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
0.19
0.18
0.04
0.08
0.29
SGEL
15
0.14
0.09
0.02
0.08
0.19
NILE
15
0.10
0.02
0.00
0.09
0.11
Total
45
0.14
0.12
0.01
0.10
0.18
ANOVA test
Source of variation
Sum of Squares
df
Mean Square
F
p-value
Between Groups
0.055
2
0.027
1.787
0.180
Within Groups
0.643
42
0.015
0.697
44
Total
The table 4.6 shows mean quick ratio of selected companies. The descriptive table shows
that mean value of this ratio was higher in GMM company followed by SGEL and NILE.
To check the statistical difference in these mean values researcher had applied ANOVA
test. In ANOVA table, applying this test corresponding F-value and its p-values were
obtained. F-value was 1.787 and p-value was 0.180. As p-value in the table was more
than 0.05, above null hypothesis was accepted and concluded that there is no significant
difference in mean quick ratio between selected companies.
3. Liquidity Ratio
A variant of current ratio is the liquid ratio or quick ratio which is designed to show the
amount of cash available to meet immediate payments. It is obtained by dividing the
liquid assets by liquid liabilities.
73
Liquid assets are obtained by deducting stock in trade from current assets. Stock is not
treated as a liquid asset because it cannot be readily converted into cash as and when
required. The current ratio of a business does not reflect the true liquid position. if its
current assets consist largely of stock in trade.
The liquid liabilities are obtained by deducting bank overdraft from current liabilities.
Bank overdraft is not included in liquid liabilities because bank overdraft is not likely to
be called on demand and is treated as a sort of permanent mode of financing. Hence, it is
not treated as a quick liability.
Liquid Assets
Liquid Ratio =
Liquid Liabilities
Table 4.7: Liquid Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
0.68
100.00
0.55
100.00
1.66
100.00
1997
3.25
479.35
0.33
60.50
3.18
191.00
1998
5.11
752.56
0.52
94.68
2.71
163.14
1999
3.68
542.52
0.79
143.68
2.20
132.53
2000
2.17
319.64
0.97
177.25
2.25
135.55
2001
2.16
317.75
1.44
263.02
2.15
129.24
2002
1.34
196.81
1.05
191.99
2.28
136.98
2003
1.62
239.22
1.17
214.01
2.07
124.24
2004
1.18
173.49
0.86
156.97
1.07
64.18
2005
1.17
171.94
0.75
136.79
0.74
44.45
2006
1.49
218.99
1.42
258.21
1.51
90.81
2007
1.28
189.23
1.39
253.10
1.32
79.20
2008
1.33
196.45
1.28
232.28
1.13
67.77
2009
1.11
162.86
0.85
154.20
0.79
47.54
2010
1.49
219.19
0.60
108.80
0.66
39.51
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
74
Chart 4.3: Liquidity Ratio of selected Glassline Companies
6
Liquidity Ratio
5
4
GMM
3
SGEL
2
NILE
1
0
It reveals from the table 4.7 and chart 4.3 that the liquidity ratio of GMM was showing
decreasing trend throughout the study period. In SGEL, the liquidity ratio was showing
overall increasing trend during study period. But NILE showed decreasing pattern during
study period. SGEL shows better performance of liquidity ratio as compared to other
companies and hence it is better.
75
Table 4.8: Liquidity Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
1.73
100.00
1.47
100.00
2.43
100.00
1.65
100.00
1.12
100.00
1.15
100.00
3.07
100.00
-
-
1.11
100.00
1.07
100.00
1997
3.93
226.87
1.75
119.21
3.24
133.45
1.87
113.06
1.30
116.20
1.15
100.03
2.82
91.84
-
-
2.22
199.44
1.05
98.22
1998
1.55
89.51
1.10
74.70
3.97
163.51
1.87
113.11
1.27
113.64
0.70
60.68
3.93
128.30
2.63
100.00
1.56
140.57
1.11
103.72
1999
1.26
72.64
1.19
81.25
3.95
162.68
1.51
91.71
1.43
127.34
1.13
98.62
3.13
102.17
3.06
116.32
0.73
65.95
1.12
104.99
2000
1.43
82.68
1.06
72.26
3.79
156.17
1.25
76.03
1.58
141.25
0.81
70.33
2.15
70.08
2.11
80.39
0.59
53.35
0.75
70.50
2001
1.15
66.57
1.15
78.16
4.09
168.56
1.26
76.09
1.70
151.99
0.70
61.27
2.43
79.19
2.46
93.72
0.53
47.89
0.79
73.91
2002
1.22
70.10
1.02
69.17
3.14
129.49
1.19
72.11
1.38
123.03
0.48
41.76
2.73
89.11
1.96
74.59
0.39
35.35
0.65
60.92
2003
1.11
64.09
0.82
55.98
5.68
234.11
1.18
71.48
1.27
113.30
1.17
101.70
2.45
79.89
1.41
53.71
0.50
44.99
0.79
73.78
2004
1.02
58.80
0.89
60.40
5.47
225.42
1.24
75.42
0.90
80.79
1.09
94.57
4.16
135.63
2.07
78.87
0.68
61.01
1.18
109.93
2005
2.65
152.98
1.67
113.28
5.03
207.17
1.28
77.52
0.96
85.76
1.48
129.06
1.49
48.65
1.46
55.54
1.03
92.27
2.12
197.73
2006
2.34
135.09
2.06
139.97
5.20
214.27
1.36
82.70
1.27
113.38
0.97
84.09
2.48
80.97
1.43
54.20
1.19
107.16
1.81
169.61
2007
1.59
91.89
1.93
131.05
4.04
166.28
1.34
81.08
1.76
157.17
0.62
53.92
2.77
90.39
2.17
82.40
0.88
79.22
2.54
237.71
2008
1.91
110.35
1.53
104.25
2.39
98.63
1.36
82.52
1.69
151.19
0.56
49.03
4.51
147.17
1.59
60.61
0.77
69.50
3.04
284.18
2009
1.58
91.04
1.65
112.33
2.54
104.60
1.32
80.29
1.49
132.77
0.97
83.98
3.88
126.52
1.57
59.67
0.55
49.90
3.19
298.03
2010
2.29
132.27
1.54
104.80
2.02
83.18
1.29
78.42
1.58
141.04
1.23
106.76
2.56
83.38
2.10
79.73
0.84
76.01
2.75
256.86
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.8 shows the liquidity ratios of selected allied companies in last fifteen years. On an average, liquidity ratio of GEE and SAIL showed increasing pattern
whereas all other companies showed almost flat trend throughout the study period. Thus GEE and SAIL are better than other selected allied companies.
76
Table 4.9: Comparison of Liquidity Ratio between Glassline Companies
H0 : There is no significant difference in mean liquidity ratio between selected companies.
H1 : There is significant difference in mean liquidity ratio between selected companies.
Descriptive Statistics
95% Confidence
N
Company
Std.
Mean
Deviation
Std. Error
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
1.93
1.19
0.30
1.27
2.59
SGEL
15
0.93
0.35
0.09
0.73
1.12
NILE
15
1.71
0.76
0.19
1.29
2.13
Total
45
1.52
0.93
0.13
1.24
1.80
ANOVA test
Source of variation
Sum of Squares
df
Mean Square
F
p-value
Between Groups
8.376
2
4.188
5.875
0.006
Within Groups
29.939
42
0.713
38.315
44
Total
The table 4.9 shows mean liquidity ratio of selected companies. The descriptive table
shows that mean value of this ratio was higher in GMM followed by NILE and SGEL. To
check the statistical difference in these mean values researcher had applied ANOVA test.
In ANOVA table, applying this test corresponding F-value and its p-values were
obtained. F-value was 5.875 and p-value was 0.006. As p-value in above table was less
than 0.05, above null hypothesis was rejected and concluded that there a is significant
difference in mean liquidity ratio between selected companies.
B.
ACTIVITY OR EFFICIENCY RATIO
Funds of creditors and owners are invested in various assets to generate sales and profit.
The better the management of assets, better the amount of sales. Activity ratio is also
called as turnover ratio assets management ratio. They are called turnover ratio because
they indicates the speed with which assets are being converted or turned over in to
77
involves
a relationship between sales and assets generally reflects that assets are
managed well.
1. Debtors Turnover Ratio
Ratio of net credit sales to average trade debtors is called debtors turnover ratio. It is also
known as receivables turnover ratio. This ratio is expressed in times.
Accounts receivable is the term which includes trade debtors and bills receivables. It is a
component of current assets and as such has direct influence on working capital position
(liquidity) of the business. Perhaps, no business can afford to make cash sales only thus
extending credit to the customers is a necessary evil. But care must be taken to collect
book debts quickly and within the period of credit allowed. Otherwise chances of debts
becoming bad and unrealizable will increase. How effective or efficient is the credit
collection? To provide answer debtors turnover ratio or receivable turnover ratio is
calculated.
Net Credit Sales
Debtors Turnover Ratio =
Debtors + Bills Receivables
Figure of trade debtors for this purpose should be gross i.e. provision for bad and doubtful
debts should not be deducted from the amount of debtors. Receivables collection period
(also known as average collection period) is calculated and supplemented with the
receivables turnover ratio to help better understanding and communication.
Normally higher the debtors turnover ratio better it is. Higher turnover signifies speedy
and effective collection. Lower turnover indicates sluggish and inefficient collection
leading to the doubts that receivables might contain significant doubtful debts.
Receivables collection period is expressed in number of days. It should be compared with
the period of credit allowed by the management to the customers as a matter of policy.
Such comparison will help to decide whether receivables collection management is
efficient or inefficient.
78
Table 4.10: Debtors Turnover Ratio of selected Glassline Companies
Year
GMM
SGEL
NILE
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
9.71
100.00
45.14
100.00
6.02
100.00
1997
5.67
58.39
14.65
32.45
6.56
108.97
1998
3.05
31.41
9.09
20.14
7.59
126.08
1999
3.41
35.12
6.76
14.98
7.75
128.74
2000
3.50
36.05
4.72
10.46
6.69
111.13
2001
4.22
43.46
4.31
9.55
10.47
173.92
2002
5.16
53.14
4.48
9.92
11.42
189.70
2003
8.43
86.82
6.32
14.00
9.02
149.83
2004
9.01
92.79
6.95
15.40
9.42
156.48
2005
8.47
87.23
8.23
18.23
13.37
222.09
2006
8.34
85.89
7.55
16.73
9.86
163.79
2007
6.56
67.56
7.76
17.19
8.35
138.70
2008
5.91
60.87
6.38
14.13
11.48
190.70
2009
6.10
62.82
6.57
14.55
15.82
262.79
2010
6.22
64.06
11.48
25.43
18.49
307.14
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
79
Chart 4.4: Debtors Turnover Ratio of selected Glassline Companies
50
Debtors Turnover Ratio
45
40
35
30
25
GMM
20
SGEL
15
NILE
10
5
0
It is realized from the table 4.10 and chart 4.4 that in GMM, debtors turnover ratio was
increased during 1998-2004 and decreased in 2005-2010. The almost similar pattern was
seen in SGEL. NILE shows increasing pattern throughout the study period i.e. 1996-2010.
In NILE highest ratio was appeared in 2010. Overall NILE is better than other companies.
80
Table 4.11: Debtors Turnover Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
32.94
100.00
4.29
100.00
6.87
100.00
3.49
100.00
3.49
100.00
1.21
100.00
3.57
100.00
-
-
2.00
100.00
8.20
100.00
1997
27.97
84.91
3.54
82.52
6.58
95.78
2.94
84.24
2.71
77.65
2.75
227.27
3.45
96.64
-
-
18.40
920.00
7.14
87.07
1998
15.79
47.94
3.51
81.82
5.70
82.97
2.95
84.53
2.30
65.90
3.66
302.48
3.99
111.76
-
-
3.75
187.50
7.54
91.95
1999
11.99
36.40
3.03
70.63
4.76
69.29
2.99
85.67
2.83
81.09
3.47
286.78
2.96
82.91
4.86
100.00
2.11
105.50
7.91
96.46
2000
13.13
39.86
2.85
66.43
4.70
68.41
2.75
78.80
2.88
82.52
4.18
345.45
2.60
72.83
2.95
60.70
0.43
21.50
8.70
106.10
2001
16.86
51.18
2.86
66.67
5.05
73.51
2.50
71.63
2.75
78.80
4.39
362.81
2.25
63.03
3.91
80.45
0.40
20.00
9.32
113.66
2002
19.13
58.08
2.51
58.51
4.81
70.01
3.45
98.85
2.47
70.77
4.42
365.29
2.23
62.46
4.59
94.44
2.12
106.00
10.16
123.90
2003
28.74
87.25
3.22
75.06
4.82
70.16
3.51
100.57
2.90
83.09
11.36
938.84
3.51
98.32
6.70
137.86
4.59
229.50
12.63
154.02
2004
24.14
73.28
3.76
87.65
4.99
72.63
3.68
105.44
2.60
74.50
11.86
980.17
6.03
168.91
7.39
152.06
4.17
208.50
15.04
183.41
2005
43.59
132.33
4.07
94.87
5.30
77.15
4.16
119.20
3.76
107.74
15.11
1248.76
10.04
281.23
12.75
262.35
7.63
381.50
18.52
225.85
2006
29.81
90.50
4.12
96.04
5.64
82.10
4.60
131.81
3.09
88.54
13.55
1119.83
13.09
366.67
12.18
250.62
5.89
294.50
17.25
210.37
2007
21.10
64.06
4.46
103.96
5.98
87.05
4.99
142.98
2.79
79.94
16.43
1357.85
10.37
290.48
12.58
258.85
4.95
247.50
18.82
229.51
2008
17.08
51.85
4.11
95.80
5.85
85.15
4.84
138.68
2.11
60.46
26.26
2170.25
14.22
398.32
20.13
414.20
5.94
297.00
17.15
209.15
2009
13.72
41.65
3.70
86.25
5.01
72.93
5.03
144.13
2.14
61.32
33.09
2734.71
13.18
369.19
24.90
512.35
5.53
276.50
16.04
195.61
2010
14.57
44.23
4.19
97.67
5.00
72.78
5.01
143.55
2.28
65.33
25.92
2142.15
9.23
258.54
15.56
320.16
6.03
301.50
13.46
164.15
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.11 shows the debtors turnover ratios of selected allied companies in last fifteen years. During the study period of fifteen years, AWL showed highest
debtors turnover ratio among all selected allied companies. JSPL, ESSAR and SAIL showed an increasing trend throughout the study period.
81
Table 4.12: Comparison of Debtors Turnover Ratio between Glassline Companies
H0 : There is no significant difference in mean debtors turnover ratio between selected
companies.
H1 : There is significant difference in mean debtors turnover ratio between selected
companies.
Descriptive Statistics
95% Confidence
N
Company
Std.
Mean
Deviation
Std. Error
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
6.2507
2.16113
.55800
5.0539
7.4475
SGEL
15
10.0260
10.08018
2.60269
4.4438
15.6082
NILE
15
10.1540
3.53474
.91266
8.1965
12.1115
Total
45
8.8102
6.41443
.95621
6.8831
10.7373
ANOVA test
Source of variation
Sum of Squares
df
Mean Square
F
p-value
Between Groups
147.528
2
73.764
1.863
.168
Within Groups
1662.848
42
39.592
1810.375
44
Total
Table 4.12 shows mean debtors turnover ratio of selected companies. The descriptive table
shows that mean value of this ratio was higher in NILE followed by SGEL and GMM. To
check the statistical difference in these mean values researcher had applied ANOVA test.
