Ratio Analysis New Project

A Study on Ratio Analysis
INTRODUCTION
FINANCIAL MANGEMENT:
Financial management is that managerial activity which is concerned with planning and
controlling of the financial resources. It was a branch of economics till 1890 and as a separate
discipline, it is of recent origin. Still it has no unique body of knowledge of its own, and draws
heavily on the economics for its theoretical concepts today.
Today practicing managers are interested in this subject, because among the most
crucial decisions of the firm are those which relate to finance and understanding of the theory
of financial management, Provides them with conceptual and analytical insights to take those
decisions skilfully.
DEFINITIONS:
“Financial management is an area of financial decision making, harmonizing individual

motives and enterprise goals.
-Weston and Brigham
“Financial management is the application of the Planning and Control functions to the
finance function.”
-Howard and Upon
“Financial Management is the application activity of a business that is responsible for

obtaining and effectively utilizing the funds necessary for efficient operations.”
-Joseph and Massie
“Financial Management is concerned with the effective use of an important economic

resource, namely capital fund.”
-Ezra Solornn & Pringle John J.
A’s OF FINANCIAL MANAGEMENT
The following are the A’s of financial management
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 Anticipating financial needs

 Acquiring financial resources.
 Allocation of resources of investment
 ANTICIPATING FINANCE NEEDS:

The financial manager has to forecast expected events in business and notes their financial
implication, anticipates financial needs by consulting an array of documents such as the cash
budgets, to proforma income statements, the proforma balance sheet, the statement of the
sources and uses of funds, etc. Financial needs can be anticipated by forecasting expected
funds in the business and noting their financial implications. In a big business, a financial
forecast expands into an impressive array of documents.
 ACQUIRING FINANCIAL RESOURCES:

This refers to know when, where and how to obtain the funds which is business needs. Funds
should be acquired well before the need for these actually felt. The financial manager should
know how to tap the different sources of funds. The terms and conditions of the different
financial sources may vary significantly at a given point of time. Much will also depend upon
the size and strength of the borrowing company.
 ALLOCATING FUNDS IN BUSINESS:

Allocating funds in a business means investing them in the best plans of assets. Assets are
balanced by weighing then-profitability against their liquidity. Profitability refers to the
earnings of profits. Liquidity means closeness to money. The financial manger should steer, a
prudent course between over-financing and under financing. He should preserve a proper
balance among the various assets. He may adopt the famous managerial principles, which
states that the last rupee invested in each kind of an asset should have the same usefulness as
the last rupee invested in any other kind of an asset. He should, moreover, allocating funds
according to their profitability, liquidity and leverage.
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FUNCTIONAL AREAS OF FINANCIAL MANAGEMENT:
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INDUSTRY PROFILE
OVERVIEW OF FOOD PROCESSING INDUSTRY
The food processing industry plays a vital role in the diversification and
commercialization of agriculture by ensuring value addition to agricultural produce, generating
employment, enhancing the income of farmers and creating markets for export of agro foods.
In short, the food processing industry provides linkages and synergies between the industrial
and agricultural sector. Change in lifestyle and food consumption patterns and increase in the
disposable income are some of the key growth drivers for the industry.
FRUITS AND VEGETABLE PROCESSING
The total installed capacity of fruits and vegetables processing industry has increased
from 1.1 mn tones in January 1993 to 2.5 mn tones in January 2008. The processing of fruits
and vegetables is estimated to be around 2.2% of the total production in the country.
MEAT AND POULTRY PROCESSING
In meat and poultry processing sector, poultry meat is one of the fastest growing animal
proteins in India. Through 1991-2005, the estimated production was 1.5 mn tones, which has
grown at a CAGR of 13%. Per capita consumption has grown from 870 grams in 2000 to about
1.68 kg in 2005 and is expected to grow to 2 kg in 2010.
PULP AND PULP PRODUCTS
India is the largest Pulp producing country in the world. According to the Annual
Report FY07 of Ministry of Food Processing Industries of India, Indian production stands at 91
mn tones, having grown at a CAGR of 4%. Approximately 70 mn rural Indian households,
primarily, small and marginal farmers and landless laborers, are engaged in the business of
Pulp production.
MARINE PRODUCTS
The country has a long coast line of over 8000 kms, 50600 sq kms of continental shelf
area and 2.2 mn kms of exclusive Economic Zone. Of the total value of exports, 63.5% is
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contributed by frozen shrimps.Among all, the US is the largest importer of Indian marine
products, contributing to 13% in quantity and 30% in value of total exports, as per the Ministry
of Food Processing Industries.
GRAIN PROCESSING
Milling of rice, wheat and pulses form a part of the grain processing industry. India is
self reliant in grain production. It is the second largest rice producer in the world, with a 20%
share in the global production. Every year, India produces about 200 mn tones of different food
grains. All major grains, such as paddy, wheat, maize, barley, millets like jowar (great millet),
bajra (pearl millet) and ragi (finger millet) are produced in the country.
ALCOHOLIC BEVERAGES
India is the third largest market for alcoholic beverages in the world. The demand for
beers and spirits is estimated to be around 373 mn cases, according to the Annual Report FY07
of Ministry of Food Processing Industries of India. The alcoholic beverages industry provides
considerable employment opportunities in the agro – processing industry.
CONSUMER FOOD INDUSTRY
Consumer food industries include packaged / convenience food aerated soft drink and
packaged drinking water. Packaged food consists of ready-to-eat and ready-to-cook products,
pastas, breads, cakes, pastries, biscuits, rice flakes, bun rolls, noodles etc. As per the Ministry
of Food Processing Industries, bread and biscuits constitute the largest segment of consumer
food with the production of about 4 mn tones p.a. Of the total production of bread, 40% is
produced in the organized sector and the remaining in the unorganized sector. In production of
biscuits, the organized sector produces about 80% of the total production.
POLICY INITIATIVES
The Government has undertaken several policy measures and initiatives. Some
initiatives can be named as follows:
 Most of the processed food items have been exempted from the purview of licensing
under the Industries (Development and Regulation) Act, 1951.
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 In order to ease the availability of finance, the industry is included in the list of priority
sector.
 Excise duty levied on the ready-to-eat products, instant food mixes, aerated drinks and
fruits and vegetables processing units is reduced.
 Foreign equity up to 100% for most of the processed items except for alcoholic
beverages and those reserved for the small-scale units.
 A large number of foreign collaborations have been approved.
 Excise Duty of 16% on dairy machinery has been fully waived off and excise duty on
meat, poultry and fish products has been reduced from 16% to 8%.
FUTURE OUTLOOK
India has the potential of being the biggest producer within the food and agricultural
sector. In this respect, the country is endowed with a large production base for a variety of food
crops due to its varied agro-climatic conditions. The Government of India under the Ministry
of Food Processing Industries has adopted a Vision 2015 which envisages:
 Trebling the size of the processed food sector

 Increasing level of processing of perishables from 6% to 20%
 Value addition to increase from 20% to 35%
 Share in global food trade to increase from 1.5% to 3%
The areas identified to develop the food processing industries in India are - establishing
mega food parks, modernization of abattoirs, cold chain/value addition and preservation
infrastructure, upgrading safety and quality of street food and establishment / up gradation of
quality control laboratories.Policy reforms in the food processing sector are already in their
advanced phase, and have prompted several corporate like Reliance, ITC, Bhatia and Godrej to
invest in this sector. The growth in food processing industries would not only help in the
growth of agricultural sector, but also in the growth of these segments that may have remained
marginalized for a long time.
CLUSTER INSIGHTS
Cluster Insights are aimed at highlighting the performance and expectations of the
small and medium enterprises operating in the food processing sector in the Kolkata cluster.
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The sample considered for this analysis are the food processing firms profiled in this
publication; the variables considered for analysis include operational structure, business
practices, and future plans.
Key characteristics of the Kolkata food processing cluster
 Average revenue growth of the food processing companies in the last two years was
around 24%.
 24% of the companies possessed quality certifications such as ISO 9000: 2000 and
others.
 55% of the companies were involved in exports.
 41% of the profiled companies generated more than 50% of their total revenue from the
international market
 Asia (excluding Middle East) is the most preferred export destination.
 On an average, the companies operated at a capacity utilization of around 87%.
 59% of the companies were established prior to 1990. Around 38% and 3% of the
companies were established between1990-2000 and post 2000 respectively.
OWNERSHIP PATTERN
The ownership pattern of food processing companies was inclined more towards public
limited companies.
 Around 60% of the public limited companies fall in the Rs 10 – 100 mn turnover
bracket.
 Private limited companies in the Kolkata cluster recorded an average revenue growth of
25% in the last two years.
SUB SEGMENT
Most of the companies in the Packaged / convenience foods segment fall in the
turnover bracket of Rs 10 – 100 mn, followed by Pulp and Pulp products segment.
 60% of the companies in packaged / convenience foods segment were involved in

exports.
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 Companies dealing in Pulp and Pulp products operated at an average of 87% of their
installed capacity.
TURNOVER BRACKET
 25% of the companies in the turnover bracket of Rs 10 – 100 mn earned more than 50%
of their revenue from the overseas market.
 The companies in the turnover bracket of Rs 100 - 250 mn operated at an average of
88% of capacity utilization.
GROWTH AND FUTURE PLANS
 The food processing companies in Kolkata cluster expect an average revenue growth of
33% in the next two years.
 Notably, 17% of the profiled companies are expecting more than 50% revenue growth
in the next two years.
 Most of the companies have envisaged future plans. The plans range from capacity
expansion and modernization, to enter into new markets and diversification. For
instance, 40% of the companies are planning to tap new markets while 30% are willing
to expand the plant capacity.
CLUSTER BENEFITS AND HINDRANCES
Marketing initiatives, quality up gradation and funding from the financial institutions
were the dominant benefits derived by the companies operating in the cluster.
CHANGING FACE OF THE INDIAN FOOD PROCESSING INDUSTRY
While India's food processing industry features an array of products like fruit and
vegetables, meat and poultry, Pulp and Pulp products; other consumer product groups like
confectionary, chocolates and cocoa products, soya-based products, mineral water and high
protein food also falls under its purview. As per the figures given by the National Committee
on Food Processing and Regulatory Affairs, the food processing sector received investments
worth USD 144 million between 2008 and 2009, as against USD 5.7 million in the previous
year. During April 2009 - January 2010, the sector received USD 760 million worth of
investments.
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The Food Processing Industry In Retrospect With an aim to streamline the meat and poultry
processing industry in India, the government has launched the National Meat and Poultry
Processing Board (NMPPB) in New Delhi on February 2010. The new board will have 19
members and will address issues related to the production of clean and hygienic meat and meat
products. The board will also go a long way in helping the rural economy through employment
generation. Further, NMPPB will work towards raising domestic standards in meat and poultry
processing to international levels, developing uniform and effective meat quality testing
systems and addressing environmental pollution issues arising out of the conditions, which is
now prevalent in the meat industry. The cabinet had given the approval for the board's set up,
with an outlay of Rs 14.64 crore (Rs 146.4 million)
SETTING UP MEGA FOOD PARKS
Similarly a sum of Rs 3,700 crore has been assured in order to set up 10 mega food
parks in the first phase of the 11th five-year Plan. This includes Rs 2,500 crore-investment
from individual units, Rs 700 crore from special purpose vehicles (SPVs) and the Centre
contributing Rs 500 crore. A total of 30 mega food parks are expected to be set up during the
11th Plan. Each food park is expected to have 30 units, which are collectively expected to
attract Rs 250 crore. The SPV, which will require an investment of Rs 120 crore, will include
the government's contribution of Rs 50 crore. Hence, each park will attract an investment of Rs
370 crore. Apart from private entities, government agencies are also allowed to be part of the
SPV.
The parks will be set up in Chittoor (AP), Chikmagalur (Karnataka), Dharmapuri

