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REGIONAL COLLEGE OF MANAGEMENT AUTONOMOUS, BHUBANESWAR
I NIHARIKA MATHUR, hereby declare that this project report entitled “FINANCIAL STATEMENT ANALYSIS” under Tayo Rolls Limited is based on my own study. This project is completely based on my work experience of 6 weeks in the Tayo Rolls Limited. I also declare that this report is submitted only to Regional College of Management (Autonomous) and Tayo Rolls Limited for evaluation purpose.
DATE: PLACE: ----------------------------------SIGNATURE
I express my gratitude to the management of TAYO ROLLS LIMITED for allowing me to do this project in this esteemed organization and allowing me to learn corporate culture. I am sincerely obliged to my Guide Mr. Suresh Padmanabhan, Chief Finance Officer, TAYO ROLLS LIMITED for his valuable guidance and support in completing the project successfully. I would also like to express my sincere thanks to Mr. Amit Mukherjee, Divisional manager Finance, Mr. Kalyan Banerjee, Sr. Manager Finance, and Mr. Santosh Kumbhakar, Senior Officer Accounts, TAYO ROLLS LIMITED for his co-operation in successfully completing the project. I would like to express my gratitude and appreciation to my Faculty Guide Prof. G.C Patra of MBA Finance department for his kind support while working on the project. At the onset I would like to express a deep sense of gratitude to each and every person who helped and supported me during my project report, which made it possible for me to bring up my project report on topic FINANCIAL POSITION OF TAYO ROLLS LIMITED FROM YEAR 2006-2011. Last but not the least; I would also like to thanks all the respondents & my friends for giving me their precious time, relevant information.
2011 to 07. Suresh Padmanabhan. Chief Finance Officer. Bhubaneswar undergoing summer training. 2011 during which period she was placed in the Finance Department under the guidance of Mr. Place: Date: Signature of the Company Guide  .Corporate Guide Certificate This is to certify that Miss Niharika Mathur. The conduct and response of Miss Niharika Mathur during the training period has found to be good. 07. Miss Niharika Mathur has now submitted a copy of her project report on the topic of “A STUDY ON FINANCIAL STATEMENT ANALYSIS WITH REFERENCE TO TAYO ROLLS LIMITED”. a student of Regional College Of Management Autonomous. has completed 42days of training in our organization from 27.05.
Place: Date: Signature of the Faculty Guide (Prof.Internal Guide Certificate This is to certify that Miss Niharika Mathur bearing registration number 1006247087 of REGIONAL COLLEGE OF MANAGEMENT AUTONOMOUS has successfully completed the project work titled “A Study On Financial Statement Analysis With reference To Tayo Rolls Limited” in partial fulfillment of requirement for the award of Masters In Business Administration prescribed by the REGIONAL COLLEGE OF MANAGEMENT AUTONOMOUS. This project is the record of authentic work carried out during the academic Year (2010-2012).C Patra) Faculty of Finance  . G.
Chapter-4 Financial Statement Analysis & Interpretations 31 57 59 60 61 Chapter-5 Findings Recommendations Conclusion Bibliography  . Chapter-3 Organisational Overview Organisation‟s Profile (a) Organization‟s Policy (b) Plant Facilities (c) Management Of Business Ethics (d) Awards & Recognitions (e) Business Excellence (f) Quality Assurance (g) Research & Development (h) Organization‟s Ideology (i) Management Team Product Profile 4.TABLE OF CONTENTS Serial No. Chapter-1 Abstract 8 10 10 11 12 13 15 15 17 18 20 21 23 24 25 25 25 26 27 28 28 Particulars Page No. 2. Chapter-2 Preface Executive Summary Types Of Financial Analysis Purpose Of Financial Analysis Tools Of Financial Analysis Objective Of The Study Stages In Research Research Methodology Limitations Of Financial Analysis 3. 5. 1.
Chapter – 1 Abstract  .
Chief Finance Officer (Accounts Department) FINANCIAL POSITION is the financial picture of a company as stated in the FINANCIAL STATEMENT. Suresh Padmanabhan. this project report contains the analysis of the financial position of TAYO ROLLS LIMITED. G. The aim of the project is to study the financial position of TAYO ROLLS Limited from year (2006-2011). “TAYO ROLLS LIMITED”. risk bearing capacity of the company. b) Statement of Assets and Liabilities/Position statement (Balance sheet). Here. FINANCIAL STATEMENT comprises of three statements: a) Income statement (Trading and P/L accounts). c) Cash flow statement. RCMA Bhubaneswar) and Mr. the solvency position of the company.C Patra (Faculty Finance. comparative study of two year‟s income statements and balance sheets.ABSTRACT This Project Report will emphasize on the FINANCIAL STAEMENT ANALYSIS of a manufacturing concern. This had the formal approval of Prof.  .
Chapter – 2 Preface Executive Summary Types Of Financial Analysis Purpose Of Financial Analysis Tools Of Financial Analysis Objective Of The Study Stages In Research Research Methodology Limitations  .
expressions of the relationship between different item.30000. The analysis simplifies. and short-term borrowings. debenture-holders. The analysis of financial statement makes it simple. Financial analysis. solvency and the growth potential of the business. inventories. and the net sales amount to Rs. which is slightly broader in scope. without taking excessive financial risks. and when or whether to pay dividends to shareholders. and the tools and analysis used to make the decisions..e. we come to know that the gross profit margin of the first firm amounts to 25% i. relationship between gross profit and net sales. 100000. Suppose the Gross profit of the firm is Rs.PREFACE: Financial Management is the specific area of finance dealing with the financial decision corporations make. Financial statements are split into simple statements by the process of rearranging. and journalist‟s etc. The discipline as a whole may be divided between long-term and short-term decisions and techniques. Management and deal with balance of current assets and current liabilities by managing cash. 30000. potential investors. (25000*100)/100000 and the second  . corporate or not. operational efficiency. such as. EXECUTIVE SUMMARY: Financial analysis is the systematic numerical calculation of the relationship of one financial fact with the other to measure the profitability. 25000 and Net sales are worth Rs. whether to finance that investment with equity or debt. Both share the same goal of enhancing firm value by ensuring that return on capital exceeds cost of capital. Various items of income and position statements are compared and their interrelationship is established. Corporate finance is closely related to managerial finance. as such presents meaningful. intelligible and meaningful for all the concerned parties. regrouping and the calculations of various ratios. describing the financial techniques available to all forms of business enterprise. the firm which has earned Rs. Financial analysis in this way is the purposeful and systematic presentation of financial statements. At the same time the Gross profit of the second firm is Rs. According to these figures. Short-term corporate finance decisions are called working capital. creditors. as profit may be said to be superior as regards its performance. 200000. Capital investment decisions comprise the long-term choices about which projects receive investment. The analysis serves the interest of shareholders. summarizes and systematizes the monotonous figures. bankers. If we analyze the figures.
direct expenses. assets and liabilities and other items. Analysis of financial statements is an art. financial expenses and sales is vertical analysis. cost of production. Structural or static analysis: It analyses a single set of financial statement. Horizontal analysis: According to this method. The use of financial analysis is made to measure the profitability. Vertical analysis: According to this analysis financial statements of the same period of different items of the same financial statements are compared. In this way this can also be presented as under: 1. Income statements and position statements used as the basis for analysis are known as common size statements. 2. sales. Trend analysis or dynamic analysis: The financial analysis indicates the trend of purchases.. to make comparative studies and effective future plans. Relationship between the two variables of the same statement is studied. selling expenses. (30000*100)/200000.e.firm is only 15%i.  . net profit. The operating cost and profitability of the business can be ascertained from the income statement establishing relationship between gross profits. the relationship between different items of financial statements is established. Establishing relationship between gross profit and sales or current assets and current liabilities etc. Financial statements are analyzed over period of years from the comparative financial statements of different years. comparisons are made and results obtained. The basis of this comparison may be : Comparison of financial statements of different years of same business units. gross profit net profit.As such analysis shows that the operational efficiency of the first firm is better than the second firm. efficiency and financial soundness of the business. 2. TYPES OF FINANCIAL ANALYSIS 1. Comparison of financial statements of a particular year of different business units.
