Professional Documents
Culture Documents
1 Introduction Of Industry
Knowing the customer satisfaction is always the top prerogative in any business. Getting to
know the level of satisfaction and (or) the changing expectations of customers is a
continuous process. Though there are various methods and tools available for this, mystery
shopping is considered as unique and undeniable tool in any organisation. As defined by
Wilson (2001), mystery shopping is a form of participant observation that uses researchers
to deceive customer-service personnel into believing that they are serving real customers or
potential customers. Mystery shopping is a technique that involves looking at your
business from outside and measure the efficiency of your own key processes from the view
point of customers. Mystery Shopping can be carried out in person, by telephone, or less
commonly by email. It can recognize strengths and weaknesses and aid to show exactly
where service delivery can be improved. In instances where excellent service is provided,
the service may be considered an example of best practice and specific staff members can be
singled out for recognition and reward. Initially set up in retail and private sector service
industries, now mystery shopping is used increasingly in the private as well as public sector
to gain a better understanding of how service users are taken care of when they approach
front line offices. Research is the foundation stone of effective marketing planning and is
vital for implementing successful marketing strategies. Mystery shopping is a research to
know about company in customer point of view. It is the use of individuals, skilled to
measure any customer service process, by acting as potential customers and in some way
reporting back on their experiences in a detailed and objective way. It is also an act of
purchasing goods and services for collecting information for market research.
Mystery shopping is more visible in developing countries and it is mostly prevailing in retail
sector. But other sectors also use it as a tool to measure their customer satisfaction,
competition, new technology advancements etc. some of the areas where mystery shopping
is seen commonly are Banks, Restaurants, Hotels, Supermarkets, Automobile shops, Repair
shops, Bars, Clubs, Theaters, Shopping malls, Retail chain operators. FMCG companies,
Consumer durable companies, Apparel retailers. Mystery shoppers are professional in this
field as he charges a reasonable amount from the companies for doing this service of
conducting research. A feedback is given by them to the client whether the services are
1
being performed according to expectations or not and gives a chance for the further
improvements that company thinks necessary for its survival. On the other hand they tries to
offer a better delivery to the customers to make them satisfied and a company can attract
more and more customers if it is efficient in the market.
Mystery shopping is necessary for companies to get an objective opinion on how their
business is doing. If they used their own employees to evaluate their service and operations,
it would be biased. So mystery shoppers, who don't already have a connection with the
company, are used to provide honest and unbiased feedback. In the UK mystery, shopping is
increasingly used to provide feedback on customer services provided by local authorities,
and other non-profit organizations such as housing associations and churches. Mystery
shopping is a term that describes a field based research technique of using independent
auditors posing as customers to gather information about product quality and service
delivery by a retail firm. The mystery shopper poses as a customer in order to objectively
gather information on the business being.
In the industry, the practice of helping organizations to improve their performance,
operating primarily through the analysis of existing organizational problems and the
development of plans for improvement. Organizations may draw upon the services of
management consultants for a number of reasons, including gaining external (and
presumably objective) advice and access to the consultants' specialized expertise.
As a result of their exposure to, and relationships with numerous organizations, consulting
firms are typically aware of industry "best practices", although the specific nature of
situations under consideration may limit the transferability of such practices from one
organization
to
another.
management assistance,
Consultancies
may
development
also
provide
organizational change
Management consulting grew with the rise of management, as a unique field of study. The
first management consulting firm was Arthur D. Little Inc., founded in 1886 as a
partnership, and later incorporated in 1909.
The industry experienced significant growth in the 1980s and 1990s, gaining considerable
importance in relation to national gross domestic product. In 1980 there were only five
consulting firms with more than 1,000 consultants worldwide, whereas by the 1990s there
were more than thirty firms of this size.
An earlier wave of growth in the early 1980s was driven by demand for strategy and
organization consultancies. The wave of growth in the 1990s was driven by both strategy
and information technology advice. In the second half of the 1980s the big accounting firms
entered the IT consulting segment. The then Big Eight, now Big Four, accounting firms
(PricewaterhouseCoopers; KPMG; Ernst & Young; Deloitte Touche Tohmatsu) had always
offered advice in addition to their traditional services, but from the late 1980s onwards these
activities became increasingly important in relation to the maturing market of accounting
and auditing. By the mid-1990s these firms had outgrown those service providers focusing
on corporate strategy and organization. While three of the Big Four legally divided the
different service lines after the Enron scandals and the ensuing breakdown of Arthur
Andersen, they are now back in the consulting business.
