1. RATIO ANALYSIS & INTERPRETATION
APOLLO LTD &
CEAT TYRES

2. PROFITABILITY RATIO 1. PROFIT MARGIN RATIO : 𝑷𝑨𝑻 𝑵𝒆𝒕 𝒔𝒂𝒍𝒆𝒔 x100
YEAR
APOLLO LTD
CEAT LTD
2015
10.4%
5.34%
2016
9.33%
7.78%
2017
7.08%
5.13%
The profit margin for the year 2015 for Apollo tyres was 10.4% which decreased to 9.33%, 2016,because of decrease in revenue and profit margin ratio again reduced to 7.08% in 2017 ,this shows decrease in profit because of increase in expenses such as exceptional items, material cost, and interest in 2017.
The profit margin for the year 2015 for Ceat Ltd was 5.34% which has been increased to 7.78% in 2016 Because of increase in revenue and profit margin ratio again reduced to 5.13% this decrease in profit was because of increase in expenses such as exceptional items, material cost, interest in 2017.

3. PROFITABILITY RATIO 2. ASSET TURNOVER RATIO: 𝑺𝒂𝒍𝒆𝒔 𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒕𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕𝒔
YEAR
APOLLO LTD
CEAT LTD
2015
1.44 TIMES
1.60 TIMES
2016
1.18 TIMES
1.43 TIMES
2017
1.04 TIMES
1.41 TIMES
Apollo Tyres has an Asset Turnover Ratio of 1.44 times in 2015 which has been decreased to 1.18 times in 2016 and further it slightly decreased to 1.04 times in 2017 this shows decrease in profit margin occur due to excess capacity frequent breakdown ,lack of raw material or power etc.
Ceat Ltd has Asset Turnover Ratio was 1.60 times in 2015 which has been decreased to 1.43 times in 2016 and further slightly decrease to 1.41 times in 2017 this decrease may be because of excess capacity frequent breakdown ,lack of raw material or power etc.

4. PROFITABILITY RATIO 3. RETURN ON ASSET : 𝑃𝐴𝑇 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 x100
YEAR
APOLLO LTD
CEAT LTD
2015
15.07%
8.53%
2016
11.07%
11.17%
2017
8.15%
7.27%
ROA (return on assets) for Apollo Tyres for the year 2015 was 15.07% which decreased to 11.07% in 2016 due to excess installed capacity due to interruption in production. In 2017 the ROA has been further decreased to 8.15 % which is again due to excess installed capacity or due to interruption in production.
ROA for Ceat Ltd for the year 2015 was 8.53% which increased to 11.17% in 2016 this shows the company has been able to utilize its assets in an optimum manner and for year 2017 the ROA has been decreased to 7.27% which is due to excess installed capacity or due to interruption in production.

5. PROFITABILITY RATIO 4. RETURN ON EQUITY : 𝑃𝐴𝑇 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝐸𝑞𝑢𝑖𝑡𝑦 x100
YEAR
APOLLO LTD
CEAT LTD
2015
27.70%
23.33%
2016
19.47%
23.70%
2017
15.82%
14.80%
ROE (return on equity) for Apollo Ltd. In 2015 was 27.70% which shows that the company has sufficient funds to give interest to the shareholders which was marginally decreased to 19.47% in 2016 and which shows the company has not been able to utilize its shareholders funds in an optimum manner and it further decreased to 15.82% in 2017 the decrease of ROE this shows the shareholders are losing their wealth for consecutive 2 years.
ROE for Ceat Ltd. In 2015 was 23.33% which shows that the company have sufficient funds to give interest to the shareholders which was slightly increased to 23.7% in 2016 and which further decreased to 14.80% in 2017 the decrease of ROE shows the company has not been able to utilize its shareholders funds in an optimum manner.

