You are on page 1of 97

Report

On
Financial Statement
Analysis
Jaipur Saras Dairy

Facility Guide Company


Guide
Dr. T. Duhan R. N.
Mittal

Sharwan kumar Mahala


JKBSchool, Gurgaon
Jkbs090450
ACKNOWLEDGEMENT

I take the opportunity to express my sincere gratitude


and ineptness to Mr. L. K. Kaushik the managing director
of Jaipur Dairy who gave me the chance of doing my
summer training in Jaipur Dairy.

I would like to thanks Mr. D. C. MISHRA (sub M.D.) who


gave me this challenging project.
I am grateful to Mr. R. N. MITTAL DY. Manager (F&A),
Jaipur dairy for his valuable advice during the entire
project. He devote his valuable time regularly and always
become a good listener for my feedback. He suggested
me for better way. His friendly behavior and willingness
to help has done much of the work.

Finally I would like to thank the entire staff of Jaipur dairy


for their co-operation.

Sharwan kumar Mahala


MBA Part 1st year
JKBSchool, gurgaon
PREFACE

Financial analysis of any organization is done through


analysis of its financial statement. Financial statement
provides valuable information of past performance and
present position of the company and is considered as
‘blue print of the company’.

In this study, a sincere attempt has been made to analyze


the working of Jaipur Dairy making use of different
financial appraisal technique like Ratio analysis, Trend
analysis, Common size balance sheet analysis etc; the
period of study was 2 year i.e. 2005-06 & 2006-07. The
date for the study obtained from published annual report
of the company. An effort has been made to appraise the
overall financial performance and efficiency of
management, but the scope and depth of study remained
limited due to limiting factors of time, and resources.
However, it is expected that the study will provide useful
information for the better and easier understanding of the
financial result of the company.

This study has been divided into 5 chapters. The first


chapter has been devoted to introduction and brief profile
and last to the summary of conclusion and
recommendation. The second chapter provides the tests
for the judging the profitability and analysis of working
result of the company. In the chapter three analysis of
company’s performance through ratio analysis and fourth
chapter deals with graphics presentation of financial
performance of Jaipur dairy.

PROJECT OBJECTIVE

CONCEPTUAL

 To prepare a report after analysis and interpretation


of finding from balance sheet as well profit and loss
account through applying various mathematical and
financial tool and techniques.
 To get the practical knowledge about all the things
and aspect which we learn during our MBA part one
in 1st Semester

FUNCTIONAL

 The present earning capacity or profitability of Jaipur


Dairy.

 The operational efficiency of Jaipur Dairy.

 The short term and long term solvency.

 The financial position of a business.


 The possibility of development in the future by
making forecast and preparing budget.

 To facilitates inter-firm and intra-firm comparison


JAIPUR DAIRY AN OVERVIEW

BRIEF HISTORY
OBJECTIVES
ORGINISATION HISTORY
FINANCIAL ANALYSIS

FINANCIAL STATEMENT CONCEPT


BALANCE SHEET
INCOME STATEMENT
STATEMENT OF CHANGES IN FINANCIAL STATEMENT
PARTIES INTRESTED

FINANCIAL APPRAISAL
CONCEPT
NEED OF FINANCIAL APPRAISAL
TOOLS AND TECHNIQUE OF FINANCIAL APPRAISAL
ACCOUNTING TECHIQUES

INTRODUCATION
JAIPUR DAIRY AN OVERVIEW

BRIEF HISTORY
Dairy Development was initiated by the state Government in the
early seventies under the auspices of Rajasthan State Dairy
Development Corporation (RSDDC) registered in 1975. Two
years later RCDF assumed responsibility for the functions of
RSDD. It became the nodal agency for implementation of
operation flood in the state.

Rajasthan Cooperative Dairy Federation (FCDF) set up in


1977 as the implementing agency for dairy development
programmers in Rajasthan is registered as a society under the
Rajasthan co-operative societies act 1965.

Towards fulfillment of the national object of making India self


sufficient in milk production small step was taken in March 1975
and Jaipur Zila Dugdh Utpadak Sakhari Sangh Limited. (Jaipur
Dairy) was registered under the co-operative act 1965 to work in
Jaipur district. Initially this union did not have the processing
facilities. It started with a model beginning of procuring 250 ltr. Of
milk per day.
In June 1981, Jaipur dairy plant was commissioned as a unit of
Rajasthan co-operative dairy federation ltd. Jaipur for processing
and manufacturing milk and milk products. The initial handling
capacity of dairy plant was 1.5 lakh ltr per day with a powder
plant of 15 MT per day capacity. Processing facilities of dairy plant
presently include multifarious activates like chilling,
pasteurization, standardization, sterilion, production of ghee,
table butter, skimmed milk nankeen chach, lassie, pannier,
shrikhand, aseptic milk and powder.

The dairy procures milk through his network of more than 700
villages’ level dairy co-operative societies spread in Jaipur and
Dausa district. Dairy arranges transportation of milk from
doorsteps milk producers to the receiving points at a dairy plant
and its chilling centers. Payment of milk is distributed to the milk
producers on a ten day basis.
Procreant and input activities include farmers organization, input
services like animals health coverage and supply of balance cattle
feed and improved fodder seeds to the members, co-operative
development programme, training etc. in 1992, the Jaipur dairy
plant was handed over to Zila Dugdh Utpadak Sahakari Sangh
(Jaipur milk union) with the multiple increases in market of milk
and milk product and also in milk procurement. The capacity of
the plan was increased to 2.5 lakh ltr per day in 1998-99 to
improve the quality or raw milk the dairy has commissioned three
chilling centers at Kaladera, Dudu & Shahapura apart from
enhancing the capacity Dausa milk chilling center.

Over the year, there has been not looking back for Jaipur dairy
and the significant growth has been achieved during the year
1998-99 monthly average of milk sale has been 143000 Ltr per
day with peak milk procurement during besides the near by sale
milk unions like Sikar, Tonk, Swaimadhopur and Bharatpur also
send their milk to Jaipur dairy for processing during peak flush
season.
PRODUCTS

The “SARAS” range:


Fresh Milk Long shelf
life milk (UHT)

DTM Skimmed Milk

Toned Double Toned Milk

Standard Toned Milk (Taaza)

Full Cream Cow Milk

Skimmed

Camel Milk

Fresh Milk Products Long Shelf Life Milk


Products

Chaach Ghee

Lassi Cow Ghee

Dahi Table Butter

Paneer SMP

Shrikhand WMP

Icecream Cheese

Rasgulla Dairy Whitener

Flavored Milk White Butter

Mawa

Cattle Feed

Balanced feed
High energy

Mineral Mixture

Urea Molasses Brick (UMB)

Today Jaipur dairy provides liquid milk of four types name

• Toned

• Double toned

• Standard and Gold (Full cream) and

• Various products like Ghee, Paneer table butter, chach, lassi,


shrikhand in the district of Jaipur & Dausa and also
contributes grid. Its sale tetra packs milk throughout the
country.

The plant is managed and operated by will-qualified, competent


and experienced, managerial cadre and highly motivated work
force to provide highest quality of product and best of services to
its esteemed customers.

To further improve the efficiency and efficiency and effectiveness


of the plant performance, Jaipur Dairy (Jaipur Zila Dugdh Utpadak
Sahakari Sangh Ltd., Jaipur) had earlier obtained the Quality
Management Systems Certification as per ISO 9002:1994 in
combination with IS: 15000 (HACCP) in the year 2000. Now the
dairy has upgraded the system in accordance with ISO:
9001:2000 in combination with (HACCP) as per IS: 15000:1998.
OBJECTIVES

The primary concern of Jaipur dairy is to provide best quality and


safe products and services, achieved this quality objectives of
Jaipur dairy are designed to

 Meet a well defined needs use and purpose of costumer.

 Satisfy customer’s expectation for good and safe milk and


milk products.

 Comply with applicable national and international standard.

 Make available milk and milk products at comparative price.

 Ensuring implementation of ISO 9002 quality management


system.

 Application ad adherence of HACCP principal for food safety.

 Motivates employees for professional excellence and


participation.
QUALITY POLICY

The Jaipur dairy believes that the delighted customer is the only
key for overall development of the organization

This is achieved by:-

 Educating milk products for clean milk production.

 Manufacturing and supplying milk and milk products and


services of consistent quality at comparative price.

 Adoptive innovate and modern technologies and system.

 Developing committed workforce.

