SUMMER TRAINING REPORT

On
ANALYSIS OF FINANCIAL
STATEMENTS IN

Submitted for partial fulfillment of degree in the requirement of

Bachelor of Business Administration
Of

MAHARSHI DAYANAND UNIVERSITY,

ROHTAK
Session 2021-22

SUBMITTED TO : - SUBMITTED BY :-
CONTROLLER OF EXAMINATION SONU
MDU, ROHTAK BBA 5TH SEM.
ROLL.NO.120019010069
Mrs. PAYAL SHARMA UNIV.ROLL.NO.
LECTURER BBA DEPT REGN.NO.2011391666

PT.J.L.N GOVT.COLLEGE
FARIDABAD
 30th SEP 2021

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr. SONU of PT. J.L.N. GOVERNMENT COLLEGE, SECTOR-16A FARIDABAD has
undergone his internship from 1st SEP’ 2021 to 30th SEP’ 2021 at Escorts Limited, Agri Machinery Group.

During his training with us he showed keen interest in his training and completed his internship under the
guidance of Mr. Sunil Bhatt.

Efforts put by the student were remarkable. He was able to learn quickly, thoroughly, can quickly recognize and
adjust to change. His performance during the said training was excellent and he has been sincere, methodical and
proactive in execution of said project. He has completed a part of his training project during work from home
(lockdown due to Covid19).

We wish him all success in his future endeavors.

For Escorts Ltd.

Monika Garg
HR Business Partner

ESCORTS LIMITED
15/5, Mathura Road, Faridabad – 121003, India Tel.:
+91 – 129 – 2250222 Fax: +91 – 129 – 2250023
Email: escortsgroup@escorts.co.in Website: www.escortsgroup.com

Corporate Identification Number L74899HR1944PLC039088 Registered

Office: 15/5, Mathura Road, Faridabad – 121 003, (Haryana), India
 ACKNOWLEGEMENT

This work is a culmination of sincere efforts put in during the making of this project. This
task could not have been accomplished without the support and help of lots of people. It
is with great pleasure and privilege that I wish to thanks all of them who actively
supported me in this project.
Doing a project for ESCORTS LTD. has been an extremely experienced work for me.

I express my humble gratitude and sincere regards to the FINANCE MANAGER of the
company who has given me an opportunity to do my SUMMER TRAINING in this
organization.

I am very grateful to the FINANCE CONTROLLER of the company who provided me

valuable inputs and helped me in choosing my project report.

I am very grateful to the faculty member of PT. J.L.N. GOVERNMENT COLLEGE,

SECTOR-16A FARIDABAD for there valuable support and guidance in caring out this
project.

(SAGAR RAWAT)
 PREFACE
Practical knowledge is an important suffix to theoretical knowledge. One cannot merely
upon the theoretical knowledge. The practical training in the company has a significant
role to play in the subject of business management. This report, to study the ANALYSIS
OF FINANCIAL STATEMENTS OF ESCORTS LTD.
A well-planned, properly executed and evaluated industrial training helps a lot in
inculcating good work culture. It provides linkage between the student and industry in
order to develop the awareness of industrial approach to problem-solving based on broad
understanding of the plant, machinery process and mode of operation of industrial
organization.

My project titled ANALYSIS OF FINANCIAL STATEMENTS has enabled me to

have a broader knowledge about the system and what are the sources of Funds Flow
Statement what are its uses, why it is useful for the company and other concerned parties.

This training also provided an opportunity to gain practical knowledge.

Through this report, I have tried to summarize all my observation experience and
knowledge acquired in this project.

(SAGAR RAWAT)
 INDEX

CHAPTER CHAPTER PAGE

NO. NO.

