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CONTENTS

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TITLE

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ABSTRACT INTRODUCTION 1.1 About the study 1.2 About the industry 1.3 About the company MAIN THEME OF THE PROJECT 2.1 Objective of the study 2.2 Scope and limitations of the study 2.3 Research Methodology 2.4 Review of Literature ANALYSIS AND INTERPRETATION FINDING,RECOMMENDATIONS AND CONCLUSION 4.1 Findings 4.2 Recommendations 4.3 Conclusion APPENDICES BIBILIOGRAPHY

LIST OF TABLES

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CHAPTER TITLE NO
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.1Balance sheet of year(2005-2006) 3.2Balance sheet of year(2006-2007) 3.3Balance sheet of year(2007-2008) 3.4Balance sheet of year(2008-2009) 3.5 Current Ratio 3.6 Liquid Ratio 3.7 Absolute Liquidity Ratio 3.8 Fixed Assets Ratio 3.9 Net Working Capital Ratio 3.10 Debt Equity Ratio 3.11 Proprietary Ratio 3.12 Fund Flow statement(2005-2006) 3.13 Fund Flow statement(2006-2007) 3.14 Fund Flow statement(2007-2008) 3.15 Fund Flow statement(2008-2009) 3.16 Common Size Balance Sheet 3.17 Balance sheet of year(2005-2006) 3.18 Balance sheet of year(2006-2007) 3.19 Balance sheet of year(2007-2008) 3.20 Balance sheet of year(2008-2009)

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LIST OF CHARTS

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3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.3.6 3.3.7 Current Ratio Liquid Ratio Absolute Liquidity Ratio Fixed Assets Ratio Net Working Capital Ratio Debt Equity Ratio Proprietary Ratio

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ABSTRACT
THANGAVELU TEXTILE LIMITED is the profitable leading organization and succeeds over the Competition in the market. The study is necessary to look after its financial position with its own figures for the five years (2005 to 2009) and analysis them for it success. The study insists to identify the company position and to give suggestion to improve it. The main objectives of this project work are to find out the comparative balance sheet, income statement etc. The analysis is based upon the secondary data and the study period is limited to that extent. At last, it has been found out that company has good financial position

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INTRODUCTION ABOUT THE STUDY
Finance is regarding as the lifeblood of a business enterprise in general finance is the key store of every operational activities of the business in the respect all the business concern need money to make more money. Finance means allocation of money at the particular moment of time it is wanted. Finance function refers to that the procurement of funds and their effective utilization.

DEFINITION
A branch of economics concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets. To raise money through the issuance and sale of debt and/or equity. According to “Phiulippauts, financial management is concerned with management decision the result in the acquisitions and financing of long term and short

5 term credits for the firm. As such it deals with the situation that required selection of specific assets as well as the problem of size and growth of an enterprise. According to “Joseph and Massive, Financial Management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations”.

"The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions."Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities, equity, income and expenses are directly related to an organization's financial position.

PURPOSES OF FINANCIAL STATEMENT:
Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis is then performed on these statements to provide management with a more detailed understanding of the figures. These statements are also used as part of management's annual report to the stockholders. Employees also need these reports in making collective bargaining agreements (CBA) with the management, in the case of labor unions or for individuals in discussing their compensation, promotion and rankings. Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and are prepared by professionals (financial analysts), thus providing them with the basis for making investment decisions. Financial institutions (banks and other lending companies) use them to decide whether to grant a company with fresh working capital or extend debt securities (such as a long-term bank loan or debentures) to finance expansion and other significant expenditures. Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company.

6 Vendors who extend credit to a business require financial statements to assess the creditworthiness of the business. Media and the general public are also interested in financial statements for a variety of reasons.

1.2- FINANCIAL STATEMENT AND RATIO ANALYSIS
Financial ratios are a popular way for users of financial statements to develop insights into the financial performance of companies. By controlling for the effect of firm size on the level of performance, ratios enable financial statement users to examine how a firm has performed relative to its peers and relative to its own historical performance. A firm’s ratios can differ from its peers or its own historical performance because it has selected a different product market strategy, because its management team has become more effective at implementing its strategy, or because it has selected a different financial strategy. . A financial ratio is a relationship that indicates something about a company's activities, such as the ratio between the company's current assets and current liabilities or between its accounts receivable and its annual sales. The basic source for these ratios is the company's financial statements that contain figures on assets, liabilities, profits, and losses. Ratios are only meaningful when compared with other information. Since they are often compared with industry data, ratios help managers understand their company's performance relative to that of competitors and are often used to trace performance over time. Ratio analysis can reveal much about a company and its operations. However, there are several points to keep in mind about ratios. First, a ratio is just one number divided by another. Financial ratios are only "flags" indicating areas of strength

7 or weakness. One or even several ratios might be misleading, but when combined with other knowledge of a company's management and economic circumstances, ratio analysis can tell much about a corporation. Second, there is no single correct value for a ratio. The observation that the value of a particular ratio is too high, too low, or just right depends on the perspective of the analyst and on the company's competitive strategy. Third, a financial ratio is meaningful only when it is compared with some standard, such as an industry trend, ratio trend, a ratio trend for the specific company being analyzed, or a stated management objective. Financial ratios can also give mixed signals about a company's financial health, and can vary significantly among companies, industries, and over time. Other factors should also be considered such as a company's products, management, competitors, and vision for the future.

