A REPORT

ON
“A Study on Financial Statement Analysis on Mahamaya
Steel Industries Limited and Gagan Gases Limited”

By

Tushar Sharma
20BSPHH01C1376

A report submitted in partial fulfilment of

the requirements of MBA Program of IBS Hyderabad

Faculty Guide
Prof. C. Padmavathi
 Acknowledgement:

Gratitude is the single most important part of living a successful life. I would take this opportunity
to extend my gratitude towards them for their continuous support and guidance. They not only
motivated me but also helped me analyze each situation and information from all perspectives.
Lastly, I would like to thank my faculty mentor, Prof. C. Padmavathi for her consistent and timely
feedbacks throughout the project, without which the project would not have been carried out with
such ease. We will always be grateful for all the guidance, constructive criticism, friendly advice
and illuminating views shared through the journey of project report.

i
 Table of Contents

Executive Summary ............................................................................... 1

1. Introduction ........................................................................................ 2
1.1 Introduction................................................................................................ 2
1.2 Industry Profile .......................................................................................... 2
1.3 Company Profile ........................................................................................ 4
1.3.1 Promoters ................................................................................................ 6
1.3.2 Vision, Mission and Quality Policy........................................................ 7
1.3.3 Products and Services Profile ................................................................. 8
1.4 Competitors................................................................................................ 9
1.5 SWOT Analysis ....................................................................................... 10
1.6 Future Growth and Prospects .................................................................. 11

2. Conceptual background ................................................................... 12

2.1 Theoretical background of the study ....................................................... 12

3. Research Design ................................................................................ 16

3.1 Statement of the problem ......................................................................... 16
3.2 Need of the study ..................................................................................... 16
3.3 Objectives ................................................................................................ 16
3.4 Scope of the study.................................................................................... 17
3.5 Research methodology ............................................................................ 17
3.6 Limitations ............................................................................................... 17

4. Analysis and Interpretation ............................................................ 18

4.1 Financial Analysis ..................................................................................... 1
4.2 Comparative Financial Analysis................................................................ 4
 4.3 Comparative Income Statement and Balance Sheet - Manufacturing....... 4
4.4 Comparative Income Statement and Balance Sheet - Service .................. 7
4.5 Common Size Financial Analysis ............................................................. 1
4.6 Cash Flow Analysis - Manufacturing ........................................................ 4
4.7 Cash Flow Analysis - Service.................................................................... 7

5. Summary of Findings, Conclusion and suggestions .................... 60

5.1 Findings ..................................................................................................... 1
5.2 Conclusion ................................................................................................. 4
5.3 Suggestion.................................................................................................. 7
 List of Graphs

1. Agile Framework in Opulence Business Solutions .................................................................5

2. Sustainable Development Goals by United Nations ................................................................6

3. Raw Data format (Sheet Name: Source) ................................................................................16

4. After Data Mapping (Sheet Name: Data) ..............................................................................16

5. Profit and Loss Statement (Sheet Name: P&L) ....................................................................19

6. Conditional Formatting Rules ................................................................................................19

List of Tables

1. Agile Framework in Opulence Business Solutions .................................................................5

2. Sustainable Development Goals by United Nations ................................................................6

3. Raw Data format (Sheet Name: Source) ................................................................................16

4. After Data Mapping (Sheet Name: Data) ..............................................................................16

5. Profit and Loss Statement (Sheet Name: P&L) ....................................................................19

6. Conditional Formatting Rules ................................................................................................19

EXECUTIVE SUMMARY

1
 Chapter – I
INTRODUCTION

1.1. Introduction:
This project report is based on understanding the past, present and future of a Manufacturing and
service company. So, this helps in understanding how practically the manufacturing and service
industry works. The study explains in brief and provides financial information about the organized
study done for the industries. The objective of study is to analyse the performance and regulation
of the companies to meet its current obligations.
This applies to those enterprises to implement business solutions with certain attributes for giving
advantages for the entity as well as the employees.
Financial statement analysis is a technique of revising and analyzing an organization’s accounting
reports or financial reports so as to considered its previous, present or upcoming execution. This
process of reviewing the financial statements takes into concern better financial decision making.
After arrangement of financial report, analyzing the financial summaries with the assistance of
various tools, for example, similar explanation, common size statement, Ratio investigation.
In this procedure a significant relationship set up between at least two accounting figures for
correlation. This project is tied in with examining the budget reports by utilizing comparative
statement/common size statement and ratio analysis.