1. INDUSTRY & COMPANY PROFILE 06-24

2. REVIEW OF LITERATURE 24-35

3. RESEARCH METHODOLOGY 36-44

A. OBJECTIVES OF THE STUDY
B. SCOPE OF THE STUDY
C. RESEARCH DESIGN
i) DATA COLLECTION
D. LIMITATIONS OF THE STUDY
4. DATA ANALYSIS AND INTERPRETATION 45-63

5. CONCLUSIONS 64-65

6. SUGGESTIONS 66-67

7. ANNEXURE 68-69
A. QUESTIONS
B. BIBLIOGRAPHY
 CHAPTER-1
INDUSTRY & COMPANY
PROFILE
INTRODUCTION

MEANING OF FINANCIAL STATEMENTS

The financial statements are nothing but the financial information presented in concise
and capsule form, and are the financial information is the information relating to the
financial position of any firm. The firm prepares the financial statements

 To communicate with different parties about the financial position of the firm.
(Shareholders, creditors, banks, financial institution, financial analysts, investors
etc., and
 To analyze the operations and performance of the firm for the further planning.

The basic source, which provides the financial information, is the Annual report of the
company, which is presented by the company to its shareholders at the Annual General
Meeting.
Though the presentation of annual report is a statutory requirement under the
Companies Act 1956, however it is also a medium of communication with the present as
well as prospective investors and creditors of the company.
Clause 43A of the Listing Agreement (with the stock exchange) requires every
listed company to publish unaudited quarterly results. But it does not mean the non-
corporate firms do not prepare the financial statements.
Every firm big or small, prepare the following financial statements:

1. The Balance Sheet (BS).

2. The Income Statement (IS).

Two other key financial statements, which are usually prepared by corporate firms, are:

1. Statement of Appropriation of Profit, and

2. Statement of Change in Financial Position.

ANALYSIS OF FINANCIAL STATEMENTS(AFS)

Analysis of financial statements refers to the process of the critical examination of the
financial information contained in the financial statements in order to understand and
make decisions regarding the operations of the firm. The AFS is basically a study of the
relationship among various financial facts and figures as given in a set of financial
statements.
AFS is the process of establishment and identifying the financial weakness and strength
of the firm. it is indicative of two aspects of a firm i.e. the profitability and the
financial position.

USERS OF FINANCIAL SATEMENTS:-

MANAGEMENT:-
The financial statement helps the management in assessing the profitability of various
activities and department.
EMPLOYEES:-
On the basis of financial accounting statement they can judge as to how much bonus and
increase in their wages is possible from the profit of the enterprise.
GOVERNMENT:-
Government uses the financial statements to study the profit of various industries to
announce or withdraw various concessions and to increase or decrease the excise duty.
OTHER USERS:-
Such as trade association, consumer organization, researcher etc.
INDUSTRY & COMPANY PROFILE:
INDUSTRY:
There are many company which are related to their industry which manufacture tractor.

 ESCORT

 SONALIKA

 SWARAJ MAZADA

 MAHINDRA

 EICHER

COMPANY PROFILE:

At Escorts Construction Equipment Limited, we have defined the evolution of India's

Construction Equipment Industry over the past 36 years. When Necessary, even entered
into partnerships with global technology leaders.

In 1971, we introduced Pick n Carry Hydraulic Cranes Mobile Cranes. We Continue to

be the World's No.1 manufacturer of this Product.

Picture of the new Premises of ECEL

Throughout the evolution of Escorts, technology has always been its greatest ally for
growth. In the over six decades of our inception, Escorts has been much more than just
being one of India's largest engineering companies. It has been a harbinger of new
technology, a prime mover on the industrial front, at every stage introducing products and
technologies that helped take the country forward in key growth areas. Over a
million tractors and over 16,000 construction and material handling equipment that have
rolled out from the facilities of Escorts, complemented by a highly satisfied customer
base, are testimony to the manufacturing excellence of Escorts. Following the globally
accepted best manufacturing practices with relentless focus on research and development,
Escorts is today in the league of premier corporate entities in India.

