Mba Finance Project

The Western India Plywoods Ltd.
INTRODUCTION T0 STUDY
No business can plan its activities without considering its financial resources. Financial management is that part of management which deals with raising of funds in the most economical and suitable manner, using the funds as profitability as possible, planning future operations, inspections, controlling current performance and future development through financial accounting and other means. Finance in essence is considered with the acquisition and use of funds by a business firm. The main objective of financial management is to control required funds for meeting short term and long-term needs of business enterprise and to maximize the value firm to its equity share holders. To have a clear understanding of the profitability and financial position of business, the financial statements have to be analyzed and interpreted. Financial statements are prepared for decision making. They play a dominant role in setting the framework of managerial decisions. But the information provided by the financial statement is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided by the financial statement is of immense use in making decision through analysis and interpretation of financial statement. It helps to summarize large quantities of financial data and to make quantitative judgments about the firm's financial performance. The study entitled An analytical study of Financial Performance with reference to The Western India Ply woods Ltd. Kannur has been oriented with a view to study the financial position of the company that help in making sound decision by analyzing the recent trend.
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1. INDUSTRY PROFILE
Plywood Manufacture in India In 1916, Government of India set up a committee to explore the feasibility of manufacturing tea chest plywood in Bengal and Assam and the other in North Bengal were set up in 1917 to manufacture the same, but they stopped production owing to nonavailability of suitable bonding materials, indigenous lead lining nails and bands for packing. Both the imported plywood and sawn wood chest were used together. No development took place for some time until two factories in Assam took up the matter as a challenge and started making plywoods for tea chest by around 1924 -1925. These were resistance from the tea industry for the use of locally made plywood on the ground that quality of timber used was not suitable. Since independence the plywood industry has regained strength and has grown to a full-pledged industry in spite of some setbacks faced by the industry in the post war period. In 1947, India was a net import of plywood, mainly tea-chest plywood compared to the plywood production in 1947 which was negligible, the present day production has grown up to 62 Million . These have been a steady growth in the plywood industry. Since the last 3-1 years. The plywood industry consumes about 15 million M3 of timber. The other main raw materials used by plywood industry in the synthetic rain which is available within the country. In Kerala, there are more than 500 plywood industries including large scale industries such as Hindustan New Print and Western India Plywood Ltd. In India Plywood industry are mainly located in Assam, Karnataka, Kerala, Maharashtra, Madhya Pradesh and Andaman & Nicobar Islands. Role of Plywood Industries in India:Plywood industries have played a significant role in the Socio-economic development of the country. They provided various types of plywood products that are Page 2
The Western India Plywoods Ltd. required for various infrastructural developments. This industry means the strategic needs of our country like portion plywood, plywood for pre-fabricated houses required for soldiers on the Himalayan frontiers and other government needs. This industry also means the packaging requirements of the country export. The industry also provides employment to a large number of people directly and indirectly, through various sales outlets. Problems regarding Plywood:Wood based industries in India faces a lot of problems. Major are in the under utilization of installed capacity due to the non-availabil.ity of required timber in India. Most wood based industries depend upon the government owned forest for their raw material. But due to the shortage in the effective forest covers, which was needed for maintaining ecological stability, the central goal controls the falling of trees. Thus the diminishing forest covers inadequate natural degeneration and subsequent for falling of trees, led the industries into hardships. Due to non-availability the big industrial consumers resorted to import, which increased their cost of production. However plantation would have the inherent deficiency of susceptibility to bio deterioration and therefore expanded use of preservation like Bora and Boric acid is imperative. But this may lead to environmental pollution. High cost of production due to increased cost of gilth logs, urea formaldehyde and phenol formaldehyde, competition from private and public sector, import restriction imposed by government, mismanagement labour, and unrest are other factors which adversely affected growth and profitability of the plywood industry.
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2. COMPANY PROFILE 2.1ORIGIN OF THE ORGANIZATION

The western India plywoods Ltd., the largest wood integrated industrial Complex in Southern Asia was started in the year 1975 at Baliapatam, Kannur. Thanks to the dynamism and vision of its founder late Mr. A.K.Kaderkutty, who is acknowledged doyen of the Indian wood working industry. The Company which commenced as a Plywood unit has steadily expanded to produce the diverse products, which it now offers consumers. A Hardboard plant was set up in 1959 - 1960 with West German Technical collaboration. Initially with a capacity of 12.5 tones. This has now increased its capacity to 120 tons per day. Besides plywoods and Hardboard the company also produces quality flush doors, Block boards, Densified wood, Modern furniture items and a boost of other products to suit the end market needs. In 1978 the Western India Plywoods Ltd., set up a plant for manufacturing a Di Allyl Phalate(DAP) molding powder, a thermoplastic that has to be imported until then, significantly the technology developed in house with support from Shree Ram Institute of industrial Research Delhi. In 1989, the company has put up a pre finishing plant with Italian and German Technical support for printing wood grains and plain colours on plywoods and
hardboards. The pre finishing plant is the only one of its kind in the country and one of the very new plants in the world. The State-of-the-art-technology adopted here eliminates the pollution problem completely. The company has also for the first time in the country, put up a pilot plant for radiating wood in collaboration with the Baba Atomic Research centre, Mumbai in order to upgrade the quality of low-grade timber. The company has set up a modem Research and the most important feature of wood based complex is its motto of `cent percent utilization' of wood. Page 4
The Western India Plywoods Ltd. 2.2 GROWTH The manufacture of plywood was stepped up steadily by addition of new machinery, mostly imported. The company also diversified from Tea chests and Commercial plywood to Decorative plywood, Block board, and Flush door, Shuttering and Marine Plywood, Aircraft Plywood etc. The Company planned and executed the hardboard plant between the years 1956 and 1958 with an initial installed capacity of 12.5 tones of hardboard per day. The company also installed its own synthetic resin unit in 1959 with a capacity of 200 tones. WIP moved into chemical plastics sector. In 1978 WIP setup a plant for manufacturing Di-allyl Phthalate (DAT) molding powder a thermoplastic which has to be improved, until then significantly the technology was developed in-house with the support from Shree Ram Institute of Industrial Research, Delhi. All the raw materials and processes employed in the plant are 100% eco friendly. From 1971 onwards the company has been exporting decorative Plywoods and veneers to USA, Germany, France, Dubai, Sweden and other countries of Middle East. In the present WIP products are exported to more than 29 countries spread across 4 continents to buyers associated with the company for over three decades. CORPORATE GOVERANANCE PHILISOPHY As an ISO 9001 : 2000 unit, engaged in the business of manufacture and sale of diverse range of products, the company envisages the assurance of product quality, transparency, accountability and integrity in its operations and in its relation with all the share holders, that is customers: investors, employees, the government and other business associates.
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2.3 Achievements of the organization

First to make irradiated wood First to make aircraft plywood First to make synthetic resin adhesive bonded plywood using hot pressing techniques. First to make high pressure industrial laminates First to make quality hardboard way back in 1959-60 First to manufacture Di Ally phthalate molding powder First to manufacture GI Plywood-GI sandwich panel for anechoic chamber. First to make pre-finished Plywoods and hardboards using UV cured surface finishing techniques. First to get ISO 9000 certification for hardboard and prefinished boards. The company has earned special appreciation from leading industries in the automotive sector, Footwear sector, ISRO, BARC, Indian Railways etc.
PATENTS
Radiation induced polymerization of DAP, MMA & PE Radiation induced polymerization of DAP & MMA A process for manufacture of wood polymer composites by gamma irradiation Manufacture of ABS plastics Manufacture of SAN plastics
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2.4 VISION, MISSION AND QUALITY POLICY VISION

Continue to remain the best plywood panel corporation in India with a growth in allied areas
MISSION
To provided utmost satisfaction to the consumer through best quality and customer care. To continusely upgrade the product through innovation and convergence of new technology and to produce the best quality product. To safe guard and enhance share holders value To respect the dignify of all employees and together to become instrumental in the development of the country while protecting the environment. To utilizes the surpluses for the welfare of employees and the society at large
QUALITY POLICY
Quality policy of WESTERN INDIA PLYWOODS LTD is to manufacture products as per national/international standard and make them available to customers as per requirement. WESTERN INDIA PLYWOODS LTD endeavor to upgrade the quality of its products and related services on a continual basis through regular improvement effort. A well defined quality management system has been implemented. This system is continuously revised to enhance its effectiveness and updated to meet changing needs.
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2.5 OBJECTIVES
Suitable equipments and machinery for process control at all stages. Provision of adequate resources including raw materials and personnel to ensure constant product quality. Well defined process and product characteristics to enable monitoring analysis and continual improvement Communication of requirement of products including customers requirement, statutory/regulatory requirements as per aspect of QMS including policy and objective among all employees.
2.6 OWNERSHIP PATTERN:

The western India plywood is a public limited company. The organizational structure consists of BOD at the top. At present, the members of BOD are, Mr. P.C.D. Nambiar, Chairman Mr. G.S.A. Saldanha, Director Mr. N.L. Vaidyanathan, Director Mr. V. Ramachandran, Director Mr. Manoj Joshi, Director Mr. Bhaskar Menon, Director Mr. Ranjit Kuruvila, Director Mr. A.J. Pai, Director (KSIDC, Nominee) Mr. G. Gangadharan Nair, Director (IFCI, Nominee) Mr. P.K. Mohamed. MD Mr. P.K. Mayan Mohamed, Executive Director The company has various departments the managers of these departments are headed by a G.M, Who is responsible for all the affairs of the company in the absence of M.D. Page 8
2.7 PRODUCT PROFILE

The major product for which the company has been the leaders in quality since 1945 is just because of its finest quality products produced as per international standards. The products of the company are globally accepted. Over the last 50 years, through its close knit co-ordination of various processing units, professional management and maximum utilization of facilities available, the company has made an indelible mark in the wood industry a mark of glorious achievements
WIPWOOD
Densified wood is used in the manufacturing of textile & jute mill accessories
WIPLAM
Densified wood is used in the manufacture of insulation components for transformers & switchgears
WIPCHECK
Densified compressed floor board, with both chequred and plain surfaces, building & chemical industries
WIPROC
Densified wood used in the manufacture of high precision jig formatting tools in aeronautical industry & neutron shields in reactors.
WIPBEAR
Densified wood used in the manufacturer of bearing and gears
WIPCHEM
Densified wood used in manufacture of electrical insulation components like studs, nuts, cleats & other segments
WIPRESS
Rigid and high purity densified wood with excellent electrical and mechanical properties, for use in the transformer industry.
WIPLAC
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The Western India Plywoods Ltd. Pre-finished plywood & hard board, used in the manufacture of panel coiling and furniture.
ULTRACLICK
Engineered wood flooring
COMPREG SLATS.
Used for railway coaches, paneling and as a building material.
DENSIFIED MOULDED SEATS

