HISTORY OF ATLAS CYCLE:A man had a dream – to provide quality bicycles to his countrymen at reasonable prices. The man was Late Janki Das Kapur.

Atlas Cycles started its odyssey way back in 1951 and today it is one of the largest manufacturers of bicycles in the world. Atlas bicycles are ridden over 50 countries around the globe. Now, Atlas Cycles (Sonepat) has also bagged ISO 9001: 2000 certificate by implementing the latest International Quality Management System. And they owe all this

success to their devoted workers, engineers and their numerous satisfied customers worldwide. A man had a dream. To provide quality bicycles to his countrymen at reasonable prices. The man was Late Shri Janki Das Kapur. The dream: Atlas Cycle Industries Ltd. A modest beginning in an improvised shed at Sonepat. This was transformed into a 25 acre factory complex in a record period of 12 months. In the very first year of operation 12000 Atlas Cycles rolled out of the plant. Soon, the first consignment of Atlas Cycles was sent overseas. Atlas has since then exported to over 35 countries. By 1965, Atlas had emerged as India's largest cycle manufacturer. Greater demand, higher production and ever-expanding markets made Atlas a name to reckon with. Company has three well- integrated Bicycle plants to meet the rising domestic and international demands as well as five ancillary units for manufacturing components. It has manufacturing facilities at Sonapet, Rasoi, Sahibabad and Gurgaon near Delhi. To meet its entire steel tube requirements the Atlas Steel Tube mill was set up at Gurgaon. Atlas cycles as well as components are exported to over 35 countries among them are advance countries like Italy, Holland, U.K., Japan and Australia.


It was time for accolades. ATLAS was presented with the FICCI Award for 'Best Industrial Relations'. ATLAS' growing importance in the international arena did not go unnoticed either. Italy's Gold Mercury International Award was conferred on ATLAS. Subsequently, ATLAS also received the prestigious EEPC Award for export excellence for the year 198O 81 and several times later on. The honor of being appointed official supplier of bicycles to the IXth Asiad, at Delhi, added another feather to ATLAS' cap. With growing demand for its products came the need for achieving self-sufficiency in specialized bicycle components. To meet its entire steel tube requirements the ATLAS Steel Tube mill was set up at Gurgaon. Not only was dependence on external suppliers broken but stringent quality controls, synonymous with ATLAS, could be maintained. To meet the entire requirement for steel tubes, ATLAS Steel Tube Industries was set up as a subsidiary unit in Gurgaon in 1983. This division was recently shifted to Bawal, District Rewari in 2006 for expansion purpose and re-setup on a sprawling 10 acre land. This unit built with Japanese collaboration is equipped with the latest machinery for mass production. ATLAS has achieved self- sufficiency even in the production of chains, chain wheels, hubs and more. New expansions. New entrants. At ATLAS this is a process that never seems to stop. An ATLAS cycle to suit every individual taste and requirement. The promise of ATLAS. The dream of one man fifty years ago. The dream continues. To clock new records, new innovations, new venture.

1950 -

The Company was incorporated on 31st May, at Sonepat.

The Company's objects are to manufacture bicycles and bicycle components and parts. Some of the trade names used by the company are `ATLAS', `ARMY', `EASTERN STAR' and `ZEBRA'. The factory is located at Sonepat, near Delhi, and the factory buildings cover an area of about 2, 50,000 sq. ft.


- The capital structure in 1956. 3,144 pref. shares fully paid- up 160 pref. paid-up 255 pref. shares 50% paid-up.

Shares 90%

1969 - The Company sponsored a scheme for the manufacture of powered bicycles in technical collaboration with S.A.C.E.M. of France, one of the largest manufacturers of powered bicycles under the trade name `Velosolex'. - 1, 10,000 bonus equity shares issued in the prop. 1:2. 1970 - A new company under the name and style of Atlas Auto-Cycles Ltd., was registered as a subsidiary of the company for this purpose on 9th March. This company was to

manufacture 50,000 powered bicycles per annum. The company obtained Governments approval for investing Rs.10 lakhs in the equity capital of Atlas Auto-Cycles Ltd. 1971 The Collaboration agreement for the manufacture of powered b icycles was

unilaterally terminated by the foreign collaborator on technical grounds. 1972 - In January, the factory entered into a technical collaboration agreement with an Iranian party who proposed to manufacture bicycles and bicycle parts. The company was to supply technical know- how etc. in consideration of some technical fees payable by the Iranian party. - The Company also entered into another 10 year collaboration agreement with the National Development Corporation of Tanzania for the manufacture of bicycles in that country. This agreement was transferred to The National Bicycles Co., Ltd. Tanzania. 1977 - 2,00,000 bonus equity shares issued in prop. 5:11. 1978 - 1,10,000 bonus equity shares issued in the prop. 1:3. 1979 - Punjab and Haryana High Court approved the amalgamation of this subsidiary with the company with effect from 1st January. - Authorised capital reclassified. 7,579 - 11% pref. and 1,29,337 No. of equity shares allotted to members of Atlas Auto-Cycles, Ltd. without payment in cash upon its merge with the company.


1985 - The Company went ahead with its tube mill project at Gurgaon (Haryana). A factory with a production capacity of 10,000 TPA of tubes was under construction. 1986 - Land and buildings of the company were revalued as on 30th June, and the net surplus of Rs 789.06 lakhs arising out of this was credited to capital reserve. 1987 - 3,84,668 bonus equity shares issued in the prop. 1:2. 1990 - 6,856 - 11% pref. shares were redeemed as on 31st March, 1991. 1991 - 723 - 11% pref. shares redeemed. 4, 71,250 No. of equity shares issued on part conversion of pref. 1992 - The company issued 494550 - 15% PCD of Rs.200 each on Rights basis. Of these Rs.130 of the face value of each debenture was converted into one equity share of Rs.10 each at a prem. of Rs.120 per share. Accordingly 471250 shares allotted. - Balance Rs.70 of the face value of each debenture was to BE REDEEMED at par in three instalments of Rs.25, Rs.25 and Rs.20. at the end of 7th, 8th and 9th year respectively from the date of allotment of debenture ie., on January 2000, 2001 and 2002 respectively. 1994 - A sophisticated latest technology tube mill for rolling bigger dia tubes was installed and commissioned. - During October, November the company issued 8,25,000 - 12.5% convertible redeemable debentures of Rs.200 each with detachable warrants. - Rs.200 of the face value of each debenture was to be redeemed in three equal instalments at the end of 7th, 8th and 9th year respectively from the date of allotment of debentures ie., November 2000, 2001, & 2002 respectively. - Each warrant entitles the holder to apply for one equity share of Rs.10 each at a prem. of Rs.230 per share between expiries of 12 months from the date of allotment of debentures. - 8, 12,627 bonus equity shares issued in prop. 1:2. second non


1995 - A number of new sizes were added to the existing product range. A godown was opened in Delhi & at Pune for sale of tubing. 1996 - The performance of the second bicycle plant at SAHIDABAD SHOWED an upward trend mainly due to the newly introduced `Laser' series of bicycles and aggressive marketing strategies etc. - The third bicycle unit with a modern state-of-the-art plant is situated on 16 acres of land at Malanpur, district Bhind, Gwalior. It has fully automatic computer controlled debasing pretreatment and paint plant. Overhead conveyors running into kilometres have been provided for improved material handling. Also, specially designed ramps have been provided for loading and unloading of trucks. - 7, 87,937 No. of equity shares allotted (prop. Rs.5 per share) against detachable warrants along with 12.5% Right NCDs OF RS.200 each. 2000 - Noted Industrialist and Atlas Cycle Industries Ltd. preside nt Bishamber Das Kapur passed away on 16th August night at the Escort Heart and Research Institute. 2001 - The name of the company be changed as `Atlas Cycles (Haryana) Ltd'. 2004 - Atlas ropes in Sunil Shetty, Sania Mirza as brand ambassadors



ATLAS is not just a Company; it is a phenome non. ATLAS has been India's brand leader in the bicycle segment with equal prominence on the global platform. Ever pioneering and ever leading in bringing out the latest technology, offering smart machines at affordable costs. Our growth dynamics is uniquely linked with our consumers who drive us to keep innovating and excelling. It is our prime objective to deliver the best quality product and services with upgraded R&D measures. ATLAS Cycles is undergoing a metamorphosis, with growing consumers' aspirations generating an exciting overdrive of competition across the market. In such scenario, it's the vision armed with high end upgraded technology and innovative niche designs which rules the roost. Realizing this we have set our objectives clear and pragmatic and that is to keep our consumers at the center of our endeavors and produce the bicycles that are at par with global standards. Our quest for better corporate performance and greater custo mer satisfaction would very soon begin to show even better results. New expansions. New entrants. At ATLAS, this is a process that never seems to stop. An ATLAS cycle to suit every individual taste and requirement. A household name in cities and villages across the length and breadth of the country. The promise of ATLAS. The dream of one man fifty years ago. The dream continues. To clock new records, new innovations, and new ventures.


FiveDecadesofCyclingRevolution Atlas name is synonymous with the cycling revolution in India. Since 5 decades the Company has enjoyed a position of eminence and leadership in the Bicycle industry. This was made possible because Atlas constantly strived to move ahead with never ending zeal, technological up gradations, backward and forward integration and user friendly innovations.

Atlas logo has been derived from Greek God depicting the legendary hero holding the word on his shoulders. Thus Atlas assimilates in itself aspirations of the millions in their progress and transition through various phases in their lives.

4MillionBicycles Atlas is proud to be one of the top bicycle producing companies in the world, with a capacity to produce 4 million bicycles per year. Today, Atlas has earned not only brand loyalty but also millions of satisfied customers in India and abroad. This is corroborated by the fact that Atlas Bicycles are being used in over 85 countries. Atlas always tries to access customer needs and add value to the product. By following philosophy of continual up gradation and improvement, it has adorned a culture that embraces quality. The company has also been accredited with ISO-9001-2000 certification.

AGlobalPhe nomenon With a perfect assimilation of styles, technology & a focus on customer needs, Atlas has formed strong strategic alliances overseas.

By offering a wide range of products for almost all segments and age groups, it has strived to be extremely market friendly and thus emerging as an internationally preferred br and. A fact that is proven by its wide acceptance despite stiff market competition that is emerging globally.


TheRoadAhead Keeping pace with the sprit of Racing Ahead of Times, Atlas is constantly trying to innovate and offer products with a firm commitment to meet the emerging customer needs thereby enhancing its brand image and acceptability in the global market place

Atlas: World Class Technology Automated hi- technology machines at Atlas' continuously updated plants ensure precision engineering, optimum application of manpower, and obtaining value of time. Accuracy is determined to the smallest detail. Quality Control Dedication to quality is the unwritten code at Atlas. Every Atlas cycle undergoes a series of uncompromising quality control tests before taking to the roads. Individual parts of every cycle are checked for quality, endurance and road worthiness. THE MANUFACTURING PROCESS

Seamless frame tubes are constructed from solid blocks of steel that are pierced and "drawn" into tubes through several stages. These are usually superior to seamed tubes, which are made by drawing flat steel strip stock, wrapping it into a tube, and welding it together along the length of the tube. Seamless tubes may then be further manipulated to increase their strength and decrease their weight by butting, or altering the thickness of the tube walls. Butting involves increasing the thickness of the walls at the joints, or ends of the tube, where the most stress is delivered, and thinning the walls at the center of the tube, where there is relatively little stress. Butted tubing also improves the resiliency of the frame. Butted tubes may be single-butted, with one end thicker; double-butted, with both ends thicker than the center; triple-butted, with different thicknesses at either end; and quad-butted, similar to a triple, but with the center thinning towards the middle. Constant thickness tubes, however, are also appropriate for certain bikes.


The tubes are assembled into a frame by hand-brazing or welding by machine, the former being a more labor-intensive process and therefore more expensive. Composites may be joined with strong glue or plastic binders. The components are generally manufactured by machine and may be attached to the frame by hand or machine. Final adjustments are made by skilled bicycle builders. THE RAW MATERIAL

The most important part of the bicycle is the diamond-shaped frame, which links the components together in the proper geometric configuration. The frame provides strength and rigidity to the bicycle and largely determines the handling of the bicycle. The frame consists of the front and rear triangles, the front really forming more of a quadrilateral of four tubes: the top, seat, down, and head tubes. The rear triangle consists of the chainstays, seatstays, and rear wheel dropouts. Attached to the head tube at the front of the frame are the fork and steering tube. For much of the bicycle's history the frame was constructed of heavy, but strong, steel and alloy steel. Frame material was continually improved to increase strength, rigidity, lightness, and durability. The 1970s ushered in a new generation of more

versatile alloy steels which could be welded mechanically, thereby increasing the availability of light and inexpensive frames. In the following decade lightweight aluminum frames became the popular choice. The strongest metals, however, are steel and titanium with lifeexpectancy spanning decades, while aluminum mayfatigue within three to five years. Advances in technology by the 1990s led to the use of even lighter and stronger frames made of composites of structural fibers such as carbon. Composite materials, unlike metals, areanisotropic; that is, they are strongest along the axis of the fibers. Thus, composites can be shaped into single-piece frames, providing strength where needed. The components, such as wheels, derailleurs, brakes, and chains, are usually made of stainless steel. These components are generally made elsewhere and purchased by the bicycle manufacturer.



Tailoring the tubes The metal is annealed, or softened by heating, and hollowed out to form "hollows," or "blooms." These are heated again, pickled in acid to remove scale, and lubricated. The hollows are measured, cut, and precision mitered to the appropriate dimensions. Frame sizes for adult bicycles generally run from 19-25 inches (48-63 cm) from the top of the seat post tube to the middle of the crank hanger. Next, the hollows are fitted over a mandrel, or rod, attached to a draw bench. To achieve the right gauge, the hollows pass through dies which stretch them into thinner and longer tubes, a process called cold drawing. The tubes may be shaped and tapered into a variety of designs and lengths. The tapergauge fork blades may have to pass through more than a dozen operations to achieve the correct strength, weight, and resilience.

Brazing, welding, and gluing Tubes can be joined into a frame either by hand or machine. Frames may be brazed, welded, or glued, with or without lugs, which are the metal sleeves joining two or more tubes at a joint. Brazing is essentially welding at a temperature of about 1600°F (871°C) or lower. Gas burners are arranged evenly around the lugs which are heated, forming a white flux that melts and cleans the surface, preparing it for brazing. The brazing filler is generally brass (copper-zinc alloy) or silver, which melt at lower temperatures than the tubes being joined. The filler is applied and as it melts, it flows around the joint, sealing it. Aligning and cleaning


The assembled frames are placed into jigs and checked for proper alignment. Adjustments are made while the frame is still hot and malleable. The excess flux and brazing metals are cleaned off by pickling in acid solutions and by washing and grinding the brazing until it is smooth. After the metals have cooled, further precision alignments are made. Finishing The frames are painted, not only to create a more finished appearance, but also to protect the frame. The frame is first primed with an undercoat and then painted with a colored enamel. Paint may be applied by hand-spraying or by passing the frames through automatic electrostatic spraying rooms. The negatively charged frames attract the positively charged paint spray as the frames rotate for full coverage. Finally, transfers and lacquer are applied to the frame. Chrome plating may also be used instead of paint on components such as the fork blades. ASSEMBLING THE COMPONENTS Derailleur’s and gear shift levers Depending on the style of bicycle, the gear shift levers are mounted either on the down tube—popular on racing bikes—on the stem, or on the handlebar ends. A cable is attached, which extends to the front and rear derailleurs. Front derailleurs, which move the chain from one drive sprocket to another, may be clamped or brazed onto the seat tube. Rear derailleurs may be mounted with bolt-on hangers or integral hangers. Handlebars, stems, and headsets Handlebars may be raised, flat, or I dropped. They are bolted to the bicycle stem which is then fitted into the head tube. The headset components, including bearings, cups, and locknuts, are attached to the head tube. The headset allows the fork to turn inside the head tube and thus makes steering easier.


Brakes The brake levers are mounted to the handlebars. Cables extend to the brakes and are fastened to the calipers. Tape, made of plastic or cloth, can then be attached to the handlebars and the ends are plugged. Saddles and seat posts Seat posts are generally steel or aluminum alloy and are bolted or clamped into position. The saddle is generally made of molded padding and covered with nylon or plastic materials. Although leather was the norm for saddles for a long time, it is less commonly used today. Cranksets The crankset supports the pedals and transfers power from the pedals to the chain and rear wheel. Cranksets consist of steel or aluminum alloy crank arms, chain rings, and the bottom bracket assembly of axle, cups, and bearings. They are attached with bolts and caps into the bottom bracket of the bicycle frame. The pedals are then screwed to the ends of the crank arms. Wheels, tires, and hubs Wheel manufacturers conform to the A J International Standards Organization (ISO) system for wheel diameter and tire sizes. Wheels may be constructed by machines, which roll steel strips into hoops that are welded into rims. The rims are drilled to accept spokes, which are laced one round at a time between the rim and hub flange. A wheel must be trued, or straightened, in radial and lateral directions to achieve uniform tension. Next, the rim liner, tire, and inner tube are attached. The chain may also be fitted onto the bicycle. Rear wheels are fitted with a free-/ wheel, consisting of several cogs and spacers, which frees the rear wheel from the crank mechanism when the rider stops pedaling.


Wheels are attached to the bicycle frame by means of an axle which runs through the hub of the wheel. The axle may be tightened with bolts at the ends or with quickrelease skewers. POLICIES Quality Policy

Quality at ATLAS Cycles has been at the core of all the business operations. Every cycle that rolls out of our production line bears the hallmarks of quality and excellence. This is achieved through a stringent quality control system backed up by an intensive research and development program. From working with alternative construction materials and enhancing processing methods, to improving aerodynamics, progress and innovation, all aspects are intertwined in our quest for better products and satisfied customers. Our production facilities have been certified to be in compliance with ISO 9001:2000 standards. Today, our products are built to standards that go beyond mere compliance to National and International norms and strive to benchmark improved levels in quality and perfection. Safety Policy At ATLAS, we are committed to the safety and well being of all employees and personnel who are in any way associated with our manufacturing operations. It is only through safe working practices and by creating safe working environments that a workforce can be encouraged and inspired to reach higher levels of productivity. Our safety policy includes:Consideration and understanding of safety and health in all aspects of our activities. Assuring compliance with all relevant safety and health standards Ensuring safety through an interactive approach that empowers employees to demand better conditions A sustained and consistent improvement in safety standards


Ze ro



At ATLAS Cycles, we have adopted a very stringent attitude to any irregularities in operations such as: Constructing False Data. Providing false statements or concealing essential truths intentionally. Sabotage or trading of confidential information. Partisanship towards suppliers for personal gain. Compromising on quality. Working against company's interests. Theft or embezzlement. Disorderly conduct of any sort

ATLAS CYCLES R&D UNIT Research & Development ATLAS spends a sizeable amount of money every year in research and development activities aimed at improving the product design, obtaining material optimization, improving surface finishing methods as well as better handling and packaging techniques. A highly developed research and development wing of ATLAS is the only center of its kind in India. This in- house R & D center is a totally computerized unit, recognized by the Government of India. It conducts continuous intense research and development activities in


every area related to the modern bicycle industry - including research in alternative materials, developed processing, kinetics, aerodynamics, reduction of human fatigue and other various innovative technologies Atlas Cycles (Haryana) Ltd., Sonepat, has the privilege of being the only Indian complete bicycle manufacturing unit whose in house R&D unit has been recognized by the Department of Scientific & Industrial Research, Ministry of Science & Technology, Government of India. Our R&D Centre is well equipped with Computer Aided Designing facility, prototype making facility and testing facilities etc. Atlas R&D concentrates on development of new models of bikes ranging from Kids to Mountain Bikes, City Bikes, Suspension Bikes, Sports Bikes etc.

