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1.

1 INTRODUCTION

Finance is defined as the provision of money at the time when it is required. Every
enterprise, whether big, medium, or small, needs finance to carry on its operations and to
achieve its targets. In fact, finance is so indispensable today that it is rightly said to be the
lifeblood of an enterprise. Without adequate finance, no enterprises can possibly accomplish its
objectives. Finance refers to the management of flow of money through an organization.
Financial management refers to that part of the management activity which is concerned with
the planning and controlling of firm’s financial resources. It deals with finding out various
sources for raising funds for the firms. Financial performance analysis means establishing
relationship between the items in the balance sheet and profit and loss account for determining
the financial strength and weakness of the firm. It is the process of scanning of the financial
statements to judge profitability, solvency, stability, growth and prosperity of a firm. The study
entitled “Financial Performance Analysis of Kerala State Financial Enterprises Limited,
Thrissur” has been oriented with a view to study the financial position of the company that helps
in making sound decision by analyzing the recent trend.
IMPORTANCE OF FINANCE

Finance is regarding as the lifeblood of a business enterprise. This is because in the


modern money-oriented economy. Finance is one of the basic foundations of all the sources for
being employed in manufacturing and merchandising activities. It has rightly been said that
business needs money to make more money. However, it is also true that money begets more
money only when it is properly managed. Hence, efficient management of every
business enterprise is closely linked with efficient management of its finances.

FINANCIAL STATEMENT

A financial statement is an organized collection of data according to logical and


consistent accounting procedures. Its purpose is conveying an understanding of some financial
aspects of a business firm. It may show position at a moment in time, as in the case of a
balance sheet or may reveal a series of activities over a given period of time, as in the case of
income statements. Thus the term financial statement generally refers to the two statements.

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 The position statement (or) the balance sheet.
 The income statement (or) the profit & loss account.

FINANCIAL PERFORMANCE

INTRODUCTION

Analysis is the process of critically examining in detail accounting information given in


the financial statements. For the purpose of analysis individual items are studied, their
interrelationship with other related figures established, the data is sometimes rearranged ton
have a better understanding of the information with the help of different techniques of tools for
the purpose. Interpretation means explaining the meaning and significance of the data so
simplified. However both analysis and interpretation are interlinked.
Financial analysis is the process of identifying the financial strengths and weakness of
the firm by properly establishing relationship between the items of the balance sheet and the
profit and loss account analysis and interpretation of financial statements refers to such a
treatment of data found in the financial statements so as to provide a full diagnosis of the
profitability and financial position of an enterprise. Finance is a pre-requisite for mobilizing real
resources to organize production and marketing. Finance is rightly described as the life blood
of any industry. Thus financial analysis of any organization becomes very important.

Financial analysis is the starting point for making plans before using any sophisticated
forecasting and budgetary procedures. It is their overall responsibility to see that the resources
of enterprise are used more efficiently and effectively.

According to John .N.MYER, the balance sheet reflect the assets, liabilities and capital
as on a certain data and the income statement should the results of operation during a certain
period. Financial analysis is helpful in assessing the financial position and profitability of a
concern. This is done through comparison by ratios for the same concern. This is done
through comparison by ratios for the same concern over a period of years. For one concern
against of financial statements helps in assessing.

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1.2 INDUSTRIAL PROFILE

Section 45-1m of RBI Act defined non-banking financial institutions carrying on the business of
financial institutions constitute a heterogeneous group of financial intermediaries other than
commercial and co-operative banks. They form an important segment of financial institutions.
They raise funds from the public, directly or indirectly and lend these funds to their ultimate
spenders. As banking institutions were found insufficient to meet the ever increasing demands of
the corporate sector, non-banking financial institutions were set up to supplement the efforts of
these banking institutions. Non- banking financial institutions plan an important role in
channelizing the scare financial resources and economic development of a country.

In recent times, Non-Banking Finance Companies (NBFC's) gave emerged as substantial


contributors to the Indian economic growth by supplementing the efforts of banks and other
development financial institutions. They play a key role in the direction of saving & investment.
In the wake of rapid industrial development & liberalization of the financial sector, key financial
institution & professionals have promoted financial institutions to create a diversified &
competitive financial system. The financial system in the country comprises various institutions
engaged in the financial market of the country's economy. These institutions includes the all India
level financial institutions like IFCL, IDBI, ICICI, NABARD and the investment institutions like
SFC, SIDC etc. and the hire purchase companies, investment and loan companies, mutual benefits
and finance companies etc. thus in the financial system, NBFC's do play important role and
occupy significant positions.

 NBFCs have emerged as substantial contributors to the Indian economic growth by


supplementing the efforts of banks and other development financial institutions. The
NBFCs are also known as finance companies, loan companies, finance corporations etc,as
against 3-4% in India. A conductive and enabling environment has been created for the
NBFC industry of the countries. This is not the case in our country. Ti is, therefore
obvious that the development process of the Indian economy shall have to include NBFCs
as one of its major constituents with a very significant role to play. In fact, RBI's latest
report titled "Report on trends on progress of banking in India 2002-03 observes"

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 Notwithstanding their diversity, NBFC are characterized by their ability to provide financial
service in the Indian economy. Because of their relative organizational flexibility leading to a
better response mechanism, they are often able to provide tailor made service relatively faster
than banks and financial institutions. This enables them to build up a clientele that ranges
from small borrowers to establish corporate. While NBFCs have often been leaders in
financial innovations, which are capable of enhancing the functional efficiency of the financial
system, instance of un sustainability, often on account of high rates of interest on their
deposits and periodic bankruptcies, underscore the need for reinforcing their financial
viability.
NON-BANKING FINANCIAL COMPANIES (NBFC)

Non-Banking Financial Companies (NBFCs) also known as a non banking or a non-bank are
financial institutions that provides banking service without meeting the legal definition of a bank
are that does not hold a banking license. These institutions typically are restricted from taking
deposits from the public depending on the jurisdiction. Operations of these institutions are often
still covered under a country's banking regulations. The specific banking products that can be
offered by NBFC depends on the jurisdiction, and may include services such as loans and credit
facilities, saving products, investment and money transfer service. In some jurisdiction, such as
New Zealand, any company can engage in banking business except they are not allowed to use the
World Bank in their name, a company can only call itself a bank if it is registered as such with the
nation's central bank.

A Non-Banking Financial Company (NBFCs) can be defined as "Any hire purchase finance,
investment, loan or mutual benefit financial company, land and equipment leasing company. but
doesn't include any insurance company or stock exchange or stock broking."

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1.3 COMPANY PROFILE

In 1967, the Government of Kerala took a policy decision of the effect that chitties should be
conducted under state auspices as means for the collection of small savings. The finance minister,
in his budget speech for the financial year 1967-68 made the following announcement on the floor
of the Kerala Assembly. "I view this decision as a bold step forward along the path towards
socialism, aimed at bringing banks and other financial institutions under social control"

As the follow up, the Government of Kerala, appointed a Special officer in the year 1967, to look
feasibility and desirability of starting Chit Funds in the public sector. One of the objectives of
starting Chit Funds in the public sector was to control the growth of private chit funds and to
restrain their growth by offering effective competition. The special officer, who presented his
report on 7th October 1967, recommended strongly the entry of the Government into the field of
Chits. Though the recommendation was for conducting Chit as an adjunct of the Registration
Department, the Government took a different view and decided to bring within its purview and
control, not only Chitties or Kuries, but also certain financial transactions for which socialization
was felt necessary. Accordingly the Government decided to organize a public sector undertaking
with the name "The Kerala State Financial Enterprise Ltd (KSFE)" for the purpose of conducting
Chits, hire purchase and insurance business under Government control. This apart, the
Government of Kerala had a progressive vision for generating non-revenue income through such
public sector ventures.