Technological and business collaboration with world leaders over the years, Globally
competitive indigenous engineering capabilities, over 1600 sales and service outlets and
footprints in over 40 countries have been instrumental in making Escorts the Indian
multinational. At a time when the world is looking at India as an outsourcing destination,
Escorts is rightly placed to be the dependable outsourcing partner of world's leading
engineering corporations looking at outsourcing manufacture of engines, transmissions,
gears, hydraulics, implements and attachments to tractors, and shock absorbers for heavy
trailers.

In today's Global Market Place, Escorts is fast on the path of an internal transformation,
which will help it to be a key driver of manufacturing excellence in the global arena. For
this we are going beyond just adhering to prevailing norms, we are setting our own
standards and relentlessly pursuing them to achieve our desired benchmarks of excellence

Background

In 1960, Escorts set up the strategic Agri Machinery Group (AMG) to venture into
tractors.

In 1965, we rolled out our first batch of tractors under the brand name of Escort.

In 1969 a separate company, Escorts Tractors Ltd., was established with equity
participation of Ford Motor Co., Basildon, UK for the manufacture of Ford agricultural
tractors in India.
 In the year 1996 Escorts Tractors Ltd. formally merged with the parent company,
Escorts Ltd.

Since inception, we have manufactured over 1 million tractors.

Technologies

Escorts AMG has three recognized and well-accepted tractor brands, which are on
distinct and separate technology platforms.

Farmtrac: World Class Premium tractors, with single reduction and epicyclic reduction
transmissions from 34 to 75 HP.

Powertrac: Utility and Value-for-money tractors, offering straight-axle and hub-

reduction tractors from 34 to 55 HP. India’s No.1 economy range – engineered to give
spectacular diesel economy.

Escort: Economy tractors having hub-reduction transmission and twin-cylinder engines

from 27 to 35 HP. Pioneering brand of tractors introduced by Escorts with unbeatable
advantages.

International Subsidiaries

Escorts AMG have one international

subsidiary. Farmtrac Tractors Europe Sp.z

o.o.in Poland.

We now cater to 41 countries.

Functional Excellence

Manufacturing

Quality Assurance

Materials Management

Sales & Marketing

Knowledge Management

Finance
 Human Resources

Information Technology

Beyond manufacture, Escorts has made substantial investments towards the

modernisation of farm technology. The Escorts Institute of Farm Mechanization (EIFM)
at Bangalore is a unique center where training is imparted in operation, maintenance and
repair of farm machinery. It is among the few institutions of its kind in the world. Its
programs are aimed at encouraging customers, dealers, engineers, mechanics as well as
the field staff of Escorts, towards meeting its objective of enhancing agricultural
productivity and improving quality of life in rural India.

Rohtash Mal - ED & CEOAgri Machinery Group of Escorts

Ltd., has been elected as the President of Tractor Manufacturers
Association (TMA) for the year 2010-2011.

Escorts launches high range Gensets

Escorts recently launched a high range genset - G40 engine. This engine is
approved for 35 KVA, 40 KVA and 45 KVA DG set applications by ARAI and
compliant to CPCB pollution norms. In addition to best in class performance ADI
technology, G40 is equipped with turbo charger for achieving higher efficiencies
and lower emissions.

Escorts launched FT-60xtra Torque tractors

Escorts Ltd launched FT-60 X-TRA Torque tractor in Punjab and Haryana earlier
this year. It is an upgraded version of its FT-60 offering, a more improved model
with higher torque making it a powerful version with enhanced features. The new
 upgraded version of the FT60 has been specially designed with features such as
Higher Torque, Oil Immersed Brakes, Power Steering, Multi-Speed PTO & higher
hydraulic lift capacity.

FT690DTwinsGold Medal for Best Product

Escorts Farmtrac Europe model FT 690 DT (88 hp) was awarded the gold medal as
best product in its category during the International Agricultural Fair AGROTECH
in Poland. Mr. Artur Lawniczak, Secretary, Ministry of Agriculture & Rural
Development, President- Kielce Trade Fair Organizing Committee and Provincial
Governor of Swietokrzyskie Province gave the award to the FTES team.

