A STUDY ON TREND ANALYSIS IN FINANCIAL STATEMENT AT

RK WINDOWS, TRICHY

CHAPTER-I

1.1 INTROUCTION

Trend analysis tries to predict a trend, such as a bull market run, and ride that
trend until data suggests a trend reversal, such as a bull-to-bear market. Trend analysis is
helpful because moving with trends, and not against them, will lead to profit for an
investor.

A trend is the general direction the market is taking during a specified period of
time. Trends can be both upward and downward, relating to bullish and bearish markets,
respectively. While there is no specified minimum amount of time required for a
direction to be considered a trend, the longer the direction is maintained, the more
notable the trend.

Trend analysis is the process of trying to look at current trends in order to predict
future ones and is considered a form of comparative analysis. This can include
attempting to determine whether a current market trend, such as gains in a particular
market sector, is likely to continue, as well as whether a trend in one market area could
result in a trend in another. Though an analysis may involve a large amount of data, there
is no guarantee that the results will be correct.

Trend Analysis gives you the ability to take a look at data over time for a long-
running survey. This can be useful for comparing quiz or test scores (see increase in
knowledge over the course if you administer the same survey multiple times over the
matter of a few weeks or months), or identifying trends for a satisfaction survey that is
distributed regularly.

1
 Trend Analysis can be extremely valuable as an early warning indicator of
potential problems and issues with product line and service level changes that impact
customers. If you see a dip in the "mean" for a Continuous Variable satisfaction question
after a particular "marketing event" you can immediately start investigating the dip and
explore causes of the decrease in satisfaction levels. It can also be used to gauge
response rates over time.

Marketing events can be anything from product or service enhancements and

upgrades to general communications to your customers. A good example is a "website
usability upgrade" - many organizations go to great lengths to make their website more
usable, but fail to assess impacts before and after the upgrades. A "Customer Pulse"
survey that asks visitors to rate the website on a 7pt scale should have a mean that is flat
before the upgrade. After the upgrade, Trend Analysis can reveal the "jump" or "decline"
in satisfaction levels of your customers. This can also be used to simulate, by using focus
groups or a representative sample, the potential increase or decrease in satisfaction
levels. This data can be further used for various cost/benefit analyses.

Trend Analysis can only be performed on "Quantitative" question types like

Multiple Choice, Rank order and Constant Sum. Questions that have textual input
(Qualitative) cannot be used for trend analysis.

Examples of Trend Analysis

In order to begin analyzing applicable data, it is necessary to first determine

which market segment will be analyzed. An example of sectors can include a focus on a
particular industry, such as the automotive or pharmaceuticals sector, as well as a
particular type of investment, such as the bond market. Once the sector has been
selected, it is possible to examine the general performance of the sector. This can include
how the sector was affected by internal and external forces. For example, changes in a
similar industry or the creation of a new governmental regulation would qualify as forces
impacting the market. Analysts then take this data and attempt to predict the direction the
market will take moving forward.

2
Trend Following

Trend following is a trading system based on using trend analysis and following
the recommendation produced to determine which investments to make. Often, the
analysis is conducted via computer analysis and modeling of relevant data and is tied to
market momentum.

Revenue and cost analysis. Revenue and cost information from a company's
income statement can be arranged on a trend line for multiple reporting periods and
examined for trends and inconsistencies. For example, a sudden spike in expense in one
period followed by a sharp decline in the next period can indicate that an expense was
booked twice in the first month. Thus, trend analysis is quite useful for examining
preliminary financial statements for inaccuracies, to see if adjustments should be made
before the statements are released for general use.

Investment analysis. An investor can create a trend line of historical share prices,
and use this information to predict future changes in the price of a stock. The trend line
can be associated with other information for which a cause-and-effect relationship may
exist, to see if the causal relationship can be used as a predictor of future stock prices.
Trend analysis can also be used for the entire stock market, to detect signs of a
impending change from a bull to a bear market, or the reverse.

When used internally (the revenue and cost analysis function), trend analysis is one of
the most useful management tools available. The following are examples of this type of
usage:

 Examine revenue patterns to see if sales are declining for certain products,
customers, or sales regions.
 Examine expense report claims for evidence of fraudulent claims.
 Examine expense line items to see if there are any unusual expenditures in a
reporting period that require additional investigation.
 Extend revenue and expense line items into the future for budgeting purposes, to
estimate future results.