Thus, KSFE Ltd. was incorporated as a Government company on 6th November 1969 with
its Head Office at Thrissur with the objectives of serving as a discipline factor to private Chit
funds. The management of the company vested in the Board of Directors constituted by the
governor from time to time. The number of directors shall not be less than two and shall not more
than nine. The governor may from time to time two directors other than the MP as chairman and
vice chair man of the board. The first board was constituted as per the government under G.0
(GR) 4876/96 financial date 1969 the MD is appointed by the governor on such terms and
remuneration as may think felt and management of the business of the company subject of the
control and supervision of the BOD general body representing the shareholders shall be governing
body of the company.
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KERALA STATE FINANCIAL ENTERPRISE Ltd.

The Kerala State Financial Enterprise Ltd popularly known as KSFE fully owned by the
Government of Kerala and is the first public sector company to conduct the Chit business in the
whole of India. It is miscellaneous Non-banking financial company. It was incorporated on 6th
November, 1969 with its registered office in Thrissur. It has an authorized capital of Rs.25 Lakhs
divided into 25000 equity shares of Rs.100 each and a paid up capital of Rs.2 Lakhs as
contributed from Government of Kerala.

At the incorporation stage of KSFE, the total number of employees was 45 and number of
branches was 10. Today with over 40 years of functioning KSFE is having more than 350
branches and 7 regional offices in Kerala.There were 5100 and above employees in the company.

More than 20 Lakhs customers are connected with KSFE. With a view to overcome the threats of
efficient customer service by financial institutions like banks, non-banking financial institutions
and other local Chitty institutions with their computerized environment, the company decided
(1999) to go in for complete automation to be implemented in 3 phases starting with the front
office automation of its branch offices. The company selected (July 2000) Accel Ltd for analyzing
the business requirement, preparing feasibility study of the project and for developing the
application software for the front office automation of the branch office. Then Accel Ltd software
developed and installed at 2 branches. Via Thrissur Main (Nov. 2001) and Kesavadasapuram
(Aug. 2002) was accepted by the company on 17th June 2004 after testing and was rolled out of
12 out of 269 branches as on May 2007. The corporate office of KSFE is at Thrissur. It has 7
regional offices;

1. Thiruvananthapuram
2. Kollam
3. Ernakulum
4. Thrissur
5. Kozhikode
6. Kottayam
7. Kannur

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1.4 OBJECTIVES OF THE STUDY

 To assess the company’s ability to fulfill its short term obligations and short term financial
strength
 To assess the company’s ability to meet its long term obligations.
 To evaluate the relative contribution of owners and creditors in financing the assets of the
company.
 To evaluate the cost and expenses incurred.
 To assess the profitability related to the sale.
 To study the optimum level of current assets and current liabilities of the company.

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1.5 SCOPE OF THE STUDY
The study was carried at The Kerala State Financial Enterprises Limited, Thrissur analyze its
financial performance on the past five years. The study aims to analyze the liquidity, profitability,
solvency position of the company. Liquidity ratios like current ratio, quick ratio etc is prepared to
analyze the financial position of the company. Profitability of the company is found out by using
ratios like return on net profit ratio, return on capital employed ratio etc. The changes can be
observed by comparison of the balance sheet at the beginning and at the end of a period and these
changes can help in forming an opinion about the progress of an enterprise.

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1.6 LIMITATIONS OF THE STUDY

 There is difficulty in retrieving the information at right time.


 The study was restricted for a period of five years.
 Due to inadequate time, it was not possible to analyse all the aspects relevant to the study.
 The study was made about only in one enterprise therefore inter firm comparison is not
possible.
 The available data were not perfectly reliable for the study.
 Only the financial health of the company has been studied. The other aspects like the
managerial efficiency, labour efficiency, marketing efficiency etc. have not been
analysed.

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2 REVIEW OF LITERATURE

Prameela.S (1996) conducted a study for the analysis on the financial performance of the
Trivandrum Co-operative Agricultural Development Bank. In her study, she suggested that the
success and survival of any credit institution depends upon the mobilization, deployment and
proper recovery of funds. The study also revealed that, the lack diversified activities and inability
to identify the new and potential areas stands as a way to the proper performance of the bank.

CRISIL rating of NBFCs published in Hindu business line, website has expressed concern
over the week financial fundamentals of non NBFCs. The NBFC sector has under sever pressure
due to deteriorating credit fundamentals and difficult business conditions in economy, which has
impacted, credit growth in their primary business. It also suggests that, "in the changed scenario,
cost of funds and liability to capitalize at regular intervals are key factor for NBFC to sustained
good asset quality, maintain reasonable and defend market position.

Financial Performance survey 2004 conducted by Wind2 software provides benchmark for
professional service firms. Wind2 software has released the result of its 2004 financial
performance survey of professional services firms. Based on extensive data collected from firms
whose fiscal years entered December 2003 through June 2004, the report examines 30 critical
financial ratios and indexes, tracks recent changes, and explains the significance of each using
aggregated, industry- wide data; the report also presents a balance sheet, P & L statement and a
details breakdown of over head costs and marketing expenses. For virtually all firms marketing
professional services in North America the report provides a powerful management tool for in-
depth analysis and strategic planning.

Hariprasad.P (2000) recommends a thorough financial reengineering to improve the


efficiency and effectiveness of the organization, while conducting a study of financial
performance of Kerala state handloom weavers co-operative society ltd, (Hantex).

G.Sudarsana Reddy (2003) conducted a study related to the financial performance of


some selected paper mills in Andhra Pradesh. The objectives of the study were to evaluate the
financing methods and practices of sample paper mills and analyze the investment pattern and
utilization of fixed assets. The also ascertain the working capital condition and also reviewed the
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performance of profitability. The study also suggests various measures to improve the
profitability. "The non-banking financial companies perform a significant role has financial
intermediaries and in promoting growth of the industry and services. The attention should be on
strategies that are required for tackling issues such sustainability and viability of the products
facing stiff completion from similar companies in the PVT sector, operational efficiency etc" ,
suggested Sreelekha (2005-2007).
Nandakumar conducted a study on Kerala Lakshmi Mill pressure in 1998-1999 this
study covers a period from 1987-1997. His main objectives were understood the company is
sufficiently liquid and is in a position to meet its current obligations. The co's profitability ratio
is an indirect indicator of its inefficient management. This indicates that the management is
operating business competently. One noted attraction of Kerala Lakhshmi Mills is the cash
credit system arranged with Punjab National Bank. But the company has no rural sources to
procure its working capital needs. Necessary permission should be given to the company to
accept public deposits which are a major source of working capital for many industrial units in
Kerala.
Sisupalan conducted a study on analysis of Trichur Cotton Mills Ltd Nattika in 1993.
His main objective was to understand the profitability position of the concern. His study covers
a period of 10 years from 1982 to 1992. He concluded that the business activities of the mail
have tremendously increased. Through the sales have increased considerably, the profitability
position remain satisfactory. Purchase cost of labour and cost of power consumers more than
80% sales revenue. Only the balance is left to cover the other operating expenses and return to
shareholders is very negligible. The most of the years the non-operating expense, alone
consumers more than this negligible portion of the sales and as result the shareholders suffer
ultimate loss. There is exception in certain years. No dividend is distributed to the equity
sh.areholders over 10 year's period. This is the general profitability position of the mail.