At an estimated $14 billion in size, and with a compound annual growth rate projected at
8.8% through 2009, the IT Strategy and Planning (ITSP) consulting market is healthier than
it's been since the crazy days of the dotcom boom. Consulting research firm Kennedy
Information, publishers of Consultants News, says that there are three key reasons for the
growth: The technology marketplace is maturing, with identifiable key players; competition
is forcing companies to make better use of technology to be more efficient; and complex IT
systems require companies to seek outside help.
Utilize
Years of success and experience in the mystery shopping industry since 1995.
Highest quality standards for shopper recruiting, data collection and reporting.
Measure
Achieve
Identified areas where new procedures and/or additional training can improve your
bottom line.
Correlated sales results to specific operational areas in your stores with Advanced
Analytics.
One of the revolutionary products that has changed the face of trainings and its
efficiency has been our 'E Learning Management System' and its certification program
'Center of Excellence'.
These programs have demonstrated tangible results in a very short span of time and has
given the Industry an opportunity in uplifting its standards.
TRAIN ensures that its interventions bring measureable and monitorable gains which
bring tremendous value towards customer satisfaction, speed and service.
1. Theatrical Based Training Program
2. SOP Based Training
3. Soft Skills Training
4. E-Learning Management System
5. Rate My Service' Program
One of the revolutionary products that has changed the face of trainings and its
efficiency has been our 'E Learning Management System' and its certification program
'Center of Excellence'.
These programs have demonstrated tangible results in a very short span of time and has
given the Industry an opportunity in uplifting its standards.
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TRAIN ensures that its interventions bring measureable and monitorable gains which
bring tremendous value towards customer satisfaction, speed and service.
1. Theatrical Based Training Program
2. SOP Based Training
3. Soft Skills Training
4. E-Learning Management System
THE EMPLOYMENT CELL OF INDIA
TECOI has been instrumental in identifying and acquiring talent right from the entry
level up to the CXO levels and has been instrumental in ensuring a healthy pipeline of
trained man-power for various Industries.
The evolution of TECOI has been a strategic move to fulfill the demands of any business
venture & to complete the life-cycle of services through the Total Solutions Group
companies.
TECOI boasts of a central repository of data of various job-seekers across the country
and its collaboration with TRAIN ensures that not only the demand of a position gets
fulfilled but more importantly the skill-sets required for the job function are truly
addressed.
It also channelizes fresh talent through a unique initiative with the TRAIN foundation
under the Igniting Minds & Ideas EEE Certification Program.
We hope that through this unique amalgamation of talent and training we would be able
to address the human resource demands of the Industry.
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Succession Management
THE LEASING COMPANY (TLC) & FEDERATION OF RETAIL & RETAIL ESTATE
MEMBERS (FORREM)
Another very important area wherein we have contributed is to ensure that the right
brands reach the right place at the right price.
TLC & FORREM boasts of one of the largest networks of brands and locations across
India and has been able to manage the demands of the growth of the Industry with great
success.
The two companies work in tandem with leading national & international brands and
have tie-ups with various real estate players, individual owners of properties on high
streets and hence ensure a scientific match-making process that not only involves market
research but also ensures that transparent & fair deals are executed within a reasonable
span of time.
The eco-system formed ensures a symbiotic profitable, scalable and sustainable business
environment leading to mutually beneficial long-term association for all.
Location Identification Program
Due Diligence & Feasibility Studies
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Brand Tie-Ups
Zoning & Mall Management Solutions
Marketing & Promotional Strategies
The Leasing Company
INVEST IN INDIA III
Invest In India III is a dedicated platform wherein it provides a one-stop-shop solution on
how to enter and to make investments into various Industries into the Indian markets. It
was launched in September 2010 in Los Angeles, USA.
III provides requisite information on sun-rise and already established sectors/industries
and also provides advice on regulatory matters, M & A opportunities, green field and
brown field projects.
