RESEARCH REPORT

ON
“A STUDY OF FINANCIAL PERFORMANCE
ANALYSIS OF JAI INDUSTRIES, IN LUCKNOW
CITY”
Submitted to Partial Fulfillment for the Award of Degree in Master of
Business Administration (MBA)

Under the Guidance of Submitted By

Ms. Divita Sinha Rachit Kumar Arya

Assistant Professor MBA 4th Sem.

Roll No. 1904420700047

SARDAR BHAGAT SINGH COLLEGE OF

TECHNOLOGY & MANAGEMENT,

LUCKNOW
(Session- 2020-2021)

i
CERTIFICATE

ii
 DECLARATION

I, hereby, Rachit Kumar Arya declare that “A Study On Financial Performance

Analysis Of Jai Industries, Lucknow” is an original project done by me and no part of

this project is taken from any source or material published and not submitted to any other

colleges and university later.

Date: Rachit Kumar Arya

Place: MBA 4th Sem.

Roll No. 1904420700047

iii
 ACKNOWLEDGEMENT

“It is not possible to prepare a project report without the assistance & encouragement of
other people. This one is certainly no exception.”On the very outset of this report, I would
like to extend my sincere & heartfelt obligation towards all the personages who have
helped me in this endeavor.

Without their active guidance, help, cooperation & encouragement, I would not have made
headway in the project. I am ineffably indebted to Ms. Divita Sinha for conscientious
guidance and encouragement to accomplish this assignment.

I extend my gratitude to SARDAR BHAGAT SINGH COLLEGE OF

TECHNOLOGY & MANAGEMENT, LUCKNOW for giving me this opportunity.

I also acknowledge with a deep sense of reverence, my gratitude towards my parents and
member of my family, who has always supported me morally as well as economically.

At last but not least gratitude goes to all of my friends who directly or indirectly helped me
to complete this project report. Any omission in this brief acknowledgement does not
mean lack of gratitude.

Rachit Kumar Arya

MBA 4th Sem.

Roll No. 1904420700047

iv
 PREFACE

The project on “A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF JAI

INDUSTRIES, LUCKNOW” has been made to facilitate effective understanding about the
financial aspects. The project report has provided me an opportunity to gain practical
experience, which has helped me to increase my sphere of knowledge to a greater extent. I
have tried to summarize all our experience and knowledge acquired up till now, in this report.
This project is a keen effort to obtain the expected results and fulfill all the information
required.

My aim in the research was to achieve my objectives with the help of secondary
data which is collected by my own efforts from the company in conclusion, suggestions and
recommendations mentioned in the report hoping that they would, perhaps, be useful for the
company.

v
 TABLE OF CONTENT

S. No. Topics Page No.

Front page i
College certificate ii
Declaration Iii
Acknowledgement vi
Preface V
1 INTRODUCTION 1-38
2 OBJECTIVE OF THE STUDY 39-40
3 SCOPE OF & IMPORTANCE OF THE STUDY 41-42
4 COMPANY PROFILE 43-69
5 RESEARCH METHODOLOGY 70-72
6 DATA COLLECTION & DATA ANALYSIS 73-82
7 FINDINGS 83-85
8 LIMITATIONS 86-87
9 CONCLUSION 88-91
10 SUGGESTIONS & RECOMMENDATION 92-93
11 BIBLIOGRAPHY 94-95

vi
INTRODUCTION

1 INTRODUCTION
1
 The financial statement provides the basic data for financial performance

analysis. The financial statements provide a summarized view of the financial

position and operations of a firm. Financial analysis (also referred to as

financial statement analysis or accounting analysis) refers to an assessment of

the viability, stability and profitability of a business. The analyst first identifies

the information relevant to the decision under consideration from the total

information contained in the financial statements. Therefore, much can be learnt

about a firm from a careful examination of its financial statements as invaluable

documents and performance reports.

The analysis of financial statements isan important aid to financial

analysis. They provide information on how the firm has performed in the past

and what is its current financial position.Financial analysis is the process of

identifying the financial strengths and weakness of the firm from the available

accounting data and financial statements. The analysis is done by establishing

relationship between the different items of financial statements.

The focus of financial analysis is on key figures in the financial

statements and the significant relationship that exists between them.The analysis

of financial statements is a process of evaluating relationship between

component parts of financial statements to obtain a better understanding of the

firm’s position and performance.

2
 The first task of financial analyst is to select the information relevant to

the decision under consideration from the total information contained in the

financial statement. The second step involved in financial analysis is to arrange

the information in a way to highlight significant relationships. The final step is

interpretation and drawing of inferences and conclusions. In brief, financial

analysis is the process of selection, relation, and evaluation.

1.1INDUSTRIAL PROFILE

1.1.1NON-BANKING FINANCIAL COMPANIES (NBFCS)

Non-bank financial companies (NBFCs) are financial institutions that

provide banking services without meeting the legal definition of a bank, i.e. one

that does not hold a banking license. Operations are, regardless of this, still

exercised under bank regulation.

According to Reserve Bank Amendment of Act 1997, A Non-Banding Financial

Company (NBFCs) means,

 A financial institution which is a company

 A non-banking institution which is a company which has its principal

business receiving of deposits under any scheme of arrangement or in any

other manner or lending in any manner

3
The non-banking financial sector in India has tremendous growth in recent

years. NBFCs’ attracted a large number of small investors since the rate of

return on deposits with them was relatively high. NBFCs are quite flexible

sectors like equipment leasing, hire-purchase, housing finance, consumer

finance and so on, where gaps between the demand and supply of funds have

been high. The growth in number of NBFCs was facilitated by the case of

entry, limited fixed assets and absence of any need to hold inventories.

1.1.2 CURRENT SCENARIO OF NBFCS

The base of today’s feebleness of Non-Banking Finance Companies can

perhaps be traced back to early nineties. The buoyant capital market, in the first

flush liberalization welcomed every issue with huge premiums and massive

over subscription. This was the signal for several unscrupulous promoters to set

up high profile finance companies and raise money from both the capital

markets and through public deposits.

The Reserve Bank of India for its past, progressively relaxed its

regulatory hold over the industry and made it possible for the companies with

little financial strength and even fewer scrupulous to raise large amounts of

money from an unsuspecting public. Hardly anyone knew or questioned how

these moneys were deployed. Soon afterward, the stock market scam broke

4
claiming its first victim from the non-banking finance companies sector. With

the capital market in disarray, it was no longer possible for continue of fund

flow, from investors who had burnt their fingers in the stock markets. It was

thus convenient fresh deposits. In July1996, the RBI, perhaps the most

sweeping changes in the non-banking finance companies regulation, virtually

pulled out all the stock, enabling companies to raise deposits with minimum

number and more significantly, removed the ceiling on interest rate.