Shankar (1993) opined that a bank performance had to be evaluated on several factors
like tangible and intangible arrive at a realistic view of the efficiency of banks some of the yard
stick he suggested for establishing standard of performance were (1) deposit growth (2)
recovery (3) profitability (4) customer service (5) implementation of government scheme and
(6) house keeping and internal control.
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David Epshtein conducted study on financial performance and efficiency of corporate firms in
northwest Russia in December 2002 May 2003. The study reveals that the corporation farms in Leningrad
oblast are classified into five solvency groups by an index of financial health based on the coverage of
farm cost by sales revenue. The two highest solvency group containing 35% of the oblast farm produce
75% of sales and generate 90 % of profit. They rapidly grow by investing in machinery and equipment and
can be regarded as having fully adapted to the new market condition. Their production efficiency is
significantly

higher than the efficient of less solvent farm. A regression analysis show that 50% of the variability in the
financial health of Leningrad farms is explained by management quality, while another 30% is explained
by farm size (farms employing more labour and more land are characterized by higher solvency).

Kumari Misha Mohan conducted "a study on overall study about Divya products manufacture
and distributors of Keerthi detergents Kandassanakadavu" in 2003-2004. Here study covers three years
from 2002-2004. She has observed that the net profit margin has not increased as fat as gross margin. It is
because the increase in operating expenses, which is more than proportionate sales and advertising
expenditure that behaved abnormally. But it is absolutely excellent condition.

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3. RESEARCH METHODOLOGY

For every comprehensive research a proper research methodology is indispensable it has


to be properly conceived. The methodology is followed. The research design refers to
preplanning of what a researcher dose in his study. The design adopted in the study comes under
exploratory and evaluator research .since the data collected from the financial statements of the
company is analyzed under various financial and tactical tools.

SOURCES OF DATA

The data require for the study have been collected from the secondary sources

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, taxation officer etc.

SECONDARY DATA

The secondary data are those data that are already collected and published. The financial
statements published & other publications relevant to the analysis are used as a basis for the
secondary data. Data necessary for the study are acquired by collecting second hand information
i.e. secondary data. In this present context the secondary data necessary for the analysis are
acquired through 5 consecutive years.

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ANALYTICAL TOOLS

 Ratio analysis
 Comparative balance sheet
 Trend Analysis

RATIO ANALYSIS

 Current Ratio
 Debtors Turnover Ratio
 Fixed Asset turnover Ratio
 Current Asset to Sales Ratio
 Proprietary Ratio
 Debtors to Assets Ratio
 Net Profit Margin Ratio
 Total assets turnover Ratio

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RATIO ANALYSIS

The primary uses of financial statement are evaluating past performance and predicting
future performance and both of these are facilitated by comparison. Therefore the focus of
financial analysis is always on the crucial information contained in the financial statements. This
depends on the objectives and performance of such analysis. The purpose of evaluating such
financial statement is different from person to person depending on its relationship. In other
words, even though the business unit itself and shareholders, debentures holders, investors, etc.
all undertake the financial analysis, the purpose, means and extent of such analysis differs. For
example, trade creditors may be interested primarily in the liquidity of the firm because the
ability of the business unit to the business unit to pay their claims are best judged by means of
through analysis of its liquidity.

The shareholder and the potential investors may be interested in the present and the
further earnings per share, the stability of such earnings and comparison of these earnings with
other units in the industry. Similarly the debenture holders and the financial institution lending
long term loans term may be concerned with the cash flow ability of the business unit to pay
pack the debt in the long run. The management of the business unit, in contrast, looks to the
financial statement from various angles. These statement are required not only for the
management own evaluation and decision making but also for internal control and overall
performance of the firm. Thus the scope, extent and means of any financial analysis are a part of
the larger information processing system which from the very basic of any “decision making”
process.

The financial analysts always need certain yardstick to evaluate the efficiency and
performance of any business unit. The one of the most frequently used yardstick is ratio analysis.
Ratio analysis involves the use of various methods for calculating and interpreting financial
ratios of assess the performance and status of the business unit. It is a tool of financial analysis,
which studies the numerical or quantitative relationship between two variables and item. A ratio
can be worked out by dividing one of the variables of the relationship with other variable and
such ratio value is compared with standards/ norms. In other words, ratio is relative figures
reflection the relationship between variables and enable the analysis to draw conclusion
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regarding the financial operations.

This is the measure of inter relationship between different sections of the financial statement
which then is compared with the budgeted or forecasted results, prior year results and or the
industrial results. To be most important ratios must include a study of underlying data. Ratios
should be taken as guides that are useful in evaluating a company’s financial position and
operations and making comparison with results in previous year of with other companies. The
primary purpose of ratios is to point out areas needing further investigations. A part from the
ratios other information which should be looked at includes.

MEANING

Ratio simply means one number expressed in terms of another. A ratio is statistical
yardstick by means of which relationship between two or various figures can be compared or
measured. Ratios are relationship expressed in mathematical terms between figures, which are
connected with each other in some manner. An accounting ratio shows the relationship in
mathematical terms between two interrelated accounting figures.

TYPES OF RATIO
Several ratios calculated from the accounting data, can be grouped into various classes
according to financial activity or function to be evaluated, as stared earlier, the parties interested
in financial analysis are short-term and long-term creditors. Owners and management interest is
in liquidity position or the short-term solvency of the firm. Long-term creditors, on the other
hand, more interested in the long- term solvency and profitability of the firm.

Similarly owners concentrate on the firm profitability and financial condition.


Management is interested in evaluating every aspect of the firm’s performance. In view of the
requirements of the various users of ratios, classifying into following four important categories.

 Current Ratio
 Debtors Turnover Ratio
 Fixed Asset turnover Ratio
 Current Asset to Sales Ratio
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 Proprietary Ratio
 Debtors to Assets Ratio
 Net Profit Margin Ratio
 Total assets turnover Ratio

COMPARATIVE BALANCE SHEET

The single balance sheet shows assets and liabilities as on a particular data. The
comparative balance sheet shows the value of assets and liabilities on two different data if helps
in comparison a comparative balance sheet has two columns to record the record the figures of
the current year and the previous year. A third column is used to show the increase or decrease in
figures. A fourth column may be added for giving percentage of increase or decrease.

Thus while in the balance sheet the emphasis is on status in the comparative balance
sheet it is on change comparative balance sheet indicates whether the business is moving in a
favorable or unfavorable direction. It is very useful for studying the trends in an enterprise.

