Cateen

Store
Depart
ment

Table of Contents
1.
2.
3.
4.
5.

AcknowledgementPage No.04
History Canteen Store Department (CSD) ..Page No.05
Functional Spectrum.Page No.06
Organization Structure (CSD) .Page No.08
Canteen Store Department - Sales and Distribution Division .Page No.09
a. Pricing Policy
b. Demand Procedure
c. Software and Network Architecture
d. Inventory Control
e. Monthly Stock Verification
f. Overstock Handling
g. Recovery
h. Sales Volume
i. Slowing Moving/Dead Stock
j. Negative Sales
6. Canteen Store Department Computer Section Hire Purchases.Page No.14
a. Comparison between New and Old
7. Canteen Store Department - Finance and Administrative Division.Page No.16
a. F1 {Pay Sheet, Final statement, Over Time Payment and TADA}
b. F2 (a) {Cash Book, Daily Sale (All Credit), Monthly Sale Report, P&L}
c. F2 (b) {Ledger & Trail Balance, Budget Estimation preparation, Income Statement }
d. F3
e. F4 (Computer Section) {Payroll system, Purchase Order}
8. Financial Analysis.Page No.21
a. Ratio Analysis
i. Liquidity
ii. Activity
iii. Debt
iv. Profitability or Coverage
b. Horizontal Analysis
c. Vertical Analysis
9. Data AnalysisPage No.25
a. Cost Sheet
b. Break-even Analysis
10. Conclusion
11. Annexures/Documents

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Acknowledgment

First of all we are thankful to Almighty Allah who has always been helping
throughout our lives and while working on the project.
We would like to express the deepest appreciation to our co-workers, who has
the attitude and the substance of a genius.
And most importantly we thank to our respected Sir, Ahmed Fraz in regard to
teaching. Without his guidance and help this dissertation would not have been
possible.

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Canteen Store Department CSD

History
Canteen stores department was established with the name of Army canteen board after World War I
to cater with the needs of the soldiers. During 1927-28 the Army canteen board was liquidated in
favor of Canteen contractors syndicate ltd.. The main objective of that organization was, in the
event of war this organization would be taken over by the govt. of India lock, stock and barrel. In
1942, it became Canteen stores department (CSD). In 1947, when the assets of India and Pakistan
are distributed between both the countries, CSD became Canteen stores department Pakistan under the
control of ministry of defense.

Status of Canteen Store Department

1. Initially ministry of defense was responsible for A/Cs and finance for the entire organization.
That practice became unsuited day by day and in 1959, it was decided that this organization
should be treated as a non-government commercial concern under the control of ministry of
defense for the welfare of armed forces.
2. As CSD is under the army rule so in an appeal in November 1982, Supreme Court exempted
the employees of CSD from the operation of independent relations ordinance 1969.
3. CSD proved to be as an essential service donor in 1965 and 1971 wars. During the emergency
the manual of Pakistan military law will apply to all CSD employees.
4. Today CSD is the largest retail chain of Pakistan with their shops in the congested as well as
in the remote areas all over the country.

Retail Chain CSD

There are three distinctive features of retail chain.
1. Centralization
2. Specialization
3. Standardization
Centralization is the concentration of policy and decision making in one location either called central
head quarter or the home office. A retail chain has a high degree of specialization, which incorporates
a greater number of functional divisions in its organizational structure. Also a retail chain has a high
degree of standardization or similarities between the operating and merchandising operations of the
business.

Mission Statement
a) To provide entitled customers with standard quality items of daily use, other than those
supplied from the govt. or army authorized source at reasonable rates through its retail shops
and unit canteens.
b) To form the basis of an efficient canteen organization in the event of peace and war for troops
located anywhere in the country and operational areas during war.

Field organization
At field level CSD is classified into three zones according to the geographic regions of Pakistan.
i.

South

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ii.
iii.

Center
North

Each zone has zonal depots, internal auditors, zonal shops and petrol pumps under its supervision.