Used for railway coaches, auditoriums & restaurant.
WESTINDPLY
Decorative finished and commercial finished BWR and BWP grade plywoods, manufactured from selected species of timber, water proof quality used for boat building, concrete shuttering, furniture, partitions, paneling etc.
HARDBORDS
Used extensively by automobile industries, fiber drum manufactures, shoe manufactures, photo frame backing, clock manufactures, school writing parts and also for partitions.
FURNITURE
All type of furniture including molded a knock down furniture
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2.8 ORGANIZATIONAL STRUCTURE

The usual way of depicting a formal organization is an organization chart. The connecting line on this chart shows who is accountable to whom and who is in charge of which department. Organization chart reveals the mode of authority and responsibility delegated in organization.
2.8 ORGANIZATIONAL STRUCTURE

Managing Director
Executive Director
HD/PFP/P CP Store/P&A Electric al
GM (administration)
GM (production)
Company Secretary
Chief Accountant officer Development Manager Works Manager
Technical Manager
Marketing Head
Plywood, Flush door, Block board
Central Excise
Plant Manager Densified Wood Products
Sales Manager
DWD
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2.9 DEPARTMENTALIZATION 2.9.1 FINANCE DEPARTMENT

The Chief Accounts officer is the head of the Accounts Department. He is assisted by the Accounts officers. All financial decisions are taken by the Accounts Department. WIP Ltd. Maintains 5 subsidiary book. They are as follows1. Cash Receipt a\c 2. Cash Payment a\c 3. Bank Receipt a\c 4. Bank Payment a\c 5. Journal Journal entries are maintained in order to rectify the errors. The three personal ledgers maintained are:1. Account receivables 2. Account Payables 3. Advance to Staff Rest all entries are included under direct expenses. Each and every transaction is reflected in general ledger. General Ledger includes direct expenditure and all other items like total sales, purchases, payables, receivables etc. The sale Department maintains Sales Day Book, Debit Note and Credit Note. Depreciation is provided on the straight-line method at the rebate specified in schedule XIV of the Companies Act 1956. The audits, finance, share transfer and grievance committee regularly meets to consider aspects relevant to each committee. It is ensured that the share transfer agents promptly attend to all Shareholders grievances. There is comprehensive management reporting system on all aspects of operation and the boards of directors periodically. them
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The Western India Plywoods Ltd. FUNCTIONS 1. Allocation of Funds 2. Raising of Funds 3. Profit Planning
2.9.1 HIERARCHY OF FINANCE DEPARTMENT

General Finance And Company Secretary Accounts Manager Assistant accountant manager
Accounts staff THE BANKERS
Accounts staff
Accounts staff
Indian Overseas Bank, State Bank of India, Dena Bank and Punjab National Bank are the bankers of the western India Plywoods Ltd. DEMATERIALIZATION OF SHARE The Company-had entered into an agreement with National Securities Depositors service Ltd. (NSDL) from 15th March onwards for Company's share traded in electronic form. SOURCE OF FUNDS Shares Reserves and Surplus Loans
Secured Loans Unsecured Loans Page 13
The Western India Plywoods Ltd. ACCOUTING PROCEDURE WIP follows double accounting system and also maintain four types of journals. They are1. CPB (Cash Payment Book) 2. BPB (Bank Payment Book) 3. CRB (Cash Receipt Book) 4. BRB (Bank Receipt Book) For these 4 types of journals a sub ledger is prepared. This is classified into three. a. b. c. Accounts Receivable Book (ARB) Accounts Payable Book (APB) Personal Ledger (PL) At the end of every month the sum total of the ledger are transferred to the main ledger. Then there should have the equality in the amount of sub ledger and the main ledger. The next accounting procedure is preparing trial balance. At the end of every financial year, profit and loss account and Balance sheet is prepared, from which financial position of WIP is noticed. CAPITAL STRUCTURE The capital structure of WIP was made up of equity chare and preference shares. They issue only redeemable preference shares. They also issue bonus shares at the time of high profit. Their shares are registered in cochin and madras stock exchanges. A part of company's profit was transferred profit and loss account is on the board's decision Foreign Currency Transaction Foreign currency liabilities outstanding as at the balance sheet are translated to exchange rates prevailing on the date and the loss or gain arising out of the said Page 14
The Western India Plywoods Ltd. transactions relating to acquisition of fixed assets is adjusted to cost of relative assets and others are charged to profit and loss account. Dividends In view of the lack of disturbance profit, directors are unable to recommend any dividends for the past five accounting years. Company is proposing to pay- dividend in the following year. Income Tax Provisions for income tax are made based on the assessable income as computed accordance with the provision of the Income Tax Act, 1961. Timing differences between accounting and taxable income capable of reversed in subsequent years are recognized as deferred tax. WIP publishes Annual Report every year, which includes the Profit and Loss account, Balance Sheet, accounting policies of the business etc.
2.9.2 MARKETING DEPARTMENT

Marketing is one of the most dynamic fields within the management arena. The main duties of marketing department in an organization are to analyze market, find opportunities, design product, formulate marketing strategies, develop specific methods and action, propose a budget and establish a set of controls. POLICY High quality and high price is the policy of WIP. So the company aims quality conscious customers. OVER ALL MARKETING STRATEGIY Marketing strategy revolve around its product quality. The company's emphasis on product performance and reliability has enabled it to command a performance
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The Western India Plywoods Ltd. premium in the market it as entered significant brand equity in its target market coupled with superior product development capabilities has enabled. PROMOTION The very important point to be noted is that till now there has been no advertising for WIP LTD. The main promotion activity of WIP is conducting and participating in exhibitions to attract potential customers. They have more of a direct selling approach. It has around 40 sakes depots nationwide. COMPETITORS At first there was no strong competition WIP was the monopolistic company. But now it faces strong competition from IPM (Indian Plywood Manufacturing Company) as a slight a competition from Polymer, Kitply and Century etc. TARGET SEGMENTS As wood based panels are essentially intermediate products that are used for further processing and value addition, the most logical segmentation variable is end use of application. WIP distinguishes between industrial marketing, export marketing and marketing at the retail level and has developed separate programs for each Some of the major segments are:> The interior design and furniture manufacture segment > The building construction segment > The automotive coach - building segment > The boat - building segment MARKETING MIX A description of the marketing mix adopted for WIP's major product line is provided below.
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The Western India Plywoods Ltd. PRICING Consequent to superior raw materials and additional processing incorporated in the manufacture of the WIP's plywood panels - they are more expensive than product offered by the competitors. WIP's philosophy of continuously upgrading its machinery to help in line with state - of-the art technology also adds to final produced cost. However the additional perceived value arising out of such investments in more than the marginal cost addition and hence customers are willing to retain loyal to WIP's products.
2.9.2 HIERARCHY OF MARKETING DEPARTMENT:

Managing Director Marketing Manager Marketing Coordinator Business Manager Marketing Officer Marketing Executive Marketing Representative
2.9.3 PRODUCTION DEPARTMENT

Production is the process by which raw materials are converted into finished products. The production manager manages the Production Department followed by production Executive, production Assistant and production Supervisors. It is the responsibility of the Production Manager to determine the product designed by the firm.
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The Western India Plywoods Ltd. Care should be taken to ensure that the products manufactured are of high quality and produced in the specified time. The raw materials that are used to produce the output as follows: 1. Wood 2. Steams 3. Chemicals WOOD For general purpose the wood used are Kalpine, Cellapine, Mango, Neeli, Pali, Mullanpali, Redcidar, Pula, Redpine, Cher etc. For decorative purpose, the woods used are Rosewood, Teak, Mahogony, Padauk, Beech Silver Oak, Kussia, Dhavala and Chempak. STEAM Steam is the energy used to operate the machines. The steam comes from boilers. There are four to five types of boilers. They are:1. Saw Dust Boiler 2. Fire wood Boilers 3. Industrial Engineering & Agricultural Cooperation Boilers 4. Thermo Pack Boilers.
CHEMICALS The various chemical used in the preparation of plywood are Urea formaldehyde, Acrolith. Phenol Formaldehyde etc. The product mix of WIP includes Hardboard, Plywood, Densified Wood, Industrial Marinates, and Furniture and pre-finished Boards. Page 18
2.9.3 HIERARCHY OF PRODUCTION DEPARTMENT:

Production Manager
Works Manager
Supervisor (shifting charge)
Operators
Operators Assistant
2.9.4 SALES DEPARTMENT

Sales department is one of the core departments in WIP Ltd. Sales volume is one of the most important variables affecting profit. Sales are done directly by the company itself. The finished goods after inspection are sent to Sales Department. They have their own value department where all the company's products are displayed and sold WIP has their own list of value customers like Indian Railway, Defense etc. Besides they have an exciting range of specialty products from which customers can choose. Any wood materials used at the time of construction of a house are available at the sales depots. WIP Ltd engages in industrial sales, export sale and in domestic sale. The main industrial customers of the company are Indian Railways, HMT, KSRTC, Shipyard etc. Products are mainly exported to the countries like United States of America. France, Netherlands, Sri Lanka, Japan and Canada. Domestic buyers are mainly carpenters, furniture companies and local people.
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The Western India Plywoods Ltd. The Commercial Tax Orifice (CTD) heads the sales tax division. Sales tax is the main revenue to the government. Sales tax is paid according to the General Sales Act 1963. Sales Tax is divided into Central Sales Tax (CST) and Kerala Government Sales Tax (KGST), There are five schedules to the General Sales Act. To exempt from tax various firms submit F- from, C-form and H-form. If one copy of bill of dealing is shown sales tax need not be paid. Separate return should files for KGST and CST. Annual return is filed on April 30th every year. If sales tax is not paid in time, interest is calculated @ 24% per annum. The Central tax rate will change according to the rate created by the Central/State government
2.9.4 HIERARCHY OF SALES DEPARTMENT:
Sales Manager
Assistant Sales Manager
Depot Manager
Senior Assistant
Junior Assistant Assistant Depot Manager Clerk Clerk
Trainee
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2.9.5 HUMAN RESOURCE DEPARTMENT