PT-439tractor launched in Sri lanka

To boost its presence and gain a higher market share in the South Asian tractor
market, Escorts Agri Machinery Group launched the tractor model PowerTrac - 439
- Deluxe in Sri lanka earlier this year. Escorts has also signed an MOU with Unimo
Enterprises (distributor of Escorts tractors) and H&B Leasing to provide Srilankan
farmers easy access to finance

EscortsQ3net profit up106%toRs45.84crore

New Delhi, July 19, 2012

Nine month PAT at Rs 110.7 crore, up from Rs 29.7 crore

Nine Month sales up 33 per cent at Rs 2078 crore
Quarter Sales grows by 38.5 per cent to Rs. 806 crore
Q3 Profit Before Tax at Rs.68.4 crore

Escorts Limited today reported a profit of Rs. 45.84 crore for the quarter ended June 30,
2010, a 106 per cent increase over Rs 22.2 crore registered for the corresponding period
of last fiscal. The Profit Before Tax (PBT) stands at Rs.68.4 crore for the quarter, as
against a profit of Rs.41.4 crore in the corresponding period. Net sales rose to Rs 806
crore, a 38.5 per cent increase from Rs.582 crore in the previous year. EBITDA before
exceptional items went up by 24 per cent from Rs 63.1 crore to Rs.78.3. Escorts Limited
follows an October-September fiscal year.
During the quarter, Escorts Limited registered Tractor sales of 17,917 units, a 39 per cent
increase over 12,889 units. The sales performance is a result of aggressive marketing
backed by a streamlined sales & marketing team. The tractor industry grew by 34%
during the period October 09 to June 10. During the same period Escorts sales grew by
43%.

During the quarter, Escorts launched its new tractor variant Powertrac 429 (PT429), a 27
HP - 2 cylinder offering to bring the best solution to farmers to deliver maximum
productivity. Besides this, the Construction Equipment Business of the company recently
introduced its backhoe loader – DIGMAX, as part of its strategy to expand its product
portfolio to address larger share of the construction equipment market.

Speaking on the results, Chairman and Managing Director Mr Rajan Nanda said,
“Escorts is creating value in the market place, for the company and its shareholders. I am
very pleased that we have been able to justify the faith that our shareholders have reposed
in us and the track record of growth and profits on a sustained basis should serve to act as
assurance that the company is poised for great advancements. Our efforts at cost savings,
streamlining and cost management puts us in a situation where sales growth translates
into both equivalent revenue and profit growth. Our liquidity has improved, interest costs
have fallen substantially and debt:equity ratio is attractive. The company is consistently
enhancing shareholder value through growth initiatives, fiscal prudence and innovative
strategies. We are leveraging our ability to engineer technology to chart a growth path
that spans a wider canvas of economic activity across agriculture and infrastructure
sector. “

He further added, “We will be investing in Agri machinery business to expand capacity
and develop new technology. We plan to launch 6-7 new products which are best suited
for specialized application needs of the farmer. Keeping pace with the growing
expectations of the farming community, we are today transforming ourselves to be a
provider of mechanized farm solutions for the farmers. We have tied up with leading
implement and attachment manufacturers to provide farming solutions across various
stages of the cropping cycle as well as non–farm applications.”
According to Joint Managing Director Mr Nikhil Nanda, “Escorts financial
performance continues to gain momentum quarter after quarter which demonstrates a
growth momentum that is unflagging as well as an appetite for a higher share of the
market. In comparison to the previous quarter of the current fiscal, net profit is up from
Rs 41.47 crore to Rs 45.84 crore, operational profit is up by 28%, net sales is up by 20%
and tractor sales volumes are up by 22.5% . The focus on efficiencies has led our
EBITDA to grow by 18.5 per cent. Going forward, we will continue to focus on creating
a top-quality efficient business that delivers higher value to our stakeholders.”

