A

DISSERTATION REPORT

ON

“AN ANALYSIS OF FINANCIAL STATEMENT”

AT

GODAVARI KHORE CO-OPERATIVE MILK SANGH LTD,

KOPARGAON.

SUBMITTED TO

“SAVITRIBAI PHULE PUNE UNIVERSITY”

IN PARTITAL FULFILLMENT OF THE REQUIRMENT

OF

MASTER OF BUSINESS ADMINISTRSTION (MBA)

SUBMITTED BY

AkashAbhimanyuLokhande

(MBA Finance)

UNDER GUIDANCE OF

PROF. A.S Tamboli

AKOLE TALUKA EDUCATION SOCIETY’S

TECHNICAL CAMPUS AKOLE-422601

2018-2019

1
 Declaration

I, the under designed Mr. AkashAbhimanyuLokhande do declare that the project report
entitled “research work made for genuine & benefited work presented by me under the
guidance internal project guide.

The empirical finding in this project report is based on the data collected by me.
The matter presented in this project is not copied from any source. I understand that any
such copy is liable to the punishment in way the university authority deems fit.

The work is not been submitted for the award of any Degree of MBA earlier to
University of Pune or any other university. The project report is submitted to Pune
University, in the partial fulfillment of the Master of Business Administration.
(M.B.A.)

Date:- / /2019Akash A Lokhande

Place: - AkoleMBA (Finance)

2
 ACKNOWLEDGEMENTS

A dissertation usually falls short of its expectations unless guided by the right person at
the right time. Success of a dissertation is an outcome of sincere efforts, channeled in the
right direction, efficient supervision and the most valuable professional guidance.

First I say thanks to our respected Director Dr. PrashantTambe Sir who always inspire
&cheers us for achieving the goals & objectives. I would like to thank all those persons
under whose guidelines and suggestions I got an opportunity to discharge my duties &
responsibility. I also thank to the all teaching &non teaching staff members, who guides
& cooperates us directly or indirectly for completion of this project report.

I express our special & sincere thanks to Prof. A.S.Tamboliwho guides us start from the
dissertation up to successful completion of this dissertation. Without hisSangamner
guidance, the dissertation will not be a reality.

Date:- / /2019Akash A Lokhande

Place: - AkoleMBA (Finance)

3
 EXECUTIVE SUMMARY

Doing a professional course M.B.A Dissertation program is very important

toknowing organization culture and also helps an acquiring knowledge & preparing one
to facethe real life challenges.

I got the opportunity to undergo two months dissertation with Godavari Khore
Co-Operative Milk SanghLTD,Kopergaonand the summer project assigned to
me on the topic “AN ANALYSIS OF FINANCIAL
STATEMENT”GodavariKhoreSangh LTD. In this Project Analysis of Financial
Statement of last 4 years has been compared.

During the Dissertationinto theGodavari Khore Co-Operative Milk

SanghLTD,Kopergaon, Company provided opportunity to work under the shared
services dept.Thefinancialdata provided by the company found useful for theFinancial
Statement.Basically project is based on the historical data. I understand the various
concepts that are very useful for doing project. In this interpretation and analysis,
observation and findings, conclusion and suggestions make on the basis of collective
information from various sectors.

4
 INDEX

No. CONTENTS Page No.

01 INTRODUCTION 06

02 07
THEORETICAL BACKGROUND

03 LITERTURE REVIEW 10

04 COMPANY PROFILE 12

05 RESEARCH METHODOLOGY 14

06 16
OBJECTIVE OF STUDY

07 SCOPE OF STUDY 17

08 LIMITATION OF THE STUDY 18

09 DATA ANALYSIS AND INTERPRETATION 19

10 FINDING 42

11 CONCLUSION 43

12 SUGGESTION 44

13 ANNEXURE 45

14 BIBLOGRAPHY 49

CHAPTER NO.01
5
 INTRODUCTION

Ratio analysis is an important technique, which is widely used for

interpreting financial statement. The technique serves as a tool for assessing the current
and long term financial soundness of a business. It is also used to analysis various aspects
of operating efficiency and level of profitability. A German scholar used ratios for the
first time in 1919.

Financial statements are prepared primary for decision making. They play
a dominant for decision making. They play a dominant role in setting the framework of
managerial decision.

DEFINITION:-

WixonKell and Bedford:-

“Ratio is expressions of quantitative relationship between figures drown from

financial statements.”

