PROJECT REPORT ON

RATIO ANALYSIS IN SUKJHIT STARTCH MILLS,

NIZAMABAD
Project Report submitted to J awaharlal Nehru Technological University,
Hyderabad,
In partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by:
Mr./Ms._____________________________
H.T.No._____________________________
Under the esteemed guidance of
Mr./Ms._________________________
Associate/Assistant Professor





DEPARTMENT OF BUSINESS MANAGEMENT
VIJAY RURAL ENGINEERING COLLEGE, NIZAMABAD
(Approved by AICTE, New Delhi and Affiliated to JNTU Hyderabad)
2012-2014




DECLARATION


I hereby declare that the work described in this project entitled --------------------------
---------------------------------------- carried out at -----------------------------------. which
is being submitted by me in partial fulfillment for the award of degree of Master of
Business Administration in the Dept. of Business Management ,Vijay Rural
Engineering College , Nizamabad to the Jawaharlal Nehru Technological University
Hyderabad, Kukatpally, Hyderabad (Telanagana.) -500 085, is the result of
investigations carried out by me under the Guidance of Mr./Ms. --------------------------
------------------.

The work is original and has not been submitted in full /partial for any
Degree/Diploma of this or any other university or institution.





Place: Signature
Date:
Name of the Candidate:
Hall Ticket No.:
Email-Id:












COMPANY CERTIFICATE




























CERTIFICATE

This is to certify that the project report entitled CUSTOMER RELTIONSHIP
MANAGEMENT BIG BAZAR is being submitted by Mr./Ms.------------------------------- (H.T.No.
------------------) in partial fulfillment for the award of the Masters Degree in Business
Administration (MBA) during the academic year 2014 to the JNTUH is a recorded of bonafide
work carried out by him/her under the guidance and supervision.
The results embodies in this project have not been submitted to any other university
or institute for the award of any degree or diploma.

Signature of the Internal guide Signature of the HOD
( ) ( )

Signature of the External Examiner Signature of the Principal
(Dr.B.R.VIKRAM)






ACKNOWLEDGEMENT

I take this opportunity to thank all who have rendered their full support to my
work. The pleasure, the achievement, the glory, the satisfaction, the reward, the
appreciation and the construction of our project cannot be thought without a few, how
apart from their regular schedule, spared a valuable time for us. This
acknowledgement is not just a position of words but also an account of the
indictment. They have been a guiding light and source of inspiration towards the
completion of the project.
I would like to express my hearted thanks to Mr. K.Narendhar Reddy Garu
Chairman, Mrs. Amrutha Latha Garu, Secretary and Dr. B.R.Vikram Garu,
Principal- Vijay Rural Engineering College for their kind consent to carry out this
project and also providing necessary infrastructure and resources to accomplish my
project work.
I express my profound sense of gratitude to Mr.---------------------------,
Associate Professor & Head of the Department of MBA, who has kindly permitted me
to do major project in any area of my choice and providing me all the facilities for the
project.
I am deeply indebted to my project guide Mr. ----------------------------,
Assistant Professor in Department of MBA for his valuable guidance, meticulous
supervision, support and sincere advice to complete the project successfully.
And I would like to express my sincere thanks to all the staff members of
MBA Department for their kind cooperation in completion of this project.
Finally, I thank to one and all those who have rendered help directly or
indirectly at various stages of the project and also my family members for their care
and moral support in finishing my project.

STUDENT NAME
H.T.NO
ABSTRACT























INDEX























LIST OF TABLES






















INTRODUCTION

As per mandatory requirement of JNTU University, I have undertaken this
project as a part fulfillment of Master of Business Administration curriculum within 3
months training at SUKJHIT STARTCH MILLS LIMITED.

Each management student learns a lot during his 2 years of MBA program, but
the perfection in his learning cant be even imagined until & unless there is a practical
training. The project provides required practical training to student

SELECTION OF THE TOPIC FOR STUDY
Topic selection is the one of the most or one of the important aspects of our
project. As it decides the course of action, to be followed. The topic selected should
be such that it helps in understanding the ratio concepts clearly, as was given the topic
by the company itself.

The topic given by my project guide was RATIO ANALYSIS AS
PER THE FINACIAL STATEMENT OF SUKJHIT STARTCH MILLS This
covers all the things related to the Ratio Analysis provided by the company.
OBJECTIVE OF THE STUDY
To be able to apply the theoretical knowledge obtained at the
institute in a practical manner in the actual business environment.
To get the knowledge about organizational problems, perceptions
and challenges.
To get an opportunity of real life business experience.
To interact with the managers of the company and gain
knowledge through their real life experience.


METHODOLOGY OF THE STUDY
The data collected for the project was in the form of written as well as verbal
information regarding ratio analysis of the company.
1) Primary data: -
The information about the Company is gathered from the discussion with the
employees/staff and from the web site of the Company.
2) Secondary data:-
The secondary data collected -
The balance sheets as on the date of 31
st
march for the years-
2010 2011
2011 2012
2012 - 2013
The methodology of this study has been adopted on the following basis:
Study of various Journals, Notes & Books.
Study through web-sites
Collection of Primary & Secondary data records of the organization.
Analysis of the collected data for its application.

LIMITATION OF THE STUDY
Generally company does not allow outsiders to conduct any study or research
work in company. Therefore, get the project done in company itself was very
difficult.
Due to confidentiality some important information, which are important for
the project, could not be collected.
Some of the information is lack of accuracy, due to which approximately
values were used for the analysis. Hence, the results also reveal approximate
values.

