INTRODUCTION

Financial statements are the basis for decision making by the

management as well as all other outsiders who are interested in the affairs of
the firm such as investors, creditors, customers, suppliers, financial institutions,

employees, potential investors, government and the general public the analysis
and interpretation of financial statements depend upon the nature and type of
information available in these statements. A financial statement is a collection

of date organized according to logical and consistent accounting procedures. Its

purpose is to convey an understanding of some financial aspects of a business

firm. It may show a position at a moment in time, as in the case of balance

sheet or may reveal a series of activities over a given period of time as in the
case of an income statement.

Thus the term financial statements generally refers to the two statements

i. The position statement or the balance sheet

ii. The income statement or the profit and loss account.
These statements are used to convey to management and other interested
outsiders the profitability and financial position of a firm.

Financial statements are the outcome of summarizing process of

accounting in the words of “JOHN N.MYER” the financial statement provide a
summary of the accounts of a business enterprise the balance sheet reflecting
the assets, liabilities and capital as on a certain date and the income statement
showing he results of operations during a certain period.“Financial statements
are prepared as an end result of financial accounting and are the major sources
of financial information of an enterprise.
 “Smith and Asburne” define financial statements as the end products of

financial accounting in a set of financial statements prepared by the accountant

1
of a business enterprise that purpose to reveal the financial position of the
enterprise, the result of its recent activities and an analysis of what has been
done with earnings. Financial statements are also called financial reports. In the

words of “Anthony” financial statement essentially are interim reports,

presented annually and reflect a division of the life of an enterprise in to more
(or) less arbitrary accounting period more.
FINANCIAL STATEMENT ANALYSIS:
Financial statements are prepared primarily for decision - making. The
play a dominant role in setting the frame work of managerial decisions. But the
information provided in the financial statements is not an end in itself as no
meaningful conclusions can be drawn from these statements alone. However,

the information provided in the financial statements is of immense use in

making decisions through analysis and interpretation of financial statements.
Financial analysis is the process of identifying the financial strengths and
weaknesses of the firm by property establishing relationship between the items

of the balance sheet and the profit & loss account. There are various methods
or techniques used in analyzing financial statements, such as comparative
statements, trend analysis, common-size statements, schedule of changes in
working capital, funds flow and cash flow analysis, cost-volume - profit
analysis and ratio analysis.
MEANING AND CONCEPT OF FINANCIAL ANALYSIS:
The term “Financial Analysis” also known as analysis and interpretation

of “Financial Statements” refers to the process of determining financial

strengths and weaknesses of the firm by establishing strategic relationship
between the items of the balance sheet, profit & loss account and other
frequently areas operative data.

“ANALYZING FINANCIAL STATEMENTS”

According to METCALF & TITARD, it is a process of evaluating the
relationship between component parts of a financial statement to obtain a better
understanding of firm’s position and performance.

According to MYERS, “It is largely a study of relationship among the

various financial factors in a business as disclosed by a single set of statements,

and a study of the trend of these factors as shown in a series of statements”.

The purpose of financial Analysis is to diagnose the information

contained in financial statements. So as to judge the profitability and financial
soundness of the firm. Just like a doctor examines his patient by recoding his
body temperature, BP etc., before making his conclusion regarding the illness
and before giving his treatments, a financial analyst analysis the financial
statements with various tools of analysis before commenting upon the financial
health or weaknesses of an enterprise.
1.2 NEED AND IMPORTANCE:

Over all financial analysis is used as the operating and financial

performance of the organization. The comparative financial statement and

ratios are used in setting in financial objective and evaluating post

performance. The need for the project is to study the financial performance of

SRI VENKATESWARA POLYMERS and so that one can advice for the

better performance in the future.

In order to perform well the financial statement is organized to collect

data according to logical and consists accounting procedures it purpose it to

convey an understanding of financial aspects of business firms and it may show

the position at a moment of time as in the case of a balance Sheet or may result

of series of activities conducted over a given period of time, as in the case of

income statements.
1.3 OBJECTIVES OF THE STUDY:

The following objectives are undertaken for the study.

1. To study financial performance analysis of the SRI

VENKATESHWARA POLYMERS during the period of 2014-2015 to
2018-2019.
2. To examine the efficiency of the SRI VENKATESHWARA
POLYMERS in managing its financial statements.
3. To find out the liquidity position of the SRI VENKATESHWARA
POLYMERS in order to determine its ability in meeting obligations.
4. To study the impact of the financial analysis on profitability during the
period. 2014-2015 to 2018-2019.
1.4 SCOPE OF THE STUDY:

 The scope of the study is to cover the comparative financial analysis

year 2014 to 2019, the comparison is made between the year by year
performance and financial data of the company.
 The study covers the financial performance of SVP.
 The study is made by making comparison of five years of its operations.
 The study cover aims to reveal where the stands in respect to liquidity
and an effective use of asset.

1.5 PERIOD OF STUDY:

The study is confined to evaluation of the last five years annual report
[i.e. from 2014-15 to 2018-19].
1.6 METHODOLOGY OF THE STUDY

A) COLLECTION OF DATA:
The study has been conducted in the organization SRI
VENKATESHWARA POLYMERS., more especially to examine financial
analysis in order to enquiry into the issues, profitability, prudent, Liquidity etc.

The enquiry has been made in departments of the organization i.e. finance and

accounts departments.
The data of SRI VENKATESHWARA POLYMERS for the period
2014-2015 to 2018-2019 to has been used in this study the data has been
collected from primary and secondary data.
The secondary data has been collected from the annual reports
newspaper, books and magazines of the Interconnected Stock Exchange Ltd
and different books issues of this study.

B) ANALYSIS OF DATA:
The Data has been analyzed by the following statements
1. Comparative Income Statement
2. Comparative Balance Sheet
3. Common Size Income Statement
4. Common Size Balance sheet
 5. Ratio analysis & Graph

C) PRESENTATION OF DATA:
The data has been represented in the form of tables.

1.7 LIMITATIONS OF THE STUDY

1. The study is based on the financial data provided by the company
financial statements therefore limitations of the financial statements are

also equally applicable for the study.

2. Only data of five years is taken for the study, which may not be
sufficient to measure the financial performance of the firm.
3. In all the calculations number of days in a year taken as 365 days.
4. Data is collect from two sources,
a) Primary sources
b) Secondary sources.
 COMPANY PROFILE

PROFILE OF POLYMER INDUSTRIES IN INDIA

Indian Polymer Industry:

The Indian polymer industry is small by international standards,

accounting for only around 2% of the global production. However, with
significant capacity additions taking place in India, it is expected to increase to
around 3% in the short to medium-term.