 Adoption of safety and environment friendly standards with


help of application of HACCP principals.
ORAGANIZATION MEMBERS
1) JAIPUR DAIRY jaipurdairy@jaipurdairy.com
2) Shri. Om Prakash Punia,
ompunia@jaipurdairy.com
Chairman
3) Sh. L.K Kaushik, Managing
lkkaushik@jaipurdairy.com
Director
4) Sh. Anil Shukla, Manager (QC) anilshukla@jaipurdairy.com
5) Sh. S. K. Mahajan, Manager
skmahajan@jaipurdairy.com
(Plant)
6) Sh.C.P. Mittal Manager (APS). cpmittal@jaipurdairy.com
7) Sh R.D Kaushik, Manager (FOP) rdkaushik@jaipurdairy.com
8) Sh H.P Sharma, Dy Manager ( HQ
hpsharma@jaipurdairy.com
& Computer)

9) Sh. Govind Gupta, Dy Manager


govindgupta@jaipurdairy.com
( Marketing)
10) Sh. R. N. Mittal, OIC (F & A) rnmittal@jaipurdairy.com
11) Sh. Rakesh Gupta, OIC (F & A) rgupta@jaipurdairy.com
12) Dr. D.C. Mishra , OIC (Input) dcmishra@jaipurdairy.com
13) Sh. HL Agrawal, OIC (Engg) hlagrawal@jaipurdairy.com
14) Sh. KC Kabra, Dy.Mgr(P&A) kckabra@jaipurdairy.com
15) Sh. Anil Gaur, Public Relation
anilgaur@jaipurdairy.com
Officer
16) Sh. Vijay Gupta, OIC (Purchase) vijaygupta@jaipurdairy.com
17) Sh PS Chaudhary, OIC (Store) pschaudhary@jaipurdairy.com
18) Sh. H. S. Sharma, OIC (MIS) hssharma@jaipurdairy.com
19) Sh. Avinash Jain OIC( Powder
avinashjain@jaipurdairy.com
plant)
20) Sh. PK Satsangi OIC WDP pksatsangi@jaipurdairy.com
21) Sh. Sanjay Mehan OIC(APS) smehan@jaipurdairy.com
22) Sh. Bipin Sharma Dy. Mgr bipin@jaipurdairy.com
23) Sh. Mahesh Gurnani OIC ( Milk
maheshgurnani@jaipurdairy.com
Packing)
24) Sh. Sunil Kumar, OIC (Milk
sunilkumar@jaipurdairy.com
Processing)

As far as the organizational structure of RCDF (Saras) is


concerned we can say that the federation is a state Level Apex
co-operative Organization owned by its member unions each of
which, in turn, is owned the dairy co-operative societies in its area
of operation which are themselves owned by farmer members.

The federation has a board of directors which has overall


responsibility for the planning policies, financial resource
mobilization and management, member and public relations as
well as liaison with agencies of the state and central Government,
financing institutions etc. The federation has chief Executive
designed as Managing Director.
The organization operates on three tier system where in farmer
members own diary co-operative societies (DCS) which own
district milk producers union. The unions collectively own the
RCDF.

It is a vertically integrated structure that established a direct


linkage between those who produce the milk and those who
consume it.

Federation provides services and support to union. Marketing with


in and outside State. Liaison with government and NGO agencies,
mobilization of resources and co-ordination planning programmed
or project.
Union-develops village milk co-operatives networks procure milk
from DCS, process and markets. Sales of cattle feed and related
inputs, promotions of cross breeding through AI and NS promotion
of fodder development and general supports and supervision to
DCS.

DCS – provides input services (AH, AI) to its members and


procurement of milk.
SERVICES

Quality

Jaipur dairy has got a sophisticated quality Control Laboratory,


which is equipped to carry out almost all the chemical and
bacteriological tests related with milk and milk products. The QC
Lab also carries quality tests for various packaging material,
ingredients, and chemicals used in Jaipur Dairy. The service of the
quality control lab is also used for carrying our consumer
awareness programs like “Dudh ka Pani Ka Pani”. We also have
facility for general public for getting their milk or Ghee samples
tested in our quality control lab free of cost.

Engineering

The lifeline of Jaipur dairy i.e. steam, water and refrigeration is


provided and maintained by the Engineering section. Apart from
this section does regular maintenance both preventive and
corrective only. Considering the perishable nature of milk, the
engineering section has to be on its toes always.

The section is managed by will – qualified and experienced


manpower, which are at par with any professional organization.

Human Resource Development

Jaipur dairy has always considered its staff member as an asset.


Various programs are run on continuous basis for keeping the
morale of employees high. Without the positive support of the
employees, the success story of Jaipur Dairy would not have been
possible.

Yearly Get-together of all officers and employees is one of the


most important events of Jaipur Dairy.

For the last few years, more emphasis is being given on


employees ‘training in the field of Attitude, Customer Relations,
Positive Thinking, Time Management, Stress Management and
Team Building etc; apart from technical subjects. Employees are
being made aware of such subjects either by nominating them to
various training organizations and workshops and seminars. Also
experts are being invited to conduct in house workshops and
seminars. Jaipur Dairy has h HRD cell also, which circulate good
and readable articles to employees for self-development.

ACTIVITIES

This Dairy procures milk through its strong network of over 1200
village level Dairy Co-operative spread in Jaipur and Dausa
district. Dairy arranges transportation of milk from doorsteps of
milk producers to the receiving point at daily plant and its chilling
centers. Payments of milk are disbursed to the milk producers on
ten day basis.

Procurement and input activities include Farmer’s Organization;


input Services like Animal Health Coverage, Animal breeding
Programme, Supply of balanced cattle feed and improved high
yielding fodder seeds to the members, Co-operative institution
building, Women Dairy co-operative Leadership programme and
Training of DCS manpower and its Managing committee members
etc.
Processing facilities of the dairy plant presently include
multidimensional activities like chilling, Pasteurization,
standardization, sterilization, production of Ghee, Butter (Salted /
Unsalted) Skimmed Milk Powder (SMP), Indigenous fresh Milk
Product (Paneer, Shrikhand, Chhach (Plain / Salted), Lassi, Mawa
(Khoa) and Dahi (Plain / Mishti), and Aseptic Milk (Which was
handed over to Jaipur Dairy only in 1997-98).

To improve the quality of raw milk, the Dairy has commissioned


chilling centers and installed Bulk Coolers at various places in the
milk shed.
WOMEN EMPOWERMENT

We have entered in the 21st centaury; still Backbone of our Indian


economy is primarily agriculture and animal husbandry. Most of
the activities and related to there two fields are done by women
but have contribution is not recognized at any level.

In dairy and animal husbandry sector, she is playing very


important role. But behind the screen, Jaipur dairy also identified
the significance of her role and started emphasizing on
participate increasing women participation by increasing women
membership and no of women in D.C.S. management committee.
It could yield only a mild positive impact. Jaipur Dairy in 1991
started RAJASTHAN WOMEN DAIRY PROJECT, supported by
Ministry of HRD Government of India. Under this project
exclusively women dairy co-operative societies were organized,
where member, management committee member, chairperson
secretary etc, were all women. Object of these projects was
society economic development of rural women. This project had
following programming literacy programme, health and Sanitation
programme, Employment programme, Awareness Generation
programme. All these activities were to be performed on women
Dairy co-operative Society plate form.
This program yielded very good results. Beside considerable
increase in income, income in literary level better adoptability of
Health and Hygiene practices. There is tremendous increase in
her awareness. She is more confident, better decision maker, self
reliant, ambitious and vocal. All these features were observed and
felicitated by the them US President Mr. Bill Clinton during his visit
to NAILA (Jaipur) where are our dairy women demonstrated not
only the working of on automatic milk collection station with
computers but also discussed will him the story of their storage
and success.
To system this impact and feature strengthening women dairy co-
operative Jaipur dairy started women dairy co-operative
leadership development. Program and co-operative institution
building program with. The help and support of National Dairy
Development Board, Jaipur. Objective of this program is again
strengthening of WDES and its numbers by increasing women
participation in all activities of WDES. Modus apparent for
awareness is training at various levels. These peregrine facilitated
by local resource person who is again a women, Selected out the
same level onass, local, literate, vocal, acceptable locally, vibrant
and having leadership ability. This programme has also given
good result in the form of owning of organization role perception
and loyalty to D.C.S.

Women empowerment is continuous process. Only this we can


say is

“A promise to keep, A Dream to fulfill, And Miles to go”


FINANCIAL STATEMENTS ANALYSIS
Accounting process involves recording, classifying and
summarizing various business transactions. Financial statements
are the result of summarizing process. Their purpose is to
determine the profitability of the firm from operations and to
know about the financial position. Thus, financial statements
contain systematically collection summarized information about a
firm’s operating results and financial strength and are means to
communicate the information to various users. These financial
statements are prepared from the accounting records maintained
by the firm and the generally accepted accounting principles and
procedures are followed in preparing these statements.

MEANING OF FINANCIAL STATEMENTS


Financial statements are the end products of the financial
process. These statements are nothing but the presentation of
financial information about the firm in concise and capsule form.
The financial information is that information which relates to the
financial position at a moment in time and the results of a series
of activities over a period of time. Thus, “financial statements
refer to the statements that show the financial position
and result of business activities at the end of the
accounting period.” These statements reveal the gross and net
profits of the business carried on during a certain period ad the
financial position at the end of that period.