Hunt, Willant Donaldson:-

“Ratio are simply a means of highlighting in arithmetical terms, of relationship

between figures drown from financial statements.”

Theoretical background

6
MEANING OF FINANCIAL STATEMENTS

Financial Statement generally consists of three basic statements the income statement, the
profits and loss account and the Balance sheet. The statement of the earnings and sources
and uses o funds statements financial statement taken to gather, give the financial
statement, taken to gather, give accounting picture at the first operation and financial
position. The package of finance statement includes such schedules as the relating to
fixed assets, long term investment long tem debts. Accrued liabilities. Cost of goods
manufactured, selling expresses and administrative and general expenses. Their
schedules mainly supplement the information contained in the financial statement and
are considered essential for the purpose at analysis. In addition, explanatory from notes
are also given as an integral past at financial statements when the information given in
the financial statement and schedules are inadequate. The inventory valuation and at
depreciation, description at contingent liabilities etc

CONCEPTS FO FINANCIAL STATEMENTS

One at the most important functions at the accounting process is to accumulate and report
historical accounting information the most prominent examples at such reports are the
general purpose financial statement showing an organizational financial position and
results of it’s operation. These financial statements are the end results at its operations.
These financial statements are the end result at the process at financial accounting. In the
words at Hampton, ”A financial statement is an organized collection at data organized
according to logical and insistent accounting procedure”1 There fore, all the statements
and accounting reports which the accountants prepare the end at t period for a business
enterprise may be taken as financial statements. But the principal financial statements,
But the principal financial statements are the ‘balance sheet’ and the profit and loss
account

TYPES OF FINANCIAL STATEMENTS:-

7
 The time is gone when leaflet or dance card’ type of annual report and considered
sufficient as a folders in which chairman and accountant’ blessed’ condensed financial
summaries. But in the present the annual reports contain financial statements and the
explanation at the various financial results. These are two major financial statements
which are vital to financial analysis and financial management i.e. profit and loss account
and balance sheet. These statements contain various information often needed by various
persons intersected in the enterprise such as shareholder, government, debenture holder,
management ET. They convey the finical condition and results operation of a enterprise
for a given period and of a given data. In the annual report, to gather with these tow
statement, these may be statements schedules of retained earnings, stockholders, equity
statement or capital surplus fund, cash flow statement etc. Acco9unting is a language of
‘finance’ or ‘monetary’ A lay man who reds these statements is not able to understand the
terminology uses in these statement.

A. Balance Sheet:

The balance sheet is a statement at asset and liabilities of a rim or what it own and what
it owes, as on a given data. In a bale sheet, the assets and liabilities are equal to each
others in the word or pile, white and loosen “A balance sheet is so called because itsto
sides must always bale, the sum of the assets shown on the bale sheet must equal
liabilities plus owner equality. According to block and first,” The balance sheet indicates
what the firm owns, and how these assets are financed in the form of liabilities or
ownership interest”

B. Income Statements:-

The income statement, usually designated as profit and loss accounts for the relevant
financial users, shows the net profit as net loss. Resulting from the operations at business
during a special field period at time.The items appearing in it use in the nature of
‘revenue’. In the words at Walgenbach, Dietrich and Hanson, “To show the results at
operations for a period, an income statement is prepared, which lists the revenues and
expenses and presents the resulting net income amount.3 Fouler defines income statement
as’ the mathematical interpretation at the policies, experience, knowledge, foresight. And
aggressiveness of the management at a business enterprise.4 The income statement
summarizes the changes that have taken place since the data at preceding bale sheet and
that have affected the owner’s share in the business either by gain or loss. It is a
performance report seconding the changes in income. expenses, profit and loss as a result
at business operations during the year between to balance sheet date.

USERS OF FINANCIAL STATEMENTS:-

8
 Different classes of people are interested in the financial statement analysis with a view
to assessing the economic and financial position of any business or industry in terms at
profitable liquidity as solvency

1. Share holders:

Divorce between ownership and management and broad-based owner at capital due to
dispersal at share holding have made share holders take more interest in the financial
statement.

2. Debenture holder:-

is interested in the short-term as well as the long-term solvency position at company.

They have to get their interned payments periodically and at the end the return at the
principle amount.

3. Creditors:

Potential suppliers at and material and others going business with the company are
interested the liquidity position at the company.

4. Important customers:

Who want to make long standing contact with the company age interested in its financial
strength?

5. Government Departments:

Dealing with the industry in which the company is engaged are interested in the financial
information relating to the company.