(Tamil Nadu), Pune (Maharashtra), Jalandhar (Punjab), Jangipur (West Bengal), Rai Bareilly
(Uttar Pradesh), Haridwar (Uttarakhand), Nalbari (Assam) and Ranchi (Jharkhand). Private
partners, who have taken part in the SPV, include Patanjali Ayurved of Ramdev fame in
Uttarakhand, Shrei Infrastructure in West Bengal, Unity Infra in Punjab and Chordia Food
Products in Maharashtra. For the SPV to be approved, it should have a minimum of five
members, out of which one should be from the food processing industry.
SOME STAGGERING FACTS
India has 184 million hectares of cultivable land and the country produces 90 million
tones of Pulp (highest in the world), 150 million tones of fruit and vegetables (second largest),
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485 million livestock (largest in the world), 204 million tones food grain (third largest), 6.3
tones fish (third largest), 489 million poultry and 45,200 million eggs. In spite of having a vast
production base, the processing level is low - two per cent in fruits and vegetables, 26 per cent
for marine products, six per cent for poultry and 20 per cent for buffalo meat. With only 1.5 per
cent share of India's export of processed food in global trade; there lies immense potential for
investment and development in this sector.
INDIAN GRAPE PROCESSING BOARD
In early 2010, the government launched the Indian Grape Processing Board (IGPB) in
Pune, Maharashtra. This board will provide a platform for the advocacy of the Indian wine
sector. The board's major objectives are to formulate a vision and action plan for the Indian
wine sector's growth including research and development for quality up gradation in new
technologies/processes; to collaborate and advise wine-grape growers, the wine processing
industry, central and state governments on commercial, regulatory and technical issues related
to the Indian wine sector, including best practices in viticulture; to increase farmers' income
and employment generation, with a particular focus on rural areas; to encourage cluster
farming, contract farming and farm diversification; to bring the benefits of value addition to the
farming community and farmers fetching remunerative prices for their produce; coordinating
with premier Research and Development (RandD) institutes in order to identify and develop
appropriate root-stock and wine varieties of grapes suited for different geo-climatic regions of
India.
RESEARCH AND DEVELOPMENT
In August 2010, Sahai said that the government was planning to formulate a separate
policy for India's food processing industry and develop RandD activities in the sector. The
minister addressed this topic at a workshop on 'New Perspectives in Research and
Development in the Food Processing Sector,' jointly organized by the ministry and the
Federation of Indian Chambers of Commerce and Industry (FICCI). The proposed new policy
would lay special emphasis on PPP for giving a commercial orientation to RandD activities in
this sector. The ministry intends to chart out a roadmap for scaling up RandD activities in the
sector. It will also focus on technical capacity building for research with the ultimate aim of
increasing the processing of perishables from the 2008 - 08 level of 10 per cent to 20 per cent
by 2015 and raise value addition (of agricultural produce) from 25 per cent to 35 per cent.
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ACCEPTANCE AND FUTURE
Food service industry professionals opine that the product expectations have increased
from institutional clients, suppliers and retailers, especially with regards to the new technology
that augments itself within the food processing sector. Food service players find it relatively
easier to gain ground, now, within the market, thanks to the spurt of trade shows and
exhibitions, which showcase the latest offerings within the FandB sector. "I believe there is a
paradigm shift in the way end consumers and the industry perceives the food processing
industry. For example, we have observed that people are willing to accept processed frozen
foods now. A few institutional players have also changed/modified their style of operations,
food preparation and service to match the prerequisites of processed food. One cannot rely on
the seasonal availability of certain exotic fruits and vegetables, hence, frozen foods serve as the
most ideal option for such requirements," explained, Hrishikesh Bhatjiwale, Vice President -
Sales and Marketing, Tastee Choice.
Absence of a market strategy, inadequate export infrastructure and unstable supply base
are giving Indian mango growers a run for their money, more Soils, Nutrition, and Fertilizer in
the international markets where the Indian king of fruits is still to take its place. While India
produces over 11m metric tones of mangoes annually around 63% of world produce, its export
share is just 0.11%. However, APEDA has identified UK, Germany, the Holland, France, Italy
and Belgium for mango exports and plans aggressive marketing strategies there. APEDA is
making all efforts to make available latest packaging and processing technology for our
produce
India is one of the largest producers of Tropical fruits in the world and has established
the image in the international market. Due to its own advantages in climatic conditions, India
can produce wide variety of fruits and vegetables. Unfortunately, the processing technologies
and storage facilities, available are still primitive and enough importance has not been
accorded for this industry, which has tremendous growth potential. Only recently, both the
central and state governments have realized the importance and taken steps through wide
variety of measures for the growth of the industry. Andhra Pradesh, where the plant is coming
up, is known for variety of quality fruits particularly for Mango, Papaya, Guava, etc.,
With the support of Govt. bodies, many small-scale industries (overall capacity of upto
1000M.Tons of fruit pulp by canning process) have been established since 1970 by leading
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formers and fruit traders for processing the tropical fruits. In the early 1970’s India started
exporting this tropical fruit products to Gulf countries. However, could not able to meet
advanced international market requirements to enter into Europe and American countries due
to inferior product quality. Even the response in the GULF countries has not seen the potential
growth year by year due to quality related issues. From the year 1995, Indian manufacturers
realized on the technological gap in meeting the international standards when compared with
competitive producers of same products from North America, Peru, Brazil and Egypt.
Necessary steps were then initiated in establishing the new technologies called Aseptic Fruit
Pulp to compete in international markets. Nevertheless, today there are many small scale
industries producing low quality fruit pulps (canned pulp) and struggling to approach advanced
international markets. Though, the successful organizations like Foods and Inns, Clean foods…
etc could establish Aseptic process with latest technologies at that point of time, the plants
have not been designed completely to meet international standards. Mango, the most important
fruit of India, is grown in an area of 1.23 million ha with an annual production of 10.99 million
tonnes, which accounts for 57.18 per cent of the total world production. This paper presents
information on area and production, cultivars, hybrids and clone, agro techniques, disorders,
insect pests and diseases, harvest and postharvest management, export, problems and prospects
of growing mango in India.
Top producers of Mangoes, Mango grafts, Guavas, 2011-11
Production in
Country
millions of tons
India ~ 13.6
People's Republic of China 4.2
Thailand 2.5
Indonesia 2.2
Mexico ~ 1.9
Pakistan ~ 1.8
Brazil ~ 1.2
World total 34.9
Key ~ 2012 data
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India ranks second, next only to China, with a production of 47 million tonnes from an
area of 4.13 million ha during the year 2012 and accounting for 8.04 per cent of the total area
under fruits in the world (51.36 mill ha) and 9.34 per cent of the total world fruit production
(503.28 million tonnes). However, Banana, orange grapes and apple were the major fruits of
the world accounting for 14.45, 13.23, 13.01, 12.36 per cent of total world fruit production.
Mango accounted for only 3.11 of the total area under the fruits and 2.15 per cent of the total
world fruit production.
The total production of mango in the word was 26.11 million tonnes out of which India
alone produced 10.02 million tonnes, accounting for 38.38 per cent and ranked first. The total
area production of mango in the world was 26.574 million tonnes from an area of 3.69 million
ha out of which India alone accounted for 40.64 per cent in terms of production and 43.36 per
cent in terms of occupied area, making it the largest producer of mangoes in the world. China,
Thailand, Mexico, Pakistan, Indonesia, Philippines and Brazil were other important mango
producers accounting for 13.48, 6.40, 5.65, 4.10, 3.79,3.64 and 3.20 per cent of the total world
mango production, respectively. Amongst the commercial producers of mango, the highest
productivity of mango was found to be in Brazil, followed by Pakistan, Mexico and China.
Highest productivity of mango was observed in Cape Verde Is. (45.00 MT/ha), followed by
Samoa (40.00 MT/ha), Guatemala (26.75 MT/ha), Palestine (25.00 mt/ha), Peru (22.76 MT/ha)
and Israel (20.00 Mt/ha).
However, the productivity was lower in the countries producing mangoes

commercially. Amongst the commercial producers of mangoes, the Brazil had highest
productivity viz. 12.50 Mt/ha followed by Pakistan (10.37 MT/ha), Mexico (8.65 Mt/ha) and
China (8.56 Mt/ha).
The productivity in India was only 6.75 MT/ha, which was considerably lower vis a-vis
other countries of the world. Concerted efforts are to be made to increase the productivity of
mango to meet national standards and increase its availability for the domestic as well as
export market.Area, Production and productivity of mango in major mango producing
countries of the world during 2012
Area Production Productivity

Sl.
Countries
No. Prop. (Mill. Prop.
Mill. ha MT/ha
(%) tons) (%)
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1 India 1.6 43.36 10.8 40.64 6.75
2 China 0.419 11.35 3.582 13.48 8.56
INTERNATIONAL MARKETS FOR INDIAN MANGO
Asian producers find it easier to expand sales to the European Union. Europe’s
acceptance of different varieties is greater, because of a large demand from Asian immigrant
groups. Phytosanitary restrictions are less stringent. Transportation costs are not as big a factor
in exporting mangoes to the European Union as in exporting to the United States market: for
example, India and Pakistan are able to compete with non-Asian suppliers to the European
Union, whereas proximity gives Mexico and Haiti a clear advantage in supplying to the United
States market.
Fifty-four percent of European Union imports enter during the periods May to July and
November to December, with peak imports in June. French imports reach peak in April and
May, whereas United Kingdom imports are concentrated during the May to July. German
imports are spread more evenly throughout the year. Of the top suppliers, Brazil provided
chiefly during the period November to December, the United States during June to October,
South Africa during January to April and Venezuela during April to July. Pakistan supplies the
majority of its exports to the European Union during June and July; Indian exports take place
mainly during the month of May. Although a lion’s share of Indian mango goes to the Gulf
countries, efforts are being made to exploit
European, American and Asian markets. About 13,000 MT of Alphonso variety is

exported to Middle East, UK and Netherlands every year.The different products of mango
which are exported include mango chutney, pickles, jam, squash, pulp, juice, nectar and slices.
These are being exported to U.K., U.S.A., Kuwait and Russia. Besides these, the fresh
mangoes are being exported to Bangladesh, Bahrain, France, Kuwait, Malaysia, Nepal,
Singapore and U.K.
Hyderabad, March 31: Despite an expected low production of mangoes this year, the
total exports of mangos from Andhra Pradesh is likely to see a 100 per cent jump over last
year. Unlike last year, due to adoption of better pest management techniques and awareness of
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qualitative produce, the mango growers from the state are hoping for better price realization
from other countries during this season.
"Last year, the total production of mangoes was about 32 lakh tonnes with instances of
three times of flowering during the season. This led to good production but this year the output
is expected to fall by about one-third over last yearand#8217;s production," according to
sources. "But low volume in production will not reflect on the exports," said APEDA officials.
However, it is too early to predict on exports. The production is based on the rate of flowering
and climatic conditions during harvest period, they said. The reasons...
MANGO PRODUCING STATES IN INDIA
STATE/UT'S MANGO
Area (ha) Prod.(Mt)
ANDAMAN NICOBAR 0.30 2.60
ANDHRA PRADESH 480.40 4058.30
ASSAM 4.60 46.50
BIHAR 146.00 995.90
CHHATISHGARH 43.30 191.80
D and N HAVELI 1.20 12.50
GOA 4.60 7.60
GUJARAT 121.50 856.70
HARYANA 9.10 64.60
HIMACHAL PRADESH 38.70 24.00
JAMMU and KASHMIR 10.70 12.10
JHARKHAND 15.10 254.30
KARNATAKA 153.80 1694.00
KERALA 63.80 373.20
MADHYA PRADESH 14.20 127.80
MAHARASHTRA 474.50 597.00
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NAGALAND 0.30 0.40
ORRISA 177.60 577.50
PUNJAB 6.40 93.50
RAJASTHAN 5.90 93.00
TAMIL NADU 132.70 636.30
TRIPURA 4.30 13.20
UTTAR PRADESH 276.40 3588.00
UTTRANCHAL 38.40 120.80
WEST BENGAL 88.10 578.00
TOTAL 2312.30 15026.80
COMPANY PROFILE
HISTORY OF FOOD AND INNS PVT. LTD.