Financial statements from part of the process of financial


reporting. A complete set of financial statements normally
includes a balance sheet, a statement of profit and loss
(also known as income statement), a cash flow statement
and those notes and other statements and explanatory
material that are an integral part of the financial
statements. They may also include supplementary schedules
and information based on or derived from, and expected to be
real with such statements. Such schedules and supplementary
information may deal, for example, with financial information
about business and geographical segments, and disclosures about
the effects of changing prices. Financial statements do not,
however, include such items as reports by directors, statements
by the chairman, discussion and analysis by management and
similar items that may be included in financial or annual report.
OBJECTIVES OF FINANCIAL STATEMTNS
Financial statements serve as horoscopes of a business as they
enable readers to measure financial position of a concern. Such
statements contain sufficient valuable information about various
aspects of business that can be useful for business decisions. As
stated by the Accounting Standards Board of India that, “the
objective of financial statements is to provide information
about the financial position, performance and cash flows
of an enterprise that is useful to a wide range of users in
making economic decisions.” The various objectives of such
statements are summarized below:

 To provide financial data on economic resources and


obligations of a concern

 To reveal implications of operating profit on the financial


position of a concern

 To provide sufficient and relevant information to various


parties interested in financial statements
 To present true and fair view of the business

 To serve as the basis of future operations

BALANCE SHEET
Balance sheet is one of the most significant financial statements
of business firm. It is generally known by various titles such as;
(1) economic or general balance sheet; (2) statement of financial
position; (3) statement of assets and liabilities; (4) statement of
resources and liabilities; (5) statement of assets, liabilities and
owners’ funds etc. A balance sheet contains information about the
assets, liabilities and owners’ interest in the business at a
particular point of time. For example, a balance sheet of a firm
prepared as on 31st March, 2009 reveals the firm’s financial
position on this specific date. Thus, the balance sheet is a
statement of financial position of a business firm as on a
specific date which reports assets, liabilities, capital,
reserves and the balances of other accounts at their
respective book values. At the end of the accounting year,
after transferring all the revenue accounts to trading, profit and
loss account, the balance of remaining account are shown in it.
Out of these accounts, the debit balance of various assets such as
land, building, investments, inventory, cash at bank cash in hand,
sundry debtors etc. are shown on the right side of the balance
sheet, whereas claims against these assets i.e. liabilities and
owners’ equity such as secured and unsecured loans, sundry
creditors, capital reserve funds etc., which have credit balances,
are shown in the left side of the balance sheet. Thus, the liabilities
and owners fund are shown on the left side and various assets on
the right side of the balance sheet. This makes the total of the
both side equal. That is why the statement of assets, liabilities
and owner’s equities is generally known as balance sheet. In
other words, ‘a balance sheet is a screen picture of the financial
position of a going concern at a certain moment.’

Function of Balance Sheet:


The balance sheet can explain the position of a company far
better than a whole library of books. It salient features of a
organization at a glance. What it owns and what it owes? The
balance sheet serves the following main function:

(1) Reveals Financial Position:


The balance sheet informs the owners of the business and
to other interested parties about the state of firm’s affairs
i.e. assets owned by the firm and claims against these
assets. It also reflects the results of managerial policies
during the accounting period.

(2) Explains Liquidity Position:


The balance sheet also about the liquidity position of the
firm. Liquidity means the ability of the firm to meet out its
short-term obligations on maturity. This can be
ascertained by net current assets i. e. difference between
assets and current and current liabilities and other
liquidity ratio.

(3) Explains Solvency Position:


The balance sheet also provides information to the users
of financial. Stamens about the solvency position of the
firm. Solvency means the ability of the firm to meet the
entire long – term and short-term obligations in time. The
solvency of a firm can be measured by debt to equity
ratio, assets to liabilities ratio and other solvency ratio. A
high proportion of debt can endanger the firm’s solvency.

FROM OF BALANCE SHEET:


Balance sheet is a statement of financial position; therefore, it
contains assets, liabilities and owner’s equity. Balance sheet can
be prepared either in horizontal/account from or in vertical/report
from.Publised financial statement are prepared usually in account
from as per schedule 6 of Companies Act, 1956. The balance
sheet has two sides. In right side, various assets are listed and on
left side, liabilities and owner’s equities are shown in order of
permanency. Previous year’s figures along with current year
figures age also depicted. A specimen balance sheet in the
account form is given below:

Jaipur Saras Dairy

Balance sheet

As on 31st March, 2009


Liabilities Rs. Assets Rs.
Share Capital Fixed Assets

Authorized, Issued Land, Building,


Plant,
Subscribed and Paid
up Machinery etc.

-----Shares of Rs… each Less: Depreciation


fully paid

Reserve and surplus


Investments (at Cost)
Capital Reserve
Current Assets,
General Reserve
Loans and Advances
Secured Loans
Stock
Debentures
Bills Receivable
Mortgage Loan
Debtors Advances
Unsecured Loans
Deposits etc.
Public Deposits
Cash and Bank
Current Liabilities an
Miscellaneous
Provision
Expenditure
I. Current Liabilities

Creditors

Bills Payable

Customer Advances

Unclaimed Dividend

II. Provisions
Taxation

Proposed Dividend

The above balance sheet in horizontal or account form is not


much useful from analysis point of view. Therefore, the balance
sheet is presented in vertical or report form. In the report form,
stepwise balance sheet is prepared listing assets at the top
followed by liabilities and owners’ equity. A specimen of such
balance sheet is given below.

JAIPUR SARAS DAIRY

Balance sheet
As on 31st March, 2009

Particulars Rs. Rs.


Fixed Assets

Land, Building, Plant, Machinery etc.

Less: Depreciation

Investments (at cost)

Current Assets, Loans & Advances

Stock

Bills Receivable

Debtors

Advance, Deposits etc.

Cash and Bank

Less: Current Liabilities & Provisions

Creditors

Bills Payable

Customer Advances

Unclaimed Dividend

Taxation

Proposed dividend
Net Current Assets (CA-CL)

Total Capital Employed

Financed by

Share Capital

Reserve and Surplus

Shareholders Equity

Loan Funds

Secured Loans

Unsecured Loans

Total obligations

Classification of Balance Sheet Items


A clear and correct understanding of the classification of balance
sheet items, their meaning which they signify and the account
which they represent, are very essential for the meaningful
interpretation of financial statements. As per companies act,
1956, all the items of balance sheet are divided in two parts i.e.
assets and liabilities. Again assets have been put into (1) fixed
assets, (2) investment, (3) current assets, loans and advances, (4)
miscellaneous or deferred expenditures. Similarly, liabilities have
been classified in (1) share capital, (2) reserve and surplus, (3)
secured loans, (4) unsecured loans and (5) current liabilities and
provisions. But, this classification is not suitable for analysis.
Therefore, for the purpose of analysis and interpretation, the
various items of balance sheet may be classified as follows, on
the presumption that total value of assets is equal to the total
liabilities and owners’ equity.

1. Assets

A. Fixed Assets B. Current Assets

C. Investments D. Miscellaneous or Deferred


Expenditures

2. Liabilities

Long-term Liabilities

Current Liabilities

3. Equity or Net Worth

Share Capital

Reserves and Surplus

ASSETS
Assets have been defined as a tangible objects or intangible
rights owned by an enterprise and carrying future economic
benefits. The future economic benefits embodied in an asset may
flow to the enterprise in a number of ways. For example, an asset
may be (a) used single or in combination with other assets in the
production of goods or services to be sold by the enterprise, (b)
exchanged for other assets; (c) used to settle a liability; (d)
distributed to the owners’ of the enterprise. These assets
represent (a) purchasing power (cash); (b) money claims
(receivables, stock etc.) and (c) tangible and intangible items the
can be sold or used in business to generate income. All the assets
in the balance sheet are listed either in order of liquidity or
permanency. These assets are grouped in different categories on
the basis of similar characteristics. From analysis point of view,
the assets are classified in the following groups:

1. Fixed Assets
Fixed assets are those assets which are acquired for the purpose
of using them in the conduct of business operations and not for
reselling to earn profits. In other words, fixed assets are assets
of a relatively permanent nature used in the conduct of
business operations and not intended for sale. These are
the long-term assets held for periods longer than accounting
period and known as ‘block or Capital assets’, fixed assets may be
either tangible or intangible.

Tangible fixed assets are those fixed assets which have


physical existence and generate goods and services. These
include, land, building, plant and machinery, furniture and
fixtures, trucks etc. These assets are normally recorded at cost
and this cost is allocated over their useful lives. The amount so
allocated each year is called ‘depreciation’ and tangible assets
are reduced every year by the amount of depreciation.

Intangible fixed assets are those fixed assets which have neither
physical existence nor can be seen but can be imagined. They do
not represent any physical asset in the form of documents of title
like bills receivable and promissory notes. They can not be seen
or touched because they are invisible. The intangible assets
confer certain exclusive rights and facilities so that one firm is in
a position to earn more profits earning ability of the firm. These
assets include; (1) goodwill (2) patent and trade mark, (3)
copyright, (4) license and franchise, brands, intellectual capital
etc.

Goodwill represents the excessive earning power of a firm;


patents confer exclusive right to use an invention; trade marks
represent exclusive right to use certain names, symbols, labels,
designs etc.; copyright relates to production and sale of literary,
musical or artistic works; franchise or license represents
contracts giving exclusive right to perform certain functions or to
sell certain services or products.

Current Assets
Current assets are those assets which are reasonably
expected to be realized in cash or sold or consumed
during the normal operating cycle of the business. The
operating cycle is the period which is taken to complete the
sequence of events right from purchase of materials or goods for
cash to the realization of sales in cash and normally it is of one
year. The current assets are acquired for reselling or be converted
into cash during the course of business. These are also known as
short-term assets. These current assets include (1) cash in
hand and at bank; (2) bills receivable; (3) sundry debtors,(4)
inventory raw material, work-in-progress, finished goods; (5)
marketable securities, temporary or short-term investments, (6)
advance payments; (7) prepaid expensed, accrued incomes etc.

Quick or Liquid Assets are those which can be converted


into cash quickly. These are also known as ‘near cash’ assets.
Cash and bank balances are the most liquid assets but debtors,
cash advances and marketable securities can be converted into
cash at short notice. Hence, they are also regarded as quick
assets. Inventory and prepaid expenses do not come this
category because these can not be converted into cash quickly.
Therefore, when inventory and prepaid expenses are deducted
from current assets, the balance will represent quick or liquid
assets.

Investments
The investments of a firm in shares, debentures and bonds of
other firms or government bodies for profit or control are known
as investments. The investments are purchased for long-term, i.e.
to hold at least for more than the accounting period. The long-
term investments are shown at their original cost, but the current
market price is usually given in parenthesis. Trade investments
mean investment by a company in share and debentures of
another company for the purpose of promoting the trade or
business of the first company. Trade investments are long-term
investments.