6. LIQUIDITY RATIO 5. EARNING PER SHARE : 𝑃𝐴𝑇 𝑁𝑜.𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠
YEAR
APOLLO LTD
CEAT LTD
2015
19.20
73.91
2016
21.47
109.92
2017
21.59
81.70
The EPS earning price per share for Apollo tyres was Rs in 2015 which shows that company has been successful in generating the sufficient profit margin and for 2016 it increased to Rs21.47 and which it further increased to Rs21.59 in 2017 which shows the share per price was rising for the shareholders.
The EPS of Ceat Ltd. was Rs in 2015 which shows that company has been successful in generating the sufficient profit margin which lead to high EPS and for 2016 it increased to Rs and which further decreased to Rs.81.7 this due to marginal drop in the revenue.

7. LIQUIDITY RATIO 1. CURRENT RATIO : 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
YEAR
APOLLO LTD
CEAT LTD
2015
1.43:1
1.60:1
2016
1.30:1
1.26:1
2017
1.11:1
In the year 2015 Apollo Ltd had a current ratio of 1.43:1 this further decreased to 1.30:1 in 2016 due insuffient management of current assets to meet out its ongoing current liability then it. In 2017 it got decreased to 1.11 which shows that the company had increases its current liability.
The Current Ratio of Ceat Ltd. for the year 2015 was 1.6:1 which reflects the company ability to generate cash out of its current liability and it has in reduced to 1.26:1 in 2016 and further increased to 1.30:1 this is due to withdrwal of current assets.

8. LIQUIDITY RATIO 2. QUICK RATIO : 𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦
YEAR
APOLLO LTD
CEAT LTD
2015
0.74:1
0.75:1
2016
0.73:1
2017
0.51:1
0.63:1
Quick ratio of Apollo tyres for the year 2015 was 0.74:1 which slightly increased to 0.73:1 , 2016 and it further got reduced to 0.52:1 in 2017 this means that company does not have sufficient liquid asset to pay off current obligations.
The quick ratio of Ceat ltd for the year 2015 was 0.75:1 which shows that the company does have sufficient liquid assets to pay off its current obligation which decreased to 0.73 in 2016 and 0.63 this shows the risk of non payment of current liability.

9. LIQUIDITY RATIO 3. DEBTOR TURNOVER RATIO : 𝑆𝑎𝑙𝑒𝑠 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐷𝑒𝑏𝑡𝑜𝑟𝑠
YEAR
APOLLO LTD
CEAT LTD
2015
12.79 TIMES
8.07 TIMES
2016
11.45 TIMES
8.63 TIMES
2017
12.18 TIMES
10.67 TIMES
Debtor turnover ratio of Apollo Ltd was times in which means debtors were converted into cash.In 2016 it got decreased to times which is due to increase in debtors as credit sale increased but it further got increased to which show greater efficiency in converting debt into sales.
Debtor Turnover Ratio of Ceat Ltd. for the year 2015 was 8.07 times which means that the company converts its debtor into cash.Debtor turnover for the year 2016 increased to 8.63 times and furthur it increased to times.

10. LIQUIDITY RATIO 4. AVERAGE DEBT COLLECTION PERIOD : 360 𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜
YEAR
APOLLO LTD
CEAT LTD
2015
28 DAYS
45 DAYS
2016
31 DAYS
42 DAYS
2017
30 DAYS
34 DAYS
The average debt collection period for Apollo Ltd was 28 days for the year 2015 and it increased to 31 days in the year 2016 which shows that company holds liberal collection policy for its debtors and it further decreased to 30 days which show a quite fast conversion of debt into cash.
The average debt collection period for the Ceat Ltd was 45 days for the year 2015 which shows company has liberal policy towards its debtors and it decreased to 42 days which reflects that company holds a conservative policy towards its debtors. It further reduced to 34 days which shows there is a decrease in credit sales by the company.

