ABSTRACT

Ratio Analysis is one of the techniques of financial analysis where ratios are used as a yardstick for evaluating the financial condition and performance of a firm. Analysis and interpretation of various accounting ratios gives a better understanding of financial condition and performance of firm. Trend ratios indicate the direction of change in the performance improvement, deterioration or constancy- over the year. It was a great experience to undergo summer in plant training on A study on Ratio Analysis at Natraj Oil Mill (P) Ltd .During the study I found that the company is carrying its activity in producing oil. .This study is conducted in order to know how the organization is maintaining the financial statements. So as to identify the problems of such a title and give suggestions and conclusions. In addition to this concept studying the overall organization role of different department functions of their respective departments, procedures and policies. For the study Natraj Oil Mill (P) Ltd, is considered. The ratio analysis is done using the Income statements and Balance Sheets of the company between 2007 to 2011. Data Interpretation on trend ratio analysis is carried out at NSL at Natraj Oil Mill (P) Ltd: Madurai Dist. For study, of five years is considered and compared its performance over the period of five years. For result analysis and MS Excel Software package are used. Finally the study has helped to me in many ways to acquire the knowledge about the company performance and its profitability.

OBJECTIVES OF THE STUDY

1. To help the management in its planning and forecasting activities. 2. To evaluate operational efficiency, liquidity, and solvency of Natraj Oil Mill (P) Ltd. 3. To help the management in having effective control over the activities of different departments. 4. To compare the previous five years and present year performance of the company. 5. To give suggestion and recommendation based on the study.

INTRODUCTION
Ratio analysis is a technique of analyzing the financial statement of industrial concerns. Now a day this technique is sophisticated and is commonly used in business concerns. Ratio analysis is not an end but it is only means of better understanding of financial strength and and weakness of a firm.

Ratio analysis is one of the most powerful tools of financial analysis which helps in analyzing and interpreting the health of the firm. Ratios are proved as the basic instrument in the control process and act as back bone in schemes of the business forecast.

With the help of ratio we can determine The ability of the firm to meet its current obligation. The limit or extent to which the firm has used its borrowed funds. The efficiency with which the firm is utilizing in generating sales revenue. The operating efficiency and performance of the company .

Classification of Ratios Ratios can be classified into different categories depending upon the basis of classification.

I. TRADITIONAL CLASSIFICATION Traditional Classification has been on the basis of financial statements, on which ratio may be classified as follows.

1. Profit & Loss account ratios.

E.g. Gross Profit Ratio, Net Profit Ratio, Operating Ratio etc 2.Balance sheet ratio. E.g. Current Ratio, Debt Equity Ratio, Working Capital Ratio etc 3. Composite/Mixed ratio. E.g. Stock Turnover Ratio, Debtors Turnover Ratios, Fixed Assets Turnover Ratio etc

II. FUNCTIONAL CLASSIFICATION OF RATIOS Functional ratios 1. Liquidity ratios a) Current Ratio b) Quick Ratio

2.

Leverage Ratios a) Debt-equity Ratio b) Current Asset to Proprietors fund Ratio

III. PROBABILITY RATIOS a. Gross profit Ratio b. Operating profit Ratio c. Return on investment

IV. ACTIVITY RATIO i. Inventory Turnover Ratio ii. Asset Turnover Ratio: a. Fixed Asset Turnover Ratio b. Current Asset Turnover Ratio iii. Working Capital Turnover Ratio.

LIMITATION OF THE STUDY

1) The study is limited to few ratios because of non availability of detailed financial data. 2) The study is used on secondary data such as annual report of the company 3) The reliability and accuracy of calculation depends more on information found in profit and loss a/c and balance sheet. 4) The study is confined only to a period of 5 years.

METHODOLOGY
The study is conducted at Natraj Oil (P) Ltd, Madurai

Before the collection of data, it is often advisable to all other aspects of the study. We need to recognize the objectives of the study. After the purpose has been defined, the next step is to decide about the sources of data. The sources of information may be primary as well as secondary sources. This chapter entails a review of all the data obtained and it relevance to the study being undertaken.

DATA COLLECTION METHOD: There are two types of data collection methods. 1. Primary data collection method 2. Secondary data collection method PRIMARY SOURCES: The primary data are collected by the thorough and detailed discussion was conducted with the financial controller and Accounts officer and also discussion with college internal guide. SECONDARY SOURCES: The secondary data includes sales reports, purchase reports and financial statements of the company and also information from the text sources. SAMPLING DESIGN: Sampling unit Sampling Size : Financial Statements :Last five years financial statements

Sampling procedure : Direct