At the point, when the government was faced with grim situation and

responding to the plea of the industry, the government set up a special task force

headed by Mr. C.M. Vasudev to recommend the steps for the orderly growth of

finance companies while keeping investor protection as its key priority. The

committee in its final report recognized the important role played by these

companies and warned against the tendencies to tar all the companies with the

same brush. The silent recommendations of the Vasudev committee were

 Review of minimum capital requirement of Rs. 25lakhs for registration

purposes

 Higher capital adequacy ratio for non-banking finance companies seeking

public deposits without credit rating

 Preview of prudential norms with ceiling for exposure to real estate and

capital markets
5
  Differential ceiling on public deposit acceptance for companies with and

without credit ratings

 A separate instrument to regulate and supervise non-banking finance

companies.

1.1.3 ADVANTAGE OF NBFCs

1. Lower transaction costs

2. Higher rate of interest on deposits compared to banks

3. Quick financial decision caking

4. Customer orientation

5. Prompt provision of services

1.1.4 RBI GUIDELINES FOR NBFCs

The nineties witnessed a dramatic increase in the number of NBFCs and it was

thought necessary to have a regulatory framework for NBFCs. RBI came out

with set of guidelines for NBFCs specifically aimed at protecting the depositors.

To encourage the NBFCs that is running on sound business principals, on

July 24th 1996, NBFCs were divided into two classes,

i. Equipment leasing and hire purchase (finance company)

6
 ii. Loan and investment companies

1.1.5 CATEGORIES OF NBFCs

i. Loan Companies

ii. Investment Companies

iii. Hire Purchase Companies

iv. Equipment Leasing Companies

v. Mutual Benefits Finance Companies

vi. Housing Finance Companies

Equipment leasing company – Any company, which is a financial institution,

carrying on its principal business.The activities of leasing of equipment of the

financing of such activity.

1. Hire purchase finance company – A company, which is a financial

institution, carrying on its principal business, hire purchase transaction.

2. Investment Company – A company, which deals with acquisition of

securities.

7
3. Loan Company – A company, which is a financial institution and carries

on its principal business of providing finance by any activities other than

its own.

4. Mutual benefit finance company – A company, which is a financial

institution. This is notified by the central government under section 620

(a) of The Companies Act 1956.

8
OBJECTIVES OF THE
STUDY

9
OBJECTIVES OF THE STUDY

2.1 NEED FOR THE STUDY

The Financial Statements are mirror which reflects the financial position
and strengths or weakness of the concern. The Non- Banking Financial
Company has been witnessed intense competition from domestic banks and
international banks. Every business needs to view the financial performance
analysis.

The study on effectiveness of operational and financial performance of

Jain Industries is conducted to measure the overall performance of company.
The financial analysis strengths the firms to make their best use, and to be able
to spot out financial weakness of the firm to state suitable corrective actions.

This study aims at analyzing the overall financial performance of the

company by using various financial tools like Comparative Analysis, common
size statement analysis, Ratio Analysis, and Cash Flow Analysis.

10
 OBJECTIVES OF THE STUDY

2.2.1 PRIMARY OBJECTIVE:

o To studythe financial performance analysis of Jain Industries, New

Delhi.

2.2.2 SECONDARY OBJECTIVES:

o To compare and analyze the financial statements for the past three

financial years (2017,2018 and 2019)

o To know the profitability, liquidity and solvency position of Jain

Industries.

o To compare and interpret financial statements of the Jain Industries

with comparative and common-size statement analysis.

o To forecast the annual growth rate of income of the company with

the help of regression analysis.

11
o To provide suggestions for improving the overall finance

performance of the company.

12
SCOPE & IMPORTANCE
OF THE STUDY

13
SCOPE & IMPORTANCE OF THE STUDY

The study is based on the accounting information of the JAIN

INDUSTRIES, NEW DELHI. The study covers the period of 2018-20 for

analyzing the financial statement such as income statements and balance sheet.

The scope of the study involves the various factors that affect the

financial efficiency of the company. To increase the profit and sales growth of

the company.This study finds out the operational efficiency of the organization

and allocation of resources to improve the efficiency of the organization.

The data of the past three years are taken into account for the study. The

performance is compared within those periods. This study finds out the areas

where Sundaram Finance Ltd can improve to increase the efficiency of its assets

and funds employed.

14
COMPANY PROFILE

15
 COMPANY PROFILE

About Us

Started its operation in the year 2009 at Uttam Nagar, New Delhi, we, Jain

Industries, are among the prominent Manufacturer, Wholesaler, Exporter

and Importer of Paper Cup and Plate Making Machine. The product range

offered by us consists of Die Cutting Machine, Paper Cup Forming

Machine, Paper Cup Raw Material, Paper Plate Raw Material and Paper

Cup Making Machine. Offered by us, the paper cup making machines are

engineered...  Read More

Company Factsheet

Basic Information

Nature of Business Exporter and Manufacturer

 Exporter

 Trader
Additional Business
 Importer

Company CEO Sandeep Jain

Registered Address A-1/8, Sanjay Enclave, Bin

16
 Total Number of Employees 11 to 25 People

Year of Establishment 2009

Legal Status of Firm Individual - Proprietor

Annual Turnover Rs. 10 - 25 Crore

 Bahrain

 Libya

Top Export Countries  Iraq

 Tunisia

 Rwanda

Trade & Market

Export Percentage upto 20%

Infrastructure

Location Type SEMI-URBAN

Building Infrastructure Permanent

17
 Size of Premises 600 square yard

Space Around Front porch

Company USP

 Experienced R & D

 Large Product Line

Primary Competitive Advantage  Good Financial Posi

 Large Production Ca

Quality Measures / Testing Facilities Yes

Statutory Profile

Import Export Code (IEC) 05140*****

Tan No. DELS5*****

Banker AXIS BANK

GST No. 07AGCPJ5061G1ZN

Packaging/Payment and Shipment Details

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  D/A

 L/C

Payment Terms  D/P

 T/T (Wire Transfer)

 Cash

 Cheque
Payment Mode
 DD

 Online

 By Road

 By Sea
Shipment Mode
 By Cargo

 By Air

Products

Paper Cup and Plate Making Machine

We are one of the leading Manufacturer, Wholesaler, Exporter and Importer of Die

Cutting Machine, Paper Cup Forming Machine, Paper Cup Raw Material, Paper Plate
Raw Material and Paper Cup Making Machine. Manufacturing of this product is done as
per the set industry norms and guidelines, by trusted vendors, in accordance with the set
industry norms and guidelines. In addition to this, the offered range is known to be marked at
the most reasonable rate possible.