Plastics have become an integral part of our daily lives and are a
preferred material for wide spectrum of applications. India is rapidly catching
up with global trends in application development of plastics usage.

Over the last ten years, Polymers consumption in India has increased
from 1 million tons in 1991 to over 3.5 million tons in 2002. Although there
has been a large increase in polymer consumption in India, today, we still have

only a 3% share of the 120 million tons per annum worldwide polymer market.

Low per capita consumption of polymers, growing urbanization and

rising aspirations of the people, Govt. thrust on all around infrastructure
development and changing legislations & tariff structure will be growth drivers
for the polymer industry. This rapid growth will catapult India as the 3 rd largest
polymer consumer in the world after USA and China.

There is a renewed interest in agriculture and food processing with a

resultant demand in the rural areas for consumer durable and non-durable. The
economic growth will bring along a change in lifestyle of millions of people
generating strong growth for polymers, which goes to meet some of the basic
needs. Modern farming through plasticulture, packaging for processed foods
and consumer non-durable, better performing plastics for the automobiles and
consumer durables, infrastructure development through cost effective polymers

and innovative products for telecommunications and other information

technology services sector are the thrust areas for the Indian Polymer Industry

in the millennium.

Indian polymer industry is at crossroads and facing a lot of challenges

like:

1. Increasing globalization of markets

2. Overcapacity in the region

3. Rapid changes in technology

4. Social demands for higher environmental performance

5. Higher customer expectations

6. Growing end-user sophistication

7. Importance of non-price attributes in buying decisions

Indian Consumer is also truly emerging as the king due to exposure to

products and services responsible for raising living standard. Innovative
products with better performance standards and value for money will propel
growth for industrial sector. In the consuming sectors the key will be
innovation and keeping pace and changing habits and expectations of end
customers. Thus the industry has to gear up for paradigm shift in servicing the

value chain by transforming from product centric to service centric.

SECTOR MANAGEMENT:

Reliance's growth aspiration is firmly rooted in the commitment to the

growth of its customers and ultimate end markets. In order to face the
challenges by the polymer industry, Reliance has pioneered "Sectorial
Management Concept" covering all aspects of human life and end markets
thereof. Broadly the end markets serviced by polymer industry are being
classified

1.Packaging

2.Consumer goods

3.Infrastructure

4.Transportation

Within above sectors, the various end markets have different attributes,
growth drivers and stages of development vis-à-vis matured markets in the
developed countries.

To meet the challenges of a demanding market and to accelerate growth,

Reliance is working towards providing total solutions for development of end
markets on sustainable basis. Salient features of sectorial management are
enumerated below.

1. Sector Focus Value addition

2. Servicing Niche markets

3. Regulatory Changes
 4. Fixing of standards

5. Brand transplantation

6. Speed to Market

7. Compression of development Cycle

8. Cost effective & technically feasible products

9. Reactor molecule to the market place

10. Stimulant for entrepreneur development

11. Downstream Projects

Reliance has dedicated business development team for different sectors,

working with partners across the total value chain to provide quick responses to
market needs.

At Reliance, we Integrate knowledge and complex engineering to offer

Total Solutions for new, innovative and cost effective solutions for daily life.

Global petrochemical product prices and margins witnessed a sharp

increase in 2004, driven mainly by lingering worries over crude oil supply,
lower capacity additions and healthy demand growth (especially from China).

In 2004, the average price of naphtha was around $390 per tones ($196 per
tones in 2003), ethylene was $910 per tones ($466 per tones in 2003) and hype

was $955 per tones ($630 per tones in 2003). High prices, and the producers'
ability to pass on high feedstock costs, expanded cracker margins to $502 per

tones ($134 per tones in 2003, touched an all-time high of $914 per tones in
September 2004). CRIS INFAC forecasts that prices will remain strong over
the next 15-18 months. Domestic product prices will increase in line with
global prices in the medium term. In the medium term, any increase in
regulated natural gas prices will affect the profitability of gas-based producers

(IPCL and GAIL). The reduction in customs duty and the implementation of
the Asian Free Trade Agreement, will strain margins in the medium-to-long
term.

In 2004-05, CRIS INFAC expects polymer demand to increase by 2.5-

3.0 percent, as against the industry's earlier prediction of around 10 per cent. A

sharp jump in petrochemical product prices is expected to lead to higher usage

of recycled plastics and fillers, thus lowering polymer off take. In 2005-06,
CRIS INFAC expects a marginal recovery in polymer demand owing to
expectations of lower petrochemical product prices, led by lower crude oil
prices and polymer duty cuts. Among polymers, PP and hype are expected to

register healthy growth rates.

Most domestic polymer markets are characterized by significant

overcapacities. Moreover, the expected entry of new players like IOC, ONGC,

and CPCL will augment the surplus in the long run. Existing players also plan

to expand capacities. Capacity additions will increase the dependence on

exports. As a result, corporate profitability will be affected, to some extent,
over the long term. Moreover, new capacity additions, expected in the Middle
East in 2-3 years, will have the advantage of low-cost feedstock, intensifying
the competition.
PROFILE OF SRI VENKATESHWARA POLYMERS

Sri Venkateshwara polymers is a business which was started in the year 2002
with six members, namely
Mr. K Venkateshwarlu as Managing Director
Mr. Jagadishwar
Mr. Deval Reddy
Mr. K Srinivasulu
Mr. Ramaswamy
Mr. G Krishna Reddy
 Sri Venkateshwara Polymers is registered under Small Scale
Industries
Act in 2002. The organization is located in M/S Sri Venkateshwara
Polymers, Phase 1, Jeedimetla, Hyderabad.
 Sri Venkateshwara Polymers is built on 1000sq. feet area
manufacturing the products PVC PIPES.
 PVC stands for Polyvinyl Chloride and is a synthetic plastic polymer
which is a durable, strong plastic like substance.
 PVC is the world’s third-most produced synthetic plastic polymer.
 The products are used for the electrical, irrigation and sanitary
purposes in residential and industrial areas.
 SVP started production of PVC PIPES with different sizes available as
1, 20mm, 25, 75, 90, 110, to 200mm.
 SVP is running the production process in three shifts in a day with
maximum capacity of 100kgs per hour.
ADMINISTRATION AND MANAGEMENT
 Mr. Venkateshwarlu, MD looks over the Administrative, Marketing,
Production and Human Resource Departments.
 MR S Raman is the company’s Accountant who looks over the
Organization’s finance and control.
 The organization’s production runs daily with 42 members of labor with
3 shifts.
 The Marketing Department consists of 3 members of employees.

