Definition and Importance of Financial Function

INTRODUCTION
Definition and importance of financial function
Finance is the process of commission of accumulated funds to productive use.

Finance helps to direct the flow of economic activity and facilitate its smooth operation.
Finance is the agent that produces this result.
There are many definitions of finance of all the best was of how ward and upon as
that administrative area of set of administrative functions in an organization which have to
do with the management of flow of cash. So that the organization will have the means to
carry out its objectives as satisfactorily as possible and at the same time meet its
obligations as they become due.
Finance is concerned with the task of providing funds needed by the enterprise on
the terms that are most favorable towards the attainment of organizational goals and it
covers financial planning, forecasting of cash receipts and disbursements, rising of funds
and financial control. The area of operation manager values from one company to another
and industry-to-industry etc.,
Significance of financial management:
Financial management is the managerial activity, which is concerned with the

planning and controlling of the firm’s financial resources.
The subject of financial management as of immense interest both to the

academicians and the practicing managers. The practicing managers all interested in these
subjects became among the most crucial decisions of the firm all those which result to
finance, and on understanding of the theory or
Financial management provides them with conceptual and analytical insights to

make the decisions skillfully. As a separate activity as discipline it is of recent origin, it
was a branch of economics till 1890. Today financial management is recognized as the
most important branch of business administration.
Financial management may be defined as that part of management which is

concerned mainly with raising funds in the most economic and suitable manner, using
these funds as profitably as possible planning future operations and controlling current
performance and future developments through financial accounting, cost accounting,
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budget statistic and other means. If guides investments where opportunity is the firms
operations and projects and is continually concerned with achieving and adequate rate of
selection on investment as this is necessary for survival and attracting of new capital.
According to Howard and Upton financial management involves the application of

general management principal to a particular financial operation.
N.G.Wright says financial management is intimately it self-woven into the fabric

of the management itself. Its central role is concerned with the way in which the resources
of the business are employed and how the business is financed. He divides financial
management into 3 main areas.
1. Decisions on the capital structure.
2. Allocation of available funds to specific uses.
3. Analysis and appraisal of problems.
Financial management includes planning of finance, cash budgets and source of

finance Erza Solman and John Prigle insists that financial management must attend to
investment decisions because it is these decisions, which affect, in a large measure the
future of a firm.
Hunt William and Donald Son have called financial management “as resources
management became in a large organization, the finance manager is the member of the
planning organization performing and controlling the financial affairs of the enterprise”.
Importance of the financial management
The financial management is of great importance in the present day corporate

world. It is science of money, which permits the authorities to go further.
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INDUSTRY PROFILE
Sugarcane is one of the important crops for the INDIAN FARMER. Sugar the
main products that we get from sugarcane other products molasses for distillery, filter
cake, mud an organic manure &green leaves with tops for cattle feed are also available as
by products, because of its multi uses sugarcane has played crucial role in Indian economy
with RS.20, 000 cores TURNOVER &WITH 450 SUGAR MILLS PROVIDING
assistance to 45 million sugarcane farmer and 2million workmen directly and indirectly.
In AP sugar industry is an important agro based industry occupying the SECOND
position next to textile industry. The annual cultivated area is about 1.99 lakhs hectares
with a yield of 149.45 lakhs of tones during 1966- 1997.At present there are 36 sugar
factories in the state and 50% of them are in co-operative sector. Actually the work sugar
derived from a Sanskrit word “SHAKRA”.
What is Sugar?
Sugar is the most common sweetener in the world. It is a carbohydrate, sucrose, a
disaccharide formed by joining carbon atom 1 of a glucose molecule with carbon atom 2
of a fructose molecule. Sucrose is a key product of photosynthesis and thus makes its way
into almost every part of the human diet; it is also nearly unique in that humans consume it
in unadulterated crystalline form.
Since about 8000 B.C humans have cultivated sugar cane (Saccharin officinarum)
to extract sucrose from its juice. In a warm, moist climate, sugar cane will grow an inch a
day for weeks and when ripe cane contains the most juice it is almost two inches in
diameter.
The cane must be chopped, ground, and immersed in water quickly, before the juice
has a chance to rot. The water is then heated and evaporated, leaving the solution
supersaturated with sucrose. As the water cools, the sugar begins to crystallize, leaving behind
a thick, dark substance called molasses, which cannot be crystallized further but is a cheap
way to sweeten foods (onto make rum).
The crystals left by evaporation are called “raw” sugar because they still contain
little bits of cane and other impurities. They are now stable, however, and very economical
to transport. The remaining steps, which repeatedly heat and cool the raw sugar as it
progresses towards the “refined” state, can occur far from the cane fields. In the modern
world, raw sugar has often crossed national borders in search of refineries.
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A Brief History of Sugar:
Cane sugar first made its way to Europe in the early years of the second
millennium, but for centuries, only the very rich could afford to import it. Most Europeans
sweetened their bland diets with honey, and it was this substance to which “sweetness”
was attached; sugar was just another “spice” to be used in combination with others. One
fourteenth- century recipe for “Oyster in gravy Bastard,” for example, instructed the cook
to combine sugar with shellfish, ale, bread, ginger, and saffron.
Those who could afford sugar could afford a lot of it, and sugar had purposes other
than flavoring. Kings and nobles often finished their feasts by presenting fantastically
elaborate sugar sculptures. The size, scale, and complexity of each “subtlety” reflected the
power and wealth of the noble who served it. Some depicted Biblical stories or historic
battles, while others dazzled with the virtuosity of an artisan a sailing ship with working
cannons, a scale model of Oxford University or a stag with an arrow sealing a “wound”
that “bled” wine.
Just as they did with other spices, the mercantilist empire planners of Europe
dreamed of possessing a limitless supply of sugar. The Spanish, Portuguese, French, and
English all established empires in the New World in order to cultivate cane and thus corner
the market for the commodity. As supply from the colonies affected the European market,
the price drifted gradually downward, and the new merchant classes began to purchase and
use sugar in small amounts. While they did create some smaller subtleties of their own, the
middle class found more use for sugar in pastries and sweet desserts. Within the classes
below the aristocracy, sugar became a demonstration of social status, but the price of sugar
had not yet fallen far enough to let ordinary citizens enjoy it.
The European governments, following mercantilist theory, maintained high tariffs
and restrictive trade policies on sugar from other empires. The resulting high prices gave
colonial sugar planters wealth that rivaled that of royalty. Ironically, as historian Eric
Williams explains in Capitalism and Slavery, the planters’ own riches ended their
dominance of the economic system. The European banks in which the planters deposited
their wealth invested in the beginnings of the Industrial Revolution.
That economic and social upheaval transformed the traditional workday, in
which patterns of work had followed the sun, into one in which the needs of machines and
the ticking of clocks regulated the rhythm of life.
The Royal East India Company began to import tea leaves from China in the
late seventeenth century. The English, long fans of ale, quickly developed a taste for the
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new drink; the Company’s imports rose from twenty thousand pounds in 1700, to over two
million pounds in 1800; and smuggling, the government unhappily estimated, brought in
just as much. Tea could be bitter, however, so the English became consumers not of tea
“neat” but of tea with sugar. For the worker, sweetened tea proved a potent concoction; as
sugar’s calories kept them fueled; while its caffeine kept them awake. As factory life
altered the lives and eating habits of more and more workers, they began to demand sugar
at a lower price and in higher quantities than the mercantilist system could supply.
In part because of pressure from sugar-hungry industrialists, tariff policy began to
change during the late Eighteenth century. Backed by philosophers and economists who
were developing the new theory of free Trade, factory owners argued that high tariffs
prohibited the most efficient use of economic resources, including sugar.
Colonial planters desperately tried to use their remaining political power to
maintain the protection they enjoyed from foreign competition, and they complained that
industrialists had betrayed fellow aristocrats to placate the working poor that toiled in their
new factories.
They were right. Manufacturing interests had gained influence with economic
power, and used it to convince Parliament to make sugar available at prices that working
Britons could afford. At the same time, the British government decided that levying a low
tariff on a large amount of sugar would generate more revenue than a high one, on a
relatively small amount. The result was a low price of sugar that made its use possible, not
only in tea, but also throughout the ordinary English diet. What had previously been an
aristocratic delicacy had now become an irreplaceable source of calories and satisfaction
for the middle and working classes.
As the United States began to industrialize, slowly at first, in the antebellum years,
then much more rapidly after 1865, it also developed a noticeable appetite for sugar. In the
last quarter of the nineteenth century, as industrialization transformed the society,
America’s per-capita consumption of sugar skyrocketed. Just as importantly, the growing
Federal government also came to rely on sugar as it took in enormous sums from customs
duties on sucrose. Thus measuring sugar’s purity at the border became a problem of
immense political and scientific importance.
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COMPANY PROFILE
Company History
“SNJ SUGARS & ALLIED PRODUCTS LTD” (SSAPL) is a public limited
company promoted by M/S Mohan Breweries & Energy Efficient Diffuser Technology, 20
MW Power Plant involving generation of power through Renewable Energy Sources and
70 KLPD Distillery for manufacturing of 40 KLPD Fuel Ethanol & 30 KLPD Extra
Neutral Alcohol.
It is starting cane crushing during 2003. The licensed and installed capacity of the
factory was 25000 T.C.D., which was has been expended to 45000 T C D in the year of
2005. The authorized share capital of the company is 5, 50, 00,000 equity share or Rs 10/-
each.
Sugar plant
The sugar plant has been established in 2002 and starting cane crushing in 21 st ,
January 2003 with an installed capacity of 2500 ton per day. Later, this capacity has been
expended to 4500 ton crushed per day. Sugar cane is crushed by cane diffuser machines. It
is the germen technology. This plant is the second plant used this technology.
Power plant
Power generation has been successfully started in 13 th’ January 2003 with a installed
capacity of 20.4 MW per day. The generated power is exported to A.P. government as per
requirements of A.P. Electricity Bard. While generating power, cane trash and tops, cane
tipple are used as raw material, which are taken from neighbor villages.
Distally plant
This plant has been started in the year of 2005 onwards commercially with the
capacity of 35K.M from chittoor and about 60 K.M from the Tirupathi Town abutting
national high way 73 from Mumbai to Chennai.
The sugar cane is supplied from the following 6divisions consist of 380 villages.
1) S.R. puram
2) Balaja kandriga
3) Pelar
4) Bakara pet
5) Penumur
6) Kothapalli mitta
There are about8, 826members and about 3000farmers supplying sugar cane. The
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factory start cane crushing only during crashing season (November to April) and during
the off season (March to October), the factory refines the raw sugar, which is imported
from foreign countries. The various details of cane crushing are as follows.
Staff
Sagar sugers Allied product ltd has around 200 employees both skilled and unskilled
employees fall under three categories i.e., executives, technical and non-technical.
The executives are qualified with the respective degree required for the designation.
Employees with experience and necessary skill are also promoted as executives. Technical
Cades have the responsibility of supervising the productions process.
The Various Details of cane crushing are as follows:

