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REPORT ON

Analysis of Balance Sheet of 2007 and 2008

By Saurabh Jain

R.K. MARBLE PRIVATE LIMITED
KISHANGARH, DIST. AJMER

A

REPORT ON

Analysis of Balance Sheet of 2007 and 2008
By

Saurabh Jain

A Report submitted in partial fulfillment of The requirements of MBA Program of Government Engineering College, Ajmer

R.K. MARBLE PRIVATE LIMITED
KISHANGARH, DIST. AJMER Government Engineering College, Ajmer
(An Autonomous Institution of Government of Rajasthan)

Preface;-

Engineering College Aimer was established in the year 1997 under the aegis of Govt. of Rajasthan whose faculty members have had consummate experience in the fields of education, Industry, Engineering and Technology over the years. The College is affiliated to the RAJASTHAN TEHNICAL UNIVERSITY, KOTA and is approved by the All India Council of Technical Education, New Delhi. The College is located at Makhupura, 5 Kilometers from Ajmer on the National Highway no 14, providing the right industrial ambience for the budding engineers. No Stone is left unturned to maintain exalted standards in imparting academic and practical skills to the students, so that they become well-rounded engineers with professional expertise and personal integrity when they complete their courses. Engineering College Ajmer has been established with the noble intention of imparting quality technical and management education to the aspiring youth of today, also extending its support to the students of financially challenged background. The Institution will provide opportunity to its students to develop into disciplined and knowledgeable citizens of tomorrow.

ACKNOWLEDGMENTS

I acknowledge with thanks the valuable advice and immense guidance rendered to me by my company guide, Mr. Subhash C. Agarwal, Vice President (Fin. & Tax.) of R.K. Marble Private Limited. In spite of his busy schedule, he spared and spent time to help me execute this project. An authority in finance matters and company affairs, his wholehearted help would always remain an unfading light in my thoughts and actions. Mr. Devendra Sharma, Company Secretary of R.K. Marble Private Limited, provided me various information and data in compiling this project, to whom I express my grateful thanks. My grateful thanks are also due to the staff members of R.K. Marble Pvt. Ltd. sincere, cordial and unstinted guidance and support throughout the course of this project. “Analysis of Balance Sheet of 2007 and 2008 ”.

Saurabh
MBA Part – 2 Government Ajmer Engineering

Jain
College,

TABLE OF CONTENTS
1. ABSTRACT

2. INTRODUCTION OF THE ORGANISATION 3. FINANCIAL PERFORMANCE 4. INTRODUCTION OF PROJECT 5.FINANCIAL STATEMENTS 6BALANCE SHEET OF 2007 AND 2008 7.FACTS AND FINDINGS 8.REFERENCES 9.APPENDICES

1. ABSTRACT:
The SIP Project is being conducted at R.K. Marble Private Limited. The project concentrates on the last two years financial statement analysis of the organization.

The project is all about analysis of the company’s last two years financial statements. The project demands for a thorough study of various tools and techniques involved in analysis of financial statements, understanding of the various financial statements. The project also includes interpretation of the financial results to derive meaningful information from the statements. The project involves some secondary activities such as being a part of the Internal Audit team to understand the working process of the audit team. The other activity included a short assignment on BIFR (Board of Industrial and Financial Reconstruction). As per the schedule mentioned in the project proposal the report will contain following stages:

Stage 1: Collection of the company’s last two years financial statements. Stage 2: Understanding the Financial statements. Stage 3: Understanding the various tools and techniques used in analysis of financial statements. Stage 4: Analysis of Balance Sheet