1.2. Industry Profile:

Indian Steel Industry:
India was the world's second-biggest steel maker with creation remaining at 111.2 million tons
(MT) in 2019. The development in the Indian steel area has been driven by homegrown
accessibility of crude materials like iron mineral and savvy work. Subsequently, the steel area has
been a significant supporter of India's assembling yield.
The Indian steel industry is present day with best-in-class steel factories. It has consistently strived
for ceaseless modernization of more seasoned plants and up-degree to higher energy productivity
levels. Indian steel industry is characterized into three classifications - significant makers, principal
makers and auxiliary makers.

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Indian Oil and Gas Industry:
Oil and gas area is among the eight center businesses in India and assumes a significant part in
impacting dynamic for the wide range of various significant segments of the economy. India's
monetary development is firmly identified with its energy interest, in this manner, the requirement
for oil and gas is projected to become more, along these lines making the area very helpful for
venture. The Government has taken on a few approaches to satisfy the expanding request. It has
permitted 100% Foreign Direct Investment (FDI) in many fragments of the area, including
flammable gas, oil-based goods and processing plants among others. Today, it draws in both
homegrown and unfamiliar speculation as verified by the presence of Reliance Industries Ltd (RIL)
and Cairn India. As indicated by IEA (India Energy Outlook 2021), essential energy request is
relied upon to almost twofold to 1,123 million tons of oil same, as the nation's (GDP) is relied
upon to increment to USD 8.6 trillion by 2040.

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1.3. Company Profile:
Mahamaya Steel Industries Ltd.: Mahamaya Steel Industries Limited manufactures and sells
structural steel products in India. It offers joists, H-beams, channels, angles, billets/blooms, rounds,
flats, railway sleepers, etc. The company was formerly known as Rajesh Strips Limited and
changed its name to Mahamaya Steel Industries Limited in 2009. Mahamaya Steel Industries
Limited was founded in 1988 and is based in Raipur, India.
Name: Mahamaya Steel Industries Limited
Ticker: 513554
Exchange: BSE
Founded: 1988
Industry: Steel
Sector: Materials
Market Cap: ₹1.529B
Shares Outstanding: 14.77M
Website: https://www.mahamayagroup.in

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Gagan Gases Ltd.: Gagan Gases Limited distributes LPG after bottling into cylinders for Reliance
Petro Marketing Ltd in Madhya Pradesh, India. It also markets commercial and industrial LPG.
The company was incorporated in 1986 and is based in Dhar, India.
Name: Gagan Gases Limited
Ticker: 524624
Exchange: BSE
Founded: 1986
Industry: Oil and Gas Storage and Transportation
Sector: Energy
Market Cap: ₹57.159M
Shares Outstanding: 4.52M
Website: https://www.gagangases.com

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1.3.1 Promoters:
Mahamaya Steel Industries Ltd.: Mr. Rajesh Agrawal has been the Managing Director of
Mahamaya Steel Industries Limited since September 28, 2010 and has also been its Executive
Director since May 15, 2004. Mr. Agrawal has experience in the field of production, marketing,
banking, administrative work in steel industries.

He is graduate and having vast experience in the field of manufacturing of steel structural. He has
a very good knowledge of technical aspects of projects and looking after ongoing projects and
expansions. He is also marking his presence is several businesses and has been a catalyst to several
new activities of the business arena.

He holds experience of working in Steel Manufacturing. He holds experience of working as

Director at Abhishek Steel Industries Limited. Mr. Agrawal holds a bachelor’s degree of
Commerce. He has been a catalyst to several new activities of the business arena.

Tenure: 10.92 Years

Compensation: Rs. 4,800,000

Gagan Gases Ltd.: Mr. Gagan Maheshwary serves as Managing Director at Gagan Gases Limited
since October 19, 2019 and has been its Director since August 22, 2016. He served as its
Compliance Officer until April 9, 2016 and as its Whole Time Director until August 13, 2016. Mr.
Maheshwary has been associated with Gagan Gases Limited for many years.

Tenure: 1.83 Years

Compensation: Rs. 541,935

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1.3.2 Vision, Mission and Quality Policy:
Mahamaya Steel Industries Ltd.:
• Vision: Globally admired organization that enhances the quality of life of all stakeholders
through sustainable industrial and business development.
• Mission: They aspire to achieve business excellence through:
o The spirit of entrepreneurship and innovation
o Optimum utilization of resources
o Sustainable environment friendly procedures and practices
o The highest ethics and standards
o Hiring, developing and retaining the best people
o Maximizing returns to stakeholders
o Positive impact on the communities
• Quality Policy: The rigorous testing commences right from receipts of raw material and
continues in all the manufacturing steps till the dispatch of the finished products. The
Systematic Quality Control Processes ensure the correct chemistry, strength, casting,
soundness and dimension standard for all the product to achieve optimal performance. An
Independent laboratory equipped with modern testing facilities including UTM,
Spectrometer, Impact testing Machine, Micro and Macro etching test for instant annals and
hardness testing etc. Supervises and control various processes and parameters.