The division combines people with vast experience in agric-trading with the FOODS
AND INNS (P) Ltd Group’s credibility to justify its premier standing in the trading arena.
The division was set up in 1967 and since then has handled a wide range of products - such
as Sesame Seeds, Processed Fruits, Food grains, Aqua etc.
FOODS AND INNS (P) Ltd began its fruit processing operations in early
70s.However fruit processing operations have been given a special thrust since the last
season with an emphasis on developing strategic partnerships across the value chain
especially fruit procurement and processing. FOODS AND INNS (P) Ltd has established it's
presence as a reliable and competitive exporter to Coca Cola, USA, Western Europe, Far
East, Middle East etc.
BACKGROUND OF FOOD AND INNS PVT. LTD
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Situated at Chittoor in Andhra Pradesh, the mango belt in India, FOOD AND INNS
(P) Ltd (FIL) is a 100% Export Oriented Unit (EOU) processing Tropical Fruit Purees,
Concentrates and Fresh Fruits FOOD AND INNS Ltd was started keeping in mind the local
farming community wealth. The farming community is an integral part and forms the
backbone of the organization. In its effort to be a forerunner in the chosen areas of business
in terms of best practices in quality and technology, FIL plans to benefit armors, the
industry and the nation in a phased manner.
FOODS AND INNS Ltd believes in empowering farmers by providing technical

assistance from research institutes in the food industry to support the farmers in achieving
better quality and higher yields by developing the gardening and harvesting techniques.
Further to educating farmers with latest horticultural techniques, FOODS AND INNS LTD is
encouraging farmers to mobilize the fruits directly to the factory, thereby minimizing the fruit
handling damages and high value realizations. The first phase has been completed, by setting
up of state-of-the-art fruit processing plant to produce natural tropical fruit puree and
concentrates.
BOARD OF DIRECTORS
S. No Name of the Director
1 Field Marshal Sam Manekshaw - M.C. Chairman
2 Mr.Utsav Dhupelia Director
3 Mr. D.B. Engineer Solicitor
4 Mr.Raymond Simkins Foreign Director
5 Mr.C.M.Maniar Solicitor
6 Mr. D.D. Trivedi Ex. IIM Professor
7 Mr. M. B. Dalal Director
Mr. Utsav Dhupelia , a Chartered Accountant from U.K., looking after the routine
affairs of the company, is the brain and brawl for taking the company’s turnover from
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Rs.5Crores (USD1.1 MIO) to Rs.70Crores (USD 16 MIO) giving the status of government
recognized EXPORT HOUSE.
With the back up of technical and managerial support staff, the state of art technology
implementation, innovative R and D and Lab facilities, the doyen guidance of Mr. Utsav
coupled with the contribution of other directors, the company is poised for a steady and
continuous growth graph moving upwards in all Para meters.
MARKET PRESENCE
European Union
United States of America
Canada
Australia
Middle East including Iran and North Africa
Japan and South Korea
SHARE OF COUNTRIES MARKET
Country Name Market Share

Europe 55%
North America and Middle East 25%
USA and Canada 10%
Japan and South Korea 10%
FACILITY
FOODS AND INNS Ltd processing facility is located in Chittoor, spread over an area
of 15 acres. This place has been earmarked to host Integrated Food Complex of International
standards. The facility currently has a tropical fruit Puree / Concentrate processing plant and
the pack house for preparing the Fresh Fruits and Vegetables.
CUTTING EDGE TECHNOLOGY
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FOODS AND INNS (P) Ltd plant is equipped with state-of-the-art fruit puree
processing aseptic filling line of SIG- Mizzen, Italy to produce natural fruit pulps and
concentrates. The plant has one of the India's single largest fruit processing lines -10 TPH
ripen fruit processing with Aseptic Packaging.
INITIATIVES SPAN THE FOLLOWING DISCIPLINES
PLC operated equipments for better control over monitoring and operations with
supervisory units.
Two stage washing of fruits to ensure HACCP quality requirement.
Two-stage sterilization to retain the natural flavour and aroma.
High speed advanced Mono block aseptic filling machine supplied by SIG
Mizzen.
Integrated Enterprise Resources Planning system is in place to automate business
processes and provide data for analysis and reporting, allowing a closer control on
quality and operations.
EFFICIENT PLANT LAYOUT
Minimal drop in power and steam transfer.

Straight-line process flow design to maintain the hygiene• and control in
respective areas.
Special food grade self-levelling epoxy flooring to maintain optimum hygienic
conditions.
Curved corners and food grade epoxy painted walls to avoid dust accumulation
and to facilitate easy washing.
Advanced high raise insulated roofing with double layer GI Sheeting with air
extractors to maintain temperature inside the plant.
Utility lines are routed outside the plant to keep the interiors free from dust
accumulation.
VALUABLE INDUSTRIAL EXPERTISE
Page 19
FOOD AND INNS (P) Ltd is backed with strong support and service from its team of
highly qualified technical personnel and domain experts with perceptive knowledge and skill.
Powered by priceless hands-on experience these professionals are upgrading themselves
continuously to identify and introduce improved and innovative product offerings that would
delight customers worldwide and comply with the leading global quality standards.
PURE AND CONCENTRATE FACILITY
The fruit processing aseptic line is from SIG-Mazzini of Italy. The line has a capacity
to process 10 metric tones per hour ripened fruits. The processing line is fully integrated and
controlled by PLC.
PACK HOUSE
FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable processing
facility from Grief, Spain. Fresh fruits including mangoes, bananas are processed along with
tropical vegetables like Okra, Egg plant, Lemon, Bitter gourd etc. The facility also holds
ripening chambers, pre cooling chambers and cold storage to handle fresh fruits and
vegetables.
VAPOUR HEAT TREATMENT
To enable Fresh Mango exports to countries like Japan and Korea, FOOD AND INNS
(P) Ltd has commissioned the VHT facility. This ensures irradiation of the fruit flies in the
fresh fruit. FOOD AND INNS (P) Ltd is the first private organization to set up this facility in
the country.
WATER MANAGEMENT
Water is an essential and precious natural resource. It is a nature’s gift. Without water
there is no life on the earth. It is as important to the fruit processing industry as to the living
being. But, water is becoming scarce year by year due to increase n its consumption in
industries and agriculture sectors and indiscriminate use /wastage by human beings, therefore,
it needs a integrated and scientific approach for its management to use it so that undesirable
wastage is avoided which helps us to save water for right utilization .
Page 20
STAGE OF USE OF WATER TO THE BEST EFFECT IN OUR

FACTORY
Our main source of water is bore wells. The water is potable. Water from all bore wells
is collected in a sump. From there it is pumped to over head tank to supply to various locations
of use. To manage appropriately and conserve the water, we are taking following steps at
various locations of its use:
FRUIT WASHING
The water is re-circulated after filtration up to it becomes dirty. This water is

chl0rinated to control the contamination by continuous dosing of chlorine in the washing tub.
STEAM GENERATION
Water for boiler feeding is treated in water softener to reduce the hardness. The steam
condensate of evaporator is recycled to boiler to save water and energy as condensate will have
high temperature.
THE BEST EFFECT IN OUR FACTORY
Steam condensate from other heating equipments and Vapour condensate from pulp
concentration is collected in a tank to use in crate and floor cleaning.
Floor and equipments are cleaned by compressed water jet to conserve the water.
Treated effluent is used for civil construction and gardening.
Flow meters are installed at location of major use to have control over water utilization.
UV sterilizer is installed on main line of water, which feed to processing to sanitize the
water.
The water to be used for blending in product is treated in r o plant.
Drinking water is passed through zero-b filter.
WASTE MANAGEMENT
Our factory is equipped with aerobic effluent treatment plant of 250kl capacity.
Effluent from all locations of water use is collected through inter connected drains in ET plant.
It is aerated here and transferred to settlement tank for sedimentation of solid particles. The
Page 21
treated effluent is sent to oxidation pond. From pond, water is used for gardening and civil
construction. The sludge is transferred to drying bed. The dried sludge is used as manure in our
garden. The main feature of our company is that no effluent treated or untreated is released in
public drains and therefore, does not pose any danger to surrounding environment and public.
SOLID WASTE MANAGEMENT
Seeds of fruits
Stem ends and skin/peel of fruits and vegetables
Pumice-consists of fibbers and embedded pulp.
Spoiled fruits and vegetables
The seeds and peels of good fruits are passed second time through a pulped to remove
the remaining pulpy portion. The pulp extracted so and pumice are mixed and given an
enzymatic treatment and centrifuge to remove the extraneous materials so that pulp can be used
for making concentrate. This helps in improving the recovery out of fruits.
CERTIFICATIONS OF INTERNATIONAL QUALITY STANDARDS
FIL's quality and business objectives are designed to challenge the organization
through continual improvement and a zeal for results. At FIL quality determines not only the
end product but processes and operations at all levels. The company's laboratory is equipped
with the latest testing facilities to perform all necessary tests. Frequent and stringent quality
checks are carried out for Physical, Chemical, Organoleptic and Microbial parameters and
immediate corrective measures are carried out on detection of variance in parameters,
assuring a high quality end product. As a mandatory procedure, all finished products are
analyzed with extreme care before clearance by FIL's quality assurance staff.
OUR CERTIFICATIONS INCLUDE
HACCP (Food Safety Certification) by TUV, Germany

ISO 9001:2000 (Quality Management System) by TUV, Germany
Kosher by Star-K, USA
Sure Global Fair (SGF)
Page 22
Halal Certification
MANGO PULP INDUSTRY HOPES
Mango pulp production to reach 75,000 tones by 2011
Mango is raised in 36,000 hectares in chittoor district
Mango pulp processed annually is 50,000 tones
Farmers have to go to Bangalore, as there is no testing facility in Chittoor
Farmers are not getting fair price, even if there is a rise in prices in global market
CUSTOMER FOCUS
Loyalty and a strong relationship in business are built out of years of experience in a
particular industry. FOODS AND INNS (P) Ltd expertise in the business and its contacts
with Agents\Brokers, Blender-bottlers, End User, Off-shore logistical service providers has
made the supply chain process extremely competitive. Given our renewed emphasis on this
product line we are strengthening relationships in key markets across the buyer spectrum,
understanding unique requirements and delivering value to select global customers.
PRODUCT PROFILE
FRUIT PRODUCTS
Alphonso Totapuri Guava Papaya
PRODUCTS OF VEGETABLES
Page 23
FRUIT SEASONS
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Mango
Papaya
Guava
REVIEW OF LITERATURE
INTRODUCTION TO FINANCE
INTRODUCTION:
Finance is one the basic foundations of all kinds of economic activities.