COMPATIVE FINANCIAL STATEMENT
Comparative financial statements are these statements which have been designed in a way so as to provide time perspective to the considering of various element of financial position embodied in such statement. Both the income statement and balance sheet can be prepared in the form of comparative financial statement.

INCOME STATEMENT
The income COMPARATIVE statement discloses net profit and net loss on account of operation. Comparative income statement will show the absolute figures for two or more periods. The absolute change from one to another period if desired the change terms of percentage.

COMPARATIVE BALANCE SHEET
Comparative balance sheet as on two or more different dates can be used for comparing assets and liabilities and finding out any increase or decrease in those items.

COMMON SIZE FINANCIAL STATEMENT
Common size financial statement are those in which figures reported are converted into percentage to some common base, in the income statement the sale figure is assumed to be low and all figures are expressed as a percentage of sales. Similarly in

8 the balance sheet the total of assets or liabilities is taken as 100 and all the figures are expressed as percentage of this total.

TREND PERCENTAGES
Trend percentages are immensely helpful in making a comparative study of the financial statement for several years. Under this method trend percentage are calculated for each item of the financial statement taking the figure of base year as 100.The trend percentages show the relationship of each item with its preceding year’s percentages. The trend ratio may be compared with industry ratios in order to know the strong and weak points.

NATURE OF FINANCIAL STATEMENT
According to the American Institute of Certified public Accountancy financial statements reflect a combination of recorded in the financial are not depicted in the financial statement however material they might be, for example, fixed assets are shown at irrespective of their market or replacement price since such price is not recorded in the books.

LIMITATION OF FINANCIAL STATEMENT

9 Financial statement or prepared with the object of presenting a periodical review or report on the progress by the management and deal with the, Status of the investment in the business and Result achieved during the period under the review

ABOUT THE INDUSTRY

The Indian industry is one of the largest in the World with a massive and textiles manufacturing base. Textile industry in India is the second largest employment generator after agriculture and it accounts for more than 30% of the total export Today textile sector accounts for nearly 14% of the total industry output. Indian fabric is in demand with its ethnic colored and many textures. The textile sector accounts about 30% in the total exports. India earns around 27% of the foreign exchange from exports of textiles. The textile industry is expected to generate 12 million new jobs by 2010.It generates massive potential for employment in the sector from agriculture to industrial. Employments opportunities are created when cotton I cultivated. There are approximately 1200 medium to larges scale textile mill in India.

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HISTORY OF TEXTILES INDUSTRY

The history of textile is almost as old as that of human civilization and as time moves on the history of textile has further enriched itself. In the 6th and 7th century BC, the oldest recorded indication of using fiber comes with the invention of flax and wool fabric at the excavation of Swiss lake inhabitants. In India the culture of silk was introduced in 400AD, while spinning of cotton traces back to 3000BC. In China, the discovery and consequent development of sericulture and spin silk methods got initiated at 2640 BC while in Egypt the art of spinning linen and weaving developed in 3400 BC. The discovery of machines and their widespread application in processing natural fibers was a direct outcome of the industrial revolution of the 18th and 19th centuries. The discoveries of various synthetic fibers like nylon created a wider market for textile products and gradually led to the invention of new and improved sources of natural fiber. The development of transportation and communication facilities facilitated the path of transaction of localized skills and textile art among various countries.

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SEGMENTS
Textile industry is constituted of the following segments. Ready Made Garments Cotton Textiles including mill made/power loom/hand loom Man Made Textiles Silk Textiles Woolen Textiles Hand Crafts including carpets Jute

THE FUTURE OF THE TEXTILE INDUSTRY

In the next decade India’s textile Industry is likely to do much better. As the domestic fiber consumption is low, there is low there is potential for increasing domestic consumption in tandem with the projected GDP growth of 6-8 percent and this would lead to the growth of the 6-7 percent per annum. India can also capitalize on opportunities in the export market. The industry is to generate 12mn new jobs in various sectors

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POFILE OF THE COMPANY

Thangavelu Textile Mills Ltd is engaged in manufacturing of fabric, polyester, cotton, yarn. The company was incorporated during 1993 at kamala Nagar Colony, Salem District located in Tamilnadu. When I started it capacity of 10000 spindles and it is engaged in the manufacturing of the cotton yarn.

