Professional Documents
Culture Documents
By
REJINTHALA.SINDHU
16881E0046
I hereby declare that this project report entitled “Financial Statement Analysis At National
Small Industrial Corporation(NSIC)” is a genuine project work carried out by me in MBA
degree course of Jawaharlal Nehru Technological University, Hyderabad under the guidance
of Mr.G.Ramesh, Associate professor, department of management studies and has not been
submitted to any other course/degree/diploma or university for the award of degree by
me.
_________________ ________ -
_____________
Internal Examiner External Examiner
ACKNOWLEDGEMENT
The satisfaction that accompanies the successful completion of the task would be put
incomplete without the mention of the people who made it possible, whose constant
guidance and encouragement crown all the efforts with success.
I would like to thank Dr.H.Vani, Assistant Manager,NSIC for her expert guidance and
encouragement at various levels of my Project.
I would like to thank Dr.V.Sreehari Professor & HOD for constant encouragement and
support.
I show gratitude to Dr.S.SaiSathyanarayana Reddy, Principal for provided all the facilities
and support.
I avail this opportunity to express our deep sense of gratitude and hearty thanks to
DrTeegalaVijender Reddy,Chairman, Sri TeegalaUpender Reddy, Secretary&Sri E.Prabhakar
Reddy,Treasurer of VCE, for providing congenial atmosphere and encouragement.
I express my deep sense of gratitude and thanks to all the Teaching and Non-Teaching Staf
of our college who stood with me during the project and helped me to make it a successful
venture.
I place highest regards to my Parents, my Friends and Well wishers who helped a lot in
making the report of this project.
REJINTHALA.SINDHU
(16881E0046)
INDEX
S.NO :CHAPTER PAGE NO:
1. CHAPTER-I
INTRODUCTION
Need of the study
Scope of the study
Objectives of the study
Methodology of the study
Limitations of the study
2. CTAPTER-II
Industry profile
Company profile
3.CHAPTER-III
Review of literature
4.CHAPTER-IV
Data analysis & interpretation
5.CHAPTER-V
Findings
Suggestions
Conclusion
Bibliography
INTRODUCTION
FINANCIAL STATEMENT ANALYSIS
INTRODUCTION:
Financial Statements are records that give a sign of the association's money related status. It
quantitatively portrays the money related wellbeing of the organization. It helps in the
assessment of the organization's prospects and dangers to make business choices. The goal
of the money related proclamations is to give data about the budgetary position, execution
and changes in monetary position of a venture that is helpful to an extensive variety of
clients in settling on financial choices.
Investigation is a procedure of basically analysing the bookkeeping data given money related
proclamations. Budgetary articulation examination is an imperative piece of general
monetary investigation, in light of the announcements which are the finished results of
bookkeeping framework, viz., Balance Sheet and Profit and Loss Account.
Primary Data:
Primary data is the first hand information that is collected during the period of
research. Primary data has been collected through discussions held with the staffs in the
accounts department. Some types of information were gathered through oral conversations
with the cashier.
Secondary Data:
Secondary data studies whole company records and company’s balance sheet in
which the project work has been done. In addition, a number of reference books, journals
and report were also used to formulate the theoretical model for the study. And some
information was also drawn from the websites.
LIMITATIONS OF THE STUDY
The money related subtle elements of the organization are gathered for a long time
as it were
NSIC is a legislature of India venture, can't be contemplated in 3months so time is
considered as primary limitation.
Most of the data has been kept private and all things considered isn't passed on as
Some portion of strategy of the organization.
In this examination, just chose proportions are ascertained.
It is affected by the value level changes
INDUSTRY
PROFILE
MICRO, SMALL AND MEDIUM ENTERPRISES (MSME’s)
INTRODUCTION:
Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and
dynamic sector of the Indian economy over the last five decades. MSMEs not only play
crucial role in providing large employment opportunities at comparatively lower capital cost
than large industries but also help in industrialization of rural & backward areas, thereby,
reducing regional imbalances, assuring more equitable distribution of national income and
wealth. MSMEs are complementary to large industries as ancillary units and this sector
contributes enormously to the socio-economic development of the country.
Khadi is the proud legacy of our national freedom movement and the father of the nation.
Khadi and Village Industries (KVI) are two national heritages of India. One of the most
significant aspects of KVI in Indian economy is that it creates employment at a very low per
capita investment. The KVI Sector not only serves the basic needs of processed goods of the
vast rural sector of the country, but also provides sustainable employment to rural artisans.