The western India Plywoods Ltd is a forward looking organization committed to identify, train, develop and sustain its human resources in such a manner as to integrate the individual career aspirations of its executives with the fulfillment of the objectives. Towards this WIP accepts basically that fair equitable and performance oriented policy with respect to its human resources. WIP ltd is having a well-government personnel department, which is concerned with the creation of harmonious relationship, among its employees, bringing about their utmost individual development. This department is coming under the authority of General Manager followed by Factory Executive and the Welfare Officer. The Chief time keeper and the time clerks assist them Welfare Officer deals with the welfare activities of the company. The chief time keeper deals with the wage and salary administration provident fund etc. The clerks deal with attendance. Leave time management, action ESI and PE. The company has ensured that the work force in the company is kept at the minimum. The strength last year was 958, which has come down to 884 (including 150 staff members) during the current year, which is 13% less than the previous year. WIP is an ISO 9001:2000 certified company. Under the ISO set up, three company conduct regular training programs to the employee to impress on them the need for quality and productivity, thereby improving their performance. These regular programs have helped to achieve cost effectiveness and improve the overall work.ing of the organization. The company has employees both permanent and temporary worker. The trainees are selected by the supervisor according to their performance. The workers of the company are paid by the time rate wage system i.e. according to time spent on work. Though the basic pay defer, the dearness allowance remains the same. The bonus is paid once in a year and it ranges from 5.33% to 20%. Out of remuneration paid to the employees, 8.33% contributes to the Provident fund. 1.75% of workers wages is deposited in ESI and the management contributes 4.75% of the worker's salary. (ESI is applicable only to those employees whose salary is Page 21
The Western India Plywoods Ltd. below 7500) ESI provides insurance and helps workers in case of accident. Staff members are entitles to one leave for every 10 days works (2 1/2 days of leave in a month). The workers are eligible for 12 leave if they had worked 240 days in the previous year. (One leave for every 20 days work) FUNCTIONS OF HUMAAN RESOURCE DEPARTMENT 1. Employee Evaluation and Selection 2. Defining job or skill requirement 3. Arranging for induction and training 4. Co-coordinating personnel Appraisal
HRD POLICY HRD Policy of the WIP Ltd is as follows: Select Develop Maintain competent Personnel
HRD OBJECTIVES > To integrate the growth opportunity of the enterprise with the fulfillment of company's objectives. > To identify, train and develop competent personnel with the growth potential and to provide a policy environment for high levels of performance. > To provide a system of equality in opportunity, equality in assessment and uniformity in implementation > To ensure continuity of the management by systematic succession. > To seek and provide a continuous team of executors of sustained high levels of competition in the company. Page 22
2.9.5 HIERARCHY OF HUMAN RESOURCE DEPARTMENT:

Managing Director
General Manager (Administration)
Factory Executive
Welfare Officer
Chief Time Keeper
Personnel Manager
Clerks
Clerks
Clerks
2.9.6 PURCHASE DEPARTMENT

Purchase department carries out the procurement of all indigenous items like raw materials, machines, spares, other instruments etc. Purchase of materials is done according to the recommendation and specification from the user department. In WIP, there is no separate store department or stores manager. It comes under the functions of the purchase department and the store keeper carries out the basic functions. Purchase Procedure of a Non-Timber item: l. Generation of Indent Indent is obtained from stores as per the request of user department. This gives the details of the material to be purchased. Colour coding system adapted to differentiate different sections
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The Western India Plywoods Ltd. 2. Store Indent; Register Managing Director Signs all the indents received from the stores indent register and the indent number is given for easy verification. 3. Sending Enquiry The company decides from which supplier they have to buy the required material based on the approved vendors list as enquiries are send to the approved vendors specifying the requirements of the material in detail. 4. Offer of Quotation by the supplier Quotation is to reach the company within a specified period Quotations received are clubbed together with the relevant indents and the copy of the enquiry is send to the Works Manager or General Manager for taking decisions regarding the vendor's selection. 5. Issue of Order The purchase order is issued to the recommended vendor. The purchase executive or the Managing director prepares the purchase order. Five copies of the purchase order are prepared. 6. Follow Up If the supplier does not meet the order in time, follow up action is done by email, telephone etc. 7. Receipt of Invoice The purchase department receives the invoice copy for the party. It contains details regarding terms of the payment. Dispatch details etc. 8. Checking the invoice
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The Western India Plywoods Ltd. The purchase department checks the invoice with the purchase order in respect of specification of materials, quantity, price etc. and sends it to the stores. 9. Arrangement for the collection of the materials Purchase department arranges for the collection of materials and delivers to the stores. 10. Payment of the bills Bill entered in the purchase day book is sent from the purchase department duly signed by the Purchase Executive and Secretary/ GM and it is passed to MS and then it is passed to the Accounts Department For making payments.
2.9.6 HIERARCHY OF PURCHASE DEPARTMENT:

Managing Director
Executive Director
General Manager
Purchase Exeq
EEmanager
Assistant
2.9.7 RESEARCH AND DEVELOPMENT

The company has a well equipped Research and Development laboratory which is one of the best research centers in wood working industry in the country approved by the department of Scientific and Industrial Research Ministry of Science and Technology government of India where continuous research is going on for improvement of quality
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The Western India Plywoods Ltd. and development of new products, through technological and methodological up gradation. The benefit of successful R & D activities has had the distinct advantage of increasing the technical competence and problem solving capability of the organization in general and the R&D group in particular. A Pan Bit irradiator was set up in the R & D with the co-operation and assistance of Baba Atomic Research Centre, Mumbai, the only one of its kind in the industry in India employing nuclear energy for peaceful purposes. The company has also diversified its activities into the manufacture of Resorcinol based glues, daily phthalate and sheet molding compounds, the development daily phthalate based molding compounds, a raw material used in the electronic component industry was the results of WIP's indigenous research and development efforts. This R & D work enabled India to become the third country in the world (other two countries being USA and Japan) to produce this special item.
2.9.8 QUALITY MANAGENMENT SYSTEM (QMS)

A well defined Quality Management System is in place. The QMS is certified by ISO 9001, the international benchmark of progressive organization Quality Policy Quality policy of WIP is to manufacture products as per national and/ or international standards to upgrade the quality on a continual basis through regular improvement efforts. A well defined QMS has been implemented. This system is continuously reviewed to enhance its effectiveness and updated to meet the challenging need. Quality Objectives 1. Suitable equipment and machinery for process control at all stage. 2. Provisions of adequate resources including raw material and personnel to ensure consistent product quality. Page 26
The Western India Plywoods Ltd. 3. Communication of requirement of products including customer requirement, statutory/ regulatory requirements aspects of QMS including policy and objective among all employees. The management representative has total responsibility for the Quality Management System. Master copies of all QMS documents viz. Quality System Manual, Work Instructions and other documents are available with the Management Representative.
2.9.7 HIERARCHY OF QMS DEPARTMENT:

Managing Director
Management Representatives
Quality Awareness Engineer
2.10 FUTURE GROWTH AND PROSPECTS

There is a lot of scope for the wood industry in India as well as in the global economy .The company is focusing on the waste utilization mainly through which it can reduce the cost drastically. The future plans of the company are: Development of wood panel products, wood preservation, synthetic resin adhesive & wood waste utilization. New product development value addition, cost reduction & recognition of excellence relating to wood panel products. Soft feel coating system for wood based products & development of bio-fuel from industrial wood wastes. Page 27
3 McKinseys 7S Framework
Introduction to 7S Model: The 7s framework has first appeared in the book The Art of Japanese Management by Richard Pascal and Anthony Athos in 1981. The two authors were looking at how Japanese industry had been so successful, at around the same time Tom Peters and Robert Waterman were exploring what made a company excellent. The 7S Model was born at a meeting of the four authors in 1978. It then appeared in the book IN search of Excellence by Peters and Waterman in 1982. Subsequently, it was taken up as a basic tool by the global Management Consultancy Company McKinsey to diagnose the cause of organizational problems and to formulate programs for improvement, then on it became famous as McKinsey 7S Model. The Model starts on the premise that an organization is not just Structure, but consists of 7 elements with a complex relationship between them.
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The Western India Plywoods Ltd. i. STRUCTURE The design of an organizational structure is a critical task of the top management of an organization. It is the skeleton of the whole organization edifice. Organizational structure refers to the relatively more durable organizational arrangements and relationships. It prescribes the formal relationships among various positions and activities. Arrangements about reporting relationships, how an organizational member communicates with other members, and what roles he/she has to perform and what rules and procedures exist that guide the various activities performed by members are all part of the organizational structure.
ORGANISATIONAL CHART
Managing Director
Executive Director
HD/PFP/P CP Store/P&A Electric al
GM (administration)
GM (production)
Company Secretary
Chief Accountant officer Development Manager Works Manager
Technical Manager
Marketing Head
Plywood, Flush door, Block board
Central Excise
Plant Manager Densified Wood Products
Sales Manager
DWD
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ii. STRATEGY
Strategy refers to the systematic action and allocation of resources to achieve the companies aim the integrated vision and direction of the company as well as the manner, in which it drives, articulate, communicates and implements that vision and direction. One of the most important evaluation of raw material utilization proper manner and avoid the wastage through scientific and systematic manner concern the management organization strategy and so on. Strategy is a plan an organization formulates to gain a substantial advantage over the competition. Strategy is the determination of basic long term goals and objectives of an enterprise, and the adoption of course of action and the allocation of resources available for carrying out these goals. Western India Plywoods Ltd having potential statement of the technology aware about the views growth of the marketing is booming income rise, demand for goods increases and hence the performance brand image of its product.
WASTE CONTROL STRATEGY
In order to survive in the market company follows waste control strategy. Western India Plywoods Ltd maintains all the materials in a systematic & in a scientific way.
iii. SYSTEMS
Systems means all the producers, formal and informal, that makes the organization go, day by day year by year; capital budgeting system, training system, cost accounting procedures, budgeting. Training system of Western India Plywoods Ltd is as follows The following factors are considered for training Strategic plans of the organization and meet operational areas as estimated by the top management. Page 30
The Western India Plywoods Ltd. Training requirements as projected by the departmental heads and individual employees Reporting officer remarks in performance approvals reports. Refresher training requirements in critical areas. Career planning and succession planning inputs. Inputs required by new entrants. Training arising out of promotion and transfer. Training calendar. Identification of training needs. Selection trainees, Evaluating of the training program. Conducting the training program.
What is the system focuses in the Western India Plywoods Ltd organizational factors impact on the taking perfect decision making skill throughout the information regarding system than having training programs conducted for the supervisors carrier planning process. The main objective of the system towards formal and informal making perfect decision analysis in the particular Refresher training requirements in critical areas and Strategic plans of the organization and meet operational areas as estimated by the top management. Once an organization is setup and achieves its basic market share it becomes more service oriented on the way to its growth. It has adapted the systems like No Child Labor, employees are taken care of by providing them the facilities like medical aids and their complaints are considered and overcome immediately. Innovation Systems Performance Management Systems Financial Systems / Capital Allocation Systems Compensation System / Reward System Total Quality Systems Page 31
iv. SHARED VALUES

