1. By MithileshCMM Assignment-2: Choose 20 manufacturing company which aretraded on stock exchange on all working days and 5 years of working andshould have average trading volume more than 50,000 with share pricerange should be 100 to 250.Evaluate only profitability ratios of thesecompany and co-relate with return on capital employed and marketcapitalization. Executive SummaryFollowing 20 manufacturing companies are considered for the assignment.Sr. CompanyIndustry Trading ShareNo.Name VolumePrice( Rs.) 1Tata Motors Auto2140263 170.3 2Crompton GreavesElectric Equipment 265566123.15 3ITC Cigarettes 304792202.15 4Amar Remedies Personal Care199938123.25 5Astral Polytechnik Plastic1264291 169.7 6 Finotex Chemical Chemicals157125 122.7 7United PhosphorousChemicals 61629 132.8 8 Godrej IndustriesPersonal Care 61594186.25 9 Ambuja Cements Cement56284 153.210Exide Industries Auto Ancillaries 99932114.0511Orchid Chemicals Pharmaceuticals 430730 160.3 Power Transmission &12Areva T&D Equipment 60559202.3513Titan IndustriesMiscellaneous645184 203.8 1

2. 14 Amtek IndiaAuto Ancillaries590003131.715Hind ZincMetals - Non Ferrous 111828110.716 HindalcoAluminium 1267589123.7 Jubilant Life17 Sciences Pharmaceuticals 126834204.0518Radico Khaitan Breweries & Distilleries79200120.3519VIP IndustriesPlastics 2091569 134.620 Timken India Bearings 80047 235.4 Profitability ratios like Operating Profit Margin(%),Cash Profit Margin(%),Net Profit Margin(%),Assets turnover,Return on Assets Excluding Revaluations and Earning per share are analyzed for last five years ( 2007 -2011 ) for above 20 companies and co- related these ratios with with return on capital employed and market capitalization..Return on capital employed : A ratio that indicates the efficiency and profitability of a companyscapital investments.Calculated as:Return on capital employed should always be higher than the rate at which the company borrows,otherwise any increase in borrowing will reduce shareholders earnings.Market Capitalization:The total dollar market value of all of a companys outstandingshares. Marketcapitalization is calculated by multiplying a companys shares outstanding by the current market priceof one share. The investment community uses this figure to determining a companys size, as opposedto sales or total asset figures.Company size is a basic determinant of asset allocation and risk-returnparameters for stocks. 2 3. For the following companies Return on capital employed was reduced significantly where as forthe remaining companies it has improved. Tata Motors Godrej Industries Amar Remedies Astral Polytechnik Areva T&D Amtek India Hindalco Jubilant Life Sciences Timken India 3 4. Company -1 : Tata MotorsProfitability RatiosMar 11Mar10Mar09Mar08Mar07Operating Profit Margin(%) 9.81 11.46.71 10.53 9.7Cash Profit Margin(%)6.94 7.266.978.138.55Net Profit Margin(%) 3.74 6.263.776.966.94Return on Assets ExcludingRevaluations 314.93 259.03240.6 202.54177.33Asset Turnover Ratio 2.22 1.95 1.88 2.693.08Earnings Per Share28.5539.2619.4852.63 49.65Return On Capital Employed(%) 10.1910.37 6.4118.96 25.82Market Capitalization ( in Cr. )45835Analysis :Net profit margin has decreased to 3.74 where as return on asset has increased.Both