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CHAPTER I
1.1INTRODUCTION AND DESIGN OF THE STUDY

This study was about ―AN ORGANISATIONAL STUDY AND STUDY ON
FINANCIAL STATEMENT ANALYSIS WITH SPECIAL REFERENCE TO SAKTHI
GANESH TEXTILES (P) LTD ERODE”. The main objective of study is to find the
financial strength of sakthi Ganesh.
An organization wishing to understand, and measure how satisfied their customers are
with the product and service they receive from it. The summer project report aims to create
awareness of about the external and internal environment of business organization among the
students. The summer project report contains all the functional areas at the organization and its
functions.
The company mainly concentrates on the satisfaction of the customers. The company
also assumes to endow our clients with utmost satisfaction by offering them quality products.
The firm essentially frames its production, purchase, marketing, finance and human resource
plans around the concepts of management and thus supplying the products to their customers.
Customer satisfaction is an integrated process through which companies build strong relationship
with their customers and create value for their customers and for themselves.
Another interesting sociological factor that is worthy of note is that as soon as people in
Coimbatore started textile mills, they sent their sons or nephews to great Britais to study
technology. There young men returned and replaced the highly paid managers, while mills in
other centers were perhaps more efficient form a commercial point of view, Coimbatore mills
have attached greater importance to technological efficiency.
MEANING OF FINANCIAL STATEMENT:
A financial statement (or financial report) is a formal record of the financial activities
of a business, person, or other entity.


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Relevant financial information is presented in a structured manner and in a form easy to
understand. They typically include basic financial statements, accompanied by a management
discussion and analysis
PURPOSE OF FINANCIAL STATEMENT:
"The objective of financial statements is to provide information about the financial
position, performance and changes in financial position of an enterprise that is useful to a wide
range of users in making economic decisions. Financial statements should be understandable,
relevant, reliable and comparable. Reported assets, liabilities, equity, income and expenses are
directly related to an organization's financial position.
Financial statements are intended to be understandable by readers who have "a reasonable
knowledge of business and economic activities and accounting and who are willing to study the
information diligently. Financial statements may be used by users for different purposes
 Owners and managers require financial statements to make important business decisions
that affect its continued operations. Financial analysis is then performed on these
statements to provide management with a more detailed understanding of the figures.
These statements are also used as part of management's annual report to the stockholders.
 Employees also need these reports in making collective bargaining agreements (CBA)
with the management, in the case of labor unions or for individuals in discussing their
compensation, promotion and rankings.
 Prospective investors make use of financial statements to assess the viability of investing
in a business. Financial analyses are often used by investors and are prepared by
professionals (financial analysts), thus providing them with the basis for making
investment decisions.
 Financial institutions (banks and other lending companies) use them to decide whether to
grant a company with fresh working capital or extend debt securities (such as a long-term
bank loan or debentures) to finance expansion and other significant expenditures.


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DEFINITION AND TYPES OF FINANCIAL STATEMENT:
Financial Statements represent a formal record of the financial activities of an entity.
These are written reports that quantify the financial strength, performance and liquidity of a
company. Financial Statements reflect the financial effects of business transactions and events on
the entity.
TYPES OF SINANCIAL STATEMENTS:
1. Statement of Financial Position:

Statement of Financial Position, also known as the Balance Sheet, presents the financial position
of an entity at a given date. It is comprised of the following three elements
 Assets: Something a business owns or controls (e.g. cash, inventory, plant and
machinery, etc.)
 Liabilities: Something a business owes to someone (e.g. creditors, bank loans, etc.)
 Equity: What the business owes to its owners. This represents the amount of capital that
remains in the business after its assets are used to pay off its outstanding liabilities.
Equity therefore represents the difference between the assets and liabilities.
2. Income Statement:

Income Statement, also known as the Profit and Loss Statement, reports the company's financial
performance in terms of net profit or loss over a specified period. Income Statement is composed
of the following two elements:
 Income: What the business has earned over a period (e.g. sales revenue, dividend income,
etc.)
 Expense: The cost incurred by the business over a period (e.g. salaries and wages,
depreciation, rental charges, etc.)
Net profit or loss is arrived by deducting expenses from income.



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3. Cash Flow Statement:

Cash Flow Statement presents the movement in cash and bank balances over a period. The
movement in cash flows is classified into the following segments:
 Operating Activities: Represents the cash flow from primary activities of a business.
 Investing Activities: Represents cash flow from the purchase and sale of assets other than
inventories (e.g. purchase of a factory plant)
 Financing Activities: Represents cash flow generated or spent on raising and repaying
share capital and debt together with the payments of interest and dividends.
4. Statement of Changes in Equity:

Statement of Changes in Equity, also known as the Statement of Retained Earnings, details the
movement in owners' equity over a period. The movement in owners' equity is derived from the
following components:
 Net Profit or loss during the period as reported in the income statement
 Share capital issued or repaid during the period
 Dividend payments
 Gains or losses recognized directly in equity (e.g. revaluation surpluses)
 Effects of a change in accounting policy or correction of accounting error












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1.2ABOUT THE INDUSTRY
Indian Apparel and Textile Industry
Introduction
The apparel and textile industry occupies a unique and important place in India. One of
the earliest industries to come into existence in the country, the sector accounts for 14% of the
total Industrial production, conduces to about 30% of the total exports and is the second largest
employment creator after agriculture.
The apparel and textile industry caters to one of the most basic requirements of people
and holds importance; maintaining the prolonged growth for improved quality of life. The sector
has a unique position as a self-reliant industry, from the production of raw materials to the
delivery of end products, with considerable value-addition at every stage of processing. Over the
years, the sector has proved to be a major contributor to the nations' economy.
Its immense potential for generation of employment opportunities in the industrial,
agricultural, organized and decentralized sectors & rural and urban areas, especially for women
and the disadvantaged is noteworthy.

ABOVE FIGURE SHOWS SEGMENTS IN INDIAN APPERRAL INDUSTRY



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PROCESS OF THE TEXTILE INDUSTRY:







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The present Status of Apparels In The world:
The Indian apparel industry is estimated to be worth Rs. 1,876 billion in
FY11 and is expected to grow at a CAGR of 8.7 per cent till FY16. The growth would
primarily be driven by the surge in demand for readymade apparels in rural areas, rising
income levels and youth population and increasing preference for branded apparels.

Indian apparel industry is highly fragmented in nature. Due to the low entry
barriers, numerous players have entered the industry
India‘s apparel exports grew at a CAGR of 6 per cent from INR 382 billion in FY06 to
INR 511 billion in FY11. The growth in exports can be attributed to shifting of the apparel
manufacturing base from the developed countries like the US and the EU to the low cost
countries like China, Vietnam, India, Bangladesh and many others. Multi Fiber Agreement
phase-out at the end of 2004 also helped India to increase its exports.

