Escolar Documentos
Profissional Documentos
Cultura Documentos
LIST OF TABLES
LIST OF DIAGRAMS
S. NO TITLE PAGE NO
2.5.1 Gross Profit Ratio 36
2.5.2 Net Profit Ratio 38
2.5.3 Operating Ratio 40
2.5.4 Current Ratio 42
2.5.5 Quick Ratio 44
2.5.6 Investment To Total Assets Ratio 46
2.5.7 Working Capital Turnover Ratio 48
2.5.8 Debtors Turnover Ratio 50
2.5.9 Interest Coverage Ratio 52
2.5.10 Return On Shareholder Equity Ratio 54
2.5.11 Proprietary Ratio 56
2.5.12 Material Consumed Ratio 58
2.5.13 Investment To Working Capital Ratio 60
2.5.14 Fixed Assets Turnover Ratio 62
2.5.15 Conversion Cost Ratio 64
TABLE OF CONTENTS
3 3.1 Findings 96
3.2 Suggestions 105
3.3 Conclusion 106
3.4 Bibliography 107
1.1 INTRODUCTION
1. Analysis
2. Comparison
3. Interpretation
1.5 ANALYSIS
1.6 COMPARISON
COMPARISON is the process of ascertainment the relative
magnitude of the component part or the study of extent of relationship of the
component parts.
1.7 INTERPRETATION
1) Watch plant
2) Jewelry plant
3) Alarm Time Piece Bracelet Plant
Types of watch:
▪ Mechanical watch
▪ Electronic watch
Mechanical watch
▪ Hand wide
▪ Automatic
Electronic watch:
Watches
• Nebula
• Insignia
• Psi
• Silver raga
• Regalia
• Raga
• Royal
• Band ham
• Technology
• Steel
• Cacique
• Spectra
• Fastback
• Exacta
• Dash
4.3 VISION:
The company also exports about 10% of it watches primarily to the Middle
East, Far East and Europe. In serve key countries of the Middle East market, titan
is ranked among top three brands.
Titan realized customer service was an element of the value chain meriting
the same attention as the selling of the product. Recognizing the leverage this
element could give to the brand. Titan established a service network now
consisting of about 342 authorized service centers, 4 authorized service workshop
and 222 service point. in addition, more then 4000 dealers are trained in minor
repairs and they purchase spares and accessories from titan.
5.2 TITAN’SCORE
5.8 TECHNOLOGY:
5.9 ENVIRONMENT:
COMPETITIVE ENVIRONMENT:
5.18 EBAUCHE
5.24 ASSMBLY
Planning and supervising process of assembly watchcase parts.
5.25 DESIGNS
Design innovation and the preparation of standard technical designs
incorporating manufacturing details manufacturing of finished products.
5.27 TRAINING
To ensure that new employee’s are provided with appropriate
training and information to enable them to perform their duties effectively. To
continue further training to update each one’s knowledge and skills from time to
time.
5.28 PERSONNEL
To recruit right people capable of performing the organizations
specify tasks, to utilize available human resources effectively and act as a
catalyst in the individual department of the people in the organization. Employees
their families and their well-being are there is the prime concern of the
personnel department.
5.31 PROJECT
Planning, scheduling, with external and internal sources for the
establishment and smooth functioning of the project.
5.35 PURCHASE
The procurement of materials, tools, machinery and consumables
required for manufacturing and administration.
5.36 STORES
Storing and releasing material, tools and consumables to the
various departments to ensure and uninterrupted functioning of organization.
5.39 SALES
To develop new dealers and ensure the constant flow of products
to the market as per demands and consumer need.
5.40 MARKETING
To study and evaluate market condition and to promote corporate
image through value based decisions.
CFTs
• Safety committee
• Quality committee
• Cultural committee
• CFD (community development forum)
• Canteen committee
• Sports committee
Revenue Recognition:
Depreciation:
Investment:
Inventories:
Retirement Benefits:
Deferred taxation:
• Ratio analysis
• Comparative statement
• Common size statement
Nature of data
Secondary data
Sources of Data
Company annual report for the period from 2003-2004, to2007-
2008.
Tools for presentation:
Bar charts where used for presentation.
Period of study:
The period covered by the past five years from 2003 to 2008
Tools used:
• Ratio analysis
Personal bias of researcher may have a role to play in the analysis and
interpretation of financial data.
Figures for the analysis are taken from the annual report .so all the
limitations of there statements will apply to the study.
Major part of the work is concerned with financial data; adequate data was
not able to pool because of the secrecy by the company.
Gross profit
Sales – Cost of goods sold
GPR = ---------------------------------- × 100 (or) …………………………………x100
Net sales Net
sales
Table: 2.5.1
INTERPRETATION :
Thé grosse protif ratio was high in the year 2002 which
is about 54.75%. then it was considerably less because of the increasing cost or
decreasein sales. In the year 2008 it again showed some growth gradually of 51.35%
then on theyear 2005 it was 50.97%. at the enxt year of 2006 which is 50.58% and
laste in the year of 2003 gross profit decrease 49.98%.
Net profit
Net Profit Ratio =--------------------------------×100
Net sales
Table: 2.5.2
Chart: 2.5.2
INTERPRETATION :
The net profit for the year 2004 was 23.11% which shows
that there is better management efficiency. But in the next year it was down to
2008 14.08% shows there was a poor efficiency in the management but from that
point the organization followed a step increases in the net profit. The year of
2006 profit was 13.04%.and in the year of 2005and 2007same equal of profit 12.80%
and 12.35%.