Asset Turnover Ratio and Earnings Per Share has decreased significantly.Earning Per Share has decreased from 49.65 to 28.55 in the last 5 years. This is an important measure of profitabilityReturn On Capital Employed has reduced by more than half.It indicates the efficiency and profitability of a companys capital investments.Company -2 : Crompton GreavesProfitability Ratios Mar 11Mar 10Mar 09Mar 08Mar 07Operating Profit Margin(%)15.32 15.916.1412.3 10.07Cash Profit Margin(%) 11.6911.0211.76 7.96.77Net Profit Margin(%)11.3311.32 8.4 7.925.62Return on Assets ExcludingRevaluations 35.7 27.28 33.4824.9917.99Asset Turnover Ratio 3.934.664.25 3.74 3.72Earnings Per Share10.829.62 10.83 8.56 5.25Return On Capital Employed(%) 38.58 48.53 59.0447.4334.79Capital and Money Markets Ex-MBA 2010-13 4 5. Market Capitalization ( in Cr. )7899Analysis :Net profit margin and return on asset has increased significantly.Earnings Per Share has inecreased significantly.Return On Capital Employed has increased by 3.79 %Company -3: ITCProfitability Ratios Mar 11Mar10 Mar09 Mar08Mar 07Operating Profit Margin(%)34.08 33.0232.8431.5732.51Cash Profit Margin(%) 25.17 23.9824.2223.4524.28Net Profit Margin(%)22.9121.321.18 21.5 21.4Return on Assets ExcludingRevaluations20.5536.6936.24 31.85 27.59Asset Turnover Ratio 1.69 1.58 1.441.591.75Earnings Per Share 6.4510.64 8.658.287.18Return On Capital Employed(%) 44.9442.64 34.636.6 37.24Market Capitalization ( in Cr. ) 157,227.51Analysis :Both Operating Profit Margin and Net profit margin has increased where as return on asset has decreased.Both Asset Turnover Ratio and Earnings Per Share has decreased significantly.Earning Per Share has decreased from 49.65 to 28.55 in the last 5 years. This is an important measure of profitabilityReturn On Capital Employed has increased 7.7 %Company -4: Amar RemediesProfitability RatiosMar 11 Mar 10 Mar 09Mar 08 Mar 07Operating Profit Margin(%) 14.32 14.57 12.8712.03 13.29Cash Profit Margin(%) 8.569.119.11 8.159.17Net Profit Margin(%)6.576.817.19 7.298.42Return on Assets ExcludingRevaluations 81.65 67.64 56.2947.08 38.57Asset Turnover Ratio3.593.34 3.4 3.245.75Earnings Per Share 14.54 12.3310.2 8.326.51Return On Capital17.45 19.3517.618.35 15.76 Capital and Money Markets Ex-MBA 2010-135 6. Employed(%)Market Capitalization ( in Cr. )322.47Analysis :Net profit margin has decreased where as return on asset has increased.Earning Per Share has increased by more than doubled in the last 5 years.This is an important measure of profitabilityReturn On Capital Employed has increased to 17.45 .Company -5: Astral PolytechnikProfitability Ratios Mar 11Mar 10Mar 09 Mar 08 Mar 07Operating Profit Margin(%)13 14.5415.26 15.23 13.36Cash Profit Margin(%) 10.2211.3312.82 13.77 11.21Net Profit Margin(%) 8.16 9.66 7.26 12.259.03Return on Assets Excluding Revaluations 65.66 104.0481.44 69.98 56Asset Turnover Ratio 2.972.6 2.062.712.75Earnings Per Share14.9524.9412.6315.28.11Return On Capital Employed(%) 23.3222.0316.79 18.92 12.97Market Capitalization ( in Cr. ) 381.42Analysis :Net profit margin has decreased where as return on asset has increased.Earning Per Share has increased by 1.5 times in the last 5 years.Return On Capital Employed has increased