IIIs panel of experts and advisors provide the much needed assistance in providing
customized solutions to your queries & problems.
III also has the support of some large investors, PE funds, Venture Capitalists, Angel
Investors, Family Funds, Funds of Funds et all who will be interested in providing
funding to businesses in
India.
NRI Solutions
groups. Pinches et al. (1973) used factor analysis to develop seven classifications of
ratios, and found that classifications were stable over the 1951-1969 time periods.
Chu et al. (1991) analyzed the hospital sectors to observe the differences of financial
ratios groups between hospital sectors and industrial firms sectors. Their study concluded
that financial ratios groups were significantly different from those of industrial firms
ratios as well these ratios were relatively stable over the five years period. A significance
relationships for about half of industries studied indicated that results might vary from
industry to industry.
Sathamoorthi (2002) focused on good corporate governance and in turn effective
management of business assets. He observed that more emphasis is given to investment
in fixed investments in fixed assets both in management area & research. However,
effective management working capital has been receiving little attention and yielding
more significant results. He analysed selected co-operatives in Botswana for a period of
1993-1997 and concluded that an aggressive approach has been followed by these firms
during all four years of study.
Doron Nissim & Stephen H Penman (1999): In his research article on financial
performance he has pointed that this paper outlines a financial statement analysis for use
in equity valuation. Standard profitability analysis is incorporated, and extended, and is
complemented with an analysis of growth. The perspective is one of the forecasting
payoff to equities. So financial statement analysis is presented first as a matter of
Performa analysis of the future, with forecasted ratios viewed as building blocks of
forecasts of payoffs.
Filbeck and Krueger (2005) highlighted the importance of efficient working capital
management by analyzing the working capital management policies of 32 non-financial
industries in USA. According to their findings significant differences exist between industries
in working capital practices over time. Moreover, these working capital practices,
themselves, change significantly within industries over time. Similar studies are conducted
by Gombola and Ketz (1983), Soenen (1993), Maxwell et al. (1998), and Long et al. (1993).
14
John J. Wild, K.R. Subramanyam & Robert F. Halsey (2006): In his research article
on financial 54 performance he has pointed that he have said that the financial statement
analysis is the application of analytical tools and techniques to general purpose financial
statements and related data to derive estimates and inferences useful in business
analytics. Financial Statements analysis reduces reliance on hunches, guesses and
intuition for business decisions. It decreases the uncertainty of business analysis.
I.M. Pandey (2007): In his research article on financial performance he has pointed that
the financial statements contain information about the financial consequences and sources
and uses of financial resources, one should be able to say whether the financial condition
of a firm is good or bad; whether it is improving or deteriorating. One can relate the
financial variables given in financial statements in a meaningful way which will suggest
the actions which one may have to initiate to improve the firms financial condition.
Rachchh Minaxi A (2011): In his research article on financial performance he has
pointed and suggested that the financial statement analysis involves analyzing the
financial statements to extract information that can facilitates decision making. It is the
process of evaluating the relationship between components parts of the financial
statements to obtain a better understanding of an entitys positions and performance.
Priyaaks (Mar 2012): In his research article on financial performance he has pointed
that Financial statement analysis is the process of examining relationships among
financial statement elements and making comparisons with relevant information. It is a
tool in decision making processes related to stocks, bonds and other financial
instruments.
From the above literature review, it is evident that, the financial performance depicts the
efficiency of organization. Along with that financial statements are very useful for
decision making in the company by Board Of Directors and management. It is also helps
to know the prosperity of the company with the profitability.
15
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strength and weakness of the enterprise. It also helps in knowing the trend of business.
Since such type of analysis is based on the data from year-to-year rather than only one
year, it is also called DYNAMIC ANALYSIS.
VERTICAL ANALYSIS:
In such type of analysis, financial statement for a single year or on a particular date are
reviewed and analyzed with the help of proper device like ratios. It involves a study of
quantitative relationship among various itemsof balance sheet or Profit & Loss Account
of a single period. The items in the financial statements are expressed as a percentage of
total and the total is taken as equivalent to 100. Statements containing such analysis are
termed as COMMON SIZE STATEMENT.