When the sound of knowledge of the promoters, the company could establish. Following the de licensing of textile sector during 1998, competition among cotton yarns spinning mills grew rapidly.

The constitution of the company in the beginning was a partnership, which was later a limited company .The founder chairman Mr.Thangavelu and Managing Director of the company and his two sons Mr.T.Surendran and Mr.T.Senthilnathan are the board of the directors. They do not have any other business interested and they toiled since its inception to bring the company to its present level of medium Enterprise from the level of small scale Industry.

PROMOTORS & BOARD OF DIRECTORS

13 Mr.P.Thangavelu, Chairman and Managing Director, Thangavelu Textiles Mills Ltd, Salem. Mr.T.Senthilnathan Director, Thangavelu Textiles Mills Ltd, Salem. Mr.T.Surendran, Additional Managing Director, Thangavelu Textiles Mills Ltd, Salem.

PLANT LOCATION

MILLS

:

11/1, Thathampatti, Kamaraj Nagar Colony, Salem- 636014.

REGISTERTED OFFICE:

11/1, Thathampatti, Kamaraj Nagar Colony, Salem- 636014.

AUDITORTS

:

Mr.Elangovan and Natrajan Salem.

BANKERS

:

State Bank of India, Salem.

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FINANCIAL INSTITUTIONS
Industrial Development Bank O India Limited, Chennai.

OTHER GROUP OF INDUSTRIES
Thangavelu Spinning Mills –Manufactures of fabric, polyester Thangavelu Garments Thangavelu Fashions - Manufactures of cotton blended fabrics - Manufactures of grey cloth

Textiles Software Solution- Manufactures of Software especially for Textiles Industries

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THE ORGANISATIONAL STRUCTURE
The Organization has 8 departments which are as follows. Production Departments Marketing Departments Finance Departments Human Resource Departments Software Departments Electrical Departments Purchase Departments Quality Departments

PROCESSING OPERATION

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1.4- OBJECTIVES OF THE STUDY
The following are the objectives of this research: 1. To analyze and interpret the financial reports of selected textile companies. 2. To appraise the financial position using the ratio analysis. 3. To accomplish the common size analysis. 4. Interpret post-retirement obligations and funding implications for future performance. 5. To determine the level of profit generated. 6. To determine the expense and investments of the company. 7. To study the liquidity position of the concern by considering the position of current liabilities. 8. To study the trend percentage it’s helpful in making a comparative study of the financial statement of several years.

LIMITATIONS OF THE STUDY: 1. There is a limitation related to the analysis of the result, as researcher doesn’t have
modern software available to analyze the findings so the result is based on manual work. 2. The availability of funds is the one of the limitations while doing this research as a student it is difficult for the researcher to manage the funds. 3. The time period for the research is very short because it is difficult to conduct a full time research for a student.

17 4. The financial data cannot be estimated accurate for the future period. 5. The analysis and interpretation of the concern is based only past performance.

RESEARCH METHODOLOGY AND DESIGN
This chapter presents the basic methodology and requirements in research. It includes the method of research, source of data, treatment of data, and tools, which were used in the study.

RESEARCH INSTRUMENT
This research is based on secondary source of data and consists of annual reports, articles, web sites, and books.

FINANCIAL TOOLS
Ratio analysis Statement of changes in working capital Common size statement Fund flow statement

18 Comparative Balance sheet

REVIEW OF LITERATURE:
Ratios are a valuable analytical tool when used as part of a thorough financial analysis. They can show the standing of a particular company, within a particular industry. However, ratios alone can sometimes be misleading. Ratios are just one piece of the financial jigsaw puzzle that makes up a complete analysis. (Leslie Rogers, 1997) Financial ratios are widely used to develop insights into the financial performance of companies’ by both the evaluators’ and researchers’. The firm involves many interested parties, like the owners, management, personnel, customers, suppliers, competitors, regulatory agencies, and academics, each having their views in applying financial statement analysis in their evaluations. Evaluators’ use financial ratios, for instance, to forecast the future success of companies, while the researchers' main interest has been to develop models exploiting these ratios. Many distinct areas of research involving financial ratios can be differentiated. (Barnes, 1986) Financial ratios can be divided into several, sometimes overlapping categories. . Trend analysis works best with three to five years of ratios. The second type of ratio analysis, cross-sectional analysis, compares the ratios of two or more companies in similar lines of business. One of the most popular forms of cross-sectional analysis compares a company's ratios to industry averages. These averages are developed by statistical services and trade associations and are updated annually. (Ezzamel, Mar-Molinero and Beecher, 1987)