The project is based on theoretical guidelines and as per situations prevalent at
the time of practical training. Hence, it may not be apply to different situations.
The time span for the project was very short which was of 3 months, which
itself acts as a major constraint. Moreover, studying the guidelines and applied
it practically within such short time span was a task of great pressure.

UTILITY OF THE STUDY

MBAs are known for their presentation skills and practical touch to the theoretical
knowledge and are counted in the professionals.
A profession is source of livelihood based on substantial body of knowledge &
its formal acquisition through practical training & its test of success is the services
rendered & not the profit earned thereon.
It reveals that the canon of any profession is placed on the ground of
theoretical knowledge as well as practical training.
Thus it becomes evident that the efforts to prepare this project report are
certainly going to be proved as a concrete foundation for our future career.
Another aspect of this study is to get acquainted with ground reality in the
application of theoretical knowledge & to find out a way to tackle with the situations.








PROFILE OF COMPANY & INDUSTRY
The main unit of the company SUKJIT STARCH AND CHEMICAL LIMITED is
one of the leading starch mills in the country. It was started at PHAGWARA, Punjab
in the year 1943 with a tiny capacity of 5000 tons per annum.
Company has been a rapid growth rate. A part raising capacity at PHAGWARA to
50000 tons per annum and it is of the leading Manufactures of maize starch, modified
starch, liquid glucose dextrose, Monohydrate liquid, mate dextrin and in the country
It was started its unit in ANDHRA PRADESH at NIZAMABAD in December
1985. It has brought into its fold all the major consumers of list Products from south,
west and central India
It has come a long way but then it always believed sky the limits. As a result,
another unit, that is 3
rd
unit was established in WEST BENGAL at MALDA in the
year 2002 03 and it has also to increase its capacity at MALDA WEST BENGAL
IN 2010 -11
COMPANY MAIN AND BY
_
PRODUCTS
Starch is the main product of the company industrially it has many uses Ranging
from TEXTILES, PHARAMACETICLS, PAPER and ADHESIVES To SOAPS
major part of starch production is based on maize. Maize is wisely preferred because
of starch and low ash protein contents
By product of vital use are obtained during the well milling of maize
like corn sheep solids, maize oil gluten etc .years of research and coordination of
methodology has resulted in qualitatively superior product manufactured by cost
effective production techniques.
CONSUMERS OF SSCL:
In the past few years SSCL has bought into food all major consumers of its
products in south west and central India
The firms consumers include LOAY TEXTILES LIMITED, SAJJAN
TEXTILES LIMITEFD, MONA TEZTTILS LIMITED, MYSORE
Spinning and yeaning mills limited, VIRDHUNAGAR TEXTTLES
LIMITED, MSK mills and national textiles corporation mills.
The major customer of starch and special starches are I.T.C A.P paper
limited SIRPUR PAPERS MILL LIMITED India
Thus SSCL has grown by leaps and bounds by judicious and
innovative utilization of its unique traditions meet the challenges of the future
ACTIVITIES OF THE COMPANY:
The SSCL has been very conscious of its social Obligations and it has
sponsored the establishment development of two education institutions in phagwara
and has been making very generous contribution to the educational and charitable
institution in state and outside.
The company regularly organizes free eye camp and other such programs to promote
healthy social welfare To ensure efficient service to their esteemed consumers it has
established in own sales outlets in Mumbai KOLAKATA KANPUR equipped with
expanded well qualified marketing secedes network of Selling agencies and
consignors at other places of the company
The company has setup an research and development center in 1960 to
undertake independent and extensive research on maize and its The company vision
also recognized the importance of contributing to the needs of the society. Over the
year the sukjhit group has contributed funds towards rural development established
non-profit making schools, collages, blood banks, hospitals & preservation of
psychology
The major consumers for modified and special starches are
ITS BADRACHALAM LTD.
AP PAPER MILLS LTD.
SIRPUR PAPER MILL LTD
Detrain is mainly consumed by fire work industries and textile industries in south
India the major consumers of liquid glucose are:



NATUREFINE CONFECTIONARIES LTD
SOUBHAGYA CONFECTIONARAIES LTD.
HP CHEWING AND CONFECTIONARIES LTD
And also many small industries
Description about the companys main products and by products:
Starch is one of the most common substances in nature and is basic
constitutes.Industirally are uses being numerous which range from:
1. Textile.
2. Pharmaceuticals.
3. Paper.
4. Adhesive and soaps
5. Explosives and heavy engineering
Major parts of the words starch production is based on maize USA and CANADA
About 95% of starch extracted is obtained from maize while in EUROPE it is 65%
and it differs from country to country. In India too maize is widely preferred for
manufacturing starch because its high starch and wash and protein content