For balance sheet purpose, the investment can be classified into:


(1) long-term investment and; (2) marketable securities. Long-
term investments are those investments which satisfy any of
following conditions:

 They do not meet the test of ready marketability

 They required being hold by the nature and conditions of the


business. For example, export house is required to subscribe
to the shares of the concerned Export Promotion Council.
 They may be made in order to promote and float a new
company

 They are made to develop operating relationship with other


companies. For example an automobile company may
investment in the shares of a manufacturing company.

Marketable securities are those investments which are acquired


by the company by employing surplus funds or cash temporarily.
These investments can be disposed off by the company at its free
will and thus convert it into cash as and when need arises.
Therefore, these investments are considered as cash, and are
often called ‘secondary cash resources’ and shown under the
head ‘current assets’.

Note: The interest accrued on investment should be shown under


the heading “current assets” and not under this head.

Miscellaneous Assets

All other assets which cannot be included in any above categories


are grouped as other assets. Usually, they represent deferred
expenditures which represent, pre-payments for service and
benefits for period longer than the accounting period. These
include: (1) preliminary expenses; (2) discount or underwriting
commission on issue of shares and debentures; (3) advertising
expenditure; (4) debit balance of profit and loss account. These
expenditures contribute income or benefit in future years. These
are written of gradually over several years of operations, treating
each year’s share in such expenditures as a charge against profit
for the year. There are also called ‘fictitious assets’ which can
not be realized or converted into cash.
Liabilities
Liabilities nay are defined as the claims of outsiders
against the firm. In other words, it is that amount for which the
owes to outsides i.e. other than owners. Generally, liabilities are
created for financing the assets form different sources. The firm
can borrow money on long-term basis from financial institutions,
banks and public through issue of debentures, bonds or
mortgages. The short-term borrowings may be in the form of
purchase of goods and services on credit. These outside sources
from which a firm borrows are known as liabilities. Since, these
sources finance the assets; they are in a sense claims against the
assets. On the basis of periodicity of the funds, the liabilities can
be grouped into: (1) current Liabilities; and (2) long-term liabilities
as explained below:

Long-term Liabilities
Long term liabilities, sometimes also called ‘fixed liabilities’, can
be defined as, “a liability falling due on a date later than
the expiration of one whole accounting period.” Such
liabilities are of two types secured and unsecured on the basis of
charge on assets of the firm. a few examples of such liabilities
are: (1) debentures or bonds, (2) mortgages, loans; (3) long-term
loans from banks or financial institutions.

Current Liabilities:
Current liabilities, from the view point of an analyst are all short-
term obligations generally due and payable within a year
or an operating cycle. These include those parts of the long-
term obligations whose liquidation is expected within one year of
the balance sheet date. Such liabilities arise due to day-to-day
transactions. Generally, payment of these liabilities is made either
out of current assets converted into cash or by creating news
current liabilities. These are also known as ‘short-term
liabilities’. The examples of current liabilities are: (1) trade
creditors, (2) bills payable, (3) dividend and tax payable, (4) bank
overdraft, (5) outstanding expenses and deferred income etc.

OWNERS’ EQUITY
In case of a company, the owners of a business are known as
shareholders. Owners’ equity means the financial interests or
claims of owners of the business against the assets of the firm.
Alternatively, owners’ equity may be defined as the residual
interest in the assets of the enterprise after deducting all
its liabilities. It is also called ‘Net Worth’ or ‘Shareholders
Funds’ or ‘Net Capital Employed’. Thus, the owners’ interest is
residual in nature reflecting the excess of the firms’ assets over
its liabilities, current as well as long-term. This amount is not
always static, but changes with the change in the assets of the
company. The owners’ equity is different from liabilities in the
following ways.

 The nature of owners’ claim is not the same as the


claim of creditors. The creditor’s claims are definite and
have to be met within a specified period. The claim of
owner’s changes and the amount payable to them can be
determined only when the firm is liquidated. Initially the
owners’ equity arises on account of the funds provided by
them. But, it changes due to earnings of the firm and its
distribution to owners.

 The firm’s profits (or losses) do not affect creditor’s


claims. Owners’ equity will increase when the firm earns
profits and retains whole or part of it. If the losses are
incurred, owners’ equity will reduce.

Shareholders’ or owners’ equity consists of two elements


i.e. (1) capital and (2) reserves and surplus or retained earnings:

1. Paid up share Capital: it is initial amount of funds


contributed by shareholders. It includes both equity share
capital and preference share capital. If shareholders pay
more than per value of shares, the excess amount is shown
separately as securities premium.

2. Reserves and Surplus: It represents retained earnings. It


means that part of the profits belonging to the
shareholders, who are not paid out to them as
divided, but retained or ploughed back in the
business. It includes: (1) revenue reserves; (2) capital
reserves and surplus or undistributed profits which are
available for distribution as divided.

Relationship between Assets, Liabilities and


Owners’ Equity
From the foregoing description, it is clear that assets are
resources of the firm which are acquired from the funds provided
by outsiders (liabilities) and owners or shareholders (owners’
equity) of the firm. Alternatively, ‘assets represent outsiders’
and owners’ investments. This relationship can be expressed in
the following account equations.

Assets = Liabilities + Owners’ Equity

Or

Liabilities = Assets – Owners’ Equity

Or

Owners’ Equity or Net Assets= Assets – Liabilities

From the above equations, it is clear that owners’ equity


represents the remaining assets of the firm after meeting the
outsiders’ claims (liabilities). Remaining assets are the net assets
representing the difference between total assets and total
liabilities. Thus, owners’ equity is he claims against the
firm’s assets which can be computed by ascertaining net
assets. The two values i.e. owners’ equity and net assets are
equal. Therefore, any change in net assets due to change in total
assets and liabilities will produce a change in owners’ equity. In
case of companies, the change in owners’ equity will reflect in
reserves and surplus or retained earnings.
PROFIT AND LOSS ACCOUNT OR INCOME
STATEMENT
The balance sheet, as discussed above, indicates firm’s financial
position at a specific date. Hence, it is considered as a very
significant statement by bankers and lenders. But, it fails to
indicate whether a firm is making or losing money. Therefore,
creditors and financial analysts have recently started paying more
attention to the earning capacity of the firm as a measure of
financial strength. The earning capacity of the firm is reflected by
profit and loss account or income statement. According to ICAI,
“The profit and loss account is a financial statement which
presents revenues and expenses of an enterprise for an
accounting period and shows the excess of revenues over
expenses (or vice-versa). In this account, revenues of an
accounting period are matched with the expenses incurred in
earning the revenues and the difference between revenues and
expenses is treated as profit or loss. Thus, profit and loss
account depicts the summary of revenues, expenses and
net profit or loss of a business entity for a certain period
of time. It serves as a measure of the firm’s profitability. The
profit and loss account, like balance sheet, is known by various
names, such as income statement, statement of revenues and
expenses, statement of income and earned surplus; operating
statement etc.
Functions of Income Statement
Profit and loss account or income statement reveals the flow of
revenues and expenses during a period of time. It also reveals the
changes occurred in the balance sheet from the end of one period
to the end of another period. The important functions of the profit
and loss account are as follows:

 Accumulation of Data: Profit and loss account shows all


items of revenues, expenses and net profit of a firm for a
period of time in a concise farm. Thus, it accumulates
economic data.

 Measurement of Net Income: It measures the net income of


the firm by matching revenues and expenses according to
generally accepted accounting principles. Thus, earning
capacity or profitability of the firm is reflected by profit and
loss account.

 Communication: It communicates information regarding the


operating results of the firm to the owners and other parties
interested in the firm.

Form and Contents of Profit and Loss


Account
The profit and loss account is prepared in different forms due to
diversity in the nature of industry and business interests. In case
of proprietary and partnership firms, there is no prescribed form
of profit and loss account. Even for companies, the Indian
Companies Act, 1956 has not prescribed any legal Performa for
profit and loss account as it has prescribed for balance sheet.
Generally, profit and loss account is prepared in account form
which is divided into two parts: (1) profit and loss account,
and (2) Profit and loss Appropriation Account. Such a Profit
and Loss Account is not useful from analysis point of view.
Therefore, the profit and loss account should be prepared in such
Performa where the items of revenues and expenses of the firm
could be shown classified under appropriate heads. This will prove
most useful to the management in analyzing the result.
Nowadays, several firms do not prepare profit and loss account in
account form, but an income statement is prepared in two ways
for the purpose of analysis as: (1) Single-step Income
Statement; and (2) Multi-step Income Statement.

Single-step Income Statement


In single-step income statement, items of revenues are recorded
first and than the items of expenses are shown. The total of
expense items is deducted from the total of revenue items to
arrive at the net profit or net loss. A specimen of such Performa is
given below:

JAIPUR SARAS DAIRY


Income Statement
For the year ended 31st March, 2009

Particulars Rs. Rs.

