A SUMMER TRAINING REPORT ON STUDY AND ANALYSIS OF FINANCIAL STATEMENTS AT JAY USHIN LIMITED

SUBMITTED IN PARTIAL FULFILMENT FOR THE REQUIREMENT OF THE AWARD OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) TO MAHARSHI DAYANAND UNIVERSITY, ROHTAK BY ANSHUL GUPTA ROLL NO. 2903 MBA (3rd SEM.)

AMITY BUSINESS SCHOOL, MANESAR BATCH (2009-2011)

DECLARATION

I, Anshul Gupta, Roll No. 2903, MBA (3rd semester) of Amity Business School, Manesar, hereby declare that the Summer Training Report entitled, Study & Analysis of financial statements , at Jay Ushin Limited is an original work and the same has not been submitted to any other institute for the award of any other degree.

A seminar presentation of the Training Report was made on ________________ and the suggestion as approved by the faculty was duly incorporated.

Presentation-In-Charge

Signature of the Candidate

Signature: ________________

Name of the Faculty: ________________

Countersigned:-

Director of the Institute

ACKNOWLEDGEMENT

³If the words are symbol of undiluted feelings and token of gratitude then let the words play the heralding role of expressing my feelings.´

Making a project is a result of meticulous efforts put in by many minds that contribute to the final report formation. This is an honest effort towards putting forward whatever I have gained as a valuable experience that will surely help me move up the learning curve towards the path I have chosen.

I am indeed thankful to honorable Prof (Dr) R C Sharma, Ex-Director, Amity Business School, Manesar, who has provided the wonderful opportunity of getting exposed to industrial and business working know-how. I extend my deepest thank to my mentor and guide, Dr. Vikas Madhukar, Professor, Amity Business School for giving me the opportunity to understand the project and for providing me the necessary information whenever required.

I would like to render my sincere thanks to Mr. S.K Aggarwal, General Manager (Finance), Mr. Aloak Kumar Tulsiyan (Finance Controller),Mr. Abhay Harlalka, Assistant (Finance Controller) , and Satya Prakash Sharma, Executive (Finance) Jay Ushin Limited for their immense encouragement, guidance and invaluable lecture sessions throughout my training. They all have been an inspirational mentor guiding me through every step of my project, thus making the entire Project a complete learning process.

Never the last, I would take the opportunity to thank to all the departmental heads of ³JAY USHIN LTD.´ who gave their precious time in providing me with valuable information whenever needed.

ANSHUL GUPTA MBA (3rd SEM)

So. It defines the financial soundness of the business. solvency and financial soundness.INTRODUCTION Finance is defined as the provision of money when it is required. The subsequent chapters in present study will suggest simple steps to help you read an annual report demystify financial statements and help you develop an investment tool-kit for evaluating companies. Analysis of financial statements is a process of determining the financial strength and weaknesses of a firm by establishing the strategic relationship between the items of financial statements like balance sheet. Financial statements are the end products of the financial accounting process. . to know the company liquidity. finance should be managed effectively. Descriptive research is used in this study to know the present financial position of the company and mainly my source of data is secondary and the tools used in this are comparative statement. From the Company or Entrepreneur point of view financial statements are very important to know how well the business operations going on. Every company needs to analyze the performance of financial statements to know the inefficiency in their business operations.  Methodical classification of data. Every investor or stake holder must go through the financial statements before investing in any organization. The present study analyses the financial statements of Jay Ushin Ltd. The process of financial statement analysis is given below: Selection of information necessary for analysis of financial statements. common size statement and ratio analysis. profitability. The financial statements mean presenting the financial information in concise form. Every enterprise needs finance to start and carry out its operation. Finance is the lifeblood of an organization.  Interpretation. profit & loss account and other operative data. Two types of financial statements are used balance sheet and profit loss account for analyzing and interpreting. Drawing conclusion and explaining the meaning and significance of data. Financial statements are the soul of every business.

operational efficiency and their credit worthiness. This study will provide a new direction to the organization by pinpointing their deficient and efficient areas in their financial statements and providing the suggestions to the organization to improvise upon its deficiencies. It provides information to government for tax levies.SIGNIFICANCE OF THE STUDY Analysis of financial statement is an important tool to weigh the worthiness of a company shares so this study help the investors and shareholders gauge a company¶s revenue profile. its utilization of funds. Present study helps the creditors to know about the company ability to repay its debts and manager¶s to know the company ability to finance the future expansion. . profitability and future earnings prospects because investor¶s interest lies in the appreciation of a company¶s stock price and the likely-hood of a company paying dividends. It will help other students to know how financial statements give a complete picture of company¶s business functions.

 To know determine the area of improvement in the working of company. .  To determine the financial performance of the company.  To know the profitability of the company.OBJECTIVE OF THE STUDY  To know the liquidity position of the company.  To know the solvency position of the company.

so the focus of study is to know the company profitability.FOCUS OF THE STUDY The core of the study consists of financial statements which include two elements: the balance sheet. liquidity. and profit & loss account. managers. . They provide valuable insight about a company to its various stakeholders like government. solvency and financial position of a company by analyze the balance sheet and profit & loss statement with the help of various tools and technique. creditors. shareholders and investors. both pointer¶s to a company¶s financial health.

Tools employed in horizontal analysis are: Comparative statements. Types of Analysis  Horizontal analysis  Vertical analysis 1) Horizontal analysis Comparison of financial data of a company for several years. The figures of various years are compared with standard or base year. Process of Analysis 1) Selection of information necessary for analysis of financial statements. It determine the financial strength and weakness of a firm by establishing strategic relationship between the items of the balance sheet. 2) Methodical classification of the data. firstly to communicate with different parties about the financial position of the firm and secondly to analyze the performance and operations of the firm for further planning. The financial statements are prepared by the firm. Analysis of financial statements Analysis of financial statements is a process of evaluating the relationship between component parts of financial statement to obtain a better understanding of a firm¶s position and performance. The financial statements means presenting financial information presented in concise form and the financial information is related to the financials of the company.CONCEPTUALISATION Financial statements The financial statements are the end product of the financial accounting process. The figures for this type of analysis are presented horizontally over a number of columns. 3) Interpretation and drawing conclusion.  Trends percentage & analysis . profit & loss account and other operative data.

is taken as base year. It helps in forming an opinion about the progress of enterprises. The changes are shown in absolute figures and percentage: It helpful in analyzing the changes in the performance of two or more periods of a firm  Two or more firm There are two types of comparative statements: Comparative Balance sheet  Comparative Income statement Comparative Balance sheet The comparative balance sheet analysis is the study of the trend of the same items.:.e. . groups of item and computed items in two or more balance sheet of the same business enterprises on different dates.g. then the sales of 1995 will be taken as 100 and percentage of sales for all other years will be calculated in relation to the base year. The information for a number of years is taken up and one year.a) Comparative statements Comparative statements contain the changes (increase or decrease) in the financial statements of two or more periods. Comparative Income statement This statement exhibits the working results of the enterprise for a given period of time and serves the purpose of comparison.If sales figure for the year 1995 to 1999 are to be studied. i. b) Trend analysis This method determine the direction upward or down wards and involves the computation of the percentage relationship that statement item bears to the same item in base year. It gives an idea of the progress of a business over a period of time. The working results of two or more firms or two or more periods of the same firm can be expressed in money or percentage. generally the first year. 1995. E.

There are two types of common size financial statements:a) Common size Balance sheet b) Common size Income statement Common size Balance sheet A statement in which balance sheet items are expressed as the ratio of each asset to total assets and the ratio of each liability is expressed as a ratio of total liabilities is called common size balance sheet.  Financial ratios. Common size Income statement The item in income statements can be shown as percentages of sales to show the relation of each item to sales. total liabilities and total sales. . Figures from financial statements of a year are compared with a base selected from the same year¶s statement. The common size balance sheet can be used to compare companies of different size. Common size financial statement The common size balance sheet and income statements are shown in analytical percentage. A.2) Vertical analysis The study of relationship of the various items in the financial statements of one accounting period. The comparison of figures in different periods is not useful because total figures may be affected by a number of factors. Tools employed in the vertical analysis are: Common-size financial statements. The figures are shown as percentage of total assets. A significant relationship can be established between items of income statement and volume of sales.

