“A BRIEF STUDY ON RATIO ANALYSIS IN ODISHA MINING

CORPORATION”
A
SIP
Submitted to the
Fakir Mohan University
in partial fulfilment for the award of the Degree of
Master of Business Administration

By
SWETA GHOSE
Roll No. 13201FM183030
Regd. No. 01805/15

Under
The Guidance of
Dr. ARTTABANDHU JENA

P.G DEPARTMENT OF BUSINESS MANAGEMENT

FAKIR MOHAN UNIVERSITY
VYASA VIHAR, BALASORE, ODISHA

2019
 DECLARATION

I SWETA GHOSE bearing Examination Roll No- 13201FM183030 do hereby declare

that this dissertation entitled “A brief study on Ratio Analysis in Odisha
Mining Corporation” submitted to P.G Department of Business Management, Fakir
Mohan University in partial fulfilment for the award of the degree in Master in business
administration is an original piece of work done by me and this has not been submitted for
the award of any other degree or diploma elsewhere in part or full.

Place:
Date: (Sweta Ghose)
Roll No. 13201FM183030
P.G. Dept. of Business
Management
Fakir Mohan University,
Balasore

1
 GUIDE CERTIFICATE

This is to certify that the dissertation entitled “A brief study on Ratio Analysis in
Odisha Mining Corporation” is a record of bonafide research work carried out by
Sweta Ghose under my guidance. The project has reached the standard fulfilling the
requirements of the regulation relating to the Degree of Master in business administration
and it has not been submitted earlier anywhere for the award of any degree or diploma.

I wish her all success in future career.

Place:
Date: (Dr. Arttabandhu Jena)
Research Supervisor
P.G. Dept. of Business Management
Fakir Mohan University, Balasore

Signature of the Head of the Department

2
 ACKNOWLEDGEMENT
“Acknowledgement is an art, one can write glib stanzas without meaning a word, and on
the other hand one can make a simple expression of gratitude”

First and foremost, I thank the almighty God for bestowing me with good health and
confidence to complete the project on time.

I extend my Special gratitude to Prof. Padmalita Routray, Head of Department

Business Management Department for giving me this opportunity.

I am extremely thankful to Dr. Arttabandhu Jena, Assistant Professor for helping me on

my project.

I also extend my gratitude to Mr. Subash Chandra Behera, Manager (Finance), OMC
Ltd., Corporate Guide.

I also acknowledge with a deep sense of reverence, my gratitude towards my parents and
member of my family, who have always supported me morally as well as economically.
At last but not least gratitude goes to all of my friends who directly or indirectly helped
me to complete this project report.

Place:
Date: (Sweta Ghose)
Roll No. 13201FM183030
P.G. Department of Business
Management
Fakir Mohan University, Balasore

3
 CONTENTS
SL NO. TITLE Pg no.
Certificate from the Organisation
Declaration
Guide Certificate
Acknowledgement
Preface
List of Tables
List of Figures/ Graphs
List of Abbreviations
Chapter 1 Introduction 1
1.1 Introduction 2
1.2 Objective of the study 3
1.3 Scope of the study 4
1.4 Research Methodology 4
1.4.1 Sources of data collection
1.4.2 Data interpretation
1.4.3 Time duration
1.5 Limitation of the study 5
Chapter 2 Company profile 6
2.1 Overview of the company 7-8
2.1.1 Establishment
2.1.2 Business lines of OMC
2.1.3 Major milestone achieved
2.1.4 Sales
2.2 Environment 8
2.3 Information technology 9
2.4 Quality management 10
2.5 Diversification and expansion 11
2.6 Ores handling plant 11
2.7 Beneficiation plant 12
2.8 Export 12
2.9 Peripheral development 12-13
Chapter 3 Conceptual framework of Financial statement analysis 14
3.1 Objective and importance of Financial statement analysis 16
3.2 Types of financial analysis 16
3.3 Procedure of Financial statement analysis 19
3.4 Methods of Financial statement analysis 20
3.5 Statement of the Balance Sheet 34-35
3.6 Statement of the Profit Loss Accounts 36-38
3.7 Statement of the Fund Flow 39-41
Chapter 4 Ratio Analysis 42-48

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Chapter 5 Data analysis & interpretation 49
Chapter 6 Findings, conclusion, suggestion 50
5.1 Findings 51
5.2 Conclusion 52
5.3 Suggestion 53-58
Annexure 59
Bibliography 63

CHAPTER-1
INTRODUCTION

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1.1 Introduction
Finance is the key for every business which plays a dominant role on organizational
activities. A firm mainly looks for wealth maximization and profit maximization. But to manage
these funds in effective and efficient way a challenging task for the organization. The funds are
generally raised through various sources like issue of share & debenture. Every stakeholder of
the business is interested to know the financial health of the organization. Annual report is
crucial for every organization. 

A profitability ratio is a measure of profitability, which is a way to measure a company's

performance. Profitability is simply the capacity to make a profit, and a profit is what is left over
from income earned after you have deducted all costs and expenses related to earning the
income. 

According to Accountant's handbook by M.Y KHAN & P K JAIN defines that

"profitability is the ability for a business to earn a profit".

Ratio analysis is an accounting tool, which can be used to measure the solvency, the
profitability, and the overall financial strength of a business, by analysing its financial accounts
(specifically the balance sheet and the profit and loss account).

Accounting ratios are very easy to calculate and they enable a business to highlight which areas
of its finances are weak and therefore require immediate attention.

There are five main categories of accounting ratio:

1. Liquidity ratios, these measure the solvency of the business and its ability to meet short-
term debts.
2. Profitability (or 'performance') ratios, these analyse the profit made over the last year.
3. Financial efficiency (or 'activity') ratios, these analyse the efficiency of the business in
terms of the use of its resources in generating sales.
4. Gearing ratio, this measures the proportion of the capital of the business which has
come from external sources, and must be repaid with interest.
5. Shareholders' ratios, these measure the strength of the company, its share price and its
dividends.

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1.2 Objectives of the study

1. To get the idea about the performance of the business.

2. To find out the reason of increase in expenses or income over last four financial years
(2015-2016-2017-2018).
3. To show the increase or decrease of reserve surplus and general reserve balance of the
organization.
4. To help the management in its planning and forecasting activities.
5. To evaluate operational efficiency, liquidity and solvency of firm.
6. To give suggestion and recommendation based on the study.

1.3 Scope of the study

The Odisha Mining Corporation Limited (OMC) is a "Gold" Category State PSU of country.
This study about Ratio analysis is important on the view of organization’s managerial decision as
well as our state's efficient use of natural resources.

1.4 Research Methodology

Research

Research is nothing but systematic study and investigation of sources & materials. It establish
facts and reach conclusion.

Methodology

Methodology is a body of methods used in a particular activity.

 Methodology includes the personal interaction with the Finance Manager.

 Selection of data: from the financial statements of the firm for last two years; i.e from
Financial Statements for the year 2016-2017
Financial Statements for the year 2017-2018

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1.4.1 Sources of Data Collection

Data has been collected from primary source and secondary source.

Primary Source: By discussing with my concerned external guide of the organization.