KVI today represent an exquisite, heritage product, which is 'ethnic' as well as ethical. It has
a potentially strong clientele among the middle and upper echelons of the society.
Coir Industry is an agro-based traditional industry, which originated in the state of Kerala
and proliferated to the other coconut producing states like Tamil Nadu, Karnataka, Andhra
Pradesh, Orissa, West Bengal, Maharashtra, Assam, Tripura, etc. It is an export oriented
industry and having greater potential to enhance exports by value addition through
technological interventions and diversified products like Coir Geotextiles etc. The
acceptability of Coir products has increased rapidly due to its 'environment friendly' image.
Ministry of Micro, Small & Medium Enterprises (M/o MSME) envision a vibrant MSME
sector by promoting growth and development of the MSME Sector, including Khadi, Village
and Coir Industries, in cooperation with concerned Ministries/Departments, State
Governments and other Stakeholders, through providing support to existing enterprises and
encouraging creation of new enterprises.
The Micro; Small and Medium Enterprises Development (MSMED) Act was notified in 2006
to address policy issues affecting MSMEs as well as the coverage and investment ceiling of
the sector. The Act seeks to facilitate the development of these enterprises as also enhance
their competitiveness. It provides the first-ever legal framework for recognition of the
concept of "enterprise" which comprises both manufacturing and service entities. It defines
medium enterprises for the first time and seeks to integrate the three tiers of these
enterprises, namely, micro, small and medium. The Act also provides for a statutory
consultative mechanism at the national level with balanced representation of all sections of
stakeholders, particularly the three classes of enterprises; and with a wide range of advisory
functions. Establishment of specific funds for the promotion, development and enhancing
competitiveness of these enterprises, notification of schemes/programmes for this purpose,
progressive credit policies and practices, preference in Government procurements to
products and services of the micro and small enterprises, more effective mechanisms for
mitigating the problems of delayed payments to micro and small enterprises On 9 May 2007,
subsequent to an amendment of the Government of India (Allocation of Business) Rules,
1961, erestwhile Ministry of Small Scale Industries and the Ministry of Agro and
Rural Industries were merged to form the Ministry of Micro, Small and Medium Enterprises
(M/o MSME). This Ministry now designs policies and promotes/ facilitates programmes,
projects and schemes and monitors their implementation with a view to assisting MSMEs
and help them to scale up.
ix) assistance for better access to domestic and export markets and
Organisational Setup
The M/o MSME is having two Divisions called Small & Medium Enterprises (SME) Division
and Agro & Rural Industry (ARI) Division. The SME Division is allocated the work, inter- alia,
of administration, vigilance and administrative supervision of the National Small Industries
Corporation (NSIC) Ltd., a public sector enterprise and the three autonomous national level
entrepreneurship development/training originations. The Division is also responsible for
implementation of the schemes relating to Performance and Credit Rating and Assistance to
Training Institution, among others. SME Division is also responsible for preparation and
monitoring of Results- Framework Document (RFD) as introduced in 2009 by the Cabinet
Secretariat under Performance Monitoring and Evaluation System (PMES). The ARI Division
looks after the administration of two statutory bodies viz. the Khadi and Village Industries
Commission (KVIC), Coir Board and a newly created organization called Mahatma Gandhi
Institute for Rural Industrialization (MGIRI). It also supervises the implementation of the
Prime Minister's Employment Generation Programme (PMEGP).
3. Khadi and Village Industries Commission (KVIC); the Coir Board, and
4. Three training institutes viz., National Institute for Entrepreneurship and Small
Business Development (NIESBUD),
5. NOIDA, National Institute for Micro, Small and Medium Enterprises (NI-MSME),
Hyderabad, Indian Institute of Entrepreneurship (lIE), Guwahati and
The National Board for Micro, Small and Medium Enterprises (NBMSME) was established by
the Government under the Micro, Small and Medium Enterprises Development Act, 2006
and Rules made thereunder. It examines the factors affecting promotion and development of
MSME, reviews existing policies and programmes and make recommendations to the
Government in formulating the policies and programmes for the growth of MSME.
National Small Industries Corporation Limited (NSIC)
NSIC, established in 1955, is headed by Chairman-cum-Managing Director and managed by a
Board of Directors.The main function of the Corporation is to promote, aid and foster the
growth of micro and small enterprises in the country, generally on commercial basis.
NSIC provides a variety of support services to micro and small enterprises catering to their
different requirements in the areas of raw material procurement; product marketing; credit
rating; acquisition of technologies; adoption of modern management practices, etc.