6. SEBI and Stock Exchange:

Are interested in the prospects and performance at listed companies with a view to
protecting the interests of investors.

7. Financial institutions and commercial Banks:

These financial institutions are interested in the solvency-short-term as well as long –

term and profitability position at the company+

CHAPTER NO.2
9
 LITERTURE REVIEW

1) Nagarajrao B.S and Chandar K (1980):-analyzed the financial

efficiency of cement companies for the selected period of the study 1970 -71 to
1977-78. It can be analyzed profitability of selected cement companies has been
found downward trend from 1970-71 to 1974-75 because the reason of inflation,
rising of manufacturing cost, continuous fall in capacity utilization due to many
reasons.

2) Kumar B. Das (1987):-has made an analysis of the financial performance of

the cement industry. it can be analyzed that the net fixed assets as a percentage of
total assets decreased for the period 1970-71 to 1977-78 that was 553.5% to 44.04
% respectively. Current liabilities have increased than the current assets.
Liquidityperformance of the cement industry is not healthy during period of the
study. The Debt Asset ratio has downward During the period of the study and
Debt Equity ratio has slightly increased while net worth ratio has decreased over
the years

3) Dr. Dinesh A. Patel (1992)have analyzed Financial Analysis - A Study of

Cement Industry of India for the period of 1979-80 to 1988-89. He can analyzed
the profitability of the cement industry, to examine the short term financial
strength of the cement industry through the analysis of working capital
management and to analyzed the long term financial strength through the analysis
of capital structure

4) GovindRao and Rao (1999)studied the impact of working capital on

profitability in Indian cement industry. It can be analyzed both positive as well as
negative correlations between working capital related ratios and profitability.

5) Rajeswari. N (2000),in her study on liquidity management of Tamil Nadu

Cement Corporation Ltd., Alangulam, identified that the liquidity position of the
Tamil Nadu Cements Corporation Ltd. (TANCEM) was not satisfactory in terms

10
 of Quick ratio and Current ratio. She concluded that necessary steps ought to be
taken to improve the liquidity position of the company.

6) GhoshS.K., and Maji S.G. (2004),in their paper, to examine the efficiency
of Working capital management of the Indian cement companies from the year
1992-1993 to 2001-2002. They conclude from the study indicated that the Indian
cement industry, as a whole, did not perform good perform during the selected
period of the study.

7) Bardia (2006),in his study on Liquidity Management of Steel Authority of

India Limited, has analyzed the overall performance of liquidity maintained by
steel sector and the amount tied-up in various components of working capital.
This study has found that there was a positive relationship between liquidity and
profitability.

COMPANY PROFILE

11
1.1 Mission, Vision & History

Vision & Mission

The main objective of the union is to increase an assured income of the
farmers by creating dairy as a primary occupation. They also support to give income to
the small farmers, firm less worker and educated unemployed person through dairy
business.

History

Godavari Khore Co-operative milk sangh ltd. was established on 20th January, 1976
with registration number ANR/PRD/169, under the co-operative leadership of Late
Mr.NamdeoraojiParjanePatil. Milk procurement was started with a collection of 80 liters
of milk per day. Due to efforts of late Mr.NamdeoraojiParjanePatil, the khore is
collecting 1, 50,000 liters milk per day. Godavari is a well known for its milk and milk
product in local and district market. Godavari collecting milk from 162 recognized
societies and processed it and made milk product. Godavari is a magic lamp for rural area
which is provided job opportunities as well as increases the standard of living of the
farmer.

1.2About Organization

12
 The Godavari dairy is one of the successful co-operative dairy was
established in 1976 with the noble purpose of providing an additional source of income to
the farmers from the surrounding villages. This revolutionary movement has crossed the
turnover of Rs100 cores per annum. The dairy has already acquired the ISO 9001-2000
certification.

In additional to this Godavari khore co-operative milk Sangh ltd has

processing with the capacity of 1.50 liters per day. in the year of 2014 the total processed
of the sangh is 60356177 liters of milk. The sangh having 35 owned and 15 rented
insulated vehicles for transportation of milk and milk products.

13
 CHAPTER 3.

RESEARCH METHODOLOGY

Research can be defined as the “search for knowledge or as any

systematic investigation to establish facts”. The primary purpose for applied research (as
opposed to basic research) is discovering, interpreting, and the development of methods
and systems for the advancement of human knowledge on a wide variety of scientific
matters of our world and the universe.