Secondary Source:

(i) Annual report (2015, 2016, 2017, 2018)

(ii) Balance Sheet
(iii) Profit & Loss accounts

1.4.2 Data Interpretation: Data interpretation has been prepared by using annual report, table
and graphs.

1.4.3 Time Duration

The allotted time duration was 6 weeks. (27th May to 6th July 2019)

1.5 Limitation of the Study

As the report has prepared by taking certain assumptions like the provided data are
correct as far as the corporation is concerned in fact there are certain limitations which I faced
during my study are given below:

1. Time factor was the only reason which didn't lead to analysis all the facts and figures
thoroughly.
2. To write exact quantitative figure was not possible in fact they were written up to four
decimals for clear understanding purpose.
3. The complete explanation was not possible to mention on the report because the given
interpretation in this report was made by analyzing to the relevant years annual report.
4. The trend has been prepared by assuming 2007 as the base year for research.
5. Last two years data was unavailable for our research which could be the major reason to
give in depth analysis on the report.

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 CHAPTER-2
COMPANY PROFILE

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 COMPANY PROFILE

Introduction to OMC

Odisha is one of the richest states in India in terms of mineral wealth. However, this wealth was
largely untapped as mining is a very capital intensive industry and in the early years of
independence capital was scarce. Under these circumstances, the Odisha Mining Corporation
Limited (OMC) was incorporated on 16th May 1956 as a joint venture Company of Govt. of
Odisha and Govt. of India with the objective of harnessing the mineral wealth of the State of
Odisha through exploration, extraction as well as value addition.

Four years later, following the withdrawal of the Govt. of India from the company, OMC became
a wholly State-owned Corporation of Govt. of Odisha on 17th Nov 1961. As of now, it continues
to be a wholly owned corporation of the Odisha Government, which has subscribed to the entire
paid up capital of Rs.31.45 crores out of an authorized capital of Rs.100 crores.

The major minerals mined by OMC are chrome, iron and manganese ore which cater to the
requirement of mineral based industries such as steel, sponge iron, pig iron, ferro-manganese,
ferro-chrome, etc.

OMC has been growing steadily over these years and today it stands as the largest State PSU in
the mining sector of the country. It recorded the highest ever turnover of Rs.2850 Cr. in FY2017-
18.

OMC is ably managed by an eminent Board of Directors consisting of Government Directors as

well as Independent Directors. The Chairman and the Managing Director look after the day-to-
day running of the Corporation under the guidance of the Board of Directors.

That OMC has been classified as a “Gold” Category State PSU", is a 100% debt free profit
making  corporation, is a testament to the excellent processes and systems put in place by the
management team.

One such system was the adoption of SAP, an ERP tool, since 2004 to streamline its business
processes, bring synergy in functional activities across the organization, handle numerous
business locations and expanding volumes. SAP also helps in bringing greater transparency in
financial transactions and effective monitoring and financial control enabling the organization to
take informed and timely decisions. As a matter of fact, OMC was awarded with the Golden
Peacock Award in 2006-07 by the Institute of Directors, New Delhi for successfully
implementing SAP across the organization.

2.1 Overview of the Company

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 As on today the Odisha Mining Corporation stands as a 100% debt free company, which
is itself a big achievement by any means. The Authorized Capital of the organization is Rs.100
Core and the Paid up Capital of the company is Rs.31.45Crore.

2.1.1 Establishments

On May16, 1956 OMC was incorporated as a joint venture organization of Government

of India to explore the mineral wealth of India. Later on, in the year 1961 it became a wholly
state owned corporation of Government of India. The growth of the company has been
impressive over past years and today it has become the largest State PSU in mining sector of the
country. It has also recorded the highest turn- over of Rs.2756 crore in 2010-11.

The head office of the company is at Bhubaneswar and other regional offices are at
Daitari (Keonjhar), Gandhamardan (Keonjhar), JK Road (Jajpur), Bangur (Keonjhar), Barbil
(Keonjhar), Koira (Sundergarh), Angul and RYAGADA . The export office of OMC is at
Paradeep. Other than that there is a Chrome Ore Beneficial Plant (COBP) at Kaliapani .
Basically, there are mining sites or offices in various mines under each and every region.
Prospecting divisional offices are also there at Koira, JK Road, Barbil and Rayagada and
prospective camp at Bangur, Joribar , Chirigunia , Seremda-Bhadrasahi , Khandadhar , Daitari ,
Gandhamardan and Bhawanipatna.

2.1.2 Business Lines of OMC

The company mainly aimed at three major mines – Chrome ore, Iron ore and Manganese
ore. These three over the past few years has satisfied the recruitments of plenty of minerals base
industries like Ferro-Chrome, Pig iron, Sponge iron, Steel,Ferro-manganese etc. But later from
2008-2009 onwards the company temporarily had to suspend mining of Manganese Ore and also
Lime stone ore because of environment constraints.

OMC is managed by a Board of Directors consisting of Government Directors and

Independent Directors. The day–to-day management of the corporation is looked after by the
Managing Director(MD)/Chairman cum Managing Director (CMD) as authorized by the Board
of Directors.

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2.1.3 Major Milestone Achieved

OMC has adopted SAP software, an ERP tool, since 2004 to streamline its business
processes, bring synergy functional activities across the organization, and handle numerous
business locations and expanding volumes.It also helps in bringing greater transparency in
financial transaction and effective monitoring and financial control enabling the organization to
take informed and timely decisions. For successfully implementing the ERP package,OMC was
awarded with the Golden Peacock Award in 2006-2007 by the Institute of Directors, New
Delhi.The Odisha Mining Corporation Ltd. has been classified as a ‘GOLD’ category State PSU
in 2012 and it was one of the biggest achievements of OMC till date.

2.1.4 Production

OMC has shown consistency in the production of ore and ore concentrate over the last 5 years.
The production of iron ore has increased substantially from 34 lakh tonnes in 2005-06 to about 8
million tonnes in 2008-09. Similarly the production of chrome ore and chrome concentrate has
been fairly consistent in the last 5 years.

At the present rate, OMC is producing about 10 % of total iron ore production of the State and
about 30 % of the total chrome ore production of the State. Presently Daitari, Gandhamardan and
Kurmitar (Khandadhar) are the major Iron ore Mines of OMC whereas South Kaliapani is the
main Chrome ore Mine of OMC. Bangur Chrome ore Mine is the first and only underground
mine of OMC.

Detailed information about the mine-wise production for the last 5 years is given below:

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13
14
2.1.5 Sales

OMC continues to maintain Orissa’s global connection through export of minerals from
Paradeep Port. In recognition of its superb export performance, OMC has bagged the CAPEXIL
Export award every year in a row since 1998-99 with its foolproof export network. OMC is in a
position to handle direct export of iron ore, chrome ore and chrome concentrates produced from
its Chrome Ore Beneficiation plant.

The rates for domestic sale of Iron, Chrome and Manganese Ores are decided on e-auction basis.
The Sale of ore to buying units/industries is restricted to their capacity and verification of the
units/industries is done to ascertain their requirement of Ore.

Chrome ore is sold to Ferro-chrome units, Chemical units and Refractory units.

Detailed information relating to domestic and export sales of all types of ores in the last 5 years
is given below:

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16
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2.2 Environment

OMC has always placed a great deal of importance on the environmental impact of its
operation and has taken care to ensure that the damage to the environment is more than
adequately compensated. Besides creating and maintaining plantations at its various mine sites
and also assists the Forest department by providing vehicles, VHF sets engaging protection
guards etc. OMC has organized seminars in collaboration with forest department officials for
sensitizing OMC officer’s specially mining engineering the need for “eco-friendly” mining
operations. Regular coordination meetings with the forest Dept. official are being held both at the
state and central govt. level.

