A
FINANCIAL STATEMENT ANALYSIS
OF
AMBUJA CEMENT Ltd.
Project Report
Submitted to
Prof. Riddhi Sanghvi
Faculty Member,
NGI – MBA College,
(Affiliated with GTU)
On Date
28
thJULY, 2011.
In partial fulfillment of the requirement for MBA programme
Sem - II
Batch 2010-12
Submitted by
Bina H. Raval
A
PROJECT REPORT
ON
Preface
As a student of MBA it is important to study practical things with theoretical knowledge of financial management.
The Financial Analysis of “AMBUJA CEMENT LIMITED-KODINAR” based on the Annual reports for five consecutive years from the year 2006 to 2010.
The basic objective behind making such analytical reports is to have the knowledge of Financial structure and corporate environment. Moreover I can develop written communication and analytical skill.
The report contains information about financial condition of the company. It also highlight future plan of the company. Also it contains growth rate of company in various aspects and financial soundness of company. From this financial statement analysis, I learnt a lot.
Acknowledgement
This successful project report has been made possible through the direct and indirect cooperation and guidance of various people for whom I wish to express my appreciation and gratitude.
First foremost, my intellectual debt is to those people who have contributed significantly guidance to complete my project report successfully.
I am extremely thankful to my faculty member Prof. Riddhi Sanghvi who guided me and my principal sir Dr. Ved Vyas Dwivedi (NGI-MBA) who give me this golden opportunity.
I am extremely thankful to Mr. S.K Udaiwal (D.G.M. H.R) ACL, Kodinar for getting me acquainted to the company and giving me the golden opportunity to carry out this interesting training at Ambuja Cement Ltd.
I would like to thank Mr. Harshad Patel (G.M., H.R. Dept), Mr. Sunil Kumar (Sr. officer, personnel dept.) who helped me a lot to do my project successfully.
I am extremely thankful to Mr. Ajit Kachhela (Mechanical Engineer),ACL who helped me a lot. He gave me knowledge about production system, Transportation system, Import & Export policy and also many other areas about Ambujanagar Plant
DECLARATION
DECLARATION
I the undersigned Raval Bina H. a student of M.B.A. of Noble Engineering College, Junagadh. Hereby declare that the project work presented in this report is my own work and has been carried out in charge of M.B.A. section.
This work has not been previously submitted to any other university for any examination.
Date: 28/07/2011 Signature Place: Junagadh Raval Bina H.
Executive Summary
My Financial Analysis project is on “AMBUJA CEMENT LIMITED-KODINAR”. Main objective of this project is to know the financial strengths and weaknesses of ACL
LIMITED For that I had taken the five consecutive years’ annual report from 2006 to 2010. In addition to these annual reports of ACL LIMITED I had also used various
Books and Web based information to cover the current trends of the company and its competitors, as well as the whole industry.
To analyze the firm, I have used various calculation based ratios and also study some other statements like Trends analysis, DU-Pont Charts etc.
I found that the ACL LIMITED is doing well in general. Most of the graphs and Ratios are supporting me to say ACL LIMITED a good company. ACL is consistently going ahead.
INDEX
CERTIFICATE
PREFACE
I
ACKNOWLEDGEMENT
II
EXECUTIVE SUMMARY
III
1
GENERAL INFORMATION
7
1.1 HISTORY
8
1.2 COMPANY AT GLANCE
10
1.3 EXISTING MANAGEMENT BODY
12
1.4 COMPANY VALUES
13
1.5 DEPARTMENTS OF COMPANY
14
1.6 DIFFERENT PRODUCTION UNITS
15
1.7 MISSION & VISION
16
1.8 ORGANIZATION CHART
17
1.9 AWARDS & ACHIEVEMENTS
18
1.0 SWOT ANALYSIS
20
1.1 PORTER’S FIVE FORCES MODEL
22
1.2 PURPOSE OF STUDY
24
2
INTRODUCTION TO FINANCIAL ANALYSIS
26
3
TREND ANALYSIS
33
4
HORIZONTAL ANALYSIS
49
5
VERTICAL ANALYSIS
57
6
DU PONT ANALYSIS
65
7
RATIO ANALYSIS
69
8
FINDINGS
79
9
RESULT AND SUGGESTION
81
10
CONCLUSION
86
11
BIBLIOGRAPHY
88
General
Information
Ambuja Cements Ltd. (ACL) is one of the leading cement manufacturing companies in India. The Company, initially called Gujarat Ambuja Cements Ltd., was founded by Narotam Sekhsaria in 1983 with a partner, Suresh Neotia. Sekhsaria’s business acumen and leadership skills put the company on a fast track to growth. The Company commenced cement production in 1986. The global cement major Holcim acquired management control of ACL in 2006. Holcim today holds little over 46% equity in ACL. The Company is currently known as Ambuja Cements Ltd.
The company started its commercial production in October in 1986. Later the company in order to expand its production setup and another plant in Kodinar itself called Gaj Ambuja Line-1 in 1992 followed by the third one Gaj Ambuja Line-2 in 1998 making the total production to reach approximately three million tons per annum marks.
ACL has grown dynamically over the past decade. Its current cement capacity is about 25 million tones. The Company has five integrated cement manufacturing plants and eight cement grinding units across the country. ACL enjoys a reputation of being one of the most efficient cement manufacturers in the world. Its environment protection measures are on par with the finest in the country. It is one of the most profitable and
build a captive port with three terminals along the country’s western coastline to facilitate timely, cost effective and environmentally cleaner shipments of bulk cement to its customers. The Company has its own fleet of ships. ACL has also pioneered the development of the multiple bio-mass co-fired technologies for generating greener power in its captive plants.
Ambuja Company is the first company to introduce the concept of bulk cement movement by sea in India. This resulted in speedier transportation and brought many coastal markets within easy reach. Ambuja cements have a port terminal at Muldwarka, Gujarat. It is an all weather port that handles ships with 40,000 DWT. The port has a fleet of seven ships with a capacity of 20500 DWT to ferry bulk cement to the packaging units. The company has bulk cement terminals at Surat, Panvel, and Galle.
ACL has always met tough challenges and seized the opportunities that have come its way. It has nurtured the same spirit of enterprise and search for cutting-edge technology with which it started. It thus continues to be the driving force and in many ways a benchmark for the cement industry in India.
