SUMMER TRAINING REPORT ON FINANCIAL ANALYSIS OF MAX NEW YORK LIFE INSURANCE DONE AT

SUBMITTED IN PARTIAL FULFILLMENT FOR THE DEGREE REQUIREMENTS OF MASTER’S IN BUSINESS ADMINISTRATION

SUBMITTED TO:SUBMITTED BY UNIVERSITY SANTOSH CLASS ROLL NO.:- 81 EXAM ROLL NO.:en)3 SEM(F). SUBMITTED TO
rd

MBA(G

UNIVERSITY SCHOOL OF MANAGEMENT KURUSHETRA UNIVERSITY KURUSHETRA SESSION 2008-2010

ACKNOWLEDGEMENT
An acknowledgement is something one owes to people he is indebted to. Therefore, it is of great honors to me to acknowledge these people who have given me support in every sphere of my training period. First of all I am really thankful to Mr. Rajesh Sud, CEO and Managing Director and Mr. Rajit mehta of MNYL insurance for their meticulous attention towards my proceedings and their whole hearted support to me, which made me finished my training. I really indebted to, Mr. Vikas kashap and Mr. Chahal sehgal support and caring attitude towrods me. for their

It was there sincere effort and

concerned guidance that made me finishes my training successfully. I owe thanks to Mr. Mayank bajaj for giving me valuable information about my course.

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SIGNATURE

DECLARATION
I SANTOSH , Roll no. 81 ,Class- MBA (General ,FINAL YEAR) 3rd semester , declares that the research project report on “Financial analysis of max new York life insurance” is an original piece of work done by me and as per my knowledge has not been submitted to any college, Institute/University in any mean possible.

SIG NATURE

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In order to achieve positive and concrete result. And I also believe that there is always scope for improvement and accordingly I shall look forward to receive suggestion. Theoretical knowledge without practical knowledge is of little value. This research aims to identify the key attributes of general insurance through the survey and on the basis of secondary data from various resources. It considers the various issue and concerns on financial of MNYL Insurance. it becomes necessary to undergo any project work. new study will also be beneficial. Theoretical studies in the classroom are not sufficient to understand the functioning of financial concept. I am grateful to all those who have helped me directly or indirectly in preparing in this project. Choice of present topic of research is an effort to contribute to something to the sphere of “Financial analysis of max new York life insurance”. Practical project supplements the theoretical studies .MBA is a stepping-stone to management carrier. 4 . the theoretical knowledge must be supplemented with the practical knowledge. Therefore. a few studies on the topic relating to this have also been conducted by the different research scholars. Although. but I think that.

This analysis would certainly help us in knowing the current financial status of the company as i have done . the.ABSTRACT This analytical report is about the financial situation of the MAX NEW YORK LIFE INSURANCE COMPANY. 5 . This is one of the top companies of the country with a massive share in the market of urea.

CONTENTS Chapter Number Topic Page Number 8 Chapter -1 Chapter -2 Chapter -3 Introduction History 14 Company profile 19 Chapter -4 Chapter -5 Scope of the study 34 Research methodology 38 Chapter -6 Financial analysis 43 Chapter -7 Findings & suggestion 64 6 .

Bibliography 72 LIST OF GRAPH GRAPH NO. 50 52 53 54 55 56 57 58 59 60 61 62 Net profit Inventory turnover ratio Debt to total funds ratio Fixed assets to 7 proprietor’s fund ratio Gross profit Operating ratio . 1 2 3 4 5 6 7 8 9 10 11 12 GRAPH NAME Current ratio Liquid ratio Debt-equity ratio Proprietor’s ratio Debtor turnover ratio Average period collection GRAPH page no.

CHAPTER 1 INTRODUCTION OF INSURANCE 8 .

The amount of the premium is determined by the operation of the law of averages as calculated by actuaries. By investing premium payments in a wide range of revenue9 . the underwriter must consider physical. the determination of which risks the insurer can take on. and rate making. The essence of the contract of insurance. divided among many. device for indemnifying or guaranteeing an individual against loss. jeopardizing the well-being of the insured. is mutuality. does not fall heavily upon the actual loser. wherein there is excessive coverage of high risk candidates in proportion to the coverage of low risk candidates.Insurance or assurance. Payment for an individual loss. Physical hazards include those dangers which surround the individual or property. In preventing adverse selection. psychological. and moral hazards in relation to applicants. The major operations of an insurance company are underwriting. called a policy. Reimbursement is made from a fund to which many individuals exposed to the same risk have contributed certain specified amounts. The underwriter is responsible for guarding against adverse selection. called premiums. the decisions regarding necessary prices for such risks.

insurance allows someone who suffers a loss or accident to be compensated for the effects of their misfortune. In simple terms. 10 . insurance companies have become major suppliers of capital. home and financial situation. It lets you protect yourself against everyday risks to your health.producing projects. and they rank among the nation's largest institutional investors.

the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events.Definition of Insurance Insurance is a contract whereby. 1938 The Insurance Act. 11 . General definition: In the words of John Magee. in return for the payment of premium by the insured.S. 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business. the payment being made from the accumulated contributions of all parties participating in the scheme. Hansel. With the help of insurance. risks that attach to individuals. due to accidental events.” The Insurance Act. “Insurance is a plan by which large number of people associate themselves and transfer to the shoulders of all. large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few. “Insurance may be defined as a social device providing financial compensation for the effects of misfortune.” Fundamental definition: In the words of D. are made good.