19
 Paper Cup and Glass Making Machine

 High Speed Paper Cup Machine

 Fully Automatic Paper Cup Making Machine

 High Speed Paper Glass Cup Making Machine

View All

20
 Paper Cup Forming Machine

 Paper Cups Forming Machine

 Automatic Paper Cup Forming Machine

 Automatic Single PE Paper Cup Forming Machine

View All

Die Cutting Machine

 Paper Cup Blank Die Cutting Machine

 Paper Roll Die Cutting Machine

 Wooden Roll Die Cutting Machine

View All

21
 Paper Cup Raw Material

 Paper Cup Blank

 Paper Coffee Cup Blank

View All

Paper Plate and Bowl Making Machine

 High Speed Paper Plate Machine

22
 Paper Bowl Making Machine

View All

Paper Straw Making Machines

 Paper Straw Making Machine

23
 RESEARCH
METHODOLOGY

24
4. RESEARCH METHODOLOGY

Research can be defined as “A Scientific and Systemic Search for pertinent

information on a specific topic”. Therefore, research could be understood as an

organized activity with specific objectives on a problem or issues supported by

compilation of related data and facts, involving application of relevant tools of

analysis and deriving logically on originality.

4.1 RESEARCH DESIGN

Research Design is the arrangement of condition for collection and analysis

of data in manner that aims to combine relevance to the research purpose with

25
the economy in procedure. Research Design is important primarily because of

the increased complexity in the market as well as marketing approaches

available to the researchers. A research design specifies the methods and

procedures for conducting a particular study.

4.2 TYPE OF RESEARCH

ANALYTICAL RESEARCH

In this type of research has to use facts or information already available,

and analyze these to make a critical evaluation of the material. The researcher

depends on existing data for his research work. The analysis revolves round the

material collected or available.

4.3SOURCE OF DATA

 SECONDARY DATA

Secondary Data refers to the information or facts already collected such data are

collected with the objectives of understanding the past status of any variable or

the data collected and reported by some source is accessed and used for the

objective of a study. Normally in research, the scholars collect published data,

journals, annual reports and websites.

26
4.4 TOOLS USED FOR ANALYSIS

(1) Ratio Analysis

(2) Comparative Statement Analysis

(3) Common-size Statement Analysis

(4) Cash Flow Statement Analysis

(5) Regression Analysis

4.4.1 RATIO ANALYSIS

A ratio is the process of determining and presenting the relationship of items

and groups of items in the financial statements. The ratios can be classified into

the following types:

4.4.1.1 PROFITABILITY RATIO

Profitability Ratio measured as a ability to make maximum profit from optimum

utilization of resources by a business concern is termed as profitability.

o GROSS PROFIT RATIO

27
This ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit

Ratio includes the difference between sales and direct costs.

Gross Profit Ratio = ( Gross Profit / Net Sales ) * 100

o NET PROFIT RATIO

It measures of management efficiency in operating the business successfully

from the owner’s point of view. Higher the ratio better is the operational

efficiency of business concern.

Net Profit Ratio = (Net Profit After Tax / Net Sales ) * 100

o RETURN ON EQUITY OR RETURN ON NET WORTH

This ratio signifies the return on equity shareholders funds. The profit

considered for computing the ratio is taken after payment of preference

dividend.

28
 Return on Equity = ( Net Profit After Interest And Tax /

Shareholder’s funds ) * 100

4.4.1.2ACTIVITY RATIO OR TURNOVER RATIOS:

Activity ratios highlight the operational efficiency of the business concern. The

term operational efficiency refers to effective, profitable and rational use of

resources available to the concern.

o WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It

also measures the smooth running of business. The ratio establishes relationship

between cost of sales and working capital.

Working Capital Turnover Ratio = (Sales / Net Working Capital)

o CAPITAL TURNOVER RATIO

Managerial efficiency is also calculated by establishing the relationship between

cost of sales or sales with the amount of capital invested in the business.

29
 Capital Turnover Ratio = (Sales / Capital Employed)

o FIXED ASSET TURNOVER RATIO

This ratio determines efficiency of utilization of fixed assets and profitability of a business

concern.

Fixed Asset Turnover Ratio = (Sales / Net Fixed asset)

4.4.1.3 SOLVENCY OR FINANCIAL RATIOS

Solvency or Financial Ratios include all ratios which express financial position of the

concern. The term financial position generally refers to short-tem and long-term solvency of

the business concern, including safety of different interested parties.

o CURRENT RATIO

In order to measure the short-term liquidity or solvency of a concern, comparison of current

assets and current liabilities is inevitable. Current ratio indicates the ability of a concern to

meet its current obligations as and when they are due for payment.

Current Ratio = (Current asset / Current liabilities)

o DEBT EQUITY RATIO

30
The debt equity ratio is determined to ascertain the soundness of the long term financial

policies of the company and also to measures the relatives’ proposition of outsider’s funds

and shareholdersfunds investments in the company.

Debt-Equity Ratio = ( Total Long-term Debt / Shareholder’s Funds )

o DEBT TO TOTAL FUNDS RATIO

This ratio gives same indication as the debt equity ratio as this is a variation of debt equity

ratio. This ratio is the relationship between long term debts and total long term funds.

Debt to Total Funds Ratio= ( Long-term Debt / Total Funds)

o EQUITY TO TOTAL FUNDS

Equity to total funds explains the relationship between equity and total funds.

Equity to Total Funds = ( Equity / Total Funds)

4.4.2 COMPARATIVE STATEMENT ANALYSIS

Comparative balance sheet as on two or more different dates can be used

for comparing assets and liabilities and findings out any increase or decrease in

the items.Thus while in single balance sheet the emphasis is on present position,

it is on change in the comparative balance sheet.

31
4.4.3 COMMON SIZE STATEMENT ANALYSIS

Common size statements indicate the relationship of various items with

some common items. In the income statements, the sales figure is taken as basis

and all other figures are expressed as percentage of sales.Similarly, in the

balance sheet the total assets and liabilities is taken as base and all other figures

are expressed as percentage of this total.

4.4.4CASH FLOW STATEMENT

Cash flow includes cash inflows and out flows - cash receipts and cash

payments during a period. A cash flow statement is a statement which portrays

the changes in the position between two accounting period. Cash flow analysis

can reveal the causes for even highly profitable firms experiencing acute cash

shortages.