Functional Spectrum
In the past sixty years, CSD network has undergone rapid growth. Today, it comprises 6 Zones, 126
Outlets, 5 Zonal Depots, 32 Hire Purchase Business Centers and 3 Petrol Pumps. The growth of CSD
outlets in the past five years is depicted below:-

Expansion in the network, dedication of CSD staff and confidence of clientele helped the exponential
growth of CSDs business. Despite facing tough competition from the newly-established
Multinational retail stores in major cities, CSD has made tremendous strides. Growth in business
volume in the past five years is depicted in the chart:-

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Retail Business
Retail Merchandising is the major segment of our business. It contributes approximately 55 % in
CSDs total business. Our range of products includes:

Food Items
Meat/Fish/Chicken
House hold
Personal Care
Textile / Linen
Fruit & Vegetables
Hygiene / Chemical Group
Army Uniforms / Schools Uniforms / Stationery
Garments / Hosiery
Furniture

Hire Purchase
CSD is running a well-articulated Hire Purchase Scheme since 1974, for the personnel of Armed
Forces and some fraternal organizations. Under this scheme, durable household items like Cars,
Motor Cycles, Refrigerators, Deep Freezers, TVs, Air Conditioners, Computers, Generator Sets and
Sewing/Washing Machines are sold to authorized beneficiaries, on easy installments. The Scheme
now boasts over 1, 81,000 members, with annual outlay of Rs 5.1 Billion (FY 2011-12). This scheme
is very popular amongst the Armed Forces personnel.

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Organizational Structure
Board of Control (BOC): The functioning of CSD is regulated by its BOC. BOC lays down general
policy guidelines and exercises control over functioning of CSD. Its composition is as under:

Chairman - Quartermaster General

Members - Senior Joint Secretary (Ministry of Defense) Financial Adviser Army
Representative Pakistan Navy Representative Pakistan Air Force Managing Director CSD
Secretary CSD

Head Office: Operational aspects of CSD are managed by the Managing Director (a retired officer)
appointed by Ministry of Defense, on the recommendations of Chairman BOC. For the execution of
his responsibilities he is assisted by the following Directors:

Director Human Resource Div

Director Administration Div
Director Sales & Distribution Div
Director Procurement Div
Director Finance & Accounts Div
Director Information Technology Div

Field Offices: SD shops are spread throughout the country. CSDs field infrastructure comprises five
Zones and a Sub Zone. Each zone is looked after by Zonal Manager, assisted by Deputy Zonal
Manager. Field organization also includes five depots. Number of CSD Shops in each zone is as
follows:

Karachi Zone - 13 Shops

Lahore Zone - 24 Shops
Multan Zone - 12 Shops
Rawalpindi Zone - 35 Shops
Peshawar Zone - 15 Shops
Quetta Sub Zone - 8 Shops

Organization Chart

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Canteen Store Department - Sales and Distribution Division

Pricing policy
1. The sale price shall be lower than the prices prevailing in other compatible outlets.
2. Common item shall not be costlier than the Utility Stores Corporation sale prices.
3. 2% discount shall be given on retail sale prices to unit canteen contractors and other
institutional sales.
4. Efforts shall be made to ensure that the retail sale prices are as close as possible to the
wholesale rates in the market.

PCL group
PCL (Price change list) group is a separate group in P & S Division, which is responsible for,
1. Price fixing.
2. Price revision.
3. Price monitoring.
PCL section is a centralized portion of P & S Division where al the retail prices of CSD goods are
decided. First when a new product is introduced, PCL section adjusts the price of new product.
PCL section has a close coordination with rest of the groups of the division thats why whenever
the price of any product is changed; the PCL section decides the revised retail price of the
product, which is lesser than the market and USC prices.
USC is the main competitor of CSD and it is the goal of Canteen Stores Department to keep their
prices lesser than USC. In every major station of CSD, there is a board appointed by GHQ
consisting of two or three armed forces personnel. The prime responsibility of that board is to
monitor the prices of CSD shops in that particular area. This board reports the price fluctuations at
CSD shops in that particular area on quarterly basis.

Draft PCL
The entire price induction, revision and monitoring are recorded in a form called Draft PCL.

Computer Section at PCL section

Two stand-alone computers are in PCL group, which are working in FoxPro 2.6 while all reports
are issued in Microsoft access. There is a main item file, which constitutes of the entire ASL
product list, their type, their previous and current prices etc. Each item in this file is represented
by a unique cat-no, as it is the primary key of almost all the files.

Demand procedure
There is a distinction between the demand procedure of other groups with that of durable group as all
the items under this group is centrally procured. On the basis of information retrieved from the shops
and hire purchase division, this group sends a demand letter to the suppliers. This is the prime
responsibility of this group to ensure the required inventory stock at CSD shops so that the products
are issued to the respective customers on time.