ORGANIZATION STRUCTURE OF SSCL:
The organization structure of ssm, Nizamabad is an establishment of departments
(or) branches for smooth running of organization The department are further
divided into sub- department on the basic of product (or)Production to be performed
Mr. Rajeev puri (vice president) at the top, manages the Whole organization, Mr.
Rajeev dua (Geranial manager ) turn assisted by Department heads SSCL,
Nizamabad has reviewed its organization structure from time Depending upon the
situation and need.
PRODUCTS THE COMPANY
Sukhjit has a diverse portfolio of modified starches for various applications. These
Products have been highlighted below
Pre-Gel Starch
Pre-gelatinized starch for spray is used to thicken instants desserts, allowing
the food to thicken with the addition of cold water or milk. Similarly, cheese sauce
granules (such as in Macron and cheese or lasagna) or grabby granules or sauces may
be thickness with boiling water without the product going lumpy. Commercial pizza,
toppings containing pre-gel starch will think when heated and become runty when
cooled. Apart from food l starch fine use in Textiles & Laundry Application due to its
properties of cold water solubility & good water absorption capabilities.
Cationic starch :
Cationic starch is produced by creation the slurry of partially swollen granules of
starch With a reactive compound. This reagent contains quaternary nitrogen, yielding
a Positive charge that is independent of PH. The reagent usually attaches to the starch
at the c6 position, the most accessible of charged OH groups. The reaction is usually
carried out in slurry, it is expected that the distribution of charged group will highly
non Uniform. Cationic starch finds extensive use in the paper industry and its key
functions are as a Dry strength additive, Emulsification of sizing efficiency at lower
alum level which ultimately heaps to reduce lining problem of paper.
Yellow dextrin:-
Yellow dextrin is manufactured by partially hydrolyzing starch, using the dry roasting
Method in the presence of a catalyst. The chemically reduces the starch Molecules
into smaller components. Used in the foundry as a binder for course. Yellow dextrin
helps in increasing dry strength at the same time being completely soluble in Water.
These products also find its application essential ingredient in various other
Applications, such as Adhesives, Gums, and Pastes Pyrotechnics



White dextrin:-
White dextrin is manufactured by partially hydrolyzing starch, using of a catalyst. The
Dextrinnisation chemically reuses the starch molecules into smaller components.
White Dextrin is white in color with reduced viscosities. Its cold water solubilitys
rang from 25% to 65% white detrin produces a light color paste that set to soft but
definite gels. Its Solution is half _ transport plaster. White dextrin has good
glutinosity and Resolution. It as an indispensable exception for medicine food and
health care industry. it is also used as an additive in the manufacture of textile,
Adhesive and Dyes.
Oxidized starch;-
Native starch is treated with a variety of oxidizing agent and oxidized starch as
are obtained Oxidized starches have shorter chain length then native starches. it
improves whiteness and reduces microbiological content. In addition the hydrogen
bonding reduces the the tendency to retro-gradation. Producing soft-bodied gels of
high clarity, oxidized are the best thickener for application requiring gels of low
rigidity. This improves adhesion on better and breading.
Diluted solution of highly oxidized starches remains clear on prolonged
storage, making them suitable for clear, canned soups and transparent confectionary
product. Oxidized starches also widely for paper industry and for wrap sizing in
textiles industry Lamination, paper containing paper Adhesive building materials.
Thin Boiling Starch:
This boiling starch has low and uniform viscosity which does not change
much with temperature unlike native starches which show wide variation in viscosity.
This boiling starches are manufactured b y acid addition no native starch slurry. Low
viscosity enables its uses in high concentration without the viscosity getting too high.
In some applications for example in instant soups, thin without any specific technical
function. Thin boiling starch non congealing characteristic readily dispersed in water
and can be boiled in to a smooth paste without any pretreatment. Its application in
yarn weaving is its flexible film gives the yarn the desired elasticity.

The main unit of the company SUKHJIT STARCH AND CHEMICAL LIMITED
is one of the leading starch mills in the country. It was started at PHAGWARA,
Punjab in the year 1943 with a tiny capacity of 5000 tons per annum.
Company has been a rapid growth rate. A part from raising capacity at PHAGWARA
to 50000 tons per annum and it is one of the leading manufacturers of maize starch,
modified starch, liquid glucose dextrose, monohydrate liquid, mate dextrin and sobital
in the country
It was started its unit in ANDHRA PRADESH at NIZAMABAD in December
1985. It has brought into ist fold all the major consumers of its products from south,
west and central India.
It has come a long way but then it always believed sky the limits. As a result,
another unit, that is 3
rd
unit was established in WEST BENGAL at MALDA in the
year 2002 03 and it has also has to increase its capacity at MALDA WEST
BENGAL IN 2010 -11
COMPANY MAIN AND BY PRODUCTS
Starch is the main product of the company industrially it has many uses ranging from
TEXTILES, PHARMACETICLS, PAPER, and ADHESIVES TO SOAPS major part
of starch production is based on maize. Maize is widely preferred because of starch
and low ash and protein contents.
By products of vital use are obtained during the well milling of maize like
corn sheep solids, maize oil gluten etc.
Years of research and coordination of methodology has resulted in
qualitatively superior product manufactured by cost effective production techniques.
CONSUMERS OF SSCL:
In the past few years SSCL has bought into fold all major consumers of its
products in south west and central India
The firms consumers include LOYAL TEXTILES LIMITED, SAJJAN TEXTILES
LIMITED, MONA TEXTTILES LIMITED, MYSORE spinning and yeaning mills
limited, VIRDHUNAGAR TEXTTILES LIMITED, MSK mills and national textiles
corporation mills.
The major customer of starch and special starches are I.T.C A.P paper limited
SIRPUR PAPER MILL LIMTED GLAXO India
Thus SSCL has grown by leaps and bounds by judicious and innovative
utilization of its unique traditions meet the challenges of the future
ACTIVITIES OF THE COMPANY:
The SSCL has been very conscious of its social Obligations and it has
sponsored the establishment development of two educations institutions in Phagwara
and has been making very generous contribution to the educational and charitable
institution in the state and outside. The company regularly organizes free eye camp
and other such programs to promote healthy social welfare
To ensure efficient service to their esteemed costumers it has established in
own sales outlets in Mumbai KOLAKATA KANPUR equipped with expanded well
qualified marketing decides network of selling agencies and consignors at other
places of the company
The company has setup an research and development center in 1960 to
undertake independent and extensive research on maize and its
The company vision also recognizes the importance of contributing to the
needs of the society. Over the years the Sukjit Group has contributed Funds towards
rural development establishing non-profit making school, colleges, blood banks,
hospital & preservation of psychology
Our Environmental Commitment