SOURCES OF RAW MATERIAL

The organization’s required raw materials are supplied by
1. Reliance Industries
2. IPCL
3. LIME Chemicals Ltd
4. Uniroyal Chemicals Ltd
5. Coral Petro Products
6. SRM Distributors
7. Calchem Industries India Ltd
8. Pranitha Shobhana Enterprises
9. Spectra World Systems and Services
10. RMB Enterprises
KEY CUSTOMERS
The organization’s important customers from the past are
1. DRDO, Hyderabad, Telangana
2. ECIL, Hyderabad, Telangana
3. BHEL, Hyderabad, Telangana
4. PXE, Hyderabad, Telangana

PRODUCTION PROCESS
The production process of the PVC pipes is in different stages with KOLD
SITE machine.

STEPS:
1. The molten mixture of the material is poured in a cast for shaping
surrounded by an outer shell.
2. The casts are made to be the exact width of the pipe.
3. The compete set is then placed into an oven to be cooked.
4. Once the pipe has solidified, it is cooed and moved into finishing.
5. Sections of the pipe are then cut based on common sizes and needs.
6. The sections are then coated in a chlorine solution to prevent harmful
bacteria from growing during shipping and use.
7. Once the coating is dried, the ends of each section are finished.
8. If the pipe is a smooth connection, the top of the pipe is sanded down to

ensure a perfectly flat surface.

9. For fitted pipes, the KOLD SITE machine engraves a series of grooves
into the pipe.
 10.As the grooves are cut, high-pressured water is sprayed on the pipe to
remove excess PVC fragments.
11.After the grooves are added, the ends are smooth and the sections are
sent into testing.

MARKETING OF THE PRODUCTS

 Sri Venkateshwara polymers PVC pipes are marketed in Telangana

i.e.
Hyderabad, Warangal, Khammam, Karimnagar, Nalgonda.
 Their PVC pipes are also marketed in AP mainly in Vijaywada and
Guntur.
 Supply Chain of the products of the organization is by an own vehicle
of the firm and also by using private transportations.
ORGANIZATIONAL STRUCTURE OF THE COMPANY

ORGANISATIONAL STRUCTURE

MANAGING DIRECTOR

ADMINISTRATION DEPT PRODUCTION DEPT FINANCE DEPT MARKETING DEPT

SUPERVISOR ACCOUNTS OFFICER MARKETING EXECUTIVES

 THEORETICAL FRAME WORK

TYPES OF FINANCIAL ANALYSIS:

Financial analysis can be classified into different categories depends upon:

1) The Material used and

2) The method of operation followed in the analysis or the modus operandi

of analysis.

Types of Financial Analysis

On the basis of material used On the basis of Modus Operation

External Internal Horizontal Vertical

Analysis Analysis Analysis Analysis

i) On the basis of material used:- According to material used,

financial analysis can be of two types.

(a) External analysis

(b) Internal analysis.

a) External analysis: This analysis is done by outsides that do not have

access to the detailed internal accounting records of the business firm.
These outsiders include investors, potential investors, creditors, potential
creditors, Govt. agencies, credit agencies & general public for financial
analysis; these external parties of the firm depend almost entirely on the
published financial statements. External analysis, thus serves only a limited
purpose.

b) Internal analysis: The analysis conducted by persons who have

access to the internal accounting records of a business firm is known as
internal analysis. Such an analysis can, therefore, be performed by
executive & employees of the org. as well as govt. agencies which have
statutory powers rested in them. Financial analysis for managerial purpose

is the internal type of analysis that can be affected depending upon the
purpose to be achieved.

ii) On the basis of modus operandi:- According to the method of

operation followed in the analysis, financial analysis can also be of 2 types

a) Horizontal analysis &

b) Vertical analysis

a) Horizontal Analysis: It refers to the comparison of financial data of

a company for 7 years. The figures for this type of analysis are presented
horizontally over a no. of columns. The figures of the various years are
compared with standard or base year. A base year is a year chosen as
beginning point. This type of analysis is also called “Dynamic Analysis” as
it is based on the data from year to year rather than on data of any one year.

The horizontal analysis makes it possible to focus attention on items that

have changed significantly during the period under review.
b) Vertical Analysis: Vertical analysis refers to the study of relationship
of the various items in the financial statements of one accounting period. In
these types of analysis the figures from financial statement of a year are
compared with a base selected from the same year’s statements. It is also
known as “Static Analysis” common-size financial statements & financial
ratios are the 2 tools employed in vertical analysis. Since vertical analysis
considers data for one time period only, it is not very conducive to a proper
analysis of financial statements. However, it may be used along with
horizontal analysis to make it more effective & meaningful.
METHODS OF DEVICES OF FINANCIAL ANALYSIS:
The analysis & interpretation of financial statements is used to determine
the financial position & results of operations as well. A No. of methods or
devices are used to study the relationship between different statements. An
effort is made to use those devices which clearly analyze the position of the
enterprise. The following methods of analysis are generally used.

1) Comparative Statements
2) Trend Analysis
3) Common-size Statements
4) Funds flow Analysis
5) Cash flow Analysis
6) Ratio Analysis
1) COMPARATIVE STATEMENTS:-
The comparative financial statements are statements of the financial
position at different periods; of time. The elements of financial position are

shown in a comparative form so as to give an idea of financial position at

two or more periods. Any statement prepared in a comparative form will be

covered in comparative statements. From practical point of view, generally,

two financial statements (balance sheet & generally, two financial
statements (balance sheet & income statements) are prepared in
comparative form for financial analysis purposes. Not only the comparison
of the figures of 2 periods but also be relationship between balance sheet &
Income statement enables an in depth study of financial position &
operative results. The comparative statement may show.

i) Absolute figures (rupee amounts)

ii) Changes in absolute figures i.e., increase or decrease in absolute
figures.
iii) Absolute data in terms of percentages
iv) Increase or decrease in terms of percentage.

The financial data will be comparative only when same accounting

principles are used in preparing these statements. In case of any deviations in
the use of account principles this fact must be mentioned at the foot of financial
statements & the analyst should be careful in using these statements. The 2
comparative statements are:-

i) Balance sheet &

ii) Income Statement

i) Comparative Balance Sheet: The comparative Balance sheet analysis
is the study of the trend of the same items, group of items & computed items in
2 or more balance sheets of the same business enterprise on different dates. The

changes in periodic balance sheet items reflect the conduct of a business. The

changes can be observed by comparison of the balance sheet at the beginning

& at the end of a period & these changes can help in-forming an opinion about
the progress of an enterprise. The comparative balance sheet has two columns

for the data of original balance sheets. A third column is used to show
increased in figures. The fourth column may be added for giving percentages

of increases or decreases.

Guidelines for interpretation of comparative balance sheet:

While interpreting comparative balance sheet the interpreter is

expected to study the following aspects.