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After the demand has been placed to the concerned shop, the shop manager sends the suppliers
bill along with a RV and then the usual billing process is followed.

1. Audit shop account

Audit of stock sheets of shops on value basis by comparing related documents i.e. rates of items
on stock sheets with PCL, receipt, issue/transfer, return to supplier invoices, credit/ debit notes
etc.

2. Audit depot account

Audit of stock sheets of depots on quantity basis by comparing related documents i.e. quantity/
value of items on stock sheets with receipts, issue/ transfer, return to supplier invoices and credit/
debit notes etc.

3. Data Entry of the Following

a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.

Stock in hand.
Previous balance stocks.
Entry + audit of transfer goods voucher.
Entry + audit of receipt goods voucher.
Entry + audit of debit notes.
Entry + audit of credit notes.
Entry of return to supplier voucher.
Entry of change in PCL.
Landed value.
Entry of DCS (deposit cash sale).
Entry of hire purchase credit note.

4. Retrieval of Necessary Reports

This section publishes various reports pertaining information about the inventory and running
stocks of depots and shops.
a) Reports regarding each shop are as follows.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.

Summary of monthly account of each shop.

Stock sheet report.
Negative sale report.
List of receipts from other shops.
Summary of packing material for each shop.
List of receipts from supplier/ depots etc.
List of debit notes.
List of credit notes.
Return to suppliers report.
Landed value of goods in transit.
Landed value of return to suppliers.
Summary of landed value of shops/ depots.
Summary of landed cost.

b) The reports regarding sale of items, depot and zone etc. are as follows.
i.
ii.

Sale of an item shop wise (selected shop).

Sale of an item shop wise (all shops).

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iii.
iv.
v.
vi.
vii.
viii.
ix.

Sale of an item department wise (selected items).

Sale of all items department wise.
Zonal items wise sale.
Slow moving items zone wise.
Shop wise surplus or deficiency of selected items.
Sale / stock / value of centrally procured items.
Sale / stock of hire purchase items.

(c) Reports regarding stock are as follows.

i.
ii.
iii.
iv.
v.
vi.
vii.
viii.

Over stocking state (more than 45 days).

Under stocking state (stock less than 30 days).
Over stocking state of not demanding items (stock more 45 days).
Under stocking state of not demanding items (stock less 30 days).
Dead stock report (if average monthly sale of an item of less than 10% of existing stock,
the item is considered as dead).
Slow moving stock report (if average monthly sale of an item is less than 30% of existing
stock, the item is considered as slow moving item).
Surplus stock.
Zone wise stock.

Software and Network Architecture

In S & D Computer Section the software, which is installed, is made in FoxPro 2.5 with Peer to
Peer network topology since 1992.
Poly Project and its duties:
To cater with the shopping and packing bags requirements, following machines were installed in
the vicinity of head office in 1992.
1. Poly project lane extruder machine Rs. 250,000
2. Sealing/ cutting machine Rs. 65,000
3. Printing machine Rs. 200,000
i.
Up gradation in 2000 Rs. 175,000
ii.
Total investment Rs. 690,000

Production capacity
1. Shopping bags
2. Packing bags
Requirement

North zone 2250 kg.

1900 kg.
Central zone 1459 kg. 900 kg.
South zone 950 kg.
1050 kg.
Total 4950 kg. 3850 kg.
Production
Total 5500 kg. 3000 kg.

Finished material of packing bags is procured from the market via P & S Division while sealing,
printing and cutting is done at the project. Shopping bags are completely prepared in the project.
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Joint activities
Following are the major activities at S & D Division, which take place in collaboration with the
manual section and the computer section.

1. Inventory control
Stock level for shops and depots is laid down proportionate to monthly sale to ensure that
overstocking does not take place and funds are not blocked. The following stock levels have been laid
down.
Categories

Running stock

Reserve stock

Outstation shops
shop.

30

30, 50% of reserve is at depot and 50% at

Local station shops

30

------------

Zonal depots

---------------

15

2. Monthly Stock Verification

The most important job of Stores and Distribution Division is checking/ scrutinizing of monthly
accounts of each shop/ depot all over the Pakistan. A board physically checks stock of each shop/
depot once in the month. Surprise stock taking also takes place, which is conducted by the board in
collaboration with the zonal office/ head office for selected shops. The board conducts annual
stocktaking in every June.