Escorts wins Indian tractor industry’s largest ever order, awarded US$40 million
order by Tanzania

To open two offices and set up service support in African market

NewDelhi,July05,2010

Escorts Limited, India’s leading tractor manufacturer, today set a new benchmark by
winning Indian tractor industry’s largest ever order for tractors. Valued at US $ 40
million (about Rs. 185 Cr) the prestigious order has been awarded to Escorts by the
Government of the United Republic of Tanzania.

Escorts has been chosen to supply 1430 units of its premium range of powerful Farmtrac
tractors to Tanzania which is implementing a national “Food Sufficiency Programs”
aimed at making it a Food surplus country. Against global average of 19.7 tractors per
1000 hectare of land, Tanzania is estimated to have about 2 tractors per 1000 hectare of
land. The tractors are being procured by Tanzania to impart a major thrust to farm
mechanizationandenhanceagriculturalproductivity.

Mr. Rajan Nanda, Chairman, Escorts Limited said, “We strongly believe that farm
mechanization holds the key to greater food security. Escorts powered the green
revolution in India and we are privileged to support the national efforts to usher in the
green revolution in Tanzania. With world class market mapped tractors and strong
engineering capabilities, Escorts is well positioned to catalyse farm productivity in the
Africa. Escorts has an ambitious immediate plan to open two offices in the African
continent and set up a service and upkeep infrastructure in Africa.”
“It is also a matter of great pride for Escorts to win the largest ever order for tractors in
Indian industry. We already have over 1000 tractors in African markets. Our satisfied
customers in Tanzania and the global quality of Framtrac tractors have helped Escorts
win this very prestigious order,” Mr. Nanda further said.
Escorts will commence the supply of tractors in July. Escorts will supply the tractors in
SKD (semi knocked down) form and assist the Government organizations in Tanzania to
assemble these tractors into CBU (completely built-up units). Escorts’ Farmtrac range
comprises from 34HP to 75 HP and has powerful features that provide maximum
productivity and efficiency to the farmers.

Global tractor major eyes Morocco for its high-end premium tractor range Escorts
Limited, a $600mn enterprise, launches FARMTRAC

Morocco,April,2010
Escorts Limited, India’s leading tractor manufacturer, today announced its foray into
Morocco by launching its high-end premium tractor range - FARMTRAC. The company
unveiled its four-cylinder offerings FARMTRAC 80 and FARMTRAC 80DT, at SIAM
(the 5th International Agricultural Fair) being held in Meknes, Morocco. The company
has taken on board FIRST MATERIEL as its authorized distributor in Morocco, who will
be responsible for assembling the tractors, which will be imported from India in a semi
knocked-down state. FIRST MATERIEL will also be marketing and promoting the
FARMTRAC brand locally and will also ensure after-sales service support.

Synonymous with reliability, the Farmtrac 80 and Farmtrac 80 DT, fitted with 75HP
Perkins engines and Carraro transmission, are fuel efficient, have long serviceability and
low maintenance cost. Keeping in tune with modern day requirements, the tractors have
been designed for both agricultural and commercial applications and are compatible with
a number of implements such as rotavator, cultivator, thrasher, reaper, baler and seed
drills. The tractors meet the emission norms of the US and European markets.

Speaking on the occasion, Mr. Nikhil Nanda, Joint Managing Director, Escorts
Limited said, “Over the past six decades, Escorts in its own way, has been a part of the
dynamic process which ushered in farm mechanization and brought prosperity to Indian
farmers. Our products are durable, sturdy, cost effective solutions which have stood the
test of time. From the basic tractor model many years ago, we have today a full range of
quality products which are technologically more advanced and far more economical to
cater to varied needs of the market.”
“Today, the Escorts brand is present in over 32 countries including 22 African countries.
Our dominance in the African continent continues by the high volume of orders that we
receive from the regions of Senegal, Sudan, Burkina Faso, South Africa, Madagascar and
Tanzania. Our FARMTRAC range of offerings is a step towards improving agricultural
practices thereby paving the way for prosperous yields.”