19 Financial ratios can also give mixed signals about a company's financial health, and can vary significantly among companies, industries, and over time. Other factors should also be considered such as a company's products, management, competitors, and vision for the future. (Fieldsend, Longford and McLeay, 1987) There are many different ratios and models used today to analyze companies. The most common is the price earnings (P/E) ratio. It is published daily with the transactions of the New York Stock Exchange, American Stock Exchange, and NASDAQ. These quotations show not only the most recent price but also the highest and lowest price paid for the stock during the previous fifty-two weeks, the annual dividend, the dividend yield, the price/earnings ratio, the day's trading volume, high and low prices for the day, the changes from the previous day's closing price. The price to earnings (P/E) ratio is calculated by dividing the current market price per share by current earnings per share. It represents a multiplier applied to current earnings to determine the value of a share of the stock in the market. The priceearnings ratio is influenced by the earnings and sales growth of the company, the risk (or volatility in performance), the debt equity structure of the company, the dividend policy, the quality of management, and a number of other factors. A company's P/E ratio should be compared to those of other companies in the same industry. (Garcia-Ayuso, 1994)

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TREATMENT OF THE DATA
The data and information that was gathered was interpreted and analyzed by using different financial tools. BALANCE SHEET OF THE YEAR OF (2005-2006) TABLE NO: 3.1

21

B W O 5 8 7 T 3 L 6 1 4 9 C D I E 2 P ) 5 t 9 r 6 o 3 7 2 8 1 4 u e n f 0 a p n h 8 e t 6 a 9 1 s 4 b 5 3 7 v c f 0 r i 2 k d a 0 n 3 h 8 4 7 9 1 r e 6 5 t t r 4 l 8 s 0 6 5 7 9 3 o 1 2 n e c i 9 2 4 6 7 5 i 3 1 r 8 0 n a t c l g ( L 9 7 6 a n 1 4 5 2 0 o t s u 3 4 B 0 D i 8 n r e o l C ) e s L d B H i A n a p b i a e s r p o i a A n W s i s l b k d e o w i v t r o t l a s k r l n i k e t c n ( s i e g n A e g s C a p i t a l

BALANCE SHEET OF THE YEAR OF (2006-2007) TABLE NO: 3.2

22 6 B W 0 O 5 T 7 L 9 3 1 4 C D I E 2 P ) 2 5 t r 6 o 9 3 8 7 4 1 u e n f 0 a p 8 o n h e t 6 a 5 9 7 s 1 b 3 v c f 0 r i k 1 v d a n 3 4 h 0 8 5 2 9 r e 7 6 t t 5 r 9 7 l 2 6 s 0 4 o 8 3 1 n e c i ( s 6 2 5 9 7 i 4 3 r 0 8 n a t c 3 l g B i L 2 9 5 6 a 0 7 n 8 4 o t s u 8 ) o 0 D i 3 n r e O l C e s L d B H i A n a p b i a e s r p F o i a A n W s i s l b k d e o w i v t r o t l a s k r l T n i k ( a e t c n A x s i e g n e g s C a p i t a l

23

BALANCE SHEET OF THE YEAR OF (2007-2008) TABLE NO: 3.3 9 B W 4 l O T 5 7 L 8 1 6 3 C D I E 2 P 6 ) 9 ( t r 3 o 8 5 1 2 7 4 u e n f 0 a 2 p 8 B o n h e 5 t 7 6 a s 9 1 b 3 v c f 0 r i k ) v 5 d 0 a 1 n 6 h 4 3 2 r e 8 7 t t 0 r 9 l 8 s 2 7 4 5 1 o 6 3 n e c i 6 s 5 2 7 9 0 i 3 1 4 r 8 n a t c l g i L 6 9 5 0 a 4 3 n 7 8 o t s u 5 8 o 0 D i 3 n r e O l C e s L d B H i A n a p b i a e s r p F o i a A n W s i s l b k d e o w i v t r o t l a s k r l T n i k ( a e t c n A x s i e g n e g s C a p i t a l

24

BALANCE SHEET OF THE YEAR OF (2008-2009) TABLE NO: 3.4

PARTICULARS

2008

2009

EFFECT ON WORKING CAPITAL Increase Decrease

Current Assets Inventories Debtors Cash in Hand Cash at Bank Loans and Advance Total Current Liabilities Creditors Other Liabilities Tender Deposit Provision For Tax Total(B) Working Capital(AB) Decrease in working Capital -662737 -662737 11605863 11605863 303268 623811 159779 88 2273 5561355 7530485 6033386 209659 10000000 1070000 17313045 -9782559 304990 1010050 115450 1072135 3660157 6162782 5346 320173 5000000 1500000 6825519 -662737 1722 386239 44329 189862 1901198 6028040 5000000