A relationship is established between sales and other items in income statement end this relationship is helpful in evaluating operational activities of the enterprises. In case the volume of sales increase to a considerable extent. administrative and financial expenses may go up. This is the mostly used tool for analysis in financial analysis. There are various ratios that are used in this project:- A: Liquidity Ratios  Liquidity refers to the ability of a firm to meet its short-term financial obligations when and as they fall due. Financial ratios A ratio: Is the mathematical relationship between two quantities in the form of a fraction or percentage. Ratio analysis: is essentially concerned with the calculation of relationships which after proper identification and interpretation may provide information about the operations and state of affairs of a business enterprise.The increase in sales will certainly increase selling expenses and not administrative and financial expenses. Failure to do this will result in the total failure of the business. In case the sales are declining the selling expenses should be reduced at once.  The main concern of liquidity ratio is to measure the ability of the firms to meet their short- term maturing obligations. The analysis is used to provide indicators of past performance in terms of critical success factors of a business. B. It is based on the fact that a single figure is not going to communicate meaningful information but when compared with other item expresses significant information. Ratio analysis expresses the relationship in a mathematical form between two items or a group of items related to each other is a logical manner. as it would be forced into liquidation. This assistance in decision-making reduces reliance on guesswork and intuition and establishes a basis for sound judgment. .

accrued income taxes and other accrued expenses (wages). overtrading occurs. marketable securities. The quick ratio. assets will be idle as it is impossible to buy and sell fixed assets continuously as turnover changes. it ignores stock). short term notes payable. however the company is still unable to support its short-term debt from its currents assets. Current liabilities consist of accounts payable. Unless the business continues to generate high turnover. inventories. As turnover increases more working capital and cash is required and if not. Current assets normally include cash. The rule of thumb says that the current ratio should be at least 2 that are the current assets should meet current liabilities at least twice. . the business needs a high turnover. What does the calculated ratio tells us? In 2000. This ratio realizes that some of current assets are not easily convertible to cash e. B: Asset Management/Activity Ratios If a business does not use its assets effectively. Note: Increased turnover can be just as dangerous as reduced turnover if the business does not have the working capital to support the turnover increase. also referred to as acid test ratio. short-term loans.g. current maturities of long term debt. Quick Ratio Measures assets that are quickly converted into cash and they are compared with current liabilities. In order for the assets to be used effectively.Current Ratio The Current Ratio expresses the relationship between the firm¶s current assets and its current liabilities. the company only had 85 cents worth of current assets for every dollar of liabilities. investors in the business would rather take their money and place it somewhere else. accounts receivable and inventories. This grew to 92 cents in 2002 indicating increasing trend on liquidity.e. Activity ratios are therefore used to assess how active various assets are in the business. examines the ability of the business to cover its short-term obligations from its ³quick´ assets only (i.

It measures the firm¶s ability to generate net sales from fixed assets. C: Financial Leverage (Gearing) Ratios  The ratios indicate the degree to which the activities of a firm are supported by creditors¶ funds as opposed to owners. Total Asset Turnover Ratio: This ratio measures the ability of the firm to use its sales to generate sales. With the help of this we can also calculate the amount of days or months within which the debtors are calculated. It is calculated by dividing net sales by average fixed assets. It is calculated by dividing net sales by net fixed assets.  The relationship of owner¶s equity to borrowed funds is an important indicator of financial strength.Debtors Turnover Ratio: If a firms sells its goods on credit than this ratio helps to know how quickly the debtors are collected. This is calculated as percentage by taking net credit sales or total sales and dividing it by average debtors. This is calculated by dividing average net sales by average working capital. Capital Turnover Ratio: It measures the relationship between net sales and the capital employed. Working Capital Turnover Ratio: It measures the velocity or utilization of the working capital of the firm during the year. This is calculated by dividing net sales by average capital employed. Fixed Asset Turnover Ratio: The ratio indicates the extent to which the investments in fixed assets contribute towards sales. This considers all the assets. This ratio is the indicator of the overall profitability of the firm.  The debt requires fixed interest payments and repayment of the loan and legal action can be taken if any amounts due are not paid at the appointed time. In this if the turnover period is more than more working capital is required if it is less than less working capital is required. This ratio measures the effectiveness of the firm in utilizing its resources. . A relatively high proportion of funds contributed by the owners indicate a cushion (surplus) which shields creditors against possible losses from default in payment.

Total Debt Ratio: This indicates what percentage of the company¶s assets is provided by provided via debt. This ratio shows the long-time solvency of the organization it is calculated by dividing proprietor¶s funds by the total tangible assets. This is calculated by dividing total debt by total assets. asset management (activity) and debt management (gearing) on operating results. the greater the degree of financial strength.  Profits are essential.Note: -The greater the proportion of equity funds. Note: Without profit. D: Profitability Ratios Profitability is the ability of a business to earn profit over a period of time. Financial leverage will be to the advantage of the ordinary shareholders as long as the rate of earnings on capital employed is greater than the rate payable on borrowed funds. The overall measure of success of a business is the profitability which results from the effective use of its resources. irrespective of social consequences. The following ratios can be used to identify the financial strength and risk of the business. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load.  Profitability is a result of a larger number of policies and decisions. The profitability ratios show the combined effects of liquidity. Although the profit figure is the starting point for any calculation of cash flow. as already pointed out. profitable companies can still fail for a lack of cash.  A company should earn profits to survive and grow over a long period of time. Proprietary Ratio: It relates to the proprietors funds to total assets. but it would be wrong to assume that every action initiated by management of a company should be aimed at maximizing profits. there is no cash and therefore profitability must be seen as a critical success factors . It helps the owners to know the owners contribution to the total value of assets.

The overall profitability can be known by applying this ratio. It indicated the efficiency of production or trading operation. Net Sales: Net profit ratio establishes a relationship between net profit (after taxes) and sales. Return on Assets: Profitability can be measured in terms of relationship between net profit and total assets. A high gross profit ratio is a good management as it implies that cost of production is relatively low. It measures the profitability of investment. Office & Administrative Expense: this ratio measures the relationship between the indirect expenses to the net sales and here we are taking office and administrative expenses. This is calculated by dividing gross profit by net sales. This is calculated by dividing administrative expenses by net sales. .Gross Profit Ratio: This ratio expresses the relationship between Gross profit and sales. This is calculated by dividing net profit by net sales. It is determined by dividing the net income after tax to the net sales for the period and measures the profit per rupee of sales.

 Data collected from the published report of JAY-USHIN LTD. 2. Sources of Data The main source of data to conduct this study is secondary data.  Articles collected from the official website of JAY-USHIN LTD. but primary data is also used to collect some general information. Secondary Data  Data collected from the annual report of JAY-USHIN LTD. interpreted. the type of data to be collected and the procedure to be used for this purpose were decided. The data collected from the above mentioned sources will be processed.RESEARCH METHADOLOGY Research Design Descriptive research is used in this study because it will ensure the minimization of bias and maximization of reliability of data collected. The researcher had to use fact and information already available through financial statements of earlier years and analyze these to make critical evaluation of the available material. 1. Hence by making the type of the research conducted to be both Descriptive and Analytical in nature. and presented in the study.  Data collected from the various business magazines and books. From the study. analyzed. Methodology used  Types of financial statement adopted Following two types of financial statements are adopted in analyzing the firm financial position:a) Balance sheet b) Income statement . Primary Data  The information is gathered through discussion held with the executives of the finance department in JAY-USHIN LTD.

In vertical analysis we use common size statement and financial ratios. b) Vertical analysis.In horizontal analysis we use comparative statement and trend analysis.  Tools used for financial statement analysis Following financial analysis tools are used in order to interpret the financial position of the firm y y y y Ratio analysis Comparative analysis Common size analysis Percentage . Types of financial statement analysis The financial statements are analyzed based on two basic analyses:a) Horizontal analysis.

sample size and analysis pattern used to conduct the research. conceptualization and plan of the study. focus of the problem.  Chapter 3 consists of industry & company profile which gives a thorough study about the company. The chapter also includes research methodology containing the nature of research. objectives of the study.  Chapter 5 of this study contains findings and conclusions providing the end result of the study.  Chapter 4 consists of data analysis and inferences. significance of the study.  Chapter 2 explores the significant literature published on the present study reflecting understanding of the relevant theoretical and empirical background of the problem. . The last part gives the limitation of the study thus providing significant scope for further research.PLAN OF THE STUDY The structure of present study is as follows:  Chapter 1 of this study covers the introduction of the study.