4.4.5REGRESSION ANALYSIS

A fundamental and versatile research technique that seeks to explain an

outcome variable in terms of multiple predictor variables. This analysis reveals
the nature and strength of the relationship between each predictor variable and
the outcome, independent of the influence from all other predictors.

Regression Equation Y on X is given as:

32
Y = a + bX
Equations to find constants ‘a’ and ‘b’ are given as:
∑Y = Na + b∑X
∑XY = a∑X + b

33
LITERATURE
REVIEW

34
 LITERATURE REVIEW

3.1 REVIEW OF LITERATURE

Literature Review was done by referring previous studies, articles and

books to know the areas of study and analyze the gap or study not done so far.

There are various studies were conducted relating to operational performance of

the company from which most relevant literatures were reviewed.

Kennedy and Muller (1999),has explained that“The analysis and interpretation

of financial statements are an attempt to determine the significance and meaning

of financial statements data so that the forecast may be made of the prospects

for future earnings, ability to pay interest and debt maturines (both current and

long term) and profitability and sound dividend policy.”

T.S.Reddy and Y. Hari Prasad Reddy (2009), have stated that “The statement

disclosing status of investments is known as balance sheet and the statement

showing the result is known as profit and loss account”

Peeler J. Patsula (2006), he define that a sound business analysis tells others a

lot about good sense and understanding of the difficulties that a company will

face. We have to make sure that people know exactly how we arrived to the

35
final financial positions. We have to show the calculation but we have to avoid

anything that is too mathematical. A business performance analysis indicates

the further growth and the expansion. It gives a physiological advantage to the

employees and also a planning advantage.

I.M.Pandey (2007), had stated that the financial statements contain information

about the financial consequences and sources and uses of financial resources,

one should be able to say whether the financial condition of a firm is good or

bad; whether it is improving or deteriorating. One can relate the financial

variables given in financial statements in a meaningful way which will suggest

the actions which one may have to initiate to improve the firm’s financial

condition.

Chidambaram Rameshkumar& Dr. N. Anbumani(2006),he argue that Ratio

Analysis enables thebusiness owner/manager to spot trends in a business and to

compare its performance and condition with the average performance of

similar businesses in the same industry. To do this compare your ratios

with the average of businesses similar to yours and compare your own ratios for

several successive years, watching especially for any unfavorable trends that

may be starting. Ratio analysis may provide the all-important early warning

indications that allow you to solve your business problems before your business

is destroyed by them.

36
Jae K.Shim& Joel G.Siegel (1999), had explained thatthe financial statement

of an enterprise present the raw data of its assets, liabilities and equities in the

balance sheet and its revenue and expenses in the income statement. Without

subjecting these to data analysis, many fallacious conclusions might be drawn

concerning the financial condition of the enterprise. Financial statement analysis

is undertaken by creditors, investors and other financial statement users in order

to determine the credit worthiness and earning potential of an entity.

Susan Ward (2008), emphasis that financial analysis using ratios between key

values help investors copewith the massive amount of numbers in company

financial statements. For example, they can compute the percentage of net profit

a company is generating on the funds it has deployed. All other things

remaining the same, a company that earns a higher percentage of profit

compared to other companies is a better investment option.

M Y Khan & P K Jain(2011), have explained that the Financial statements

provide a summarized view of the financial position and operations of a firm.

Therefore, much can be learnt about a firm from a careful examination of its

financial statements as invaluable documents / performance reports. The

analysis of financial statements is, thus, an important aid to financial analysis.

Elizabeth Duncan and Elliott (2004),had stated that the paper in the title of

efficiency, customer service and financing performance among Australian

37
financial institutions showed that all financial performance measures as interest

margin, return on assets, and capital adequacy are positively correlated with

customer service quality scores.

Jonas Elmerraji(2005),tries to say that ratios can be an invaluable tool for

making an investment decision. Even so, many new investors would rather

leave their decisions to fate than try to deal with the intimidation of financial

ratios. The truth is that ratios aren't that intimidating, even if you don't have a

degree in business or finance. Using ratios to make informed decisions about an

investment makes a lot of sense, once you know how use them.

Carlos Correia (2007), had explained that any analysis of the firm, whether by

management, investors, or other interested parties, must include an examination

of the company’s financial data. The most obvious and readily available source

of this information is the firm’s annual report. The financial statements shall, in

conformity with generally accepted accounting practice, fairly present the state

of the affairs of the company and the results of operations for the financial year.

Greninger et al.(1996), identified and refined financial ratios using a Delphi

study in the areas of liquidity, savings, asset allocation, inflation protection, tax

burden, housing expenses and, insolvency. Based on the Delphi findings, they

proposed a profile of financial well-being for the typical family and individual.

38
RachchhMinaxi A (2011), have suggested that the financial statement analysis

involves analyzing the financial statements to extract information that can

facilitate decision making. It is the process of evaluating the relationship

between component parts of the financial statements to obtain a better

understanding of an entity’s position and performance.

Salmi, T. and T. Martikainen (1994), in his "A review of the theoretical and

empirical basis of financial ratio analysis", has suggested that A systematic

framework of financial statement analysis along with the observed separate

research trends might be useful for furthering the development of research. If

the research results in financial ratio analysis are to be useful for the decision

makers, the results must be theoretically consistent and empirically

generalizable.

John J.Wild, K.R.Subramanyam& Robert F.Halsey (2006), have said that

thefinancial statement analysis is the application of analytical tools and

techniques to general-purpose financial statements and related data to derive

estimates and inferences useful in business analysis. Financial statement

analysis reduces reliance on hunches, guesses, and intuition for business

decisions. It decreases the uncertainty of business analysis.

39
DATA ANALYSIS AND
INTERPRETATION

40
5 DATA ANALYSIS AND INTERPRETATION

5.1 RATIO ANALYSIS

5.1.1PROFITABILITY RATIOS

5.1.1.1 Gross Profit Ratio:

This ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit Ratio
includes the difference between sales and direct costs.
Gross Profit
Gross Profit Ratio =X100
Net Sales
Table No 5.1.1 GROSS PROFIT RATIO

Years Gross Profit Net sales Ratio

(Rs.) (Rs.) (In %)
2017-2018 30289.71 90176.44 33.58
2018-2019 21971.03 108277.62 20.29
2019-2020 32347.63 118189.37 27.37

Chart No 5.1.1GROSS PROFIT RATIO

120000

100000

80000

60000 Gross Profit (Rs.)

Net sales (Rs.)

