unitech ratio analysis

8/14/2019 Unitech Ratio Analysis

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Ratio Analysis of UnitechConstructions
http://www.unitechgroup.com/index.shtmlhttp://www.unitechgroup.com/index.shtml


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About Unitech Constructions

Established in 1971 by a group of technocrats led by Mr.

Ramesh Chandra.

Over 3 decades of experience in infrastructure and realestate development

Market capitalization of ~US$ 6 billion

Land reserves of nearly 14,000 acres spread across major

centres of economic activity in India.


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Unitechs Business Model


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Liquidity Ratio

Mar 05 Mar 06 Mar 07 Mar 08 Mar 09

0.43 0.48 0.95 1.24 0.97

The Industry does not maintainthe ideal 2:1 ratio because it is a

high investment sector andmajorly works with loans and

debts.


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Total Current Assets 592.09 1,136.40 4,017.01 8,749.16 6,396.35

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09


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Liquidity Ratio


0.43 0.48 0.95 1.24 0.97

The Industry does not maintainthe ideal 2:1 ratio because it is a

high investment sector andmajorly works with loans and

debts.


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Liquidity Ratio


0.40 0.46 0.94 1.24 0.97

The Industry does not maintain

the ideal 1:1 ratio because it is ahigh investment sector andmajorly works with loans and

debts.

However during the peak period

it reached near to the desired.


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Liquidity Ratio


0.04 0.032 0.03 0.03 0.01

The Industry does not maintaina high ratio because it is a highinvestment sector and majorly

works with loans and debts.


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Profitability Ratio


14.81 24.57 59.04 55.52 60.66

It measures the percentage of

each sales rupee remainingafter the firm has paid for itsgoods.

The sales declined from 2008 to2009 , however the Gross profit

increased due to the decrease inthe raw materials and

Manufacturing expenses.


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Profitability Ratio


10.37 19.85 57.48 53.40 57.65

The operating Expensesdoes not change

significantly hence it followsa same trend as Gross profit.


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Profitability Ratio

Initially, the company had a lowROI, but later on the ROI kept onincreasing and later on it felt to

25%, meaning that the return oninvestment is decreasing when

compared to the previous years.

So the investors might look out foran opportunity to invest in other

stocks.

During the Boom in the real estate

market, Unitech gave a very highreturn on Investment, but with the

slowdown hitting the IndianEconomy, the ROI fell down

tremendously.


17.20 31.01 84.72 48.08 25.87


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Profitability Ratio


10.42 11.72 24.70 13.88 13.87

The Return on Capital Employed isfluctuating in nature.

This is unfavorable for Companysimage as it may result in decrease

in the confidence among theinvestors about the companysperformance, as investors investin those companies which moreoften have a constant ROCE or

whose ROCE keeps on increasing.

The company should takemeasures to improve it's Returnon Capital Employed, so that theinvestors and the shareholders

regain the confidence in the

company.


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Profitability Ratio


0.17 0.31 0.85 0.48 0.26

This ratio is used to analyze theability of the firm's management torealize an adequate return on the

capital invested by the owners of thefirm.

Tendency is to look increasingly tothis ratio as a final criterion of

profitability.

With the slowdown in the real estatemarket, the net profits of the

company have fallen.

The Net Worth of the company hasrisen tremendously but the profits ofthe company have not increased inlines with the Net worth and hence


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Ratio


24 56 12 6 5

Shows the portion of company's

profit allocated to each

outstanding share of common

stock

Indicator of companys

profitability

Stock split


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Profitability Ratio


4 1 0.5 0.25 0.1

DPS shows how much theshareholders were actually paid

by way of dividends.

Like EPS, there is a constant

decrease in DPS over the years.


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Profitability Ratio


16.71 23.31 4.13 3.94 2.76

It measures the relationship

between the earning belongingto the ordinary shareholders and

the dividend paid to them.

D/P Ratio is significant in theyears 2005 & 2006, however, it

does on decreasing in thesubsequent years.


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Profitability Ratio


83.29 76.69 95.87 96.06 97.24

Retention Ratio indicates whatpercentage share of the net profits is

retained in the business.

The D/P Ratio is low in the years

2007, 2008 & 2009, the earnings

retained by the company is high.


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Profitability Ratio


1.46 0.04 0.00 0.00 0.00

A financial ratio that shows howmuch a company pays out in

dividends each year relative toits share price.

Dividend Yield Ratio has almost

reached zero in the later years.


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Turnover Ratio

Mar 06 Mar 07 Mar 08 Mar 09

16.01 30.76 47.65 57.60

Stock turn over ratio / Inventoryturn over ratio indicates the

number of time the stock has beenturned over during the period and

evaluates the efficiency with which afirm is able to manage its inventory.

The Inventory T/o Ratio hasincreased from 16 to 57 in the given

period. This is largely due todecrease in the inventory level of

the company.


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Turnover Ratio


8.91 8.53 25.03 3.36 2.23

Debtors turnover ratio oraccounts receivable turnover

ratio indicates the velocity ofdebt collection of a firm.

The Debtors T/o Ratio has gonedown considerably which is notgood. A high Debtors T/o Ratio

reflects the liquidity position of acompany to meet its short term

obligations.


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Turnover Ratio


-0.64 -0.52 -10.57 1.48 -8.31

Negative working capital means thata company currently is unableto meet its short-term liabilities

with its current assets

In the real estate companies,products are delivered and sold tothe customer before the company

ever pays for them and hence thesecompanies do not feel the need to

maintain huge Current Assets.

Only in the year, 2008 the companyhad a positive working capital as the

company had generated hugecurrent assets from selling it's

products.


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Turnover Ratio

Capital turnover is used tocalculate the rate of return on

common equity, and is a measureof how well a company uses itsstockholders' equity to generate

revenue.

The higher the ratio is, the moreefficiently a company is using its

capital.

As the ratio is falling in the years,the company is becoming lessefficient.

It might lead to the outflow of the


40.78 52.29 27.93 10.21 5.44

Capital TurnoverRatio


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Solvency Ratio


3.65 6.92 5.77 7.34 4.61

Indicates the relative proportions

of

debt and equity in financing the

assets of the firmLargely financed by the creditors

of

the firm

Capital intensive in natureNew strategy adopted to tackle

high

debt


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Solvency Ratio


35 25 24 21 27

Indicates to what extent of the

total

assets is financed through the

owners capital

Ratio does not give a good

picture

Highly dependent on external

funding


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Solvency Ratio


53.71 32.7 32.2 26.41 37.24Shows the relationship between

equity share capital including

reserves and surpluses topreference share capital and other

fixed interest bearing loans

Company is highly geared

Burden of interest and loan

repayment

Might have problems getting loans


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Presented By : -

Sharath Bangera 05

Dolly Basantani 06

Dimple Bharil 07

Sumit Bhati 08

unitech ratio analysis

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