(1) Current financial position & liquidity position

(2) Long-term financial position

(3) Profitability of the concern

ii) Comparative Income Statement:

The Income Statement gives the results of the operations of a business.
The comparative income statement gives an idea of the progress of a
business over a period of time. The changes in absolute data in money
values & percentages can be determined to analyze the profitability of the
business. Like comparative balance sheet income statement also has 4
columns. First two columns give figures of various items for 2 years. Third
& fourth columns are used to show increase or decrease in figures in
absolute amounts & percentages respectively.
2) TREND ANALYSIS:
The Financial statements may be analyzed by computing trends of series
of information. This method determines the direction upwards or
downwards & involves the computations of the percentage relationship that
computations of the percentage relationship that each statement items bears
to the same item in base year.

3) COMMON-SIZE STATEMENT:
The common-size statements, balance sheet & Income statement are
shown in analytical percentages. The figures are shown as percentages of
total assets, total liabilities & total sales. The total assets are taken as 100 &
different assets are expressed as a percentage of the total. Similarly various
liabilities are taken as a part of total liabilities. These statements are also
known as component percentage or 100% statements because every
individual item is stated as a percentage of the total 100.

1) Common-size balance sheet: A statement in which balance sheet

items are expressed as the ratio of each asset to total assets & the ratio of
each liability is expressed as a ratio of total liabilities is called common-size
balance sheet.

The Common-size balance sheet can be used to compare companies of

differing size. The comparison of figures in different periods is not
useful because total figures may be affected by a no. of factors. It is not
possible to establish standard norms for various assets. The trends of
figures from year to year may not be studied & even they may not give

proper results.
ii) Common-size Income Statement: The items in income statement
can be shown as percentages of sales to show the relation of each item to
sales. A significant relationship can be established between items of income
statement & volume of sales.

LIMITATIONS OF FINANCIAL ANALYSIS:-

Financial analysis is a powerful mechanism of determining financial
strengths and weaknesses of a firm. But, the analysis is based on the
information available in the financial statements. Thus, the financial
analysis suffers from serious interest limitations of financial statements as

studied in the previous chapter, the financial analyst has also to be careful
about the impact of price level changes, window - dressing of financial
statements, changes in accounting policies of a firm, account concepts and

conventions, and personal judgment, etc. It is only a study of interim

reports.

1. Financial analysis is based upon only monetary information & non-

monetary factors are ignored.
2. It does not consider changes in price levels.
3. As the financial statements are prepared on the basis of a going
concern, it does not give exact position. Thus accounting concepts
and conventions cause a serious limitation to financial analysis.
4. Changes in accounting procedure by a firm may often make financial
analysis misleading.
5. Analysis is only a means and not an end in itself. The analyst has to
make interpretation and draw his own conclusions. Different people
may interpret the same analysis in different ways.
6. Financial analysis is based upon only monetary information & non-
monetary factors are ignored.
7. It does not consider changes in price levels.
6. RATIO ANALYSIS
Ratio analysis is a widely used tool for financial analysis. It is defined as
the systemic uses of ratio to interpret the financial statements so that the
strengths and weakness of a firm as well it is historical performance and
current financial condition can be determined.

MEANING AND CONCEPT OF RATIO:

Since, we are using the term ratio in relation to financial statement
analysis, it may property mean “An Accounting Ratio” or Financial Ratio”. It
may be defined as the mathematical relationship between two accounting
figures. But these figures must be related cause and effect relationship to
produce a meaningful and useful ratio.

A ratio is a simple mathematical expression. It is number expressed in

terms of another number, expressing the quantitative relationship between the

two.

Ratio analysis is the technique of interpretation of financial statements

with the help of various meaningful ratios.
Ratios do not add to any information that is already available, but they
show the relationship between two items in a more meaningful way which help
us to draw certain conclusions.
IMPORTANCE OF RATIO ANALYSIS:
The ratio analysis is the most important tool of financial analysis. The
various groups of people having different interest are interested in analyzing
the financial information.

These groups use the ratio analysis to determine a particular financial

characteristic of the firm in which they are interest. The importance of ratio
analysis can be summarized for the various groups vested with diversified
interests as under:

a. For Short-term creditors:- The short-term creditors like bankers and

suppliers of material can determine the firm’s ability to meet its current
obligations with help of liquidity ratios such as current ratio and quick ratio.

b. For Long - term creditors:- The long-term creditors like debenture -

holders and financial institutions can determine firm’s long-term financial or
capital structure ratios such as debt equity ratio. The can known:

a. What sources or long-term finances are employed?

b. What is the relationship between various sources of finances?
c. Is there any risk to the solvency of the firm due to the employment
of excessive long term debts?
c. For Management:- The management can determine the operating
efficiency with which the firm is utilizing its various assets in generating sales

revenues with the help of activity ratios such as capital turnover ratio, stock
turnover ratio, etc., besides this, the management can use the ratios for
forecasting purposes also. The management can better assess the performance

of the firm.

i) By comparing the actual ratios with standard.

ii) By comparing the ratios of one period with those of another
period.
ADVANTAGES OF RATIO ANALYSIS:

1. Ratio analysis simplifies the understanding of financial statements.

2. Ratio bring out the inter relationship among, various financial figures
and bring to light their financial significance and it is a device to
analyze and interpret the financial health of the enterprise.
3. Ratios contribute significantly towards effective planning and
forecasting.
4. Ratios facilitate inter firm and intra firm comparisons.
5. Ratios serve as effective control tools
6. Ratios cater to the particular information need of particular person.

LIMITATIONS:
1. Ratio may not prove to be the ideal tool for inter firm comparisons.
When two firms adopt different accounting policies.
2. A study of ratios in isolation, without studying the actual figures, may
lead to wrong conclusions.
3. Ratios can be calculated only on the basis on the data if the original
data is not reliable, then ratios will be misleading.
4. Ratio analysis suffers from lack of consistency.
5. In the absence of well accepted standards, interpretation of ratios
becomes subjective.
 CLASSIFICATION:
Ratios are classified in a number of ways, depending upon the basis of
classification. The basis for classification can be.

1. Based on traditional classification

2. Based on functional classification
3. Based on importance
4. Based on the point of time in relation to which ratios are calculated.
5. Based on the usage of ratios
6. Based on the nature of ratios.