We can judge the operational efficiency of the business by calculating profitability ratio. It should satisfy itself that its current resources are sufficient to meet its current liabilities. values of assets and liabilities can be compared and the future prospects of the business can be indicated. selling. therefore. match the amount of manufacturing. financial soundness and future prospects of the company. purchases. Assessing the growth potential of the business: The trend and dynamic analysis of the business provides us sufficient information indicating the growth potential of the business. We can calculate current and liquid ratios for comparing current assets and current liabilities to ascertain short term financial soundness. effective measures can be applied as remedial measures. We analyze the financial statements. distribution and financial expenses of the current year with corresponding expenses of the previous year and assess the managerial efficiency of the business. The result of the financial analysis may be studied and corrective steps can be taken. If cost of production is rising without corresponding increase in sales price. If the trend predicts gloomy picture. Judging the operational efficiency of the business: It is very significant that the company must know the operational efficiency of its management. necessary to analyze financial statements to measure the efficiency. if necessary. proprietary and fixed assets ratios. Indicating the trend of achievements: Financial statements of the previous years can be compared and the trend regarding various expenses. cost of goods sold. sales. efforts should be made to reduce cost of production. profitability. 2. These statements are prepared to suit the requirements of the proprietor. Measuring short and long term financial position: The business must know its financial soundness.PURPOSE AND ADVANTAGES OF FINANCIAL ANALYSIS: Financial statements are prepared at a certain point of time according to established conventions. Financial analysis serves the following purposes: 1. It is. 4. gross profit and net profit can be ascertained. Long term financial position can be measured by calculating debt equity. 3.  .
Intra . 2. The relationship of these items can be established with sales. comparison of financial statements is a tool. 4. net profit and the other expenses. whereas in case of intra firm comparison financial statements of the same enterprise for two or more years are compared. In case of improving profitability ratios. which expresses the changes in the different items of financial statement. 6. TOOLS OF FINANCIAL ANALYSIS: 1. In this way. so that weakness may be identified and remedial measures applied. Comparison helps us in detecting our weaknesses and applying corrective measures. liabilities and capital. Financial statements provide us information regarding the financial position of the business and the values of different assets. Comparative Financial Statements: Comparative study of financial statements as such is the comparison of the financial statements of the business with the previous year‟s financial statements and with the performance of other competitive enterprises.5.  . In case of inter-firm comparison financial statements of two or more firms are compared. 5.firm analysis presents the operational efficiency of the firm as compared to other firms. The values of these items are changing. Financial statements can be compared both inter-firm and intra-firm. Gross profit. the cause responsible for this performance should be reinforced. whereas inter. net profit. 6. Inter–firm and intra firm comparison of the performance: Analysis of statements can be made with the previous year‟s performance of the same firm and also with the performance of the other firms.firm analysis provides an opportunity to self appraisal. Measuring the profitability: Financial statement shows the gross profit. Comparative Statements Common Size Statements Trend Analysis Ratio Analysis Funds Flow Statement Cash Flow Statement 1. expenses and operating ratios may be calculated and the profitability of the business ascertained. 3.
Trend analysis is also named as horizontal analysis. Common Size Statements: Convenient comparison of the financial statements requires that the financial statements should be converted into common size statements. it also discovers the future prospects of the business in terms of profitability. Every item of income statements is expressed in terms of the percentage of the total sales. This relationship can be exposed as • Percentages • Fractions • Proportion of numbers Ratio analysis is defined as the systematic use of the ratio to interpret the financial statements so that the strengths and weaknesses of a firm. In other words ratio analysis is a study of relationship among the various financial factors in a business. Ratio reflects a quantitative relationship helps to form a quantitative judgment. In addition. Trend analysis is also termed as Intra-firm comparison. Every item of the statements is presented in the form of percentage of its important heading. In the same way every asset is expressed in terms of the percentage of total assets and every liability is expressed in terms of the percentage of total liability. An efficient and effective management tries to know the actual performance and also discovers future prospects of the business. Trend Analysis: The word trend means future possibilities. 4.2. because each accounting variable is placed horizontally.  . wherein financial statements of the same enterprise for two or more years are compared. Trend analysis acquaints us with the profitability and the short term and long term liquidity of the business. 3. as well as its historical performance and current financial condition can be determined. Ratio Analysis: The term “Ratio” refers to the numerical and quantitative relationship between two items or variables. operational efficiency and financial soundness of the enterprise.
It details the procedures necessary for obtaining the required information. To test the solvency position of the company. Secondary data analysis 2. and experimentation)  . interviews with industry experts. Step 3: Research Design Formulation A research design is a framework or blueprint for conducting the marketing research project. To analyze risk bearing capacity of the company. case studies and simulations. perhaps. 4. analytical models. observation. and provide the information needed for decision making. qualitative research and pragmatic considerations. the researcher should take into account the purpose of the study. Once the problem has been precisely defined. what information is needed. STAGES IN RESEARCH Step 1: Problem Definition The first step in any marketing research project is to define the problem. and how it will be used in decision making. the relevant background information. hypotheses. Problem definition involves discussion with the decision makers. To ascertain the financial position of TAYO ROLLS LIMITED. research questions. More formally. This process is guided by discussions with management and industry experts. such as focus groups. analysis of secondary data. It is also necessary to design a questionnaire and a sampling plan to select respondents for the study.BASIC OBJECTIVE OF THE STUDY 1. 2. analysis of secondary data. To determine the weak spots of the business. Step 2: Development of an Approach to the Problem Development of an approach to the problem includes formulating an objective or theoretical framework. some qualitative research. 3. The issue of how the data should be obtained from the respondents (for example. and its purpose is to design a study that will test the hypotheses of interest. In defining the problem. precisely defining the variables. formulating the research design involves the following steps: 1. Qualitative research 3. and designing appropriate scales to measure them are also a part of the research design. and. the research can be designed and conducted properly. Methods of collecting quantitative data (survey. determine possible answers to the research questions. Conducting exploratory research. and identifying characteristics or factors that can influence the research design. by conducting a survey or an experiment) must be addressed.
supervision. or through mail (traditional mail and mail panel surveys with prerecruited households). data collection. Verification ensures that the data from the original questionnaires have been accurately transcribed. as in the case of personal interviewing (in-home. Step 5: Data Preparation and Analysis Data preparation includes the editing. coding. Each questionnaire or observation form is inspected. while data analysis. Sampling process and sample size 8. from an office by telephone (telephone or computer-assisted telephone interviewing). On the other hand. transcription. 18 Number or letter codes are assigned to represent each response to each question in the questionnaire. where it is relatively easy to identify and approach the experts. Proper selection. gives meaning to the data that have been collected. Measurement and scaling procedures 6. Various techniques are used for analyzing data when there is a single measurement of each element or unit in the sample. mall intercept. each RCH variable is analyzed in isolation. if necessary. and verification of data. training. if there are several measurements of each element. an oral presentation should be made to management using tables. figures. For these reasons. and. or. and graphs to enhance clarity and impact. interviews with experts are more useful in conducting marketing research for industrial firms and for products of a technical nature. This method is also helpful in situations where little information is available from other sources. Definition of the information needed 5. multivariate techniques are used for analyzing data when there are two or more measurements on each element and the variables are analyzed simultaneously. and data analysis procedures adopted.4.  . In addition. describes the approach. or edited. or computer-assisted personal interviewing). Plan of data analysis Step 4: Field Work or Data Collection Data collection involves a field force or staff that operates either in the field. corrected. guided by the plan of data analysis. the research design. Questionnaire design 7. and evaluation of the field force help minimize datacollection errors. Step 6: Report Preparation and Presentation The entire project should be documented in a written report which addresses the specific research questions identified. and present the results and the major findings. or disks or input directly into the computer. The findings should be presented in a comprehensible format so that they can be readily used in the decision making process. as in the case of radically new products. The data from the questionnaires are transcribed or key-punched on to magnetic tape.