To remain competitive in the international market, Indian apparel industry needs to build
up a strong weaving and processing link so as to provide support to the apparel manufacturers
and also set up large units for reaping the benefits of economies of scale.

Apparel industry‘s profitability is mainly influenced by the raw material and input prices.
Domestic players enjoy better margins as against the exporters. The raw material prices for
apparel players have been on rise in the recent past due to the soaring cotton and crude oil prices.
The government has announced various schemes to encourage the investments in the textile
Industry like National Textile Policy (NTP), Scheme for Integrated Textile Parks (SITP),








Global Apparel Trade : India vis-à-vis competitors in 2007
Trade in US$ Bn Avg Growth rate % Share
World
345 12 100
Bangladesh
10.6 10 2.9
India
9.7 7 2.8
Vietnam
7.2 29 2.1



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Technology Up gradation Fund Scheme (TUFS), Export Promotion Capital Goods (EPCG),
Duty Entitlement Pass Book Scheme (DEPB) etc. The government has also allowed 100% FDI
in the textile sector through automatic route and up to 51% FDI in the retail trade of ―single
brand products‖ (with prior government approval)
TEXTILE INDUSTRY IN INDIA
The Textile industry in India traditionally, after agriculture, is the only industry that has
generated huge employment for both skilled and unskilled labor in textiles. The textile industry
continues to be the second largest employment generating sector in India. It offers direct
employment to over 35 million in the country. The share of textiles in total exports was 11.04%
during April–July 2010, as per the Ministry of Textiles. During 2009-2010, Indian textiles
industry was pegged at US$55 billion, 64% of which services domestic demand. In 2010, there
were 2,500 textile weaving factories and 4,135 textile finishing factories in all of India.

HISTORY OF TEXTILE INDUSTRY
The archaeological surveys and studies have found that the people of Harappan
civilization knew weaving and the spinning of cotton four thousand years ago. Reference to
weaving and spinning materials is found in the Vedic Literature also.
There was textile trade in India during the early centuries. A block printed and resist-dyed
fabrics, whose origin is from Gujarat is found in tombs of Foster, Egypt. This proves that Indian
export of cotton textiles to the Egypt or the Nile Civilization in medieval times were to a large
extent. Large quantity of north Indian silk were traded through the silk route in China to the
western countries. The Indian silk was often exchanged with the western countries for their
spices in the barter system. During the late 17th and 18th century there were large export of the
Indian cotton to the western countries to meet the need of the European industries during
industrial revolution. Consequently there was development of nationalist movement like the
famous Swadeshi movement which was headed by the Aurobindo Ghosh.
There was also export of Indian silk, Muslin cloth of Bengal, Bihar and Orissa to other countries
by the East Indian Company. Bhilwara is known as textile city.


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PRODUCTION PROCESS
India is the second largest producer of fiber in the world and the major fiber produced is
cotton. Other fibers produced in India include silk, jute, wool, and man-made fibers. 60% of the
Indian textile Industry is cotton based.
The strong domestic demand and the revival of the Economic markets by 2009 have led to huge
growth of the Indian textile industry. In December 2010, the domestic cotton price was up by
50% as compared to the December 2009 prices. The causes behind high cotton price are due to
the floods in Pakistan and China. India projected a high production of textile (325 lakh bales for
2010 -11).
[5]
There has been increase in India's share of global textile trading to seven percent in
five years.
[5]
The rising prices are the major concern of the domestic producers of the country.
 Man Made Fibers: These include manufacturing of clothes using fiber or filament
synthetic yarns. It is produced in the large power loom factories. They account for the
largest sector of the textile production in India. This sector has a share of 62% of the
India's total production and provides employment to about 4.8 million people.
[6]

 The Cotton Sector: It is the second most developed sector in the Indian Textile industries.
It provides employment to huge amount of people but its productions and employment is
seasonal depending upon the seasonal nature of the production.
 The Handloom Sector: It is well developed and is mainly dependent on the SHGs for
their funds. Its market share is 13%.
[6]
Of the total cloth produced in India.
 The Woolen Sector: India is the 7th largest producer.
[6]
Of the wool in the world. India
also produces 1.8% of the world's total wool.
 The Jute Sector: The jute or the golden fiber in India is mainly produced in the Eastern
states of India like Assam and West Bengal. India is the largest producer of jute in the
world.
 The Sericulture and Silk Sector: India is the 2nd largest producer of silk in the world.
India produces 18% of the world's total silk. Mulberry, Eri, Tasar, and Muga are the main
types of silk produced in the country. It is a labor-intensive sector.



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IMPORTS AND EXPORTS
Export
In economics, an export is any good or commodity, transported from one country to another
country in a legitimate fashion, typically for use in trade. Export is an important part of
international trade. Its counterpart is import.

Export goods or services are provided to foreign consumers by domestic producers. Export of
commercial quantities of goods normally requires involvement of the Customs authorities in both
the country of export and the country of import.

The advent of small trades over the internet such as through Amazon, e-Bay and the like, have
largely by-passed the involvement of Customs in many countries due to the low individual
values of these trades. Nonetheless these small exports are still subject to legal restrictions
applied by the country of export, particularly in respect of strategic export limitations.
Import

In economics, an import is any good or commodity, brought into one country from another
country in a legitimate fashion, typically for use in trade. Import goods or services are provided
to domestic consumers by foreign producers. Import of commercial quantities of goods normally
requires involvement of the Customs authorities in both the country of import and the country of
export.

The Textile industry is a term used for industries primarily concerned with the design or
manufacture of clothing as well as the distribution and use of textiles .The textile industry
occupies a unique place in our country. One of the earliest to come into existence in India, it
accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports
and is the second largest employment generator after agriculture.