The Advanced Learner’s Dictionary of Current English lays down the

meaning of research as “a careful investigation or inquiry especially through search for
new facts in any branch of knowledge.

Research may mean the first small step in an Endeavour to better

understand the change occurring and at times forced up on us as individuals or as a
society. Research as process involves-defining and redefining problems.

It is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically

The research is said to be a good if the methodology is adopted properly.

The design and implementation is depended on data available. There a one types of Data
sources i.e. Secondary data.

14
SECONDARY DATA:-
The Secondary Data on the other hand, are based on second-hand
information. The data which have been already been collected, compiled & presented
easier by any agency may be used for the purpose of investigated such data may be called
“Secondary Data”. Collecting the information with the help of Annual Reports,
Magazines, Internet, and Reference Book.
There are many sources of data and most people tend to underestimate the
number of sources and the amount of data within each of these sources.

Sources can be classified as:

 Paper-based sources – books, journals, periodicals, abstracts, indexes,

directories, research reports, conference papers, market reports, annual reports,
internal records of organizations, newspapers and magazines.

 Electronic sources– CD-ROMs, on-line databases, Internet, videos and

broadcasts.

The secondary data collection methods used for this project are

1. Company’s Balance Sheet, Annual Audit Report, Other Financial Statements

2. The Company’s Brochure
3. Referring books
4. World Wide Web (Internet), etc.

15
 Objective of the Study

1. To know the financial strengths and weaknesses of the company.

2. To study the overall profitability of last four years by profitability ratios
.
3. To know the liquidity position of the company, with the help of Current ratio.
4. Evaluating company’s performance relating to Financial Statement Analysis.
5. To know the financial position with the help of various ratios and find out the
reason for the unsatisfactory result.

16
 Scope of the Study

The scope of the project is as follows:

1. The balance sheets and financial statements of last 4 years are only used/
2. Make necessary suggestions where the expenditure is to be controlled in order to
increase the profits.
3. This gives the practical experience for maintaining and learning the importance of
financial statements of the company.

17
 Limitation of the Study

1) Due to short period it is difficult to analyze all the information which is required to
maintain the standard of the project.

2) The project is only postmortem of the financial statement.

3) Due to business privacy they are not providing confidential data.

4) Some of the hidden limitations from the organization.

18
 CHAPTER NO.4

Data Analysis and interpretation

Data Analysis and interpretation

DATA ANALYSIS is done by use of calculations of the data collected by

means of statistical methods like average, mean, etc. Conclusions and findings of the data
were done with the use of Assumptions. For this various practical aspects and problems
were taken into consideration after discussion with the supplier and the engineers of the
company.

4.1 LIQUIDITY GROUP:-

19
1) CURRENT RATIO:-

2014-2015 2015-2016 2016-2017 2017-2018

Current Asset 88.73 96.80 117.68 122.49

Current 21.16 40.72 52.77 23.39
Liabilities
Current Ratio 4.2 2.3 2.2 5.2

Table 4.1 Calculation Current Ratio

Chart Title
140

120

100

80

60

40

20

0
2014-2015 2015-2016 2016-2017 2017-2018

Current Asset Current Liabilities Current Ratio

Graph 4.1 Current Ratio

Interpretation:
20
  Current ratio measures the relationship between current Assets and Current
Liabilities. Current ratio of 2:1 is considered satisfactory. From the above
calculation it is found that company has managed the current assets and current
liabilities in good manner because the ratio is increased from 2.2 to 5.2 which is
greater than standard ratio.
 As the ratio is higher, firms Liquidity Position is Better.
 Higher the Current Ratio better is the firm form Lenders perspective.
 The Firm has to be cautious of very high ratio.

2) Quick Ratio:-

21
 Particulars 2014-2015 2015-2016 2016-2017 2017-2018

Liquid Assets 76.19 74.18 99.60 100.78

Liquid 21.16 40.72 52.77 23.39

liabilities
Quick Ratio 3.60 1.82 1.88 4.28

Table 4.2 Calculation of Quick Ratio or Liquid Ratio

120

100

80

Liquid Assets
60
Liquid liabilities
Quick Ratio
40

20

0
2014-2015 2015-2016 2016-2017 2017-2018

Graph 4.2 Quick Ratio or Liquid Ratio

Interpretation:-
22
  Liquid ratio shows the liquidity position of the company. Normally Liquid ratio
of 1:1 is considered as satisfactory from the above calculation it is found that
company is having good liquidity because the ratio in 2017-2018is greater than
the standard ratio.
 As the Quick Ratio of the Firm is better, the firm will be able to meet its Current
Liabilities at short notice.