It is the master key, which provides access to all the sources for being employed in business.
Hence it is rightly said that finance is lifeblood of enterprise, besides being the scarcest
elements, it is also the most indispensible requirement. Without finance neither any business
can be started nor successfully run. Provision of sufficient funds at the required time is the key
to success of concern. As matter of fact finance may be said to be the circulatory system of
economic body, making possible the needed co-operation among many units of the activity.
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FINANCIAL MANAGEMENET:
Financial management is a service activity which is associated with

providing quantitative information, primarily financial in nature and that may be needs for
making economic decision regarding reasoned choice among different alternative course of
action. Financial Management is that specialised function of general management which is
related to the procurement of finance and its effective utilisation for the achievement of
common goal of the organisation. It includes each and every activity of business. Financial
Management has been defined differently by different scholars’
DEFINITIONS:
“Financial management is an area of financial decision making,

harmonizing individual motives and enterprise goals.
-Weston and Brigham
“Financial management is the application of the Planning and Control

functions to the finance function.”
-Howard and Upon
“Financial Management is the application activity of a business that is

responsible for obtaining and effectively utilizing the funds necessary for efficient operations.”
-Joseph and Massie
“Financial Management is concerned with the effective use of an important

economic resource, namely capital fund.”
-Ezra Solornn & Pringle John J.
IMPORTANCE OF FINANCIAL MANAGEMENT IN PRESENT

INDUSTRIAL SETUP:
Proper finance is the real key to the success of any business enterprise.
Without proper finance no business can survive nor can it be expanded and modernized. It is
the finance which works like a lubricant which keeps the organisation dynamic, keeps men and
machine at work. The following are the points to highlight the importance of finance.
Page 25
 Finance for business promotion

 Finance management for optimum use of firm
 Use for co-operation in business activities
 Useful in decision making
 Determinant of business success
 Measurement of performance
 Basis of planning, co-ordination and control
 Useful to shareholders and investors.
 FINANCE FOR BUSINESS PROMOTION:
Every business, may it be big or small cannot be started without adequate

finance. Every new business starts with an adequate financial planning. The success or failure
of an enterprise depends upon financial planning. The sound financial planning needs attention
on degree of profitability, risks and control of various alternative plans.
 FINANCIAL MANAGEMENT FOR OPTIMUM USE OF FIRM:
Adequate finance provides means for smooth working of business units.

Finance is like oil to the machine; finance is needed on all levels such as Promotion,
Marketing, Development, Expansion and administration of day to day routine of the business.
 USE OF CO-OPERATION IN BUSINESS ACTIVITIES:
Adequate finance provides active co-operation between various business

activities such as: Production, Marketing, Storage etc. Poor financial management will affect
efficiently of all departments.
The lack of finance upsets the purchase of raw materials and paying the routing expenses.
Thus, production schedule is upset; side by side marketing and other activities will upset. Thus,
for proper and smooth conduct of business finance finds a central place in every organisation.
 USEFUL IN DECISION MAILING:
All financial decisions have a direct impact upon the business. These
decisions based on profitability. For example, work be done by man or machine, machine be
purchased or be taken on hire are such decisions which are associated with finance.
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 DETERMINE OF BUSINESS SUCCESS:
In every business may it be big or small, finance plays important role.

The finance department keep complete data and communicates these to the top management,
so that top management can take correcting action if conditions so need. The financial manager
can help in decision-making and improvement in business operation and can give suggestions
for best possible alternatives.
 MEASUREMENT OF PERFORMANCE:
It is a general belief that profitability of business operation is a sound

operation of all business activities. Financial decisions are associated with risk and uncertainty
reasonable care will avoid risk and uncertainties of business.
 USEFUL TO SHARE HOLDERS:
The management of companies is done by directors, selected or elected by

shareholders. Directors and representatives of shareholders; every suggestion of share holders
they try to execute. The investors too can give suggestions for proper working of the company.
Investors who are well informed cannot be misguided by brokers.
FIANANCIAL ANALYSIS
MEANING:
Analysis means to put the meaning of a statement into simple terms for
the benefit of a person. Analysis comprises resolving the statements by breaking them into
simpler statements by a process to rearranging regrouping and collection of information.
DEFINITION:
According to Myers “Financial analysis is largely a study of relationship

among 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 service of statements.”
OBJECTIVES OF FINANCIAL ANALYSIS:
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The following are the main objectives of financial analysis:

 To estimate the earning capacity of the firm.
 To gauge the financial position and financial performance of the firm.
 To determine the long term liquidity of the funds as well as solvency.
 To determine the debt capacity of the firm.
 To decide about the future prospects of the firm.
TOOLS FOR FINANCIAL ANALYSIS:
Following are the various tools available for financial analyst:
 Comparative statements Common size statements

 Statement of changes in wc Fund flow
 Trend analysis Cash flow
 Average analysis Ratio analysis
RATIO ANALYSIS
RATIO is an expansion of one number in relation to another. It is one of the

methods of analysing financial statements. Ratio analysis facilitates the presentation of the
information of financial statements in simplified, concise and summarized form. A ratio is
found by dividing one figure by another.
Ratio analysis was pioneered by Alexander wall who presenting a

system of ratio analysis in the year 1909. Alexander’s contention was that interpretation of
financial statements can be made easier by establishing quantitative relationship between
various items of financial statements.
MANAGERIAL USE OF RATIO ANALYSIS:
1. HELPS IN DECISION MAKING:
Financial statements are prepared primarily for decision making. But the
information provided in financial statements is not end in itself and no meaningful conclusion
can be drawn from these statements alone. Ratio analysis helps in making decision from the
information provided in these financial statements.
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2. HELPS IN FINANCIAL FORECASTING AND PLANNING:
Ratio analysis is of much help in financial forecasting and planning. Planning

is looking Ahead and the ratios calculated for a number of years work as a guide for the future.
Meaningful conclusions can be drawn for future from these ratios. Thus ratio-analysis helps in
forecasting and planning.
3. HELPS IN COMMUNICATING:
The financial strengths and weaknesses of a firm are communicating in a more

easy and understandable manner by the use of ratios. The information contained in the
financial statements is conveyed in a meaningful manner to the one
for whom is meant. Thus, ratios help in communication and enhance the value of the financial
statements.
4. HELPS IN CO-ORDINATING:
Ratios even help in co-ordination which is of utmost importance in

effective business management. Better communication of the efficiency and weakness of an
enterprise results in better co-ordination in the enterprise.
5. HELPS IN CONTROL:
Ratio analysis also helps in making effective control of the business.

Standard ratios can be based upon preformed financial statements and variance or deviations, if
any, can be found by comparing the actual with standards so as to take a corrective action at
the right-time. The weakness or the other wise if any come to the business.
6. OTHER USES:
There are so many other uses of the ratio analysis. It is an essential part
of the budgetary control and standard costing. Ratios are of an immense importance in the
analysis and interpretation of financial statements as they bring out the strength or weaknesses
of a firm.
IMPORTANCE OF RATIOS:
Page 29
Ratio analysis plays a significant role in ascertaining the financial

performance of a concern. The following are the various users of ratio analysis
 MANAGEMENT:
Ratio analysis helps a management to reap many managerial uses from
it. They are,
1. Ratio analysis helps a management assess the financial position of the firm and
2. making necessary decisions from the information available in the financial
statement.
3. It facilitates in financial forecasting and financial planning.
4. It helps in communicating the financial strength and weakness of a firm in a more
easy and understandable form.
5. It helps in the coordination of activities which is the most important functions of
business management.
6. It facilitates in effective control of the business by revealing the loop holes in it.
7. Ratio analysis also serves many other purposes to the management by becoming an
essential part in budgetary control and standard costing.
 INVESTORS/SHAREHOLDERS:
Ratios analysis helps investors or a shareholder to assess the financial

position of the concern in which he is going to invest. It warns him in making up his mind
whether the present financial position of the concern warrants him for further investment or
not. The calculation of various ratios helps him to do this.
 CREDITORS/SUPPLIERS:
Ratio analysis helps in the creditors or suppliers who extended short-

term credit to the concern, to know whether the financial position of the concern warrants their
payment at a specified time or not.
 EMPLOYEES:
Page 30
Ratios analysis also helps the employees who are interested in knowing
the financial position of the concern.
 GOVERNMENT:
Ratio analysis aids the government in assessing the financial health of

different industries and prepares its future policies.
LIMITATIONS:
The ratio analysis is one of the powerful tools to analyse financial statements.
Through ratios are simple to calculate and easy to understand, they suffer from some serious
limitations.
 Limited use of single ratio:

A single ratio usually does not convey much of a sense. To make a better
interpretation, a number of ratios have to be calculated which is likely to confuse the analyst
than help him in making any meaningful conclusion.
 Lack of adequate standards:

There are no well accepted standards of rules of thumb for all ratios which can
be accepted as norms. It renders interpretation of the ratios difficult.
 Inherent limitation of account:
Like financial statement ratios also suffer from the inherent
weakness of accounting records such as their historical nature. Ratios of the past are not
necessarily true indicators of the future.
 Change in accounting procedure:

Change in accounting procedure by a firm often makes ratios
analysis misleading e.g., a change in the valuation of methods of inventories from FIFO to
LIFO increases the cost of sales and reduces considerably the value of closing stocks which
makes stock turnover ratio to be lucrative and an unfavourable gross profit ratio.
 Window dressing:
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Financial statements can easily be window dressed to present a

better picture of its financial and profitability position to outsiders. Hence, one has to very
careful in making decision from ratios calculated from such financial statements. But it may be
very difficult for an outsider to know about the window dressing made by a firm.
 Personal bios:
Ratios are only means of financial analysis and not an end in itself.
Ratios have to be interpreted and different people may interpret the same ratio in different
ways.
 Incomparable:
Not only industries differ in their nature, but also the firms of the similar
business widely differ in their size and accounting procedures, etc. It makes comparison of
ratios difficult due to difference in definitions of various financial terms used in the ratio
analysis.
 Absolute figure distortive:

Ratios devoid of absolute figures may prove distortive as ratio analysis
is primarily a quantitative analysis and not qualitative analysis.
 Price level changes:

While making ratio analysis, no consideration is made to the changes in
price levels and this makes the interpretation of ratios invalid.
CLASSIFICATION OF RATIOS:
There are different parties interested in the ratio analysis for knowing the
financial position of a firm for different purpose. In view of various users of ratios, there can be
any number of ratios and these can be classified in a number of ways. However the
classification of ratios depends upon the objectives for which they are calculated. By one broad
classification, ratios can be grouped into following four categories.
 Liquid ratios
 Turnover ratios
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 Profitability ratios
 Solvency ratio
 Share holders ratio
LIQUIDITY RATIOS:
Liquidity of an organisation refers to its ability to meet its current

obligations as and when they fall due for payment over a period not exceeding one year. The
liquidity ratios assess the capacity of the company to repay its short–term liability. The
liquidity ratios are useful to various parties having interest in the enterprise over a short period.
CURRENT RATIOS:
It is the relationship between current assets and current liabilities. It is a

measure of liquidity and indicates enterprise’s ability to meet current obligations as represented
by current liabilities. It indicates availability of current
asset in rupee for every rupee of current liability. Ideal ratio is 2:1. High ratio indicates
existence of idle current assets.
 QUICK RATIOS:
Quick ratio is an improvement over current ratio. Distinction is made
between “quick current assets” also called quick assets and current assets. Quick current assets
are those current assets which are convertible into cash, rather early, such as cash, marketable
securities, debtors and bills receivable. This ratio is also known as “acid test Ratio” or “Liquid
ratio”.
 ABSOLUTE QUICK RATIOS:

Absolute quick ratio is also called as “Cash Position Ratio” or “Over Due
Liability Ratio”. This ratio establishes the relationship between the absolute liquid assets and
current liabilities. Absolute current assets include cash in hand, cash at bank and marketable
securities or temporary investments.
 NET WORKING CAPITAL RATIO:

The difference between current assets and current liabilities excluding short
term bank borrowings is called networking capital ratio constructed based on net assets.
Page 33
SOLVENCY RATIOS:
Solvency refers to the ability of a business to honour long-term

obligations like interested and instalments associated with long-term debts. Solvency ratios
indicate long-run stability of an enterprise. Lenders like financial institutions, debenture
holders, banks who give term loans to the enterprise, are interested in ascertaining solvency of
the business. Thus, they seek to assess whether the enterprise would be able to discharge
interest obligations, to repay loans as scheduled, and to ascertain its long-term financial
stability. Important solvency ratios are;
 INTEREST COVERAGE RATIO:

This ratio relates interest obligations to the profits (before interest and tax)
and indicates the no of times interest obligation is covered by the profits of the period. It is
always desirable to have profit more than the interest payable. This ratio is also known as
“Times Interest Earned”, or “Times Interest Covered”.
 DEBT RATIO:
This ratio is calculated to know the proportion of the debt in the capital
structure.
 DEBT EQUITY RATIO:

This ratio relates the debt to equity or owners fund. Debt here refers to long-
term liability which matures after one l year and includes long-term loan from financial
institutions. Owners fund includes equity share capital, preference share capital, general
reserve and capital reserves etc.
 DIVIDEND PER SHARE RATIO:
It is the dividends paid to the equity shareholders on a per share basis, in

other words, dividend per share is the net distributed profit belonging to the ordinary
shareholders divided by the number of ordinary shares outstanding.
 DEBT TO TOTAL FUND:
Page 34
Another way of looking at the Debt-Equity position is to compare the Debt to

Total funds Ratio. In this case, debt is expressed in relation to Total Funds i.e.., both debt and
equity. Debt here also refers to long-term liabilities which mature for a period after one l year.
Total fund refers to total of equity and debt.
PROFITABILITY RATIO
Every business enterprise operates with an objective to earn

profit. Profit is necessary for the survival and growth of the business enterprise. Profitability
ratios measure the profit earning capacity of an enterprise. Owners as well as financiers are
also interested in. Profitability ratios, as these reflect the ability of the enterprise to generate
return on capital employed. Important profitability ratios are as follows.
 Gross profit Ratio:

This ratio relates gross profit to sales to indicate gross margin on sales and
expressed as a percentage. This ratio is also known as “Gross Profit Margin” or “Gross Profit
Margin or Sales”. For the computation of the ratio we require gross profit and net sales. The
gross profit is the difference between sales and cost of goods sold.
 Net profit Ratio:
Net profit ratio relates net profit to sales and indicates net margin on sales.
This is also expressed in percentages, and is also known as Net Profit Margin or Net Profit
Margin on Sales
 Operating Ratio:
Operating Ratio establishes the relationship between operating cost and sales.
 Operating Expenses Ratio:
The operating expenses ratio explains the changes in the profit margin ratio.
A higher operating expenses ratio is unfavourable since it will leave a small amount of
operating income to meet interest, dividends.
 Return on Investment Ratio:

This ratio relates profit to investment in the enterprise and reflects the overall
profitability of the business in relation to investments made. Profit being an indicator of surplus
generated on money invested, this ratio measures the productivity of investment. It is expressed
in percentage.
Page 35
 Return on Equity Ratio:

This ratio determines the rate of return on investments in the business. As
owner or share holder this is one of the most important ratio as it shows the hard fact about the
business are you making enough of a profit to compensate you for the risk of being in business.
TURNOVER RATIO:
Turn over ratios measure how efficiently the enterprise employs the
performance of the business. The performance of an enterprise is judged with its sales
(turnover). In other words, highest sales mean better performance which also indicates
optimum utilization of physical resources, i.e., material, machine and men. These ratios are
also referred to as Activity Ratios or Efficiency Ratios.
 Capital turnover ratio:

Capital turnover ratio relates to capital employed and is a measure of
efficiency of the capital employed in the enterprise.
 Fixed assets turnover ratio:
This ratios of sales to fixed assets measures the turnover of fixed assets,
(fixed assets are used to business for producing foods). This ratio is measures the efficiency or
use of fixed assets.
 Current asset turnover ratio:

This ratios of sales to current assets measures the turnover of current assets,
(current assets are used to business for day to day operations). This ratio is measures the
efficiency or use of current assets.
 Total assets turnover ratio:
This ratio indicates the sales generated per rupee of investment in total asset.
Although fixed assets also contribute to the production and sales activities of the firm must
manage its total assets efficiently and should generate maximum sales their proper utilization.
 Working capital turnover ratio:
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Working capital is closely related to sales. It measures how efficiently the

working capital is utilized. Net working capital is the excess of current assets over current
liabilities. This ratio indicates number of times the net working capital is converted into sales.
The higher ratio reflects the efficiency in the management of working capital.
 Stock turnover ratio:

Stock turnover ratio is also known as Inventory ratio. The purpose is to see
that only the minimum funds have been locked up in inventory. Stock turnover ratio indicated
the number of times stock has been turned over during the period and evaluates the efficiency
with which a firm is able to manage its inventory.
 Debtors turnover ratio:

Debtors’ turnover ratio, also known as receivables turnover ratio, is a
relationship of sales with the outstanding amount due from debtors to whom goods sold on
credit.
 Creditors turnover ratio:

In the course of business operation, a firm has to, make credit purchases and
incur short-term liabilities. A supplier of goods, i.e.., creditors, is naturally interested in finding
out how much time the firm is likely to take in repaying its creditors; this can be known by
calculating creditors’ turnover ratio.
SHARE HOLDERS RATIO:
 Earning per share:
EPS measures the profit available to the equity share holder on a per share
basis, that is, the amount that they get on every share held. It is calculated by dividing the
profits available to the equity share holders by the number of outstanding shares. The profits
available to the ordinary shareholders are represented by net profits after taxes and preference
dividend.
 Dividend payout ratio:
Page 37
It is known as payout ratio. It measures between the earnings belonging to the

ordinary shares and the dividend paid to them. In other words the dividend payout ratio shows
the percentage share of the net profits after taxes and preference dividend is paid out as
dividend to the equity share holders.
PROCEDURE FOR FINANCIAL ANALYSIS:

1. deciding upon the extent of analysis:
First of all the depth, object and extent of analysis will be determined by
the analyst. The determination of these basic facts determines the scope of analysis, tool of
analysis and the amount and quality of financial data to be required. For example to measure
the financial position of the firm, the balance sheet of the firm will be analysed.
2. collection of necessary data:
All other necessary and useful information should be collected from the
management which has not been revealed in the published financial statements.
3. going through the statements:

Before analyzing and composing financial ratios, it is necessary for the
analyst to go through the various financial statements of the firm.
4. rearrangement of data:
Before making actual analysis and interpretation the analyst must
rearrange the date provided by these statements in a useful manner. The appropriation of
figures, reclassification, and consolidation of items may be done as preliminary step to actual
analysis.
5. final analysis:
Now the actual analysis is made. For this purpose any of the above
techniques may be adopted.
6. interpretation and presentation:
After analyzing the statements the interpretation is made and the
inferences drawn from the analysis are presented in the shape of reports to the management etc.
Page 38
RESEARCH METHODOLOGY
Research methodology is a way to solve the research problem systematically.

It can be understood as a science of studying how research is done significantly.
RESEARCH:
Research in common parlance refers to a research for knowledge. Research

can be defined as systematic search for pertinent information as a specific investigation.
MEANING OF RESEARCH:
Page 39
“Research means an intensive powerful search for the discovering of

true values in scientific way. It is no merely accumulation and communication of social factors
and formulation of generalization a basic for action and foresight.”
The study is based entirely on the data that has collected. This data for every
study is of 2 types.
1. Primary date
2. Secondary data
PRIMARY DATA:
Primary data as it is known as synonymous to first hand information that is

exclusively collected for the sake of the study.
SECONDARY DATA:
Secondary data is one which has been already collected for some other
purpose and now which is being for the study.
 Initially preliminary discussion with the head of commercial department and chief
accountant was carried on.
 Information of the theoretical part was taken from reference book.
 Profit/loss and Balance Sheet are taken from company’s annual report.
 Some more information gathered from lecturers of our college.
 Some more information gathered from financial books.
The various concepts covered in the report are calculated by studying
Balance Sheet and Profit/loss accounts.
The ratios are calculated by studying Balance Sheet and the necessary
information required for the study was being obtained from fruitful interaction of the
researched with the employees (Finance Department) of the organisation.
Page 40
DATA ANALYSIS AND INTERPRETATION
LIQUIDITY RATIOS
1. CURRENT RATIO:
Current asset
Current ratio=-----------------------
Current liability
year Current Assets Current liability Ratio (Times)

2010-11 2,28,07,04,176 1,18,10,03,846 1.9
2011-12 3,50,01,93,294 1,31,22,72,610 2.7
2012-13 5,97,59,61,025 2,02,07,44,952 3.0
2013-14 5,25,99,00,816 1,84,30,91,712 2.9
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2014-15 6,31,06,28,185 3,19,08,56,472 2.0
Current Ratio
3.5
3
3 2.9
2.7
2.5
2
2 1.9
1.5
0.5
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
The standard norm for current ratio is 2:1. From the above analysis we come to
know that in the financial year 2012-2013 it was 3.0:1 but gradually it was decreasing to 2.0:1
but it was satisfactory.
2. QUICK RATIO:
Liquid assets
Quick ratio=-----------------------
Current liability
year Liquid assets Current liability Ratio (Times)
2010-11 1,70,87,41,955 1,18,10,03,846 1.4
2011-12 2,57,84,79,879 1,31,22,72,610 2.0
2012-13 4,03,26,25,321 2,02,07,44,952 2.0
2013-14 3,65,16,32,143 1,84,30,91,712 2.0
2014-15 4,13,49,04,610 3,19,08,56,472 1.3
Page 42
Quick Ratio
2.5
2 2 2
2
1.5 1.4
1.3 Ratio (Times)
0.5
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCES:
The standard ratio for quick ratio is 1:1. From the above analysis we come to
know that the quick asset ratio is greater than the standard norm. It shows that the ratio is
satisfactory.
3. ABSOLUTE QUICK RATIO
Cash
Absolute quick ratio=------------------
Current liability
year Cash Current liability Ratio (Times)