The textile industry fulfills a pivotal role in the Indian economy. It is a major foreign exchange
earner and, after agriculture, it is the largest employer with a total workforce of 35 mn. In 2005


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textiles and garments accounted for about 14 per cent of industrial production and 16 per cent of
export earnings. The industry covers a wide range of activities. These include the production of
natural raw materials such as cotton, jute, silk and wool, as well as synthetic filament and spun
yarn. In addition, an extensive range of finished products are also made. The Indian textile
industry accounts for about 23 per cent of the world‘s spindle capacity, making it the second
highest after China, and around six per cent of global rotor capacity. Also, it has the highest loom
capacity—including hand looms—with a 61 per cent share. India accounts for about 12 per cent
of the world‘s production of textile fibers and yarns. This includes jute, of which it is the largest
producer.
The Vision
Although low growth scenario of 6% annual growth rate is likely for the next 2 years, C
vision is based on sustained growth of top five apparel suppliers. Based on the past export trends
of India and feasibility study and assuming that the world apparel market grows moderately at
8%, AEPC fixed the target for apparel export
1.3 ABOUT COMPANY PFOFILE

SAKTHI GANESH are an Export House of Knitted Garments, Exporting Garments for
the last 15 years, located in erode the cluster of Knitted Garment Industry. The company is a
partnership firm established on 1993. The company sets the own standards par with the best
companies in India on.
The company exports knit wears include T-shirt, Polo‘s, Sweat shirts, Woven shirts ,
leggings, Pajamas, Bath Line & Bath Ropes products to Babies, Kids, Ladies & Gents.
For details visit our Gallery Page. The Capability to cater the needs of esteemed Buyers, the
infrastructure is filled with all modern machineries and equipment to give high degree of
accuracy and the capacity to produce 1.5 Lakes to 2 Lakes garments depends upon styles and
shades.
A portion of the Fabric also being exported to the garment manufacture in Bangladesh, Egypt &
srilanka.
QUALITY POLICY
The company is more conscious about its quality certified by OEKO TEX and our
efficient and well equipped QC team is our back bone. It follows all the stringent procedures and


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test applicable for all international standards. The centralized QC team with team of highly
efficient and follow the standards right from yarn to packing, to see nothing is missed.
The company follows Systemized approach of ‗con‘ ‗con‘ and ‗JIT‘ and all ‗TQM‘
policies make the QC team is decidedly professional.
The quality programmed starts right from yarn to packing .On every step of production the
company concentrates on quality, to make sure all the parameters are followed. The QC team is
managed by the QC manager, under his strict guidance to follow all the methods to fulfill
international standards.
PRODUCTS
The company manufactures Knit wears include
 T-shirt
 Polo‘s
 Sweat Shirts
 Woven Shirts

INFRASTRUCTURE

The firm has all modern Machineries and equipments to prepare our self to meet the
changes. Well trained work force – efficient staffs with determined and analytical skills to give
the best services. Its fabric and knitting dept,. Have all latest Machineries imported from
Germany, Italy, and Japan to produce right quality fabrics for our production.
It work on 100% cotton and blended fabrics and our knitting division and Blended fabrics
and we knit Jerseys, Interlocks, Engg., stripes, Ribs, Fleece, Pique, Pointelle, Mini / Full
jacquards, Micro thermals, Ottomans, French terry, etc, and if needed we import fabrics.
It have fully fledged knitting – printing – embroidery – garmenting production centers
and the soft flow dyeing m/ace‘s supported by range of other m/ace. And fabrics are processed
with Balloon paddlers and Imported relax dryers to remove moisture in a softest way.

The factories are covered with all gorgeous greenery grass and trees to preserve nature
and ecological balance, which is been appreciated by our esteemed buyers andthe production
MD
MERCHANDISING
MANAGER
PRODUCTION
MANAGER
production unit1
production unit2
QUALITY
CONTROL
MANAGER
quality controller
WAREHOUSE
MANAGER
processing follow-ups
SAMPLING
GENERAL MANAGER
FINANCE
MANAGER

ACCOUNTANT
CASHIER
HR
MANAGER


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capacity is to produce garments 1.5 lakes to 2 lakes pieces per month.

The Garmenting divisions have all latest machineries and are well equipped to produce
any bountiful quantity of orders in time with the help of our committed work force guided by the
production managers. They adopt one to one approach for each order using right persons for the
required finish and quality is achieved with the guidance of QC team.
CLIENTS
1. Next
2. Wall Mart
3. Basic London
4. Home Basic



EMPLOYEES

Part time employees 50
Seasonal employees 20
Production employees 30
TOTAL 100


SWOT ANALYSIS

Strength
 Experienced management
 Efficient payables management
 Diversified customer base



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Weakness
 Cut – throat competition
 Inconsistency in collection days
 Low short term solvency ratios
Opportunities
 Growing fashion consciousness globally will drive the demand for subject‘s products
 Mass market : extending availability of products to broad market























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1.4 NEED FOR THE STUDY
There some questions, which arise from the study of financial statements. These could be
―is company‘s profitability adequate? Why is a profit low in spite of increased sales? Why is
there liquidity problem though profitability is good? Why no reason for changes in assets,
liabilities and equity between two dates? Why no dividends are paid though there are good
profits? From where have come cash flows and how they are applied?‖ these and many other
questions need answers, which can be possible when the financial statements are suitably
analyzed
The financial statement analysis deals with meaningful interpretation of financial data
available in financial statements to serve specific purpose of organizations of such data for their
decision making this involves identifying the purpose and selecting suitable means of analysis.
Financial statement analysis is essentially purposive.



























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1.5 OBJECTIVES OF THE STUDY
Primary Objective:

 To analyze the working capital management of the company and to know about the
profitability of the firm.

Secondary Objective:
 To study the various sources and application of funds of the company.
 To study the organizational function of the company.
 To evaluate the performance of Inventory, receivables and cash management of the
company.
 To examine the liquidity position of the company.






























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1.6 SCOPE OF THE STUDY:
In order to find the working capital analysis for different period and its trend of sakthi
Ganesh from the annual report has been considered. The study given a clear cut picture regarding
working capital of the company.

 The present study attempts to obtain a general view of the working capital analysis of
the company.

 The main attempts are made to know the financial position and strength of the
company.

 The company to understand its own position over time.






























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1.7 LIMITATION OF THE STUDY:
 The study covers only five accounting year started from 2008 to 2013.

 The working capital analysis is based on the published balance sheet of the company.

 The limitations of ratios and comparative balance sheet are in maid.

 The study time duration is not enough.

 Since this analysis is based on the annual reports, the manipulations in it will affect the
study.































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CHAPTER II
REVIEW OF LITERATURE
DuPont analysis, a common form of financial statement analysis, decomposes
return on net operating assets into two multiplicative components: profit margin and asset
turnover. These two accounting ratios measure different constructs and, accordingly, have
different properties. Prior research has found that a change in asset turnover is positively related
to future changes in earnings. This paper comprehensively explores the DuPont components and
contributes to the literature along three dimensions. First, the paper contributes to the financial
statement analysis literature and finds that the information in the accounting signal is in fact
incremental to accounting signals studied in prior research in predicting future information by
examining immediate and future earnings. Second, it contributes to literature on the stock
market‘s use of accounting by investors. Finally, it adds to the literature on analysts‘ processing
of accounting information by again testing immediate and delayed response of analysts through
contemporaneous forecast revisions as well as future forecast errors.
Discounted cash flow, method of comparable, and fundamental analysis typically
yield discrepant valuation estimates. Moreover, the valuation estimates typically disagree with
market price. Can one form a superior valuation estimates by averaging over the individual
estimates, including market price? This article suggests a Bayesian frame work justifies the
common practice of averaging over several estimates to arrive at a final point estimate.
The financial statement analysis skills of internal auditors. The author argues that
in order to formulate important business decisions, manager increasingly turn to internal auditor
for information. Financial statement analysis, he claims, is a major tool for delivering such
information because it provides an assessment of the firms viability, stability, and profitability.
He suggests that internal auditors should develop or update their financial statement analysis and
fuse these skills into their engagements.
We provides evidence that, conditional on users performing the analysis
necessary to transform the financial statements to appear as if disclosed information had been
recognized, that information may affect users judgments more than it would have if it had been
recognized initially. Our experiments are set in the context of constructive capitalized of
operating leases.