significantly to 23.32Company -6: Finotex ChemicalProfitability Ratios Mar 11Mar 10Operating Profit Margin(%) 21.5723.12Cash Profit Margin(%) 15.316.15 Capital and Money Markets Ex-MBA 2010-136 7. Net Profit Margin(%)14.8617.21Return on Assets Excluding Revaluations41.221.51Asset Turnover Ratio 7.415.6Earnings Per Share 3.79 5.18Return On Capital Employed(%) 13.6833.29Market Capitalization ( in Cr. ) 137.79Analysis : Net profit margin has decreased where as return on asset has increased significantly. Earning Per Share has decreased to 3.79. Return On Capital Employed has decreased signicantly by 19,61 %Company -7: United PhosphorousProfitability RatiosMar 11 Mar10 Mar09 Mar08Mar07Operating Profit Margin(%)14.312.7413.76.85 15.84 Cash Profit Margin(%) 10.29 8.62 13.027.79 13.82 Net Profit Margin(%) 4.97 6.516 5.547.37Return on Assets Excluding Revaluations 48.943.71 41.35 77.54 60.09 Asset Turnover Ratio 2.04 1.841.851.471.48Earnings Per Share3.41 4.123.554.21 5.8Return On Capital Employed(%) 9.417.89.815.336.76 Market Capitalization ( in Cr. )6,132.76 Analysis : Net profit margin and return on asset has decreased. Return On Capital Employed has increased by 2.65 % Company -8 : Godrej Industries Profitability RatiosMar 11 Mar10 Mar09 Mar08 Mar07 Operating Profit Margin(%)4.13 1.64 -3.63 11.31 3.49 Cash Profit Margin(%) 2.52 1.85-0.8 10.126.9 Net Profit Margin(%) 12.04 9.222.091410.68 Return on Assets Excluding Revaluations33.9631.7931.5632.2412.89Capital and Money Markets Ex-MBA 2010-13 7 8. Asset Turnover Ratio 1.6 1.36 1.441.331.24Earnings Per Share 4.2 2.55 0.583.332.65Return On Capital Employed(%) 4.05 3.05 1.366.227.78Market Capitalization ( in Cr. ) 5,915.76Analysis : Both Operating Profit Margin and Net profit margin has decreased Earning Per Share has increased to 4.2 Return On Capital Employed has decreased signicantly by 3.73 %Company -9 : Ambuja CementsProfitability Ratios Dec10Dec09 Dec08 Dec07Dec06Operating Profit Margin(%) 25.18 27.0728.85 36.2 34.71Cash Profit Margin(%)20.01 20.4621.1734.61 29.04Net Profit Margin(%) 16.84 16.7822.1130.53 23.86Return on Assets ExcludingRevaluations 47.942.4537.23 30.5827.56Asset Turnover Ratio 0.85 1.151.11.09 1.37Earnings Per Share 8.26 89.21 11.629.9Return On Capital Employed(%)21.627.0428.19 38.8443.76Market Capitalization ( in Cr. )23,479.85Analysis : Both Operating Profit Margin and Net profit margin has decreased .Asset turnover has also decreased. Earning Per Share has decreased by 1.64. Return On Capital Employed has decreased signicantly by 22.16 %Company -10 : Exide IndustriesProfitability Ratios Mar 11 Mar10 Mar09Mar08 Mar07Operating Profit Margin(%)17.3821.2114.63 14.89 14.8Cash Profit Margin(%) 13.57 14.79.79.7710.03Net Profit Margin(%)12.86 12.7 7.557.92 7.43Return on Assets ExcludingRevaluations31.9425.7615.22 12.37 8.37Asset Turnover Ratio 3.25 3.1632.882.2 Capital and Money Markets Ex-MBA 2010-138 9. Earnings Per Share 7.846.32 3.55 3.132.07Return On Capital Employed(%)33.2 36.1631.6730.55 27.18Market Capitalization ( in Cr. ) 9,694.25Analysis : Both Operating Profit Margin and Net profit margin has increased significantly. Earning Per Share has decreased by more than 3 times. Return On Capital Employed has