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NTCC Summer Internship: Semester 7

1. The document analyzes the financial ratios of a company called EXPRO (I) Ltd to assess its performance and financial viability. 2. Key financial ratios analyzed include liquidity ratios like current ratio and quick ratio, profitability ratios like profit margin ratio and return on assets, and debt ratios like debt to asset ratio and debt to capital ratio. 3. The analysis finds that EXPRO (I) Ltd is profitable, uses its assets efficiently, and maintains a safe debt level, indicating overall strong financial health.

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Ayush Mishra
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75 views

NTCC Summer Internship: Semester 7

1. The document analyzes the financial ratios of a company called EXPRO (I) Ltd to assess its performance and financial viability. 2. Key financial ratios analyzed include liquidity ratios like current ratio and quick ratio, profitability ratios like profit margin ratio and return on assets, and debt ratios like debt to asset ratio and debt to capital ratio. 3. The analysis finds that EXPRO (I) Ltd is profitable, uses its assets efficiently, and maintains a safe debt level, indicating overall strong financial health.

Uploaded by

Ayush Mishra
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Ntcc summer

internship
Semester 7

Made By : - Gautam Tandon


BBA+MBA(dual)
INTRODUCTION TO STUDY
•A financial audit is an objective examination and evaluation of the financial statements of an organization
to make sure that the financial records are a fair and accurate representation of the transactions they claim
to represent. The audit can be conducted internally by employees of the organization or externally by an
outside Certified Public Accountant (CPA) firm.
•ABOUT THE COMPANY
•Being an eminent name in the financial service domain.Rk associates always strive towards providing the
most favorable tax consultancy, advisory and external audits to private institutions.
•VISION
•We dream to be the beacon of Excellence, the primary preference of the most sought after companies and
talents
•MISSION
•"our mission is to help our clients to succeed. Our size, strength and resources will help us carry out
our mission now and in the future."
Research Methodology

• Research Methodology is the way toward gathering information and data for basic leadership in the business.
• Research design
• Type of Research
• The research available is descriptive. Descriptive research is a study designed to depict the participants in an
accurate way.
• Three ways of descriptive research:
• Observational, defined as a method of viewing and recording the participants
• Quantitative research refers to the systematic empirical investigation of any phenomena via statistical,
mathematical or CORRELATIONAL RESEARCH computational techniques.
• Type of data:
• Secondary data: Secondary data is the data that have been already collected by and readily available from
other sources. Such data are cheaper and more quickly obtainable than the primary data.
• Data collected by internet, magazines and several financial report etc.
• Objectives
• 1. To analyze the performance.
• 2. To assess the financial viability.
• Ratio Analysis
• Liquidity Ratio
Current Ratio: It measures a company's ability to pay short-term and
long-term obligations. It gives an idea of company’s ability to payback
liabilities. The formula for calculating a company’s current ratio is:
• Current Ratio = Current Assets / Current Liabilities
• Quick ratio: Quick assets are current assets that can be converted to
cash within 90 days or in the short-term. The quick ratio is a liquidity
ratio that measures a company's ability, using its quick assets, to pay
off its current debt as they come due.
• Formula for calculating quick ratio is Quick ratio = (current assets –
inventories) / current liability
Profitability Ratio

Profit margin Ratio: The profit margin ratio, also called the return on sales ratio or gross profit ratio, is a profitability
ratio that measures the amount of net income earned with each rupees of sales generated by comparing the net
income and net sales of a company. In other words, the profit margin ratio shows what percentage of sales are left
over after all expenses are paid by the business. Formula for
 
Formula for calculating Profit margin Ratio is
Net income/Net sales x 100
• Return on assets: The return on assets ratio, often called the return
on total assets, is a profitability ratio that measures the net income
produced by total assets during a period by comparing net income to
the average total assets. In other words, the return on assets ratio or
ROA measures how efficiently a company can manage its assets to
produce profits during a period. Formula for calculating Return on
assets is
• ROA= Net income/ Total Assets
 

b) Gross Margin Sales:It thinks about the gross margin of a business to the net sales. This proportion estimates how
productive an organization sells its stock or product. At the end of the day, the gross benefit proportion is basically
the rate markup on product from its expense. This is the unadulterated benefit from the closeout of stock that can go
to paying working costs.

Formula for calculating gross margin ratio is GMR = Gross Margin / Net sales
• f) Inventory turnover ratio: The inventory turnover ratio is an efficiency ratio that
shows how effectively inventory is managed by comparing cost of goods sold with
average inventory for a period. This measures how many times average inventory is
“turned” or sold during a period. In other words, it measures how many times a
company sold its total average inventory dollar amount during the year.
• Formula for calculating Inventory turnover ratio is
 ITR = Cost of goods sold / Average inventory

• Receivables Turnover Ratio:It gauges how often a business can transform its records
receivable into money during a period. As such, the records receivable turnover
proportion estimates how often a business can gather its normal records receivable
during the year. Formula for calculating Receivables turnover ratio is
• RTR = Net revenues / Average receivable
• Payables Turnover Ratio : It demonstrates an organization's capacity to
satisfy its records payable by contrasting net acknowledge buys for the
normal records payable during a period. As it were, the records payable
turnover proportion is how often an organization can satisfy its normal
records payable parity throughout a year.Formula for calculating
Receivables turnover ratio is
• PTR = Purchases / Average Payables

• Asset Turnover Ratio: It gauges an organization's capacity to produce


deals from its advantages by contrasting net deals and normal complete
resources. At the end of the day, this proportion indicates how effectively
an organization can utilize its advantages for create deals. Equation for
figuring resource turnover proportion is
• ATR = Net sales / Average total assets
• Debt to asset Ratio:It gauges the measure of all out resources that are
financed by loan bosses rather than financial specialists. As it were, it
demonstrates what level of benefits is subsidized by getting
contrasted and the level of assets that are financed by the financial
specialists. Equation for figuring Debt to resource proportion is Debt
to asset Ratio = Total debt / total asset

• Debt to capital ratio: It figures an organization's utilization of monetary


influence by contrasting its all out commitments with complete capital. At the
end of the day, this measurement estimates the extent of obligation an
organization uses to fund its activities as contrasted and its capital.Formula
for calculating Debt to capital ratio is
• Debt to capital Ratio = Total debt / (total debt + shareholder’s equity
• Interest coverage Ratio: It quantifies an organization's capacity to make
intrigue installments on its obligation in an auspicious way. Not at all like the
obligation administration inclusion proportion, this liquidity proportion truly
has nothing to do with having the option to make standard installments on
the obligation itself. Rather, it figures the association's capacity to manage the
cost of the enthusiasm on the obligation.
• Formula for interest coverage ratio is
• Interest coverage Ratio = Earnings before interest and taxes / Interest
expenses
• CONCLUSION & LIMITATIONS
• from the above ratio analysis of EXPRO (I) Ltd.
• Under the prospect of liquidity EXPRO (I) Ltd has enough cash to repay its debts. And
after following them, the ratio also leading toward upwards.
• Under the prospect of profitability EXPRO (I) Ltd effective in converting sales to net
income and is profitable in converting profits from fixed assets.
• Under the prospect of activity turnover EXPRO (I) Ltd use its assets efficiently to
generate sales.
• Under the prospect of solvency ratio EXPRO (I) Ltd figures
• The debt to capital ratio almost stays similar throughout indicating that EXPRO is a safe
• Company to invest in

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