3
 When trend analysis is being used to predict the future, keep in mind that the factors
formerly impacting a data point may no longer be doing so to the same extent. This
means that an extrapolation of a historical time series will not necessarily yield a valid
prediction of the future. Thus, a considerable amount of additional research should
accompany trend analysis when using it to make predictions.

Trend Trading Strategies

Trend traders attempt to isolate and extract profit from trends. There are many
different trend trading strategies using a variety of indicators:

Moving Averages: These strategies involve entering into long positions when a short-
term moving average crosses over above a long-term moving average, and entering short
positions when a short-term moving average crosses below a long-term moving average.

Momentum Indicators: These strategies involve entering into long positions when a
security is trending with strong momentum and exiting long positions when a security
loses momentum. Often times, the relative strength index (RSI) is used in these
strategies.

Trendlines& Chart Patterns: These strategies involve entering long positions when a
security is trending higher and placing a stop-loss below key trendline support levels. If
the stock starts to reverse, the position is exited for a profit.

Indicators can simplify price information, as well as provide trend trade signals or warn
of reversals. Indicators can be used on all time frames, and have variables that can be
adjusted to suit each trader's specific preferences. Combine indicator strategies, or come
up with your own guidelines, so entry and exit criteria are clearly established for trades.
Each indicator can be used in more ways than outlined. If you like an indicator, research
it further, and most importantly, test it out before using it to make live trades.

4
1.2 REVIEW LITERATURE

Joanne Loundes (2007), in the study “financial ratio performance of

Australian government trading enterprises pre-post reform revealed that during the
1990’s there were several measure introduced to improve the efficiency and financial
performance of government trading enterprise in Australia. The study reveals that there
does not appear to have been a noticeable enhancement in the financial performance of
most of this business although railways have improved slightly from a low base.

Sankaran.k (2008) in this study entitled “financial ration analysis ”

evaluation of pharmaceutical companies in India, a set of ten companies (five Indian
and five MNCS) were selected for the study. The period covered five year ending 2000.
The researcher analyzed the data with help of liquidity, profitability and solvency. The
financial figures of the 10 companies were used ALTMENs model to predict
bankruptcy and average return on net worth also being used to assess the data. The
study concluded that the MNC’s Parma companies are performing better than the Indian
companies.

Mukerjee(2010) in his study on “the rationale of debt in corporate capital

structure loan” was cheaper to rise as well as economical in servicing loan finance
ensured considered degree of taxation and hence leverage increased total value of the
firm. The corresponding entry of debt in the mix of corporate finance could be a only
exemplified from the changing behavior of debt equity ratio of current year. The upward
change was more pronounced in th1e case of new units. A study of the units setup
during the 1st six month of the financial year 1981-1982 reveled a step rise in the
proportion of debt in relation to equity ratio might not be un safe provided the firm was
capable of bearing the burden of interest and other matured debt contra distinctly if in a
firm this ability was poor a very low debt equity ratio was likely to act seriously upon
its viability.

Rammohan Rao and misra (2011) in his study on “capital markets in India”
were competitive their study examined the decision about internal and external finance
as inter related consequent upon a choice of the structure of current and fixed assets.
Secondly they analyzed the earning pattern of different types of funds to see if the
competitiveness hypothesis can be substantiated.

5
 Sathyanarayanrao (2012) in his article expressed some view on the corporate
tax effect on capital structure. The data for this study were taken from the bulletins. The
study converged period of the 19 year from the financial year .provided frame work
foresting the hypothesis higher the corporate income tax rate greater will be the
preference share capital. The simple correlation analysis was used to find out the nature
of relationship and the movement between debt capital on the one hand and corporate tax
rate equity divided rate, cost of debt and demand for capital s obtained from the growth
in fixed assets on the other.