2010-11 20,52,12,363 1,18,10,03,840 0.17
2011-12 25,60,02,280 1,31,22,72,610 0.20
2012-13 51,14,53,739 2,02,07,44,952 0.25
2013-14 70,28,51,806 1,84,30,91,712 0.38
2014-15 62,46,72,429 3,19,08,56,472 0.20
INFERENCE:
Page 43
The standard norm for the absolute quick ratio is 1:2 the company is filed in
keeping sufficient cash and bank balance and marketable securities.
4. NETWORKING CAPITAL RATIO:
Net working capital
Net Working Capital Ratio=-------------------------

Total asset
Year Net working capital Total asset Ratio (Times)

2010-11 1,09,97,00,330 2,51,15,37,662 0.44
2011-12 2,18,79,20,684 3,97,98,34,518 0.55
2012-13 3,95,52,16,073 6,66,31,41,085 0.59
2013-14 3,41,68,09,104 7,09,70,82,601 0.48
2014-15 3,11,97,71,713 6,56,46,74,528 0.48
Net working capital ratio

0.7
0.59
0.6
0.55
0.5 0.48 0.48

0.44
0.4
Ratio (Times)
0.3
0.2
0.1
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Page 44
Net working capital ratio in the financial year 2012-2013 is 0.59 and
0.48 in both the years i.e.., 2013-14 and 2014-15.
SOLVENCY RATIO
1. INTEREST COVERAGE RATIO:
Profit before interest and tax
Interest coverage ratio=------------------------------------------

Fixed interest
year PBIT Fixed interest Ratio (Times)
2010-11 38,68,99,738 1,34,35,515 28.80
2011-12 74,29,08,741 3,09,24,293 24.02
2012-13 15,88,90,299 12,93,08,874 1.23
2013-14 1,40,89,51,803 18,23,65,723 7.73
2014-15 2,61,40,64,321 6,77,15,572 38.60
Interest Coverage Ratio

45
40 38.6
35
30 28.8
25 24.02
Ratio (Times)
20
15
10 7.73
5
1.23
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Page 45
Interest coverage ratio in the financial year 2011 is 28.80 and 24.02 in the
financial year 2012. It was decreased in the financial year 2013 and 2014. But it was increased
in the financial year 2015.
2. DEBT RATIO:
Debt
Debt Ratio=---------------
Total asset
year Debt Total asset Ratio(Times)

2010-11 37,86,72,427 2,51,15,37,662 0.15
2011-12 1,40,70,83,880 3,97,98,34,518 0.35
2012-13 3,16,26,20,560 6,66,31,41,085 0.47
2013-14 2,85,87,09,934 7,09,70,82,601 0.40
2014-15 91,18,94,460 6,56,46,74,528 0.14
INFERENCE:
Debt ratio in the financial year 2011 is 0.15 and it was increasing to 0.35, 0.47
and 0.40 in the financial year 2012, 2013 and 2014 respectively. But it was decreased to 0.14
in the financial year 2015.
3. DEBT EQUITY RATIO:
Total debt
Debt Equity Ratio=------------------
Equity
year Total debt Equity Ratio (Times)
2010-11 37,86,72,427 2,01,28,52,920 0.19
2011-12 1,40,70,83,880 2,43,66,57,677 0.58
2012-13 3,16,26,20,560 3,33,10,14,470 0.95
Page 46
2013-14 2,85,87,09,934 4,05,58,64,344 0.70

2014-15 91,18,94,460 5,43,64,27,190 0.17
Debt Equity Ratio

1 0.95
0.9
0.8
0.7
0.7
0.6 0.58
0.5
0.4
0.3
0.19 0.17
0.2
0.1
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
The general norm of debt equity ratio is 2:1. Lower the debt equity ratio, higher
the degree of protection. The debt equity ratio is 0.19 in the financial year 2010-11 and it was
increased by 0.39, 0.37 in the financial year 2011-12 and 2012-13 respectively. It was
decreased by 0.25 and 0.53 in the financial year 2013-14 and 2014-15 respectively.
4. DIVIDEND PER SHARE:
Dividend
Dividend per share=-------------------------

Number of shares
Year Dividend No of shares Ratio(Rupees)

2010-11 2,84,68,750 1,13,87,500 2.5
2011-12 3,98,56,250 1,13,87,500 3.5
2012-13 3,98,56,250 1,13,87,500 3.5
2013-14 6,83,25,000 8,54,06,250 0.8
2014-15 24,76,78,125 8,54,06,250 2.9
Page 47
INFERENCE:
The dividend paid to the share holders are discussed above it reveals the
dividend paid to share holders in the financial year 2010-11 is 2.5 and increased by 1 time in
the financial year 2011-12 and 2012-13, but it was decreased to 0.8 in the financial year 2013-
14. That it shows fewer dividends is paid in the financial year 2013-14. But it was increased to
2.9 in the financial year 2014-15.
5. DEBT TO TOTAL FUND:
Debt
Debt to Total Funds Ratio=------------------

Debt + equity
year Debt Debt+ equity Ratio
2010-11 37,86,72,427 2,39,15,25,347 0.16
2011-12 1,40,70,83,880 3,84,37,41,557 0.37
2012-13 3,16,26,20,560 6,49,36,35,030 0.49
2013-14 2,85,87,09,934 6,91,45,74,278 0.41
2014-15 91,18,94,460 6,34,83,21,650 0.14
Debt to Total Fund Ratio

0.6
0.5 0.49
0.41
0.4 0.37
0.3
0.2 0.16
0.14
0.1
0
2010-11 2011-12 2012-13 2013-14 2014-15
Page 48
INFERENCE:
This ratio shows the position of debt in total fund. As general rule, Debt to Total
Funds Ratio of 0.67:1 is considered to be satisfactory. But in the above analysis no one
financial year is showing satisfactory level.
PROFITABILITY RATIO
1. GROSS PROFIT RATIO:
Gross profit
Gross Profit Ratio=--------------------- X 100

Sales
Year Gross profit Sales Percentage
2010-11 37,34,64,223 3,91,85,58,196 9.53
2011-12 71,19,84,448 5,95,80,16,404 11.95
2012-13 1,45,93,81,425 10,83,32,56,904 13.47
2013-14 1,22,65,86,080 13,17,72,30,047 9.31
2014-15 2,54,63,84,749 14,65,20,96,705 17.38
Gross Profit Ratio

20
18 17.38
16
14 13.47
11.95
12
Percentage
10 9.53 9.31
8
6
4
2
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Page 49
Gross profit in the financial year 2010-11 is 9.53 and increased to 11.95 in the financial
year 2006-2007 and 13.47 in the financial year 2012-13. But it was decreased in the financial
year 2013-14. But it reached to 17.38 in the financial year 2014-15.
2.NET PROFIT RATIO:
Profit after tax

Net Profit Ratio=--------------------- X 100
Sales
Year Profit after tax Sales Percentage

2010-11 2,38,65,730 3,91,85,58,196 0.61
2011-12 47,04,34,575 5,95,80,16,404 7.90
2012-13 94,36,31,511 10,83,32,56,904 8.71
2013-14 80,47,86,707 13,17,72,30,047 6.11
2014-15 1,67,03,33,868 14,65,20,96,705 11.40
Net Profit Ratio

12 11.4
10
8.71
7.9
8
6.11 Percentage
6
2
0.61
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Page 50
The net profit ratio in the financial year 2010-11 is 0.61 and increased in the
following financial years of 2011-12 and 2012-13, but decreased in the financial year 2013-14
to 6.11 and increased in the financial year 2014-15 to 11.40 which satisfies.
3.OPERATING RATIO:
Cost of goods sold + operating expenses
Operating Ratio=------------------------------------------------------- X 100

Sales
Year Cost of goods sold+ Sales Percentage

Operating expenses
2010-11 4,30,69,44,381 3,91,85,58,196 109.91
2011-12 6,33,96,89,399 5,95,80,16,404 106.41
2012-13 10,95,34,66,696 10,83,32,56,904 101.11
2013-14 3,42,53,09,720 13,17,72,30,047 25.99
2014-15 14,41,89,40,634 14,65,20,96,705 98.41
INFERENCE:
The operating ratio shows the portion of operating cost in sales. Here the
operating cost of the decreased from 109.09 to 25.99 in the financial year 2010-11to 2011-12.
Again it was increased to 98.4 in the financial year 2014-15.
4.OPERATING EXPENSES RATIO:
Operating expenses
Operating Expenses Ratio=----------------------------- X 100

Sales
Year Operating expenses Sales Percentage
Page 51
2010-11 76,18,50,408 3,91,85,58,196 19.44

2011-12 1,09,36,57,443 5,95,80,16,404 18.36
2012-13 1,57,95,91,221 10,83,32,56,904 14.58
2013-14 2,23,02,45,324 13,17,72,30,047 16.92
2014-15 2,31,31,92,684 14,65,20,96,705 15.79
Operating Expenses Ratio

25
20 19.44
18.36
16.92
15.79
15 14.58
Percentage
10
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
The operating expenses of the firm are decreased gradually from 19.44 in the
financial year 2005-2006 to 14.58 in the financial year 2012-13. But increased to 16.92 in the
financial year 2013-14 and decreased to 15.79 in the financial year 2014-15.
5.RETURN ON INVESTMENT:
Profit before tax
Return on Investment=--------------------------- X 100

Capital employed
Year PBIT Capital employed Percentage
2010-11 38,68,99,738 2,51,15,37,662 15.40
2011-12 74,29,08,741 3,97,98,34,518 18.67
Page 52
2012-13 15,88,90,299 6,66,31,41,085 2.38

2013-14 1,40,89,51,803 7,09,70,82,601 19.85
2014-15 2,61,40,64,321 6,56,46,74,528 39.82
Return on Investmnent Ratio

45
39.82
40
35
30
25 Percentage
18.67 19.85
20
15.4
15
10
5 2.38
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
This ratio is used to calculate the return on the capital employed of the business.
The ROI is 15.4, 18.67 in the financial year 2010-11 and 2011-12 respectively. But the return
was decreased to 2.38 in the financial year 2012-13. Finally it was increased in the financial
year 2014-2015 to 39.82.
6.RETURN ON EQUITY:
Profit after tax

Return on equity ratio=--------------------------X 100
Equity
Year Profit After Tax Equity Percentage

2010-11 2,38,65,730 2,01,28,52,920 1.19
2011-12 47,04,34,575 2,43,66,57,677 19.31
Page 53
2012-13 94,36,31,511 3,33,10,14,470 28.33