40000

20000

0
2017-2018 2018-2019 2019-2020

INFERENCES:

The Gross Profit for the financial year 2017-2018was recorded as per the ratio is
33.58%, where as the years between 2018-2019 went through a change in the ratio of 20.29%
and the companies profit went upward in 2019-2020 with the ratio of 27.37%. Thus, it is
showing the steady growth in the company profile.

41
5.1.1.2 NET PROFIT RATIO

It measures of management efficiency in operating the business successfully from the

owner’s point of view. It indicates the return on shareholder’s investment. Higher the ratio
better is the operational efficiency of business concern.

Net Profit after Tax

Net Profit Ratio = X 100
Net Sales

Table No 5.1.2NET PROFIT RATIO

Years Net Profit Net sales Ratio

(Rs.) (Rs.) (In %)
2017-2018 21254.24 90176.44 23.56
2018-2019 15073.14 108277.62 13.92
2019-2020 22674.86 118189.37 19.18

Chart No 5.1.2NET PROFIT RATIO

120000

100000

80000
2017-2018
60000 2018-2019
2019-2020

40000

20000

INFERENCES:

The Net Profit Ratio depicts that the company had a good profit in 2017-2018 where it
had a good yield profit. Comparing to the year 2018-2019 is 13.92%, the sales of the
company have a steady attitude and increase upwards to 19.18%. This indicates that there is
an improvement in the operational efficient of the business and it leads to the increase in the
profitability of the firm.

42
5.1.1.3 RETURN ON EQUITY OR RETURN ON NET WORTH

This ratio signifies the return on equity shareholders funds. The profit considered for
computing the ratio is taken after payment of preference dividend.

Net profit after interest and tax

Return on Equity = X 100
Shareholder fund

43
 Table No 5.1.3RETURN ON EQUITY

Years Net profit after Shareholder Ratio

interest and tax Fund (Rs.) (In %)
(Rs.)
2017-2018 21254.24 231280.81 9.18
2018-2019 15073.14 268538.97 5.61
2019-2020 22674.86 333318.07 6.80

Chart No 5.1.3RETURN ON EQUITY

350000

300000

250000

200000 2017-2018
2018-2019
150000 2019-2020

100000

50000

INFERENCES:

Return on shareholder fund determines the profitability from the shareholders point of
view. From the above, it shows that in the year 2018-2019, the company shows 5.61% of
ratio and it has risen to 6.80%. This is a clear indication of overall operation is efficient.

44
5.1.2 TURNOVER RATIO

5.1.2.1WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It also
measures the smooth running of business. The ratio establishes relationship between cost of
sales and working capital.
Sales
Working Capital Turnover Ratio =
NetWorking Capital

Table No 5.1.4WORKING CAPITAL TURNOVER RATIO

Years Sales Net Working Ratio

(Rs.) Capital (In Times)
(Rs.)
2017-2018 90176.44 645733.44 0.13
2018-2019 108277.62 666319.18 0.16
2019-2020 118189.37 898497.54 0.13

Chart No 5.1.4WORKING CAPITAL TURNOVER RATIO

900000

800000

700000

600000
2017-2018
500000
2018-2019
400000 2019-2020

300000

200000

100000

INFERENCES:

A higher ratio is the indication of lower investment of working capital and more
profit. In 2017-2018, the sales of the company are low at 0.13 times but in the year 2018-
2019, it gone upward of sales to 0.16 times.
5.1.2.2CAPITAL TURNOVER RATIO

45
 Managerial efficiency is also calculated by establishing the relationship between cost
of sales or sales with the amount of capital invested in the business.

Sales
Capital Turnover Ratio =
Capital Employed

Table No 5.1.5CAPITAL TURNOVER RATIO

Years Net Sales Capital Employed Ratio

(Rs.) (Rs.) (In Times)
2017-2018 90176.44 536009.27 0.16
2018-2019 108277.62 533288.26 0.20
2019-2020 118189.37 720052.92 0.17

Chart No 5.1.5 CAPITAL TURNOVER RATIO

800000

700000

600000

500000
2017-2018
400000 2018-2019
2019-2020
300000

200000

100000

INFERENCES:
In the year 2017-2018, the sales’ comparing to 2018-2019 it is increased to 0.20 times
and it shows that efficient methods are adopted to use the capital employed. In 2019-2020,
which compares to the year 2017-2018 it indicates higher ratio of 0.17times. The capital of
the company has utilized efficiently comparing to 2017-2018.

5.1.2.3 FIXED ASSET TURNOVER RATIO

46
 This ratio determines efficiency of utilization of fixed assets and profitability of a
business concern.
Sales
Fixed Asset Turnover Ratio =
Net Fixed asset

Table No 5.1.6 FIXED ASSET TURNOVER RATIO

Years Sales Fixed Asset Ratio

(Rs.) (Rs.) (In Times)

2017-2018 90176.44 17264.30 5.22

2018-2019 108277.62 20241.05 5.35
2019-2020 118189.37 23237.80 5.09

Chart No 5.1.6FIXED ASSET TURNOVER RATIO

120000

100000

80000

Sales (Rs.)
60000 Fixed Asset (Rs.)
Ratio (In Times)
40000

20000

0
2017-2018 2018-2019 2019-2020

INFERENCES:

Higher the ratio is more than the efficiency in utilization of Fixed Assets. Lower ratio
indicates the under utilization of fixed assets. From the above table it indicates in the year

47
2018-2019, the sales have been increased comparing to the next year 2019-2020. And it’s
gradually declining over the next year 2019-2020 for 5.09 times.

5.1.3 SOLVENCY OR FINANCIAL RATIOS:

5.1.3.1CURRENT RATIO
In order to measure the short-term liquidity or solvency of a concern, comparison of
current assets and current liabilities is inevitable. Current ratio indicates the ability of a
concern to meet its current obligations as and when they are due for payment.

Current asset
Current Ratio =
Current liabilities

48
 Table No 5.1.7CURRENT RATIO
Years Current Asset Current Liabilities Ratio
(Rs.) (Rs.) (In Times)
2017-2018 56187.53 53034.57 1.06
2018-2019 68876.04 50360.94 1.36
2019-2020 166489.36 55084.13 3.02

Chart No 5.1.7CURRENT RATIO

180000

160000

140000

120000
2017-2018
100000
2018-2019
80000 2019-2020

60000

40000

20000

INFERENCES:
A high current ratio is an assurance that the firm will have adequate funds to
pays current liabilities and other payment. During the year 2019-2020, the current ratio is
3.02times and it is more when compared with previous year 2018-2019 is 1.36 times.