Atlas spends a sizeable amount of money every year on research and development activities aimed at improving the product design, obtaining material optimisation, improving surface finishing methods as well as better handling and packing techniques. Atlas is the only complete bicycle producing unit in India to have beer accorded recognition for its in- house Research &. Development unit by the Government of India.

LABOUR RELATIONS Company has extended complete freedom of association to its workmen and effective recognition of their right to collective bargaining. Atlas workmen have their own elected Worker's Union registered under Government Act. The Union is recognized by the Government and the factory. The Union has been given the natural light for collective bargaining in the common interest of working force. Cordial industrial relation is maintained in the factory. The Grievance Redressal Procedure is updated from time to time. The labour welfare activities and programmes are organized by the factory as an ongoing process throughout the year which has played an important role in establishing an atmosphere of


mutual trust and harmony. The company is running smoothly since last more than two decades without any workers unrest.



MISSION AND VISION:The Vision "They, at the Atlas Group are continuously striving for synergy between technology, systems and human resources to provide products and services that meet the quality, performance, and price aspirations of the customers. While doing so, they maintain the highest standards of ethics and societal responsibilities, constantly innovate products and processes, and develop teams that keep the momentum going to take the group to excellence in everything they do." The Mission Statement

"Its their mission to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of their customers. While doing so, they maintain the highest standards of ethics and societal responsibilities. "

This mission is what drives them to new heights in excellence and helps them to forge a unique and mutually beneficial relationship with all their stakeholders. They are committed to move ahead resolutely on this path, shown to them by visionary Mr. Late Janki Das Kapur.


ACHIVEMENTS:ATLAS bicycles today run ever street and by- lanes of India, as well as on the far flung roads of the United States, Germany, Holland, Denmark, Australia, Japan, Egypt and Zambia among others. The numero Uno position has been maintained due to its adherence to quality and good workmanship, notching up many ‗firsts‘ in the cycle industry. Time Line highlights

A glimpse of some of our exclusive achievements across the spread of time: 1973 1977 : They introduced the First Road Racing Bicycle in India : They won the Gold Mercury International Award from the Govt. of Italy. They were the first and only Indian Cycle manufacturer to receive this Award 198O81 1982 : Received the prestigious EEPC Award for export excellence for the year and several times later on : They hold the rare distinction of getting sole franchise as official supplier of bicycles to Sixth Asiad Games held at New Delhi 1987 : They launched the 5 & 10 Gears model for the first time in India

Some other Landmarks Along with the above highlights, they hold several landmarks in our journey through this industry. Some of them are as follows: They are the first Indian cycle manufacturers to introduce twin suspension double shocker bike They are the first to produce bicycles with power brakes. ATLAS Macho cycle was one of the leading models in the market for several years They were presented with the FICCI Award for 'Best Industrial Relations' Introduced India's First Cricket Bike followed by immediate success



Brand Ambassadors Actor)

Sunil Shetty (Bollywood Sania Mirza (Tennisplayer) Robin Singh (Cricketer)

Premchand Degra (Body Builder & Mr. Universe 1988) Atlas Cycle Haryana Ltd is all set to enter the African continent, the UK, East Europe and Russia. The company started exporting bicycles in 1958 and at present, the cycles are used in over 50 countries. ―Atlas has sold over 17 lakh cycles in fiscal 2003-04. The company is aiming to increase this figure to about 20 lakh. The company recorded a turnover of Rs 340 crore in 2003-04,‖ Girish Kapur, joint president, Atlas Cycles, said. Atlas is planning to launch Samrat range of bicycles. The company has more than 50 models with over six models for women, 20 to 30 in the fancy sports category and eight to 10 kids‘ models. Atlas said the company has a 28 per cent share of the bicycle market. The major players in the market are Hero, Atlas, TI Cycles and Avon.

Bicycle makers in the country post 5 per cent growth a year, but in the current fiscal year, Atlas has registered a growth of over 15 per cent, the company said. Kapur said, ―The Union Budget has a lot of pro-poor proposals. However, the common man‘s vehicle would get costlier as excise duty on steel has increased by four per cent. The bicycle industry has seen a 25 per cent hike in raw material and steel prices in the past six months.‖

Atlas has manufacturing units at Sahibabad in Uttar Pradesh, Malanpur in Madhya Pradesh and Sonepat in Haryana. ―Atlas is the only Indian bicycle company with a complete manufacturing unit whose inhouse research and development unit has been recognised by the department of scientific and


industrial research, Union ministry of science and technology. The company has a modern paint application unit at Sahibabad,‖ said Kapur.

FUTURE PROSPECTS OF COMPANY: Atlas Cycles started its odyssey way back in 1951 and today it is one of the largest manufacturers of bicycles in the world. Atlas bicycles are ridden over 50 countries around the globe. Atlas Cycles, Sonepat unit caters to the needs of North-East and Central Africa, USA, Latin America, South and Central America including Mauritius, West Indies and Madagascar Island. Atlas cycles are very popular and commonly used in countries of Egypt, Zambia and Kenya. Atlas Management is conscious about its social responsibility to protect and conserve environment for the future generation. It has taken all around actions for pollution control in the field of water, air and noise and complies with all the regulatory norms as per the laws of the land. It is also working in direction of pollution prevention as per the guidelines of United Nations Environment Programme (UNEP) and Global Compact (GC). The company has variety of manufacturing activities including electroplating, heat treatment, painting, etc. As a precautionary approach to environment challenges arising out of effluent generated by these production shops the company has installed most modern Effluent Treatment Plant designed and commissioned by National Productivity, New Delhi. It is reputed as one of the best Effluent Treatment Plants in northern India in private sector industries. In order to augment photo - synthesis cycle of nature and to maintain greenery, company has planted more than 2000 plants and trees in its campus of 28 acres. Rain harvesting system has also been incorporated for best utilization of rain water and 70% rain water is now being recharged to sub - soil effectively. According to Mr Sanjay Kapur, Joint President, Atlas Cycles (Haryana) Ltd. (Malanpur Unit). Our aim is to produce quality bicycles at affordable prices to match the lifestyles of our customers across all age groups and the launch of Dragon and Sting mark a step further in this direction.


Despite of slump in market Atlas cycle ltd posted 22.78 per cent increase in net profit of Rs 97 lakh for the fourth quarter ended March 31, 2009, compared with Rs 79 lakh recorded during the same period a year ago. The latest bikes are for the urban kids. This sizable population has the tendency to facsimile the West, especially in their lifestyles. And since the adventure sport is growing rapidly there, we hope a good response in India too. There is a good chance of increase in sales of hi-end products is expected to grow with the Commonwealth games in 2010. An eco-friendly mode of transportation, bicycles are being revived across the world and the steps are taken, especially by the symbols of modernization, like the Metro in the capital in encouraging commuters to pedal their way to their destinations.

Bicycle Industry - The Changing Market Scenario

The country today is on the threshold of globalization and teaming million are looking for higher level of growth together with equitable distribution of income to improve their lots. Generally the economic signs appear to be favorable fo r the country to improve its performance and in turn improve the lot of its people. Obviously; this improvement is going to reflect upon the Bicycle Industry in particular and transport segment in general. With customers of the country aspiring for higher and higher the current Bicycles users will be graduating to auto two-wheelers, but there will be a new population looking to the bicycle as means of transport. Similarly a new generation of buyer will look to bicycle as a mean of leisure recreation and good way to keep fit.

We, therefore, see a healthy sustained growth of cycle industry. Presuming that growth of last 3-4 years is sustained for next 10 years i.e. the time we reach the year 2010, the Indian bicycle industry would need to produce about 1.75 crore bicycles to plug the demand and


supply gap. However, there will be a change in the demand pattern linked with consumer changing aspiration and choice giving way to latest technology and newer marketing concepts. Industry is already witnessing this to some extent. The new millennium has brought new challenge of opening up of import of Cycles. The manufacturers in India agree to the point that Indian Bicycle Industry does not foresee any problem as the product offered today by Indian manufacturers in the market are best suited to Indian conditions and are most economical and value for money products. Indian economy is doing fairly well as the agricultural and industrial growth overall is showing favorable trend for last quite some years. Good monsoons and good efforts to give leverage to the trade has helped our economy boost. The developments made at technology front especially in software and electronic field has made every entrepreneur quite enthusiastic about future. The benefits of these developments, technology coupled with favorable atmosphere has percolated to the consumer as well who now has a wider choice at very competitive rates. The growth rate of Roadster bicycle is expected to slacken and the newer segments of the market like fancy bicycles will grow far more rapidly. It would not at all be surprising if by 2010 the fancy bicycles and roadster bicycles have almost equal market share against existing 20% market share of fancy bicycles. This switch over will not be easy one and will require a total redefining of industry to meet the new challenges. The fancy bicycle require for greater flexibility in manufacturing, much tighter quality management; being wide in rage and variety - require for more efficient supply chain management, far more impro ved after-sales-service to the increasingly demanding consumers and most important; change in retail ambiance. In fact, the worlds over markets are behaving in similar fashion and product features have become alike all over. New segments are emerging and to cater such markets, newer models with world class features are being introduced in Indian markets at regular intervals. Hero Ranger Swing revolutionized the multi- geared segment and has created a niche for itself Ranger-M, Piranha, Queen, Active, Charmeleon and Hero Neon have been clear cut winners


and have taken the market by storm. This increasing segmentation is Mantra for success in today's environment of high expectations and low brand loyalty. We at Hero have taken into our stride to these impending changes and are prepared to meet the challenges thus posed so that the benefits of these changes are reaped. The initiative for the change in durable consumer industry has to be driven by the manufacturers. This will be through investment in more flexible plant and machinery to produce more contemporary bicycles in much shorter turnaround time. We have to look into the entire gamut of the market and help our retail outlets to improve their ambiance to the customer, to pull them to their shops. On the whole the future for Indian industry including Bicycle will be challenging. The domestic market will be open to good and services from global companies with low tariffs. Protection will be a thing of the past. The companies that will survive will be those which successfully restructure and modernize to achieve global competitiveness in terms of both quality, cost and distribution system.


INDIAN CYCLE INDUSTRY:Bicycle was seen in India in the year 1890. Import of cycles, however, started in 1905 and continued for more than 50 years. Complete ban on imports was announced by the Government in July, 1953, but cycle kept on simmering in the country till 1961. In 1890, selling price of an imported bicycle was around Rs. 45/-; in 1917, during the First World War the price jumped to Rs. 500/- but dropped considerably, month by month and came down to Rs. 35/- or so (U. K. makes) and Rs. 15/- or so (Japanese models).

It would be interesting to mention that in 1919, five persons in Punjab imported cycles and used them on The Mall, Simla. These included one Bishop, Two military men and two contractors including S. Pala Singh Bhogal (Grand Father of Mr. M.S. Bhogal of Ludhiana). Under special permission of the Governor, they were allowed to use cycles on 'The Mall' only for one hour in a day. They imported B.S.A. Cross Bar Cycle from U.K. and it used to be a kind of Mela at that particular hour on the Mall in Simla, the scene watched by hundreds of people every day. Later, a firm was formed under the name of Singh & Co. with shops on Railway Road, Jalandhar and Bazar Vakillan, Hoshiarpur, which imported bicycles in the year 1930 onwards. With an annual turnover of more than 12 million bicycles, the bicycle industry is one of the most established industries in India. It has raised the country's position to that of the second largest bicycle manufacturer in the world, next only to China. India has seen a tremendous increase in the number of bicycle manufacturers and bicycle exporters in the recent past. Today, the Indian bicycle manufacturing and bicycle spares industry is well accepted and is also widely recognized for its quality standards in international markets.

Most bicycle components, spares and bicycle accessories in India, except for free wheels and single piece bicycle hubs, are manufactured by the Small Scale Sector (SSIs), while the large scale units are permitted to manufacture bicycle frames, chains and rims for captive consumption. Manufacture and export of complete bicycles falls within the purview o f the Organized Sector. The Indian bicycle industry is currently in the midst of making endeavors


for enhanced and increased bicycle exports since the scope for export of Indian manufactured bicycles in the international market is significant.

Industry Pros pects and Challenges "Results always exist outside the organization in the market place.

Only costs and efforts exist inside the organization". -Peter Drucker The bicycle industry has been on an upswing in the last few years. Major players are increasingly turning to innovative product features to capture the market. In fact the bicycles have donned a 'new avataar'. After years of sluggish growth and zero innovation, the industry has been witnessing a flurry of activities. Bicycle manufacturers are flooding the market with sleek, trendy and colorful models. The customers suddenly found that they have a wide choice to meet every need and taste. The fancy bicycle, for that matter new wave bicycle sector, thus began growing. However, the growth rate is indeed dramatic as compared to the growth of conventional bicycles. Market and customer focus "Wake up every morning terrified", said Jeff Bezos - Time Magazine's 'Person of the year', "not of the competition but of our customers." This profound observation sums up: "Customer is the King". The key to survival is, therefore, the ability to learn and change. The customer profile is changing fast. Resultantly, the market-place today is in a constant state of change and constantly changing markets require a sensitive feel, careful analysis, flexible thinking and rapid action on the part of bicycle industry for survival. Inflation viz-a-viz growth


The bicycle industry is facing an ever growing menace of inflation. The all round increase in the costs of inputs has necessitated the periodical upward revision of rates, much to the dismay of dealers and customers. The unavoidable phenomenon can only be met by

increased vigilance in monitoring costs as well as by general diligence in application of technology for improving process efficiency. New EXIM policy - Challenges ahead The new Exim policy announced by the Government of India in tune with the liberalization policy pursued has put bicycles in the Open General License (OGL) thus paving the way for the presence of foreign brands in the Indian market.

To meet the challenge from the foreign brands, the need of the hour is to make ceaseless efforts for updating the models with stress on strength and optics based on International quality standards. In other words, a dent can be made to take on foreign brands only by faithfully enforcing ISO series quality norms by maintaining rigid quality standards at every stage of production, up gradation of technology, strong Research and Development (R&D) base and effective monitoring. Once the industry is able to achieve sustained desired quality standards, the industry shall be in a far better position in gaining competitive edge over foreign brands. The earlier it is achieved, the better for the Indian bicycle industry, as the challenge is 'real' and has come to stay. Interestingly enough, the West is rediscovering the virtues of non- motorized transport, especially bicycle. It is gathered that "countries like Finland have three bicycles for every five persons. In some American States, it is mandatory for companies/firms employing more than 100 persons to provide incentives for using bicycle. In Europe, trains and buses have


special space for carrying bicycles and Railway Stations provide more parking area for bicycles than cars." This explains how well the 'bicycle concept' has caught-up in advanced Western countries. With Government of India putting up priority on 'market economy', it is for the Indian bicycle industry to hold a solid edge in the world market.

Most state governments have special schemes that involve gifting bic ycles to people, mostly children, in the economically weaker sections of the society. Such is the impact on this industry that the government is one of the biggest customers for bicycle manufacturers. State governments invite tenders for supply of bicycles and the big players get to make the most of it. The central and state governments are believed to have ordered around 1.5 million bicycles in 2008 to hand them over to poor children under various social welfare schemes. An industry source estimates that the figure could go up to 2.5 million units in 2009. States like Maharashtra, Madhya Pradesh, Bihar and Jharkhand are among those supplying bicycles free of charge to poor school- going children. The Assam government has made a provision for Rs 24 crore in 2008-09 for providing bicycles to about one lakh girl students living below the poverty line. The Haryana government has supplied bicycles to certain schools under the Sarv Shiksha Abhiyan scheme. The bicycles are to be provided free of charge to those girl students who have to walk more than 2 km to school. The Tamil Nadu government also runs schemes to encourage higher education among the Scheduled Castes/Scheduled Tribes, Scheduled Caste converted Christians studying in classes XI and XII in government and government-aided schools, under which free bicycles are distributed to students. Despite the slowdown, the bicycle industry is booming, thanks to government tenders for more bicycles


Market share of various brands in cycle industry:-

The present scenario of cycle industry can be well seen in this graph. It can be observe that Hero industry is well leading the cycle industry having 35% share where as second place is taken by Atlas cycle having 24% share. But in recent study and the conclusion given by researcher it is being said that Indian player are going to face biggest threat from Chinese manufactures. The threat of Chinese cycles priced around Rs. 500- 700 flooding the Indian market that would ultimately pedal out the Indian players. "It is all media hype to unrealistic levels as Chinese cycles didn't materialise here as predicted. However the reports had one effect, that is postponing purchase decision by the people,". China like India is a major exporter of bicycles and is much bigger than Indian industry. Firstly it should be noted that bicycles were removed from the bonded category more than a year back. Contrary to the expectations there was no major influx of bikes from China producing around 22 million cycles per annum (p.a.). This despite the fact that bicycles comes next only to wristwatches in market penetration in India.


The reasons for this phenomenon is varied like investing in crucial activities like setting up assembly line, brand building, putting in place proper sales and service network and finally the market scenario. Of all the above the last one is what favours Indian industry.

The 12- million units p.a. Indian bicycle industry could be classified into two categories viz a standard roadster and specials. The latter includes mountain terrain bikes (MTB) and children's cycles. However demand is skewed more in favour of standard roadster segment to the extent of 65-70 per cent with most of the sales coming from semi- urban and rural areas.

Coming back to the import threat, a Chinese roadster costs $25 (CIF) or around Rs. 1,150 and if one adds 40 per cent import duty the price goes up to Rs. 1,610. "On this charges like freight, overheads etc have to be added and it will make the Chinese bicycles dearer than ours,". Ultimately cost cutting has to be the mantra for Indian industry to stay afloat. An Indian team sometime back visited China to find out how the Chinese bicycle manufacturers attain cost competitiveness. However the team was not successful in unravelling the mystery.

But using plastic components would make the Indian p layers much more competitive. While the domestic industry will raise the issue of durability, it should be borne in mind that there are strong plastic compounds that are available now. One shouldn't forget that car bumpers are now made of plastics. All that a cycle buyer looks for is a functional bicycle of good quality and not a heavily steeled one. These are some off major threat to Indian bicycle industry.


Sources of Data: article written by Venkatachari Jagannathan 12 June 2001.    artical by Research and development center forBicycle.


OBJECTIVE OF PROJECT:Objective of Project Report: The object of project is to study and analysis the Financial and cost statement of the Atlas cycle ltd. The study is about analysing the growth pattern of company with the help of statements. The various cost reduction method implemented by company. The techniques followed by company to remain competitive in the market. To make the major findings from the data‘s of the company. To make recommendations, which may be useful for the company

Scope of the project: To carry out analysis of financial and cost statements of Atlas Cycle ltd using ratio analysis. To find out weakness and cost reduction techniques which would be beneficial for company, to increase profit and reduce its loss.

Reason behind selection of this topic:Corporate world is totally different from what we perceive on our own. The method what we use to prepare financial statement and cost statement are totally different from what we have studied in book. But continues guiding by my corporate guide Mr. Ashok Gupta and other


Concern person in the company it become clear that tools and techniques that are used in the preparation of these statement are different.  To get acquaintance with different tools and techniques used in preparation of financial statements.  The main purpose of prepare financial statement.  What facts and figure the statement shows.  What are different tools that a company use to make it cost efficient?  The tools used to compare health of one‘s company with the others. Like ratio analysis.  What are different benchmark ratios that a particular firm has in any particular Industry?