Sukhjit has strengthened its commitment to the environment by investing into state
of art facilities to convert its bio-degradable waste into valuable energy which over
the years has resulted in mammoth savings of petroleum products thereby reducing
the company's Carbon Footprint significantly.
Organization structure of SUKHJIT STRARCH MILLS LIMITED NIZAMABAD

is given above establishment of departments of branches for smooth functioning of
the orgnization.The departments are further divided into sub- department basic of
products of production to be performed. Mr. RAJEEV DUA is in turn assisted
by department heads SUKHIJIT STRARCH MILLS LIMITED NIZAMABAD has
reviewed its organization structure from time to pending upon the situation and
need. Organization structure of SUKHJIT STRARCH MILLS has been showed
above

The company continues to implement the code of Corporate Governance during the
year under reference in terms of Clause 49 of the Listing Agreement with Stock
Exchange.

The Company has always believed in good Corporate Governance, Transparency,
and Fair Business. Standard Corporate Practices held the company to maximize long
term Shareholders value & in building a bond of trust with its employees, customers,
creditors, lenders and others. The company has always remained prompt & regular
in discharging its statutory obligations & duties.

The board has constituted various committees & meetings of the Board and
Committees thereof have been held as frequently for proper and effective control
over the affairs of the Company. All the Directors attending the Board and
Committee meetings actively participate in the proceedings.

BOARD OF DIRECTORS
I.K.
Sardana
Managing Director S.C. Jindal Chairman
K.K.
Sardana
Joint Managing Director
A.K.
Sardana
Non Executive
Director
S.M.
Jindal
Executive Director &
Company Secretary

V.K.
Sardana
Non Executive
Director

V.P.
Kapahi
Independent
Director
S.K. Anand
Independent
Director

Naresh
Sardana
Non Executive
Director


We at Sukhjit Starch & Chem.Ltd. Have a strong R&D arm and because of this we
are in a position to be the preferred choice of our customers. The companys R&D
Hub is centered at Phagwara and is a resource centre for all its subsidiaries.
The notable R&D activities in the recent past which have yielded positive results
include:

1. Co developing high yielding varieties of maize with PAU, leading seed
companies and enterprising farmers.

2. Developing low cost solutions for the paper industry while reducing the
environmental impact for these customers.

3. Customizing sweetener solutions for customers.

4. Working with processed food manufacturers to reduce the overall fat/salt
content in producing healthier foods.

5. In providing solutions for sugar free applications for the confectionary
industry.

6. Developing specialized flavor encapsulation for extruded snacks.
7. Developing low moisture absorbing solutions for the Pharmaceutical industry.
The company is very proactive in its approach to the opportunities and challenges
that could arise in the future. The company executives keep a pulse on the changing
market place and the factors that influence them. Customer interaction, regulatory
trends, sustainable business models are just some of the aspects that Sukhjit reviews
on a continual basis.
Sukhjit is always innovating to create new products for its customers on a regular
basis. Coupled with the vast knowledge resource built up overtime and the technical
sales application in a variety of industries, the company is always working on novel
ideas that could pave the way for better solutions for our customers.
In view of amended Clauses 49 of the Listing Agreement, Board has duly
formulated a 'Code of Conduct' for Directors & Senior Managers as follows:

CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGERS

INTRODUCTION: This code shall apply to the directors and Members of the Senior
Management of The Sukhjit Starch & Chemicals Ltd. (the Company). This code sets
out standards that each Director/Senior Manager shall follow while discharging their
duties toward company.

"Senior Managers" shall mean those personnel of the company who are members of
the Core Management Team. The Directors & Senior Managers shall observe
highest standards of ethical conduct and integrity and shall be responsible for the
oversight of the Asset & Business Affairs of the company in an honest, fair and
diligent manner to the best of their ability and judgment. They shall be governed by
the rules & regulations of the Company as are made applicable to them from time to
time.

The Directors and Senior Managers shall affirm their compliance with this Code of
Conduct on yearly basis before the end of each financial year.
"CODE"

The directors & Senior Managers shall act honestly with reasonable degree of
care and diligence in the best interest of the Company as a whole.

The Directors & Senior Managers shall ensure that all the assets, properties &
services of the company are used efficiently for Company's business only or as
per the terms of appointment.

The Directors & Senior Managers shall not derive any direct of indirect benefit
from Company business associates which can in any manner be construed as
have given to gain favor in the past or future transactions of the Company.

The Directors & Senior Managers shall ensure security of all confidential
information available to them in the course of their service and they shall not
make any improper use of such information to gain personal advantage or
cause detriments to the Company.

No Director or Senior Manager other than designated spokesperson shall
release to the press or Media any information concerning any matter to the
Company.

No Directors or Senior Manager shall engage in any material business
relationship or activity which conflicts with their duty or cause detriments to
the Company.

No Senior Manager shall, without prior approval of the Managing director of
the company, accept any employment or a position of responsibility with any
organization for remuneration or otherwise. In case of Whole-time Directors,
such prior approval will be required from the Board of Directors.