2013-14 80,47,86,707 4,05,58,64,344 19.84
2014-15 1,67,03,33,868 5,43,64,27,190 30.72
Return on Equity Ratio

35
30.72
30 28.33
25
19.31 19.84
20
Percentage
15
10
5
1.19
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Return on equity of the firm was increasing from 19.31 in the financial year 2011-
12 to 30.72 in the financial year 20014-15 except 2010-2011.
TURNOVER RATIO
1. CAPITAL TURNOVER RATIO:
This ratio is calculated as follows
Sales
Capital turnover ratio= ----------------------
Capital employed
Page 54
Year Sales Capital employed Ratios(Times)

2010-11 3,91,85,58,196 2,51,15,37,662 1.56
2011-12 5,95,80,16,404 3,97,98,34,518 1.50
2012-13 10,83,32,56,904 6,66,31,41,085 1.63
2013-14 13,17,72,30,047 7,09,70,82,601 1.86
2014-15 14,65,20,96,705 6,56,46,74,528 2.23
Capital Turnover Ratio

2.5
2.23
2 1.86
1.63
1.56 1.5
1.5
Ratios(Times)
0.5
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
The capital turnover ratio of the organisation is increasing gradually year by year from
2010-2011 to 2014-2015 in value from 1.56 to 2.
2. FIXED ASSETS TURNOVER RATIO:
Sales
Fixed assets turnover ratio= ----------------
Fixed assets
year Sales Net Fixed assets Ratio(Times)

2010-11 3,91,85,58,196 1,04,35,47,559 3.76
2011-12 5,95,80,16,404 1,56,83,04,581 3.80
2012-13 10,83,32,56,904 1,88,85,08,475 5.74
2013-14 13,17,72,30,047 2,81,32,42,340 4.68
Page 55
2014-15 14,65,20,96,705 3,05,72,55,262 4.79
Fixed Assets Turnover Ratio

7
6 5.74
5 4.68 4.79
4 3.76 3.8
Ratio(Times)
3
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Fixed asset turnover ratio of the firm in the financial year 2010-11 is 3.76 and increased
gradually to 3.80, 5.74 in the financial year 2011-12 and 2007-2008 respectively. But it was
decreased in the financial year 2013-14 and 2009-2010 to 4.68, 4.79 respectively.
3. CURRENT ASSET TURNOVER TATIO:
Sales
Current asset turnover ratio=--------------------
Current assets
Year Sales Current asset Ratio(Times)

2010-11 3,91,85,58,196 2,28,07,04,176 1.72
2011-12 5,95,80,16,404 3,50,01,93,294 1.70
2012-13 10,83,32,56,904 5,97,59,61,025 1.81
2013-14 13,17,72,30,047 5,25,99,00,816 2.51
2014-15 14,65,20,96,705 6,31,06,28,185 2.32
Page 56
Current asset Turnover Ratio

3
2.51
2.5 2.32
2 1.81
1.72 1.7
Ratio(Times)
1.5
0.5
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Current asset turnover ratio is 1.72 in the financial year 2010-2011. This ratio is
increasing year by year and reached 2.51 in the financial year 2013-2014. But there is a fewer
decrease in the financial year 2014-2015that is 0.19.
4.TOTAL ASSET TURNOVER RATIO:
Sales
Total asset turnover ratio=------------------
Total assets
year Sales Total assets Ratio (Times)

2010-11 3,91,85,58,196 2,51,15,37,662 1.56
2011-12 5,95,80,16,404 3,97,98,34,518 1.50
2012-13 10,83,32,56,904 6,66,31,41,085 1.63
2013-14 13,17,72,30,047 7,09,70,82,601 1.86
2014-15 14,65,20,96,705 6,56,46,74,528 2.23
Page 57
Total Asset Turn Over Ratio

2.5
2.23
2 1.86
1.63
1.56 1.5
1.5
Ratio (Times)
0.5
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Total asset turnover ratio in the financial year 2010-2011 is 1.56. In the next
financial year it was decreased by 0.06. Later there is a gradual increase from 2013-14 to 2014-
15 i.e.., 1.63 and 2.23 respectively.
5.WORKING CAPITAL TURNOVER RATIO:
Sales
Working capital turnover ratio=--------------------------

Net working capital
Year Sales Net working capital Ratio (Times)

2010-11 3,91,85,58,196 1,09,97,00,330 3.56
2011-12 5,95,80,16,404 2,18,79,20,684 2.72
2012-13 10,83,32,56,904 3,95,52,16,073 2.74
2013-14 13,17,72,30,047 3,41,68,09,104 3.86
2014-15 14,65,20,96,705 3,11,97,71,713 4.70
Page 58
Working Capital Turnover Ratio

5 4.7
4.5
4 3.86
3.56
3.5
3 2.72 2.74
Ratio (Times)
2.5
2
1.5
1
0.5
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Working capital turnover ratio in the financial year 2010-2011 is 3.56

and it was decrease to 2.72, 2.74 in the financial year 2011-2012 and 2012-2013 respectively.
There is an increase in the next two financial financial years i.e.., 2013-14 and 2014-2015
6.STOCK TURNOVER RATIO:
Cost of goods sold
Stock turnover ratio=--------------------------

Average stock
year Cost of goods sold Average stock Ratio(Times)

2010-11 3,54,50,93,973 50,64,60,567 7.00
2011-12 5,24,60,31,956 74,68,37,818 7.02
2012-13 9,37,38,75,475 1,43,25,24,560 6.54
2013-14 1,19,50,64,396 1,77,58,02,189 0.67
2014-15 12,10,57,47,950 1,89,19,96,124 6.40
Page 59
Stock Turnover Ratio

8
7 7.02
7 6.54 6.4
6
5
Ratio(Times)
4
1 0.67
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Stock turnover ratio shows gradual decrease in all financial years. Increase in
the stock turnover ratio shows increase in production. But here slight decrease in production.
7.DEBTORS TURNOVER RATIO:
Sales
Debtors turnover ratio=---------------------

Average debtors
year Sales Average debtors Ratio(Times)

2010-11 3,91,85,58,196 75,31,13,339 5.20
2011-12 5,95,80,16,404 1,15,80,32,767 5.14
2012-13 10,83,32,56,904 1,86,21,13,498 5.82
2013-14 13,17,72,30,047 2,17,15,87,530 6.07
2014-15 14,65,20,96,705 2,25,07,23,877 6.51
Page 60
Debtors Turnover Ratio

7
6.51
6.07
6 5.82
5.2 5.14
5
4
Ratio(Times)
3
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Debtors turnover ratio 5.20 times in the financial year 2010-2011 and gradually
increased to 6.07, 6.51 in the financial year 2014-15 and 2009-2010.
8.CREDITORS TURNOVER RATIO:
Credit purchases
Creditors turnover ratio=--------------------------

Average creditors
year Credit purchases Average creditors Ratio(Times)

2010-11 2,24,41,70,172 44,19,04,975 5.08
2011-12 4,08,68,18,721 60,45,38,747 6.76
2012-13 8,12,56,62,265 70,81,42,712 11.47
2013-14 8,32,91,61,027 87,27,80,758 9.54
2014-15 9,35,07,78,154 1,15,64,65,110 8.09
Page 61
Creditors Turnover Ratio

14
12 11.47
10 9.54
8.09
8
6.76 Ratio(Times)
6 5.08
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Creditors’ turnover ratio in the finance financial year 2010-11 is 5.08 and
increased to 6.76 and 11.47 in the financial year 2011-12 and 2012-13. Later it was decreased
to 8.09 in the financial year 2014-2015.
SHARE HOLDERS RATIO
1. EARNING PER SHARE:
Profit after tax

Earning per share=--------------------------
Number of share
year Profit after tax No of shares Rupees

2010-11 2,38,65,730 1,13,87,500 2.10
2011-12 47,04,34,575 1,13,87,500 41.31
2012-13 94,36,31,511 1,13,87,500 82.87
2013-14 80,47,86,707 8,54,06,250 9.42
2014-15 1,67,03,33,868 8,54,06,250 19.56
Page 62
INFERENCE:
There is a fluctuation in earnings per share. The earnings were highest in the
financial year 2012-13 i.e.., 82.87 times.
2. DIVIDEND PAYOUT RATIO:
Dividend per share
Dividend payout ratio=----------------------------

Earning per share
Year Dividend per share Earnings per share Rupees

2010-11 2.5 2.10 1.19
2011-12 3.5 41.31 0.08
2012-13 3.5 82.87 0.04
2013-14 0.8 9.42 0.08
2014-15 2.9 19.56 0.15
Dividend payout Ratio

1.4
1.19
1.2
0.8
Rupees
0.6
0.4
0.2 0.15
0.08 0.08
0.04
0
2010-11 2011-12 2012-13 2013-14 2014-15
INFERENCE:
Page 63
This ratio is decreases first and increases later gradually. Here the
dividend payout ratio is high in the financial year 2010-11 i.e.., 1.19 and decreased to 0.04 in
the financial year 2007-2008 again it was increasing in the following financial years gradually.
FINDINGS
 Except in the financial year 2010-11 the company is maintaining current ratio
more than the standard level. It shows the ability of the firm to meet its current
obligations.
 The standard quick ratio is 1:1. The company is maintaining the quick assets
more than the standard quick ratio. Quick assets would meet all its quick
liabilities without any difficulties.
 The company is failed in keeping sufficient cash and bank balance and the
marketable securities.By analysing the liquidity ratios all the ratios are better. The
company’s cash position is in down.
 Total debt in the capital structure is high in the financial year 2012-13, and it is
reduced to 0.14 times than previous year.
 Debt in the equity of the company is high in the financial year 2012-13 that is
95%, but it reduced to 17% in the financial year 2014-15.
 Dividend paid by the company in the financial year 2011-12 & 2012-13 3.5 and
reduced to 0.8 which shows the earning of the company is less in the financial
year 2013-14, but the next year it is increased to 2.9 times.
 Gross profit and Net profit ratios increasing year by year except 2013-14.
 The operating expenses are fluctuating.
 The return on investment on capital employed is good except in the financial year
2012-13.
 The sales of the organisation are 1.5 times greater than capital employed from the
financial year of 2010-11 to 2013-14. It increased more than 2 times of capital
employed.
 Working capital of the organisation is 3.56 times more than sales and decreased
gradually in the next two years and reduced 4.70 times in the financial year 2014-
15.
Page 64
 The sales are 6.51 times than the average debtors. It shows that earnings of the
share is Rs.2.10 in the financial year 2010-11 and increased to 82.57 rupees and
shown decrease 19.56 in 2014-15. Because of the issue of bonus share of
28,468,750 share of Rs. 2 each to the existing share holders.
 Dividend payout ratio is 1.19 and gradually decreasing to 0.04 and increased to
0.15 in the financial year 2014-15.
SUGGESSTIONS
 The company should maintain sufficient cash and bank balances; they should
invest the idle cash in marketable securities or short term investment in shares,
debentures, bonds and other securities.
 The dividend per share has observed in declining trend over the study period and
increase in the financial year 2014-15.
 Operating ratio of the company has observed increasing trend, it may be suggest
that the company should try to control the operating expenses.
 The company has to increase the profit maximization and has to decrease the
operating expenses.
 By considering the profit maximization in the company the earning per
 Share, investment and working capital also increases. Hence, the outsiders also
interested to invest.
 Return on equity should be increased.
 Operating ratio of the company showed the decreasing trend from the financial
year 2010-11 to 2013-14 i.e., from 109.91 to 25.99.
 Debtors’ turnover ratio should be decreased and they should increase the cash
sales.
 Earnings per share is increased from 2010-11 to 2012-13 and shown the
decreased to 9.42 in the fid show financial year 2013-14. The company should
show interest in increasing the earning per share.
 Dividend payout ratio is decreased from the financial year of 2010-11 and starts
to increase in 2013-14. The organisation should show interest to increase the
dividend payout ratio in order to retain its customer.
Page 65
CONCLUSION
Foods and Inns is solvent in both short term and long term. Profitability of
the company is improving. More retained earnings will accelerate the growth and thereby
the long term investors are better protected.
Page 66
PROFIT AND LOSS ACCOUNT
31st march 31 st march 31st march