OMC has added another glorious feather to its cap. The corporation has awarded ISO
14001 certification. The certificate was issued after grueling audit for three days by the
international accredited certification agency, NQAQSR, New Delhi. The certificate encompasses
the environment management system in Daitari Iron Ore project, Chrome Ore beneficiation plant
and opening mines of chrome join, namely Kalipani, South Kaliapani and Suturing.

Earlier the corporation had bagged the ISO 9001 Quality management certification for
Daitari, COBP, operating of chrome zones and shipment offices of Paradeep.

The certificate redeems the commitment of the corporation to maintain global standard
eco-friendly mining. In having ISO 14001 certification, OMC becomes first state PSU in
ORISSA and probably the first mining state PSU in the country to have this distinction in the
2004 version. Bhubaneswar based management consulting firm Surpass Management Consultant
Pvt. Ltd assisted OMC for this certification.

2.3 Information Technology

OMC has taken giant strides implementing e-governance with the use of information
technology in its business operation. Total equipment’s are extensively used for accurately
capturing the excavation made by the rising contractors. The SURPAC software helps in reverse
estimation and mining planning. Above all, the implementation of enterprise resource planning
has brought about a sea change in the functioning of the operation integrating various

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departments and making available real time data for faster and more effective decision making.
OMC holds the pride of being the fast mining in the country to map its business process on SAP.

The ERP implementation commenced in OMC on 8th Sep’04 covering the following
functional modules

1. FICO (Finance and controlling)

2. MM (Material Management)
3. SD (Sales and Distribution)
4. SOP (Sales Operation Planning)
5. QM (Quality Management) in sales and procurement.
The implementation which was confined to head office and regional office was
subsequently extended to the mines.
With the implementation of the above modules, the material procurement process has
been streamlined, sales cycle period has been reduced, stock position of mines is available,
online planning of cash and bank balance has been possible inter-alia. Subsequently different HR
modules like employee self-service(ESS) personal development(PD) and work flow have been
implemented which has help the employees in the remotest mines to sick leave and loan
approvals online so their own personal information including salary slip, loan balances, IT
returns. Self-appraisal management is also possible online. A biometric attendance recording
system of RFID in the OMC Head offices has been introduced. The system ensure timely
attendance of the employee in the office by the recording their fingerprint and transfers the
monthly attendance to ERP Pay Roll System for preparing the Pay Bill without any manual
intervention required.

2.4 Quality Management

ISO 9001 certification envisages Quality Management System OMC decided to
implement the ISO 9001 Quality Management System to have the following benefits.

1. Enhance operational efficiency.

2. Ensure better marketability.
3. Reduce cost.
4. Promote greater customer satisfaction and excellence.

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 5. Standardized different procedures.
6. Add value for money.
7. Enhance production.
8. Maximize operational efficiency, capacity utilization and productivity.
9. Put in a place a never ending cycle for improvement.
Daitari Iron Ore project is the flagship of OMC’s operation with rounds the clock
operation and total. The chrome ore beneficiation at Kaliapani is a 100% export oriented unit of
OMC which has been adding to OMC’s exchequer with 100% capacity utilization. OMC
decided to have the ISO certification for Daitari Iron Ore project and COBP at the outset for
these two promising units. The 1994 version had already been outdated and 2000 version of ISO-
9001 certification had already come into being. The obvious choice was ISO-9001:2000 version.
With the assistance of a global agency, M/s TQM Consultancy (p) ltd. Bhubaneswar. OMC
implemented ISO standard and was certified by M/s NQAQSR, Delhi base certification agency
recognition by JAS-ANZ.

By the beginning of the New Year 2004, OMC was ISO certified. With the ISO
certification, OMC emerged as one of the 1st PSU’s in the state to be ISO certified in the 2000
version.

2.5 Diversification and Expansion

The chrome ore beneficiation plant, a 100% EOU at South Kaliapani of Jajpur District is
one of the most vital foreign earning units of OMC. There are plans establish another COB plant
considering the market demand.

JV between OMC and RTMD

OMC executed a joint venture agreement with Rio Tinto Mineral Development, UK to
carryout phase wise feasibility studies on Gandhamardan and Malangtoli deposited in Keonjhar
and Sundergarh districts for development of a mining project of million tones or product iron
target per annum, a dedicated railway line from mines site to paradeep port and expansion of port
facility in paradeep.

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JV between OMC and INDAL

OMC and INDAL executed an agreement to develop Bhapalimali bauxite deposit in

Rayagada an agreement to devlop Bhapalimali bauxite deposit in Rayagada district for setting of
an Alumni refinery of 1.00 to 2.5 million tons per annum.

JV between OMC and VEDANTA

M/s Sterlite Industries Ltd an agreement executed an agreement with OMC ltd through its
fully owned subsidiary company namely M/s Vedanta alumina ltd to take up the Langigarh ML
project on 05.01.2004.

2.6 Ore Handling Plant

Daitari iron ore plants are the flagship of OMC’s operations. Fully mechanized with
round the clock operation, Daitari is poised to produce 3 million tons of washed as well as dry
screened calibrated iron and mines. The second steel plants of Orissa (NEELACHALA ISPAT
NIGAM LTD) principally out of source its raw materials recruitments from Daitari.

2.7 Benefaction Plant

Designed to upgrade chrome of lower of chrome concentrates of saleable grade the 100%
export oriented chrome beneficiation plant (COBP) at Kaliapani has been substantially
contributing to OMC exchequer with 100% capacity utilization. The plant has recorded a
production of 1 million tones (WMT) chrome concentrate since commissioning in1995.This has
been possible due to addition of anew hydro cyclone and modification of the plant.

2.8 Export

OMC continues to maintain or maintain Orissa’s connection through exports of minerals

from Paradeep port. In recognition of its superb export performance.OMC gas bagged the
capelin export award every year in row since 1998-99, with it fool proof export network. OMC’s
in a position to handle direct export of iron ore, chrome ore and chrome concentrates produced
from its chrome ore beneficiation plant.

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2.9 Peripheral Development (CSR)

OMC is committed to fulfill its obligation under corporate Social Responsibility

(CSR).Other than undertaking development works itself in the vicinity of OMC mines, huge
amount of funds have also been placed with various district administrations for development
activities in the concerned districts.

Minister’s Relief Fund. Furthermore, OMC has contributed Rs.5 crores to Odisha
Environment Management Fund to fulfill its commitment towards a ‘Clean and Green
Environment’ and Rs 20 Crore to State Project Director, Odisha Madhyamika Shikshya Mission,
Bhubaneswar towards construction of 5 nos. Model Schools.

OMC has formulated and adopted a POLICY ON CORPORATE SOCIAL

RESPONSIBILITY wherein 2% of the average net profit of last three years is set aside for CSR
activities.
Detailed information regarding expenditure incurred under CSR activities in the last 3 years is
given below.

OMC is the largest State Govt. owned PSU engaged in Mining Sector in India. OMC is
committed to environment friendly mining.

OMC has planted saplings through State Forest Department at the rate of 1 tree for every
10 MT of ore extracted in the periphery of the mining leases located in the district of Sundargarh,
Keonjhar, Jajpur & Kalahandi , Rayagada and Koprut District of Odisha.