DIVISIONS:Ambuja cement Ltd. Gaj Ambuja cement Ltd. Line-1
Gaj Ambuja cement Ltd. Line-2
YEAR OF ESTABLISHMENT : Sept., 1986
INVESTMENT : Rs. 86 crores
PROMOTORS OF THE CO. : Mr. Narrotam Sekhsaria Mr. Suresh Neotia
REGISTERED OFFICE:-
P. O. Ambujanagar, Taluka- Kodinar, District-Junagadh,
Gujarat - 362 715
CORPORATE OFFICE:Mumbai
BANKER: -Bank of India
Bank of Baroda ANZ Grind lays Bank Punjab National Bank
AUDITOR: -M/s.Dalal & Shah M/s. Chaturvedi & co. M/s. P.M. Nanabhoy
SIZE OF THE FIRM:Large scale unit
COMPETITORS Ultra tech cement Jaypee cementSanghi India cement Grasim
NAME DESIGNATION
Mr. Onne van der Weijde Managing Director
Mr. B.L. Taparia Company Secretary & Head Corporate Services
Mr. Sanjeev Churiwala CFO
Mr. Ghassan Broummana Head - Technical Support Services Mr. S.N. Toshniwal Business Head (East)
Mr. J.C. Toshniwal Business Head (North)
Mr. Ajay Kapur Business Head (West & South) Ms. Meenakshi Narain Joint President (HR)
Mr. Shakti Arora Head - Central Purchase Officer
1. Delighted Customers
My actions speak more about my company than a mere advertisement.
My function, however remote to the customer, ultimately leads to satisfying him. My connection to him is like God.
I may not see it. But, it exists. 2. Inspired Employees
I don't need orders to trust my colleagues. I don't need orders to seek challenges. Or to meet them either.
That, I know, is I CAN. 3. Enlightened partners
I will build enduring relationships with my dealers and suppliers.
The full benefit of our engagement with dealers and suppliers will only come when they act as partners in satisfying the customer. I will, therefore, create win-win associations between my dealers, suppliers, my company and my customers. 4. Energised Society
I will energise, involve and enable people around me to realize their potential. The communities around me are a part of my support system.
A small improvement in their life will have a multiplier effect for everyone. 5. Cleaner Environment - Pollution control
I will leave a cleaner planet for my children. For this, I don’t need the rule book. 6. Cleaner Environment – natural resources
I will use Nature responsibly and conserve its resources.
If I allow Nature to replenish itself, it will provide me with a permanent livelihood. And, the benefit will extend even to my children’s children.
1) Personnel Department 2) H.R.D Department 3) Account Department
4) Sales & Distribution Department 5) Administration Department 6) Land Department
7) Stores Department 8) Costing Department 9) Security Department
10) Electronic Data Processing Department 11) Purchasing Department
12) Packing Department
13) Bulk Cement Terminal Department 14) Mines Department
15) Project Planning & Development Department 16) Civil Department
17) Instrumentation Department 18) Electrical Department 19) Mechanical Department
20) Diesel Generator Department & Thermal Power Plant 21) Research & Development Department
22) Laboratory Department
24) Hospital
25) Audit Department
DIFFERENT PLANTS & SUBSIDIARY
COMPANIES, THEIR LOCATION &
PRODUCTION UNITS
1. AMBUJANAGAR40km. away from Veraval in Saurastra, Gujarat. This location consists of three units namely:
a. Ambuja
b. Gaj Ambuja Line – 1 c. Gaj Ambuja Line – 2 2. DARLAGHAT:
Near Simla in Himachal Pradesh with one unit. 3. GADCHANDUR:
Near Chandrapur in Maharastra with one unit. 4. BHATINDA:
Punjab – Grinding unit. 5. ROOPNAGARSS:
ORGANISATION CHART
Unit Head
Head Works Head Commercial
Head-p&c Head plant Head-maint Head-Opm Head DG Head Prod Head-Mech Head E&I Head QC Manager Head Civil Plant Head Amb Plant Head
Gaj Head-Gaj Head Prod Head-Mech Head E&I Head proj Head AFR Head Dev Civil Process Eng Head Civil Head-HR Head Trg & De Head BCT- Muldwarka Sanand (GU) QC Manager Head Mines Head operations Head maint Head min res Head-A/c Head Environment Head OH&S
2004-2005
o Ernst & Young ‘Entrepreneur of the Year’ (Manufacturing)
o Asian Institute of Management Award for ‘Environmental Excellence’ o Genentech 'Environment Excellence Award' in the Gold category by
Genentech Foundation to GACL, Bhatinda
o 'Environment Week awards' for plantation, air, noise and water
pollution control and community development
o 'Safety Week awards' for safer mining
•
2005-2006
o 'Asian CSR Award' (Environment Excellence) 2005 for corporate
sustainable development at GAC (India) Works
o Centre for Science and Environment Green rating Project award to
GACL (second rank)
o 'Best Environment Management Practices Award' for the Ropar unit
from the State Pollution Control Board
o Capelin 'Certificate of Export Recognition' to GACL (Mumbai) in
recognition of outstanding export performance
o Awards won by the Maratha Limestone Mine of Maratha Cement
Works (a unit of Ambuja Cements Ltd) Upparwahi
•
2007
o In Mines Environment & Mineral Conservation Week–Indian Bureau
of Mines
o 'Corporate Excellence Award 2007' awarded to ACL by the Indian
Institute of Materials Management, Chandigarh
o Dun & Bradstreet 'American Express Corporate Award 2007' to ACL o 'National Award for Environmental Excellence' in Opencast Mining
from NCBM (2nd place – to Abuja’s Sugala Limestone Mine)
•
2008
o 'Certificate of Merit' by Rajasthan State Productivity Council, Jaipur
AWARDS AND ACHIVEMENTS
Head QA&RD Academy
School : Rabriyawas
Most profitable cement company in India. Lowest cost producer of cement in the world.
Its environment protection measures are at par with the best in the world. The pollution levels at all its cement plants are lower than the rigorous Swiss standards of 100 mg/NM3.
The only cement company to be awarded with the National Quality Award. First cement company to first to receive the ISO 9002 quality certification. Received ISO 14000 certification for environmental systems.
India’s largest exporter of cement.
Received best award for highest exports by CAPEXIL.
First company to introduce the concept of bulk cements movement by sea in die.
SWOT
IN T E R N A L E N V IR O N M E N
1) Lower energy cost due to improved value coal and use of non conventional fuels.
2) Lower transportation cost due to increased transport through sea router fro bulk shipping.
3) Excellent management team to cope with changing environment. 4) Very less dependent on
government coal and power. 5) High distribution efficiency and
sound to cope up with economic situation.
6) Processing own Jetty and Ships useful for timely and cheap transport.
