Financial Performance

INDEX
S.No:
1
CHAPTER
PAGE NO.
CHAPTER-1
01-8
INTRODUCTION
Scope of the Study
Objectives of the Study
Methodology of the Study
Limitations of the Study
2
9-28
CHAPTER-1I
INDUSTRY PROFILE &
COMPANY PROFILE
29-55
CHAPTER-1II
REVIEW OF LITERATURE
56-76
CHAPTER-1V
DATA ANALYSIS AND
INTERPRETATION
77-81
CHAPTER-V
FINDINGS
SUGGESTIONS
CONCLUSION
BIBLIOGRAPHY
ABSTRACT
A financial performance (or financial report) is a formal record of the

financial activities of a business, person, or other entity.
For a business enterprise, all the relevant financial information, presented in a
structured manner and in a form easy to understand, are called the financial
performance.
For large corporations, these performance are often complex and may include an
extensive set of notes to the financial performance and performance discussion and
analysis. The notes typically describe each item on the balance sheet, income
statement and cash flow statement in further detail. Notes to financial performance
are considered an integral part of the financial performance.
Purpose of financial performance by business entities
"The objective of financial performance is to provide information about the

financial position, performance and changes in financial position of an enterprise
that is useful to a wide range of users in making economic decisions." Financial
performance should be understandable, relevant, reliable and comparable. Reported
income and expenses are directly related to an organization's financial performance.
Financial performance are intended to be understandable by readers who have "a
reasonable knowledge of business and economic activities and accounting and who
are willing to study the information diligently.
CHAPTER-I
INTRODUCTION
INTRODUCTION
In our present day economy, FINANCE is defined as the provision of money at

the time when it is required. Every enterprise, whether big, medium of small, needs
finance to carry on its operations and to achieve its targets.
Finance is so indispensable today that it is the lifeblood of an enterprise. Without
adequate finance, no enterprise can possibly accomplish its objectives.
Finance is the life blood and nerve system of any business organization. Just as
circulation of blood, is necessary in the human body to maintain life. Finance is necessary
in the business org. for smooth running of the business.
Financial management involves managerial activities concerned with the
procurement and utilization of funds for business purpose the finance function does with
procurement of money taking in to consideration of todays as well as future need and its
effective utilization. Since finance is required to purchase of machinery and raw
materials, to pay salaries and wages also for day-to-day expenses.
Financial management entails planning for the future of a person or a business
enterprise to ensure a positive cash flow. It includes the administration and maintenance
of financial assets. Besides, financial management covers the process of identifying and
managing risks.
The primary concern of financial management is the assessment rather than the
techniques of financial quantification. A financial manager looks at the available data to
judge the performance of enterprises. Managerial finance is an interdisciplinary approach

that borrows from both managerial accounting and corporate finance.
Some experts refer to financial management as the science of money management. The
primary usage of this term is in the world of financing business activities. However,
financial management is important at all levels of human existence because every entity
needs to look after its finances.
Financial Management: Levels
Broadly speaking, the process of financial management takes place at two levels. At the
individual level, financial management involves tailoring expenses according to the
financial resources of an individual. Individuals with surplus cash or access to funding
invest their money to make up for the impact of taxation and inflation. Else, they spend it
on discretionary items. They need to be able to take the financial decisions that are
intended to benefit them in the long run and help them achieve their financial goals.
From an organizational point of view, the process of financial management is associated
with financial planning and financial control. Financial planning seeks to quantify various
financial resources available and plan the size and timing of expenditures. Financial
control refers to monitoring cash flow. Inflow is the amount of money coming into a
particular company, while outflow is a record of the expenditure being made by the
company. Managing this movement of funds in relation to the budget is essential for a
business.
At the corporate level, the main aim of the process of managing finances
5
Is to achieve the various goals a company sets at a given point of time. Businesses also
seek to generate substantial amounts of profits, following a particular set of financial
processes.
Financial managers aim to boost the levels of resources at their disposal. Besides,
they control the functioning on money put in by external investors. Providing investors
with sufficient amount of returns on their investments is one of the goals that every
company tries to achieve. Efficient financial management ensures that this becomes
possible.
SCOPE OF THE STUDY

The scope of the study is to find out financial performance of INS. For the past
four years. A sincere attempt has been made to include all the aspect relating to the study.
For this purpose analysis of financial performance of the company has done from the last
four years published financial statement and all aspects the researcher should be included
in the report.
NEED FOR STUDY
Need of financial management study to diagnose the information contain in

financial statement. So as to judge the profitability and financial position of the
firm.
Financial analyst analyses the financial statements with various tools of analysis
before commanding upon the financial health of the firm.
Essential to bring out the history.
Significance and meaning of the financial statements.
OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS

1. To estimate the earnings capacity of the firm.
2. To gauge the financial position and financial performance of the firm.
3. To determine the long-term liability of the funds as well as solvency.
4. To decide about the future capacity of the firm.
5. To decide about the future prospects of the firm.
RESEARCH METHODOLOGY
RESEARCH DESIGN
This is a systematic way to solve the research problem and it is important

component for the study without which researches may not be able to obtain the format.
A research design is the arrangement of conditions for collection and analysis of data in a
manager that aims to combine for collection and analysis of data relevance to the research
purpose with economy in procedure.
MEANING OF RESEARCH DESIGN

The formidable problem that follows the task of defining the research problem is
the preparation of design of the research project, popularly known as the research design,
decision regarding what, where, when, how much, by what means concerning an inquiry
of a research study constitute a research design. A research design is the arrangement of
conditions for collection and analysis of data in a manager that aims to combine for
collection and analysis of data relevance to the research purpose with economy in
procedure.
SOURCES OF DATA
Data we collected based on two sources.
Primary data.
Secondary data.
Primary data
The Primary data are those informations, which are collected afresh and for the
first time, and thus happen to be original in character.
Secondary Data:
The Secondary data are those which have already been collected by some other
agency and which have already been processed. The sources of Secondary data are
Annual Reports, browsing Internet, through magazines.
1. It includes data gathered from the annual reports of the company.

2. Articles are collected from official website of the company.
METHODOLOGY USED:
1.TYPES OF FINANCIAL STATEMENTS ADOPTED:
Following two types of financial statements are adopted in analyzing the firm
financial position
a. BALANCE SHEET.
b. Profit and Loss statements.
2.TOOLS OF FINANCIAL STATEMENT ANALYSIS USED

The following financial analysis tools are used in order to interpret the financial
position of the firm.
LIMITATIONS OF FINANCIAL STATEMENT:

1. ONLY INTERIM REPORTS:
Only interim statements dont give a final picture of the concern. The data given
in these statements is only approximate. The actual position can only be determined when
the business is sold or liquidated.
2. DONT GIVE EXTRA POSITION:

The financial statements are expressed in monetary values, so they appear to give
final and accurate position. The values of fixed assets in the balance sheet neither
represent the value for which fixed assets can be sold nor the amount which will be
required to replace these assets.
3. HISTORICAL COSTS:
The financial statements are prepared on the basis of historical costs or original
costs. The value of assets decreases with the passage of time current price changes are not
taken into account. The statements are not prepared keeping in view the present economic
conditions. The balance sheet loses the significance of being an index of current
economic realities.
4. ACT OF NON MONITORY FACTORS IGNORED:

There are certain factors which have a bearing on the financial position and
operating results of the business but they dont become a part of these statements because
they cant be measured in monetary terms. Such factors may include in the reputation of
the management.
NO PRECISION:
The precision of financial statement data is not possible because the statements
deal with matters which cant be precisely stated. The data are recorded by conventional
procedures followed over the years. Various conventions, postulates, personal judgments
etc.
10
CHAPTER-II
INDUSTRY PROFILE
&
COMPANY PROFILE
11
Welcome to Integral Network Solutions

Overview of SAP history and evolution of SAP BW/BI
product is briefed. In a SAP life we are full time
user/developer of SAP and we have spent lot of time in
understanding the components and features of SAP but in
this competitive environment I don't know how many
people tried to know about the history of SAP.
Currently we operate as three strategic business units focusing on IT Training, IT

Services and IT Staffing. Our technological expertise, high quality standards, creativity
and efficiency are combined in our services to deliver maximum value to our customers.
12
Our Story so far