industries. ³Essential of Financial Analysis´.Literature Review Timo Salmi. April (1996). Mahalakshmi N. investing in equities is an art one cannot master through sheer academic pursuit and excellence in college grades. their interpretation is difficult to understand. It is observed that it is typical of financial ratio analysis research that there are several unexpectedly distinct lines with research traditions of their own. Being able to read. This leaves much space for the development of a more robust theoretical basis and for further empirical research. Financial ratios are used for all kinds of purposes/ these include the assessment of the ability of a firm to pay its debt. ³How to Analyses Financial Statements´. And they became norms and affect performances. distributional characteristics of financial ratios. In this paper two principles have been used to identify use of financial ratios i. April (1994). Ratios are often criticized on subjectivity grounds that the analyst picks and choose ratios to analyze the performance of the firm. which is for predictive purposes Amir et al. the evaluation of business and managerial success and even the statutory regulation of a firm¶s performance. be able to develop an investment tool kit to . one will over a period of time. As the ratios are easily calculated because of which it has a mass appeal. normative use. which measures the firm ratio with the standard and secondly the empirical use. especially when ratios provide conflicting signals. and time periods. Business Economics. It requires skills to analyze a company¶s business activities before buying the share. Business Economics. Ratio analysis is a mostly used analytical tool for measuring the performance of a firm. (2009). classification of financial ratios. In doing so regularly. Some of us may have studied accounting as a discipline. understand and interpret financial statements of companies is of similar importance to stock market investor. Outlook Profit.e. But. they are not necessarily stable across the different ratios. ³A Review of the Theoretical and Empirical Basis of Financial Ratio Analysis´. The research areas reviewed are the functional form of the financial ratios. and the estimation of the internal rate of return from financial statements. this paper provides a critical review of the theoretical and empirical basis of four central areas of financial ratio analysis. A common feature of all the areas of financial ratio analysis research seems to be that while significant regularities can be observed.

like ³taaza khabar´ (hot news). Where and how do you begin? Certainly not by relying on the market grapevine or mere hearsay. or ³aaj ka tip´ (tip of the day).evaluate and steer investment decisions in equities. . sound investing begins by reading and understanding a company¶s annual report. While it is important to have your ears to ground.

Ford and Volkswagen.2 billion in 2009-10. 19 per cent by drive transmission and steering parts. India is among the most competitive manufacturers of auto components in the world. Industry experts opine that growing demand for genuine spare parts would strengthen the sector. and the Government policies of reservation for small-scale industries. The Indian auto component industry is one of India's sunrise industries with tremendous growth prospects. India is also becoming a global hub for research .INDUSTRY PROFILE EVOLUTION OF INDIAN AUTOMOBILE COMPONENTS INDUSTRY The Indian auto components industry has a long history. It made a small beginning in the 1940s with Hindustan Motors and Premier Automobiles. The 1950-70s period resulted in ancilliarisation and growth with the coming up of TELCO. the industry has emerged as one of the key auto components centers in Asia and is today seen as a significant player in the global automotive supply chain. and 12 per cent each by suspension & braking parts and body & chassis. From a low-key supplier providing components to the domestic market alone. India is now a supplier of a range of highvalue and critical automobile components to global auto makers such as General Motors. Toyota. and Mahindra. leading to increased foreign collaboration (Okada.Economic liberalization of the 1990s brought. The entry of Suzuki with joint venture with the Government of India as Maruti laid emphasis on the quality and technology of automobile components. while equipments and electrical parts capture 10 and 9 per cent. amongst others. The report states that 31 per cent of the auto component industry is dominated by engine parts. the turnover of the auto component industry is being estimated at around US$ 19. 2004). respectively. According to the Investment Commission of India. As per a report by the Automotive Component Manufacturers Association of India (ACMA). on the one hand. Bajaj. on the other. and local content requirements. The entry of new generation vehicles and demand for genuine spare parts also helped in adding to the sales for the companies.

 Overseas auto-component manufacturers. Motherson Sumi and Amtek Auto reported nearly 50 per cent growth in top line. increased demand for the passenger vehicles in the country created positive impact for the auto component manufacturers. Many international auto-component majors including Delphi. with double-digit surge in profit. The growth was attributed to the increasing demand of the original spare parts by the customer. but also "Process Technology" .and development (R&D). especially small and medium enterprises (SMEs) should invest more in capacity enhancements and Greenfield manufacturing in India to meet growing domestic demand for auto-components  Investments in Auto-IT sector is a high potential area  To encourage new wave of partnerships at the Tier 2/3 level covering the entire automotive supply chain to address not only product technology. Further. Policy Initiatives The government has taken many initiatives to promote foreign direct investment (FDI) in the industry. Major players like Bosch. Visteon.  Automatic approval for foreign equity investment up to 100 per cent of manufacture of automobiles and components is permitted  The automobile industry is deli censed  Import of components is freely allowed Looking Ahead According to ACMA. On an overall basis. 30 component makers saw rise in revenue in spite of global slowdown in the auto sector. Bosch and Meritor have set up operations in India. The component manufacturers registered 55 per cent growth on a year-on-year basis during the quarter ending March 2010.

an auto component manufacturer plans to raise private equity of around US$ 26." said Bernd Bohr.  Rane Group.  The world's largest automotive component manufacturer.9 billion)  The Auto Components industry has experienced high growth in the past few years y y Domestic market CAGR of 30% in the last 4 years Exports CAGR of 40% in the last 4 years  India¶s share. the auto component maker of Fiat group. 0.66 million by 2015. ~20% exports (US$2. and expects the country to grow faster compared to other global markets. "India will be an important market for the company in the immediate future. . The company also plans to increase its revenue from India to around US$ 429.72 million. a multi-brand car servicing facility. Chairman of the Stuttgart-based Bosch Automotive Group. plans to set up an auto component facility at Nellore. plans to invest US$ 433. Bosch.AUTO COMPONENTS OVERVIEW  A US$15-billion industry in 2006-07. is growing rapidly  The Indian auto component sector has been growing at 20% per annum since 2000 and is projected to maintain the high-growth phase of 15-20% till 2015.  Hyundai WIA. is planning to invest US$ 56. The facility is expected to be set up in two phases and would become operational by April 2011. a Chennai based auto component manufacturer.11 million for augmenting capacity for meeting increasing demand during 2010-11.8 million for expanding its business. has forayed into the country's spare parts aftermarket by entering into a partnership with Carnation Auto.9% of the global Auto Components Industry. Andhra Pradesh with an investment of US$ 259. the car component subsidiary of Hyundai Motor Company.5 million in India over the next three years.. Investments in the auto component Industry in India  Magneti Marelli.  Ashok Minda Group.

which would attract around US$ 346 million in investment. . The Tamil Nadu government has cleared the proposal of Tyre manufacturer. JK Tyre & Industries Ltd. for setting up a new production facility in the state. SWOT ANALYSIS STRENGHTS  Is globally cost competitive  Adheres to strict quality controls  Has access to latest technology  Provides support to critical infrastructure and metal industries WEAKNESSES  Industry has low level of research and development capability  Industry is exposed to cyclical downturns in the automotive industry  Most component companies are dependent on global majors for technology OPPORTUNITIES  May serve as sourcing hub for global automobile majors  Increasing globalization of the auto industry supply chains  Significant export opportunities may be realized through diversification of export basket THREATS  The presence of a large counterfeit components market poses a significant threat  Pressure on prices from OEMs continues Imports pose price based competition in the replacement market  Further marginalization of smaller players likely.

An A. Few of these are:1. It is currently a Small and fragmented industry by global standards.The Indian auto component industry is wide with over 400 firms in the organized sector. even among the better suppliers in the range of 1000-2000 PPM against the Japanese average of 100-200 PPM. but small in sales turn over which is estimated to be less than Rs. . Indian Labour productivity is lower relative to the rest of the world. Rejected parts per million (PPM):. The industry also exports close to RS 180 Crores at around 12% of combined sales. 2. This sector is the fastest growing sector in Auto industry growing at the rate of 28%.The advantage of low cost labour is negated due to lower productivity level of Indian work force.Rejection level is very high as comparison with other countries.T. found defect rates in India.Favorable factors:In spite of several handicaps there are a number of favorable factors. Lower labour productivity: .Kearney survey. Small in size: . which the industry has to overcome at industry level and organizational levels. which are Trained and skilled human resources  Wide Industry base manufacturing 97% of component required  Growing entrepreneurship  Growing domestic market  Expanding global markets  Investments by non-resident Indians  Economic liberalization Challenges: There are several challenges. 3. 15000 Crores for the organized sector.