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ANALYSIS AND INTERPRETATION OF FINANCIAL PERFORMANCE

Analysis and interpretation of financial statement is the most important step in


accounting. To have very clear understanding of profitability and financial position of the
company. The financial statements have to be analyzed and interpreted. Analysis refers to the
methodological classification of the data given in the financial statement.

The term interpretation means explaining the meanings and significance of the data so
arranged. It is the study of the relationship between various functional factors. The relationship
between profit and capital employed, current asset and current liabilities and gross profit have to
be explained further to make interpretation more meaningful comparisons have to be made.
Comparison of relationship between various financial factors of the same company over a period
of time can be made.

TIPS TO IMPROVE YOUR FINANCIAL HEALTH.


Author: Bill Hudley

Spend less money, or save more money or do both. If the annual income does nothing
more than remain constant, your financial condition will improve.
The above statement may sound come across as flippant, but it’s a fact of life, regardless.
Needless to say we all have different personalities and different responses to needs and desires in
life.
A very important yardstick, in my view, is the growth rate of personal assets. If you sit
down to all of the savings accounts, investment accounts and properly values and the total value
is greater than the same time of the previous year, it stands to improve that the financial health
intact and possibly improved.

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STEPS TO IMPROVE FINANCIAL PERFORMANCE
Author: Terry Peltes

Given the challenges facing physicians, successful practices must take proactive steps to
combat negative trends and improve their overall financial performance.
To improve practice operations, processes can be streamlined to reduce costs;
productivity improvements can be implemented by physicians and employees to increase
revenue; a reporting structure can be created that allows for better decision making by physicians
and employees; and a rewards system can be implemented to recognize hard-working
employees.
To determine how you can improve your medical practice's performance, consider the
following management procedures.

1) Internal Cost Reduction Strategies

Cost reduction strategies focus on reducing the internal costs generated by medical
services provided to the marketplace.

2) External Cost Reduction Strategies

These strategies include the cost of services purchased from outside consultants or
vendors.

3) Asset and Credit Management Strategies

These strategies ensure that you are getting the most value from the resources invested in
your practice.
4) Personnel Resources

When managed properly, personnel costs and productivity can have a substantial impact
on practice profitability.
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5) Management Reporting

The use of timely, relevant, properly formatted reports to manage your practice cannot be
overstated. This is a crucial link between setting financial and operational goals and managing
the practice to achieve them.

6) Revenue Enhancement

Physicians can improve their financial performance by improving their ability to


negotiate favorable managed care contracts and reducing practice expenses as a percentage of
revenue.

EXCELLENCE IN FINANCIAL MANAGEMENT


Author: Matt H. Evans

Ratio analysis can be used to determine the time required to pay accounts payable
invoices. If the average number of days is close to the average credit terms, this may indicate
aggressive working capital management; i.e. using spontaneous sources of financing. However,
if the number of days is well beyond the average credit terms, this could indicate difficulty in
making payments to creditors.

ANALYZE INVESTMENTS QUICKLY WITH RATIOS

Author: Jonas Elmerraji

The information you need to calculate ratios is easy to come by: Every single number or
figure you need can be found in a company's financial statements. Once you have the raw data,
you can plug in right into your financial analysis and put those numbers to work for you.

Everyone wants an edge in investing but one of the best tools out there frequently is
frequently misunderstood and avoided by new investors. When you understand what ratios tell
you, as well as where to find all the information you need to compute them, there's no reason
why you shouldn't be able to make the numbers work in your favor.
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LIQUIOD RATIOS
3.1 Current Ratio
One of the liquidity ratios is current ratio. Current ratio explains relationship between
firm’s current assets, and current liabilities.
Current assets means. Which can be converted into cash within a year. Current liabilities
mean those obligations maturing within a year. Ideal value of current ratio is 2:1. It means every
one rupee of current assess less then Rs.2, it shows inefficiency to manage current assets.

The following formula is used to find out the current ratio.


Current assets
Current ratio =
Current liabilities

Table No 3.1

Year Current Assets Current Liabilities Ratio (time)

100,387,386,153 98,035,745,653 1.023987582


2012-2013
127,834,403,428 124,900,316,031 1.023491433
2013-2014
157,098,953,596 153,551,645,192 1.023101728
2014-2015
184,914,497,064 180,140,481,638 1.026501625
2015-2016
208,326,567,464 203,013,427,246 1.026171373
2016-2017
Source: Secondary data

Interpretation:

The firm had highest Current ratio of 1.0265 during the year 2015-2016. It had 1.0239
as current ratio in the year 2012-2013. 1.0234 in the year 2013-2014 and 1.0261 during the
year 2016-2017. The firm had the least ratio of 1.0231 in the financial year 2014-2015.

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Figure No.3.1
CURRENT RATIO

250,000,000,000

200,000,000,000

150,000,000,000
Axis Title

100,000,000,000

50,000,000,000

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Current Assets 100,387,386,153 127,834,403,428 157,098,953,596 184,914,497,064 208,326,567,464
Current Liabilities 98,035,745,653 124,900,316,031 153,551,645,192 180,140,481,638 203,013,427,246
Ratio (time) 1.023987582 1.023491433 1.023101728 1.026501625 1.026171373

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RECEIVABLE RATIO

3.2 Debtors Turnover Ratio


Debtor’s turnover Ratio indicates the velocity of debt collection of firm. In simple words,
it indicates the number of times average debtors (receivables) are turned over during a year.
Total Sales
Debtors Turnover Ratio =
Debtors

Table No 3.2

Year Sales Debtors Ratio (time)

8,472,974,925 7,952,249,189 1.06548157


2012-2013

10,538,101,124 9,250,003,616 1.13925373


2013-2014

13,055,082,523 11,345,166,575 1.15071757


2014-2015

15,462,803,360 13,431,047,181 1.1512731


2015-2016

17,504,754,256 14,980,903,818 1.16847117


2016-2017

Source: Secondary data


Interpretation:

The firm had highest Debtors turnover ratio of 1.168 during the year 2016-2017. It
had 1.139 as Debtors turnover ratio in the year 2013-2014. 1.150 in the year 2014-2015 and
1.151 during the year 2015-2016. The firm had the least ratio of 1.065 in the financial
year 2012-2013.

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Figure No 3.2
DEBTORS TURNOVER RATIO

20,000,000,000

18,000,000,000

16,000,000,000

14,000,000,000

12,000,000,000
Axis Title

10,000,000,000

8,000,000,000

6,000,000,000

4,000,000,000

2,000,000,000

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Sales 8,472,974,925 10,538,101,12 13,055,082,52 15,462,803,36 17,504,754,25
Debtors 7,952,249,189 9,250,003,616 11,345,166,57 13,431,047,18 14,980,903,81
Ratio (time) 1.06548157 1.13925373 1.15071757 1.1512731 1.16847117

24
3.3 Fixed Asset turnover Ratio

This ratio indicates the extent to which the investment in fixed assets contributes towards
sales. It indicates whether the investment in fixed assets has been judicious or not.
Net Sales
Fixed Asset Turnover Ratio =
Fixed assets

Table No 3.3

Year Net Sales Fixed Asset Ratio (time)

2012-2013 8,472,974,925 240,379,117 35.24838193

2013-2014 10,538,101,124 310,085,953 33.9844518

2014-2015 13,055,082,523 285,603,364 45.71053485

2015-2016 15,462,803,360 249,558,343 61.9606749

2016-2017 17,504,754,256 248,034,376 70.57390406

Source: Secondary data

Interpretation:

The firm had highest Fixed assets turnover ratio of 70.57 during the year 2016-2017.
It had 35.24 as Fixed assets turnover ratio in the year 2012-2013. 45.71 in the year 2014-
2015 and 61.96 during the year 2015-2016. The firm had the least ratio of 33.98 in the
financial year 2013-2014.