New India Assurance. 1972 The General Insurance Business (Nationalization) Act.9. acquisition of the management of the companies. All the companies were amalgamated into National Insurance. Nationalization was accomplished by the govt. it was only in 19 January 1956. 1972 was enacted to nationalize the 100 odd general insurance companies and subsequently merging them into four companies. 1956 Even though the first legislation was enacted in 1938. United India Insurance which were headquartered in each of the four metropolitan cities. 1956 effective from 1. Oriental Insurance. inter-alias. through a Government ordinance. There were 245 insurance companies of both Indian and foreign origin in 1956. 12 .Life Insurance Corporation Act. as a result and has grown to be the largest insurance company in India as of 2006. form LIFE INSURANCE CORPORATION after nationalization of the 245 companies into one entity. the Life Insurance Corporation Act. that life insurance in India was completely nationalized.1956 was enacted in the same year to. General Insurance Business (Nationalization) Act. 1956. The Life Insurance Corporation of India was created on 1st September.

13 . thereby de-regulating the insurance sector and allowing private companies into the insurance. With more and more private players in the sector this scenario may change at a rapid pace. of India then introduced the Insurance Regulatory and Development Authority Act in 1999. Currently. Further. in India only 2 million people (0. whereas in developed nations like USA about 75 % of the total population are covered under some insurance scheme. Companies with equal strength competing in the Indian insurance market. there were not any private insurance companies in Indian insurance sector. foreign investment was also allowed and capped at 26% holding in the Indian insurance companies. are covered under Mediclaim. In recent years many private players entered in the Insurance sector of India. 1999 Till 1999. The Govt.2 % of total population of 1 billion).Insurance Regulatory and Development Authority (IRDA) Act.

CHAPTER 2 HISTORY 14 .

with a capital contribution of Rs. Some of the important milestones in the life insurance business in India are: 1912 . 5 crore from the Government of India.The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.245 Indian and foreign insurers and provident societies taken over by the central government and nationalized.Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1938 . 1928 . viz. 1956 . 15 . Tracing the developments in the Indian insurance sector reveals the 360degree turn witnessed over a period of almost 190 years. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. LIC Act.OF INDIAN INSURANCE INDUSTRY The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. 1956. LIC formed by an Act of Parliament.

the New India Assurance Company Ltd. and the United India Insurance Company Ltd.. the Oriental Insurance Company Ltd.. 16 . a wing of the Insurance Association of India.The General Insurance Business (Nationalization) Act. Some of the important milestones in the general insurance business in India are: 1907 . the first company to transact all classes of general insurance business. 1968 . set up. 1957 . frames a code of conduct for ensuring fair conduct and sound business practices. GIC incorporated as a company. 1972 .The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. on the other hand.The General insurance business in India. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd.The Indian Mercantile Insurance Ltd. the first general insurance company established in the year 1850 in Calcutta by the British. can trace its roots to the Triton Insurance Company Ltd.. 1972 nationalized the general insurance business in India with effect from 1st January 1973.General Insurance Council.

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Ltd. Ltd.  Max New York life insurance company  Om Kotak Mahindra Life Insurance Co. Ltd.  ICICI Prudential Life Insurance Company Ltd.  DLF Pramerica Life Insurance Co Ltd (DPLI).  Birla Sun Life Insurance Company Ltd. Ltd. Ltd. 18 .  Tata AIG Life Insurance Company Limited  Sahara India Life Insurance Company Ltd  SBI Life Insurance  Shriram Life Insurance  Future General India Life Insurance Co.  Canara HSBC Oriental Bank of Commerce Life Insurance Co.  MetLife India Insurance company private limited  ING Vysya Life Insurance Company limited  Bharti AXA Life Insurance co.  Star Union Dai-ichi Life Insurance Co.Major Players in The life Insurance Industry In India  Life Insurance Corporation of India (LIC)  HDFC Standard Life Insurance Company Ltd.  IDBI Fortis Life Insurance Co.  Reliance Insurance Company  Aviva Life Insurance India  Bajaj Allianz Life Insurance Co Ltd. Ltd.

CHAPTER 3 COMPANY PROFILE 19 . AEGON Religare Life Insurance Company Limited.