Revenue
Sales less returns ***

Other Incomes ***

Total Revenues

Cost and Expenses


Cost of Sales ---

General and Administration Expenses ---

Selling Expenses ---

Depreciation

Interest ---

Non-operating Expenses ---

Provision for tax ---

Total Cost and Expenses ---

Net Profit (after tax) -----

Proposed Dividend ------

Income Retained in Business ------

Cost of Sales = Opening Stock + Purchases – Closing Stock

Multi-step Income Statement


Multi-step income statement provides much more useful and
detailed information considering each item of revenues and
expenses step-by-step. In this form of income statement, a
distinction is made between operating revenue and non-operating
revenue. Items of operating revenue (sales less return) and cost
of goods sold are considered first, that gives gross profit or
gross margin. Second, all operating expenses are deducted
from gross profit to arrive at operating profit. After this, non-
operating incomes are added and non-operating expenses are
deducted to arrive at net profit before tax. Lastly, provision for
tax is deducted from the net profit and net profit after tax is
calculated. This type of income statement is very useful for the
purpose of analysis and interpretation. A specimen of such
income statement is given below:
JAIPUR SARAS DAIRY
Income Statement
For the year ended 31st March, 2009

Particulars Rs. Rs.


Sales Revenue (net) ----

Less: Cost of Goods Sold ----

Gross Profit ------


Less: operating Expenses ----- -
General and Administrative Expenses ----

Selling Expenses -----

Depreciation ----- ------


Operating Profit -------
Other Revenue -------
Less: Non-operating Expenses ----- -----
Interest ------
Profit Before tax ------
Less: Provision for tax ----

Net Profit after tax -----

Proposed Dividend -------


Retained Surplus

NATURE OF FINANCIAL STATEMENTS


Financial statements are prepared for the purpose of presenting
review or report on the progress made by the firm to the
management. These statements deal with the status of
investments in the business and the results achieved during the
period under review. The American Institute of Certified Public
Accountants states that, “financial statements reflect a
combination of recorded facts; accounting conventions and
personal judgments and the judgments and conventions applied
affect them materially.” Similar views about the nature of
financial statements have also been expressed by john N. Myer,
who states that the financial statements are composed of data
which is the result of the combination of:

 Recorded facts concerning the business tradition

 Conventions adopted to facilitate the accounting techniques

 Postulates or assumptions made to, and

 Personal judgments used in application of conventions and


postulates.

This implies that data exhibited in financial statements are


affected by recorded facts, accounting conventions, postulates
and personal judgments. The implications and significance of
these facts are explained below:
1. Recorded Fact
The term ‘recorded facts’ means that data used for preparing
financial statements are taken out from the accounting records.
Figures relating to cash in hand, cash at bank, debtors, bills
receivable, cost of fixed assets, bills payable, creditors, sales,
purchases, wages, salaries, rent etc. are recorded facts. The
financial statements do not disclose such facts which are not
recorded in the accounting books whether such facts are
significant or not. For example, the fixed assets purchased are
shown at cost price in the accounting books. The market price or
replacement cost of fixed assets is not stated in the balance
sheet, because the cost price of the fixed assets is a recorded fact
as per accounting records.

2. Accounting Conventions and Postulates


The financial statements are affected to a very great extent by
accounting principles, concepts and conventions. On the going
concern concept assets are shown at cost after deducting
depreciation instead of their market value, on the assumption
that these assets will not be sold. On money measurement
concept, non-monetary factors such as managerial efficiency
and integrity that affect firm’s profit to a great extent are not
shown in the financial statements. Similarly, according to
convention of conservatism, provisions are made for
contingent liabilities and losses. Income for the period ending at
certain specific date is determined according to realization
postulate. The convention of materiality is followed in dealing
with small items like pencils, pen, postage stamps etc. The
stationery is valued at cost and not on the principle of cost or
market price which-ever is less. The use of accounting
conventions makes financial statements comparable, simple and
realistic.
3. Personal Judgment
Although accounting concepts and conventions provide good
guidelines to the accountant, yet the application of these
concepts and conventions depends upon the personal judgment
of the accountant. For example, depreciation on fixed assets is
charged on cost, but which method (fixed installment, written
down value or unit of service) and rate of depreciation are to be
used, depend upon the personal judgment of accountant.
Similarly, selection of the inventory valuation method (FIFO, LIFO,
Average etc.); rate of provision for bad doubtful debts, division of
an item into capital and revenue, determining the amount and
period for writing off the intangibles are some of the examples,
where judgment of the accountant plays an important role in
choosing the most appropriate course of action.

Thus, combined effect of recorded facts, accounting conventions,


postulates and personal judgment is that the values of various
items shown in the financial statements do not indicate the
current market or economic value. These are simply interim
reports for the information of outsiders.

PARTIES INTERESTED IN FINANCIAL


STATEMENTS AND THEIR UTILITY
Each group of society is directly or indirectly affected by the
activities of a business entity. They have been interest in the
profits, development and progress of the enterprise. Financial
statements provide all information relating to financial position
and operating strength or weakness of the enterprise. Therefore,
various users require statements for different purposes which are
narrated below:

 Management
 Investors

 Shareholders

 Debenture holders

 Prospective investors

 Banks and Trade Creditors

 Government and their Agencies

 Employees

 Customers

 Public

 Trade Associations

 Stock Exchanges

LINITATIONS OF FINANCIAL STATEMENTS


The summary of accounts maintained by a business firm is
presented in the form of financial statements. The amounts
expressed in these statements are based on vouchers and
accounting records. Hence, decisions based on this information
are more true and logical. However, the conclusions drawn on the
basis of this information cannot be treated as final and accurate,
because there are certain limitations to the financial statements.
One must, therefore, keep in view these limitations while studying
the profit and loss account and balance sheet of a firm. Important
and impact bearing limitations of financial statements are
identified as below:

1. Lack of precision
2. Incomplete Information

 Reputation and prestige of the management

 Efficiency, integrity and loyalty of the employees

 Expected difficulties and facilities in procuring raw


materials

 Changes in the political situation of country

 Progress by competitive firms in the field of science and


technology

 Market value of properties mortgaged

 Current value of fixed assets

 New products of competitors

 Conditions of the market, tax problems etc.

3. Lack of Exactness

4. Interim Reports

5. Hiding the Real Position or window Dressing

6. Lack of Comparability

7. Historical Costs

A. THE INCOME STATEMENT:


The Balance Sheet as discussed above is considered a very
significant statement from the view point of bankers and as
measured by its resources and obligations, however, editors and
financial analysis have recently started paying more attention to
the firm’s capacity as a measure of its financial strength. Its
income statement revel the earning potential of the firm.

An income statement is a financial statement summarizing the


result of a company’s income (profit) making activities for a
specific time period. It summarizes revenues and expenses in a
manner that discuses whether a company’s activates in a
particular fiscal period have resulted in profit or a loss. The
income statement is a scoreboard of the firm’s performance
during a particular period of time. “The profit and loss account is
the condensed and classified record of the gains and losses
posing change in the owner’s interest in the business for a period
of time.”

The income statement or the profit and loss account presents the
summary of revenues, expenses and net income (or net loss) of a
firm for a period of time. Thus, it serves as measure of the Firm’s
profit ability. It’s a systematic array of the data of the revenues,
revenues deductions (expenses, revenues, revenue deductions
expenses, losses, taxes etc.)

C.STATEMENT OF CHANGE IN FINANCIAL


POSITION
Until 1960, the income statement and the Balance Sheet
constituted the two major financial statements. However,
management traditionally made use of a wide variety of
statement and reports in apprising internal company
performance. One popular report for management’s internal use
was called the statement of changes in final position. Form such a
report, management could extract valuable information about
where working capital and cash come from and how they were
used. If these past events could be projected in future,
management would have a useful tool for budgeting. Today, the
statement of changes of financial position represents third
financial position represents a third financial statement.

PARTIES INTERESTED
Accounting to the American institute of certified public
accountants, financial statement reflects,” a combination a record
facts, accounting conventions and personal judgments and
conventions applied, affect them materially”.

Following are interested in financial statement:

 Creditors, suppliers and others are having business with the


company.

 Debenture holders

 Credit institutions and banks


 Potential lenders and investors

 Trade unions and employees

 Important customers wishing to make a long standing with


the company

 Economists and analyst

 Members of parliament, the public committee in respect in


government company

 Taxation authorities

 Others departments dealing with the industry in which the


company engaged co-operative

 The company low board.

FINANCIAL APPRAISAL
A company’s financial statements are intended to summarize the
results of its operations and its ending financial condition. The
information in the statement is studied and related to other
information by external users for several reasons. Current
shareholders, for example, are concerned about their invested
income, as well as the company’s overall profitability ad stability.
Some potential investors are interested in “solid” companies that
are companies whose financial statements indicate stable
earnings and dividends with little growth in operations. Others
prefer companies whose financial statement indicate rend for
rapid growth in different lines of business. Short-term creditors
are interested in a company’s short run solvency, its ability to pay
current obligation as they become due. Long-term creditors are
concerned about the safety of their interest; income and
company’s ability to continue earning and cash flow to meet its
financial commitments and these are only few of the users and
uses of financial statements.

But the numerical data in the financial statement are quite calm.
They cannot speak. Analytical data are not ending in themselves,
but they are meant to a end. Financial appraisal is an attempt to
determine the significance and meaning of the financial
statement data so that forecast may be may be made of the
prospects for future earnings, ability to pay interest, debts
maturities both current as well as long term profitability of a
sound dividend policy. Financial appraisal involves the
assessment of firm’s past, present and anticipated future financial
condition.