2. Introduction of the Company

R. K. Marble Group was established in 1989 by Patni group to help serve increasing national and international demand for Indian marble. Since then we have enjoyed exponential growth and export to many markets worldwide. The Company dedicated to bringing the finest marble to the world. For over twenty years, the name is synonymous with grandeur, finesse and quality that can only be expected from the most superior class of marble. An ISO 9001:2000 certified company, R.K. Marble has set benchmarks in the mining, processing and finishing of marble. An annual production of over 1.5 Million Tones (equivalent to more than 60,000 sq. meters per day) has earned the company a place in the Guinness Book of World Records as the largest producer of marble in the world, the group is now geared up to scale newer heights and achieve the impossible. "The seagull who sees farther, flies higher" living up to the immortal words of Johan than Swift, Mr. Ashok Patni established the first processing unit at Rajasthan (with an installed capacity of one lakh cu. ft. marble slabs Per Annum) and never looked back. The company now has 14 Gang saw machines. In November 1993 was the time, when state government took a step forward to allot a virgin marble mine on lease to R. K. Marble at Morwad, Distt. Rajsamand in Rajasthan. By the touch of sheer hard work, guts, burning inner desire to reach unprecedented heights and fulfilling their dreams "the trio" converted these marble mines to gold mines. Morwad from which the stone takes its name is a remote village in the eastern part of Rajasthan, India.

Today the name Morwad Marble from R. K. Marble group has become almost generic for a whole range of white and semi-white types of marble, which are extracted from these locations.

The popularity of this range of marble continues to grow at an astonishing rate and it is marketed in large quantities. The white background with light gray veins corresponds with nearly everyone's perception of the most beautiful marble and architects for many of the India's important buildings suggest it.

Zoom into the corner stone of Majoli, In Madhya Pradesh , India to scale the magnetic fascination of an ISO 9001 : 2000 adorned Guinness Record Holder, engaged as the largest producer of marble in the world. Bedecked with most sought after gadgets, the exotic Majoli mine is the most coveted breeding ground of world's choicest Wonder Marble that's wondrous and splendid in myriad hues.

Wonder Marble's colour panorama and innate design makes it the right choice for flamboyant users. Our fascinating range can be floored to encompass living rooms, drawing arrangements, dining spaces, hotel lobby's, pool sites, wall claddings, special lounges and many more. Among its endless usages left for creative imagination, some could be - artifacts and decorative objects

Products
Dealing in Products like Marble, Flooring Patterns, Marble Stone , Marble Stone Figure, White marble, Marble Flooring, Marble Tiles.

Wonder Marble
The WONDER MARBLE produced at the R.K. Majoli mines comes to you in heart warming shades of deep and dark red, brown to rose patches in creamy base coupled with abrasion resistant fine grained form, lustre and reflective gloss which makes it truly a masterpiece for a lifetime.

Wonder Marble is available in 4 exotic colours: · · · · Milky Opal: Creamy base: Shades of beige & mauve Pink Pearl: Ecstatic pink & brown tones Garnet Rush: Reddish Jasper Jazz: Chocolate, red & brown

White Marble
Famous from antiquity, for the high quality the incomparable clearness and resistance, the Morwad Marble from R. K. Marble Private Limited have constituted the base of many big monuments and works of art in India. R.K. Milky Coral is a captivating splendor with generous splashes of green and grey on milky white marble, giving it an exotic look.

Marble Patterns & Fixing

R K Marble Private Limited offers decorative flooring patterns, stone inlaid borders and marble inlaid items. The most popular choice with architects and interior designers for flooring and wall cladding.

Mines
World famous Morwad Mines of R.K.Marble Private Limited are situated 15km from Rajnagar on Udaipur – Rajnagar - Ajmer National Highway No.8. connected by well-maintained by metalled road from Rajnagar.The nearest Airport at Dabok which is 68 Kms. from mines and 19 Kms from udaipur. Nearest Railway station at Kankroli, is 20 Kms. from mines.Electrical power line of 11KV from State Viduyat Nigam is extended up to mines. Captive Power generation to the tune of 2500 KVA is stand by.

Four Captive Diesel Dispensing pumps with 120 KL storage capacity and Explosive magazine with 500 kg storage capacity are maintained at mines. An over head tank of 1.5 lac liters capacity along with a filter plant is maintained for meeting the requirement of drinking water and domestic use. The quality of water is potable.