STRENGTH
1) No national geographic coverage as in case of competition.
2) Very limited fragmentation of plant, which avoid is presence in very sub regional markets.
3) The pace of new capacity addition by the industry has not been as fast as previously, therefore pricing pressure.
WEAKNESS
E X T E R N A L E N V IR O N M E N TOPPORTUNITY
1) Company’s financial condition is good so can start a new
manufacturing unit and can increase production.
2) Basic raw material is easily available so can reduce cost and can compete other.
3) Housing construction in the urban, & affordable housing loan
provision by bank can hike demand.
4) Can get more foreign exchange by increase bulk cement capacity through the ship.
THREATS
1) Threats from the economic cycles. I.e. Recession or growth. 2) Government policies, local political changes & interruption in management.
3) Exchange rate fluctuation having direct effect on bottom line as well as on export.
Porter’s
Five
Forces
Model
RIVALRY
Ultra tech cement Jaypee cement Sandhi ACC
SUPPLIER
NEW ENTRANTS
u
BUYER
SUBSTITUTES
THREATS OF NEW ENTRANCE Unorganized player New upcoming unitsBUYER POWER
Large volume buyers Real estate contractors Foreign countries SUPPLIER POWER Local suppliers Different inputs -Raw material Gypsum Silica Red clay Fly ash Coal THREAT OF SUBSTITUTE Fly ash Silica
PURPOSE OF STUDY
PRIMARY OBJECTIVE :
To assist in decision making the accounting analysis.
To provide reliable financial information about economic resources & obligations of a business firm.
To provide other needed information about changes in such economic resources and obligations.
SECONDARY OBJECTIVE:
To know the details of other departments and its work system in the company. production department Raw Material 1. Lime stone 2. Gypsum 3. Silica 4. Red clay 5. Fly ash 6. Coal Types of Cement :
1. PPC(Pozolonz Port line Cement) 2. OPC(Ordinary Port line Cement)
Human Resource Department
Time Keeping System For Plant:
Shift - A 06:00am to 02:00pm
Shift - B 02:00pm to 10:00am
Shift - C 10:00pm to 06:00am
For Table Work Job:
09:00am to 01:00pm
(01:00pm to 02:00pm – Lunch Time) 02:00pm to 06:00pm
Research & Development Department
a) Physical Laboratory b) Chemical Laboratory
c) XRF(X-Ray Florescence Spectrometer)
Marketing Department
Marketing channel distribution in all over saurastra region. Advertisements
Financial
Statement
Analysis
INTRODUCTION
The primary objective of financial reporting is to provide information to present and potential investors and creditors and other in making rational investment, credit and other decisions. Effective decision making requires evaluation of the past performance of companies and used by investors, creditors, and professional analysis for analyzing and interpreting the information contained in financial statements.
Any successful business owner is constantly evaluating the performance of his or her company, comparing it with the company's historical figures, with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of your company's effectiveness, however, you need to look at more than just easily attainable numbers like sales, profits, and total assets. You must be able to read between the lines of your financial statements and make the seemingly inconsequential numbers accessible and comprehensible.
OBJECTIVE OF FINANCIAL STATEMENT ANALYSIS
Financial statement analysis is the collective name for the tools and techniques that are intended to provide relevant information to decision-makers. The purpose of financial statement analysis is to assess a company’s financial health and performance. Financial statement analysis consists of comparisons for the same company over period of time and comparisons of different companies either in the same industry or in different industries. Financial statement analysis enables investors and creditors to
(1) Evaluate past performance and financial position
The starting point in the analysis of a company is to look at the record. Information about past performance is useful in judging future performance. For Example, trends of past sales, earning, cash flow, profit margin, and return on investment provide a basis for evaluating the efficiency of a company’s performance and aid in assessing its prospects.
An assessment of current status will show where the company stands at present, such as the company’s inventories, borrowings, and cash position. To a large extent, the expectation of investors and creditors about future performance are shaped by their evaluation of past performance and current position.
Individual investors are often passive and they rarely intervene in the working of a company as long as the company is reasonably successful. Their evaluation of the company helps them assess prospects for their investments, and investors who are dissatisfied with institutional investors are generally more actives and may insist on major management changes when the company does not fare well. Creditors are concerned with
(2) Predication of future performance
Investors and creditors use information about the past to assess the prospects of a company. Investors expect an adequate return from the company in the form of dividends and market price appreciation. Creditors expect the company to pay interest and repay the principal in accordance with the terms of lending. Therefore, they are interested in predicting the earning power and debt-paying ability of the company.
Investor and creditors try to balance expected risks and returns. The returns they receive should be commensurate with the risks they perceive. If future returns are expected to fluctuate widely, they are much more difficult to predict then when results are expected to fluctuate within a narrow range. Thus, investors and creditors would invest in, or lend to, high-risk ventures only if they expect adequately high returns and would accept low returns only if the expected risk is low.
SOURCE OF INFORMATION
Individual investors and creditors must often depend upon published sources of information about a company. The most common sources of information about listed companies are company reports, stock exchange, business periodicals, and information services.
1) Company
Every company publishes an annual report, which contains valuable financial and other information about the company. Annual reports are the beginning and ending points in obtaining information about individual companies. As a starter they provide an overview of the company’s business, its status and its performance for a series of years. At the end of the information gathering process, annual reports are used to corroborate the vast array of company-specific data assembled from various sources.
• Schedules and notes to the financial statements • Auditor’s report
In addition, some companies provide financial highlights and a summary of financial performance for the past five or ten years. The annual report is sent to the shareholders of the company, free of charge. Listed companies are also required to publish a quarterly statement of financial results within one month from the end of the quarter. These statements are typically not audited unlike the annual financial statements and are published in leading newspapers.
2) Stock
Listed companies must file copies of their annual reports, as well as additional documents such as a statement of distribution of share ownership and the quarterly statement, with the stock exchanges in which they are listed. The Bombay Stock Exchange (BSE) is the oldest with it. The National Stock Exchange (NSE) is the other leading stock exchange in India. Both BSE and NSE have number publications giving useful financial and other information about companies.
Listing agreements require that companies keep stock exchanges promptly informed of major developments affecting them, such as change of management, bonus and dividend decisions, strikes, and plant closures.
3) Business
Business newspaper and magazines are important and, often, timely sources of financial and business news. The Economic Times is the oldest and the most widely read financial daily in the country. Business Line, Business Standard, and Financial
Express are the other leading financial dailies in India. All these papers give daily stock
prices and carry news items and analytical write-ups on companies. Most general newspapers devote a few pages to business news. Financial and business magazines such as Business India, Business World and Business Today regularly carry studies of companies and industries.