110514 430000

9115322

CURRENT RATIO
Current ratio is the relationship between current assets and current liabilities. Current assets Current ratio = -----------------------

25 Current liabilities A Current ratio of 2:1 is considered ideal. That is for every rupee of current liabilities there must be current assets of Rs.2. If the ratio is less than two it may be difficulties for my film to pay current liabilities. If the ratio is more than two it is an indicator of idle funds. TABLE NO: 3.5 CURRENT RATIO Year 2005 2006 2007 2008 2009 Current assets(rs) 16478118 7008874 10879408 7530486 616278 Current liabilities 24360214 20805743 22917698 17313045 11225519 Ratio 0.68 0.34 0.47 0.43 0.55

Source: Annual Report INTERPRETATION From the above table the current ratio was increased from the year 2005. It shows increase in current ratio.

CURRENT RATIO
CHART NO: 3.2.1

26

LIQUID RATIO

Liquid ratio is also called acid test ratio because it is tee acid test of a concern’s financial soundness. It is the relationship between liquid assets and liquid liabilities. Liquid assets are assets which are easily converted into cash. Liquid Assets Liquid Ratio = ------------------------Liquid Liabilities TABLE NO: 3.6 LIQUID RATIO

27 Year 2005 2006 2007 2008 2009 Liquid assets 7006918 6594956 10636170 7227218 9568392 Liquid liabilities 24360214 20805743 22917698 17313045 11225519 Ratio 0.29 0.32 0.46 0.42 0.85

Source: Annual Report

INTERPRETATION The above table shows that the liquid ratio of the company. The standard norm of the liquid ratio is 1:1. In the year 2009 was increased.

LIQUIDITY RATIO CHART NO: 3.2.2

28

ABSOLUTE LIQUIDITY RATIO
This ratio is also called as “Cash ratio or Super Quick ratio”. This ratio is calculated when liquidity is highly restricted in terms of cash and cash equivalents Marketable securities Cash ratio = Cash + --------------------------Current Liabilities An ideal cash position ratio 0.75 TABLE NO: 3.7 ABSOLUTE LIQUIDITY RATIO

Year 2005 2006 2007 2008 2009

Liquid assets 2429.76 1360.38 2021.49 1900.21 2304.42

Liquid liability 20248.53 23349.85 22972.39 25832.12 31047.98

Ratio 0.120 0.058 0.087 0.073 0.074

29

Source: Annual Report INTERPRETATION The above table shows that the absolute liquidity ratio of the company. The standard norm of the ratio is 9.51.Company was not satisfactory during the above study period because the ratio was below the stand norms.

ABSOLUTE LIQUDITY RATIO

CHART NO: 3.2.3

30

FIXED ASSETS RATIO

Fixed assets ratio is the relationship between fixed assets and capital employed. Fixed assets Fixed assets ratio = -------------------------Capital employed. Capital employed = Fixed assets + Current assets –Current liabilities TABLE NO: 3.8 FIXED ASSETS RATIO Year 2005 2006 2007 2008 2009 Source: Annual Report Fixed assets 75065.22 71780.44 72995.94 79593.70 86800.34 Capital employed 86086.21 87165.02 86900.67 82801.56 107294.16 Ratio 0.871 0.823 0.839 0.961 0.808

31 INTERPRETATION The fixed assets ratio for the year 2005 was 0.871%.It was decreased in 2006 with 0.823%.In the year 2007-2008 was increased with 0.39 to 0.961. So, the financial manager should take action to raise the fixed assets ratio of the investment.

FIXED ASSETS RATIO CHART NO: 3.2.4

32

NET WORKING CAPITAL
Net working capital shows current assets and current liabilities with capital employed. Net working capital ratio = Net working capital /capital employed TABLE NO: 3.9 NET WORKING CAPITAL Year 2005 2006 2007 2008 2009 Net working capital 110209.99 15384.58 16661.48 10958.86 8003.47 Capital employed 86086.21 87165.02 86900.67 82801.56 107294.16 Ratio 0.128 0.176 0.191 0.132 0.074

Source: Annual Report INTERPRETATION The net working capital ratio for the year 2005 was 0.128. It was 0.176 in 2006, 0.191 in 2007, 0.132 in 2008 and 0.074 in 2008.