Table: 2.5.3
Chart: 2.5.3
INTERPRETATION :
Current assets
Current Ratio =-------------------------------------
Current liabilities
Table: 2.5.4
Chart: 2.5.4
INTERPRETATION :
Table: 2.5.5
YEAR C.ASSETS STOCK C.LIABILITIES RATIO
2004 34990 12482 11437 1.97
Chart: 2.5.5
INTERPRETATION :
Table: 2.5.6
Chart: 2.5.6
INTERPRETATION :
Cost of sales
W C T R =------------------------------------
Table: 2.5.7
Chart: 2.5.7
INTERPRETATION :
This ratio measures the effective utilization of the working
capital. During the year of 2008 at 8.73%. 2007 the7.72% decreased in compare
with next year. The year of 2006 ratio 5.08% and followed year of 2005 and 2004
ratio of 4.18% and 3.08%.the higher ratio indicates that there is next followed
all the years.
Credit sales
D T R =---------------------------
Average .debtors
Table: 2.5.8
Chart: 2.5.8
INTERPRETATION :
EBIT
I C R =------------------------------------------------
Fixed interest charges
Table: 2.5.9
INTERPRETATION :
Net profit
R S H R=-------------------------------------×100
Shareholder funds
Table: 2.5.10
Chart: 2.5.10
INTERPRETATION :
Shareholders fund
Proprietary Ratio =--------------------------------
Total assets
Table: 2.5.11
Chart: 2.5.11
INTERPRETATION :
Table: 2.5.12
Chart: 2.5.12
INTERPRETATION :
Inventory
I W C R=---------------------------------
Working capital
Table: 2.5.13
Chart: 2.5.13
INTERPRETATION :
This is calculating to ascertain the efficiency of the
capital management of the concern. The high inventory ratio indicates the
investment in inventory is optimum. Highest using for inventory in the year of
2008 at ratio of 2.21% and 2007 1.85%. the followed year of 2006, 2005, and 2004
ratios was 0.87%, 0.74% and 0.53%.which is indicates there is greater efficiency
of inventory management and efficiency of the business concern.
Cost of sales
F A T R=--------------------------
Net fixed assets
Table:
2.5.14
Chart: 2.5.14
INTERPRETATION :
Table: 2.5.15
INTERPRETATION :
particular 31-03-2003
lacks 31-03-2004
lacks
Increase (+) or decrease (-) in 2004
Over 2003
Amount lacks Percentage (%)
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Land & building
Plant & machinery
Furniture
Vehicles
Total FA(B)
Other assets
Other assets
Total OA(C)
Total assets(A+B+C)
Liabilities
Share holder fund
Share capital
Reserve & surplus
Deferred liabilities
Total SHF(A)
Loan fund
Secured loan
Unsecured loan
Current liabilities
Provisions
Total LF(B)
Total liability(A+B)
14623
15904
2752
33279
3214
16048
1363
130
20775
18057
18057
72091
8228
12509
-
20737
23551
18652
7579
1572
51354
72091
12482
20775
1733
34990
3794
14558
1238
174
19764
23146
23146
77900
8228
8242
4458
20928
21008
23321
11437
1206
56972
77900
-2141
+4871
-1019
+1711
+580
-1490
-125
+44
-991
+5089
+5089
+5809
-
-4267
-
-2543
+4669
+3858
-366
+5618
+5809
-14.64
+30.63
-37.03
+5.14
+18.04
-9.28
-9.17
+33.85
-4.77
+28.18
+28.18
+8.06
-34.11
+0.92
-10.79
+25.03
+50.90
+23.28
+10.93
+8.06
particular 31-03-2004
lacks 31-03-2005
lacks
Increase (+) or decrease (-) in 2005
Over 2004
Amount lacks Percentage (%)
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Land & building
Plant & machinery
Furniture
Vehicles
Total FA(B)
Other assets
Other assets
Total OA(C)
Total assets(A+B+C)
Liabilities
Share holder fund
Share capital
Reserve & surplus
Deferred liabilities
Total SHF(A)
Loan fund
Secured loan
Unsecured loan
Current liabilities
Provisions
Total LF(B)
Total liability(A+B)
12482
20775
1733
34990
3794
14558
1238
174
19764
23146
23146
77900
8228
8242
4458
20928
21008
23321
11437
1206
56972
77900
14192
18638
2399
35229
3657
13221
1222
110
18210
31000
31000
84439
8228
8091
4159
20406
12680
34026
16139
1188
64033
84439
+1710
-2137
+666
+239
-137
-1337
-16
-64
-1380
+7854
+7854
+6539
-
-223
-299
-522
-8328
+10705
+4702
-18
+7061
+6539
+13.70
-10.29
+38.43
+0.68
-3.61
-9.18
-1.04
-36.78
-7.04
+33.93
+33.93
+8.39
-
-2.71
-6.71
+2.49
-39.64
+45.90
+41.11
+1.49
+12.39
+8.39
particular 31-03-2005
lacks 31-03-2006
lacks
Increase (+) or decrease (-) in 2006
Over 2005
Amount lacks Percentage (%)
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Land & building
Plant & machinery
Furniture
Vehicles
Total FA(B)
Other assets
Other assets
Total OA(C)
Total assets(A+B+C)
Liabilities
Share holder fund
Share capital
Reserve & surplus
Deferred liabilities
Total SHF(A)
Loan fund
Secured loan
Unsecured loan
Current liabilities
Provisions
Total LF(B)
Total liability(A+B)
14192
18638
2399
35229
3657
13221
1222
110
18210
31000
31000
84439
8228
8091
4159
20406
12680
34026
16139
1188
64033
84439
16412
14816
2685
33913
4041
12044
1156
89
17330
25865
25865
77108
8228
8285
3515
20028
20361
20310
15062
1347
57080
77108
+2220
-3822
+286
-1316
+384
-1177
-66
-21
-880
-5135
-5135
-7331
-
+266
-646
-379
+7681
-13716
-1077
+159
-6953
-7331
+15.64
-20.51
+11.92
-3.74
+10.50
-8.90
-5.40
-19.09
-4.83
-16.56
-16.56
-8.68
-
+3.32
-15.15
-1.86
+60.56
-40.31
-6.67
+13.38
-10.86
-8.68
particular 31-03-2006
lacks 31-03-2007
lacks
Increase (+) or decrease (-) in 2007
Over 2006
Amount lacks Percentage (%)
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Land & building
Plant & machinery
Furniture
Vehicles
Total FA(B)
Other assets
Other assets
Total OA(C)
Total assets(A+B+C)
Liabilities
Share holder fund
Share capital
Reserve & surplus