Financial appraisal is a scientific evaluation if the profitability and


financial strength of a business concern. In fact financial appraisal
and analysis of financial statement have nearly the same
meaning. Financial statement analysis is used for the purpose of
financial appraisal. Financial appraisal is the process of making a
scientific proper, critical and comparative evaluation of the
profitability and financial health of given concern through the
application of financial statement analysis. Financial statement
analysis is a preliminary step towards the evaluation of result
dawn by the analyst or management accountant. Appraisal or
evaluation of such results is made there after. Financial appraisal
begins where financial analysis ends and financial analysis starts
where the summarization of financial data in the form of profit
and loss account and Balance Sheet ends, in the words of Kenney
and Mecmillan, ”Financial statement analysis attempts to unveil
the meaning and significance of the items composed in profit and
loss account ad balance sheet so as to assist the management in
the formation of sound operating financial policies. The appraisal
or analysis of financial statements spotlight the significant facts
and relationships concerning managerial performance, corporate
efficiency, financial strength or weakness and credit worthiness
that would have otherwise been buries in the maza of details.”

The technique of financial appraisals frequently applied to the


study of accounting data with a view to determining continuity or
discontinuity of the operating policies and investment value of
business. Everyday interested in the affairs of the company is
interested in finding answer to the following searching question:

A. Does the company earn adequate profit?

B. Does the company process enough funds to meet its


obligation as and when they mature?

C. Is investment in the company safe?


Appraisal of financial statement alone can answer such queries.
Its true that statement analysis merely reveals what has taken
lace in the past, but past events given some indication of what
may be expected in future unless some drastic changes take
place in business it will continue to move in the same direction in
the past.

Roy. A. Faulke is very correct to say, “If a train is moving forward


at a known rate of speed, it is reasonable to assume that it will
continue to move at approximately the same rate unless some
obstacle interrupts its progress abruptly or the motive power is
increased or decreased.” Similarly it is a reasonable to assume
that unless some realistic changes take places in the business. It
will continue to move in the same general direction as indicated
by its comparative trends.

NEED OF FINANCIAL APPRAISAL


The need of financial appraisal varies accounting to type of users.
For management is servers as means of “self evaluation” as it is
like a report of its managerial skill and competence, a banker can
judge the liquidity position a creditor can plan buying and selling
of hares of a concern on the basis of safety of principal and its
capital appearances as warranted by the past record of earning.
A debenture holder of a concern can ascertain whether income
generates sufficient margin to pay the interest / answers to
different question are provided by financial appraisal. By using
this technique an economist can study the extent of
“concentration of economic power” and pit falls in the financial
policies pursued, while a planner can ascertain if the patter of
investment reveals the company’s position in relation to labor
and its welfare, legislation concerning licensing, desirable in the
socio economic interested may be based on statement analysis.

TOOLS AND TECHNIQUES OF FINANCIAL


APPRAISAL

Financial appraisal tools and techniques are the measurement of


performance of business and soundness of financial position.
They are one of the most inevitable steps required for financial
position. They are one of the most inevitable steps required for
financial appraisal.

They can be divided into three parts:

(1)Accounting technique

(2)Statistical techniques and

(3)Mathematical technique

In this study ratio analysis has been used as a tool, hence only
accounting technique has discussed in detail.

Accounting techniques:
To appraise the financial strength as well performance of a
business concern various accounting technique are applied. The
object of these techniques is to simplify to collected and
rearranged and data by which they can be made easy to
understand. These techniques are summarized as under:

 Ratio analysis

 Trend percentage

 Common size and comparative statement

 Fund flow analysis

 Break– even analysis

Ratio analysis:

Accounting ratios are relationship expressed in mathematical


terms, between figures which have a cause and effect
relationship or which are connected with each other in some
manner or the other.

To quote Wixon, Keil and Bedford, “A ratio is an expression of the


quantitative relationship between two numbers.” Ratio analysis of
statements is the process of determining and presenting
relationship of items and groups of items in the statements.”

According to Kohler, “A ratio is the relation of one integer,


decimal, fraction or percentage.”

The purpose of ratio is to anatomies and facilitates comparisons


with periods, and another organization or an industry average or
standard. It is very significant to know that ratios are calculated
only when both the figures have some kind of relationship. If the
figures are not interrelated, the ratio calculated does not convey
and meaning or significance. For instance, profit is related to
sales because it is an outcome or sales minus cost but not a
remote relationship between lab our cost and amount of debtors,
thus the ratio calculated will not have any meaning.

Ratio acts likes as pointer or indicator of financial soundness,


strength, position or status of an enterprise and also act as
predictors of future prospects, financial health or sickness. Thus
ratios play a very crucial role in appraisal. It is a historic term as
well as astrological besides being a contemproal term.

Most important part of ratio analysis is interpretations of ratios.


Computation is important as well as but it is only clerical work. It
is interpretation of ratios that matters. It is the task of human
brain requiring the art and the skill. The usefulness of ratios is
wholly dependent on their intelligence and judicious
interpretation.

Ratios, by themselves carry little sense in absolute terms.


Therefore, the comparison is essential for drawing suitable
inference.

Ratio can be classified on two basis:

(A)STRUCTURAL CLASSIFICATION: On this basis


ratios can be divided as under:

 Balance sheet ratio: These types of ratios are calculated


by figures given in the balance sheet.

 Income statement ratios: Ratio calculated from figures


derived from profit and loss accounts is included in this type
of ratios.

 Inter statement ratios: The ratios, which are computed


from figures of both the financial statements, are called inter
statement ratio.
(B)FUNCTIONAL CLASSIFICATION: On the basis,
ratios can be divided in the following:

 Profitability ratios: Ratios, which measure the profitability


of a concern, are termed as profitability ratios.

 Turnover or activity ratios: Ratios used to measure the


effectiveness of the use of capital or assets are called
activity ratios.

 Solvency ratios: This type of ratios denotes the financial


position concern. Solvency can be divided in to two types.

A. Short-term solvency or liquidity: The capacity of firm to


meet its current obligations is called liquidity. Ratios to
measure liquidity are called liquidity ratios.

B. Long-term solvency: It is a measurement of the firm’s


overall strength. Ratios to measure this term are
specified as long-term solvency ratios.

TREND PERCENTAGE
A horizontal comparison of various items of one along with their
percentage to the total can be made to know the trend of
Particular Item of over a period of years. The study of trend
will indicate the direction of movement over a long time. One can
get a better view of things unaffected by short-term influences by
the study of long-term trend percentage. Another type of the
comparison by trend percentage can be termed as index
numbers. Index numbers can be computed by taking common
base.

PROJECT OBJECTIVES
CONCEPTUAL
To prepare a report after analysis and interpretation of finding
from Balance sheet as well profit and loss account through
applying various mathematical and financial tool and techniques.

FUNCTUAL
The present earning capacity or profitability of the
Jaipur Dairy Ltd.

The operational efficiency of Jaipur Dairy Ltd.

The short-term and long-term solvency

The financial stability of a business.

The possibility of development in the future by


making forecast and preparing budget.

COMPARATIVE AND COMMON SIZE


STATEMENTS
(A)COMPARATIVE STATEMENT: Comparison of two or more
years of a concern and comparison of two comparable units can
be made through comparative statements. This will be facilitated
if the relevant dated are laid side by side in statement in single
column form.

(B)COMMON SIZE STATEMENTS: The proportion which a single


time represents within a total group or subgroup if calculated, will
give an idea about the relative importance of items inter-se. The
total group figure is the base and can be taken as 100. Since all
other components expressed as a percentage of the total, which
has common size (i.e.100), the financial statements are known as
common-size statements. This is in facts a vertical financial
statement. The statements are known comparative common size
statements, if comparative actual data are also placed side by
side.

However, under this technique individual items of profit and loss


account and Balance sheet are educated to common base, which
we treated as equivalent to one hundred. In case of profit and
loss account, sales are taken as hundred and all items are
expressed with reference to sales. In a Balance sheet the ratio of
each asset to total assets and ratio of each liability and capital
item to total liabilities and capital (which is the same amount as
total assets) is computed.

These vertical percentages serve as indicators of the significant


relationship, which exist between the expenses and the sales.

FUND FLOW ANALYSIS:


A statement of changes in financial position can be prepared to
analysis the reason which has laid to such changes. “Fund flow
statement is a statement either prospective setting out the
sources and application of the funds of an enterprises.” The
purpose of statement is to indicate clearly the requirement of
funds and how they are proposed to be raised and the efficient
utilization and application of the same.

BREAK-EVEN ANALYSIS:
The narrower interpretation of the Break-even analysis tells us
that it is a system of determination of that level of activity where
total cost equal total revenue of selling price. The broader
interpretation refers to that analysis which determines the
provable profit at any level of activity, as stated by Weton and
Briahman.” Break-even analysis is useful in studying the relations
among volume prices and cost structure, it is thus helpful in
pricing, cost control and other financial decision.” There, it is very
crucial tool to measure profitability of business. “It magnifies a
set of interrelationship of fixed costs, variable costs, level of
activity of the profitability of the concern,” Says Kulsrestha. Thus
it is a tool of financial analysis in a specific way of presenting and
studying in interrelationship among costs, volume and profits.

WORKING CAPITAL ANALYSIS

CONCEPT
NEED FOR WORKING CAPITAL
ANALYSIS OF WOKING CAPITAL
WORKING CAPITAL TREND ANALYSIS
RATIO ANALYSIS OF WORKING CAPITAL

 CURRENT RATIO

 QUICK RATIO
 ABSOLUTE LIQUIDITY RATIO

 INVENTORY TURNOVER

 WORKING CAPITAL TURNOVER

CONCEPT

The funds required for financing the duration of operation cycle in


business are known as working capital. It is excess of current
assets over current liabilities.