It refers to the core or fundamental values that are widely shared in the organization and serve as guiding principle that are important. These values have great meaning because they focus attention and provide a broader sense of purpose. Values are things that you would strive for even if they were demonstrably not profitable. Values act as an organizations conscience, providing guidance in time of crisis. Shared Values are what engender trust. Values are the identity by which a company is known throughout its business areas. These values must be explicitly stated as both corporate objectives and individual values. A shared value is an essential characteristic or attribute promoted by the organization to motivate the behavior of members of the organization. In simple words, shared values are what engender trust. Values are the identity by which the organization is known in its business areas. Western India Plywoods Ltd has the commitment in accepting the goals, achievements and objectives. It has its organizational values with quality policy, customer satisfaction and also with the employees.
v. STAFF
As a management function, staffing, or human resource management, is the one that deals with the acquiring, training, appraising and compensation the staff that work for a business. Effective staffing management is crucial to the success of a business. Without the right staff, a business or organization may be unable to deal with any changes or anything new in an efficient and successful manner. Within staffing there are three main principles that should be adhered to in order to run a smooth and cooperative business. These principles are that all managers are human resource management, employees are very important and that human resource management is a matching process. Technical Staff
These are the staffs they are responsible for the work related to technical aspect. In this company they are appointing well qualified and experienced persons as technical staff .So these staff will have good knowledge about the working environment. Page 32
The Western India Plywoods Ltd. Supervisory Staff
These are the person who is in charge with supervising the other employees in the organization .In this company they are employing experienced staff as supervisor. So they can observe the fellow workers and guide them as per the companies need. The experienced supervisors are one of the key assets of this company. Clerical staff
These staffs are responsible for the office work .These people are the back bone of the company. If they work well, it will be an asset to the company. In this company they are employed well & qualified employees for office work. These staffs are working together for achieving companies objectives. Staffing may be defined as filling and keeping filled the positions in the organization structure. This is done by identifying work force requirements, inventorying the people available and recruiting, selecting, placing, promoting, appraising, planning the careers of, compensating and training or otherwise developing both candidates and current job holders so that tasks are accomplished effectively and efficiently. The responsibility and authority of all the persons affecting quality and their interrelations have been defined and documented whenever personal responsible for specific quality functions are not available the immediate supervisor shall re-delegate their responsibilities. The responsibility and authority of some key personnel, who
performs, manage and verify the work including persuades who need organization freedom to: Initiate action to prevent the occurrence of any non-conforming relating to the product, process and quality management system. Identify and record any problem relating to product process and quality management system. Control the non-conforming product from further or until the non-conformity is corrected.
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vi. SKILLS
Skills include the distinctive competencies that reside in the organization. These can be distinctive competencies of people, management practices, systems and technology. Training Managers Team player, Communication skill, Negotiation skill, Inter Personnel skill. Engineers Technical knowledge of production, knowledge of machinery used, updated knowledge of technology, Team player. Semi skilled knowledge of the process, Hardworking, physically fit. Employee skill is identified by way of performance appraisal. Depending on the strength and weaknesses of the employee the training program is conducted. The company has skilled, unskilled and semiskilled labors. Depending on the job nature and importance on-job training will be given to them. The training will be given to enhance the environmental awareness among employees through training, development and education. The training to an employee shall be of 1 type. On the job training by concerned supervision. Class room training by HRD department. A skill is the ability, knowledge, understanding and judgment to accomplish a task. Skills may be defined as what the company does best; the distinctive capabilities and competencies that reside in their organization. The organization selects and assigns personnel performing work affecting product quality based on appropriate education skills and experience. The organization has also a system to assess the competence of its personnel on periodic basis (performance appraisal and development report) to identify gap in the performance, if any as well as assessing their training needs to bridge the gap.
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vii. STYLE
Top down, participative and authoritative. Top down: It is decentralized authority and encourages subordinates to express their opinion in decision making as well as in implementing the decision. However decisions are taken by the leaders thus, decision are arrived at by consultation. Participative: It is decentralize authority and encourage subordinates to participate and involves in decision making and implementation processes. Decisions are made by the top and his subordinate. Authoritative It is centralized power of decision making in themselves. Followers have no say either in decision making or in implementation. They have to completely obey and follow the instruction of the leaders. The leaders take full authority and full responsibility. Western India Plywoods Ltd has both top down and participative style of functioning .since all the crucial decisions (strategic decisions) are taken by top management and it is passed to the middle level management for implementation. At the same time many day to day decisions are taken in participative manner. It is taken with proper consultation and negotiation among the middle level mangers and supervisor. The companys decision making is done by way of selecting the tender as government decides on sale to be done by the companies in a particular month. So decision is based on government policies on how much unit of power sell by companies. This leads to the free flow of communication within the organization. The management training is totally democratic there are no any restrictions to any employees to express his opinion. Western India Plywoods Ltd has got open door policy i.e. any level of employee can meet directly to his superior or managing director without any hesitation.
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The Western India Plywoods Ltd. Style of leadership or relationship refers to the manner in which an individual uses his or her talents, values, knowledge, judgment and attitudes to lead and relate to others. Style expresses the persons character. Style is the leadership approach; also the way in which the employees in the organization present themselves to the outside world, to suppliers and customers. In simple words, a style is the pattern of behavior, which a leader adopts in influencing the behavior of his followers (Subordinates) in the organization context.
4. SWOT ANALYSIS
SWOT stands for Strength, Weakness, Opportunities and Threats. Strengths and Weakness are the internal factors of the company where as Opportunities and Threats are external factors. SWOT Analysis is the tool for auditing an organization and its environment. It is the first stage as planning and helps marketers to focus on key issues have been identified, they feed into marketing objectives. It can be used in conjunction with other tools as audit and analysis.
i. STRENGTH
The company has been maintaining a high quality for its products and as its products are well accepted in the market by quality conscious customers, it does not anticipate any marketing problem. They are considered to be the The Leaders in Quality Since 1945. The company has a well established R&D unit, one of the best kinds in the wood based industry. The company is duly equipped to develop new products to meet the requirements of the market. The products of WIP are certified by ISO.
ii. WEAKNESSES
There is an acute shortage of good raw materials which has forced the company to import a substantial portion of its main raw material viz. timber, which has also seen a considerable increase in price. Page 36
Lack of good distribution network as compared to the competitors. Promotion of competitors is better to that of WIP. The Company concentrates only on Industrial Market.
The price of WIPs products is high as compared to its competitors.
iii. OPPORTUNITIES
The company is a leading supplier to Railways, Defense, Automobile, Electrical, Transport, Civil Aviation and other industries. Several products have been developed for the specific requirements of the Automobile, Transport and communication sectors such as Densified wood etc. and these products which have technological advantages over competitive products. The Company diversified from the production of chest and commercial plywood to manufacture Decorative Plywood, Block Boards, Shuttering Plywood and Aircraft plywood. The products of the Company are being exported to Germany, France, U.S.A, Sweden, West Asia and South Asian countries.
iv. THREATS
The high power tariff and increasing cost of furnace oil and other petroleum products and chemicals. There are many medium scale and small scale plywood industries. They fix low price for their products. In some product ranges, imported items are available at lower cost than is currently produced in India. In general, the working of the company has been adversely affected by the effects of Globalization.
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The Western India Plywoods Ltd. 5. FINANCIAL ANALYSIS PARTICULARS I.INCOME 1. Sales 2. Other income 3.Deferred tax liability TOTAL (A) II. EXPENCE 4. Cost of material 5.Power and Fuel 6.Salaries and wages 7. Excise duty 8. Packing and forwarding 9. Other expenses 10. Depreciation TOTAL (B) 11. Profit/loss before taxation (A-B) 12. Provision for taxation 13. Profit/loss after tax 14. Retained profit 15. Fixed assets gross 16. Accumulated depreciation 17. Net current assets TOTAL ASSETS 18. Share capital 19. Reserves and surplus 20. Long term borrowings 21. Short term borrowings 22. Deferred tax liability TOTAL LIABILITIES Taxes central, state, local 7,69,269 54,583 8,07,338 1,11,166 96,768 54,302 47,949 37,338 33,321 24,882 22,500 3,07,060 55,665 2,956 52,709 52,709 11,80,593 6,86,046 2,74,722 7,69,269 2,23,200 41,720 2,41,060 2,63,289 2,08,780 1,09,582 83,183 82,069 39,742 1,02,176 46,607 6,72,139 48,398 5,630 42,768 42,768 11,83,150 7,32,396 4,50,754 8,07,338 2,23,200 84,488 2,41,729 2,57,921 3,62,725 7,20,537 3,28,091 34,634 7,19,255 1,282 2010 2011
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The Western India Plywoods Ltd. BUSINESS AND OPERATIONS During the year 2010-11, the Company achieved a turnover of Rs. 71.92crores and a profit before tax of Rs. 4.83crores. The Company has already chalked out various action plans for further improvement in turnover and profit. The construction boom in several areas of Kerala has helped the wood based panel industry to improve production and demand for the related products has seen an upward trend. The Company hopes that the availability of quality material for plywood production will improve shortly when the Malaysian Joint venture Company commences the despatch of veneers from 2011- 12. This will enhance the plywood production and turnover substantially. Also, various value added products are being introduced which would give the Company higher returns. The Company has maintained a satisfactory relationship with Bankers and Term Lending Institutions and has been regular in paying interest, installments etc
DIVIDEND The Board of Directors recommends a dividend due on Preference share up to 31.03.2011 which works out to Rs.20.60lakhs. The Board also recommends payment of dividend of 10% on equity shares, which works out to Rs.84.87lakhs.
REDEMPTION OF PREFERENCE SHARES The Company had issued redeemable preference shares to IFCI Ltd. for Rs. 2Cr, out of which Rs.lCr was redeemed on 7.12.2009 and balance Rs. lCr on 28.05.2011 along with the accumulated dividend till the date of redemption. The Company had transferred Rs. lCr each to Capital Redemption Reserve Account out of the profit of the years2009-10 & 2010-11 respectively.
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6. LEARNING EXPERIENCE
The learning experience gained by me during the in-plant training was very much practical oriented. Mostly all the concepts and theories, which I studied in the class, are applicable practically. I had a great time working on the project, as it gives insights into the working environment of an organization. The training has exposed me to many facts of an organization and also helped me to know how various departments are being functioned at various levels. All the staffs in the company were very much co-operative and keen to explain each and every aspects of the company. During the time of production process a systematic layout of machines were learnt. The plant is systematically designed so that the production testing quality control is systematically arranged. I understood that the work allotted to specific departments depending upon the nature and allotted work is expected to complete within time both effectively and efficiently. The authority and responsibility relationship, information flow etc of the organization was learnt. During the in-plant training the various concepts were linked with the practical application of those followed the organization. Concern of high quality, safety measures, good working environment, high concern for environmental protection, developing the team spirit among the employees and developing the morale of the employees etc were known. I became more aware of the plywood industry and the role played by The Western India Ply woods Ltd. All together as a good learning experience as it could see the sum of the things which studied in class is being put to practical use.
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1.GENERAL INTRODUCTION THEORETICAL BACKGROUND OF THE RESEARCH