OMC has adopted 5 villages annually from the financial year 2015-16 to provide among
others the following basic entitlements: drinking water through pipes, electricity, sanitation
(IHLs), internal roads/drains, and plantation in the village and pucca houses.

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 CHAPTER-3
CONCEPTUAL FRAMEWORK OF FINANCIAL STATEMENT ANALYSIS

23
 Financial Statement Analysis
Financial statement plays a crucial role in setting the framework of managerial decision.
It provides the summary of accounts of a business enterprise and to understand financial
performance of a corporation, its stockholders and the application of fund statements. But the
information provided in income statement or financial results aren't sufficient to make the
managerial decision directly. So the financial statement analysis report helps to the management
to draw an effective, convenient and flexible managerial decision. Financial Statement analysis
of an organization can be prepaid by taking previous few years annual report information which
could help to view the growth and development of the business. An annual report of an
organization usually contains the detail information about financial affairs and other
developmental activities of an organization during a particular financial year.

This report has prepared by taking all the information provided by the Odisha Mining
Corporation, Bhubaneswar. It is a concise statement of last Three year annual report information
which has analyzed by taking graphs, charts, facts and figures. Financial Statement analysis is
the process of reviewing a company's financial statements. Some of the statement that is
typically included in a financial statement analysis is the income statement, the balance sheet,
cash flow statement, and statements of shareholders, equity.

Financial Statement analysis is important if you are planning to invest in a company

.When financial statement analysis is done well, it can help you understand the financial health
and future direction of any company.

In finance, a financial ratio or accounting ratio is a ratio of selected values on an

enterprise financial statement. There are many standard ratios used to evaluate the overall
financial condition of a corporation or other organization. Financial ratios are used by managers
with in a firm, by current and potential stockholders (Owners) of a firm, and by a firm's
creditors. Security Analysis use financial ratios to compare the strength and weaknesses in
various companies if shares in a company are traded in a financial market, the market price of the
shares is used in certain financial ratios.

Values used in calculating financial ratios are taken from the balance sheet, income statement,
cash flow statement and (rarely) statement of retained earnings. These comprise the firm's

24
accounting statement or financial statement. Financial ratios quantity many aspects of a business
and are an integral part of financial statement analysis.

3.1 Objective and Importance Of Financial Statement Analysis

The primary objective of financial statement analysis is to understand and diagnose the
information contained in financial statement with a view to judge the profitability financial
soundness of the firm and to make forecast about future prospects of the firm .The purpose of
analysis depends upon the person Interested in such analysis and his object. However the
following purposes or objectives of financial statement analysis may be stated to bring out
significance of such analysis:

i. To assess the earning capacity or profitability of the firm.

ii. To assess the operational efficiency and managerial effective to assess the short term as
well as long term solvency of the firm.
iii. To identify the reasons for change in profitability and financial position of the firm.
iv. To make inter- firm comparisons.
v. To make forecast about future prospects of the firm.
vi. To assess the progress of the over a period of time.
vii. To help in decision making and control.

viii. To guide or determine the dividend action.

ix. To provide important information for granting credit.

3.2 Methods of Financial Statement Analysis

A number of methods or devices are used to study the relationship between different
statements. The following methods of analysis are generally used:-

i. Comparative statements
ii. Trend analysis
iii. Common size statements
iv. Ratio analysis

25
In this project the comparative statements and ratio analysis is used to study the financial
statement of OMC.

COMPARATIVE STATEMENT

The comparative financial statements are statements of the financial position at different
periods of time. The elements of financial position are shown in a comparative form so as give
an idea of financial position at two or more period. Any statement prepared in a comparative
form will be covered in comparative statements.

i. BALANCE SHEET
ii. INCOME STATEMENT

COMPARATIVE BALANCE SHEET

The comparative balance sheet analysis is the trend of the same items, group of items and
computed items, group of items and computed items in two or more balance sheets of the same
business enterprise on different dates. The changes in periodic balance sheet items reflect the
conduct of a business. The changes can be observed by comparison of the balance sheet at
beginning and at the end of a period and these changes can help in forming an opinion about the
progress of an enterprise. The comparative balance sheet has two columns for the data of original
balance sheets. A third column is used to show this increase in figures. The fourth column may
be added for giving percentage of increases and decreases.

COMPARATIVE INCOME STATEMENT

The income statement gives the results of the operation of a business.The comparative
income statement gives an idea of progress of a business over a period of time. The changes in
absolute data in money values and percentages can be determined to analyses the profitability of
the business. Like comparative balance sheet income statement also has four columns. First two
columns give figures of decrease in figures in absolute amounts and percentages respectively.

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APPLICATION OF FINANCIAL STATEMENT ANALYSIS

Following are the application of financial analysis:-

1. Assessing Corporate Excellence

2. Judging credit worthiness
3. Forecasting bankruptcy
4. Valuing equity shares
5. Predicting bonds ratings
6. Estimating market risk

LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS

Financial analysis is a powerful mechanism of determining financial strengths and
weakness of a film. But, the analysis is based on the information available in the financial
statements. Thus, the financial analysis suffers from serious inherent limitations of financial
statement. The financial analyst has also be careful about the impact of price level changes,
windows dressing of a financial statements, changes in the accounting policies of a firm,
accounting concepts and conversation, and personal judgment, etc. The readers are advised to
relate the limitations of financial statements as given in the previous Chapter and also the
limitations of ratios as a tool of financial analysis as discussed in Ratio Analysis. Some of the
important limitations of financial analysis are, however, summed up as below.
1. It is only a study of interim reports.
2. Financial analysis is based upon only monetary information and non-monetary factors are
ignored.
3. It is does not consider changes in price levels.
4. As the financial statements are prepared on the basis of going concern, it does not give
exact position. Thus accounting concepts and Conventions cause a series limitation to
financial analysis.
5. Changes in accounting procedure by a firm may often make financial analysis
misleading.
6. Analysis is only a means and not an end in itself. The analyst has to make interpretation
and draw his own conclusions. Different people may interpret the same analysis in
different ways.

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TREND ANALYSIS

If financial analysis the direction of changes over a period of years is of crucial

importance. Time series or trend analysis of ratios indicates the direction of change. This kind of
analysis is particularly applicable to the items of profit and loss account. It is advisable that
trends of sales and net income may be studied in the light of two factors: the rate of fixed
expansion or secular trend in the growth of the business and the general price level. It might be
found in practice that a number of firms would show a persistent growth over a period of years.
But to get a true trend of growth, the sales figure should be adjusted by a suitable index of
general prices.

Mother method of securing trend of growth and one which can be used instead of the
adjusted sales figure or as a check on them is to tabulate and plot the output or physical volume
of sales expressed in suitable units of measure. If the general price level is not considered while
analyzing trend of growth, it can mislead the management. They may become unduly optimistic
in periods of prosperity and pessimistic in dull periods.

28
 CHAPTER- 4

RATIO ANALYSIS AND ITS

INTERPRETATION

29
RATIO ANALYSIS

The analysis of the financial statements and interpretations of financial results of a

particular period of operations with the help of 'ratio' is termed as "ratio analysis. “Ratio analysis
used to determine the financial soundness of a business concern.

Ratio analysis can be defined as relationships worked out among various accounting data.

It may be defined as to one number with another number and to express it in items of another.

Robert Anthony defines the ratio as “simply one number expressed in terms of another ". A great
number of ratios can be computed from the basis of financial statements, i.e. Balance sheet and
Profit & Loss A/C.