it provided the base to the project.tayorolls. The purpose is to provide an accurate snapshot of layout effect. RESEARCH INSTRUMENT The research instrument used in the project was based on the Annual Report of the company of 5 years (2006 to 2011) to collect the information. METHOD OF DATA COLLECTION Data are collected from the following:1.Companies website-www.Annual Reports.com  . 2. Descriptive research is more rigid than exploratory research and it helps to fulfill the objective as required. The secondary data formed background for the project. DATA COLLECTION TECHNIQUES:SOURCES OF DATA:SECONDARY DATA Secondary data collected from the Company‟s website.RESEARCH METHODOLOGY RESEARCH DESIGN FOLLOWED: Descriptive research is the research method used because descriptive studies embrace a large proportion of market research.
Profitability ratio of two firms may be the same. 4. Financial statements are prepared according to certain conventions at a point of time. There are different methods of providing depreciation. Misleading results in the absence of absolute data: results shown by financial analysis may be misleading in the absence of absolute data.LIMITATIONS OF FINANCIAL ANALYSIS: 1. Certain assets and liabilities are not disclosed. We cannot have the idea of the size of the business. Different meanings are given to a particular term. Ignoring qualitative aspects: Financial analysis does not measure the qualitative aspects of the business. so analysis based upon these statements cannot be said to be always reliable. In case of other firms increase of sales from Rs. 2. It is possible that assets may not have the same value. In other words. we can say that balance sheet cannot be said to have a complete accuracy. Sometimes material information is concealed. Financial statements are affected by window dressing: The management displays rosy picture of the enterprise through financial statements. stock may be overvalued and certain purchases may not be shown. Interest may be charged on different rates. It does not have standard. 3. Personal judgement plays an important role in determining the figures of the balance sheet. Financial statements suffer from these weaknesses. sales may be exaggerated. Balance sheet is prepared on historical record of the value of assets. in such cases analysis of financial statements will also be incorrect. 40000 to 80000 shows that sales have doubled. It completely ignores human resources. It does not show the skill. but magnitude of their businesses may be quite different. there is sufficient possibility of manipulation and the financial statements have to suffer. Absence of standard universally accepted terminology: Accounting is not exactly science. Financial statements sometimes contain false information. 20000000 to 4000000 also shows that sales have doubled but the size of the firm is quite different. It means that analysis of financial statements measures only the one sided performance of the business.  . universally accepted terminology. technical knowhow and the efficiency of its employees and managers. It is the quantitative measurement of the performance. Increase in sales from Rs. In this way. As a consequence financial analysis also proves to be defective. whereas the investors are concerned with the present and future of the company. Suffering from the limitations of financial statement: Financial statements suffer from variety of weaknesses. In order to show excellent profit.
Chapter – 3 Organizational Overview Organization’s Profile (a) Organisation’s Policy (b) Plant Facilities (c) Management of Business Ethics (d) Awards & Recognition (e) Business Excellence (f) Quality Assurance (g) Research & Development (h) Organization’s Ideology Product Profile  .
Pacific Rim. Europe.Yodogawa limited) was promoted in 1968 by Tata Steel with Japanese Technology. Middle East. The rolls vary from 30 kgs. it makes sure that along with quality rolls. in diameter. TAYO enjoys a wide customer base in India as well as in overseas countries like U. strips. also. Equipped with Japanese. blooms. billets. TAYO has the necessary expertise in roll technology to advise the customers about the proper type of rolls to be used to achieve maximum efficiency called for in each individual application. ACCREDTED WITH “ISO 9001:2000” certification. It is total package that TAYO offers to its customers. tubes. etc. over the years and has further acquired a state-of-art technology through technical collaboration with EISENWERK SALZAU-WERFEN (ESW). pioneers in steel industry in India. TAYO rolls. South East Asia. TAYO‟s plant at Gamharia. TAYO is not there just to sell a roll. Regular checks are maintained to get a complete feedback on roll performance and co-ordination meetings are held with shop floor personnel to sort out problems that may arise. TAYO takes every care to meet the delivery schedules and other stipulations of all customers. channels. CIS Countries. Africa. TAYO started operations in 1968 with an installed capacity of 7500 tonnes and has been continuously modernizing and upgrading its facilities to meet market demands. rods.A. TAYO is continuously implementing TQM and other related activities to improve customer satisfaction. TAYO has equipment. Austria in 1992. find wide application in paper and rubber industries. a modern foundry and a sophisticated Machine Shop.ORGANISATIONAL OVERVIEW TAYO ROLLS LIMITED -A TATA enterprise with state-of -the -art technology TAYO ROLLS LIMITED (Formerly Tata. plates. TAYO rolls have been designed to roll ingots. to 1350 mm. besides neighbouring countries. the  .S. West of Jamshedpur is spread over an area of 50 acres and comprises suitable Melting furnaces. angels. and customers get efficient technical support of a reputed manufacturer. To 30 tonnes in weight and from 250 mm. Korea. European and indigenously developed technologies. In the non-metallurgical area. 16 kms. slabs. experience and capability to undertake manufacture of custom designed products to meet the most demanding mill requirements. TAYO‟s technical advice on sound mill practices is backed by the experience of Tata Steel. sheets and various other flat and section products. TAYO has established itself as a quality roll manufacturer. big or small. TAYO has pace with the changing needs of industry by developing rolls meet the exactly demand for various applications. In 2003.
developing and catering to the customer‟s requirements well ahead of time. Quality Objectives Guided by the Quality Policy of the Company. Strive continuously for maintaining and improving Product Quality in order to upload our identity as a global recognized producer. TAYO has. Quality Policy We at TAYO are committed to produce and deliver products and services that exceed our customers‟ expectations. and the leading forged roll manufacturer in the world. In 1999.installed capacity was 12500 tonnes and to meet global challenges. semi finished forged roll manufactured in USA. TAYO also entered the forged roll business in India for which a know-how agreement was signed with Union Electric Steel Corporation. TAYO has also diversified into area of Special Casting for Thermal Power Plants. are finished machine at TAYO for sale in India. Constantly monitor product performance and the level of Customer Satisfaction. POLICIES OF TAYO ROLLS: 1. A mini blast furnace is also being installed to have an in house control on the quality of metallic‟s required to produce high quality rolls. USA. our Objectives at TAYO shall be to : Produce and deliver products as per customers' expectations ensuring Quality and Reliability at all times. ergonomics and environmental processes. As per this agreement. health. thus.  . Adequate attention is being paid to acquire state-of-the-art equipments and facilities to achieve quality standards comparable to the best in the world. TAYO has dedicated teams of employees to monitor and improve safety. located all around the country. Enhance the knowledge and skill of employees for effective implementation of Quality Management System. become a onestop-shop for cast and forged rolls. modernize and increase the capacity to 17000 tonnes within the next three years. plans are afoot to further upgrade. The company has always been pro-active in anticipating. We dedicate ourselves to aim for accelerated growth and strive to achieve Total Quality through effective implementation of the Quality Management System and delivering best values to our customers.
2. Environment Policy
TAYO is committed to address the impact of its processes and products on the environment and society through:
A conscious goal-setting and review mechanism by senior leadership in matters of environmental impact. Total compliance to regulatory and legal requirements Management of process-wastes to ensure pollution-free surroundings. Conservation of nature and natural resources Development of concern for environment among all employees.