In ANOVA table, applying this test corresponding F-value and its p-values were obtained.
F-value was 1.863 and p-value was 0.168. As p-value in above table was more than 0.05,
above null hypothesis was accepted and concluded that there is no significant difference in
mean debtors turnover ratio between selected companies.
2. Average Collection Period
The Debtors/Receivable Turnover ratio when calculated in terms of days is known as
Average Collection Period or Debtors Collection Period Ratio.
82
The average collection period ratio represents the average number of days for which a firm
has to wait before its debtors are converted into cash.
365 days
Average Collection Period =
Debtors Turnover
The Average Collection Period ratio measures the quality of debtors. A short collection
period implies prompt payment by debtors. It reduces the chances of bad debts. Similarly,
a longer collection period implies too liberal and inefficient credit collection performance.
It is difficult to provide a standard collection period of debtors.
Table 4.13: Average Collection Period of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
37.59
100.00
8.09
100.00
60.63
100.00
1997
64.37
171.25
24.91
308.12
55.64
91.77
1998
119.67
318.36
40.15
496.59
48.09
79.31
1999
107.04
284.75
53.99
667.75
47.10
77.68
2000
104.29
277.43
77.33
956.36
54.56
89.99
2001
86.49
230.09
84.69
1047.33
34.86
57.50
2002
70.74
188.18
81.47
1007.59
31.96
52.71
2003
43.30
115.18
57.75
714.24
40.47
66.74
2004
40.51
107.77
52.52
649.50
38.75
63.91
2005
43.09
114.64
44.35
548.48
27.30
45.03
2006
43.76
116.43
48.34
597.88
37.02
61.05
2007
55.64
148.02
47.04
581.70
43.71
72.10
2008
61.76
164.30
57.21
707.52
31.79
52.44
2009
59.84
159.18
55.56
687.06
23.07
38.05
2010
58.68
156.11
31.79
393.21
19.74
32.56
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
83
Chart 4.5: Average Collection Period of selected Glassline Companies
140
Average Collection Period
120
100
80
GMM
60
SGEL
NILE
40
20
0
It observes from the table 4.13 and chart 4.5 that in GMM, average collection period was
increased during 1996-2000 and decreased during 2001-2010. The similar pattern was
seen in SGEL. NILE showed decreasing pattern throughout the study period i.e.
1996-2010. Among selected companies, NILE showed lowest average collection period
and hence NILE is better than other two selected companies.
84
Table 4.14: Average Collection Period of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
11.08
100.00
85.08
100.00
53.13
100.00
104.58
100.00
104.58
100.00
301.65
100.00
102.24
100.00
-
-
182.50
100.00
44.51
100.00
1997
13.05
117.77
103.11
121.19
55.47
104.41
124.15
118.71
134.69
128.78
132.73
44.00
105.80
103.48
-
-
19.84
10.87
51.12
114.85
1998
23.12
208.61
103.99
122.22
64.04
120.53
123.73
118.31
158.70
151.74
99.73
33.06
91.48
89.47
-
-
97.33
53.33
48.41
108.75
1999
30.44
274.73
120.46
141.58
76.68
144.33
122.07
116.72
128.98
123.32
105.19
34.87
123.31
120.61
75.10
100.00
172.99
94.79
46.14
103.67
2000
27.80
250.88
128.07
150.53
77.66
146.17
132.73
126.91
126.74
121.18
87.32
28.95
140.38
137.31
123.73
164.75
848.84
465.12
41.95
94.25
2001
21.65
195.37
127.62
150.00
72.28
136.04
146.00
139.60
132.73
126.91
83.14
27.56
162.22
158.67
93.35
124.30
912.50
500.00
39.16
87.98
2002
19.08
172.19
145.42
170.92
75.88
142.83
105.80
101.16
147.77
141.30
82.58
27.38
163.68
160.09
79.52
105.88
172.17
94.34
35.93
80.71
2003
12.70
114.61
113.35
133.23
75.73
142.53
103.99
99.43
125.86
120.34
32.13
10.65
103.99
101.71
54.48
72.54
79.52
43.57
28.90
64.92
2004
15.12
136.45
97.07
114.10
73.15
137.68
99.18
94.84
140.38
134.23
30.78
10.20
60.53
59.20
49.39
65.76
87.53
47.96
24.27
54.52
2005
8.37
75.57
89.68
105.41
68.87
129.62
87.74
83.89
97.07
92.82
24.16
8.01
36.35
35.56
28.63
38.12
47.84
26.21
19.71
44.28
2006
12.24
110.50
88.59
104.13
64.72
121.81
79.35
75.87
118.12
112.94
26.94
8.93
27.88
27.27
29.97
39.90
61.97
33.96
21.16
47.54
2007
17.30
156.11
81.84
96.19
61.04
114.88
73.15
69.94
130.82
125.09
22.22
7.36
35.20
34.43
29.01
38.63
73.74
40.40
19.39
43.57
2008
21.37
192.86
88.81
104.38
62.39
117.44
75.41
72.11
172.99
165.40
13.90
4.61
25.67
25.11
18.13
24.14
61.45
33.67
21.28
47.81
2009
26.60
240.09
98.65
115.95
72.85
137.13
72.56
69.38
170.56
163.08
11.03
3.66
27.69
27.09
14.66
19.52
66.00
36.17
22.76
51.12
2010
25.05
226.08
87.11
102.39
73.00
137.40
72.85
69.66
160.09
153.07
14.08
4.67
39.54
38.68
23.46
31.23
60.53
33.17
27.12
60.92
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
The table 4.14 gives the average collection period of selected allied companies in last fifteen years. During the study period of fifteen years, all companies showed
decreasing trend. JSPL, ESSAR and SAIL showed lowest average collection period among all allied companies. Thus these companies seem to be better than
others.
85
Table 4.15: Comparison of Average Collection Period between Glassline Companies
H0 : There is no significant difference in mean average collection period between selected
companies.
H1 : There is significant difference in mean average collection period between selected
companies.
Descriptive Statistics
95% Confidence
N
Company
Std.
Mean
Deviation
Std. Error
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
66.45
26.29
6.78
51.88
81.01
SGEL
15
51.01
20.61
5.32
39.59
62.42
NILE
15
39.64
12.06
3.11
32.96
46.32
Total
45
52.37
22.91
3.41
45.48
59.25
ANOVA test
Source of variation
Sum of Squares
df
Mean Square
F
p-value
Between Groups
5430.397
2
2715.199
6.455
0.004
Within Groups
17667.274
42
420.649
23097.671
44
Total
Table 4.15 shows mean Average Collection Period of selected companies. The
descriptive table shows that mean value of this ratio was higher in GMM Company
followed by SGEL and NILE. To check the statistical difference in these mean values
researcher had applied ANOVA test. In ANOVA table, applying this test corresponding
F-value and its p-values were obtained. F-value was 6.455 and p-value was 0.004. As
p-value in above table was less than 0.05, above null hypothesis was rejected and
concluded that there is a significant difference in mean Average Collection Period
between selected companies.
86
3. Total Assets Turnover Ratio
The total asset turnover ratio measures the ability of a company to use its assets to
generate sales. The total asset turnover ratio considers all assets including fixed assets,
like plant and equipment, as well as inventory and accounts receivable.
Net Sales
Total Assets Turnover Ratio =
Total Assts
The lower the total asset turnover ratio, as compared to historical data for the firm and
industry data, the more sluggish the firm's sales. This may indicate a problem with one or
more of the asset categories composing total assets - inventory, receivables, or fixed
assets. The small business owner should analyze the various asset classes to determine
where the problem lies. There could be a problem with inventory. The firm could be
holding obsolete inventory and not selling inventory fast enough. With regard to accounts
receivable, the firm's collection period could be too long and credit accounts may be on
the books too long. Fixed assets, such as plant and equipment, could be sitting idle instead
of being used to their full capacity. All of these issues could lower the total asset turnover
ratio.
Table 4.16: Total Assets Turnover Ratio of selected Glassline Companies
Year
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Ratio
1.54
1.24
0.89
0.98
0.75
0.88
0.88
1.15
1.19
1.35
1.60
1.40
1.56
1.71
1.68
GMM
Indices
100.00
80.37
57.93
63.93
48.57
57.33
56.95
74.96
77.21
87.70
103.92
90.67
101.46
111.21
109.13
Ratio
0.04
0.70
0.66
0.83
0.90
1.08
1.13
1.57
1.97
2.24
1.44
1.34
1.63
1.39
1.50
SGEL
Indices
100.00
1820.23
1732.60
2171.63
2363.93
2837.73
2957.45
4104.66
5168.91
5867.97
3777.17
3497.75
4270.20
3625.57
3923.89
NILE
Ratio
Indices
0.67
100.00
0.41
61.52
0.36
54.23
0.43
63.74
0.41
60.61
0.42
62.51
0.78
115.69
0.93
137.86
1.14
169.35
1.50
223.60
1.55
231.13
1.71
254.31
2.37
351.93
1.57
233.33
2.21
328.85
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
87
Chart 4.6: Total Assets Turnover Ratio of selected Glassline Companies
2.5
Total Assets Turnover Ratio
2
1.5
GMM
SGEL
1
NILE
0.5
0
From the table 4.16 and chart 4.6, one can interpret that in GMM total assets turnover
ratio was decreased during 1996-2002 and increased during 2003-2010. In SGEL, the
ratio decrease during 1996-2001, increase during 2002-2005 and again decrease. NILE
showed an increasing pattern throughout the study period i.e. 1996-2010. Among selected
companies, NILE showed highest performance of total assets turnover ratio throughout
the study period and hence NILE is better than other two selected companies.
88
Table 4.17: Total Assets Turnover Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
2.12
100.00
2.88
100.00
0.83
100.00
-
-
1.98
100.00
0.08
100.00
1.29
100.00
-
-
0.10
100.00
0.58
100.00
1997
1.81
85.49
2.26
78.41
0.80
96.77
0.96
100.00
1.67
84.61
0.24
293.40
1.29
100.16
-
-
0.12
125.32
0.48
82.16
1998
1.60
75.33
2.60
90.31
0.87
105.41
0.90
93.43
1.38
69.78
0.35
422.43
1.08
83.84
-
-
0.09
97.90
0.45
77.40
1999
1.87
88.23
2.24
77.82
0.90
108.47
0.91
95.46
1.80
91.22
0.31
375.92
1.01
78.19
14.41
100.00
-
-
0.47
81.38
2000
1.66
78.25
2.25
78.01
0.97
116.84
0.87
90.43
1.35
68.54
0.37
447.80
1.03
80.33
13.51
93.76
0.01
9.35
0.70
121.54
2001
1.81
85.42
2.43
84.36
1.05
127.55
0.93
96.89
1.07
53.93
0.41
498.46
-
-
10.73
74.49
0.00
1.56
0.76
130.83
2002
1.92
90.32
2.49
86.67
1.04
126.11
0.99
103.04
1.16
58.51
0.62
754.83
1.09
84.49
7.74
53.74
0.01
5.25
0.81
140.52
2003
2.28
107.38
3.04
105.46
1.13
136.96
1.09
113.64
1.36
69.03
0.26
321.82
1.67
129.67
6.50
45.13
0.01
7.09
1.09
188.68
2004
2.16
101.78
3.69
128.35
1.30
156.99
1.21
126.61
1.24
62.72
0.63
768.60
3.17
246.19
5.08
35.23
0.17
179.94
1.55
267.26
2005
2.52
118.86
2.78
96.52
1.30
157.14
1.56
163.25
1.70
85.94
0.94
1148.61
3.51
272.75
3.39
23.55
0.88
920.46
1.78
306.74
2006
2.58
121.70
2.51
87.28
1.20
145.34
1.58
164.44
1.48
74.92
0.55
668.49
3.75
291.30
2.08
14.46
0.93
976.01
1.66
286.83
2007
2.38
111.91
3.31
114.94
1.02
123.36
1.66
173.35
1.58
79.76
0.69
845.55
1.87
145.09
1.60
11.08
0.93
976.97
1.59
273.75
2008
2.15
101.18
3.02
104.83
0.90
108.82
1.65
172.42
1.28
64.66
0.99
1209.71
2.65
205.57
1.26
8.74
1.01
1063.09
1.52
262.92
2009
1.71
80.64
2.58
89.64
0.89
107.77
1.73
180.92
1.10
55.81
0.95
1165.25
2.80
217.64
0.92
6.39
0.77
806.77
1.21
208.75
2010
1.80
84.97
2.60
90.21
1.04
125.37
1.54
161.02
1.26
63.64
0.39
474.92
1.85
143.99
0.63
4.38
0.81
844.09
0.81
140.37
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.17 provides the total assets turnover ratio of selected allied companies in last fifteen years. During the study period of fifteen years, all companies showed
mixed trend. i.e. the ratio was fluctuating throughout the study period. GEE and SAIL showed better performance among all allied companies and hence these
companies seem to be better than others.
89
Table 4.18: Comparison of Total Assets Turnover Ratio between Glassline
Companies
H0 : There is no significant difference in mean total assets turnover ratio between selected
companies.
H1 : There is significant difference in mean total assets turnover ratio between selected
companies.
Descriptive Statistics
95% Confidence
Company
N
Mean
Std.
Std.
Deviation
Error
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
1.25
0.32
0.08
1.07
1.43
SGEL
15
1.22
0.55
0.14
0.92
1.53
NILE
15
1.09
0.68
0.17
0.71
1.47
Total
45
1.19
0.53
0.07
1.03
1.35
df
Mean Square
F
p-value
0.358
0.701
ANOVA test
Source of variation Sum of Squares
Between Groups
0.210
2
0.105
Within Groups
12.322
42
0.293
12.532
44
Total
Table 4.18 shows mean total assets turnover ratio of selected companies. The descriptive
table shows that mean value of this ratio was higher in GMM followed by SGEL and
NILE. To check the statistical difference in these mean values researcher had applied
ANOVA test. In ANOVA table, applying this test corresponding F-value and its p-values
were obtained. F-value was 0.358 and p-value was 0.701. As p-value in above table was
more than 0.05, above null hypothesis was accepted and concluded that there is no
significant difference in mean total assets turnover ratio between selected companies.
4. Fixed Assets Turnover Ratio
This ratio is also known as the investment turnover ratio. It is based on the relationship
between the cost of goods sold and assets of a firm. It define, measures the efficiency of a
firm in managing and utilizing its assets. The higher the turnover ratio, the more efficient
90
is the management and utilization of the assets while low turnover ratios are indicative of
under utilization of available resources and presence of idle capacity. In operational
terms, it implies that the firm can expand its activity level without requiring additional
capital investments. The fixed asset turnover ratio measures the company's effectiveness
in generating sales from its investments in plant, property, and equipment. It is especially
important for a manufacturing firm that uses a lot of plant and equipment in its operations
to calculate its fixed asset turnover ratio.
Net Sales
Fixed Assets Turnover Ratio =
Net Fixed Assts
If the fixed asset turnover ratio is low as compared to the industry or past years of data for
the firm, it means that sales are low or the investment in plant and equipment is too much.