The Directors & Senior Managers shall declare information about their
relatives (spouse, children & parents) employed in the Company.

The Directors & Senior Managers shall comply with the Company's Insider
Trading Code and provision of the SEBI (Substantial Acquisition of Shares &
Takeover) Regulations, 1997 while trading in company's securities at any time.

















DATA ANALYSIS AND INTERPRETATION
Ratio is simply one number expressed in terms of another; e.g. the current
assets and current liabilities of one company are Rs. 50000 and Rs. 30000
respectively. So the current assets to current liability ratio will be 5:3. Thus, ratio is
numerical presentation of two relevant items.
Ratio analysis involves the use of various methods for calculating and
interpreting financial ratios to assess the performance and status of the business unit.
It is a tool of financial analysis, which studies the numerical or quantitative
relationship between two variables or items.
Definition:-
A ratio analysis is a technique of ascertaining and interpreting the numerical
relationship of the two relevant items presented in the financial statement.
INTRODUCTION TO RATIO ANALYSIS
CLASSIFICATION OF RATIOS
Functional classification.
Now, Functional Classification is discussed brief
FUNCTIONAL CLASSIFICATION:-
The functional classification of ratios considers the basic aspects of business
activity as under:
a) Liquidity Ratio
b) Profitability Ratio
c) Activity Ratio or Turnover Ratio
d) Leverage Ratio or Solvency Ratio

Liquidity: -
Its ability to maintain positive cash flow, while satisfying immediate
obligations.
Profitability:-
Its ability to earn income and sustain growth in both short term and long term.
A companys degree of profitability is usually based on the income statement, which
reports on the companys result of operations.
Activity Ratio or Turnover Ratio:-
Which measure the efficient utilization of fixed and current assets.
Leverage Ratio or Solvency Ratio:-
Its ability to maintain positive cash flow, while satisfying immediate
obligations.
Each group is discussed in detail as under:-
A) Liquidity Ratio:-
As noted above, these ratios measure the liquidity position of the
company, in liquidity ratio there are two types:-
a) Current Ratio
b) Liquid Ratio or Acid Test Ratio

a) Current Ratio :-
Current ratio measures the inter-relationship between current
assets the current liabilities. It is also known as working capital ratio.
It is ascertained as under
Current Ratio = Current assets / Current liabilities

b) Liquid Ratio:-
The quick ratio is sometimes called the acid-test ratio and is one of
the best measures of liquidity. It is figured as shown below:
Quick Ratio = Current Asset - Inventory
---------------------------------------
Current liabilities
The quick ratio is a much more exacting measure than the current ratio. By
excluding inventories, it concentrates on the really liquid assets, with value that is
fairly certain. It helps answer the question.
An acid test of 1:1 is considered satisfactory unless the majority of your
quick ratios are in accounts receivable, and the pattern of accounts receivable
collection lags behind the schedule for paying current liabilities.
Acid-test ratio is ascertained as under
Acid-test ratio = Liquid assets / Liquid liabilities
B) Profitability ratio:-
Profitability ratios are important because that touch the basic objective of
business activity. Generally following profit ratios are ascertained for the purpose of
interpretation of financial statements.
1. Gross profit ratio: - This is popularly known as G.P ratio, is ascertained as
under:-

G.P. ratio = Gross profit
------------------- X 100
Sale

G.P. = Sales - Cost of goods sold.

2. Net profit ratio: - Popularly known as N.P. ratio, considers the net profits to
sales as under:
N.P. ratio = Net profits
------------------ X 100
Sales
Net profit = Sales operating expenses.
As this is profitability ratio, higher the N.P. ratio better will be the profitability on
sales.

3. Return capital employed: - It is also called as rate of return.
It is ascertained as under:

Rate on capital employed = Net profit Preference dividend
----------------------------------------- X100
Equity capital

C) Activity Ratio or Turnover Ratio:-

Activity ratios are the productivity ratio which measure the relationship of output
(i.e. sales) and Inputs (i.e. individual assets).

The following are the important turnover ratio:
a) Inventory turnover ratio:-
It is also known as stock turnover ratio.
This ratio is measure the average investments in inventory in relation to cost of goods
sold.
It is ascertained as under:
Inventory turnover ratio = Cost of goods sold
--------------------------------
Average inventory
Cost of goods sold = sales - Gross profits
Average inventory = Opening inventory + closing inventory
-------------------------------------------------------
2
b) Assets turnover ratio:-
This ratio indicates the efficient utilization of all assets; i.e. fixed assets and
current assets. It is also called as Capital turnover ratio.
It is ascertained ad under:
Asset turnover = Sales/ Total assets.
Total assets =Fixed assets + Current assets.
c) Fixed asset turnover ratio: -
Among the total capital employed in the form of total assets, this ratio
measures the contribution of fixed assets in sales and the resultant profitability.
It is ascertained as under:-
Fixed asset turnover ratio = Sales / Total fixed assets.
D) Leverage ratio:-
Leverage ratio measures the use of fixed-interest-bearing securities in
magnifying the return on equity capital. It is also called as financial leverage on
trading in equity or debt-equity ratio or capital-gearing ratio.
It is ascertained as under:-
Debt- Equity ratio = Long term debt/ Equity (net worth)
Thus net worth = Equity capital + Reserves.