3. Safety Policy
TAYO believes that Safety and Health of all employees is essential for the success of Company's goals. TAYO therefore, is committed to provide safe and healthy work environment to all its employees. It shall be the endeavor of the Company to identify, control, and eliminate through continuous awareness and training programs the hazardous conditions and situations posing a potential risk/danger to employees and loss to plant, equipment and products. It shall be the responsibility of every employee:
To observe safety rules and to make use of safety appliances issued to him/her. To follow safe working practices and ensure that others do the same in him/her area of responsibility. Not to endanger him/her, other employees, plant, equipment and products.
TAYO has the best combination of melting Furnaces used for manufacturing of different types of metal grades for various types of rolls. The 25- tonne Electric Arc Furnace is used for manufacture of high strength alloy iron, high quality SG iron and alloy steel rolls. The 8tonne & 16- tonne mains frequency Induction Furnaces are used for small and medium size cast iron, steel and SG rolls. These furnaces, also, provide highly alloyed shell metal for static as well as spun cast rolls. The vide variety of furnaces offer full flexibility in production of rolls of different sizes and weights. Melting is carried out using carefully segregated Scrap, Pig Iron and Ferro-alloys to achieve the desired composition. A modern analytical laboratory using a computerized emission spectrometer backs the melting unit and modern equipment for analyzing important elements of the melts has been installed to keep pace with the changing needs of the customers.
TAYO has the best combination of melting furnaces. The Electric Arc Furnace is used for manufacture of high strength alloy Iron, high quality SG and Steel Rolls. The mains frequency induction furnaces are used for small and medium sized cast iron, steel and SG Rolls. These furnaces also provide highly alloyed shell metal in indefinite chill quality rolls which are cast through static and centrifugal route. Shell metal for high chrome iron and Steel rolls are also processed in these furnaces. The wide variety of furnaces offers full flexibility in production of rolls of different sizes and weights. The melting is carried out using carefully segregated scrap, pig Iron and ferro alloys to achieve the desired composition. The melting unit is backed by a modern analytical laboratory using a computerized vacuum spark emission spectrometer and other automatic analysis for different elements.
TAYO has a well-equipped Foundry with facilities of Static Casting, Spin Casting and Heat Treatment of rolls.
There are modern facilities for preparing moulds to exacting standards to produce rolls with maximum yields. All rolls are bottom poured with tangential ingot to ensure maximum cleanliness of the roll-body surface. All nodular iron rolls are poured with special ladle inoculation followed by mould inoculation to ensure high strength requirements. HotTopping equipment is used for all Steel and Steel Base Rolls to ensure internal soundness, appropriate grain size and structure, making the rolls absolutely free from cavities and porosities.
State-of-the-art horizontal spin casting machine is used to produce Work Rolls for Flat Rolling. Rolls ranging from 630 mm. to 1085 mm. in diameter are being produced through this machine with strict control of rotational speed, cooling and casting time. The shell sleeve is tilted to vertical position and core metal is poured from top with precise thermal synchronization to achieve a perfect bond between shell and core. High core strength is achieved through special mould inoculation.
MANAGEMENT OF BUSINESS ETHICS (MBE)
Tayo has adopted Tata Code of Conduct in its letter and spirit. All employees of the Company have signed their commitment to the compliance of the code. All stakeholders of the Company are made aware of the relevant clauses of the code. Process audits are conducted regularly to ensure that no violations take place. Procedures and machinery are in place for reporting, investigating and removing concerns relating to possible violations of the code. Company regularly participates in MBE Assurance survey conducted by Tata Quality Management Services (TQMS.)
Tayo today is well on path of excellence in all its activities. "Working-together" has been the guiding philosophy of the Company to generate active participation of all its employees. QUALITY ASSURANCE The metallographic and mechanical tests keep a constant the entire operation from selection of raw materials to dispatch of finished products goes through a series of quality control checks conducted by a team of metallurgists. where our teams have performed well and have won many prizes and recognitions. Conducted by CII(ER) Golden Peacock Innovation Award.Conducted by CII(ER) BUSINESS EXCELLENCE Tayo Rolls limited is a signatory to "Brand Equity and Business Promotion" (BEBP) Scheme of Tata Sons Limited. The Company has been regularly participating in group level and regional level Quality Circle competitions.AWARDS & RECOGNITION Year 2002 2002 2002-03 2004 2004 2005-06 Awards National Quality Award in the Secondary Steel Sector by Indian Institute of Metals. First Prize at National Quality Award-2004-IIM. Indian Oil .Trophy award. Analyses the bath samples to ensure correct chemistry of the final product. Eleven Joint Bodies function under the umbrella of Joint Works Council. The Company has adopted Tata Business Excellence Module (TBEM) as a vehicle for excellence in business. Organizational performance is discussed and communicated through various means of communication. The Rolls are tested for surface hardness by the conventional Scleroscopic as well as Equotip hardness testers along with Rockwell hardness tester to  . The Company has undergone five cycles of Internal Assessment and four cycles of External Assessments conducted by Tata Quality Management Services (TQMS). Secured First Position in Fuel Conservation Contest. The Company has a pool of Internal and External Assessors who are used as resource persons by the Group. Many officers and supervisors have been trained by TQMS on Business Excellence Model. Company has also provided Senior Assessor for conducting assessment for CII EXIM BANK Award in 2003. Secured First Position in HRD . These joint forums have equal representation from management and workers. Tayo has regularly been participating in Business Excellence Assurance Survey being conducted by TQMS. CII Eastern Region Productivity Award.
Ultrasonic testing is carried out to ensure the overall internal soundness and structure of the roll as well as the quality of bond between the shell core of cast roll. The Certificate is valid until January. programmable heat treatment furnace. of India. 1999. emission spectrometers. ferritescope. In Addition. TAYO has been awarded ISO-9002 Certificate of Approval by Indian Register Quality System in February. In recognition of the Company having a well established Quality Management System Functioning at all levels which helps the Company in achieving improvements in Quality. Ministry of Science and Technology provides the facility for continued research on development of new grades of rolls and special castings. However. and high resolution microscope with image analyzer.conform to specifications are desired by the customers check on the desired structural constituents strength and homogeneity of the product. Research & Development work is basically conducted at the laboratory equipped with pilot induction Furnace. mechanical testing machine and different types of hardness testing equipment. TAYO has access to outside research laboratories for special investigations wherever required.  . Equotip Hardness Testing Hardness Measurement RESEARCH & DEVELOPMENT A well equipped R&D laboratory recognized by Govt. TAYO will retain the certificate in the years beyond. 1996.
ORGANISATION’S IDEOLOGY VISION Five Fold in Five Years MISSION "TAYO aspires to be a Rs. People focus. through : Accelerated growth with global mindset. We shall upload the TATA values and be a good corporate citizen" CORE VALUES Honesty & Integrity Credibility Commitment Agility Team Spirit Excellence  .500 crores plus turnover company by 2010. Best values to our customers. Strategic alliances/diversification. Low cost quality product and services.
