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VI.

DR. REDDY MYLAN


Current Assets 119688 6472.7
Current Ratio Current = = 1.85144 = 1.570205
64646 4122.2
Liabilities
Interpretation: Current ratio for both companies is more than 1 indicating their ability to pay short term debt
which can be translated to good solvency. Also, for both companies the current ratio is not too high which means
that the company does not have unemployed cash and cash equivalents.
DR. REDDY MYLAN
Current Assets -
119688 - 25578 6472.7 - 1951
Inventories
Quick Ratio = = 1.45577 = 1.096914
Current
64646 4122.2
Liabilities
Interpretation: The difference in the current ratio and the quick ratio of Dr. Reddy and Mylan indicate that
Mylan is holding more inventory with respect to its current assets as compared to Dr. Reddy's. In addition,
although for both companies the quick ratio is more than 1, Dr. Reddy's has better solvency than Mylan since its
current as well as quick ratio are higher.

DR. REDDY MYLAN


Total Total Liabilities 79314 12501.9
Liabilities to = = 0.61802 = 1.280172
Equity Equity 128336 9765.8
Interpretation: The total liability to equity ratio of Mylan indicates heavy reliance of Mylan on liabilities rather
than equity to generate revenue as compared to Dr. Reddy's. Thus, creditors have higher stake in Mylan than
investors.
DR. REDDY MYLAN
22718 + 110 + 1.3 + 1077 +
Total Debt to Total Debt
= 10685 = 0.26113 6295.6 = 0.755074
Equity
Equity 128336 9765.8
Interpretation: D/E ratios of both companies indicate that Mylan has been generating its revenues more by
taking debt for its assets while in case of Dr. Reddy's the proportion of equity employed in revenue generation is
much higher.

DR. REDDY MYLAN


Proportion of Debt due in one
= 22718 + 110 = 68.1169 1.3 + 1077 = 14.6232
debt due in year
22718 + 110 + 1.3 + 1077 +
one year Total Debt
10685 6295.6
Interpretation: Dr. Reddy has 68% of its total debt due in one year. This is an alarming percentage. Whereas,
Mylan has only 14% of its total debt due in one year.
DR. REDDY MYLAN
Cash Flow From
Operating 41247 2008.5
Operations
Cash Flow to = = 1.23078 = 0.27238
22718 + 110 + 1.3 + 1077 +
total debt Total Debt
10685 6295.6
Interpretation: This ratio indicates the capacity of the company to cover its debt with cash flow from operations.
Generally, ratio of more than 0.8 indicates substantial capacity. Dr. Reddy's indicates strong position to cover its
debt with the ratio of more than 1. Mylan indicates poor capacity to cover for its debt with low ratio of 0.27. It
can be said that Mylan has low liquidity in terms of operating cash flows
DR. REDDY MYLAN
Times- EBITDA or
27140 915.4
Interest- EBIT = = 32.8571 = 2.697113
Earned Interest Expense 826 339.4
Interpretation : Both companies have TIE ratio greater than 2.5 which is a healthy indication.

DR. REDDY MYLAN


Common 22718 + 110 + 1.3 + 1077 +
Total Debt
Sized Total 10685 6295.6
= = 16.1392 = 33.11478
Long Term
Total Asset 207650 22267.7
Debt
Interpretation: The lower proportion of debt with respect to assets in case of Dr. Reddy's indicates that the better
leverage of the company i.e. the company can pay all its debts with assets it owns
DR. REDDY MYLAN
Common Total Liabilities 79314 12501.9
Sized Total = = 0.38196 = 0.561437
Liabilities Total Assets 207650 22267.7
Interpretation: The lower proportion of liabilities to assets in case of Dr. Reddy's indicates that the better
leverage of the company i.e. the company can clear all its liabilities with assets it owns

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