139 offices dedicated to locations rural business (2010) Area served India Analjit Singh Executive Chairman.Max New York Life Insurance Type Private Industry Financial Services Founded 2000 Founder(s) Analjit Singh Headquarters New Delhi. 69.maxnewyorklife. India Number of 674 offices (2010).666 (2010) (2010). Rajesh Key people Sud Chief executive officer and Managing director Individual Insurance (25 products and 8 riders/options) and Group Insurance (6 Products products and 7 riders/option s) 11.com 20 .778 Agent Advisors Employees Website http://www.

HEADQUATER OF MNYL INSURANCE COMPANY l 21 .

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Max New York Life Insurance Company Ltd. is a joint venture between Max India Limited, one of India's leading multi-business corporations and New York Life International, the international arm of New York Life, a Fortune 100 company. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. Incorporated in 2000, Max New York Life (MNYL) started commercial operation in 2001. In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. The Company's paid up capital as on 30th April, 2009 is Rs 1782 crore. MYNL shares a market share of 5.9% in the life insurance sector. MNYL has multi-channel distribution spread across the country. Agency distribution is the primary channel complemented by partnership distribution, banc assurance, alliance marketing and dedicated distribution for emerging markets. The Company places a lot of emphasis on its selection process for agent advisors, which comprises four stages screening, psychometric test, career seminar and final interview. The agent advisors are trained in-house to ensure optimal control on quality of training. The company currently has around 92,760 agent advisors at 710 offices across 385 cities. The company also has 36 referral tie-ups with

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banks, 24 partnership distribution and alliance marketing relationships each.

Max New York Life has put in place a unique hub and spoke model of distribution to deepen our rural penetration. The company has 133 offices dedicated to rural areas. MNYL offers a suite of flexible products. It now has 43 life insurance products and 8 riders that can be customized to over 800 combinations enabling customers to choose the policy that best fits their need. The company currently has more than 13,923 employees.

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Max New York Life Insurance is a joint venture between…..

New York Life, USA (26%) Max India Ltd. (74%)


A multi-business corporation Focused on service oriented businesses: - Life Insurance - Healthcare

Specialist in the Life Insurance business since 1845 Asset under management – US $13 billion

• Has surplus & reserves over US $265 billion • Insured million of lives (including 10 US Presidents) globally

Other Businesses : - Clinical Research - Specialty Plastics

• Has always delivered on its promises in-spite of world wars, famine and drought
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a Fortune 100 company. decided to select JOINT VENTURE as a medium to enter into the market of India. It has chosen MAX INDIA LTD. Through its wide network of highly competent wide network of highly competent agent advisors and flexible product solutions. INC.. 26 .. one of the India’s leading multi-business corporations.HOW NEW YORK LIFE ENTERED THE INDIAN MARKET:- New York Life International.. MYNL is creating a partnership for life with its customers in INDIA to meet their life stage needs.

Every individual who represents the company is for us our brand champion. It is all about trust.  Honesty: Honesty is the heart of the life insurance business.VISION  To become one of the most admired life insurance company of India. The service process is responsive. humane and empathetic.  Caring: MNYL is redefining the life insurance paradigm by focusing on customers first. MNYL believes that for knowledge to be of value it must be focused. personalized. current. tested and shared. Transparency.  Strong Corporate Governance Model MISSION • • • • • Become one of the top quartile life insurance companies in India Be a national player Be the brand of first choice Be the employer of choice Become principal of choice for agents VALUES  Knowledge: Knowledge leads to expertise. Perfectly combining global expertise with local knowledge. integrity and dependability form the cornerstones of the 27 . we are India's life insurance specialist. and our expertise is in helping people protect themselves.

Focused on the value of continuous improvement in people. 28 . the company strives for the highest standards of quality in every aspect of its business.  Excellence: Excellence at MNYL implies the ability to perform at a consistently high level. The company ensures that everyone who represents the brand carries a promise: we care — in word as well as deed.MNYL experience. processes and the organization.

 MNYL was among the top 25 companies to work with in India. MNYL was ranked at the 20th position. "Great Workplaces In India".  Been among top five most respected private life insurance companies in India according to a 2004 and 2006 Business World survey.  MNYL Insurance has emerged as one of the best employer in the recently announced Business Today-Mercer-TNS Survey of 'The Best Companies to Work For in India'. according to 2003 Business World magazine. The company was ranked 7th in the survey and the best life insurance company to work for in India.ACHEIVEMENTS  MNYL Insurance Award’ felicitated with the ‘Golden Peacock Innovation for the year 2008 for Excellence in innovation in conceptualizing and marketing Max Vijay. 29 . This survey is the local version of the "Great Places To Work" survey carried out every year in 22 countries.  MNYL is the first life insurance company in India to be awarded the IS0 9001:2000 certification.