4) Information
In recent years, a number of information services have sprung up. Periodical Company and industry studies are brought out by CRISIL and ICRA. These studies
contain condensed financial statements of companies as well as other information such as management, foreign collaboration, major competitors, and industry overview. Several useful studies of financial ratios are also available, notably the ones published by the Center for Monitoring Indian Economy (CMIE).
Economic reports and forecasts are available from the government and the Reserve Bank of India and from private sources. Industry-specific data come from the government, trade associations, and a variety of other sources. Analysts in stock brokerage firms and investment advisory services prepare periodic reports on companies and industries for their clients and sometimes for outsiders.
Sophisticated users of financial statements invariably seek more information for their purpose. For example, banks and financial institutions often demand additional information for processing loan requests. Similarly, credit rating agencies need considerably more information from companies requesting rating than that available from published reports. In additions, there are many agencies that undertake private information search for a fee. Professional analysts collect information from company executive during plant visits and field trips.
5) Internet & intranet:
Search engines like Google go a long way in providing useful information for such projects. Days have gone when you have to wait for hours to gather information related to any particular topic. Information technology and Internet has brought the global world at your fingertip. Local area networks are also key source of information now a day. Increasing interdependence among the various sub units of the business has made LAN networks a future to consider as a useful source of secondary information.
USERS OF FINANCIAL ANALYSIS:
Financial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationships between the items of the balance sheet and the relationships between the items of the balance sheet and the profit and loss account. Financial analysis can be undertaken by management of the firm, or by parties outside the firm, viz. Owners, creditors, investors and others. The nature of analysis will differ depending on the purpose of the analyst.
• TRADE CREDITORS:
Trade creditors are interested in firm’s ability to meet their claims over a very short period of time. Their analysis will, therefore, confine to the evaluation of the firm’s liquidity position.
• SUPPLIERS OF LONG-TERM DEBT
Suppliers of long term debt, on the other hand, are concerned with the firm’s
long-term solvency and survival. They analyze the firm’s profitability over time, its ability to generate cash to be able to pay interest and repay principal and the relationship between various sources of funds. Long term creditors do analyze the historical financial statements, but they place more emphasis on the firm’s projected, or Performa, financial statements to make analysis about its future solvency and profitability.
• INVESTORS
Investors, who have invested their money in the firm’s share, are most concerned about the firm’s earnings. They restore more confidence in those firms that show steady growth in earnings. As such, they concentrate on the analysis of the firm’s present and future profitability. They are also interested in the firm’s financial structure to the extent it influences the firm’s earnings ability and risk.
• MANAGEMENT
Management of the firm would be interested in every aspect of the financial analysis. It is their overall responsibility to see that the resources of the firm are used most effectively and efficiently, and that the firm’s financial condition is sound.
TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS
Very few numbers in financial statements are significant in themselves, but meaning inferences can be drawn from their relationship to other amounts or their change from one period to another. The tools of financial statement analysis help in establishing significant relationships and changes. The most commonly used analytical techniques are:
1) TREND ANALYSIS (Index Analysis)
2) HORIZONTAL ANALYSIS (Comparative Analysis) 3) VERTICAL ANALYSIS (Common size Analysis) 4) DU PONT ANALYSIS
TREND
ANALYSIS
INTRODUCTION
Trend analysis involves calculation of percentage changes in financial statement items for a number of successive years. It is an extension of horizontal analysis to several years. Trend analysis is carried out by first assigning a value of 100 to the financial statement items in the following years as a percentage of the base-year value.
Trend analysis over longer periods helps in identifying certain basic changes in the nature of the business. Since many large corporations publish a summary of operating results and selected financial indicators for five years or more, it is possible to perform trend analysis using published reports.
USE OF THE TREND ANALYSIS:
• Provide information related to well-observed behavior of accounting an entity. • Easier to understand.
TREND ANALYSIS:
For carrying out the trend analysis, I have selected 2006 as the base year. All the financial data of the year 2006 have been arbitrarily assigned the value of 100.The values of other financial data is expressed in terms of these data as reference data. This analysis is carried out in two phases as balance sheet analysis and profit and loss account analysis.
Balance Sheet Analysis
Profit & Loss Analysis
BALANCE SHEET ANALYSIS:
SOURCES OF FUNDS:
SHAREHOLDER’S FUND
:
YEAR RS(Cr) PERCENTAGE 2006 3491.72 100 2007 4859.26 127.76 2008 5672.87 162.46 2009 6470.90 185.32 2010 7330.10 209.92From the graph given above we can analyze that there is a continuous increase in the Shareholder’s fund of the company over the last five financial years is 109.92%.It shows that company’s credit is increasing
LOAN FUNDS
:
YEAR Rs(Cr) PERCENTAGE 2006 865.38 100 2007 338.70 39.13 2008 288.67 33.71 2009 165.70 19.35 2010 65.03 7.59
From the above graph we can analyze that there is a continuous decrease in the loan fund of the company until the previous financial year 92.41. In the present financial year there is a sudden decrement in the percentage of the loan funds. It shows that company is making profit.
TOTAL SOURCES OF FUNDS
:
YEAR RS (Cr) PERCENTAGE 2006 4740.96 100 2007 5576.76 117.62 2008 6342.29 113.77 2009 7122.44 150.23 2010 7926.01 167.18
From the above graph we can analyze that due to an overall increase in the equity funds used there is an overall increase in the sources of funds available to the company except in the year 2006. This shows that on a whole the company is expanding. Grow is 67.18%.
APPLICATIONS OF FUNDS
:
FIXED ASSETS
:
YEAR RS (Cr) PERCENTAGE 2006 3124.11 100 2007 3674.75 117.62 2008 5139.97 164.52 2009 6165.47 197.002010 6558.45 209.93
From the above graph we can analyze that there is a steady growth of the fixed assets for the company except in the year 2006.This shows efficient utilization of the sources of funds by the company. Ii increase 109.93%.
INVESTMENTS
:
YEAR RS (Cr) PERCENTAGE 2006 1133.12 100 2007 1480.36 130.64 2008 332.39 29.33 2009 727.01 64.16 2010 625.95 55.24From the above graph we can say that there is fluctuating increase and decrease in the investment made by the company but in the year 2009 there is sudden increment in the investment. It is decrease 44.76%.
