DR.D.

VEERENDRA HEGGADE
INSTITUTE OF MANAGEMENT STUDIES AND
RESEARCH

VIDYAGIRI, DHARWAD - 580 004

A STUDY ON FINANCIAL PERFORMANCE &

ANALYSIS
AT
SHREE RENUKA SUGARS LIMITED, BELGAUM

Presented by:

Mr. GANESH. C. SHETTY

MBA13010027

INTRODUCTION
India is the second largest producer of sugar in the world. The Indian sugar
industry is the second largest agro industry located in the rural India. The
Indian sugar industry has a turnover of Rs.500 billion per annum and it
contributes almost Rs.22.5 billion to the central and state as tax, and excise
duty every year. About 50 million farmers and a large number of agricultural
laborers are involved in sugar cane cultivation. The sugar industry in the
country uses only sugar cane as input; hence sugar companies
have been established in large sugar cane growing states like
Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu
and Andhra Pradesh. These six states contribute more than
85% of total sugar production in the country.

COMPANY PROFILE
NAME OF THE COMPANY

SHREE RENUKA SUGARS LIMITED

CHAIR PERSON

Mrs. Vidya Murkumbi

REGISTERED OFFICE

BC 105, Havelock Road, Camp, Belgaum 560027

PHONE NO

+91 831 2404000

FAX NO.

+91 831 2404961

TYPE OF INDUSTRY

Sugar Production Industry

YEAR OF ESTABLISHMENT

1995

WEBSITE ADDRESS

www.renukasugars.com

SWOT ANALYSIS
STRENGTH
1. Fully Integrated Player.
2. Excellent relationship with sugarcane
farmer.
3. Right product, quality and reliability.
4. Superior product performance as
compared to competitors.
5. New technology in manufacturing.
OPPORTUNITIES
1. Integrated distillery.
2. Superior technology.
3. Focus towards corporate & industrial
buyers.
4. Track record of successful acquisition
5. Superior utilization of fixed assets

WEAKNESS
1. Lack of connectivity with proper roads
and highway leads to the problem of
delivery of outputs.
2. Extra cost of exporting raw sugars.
3. Now availability of raw sugar in excess.

THREATS
1. Competition from other sugar mills.
2. Pricing policy of the government.
3. Dependent on farmers for supply of
sugarcane.

RESEARCH DESIGN
METHODOLOGY
To fulfill the set of objective regarding study of the ratio analysis it is
necessary to collect data from various sources.
Primary Data
Primary data is collected during the courses of training through observation
and discussion with Departmental Heads, Officers, Accountants and
Assistants.
Secondary Data
Secondary data is collected from published annual reports and prospects of
the company.

OBJECTIVES OF THE STUDY

To study the organization structure of the company
To study the liquidity position of the firm over a period
of 5years
To study the long term solvency of the company
To study the turnover/achievement of the company
To study the overall financial performance of the
company

ANALYSIS AND
INTERPRETATION
TABLE NO 4.1 Analysis of Current Ratio

(Rs. Cr)

YEARS

2007-08

2008-09

2009-10

2010-12

2012-13

Current Assets

243.02

1113.65

1456.31

1906.06

2323.82

Current Liabilities

248.95

1013.44

2136.36

1375.05

4160.69

Current Ratio

0.98

1.09

0.68

1.39

0.56

ANALYSIS AND INTERPRETATION

TABLE NO 4.2 Analysis of Quick Ratio

(Rs. Cr)

YEARS

2007-08

2008-09

2009-10

2010-12

2012-13

Quick Assets

385.15

1068.41

1094.64

924.64

1149.56

Quick Liabilities

248.95

1013.44

2136.36

1375.05

4160.69

Quick Ratio

1.55

1.05

0.51

0.67

0.27

ANALYSIS AND INTERPRETATION

TABLE NO 4.4 Analysis of Stock Turnover Ratio

( Rs. Cr)