D) Proprietary ratio:
This ratio measures the proportionate contribution of proprietor in the total assets.
It is ascertained as under:-
Proprietary ratio = Proprietors fund/ Total assets.
E) Valuation ratio:-
It is also called as pricing ratio. The following are the important valuation
ratio:
Earnings per share (EPS):
EPS is nothing but return on equity as measured in terms of each share.
It is ascertained as under:-
EPS = Net profits - Preference dividend
------------------------------------------------
Number of equity shares


1) Gross Profit : Gross Profit is net of Depreciation but before interest.

2) Net Profit : Operating Profit minus provision for Tax.
(Profit after Tax)

3) Current Assets :
Inventories + Debtors + B.R. + Advances + Cash & Bank
Balances
4)
Current
Liabilities :
Current Liabilities & Provisions + Bank borrowing for
working capital.

5) Capital Employed : Net Fixed Assets + Current Assets - Current Liabilities.

6) Net Worth :
Share Capital + Reserve & Surplus - Pre-operative
Expenses

7) Turnover : Sales/Assets.

8) Debt/Equity Ratio :
The ratio of debentures & long term borrowings to Net
Worth.

9) Proprietary Ratio : Total Assets/Shareholders fund.
Analysis of data and its Presentation
Balance Sheets
(In Lacs)
2011 2012 2013
ASSETS :
Fixed Assets (Net) 458.73 414.89 388.34
Investments 0.55 0.55 0.55
CURRENT ASSETS, LOANS &
ADVANCES :
Inventories 139.60 187.66 164.61
Debtors (Excl. B/D) 423.78 450.72 481.64
Bills Receivable 73.37 18.35 14.69
Cash & Bank 87.94 26.74 69.60
Loans & Advances 53.05 77.44 65.69
Misc. Expenses 0.00 6.32 0.00

TOTAL ASSETS 1237.02 1182.67 1185.12

LIABILITIES :
Share Capital 149.91 149.91 149.91
Reserves & Surplus 467.53 480.97 504.57
Cash credit 51.33 26.60 22.94
Bills Receivable 73.37 18.35 14.69
Other Secured Loan 5.58 0.00 0.00
Unsecured Loan 160.95 119.15 120.12
Current Liabilities & Provision 328.35 387.69 372.89

TOTAL LIABIILITIES 1237.02 1182.67 1185.12

CURRENT ASSETS
Inventories 139.60 187.66 164.61
Debtors (Excl. B/D) 423.78 450.72 481.64
Bills Receivable 73.37 18.35 14.69
Cash & Bank 87.94 26.74 69.60
Loans & Advances 53.05 77.44 65.69
Total Current Assets 777.74 760.91 796.23

QUICK ASSETS
Total Current Assets 777.74 760.91 796.23
Less : Inventory 139.60 187.66 164.61
Total Quick Assets 638.14 573.25 631.62

CURRENT LIABILITIES
Cash credit 51.33 26.60 22.94
Bills Payable 73.37 18.35 14.69
Current Liabilities & Provision 328.35 387.69 372.89
Total current liabilities 453.05 432.64 410.52
(In Lacks)
NET WORTH
Share Capital 149.91 149.91 149.91
Reserves & Surplus 467.53 480.97 504.57
617.44 630.88 654.48
Less : Misc.exps W/off 0.00 6.32 0.00
Total Net Worth 617.44 624.56 654.48

CAPITAL EMPLOYED
Net Fixed Assets 458.73 414.89 388.34
Current Assets 777.74 760.91 796.23
1236.47 1175.80 1184.57
Less : Current Liabilities 453.05 432.64 410.52
Misc.exps. W/off 0.00 6.32 0.00
Total capital Employed 783.42 736.84 774.05

TOTAL DEBT
Long term secured loans 5.58 0.00 0.00
Long term unsecured loans 160.95 119.15 120.12
Total Debt 166.53 119.15 120.12

INVENTORY
Raw materials 54.58 107.62 81.64
Work in process 61.14 61.74 59.61
Finished Goods 6.21 9.47 14.01
Stores & spares 17.67 8.83 9.35

Total Inventory 139.60 187.66 164.61

AVERAGE INVENTORY
Raw materials 61.58 81.10 94.63
Work in process 59.39 61.44 60.68
Finished Goods 10.27 7.84 11.74
Stores & spares 20.03 13.25 9.09
Total Average Inventory 151.27 163.63 176.14

AVERAGE DEBTORS 542.22 483.11 482.70
Financial Performance
(In lakhs)
2011 2012 2013
1) FINANCIAL PERFORMANCE :
Gross Sales 2727.60 2421.42 2470.35
Net Sales 2255.97 1994.37 2041.62
Other Income 13.65 8.51 6.65
Previous Years Adjustments 7.85 2.22 4.38
Total Income 2277.47 2012.10 2052.65
Profit before int.& Depr (PBDIT) 99.92 81.12 109.46
Gross Profit (PBIT) 47.40 29.60 58.17
Operating Profit (PBT) 27.04 22.43 54.94
Net Profit ( PAT) 21.04 11.43 31.94


LIQUIDITY RATIO
1) Current ratio
2) Quick ratio

CURRENT RATIO
The current ratio is another test of a companys financial strength. The current
ratio by dividing the total current assets by the total current liabilities.
Current Ratio = Current assets / Current liabilities



Calculation of ratios:-

2011 = 777.74 / 453.04
= 1.72
2012 = 760.91 / 432.64
= 1.76
2013 = 796.23 / 410.52
= 1.96