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The first experiment manipulates three variables that we hypothesize will
contribute to this effect: choice to use transformed financial statements, effort spends on the
transformation process, reconciliation of pre- and post- transformation number. We provide
evidence that, in the constructive-capitalization setting we operationalize, information has a
greater effect on judgments when effort was expended to obtain the information and the
information is displayed in a reconciled format. The second experiment focuses on the effort
effect and replicated it with additional controls. These results have implications for standard-
setters users who transform financial statements as part of their analysis. This combination if
found to improve the default prediction compared with financial statements alone.
Albrecht, W. S. and C. C. Albrecht (2003) In financial statement, analysis are
accumulated by departments, operations, or processes. The work performed on each unit is
standardized, or uniform where a continuous mass production or assembly operation is involved.
For example, process costing is used by companies that produce appliances, alcoholic beverages,
tires, sugar, breakfast cereals, leather, paint, coal, textiles, lumber, candy, coke, plastics, rubber,
cigarettes, shoes, typewriters, cement, gasoline, steel, baby foods, flour, glass, men's suits,
pharmaceuticals and automobiles. Process costing is also used in meat packing and for public
utility services such as water, gas and electricity. Chapter 5 illustrates a cost accounting system
that includes normal historical costing as the basic cost system, full absorption costing as the
inventory valuation method and process costing as the cost accumulation method.
E harris (2008) This book covers the more complex areas of the costing of processes and
operations. It explains how to determine the average cost per unit in process costing in a simple
step-by-step approach, starting with normal losses with no scrap value and working through the
treatment of scrap values, abnormal losses and gains and the sometimes confusing areas of
opening and closing work in progress. The topic of joint product costing is explained covering
both the different methods which can be used to value stock for determining the profit for the
period, and the type of information which is required for a further processing decision. The book
also covers the distinction between joint products and by products and the accounting treatment
required by these types of products.
Randika Lalith Abeysinghe (2009) Process costing / continuous operational costing is
defined in as "The costing method applicable where goods or services result from a sequence of
continuous or repetitive operations or process. Costs are averaged over the units produced during


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the period."It is used where it is not possible to identify separate units of production, or jobs,
usually because of the continuous nature of the production processes involved.
The features of process costing which make it different from specific order costing
methods such as job costing or batch costing are as follows.

The output of one process is the input to subsequent process unit a completed
product is produced.
The continuous nature of production in may processes means that there will
usually be closing work in progress which must be valued. In process costing it is not possible to
build up cost records of the cost of each individual unit of output because production in progress
is an indistinguishable homogeneous mass.
There is often a loss in process due to spoilage, wastage, evaporation and so on.
Output from production may be a single product, but there may also be a byproduct (or by
products) and joint products.
The overhead expenses are generally expended over all the processes involved in
production. These are to be apportioned over the various processes in an amicable manner.

















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CHAPTER III
RESEARCH METHODLOGY
3.1 RESEARCH
Research is defined as a ―systematized effort to gain knowledge‖. Research comprises
defining and redefining problems, formulating hypothesis or suggest solutions, collecting,
organizing and evaluating data , making determine whether they fit the formulating hypothesis,
collection the fact the data, analyzing the facts the reaching certain generalization for some
theoretical formulation.

A research methodology forms the frame work of the entire research process. This
includes the necessary information about materials, techniques for the collection of data
appropriate to particular problem, statistics, questionnaires and controlled experimentation and in
recording evidence sorting it out and interpreting it.


3.2 RESEARCH DESIGN
Descriptive research studies are those studies which are concerned with describing the
characteristics of a particular individual, or of a group. We use descriptive research method for
our research work.

3.3 SAMPLE DESIGN
Sample design refers to the technique or the procedure the research would adopt in
selecting for the sample.
3.4 COLLECTION OF DATA
The study based on both primary data and secondary data. Primary data is collected from
account officers. Secondary data is obtained from annual report and other published documents
of the company.
 Secondary data




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3.5TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS
 RATIO ANALYSIS
 Current ratio
 Quick ratio
 Cash position ratio
 Solvency ratio
 Inventory turnover ratio
 Debtor turnover ratio
 Debtor collection period
 Creditor turnover ratio
 Creditor collection period
 Working capital analysis
 Sales to net working capital ratio
 Current liabilities to net worth
 Net profit ratio

 COMPARATIVE STATEMENT
3.6 DATA COLLECTION METHOD
 Annual report
 Internal report

3.7 Period of the Study
 2008 to 2013








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CHAPTER IV
DATA ANALYSIS AND INTERPRETATION

FINANCIAL ANALYSIS:
Financial analysis is the analysis of the statement of the company to assess its financial
health and soundness of its management. ‗Financial statement analysis‘ involves a study of the
financial statement of a company to ascertain its prevailing state of affair and the reason thereof.
Such a study would enable the public and the investors to ascertain whether one company is
more profitability then the other and also to state the causes and factors that are probably
responsible.
Analytical Designs:-
o Ratio Analysis
o Mean
o Standard deviation
o Coefficient variation
o Comparative balance sheet
RATIO ANALYSIS:
Ratio analysis is a technique of analysis and interpretation of financial statements. It is
the process of establishing and interpreting various ratios for helping in making certain decisions
in these ratios.
A ratio indicates a quantitative relationship, which can be in term used to make a
judgment.
 Current ratio
 Quick ratio
 Cash position ratio
 Solvency ratio
 Inventory turnover ratio
 Debtor turnover ratio
 Debtor collection period
 Creditor turnover ratio


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 Creditor collection period
 Working capital analysis
 Sales to net working capital ratio
 Current liabilities to net worth
 Net profit ratio
 Comparative balance sheet

MEANING OF MEAN:
In statistics, the mean is the mathematical average of a set of numbers. The average is
calculated by adding up two or more scores and dividing the total by the number of scores.
Mean = ∑X
N

MEANING OF STANDARD DEVIATION:-

Standard deviation is a number that tells you approximately how far the values in a data
set deviate from the mean (the average). The larger the standard deviation, the larger the
deviation. The smaller the standard deviation, the smaller the deviation. If all of the values are
equal, the standard deviation is equal to zero.