Table 4.19: Fixed Assets Turnover Ratio of selected Glassline Companies
Year
GMM
SGEL
NILE
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
2.21
100.00
0.63
100.00
1.80
100.00
1997
1.83
82.81
0.96
152.38
0.90
50.00
1998
1.28
57.92
0.91
144.44
0.69
38.33
1999
1.34
60.63
1.08
171.43
0.84
46.67
2000
1.29
58.37
1.23
195.24
0.73
40.56
2001
1.43
64.71
1.48
234.92
0.80
44.44
2002
1.32
59.73
1.49
236.51
1.33
73.89
2003
1.56
70.59
1.93
306.35
1.53
85.00
2004
1.73
78.28
2.49
395.24
1.66
92.22
2005
2.05
92.76
3.16
501.59
2.67
148.33
2006
2.32
104.98
2.65
420.63
3.03
168.33
2007
2.52
114.03
2.22
352.38
3.86
214.44
2008
2.86
129.41
2.39
379.37
5.46
303.33
2009
2.74
123.98
2.38
377.78
4.43
246.11
2010
2.70
122.17
2.07
328.57
4.84
268.89
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
91
Chart - 4.7 : Fixed Assets Turnover Ratio of selected Glassline Companies
6
Fixed Assets Turnover Ratio
5
4
GMM
3
SGEL
2
NILE
1
0
From the table 4.19 and chart 4.7, one can say that in GMM, fixed assets turnover ratio
was decreased during 1996-2002 and increased during 2003-2010. In SGEL, the ratio
increase throughout the study period i.e. 1996-2010. NILE also showed an increasing
pattern throughout the study period. Among selected companies, NILE showed highest
performance of fixed assets turnover ratio throughout study period and hence NILE is
better than other two selected companies.
92
Table 4.20: Fixed Assets Turnover Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
3.08
100.00
8.89
100.00
1.38
100.00
4.55
100.00
1.86
100.00
0.16
100.00
1.31
100.00
-
-
0.52
100.00
0.98
100.00
1997
2.46
79.87
6.65
74.80
1.41
102.17
3.57
78.46
1.52
81.72
0.39
243.75
1.26
96.18
-
-
0.59
113.46
0.78
79.59
1998
1.92
62.34
5.42
60.97
1.41
102.17
3.06
67.25
1.28
68.82
0.47
293.75
1.59
121.37
-
-
0.12
23.08
0.68
69.39
1999
1.81
58.77
4.89
55.01
1.30
94.20
2.80
61.54
1.54
82.80
0.39
243.75
1.43
109.16
1.43
100.00
-
-
0.59
60.20
2000
1.52
49.35
4.93
55.46
1.28
92.75
2.50
54.95
1.26
67.74
0.38
237.50
1.61
122.90
0.85
59.44
0.01
1.92
0.59
60.20
2001
1.40
45.45
5.44
61.19
1.39
100.72
2.00
43.96
0.99
53.23
0.39
243.75
1.89
144.27
0.95
66.43
0.00
0.00
0.61
62.24
2002
1.18
38.31
4.58
51.52
1.33
96.38
2.26
49.67
0.95
51.08
0.33
206.25
1.99
151.91
0.84
58.74
0.00
0.00
0.58
59.18
2003
1.38
44.81
5.20
58.49
1.31
94.93
2.19
48.13
1.26
67.74
0.53
331.25
2.98
227.48
1.09
76.22
0.01
1.92
0.70
71.43
2004
1.36
44.16
6.18
69.52
1.48
107.25
2.39
52.53
1.26
67.74
0.60
375.00
4.49
342.75
1.03
72.03
0.13
25.00
0.87
88.78
2005
1.93
62.66
6.71
75.48
1.58
114.49
2.83
62.20
2.20
118.28
0.95
593.75
6.43
490.84
1.16
81.12
0.70
134.62
1.15
117.35
2006
2.40
77.92
7.35
82.68
1.68
121.74
3.40
74.73
2.71
145.70
0.79
493.75
7.64
583.21
1.00
69.93
0.72
138.46
1.14
116.33
2007
2.17
70.45
10.04
112.94
1.70
123.19
4.21
92.53
3.74
201.08
0.74
462.50
6.01
458.78
0.95
66.43
0.77
148.08
1.33
135.71
2008
1.88
61.04
10.17
114.40
1.70
123.19
4.38
96.26
3.39
182.26
0.84
525.00
6.38
487.02
1.13
79.02
1.27
244.23
1.51
154.08
2009
1.41
45.78
7.12
80.09
1.48
107.25
4.63
101.76
2.83
152.15
0.85
531.25
6.98
532.82
1.27
88.81
1.04
200.00
1.53
156.12
2010
1.53
49.68
6.73
75.70
1.42
102.90
4.95
108.79
2.41
129.57
0.72
450.00
4.50
343.51
0.98
68.53
1.06
203.85
1.29
131.63
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
The table 4.20 provides the fixed assets turnover ratio of selected allied companies in last fifteen years. During the study period of fifteen years, all companies
showed mixed trend. i.e. the ratio was fluctuating throughout the study period. GEE showed highest performance among all allied companies and hence it seems
to be better than others.
93
Table 4.21: Comparison of Fixed Assets Turnover Ratio between Glassline
Companies
H0 : There is no significant difference in mean fixed assets turnover ratio between
selected companies.
H1 : There is significant difference in mean fixed assets turnover ratio between selected
companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
1.9453
.57895
.14948
95% Confidence
Interval for Mean
Lower
Upper
Bound
Bound
1.6247
2.2659
SGEL
15
1.8047
.75152
.19404
1.3885
2.2208
NILE
15
2.3047
1.64032
.42353
1.3963
3.2130
Total
45
2.0182
1.08986
.16247
1.6908
2.3457
df
Mean Square
F
p-value
.833
.442
Company
ANOVA test
Source of variation Sum of Squares
Between Groups
1.995
2
.997
Within Groups
50.269
42
1.197
52.263
44
Total
The table 4.21 shows mean fixed assets turnover ratio of selected companies. The
descriptive table shows that mean value of this ratio was higher in NILE followed by
GMM and SGEL. To check the statistical difference in these mean values researcher had
applied ANOVA test. In ANOVA table, applying this test corresponding F-value and its
p-values were obtained. F-value was 0.833 and p-value was 0.442. As p-value in above
table was more than 0.05, above null hypothesis was accepted and concluded that there is
no significant difference in mean fixed assets turnover ratio between selected companies.
5. Working Capital Turnover Ratio
Working capital turnover ratio indicates the velocity of the utilization of net working
capital. This ratio represents the number of times the working capital is turned over in the
course of year and is calculated as follows:
94
Net Sales
Working Capital Turnover Ratio =
Net Working Capital
The two components of the ratio are cost of sales and the net working capital. If the
information about cost of sales is not available the figure of sales may be taken as the
numerator. Net working capital is found by deduction from the total of the current assets
the total of the current liabilities.
The working capital turnover ratio measures the efficiency with which the working
capital is being used by a firm. A high ratio indicates efficient utilization of working
capital and a low ratio indicates otherwise. But a very high working capital turnover ratio
may also mean lack of sufficient working capital which is not a good situation.
Table 4.22: Working Capital Turnover Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
-6.53
100.00
0.74
100.00
3.86
100.00
1997
9.71
-148.61
-5.27
-710.44
1.07
27.77
1998
3.48
-53.25
6.69
902.01
1.04
27.02
1999
4.83
-73.90
50.67
6828.99
1.33
34.42
2000
3.27
-50.00
14.28
1924.86
1.22
31.52
2001
3.16
-48.40
14.29
1926.41
1.35
35.05
2002
7.80
-119.42
-19.79
-2667.77
2.08
53.93
2003
7.35
-112.55
186.44
25129.47
2.30
59.67
2004
31.53
-482.78
-7.09
-955.66
3.84
99.59
2005
-30.65
469.32
-10.11
-1362.98
6.18
160.14
2006
-164.15
2513.20
13.09
1764.72
3.76
97.36
2007
11.29
-172.86
8.13
1095.11
4.11
106.50
2008
8.62
-132.02
18.99
2559.61
5.64
146.15
2009
39.64
-606.97
5.90
795.60
4.89
126.69
2010
7.88
-120.61
-60.35
-8134.31
18.84
488.40
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
95
Chart 4.8: Working Capital Turnover Ratio of selected Glassline Companies
Working Capital Turnover Ratio
250
200
150
100
GMM
50
SGEL
0
NILE
-50
-100
-150
-200
From the table 4.22 and chart 4.8, one can say that in GMM, working capital turnover
ratio was decreasing during 1997-2001 but after that it was increased. It shows –ve ratio
in 2005-2006. In SGEL, the ratio gives mixed trend throughout the study period i.e.
1996-2010. NILE also showed an increasing pattern throughout the study period. Among
the selected companies, NILE showed highest performance of working capital turnover
ratio and hence NILE is better than other two selected companies.
96
Table 4.23: Working Capital Turnover Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
7.76
100.00
3.15
100.00
2.56
100.00
2.54
100.00
3.16
100.00
2.40
100.00
2.10
100.00
-
-
1.53
100.00
2.11
100.00
1997
7.20
92.72
4.06
129.09
2.40
93.83
2.33
91.58
2.90
91.86
36.85
1535.45
2.34
111.56
-
-
3.78
247.56
1.75
83.09
1998
9.26
119.36
3.32
105.47
2.30
89.92
2.34
92.02
3.30
104.31
1.97
81.96
1.68
80.12
2.28
100.00
6.65
434.71
1.99
94.71
1999
7.99
103.02
3.30
104.83
2.51
98.05
2.58
101.45
2.75
86.89
9.67
402.95
1.65
78.48
1.54
67.82
4.19
274.24
6.75
320.44
2000
14.11
181.78
3.45
109.63
2.79
108.89
4.29
168.61
2.11
66.83
-29.4
-1226.5
1.67
79.42
3.00
131.74
-2.00
-130.8
9.21
437.44
2001
45.97
592.38
3.82
121.47
3.39
132.30
3.86
151.91
2.33
73.63
-11.2
-468.13
1.66
78.83
2.84
124.86
-0.22
-14.14
46.24
2196.11
2002
28.41
366.09
6.20
196.99
3.34
130.30
4.18
164.57
2.96
93.46
1.09
45.50
2.46
117.22
8.76
385.15
-0.15
-9.60
-721.5
-34267.9
2003
18.62
239.94
7.57
240.82
3.57
139.39
7.19
283.02
2.23
70.51
2.49
103.63
5.34
254.45
11.32
497.71
2.60
170.22
-28.57
-1356.73
2004
7.88
101.57
4.14
131.50
3.91
152.48
6.93
272.60
2.96
93.72
3.25
135.29
5.03
239.62
8.45
371.26
3.52
230.20
12.30
584.01
2005
8.69
112.02
4.27
135.83
4.09
159.39
7.94
312.30
2.23
70.56
3.42
142.60
8.04
382.80
8.35
367.19
3.04
198.56
8.09
384.21
2006
12.05
155.28
5.26
167.13
3.99
155.52
8.94
351.62
2.21
69.87
6.99
291.21
4.03
192.03
18.64
819.27
4.34
283.70
4.23
200.99
2007
7.36
94.89
5.10
162.00
3.70
144.49
12.66
498.22
1.86
58.98
20.54
855.71
5.01
238.65
4.64
204.03
7.30
477.38
3.44
163.52
2008
5.76
74.20
4.16
132.20
3.36
131.14
9.20
362.00
1.76
55.62
6.56
273.25
4.68
222.68
7.12
312.86
14.23
931.06
2.67
126.58
2009
4.91
63.30
5.38
170.96
4.55
177.68
9.96
392.04
2.24
70.71
3.49
145.37
3.92
186.64
8.00
351.71
5.15
336.64
1.97
93.46
2010
5.10
65.74
3.53
112.22
4.50
175.57
9.81
386.16
2.33
73.60
2.54
105.96
3.88
184.84
3.80
167.15
8.50
555.95
2.22
105.36
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.23 provides the working capital turnover ratio of selected allied companies in last fifteen years. During the study period of fifteen years, GEE showed best
performance among all allied companies and hence it seem to be better than others. ESSAR, JSPL and BBL showed –ve values of working capital turnover ratio.
97
Table 4.24: Comparison of Working Capital Turnover Ratio between Glassline
Companies
H0 : There is no significant difference in mean working capital turnover ratio between
selected companies.
H1 : There is significant difference in mean working capital turnover ratio between
selected companies.
Descriptive Statistics
95% Confidence
Interval for Mean
Std.
Std.
Deviation
Error
Lower
Bound
Upper
Bound
-4.18
46.87
12.10
-30.14
21.77
15
14.44
53.11
13.71
-14.97
43.85
NILE
15
4.10
4.42
1.14
1.64
6.55
Total
45
4.78
40.77
6.07
-7.46
17.03
df
Mean Square
F
p-value
0.778
0.466
N
Mean
GMM
15
SGEL
Company
ANOVA test
Source of variation Sum of Squares
Between Groups
2612.327
2
1306.163
Within Groups
70533.088
42
1679.359
73145.415
44
Total
The table 4.24 shows mean working capital turnover ratio of selected companies. The
descriptive table shows that mean value of this ratio was higher in SGEL followed by
NILE and GMM. To check the statistical difference in these mean values researcher had
applied ANOVA test. In ANOVA table, applying this test corresponding F-value and its
p-values were obtained. F-value was 0.778 and p-value was 0.466. As p-value in above
table was more than 0.05, above null hypothesis was accepted and concluded that there is
no significant difference in mean working capital turnover ratio between selected
companies.
6. Capital Turnover Ratio
Capital turnover ratio establishes a relationship between net sales and capital employed.
The ratio indicates the times by which the capital employed is used to generate sales.
98
It is calculated as follows:
Net Sales
Capital Turnover Ratio =
Capital Employed
Where Net Sales = Sales – Sales Return
Capital Employed = Share Capital (Equity + Preference) + Reserves and Surplus + Longterm Loans – Fictitious Assets.
The objective of capital turnover ratio is to calculate how efficiently the capital invested
in the business is being used and how many times the capital is turned into sales. Higher
the ratio, better the efficiency of utilization of capital and it would lead to higher
profitability.
Table 4.25: Capital Turnover Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
3.08
100.00
0.04
100.00
0.93
100.00
1997
1.71
55.49
1.06
2544.53
0.47
50.04
1998
1.11
35.98
0.85
2031.97
0.42
45.09
1999
1.23
39.86
1.14
2737.89
0.50
54.16
2000
0.93
30.22
1.28
3066.70
0.47
50.19
2001
1.11
36.03
1.46
3492.17
0.47
50.36
2002
1.21
39.19
1.89
4515.94
0.90
96.33
2003
1.61
52.28
2.44
5851.39
1.08
115.53
2004
1.64
53.37
5.94
14240.82
1.48
158.88
2005
2.28
73.95
6.76
16199.87
2.28
245.16
2006
2.54
82.49
2.12
5080.35
1.98
212.33
2007
2.15
69.78
2.04
4896.77
2.43
260.63
2008
2.76
89.53
3.00
7190.50
3.33
357.90
2009
3.57
115.77
2.20
5279.38
2.06
220.88
2010
2.71
87.86
2.88
6898.12
4.30
461.53
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
99
Chart 4.9 : Capital Turnover Ratio of selected Glassline Companies
8
Capital Turnover Ratio
7
6
5
GMM
4
SGEL
3
NILE
2
1
0
From the table 4.25 and chart 4.9, one can depict that in GMM, capital turnover ratio was
increasing during 1997-2009. In SGEL, the ratio gives highest performance in 2004 and
2005, after that the trend was declined. NILE also showed an increasing pattern
throughout the study period. Among selected companies, GMM showed highest
performance of capital turnover ratio and hence it is better than other two selected
companies.