INS was founded by JDR in the year 2009 based at the City of Destiny Bangalore and
we aim to become one of the premium recruitment and manpower solutions. We provide
talent management solutions across a number of verticals and cater to range clients from
young dynamic companies to Fortune 500 companies. Our result-oriented approach has
also helped us earn nearly 100% clients referrals.
Our Strengths
INS specializes in helping clients quickly within defined turn-around time to costeffectively meet their hiring needs for various levels across all management disciplines
and across industries with quality professionals on a permanent as well as contract basis.
INS supports clients with round the-clock solutions in talent management solutions
covering all the core management disciplines across a multitude of industry domains.
TRAINING
INS has been established with primary objective in IT training services to support in
various Core business organizations.Job development and training professionals
typically
possess
company
knowledge,
instructional
design
and
curriculum
development expertise as well as effective presentation and facilitation skills. Our Team
13
demonstrates strong skills in project management, team building, and problem solving
and communications skills. Determines the training needs of slot and systems customers
and employees and oversees the development of courses to meet those needs. Ensures
company trainers are able to expertly and effectively communicate key information to
customers as well as other company personnel. Responsible for developing and
maintaining standards, meeting prescribed timelines, developing and meeting budgetary
objectives, continuous improvement of department operations, developing strategic
plans to meet company goals, and managing assigned staff. Creates a highly effective
training team that conducts group and one-on-one training in the office and at customer
sites. Build, develop and administer life cycle training program that certifies ongoing
position growth within the company, and tracks progress toward learning objectives.
Determines future course offerings to improve the technical knowledge of employees
and to satisfy the customer demand for advanced training.
SERVICES
Our
Team
INS, the leader provider of talent management solutions, prided itself in building a team
of recruitment professionals who have established a global reputation for excellence.
Our recruitment specialists have been successfully providing quality placements in
multiple markets and industries for over a decade. Our team of recruitment
professionals, over the years, as built strong and time-tested relationships with the best
in class talent across verticals so that we can provide the best quality talent solutions on
time
and
on
demand.
As a leading Talent Management Solution firm, we at INS Consulting:

Recognize that each organization has unique challenges and create Talent Management
14
solutions that are best suited for them. Provide an outside perspective to complement
your internal human resources (HR) efforts. Deliver innovative human resources and
change management solutions that provide measurable and cost-efficient results. Design
solutions
that
recognize
cultural
diversity
inherent
in
global
clients.
At INS Consulting, we provide the following advantages to each of our clients in

every
assignment
we
undertake.
Our expertise, combined with our reputation for exceptional customer service has one
clear
We
benefit:
work
we
are
in
the
people
you
Partnership
can
trust
with
for
desired
our
results.
clients
We work closely with client companies, identifying needs, culture, economic,factors,

and market trends, and then shouldering the responsibility in providing a Talent
Management solution that will add value to the client. We understand our customers
need fast, efficient and cost effective people solutions. And we deliver constantly and
consistently.
OUR HR SERVICES
We provide Manpower Services for following Sectors:
ITES / BPO / KPO
BANKING & FINANCIAL SERVICES
ENGINEERING & MANUFACTURING
BIO TECHNOLOGY / LIFE SCIENCES
ENTERTAINMENT / MEDIA / PUBLISHING
15
HOTELS / RESTAURANTS
HOSPITALS / HEALTHCARE
Our
Methodology
INS team works with clients to understand their needs and uses various strategic ways
to source & select candidates by synchronizing technology in each search. Our
Recruiters use proprietary database with customized recruitment technology solutions to
pair the deserving candidates with matching client requirements. We make sure that our
Recruiters speak with candidates before sending their short-listed profiles to respective
clients. Hence, our clients benefit from dealing with consultants who have detailed
knowledge
of
the
profession
Our
and
the
market
place.
Team
INS, the leader provider of talent management solutions, prided itself in building a team
of recruitment professionals who have established a global reputation for excellence.
Our recruitment specialists have been successfully providing quality placements in
multiple markets and industries for over a decade. Our team of recruitment
professionals, over the years, as built strong and time-tested relationships with the best
in class talent across verticals so that w
16
CHAPTER-III
LITERATURE REVIEW
FINANCIAL PERFORMANCE ANALYSIS

Financial performance analysis is the process of identifying the financial strengths and
weaknesses of the firm by properly establishing the relationship between the items of
balance sheet and profit and loss account. It also helps in short-term and long term
forecasting and growth can be identified with the help of financial performance analysis.
The dictionary meaning of analysis is to resolve or separate a thing in to its element or
components parts for tracing their relation to the things as whole and to each other. The
analysis of financial statement is a process of evaluating the relationship between the
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component parts of financial statement to obtain a better understanding of the firms

position and performance. This analysis can be undertaken by management of the firm or
by parties outside the namely, owners,creditors,investors.
The analysis of financial statement represents three major steps:
The first step involves the re-organization of the entire financial data contained
the financial statements. Therefore the financial statements are broke down into
individual components and re-grouped into few principle elements according to
their resemblances and affinities. Thus the balance sheet and profit and loss
accounts are completely re-casted and presented in the condensed form entirely
different from their original shape.
The second step is the establishment of significant relationships between the

individual components of balance sheet and profit and loss account. This is done
through the application tools of financial analysis like Ratio analysis, Trend
analysis, Common size balance sheet and comparative Balance sheet.
Finally, the result obtained by means of application of financial tools is evaluated.
In brief financial analysis is the process of selection, relation and evaluation of

financial statements. The tools of analysis are used for determining the investment
value of the business, credit rating and for testing efficiency of operation.
18
Thus financial analysis helps to highlight the facts and relationships concerning
managerial performance, corporate efficiency, financial strength and weakness and credit
worthiness of the company.
Financial statement analysis (or financial analysis) the process of

understanding the risk and profitability of a firm (business, sub-business or project)
through analysis of reported financial information, particularly annual and quarterly
reports.
Financial statement analysis consists of 1) reformulating reported financial statements, 2)
analysis and adjustments of measurement errors, and 3) financial ratio analysis on the
basis of reformulated and adjusted financial statements. The two first steps are often
dropped in practice, meaning that financial ratios are just calculated on the basis of the
reported numbers, perhaps with some adjustments. Financial statement analysis is the
foundation for evaluating and pricing credit risk and for doing fundamental company
valuation.
1) Financial statement analysis typically starts with reformulating the reported financial
information. In relation to the income statement, one common reformulation is to divide
reported items into recurring or normal items and non-recurring or special items. In this
way, earnings could be separated in to normal or core earnings and transitory earnings.
The idea is that normal earnings are more permanent and hence more relevant for
prediction and valuation. Normal earnings are also separated into net operational profit
after taxes (NOPAT) and net financial costs. The balance sheet is grouped, for example,
in net operating assets (NOA), net financial debt and equity.
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2) Analysis and adjustment of measurement errors question the quality of the reported
accounting numbers. The reported numbers can for example be a bad or noisy
representation of invested capital, for example in terms of NOA, which means that the
return on net operating assets (RNOA) will be a noisy measure of the underlying
profitability (the internal rate of return, IRR). Expensing of R&D is an example when
such investment expenditures are expected to yield future economic benefits, suggesting
that R&D creates assets which should have been capitalized in the balance sheet. An
example of an adjustment for measurement errors is when the analyst removes the R&D
expenses from the income statement and put them in the balance sheet. The R&D
expenditures are then replaced by amortization of the R&D capital in the balance sheet.
Another example is to adjust the reported numbers when the analyst suspects earnings
management.
3) Financial ratio analysis should be based on regrouped and adjusted financial
statements. Two types of ratio analysis are performed: 3.1) Analysis of risk and 3.2)
analysis of profitability:
3.1) Analysis of risk typically aims at detecting the underlying credit risk of the firm.
Risk analysis consists of liquidity and solvency analysis. Liquidity analysis aims at
analyzing whether the firm has enough liquidity to meet its obligations when they should
be paid. A usual technique to analyze illiquidity risk is to focus on ratios such as the
current ratio and interest coverage. Cash flow analysis is also useful. Solvency analysis
aims at analyzing whether the firm is financed so that it is able to recover from a loss or a
period of losses. A usual technique to analyze insolvency risk is to focus on ratios such as
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the equity in percentage of total capital and other ratios of capital structure. Based on the
risk analysis the analyzed firm could be rated, i.e. given a grade on the riskiness, a
process called synthetic rating.
Ratios of risk such as the current ratio, the interest coverage and the equity percentage
have no theoretical benchmarks. It is therefore common to compare them with the
industry average over time. If a firm has a higher equity ratio than the industry, this is
considered less risky than if it is above the average. Similarly, if the equity ratio increases
over time, it is a good sign in relation to insolvency risk.
3.2) Analysis of profitability refers to the analysis of return on capital, for example return
on equity, ROE, defined as earnings divided by average equity. Return on equity, ROE,
could be decomposed: ROE = RNOA + (RNOA - NFIR) * NFD/E, where RNOA is
return on net operating assets, NFIR is the net financial interest rate, NFD is net financial
debt and E is equity. In this way, the sources of ROE could be clarified.
Unlike other ratios, return on capital has a theoretical benchmark, the cost of capital also called the required return on capital. For example, the return on equity, ROE, could
be compared with the required return on equity, kE, as estimated, for example, by the
capital asset pricing model. If ROE < kE (or RNOA > WACC, where WACC is the
weighted average cost of capital), then the firm is economically profitable at any given
time over the period of ratio analysis. The firm creates values for its owners.
Insights from financial statement analysis could be used to make forecasts and to evaluate
credit risk and value the firm's equity. For example, if financial statement analysis detects
21
increasing superior performance ROE - kE > 0 over the period of financial statement
analysis, then this trend could be extrapolated into the future. But as economic theory
suggests, sooner or later the competitive forces will work - and ROE will be driven
toward kE.
A financial statement (or financial report) is a formal record of the financial
activities of a business, person, or other entity. In British Englishincluding United
Kingdom company lawa financial statement is often referred to as an account,
although the term financial statement is also used, particularly by accountants.
For a business enterprise, all the relevant financial information, presented in a structured
manner and in a form easy to understand, are called the financial statements. They
typically include four basic financial statements, accompanied by a management
discussion and analysis:
1. Statement of Financial Position: also referred to as a balance sheet, reports
on a company's assets, liabilities, and ownership equity at a given point in time.
2. Statement of Comprehensive Income: also referred to as Profit and Loss
statement (or a "P&L"), reports on a company's income, expenses, and profits
over a period of time. A Profit & Loss statement provides information on the
operation of the enterprise. These include sale and the various expenses incurred
during the processing state.
3. Statement of Changes in Equity: explains the changes of the company's
equity throughout the reporting period
22
4. Statement of cash flows: reports on a company's cash flow activities,