REVIEW LITERATURE A literature review discusses published information in a particular subject area, and sometimes information in a particular subject area within a certain time period. A literature review can be just a simple summary of the sources, but it usually has an organizational pattern and combines both summary and synthesis. A summary is a recap of the important information of the source, but a synthesis is a re-organization, or a reshuffling, of that information. It might give a new interpretation of old material or combine new with old interpretations. Or it might trace the intellectual progression of the field, including major debates. And depending on the situation, the literature review may evaluate the so urces and advise the reader on the most pertinent or relevant. A literature review is an account of what has been published on a topic by accredited scholars and researchers. Occasionally we would be asked to write one as a separate assignment (sometimes in the form of an annotated bibliography), but more often it is part of the introduction to an essay, research report, or thesis. In writing the literature review, our purpose is to convey to our reader what knowledge and ideas have been established on a topic, and what their strengths and weaknesses are. As a piece of writing, the literature review must be defined by a guiding concept (e.g., our research objective, the problem or issue we will be discussing or our argumentative thesis). It is not just a descriptive list of the material available, or a set of summaries Besides enlarging our knowledge about the topic, writing a literature review let us gain and demonstrate skills in two areas 1. information seeking: the ability to scan the literature efficiently, using manual or computerized methods, to identify a set of useful articles and books 2. critical appraisal: the ability to apply principles of analysis to identify unbiased and valid studies.


Why do we write literature reviews?

Literature reviews provide you with a handy guide to a particular topic. If you have limited time to conduct research, literature reviews can give you an overview or act as a stepping stone. For professionals, they are useful reports that keep them up to date with what is current in the field. For scholars, the depth and breadth of the literature review emphasizes the credibility of the writer in his or her field. Literature reviews also provide a solid background for a research paper's investigation. Comprehensive knowledge of the literature of the field is essential to most research papers. The topic as well as industry selected for the project is very vast in itself and there are lots of researches and studies already have been done by many researchers. To start with work done in the field of cycle industry.  Causes of growth: a study of Taiwan's bicycle industry Wan-we n Chu*

Academia Sinica Taipei, Taiwan

Abstract This paper looks at the history of Taiwan's bicycle and parts industries and examines the lessons that can be learned from it. The initial impetus for the big change came in the form of large OEM orders from the American importers, which was prompted by the sudden US demand surge in 1971–74. Taiwan out competed other places, because its industry was able to respond quickly in terms of production capability and entrepreneurship. This was as a result of accumulated learning under import-substitution, and from the favourable factors on the overall and industry level in Taiwan. Conditions in Taiwan fostered the emergence of numerous SMEs, which helped the development of a parts suppliers' network. All three factors—accumulated learning, a favourable environment, and globalisation of production— were necessary conditions for the growth of Taiwan's bicycle industry.


.  Racing and Back-Pedalling into the Future: New Product Introduction and Organizational Mortality in the US Bicycle Industry, 1880-1918 Glen Dowell College of Business, University of Notre Dame, Notre Dame, USA Anand Swaminathan Graduate School of Management, University of California, Davis, USA We hypothesize that some overlap of production between and within product generations reduces firm mortality, as it allows firms to retain valuable routines. Excessive overlap, however, becomes harmful. An analysis of the effects of new product introduction on mortality rates among the population of US bicycle producers over 1880-1918 supports our hypotheses. Our results suggest the value of separating out the content effects of innovation, which are often positive, from the process effects which tend to be disruptive.  Article Asian Business & Management (2005) Inte r-organizational Network and Firm Performance: The Case of the Bicycle Industry in Taiwan Samson Wong Yue-Ming Graduate School of International Development, Nagoya University, Furo-cho, Chikusa-ku, Nagoya 464-8601, Japan. E- mail: Abstract. The management of inter-firm networks is of paramount importance in the study of company performance. In this paper, we attempt to provide a better understanding of how the competencies of firms in an emerging market may be strengthened through the assiduous manipulation of network relationships. Using research data on 52 firms in the bicycle


industry of Taiwan, we explore whether involvement in strategic network organizations can be a valuable aid to competitiveness. In particular, we find that company performance benefits from strong network functions in the technology and marketing made available by such inter-firm relationships. Our findings confirm that those producers with more collaboration with other firms within their industry perform better than otherwise comparable firms with fewer cooperative activities. Consistent with our argument within the supplier–buyer relationship in the industry, our statistical analyses also suggest that suppliers retain a more proactive strategic behaviour in managing business networks than buyers.

 Mass Customization: Imple menting the Emerging Paradigm for Competitive Advantage Suresh Kotha Strategic Management Journal, Vol. 16, Special Issue: Technological

Transformation and the New Competitive Landscape (Summe r, 1995), pp. 21-42 (article consists of 22 pages) Publis hed by: John Wiley & Sons Abstract In many industries the dominant paradigm, `mass production,' is being challenged by the emerging paradigm, `mass customization.' Accordingly, many researchers posit that firms which replace `mass production' with `mass customization' will gain a significant competitive advantage. Based on an in-depth study of the National Bicycle Industrial Company (NBIC), this paper explores the dynamics o f pursuing both mass production and mass customization strategies simultaneously. At the operational level, the paper discusses the organizational mechanisms instituted by the NBIC in order to benefit from the simultaneous pursuit of both approaches. At the competitive level, it isolates the relative


contributions of both approaches to the overall competitive positioning of this firm in its industry. Based on this discussion, it provides a framework that illustrates the dynamics

involved in the pursuit of both approaches. Implicitly, the paper argues that for firms competing in rapidly changing environments the ability to maintain a sustainable competitive advantage depends on the firm's capability to create knowledge by interacting both mass customization and mass production approaches. Finally, the paper concludes with managerial and research implications regarding the emerging paradigm of mass customization.

 From mass production to mass customization: The case of the National Industrial Bicycle Company of Japan. Suresh Kotha, Assistant Professor of Business Policy and Operations Management Stern School of Business, New York Unive rsity, USA Abstract By means of a detailed study of the National Industrial Bicycle Company of Japan (NIBC), Suresh Kotha examines the dynamics of implementing mass customization in a firm that pursues both mass production and mass customization in two different factories. NIBC reaps superior returns by employing a ‗system‘ which increases interaction between the mass production and mass custom factories and encourages knowledge creation.


The author then considers the most important external (industry level) and internal (firm level) conditions which are necessary to successfully pursue mass customization, and points out that the interactions and interrelationships between them are important to a successful outcome too.

 Refugees as Entrepreneurs: The Case of the Indian Bicycle Industry Sukhpal Singh Institute of Rural Management, Anand Like many other industries, bicycle production in India developed after Independence. But unlike most other industries which remained concern treated in metropolitan centres, bicycle manufacturing took roots in up country towns, defying competition from metropolitan enterprises. This paper, discussing the factors responsible for the success of the northern entrepreneurs, emphasises that various concessions given by the government to the refugees from Pakistan played a critical role.

 Cons umer Product Safety Regulation in the United States and the United Kingdom: The Case of Bicycles Journal article by Wesley A. Magat, Michael J. Moore; Rand Journal of Economics, Vol. 27, 1996 This study analyzes the effect of bicycle safety regulation in the United States and the United Kingdom using data on monthly injury rates. Unlike many previous studies of product safety regulation, a specific product regulation is analyzed, and long data series are available. In both countries, the regulation led to a significant decrease in


accidents per bicycle in use. The effect in the United States is larger than in the United Kingdom.

Abstract: In the United States, accidents inside the home, in the workplace, and outside of the home and work injure millions of citizens every year. In particular, accidents associated with consumer products injured about 30 million people in 1986 and resulted in 21,600 deaths. The consequences of these accidents impose a large and serious cost on the country, justifying extensive efforts to understand them. The traditional approach to attacking the consumer product safety problem has been the imposition of direct standards on product design. Paradoxically, the academic literature on the effectiveness of safety standards provides little evidence that design standards have any significant effects. Worse yet, this literature suggests that in some cases the standards can actually lead to increases in the frequency and severity of accidents.

 MULTISPEED, CHAINLESS VEHICLE DRIVE SYSTEM Loeb et al. ABSTRACT A multispeed, chainless bicycle drive and transmission system wherein the drive train includes a shift able drive shaft connecting the pedal crank shaft and driving wheel by means of vertical gear wheels mounted transversely thereon having a multitude of concentric series


of gear teeth for providing different drive or gearing ratios. The geared drive shaft is moved from one series of gear teeth to another on one or both of the gear wheels to change the gear ratio by means of two independently moving, splinted, concentric shaft members which mate

through contact gears with the selected gear teeth series. The splinted shaft members are mounted within a tubular housing via three ball bushings which permits both longitudinal and rotational movement of the enclosed shaft members. A spring- loaded ball system is used to assure proper relative positioning of the splined shafts with respect to the selected gear teeth series.  Charging device on a vehicle to charge an electric bicycle Wu Hung Sheng et al ABSTRACT A charging device for charging an electric bicycle includes a charger which is received in the trunk ol a vehicle and electrically connected to the battery ol the vehicle by a conductive wire. A wire extends from the charger and is detachably connected to the rechargeable battery ol the electric bicycle which can be received in the trunk or carried on the vehicle by a bicycle carrier attached to the vehicle. The conductive wire has the first end connected to the charger and the second end having an adapter which is received in the cigarette lighter receptacle hole in the vehicle.


These are some of the previous studies done by researchers. Now the research work done related to topic of my project. Analysis of financial statements: Accounting standards and value relevance of financial statements: An international analysis. Mingyi Hung Leventhal School of Accounting and Marshall School of Business, University of Southern California, Los Angeles, USA Abstract Using 17,743 firm- year observations of industrial companies in 21 countries from 1991 to 1997, this paper finds that the use of accrual accounting (versus cash accounting) negatively affects the value relevance of financial statements in countries with weak shareholder protection. This negative effect, however, does not exist in countries with strong shareholder protection. These findings are consistent with the belief that shareholder protection improves the effectiveness of accrual accounting, and suggest the importance of considering shareholder protection when formulating accounting policies related to accruals.  Fraudulently Misstated Financial statements Insider Trading: An Empirical Analysis. Scott L. Summe r John T. Sweeney unive rsity of Missouri – Columbia Abstract The study investigates the relationship between insider trading and fraud. They found that in the presence of fraud, insider reduce their holdings of company stock through high level of


selling activity as measured by either the number of truncations, the number of share sold , or the dollar amount of share sold. Moreover they represent the evidence that a cascaded logit modal, incorporated insider trading variable and firm specific financial characteristics, differentiate company with fraud with company without fraud.  Forecasting Company Failure in the UK Using Discriminant Analysis and Financial Ratio Data By R. J. Taffler City University Business School, London, U.K

This paper describes an operational discriminant model for the identification o f British companies at risk of failure and discusses the results from its application since it was developed and its degree of inter temporal validity. It raises a number of issues related to the use of multivariate statistical techniques in the finance area and highlights some of the methodological weaknesses in extant studies.

 On The Use Of Information Theory Concept In The Analysis Of Financial Statement HENRI THEIL: The University of Chicago Management Science vol.15, no. 9 Abstract Balance sheets and income statements are numerical decompositions of certain total sums: total assets, total liabilities, total sales, and total costs and expenses. The behavior of individual items measured as fractions of the corresponding total is important for the analysis of the company's financial position. It will be argued in this article that certain concepts derived from information theory are useful as summarizing descriptive devices for changes in such fractions as well as for the analysis of differences between companies of the same industry.


 Five-Hundred Life-Saving Interventions and Their Cost-Effectiveness Tammy O. Tengs , Miriam E. Adams , Joseph S. Pliskin , Dana Gelb Safran , Joanna E. Siegel , Milton C. Weinstein , John D. Graham ABSTRACT We gathered information on the cost-effectiveness of life-saving interventions in the United States from publicly available economic analyses. "Life-saving interventions" were defined as any behavioural and/or technological strategy that reduces the probability of premature death among a specified target population. We defined cost-effectiveness as the net resource costs of an intervention per year of life saved. To improve the comparability of costeffectiveness ratios arrived at with diverse methods, we established fixed definitional goals and revised published estimates, when necessary and feasible, to meet these goals. The 587 interventions identified ranged from those that save more resources than they cost, to those costing more than 10 billion dollars per year of life saved. Overall, the median intervention costs $42,000 per life- year saved. The median medical intervention costs $19,000/life- year; injury reduction $48,000/life- year; and toxin control $2,800,000/life-year. Cost/life-year ratios and bibliographic references for more than 500 life-saving interventions are provided. Avinash K. Dixit, The making of economic policy: A transaction-cost politics Perspective. Cambridge: MIT Press, 1998. xvii + 192 pages. $22.50 (cloth). Economists cannot claim that market failures can be corrected simply by Showing that the optimal outcome in a model of a social-welfare maximizing entity divorced from any real political process will outperform the market. The most we can do is to understand how the combined economic-political system evolves mechanisms to cope with the variety of transaction costs that it must face (p. xv). Alvinash Dixit developed a very interesting and original series of lectures on what he calls transaction-cost politics (TCP) for presentation at the Center for Economic Studies at the University of Munich a few years ago. The lectures have been published in both hard and paperback volumes by MIT Press. Public Choice scholars will find much of interest in the resulting slim and very readable monograph on policy making.


The Dixit lectures are of special interest for several reasons. First, Professor Dixit is a master of modern neoclassical analysis and game theory. This, of course, is not a sufficient condition for having anything interesting to say about political economy. Many from the mainstream who dabble at political economy seem almost totally unaware of the careful work developed by the rational politics and public choice research programs over the past thirty years. This often leads their political economy to be rather light on politics – especially regarding significant institutional features like elections and interest groups. In such cases, one may still learn a bit about processes of collective decision making but mostly one learns about the still limited penetration of public choice contributions into mainstream economic thought. The extensive reference list developed by Professor Dixit provides an illustration of this. Only about 10 percent of the references are from the public choice and rational politics literatures. Only Buchanan, North, Olson, and Shepsle are cited more than once among prominent public choice researchers.  COST AND PRODUCTION FUNCTIONS, Corporate Author: PRINCETON UNIV NJ Personal Author(s): Shephard, Ronald W. Report Date: 1953 Pagination or Media Count: 111 Abstract : Contents: The process production function; Heuristic principle of minimum costs; The producer's minimum cost function; Dual determination of prod uction function from cost function; Geometric interpretation of the duality between cost and production function; Constraints on the factors of production; Homothetic production functions, The Cobb-Douglas production function; The problem of aggregation; The dynamics of monopoly.


 A Transaction Cost Analysis and Propositions, by Erin Ande rson and Hubert Gatignon © 1986 Palgrave Macmillan Journals.

Abstract A "frontier issue" in international marketing is the appropriate choice of entry mode in foreign markets. The objective of this paper is to offer a transaction cost framework for investigating the entry mode decision. This framework provides 1) a theoretical basis for systematically inter relating the literature into propositions, 2) propositions about interactions which resolve the apparently contradictory arguments advanced to date. Specifically, the paper: bullet illustrates the feasibility of clustering 17 entry modes into t he degree of control the mode provides the entrant; bullet proposes that the most appropriate (i.e., most efficient) entry-mode is a function of the tradeoff between control and the cost of resource commitment bullet advances testable propositions delimiting the circumstances under which each mode maximizes long-term efficiency. The entry mode literature is reviewed in the context of these propositions, and guidelines are derived for choosing the appropriate mode of entry, given certain characteristics of the firm, the product, and the environment  Quality function deployment: A literature revie w

Lai-Kow Chan,and Ming-Lu Wu Abstract This paper presents a literature review of quality function deployment (QFD) based on a reference bank of about 650 QFD publications established through searching various sources. The origination and historical development of QFD, especially in Japan and t he US,


are briefly accounted first, followed by a partial list of QFD organizations, softwares, and online resources. Then a categorical analysis is conducted about QFD‘s functional fields,

applied industries and methodological development. Ten informa tive QFD publications are also suggested, particularly for those who are not yet familiar with QFD. It is hoped that the paper can serve the needs of researchers and practitioners for easy references of QFD studies and applications, and hence promote QFD‘s future development.

 Inte ractive control in target cost management

Takeyuki Tani Abstract This paper discusses target cost management (TCM) from the viewpoint of simultaneous engineering. Firstly, it shows empirically how simultaneous engineering is implemented in Japanese companies. Secondly, it formulates and then tests hypotheses on the influential power of managers involved in the process of target costing. Thirdly, it describes processes of interactive control directed at information and value sharing among managers that help explain why simultaneous engineering is working effectively in Japanese companies. It also formulates and tests hypotheses on information and value sharing among managers. Fourthly, it concludes that interactive control in TCM helps generate unique ideas for product development and cost reduction, and that Target Cost Management is a key subsystem of strategic cost management.



ABSTRACT In a study involving 143 experienced managers, utility analysis was found to influence managerial decision making, but not in the way intended by advocates of this technique. Utility analysis reduced the support of managers for implementing a valid selection procedure, even though the analysis indicated that the net benefits from the new procedure were substantial. In light of these findings, industrial/organizational psychologists are advised to reconsider their assumptions regarding the information manage rs use when managers make human resource policy decisions.  Overhead Allocation and Incentives for Cost Minimization in Defense Procurement, Association. by William P. Rogerson © 1992 Ame rican Accounting

Abstract Defense firms typically produce a large number of products. The purpose of this article is to explain how two features of the current regulatory process create a significant incentive for these multiple-product firms to choose inefficient production methods. The first feature is that the marginal impact of accounting cost on price varies significantly among products. Prices for a defense firm's products are set according to a rather unique process that combines elements of both competition and cost-based regulation. Defense firms typically produce some purely commercial products and prices for these products are competitively determined. Aside from standard off- the-shelf items such as army boots, most defense products are purchased from a sole source and thus their prices are nominally cost-based. In reality, the negotiated price is likely to be affected by other factors as well. In particular, in


cases where closer substitutes exist or where an alternative source might not be prohibitively expensive, the potential cost of these alternatives plays a role. The important consequence of this is that the negotiated price will not necessarily decline or rise by a full dollar when the projected cost of production declines or rises by a dollar. In more competitive procurements where the cost of alternatives plays a stronger role, changes in projected accounting cost are less important. The second feature of the regulatory process concerns the method that defence firms are allowed to use to calculate the cost of each product. Following traditional commercial accounting practices, only a relatively small fraction of costs are directly charged to products. The remaining costs are grouped together into overhead pools and allocated across products usually in proportion to directly charged labour use. These two features create the following incentive problem. Given the first feature, the firm would like to be able to assign more of its costs to well- funded sole source procurements instead of to more competitive procurements or commercial products. The second feature provides a method for accomplishing this task. Namely, the firm can increase (decrease) the amount of overhead allocated to a contract by increasing (decreasing) the amount of direct labour used on the contract. This means that the firm will have an incentive to engage in pure waste by padding direct labour usage on contracts with cost sensitive revenues. It will also have the incentive to distort its input substitution decisions between labour and other inputs by using too much (too little) direct labour on contracts with cost sensitive (cost insensitive) revenues. Two major types of input substitutes for labour exist. The first is capital. Thus, we would expect the firm to purposely under-capitalize production of products with cost sensitive revenues and over-capitalize production of products with cost insensitive revenues. The second possible input substitute is material. For many subcomponents of a weapon, a firm has the potential option of subcontracting production to another firm or making the component in- house. Subcontracting will result in higher direct material costs for the firm but lower direct labor costs. Thus, engaging in more in- house production is essentially a way of substituting towards direct labor and away from direct material. In particular, then, we would expect the firm to purposely engage in too much in-house production for its products with cost sensitive revenue and too much subcontracting for its products with cost


insensitive revenue. An important point to note about this incentive effect is that it does not require the firm to report any cost projections untruthfully. That is, in the behaviour predicted by this article, the firm does not make money by projecting that costs will be high (in order to get a high price) and then actually having low costs. The firm actually spends all of the money that is charged as a cost. The profit occurs through shifting the assignment of these costs. The importance of this point is that auditing is very poorly equipped to deal with this type of behaviour. Auditing is relatively good at determining whether the firm actually spent as much as it projected. However, it is relatively poor at determining whether any expenditure that actually occurred was necessary. Braeutigam and Panzar (1989), Brennan (1990), and Sweeney (1982) have analyzed models of pub lic utility regulation where the utility has commercial business segments. They make the general point that, depending upon how costs are allocated, the firm may have an incentive to distort its output and/or input decisions in order to shift overhead to the regulated sector. However, none of these articles analyzes allocation schemes based on direct labour or any other input base. Braeutigam and Panzar (1989) and Sweeney (1982) consider allocation schemes based on units of output under the assumption that comparable units of output exist across different products. Brennan (1990) considers allocation schemes where each product is allocated a fixed, invariant share of overhead. Thus all of the predictions of this article regarding the particular sorts of input distortions one would expect to see in defence procurement are new to this article. Furthermore, on a technical level, the model of this article is also somewhat different because it considers a multiple product case where products are not necessarily either perfectly competitive or perfectly regulated and the level of competitiveness varies from product to product.