Deferred liabilities
Total SHF(A)
Loan fund
Secured loan
Unsecured loan
Current liabilities
Provisions
Total LF(B)
Total liability(A+B)
16412
14816
2685
33913
4041
12044
1156
89
17330
25865
25865
77108
8228
8285
3515
20028
20361
20310
15062
1347
57080
77108
27162
7709
4401
39272
3958
11147
1149
259
16513
23334
23334
79119
8228
9497
2932
20657
19336
12467
24567
2092
58462
79119
+10750
-7107
+1716
+5359
-83
-897
-7
+170
-817
-2531
-2531
+2011
-
+1212
-583
+629
-1025
-7843
+9505
+745
+1383
+2011
+65.50
-47.91
+63.91
+15.80
-2.05
-7.45
-0.60
+191.01
-4.71
-9.79
-9.79
+2.61
-
+14.63
-16.58
+3.14
-5.03
-38.62
+63.11
+55.31
+2.42
+2.61
particular 31-03-2007
lacks 31-03-2008
lacks
Increase (+) or decrease (-) in 2008
Over 2007
Amount lacks Percentage (%)
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Land & building
Plant & machinery
Furniture
Vehicles
Total FA(B)
Other assets
Other assets
Total OA(C)
Total assets(A+B+C)
Liabilities
Share holder fund
Share capital
Reserve & surplus
Deferred liabilities
Total SHF(A)
Loan fund
Secured loan
Unsecured loan
Current liabilities
Provisions
Total LF(B)
Total liability(A+B)
27162
7709
4401
39272
3958
11147
1149
259
16513
23334
23334
79119
8228
9497
2932
20657
19336
12467
24567
2092
58462
79119
37439
9012
3829
50280
3642
12412
1270
322
17646
20485
20485
88411
8228
15030
2375
25633
14884
11909
33314
2671
62778
88411
+10277
+1303
-572
+11008
-316
+1265
+121
+63
+1133
-2849
-2849
+9292
-
+5533
-557
+4976
-4452
-558
+8747
+579
+4316
+9292
+37.84
+16.90
-13.00
+28.03
-7.98
+11.35
+10.53
+24.32
+6.86
-12.21
-12.21
+11.74
-
+58.26
-19.00
+24.09
-23.02
-4.48
+35.61
+27.68
+7.38
+11.74
INTERPRETATION
FIXED ASSETS
During the year 2003 to 2004 the Fixed Assets has been decreased to 4.77%
which indicated that the company has sold some of its Fixed Assets during the year
2004.
During the year 2004 to 2005 the Fixed Assets has been decrease to 6.98%.
It indicated that the company has sold further of its Fixed Assets during the year
2005.
During the year 2005 to 20046the Fixed Assets has been decreased to 4.83%.
It indicates that the company has sold further of its Fixed Assets during the year
2006
During the year 2006 to 2007 the Fixed Assets has been decreased to 4.71%.
It indicates that the company has sold further of its fixed assets during the year
2007.
During the year 2007 to 2008 the Fixed Assets has been increased to 6.86%.
It indicates that the company has purchased some Fixed Assets during the year
2008.
This shows that the long term financial position of the firm was not stable
or constant.
CURRENT LIABILITIES
In the year the 2003 to 2004 the current liabilities of the company has been
increased to 50.90% it indicates that the company has to repay its current
liabilities. It means the amount is still outstanding the company to pay its
liabilities. During the year 2004 to 2005 the current liabilities was in an
increasing trend of 41.11% which indicates that it is still outstanding to repay
its current liabilities.
In the year 2005 to 2006 the current liabilities of the company has been
decreased to 6.67% which indicates that the company has repaid its current
liabilities.
In the year 2006 to 2007 the current liabilities of the company has been
increase to 63.11% which indicates the company has not been repaid its current
liabilities.
In the year 2007 to 2008 the current liabilities of the company has been
increased to 35.61%, which indicates that the company has not repaid its current
liabilities.
During the year 2005 the general reserve was greater (12509 corers) when
compared to 2006(8242crores) the general reserve for the year 2005 was further
decreased to (8019crores). During the year 2006 the year 2007 and 2008 the
general reserves of the company was increased to 9497 and 15030 respectively. The
company maintained good reserves during 2007 and 2008.
CAPITAL
The share capital of the company has not been changed for a longer period of
Time. Generally there is an overall increase in the total assets and liabilities.
Net sales
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Total operating expenses(B)
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
15437026
6969026
8468000
3411930
740650
4152580
4315420
478402
20916
499318
3816102
16018836
7247836
8771000
3792295
763155
4555450
4215550
462664
50646
513310
3702240
+581810
+278810
+303000
+380365
+22505
+402870
-98870
-15738
+29730
+13992
-113862 +3.77
+4.00
+3.58
+11.15
+3.04
+9.70
-2.31
-3.29
+142.14
+2.80
-2.98
INTERPRETATION
The net sales have increased from the year 2003 to 2004 by 3.77% it may be
due to the demand of the production of goods had increased or when production is
being increased.
Cost of goods sold have increased from the year 2003 to 2004 by 4% this is
due to the increase in the cost of raw materials and much labor involved in the
production of goods.
The gross profit has been increased from the year 2003 to 2004 by 3.58%.
Operating expenses this includes the total operating expenses of the company
which have been increased by 9.70%.
To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a decreases operating profit of 2.29% to the operating profit
of the company we add other incomes like interest and income tax. So that we
arrive at a decreased net profit of 2.98%.