NSIC implements its various programmes and projects throughout the country through its 9
Zonal Offices, 39 Branch Offices, 12 Sub Offices, 5 Technical Services Centres, 3 Technical
Services Extension Centres, 2 Software Technology Parks, 23 NSIC-Business Development
Extension Offices and 1 Foreign Office.
The Khadi& Village Industries Commission (KVIC), established under the Khadi and Village
Industries Commission Act, 1956 (61 of 1956), is a statutory organization engaged in
promoting and developing khadi and village industries for providing employment
opportunities in rural areas, thereby strengthening the rural economy. The Commission is
headed by full time Chairman and consists of 10 part-time Members. The KVIC has been
identified as one of the major organizations in the decentralized sector for generating
sustainable rural non-farm employment opportunities at a low per capita investment. This
also helps in checking migration of rural population to urban areas in search of the
employment opportunities. The main functions of the KVIC are to plan, promote, organize
and assist in implementation of the programmes/projects/schemes for generation of
employment opportunities through development of khadi and village industries. Towards
this end, it undertakes activities like skill improvement, transfer of technology, research &
development, marketing, etc.
Coir Board
The Coir Board is a statutory body established under the Coir Board Industry Act, 1953 (NO.
45 of 1953) for promoting overall development of the coir industry and improving the living
conditions of the workers engaged in this traditional industry. The activities of the Board for
development of coir industries, inter-alia include undertaking scientific, technological and
economic research and development activities; collecting statistics relating to exports and
internal consumption of coir and coir products; developing new products and designs;
organizing publicity for promotion of exports and internal sales; marketing of coir and coir
products in India and abroad; preventing unfair competition between producers and
exporters; assisting the establishment of units for manufacture of the products; promoting
co-operative organization among producers of husks, coir fibre, coir yarn and manufactures
of coir products; ensuring remunerative returns to producers and manufacturers, etc.
The Board has promoted two research institutes namely, Central Coir Research Institute
(CCRI), Kalavur, Alleppey, and Central Institute of Coir Technology (CICT), Bengaluru for under
taking research activities on different aspects of coir industry which is one of the major agro
based rural industries in the country. The two major strengths of the coir industry are it
being export oriented and generating wealth out of the waste (coconut husk).
COMPANY
PROFILE
NATIONAL SMALL INDUSTRIES CORPORATION (NSIC)
INTRODUCTION:
National Small Industries Corporation (NSIC), is an ISO 9001-2008 certified Government of
India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME). NSIC has
been working to promote, aid and foster the growth of micro, small and medium enterprises
in the country. NSIC operates through countrywide network of offices and Technical Centres
in the Country. To manage operations in African countries, NSIC operates from its office in
Johannesburg, South Africa. In addition, NSIC has set up Training cum Incubation Centre
managed by professional manpower.
MISSION: “To promote and support Micro, Small & Medium Enterprises (MSMEs) Sector”
by providing integrated support services encompassing Marketing, Technology, Finance and
other services.
VISION: “To be a premier Organization fostering the growth of Micro, Small and Medium
Enterprises (MSMEs) Sector”.
Schemes of NSIC
NSIC facilitates Micro, Small and Medium Enterprises with a set of specially tailored scheme
to enhance their competitiveness. NSIC provides integrated support services under
Marketing, Technology, Finance and other Support service.
1) Marketing Support
Marketing has been identified as one of the most important tool for business development.
It is critical for the growth and survival of MSMEs in today's intensely competitive market.
NSIC acts as a facilitator and has devised a number of schemes to support enterprises in
their marketing efforts, both domestic and foreign markets. These schemes are briefly
described as under :
Small Enterprises in their individual capacity face problems to procure & execute large
orders, which deny them a level playing field vis-a'-vis large enterprises. NSIC forms
consortia of Micro and Small units manufacturing the same product, thereby pooling in their
capacity. NSIC applies the tenders on behalf of single MSE/Consortia of MSEs for securing
orders for them. These orders are then distributed amongst MSEs in tune with their
production capacity.
The units registered under Single Point Registration Scheme of NSIC are eligible to get the
benefits under “Public Procurement Policy for Micro & Small Enterprises (MSEs) Order 2012”
as notified by the Government of India, Ministry of Micro Small & Medium Enterprises, New
Delhi vide Gazette Notification dated 23.03.2012.