 Better Medicare Cost Report Data are Needed to Help Hospitals Benchmark Costs and Performance Magnus, Stephen A.; Smith, Dean G.


Abstract To evaluate costs and achieve cost control in the face of new technology and demands for efficiency from both managed care and governmental payers, hospitals need to benchmark their costs against those of other comparable hospitals. Since they typically use Medicare Cost Report (MCR) data for this purpose, a variety of cost accounting problems with the MCR may hamper hospitals' understanding of their relative costs and performance. Managers and researchers alike need to investigate the validity, accuracy, a nd timeliness of the MCR's cost accounting data.

 Costing the distribution of insecticide-treated nets: a review of cost and costeffectiveness studies to provide guidance on Standardization of costing methodology Jan Kolaczinski*1 and Kara Hanson2 Abstract Background: Insecticide-treated nets (ITNs) are an effective and cost-effective means of malaria control. Scaling- up coverage of ITNs is challenging. It requires substantial resources and there are a number of strategies to choose from. Information on the cost of different strategies is still scarce. To guide the choice of a delivery strategy (or combination of strategies), reliable and standardized Cost information for the different options is required. Methods: The electronic online database Pub Med was used for a systematic search of the Published English literature on costing and economic evaluations of ITN distribution programmes. The keywords used were: net, bed net, insecticide, treated, ITN, cost, effectiveness, economic and evaluation. Identified papers were analysed to determine and evaluate the costing methods used. Methods were judged against existing standards of cost analysis to arrive at proposed standards for Undertaking and presenting cost analyses.


Results: Cost estimates were often not readily comparable or could not be adjusted to a different context. This resulted from the wide range of methods applied and measures of output chosen. Most common shortcomings were the omission of certain costs and failure to adjust financial costs to generate economic costs. Generalise ability was hampered by authors not reporting quantities and prices of resources separately and not examining the sensitivity of their results to variations in underlying assumptions. Conclusion: The observed shortcomings have arisen despite the abundance of literature and Guidelines on costing of health care interventions. This paper provides ITN specific recommendations in the hope that these will help to standardize future cost estimates.

 Using activity-based costing to reengineer the reverse logistics channel Author(s): Thomas J. Goldsby, David J. Closs Journal: International Journal of Physical Distribution & Logistics Management

Abstract: Activity-based costing (ABC) is a tool used by managers to more closely approximate the ―true costs‖ of operations. The application of ABC in logistics is more commonplace today than just a few years ago, though still far short of universal. Sound tracking of operational costs is critical when pursuing the logistics objective of providing desired customer service at the lowest total cost. This research illustrates an actual application of ABC to reverse logistics activities performed across supply chain organizations. More specifically, a case study of a Michigan beverage distributor and retailer that collect empty beverage containers for recycling purposes is presented. The case study demonstrates the ABC application in


detail and discusses the re-engineering of supply chain-wide processes resulting from the analysis.

 Lessons from Cost-Effectiveness Research for United States Public Health Policy Scott D. Grosse,1 Steven M. Teutsch,2 and Anne C. Haddix3 Abstract The application of cost-effectiveness analysis to health care has been the subject of previous reviews. We address the use of economic evaluation methods in public health, including case studies of population- level policies, e.g., environmental regulations, injury prevention, tobacco control, folic acid fortification, and blood product safety, and the public health promotion of clinical preventive services, e.g., newborn screening, cancer screening, and childhood immunizations. We review the methods used in cost-effectiveness analysis, the implications for cost-effectiveness findings, and the extent to which economic studies have influenced policy and program decisions. We discuss reasons for the relatively limited impact to date of economic evaluation in public health. Finally, we address the vexing question of how to decide which interventions are cost effective and worthy of funding. Policy makers have funded certain interventions with rather high cost-effectiveness ratios, notably nucleic acid testing for blood product safety. Cost-effectiveness estimates are a decision aid, not a decision rule.


 An Emperical Analysis Of The Relation Between The Board Of Director composition And Financial Statement Fraud Mark. S. Beasley North Carolina State University Abstract This study empirically tests the prediction that the inclusion of larger proportions of outside members on the board of directors significantly reduces the likelihood of financial statement fraud. Results from logit regression analysis of 75 fraud and 75 no- fraud firms indicate that no- fraud firms have boards with significantly higher percentages of outside members than fraud firms; however, the presence of an audit committee does not significantly affect the likelihood of financial statement fraud. Additio nally, as outside director ownership in the firm and outside director tenure on the board increase, and as the number of outside directorships in other firms held by outside director‘s decreases, the likelihood of financial statement fraud decreases.

 A cost-benefit analysis of electronic medical records in primary care The American Journal of Medicine, Volume 114, Issue 5, Pages 397-403 Abstract Purpose Electronic medical record systems improve the quality of patient care and decrease medical errors, but their financial effects have not been as well documented. The purpose of this study was to estimate the net financial benefit or cost of implementing electronic medical record systems in primary care. Methods


We performed a cost-benefit study to analyze the financial effects of electronic medical record systems in ambulatory primary care settings from the perspective of the health care organization. Data were obtained from studies at our institution and from the published literature. The reference strategy for comparisons was the traditional paper-based medical record. The primary outcome measure was the net financial benefit or cost per primary care physician for a 5-year period. Results The estimated net benefit from using an electronic medical record for a 5-year period was $86,400 per provider. Benefits accrue primarily from savings in drug expenditures, improved utilization of radiology tests, better capture of charges, and decreased billing errors. In oneway sensitivity analyses, the model was most sensitive to the proportion of patients whose care was capitates; the net benefit varied from a low of $8400 to a high of $140,100. A fiveway sensitivity analysis with the most pessimistic and optimistic assumptions showed results ranging from a $2300 net cost to a $330,900 net benefit.

 Ionic activators in the electrolytic production of hydrogen—cost reductionanalysis of the cathode Laboratory of Physical Chemistry, Vinca Institute of Nuclear Sciences, Belgrade , Yugoslavia Faculty of Physical Chemistry, University of Belgrade, Belgrade , Yugoslavia Abstract As recent technology progress makes hydrogen a realistic long-term energy option with little or no pollution, development of new methods for its production and improvement of conventional technology is important. In spite of the fact that, among overall world technologies for hydrogen production today, only 4% is produced by electrolysis, this is the most promising method in the future as a consequence of the high existing water supply. The limitation factor for its use on the large scale is well known-high energy consumption.


In this work, methods for increasing efficiency and lowering the energy consumption in the electrolytic hydrogen production are presented. The stability of ionic activators, as an indicator of capital cost, are also shown, as are an analysis of composition, structure and morphology characteristic of cathode, formed in the presence as ionic activators.

 Accounting For Financial Analysis:Dr. J.D. Aggarwal, professor of Finance, Founder, Chairman and Director of Indian Institute of Finance and Chief Editor of Finance India. Abstract It is one of the book were we can find maximum for getting deep insight in finance. The book is written by such a person who requires no introduction in the field of finance. The provide deep knowledge starting from basic about analysis of financial statement objective for assessing the health of an company its advantage and disadvantages. The book provides knowledge about how to read a balance sheet different format and requirement by company to prepare according to law requirement. It also tells about essential tools and techniques requirement for analysis of financial statement.  Economic Decision Making:Dr. J.D. Aggarwal, professor of Finance, Founder, Chairman and Director of Indian Institute of Finance and Chief Editor of Finance India. Abstract:Again a deep research done by novel laureates Dr. J. D. Aggarwal which provide knowledge about the usefulness of Economics in Finance. The book deals with tools and techniques that a economist can use for assessing the economic condition of any country and the business group of that country. its


Again the economic theories give by the author is very use full in making decision and arriving at any conclusion. Last but not the least the economic theories like utility theory, totalitarian theory and many more which are very useful in decision making.





Research methodology:-

The system of collecting data for research projects is known as research methodology. The data may be collected for either theoretical or practical research for example management research may be strategically conceptualized along with operational planning methods and change management .Some important factors in research methodology include validity of research data, Ethics and the reliability of measures most of your work is finished by the time you finish the analysis of our data.

Formulating of research questions along with sampling weather probable or non probable is followed by measurement that includes surveys and scaling. This is followed by research design, which may be either experimental or quasi-experimental. The last two stages are data analysis and finally writing the research paper, which is organised carefully into graphs and tables so that only important relevant data is shown. Research Methodology Help

A dissertation's methodology consists of four parts: participants, instruments, procedures, and data analysis. Even though these components tend to be similar in structure and format, many students experience frustration during this important process. Our consultants can help you construct a proper research methodology section. How to Choose a Qualitative or Quantitative Research Methodology

There are a number of issues to consider when debating between a qualitative and quantitative research design. Neither methodology is simply "better" or "easier" than the other. Our staff can help you decide between these two research methodologies and put you one step closer toward completing a successful research project. Qualitative Research Methodology & Data Analysis Services

We provide a range of qualitative research methodology and data analysis services to


graduate students at every phase of the dissertation and thesis process. We can help you choose a qualitative approach and analyze your qualitative data through such procedures as grounded theory, domain analysis, and analytic induction.


Sources of Data collection:There are primarily two of collection of data that are Primary source and secondary source. Primary research entails the use of immediate data in determining the survival of the market. The popular ways to collect primary data consist of surveys, interviews and focus groups, which shows that direct relationship between potential customers and the companies. Primary data is accumulated by the researcher particularly to meet up the research objective of the subsisting project. Two strategies are commonly employed when researchers gather primary data: randomizing and blinding. Both of these strategies serve to keep the results objective. Both involve limiting the information given either to the researcher or the subject about which test group to which a subject has been assigned. The researcher is prevented from imposing her bias on the data so she may be a more careful observer Once the primary data has been gathered, analysts study it using other research methods. They look for relationships between factors that may suggest the designs for new studies. When they combine the primary data from more than one study, they are using integrative methods. Their findings present secondary data, a synthesis of several streams of primary data. There are many methods of collecting primary data and the main methods include: questionnaires interviews focus group interviews observation case-studies diaries critical incidents



Advantage of Primary source of Data:The first advantage of primary data is that it can be collected from a number of ways like interviews telephone surveys, focus groups etc. Secondly, it can be also collected across the national borders through emails and posts. Thirdly, it can include a large population and wide geographical coverage. Fourthly, it is relatively cheap and no prior arrangements are required. Moreover, primary data is current and it can better give a realistic view to the researcher about the topic under consideration. Disadvantage of Primary source of Data:The major disadvantage of primary data is that it has design problems like how to design the surveys. The questions must be simple to design a general lingo (understandable). Some respondents do not give timely responses. Sometimes, the respondents may give fake, socially acceptable and sweet answers and try to cover up the realities. In some primary data collection methods there is no control over the data collection. Incomplete questionnaire always give a negative impact on research. Sources of primary data where the employees of Atlas cycle ltd. During my 2 month project, I continuously keep on rotating myself in different department of the company . During this period data was collected from AGM finance , DGM sales , DGM cost and various employees of sales, purchase and account department. Secondary sources of Data:Secondary data is data that is neither collected directly by the user nor specifically for the user, often under conditions not known to the user. Examples include Government reports. Secondary information has already been collected for some other purposes. It may be available from internal sources, or may have been collected and published by another organization. Secondary data is cheaper and more quickly available than primary data, but likely to need processing before it is useful.


Secondary data analysis saves time that would otherwise be spent collecting data, and often provides a larger and higher-quality database than would be feasible for any individual researcher to collect. For analysts of social and economic change, secondary data is usually essential, since it is impossible to conduct a new survey that can adequately capture past change. Sources of secondary data:Published report Government statistics Scientific and technical Abstracts Company's financial statements Banks reports web sites journals Magazines Challenges of secondary data analysis:There are several things to take into consideration when using pre-existing data. Secondary data does not permit the progression from formulating a research question to designing methods to answer that question. It is also not feasible for a secondary data analyst to engage in the habitual process of making observations and developing concepts. These limitations hinder the ability of the researcher to focus on the original research question. Data quality is always a concern because its source may not be trusted. Even data from official records may be bad because the data is only as good as the records themselves. There are six questions that a secondary analyst should be able to answer about the data they wish to analyze. 1. What were the agency's or researcher's goals when collecting the data? 2. What data was collected and what is it supposed to measure? 3. When was the data collected?


4. What methods were used? Who was responsible and are they available for questions? 5. How is the data organized? 6. What information is known about the success of that data collection? How consistent is the data with data from other sources?

Advantage of secondary data:Secondary data is the most easily accessible data and saves the researcher the trouble of going through the tiresome process of collecting data personally. · Secondary data is readily available at cheap rates and is usually quite inexpensive. · Collecting secondary data and analysing it saves time and effort. · Secondary data is unobtrusive. It is easily available and the researcher can get it without much struggle. · Secondary data avoids data collection problems and it provides a basis for comparison. Disadvantage of secondary data:Since many surveys deal with national populations, if you are interested in studying a well-defined minority subgroup you will have a difficult time finding relevant data. Secondary analysis can be used in irresponsible ways. If variables aren't exactly those you want, data can be manipulated and transformed in a way that might lessen the validity of the original research. Much research, particularly of large samples, can involve large data files and difficult statistical packages.


Tools and techniques used in the analysis are:  Comparison of financial statement for 2 years.  Comparison between cost sheets of 2 year.  Ratio analysis Analyses of financial statements are the end product of the accounting process. Last but not the least leg of the accounting process is summarising the accounting data in the form balance sheet, income statement and change in the financial position which help in analysis and interpretation of the accounting data. Financial statement normally includes Balance sheet and profit and loss account and cash flow statement. Balance sheet:It gives the statement of shareholder equity ( paid-up share capital and reserve and surplus) , loans , current liabilities and provisions, investment , loan and advances, and currnet asset. The format of the balance sheet is prescribed in schedule VI of the companies Act. Profit and loss account:Income State ment:An income statement reports the organization‘s financial performance over a specified period of time. It summarizes all revenue earned and expenses incurred during a specified accounting period. An institution prepares an income statement so that it can determine its net profit or loss (the difference between revenue and expenses).


Revenue Expenses Refers to money earned by an organization for goods sold and services rendered during an accounting period, including • Interest earned on loans to clients • Fees earned on loans to clients • Interest earned on deposits with a bank, etc. Represent costs incurred for goods and services used in the process of earning revenue. Direct expenses for an MFI include • Financial costs, • Administrative expenses, and • Loan loss provisions. An income statement • Relates to a balance sheet through the transfer of cash donations and net profit (loss) as well as depreciation and in the relationship between the loan loss provision, and the reserve. • Uses a portfolio report‘s historical default rates (and the current reserve) to establish the Loan Loss Provision. • Relates to a cash flow statement through the net profit/loss as a starting point on the cash flow (indirect method). An income statement is a measure of financial performance between two points in time. It lists revenue, gain expense and loses over a period of time . The profit is shown before and after tax by making due adjustment for prior period transaction. The net profit so arrived at is used for appropriation in various reserve mandates by the law or decides upon by the Board of Director.


Cash flow statement:It indicates inflows and outflows of cash during an accounting period. A cash flow statement is required to be published pursuant to clause 32 of the listing agreement and should be based on and be in agreement with corresponding profit and loss Account and balance sheet of company. A cash flow statement • Classifies the cash flows into operating, investing and financing activities. ♦ Operating activities: services provided (income-earning activities). ♦ Investing activities: expenditures that have been made for resources intended to generate future income and cash flows. ♦ financing activities: resources obtained from and resources returned to the owners, resources obtained through borrowings (short-term or long-term) as well as donor funds. • Can use either ♦ The direct method, by which major classes of gross cash receipts and gross cash payments are shown to arrive at net cash flow (recommended by IAS) ♦ The indirect method, works back from net profit or loss, adding or deducting noncash transactions, deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows to arrive at net cash flow.

Concept of financial analysis:-


Financial analysis forms an important part of business analysis, which is precede by accounting analysis and followed by prospective analysis. It also involves how analytical tools and techniques such as Ratio, cash flow measure can be used to evaluate the operation, financial and investment performance of a business enterprise with a focus effectiveness and efficiency in the conduct of business affair by the management. To use financial analysis to improve institution‘s sustainability, by 1. Identifying the components, purpose, relationships, and importance of the main Financial statement; 2. Learning the formats of income statements and balance sheets to easily separate the Effect of donor funds; 3. Analyzing financial statements to monitor profitability, efficiency, and portfolio quality; 4. Adjusting costs for inflation, subsidized cost of funds, and in-kind donations; and 5. Identifying critical factors for moving toward financial sustainability RATIO ANALYSIS:Ratio Analysis uses a combination of financial or operating data from a company or industry to provide a basis of comparison. Each ratio measures a unique relationship that may impact others. It involves the method of calculating and interpreting financial ratio in order to assess the strengths and weakness underlying the performance of an enterprise. In order to calculate a ratio a relevant relationship between two numbers of financial statements is established and the result of the same is interpreted in order to derive meaningful conclusion. Several of the most commonly used ratios are grouped into categories, including: Liquidity Ratios measure how easily a firm can meet its obligations.


Profitability Ratios indicate the earnings potential of a company. Asset Management Ratios measure how efficiently a company uses its assets. Debt Management Ratios indicate financial leverage and how well a company can handle that debt. Dividend/Market Value Ratios measure earnings for investors. Liquidity Ratios provide ability to meet short – term obligation as they become due. Liquid asset are those which can be converted in cash. Quick Ratio Curre nt Ratio Curre nt ratio:-The Current Ratio measures a company's ability to meet short-term obligations (under a year) by using current assets Given the current assets and current liabilities from a company's balance sheet: Curre nt Ratio = (Current Assets) / (Current Liabilities) Generally, the higher the ratio, the stronger the liquidity position of the company and the more easily it can meet its obligations.

Quick ratio:The Current Ratio measures a company's ability to meet short-term obligations (under a year) by using current assets Given the current assets and current liabilities from a company's balance sheet: Curre nt Ratio = (Current Assets) / (Current Lia bilities)


Generally, the higher the ratio, the stronger the liquidity position of the company and the more easily it can meet its obligations.