2013-14 2014-15 2015-16 2016-17 2017-18
Sugar Cane (in 322485.56 480233.62 384433 105205.305 78770.44
Metric tons)
Sugar Packed( in 276540 424826 379804 100174 66797
Quintals)
Sugar Recover(%) 8.57% 8.84% 99.88% 9.52% 8.45%
Sugar Cane Rate 1220 1110 1076 1320 2050
Molasses 160174 236290 170426 44913 38742
Molasses recovery 5.02% 4.92% 4.44% 4.27% 4.91%
Raw Sugar(MT) 74347 16372.46 11345.8 3857.215 20764.496
Raw Sugar 95% 95% 95% 95% 95%
Recovery
The sugar rates per quintal for various years are as below
2014 Rs.1827
2015 Rs.1316
2016 Rs.1423
2017 Rs.2066
2018(April) Rs.2800
2018(June) Rs.2450
Water is drawn from 7 bore well drilled in the factory premises. These factory
effluent treatment facilities as required under the law.
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Total paid up share capital was Rs.2633.33 Lakhs in 2013-14, Rs.5140.16 in 2015-
16, which is constant during the study. But, the authorized capital is gone up to 7000
crores.
The factory arranges the following loans with are standing against the sugarcane
growers as on 31 march 2014.
1. Seed Loans
2. Factory Loans
3. Pesticides Loans.
ORGANIZATIONAL CHART
CHAIRMAN
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General Manager
Asst. General Manager
System
A system is series of functions or activities within an organization work together

for the aim of the organization. System of an organization refers to all rules, regulations
Production Accounting HR
and procedures, both
Department formal and informal related to
Department different departments. This will
Department
specify the powers and authority of a particular department.
They have HR system, LAN system, Purchase and Stock system is Weighted
Manager Senior Accounting Senior
Average Method.
Personal
Strategy
Strategy rules to a set of decisions actions aimed at gaining competitive

Skilled Accountants Skilled
advantages. The concept of strategy includes purpose, mission, objectives, goals, major
action plans and policies. A strategy reflects company’s awareness of how, when and
Semi-Skilled
where it should compete, against whom it shouldClerks Unskilled
compete and for what purpose it should
compete.
Unskilled
Sagar Sugars & Allied Products Limited has the “Low Pricing Strategy” The
company has adopted ‘diffuser technology’, in which they can store the sugar cane juice
for a week. With the help of this technology they can store when they have more raw
material and can produce sugar if they don’t have the sugarcane also. This is the second
company in India which has adopted the diffuser technology. The technology which has
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used in the organization reduces the man power. Hardly two persons can run the entire
Distillery with the help of two systems. They used to operate entire process through these
systems.
So with the help of the technology the organization reduced the man power. So
they can reduce the production price. The electric power which the organization is using is
produced by the firm itself as a byproduct while producing the sugar and Extra Neutral
Alcohol. By using all these company reduce the production cost.
Pricing Strategy of the Company

 Raw materials of sugar cane
 Transportation
 Conversation Process
 Packaging material
 Final Product Price
Skill
The skill is one of the most crucial attributes or capabilities of an organization. The
term “skill” includes those characteristics which most people are to describe a company’s
distinctive competence.
In SSAPL all the employees at different levels are following multi disciplinary
skills in order to complete their works successfully and for the development of their
organization.
COMMUNICATION STYLE:
M.D
ß
Directors work
ß
Department Head
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ß
Group Head
ß
Head of Department
ß
Manager
ß
Deputy Manager
ß
Staff
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Shared Value
Guiding concepts, fundamentals ideas around which a business is built – must be

simple, usually stated at abstract level great meaning inside the organization even through
outside may not see or understand them.
It refers to a “set of values and aspiration that goes beyond the convention formal
statement of corporation objectives”. Shared values are the fundamental ideas around
which a business is built. They are its main values.
sugar sugars & Allied Products Ltd, they presents their faith believe core values
they strive towards the achievement of their customer satisfaction, to provide safe working
condition, to maintain discipline at all levels, to provide a friendly, congenial working
atmosphere, employees satisfaction to the maximum. Their main concern is for their
employees and their welfare. Equal importance is given for the environment protection and
towards production.
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SWOT ANALYSIS
Strength
 Good Technology
 Dedicated officers and staff
 Fast Communication system
 Modern Technical machinery
 Good Quality of Product
 Customized Products with minimum lead time
Weakness
 Change of technology is difficult to adopt since it cost for single machinery
 Centralized management decision making takes time.
Opportunities
 Getting the quality raw material due to the high competition in the suppliers
 As the demand for the sugar is increasing the company can increase its production
and can increase its sales.
Threats
 Competition from local and regional companies
 Fast change of Technology
 Competitiveness in Pricing
 Unavailability of required number if skilled labour in the respective areas with
innovative skills in technical and similar related fields.
 The cost of the raw material sugar cane ahs been increased in turn of the cost of
product is increased.
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PRODUCT PROFILE
Sugar Cane
Sugar cane cultivated by the growers or promising varieties in terms of sugar content
and yield. Cultivation techniques maturity of (decided by the cane personnel) harvested
and supplied to the factory in trucks fresh less tops and roots. Trucks are weighed with
cane on Weigh Bridge and unloaded on the moving cane carrier. Mechanical un-loaders
do unloading. Again empty truck is weighed to assertion in the weight of cane unloaded.
Millings
Provided with a tandem of four mills land each mill is provided with three rollers.
On the cane carried for cane preparation cane knives driven by motor and followed by a
Fibrizer driven steam turbine are provided to chop the cane into small pieces and fiber to
make the milling move efficient and to extract maximum juice from the cane. To make
this process more effective assured quantity of water is added to Mills. After extraction of
juices the waste materials is called bagasse.
Boilers
Provided with 2 nos. of boilers of each water evaporation capacity of 25 Mts. Per
hour steam at 300 p sig (21 Kgs). Steam is used for driving the Fibrizer, mills by turbines
and generator power, by steam turbine alternator. For boilers main fuel is bagasse.
Surplus bagasse is sold to paper industries.
Clarification
Juice extracted form sugar cane in mills is weighted in automatic weighing scale.It
is preheated in juice heater to 50-750.Then it is limited and sulphieted simultaneously.
Juices will be coagulated form and will not settle. To induce settings cheaply and
abundantly available positive is to be added i.e. namely time in slurry form, also called
milk of lime, by using addition of such alkaline medium is again brought down to natural
pH medium by bubo ling of sulphur dioxide gas. This gas is produced in sulphur burners
and bubbled in preheated juices.By the aid of compressed air passing through sulphur
burners. As such a juice is kept at slightly alkaline medium say 701 to 7.2. Then this
treated juice is heated again in other row of juices heaters to 102 C and to send to graver.
Graver is a big tank where settling is taking place.Continuously, such juices is sent and
drawn from it with the detention time of juices of about 330 hours, in ‘u’ tube principles.
Evaporation
In graver juices will be well settled and will have a golden yellow color of 7.0pH
(Neutral).This clear juice will contain more than 85% of water and the remaining soiled
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(Sugar Maximum + a little sugar). In evaporators about 75% of water is removed and
made syrup. This consists of one vapor cell and is followed by four bodies. Boiling is done
under vacuum using exhaust stream from turbines tubes emerging out through tube plates
and above this calandria vapor space or shell. Steam circulated through calandreia and
heating the outer point of huices is brought well below its origin boiling point. In the vapor
cell alone exhaust steam is admitted into the calandria produced vapor to its subsequent
body and soon.Vacuum is helping is drawing vapor from the preceding body and this
boiling is called multi effect boiling and maximum fuel economy.Thus when juices is
emerges out from last body it will be a syrup, losing about 75% of water.
Vacuum filter
Mud settled in graver is taken in rotary filters to extract juices from it and waste is
called filter cake sent out and used as manure.Extracted juices is again mixed juices from
mills after weighment tank and takes the path of process along with mills juices in acyclic
form.
Sulphitation and syrup
The syrup from evaporator last body is again sulphited to beach to get white sugar
and sent to pan supply tanks.
Pans
Pan bodies are similar to evaporators in construction with different design.
Materials are invidiously boiled in four numbers under vacuum. When the syrup is further
boil in pans. When the super saturation point reaches crystals come out its is again boiled
up by addition kept in pan and the rest 2 portions sent to receivers. Then again pan is
boiled. This process will help growth or crystal as desired by us.
Three boiling are bone A, B, C.These are called massecuites. All these mass cuties
(sugar + molasses) are purged in centrifugals respectively sugar and molasses are
separated.Pans are boiler on vapor produced form vapor cell.
Centrifugals
Such made massecuties are dropped in crystallizers (a storage tank with stirring
mechanism). From crystallizes taken into centrifugal machines and sugar and molasses
separator.Centrifugal machines contain a basket fitted with mesh and screen of small
opening and will not allow sugar crystals to pass through but only molasses.When one
machine changed with massecuities and spun at 150 RPM molasses gets out and collects
in a tank.Sugar remains in basket washed and dried by steam.
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REVIEW OF LITERATURE
Tools for the evolution of financial analysis and performance:
There are three basic financial statements namely balance sheet, profit and loss
account and statement of changes in financial position. The information contained in these
statements are used by management creditors and others to form an opinion and judgment
about the operating performance and financial statements gives better insight about the
financial strength and weakness of the firm if they properly analysis the information given.
In the statements management should be particularly interested I knowing the financial
strengths and weakness of the firm, to make their best use and to be able to sort out the
financial weakness of the firm to take suitable corrective actions. The future plans of the
firm should be laid down in view of the firm’s financial strength and weaknesses; thus,
financial analysis is the starting for making plans, before using any sophisticated
forecasting and budgeting procedures.
Financial analysis seeks to spot light the significant facts and relationships
concerning management performance, corporate efficiency, financial strengths and
weakness and credit worthiness of the company. The tools of the analysis are used to study
accounting data so as to determine the continuity of the operation policies, investment
values of business, credit ratings and testing the efficiency operations. The finance
manager must equip himself with the different tools analysis in order to reach rational
decisions for the firm.
These tools of analysis are helpful to the financial manager in carrying out his
planning and controlling functions with the help of tools of financial analysis the financial
manager can rationalize this decision and reach the business goals easily.
The most important tools for evolution of financial performance and analysis are:
1. Comparative balance sheet
2. Commons size balance sheet
3. Working capital
4. Ratio analysis
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Ratios as tools of financial analysis
A ratio is defined as “the indicated quotient of two mathematical expressions” and as