Most of the Indian companies work for financial institution. A container load may cost 3000 US $ to USA. Government may have to think of reducing the import duties in order to bring in competition for local manufacturers. Higher Cost of Finance in India: . 5.4. Steel is the major raw material used for automotive applications and the same is increasing every quarter.Raw material like steel.The Cost to transport parts within the country is high due to high cost of fuel. Ports in India are inefficient and ship turnaround times are higher than international standards. Where as In countries like USA Europe funds are available at 1/3 the cost. . A finished product takes additional week to leave the Indian shores due to various documentation and other port formalities. castings etc are at times 20% to 50% more expensive than other countries and the quality of these raw materials also are not comparable to international standards.India has one of the highest interest rates for Capital and working capital. This makes big difference on the health of the company. polymers. and poor turnaround of vehicles. High Cost of logistics: . High Cost and poor Quality of Raw materials: . It is inefficient for individual suppliers to export small container loads. These can range from 12% to 18% and higher. The cost to export can be around 5 to 25 % depending on the commodity.

and communication device. LTD. sale. Minda  Ashwani Minda  Anil Minda  Shiv Raj Singh  Ashok Panjwani  Yukichi Harada  Virendra kumar Chairman Managing Director Technical Director Director Director Director Director . and office buildings. The company.. keyless entry. It also offers mechanical. switches & body parts. handle sets. MANAGEMENT STRUCTURE  J. and home security units. U-Shin Ltd. The Automotive Parts division offers steering lock unit. was founded in 1926 and is headquartered in Tokyo. electric measurement. and home security unit. and components for automotive. lock sets.. meter gauge for medical use. industrial machinery. and Home Security Unit. and sensors.. lump. electrical systems. Hyundai Motors India Ltd. door latches. electric fuel pump. switches. hotel. and export of various system devices and control machines for automotive. manufacture. Industrial Equipments. The company operates in three divisions: Automotive Parts. touch keys. mechanical & electronic components for four wheelers in 1986. cable wire. equipments for telecommunication. operator's seat. engages in the design. Honda Siel. a JPM Group company was incorporated as a Joint Venture company with U-Shin Ltd. development. It is a leading OEM manufacturer of automotive assemblies in India. latches.. harness. The company is a major OE supplier to almost all makers of four wheeler as well as two wheelers in India includes Maruti Suzuki Limited. The Home Security Unit division offers security system for home. industrial machinery.P. Mahindra & Mahindra and Tata Motors Ltd. Japan. heater control panels. door handles. General Motors. Honda Motor Cycle & Scooters Division. The Industrial Equipments division provides equipments for agricultural/constructive/industrial machines. and electronic locks.COMPANY PROFILE INTRODUCTION Jay-Ushin Ltd. Japan for manufacture of auto electrical. formerly known as YUHSHIN SEIKI KOGYO CO. Its products include lock sets.

A/C FLASHER WASHER MOTORS & RESERVOIRS RELAY ASSEMBLY.CONTACT ADDRESS  Registered office. Dist. ACTUATORS NOISE SUPPRESSOR CAP CENTRE DOOR LOCKING JAY-USHIN EQUITY STRUCTURE Minda family U-shin public .T. Delhi-110033. HSIDC Industrial estate. IMT Manesar. Gurgaon. sector-18 Gurgaon. GROUP ORGANISATION STRUCTURE CHAIRMAN MANAGING DIRECTOR TECHNICAL DIRECTOR JAY USHIN LTD JNS INSTRUMENTS LTD JPM TOOLS LTD ANU INDUSTRIES LTD KEY SETS COMBINATION & OTHER SW. sector-3. (HR)-122001. industrial area. Karnal road.  Factory address. G.GP-14. HEATER LEVER & PANEL DOOR LATCHES INSTRUMENT CLUSTERS SPEEDOMETERS FUEL UNITS SPEED SENSORS MOULDING TOOLS DIE CASTING TOOLS STAMPING TOOLS IGNITION COILS & IGNITION WIRE SET STARTER.Plot no-4.GI-48. CDI. (HR)-122050. WINKER.  Factory address.

Converted to J.Joint venture with U-SHIN LTD.Start of Manesar plant.Award of 100 PPM from HYUNDAI motors ltd. fiat & Bajaj. . supply to Hyundai motors. start of Pune plant and QCDDM award from HMSI.  2005:.Started manufacturing auto components with Hindustan motors. (Japan) & established JAY-USHIN LTD.  2006:. and award of ISO 9001 certification by TUV.JPM-GROUP COMPANIES MILESTONES OF JAY-UHIN LTD. with NS INC. with NIPPON SEIKI as JNS instrument ltd.Quality & delivery award from HMSI three star awards from Hyundai.Start of Chennai plant. Germany.  1999:.  1959:.  2008:. & start supplies to Maruti Udyog Ltd.  1986:.Award of ISO/TS: 16949:2002 to JAY-USHIN LTD. QCDDM award from HMSI.  1998:.  2004:.V. and incorporation of JPM tools ltd.T.A. of Japan for instrument cluster.  2001:.

JAY-USHIN PRODUCT RANGE  Lock set Scooter y y y y y Activa Dio Eterno Aviator Pleasure  Lock set Motor cycle y y y y y y Unicorn Shine Stunner Splendor Heat Zeus .

 Switches Scooter y y y y y y y Active Dio Beat Lead Eterno Aviator Pleasure  Switches motor cycle y y y y y Unicorn Shine Stunner Heat Zeus .

Lock sets. Switches & Door latch-4 wheelers & 2 wheelers  Power window switch  Mirror switch  Head lamp leveling switch  A/C Blower switch  Combination switch  HVAC Panel .

CUSTOMERS OF JAY-USHIN TWO WHEELERS CUSTOMER FOUR WHEELERS CUSTOMER .

MAIN COMPETITORS OF JAY-USHIN  Munjal showa  Denso  Thermax  Rico  Sona stearing  Lumax  Bosch  Exide  Amtek auto JAY-USHIN SALE GRAPH SALE 3500 3000 2500 2000 SALE 1500 1000 500 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 .

JAY-USHIN MARKET SHARE(IN MILLIONS) SHARE 80 70 60 50 40 30 20 10 0 Lock set switches heater control latches SHARE MISSION OF COMPANY  Design capability  Process improvement  Productivity  Value engineering  On time delivery  First time right VISION OF COMPANY  To lead the market in product quality. selling and satisfaction of customers. .

8 0.97 Current ratios 1.2 1 0. . According to my analysis the current ratio of company in four year is near about 1:1 so company position to meets its current obligation is quite satisfactory.ANALYSIS OF THE STUDY CURRENT RATIO Year 2006 2007 2008 2009 Current assets 278445912 396743125 546084083 690895007 Current liability 266316624 471888113 525614824 707190527 Current ratios 1.03 0.2 0 2006 2007 2008 2009 INTERPRETAION Generally according to a rule of thumb 2:1 is best current ratio for any company ability to meet its current liabilities or current obligations successfully but this ratio is differing from company to company so 1:1 is considered satisfactory.04 0.6 Current ratios 0.4 0.84 1.

4 0.1 0 2006 2007 2008 2009 Liquidity ratio INTERPRETATION This ratio measures the ability to meet its short term obligation as and when they arise.60 Liquidity ratio 0.6 0. If we see the ratio of past four years than its average is equal to 0.LIQUIDITY RATIO Year 2006 2007 2008 2009 Liquid assets 197117145 227955271 308804866 424888171 Current liability 266316624 471888113 525614824 707190527 Liquidity ratio 0.3 0. Generally its benchmark is 1:1 i. .48 0.6 which is insufficient for a company to bear the current liabilities in difficult situations.2 0. The company should try to increase its cash and cash equivalents so that the ratio can be increased.74 0.e. it should be in accordance with its liabilities.8 0.7 0.5 0.58 0. This depicts how good a company is to meet its current liabilities in a crunch situation.

833281678 Average collection period 39.32 37. It is difficult to set up a standard for this ratio. and so the lower the expenses of collection and increases in the liquidity of the firm.41150285 9. It depends upon the policy of the management and nature of industry.54 25.78 31.5715266 14. The higher the ratio. This show company sales policy is efficient. 11 times which is good and debt collection period is avg. the more quickly the debtor pay. 33 days which is also good. A lower debtor turnover ratio will indicate the inefficient credit sales policy of the management. the less the risk from bad debts. But according to this analysis the debtor turnover ratio of four year is avg. .175355011 11.DEBTOR¶S TURNOVER RATIO Years 2006 2007 2008 2009 Total sales 1038506437 1531762921 2376887407 2508829356 Debtors 113184333 132373452 164929878 255136529 Debtor¶s Turnover ratio 9.11 Debtor¶s Turnover ratio 16 14 12 10 8 6 4 2 0 2006 2007 2008 2009 50 40 30 Debtor s Turnover ratio 20 10 0 2006 Average collection period Average collection period 2007 2008 2009 INTERPRETAION This ratio indicates the speed with which the amount is collected from debtors. the better it is.

. Compared with the previous year.5 3 2.38 3. But it is downfall in 2009 up to 3.67 Fixed Assets Turnover Ratio 5 4.5 4 3.88 3.49 4. it will indicate that there is better utilization of fixed assets. According to this analysis in 2006 the fixed turnover ratio is near about 3 times which is increase up to 4. Because the investment in fixed assets is increased but the return is not increased. This ratio reveals how efficiently the fixed assets are being utilized.5 1 0.3 in 2008 which is good. if there is increase in this ratio.5 0 2006 2007 2008 2009 Fixed Assets Turnover Ratio INTERPRETAION This ratio is particular importance in manufacturing concerns where the investment in fixed assets is quite high.6 times which show concern.FIXED ASSETS TURNOVER RATIO Years 2006 2007 2008 2009 Total Sales 1038506437 1531762921 2376887407 2508829356 Net Fixed Assets 359412833 438264393 542613271 82998167 Fixed Assets Turnover Ratio 2.5 2 1.