100
Table 4.26: Capital Turnover Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
2.63
100.00
46.84
100.00
0.94
100.00
-
-
5.81
100.00
0.10
100.00
1.53
100.00
-
-
0.10
100.00
0.75
100.00
1997
2.01
76.23
6.65
14.20
0.90
95.09
1.40
100.00
4.63
79.66
0.29
292.03
1.57
102.54
-
-
0.13
132.48
0.59
78.51
1998
1.98
75.07
330.24
705.12
0.97
102.63
1.26
89.86
3.55
61.16
0.55
551.76
1.24
81.53
-
-
0.10
103.77
0.55
73.16
1999
2.48
94.25
28.44
60.73
1.02
108.49
1.26
89.51
4.18
71.98
0.47
471.87
1.23
80.42
0.56
100.00
-
-
0.58
77.55
2000
1.95
74.01
-29.57
-63.14
1.12
118.18
1.28
91.58
2.10
36.17
0.59
593.17
1.52
99.38
0.39
68.44
0.01
9.80
0.92
122.82
2001
2.45
92.97
-27.70
-59.15
1.22
128.94
1.42
101.15
1.55
26.61
0.70
697.93
-
-
0.50
89.40
0.00
1.63
1.02
136.21
2002
2.86
108.75
-10.52
-22.46
1.18
125.18
1.54
110.11
2.14
36.78
1.48
1480.79
1.47
96.18
0.41
73.53
0.01
5.61
1.13
150.87
2003
3.42
129.89
-4.79
-10.23
1.29
137.12
1.72
122.67
3.01
51.74
0.32
323.92
2.21
144.53
0.60
106.46
0.01
7.86
1.54
204.89
2004
3.04
115.31
-5.23
-11.16
1.52
161.43
2.58
183.67
5.14
88.48
0.81
813.56
4.33
283.59
0.67
118.81
0.23
228.04
2.28
303.35
2005
3.10
117.53
14.11
30.13
1.53
162.58
2.88
205.62
18.52
318.60
1.11
1108.74
4.28
280.27
0.80
142.06
1.12
1127.12
2.53
336.25
2006
3.22
122.09
5.68
12.13
1.40
148.60
3.30
235.04
4.75
81.67
0.70
701.48
5.95
389.55
0.56
99.34
1.15
1159.00
2.40
318.89
2007
3.02
114.68
18.12
38.69
1.20
127.36
3.61
257.63
3.36
57.75
0.99
985.34
2.21
144.57
0.59
103.93
1.50
1513.46
2.12
281.56
2008
2.61
99.25
9.06
19.34
1.03
108.83
3.89
277.64
2.60
44.79
1.41
1410.26
3.20
209.35
0.71
125.25
1.56
1576.53
2.02
268.27
2009
2.14
81.38
5.59
11.94
1.01
107.28
3.64
259.27
2.08
35.88
1.20
1202.80
3.18
208.48
0.74
131.26
1.13
1142.04
1.54
204.90
2010
2.15
81.45
5.95
12.70
1.21
128.37
3.01
214.47
2.31
39.79
0.46
461.84
2.06
134.66
0.49
86.39
1.16
1174.94
1.04
138.52
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.26 gives capital turnover ratio of selected allied companies during the study period. GEE showed highest performance in 2004 & 2005, after that the trend
was declined. SAIL, ESSAR and JSPL showed flat performance whereas BBL showed decreasing trend.
101
Table 4.27: Comparison of Capital Turnover Ratio between Glassline Companies
H0 : There is no significant difference in mean capital turnover ratio between selected
companies.
H1 : There is significant difference in mean capital turnover ratio between selected
companies.
Descriptive Statistics
Company
N
Mean
Std.
Deviation
Std.
Error
95% Confidence
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
1.97
0.81
0.21
1.52
2.43
SGEL
15
2.34
1.81
0.46
1.33
3.34
NILE
15
1.54
1.17
0.30
0.88
2.19
Total
45
1.95
1.34
0.20
1.54
2.35
df
Mean Square
F
p-value
1.350
0.270
ANOVA test
Source of variation Sum of Squares
Between Groups
4.813
2
2.406
Within Groups
74.882
42
1.783
79.695
44
Total
The table 4.27 shows mean capital turnover ratio of selected companies. The descriptive
table shows that mean value of this ratio was higher in SGEL followed by NILE and
GMM. To check the statistical difference in these mean values researcher had applied
ANOVA test. In ANOVA table, applying this test corresponding F-value and its p-values
were obtained. F-value was 1.350 and p-value was 0.270. As p-value in above table was
more than 0.05, above null hypothesis was accepted and concluded that there is no
significant difference in mean capital turnover ratio between selected companies.
C.
PROFITABILITY RATIO
1. Gross Profit Ratio
Gross profit ratio is the ratio of gross profit to net sales i.e. sales less sales returns. The
ratio thus reflects the margin of profit that a concern is able to earn on its trading and
102
manufacturing activity. It is the most commonly calculated ratio. It is employed for interfirm and inter-firm comparison of trading results.
Gross Profit
Gross Profit Ratio =
x 100
Net Sales
Where Gross profit = Net sales - Cost of goods sold
Cost of goods sold = Opening stock + Net purchases + Direct expenses - Closing stock
Net sales = Sales - Returns inwards
Gross profit is what is revealed by the trading account. It results from the difference
between net sales and cost of goods sold without taking into account expenses generally
charged to the profit and loss account. The larger the gap, the greater is the scope for
absorbing various expenses on administration, maintenance, arranging finance, selling
and distribution and yet leaving net profit for the proprietors or shareholders.
Table 4.28: Gross Profit Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
24.11
100.00
-60.87
100.00
24.30
100.00
1997
19.13
79.35
14.18
-23.30
25.07
103.15
1998
15.25
63.24
12.64
-20.77
20.73
85.28
1999
12.08
50.10
11.58
-19.02
15.18
62.47
2000
10.32
42.79
10.83
-17.79
-1.60
-6.58
2001
8.39
34.80
10.32
-16.96
0.81
3.34
2002
6.80
28.19
10.98
-18.03
5.77
23.74
2003
10.09
41.86
9.65
-15.86
7.29
29.99
2004
15.89
65.91
9.94
-16.33
-8.34
-34.31
2005
16.90
70.08
10.22
-16.79
7.59
31.24
2006
20.18
83.71
11.16
-18.34
8.03
33.05
2007
17.97
74.52
10.12
-16.63
8.06
33.18
2008
17.64
73.16
11.74
-19.28
9.95
40.95
2009
12.96
53.75
8.95
-14.71
-1.04
-4.26
2010
12.73
52.81
10.23
-16.81
4.53
18.66
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
103
Chart 4.10: Gross Profit Ratio of selected Glassline Companies
Gross Profit Ratio
30
20
10
0
-10
GMM
-20
SGEL
-30
NILE
-40
-50
-60
-70
The table 4.28 and chart 4.10 shows the gross profit ratio of selected companies. From
above table, one can depict that in GMM, gross profit ratio was decreasing during
1996-2002, increase in 2003-2006 and again decrease till 2010. SGEL showed almost
same performance as GMM. NILE showed a decreasing pattern throughout the study
period. Among selected companies, GMM showed highest performance of gross profit
ratio and hence it is better than other two selected companies.
104
Table 4.29: Gross Profit Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
17.15
100.00
12.94
100.00
18.13
100.00
-
-
7.95
100.00
32.90
100.00
6.79
100.00
-
-
-
-
14.48
100.00
1997
12.73
74.22
9.29
71.80
16.45
90.73
4.49
100.00
8.86
111.56
16.24
49.37
8.96
131.94
-
-
2.14
100.00
10.38
71.64
1998
11.64
67.89
0.76
5.88
17.12
94.42
4.09
91.01
10.50
132.13
14.69
44.64
0.61
8.96
-
-
-260.35
-12147.77
7.36
50.84
1999
10.97
63.97
1.31
10.15
17.37
95.79
4.47
99.44
10.32
129.89
-8.77
-26.67
0.40
5.88
20.82
100.00
-
-
-3.89
-26.89
2000
9.54
55.62
-1.57
-12.11
20.86
115.09
-5.76
-128.22
6.92
87.15
-11.89
-36.16
1.53
22.56
32.33
155.26
-3526.15
-164525.86
-4.10
-28.30
2001
11.71
68.29
1.47
11.34
18.93
104.43
-2.04
-45.39
5.83
73.43
-4.80
-14.60
-
-
31.97
153.53
-22800.00
-1063821.18
2.92
20.16
2002
13.64
79.56
-3.88
-30.02
17.15
94.60
3.40
75.61
4.37
55.04
-45.91
-139.55
2.05
30.14
31.64
151.98
-8665.42
-404318.33
-4.04
-27.87
2003
12.68
73.93
2.17
16.79
23.19
127.92
5.42
120.69
5.79
72.90
12.12
36.84
1.56
23.00
26.87
129.08
9959.57
464702.03
4.92
33.96
2004
12.74
74.32
6.12
47.31
18.85
103.98
7.88
175.48
6.02
75.73
13.43
40.82
1.62
23.91
36.64
175.97
-296.74
-13845.69
17.65
121.83
2005
21.38
124.67
15.34
118.54
20.60
113.64
8.18
182.03
8.91
112.11
19.49
59.24
3.09
45.42
36.86
177.04
-23.60
-1101.21
36.73
253.56
2006
20.53
119.75
17.35
134.13
30.67
169.17
9.39
209.15
11.04
138.95
19.10
58.05
3.95
58.20
36.92
177.32
68.32
3187.76
24.62
169.96
2007
17.13
99.91
18.35
141.81
22.01
121.41
10.37
230.77
13.00
163.64
16.40
49.86
5.38
79.26
36.57
175.63
-13.15
-613.45
31.20
215.38
2008
15.88
92.61
20.53
158.69
27.67
152.62
13.46
299.67
13.68
172.17
14.82
45.04
7.52
110.70
36.51
175.33
82.25
3837.88
31.95
220.55
2009
15.80
92.16
14.77
114.14
17.61
97.16
14.15
315.05
11.53
145.06
9.66
29.36
5.83
85.81
31.74
152.46
-7.03
-327.82
24.74
170.84
2010
18.50
107.87
10.57
81.73
16.19
89.31
18.00
400.73
11.58
145.77
8.14
24.76
11.42
168.15
32.88
157.90
-5.51
-257.09
28.31
195.42
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.29 gives gross profit ratio of selected allied companies during the study period. GEE, SAIL, ESSAR and other companies showed mixed trend during study
period. CG showed increasing trend during 2002-2010. It showed highest performance among all allied companies.
105
Table 4.30: Comparison of Gross Profit Ratio between Glassline Companies
H0 : There is no significant difference in mean gross profit ratio between selected
companies.
H1 : There is significant difference in mean gross profit ratio between selected companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
14.69
4.78
SGEL
15
6.11
NILE
15
Total
45
Company
95% Confidence
Interval for Mean
Lower
Bound
Upper
Bound
1.23
12.04
17.34
18.57
4.79
-4.17
16.39
8.42
9.56
2.47
3.12
13.72
9.74
12.63
1.88
5.94
13.53
df
Mean Square
F
p-value
1.933
0.157
ANOVA test
Source of variation Sum of Squares
Between Groups
591.994
2
295.997
Within Groups
6432.748
42
153.161
7024.741
44
Total
The table 4.30 shows mean gross profit ratio of selected companies. The descriptive table
shows that mean value of this ratio was higher in GMM followed by NILE and SGEL. To
check the statistical difference in these mean values researcher had applied ANOVA test.
In ANOVA table, applying this test corresponding F-value and its p-values were
obtained. F-value was 1.933 and p-value was 0.157. As p-value in above table was more
than 0.05, above null hypothesis was accepted and concluded that there is no significant
difference in mean gross profit ratio between selected companies.
2. Net Profit Ratio
Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as
percentage. The two basic components of the net profit ratio are the net profit and sales.
The net profits are obtained after deducting income-tax and, generally, non-operating
expenses and incomes are excluded from the net profits for calculating this ratio. Thus,
106
incomes such as interest on investments outside the business, profit on sales of fixed
assets and losses on sales of fixed assets, etc are excluded. It is obtained as follows:
Net Profit After Tax
Net Profit Ratio =
x 100
Net Sales
NP ratio is used to measure the overall profitability and hence it is very useful to
proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not
be able to achieve a satisfactory return on its investment.
This ratio also indicates the firm's capacity to face adverse economic conditions such as
price competition, low demand, etc. Obviously, higher the ratio the better is the
profitability. But while interpreting the ratio it should be kept in mind that the
performance of profits also be seen in relation to investments or capital of the firm and
not only in relation to sales.
Table 4.31: Net Profit Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
12.60
100.00
-104.35
100.00
19.64
100.00
1997
10.83
85.93
10.28
-9.86
14.75
75.10
1998
8.40
66.68
7.39
-7.08
7.80
39.72
1999
4.53
35.93
7.63
-7.31
3.84
19.55
2000
4.57
36.30
5.91
-5.66
-10.48
-53.37
2001
4.06
32.21
5.97
-5.72
-6.27
-31.92
2002
2.73
21.70
5.05
-4.84
0.76
3.89
2003
4.62
36.70
4.77
-4.57
2.67
13.62
2004
10.59
84.04
5.69
-5.46
-8.97
-45.66
2005
9.49
75.31
5.20
-4.98
4.34
22.11
2006
12.01
95.30
6.15
-5.90
4.59
23.36
2007
10.54
83.65
4.86
-4.66
4.30
21.89
2008
10.96
86.97
6.08
-5.82
5.62
28.62
2009
6.97
55.36
4.26
-4.08
-2.26
-11.50
2010
7.16
56.83
5.37
-5.15
2.24
11.39
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
107
Chart 4.11: Net Profit Ratio of selected Glassline Companies
Net Profit Ratio
40
20
0
-20
GMM
-40
SGEL
NILE
-60
-80
-100
-120
The table 4.31 and chart 4.11 shows the net profit ratio of selected companies. From
above table, one can say that in GMM, net profit ratio was decreasing during 1996-2003,
increase in 2004-2008 and again decreased. SGEL showed almost same performance as
GMM. NILE showed a decreasing pattern throughout the study period. Among selected
companies, GMM showed highest performance of net profit ratio and hence it is better
than other two selected companies.