particularly its operating, investing and financing activities.
For large corporations, these statements are often complex and may include an extensive
set of notes to the financial statements and explanation of financial policies and
management discussion and analysis. The notes typically describe each item on the
balance sheet, income statement and cash flow statement in further detail. Notes to
financial statements are considered an integral part of the financial statements.
Purpose of financial statements by business entities

"The objective of financial statements is to provide information about the financial
position, performance and changes in financial position of an enterprise that is useful to a
wide range of users in making economic decisions." Financial statements should be
understandable, relevant, reliable and comparable. Reported assets, liabilities, equity,
income and expenses are directly related to an organization's financial position.
Financial statements are intended to be understandable by readers who have "a
reasonable knowledge of business and economic activities and accounting and who are
willing to study the information diligently." Financial statements may be used by users
for different purposes:
Owners and managers require financial statements to make important business

decisions that affect its continued operations. Financial analysis is then performed
on these statements to provide management with a more detailed understanding of
23
the figures. These statements are also used as part of management's annual report
to the stockholders.
Employees also need these reports in making collective bargaining agreements

(CBA) with the management, in the case of labor unions or for individuals in
discussing their compensation, promotion and rankings.
Prospective investors make use of financial statements to assess the viability of

investing in a business. Financial analyses are often used by investors and are
prepared by professionals (financial analysts), thus providing them with the basis
for making investment decisions.
Financial institutions (banks and other lending companies) use them to decide
whether to grant a company with fresh working capital or extend debt securities
(such as a long-term bank loan or debentures) to finance expansion and other
significant expenditures.
Government entities (tax authorities) need financial statements to ascertain the

propriety and accuracy of taxes and other duties declared and paid by a company.
Vendors who extend credit to a business require financial statements to assess the
creditworthiness of the business.
Media and the general public are also interested in financial statements for a
variety of reasons.
Government financial statements

24
The rules for the recording, measurement and presentation of government financial
statements may be different from those required for business and even for non-profit
organizations. They may use either of two accounting methods: accrual accounting, or
cash accounting, or a combination of the two (OCBOA). A complete set of chart of
accounts is also used that is substantially different from the chart of a profit-oriented
business
Financial statements of not-for-profit organizations

The financial statements that not-for-profit organizations such as charitable organizations
and large voluntary associations publish, tend to be simpler than those of for-profit
corporations. Often they consist of just a balance sheet and a "statement of activities"
(listing income and expenses) similar to the "Profit and Loss statement" of a for-profit.
Charitable organizations in the United States are required to show their income and net
assets (equity) in three categories: Unrestricted (available for general use), Temporarily
Restricted (to be released after the donor's time or purpose restrictions have been met),
and Permanently Restricted (to be held perpetually, e.g., in an Endowment).
Personal financial statements

Personal financial statements may be required from persons applying for a personal loan
or financial aid. Typically, a personal financial statement consists of a single form for
25
reporting personally held assets and liabilities (debts), or personal sources of income and
expenses, or both. The form to be filled out is determined by the organization supplying
the loan or aid.
Audit and legal implications

Although laws differ from country to country, an audit of the financial statements of a
public company is usually required for investment, financing, and tax purposes. These are
usually performed by independent accountants or auditing firms. Results of the audit are
summarized in an audit report that either provide an unqualified opinion on the financial
statements or qualifications as to its fairness and accuracy. The audit opinion on the
financial statements is usually included in the annual report.
There has been much legal debate over who an auditor is liable to. Since audit reports
tend to be addressed to the current shareholders, it is commonly thought that they owe a
legal duty of care to them. But this may not be the case as determined by common law
precedent. In Canada, auditors are liable only to investors using a prospectus to buy
shares in the primary market. In the United Kingdom, they have been held liable to
potential investors when the auditor was aware of the potential investor and how they
would use the information in the financial statements. Nowadays auditors tend to include
in their report liability restricting language, discouraging anyone other than the
addressees of their report from relying on it. Liability is an important issue: in the UK, for
example, auditors have unlimited liability.
26
In the United States, especially in the post-Enron era there has been substantial concern
about the accuracy of financial statements. Corporate officers (the chief executive officer
(CEO) and chief financial officer (CFO)) are personally liable for attesting that financial
statements "do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by
th[e] report." Making or certifying misleading financial statements exposes the people
involved to substantial civil and criminal liability. For example Bernie Ebbers (former
CEO of WorldCom) was sentenced to 25 years in federal prison for allowing WorldCom's
revenues to be overstated by billion over five years.
Standards and regulations

Different countries have developed their own accounting principles over time, making
international comparisons of companies difficult. To ensure uniformity and comparability
between financial statements prepared by different companies, a set of guidelines and
rules are used. Commonly referred to as Generally Accepted Accounting Principles
(GAAP), these set of guidelines provide the basis in the preparation of financial
statements, although many companies voluntarily disclose information beyond the scope
of such requirements.
Recently there has been a push towards standardizing accounting rules made by the
International Accounting Standards Board ("IASB"). IASB develops International
Financial Reporting Standards that have been adopted by Australia, Canada and the
European Union (for publicly quoted companies only), are under consideration in South
27
Africa and other countries. The United States Financial Accounting Standards Board has
made a commitment to converge the U.S. GAAP and IFRS over time.
Inclusion in annual reports

To entice new investors, most public companies assemble their financial statements on
fine paper with pleasing graphics and photos in an annual report to shareholders,
attempting to capture the excitement and culture of the organization in a "marketing
brochure" of sorts. Usually the company's chief executive will write a letter to
shareholders, describing management's performance and the company's financial
highlights.
In the United States, prior to the advent of the internet, the annual report was considered
the most effective way for corporations to communicate with individual shareholders.
Blue chip companies went to great expense to produce and mail out attractive annual
reports to every shareholder. The annual report was often prepared in the style of a coffee
table book.
Moving to electronic financial statements

Financial statements have been created on paper for hundreds of years. The growth of the
Web has seen more and more financial statements created in an electronic form which is
28
exchangeable over the Web. Common forms of electronic financial statements are PDF
and HTML. These types of electronic financial statements have their drawbacks in that it
still takes a human to read the information in order to reuse the information contained in a
financial statement.
More recently a market driven global standard, XBRL (Extensible Business Reporting
Language), which can be used for creating financial statements in a structured and
computer readable format, has become more popular as a format for creating financial
statements. Many regulators around the world such as the U.S. Securities and Exchange
Commission have mandated XBRL for the submission of financial information.
The UN/CEFACT created, with respect to Generally Accepted Accounting Principles,
(GAAP), internal or external financial reporting XML messages to be used between
enterprises and their partners, such as private interested parties (e.g. bank) and public
collecting bodies (e.g. taxation authorities). Many regulators use such messages to collect
financial and economic information.
In financial accounting, a balance sheet or statement of financial position is a summary
of the financial balances of a sole proprietorship, a business partnership, a corporation or
other business organization, such as an LLC or an LLP. Assets, liabilities and ownership
equity are listed as of a specific date, such as the end of its financial year. A balance sheet
is often described as a "snapshot of a company's financial condition". Of the four basic
financial statements, the balance sheet is the only statement which applies to a single
point in time of a business' calendar year.
29
A standard company balance sheet has three parts: assets, liabilities and ownership equity.
The main categories of assets are usually listed first, and typically in order of liquidity.
Assets are followed by the liabilities. The difference between the assets and the liabilities
is known as equity or the net assets or the net worth or capital of the company and
according to the accounting equation, net worth must equal assets minus liabilities.
Another way to look at the same equation is that assets equals liabilities plus owner's
equity. Looking at the equation in this way shows how assets were financed: either by
borrowing money (liability) or by using the owner's money (owner's equity). Balance
sheets are usually presented with assets in one section and liabilities and net worth in the
other section with the two sections "balancing."
A business operating entirely in cash can measure its profits by withdrawing the entire
bank balance at the end of the period, plus any cash in hand. However, many businesses
are not paid immediately; they build up inventories of goods and they acquire buildings
and equipment. In other words: businesses have assets and so they cannot, even if they
want to, immediately turn these into cash at the end of each period. Often, these
businesses owe money to suppliers and to tax authorities, and the proprietors do not
withdraw all their original capital and profits at the end of each period. In other words
businesses also have liabilities.
Types
A balance sheet summarizes an organization or individual's assets, equity and liabilities at
a specific point in time. We have two forms of balance sheet. They are the report form
30
and the account form. Individuals and small businesses tend to have simple balance
sheets. Larger businesses tend to have more complex balance sheets, and these are
presented in the organization's annual report. Large businesses also may prepare balance
sheets for segments of their businesses. A balance sheet is often presented alongside one
for a different point in time (typically the previous year) for comparison.
Personal balance sheet