Vertical analysis is not very useful for a proper analysis of the companys financial
position because it depends on the data of a single period whereas the business is
dynamic process. In comparison to vertical analysis, horizontal analysis is more useful
because it brings out more clearly the nature and trends of current changes affecting the
enterprise. Horizontal presentation emphasizes the fact that statement for a series of
periods is far more significant than those for single period and that the accounts for one
period are but an installment of what is essentially a continuous history.
Advantages:
It simplifies the financial statements.
It helps in comparing of different size with each other.
It helps in trend analysis which involves comparing a single company over a
period.
It highlights important information in simple form quickly. A user can judge a
company by just looking at few numbers instead of reading the whole financial
statements.
18
PURPOSE:
The objective of financial statements is to provide information about the financial
position, performance and changes in financial positions of an enterprise that is useful to
a wide a range of users in making economic decisions. Financial statements provide
useful information to a wide range of users:
S. No.
Users
Purpose
To manage the affairs of the company by assessing its
Managers
1.
2.
3.
4.
business decisions.
To assess the risk & return of their investment in the
Shareholders
ProspectiveInvestors
Financial-
Institutions
6.
7.
Suppliers
Customers
Employees
8.
9.
10.
Competitors
General
Public
Government
Comparative Statements: When Financial Statements figures for two or more years
are placed side by side to facilitate comparison, these are called, Comparative Financial
Statements. In such a statement figures of production, sales, expenses, profits, etc. put
side by side to draw conclusions about the profitability and financial health of the
business. It also indicates the trnd of change as well as the strong points and weak points
of the enterprise.
20
Common Size Statement: In these statements, various figures are converted into
percentages to some common base. In profit and loss account, sales figure is taken as 100
and all other figures are expressed as percentage of sale. Similarly, in Balance Sheet total
assets are taken as 100 and all assets are expressed as percentage of the total.
Trend Analysis: It is one of the most useful form of horizontal analysis in making
comparative study of the financial statement for a number of years. For calculating trend
percentages any year is selected as the base year. Each item of the base year is assumed
to be equal to 100 and on that basis the percentage of each item of each year is calculated.
The trend percentage is helpful in revealing the trend increase or decrease in various
items.
Accounting Ratios: A ratio is simply one number expressed in relation to another and a
study of the relationship between various items or group of items is known as Ratio
Analysis. It simplifies and summarizes a long array of accounting data to provide useful
information regarding the liquidity, solvency, profitability etc. .
21
which funds are obtained by the enterprise and the specific uses to which funds were
applied.
Ratio Analysis
According to Diamond (2006), Ratio analysis is a method of expressing relations among
various items in a companys financial statement. However, ratios are not substitutes for
looking dipper into the financial position of the company.
The main technique used for financial analysis of Minda corporation limited is ratio
analysis therefore we will see ratio analysis in detail.
Financial ratio
Financial ratios are very powerful tools to perform some quick analysis of financial
statements. Accounting Ratios are used to describe significant relationships which exist
between figures shown in balance sheet, in a profit and loss account, in a budgetary
control system or in any part of the accounting organization.
Ratio analysis is a study of relationship among various financial factors in a business. It is
a technique of analyzing the financial statements so as to check financial health of the
organization for its various:
stakeholders
investors
22
customers
financial institutions
Departments of government like statistical department, revenue department;
So as to fulfill its goal such as wealth maximization, banking transactions, credit
worthiness, for job, etc.
We analyzed financial statement of Minda Corporation Limited to draft various
inferences for its various stakeholders including, but not limited to, shareholders,
investors, customers, vendors, financial institutions, employees and last but not the least
government.
Classifications of Ratios
RATIOS
Liquidity Ratio
Solvency Ratio
Activity Ratio
Profitability Ratio
LIQUIDITY RATIO
Liquidity ratio, expresses a company's ability to repay short-term creditors out of its total
cash. The liquidity ratio is the result of dividing the total cash by short-term borrowings.
It shows the number of times short-term liabilities are covered by cash. If the value is
greater than 1.00, it means fully covered.