In tender participating MSEs quoting price within price band of L1+15 per cent shall
also be allowed to supply a portion upto 20% of requirement by bringing down their
price to L1 Price where L1 is non MSEs.
d) Marketing Intelligence
Collect and disseminate both domestic as well as international marketing intelligence for the
benefit of MSMEs. This cell, in addition to spreading awareness about various
programmes /schemes for MSMEs, will specifically maintain database and disseminate
information.
2) Credit Support
NSIC facilitates credit requirements of small enterprises in the following areas:
4) Technology Support
Technology is the key to enhancing a company's competitive advantage in today's dynamic
information age. Small enterprises need to develop and implement a technology strategy in
addition to financial, marketing and operational strategies and adopt the one that helps
integrate their operations with their environment, customers and suppliers.
NSIC offers small enterprises the following support services through its Technical Services
Centres and Extension Centres:
1. Capacity Building
3. Entrepreneurship Development
International Cooperation
NSIC facilitates sustainable international partnerships. The emphasis is on sustainable
business relations rather than on one-way transactions. Since its inception, NSIC has
contributed to strengthening enterprise-to-enterprise cooperation, south cooperation and
sharing best practices and experiences with other developing countries, especially those in
the African, Asian and Pacific regions. The features of the scheme are:
Quality Policy
We shall constantly adapt, innovate and refine our processes in line with global
business trends to maintain credibility and leadership in our field.
We commit ourselves for fair play, transparency and sincere endeavour for the
promotion and growth of Micro, small & Medium Enterprises.
Quality Objective
To upgrade the professional skills of all employees keeping in pace with business
needs.
To provide safe, clean, hygienic & congenial work environment for effective
contribution by every employee.
DEFINITION:
As indicated by Myers " Financial Statement Analysis is to a great extent an investigation of
relationship among different monetary factors in a business as unveiled by a solitary
arrangement of articulation and an investigation of pattern of these elements as appeared in
a progression of proclamations."
b) Internal Analysis: : This examination is finished by people who approach the definite
inside bookkeeping records of the business firm is referred to as inward investigation,
for example, examination can consequently be performed by administrators and
workers of the association and in addition government offices which have statutory
forces vested in them money related examination for administrative purposes.
a) Short term AnalysisShort term investigation measures the liquidity position of a firm
i.e, here and now paying limit of a firm or the company's capacity to meet the
present commitments.
b) Long term analysis:long term analysis involves the firm’s ability to meet the interest
costs and repayment schedules of its long term obligations. The solvency stability
and profitability are measured under this type of analysis.
1) RATIO ANALYSIS
Proportion Analysis is a standout amongst the most capable instruments of budgetary
Analysis. It is utilized as a gadget to break down and translate the money related strength of
the venture. Proportions are considered as on the helpful guides accessible to the
Management in surveying the position and reaching inferences with respect to effectiveness
and money related status of a business concern.
MEANING OF RATIO
A proportion is characterized as "the demonstrated remainder of two scientific articulations"
and as the "connection between at least two things".
TYPES OF RATIOS:
Ratios are grouped into various classes according to the financial activity or function they
evaluate. There are four important categories. They are
Liquidity ratios
Turnover ratios or Activity ratios
Profitability ratios
Leverage ratios
1. LIQUIDITY RATIOS:
Liquidity proportions measures the capacity of the firm to meet its present
commitments. It builds up the connection amongst money and other current advantages for
current commitments and give a measure liquidity position to the administration of the firm.
Current ratio:
The Current ratio is a measure of the company's transient dissolvability. It
demonstrates the accessibility of current resources in rupees for each one rupee of current
obligation. A proportion more prominent than one implies that the firm has more present
resources than current liabilities of the firm. The present proportion is ascertained by
partitioning the present resources by current liabilities. The perfect current proportion is 2:1
a)Debt-Equity Ratio:
Obligation value proportion is computed to determine the soundness of the organization's
long haul money related position. Obligation value proportion demonstrates the reach out
to which it relies on obtained stores for its reality. It depicts the extent of its aggregate assets
gained by method for outside financing.
From reasonable perspective, by and large, two monetary proclamations (accounting report
and wage explanation) are set up in similar frame for budgetary investigation purposes. Not
just the examination of the figures of two periods yet in addition be connection between
asset report and salary proclamation empowers a top to bottom investigation of money
related position and agent comes about.