Requirement of water for industrial use is met with the help of water tanks filled from tube wells from the nearby areas. The Safety Management is given utmost importance pit Safety Committee meetings are organized regularly for tacking stock of safety preparation, accident analysis, and suggestions for remedial measures for achieving ZERO accident status. The personal protective equipment and safety gadgets are provided to employees and all out efforts are made to inculcate the habit of their regular use.

Facilities of Modern store and well equipped workshops for repair and maintenance of HEMM and other field machinery are available at mines. Technology, the core aspect at R. K. Marble Private Limited can be seen at mining campus where all means of communication are available which hooks this remote site to the rest of the world and make them feel a part of larger community of R. K. Group.Eight telephone connections, with a fax connection and two hot line between Mines to Udaipur and Kishnagarh office are available at mines site. Base mobile and walki-talki sets are well maintained for smooth communications amongst the staff/workers/officers.

A four-bed hospital with para medical staff and Doctor along with an ambulance is available at mines. A well-equipped Group Vocational Training Center is established at site to provide initial training to new entrants and refresher and special training to existing employees OEMS and other service agencies, training programmes were conducted periodically.

Factory
Our factory is located about 26 KM from the holy city of Ajmer and about 107 KM from Jaipur, the state capital of Rajasthan, along the famous Makarana road. We

have exclusively used our own marble in combination with other stone to give a fascinating look at our factory site. Our managing director Mr. Suresh Patni looks after the factory and is known for his motto, "Customer Satisfaction". The RK Marble Processing Centre houses 14 Gangsaw machines. Two Resin treatment plants, an edge-cutting unit and 18 head-polishing unit from Breton. It has the most modern layout with completely automatic plant to recycle water for marble cutting. Latest gadgets like wireless, hotlines, modems, computerised MIS and costing systems are being used in order to accelerate quality control and production, hence contributing to cost effectivity.

Quality Assurance
R. K. Marble Group has always stood for quality without compromise. It believes in long-term business relations and works hand to hand with the customers to ensure that it gets the best value of money. Stringent in-house quality control measures are in place and yet it is always willing for third party quality checks. The Company has adopted quality policy to standardize its systems, procedures

and processes with adequate documentation. R. K. Marble Private Limited is an ISO 9001 : 2000 certification for its various activities at mines and factory and ISO 14001 certification for Environment Management System.

People
Highly motivated team of professionals is dedicated to work. The team created the records of completing large projects before given time frame. Needless to say, the growth of R. K. Marble Group has been spurred by the spirit of the individuals who work at various levels to keep ahead of the rest and constantly rise to the challenges that beckon them at the frontiers of technology.

Strengths
The endeavor of the company is to provide quality products by imbibing the latest international mining technology. This can be gauged from the fact that the entire mine operations are carried out with the help of latest equipment for marble extraction. Sophisticated software developed internally on RDBMS platform tracks and evaluates all possible functions, cost areas and productivity of the mining operations. It is also the first marble mining company, which has very high level of mechanization with highly skilled and trained workmen.

The company has made an extensive use of wireless communication to synergies all activities from drilling to loading of the end product. The optimum utilization of the country's natural resources can be seen here. Due to the latest technologies used, the recovery ratio of marble blocks is amongst the highest. The records of "The Director of Mines & Geology, Udaipur", reveal that the yield from company's mines is the highest per hectare amongst all marble mines.

Awards:

AWARD NAME Guinness World Records Appeared in Guinness World Record Books ISO 9001 : 2000 ISO 14001 Entry in Limca Books of World Records Model Marble Quarry award - Best Mechanised Quarry- First Prize

AWARDED BY Guinness World Records

YEAR 1998,

2000, 2001 Guinness World Records 2003 BVQI, USA 2003 BVQI, USA 2003 Limca Books of World Records 1998, 1999 Federation of Indian Mineral Industry (FIMI) & All India Granite 2003

& Stone Association (AIGSA) Centre for Development of Stones The Best Stall for Stone & Stone Products (Outdoor) 2003 (CDOS) Udyog Patra Award Institute of trade and Industrial Development, New Delhi 2001