Comparative income statement for year ended 31-03-2004 to 31-03-2005
Amount percentage
Net sales
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
16018836
7247836
8771000
3792295
763155
4555450
4215550
462664
50646
513310
3702240
15952964
7978964
7974000
4732311
767501
5499812
2474188
413467
18793
432260
2041928
-65872
+731128
-797000
+940016
+4346
+944362
-1741362
-49197
-31853
-81050
-1660312
-0.41
+10.09
-9.09
+24.79
+0.57
+20.73
-14.31
-10.63
-62.89
-15.79
-44.85
INTERPRETATION
The net sales have decreased from the year 2004 to 2005 by 0.41% it may be
due to the surplus of production of goods or when the production is being
decreased.
Cost of goods sold have increased from the year 2004 to 2005by 10.09% this
is due to the increase in the cost of raw material and much labor involved in the
production of goods.
The gross profit has been decreased from the year 2004 to 2005 by 9.09%.
This may be due to the increase in the cost of goods.
Operating expenses this includes the total operating expenses of the company
which have been increased by 20.73%.
To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a decreased operating profit of 41.31% to the operating profit
of the company we add other incomes like interest and income tax. So that we
arrive at a decreased net profit of 44.85%.
Amount
percentage
Net sales
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
15952964
7978964
7974000
4732311
767501
5499812
2474188
413467
18793
432260
2041928
19397247
9585247
9812000
5934769
945775
6880544
2931456
376218
25145
401363
2530093
+3444283
+1606283
+1838000
+1202458
+178274
+1380732
+457268
-37249
+6352
-30897
+488165 +21.59
+20.13
+23.05
+25.41
+23.23
+25.11
+18.48
-9.01
+33.80
-7.15
+23.91
INTERPRETATION
The net sales have increased from the year 2005 to 2006 by 21.59% it may be
due to the demand of the production of goods had increased or when production is
being increased.
Cost of goods sold have increased from the year 2005 to 2006 by 20.13% this
is due to the increase in the cost of raw materials and much labor involved in eh
production of goods.
The gross profit has been increased from the year 2005 to 2006 by 23.05%.
Operating expenses this includes the total operating expenses of the company
which have been increased by 25.11%.
To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a decreased operating profit of 18.48% to the operating profit
of the company we add other incomes like interest and income tax. So that we
arrive at a decreased net profit of 23.91%.
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
19397247
9585247
9812000
5934769
945775
6880544
2931456
376218
25145
401363
2530093
23135608
11346608
11789000
7502973
1070168
8573141
3215859
309174
50094
359268
2856591 +3738361
+1761361
+1977000
+1568204
+124393
+1692597
+284403
-67044
+24949
-42095
+326498 +19.27
+18.38
+20.15
+26.42
+13.15
+24.60
+9.70
-17.82
+99.22
-10.49
+12.90
INTERPRETATION
The net sales have increased form the year 2006 to 2007 by 19.27%this is due
to the increase in the cost of raw materials and much labor involved in the
production of goods.
Cost of goods sold have increased from the year 2006 to 2007 by 18.38% this
is due to the increase in the cost of raw materials and much labor involved in the
production of goods.
The gross profit has been increased from the year 2006 to 2007 by 20.15%.
Operating expenses this includes the total operating expenses of the company
which have been increased by 24.60%.
To arrive at the operating profit we deduct the gross profit and operating
expenses so we get and increased operating profit of 9.70% to the operating profit
of the company we add other incomes like interest and income tax. So that we
arrive at a increase net profit of 12.90%.
Amount
percentage
Net sales
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
23135608
11346608
11789000
7502973
1070168
8573141
3215859
309174
50094
359268
285691
30451738
14813738
15638000
9816202
1192307
11008509
4629491
248357
93250
341670
4287884
+7316130
+3467130
+3849000
+3213229
+122139
+2435368
+1413632
-60817
+43156
-17661
+1431293 +31.62
+30.56
+32.65
+30.83
+11.41
+28.41
+43.96
-19.67
+86.15
-4.92
+50.10
INTERPRETATION
The net sales have increased from the year 2007 to 2008 by 31.62 % it may be
due to the demand of the production of goods had increased or when production is
being increased.
Cost of goods sold have increased form the year 2007 to 2008 by 30.56% this
is due to the increase in the cost of raw materials and much labor involved in the
production of goods.
The gross profit has been increased form the year 2007 to 2008 by 32.65%.
Operating expenses this includes the total operating expenses of the company
which have been increased by 28.41%.