33

NET WORKING CAPITAL RATIO
CHART NO: 3.2.5

DEBT EQUITY RATIO

This ratio is ascertained to determine long term Solvency position of a company. Debt equity ratio 1:1 is considered desirable. Long Term Debt Debt Equity Ratio = ----------------------Shareholders Fund Long Term Debt = Secured Loan + UN Secured Loan

34

Shareholders Fund = Share capital + Reserve and Surplus TABLE NO: 3.10 DEBT EQUITY RATIO Year 2005 2006 2007 2008 2009 Source: Annual Report INTERPRETATION The above table shows that the debt equity ratio of the company. The standard norm of the debt equity ratio is 2:1. Here the debt equity ratio of the company was not Satisfactory. Long Term Debt 25399.20 25003.25 30813.38 55939.94 55243.90 Shareholders Fund 44923.55 46543.33 52251.81 57650.50 64000.98 Ratio 0.565 0.537 0.589 0.970 0.863

DEBT EQUITY RATIO

CHART NO: 3.2.6

35

PROPRIETARY RATIO
Proprietary ratio is the relationship between proprietary funds and total tangible assets. Shareholders Fund Proprietary Ratio = ------------------------Total tangible assets Proprietary Fund = Share capital +Reserve and Surplus Total Assets = Fixed Assets + Investments + Current Assets + Loans and Advances

36 TABLE NO: 3.11 PROPRIETARY RATIO Year 2005 2006 2007 2008 2009 Source: Annual Report INTERPRETATION The above table shows that the proprietary ratio of the company. From the above table the proprietary ratio was showing a decreasing trend during the study period. Shareholders fun 44923.55 46543.33 52251.81 57650.50 64000.98 Total assets 10741750 111733.64 121500.39 154699.51 169127 Ratio 0.418 0.416 0.430 0.372 0.378

PROPERIETARY RATIO
CHART NO: 3.2.7

37

FUND FLOW STATEMENT OF THE YEAR (2005-2006) TABLE NO: 3.12

PARTICULAR Source Of Fund Share holders funds Loan Fund Total Application Of Funds: Fixed Assets Investment Current Assets Total Less: Current Liabilities & Provisions Net Current Assets Miscellaneous Expenditure Total

2005 16246.15 50865.17 67111.32 19175.28 3709.33 56937.23 79821.84 17327.02 62500.82 4616.50 67111.32

2006 16512.56 44185.35 60697.91 17736.27 53282.21 53282,21 73776.81 16409.55 57367.26 3330.65 60697.91

INTERPRETATION:

38 From the above table shows that the inflow of funds 2005-2006 it has been decreased and out flow of funds also decreased.

FUND FLOW STATEMENT OF THE YEAR (2006-2007)
TABLE NO: 3.13

PARTICULAR Source Of Fund Share holders funds Loan Fund Total Application Of Funds: Fixed Assets Investment Current Assets Total Less: Current Liabilities & Provisions Net Current Assets Miscellaneous Expenditure Total

2006 16512.56 44215.12 60727.68 17736.27 2758.33 53400.48 73895.08 16498.05 57397.03 3330.65 60727.68

2007 17724.15 34734.46 52458.61 17491.18 2702.03 56485.24 76678.45 26660.22 50018.25 2440.38 52458.61

INTERPRETATION: From the above table shows that the inflow of funds 2006-2007 it has been decreased and out flow of funds increased in the year.

FUND FLOW STATEMENT OF THE YEAR (2007-2008)

39 TABLE NO: 3.14

PARTICULAR Source Of Fund Share holders funds Loan Fund Total Application Of Funds: Fixed Assets Investment Current Assets Total Less: Current Liabilities & Provisions Net Current Assets Miscellaneous Expenditure Total

2007 17724.15 34751.09 52475.24 17491.18 2702.03 56452.12 75545.33 26610.47 50034.86 2440.38 52475.24

2008 23257.20 29167.86 52425.06 19602.00 2702.03 64674.05 86980.99 35985.55 50994.54 1430.53 52425.06

INTERPRETATION: From the above table shows that the inflow of funds 2007-2008 it has been decreased and outflow of funds increased in the year.

FUND FLOW STATEMENT OF THE YEAR (2008-2009)
TABLE NO: 3.15

PARTICULAR Source Of Fund Share holders funds Loan Fund

2008 23257.20 29167.86

2009 32744.47 26444.93

40 Total Application Of Funds: Fixed Assets Investment Current Assets Total Less: Current Liabilities & Provisions Net Current Assets Miscellaneous Expenditure Total 52425.06 19602.00 2702.03 64676.05 86980.08 35985.55 50994.53 1430.53 52425.06 59189.39 26711.99 2702.03 88581.08 117995.10 59226.40 58768.70 420.69 59189.39

INTERPRETATION:

From the above table shows that the inflow of funds 2008-2009 it has been increased and out flow of funds increased in the year.