11. LIQUIDITY RATIO 5. INVENTORY TURNOVER RATIO : 𝐶𝑜𝑔𝑠 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
YEAR
APOLLO LTD
CEAT LTD
2015
5.94 TIMES
5.05 TIMES
2016
5.55 TIMES
7.58 TIMES
2017
5.60 TIMES
7.59 TIMES
Inventory turnover ratio for Apollo Ltd for the year 2015 was 5.94 times has a good conversion of inventory into sales which means company has been successful in utilizing its resources and in year 2016 it was reduces to 5.55 which reflects there is a marginal drop in the sales and it further increased to 5.60 times which is possible because of proper handling of inventory.
Inventory turnover ratio for Ceat for the year 2015 was 5.05 times which shows company converts its inventory into sales at a good pace but it increased to 7.58 times which shows there is a drop in sales which is not a good indicator for the growth of the company and it further increased to 7.59 times.

12. LIQUIDITY RATIO 6. INVENTORY HOLDING PERIOD : 360 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜
YEAR
APOLLO LTD
CEAT LTD
2015
61 DAYS
71 DAYS
2016
65 DAYS
47 DAYS
2017
64 DAYS
Inventory holding period for Apollo Ltd for the year was 61 days which shows the company’s ability to hold its inventory for long enough to meet the future requirement of inventory and it increased to 65 days which shows the company’s efficiency to manage the inventory and it further reduced to 64 days.
Inventory holding period for the year 2015 was 71 days which shows the company has a good inventory management but in the year 2016 the company could not be able to manage its inventory for more than 47days which reflects company’s inefficiency towards its inventory and it remained the same for the year 2017.

13. SOLVENCY RATIO 1. DEBT EQUITY RATIO : 𝐷𝑒𝑏𝑡 𝐸𝑞𝑢𝑖𝑡𝑦
YEAR
APOLLO LTD
CEAT LTD
2015
0.15:1
0.31:1
2016
0.21:1
0.30:1
2017
0.44:1
0.37:1
Debt equity ratio of Apollo for the year 2015 was 0.15:1, which got increased to 0.21:1 which shows that company uses more amount of debt in and it further increased to 0.44:1 in 2017 , this reflects that the company is using high leverage, which shows that the company is taking more risk for creditors and increases its debt obligations.
The Debt Equity Ratio for Ceat ltd for the year 2015 was 0.31 shows that company has low use of leverage implicts lower risk in 2016 it decreased to 0.30 which shows a very conservative approach which further increased to 0.37 which shows inefficient use of financial leverage in 2017 as compared to other two years.

14. SOLVENCY RATIO 2. LIABILITY TO EQUITY RATIO : 𝐴𝑙𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝐸𝑞𝑢𝑖𝑡𝑦
YEAR
APOLLO LTD
CEAT LTD
2015
0.70:1
1.27:1
2016
0.79:1
1.004:1
2017
1.09:1
1.03:1
Liabilities to equity ratio of 2015 is 0.70:1 which show the company was not capable to make an appropriate financial leverage for the total proportion of liabilities and it increased to 0.79:1 in 2016 and then it further 1.09:1 in 2017 which means Apollo tyres have paid of substantial amount of equity in the company’s total liability which decrease the debt burden for the company.
Liabilty to Equity ratio of ceat ltd for the year 2015 was 1.27:1 which shows that the use optimum amount of liquidity out of total liability which decreased to 1.004:1 in 2016 which implicts that the company has paid its long term borrowings in 2016 and its further there was a slight decrease in the equity shareholders worth which changed the liability to equity ratio to 1.039:1 in 2017

15. SOLVENCY RATIO 3. INTEREST COVERAGE RATIO : 𝑃𝐵𝐼𝑇 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒
YEAR
APOLLO LTD
CEAT LTD
2015
6.97 TIMES
4.11 TIMES
2016
15.77 TIMES
7.84 TIMES
2017
13.94 TIMES
5.77 TIMES
Interest Coverage Ratio of Apollo Ltd for the year 2015 was 6.97 times which shows the compamy provide enough safety to its stakeholders and has sufficient funds to pay off their interest charge on various debt component and in 2016 it was increased to times due to decrease in profit for the same year and further it decreased to times in 2017 due to increase in interest expenses.
Interest Coverage Ratio of Ceat Ltd for the year 2015 was 4.11 times which shows the company provide enough safety to its stakeholders and has sufficient funds to pay off their interest charge on various debt component and in 2016 it was increased to 7.84 times due to decrease in profit for the same year and further it decreased to 5.77 times in 2017 due to increase in interest expenses in the same year.

