PUNE

Report on financial analysis of company

Aro Granite Industries
For the year 2012-2016
Group members:
Shrey Sharma
(16BSP2401PP)
Nidhi Agrawal
(16BSP1581PP)
Shubham Srivastava
(16BSP2464PP)
 Shubham Sharma
(16BSP2462PP)
Siddharth Garg
(16BSP2489PP)
Sunipa Majumdar
(16BS2626PPP)

Introduction
ARO Granite Industries started operations as a 100%
Export Oriented Unit in 1991 for processing Polished /
Flamed Granite Tiles & Slabs. The company exports its
products to North America, South America, Europe and
Far East markets.
Promoted by Mr. Sunil K. Arora, the Company has an
annual installed capacity of 1,80,000 sq.mtrs. at Unit I
with 4 Pedrini Block Cutters and 2 Pedrini Polishing
Machines, 1 Resin Line, 1 Calibration Machine and 1
Chamfering Machine. The Slab Plant at Unit II has an
installed capacity of 3,90,000 Sq. Mtrs. per annum. In
addition to this, the company has now setup a new Tiling
Plant at Unit II with an installed capacity of 3,60,000
sq.mtrs. per annum. The strategic and geographical
location of the plant ensures close proximity and direct
access to quarries in South India, which are known for the
finest and widest range of appealing granites.
In compliance with its dedication to excellence, the
company has installed the most sophisticated and
environment-friendly granite processing machinery
imported from Italy. Technically qualified and fully trained
personnel operate this state-of-the-art machinery.

This 100% Export Oriented Unit is ideally located at

Hosur, which is just 35 Kms. away from Bangalore - the
Granite Hub of India. The strategic & geographical
location of the plant ensures close proximity and direct
access to quarries in South India which are known for the
finest and widest range of Granites.

In its quest for perfection, AGIL ensured that all the key
personnel manning the processing machines are
technically qualified and fully trained to operate the
state-of-the-art machinery. A strict 100% inspection
system is adopted at all stages of manufacturing process.

Over the years, AGIL has earned a high degree of

credibility with its broad clientele base as the most
reliable and consistent supplier of premium Indian
Granites.

The customer network of AGIL spans the globe and is

currently meeting the granite needs of USA, Canada,
Europe, Japan, Far East and South Pacific Countries.

Total Customer Satisfaction is the driving force at Aro

Granites. Quality commitments and strict adherence to
delivery schedules is the essence of its success and its
growth.
Continuous in-house training programmes in various
disciplines like TPM, 7 QC Tools, Quality of Life, Positive
Mental Attitude, etc. help in achieving the organizational
growth in the right direction.

1.Operating Margin Ratio:

Operating Income/ Net Sales

Revenue( -) Operating Exp = Operating Income

Operating expenses includes wages cost of material used and depreciation.

2012 2013 2014 2015 2016

13.10% 13.46% 13.60% 11.11% 9.25%

Analysis:

It is a profitability ratio that measures the overall performance of the firm relative to
revenue, assets equity and capital. As we see the ratio is almost equal in 2012, 2013 and 2014,
but there is a decrease in 2015, compare to 2014 of 2.49%, which followed by the company in
next year and further falling by the ratio profitability in 2016 by 1.86%.
2.Assets Turnover Ratio:
Assets turnover ratio = net revenue/sale

Total Assets

Total assets = Operating balance + closing balance

2012 2013 2014 2015 2016

92% 94% 107% 97% 79%

Analysis:

This ratio measures low efficiently a firm uses its assets to generate sale, so a higher
ratio is always more favourable. It means a company is using its assets efficiently.

Its assets turnover ratio averages around 94% except in 2014 and 2016. In year
2014 there is an increased by 13% and in recent year it decreased by 15%.

3.Return On Equity:
Debt income (PAT)

Shareholders Equity

2012 2013 2014 2015 2016

15.61% 18.36% 16.43% 16.65% 14.09%

Analysis:

It measures low efficiently firm can use the money from shareholders to generate profit and
growth the company. Unlike other Ro return on investment ratio, ROE is a profitability ratio from
investors point of view net company point of views higher ratios are always better but have to
be compared with other company of some industry.
 From last five years as we can see an average of 16.23% is maintained on ROE which
shows the company is using equity fund moderately.

4.Debt Equity Ratio:

Debt Equity Ratio = Total liabilities

Shareholders Equity

2012 2013 2014 2015 2016

63% 78% 77% 77% 73%

Analysis:

D/E ratio tells us the ratio between our debts to equity fund. In this ratio is constant
during year 2013, 2014 and 2015 whereas slightly fluctuating during 2012 and 2016 which
tells they are not doing enough to reduce their debts. Other thing is an average ROE is
maintained which shows the company is using equity fund moderately.

5. Return on Investment/Assets

= Profit (PBIT)/T.A

2012 2013 2014 2015 2016

72.27% 75.19% 86.09% 82.24% 69.71%

This ratio measures the efficiency of the company that they are using their assets and in return
how much the profit they are earning. It is a ratio which is helpful to company not for an
investor.
After going through these figures, we can say in 2012 and 2013 years there ROI was quite
stable but there was an increase in 2014 by 10.9% and then a decrease of 4.66% and 12.53%
respectively which tells its going down since 2015 with a respectful margin.
 Conclusion
As going through the figures of year 2012-2016, with the given ratio, we
find out things were stable in the year 2012 to 2014 or minor changes
were ups and down were there but in year 2015 and 2016, the
performances has really gone down . As we analysed they are not
reducing their debt. Equity share holder must be moderately satisfied
because ROE has been decreased by 0.71% from 2012 to 2016. The
reason for this decline is the fund are not used efficiently or productive
in terms net revenues from operation.