To arrive at the operating profit we deduct the gross profit and operating
expenses so we get an increased operating profit of 43.96% to the operating profit
of the company we add other incomes like interest and income tax. So that we
arrive at a increased net profit of 50.10%
lacks
percentage 31-03-2004
lacks
percentage
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Gross block
(-) Depreciation
Total FA(B)
Other assets
Advance
Investment
Loans
Misc.expenses
Total OA(C)
Total assets(A+B+C)
Liabilities
Current liabilities
Current liabilities
Provision
Total CL(A)
Other liabilities
Capital
Reserve & surplus
Secured loans
Unsecured loans
Deferred tax
Total OL(B)
Total liability(A+B)
14623
15904
2752
33279
36623
15868
20755
361
2309
15067
320
18057
72091
7579
1572
9151
8228
12509
23551
18652
-
62940
72091
20.28
22.06
3.82
46.16
-
-
28.79
0.50
3.20
20.90
0.44
25.05
100
10.51
2.18
12.69
11.41
17.35
32.67
25.87
-
87.31
100
12482
20775
1733
34990
37814
18050
19764
326
2462
19740
618
23146
77900
11437
1206
12643
8228
8242
21008
23321
4458
65257
77900
16.02
26.67
2.22
44.92
-
-
25.37
0.42
3.16
25.34
0.79
29.71
100
14.68
1.55
16.23
10.56
10.58
26.97
29.94
5.72
83.77
100
lacks
percentage 31-03-2005
lacks
percentage
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Gross block
(-) Depreciation
Total FA(B)
Other assets
Advance
Investment
Loans
Misc.expenses
Total OA(C)
Total assets(A+B+C)
Liabilities
Current liabilities
Current liabilities
Provision
Total CL(A)
Other liabilities
Capital
Reserve & surplus
Secured loans
Unsecured loans
Deferred tax
Total OL(B)
Total liability(A+B)
12482
20775
1733
34990
37814
18050
19764
326
2462
19740
618
23146
77900
11437
1206
12643
8228
8242
21008
23321
4458
65257
77900
16.02
26.67
2.22
44.92
-
-
25.37
0.42
3.16
25.34
0.79
29.71
100
14.68
1.55
16.23
10.56
10.58
26.97
29.94
5.72
83.77
100
14192
18638
2399
35229
38174
19964
18210
966
3709
21708
4617
31000
84439
16139
1188
17327
8228
8019
12680
34026
4159
67111
84439
16.81
22.07
2.84
41.72
-
-
21.57
1.14
4.39
25.71
5.47
36.71
100
19.11
1.41
20.25
9.74
9.50
15.01
40.30
4.93
79.48
100
lacks
percentage 31-03-2006
lacks
percentage
Current assets
Inventories
Sundry debtors
Cash at Bank Total CA(A)
Fixed assets
Gross block
(-) Depreciation
Total FA(B)
Other assets
Advance
Investment
Loans
Misc.expenses
Total OA(C)
Total assets(A+B+C)
Liabilities
Current liabilities
Current liabilities
Provision
Total CL(A)
Other liabilities
Capital
Reserve & surplus
Secured loans
Unsecured loans
Deferred tax
Total OL(B)
Total liability(A+B)
14192
18638
2399
35229
38174
19964
18210
966
3709
21708
4617
31000
84439
16139
1188
17327
8228
8019
12680
34026
4159
67111
84439
16.81
22.07
2.84
41.72
-
-
21.57
1.14
4.39
25.71
5.47
36.71
100
19.11
1.41
20.25
9.74
9.50
15.01
40.30
4.93
79.48
100
16412
14816
2685
33913
39342
22012
17330
407
2758
19369
3331
25865
77108
15062
1347
16409
8228
8285
20361
20310
3515
60699
77108
21.28
19.21
3.48
43.39
-
-
22.47
0.53
3.58
25.12
4.32
33.55
100
19.53
1.75
21.28
10.67
10.74
26.41
26.34
4.56
78.72
100
COMMON SIZE BALANCE SHEET OF 2006 -2007
particular 31-03-2006
lacks
percentage 31-03-2007
lacks
percentage
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Gross block
(-) Depreciation
Total FA(B)
Other assets
Advance
Investment
Loans
Misc.expenses
Total OA(C)
Total assets(A+B+C)
Liabilities
Current liabilities
Current liabilities
Provision
Total CL(A)
Other liabilities
Capital
Reserve & surplus
Secured loans
Unsecured loans
Deferred tax
Total OL(B)
Total liability(A+B)
16412
14816
2685
33913
39342
22012
17330
407
2758
19369
3331
25865
77108
15062
1347
16409
8228
8285
20361
20310
3515
60699
77108
21.28
19.21
3.48
43.39
-
-
22.47
0.53
3.58
25.12
4.32
33.55
100
19.53
1.75
21.28
10.67
10.74
26.41
26.34
4.56
78.72
100
27162
7709
4401
39272
40008
23495
16513
978
2702
17214
2440
23334
79119
24567
2092
26659
8228
9497
19336
12467
2932
52460
79119
34.33
9.74
5.56
49.63
-
-
20.87
1.24
3.42
21.76
3.08
29.50
100
31.05
2.64
33.69
10.40
12.00
24.44
15.76
3.71
66.31
100
particular 31-03-2007
lacks
percentage 31-03-2008
lacks
percentage
Current assets
Inventories
Sundry debtors
Cash at bank
Total CA(A)
Fixed assets
Gross block
(-) Depreciation
Total FA(B)
Other assets
Advance
Investment
Loans
Misc.expenses
Total OA(C)
Total assets(A+B+C)
Liabilities
Current liabilities
Current liabilities
Provision
Total CL(A)
Other liabilities
Capital
Reserve & surplus
Secured loans
Unsecured loans
Deferred tax
Total OL(B)
Total liability(A+B)
27162
7709
4401
39272
40008
23495
16513
978
2702
17214
2440
23334
79119
24567
2092
26659
8228
9497
19336
12467
2932
52460
79119
34.33
9.74
5.56
49.63
-
-
20.87
1.24
3.42
21.76
3.08
29.50
100
31.05
2.64
33.69
10.40
12.00
24.44
15.76
3.71
66.31
100
37439
9012
3829
50280
42042
24396
17646
1956
2702
14395
1430
20485
88411
33314
2672
35986
8228
15030
14884
11909
2375
52425
88411
42.35
10.19
4.33
56.87
-
-
19.96
2.22
3.06
16.28
1.62
23.17
100
37.68
3.02
40.70
9.31
17.00
16.83
13.47
2.69
59.30
100
INTERPRETATION
CURRENT ASSETS
During the year 2003 to 2004 the current assets of the company has decreased
from 46.92% to 44.92% which indicates that some amount of cash is gone out of the
company
During the year 2004 to 2005 the current assets of the company has decreased
from 44.91% to 41.72% which indicates that some amount has been spent for the
business or for purchase of any assets by the company
During the year 2005 to 2006 the current assets of the company has increased
from 41.72% to 43.98% it indicates that some amount has been came in to the
business by the way of sale of fixed assets or turnover by the company
During the year 2006 to 2007 the current assets of the company has increased
from 43.98% to 49.63% which indicates that there is a sufficient cash and bank
balances in the company
During the year 2007 to 2008 the current assets of the company has increased
from 49.63% to 56.87% which indicates that the company has good collection over
its debtors and also there is sufficient funds in the business.