108
Table 4.32: Net Profit Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
10.07
100.00
6.57
100.00
11.50
100.00
-
-
5.71
100.00
24.32
100.00
2.45
100.00
-
-
-25.00
100.00
10.03
100.00
1997
6.35
63.03
5.16
78.46
9.68
84.24
2.20
100.00
5.07
88.81
0.60
2.48
3.36
137.44
-
-
-2.50
10.01
4.18
41.66
1998
5.68
56.44
-0.28
-4.27
8.98
78.09
1.47
66.87
5.70
99.84
1.14
4.67
-1.22
-49.76
-
-
-467.38
1869.50
1.04
10.34
1999
5.01
49.75
0.17
2.57
9.08
79.02
1.48
67.47
4.40
77.06
-25.59
-105.19
-1.60
-65.29
12.46
100.00
-
-
-11.92 -118.78
2000
3.20
31.78
-2.69
-40.89
11.50
100.07
-9.61
-437.33
2.02
35.42
-27.55
-113.28
-0.38
-15.67
24.29
195.04
-4191.28
16765.14
-12.01 -119.65
2001
3.70
36.71
0.42
6.42
9.32
81.08
-5.77
-262.53
0.24
4.25
-15.55
-63.95
-
-
22.60
181.42
-26744.12
106976.47
-5.13
2002
5.43
53.89
-3.63
-55.30
8.67
75.38
0.28
12.55
-1.08
-18.87
-41.77
-171.72
0.34
13.96
21.05
169.03
-9930.84
39723.36
-12.51 -124.64
2003
5.52
54.79
1.20
18.29
14.76
128.42
1.85
84.31
1.05
18.41
0.09
0.38
0.22
9.13
16.48
132.27
9088.65
-36354.61
-1.80
-17.95
2004
5.71
56.75
3.62
55.16
11.54
100.39
4.18
190.14
1.31
22.90
1.62
6.66
0.71
28.88
24.26
194.77
-349.97
1399.88
11.82
117.78
2005
12.85
127.59
11.45
174.22
12.34
107.36
5.62
255.97
3.49
61.09
9.68
39.78
1.41
57.51
22.90
183.86
-32.50
129.99
23.86
237.80
2006
15.12
150.13
11.19
170.32
20.60
179.18
6.42
292.00
6.11
107.03
8.59
35.33
2.19
89.37
22.34
179.37
60.43
-241.73
14.29
142.42
2007
11.76
116.83
11.74
178.68
12.64
109.94
5.73
260.72
7.39
129.47
5.45
22.39
2.98
121.96
20.07
161.12
-19.47
77.88
18.19
181.33
2008
8.36
83.06
12.88
195.99
16.56
144.01
8.03
365.59
8.14
142.73
3.97
16.34
4.60
188.07
23.11
185.57
77.97
-311.89
18.95
188.87
2009
5.41
53.70
8.73
132.78
9.08
78.97
8.52
387.97
6.01
105.25
1.58
6.51
3.19
130.42
20.03
160.83
-12.10
48.40
14.29
142.39
2010
9.62
95.58
6.29
95.74
7.86
68.36
11.55
525.59
6.21
108.81
0.21
0.87
7.19
294.11
20.11
161.42
-10.59
42.38
16.67
166.12
-51.10
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.32 gives net profit ratio of selected allied companies during the study period. GEE, SAIL, ESSAR and other companies showed mixed trend during study
period. They reported –ve net profit ratios during 1999-2002. CG showed increasing trend during 2002-2010.
109
Table 4.33: Comparison of Net Profit Ratio between Glassline Companies
H0 : There is no significant difference in mean net profit ratio between selected
companies.
H1 : There is significant difference in mean net profit ratio between selected companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
8.00
3.27
SGEL
15
-1.31
NILE
15
Total
45
Company
95% Confidence
Interval for Mean
Lower
Bound
Upper
Bound
0.84
6.19
9.81
28.54
7.36
-17.12
14.49
2.83
7.99
2.06
-1.59
7.26
3.17
17.25
2.57
-2.00
8.36
df
Mean Square
F
p-value
654.028
2
327.014
1.103
0.341
12450.407
42
296.438
13104.435
44
ANOVA test
Source of variation Sum of Squares
Between Groups
Within Groups
Total
The table 4.33 shows mean Net Profit ratio of selected companies. The descriptive table
shows that mean value of this ratio was higher in GMM followed by NILE and SGEL. To
check the statistical difference in these mean values researcher had applied ANOVA test.
In ANOVA table, applying this test corresponding F-value and its p-values were
obtained. F-value was 1.103 and p-value was 0.341. As p-value in above table was more
than 0.05, above null hypothesis was accepted and concluded that there is no significant
difference in mean Net Profit ratio between selected companies.
3. Return on Capital Employed
The term capital employed refers to long-term funds supplied by the lenders and owners
of the firm. It provides a test of profitability related to the sources of long-term funds. The
higher the ratio, the more efficient is the use of capital employed. It is calculated by
comparing the profit earned and the capital employed to earn it. This ratio is usually in
percentage. It is also known as “Rate of Return” or “Rate on Capital Employed”.
110
Since the capital employed includes shareholders’ funds and long-term loans, interest
paid on long-term loans will not be deducted from profits while calculating this ratio.
Net Profit Before Interest & Tax
Return on Capital Employed =
x 100
Capital Employed
Capital Employed = Equity Share Capital + Preference Share Capital + All Reserves +P
& L A/c Balance + Long term Loans - Fictitious Assets
Table 4.34: Return on Capital Employed of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
44.80
100.00
12.47
100.00
21.29
100.00
1997
27.38
61.12
13.90
111.47
10.30
48.38
1998
12.60
28.13
12.41
99.52
7.98
37.48
1999
13.05
29.13
13.28
106.50
6.37
29.92
2000
8.50
18.97
13.41
107.54
-0.83
-3.90
2001
5.29
11.81
13.93
111.71
0.00
0.00
2002
2.90
6.47
14.72
118.04
5.54
26.02
2003
6.46
14.42
18.31
146.83
6.87
32.27
2004
12.61
28.15
21.79
174.74
0.00
0.00
2005
22.32
49.82
27.43
219.97
15.04
70.64
2006
30.99
69.17
22.07
176.98
17.76
83.42
2007
26.68
59.55
17.03
136.57
20.00
93.94
2008
23.99
53.55
22.38
179.47
30.31
142.37
2009
19.32
43.13
18.96
152.04
2.87
13.48
2010
19.14
42.72
18.42
147.71
16.30
76.56
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
111
Chart 4.12: Return on Capital Employed of selected Glassline Companies
Return on Capital Employed
50
40
30
GMM
20
SGEL
NILE
10
0
-10
The table 4.34 and chart 4.12 shows return on capital employed of selected companies.
From above table, one can say that in GMM, return on capital employed was decreasing
during 1996-2003, increased in 2004-2006 and again decreased. SGEL showed increasing
trend of return on capital employed. NILE showed a decreasing pattern during
1996-2004, increase in 2005-2008. Among selected companies, GMM showed highest
performance of return on capital employed and hence it is better than other two selected
companies.
112
Table 4.35: Return on Capital Employed of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
40.76
100.00
53.19
100.00
17.45
100.00
21.04
100.00
17.03
100.00
3.39
100.00
17.99
100.00
-
-
1.21
100.00
10.30
100.00
1997
29.79
73.09
31.08
58.43
19.23
110.20
14.70
69.87
17.64
103.58
6.53
192.63
19.57
108.78
-
-
0.00
0.00
7.38
71.65
1998
22.59
55.42
10.43
19.61
20.20
115.76
10.16
48.29
18.29
107.40
7.76
228.91
12.00
66.70
-
-
0.00
0.00
6.31
61.26
1999
20.53
50.37
9.76
18.35
19.02
109.00
9.96
47.34
19.82
116.38
0.00
0.00
9.05
50.31
29.78
100.00
0.00
0.00
1.42
13.79
2000
14.59
35.79
5.17
9.72
19.25
110.32
0.00
0.00
9.57
56.19
0.00
0.00
9.75
54.20
20.99
70.48
0.00
0.00
0.00
0.00
2001
18.03
44.23
6.66
12.52
20.86
119.54
0.00
0.00
5.96
35.00
0.00
0.00
12.96
72.04
19.54
65.61
0.00
0.00
0.00
0.00
2002
16.97
41.63
-0.52
-0.98
18.81
107.79
6.51
30.94
0.00
0.00
0.00
0.00
12.08
67.15
17.23
57.86
0.00
0.00
0.00
0.00
2003
20.56
50.44
16.20
30.46
16.59
95.07
10.78
51.24
9.00
52.85
10.37
305.90
13.07
72.65
22.74
76.36
50.54
4176.86
0.00
0.00
2004
20.61
50.56
40.86
76.82
18.23
104.47
15.66
74.43
12.75
74.87
8.12
239.53
12.09
67.20
26.17
87.88
0.00
0.00
25.36
246.21
2005
16.66
40.87
47.75
89.77
24.89
142.64
21.88
103.99
24.31
142.75
21.81
643.36
20.59
114.45
32.51
109.17
0.00
0.00
68.77
667.67
2006
45.88
112.56
56.05
105.38
26.43
151.46
30.18
143.44
25.13
147.56
12.93
381.42
24.47
136.02
22.43
75.32
-3.77
-311.57
38.03
369.22
2007
37.03
90.85
69.88
131.38
24.37
139.66
39.84
189.35
28.04
164.65
12.51
369.03
21.00
116.73
21.15
71.02
0.00
0.00
51.28
497.86
2008
27.53
67.54
70.81
133.13
16.03
91.86
53.49
254.23
23.68
139.05
14.78
435.99
26.85
149.25
25.72
86.37
-5.69
-470.25
49.44
480.00
2009
18.86
46.27
40.30
75.77
12.23
70.09
56.26
267.40
19.27
113.15
10.87
320.65
25.42
141.30
25.27
84.86
0.00
0.00
31.28
303.69
2010
26.29
64.50
29.94
56.29
14.94
85.62
60.85
289.21
15.48
90.90
4.54
133.92
28.92
160.76
17.56
58.97
0.00
0.00
24.63
239.13
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.35 gives return on capital employed of selected allied companies during the study period. GEE, SAIL, ESSAR and other companies showed mixed trend
during study period. They reported negative return on capital employed during 1999-2002. REMI showed negative return on capital employed during 2006-2008.
113
Table 4.36: Comparison of Return on Capital Employed i.e. ROCE (%) between
Glassline Companies
H0 : There is no significant difference in mean ROCE (%) between selected companies.
H1 : There is significant difference in mean ROCE (%) between selected companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
18.4020
11.34258
SGEL
15
17.3673
NILE
15
Total
45
Company
95% Confidence
Interval for Mean
Lower
Bound
Upper
Bound
2.92864
12.1207
24.6833
4.50776
1.16390
14.8710
19.8636
10.6533
9.15747
2.36445
5.5821
15.7246
15.4742
9.28172
1.38364
12.6857
18.2628
ANOVA test
Source of variation Sum of Squares
Df
Mean Square
F
p-value
3.421
.042
Between Groups
530.951
2
265.475
Within Groups
3259.664
42
77.611
3790.615
44
Total
Table 4.36 gives mean ROCE (%) of selected companies. The descriptive table shows
that mean value of this ratio was higher in GMM company followed by SGEL and NILE.
To check the statistical difference in these mean values researcher had applied ANOVA
test. In ANOVA table, applying this test corresponding F-value and its p-values were
obtained. F-value was 3.421 and p-value was 0.042. As p-value in above table was less
than 0.05, above null hypothesis was rejected and concluded that there is a significant
difference in mean ROCE (%) between selected companies.
4. Return on Assets
Return on Assets (ROA) is an indicator of how profitable company's assets are in
generating profit. Here, the profitability ratio is measured in terms of the relationship
between net profits and assets. The ROA may also be called profit- to-asset ratio. There
are various possible approaches to define net profit and assets, according to the purposes
and intent of the calculation of the ratio. Depending upon how these two terms are
114
defined, many variations of ROA are possible. The concept of net profit may be (i) net
profits after taxes, (ii) net profits after taxes plus interested and fixed assets, and (iii)
tangible assets.
Net Profit After Tax
Return on Total Assets =
x 100
Total Assets
Return on Assets shows how many Rs. of earnings result from each dollar of assets the
company controls. Return on Assets ratio gives an idea of how efficient management is at
using its assets to generate profit.
Return on Assets can vary substantially across different industries. This is the reason why
it is recommended to compare it against company's previous values or the return of a
similar company. The only common rule is that the higher return on assets is, the better,
because the company is earning more money on its assets. A low return on assets
compared with the industry average indicates inefficient use of company's assets. Return
on Assets is one of the profitability ratios and is usually expressed as a percentage.
Table 4.37: Return on Assets of selected Glassline Companies
Year
GMM
SGEL
NILE
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
19.40
100.00
-3.99
100.00
13.21
100.00
1997
13.40
69.07
7.15
-179.39
6.10
46.20
1998
7.49
38.63
4.89
-122.69
2.84
21.54
1999
4.46
22.97
6.33
-158.82
1.65
12.46
2000
3.42
17.63
5.34
-133.84
-4.27
-32.35
2001
3.58
18.46
6.48
-162.43
-2.64
-19.95
2002
2.40
12.35
5.71
-143.19
0.59
4.50
2003
5.34
27.51
7.48
-187.54
2.48
18.77
2004
12.59
64.88
11.24
-281.98
-10.21
-77.33
2005
12.81
66.04
11.66
-292.41
6.53
49.44
2006
19.21
99.04
8.88
-222.74
7.13
53.99
2007
14.71
75.85
6.50
-162.96
7.35
55.68
2008
17.12
88.24
9.92
-248.72
13.30
100.72
2009
11.94
61.56
5.90
-147.99
-3.54
-26.84
2010
12.03
62.01
8.06
-202.08
4.95
37.45
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
115
Chart 4.13: Return on Assets of selected Glassline Companies
Return on Assets
25
20
15
10
GMM
5
SGEL
NILE
0
-5
-10
-15
The table 4.37 and chart 4.13 shows return on assets of selected companies. From the
table, one can say that in GMM, return on assets was decreasing during 1996-2003,
increase in 2004-2008 and again decrease. SGEL showed same trend as GMM. NILE
showed a decreasing pattern during the study period. It reports negative return on assets
for some years. Among selected companies, GMM showed good performance of return
on assets and hence it is better than other two selected companies.
116
Table 4.38: Return on Assets of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
21.37
100.00
18.91
100.00
9.50
100.00
-
-
11.27
100.00
1.99
100.00
3.15
100.00
-
-
-0.01
100.00
5.81
100.00
1997
11.52
53.88
11.64
61.52
7.74
81.52
2.11
100.00
8.47
75.14
0.14
7.27
4.33
137.67
-
-
-0.25
4235.03
1.99
34.23
1998
9.09
42.52
-0.73
-3.86
7.82
82.32
1.32
62.48
7.85
69.67
0.39
19.73
-1.31
-41.72
-
-
0.00
0.00
0.47
8.01
1999
9.38
43.89
0.38
2.00
8.14
85.71
1.36
64.41
7.92
70.30
-7.87
-395.42
-1.61
-51.05
6.18
100.00
-47.99
820822.94
-5.62
-96.66
2000
5.32
24.87
-6.03
-31.90
11.10
116.93
-8.32
-395.46
2.74
24.27
-10.1
-507.27
-0.40
-12.59
8.33
134.83
-40.66
695511.48
-8.45
-145.4
2001
6.70
31.36
1.02
5.42
9.82
103.42
-5.35
-254.37
0.26
2.29
-6.35
-318.75
-
-
9.83
158.97
-43.19
738746.87
-3.89
-66.86
2002
10.40
48.68
-9.06
-47.92
9.03
95.06
0.27
12.93
-1.24
-11.04
-25.8
-1296.2
0.37
11.79
7.46
120.68
-55.13
943020.29
-10.1
-175.1
2003
12.58
58.84
3.65
19.29
16.70
175.88
2.02
95.81
1.43
12.71
0.02
1.23
0.37
11.84
8.05
130.16
70.70
-1209382.48
-1.97
-33.88
2004
12.34
57.76
13.39
70.80
14.97
157.60
5.07
240.73
1.62
14.37
1.02
51.19
2.24
71.09
12.63
204.39
-78.97
1350753.88
18.30
314.79
2005
32.41
151.65
31.81
168.16
16.02
168.71
8.80
417.88
5.92
52.50
9.10
456.96
4.94
156.86
14.38
232.63
-36.24
619942.31
42.40
729.43
2006
39.05
182.70
28.12
148.66
24.73
260.41
10.11
480.15
9.04
80.19
4.70
236.20
8.19
260.35
9.91
160.28
69.30
-1185460.52
23.75
408.50
2007
27.94
130.74
38.84
205.36
12.88
135.62
9.51
451.96
11.64
103.27
3.77
189.32
5.57
176.96
9.21
149.05
-29.16
498743.53
28.86
496.39
2008
17.96
84.04
38.86
205.45
14.88
156.71
13.27
630.34
10.40
92.29
3.94
197.65
12.17
386.61
12.64
204.48 121.63 -2080521.00
28.87
496.57
2009
9.25
43.30
22.51
119.03
8.08
85.11
14.78
701.91
6.62
58.75
1.51
75.90
8.93
283.85
10.61
171.59
-13.67
233866.99
17.28
297.23
2010
17.36
81.22
16.34
86.37
8.14
85.70
17.82
846.31
7.81
69.24
0.08
4.13
13.33
423.49
7.34
118.67
-12.31
210634.25
13.56
233.18
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.38 gives return on assets of selected allied companies during the study period. GEE, SAIL, ESSAR and other companies showed mixed performance
during study period. They reported negative return on assets during 1999-2003. REMI showed negative return on assets throughout the study period.