the relationship between two or more things. In financial analysis a rate is used an index
on yardstick for evaluating the financial position and performance. The information in the
balance sheet and profit and loss account should be analyzed in more meaningful way by
the technique of ratio analysis through financial analysis. We should try to seek answers
for the following questions.
 Is the firm in a position to meet its current obligations?
 What sources of long-term finance do the firm and what is then relationship
between them employ? Is there any danger to the solvency of the firm due to the
employment if executive debt?
 How efficiently does the firm use its assets?
 Is the earning of the firm adequate?
 Do investors consider the firm profitable and sage for the propose of investing their
money in the shares of the firm?
Financial analysis may not provide answers to all these questions, but it indicates
what can be expected in the future form the present details.
Comparison:
The financial position and performance of a firm have to be compared over . It is

very important in evaluating changes and trends in the firm. When financial ratios are
compared over a period, it gives an indication of the direction of change and reflects
whether the firm financial position improved, deteriorated or remained constant. So the
easiest way to evaluate the performance of a firms comparing the present ratio with the
past ratios.
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Ratio analysis
One of the important financial tools which have come to be used very frequently
for analyzing the financial strengths and weaknesses of the enterprises is ratio analysis.
Ratio analysis is the systematic process of determining and interpreting the

numerical relationship of various pairs of items derived from the financial statement of
business – absolutely figures of any aspect of business do not convey much tangible
meaning. For example project of a company expressed, as a figure say is 50 lakhs is not as
the same profit (on a ratio of sales or capital employed) It is very important that the base
selected for each ratio is relevant to the numerator. The two must such that one is closely
connected with and influenced by the other to express cash balance as a ratio fixed assets
would age an academic ratio with no useful purpose, where as fixed assets as ratio of total
assets would be significant.
Interpretation
Ratios are considered as one of the useful aids available to the management in
assessing position and drawing conclusions efficiency and financial status of business. But
a ratio is an aid and should be use in conjunction with other formation. Again single ratio
may present a picture leading to wrong conclusions. Therefore they have to be alongside
other connected ratios. For examples the ratio of profit to variable cost may show a
remarkable improvement over the previous year. But ratio of the profit to fixed cost to
total may be deteriorating correspondingly. Therefore ratios are to be used with prudence
and skill.
Types of ratios
Ratios are variously classified under the different systems based on the end use as
well as the nature of the base adopted generally ratios can be classified into four types.
1. Liquidity ratios.
2. Leverage ratios
3. Activity ratios
4. Profitability ratios
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1. Liquidity ratios
Liquidity ratios provide test to measure the ability of the firm to cover its short-
term obligations out of its short-term resources. Interpretation of liquidity ratios provides
considerable insight into the present cash solvency of firm and its ability to remain solvent
in of adversities. Two commonly used liquidity are
1. Current ratio
2. Quick on acid test ratio.
2 .LEVERAGE RATIOS
The leverage or solvency ratio refers to the ability of a concern to meet its long
term obligations. Accordingly, long term solvency ratios indicate firm’s ability to
meet the fixed interest and costs and repayment schedules associated with its long
term borrowings.
The following ratio serves the purpose of determining the solvency of the concern.
 Proprietary ratio
 Total liabilities ratio
3. ACTIVITY RATIOS
Funds are invested in various assets in business to make sales and earn profits.
The efficiency with which assets are managed directly effect the volume of sales.
Activity ratios measure the efficiency (or) effectiveness with which a firm manages
its resources (or) assets.
These ratios are called as “Turn over Ratios “because they indicate the speed with
which assets are converted or turned over into sales.
 Working capital turnover ratio
 Fixed assets turnover ratio
 Capital turnover ratio
 Current assets to fixed assets ratio
 Debtors turnover ratio
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4. PROFITABILITY RATIOS
The primary objectives of business undertaking are to earn profits. Because profit is the
engine, that drives the business enterprise.
1. Net profit ratio

2. Return on total assets
3. Reserves and surplus to capital ratio
4. Earnings per share
5. Operating profit ratio
6. Price-earnings ratio
7. Return on investments
8. Administrative expenses ratio
9. Return on shareholders’ fund ratio
COMPARATIVE FINANCIAL STATEMENT
Comparative financial statements give information about the nature of changes

influencing financial position and performance of an enterprise. It is a crude guide to
appreciate the movements of the key financial statistics. These statements help the
management in making forecasts for the future.
The following are the advantages of comparative financial statements:
1) The comparative statements not only show the absolute figures of various years,
but depict the extent of their increases or decreases between two or more dates.
2) In a single balance sheet the emphasis is on status whereas in a comparative

balance sheet it is on change. The changes are the result of operations, the
conversion of assets, liability and capital forms into others the various interactions
among assets and liabilities (and capital).
3) It is the true that financial statements are a useful source of external reporting and
help the users in more than one way. But the comparative statements are more
useful because they may be used to study the nature and trends of current changes
in an enterprise.
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COMMON SIZE FINANCIAL STATEMENTS
Common-size financial statements are those in which figures reported are
converted into percentages to same common base. In profit and loss account, sales figure
is assumed to be equal to 100 and all other figures are expressed as percentages of sales. In
balance sheets the total of assets or liabilities is taken to be equal to 100 and all figures are
expressed as percentages of the total. Such statements are called common-size financial
statements
These statements facilitate the vertical analysis since each accounting variable is
analyzed vertically. It indicates the static relationship since relative changes are studied at
a specified.
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RESEARCH METHADOLOGY
Methodology is an intensive and purposeful search for knowledge and for the
understanding social and physical phenomenon. It is the method for the discovery of true
values in a scientific way. There are two sources of data.
1. Primary sources and
2. Secondary sources
The data collected from primary source is called primary data. The data collected
from secondary sources is called secondary data. In other words, the primary data are
those data which are collected a fresh and for the first time. Primary data happened to be
original in character. On the other hand secondary data are those data which have been
already collected by someone and which have already being passed through the statistical
process.
For the study of all objectives the following methodology is adopted. The data was
collected from already published sources.
The Sources:
a) Annual reports of the company.
b) Textbooks relating to the financial management.
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NEED FOR THE STUDY
Financial statements are prepared for the purpose of presenting a periodical review
of report by the management in business and result achieved during the period under
review. It reflects a combination of recorded facts accounting conventions and personal
judgments.
Financial analysis helps in assessing the financial position and profitability of the
concern.
23
SCOPE OF THE STUDY
Finance is the lifeblood of any organization. The future of any organization
depends on the ability of the organization to make use of its resources in the best way. The
information relating to the financial position of the company is of great interest to
management, creditors, investors and other to have a judgment about the operating
performance and financial position of the stakeholder groups.
24
OBJECTIVES OF THE STUDY
The purpose of current study is to analyze the financial performance of SNJ
ALLIED PRODUCT LTD., and to know the present financial position. Accordingly the
present work is the modest attempt in this direction to appraise the financial performance
of SNJ ALLIED PRODUCT LTD., by adopting various tools of financial analysis, funds
flow statements and other performance statements.
The main objectives of the study are as follows:
1. To highlight and evaluate the changes in the firm’s financial position.
2. To study and interpret the Comparative Balance Sheet of SNJ ALLIED PRODUCT
LTD.
3. To compare financial performance of present year with that of previous years.
4. To find out the operating efficiency of the organization.
5. To give appropriate suggestions for the better financial performance of SNJ