FIXED ASSETS
The percentage of fixed assets of the company has decreased from 28.79% to
25.37% during the year 2003 to 2004 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
The percentage of fixed assets of the company has decreased from 25.37% to
21.57% during the year 2004 and 2005 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
The percentage of fixed assets of the company has increased from 21.57% to
22.47% during the year 2005 to 2006 it indicates that the company has purchased
some fixed assets during the year and hence there is an outflow of cash.
The percentage of fixed assets of the company has decreased from 22.47% to
20.87% during the year 2006 to 2007 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
The percentage of fixed assets of the company has decreased from 20.87% to
19.96% during the year 2007 to 2008 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
CURRENT LIABILITIES
The current liabilities of the firm have increased from 12.69% to 16.23%
which indicates that the company has not repaid its debts during the year 2004.
There is no outflow of cash during the year when compared to 2003.
The current liabilities for the year 2004 to 2005 have increased from 16.23%
to 20.52% which indicates that the company has not paid its debts or the amount
outstanding to them.
During the year 2005 to 2006 the current liabilities of the firm has
increased from 20.52% to 21.28% which indicates that the company has not paid its
debts.
During the year 2006 to 2007 the current liabilities of the firm has
increase from 21.36% to 33.69% which indicates that the company is still
outstanding to pay it debts.
The current liabilities for the year 2007 to 2008 have increased from 33.65%
to 40.70% which indicates that the company has not paid its debts or the amount
outstanding to them.
This indicates the poor policy for repaying its debts.
Comparing the total current assets and current liabilities it shows that the
working capital position of the company is not satisfactory.
Therefore it can be concluded that the financial policy of the concern is highly
unsatisfactory.
Common size income statement for year ended 31-03-2003 to 31-03-2004
Net sales
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
15437026
6969026
8468000
3411930
740650
4152580
4315420
478402
20916
499318
3816102
100
45
55
22.10
4.80
26.90
27.95
3.10
0.14
3.23
24.72
16018836
7247836
8771000
3792295
763155
4555450
4215550
462664
50646
513310
3702240
100
45
55
23.67
4.74
28.41
26.32
2.89
0.32
3.20
23.11
Net sales
Lees: cost of goods sold
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
16018836
7247836
8771000
3792295
763155
4555450
4215550
462664
50646
513310
3702240
100
45
55
23.67
4.74
28.41
26.32
2.89
0.32
3.20
23.11
15952964
7978964
7974000
4732311
767501
5499812
2474188
413467
18793
432260
2041928
100
50.02
49.98
29.66
4.81
34.48
15.51
2.59
0.12
2.71
12.80
Net sales
Lees: cost of goods sold
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
15952964
7978964
7974000
4732311
767501
5499812
2474188
413467
18793
432260
2041928
100
50.02
49.98
29.66
4.81
34.48
15.51
2.59
0.12
2.71
12.80
19397247
9585247
9812000
5934769
945775
6880544
2931456
376218
25145
401363
2530093
100
49.42
50.58
30.60
4.88
35.47
15.11
1.94
0.13
2.07
13.04
Net sales
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
19397247
9585247
9812000
5934769
945775
6880544
2931456
376218
25145
401363
2530093
100
49.42
50.58
30.60
4.88
35.47
15.11
1.94
0.13
2.07
13.04
23135608
11346608
11789000
7502973
1070168
8573141
3215859
309174
50094
359268
285691
100
49.04
50.96
32.43
4.63
37.06
13.90
1.34
022
1.55
12.35
Net sales
Gross profit(A)
Operating expenses
Material consumption
Labor consumption
Operating profit(A-B) = C
Interest
Income tax
Net profit(C-D)
23135608
11346608
11789000
7502973
1070168
8573141
3215859
309174
50094
359268
285691
100
49.04
50.96
32.43
4.63
37.06
13.90
1.34
022
1.55
12.35
30451738
14813738
15638000
9816202
1192307
11008509
4629491
248357
93250
341670
4287884
100
48.65
51.35
32.24
3.92
36.15
15.20
0.82
0.31
1.22
13.98
INTERPRETATION
The sales have increased in 2004 compared to 2003 and the percentage of
gross profit to sales has remained the same this is due to the increase in the
cost of sales. The percentage of the cost of sales has remained constant. Since
there is no difference in the cost of sales the gross profit also remains same.
During the year 2004 and 2005 the sales has decreased from the previous
year. The cost of sales increased during the year 2005 when compared to 2004 this
gradually decreases the gross profit of the company. The gross profit of the
company for the year 2004 was 55% but during the year 2005 it was decreased to
49.98% this is due to the increase in the cost of sales of the company.
The sales in the 2006 was increased this is due to the demand for the
product in the market. The cost of sales was also increased due to the purchase
of raw materials.
Though the cost of sales is high the sales during the year 2006 was also
high this paved the way for the increase in the gross profit of the company.
The sales and the cost of sales were increased in the year 2007 this
indicates the greater demand for the product in the market. This leads to an
increase in the gross profit of the company.
The sales and cost of sales during the year 2008 was again increased because
of the demand and production of the goods in large volume. This again resulted in
the increase in the gross profit of the organization.
OPERATING EXPENSES
The operating expenses during the year 2003 was at 26.90% but it was
increased during the year 2004 to 28.41% this is due to the increase in the cost
of sales and due to the increased sales for the goods.
This increase was common for the rest of the years i.e. from 2005-2008 the
percentage of the operating expenses was increased to 34.48%,35.47%,37.06% and
36.15% respectively this increase was due to the gradual increase in the cost of
sales and increasing cost.