Jaydeb Burman Mr. Non Executive Not Independent . SK Bhattacharyya Mr. RK Choudhary Mr. Non Executive Independent. Non Executive Promoter. AK Srivastava Mr. Osamu Nishimura Promoter. Dipak Banerjee Prof. AK Das Mr. Non Executive Promoter. Non Executive Independent. Non Executive Independent. Not Independent .BOARD OF DIRECTORS AND MANAGEMENT TEAM Board of Directors Mr. Non Executive Management Team Mr. Anand Sen . 2. 3. Not Independent. Ranjan Das Mr. 4. Om Narayan Mr. Forged Rolls Pig Iron Cast Rolls Ingot  . Not Independent. Chairman Mr. Abhijit Mitra Mr. SN Menon Mr. V Satyamohan Mr Amit Gupta Mr BK Sinha Mr. V Mohan Mr. Om Narayan Mr. VSN Murty Mr. Suresh Padnabhan Mr. KH Gandhi Mr. NG Murthy Mr. Executive Independent. SK Chattoraj Managing Director Vice President ( Operations ) Vice President (Marketing) DGM (Maintenance Services and Forge Shop) General Manager(Management Services & procurement) General Manager(Finance & Accounts) General Manager(Business Executive) General Manager(Business Development) Chief ( F & A ) Chief ( HR & IR ) Chief ( Production-MBF) Chief ( Production) Chief ( Marketing) Chief ( Marketing) PRODUCTS OF TAYO 1.
3.000 tonnes per annum. a frontrunner in the steel industry in India. Tayo has put up manufacturing facility for Forged Hardened Roll and Engineering Forgings consisting of Ingot Making. usually metal. Tayo Rolls Limited is a leading Cast Iron and Steel Roll manufacturer in India. Ingot: An ingot is a material. USA. Forged Roll Pig Iron Cast Roll Ingot  . Pig Iron: Apart of Rolls & Special Castings. Tayo rolls have been custom designed to roll flat as well as long products.1. TAYO Rolls commenced Commercial Production in 1st Feb 2005 with a capacity of 34. With our excellent machining capability we can finish the Forged Rolls in a wide range of Sizes and Qualities to cater to the demand of both Ferrous and Non Ferrous Industries for Hot as well as Cold applications. that is cast into a shape suitable for further processing. The company presently manufactures 7 different Pig Iron grades. TAYO Rolls Limited backward integrated its process to manufacture pig iron and is engaged in the business of selling of foundry grades pig iron. particularly when cast by mold based methods. for sourcing the Forged Hardened Rough Turned Rolls and finish machining these Rolls in our plant at Jamshedpur. Non-metallic and semiconductor materials prepared in bulk form may also be referred to as ingots. Cast Rolls: Tayo Rolls has the capability and the capacity to meet the most demanding mill requirements. Tayo‟s Technical advice on sound mill practices is backed by the experience of Tata Steel. Now. 2. This value addition of Forged Rolls has enabled TAYO to provide a single window for both Cast and Forged Rolls to various customers in India. Forged Rolls: TAYO has an agreement with Union Electric Steel Corporation (UES). Forging and Heat Treatment including Induction Hardening in the existing premises 4.
Chapter – 4 FINANCIAL STATEMENT ANALYSIS & INTERPRETATION  .
79) 484. i.64 14166. COMPARATIVE INCOME STATEMENT is a method of analysis of the company‟s operating activities through comparing the Trading and P/L accounts of two consecutive years.48 37.99 (504.59) 1740.30) (1153.44 (370.83 3.98 163.30) INCOME STATEMENT: It comprises of Trading and P/L accounts. It is wholly concerned with the items of Nominal Account.81 (5572.01) (1891.33 (980.79 37.13) 6332.66 (7683.31) 12709.85 (2111.91 37.79 13690.85 476.96 163.01) CHANGE IN PERCENTAGE (%) 0.  .68 (1153.96 Net Sales Less: Cost OF Goods Sold Gross Income/Profit Less: Operating Expenses Operating Net Income/ Profit Add: Other Income Less: Interest Paid Profit Before Tax Less: Income Tax Profit After Tax(PAT) 12815.73 447. expenses and losses and incomes and gains.77 (1351.COMPARATIVE INCOME STATEMENT PARTICULARS CURRENT YEAR (2010-2011) PREVIOUS YEAR (2009-2010) CHANGE IN ABSOLUTE FIGURES 105.27) (1891.31) (3044.54) 4591. It depicts the level and direction of changes in the absolute figures of the components of the income statements as well as the percentage of changes.89 16.44) 68.74 951.e.41 (3044.59 52.35) 415.
63 19218.13 5540.15 3009.43 288.18 16.27 85.59) 319.14 11482.02 7922.56 3255.COMPARATIVE BALANCE SHEET PARTICULARS CURRENT YEAR (2010-2011) PREVIOUS YEAR (2009-2010) CHANGE IN ABSOLUTE FIGURES CHANGE IN PERCENTAGE (%) 143.80 12.68 11746.43 11.71 (13534.86 31.77 4034.63 364.05 14183.29 26983.75 (1266.58 2239.79 331.94 2486.08 16.68 4573.63 16.74 2689.43 8226.21 8785.62 - 3775.20 20.25 23236.74 927.68 19029.49 1777.09) 2428.23 26983. LOANS &ADVANCES: Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Total Current Assets(C) PROFIT & LOSS A/C (D) TOTAL ASSETS (A+B+C+D) LIABILITIES and CAPITAL SHAREHOLDERS’ FUNDS: Share Capital Reserve & Surplus LOAN FUNDS: Secured Loans Unsecured Loans TOTAL FUNDS EMPLOYED/ LONG TERM LIABILITIES(A) CURRENT LIABILITIES & PROVISIONS: Current Liabilities Provisions TOTAL CURRENT LIABILITIES(B) TOTAL LIABILITIES(A+B) 28004.93 242.74 866.44 8321.77 5724.76 - FIXED ASSESTS: Gross Block Less: Depreciation Net Block Capital Work In Progress Total Fixed Assets(A) Total Investment(B) CURRENT ASSETS.89 9.37 1026.13 6806.73 274.63) 2437.98 (259.70 7162.24 3414.95 1026.87 15773.68 31557.79 15.53 1437.33 17.95  .14 16521.96 1726.88 6.07 15962.79 490.84 32.59 21458.78 559.69 4.78 1777.01 19821.79 6.51 367.74 1159.40 31557.17 4573.98 870.47 1140.62 18.17 32.01 2244.60 20.55 32.22 6594.53 8289.
They help in assessing and reviewing the operational efficiency. level and direction of changes in the components of net income and assets and liabilities respectively. show the amount. It shows the Assets that the company owns and the Liabilities that it owes as on date.POSITION STATEMENT: It comprises of the BALANCE SHEET of the company which deals with the items of REAL and PERSONNEL ACCOUNTS. It reflects the actual position of the Assets and Liabilities of the company. COMPARATIVE POSITION STATEMENT is a method of analysis of the company‟s financial position through comparing the Balance Sheets of two consecutive years. It depicts the level and direction of changes in the absolute figures of the components of the Balance sheets as well as the percentage of changes. ANALYSIS: The comparative analysis of THE INCOME STATEMENT and THE POSITION STATEMENT. deciding future course of action and formulating effective planning.  .
whereas GP is more. The true efficiency or profitability of the business cannot be understood by GP because profitability may be lesser.94 RATIOS 15 10 5 0 2006-07 -5 -10 -15 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: The GPR of the company is decreasing constantly from 2006-07 to 201011. Effort should be made to sell at competitive price. Increase in GPR will mean reduction in cost of production or direct expenses or sale at reasonably at good price and decrease in the ratio will mean increased cost of production or sales at lesser price. because of increased cost of production and sales at lower price.RATIO ANALYSIS PROFITABILITY RATIOS 1. GROSS PROFIT RATIO: GROSS PROFIT RATIO = (GROSS PROFIT * 100) / NET SALES SIGNIFICANCE: Gross Profit Ratio reveals profit earning capacity of the business with reference to its sale. Sales at lower rate will reduce margin of profit. There is no ideal standard measure for GPR but it should be sufficient to cover the selling expenses of the firm.02 2009-10 -2. The GPR also works as a guide to the management in determining its selling and distribution expenses.31 2007-08 9.44 2010-11 -11.  .34 2008-09 -6. Years Ratios 2006-07 12.