They comprise of the following two ratios:
a) Current ratio
b) Liquid ratio
SOLVENCY RATIO
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The solvency ratio indicates whether a companys cash flow is sufficient to meet its
short-term and long-term liabilities. The lower a company's solvency ratio, the greater the
probability that it will default on its debt obligations.
The most common solvency ratios include:
a) Debt Equity ratio
b) Total assets to debt ratio
c) Proprietary ratio
ACTIVITY RATIO
Activity ratios are used to measure the relative efficiency of a firm based on its use of its
assets, leverage or other such balance sheet items. These ratios are important in
determining whether a company's management is doing a good enough job of generating
revenues, cash, etc. from its resources.
Activity ratios can be classified as follows:
(a)
(b)
(c)
(d)
PROFITABILITY RATIO
Profitability ratios measure a companys ability to generate earnings relative to sales,
assets and equity. These ratios assess the ability of a company to generate earnings,
profits and cash flows relative to relative to some metric, often the amount of money
invested. They highlight how effectively the profitability of a company is being managed.
Important profitability ratios are:
24
a)
b)
c)
d)
Research is a systematic inquiry to describe, explain, predict and control the observed
phenomenon. Research involves inductive and deductive methods. Inductive methods
analyse the observed phenomenon and identify the general principles, structures, or
processes underlying the phenomenon observed; deductive methods verify the
hypothesized principles through observations. The purposes are different: one is to
develop explanation, and the other is to test the validity of the explanations.
TYPES OF RESEARCH:
A research design is the specification of method and procedure for accruing the
information needed. It is overall operational pattern of frame work of project that
stipulates what information is to be collected for sources by that procedures.
26
of policy of company.
Time is an important limitation. The whole study was conducted in a period of 7
to 8 weeks, which is not sufficient to carry out proper interpretation and analysis.
The changes made in the schedule IV have posed as a major problem which have
a caused a difficulty in the valuation of items in the balance sheet and other
reports.
Different companies operate in different industries each having different
environmental conditions such as regulation, market structure etc. Such factors
are so significant that a comparison of two companies from different industries
might be misleading.
Financial accounting information is affected by estimates and assumptions.
Accounting standards allow different accounting policies, which impairs
LIQUIDITY RATIO
CURRENT RATIO
Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio also known as Working capital ratio is a measure of general liquidity
and is most widely used to make the analysis of a short-term financial position (or)
liquidity of a firm. It measures the liquidity position of the firm with its future events.
Main purpose of this ratio is to know the has power to meet its current liabilities.
Current Ratio =
CURRENT LIABILITIES
Cash in hand
Cash at bank
Bills receivable
Bills payable
Marketable securities
Short-term advances
Short-term investments
Sundry creditors
Sundry debtors
Dividend payable
Prepaid expenses
Income-tax payable
28
(Amount in Rs.)
Year
Current Assets
Current Liabilities
Ratio
2012-13
9,132,820
4,711,719
1.94:1
2013-14
11,564,206
3,026,666
3.82:1
CURRENT RATIO
4
RATIO
2
0
3.82
1.94
2012-13
2013-14
YEAR
Interpretation
As a rule, the current ratio with 2:1 (or) more is considered as satisfactory position of the
firm. When compared with 2012-13, there is an increase in the provision for tax, because
the debtors are raised and for that the provision is created.
The sundry debtors have increased due to the increase to corporate taxes.
In the year 2013-14, the loans and advances include majorly the advances to employees
and deposits to government. The loans and advances reduced because the employees set
off their claims. The other current assets include the interest attained from the deposits.
29
The huge increase in sundry debtors resulted an increase in the ratio, which is above the
benchmark level of 2:1 which shows the comfortable position of the firm.
QUICK RATIO:
Quick ratio is a test of liquidity than the current ratio. The term liquidity refers to the
ability of a firm to pay its short-term obligations as & when they become due. Quick ratio
may be defined as the relationship between quick or liquid assets and current liabilities.
An asset is said to be liquid if it is converted into cash within a short period without loss
of value.
CURRENT LIABILITIES
Cash in hand
Cash at bank
Bills receivable
Bills payable
Sundry debtors
Short-term advances
Marketable securities
Sundry creditors
Temporary investments
Dividend payable
Income tax payable
TABLE NO. C-2
Quick Ratio
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(Amount in Rs.)