Profitability Ratios indicate the earnings and profitability potential of a company. Basic Earning Powe r Ratio Earnings Per Share Gross Profit Ratio Profit Margin Return on Assets Return on Equity

Basic Earning Powe r Ratio The Basic Earning Power Ratio isolates earnings from uses of leverage Given Earnings before Interest and Taxes (EBIT) from a company's income statement and total asset from the balance sheet. EBIT = Net Income + Interest + Taxes Basic Earning Powe r = EBIT / (Total Assets) Generally, the higher the ratio, the more raw earnings potential of the company. Earnings Per Share Earnings Per Share (EPS) indicates how much profit the company earns for each share of common stock outstanding. Given net income from a company's income statement and the number of shares outstanding: Earnings Per Share = (Net Income) / (Number of shares of common stock outstanding)


Generally, the higher the ratio, the more potential value for the stock price. Gross Profit Ratio The Gross Profit Ratio indicates how much of each sales dollar is available to pay expenses. Given sales and cost of goods sold from a company's income statement: Gross Profit Ratio = (Sales - Cost of Goods Sold) / (Sales) Generally, the higher the ratio, the more from easily expenses can be covered from sales. Profit Margin The Profit Margin Ratio indicates how profitable a company's sales are. Given net income and sales from a company's income statement: Profit Margin Ratio = (Net Income) / (Sales) Generally, the higher the ratio, the more profit earned from each dollar in sales. Return on Assets Return on Assets (ROA) shows after-tax profit as a percentage of total assets. Given net income from a company's income statement and total assets from the balance sheet: Return on Assets = (Net Income) / (Total Assets) Generally, the higher the ratio, the greater the profit from corporate assets. Return on Equity


The Return on Equity Ratio (ROE) relates profitability to ownership by showing income as a percentage of equity. Given net income from a company's income statement and total assets from the balance sheet: Return on Equity Ratio = (Net Income) / Equity Generally, the higher the ROE, the more profit is earned for owners of the company.

Asset Management Ratios or Activity Ratio:- It help in commenting on the efficiency of the firm in managing its assets. The speed with which assets are converted into sales is captured by activity ratio. Days Sales Outstanding (DSO) Fixed Asset Turnove r (FAT) Ratio Total Assets Turnover Ratio

Days Sales Outstanding (DSO) Days Sales Outstanding (DSO) indicates how well receivables are managed. Given the sales from a company's income statement and accounts receivable from the balance sheet: DSO = (Accounts Receivable) / (Average sales per day) Generally, the higher the ratio, the more potential for problems in getting paid. Fixed Asset Turnove r (FAT) Ratio The Fixed Asset Turnover Ratio measures how fixed assets are used to generate sales.


Given sales from a company's income statement and net fixed assets from the balance sheet: Fixed Asset Turnove r Ratio = Sales / (Net Fixed Assets) Generally, the higher the ratio, the more sales the company is able to generate from its fixed assets, and thus the more efficient the firm's production. Total Assets Turnover Ratio The Total Assets Turnover Ratio compares sales to total assets. Given sales from a company's income statement and total assets from the balance sheet: Total Asset Turnover = Sales / (Total Assets) Generally, the higher the ratio, the more sales are achieved from the company's assets. Debt Management Ratios or Solvency ratio:Long tern creditors are more concerned

with the firms long term financial strength . a firm should have a strong short term and long term financial position. Debt Ratio The Debt Ratio indicates how much of the assets are provided through debt. Given the total debt and total assets from a company's balance sheet: Debt Ratio = (Total Debt) / (Total Assets) Generally, the higher the ratio, the greater the liquidity (ability to meet current obligations using liquid assets). Debt to Equity Ratio The Debt to Equity Ratio indicates how much financing is provided through debt as compared to equity. Given the total debt and total assets from a company's balance sheet, use the Debt Ratio:


Debt Ratio = (Total Debt) / (Total Assets) Debt to Equity Ratio = (Debt Ratio) / (1 - Debt Ratio) Generally, the higher the ratio, the more financial leverage is employed by the firm, and the higher the financial risk.

EBITDA Coverage The EBITDA Coverage Ratio shows if earnings are able to satisfy all financing obligations, including leases and principle payments. Given the EBITDA and lease paid from the Income Statement and the interest and principle paid from the Statement of Cash Flow: EBITDA Coverage = (EBITDA + Lease Paid) / (Interest + Principle Paid + Lease Paid) Generally, the higher the ratio, the more secure the lender's position. A ratio less than 1.0 indicates an inability to meet financial obligations out of operating cash flow. TIE Ratio or INTEREST COVERAGE RATIO The Times Interest Earned Ratio shows the ability to service interest payments from earnings. This ratio focuses more narrowly than the EBITDA Coverage Ratio which considers other obligations than interest which must also be paid from earnings. Given the Earnings Before Interest and Taxes (EBIT) and Interest from the Income Statement: The Times Interest Earned Ratio = EBIT / Interest Generally, the higher the ratio, the more easily interest obligations can be met out of earnings. A ratio of less than 1.0 means earnings are insufficient to meet the interest payments.


Advantage of Ratio Analysis:There are various groups of people who are interested in analysis of financial position of a company. They use the ratio analysis to workout a particular financial characteristic of the company in which they are interested. Ratio analysis helps the various groups in the following manner: 1. To workout the profitability: Accounting ratio help to measure the profitability of the business by calculating the various profitability ratios. It helps the management to know about the earning capacity of the business concern. In this way profitability ratios show the actual performance of the business. 2. To workout the solvency: With the help of solvency ratios, solvency of the company can be measured. These ratios show the relationship between the liabilities and assets. In case external liabilities are more than that of the assets of the company, it shows the unsound position of the business. In this case the business has to make it possible to repay its loans. 3. Helpful in analysis of financial state ment: Ratio analysis help the outsiders just like creditors, shareholders, debenture-holders, bankers to know about the profitability and ability of the company to pay them interest and dividend etc. 4. Helpful in comparative analysis of the performance: With the help of ratio analysis a company may have comparative study of its performance to the previous years. In this way company comes to know about its weak point and be able to improve them. 5. To simplify the accounting information: Accounting ratios are very useful as they briefly summarise the result of detailed and complicated computations. 6. To workout the operating efficie ncy: Ratio analysis helps to workout the operating efficiency of the company with the help of various turnover ratios. All turnover ratios are worked out to evaluate the performance of the business in utilising the resources.


7. To workout s hort-term financial position: Ratio analysis helps to workout the short-term financial position of the company with the help of liquidity ratios. In case short-term financial position is not healthy efforts are made to improve it. 8. Helpful for forecasting purposes: Accounting ratios indicate the trend of the business. The trend is useful for estimating future. With the help of previous years‘ ratios, estimates for future can be made. In this way these ratios provide the basis for preparing budgets and also determine future line of action. Limitations of Ratio Analysis In spite of many advantages, there are certain limitations of the ratio analysis techniques and they should be kept in mind while using them in interpreting financial statements. The following are the main limitations of accounting ratios: 1. Limited Comparability: Different firms apply different accounting policies. Therefore the ratio of one firm can not always be compared with the ratio of other firm. Some firms may value the closing stock on LIFO basis while some other firms may value on FIFO basis. Similarly there may be difference in providing depreciation of fixed assets or certain of provision for doubtful debts etc. 2. False Results: Accounting ratios are based on data drawn from accounting records. In case that data is correct, then only the ratios will be correct. For example, valuation of stock is based on very high price, the profits of the concern will be inflated and it will indicate a wrong financial position. The data therefore must be absolutely correct. 3. Effect of Price Level Changes: Price level changes often make the comparison of figures difficult over a period of time. Changes in price affects the cost of production, sales and also the value of assets. Therefore, it is necessary to make proper adjustment for price- level changes before any comparison. 4. Qualitative factors are ignored: Ratio analysis is a technique of quantitative analysis and thus, ignores qualitative factors, which may be important in decision


making. For example, average collection period may be equal to standard credit period, but some debtors may be in the list of doubtful debts, which is not disclosed by ratio analysis. 5. Effect of window-dressing: In order to cover up their bad financial position some companies resort to window dressing. They may record the acco unting data according to the convenience to show the financial position of the company in a better way. 6. Costly Technique : Ratio analysis is a costly technique and can be used by big business houses. Small business units are not able to afford it. 7. Misleading Results: In the absence of absolute data, the result may be misleading. For example, the gross profit of two firms is 25%. Whereas the profit earned by one is just Rs. 5,000 and sales are Rs. 20,000 and profit earned by the other one is Rs. 10,00,000 and sales are Rs. 40,00,000. Even the profitability of the two firms is same but the magnitude of their business is quite different. 8. Absence of standard university accepted te rminology: There are no standard ratios, which are universally accepted for comparison purposes. As such, the significance of ratio analysis technique is reduced.

SWOT ANALYSIS:The third tool used for completion of the project is swot analysis. Where we try to analyze the strength, weakness, opportunity and threat associated with compa ny. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. SWOT Analysis: Relevant Factors A list of general factors which affect Strengths, Weaknesses, Opportunities and Threats is a great thinking aid that allows you to better analyze the complete range of variables that


affect your enterprise. Pertinent Factors can be categorized as Internal Factors and External Factors for the purposes of SWOT planning.

Inte rnal Factors These factors are those that affect your Strengths and Weaknesses and are within or a part of your enterprise. Internal Factors usually imply organizational charac teristics and can include: • General: People, Process, Technology, Information, Ideas, Beliefs, Values, Experience • Departmental: Sales, Marketing, Finance, HR, IT, Administration, Operations • Financial: Costs, Assets, Liabilities, Capital, Leverage, Liquidity, Expenses, Value, Profitability, Revenue, Debt, Risk • Organizational: Management, Team, Morale, Structure, Location, Industry, Business Model, Partners, Accreditations • Operational: Efficiencies, Time, Cost, Manpower, Machines, Automated, Manual • Marketing: Product, Price, Place, Promotion What other ways are there of looking at your organization and breaking it up into a series of related parts and concepts? As you can see, SWOT Analysis brings up the more basic question of how to define the internal and external factors that shape business. Any methodology used to define your business and business environment can then provide points of analysis for a SWOT exercise.

External Factors These factors within a SWOT Analysis are those that affect Opportunities and Threats and are external to your organization. External factors usually imply environmental or market conditions and can include:


• Macroenvironme nt: social, economic, legal, government, technology, environment • Market: customer, competition, trends

Analyzing Factors The purpose behind looking at internal and external factors affecting your business is a thinking exercise. The factors listed above are merely definitions to get your started and are not endpoints that are graded from 1-10 to establish Strengths, Weaknesses, Opportunities and Threats. Each should be elaborated on as appropriate for your situation. What other ways can you find to categorize the various factors that play into your own SWOT Analysis? Almost any model for analysis internal and external business conditions can be used to define specific factors that will come into play in a SWOT exercise. Whichever thinking model you are comfortable with and use should also be applied to SWOT planning. There is no end to how you can categorize the various factor s that affect your decisions in obtaining your objective. Each set of factors is based on a specific perspective of looking at businesses and so you may find some overlap and interchange when looking at and analyzing the factors pertaining to your specific enterprise in various ways. Thinking about factors is a great way to expand your analysis of any one Strength, Weakness, Opportunity or Threat to ensure that you cover the full range of variables affecting your planning. For example, if a specific organizational process is deemed ―time intensive‖ and this is seen as a weakness, then what about other process delays? Similarly, the same Weakness can be expanded upon to look at the ―people‖ factor within your organization as a whole.


Strengths and weaknesses are internal factors that create value or destroy value. They can include assets, skills, or resources that a company has at its disposal, compared to its competitors. They can be measured using internal assessments or external benchmarking.

Opportunities and threats are external factors that create value or destroy value. A company cannot control them. But they emerge from either the competitive dynamics of the industry/market or from demographic, economic, political, technical, social, legal or cultural factors (PEST). Advantage and Disadvantage of Swot analysis:The biggest advantages of SWOT analysis are that it is simple and only costs time to do. It can help generate new ideas as to how a company can use a particular strength to defend against threats in the market. If a company is aware of the potentia l threats then it can have responses and plans ready to counteract them when they happen. There are also disadvantages of SWOT analysis. A typical SWOT analysis is a usually a simple list and not critically presented. If a company is thinking about compiling lists it may not be focused sufficiently on how to achieve its objectives. Taking a list approach can also result in items not being prioritised. For example, a long list of weaknesses may appear to be 'cancelled out' by a longer list of strengths, regardless of how significant those weaknesses are.




ANALYSIS:It is one of the important part of my project report. It contains study of financial statement like Balance sheet, profit and loss account and cash flow statement. As , I was also concern with the cost reduction techniques implemented by the company , so my analysis part also consist of cost sheet analysis. To find the financial health of company the use of Ratio analysis will be implemented. Which will help in finding the current position of company in discharging its obligation and how company take care of its shareholders? The analysis will consist of data of four year but major comparison will be done between data of two years that are 2007-08. Also the study will consist of graphs which will be helpful for every person to understand the finding and conclusion of my project.


Balance sheet

(Rs crore)

Mar ' 08 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation 141.54 3.90 64.37 79.69 5.49 200.34 111.90 3.25

Mar ' 07

Mar ' 06

Mar ' 05

3.25 115.41

3.25 63.46

3.25 64.21

65.80 5.48 189.94

59.51 9.96 136.18

63.39 6.51 137.37

121.70 3.90 58.85

94.04 3.90 56.74

90.18 3.90 52.88


Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances Less : current liabilities & -


58.96 3.49

33.40 3.57 11.30

33.40 16.40







provisions Total net current assets

183.49 103.87 -

173.37 110.08 -

134.34 87.90 -

109.43 87.56 -

Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity shares outstanding (Lacs)





23.19 3.11 32.52

17.41 4.15 32.52

11.30 3.43 32.52

15.40 3.47 32.52


ANALISYS OF BALANCE SHEET :Company have not issued any new share since 2005. It‘s maintaining the same amount of 3.25 crs. And also the company emphasis on maintaining a good amount of reserve and

surplus but in year 2006-07 the amount increased many folds the reason was company has sold its fixed asset in Bawal which include Land and Building which provided the profit of Rs. 100.64 crs. Till date company has not issued any preference share to public. Coming to Loan Funds we can observe that there was decrease in secured loan in the year 2005-06 comparing to 2004-05 but again in the subsequent year company has availed secured loan and the trend remain the same in current financial year also. Similarly in unsecured loan section the trend is opposite of secured loan the company has raised funds in year 2005-06 but repaid in subsequent year. Coming to fixed asset the company is continuously expanding its business and acquiring fixed asset in terms of land and building and other assets also. Despite of sale of Land and Building in the year 2006-07 company has acquired some fixed asset which can be clearly observed. Coming to the calculation of working capital requirement which consist of net of current asset. There is an increase in current asset year after year starting from 2004-05 and the trend remain same in the subsequent year there was a massive increase in current asse t in the year 2006-07 the year also observed the increase in sales. In the section of current liability the same trend can be observed there was also one reason for this that was economic boom in this period which also provided boost to cycle industries.



2008 Sources of Funds Shareholder funds Issued share capital Reserve and Surplus Loan Funds Secured Loans Unsecured Loans 79,68,80,503 5,49,30,000 85,18,10,503 2,04,23,27,443 Application of Funds Fixed Assets Investments 77,16,89,489 23,19,37,226 3,25,,19,190 1,15,79,97,750 1,19,05,16,750



3,25,,19,190 1,19,30,77,890 1,22,55,97,080 65,79,80,642 5,48,43,000 71,28,23,642 1,93,84,20,722 66,34,68,632 17,41,49,091 2,83,45,40,474 1,71,64,37,475 1,11,81,02,999 1,73,00,000 1,93,84,20,722

0 -2.940305934 -2.862305286 21.11002241 0.158634648 19.49807117 5.360380222 16.31137506 33.18313904 1.377262535 3.154285069 -1.350704453 271.6763006 5.360380222

Current Asset and Loans 2,87,35,79,538 Less Current Liabilities And 1,77,05,78,806 Prov. Net current Assets 1,10,30,00,732 Less deferred tax Liability. 6,43,00,000 2,04,23,27,443


Comparing the balance sheet of two year we can observe that sources of fund for the company are decreasing that of from the last year that is 2006-07. Issued share capital for the company is same over the year the decrease is in the Reserve and surplus. Capital reserve is same as it was in the year 2006-07 but revenue reserve is decreasing and also surplus carried forward is decreasing. Coming to secured loan Company has raised term loan by the way of Deposit and Bank loan it was mainly used to acquire assets as in the application of fund the company has acquired fixed asset which include machine like Air blower replacement of furnaces and some expenses under construction and installation. Coming to Investment Company invest her funds under two heads that are Long term investment and Current investment. In the year 2007-08 company has invested in Central bank of India by the way of Equity fund and in Current Investment Company had invested in mutual funds of different company. Coming to Current assets there is increase in stock and it was due to increase in production and also in stock increase was mainly in production materials. Despite of increase in sales volume the company seems to have changed their credit policy due to which there is reduction in debtors. In the year 2007-08 company has recovered cash and loans from and also has paid advance taxes due to which there is increase in Loan and advance. The increase in loan and advances were utilised to acquire fixed asset and also there is increase in investment which can be clearly observed. It was the period when economy was on boom and stock market was soaring like anything company utilised the market to grow its funds and invested heavily. In current liabilities there is increase in it and it is because of increase in creditors and unclaimed dividend and remaining all items are same as they were last year. Now due to all this effects there is overall growth in balance sheet 5.360380222 % of comparing that of from last year.



INCOME STATMENT Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Income: Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses Administrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT 452.71 9.08 33.66 45.07 20.27 560.80 15.87 3.77 19.64 9.48 6.41 3.75 2.42 1.34 401.44 10.79 30.49 44.86 31.89 519.47 -27.48 3.91 -23.57 7.03 4.51 -35.11 12.17 -47.28 345.78 12.28 27.37 37.39 18.41 441.24 11.40 2.52 13.92 7.65 3.97 2.30 1.20 1.10 326.73 15.44 27.04 33.64 17.41 420.26 10.10 3.31 13.40 5.64 3.79 3.97 1.30 2.67 576.66 491.99 452.63 430.36


Non-recurring items Other non cash adjustments Reported net profit Earnings before appropriation Equity dividend Preference dividend Dividend tax Retained earnings

0.67 2.00 5.16 1.46 0.25 3.45

100.94 53.66 54.87 1.46 0.25 53.16

-0.19 0.91 3.23 1.46 0.21 1.56

-0.40 2.27 4.48 1.46 0.21 2.81

Annual results in brief

(Rs crore)

Mar ' 08 Sales Operating profit Interest Gross profit 551.89 10.21 8.05 8.93

Mar ' 07 483.91 17.15 6.70 81.46

Mar ' 06 435.36 7.81 6.72 5.73

Mar ' 05 407.22 8.89 6.01 7.28


Analysis of Income State ment:Coming to analysis of Profit and loss a/c we can clearly observer that sales for the company is increasing year by year by some margin but in the year 2007-08 sales of company has increased by great margin. During the current years cycle has seen a great demand in its product the reasons are like introduction of innovative and a great variety of product. At the same time government policies which are favourable for this industry had also helped a lot to boost the production of cycle. We can also observe that as manufacturing capacity is increasing the manufacturing cost is decreasing it is due to reduction in fixed cost as production volume is increasing. To support this view we can also observe that company is continuously increasing its human resources year by year. Coming to operating profit which has shown a drastic change in the year 2006-07 which even gone to negative (-27.48 cr) the reason are. There are three places were Atlas carry on its production activity. One is in Sahibabad, another in Sonepat and other is Malanpur. Now two of its firm is currently running under losses that are Sonepat and Malanpur and only Sahibabad is one that is making profit so due to this company is having negative operating profit another reason for the same was increase in consumption in materials as well as increase in direct taxes. And this is the reason why company is having negative profit after tax. Coming to profit for appropriation we can observe that in the year when company was having negative PAT it is showing maximum profit for appropriation the reason is that in this year company has sold off its Land and Building which was in Bawal and due to which company is showing 54.87cr of amount for appropriation. Company also follow a strong policy of paying dividend to its equity holders every year which can be clearly observed. And at the same time it also pays off its interest obligation.