Advantages of Ratio Analysis

Ratio analysis is necessary to establish the relationship between two accounting figures to
highlight the significant information to the management or users who can analyze the business
situation and to monitor their performance in a meaningful way. The following are the
advantages of ratio analysis:

It facilitates the accounting information to be summarized and simplified in a required form

1. It highlights the inter-relationship between the facts and figures of various segments of
business.
2. Ratio analysis helps to remove all type of wastages and inefficiencies.
3. It provides necessary information to the management to take prompt decision relating to
business.
4. It helps to the management for effectively discharge its functions such as planning,
organizing, controlling, directing and forecasting.
5. Ratio analysis reveals profitable and unprofitable activities. Thus, the management is able
to concentrate on unprofitable activities and consider improving the efficiency.
6. Ratio analysis provides all assistance to the management to fix responsibilities.
7. Ratio analysis helps to determine the performance of liquidity, profitability and solvency
position of the business concern.

30
Limitations of Ratio Analysis

Ratio analysis is one of the important techniques of the determining the performance of
financial strength and weakness of a firm. Though ratio analysis is relevant and useful technique
for the business concern, the analysis is based on the information available in the financial
statements. There are some situations, where ratios are misused; it may lead the management to
wrong direction. The ratio analysis suffers from the following limitations.

1. Ratio analysis is used on the basis of financial statements. Number of limitations of

financial statements may affect the accuracy or liquidity of ratio analysis.
2. Ratio analysis heavily depends on quantitative facts and figures and it ignores qualitative
facts and figures and it ignores qualitative data. Therefore this may limit accuracy.
3. Ratio analysis is a poor measure of a firm's performance due to lack of adequate
standards laid for ideal ratios.

Classifications of Ratio Analysis

Accounting Ratios are classified on the basis of the different parties interested in making
use of the ratios. A very large number of accounting ratios are used for the purpose of
determining the financial position of a concern for different purposes. Financial ratios are
categorized according to the financial aspect of the business which the ratio measures.

i. Activity ratios
ii. Debt ratios
iii. Market ratios
iv. Profitability ratio
v. Liquidity ratio

Activity ratios : It measures how quickly a firm converts non-cash assets.

Debt ratios : It measures the firm's use of its assets and control of its expenses to
generate an acceptable rate of return.
Market ratios : It investors response to owning a company's stock and aloes the cost of
issuing stock.

31
Liquidity ratios : It measures the availability of cash to pay debt.

Ratio for various tests

1. Short term solvency = current ratio, liquid ratio, inventory turnover ratio and debtors
turnover ratio.
2. Long term solvency = equity ratio ，equity debt ratio ，fixed assets ratio.
3. Profitability or earning = gross profit ratio, operating ratio, net profit ratio, return on
equity capital ratio, return on total ratio etc.

Types of ratio

Ratio as tools of measuring liquidity ，profitability, efficiency and financial position of a company
can be classified into four basic categories: liquidity, activity and profitability.

A. Liquidity ratio

Liquidity Ratio are also termed as Short- term Solvency Ratio .The term liability means the
extent of quick convertibility of assets in to money for paying obligation of short- term nature
.Accordingly liquidity ratios are useful in obtaining an indication of a firm's ability to meet its
current liabilities but it does not reveal how effectively the cash resources can be managed. To
measure the liquidity of a firm the following ratios are commonly used:

1. Current Ratio
2. Quick Ratio
3. Absolute Liquid Ratio

1. Current Ratio

Current Ratio establishes the relationship between current Assets and current Liabilities; it
attempts to measure the ability of a firm to meet its current obligation .In order to compute this
ratio, the following formula is used:-

Current Ratio = Current Asset /Current Liability

32
2. Quick Ratio or Acid Test or Liquid Ratio

Quick Ratio also termed as Acid Test or Liquid Ratio .It is supplementary to the current
ratio. The acid test ratio is a more severe and stringent test of a firm's to pay its short - term
obligations and when they become due. Quick Ratio establishes the relationship between the
quick assets and current liabilities. In order to compute this ratio, the below presented formula is
used:-

Liquid Ratio = Liquid Assets/Current Liabilities

Liquid Assets = (Current Assets - Inventories) or (Sundry Debtors + Cash & Bank balance
+ Loans and advances)

The ideal Quick Ratio of 1:1 is considered to be satisfactory .High Acid Test Ratio is an
indication that the firm has relatively better position to meet its current obligation in time .On the
other hand, a low value of quick ratio exhibiting that the firm's liquidity position is not good.

3. Absolute Liquid Ratio

Absolute Liquid Ratio is also called as cash position Ratio or Over Due Liability Ratio.
This ratio established the relationship between the absolute liquid assets and current liabilities
.Absolute Liquid Assets include cash in hand, cash at bank ，and short term marketable securities
or temporary investment .The optimum value for this ratio should be one ，i.e.，1:2 .It indicates
that 50% worth absolute liquid assets are considered adequate to pay the 100% worth current
liabilities in time. If the ratio is relatively lower than one, it represents that the company's day-to-
day cash management is poor. If the ratio is considerably more than one, the absolute liquid ratio
represents enough funds in the form of cash to meet its short-term obligations in time .The
Absolute Liquid Ratio can be calculated by dividing the Total of the Absolute Liquid Assets by
Total Current Liabilities.
Thus，
Absolute Liquid Ratio = Absolute Liquid / Current Liabilities
Absolute Liquid Assets = Cash in hand + Cash at bank + Short term marketable securities.

33
PREFORM OF BALANCE SHEET

A financial statement is the summaries of a company's assets, liabilities and stakeholder’s equity
at a specific point in the time. These four balance sheet segment give investors an idea as to what
the company owns and owes ， as well as the amount invested by the shareholders.

The balance sheet must follow the following formula:-

Assets = Liabilities + Shareholder's Equity

It is called a balance sheet because the two sides balance out. Each of the four segments
of the balance sheet will have many accounts within it that document the value of each. Account
such as cash inventory and property are on the assets side of the balance sheet, while on the
liability side there are accounts such as accounts payable or long term debt.

The analysis of financial statement consist of study of relationship and trend to determine
whether or not the financial position and result of operation as well as the financial progress of
the company are satisfactory or unsatisfactory .The analytical methods or devices listed below
are used to ascertain or measure the relationship among the financial statements items of a single
set of statement and the changes that have taken place in these items as reflected in successive
financial statement.

ANALYTICAL METHODS AND DEVICES USED IN ANALYSIS FINANCIAL

STATEMENTS AS FOLLOWS

COMPARATIVE STATEMENT

These financial statements are so designed as to provide to the various elements of financial
position contained therein. These statements gives data for all the periods stated so as shows

i. Absolute money values of each of the period

ii. Increase and decrease in absolute data items of money values
iii. Increase and decrease in terms of percentage
iv. Comparison expressed in ratios
v. Percentage of total

34
The Comparative Financial Statement Analysis is statements of the financial at different period
of time .The elements of financial position are shown in a comparative form will be covered in
comparative statement from practical point of view generally two financial statements.
1. BALANCE SHEET
2. INCOME STATEMENT

COMPARATIVE BALANCE SHEET

The comparative balance sheet analysis is the study of the trend of the same items, group
of items group of items and computed items in two or more balance sheet of same business
enterprise on different dates. The change in periodic balance sheet reflects the conduct of a
business. The change can be observed by comparison of the balance sheet at the beginning and at
end of period and these changes can help in formation opinion about the progress of an
enterprise. The comparative balance sheet has two columns for the data of original balance sheet.
A third column is used to show the increase in the figures and the fourth column may be used to
show percentage increase and decrease.