Gagan Gases Ltd.:

• Vision: Globally admired organization that enhances the quality of life of all stakeholders
through sustainable industrial and business development.
• Mission: They aspire to achieve business excellence through:
o Sustainable environment friendly procedures and practices
o Maximizing returns to stakeholders
o Positive impact on the communities
• Quality Policy: The rigorous testing commences right from receipts of raw material and
continues in all the manufacturing steps till the dispatch of the finished products.

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1.3.3 Products and Services Profile:
Mahamaya Steel Industries Ltd.:
Mahamaya steel enterprises restricted was set up in the year 1984. They are the main steel items,
steel points, channels, sheets, radiates. Mahamaya is one of only a handful not many in the country
who plans 600 mm joist and 250 mm points. Mahamaya has stayed up with present day time, by
consistently modernizing its plant and hardware so its item confides to determination as needed by
various clients.
Indian industry is going through various period of worldwide rivalry. It is in effect progressively
understood that innovation is the apparatus for seriousness in the market place. Considering this
factor, the Indian businesses have accomplished an incredible forward leap in creating steel
structures. New vindicates for expanded utilization of practically all steel things have opened up
in the country with mechanical exercises encountering another up-flood following the
advancement of the economy. Almost certainly that the utilization of steel plays had a main
influence in the advancement of country and along these lines request of primary steel enrolled a
momentous development in the mechanical base all through the world.
Mahamaya prepares ventures restricted, a significant power in the Indian mechanical situation,
with 26" and 28" primary plants having ability to deliver 355000 mt underlying steel a lot softening
shop with ccm to create equivalent amount of billet sprout per annum, continually seeks after
greatness with sharp client center and giving their requesting customer base a wide scope of steel
thing outfitted to meet the best and execution guidelines.

Gagan Gases Ltd.:

GGL was joined on 06-03-1986 as a Private Ltd organization and hence changed over into Public
Ltd organization by passing Special Resolution in its EGM hung on 13-10-93 and acquired
Certificate from Registrar of Companies, Madhya Pradesh on 22-11-93. GGL is a current benefit
making, a profit paying organization occupied with the matter of assembling and promoting
modern gases at Pithampur, a proclaimed Industrially in reverse region.
The organization has set up the current plant for the assembling of Oxygen (Installed limit 1116000
cm), Nitrogen (Installed limit 216000 cm), and a side-effect Liquid Nitrogen. The organization as
of now is providing these Industrial gases to the different units in the Steel, Pharmaceutical,
Chemical, Fabrication enterprises. They also deal in:
• Automotive Lubricants
o Synthetic Engine Oils
o Mineral Engine Oils
o Gear Oils & Greases
• Industrial Lubricants
o Synthetic Oils / Greases
o Hydraulic Oils

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1.4 Competitors:
Mahamaya Steel Industries Ltd.: The Competitors frame of reference for the Steel industry are
given in the following figures:

Gagan Gases Ltd.: The Competitors frame of reference for the Oil and Gas industry are given in
the following figures:

9
1.5 SWOT Analysis:
Mahamaya Steel Industries Ltd.:

Gagan Gases Ltd.:

10
1.6 Future Growth and Prospects:
Mahamaya Steel Industries Ltd.
The nation saw lockdown being carried out in India in the long stretch of March 2020. There were
additionally limitations of differing degree across bigger piece of the world, because of the
COVID-19 pandemic. The Company's assembling offices stayed shut from 23 March, 2020
because of lockdown and to some extent returned w.e.f. 24 May, 2020, which has affected its tasks
during April and May 2020. A portion of the Company's forthcoming orders were waiting
according to necessity of purchasers. Notwithstanding, after opening of industrial facilities we
were in course of dispatch of our completed items and has restarted activities considering request
book and accessible labor force holding fast to the wellbeing standards endorsed by legislature of
India.
The Company is taking most extreme consideration of its staff and labor force like disinfection,
social separating, compulsory veil wearing, warm check at the door, keeping up with appropriate
cleanliness. Production network is being observed to guarantee accessibility of material. We have
taken income, capital consumption and overhead control measures to flawlessly deal with our
tasks. Accessibility of work has turned into a bigger test while the current client slants and the
opposite movement of the traveler labor force present difficulties, the Company is female horse
sure that the interest circumstance will get dynamically. The Company's capital and Banking
offices stay unblemished.
In the predominant COVID-19 circumstance the organization's income for the first and second
quarter of FY 2020-21 is affected. As the business circumstance is exceptionally fluctuating, the
Company is intently checking it and expectation the equivalent could be standardize from 3
quarter. There were some liquidity issues as there was delay in acknowledgment receivables.
Nonetheless, it is being attempted to be taken care of however much as could be expected by
following the severe income the board practice. The Company is very much situated to satisfy its
commitments and furthermore doesn't anticipate any critical effect on the business because of non-
satisfaction of the commitments by any party.
Gagan Gases Ltd.
The stock price in the recent scenario shows a declining curve. The investment in the firm can be
based on the revolutionary techniques applied by the firm and not a lot of information can be found
on the firm. The company promised certain growth objective and based on that volatility in the
company can be observed.