State Level Bhamashah Award

Education Deptt., Bikaner

2001

Highest Income tax payer Award (Individually to Syt. Ashok Patni, Syt. Suresh Patni, Syt.Vimal Income Tax Deptt., Ajmer Patni) 2000

Best Annual Report Award for Rajasthan Based Institute of Chartered Accountants Companies of India, Jaipur

2001

Indira Priyadarshini Award

National Publication, New Delhi

2001

Samman Patra

Income Tax Deptt., Udaipur

1998

Padm Divakar

Shree Digamber Jain Atishaya Kshetra, Padampura, Jaipur

1999

Social Welfare & Development

Lions Club, Udaipur

2001

Jain Gaurav

All India Digamber Jain Samaj, Sikar

1998

Corporate Governance Award

Rajasthan Chamber of Commerce & Industry

2004

3. FINANCIAL PERFORMANCE IN THE YEAR 2007-08
PARTICULARS Net Sales Exports PBT PBT/Net Sales(%) PAT March 2007 171689838 5 0 345849010 20.15 223702429 Table 1. Sales and Profits March 2008 1908959105 0 604901946 31.68 389872858

Net Sales of the Company during the year 2007-08 were Rs. 1908959105 crores compared to Rs. 1716898385 crores in 2006-07 due to higher volumes as well as realization. This is mainly due to favorable market conditions in view of emphasis on infrastructure and housing resulting into good demand of marble. As may be observed, there is a continuous increase in profitability (PBDT) which has been analyzed and explained in the table below:

Particulars

2007 (Rs. In crores)

2008

Profit after Tax Add: provision for tax Wealth Tax Fringe Benefit Tax Deferred tax Less: Income Tax Profit before tax Add: Depreciation PBDT

223702429

389872858

306000 3500000 17159419 135500000 345849010 163834840 509683850

350000 3500000 43220912 255000000 604901946 116704749 721606695

In the year 2007-08, PAT has increased from Rs. 223702429 crores to Rs. 389872858 crores Profit for the year is higher by the same amount. Therefore we see PBDT has increased in 2007-08 as compared to 2006-07 by 41.57%.

INTRODUCTION OF THE PROJECT:
Objective and Scope of the Study
Main aim of the project is to study and analysis the complete process of Ratio Analysis. The objective of the present study is limited to mere understanding of the procedure of Balance Sheet and does not extend to evaluate the efficiency of the process followed at R.K. Marble Private Limited or in any way commenting on them.

SCOPE :
At R.K. Marble Private Limited the entire exercise of Ratio Analysis either for getting any new sanction or reviewing the existing borrowing limits is carried out during the start of the financial year. With this project I was able to get a first hand experience of all the documentation and fulfillment of other formalities laid under the bank norms for getting the funds sanctioned. In my study of the process of anlaysing the balance sheet of Private Limited, the following things have been covered: Complete Analysis of the two year(2007 and 2008) performance and critical review of the fixed assets ,current assets , debtors, creditors and other important factors that are covered in the balance sheets. R.K. Marble

o

Analysis of balance sheet and requirements for year 2007 and 2008 and analysis of increase or decrease in their magnitude .

o Preparing CMA and other supporting documents, o Application to Consortium of Banks, o Clearance of any objections raised by the member Banks, and o Creation of Security.

Financial statements :There are four basic financial statements:

1.
point in time.

Balance Sheet - also referred to as statement of financial

condition, reports on a company’s assets, liabilities and net equity as of a given

2.

Income Statement - also referred to as Profit or loss statement,

reports on a company’s results of operations over a period of time.

3. 4.

Cash Flow Statement - reports on a company’s cash flow

activities, particularly its operating, investing and financing activities. Statement of Retained Earnings - explains the changes in a

company’s retained earnings over the reporting period. Because these statements are often complex, an extensive set of Notes to the Financial Statements and management discussion and analysis is usually included. The notes will typically describe each item on the Balance sheet, Income Statement and Cash Flow Statement in further details. Notes to Financial Statements are considered an integral part of the Financial Statements.