No business can plan its activities without considering its financial resources. Financial management is that part of management which deals with raising of funds in the most economical and suitable manner, using the funds as profitability as possible, planning future operations, inspections, controlling current performance and future development through financial accounting and other means. Finance in essence is considered with the acquisition and use of funds by a business firm. The main objective of financial management is to control required funds for meeting short term and long-term needs of business enterprise and to maximize the value firm to its equity share holders. To have a clear understanding of the profitability and financial position of business, the financial statements have to be analyzed and interpreted. Financial statements are prepared for decision making. They play a dominant role in setting the framework of managerial decisions. But the information provided by the financial statement is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided by the financial statement is of immense use in making decision through analysis and interpretation of financial statement. It helps to summarize large quantities of financial data and to make quantitative judgments about the firm's financial performance. The study entitled An analytical study of Financial Performance with reference to The Western India Ply woods Ltd. Kannur has been oriented with a view to study the financial position of the company that help in making sound decision by analyzing the recent trend.
Tools for analysis:

The data collected was analysed by using the following tools: Ratio analysis Comparative balance sheet
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RATIO ANALYSIS
The financial statements, Balance sheet and income statement depicts the picture what has actually happened to earnings during a specified period and presents summary of financial position of the company at a given point of time. Ratio analysis is a very powerful tool useful for measuring performance of an organisation. The ratio analysis concentrates on the interrelationship among the figures appearing in the financial statements. The ratio analysis helps the management to analyse the past performance of the firm and to make further projections. Ratio analysis allows interested parties like shareholders, investors, creditors, government and analysis to make an evaluation of certain aspects of a firms performance. Ratio analysis is a process of comparison of one figure against another which make a ratio and the appraisal of the ratios to make proper analysis the about the strength and weaknesses of the firms operations. The calculation of ratios is a relatively easy and simple task but the proper analysis and interpretation of the ratios can be made only by the skilled analyst. Ratios normally pinpoint a business strength and weakness in two ways. Ratio provide an easy way to compare present performance with past. Ratios depict the areas in which a particular business competitively advantage or disadvantaged through comparing ratios to those of other business of the same size within the same industry.
COMPARATIVE FINANCIAL STATEMENTS

Comparative financial statements are ones, which have been prepared in a systematic manner and provides statistical information about a particular event {Financial transaction}or aspect, taking place on different dates or during different periods. The comparative financial statements are chalked out in columnar form (in majority of the cases). One is also able to view comparative accounts of different companies. Comparative financial statements, like all other financial statements have the following types of financial statements:
Income statements Balance sheet Page 42

Income statements: Also known as profit and loss financial statement, these types of comparative financial statements suggest profit amount earned by a company as well as amount of money lost by a company. Loss or profit may not always mean, loss or profit of money, it may also include any asset or stock, which has an economic value. Income statements also include expenditure incurred for conducting activities, related to operations. This type of a financial statement is referred as an operating financial statement. Balance sheet: Information pertaining to expenses and profit earned by a company are recorded in the balance sheet. A balance sheet is often described as a "snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business calendar year. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities.
1.2 STATEMENT OF THE PROBLEM

The justification of existence of any company is determined by performing as per expectations. Analysis of overall performance is one of the major requirements for planning. Performance evaluation is necessary from the point of view of creditors, public, government, other organizations and the company itself. It is also necessary to bridge the gap between the current and expected position by taking corrective measures. It acts as a yardstick of measuring how the company has been able to move forward as per the plan. This is to find out how Different financial components such as debt and equity affects the financial strength and weakness of Western India Plywoods. The information provided through the analysis and interpretation of financial statements is of immense help in making decisions. They play a dominant role in setting the framework of managerial decisions.
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1.3 OBJECTIVE OF THE STUDY

To analyse the financial strength and weakness of the firm using various analytical tools like Ratio Analysis and Comparative statements. To examine the various components of the financial statements of the company & to find out how the Debt and Equity affect the financial performance. To make an overall performance analysis and know the progress of the concern through the five years data. To evaluate the liquidity position and profitability of the company.
To involve comparison for a useful interpretation of the financial statements.
1.4 SCOPE FOR THE STUDY

A companys profitability and efficiency can be evaluated only through the device of financial analysis of its financial statements. This study is very much useful to share holders and creditors of the company. The study mainly covers the analysis of financial position and operational strength/weakness of the company. The study is aimed at analyzing the financial statements of Western India Plywoods on the basis of ratio analysis and comparative balance sheet in order to know the companys financial & cash position and its performance during the past five years from 2006-2011.
1.5 RESEARCH METHODOLOGY

The study is partly descriptive and partly analytical. It is descriptive as it traces theoretical frame work of financial management. It is analytical in the sense that it makes an appraisal of the financial management in Western India Plywoods Ltd. The Research Design is needed because it felicitates the smooth sailing of the various research operations. There by making research as efficient as possible yielding maximum information with minimum expenditure. The study is primarily based on the internal records and annual accounts of the company. Besides this informations are gathered through discussion with the officers of the company. Personal interview was held with various personnel working in the company.
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1.5.1 TYPE OF RESEARCH

DESCRIPTIVE RESEARCH The study is primarily based on the internal records and the annual records of the company. Besides information is gathered through discussions held with the officers of the company.
1.5.2 SAMPLING METHOD

1.5.2.1 Universe The entire financial data of the company is considered as the universe of data. 1.5.2.2 Sample size Financial data which is relevant to 5 years is taken as the sample size. 1.5.2.3 Sample method Convenience sampling method is used to collect data for the study. A convenience sample is one of the main types of non-probability sampling methods. A convenience sample is made up of people who are easy to reach.
1.5.3 SOURCE OF DATA

Secondary data is the major base of the study. Secondary data is collected from publications such as annual reports and other records which include journals, magazines and company web sites of Western India Plywood ltd.
1.6 LIMITATIONS OF THE STUDY

The period of the study is limited to data of 5 years. The study is based on the secondary data provided by the company It is difficult to judge the financial performance with the said ratios Both managers and employees are not ready to fully reveal the data required for the project and the document of the company are not open for the public scrutiny The time period was limited to 10 weeks which is not sufficient to have a complete study. Page 45
2. DATA ANALYSIS & INTERPRETATION 2.1 RATIO ANALYSIS 2.1.1 CURRENT RATIO
CURRENT RATIO = CURRENT ASSET/ CURRENT LIABILITIES
This ratio is most commonly used to perform the short term financial analysis. Also known as the working capital ratio, this ratio matches the current assets of the firm to its current liabilities. TABLE NO: 2.1.1 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 CURRENT ASSETS 5,24,434 5,25,569 4,97,588 5,26,498 5,93,627 CURRENT LIABILITIES 2,00,483 2,09,721 3,03,618 2,57,407 2,46,131 CURRENT RATIO 2.61 2.50 1.63 2.04 2.41
CHART NO:2.1. 1
CURRENT RATIO
3 2.5 2 1.5 1 0.5 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
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The Western India Plywoods Ltd. INTERPRETATION

The standard current ratio is 1.5:1. The current ratio of the company is satisfactory during the year 2008 2009 and all other years the current ratio is excess. Hence the position is very good from the point of view of creditors. There is an abnormal excess in the current ratio due to the excess of funds in current assets. They have to plan on the idle assets to utilize it completely.
2.1.2 QUICK RATIO

QUICK RATIO = QUICK ASSETS/ QUICK LIABILITIES This ratio is also known as acid test ratio or liquid ratio. It is a more severe test of liquidity of a company. It shows the ability of a business to meet its immediate financial commitments. It is used to supplement the information given by the current ratio. TABLE NO: 2.1.2 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 CHART NO: 2.1.2 QUICK ASSETS 1,36,717 1,46,946 1,29,959 1,43,404 1,69,482 CURRENT LIABILITIES 2,33,255 2,09,727 3,03,104 2,57,407 2,46,131 QUICK RATIO 0.56 0.70 0.42 0.55 0.68
QUICK RATIO
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
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The Western India Plywoods Ltd. INTERPERTATION

The ratio measures that the ability of the business to meet financial obligations as they come due, without disrupting the normal, ongoing operations of the business. The standard quick ratio is 1:1. Here, quick ratio from 2007 2011 is lower than the ideal ratio, indicating that the firm is not able to meet its quick liabilities in time.
2.1.3 WORKING CAPITAL TURNOVER RATIO