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 Chapter – II
Conceptual Background

2.1 Theoretical background of the study:

There are two kinds of Financial Analysis:
• On the basis of Materials Used
o External Analysis: This assessment is done by the people who are outcasts for the
corporate the term untouchables consolidate theorists, government workplaces and
credit associations diverse advance supervisors who have no passageway to within
seconds at the association. The site of this current examinations for extended
regulatory regulator over associations and authoritative rules reveal at information
by the associations at spending reports.
o Internal Analysis: This assessment is done by individuals that technique the books
of record and different information associated with the business. The assessment is
done depending on the target to be cultivated through this examination.
• On the basis of Styles
o Horizontal Analysis: In case at this sort at assessment, monetary rundowns for a
number of years, are fulfilled and mulled over. The current year's figures are
compassed with the typical or base year the examination depiction an assessment
gives the organization broad information into levels and zones of fortitude and
weakness.
o Vertical Analysis: In case at this kind of examination an assessment is made at the
quantifiable relationship at the various things in the finical explanation in a
particular data such an assessment is useful in taking a gander at the execution at a
couple of associations in a comparable social event, or office or workplaces in the
near relationship since this examination depends upon the data for cone period, this
isn't useful for fitting assessment at the association's budgetary position.
Tools and Techniques of Financial Statements:
• Accounting Techniques: Bookkeeping techniques which might use for monetary
investigation are numerous like near assertion examination, proportion examination,
pattern examination, esteem added investigation, normal size articulation examination and
so forth the customers get the methods to suit their seamier. The accounting techniques
which are expected to be used for the assessment of money reports.
o Ratio Analysis: The measure the financial state and execution of an endeavor the
cash related agent needs sure under sticks cone at such rustics sometimes used is
an extent or rundown, seating two pieces at budgetary data to one another's. Extents,
as a device at financial organization, can be communicated as (a) rate, (b) part, and

12
 (c) a correlation relationship between numbers. The expression "bookkeeping
proportions" is used to depict basic relationship which happen between figures
uncovered in financial record, in an advantage and setback account, in a budgetary
regulator, system, or in some other chronicled at the accounting affiliation monetary
proportions can be secluded into explicit classes on the reason at the things which
are used for extents. Four sorts at monetary extent are usually used
▪ Liquidity Ratios
▪ Activity Ratios and Leverage Ratios
▪ Profitability Ratios
o Common Size Statement: The basic size articulations are known as segment rate
proclamations or know as part rate proclamations or vertical explanations. In this
method, the aggregate resources or liabilities and the figure or net deals are taken
equivalent to one hundred and the rates at individual things are determined. In the
regular size pay articulation, the net deals are relied upon to be 100% and different
things are expressed, as a rate at deals. In like manner in the basic size monetary
record the all-out resources as absolute liabilities are expected to be100% and
different things at resources and liabilities are conveyed as a rate at this aggregate.
Formula = (Analysis Amount / base amount of total assets) x 100%
o Comparative Statement Analysis: Assessment at spending synopses for
somewhere around two years is another's techniques used in separating data
comparative financial outlines are clarifications at cash related situation at a
business so exceptionally arranged as o position at a business so singe as to give
time perspective to the idea at various parts at budgetary setting exemplified in such
enunciations for this reasoning the resource report and advantage and mishap the
money related record and advantage and setback account are make in close to
structure, relative announcements may be made to show up.
▪ Entire Data (Rupee amount or Money Values)
▪ Rise or decline in absolute data in terms at percentage.
▪ Rise or decline in absolute values in terms at money values.
• Financial Analysis Process
o Identify the industry economic features: In the first place, pick a respect chain
assessment for the business—the chain of exercises related with the progression,
with the turn of events, gathering and transport of the organization's things just as
organizations. Strategies models Porter's Five Forces or examinations of monetary
properties are usually used in this movement.
o Identify company strategies: Then, take a gander at the sort of the
thing/association being offered by the firm, consolidates the uniqueness of thing,
estimation of pay edges, and age of brand endurance and control of expenses. Also,
factors, for example, stock framework compromise; geographic extending and
industry increase ought to be thought of.
o Assess the value of the firm’s financial statement: Survey the key spending
diagrams inside the setting of the sensible bookkeeping models. In exploring cash
related record accounts, issues, for example, certification, valuation and depiction