PARTICULARS
2011 2012 2013
INCOME
13,49,98,65,49
sales-gross 4,45,82,95,779 7,45,10,32,998
9
less: Excise duty collected 53,97,37,583 1,49,30,16,594 2,66,66,10,595
10,83,32,54,90
Net sales 3,91,85,58,196 5,95,80,16,404
4
other incomes 7,35,18,437 9,77,38,804 25,61,00,643
Increases/(decreases )in stock 4,16,37,449 18,18,45,189 58,20,65,982
11,67,14,21,52
TOTAL 4,03,37,14,082 6,23,76,00,397
9
EXPENDITURE
Purchase of finished goods 43,53,496 11,90,212 63,78,625
Raw material consumed 2,23,20,86,848 3,93,78,12,454 7,79,47,94,675
payments and benefits to employees 20,72,69,383 26,59,97,094 40,80,78,078
manufacturing, selling, admn & other

76,18,50,408 1,09,36,57,443 1,57,95,91,221
expenses
Duties & Taxes 29,42,45,095 2,60,07,989 4,94,38,561
Interest 1,34,35,515 3,09,24,293 12,93,08,874
Depreciation 14,70,09,114 17,00,26,464 24,44,52,070
10,21,20,42,10
TOTAL 3,66,02,49,859 5,52,56,15,949
4
PROFIT BEFORE TAXATION 37,34,64,223 71,19,84,448 1,45,93,79,425
add: Provision for Deferred income
Tax credit back 1,09,15,000 - -
less: provision for taxation - current 13,50,00,000 2,71,50,00,000 48,00,00,000
-deffered - 1,60,80,646 3,34,13,094
-Earlier years 38,46,464 44,75,039 -37,56,190
-wealth tax 1,47,729 94,188 93,010
-Fringe Benefits tax 69,19,300 34,00,000 60,00,000
Page 67
PROFIT AFTER TAXATION 23,84,65,730 47,04,34,575 94,36,31,511

profit brought forward from previous
56,68,74,029 74,90,31,694 1,12,57,92,991
year
profit available for appreciation 80,53,39,759 1,21,94,66,269 2,06,94,24,502
less: Appropriation:
Transfer to general Reserve 2,38,46,573 4,70,43,458 9,43,63,151
Proposed Dividend 2,84,68,750 3,98,56,250 3,98,56,250
Dividend Tax 39,92,742 67,73,570 67,73,570
Balance Carried to Balance Sheet 74,90,31,694 1,12,57,92,991 1,92,84,31,531
Basic earnings per equity Shares of Rs
20.94 8.26 16.57
10 each
Page 68
PARTICULARS 31 st March 2014 31 st March 2015

INCOME
sales-gross 15,83,95,40,521 16,91,08,37,433
less: Excise duty collected 2,66,23,10,474 2,25,87,40,728
Net sales 13,17,72,30,047 14,65,20,96,705
other incomes 8,05,64,340 17,01,74,501
Increases/(decreases )in stock -15,34,00,292 35,68,77,486
TOTAL 13,10,43,94,095 15,17,91,48,692
EXPENDITURE
Purchase of finished goods 8,50,86,105 3,53,28,540
Raw material consumed 8,45,30,55,263 9,14,28,17,590
payments and benefits to employees 51,61,34,337 62,37,04,132
manufacturing, selling, admn & other expenses 2,27,56,87,255 2,31,31,92,684
Duties & Taxes 1,99,15,474 2,05,90,181

Interest 18,23,65,723 6,77,15,572
Depreciation 34,55,63,858 42,94,51,244
TOTAL 11,87,78,08,015 12,63,27,99,943
PROFIT BEFORE TAXATION 1,22,65,86,080 2,54,63,48,749
less: provision for taxation 42,17,99,373 87,60,14,881
PROFIT AFTER TAXATION 80,47,86,707 1,67,03,33,868
profit brought forward from previous year 1,92,84,31,531 2,57,28,02,734
profit available for appreciation 2,73,32,18,238 4,24,31,36,602

less: Appropriation
Transfer to general Reserve 8,04,78,671 16,70,33,387
Proposed Dividend 6,83,25,000 24,76,78,125
Dividend Tax 1,16,11,833 4,20,92,897
Balance Carried to Balance Sheet 2,57,28,02,734 3,78,63,32,193
Page 69
Basic earnings per equity Shares of Rs 10 each 9.42 19.56
BALANCE SHEETS
PARTICULARS 31 st March 2006 31st March 2007

Rupees Rupees Rupees Rupees
SOURCE OF FUNDS
shareholders funds:
Share Capital 11,38,75,000 11,38,75,000
Reserves & Surplus 1,89,89,77,92 2,01,28,52,92 2,32,27,82,67 2,43,66,57,67
0 0 7 7
Loan Funds:
Secured loans 16,22,64,847 1,07,48,74,04
9
Unsecured Loans 21,64,07,580 37,86,72,427 33,22,09,831 1,40,70,83,88
0
Deferred Tax Liability 12,00,12,315 13,60,92,961
TOTAL 2,51,15,37,66 3,97,98,34,51
2 8
APPLICATION OF
FUNDS
Fixed Assets
Gross block 1,90,71,16,06 2,57,77,86,07
8 3
Less: Depreciation 86,35,68,509 1,00,94,81,49
2
Net Block 1,04,35,47,55 1,56,83,04,58
9 1
Capital Work-in- 4,81,49,117 1,09,16,96,67 6,16,67,597 1,62,99,72,17
progress 6 8
Investments 32,01,40,656 16,19,41,656
Current Assets, Loans,
& Advances
Inventories 57,19,62,221 92,17,13,415
Sundry Debtors 85,65,20,556 1,45,95,44,97
7
Cash & Bank Balances 20,52,12,363 25,60,00,280
Page 70
Loans, Advances & 63,49,73,597 85,98,24,054

Deposits
Other Current Assets 1,20,35,439 31,10,568
2,28,07,04,17 3,50,01,93,29
6 4
Less: Current
Liabilities &
Provosions
Liabilities 70,08,55,298 73,53,04,583
Provisions 48,01,48,548 57,69,68,027
1,18,10,03,84 1,31,22,72,61
6 0
Net Current Assets 1,09,97,00,33 2,18,79,20,68
0 4
TOTAL 2,51,15,37,66 3,97,98,34,51
2 8
Page 71
PARTICULARS 31st March 2010

Rupees Rupees
SOURCE OF FUNDS
share holders funds:
Share Capital 17,08,12,500
Reserves & Surplus 5,26,56,14,690 5,43,64,27,190
Loan Funds:
Secured loans 27,29,46,770
Unsecured Loans 63,89,47,690 91,18,94,460
Deferred Tax Liability 21,63,52,878
TOTAL 6,56,46,74,528
APPLICATION OF FUNDS
Fixed Assets
Gross block 4,91,10,67,266
Less: Depreciation 1,85,38,12,004
Net Block 3,05,72,55,262
Capital Work-in-progress 22,68,91,489 3,28,41,46,751
Investments 16,07,56,064
Current Assets, Loans, & Advances
Inventories 2,17,57,23,575
Sundry Debtors 2,42,29,54,714
Cash & Bank Balances 62,46,72,429
Loans, Advances & Deposits 1,08,72,77,467
6,31,06,28,185
Less: Current Liabilities &
Provosions
Liabilities 1,65,63,90,120
Provisions 1,53,44,66,352
3,19,08,56,472
Page 72
Net Current Assets 3,11,97,71,713

TOTAL 6,56,46,74,528
Page 73

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A Study on Ratio Analysis

“Financial management is an area of financial decision making, harmonizing individual

-Weston and Brigham

-Howard and Upon

“Financial Management is the application activity of a business that is responsible for

-Joseph and Massie

“Financial Management is concerned with the effective use of an important economic

-Ezra Solornn & Pringle John J.

A’s OF FINANCIAL MANAGEMENT

The following are the A’s of financial management

 Anticipating financial needs

 ANTICIPATING FINANCE NEEDS:

 ACQUIRING FINANCIAL RESOURCES:

 ALLOCATING FUNDS IN BUSINESS:

FUNCTIONAL AREAS OF FINANCIAL MANAGEMENT:

OVERVIEW OF FOOD PROCESSING INDUSTRY

FRUITS AND VEGETABLE PROCESSING

MEAT AND POULTRY PROCESSING

PULP AND PULP PRODUCTS

CONSUMER FOOD INDUSTRY

 Trebling the size of the processed food sector

Key characteristics of the Kolkata food processing cluster

 60% of the companies in packaged / convenience foods segment were involved in

GROWTH AND FUTURE PLANS

CLUSTER BENEFITS AND HINDRANCES

CHANGING FACE OF THE INDIAN FOOD PROCESSING INDUSTRY

SETTING UP MEGA FOOD PARKS

The parks will be set up in Chittoor (AP), Chikmagalur (Karnataka), Dharmapuri

SOME STAGGERING FACTS

INDIAN GRAPE PROCESSING BOARD

RESEARCH AND DEVELOPMENT

ACCEPTANCE AND FUTURE

Top producers of Mangoes, Mango grafts, Guavas, 2011-11

People's Republic of China 4.2

World total 34.9

Key ~ 2012 data

However, the productivity was lower in the countries producing mangoes

Area Production Productivity

1 India 1.6 43.36 10.8 40.64 6.75

2 China 0.419 11.35 3.582 13.48 8.56

INTERNATIONAL MARKETS FOR INDIAN MANGO

European, American and Asian markets. About 13,000 MT of Alphonso variety is

MANGO PRODUCING STATES IN INDIA

Area (ha) Prod.(Mt)

ANDAMAN NICOBAR 0.30 2.60

ANDHRA PRADESH 480.40 4058.30

ASSAM 4.60 46.50

BIHAR 146.00 995.90

CHHATISHGARH 43.30 191.80

D and N HAVELI 1.20 12.50

GOA 4.60 7.60

GUJARAT 121.50 856.70

HARYANA 9.10 64.60

HIMACHAL PRADESH 38.70 24.00

JAMMU and KASHMIR 10.70 12.10

JHARKHAND 15.10 254.30

KARNATAKA 153.80 1694.00

KERALA 63.80 373.20

MADHYA PRADESH 14.20 127.80

MAHARASHTRA 474.50 597.00

NAGALAND 0.30 0.40

ORRISA 177.60 577.50

PUNJAB 6.40 93.50