decreased signicantly by 6.02 %Company -11 : Orchid ChemicalsProfitability Ratios Mar 11Mar10Mar09Mar08Mar07 Operating Profit Margin(%) 19.78-8.8516.330.02 27.97 Cash Profit Margin(%)12.29 -36.762.36 19.2 19.58Net Profit Margin(%) 9.5526.48 -4.3614.88 10.56 Return on Assets ExcludingRevaluations160.99141.57 83.28104.49 76.16Asset Turnover Ratio 0.70.580.490.660.66 Earnings Per Share22.64 47.04 -7.41 28.02 14.68Return On Capital Employed(%) 6.94 -9.182.16 10.43 9.1 Market Capitalization ( in Cr. )1,129.19Analysis : Both Operating Profit Margin and Net profit margin has decreased significantly. Return On Capital Employed has decreased signicantly by 2.16 %Company -12 : Areva T&D Profitability RatiosDec10 Dec09 Dec08Dec07 Dec06 Operating Profit Margin(%)12.0516.88 18.5513.83 8.72Cash Profit Margin(%) 6.9410.86 11.839.6 5.23Net Profit Margin(%)4.62 8.52 10.69 8.45 4.14 Return on Assets Excluding Revaluations41.930.27114.54 11.7 4.56Asset Turnover Ratio3.47 7.076.18 6.67 4.16 Earnings Per Share 7.81 8.039.4745.2334.35 Return On Capital Employed(%)20.935.01 54.9654.9530.71 Capital and Money Markets Ex-MBA 2010-139 10. Market Capitalization ( in Cr. )4,838.27Analysis : Operating Profit Margin has increased significantly. Earning Per Share has decreased by 26.54 Return On Capital Employed has decreased signicantly by 9.81 %Company -13 : Titan IndustriesProfitability RatiosMar 11Mar 10Mar 09Mar 08 Mar 07Operating Profit Margin(%)9.43 9.338.938.698.69 Cash Profit Margin(%)6.99 6.755.736.015.59 Net Profit Margin(%)6.4 5.344.084.92 4.4Return on Assets Excluding Revaluations 231163.19124.18 98.26 72.82 Asset Turnover Ratio10.94 8.337.336.174.72Earnings Per Share 96.9656.39 35.81 33.85 21.16Return On Capital Employed(%)59.4648.67 42.68 34.1929.2 Market Capitalization ( in Cr. )18,093.08Analysis : Net profit margin has increased significantly. Earning Per Share has increased by 75.8 Return On Capital Employed has decreased signicantly by 30.26 %Capital and Money Markets Ex-MBA 2010-13 10 11. Company -14 : Amtek IndiaProfitability Ratios Jun 10Jun09Jun08Jun07 Jun06Operating Profit Margin(%)28 24.28 41.3326.926.47 Cash Profit Margin(%)16.7715.76 32.5819.819.28 Net Profit Margin(%)7.41 6.76 28.24 15.1613.57Return on Assets Excluding Revaluations128.12131.4126.81 87.77 6.81 Asset Turnover Ratio 0.4 0.571.050.99 1.18Earnings Per Share 6.05 4.82 30.93 12.7311.27Return On Capital Employed(%)5.29 5.66 21.82 14.2112.67 Market Capitalization ( in Cr. ) 1,800.43 Analysis :Earning Per Share has decreased to 6.05Return On Capital Employed has decreased signicantly by 7.38 %Company -15 : Hind ZincProfitability Ratios Mar 11 Mar10Mar09 Mar08 Mar07Operating Profit Margin(%)55.36 58.21 48.0668.3675.16 Cash Profit Margin(%)49.51 49.75 44.1850.2853.08 Net Profit Margin(%) 45.1346.5 41.8352.1651.28Return on Assets Excluding Revaluations 53.33428.94 339.8 280.41 180.51 Asset Turnover Ratio1.020.990.99 1.57 2.51Earnings Per Share 11.6 95.65 64.55 104.04 105.12Return On Capital Employed(%) 26.45 27.51 22.8348.1783.67 Market Capitalization ( in Cr. ) 46,753.15 Analysis :Return On Capital Employed has decreased signicantly by 57.22 % Capital and Money Markets Ex-MBA 2010-13 11 12. Company -16 : HindalcoProfitability