13
 are keys to appropriate assessment. The central solicitation ought to be whether this
accounting report is a finished portrayal of the connection's budgetary status. While
studying the compensation clarification, the central issue is to fittingly survey
advantage as a total portrayal of the connection's cash related execution. Evaluation
of the statement of money streams helps in understanding the impact of the
connection's liquidity position from its tasks, theories and cash related exercises
over the period—on a very basic level, where extras started from, where they went,
and how the overall liquidity of the firm was influenced.
o Analyse present profitability and risk: This is the spot monetary specialists can
truly fuse an impulse in the valuation of the firm and its spending reports. The most
expectedly assessment contraptions are key money related overview degrees
partner with liquidity, resource the authorities, productivity, and responsibility the
board/consolidation and risk/display valuation. Concerning proficiency, there are
two broad solicitations to be mentioned: how accommodating are the procedures of
the firm with respect for its potential benefits—liberated from how the firm
finances those central focuses—and how useful is the firm from the perspective on
the regard theorists. It is in like way basic to figure out how to disaggregate return
measures into essential impact all things considered, it is key to look at any
monetary report degrees all around, seeing at the current degrees in relationship
with those from prior periods or concerning different affiliations or industry
midpoints.
o Prepare estimated financial statements: In spite of the way that ordinarily testing,
budgetary experts should make sensible suppositions about the inescapable
predetermination of the firm (and its industry) and pick what these questions will
mean for both the money streams and the financing. This regularly appears as
master structures spending overviews, in context on methodology, for example, the
percent of offers approach.
o Value of the firm: While there are different valuation draws near, the most
outstanding is a sort of lessened compensation procedure. These money streams
could be as predicted benefits, or dynamically completely procedures, for example,
free money streams to either the regard holders or on connection premise. Various
frameworks might join utilizing related valuation or bookkeeping based
assessments, for example, budgetary respect in any case.
Advantages of Effective Analysis:
• Show the cash related possibility of a business experience. Empowers you to fabricate a
model of how you might perform financially if certain methods, events and plans are
finished.
• Permit you to deal with your business right way and accept accountability for your pay.
• Recognizes possible risks and cash deficiencies to keep the business out of the budgetary
burdens.
• Permits you to evaluate the real cash related action of the business against the examination
financial game plan and make adjustment where indispensable.

14
 • Gives an assessment of future cash needs and regardless of whether additional private
worth or getting is fundamental.
• Gives a norm against which to measure future execution.
Statement Analysis – Users
• Creditors: Any individual who has progressed resources for an affiliation is amped up for
its capacity to take care of the responsibility, thusly will exertion a few compensation
measures.
• Management: The affiliation regulator makes an on-going assessment of the affiliation's
budgetary results, especially in relationship with various functional assessments that are
not seen by outside parts.
• Regulatory Bodies: In the event that an affiliation is straightforwardly held, its spending
summaries are reviewed by the Securities and Exchange Commission to check whether its
revelations adjust to the various bookkeeping measures and the standards of the SEC.
• Investors: Both present and inescapable scholars see spending layouts to find a few
solutions with respect to an affiliation's capacity to keep giving advantages, or to make pay,
or to keep making at its past rate.

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 Chapter – III
RESEARCH DESIGN

3.1 Statement of the problem:

The centrality of a real cash related examination in any advanced concern can't be overemphasized.
Under the present inflationary condition, examination of assets is perhaps more fundamental than
even organization of advantage and this requires most outrageous thought and attempts of the
record chairman.
It needs attentive thought as all of its portions require assorted sorts of treatment and it throws
consistent thought on exercise of fitness and judgment, care of financial example, etc., in view of
genuineness and complicacy the key meaning of the assessment.
The counter inflationary measure taken up by the Government, making a tight money condition
has set examination of the assets in the most testing zone of the board and it requires a unique
capacity for its organization. Today, the issue of directing Cash has the affirmation of discrete
substance, so its assessment and the board is of critical importance to both inside and outside
master to condemn the current situation of the business concerns.