Awards  BT Mercer – Ranked No7 in the “Best companies to Work For”  Awarded the Gallup Great Work Place Award 2009  CII – Exim Bank Commendation Certificate for Business Excellence – 2008  Recognized as a Superbrand  Recipient of 2008 CIO 100 Award for technology implementation  Golden Peacock Award for Innovation – 2008  Among the top 25 companies to work for in India. according to Business world 2003 ‘Great Workplaces of India’  Among the top five most respected insurance companies in India as per Business world 2004 & 2006 survey  Won Indo-American Corporate Excellence Award for Best Indo-US company in Financial Services Category in 2006  Received ‘Best Six Sigma Project’ award at Sakal Six Sigma Excellence Awards – 2006  Among top 3 in Asia Life Insurance Company of the Year Award 2007 instituted by Asia Insurance Review 30 .

Prashant Tripathy Director . Rajesh Sud CEO & Managing Director Mr. Sunil Kakar Sr. V.MANAGEMENT TEAM Mr. Anisha Motwani Director and Chief Marketing Officer 31 .Viswanand Director & Head . Rajit Mehta Executive Director & Chief Operating Officer Mr.Strategic Planning. Business Development and Health & Retirement Mr. Director and Chief Financial Officer Mr.Products and Persistency Management Ms. John Poole Appointed Actuary Mr.

32 . Your parenting is perfect but is your planning adequate? Are you thinking beyond the immediate to the future.VARIOUS PRODUCTS OF MNYL INSURANCE Life is full of surprises. Do your best today to ensure that your family can always enjoy a comfortable lifestyle. We have plans that guarantee maximum protection at a low cost. in India and abroad? Many children are keen to pursue unconventional careers. about higher education and professional courses. Our plans will help build the corpus that allows your children to dream big and soar high. In double income families. you need to make sure that your family is never lacking in anything even if you are taken away from them forever. You must be prepared at all times. both spouses should get adequate life covers especially if there are dependent children involved. Are you in tune with their aspirations and passions? As parents you would never let money come in the way of your children and the fulfillment of their true potential. Unexpected events that strike without warning can disrupt the smooth rhythm of life. As the primary earning member.

full of freedom and choice. long-term goals. create your own wish list and make it come true. Your dreams are in your hands. it is up to you to create a superior tomorrow. Our Retirement Plans will keep you comfortable and content. A time to pursue your hobbies. Every move that you make today will bring you a step closer to your goals. Even as you work hard to make a better today. travel and enjoy the good life. Our Investment Plans offer the dual benefit of protection and market-linked returns with the flexibility to choose the premium and determine the market exposure. Let your golden years be the most precious of your life. Luxury car. If you want to sustain your current lifestyle even after you stop working. Investments should be aligned to specific. You will never miss your salary cheque or be constrained by rising inflation. 33 . make that money work for you. foreign holiday or dream house. and let you live the life you deserve.Building a nest egg is about aggregating surplus amounts regularly to allow them to grow into a sizeable sum.

Use our Health Plans to make sure your family stays fit and fine. But needs keep evolving and you must always be one step ahead. anytime and may even force an individual to dip into savings to meet these sudden and steep costs. health is wealth. They want to be happy and comfortable at all times.Do you know the cost of healthcare has climbed faster than inflation? Medical costs can be a big drain on finances. Strategic Products Plans Most people desire a carefree life. The health of every member of the family is precious and you need to safeguard it as a priority. Our Strategic Products Plans will meet your special needs and are available through additional distribution channels. 34 . Such an eventuality could delay or destroy a cherished financial goal. You can choose a plan to meet the planned events and unforeseen incidents in your life. No wonder. A medical crisis can strike anyone.

CHAPTER 4 SCOPE 35 .

SIGNIFICANCE OF THE STUDY 1. People are only beginning to wake up to its vast possibilities. The study then goes on to evaluate and analyze the findings so as to present a clear picture of trends in the Insurance sector.SIGNIFICANCE TO THE INDUSTRY: The significance for the industry lies in studying these trends that emerge from the study. the company. the insurance industry and also provide marketing ways. 36 . It is a rapidly changing and evolving sector. methods of Max New York Life insurance. A study like this can attempt to guide the future of the industry based on current trends. The study deals with MNYL in focus and the various segments that it caters to. A large number of new players have entered the market and want to gain market share in this rapidly improving market.SCOPE OF THIS STUDY A big boom has been witnessed in Insurance Industry in recent times.SIGNIFICANE FOR THE RESEARCHER:To facilitate and provide all the useful information of the study. 2.