16. CAPITAL MARKET RATIO 1. PRICE EARNING RATIO : 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆𝑡𝑜𝑐𝑘 𝑃𝑟𝑖𝑐𝑒 𝐸𝑃𝑆
YEAR
APOLLO LTD
CEAT LTD
2015
10.27
0.87
2016
8.40
0.64
2017
10.65
1.20
Price Earning Ratio for Apollo Ltd for the year 2015 was per share the company has good opportunity for its shareholders and higher return than the expected return. P/E Ratio for the year 2016 was 8.45 per share which shows that the company could not be able to generate optimum growth for its shareholders which reflect the under pricing of shares and further it increased to per share in 2017 which means that the company has been able to retain the trust of the shareholders.
Price Earning Ratio for Ceat Ltd for the year 2015 was 1.2:1 the company has good opportunity for its shareholders and higher return than the expected return.P/E Ratio for the year 2016 was 0.65 which shows that the company could not be able to generate optimum growth for its shareholders which reflect the under pricing of shares and further it increased to 0.87:1 in 2017 which means that the company has been able to retain the trust of the shareholders.

17. CAPITAL MARKET RATIO 2. DIVIDEND YIELD RATIO : 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆𝑡𝑜𝑐𝑘 𝑃𝑟𝑖𝑐𝑒
YEAR
APOLLO LTD
CEAT LTD
2015
0.10:1
0.15:1
2016
0.11:1
0.16:1
2017
0.13:1
Dividend Yield Ratio for Apollo Ltd for the year 2015 was 0.10:1 which shows the company could be able to generate optimum return to its preference shareholders and it increased to 0.11:1 for the year 2016 this due to change in price of dividend per share from Rs.10 per share to Rs.11.5 per share and in 2017 it there was a slight drop in dividend yield ratio to 0.13:1
Dividend Yield Ratio for Ceat Ltd for the year 2015 was 0.11:1 which shows the company could be able to generate optimum return to its preference shareholders and it increased to 0.16:1 for the year 2016 this due to change in price of dividend per share from rs 10 per share to Rs 11.5 per share and in 2017 it there was a slight drop in dividend yield ratio to 0.15:1

18. CAPITAL MARKET RATIO 3. PRICE TO BOOK RATIO : 𝑀𝑎𝑟𝑘𝑒𝑡 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑃𝑟𝑖𝑐𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒
YEAR
APOLLO LTD
CEAT LTD
2015
1.90:1
0.15:1
2016
1.50:1
0.13:1
2017
1.60:1
0.16:1
Price to Book Ratio for Apollo Ltd for the year 2015 was 1.9:1 which shows the company have an optimum growth opportunity from future prospect. In year 2016 it shows a slight decrease in the ratio to 1.5:1 which reflects that the company was slight insufficient to generate good return for shareholders.In 2017 there was an increase in price to book value ratio to 1.6:1 but still it shows insufficient growth for the shareholders due to under pricing of shares.
Price to Book Ratio for the year 2015 was 0.15:1 which shows the company has under priced its share and the stakeholders does not have an optimum growth opportunity in the company future prospect. In year 2016 it shows a decrease in the ratio to 0.13:1 which reflects that the performance of the company was not appropriate from the shareholders point of view. In 2017 there was a slight increase in price to book value ratio to 0.16:1 but still it shows insufficient growth for the shareholders due to under pricing of shares.