25
Figure – 3.3
Fixed Asset Turnover Ratio

20,000,000,000

18,000,000,000

16,000,000,000

14,000,000,000

12,000,000,000
Axis Title

10,000,000,000

8,000,000,000

6,000,000,000

4,000,000,000

2,000,000,000

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Net Sales 8,472,974,925 10,538,101,12 13,055,082,52 15,462,803,36 17,504,754,25
Fixed Asset 240,379,117 310,085,953 285,603,364 249,558,343 248,034,376
Ratio (time) 35.24838193 33.9844518 45.71053485 61.9606749 70.57390406

26
3.4 Current Asset to Sales Ratio

Current Asset to sales Ratio is indicates


Sales
Current assets to sales Ratio =
Current Assets

Table No 3.8
Year Net Sales Current Assets Ratio (time)

2012-2013 8,472,974,925 100,387,386,153 0.084402785

2013-2014 10,538,101,124 127,834,403,428 0.082435564

2014-2015 13,055,082,523 157,098,989,596 0.083100996

2015-2016 15,462,803,360 184,914,497,064 0.083621369

2016-2017 17,504,754,256 208,326,567,464 0.084025549

Source: Secondary data

Interpretation:

The firm had highest Current Asset to sales Ratio of 0.0844 during the year 2012-2013. It
had 0.0831 as Current Asset to sales Ratio in the year 2014-2015. 0.0836 in the year 2015-
2016 and 0.0840 during the year 2016-2017. The firm had the least ratio of 0.0824 in the
financial year 2013-2014.

27
Figure – 3.4
Current Assets to Sales Ratio

14,000,000,000

12,000,000,000

10,000,000,000

8,000,000,000
Axis Title

6,000,000,000

4,000,000,000

2,000,000,000

0
2012-2013 2013-2014 2014-2015
Current Years Sales 8,472,974,925 10,538,101,124 13,055,082,523
Base Year Sales 8,472,974,925 8,472,974,925
Trend in Sales 100 124.3 154

28
3.5 Proprietary Ratio

The proprietary Ratio, which is also known as the equity ratio, shows the relationship
between shareholders, funds and total assets is financed by shareholders funds. It is an indicator
of solvency.

Shareholders funds
Proprietary Ratio =
Total Assets

Proprietary ratio shows the general soundness of the company. This ratio shows the long
term or future solvency of the business. The ratio of owner’s equity to total assets is a measure of
the financial strength (or) weakness of the enterprise. It is very important to creditors of the
company as it helps them to ascertain the shareholder’s funds in the total assets of the business.

The acceptable norms of this ratio are 1:3. A high ratio indicates safety to the creditors
and a low ratio shows greater risk to the creditors. The shareholders funds are equity share
capital, preference share capital, undistributed profits, reserves and surplus. Out of this amount,
accumulated losses should be deduced. The total assets on the other hand denote total resources
of the concern.

A ratio below 0.5 is alarming for the creditors since they have to lose heavily in the
event of company’s liquidation as it indicates more of creditor’s funds and less of shareholder’s
funds in the total assets of the company.

29
Table No 3.5

Year Shareholders’ funds Total Assets Ratio (time)

2012-2013 2,592,019,617 100,627,765,270 0.025758493

2013-2014 3,244,173,350 128,144,489,381 0.025316526

2014-2015 3,796,265,710 157,384,592,960 0.024120949

2015-2016 4,449,527,617 185,164,055,407 0.024030191

2016-2017 4,903,662,585 208,574,601,831 0.023510353

Source: Secondary data

Interpretation:

The firm had highest Proprietary Ratio of 0.0257 during the year 2012-2013. It had
0.00253 as Proprietary Ratio in the year 2013-2014. 0.0241 in the year 2014-2015 and
0.0240 during the year 2015-2016. The firm had the least ratio of 0.02351 in the financial
year 2016-2017.

30
Figure – 3.5
Proprietary Ratio

250,000,000,000

200,000,000,000

150,000,000,000
Axis Title

100,000,000,000

50,000,000,000

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Shareholders’ funds 2,592,019,617 3,244,173,350 3,796,265,710 4,449,527,617 4,903,662,585
Total Assets 100,627,765,2 128,144,489,3 157,384,592,9 185,164,055,4 208,574,601,8
Ratio (time) 0.025758493 0.025316526 0.024120949 0.024030191 0.023510353

31
3.6 Debtors to Assets Ratio

Total Debtors
Debtors Assets Ratio =
Total Assets

Table No 3.6

Year Debtors Total Assets Ratio (time)

2012-2013 7,952,249,189 100,627,765,270 0.079026392

2013-2014 9,250,003,616 128,144,489,381 0.07218417

2014-2015 11,345,166,575 157,384,592,960 0.072085624

2015-2016 13,431,047,181 185,164,055,407 0.072535931

2016-2017 14,980,903,818 208,574,601,831 0.071825158

Source: Secondary data

Interpretation:

The firm had highest Debtors Assets Ratio of 0.0790 during the year 2012-2013. It
had 0.0721 as Debtors Assets Ratio in the year 2013-2014. 0.0720 in the year 2014-2015 and
0.0725 during the year 2015-2016. The firm had the least ratio of 0.0718 in the financial
year 2016-2017.

32
Figure – 3.6

Debtors Assets Ratio

250,000,000,000

200,000,000,000

150,000,000,000
Axis Title

100,000,000,000

50,000,000,000

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Debtors 7,952,249,189 9,250,003,616 11,345,166,57 13,431,047,18 14,980,903,81
Total Assets 100,627,765,2 128,144,489,3 157,384,592,9 185,164,055,4 208,574,601,8
Ratio (time) 0.079026392 0.07218417 0.072085624 0.072535931 0.071825158

33
3.7 NET PROFIT MARGIN RATIO

Net Profit Ratio = (Net Profit after Tax / Net Sales) x 100

Net profit, also referred to as the bottom line, net income, or net earnings is a measure of the
profitability of a venture after accounting for all costs. In accounting, net profit is equal to
the gross profit minus overheads minus interest payable for a given time period

Year Net Profit After Tax Net Sales Ratio %

2012-2013 727,532,092 7,876,859,974 9.23632125

2013-2014 698,951,733 9,791,005,795 7.13871228

2014-2015 598,890,360 12,160,293,890 4.92496617

2015-2016 707,222,035 14,365,035,324 4.92321821

2016-2017 358,742,848 15,820,654,957 2.26756003

Source: Secondary data

Interpretation:

The firm had highest Net Profit Ratio of 9.23 during the year 2012-2013. It had
7.13 as Net Profit Ratio in the year 2013-2014. 4.924 in the year 2014-2015 and 4.923
during the year 2015-2016. The firm had the least ratio of 2.26 in the financial year
2016-2017.

