RATIO ANALYSIS — FINANCIAL RATIOS
Prepared per the additional regulatory disclosure of financial ratios required under Schedule III (Division I & II) to the Companies Act, 2013, with variance explanation where change exceeds 25%.
| Ratio | Numerator / Denominator | Current year | Previous year | % Change |
|---|---|---|---|---|
| Current ratio | Current assets / Current liabilities | [2.10] | [1.80] | [16.7%] |
| Quick (acid-test) ratio | (Current assets − Inventory) / Current liabilities | [1.35] | [1.20] | [12.5%] |
| Debt-equity ratio | Total debt / Shareholders’ equity | [0.65] | [0.90] | [−27.8%] |
| Debt-service coverage ratio | Earnings for debt service / Debt service | [2.40] | [2.10] | [14.3%] |
| Return on equity (ROE) | Net profit after tax / Avg. equity | [18%] | [15%] | [20.0%] |
| Inventory turnover ratio | Cost of goods sold / Avg. inventory | [6.2] | [5.8] | [6.9%] |
| Trade receivables turnover | Net credit sales / Avg. receivables | [8.1] | [7.5] | [8.0%] |
| Net profit ratio | Net profit / Revenue | [15%] | [12%] | [25.0%] |
| Return on capital employed (ROCE) | EBIT / Capital employed | [22%] | [19%] | [15.8%] |
| [________________] | [________________] | [______] | [______] | [______] |
Compliance note: Schedule III mandates disclosure of these ratios in the notes to accounts, along with an explanation for any ratio that changes by more than 25% compared to the preceding year. Capital employed is generally Tangible net worth + Total debt + Deferred tax liability.