RATIO ANALYSIS

TATA Steel Ltd.

Liquidity ratios
 1.Current ratio
• Current ratio= Current assets
Current Liabilities
Parameters Annual Money control Bloomberg
report(2022-23)

Current ratio 0.73 0.73 0.89

Parameters Industry Sector

Current ratio 1.5 0.99

 2. Quick Ratio

• Quick ratio or acid test ratio = Current assets-(Inventories + Prepaid Expenses)

Current liabilities
Parameters Annual Reports Money control Bloomberg
(2022-23)
Quick Ratio 0.28 0.28 0.26

Parameters Industry Sector

Quick Ratio 0.47 0.44
Solvency Ratios
 1. Debt to Equity ratio
• Debt-Equity Ratio =Financial Borrowing
Shareholders' Funds
Parameters Annual Money control Bloomberg
report(2022-23)
Debt to equity 0.28 0.28 0.54

Parameters Industry Sector

Debt to equity 0.16 0.20
 Interest Coverage Ratio
• Interest Coverage Ratio = Profit before Interest and Tax
Interest on long-term debts
 Parameters Annual Money control Bloomberg
report(2022-23)
Interest coverage 7.94 8.18

Parameters Industry Sector

Interest coverage 3.63

Interest Service Coverage Ratio: EBIT/Net Finance Charges (excluding interest on

short term debts)
ACTVITY OR TURNOVER RATIO
 1. Inventory Turnover Ratio
• Inventory Turnover Ratio = Cost of Goods Sold/
Average Inventory
Parameters Annual Money control Bloomberg
report(2022-23)
Inventory turnover 3.28 2.65 2.26

Parameters Industry Sector

Inventory turnover 3.33 3.08
 365
Inventory Turnover in Days= ----------------------
Inventory T.O. Ratio
Parameters Annual Money control Bloomberg
report(2022-23)
Inventory turnover 111 137.73 161.50
in Days

Parameters Industry Sector

Inventory turnover 109.60 118.51
in days
 2. Debtors Turnover Ratio
Debtors Turnover ratio = Net Credit Revenue from Operations
Average Debtors

• Where Average Debtors= (Opening Debtors and Bills Receivable + Closing Debtors and Bills
Receivable)/2
Parameters Annual Money control Bloomberg
report(2022-23)
Receivable 38.9 23.57
turnover

Parameters Industry Sector

Receivable 20.56 22.43
turnover
 365
Debtors Turnover in Days= ----------------------
Debtors T.O. Ratio
Parameters Annual Money control Bloomberg
report(2022-23)
Receivable 9.38 15.48
turnover in days

Parameters Industry Sector

Receivable 17.75 16.27
turnover in days
 Operating Cycle
Operating Cycle= Inventory Cycle + Receivable
Cycle= Inventory T.O. in days + Debtors T.O. in
days
= 111 +9.38
= 120.38
Parameters Annual Money control Bloomberg
report(2022-23)
Operating Cycle in 120.38 176.98
days

Parameters Industry Sector

Operating cycle in 127.35 134.78
days
 Payable T.O.

Annual Purchases
Payable T.O. = -----------------------------------------
Average Payable

= 96 days
 Cash Cycle
• Cash Cycle = Operating Cycle – Payable no. of
days
=
 3. Assets Turnover Ratio
• Assets turnover ratio= Net sales
Total assets
Parameters Annual report(2022-23) Money control Bloomberg

Asset turnover 0.55 0.57 0.84

Parameters Industry Sector

Asset turnover 0.86 0.82
Profitability Ratios
 4.Gross Margin
Gross Margin= Net sales – Cost of goods sold
Net Sales
Parameters Annual report(2022- Money control Bloomberg
23)
Gross margin 0.48 24.05 13.37

Parameters Industry Sector

Gross margin 12.78 13.37
 5.Net Profit Margin
• Net Profit Margin=Net profit after Taxes
Net Sales
Net profit after Taxes=15495.11
Net Sales=129006.62
Parameters Annual Money control Bloomberg
report(2022-23)
Net margin 12.01 12.01 3.63