Darrel Hulsey (2013) A-Study Steps to Effectively Financial Ratio Analysis As

stated by Darrel Hulsey, the basics of financial analysis usually mean calculating
different financial ratios and then coming to conclusions and clarification regarding on
how the company is financially performing in business activities. There are certain
things that must be considered before too many conclusions are drawn.Firstly,
understand what comprise different financial ratios before start analyzing company’s
data. Must take into consideration all financial ratios numbers derived from financial
statement comprise of balance sheet and income statement. Balance sheets represent
a reflection for a particular point in time. Income Ratio Analysis present a cumulative
time summary of performance. For example, year-end financial Ratio Analysis should
include a balance sheet that presents how various company accounts look on that
particular day at the end of the year, whereas the income statement shows how
company’s performance over the period

Michael D., John X. and Steven J “The effect of analysis of financial ratio
analysis on business “In measuring the performance of service firms, the most strongest
and consistent ratios used are activity and profitability ratios. Obviously, the profitability
ratios indicate that small service firms have higher returns to sales than large firms.
Specifically, service firms have less liquidity, greater activity, and higher profitability.
Interestingly, the small and medium size service firms had higher total debt levels. The
short-term debt findings show that service firms used significantly smaller amounts of
short term funding. Means that service industry more prefer to finance the business
activity through long term debt. On top of that in service industry, the most suitable of
ratio to measure business profitability is by calculating return on equity. Apart from that,
activity ratio was measured by a primary ratio and a secondary ratio. It refers to sales to

6
assets and sales to inventory respectively (Michael D., John X. and Steven J.). The
results found by Michael D. et. al. associated with the activity ratios for service firms
show a positive and significant relationship an concluded that size of firm very unrelated
to productivity of public firms in service sector

Altman and Eberhart “A Study On Financial ratio Analysis Steel industry “

Merger and acquisition for long have been an important phenomenon in the US and UK
economics. In India also, they have now become a matter of everyday occurrence. Gallet
C.A, “Merger and Market Power in the US Steel industry” He examine the relationship
between mergers in the U.S. steel industry and the market power. The study employed
New Empirical Industrial Organization (NEIO) approach which estimates the degree of
market power from a system of demand and supply equations.

1.3NEED OF THE STUDY

The study enables us to have access to various facts of the organization. It helps
in understanding the needs for the importance and advantage of materials in the
organization, the study also helps to exposure our mindsto the integrated materials
management the various procedures, methods and technique adopted by the organization.

The study provides knowledge about how the theoretical aspects are put in the
organization.

1.4 OBJECTIVES OF STUDY

Primary Objectives:

A study on “Trend Analysis of Financial Statement at RK

Windows in Trichy ”.

Secondary Objectives:

 To find out the relationship between the Current Assets and Current Liabilities
 To find out the relationship between the Quick Assets and Current Liabilities
 To find out the relationship between the Net profit and Sales
 To find out the relationship between the Current Assets and Current Liabilities
 To find out the relationship between the Net Sales and Average total assets

7
1.5 RESEARCH METHODOLOGY

Research is designed as a systematic, gathering recording and analysis of data about

problem relating to any particular field.

It determines strength reliability and accuracy of the project.

Research Design:

Research design pertains to the great research approach or strategy adopted for a
particular project. A research project has to be conducted making sure that the data is
collected adequately and economically.

The study used Analytical research design for the purpose of getting an insight over the
issue. It is to provide an accurate picture of some aspects of market environment.
Analytical research is used when the objective is to provide systematic description that
is as factual and accurate as possible.

Methodology of study

The information for the study is obtained from two sources namely.

 Primary Data
 Secondary Data

Primary Data

It is the information collected directly without any references .it is mainly through
interactions with concerned officers & staff ,either individually or collectively;
some of the information has been verified or supplemented with personal
observation. These sources include.

 Through interaction with the various department managers of RK UPVC.

 Guidelines give by the project guide S,Suresh.

8
Secondary Data

This Data id from the number of books and records of the company the annual report
published by the company and other magazines. The secondary data is obtained from the
following.

 Collection of required data from annual record ,monthly records internal

 Other books and journals and magazines Annual report of the company.

Tools Used

 Current ratio
 Quick ratio
 Net profit ratio
 Net working capital ratio

 Assets turnover ratio

1.6 LIMITATIONS OF THE STUDY

 The study was limited to only FIVE years Financial Data.

 The study is purely based on secondary data which were taken primarily from
Published annual reports of RK PVC.
 The ratio is calculated from past financial statements and these are not indicators
of future.
 The study is based on only on the past records.
 Non availability of required data to analysis the performance.
 The short span of the time provided also one of limitations.