117
Table 4.39: Comparison of Return on Total Assets between Glassline Companies
H0 : There is no significant difference in mean return on total assets between selected
companies.
H1 : There is significant difference in mean return on total assets between selected
companies.
Descriptive Statistics
Company
N
Mean
Std.
Deviation
Std.
Error
95% Confidence Interval
for Mean
Lower
Upper
Bound
Bound
GMM
15
10.66
5.82
1.50
7.43
13.88
SGEL
15
6.77
3.62
0.93
4.76
8.77
NILE
15
3.03
6.44
1.66
-0.53
6.60
Total
45
6.82
6.17
0.92
4.96
8.67
Df
Mean Square
F
p-value
7.388
0.002
ANOVA test
Source of variation Sum of Squares
Between Groups
436.531
2
218.266
Within Groups
1240.763
42
29.542
1677.294
44
Total
The table 4.39 shows mean return on total assets of selected companies. The descriptive
table shows that mean value of this ratio was higher in GMM followed by SGEL and
NILE. To check the statistical difference in these mean values researcher had applied
ANOVA test. In ANOVA table, applying this test corresponding F-value and its p-values
were obtained. F-value was 7.388 and p-value was 0.002. As p-value in above table was
less than 0.05, above null hypothesis was rejected and concluded that there a is significant
difference in mean return on total assets between selected companies.
5. Return on Equity
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
118
belonging to the equity shareholders. The ratio reveals how profitably the owner’s funds
have been utilized by the firm.
Net Profit After Interest, Tax & Dividends
Return on Equity =
x 100
Equity Shareholders’ Funds
Equity Shareholders Funds = Equity Share Capital + All Reserves & Surplus – Fictitious
Assets. This ratio measures how efficiently the equity shareholder’s funds are being used
in the business.
Table 4.40: Return on Equity of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
31.50
100.00
-5.07
100.00
15.37
100.00
1997
22.10
70.15
10.14
-199.84
7.68
49.97
1998
11.70
37.15
7.35
-144.91
3.45
22.45
1999
6.62
21.02
9.24
-182.02
2.07
13.44
2000
4.30
13.64
7.92
-156.05
-5.84
-38.00
2001
4.06
12.88
9.87
-194.58
-3.51
-22.81
2002
2.54
8.07
9.56
-188.32
0.84
5.49
2003
5.34
16.94
12.46
-245.59
3.38
21.98
2004
12.70
40.31
18.61
-366.79
-13.88
-90.31
2005
14.33
45.48
20.69
-407.84
10.09
65.69
2006
19.90
63.17
20.35
-401.02
12.66
82.38
2007
17.41
55.25
14.82
-292.11
15.20
98.94
2008
19.39
61.56
19.87
-391.63
23.45
152.61
2009
11.94
37.90
13.05
-257.13
-8.57
-55.81
2010
12.03
38.18
16.12
-317.66
11.63
75.66
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
119
Chart 4.14: Return on Equity of selected Glassline Companies
Return on Equity
35
30
25
20
15
GMM
10
SGEL
5
NILE
0
-5
-10
-15
-20
The table 4.40 and chart 4.14 shows return on equity of selected companies. From the
table, one can say that in GMM, return on equity was decreasing during 1996-2003,
increase in 2004-2008 and again decrease. SGEL showed same trend as GMM. NILE
showed a decreasing pattern during 1996-2005 and then increase up to 2008. Among
selected companies, GMM showed good performance of return on equity and hence it is
better than other two selected companies.
120
Table 4.41: Return on Equity of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
36.76
100.00
36.98
100.00
18.10
100.00
-
-
21.02
100.00
5.31
100.00
10.08
100.00
-
-
-1.00
100.00
16.26
100.00
1997
20.12
54.72
21.49
58.10
15.32
84.65
6.51
100.00
15.06
71.65
0.40
7.58
3.24
32.14
-
-
0.00
0.00
6.08
37.41
1998
15.67
42.64
-1.16
-3.13
16.04
88.62
3.89
59.75
14.07
66.93
1.02
19.27
-4.94
-49.01
-
-
0.00
0.00
1.55
9.56
1999
13.88
37.76
0.68
1.83
14.28
78.91
4.21
64.67
12.03
57.23
-25.90
-487.79
-7.89
-78.27
26.51
100.00
0.00
0.00
-22.52
-138.48
2000
7.24
19.69
-12.46
-33.70
16.67
92.13
0.00
0.00
4.62
21.99
-43.54
-819.93
-1.84
-18.25
26.89
101.43
0.00
0.00
-32.67
-200.91
2001
7.57
20.60
2.13
5.77
16.60
91.74
0.00
0.00
0.46
2.19
-35.07
-660.38
-
-
24.88
93.85
0.00
0.00
-16.06
-98.77
2002
10.42
28.35
-18.95
-51.26
15.73
86.93
-5.60
-86.02
-2.38
-11.30
562.53
10593.31
4.95
49.11
22.41
84.53
0.00
0.00
-60.32
-370.96
2003
12.58
34.23
6.88
18.59
23.88
131.96
4.81
73.89
2.72
12.94
0.35
6.65
2.04
20.24
34.24
129.16
-112.43
11243.00
-12.05
-74.11
2004
12.34
33.58
24.03
64.98
18.49
102.18
15.94
244.85
3.33
15.85
10.09
189.98
10.05
99.70
42.76
161.30
0.00
0.00
49.87
306.67
2005
32.41
88.18
53.09
143.56
19.29
106.57
31.99
491.40
13.68
65.08
34.89
656.98
25.83
256.25
47.45
178.99
0.00
0.00
66.14
406.77
2006
39.05
106.23
43.58
117.84
32.27
178.29
35.67
547.93
27.15
129.16
13.15
247.65
40.00
396.83
36.30
136.93
26.80
-2680.00
31.85
195.85
2007
27.94
76.02
47.55
128.58
21.41
118.31
32.59
500.61
29.22
138.98
9.77
183.97
30.81
305.65
32.58
122.90
0.00
0.00
35.82
220.32
2008
17.96
48.87
43.02
116.34
27.62
152.59
39.85
612.14
28.39
135.05
9.25
174.28
28.10
278.77
39.89
150.47
28.17
-2817.00
32.68
200.97
2009
9.25
25.18
23.83
64.43
15.28
84.42
37.05
569.12
20.86
99.22
3.88
73.03
17.51
173.71
33.63
126.86
0.00
0.00
21.92
134.81
2010
17.36
47.22
18.38
49.71
13.53
74.74
41.47
637.02
20.29
96.52
0.25
4.63
30.60
303.57
24.34
91.81
0.00
0.00
20.27
124.68
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.41 gives return on equity of selected allied companies during the study period. GEE, SAIL, ESSAR and other companies showed mixed performance
during study period. They reported negative return on equity during 1999-2001. AWL, BBL and CUMI showed decreasing pattern during 1996-2001, increasing
trend during 2002-2006 and again decreasing trend.
121
Table 4.42: Comparison of Return on Equity i.e. ROE (%) between Glassline
Companies
H0 : There is no significant difference in mean ROE (%) between selected companies.
H1 : There is significant difference in mean ROE (%) between selected companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
13.2100
9.08076
SGEL
15
13.8053
NILE
15
Total
45
Company
95% Confidence
Interval for Mean
Lower
Bound
Upper
Bound
2.34464
8.1812
18.2388
5.41742
1.39877
10.8053
16.8054
7.9840
11.05602
2.85465
1.8614
14.1066
11.6664
9.02570
1.34547
8.9548
14.3781
ANOVA test
Source of variation Sum of Squares
Df
Mean Square
F
p-value
1.972
.152
Between Groups
307.767
2
153.884
Within Groups
3276.619
42
78.015
3584.386
44
Total
Table 4.42 provides mean ROE (%) of selected companies. The descriptive table shows
that mean value of this ratio was higher in SGEL followed by GMM and NILE. To check
the statistical difference in these mean values researcher had applied ANOVA test. In
ANOVA table, applying this test corresponding F-value and its p-values were obtained.
F-value was 1.972 and p-value was 0.152. As p-value in above table was more than 0.05,
above null hypothesis was accepted and concluded that there is no significant difference
in mean ROE (%) between selected companies.
6. Inventory Turnover Ratio
A ratio showing how many times a company's inventory is sold and replaced over a
period. Generally calucated as:
Sales
=
Inventory
122
The days in the period can then be divided by the inventory turnover formula to calculate
the days it takes to sell the inventory on hand or "inventory turnover days".
Although the first calculation is more frequently used, COGS (cost of goods sold) may be
substituted because sales are recorded at market value, while inventories are usually
recorded at cost. Also, average inventory may be used instead of the ending inventory
level to minimize seasonal factors.
This ratio should be compared against industry averages. A low turnover implies poor
sales and, therefore, excess inventory. A high ratio implies either strong sales or
ineffective buying.
High inventory levels are unhealthy because they represent an investment with a rate of
return of zero. It also opens the company up to trouble should prices begin to fall.
Table 4.43: Inventory Turnover Ratio of selected Glassline Companies
Year
GMM
SGEL
NILE
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
3.55
100
1.71
100
3.15
100
1997
3.45
97.18
1.80
105.26
1.68
53.33
1998
3.01
84.79
1.61
94.15
1.34
42.54
1999
3.14
88.45
1.99
116.37
1.59
50.48
2000
2.80
78.87
2.46
143.86
1.49
47.30
2001
3.10
87.32
3.41
199.42
1.68
53.33
2002
2.87
80.85
3.76
219.88
2.61
82.86
2003
3.53
99.44
4.85
283.63
2.74
86.98
2004
3.92
110.42
4.95
289.47
2.51
79.68
2005
3.97
111.83
4.39
256.73
2.95
93.65
2006
4.15
116.90
3.75
219.30
3.07
97.46
2007
4.03
113.52
3.50
204.68
3.59
113.97
2008
3.81
107.32
3.57
208.77
4.03
127.94
2009
3.49
98.31
2.77
161.99
2.94
93.33
2010
3.79
106.76
2.36
138.01
3.43
108.89
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
123
Chart 4.15: Inventory Turnover Ratio of selected Glassline Companies
6
Inventory Turnover Ratio
5
4
GMM
3
SGEL
2
NILE
1
0
It reveals from the table 4.43 and chart 4.15 that the inventory turnover ratio of GMM
was showing flat trend during study period. In SGEL, the inventory turnover ratio was
showing increasing trend during 1996-2005 and after that it was decreased. NILE shows
decreasing trend during 1996-2005 and after that it was increased. GMM shows better
performance of inventory turnover ratio as compared to other companies and hence it is
better.
124
Table 4.44: Inventory Turnover Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
11.98
100
4.89
100
7.43
100
7.66
100
4.34
100
1.11
100
4.4
100
-
-
0.91
100
2.97
100
1997
11.50
95.99
4.27
87.32
7.39
99.46
5.99
78.20
4.10
94.47
3.23
290.99
4.45
101.14
-
-
5.45
598.90
2.39
80.47
1998
12.29
102.59
4.91
100.41
7.09
95.42
5.86
76.50
4.47
103.00
3.83
345.05
5.71
129.77
0.00
0.00
2.32
254.95
2.09
70.37
1999
12.39
103.42
4.93
100.82
6.86
92.33
6.04
78.85
5.56
128.11
3.02
272.07
4.97
112.95
17.10
100.00
1.59
174.73
2.10
70.71
2000
10.40
86.81
4.50
92.02
6.61
88.96
5.55
72.45
4.78
110.14
3.52
317.12
5.17
117.50
10.83
63.33
0.19
20.88
2.85
95.96
2001
11.39
95.08
4.69
95.91
6.58
88.56
5.66
73.89
3.83
88.25
3.99
359.46
5.21
118.41
11.58
67.72
0.05
5.49
3.57
120.20
2002
13.22
110.35
4.25
86.91
6.90
92.87
8.94
116.71
3.17
73.04
4.12
371.17
4.46
101.36
8.32
48.65
0.14
15.38
3.65
122.90
2003
13.84
115.53
4.62
94.48
7.55
101.62
8.94
116.71
3.76
86.64
6.91
622.52
6.85
155.68
10.51
61.46
0.21
23.08
4.95
166.67
2004
9.88
82.47
5.46
111.66
8.30
111.71
10.04
131.07
2.63
60.60
6.31
568.47
12.92
293.64
9.32
54.50
2.09
229.67
7.10
239.06
2005
12.74
106.34
7.07
144.58
8.49
114.27
12.64
165.01
3.31
76.27
8.03
723.42
22.27
506.14
10.78
63.04
5.20
571.43
8.80
296.30
2006
14.79
123.46
8.74
178.73
8.78
118.17
14.96
195.30
3.58
82.49
5.66
509.91
16.01
363.86
6.97
40.76
4.06
446.15
6.17
207.74
2007
11.29
94.24
10.02
204.91
8.41
113.19
16.64
217.23
5.04
116.13
4.68
421.62
9.10
206.82
6.44
37.66
4.17
458.24
5.99
201.68
2008
9.36
78.13
9.03
184.66
7.84
105.52
16.69
217.89
4.40
101.38
5.37
483.78
10.54
239.55
7.54
44.09
5.92
650.55
6.65
223.91
2009
7.12
59.43
7.22
147.65
6.77
91.12
18.20
237.60
3.16
72.81
5.96
536.94
13.11
297.95
7.72
45.15
4.48
492.31
5.62
189.23
2010
7.77
64.86
8.46
173.01
6.64
89.37
19.08
249.09
3.16
72.81
4.75
427.93
9.26
210.45
6.21
36.32
4.72
518.68
4.50
151.52
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.44 shows the inventory turnover ratio of selected allied companies in last fifteen years. On an average, inventory turnover ratio of AWL showed better
performance among all allied companies and hence it is the best company among selected allied companies. All other companies showed fluctuated trend
throughout the study period.
125
Table 4.45: Comparison of Inventory Turnover Ratio between Glassline Companies
H0 : There is no significant difference in mean inventory turnover ratio between selected
companies.
H1 : There is significant difference in mean inventory turnover ratio between selected
companies.
Descriptive Statistics
Company
N
Mean
Std.
Deviation
Std.