49
5.1.3.2 DEBT EQUITY RATIO
The debt equity ratio is determined to ascertain the soundness of the long term
financial policies of the company and also to measures the relatives’ proposition of outsider’s
funds and shareholdersfunds investments in the company.

Total Long-term debt

Debt Equity Ratio =
Shareholders Funds

Table No 5.1.8DEBT EQUITY RATIO

Years Long term debts Shareholders funds Ratio
(Rs.) (Rs.) (In Times)

2017-2018 431716.93 104292.34 4.13

2018-2019 418021.26 115267 3.62
2019-2020 588417.27 131635.65 4.47

Chart No 5.1.8DEBT EQUITY RATIO

600000

500000

400000
2017-2018
300000 2018-2019
2019-2020

200000

100000

INFERENCES:

From the above table, during the year 2017-2018 the debt equity ratio is 4.13 times and
it is decreased to 3.62 times then it shows the uptrend from the year 2019-2020 as 4.47 times.
Suggest that the debt from the company has increased over the years with increase in
shareholder funds as well.
5.1.3.3 DEBT TO TOTAL FUNDS RATIO

50
 This ratio gives same indication as the debt equity ratio as this is a variation of debt
equity ratio. This ratio is also known as solvency ratio. This ratio is the relationship between
long term debts and total long term funds.

Long Term Debts

Debt to Total Funds Ratio =
Total Funds

Table No 5.1.9 DEBT TO TOTAL FUNDS RATIO

Years Long Term Debts Total Funds Ratio

(Rs.) (Rs.) (In Times)
2017-2018 431716.93 712389.16 0.60
2018-2019 418021.26 742843.84 0.56
2019-2020 588417.27 981013.79 0.59

INFERENCES:

During the year 2017-2018, the debt to total funds ratio is 0.60 times and it was
decreased. And in 2019-2020 again it had an increase in the company’s sales comparing to
previous year 2018-2019 is 0.56 times to 0.59 times in 2019-2020.

51
5.1.3.4 EQUITY TO TOTAL FUNDS

Equity to total funds explains the relationship between equity and total funds.

Equity
Equity to Total Funds =
Total Funds

Table No 5.1.10EQUITY TO TOTAL FUNDS

Years Equity Total Funds Ratio

(In Rs.) (In Rs.) (In Times)
2017-2018 104292.34 712389.16 0.14
2018-2019 115267.00 742843.84 0.15
2019-2020 131635.65 981013.79 0.13

INFERENCES:

In the year 2017-2018, the total funds was Rs.712389.16 (in lakhs) and it shows
upward trend of Rs.981013.79 (in lakhs) and during the year 2019-2020 comparing to the
year 2018-2019 is Rs.742843.84 (in lakhs).

Particulars 2009 2010 Amount Increase / Percentage

(Rs.) (Rs.) Decrease during Increase /
2019-2020 (Rs.) Decrease
during
2019-2020 (In
%)

52
Income from Operation 108277.62 118189.37 +9911.75 +9.15
Less: Financial Expense 64544.09 63379.55 (1164.54) (1.80)

Gross Profit (A) 43733.53 54809.82 +11076.29 +25.33

Other Income:
Profit on Sale of Shares - 2538.90 - -
Other Income 3199.28 4142.57 +943.29 +29.48

Total (B) 3199.28 6681.47 +3482.19 +108.84

Total Income 46932.81 61491.29 14558.48 +134.17

(A+B) = C

Expense:
Operating Expense:

Administration Expense 7160.91 6042.27 (1118.64) (15.62)

Establishment Expense 9407.97 10011.23 +603.26
Provision 4616.80 8608.59 +3991.79 +6.41
Depreciation 3776.10 4481.57 +705.47 +86.46
+18.68
Total Operating
Expense (D) 29143.66 +4181.88
24961.78 +16.75
Operating Profit 32347.63 +10376.6
(C-D) 21971.03 +47.23

Non-Operating Expense:

Taxation 9672.77 +2774.88

6897.89 +40.23
Total Non-Operating
Expense (F) 9672.77 +2774.88
6897.89 +40.23
Net Profit (E-F) 22674.86 +7601.72
15073.14 +50.43

53
5.2.1 COMPARATIVE INCOME STATEMENT OF JAIN INDUSTRIES
FOR THE YEARENDED 31.03.2010

INFERENCES:

The comparative income statement shows income from operation amount

increase during the year 2019-2020 was Rs.9911.75 and increase in percentage
of 9.15.

For the year 2019-2020, the total income indicates Rs.14558.48 and
percentage increase during the year 2019-2020 was 134.17.

The operating profit has been increased is Rs.32347.63 in the year 2010 which
is comparing to the previous year was Rs.21971.03 and the percentage shows
increase by 47.23.

The Net profit amount increases during 2019-2020 is Rs.7601.72 and

shows percentage increase by 50.43.

54
 5.2.2 COMPARATIVE BALANCE SHE

ET OF JAIN INDUSTRIES FOR THE YEAR ENDED 31.03.2010

Amount Increase / Percentage
2019 2020 Decrease during Increase /
Particulars
(Rs.) (Rs.) 2019-2020 Decrease during
(Rs.) 2019-2020 (In %)

55
 Assets:

Current Assets 68876.04 166489.36 +97613.32 +141.72

Loans & Advance 653955.77 799363.96 +145408.19 +21.98
Deferred Tax Asset 5691.36 6124.40 +433.04 +7.61
Investment 51188.87 53744.80 +2555.93 +4.99
Fixed Asset 20241.05 23237.80 +2996.75 +14.80

Total Asset 799953.09 1048960.32 +249007.23 +31.13

Liabilities and
Capital:

Current Liability 58478.77 67946.53 +9467.76 +16.19

Unsecured Loan 208479.20 260960.87 +52481.67 +25.17
Secured Loan 417728.12 588417.27 +170689.15 +40.86

Total 684686.09 917324.67 +232638.58 +33.98

Liabilities(A)

Capital and
Reserve:

Share Capital 5555.19 5555.19 - -

Reserve & Stock
Options 109711.81 126080.46 +16368.65 +14.92

Total
Shareholders 115267.00 131635.65 16368.65 +14.20
Funds (B)

Total Liabilities 799953.09 1048960.32 249007.23 +31.13

and Capital (A+B) ========== ========== ============= =============

INFERENCES:

In the year 2019-2020, the investment it shows the uptrend for the year 2010 as
Rs.53744.80 and it has increased by 4.99%.

Fixed assets has been increased was Rs.23237.80 in the year 2010 which is comparing to the
previous year and the percentage shows increase by 14.80.