34
Figure – 3.7

NET PROFIT MARGIN RATIO

18,000,000,000

16,000,000,000

14,000,000,000

12,000,000,000
Axis Title

10,000,000,000

8,000,000,000

6,000,000,000

4,000,000,000

2,000,000,000

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Net Profit After Tax 727,532,092 698,951,733 598,890,360 707,222,035 358,742,848
Net Sales 7,876,859,974 9,791,005,795 12,160,293,89 14,365,035,32 15,820,654,95
Ratio % 9.23632125 7.13871228 4.92496617 4.92321821 2.26756003

35
3.8 TOTAL ASSETS TURNOVER RATIO

Total Assets Turnover Ratio =( Net Sales / Total Assets)

Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value of fixed
assets (on the balance sheet). It indicates how well the business is using its fixed assets to
generate sales.

Year Net Sales Total Assets Ratio

2012-2013 7,876,859,974 100,627,765,270 0.0782772

2013-2014 9,791,005,795 128,144,489,381 0.07640598

2014-2015 12,160,293,890 157,384,592,960 0.07726483

2015-2016 14,365,035,324 185,164,055,407 0.07758004

2016-2017 15,820,654,957 208,574,601,831 0.0758513

Interpretation:

The firm had highest Total Assets Turnover Ratio of 0.078 during the year 2012-2013. It
had 0.076 as Total Assets Turnover Ratio in the year 2013-2014. 0.0772 in the year 2014-
2015 and 0.0775 during the year 2015-2016. The firm had the least ratio of 0.075 in the
financial year 2016-2017.

36
Figure – 3.8

TOTAL ASSETS TURNOVER RATIO

250,000,000,000

200,000,000,000

150,000,000,000
Axis Title

100,000,000,000

50,000,000,000

0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Net Sales 7,876,859,97 9,791,005,79 12,160,293,8 14,365,035,3 15,820,654,9
Total Assets 100,627,765, 128,144,489, 157,384,592, 185,164,055, 208,574,601,
Ratio 0.0782772 0.07640598 0.07726483 0.07758004 0.0758513

37
TREND ANALYSIS

1. Trend Ratio of Net Sales

Trend Percentage of Sales = Current Year / Base Year * 100

Table: 4.13

Years Current Years Sales Base Year Sales Trend in Sales

2012-2013 8,472,974,925 100


8,472,974,925

2013-2014 10,538,101,124 8,472,974,925 124.3

2014-2015 13,055,082,523 8,472,974,925 154.0

2015-2016 15,462,803,360 8,472,974,925 182.4

2016-2017 17,504,754,256 206.5


8,472,974,925

Interpretation

Trend analysis helps in easily knowing the direction of movement of the activity of
the business i.e. whether upward or downward. Here the trend analysis of sales in KSFE Ltd
from 2013-2017 show an increasing trend i.e. 100% to 206.5%.

38
Trend in Sales
250

200

150

Trend in Sales
100

50

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

39
2. Trend Analysis of Profit

Trend percentage of profit = Current Year Profit / Base Year Profit *100

Calculation of Trend Percentage of Profit

Year Current Year Profit Base Year Profit Trend in Profit

2012-2013 727,532,092 727,532,092 100

2013-2014 96.0
698,951,733 727,532,092
2014-2015 598,890,360 727,532,092 82.3

2015-2016 358,742,848 727,532,092 49.3

2016-2017 707,222,035 727,532,092 97.2

Interpretation

Trend analysis helps in easily knowing the direction of movement of the activity of
the business i.e. whether upward or downward. Here the trend analysis of profit in KSFE Ltd
from 2013-2017 show an decreasing trend i.e. 100% to 97.2%.

40
Trend in Profit
120

100

80

60
Trend in Profit

40

20

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

41
COMPARATIVE BALANCE SHEET OF 2013

As at 31-03- As at 31-03- INCREASE/ INCREASE/


PARTICULARS DECREASE %
2013 2012 DECREASE
I EQUITY AND
LIABILITIES
1.Share holders funds
1.share capital 200,000,000 200,000,000
2.Reserves and surplus 2,392,019,617 1,711,285,525 680,734,092 28.4%
2.Share application money
pending allotment
3.Non-currentliabilities - - 0
4.current liabilites 0
a.short term borrowings 36,997,461,462 31,356,021,004 5,641,440,458 15.2%
b.trade payables - - 0
c.other current liabilities 60,239,123,506 49,196,615,510 11,042,507,996 18.3%
d.short term provision 819,160,685 594,929,575 224,231,110 27.3%
TOTAL 100,627,765,270 83,058,851,614 17,568,913,656 17.4%
II ASSETS
1.Non current assets
a.fixed assets
(i)tangible assets 240,337,982 202,924,307 37,413,675 15.5%
(ii) Intangible aassets - - 0
(ii)capital work in process 41,135 19,417,305 -19,376,170 47.1%
TOTAL 240,379,117 222,341,612 18,037,505 7.5%
a. non-current investment - - 0
b.deferred tax assets (Net) - - 0
c.Long term loans and
- -
advances 0
d.other non-current assets - - 0
2.Current assets
a.current investments - - 0
b.inventories - - 0
c.trade recevables - - 0
d.cash and cash equivalents 17,939,715,470 14,574,422,848 3,365,292,622 18.7%
e.short term loans and 17.2%
81,752,607,321 67,634,771,404
advances 14,117,835,917
c.othercurrent assets 695,063,362 627,315,750 67,747,612 9.7%
TOTAL 100,627,765,270 83,058,851,614 17,568,913,656 17.4%

42
INTERPRETATION:

The percentage increase in current assets is lower and fixed assets is more and the
percentage increase in current liabilities is lower and long term liabilities is more n the year
2012 - 2013.

43
COMPARATIVE BALANCE SHEET OF 2014

As at 31-03- As at 31-03- INCREASE / INCREASE /


PARTICULARS DECREASE %
2014 2013 DECREASE
I EQUITY AND
LIABILITIES
1.Share holders funds
1.share capital 200,000,000 200,000,000 -
2.Reserves and surplus 3,044,173,350 2,392,019,617 21.4%
652,153,733
2.Share application money
pending allotment
3.Non-currentliabilities
4.current liabilites
a.short term borrowings 47,773,617,162 36,997,461,462 22.6%
10,776,155,700
b.other current liabilities 76,013,214,824 60,239,123,506 20.7%
15,774,091,318
c.short term provision 1,113,484,045 819,160,685 26.4%
294,323,360
TOTAL 128,144,489,381 100,627,765,270 21.4%
27,516,724,111
II ASSETS
1.Non current assets
a.fixed assets
(i)tangible assets 310,044,818 240,337,982 22.4%
69,706,836
(ii) Intangible assets - -
(ii)capital work in process 41,135 41,135 0
TOTAL 310,085,953 240,379,117 22.4%
69,706,836
2.Current assets
a.cash and cash equivalents 20,767,855,138 17,939,715,470 13.6%
2,828,139,668
b.short term loans and advances 105,663,930,310 81,752,607,321 22.6%
23,911,322,989
c.othercurrent assets 1,402,617,980 695,063,362 50.4%
707,554,618

TOTAL 128,144,489,381 100,627,765,270 21.4%


27,516,724,111

44
Interpretation

The percentage increase in current assets is higher and fixed assets is low and the
percentage increase in current liabilities is lower and long term liabilities is more in the year
2013- 2014.