(Amount in Rs.)
Year
Quick Assets
Current Liabilities
Ratio
2012-13
8,943,359
4,711,719
1.9
2013-14
11,543,186
3,026,666
3.81
QUICK RATIO
4
RATIO
3
2
3.81
1.9
1
0
2012-13
2013-14
YEAR
Interpretation
Quick assets are those assets which can be converted into cash within a short period of
time, say to six months. So, here the sundry debtors which are with the long period does
not include in the quick assets. Compare with 2012-13, the Quick ratio is increased
because the sundry debtors are increased due to the increase in the corporate tax and for
that the provision created is also increased. So, the ratio is also increased with the 201213.
31
Although receivable, debtors and bills receivable are generally more liquid than
inventories, yet there may be doubts regarding their realization into cash immediately or
in time. Hence, absolute liquid ratio should also be calculated together with current ratio
and quick ratio so as to exclude even receivables from the current assets and find out the
absolute liquid assets.
Absolute liquid assets include cash in hand etc. The acceptable forms for this ratio is 50%
(or) 0.5:1 (or) 1:2 i.e., Rs.1 worth absolute liquid assets are considered to pay Rs.2 worth
current liabilities in time as all the creditors are nor accepted to demand cash at the same
time and then cash may also be realized from debtors and inventories.
CURRENT LIABILITIES
Cash in hand
32
Cash at bank
Bills payable
Short-term advances
Sundry creditors
Dividend payable
Income tax payable
TABLE NO. C-3
(Amount in Rs.)
Year
Current Liabilities
Ratio
2012-13
5,385,085
4,711,719
1.14
2013-14
3,564,907
3,026,666
1.18
Table No.4.3
1.18
1.14
2012-13
2013-14
YEAR
Interpretation
The current assets which are ready in the form of cash are considered as absolute liquid
assets. Here, the cash and bank balance are absolute liquid assets. In the year 2012-13,
the cash and bank balance is decreased due to decrease in the deposits and the current
liabilities. That causes a slight increase in the current years ratio.
LEVERAGE RATIOS
PROPRIETARY RATIO
A variant to the debt-equity ratio is the proprietary ratio which is also known as
equity ratio. This ratio establishes relationship between share holders funds to
total assets of the firm.
TOTAL ASSETS
Owners Capital
Fixed Assets
Current Assets
Cash in hand & at bank
Bills receivable
Inventories
Marketable securities
Short-term investments
Sundry debtors, Prepaid Expenses
34
(Amount in Rs.)
Owners Funds
Total Assets
Ratio
2012-13
5,647,365
10,638,520
0.53
2013-14
9,706,001
12,980,510
0.75
PROPRIETARY RATIO
0.8
0.6
RATIO
0.4
0.75
0.53
0.2
0
2012-13
2013-14
YEAR
Interpretation
The proprietary ratio establishes the relationship between owners funds to total assets. It
determines the long-term solvency of the firm. This ratio indicates the extent to which the
assets of the company can be lost without affecting the interest of the company. There is
no increase in the capital. The reserves and surplus is increased due to the increase in
balance in profit and loss account, which is caused by the increase of income from
services.
35
Total assets, includes fixed and current assets. The fixed assets are reduced because of the
depreciation and there are no major increments in the fixed assets. The current assets are
increased compared with the year 2012-13. Total assets are also increased than precious
year, which resulted an increase in the ratio than older.
ACTIVITY RATIOS
WORKING CAPITAL TURNOVER RATIO
Working capital of a concern is directly related to sales.
It indicates the velocity of the utilization of net working capital. This indicates the no. of
times the working capital is turned over in the course of a year. A higher ratio indicates
efficient utilization of working capital and a lower ratio indicates inefficient utilization.
CURRENT LIABILITIES
Cash in hand
Cash at bank
Bills receivable
Bills payable
Marketable securities
Short-term advances
Short-term investments
Sundry creditors
Sundry debtors
Dividend payable
Prepaid expenses
Income-tax payable
TABLE NO. C-5
(Amount in Rs.)