LIQUIDTY RATIOS
1) CURRENT RATIO:
The Current ratio is a measure of the firm’s short term solvency. It indicates the availability
of current assets in rupees for every one rupee of current liability.The standard current ratio
is 2:1
Formula:
Current Ratio=Current Assets/ Current Liabilities
CURRENT ASSETS CURRENT CURRENT RATIO
YEAR LIABILTIES
2012-2013 211195.76 166769.7 1.2664
CURRENT RATIO
1.32
1.3
1.28
1.26
1.24
1.22
1.2
1.18
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Ideal ratio of Current ratio is 2:1. If a company’s current ratio is in this range, then it
generally indicates good short-term financial strength. If the current ratio is too high, then
the company may not be efficiently using its current assets or its short-term financing
facilities.When compared to all the years the current ratio is high in the year 2013-2014
i.e,1.3054. It has been decreased in the year 2016-2017 i.e, 1.2546.Therefore,the liquidity
position of the company is not good.
2) QUICK RATIO:
Quick ratio establishes the relationship between quick or liquid assets and liabilities. An
asset is liquid if it can be converted into cash immediately or reasonably soon without a loss
of value. The ideal ratio is 1:1
Formula:
Quick Ratio = Quick Assets / Current Liabilities
YEAR QUICK ASSETS CURRENT QUICK RATIO
LIABILTIES
2012-2013 211125.29 166769.7 1.266
QUICK RATIO
1.32
1.3
1.28
1.26
1.24
1.22
1.2
1.18
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Ideal ratio of Quick ratio is 1:1.A high Acid test ratio is an indication that the firm is Liquid and
has ability to meet its current or Liquid liabilities in time and on the other hand a low Quick ratio
represents that the firm’s liquidity position is not good. In all the 5 Years, the company is maintaining
the Quick ratio more than 1. The quick ratio is high in the year 2013-2014 i.e, 1.3052. Therefore,
company is efficiently able to meet its current or Liquid Liabilities.
PROFITABILITY RATIOS
1)RETURN ON EQUITY:
This ratio measures how the company is using the shareholder’s fund and higher the ratio
the better it is as far as investors are concerned.It is calculated as Net profit after preference
dividends/ Shareholders Equity
Formula:
Return On Equity= Net Profit After Tax / Equity
YEAR NET PROFIT EQUITY RETURN ON
AFTER TAX EQUITY
2012-2013 6235.5 45213.71 0.1379
RETURN ON EQUITY
0.16
0.15
0.15
0.14
0.14
0.13
0.13
0.12
0.12
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
A company is said to create value for shareholders if its ROE is greater than the cost of
capital. If ROE is less than the cost of capital, the investors do not gain anything by investing
in the company. The Return on Equity is high in the year 2013-2014 i.e,0.149when
compared to other years. The ROE has been decreased from the year 2015-2016 to 2016-
2017 by 0.54.Therefore, the investors are able to gain by investing in the company.
0.43
0.42
0.41
0.4
0.39
0.38
0.37
0.36
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Companies returns should always be high than the rate at which they are borrowing to
fund the assets. It shows how efficiently a company uses its capital employed as well as its
long-term financing and vice-versa. The company is having high return on capital employed
in the year2013-2014 when compared to other years. Therefore, the company is able to use
efficiently its capital employed.
Formula:
Debt-Equity Ratio = Debt/ Equity
INTERPRETATION:
The Ideal ratio of Debt-Equity ratio is 2:1. If the debt is less than 2 times the Equity, it means
the creditors are relatively less and the financial structure is sound. If the debt is more than
2 times the Equity, the state of long term creditors are more and indicate weak financial
structure. In all the 5 years, the Debt-Equity ratio is more than 2:1. Therefore, the state of
long term creditors are more
0.79
0.78
0.77
0.76
0.75
0.74
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
A Company with a Debt-Total Assets is greater than 1 means the company has more
liabilities than assets and the company is extremely leveraged and highly risky to invest in or
lend to. A company with a Debt-Total Assets is less than 1 shows that it has more assets than
liabilities and could pay off its obligations by selling its assets. In all the 5 years, the company
is maintaining debt to total assets less than 1, it indicates that the company is able to pay off
its obligations by selling assets. Therefore, it is less risky.
TURNOVER RATIOS
1)WORKING CAPITAL TURNOVER RATIO
The working capital turnover ratiois also referred to as net sales to working capital. It
indicates a company's effectiveness in using its working capital.