TURNOVER GROUP:
23
1) Fixed Asset Turnover Ratio:-

Particulars 2014-2015 2015-2016 2016-2017 2017-2018

Net Sales 979.44 1020.63 1108.21 1176.45

Fixed Asset 33.56 27.15 28.82 31.80

Fixed Asset 29.18 37.5 38.45 37

Turnover Ratio

Table 4.3 Calculation of Fixed Assets Turnover Ratio

Chart Title
1400

1200

1000

800

600

400

200

0
2014-2015 2015-2016 2016-2017 2017-2018

Net Sales Fixed Asset Fixed Asset Turnover Ratio

Graph 4.3 Fixed Assets Turnover Ratio

Interpretation:

24
 This Ratio is calculated to measure adequacy of the firm in investment in Fixed
Asset. As the firms Ratio is increasing every year, its investment in Fixed Assets
is quite adequate.
 The Profitability of the Firm Increases.

2) Current Assets Turnover Ratio:-

25
 Particulars 2014-2015 2015-2016 2016-2017 2017-2018
Net sales 979.44 1020.63 1108.21 1176.45
Avg Current Asset 88.73 96.80 117.68 122.49
Current Asset 11 Times 10.5 Times 9.4 Times 9.6 Times
Turnover Ratio

Table 4.4 Calculation of Current Assets Turnover Ratio

Chart Title
1400

1200

1000

800

600

400

200

Particulars Net sales

Avg Current Asset Current Asset Turnover Ratio

Graph 4.4 Current Asset Turnover Ratio

Interpretation:-

26
  This Ratio indicates how many times the Current Assets turn into Sales in a year.
Here the firms’ ratio is decreasing from 2014 to 2018.This shows that the firm’s
efficiency level is not too good.
 In the year 2017-2018 the ratio has increased, it means that the firm’s efficiency
level is improving.
 Higher ratio implies that the firm can achieve larger Sales with smaller capital,
exhibits better profitability to the extent of savings made in the cost of funds.

3) Current Asset Holding Period:-

27
 Particulars 2014-2015 2015-2016 2016-2017 2017-2018

Current asset 33 35 39 38
Holding
Period(Days)

Table 4.5 Calculation of Current Asset Holding Period

Current asset Holding Period(Days)

40
39
38
37
36 Current asset Holding
Period(Days)
35
34
33
32
31
30
2014-2015 2015-2016 2016-2017 2017-2018

Graph4.5 Current Asset Holding Period

4 ) Working Capital Ratio:-

28
 Particulars 2014-2015 2015-2016 2016-2017 2017-2018

Net sales 979.44 1020.63 1108.21 1176.45

Working Capital 67.58 56.09 64.91 99.10

Working Capital 1.45 18.1 17.07 11.8

Ratio

Table 4.6 Calculation of Working Capital Ratio

1400

1200

1000

800
Net sales
Working Capital
600
Working Capital Ratio

400

200

0
2014-2015 2015-2016 2016-2017 2017-2018

Graph 4.6 Working Capital Turnover Ratio

Interpretation:-

29
  We can interpret that the firms Working Capital Ratio is quite Fluctuating. More
quickly the firm turns over different current assets into Cash, More efficient is the
firm.
 This fluctuation is due to the changes in the proportion of the firms Current Asset
and Current Liabilities. In the year 2014-2015 the Current liabilities are almost
doubled, so the ratio has gone quite up.

5) Inventory Turnover Ratio:-

30
 Particulars 2014-2015 2015-2016 2016-2017 2017-2018
Net Sales 979.44 1020.63 1108.21 1176.45
Average Inventory 12.02 17.58 10.35 19.90
Inventory Turnover 81.4 58 107 59
Ratio

Table 4.7 Calculation of Inventory Turnover Ratio

1400

1200

1000

800
Net Sales
Average Inventory
600
Inventory Turnover Ratio

400

200

0
2014-2015 2015-2016 2016-2017 2017-2018

Graph 4.7 Inventory Turnover Ratio

Interpretation:-

 We can interpret that the firms Inventory Ratio is quite Fluctuating. Though the
sales are rising but yet the inventory level is much fluctuating.
31
  This fluctuation is due to the changes in the proportion of the Inventory of the
company. In the year 2015-2016 the Inventory level greatly fell down though
there was rise in sales and then again in year 2016-2017 the inventory level
increased greatly.

