Using the technique of Ratio Analysis, comment on the performance of the company during 1998. The summarised Balance Sheet of M/s. Arun and Co. for the years 1997 and 1998 are as follows:

(Rs. In Lacs)

1997

1998

Net Fixed Assets

20

30

Current Assets

30

40

Current Liabilities

10

20

12

28

Total

40

28

Represented by:

15% Loan

20

36

Shareholders Funds:

Equity

15

17

Reserve

5

20

5

22

Total

40

58

Other Data:

Turnover

75

60

Materials Consumed

35

24

Salaries and Wages

10

9

Other Costs

15

17

Interest

3

5

Profit

12

5

Dividend Paid

5

4.4

Appraisal may be done using the following ratios:

Current Ratio

Net Profit Ratio

Material Consumed to T/O

FA T/O

WC T/O

CE T/O

Interest Coverage Ratio

Dividend Cover

Debt to CE