A personal balance sheet lists current assets such as cash in checking accounts and
savings accounts, long-term assets such as common stock and real estate, current
liabilities such as loan debt and mortgage debt due, or overdue, long-term liabilities such
as mortgage and other loan debt. Securities and real estate values are listed at market
value rather than at historical cost or cost basis. Personal net worth is the difference
between an individual's total assets and total liabilities.
A small business bump that balance sheet lists current assets such as cash, accounts
receivable, and inventory, fixed assets such as land, buildings, and equipment, intangible
assets such as patents, and liabilities such as accounts payable, accrued expenses, and
long-term debt. Contingent liabilities such as warranties are noted in the footnotes to the
balance sheet. The small business's equity is the difference between total assets and total
liabilities.
Public Business Entities balance sheet structure

Guidelines for balance sheets of public business entities are given by the International
Accounting Standards Board and numerous country-specific organizations/companys.
31
Balance sheet account names and usage depend on the organization's country and the
type of organization. Government organizations do not generally follow standards
established for individuals or businesses.
If applicable to the business, summary values for the following items should be included
in the balance sheet: Assets are all the things the business owns, this will include
property, tools, cars, etc.
Assets
Current assets
1. Cash and cash equivalents
2. Accounts receivable
3. Inventories
4. Prepaid expenses for future services that will be used within a year
Non-current assets (Fixed assets)

1. Property, plant and equipment
2. Investment property, such as real estate held for investment purposes
3. Intangible assets
32
4. Financial assets (excluding investments accounted for using the equity method,
accounts receivables, and cash and cash equivalents)
5. Investments accounted for using the equity method
6. Biological assets, which are living plants or animals. Bearer biological assets are
plants or animals which bear agricultural produce for harvest, such as apple trees
grown to produce apples and sheep raised to produce wool.
Liabilities
See Liability (accounting)
1. Accounts payable
2. Provisions for warranties or court decisions
3. Financial liabilities (excluding provisions and accounts payable), such as
promissory notes and corporate bonds
4. Liabilities and assets for current tax
5. Deferred tax liabilities and deferred tax assets
6. Unearned revenue for services paid for by customers but not yet provided
33
Equity
The net assets shown by the balance sheet equals the third part of the balance sheet,
which is known as the shareholders' equity. It comprises:
1. Issued capital and reserves attributable to equity holders of the parent company
(controlling interest)
2. Non-controlling interest in equity
Formally, shareholders' equity is part of the company's liabilities: they are funds "owing"
to shareholders (after payment of all other liabilities); usually, however, "liabilities" is
used in the more restrictive sense of liabilities excluding shareholders' equity. The
balance of assets and liabilities (including shareholders' equity) is not a coincidence.
Records of the values of each account in the balance sheet are maintained using a system
of accounting known as double-entry bookkeeping. In this sense, shareholders' equity by
construction must equal assets minus liabilities, and are a residual.
Regarding the items in equity section, the following disclosures are required:
1. Numbers of shares authorized, issued and fully paid, and issued but not fully paid
2. Par value of shares
3. Reconciliation of shares outstanding at the beginning and the end of the period
4. Description of rights, preferences, and restrictions of shares
34
5. Treasury shares, including shares held by subsidiaries and associates

6. Shares reserved for issuance under options and contracts
7. A description of the nature and purpose of each reserve within owners' equity
Income statement (also referred to as profit and loss statement (P&L), revenue
statement, statement of financial performance, earnings statement, operating
statement or statement of operations) is a company's financial statement that indicates
how the revenue (money received from the sale of products and services before expenses
are taken out, also known as the "top line") is transformed into the net income (the result
after all revenues and expenses have been accounted for, also known as Net Profit or the
"bottom line"). It displays the revenues recognized for a specific period, and the cost and
expenses charged against these revenues, including write-offs (e.g., depreciation and
amortization of various assets) and taxes. The purpose of the income statement is to show
managers and investors whether the company made or lost money during the period
being reported.
The important thing to remember about an income statement is that it represents a period
of time. This contrasts with the balance sheet, which represents a single moment in time.
Charitable organizations that are required to publish financial statements do not produce
an income statement. Instead, they produce a similar statement that reflects funding
sources compared against program expenses, administrative costs, and other operating
commitments. This statement is commonly referred to as the statement of activities.
35
Revenues and expenses are further categorized in the statement of activities by the donor
restrictions on the funds received and expended.
The income statement can be prepared in one of two methods. The Single Step income
statement takes a simpler approach, totaling revenues and subtracting expenses to find the
bottom line. The more complex Multi-Step income statement (as the name implies) takes
several steps to find the bottom line, starting with the gross profit. It then calculates
operating expenses and, when deducted from the gross profit, yields income from
operations. Adding to income from operations is the difference of other revenues and
other expenses. When combined with income from operations, this yields income before
taxes. The final step is to deduct taxes, which finally produces the net income for the
period measured.
Usefulness and limitations of income statement

Income statements should help investors and creditors determine the past financial
performance of the enterprise, predict future performance, and assess the capability of
generating future cash flows through report of the income and expenses.
However, information of an income statement has several limitations:
Items that might be relevant but cannot be reliably measured are not reported (e.g.
brand recognition and loyalty).
Some numbers depend on accounting methods used (e.g. using FIFO or LIFO
accounting to measure inventory level).
36
Some numbers depend on judgments and estimates (e.g. depreciation expense

depends on estimated useful life and salvage value).
Guidelines for statements of comprehensive income and income statements of business

entities are formulated by the International Accounting Standards Board and numerous
country-specific organizations, for example the FASB in the U.S..
Names and usage of different accounts in the income statement depend on the type of
organization, industry practices and the requirements of different jurisdictions.
If applicable to the business, summary values for the following items should be included
in the income statement:
Operating section
Revenue - Cash inflows or other enhancements of assets of an entity during a

period from delivering or producing goods, rendering services, or other activities
that constitute the entity's ongoing major operations. It is usually presented as
sales minus sales discounts, returns, and allowances. Every time a business sells a
product or performs a service, it obtains revenue. This often is referred to as gross
revenue or sales revenue.
Expenses - Cash outflows or other using-up of assets or incurrence of liabilities

during a period from delivering or producing goods, rendering services, or
carrying out other activities that constitute the entity's ongoing major operations.
37
Cost of Goods Sold (COGS) / Cost of Sales - represents the

direct costs attributable to goods produced and sold by a business
(manufacturing or merchandizing). It includes material costs, direct
labour, and overhead costs (as in absorption costing), and excludes
operating costs (period costs) such as selling, administrative, advertising
or R&D, etc.
Selling, General and Administrative expenses (SG&A or

SGA) - consist of the combined payroll costs. SGA is usually understood
as a major portion of non-production related costs, in contrast to
production costs such as direct labour.
Selling expenses - represent expenses needed to sell products

(e.g. salaries of sales people, commissions and travel expenses,
advertising, freight, shipping, depreciation of sales store buildings
and equipment, etc.).
General and Administrative (G&A) expenses - represent

expenses to manage the business (salaries of officers / executives,
legal and professional fees, utilities, insurance, depreciation of
office building and equipment, office rents, office supplies, etc.).
Depreciation / Amortization - the charge with respect to fixed assets

/ intangible assets that have been capitalised on the balance sheet for a
38
specific (accounting) period. It is a systematic and rational allocation of

cost rather than the recognition of market value decrement.
Research & Development (R&D) expenses - represent expenses

included in research and development.
Expenses recognised in the income statement should be analysed either by nature (raw
materials, transport costs, staffing costs, depreciation, employee benefit etc.) or by
function (cost of sales, selling, administrative, etc.). (IAS 1.99) If an entity categorises
by function, then additional information on the nature of expenses, at least,
depreciation, amortisation and employee benefits expense must be disclosed. (IAS
1.104) The major exclusive of costs of goods sold, are classified as operating expenses.
These represent the resources expended, except for inventory purchases, in generating the
revenue for the period. Expenses often are divided into two broad sub classicifications
selling expenses and administrative expenses.
Non-operating section
Other revenues or gains - revenues and gains from other than primary
business activities (e.g. rent, income from patents). It also includes unusual gains
that are either unusual or infrequent, but not both (e.g. gain from sale of securities
or gain from disposal of fixed assets)
Other expenses or losses - expenses or losses not related to primary business

operations, (e.g. foreign exchange loss).
39
Finance costs - costs of borrowing from various creditors (e.g. interest

expenses, bank charges).
Income tax expense - sum of the amount of tax payable to tax authorities in
the current reporting period (current tax liabilities/ tax payable) and the amount of
deferred tax liabilities (or assets).
Irregular items
They are reported separately because this way users can better predict future cash flows irregular items most likely will not recur. These are reported net of taxes.
Discontinued operations is the most common type of irregular items.