YEARS

2007-08

2008-09

2009-10

2010-12

2012-13

Cost of goods sold

1365.05

1425.74

4670.31

4835.94

5251.11

Average Inventory

186.91

594.61

1069.13

1427.55

1889

STR

7.30

2.40

4.37

3.40

2.78

ANALYSIS AND INTERPRETATION

TABLE NO 4.5 Analysis of Stock Holding Period

(Rs. Cr)

YEARS

2007-08

2008-09

2009-10

2010-12

2012-13

Annual Days

360

360

360

360

360

Stock Turnover Ratio

7.30

2.40

4.37

3.40

2.78

Stock Holding Period

49

150

82

105

130

ANALYSIS AND INTERPRETATION

Analysis of Debtors Turnover Ratio

(Rs. Cr)

YEARS

2007-08

2008-09

2009-10

2010-12

2012-13

Net Sales

1757.74

2234.21

5511.19

6362.10

6395.43

Avg. Receivables

48.64

76.46

210.11

246.23

175.01

DTR

36.14

29.22

26.23

25.43

36.54

ANALYSIS AND INTERPRETATION

Analysis of Average Collection Period

(Rs. Cr)

YEARS

2007-08

2008-09

2009-10

2010-12

2012-13

Annual Days

360

360

360

360

360

Debtors Turnover Ratio

36.14

29.22

26.23

25.43

36.54

Average Collection Period

10

12

14

14

10

ANALYSIS AND INTERPRETATION

Analysis of Average Payment Period
Cr)

(Rs.

YEARS

2007-08

2008-09

2009-10

2010-12

2012-13

Annual Days

360

360

360

360

360

Creditors Turnover Ratio

5.48

3.55

3.05

2.78

1.88

Average Payment Period

66

101

118

130

191

FINDINGS

Current ratio of the company showing more variabilitys and it comes down to 0.56 times during the
current year 2012-2013. It is not a good sign

The quick ratio of the firm is decreasing continuously. In recent years, that is 0.27 times during the
current year 2012-13. It is not a good sign hence it affects to liquidity position of the company

The stock turnover ratio of the company is not performing efficiently, during the recent period it
comes down to 7 times to 3 times from 2008-2013. It means that conversion of stock into sales
taking more periods that is 130 days during current period 2012-2013.

The debtor turnover ratio of the company is 36.54 times that is 10 days during the year 2012-2013 it
is almost same during previous years 2007-2008. It indicates that company is having very strict
credit collection policy against its debtor.

The credit turnover ratio of the firm during the current year is 1.88 times that is 191 days it shows
that creditors will provide sufficient time for debt payment. As compared to debtors turnover ratio
company is having an effective credit policy that is collect the debt within 10 days and pay it for
191 days.

RECOMMENDATIONS

The current ratio as per industry acceptable norms should be 2:1 but in the
above analysis it is below 2:1. Hence, it is advisable to the company to
maintain its current ratio for effective liquidity position.

The stock holding period of the company does not perform well during its
current year that is it takes 130 days, therefore it increases holding cost and
carrying cost. So the company has to maintain stock turnover ratio atleast 8
times that is 45 days as per industry norms.

Company has to control its manufacturing expenses to control over gross

profit ratio.

CONCLUSION
The liquidity ratio like current ratio, quick ratio and cash ratio are not so efficient and
they are not according to industry acceptable norms.
Stock turnover ratio is not so efficient during the recent period it takes almost 130 days
to convert stock into sales.
Debtors turnover ratio of the company is very effective it has a strict credit policy and
collects debt within 10 days from the debtors
Credit turnover ratio of the company is very liberal. Creditors give more than 191 days
time for payment of its debt.

BIBLIOGRAPHY

REFFERED BOOKS
FINANCIAL MANAGEMENT - I. M. PANDEY
Khan M.Y and Jain P.K, Financial Management: Theory and Practice, 7th
Ed. Tata McGraw-Hill Publishing (2012) New Delhi ISBN 9774567124.
Shukla and Others, Advanced Accounts, Vikas Publishing House, New
Delhi (2010)
Pandey I.M, Financial Management 9th Ed.,, Vikas Publishing House, New
Delhi (2012)