Stocktaking Procedure
The board itself or their liaisons collect stock sheets from the respective shop/ depot that is prepared
in triplicate. Two copies are sent to Stores and Distribution Division and one copy to respective depot.
These sheets after detachment of annexed transfer invoices, summaries and other supported
documents are passed on to Computer section for the purpose already spelt out. One set of the
observation of the computer section regarding shortage/ surplus is returned to shops with instructions
to raise justification for each difference in their calculations. The volume of work at S & D computer
section can be ascertained by the fact that about 5000 sheets involving approximately 1.25 million
entries are verified every month. The verification process entails the observation of the following
accounts.
a)
b)
c)
d)
e)
f)
g)
h)
i)

Opening balance.
Receipt voucher.
Transfer invoices.
Debit/ credit notes.
Cash deposit/ bank statement.
Credit sales invoices.
Stock in hand.
Hire purchase credit notes.
PCL.

3. Overstock handling

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Depots/ shops are expected to place demands after due consideration of existing stock/ expected sale.
Due to many reasons they often falter and over stocking takes place. This overstocking is removed by
the option of liquidation.
Options for liquidation
j)
k)
l)
m)

Transfer to potential sale areas.

Return to suppliers.
Readjustment of sale price.
Bulk sale (Discount on bundles of items).

4. Recovery/ Regularization of Losses

Losses/ shortages frequently occur at Canteen Stores Department. Most of them are detected during
scrutiny of stock sheets monthly/ surprise stock taking conducted by the head office team/ zonal team.
Comprehensive SOPs exist for the regularization through departmental/ court actions. Better
management at zonal level and frequent visits/ inspections by head office teams can help reduction in
these losses.
Shortages in the depot/ shop usually occur due to some of the following reasons.

Preparation of wrong receipt/ issue/ transfers invoices.

Wrong entry of cat-no of an item.
Wrong entry of sale price of certain item (ignoring latest PCL).
Entry of fake stock figures by the shopkeeper.
Less deposit of sale proceeds in the bank.
Knowingly or unknowingly wrong preparation of debit/ credit notes by the shopkeeper.

Sale volume
Shops are classified on the basis of volume of monthly sale as follows:

Sale volume

Class

5 million and above

0.8 Million and above

II

0.4 Million and above

III

0.15 Million and above

IV

0.15 Million and below

Slow Moving/ Dead Stocks

Based on monthly sale, the stocks are classified as follows.
Slow moving items

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The stocks with less than 30% sale of an existing stock monthly are called slow moving
items.
Dead stock items
The stocks with less than 10% sale of an existing stock monthly are called dead stock items.

Negative Sale
It means excessive inventory. The shop manager is also responsible to raise justifications for the
excessive inventory, which do not match with the shop accounts at S & D Computer Section.

Canteen Store Department Computer Section Hire Purchases

As an integral part of the Hire purchase division, the Computer Section is involved in the following
activities.
1)
2)
3)
4)
5)
6)
7)
8)

Processing and delivery of DOs.

Processing and delivery of First letters.
Processing and delivery of Credit notes.
Processing and delivery of daily bank receipts.
Processing and delivery of adjustment and transfer cases.
Processing and delivery of refund cases.
Processing and delivery of retirement cases.
Processing and delivery of pending list (analysis of present and the past stock
information of each HP shop).

Since the distant past FoxPro 2.6 was incorporated in the Computer Section of Hire purchase division.
This software was capable to enter the necessary information about the transactions and to print major
notes.
With the passage of time, it had been seen that that software is not pertinent for the existing
requirements and could not fulfill some of the basic requirements of the system such as maintenance
of side charts, recording of daily bank receipts, MIS reports etc. This was an early impetus for the
development of the new software.
New software in HP Computer Section
Recently new software by Fuji soft, which has been made in Oracle 6i, is incorporated in HP
Computer Section. This software is capable of maintaining some additional utilities such as
maintenance of side charts, daily bank receipts, MIS reports etc.

Comparison between New and Old Software

Specifications

Old software

New software

Built in

FoxPro 2.6

Oracle 6i

Network topology

Peer to peer

Star

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Database

Distributed

Huge record maintenance

Difficult

Speed

High

Low

Efficiency

High

Low

Utilities

Less

More

Data entry

Easy

Laborious

Training required

Less

More

Hard ware capabilities

Low

High

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Centralized
Easy

Canteen Store Department - Finance and Administrative Division

Mainly F & A Division is divided in to five sections.
1.
2.
3.
4.
5.