WORKING CAPITAL TURNOVER RATIO = NET SALES / WORKING CAPITAL This ratio indicates the efficiency or inefficiency in the utilization of working capital in making sales. TABLE NO: 2.1.3 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 CHART NO: 2.1.3 NET SALES 4,48,306 4,58,297 7,63,283 2,90,918 6,34,013 WORKING CAPITAL 2,91,209 3,15,842 1,93,179 2,69,091 3,47,496 WCT RATIO 1.53 1.45 3.95 1.08 1.82
WCT RATIO
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
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The ratio measures the efficiency with which working capital is being used by a firm. A low working capital turnover ratio may reflect an in adequacy of working capital and lower turnover of inventories or receivables. The working capital turnover ratio show a declining trend from 2006 - 2007 to 2007 - 2008. Thereafter it increased and again declined and reached to 1.82 during the year 2010 2011.
2.1.4 DEBTORS TURNOVER RATIO
DEBTORS TURNOVER RATIO = NET CREDIT SALES / AVERAGE DEBTORS
This ratio indicates the relationship between net credit sales and trade debtors. It also shows the rate at which cash is generated by the turnover of debtors.
TABLE NO: 2.1. 4
NET CREDIT YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 SALES 4,48,306 4,58,297 7,63,283 2,90,918 6,34,013
AVERAGE DEBTORS 72,097 71,838 80,975 83,306 97,695
DTR RATIO
6.21 6.37 9.42 3.49 6.48
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CHART NO:2.1. 4
DTR RATIO
10 9 8 7 6 5 4 3 2 1 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
The ratio measures that the rate at which debtors are converted into sales and then into cash. The increase in debtors turnover ratio will contribute towards the profitability of the company. Here, the debtors turnover ratio of 9.42 during 2008 2009 is the highest and 3.49 in 2009 2010 are the lowest as compared to any other year. It again rose in the year 2010-2011.
2.1.5 GROSS PROFIT RATIO

GROSS PROFIT RATIO = GROSS PROFIT / NET SALES X 100 Gross profit ratio expresses relationship between gross profit and net sales. It is obtained by dividing gross profit by net sales and expressing this relationship as a percentage. Gross profit is obtained by deducting cost of goods sold from net sales. Net sales are basically determined by deducting sales returns from sales Gross profit ratio evaluates the effectiveness of business. It indicates the efficiency of firm in terms of its production and how much it has gained profit. Gross profit reflects the profit firm has made on cost of goods sold.
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TABLE NO: 2.1.5 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 GROSS PROFIT NET SALES GROSS PROFIT RATIO 90,939 69,704 1,69,969 68,004 1,57,496 4,48,306 4,58,297 7,63,283 2,90,918 6,34,014 20.28% 15.20% 22.26% 23.37% 24.84%
CHART NO: 2.1.5
GROSS PROFIT RATIO

30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2006 - 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
Gross profit ratio is increasing during the year 2007 2008 to 2010 2011. A high gross profit ratio helps to cover all operating expenses, fixed interest charges, dividend and appropriation of reserve. This ratio indicates the efficiency of production or trading operations. In 2010-2011 it is high compared to the other years.
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2.1.6 NET PROFIT RATIO

NET PROFIT RATIO = NET PROFIT / NET SALES X 100 The net profit ratio is the overall measure of a firms ability to turn each rupee of sales into profit. It indicates the efficiency with which a business is managed. The net profits are obtained after deducting income-tax and, generally, non-operating expenses and incomes are excluded from the net profits for calculating this ratio. Thus, incomes such as interest on investments outside the business, profit on sales of fixed assets and losses on sales of fixed assets, etc are excluded. TABLE NO: 2.1.6 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 NET PROFIT (46,095) (40,754) 21,853 52,709 42,768 NET SALES 4,48,306 4,58,297 7,63,283 2,90,918 6,34,013 NET PROFIT RATIO (10.28)% (8.89)% 2.68% 18% 6%
CHART NO: 2.1.6
NET PROFIT RATIO

20.00% 15.00% 10.00% 5.00% 0.00% 2006 2007 -5.00% -10.00% -15.00% 2007 2008 2008 2009 2009 2010 2010 2011
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The ratio indicates the firms capacity to withstand adverse economic conditions. From 2006 2007 to 2007 2008 the company has been running in loss due to the low demand and price competition. However, from 2008 2009 the company started making profit. In 2010-2011 the profit again declined compared to the previous year.
2.1.7 DEBT EQUITY RATIO
DEBT EQUITY RATIO = EXTERNAL EQUITY / INTERNAL EQUITY This ratio attempts to measure the relationship between long term debts and shareholders fund. This ratio measures the relative claims of long term creditors on the one hand and owners on the other hand, on the assets of the company. A high debt/equity ratio generally
means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.
TABLE NO: 2.1.7 YEAR EXTERNAL EQUITY 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 4,49,763 5,03,717 3,41,188 2,41,060 2,41,729 1,72,169 1,72,169 1,72,169 2,64,920 3,07,688 INTERNAL EQUITY DEBT EQUITY RATIO 2.61 2.92 1.98 0.90 0.78
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CHART NO: 2.1.7
DEBT EQUITY RATIO

3.5 3 2.5 2 1.5 1 0.5 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
This ratio measures long term solvency. The ideal debt equity ratio is 2:1. A high ratio shows that the creditors have invested more in the business than the shareholders. A low ratio indicates a smaller claim of creditors. More precisely, the greater the debt equity ratio, the greater the risk to the creditors. In 2010-2011 the company is having the ratio compared to the other years.
2.1.8 PROPRIETARY RATIO
PROPRIETARY RATIO = SHARE HOLDERS FUND / TOTAL ASSETS This is a variant of debt equity ratio. It measures the relationship between share holders fund and total assets. Establishes relationship between proprietor's funds to total resources of the unit. Where proprietor's funds refer to Equity share capital and Reserves, surpluses and Tot resources refer to total assets.
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TABLE NO: 2.1.8 YEAR SHAREHOLDERS FUNDS 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 1,72,169 1,72,169 1,72,169 2,64,920 3,07,688 TOTAL ASSETS 1,08,389 10,58,194 10,18,046 10,26,676 10,53,469 PROPRIETARY RATIO 0.15 0.16 0.17 0.25 0.29
CHART NO: 2.1.8
PROPRIETARY RATIO
0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
Proprietary Ratio keeps increasing during the year from 2006 2007 to 2010 2011. The proprietary ratio is high during the year 2010 2011, this indicates that relatively favourable position to the creditors at the time of liquidation. In 2006 2007, low proprietary ratio indicates that the lower proportion of net worth is invested in fixed assets.
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2.1.9 CAPITAL GEARING RATIO

CAPITAL GEARING RATIO = FIXED INCOME BEARING FUNDS / EQITY SHAREHOLDERS FUND
This is the ratio between the fixed interest bearing securities and equity share capital. Fixed income securities include debentures and preference share capital. TABLE NO: 2.1.9 YEAR FIXED INCOME BEARING FUNDS 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 7,56,345 7,96,585 6,41,058 6,42,676 6,37,977 EQUITY SHAREHOLDERS FUNDS 1,26,169 1,26,169 1,26,169 1,26,593 1,69,361 CAPITAL GEARING RATIO 5.9 6.31 5.08 5.07 3.76
CHART NO: 2.1.9
CAPITAL GEARING RATIO

7 6 5 4 3 2 1 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
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From 2006 2007 to 2007 2008 the capital gearing ratio has slightly increased and thereafter declined and reached up to 3.76 in 2010-2011, indicating that the proportion of fixed income bearing funds declines each year, which increases the risk of equity shareholders.
2.1.10 SOLVENCY RATIO

SOLVENCY RATIO = TOTAL ASSETS / TOTAL OUTSIDE LIABILITIES These ratios are used to analyse the long term solvency of any particular business concern.
Acceptable solvency ratios will vary from industry to industry, but as a general rule of thumb, a solvency ratio of greater than 20% is considered financially healthy. Generally speaking, the lower a company's solvency ratio, the greater the probability that the company will default on its debt obligations.
TABLE NO: 2.1.10 YEAR TOTAL ASSETS TOTAL OUTSIDE LIABILITIES SOLVENCY RATIO
2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
10,83,894 10,58,194 10,18,046 10,26,676 10,53,469
9,43,570 9,60,312 8,98,162 7,61,756 7,45,781
1.14 1.10 1.13 1.34 1.41
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CHART NO: 2.1.10
SOLVENCY RATIO
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
The ratio is used to test the solvency of a firm. Solvency ratio has slightly increased from 2006 2007 to 2010 2011 which indicates the firms ability to meet the outside liabilities out of total assets.
2.1.11 FIXED ASSETS TURNOVER RATIO

FIXED ASSETS TURN OVER RATIO = NET SALES / FIXED ASSETS This ratio indicates the efficiency with which the firm is utilising its investments in fixed assets such as plant and machinery, land and building etc. A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio measures a company's ability to generate net sales from fixed-asset investments - specifically property, plant and equipment (PP&E) - net of depreciation. A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues.
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TABLE NO: 2.1.11 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 NET SALE 4,48,306 4,58,297 7,63,283 2,90,918 6,34,013 FIXED ASSETS 5,56,721 5,30,037 5,21,763 5,00,718 4,59,842 FAT RATIO 0.8 0.86 1.46 0.58 1.37
CHART NO: 2.1.11
FAT RATIO
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
This indicates the ratio of net sales to fixed assets. In the year 2008 2009 shows the highest ratio, 2009 2010 shows big fall due to lower sale. In the year 2006 2007 and 2007 2008 shows somewhat same ratio and 2010 2011 shows a recovery due to increase in sales.
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2.1.12 CAPITAL RESERVE RATIO

CAPITAL RESERVE RATIO = CAPITAL / RESERVE TABLE NO: 2.1.12 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 CAPITAL 3,87,717 3,78,623 80,975 3,83,094 3,87,717 RESERVE 5,59,460 5,32,625 5,21,763 5,00,178 5,59,460 CAPITAL TO RESERVE RATIO 0.69 0.71 0.15 0.76 0.69
CHART NO: 2.1.12
CAPITAL TO RESERVE RATIO