COMMON SIZE STATEMENTS OF CURRENT ASSETS AND CURRENT LIABILITIES FOR THE YEAR 2005 TO 2009 TABLE NO: 3.16
PARTICULARS 2005 Current Assets Inventory Sundry Debtors Cash and Bank balance Loans and advance Total Current Assets Current % 57.48 24.54 2.86 15.12 100 2006 % 5.91 40.05 4.53 49.51 100 2007 % 1.80 27.53 17.83 52.84 100 2008 % 4.03 8.0 13.84 73.85 100 2009 % 4.95 16.39 19.27 59.39 100

41 Liabilities Current Liabilities Provision Total Current Liabilities INTERPRETATION From the above table the proprietary ratio was showing a decreasing trend during the study period.

100 0 100

100 0 100

97.49 2.51 100

93.82 6.18 100

78.02 21.98 100

COMPARETIVE BALANCE SHEET OF THE YEAR (2005-2006)
TABLE NO: 3.17 Particular Current Assets Fixed Assets Investment Total Assets Current Liabilities Miscellaneous Expenditure Share Capital Reserve & Surplus Total liabilities(A) Secured Loans Unsecured Loans Total Loans(B) Total Liabilities & Capital (A)+ (B) 2005 56937.23 19175.28 3709.33 79821.84 39610.21 4616.50 8227.63 8018.52 60642.86 1268.26 34026 46706.58 10717.44 2006 53282.21 17736.27 2758.33 73776.81 36872.66 3330.65 8227.63 8284.93 56715.87 20360.99 20310.32 22392.31 79108.18 Inc/Dec -3655.02 -1439.01 -951.00 -6045.03 2737.55 -1285.85 266.41 -3756.99 -10619.27 -13716.00 -24314.27 28071.26 Inc/Dec(%) -6.42 -7.05 -25.64 -7.57 -6.91 -27.85 3.32 -6.21 -83.75 -40.31 -52.06 -26.19

42 INTERPRETATION: The table shows that a total Assets has been decreased by -7.57%. The total liabilities and capital has been decreased by -26.19%.

COMPARETIVE BALANCE SHEET OF THE YEAR (2006-2007)
TABLE NO: 3.18 Particular Current Assets Fixed Assets Investment Total Assets Current Liabilities Miscellaneous Expenditure Share Capital Reserve & Surplus Total liabilities(A) Secured Loans Unsecured Loans Total Loans(B) Total Liabilities & Capital (A)+(B) 2006 53400.45 1736.27 2758.33 73895.05 16498.05 3330.65 8227.63 16512.56 44568.89 20390.76 20310.32. 40701.08 85269.97 2007 56485.24 17491.18 2702.03 76678.45 26660.22 2440.38 8227.63 17724.15 55052.38 19335.67 12466.81 31802.48 86854.86 Inc/Dec 3084.79 -445.09 -56.30 2783.40 10162.17 -890.27 1211.59 1048349 -1055.09 -7843 -8898.60 1584.89 Inc/Dec(%) 5.78 -1.38 -2.04 3.77 61.60 -26.72 7.34 23.52 -5.17 -38.62 -21.86 1.89

INTERPRETATION: The above table shows that a total asset has been increased to 3.77% and the total Liabilities and capital has been increased by 1.86%.

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COMPARETIVE BALANCE SHEET OF THE YEAR (2007-2008)
TABLE NO: 3.19 Particular Current Assets Fixed Assets Investment Total Assets Current Liabilities Miscellaneous Expenditure Share Capital Reserve & Surplus Total liabilities(A) Secured Loans Unsecured Loans Total Loans(B) Total Liabilities & Capital (A)+ (B) INTERPRETATION: The table shows that a total assets has been increased to 13.48 % and the total liabilities and capital has been increased by 11.29 2007 56452.12 17491.18 2702.03 76645.33 26610.47 2440.38 8227.63 9496.52 46775.00 19352.30 12466.81 31819.11 78594.11 2008 64676.05 19602.00 2702.03 86980.08 35985.55 1430.53 8227.63 15029.57 60673.28 148883.77 11908.61 26792.38 89465.66 Inc/Dec. 8223.93 2110.82 10334.75 9375.08 -1009.85 5533.05 13898.28 -4468.53 -558.20 -5026.73 8871.55 Inc/Dec.(%) 14.5 12.07 13.48 35.23 -41.38 58.26 29.71 -23.09 -4.48 -15.80 11.29

COMPARETIVE BALANCE SHEET OF THE YEAR (2008-2009)
TABLE NO: 3.20 Particular Current Assets Fixed Assets 2008 64676.05 19602.00 2009 88581.08 26711.99 Inc/Dec. 23905.03 7109.99 Inc/Dec. (%) 36.96 36.27