RatiosMar 11 Mar10 Mar09Mar08Mar07Operating Profit Margin(%) 14.98 15.0416.0317.121.9 Cash Profit Margin(%) 1210.8913.76 14.31 16.72 Net Profit Margin(%) 8.839.6911.87 14.56 13.76Return on Assets Excluding Revaluations 155.07145.85 139.71140.95107.09 Asset Turnover Ratio 1.671.42 1.371.531.64Earnings Per Share 11.16 10.0113.12 23.31 22.12Return On Capital Employed(%)8.97.46 912.44 19.07 Market Capitalization ( in Cr. ) 23,682.19Analysis :Both Operating Profit Margin and Net profit margin has decreased significantly.Return On Capital Employed has decreased signicantly by 10.17 %Company -17 : Jubilant Life SciencesProfitability Ratios Mar 11 Mar10Mar09 Mar08Mar07 Operating Profit Margin(%) 20.6421.19 22.0322.31 17.56 Cash Profit Margin(%)17.58 13.5 19.3818.44 17.26Net Profit Margin(%)12.5414.6210.619.69 14.11 Return on Assets ExcludingRevaluations134.39 136.85 90.76 94.19 66.76Asset Turnover Ratio1.04 1.211.271.441.31 Earnings Per Share17.5622.87 17.67 26.83 16.14Return On Capital Employed(%)7.611.4412.7 12.91 10.24 Market Capitalization ( in Cr. )3,250.13Analysis :Return On Capital Employed has decreased signicantly by 2.64 %Capital and Money Markets Ex-MBA 2010-1312 13. Company -18 : Radico KhaitanProfitability RatiosMar 11 Mar10 Mar09 Mar08 Mar07 Operating Profit Margin(%)15.6416.5313.1210.2413.67 Cash Profit Margin(%)9.96 7.59 8.14 4.81 7.96Net Profit Margin(%)7.25 4.910.9 4.02 5.39 Return on Assets ExcludingRevaluations 48.4444.5421.45 22.717.17Asset Turnover Ratio1.97 1.71 1.54 2.12 1.96 Earnings Per Share 5.49 3.15 0.64 2.89 3.13Return On Capital Employed(%)11.9511.8410.69 9.71 9.55 Market Capitalization ( in Cr. ) 1,596.42Analysis :Both Operating Profit Margin and Net profit margin has increased significantly.Earning Per Share has increased to 5.49Return On Capital Employed has increased by 2.4%Company -19 : VIP Industries Profitability Ratios Mar 11 Mar10Mar09Mar08 Mar07Operating Profit Margin(%) 13.0515.636.23 10.539.9Cash Profit Margin(%)10.4712.513.727.96.29 Net Profit Margin(%)10.4712.513.727.98.38Return on Assets Excluding Revaluations71.19 60.91 45.63 42.3939.01 Asset Turnover Ratio32.722.242.39 2.12Earnings Per Share 21.94 17.713.297.11 5.63 Return On Capital Employed(%) 27.39 32.828.01 18.43 17.8Market Capitalization ( in Cr. ) 1,902.13Analysis :Capital and Money Markets Ex-MBA 2010-1313 14. Both Operating Profit Margin and Net profit margin has increased significantly. Earning Per Share has inecreased by more than 3 times. Return On Capital Employed has increased signicantly by 9.59 %Company -20 : Timken IndiaProfitability Ratios Dec10Dec09Dec08Dec07Dec06 Operating Profit Margin(%)15.24 13.24 17.23 17.61 19.13 Cash Profit Margin(%) 12.44 10.86 12.64 12.71 14.15Net Profit Margin(%) 10.699.89 12.57 10.74 11.21 Return on Assets ExcludingRevaluations 59.7151.7 46.638.28 15.03Asset Turnover Ratio2.241.612.2 1.911.93 Earnings Per Share 8.01 5.1 8.32 5.875.98Return On Capital Employed(%)18.22 11.5823.1621.98 27.47 Market Capitalization ( in Cr. ) 1,500.32Analysis : Both Operating Profit Margin and Net profit margin has decreased significantly.Asset turnover ration hasincreased. Earning Per Share has increased to 8.01. 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