The term net working capital can be defined in two ways (1) the
most common definition of Net Working Capital (NWC) is
difference between current assets and current liabilities (2) and
alternate definition of NWC is that portion of a firm’s current
assets which is financed by long term funds. The quantitative
concept or net working capital concept explains working capital
as “excess of current assets over current liabilities.” Net Working
Capital represents the amount of the current assets, which would
remain if all the current liabilities were paid,” (3) Net Working
Capital is commonly defined as difference between current assets
and current liabilities.

The term current assets may be defined as cash and other assets,
which are expected to be converted in to cash in the ordinary
course of business within one year or within such longer period as
constitutes the normal operating cycle of business. Current
liabilities are those liabilities classifiable as current assets or the
creation of other current liabilities.

NEED OF WORKING CAPITAL


In business the current assets and current liabilities flows like an
electric current. The working capital plays the same role in the
business as the role of heart in human body. Just like hearts get
blood and circulation, the same way working capital funds are
generates and these funds are circulated in the business, and
when this circulation stop the business lifeless. It is because of
this reason that the working capital is known as the circulating
capital as it circulates in the business just like blood in human
body.

The funds generated from issue of shares, borrowings and from


operations are used to pay creditors, for materials etc. this make
available stock of finished goods by sale of which either debtor is
created or cash is received, thus generation profit. A portion of
profit is utilized for payment of tax, interest and dividends. This
cycle continues throughout the life of business.

Without adequate working capital no progress can be made.


According to Kennedy and Macmillan working capital should be
sufficient in amount to enable the company to conduct it business
on the most economical basis and without financial stringency
and to meet emergencies and losses without danger of financial
disaster.
The importance of working in a business enterprise can hardly be
overemphasized. It is the capital, which keeps the working of
business. Working capital is a consideration of major importance
in determining the financial strength of an enterprise. It indicates
the concern’s ability to carry on its normal business comfortably
and without financial stringency, to expand its operation without
disaster. Amplifying the importance of working capital,
unfortunately working capital requires more close attention than
only other.”

A study of working capital is of major importance to internal and


externals analysis because of its close relationship with day-to-
day operations of concern. Inadequacy or mismanagement of
working capital is the leading factor of the business failure.

ANALYSIS OF WORKING CAPITAL

Working capital is an essential part of financial management. If


there is an adequate amount of working capital and it is utilized in
the right manner, it is a great achievement for the business. The
excess of working capital caused financial stringency and brings
the business to a standstill.
Realizing the impotence of working capital in financial
management the analysis of working capital becomes an
essential phenomenon. It facilitates the adequacy and
management of working capital. The analysis of working capital
provides a careful inquiry into its components so as to control the
working capital and to conserve it properly. It helps in
determining the optimum level of working capital in the firm. The
process of measurement and analysis of working capital is
performed on the basis of financial statements of business
enterprise for past few years.

In the present study the analysis of working capital of Jaipur Dairy


Ltd; has been made by two techniques viz., trend analysis and
ratio analysis.

(1)WORKING CAPITAL TREND ANALYSIS

The working capital trend analysis represents a picture of


variation in current assets, current liabilities and working capital
over a period of time. Such an analysis enables us to study
upward and downward trend in current liabilities and its effect on
the working capital position. The trend analysis is a tool of
financial appraisal where the changes in the factors are compared
with the base year assuming the base year as 100.

In the present study a statement showing trend of working capital


as well as its structure has made. It is scientific and important
study because each component of working capital has got the
relationship of causes and effects.

Following table below shows the structure and rend of working


capital of Jaipur Dairy Ltd. during the period under review.
STRUCTURE AND TREND OF WORKING CAPITAL OF JAIPUR
DAIRY DURING

2006-2007 TO 2008-2009

STRUCTURE AND TREND OF WORKING CAPITAL OF


JAIPUR DAIRY DURING 2005 TO2008

2006- 2007- 2008-


PERTICULAR 2007 2008 2009
CURRENT ASSETS
CASH 855819.51 836439.2 641400.38
35936348. 27218462 39428230.
BANK 16 .16 81
84836477. 77115112 84553701.
LOAN AND ADVANCES 65 .92 06
31102776 35658000 322356063
DEBTORS 0.6 0.4 .25
42732738 46504857 712626734
STOCK 4.8 3.5 .60
85998379 92679858 115960613
TOTAL (A)
0.7 8.2 0
CURRENT LIABILITIES
CURRENT LIABILITIES 51295075 44200964 586443305
AND PROVISIONS 0.7 8.8 .1
51295075 44200964 586443305
TOTAL (B) 0.7 8.8 .1
NET WORKING 34703304 48478893 573162824
CAPITAL (A-B) 0 9.4 .9

In current assets inventory and debtors balance occupied major


portion. Its amount increase year-to-year remaining three items of
current assets viz. cash and loans and advances and short-term
investment have shown also increasing trend but cash and bank
balance show fluctuating trend. In current liabilities is not having
arising trend in two years, which shows that Jaipur Dairy Ltd. has
good liquidity condition to pay its arising current liabilities.

RATIO ANALYSIS OF WORKING CAPITAL

Trend analysis shows the trend of current assets, Current


liabilities and working capital only. It do not interpret the
contribution of each item of working capital in the trend, whereas,
it can be done easily by ratio analysis. The ratio analysis of
working capital can be used by management of the company.
Following ratio haven used to analysis and interpret working
capital of Jaipur Dairy Ltd.
 Current ratio

 Quick ratio

 Absolute ratio

 Stock or inventory turnover ratio

 Working capital turnover ratio

A. Current ratio:

Current ratio is one of the important ratios used in testing


liquidity of a concern. This is a good measure of the ability of
accompany to maintain solvency over a short-run. This is
computed by dividing the total current assets by the total
current liabilities and is expressed as:

Current Assets

Current ratio= ------------------------------

Current Liabilities

The current assets of a firm represent those assets, which can


be in the ordinary course of business, converted into cash
within one accounting year. The current liabilities are defines
as obligation maturing within a short period (usually one
accounting year). Excess of current assets over current
liabilities is known as working capital and since these two
(Current assets and current Liabilities) are used in current ratio
therefore, this ratio is also know as working capital ratio.

With the help of this ratio the analyst can review the extent to
which the company can cover such liabilities with current
assets. The current ratio gives the analyst a general picture of
the adequacy of the working capital of a company and ability of
the company to meet its day-to-day payment obligation. “It
likewise measures the margin of safety provided for paying
current debts in the event of a reduction in the values of
current assets.”

The current ratio is very useful as a measure of short-terms


debt prying ability but it is tricky to interpret this ratio. Experts
are of the view that the value of current assets should be at
least double the amount if current liabilities.

Walker and Boughn have the same view they are a good
current ratio may mean a good umbrella for creditors against
the rainy days. But the management it reflects bad financial
planning or presence of idle assets or over capitalization.”

Idle Current Ratio: 2:1


If this ratio is higher than standards than it is assumed

 Very good short-term liquidity or solvency.

 Excess stock, bad debts and idle cash

 Under trading

If this ratio is lower than standards than it is assumed

 Unsatisfactory short-term liquidity

 Shortage of stocks, less credit sales, shortage of cash

 Over trading

CURRENT RATIO OF JAIPUR DAIRY LTD.

DURING 2008 TO 2009

Year Current assets Current Current Ratio


Liabilities
(A) (B) (C) (B)/(C)
2008-2009 1159606169.4 586443314.8 1.92:1

INFERENCE
This table reveals that current ratio increased that is making
improvements in its short-term solvency. It is because of increase
in current assets as compared to current liabilities. Still this is
lower than standard current assets Ratio that shows a little bit
unsatisfactory liquidity position of the company.

(B) QUICK RATIO

The solvency of the company is better indicated by quick Ratio.


The fundamental object of calculating this Ratio is to enable the
financial management of a company to ascertain that would
happen if current creditors press for immediate payment and
either not possible to push up the sales of closing or it is sold; a
heavy loss is likely to be suffered. This problem arises because
closing stock is two steps away from the cash and their price is
more or less uncertain according to market demand.

The term quick assets includes all current assets expect


inventories and prepaid expenses. It shows the relationship of
quick assets and current liabilities. The Ratio is calculated as
following:

Quick Assets

Quick Ratio = -------------------------------


Current Liabilities

IDLE QUICK RATIO: 1:1


QUICK RATIO OF JAIPUR DAIRY LTD.

DURING 2007 TO 2009

Year Quick assets Current Current Ratio


Liabilities
(A) (B) (C) (B)/(C)
2008-2009 446979434.8 586443314.8 0.72:1

INFERENCE: Although it is less idle ratio still it has increasing


trend that shows dairy improving condition of short term solvency
of Jaipur dairy.

ABSOLATE LIQUIDITY RATIO


The absolute liquid ratio is the ratio between absolute liquid
assets and current liabilities is calculated by dividing the liquid
assets and current liabilities. Expressed in formula, the ratio is:

Absolute liquidity Assets

Absolute liquidity Ratio: -------------------------------------------------

Current Liabilities

The term liquid assets include cash bank balance and marketable
securities, if current liabilities are to pay at once, only balance of
cash and bank and marketable securities will be utilized.
Therefore, to measure the absolute liquidity of a business, this
ratio is calculated.

IDLE RATIO: 0.5:1


The idle behind the norm is that if all creditors for demand for
payment, at least 50% of their claim should be satisfied at once.

The table shown on the next page reflects the absolute liquidity
ratio Jaipur Dairy Ltd.

ABSOLUTE LIQUIDITY RATIO OF JAIPUR DAIRY LTD.