The investors who are interest in involving in the company’s shares will also get benefit by going through the study &can easily take a decision whether to invest or not to invest in the company’s shares. The study is also beneficial to employees & officers motivation by showing how actively they are contributing for company’s growth. The study has great significance & provides benefits to various parties whom directly or indirectly interact with the company. 2. 37 . 3.NEED FOR THE STUDY:- 1. It is beneficial to management of the company by providing crystal clear picture regarding important aspects like liquidity. leverage. activity & profitability. 4.

profitability and efficiency positions of the company during the study period. 2. To evaluate and analyze various facts of the financial performance of the company. OBJECTIVES 1. To analyze the capital structure of the company with the help of Leverage ratio. To offer appropriate suggestions for the better performance of the organization. Liquidity Ratios. 4. 38 . To make comparisons between the ratios during different periods. 3. To understand the liquidity. To determine the Profitability. To study the present financial system .OBJECTIVES The major objectives of the resent study are to know about financial strengths and weakness of MNYL INSURANCE through Financial analysis. The main objectives of resent study aimed as: To evaluate the performance of the company by using ratios as a yardstick to measure the efficiency of the company.

CHAPTER 5 RESEARCH METHODOLOGY 39 .

It is used to describe the market phenomena while trying to determine the association among variables. Some of these are: Descriptive and Analytical Qualitative and Quantitative Conceptual and Empirical Applied and Fundamental One time research 40 . All of these are distributed on the nature of research.RESEARCH DESIGN Research design tells us about which tools & techniques are used to find the results in a better way. Types of research On the basis of theoretical study a research has many types.

41 .My research is based on analytical research Analytical research:In Analytical research. the researcher has to use facts or information already available and analyze these to make a critical evaluation of the material.

That information was utilized for calculating performance evaluation and based on that. 3. Most of the calculations are made on the financial statements of the company provided statements.to assess the performance of he company method of observation of the work in finance department in followed. Method. 2.SOURCES OF DATA COLLECTION The information is collected through secondary sources during the project. 42 . Sources of Secondary data 1. Referring standard texts and referred books collected some of the information regarding theoretical aspects. interpretations were made.

3. One of the factors of the study was lack of availability of ample information.LIMITATION 1. The whole study was conducted in a period of 60 days. INSURANCE. personnel. Every study will be bound with 2. The below mentioned are the constraints under which the study is carried out. marketing and other aspects of MNYL certain limitations. 43 . which is not sufficient to carry out proper interpretation and analysis. Time is an important limitation. The study provides an insight into the financial. Most of the information has been kept confidential and as such as not assed as art of policy of company.

CHAPTER 6 DATA ANALYSIS & INTERPRETATIO N 44 .

coupled with the imperfections of their own accounting standards. This makes the financial analysis has become particularly important. and its recognition of an economic activity there will be a time lag. but the auditors can not absolutely guarantee the authenticity of the financial statements and the appropriateness of their work only to users of the report to make the right decisions to provide a reasonable basis. there will be many reports are not the right place. While the audit can improve the situation to some extent. as well as managers the freedom to choose accounting methods to make financial Inevitably.Financial analysis is an attempt to understand a business operating results and Financial position of the true face. from the obscure accounting data accounting procedures will be excavated behind the economic implications for investors and creditors to provide a basis for decisions. we can not completely avoid that inappropriate sexual. As the accounting system reflects only the selective economic activity. 45 . so even if audited and received unqualified audit report of the financial statements.

2. Trend Analysis: in order to reveal the financial condition and operating results changes and their causes.In general. 4. Factors: Several factors to analyze the financial indicators of a degree of influence. The data used for trend analysis can be either absolute. it can be ratio or percentage of data. often by means of comparative analysis and trend analysis. Comparative analysis: financial information to illustrate the relationship between the amount and number of different direction for further analysis. 3. can the current period compared to the previous period. and the same can also be compared with others in the industry. Ratio Analysis: It is through the analysis of financial ratios to understand the financial position and operating results. This comparison can be compared to the actual and planned. 46 . the financial analysis methods include the following four: 1. generally by means of different analysis methods. nature and help predict the future.

Its helps the bankers. investors. creditors. 2. solvency point of view. Simplification of accounting data Accounting ratio summarizes a long array of accounting data and makes them understandable. shareholders etc. Fixation of ideal standards Financial analysis help us in establishing ideal standards of the different items of the business. 3. one firm and another in the same 47 . 4. 5. Helpful in comparative study With the help of financial analysis comparison of profitability and financial soundness can be made between industry.Advantages of financial analysis 1. profitability point of view etc. Helpful in analysis of financial statements Financial analysis is an extremely useful device for analyzing the financial statements. Study of financial soundness Financial analysis discloses the position of business with different viewpoints. It discloses the position of business with the liquidity point of view .

Therefore. 4.False accounting data gives false ratios.limitation 1. they will be only as correct as the accounting data on which they are based . 3. 48 .dressing Some companies in order to cover up their bad financial position resort to window dressing.lack of proper standards Circumstances differ from firm to firm hence no single standards ratio can be fixed for all the firms against which the actual ratio may be compared. He should study several connected ratios before reaching a conclusion. Limited use of a single ratio The analyst should not merely rely on a single ratio. Accounting ratios are calculated on the basis of data given in profit &loss a/c and balance sheet.Window . 2.