Shifting business location(s), stopping production temporarily, or changes due to
technological improvement do not qualify as discontinued operations.
Discontinued operations must be shown separately.
Cumulative effect of changes in accounting policies (principles) is the difference

between the book value of the affected assets (or liabilities) under the old policy
(principle) and what the book value would have been if the new principle had been
applied in the prior periods. For example, valuation of inventories using LIFO instead of
weighted average method. The changes should be applied retrospectively and shown as
adjustments to the beginning balance of affected components in Equity. All comparative
financial statements should be restated. (IAS 8)
40
However, changes in estimates (e.g. estimated useful life of a fixed asset) only requires
prospective changes.
No items may be presented in the income statement as extraordinary items under IFRS
regulations, but are permissible under US GAAP. Extraordinary items are both unusual
(abnormal) and infrequent, for example, unexpected natural disaster, expropriation,
prohibitions under new regulations. [Note: natural disaster might not qualify depending
on location (e.g. frost damage would not qualify in Canada but would in the tropics).]
Additional items may be needed to fairly present the entity's results of operations.
Disclosures
Certain items must be disclosed separately in the notes (or the statement of
comprehensive income), if material, including:
Write-downs of inventories to net realisable value or of property, plant and

equipment to recoverable amount, as well as reversals of such write-downs
Restructurings of the activities of an entity and reversals of any provisions for the
costs of restructuring
Disposals of items of property, plant and equipment
Disposals of investments
Discontinued operations
41
Litigation settlements
Other reversals of provisions
Earnings per share

Because of its importance, earnings per share (EPS) are required to be disclosed on the
face of the income statement. A company which reports any of the irregular items must
also report EPS for these items either in the statement or in the notes.
There are two forms of EPS reported:
Basic: in this case "weighted average of shares outstanding" includes only actual
stocks outstanding.
Diluted: in this case "weighted average of shares outstanding" is calculated as if

all stock options, warrants, convertible bonds, and other securities that could be
transformed into shares are transformed. This increases the number of shares and
so EPS decreases. Diluted EPS is considered to be a more reliable way to
measure EPS.
Sample income statement
42
The following income statement is a very brief example prepared in accordance with
IFRS. It does not show all possible kinds of items appeared a firm, but it shows the most
usual ones. Please note the difference between IFRS and US GAAP when interpreting the
following sample income statements.
Bottom line
"Bottom line" is the net income that is calculated after subtracting the expenses from
revenue. Since this forms the last line of the income statement, it is informally called
"bottom line." It is important to investors as it represents the profit for the year
attributable to the shareholders.
After revision to IAS 1 in 2003, the Standard is now using profit or loss for the year
rather than net profit or loss or net income as the descriptive term for the bottom line of
the income statement.
Requirements of IFRS
, the International Accounting Standards Board issued a revised IAS 1: Presentation of
Financial Statements, which is effective for annual periods beginning.
A business entity adopting IFRS must include:
a Statement of Comprehensive Income or
two separate statements comprising:

1. an Income Statement displaying components of profit or loss and
43
2. A Statement of Comprehensive Income that begins with profit or loss

(bottom line of the income statement) and displays the items of other
comprehensive income for the reporting period.
All non-owner changes in equity (i.e. comprehensive income ) shall be presented in either
in the statement of comprehensive income (or in a separate income statement and a
statement of comprehensive income). Components of comprehensive income may not be
presented in the statement of changes in equity.
Comprehensive income for a period includes profit or loss (net income) for that period
and other comprehensive income recognized in that period.
All items of income and expense recognized in a period must be included in profit or loss
unless a Standard or an Interpretation requires otherwise. Some IFRSs require or permit
that some components to be excluded from profit or loss and instead to be included in
other comprehensive income.
Items and disclosures

The statement of comprehensive income should include:
1. Revenue
2. Finance costs (including interest expenses)
3. Share of the profit or loss of associates and joint ventures accounted for using the
equity method
44
4. Tax expense
5. A single amount comprising the total of (1) the post-tax profit or loss of
discontinued operations and (2) the post-tax gain or loss recognized on the
disposal of the assets or disposal group(s) constituting the discontinued operation
6. Profit or loss
7. Each component of other comprehensive income classified by nature
8. Share of the other comprehensive income of associates and joint ventures
accounted for using the equity method
9. Total comprehensive income
The following items must also be disclosed in the statement of comprehensive income as
allocations for the period:
Profit or loss for the period attributable to non-controlling interests and owners of
the parent
Total comprehensive income attributable to non-controlling interests and owners

of the parent
No items may be presented in the statement of comprehensive income (or in the income
statement, if separately presented) or in the notes as extraordinary items.
45
Financial statement analysis is, of course, the underlying purpose of preparing financial
statements. Everyone who looks at your financial statements will be automatically
performing some form of analysis. Your banker will quickly analyze them to determine
your capability of paying back a loan.
Your investor(s) will always perform a financial statement analysis to determine if you
have been performing according to plan, and/or whether your business is a good
investment.
Your suppliers will analyze your financial statements to determine your credit worthiness
and so on.
The important thing to remember is: everyone who looks at your financial statements will
conduct a financial statement analysis, in one form or another. That is why your
statements need to be as accurate and truthful as possible.
You, as well as your business, will be judged according to your financial statements.
But the most important aspect of financial statement analysis is the analysis you perform
yourself.
There are three major analyses you need to make. There are many others as well, but
well stick to the three major ones here, as follows:
1. Actual
vs. Planned Performance
46
You did considerable business planning before you started your business (and you likely
updated it for the banks, investors, or suppliers), complete with pro forma financial
statements (no matter how crude).
So, after your business is operating, you will need to compare your actual performance
(from your financial statements) against your planned performance (from your pro forma
financial statements).
This financial statement analysis should be performed line item by line item. If you had
fewer sales than planned you should know or find out why. If any costs were greater
than planned again, you should know or find out why.
Ever dollar received, and every dollar spent shows up on your financial statements, and
every dollar that is different than you planned should be analyzed. This could be a good
thing as you may need to change your planning.
This is where it becomes important to have an advisory group where you can bounce
information, and ideas, around.
2. Trend Analysis
By comparing current financial statements to previous financial statements you can see
which areas of your business have changed, and by how much.
Then you need to determine why the change occurred, whether positive or negative:
Are sales trending up?

47
Are costs trending down (which ones arent)?
Are profits trending up?
Is your cash flow improving?

These are the types of things you will want to look at in your financial statement
analysis.
Like the performance analysis, you need to analyze your financial statements line item by
line item to determine trends and don't be afraid to change your planning if you see a
new trend emerging.
3. Industry Comparisons
This analysis is not only a comparison or your businesss performance to others in your
industry, but also to standards set by your banker, your investor(s), your advisory group,
or even yourself.
These comparisons are usually made in the form of financial ratios.
Here are a few of the more common financial ratio analyses:
Balance Sheet Ratios.