6) Debtors Turnover Ratio:-

32
Particulars 2014-2015 2015-2016 2016-2017 2017-2018
Net Credit Sales 979.44 1020.63 1108.21 1176.45
Closing Sundry 65.24 70.92 76.55 77.89
Debtors

Debtors Turnover 15 14.4 14.8 15.1

Ratio
Table 4.8 Calculation of Debtors Turnover Ratio

Chart Title
1400

1200

1000

800

600

400

200

0
2014-2015 2015-2016 2016-2017 2017-2018

Net Credit Sales Closing Sundry Debtors

Debtors Turnover Ratio

Graph 4.8 Debtors Turnover Ratio

Interpretation:-

 year. Here it signifies that the liquidity position of debts in the firm is good in the
year This ratio indicates the speed with which debtors are turned over during the
2016, 2017, and 2018. It is because firm has done better Receivables
Management.
In the 2010 the ratio has gone down because much of the receivables of the firm
are not yet received.
33
 7) Capital Turnover Ratio:-

Particulars 2014-2015 2015-2016 2016-2017 2017-2018

Sales 979.44 1020.63 1108.21 1176.45

34
 Capital 146.15 141.89 152.38 404.11
Employed
Capital 6.70 7.19 7.27 2.91
Turnover Ratio

Graph 4.9 calculations Of Capital Turnover Ratio

Chart Title
1400

1200

1000

800

600

400

200

0
2014-2015 2015-2016 2016-2017 2017-2018

Sales Capital Employed Capital Turnover Ratio

Graph 4.9 Capital Turnover Ratio

Interpretation:-

 This ratio indicates the time span UN which the Capital Employed is turned over
during the year. It signifies the Capital Structure of the firm. Better the ratio better
is the Capital structure.
 Here we can interpret firms ratio is quite fluctuating. It better in the year 2016-
2017 comparatively.

35
8) Proprietary Ratio:-

Particulars 2014-2015 2015-2016 2016-2017 2017-2018

Total Asset 167.30 182.61 205.15 427.50

36
 Owner funds 60.07 66.00 76.51 83.08

Proprietary 2.78 2.76 2.68 5.14

Ratio

Table 4.10 Calculation of Proprietary Ratio

Chart Title
450
400
350
300
250
200
150
100
50
0
2014-2015 2015-2016 2016-2017 2017-2018

Total Asset Owner funds Proprietary Ratio

Graph 4.10 Proprietary Ratio

Interpretation:-

 It measures the proportionate contribution of the proprietor in the total assets.

 Here we can interpret that contribution of proprietary fund is almost same till
2016-2017. But in the year it has increased which signifies qualitative and
quantitative improvement in fund. It results in improvement in the financial
position of firm.

37
PROFITABILITY GROUP:-

1) Gross Profit Ratio:-

38
Particulars 2014-2015 2015-2016 2016-2017 2017-2018

G.P 33.58 32.81 31.74 33.79

Net Sales 979.44 1020.63 1108.21 1176.45

G.P. ratio 3.43 3.21 2.86 2.87

Table 4.11 Calculation of Gross Profit Ratio

1400

1200

1000

800
G.P
Net Sales
600
G.P. ratio

400

200

0
2014-2015 2015-2016 2016-2017 2017-2018

Graph 4.11 Gross Profit Ratio

Interpretation:-

 Gross profit is excess to total sales revenue over its cost of goods sold. It reflects
Production Efficiency.

39
  Here we can interpret that till 2015-2016the efficiency of the firm is good, but in
the succeeding year it has gone down and has remained constant. This is because
the Sales of firm has gone down in 2017 and 2018

2) Net Profit Ratio:-

40
 Particulars 2014-2015 2015-2016 2016-2017 2017-2018

Net Profit 8.41 8.98 9.2 10.78

Net Sales 979.44 1020.63 1108.21 1176.45

Net Profit Ratio 0.85 0.88 0.83 0.92

Table 4.12 Calculation of Net Profit Ratio

1400

1200

1000

800
Net Profit
Net Sales
600
Net Profit Ratio

400

200

0
2014-2015 2015-2016 2016-2017 2017-2018

Graph 4.12 net profit ratio

Interpretation:-

Net Profit reflects the overall profitability of the firm.

 Here we can see that overall profitability of firm is increasing with the increase in
ratio.