distribution and financial expenses. High net profit ratio will help the firm service in the fall of income from services.  .15 2009-10 -9.07 2010-11 -23. The decrement resulted at decrease in 2010-11 ratio compared to the year 2009-10.2. NP. The net profit ratio is the overall measure of the firm‟s ability to turn each rupee of income from services in net profit.75 RATIOS 10 5 0 -5 -10 -15 -20 -25 -30 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: The net profit is decreased because the income from sales has decreased. Net profit or net income is the GP less selling. If the net margin is inadequate the firm will fail to achieve return on shareholder‟s funds. Net Profit = Gross Profit +Operating & Non-Operating Income (-)Operating & Non-Operating Expenses Years Ratios 2006-07 8. rise in cost of production or declining demand. for calculating this ratio is picked up from the P/L A/c. NET PROFIT RATIO: NET PROFIT RATIO = (NET PROFIT * 100) / NET SALES SIGNIFICANCE: This ratio establishes relationship between net profit and net sales.67 2008-09 -11.17 2007-08 4.
the ratio is decreased compared to the previous year.18 2009-10 -3.60 2007-08 6.48 RATIOS 15 10 5 0 2006-07 -5 -10 -15 -20 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: The operating profit ratio has decreased compared to last few years. Depending on the concept.  .3.57 2008-09 -7. it will decide. So. Years Ratios 2006-07 9. OPERATING NET PROFIT RATIO: Operating Net Profit Ratio = (Operating Net Profit *100)/Net Sales Operating Net Profit=Net Profit (-)Non Operating Income + Non Operating Expenses SIGNIFICANCE: The operating profit ratio is used to measure the relationship between net profits and sales of a firm. The earnings are decreased due to the decrease in the operating & non-operating income.35 2010-11 -14.
36 RATIOS 40 30 20 10 0 -10 -20 -30 -40 -50 -60 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: Ratio has been reduced significantly as a result of issue of new equity shares and decrease in Net Profit. NET PROFIT TO NET WORTH RATIO Net Profit To Net Worth Ratio= (Net Profit After Interest But Before Tax*100)/Net Worth Net Worth=Equity & Preference Share Capital + Reserve & surplus + Accumulated Profit SIGNIFICANCE: This ratio indicates the relationship between NP and Net Worth. Years Ratios 2006-07 33.72 2010-11 -46.  .47 2009-10 -14. The term Net Worth here means Capital or Shareholders funds.61 2008-09 -20.4.05 2007-08 23.
There was a slight improvement in ratio of the year 2009-2010 as compare to 20082009 due to decrease in comparative loss.2 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: Ratios are declining year after year.6 0. So the company should apply a corrective check on it. hence it is a sign of danger for the company.  .3 0. whether fixed assets are being properly used or not. as the application of funds towards fixed assets is more than the sources of funds. if the ratio is higher.1 0 2006-07 -0.2 0.5 0. NET PROFIT TO FIXED ASSET RATIO: Net Profit To Fixed Asset Ratio = Net profit Before Interest And Tax / Net Fixed Assets SIGNIFICANCE: The ratio shows relationship of Net Profit to Fixed Assets and also indicates.18 2008-09 -0.4 0.1 -0. It will be in the favour of the business.49 2007-08 0.14 RATIOS 0. Years Ratios 2006-07 0.13 2009-10 -0.06 2010-11 -0.5.
80 2007-08 11. The ratio judges the performance of the business. Years Ratios 2006-07 21. the operational efficiency and borrowing policy of the enterprise.6.42 2009-10 -5.53 2008-09 -10. In order to enhance the operational efficiency. Interest And Preference Dividend * 100) / Capital Employed SIGNIFICANCE: Return On Investment Ratio measures. the company should go for a proper project analysis of any project before undergoing through it and invest the capital in the right direction to avail a fruitful result.82 2010-11 -13. It can be used for comparing the performance of even dissimilar business or different departments of the same business.  . It shows the earning capacity of the net assets of the business. RETURN ON INVESTMENT OR RETURN ON CAPITAL EMPLOYED: Return on Investment = (Net Profit Before Tax. It indicates that the capital employed of the company is being inefficiently utilized.10 RATIOS 25 20 15 10 5 0 2006-07 -5 -10 -15 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: The performance of the company is declining gradually year after year which has an adverse effect on the company‟s operational efficiency. It also shows how effectively the capital employed in the business is used.
Higher ratio is always in the interest of the enterprise. Years Ratios 2006-07 25. It measures the operational efficiency of management. This ratio helps in the comparison of performance and decision making regarding declaration of dividend and creation of reserve.51 2007-08 13. No profit no dividend.42 2008-09 -18. because it proves efficiency of the management. Higher the ratio more the dividend a company can declare which depicts the positive picture of the company in the eyes of the shareholders and vice-versa.36 RATIOS 30 20 10 0 2006-07 -10 -20 -30 -40 -50 2007-08 2008-09 2009-10 2010-11 RATIOS INFEREENCE: Performance of the company is declining gradually year after year which has an adverse effect on the company‟s operational efficiency.62 2009-10 -14.72 2010-11 -46.  .7) RETURN ON EQUITY RATIO: Return On Equity Ratio = (Net Income Before Tax. Interest And Preference Dividend * 100) / Equity Shareholders Funds SIGNIFICANCE: This ratio shows how effectively Equity Shareholders Funds are utilized.
 .68 2009-10 -11.41 2007-08 11.24 2010-11 -29. Equity shareholders are virtually the owner of the company.8) EARNING PER SHARE RATIO (E. Years Ratios 2006-07 19.60 2008-09 -23.67 RATIOS 30 20 10 0 2006-07 -10 -20 -30 -40 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: Return per share is gradually reducing year after year due to occurrence of yearly losses and issuance of additional shares.P. Of Equity Shares SIGNIFICANCE: The ratio measures the return per share receivable by equity or ordinary shareholders.S) : Earnings Per Share Ratio = (Net Profit – Preference Dividend) / No. Dividend payable to them is ascertained after deducting operating and non-operating expenses and even the interest payable to debenture holders and dividend to preference shareholders.
It entirely depends on the efficiency of the company that how much it is capable of rotating (investing and getting return) its capital. but if.5 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: There is no any given standard of the Total Capital Turnover Ratio.then it is not acceptable and have an adverse effect on its existence.  .5 1 0.67 2007-08 2. in case of a good ongoing company like TAYO ROLLS this ratio is declining year after year .47 2008-09 0. Excessive Capital turnover ratio proves over trading which is not good.55 RATIOS 3 2. Higher capital turnover ratio is always in the interest of the enterprise.93 2009-10 0. Hence.5 2 1. the company should try to maintain its Total Capital Turnover Ratio at least for the level of Break Even Point as per its capabilities.TURNOVER OR ACTIVITY RATIOS 1) TOTAL CAPITAL TURNOVER RATIO: Total Capital Turnover Ratio = Net Sales / Capital Employed SIGNIFICANCE: It shows how many times capital is turned over into sales.64 2010-11 0. It reflects the efficiency in the utilization of capital. Years Ratios 2006-07 2.
Both the situations of overtrading and under trading shows the weakness of the enterprise.2) WORKING CAPITAL TURNOVER RATIO: Working Capital Turnover Ratio = Net Sales / Working Capital SIGNIFICANCE: This ratio is very significant for non-manufacturing concerns where working capital is more than the fixed assets.30 RATIOS 50 0 -50 -100 -150 -200 -250 -300 -350 -400 -450 RATIOS 2006-07 2007-08 2008-09 2009-10 2010-11 INFERENCE: This ratio is basically concerned with non-manufacturing enterprises whereas TAYO ROLLS Ltd.71 2008-09 5. is a core manufacturing unit. Years Ratios 2006-07 6.  .72 2010-11 -405. this ratio does not carry that much of importance in case of TAYO ROLLS Ltd.27 2007-08 7. Excessive ratio shows overtrading and lower ratios under trading.67 2009-10 16. It reflects the efficiency in the utilization of working capital. Hence. This ratio must be normal.