35
36
QUALITATIVE DATA ANALYSIS
The Odisha Mining Corporation Limited
Balance Sheet as at March 31, 2018
(Rupees in Lakh)
Figures as at the end of the Figures as at the end of the
Particulars Note No. current reporting period previous reporting period
March 31, 2018 March 31, 2017
ASSETS
1 Non-current assets
(a) Property, Plant and Equipment 5 14,944.02 13,087.35
(b) Capital work-in-progress 5 4,559.12 5,630.22
(c) Other Intangible assets 5 (i) 39,411.88 34,850.41
(d) Intangible assets under development 5 (ii) 14,009.84 12,286.71
(e) Financial Assets
(i) Investments 6 41,730.58 39,902.59
(ii) Loans 7 51,282.93 72,512.62
(f) Deferred tax assets (Net) 8 29,893.64 -
(g) Other non-current assets 9 49,343.98 41,095.56
Total non-current assets 2,45,175.99 2,19,365.46
2 Current assets
(a) Inventories 10 49,255.72 56,878.90
(b) Financial Assets
(i) Trade receivables 11 14,261.26 10,608.04
(ii) Cash and cash equivalents 12 4,754.27 10,000.98
(iii) Bank balances other than (ii) above 12 36,576.21 1,05,389.44
(iv) Loans 7 43,103.63 39,324.50
(v) Others 13 1,43,561.88 1,45,550.33
(c) Current Tax Assets (Net) 14 81,198.51 65,528.66
(d) Other current assets 15 13,494.00 15,977.79
Total Current Assets 3,86,205.48 4,49,258.65
TOTAL ASSETS 6,31,381.47 6,68,624.10
EQUITY AND LIABILITIES
1 Equity
(a) Equity Share capital 16 3,145.48 3,145.48
(b) Other Equity 17 5,43,032.63 5,86,713.28
Total equity 5,46,178.11 5,89,858.76
LIABILITIES
2 Non-current liabilities
(a) Provisions 18 15,258.28 12,010.39
(b) Deferred tax liabilities (Net) 8 - 10,110.64
Total non-current liabilities 15,258.28 22,121.03
3 Current liabilities
(a) Financial Liabilities
(i) Trade payables 19 31,020.23 24,582.86
(ii) Other financial liabilities 20 7,056.91 5,711.50
(b) Other current liabilities 21
37 30,824.43 25,809.96
(c) Provisions 18 1,043.50 539.99
Total Current Liabilities 69,945.07 56,644.31
TOTAL EQUITY AND LIABILITIES 6,31,381.47 6,68,624.10
38
QUANTITATIVE DATA ANALYSIS

39
40
The Odisha Mining Corporation Limited
Statement of Profit and Loss for the periods ended March 31, 2018
(Rupees in Lakh)
Figures for the Figures for the
current reporting previous reporting
Particulars Note No.
period ended period ended
March 31, 2018 March 31, 2017
I Revenue from Operations 22 2,85,308.60 2,33,142.96
II Other Income 23 31,429.60 37,413.71
III Total Income (I + II) 3,16,738.20 2,70,556.67

IV Expenses
(a) Changes in inventories of finished goods,Stock-in -Trade and work-in-progress 24 (4,352.12) 1,794.08
(b) Employee benefits expense 25 26,706.55 25,064.91
(c) Finance costs 26 872.85 882.60
(d) Depreciation and amortization expense 5 10,825.85 7,643.67
(e) Excise duty 219.55 811.22
(f) Other expenses 27 3,68,818.17 1,02,309.41
Total expenses (IV) 4,03,090.85 1,38,505.89

V Profit/(loss) before exceptional items and tax (III - IV) (86,352.65) 1,32,050.78
VI Exceptional Items - -
VII Profit/(loss) before tax (V - VI) (86,352.65) 1,32,050.78
VIII Tax expense:
(i) Current tax - 42,692.10
(ii) Deferred tax (43,916.37) 14,719.59
(iii) Taxes of earlier years 3,912.09 (3,000.00)
(40,004.28) 54,411.69
IX Profit/ (Loss) for the period from continuing operations (VII-VIII) (46,348.37) 77,639.09

X Profit / (loss) from discontinued operations - -

XI Tax expense of discontinued operations - -

XII Profit / (loss) from discontinued operations (after tax) (X - XI) - -

XIII Profit / (loss) for the period (IX + XII) (46,348.37) 77,639.09
XIV Other Comprehensive Income 2,667.74 (614.78)
A (i) Items that will not be reclassified to profit or loss
(a) Remeasurement of defined employee benefit plans 2,667.74 (940.14)
(ii) Income tax relating to items that will not be reclassified to profit or loss (325.36)

B (i) Items that will be reclassified to profit or loss - -

(ii) Income tax relating to items that will be reclassified to profit or loss - -
Total Comprehensive Income for the period (XIII+XIV)(Comprising Profit/ (Loss)
XV
and Other Comprehensive Income for the period) (43,680.63) 77,024.31

XVI Earnings per equity share (for continuing operation):

(1) Basic (Rs) (1,388.68) 2,448.73
(2) Diluted (Rs) (1,388.68) 2,448.73

XVII Earnings per equity share (for discontinued operation):

(1) Basic (Rs) - -
(2) Diluted (Rs) - -

XVIII Earnings per equity share (for discontinued and continuing operations):
41
(1) Basic (Rs) (1,388.68) 2,448.73
(2) Diluted (Rs) (1,388.68) 2,448.73
The Odisha Mining Corporation Limited
Statement of Cash Flow for the periods ended March 31, 2018
(Rupees in Lakh)
For the period For the period
Particulars ended ended
March 31, 2018 March 31, 2017
(A) Cash flows from operating activities:  
 
Profit before taxes
(86,352.65) 1,32,050.78
  Adjustments for:    
 
Finance costs recognised in profit or loss
872.85 882.60
 
Investment income recognised in profit or loss
(26,920.30) (29,215.77)
 
Gain on disposal of property, plant and equipment
(1.27) (16.38)
 
Depreciation and amortisation of non-current assets
10,825.85 7,643.67
 
Provision for write down of inventories
111.48 (439.08)
 
Provision for Impairment of Investments
- -
  Operating profit before working capital changes    
       
  Movements in working capital:    
 
Increase in trade and other receivables
(1,38,574.23) (3,075.59)
 
(Increase)/decrease in inventories
7,511.70 2,637.30
 
(Increase)/decrease in other assets
(13,844.40) 29,636.15
 
(Decrease)/ Increase in trade and other payables
7,782.78 (3,442.10)
 
Increase/(decrease) in provisions
6,523.52 388.08
 
(Decrease)/increase in Mine Closure Liability
- -
 
(Decrease)/increase in other liabilities
5,014.47 16,536.80
       
 
Cash generated from operations
(2,27,050.19) 1,53,586.46
Taxes Paid
 
(15,669.86) (49,519.20)
Net Cash Flow from/(used in) Operating Activities
 
(2,42,720.04) 1,04,067.26
       
(B) Cash flows from investing activities:    
  Payments for property, plant and equipment

