Interpretation:

1. Liquidity Ratios:

Liquidity measurement helps us to check the company’s ability to pay of its immediate loan dues. In
other words, we can say this ratio tells how quickly a company can convert its current assets into cash to
pay of its current obligations. Not only loans, company must also clear its other current liabilities like
vendor payments, utility bills, tax dues, salaries etc.

 Current ratio

Current ratio is a ratio between company’s current assets and current liability. The current ratio is the
classic measure of liquidity. It indicates whether the business can pay debts due within one year out of
the current assets. Current assets at 1st year were 2.347 times the value of current liabilities which is a
good sign that we have very less debt to pay. But this ratio has decreased in 2nd year because our
current assets have been decreased as compared to 1st year. During year 1 current assets were 2.347
times the value of current liabilities which shows that our current assets are much greater than our
current liabilities and which is quite encouraging for the business but this value decreases over time and
in year 5 it reduced to 1.989 but liquidity ratios above 1 are always consider good and effective.

 Cash Ratio:

The cash ratio takes the test of liquidity even further. This ratio only considers a company’s most liquid
assets – cash and marketable securities. In year 1 company’s cash ratio is 0.792 indicates company is not
able to satisfy its current liabilities with cash. This ratio increase over the years and in year 5 it reaches
to 1.183 that’s indicate improvement in company’s liquidity position.

 Operating Cash Flow Ratio:

It indicates a company's ability to pay its debts with its existing cash flows. In year 1, operating cash flow
ratio of company is 4.676 which shows strong indication that company has strong ability to cover its
current obligations with its operating cash flows. This ratio fluctuates over year and in year 5 its value is
4.183 that’s shows company continue to generate cash from operations.

 Net Working Capital:

It is the difference between company’s current asset and current liabilities. Its value in 1st year is
557,520 means company has this amount in excess of current assets over current
liabilities. Over five years this value increases as compared to previous years. Its
means sufficient capital is available to meet short term liabilities.

 Working Capital Turnover:

It evaluates company’s efficiency to use its working capital in order to generate revenues. A higher
working capital turnover is better. In 1st year its value is 4.873 and it steadily increases over 5 years with
a strong indication of improvement in utilizing its working capital.

 Net Debt:

Net debt shows how much debt a company has as compared to its liquid assets. Its value should be less.
In year 1 this ratio is 86246 which means company has net debts position, which decrease over 5 year
and in year 3,4 and 5 it become negative which shows company has more cash as compared to net
liabilities.

 Net Debt to EBITDA ratio:

This ratio shows company ability to pay its debts using EBITDA (earnings before interest, taxes,
depreciation, and amortization). In year 1 this ratio is 0.249, which means company has 24.9% net debts
to its EBITDA, which decrease over 5 year and in year 3,4 and 5 it become negative which shows
company has more cash as compared to net debt.

 Risky Asset Conversion Ratio:

It assesses the proportion of company’s assets that are difficult to convert in cash like equipment and
intangibles. In year 1 its value is 0.627, indicating that 62.7% of company assets are risky. This value
decreases over years and in 5th year its value is 0.446, indicating 44% of company assets are risky.
 Total Liabilities to Equity:
It compares company’s total liabilities to its shareholder equity. A good debt to equity ratio is
generally below 2.0. Company condition over 5 years indicates increasing financial leverage and
potential risk associated with debt financing.

Debt to Capital ratio:

It evaluate the proportion of company’s capital financed by debt. Compared to
year 1 this ratio is continually increasing which indicates increasing financial risk and affect
company’s ability to meet its long-term obligations.

2. Asset management ratios:

It indicates how efficiently the firm is using its assets to generate revenues.
  Fixed asset turnover:
At year 4, 5 this ratio shows that higher efficiency in utilizing the assets. Starting years will indicates
inability of firm to utilize the fixed assets efficiently.

 Total assets turnover:

Almost proportion of Sales and total assets are same. Increasing trends shows improved asset
utilization.

3. Debt Management Ratios:

 Time interest earned:

It helps to measures a company’s ability to meet the interest payments on its debt. As per industry
norms, the ratio should never be less than 2.5 as it is an absolute danger signal. Higher values indicate
better coverage of interest expense. Increasing trends indicates company’s improving ability to cover
interest payments.

 Debt ratio:

This ratio is being used by top management to take decisions as well as investors before investments.
Year 1 shows only 18.5% of company’s assets are financed by debts and year 5 shows significant reliance
on debt financing. Increasing trends indicates increasing reliance on debt financing.
4. Profitability Ratios:

 Profit Margin:

Profitability ratios indicate how efficiently a company generates profit and value for shareholders.
Higher ratio results are often more favorable, but these ratios provide much more information when
compared to results of similar companies, the company's own historical performance, or the industry
average but these ratios shows the average profit. The increasing profit margins over five years shows
company is managing its expenses effectively and generating profits.

 Basic earning power

It is the relationship between earning power of the company in relation to asset of company. The
interpretation can be made only with combining of other ratios, and industries standards. The higher
BEP ratio is better. Year 5 shows improvement that indicates improving ability of company to generate
operating income from its assets.

Return on assets (ROA):

It is a profitability ratio that measures the rate of return on resources owned by a business. Return on
assets generally, the higher the ROA, the better; but it should be compared to a benchmark to provide
better insights. Higher ROA shows company is generating more profit. Compared to year1 company
shows higher ROA with each passing year.