F1
F3
F2 (a)
F2 (b)
F4 (Computer section)

F1 and F3 are concerned with finance while F2 (a) and F2 (b) are wholly concern with
accounting. F4 is a computer section, which is a central part of the division.
F1
This is a first section of finance division. The major responsibilities of this section are,
1.
2.
3.
4.
5.
6.
7.
8.

Processing of pay sheets.

Mail received and dispatch for the entire division.
Recruitment for the division.
Final settlement.
Overtime and other allowances.
TADA
Imprest funds maintenance.
Miscellaneous.

1. Processing of pay sheets

This is the most important work of this section. Following is the major activities of the process.

Various departments and shops send a pay sheets including all the information about the pay
and allowances and all the increments and decrements etc. of the employees.
F1 pre audits that pay sheets and then send them to computer section.
Computer section checks all the pros and cons of that pay sheets and send a printed copy of
final voucher to liaison officer.
Liaison officer then dispatches that voucher to F2 (b) for payment.

2. Mail received and dispatch

All mails, DCS (Daily cash statement) etc. of the entire division are arrived and dispatch at this
section. One person is for receiving and one for mail dispatch.

3. Recruitment for the division

F1 is also responsible for recruitment of employees for F & A Division as well. This segment of this
section keeps track of all of the employees that are appointed for F & A Division by P & A Division.

4. Final settlement

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If the job of any employee is terminated due to any reason, this segment of the section assesses the
remaining dues that are obligated to pay to that particular employee. The final account is then
transferred to F2 (b) for payment.

5. Over time and TADA payments

This segment audits all the claims from all divisions for overtime and TADA and then issues a
payment voucher that is further transferred to F2 (b) for payments.

6. Imprest funds maintenance

CSD imposes limit to its each shop holder that they are bound to purchase up to specific amount of
money to stimulate the daily operations of business. This limit is called imprest limit. If a shop
spends more than its imprest funds, a notification is issued to that shop. In a converse situation this
section reimburses the fund. All bills are first passed through P & A division and then dispatch to F &
A Division.

7. Miscellaneous
This section of the division also deals with the following sectors.

Advances to CSD shops all over the country for the renovation of fixed assets such as
building, automobiles etc.
Procurement of Rent allied bills that are the utility bills (electricity, gas, water etc.) of all
shops.
Procurement of service allowances to all officers such as house rent, transportation expenses
etc.
Procurement of pool expenses which are the running expenses of vehicles, machines etc.

F2 (a)
There are three major responsibilities of this section.

To maintain the cash books.

To make monthly sales reports.
To make profit and loss A/Cs.

All DCS are recorded in a separate cashbook for each shop. No accrual transactions are recorded in
the cashbook. There are three basic forms in each cashbook.
1. Daily sales figure. (All credit)
2. Remittance slip (bank receipt and deposit information)
3. Bank reconciliation statement.

1. Daily sales figure. (All credit)

Shops deposit their daily sale amount to the CSD A/C. After that send a Daily cash statement to F2
(a). This section informs S & D Division about the sales figure and then bookkeeper records that DCS
in the cashbook of that particular shop. At the end of the month, all these figures are recorded in a
Journal Voucher JV, and then posted to general ledger and then to trial balance.

2. To make monthly sales report

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Second major responsibility of this section is to prepare monthly sales report of each zone of CSD.
These sales reports are further remitted to F2 (b) where it is posted in the trial balance.

3. To maintain the profit and loss accounts

Another major responsibility of this section is to maintain the profit and loss account of all petrol
pumps, fruit and vegetable shops on monthly basis and the rest of the CSD shops on quarterly basis.
All these accounts are further transferred to F2 (b).
F2 (b)
The major responsibility of this section is to arrange payments for all CSD bills. All JVs from all of
the preceding sections are collected at F2 (b); final cheques are made and then sent to concerned
person or division.
As mentioned earlier, F1 sends all bills related to pay and allowances, F2 (b) sends all bills related to
purchase and supply and F3 sends monthly information of all transactions to F2 (b).
Following are some of the major activities taking place here.
1.
2.
3.
4.

To maintain general ledger and trial balance.