Balance Sheet ratios typically measure the strength of your business, using the
following formulas:
Current Ratio This is one of the most widely used tests of financial
strength, and is calculated by dividing Current Assets by Current
48
Liabilities. This ratio is used to determine if your business is likely to be

able to pay its bills.
Obviously, a minimum acceptable ratio would be 1:1; otherwise your company would not
be expected to pay its bills on time. A ratio of 2:1 is much more acceptable, and the
higher, the better.
Quick Ratio This is sometimes called the acid test ratio because it
concentrates on only the more liquid assets of your business. It is
calculated by dividing the sum of Cash and Receivables by Current
Liabilities.
It excludes inventories or any other current asset that might have questionable liquidity.
Depending on your history for collecting receivables, a satisfactory ratio is 1:1.
Working Capital Bankers especially, watch this calculation very

closely as it deals more with cash flow than just a simple ratio. Working
Capital equals Current Assets minus Current Liabilities.
Quite often your banker will tie your loan approval amount to a minimum Working
Capital requirement.
Inventory Turnover Ratio Not every business has an inventory

that needs to be of concern, and if that is your situation you can ignore this
ratio.
49
This ratio tells you if your inventory is turning over fast enough, and is calculated by
dividing Net Sales by your average Inventory (at cost).
If you are concerned about your inventory, then you definitely should watch this ratio
carefully when comparing it to industry guidelines.
Leverage Ratio This is another of the analyses used by bankers to

determine if your business is credit worthy. It basically shows the extent
your business relies on debt to keep operating. This ratio is calculated by
dividing Total Liabilities by Net Worth (total assets minus total liabilities).
Obviously, the higher the ratio is, the more risky it becomes to extend credit to your
business.
This is often the calculation a supplier to your business will make before extending credit
to you.
P&L Ratios
Profit and Loss (P&L) financial statements also have some important ratio
calculations for your financial statement analysis:
Gross Profit Ratio This is the most common calculation on your

P&Lit is simply your Gross Profit divided by Net Sales. Often, different
industries will have standard guidelines that you can compare your
businesss numbers to.
50
It is also desirable to watch your trends and not let this number move too far from your
target.
Net Profit Ratio This calculation is simply Net Pre-tax Profit

divided by Net Sales. Other than wanting this number to be as large as
possible, I usually dont pay too much attention to it because it includes
too many non-operating costs (depreciation, amortization, etc.) to be of
any real analysis value. (Your banker may be interested however.)
Management
Ratios.
There are a couple of other ratios that interested outside parties will want to
analyze:
Return on Assets This is calculated by dividing Net Pre-tax Profit

by Total Assets. The ratio is supposed to indicate how efficiently you are
utilizing your assets.
To me, this is a useless analysis for helping you run your business. However, bankers and
investors will always calculate this ratio if you dont.
Return on Investment (ROI) To a bank or investor this is the

most important ratio of all. It is supposed to tell youthe business owner
if you are investing your time, and money, properly, or should you just
liquidate your business and put the money into a savings account.
51
This, of course, is pure bull concocted by non-entrepreneurs and academics who have
no idea what it means to be an entrepreneur.
Having said that, I do realize it can be of some value to a banker or investorthey likely
want to know if they could make a better return on their money by investing or loaning it
to someone other than you. So, for that purpose, it can be valuable to them.
To calculate your Return on Investment, divide your Net Pre-tax Profit by your Net
Worth (total assets minus total liabilities).
52
CHAPTER-IV
DATA ANALYSES AND
INTERPRETATION
53
Table 1: Comparative Balance Sheet as on 31st March 2014 -2015

PARTICULARS
Mar'15 Mar '14
ABSOLUTE
CHANGE
0
Total Share Capital
7.40
7.40
Equity Share Capital
7.40
7.40
Reserves
698.89
668.03
30.86
4.61955
Networth
706.29
675.43
30.86
4.56894
Secured Loans
512.71
478.48
34.23
7.1539
Total Debt
512.71
478.48
34.23
7.1539
1,219.00 1,153.91
65.09
5.64082
Total Liabilities
CHANGE
IN %
Gross Block
537.74
536.88
0.86
0.16018
Less: Accum. Depreciation
409.53
363.66
45.87
12.6134
Net Block
128.21
173.22
-45.01
-25.984
1,377.21 1,357.49
19.72
1.45268
Investments
51.58
57.33
-5.75
-10.03
116.46
381.96
-265.5
-69.51
19.57
22.92
-3.35
-14.616
187.61
462.21
-274.6
-59.41
Loans and Advances
1,477.46 1,089.79
387.67
35.5729
Total CA, Loans & Advances
1,665.07 1,552.00
113.07
7.28544
Current Liabilities
1,874.43 1,808.50
65.93
3.64556
120.31
-43.26
-35.957
1,951.48 1,928.81
22.67
1.17534
-376.81
90.4
-23.991
Total Assets
1,219.01 1,153.90
65.11
5.6426
Contingent Liabilities
1,133.15 1,972.14
-838.99
-42.542
4.18
4.56681
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Provisions
Total CL & Provisions
Net Current Assets
Book Value (Rs)
77.05
-286.41
95.71
91.53
54
INTERPRETATION:
The current assets are in negative sign, inventories are increased and current
assets are 90.40 cr increased and sundry debtors are decreased i.e. -265 and cash and
bank balances are decreased is3.35 and loans and advances are increased in 387.65
Cr.The net current Aspects i.e. current assets over current liabilities are decreased the
value is -2.10.
The current liabilities are in this year decreased and provisions are increased in
the working capital net increased for the company.
55

particulars
Mar'14 Mar '13 ABSOLUTE
CHANGE
0
Total Share Capital
7.40
7.40
7.40
7.40
Reserves
668.03
635.12
32.91
0.05182
Networth
675.43
642.52
32.91
0.05122
Secured Loans
478.48
561.86
-83.38
-0.1484
Total Debt
478.48
561.86
-83.38
-0.1484
1,153.91 1,204.38
-50.47
-0.0419
Total Liabilities
CHANGE
IN %
Gross Block
536.88
512.23
24.65
0.04812
363.66
311.45
52.21
0.16764
Net Block
173.22
200.78
-27.56
-0.1373
1,357.49 1,144.25
213.24
0.18636
Investments
57.33
41.94
15.39
0.36695
381.96
644.65
-262.69
-0.4075
22.92
34.82
-11.9
-0.3418
462.21
721.41
-259.2
-0.3593
Loans and Advances
1,089.79 1,106.24
-16.45
-0.0149
1,552.00 1,827.65
-275.65
-0.1508
Current Liabilities
1,808.50 1,839.67
-31.17
-0.0169
128.63
-8.32
-0.0647
1,928.81 1,968.30
-39.49
-0.0201
-140.65
-236.16
1.67906
Total Assets
1,153.90 1,204.38
-50.48
-0.0419
1,972.14 1,351.83
620.31
0.45887
4.46
0.05122
Inventories
Sundry Debtors
Provisions
Net Current Assets
Book Value (Rs)
120.31
-376.81
91.53
87.07
56
INTERPRETATION:
assets are 462.21 cr decreased and sundry debtors are increased i.e 381.96 and cash and
bank balances are decreased is22.92 and loans and advances are increased in 1089.79.The
net current Aspects i.e. current assets over current liabilities are decreased the value is
-1.67.
57
PARTICULARS
Mar'13 Mar '12ABSOLUTE
CHANGE
0
Total Share Capital
7.40
7.40
7.40
7.40
Reserves
635.12
601.21
33.91
5.64029
Networth
642.52
608.61
33.91
5.57171
Secured Loans
561.86
579.51
-17.65
-3.0457
0.00
171.12
-171.12
-100
561.86
750.63
-188.77
-25.148
1,204.38 1,359.24
-154.86
-11.393
Unsecured Loans
Total Debt
Total Liabilities
CHANGE
IN %
Gross Block
512.23
505.22
7.01
1.38751
311.45
264.24
47.21
17.8663
Net Block
200.78
240.98
-40.2
-16.682
1,144.25
756.14
388.11
51.3278
41.94
178.40
-136.46
-76.491
644.65
378.53
266.12
70.3035
34.82
60.32
-25.5
-42.275
721.41
617.25
104.16
16.8748
Loans and Advances
1,106.24
764.66
341.58
44.6708
0.00
3.75
-3.75
-100
1,827.65 1,385.66
441.99
31.8974
Current Liabilities
1,839.67
991.13
848.54
85.6134
128.63
32.40
96.23
297.006
1,968.30 1,023.53
944.77
92.3051
362.13
-502.78
-138.84
1,204.38 1,359.25
-154.87
-11.394
Investments
Inventories
Sundry Debtors
Fixed Deposits
Provisions
Net Current Assets
Total Assets
-140.65
58
Book Value (Rs)
1,351.83 1,160.12
87.07
82.47
191.71
16.525
4.6
5.57779
INTERPRETATION:
assets are 140.65 cr decreased and sundry debtors are increased i.e 644.65 and cash and
bank balances are decreased is34.82 and loans and advances are increased in 1106.24.The
net current Aspects i.e. current assets over current liabilities are decreased the value is
-13.84.
59
PARTICULARS
Mar '12 Mar '11ABSOLUTECHANGE IN
Total Share Capital
7.40
7.40
7.40
7.40
Reserves
601.21
570.96
30.25
5.29809
Networth
608.61
578.36
30.25
5.23031
Secured Loans
579.51
512.58
66.93
13.0575
Unsecured Loans
171.12
0.00
171.12
Total Debt
750.63
512.58
238.05
46.4415
1,359.24
1,090.94
268.3
24.5935
Gross Block
505.22
491.02
14.2
2.89194
264.24
217.61
46.63
21.4282
Net Block
240.98
273.41
-32.43
-11.861
Investments
756.14
638.65
117.49
18.3966
Inventories
178.40
75.11
103.29
137.518
Sundry Debtors
378.53
123.69
254.84
206.031
60.32
48.52
11.8
24.3199
617.25
247.32
369.93
149.575
Loans and Advances
764.66
498.41
266.25
53.4199
3.75
6.95
-3.2
-46.043
1,385.66
752.68
632.98
84.0968
991.13
544.71
446.42
81.9555
32.40
29.10
3.3
11.3402
1,023.53
573.81
449.72
78.3744
362.13
178.87
183.26
102.454
Total Assets
1,359.25
1,090.93
268.32
24.5955
1,160.12
460.58
699.54
151.882
Total Liabilities
Fixed Deposits
Current Liabilities
Provisions
Net Current Assets
60
0
0
Book Value (Rs)
82.47
78.37
4.1
5.23159
INTERPRETATION:
The current assets are in positive trend ,it shows inventories are increased and
current assets are 362.13 increased and sundry debtors are increased i.e 378.53 and cash
and bank balances are increased is 60.32 and loans and advances are increased in
764.66.The net current Aspects i.e. current assets over current liabilities are increased the
value is 10.24.
The current liabilities are in this year increased and provisions are increased in the
working capital net increased for the company.
61
PARTICULARS
Mar '11 Mar '10ABSOLUTE CHANGE IN
Total Share Capital
7.40
7.40
7.40CHANGE 0
0
7.40
0
0
Reserves
570.96
528.62
42.34
8.00953
Networth
578.36
536.02
42.34
7.89896
Secured Loans
512.58
319.87
192.71
60.2464
Total Debt
512.58
319.87
192.71
60.2464
1,090.94
855.89
235.05
27.4626
Gross Block
491.02
448.97
42.05
9.36588
217.61
173.12
44.49
25.6989
Net Block
273.41
275.85
-2.44
-0.8845
Investments
638.65
372.76
265.89
71.3301
Inventories
75.11
51.70
23.41
45.2805
123.69
87.47
36.22
41.4085
48.52
59.24
-10.72
-18.096
247.32
198.41
48.91
24.651
Loans and Advances
498.41
491.04
7.37
1.5009
6.95
25.54
-18.59
-72.788
752.68
714.99
37.69
5.2714
Current Liabilities
544.71
490.79
53.92
10.9864
29.10
29.47
-0.37
-1.2555
573.81
520.26
53.55
10.2929
Net Current Assets
178.87
194.73
-15.86
-8.1446
1,090.93
855.90
235.03
27.46
460.58
217.28
243.3
111.975
78.37
145.27
-66.9
-46.052
Total Liabilities
Sundry Debtors
Fixed Deposits
Provisions
Total Assets
Book Value (Rs)
62
INTERPRETATION:
The current assets are in positive trend this shows inventories are increased and
current assets are 178.87 increased and sundry debtors are increased i.e 123.69 and cash
and bank balances are decreased is 48.52 and loans and advances are increased in
498.41.The net current Aspects i.e. current assets over current liabilities are increased the
value is 8.14.
The current liabilities are in this year increased and provisions are increased in the
working capital net increased for the company.
63
Table 1: Analysis of Common Size Balance Sheets as on 31 st March 2014