Year
Working Capital
Ratio
2012-13
5,555,064
4,421,100
1.26
2013-14
9,665,490
8,537,540
1.13
1.2
1.26
1.15
1.13
1.1
1.05
2012-13
2013-14
YEAR
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Interpretation
Income from services is greatly increased due to the extra invoice for Service Provided
and the working capital is also increased greater due to the increase in from services
because the huge increase in current assets.
The income from services is raised and the current assets are also raised together resulted
in the decrease of the ratio of 2013-14 compared with 2012-13.
(Amount in Rs.)
Year
Ratio
2012-13
5,555,064
1,505,699
3.69
2013-14
9,665,490
1,416,303
6.82
RATIO
7
6
5
4
3
2
1
0
6.82
3.69
2012-13
2013-14
YEAR
39
(Amount in Rs.)
Capital Employed
Ratio
2012-13
5,555,064
5,647,365
0.98
2013-14
9,665,490
9,706,001
1.00
40
1.00
0.99
0.98
0.98
0.97
2012-13
2013-14
YEAR
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FIXED ASSETS
Cash in hand
Machinery
Cash at bank
Buildings
Bills receivable
Plant
Marketable securities
Vehicles
Short-term investments
TABLE NO. C-6
Current Assets To Fixed Assets Ratio
(Amount in Rs.)
Year
(Amount in Rs.)
Current Assets
Fixed Assets
Ratio
2012-13
9,132,820
1,505,699
6.07
2013-14
11,564,206
1,416,303
8.17
5
0
2012-13
2013-14
YEAR
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Current assets are increased due to the increase in the sundry debtors and the net fixed
assets of the firm are decreased due to the charge of depreciation and there is no major
increment in the fixed assets. The increment in current assets and the decrease in fixed
assets resulted an increase in the ratio compared with the previous year.
PROFITABILITY RATIOS
GENERAL PROFITABILITY RATIOS
NET PROFIT RATIO
Net profit ratio establishes a relationship between net profit (after tax) and sales
and indicates the efficiency of the management in manufacturing, selling
administrative and other activities of the firm.
(Amount in Rs.)
Income from Services
Ratio
2012-13
1,825,958
5,555,064
0.33
2013-14
4,058,635
9,665,490
0.42
43
0.3
0.42
0.33
0.2
0.1
0
2012-13
2013-14
YEAR
Interpretation
The net profit ratio is the overall measure of the firms ability to turn each rupee of
income from services in net profit. If the net margin is inadequate the firm will fail to
achieve return on shareholders funds. High net profit ratio will help the firm service in
the fall of income from services, rise in cost of production or declining demand. The net
profit is increased because the income from services is increased. The increment resulted
a slight increase in 2013-14 ratio compared with the year 2012-13.
OPERATING PROFIT
Operating ratio establishes the relationship between cost of goods sold and other
operating expenses on the one hand and the sales on the other.
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Operating Profit
(Amount in Rs.)
Year
(Amount in Rs.)
Operating Profit
Ratio
2012-13
3,158,671
5,555,064
0.57
2013-14
6,719,267
9,665,490
0.70
0.4
0.7
0.57
0.2
0
2012-13
2013-14
YEAR
Interpretation
The operating profit ratio is used to measure the relationship between net profits and
Consultancy of a firm. Depending on the concept, it will decide.
The operating profit ratio is increased compared with the last year. The earnings are
increased due to the increase in the income from services because of Services Provided.
So, the ratio is increased slightly compared with the previous year.
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(Amount in Rs.)
Total Assets
Ratio
2012-13
1,825,958
10,638,520
0.17
2013-14
4,058,635
12,980,510
0.31
0.3
0.2
0.31
0.17
0.1
0
2012-13
2013-14
YEAR
Interpretation
This is the ratio between net profit and total assets. The ratio indicates the return on total
assets in the form of profits. The net profit is increased in the current year because of the
increment in the income from services due to the increase in Service Provided. The fixed
assets are reduced due to the charge of depreciation and no major increments in fixed
assets but the current assets are increased because of sundry debtors and that affects an
increase in the ratio compared with the last year i.e. 2012-13.
(Amount in Rs.)