18 1.83 2.62 1.5 2 1. This shows the relationship between the net sales and the total assets. The ratio is increase from 1.5 Total Assets Turnover Ratio 1 0. From this ratio one can understand how the assets are performing in achieving the objective of the company. .5 0 2006 2007 2008 2009 INTERPRETAION This ratio shows how the resources of the organization are utilized for increasing the turnover/profits.82 Total Assets Turnover Ratio 2.8 which is quite concern and management need to pay attention for efficient utilization of its current assets. During all the study period years the relationship between sales to total assets is high.6 (2006) to 2.TOTAL ASSETS TURNOVER RATIO Years 2006 2007 2008 2009 Net Sale 1038506437 1531762921 2376887407 2508829356 Total Assets 638458745 835607518 1089297354 1374493174 Total Assets Turnover Ratio 1.2 (2008) but decrease in 2009 up to 1.

However. as it is a sign of overtrading.82 126. .WORKING CAPITAL RATIO Years 2006 2007 2008 2009 Net Sale 1038506437 1531762921 2376887407 2508829356 Working Capital -75144988 12129288 20469259 -16295520 Working Capital Ratio -13.95 Working Capital Ratio 150 100 50 0 2006 -50 -100 -150 -200 2007 2008 2009 Working Capital Ratio INTERPRETAION This ratio is of particular importance in non manufacturing concerns where current assets play a major role in generating sales. a very high turnover ratio of working capital is also dangerous. it shows the number of times working capital has been rotated in producing sales. According to the above analysis there is negative ratio in 2006 and 2009 which shows the current liability is more than current assets. But in the year 2007 and 2008 the ratio is high which is good but in specific condition it is dangerous. This ratio reveals how efficiently working capital has been utilized in making sales. In other words.11 -153. A high working capital turnover ratio shows efficient use of working capital. But it is differ company to company.28 116.

STOCK TURNOVER RATIO Year 2006 2007 2008 2009 Cost of Goods Sold 1038506437 1531762921 2376887407 2508829356 Average Stock 81328767 168787854 237279217 266006836 Stock Turnover Ratio 12. the better it is. . since it indicates that stock is selling quickly. the profitability may be quite high.76 9. stock turnover ratio in 4 year is high which shows that company efficiently used the stock and sells the stock.43 Stock Turnover Ratio 14 12 10 8 6 4 2 0 2006 2007 2008 2009 Stock Turnover Ratio INTERPRETAION This ratio indicates whether stock has been efficiently used or not. According to above analysis the avg. It shows the speed with which the stock is rotated into sales or the number of times the stock is turned into sales during the year. The higher the ratio.01 9.07 10. In a business where stock turnover ratio is high. goods can be sold at a low margin of profit and even then.

. Above graph shows the gross profit ratio is not high and it is not consistent and fluctuate so company need to pay attention to increase its gross profit by decreasing its cost or sales at higher prices.GROSS PROFIT RATIO Year 2006 2007 2008 2009 Net Sale 1038506437 1531762921 2376887407 2508829356 Gross Profit Ratio 50167112 66448644 116715420 98216368 Gross Profit Ratio 5% 4% 5% 4% Gross Profit Ratio 6% 5% 4% 3% Gross Profit Ratio 2% 1% 0% 2006 2007 2008 2009 INTERPRETAION Gross profit ratio reveals profit earning capacity of the business with reference to its sales. Higher gross profit ratio is always in the interest of the business. Increase in gross profit ratio will mean reduction in cost and decrease in gross profit ratio will mean increase in cost or sales at lesser prices.

NET PROFIT RATIO Year 2006 2007 2008 2009 Net Sale 1038506437 1531762921 2376887407 2508829356 Net Profit 12307580 6673012 44889859 20313927 Net Profit Ratio 1% 0. Decrease in the ratio indicates managerial inefficiency and excessive selling and distribution expenses. Company must control its cost to increase its net profit.4% 2% 0. Above graph shows that in 2006 the net profit ratio is 1% which is decline in 2007 up to . .8% Net Profit Ratio 3% 2% 2% 1% 1% 0% 2006 2007 2008 2009 Net Profit Ratio INTERPRETAION Net profit ratio shows the operational efficiency of the business.4% and again it is rise in 2008 but it again decline in 2009 which shows there is a fluctuation in net profit ratio due to the negligence of management.

74 Expense Ratio 98 97.87 97.46 96. Lower the expense ratio. is increased. better it is.5 97 Expense Ratio 96. So company must control its expense to minimize its expense ratio.5 96 95.EXPENSE RATIO Year 2006 2007 2008 2009 Net Sale 1038506437 1531762921 2376887407 2508829356 Expenses 1006027388 1492999074 2292172862 2452342580 Expense Ratio 96.43 97. Above analysis shows that the expense ratio is high in all four year. . which means the company profit.5 2006 2007 2008 2009 INTERPRETAION Expense ratio shows the relation between expense and sales.

Debt Equity Ratio Year 2006 2007 2008 2009 Debt 231224682 205462541 373119377 455577608 Equity 125172157 115824525 171163348 157631329 Debt Equity Ratio 1.89 Debt Equity Ratio 3.5 3 2.5 0 2006 2007 2008 2009 Debt Equity Ratio INTERPRETAION This ratio is calculated to know about the organizations repayment capacity of long term debts. there cannot be any µrule of thumb¶ for all the types of business. It shows that claim of outsiders are greater than those of owners.5 1 0. A ratio of 1:1 may be usually considered to be a satisfactory ratio although.5 2 1. Above analysis shows that debt equity ratio is high in all four year so it is not good for company.84 1. .17 2.77 2. A low ratio is considered as favorable from the long-term creditor¶s point of view because a high proportion of owner¶s funds provide a large margin of safety for them.

It is decline after 2007. So company need to pay attention.PROPRIETORY RATIO Year 2006 2007 2008 2009 Share Holder Fund 125172157 115824525 171163348 157631329 Total Assts 356396839 321287066 544282725 613208937 Proprietary Ratio 35% 36% 31% 25% Proprietory Ratio 40% 35% 30% 25% 20% Proprietory Ratio 15% 10% 5% 0% 2006 2007 2008 2009 INTERPRETAION This ratio reveals the owner contribution to the total value of assets. Higher the ratio better it is for the long term solvency position of the company. . Above analysis shows that the proprietary ratio is high but it is not consistent in all the year. This ratio shows the long term solvency of the business. It shows the financial strength of the company.

The ratio is also helpful in estimating the capacity of the company to declare dividends in equity share. But in 2009 it decline sharply up to Rs.18 1. 5 per share. Higher the ratio.72 11.61 5. . So company need to maintain in earning per share ratio.25 Earning Per Share 14 12 10 8 6 4 2 0 2006 2007 2008 2009 Earning Per Share INTERPRETAION This ratio is helpful in the determination of the market price of the equity share of the company.EARNING PER SHARE Year 2006 2007 2008 2009 Net Profit 12308000 6673000 44890000 20314000 Number of Equity Share 3864500 3864500 3864500 3864500 Earnings Per Share 3. the best for the company goodwill and position. 11. Above graph shows that in 2008 the company earning per share is very high Rs.

14 38645000 77179525 115824525 38645000 86527157 125172157 0 9347632 9347632 0 12.29 11.23 13.2 18.88 498132164 159312372 20593041 359412833 554383091 177373171 61254473 438264393 56250927 18060799 40661432 78851560 11.95 -6.58 42.1 11.45 21.62 30.34 197.25 16.11 12.88 168180916 63043766 231224682 134161911 71300630 205462541 34019005 8256864 25762141 20.COMPARATIVE BALANCE SHEET 2005-06 & 2006-07 Particulars Sources of Funds Shareholder's Funds share capital reserve and surplus Total(A) Loan Funds secured loans unsecured loans Total(B) Current liabilities & Provisions current liabilities Provisions Total (C ) Creditors for finance lease(D) Deferred Tax Liability(E) Total (A+B+C+D+E) 226086690 40229934 266316624 1226088 23866826 638458745 429885827 42002286 471888113 0 33084707 835607518 203799137 1772352 205571489 1226088 9217881 197148773 90.14 4.4 77.19 100 38.11 2005-06 2006-07 Increase/Decrease Percentage Change Application of Funds fixed assets less: Depreciation Add: Capital work in progress Total (A) Current Assets Inventory Sundry Debtors Cash & Bank Balances Loans & Advances Total (B) Investment (c ) Total (A+B+C ) 81328767 113184333 15911506 68021306 278445912 600000 638458745 16878754 132373452 14924368 80657451 396743125 600000 835607518 64450013 19189119 -987138 12636145 118297213 0 197148773 79.94 .48 0 30.