Financial Ratios in view of the requirements of various users. (i.e., short

term creditors, long term creditors, management, investors) of the ratios one
may classify the ratios into the following six groups.

a. Liquidity Ratios
b. Activity / Turnover Ratios.
c. Profitability Ratios
d. Coverage Ratios
 CLASSIFICATION OF RATIOS

Traditional Functional Significance

Classification Classification Ratios

OR OR OR

Statement ratio Classification Ratios according

Importance according to Tests to importance

Balance sheet Ratios Liquidity Ratios Primary Ratios

Position statement Leverage Secondary

Ratios Ratios Ratios

Profit & Loss A/c Ratios Activity Ratios

Revenue Income Profitability Ratios

Statement Ratio
DATA ANALYSIS AND INTERPRETATION
TABLE: 3.1
COMPARATIVE BALANCE SHEET FOR 2014 AND 2015
(Rs. In 000`s)

PARTICULARS AS ON AS ON INCREASE/ %
31,MAR 14 31,MAR 15 DECREASE CHANGE
CAPITAL AND LIABILITIES
Capital 1,476,321 761,322 714,999 93.92
Employee Stock Options
(grants outstanding net of deferred cost) 59,996 0 59,996 0.00
Reserves and Surplus 1,821,628 880,555 941,073 106.87
Deposits 44,152,028 31,239,958 12,912,070 41.33
Borrowings 1,543,988 1,298,006 245,982 18.95
Other Liabilities and Provisions 3,567,507 3,237,385 330,122 10.20

TOTAL LIABILITIES 52,621,468 37,417,226 15,204,242 40.63

ASSETS
Cash and Balances with RBI 3,293,269 1,924,747 1,368,522 71.10
Balances with banks and money at
call and short notice 1,383,599 1,082,533 301,066 27.81
Investments 18,466,332 12,919,197 5,547,135 42.94
Advances 26,583,103 18,673,218 7,909,885 42.36
Fixed Assets 814,444 1,071,495 -257,051 -23.99
Other Assets 2,080,729 1,746,036 334,693 19.17

TOTAL ASSETS 52,621,468 37,417,226 15,204,242 40.63

Contingent Liabilities 26,182,167 30,010,250 -3,828,083 -12.76

Bills for Collections 3,331,999 4,766,085 -1,434,086 -30.09
Source: Annual Reports of Sri Venkateshwara Polymers
CHART: 3.1

50,000
Thousands AS ON 31,MAR 14
40,000 AS ON 31,MAR 13
INCREASE/ DECREASE
% CHANGE
30,000
Values
20,000

12,912
10,000 7,910
5,547
715 941 1,369
246 330 335
0
Capital Reserves Deposits Borrowings Other Liabilities Cash and Investments Advances -257 Other Assets -1,434
and Surplus and Provisions Balances Fixed Assets -3,828
with RBI Bills for
Contingent Liabilities Collections
-10,000

Assets and Liabilities

INTERPRETATION:
1. From the above balance sheet it is found that capital in the year 2014 was 761,322

is increased to 1,476,321 and in the year 2015, it shows an increase of 93.92%.

2. When we look at reserves & surplus in the year 2014 is 880,555 and it has

1,821,628 in the year 2015. This shows an increase to 106.87%.

3. It is found that a deposit in the year 2014 was 31,239,958 which has an increase

to 44,152,028 in 2015. Hence we can say that increase of deposits to 41.33%.

4. It is found that total liabilities in the year 2014 was 37,417,226. It is increased by

52,621,468 in 2015 which shows a relative decrease by 40.63%.

5. Fixed assets in the year 2014 were 1,071,495 which have decreased to 814,444

in 2014. It shows it has decreased by 23.89%.

6. It is found that investment in the year 2014 was 12,919,197 and is increased to
18,466,322 in the year 2015. It shows a relative increase by 42.95%.
7. It is found that total assets has increased to 40.63% which shows the liquidity
good position of the company.

8. The contingent liabilities are also decreased.

 TABLE: 3.2
COMPARATIVE BALANCE SHEET FOR 2015 AND 2016
(Rs. In 000`s)

PARTICULARS AS ON AS ON INCREASE/ %
31,MAR
16 31,MAR 15 DECREASE Change

CAPITAL AND LIABILITIES

Capital 1,742,989 1,476,321 266,668 18.06
Employee Stock Options
(grants outstanding net of deferred cost) 53,016 59,996 -6,980 -11.63
Reserves and Surplus 4,600,449 1,821,628 2,778,821 152.55
Deposits 60,748,508 44,152,028 16,596,480 37.59
Borrowings 4,268,039 1,543,988 2,724,051 176.43
Other Liabilities and Provisions 4,361,817 3,567,507 794,310 22.27

TOTAL LIABILITIES 75,774,818 52,621,468 23,153,350 44.00

ASSETS
Cash and Balances with RBI 6,734,281 3,293,269 3,441,012 104.49
Balances with banks and money at
call and short notice 3,881,249 1,383,599 2,497,650 180.52
Investments 21,345,628 18,466,332 2,879,296 15.59
Advances 40,687,965 26,583,103 14,104,862 53.06
Fixed Assets 997,849 814,444 183,405 22.52
Other Assets 2,127,846 2,080,729 47,117 2.26

TOTAL ASSETS 75,774,818 52,621,468 23,153,350 44.00

Contingent Liabilities 57,336,724 26,182,167 31,154,557 118.99

Bills for Collections 3,449,413 3,331,999 117,414 3.52
Source: Annual Reports of Sri Venkateshwara Polymers
CHART:3.2

AS ON 31,MAR 14
Thou70,000
AS ON 31,MAR 15
60,000
INCREASE/ DECREASE

50,000 % CHANGE

Values
40,000
31,155
30,000

16,596
20,000
14,105

10,000
267 2,779 2,724 794 2,879 183 47 117
0
Capital Reserves Deposits Borrowings
and Other Investments Advances Fixed Assets Other Assets Contingent Bills for
Liabilities Liabilities Collections
Surplus and
Provisions

Assets and Liabilities

INTERPRETATION:
1. From the above balance sheet it is found that capital in the year 2015 was
1,476,321 is increased to 1,742,898 in the year 2016, it shows an increase of 18.06%.
2. When we look at reserves & surplus it is 1,821,628 in the year 2015 and it is
4,600,449 in the year 2016. This shows it is increased to 152.55%.
3. It is found that a deposit in the year 2014 was 44,152,028 which is increased to
60,748,508 in the year 2016. Hence we can say that increase of deposits to 37.59%.
4. It is found from the above balance sheet that total liabilities in the year 2015 was

52,621,468, it is increased by 75,774,818 which shows relative decrease by 44%.