FORMULAS FOR FINANCIAL ANALYSIS (A) Liquidity Ratios Current Ratio = Current Assets Current Liabilities Quick Ratio = Liquid Assets Current Liabilities (B) Leverage Ratios Debt Equity Ratio = Debt Equity Debt to Total Funds Ratio = Debt Equity + Debt Proprietary Ratio = Equity Total Assets Fixed Assets to Proprietor’s Fund Ratio = Fixed Assets Proprietor’s Fund 49 .

(C) Activity Ratio Inventory Turnover Ratio = Cost of Goods Sold Average Stock Debtors Turnover Ratio = Credit Sale Average Debtors + Average B/R Average Collection Period = Debtors + B/R Credit Sales Per Day (D) Profitability Ratios Gross Profit Ratio = Gross Profit Net Sales Net Profit Ratio = Net Profit Net Sales Operating Ratio = Cost of sales + Operating Expenses Net Sales 50 .

7 100000 2. 1 51 .8 100000 3.5 3 2.5 1 0.CALCULATION OF CURRENT RATIO YEAR 2005 2006 2007 2008 2009 CURRENT ASSETS 240000 280000 320000 380000 430000 CURRENT RATIO CURRENT CURRENT RATIO LIABITILIES 89000 2.2 130000 2.1.5 0 2005 2006 2007 2008 2009 CURRENT RATIO GRAPH NO.9 170000 2.5 2 1.5 CURRENT RATIO 3.

15 2. When compared with 2009.33 3.83 3. which is above the benchmark level of 2:1 which shows the comfortable position of the firm.CALCULATION OF LIQUID RATIO LIQUID RATIO INVENTORY CURRENT LIABILITIES 23000 89000 37000 100000 37000 100000 30000 130000 34000 170000 YEAR 2005 2006 2007 2008 2009 CUURENT ASSETS 280000 320000 370000 440000 430000 LIQUID RATIOS 2.32 52 . • • The huge increase in sundry debtors resulted an increase in the ratio.INTERPRETATION • As a rule. there is an increase in the provision for tax. 2.88 2. The current liabilities majorly included MNYL Insurance of company for consultancy additional services. the current ratio with 2:1 (or) more is considered as satisfactory position of the firm. because the debtors are raised and for that the provision is created.

2 INTERPRETATION • • An ideal Quick ratio is said to be 1:1. there should at least be one rupee of liquid assets. 53 .LIQUID RATIO 3. it is considered to be better.5 2 1. it gives a better picture of the short – term financial position of the firm. If it is more. Quick ratio thus is a more rigorous test of liquidity than the current ratio.5 3 2. The idea is that for every rupee of current liabilities.5 0 2005 2006 2007 2008 2009 LIQUID RATIO GRAPH NO. • • This ratio is a better test of short term financial position of the company than the current ratio.5 1 0. And when used together with current ratio.

3. 54 .0053=0.001 DEBT-EQUITY RATIO 0.001 0.EQUITY RATIO YEAR 2005 2006 2007 2008 2009 DEBT 2118 1490 1069 696 369 NET WORTH 400024 463142 535934 614099 699435 DEBT-EQUITY RATIO 0.0005=0.0032=0.003 0.004 0.005 0. 3 INTERPRETATION • Debt-equity ratio of 2:1 is considered safe.0019=0.001 0 2005 2006 2007 2008 2009 DEBTEQUITY RATIO GRAPH NO.003 0.CALCULATION OF DEBT-EQUITY RATIO DEBT.002 0.001 0.0011=0.005 0.

5 6.6 7.CALCULATION OF Proprietary Ratio Proprietary Ratio Year 2005 2006 2007 2008 2009 Proprietor’s fund 10000 18000 15000 16000 17000 Total assets 250000 500000 200000 230000 250000 Proprietary ratio(in%) 4 3. 4.8 PROPRIETARY RATIO 8 7 6 5 4 3 2 1 0 2005 2006 2007 2008 2009 PROPRIETARY RATIO GRAPH NO. 4 INTERPRETATION- 55 . it shows a rather risky financial position from the long term points of view.• If the debt-equity ratio is more than that.9 6.

• Because it means that a large proportion of total assets is provided by equity.• A Higher proprietary ratio is generally treated an indicator of sound financial position from long – term point of view. 5 56 . 5.CALCULATION OF DETOR TURNOVER RATIO DEBTOR TURNOVRE RATIO SALES DEBTORS 10000 9000 12000 125000 100000 5000 6000 3000 25000 10000 YEAR 2005 2006 2007 2008 2009 DEBTORS TUNROVRE RATIO 2 3 4 5 10 DETOR TURNOVER RATIO 10 9 8 7 6 5 4 3 2 1 0 2005 2006 2007 2008 2009 DEBTOR TURNOV ER RATIO GRAPH NO.