45
COMPARATIVE BALANCE SHEET OF 2015
As at 31-03- As at 31-03- Increase / Increase /
PARTICULARS
2015 2014 decrease decrease %
I EQUITY AND
LIABILITIES
1.Share holders funds
1.share capital 200,000,000 200,000,000 -
2.Reserves and surplus 3,596,265,710 3,044,173,350 15.3%
552,092,360
2.Share application
moneypending allotment
3.Non-currentliabilities
a.Long term provision 36,682,058 34,418,295 6.1%
2,263,763
4.current liabilites
a.short term borrowings 31,532,221,052 47,773,617,162 -16,241,396,110 51.5%

b.other current liabilities 91,244,733,353 76,013,214,824 15,231,518,529 16.6%

c.short term provision 774,690,787 1,079,065,750 39.2%


-304,374,963
TOTAL 157,384,592,960 128,144,489,381 18.5%
29,240,103,579
II ASSETS
1.Non current assets
a.fixed assets
(i)tangible & intangible 8.5%
285,603,364 310,044,818
assets -24,441,454
(ii)capital work in process - 41,135 41,135
TOTAL 285,603,364 310,085,953 8.5%
-24,482,589
2.Current assets
d.cash and cash equivalents 25,444,695,913 20,767,855,138 18.3%
4,676,840,775
e.short term loans and 18.6%
129,809,620,659 105,663,930,310
advances 24,145,690,349
c.othercurrent assets 1,844,673,024 1,402,617,980 23.9%
442,055,044

TOTAL 157,384,592,960 128,144,489,381 18.5%


29,240,103,579

46
Interpretation

The percentage increase in current assets is higher and fixed assets is lower and
the percentage increase in current liabilities is lower and long term liabilities is more in the year
2014- 2015.

47
COMPARATIVE BALANCE SHEET OF 2016
As at 31-03- As at 31-03- Increase / Increase /
PARTICULARS 2016 2015 Decrease Decrease %
I EQUITY AND
LIABILITIES
1.Share holders funds
1.share capital 200,000,000 200,000,000 -
15.3%
2.Reserves and surplus 4,249,527,617 3,596,265,710 653,261,907
2.Non-currentliabilities
88.6%
a.Long term provision 574,046,152 523,145,487 50,900,665
3.current liabilites
18.2%
a.short term borrowings 75,185,650,720 61,532,221,052 13,653,429,668
12.8%
b.other current liabilities 104,591,828,842 91,244,733,353 13,347,095,489
20%
c.short term provision 360,002,076 288,227,358 71,774,718
15%
TOTAL 185,164,055,407 157,384,592,960 27,779,462,447
II ASSETS
1.Non current assets
a.fixed assets
14.3%
(i)tangible assets 246,474,850 281,889,393 -35,414,543
20.4%
(ii)capital work in process 3,083,493 3,713,971 -630,478
14.4%
TOTAL 249,558,343 285,603,364 -36,045,021
2.Current assets
16.6%
a.inventories 15,089,064 15,339,414 -250,350
18%
d.cash and cash equivalents 30,974,133,596 25,444,695,913 5,529,437,683
c.short term loans and 14.1%
advances 151,269,564,866 129,809,620,659 21,459,944,207
31.1%
d.othercurrent assets 2,655,709,538 1,829,333,610 826,375,928

15%
TOTAL 185,164,055,407 157,384,592,960 27,779,462,447

48
Interpretation

The percentage increase in current assets is higher and fixed assets is less and the
percentage increase in current liabilities is lower and long term liabilities is more in the year
2015-2016.

49
COMPARATIVE BALANCE SHEET OF 2017
As at 31-03- As at 31-03- Increase / Increase /
PARTICULARS 2017 2016 Decrease Decrease %
I EQUITY AND
LIABILITIES
1.Share holders funds
1.share capital 50,00,00,000 20,00,00,000 -
3.5%
2.Reserves and surplus 4,403,662,585 4,249,527,617 154,134,968
2.Non-currentliabilities
12.7%
a.Long term provision 657,512,000 574,046,152 83,465,848
3.current liabilites
15.7%
a.short term borrowings 89,247,836,803 75,185,650,720 14,062,186,083
7.7%
b.other current liabilities 113,378,202,894 104,591,828,842 8,786,374,052
7%
c.short term provision 387,387,549 360,002,076 27,385,473
11.2%
TOTAL 208,574,601,831 185,164,055,407 23,410,546,424
II ASSETS
1.Non current assets
a.fixed assets
11.5%
(i)tangible assets 243,655,217 246474850 -2819633
28.2%
(ii)Intangible assets 4,295,038 3,083,493 1211545
1%
(iii)capital work in process 84,112 - 84112
6%
TOTAL 248,034,376 249,558,343 -1523967
2.Current assets
22.1%
a.inventories 19,390,668 15,089,064 4301604
d.cash and cash 13.3%
equivalents 35,726,779,618 30,974,133,596 4752646022
c.short term loans and 10.2%
advances 168,585,499,139 151,269,564,866 17315934273
33.5%
d.othercurrent assets 3,994,898,039 2,655,709,538 1339188501

11.2%
TOTAL 208,574,601,831 185,164,055,407 23410546424
50
Interpretation

The percentage increase in current assets is higher and fixed assets is lower and
the percentage increase in current liabilities is lower and long term liabilities is more in the year
2016-2017.

51
FINDINGS

 By analysing the financial performance of the company during the year 2011-12, current
ratio shows the shortage of working capital. However which has increased in the year
2015-16 by 1.026.
 The firm had highest Debtors turnover ratio of 1.168 during the year 2015-16 and
the table showing the increasing trend in Debtors turnover ratio during 2011 – 2016.
 The Fixed Asset turnover ratio showing the increasing level during the year 2011 – 12 the
ratio is 35.2 and in the year 2015 – 16 is 70.5.

 The company shows a declined Current Asset to sales ratio during the year 2011-2016.

 Proprietary Ratio is declined during the year 2011 – 2016.


 The firm had highest Debtors Assets Ratio of 0.0790 during the year 2011-12 and
least ratio of 0.0718 in the financial year 2015-2016 it showing the decreasing trend
in the debtors to asset ratio

 The company shows a declined Net profit margin ratio during the year 2011-2016.

 The company had a least Total Assets Turnover Ratio in the year 2015-2016 it showing
the decreasing level in the ratio during 2011 -2016.

52
SUGGESTIONS

 The firm should take measures to follow an increasing trend in case of sales and
profits.

 Proper attention should be given for raising more share capital.

 The company should focus on reducing the expense to its maximum.

 There should be utilisation of reserves rather than simply increasing the amount
of reserves.

 The government can take measures for 10-25% privatisation which aims at
increasing performance .

53
CONCLUSION
The non banking financing companies perform a significant role as financial
intermediaries and in promoting growth of the industry and service. In future they are expected
to playa vital role so as to accelerate the pace of economic growth. It also called for new concept
of management, more professional decision making, modernization and improvement in the
working of the system. The attention should be on strategies that are required for tacking issues
such as sustainability and viability of the product facing stiff competition from similar
companies in the private sector, operational efficiency etc.