Budget estimation and preparation.
Payments.
Preparation of average income statement and balance sheets.

1. To maintain general ledger and trial balance.

All JVs from F2 (a) that constitutes of the records of the monthly transactions of each shop are
recorded in the general ledger. Also a trial balance is prepared from this general ledger on monthly
basis, which is further helpful in the preparation of the annual balance sheet and income statement.

2. Budget estimation and preparation.

This process constitutes of following steps.
1. In the month of March, a letter is issued to P & A Division and the zonal offices. In this letter an
estimation is required that what has to be purchased for each segment of the organization in the next
coming year and how it differs from the previous year.
2. On the behalf of that estimation, F2 (b) assesses the volume of the budget and prepares a Performa
budget, which is further transferred to director finance.
3. In the meeting of board of directors, the final budget is approved and sanctioned. Quarter master
general of board of control further sanctions this budget.
In CSD, budget is an estimation of the following items.

Loan payment.
Capital items.
Miscellaneous expenditure.
Financial charges.
Final settlement.
Allied services.

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Repair and maintenance.

Establishment charges.
Purchases.
Other incomes/ receipts.
Hire purchase.
Sales.

Budget Performa Form

(1) Particulars
(2) Page
(3) This year estimate
(4) Next year estimate
(5) Next and next year estimate
(6) % Increase or decrease

3. Payments
As mentioned earlier.

4. Average balance and income statement

On the basis financial statements of the preceding years, F2 (b) prepares average income statement
and the balance sheets of the current year, in order to assess the financial health of the business during
the current year. It is also used to assess any positive or negative change in sales, profitability and
liquidity etc.
F3
This section of F & A Division is concerned with purchase and supply for the outlets of Canteen
Stores Department. The prime responsibility of this section is invoicing the suppliers of the Canteen
Stores Department. Almost all purchases for CSD outlets take place on the behalf of zonal depots and
the head office, so it is prime responsibility of the finance division to pay against that purchases.
F4 (Computer section)
This is the heart of F & A Division where all documents from all sections of the division are recorded
and analyzed.
There are two major systems working at F4.
1. Payroll system.
2. Purchase order system.

1. Payroll system
The first major system is remuneration to all employees of Canteen Stores Department, which is
totally computerized. This system is confined to activities regarding F1 section. All pay sheets from
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all segments of the organization are recorded and scrutinize in the computer section. After that a final
voucher is made which is sent to F1.

2. Purchase order system

The second major system is purchase order system, which is confined to the activities regarding F3.
This system accommodates the following privileges.
All suppliers bills are added to the system.

Scrutinizing the suppliers bills.

Aging of bills on weekly basis.
Bank payments distribution.
Income tax reduction.
Income tax reports for the suppliers.
Income tax recovery certificate.

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Financial Analysis
The financial analysis of any business organization elicits the financial health of the business and
overall efficiency of management of the organization.
During my visit to the F & A Division, I have conducted a financial analysis of Canteen Stores
Department for the year 1999-2000, as it is the last closing year till 31st June 2002 even the year
2001-2002 has been ended on 31st June 2002. This elicits the slow and deadly moving working and
inefficient management at the division. However financial analysis for the year 1999-2000 constitutes
of the following parts.
1. Ratio analysis.
2. Horizontal analysis.
3. Vertical analysis.

1. Ratio Analysis
There are five basis ratios of this analysis.

Liquidity ratios.
Activity ratios.
Debt ratios.
Profitability or coverage ratios.
Marketability.

1. Liquidity ratios
The ratios, which assess the ability of a firm to satisfy its short-term obligations as they come due, are
liquidity ratios. They constitute of,
a) Current ratio = Current assets / Current liabilities
Year

Ratios

2000

451,547,164 / 220,609,517 = 2.04

1999

503,283,333/263,803,351 =1.91

b) Acid test ratio = Current ratio inventory / Current liabilities

Year

Ratios

2000

451,547,164 213,453,707 / 220,609,517 = 1.08

1999

503,283,333 266,226,231 / 263,803,351 = .89

c) Cash ratio = Cash / Total assets

Year

Ratios

2000

27,831,880 / 514,613,398 = .05

1999

12,087,665 / 538,390,268 = .02

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d) Net working capital = Current assets Current liabilities