NET PROFIT
The net profit for the year 2004 was comparatively low when compared to that
of the profit of 2003. The net profit of the year 2004 was 23.11% but during the
year 2003 it was at 24.72% this was due to the increase in the cost of sales of
producing that product.
The net profit during the year 2004 was at 23.11% but during the year 2005
the net profit is further reduced to 12.80% which clearly indicates there is a
greater increase in the cost of sales of the product.
During the year 2005 to 2006 the net profit of the company was slightly
increased from 12.80% to 13.04% this is slight variance due to not much difference
in the cost of sales of 2005 and 2006.
During the year 2006 and 2007 the net profit of the company was again
decreased from 13.04% to 12.35% this may be due to the increase in the cost of
sales of the organization.
During the year 2007 and 2008 the net profit of the company was increased
from 12.35% to 13.98% this is because there is and increase in the gross profit
for the year 2008.
It can be concluded that the overall profitability of the company have been
increased the main reason for such decrease of profit is due to increase in the
cost of sales so the company should take immediate steps to control the cost of
sales in order to increase the profitability of the company.
SUMMARY AND CONCLUSION
• It was found that the gross profit ratio was high in the year 2004 which is
about (12.16%). Then it was considerably less because of the increasing cost or
decrease in sales. In the year 2006 it again showed some growth gradually of
(10.24%) then on the year 2006 it was (10.30%). At the end of 2008 March there is
a growth of (10.56%). This indicates there is an increase in sales or there is a
decrease in cost. To improve the gross profit the company should decrease its
cost and increase its sales.
• It was found that the net profit for the year 2004 was 1.81%, which shows
that there is better management efficiency. But in the next year it was down to
0.79% shows there was a poor efficiency in management but from that point the
organization followed a steep increase in the Net Profit. In the year 2004 It
raised to 1.17% and in 2007 it was at 2.2%. In the year 2008 the Net profit of
the company was the highest of 4.97%, which clearly indicates the operating
efficiency of the concern. The higher the Net profit the better is the operating
efficiency of the business concern.
• In 2004 the firm shows a high operating profit ratio of (8.89%) and this has
been decreased by the company because of low turn over of the company in the
remaining 2 years there is a slight increase in the operating profit in the year
2007 i.e.5.58% and in 2006 i.e.7.54% this shows that there is an increase in sales
which lead to a huge turnover.
• The firm’s current ratio of 3.06% in the year 2004 is better when compared
to other years. It implies that for every one rupee of current liability current
asset of 3.06% is available to meet them. The current ratio of the remaining
years is nearest to the idle ratio. Although there is a hard and fast rule
conventionally a current ratio of 2:1 considered to be satisfactory.
• As a rule of thumb or as a convention quick ratio of 1:1 is considered
satisfactory. Then the concern may able to meet its short-term obligations.
Here in the year the quick ratio was 1.90% then it gradually decreased. By the
year 2007 it was decr3eased to 0.49% and in 2008 was further reduced to 0.39% this
shows the company maintained an idle quick ratio of 1:1.
• The company has invested more in the year 2005 of rupees 6.38lakhs. The
investments show that it spent on the purchase of the assets for the company. In
the year 2004 it was at 4.38lakhs and in the year 2006, 2007 and 2008 it was at
5.07%, 4.54% and 3.72% respectively.
• The current asset ratio for the year 2004 was at 2.07% and for the year 2003
is was at 2.26% there is a slight increase in the current ratio every year in the
year 2006it was at 2.83% and in 2007 it further increased to 2.89%. The greater
the current asset turnover ratio is higher the profit of the company. So the
company experienced greater profitability in the year 2008 at 2.95%
• The fixed asset turn over ratio determines the efficiency of utilization of
Fixed Assets and the profitability of a business concern. In the year 2004 the
ratio is at 3.61% which indicates the assets were under utilized in the year 2005
it was at 4.16% which indicates there is a slight improvement in the utilization
of the assets. In the year 2006,2007 and 2008 it was gradually increased from
5.46%,6.40%and 7.56% which clearly indicates that year by year the utilization of
the assets where increased. So the profitability of the business concern is also
increased.
• During the year 2004 the total asset turnover ratio was at 1.26%. In the
year 2005 it was at 1.37% and in the year 2006 it increased to 1.76% this shows
the operational efficiency of the concern. The forthcoming years 2007 and 2008
the Total Asset Turnover Ratio was 1.91% and 2.04% respectively. This shows there
that the total assets of the company as contributed towards the total
profitability of the company.
• The working capital ratio measures the effective utilization of the working
capital. During the year 2004 the ratio was at 3.08% and in the next year it was
at 4.18. During the year 2006 and 2007 it increased to 5.08% and 7.72%. But in
the year 2008 the Working Capital Ratio was at it’s highest of 8.73, which
indicates the effective utilization of the working capital. The higher ratio
indicates that there is lower investment of working capital and more profits.
• This ratio indicates measures the liquidity of the receivables. During the
year 2004 the ratio was 7.78times in the year 2005 it increased to 9.26% from that
year the ratio decreased in the preceding year i.e., 9.04%, 6.78% and 5.98%
respectively. The higher the turnover ratio and shorter the average collection
period, better is the liquidity of the debtors.
During the year 2003 the general reserve was greater (12509crores) when
compared to 2004(8242crores) the general reserve for the year 2005 further
decreased to (8019crores). During the year 2006 the general reserve of the
company was increased to (8285crores) further during the year 2007 and 2008 teh
general reserves of the company was increased to 9497 and 15030 respectively. The
company maintained good reserves during 2007 and 2008.
CAPITAL
The share capital of the company has not changed for a longer period of
Time. Generally there is an overall increase in the total assets and liabilities.
• The net sales have increased from the year 2003 to 2004 by 3.77% it may be
due to the demand of the production of goods had increased or when production is
being increased.
• Cost of goods sold have increased form the year 2003 to 2004 by 4% this is
due to the increase in the cost of raw materials and much labor involved in the
production of goods.