Mr. Rohtash Mal, Chief Executive Officer and executive Director – Escorts Agri
Machinery Group said, “Morocco is a very strategic market for us, being among one of
the largest markets in Africa. Poor tractor penetration and accelerated growth of agri
sector, provides huge potential for growth in Morocco. We feel that our aesthetically
designed tractor range will help serve the needs of the customers by harnessing the best
of modern technology.”

“Export markets of Africa continue to be the focus for Indian manufacturers and Escorts
looks to build on the leverage that it already enjoys in surrounding countries of Morocco.
Following our success in Ghana and Nigeria, we strongly believe that the farm-
mechanization market in Africa will continue to grow strongly. We have aggressive plans
for increasing our market share here.”

First Materiel, which has its own branches in important commercial points of
Casablanca, Marrakesh, Tangier and Agadir, will extend its distribution network to 10
new points in the first year of operations. Over the years, the distribution channel will be
extended to include about ten cities and towns.

Escorts half year netprofitup767%toRs64.87Crore

New Delhi, April 22, 2010

Half year Sales up by 30.2% at Rs. 1272 crore

Quarter Net Profit grows 430% to Rs. 41.47 crore
 Quarter Sales rise by 39.5% to Rs. 672 crore
Quarter EBITDA shoots 84.2% to Rs. 66.09 crore
ICRA has recently upgraded Escorts rating

Escorts Limited today reported a higher profit of Rs. 64.87 crore for the half year ended
March 31, 2010, a 767% increase over Rs 7.48 crore registered for the corresponding
period of last fiscal. The Profit Before Tax (PBT) stood at Rs. 87.14 crore for the half
year, as against a profit of Rs.16.46 crore in the corresponding period. Total half yearly
sales and income from operations rose to Rs. 1272 crore from Rs. 977 crore in the
previous year. The company reported a cash profit of Rs.114.34 crore as against Rs.
36.85 crore in the corresponding period. Escorts Limited follows an October-September
fiscalyear.

For the quarter ending March 31, 2010, Escorts Limited registered a higher profit of Rs.
41.47 crore, an increase of 430% against Rs. 7.82 crore in the previous year. Total sales
and income from operations for the quarter rose 39.5% to Rs. 672 crore against 482 crore
in the previous year. The company closed the quarter with Profit Before Tax (PBT)
standing at Rs.51.69 crore against Rs. 15.76 crore recorded in the corresponding period
of last fiscal. EBITDA increased by 84.2% to Rs. 66.09 crore against Rs. 35.89 crore in
previous fiscal.

During the quarter, Escorts Limited registered Tractor sales of 14, 623 units, a 51.2%
increase over 9,672 units sold in corresponding quarter last fiscal enabled through
streamlining of sales & marketing on the ground. During the quarter, Escorts launched
FT-60 X-TRA TORQUE, a new powerful model with higher torque in Punjab and
Haryana. The FT-60 X-TRA TORQUE is designed keeping in mind the increasing use of
tractors for specialized application and heavy-duty implements & attachments.
Speaking on the results, Chairman and Managing Director Mr Rajan Nanda
said, "Escorts has recorded strong performance across all parameters this quarter. The
company is consistently enhancing shareholder value through growth initiatives, fiscal
prudence and innovative strategies. We are leveraging our ability to engineer technology
to chart a growth path that spans a wider canvas of economic activity across agriculture
and infrastructure sector. Escorts today has created a strong platform for growth and
enhancing shareholder value."
According to Joint Managing Director Mr Nikhil Nanda, "Escorts' journey of
sustained and profitable growth accelerated this quarter. Driven by the twin focus of
winning in the market and efficiency, Escorts financial performance continues to gain
momentum quarter after quarter. In comparison to the previous quarter of this current
fiscal, profit is up by 77.2%, net sales is up by 11.9% and tractor sales volumes are up by
7.8%forthequarterendingMarch31."