∑(X- X)
2

MEANING OF COFFICIENT VARIATION:-
A statistical measure of the dispersion of data points in a data series around the mean.


The coefficient of variation represents the ratio of the standard deviation to the mean, and
it is a useful statistic for comparing the degree of variation from one data series to another, even
if the means are drastically different from each other


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4.1 CURRENT RATIO
The ratio of current assets to current liabilities is called current ratio. In order to
measure the short term liquidity or solvency of the concern, comparison of current assets and
current liabilities is inevitable. Current ratio in the case liability of a concern to meet its current
obligations as and well they are due for payment
Current Ratio = Current asset / Current liabilities

TABLE NO 4.1 SHOWING CURRENT RATIO
YEAR
Current Asset
(in Rs)
Current Liability
(in Rs)
Current Ratio
(In Rs)
2007-08 18,67,000 15,88,000 1.17
2009-10 36,40,000 19,95,000 1.82
2010-11 31,75,000 28,88,000 1.09
2011-12 51,94,500 43,79,000 1.18
2012-13 95,79,500 79,00,000 1.21
MEAN SD CV
1.29 0.4 0.12
Source: Secondary data
Interpretation:-
Generally current ratio should be 2:1 but as per our calculation in 2009-10 it was 1.826, it
meanscompany has 1.826 rupees current assets against current liability on rupees 1. Company
hasfewer current assets than current claims against them. In 2012 – 13 company‘s current ratio
is1.215 which is not satisfactory. Its short-term solvency is threatened.






27




FIGURE NO 4.1 SHOWING CURRENT RATIO















0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2007-08 2009-10 2010-11 2011-12 2012-13
CURRENT RATIO
Current Ratio


28

4.2 QUICK RATIO
The term quick assets refers to current assets which can be converted into cash
immediatelyor at a short notice without diminution of value. Included in this category of current
assets are(1) cash and bank balance; (2) short term marketable securities and (3)
debtors/receivables.Thus, the current assets which are excluded are: prepaid expenses and
inventory.
Quick Ratio = Liquid Assets / Liquid Liabilities
Liquid Assert = Current Assert - Stock - Prepaid Expenses
TABLE NO 4.2SHOWING QUICK RATIO
YEARS
QUICK ASSERT
(In Rs)
CURRENT ASSERT
(In Rs)
QUICK ASSERT
RATIO
(In Rs)
2007-08 15,97,000 18,67,000 0.85
2009-10 15,97,000 36,40,000 0.43
2010-11 15,97,000 31,75,000 0.50
2011-12 15,97,000 51,94,500 0.30
2012-13 15,97,000 95,79,500 0.16
MEAN SD CV
2.24 16.30 0.80
Source: Secondary data

INTERPRETATION:-
Generally quick ratio of 1:1 represents a satisfactory current financial condition. But we
haveseen in table that not evens a single year it has achieved. In all five years liquid ratios are
lessthan 1.It indicates that firm has found difficult to meet its obligations because its quick
assetsare lesser than current liabilities. Similarly both years 2009-10 the companyhas good
finance position but later stages it dropped to 0.4 and then to last to 0.1. Company‘s current
financial condition is not satisfactory because liquid assets are less thanLiabilities.



29



FIGURE NO 4.2SHOWING QUICK RATIO














4.3 CASH POSITION RATIO
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2006-07 2007-08 2008-09 2009-10 2010-11
QUICK ASSET RATIO
QUICK ASSET RATIO


30

It may be defined as therelationship between the available cash both at bank and in hand
and current liabilities. A ratio of 1.1 is considered to be a good ratio but a rate of 0.75:1 is also
good. Such a ratio would imply that the firm has enough cash on hand to meet all the current
liabilities.

Cash position ratio = cash / current liabilities

TABLE NO 4.4 SHOWING CASH POSITION RATIO
YEARS CASH
CURRENT
LIABILITIES
RATIO
2007-08 300000 15,88,000 0.18
2009-10 850000 19,95,000 0.42
2010-11 412000 28,88,000 0.14
2011-12 1246000 43,79,000 0.28
2012-13 1188000 79,00,000 0.15
MEAN SD CV
1.17 4.43 0.42
Source: Secondary data

INTERPRETATION:-
The bank cash balance to current liabilities recorded is 0.18, 0.42, 0.14, 0.28 and 0.15 in
the year 2008, 2009, 2010, 2011, 2012 and 2013 respectively. In the year 2010, the highest ratio
was recorded.







31


FIGURE NO 4.3SHOWING CASH POSITION RATIO














4.4 SOLVENCY RATIO
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
2007-08 2009-10 2010-11 2011-12 2012-13
CASH POSITION RATIO
CASH POSITION RATIO


32

It can be define as the relationship between total liabilities and total assets

Solvency ratio = total liabilities / total assets*100

Generally lower the solvency ratio, more satisfactory or stable is the long-term solvency
position of a firm.

TABLE NO 4.4SHOWING SOLVENCY RATIO
YEAR Total Liabilities Total Assets
Solvency Ratio

2007-08 1588000 1867000 85.05
2009-10 1995000 3640000 54.80
2010-11 2888000 3175000 90.96
2011-12 4379000 5194500 84.30
2012-13 7900000 9579500 82.46
MEAN SD CV
397.5 506.36 4.5
Source: Secondary data

INTERPRETATION:-
The above ratio shows90.96% in the year 2011. It has also remained the same in the year
2008. In the year 2012, it was 84.30% and the year 2013 was decreases to 82.46. we can notice
from the ratios calculated above that they have remain almost the same in the five consecutive
years.




33



FIGURE NO 4.4SHOWING SOLVENCY RATIO














4.5 INVENTORY TURNOVER RATIO
0
10
20
30
40
50
60
70
80
90
100
YEAR 2007-08 2009-10 2010-11 2011-12 2012-13
Solvency Ratio
Solvency Ratio


34

This ratio measures the stock in relation to turnover in order to determine how often the
stockturns over in the business.

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Cost of Goods Sold=Sales-Gross Profit

TABLE NO 4.5SHOWING INVENTORY TURNOVER RATIO
YEARS
COST OF GOODS
SOLD
(In Rs)
AVERAGE
INVENTORY
(In Rs)
INVENTORY
TURNOVER RATIO
(In Times)
2007-08 19,21,000 3,81,000 5.04
2009-10 33,81,000 4,43,000 7.63
2010-11 37,24,000 4,01,000 9.28
2011-12 50,24,000 4,37,000 11.49
2012-13 46,40,000 5,14,000 9.02
MEAN SD CV
42.46 5791.65 15.22
Source: Secondary data

INTERPRETATION:
The company inventor turnover ratio of 2007-08 5.04 times and 2011 -12 it increase to 11.49
times which indicates company efficiently manage in inventory it shows that company take
effort to efficient inventory management.