Sundry Debtors have only been increased by 16. Whereas the Reserves and Surplus has been increased 12.3% and unsecured loan has increased by 13.COMPARATIVE BALANCE SHEET 2005-06 & 2006-07 The Share capital has remained constant from the past year. Loans and Advances have been increased by 18.95% whereas the cash and bank balance has gone down into negative from the previous year by -987138 i.INTERPRETAION: . -6. Secured loan has been paid to the extent of 20.58% and total assets have been increased by 30.e. The current liabilities have increased by 90.94%. .11% from the past year.2%.4% The net fixed assets have been increased by 21.14% from the past year and provision has increased by 4. .1%.88%.

59 12.59 37.88 11.53 50.33 57.64 0 30.46 30.91 81.6 38645000 86527157 125172157 38645000 118986329 157631329 0 32459172 32459172 0 37.38 0 0.36 134161911 71300630 205462541 313879939 59239438 373119377 179718028 -12061192 167656836 133.79 24.51 25.96 -16.93 2006-2007 2007-2008 Increase/Decrease Percentage Change Application of Funds fixed assets less: Depreciation Add: Capital work in progress Total (A) Current Assets Inventory Sundry Debtors Cash & Bank Balances Loans & Advances Total (B) Investment (c ) Total (A+B+C ) 16878754 132373452 14924368 80657451 396743125 600000 835607518 237279217 164929878 16764190 127110798 546084083 600000 1089297354 220400463 32556426 1839822 46453347 149340958 0 253689836 1305.31 23.36 554383091 177373171 61254473 438264393 731452416 225402549 36563404 542613271 177069325 48029378 24691069 104348878 31.81 .94 27.COMPARATIVE BALANCE SHEET 2006-07 & 2007-08 Particulars Sources of Funds Shareholder's Funds share capital reserve and surplus Total(A) Loan Funds secured loans unsecured loans Total(B) Current liabilities & Provisions current liabilities Provisions Total (C ) Creditors for finance lease(D) Deferred Tax Liability(E) Total (A+B+C+D+E) 429885827 42002286 471888113 0 33084707 835607518 462241350 63373474 525614824 0 32931824 1089297354 32355523 21371188 53726711 0 152883 253689836 7.08 40.

. Whereas the Reserves and Surplus has been increased 37. Unsecured loan has been paid to the extent of 16. Sundry Debtors have only been increased by 24.36%.88% The gross net fixed assets have been increased by 23.59% and total assets have been increased by 30. Loans and Advances have been increased by 57.59% whereas the cash and bank balance has also up by 12.81%.COMPARATIVE BALANCE SHEET 2006-07& 2007-08 The Share capital has remained constant from the past year.33%.INTERPRETAION: .53% from the past year and provision has increased by 50.51% from the past year. The current liabilities have increased by 57.91% and secured loan has increased by 133.96%.

11 54.37 11.86 10.17 Total (A+B+C+D+E) Application of Funds fixed assets less: Depreciation Add: Capital work in progress Total (A) Current Assets Inventory Sundry Debtors Cash & Bank Balances Loans & Advances Total (B) Investment (c ) 1089297354 1374493174 285195820 26.98 31.61 25.34 22.69 5.18 731452416 225402549 36563404 542613271 918815832 283953512 48135847 682998167 187363416 58550963 11572443 140384896 25.54 0 23.65 25.38 34.52 0 Total (A+B+C ) 1089297354 1374493174 285195820 26.47 -6.1 462241350 63373474 525614824 0 32931824 637236751 69953776 707190527 0 40561691 174995401 6580302 181575703 0 7629867 37.87 237279217 164929878 16764190 127110798 546084083 600000 266006836 255136529 17633295 152118347 690895007 600000 28727619 90206651 869105 25007549 144810924 0 12.COMPARATIVE BALANCE SHEET 2007-08 & 2008-09 Particulars 2007-2008 2008-2009 Increase/Decrease Percentage Change Sources of Funds Shareholder's Funds share capital reserve and surplus Total(A) Loan Funds secured loans unsecured loans Total(B) Current liabilities & Provisions current liabilities Provisions Total (C ) Creditors for finance lease(D) Deferred Tax Liability(E) 38645000 118986329 157631329 38645000 132518348 171163348 0 13532019 13532019 0 11.18 19.37 313879939 59239438 373119377 400095001 55482607 455577608 86215062 -3756831 82458231 27.67 26.18 .

47%.18%.86% and provisions by 10. The current liability has been increased by 37.1% in which the unsecured loan has been decreased by -6.37%.34% and secured loan has increased by 27.87% as compared to the last year.18%. The borrowed funds have been increased by 22. .38%. And the cash and bank balances have increased by 5. Reserves and Surplus have increased 11. Whereas the Sundry Debtors has increased 54.INTERPRETAION: . The total liabilities have been increased by 26.COMPARATIVE BALANCE SHEET 2007-08& 2008-09 The Share capital has remained constant from the past year. The net bock of assets has been increased by 25.69% over the past year. Total assets has been increased by 26.18%.

03 30. Total Expenditure Net Profit 12307580 6673012 -5634568 -45.69 47.58 109.78 .34 23.4 46.13 -45.5 40.06 20.75 Particulars 2005-2006 1211557800 173051363 1038506437 13608809 4079254 1056194500 1155506 746949618 74916425 13285063 83713882 12869890 1404201 3594975 25016265 1799345 2519220 1523224 8716913 9784886 1446076 -1924389 19256288 31308515 6551017 1043886920 Income Sales Less: Excise duty Net Sales Rent Other Income Total Income Expenditure Purchases of trading goods Raw material & component consumed other operational expenses Power & Fuel Employee Remuneration & Benefit Repair & Maintenance Insurance Legal & Professional Travelling & Conveyance Printing & Stationary Communication Fees & Subscription Sales Expenses Royalty Other Expenses Increased/Decreased in fin.58 52.7 20.68 11.88 49.COMPARATIVE INCOME STATEMENT 2005-06 & 2006-07 Percentage 2006-2007 Increase/Decrease Change 1785841364 254078443 1531762921 19130922 8553875 1559447718 419915 1121523035 117676812 23681999 107757267 19349068 1728937 1956272 38195076 1998311 3046009 9777342 13049669 11745031 1887738 -2160939 21367532 41346585 18429047 1552774706 574283564 81027080 493256484 5522113 4474621 503253218 -735591 374573417 42760387 10396936 24043385 6479178 324736 -1638703 13178811 198966 526789 8254118 4332756 1960145 441662 236550 2111244 10038070 11878030 508887786 47.29 10.66 50.32 48.26 28.06 181.82 47.96 32. And work in process Finance charges Depreciation Tax & others.54 12.65 -63.72 50.15 57.91 541.08 78.

62% and Employee Remuneration and Benefit has been increased by 28.INTERPRETATION: -COMPARATIVE INCOME STATEMENT 2005-06 & 2006-07 The total income was increased by 47.09%. Financial expenses have been increased by 10.06% and 181.65% i.72%.32% respectively. Administrative expense has been increased by 50. Rs 503253218.e. . The operational expenses have been increased by 50.96% and depreciation and tax has been increased by 32.

96 39.78 2.34 -100 60. Total Expenditure Net Profit 6673012 44889859 38216847 572.91 66.11 Income Sales Less: Excise duty Net Sales Rent Other Income Total Income Expenditure Purchases of trading goods Raw material & component consumed other operational expenses Power & Fuel Employee Remuneration & Benefit Repair & Maintenance Insurance Legal & Professional Travelling & Conveyance Printing & Stationary Communication Fees & Subscription Sales Expenses Royalty Director Remuneration Other Expenses Increased/Decreased in fin.71 .11 -10.37 192.95 42.59 14.04 28.76 55.47 -4.42 8.77 38. And work in process Finance charges Depreciation Tax & others.82 6.3 49.66 54.87 27.34 39.76 16.54 52.COMPARATIVE INCOME STATEMENT 2006-07 & 2007-08 Particulars 2006-2007 1785841364 254078443 1531762921 19130922 8553875 1559447718 1155506 1120787444 117676812 23681999 102621267 19349068 1728937 1956272 38195076 1998311 3046009 9777342 13049669 11745031 5136000 1887738 -2160939 21367532 41346585 18429047 1552774706 2007-2008 Increase/Decrease Percentage Change 2872182535 497375758 2374806777 24530137 7470738 2406807652 0 1801929314 162530372 21242085 153880532 27567123 1645627 2081930 41382153 2796911 4257879 10030318 11147603 11969306 7414708 5515333 -10932514 35633552 48320812 23504749 2361917793 1086341171 243297315 843043856 5399215 -1083137 847359934 -1155506 681141870 44853560 -2439914 51259265 8218055 -83310 125658 3187077 798600 1211870 252976 1902066 224275 2278708 3627595 8771575 14266020 6974227 5075702 809143087 60.91 44.17 405.22 -12.57 1.83 95.