3.2 Need of the study:

Monetary rundown assessment is utilized to discover the models and relationship between
spending report things. Both inside association and outside the association (show as overseers,
leasers, government and analysts) of the monetary reports must to figure/discover an affiliation's
efficiency, liquidity, and dissolvability.

The most comprehensively noticed methods utilized for cash related explanation assessment are
plan assessment, normal size verbalizations, and degree assessment. These techniques intertwine
counts and assessments of the outcomes to recorded affiliation information, competitors, or
industry midpoints to pick the overall quality and execution of the affiliation being explored.

3.3 Objectives:

• To analyze the earning capability or profitability of the company.

• To analyses and compare the financial position of the company for every two years.
• To measure the short term as well as long term creditworthiness position of the firm.
• To determine the liquidity position of the company based on the turnover.

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3.4 Scope of the study:
The degree is to drive vital use of speculation for authentic utilization. As the assessment is zeroing
in on distinctive the current capacity of the association cash related organization methods and
focuses, we perceive the best budgetary examination procedure to be passed on to work on the
association's way to deal with choose their advantage.
This assessment offers information to the organization of high regard things and low regard things.
This examination moreover gives the idea with respect to current effort and addressable towards
keeping up the feasible cash related assessment measures.

3.5 Research Methodology:

Research
Research is a system where the investigators wish to find the end result for a given issue and thusly
the course of action helps in estimating approach. The assessment has been throughout portrayed
as "A careful report or enquiry especially through check for new real factors in piece of data"
Research Design
The assessment arrangement used in this errand is Analytical/astute in nature the method using,
which examiner needs to use sureness’s, information authoritatively available, and research these
to make an essential evaluation of the execution.
Types of Research
• Descriptive Research
Data Collection
• Secondary Data
o From the annual reports maintained by the organization/company such as
statement of the profit and loss balance sheets
o Books and journals pertaining to the topic.
o Data are collected from the company website.

3.6 Limitations:

• Not a Substitute of Judgement

o An assessment of financial report can't happen of value decision. It is only an
approach to accomplish closes/results. Finally, the decisions or judgment are
taken by a took part individual or analyst on his/her insight and ability.
• Based on Historic Data
o Simply past information of accounting information is joined into the money
reports, which are taken apart. The future can't be similarly as past. Thus, the
investigation of monetary reports can't give a reason to arranging, impending
measure, anticipating, and masterminding.

17
• Problem in Comparability
o The proportion of business concern is changing according to the volume of trades.
Henceforth, the figures of different spending reports lose the typical for
comparability.
• Reliability of Figures
o A portion of the time, the sections of the financial rundowns are changed by
window dressing. Given that this is valid, the assessment of spending rundowns
results in bogus or pointless.
• Different Procedures of Accounting and Financing
o The end stack of harsh material is settled at buy cost. The end stack of completed
things is an inspiration at market cost or cost regards whichever is less. Exactly
when everything is said in done, the end stock is respected at cost or market
regard whichever less is. It proposes that the end pile of crude material is
respected at cost or market regard whichever less is. So; a specialist should keep
in see these fixations while making assessment and light all around the outcomes
would swindle.
• Change in Accounting Methods
o There ought to be uniform bookkeeping strategies and systems for number of
years. In the event that there are conventional changes, the fig of various periods
will be remarkable and exceptional. In such a case, the assessment has no respect
and sense.
• Changes in the Value of Money
o The securing effect of cash is lessened from one year to other year by virtue of
augmentation. It produces issues in relative assessment of financial frameworks of
various years.
• Limitations of the Tool Application for Analysis
o There are assorted instruments used by a specialist for an assessment. In spite of
the way that, the utilization of a particular instrument or system relies upon the
inclination and routine concerning the inspector. If an unacceptable contraption or
technique is associated, totally, the results are misleading.
• No Valuation of Managerial Ability
o The delayed consequences of the examination of monetary reports should not to
be taken as an idea of lucky or appalling organization. Hence, the regulatory limit
can't be assessed by assessment.
• Change of Business Situation
o The conditions a lot of one firm can never resemble another firm. Additionally,
the business condition and states of one year to coming about can never be
tantamount. Thusly, it is hard for examination and relationship of one firm with
another.