42
 (17,927.73) (57,819.10)
 
Sale of property, plant and equipment
32.97 18.61
 
Payments to acquire financial assets
(1,828.00) (2,017.41)
 
Interest received
31,009.53 35,663.01
 
Repayment by Employees & Others
89.16 107.71
 
Repayment by Employees & Others
17,257.03 26,720.00
 
Payment for Loans to others
- -
Payment for Investment in FD
 
2,09,713.23 36,791.36
Net Cash Flow from/(used in) Investing Activities
 
2,38,346.20 39,464.20
       
(C) Cash flows from financing activities:    
 
Repayment of borrowings
- (73,700.00)
   
Dividend Received on redeemable pref. Shares of Utkal Allumin
(0.00)
  Dividends paid on redeemable cumulative preference shares    
 
Dividends paid to owners of the Company
- (60,178.82)
 
Interest paid
(872.86) (1,827.63)
       
Net Cash Flow from/(used in) Financing Activities
 
(872.86) (1,35,706.45)
       
Net Increase/(decrease) in cash or cash equivalents
 
(5,246.71) 7,825.01
       
 
Cash and cash equivalents at the beginning of the year
10,000.98 2,175.97
       
  Cash and cash equivalents at the end of the year
4,754.27 10,000.98

43
The Odisha Mining Corporation Limited
Statement of Changes in Equity for the periods ended 31st March, 2018

A. Equity Share Capital

(Rupees in Lakh)
Changes in equity
Balance as at March
Balance as at April 1, 2016 share capital during
31, 2017
the year
3, 3,14
145.48 - 5.48

(Rupees in Lakh)
Changes in equity
Balance as at March
Balance as at April 1, 2017 share capital during
31, 2018
the year
3, 3,14
145.48 - 5.48

B. Other Equity
(Rupees in Lakh)
Reserves and Surplus
 
Capital reserve General Reserve Retained earnings
2,21,87
Balance as at April 1, 2016
1,770.69 7.67 3,46,219.42
Profit for the year    
77,639.09
Other Comprehensive Income    
(614.78)
Total Comprehensive Income    

44
 77,024.31
Dividend (including tax on dividend)    
(60,178.82)
8,92
Transfer of profits of the year to General Reserve  
5.17 (8,925.17)
2,30,802.
Balance as at March 31, 2017
1,770.69 84 3,54,139.74
Profit for the year    
(46,348.37)
Other Comprehensive Income    
2,667.74
Total Comprehensive Income    
(43,680.63)
Dividends    
-
Transfer of profits of the year to General Reserve  
- -
2,30,802.
Balance as at March 31, 2018
1,770.69 84 3,10,459.11

45
 CHAPTER 5
DATA ANALYSIS & INTERPREATION

46
CURRENT RATIO:-
Current Ratio establishes the relationship between Current Assets and Current Liabilities;
it attempts to measure the ability of a firm to meet its current obligation. The measure
Components Current Assets are inventories trade receivables cash and cash equivalent and short
term loan and advances. The measure Components of Current Liabilities are short term
borrowing trade playable and short term provisions.

Formula: Current Ratio = Current Assets/ Current Liabilities

2014 2015 2016 2017

Current Assets 581673.82 650648.48 507846.72 457338.41
Current Liabilities 93743.37 223666.68 118076.36 56644.31
Current Ratio 6.20 2.91 4.30 8.07

CURRENT RATIO

9
8
7
6
5
4
3
2
1
0
2014 2015 2016 2017

Interpretation:

+Ve Point: From the graph and result, I found that the Company is in a very stable Current
Ratio during the 4 year. The Ratio decreases bellow to which is a good sign for the Company
and Company has the paying capacity for the current liabilities.

-Ve Point: However in some year like 2017 & 2014 during that period ratio much higher the
Current Ratio that much than the idle ratio.

47
 Quick/Acid/Liquid Ratio

8
7
6
5
4
3
2
1
0
2014 2015 2016 2017

It shows that the Company is having idle current assets in its hands without proper utilization.
The Company may utilize the same other profitable other venture. From the analysis we found
that the reason of the current assets is due to decrease in fixed assets in 2017compared others.
QUICK/ACID/LIQUID RATIO:-
Quick Ratio is also known as acid- test ratio or liquid ratio the term 'liquidity' refers to the
ability of a firm to pay its short term obligations as and when they become due. The two
determinants of current ratio as a measure of liquidity are current assets and current liability.
Current Assets include investors and prepaid expenses which are not easily convertible into cash
within a short period. It is defined as the relationship between quick or liquid assets and current
or liquid liabilities.
Formula:Quick Ratio = Quick Assets (Current Asset-Inventories)/ Current Liabilities

Particular 2014 2015 2016 2017

Quick Assets 553809.26 608570.41 448769.63 400459.51
Current Liabilities 93743.37 223666.68 118076.36 56644.31
Quick Ratio 5.91 2.72 3.80 7.07

7.07
5.91

3.80
2.72

Interpretation:

48
 Quick assets are much more comparing to the current liability in the organization. The
ratio gives a signal those quick assets increase in a significant way over a period of time
.According to the rule thumb this ratio should be 1:1 but the year 2017 this ratio is more than
7% .Organization should reconsider the working capital management system.

ABSOLUTE LIQUID/CASH RATIO:-

Absolute Liquid Ratio is also called as Cash Position Ratio or Over Due Liability Ratio.
This ratio established the relationship between the absolute liquid assets and current liability
Absolute Liquid Assets include cash in hand cash at bank and marketable securities or temporary
investment. The Optimum value for this ratio should be one，i.e.1:2.It indicates that 50% worth
absolute liquid assets are considered adequate to pay the 100% worth current liabilities in time. If
the ratio is relatively lower than one it represents that the company's day-to-day cash
management is poor .If the ratio is considerably more than one the absolute liquid ratio
represents enough funds in the form of cash to meet its short term Obligations in the time. The
Absolute Liquid Ratio can be calculated by dividing the total of the Absolute Liquid Assets by
total Current Liabilities.
Formula: Absolute Liquid Ratio= Absolute Liquid Assets/Current Liabilities
Absolute Liquid Assets=Cash and Cash Equivalents + Fixed Deposit

Particular 2014 2015 2016 2017

Absolute Liquid 409274.12 407211.45 285256.78
Asset 115390.42
Current Liabilities 93743.37 223666.68 118076.36 56644.31
Liquid Ratio 4.37 1.82 2.42 2.04

49
 Absolute/Cash Ratio

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2014 2015 2016 2017

4.37

2.42
1.82 2.04

Interpretation:

In this series analysis is clearly represent that the organization is planning to set up cash
management system within the organization .It was around 4% in 2014and decrease in 1% in the
2015.

50
 CHAPTER- 6
FINDINGS, CONCLUSION & SUGGESTION

51
1.1 FINDINGS
1. The current ratio analysis we found that the reason of the current assets in due to
decrease in fixed assets 2017 compared others.
2. The quick assets are much more comparing to the current liability of the
organization.
3. Absolute liquid ratio around 4% in 2014 & decrease 1% in 2015.
4. The mining industry which is very much cares rich will always have a lower debt
equity ratio.
5. In the year 2016 & 2017 it decrease through the time series analysis it is setup that
profitability before tax ratio is dissatisfactory.
6. Net profit ratio gives the dissatisfactory results of the analysis.
7. In the year 2016 & 2017 it is not improved and achieved 40% & 33% after that it is
decrease.