Profit and Loss Account For The year 2006-07 and 2007-08

2008 INCOME Gross Trun Over Less Excise Sale Net Off Excise Less Rebate Net Sale Other Income 5,90,13,93,924 13,47,45,512 5,76,66,48,412 14,26,61,443 5,62,39,86,969 4,93,57,517 5,67,33,44,486 EXPENDITURE PBT before Extra ordinary Items Extra ordinary item Profit Before taxation Provision for taxation Profit after taxation profit brought forward Profit for appropriation Appropriation Proposed Dividend Dividend Tax General Reserve Surplus Carried Forward 1,46,33,635 24,86,986 1,20,00,000 2,25,24,434 5,62,45,93,185 4,87,51,301 45,60,820 4,41,90,481 2,41,50,000 2,00,40,481 3,16,04,574 5,16,45,055

2007 5,02,27,12,708 10,27,84,070 4,91,99,28,638 19,00,51,642 4,72,98,76,996 1,05,39,84,486 5,78,38,61,482 5,12,10,91,244 66,27,70,238 44,42,353 65,83,27,885 12,17,00,000 53,66,27,885 1,20,97,310 54,87,25,195

Growth/Decline% 17.49415639 31.09571551 17.21000113 -24.93543255 18.90345085 -95.3170547 -1.910782206 9.831926771 -92.64431349 2.666762412 -93.28746632 -80.15612161 -96.26547901 161.2529066 -90.58817502

1,46,33,635 24,86,986 5,00,00,00,000 3,16,04,574

0 0 -99.76 -28.73046161


Comparing the profit and loss account statement of 2 years of the company we can observe that there is massive increase in sales which was due to good economic condition and good government policies. The sales volume for the year 2007-08 increased by around 3 lakhs in quantity which was excluding bicycle component and steel tubes. Coming to the section of other income there is decrease in it and it is because of in the year 2006-07 company has sold its fixed asset which provided her huge abnormal cash inflow. Coming to expenditure section there is huge increase from the previous year and it is in material consumption but there is decrease in manufacturing, Personnel and Administrative expenses it is because of decrease in fixed cost. There is also increase in interest expenses from the previous year. Coming to profit after tax there is decrease by 92%. In previous year company has sold its fixed asset which consist of land and building due to which there was increase in profit after tax. Company has a provision of extra ordinary items which consist of legal charge. Due to this there was massive increase in profit for appropriation which can be clearly observed as there is fall of about 91% in it. There is no change in proposed dividend as we ll as dividend tax Company has transferred its profit to general reserve in the previous year which is much more than this year.



2006-07 Cash flow from operating activities PBT and extra ordinary items Adjustment for dep& write offs Operating profit before W.C change Adjustment for: change in trade and receivables change in inventories -16,04,24,442 -15,32,53,823 -1,34,44,153 -28,76,14,107 4,51,14,415 -24,24,99,692



11,20,24,053 6,40,77,953 17,61,02,006

138.94 42.03432096 172.61

12,86,98,935 -17,66,34,569 -13,12,84,968

180.22 -15.25 -876.52

change in loans and advances change in trade payable change in other current liabilities cash generated from operation Direct taxes paid /refund Net cash flow from operating Act.

34,76,36,220 89,156 -22,18,96,734 -6,83,59,654 -29,02,56,388

4,50,05,134 3,66,879 4,22,53,417 -9,66,31,328 -5,43,77,911

-87.05 311.5 119.04 -41.35 812.65


Cash flow from investing activities Purchase of fixed asset Proceeds on sale of fixed asset Dividend income purchase of investment proceed from sale of investment Net cash used in investing activities Cash flow from financing activities proceed from borrowings repayment of borrowings interest paid interest received Dividend paid Net cash used in financing act. change in cash & cash equivalent cash &cash equivalent as on 1.04.07 cash &cash equivalent as on 31.04.07 -4,79,38,254 -7,03,16,518 20,68,943 -1,58,00,845 -13,19,86,674 23,03,77,317 6,05,48,678 29,09,25,995 13,89,86,861 0 -9,48,10,458 1,25,69,253 -1,56,23,306 4,11,22,350 -22,89,34,869 29,09,25,995 6,19,91,126 34.8338352 507.5205068 -1.123604465 131.15 -199.3738759 380.4828191 -78.69178861 -37,19,87,407 1,07,85,36,049 78,05,702 -6,11,03,768 0 65,32,50,576 -25,77,69,087 8,87,66,572 1,11,11,342 -5,77,88,135 0 -21,56,79,308 30.7 -91.76 42.34 5.42 0 -133.0163211


ANALYSIS OF CASH FLOW STATEMENT:We can observer that Net profit before tax has increased by a great margin it was due to that in this period all three unit of Atlas has incurred profit where last year that is 2006-07 two of its unit were under loss. Coming to depreciation Part Company follows straight line method for its two units that are Sahibabad and Malanpur while written down value method for Sonepat unit. Coming to adjustment for working capital requirement we know that whenever there is increase in current asset from the previous year there is increase in requirement of working capital. In the given year stock is increasing where as debtors are decreasing the reason for the same is company realization process has become strong. Coming to Loan and Advances which has increased from previous year and due to which there is increase in current asset which ultimately increases the working capital requirement. Coming to current liabilities which is just reverse of current asset means when current liabilities increase the requirement for working capital decreases where as when it decreases the requirement increases. So in this creditors are increasing means need of working capital is reduced. We can also observe that other current liabilities are increasing compared to previous year which again reduces the need of working capital. Company has paid more Direct Taxes in the 2007-08 than in 2006-07 it is mainly due to higher sales and high income it was due to in this period the economy was on boom creating high demand for cycles. Coming to cash flow from Investing activities we can observe that company has acquired fixed asset this year also but less than that of previous year. Company invest huge amount of money in different types of investment like Mutual funds. Company has invested in 30 different types of mutual funds excluding other investment.


Now cash flow from financing activities in the period of 2007-08 company has borrowed loan from different bank which include EXIM and SIDBI. There is no repayment of loan during this year. Finally coming to cash and cash equivalent on 31.03.2008 which is reduced by a great margin from the previous year it was due to that company has sold its fixed asset in the year 2006-07 which provided her lot of cash flow but in the year 2007-08 company has made huge profit due to increase in sales volume.


COST STATEMENT ANAYLSIS: ―The statement of cost according to element wise is known as cost sheet‖. A cost benefit analysis is done to determine how well, or how poorly, a planned action will turn out. Although a cost benefit analysis can be used for almost anything, it is most commonly done on financial questions. Since the cost benefit analysis relies on the addition of positive factors and the subtraction of negative ones to determine a net result, it is also known as running the numbers. Cost Benefit Analysis A cost benefit analysis finds, quantifies, and adds all the positive factors. These are the benefits. Then it identifies, quantifies, and subtracts all the negatives, the costs. The difference between the two indicates whether the planned action is advisable The real trick to doing a cost benefit analysis well is making sure you include all the costs and all the benefits and properly quantify them. Should we hire an additional sales person or assign overtime? Is it a good idea to purchase the new stamping machine? Will we be better off putting our free cash flow into securities rather than investing in additional capital equipment? Each of these questions can be answered by doing a proper cost benefit analysis. Costing involves the following basic aspects (or 5 ‘A’s): -

1. Ascertain Costs: - Ascertain or collect all the expenses relating to a particular period. 2. Analyze Costs: - Analyze or classify the expenses under different heads of account such as material, Labour, Expenses etc. 3. Allocate Costs: - Allocate or charge in full the direct expenses or the specific costs such as Raw Materials, Labour to relevant product, contract or process.


4. Apportion Costs: - Apportion or distribute common expenses to each product, contract or process on suitable basis. 5. Absorb Costs: - Absorb the total expenses of a department over its products. So, in this final step, the individual cost of each product is determined. This product cost is then reported to management.

The preparation of cost sheet is one of the important and primary function of cost accounting. This can be described as the process of accumulating, measuring, analyzing, interpreting and reporting cost information that is both useful and relevant to the internal and external stakeholders of a business entity. External stakeholders are those who have a vested financial interest in a business or company. For example banks (loans), financial houses (mortgages), investors (investments), etc. Internal stakeholders are the business or company directors, managers, division heads, etc. One of the many benefits of cost accounting is that it turns data into information, knowledge and wisdom about a business entity‘s operations that is useful for: measuring performance reducing or managing costs determining the fees or prices for goods and services deciding to authorize, modify or discontinue a program or activity Another benefit is that information on the costs programs and activities may be used as a basis to estimate future costs in preparing and reviewing budget requests. Once budgets are approved and executed, cost information serves as a useful feedback on performance. Moreover, costs may be compared to known or assumed benefits to identify value-added and non-value added activities. Reliable information on the cost of programs and activities is


crucial for the effective management of a business entity‘s operations. Cost accounting is especially important for fulfilling the objective of assessing operational performance. The objective is to improve the efficiency and effectiveness of operations by furnishing program managers and others with timely and relevant cost-based performance information to allow for continuous improvement in delivering outputs and outcomes to stakeholders. Cost accounting has been with us since early times to help managers understand the costs of running a business. Modern cost accounting originated during the industrial revolution, when the complexities of running a large scale business led to the development of systems for recording and tracking costs to help business owners and managers make decisions. In the early industrial age, most of the costs incurred by a business were what modern accountants call "variable costs" because they varied directly with the amount of production. Money was spent on labour, raw materials, power to run a factory, etc. in direct proportion to production. Managers could simply total the variable costs for a product and use this as a rough guide for decision- making. Some costs tend to remain the same even during busy periods, unlike variable costs which rise and fall with volume of work. Over time, the importance of these "fixed costs" has become more important to managers. Examples of fixed costs include the depreciation of plant and equipment, and the cost of departments such as maintenance, tooling, production control, purchasing, quality control, storage and handling, plant supervision and engineering. In the early twentieth century, these costs were of little importance to most businesses. However, in the twenty- first century, these costs are often more important than the variable cost of a product, and allocating them to a broad range of products can lead to bad decision making. In modern accounting, costs are measured in accordance with Generally Accepted Accounting Principles (GAAP). In accordance to GAAP the principle is to record historical events and assign a monetary value to each event that has taken place. Costs are measured in units of currency by convention. Cost accounting could also be defined as a kind of


management accounting that translates the Supply Chain (the series of events in the production process that, in concert, result in a product) into financial values.

The statement consist of consist of Prime cost Work cost Cost of production Total cost Company do standard costing for evaluation purpose and also to measure the deviation. A standard cost is a planned cost for a unit of product or service rendered. Standard costs represent excellent target costs that should be obtained. The institute of Cost and Management Accountants (UK) defines standard cost as ―a predetermined cost, which is calculated from the management‘s standard of efficient operation and the relevant necessary expenditure. It may be used as a basis for price fixing and for cost control through varia nce analysis.‖ Advantages of Standard Costing

The advantages to be derived from a system costing will vary from one business to another. Much depends upon the degree of sophistication achieved and the acceptance by the management of utility of the system. Some of the advantages are as follows:-

Effective cost control: The most important advantage of standard costing is that it facilities the control of costs. Control is exercised by comparing actual performance with standards and taking action on the basis of variances so revealed.


Help in planning: Establishing standards is a very useful exercise in business planning with instills in the managements a habit of thinking in advance.

Provides incentives: The standards provide incentives and motivate to work with greater effort. Schemes may be formulated to reward those who achieve or surpass the standard. This increases efficiency and productivity.

Fixing prices and formulating policies: Standard costs are a valuable aid to management in determining prices and formulating production policies. For instance: - prices may be fixed by adding a standard margin of profit in standard cost. Similarly, standard costing furnishes cost estimates while planning production of new products. Disadvantages of Standard Costing

Standard costing system suffers from certain disadvantages. This may be because of lack of education and communication and resultant misunderstanding on the part of managerial staff. Some of the disadvantages are:-

 The system may not be appropriate to the business.

 The staff may not be capable of operating the system.


 A business may not be able to keep standards up-to-date. In other words, a business may not revise standards to keep pace with the frequent changes in manufacturing conditions. Firms may avoid revising standards as it is a costly affair.

 Inaccurate and unreliable standards cause misleading results and thus may not enjoy the confidence of the users of the system.

Setting of Standard Costs

The success of standard costing system depends on the reliability, accuracy and acceptance of the standards. Extreme care, therefore, must be taken to ensure that all factors have been considered in the establishment of standards. Standard costs are set for each element of cost i.e. direct materials, direct labour and overheads. These are described below:-

Setting standards for direct materials

 Material price standard.  Material quantity standard.


Material price standard This is a forecast of the average prices of materials during the future period. This standard is quite difficult to establish because prices are regulated more by the external factors than by the company management. The purchasing department notifies the standard prices after considering factors like:a) Purchase prices of recent orders. b) Prices specified in the long term contracts. c) Forecasts of the commodity price trends. Note: Provisions should be made for discounts, packing and delivery charges, etc.

Material quantity standard While setting quantity standard, the quality and size of material items to be consumed should be standardized. The standard is usually developed from material specifications prepared by the department of engineering of product design.

Setting standards for direct labour

 Labour rate standard.  Labour efficiency standard.

Labour rate standard


This is determined having regard to the current rates of pay and any anticipated variations. Sometimes an agreement between trade unions and employer covers a number of future

months or years. In such cases, the agreed rate should be adopted as the standard rate for the period. Where workers are paid on time basis, it is necessary to establish:a) The labour time standard for each operation. b) The wage rate of each grade of labour. c) The grades of labour to be employed. Note: (Type of operation will determine the grade of labour to be employed may be male or female, skilled, unskilled or semi-skilled, etc.) (Where workers are paid on piece basis, the standard cost will be a fixed rate per piece.)

Labour time (or efficiency) standard Standard time for labour should be scientifically determined by time and motion studies carried out in conjunction with a study to determine the most efficient method of working. Due allowance should be made for normal loss time like fatigue; idle time, tool setting, etc.

Setting standards of direct expenses Direct expenses are not very common, but if there are any direct expenses relating to the cost unit, standards for these too must to set. Setting these standards are usually quite simple as these may be based on past records adjusted according to anticipated changes therein.


Variance Analysis

The function of standards in cost accounting is to indicate variances between standard cost and actual cost which have been recorded. The institute of cost and management accounts defines variance as the difference between a standard cost and the comparable actual cost incurred during a period. Variance analysis can be defined as the process of computing the amount of and isolating the cause of variance between actual cost and standard cost. Variance analysis involves two phases:

 Computation of individual variances.  Determination of the cause of each variance

The main purpose behind this analysis is to reconcile the cost statement with financial statement and find out the change in cost of the one of the profitable brand manufactured by the atlas cycle ltd. On the basis of this analysis we will find out the various cost reduction technique implemented by the company to reduce it manufacturing cost and increase its profit. Atlas has a very good research and development department which mainly focuses on improving the quality and reducing the cost at the same time. To do the analysis we will compare the cost sheet of most profitable and popular brand manufacture by Atlas cycle ltd during the two year. The cost sheet for the month of September 2006-07 and 2007-08.


COST SHEET FOR THE MONTH OF SEPTEMBER 2006-07 Items Frame Fork Mudguard Chain cover Total Bought out components Handle Brake Chain wheel&crank Hub Spoke,Nipple&Washer Reflector Rim &Rim Tape Chain Adjuster Pedal Tyre Tube Saddle Freewheel Chain Stand Adj. for cost of stand in AP.TN TOTAL Add Freight Inward Add Freight Outward Marginal Cost Selling Price(Average) Less Rebate and Cash Dis.(Est.) Net selling Price (Avg) Contribution Material cost 169.24 99.47 46.46 17.48 333 Consumable cost 48.82 6.83 20.39 5.11 81.15 Direct lab 18.2 2.25 5.1 1.45 27 Power 7.93 1.5 6.82 1.25 17.5 Total 244.19 110.05 78.77 25.65 458.65

101.99 37.18 80.83 48.79 49.81 4.06 179.33 1.58 48.48 118.9 48.6 67.63 17.09 27.82 48.91 -0.95 1338.96 16.9 51.38 1,406.97 1,651.97 60.36 1,591.61 184.64


COST SHEET FOR THE MONTH OF SEPTEMBER 2007-08 Items Frame Fork Mudguard Chain cover Total Bought out components Handle Brake Chain wheel&crank Hub Spoke,Nipple&Washer Reflector Rim &Rim Tape Chain Adjuster Pedal Tyre Tube Saddle Freewheel Chain Stand Adj. for cost of stand in AP.TN TOTAL Add Freight Inward Add Freight Outward Marginal Cost 103.47 37.69 80.8 49.93 53.56 4.19 171.84 1.78 51.64 112.62 48.9 70.92 16.65 27.34 50.75 -0.99 1387.08 19.68 56.17 1462.93 Material cost 176.98 107.03 47.53 19.45 350.99 Consumable cost 67.67 8.83 25.39 6.11 108 Direct lab 19.2 2.25 5.6 1.45 28.5 Power 8.93 1.5 6.82 1.25 18.5 Total 272.78 119.61 85.34 28.26 505.99


Selling Price(Average) Less Rebate and Cash Dis.(Est.) Net selling Price (Avg) Contribution

1738.98 101.01 1637.97 175.04


COMPARISION BETWEEN THE TWO YEAR COST SHEETS: Items Frame Fork Mudguard Chain cover Total Bought out components Handle Brake Chain wheel&crank Hub Spoke,Nipple&Washer Reflector Rim &Rim Tape Chain Adjuster Pedal Tyre Tube Saddle Freewheel Chain Stand Adj. for cost of stand in AP.TN TOTAL Add Freight Inward Add Freight Outward Marginal Cost Total 244.19 110.05 78.77 25.65 458.65 Total 272.78 119.61 85.34 28.26 505.99 INCREASE DECREASE % 11.70809615 8.686960473 8.34073886 10.1754386 10.32159599 OR

101.99 37.18 80.83 48.79 49.81 4.06 179.33 1.58 48.48 118.9 48.6 67.63 17.09 27.82 48.91 -0.95 1338.96 16.9 51.38 1,406.97

103.47 37.69 80.8 49.93 53.56 4.19 171.84 1.78 51.64 112.62 48.9 70.92 16.65 27.34 50.75 -0.99 1387.08 19.68 56.17 1462.93 1738.98 101.01 1637.97 175.04

1.451122659 1.371705218 -0.037114933 2.336544374 7.528608713 3.201970443 -4.176657559 12.65822785 6.518151815 -5.281749369 0.617283951 4.864705013 -2.574605032 -1.725377426 3.762011859 4.210526316 3.59383402 16.44970414 9.322693655 3.977341379 5.267044801 67.34592445 2.912773858 -5.199306759

Selling Price(Average) 1,651.97 Less Rebate and Cash 60.36 Dis.(Est.) Net selling Price (Avg) 1,591.61 Contribution 184.64


ANAYSIS OF COST SHEET: The major portion of bicycle which consists of 32% of total cost is itself manufactured by company itself. Like Frame, Fork, Mudguard and chain cover. Rest of part Atlas got manufactured by others to whom the tender has been given. Atlas has provided them there logo and trademark and the company get manufactured these items according to their specification. Comparing the two cost sheet we can observer that contribution margin for the company is reduced by great margin and at the same time cost for the company has increased. According to the company personnel earlier they were using 2mm thickness of steel in manufacturing the cycle but after hard work done by R&D department Company management came on conclusion to reduce it thickness. It was also a step toward reducing the cost but due to hike in steel price it doesn’t seems to work for the company. Earlier company used to do NICKEL plating on both side of RIM used in bicycle. It was the time when nickel price was somewhere 1470 Rs/kg. Company as step of cost reduction started to use nickel plating on only one side of RIM and on another they started to use Paint it was the case of 2006-07. Suddenly Nickel prices dipped and dipped by more than 50% in the year 2007-08 which was again a set back for the company because this time when company wanted to revert back toward nickel plating customer protested as they wanted the painted RIM over the nickel one. Again coming to costing the year 2006-07 was one of the worst year for the Atlas company as this year witnessed growth in all sector except in cycle industry. Reason were hike in steel prices , market condition was not suitable for the industry. Coming to contribution part which consists for Overhead and profit. Overhead consist of indirect manufacturing expenses like depreciation, Repairs and maintenance and financial expenses.