9
 CHAPTER-II

INDUSTRY & COMPANY PROFILE

2.1 INDUSTRY PROFILE

Polyvinyl Chloride (PVC) is a rare material that delivers all your requirements
comprehensively. The incredible combination of properties it has to offer has contributed
to its widespread utilization.

Windows have a long winding history; they started as mere holes in walls for
ventilation purposes. Nevertheless, the framing of windows is a relatively recent
phenomenon with some of the first frames made of timber, lead and iron in the early 16th
century. Glass windows were a rarity then, and they were first seen on magnificent
Georgian architecture in Britain.

In the early 19th century, metal-framed windows became popular with the middle
and lower classes of society as the costs of production of glass and metals dropped due to
the Industrial Revolution.

However, lead lacked security and iron were heavy and required maintenance.
Therefore, these were soon replaced with a newfound element, Aluminium in the early
20th century. It was readily available, light, durable, and resistant to weather stress. But
aluminium being a good conductor of heat, offered very low thermal resistance during
harsh weather conditions. This resulted in the discovery of plastics and polymers later in
that century, taking the industry by storm.

Origin of PVC

Polyvinyl chloride (PVC) had gained extensive popularity by the mid-20th

century. It’s biological and chemical resistance, easy production and low cost, and
flexible workability brought it a commercial success in various applications like the
pipeline, plumbing, insulating, construction, and later as material for window frames. It
is an excellent material with properties similar to aluminium but with added thermal
resistance.

10
 However, it offered limited security and durability of merely 5-7 years. This was
a problem until it was discovered that without the addition of plasticizers, PVC imbibed
properties similar to wood. This came to be known as PVC and was used as a
replacement for aluminium and wood in windows, doorframes, and in other construction
applications like plumbing and drainage systems. First recorded commercial use of PVC
started in Germany in the 60s and soon spread to England and Ireland.

Commercial Popularity of PVC

The impressive properties of PVC like rigidity, lightness, thermal and weather
resistance, durability, and low cost of production made it a huge commercial success. It
is highly recommended by builders and architects till date, for its versatility and utility,
especially as a window framing material.

It has gained wide acceptance amongst home owners as well due to its superior
thermal insulation, a result of its air-tight design and low thermal conductivity, that helps
maintain the temperature of the room thus reducing the spends incurred on running of
heaters and air-conditioners.

Frames made from PVC are also leak proof and frost-free. Unlike wooden or metal
windows, they require very low maintenance with just regular cleansing with warm soap
water. Previously available only in white, they can now be customized in vibrant colors
or even with a wooden finish to complement decors of buildings. An additional survey
from BPF states that PVC stays viable and strong for more than 20 years at a stretch and
makes up for 90% of the replacement windows that are installed in the world now.

The Indian PVC doors and windows market is expected to grow at a CAGR of
7.0% during 2015-2020. The major drivers of the Indian PVC doors and windows market
are increasing new housing construction and replacement activities, which have
contributed to the growth of this market. Another important factor that drives this market
is their tangible and intangible benefiting features, such as the PVC doors and windows
are thermal, and water- and wind-resistant. They are corrosion-free. These doors and
windows are termite free, highly sound insulated, dustproof, highly durable, and need no
maintenance. They are energy efficient and could save energy up to 25% to 30%.

This report provides an analysis of PVC doors and windows market, including
analysis of market trends, competitive landscapes, company profiles, emerging trends,

11
and key drivers of industry growth. The study also includes Indian PVC doors and
windows market forecasts through 2020, segmented by regions, products, and
applications as follows:

The Indian PVC doors and windows market by regions:

 Northern Region
 Eastern Region
 Western Region
 Southern Region

The Indian PVC doors and windows market segmented by products:

 PVC Doors
 PVC Windows

The Indian UPVC doors and windows market by applications:

 Residential
 Commercial

On the basis of its comprehensive research, the author forecasts that the Indian PVC
doors and windows market is expected to depict a high growth during 2015-2020. PVC
windows market will remain the largest segment in terms of both value during the
forecast period. Increasing building construction activities is the major driving force of
the industry. Fenesta, LG Hausys, Welltech Systems are some of the players in the
Indian PVC doors and windows market.