-2015
PARTICULARS
Sources Of Funds
Total Share Capital
Reserves
Networth
Secured Loans
Total Debt
Total Liabilities
Application Of Funds
Gross Block
Net Block
Investments
Inventories
Sundry Debtors
Loans and Advances
Current Liabilities
Provisions
Net Current Assets
Total Assets
Book Value (Rs)
Mar '15
% of Mar '14
total
% of total
7.4 0.60705496
7.4 0.60705496
698.89 57.3330599
706.29 57.9401148
512.71 42.0598852
512.71 42.0598852
100
1,219.00
7.40
7.40
668.03
675.43
478.48
478.48
1,153.91
0.641298
0.641298
57.89273
58.53403
41.46597
41.46597
100
537.74 44.1132075
409.53 33.5955701
128.21 10.5176374
1,377.21 112.978671
51.58 4.23133716
116.46 9.55373257
19.57 1.60541427
187.61 15.390484
1,477.46 121.202625
1,665.07 136.593109
1,874.43 153.767842
77.05 6.32075472
1,951.48 160.088597
-286.41 -23.49548
100
1,219.01
1,133.15 92.9573421
95.71 7.85151764
536.88
363.66
173.22
1,357.49
57.33
381.96
22.92
462.21
1,089.79
1,552.00
1,808.50
120.31
1,928.81
-376.81
1,153.90
1,972.14
91.53
46.52703
31.51546
15.01157
117.6426
4.968325
33.10137
1.98629
40.05598
94.44324
134.4992
156.728
10.42629
167.1543
-32.6551
100
170.9093
7.932161
64
Interpretation:
By Analyzing the Trends of the company from 2014-2015 is in the flaxuative Position
and The result of which both the assets and liabilities is given i.e. In the assets the current
assets was Gradually Decreased in 2 %and in the year 2015 is was increased to more than
12% and in same case of liabilities also in the year2014 it has a change of more than 12
%in the long term liabilities
Hence the company is planning for the short term funding and long term liabilities for
the
Stability of the industry year by year
65

-2014
PARTICULARS
Sources Of Funds
Total Share Capital
Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Net Block
Investments
Inventories
Sundry Debtors
Loans and Advances
Fixed Deposits
Current Liabilities
Provisions
Net Current Assets
Total Assets
Book Value (Rs)
Mar '14 % of total
Mar '13 % of total
7.40
7.40
668.03
675.43
478.48
0.00
478.48
1,153.91
0.641298
0.641298
57.89273
58.53403
41.46597
7.40
7.40
635.12
642.52
561.86
0.00
41.46597 561.86
100 1,204.38
0.61442402
0.61442402
52.7341869
53.3486109
46.6513891
0
46.6513891
100
536.88
363.66
173.22
1,357.49
57.33
381.96
22.92
462.21
1,089.79
46.52703 512.23
31.51546 311.45
15.01157 200.78
117.6426 1,144.25
4.968325 41.94
33.10137 644.65
1.98629 34.82
40.05598 721.41
94.44324 1,106.24
42.5305967
25.8597785
16.6708182
95.0073897
3.48228964
53.5254654
2.8911141
59.8988691
91.851409
1,552.00
1,808.50
120.31
1,928.81
-376.81
1,153.90
1,972.14
91.53
134.4992
156.728
10.42629
167.1543
-32.6551
100
170.9093
7.932161
1,827.65
1,839.67
128.63
1,968.30
-140.65
1,204.38
1,351.83
87.07
151.750278
152.748302
10.680184
163.428486
-11.6782079
100
112.242814
7.22944586
66
Interpretation:
assets was Gradually Decreased in 2 %and in the year 2014 is was increased to more than
11% and in same case of liabilities also in the year2014 it has a change of more than -11
the
67

-2013
PARTICULARS
Sources Of Funds
Total Share Capital
Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Net Block
Investments
Inventories
Sundry Debtors
Loans and Advances
Fixed Deposits
Current Liabilities
Provisions
Net Current Assets
Total Assets
Book Value (Rs)
Mar '13 % of total

7.40
7.40
635.12
642.52
561.86
0.00
561.86
1,204.38
512.23
311.45
200.78
1,144.25
41.94
644.65
34.82
721.41
1,106.24
0.00
1,827.65
1,839.67
128.63
1,968.30
-140.65
1,204.38
1,351.83
87.07
68
0.61442402
0.61442402
52.7341869
53.3486109
46.6513891
0
46.6513891
100
0
42.5305967
25.8597785
16.6708182
95.0073897
3.48228964
53.5254654
2.8911141
59.8988691
91.851409
0
151.750278
152.748302
10.680184
163.428486
-11.6782079
100
112.242814
7.22944586
Mar '12 % of total

7.40
7.40
601.21
608.61
579.51
171.12
750.63
1,359.24
505.22
264.24
240.98
756.14
178.40
378.53
60.32
617.25
764.66
3.75
1,385.66
991.13
32.40
1,023.53
362.13
1,359.25
1,160.12
82.47
0.54442188
0.54442188
44.2313352
44.775757
42.6348548
12.5893882
55.224243
100
0
37.1693005
19.4402754
17.729025
55.6296166
13.1249816
27.8486507
4.43777405
45.4114064
56.2564374
0.27588947
101.943733
72.9179542
2.383685
75.3016392
26.6420941
100
85.3506371
6.06736117
Interpretation:
assets was Gradually Decreased in 1%and in the year 2013 is was increased to more than
11% and in same case of liabilities also in the year2013 it has a change of more than -7
the
69