Here the company is utilizing 0. where fixed assets employed are more than working capital.  . This ratio is very significant for manufacturing enterprises. Which indicates. how many times the fixed assets is utilized to achieve the sales of the company. The company should try to increase the production and this will increase the sales of the company and ultimately the fixed assets turnover ratio will increase. The effective utilization of Fixed Assets will result in increased production and reduced cost.3) FIXED ASSETS TURNOVER RATIO: Fixed Assets Turnover Ratio = Net Sales or Cost of Sales / Net Fixed Assets SIGNIFICANCE: Fixed assets are used in the business for producing goods to be sold.59 RATIOS 7 6 5 4 3 2 1 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: These ratios establish a relation with the fixed assets and sales of the company.84 2008-09 1.59 times of its fixed assets to achieve the sales of the company.01 2007-08 3. Years Ratios 2006-07 6. It also ensures whether investment in the assets have been judicious or not.15 2009-10 0.66 2010-11 0. Higher ratio indicates better performance.
05 2009-10 3.63 times.12 116.84 95. the better the condition of the company as per its performance and return. Which provide us the information about the velocity of stock during the year.57 65. Years Ratios (in times) Ratios (in days) 2006-07 - 2007-08 5. the high ratio indicates a good position of the company. High ratio is always desirable by the company.98 2010-11 3. in terms of days inventory turnover ratio is approximately of 100 to 101 days.55 140 120 100 80 RATIOS(in times) 60 40 20 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS(in days) INFERRENCE: The Company‟s inventory turnover ratio is 3.52 2008-09 3.4) INVENTORY TURNOVER RATIO INVENTORY TURNOVER RATIO =Cost of goods sold / Average Inventory (in times) Inventory Turnover Ratio = 365 days / 1n times (in days) SIGNIFICANCE: This ratio indicates the relation between the inventory and sales of the company. The lesser the number of days involve in completing one cycle .  . which means the movement of stock is approximately 4 times in a year. the number of days are increasing and number of times of turnover are decreasing is not a good sign for the company. Here. Moreover.63 100.
LIQUIDITY RATIOS 1) CURRENT RATIO: Current Ratio = Current Assets / Current Liabilities SIGNIFICANCE: This ratio indicates the short term soundness of the company.5:1.6 0. Years Ratios 2006-07 1.11 2010-11 0.  .99 of current assets.45 2007-08 1.5:1. The Current ratio reveals the firm‟s ability to meet its current liabilities out of current source of fund.99:1.4 1. which means that for every Re.8 0.99 RATIOS 1.48 2009-10 1.2 1 0. 0. which is not in satisfactory position so the company should try to increase the current ratio to at least 1.1 of current liabilities.4 0.39 2008-09 1.2 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: The Company is having current ratio of 0. the company has Re. but in practically the standard ratio is assumed to be 1. This ratio is analyzed to test the solvency position of the company. The standard ratio is 2: 1.6 1.
This ratio is also used to know the solvency of the company.35. The standard ratio is 1:1 but in practically it is accepted to be 0.54 2010-11 0.1 of CL the company can pay immediately Re.69 2009-10 0.5 0.0.8:1. Which means that for every Re.8 0.2) LIQUID RATIO OR ACID TEST RATIO: Liquid Ratio = Liquid Assets / Current Liabilities Or Acid Test Ratio = Current assets – Inventories /Current liabilities .6 0.70 2008-09 0.Bank O/D SIGNIFICANCE: This ratio also known as Acid test ratio or quick assets ratio.9 0.7 0. Years Ratios 2006-07 0.2 0.  .87 2007-08 0.3 0. This ratio reveals the actual financial ability of the company to pay off its immediate impending liabilities.54 RATIOS 1 0.35:1 quick ratio which is not satisfactory.1 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: The Company is having 0.4 0.
which means that for every Re 1 of the Proprietors‟ fund.It also shows the efficiency of the management in financial planning.23 RATIOS 2.  . Years Ratios 2006-07 0.34 2008-09 0. it. The debt equity ratio is 2.19 2010-11 2.5 2 1.5 0 2006-07 2007-08 2008-09 2009-10 2010-11 INFERENCE: This ratio reveals the relation between the long term debt and Proprietors‟ fund of the concern.23.2.68 2007-08 0.5 RATIOS 1 0. The ratio establishes relationship between long term loans and owner‟s funds . the long term debt stands to Rs.91 2009-10 1.23.SOLVENCY RATIOS 1) DEBT EQUITY RATIO: Debt Equity Ratio = Long Term Loans / Shareholders funds SIGNIFICANCE: This ratio is calculated to judge the long term financial policy of the business.
 .5 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: This ratio reveals the relation between the long term as well as short term debt and Proprietors‟ fund of the concern.5 3 2. The Total debt ratio is 3.3. It consists of both current and non-current creditors liabilities.26 2007-08 1. Equity means both long and short term outsider‟s funds.57 2009-10 2.49 RATIOS 4 3.5 1 0.80 2008-09 1. Years Ratios 2006-07 2. which means that for every Re 1 of the Proprietors‟ fund.10 2010-11 3.49.5 2 1.2) TOTAL DEBTS RATIO: Total Debts Ratio = External Equity / Internal Equity External Equity = Long term loans + Current liabilities SIGNIFICANCE: This ratio shows the relationship between external and internal equity.49. the long term and short term debt stands to Rs.
71 2007-08 12. an enterprise is required to be capable enough to meet its total debt and expenses out of its total assets and profit and for this purpose the latter should be 6 or 7 times of the former.e.3) INTEREST COVERAGE OR DEBT SERVICE RATIO: Interest Coverage Or Debt Service Ratio = Net Profit Before Interest And Income Tax / Fixed Interest Charges SIGNIFICANCE: The ratio ascertains whether the company is capable of meeting interest on the loans easily out of profits or not. Interest payable on debentures and other loans. Here.36 RATIOS 20 15 10 5 0 2006-07 -5 -10 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: In order to avail the solvency position. whether the company earns profit or suffers loss. Hence.78 2009-10 -2. the business will have to make the payment of interest.17 2010-11 -4. the company should work on its planning to achieve its solvency position.. Years Ratios 2006-07 16. in this case the ratio is not only less than 6 or 7 times but it is also negative which is not desirable situation for the Company‟s solvency is.81 2008-09 -4. The net income of the company should be ideally 6 or 7 times of the fixed interest charges.  . where rate of interest is specified is the fixed charges i.
49 2010-11 0.1 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: To be at a solvent position a company‟s Fixed Assets Ratio should be 1. Years Ratios 2006-07 0.5 0.57 2009-10 0. which in case of the company is below 1. i.29 2008-09 0. 0.4) FIXED ASSETS RATIO: Fixed Assets Ratio = Long Term Loan / Net Fixed Assets SIGNIFICANCE: The ratio indicates the long term financial soundness of the business.8 0.6 0. which predicts that company has been financing the purchases of its fixed assets out of its working capital which is a wrong policy. The ideal ratio should be more than one.  .68 RATIOS 1 0.9 0.4 0.2 0.e.3 0.68. In case it is lesser than one it will mean that the business has been financing the purchases of fixed assets out of working capital which is a wrong policy. whether investments have been properly made or not. It also assesses.91 2007-08 0.7 0.