This unique report will provide you with valuable information, insights, and tools
needed to identify new growth opportunities and operate your business successfully in
this market. This report will save hundreds of hours of your own personal research time
and will significantly benefit you in expanding your business in this market. In today’s
stringent economy, you need every advantage that you can find.

Some of the features of “Indian UPVC Doors and Windows Market 2015-2020:
Trends, Forecast, and Opportunity Analysis” include:

12
  Market size estimates: Indian PVC doors and windows market size estimation in
terms of volume (M lbs.) and value ($M) shipment.
 Trend and forecast analysis: Indian PVC doors and windows market trend (2009-
2014) and forecast (2015-2020) by regions, products and applications.
 Segmentation analysis: Indian PVC doors and windows market size by
application segments such as residential and commercial and by product
segments such as PVC doors and PVC windows, both in terms of value shipment.
 Regional analysis: Indian PVC doors and windows market breakdown by key
regions such as Northern Region, Eastern Region, Western Region, and Southern
Region.
 Growth opportunities: Analysis on growth opportunities in different applications,
products, and regions.
 Strategic analysis: This includes M&A, new product development, competitive
landscape, and expansion strategies of Indian PVC doors and windows market
suppliers.
 Emerging applications: Emerging applications of Indian PVC doors and windows
in various markets.
 Analysis of competitive intensity of the industry based on Porter’s Five Forces
model.

PVC is an energy-efficient material, reducing electricity utilization by minimizing

dependence on temperature regulation, thus saving precious fuel and keeping your bills
low. PVC has brought about a revolution in the fenestration industry by providing a low
cost, durable and environment-friendly alternative for construction materials.

13
2.2 COMPANY PROFILE

RK - windows, doors and partitions can instantly give any room a face-lift. Not
only do they look great but is sound-proof, monsoon-proof, termite-proof, dust-proof and
energy saving. We are making our products for our city’s living conditions.

RK –windows, Doors are easy to fit and can be used to change the character of
any room, extend it or bring in more light. We give a whole new Dimension for
Architectural works by introducing this product which is a substitute of wood,
Aluminium, Steel and other Metals.

RK - windows, doors and partitions are, for your better life, Security, and Health,
We have intentionally selected the best material for the fabrication of products. Our
profile, have many outstanding qualities such as Fire Insulation, Non-Heat Conduction,
External Noise Reduction, No Disturbance from Termites and Ants, High Durability,
Reinforcement for Security, Easy Maintenance. While purchasing RK product, the
customer is assured of design support, offsite fabrication, firm commitments on
deliveries and a trained installation team, to ensure consistent quality. Protect your
investment with RK range of products.

Weather Proof :

RK products are highly weather resistant quality is achieved by anti ultra violet
and high impact resistant formulation. It with stand long exposure in extreme weather,
like under scorching sun, stroms, dryness or high humidity. They are ideal to install in
special conditions like in coastal areas where the strong winds, heavy rains and salty air
effects the building. RK Product is more applicable with no quality deterioration ever.
They do not rot, nor warp, it can perfectly with stand years of weather beating.

PVC FOR DOORS

The basic material properties of PVC make it ideal for door application. These
properties include:

• Does not rot or biologically decompose

• Is resistant to weathering with low maintenance requirements

14
• Is tough on impact

• It retains its shape within normal climatic temperatures

• It can be reshaped at high temperature and can therefore be recycled

PVC FOR WINDOWS

Pure PVC is not quite suitable for window profiles. A small amount of stabilisers
and additives are required, the mix of which may differ between manufacturers.

The basic material properties of PVC make it ideal for window application. These
properties include:

• Does not rot or biologically decompose

• Is resistant to weathering with low maintenance requirements

• Is tough on impact

• It retains its shape within normal climatic temperatures

• It can be reshaped at high temperature and can therefore be recycled

The SWOT analysis summarizes the internal factors of the firm as a list of its strengths
and weaknesses and the opportunities and threats it faces from its external environment.

STRENTHS:-
1. Availability of manpower.

2. High quality product.

3. Low price high quality.

4. Availability of raw materials.

 WEAKNESS
1. Heavy transport charges.

2. Major consumption in paper industries but limited paper industries in

Tamilnadu.