Parameters Industry Sector

Net margin 6.02 5.92
 6.Operating Margin
• Operating Margin= Operating income
Net Sales
Parameters Annual Money control Bloomberg
report(2022-23)
Operating margin 19.83 19.83 9.5

Parameters Industry Sector

Operating margin 9.5 9.5
 1.RETURN ON ASSETS
• Return on Assets= Net income
Total assets
Net income=15495.11
Total assets=233791.42
Parameters Annual Money control Bloomberg
report(2022-23)
Return on asset 6.62 6.62 3.06

Parameters Industry Sector

Return on asset 6.7 4.93
 2.Return on Capital Employed
• ROCE= Net Profit after Tax+interest
Total Equity + Non-current Liabilities
or
Return on Average Capital Employed: EBIT/Average Capital
Employed
(Capital Employed: Total Equity + Non-current Borrowings +
Current maturities of Non-current borrowings and Finance
Lease Obligations + Current Borrowings + Deferred tax
liabilities)
(EBIT: PBT +/(-) Exceptional Items + Net Finance Charges)
Parameters Annual Money control Bloomberg
report(2022-23)
Return on 10.29 13.66 7.36
investment

Parameters Industry Sector

Return on investment 15.15 14.46
 3.Return on Equity Ratio
• Return on Equity= Net Income
Shareholder’s Equity
15495.11/134797.51=11.49
Parameters Annual Money control Bloomberg
report(2022-23)
Return on equity 11.49 11.49 8.05

Parameters Industry Sector

Return on equity 11.01 11.42
 7.Earnings Per Share
• EPS= Profit available for equity shareholders
Number of Equity Shares
Parameters Annual Money control Bloomberg
report(2022-23)
EPS 12.68 12.68 7.17

Parameters Industry Sector

EPS 25.68 19.11
 8.Price to Earning Ratio
• P/E Ratio = Market Price of a share
Earnings per share
Parameters Annual Money control Bloomberg
report(2022-23)
P/E 8.34 8.24 14.57

Parameters Industry Sector

P/E 10.72 14.57
 9.Price to Sales
• Price to Sales= Stock Price
Sales per share
No of shares-1222.40
Sales-129006.62
Sales per share- 105.54
Stock price-105.8
Parameters Annual Money control Bloomberg
report(2022-23)
Price to sales 1.002 0.99 0.53

Parameters Industry Sector

Price to sales 0.84 1.01
 10.Price to Cash Flow
• Price to Cash Flow= Share Price
Cash flow per share
OP. Cash flow per share-11.64

Share Price- 105.8

Parameters Annual Money control Bloomberg
report(2022-23)
Price to cash flow 9.08 7.92

Parameters Industry Sector

Price to cash flow 7.70 8.19
 11.Price to Book ratio
• Price to Book ratio=Market Price per Share
Book value per share
Market price per share-105.8
Book value-134797.51
Parameters Annual Money control Bloomberg
report(2022-23)
Price to Book 0.96 0.95 1.24
value

Parameters Industry Sector

Price to Book value 1.5 2.00
 12.Dividend Yield
• Dividend Yield= Annual dividends per share
Price per share
Dividends per share=51
Price per share=105.8
Parameters Annual Money control Bloomberg
report(2022-23)
Dividend yield % 4.8 4.76

Parameters Industry Sector

Dividend yield 1.14 0.71
 DU PONT ANALYSIS CHART
Sales Material cost
129006.62 60336.74

Employee benefit
Net income cost
minus
15495.11 6616.29
Net profit margin
12.01
Sales Total cost Finance cost
129006.62 113511.51 3792.14

Multiplied by
Tax expense
ROA
-110531.4
6.62
Sales
129006.62
ROE Other
Multiplied by expenses153297.74
11.49
Total asset turnover Fixed asset
Divided by
0.55 199841.9
Financial leverage Cash
1.73 858.98
Total asset
plus
233791.42
Receivable
3351.72
Current asset
33949.52
Inventories
20795.56

Other Assets
8943.26