CURRENT ASEETS, LOAN AND ADVANCES
:
YEAR RS (Cr) PERCENTAGE 2006 1177.61 100 2007 1583.72 134.48 2008 2339.45 198.66 2009 1979.34 168.08 2010 3135.33 266.24
From the above graph we can analyze that there is a continuous growth in the current assets, loan and advances of the company. However the major contributors to this growth in the current assets are debtors and other current assets. Inventories contribute a very little portion of the same. The rise in quantity of debtors is a major cause of concern. It is increase 166.24%.
CURRENT LIABILITIES, PROVISIONS
:
YEAR RS (Cr) PERCENTAGE
2006 701.59 100
2007 1168.29 166.52
2008 1473.80 210.06
From the above graph we can analyze that there is a continuous rise in the current liabilities and provisions of the company. This shows that the company is expanding its operations on a continuous basis. However on the other hand a similar rise in the current assets is also required. It is increase 241.25%.
NET CURRENT ASSETS
:
YEAR RS (Cr) PERCENTAGE 2006 474.12 100 2007 415.43 87.62 2008 865.65 182.58 2009 238.25 50.25 2010 741.15 156.32
From the above graph we can analyze that there is a fluctuation in the net current asset of the company. This also indicates that major part of the company is financed into its day-to-day operations. But in 2010 it again increased. It is increase 56.32%.
PROFIT & LOSS ANALYSIS:
INCOME
:
YEAR RS (Cr) PERCENTAGE
2006 6381.95 100
2007 5985.91 93.79
From the above graph we can analyze that there is a continuous rise in the income levels of the company. Income of the company is dependent mostly on sales of its products. It is increase 19.67%.
EXPENDITURE
:
YEAR RS (Cr) PERCENTAGE 2006 4540.35 100 2007 4080.48 89.87 2008 4748.53 104.58 2009 5529.41 121.782010 6002.47 132.20
From the above graph we can analyze that there is a continuous rise in the total expenditure of the company. This should be a major cause of concern for the company. It is increase 32.20%.
PROFIT BEFORE TAX
:
YEAR RS(Cr) PERCENTAGE
2006 1861.60 100
2007 2789.36 149.83
2008 1969.84 105.81
From the above graph we can analyze that there is a fluctuation in the profit before taxation. Obviously a sharp rise in the profits is not experienced for the present financial year. This is not a good sign for the company. It is decrease 10.73%.
NET PROFIT
:
YEAR RS(Cr) PERCENTAGE 2006 1503.25 100 2007 1846.11 122.80 2008 1402.27 93.28 2009 1218.37 81.042010 1263.61 84.05
From the above graph we can analyze that there is a fluctuation in the net profit of the company. This present financial year shows a strong net profit for the company compare to the year 2006.It is decrease 15.95%.
PROFIT & LOSS ANALYSIS RESULT
1 Share Holders Fund 109.92
2 Loan Funds 92.41
3 Total Sources Of Fund 67.18
4 Fixed Assets 109.93
5 Investment 44.76
6 Current Assets, Loan & Advances 166.24
7 Current Liabilities 241.25
8 Net Current Assets 56.32
NO PARTICULARS INCREASE (%) DECREASE (%)
1 Income 19.67
2 Expenditure 32.20
3 Profit Before Tax 10.73
HORIZONTAL
ANALYSIS
HORIZONTAL ANALYSIS:
INTRODUCTION:
Financial statements present comparative information for the current year and the previous year. A simple approach to financial statement analysis, known as Horizontal
analysis, is to calculate amount changes and percentage changes from the previous year
to the current year.
While an amount change in itself may mean something, converting amount changes to percentages is more useful in appreciating the order of magnitude of the change.
USE OF THE HORIZONTAL ANALYSIS:
• To obtain the changes among various accounting information in respect to a base year.
• This information provides insights related to variances in two results. • This variance facilitates decision-making.
• These changes can be obtained for a series of years. • It helps in formation of financial strategies.
HORIZONTAL ANALYSIS:
For carrying out the horizontal analysis, I have selected the two financial years of 2009 and 2010. This analysis is carried out in two phases as the balance sheet analysis and profit and loss account analysis.
BALANCE SHEET ANALYSIS:
SOURCES OF FUNDS:
SHAREHOLDER’S FUNDS
:
YEAR VALUE (in Cr) CHANGE (%)
2009 6470.90 13.27
2010 7330.10
Due to changes in the shareholders funds, the total change occurring in the equity funds is not similar to the changes occurring as a result of the changes in the reserves and surplus of the company.
LOAN FUNDS
:
YEAR VALUE (in Cr) CHANGE (%)
2009 165.70 -60.75
2010 65.03
From the above table we can observe that the increment in the total loan funds is mainly due to the increment in the unsecured loan funds being used by the company.
APPLICATIONS OF FUNDS:
FIXED ASSETS
:
YEAR VALUE (in Cr) CHANGE (%)
2009 6164.47 6.39
2010 6558.45
Due to the increase in the depreciation value of the fixed assets then also there is an increment of about 6.39 percent in the value of fixed assets as compared to last financial year.
INVESTMENT
:
YEAR VALUE (in Cr) CHANGE (%)
2009 727.01 -13.90
2010 625.95
Here we observe that there is sudden decrement in the value of investment made by the company which changes up to 13.90 percent compare to the year 2009.
CURRENT ASSETS, LOAN AND ADVANCES
:
YEAR VALUE (in Cr) CHANGE (%)
2009 1979.34 58.40
2010 3135.33
From the above table we can observe that the increase in the current assets as compared to the previous financial year is about 58.40 percent. However here the analysis of the quality of the current assets for the company is major concern.
CURRENT LIABILITIES, PROVISIONS
:
YEAR VALUE (in Cr) CHANGE (%)
2009 1741.09 37.51
2010 2394.18
From the above table we can observe that the increase in the current liabilities of the company is around 37.51 percent as compared to the previous financial year. This increase is mostly provided due to the increase in the creditors of the company.
NET CURRENT ASSETS
:
YEAR VALUE (in Cr) CHANGE (%)
2009 238.25 211.08
2010 741.15
Net current assets are obtained as the difference between the current assets and the current liabilities. From the above table we can observe that the increase in the working capital of the company as compared to the previous financial year is about 211.08 percent.
INCOME
:
YEAR VALUE (in Cr) CHANGE (%)
2009 7332.71 04.16
2010 7637.81
From the above table we observe that there is an increase in the total income of the company compare to previous year. It shows the good efficiency of the company.
EXPENDITURE
:
From the above table we observe that there is an increase in the total expenditure of the company compare to previous year. It shows inverse effect on the company.