ALLIED PRODUCT LTD.,
25
LIMITATIONS OF THE STUDY
Despite completion of project work to the satisfaction, the objectives could not be
achieved due to the following limitations:
 The duration of the project is limited to a period of 2 months.
 The reliability of the study depends upon the available information furnished by
the officials.
 Financial accounting doesn’t take into account the price level changes.
 The study is conducted with the available data from the annual reports, internal
reports etc.,
 Figures wherever appearing are rounded to the nearest numerical.
 Due to unavailability of data, information pertaining to 5 financial years was only

considered.
26
DATA ANALYSIS AND INTERPRETATION
Analysis and interpretation of collected data is the heart of project work. Only after
analysis one can arrive at the various findings with the related problem identified. This
findings that have been arrived after analysis and interpretation helps to find out the
hidden solutions for the problem and give most appropriate suggestions for overcoming
problems.
The analysis and interpretation can be carried out by various techniques. These
techniques help in analyzing the large volume of data by establishing the quantity relation
between various caravels of data.
The techniques are involved
 Changes in working capital
 Ratio analysis
 Comparative balance sheet
 Commons size balance sheet
27
Table No 1
SCHEDULE OF CHANGE IN WORKING CAPITAL FOR THE YEAR ENDED

(2013-2014)
2013 2014 Changes in

Rs. Rs. working capital
Increase Decrease
Particulars (Rs) (Rs)
Current Assts
Inventory 55762138 91821066 36058928
Sundry debtors 6496711 3454410 3042301
cash and bank 3648490 4584931 936441
Deposits 12111184 32782471 20671287
Loans and advances and
prepaid expenses 9616257 16609002 6992745

Total Current Assets (a) 87634780 149251880
Current liabilities and
Provisions
Current liabilities 29082760 36979282 7896522
Provisions 4058402 4558958 500556

Total current liabilities
(b) 33141162 41538240

Working Capital (a-b) 54493618 107713640

Net Increase / decrease
working capital 53220022 53220022
107713640 107713640 64659401 64659401
Interpretation
The Working Capital in 2013-14 has increased by Rs.53220022. This was due to
increase in Inventories, Cash & Bank Balance, deposits & Loan and Advances and
Decrease in sundry debtors, current liabilities and provisions.
28
Table No 2

(2014-2015)

Increase Decrease
Current assts (CA)
1725408
Inventory 91821066 109075147 1
Sundry debtors 3454410 6358113 2903703
cash and bank 4584931 4321650 263281
Deposits 32782471 26367433 6415038
Loans and advances and prepaid
expenses 16609002 25367448 8758446

14925188
Total Current assets (a) 0 171489791

Provisions
Provisions 4558958 7087149 2528191

Total current liabilities (b) 41538240 50379369

10771364

Net Increase / decrease working
capital 13396782 13396782
12111042 2891623
2 121110422 0 28916230
Interpretation
The Working Capital in 2014-15 has increased by Rs.13396782. This was due to
increase in Inventories, sundry debtors, & Loan and Advances and Decrease in Cash &
Bank Balance, deposits, current liabilities and provisions
29
Table No 3

(2015-2016)

Increase Decrease
Current Assts
Inventory 109075147 100760856 8314291
Sundry debtors 6358113 6844432 486319
Cash and bank 4321650 7347643 3025993
Deposits 26367433 38838401 12470968

Total Current assets (a) 171489791 176075489
Provisions
Provisions 7087149 8349907 1262758
Total current liabilities (b) 50379369 68649191

Total 121110422 121110422 29667404 29667404
Interpretation
The Working Capital in 2015-16 has decrease by Rs.13684124 . This was due to
increase in Sundry Debtors Cash & Bank Balance, deposits and decreased in Inventories,
Other Current Assets, Loan and Advances and also Liabilities.
30
Table No 4

(2016-17)

Increase Decrease
Current assts
Inventory 100760856 258935801 158174945
Sundry debtors 6844432 23666599 16822167
cash and bank 7347643 6990208 357435
Deposits 38838401 144273003 105434602

Total Current Assets (a) 176075489 481952306

Provisions
Provisions 8349907 19897427 11547520

Total Current Liabilities (b) 68649191 173735231


Total 308217075 308217075 306234252 306234252
Interpretation
The Working Capital in 2016-17 has increased by Rs. 200790777. This was due to
increase in Inventories, sundry debtors, deposits & Loan and Advances and Decrease in
Cash & Bank Balance, current liabilities and provisions.
Table No 5
31
(2017-18)

Rs. RS working capital
Increase Decrease
Current assts
Inventory 258935801 271428799 12492998
Sundry debtors 23666599 18113070 5553529
Cash and bank 6990208 7787309 797101
Deposits 144273003 129569540 14703463

Total Current Assets(a) 481952306 499231975

Provisions
Provisions 19897427 18442538 1454889

Total Current Liabilities
(b) 173735231 205462123


308217075 308217075 53438773 53438773
Interpretation
The Working Capital in 2017-18 has decreased by Rs.14447223. This was due to
increase in Inventories, Loan and Advances, Cash & Bank Balance, and provisions.
Decrease in sundry debtors, deposits, current liabilities.
RATIO ANALYSIS
Current Ratio
32
The current ratio is expressing the relationship between current assets and current
liabilities. Current assets refer to all those assets that change into cash within a year.
Current liabilities refer to all short term liabilities. That required to be repaid within a
period of one year out of current assets.
Current ratio = Current Assets/current liabilities
TABLE No. 6
Table showing the current ratio of Tirumala milk products limited
Current
Year Current Assets Current ratio
Liabilities
2013-14 149251880.76 41538241.92 3.59
2014-15 171489792.33 50379370.36 0.34
2015-16 176075490.76 68649192.79 2.56
2016-17 481952306 173735231 2.77
2017-18 499231975 205462123 2.42
FIGURE 6
Figure – 1: Showing the Current Ratio of SNJ ALLIED PRODUCT LTD
33
Current Ratio
4 3.59
3.5
2.77
3 2.56 2.42
2.5
1.5
1
0.34
0.5
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation
Standard of current ratio is 2:1. The current ratio in the year 2014 is 3.59. Then
after drastically falling in four periods for which the study is conducted. The ratios are
0.34, 2.56, 2.77, 2.42 respectively. Which also indicates the depletion of working capital
condition of the company of hate the company seems to be mat all that punctual in
manufacturing business is 2:1.
9.7 Liquid Ratio
The liquid ratio Express The relationship between absolute liquid Assets refer to
cash and near cash assets. They include cash in hand cash at bank and readily marketable
securities. Quick liabilities refer to all current liabilities except bank over draft and cash
credit.
34
Liquid ratio = Liquid Assets /Current liabilities
Table No. 9.7
Table showing The Liquid Ratio of
Snj Allied Product Ltd
Current
Year Liquid Assets Liquid ratio
Liabilities
2013-14 32782471.22 41538241.92 0.78
2014-15 26367433.68 50579370.36 0.52
2015-16 38838401.96 68649192.72 0.56
2016-17 144273003 173735231 0.83
2017-18 129569540 205462123 0.63
Liquid Ratio
Figure 9.7
1 Showing
0.83 the liquid
0.78
Ratio of
0.63 Snj Allied
0.56
0.52 Product
0.5 Ltd.
35
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation:
. The liquid ratio as matter of principal is 5:2 in the five periods for which study was made
this ratio is falling from 0.78 ,0.52 0.56, 0.83, 0.63.
9.8 Debt – Equity Ratio:
The debt equity ratio is the ratio that express the relationship between debt and
equity debt generally refers to long term liabilities. Equity for the purpose of this ratio
36
means owners funds. The debt equity ratio is generally expressed as a pure ratio. It is
calculated using the formula.
Debt Equity Ratio = Debt / Equity
Table No. 9.8
Table showing the DEBT – Equity ratio of SNJ ALLIED PRODUCT LTD.
S.No. Year Debt Equity Debt- equity ratio
1 2013-14 36979282.99 23050000 1.60
2 2014-15 43292220.95 23050000 1.88
3 2015-16 60299284.76 23050000 2.61
4 2016-17 153837804.00 82032382 1.87
5 2017-18 187019585 82021809 2.28
37
Figure. 9.8
Showing the Debt Equity ratio of SNJ ALLIED PRODUCT LTD
Debt - Equity Ratioi
3
2.61
2.5 2.28
1.88 1.87
2
1.6
1.5
0.5
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation:
. The debt equality ratio is 1.60. But this company has increased 2.23,1.88, 2.61,
1.87, 2.28, over five periods.
38
9.9 Proprietary Ratio:
The Proprietary Ratio is a variant of the debt-equity ratio. It is the ratio the
expresses the relationship between the net worth or equity and total assets. Net worth
refers to the excess of total assets over total liabilities. In other words it refers to owners
fund total assets refer to all realizable assets. It can be calculated using the formula.
Proprietary Ratio = Net Worth / Total Assets
Table No. 9.9
Table showing the Proprietary Ratio of SNJ ALLIED PRODUCT LTD
Proprietary
S.No. Year Net Worth Total Assets
Ratio
1 2013-14 185534458 224372099 0.82
2 2014-15 254955806 302869877 0.84
3 2015-16 272366192 338385384 0.80
4 2016-17 586707261 757064501 0.77
5 2017-18 638995492 84102385 0.75
39
Figure 9.9
Showing
Proprietory Ratio
the
0.9 0.82 0.84
0.85 0.80
0.77 0.75
0.8
0.75
0.7
0.65
0.6
0.55
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2013-14 2014-15 2015-16 2016-17 2017-18
proprietary ratio of SNJ ALLIED PRODUCT LTD
40
Interpretation
The proprietary ratio is we find that in the study made for period 2014-2015. The ratio
was 0.82 and the next period it was 0.84 it was decrease 0.80, 0.77, 0.75, in the year
2015-2016. 2016-17and 2017-2018.
9.10. Fixed Assets Turnover Ratio
The Fixed Assets turnover ratio is that ratio that express the relationship between
net sales and fixed assets. Net sales refer to the total sales minus sales return. Fixed assets
turnover ratio indicates as to what extent the fixed of concern have contributed to sales.
Fixed Assets Turnover Ratio = Net Sales / Fixed Assets
Table No. 9.10
Table showing the Fixed Assets Turnover Ratio of SNJ ALLIED PRODUCT LTD
Fixed Assets
S.No. Year Net Sales Fixed Assets
Turnover Ratio
1 2013-14 1005438773.32 75120219.29 13.38
2 2014-15 1240400780.85 131380084.98 9.44
3 2015-16 1483468207.19 162309893.97 9.13
41
4 2016-17 2852734310 275112195 10.36
5 2017-18 3738023759 341840410 10.93
Figure 9.10
Showing the Fixed Assets Turnover Ratio of SNJ ALLIED PRODUCT LTD for the
year 2004 to 2008
Fixed Assets Turnover Ratiio
14
13.38
13
12 10.93
11
10.36
9.44 9.13
10
9
8
7
6
5
4
3
2
1
0
2013-14 2014-15 2015-16 2016-17 2017-18
42
Interpretation
We find that during the first period the fixed assets turnover ratio was 26 . But in the
following five periods it was 13.38, 9.94, 9.13, 10.36, and 10.93 which indicates that
the fixed assets were properly utilized.
9.11. Current Assets Turnover Ratio
The current assets turnover ratio is a ratio that expresses the relationship between
net sales and current assets. Net sales refer to sales minor sales return. The current assets
refer to all those assets that will be converted to cash during normal operating cycle of
business.
Current Assets Turnover Ratio = Net sales / Current Assets
Table No. 9.11
Table showing the Current Assets Turnover Ratio of SNJ ALLIED PRODUCT LTD
Current Assets
S.No. Year Net Sales Current Assets
Turnover Ratio
1 2013-14 1005438773.32 149251880.76 6.73
2 2014-15 1240400780.85 171489792.33 7.23
3 2015-16 1483468207.19 176075490.76 8.42
43
4 2016-17 2852734310 481952306 5.91
5 2017-18 3738023759 499231975 7.48
Figure 9.11
Showing the Current Assets Turnover Ratio of
SNJ ALLIED PRODUCT LTD
Current Assets Turnover Ratio