41
 CHAPTER NO.05

FINDINGS

The following were the findings for this project:

1. In spite of increase in turnover in the year 2014-2015 from 979.44 lakh to 1176.45
lakh in the year 2015-2016, the Net Profit has not increased in same because there is a
reduction in its The Current Ratio increased from 2.2 in year 2016-2017 to 5.2 in year
2017-2018. It is evident that this has resulted because of reduction in Sundry
Creditors from 3873571 to 5208779.
2. Due to increase in sundry debtors the current assets increase more than current
liabilities therefore the current ratio show increase.
3. Due to maximum debtors it shows companies more working cash have been blocked
and more current ratio i.e. 5.2 is also not a good.
4. In debtors turnover ratio due to increase in sale the ratio is increasing.
.

42
 CHAPTER NO. - 6
CONCLUSION

 After the analysis of financial statements, the company status is better, because
the Net working capital of the company is increased 10 times from the last year’s
position.

 The company profits are huge in the current year; it is better to declare the
dividend to share holders. Even the Debt to equity ratio has also greatly increased.

 The company is utilizing the fixed assets, which majorly help to the growth of the
organization. The company should maintain that perfectly.

 The company’s overall position is at a good position. Particularly the current

year’s position is well due to raise in the profit level from the last year position. It
is better for the organization to diversify the funds to different sectors in the
present market scenario.

43
 SUGGESTIONS

Based on the extensive study carried out for two months on four products the
following were the suggestions & recommendations for this project to the company:

1. The company should increase its Gross Profit Margin or increase the turnover. If it
which has to increase its Net Profit.

2. The company should try to restore the Credit period from its Creditors so that more
funds are available to the Company
3. Company should try to keep its Sales or Borrowings within manageable proportion.
it should also try to reduce Debt-equity ratio to 1:1.

44
 ANNEXURE
GODAVARI KHORE CO-OPERATIVE MILK SANGH LTD,KOPARGAON
Balance Sheet as on 31st March, 2015
LIABILITIES 2014-15 ASSETS 2014-15
CAPITAL   FIXED ASSETS  

Opening Balance 3313407.75 As per fixed assets schedule 3356365.99

Add:Net Profit 841406.08    
Add: IT Refund 2007-08      
Add: Income from salary      
Add: Capital Incentive 2000000.00 INVESTMENT  
  6154813.83 Investment in shares 3799500.00
Investment in SBI Mutual
Less: Drawing 42590 fund 200000.00
Investment in PNB Mutual
Less: LIC 57029 fund 25000.00
Less:IT paid for 2008-09   Land Gut No. 121/1  
Less: TDS 48000 Land Gut No. 109 476000.00
  6007194.83    
SECURED LOANS   CURRENT ASSETS  
Cash credit from SBI 6196577.63 Closing Stock 1254521.00
Sundry debtors(As per
Term Loan SBI 1085896.91 enclosed list) 6523924.45
Car loan from PNB      
Vehicle Finance(TATA
finance) 648152.00 Deposits(Assets) 29105.00

Loan & Advances (Asset)

    (As per enclosed list) 952754.00
UNSECURED LOANS   Cash in hand 62956.00
(As per enclosed list) 677000.00 Bank A/C's 50204.00
    TDS  
CURRENT
LIABILITIES      
Provision(As per enclosed
list) 169231.00    
Sundry creditors(As per
enclosed list) 1946278.07    
       
16730330.4
  4   16730330.44

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 GODAVARI KHORE CO-OPERATIVE MILK SANGH LTD,KOPARGAON
Balance Sheet as on 31st March, 2016
LIABILITIES 2015-16 ASSETS 2015-16
CAPITAL   FIXED ASSETS  
As per fixed assets
Opening Balance 6007195.00 schedule 2715389.00
Add:Net Profit 898366.00    
Add: IT Refund 2007-08 4410.00    
Add: Income from salary      
Add: Capital Incentive   INVESTMENT  
  6909971.00 Investment in shares 3799500.00
Investment in SBI
Less: Drawing 56914.00 Mutual fund 200000.00
Investment in PNB
Less: LIC 59242.00 Mutual fund 25000.00
Less:IT paid for 2008-09 199098.00 Land Gut No. 121/1 1365000.00
Less: TDS   Land Gut No. 109 476000.00
  6594717.00    
CURRENT
SECURED LOANS   ASSETS  
Cash credit from SBI 6266306.44 Closing Stock 2262118.00
Sundry debtors(As
Term Loan SBI 534887.56 per enclosed list) 7092318.00
Car loan from PNB      