Year

Ratios

2000

451,547,164 - 220,609,517 = 230,937,647

1999

503,283,333 - 263,803,351 = 239,479,982

2. Activity Ratios
These ratios represent the speed with which various accounts are converted into cash or sales. They
constitute of,
a) Average collection period (ACP) = A/R / Average cr. Sales/day
Year

Ratios

2000

24,521,780 / 1,085,230,212/360 = 8.24 = 8 days

1999

44,226,198 / 929,231,232 = 17.38 = 17 days

b) A/R turn over = 360 / ACP

Year

Ratios

2000

360 / 8 = 43 times in a year

1999

360 / 17.38 = 20 times in a year

c) Average payment period (APP) = A/P / Avg. cr. Purchase/day

Year

Ratios

2000

157,937,876 / 964,934,508/360 = 60 days

1999

163,317,927 / 925,372,804/360 =64 days

d) A/P turn over = 360 / APP

Year

Ratios

2000

360 / 60 = 6 times in a year

1999

360 / 64 = 5 times in a year

e) Inventory turnover = C.G.S / Average inventory

Year

Ratios

2000

1,022,294,059 / 266,226,231+213,453,707/2 = 4 times in a year

1999

858,471,365 / 193,845,873+266,226,231/2 = 3 times in a year

3. Debt ratios
These ratios measure the proportion of total assets financed by firms creditors. They constitute of,
Cost Accounting Final Project

Page 21

a) Total debt to total assets = Total debt / Total assets x 100

Year

Ratios

2000

241,284,725 / 514,613,398 x 100 =47%

1999

284,830,645 / 538,390,268 x 100 = 53%

4. Profitability or Coverage Ratios

These ratios assess the overall profitability of the business during the year in various aspects such as
gross profit, net profit etc. they constitute of,
a) Time interest earned ratio = EBIT / I
Year

Ratios

2000

30,813,382 / 11,044,332 = 2.78

1999

49,527,421 / 7,894,380 = 6,27

b) Gross profit margin = Gross profit / Total sales x 100

Year

Ratios

2000

62,936,153 / 1,085,230,212 x 100 = 5.78%

1999

70,759,867 / 929,231,232 x 100 = 7.61%

c) Net profit margin = Net profit after taxes / Total sales x 100
Year

Ratios

2000

19,769,050 / 1,085,230,212 x 100 = 1.82%

1999

41,633,041 / 929,231,232 x 100 = 4.48%

d) Sales to Total assets = Sales / Total assets

Year

Ratios

2000

1,085,230,212 / 514,613,398 = 2.1

1999

929,231,232 / 538,390,268 = 1.72

e) Earning power or Return on investment = Net profit after taxes / Total assets x 100
Year

Ratios

2000

19,769,050 / 514,613,398 x 100 = 3.84 %

1999

41,633,041 / 538,398,268 x 100 = 7.73%

2. Horizontal Analysis
Accounts

2000

Cost Accounting Final Project

1999
Page 22

% Change

Current Assets

451547164

503283333

-10.27

Current Liabilities

220609517

263803351

-16.37

Long Term Debt

20675208

21027294

-1.67

Total Assets

514613398

538390268

-4.41

Total Liabilities

241284725

284830645

-15.28

Sales

1085230212

9298231232

+16.78

Cost of Goods Sold

1022294059

858471365

+19.08

Gross Profit

62936153

70759876

Operating Expenses

98827373

79898356

+23.69

Net Profit

19769050

41633041

-52.51

Fixed Assets

63066234

35106935

+79.64

-11.05

3. Vertical Analysis
Accounts

2000

Total assets

514613398 (100%)

38390268 (100%)

Fixed assets

63066234 (12.25%)

35106935 (6.52%)

Current assets

451547164 (87.74%)

503283333 (93.47%)

Total liabilities

241284725 (100%)

284830645 (100%)

Current liabilities

220609517 (91.43%)

263803351 (92.61%)

Long term debt

1999

20675208 (8.56%)

21027294 (7.38%)

Sales

1085230212 (100%)

929231232 (100%)

C.G.S

1022294059 (94.2%)

858471365 (92.38%)

Gross profit

62936153 (5.79%)

70759867 (7.61%)

Operating expenses

98827373 (9.10%)

79898365 (8.59%)

Net profit

19769050 (1.82%)

41633041 (4.48%)

Cost Accounting Final Project

Page 23

Data Analysis
We collected the sample data from CSD Canteen Store Department Report (2012-13 and 2011-12).
We have assumed the following for the purpose of cost sheet analysis and break even analysis:

Rent has been assumed to be factory rent

Insurance is assumed to be insurance of factory building

Building is referred to as factory building

In this section, we have done 2 types of analysis :

i.