Reporting of Ratios:-

Particulars 2011 2012 2013
Current Ratio 1.72 1.76 1.96










CURRENT RATIO
1.6
1.65
1.7
1.75
1.8
1.85
1.9
1.95
2
2011 2012 2013
YEAR
RATIO
Comment:-
1) Thus it has a moderate and sufficient asset to be converted into cash
in order to the companys debts as and when required.
2) But it can be seen that the current ratio has been increased from 1.72 to
1.96.
Quick Ratio
Quick Ratio = Current Asset - Inventory
---------------------------------------
Current liabilities
Calculation of ratio:-
2011 = 638.14 / 453.05
= 1.41
2012 = 573.25 / 432.64
= 1.33
2013 = 631.62 / 410.52
= 1.54

Reporting of Ratios:-
Particulars 2011 2012 2013
Quick Ratio 1.41 1.33 1.54











Comment:
1) Quick ratio measures your ability to access cash quickly to support immediate
demands. Also known as the acid test, the quick ratio divides current assets excluding
inventory by current liabilities.
2) In our case, we can see that the ratio is continuously growing and it is above one
which shows high liquidity.
LEVERAGE RATIOS
1) Debt Equity ratio
2) Proprietary ratio

DEBT EQUITY RATIO:-
Debt- Equity ratio = Long term debt / Equity (net worth)
Calculation of ratio:-
2011 = 166.53 / 617.44
= 0.27
QUICK RATIO
1.2
1.25
1.3
1.35
1.4
1.45
1.5
1.55
1.6
2011 2012 2013
YEAR
RATIO
2012 = 119.15 / 624.56
= 0.19
2013 = 120.12 / 654.48
= 0.18

Reporting of Ratios:-
Particulars 2011 2012 2013
Debt equity Ratio 0.27 0.19 0.18



DEBT- EQUITY
0
0.05
0.1
0.15
0.2
0.25
0.3
2004 2005 2006
YEAR
R
A
T
I
O
Comment:-
1) The debt equity ratio shows the relative contribution of creditors
and owners. Lower the ratio higher is the degree of protection enjoyed by
the creditors.
2) Thus we can see that the debt equity ratio of the organization is
decreasing, increasing the protection of creditors.
PROPRIETARY RATIO
Proprietary ratio = Proprietors fund / Total assets.
Calculation of ratio:
2011 = s617.44 / 1237.02
= 0.50
2012 = 654.56 / 1176.45
= 0.53
2013 = 654.48 / 1158.12
= 0.55


Reporting of Ratios:-
Particulars 2011 2012 2013
Proprietary ratio 0.50 0.53 0.55








Comment:-
1) The proprietary ratio indicates the financial position of the
company.
2) Higher the proprietary ratio stronger the financial position.
3) In our case, proprietary ratio not so stronger but growing
continuously, it means company is moving towards sound
financial position.

PROFITABILITY RATIOS:-
1) Gross profit margin
2) Net profit margin
Return on capital employed
GROSS PROFIT:-
G.P. ratio = Gross profit
-------------------- X 100
Sale
PROPRIETORY
0.47
0.48
0.49
0.5
0.51
0.52
0.53
0.54
0.55
0.56
2011 2012 2013
YEAR
RATIO
Calculation of ratio:-
2011 = 47.40 / 2255.97 X 100
= 2.10 %
2012 = 29.60 / 1994.37 X 100
= 1.48 %
2013 = 58.17 / 2014.62 X 100
= 2.85 %

Reporting of Ratios:-
Particulars 2011 2012 2013
Gross Profit 2.10 1.48 2.85









GROSS PROFIT
0
0.5
1
1.5
2
2.5
3
2011 2012 2013
Year
Ratio

Comment:-
1) The G.P. margin should be stable because it is directly with sales.
2) The ratio measure efficiency of the companies operation and this
can also be compared with the previous years.
3) Here, by comparing the performance of G.P. ratio is better than
previous year. It means, the efficiency of operations is increased.

Net profit ratio:-
N.P. ratio = Net profits
--------------------- X 100
Sales
Net profit = Sales operating expenses.
Calculation of ratio:-
2011 = s21.04 / 2255.97 X 100
= 0.93 %
2012 = 11.43 / 1994.37 X 100
= 0.57 %
2013 = 31.94 / 2014.62 X 100
= 1.56 %


Reporting of Ratios:-
Particulars 2011 2012 2013
Net profit 0.93 0.57 1.56



Comment:-
1) The ratio is design to focus attaint ion on net
profit margin arising from business operation.
2) The ratio could be compare with that of the
previous year.
3) So here, we can observe the volatility in N.P.
ratio which was very low in 2012 but good
recovery in 2013.


NET PROFIT
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2011 2012 2013
YEAR
RATIO
Return capital employed: -
Return on equity capital = Net profit
------------------------------- X 100
Equity Capital
Calculation of ratio:-
2011 = 21.04 / 149.91 X 100
= 14.04 %
2012 = 11.43 / 141.91 X 100
= 7.62 %
2013 = 31.94 / 149.91 X 100
= 21.31 %

Reporting of Ratios:-




Particulars 2011 2012 2013
Return capital employed 14.04 7.62 21.31

Comment:-
1) The strategic aim of a company is to earn a return on capital

2) By analyzing the return on capital employed ratio of the year 04-05
and 06, we can say that except 2012

the company has earned good
amount of return on Investments.