35


FIGURE NO 4.5SHOWING INVENTORY TURNOVER RATIO















4.6 DEBTOR TURNOVER RATIO
0
2
4
6
8
10
12
2007-08 2009-10 2010-11 2011-12 2012-13
INVENTORY TURNOVER RATIO
INVENTORY TURNOVER RATIO


36

It is determined by dividing the net credit sales by average debtors outstanding during
theyear. The analysis of the debtors‘ turnover ratio supplements the information regarding
theliquidity of one item of current assets of the firm. The ratio measures how rapidly
receivablesare collected.

Debtors Turnover Ratio = Net credit sales / Average Debtors

TABLE NO 4.6 SHOWING DEBTOR TURNOVER RATIO
YEARS
NET CREDIT SALES
(In Rs)
AVERAGE DEBTOR
(In Rs)
DEBTOR TURN
OVER RATIO
( in Times)
2007-08 16,68,660 5,06,050 3.30
2009-10 27,24,090 4,37,030 6.23
2010-11 39,90,050 5,47,340 7.28
2011-12 63,20,800 7,97,160 7.92
2012-13 56,81,090 8,50,070 6.68
MEAN SD CV
31.14 3102 11.13
Source: Secondary data

INTREPRETATION
The company‘s debtor‘s turnover ratio of 2007-08 3.30 times, in 2011-12 7.93 times in a
yearwhich indicates company collects its receivable rapidly. We can say year to year the shorter
Time lag between credits sells and collection.




37


FIGURE NO 4.6SHOWING DEBTOR TURNOVER RATIO

















0
1
2
3
4
5
6
7
8
2007-08 2009-10 2010-11 2011-12 2012-13
DEBTOR TURNOVER RATIO
DEBTOR TURN OVER RATIO


38

4.7 DEBTOR COLLECTION PERIOD

Debtors Collection Period is calculated from following formula:

Debtors Collection Period = 360 days / Debtors Turnover Ratio

TABLE NO 4.7 TABLE SHOWING DEBTOR COLLECTION PERIOD
Source: Secondary data

INTREPRETATION
According to debtor collection period from above table, Company was following liberal
Credit policy as its collection period of 2007-08 was 109 days. But on account of
negativeWorking it has changed its credit policy and reduced its collection period in 2012-13 by
54 days

YEARS DAYS IN YEAR
DEBTOR
TURNOVER RATIO
(In Times)
DEBTOR
COLLECTION
PERIOD
(in days)
2007-08 360 3.30 109
2009-10 360 6.23 58
2010-11 360 7.28 49
2011-12 360 7.92 45
2012-13 360 6.68 54
MEAN SD CV
315 320262 113.18


39



FIGURE NO 4.7SHOWING DEBTOR COLLECTION PERIOD RATIO














0
20
40
60
80
100
120
2007-08 2009-10 2010-11 2011-12 2012-13
DEBTOR COLLECTION PERIOD
DEBTOR COLLECTION PERIOD


40


4.8 CREDITORS TURNOVER RATIO

Creditors Turnover Ratio = Net Credit Purchase / Average Creditors

TABLE 4.8 SHOWING CREDITOR TURNOVER RATIO
Source: Secondary data

INTERPRETATION:-
Above stated graph indicates that in Mar‘06 Company has settled its creditor‘s accounts
2.61Times in a year. In Mar‘07 it had increased by 3.22 which show that company had settled its
account rapidly. From Mar08 to Mar‘10 it has paid its creditor‘s account average of 3 times. If
creditor‘s Turnover ratio is high, company‘s requirements of working capital will increase and
vice versa.

YEARS
NET CREDIT
PURCHASE
(Rs)
AVERAGE CREDITOR
(In Rs)
CREDITOR
TURNOVER RATIO
(Times Per Year)
2007-08 20,58,057 7,86,059 2.61
2009-10 32,94,400 10,20,590 3.22
2010-11 33,54,500 11,21,190 2.99
2011-12 52,05,670 17,17,900 3.03
2012-13 46,50,700 19,73,300 2.35
MEAN SD CV
14.2 645.72 5.08


41



FIGURE 4.8 SHOWING CREDITOR TURNOVER RATIOS















0
0.5
1
1.5
2
2.5
3
3.5
2007-08 2009-10 2010-11 2011-12 2012-13
CREDITOR TURNOVER RATIO
CREDITOR TURNOVER RATIO


42


4.9.CREDITORS COLLECTION PERIOD

Creditor’s Payment Period = 360 / Creditors Turnover Ratio

TABLE NO 4.9. SHOWING CREDITOR COLLECTION PERIOD
Source: Secondary data

INTERPRETATION:
According to creditor collection period from above table, Company was following
liberalCredit policy as its collection period of 2007-08 was 137 days. But on account of
negativeWorking it has changed its credit policy and reduced its collection period in 2010-11 by
120days.Later on collection period was gradually increased to 153 days in the year 2012-13.



YEARS DAYS IN YEAR
CREDOTORS
TURNOVER RATIO
(Times Per Year)
CREDITORS
COLLECTION
PERIOD (In Days)
2007-08 360 2.61 137
2009-10 360 3.22 111
2010-11 360 2.99 120
2011-12 360 3.03 123
2012-13 360 2.35 153
MEAN SD CV
644 1328236 230.49


43


FIGURE 4.9 SHOWINGCREDITOR COLLECTION PERIOD















0
20
40
60
80
100
120
140
160
2007-08 2009-10 2010-11 2011-12 2012-13
CREDITORS COLLECTION PERIOD
CREDITORS COLLECTION
PERIOD


44

4.10WORKING CAPITAL ANALYSIS
The working capital is calculated from current assets and current liability. It indicate the
total sum of money need for carried out day to day expenses in business
Working Capital = Current Assets – Current Liabilities

TABLE NO-4.10 SHOWING WOKING CAPITAL FOR YEARENDED
(In Rs)
Year Current Assets Current Liabilities Working Capital
2007-08 18,67,000 15,88,000 2,79,000
2009-10 36,40,000 19,95,000 16,45,000
2010-11 31,75,000 28,88,000 2,87,000
2011-12 51,94,500 43,79,000 8,15,500
2012-13 95,79,500 79,00,000 16,79,500
MEAN SD CV
4706000 19598239 885.4
Source: Secondary data

Interpretation:-
From 2007- 08 company‘s working capital is negative which indicates companies
operating efficiency during this period goes down and company is facing difficulties in meeting
its day to day obligations. In 2009 and 2013 its working capital is positive, which intimates
improvement in operating efficiencies.