• The gross profit has been increased form the year 2003 to 2004 by 3.58%.
• Operating expenses this includes the total operating expenses of the
company. Which have been increased by 9.70%.
• To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a decrease operating profit of 2.29% to the operating profit of
the company we add other income like interest and income tax. So that we arrive at
a decrease net profit of2.98%.
• The net sales have decreased from the 2004to2005 by 0.66% it may be due to
the surplus of production of goods or when the production is being decreased.
• Cost of goods sold have increased from the year 2004 to2005 by 10.09% this
is due to the increase in the cost of raw materials and much labor involved in the
production of goods.
• The gross profit has been decreased from the year 2004 to2005 by 9.50% this
may be due to the increase in the cost of goods.
• Operating expenses this includes the total operating expenses of the
company, which have been increased by 20.73%.
• To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a decrease operating profit of 41.86% to the operating profit
of the company we add other income like interest and income tax. So that we arrive
at a decrease net profit of 45.44%.
• The net sales have increased from the 2005 to 2006 by 21.59% it may be due
to the demand of the production of goods had increased or when the production is
being increased.
• Cost of goods sold have increased from the year 2005 to2006 by 20.13% this
is due to the increase in the cost of raw materials and much labor involved in the
production of goods.
• The gross profit has been decreased from the year 2005 to2006 by 23.95%.
• Operating expenses this includes the total operating expenses of the
company, which have been increased by 25.11%.
• To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a decrease operating profit of 18.48% to the operating profit
of the company we add other income like interest and income tax. So that we arrive
at a decrease net profit of 23.91%.
• The net sales have increased from the 2006 to 2007 by 19.27% it may be due
to the demand of the production of goods had increased or when the production is
being increased.
• Cost of goods sold have increased from the year 2006 to2007 by 18.38% this
is due to the increase in the cost of raw materials and much labor involved in the
production of goods.
• The gross profit has been increased from the year 2006 to2007 by 20.15%.
• Operating expenses this includes the total operating expenses of the
company, which have been increased by 24.60%.
• To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a increase operating profit of 9.70% to the operating profit of
the company we add other income like interest and income tax. So that we arrive at
a increase net profit of 12.90%.
• The net sales have increased from the 2006 to 2007 by 31.62% it may be due
to the demand of the production of goods had increased or when the production is
being increased.
• Cost of goods sold have increased from the year 2007 to2008 by 30.56% this
is due to the increase in the cost of raw materials and much labor involved in the
production of goods.
• The gross profit has been increased from the year 2007 to2008 by 32.65%.
• Operating expenses this includes the total operating expenses of the
company, which have been increased by 28.41%.
• To arrive at the operating profit we deduct the gross profit and operating
expenses so we get a increase operating profit of 43.96% to the operating profit
of the company we add other income like interest and income tax. So that we arrive
at a increase net profit of 49.05%.
CURRENT ASSETS
During the year 2003 to 2004 the current assets of the company has decreased
from 46.16% to 44.92% which indicates that some amount of cash is gone out of the
company.
During the year 2004 to 2005 the current assets of the company has decreased
from 44.92% to 41.72% which indicates that some amount has been spent for the
business or for purchase of any assets by the company.
During the year 2005 to 2006 the current assets of the company has increased
from 41.72% to 43.98% it indicates that some amount has been came in to the
business by the way of sale of fixed assets or turnover by the company
During the year 2006 to 2007 the current assets of the company has increased
from 43.98% to 49.63% which indicates that there is a sufficient cash and bank
balances in the company
• During the year 2007to 2008the current assets of the company has increased
from 49.63% to 56.87% which indicates that the company has good collection over
its debtors and also there is sufficient funds in the business
FIXED ASSETS
The percentage of fixed assets of the company has decreased from 28.79% to
25.37% during the year 2003 to 2004 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
The percentage of fixed assets of the company has decreased from 25.37% to
21.57% during the year 2004 and 2005 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
The percentage of fixed assets of the company has increased from 21.57% to
22.47% during the year 2005 to 2006 it indicates that the company has purchased
some fixed assets during the year and hence there is an outflow of cash.
The percentage of fixed assets of the company has decreased from 22.47% to
20.87% during the year 2006 to 2007 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
The percentage of fixed assets of the company has decreased from 20.88% to
19.96% during the year 2007 to 2008 it indicates that the company has not
purchased any fixed assets during the year and hence there is no cash out flow.
CURRENT LIABILITIES
The current liabilities of the firm have increased from 12.69% to 16.23%
which indicates that the company has not repaid its debts during the year 2004.
There is no outflow of cash during the year when compared to 2003.
The current liabilities for the year 2004 to 2005 have increased from 16.23%
to 20.52% which indicates that the company has not paid its debts or the amount
outstanding to them.
During the year 2005 to 2006 the current liabilities of the firm has
increased from 20.52% to 21.28% which indicates that the company has not paid its
debts.
During the year 2006 to 2007 the current liabilities of the firm has
increase from 21.36% to 33.69% which indicates that the company is still
outstanding to pay it debts.
The current liabilities for the year 2007 to 2008 have increased from 33.65%
to 40.70% which indicates that the company has not paid its debts or the amount
outstanding to them.
This indicates the poor policy for repaying its debts.
Comparing the total current assets and current liabilities it shows that the
working capital position of the company is not satisfactory.
Therefore it can be concluded that the financial policy of the concern is highly
unsatisfactory.
3.2 SUGGESTION
2) The company should apply tools, techniques and new technologies to increase
its profitability.
6) The company should reduce its cost of sales for producing single unit. This
will increase the profitability of the product.
3.3 CONCLUSION
3.4 BIBLIOGRAPHY
1996, 1st
Edition
.
1992, 7th
Edition.
1996,
4th Edition
4) Working capital management ………. R.A. Yadav
1986,
2nd Edition
2003,
7th Edition
1997,
4th Edition