71%.e. While the net profit has been increased by 572. The depreciation has been increased by 16.58.34%.87%. Whereas the operational expenses has been decreased over the past year by 724839924 i. while the tax has been increased over the past year by 27.e.54% respectively.95%.47%. . Employee remuneration and benefits has been increased by 49. 53.INTERPRETATION: -COMPARATIVE INCOME STATEMENT 2006-07 & 2007-08 The total income has increased from the past year by 847359934 i.

2 -28 7.94 80.72 29.36 5.95%. While the net profit has been decreased by -56.75%.64 -5. Whereas the operational expenses has been increased over the past year by 98817940 i.53 6.2%. 4.35% and 17. . 5. while the tax has been reduced over the past year by 28%.26 30.75 INTERPRETATION: -COMPARATIVE INCOME STATEMENT 2007-08 & 2008-09 The total income has from the increased past year by 141670668 i.88%.06 -14. The depreciation has been increased by 26.9 14.COMPARATIVE INCOME STATEMENT 2007-08 & 2008-09 Percentage Particulars 2007-2008 2008-2009 Increase/Decrease Change Income sales (including operating income) Less: Excise duty Net Sales Rent Other Income Total Income 2874263165 497375758 2508829356 24530137 7470738 2408888280 2933409690 424580334 2376887407 32065734 9663858 2550558948 59146525 -72795424 -131941949 7535597 2193120 141670668 2.88 Expenditure Raw material consumed Manufacturing Expenses Administrative Expenses Personnel Expenses Finance Charges Depreciation Tax Total Expenditure 1790996801 262167317 102013956 101395721 35599067 48320812 23504749 2361917793 1907903041 244079017 116650095 119589679 64120748 60980970 16921471 2530245021 116906240 -18088300 14636139 18193958 28521681 12660158 -6583278 168327228 6.13 Net Profit 46970487 20313927 -26656560 -56.35 17.12 26.e. Administrative expense and personnel expense has been increased over the past year is 14.81%.e.

1 100 12.1 18.22 56.1 2005-06 Percentage change .9 36.5 10.41 6.COMMON SIZE BALANCE SHEET 2005-06 Particulars Sources of Funds Shareholder's Funds share capital reserve and surplus Total(A) Loan Funds secured loans unsecured loans Total(B) Current liabilities & Provisions current liabilities provisions Total (C ) Creditors for finance lease(D) Deffered Tax Liability(E) Total (A+B+C+D+E) Application of Funds fixed assets less: Depreciation Add: Capital work in progress Total (A) Current Assets Inventory Sundry Debtors Cash & Bank Balances Loans & Advances Total (B) Investment (c ) Total (A+B+C ) 81328767 113184333 15911506 68021306 278445912 600000 638458745 0.65 498132164 159312372 20593041 359412833 78 25 3.34 9.74 17.29 226086690 40229934 266316624 1226088 23866826 638458745 35.75 100 168180916 63043766 231224682 26.71 0.3 41.24 38645000 77179525 115824525 6 12.73 2.2 3.

24% of the Total Liabilities. In Net Fixed Assets 56. 17.. . The borrowed Fund is 36. out of which secured loan is 26.71%.5% of the total Assets and Loans and Advances stands at 10.29% has been invested whereas in Current Assets maximum part of it has been in Sundry Debtors i. the cash and Bank balance is at 2.COMMON SIZE BALANCE SHEET 2005-06 The share capital is the part of the total liabilities is 6% and Reserves and Surplus has almost 12% part in the funds of the company. The total amount in current liabilities and provisions is 41.34% and unsecured loan is 10%. The Application of Funds has been done in Net Fixed Assets and the Current Assets Loans and Advances.e.65%.73%.INTERPRETATION: .

84 1.COMMON SIZE BALANCE SHEET 2006-07 Particulars Sources of Funds Shareholder's Funds share capital reserve and surplus Total(A) Loan Funds secured loans unsecured loans Total(B) Current liabilities & Provisions current liabilities provisions Total (C ) Creditors for finance lease(D) Deffered Tax Liability(E) Total (A+B+C+D+E) Application of Funds fixed assets less: Depreciation Add: Capital work in progress Total (A) Current Assets Inventory Sundry Debtors Cash & Bank Balances Loans & Advances Total (B) Investment (c ) Total (A+B+C ) 16878754 132373452 14924368 80657451 396743125 600000 835607518 20.35 14.33 52.79 9.47 7.97 2006-2007 Percentage change .62 10.58 38645000 86527157 125172157 4.47 0 3.45 429885827 42002286 471888113 0 33084707 835607518 51.44 5.07 100 554383091 177373171 61254473 438264393 66.05 8.34 40.03 56.53 24.96 100 134161911 71300630 205462541 16.2 15.65 47.48 0.

Whereas in Current Assets.53% in the total assets. 20.e.65% of the total Assets in which maximum share is of Inventory i. The current Liabilities and Provisions have 56.53% respectively.35% of the total liabilities. The borrowed fund i.COMMON SIZE BALANCE SHEET 2006-07 The Share capital has remained constant as compared to the last year at Rs 38645000 and the Reserves and Surplus forms the major part of the shareholders fund and is at 10. The net block of assets has been increased as compared to the last year by Rs 78851560and has 52. Loans & Advances forms 9.e.INTERPRETATION: . secured and unsecured loan is at 16.47% in the total liabilities.2% and the investment has ..05% and 8. .07% of the total assets.

54 11.36 49.81 5.44 34.14 1.43 5.67 50.81 237279217 164929878 16764190 127110798 546084083 600000 21.47 313879939 59239438 373119377 28.02 Total (A+B+C+D+E) Application of Funds fixed assets less: Depreciation Add: Capital work in progress Total (A) Current Assets Inventory Sundry Debtors Cash & Bank Balances Loans & Advances Total (B) Investment (c ) 1089297354 100 731452416 225402549 36563404 542613271 67.69 3.Particulars Sources of Funds Shareholder's Funds share capital reserve and surplus Total(A) Loan Funds secured loans unsecured loans Total(B) COMMON SIZE BALANCE SHEET 2007-08 2007-2008 Percentage change 38645000 118986329 157631329 3.78 15.15 20.92 14.06 Total (A+B+C ) 1089297354 100 .55 10.25 Current liabilities & Provisions current liabilities provisions Total (C ) Creditors for finance lease(D) Deffered Tax Liability(E) 462241350 63373474 525614824 0 32931824 42.13 0.82 48.25 0 3.

25% out of which secured loan has 28. Whereas the Current liabilities are 42.INTERPRETATION: .COMMON SIZE BALANCE SHEET 2007-08 The Share Capital has remained same from the last year and Reserves and Surplus has been increased from the last year and has the 10.43% of total Liabilities.13% and Loans and Advances are 11. The Net Block of assets has been 49.and unsecured Loan is 5..67% which has been increased from last year by Rs 46453347 .81% and the Current Assets have been 50.92% of the Total Liabilities and the Total Loan Fund is 34.44%.81%.

45 400095001 55482607 455577608 29.15 Current liabilities & Provisions current liabilities provisions Total (C ) Creditors for finance lease(D) Deffered Tax Liability(E) 637236751 69953776 707190527 0 40561691 46.07 50.69 266006836 255136529 17633295 152118347 690895007 600000 19.66 3.56 1.36 5.64 12.45 0 2.04 33.11 4.09 51.95 Total (A+B+C+D+E) Application of Funds fixed assets less: Depreciation Add: Capital work in progress Total (A) Current Assets Inventory Sundry Debtors Cash & Bank Balances Loans & Advances Total (B) Investment (c ) 1374493174 100 918815832 283953512 48135847 682998167 66.35 18.26 0.Particulars Sources of Funds Shareholder's Funds share capital reserve and surplus Total(A) Loan Funds secured loans unsecured loans Total(B) COMMON SIZE BALANCE SHEET 2007-08 2008-2009 Percentage change 38645000 132518348 171163348 2.5 49.81 9.06 Total (A+B+C ) 1374493174 100 .85 20.28 11.

the cash and Bank balance is at 1. 19.45%..04%.64% part in the funds of the company. out of which secured loan is 29. In Net Fixed Assets 49.28% of the total Assets and Loans and Advances stands at 11.35%. The total amount in current liabilities and provisions is 51.e.COMMON SIZE BALANCE SHEET 2008-09 The Share Capital has remained same from the last year and Reserves and Surplus has almost 9.11% and unsecured loan is 4. . The borrowed Fund is 33. The Application of Funds has been done in Net Fixed Assets and the Current Assets Loans and Advances.07%.15% of the Total Liabilities.INTERPRETATION: .69% has been invested whereas in Current Assets maximum part of it has been in Inventory i.