Public sector undertakings (PSU's) are not run with sole objective of making profits. They have
to concentrate more on the social and economic development of the people. But it dose not mean
that they are free from the primary obligation of maintaining proper financial and monitory
disciple. The performance of KSFE Ltd has also been analyzed from this main objective in view.
The result of this analysis showed that the KSFE Ltd, financially performing very well.

54
Annexure
BALANCE SHEET AS ON 31 MARCH 2013

PARTICULARS NOTE No. As at 31-03-2013 As at 31-03-2012


I EQUITY AND LIABILITIES
1.Share holders funds
1.share capital 2 200,000,000 200,000,000
2.Reserves and surplus 3 2,392,019,617 1,711,285,525
2.Share application moneypending
allotment
3.Non-currentliabilities - -
a.long term liabilities - -
b.deferred tax liabilities (Net) -
c.other longterm liabilities - -
d.long term provisions - -
4.current liabilites
a.short term borrowings 4 36,997,461,462 31,356,021,004
b.trade payables - -
c.other current liabilities 5 60,239,123,506 49,196,615,510
d.short term provision 6 819,160,685 594,929,575
TOTAL 100,627,765,270 83,058,851,614
II ASSETS
1.Non current assets
a.fixed assets
(i)tangible assets 7 240,337,982 202,924,307
(ii) Intangible aassets - -
(ii)capital work in process 41,135 19,417,305
TOTAL 240,379,117 222,341,612
b.non current investment - -
c.deferred tax assets (Net) - -
d.Long term loans and advances - -
e.other non-current assets - -
2.Current assets
a.current investments
b.inventories
c.trade recevables
d.cash and cash equivalents 8 17,939,715,470 14,574,422,848
e.short term loans and advances 9 81,752,607,321 67,634,771,404
c.othercurrent assets 10 695,063,362 627,315,750
55
TOTAL 100,627,765,270 83,058,851,614
BALANCE SHEET AS ON 31 MARCH 2014

PARTICULARS NOTE No. As at 31-03-2014 As at 31-03-2013


I EQUITY AND LIABILITIES
1.Share holders funds
1.share capital 2 200,000,000 200,000,000
2.Reserves and surplus 3 3,044,173,350 2,392,019,617
2.Share application moneypending
allotment
3.Non-currentliabilities
4.current liabilites
a.short term borrowings 4 47,773,617,162 36,997,461,462
b.other current liabilities 5 76,013,214,824 60,239,123,506
c.short term provision 6 1,113,484,045 819,160,685
TOTAL 128,144,489,381 100,627,765,270
II ASSETS
1.Non current assets
a.fixed assets
(i)tangible assets 7 310,044,818 240,337,982
(ii) Intangible aassets - -
(ii)capital work in process 41,135 41,135
TOTAL 310,085,953 240,379,117
2.Current assets
a.cash and cash equivalents 8 20,767,855,138 17,939,715,470
b.short term loans and advances 9 105,663,930,310 81,752,607,321
c.othercurrent assets 10 1,402,617,980 695,063,362

TOTAL 128,144,489,381 100,627,765,270

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BALANCE SHEET AS ON 31 MARCH 2015

PARTICULARS NOTE No. As at 31-03-2015 As at 31-03-2014


I EQUITY AND LIABILITIES
1.Share holders funds
1.share capital 2 200,000,000 200,000,000
2.Reserves and surplus 3 3,596,265,710 3,044,173,350
2.Share application moneypending
allotment
3.Non-currentliabilities
a.Long term provision 4 36,682,058 34,418,295
4.current liabilites
a.short term borrowings 5 31,532,221,052 47,773,617,162
b.other current liabilities 6 91,244,733,353 76,013,214,824
c.short term provision 7 774,690,787 1,079,065,750
TOTAL 157,384,592,960 128,144,489,381
II ASSETS
1.Non current assets
a.fixed assets
(i)tangible & intangible assets 8 285,603,364 310,044,818
(ii)capital work in process - 41,135
TOTAL 285,603,364 310,085,953
2.Current assets
d.cash and cash equivalents 9 25,444,695,913 20,767,855,138
e.short term loans and advances 10 129,809,620,659 105,663,930,310
c.othercurrent assets 11 1,844,673,024 1,402,617,980

TOTAL 157,384,592,960 128,144,489,381


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BALANCE SHEEET AS ON 31 MARCH 2016

PARTICULARS NOTE No. As at 31-03-2016 As at 31-03-2015


I EQUITY AND LIABILITIES
1.Share holders funds
1.share capital 2 20,00,00,000 200,000,000
2.Reserves and surplus 3 4,24,95,27,617 3,596,265,710
2.Non-currentliabilities
a.Long term provision 4 57,40,46,152 52,31,45,487
3.current liabilites
a.short term borrowings 5 75,18,56,50,720 61,53,22,21,052
b.other current liabilities 6 1,04,59,18,28,842 91,244,733,353
c.short term provision 7 36,00,02,076 28,82,27,358
TOTAL 1,85,16,40,55,407 157,384,592,960
II ASSETS
1.Non current assets
a.fixed assets
(i)tangible assets 8 24,64,74,850 28,18,89,393
(ii)Intangible assets 3,083,493 37,13,971
TOTAL 249,558,343 285,603,364
2.Current assets
a.inventories 9 1,50,89,064 1,53,39,414
d.cash and cash equivalents 10 30,97,41,33,596 25,444,695,913
c.short term loans and advances 11 1,51,26,95,64,866 129,809,620,659
d.othercurrent assets 12 2,65,57,09,538 1,82,93,33,610

TOTAL 1,85,16,40,55,407 157,384,592,960

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BALANCE SHEET AS ON 31 MARCH 2017

PARTICULARS NOTE No. As at 31-03-2017 As at 31-03-2016


I EQUITY AND LIABILITIES
1.Share holders funds
1.share capital 2 50,00,00,000 20,00,00,000
2.Reserves and surplus 3 4,40,36,62,585 4,24,95,27,617
2.Non-currentliabilities
a.Long term provision 4 65,75,12,000 57,40,46,152
3.current liabilites
a.short term borrowings 5 89,24,78,36,803 75,18,56,50,720
b.other current liabilities 6 1,13,37,82,02,894 1,04,59,18,28,842
c.short term provision 7 38,73,87,549 36,00,02,076
TOTAL 2,08,57,46,01,831 1,85,16,40,55,407

II ASSETS
1.Non current assets
a.fixed assets
(i)tangible assets 8 24,36,55,217 24,64,74,850
(ii)Intangible assets 42,95,038 3,083,493
(iii)capital work in process 84,112 -
TOTAL 248,034,376 249,558,343
2.Current assets
a.inventories 9 19,390,668 1,50,89,064
d.cash and cash equivalents 10 35,726,779,618 30,97,41,33,596
e.short term loans and advances 11 168,585,499,139 1,51,26,95,64,866
c.othercurrent assets 12 3,994,898,039 2,65,57,09,538

TOTAL 208,574,601,831 1,85,16,40,55,407

59