COMPARATIVE ANALYSIS OF OMAXE PVT LTD WITH DLF AND GODREJ PROPERTIES

Abstract

Ratio analysis is a financial technique which is commonly used for analyzing the firm's financial performance with respect to its competitors and industry standards. The project is based upon the analysis of the Annual Financial Statements of Omaxe Pvt Limited over the FY 2011-12 to 2013-14 with DLF and Godrej properties, the companies that are operating in real estate sector. It includes analyzing the financial statements by employing financial ratio analysis. The present study extends its benefits to the investors and creditors to provide them insights about the financial performance of the company so as to help them in making an informed decisions while investing in companies in real estate sector. Also, as real estate is booming and is expected to attract huge domestic as well as foreign investments in near future, so it is the right time to provide insights about the industry with such a research. The research can be useful for the creditors for analyzing various ratios calculated so as to establish credit worthiness of the company and also to determine the appropriate interest rates for the same. The ratios used in project are liquidity ratio, leverage ratio, profitability ratio and turnover ratios. In liquidity aspect, Omaxe has shown low performance as compared to both DLF and Godrej properties. The efficiency level of paying their short term obligation is not good. Omaxe holds low current asset in form of cash due to which company is able to utilize its all current assets and has kept less of cash in company. In solvency aspect, Omaxe has low usage of debt, which lead to fall in earnings per share for the company. Company debt usage need to be increased as debt is cheapest source of finance. Company has very low ability to pay its interest with in the amount of profits generated from the operations. In profitability aspect, Omaxe has generated very low profitability from its operating and non operating activities. But, it has high return on investment as compared to both DLF and Godrej which shows that they are earning from their investment. In turnover aspect, Omaxe has generated very low sales from total asset and fixed asset. But Omaxe has generated high sales from net worth as compared to both DLF and Godrej. After analyzing the results it is recommended that company needs to achieve more efficiency from the investments that they have done in projects.