"On a year to year basis, for the quarter ending March 31, 2010, cash Profits have grown
over 3 times during the quarter and EBITDA is up 84.2% to Rs 66.09 crore. Combining a
lean and learning culture with strong engineering capabilities, Escorts is geared to
capitalize on the emerging opportunities in agriculture and infrastructure sector", Mr
Nikhil Nanda added.

Escorts Limited launches FT-60 X-TRA Torque in Punjab and Haryana

Punjab,March11,2010

An upgraded version of the Escorts FT-60 variant, the new model best suited for
specialized applications offers higher power, improved breaking system and power
steering
Escorts Limited, India’s leading tractor manufacturer, today announced the launch FT-60
X-TRA TORQUE, an upgraded version of its FT-60 offering. The new and improved
model, with higher torque is a far more powerful version with improved features for
farmers in Punjab and Haryana. The tractor which has currently been launched in the
states of Punjab and Haryana, will subsequently be launched in Rajasthan, Western Uttar
Pradesh and Madhya Pradesh.

Given the high usage of tractors, especially in North Indian states, the new upgraded
version of the FT60 has been specially designed with features such as Higher Torque, Oil
Immersed Brakes, Power Steering, Multi-Speed PTO & higher hydraulic lift capacity.
Aimed at providing comfort and increased performance, farmers will now be able to use
FT-60 X-TRA TORQUE for all kinds of specialized applications such as laser levellers,
rotavators, planters and heavy haulage applications. Farmers who currently own Escorts
FT-60 variant can go for the upgraded version by contacting Escorts dealers at respective
locations.
Speaking at the launch, Mr. Rohtash Mal, Executive Director and CEO, Escorts Agri
Machinery Group said, “The launch of an upgraded version of the FT60 has been long
due. FT-60 X-TRA TORQUE has been specially designed keeping in mind the increased
proliferation of tractor usage for specialized applications and heavy-duty implements &
attachments. The new variant of the FT60 is our endeavor at providing the farmer with a
wide and intelligent choice of products which addresses their requirements for increasing
agricultural productivity.”

“This is only a part of the slew of products that we plan to offer to farmers, which are not
only price competitive but also follow global quality norms in terms of technology,
performance and durability. Backed by our strong after sales service support deliveries,
we hope to deliver to our customers overall satisfaction for a long term relationship,” he
further added.

Escorts Sets New Milestone, Crosses 11 Lakh Unit Mark

Celebrates ‘bond’ with 11 lakh consumers, launches series of initiatives
New Delhi, January 22, 2010

Launches ‘SEVA CHAKRA’ – enhanced and timely service at farmers’ doorstep

Reinforces ‘Care & Concern’ for the farmers through HUMRAKSHAK, a unique
Kisan insurance
Introduces SPECIAL 3-YEAR quality assurance warranty
Launches all-India TOLL-FREE CUSTOMER-CARE HELPLINE

Escorts Limited, India’s leading tractor manufacturer, which is celebrating its 65 glorious
years of existence, is on a roll. The company recently crossed the 11 lakh unit mark in
tractor sales. This significant milestone is a reflection of Escorts commitment to provide
customer-focused solutions, sound engineering and technological excellence.

The company has also seen a 33.8% growth in sales in quarter-ended December as
compared to the corresponding quarter last year. This has been aided by the strengthening
of the company’s sales & marketing network and by providing farmers a wide range of
innovative and value-engineered solutions to meet the agri-requirements. Speaking on the
occasion, Mr. Rajan Nanda, Chairman, Escorts Limited said, “Over the past 6 decades,
Escorts in its own way, has been a part of the dynamic process which ushered in farm
mechanization and brought prosperity to Indian farmers. The 11 lakh unit tractor mark is
are Flection of that trust and confidence.”