5. Fixed assets in the year 2015 were 814,444 which have increased to 999,849 in
2015. It shows it has increased by 22.52%.
6. It is found that investment in the year 2015 was 18,466,322 increased to
21,345,628 in the year 2016. Its show the relative increase by 15.59%.
7. It is found that total assets has increased to 44% which shows the liquidity good
position of the company.
8. The contingent liabilities was increased to 118.99%
 TABLE: 3.3
COMPARATIVE BALANCE SHEET FOR 2016 AND 2017
(Rs. In 000`s)

PARTICULARS AS ON AS ON INCREASE/ %
31,MAR 17 31,MAR 16 DECREASE CHANGE
CAPITAL AND LIABILITIES
Capital 1,742,989 1,742,989 0 0.00
Employee Stock Options
(grants outstanding net of deferred cost) 26,133 53,016 -26,883 -50.71
Reserves and Surplus 4,214,238 4,600,449 -386,211 -8.40
Deposits 46,468,917 60,748,508 -14,279,591 -23.51
Borrowings 3,455,176 4,268,039 -812,863 -19.05
Other Liabilities and Provisions 3,522,727 4,361,817 -839,090 -19.24

TOTAL LIABILITIES 59,430,180 75,774,818 -16,344,638 -21.57

ASSETS
Cash and Balances with RBI 2,800,564 6,734,281 -3,933,717 -58.41
Balances with banks and money at 0
call and short notice 3,733,407 3,881,249 -147,842 -3.81
Investments 16,217,275 21,345,628 -5,128,353 -24.03
Advances 32,740,193 40,687,965 -7,947,772 -19.53
Fixed Assets 1,489,253 997,849 491,404 49.25
Other Assets 2,449,488 2,127,846 321,642 15.12

TOTAL 59,430,180 75,774,818 -16,344,638 -21.57

Contingent Liabilities 59,705,939 57,336,724 2,369,215 4.13

Bills for Collections 4,009,704 3,449,413 560,291 16.24

Source: Annual Reports of Sri Venkateshwara Polymers

CHART: 3.3
70,000
Thousands AS ON 31,MAR 15
60,000 AS ON 31,MAR 16
INCREASE/ DECREASE
50,000
% CHANGE

40,000
Values
30,000

20,000

10,000
0 -386 491 322 560
2,369
0
-813 -839
Capital Reserves Deposits Fixed Assets Other Assets Contingent Bills for Collections
-10,000 And Borrowings Other -5,128 Liabilities
Surplus Liabilities
and -7,948
Investments Advances
-14,280 Provision
-20,000

Assets and Liabilities

INTERPRETATION:
1. From the above balance sheet it is found that capital in the year 2016 was
1,742,989 and is increased to 1,742,898 in 2017, it is equal the above two years.
2. When we look at reserves & surplus in the year 2016 it is 4,600,449 and it has
4,214,238 in the year 2017. This shows a decrease of 8.40%.
3. It is found that a deposit in the year 2016 was 60,748,508 which has an increase
of 46,468,917 in 2017. Hence we can say that decrease of deposits to 23.51%.
4. It is found from the above balance sheet that total liabilities in the year 2016
75,774,818 is decreased by 59,430,180 which shows a relative decrease by 21.57%.
5. Fixed assets in the year 2016 were 999,849 which has increased to 1,489,253 in
2017. It shows it has increased by 49.25%.
6. It is found that investment in the year 2016 was 21,345,628 and is decreased to
16,217,275 in the year 2017. Its show the relative decrease by 24.03%.
7. It is found that total assets has decreased to 21.57% which shows the liquidity
position is not good of the company.
8. The contingent liabilities was increased to 4.13%. The above balance sheet shows
the decreased in total assets and total Liabilities by 21.57%.
 TABLE: 3.4
COMPARITIVE STATEMENTS FOR 2017 AND 2018
(Rs. In 000`s)

PARTICULARS AS ON AS ON INCREASE/ %
31,MAR 18 31,MAR 17 DECREASE CHANGE
CAPITAL AND LIABILITIES
Capital 1,999,852 1,742,989 256,863 14.74
Employee Stock Options
(grants outstanding net of deferred cost) 21,241 26,133 -4,892 -18.72
Reserves and Surplus 3,989,961 4,214,238 -224,277 -5.32
Deposits 47,873,288 46,468,917 1,404,371 3.02
Borrowings 5,035,120 3,455,176 1,579,944 45.73
Other Liabilities and Provisions 2,447,190 3,522,727 -1,075,537 -30.53

TOTAL LIABILITIES 61,366,652 59,430,180 1,936,472 3.26

ASSETS
Cash and Balances with RBI 2,916,641 2,800,564 116,077 4.14
Balances with banks and money at
call and short notice 409,839 3,733,407 -3,323,568 -89.02
Investments 20,179,302 16,217,275 3,962,027 24.43
Advances 34,597,101 32,740,193 1,856,908 5.67
Fixed Assets 1,357,554.00 1,489,253 -131,699 -8.84
Other Assets 1,909,215 2,449,488 -540,273 -22.06

TOTAL ASSETS 61,366,652 59,430,180 1,936,472 3.26

Contingent Liabilities 41,725,662 59,705,939 -17,980,277 -30.11

Bills for Collections 3,999,717 4,009,704 -9,987 -0.25
Source: Annual statements of Sri Venkateshwara Polymers
CHART: 3.4
70,000
AS ON 31,MAR 16
60,000
AS ON 31,MAR 17
Thousands
INCREASE/ DECREASE
50,000

% CHANGE
40,000

30,000
Values
20,000

10,000
257 1,404 1,580 3,962 1,857
-224
0
-1,076 -132
-540
Capital Reserves Deposits Borrowings Investments Advances Fixed Assets Other Assets Bills f-10ollections
and Other
-10,000 Liabilities
Surplus and
-20,000 Provisions -17,980
Contingent Liabilities
-30,000

Assets and Liabilities

INTERPRETATION:
1. From the above balance sheet it is found that capital in the year 2017 was
1,742,898 and is increased to 1,999,852 in 2018. It shows an increase of 14.74%.
2. When we look at reserves & surplus in the year 2017 it is 4,214,238. It is
3,989,961 in the year 2018. This shows it is decreased to 5.32%.
3. It is found that a deposit in the year 2017 was 46,468,917 which is increased to
47,873,288 in the year 2018. Hence we can say that increase of deposits to 3.02%.
4. It is found from the above balance sheet that total liabilities in the year 2017 was

59,430,180, it is increased by 61,366,652 which shows relative increase by 3.26%.