PROFIT BEFORE TAX
:
YEAR VALUE (in Cr) CHANGE (%)
2009 1803.30 -7.84
2010 1661.87
From the above table we observe that the decrease in the profit before taxation is significantly high as compared to the previous financial year.
NET PROFIT
:
YEAR VALUE (in Cr) CHANGE (%)
2009 1218.37 03.71
2010 1263.61
From the above table we can observe that the increase in the net profit is significantly higher as compared to previous financial year.
YEAR VALUE (in Cr) CHANGE (%)
2009 5529.41 08.55
BALANCE TO BALANCE SHEET
:
From the above table we can observe that the increase in the net profit is significantly higher as compared to previous financial year. It shows companies good growth.
YEAR VALUE (in Cr) CHANGE (%)
2009 169.74 58.81
BALANCE SHEET ANALYSIS RESULT
PROFIT & LOSS ANALYSIS RESULT
NO PARTICULARS INCREASE (%) DECREASE (%)
1 Share Holders Fund 13.27
2 Loan Funds 60.75
3 Fixed Assets 6.39
4 Investment 13.90
5 Current Assets, Loan & Advances 58.40 6 Current Liabilities & Provisions 37.51
7 Net Current Assets 211.08
NO PARTICULARS INCREASE (%) DECREASE (%)
1 Income 04.16
2 Expenditure 08.55
3 Profit Before Tax 7.84
4 Net Profit 03.71
VERTICAL
ANALYSIS
INTRODUCTION:
Vertical analysis is the proportional expression of each item on a financial statement to the statement total. The results of vertical analysis are presented in the form of common-size-statements in which all the elements within each statement are expressed in percentage of some common number and always add up to 100 per cent. The items in the profit and loss account are usually expressed as percentages of sales, while the balance sheet items are given as percentages of total shareholders’ funds and liabilities or of total assets.
Vertical analysis helps in making comparisons of companies that differ in size since the financial statements are expressed in comparable common-size form. Further, a comparison of common-size statements for several years may reveal important changes in the components from one year to the next.
USE OF THE VERTICAL ANALYSIS:
• Give information related to proportion of factors contributing to the assets or the liabilities.
• Help on focusing which expenses contribute the most, and which contributes the least.
• Helps in providing information related to high return & low return assets. • Help in formation of strategies to achieve high return from assets.
VERTICAL ANALYSIS
For carrying out the vertical analysis the financial years selected are 2009 and
2010. The entire vertical analysis is carried out in the various phases as explained below step by step.
BALANCE-SHEET ANALYSIS
SOURCES OF FUNDS:
In this analysis the total sources of funds are assumed to be 100 percent and the percentage formation by the debt and equity funds is calculated.
TYPESOF FUNDS 2009 2010 R.S(Cr) % R.S(Cr) % EQUITY SHARE CAPITAL 304.74 4.28 305.97 3.86 EMP.STOCK OPTION OUTSTANDING 0.24 0.003 1.34 0.02
RESERVE & SURPLUS 6165.92 86.57 7022.79 88.60
SECURED LOAN 100.00 1.40 0 0
UNSECURED LOAN 65.70 0.92 65.03 0.82
DEFF TAX LIAB 485.84 6.82 530.88 6.70
that there is a decrease of about 0.42 percent in the shareholders funds forming the total sources of funds. Talking about Reserve & Surplus the total holding of it from total sources of fund in the year 2009 is 86.57% and in year 2010 is 88.60% and secured loan the total holding of it from total sources of fund in the year 2009 is 1.40% and in year 2010 is 0.00% and unsecured loan the total holding of it from total sources of fund in the year 2009 is 0.92% and in year 2010 is 0.82%.
APPLICATION OF FUNDS
In this analysis the total application of funds are assumed as 100 and the percentage formation by each of the individual components is carried out by calculation.
TYPES OF FUNDS 2009 2010 R.S(Cr) % R.S(Cr) % FIXED ASSETS 6154.47 86.41 6558.45 82.74 INVESTMENT 727.01 10.21 625.95 7.90 NET CURRENT ASSETS 238.25 3.35 741.30 9.35 MISCCELENEOUS 2.71 0.04 0.46 0.005 TOTAL 7122.44 100 7926.16 100
From the above graph we can observe that comparing the two financial years there is a reduction of almost 3.67% in the fixed assets constitution in the application of funds. There is an increase of 6.00% in the net current assets constitution of the application of funds. This shows that the company is expanding its operations on a whole.
Another important point to be noted is that the investment also decreases 2.31%. This shows that the company is using a very aggressive mode of financing in the recent two financial years.
Net current assets are increased 6% than previous year 2009 this shows company has strong liquidity than 2009.
To finalize we can say that the company constitutes a majority of its funds on the net current assets or the day-to-day operations financing. So the company needs to manage this working capital arrangement properly.
PROFIT AND LOSS ANALYSIS
INCOME:
In carrying out this financial analysis we have assumed the total income of the company equal to 100 percent and by calculation we want to obtain how much percentages each of the components constitutes to the total incomes.
INCOME
2009
2010
RS(Cr) % RS(Cr) %
NET SALES 7076.87 96.51 7,390.21 96.75
OTHER REVENUE 255.84 3.49 247.60 3.24
From above graph we can conclude that net sales of the company increases by 0.24 percent in the year 2010 which indicates higher achievement of sales and overall contribution made by the net sales is 96.55% in the year 2009 and in the year 2010 is 96.75%.
Talking about other income we can observe that there is reduction of 0.25 percent in the year 2010 which is not a good sign for the company and overall contribution made by the other income is 3.67% in the year 2009 and in the year 2010 is 3.24%.
EXPENDITURE:
In carrying out this financial analysis we have assumed the total expenditure of the company equal to 100 percent and by calculation we want to obtain how much percentages each of the components constitutes to the total expenses.
EXPENDITURE
2009
2010
R.S(Cr) % R.S(Cr) % COST OF SALES 5229.32 85.26 5577.95 86.49 INTEREST 22.43 0.37 48.69 0.75 DEPRECIATION 296.99 4.84 387.19 6.00 TAX 584.93 9.54 435.37 6.75 TOTAL 6133.67 100 6449.2 100From the above graph we can observe that there is an increase in the formation of each type of the expenses except the purchase, employees, interest and depreciation expenses. Because the cost of sales is increased than the previous year is 1.23%, but may be because sales also increased by 0.24%. However these increases are quite ineffective as to comment on the financial strategy.