8.42
7.23 7.48
8
6.73
7 5.91
6
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation
44
Standard of total assets turnover ratio is 2:1. We find that during the first period the
currents assets turnover ratio was 6.73. But it is increased in the next two periods to 7.23,
8.42 and it was decreased the during period 2016-17it was 5.91 but it was increased 7.48
during the period 2017-2018.
9.12 .Total Assets turnover Ratio
The total assets turnover ratio is the ratio that expresses the relationship between
net sales and total assets. Net sales refer to sales minus sales return. Total assets refer to
all the assets including fixed assets and current assets. It can be calculating using the
following formula.
Total Assets Turnover Ratio = Net sales / Total assets
Table No 9.12
Table showing the Total assets turnover ratio of SNJ ALLIED PRODUCT LTD.
Total Assets
S.No. Year Net Sales Total Assets Turnover
Ratio
1 2013-14 1005438773.32 224372099.9 4.48
2 2014-15 1240400780.85 302869877.2 4.09
3 2015-16 1483468207.19 338385384.6 4.38
4 2016-17 2852734310 757064501 3.76
45
5 2017-18 3738023759 841072385 4.44
Figure 9.12
Showing
Total Assets Turnover Ratio
the Total
5 4.38 4.44 4.41 Assets
4.5 4.09
3.76 Turnover
4
Ratio of
3.5
3
SNJ
2.5 ALLIED
2
1.5
1
0.5
0
2013-14 2014-15 2015-16 2016-17 2017-18
PRODUCT LTD
46
Interpretation
We find that during the first period total assets turnover ratio from period it was
4.09 & the nest period it was increase 4.38. But during the period 2016-17it was decrease
3.76 the last period it was increase 4.44 .
9.13. Working Capital Turnover Ratio
The working capital turnover ratio is the ratio that expresses the relationship
between working capital and net sales. Working capital is the excess of current assets
over current liabilities . This ratio indicate the efficient or inefficient utilization of
working capital of an enterprise. It can be calculated using the following formula.
Working Capital Turnover ratio =
Net sales / Working Capital
47
Table No. 9.13
Table showing the Capital turnover ratio of Tirumala milk products Private Ltd.
Working Working Capital

S.No. Year Net Sales
Capital Turnover Ratio
1 2013-14 1005438773 107713638 9.33
2 2014-15 1240400780 120910421 10.25
3 2015-16 1483468207 107426298 13.80
4 2016-17 2852734310 308217075 9.25
5 2017-18 3738023759 293769853 15.59
Figure. 9.13
Showing the Working capital turnover ratio of SNJ ALLIED PRODUCT LTD
48
Working Capital Turnover Ratio
15.59
16
13.80
14
12 10.25
9.33 9.25
10
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation
Standard of working capital turnover ratio is 2:1. We find that the working capital
turnover ratio was 9.33. It was increased from 10.25, 13.80 during the period 2014-2015,
2015-2016 the next periods the ratio was decrease 9.25. But the last period the working
capital turnover ratio is increased 15.59.
9.14 Return on Shares Holders’ Fund Ratio
49
The Return on Shareholders fund ratio is the ratio that expresses the relationship
between Net Profit and Shareholders’ Fund. This ratio server the purpose of measuring
the productivity of Shareholders’ fund and it is a satisfactory measure of the profitability
of the enterprise from point of view of the equity shareholders. It can be calculated by
using the following formulas.
Return on Shareholders’ Fund =
(Net Profit after Taxes / Shareholder’s Fund ) x 100
Table No. 9.14
Table showing the Return on Shareholders’ Fund Ratio of
Return on
Net Profit Shareholders’
S.No. Year Shareholders’
After Tax Fund
Funds
1 2013-14 12535897 23050000 0.54
2 2014-15 12573363 23050000 0.54
3 2015-16 16680950 23050000 0.72
4 2016-17 46467460 82032382 0.56
5 2017-18 98786932 82021809 1.20
Figure. 9.14
Showing the Return on Shareholders’ Funds ratio of
50
SNJ
Return on Shareholders' Fund
1.20 ALLIED
1.2
0.8
0.72
0.54 0.54 0.56

0.6
0.4
0.2
0
2013-14 2014-15 2015-16 2016-17 2017-18
PRODUCT LTD
Interpretation
We find that profit on share holders fund during the period 2013-14is 0.54 and its
was increased following the 0.54, 0.72, 0.56, 1.20 during the period 2014-2015, 2015-
2016. 2016-2017, 2017-2018.
51
9.15. Owned Capital Turnover Ratio
The Owned Capital Turnover Ratio is the Ratio that expresses the relationship
between net sales and net worth. Net sales refers to sales minus sales return. Net worth
means the owner’s fund. The owned capital turnover ratio is on good indicator of
utilization of owner’s fund. It can be calculated by using the following formula.
Owned Capital Turnover Ratio = Net Sales / Net Worth
Table No. 9.15
Table showing the Return on Owned Capital Turnover Ratio of
SNJ ALLIED PRODUCT LTD.
Owned Capital
S.No. Year Net Sales Net Worth
Turnover Ratio
1 2013-14 1005438773 185534458 5.41
2 2014-15 1240400780 254955809 4.86
3 2015-16 1483468207 272366192 5.44
4 2016-17 2852734310 586707261 4.86
5 2017-18 3738023759 638995492 5.84
Figure. 9.15
52
Showing the Owned Capital Turnover Ratio of
SNJ ALLIED PRODUCT LTD
Owned Capital Turnover Ratio
5.84
6 5.41 5.44
4.86 4.86
5
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation
We find that owned capital turnover ratio was 5.41 in 2013-14and the net sales
was highly increased to 5.84 during the period 2017-2018.
9.16Gross Profit Ratio
53
The Gross Profit Ratio is the ratio that expresses relationship between Gross Profit
and sales. The Gross Profit means profit that concern on its trading. Sales refer to total
sales i.e, Sales – Sales Returns. It can be calculated by using the following formula.
Gross Profit Ratio – Gross Profit / Net Sales) x 100
Table No. 9.16
Table showing the Gross Profit Ratio of SNJ ALLIED products Private Ltd.
Gross Profit
S.No. Year Gross Profit Net Sales
Ratio
1 2013-14 29263963 1005438773 0.0290
2 2014-15 504947 1240400780 0.0040
3 2015-16 31851606 1483468207 0.0210
4 2016-17 12664933 2852734310 0.0044
5 2017-18 24192668 3738023759 0.0064
Figure. 9.16
54
Showing
Gross Profit Ratio
the Gross
0.0290
0.03 Profit
Ratio of
0.03
0.0210
snj allied
0.02
products
0.02 Limited
0.01 0.0064
0.0040 0.0044
0.01
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation
During the period 2013-14the gross profit ratio was 0.029 in the following period
2014-2015. There was a fall in ratio posting 0.0040. But in the period 2015-2016 it was
increase in the ratio 0.021 in the following year 2016-2017, 2017-2018. It was decreased
in the 0.0044, 0.0064.
55
9.17 Net Profit Ratio
The Net Profit Ratio is the ratio that expresses relationship between Net Profit and
sales. The Net Profit means final balance of operating and non-operating incomes after
meeting all expenses. It refers to net profit before taxes. Sales means total sales. It can
be calculated by using the following formula.
Net Profit Ratio = (Net Profit / Net Sales) x 100
Table No. 9.17
Table showing the Gross Profit Ratio of snj allied products Private Ltd.
Net Profit
S.No. Year Net Sales Net Profit Ratio
After Tax
1 2013-14 12535897 1005438773 0.012
2 2014-15 12573363 1240400780 0.010
3 2015-16 16680950 1483468207 0.011
4 2016-17 46467460 285273410 0.16
5 2017-18 98786932 3738023759 0.026
56
Figure. 9.17
Showing the Net Profit Ratio of snj allied products Limited
Net Profit Ratio