DURING 2007 TO 2009

Year Absolute liquid Current Absolute liquid


assets Liabilities ratio
(A) (B) (C) (B)/(C)
2008-2009 40069631.19 586443314.8 0.068:1
INFERENCE: This ratio is very below from idle ratio. It is
making insecure creditors claim but it is getting increasing trend.
It is needed to maintain this trend.

STOCK TURNOVER RATIO

Every firm has to maintain a certain level of inventory of finished


goods so as to be able to meet the requirements of the business.
But the level of inventory should neither be too high nor too low.
A too high inventory means higher carrying costs and higher risk
of stocks becoming obsolete whereas too low inventory may
mean the loss of business opportunities. It is very essential to
keep sufficient stock in business.

It is expressed in number of times. Stock turn over ratio/inventory


turn over ratio indicates the number of time the stock has been
turned over during the period and evaluates the efficiency with
which a firm is able to manage its inventory. This ratio indicates
whether investment in stock is within proper limit or not.

Higher ratio indicates

 Stock is sold out fast

 Same volume of sales from less stock or more sales from


same stocks

 Too high ratio shows stock outs or over trading

 Less working capital requirement


Lower ratio reveals

 Stock is sold at a slow speed

 Same volume of sales from more stocks or less sales from


same stocks

 More working capital requirement

 Too low ratios show obsolete stocks or under trading

RESEARCH METHODOLOGY

Research methodology is a systematically solve the research


problem. It has many dimensions and research methods
constitute a part of the research methodology.

Thus when we talk about research methodology, we don’t only


talk of research methods but also consider the logic behind the
methods. We use in context of out research study, so that
research results are capable of being evaluated by researcher
himself or by others.
To effectively carry out my research, I used following research
process, which consists of series of actions or steps.

Research comprises of following steps:-

1. Formulating the research problem

2. Research design & sample design

3. Analysis of data gathered

4. Data analysis comparison

5. Graphics and interpret

1. Formulating the research problem

This is the first step under which the problem is stated in general
way and then ambiguities i.e. understanding and rephrasing the
problem thoroughly and rephrasing the same into a meaningful
terms from an analysis point of view.

The research problem under the present project was to study


data of various funds. For this research process was to be
formulated and the execution of which would result in the desired
data.

2.PREPARING THE RESEARCH DESIGN


The function of research design is to provide for the collection of
relevant evidences with minimum expenditure of efforts, time and
money.

Research design

• Type of research

• Sample design

Type of research

The type of research under this project is an analytical research.


In analytical research, we use facts or information already and
analysis these to make a critical evaluation of the material. In this
project I had collected facts, data and information.

SAMPLING DESIGN

A sample deign is a definite plan determined before any data is


actually collected for obtaining a sample. Researcher must select
a sample design, which should be reliable and appropriate for his
report.

3.OBSERVATION DESIGN (COLLECTION OF


DATA)

Observational design relates to the condition under which the


observations are to be made. Observational design is respect to
descriptive research study. Data collection is an integral part of
marketing research. There are several ways of collecting the
appropriate data, which differ considerable in context of money,
time cost and other resources at the disposal of the researcher.

Data can be obtained from two important sources:

 Primary data

 Secondary data

PRIMARY DATA

Primary data is collected a fresh and for the first time. Thus
happens to be in character. Primary data can be collected by
various methods i.e.

1. Observation

2. Interview

3. Schedules

4. Questionnaires

Secondary Data
The sources of secondary data are:-

1. Corporative magazines

2. Manuals of various companies


3. Various publications

4. Books, magazines of particular clubs and newspapers

5. Employment exchange

SUMMARY OF CONSLUSION AND


RECOMMENDATION

Financial analysis is analysis of financial statements of and


enterprise. Financial statement reorganized collection of data
according to logical and constituent accounting procedures.
However, financial statements in their traditional from giving
historical data and information are of little us to these who use
them to draw certain conclusions.

Financial appraisal is scientific evaluation of profitability and


financial strength of any business concern. Financial appraisal
techniques include ratio analysis common size analysis trend
analysis, fund flow analysis etc. these techniques may be applied
in the financial appraisal of any entity and Jaipur Dairy Ltd. is no
exception to it.

After a careful and critical analysis of Jaipur Dairy Ltd. it is


convenient to look into the overall conclusions and suggestions.

THE PROLOGUE
Today India is a biggest milk producer in the Asia. After
independence and milk revelation the production of milk
increased manifolds. Milk is an essential utility in every body’s
life. It is one of the basic needs of human life. Now a day
production of milk and milk products is most important in India,
both in terms of generating employment opportunities and for
meeting the basic requirement of people. It yields manifold
returns. This industry has contributed in a significant manner to
the faster and quicker economic development of this members
and country. The plant of Jaipur Dairy Ltd. is located on Jawaharlal
Nehru Marg. This is the biggest milk supplier in Jaipur district
PROFITABLITY

The measurement of profitability is a tool of overall measurement


of efficiency. An overall study of profitability of Jaipur Dairy Ltd.
has been Dade in relation to sales, operating assets capital
employed and its net worth.

By analysis the working results i.e. profit and loss account of


Jaipur Dairy Ltd. it was found that, the net profit before interest
and tax of the dairy is showing an increasing trend. This is very
good for Jaipur Dairy Ltd. The increase in the profits is nearly
24%. More than the previous year the reason is good sales growth
between years.

For this following suggestion should be considered:

 Proper cost control is required and cost control techniques


should adopt for it.

 Operating expenses, Administrative expenses should be


especially considered to be reduced.

 Inventory is the biggest item of Balance sheet that must


have demanded a large amount of maintaining cost. So
efficient inventory management should be done.
 Inventory should be reduced to some extent that would help
to recover blocking money in inventory.

 The service staff should be given proper training and better


environment for work.

 Proper advertisement and sales promotion is required.

 Dairy has to pay large fixed interest charges. Hence long-


term borrowing should be reduced so that the earnings are
satisfactorily earmarked with them.

WORKING CAPITAL

The concept of working capital indicates the excess of current


assets over current liabilities. Working capital should be sufficient
for the company to conduct its business on the most economical
basis.

The working capital of Jaipur Dairy Ltd. shows as increasing trend


during 2007 to 2009. It means the Jaipur Dairy Ltd. has enough
fund to operate business after analysis different components of
current assets. It can be concluded that debtors and stock
constituted a major part of the current assets. It enable said that
the dairy was not having adequate control on debtors and stock.
In both years current liabilities were the major portion in all the
liabilities.
The current ratio of the company has been lower than the
generally accepted norm of 2:1. Throughout the period
understudy the quick ratio was below the norm for all the years.
This shows that Jaipur Dairy Ltd. with regard to meeting current
liabilities from creditor’s point of view is not perfectly sound in
both years. The absolute liquidity ratio has been below the norm
of 0.5:1 in all the years.

However, the Jaipur Dairy Ltd. has shortage of capacity to pay its
entire current liabilities at once. Inventory turnover ratio is very
good that reveals that dairy can increase its sales at lower profits.
Proper attention should be paid by management towards this side
to utilize funds blocked in stock. Number of days to collect
receivable requires improvement on the part of management. But
since milks are a seasonal crop type business, stocks do get
complied for a few months and that is why the funds get blocked.

It is suggested in this respect that the Jaipur Dairy Ltd. should try
to balance the proportion of cash and bank balance in current
assets. The management should take steps for proper utilization
dependence on equity capital, which shows bright prospects of
Jaipur Dairy Ltd.

It is suggested in this respect that the Jaipur Dairy Ltd. should try
to balance the proportion of cash and bank balance in current
assets. The management should take steps for proper utilization
dependence on equity capital that shows bright prospects of
Jaipur Dairy Ltd.

CAPITAL STRUCTURE
Capital structure means the financial plan of an organization. In
which the various sources of capital are mixed in such a
proportion that they provide a distinct capital set up more suited
to the requirement of that particular organization. Capital
structure of Jaipur Dairy Ltd. has been analyzed with the help of
various ratios.

The various source of finance in the dairy are share capital and
loan from different banks. These are:-

The bank of Rajasthan Ltd.

State Bank of Bikaner & Jaipur

Jaipur Central Co-operative Bank

Oriental Bank of Commerce

Government subsidies have been also good sources of funds


those are invested in expansion and development of members
and societies. Outsiders’ funds have a major portion with compare
to net worth that is risky from lenders points of view. It would
make difficult for getting more outsiders’ funds.
For this following suggestion should be considered:

 It is considered to reduce dependency on outsiders’ sources


of funds

 Unsubscribe capital should be called up for funds


requirements

During the last two years the amount of net worth increased from
20.20 cores to 21.02 cores. There was decrease in the amount of
reserve and surplus. Increase outsiders’ funds have been found
82.31 to 101.22 cores.
REFRENCES
 I.M.Pandey, (1978), financial management, Ninth
addition, UBS Publication New Delhi.
 S.P. Gupta, Management Accounting, Sahitya Bhawan
Publications, Agra
 Van Horn,(2002),Financial Management and Policy,12th
edition, Publisher Dorling Kindersley India ltd.
 Horne Wwachonicz, J.R.Bhaduri (2005), Fundamentals
and Financial management, 12th edition, Pearson
publisher.
 MY Khan, P.K.Jain (1981), Financial Management, 5th
edition, Publisher Mc grew hill companies.
 Income statement and financial statement of 206-07 to
2008-09 as obtained from Jaipur Dairy.
 Financial dailies.
 Economic Times
 Business Standard

 Business Magazines
 Business India
 Business World

 Internet Portals:
 www.jaipurdairy.com
 www.dairyindia.com
 www.scribd.com