• On the basis of current ratio we can make the following statements: The optimum current ratio is 2:1 Telco is closer to this figure. This is an indication that Telco is not able to maintain a balance between its current assets and current liabilities. In the case of Daewoo the amount of current assets are not being utilized efficiently at the moment and once it takes care 0f this aspect there is tremendous scope for growth.
• As per as debt to equity ratio is concerned it is given by borrowing divided by net
worth ideally it should he 2:1 in Telco’s case it is less than that which signifies that
• Telco is not aggressive enough in its functioning this is definitely not the time to play safe as far as car industry is concerned. Daewoo has far too high debt than is normally permissible for Maruti the ratio is very less almost negligible. This indicates that Maruti s driven by equity funding and the culture of borrowing to grow has not yet picked up at all in the organization. But looking at the new list of competitors it must have a re-think as far as this strategic aspect is concerned.
• As far as the interest coverage ratio is concerned Maruti has an enormous 16:1 This shows that Maruti has very low borrowings and also that it has a large profit before interest and taxation Also Maruti has a very low ratio which is because it has very high interest obligations
• In net profit to total assets ratio the figure is highest for Maruti at 18%. For Telco it is a measly 1%. This signifies the efficiency with which Maruti utilizes its assets.
• Return on investment is PRIT divided by net assets. Maruti has four times the positive ratio over Telco. This shows once again the efficient functioning of Maruti in both sales and distribution and in efficient control of assets.
• Inventory turnover can simply be called the ratio of sales to inventory. The higher the ratio, the better it is. Daewoo seems to be doing the worst in all the three. Again Maruti has a better ratio and it shows that its inventory levels are low and also that it beats Telco once again in sales turnover to surpass in both areas is really commendable.
• Debtor turnover arises when a company sells on credit. Sometimes it sells due to Compulsion as well. The higher the ratio, the better is the realization of money by the Company Daewoo and Telco are both at the same level.
• Total asset turnover ratio is nothing but sales upon total assets. Similarly fixed assets turnover ratio is nothing but sales upon fixed assets. In both these cases Maruti score highly over Daewoo and Telco.
• As per as debt to equity ratio is concerned it is given by borrowing divided by net
worth ideally it should he 2:1 in Telco’s case it is less than that which signifies that
• Telco is not aggressive enough in its functioning this is definitely not the time to play safe as far as car industry is concerned. Daewoo has far too high debt than is normally permissible for Maruti the ratio is very less almost negligible. This indicates that Maruti s driven by equity funding and the culture of borrowing to grow has not yet picked up at all in the organization. But looking at the new list of competitors it must have a re-think as far as this strategic aspect is concerned.
• As far as the interest coverage ratio is concerned Maruti has an enormous 16:1 This shows that Maruti has very low borrowings and also that it has a large profit before interest and taxation Also Maruti has a very low ratio which is because it has very high interest obligations
• In net profit to total assets ratio the figure is highest for Maruti at 18%. For Telco it is a measly 1%. This signifies the efficiency with which Maruti utilizes its assets.
• Return on investment is PRIT divided by net assets. Maruti has four times the positive ratio over Telco. This shows once again the efficient functioning of Maruti in both sales and distribution and in efficient control of assets.
• Inventory turnover can simply be called the ratio of sales to inventory. The higher the ratio, the better it is. Daewoo seems to be doing the worst in all the three. Again Maruti has a better ratio and it shows that its inventory levels are low and also that it beats Telco once again in sales turnover to surpass in both areas is really commendable.
• Debtor turnover arises when a company sells on credit. Sometimes it sells due to Compulsion as well. The higher the ratio, the better is the realization of money by the Company Daewoo and Telco are both at the same level.
• Total asset turnover ratio is nothing but sales upon total assets. Similarly fixed assets turnover ratio is nothing but sales upon fixed assets. In both these cases Maruti score highly over Daewoo and Telco.