0.160
0.16
0.14
0.12
0.1
0.08
0.06
0.04 0.026
0.012 0.010 0.011
0.02
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation
We find that the net profit ratio was 0.012 during 2013-14and it was decreased to
0.010, 0.011 during the period. But the next the following period 2016-2017, 2017-2018 it
was increased 0.16, 0.026 .
57
9.18 Fixed Assets to Net worth
This ratio indicates proprieting of fixed assets financed by owner or the proprietor.
In other words, it indicates as to what extent the owner has invested funds on the fixed
assets that constitute the main structure of assets. The standard fixed assets to net worth
ratio is 2:3.
Fixed Assets to Net worth = Net fixed assets / Net worth
Table No. 9.18
Table showing the Fixed Assets to Net worth of snj allied products Private Ltd.
Fixed Assets Net

S.No. Year Fixed Assets Net Worth
worth
1 2013-14 75120219 185534458 0.40
2 2014-15 131380084 254955806 0.51
3 2015-16 162309893 272366192 0.59
4 2016-17 275112195 586707261 0.46
5 2017-18 341840410 638995492 0.53
Figure. 9.18
58
Showing the Fixed Assets to Net worth of snj allied products Limited
Fixed Assets Net Worth Ratio
0.59
0.6 0.53
0.51
0.46
0.5
0.40
0.4
0.3
0.2
0.1
0
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation
we find that fixed assets to net worth is 0.40 in 2013-2014 the next period it
was increased 0.51 during 2014-2015, 0.59 during the period 2015-2016 which
indicates good assets position of the company and it was decreased to 0.46 during
2016-2017 the last period it was increased 0.53 .
Table No 9 .19
59
COMPARATIVE BALANCE SHEET OF SNJ ALLIED PRODUCT (P) LTD., 2013
and 2014 (Rs )
Liabilities 2013 2014 Absolute %change
Capital & reserves:
Equity share capital 13050000 23050000 10000000 76.62835
reserves & surplus 23569934 36105831 12535897 53.18597
secured loans 79340910 126378626 47037716 59.28558
TOTAL 115960844 185534457 69573613 59.9975
current liabilities &
provisions:
current liabilities 29082760 36979282 7896522 27.1519
Provisions 4058402 4558958 500556 12.33382
TOTAL 33141162 41538240 8397078 25.33731
TOTAL 149102006 227072697 77970691 52.29352
Assets 2005 2006 Absolute %change

Fixed assets:
net block 46086633 70248825 24162192 52.42777
capital work in progress 6676916 4871395 -1805521 -27.0412
Investments 610000 2610000
TOTAL 53373549 77730220 24356671 45.63435
Current assets:
Inventories 55762138 91821066 36058928 64.66561
Sundry debtors 6496711 3454410 -3042301 -46.8283
Deposits 3648490 4584931 936441 25.66654
cash & bank balances 12111184 32782471 20671287 170.6793
loans and advances 9616257 16609002 6992745 72.71795
MIS exp 8093677 90597 -8003080 -98.8806
TOTAL 95728457 149342477 53614020 56.00636
TOTAL 149102006 227072697 77970691 52.29352

Interpretation
The Fixed Assets increased by Rs.24356871 i.e., 45.63 percent due to increase in
net block &investments. The Current Assets increased by Rs.53614020i.e.56percent due to
increase in Cash & Bank Balances and decrease in Sundry Debtors. Capital reserve
increased by Rs.69573613 i.e.59.99 percent due to increase in capital, reserves & loans.
The Current Liabilities increased by Rs.8397078 i.e., 25.33 percent due to increase in
Liabilities and Provisions.
Table No 20
60
COMPARATIVE BALANCE SHEET OF SNJ ALLIED PRODUCT (P) LTD., 2014
and 2015
(Rs. )
Capital & reserves:
Equity share capital 23050000 23050000 0 0
secured loans 126378626 183326617 56947991 45.06141
TOTAL 185534457 254955806 69421349 37.41696
current liabilities & provisions:
Provisions 4558958 7087149 2528191 55.45546
MIS EXP 144700 144700
TOTAL 41538240 50524069 8985829 21.63267
TOTAL 227072697 305479875 78407178 34.52955
Assets 2006 2007 Absolute %change

Fixed assets:
net block 70248825 87628252 17379427 24.73981
capital work in progress 4871395 43751832 38880437 798.1376
Investments 2610000 2610000 0 0
TOTAL 77730220 133990084 56259864 72.37837
Current assets:
Inventories 91821066 109075147 17254081 18.79098
sundry debtors 3454410 6358113 2903703 84.05786
Deposits 4584931 4321650 -263281 -5.74231
cash & bank balances 32782471 26367433 -6415038 -19.5685
TOTAL 149342477 171489791 22147314 14.82988
TOTAL 227072697 305479875 78407178 34.52955
Interpretation
The Fixed Assets increased by 56259834 Rs .i.e., 72.37 percent due to increase in
net block. The Current Assets increased by Rs.22147314 i.e., 14.82 percent due to
decrease in Cash & Bank Balances, and increase in Sundry Debtors. Capital reserve
increased by Rs.69421349 i.e.37.41 percent due to increase in reserves & loans. The
Current Liabilities increased by Rs.8985829 i.e., 21.63 percent due to increase in
Liabilities and Provisions.
Table No 21
COMPARATIVE BALANCE SHEET OF SNJ ALLIED PRODUCT (P) LTD 2015
and 2016
(Rs.)
61
Capital reserves:
Equity share capital 23050000 23050000 0 0
18332661 18480035
Secured loans 7 2 1473735 0.803884905
25495580 27236619
TOTAL 6 1 17410385 6.828785456
provisions:
Current liabilities 43292220 60299284 17007064 39.28434254
Provisions 7087149 8349907 1262758 17.81757375
MIS EXP 144700 -144700 -100
TOTAL 50524069 68649191 18125122 35.87423254
30547987 34101538
TOTAL 5 2 52945892 9.447273576
Assets 2007 2008 Absolute % change

Fixed assets:
15285675
net block 87628252 6 65228504 74.43775553
-
capital work in progress 43751832 9453137 -34298695 78.39373446
Investments 2610000 2610000 0
13399008 16491989
TOTAL 4 3 30929809 23.08365521
current assets:
10907514 10076085 -
Inventories 7 6 -8314291 7.622534765
Sundry debtors 6358113 6844432 486319 7.64879454
deposits 4321650 7347643 3025993 70.01939074
Cash & bank balances 26367433 38838401 12470968 47.29686049
-
loans and advances 25367448 22284157 -3083291 12.15451787
MIS EXP 20000 20000
17148979 17609548
TOTAL 1 9 4605698 2.685698066
30547987 34101538
TOTAL 5 2 66465316 15.12397256
Interpretation
net block. The Current Assets increased by Rs.4605698i.e., 2.68 percent due to increase in
deposits, Cash & Bank Balances, Sundry Debtors, and decrease in inventories &loans and
62
advances. Capital reserve increased by Rs.17410385 i.e.6.82 percent due to increase in
reserves & loans. The Current Liabilities increased by Rs.18125122 i.e., 35.87 percent due
to increase in Liabilities and Provisions.
Table No 9 .22
and 2017 (Rs.)
Liabilities 2016 2017 Absolute % change
Capital reserves:
Equity share capital 23050000 82032382 58982382 255.8889
secured loans 184800352 383547595 198747243 107.547
TOTAL 272366191 586707261 314341070 115.4112
provisions:
Provisions 8349907 19897427 11547520 138.2952
TOTAL 68649191 173735231 105086040 153.0769
TOTAL 341015382 760442492 419427110 122.9936
Assets 2008 2009 Absolute % change

Fixed assets:
net block 152856756 265711937 112855181 73.83068
capital work in progress 9453137 9400258 -52879 -0.55938
Investments 2610000 3330520 720520 27.60613
TOTAL 164919893 278442715 113522822 68.83513
current assets:
Inventories 100760856 258935801 158174945 156.9805
sundry debtors 6844432 23666599 16822167 245.7789
deposits 7347643 6990208 -357435 -4.86462
cash & bank balances 38838401 144273003 105434602 271.47
MIS EXP 20000 47471 27471 137.355
TOTAL 176095489 481999777 305904288 173.715
TOTAL 341015382 760442492 419427110 122.9936

Interpretation
net block. The Current Assets increased by Rs.305904388i.e., 173.71 percent due to
decrease in deposits and increase in Cash & Bank Balances, Sundry Debtors, inventories
&loans and advances. Capital reserve increased by Rs.314341070 i.e.115.41 percent due
63
to increase in reserves & loans. The Current Liabilities increased by Rs.419427110 i.e.,
122.99 percent due to increase in Liabilities and Provisions.
Table No 9 .23

and 2018 (Rs.)
%
Liabilities 2017 2018 Absolute change
Capital reserves:
Equity share capital 82032382 82021809 -10573 -0.01289
secured loans 383547595 336847834 -46699761 -12.1757
TOTAL 586707261 638995492 52288231 8.91215
Current liabilities
&provisions:
Provisions 19897427 18442538 -1454889 -7.31195
TOTAL 173735231 205462123 31726892 18.26163
TOTAL 760442492 844457615 84015123 11.04819