44 Investment Total Assets Current Liabilities Miscellaneous Expenditure Share Capital Reserve & Surplus Total liabilities(A) Secured Loans Unsecured Loans Total Loans(B) Total Liabilities & Capital (A)+ (B) INTERPRETATION: The above table a total asset has been increased to 34.93% and the total liabilities and capital has been increased by 984.55%. 2702.03 86980.05 35985.55 1430.53 8227.63 15029.57 60673.28 14883.77 11908.61 2672.38 87465.66 2702.03 117365.1 59226.40 420.69 4438.93 28305.54 923915.56 17267.07 7433.66 24700.73 948616.29 30385.05 23240.85 -1009.84 -3788.70 13275 .97 31718.28 2383.30 -4474.95 -2091.65 861150.63 34.93 64.58 -70.59 -46.05 88.33 52.27 16.01 -37.58 -7.81 984.55

FINDINGS, RECOMMENDATIONS AND CONCLUSION
FINDINGS From the analysis of the last five years of Thangavelu Textiles Mills Ltd., reveals that the Followings finding:-

45 1. From the above table the current ratio was increased from the year 2005. It shows increase in current. 2. The above table shows that the liquid ratio of the company. The standard norm of the liquid ratio is 1:1. In the year 2009 was increased. 3. The standard norm of the ratio is 9.51.Company was not satisfactory during the above study period because the ratio was below the stand norms. 4. The fixed assets ratio for the year 2005 was 0.871%.It was decreased in 2006 with 0.823%.In the year 2007-2008 was increased with 0.39 to 0.961. 5. The net working capital ratio for the year 2005 was 0.128. It was 0.176 in 2006, 0.191in 2007, 0.132 in 2008 and 0.074 in 2008. 6. The standard norm of the debt equity ratio is 2:1. Here the debt equity ratio of the company was not satisfactory. 7. From the above table the proprietary ratio was showing a decreasing trend during the study period. 8. From the above table the proprietary ratio was showing a decreasing trend during the study period. 9. The table shows that a total Assets has been decreased by -7.57%. The total liabilities and capital has been decreased by -26.19%. 10. The above table shows that a total asset has been increased to 3.77% and the total liabilities and capital has been increased by 1.86%. 11. The table shows that a total asset has been increased to 13.48 % and the total liabilities and capital has been increased by 11.29. 12. The above table a total asset has been increased to 34.93% and the total liabilities and capital has been increased by 984.55%.

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SUGGESTION

The company which maintains the ideal ratio is not good, in this company. The ideal ratio is not maintained, from it’s we suggest that the company should either decrease their liabilities or increase their assets. The lower debt equity ratio, the higher degree of protections enjoyed by the creditors so that the company has to control the both debt equity and debt assets ratio.

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The average assets cannot be reduced so that the company has to increase their sales as like in the year 2005-2006. And the company should use their assets in the effective manner to get more profit.

I) The Company has to maintain their debt equity as like in the last year (2008-2009). II) The cost should be in control as like the previous year. III) The company has to use their working capital for their day today expenses.

CONCLUTION

The study undertake on the financial performance of the Working Capital and Common Size statement of Current Assets and Current Liabilities for the year 20052009. The analysis reveals that the short term solvency position is not good, but the long term solvency position is satisfactory. So, the firm has healthy condition of finance for long term. The study reveals that the company must maintain certain level of working capital to increase the net profit as it is fluctuating every year.

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APPENDICES

Particular s
Liabilities Share Capital Reserve and Surplus Secured Loans Current Liabilities & Provision Total Liabilities

Schedule No

31.3.2009

31.3.2008

31.3.2007

31.3.2008

31.3.2005

01

44,38,000 3595,667 2,36,42,61 0 66,08,039 4,44,41,64 1

44,38,000 32,25,992 2,13,46,00 0 11225519 3,96,11,90 1

44,38,000 2748820 17131581 24360124 3,01,04,51 8

44,38,000 799344 20305743 3,13,22,92 5

44,38,000 5889182 2291698 4,03,45,22 7

02 03 4,24,4661 0

49 Assets Fixed assets C.A. loans and advance Sundry Debtors Loans and advances Cash and bank balances Profit and Loss accounts Total Assets 20

04 05 06 07 08

36840060 48904 632925 1095234 471838 15446082 4,24,46610

38278859 304990 1010050 1187543 312976 8290722 4,44,41,64 1

32084553 303268 623811 5561355 2407837 3,96,11,90 1

10934388 243238 2407837 2134850 1042052 3,01,04,51 8

7960754 413918 321976 3467646 4044315 3,13,22,92 5

BIBILOGRAPHY

JOURNALS

Annual Report of TVT LTD (2005-2009)

BOOKS I.M.Pandey Financial management vikas publications ninth edition.

50 Prasanna Chandra Investment and analysis of financial management, TATA McGraw Hill second edition. WEBSITES www.indiachina.com. www.business.mapsofindia.com. www.fibre2fashion.com.

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