Company provides rebate to its Dealers depending on some factors like Advance payment, number of quantity ordered and number of time the order. Some time Company also provide perks to its dealers like return ticket to some place for touring. One of the other methods of cost reduction applied is that they change the packing methods as well some technique of manufacturing of cycle. Company apart from cost sheet also does standard and actual costing. Where standard costing is set as standard for the month and after that company do actual costing to find the degree of deviation.


RATIO ANALYSIS:Ratio analysis is the process of determining and expressing the numerical or quantitative relationship between two related variables for purposes of financial analysis. Ratio analysis is the calculation and comparison of ratios, which are derived from the information in a company's financial statements. The level and historical trends of these ratios can be used to make inferences about a company's financial condition, its operations and attractiveness as an investment. Ratio analysis help us to check whether a business is doing better this year than it was last year and also tells us if the business is doing better or worse than other businesses doing and selling the same things. Ratios should be taken as guides that are useful in evaluating a company‘s financial position and operations and making comparisons with results in previous years or with other companies. The primary purpose of ratios is to point out areas needing further investigations Advantages or Uses of ratio analysis

Ratio analysis can be of invaluable aid to management in the discharge of its basic function of planning, forecasting, coordination, communication and control. It is a device to diagnose the disease of an enterprise. It is the powerful tool of financial analysis. The advantages of ratio analysis are summarized as below. 1. Ratios are helpful in judging financial performance of an enterprise over a period of time. They tell the various aspects of management performance and the overall financial position. 2. A study of the trend of strategic ratios may help the management in the task of planning and forecasting.


3. The ratios measure the efficiency of operations of enterprises. Hence they can be used as a tool of management control. 4. It is possible to taste the liquidity, profitability, leverage, and turnover of the enterprise through the technique of ratio analysis. 5. Sometimes investment decisions are guided by some ratios 6. Ratio analysis simplifies the comprehension of financial statements. 7. Ratio analysis communicates the financial strength or weakness of a firm in a more reasonable and understandable manner.

Now this part will consist of those ratios which have significance related to balance sheet. a) Curre nt Ratio:

Current ratio is defined as the ratio of current assets to current liabilities. It shows the relationship between total current assets and total current liabilities. It is a measure of firm‘s short-term solvency. It is calculated as follows: A rule of thumb sometimes applied to the current ratio is that it should be around 2:1. This figure should be used with caution. If the company has a rapid inventory turnover and can easily collect its receivables, the current ratio can be lower. If the ratio drops to near 1, then the enterprise will be in a potentially unstable pos ition. If the ratio is low, it may mean that the enterprise is undercapitalized, and consideration will have to be given to providing more capital, either through increased equity or more long-term debt. Faced with a low current ratio, an enterprise will have to exist on a day-to-day basis, and thus it may have to adopt uneconomic practices. Its products may have to be sold at lower prices to receive payment in cash, or it may lose sales to competitors that can offer better credit terms. In the operating cycle of


the firm current assets are converted into cash to provide funds for the payment of current liabilities. So, the higher the current ratio, higher the short term liability. A firm which has large amount of cash and accounts receivable is more liquid than a firm with a high amount of inventories in its current assets, though both the firms may have the same current ratio Current Asset Current Ratio = ------------------------------------------Current Liabilities b) Debt Equity Ratio:

Debt equity ratios show the relationship between total debts and owned capital. It is the ratio of amount invested by outsiders to the amount invested by the shareholders. It may be expressed as follows; This ratio reflects the relative claims of creditors and shareholders against the assets of the firm. A high ratio shows a large share of financing by the creditors of the firm. A low ratio implies a smaller claim of creditors. The D/E ratio indicates the margin of safety to the creditors. If for instance the D/E ratio is 1:2, it implies that for every rupee of outside liability the firm has 2 Rs. of owners capital or the stake of creditors is one half of the owners. Conversely, if D/E ratio is 2:1 it implies low safety margin for the creditors. If D/E ratio is high, the owners are putting up relatively less money of their own. It is a danger signal for the creditors, considering what would happen if the project fails or the management behaves irresponsibly.. A high proportion of debt in the capital structure would lead to inflexibility in the operations of the firm as creditors would exercise pressure and interfere in management. Nevertheless, the shareholders stand to gain if the firm performs well with increase in operating profits. This is because debt carries a fixed rate of return and if the firm is able to


earn on the borrowed funds a rate higher than the fixed charge on loans, the benefit will go to shareholders. A low D/E ratio has just the opposite implications.

External Equity or Debt Debt-Equity Ratio = ------------------------------Internal Equity


Inte rest Coverage Ratio:

Interest coverage ratio indicates the firm‘s ability to make regular interest payments out of its current earning. The standard for this ratio is that interest charges should be covered six to seven times. It is calculated by dividing the operating profit and earnings before interest and taxes by the fixed interest charges on loans. It may be calculated as follows:

Earning Before interest and tax Interest Coverage Ratio = ----------------------------------------Interest d) Return on Investment:


The ROI is the most important ratio of all. It is the percentage of return on funds invested in the business by its owners. In short, this ratio tells the owner whether or not all the effort put into the business has been worthwhile.

The ROI is calculated as follows: Net Profit after Tax Return on Investment = ----- -------------------------------Total Assets X 100


Earning pe r Share Ratio: The most widely used ratio, it tells how much profit was generated on a per

share basis.

It measures the profitability of the company from the equity shareholders

point of view. It helps to determine the market price of equity shares.

Net income – dividend on preference stock EPS = ------------------------------------------------------No. of shares


Debtors/Receivable Turnover Ratio

It shows how quickly the debtors are converted in to cash. It is also a test of the liquidity of a firm. A shorter collection period indicates prompt payments of debtors while a longer period indicates the inefficiency of credit collection.


It can be calculated as using the following formula. Credit sale

Debtors Turnover Ratio



g) Assets Turnover Ratio:

This ratio measures the efficiency of a firm in managing and utilizing its assets. It is based on the relationship between sales or cost of sales and assets/investments of a firm. The ratio may be calculated as follows:

Sales Fixed assets turnover = ------------------Fixed assets


Gross Profit Ratio:

Gross Profit Ratio represents the gross margin or profit on net sales, and indicates the degree to which the selling price may decrease without any loss from operation to the firm.

The gross profit margin is not an exact estimate of the company's pricing strategy but it does give a good indication of financial health, as it is a resultant of relationship between prices,


sales-volume and cost. Without an adequate gross margin, a company will be unable to pay its operating and other expenses and build for the future. In general, a company's gross profit margin should be stable. It should not fluctuate much from one period to another, unless the industry it is in; has been undergoing drastic changes which will affect the costs of goods sold or pricing policies. A high ratio of gross profit to sales is a sign of good management as it can imply that the cost of production of the firm is relatively low. It is also indicative of higher sales price without a corresponding increase in the cost of goods sold. A very high gross profit margins may also be a result of unsatisfactory basis of valuation of stock i.e. over-valuation of closing stock and under-valuation of opening stock. A relatively low gross profit margin is a definite danger signal, warranting a careful and detailed analysis of the factors responsible for it. The important contributory factors may be (1)a high cost of production reflecting acquisition of raw materials and other inputs on unfavorable terms, inefficient utilization of current as well as fixed assets. (2) A low selling price resulting from severe competition, inferior quality of product, and lack of demand.

A high G/P ratio is a sign of good management. It is calculated as follows:

Gross Profit Gross Profit Ratio = -------------------Net Sales X 100



Net Profit Ratio:

This ratio is the percentage of sales left after subtracting the Cost of Goods sold and all expenses, except income taxes. It provides a good opportunity to compare your company's "return on sales" with the performance of other companies in your industry. The Net Profit Margin Ratio is calculated as follows:

Net Profit Net Profit Ratio = ------------------Net Sales X 100


Inventory Turnover Ratio Inventory turnover ratio is the measure of liquidity of inventory. indicates the speed with which the inventory is sold. indicates that the inventory sold fast. This ratio

A high turnover ratio

It is an indication of good inventory

management. This ratio is also an index of profitability. A ratio of six or seven times is considered satisfactory. The inventory turnover can also relate to the average length of time a firm keeps its inventory on hand. A low turnover ratio may mean that a company with large stocks on hand may find it difficult to sell its product, and this may be an indicator that the management is not able to control its inventory effectively. A low turnover ratio may, however, also mean that large stocks must be held to ensure that production schedules are met. A low ratio means a sizeable amount of funds are tied up. A high turnover ratio may mean that the enterprise is able to recover its inventory investment rapidly and that there is a good demand for its products. On the one hand, when the ratio is much higher than the industry average, it may mean that the enterprise is very efficient in managing its inventories. On the other hand, it


may mean that the enterprise is starved of funds and cannot afford to maintain a sufficient inventory; as a result, it may be forced to forgo sales opportunities. In this regard inventory involves two risks: a) Running out of stock due to low inventory (high inventory turnover) which may indicate future shortages. b) Excessive carrying charges because of high inventory (low turnover).

Cost of Goods Sold Inventory Turnover Ratio = ------------------------------------Average inventory at Cost d) Dividend Payout Ratio

The Dividend Payout Ratio measures what a company‘s pays out to investors in the form of dividends. It measures the amount of current net income paid out in dividends rather than retained by the business. It can be calculated as: Dividend per Share Dividend Payout Ratio = -----------------------------------Earnings per Share e) Return on Net Worth:-

RONW is one of the most important profitability ratios, which assess how much the capital invested has earned during the period. It is calculates as follows:


PBIT Return of Net worth = ---------------------------- X 100 Total Net worth f) Earning Retention Ratio :It is the ratio which shows the ratio of profit after tax that company retains after paying dividend. It is calculated as Earning retention ratio = 1 – Dividend payout ratio


RATIOS RELATED TO BALANCE SHEET 2004-05 2005-06 2006-07 2007-08

Debt - equity ratio Current ratio Interest covg ratio Return on invest. EPS fixed asset turnover ratio

1.03 1.8 2.37 3.26 6.97 4.77

1.04 1.65 1.82 2.37 2.81 4.81

0.6 1.63 -3.35 28.87 165.02 4.04

0.73 1.57 2.07 2.57 6.16 4.07



Debt - equity ratio
1.2 1 0.8 0.6 0.4 0.2 0 2004-05 2005-06 2006-07 2007-08

Debt - equity ratio

Interpretation: In the company the ratios were 1.03, 1.04, 0.6 and 0.73 in the year 2004-05, 2005-06, 2006-07 and 2007-08. The lower the ratio the better it is. In the year 2006-07 the ratio was lower. The debt borrowing was there in the other years so lower the ratio is better. High indebtedness leads to creditor’s pressure and constraints on independent functioning and energy of management. Hence we can say that the debt capital ratio as witnessed by the firm has been decreasing which is not-good for the company. For the cycle industry the optimal ratio is 3:1.


Current ratio

1.75 1.65


Current ratio






Interpretation: By looking the current ratio of last 4 years, we can say that in the year 200405 is 1.8 and in year 2005-06 decreases to 1.65, which is due to increase in current assets is more less than current liabilities. Current ratio of 2005-06 and in the year 2006-07 remains same that is 1.65. As we all know that the Current ratio is the measure of short term solvency of the firm. It tell us the arability of current assets for each rupee of current liability. The Current Ratio of Atlas cycle Limited is higher than one that is the firm has more of current assets than claim against them. The higher the current ratio, the greater the margin of safety. The current ratio of 1.33:1 is the optimal current ratio where as the current ratio of Atlas cycle Limited is 1.57 for the last year so the firm is having sufficient liquid.


Interest covg ratio
3.75 2.75 1.75

-0.25 -1.25 2004-05 2005-06 2006-07 2007-08

Interest covg ratio

-3.25 -4.25

Interpretation: The interest coverage ratio is a measurement of the number of times a company could make its interest payments with its earnings before interest and taxes; the lower the ratio, the higher the company’s debt burden. As a general rule of thumb, investors should not own a stock that has an interest coverage ratio under 1.5. An interest coverage ratio below 1.0 indicates the business is having difficulties generating the cash necessary to pay its interest obligations. In the case of Atlas Company we can observe that in the year 2004-05 has highest ratio of 2.37 comparing to other 3 years. In the year 2006-07 company is having negative ratio of 3.35 which show that company’s health in this period was very bad. But overall company is having ratio over 1.5 which is comparatively good.


Return on invest.
28 25.5 23 20.5 18 15.5 13 10.5 8 5.5 3 0.5 2004-05 2005-06 2006-07 2007-08

Return on invest.

Interpretation: Is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. If an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken. Company has overall good ROI we can see that in every year it is above 2. In the year 200607 company’s ROI is 28.87 which was due to high Profit after tax. This was because of company has sold off its fixed asset in the same year.


170.5 160.5 150.5 140.5 130.5 120.5 110.5 100.5 90.5 80.5 70.5 60.5 50.5 40.5 30.5 20.5 10.5 0.5
2004-05 2005-06 2006-07 2007-08


In the year 2004-05 EPS was 6.97 which decreased to 2.81 in the year 2005-06 and it increased to 165.02 in the year 2006-07 but again came down to 6.16. The reason for sudden jump in EPS was the abnormal profit which occurred for the company on the sale of fixed asset. The earnings per share of the company has been fluctuating thus we can say that in any year shareholders ar getting good return but in some year they are receiving low return


fixed asset turnover ratio
5 4.8 4.6 4.4 4.2 4 fixed asset turnover ratio

3.8 3.6
2004-05 2005-06 2006-07 2007-08

Interpretation: An indicator of how profitable a company is relative to its total fixed assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. In this case company was having good return in earlier two year that were 2004-05 and 2005-06 but it has decreased in last two year that are 2006-07 and 2007-08.this show company efficiency has decreased over the period



2004-05 Gross Profit Ratio Net Profit Ratio Inventory Turnover Ratio Dividend Payout Ratio Return of Net worth Earning retention ratio PAT to SALE 1.46 0.52 11.62 27.54

2005-06 1.63 0.2. 10.48 34.13

2006-07 -6.5 10.82 8.86 3.19

2007-08 1.64 0.34 7.59 20.35

1.74 74.17 1.1

45.22 67.14 0.741

1.37 96.84 11.33

3.35 77.90 0.934



Gross Profit Ratio
1 0 -1 -2 2004-05 2005-06 2006-07 2007-08 Gross Profit Ratio

-3 -4
-5 -6 -7

Interpretation: Gross profit margin indicates the relationship between net sales revenue and the cost of goods sold. A high gross profit margin indicates that a business can make a reasonable profit on sales, as long as it keeps overhead costs in control. In given case we can observe that gross profit has increased in the year 2005-06 comparing to 2004-05. But in the year 2006-07 company was not having sufficient sales revenue it was because two of its concern was under loss in this period but in year 2007-08 company again regain its position.


Net Profit Ratio
12 10 8 6 4 2 0 2004-05 2005-06 2006-07 2007-08

Net Profit Ratio

Interpretation: The ratios were in 2007-08, 2006-07, 2005-06 and in 2004-05 were .052% , 0.2% , 10.82% and 0.2% . The profit is showing downward trend on yearly basis. Again in the year 2006-07 there was abnormal profit which is also known as non recurring items due to which there is high ratio. This ratio is the measure of converting each rupee sale into net profit. If net profit margin would have been inadequate which is happing in this our case then it shows failure of firm to achieve satisfactory return on share holder‘s fund. We can say that the company has a poor net profit margin hence is not able to efficiently converting each rupee sale into net profit


Inventory Turnover Ratio


4 2

Inventory Turnover Ratio

0 2004-05 2005-06 2006-07 2007-08

Interpretation: The ratio for the four year are 11.62 , 10.48, 8.86 and 7.59 for the years 200405,2005-06,2006-07and 2007-08. The inventory turnover ratio shows how rapidly the inventory is turning into receivables through sales. Generally a high inventories turnover ratio indicates good inventory management. A low level of inventory turnover implies excessive inventory levels than warranted by turnover by production and sales activities, or slow moving obsolete inventory. A high level of sluggish inventories amount to unnecessary blockage of funds, reduced profits and increased costs. The obsolete inventories have to be written off; this would adversely affect the working capital and the liquidity of the firm. Atlas cycle has a very good inventory turnover ratio as it show the efficiency of company is very good


Dividend Payout Ratio
35 30 25 20 15 10 5 0 2004-05 2005-06 2006-07 2007-08

Dividend Payout Ratio

Interpretation: The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings. A very low payout ratio indicates that a company is primarily focused on retaining its earnings rather than paying out dividends. The payout ratio also indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are easier to pay out than larger dividends. In our case company‘s payout policy is little bit fluctuating. As we can observe that in the year 2004-05 company has paid 27.34% of dividend where as in year 2005-06 it has paid 34.13%. but in the year 2006-07 the dividend margin decreased heavily. But in subsequent year again company has paid some dividend to its share holders.


Earning retention ratio
80 60 40 20 Earning retention ratio

2004-05 2005-06 2006-07 2007-08

Interpretation: The percent of earnings credited to retained earnings. In other words, the proportion of net income that is not paid out as dividends. Most earnings retained are reinvested into the company's operations. In our case company is retaining back a good amount of profit. If we will observe then will find that in every year company makes heavy investment in acquiring fixed asset and also do investment. Company is retention ratio is increasing on yearly basis. If we observe than we will find that company is almost retaining 70% of profit. The major benefit of it is that for investment purpose company don‘t have to borrow external debt.


12 10 8



0 2004-05 2005-06 2006-07 2007-08

Interpretation: It shows the margin of Profit after tax in total sales. It also measures the efficiency of company in earning good amount of after tax profit from their sales. In our case company is not having satisfactory ratio. As we can observe that there is downward trend in the same on year by year basis. Again in the year 2006-07 the growth level in the ratio is just due to abnormal profit. So overall it is not a good sign company must focus on increasing its profit after tax margin .



A vital tool to figuring out the strategic side of any business idea is knowing and understanding the acronym: SWOT. First, after fully planning and figuring out what will go into your business idea on paper, the next step is to analyze the company‘s SWOT. While going through this process you‘ll be able to focus on the strengths and realize weaknesses early so the business plan can be amended. With this well-rounded business plan and a completely understood approach, you‘ll be able to safely move towards getting the ball rolling.