-2012
PARTICULARS
Total Share Capital

Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Net Block
Investments
Inventories
Sundry Debtors
Loans and Advances
Fixed Deposits
Current Liabilities
Provisions
Net Current Assets
Total Assets
Book Value (Rs)
Mar '12 % of total Mar '11 % of total

7.40
7.40
601.21
608.61
579.51
171.12
750.63
1,359.24
505.22
264.24
240.98
756.14
178.40
378.53
60.32
617.25
764.66
3.75
1,385.66
991.13
32.40
1,023.53
362.13
1,359.25
1,160.12
82.47
70
0.54442188
0.54442188
44.2313352
44.775757
42.6348548
12.5893882
55.224243
100
37.1693005
19.4402754
17.729025
55.6296166
13.1249816
27.8486507
4.43777405
45.4114064
56.2564374
0.27588947
101.943733
72.9179542
2.383685
75.3016392
26.6420941
100.000736
85.3506371
6.06736117
7.40
7.40
570.96
578.36
512.58
0.00
512.58
1,090.94
491.02
217.61
273.41
638.65
75.11
123.69
48.52
247.32
498.41
6.95
752.68
544.71
29.10
573.81
178.87
1,090.93
460.58
78.37
0.67831411
0.67831411
52.3365171
53.0148312
46.9851688
0
46.9851688
100
45.0088914
19.9470182
25.0618732
58.541258
6.88488826
11.3379288
4.44754065
22.6703577
45.6862889
0.63706528
68.9937118
49.9303353
2.66742442
52.5977597
16.3959521
99.9990834
42.2186371
7.18371313
Interpretation:
By Analyzing the Trends of the company from 2011-2012 is in the increasing Position
assets was Gradually increased in 3%and in the year 2012 is was increased to more than
the
Stability of the industry year by year.
71

-2011
PARTICULARS
Sources Of Funds
Total Share Capital
Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Net Block
Investments
Inventories
Sundry Debtors
Loans and Advances
Fixed Deposits
Current Liabilities
Provisions
Net Current Assets
Total Assets
Book Value (Rs)
Mar '11% of total
Mar '10 % of total
7.40 0.67831411
7.40 0.67831411
570.96 52.3365171
578.36 53.0148312
512.58 46.9851688
0
0.00
512.58 46.9851688
100
1,090.94
491.02 45.0088914
217.61 19.9470182
273.41 25.0618732
638.65 58.541258
75.11 6.88488826
123.69 11.3379288
48.52 4.44754065
247.32 22.6703577
498.41 45.6862889
6.95 0.63706528
752.68 68.9937118
544.71 49.9303353
29.10 2.66742442
573.81 52.5977597
178.87 16.3959521
100
1,090.93
460.58 42.2186371
78.37 7.18371313
7.40 0.86459709
7.40 0.86459709
528.62 61.7626097
536.02 62.6272068
319.87 37.3727932
0
0.00
319.87 37.3727932
100
855.89
448.97 52.4565073
173.12 20.2268983
275.85 32.2296089
372.76 43.5523256
51.70 6.04049586
87.47 10.2197712
59.24 6.92145019
198.41 23.1817173
491.04 57.3718585
25.54 2.98402832
714.99 83.5376041
490.79 57.3426492
29.47 3.44319948
520.26 60.7858486
194.73 22.7517555
100
855.90
217.28 25.3864398
145.27 16.9729755
72
Interpretation:
By Analyzing the Trends of the company from 2010-2011 is in the increasing Position
assets was Gradually increased in 2%and in the year 2010 is was increased to more than
%in the long term liabilities.
the Stability of the industry year by year
73
CHAPTER-V
FINDINGS
SUGGESSIONS
CONCLUSIONS
BIBLIOGRAPHY
74
FINDNGS
1. I found that every year the sales are increases in increased manner. It shows good sign for
the organization. It fluctuates only one year due to competition and heavy expenditure in
fixed assets.
2. The Net profit was increased every year. This was happened due to increasing of cost of
goods sold every year
3. In the year 2015, they spend more money towards packing material sealing and
distribution transportation and administration expenses. The shows results in reduction of
operating profit in 2015.
4. On overall ever year cash & bank balance were increased fixed deposits receipts are
decreased inventories on average are in good position.
5. In the year 2015 they minimized the exp .of stores maintenance. But other expensed like
packing materials and transportation charges increased rapidly
75
CONCLUSION
The financial position of INS is quite comfortable with a judicious mix of debt and
equity. The overall assessment of financial statement signifies efficient utilization of the
investments, loans and advances. The profitability of the company appears to be
impressive, as judged by increase in reserves and surplus.
The management discussions and analysis by Directors report and opinions expressed by
Auditors report through financial statements is true and fair view in accordance with the
provisions of the companies Acts, and Accounting standards.
The overall financial position of the company appears to be more than satisfactory.
76
SUGGESTIONS
The company should provide notes to explain items not tallying with the profit
and loss and balance sheet in the Annual report.
Instead of disclosing the combined flows of debtors and loans advances as

decrease/(increase) in trade and other receivables, their separate disclosure will be
more meaningful.
Globalization of economies and the requirement of shares from investors in

capital market, diverse and demanding audience to the company, need a clear and
in-depth in information about the companys financial position in Annual report.
Comparison of basic and diluted EPS to be included in Annual report to predict

the EPS sustainable in future.
77
BIBLIOGRAPHY
SL.
BOOKS:
AUTHOUR NAME
No.
1.
Financial Management
2.
Financial Management
3.
Management Accounting
Kahan & JAIN

I.M.Pandey
R.P.Trivedi
NEWS-PAPERS & JOURNALS:

1. BUSINESS TODAY
2. THE ECONOMIC TIMES
WEBSITES & SEARCH ENGINES

1. www.ins.com
2. www.moneycontrol.com
3. www.googlefinance.com
Annual reports of INS 2011-2015.
78
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INDEX

A financial performance (or financial report) is a formal record of the

"The objective of financial performance is to provide information about the

In our present day economy, FINANCE is defined as the provision of money at

judge the performance of enterprises. Managerial finance is an interdisciplinary approach

SCOPE OF THE STUDY

NEED FOR STUDY

Need of financial management study to diagnose the information contain in

OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS

This is a systematic way to solve the research problem and it is important

MEANING OF RESEARCH DESIGN

1. It includes data gathered from the annual reports of the company.

2.TOOLS OF FINANCIAL STATEMENT ANALYSIS USED

LIMITATIONS OF FINANCIAL STATEMENT:

2. DONT GIVE EXTRA POSITION:

4. ACT OF NON MONITORY FACTORS IGNORED:

Welcome to Integral Network Solutions

Currently we operate as three strategic business units focusing on IT Training, IT

Our Story so far

As a leading Talent Management Solution firm, we at INS Consulting:

At INS Consulting, we provide the following advantages to each of our clients in

We work closely with client companies, identifying needs, culture, economic,factors,

ITES / BPO / KPO

BANKING & FINANCIAL SERVICES

ENGINEERING & MANUFACTURING

BIO TECHNOLOGY / LIFE SCIENCES

ENTERTAINMENT / MEDIA / PUBLISHING

FINANCIAL PERFORMANCE ANALYSIS

component parts of financial statement to obtain a better understanding of the firms

The analysis of financial statement represents three major steps:

The second step is the establishment of significant relationships between the

Finally, the result obtained by means of application of financial tools is evaluated.

In brief financial analysis is the process of selection, relation and evaluation of

Financial statement analysis (or financial analysis) the process of

4. Statement of cash flows: reports on a company's cash flow activities,

Purpose of financial statements by business entities

Owners and managers require financial statements to make important business

Employees also need these reports in making collective bargaining agreements

Prospective investors make use of financial statements to assess the viability of

Government entities (tax authorities) need financial statements to ascertain the

Government financial statements

Financial statements of not-for-profit organizations

Personal financial statements

Audit and legal implications

Standards and regulations

Inclusion in annual reports

Moving to electronic financial statements

Personal balance sheet

Public Business Entities balance sheet structure

Non-current assets (Fixed assets)

5. Treasury shares, including shares held by subsidiaries and associates

Usefulness and limitations of income statement

Some numbers depend on judgments and estimates (e.g. depreciation expense

Guidelines for statements of comprehensive income and income statements of business

Revenue - Cash inflows or other enhancements of assets of an entity during a

Expenses - Cash outflows or other using-up of assets or incurrence of liabilities

Cost of Goods Sold (COGS) / Cost of Sales - represents the

Selling, General and Administrative expenses (SG&A or

Selling expenses - represent expenses needed to sell products

General and Administrative (G&A) expenses - represent

Depreciation / Amortization - the charge with respect to fixed assets

specific (accounting) period. It is a systematic and rational allocation of

Research & Development (R&D) expenses - represent expenses