6. The higher the ratio . 6 INTERPRETATION57 .5 10000 1.better it is.INTERPRETATION• • This ratio indicates the speed with which the amount is collected from debtors.CALCULATION OF AVERAGE COLLECTION PERIOD AVERAGE COLLECTION PERIOD DEBTORS 12 months/debtors /sales 5000 6 6000 4 3000 3 25000 2.2 YEAR 2005 2006 2007 2008 2009 SALES 10000 9000 12000 125000 100000 AVERAGE COLLECTION PERIOD 6 5 4 3 2 1 0 2005 2006 2007 2008 2009 AVERAGE COLLECTION RATIO GRAPH NO.

65 27.93 27.80 29.77 NET PROFIT RATIO 30 29 28 27 26 25 2005 2006 2007 2008 2009 NET PROFIT RATIO GRAPH NO.• • This ratio indicates the time within which the amount is collection from debtors and bills receivable. 7. an indication of the inefficiency and negligence on the part of management.CALCULATION OF NET PROFIT RATIO Year 2005 2006 2007 2008 2009 Net profit ratio Sales 32509 46709 48200 56903 60137 Profit after tax 86644 129830 144308 156429 167016 Net profit ratio (in %) 26. A higher debt collection period is thus.49 27. 7 INTERPRETATION58 .

8 59 . 8.• • This ratio measures of profit available on sales. the better it is.CALCULATION OF INVENTORY TURNOVER RATIO Inventory turnover ratio Cost of goods Sold 20009 56009 28200 36903 80000 Year 2005 2006 2007 2008 2009 Average stock 10000 30000 10008 29000 8000 Net profit ratio (in times) 2 2 3 1 10 INVENTORY TURNOVER RATIO 10 8 6 4 2 0 INVENTORY TURN ONER RATIO 2005 2006 2007 2008 2009 GRAPH NO. The higher the net profit ratio.

9 60 . In a business where stock turnover ratio is high. storage cost etc. the better it is. • A low stock turnover ration indicates that stock does not sell quickly and it creates many other costs like carrying cost. 9. goods can be sold at a low margin of profit and even then the profitability may be quite high.CALCULATION OF DEBT TO TOTAL FUNDS RATIO Year 2005 2006 2007 2008 2009 Debt to total funds ratio Debt Equity + debt 10000 10669 22007 369030 89999 100000 300000 100080 390000 254750 Debt to total funds ratio (in %) 10 36.INTERPRETATION- • • The higher the ratio. since it indicates that stock is selling quickly.62 36.62 DEBT TO TOTAL FUNDS RATIO 100 80 60 40 20 0 DEBT TO TOTAL FUNDS RATIO 2005 2006 2007 2008 2009 GRAPH NO.9 94.9 21.

INTERPRETATION- • • Generally.33 350000 400000 87. 10.8 Year 2005 2006 2007 2008 2009 FIXED ASSETS TO PROPRIETOR’S FUND RATIO 61 . debt to total funds ratio of 67 % is considered satisfactory.CALCULATION OF Fixed Assets to Proprietor’s Fund Ratio Fixed assets to proprietor’s fund ratio Fixed assets Proprietor’s Fixed assets to fund proprietor’s fund ratio(in %) 480000 600000 80 220000 300000 73.5 120000 200000 60 880000 900000 97. Because it means that the firms depends too much upon outside loans for its existence.

10 If the ratio is less than 100% . If more than 100%.100 80 60 40 20 0 2005 2006 2007 2008 2009 FIXED ASSETS TO PROPRIETOR’ S RATIO INTERPRETATION• • GRAPH NO.8 GROSS PROFIT RATIO 62 .CACULATION OF Gross profit ratio Gross profit Gross profit 200000 64000 420000 30000 88000 Year 2005 2006 2007 2008 2009 Net sales 500000 800000 600000 200000 900000 Gross profit ratio(in %) 40 8 70 15 9. it would mean that proprietor’s funds are more than fixed assts. 11. it would means that owner’s funds are not sufficient to finance the fixed assets.

70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009 GROSS PAOFIT RATIO GRAPH NO. 11 INTERPRETATION• • This ratio measures the margin of profit available on sales The higher the gross profit ratio. the better it is. 12.32 53.44 46 40 OPERATING RATIO 63 .CALCULATION OF OPERATING RATIO Year 2005 2006 2007 2008 2009 Operating ratio Cost of sales + operating expenses 420000 25000 35000 40000 100000 Net sales 500000 95000 65500 87000 250000 Operating ratio (%) 84 26.

• Lower the Operating ratio.90 80 70 60 50 40 30 20 10 0 OPERATING RATIO 2005 2006 2007 2008 2009 GRAPH NO. the better it is. 12 INTERPRETATION• Operating ratio is a measurement of the efficiency and profitability of the business enterprise. 64 .

CHAPTER 7 FINDINGS & 65 .

