Comment on the ratios as computed above.

The Analysis of the Balance Sheet and Profit and loss Ratios along with comments on the same (mentioned in Remarks column) is as under: Balance Sheet Ratios S. No. Ratios 2012 2013 2014 Overall 01. Net Working Capital Negative working capital Working capital remained negative however, position was better than previous year. Working capital has further reduced. The working capital remained negative throughout the period. Thus, poor liquidity. 02. Current Ratio Ratio is 0.87, which is not a good indicator The ratio has increased slightly, however, it remains below 1. Lowest current ratio over the 3 years and is a poor indicator. The ratio remained below 1, indicating difficulty in company's ability to meet short term debt obligation. 03. Acid test or Quick ratio The ratio is 0.59 which is not a good indicator of company's liquidity The ratio has slightly improved over last year, but remains less than acceptable value. Less than 0.5, showing inability of the company to meet its short-term obligations using its most liquid assets. Normal value: no less than 1. However, in all the years the value remained less than 1. 04. Debt-Equity Ratio Ratio is 0.07, showing company is not having proper capital structure Ratio has slightly improved, debts are nominal and shows Company has only 10% debt, the company should borrow more long term debts. Fallen over the previous year. Company is not taking leverage of its borrowing capital. Acceptable value is not more than 1.5 and optimum value is 0.43-1. The value remained less than 0.43 indicating under utilization of long term borrowing capacity. Profit and Loss Ratios S. No. Ratios 2012 2013 2014 Overall 05. Gross Profit margin The Gross profit margin is 27.08%, it is acceptable. It has fallen by 3% over the previous year. It has improved by approx 6% over last year. Overall, it is acceptable 06. Net Profit margin It remains above 20%, which is satisfactory. The margin has reduced below 20% which is not a good sign. It has increased over the last year. However, still lower than the year 2012. It has shrinked slightly over the period. 07. Return on Equity The percentage of return on equity is 34.63% and is satisfactory. The position has deteriorated over the previous year. The position has slightly improved over the last year. The return on equity on the overall is satisfactory. 08. Return on Investments 41% is a satisfactory return on investment. It has declined over the previous year due to decline in PBT and increase in net worth, however the position is still safe. It has improved over previous year and shows company is trying to revive. The overall position is satisfactory. However, position in 2012 was better than that in the successive years. 09. Return on Net Worth It is more than 30% and satisfactory. It has fallen considerably and is not a good sign. It has slightly improved over last year however, position is not satisfactory. It was satisfactory in 2012, but not in 2013 or 2014. The decrease was due to increase in net worth which was not in proportion. to profit. 10. Interest Coverage The coverage ratio is quite satisfactory. The situation is better than previous year. Though the situation has deteriorated over the last year, it is better than 2012. The overall position is satisfactory. 11. Operating profit margin The ratio is satisfactory. The position has deteriorated over the last year. Satisfactory, as it improved over 2012 and 2013. The position is quite satisfactory. 12. Cost of Goods Sold It is satisfactory. (COGS) Ratio. It remains satisfactory. It is still satisfactory. The analysis shows that COGS is lowest in 2014.