This ratio indicates the relationship between total outside liabilities and total assets of the business.7 0. It should be at least 1or less.4 0.5 0.21 2007-08 0.5) SOLVENCY RATIO: Solvency Ratio = Total Outside Liability / Total Assets SIGNIFICANCE: Solvency is a state. the ratio is below 1.2 0.59 2008-09 0.66 2010-11 0.1 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: Here. where the company is supposed to be financially sound and capable of meeting its liability out of its assets.74 RATIOS 0.8 0.55 2009-10 0.3 0. which is a positive situation for the company‟s solvency.  . Years Ratios 2006-07 0.6 0.
 .6) RESERVE TO CAPITAL RATIO: Reserve to Capital Ratio = Reserve / Capital SIGNIFICANCE: This ratio indicates the relationship between reserves and capital.51 2007-08 0.1 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: Here.5 0.2 0. More reserves show financial soundness of the firm. if any out of these reserves.23 RATIOS 0.3 0. because it will be able to meet future losses. Years Ratios 2006-07 0.49 2008-09 0.34 2010-11 0. Reserve to Capital Ratio is less than 1 which is having a negative impact in the solvency of the company. It should be 1 or more.45 2009-10 0.6 0.4 0.
25 0.05 0 2006-07 2007-08 2008-09 2009-10 2010-11 INFERENCE: Here.22 2007-08 0. Years Ratios 2006-07 0.12 2009-10 0.15 2008-09 0.7) CAPITAL GEARING RATIO: Capital Gearing Ratio = Equity Capital / Preference Share Capital + Debentures + Loans SIGNIFICANCE: This ratio makes an analysis of the capital structure of the firm.1 0. which is an important matter of concern for the prosperous future of the company. The firm is said to be more geared.08 2010-11 0.15 RATIOS 0. it implies that internal or proprietor‟s fund is less than the external or the outsider‟s fund. if equity capital is more than the debentures and preference share capital.06 RATIOS 0.  . the equity capital is less than the debentures and preference share capital.2 0.
31 2008-09 0.21 RATIOS 0. This shows that how much proprietary fund is engaged in the business while financing the total assets of the company. because they know the share of proprietor‟s funds in the total assets and satisfy how far their loan is secured. Here the company has engaged 21% of the proprietary fund for financing its assets. Years Ratios 2006-07 0. This ratio shows the general financial position of the company also.25 0.38 2009-10 0.35 0.3 0.1 0.29 2010-11 0. Lesser than 50% is the sign of risk for creditors. the more safety will be to the creditors. This will in turn increase the share of profit of the company.2 0.  .8) PROPRIETARY RATIO: Proprietary Ratio = Proprietors Funds / Total Assets SIGNIFICANCE: This ratio is very important for the creditors. Here the company is dependent on external equity to the extent of 37%. The higher the ratio. 50% is supposed to be satisfactory proprietary ratio for the creditors. The company should gradually try to decrease the ratio of dependent on the external equity.15 0. This ratio also shows that how much the company is dependent on external equity while financing its total assets.4 0.30 2007-08 0.05 0 2006-07 2007-08 2008-09 2009-10 2010-11 RATIOS INFERENCE: This ratio explains the relation between the total assets and the proprietary fund of the company.
Chapter – 5 Findings Recommendations Conclusion Bibliography  .
07 to -23. -6.FINDINGS OF THE STUDY: 1. The working capital turnover ratio is showing a fluctuating trend from year to year and is as follows 6.48.10 in the year 2010-11.99 during 2006-11 of which indicates a continuous fluctuation in both current assets and current liabilities.60. 1.e. 3. The current ratio has shown in a fluctuating trend 1. 8. 6. 7.87.44 and -11. 1.82of previous year to -188.8.131.52 days which is not the good sign of effectiveness. 116.54 .48 which shows that operation cost has increased.39. The return on equity has also decreased from -14.98 days and 100. 0.71. 0. The gross profit ratio is also showing a decreasing trend for the last three years 12. 5.35 and 14. The inventory conversion period is also increasing year after year i. 0.67.52 days.72. The operating profit ratio is also decreasing for the last five years 9.31. 5.  . 9.The company‟s present liquidity position is satisfactory as the thumb rule is 1:1.18. The net profit ratio is in decreasing manner.94. 7.57times.02. The return on capital employed ratio is also showing a decreasing trend and has fallen down from -5.54 and 0. It decreased in the current year compared with the previous year from-9. 3.36 in the year 2010-11.84 times. The quick ratio is in a decreasing trend throughout the period 2006 – 11 resulting as 0.63 times. 9. 2. 1.57.34. 3.12 times and 3.11 and 0.70. and 16. 10. The inventory turnover ratios are 5.45. -3.05 days.72 in the year 2009-2010 to-46. It is decreasing from the last three years as indicating inefficiency of the company to manage the inventories. -7. 6. 95.69. 4.75. -2.
30. It is reduced from -11.59).21. The proprietary ratio is decreased compared with the last five years i.24 to -29. 0. The Reserves and Surplus to Capital ratio is decreased from 0.34 to 0. The fixed assets turnover ratio is in decreasing trend from the year 2006 – 11 (6. 1. 0.01. but the reserves and surplus is decreased in the current year.31. Earnings per share is reduced when compared with the last year. The return on assets has decreased from 15 to 10 in the year 2008-09 which shows that the profit has decreased. 15. 0.23. 12. The capital is constant. the long term solvency of the firm is decreased.66. 0. The proprietary ratio has shown a decreasing trend.11.e. 3. and 0.38. So. 14. 13.15.84. It indicates that the company is inefficiently utilizing the fixed assets.29 and 0. 0.67.  .
As the Working Capital turnover ratio is very good for the year 2009-2010.  . TAYO should adopt a consistent policy of working capital. The organization must improve its inventory management in order decrease stock accumulation and increase profits. 4. 2. in order to meet its current obligations. the company‟s top management should look further for the CAPITAL RESTRUCTURING. To reduce the inventory conversion period the company should take the necessary steps as reviewing its production and operation policies. 6. However TAYO ROLLS LIMITED. 2008-2009. for which it should increase the current assets while decreasing the current liabilities and should try to settle down its long term debts out of the permanent capital‟s or investment‟s return . the net profit of the company is decreased the organization should emphasize on re-viewing and re-planning its investment policies and setup plans. The management of working capital should emphasize over the company‟s credit management activities and credit policies. 7. following suggestion are derived to improve the scenario by considering the pros and cons of the objectives and scope of the study for the period 2006-2007. 8. Since. 5. The One-Stop-Shop for Cast and Forged Rolls Company has concentrated all its effort and operations to maximize its operational profits and minimize the borrowings. 2009-2010 and 2010-2011.RECOMMENDATIONS: Post to careful analysis of the study. In order to overcome the consecutive three years business losses. To maintain the liquid ratio with the standard value (1:1) the company should improves its liquidity positions by proper management of inventories and bill receivables. 3. 1. 2007-2008.
Even as already thinking in terms of further growth.  . TAYO is already the only producer of the FORGED ROLLS in the world.CONCLUSION: According to study at TAYO ROLLS LIMITED. It can be concluded that there is continuous effort to upgrade the skills of the exciting personnel and to create a congenial work and social environment of growth for development of the personnel. This helped to achieve production targets. The overall industrial relations situation in the organization has been more or less normal. Keeping in the track with economic changes TAYO is trying harder to overcome its losses and be established successfully by implementing the cost control measures of which RATIO ANALYSIS is of immense importance. All the performances achieved or expansions achieved are due to the earlier proper controls and policies and they are trying hard to re-view those fruitful policies to overcome the incurred losses. The management believes in biparty settlement of all dispute and differences with the unions through the participative system of management. what has now put it in the „big league‟ of International Market in its spectacular achievement or export front. Effort of TAYO starting from worker in shop floor to the position of top management all is conscious.
google.com www.tayo.A Siddiqui Websites: www.wikipedia.com  .co.in www.BIBLIOGRAPHY: Books: Financial Management – I M Pandey Financial Management – Khan and Jain Financial Accounting – S.
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