PROFIT & LOSS ANALYSIS RESULT
NO PARTICULARS INCREASE (%) DECREASE (%)
1 Equity Share Capital 0.42
2 Employee Stock Option
Outstanding 0.017
3 Reserve & Surplus 2.03
4 Secured Loan 1.40
5 Unsecured Loan 0.10
6 Defer Tax Liability 0.12
7 Fixed Assets 3.67
8 Investment 2.31
9 Net Current Assets 6.00
10 Miscellaneous 0.035
NO PARTICULARS INCREASE (%) DECREASE (%)
1 Net Sales 0.24 2 Other Revenue 0.25 3 Cost of Sales 1.23 4 Interest 0.38 5 Depreciation 1.16 6 Tax 2.79
DUPONT
ANALYSIS
The DuPont Model, developed in 1914 by F. Donaldson Brown of chemical company DuPont de Nemours & Co, is a set of financial ratios and key figures relating to the Return on Investment (ROI). It is a technique that can be used to analyze the profitability of a company using traditional performance figures. It integrates elements of the Income Statement with those of the Balance Sheet.
ROI = Net Profit Margin x Total Assets Turnover
The analysis of the DuPont tree (by looking at each branch and its figures) allows the manager/investor to identify the key drivers, as well as their impact on the ROI. Identified weaknesses simultaneously show up potential for improvement. It is especially well suited for benchmarking.
Although the DuPont analysis offers a clear overview of the most relevant drivers of the ROI and their interconnection, it cannot replace a detailed analysis. The figures and ratios may only indicate general tendencies and developments.
DUPONT ANALYSIS
The DuPont analysis is carried out for the two financial years and its explanation is described by each and every phase.
2009:
X
/
/
++ ++ +
From the above analysis we can observe that the return on investment for any company is a function of the net profit margin and the asset turnover ratios of the company. We can observe that the net profit margin of the company is dependent on the sales while the asset turnover ratios of the company are also dependent on the sales. We can observe that for the year 2009 the net profit margin is of 0.17 percent which shows that out of the revenue earned of Rs 1 the net profit earned is about 0.17 paisa. We can observe that for the year 2009 the asset turnover ratios for the company is 1.02 percent which reveals that for an Rs 1 investment in the assets of the company the sales obtained is of Rs 1.02. We can also observe that the return on assets for the company is about 0.1734 percent, which shows that for the investment of Rs1 in the company assets the profit obtained by the company is about 0.1734 paisa.
NET PROFIT RATIO
(0.17) INVESTMENT TURNOVER(1.02) NET PROFIT (1218.37) SALES (7076.87) COST OF SALES (5229.32) OPER. EXP. (629.18) SALES (7076.87) TOTAL INVT. (6970.12) FIXED ASSETS (3440.04) W.C. (238.25) INVEST MENT. (727.01) PROFIT (1218.37) W I P (2564.82) RETURN ON INVESTMENT 0.1734%
X
/
/
++ +
From the above analysis we can observe that the return on investment for any company is a function of the net profit margin and the asset turnover ratios of the company. We can observe that the net profit margin of the company is dependent on the sales while the asset turnover ratios of the company are also dependent on the sales. We can observe that for the year 2010 the net profit margin is of 0.17 percent which shows that out of the revenue earned of Rs 1 the net profit earned is about 0.17 paisa. We can observe that for the year 2010 the asset turnover ratios for the company is 0.95 percent which reveals that for an Rs 1 investment in the assets of the company the sales obtained is of 0.98 paisa. We can also observe that the return on assets for the company is about 0.16 percent, which shows that for the investment of Rs1 in the company assets the profit obtained by the company is about 0.16 paisa.
RETURN ON INVESTMENT (0.16%)
NET PROFIT RATIO (0.17) INVESTMENT TURNOVER (0.95) NET PROFIT (1263.61) SALES (7390.21) COST OF SALES (5577.95) OPERATI NG EXP. (548.65) SALES (7390.21) TOTAL INVESTMENT. (7798.5) FIXED ASSETS (5627.75) W. C (741.15) INVEST MENT. (625.95) PROFIT (1263.61) W I P (803.65)
RATIO
The ratio analysis is carried out under the following various subtopics. These subtopics will be explained one by one.
Profitability Ratios Activity Ratios Liquidity Ratios Current Ratio Quick Ratio Net Working- Capital Ratio Gross Profit Ratio Net Profit Ratio Return on Equity Inventory Turnover Ratio Debtors Turnover Ratio
LIQUIDITY RATIOS:
These ratios would include the following ratios explained as below:
1) CURRENT RATIO:
Current ratio is obtained by dividing the current assets of the company by the current liabilities. Generally a current ratio of 2:1 is considered as ideal for the firm. The current assets of the company would include cash, inventories, debtors, loans and advances paid etc. This ratio measures the short term solvency of the firm.
2009
CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITIES = 1979.34
1741.09 = 1.14:1
2010
CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITIES = 3135.33
2394.18 = 1.31:1
Ideal ratio of any company should be 2:1 but here the ratio is 1.31:1 of 2010 and 1.14:1 of 2009, which indicates favorable relationship between current assets and current liabilities. It shows company is growing.
2) QUICK RATIO:
Quick ratio is considered to be a better measure of the liquidity of a company as compared to the current ratio. This is because the current ratio includes inventories, which cannot be readily converted into cash. The ideal quick ratio is assumed to be 1:1 for any company.
CURRENT LIABILITIES = 1285.93 1741.09 = 0.74:1
2010
QUICK RATIO = CURRENT ASSETS CURRENT LIABILITIES = 2216.9
2394.18
= 0.93:1
For any company better quick ratio would be 1:1 but here the quick ratio is 0.93:1 of 2010 and 0.74:1 of 2009, which tells us about liquid position of the company is not very well. But it is better than next year.
3) NET WORKING CAPITAL RATIO:
This ratio on a whole shows the ability of the firm to meet its current obligations .Net working capital is obtained as the difference between the current assets and the current liabilities of the firm. Net assets are obtained as the sum total of the fixed assets and net current assets of the company.
2009
NET WORKING CAPITAL RATIO = NET SALES
WORKING CAPITAL = 7076.87
238.25 =29.7 Times
2010
NET WORKING CAPITAL RATIO = NET SALES WORKING CAPITAL = 8257.03
741.15 =11 Times
Here we can observe that need of the working capital to the total assets is not sufficient which is not a good sign for the company. Company’s net working capital ratio is better than current year.