18
 Chapter – IV
Data Analysis and Interpretation

3.1 Financial Analysis:

Making an association's cash related assessment can be critical to choose if to place assets into the
association. There is no specific system for doing all things considered and presentation styles with
shift, yet key sections should be consolidated into any budgetary assessment.
Financial Statements
The underlying advance to making a budgetary examination of any association is to secure
something like three years of financial reports, but five years’ worth is idle. Spending rundowns
can be viably gotten from the association's yearly report or SEC filling through the EDGAR
information base.
Dependent upon the size, thought of the association, a variety of financial reports may be open.
All associations should have their resource report and pay decree - in any case, more prominent
associations also may have a pay verbalization similarly as financial backer's worth clarification
for review. Review all declarations and looked for any tremendous changes, improvements or
peculiarities.
Accounting Report and Income Statements
As the name surmises, the bookkeeping report shows the congruity between the association's
benefits, liabilities and financial backer worth. When making a budgetary examination, give
unequivocal thought to any important moves in a basic position. The compensation announcement
is generally the association's advantage and setback enunciation. An association whose display is
well and is financially strong ought to show an anticipated vertical example on the compensation
decree.
Preparation of Financial Analysis
The Analysis will depend upon the states of your business and where it is position in the business
life cycle. Month to month or Weekly examination may be fundamental when the business is just
start or then again if the business is experiencing difficulties or quick turn of events. Ad-hoc
examination empowers you to eagerly screen your figures and make strategies to change any issues
before they become an important issue. Moving month to month or quarterly figure may be
logically reasonable for a consistent, foster business.

19
3.2 Comparative Financial Analysis:
The Comparative spending outline exhibits the budgetary situation of different time period. The
substance of cash related position is showed up in a comparable construction to give considered
financial situation no less than 2 periods.
Two spending reports (bookkeeping report and pay enunciation) are set up in an overall design for
cash related assessment purposes or for connection. These declarations license an all-around
examination of cash related position working results. The relative assertion can show:
1. Complete figures (rupee totals).
2. Changes in complete figures i.e., increment or decrease in all out figures.
3. Absolute data as rates.
4. Rise or decay with respect to rates.
Likewise, close to figures will exhibit the example and heading of cash related position and
working result.

Comparative Income Statements:

Comparative Income Statement assessment offers information to overview the technique for
change in the business. Spending synopsis are shown date for a particular date for a particular time
span. The spending synopsis Balance Sheet decides the money related situation as close to the
completion of an accounting period and the monetary rundown.
Pay Statement shows the working and non – working outcomes for a period. However, cash related
bosses and top organization are moreover enthused about knowing whether the business is moving
in an incredible situation or a negative heading. In taking apart thusly close to spending report are
arranged.
Comparative Income Statement Analysis is additionally perceived as Horizontal assessment. The
Comparative Income Statement gives information around basically multi year's figures similarly
as any rising or rot from the prior year's figure and its degree of addition or decreasing. This kind
of assessment helps in knowing the genuine quality and inadequacies.
The compensation announcement tells net advantage or complete deficiency by goodness of
exercises. A general compensation clarification will show the preeminent figures for somewhere
around two periods. The preeminent change beginning with one period then onto the following
and at whatever point needed. The change with respect to rates. Since, the figures for two extra
periods are showed up; the per user can quickly decide if bargains have risen or decreased, whether
or not cost of offers has extended or lessened, etc.

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Comparative Balance Sheets:
Comparative Balance Sheet as no less than two exceptional dates can be used for connection of
benefits and liabilities and finding any development or diminishing in those things. As such while
in a single money related record complement is on current position. It is on change or change in
the close to money related record. Such financial record is particularly important in inspecting the
examples and improvement in an undertaking.
There are two standard sorts of benefits: current assets and non-current assets are to be gone
through or changed over into cash inside one business cycle – typically treated as a year. Three
gigantic current assets things found on the financial record are theorists ordinarily are pulled in to
associations with large chunk of change on their bookkeeping reports. In light of everything, cash
offers protection against intense events, and it furthermore gives associations more decision for
future improvement.
Making cash holds routinely banner strong association execution. Unquestionably, it exhibits that
cash is hoarding quickly to the point that organization doesn't have adequate energy to sort out
how to make use of it. A declining cash store could be a sign of bother. In light of everything, if
heaps of cash are more usage of the association's financial record.
Monetary experts need to ask concerning why the money isn't being put to use. Cash could be
there considering the way that organization has missed the mark on theory hazards or is
exorbitantly short – situated to perceive how to deal with the cash. Responsibilities the firm should
pay inside a year, for instance, portion inferable from sellers. Non-current liabilities, then, at that
point, explained what the affiliation owes in a year or extra time. Right when commitment levels
are decreasing, that is a nice sign.