15
 OPPORTUNITIES:-
1. Technological up gradation.

2. Foreign market expansion.

3. Online ordering process.

4. Product expansion.

 THREATS:-

1. Entry of competitors.

2. Product substitution.

16
Organization Structure:-

R
E
N
G
F
A
I
C L
A
E
A
M
N
G R
E

Finance department is headed by finance manager. Finance manager reports to

the General Manager and in certain strategy and urgent issues directly report to
managing director and take decisions. Finance Manager works in the coordination with
chief accountant, production manager, marketing manager, branch managers.

The Indian RK doors and windows market is expected to grow at a CAGR of

7.0% during 2015-2020. The major drivers of the Indian RK doors and windows market
are increasing new housing construction and replacement activities, which have
contributed to the growth of this market. Another important factor that drives this market
is their tangible and intangible benefiting features, such as the RK doors and windows
are thermal, and water- and wind-resistant. They are corrosion-free. These doors and
windows are termite free, highly sound insulated, dustproof, highly durable, and need no
maintenance. They are energy efficient and could save energy up to 25% to 30%.
 
On the basis of its comprehensive research, Lucintel forecasts that the Indian
PVC doors and windows market is expected to depict a high growth during 2015-2020.

A total of 62 figures / charts and 31 tables are provided in this 111-page report to
help in your business decisions. Sample figures with some insights are shown below. To
learn the scope of, benefits, companies researched and other details of Indian PVC doors
and windows market.

17
 

CHAPTER-III

DATA ANALYSIS AND INTERPRETATION

3.1 CURRENT RATIO

This ratio is used to assess the firm’s ability to meet its current liabilities. The
relationship of current assets to current liabilities is known as current ratio.

Current Assets

Current Ratio =

Current Liabilities

Current Assets are those assets, which are easily convertible into cash within
one year. This includes cash in hand, cash at bank, sundry debtors , etc...

Current Liabilities are those liabilities which are payable within one year. This
includes bank overdraft, sundry creditors, bills payable and outstanding expenses.

18
 TABLE 3.1

CURRENT RATIO

Year Current Assets Current Current Ratio

Liabilities
2012-2013 8133.07 2864.19 2.84

2013-2014 14479.12 6435.97 2.25

2014-2015 25459.61 12433.14 2.05

2015-2016 55132.02 24722.77 2.23

2016-2017 83467.24 37469.92 2.78

Source : Annual Report

INTERPRETATION:

Current ratio is increased in year 2012-2013 2.84 anddecreased in 2014-2015

2.05

19
 CHART 3.1

CURRENT RATIO

2.5

1.5 current ratio

0.5

0
2012-13 2013-14 2014-15 2015-16 2016-17

20
3.2 QUICK RATIO

This ratio establishes a relationship between quick/liquid assets and

current liabilities. It measures the firms’ capacity to pay off current
obligations immediately. An asset is liquid if it can be converted in to cash
immediately without a loss of value; Inventories are considered to be less
liquid. Because inventories normally require some time for realizing into
cash. This ratio is also known as acid-test ratio. The standard quick ratio is
1:1. Is considered satisfactory.

Quick Ratio = Quick Assets (current assets - Inventory)

Current Liabilities

21
 TABLE 3.2

QUICK RATIO

Year Quick Assets Current Quick Ratio

Liabilities

2012-2013 5690.11 2864.19 1.99

2013-2014 8902.79 6435.97 1.38

2014-2015 14755.46 12433.14 1.19

2015-2016 34365.82 24722.77 1.39

2016-2017 43449.05 37469.92 1.16

Source : Annual Report

INTERPRETATION

Quick ratio decreasedin year 2016-2017 1.16 and increased in year

2012-2013 1. 99.