56
 During the year 2009, the shareholders fund amount to Rs.115267.00 it has been increased
to the amount of Rs. 131635.65 and percentage increased was 14.20.

Secured loans shows uptrend by Rs.588417.27 over the previous year of Rs.417728.12
and increase in percentage of 33.98.

57
 5.3.1COMMON SIZE INCOME STATEMENT OF JAIN INDUSTRIESFOR THE
YEAR ENDED 31.03.2019
2018 2019
Particulars
Amount Percentage Amount Percentage
(Rs.) (%) (Rs.) (%)

Income from Operation 90176.44 100 108277.62 100

Less: Financial Expense 49699.52 55.1 64544.09 59.6

Gross Profit (A) 40476.92 43733.53

44.88 40.39

Other Income:
- - - -
Profit on Sale of Shares
3199.28 3199.28 2.95
Other Income 3.54

Total (B) 3199.28 3.54 3199.28 2.95

Total Income 43676.20 48.43 46932.81 43.34

(A+B) = C

Expense:
Operating Expense:

7198.81 7.98 7160.91 6.61

Administration Expense
8821.90 9407.97 8.68
Establishment Expense 9.78
3308.02 3.66 4616.80 4.26
Provision
3012.19 3776.10 3.48
Depreciation 3.34

Total Operating 22340.92 24.77 23.05

Expense (D) 24961.78

Operating Profit
21335.28 23.65 20.29
(C-D) = E 21971.03
Non-Operating Expense:

Taxation 9035.47 10.01 6.37

6897.89

Total Non-Operating
9035.47 10.01
Expense (F) 6897.89 6.37

12299.81 13.63 13.92

Net Profit (E-F) 15073.14
INFERENCES:

58
The operating profit of the Jain Industries has been increased during the year 2018-2019, the
operating profit shows Rs.21335.28 in 2008 and Rs.21971.03 in the financial year 2009.

For the year 2008, the establishment expense shows Rs.8821.90 and it has been
increased to Rs.9408.97 during the year 2009.

In 2008, provision is 3.66% and it indicates increase during the year 2009 was 4.26%.

The operating expenses incurred to the Jain Industriesduring the financial year 2008
which shows Rs.22340.92 and it has risen to Rs.24961.78 during the financial year 2009.

The net profit percentage recorded as 13.63 in 2008 where as in the year 2009 the
companies profit went upward with the percentage of 13.92.

59
5.3.2 COMMON SIZE BALANCE SHEET OF JAIN INDUSTRIES FOR THE YEAR
ENDED 31.03.2019
2018 2019
Particulars
Amount Percentage Amount Percentage
(Rs.) (%) (Rs.) (%)
Assets:

Current Assets 56187.53 7.24 68876.04 8.61

Loans & Advance 652655.00 84.10 653955.77 81.74
Deferred Tax Asset 4263.67 0.54 5691.36 0.71
Investment 45645.50 5.88 51188.87 6.39
Fixed Asset 17264.30 2.22 20241.05 2.53

Total Asset 776016.00 100 799953.09 100

=========== =============

Liabilities and
Capital:

Current Liability 63626.84 8.19 58478.77 7.31

Unsecured Loan 176379.89 22.72 208479.20 26.06
Secured Loan 431716.93 55.63 417728.12 52.21

Total Liability (A) 671723.66 86.56 684686.09 85.59

Capital and Reserve:

Share Capital 2777.60 0.35 5555.19 0.69

Reserve & Stock
Options 101514.74 13.08 109711.81 13.71

Total Shareholders 104292.34 13.43 115267.00 14.40

Funds (B)

Total Liabilities and

776016.00 100 799953.09 100
Capital (A+B)
========== =========== ============ =============

INFERENCES:

60
 The current assets have increased during the financial year 2009 is 8.61%
which is comparing to 2008 was 7.24% of the Jain Industries.

There was an increase in fixed assets of Rs.20241.05 comparing to the

year 2009. Higher the ratio is more than the efficiency in utilization of fixed
assets.

The current liabilities have been decreased to 7.31% of the total liabilities
of the Jain Industries during the year 2009. The current liability was 8.91% of
the total liabilities during the year 2008.

Reserves and stock options has been increased was in the year 2009 which
isRs.109711.81 comparing to the previous year and the percentage shows
increase by 13.71%.

During the year 2018-2019, the shareholders fund amount to Rs.104292.34, it

has been increased to the amount of Rs.115267 and the percentage increased
was 14.40% in 2009.

61
1.4 CASH FLOW STATEMENT OF JAIN INDUSTRIESFOR THE YEAR ENDED
31.3.2010

Particulars 2019-2020
(In Rs.)
(A)CASH FLOW FROM OPERATING ACTIVITIES
Net Profit
226,74.86
Add: Lease Equalization Account
(91.85)
Provision for Taxation (Including Wealth Tax)
96,72.77
Add: Financial Expenses 322,55.78
633,79.55 956,35.33
Depreciation
45,80.23
Provision against Investments
1,44.64
Provision against Non - Performing assets
4,79.98
General Provisions on Standard Assets
31,61.69
Employee Stock Option Compensation Expenses
23.28
(Profit) loss on sale of assets
34.21
(Profit) loss on sale of Investments
(53,36.95)
Interest / Dividend Income
(22,00.38)
Effect of Foreign Exchange rates on Cash and Cash Equivalents,
0.18
net
OPERATING PROFIT BEFORE WORKING CAPITAL
CHANGES 965,22.21
Increase in Net Stock on hire 67,08.38
Decrease in Leased assets - net of sales (60,87.57)
Increase in Trade Bills purchased 15,44.60
Decrease in Net Investment in Lease (32.25)
Decrease in Loans and Advances (1465,04.17)
Increase in Other Receivables 13.29
Decrease in Bank Deposits (net) (1079,89.81)
Decrease in SLR Investments - net of sales (22,40.77)
Increase in Current Liabilities 32,87.01
Cash generated from Operations
Financial Expenses (619,43.37)
Direct Taxes Paid (709,48.53)
(90,05.16)
NET CASH FROM OPERATING ACTIVITIES (A) (2257,27.61)
B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (15,38.40)
Sale of Fixed Assets 96.09
Purchase of Investments (12677,85.28)
Purchase of Investments in Subsidiaries/Joint Venture (18,33.50)
Sale of Investments 12746,00.34
Interest Received 2.75
Dividend Received 21,97.65
NET CASH FROM INVESTING ACTIVITIES (B) 57,39.65