Vehicle Finance(TATA
finance) 116500.00 Deposits(Assets) 132917.00
Loan & Advances
(Asset)(As per
    enclosed list) 156185.00
UNSECURED LOANS   Cash in hand 14618.00
(As per enclosed list) 677000.00 Bank A/C's 22178.00
    TDS  
CURRENT LIABILITIES      
Provision(As per enclosed
list) 198241.00    
Sundry creditors(As per
enclosed list) 3873571.00    
   18261223.00   18261223.00 
GODAVARI KHORE CO-OPERATIVE MILK SANGH LTD,KOPARGAON

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 Balance Sheet as on 31st March, 2017
LIABILITIES 2016-17 ASSETS 2016-17
CAPITAL   FIXED ASSETS  
Opening Balance 6594717.00 As per fixed assets schedule 2881920.00
Add:Net Profit 925137.00    
Add: Income from salary 300000.00    
    INVESTMENT  
  7819854.00 Investment in shares 3799500.00
Investment in SBI Mutual
Less: Drawing 60000.00 fund 200000.00
Investment in PNB Mutual
Less: LIC 109242.00 fund 25000.00
    Land Gut No. 121/1 1365000.00
    Land Gut No. 109 476000.00
  7650612.00    
SECURED LOANS   CURRENT ASSETS  
Cash credit from SBI 6277361.00 Closing Stock 1808654.00
Sundry debtors(As per
Term Loan SBI   enclosed list) 7655375.00
Car loan from PNB 633345.00    
Vehicle Finance(TATA
finance)   Deposits(Assets) 132917.00

Loan & Advances (Asset)(As

    per enclosed list) 1849540.00
UNSECURED LOANS   Cash in hand 238947.00
(As per enclosed list) 677000.00 Bank A/C's 45814.00
    TDS 36944.00
CURRENT
LIABILITIES      
Provision(As per enclosed
list) 68514.00    
Sundry creditors(As per
enclosed list) 5208779.00    
  20515611.00   20515611.00

GODAVARI KHORE CO-OPERATIVE MILK SANGH LTD,KOPARGAON

Balance Sheet as on 31st March, 2018

47
 LIABILITIES 2017-18 ASSETS 2017-18
CAPITAL   FIXED ASSETS  
As per fixed assets
Opening Balance 7650611.49 schedule 3180301.38
Add:Net Profit 1078165.36    
Add: Income from salary 300000.00    
    INVESTMENT  
  9028776.85 Investment in shares 23105000.00
Less: Self assesment tax 09-
10 218972.00 New Land Purchase 2150000.00
Less: Self assesment tax 10- Investment in SBI Mutual
11 238198.00 fund 200000.00
Investment in PNB Mutual
Less: Drawing 164791.00 fund 25000.00
Less: LIC 98000.00 Land Gut No. 121/1 1365000.00
    Land Gut No. 109 476000.00
       
  8308815.85    
SECURED LOANS   CURRENT ASSETS  
Cash credit from SBI 6248664.63 Closing Stock 2171025.00
Sundry debtors(As per
SBI Car Loan 550000.00 enclosed list) 7789460.24
Car loan from PNB 547421.00 Statutory Current assets 421797.00
HDFC Loan 79166.62 Deposits(Assets) 32917.00

Loan & Advances (Asset)

    (As per enclosed list) 1753487.00
UNSECURED LOANS   Cash in hand 45967.00
24677000.0
(As per enclosed list) 0 Bank A/C's 24370.28
    TDS 10122.00
CURRENT LIABILITIES      
Provision(As per enclosed
list) 226631.00    
Sundry creditors(As per
enclosed list) 2112747.80    
42750446.9
  0   42750446.90

BIBLIOGRAPHY

48
 Basic accounts and finance for non accountants/ D.K. Chatterjee /
Himalaya publishing house /Page .No.- 6.8, 6.10- 6.16
 Annual reports from 2014-15 to 2017-18.

 Financial management /S.C. Kuchhal / 16th Edition reprint 2007/

Chaitanya publishing house /Reference: Page .No : 7.2-7.4, 7.18 , 7.21
 Financial management/Dr. N.M. Vechalkar /Niraliprakashan
/Reference: Page .No : 7.13 – 7.23, 4.3-4.4
 www.scribd.com
 www.oppapers.net

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