Error
95% Confidence
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
3.5073
.43937
.11345
3.2640
3.7507
SGEL
15
3.1253
1.12170
.28962
2.5042
3.7465
NILE
15
2.5867
.84655
.21858
2.1179
3.0555
Total
45
3.0731
.91415
.13627
2.7985
3.3478
ANOVA test
Source of variation Sum of Squares
Df
Mean Square
F
p-value
4.441
.018
Between Groups
6.419
2
3.209
Within Groups
30.351
42
.723
36.769
44
Total
Table 4.45 provides mean inventory turnover ratio of selected companies. The descriptive
table shows that mean value of this ratio was higher in SGEL followed by GMM and
NILE. To check the statistical difference in these mean values researcher had applied
ANOVA test. In ANOVA table, applying this test corresponding F-value and its p-values
were obtained. F-value was 4.441 and p-value was 0.018. As p-value in above table was
less than 0.05, above null hypothesis was rejected and concluded that there a is significant
difference in mean inventory turnover ratio between selected companies.
D.
LEVERAGE CAPITAL STRUCTURE RATIO
1 Debt-Equity Ratio
This, ratio establishes relationship between the outside long-term liabilities and owners'
funds. It shows the proportion of long-term External Equities and Internal Equities i.e.
126
proportion of funds provided by long-term creditors and that provided by shareholders or
proprietors. A higher ratio means that outside creditors has a larger claim than the owners
of the business. The company with high-debt position will have to accept stricter
conditions from the lenders while borrowing money.
External Equities
Debt – Equity Ratio =
Internal Equities
Shareholders Fund
External Equities = All Long term liabilities + Current Liabilities
Internal Liabilities = Equity share + Preference share + Reserves & Surplus + P & L A/cIntangible or Fictitious Assets.
Table 4.46: Debt-Equity Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
0.52
100.00
0.30
100.00
0.41
100.00
1997
0.64
123.08
0.37
123.33
0.21
51.22
1998
0.60
115.38
0.46
153.33
0.24
58.54
1999
0.52
100.00
0.48
160.00
0.23
56.10
2000
0.34
65.38
0.47
156.67
0.31
75.61
2001
0.19
36.54
0.50
166.67
0.39
95.12
2002
0.10
19.23
0.59
196.67
0.47
114.63
2003
0.03
5.77
0.67
223.33
0.49
119.51
2004
0.00
0.00
0.66
220.00
0.45
109.76
2005
0.07
13.46
0.72
240.00
0.57
139.02
2006
0.07
13.46
1.05
350.00
0.81
197.56
2007
0.11
21.15
1.29
430.00
1.09
265.85
2008
0.16
30.77
1.13
376.67
1.02
248.78
2009
0.06
11.54
1.11
370.00
1.20
292.68
2010
0.00
0.00
1.10
366.67
1.53
373.17
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
127
Chart 4.16 : Debt-Equity Ratio of selected Glassline Companies
1.8
Debt-Equity Ratio
1.6
1.4
1.2
1
GMM
0.8
SGEL
0.6
NILE
0.4
0.2
0
The table 4.46 and chart 4.16 shows debt-equity ratio of selected companies. From the
table, one can say that in GMM, trend of debt-equity ratio was decreasing throughout the
study period. SGEL and NILE showed an increasing trend. Among selected companies,
GMM showed good performance of debt-equity ratio and hence it is better than other two
selected companies.
128
Table 4.47: Debt-Equity Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
0.77
100.00
0.98
100.00
0.97
100.00
0.82
100.00
0.74
100.00
1.56
100.00
1.06
100.00
-
-
0.80
100.00
1.82
100.00
1997
0.77
100.00
0.90
91.84
0.98
101.03
0.90
109.76
0.82
110.81
1.72
110.26
0.97
91.51
-
-
1.19
148.75
1.93
106.04
1998
0.77
100.00
0.72
73.47
1.05
108.25
0.95
115.85
0.79
106.76
1.69
108.33
1.23
116.04
-
-
1.93
241.25
2.20
120.88
1999
0.62
80.52
0.69
70.41
0.92
94.85
1.19
145.12
0.65
87.84
1.91
122.44
2.00
188.68
1.05
100.00
8.22
1027.5
2.64
145.05
2000
0.43
55.84
0.92
93.88
0.64
65.98
1.62
197.56
0.60
81.08
2.71
173.72
2.78
262.26
0.92
87.62
0
0
2.95
162.09
2001
0.25
32.47
1.07
109.18
0.61
62.89
2.06
251.22
0.73
98.65
3.83
245.51
3.19
300.94
0.82
78.10
0
0
2.99
164.29
2002
0.07
9.09
1.09
111.22
0.73
75.26
1.65
201.22
0.84
113.51
12.06
773.08
3.87
365.09
1.08
102.86
0
0
3.82
209.89
2003
0
0
0.99
101.02
0.59
60.82
1.25
152.44
0.90
121.62
49.56
3176.92
4.01
378.30
1.41
134.29
0
0
5.02
275.82
2004
0
0
0.84
85.71
0.33
34.02
1.06
129.27
0.98
132.43
10.80
692.31
3.47
327.36
1.33
126.67
0
0
2.86
157.14
2005
0
0
0.72
73.47
0.22
22.68
0.90
109.76
1.19
160.81
4.41
282.69
3.09
291.51
1.16
110.48
0
0
0.94
51.65
2006
0
0
0.60
61.22
0.26
26.80
0.62
75.61
1.72
232.43
2.10
134.62
3.01
283.96
1.34
127.62
0
0
0.44
24.18
2007
0
0
0.35
35.71
0.50
51.55
0.44
53.66
1.68
227.03
1.69
108.33
2.73
257.55
1.45
138.10
0
0
0.28
15.38
2008
0
0
0.15
15.31
0.78
80.41
0.23
28.05
1.63
220.27
1.47
94.23
1.00
94.34
1.19
113.33
0
0
0.18
9.89
2009
0
0
0.08
8.16
0.88
90.72
0.07
8.54
1.96
264.86
1.46
93.59
0.58
54.72
0.97
92.38
51.95
6493.75
0.21
11.54
2010
0
0
0.09
9.18
0.78
80.41
0.03
3.66
1.85
250.00
1.85
118.59
0.85
80.19
1.10
104.76
0
0
0.39
21.43
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.47 gives debt-equity ratio of selected allied companies during the study period. GEE, SAIL and ESSAR showed increasing trend during 1996-2003 and
then decreasing trend was reported till 2010. Other companies debt-equity ratio was flat during 1996-2010.
129
Table 4.48: Comparison of Debt-Equity Ratio between Glassline Companies
H0 : There is no significant difference in mean debt-equity ratio between selected
companies.
H1 : There is significant difference in mean debt-equity ratio between selected companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
.2273
.23128
SGEL
15
.7267
NILE
15
Total
45
Company
95% Confidence
Interval for Mean
Lower
Bound
Upper
Bound
.05972
.0993
.3554
.32246
.08326
.5481
.9052
.6280
.40612
.10486
.4031
.8529
.5273
.38764
.05779
.4109
.6438
ANOVA test
Source of variation Sum of Squares
Df
Mean Square
F
p-value
9.761
.000
Between Groups
2.098
2
1.049
Within Groups
4.514
42
.107
6.612
44
Total
Table 4.48 shows mean Debt-Equity ratio of selected companies. The descriptive table
shows that mean value of this ratio was higher in SGEL followed by NILE and GMM. To
check the statistical difference in these mean values researcher had applied ANOVA test.
In ANOVA table, applying this test corresponding F-value and its p-values were
obtained. F-value was 9.761 and p-value was 0.000. As p-value in above table was less
than 0.05, above null hypothesis was rejected and concluded that there a is significant
difference in mean Debt-Equity ratio between selected companies.
2 Proprietary Ratio
This is a variant of the debt-to-equity ratio. It is also known as equity ratio or net worth to
total assets ratio.
This ratio relates the shareholder's funds to total assets. Proprietary / Equity ratio
indicates the long-term or future solvency position of the business.
130
The formula is as given below :
Proprietors Fund
Proprietary Ratio =
Total Assets
Shareholder's funds include equity share capital plus all reserves and surpluses items.
Total assets include all assets, including Goodwill. Some authors exclude goodwill from
total assets. In that case the total shareholder's funds are to be divided by total tangible
assets. As the total assets are always equal to total liabilities, the total liabilities, may also
be used as the denominator in the above formula.
This ratio throws light on the general financial strength of the company. It is also
regarded as a test of the soundness of the capital structure. Higher the ratio or the share of
shareholders in the total capital of the company, better is the long-term solvency position
of the company. A low proprietary ratio will include greater risk to the creditors.
Table 4.49: Proprietary Ratio of selected Glassline Companies
Year
GMM
SGEL
NILE
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
0.62
100.00
0.79
100.00
0.86
100.00
1997
0.61
98.46
0.71
89.77
0.79
92.46
1998
0.64
104.00
0.67
84.66
0.82
95.93
1999
0.67
109.28
0.69
87.26
0.80
92.70
2000
0.80
129.26
0.67
85.77
0.73
85.12
2001
0.88
143.38
0.66
83.47
0.75
87.47
2002
0.94
153.07
0.60
76.04
0.70
81.88
2003
1.00
162.41
0.60
76.36
0.73
85.43
2004
0.99
160.96
0.60
76.88
0.74
85.63
2005
0.89
145.21
0.56
71.70
0.65
75.27
2006
0.97
156.77
0.44
55.54
0.56
65.54
2007
0.85
137.29
0.44
55.79
0.48
56.27
2008
0.88
143.33
0.50
63.51
0.57
66.00
2009
1.00
162.41
0.45
57.56
0.41
48.09
2010
1.00
162.41
0.50
63.62
0.43
49.50
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
131
Chart 4.17: Proprietary Ratio of selected Glassline Companies
1.20
Proprietary Ratio
1.00
0.80
GMM
0.60
SGEL
0.40
NILE
0.20
0.00
Table 4.49 and chart 4.17 shows the proprietary ratio of selected companies. From the
table, one can say that in GMM, proprietary ratio increased during 1996-2003, decreased
during 2004-2007 and again increased till 2010. SGEL and NILE showed a decreasing
trend in this ratio throughout the study period. Among selected companies, GMM showed
good performance of proprietary ratio and hence it is better than other two selected
companies.
132
Table 4.50: Proprietary Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
0.58
100.00
0.51
100.00
0.52
100.00
-
-
0.54
100.00
0.38
100.00
0.57
100.00
-
-
0.63
100.00
0.36
100.00
1997
0.57
98.46
0.54
105.88
0.51
96.29
0.57
100.00
0.56
104.87
0.36
95.91
-
-
-
-
0.52
100.00
0.33
91.50
1998
0.58
99.71
0.63
123.33
0.49
92.89
0.48
84.58
0.56
104.09
0.38
102.39
0.61
106.42
-
-
0.41
78.33
0.30
83.78
1999
0.68
116.23
0.56
109.08
0.57
108.63
0.45
79.71
0.66
122.83
0.30
81.06
0.36
63.35
0.49
100.00
-0.12
-22.65
0.25
69.80
2000
0.73
126.33
0.48
94.66
0.67
126.92
0.33
58.15
0.59
110.41
0.23
61.87
0.32
55.32
0.55
113.17
-0.53
-102.40
0.26
72.38
2001
0.88
152.19
0.48
93.84
0.59
112.74
0.35
62.30
0.56
104.73
0.18
48.27
0.30
53.51
0.55
111.69
-1.00
-192.07
0.24
67.69
2002
1.00
171.70
0.48
93.49
0.57
109.36
0.42
74.19
0.52
97.68
-0.0
-12.24
0.27
48.18
0.43
88.99
-1.65
-315.47
0.17
47.21
2003
1.00
171.90
0.53
103.75
0.70
133.28
0.49
86.16
0.53
98.22
0.07
18.47
0.26
46.40
0.40
81.37
-1.04
-199.74
0.16
45.71
2004
1.00
171.98
0.56
108.96
0.81
154.23
0.51
88.73
0.49
90.65
0.10
26.94
0.34
59.27
0.45
93.14
-2.11
-404.75
0.37
102.65
2005
1.00
171.98
0.60
117.13
0.83
158.31
0.57
99.28
0.43
80.68
0.26
69.55
0.29
51.13
0.47
95.96
-2.04
-390.41
0.64
179.33
2006
1.00
171.98
0.65
126.15
0.77
146.06
0.68
119.86
0.33
62.08
0.36
95.38
0.30
52.85
0.40
82.15
-1.41
-270.01
0.75
208.58
2007
1.00
171.98
0.82
159.71
0.60
114.64
0.71
125.44
0.40
74.31
0.39
102.91
0.29
50.34
0.41
84.77
-1.97
-377.91
0.81
225.31
2008
1.00
171.98
0.90
176.60
0.54
102.70
0.91
160.57
0.37
68.34
0.43
113.41
0.62
108.19
0.49
100.51
-0.03
-5.91
0.88
247.09
2009
1.00
171.98
0.94
184.73
0.53
100.81
0.96
168.39
0.32
59.20
0.39
103.94
0.61
106.81
0.52
106.30
0.06
11.54
0.79
220.48
2010
1.00
171.98
0.89
173.75
0.60
114.67
0.99
173.05
0.38
71.74
0.33
88.76
0.50
88.32
0.44
90.99
-0.07
-14.28
0.67
187.03
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.50 gives proprietary ratio of selected allied companies during the study period. GEE, SAIL and ESSAR showed decreasing trend during 1996-2002 and
then increasing trend was reported till 2010. The ratio of other companies was fluctuated during 1996-2010.
133
Table 4.51: Comparison of Proprietary Ratio between Glassline Companies
H0 : There is no significant difference in mean proprietary ratio between selected
companies.
H1 : There is significant difference in mean proprietary ratio between selected companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
0.84
0.14
SGEL
15
0.59
NILE
15
Total
45
Company
95% Confidence
Interval for Mean
Lower
Bound
Upper
Bound
0.03
0.76
0.93
0.10
0.02
0.53
0.65
0.66
0.14
0.03
0.58
0.74
0.70
0.17
0.02
0.65
0.75
ANOVA test
Source of variation Sum of Squares
Df
Mean Square
F
p-value
14.498
0.000
Between Groups
0.524
2
0.262
Within Groups
0.760
42
0.018
1.284
44
Total
Table 4.51 shows mean Proprietary Ratio of selected companies. The descriptive table
shows that mean value of this ratio was higher in GMM followed by NILE and SGEL. To
check the statistical difference in these mean values researcher had applied ANOVA test.
In ANOVA table, applying this test corresponding F-value and its p-values were
obtained. F-value was 14.498 and p-value was 0.000. As p-value in above table was less
than 0.05, above null hypothesis was rejected and concluded that there is a significant
difference in mean Proprietary Ratio between selected companies.
3 Interest Coverage Ratio
A ratio used to determine how easily a company can pay interest on outstanding debt. The
interest coverage ratio is calculated by dividing a company's earnings before interest and
taxes (EBIT) of one period by the company's interest expenses of the same period:
EBIT
Interest Coverage Ratio =
Interest Expense
134
The lower the ratio, the more the company is burdened by debt expense. When a
company's interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may
be questionable. An interest coverage ratio below 1 indicates the company is not
generating sufficient revenues to satisfy interest expenses.
