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1.1 INTRODUCTION In our present day economy, finance is the provision of money at the time when it is required. Every enterprise whenever big, medium or small needs finance to carry on its operations and to achieve its target. In fact, finance is so essential today that it is rightly said that, it is the life blood of an enterprise without adequate finance, no enterprise can possible accomplish. Finance guides and regulates investments decisions may be pertaining to capital expenditure and revenue expenditure. To get the best out of the available funds is the major task of financial management. The finance manager should perform his task most effectively. Finance is the lifeblood of business. It is rightly termed as the science of money. We hold finance for the production of goods and services as their distribution. The term business finance indicates an activity or a process, which is concerned with acquisition of funds, allocation of funds and finance controls. The finance requirements of a company can be broadly classified into a long term, medium term and short-term finance. Long term finance is needed for buying machinery and equipment or for the provision of land, factory building and other fixed assets. Medium term finance is needed for small tools, implements and major repairs. Short term finance is required for new months for the purchase of raw materials for processing and meeting expenses like wages, salaries etc. in order words to meet its working capital requirements. Accounting and other business functions. The wastage of funds can be avoided. The finance functions is not just a service function through it is generally viewed as one of the most important decisions on the basic of availability of funds. In the finance function bended with productions marketing, personal.

COMPANY PROFILE The prestigious Salem dairy complex is situated in about in 46 acres of land bound by sithanur and dhalavaipatty villages. It is located just 6 km away from Salem railway junction on the way to Govt.medical College and Salem steel plant. The Salem district co-op. Milk producers' union ltd. has been registered on 10.07.1978 and started functioning from 07-10-1978. To begin with, the union started procuring 33,100 lpd of milk from 227 affiliated primary milk coop societies. Then gradually expanded its activities and now reached a daily average procurement of more than 4.0lakhs liters per day from 1049 functional departments.

It is a feeder balancing dairy i.e. converting surplus milk solids into products like butter, ghee and skim milk powder. The commercial production of products viz. Butter, ghee and skim milk powder started on 16-08-1983. All the union activities are fully computerized. Dairy is place where handling of milk and milk products done. Technology refers to the applications of scientific knowledge for practical purpose. Dairy technology has been defined as that branch of dairy science, which deals with the processing of milk manufacturing of milk products on industrial scale.

INDUSTRY PROFILE It is proposed to organized and assist 25 women dairy co-operatives both in Salem and namakkal districts during the period from 2002 to 2005, involving 1750 women members through self help groups. The proposed 25 dairy co-operative will have 70 members in each society and they will be identified, trained in all aspects of dairying and monitored continuously for their economic enlistment. The dairy has installed capacity to process 3lakhs liters of milk per day, to produce 10 MT of skim milk powder 9 MT of butter and 6 MT of ghee. The quantity of milk available after local sales and dispatch to Chennai is converted into products viz., butter, ghee and skim milk powder. Ghee and skim milk powder are being solid in the markets all over India through the Tamil nadir co-op. Milk producers federation Ltd., Chennai with Agmark and ISI grades respectively. Our products bear the famous brand name of AAVIN. I.S.O. 9002 Certificate also obtained for production and supply of milk, skim milk powder, butter, ghee and UHT milk in tetra pack.

1.2 REVIEW LITERATURE: In this chapter some of the earlier work on ratio analysis considered as a part of this research work. Brief reviews of all those works are given below i.e., research name, his name of university, his objectives methodology and his major finding and suggestions are referred. P.V vasudeevan, in the research main objective is to analysis the financial performance of the company, to study the funds the flow patterns, to judge the solvency of the company. And to study the trends in financial performance analysis of the company. The research adopted financial statement analysis, ratio analysis and comparative balance sheet analysis.

The role of faster cash accuracy in the efficient management of financial performance has been illustrated by the performance during 1986-86 crushing reasons. When deposits a higher levels of inventory, he has still been as appreciable reduction in the interest cost. K.Srinivas the researchers main objective are to critically examine and high lights the financial performance of the company for the period 1981-82 to 1985-86 to study the liquidity and profitability of the company and to study.

1.3 STATEMENT OF THE PROBLEM This is to find out the financial performance of the co-operative milk producer including Trading, Profit and Loss account and Balance sheet of the co-operative milk producer. It is to analyze the financial performance and its position of sithanur primary agricultural Co-operative society by using financial performance analysis.

1.4 OBJECTIVES OF THE STUDY To know the liquidity position of the concern by considering the position of current asset and current liabilities To study the profitability position of the company by analyzing the various factors influencing the profitability To analyze the financial performance of the co-operative milk producer for five years

1.5 SCOPE OF THE STUDY The scope of this study is to provide an insight into concept of financial performance analysis and illustrated it by actually financial performance. In our present day economics, finance is defined as the provision of money at the when it is required every industry whether big medium or small needs finance to carry on its operations and to achieve is target. Finance is therefore viewed as the most important area in every industry therefore the management requires giving special attention on this the conventional approach to finance function in business high light the procurement of funds on the most economic and favorable terms to concern. The basic for financial planning and analysis financial information, financial need to predict compare and evaluate the forms earning ability.

It contains summarized information of the firms financial affairs, organized systematically.

1.6 RESEARCH METHODOLOGY For every comprehensive research a proper research methodology is indispensable it has to be properly conceived. The methodology is followed. The research design refers to preplanning of what a researcher dose in his study. The design adopted in the study comes under exploratory and evaluator research .since the data collected from the financial statements of the company is analyzed under various financial and tactical tools. SOURCES OF DATA: The data require for the study have been collected from the secondary sources Primary Data: Primary data is the first hand information that is collected during the period of research. Primary data has been collected through discussions held with the staffs in the accounts department. Some types of information were gathered through oral conversations with the cashier, taxation officer etc. Secondary Data: The secondary data are those data that are already collected and published. The financial statements published & other publications relevant to the analysis are used as a basis for the secondary data. Data necessary for the study are acquired by collecting second hand information i.e. secondary data. In this present context the secondary data necessary for the analysis are acquired through 5 consecutive years. ANALYTICAL TOOLS Ratio analysis Comparative balance sheet RATIO ANALYSIS Current Ratio Debtors Turnover Ratio Average Collection period Ratio Creditors Turnover Ratio Average Payment Period Ratio Fixed Asset turnover Ratio Net Capital Turnover Ratio Current Asset to Sales Ratio

Proprietary Ratio Debtors Assets Ratio

1.7 LIMITATIONS OF THE STUDY This analysis is based on the published annual reports. This study is based on the secondary data basis. Due to lack of time, this analysis of study is of short nature. The financial analysis based on such financial statements on accounting figures would not portray the effect of price level changes over the period. The limitation of the annual reports may, therefore, affect the result of the study.