Compute the balance sheet and profit and loss ratios for the years 2012 to 2014 which the bank would ask XYZ Ltd. to submit for financial appraisal of the company.

The Computation of the Balance Sheet and Profit and Loss related Ratios along with comments on the same (mentioned in Remarks column) is as under: Ratio analysis for 2014 Balance Sheet Ratios S.No. Ratios Particulars (₹ in millions) Values 01. Current Ratio = Current Assets / Current Liabilities Current Assets = 24,436.10 Current Liabilities = 36,506.10 0.67 02. Acid test or Quick ratio = Quick Assets/ Current Liabilities (Quick Asset = Trade receivable + cash & bank + loans & advance) Quick Assets = 16,646.3 Current Liabilities = 36,506.10 0.46 03. Debt-Equity Ratio = Long term debt/Shareholders Equity Long Term debt = 5,669.2 Shareholder Equity = 60,162.20 0.0942 Profit & Loss Statement Ratios S.No. Ratios Particulars (₹ in millions) Values 01 Gross Profit margin = Gross Profit X 100/ Sales Gross Profit = 24,788.10 Sales = 72,400.1 34.24% 02 Net Profit margin = Net Profit X 100/Sales (Reported profit has been taken to calculate this ratio*) Net Profit = 16,067.30 Sales = 72,400.1 22.19% 03 Return on Equity = Profit after tax X 100/Net Worth Net profit = 16,067.30 Net worth = 60,162.20 26.71% 04 Return on Investments = Profit before Tax X100/Net Worth Profit Before Tax = 22,728.90 Net Worth = 60,162.20 37.78% 05 Interest coverage Ratio = Operating profit/Interest Operating profit = 25,631.10 Interest = 843.00 30.40 times 06 Cost of Goods Sold Ratio = Cost of Goods Sold/Sales (Excise has not been added in COGS*) Cost of goods sold = 12,046.80 Sales = 72,400.1 0.17 07 Operating profit margin = Operating profit X100/sales Operating profit = 25,631.10 Sales = 72,400.1 35.40% Note: Other non-recurring income is taken into account to arrive at actual Net Profit. Only raw material cost has been included in the COGS. Sales Revenue has been taken as (Sales-Excise), this is as per revised Schedule VI. Ratio analysis for 2013 Balance Sheet Ratios S.No. Ratios Particulars (₹ in millions) Values 01. Current Ratio = Current Assets / Current Liabilities Current Assets = 28,674.40 Current Liabilities = 32,093.20 0.89 02. Acid test or Quick ratio = Quick Assets/ Current Liabilities Quick Assets = 20,741.70 Current Liabilities = 32,093.20 0.65 03. Debt-Equity Ratio = Long term debt/ Shareholders Equity Total debt = 4,820.30 Shareholder Equity = 49,277.30 0.0978 Profit and Loss Ratios S.No. Ratios Particulars (₹ in millions) Values 01 Gross Profit margin = Gross Profit X 100/ Sales Gross Profit = 17,433.20 Sales = 61,597.6 28.30% 02 Net Profit margin = Net Profit X 100/Sales Net Profit = 12,127.70 Sales = 61,597.6 19.69% 03 Return on Equity = Profit after tax X 100/ Net worth Profit after tax = 12,127.70 Net worth = 49,277.30 24.61% 04 Interest coverage = Operating profit / Interest Operating profit = 17,832.80 Interest = 399.60 44.63 times 05 Operating profit margin = Operating profit X 100/Sales Operating Profit = 17,832.80 Sales = 61,597.6 28.96% 06 Cost of Goods Sold Ratio = Cost of Goods Sold/Sales Cost of goods sold = 11,801.50 Sales = 61,597.6 0.19 07 Return on Investments = Net Profit before Tax X 100/ Net worth Profit Before Tax = 16,607.30 Net Worth = 49,277.30 33.70% Note: Other non-recurring income is taken into account to arrive at actual Net Profit. Only raw material cost has been included in the COGS. Sales Revenue has been taken as (Sales-Excise), this is as per revised Schedule VI. Ratio analysis for 2012 Balance Sheet Ratios S.No. Ratios Particulars (₹ in millions) Values 01. Current Ratio = Current Assets/ Current Liabilities Current Assets = 23,079.40 Current Liabilities = 26575.40 0.87 02. Acid test or Quick Ratio = Quick Assets/ Current Liabilities Quick Assets = 15,770.8 Current Liabilities = 26,575.40 0.59 03. Debt-Equity Ratio = Long term debt/ Shareholders Equity Total debt = 3,064.1 Shareholder Equity = 41,527.10 0.07 Profit and Loss Ratios S. No. Ratios Particulars (₹ in millions) Values 01. Gross Profit margin = Gross Profit X 100/Sales Gross Profit = 18,675.60 Sales = 59,244.7 31.52% 02. Net Profit margin = Net Profit X 100/ Sales Net Profit = 14,380.70 Sales = 59,244.7 24.27% 03. Return on Equity = Profit after tax x 100 / Net worth Profit after tax = 14,380.70 Net worth = 41,527.10 34.63% 04. Interest Coverage = Operating Profit/Interest Operating Profit = 19,414.30 Interest = 738.70 26.28 times 05. Operating profit margin = Operating profit X 100/Sales Operating Profit = 19,414.30 Sales = 59,244.7 32.77% 06. Goods Sold Ratio = Cost of Goods Sold / Sales Cost of goods sold = 18,367.20 Sales = 59,244.7 0.31 07. Return on Investments = Profit before Tax X 100/ Net Worth Profit Before Tax = 17,028.20 Net Worth = 41,527.10 41.0%