The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This is an analysis of the business plan that covers both internal and external factors. By using this tool, you‘ll be able to see the pros and cons before even putting any money into a project. The Strengths and Weaknesses categories are both internal factors. These are pretty selfexplanatory, but they are the aspects of your business that you would be directly in control of. Some of these would include the proper management of staff, managing cash flow, knowing the company‘s capacity of supply and demand, and the overall efficiency of your operations. The Opportunities and Threats portion are external factors. These two are influences outside of your control and are normally external environmental factors. By pointing out these aspects of the business, you‘ll be able to try and cradle the Opportunities to make the most of them and, hopefully, avoid the Threats before they occur. A few examples of these are changes in the economy, new technologies, outsourcing, industry/customer needs, and weather issues. All in all, after using the SWOT analysis on your business plan, you‘ll have a much better understanding before contributing a large start- up financial investment.


Strength: For the company like Atlas which is second largest manufacturer of Bicycle in India. It has seen a tremendous increase in the number of bicycle manufacturers and bicycle exporters in the recent past. Today, bicycle manufacturing and bicycle spares industry is well accepted and is also widely recognised for its quality standards in the international market. Atlas has a very strong motivated work force which is the greatest strength for the company. Strong relationships with many different manufacturers, often negotiating an exclusive distribution deal with them. Excellent staff who are well- trained cycling enthusiasts who recognize the need to ensure complete customer satisfaction. A wide selection of goods.

Weakness: The difficulty of raising visibility among all of the perspective customers. The nature of the industry which does not have a smooth, constant flow of goods (specials and closeouts). Predicting what products will sell is difficult and since closeouts by their nature are purchased in big lots, a wrong choice could create a glut of inventory.


Opportunity: Wheelie Deals' business model addresses the problem that the retail industry faces decreasing margins. The ability to spread fixed costs over a larger area as sales increase, increasing profit margins. While the bicycle industry is affected to some degree by the circ ular nature of the economy, bicycle and accessory sales never fall completely flat since there are many people that ride bikes regardless if it is economic boom or bust.

Threat: Entry into this market niche from an established distributor, recognizing this is the area for growth in the industry. A decrease in the willingness for manufacturers to sell their closeouts to retailers via wholesalers, instead selling all of their excess directly to the mail order houses. The major threat facing the bicycle industry is steep increase in the price of basic raw material like steel. The market is not absorbing the full impact of price increase resulting in affect the industry‘s profitability position.





FINDING:Coming to the final stage of project the findings are pearls that a person learn from its project. During the project duration of two month it became very clear the corporate structure and the working environment of a company. The difference between actual balance sheet and the balance sheet given in a book is totally different and exist in different realm of study. Now coming to finding which can be summarised are as follow .  Debt - Equity ratio:- In the company the ratios were 1.03, 1.04, 0.6 and 0.73 in the year 2004-05, 2005-06, 2006-07 and 2007-08. The lower the ratio the better it is. In the year 2006-07 the ratio was lower. The debt borrowing was there in the other years so lower the ratio is better. High indebtedness leads to creditor‘s pressure and constraints on independent functioning and energy of management. We can say that company mainly running on its own fund because from 2004 company has not issued and equity share to raise money which is again a good sign and depict good financial health of company.  Curre nt ratio:- By looking the current ratio of last 4 years, we can say that in the year 2004-05 is 1.8 and in year 2005-06 decreases to 1.65, which is due to increase in current assets is more less than current liabilities. Current ratio of 2005-06 and in the year 2006-07 remains same that is 1.65. As we all know that the Current ratio is the measure of short term solvency of the firm. It tells us the arability of current assets for each rupee of current liability. The Current Ratio of Atlas cycle Limited is higher


than one that is the firm has more of current assets than claim against them. Having sufficient working capital to carry on its day to day expenses. Despite of having low PAT in same year still company is in good condition to finance its working capital.  Inte rest coverage ratio:-The interest coverage ratio is a measurement of the number of times a company could make its interest payments with its earnings before interest and taxes; the lower the ratio, the higher the company‘s debt burden. In the case of Atlas Company we can observe that in the year 2004-05 has highest ratio of 2.37 comparing to other 3 years. In the year 2006-07 company is having negative ratio of 3.35 which show that company‘s health in this period was very bad. But overall company is having ratio over 1.5 which is comparatively good. The company has three branches out of which two are running under loss and the effect is being shown on all three concerns.  Return on Investment:- Is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. If an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken. Company has overall good ROI we can seen that in every year it is above 2. In the year 2006-07 company‘s ROI is 28.87 which was due to high Profit after tax. This was because of company has sold off its fixed asset in the same year. That means in every year company has been able to earn sufficient earning from its investment this show company is very much competent in taking financial decisions.  EPS:- In the year 2004-05 EPS was 6.97 which decreased to 2.81 in the year 200506 and it increased to 165.02 in the year 2006-07 but again came down to 6.16. The


reason for sudden jump in EPS was the abnormal profit which occurred for the company on the sale of fixed asset. The earnings per share of the company has been fluctuating thus we can say that in any year shareholders are getting good return but in some year they are receiving low return this was mainly due to slowdown in economic growth during these year.  Return on Asset:- An indicator of how profitable a company is relative to its total fixed assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. In this case company was having good return in earlier two year that were 2004-05 and 2005-06 but it has decreased in last two year that are 2006-07 and 2007-08.this show company efficiency has decreased over the period.  Gross profit margin:-Gross profit margin indicates the relationship between net sales revenue and the cost of goods sold. A high gross profit margin indicates that a business can make a reasonable profit on sales, as long as it keeps overhead costs in control. In given case we can observe that gross profit has increased in the year 200506 comparing to 2004-05. But in the year 2006-07 company was not having sufficient sales revenue it was because two of its concern was under loss in this period but in year 2007-08 company again regain its position.  Net profit ratio:- The ratios were in 2007-08, 2006-07, 2005-06 and in 2004-05 were .052% , 0.2% , 10.82% and 0.2% . The profit is showing downward trend on yearly basis. Again in the year 2006-07 there was abnormal profit which is also known as non recurring items due to which there is high ratio. This ratio is the measure of converting each rupee sale into net profit. If net profit margin would have been inadequate which is happing in this our case then it shows failure of firm to


achieve satisfactory return on share holder‘s fund. We can say that the company has a poor net profit margin hence is not able to efficiently converting each rupee sale into net profit.  Inventory turnover ratio:- The ratio for the four year are 11.62 , 10.48, 8.86 and 7.59 for the years 2004-05,2005-06,2006-07and 2007-08. The inventory turnover ratio shows how rapidly the inventory is turning into receivables through sales. Generally a high inventories turnover ratio indicates good inventory management. A low level of inventory turnover implies excessive inventory levels than warranted by turnover by production and sales activities, or slow moving obsolete inventory. A high level of sluggish inventories amount to unnecessary blockage of funds, reduced profits and increased costs. The obsolete inventories have to be written off; this would adversely affect the working capital and the liquidity of the firm. Atlas cycle has a very good inventory turnover ratio as it show the efficiency of company is very good. But as per the company personnel high ratio is also not good as it will lead to high inventory cost and reduction in quality of product.  Dividend payout ratio:- The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings. A very low payout ratio indicates that a company is primarily focused on retaining its earnings rather than paying out dividends. The payout ratio also indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are easier to pay out than larger dividends. In our case company‘s payout policy is little bit fluctuating. As we can observe that in the year 2004-05 company has paid 27.34% of


dividend where as in year 2005-06 it has paid 34.13%. but in the year 2006-07 the dividend margin decreased heavily. But in subsequent year again company has paid some dividend to its share holders.

 Earning retention ratio:- The percent of earnings credited to retained earnings. In other words, the proportion of net income that is not paid out as dividends. Most earnings retained are re- invested into the company's operations. In our case company is retaining back a good amount of profit. If we will observe then will find that in every year company makes heavy investment in acquiring fixed asset and also do investment. Company is retention ratio is increasing on yearly basis. If we observe than we will find that company is almost retaining 70% of profit. The major benefit of it is that for investment purpose company don‘t have to borrow external debt. This is the greatest source of fund that company utilises for investment purpose.

 PAT to Sale:- It shows the margin of Profit after tax in total sales. It also measures the efficiency of company in earning good amount of after tax profit from their sales. In our case company is not having satisfactory ratio. As we can observe that there is downward trend in the same on year by year basis. Again in the year 2006-07 the growth level in the ratio is just due to abnormal profit. So overall it is not a good sign company must focus on increasing its profit after tax margin .

Apart from these all there are some more facts and figure that must pointed out and that are:-


 Company is not in very good health due to tough competition from rivals and also threat from Chinese companies.  The sister concern are in very bad condition and due to this company has already taken the initiative of diversification to hedge its risk.  Company is not declaring dividends on regular basis which is not a good sign again this will impact on future prospects of company.  Despite of good technology company is not investing good amount in research and development.  There is lack of coordination between cost department and finance department.  There is lack of control mechanism in the company.  Due to tough competition in market company is compromising in quality.


CONCLUSION: During the project we observe that what statements are necessary for the analysis and what it signifies for the company. The statement consists of financial and cost statements like Balance sheet, profit and loss statement, cash flow statement and cost sheet. Company do prepare cost sheet on monthly basis to reconcile it with the financial statements so as to keep check on the process and find out any deviation. The Statements were totally different from what we have studied in book the working process which company follows were also totally different. Company has a wide range of product due to which Atlas has competitive edge over some of its competitors like TI INDIA, AVON and others. Another important and positive factor for the company is that company do manufacture most of parts in house by them self which again make them competitive in the cycle industry. Company have a very strong and innovative R & D and quality control unit which continuously work to improve the quality and bring new innovative products. Company is fully automated and computer driven of which company feel proud. Company work on ERP which is built by them self. Coming to analysis we have observed that company has three units functioning that are one in MALANPUR, SONEPAT and SAHIBABAD. Out of three two of its unit are running under losses that are MALANPUR AND SONEPAT due to which SAHIBABAD unit has to feel the set back.


The major reasons for loss are increase in steel prices, adverse market condition, decrease in sales figure and extra competition from rivals. Company due to its reputation and long standing it became easy for it to avail cheap loan from public by way of fixed deposit. Company ask for fixed deposit from public for the term of 1 year company give 11% interest and for 2 to 3 years they pay 11.5% interest. One of the brokers for the company is BAJAJ CAPITAL LTD. Despite of its two units running under loss the Sahibabad unit is continuously increasing its production volume and sales volume too. Some of its ratio are very strong and shows good sign for the company. Like Debt – Equity ratio which shows that company don‘t require external fund to run its business and company control is very much in company‘s hand. The various ratio analysis and cash flow statement also shows that the company‘s financial position is very good and company is moving sound financially these describe a feasible position of the company. According to company they have started to focus on urban population as there prospective customer. The factors that they think will work for them are, People are becoming more health conscious. Changing hobby. Environment factors like Global warming. But there is also a major threat in this process that is of China. As china is largest manufacture of cycle and due to this it is one of the major threat for the company.


SUGESSTION: Company must work on its marketing effort to improve its sales and share in market. As Indian cycle industry is large enough to be tapped. Company should invest more on R&D to provide more innovative product. Company should focus on comparative analysis with its competitors to get a clear picture of its position. Must focus on profitability ratio which shows the alarming situation for the company. Company must pay attention on window dressing process which would provide them clear picture of difference in the estimated and actual. There is lack of coordination between cost department and financial department due which there is decrease in sales figure of other units. Company should reduce the decision making and implementation time. Company should adopt new techniques of risk calculation and financial analysis to count on actual figures. There is an immediate requirement for ATLAS to reduce its operating expenses. Modernization of the units as well as bringing in automation after a thorough analysis of its relevance can help the company in the cause. A reduced operating ratio shows signs of good management and hence the company should strive to achieve the same.


An analysis of the Critical success factors for not only the cycle industry, but also steel, paint, tube and tayer industry should be done. Critical success factors are those handful of factors that an industry or business cannot do without. Usually identifying and automating them reduces time and maximizes profits for the company. Almost all well-known organizations around the world either have a core team for the same or hire professional services. Profit ratios for the company needs to be improved as compared to other industry players and stabilized to tide over bad phases in the industry


Limitations Of Study

The topic is a voluminous one for which the time allotted was insufficient. The scope of the study was limited to Atlas cycle ltd. Finance & account division. Certain factors are treated as highly confidential by the management and hence data access was limited. Most of the information collected is more practical and understandable, but it is difficult to put it in proper theoretical language. The theoretical aspect which we have learnt in books was totally different that of original working in the company. We have started our training in the month of April when company do there audit work and this is closing month so company personnel where not being able to provide us enough time. Financial statements are based on historical costs and do not consider inflation. Management may hedge or exaggerate its financial figures. Hence certain ratios will not be accurate indicators. A ratio does not describe the quality of its components. For example, the current ratio may be high but inventory may consist of obsolete merchandise. Ratios are static and do not take into account future trends.





 Ahuja , N.L., Accounting Standard- their applicability and auditors responsibility.  A Damadoran ―Applied Corporate Finance a user Manual.‖

 A Damodaran ―Investment Valuations.‘‘

 Brealy, Myres, Marcus ―Fundamentals of Corporate Finance.‖

 Frank J Fabozzi ―Financial Management & Analysis.‖

 George .M .Norton ―Maximizing Corporate Value.‖  Altman, E.I., Financial Ratio‘s Discriminant Analysis and the prediction of corporate bankruptcy, journal of fiancé.  Backer, Ronald, J., Accounting principles & application  Backer, Morton and Martini L.gosman, The Use of Financial ratio‘s in credit Dawesgrade Desicions, financial Management. 


 Banishay, M., Economic Information on Financial Ratio Analysis. Accounting and Business research.  Davidsion, Financial accounting,  Edward, james, D., Financial accounting  Edward, Altman, financial Ratio‘s discriminant Analysis and the prediction of corporate bankruptcy, journal of finance.  Finney and miller, principles of accounting.  Gorwan , T.K.,Financial Analysis Data for Decision  Gross, M.J., and W.Washerver Financial and Accounting Guide for Non profit organization.  Gupta, L.C., financial ratio for monitoring corporate sickness, oxford university press, Delhi.  Helfort, E.A., techniques of Financial Analysis. Homewood Richard D. Irwin  HornGren, Introduction to Financial Accounting  Jemmings A.R., Financial Accounting An Instructors Manual.  Lerner, E.Mand Carleton W.T.A., Theory of Financial Analysis, New York Harvard, brace and World  Matulic and Histger, Financial Accounting  May, George, o., Financial Accounting , A distillation of Experience , scholor book  Mattesich, Richard Accounting and Analytical Method.  Agarwal, J.D., ―Optimizing On Working Capital‖ Corporate Trend, October 10, 1988.


 Agarwal, Yamini, K.C. Iyer and Surendra S Yadav, ―Understanding Complexity of Capital Structure Decision under Risk and Uncertanity‖ Invited to Present at The Bank of Finland, Helsinki, Finland, Oct. 21, 2008  Agarwal J.D., Capital Budgeting Decisions under Risk and Uncertainty, IIFP 1988.  Agarwal J.D., Capital Budgeting Decision: A Case For Multiple Objectives, Some Empirical Observations, The Charter Accountant, Vol. XXVII No. 7, Jan 1979, Pp537-42.  Agrawal J.D. ―Financial Statements and Inflation Accounting – A New Approach‖, The Chartered Secretary – The Journal of Companies Secretaries of India, New Delhi, Vol. VIII (July 1978)  Agrawal J.D.‖Financial Statements: Informational Approach‖ Indian Journal of Accounting – The Journal of Indian Accounting Association, Vol. VI (June & December 1976)  Agarwal, Yamini, K.C. Iyer and Surendra S Yadav, ―Understanding Complexity of Capital Structure Decision under Risk and Uncertanity‖ Invited to Present at The Bank of Finland, Helsinki, Finland, Oct. 21, 2008.  Agarwal, Aman, ―Management Accounting Concept and Behaviour by Gorden, Lawrence A‖, a book review, Vol. XX No.4 Dec 2006  Jindal, Amba, ―Managerial Economics in a Global Economy‖ a book review, Salvatory and Domnick, Vol. XXII Dec 2008  Raghav, Pushpender S, ―Understanding Balance Sheet‖, a book review, Vol. XXI No.2 June 2007


 Kalpan & Norton ―The Strategy Focused Organisation.‖

 Nelson C Mark ―Macro Economics & Finance: Theory & Empirical Methods.‖

 Palepu , Healy , Bernard ―Business Analysis & Valuations using Financial Statements.‖

 Tom Copeland & Tim Koller ―Measuring & Managing the Value of Companies.‖

 Agarwal J.D.( 2005 ), ― Accounting For Financial Analysis ‖, Delhi Press, New Delhi

 Jain P.K. & M.Y. Khan ( 2005 ) , ― Financial Management ‖ , 4 th Edition , TATA Mc Graw Hill Publishing Co Limited.

 Maheshwari S.N. ( 1995 ), ― Financial Management ‖ , 4 th Edition , Sultanchand & sons.

 Pandey I.M. ( 2006 ) , ― Financial Management ‖, 9 th Edition Vikas Publishing House Pvt Ltd.

 Satish B Mathur , Working Capital Management and Control – Principals and practice.

 Kim , Yong H , Advances in Working capital management , Volume 3 & volume 4 , jai publishers.


 BHATTACHARYA HRISHIKES , Working Capital Management : Strategies and Techniques , Prentice hall of India.

 Gopala Krishna Murthy G , Towards better working capital management , ICFAI University Press.

 Sanzo, Richard , Ratio Analysis for Small Business , books for business publication.

 Vandyck, Charles K , Financial Ratio Analysis – A handy guidebook , Trafford Publishing.

 T.S Grewal - Basic of accountancy  Pecker, S.b., cash flow analysis, its uses and limitation, Fiancial Analysts Journal  Samuals, Advance Financial Accounting,  Baumol, S. J., Economic theory and Operations Analysis,  Borch , karl Henrik, The Economics of uncertainty , Princeton  Burmelle S. And Schwab, B., Capital Budgeting with uncertainty opportunities- A Morkovian Apporach  Analysis of financial statements By Leopold A. Bernstein, John J. Wild  Financial statements demystified By David Hey-Cunningham  2006 Miller International Accounting/financial Reporting Standards Guide By David Alexander, Simon Archer


 Analysis of financial statements By Pamela P. Peterson, Pamela Peterson Drake, Frank J. Fabozzi  Financial analysis By Erich A. Helfert  Techniques of financial analysis By Erich A. Helfert  Key Management Ratios (Financial Times Series) by Ciaran Walsh  Financial Ratio Analysis: A Handy Guidebook by Charles K. Vandyck  Odds Ratios in the Analysis of Contingency Tables (Quantitative Applications in the Social Sciences) by Dr. Tamas Rudas (Paperback - 1 Jan 1998)  Ratio Analysis for Small Business by Richard Sanzo (Paperback - 24 May 2005)  Successful managerial control by ratio-analysis by Spencer A Tucker (Unknown Binding - 1961)  Fibonacci and Gann Applications in Financial Markets: Practica l Applications of Natural and Synthetic Ratios in Technical Analysis (Wiley Trading) by George MacLean (Hardcover - 22 April 2005)  Ratio analysis for small business (Small business management series, no. 20) by Richard Sanzo  Financial Ratios: Analysis and Prediction (Studies in accounting and financial management) by Meir Tamari  Ratio Analysis Workbook by Sheryl S. Mott


Website Addresses









 (yahoo finance)






Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.