52
5.2 CONCLUSION
1. The financial analysis plays an important role for helping the financial managers and top
management of the company to plan and control their financial structures operation.
2. An efficient and accurate analysis would highlight the shortcoming in management in terms
of financial matter such as income, expenditure, export, profitability etc.
3. Further the availability of fund: - requirement of working capital etc. can be correctly
ascertained to have better fund management. These can be re-examined and integrated to
evolve the idea which can give efficient financial decision.
4. As per my observation OMC has been highly efficient in managing its profit in consistent
manner. Largely because of its well-planned procedure, end technology and skilled
employees.
5. Thus, it can be concluded that from past few year performance of the company is extra
ordinary and the company has left no stone unturned to maintain its position and has shown a
continuous increase in the sales with continuous decrease in expenses.

53
5.3 SUGGESTION
1. Less practical knowledge about day to day mining activities for which it trusts on the
contractors. So proper experience may lead to minimize the cost of production.
2. In order for effective mange of working capital management reserve and surplus should be
used properly.
3. Technological up gradation must be made in order to increase production volume.
4. From the study it becomes clear that following suggestion will help in the further growth of
company and its brand equity.
5. Expand the distribution network in the geographical area to maintain business growth.
6. Considering the volume of the business of the company, the company should indebt more
professionals into its stream.

54
ANNEXURE

55
 (Rupees in Lac.)
Particulars Not Figures as the Figures as at the end of Figures as at date
e end of the the previous reporting of transition to
No, current period March 31, 2016 Index As April 1,
reporting 2015
period March
31, 2017
ASSETS
1 Non-Current assets
(a) Property, Plant and Equipment 5 13,087,35 6,360,19 6,396,55
(b) Capital work in progress 5 5,630,22 9,321,27 61,134,10
(c) Other Intangible assets 5[i] 34,850,41 - -
(d) Intangible assets under development 5[ii] 12,286,71 - -
(e) Financial Assets
(i) Investment 6 39,902,59 37,885,18 38,335,90
(ii) Loans 7 72,512,62 1,04,955,21 70,605,33
(f) Deferred tax assets (Net) 8 4,283,58 3,793,84
(g) Other non-current assets 9 33,015,79 31,562,26 29,187,31
Total Non-current assets 2,11,285,69 1,94,368,69 154,453,03
2 Current Assets
(a) Inventories 10 56,878,90 59,077,12 42,078,07
(b) Financial assets
i. Tread receivables 11 10,878,04 6,604,21 3,643,15
ii. Cash and cash equivalents 12 10,000,98 2,175,97 6,498,30
iii. Bank balances other than (II) 12 1,05,389,44 2,83,080,81 4,00,713,15
above
iv. Loans 7 39,324,50 33,105,59 16,206,58
v. Others 13 1,53,630,10 20,105,59 27,581,35
(c) Current Tax Assets (Net) 14 65,528,66 56,026,92 1,00,030,65
(d) Other current assets 15 15,977,79 47,067,48 53,897,23
Total Current assets 4,57,338,41 5,07,846,72 6,50,648,48
TOTAL ASSETS 6,68,624,10 7,02,215,41 8,05,101,51
EQUITY AND LIBILITIES
Equity
(a) Equity Share capital 16 3,145,48 3,145,48 3,145,48
(b) Other Equity 17 5,86,713,28 5,69,867,78 5,67,057,78
Total Equity 5,89,858,76 5,73,013,26 5,70,203,26
LIBILITIES
(a) Provisions
(b) Deferred tax liabilities (Net)
1 Non-current liabilities
(a) Provisions 18 12,010,39 11,125,79 11,231,57
(b) Deferred tax liabilities 8 10,110,64 - -
2 Current liabilities 22,121,03 11,125,79 11,231,57
(a) Financial Liabilities
i. Borrowings 19 73,700,00 150,200,00
ii. Trade payables 20 24,582,86 28,458,08 14,876,26
iii. Other financial liabilities 21 5,711,50 6,223,39 8,933,53
(b) Other current liabilities 22 25,809,96 9,273,16 49,551,34
(c) Provisions 18 539,99 421,73 105,55
Total Current Liabilities 56,644,31 1,18,076,36 2,23,666,68

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 TOTAL EQUITY AND LIABILITIES 6,68,624,10 7,02,215,41 8,05,101,51

THE ODISHA MINING CORPORATION LIMITED, BHUBANESWAR

The Odisha Mining Corporation Limited
Statement of Profit and Loss for the periods ended March 31, 2017 and 2016
(Rupees in Lac.)

Particulars Note Figures for the Figures for the

No. current reporting pervious reporting
period March 31, period march
2017 31,2016
I Revenue from Operations 23 2,33,142,96 1,54,808,04
II Other Income 24 37,413,71 48,122,37
III Total Income (I+II) 2,70,556,67 2,02,930,41
IV Expenses
(a) Changes in inventories of finished goods, stock-in-Trade and work-in-
progress 25 1,794,08 17,037,32
(b) Employee benefits 26 25,064,91 16,009,09
(c) Finance costs 27 882,60 3,324,37
(d) Depreciation and amortization expense 5 7,643,67 922,58
(e) Excise duty 8,11,22 165,77
(f) Other expenses 28 1,02,309,41 99,721,15
Total expenses(IV) 1,38,505,89 1,03,105,64
V Profit/(loss) before exceptional items and tax (III-IV) 1,32,050,78 99,824,77
VI Exceptional items
VII Profit/(loss) before tax(V-VI) 1,32,050,78 99,824,77
VIII Tax expenses
I. Current tax 42,692,10 33,071,76
II. Deferred tax 14,719,59 55,79
III. Taxes of earlier years 3,000,00 3,000,00
IX Profit/(loss) for the period from continuing operations (VII-VIII) 54,411,69 35,015,97
X Profit/(loss) from discontinued operations 77,639,09 63,808,80
XI Tax expense for discontinued operations
XII Profit/(loss) from discontinued operations (after tax) (X-XI)
XIII Profit/(loss) for the period (IX+XII) 77,639,09 63,808,80
XIV Other Comprehensive income 614,78 819,98
A (I) Items that will not be reclassified to profit or loss
(a) Re-measurement of defined employee benefit plans 940,14 1253,95
(II) Income tax relating to items that will not be reclassified to profit or loss 325,36 433,97
B (I) Item that will be reclassified to profit or loss
(II) Income tax relating to items that will be reclassified to profit or loss
XV Total Comprehensive income for the period (XIII+XIV) (comprising Profit /
loss) and other Comprehensive Income for the Period 77,024,31 62,988,82
XVI Earning per equity share (for continuing Operation)
1) Basic (Rs,) 2,448,73 2,002,52
2) Diluted (Rs,) 2,448,73 2,002,52

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 XVI Earning per equity Share (for discounted operation)
I
1) Basic (Rs,)
2) Diluted (Rs,)
XVI Earning per equity share (for discounted and continuing operation)
II
1) Basic (Rs,) 2,448,73 2,002,52
2) Diluted (Rs,) 2,448,73 2,002,52

BIBILIOGRAPHY
BOOKS AND REFERENCE
Financial Managements, (M Y Khan, P K Jain)

WEBSITE & LINKS

https://omcltd.in
www.google.com
Annual reports of OMC

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