5 during 2005 of which indicates a continuous increase in both current assets and current liabilities. The quick ratio is also in a fluctuating trend through out the period 20052009 2. 66 . 2. 2.88. 2.33.83. The current ratio has shown in a fluctuating trend as 2.equity ratio during the 2005-2009 is not good.9 & 2. 3.2. 3. 3.SUGGESTIONS FACT/FINDINGS 1.15. 2.32 resulting as.7. The debt. 3.83. The company’s present liquidity position is satisfactory. 2.

10. itself states the excellent credit management policy of the company. it would means that owner’s funds are not sufficient to finance the fixed assets. debt to total funds ratio of 67 % is considered satisfactory. The company is doing exceptionally well during last five years to recover their debtors.Average Collection period of ONGC Ltd. The higher the ratio. 8. If the ratio is less than 100%. 7. The proprietary ratio is increased compared with the last year. which is very good. 67 . Because it means that the firms depends too much upon outside loans for its existence. shows that the credit management department of the MNYL insurance co. The net profit is increased greater in the current year. Generally. is very efficient in recovering their debts. the better it is. The higher the gross profit ratio. since it indicates that stock is selling quickly. If more than 100%. As Debtors turnover ratio indicates the number of times debtors’ turnover each year. So. The debtors’ turnover ratio of the company shows that the recovery of credit is very frequent. 5. The proprietary ratio has shown a fluctuating trend. it would mean that proprietor’s funds are more than fixed assts. 11. 9. 6. the better it is. the debtors’ turnover ratio of last five years of MNYL insurance co.4. the long term solvency of the firm is increased. This ratio measures the margin of profit available on sales.

gaining appreciation for their strong work ethics.46.44. Though with its excellence performance and every efforts has been made to present the most authentic and truly representative findings. excellent performance.. with its strengths and good quality. world class Life Insurance Co.12.32. professionalism and team work which led them to progress in today’s challenging environment. the company is having some 68 . So. Max New York is one of the most powerful.53.40 (%) from 2005-2009 respectively. but some uncontrollable factors do affect the performance and thus bring about some deviations and hurdles in progress. The operating profit ratio is in fluctuating manner as 84.26.

 Higher premiums as compared to the other companies.  Strong Financial Base.  Excellent services.  Business Experience. Weaknesses  Lot of competitors are in the market offer same product by the title difference in the premium and offerings. organization culture and climate.  Innovative products.  Brand Image. Its SWOT analysis is as below: Strengths  Max New York is the largest private player in the insurance industry in India. 69 . Out of estimated 320 million insurable markets only 20% of the population is insured.  Target only higher income group whereas other companies are trying to catch middle-lower level people. Technology.weaknesses.  Customization of Products as per customer’s needs. Opportunities  Huge market is literally untapped. Clients face problems to get insured due to large number of formalities.  High targets for financial advisors and for the sales department. and threats and opportunities.

 In the pension field where people want good life after their retirement. So there exists high potential for insurance company like Max New York. In a conservative society of India where people are more inclined towards risk free investments such as Bank FD’s and savings rather than equity and high risk investments insurance offers the best of both worlds – The security with high returns.  Indian people are more emotional towards their child that’s why children plans are selling like hot cakes. Threats  Weak perception of private players in the minds of Indian people due to frequent financial scams  Large number of insurance players  Existing wrong business practices of companies like – LIC First premium is paid by their agents where – as IRDA suggests that even forms to be filled by the clients themselves  Players like Allianz Bajaj and Birla sun life with low premium for the similar plans 70 .

 Current Government policies do not encourage Gross Domestic Savings. Particularly the current year’s position is well due to raise in the profit level from the last year 71 . CONCLUSION The company’s overall position is at a good position. Its huge surplus in Life Fund gives a capability to lodge Price war.  For the Insurance sector Government set the authority that is IRDA (Insurance Regulatory and Development Authority) which is undertaken to track record of all the companies and change rules day by day more rigid which is very difficult for the companies. the customer will have little money to invest.  LIC has woken up from sleep and is following competitive strategies. Entry of many other private companies with equally strong experience and financial strength of foreign partners making the competition difficult and saturating the urban markets. If the Tax Liability of the service class rises.

it is at recovering stage. it can be said that Company shall review the strategies 72 .09 shows progress in company’s condition.position. It is better for the organization to diversify the funds to different sectors in the present market scenario. SUGGESTION Analyses of above conditions direct to form serious planning to recover but as year 2008. In nutshell.

followed in the years 2008 & 2009. 73 . This time company is growing.

BIBLOGRAPH Y 74 .

moneyoutlook.com  www.com 75 .maxnewyorklife. WEBSITES REFFERED:  www.Pandey  Shashi K Gupta 2.1.M.cifainsurance.Goyal  I.com  www.K.BOOKS/MAGAZINES REFFERED:  Money Outlook  D.

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