38 98.23 0. Total Expenditure Net Profit 12307580 .18 1.55 7.11 71.94 0.71 -16.4 0.17 0.84 3 0.13 0.18 1.14 0.34 2.14 -0. And work in process Finance charges Depreciation Tax & others.83 0.39 100 0.24 0.COMMON SIZE INCOME STATEMENT 2005-06 Particulars 2005-2006 1211557800 173051363 1038506437 13608809 4079254 1056194500 1155506 746949618 74916425 13285063 83713882 12869890 1404201 3594975 25016265 1799345 2519220 1523224 8716913 9784886 1446076 -1924389 19256288 31308515 6551017 1043886920 Percentage Change 114.29 0.27 8 1.32 1.63 100 Income sales Less: Excise duty Net Sales Rent Other Income Total Income Expenditure Purchases of trading goods Raw material & component consumed other operational expenses Power & Fuel Employee Remuneration & Benefit Repair & Maintenance Insurance Legal & Professional Travelling & Conveyance Printing & Stationary Communication Fees & Subscription Sales Expenses Royalty Other Expenses Increased/Decreased in fin.

. approx.INTERPRETATION: . The major expenses are done at raw material and component consumed Rs 746949618 that is 71% of the total income and Operational Expenses are 7% of the total Income. Tax are around 4%. the total Expenditure is 98.12%. Other Expenses like Depreciation. The Net Profit is .83%.COMMON SIZE INCOME STATEMENT 2005-06 The Total Income for the year stands at Rs 106 Cr.

76 0. And work in process Finance charges Depreciation Tax & others.6 1.19 100 Income sales Less: Excise duty Net Sales Rent Other Income Total Income Expenditure Purchases of trading goods Raw material & component consumed other operational expenses Power & Fuel Employee Remuneration & Benefit Repair & Maintenance Insurance Legal & Professional Travelling & Conveyance Printing & Stationary Communication Fees & Subscription Sales Expenses Royalty Director Remuneration Other Expenses Increased/Decreased in fin.84 0.52 -16.22 1.4 2.COMMON SIZE INCOME STATEMENT 2006-07 Particulars 2006-2007 1785841364 254078443 1531762921 19130922 8553875 1559447718 1155506 1120787444 117676812 23681999 102621267 19349068 1728937 1956272 38195076 1998311 3046009 9777342 13049669 11745031 5136000 1887738 -2160939 21367532 41346585 18429047 1552774706 Percentage Change 114.66 1.07 72.46 0.58 1.12 -0.14 1.29 98.55 100 0.23 0. Total Expenditure Net Profit 6673012 0.43 .12 2.33 0.63 0.11 0.18 7.13 0.2 0.52 6.25 0.

. approx and the major part of expenses is raw material& component used that are Rs 1120787444 and 45.57% and the Net Profit is .COMMON SIZE INCOME STATEMENT 2006-07 The total income for the year stands at Rs 156 Cr. The total Expenses are 99.58%.56% of the total income.INTERPRETATION: . The other major expenses that are done are on other Operational Expenses that is 7. Expenses on Depreciation and Tax together are 4% of the Total Income.43% of the total Income.

approx.31 100 Expenditure Raw material consumed Manufacturing Expenses Administrative Expenses Personnel Expenses Finance Charges Depreciation Tax Total Expenditure 1790996801 262167317 102013956 101395721 35599067 48320812 23504749 2361917793 75.95 INTERPRETATION: . Tax are around 3%.51 2.04 1 100 Net Profit 46970487 1. The major expenses is raw material consumed that is 75.83 11.32% of the total Income. .1 4.COMMON SIZE INCOME STATEMENT 2007-08 Particulars 2007-2008 Percentage Change Income sales (including operating income) Less: Excise duty Net Sales Rent Other Income Total Income 2874263165 497375758 2376887407 24530137 7470738 2408888280 119.67 1.02 0.31 -20.32 4.83% of the total income and manufacturing Expenses is 11.65 98.3 1.1% and Administrative Expenses are 4. Other Expenses like Depreciation. the total Expenditure is 98%.COMMON SIZE INCOME STATEMENT 2007-08 The Total Income for the year stands at Rs 240Cr. The Net Profit is 2% which has been increased from the last year Net Profit.

COMMON SIZE INCOME STATEMENT 2008-09

Particulars

2008-2009

Percentage Change

Income
sales (including operating income) Less: Excise duty Net Sales Rent Other Income Total Income 2933409690 424580334 2508829356 32065734 9663858 2550558948 115.01 -16.65 98.36 1.26 0.39 100

Expenditure
Raw material consumed Manufacturing Expenses Administrative Expenses Personnel Expenses Finance Charges Depreciation Tax Total Expenditure 1907903041 244079017 116650095 119589679 64120748 60980970 16921471 2530245021 75.4 9.65 4.61 4.73 2.53 2.41 0.67 100

Net Profit

20313927

0.8

INTERPRETATION: - COMMON SIZE INCOME STATEMENT 2008-09 The Total Income for the year stands at Rs 255Cr. approx. The major expenses is raw material consumed that is 75.4% of the total income and manufacturing Expenses is 9.65% and Administrative Expenses are 4.61% of the total Income. Other Expenses like Depreciation, Tax are around 3%. The Net Profit is .8% which has been decreased in percentage from the last year Net Profit.

FINDINGS OF THE STUDY 

Liquidity position of the company is not good in four year because Current assets have been increased heavily by 148% from past four years. But cash & bank balance increased only by 11% due to Average collection period is decreases from past four years and Gross profit ratio is decreased by 20% from past four years. 

Company profitability is worse in four year because The Company is not utilizing its resources efficiently to generate the profit due to decreased in Stock turnover ratio by 24% from past four years and Net profit ratio is also heavily fluctuate and decrease by 20% from past four years and Operational expenses have been increased heavily by 132%. 

Long term solvency position is concern for company because its debt equity ratio is high and working capital ratio also decreased heavily from the past four year. 

The financial performance of the company is not good enough for bright and secure future there is lot of areas need improvement regarding their functioning.

SUGGESTIONS OF THE STUDY 
Company has to reduce its operational inefficiencies by reducing the cost.  Company has to increase the efficiencies in using the resources like fixed assets and stock.  Company has to raise its cash & bank balance by reducing debt collection period to improve its liquidity position.  Company has to control the fluctuation or improve the instability in financial results.  Company needs a regular and efficient analysis of their financial performance.  Company has to improve its net profit by reducing cost and increasing revenue.  Company has to adopt suitable method for inventory management which helps in increasing the stock turnover ratio.  Company has to control its debt by generating more profit to control solvency position.

profitability and liquidity position. In conclusion I can say that it was a project which helped me understand the functioning of a finance department in an organization. Without effective financial management a company cannot in this competitive world. labor.CONCLUSION OF THE STUDY Finance is the life blood of every business. Company has enough resources like land. The firm financial data shows that in four year there is no increase in financial efficiency. But it lags in few things that it needs to concentrate financially and operationally. It helped me get an inside view as to what is done in a finance department. . capital. Even though it provides Business to Business services. technology and potential customers but fail to improve its profitability because company has lack in operational efficiency. has the potential to cater to the needs of the customer in every possible way. which is concern for the company. Jay Ushin Ltd.

LIMITATION OF THE STUDY  Analysis and interpretation are based on secondary data.  Some figures have been round off to nearest rupees.  The study is base only four year data. .  Inter firm comparison was not possible due to non availability of competitor data.  Time is too short to study and analysis.  Price level changes are not considered.

WEBSITES  http://google. Business Economics. Vikas publishing house Pvt.A (2006). New Delhi  Pandey I M (2006).  Timo Salmi. 8th Edition. ³Essential of Financial Analysis´. 8th Edition. Tata McGraw Hill Publishing Company Ltd. (2009). Outlook Profit.com  http://investopedia.S et al (1999). Financial Management. ³How to Analyses Financial Statements´. New Delhi. 3rd edition.  Mahalakshmi N. 4th Edition.com  http://ushingroup.  Annual Report of Jay Ushin Ltd. New Delhi. Working Capital Management.com  http://moneycontrol. Vikas Publishing house Pvt Ltd.com  http://jpmgroup. Financial Management. from 2005-2009. April (1994).  Pandey I M (2006)..com . Management and Accounting.  Reddy T. Tata Mc Graw hill Publishing Company Ltd.  Sahaf M. April (1996). Business Economics. Ltd. New Delhi.BIBLIOGRAPHY OF THE STUDY  Amir et al. ³A Review of the Theoretical and Empirical Basis of Financial Ratio Analysis´.

Sign up to vote on this title
UsefulNot useful