22
 CHART 3.2

QUICK RATIO

1.8

1.6

1.4

1.2

1 quick ratio

0.8

0.6

0.4

0.2

0
2012-13 2013-14 2014-15 2015-16 2016-17

23
3.3 NET PROFIT RATIO

Net profit is obtained when operating expenses, interest and taxes are subtracted
form the gross profit. The ratio is measured by using the following formula

Net Profit Ratio= Net Profit X 100

Sales

24
 TABLE3.3

NET PROFIT RATIO

Year Net Profit Sale Ratio %

2012-2013 152541968 567486531 0.26 %

2013-2014 239640391 675345674 0.35%

2014-2015 460764761 263294149 1.75%

2015-2016 8977640 47250768 1.9%

2016-2017 13559830 502215926 2.7%

Source : Annual Report

INTERPRETATION

The Net Profit ratio increased in year 2016-17 2.7% and decreased in 2012-2013
0.26%

25
 CHART 3.3

NET PROFIT RATIO

2.5

1.5 NET PROFIT RATIO

0.5

0
2012-13 2013-14 2014-15 2015-16 2016-17

26
3.3NET WORKING CAPITAL RATIO

An analysis of the net working capital will be very help full for knowing
the operational efficiency of the company. The following table provides the
data relating to the net working capital of BCM.

NET WORKING CAPITAL = CURRENT ASSETS -- CURRENT LIABILITIS

27
 TABLE 3.4

NET WORKING CAPITAL RATIO

Year Net Working Net Assets Ratio

Capital

2012-2013 5268.89 247379368 2.12

2013-2014 8061.16 889507269 9.06

2014-2015 13026.47 127360477 10.22

2015-2016 30409.23 200131442 15.19

2016-2017 45997.32 205696391 22.36

Source : Annual Report

INTERPRETATION

Net working capital has increasedin year 2016-2017 22.36 and decreased in year
2012-2013 2.12

28
 CHART 4

NET WORKING CAPITAL RATIO

25

20

15

net working capitaL ratio

10

0
2012-13 2013-14 2014-15 2015-16 2016-17

29
3.5ASSETS TURNOVER RATIO
The assets turnover ratio is an efficiency ratio that measures a company ability to
generate sales form its assets by comparing net sales with average total assets

Assets Turnover Ratio = Net Sales

Average total assets

30
 TABLE 3.5

ASSETS TURNOVER RATIO

Year Sales Average Total Ratio

Assets

2012-2013 567486531 247379368 2.73

2013-2014 675345674 889507269 2.96

2014-2015 663294149 127360477 3.71

2015-2016 772507368 200131442 3.86

2016-2017 802215926 205696391 3.9

Source : Annual Report

INTERPRETATION

Assets turnover ratio is increased in year 2015-2016 3.86 and decreased in year
2012-2013 2.73

31
 CHART 3.5

ASSETS TURNOVER RATIO

3.5

2.5

2 Net assets turnover ratio

1.5

0.5

0
2012-13 2013-14 2014-15 2015-16 2016-17

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 CHAPTER-IV

FINDINGS, SUGGESTIONS,CONCLUSION

4.1 FINDINGS

 Current ratio is increasing in year 2012-2013 2.84 and decreasing in 2014-2015

2.05

 Quick ratio decreased in year 2016-2017 1.16 and increased in year 2012-

2013 1. 99.

 The Net Profit ratio increased in year 2016-17 2.7% and decreased in 2012-2013

0.26%

 Net working capital has increased in year 2016-2017 22.36 and decreased in year

2012-2013 2.12

 Assets turnover ratio is increased in year 2015-2016 3.86 and decreased in year

2012-2013 2.73

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4.2 SUGGESTION

 The management of the firm must be made more vigilant to maintain or

improve the present situation because if there is any further fall in the
current ratio. It may be a serious problems for the firm.
 A strict credit policy should be maintained. Proper inventory control
measures should be taken to reduce the unnecessary stock and to
maintain appropriate lead time.
 Company should adopt suitable policies and measures to sell the scrap
and by products obtained during the production process so that it will
generate additional source of revenues. Adequate sales promotion
efforts can be adopted to increase sales.

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4.3 CONCLUSION

According to this project we find that The company's overall position is at a good
position. The company achieves sufficient profits in past four years. Fixed assets are
efficiently utilized by the company due to which the profit of the company is increasing
every year.The long term solvency of the company is good. The company maintains low
liquidity to achieve high profitability .

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 BIBLIOGRAPHY

FINANCIALMANAGEMENT - I.M.Pandey

FINANCIALMANAGEMENT - PrasannaChandra

FINANCIALMANAGEMENT - M.Y.Khan&Jain

Journals & Magazines

 Indian
journalofcommerce

 Themanagementacco
unting.


WEBSITES
 Www. UPVC.com;
 Www.Investropedio.com;
 Www. Businessinsider.com;

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