C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Debentures 3475,75.18

62
 Debentures Redeemed (2686,00.00)
Increase (Decrease) in Long Term Borrowings 869,13.98
Increase (Decrease) in Fixed Deposits 154,84.84
Increase (Decrease) in Short Term Loans and Advances 417,96.83
Dividend paid (including Corporate Dividend Tax) (53,51.34)
NET CASH FROM FINANCING ACTIVITIES (C) 2178,19.49

D) Effect of Foreign Exchange rates on Cash and Cash

Equivalents, net (D) (0.18)

NET INCREASE IN CASH AND CASH EQUIVALENTS (A)+

(B)+(C)+(D) (21,68.65)

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE YEAR 48,39.35

CASH AND CASH EQUIVALENTS AT THE END OF THE

YEAR 26,70.70

COMPONENTS OF CASH AND CASH EQUIVALENTS

AT THE END OF THE YEAR

Current Account with Banks 13,50.13

Cash, Stamps and Stamp Papers on Hand 13,20.57
26,70.70

INFERENCES:

In the year 2019-2020, the operating profit before working capital changes show the
profit amount of Rs.96522.

63
 The employee stock option compensation expenses of the Jain Industries has shown
31,61.69 (Rs. in lakhs) during the year 2019-2020.

While the Net Cash from investing activitiesdepicts Rs.5739.65 in the year 2019-2020.

There was a increase in net stock on hire during the financial year 2019-2020 of
67,08.38 (Rs. in lakhs).

The financial year 2019-2020 depicts theNet cash from financing activities amount of
Rs.217819.49 shows upward profit in the company.

Cash and cash equivalents at the end of the year were Rs.4839.35 it shows that the company
position in the year 2019-2020.

5.5 REGRESSION ANALYSIS FOR SALES

Sales
Year X Rs XY X2
( in Lakhs )

64
 Y
2008 ─1 90176.44 ─90176.44 1
2009 0 108277.62 0 0
2010 1 118189.37 118189.37 1
Total ∑x= 0 ∑y=316643.43 ∑x y= 28012.93 ∑X2 =2

∑Y=Na+b∑X

∑ XY = a ∑ X + b ∑ X2

Y=a+bX

3 a + 0 b = 316643.43 --------------- ( 1 )

0 a + 2 b = 28012.93 --------------- ( 2 )

Solving ( 1 ) and ( 2 ) We get,

a = 105547.81

b = 14006.46

When X = 2, Y2011 = 105547.81 + 14006.46( 2 )

Y2011 = Rs. 133560.73 ( in Lakhs )

When X = 3, Y2012 = 105547.81 + 14006.46( 3 )

Y2012= Rs. 147567.19( in Lakhs )

INFERENCE:

65
 The net sales during the year 2008 were 90176.44 (Rs. in Lakhs) which
has been increased to 108277.62 (Rs. inLakhs) during 2009 which also raised to
118189.37 (Rs. inLakhs) during 2010.

The projection is made for the fore coming years 2011 and 2012 where
the net sales would be 133560.73 (Rs. inLakhs) during the year 2011 and the net
sales during the financial year 2012 will be 147567.19 (Rs. in Lakhs).

66
FINDING

FINIDNGS

67
 The Gross Profit Ratio shows that increasing in sales has maintained the
companies profit level. In the year 2018-2019, the percentage shows
20.29 it has been increased during the year 2019-2020 to 27.37.

 The net profit ratio has been increased to 19.18 during the financial year
2009 – 2010 to 13.92 during 2008 – 2009 which indicates that there is an
improvement in the operational efficient of the business and it leads to the
increase in the profitability of the firm.

 It has found that the return on equity during the year 2018-2019, the
company shows 5.61% of ratio and it has risen to 6.80%. This is a clear
indication of overall operation is efficient.

 The Working capital in the year 2018-2019, the sales of the company is
low at Rs.666319.18 and it is increased to Rs.898497.54 in 2019-2020. It
measures the effective utilization of working capital.

 The capital turnover of capital employed in the financial year 2018-2019it

shows Rs.533288.26 and during the year 2019-2020 it is increased to
Rs.720052.92. It has effective utilization of capital employed under the
current year.

 Fixed asset turnover shows increase in sales of Rs.118189.37 comparing

to the previous year of Rs. 108277.62 and the firm should maintain this
increasing trend in future also.

68
 During the year 2019-2020, the current ratio is 3.02% and it is more when
compared with previous year 2018-2019 is 1.36 %. So the short term
liquidity of a concern, comparison of current assets and current liabilities
is inevitable.

 The debt equity ratio has shows 3.62% in 2018-2019 and it has been
raised to 4.47% during 2019-2020 which indicates that the company has
increased over the years with increase in shareholder funds as well.

 It is found that the shareholders funds had increased by Rs.16368.65 over

the percentage of 14.20 in comparative income statement analysis.It
determines the profitability from the shareholders point of view.

 The financial year 2019-2020 depicts the Net Cash from financing
activities amount of Rs.217819.49 shows upward profit in the company.

69
LIMITATION

70
 LIMITATION

The present study is limited to following content:

 This research examines only Jain industries financial performance.

 The research is investigating previous 5 year financial data of Jain Industries.

 The research is secondary data base research.

 Not interviewing any respondents in this research.

71
CONCLUSION

72
 CONCLUSION

In the study of Financial Performance of Jain IndustriesNew Delhi, it is

clear that the company’s financial performance is satisfactory. The company has
stable growth and it shows a greater efficiency in all the areas it works.

If the company utilizes its working capital then the company can go
heights which it wanted to achieve.The comparative income statement shows
increase in the current year of net profit and it depict the companies current
profit position. To improve the efficiency the company will strive for better
performance and increase the market share the company.

The suggestions provided through the study will help the company to
improve the operational performance efficiently. The suggestions provided
through the study will help the company to improve the operational
performance efficiently.

73
 SUGGESTIONS &
RECOMMENDATION

74
 SUGGESTIONS & RECOMMENDATION

The current ratio is improving rapidly so the company wants to keep an

eye on the current assets flow.The company has been suggested to reduce the
expenditure as it increases every year. Decrease in expenses will increase the
profitability.

By over viewing the working capital turnover ratio it is clear that the
company wants to utilize its working capital efficiently that is the excess current
assets should be adjusted according to current scenario.Though the net profit
shows it is increased but we found that the net profit ratio has been decreased.
So the company should consider increasing the sales in turn to increase the
actual profit.

The debt equity ratio of the company is also increasing. The company
should focus on the debt and long term funds which are utilized in the
company.The excess cash flow should or can be utilized in any new ventures if
the company wishes to do.

75
BIBLIOGRAPHY

76
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78