Users of Financial Statements:

Financial statements are used by a diverse group of parties, both inside and outside a business. Generally, these users are:

1.

Internal Users: are owners, managers, employees and other parties who

are directly connected with a company. Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis are then performed on these statements to provide management with a more detailed understanding of the figures.These statements are also used as part of management’s report to its stockholders, as it form part of its Annual Report.

2.

External Users: are potential investors, banks, government agencies

and other parties who are outside the business but need financial information about the business for a diverse number of reasons. • Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analysis are often used by investors and is prepared by professionals (Financial Analysts), thus providing them with the basis in making investment decisions. • Financial institutions (banks and other lending companies) use them to decide whether to grant a company with fresh working capital or extend debt securities to finance expansion and other significant expenditures. • Government entities (Tax Authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company. • Media and the general public are also interested in financial statements for a variety of reasons.

Limitations of Financial Statement:

• asset. •

Certain assets and liabilities are not discussed in the balance sheet such

as management people, their quality and high degree of skill, the most tangible Balance sheet pertains to a point of time relating to past, and thus may

not be very helpful for the investors concerned about the present and future analysis. • bias. • Financial Statements do not record and reveal any fact, which cannot be expressed in terms of money. General health conditions of the chairman, Provision for depreciation, stock valuation and amounts to be set aside for bad debts are based on personal judgments and, therefore, are not free from

working conditions, sales policy, quality of the product, etc., cannot be included in financial statements. • Financial Statements are based on accounting policies, which vary from enterprise to enterprise both within a single country and among countries. Thus the users of financial statements cannot make reliable judgments unless the accounting policies are not disclosed. • Balance sheet does not disclose information relating to change in management, loss of markets, and cessation of agreements, which have a vital bearing on the earning of the company.

Understanding the Various tools and techniques used in analysis of Financial Statements:
A financial statement analysis consists of the application of analytical tools and techniques to the data in financial statements in order to derive from them measurements and relationships that are significant and useful for decision making. The process of financial statement analysis can be described in various ways, depending on the objectives to be obtained. Financial

analysis can be used as preliminary screening tool in the selection of stocks in the secondary market. It can be used as a forecasting tool of future financial conditions and results. It may be used as a process of evaluation and diagnosis of managerial, operating, or other problem areas. Above all, financial analysis reduces reliance on intuition, guesses and thus narrows the areas of uncertainty that is present in all decision-making processes. Financial analysis does not lessen the need for judgment but rather establishes a sound and systematic basis for its rational judgment. In analysis of company’s financial position , we can do the interpretation of the assets, loans , advancea and capital as shown by the balance sheet of the two years under comparison .

Balance Sheet:
A balance sheet is often described as a “snapshot” of the company’s financial condition on a given date. It does not show the flows into and out of the accounts during the period. A balance sheet provides detailed information about a company’s assets, liabilities and shareholders’ equity. Assets are things that a company owns and can either be sold or used by the company to make products or provide services. Assets include physical

property, such as plants, trucks, equipment and inventory; things that can’t be touched, such as trademarks and patents. And cash itself is an asset. So are investments a company makes. Liabilities are amounts of money that a company owes to others. This can include all kinds of obligations, like money borrowed from a bank, rent for use of a building, money owed to suppliers for materials, payroll a company owes to its employees, environmental cleanup costs, or taxes owed to the government. Liabilities also include obligations to provide goods or services to customers in the future. Shareholders’ equity is part of the company’s liabilities: they are funds “owing” to shareholders (after payment of all other liabilities). In other words, it is the money that would be left if a company sold all of its assets and paid off all of its liabilities. This leftover money belongs to the shareholders, or the owners, of the company. The following formula summarizes what a balance sheet shows:

ASSETS = LIABILITIES + SHAREHOLDERS’ EQUITY
A company’s assets have to equal, or “balance,” the sum of its liabilities and shareholders’ equity. The requirement of company’s last two year Balance Sheet As follows: R.K. MARBLE PREVATE LIMITED BALANCE SHEET AS AT 31ST MARCH, 2008 PARTICULARS 2008 Rs. (A) SOURCES OF FUNDS: Shareholder’s Fund: 2007 Rs.