45



FIGURE NO 4.10 SHOWING WOKING CAPITAL FOR YEARENDED















0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2008-09 2009-10 2010-11 2011-12 2012-13


46

4.11SALES TO NET WORKING CAPITAL RATIO

Sales to Net Working Capital Ratio = Sales / Net Working Capital

TABLE NO 4.11 SHOWING NET WORKING CAPITAL RATIO
YEARS
NET CREDIT SALES
(In Rs)
NET WORKING
CAPITAL
(In Rs)
NET WORKING
CAPITAL RATIO
(In Rs)
2007-08 1668660 2,79,000 5.98086
2009-10 2724090 16,45,000 1.655982
2010-11 3990050 2,87,000 13.90261
2011-12 6320800 8,15,500 7.750828
2012-13 5681090 16,79,500 3.382608
MEAN SD CV
32.4 3920.04 12.52
Source: Secondary data


INTERPRETATION
The sales to net working capital ratio holds good. There is step increase in the year 2010-
11 because of the increase in the liability of the firm. The working capital of the firm is
decreasing after 2012-13 due to delay in collection period.





47


FIGURE NO 4.11 SHOWING NET WORKING CAPITAL RATIO
















0
2
4
6
8
10
12
14
2007-08 2009-10 2010-11 2011-12 2012-13
NET WORKING CAPITAL RATIO
NET WORKING CAPITAL RATIO


48

4.12 CURRENT LIABILITIES TO NET WORTH

Current Liability to Net Worth = Current Liability / Net Worth

TABLE NO 4.12 SHOWING CURRENT LIABILITIES TO NET WORTH
YEARS
CURRENT
LIABILITY
NET WORTH
CURRENT
LIABILITY TO NET
WORTH (%)
2007-08 15,88,000 10,94,000 145.1554
2009-10 19,95,000 17,30,000 115.3179
2010-11

28,88,000
26,64,000 108.4084
2011-12

43,79,000
43,79,000 100
2012-13

79,00,000
79,00,000 100
MEAN SD CV
568.8 1036789 203.64
Source: Secondary data

INTERPRETATION:
The current liability to net worth ratio shows the ability of the firm to meet its liability.
The above analysis shows that the company has less net worth to meet the liabilities. If this
continues the company may face a huge problem. The company should increase its net worth by
increasing its capital and it should reduce the liabilities especially the loans secured.





49


FIGURE NO 4.12 SHOWING CURRENT LIABILITIES TO NET WORTH
















0
20
40
60
80
100
120
140
160
2007-08 2009-10 2010-11 2011-12 2012-13
CURRENT LIABILITY TO NET WORTH
CURRENT LIABILITY TO NET
WORTH


50

4.13 NET PROFIT RATIO
This ratio determines the overall efficiency of the business. The relationship of net profit
To sales is known as net profit ratio. It also called as sales margin ratio (or) profit margin ratio.

Net Profit Ratio = Net Profit / Sales*100

TABLE NO 4.13 SHOWING CURRENT LIABILITIES TO NET WORTH
YEARS
SALES
(In Rs)
NET PROFIT
(In Rs)
NET PROFIT RATIO
2007-08 1668660 2,79,000 16.72
2009-10 2724090 16,45,000 60.38
2010-11 3990050 2,87,000 7.19
2011-12 6320800 8,15,500 12.90
2012-13 5681090 16,79,500 29.56
MEAN SD CV
126.75 53213.6 46.13
Source: Secondary data
INTERPRETATION:
The above table financial analysis of the net working capital ratio of the company is good
financial performance of the statement. In the year 2009-12 most increase in 60.38 and another
year decrease from the period.





51


FIGURE NO 4.12 SHOWING NET WORKING CAPITAL TO NET WORTH
















0
10
20
30
40
50
60
70
2007-08 2009-10 2010-11 2011-12 2012-13
NET PROFIT RATIO
NET PROFIT RATIO


52

4.12 COMPARATIVE BALANCE SHEET
The Comparative balance sheet analysis is the study of the trend of the same items, group
of items and computed items in two or more balance sheets of the same business enterprise on
different dates.
The changes in periodic balance sheet items reflect the conduct of a business. The
changes can be observed by comparison of the balance sheet at the beginning and at the end of a
period and these changes can help in forming an option about the progress of an enterprise.
The comparative balance sheet has two columns for the data of original balance sheets. A
third column is used to show increase in figures. The fourth column may be added for giving
percentages of increases or decreases























53

TABLE NO 4.12.1 COMPARATIVE BALANCE SHEET FOR 2009 TO 2010
Years
2009
(In Rs)
2010
(In Rs)
Comparative 2009
and 2010
(In Rs)
Increase or
Decrease in
percentage (%)
Capital 2,54,000 3,52,000 98,000 16.1
Net worth 17,30,000 26,64,000 9,34,000 21.2
Total
Liabilities
19,95,000 28,88,000 8,93,000 18.2
Reserves 1,37,90,000 2,31,20,000 93,30,000 25.2
Net Block 16,90,00,000 28,41,00,000 11,51,00,000 25.4
Investments 3,51,000 13,28,000 9,77,000 58.1
Sundry
Debtors
10,28,000 2,47,000 -7,81,000 -61.2
Cash and
bank
balance
8,50,000 4,12,000 -4,38,000 -34.7
Net Current
assert
30,79,000 24,23,000 -6,56,000 -11.9
Current
Assert
36,40,000 31,75,000 -4,65,000 -6.8
Source: Secondary data
INTREPR.ETATION
As per the table 2oo9 Kodiss apparels total liability was increased to 18.2 % as compare
with 2010. The asset was decreased to -6.8%. So company should increase their asset and
reduce liability over all financial performances is little lower when compare to 2009.the
company should take necessary steps to overcome.






54















-80
-60
-40
-20
0
20
40
60
80
100
Capital Reserves Investments Inventories Sundry
Debtors
Cash and
bank
balance
Fixed
deposit
I
n
c
r
e
a
s
i
n
g
-
-
>

Decreasing -->
Comparative Balance sheet for 2009 to 2010 in %


55

TABLE NO 4.13.1 SHOWING COMPARATIVE BALANCE SHEET FOR 2010TO 2011
Years 2010 2011
Comparative
Balance
Sheet Of
2010 and
2011
Comparative
Balance Sheet Of
2010 and 2011 in
(%)
Capital 7,05,000 70,00,000 62,95,000 81.70
Net worth 43,79,000 79,00,000 35,21,000 28.67
Reserves 3,67,60,000 7,19,50,000 3,51,90,000 32.37
Net Block 2,92,40,000 2,82,50,000 -9,90,000 -1.72
Inventories 3,66,000 50,90,000 47,24,000 86.58
Sundry Debtors 18,47,000 7,48,000 -10,99,000 -42.35
Cash and bank
balance
12,46,000 11,88,000 -58,000 -2.38
Net Current
assert
38,15,500 83,28,700 45,13,200 37.16
Fixed deposit 3,69,000 9,84,100 6,15,100 45.45
Current Assert 51,94,500 95,79,500 43,85,000 29.68
Source: Secondary data
INTREPR.ETATION
As per the table 2o11 company sundry debtor was decreased to 42.2 % as compared with
2010. O company follow strict collection policy in order to get receivables the company was
inventory increased nearly 80%. so company should decreased the inventory by reduce the
stocks. Over all financial performances is good when compare to 2011.the Company should take
necessary steps to overcome.