3) TURN OVER RATIO
1) Inventory turnover ratio

2) Assets turnover ratio

3) Fixed assets turnover ratio

INVENTORY TURNOVER RATIO:-
Inventory turnover ratio = Cost of goods sold
----------------------------
Average inventory
RETURN ON CAPITAL EMPLOYEED
0
5
10
15
20
25
2011 2012 2013
YEAR
RATIO
Cost of good sold = Sales - Gross profits
Average inventory = Opening inventory + closing inventory
--------------------------------------------------------
2
Calculation of ratio:-
2011 = 2255.97 / 151.27
= 14.91
2012 = 1994.37 / 163.63
= 12.19
2013 = 2041.62 / 176.14
= 11.59

Reporting of Ratios:-









Comment:-
Particulars 2011 2012 2013
Inventory turnover ratio 14.91 12.91 11.59
INVENTORY TURN OVER
0
2
4
6
8
10
12
14
16
2011 2012 2013
YEAR
RATIO
1) Most of the capital is lock up in the inventory of manufacturing
companies.
2) It is important to take at watch on inventory turnover ratio to ensure the
level of the stock which is should be kept as low as possible.
3) In our case, we can see that day by the ratio is going down which means
the stock turnover period is higher than previous which may be harmful
for the company.

ASSET TURNOVER RATIO:-
This ratio indicates the efficient utilization of all assets; i.e. fixed assets and
current assets.
Asset turnover = Sales / Total assets.
Total assets = Fixed assets + Current assets.
Calculation of ratio:-
2011 = 2255.97 / 1237.02
= 1.82
2012 = 1994.37 / 1176.35
= 1.70
2013 = 2041.62 / 1185.12
= 1.72

Reporting of Ratios:-
Particulars 2011 2012 2013
Assets turnover ratio 1.82 1.70 1.72











Comment: -
1) This ratio indicate the efficient utilization of all assets; i.e. fixed assets
and current assets. It is also called as Capital turnover ratio.
2) Higher the ratio indicates the over utilization of assets a medium ratio
means an optimum utilization of assets and lower ratio indicates idle capacity.
3) In our case, the ratio is going down which means there may be fear of
assets remaining idle, if proper utilization is not carried.
Fixed asset turnover ratio:-
Fixed asset turnover ratio = Sales / Total fixed assets.
Calculation of ratio:-
2011 = 2255.97 / 4587.73
= 4.92
2012 = 1994.37 / 451.89
ASSET TURN OVER
1.64
1.66
1.68
1.7
1.72
1.74
1.76
1.78
1.8
1.82
1.84
2011 2012 2013
YEAR
RATIO
= 4.81
2013 = 2041.62 / 388.34
= 5.26

Reporting of Ratios:-
Particulars 2011 2012 2013
Fixed assets ratio 4.92 4.81 5.26









Comment:-
1) Among the total capital employed in the form of total assets, this ratio
measures the contribution of fixed assets in sales and the resultant
profitability.
2) It is difficult to interpretation ratio as assets value based on historic
cost.
3) Stable ratio can be taken, as a positive indicator in our case there is no
much difference..
FIXED ASSET TURN OVER
4.5
4.6
4.7
4.8
4.9
5
5.1
5.2
5.3
2011 2012 2013
YEAR
RATIO
VALUATION RATIO: EARNING PER SHARE:-
EPS = Net profits - Preference dividend
--------------------------------------------
Number of equity shares
Calculation of ratio:-
2011 = 21.04 / 15
= 1.40
2012 = 11.43 / 15
= 0.76
2013 = 31.49 / 15
= 2.53

Reporting of Ratios:-
Particulars 2011 2012 2013
Earning per share 1.40 0.76 2.13







Comment:-
E P S
0
0.5
1
1.5
2
2.5
2011 2012 2013
YEAR
RATIO
1) Higher the EPS is makes the company more attractive.
2) In last year the company was having good EPS. It means, it can
attract more funds from shareholders.

































Conclusions:
In this project,
I reviewed following areas of financial ratio analysis research:
The functional form of the financial ratios, i.e. the proportionality discussion
Classification of financial ratios.

It is obvious that the existing main research areas in financial ratio analysis are
fairly separate from each other sometimes with traditions of their own.
The research on the functional form of financial ratios has been characterized
by theoretical discussions about the ratio format in financial ratio analysis and
empirical testing of the ratio model. We conclude from the review that the
proportionality assumption for financial ratios is stronger within an industry
Moreover; proportionality varies from ratio to ratio, and between times, periods
indicating problems in temporal stability.
















RECOMMENDATIONS AND SUGGETIONS
Followings are the suggestions made on the basis of study made:
1) The current ratio is means to the near to the standard current ratio 2:1 but still
main point management should consider is that there is very high amount
blocked in debtors as well as the current liabilities and provisions are pending
is high.

2) Management used to concentrate on the profitability of the company as gross
profit ratio and net profit ratio indicates very low profitability.

3) Management also needs to concentrate on sales as indicated low with respect
to turnover ratios.
















BIBLIOGRAPHY:

SL.NO. AUTHOR NAME BOOK NAME PUBLICATION
1. M.Y.KHAN & JAIN MANAGEMENTACCOUNTING Tata
McGraw-Hill

2. R.P. & MANOJ TRIVEDI MANAGEMENT ACCOUNTING PANKAJ

3. I.M. PANDAY FINSNCIAL MANAGEMENT VIKAS

4 Dr.S. N.MAHESHWARI MANAGEMENT ACCOUNTING Sultan Chand
& Sons

5. PRASANNA CHANDRA Financial Mgt. Theory & Practices Tata
McGraw-Hill


WEB SITES
1. WWW.sukhjitgroup.com
2. www.sukhjitstarch & chemical.com