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
The capital reserve ratio is very low during the year from 2008 2009 which indicates the proportion between capital and reserve is low and high during the year 2009 2010. In 20102011 also the company has a standard ratio.
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2.1.13 INVENTORY TO WORKING CAPITAL RATIO

INVENTORY TO WORKING CAPITAL RATIO = INVENTORY / WORKING CAPITAL This ratio establishes the relationship between the cost of goods sold during a given period and the average amount of stock carried during the period. A low value of 1 or less of inventory to working capital means that a company has high liquidity of current asset.. It is not favourable for management because excessive inventories can place a heavy burden on the cash resources of a company. TABLE NO: 2.1.13 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 INVENTORY 3,87,717 3,78,623 3,66,324 3,83,094 4,24,145 WORKING CAPITAL 2,91,209 3,15,842 1,93,179 2,69,091 3,47,496 INVENTORY TO WORKING CAPITAL 1.33 1.19 1.89 1.42 1.22
CHART NO: 2.1.13
INVENTORY TO WORKING CAPITAL

2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
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The ratio measures the proportion between the inventory and working capital. The inventory to working capital ratio is high during the year 2008 2009 and low in 2007 2008.
2.1.14CASH TURN OVER RATIO

CASH TURN OVER RATIO = SALES / CASH TABLE NO: 2.1.14 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 SALES CASH CASH TURN OVER RATIO 4,48,306 4,58,297 7,63,283 2,90,918 6,34,013 10,794 11,041 11,930 13,424 29,272 41.53 41.50 63.98 21.67 21.65
CHART NO: 2.1.14
CASH TURN OVER RATIO

70 60 50 40 30 20 10 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
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Cash turnover ratio during 2010 2011 of 21.65 which is very less compared to other years. During the year 2008 2009 the increase shows that there is proper utilisation of the resources of the company. In 2006-2009 it was high after that it declined highly.
2.1.15CAPITAL TURNOVER RATIO
CAPITAL TURN OVER RATIO = SALES / CAPITAL TURNOVER This ratio shows the efficiency with which capital employed in a business is used. A high capital turnover ratio indicates the possibility of greater profit and a low capital turnover is a sign of insufficient sale and possibility of lower profits.
TABLE NO: 2.1.15 YEAR SALES CAPITAL EMPLOYED CAPITAL TURNOVER RATIO
2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
4,48,306 4,58,297 7,63,283 2,90,918 6,34,013
10,83,894 10,58,194 10,18,046 10,26,676 10,53,469
0.41 0.43 0.74 0.28 0.60
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CHART NO: 2.1.15
CAPITAL TURNOVER RATIO

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 - 2011
INTERPRETATION
The ratio measures the proportion of sales is made out of total capital employed. A low capital turnover ratio means that no sufficient sales are being made and profit are low. Capital turnover ratio has increased from 2006 2007 to 2008 2009 and thereafter significantly declined to 0.28 in 2009-2010 and then again increased during the year 2010 2011 to 0.6.
2.1.16 FIXED ASSETS COVERAGE RATIO

FIXED ASSETS COVERAGE RATIO = NET BLOCK / TERM LIABILITY Determines a firm's ability to uphold its debt payments and contracts with all of its fixed assets (cash, property, et cetera), minus any outstanding liabilities. When calculated properly, a fixed asset coverage ratio demonstrates how well the cash and properties owned by a company. TABLE NO: 2.1.16 NET BLOCK YEAR 2006 2007 2007 2008 2008 2009 5,53,851 5,27,947 4,77,999 4,49,763 5,03,717 3,41,188 TERM LIABILITIES FIXED ASSETS COVERAGE RATIO 1.23 1.04 1.40
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2009 2010 2010 2011 4,94,547 4,50,754 2,41,060 2,41,729 2.05 1.86
CHART NO: 2.1.16
FIXED ASSETS COVERAGE RATIO

2.5 2 1.5 1 0.5 0 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011
INTERPRETATION
In 2009 2010 there is a high fixed coverage ratio because the firm using the fixed assets to pay the term liabilities. In 2007 2008 there is a low fixed coverage ratio because the firm not using the fixed assets to pay the term liabilities. In 2010-2011 it is as par to the previous year.
2.1.17 DEBTS ASSETS RATIO

DEBT ASSET RATIO = TOTAL DEBTS / ASSETS Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as 'goodwill').
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TABLE NO: 2.1.17 YEAR 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 TOTAL DEBTS 7,10,345 7,50,585 5,95,058 5,04,349 4,99,650 ASSETS 10,83,894 10,58,194 10,18,046 10,26,676 10,53,469 DEBTS ASSETS RATIO 0.65 0.70 0.58 0.49 0.47
CHART NO: 2.1.17
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2006 2007
DEBTS ASSETS RATIO
2007 2008
2008 2009
2009 2010
2010 2011
INTERPRETATION
The debt asset ratio expresses the relationship between total debts and total assets. The higher the ratio, the greater the risk exposure of the company. Debt assets ratio has increased from 2006 2007 to 2007 2008 and thereafter declined from 2008 2009 to 2010 2011. In 2010 2011 the debt asset rate was low which reduces the risk of the company.
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2.2 COMPARATIVE BALANCE SHEET

2.2.1COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR ENDED 31ST MARCH 2007-2008 ( Rs in thousands) TABLE NO: 2.2.1 PARTICULARS 2007 2008 INCREASE/ DECREASE INCREASE/ DECREASE % LIABILITIES Shareholders fund: share capital Reserves & surplus Loan: Secured Unsecured Current liabilities & provisions Deferred tax liabilities 7,36,303 6,784 2,33,225 1,837 10,83,894 TOTAL ASSETS Fixed assets Investments Capital WIP Current assets Sundry debtors Cash & bank balance Other current assets Loans & advances Inventories TOTAL 53,826 3,87,717 10,83,894 72,097 10,794 71,838 11,041 11,500 52,567 3,78,623 10,58,194 (1,259) (9,094) (25,700) (2.33) (2.34) (2.37) (259) 247 (0.35) 2.208 5,53,851 2,739 2,870 5,27,947 2,588 2,090 (25,904) (151) (780) (4.67) (5.51) (27.17) 10,58,194 (25,700) (2.37) 7,43,777 6,808 2,09,777 7,474 (24) (234,98) 1.01 (0.35) (10.07) 1,30,873 41,296 1,30,873 41,296 0 _ 0 _
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The total fixed assets have been decreased by Rs.25,904 during 2005. For this purpose, investments worth Rs.151 have been realised. The total assets have been reduced by Rs.25,700 and current assets have been decreased by Rs.10,365. It indicates that the addition to fixed assets have been financed partly by the sale or reduction of other assets. The reserves and surplus of the company has no change during the year 2007 2008 The fixed assets of the company decreased by Rs.25,904 and the percentage of decrease is 4.67%. The relationship between current assets and current liabilities is unfavorable.
2.2.2 COMPARATIVE BALANCE SHEET ANALYSIS FOR THE ENDED 31ST MARCH 2008 2009 (Rs in thousand) TABLE NO: 2.2.2 PARTICULARS 2008 2009 INCREASE/ DECREASE LIABILITIES Shareholders fund: share capital Reserves & surplus Loan: Secured Unsecured Current liabilities & provisions Deferred tax liabilities TOTAL ASSETS 10,58,194 10,18,046 (40,148) (3.79) 7,43,777 6,808 2,90,727 5,84,549 10,509 3,03,104 (1,59,228) 3,701 93,377 (21.40) 54.36 (44.52) 1,30,873 41,296 1,30,873 41,296 0 0 INCREASE/ DECREASE%
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Fixed assets Investments Capital WIP Current assets Sundry debtors Cash & bank balance Other current assets Loans & advances Inventories TOTAL 71,838 11,041 11,500 52,567 3,78,623 10,58,194 37,054 3,66,324 10,18,046 (15,513) (12,999) (40,148) (29.51) (3.24) (3.79) 80,975 11,930 9,137 889 12.71 8.05 5,27,947 2,588 2,090 4,77,999 3,611 40,153 (49,948) 1,023 38,063 (9.46) 39.52 1821.19
INTERPRETATION
The fixed assets have been decreased by Rs.49,948, for this the investments of Rs.1,028 have been increased by Rs.39.52%.of the sale of fixed assets. The reserves and surplus of the company has no change during the year 2008 2009 The secured loan of the company has reduced
2.2.3 COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR ENDED 31ST MARCH 2009 2010 ( Rs in thousands)
TABLE NO: 2.2.3

PARTIC0ULARS 2009 2010 INCREASE/ DECREASE LIABILITIES hareholders fund: share capital Reserves & surplus Loan: 1,30,873 41,296 2,23,200 41,720 92,327 424 170.55 1.02 INCREASE/ DECREASE %
Page 69

Secured Unsecured Current liabilities & provisions TOTAL 10,18,04 6 ASSETS Fixed assets Investments Capital WIP Current assets Sundry debtors Cash & bank balance Loans & advances Inventories TOTAL 80,975 11,930 37,054 3,66,324 10,18,04 6 83,306 13,424 46,674 3,83,094 10,26,676 2,331 1,494 9,620 16,770 8,630 2.87 12.52 25.96 4.57 0.847 4,77,999 3,611 40,153 4,94,547 5,631 16,548 2,020 3.46 55.94 10,26,676 8,630 0.847 5,84,549 10,509 3,03,104 4,80,445 23,904 2,57,407 (1,04,104) 13,395 (45,697) (17.80) 127.46 (15.07)
INTERPRETATION
The equity capital of the company increased by Rs. 92,327 and secured loan has been redeemed by Rs.1,04,104. the redemption of secured loans out of profits. The current assets of the company increased to an extend of Rs.30,215 during the period of 2009 2010. The total fixed asset have been added by Rs.16,548 during 2007. For this purpose investment of Rs.2,020 has not been realized
Page 70