5. Fixed assets in the year 2017 were 1,489,253 which have decreased to 1,357,352
in 2018. It Shows it has decreased by 8.84%.
6. It is found that investment in the year 2017 was 16,217,275 and was increased to
20,179,302 in the year 2018. Its show the relative increase by 24.43%.
7. It is found that total assets has increased to 3.26% which shows the liquidity
position good of the company.
8. The contingent liabilities was increased to 30.11%.
 TABLE: 3.5
COMPARATIVE BALANCE SHEET FOR 2018 AND 2019

(Rs. In 000`s)

PARTICULARS AS ON AS ON INCREASE/ %
31,MAR 19 31,MAR 18 DECREASE CHANGE
CAPITAL AND LIABILITIES
Capital 2,001,712 1,999,852 1,860 0.09
Employee Stock Options
(grants outstanding net of deferred
cost) 28,133 21,241 6,892 32.45
Reserves and Surplus 4,185,054 3,989,961 195,093 4.89
Deposits 56,101,658 47,873,288 8,228,370 17.19
Borrowings 8,607,153 5,035,120 3,572,033 70.94
Other Liabilities and Provisions 2,499,690 2,447,190 52,500 2.15
TOTAL LIABILITIES 73,723,400 61,366,652 12,356,748 20.14
ASSETS
Cash and Balances with RBI 4,045,104 2,916,641 1,128,463 38.69
Balances with banks and money at
call and short notice 825,991 409,839 416,152 101.54
Investments 22,950,448 20,179,302 2,771,146 13.73
Advances 42,714,465 34,597,101 8,117,364 23.46
Fixed Assets 1,275,045 1,357,554.00 -82,509 -6.08
Other Assets 1,912,347 1,909,215 3,132 0.16

TOTAL ASSETS 73,723,400 61,366,652 12,356,748 20.14

Contingent Liabilities 32,923,379 41,725,662 -8,802,283 -21.10

Bills for Collections 4,918,381 3,999,717 918,664 22.97
Source: Annual Reports of Sri Venkateshwara Polymers
CHART: 3.5
60,000
Thousands AS ON 31,MAR 17

50,000 AS ON 31,MAR 18
INCREASE/ DECREASE
% CHANGE
40,000

30,000
Values
20,000
8,228 8,117
10,000 3,572 919
2 195 2,771
53 -83 3
0 Reserves Other Bills for Collections
Capital and Deposits Borrowings Liabilities Investments Advances Fixed Assets Other Assets
Surplus and
-10,000 Provisions
-8,802
Contingent Liabilities
-20,000

Assets and Liabilities

INTERPRETATION:
1. From the above balance sheet it is found that capital in the year 2018 was
1,999,852 and is increased to 2,001,712 in 2019. It shows an increase of 0.09%.
2. When we look at reserves & surplus in the year 2018, is was 3,989,961 and it is
4,185,054 in the year 2019. This shows an increase in 4.89%. We can say that
profitability has improved.
3. It is found that a deposit in the year 2018 was 47,873,288 which has increased to

56,101,658 in the year 2019. Hence we can say that increase of deposits to 17.19%.
4. It is found from the above balance sheet that total liabilities in the year 2018 was

61,366,652. It is increased to 73,723,400 which shows relative increase by 20.14%.

5. Fixed assets in the year 2018 were 1,357,352 which has decreased to 1,275,045. It
shows it has decreased by 6.08%.
6. It is found that investment in the year 2018 was 20,179,302 and was increased to
22,950,448 in the year 2019. Its show the relative increase of 13.73%.
7. It is found that total assets has increased to 20.14% which shows the liquidity
position good of the company.
8. The contingent liabilities was decreased to 21.10.
EVALUATING THE PERFORMANCE OF SRI
VENKATESHWARA POLYMERS BY USING TECHNIQUES
OF RATIO ANALYSIS FOR LAST FIVE YEARS 2013-2018
1. Current asset ratio
2. Absolute quick ratio / acid test ratio
3. Working capital turnover ratio
4. Debtors turnover ratio

1. Current Ratio:

Current ratio is the ratio of current assets to current liabilities. Current

assets are assets that are expected to be realized in cash or sold or consumed
during the normal operating cycle of the business or within one year whichever
is long run. They include cash in hand and at bank, bills receivable, net sundry
debtors, stock of raw materials, finished goods and work in progress, prepaid

expenses.
Current liabilities are liabilities that are to be repaid with in a period of
one year. They include bills payable, sundry creditors, bank over draft,
outstanding expenses, and income received in advanced, short term loans and
advance repayable within a year.

Current Assets
Current Ratio =
Current Liabilities

A current ratio of 2:1 is usually considered as ideal. The higher the current
ratio the larger is the amount of rupee available per rupee of current liability.
The more is the firm’s ability to meet current obligations and the greater is the
safety of funds of short term credit.

TABLE: 3.6
SHOWS THE CURRENT RATIO OF SRI VENKATESHWARA
POLYMERS FOR FIVE YEARS (2014-2019)
Year Current assets Current liabilities Current ratio

2014-2015 26,17,466 11,05,726 2.36

2015-2016 29,08,292 12,28,585 2.36
2016-2017 49,75,452 19,68,909 2.52
2017-2018 58,02,964 21,74,193 2.66
2019-2019 63,56,054 23,91,612 2.65

Source: Annual Reports of Sri Venkateshwara Polymers.

CHART: 3.6

2014-15 2015-16 2016-17 2017-18 2018-19

INTERPRETATION:

The above table-1 & Graphical Statement-1 show that current ratio of Sri

Venkateshwara Polymers is adequate. The current ratio of 2:1 signifies that

current assets are twofold of its short term obligations. The liquidity position as

measured by current ratio is better in case of studied organization.

2. Quick Ratio:

Quick ratio is a ratio of quick assets to quick liabilities. Quick assets are

assets that can be converted into cash without much loss.

Quick liabilities are liabilities which must be paid within one year.
All current assets except stock and prepaid expenses are also quick
assets.
All current liabilities except bank overdraft are quick liabilities.

Quick Assets
Quick ratio = -------------------------------
Quick Liabilities

Quick assets = current assets - (stock + prepaid expenses)

Quick liabilities = current liabilities - bank overdraft.

1. A quick ratio of 1 usually considered as ideal

2. A quick ratio of less than 1 indicates the inadequate liquidity of the
business.
3. A high quick ratio is not advisable.
TABLE: 3.7
SHOWS THE LIQUIDITY POSITION OF THE
SRI VENKATESHWARA POLYMERS FOR THE FIVE YEARS
(2014-2019)

Year Quick assets Quick liabilities Quick ratio

2014-2015 8,90,177 11,05,726 0.80
2015-2016 9,89,087 12,28,585 0.80
2016-2017 21,94,576 19,68,909 1.11
2017-2018 42,57,964 21,74,193 1.95
2018-2019 46,56,554 23,91,612 1.94

Source: Annual Reports of Sri Venkateshwara Polymers

CHART:3.7

2014-15 2015-16 2016-17 2017-18 2018-19

INTERPRETATION:
From the above table-2 and Graphical Statement-2. It represent that liquidity
position of the firm was inadequate during first two years i.e., (2014-15 &
2015-16) which is below the ideal. But during last three years the liquidity
position of Sri Venkateshwara Polymers is seem to be good and adequate.
3. Working Capital Turnover Ratio:
It is defined as
Cost of goods sold or net sales
Working capital turnover ratio =
Net working capital

 If cost of goods sold is not known net sales can be ake.