Table 4.52: Interest Coverage Ratio of selected Glassline Companies
GMM
SGEL
NILE
Year
Ratio
Indices
Ratio
Indices
Ratio
Indices
1996
12.48
100.00
2.21
100.00
8.05
100.00
1997
5.31
42.55
2.41
109.05
4.12
51.18
1998
3.12
25.00
1.93
87.33
2.11
26.21
1999
2.78
22.28
2.02
91.40
2.08
25.84
2000
3.13
25.08
2.12
95.93
-0.23
-2.86
2001
3.60
28.85
2.53
114.48
0.29
3.60
2002
2.45
19.63
2.25
101.81
1.19
14.78
2003
6.93
55.53
2.57
116.29
1.49
18.51
2004
12.67
101.52
4.03
182.35
-2.78
-34.53
2005
21.59
173.00
4.37
197.74
2.92
36.27
2006
22.17
177.64
3.64
164.71
3.06
38.01
2007
15.94
127.72
2.69
121.72
3.34
41.49
2008
12.43
99.60
3.38
152.94
4.13
51.30
2009
13.02
104.33
2.14
96.83
0.41
5.09
2010
25.76
206.41
2.87
129.86
1.97
24.47
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
135
Chart 4.18: Interest Coverage Ratio of selected Glassline Companies
Interest Coverage Ratio
30
25
20
GMM
15
SGEL
10
NILE
5
0
-5
Table 4.52 and chart 4.18 reveals that the interest Coverage ratio of GMM was showing
an upward trend throughout study period. In SGEL, the Interest Coverage Ratio was
showing increasing pattern during 1996-2005 and then it was decreased. But NILE
showed fluctuating pattern during study period. For few years, the ratio became negative
in NILE. Overall GMM shows better performance of interest Coverage ratio as compared
to other companies and hence it is better.
136
Table 4.53: Interest Coverage Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
4.22
100.00
4.57
100.00
2.22
100.00
2.03
100.00
1.57
100.00
2.76
100.00
1.79
100.00
-
-
-0.05
100.00
2.63
100.00
1997
2.74
64.93
2.89
63.24
2.16
97.30
1.31
64.53
2.38
151.59
1.03
37.32
2.30
128.49
-
-
0.72
-1440.0
1.50
57.03
1998
2.31
54.74
1.00
21.88
2.21
99.55
1.23
60.59
2.99
190.45
1.06
38.41
1.22
68.16
0.00
0.00
0.27
-540.00
1.10
41.83
1999
2.63
62.32
1.06
23.19
2.44
109.91
1.25
61.58
2.63
167.52
-0.13
-4.71
0.85
47.49
1.61
100.00
-1.00
2000.00
0.20
7.60
2000
2.23
52.84
0.46
10.07
2.75
123.87
-0.18
-8.87
1.81
115.29
0.07
2.54
0.82
45.81
2.69
167.08
-0.24
480.00
0.04
1.52
2001
2.95
69.91
0.60
13.13
4.16
187.39
-0.99
-48.77
1.03
65.61
0.49
17.75
0.97
54.19
3.52
218.63
-0.23
460.00
0.42
15.97
2002
6.88
163.03
-0.05
-1.09
3.68
165.77
0.73
35.96
0.74
47.13
-0.99
-35.87
1.10
61.45
3.04
188.82
-0.18
360.00
-0.49
-18.63
2003
11.30
267.77
1.31
28.67
4.97
223.87
1.42
69.95
1.29
82.17
0.99
35.87
1.09
60.89
3.70
229.81
4.67
-9340.0
0.67
25.48
2004
15.63
370.38
3.08
67.40
8.97
404.05
2.94
144.83
1.63
103.82
1.13
40.94
1.36
75.98
5.28
327.95
-1.98
3960.00
3.75
142.59
2005
14.92
353.55
5.68
124.29
18.53
834.68
6.07
299.01
2.88
183.44
2.65
96.01
2.24
125.14
8.91
553.42
-0.29
580.00
15.36
584.03
2006
59.42
1408.06
8.68
189.93
25.54
1150.45
7.83
385.71
3.25
207.01
2.06
74.64
2.98
166.48
8.12
504.35
-0.50
1000.00
13.20
501.90
2007
31.89
755.69
11.73
256.67
12.97
584.23
10.61
522.66
4.44
282.80
1.92
69.57
2.73
152.51
6.45
400.62
-0.71
1420.00
29.37
1116.73
2008
14.44
342.18
25.16
550.55
5.22
235.14
16.41
808.37
3.95
251.59
2.00
72.46
4.84
270.39
7.18
445.96
-0.84
1680.00
46.70
1775.67
2009
12.24
290.05
11.84
259.08
3.12
140.54
22.51
1108.87
2.53
161.15
1.59
57.61
3.65
203.91
8.47
526.09
-2.86
5720.00
37.23
1415.59
2010
64.32
1524.171
8.19
179.2123
4.53
204.0541
46.52
2291.626
2.27
144.586
0.99
35.86957
7.04
393.2961
6.75
419.2547
-1.63
3260
26.2
996.1977
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.53 shows the interest Coverage ratio of selected allied companies in last fifteen years. The interest Coverage ratio of AWL, CUMI and JSPL was showing
increasing pattern whereas all other companies showed either decreasing or mix pattern throughout the study period. Thus AWL is better than other selected allied
companies.
137
Table 4.54: Comparison of Interest Coverage Ratio between Glassline Companies
H0 : There is no significant difference in mean interest Coverage ratio between selected
companies.
H1 : There is significant difference in mean interest Coverage ratio between selected
companies.
Descriptive Statistics
Company
N
Mean
Std.
Deviation
Std.
Error
95% Confidence
Interval for Mean
Lower
Upper
Bound
Bound
GMM
15
10.8920
7.83085
2.02192
6.5554
15.2286
SGEL
15
2.7440
.76446
.19738
2.3207
3.1673
NILE
15
2.1433
2.43927
.62982
.7925
3.4942
Total
45
5.2598
6.15416
.91741
3.4109
7.1087
ANOVA test
Source of variation Sum of Squares
Df
Mean Square
F
p-value
15.837
.000
Between Groups
716.449
2
358.225
Within Groups
949.993
42
22.619
1666.442
44
Total
Mean interest Coverage ratio of selected companies is given in the table 4.54. The
descriptive table shows that mean value of this ratio was higher in GMM followed by
SGEL and NILE. To check the statistical difference in these mean values researcher had
applied ANOVA test. In ANOVA table, applying this test corresponding F-value and its
p-values were obtained. F-value was 15.837 and p-value was 0.000. As p-value in above
table was less than 0.05, above null hypothesis was rejected and concluded that there is a
significant difference in mean interest Coverage ratio between selected companies.
4 Long Term Debt-Equity Ratio
A measure of a company's financial leverage calculated by dividing its total
liabilities by stockholders' equity. It indicates what proportion of equity and debt the
company is using to finance its assets.
138
Total Liabilities
Long Term Debt-Equity Ratio =
Shareholders Equity
Note: Sometimes only interest-bearing, long-term debt is used instead of total liabilities in
the calculation. Also known as the Personal Debt/Equity Ratio, this ratio can be applied to
personal financial statements as well as corporate ones. A high debt/equity ratio generally
means that a company has been aggressive in financing its growth with debt. This can
result in volatile earnings as a result of the additional interest expense.
If a lot of debt is used to finance increased operations (high debt to equity), the company
could potentially generate more earnings than it would have without this outside
financing. If this were to increase earnings by a greater amount than the debt cost
(interest), then the shareholders benefit as more earnings are being spread among the
same amount of shareholders. However, the cost of this debt financing may outweigh the
return that the company generates on the debt through investment and business activities
and become too much for the company to handle. This can lead to bankruptcy, which
would leave shareholders with nothing. The debt/equity ratio also depends on the
industry in which the company operates.
Table 4.55: Long Term Debt-Equity Ratio of selected Glassline Companies
Year
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Ratio
0.52
0.64
0.52
0.37
0.29
0.15
0.03
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0
GMM
Indices
100.00
123.08
100.00
71.15
55.77
28.85
5.77
1.92
0.00
0.00
0.00
0.00
0.00
0.00
0
Ratio
0.14
0.17
0.25
0.22
0.13
0.07
0.11
0.17
0.11
0.06
0.23
0.42
0.35
0.23
0.26
SGEL
Indices
100.00
121.43
178.57
157.14
92.86
50.00
78.57
121.43
78.57
42.86
164.29
300.00
250.00
164.29
185.7143
Ratio
0.16
0.19
0.22
0.21
0.25
0.28
0.28
0.24
0.20
0.21
0.27
0.35
0.30
0.36
0.59
Source: Annual Reports of selected Glassline Companies from 1996 to 2010.
139
NILE
Indices
100.00
118.75
137.50
131.25
156.25
175.00
175.00
150.00
125.00
131.25
168.75
218.75
187.50
225.00
368.75
Chart 4.19: Long Term Debt-Equity Ratio of selected Glassline Companies
0.70
Long Term Debt-Equity Ratio
0.60
0.50
0.40
GMM
0.30
SGEL
NILE
0.20
0.10
0.00
It is observed from the table 4.55 and chart 4.19 that the long term debt-equity ratio was
showing increasing trend during 1996-1998 and then declined during 1999-2003 for
GMM. In SGEL, the ratio was increased for first three yrs, decreased for next eight yrs
and again increased. So it was fluctuating during the study period. NILE shows increasing
pattern during 1996-2010. NILE had highest long term debt-equity ratio and hence this
company is better than other companies.
140
Table 4.56: Long Term Debt-Equity Ratio of selected Allied Companies
Year
AWL
BBL
CUMI
CG
ELECON
ESSAR
GEE
JSPL
REMI
SAIL
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
Ra
In
1996
0.53
100.00
0.40
100.00
0.69
100.00
0.46
100.00
0.47
100.00
1.37
100.00
0.14
100.00
-
-
0.80
100.00
1.50
100.00
1997
0.54
101.89
0.35
87.50
0.64
92.75
0.39
84.78
0.49
104.26
1.45
105.84
0.11
78.57
-
-
1.18
147.50
1.47
98.00
1998
0.52
98.11
0.34
85.00
0.67
97.10
0.33
71.74
0.48
102.13
1.40
102.19
0.17
121.43
0.0
0.0
1.78
222.50
1.69
112.67
1999
0.36
67.92
0.32
80.00
0.62
89.86
0.49
106.52
0.33
70.21
1.55
113.14
0.55
392.86
0.86
100.00
7.25
906.25
2.06
137.33
2000
0.26
49.06
0.32
80.00
0.45
65.22
0.88
191.30
0.31
65.96
2.28
166.42
0.94
671.43
0.77
89.53
0.00
0.00
2.25
150.00
2001
0.13
24.53
0.31
77.50
0.35
50.72
1.21
263.04
0.40
85.11
3.36
245.26
1.18
842.86
0.73
84.88
0.00
0.00
2.19
146.00
2002
0.01
1.89
0.25
62.50
0.33
47.83
0.88
191.30
0.50
106.38
10.49
765.69
1.50
1071.43
0.97
112.79
0.00
0.00
2.67
178.00
2003
0.00
0.00
0.31
77.50
0.25
36.23
0.65
141.30
0.54
114.89
44.79
3269.34
1.49
1064.29
1.27
147.67
0.00
0.00
3.58
238.67
2004
0.00
0.00
0.55
137.50
0.15
21.74
0.55
119.57
0.64
136.17
9.76
712.41
1.24
885.71
1.20
139.53
0.00
0.00
2.28
152.00
2005
0.00
0.00
0.49
122.50
0.12
17.39
0.50
108.70
0.62
131.91
3.89
283.94
0.82
585.71
1.06
123.26
0.00
0.00
0.83
55.33
2006
0.00
0.00
0.30
75.00
0.19
27.54
0.45
97.83
0.65
138.30
1.89
137.96
0.55
392.86
1.19
138.37
0.00
0.00
0.40
26.67
2007
0.00
0.00
0.20
50.00
0.40
57.97
0.31
67.39
0.47
100.00
1.45
105.84
0.87
621.43
1.23
143.02
0.00
0.00
0.24
16.00
2008
0.00
0.00
0.12
30.00
0.57
82.61
0.15
32.61
0.42
89.36
1.17
85.40
0.40
285.71
1.06
123.26
0.00
0.00
0.15
10.00
2009
0.00
0.00
0.07
17.50
0.37
53.62
0.06
13.04
0.74
157.45
1.14
83.21
0.14
100.00
0.91
105.81
41.60
5200.00
0.18
12.00
2010
0
0
0.07
17.5
0.14
20.28986
0.03
6.521739
0.74
157.4468
1.45
105.8394
0.34
242.8571
0.93
108.1395
0
0
0.34
22.66667
Source: Annual Reports of selected Allied Companies from 1996 to 2010.
Table 4.56 shows the long term debt-equity ratio of selected allied companies in last fifteen years. On an average, long term debt-equity ratio of ESSAR and SAIL
are better than other allied companies. All companies showed fluctuated trend throughout the study period. In 2010, ESSAR and SAIL reported highest long term
debt-equity ratio in comparison to other selected allied companies.
141
Table - 4.57: Comparison of Long Term Debt-Equity Ratio between Glassline
Companies
H0 : There is no significant difference in mean long term debt-equity ratio between
selected companies.
H1 : There is significant difference in mean long term debt-equity ratio between selected
companies.
Descriptive Statistics
N
Mean
Std.
Deviation
Std.
Error
GMM
15
.1687
.23424
SGEL
15
.1947
NILE
15
Total
45
Company
95% Confidence
Interval for Mean
Lower
Bound
Upper
Bound
.06048
.0389
.2984
.10063
.02598
.1389
.2504
.2740
.10425
.02692
.2163
.3317
.2124
.16184
.02413
.1638
.2611
ANOVA test
Source of variation Sum of Squares
Df
Mean Square
F
p-value
1.786
.180
Between Groups
.090
2
.045
Within Groups
1.062
42
.025
1.152
44
Total
The table 4.57 depicts mean long term debt-equity ratio of selected companies. The
descriptive table shows that mean value of this ratio was higher in NILE followed by
SGEL and GMM. To check the statistical difference in these mean values researcher had
applied ANOVA test. In ANOVA table, applying this test corresponding F-value and its
p-values were obtained. F-value was 1.786 and p-value was 0.180. As p-value in above
table was more than 0.05, above null hypothesis was accepted and concluded that there is
no significant difference in mean long term debt-equity ratio between selected companies.
142
REFERENCES
1.
Agrawal, M.R., (2010), “Financial Management Principles and Practice”, Garima
Publications- Jaipur, Ninth Edition 2010.
2.
Chandra, P., “ Financial Management, Theory and Practice”, Tata McGraw Hill
Publishing Company Limited, New Delhi, Sixth Edition.
3.
Gupta, Shashi K. and Sharma R.K., (2006), “Financial Management theory and
practice”, Kalyani Publishers, 5th Edition, Reprint 207.
4.
Joy O.M., (1977) “Introduction to financial management (Homewood 111)” Irwin.
5.
Khan, M.Y and Jain, P.K., (2004), “Financial ,Management Text and Problems”,
Tata McGraw Hill Publishing Company Limited, New Delhi, Fourth Edition.
6.
Maheshwari, S.N. “Management Accouting and Financial Control”, Sultan Chand
and Sons, New Delhi.
7.
Pandey, I.M., Financial Management, Vikas Publishing House Pvt. Ltd., New Delhi,
9th Revised Edition.
Websites
1.
www.adorwelding.com
2.
www.bharatbijlee.com
3.
www.cgglobal.com
4.
www.cumiabrasives.com
5.
www.elecon.com
6.
www.essar.com
7.
www.glascoat.com
8.
www.gmmpfaudler.com
9.
www.jindalsteelpower.com
10. www.nilelimited.com/offices.html
11.
www.remimetals.com
12. www.geelimited.com
13.
www.sail.co.in
14. www.capitalline.com
143