2.2.4 COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR ENDED 31ST MARCH 2010 2011 (Rs in thousands) TABLE NO: 2.2.4 PARTICULARS 2010 2011 INCREASE/ DECREASE LIABILITIES Shareholders fund: Share capital Reserves & surplus Loan: Secured Unsecured Current liabilities & provisions TOTAL ASSETS Fixed assets Investments Capital WIP Current assets Sundry debtors Cash & bank balance Loans & advances Inventories TOTAL 83,306 13,424 46,674 3,83,094 10,26,676 97,695 29,272 42,515 4,24,145 10,53,469 14,389 15,848 (4,159) 41,051 26,793 17.27 118.05 (8.910) 10.71 2.609 4,94,547 5,631 4,50,754 5,632 3,456 (43,793) 1 (8.85) 0.017 10,26,676 10,53,469 26,793 2.609 4,80,445 23,904 2,57,407 4,80,015 19,635 2,46,131 (430) (4,269) (11,276) (0.0895) (17.85) (4.380) 2,23,200 41,720 2,23,200 84,488 0 42,768 0 102.51 INCREASE/ DECREASE %
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INTERPRETATION The equity share capital of the company has not been changed during the year 2010 2011. But the secured loans and the unsecured loans redeemed by Rs.(430) and unsecured loan for Rs.4,269. The current assets of the company increased to an extend of Rs.67,129 during the period 2010 2011. This indicates that the company invested more in current assets. The total fixed assets have been reduced by Rs.(43,793). For this purpose investments of Re.1 have been realised. The reserves and surplus of the company increased by Rs.42,768 and the percentage increase is 102.51%. This indicates that the emergencies occur in the company, the company uses reserves and surplus to overcome these emergencies. The current liability of the company is unfavourable. This indicates the funds are not being economically used by the firm. The fixed assets of the company decreased by Rs.(43,793) and the percentage of decrease is (8.85%). During the period of 2010 2011 the companys overall performance was good.
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3. FINDINGS
The analysis gives an inflated image of companys performance during the period of 2006-2011 The company is having excess of fund where the current ratio of the company is high therefore there is an excess of fund in the organization which is not utilized.
The quick ratio of the company also shows high as 2.30 in 2007 2008. There is increase in quick ratio. Quick ratio is lower than the ideal ratio, indicating that the firm is not able to meet its quick liabilities in time in 2010-2011.
The capital turnover ratio of the company is in a standard position due to the increase in sales. Fixed assets turnover ratio of the company is not satisfactory level.
The working capital turnover ratio of the company is almost to the standard in the year 2010-2011. The average margin of the goods sold is high compared to the previous years, which shows a high percentage of gross profit. The administrative expense of the company is high, where there is low net profit to the company. The proprietary ratio is high during the year 2010 2011; this indicates that relatively favorable position to the creditors at the time of liquidation. The capital gearing ratio declined and reached up to 3.76 in 2010-2011, indicating that the proportion of fixed income bearing funds declines each year, which increases the risk of equity shareholders
In 2010 2011 the debt asset rate was low which reduces the risk of the company.
Return on investment ratio shows negative in 2006 2007 and 2007 2008, but increase thereafter and reduces 13.89 2010 and 2011. Debtors turnover ratio on the short collection period. It means a debtors has short collection period which implies quick payment by debtors. WIP LTD is not in a satisfactory level.
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4. SUGGESTIONS
Though the sales of the concern is increasing year after year. The profitability of the concern is not increasing proportionately. Firm should take effective steps like keep stability in capital turnover, fixed assets turnover and try to maintain return on investment. The company is not depending much on outsiders fund which may affect its functioning. Company tries to effectively utilize outsiders fund. Firms dependence on creditors for its working capital has been decreasing which is alarming for creditors.
The return on capital employed is unsatisfactory in almost all the years. Having regarded to the risk factor the rate of return is lower than the bank rate. Steps shall be taken to utilize the ideal fund to make the rate of return satisfactory.
The company should effectively utilize its working capital in generating sales.
Creditor's management has to be properly done by the company. Steps should be taken so that the creditors are paid in time.
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5. CONCLUSION
The Western India Plywoods Ltd has been serving the state for more than 60 years. It has contributed much to the industrial development of the state and is providing employment to hundreds of people. Company is providing their products to various sectors like railways, automobiles, civil aviation, transport etc. Over the last few years the company has made an indelible mark in the wood industry. The study conducted to measure the financial performance of the company has observed that the financial position of the company is satisfactory, further improvement has to be made. To an extend the debt and equity of the company is affecting the financial performance of the company.
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ANNEXURE FIVE YEAR FINANCIAL SUMMARY

PARTICULARS I.INCOME 1. Sales 2. Other income 3.Deferred tax liability TOTAL (A) II. EXPENCE 4. Cost of material 5.Power and Fuel 6.Salaries and wages 7. Excise duty 8. Packing and forwarding 9. Other expenses 10. Depreciation TOTAL (B) 11. Profit/loss before taxation (A-B) 12. Provision for taxation 13. Profit/loss after tax 14. Dividend a) Preference (46,095) (40,754) 1,30,106 1,12,466 85,381 54,464 25,494 1,44,488 1,28,448 78,030 54,277 25,812 2,33,091 1,53,703 1,43,519 99,601 65,560 96,768 54,302 47,949 37,338 33,321 2,08,780 1,09,582 83,183 82,069 39,742 4,91,595 4,966 11,763 5,08,324 4,99,305 91,193 1,837 5,92,335 10,10,146 3,62,725 7,20,537 8,58,160 1,51,986 3,28,091 34,634 7,19,255 1,282 2007 2008 2009 2010 2011
98,681 46,827 5,54,419 (46,095)
1,60,271 41,764 6,33,089 (40,754)
2,25,852 65,721 9,87,047 23,099
24,882 22,500 3,07,060 55,665
1,02,176 46,607 6,72,139 48,398
1,246 21,853
2,956 52,709
5,630 42,768
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b) Equity c) Percentage d) Income tax on dividend 15. Retained profit 16. Fixed assets gross 17. Accumulated depreciation 18. Net current assets TOTAL ASSETS 19. Share capital 20. Reserves and surplus 21. Long term borrowings 22. Short term borrowings 23. Deferred tax liability TOTAL LIABILITIES 11,14,151 5,60,264 11,27,888 5,99,941 21,853 11,43,011 6,65,012 52,709 11,80,593 6,86,046 42,768 11,83,150 7,32,396
3,63,242 9,17,093 1,30,873 41,296 4,82,500 2,60,582
3,94,807 9,22,754 1,30,873 41,296 5,03,717 2,46,868
2,89,228 7,67,227 1,30,873 41,2964 3,41,188 2,53,870
2,74,722 7,69,269 2,23,200 41,720 2,41,060 2,63,289
4,50,754 8,07,338 2,23,200 84,488 2,41,729 2,57,921
1,837 9,17,093 9,22,754 7,67,227 7,69,269 8,07,338
Taxes central, state, local
91,815
93,804
1,45,601
54,583
1,11,166
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BIBLIOGRAPHY
PRASANNA CHANDRA FINANCIAL MANAGEMENT THEORY AND PRACTICE, Fourth Edition, Tata Mc Graw Companies.
Last five year Annual Report(2007-2011) of Western India Plywoods Ltd., Kannur.
R.K.SHARMA AND GUPTHA: MANAGEMENT ACCOUNTING 2nd edition, Kalyani Publishers, New Delhi.
I M PANDEY: Financial Management, 8th Edition, Vikas Publishing House
Wood Talk, Western India Plywoods
Websites
www.wipltd.org www.wekipedia.org www.google.com
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The Western India Plywoods Ltd.

The Western India Plywoods Ltd.

The Western India Plywoods Ltd.

2. COMPANY PROFILE 2.1ORIGIN OF THE ORGANIZATION

The Western India Plywoods Ltd.

2.3 Achievements of the organization

The Western India Plywoods Ltd.

2.4 VISION, MISSION AND QUALITY POLICY VISION

The Western India Plywoods Ltd.

2.6 OWNERSHIP PATTERN:

The Western India Plywoods Ltd.

2.7 PRODUCT PROFILE

DENSIFIED MOULDED SEATS

The Western India Plywoods Ltd.

2.8 ORGANIZATIONAL STRUCTURE

2.8 ORGANIZATIONAL STRUCTURE

HD/PFP/P CP Store/P&A Electric al

Chief Accountant officer Development Manager Works Manager

Plywood, Flush door, Block board

Plant Manager Densified Wood Products

The Western India Plywoods Ltd.

2.9 DEPARTMENTALIZATION 2.9.1 FINANCE DEPARTMENT

2.9.1 HIERARCHY OF FINANCE DEPARTMENT

Accounts staff THE BANKERS

Secured Loans Unsecured Loans Page 13

2.9.2 MARKETING DEPARTMENT

2.9.2 HIERARCHY OF MARKETING DEPARTMENT:

2.9.3 PRODUCTION DEPARTMENT

The Western India Plywoods Ltd.

2.9.3 HIERARCHY OF PRODUCTION DEPARTMENT:

Supervisor (shifting charge)

2.9.4 SALES DEPARTMENT

2.9.4 HIERARCHY OF SALES DEPARTMENT:

Assistant Sales Manager

Junior Assistant Assistant Depot Manager Clerk Clerk

The Western India Plywoods Ltd.

2.9.5 HUMAN RESOURCE DEPARTMENT

The Western India Plywoods Ltd.

2.9.5 HIERARCHY OF HUMAN RESOURCE DEPARTMENT:

General Manager (Administration)

Chief Time Keeper

2.9.6 PURCHASE DEPARTMENT

2.9.6 HIERARCHY OF PURCHASE DEPARTMENT:

2.9.7 RESEARCH AND DEVELOPMENT

2.9.8 QUALITY MANAGENMENT SYSTEM (QMS)

2.9.7 HIERARCHY OF QMS DEPARTMENT:

Quality Awareness Engineer

2.10 FUTURE GROWTH AND PROSPECTS

The Western India Plywoods Ltd.

HD/PFP/P CP Store/P&A Electric al

Chief Accountant officer Development Manager Works Manager

Plywood, Flush door, Block board

Plant Manager Densified Wood Products

The Western India Plywoods Ltd.

The Western India Plywoods Ltd.

iv. SHARED VALUES

The Western India Plywoods Ltd. Supervisory Staff

The Western India Plywoods Ltd.

The Western India Plywoods Ltd.

The Western India Plywoods Ltd.

The Western India Plywoods Ltd.

The Western India Plywoods Ltd.

1.GENERAL INTRODUCTION THEORETICAL BACKGROUND OF THE RESEARCH