Cost Sheet Analysis

ii.

Break-even Analysis

Cost Sheet Analysis

A Cost Sheet or Statement is a document that summarizes various costs related to a product or an
order with details of material, labor, cost and expenses showing components of total cost in total
amounts as well as per unit basis.
In this section, we have analyzed various fixed and variable costs under different heads as:
a.
b.
c.
d.

Prime cost
Production Overhead
Office and Administration Overhead
Selling and distribution expenses

All costs have been shown in the Cost Sheet, and we have calculated Cost of goods sold and Net
Profit earned by the company.

Cost Accounting Final Project

Page 24

Canteen Store Department - CSD

2012-13
Particulars
Direct material
Direct labour
Direct expenses
Prime cost
Production Overhead :
Power & fuel
Depreciation on plant & machinery
Stores and spares consumed
Repairs to buildings
Repairs to plant & machinery
Processing charges
Rent
Insurance
Freight & forwarding charges

Rs.
Million
165805
23636
31

Total (Rs.
Million)

189472

4812
4619
1346
345
576
2300
2728
424
8180

Selling & distribution expenses :

Advertisements & publicity
Commission, Discounts and Rebate
Travel & conveyance

22270
191348

1537
382
560
12718
12
983
737
20722
235524

50237
3012
3857

Break-Even Analysis
Page 25

16929
208277

39766
3287
3318
57106
292630
614640
322010

Cost of goods sold

Total Sales
Profit

Cost Accounting Final Project

4641
3681
1345
368
448
2074
2156
361
7196

2092
394
641
15766
11
1003
815

Total cost of production

Total (Rs.
Million)

169078

25330
214802

Factory cost/Production cost

Office & Administration Overhead :
Legal and professional charges
Telephone & fax expenses
Security expenses
General charges
Director's fee
Workmen & staff welfare
Repairs

2011-12
Rs.
Lacs
148370
20708
0

46371
254648
528320
273672

Break-even point is a situation where the firm is just meeting its Total Cost, that is, Fixed and Variable
Costs from the revenue and the firm is not making any profit or loss.

Break-even Analysis
2012-13
Particulars

Rs.

Total (Rs.
Million)
614640

Million

Sales
Variable cost :
Direct material
Direct labour
Direct expenses
Stores and spares consumed
Processing charges
Freight & forwarding charges
Commission,Discounts and Rebate
Travel & conveyance

165805
23,636
31
1346
2300
8180
3012
3857

Contribution/ Sales Ratio

Break-Even Point (Sales Revenue)

208167
406473

Total (Rs.
Million)
528320

186298
342022

4,812
4619

4,641
3681

345
576
2,728
424
2092
394
641
15766
11
1003
815
50237

368
448
2156
361
1537
382
560
12718
12
983
737
39766
84,463

68,350

0.661318821
127719.0326

0.64737659
105579.9685

Conclusion

Cost Accounting Final Project

Rs.
Million

148370
20,708
0
1345
2074
7196
3287
3318

Contribution
Fixed cost :
Power & fuel
Depreciation on plant and
machinery
Repairs to building
Repair to plant & machinery
Rent
Insurance
Legal and professional charges
Telephone & fax expenses
Security expenses
General charges
Director's fee
Workmen & staff welfare
Repairs
Advertisements & publicity

2011-12

Page 26

In August 1947, assets of the CSD India were divided between Pakistan and India. Thus emerged the
CSD Canteen Store Department Pakistan
Between 1948-59, CSD enjoyed the status of a full-fledged Government Department, with complete
tax exemption / rebates / budgetary grants. CSD used to get a large allocation of foreign exchange and
was primarily trading in imported goods.
All though the CSD Canteen Store Department Pakistan is serving the Army but from some of its
operation its helping the public client/customer by give them opportunity to grow themselves, by
becoming the part of CSD operation, especially for the small/medium operating
businesses/organizations to get the better level of dealing with the big group of organization.

Cost Accounting Final Project

Page 27

Annexures

Cost Accounting Final Project

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Cost Accounting Final Project

Page 29

Cost Accounting Final Project

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Cost Accounting Final Project

Page 31