PROFITABILITY RATIOS:
1) GROSS PROFIT RATIO:
The gross profit margin reflects the efficiency with which the management produces each unit of the product. This ratio indicates the average spread between the cost of goods sold and the sales. It is calculated as follows:
2009
GROSS PROFIT RATIO = GROSS PROFIT X 100 SALES = 1803.30 X 100 7721.42 = 23.35%
2010
GROSS PROFIT RATIO = GROSS PROFIT X 100 SALES
= 1661.87 X 100 8257.03
day requirement and other operation, which are carried by the company.
2) NET PROFIT RATIO:
This ratio establishes the relationship between net profit and sales and indicates the efficiency of the management in manufacturing administering and selling the products. It is calculated as follows:
2009
NET PROFIT RATIO = NET PROFIT X 100 SALES = 1218.37 X 100 7721.42 =15.78%
2010
NET PROFIT RATIO = NET PROFIT X 100 SALES
= 1263.61 X 100 8257.03
=15.30%
Here we can observe that company has 15.30% net profit, which can be good for the company so that company can fulfill its requirement also they can use for distribution of dividends and also for future projects.
3) RETURN ON EQUITY:
This ratio indicates how many times the earnings are obtained as related to the return provided to the shareholders. It is calculated as follows:
2009
RETURN ON EQUITY = PROFIT AFTER TAX X 100 EQUITY FUND
= 1218.37 X 100 304.74
= 399.81%
2010
RETURN ON EQUITY = PROFIT AFTER TAX X 100 EQUITY FUND
= 1263.61 X 100 305.97
= 412.98%
As this year the profit of the company is not good then also they provide their shareholders 412.98% return on their funds, which creates a good image against all shareholders.
ACTIVITY RATIOS:
The various ratios under this topic are calculated as under:
1) INVENTORY TURNOVER RATIO:
This ratio indicates how much efficiently the inventories of the company are converted into sales. It is calculated as under:
2009
INVENTORY TURNOVER = COST OF GOODS SOLD AVERAGE INVENTORY = 5918.18
811.50 = 7.29 Times
2010
INVENTORY TURNOVER = COST OF GOODS SOLD AVERAGE INVENTORY = 6595.16
792.55 = 8.32 Times
We can observe that inventory turnover is 8.32 times which is good for the company and if it is low then it indicate high cost of inventory holding which directly lead to increase in cost and low profits.
2) DEBTORS TURNOVER RATIO:
This ratio indicates the number of times the debtors’ turnover each year. It is calculated as follows:
2009
DEBTORS TURNOVER = CREDIT SALES AVERAGE DEBTORS = 7721.42
188.4 = 40.98 Times
2010
DEBTORS TURNOVER = CREDIT SALES AVERAGE DEBTORS = 8257.03
140.19 = 58.89 Times
Here we can observe that debtor’s turnover is 58.89 times which is not much good for the company situation but if it would be some more then it would shows greater efficiency of the company.
RESULT OF ALL RATIOS
NO PARTICULARS 2009 2010 INCREASE DECREASE
1 Current Ratio 1.14 1.31 Increased 2 Quick Ratio 0.74 0.93 Increased 3 Net Working
Capital Ratio 29.7times 11times Decreased
4 Gross Profit Ratio
23.35% 20.13% Decreased
5 Net Profit Ratio 15.78% 15.30% Decreased 6 Return on Equity 399.81% 412.97% Increased
7 Inventory Turnover
7.29times 8.32times Increased 8 Debtors Turnover 40.98times 50.89times Increased
FINDINGS
At the end of the financial analysis of the company the following are the
various findings:
In the last financial years the inventory holding period increased 7.29times to 8.32times and the debtor’s collection period of the company also increased 40.98times to 58.89times which has a direct impact on the current ratio of the company which increased 1.14:1 to 1.31:1.
After 2007 in the gross profit is decreased 10.73% and the gross profit margin of the company also decreased 3.22%, there are decreases observed in the net profit margins is 0.48% than 2009.
Decrease in net profit indicates that the net profit margins are affected a lot by the operating expenses of the company.
Company is not incurring profit than last year 2009 but it’s giving to shareholders more return on investment that is 412.98% which is 13.17% more than last year, by this observed that company has a good reputation in the market.
Company has a good future and opportunity for growth and development as continues profits are observed.
RESULTS
AND
RECOMMENDATIONS & SUGGESTIONS
BALANCE SHEET ANALYSIS:
(1) SOURCES OF FUNDS:
SHAREHOLDER’S FUND:
As per study share holder fund increase approximately 109.92% in last five 2006 to 2010.
Company tries to increase its capital by using the internal sources like reserve and its own capital.
LOAN FUNDS
As per analysis loan fund decrease approximately 92.41% in last five 2006 to 2010
In current year company loan fund is decrease more so tries to reduce by reducing external sources & internal sources.
TOTAL SOURCES OF FUNDS
As per study total sources of fund increase approximately 67.18% in last five 2006 to 2010
Company has made more investment in long term fix assets by increasing long internal sources of fund & external sources of fund.
(2) APPLICATIONS OF FUNDS:
FIXED ASSETS:
As per analysis fixed assets fund increase approximately 109.93% in last five 2006 to 2010
Company has made more fixed assets in all other area. So the fixed assets is an increase
INVESTMENTS:
As per study investment fund decrease approximately 44.76% in last five 2006 to 2010
The company has tries to increase in investment in share of subsidiary company increase in investment there is more increase in interest. There is more increase in profit.
CURRENT ASSETS, LOAN AND ADVANCES:
As per analysis current assets loan and advances fund increase approximately 166.24 % in last five 2006 to 2010
Company has tries to increase in current assets and loan advance. So the right decision of company
CURRENT LIABILITIES, PROVISIONS:
As per study current liabilities provisions fund increase approximately 241.25% in last five 2006 to 2010
The company has tries to increase current liability and provisions so the company is not a good in future.
NET CURRENT ASSETS:
As per analysis net current assets fund increase approximately 56.32% in last five 2005-06 to 2009-10
Company has tries to increase its net current assets in last years so the good decision in company.
PROFIT & LOSS ANALYSIS:
INCOME:
As per analysis income fund increase approximately 19.67 % in last five 2006 to 2010
So the company income is increase is the profit is increase in next years \
EXPENDITURE:
As per analysis expenditure fund increase approximately 32.20 % in last five 2006 to 2010
Company has tries to increase its all material, product sales, selling exp, depreciation Interest
e
d all other expenses are increase. In next years.PROFIT BEFORE TAX:
As per analysis profit before tax fund decrease approximately 10.73 % in last five 2006 to 2010
Company due the tax before profit is low, company has to reduce expenditures.
PROFIT AFTER TAX
As per analysis profit after tax fund decrease approximately 15.95 % in last five 2006 to 2010