 Working capital = current assets - current liabilities.
 A high working capital turnover ratio indicates efficient utilization of
firm funds.

TABLE: 3.8
SHOWS THE WORKING CAPITAL TURN OVER RATIO OF SRI
VENKATESHWARA POLYMERS FOR FIVE YEARS
(2014-2019)

Working capital
Year Cost of goods sold Net working capital
turnover ratio
2014-2015 66,44,875 15,11,740 5.25
2015-2016 73,83,195 16,79,712 5.58
2016-2017 1,13,70,674 30,06,543 4.63
2017-2018 1,56,66,407 36,28,771 5.26
2018-2019 1,72,33,047 39,64,441 4.34

Source: Annual Reports of Sri Venkateshwara Polymers

CHART: 3.

2014-15 2015-16 2016-17 2017-18 2018-19

INTERPRETATION:
The working capital turns over ratio table-3 & Graphical Statement-3
represents that there is a moderate working capital management for Sri
Venkateshwara Polymers. There was a gradual decrease in the year 2014-2015.

Some appropriate strategies to be prepared for effective utilization of Net

Working Capital. A high ratio is preferable. It shows how Net Working Capital
is utilized.
4. Debtors turnover ratio:
Debtor’s turnover ratio express the relationship between debtors and sales.

Net credit sales

Debtors turnover ratio =
Average debtors

A net credit sale implies credit sales after adjusting for sales returns.

In case credit sales is not available sales can be taken as net sales (a high debt
turnover ratio is good for the firms for survival & collecting the debts &
payments of credit. A debt turnover ratio of 10 - 12 is considered as good.
Debtors include bills receivable. Debtors should be taken at gross value
without adjusting for provision for bad debts.

In case average debtors cannot be found closing balance of debt should be

taken.
TABLE: 3.9
SHOWS THE DEBTORS TURN OVER RATIO OF
SRI VENKATESHWARA POLYMERS FOR FIVE YEARS
(2014-2019)

Debtors turnover
Year Net credit sales Average debtors
ratio
2014-2015 84,37,733 8,09,943 10.41
2015-2016 93,75,259 8,99,937 10.41
2016-2017 1,39,48,190 15,06,952 9.25
2017-2018 1,90,87,482 31,43,461 6.07
2018-2019 2,09,96,230 44,31,292 4.73

Source: Annual Reports of Sri Venkateshwara Polymers

CHART: 3.9

2014-15 2015-16 2016-17 2017-18 2018-19

INTERPRETATION:
Debtors turnover ratio table-4 and graphical statement-4 shows that Sri
Venkateshwara Polymers is having the ratio in (2014-2015 & 2015-2016)
i.e.10.41, where it has decreased its efficiency to 6.07 in the year 2017-2018
and reduced its effectiveness drastically to 4.73 in the year 2018-2019 which
means that the debt ratio is not in a stable position.
FINDINGS

These findings are already given in the form of conclusions at the bottom of
each and every ratio table but finally another attempt is made as findings to tell
the working capital performance of the organization.

1. Net working capital of the company is considerably increasing year by

year during the period of study.

2. Current assets of the company are very adequate to total current

liabilities. Though it appears excessive than the standard ratio 2:1 in some
periods i.e. 2014-2015, 2015-2016, 2016-2017, 2017-2018, 2018-2019 in
accordance to meet the current liabilities.

3. To meet the challenges of current liabilities company properly managed

quick assets ratio according to standard in all the periods except during
the period 2014-2015, 2015-2016. However company’s liquidity to meet
short term liabilities is at satisfactory level.

4. Net working capital turnover ratio of company shows the satisfactory

level maintained during the period i.e. 4.39, 3.78 and 4.31. Net working
capital turnover ratio is at high level to indicate the adequate funds are
available to meet production expenses and other current obligations.

5. Debtor’s turnover ratio is high during the period 2014-2015, 2015-2016

according to the standards. Debtor’s turnover ratio has been considerably
decreased year by year due to increase in credit sales. According to
Debtors schedule of company, debtors is very large and debt collection
period has been considerably increased year by year from 2018-2019
which affects the current assets management.
6. Credit turnover ratio is satisfactory during the period 2014-2015 and
2015-2016 according to the standards i.e. 12%. Creditor’s turnover ratio

has been considerably decreased year by year. According creditors

schedule of company creditors are huge. And debt payment period
continuously increased year by year from 2014-2019 which shows the
efficiency of the credit management policy of the organization.

7. Stock turnover ratio has been considerably increased year by year of the

company during the steady period. This shows the efficiency of the
organization in converting their stock into sales. Stock conversion period
is decreased year by year during the steady period which shows the
effectiveness of the organization in converting their stock into sales.
SUGGESTIONS:
1. Net working capital is increasing year by year and the company should
maintain adequate net working capital. The available net working
capital should be utilized in advertising and promotion expenses which
increases the sales.
2. The current ratio of the company for all the years of study period was
greater than two, which is satisfactory and the company should maintain
this level continuously which fetches the payments for current
obligations.
3. The quick ratio shows fluctuations for the company and hence they are
requested to maintain at least 1 quick assets ratio for a healthy liquidity
position of a company.
4. As shown during the period of study debtor turnover ratio is in-adequate
which has an impact on receivables management. The company needs to
concentrate more on receivables management.
5. Creditors turnover ratio is adequate during the period of study. Hence it
is advised to maintain it continuously; it is advantage for the
organization to minimize the risk of working capital funds.
6. The company turnover ratio has been gradually increased during the
study period i.e. 2014-2019. Hence it is advised to maintain scientific
controlling techniques for effective inventory controlling management.
 BIBLIOGRAPHY

A) BOOKS:

1) I.M.Pandey, Financial Management,Vikas Publications.

2) Prasanna Chandra, Fundaments of Financial Management, Tata McGraw Hill.

3) S.P.Jain & K.L.Narang, Financial Accounting and Analysis.

4) Khan and Jain, Financial Management, Tata McGraw Hill.

5) Lawrence J Gilma, Principles of Managerial Finance, Addisawerly.

B) WEBSITES:

1) www.google.com/

2) www.wikipedia.com/

3) www.slideshare.net/

4) www.investopedia.com/terms/f/financial-statement-analysis.asp/

C) Annual Reports of Sri Venkateshwara Polymers