a. Share Capital b. Reserves & Surplus (including profit) Loan Funds: a. Secured Loans b. Unsecured Loans Current Liabilities & Provisions: a. Current Liabilities b. Provisions TOTAL APPLICATION OF FUNDS : Fixed Assets:Gross Block Less : Depreciation Net Block Capital work In Progress Investments Current Assets, Loans & Advances: a. Inventories b. Sundry Debtors c. Cash & Bank Balance d. Other Current Assets e. Loans & Advances Deferred Tax Assets TOTAL

63,15,57,000 72,62,18,351 1,35,77,75,351 46,52,86,672 Nil 46,52,86,672 2,03,30,416 40,99,44,575 43,02,74,991 2,25,33,37,014 1,28,88,19,047 (83,99,19,465) 44,88,99,582 62,12,633 6,31,17,050 5,95,25,304 12,89,15,638 8,89,99,018 16,80,502 1,40,37,02,208 5,22,85,079 2,25,33,37,014

21,05,19,000 75,71,78,319 96,76,97,319 17,77,34,222 10,05,846 17,87,40,068 4,03,70,679 23,25,27,392 27,28,98,071 1,41,93,35,458 1,51,53,17,426 (92,12,24,640) 59,40,92,786 67,73,177 3,27,43,750 8,00,72,275 16,08,08,613 7,10,41,834 9,50,825 46,37,88,031 90,64,167 1,41,93,35,458

Facts and findings :-

When people form a company, they decide whether to limit the members' liability by shares. The memorandum of association (a document required in the company’s formation) must state:
• •

the amount of share capital the company will have; and the division of the share capital into shares of a fixed amount.

On registration of the company at Companies House, members of the company (the ‘shareholders’) must agree to take some, or all, of the shares. The memorandum of association must show the names of the people who have agreed to take shares and the number of shares each will take. These people are the subscribers Funds raised by issuing shares in return for cash or other considerations. The amount of share capital a company has can change over time because each time a business sells new shares to the public in exchange for cash, the amount of share capital will increase. Share capital can be composed of both common and preferred shares.

Also known as "equity financing".

Share Capital is created when a company is formed. The people forming the company decide whether its member’s liability will be limited by shares. Decided then is the amount of share capital the company will have and the division of it into shares of a fixed amount. This is stated in the memorandum of association and An increase of the share capital may be effected by cash payment as well as in other ways. The increase may be effected without regard to the pre-emption rights granted to existing shareholders provided that the shares are offered for subscription at market price or as consideration for the Company’s takeover of an existing undertaking or certain assets at a value corresponding to the value of the shares issued. In all cases other than those set out in the previous sentence, the Company’s existing shareholders shall be entitled to subscribe for the new shares on a pro rata basis in proportion to their shareholding. Equity which cannot otherwise be classified as capital stock or retained earnings. It's usually created from a stock issued at a premium over par value. The balance sheet suggests a decrease in reserve and surplus so the situation is good .. A company's debts or obligations that are due within one year. Current liabilities appear on the company's balance sheet and include short term debt, accounts payable, accrued liabilities and other debts. Normally, companies withdraw or cash current assets in order to pay their current liabilities. The decrease in the balace sheet suggests that the company has cleared its liabilities in 2008 ., so the net amout of current liabilities has gone down . Inventories include raw materials, component parts, work in process, finished goods, packing and packaging materials, and general supplies. The control of inventories, vital to the financial strength of a firm, in general involves deciding at

what points in the production system stocks shall be held and what their form and size are to be. As some unit costs increase with inventory size—including storage, obsolescence, deterioration, insurance, investment—and other unit costs decrease with inventory size—including setup or preparation costs, delays because of shortages, and so forth—a good part of inventory management consists of determining optimal purchase or production lot sizes and base stock levels that will balance the opposing cost influences. Decrease in the general inventory decides the levels (reorder points) at which orders for replenishment of inventories are to be initiated. So there is a urgent need to replenish it .