%
Assets 2009 2010 Absolute change
Fixed assets:
net block 265711937 326693339 60981402 22.95019
capital work in progress 9400258 15147071 5746813 61.13463
Investments 3330520 3333953 3433 0.103077
TOTAL 278442715 345174363 66731648 23.96602
current assets:
Inventories 258935801 271428799 12492998 4.824747
sundry debtors 23666599 18113070 -5553529 -23.4657
deposits 6990208 7787309 797101 11.40311
cash & bank balances 144273003 129569540 -14703463 -10.1914
MIS EXP 47471 51277 3806 8.017526
TOTAL 481999777 499283252 17283475 3.585785
Total of current assets 760442492 844457615 84015123 11.04819
Interpretation
net block &capital work in progress. The Current Assets increased by Rs.17283475i.e.,
3.58 percent due to increase in inventory, deposits &loans and advances and decrease in
Sundry Debtors and Cash & Bank Balances. Capital reserve increased by Rs.5228823
i.e.8.91 percent due to increase in reserves. The Current Liabilities increased by
Rs.31726892 i.e., 18.26 percent due to increase in Liabilities .
64
Table No 9 .24
COMMON SIZE PROFIT AND LOSS ACCOUNT OF SNJ ALLIED PRODUCT (P)
LTD., 2013 and 2014 (Rs.)
%
Liabilities 2013 % change 2014 change
Capital reserves:
Equity share capital 13050000 8.752397335 23050000 10.15093
reserves & surplus 23569934 15.80792548 36105831 15.90056
12637862
secured loans 79340910 53.21250339 6 55.65558
18553445
TOTAL 115960844 77.77282621 7 81.70707
provisions:
current liabilities 29082760 19.50527748 36979282 16.28522
Provisions 4058402 2.72189631 4558958 2.007709
TOTAL 33141162 22.22717379 41538240 18.29293
22707269
TOTAL 149102006 100 7 100
percent %
Assets 2013 change 2014 change
Fixed assets:
net block 46086633 30.90946543 70248825 30.93671
capital work in progress 6676916 4.478085962 4871395 2.145302
Investments 610000 0.409115891 2610000 1.149412
TOTAL 53373549 35.79666728 77730220 34.23143
current assets:
Inventories 55762138 37.39865042 91821066 40.43686
sundry debtors 6496711 4.357225751 3454410 1.521279
deposits 3648490 2.446975797 4584931 2.019147
cash & bank balances 12111184 8.122750542 32782471 14.43699
loans and advances 9616257 6.44944844 16609002 7.314399
MIS EXP 8093677 5.428281763 90597 0.039898
14934247
TOTAL 95728457 64.20333272 7 65.76857
22707269
TOTAL 149102006 100 7 100
Interpretation
When compare 2013 in 2014 fixed assets decreases because percentage of fixed
assets has decreased from 35.80 percent to34.23 percent. Current assets increase because
percentage of current assets increases from 64.2 to65.76 percent. Capital reserve
increases because percentage of Capital reserve increased from 77.77 percentto81.70
65
percent. Current liabilities decrease because percentage of Current liabilities decreased
from 22.22 percent to18.29 percent.
Table No 9 .25
COMMON SIZE PROFIT AND LOSS ACCOUNT OF SNJ ALLIED PRODUCT (P)
LTD., 2014 and 2015
Liabilities 2014 % 2015 % change
change
Capital reserves:
secured loans 126378626 55.65558 183326617 60.01267
TOTAL 185534457 81.70707 254955806 83.46075
provisions:
Provisions 4558958 2.007709 7087149 2.320005
MIS EXP 144700 0.047368
TOTAL 41538240 18.29293 50524069 16.53925
TOTAL 227072697 100 305479875 100
Assets 2014 % 2015 % change

change
Fixed assets:
net block 70248825 30.93671 87628252 28.68544
Investments 2610000 1.149412 2610000 0.854393
TOTAL 77730220 34.23143 133990084 43.86216
Current assets:
Inventories 91821066 40.43686 109075147 35.70616
sundry debtors 3454410 1.521279 6358113 2.081352
deposits 4584931 2.019147 4321650 1.414709
MIS EXP 90597 0.039898
TOTAL 149342477 65.76857 171489791 56.13784
TOTAL 227072697 100 305479875 100

(Rs.)
66
Interpretation
When compare 2014 in 2015 fixed assets increases because percentage of fixed
assets has increased from 34.23 percentto43.86 percent. Current assets decrease because
percentage of current assets decreases from 65.76 percentto56.13 percent. Capital reserve
increases because percentage of Capital reserve increased from 81.7 percentto83.46
percent. Current liabilities decrease because percentage of Current liabilities decreased
Table No 9 .26
COMMON SIZE BALANCE SHEET OT SNJ ALLIED PRODUCT (P) LTD., 2015
and 2016
Liabilities 2015 % change 2016 % change

Capital reserves:
67
secured loans 183326617 60.01 184800352 54.19121
TOTAL 254955806 83.46 272366191 79.86918
current liabilities & provisions:
Provisions 7087149 2.32 8349907 2.448543
MIS EXP 144700 0.047
TOTAL 50524069 16.54 68649191 20.13082
TOTAL 305479875 100 341015382 100
Assets 2015 % change 2016 % change

Fixed assets:
net block 87628252 28.69 152856756 44.82401
Investments 2610000 0.854 2610000 0.765361
TOTAL 133990084 43.86 164919893 48.36142
current assets:
Inventories 109075147 35.71 100760856 29.54731
sundry debtors 6358113 2.081 6844432 2.007074
deposits 4321650 1.415 7347643 2.154637
MIS EXP 20000 0.005865
TOTAL 171489791 56.14 176095489 51.63858
TOTAL 305479875 100 341015382 100
Interpretation
assets has increased from 43.86 percent to48.36 percent. Current assets decrease because
percentage of current assets decreases from 56.13 to51.63 percent. Capital reserve
decreases because percentage of Capital reserve decreased from 83.46 percentto79.86
percent. Current liabilities increase because percentage of Current liabilities increased
Table No 9 .27
COMMON SIZE BALANCE SHEET OT SNJ ALLIED PRODUCT (P)LTD., 2016

and 2017 (Rs.)
68
%
Liabilities 2016 change 2017 % change
Capital reserves:
12112728
38354759
secured loans 184800352 54.19121 5 50.43742
58670726
TOTAL 272366191 79.86918 1 77.1534
provisions:
15383780
Provisions 8349907 2.448543 19897427 2.616559
17373523
TOTAL 68649191 20.13082 1 22.8466

76044249
TOTAL 341015382 100 2 100
% %
Assets 2016 change 2017 change
Fixed assets:
26571193
net block 152856756 44.82401 7 34.94175
Investments 2610000 0.765361 3330520 0.437971
27844271
TOTAL 164919893 48.36142 5 36.61588
current assets:
25893580
Inventories 100760856 29.54731 1 34.05067
sundry debtors 6844432 2.007074 23666599 3.112214
deposits 7347643 2.154637 6990208 0.919229
14427300
MIS EXP 20000 0.005865 47471 0.006243
48199977
TOTAL 176095489 51.63858 7 63.38412

76044249
TOTAL 341015382 100 2 100
Interpretation
When compare 2016 in 2017 fixed assets decreases because percentage of fixed
assets has decreased from 48.36 percent to36.61 percent. Current assets increase because
percentage of Current assets increases from 51.63 percent to63.38 percent. Capital
69
reserve decreases because percentage of Capital reserve decreases from 79.86 percent
to77.15 percent. Current liabilities increase because percentage of increased Current
liabilities from 20.13 percent to22.84 percent.
Table No 9 .28
COMMON SIZE BALANCE SHEET OT SNJ ALLIED PRODUCT (P)LTD., 2017

and 2018 (Rs.)
Liabilities 2017 % change 2018 % change
Capital reserves:
12112728
38354759
secured loans 5 50.43742282 336847834 39.88925294
58670726
TOTAL 1 77.15340307 638995492 75.6693386
provisions:
15383780
Provisions 19897427 2.61655907 18442538 2.183950701
17373523
TOTAL 1 22.84659693 205462123 24.3306614
76044249
TOTAL 2 100 844457615 100
Assets 2017 % change 2018 % change