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3.3 Comparative Financial Analysis - Manufacturing:

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3.4 Comparative Financial Analysis - Services:

23
3.5 Common Size Financial Analysis:

24
3.6 Cash Flow Analysis - Manufacturing:

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The Cash Flow Statement Analysis for Mahamaya Steel Industries Limited is shown below:
2020 2019 2018
Major Sources of Inventories Other Current Assets Trade Payables
Financing (2047.69), (1129.93), PBT (2042.16), Proceeds
Investment in Fixed (721.20), Trade from / (Repayment
Deposit Receipts Receivables (641.41) of) Short Term Loans
(185.93), Other (844.27), Movement
Current Assets in Long Term Loans
(254.80) and Advances
(327.19)
Major Applications Proceeds from / Inventories Inventories
of Cash (Repayment of) Short (2274.15), (2064.31), Other
Term Loans Depreciation Current Liabilities
(1691.87), Interest (632.81), Movement (1262.92), Interest
Paid (906.63), in Long Term Loans Paid (1157.81)
Depreciation (609.96) and Advances
(395.78)
CFO ∞ NI NI (123.44) < CFO NI (721.20) < CFO NI (438.41) > CFO
(3458.35) (1782.69) (286.83)
Reasons Decrease in Working Decrease in Working Decrease in Working
Capital is significant Capital is significant Capital is significant
reason reason reason
CFO > CAPEX CFO (3458.35) > CFO (1782.69) > CFO (286.83) >
CAPEX (377.44) CAPEX (314.36) CAPEX (179.03)
CFP > CAPEX + No Dividends Paid No Dividends Paid No Dividends Paid
DIV
Does the Company Free Cash Flow = Free Cash Flow = Free Cash Flows =
have Free Cash 3080.91 1468.33 107.8
Flows
Sources of Dividends No Dividends Paid No Dividends Paid No Dividends Paid
Depreciation ∞ Depreciation (609.96) Depreciation (632.81) Depreciation (664.45)
CAPEX > CAPEX (377.44) > CAPEX (314.36) > CAPEX (179.03)
TRENDS
NI 123.44 is decreased 721.20 is increased 438.41
CFO 3458.35 (Still 1782.69 is increased 286.83
Increasing)
CAPEX 377.44 is slightly 314.36 is increased 179.03
increased
Dividends - - -
Working Capital Working Capital Working Capital Working Capital
Decreased Increased Decreased
Net Borrowings Repayment Increased Repayment increased Repayment was done
Overall

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3.7 Cash Flow Analysis - Service:

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The Cash Flow Statement Analysis for Gagan Gases Limited is shown below:
2020 2019 2018
Major Sources of Net Inflow/(Outflow) Depreciation Net Inflow/(Outflow)
Financing from Long Term (491401), Tax paid from Long Term
Borrowings during the year Borrowings
(3023742), (336000), (795000),
Inflow/(Outflow) Increase/(Decrease) Depreciation
from Other long-term in current tax (589556),
Assets (1376270), liabilities (193373) Decrease/(Increase)
Depreciation in Other current
(602,931) assets
(65344)

Major Applications
of Cash
CFO ∞ NI NI (510,841) < CFO NI (1,405,986) < NI (39,857) < CFO
(2,795,835) CFO (1,564,167) (345,170)
Reasons
CFO > CAPEX CFO (2,795,835) > CFO (1,564,167) > CFO (345,170) >
CAPEX (173,337) CAPEX (109,366) CAPEX (30,954)
CFP > CAPEX + No Dividends Paid No Dividends Paid No Dividends Paid
DIV
Does the Company Free Cash Flow = Free Cash Flow = Free Cash Flow =
have Free Cash 2,622,498 1,454,801 314,216
Flows
Sources of Dividends No Dividends Paid No Dividends Paid No Dividends Paid
Depreciation ∞ Depreciation Depreciation Depreciation
CAPEX (602,931) > CAPEX (491,401) > CAPEX (589,556) > CAPEX
(173,337) (109,366) (30,954)
TRENDS
NI 510,841 (decreased) 1,405,986 (increased) 39,857
CFO 2,795,835 (Still 1,564,167 (increased) 345,170
Increasing)
CAPEX 173,337 (increased) 109,366 (increased) 30,954
Dividends - - -
Working Capital Working Capital Working Capital Working Capital
Decreased Increased Decreased
Net Borrowings
Overall

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 Chapter – V
Summary of Findings,
Conclusion and Suggestions
5.1 Findings:
The

5.2 Conclusions:
The

5.3 Suggestions:
The

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