56















-60
-40
-20
0
20
40
60
80
100
Comparative Balance Sheet for 2010 to 2011 in (%)


57

CHAPTERV
5.1 FINDINGS
 The current ratio of the company is not up to the mark. 1.82
 Liquid ratio is keep reduced from 0.8 to 0.16
 The collection period is high from 3 times to 6 times
 Sales are keeping reduced due to week of industry.
 The net worth of the company is less. Is 100%
 The current asset of the company is low as the return on sales is delayed
 The inventory of the company is less as the dresses are manufactured according to the
order.
 The liability of the firm is high as the company has to more interest on loans obtained.
 The total liability to net worth ratio doesn‘t holds good as the net worth of the company
tends to be low.
 The working capital of the company is weakening year by year as the collection period
increases.


















58

5.2 SUGGESTIONS
Keeping in view the stated observation relating to the project study, the following are the
measurers and terms of suggestions are founded out which the SAKTHI GANESH TEXTILES
(P) LTD should follow to improve the performance of the company.
 The company locked large amount of current assets. So the company should try to control
the cost among the inventories and other current assets.
 The management of SAKTHI GANESH TEXTILES (P) LTD should adopt the practical of
periodical intercompany comparison. This comparative study will help to pin point the
area of weakness and strength the management to take timely corrective action.
 Problem of surplus investment in inventory and receivables in SAKTHI GANESH
TEXTILES (P) LTDcan largely be tackled through improved co-ordination in functioning
of some strategic departments such as purchase, production, marketing and finance,
strengthening up of management information system in SAKTHI GANESH TEXTILES (P)
LTD.



















59

5.3 RECOMMENDATIONS

 The company has to reduce the collection period.

 The company should get into an agreement with the debtors in order to collect the
money back.
 The company should try to pay back the loans obtained so that the liability of the
company is brought down.
 Net profit of the company can also be increased by increasing the sales and other
incomes simultaneously reducing the cost of goods sold, operating and other expenses.
 The amount of working capital of the company has reduced in 2006 to 07.so company
may increase asset by increasing cash and bank balance through efficiently.
 The company may take steps to see that time allotted for the debtor to repay.
 To have the efficient working capital management, the short term funds should be used
efficiently in the operations of the business. In the management capital investment in
current assets must be systematically planned. It is advice able to follow a studied and
credit policy it improve the standard of liquidity
 Cash and bank balance was very low. It is suggested that cash and bank balance should
be increased, so as to meet working capital needs and current liabilities.







60

5.4CONCLUSION
 The project entitled “―AN ORGANISATIONAL STUDY AND STUDY ON WORKING
CAPITAL ANALYSIS WITH SPECIAL REFERENCE TO SAKTHI GANESH
TEXTILES (P) LTD ERODE”” is undertaken with the objective of examining the
working capital analysis and to measure the profitability.
 From the study the current ratio and quick ratio is not up to the standard norms 2:1 and
1:1; Gross profit and Net profit position of the company is not good; Liquidity position
of the company is good; Long-term solvency position of the company is also good from
the analysis; Return on total assets quite good; Growth in sales is good; The company
should increase its sales and to decrease its expenses.


61

5.5BIBILIOGRAPHY

Management Accounting - R.K. Sharma and Shashi Gupta, 2001 ( New Delhi)
Financial Management - I.M. Pandy ― Vikas Publishing House Private Ltd‖ 2009-09-07
Management Accounting – M.K. Khan and P.K Jain ―Tata Mcgraw-Hill publishing house
P.Mohana Rao and Alok L.Pramanik, ―working capital management‖-Deep & Deep Publications
Ltd,
New Delhi

WEB SOURCE
www.Google.com
www.fincialthoughtsinindia.co.in





















62

BALANCE SHEET AS ON YEAR ENDED
Balance Sheet of AN ORGANISATIONAL STUDY AND STUDY ON WORKING
CAPITAL ANALYSIS WITH SPECIAL REFERENCE TO SAKTHI GANESH TEXTILES
(P) LTDERODE
Years 2008-09 2009-10 2010-11 2011-12 2012-13
Source Of Funds

Capital 2,54,000 2,54,000 3,52,000 7,05,000 70,50,000
Net worth 10,94,000 17,30,000 26,64,000 43,79,000 79,00,000
Total Dept 4,94,000 2,65,000 2,24,000 0 0
Total Liabilities 15,88,000 19,95,000 28,88,000 43,79,000 79,00,000
Total Share Capital 25,40,000 25,40,000 35,20,000 70,50,000 70,50,000
Reserves 84,00,000 1,37,90,000 2,31,20,000 3,67,60,000 7,19,50,000
Secured Loans 11,50,000 4,10,000 40,000 0 0
Unsecured Loans 37,90,000 22,40,000 22,10,000 0 0
Application Of
funds

Gross Block 3,04,10,000 40,53,00,000 5,35,00,000 5,59,50,000 56,60,00,000
Less Depreciation 1,55,50,000 23,63,00,000 2,50,90,000 2,67,10,000 28,35,00,000
Net Block 1,48,60,000 16,90,00,000 2,84,10,000 2,92,40,000 28,25,00,000
Working Capital In
Progress
0 0 0 3,20,000 3,64,000
Investments 6,00,000 3,51,000 13,28,000 3,56,500 9,38,700
Inventories 3,13,000 8,50,000 4,36,000 3,66,000 50,90,000
Sundry Debtors 3,84,000 10,28,000 2,47,000 18,47,000 7,48,000
Cash and bank balance 3,00,000 8,50,000 4,12,000 12,46,000 11,88,000
Net Current assert 15,97,000 30,79,000 24,23,000 38,15,500 83,28,700
Loan And Advance 2,61,000 5,48,000 5,61,000 10,10,000 2,66,700
Fixed deposit 9,000 13,000 1,91,000 3,69,000 9,84,100
Current Assert 18,67,000 36,40,000 31,75,000 51,94,500 95,79,500