Formula:
Working Capital Turnover Ratio= Net Sales/ Working Capital
YEAR NET SALES WORKING CAPITAL WORKING CAPITAL
TURNOVER RATIO
2012-2013 148140.61 44426.06 3.3345
2013-2014 209670.12 59124.64 3.5462
2014-2015 250697.55 61521.04 4.075
2015-2016 262863 62924.88 4.1774
2016-2017 231187.2 65944.55 3.5058
INTERPRETATION:
A high turnover ratio indicates that management is being extremely efficient in using a
firm's short-term assets and liabilities to support sales. Conversely, a low ratio indicates
that a business is investing in too many accounts receivable and inventory assets to
support its sales, which could eventually lead to an excessive amount of bad debts and
obsolete inventory . The turnover ratio is high in the year 2015-2016 i.e 4.1774 when
compared to other years. Therefore,the company is efficiently utilising its short term
assets and liabilities.
2)FIXED ASSETS TURNOVER RATIO
This ratio shows the firm’s ability in utilising the fixed assets of the company. The ability of
the company in generating income from the fixed assets can be known by calculating this
ratio.
Formula:
Fixed Assets Turnover Ratio= Net Sales / Fixed Assets
20
15
10
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
A high fixed assets turnover ratio indicates better utilization of fixed assets and a low ratio
means inefficient or under-utilization of fixed assets. The company is having high fixed assets
turnover ratio in the year 2013,2014&2015 i.e, 16.48, 19.83 & 20.6256.Therefore, the
company is utilising there fixed assets to a maximum extent. The fixed assets turnover ratio
is less in the year 2016-2017 when compared to other years.
FINDINGS:
1. The Return on Equity has decreased continuously from 2014-2015 to 2016-2017 but it has
increased in the year 2013-2014. The decrease in the ratio indicates there is no better
investment.
2. We notice that there has been a gradual decrease in the debt-equity ratio of the company
from 2014-2015 to 2016-2017 and then there has been a sudden increase in the ratio in the
year 2013-2014. This declining trends indicating deteriorating capital structure
position and long-term solvency of the company. This situation demands immediate
measures to rectify and rationalize capital structure.
3. We notice that the return on capital employed has decreased from 2014-2015 to 2016-2017
but it has increased in the years 2013-2014. A higher return on capital employed shows
effective use of capital.
4. We can notice that the debt to total funds ratio is fluctuating in the past four financial years.
Companies that has fluctuating trend of ratio may have unpredictable business environments
as they can’t afford financial commitments, that they can’t meet in case of sudden down turns.
5. The current ratio in the year 2013-2014 and then decreases from the year 2014-2015
to 2016-2017 and it has a downward trend. The table shows the current ratio is less
than 2 in all the years. This shows that company is not enjoying the credit
worthiness.
6. The liquidity ratio during the study period is higher than the standard (i.e.)1:1. It was
increased in the year 2013-2014 and then reduced from 2014-2015 to 2016-2017.
Hence the company is not controlling its stock position.
7. The fixed assets turnover ratio has an increasing trend from 2012-2013 to 2014-2015
and has a decreasing trend in the year 2015-2016 and 2016-2017. This results that
the company is not efficiently not utilising its fixed assets.
8. The working capital turnover ratio has been increasing from 2012-2013 to 2015-2016
and it has been decreased in the year 2016-2017 as the net sales has been decreased
in the year 2016-2017 and the company is maintaining more working capital than
required.
SUGGESTIONS:
1. Company should try to increase the return on capital employed in order to make use of the
capital efficiently
2. We suggest that company should increase the ratio of return on equity for better investment
3. We suggest the company to use its debt more efficiently in financing the assets.
4. We suggest that should ideally use the company’s assets in order to attain better optimum
position.
5. The current ratio of the company is notbetter in all the 5 years. So that the company
has to maintain proper current assets to pay off the current liabilities.
Conclusion
If properly analysed and interpreted, financial statements can provide valuable insight into
firm’s performance. Analysis of financial statements is of interest to lenders (short term as
well as long term) investors, security analysts, managers and others. Financial statement
analysis may be done for variety of purpose, which may range from a simple analysis of the
short-term liquidity position of the firm to a comprehensive assessment of strength and
weakness of the firm in various areas. It is helpful in assessing corporate excellence, judging
credit worthiness, forecasting bond ratings, predicting the bankruptcy and assessing market
risk.
I have studied the attached Balance sheet and Profit and Loss Account of NSIC at 31 st march
2017. The financial statements are the responsibility of the company’s management the
analysis and interpretation of financial statements is essential to bring out the mystery
behind the figure in financial statements. Proper books of accounts require by law have been
kept by the company in so far as it appears.
BILBILOGRAPHY
WEBSITES:
WWW.google.com
WWW.NSIC.CO.IN
WWW.MSME.GOV.IN