Fixed assets:
26571193
net block 7 34.94175297 326693339 38.68676571
Investments 3330520 0.437971317 3333953 0.394804066
27844271
TOTAL 5 36.61588061 345174363 40.87527389
current assets:
25893580
Inventories 1 34.05067493 271428799 32.14238278
sundry debtors 23666599 3.112214171 18113070 2.144935362
deposits 6990208 0.919229011 7787309 0.922166946
14427300
MIS EXP 47471 0.00624255 51277 0.006072182
48199977
TOTAL 7 63.38411939 499283252 59.12472611
70
76044249
TOTAL 2 100 844457615 100
Interpretation
assets has increased from 36.61 percent to40.87 percent. Current assets decrease because
percentage of Current assets decreases from 63.38 percent to59.12 percent. Capital
reserve decreases because percentage of Capital reserve decreases from 77.15 percent
to75.66 percent. Current liabilities increase because percentage of increased Current
liabilities from 22.84 percent to24.33 percent.
FINDING
 The Working Capital in 2013-14 has increased by Rs.53220022. This was due to
increase in Inventories, Cash & Bank Balance, deposits & Loan and Advances
and Decrease in sundry debtors, current liabilities and provisions.
 The Working Capital in 2014-15 has increased by Rs.13396782. This was due to
increase in Inventories, sundry debtors, & Loan and Advances.
 In the year 2015-16 and 2016-17 current assets are increased this shows utilization
of working capital. In the year 2017-18 the current assets are working capital
decreased.
 As per the Ratio analysis the following five years current ratios are 3.59, 3.39,
2.56, 2.77, and 2.42 respectively. As per the Ratio analysis the following five years
liquid ratios, 5.21 0.78 0.56, 0.83, 0.63.
 The debt equity ratio is 1.60. But this company has increased 1.88, 2.61, 1.87,
2.28, over four periods. The proprietary ratio is we find that in the study made for
period 2013-2014. The ratio was 0.82 and the next period it was 0.84 it was
decrease 0.80, 0.77, 0.75, in the year 2014-2015. 2015-2016 and 2016-2017.
 As per Goss profit ratio: during the period 2013-2014 the gross profit ratio was
0.029 in the following period 2013-2014. There was a fall in ratio posting 0.0040.
But in the period 2014-2015 it was increase in the ratio 0.021 in the following year
2015-2016, 2016-2017. It was decreased in the 0.0044, 0.0064.
71
 As per net profit ratio: we find that the net profit ratio was 0.012 during 2013-2014
and it was decreased to 0.010, 0.011 during the period. But the next the following
period 2015-2016, 2016-2017 it was increased 0.16, 0.026 .
 As per Fixed assets to net worth: we find that fixed assets to net worth is 0.40 in
2013-2014 the next period it was increased 0.51 during 2013-2014, 0.59 during the
period 2015-2016 which indicates good assets position of the company and it was
decreased to 0.46 during 2015-2016 the last period it was increased 0.53 .
SUGGESTIONS
1. As for as current ratio is concerned my concern is that the current ratio is falling
rapidly from 3.59 in first period to 2.42 in fifth periods. This trend should be
checked otherwise which it may cause recoverable danger on working capital
condition of the company.
2. The fall in the liquid ratio is mainly due to wrong credit policy or may be delay in
debt collection or reckless liability incurred. The management should take
emergency location to correct this in a war footing.
3. The fixed assets are put in to use only for a particular season in the year. But my
suggestion is that least in that season the rent and equipment should be efficiently
used.
4. Current assets to turnover ratio are decreasing over a period of one year. Level of
materials should be maintained as per the office manual and debt collection
procedure be improved.
5. Working capital is not efficiently utilized far enhancement of sales oversized

working capital should either be trimmed or overall attempted should be made to
increase the turnover
72
CONCLUSION
 The firm should establish optimum capital structure
 The credit policy of the company has to be reviewed and proper steps have to be
taken in collecting credit proceeds. The company can go for factoring in debtor’s
collection with the help of bankers, liquidity of funds.
 The company has idle cash balance which may reduce the profitability company
may invest such idle cash in marketable securities.
 The company can maintain proper stock level by adopting techniques like “Just IN
Time” systems.
 As long term agreement company can go for contract dealing between the forest
dept. and the farmers to develop plant establishment.
73
ANNEXURE
BALANCE SHEET OF SNJ ALLIED PRODUCT LTD 2015-2016.
(Rs.)
2015 2016
Sources of Funds
1) Shareholder's Funds
a) Share Capital 13050000 23050000
b) Reserves & Surplus
23569934 36105831
a) Secured Loans 79340910 126378626
h) Unsecured Loans
Total 115960844 185534457
Application of funds
1) Fixed Assets
a) Gross Block 71135061 111386856
b) Less: Depreciation 25048428 41138031
Net Block 46086633 70248825
Capital Work in Progress 6676916 4871395
Total 52763549 75120220
2)Investment 610000 2610000
3) Current Assets, Loans and
Advances.
a) Inventories 55762138 91821066
b) Sundry Debtors 6496711 3454410
c)Deposits 3648490 4584931
d) Cash & Bank Balances 12111184 32782471
e) Loans and Advances
9616257 16609002
Total 87634780 149251880
Less: Current Liabilities &
Provisions

a) Current Liabilities
29082760 36979282
b) Provisions 4058402 4558958
total current liabilities 33141162 41538240
Net Current Assets 54493618 107713640
4) Miscellaneous expenditure (to
the extent not written off or
adjust)
8093677 90597
Total 115960844 185534457
74
BALANCE SHEET OF SNJ ALLIED PRODUCT LTD 2016-2017.
2016(Rs.) 2017(Rs.)
Sources of Funds
a) Share Capital 23050000 23050000
b) Reserves & Surplus 48579189 64515839
75
a) Secured Loans 183326617 184800352
h) Unsecured Loans
Total 254955806 272366191
1) Fixed Assets
a) Gross Block 148467660 243455584
Net Block 87628252 152856756
Total 131380084 162309893
2)Investment 2610000 2610000
Advances.
a) Inventories 109075147 100760856
c)Deposits 4321650 7347643
e) Loans and Advances 25367448 22284157
Total 171489791 176075489
Less: Current Liabilities &
Provisions
a) Current Liabilities 43292220 60299284
b) Provisions 7087149 8349907
4) Miscellaneous expenditure
(to the extent not written off or
adjust)
-144700
Total 254955806 272366191
BALANCE SHEET OF SNJ ALLIED SPRODUCT LTD 2017-2018
76
.
2017(Rs.) 2018(Rs.)
Sources of Funds
a) Share Capital 82032382 82021809
b) Reserves & Surplus 121127284 220125849
a) Secured Loans 383547595 336847834
h) Unsecured Loans
Total 586707261 638995492
1) Fixed Assets
a) Gross Block 440627226 554283910
Net Block 265711937 326693339
Total 275112195 341840410
2)Investment 3330520 3333953
Tax
Advances.
a) Inventories 258935801 271428799
c)Deposits 6990208 7787309
e) Loans and Advances 48086695 72333257
Total 481952306 499231975
Less: Current Liabilities & Provisions

a) Current Liabilities 153837804 187019585
b) Provisions 19897427 18442538
4) Miscellaneous expenditure (to the
extent not written off or adjust)
47471 51277
Total 586707261 638995492
BIBLIOGRAPHY
TITLE AUTHOR PUBLICATION EDITION
77
Financial Management Khan M.Y.& Jain P.K Tata Mc Graw – Hill 2nd
Publication Co. Ltd.

Financial Management Pandey I.M. Vikas Publishing Co.Ltd. 7th
Financial Management Mheswary S.N. Sulthan Chand & Sons 4th
Financial Management Prasanna Chandra Tata Mc Graw – Hill 4th
Publication Co. Ltd.

Cost & Management S.P. Jain & K.L. Tata Mc Graw – Hill 5th
Accounting Narang Publication Co. Ltd
Website:
 www.snjalliedproducts.com
 Annual Report of SNJ ALLIED Product (P) Ltd.
 www.google.com
78

Definition and Importance of Financial Function

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Definition and Importance of Financial Function

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INTRODUCTION

Definition and importance of financial function

Finance is the process of commission of accumulated funds to productive use.

Significance of financial management:

Financial management is the managerial activity, which is concerned with the

The subject of financial management as of immense interest both to the

Financial management provides them with conceptual and analytical insights to

Financial management may be defined as that part of management which is

According to Howard and Upton financial management involves the application of

N.G.Wright says financial management is intimately it self-woven into the fabric

1. Decisions on the capital structure.

2. Allocation of available funds to specific uses.

3. Analysis and appraisal of problems.

Financial management includes planning of finance, cash budgets and source of

Importance of the financial management

The financial management is of great importance in the present day corporate

The Various Details of cane crushing are as follows:

A system is series of functions or activities within an organization work together

Strategy rules to a set of decisions actions aimed at gaining competitive

Pricing Strategy of the Company

Guiding concepts, fundamentals ideas around which a business is built – must be

1. Comparative balance sheet

2. Commons size balance sheet

A ratio is defined as “the indicated quotient of two mathematical expressions” and as

 Is the firm in a position to meet its current obligations?

 How efficiently does the firm use its assets?

 Is the earning of the firm adequate?

The financial position and performance of a firm have to be compared over . It is

Ratio analysis is the systematic process of determining and interpreting the

2. Quick on acid test ratio.

 Total liabilities ratio

1. Net profit ratio

COMPARATIVE FINANCIAL STATEMENT

Comparative financial statements give information about the nature of changes

The following are the advantages of comparative financial statements:

2) In a single balance sheet the emphasis is on status whereas in a comparative

1. Primary sources and

a) Annual reports of the company.

b) Textbooks relating to the financial management.

Finance is the lifeblood of any organization. The future of any organization

information relating to the financial position of the company is of great interest to

performance and financial position of the stakeholder groups.

The main objectives of the study are as follows:

1. To highlight and evaluate the changes in the firm’s financial position.

3. To compare financial performance of present year with that of previous years.

4. To find out the operating efficiency of the organization.

5. To give appropriate suggestions for the better financial performance of SNJ

 The duration of the project is limited to a period of 2 months.

 Figures wherever appearing are rounded to the nearest numerical.

 Due to unavailability of data, information pertaining to 5 financial years was only

The techniques are involved

 Changes in working capital

 Comparative balance sheet

 Commons size balance sheet

SCHEDULE OF CHANGE IN WORKING CAPITAL FOR THE YEAR ENDED

2013 2014 Changes in

SCHEDULE OF CHANGE IN WORKING CAPITAL FOR THE YEAR ENDED

2014 2015 Changes in

SCHEDULE OF CHANGE IN WORKING CAPITAL FOR THE YEAR ENDED

2015 2016 Changes in

Loans and advances and

SCHEDULE OF CHANGE IN WORKING CAPITAL FOR THE YEAR ENDED

2016 2017 Changes in