Capital
Ratio
2012-13
3,775,437
1,871,928
2.02
2013-14
7,834,073
1,871,928
4.19
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4.19
2.02
1
0
2012-13
2013-14
YEAR
Interpretation
The ratio is used to reveal the policy pursued by the company a very high ratio. Higher
the ratio better will be the position.
The reserves & Surplus is increased in the year 2013-14 as the Profit is increased due to
increase in Service Provided. But the capital is remaining constant.
So the increase in the reserves & surplus caused a greater increase in the current years
ratio compared with the older.
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The ratio is generally calculated as percentages by multiplying the above with 100.
Return on Investment
(Amount in Rs.)
Year
(Amount in Rs.)
Owners Capital
Ratio
2012-13
1,825,958
5,647,365
0.32
2013-14
4,058,635
9,706,001
0.42
Interpretation
This is the ratio between net profits and shareholders funds. The ratio is generally
calculated as percentage multiplying with 100.
The net profit is increased due to the increase in the income from services and the Capital
funds are increased because of reserve & surplus. So, the ratio is increased in the current
year.
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The current ratio has shown in a fluctuating trend as 1.94 and 3.82.In the year 201213 current ratio is 1.94 & it is optimum because it is quite near to the optimum level
but in the 2013-14 current ratio was 3.82 which indicates a continuous increase in
current assets and decrease in current liabilities.
The quick ratio is also in a fluctuating trend resulting as 1.9, and 3.81. The companys
present liquidity position is satisfactory.
The absolute liquid ratio has been increased from 1.14 to 1.18, from 201213 to
2013-14.
The proprietary ratio has shown a fluctuating trend. The proprietary ratio is increased
from 0.53 to 0.75 compared with the last year. So, the long term solvency of the firm
is increased.
The working capital ratio decreased from 1.26 to 1.13 in the year 2013-14.
The fixed assets turnover ratio is in increasing trend from the year 2012-13 to 201314 i.e. 3.69 to 6.89. It indicates that the company is efficiently utilizing the fixed
assets.
The capital turnover ratio is increased from 2012-13 to 2013-14 i.e. 0.98 to 1.00.
The current assets to fixed assets ratio is increasing gradually from 2012-13, 6.07 to
2013-14, 8.17. It shows that the current assets are increased than fixed assets.
The net profit ratio is also in increasing order as compared to previous year.
The net profit is increased greater in the current year. So the return on total assets
ratio is increased from 0.17 to 0.31.
The Reserves and Surplus to Capital ratio is increased to 4.19 from 2.02. The capital
is constant, but the reserves and surplus is increased in the current year.
The operating profit ratio is in fluctuating manner as 0.57 and 0.70 from 201213
respectively.
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The return on investment is increased from 0.32 to 0.42 compared with the previous
year. Both the profit and shareholders funds increase cause an increase in the ratio.
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Organization is doing well in the respective field of mystery shopping and service
should invest in the market securities that yields the income for organization in future.
Current Assets to fixed assets ratio shows that current assets plays a vital role in total
assets. I suggest the company to employ the current assets effectively for generating
the revenue.
As Profit of the organization is increasing trend, company should look up for growth
CONCLUSION
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The companys overall position is at a good position. Particularly the current years
position is well due to raise in the profit level from the last year position. It is better for
the organization to diversify the funds to different sectors in the present market scenario.
.
The main objective of all the investor is to earn the higher return on their investment so
they always try to invest in those securities and fund which give them higher return with
a less risk.
In this project, I tried to focus on the performance of various funds of the Total Solution
Group. From the various data available for helping in the project compilation we said that
the performance of the various funds of the Total Solution Group is better than previous
year i.e. 2012-13.
I also got useful insights regarding financial analysis of this organization and about their
proceedings and also its general background. It helped me gain useful information about
how the revenue management is actually practiced.
The majority of the companys profitability ratio show increasing trend. The various ratio
that have been analyzed, interpret that the company has a good financial position & the
overall credibility is also very good. The performance of the company can be considered
as satisfactory although there is a whole lot of scope for improvement.
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BIBILOGRAPHY
BOOKS
JOURNAL
WEBSITE
https://en.wikipedia.org/wiki/financial _analysis
http://www.investopedia.com/terms/f/financial-analysis.asp
www.totalsolutions.in/about/reports
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