Debtors in American parlance are referred to as accounts receivable and they show the amount of money owed to the firm at the accounting date by people who have purchased the products or services of the firm but have yet to pay. In this case there are £80 outstanding because of sales made by the firm on credit. As this hypothetical balance sheet is based on a retailer selling mainly for cash, this debtors figure is relatively low. The firm would expect to be paid by the people or organisations represented by this debtors figure at the appointed time in the future. The figures for debtors should not contain those debts which have become too doubtful for repayment to be reasonably expected. These should be written off and the debtors figure correspondingly reduced. As this writing off will reduce assets, the liability side of the balance sheet has to be reduced by the same amount in order to maintain the required equality. As it is the shareholders of the company that will have to face the loss of selling to people who did not pay, the reduction will made in the equity section. An increase in debtors is not good from companys point of view because the money stands still and cannot be included in taking investment decisions.

This figure total assets less current liabilitie also shows the size of the firm's assets which have been financed by long-term funds, that is all money obtained by the firm other than the short-term current liabilities. The larger this number the safer the firm, all other things being equal.So the position of this firm is good from this point of view . The capital and reserves section of the balance sheet gives the breakdown of the shareholders' funds. Shareholders are, of course, the owners of the firm and as such are entitled to any of the money which the firm earns after the various creditors have been paid. Shareholders elect the directors of the firm.. the decrease in capital and reserves is beneficial from shareholders point of view . The cash and bank balance of this firm has increased from 2007to 2008 . this condition suggests that the firm would be able to make more future investiments and is on the safer side .

The increase in value of fixed assets because of revaluation of fixed assets is credited to ‘Revaluation Reserve’, and is not available for distribution as dividend. Revaluation Reserve is treated as a Capital Reserve The increase in depreciation arising out of revaluation of fixed assets is debited to depreciation expense. Fixed assets are held by an enterprise for the purpose of producing goods or rendering services, as opposed to being held for resale in the normal course of business. For example, machines, buildings, patents or licences can be fixed assets of a business.there is a decrease in fixed assets that is not satisfactory from companys point of view .

Secured Loans -Many types of loans are available in the Us for companies and small businesses. For instance companies can avail of

secured loans, that is, against a collateral such as real estate or fixed deposits. Secured loans have two advantages over unsecured ones. Firstly, secured loans are easier to obtain as the lender is exposed to less risk. Secured loans are also cheaper than unsecured loans, that is, they charge a lower rate of interest. This increase is very good from the company point of view and so increases its goodwill Unsecured loans can be obtained based on the credit history of the company as well as its balance sheet. Such loans are, however, costly compared to secured loans and are available only to those companies . that already have a strong credit history. To build a credit history first, the company must first go in for a secured loan. Nill balance in 2008 for this company suggests that company has cleared all its risk of loans . moreover these are more costly and their clearance is essential . the firm has done so

Capital work in progress, sometimes at the end of the financial year, there is some construction or installation going on in the company, which is not complete, such installation is recorded in the books as capital work in progress because it is asset for the business. This is usually recorded as an asset on the balance sheet. Work in progress indicates any good that is not considered to be a final product, but must still be accounted for because funds have been invested toward its production. An increase in wip is good from the management point of view because these are assets and these will contribute to in increase in working capital .

REFERENCES:
o o o o Guidance from faculty and corporate guide. Reference to company’s financial statements. Reference to R.K. Marble Private limited website. Reference to various websites like;

o o o
o

www.google.com www.indiainfoline.com www.wikepedia.com www.cmaindia.org
Reference to various magazines

o

Books (Financial Management and Management Accounting)

 o

Appendices:
Appendix- A: Balance Sheets for R.K. Marble Private Limited (2006-

07 to 2007- 08)

o

Appendix- B: Profit & Loss Accounts for R.K. Marble Private Limited (2006-07 to 2007-08)

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