To mark the occasion and take forward the brand that has been built on the trust of 11
lakh customers, the company has introduced a series of initiatives for the betterment of
the country’s agrarian population. Aimed towards serving the farmer better, the company
has introduced its ‘Seva Chakra’ initiative which will offer mobile service vans and
service bike facility at the farmers’ doorstep. While the fully-equipped mobile service
vans with spares, mechanic and a helper on board, will act as workshop-on-wheels
catering to individual needs of the farmer, the service bike facility would be used to
resolve minor complaints of the farmers. Furthermore, customers can register their
complaints at respective dealerships or call on the all India toll-free customer-care
helpline number. The all-India helpline facility, mobile service vans and service bike
facilities will be initially introduced in Rajasthan and Haryana and will soon be extended
to the restates across the country.

Further, Escorts will continue to offer comprehensive shelter to farmers represented in

the form of ‘Humrakshak’ – a unique Kisan insurance. Humrakshak addresses one of the
most important challenges that farmers and their families face in case of an unfortunate
accident. Under this initiative, in the event of a farmer’s death or permanent disability,
the farmer or the dependent is entitled to a cover amount linked to the tractor model
purchased by them. Escorts tractors ranging from 40-60 HP, 35-39HP and 27-34HP carry
a cover of Rs 7lac, Rs 5lac and Rs3 lac respectively, for one year from the date of
delivery. The company is also offering a special 3-year warranty on new tractor models
including FT 65EPI, FT 60 DRPTO, PT 439DX, PT4455.
“Escorts tractors are symbolic of reliability and trust and enjoy the support and
confidence of the farming community. Besides manufacturing superior quality products
that are sturdy, cost effective, and highly durable, we would like to take a step forward to
provide enhanced and timely service to our valued customers at their doorstep,” Mr.
Rohtash Mal, Executive Director & CEO, Escorts Agri Machinery Group said.
ESCORTS launches Backhoe Loaders NewDelhi,January22,2010

Escorts Construction Equipment Limited (ECEL), the Construction Equipment and

Material Handling Equipment manufacturing arm of Escorts Limited, today announced
the launch of its backhoe loader - DIG MAX, a best-in-class 76HP, 8 tonne operating
weight backhoe loader with an array of superior features especially designed for Indian
conditions.

The Company also recently introduced to the Indian market Telescopic Handlers, Access
Platforms, Wheel Loaders and Motor Graders by tying up with leading manufacturers
including M/S Manitou BF, SA Corporation of France and Xiamen Machinery Company
Limited (XGMA) of China. Truck Cranes and All-terrain Truck Cranes were other
products introduced in Indian recently by signing agreement with China’s Hunan
Zoomlion International Trade Co. Ltd. With its ever evolving product portfolio, ECEL
has the most diverse range of Construction Equipment and Material Handling equipment
in the country.

Speaking on the occasion, Mr. K.K. Vij, CEO & Executive Director, Escorts
Construction Equipment Limited said, “The launch of DIG MAX is part of our strategy
to expand our product portfolio to address larger share of the construction equipment
market by offering complete solution to road construction industry. ECEL pioneered the
Construction & Earth Moving Equipment industry in India and today, aims to be an end-
to-end solution provider for its customers.”

Mr. Rajesh Sharma, Vice-President, Marketing, Escorts Construction Equipment Limited

said, “With DIG MAX, the best has just got better! It offers the best in class backhoe
loader for end-users. With it’s never before features for backhoe loaders, DIG MAX
combines productivity, fuel efficiency and ease of operation. It has been designed to keep
the total cost of operation economical. This will increase our reach across the different
market segments and increase our customer base.”

Escorts quarter sales up 21.2% at 600.22 crore net profit at 23.40 crore New Delhi,
January 15, 2012

Profit Before Tax (PBT) surges over 50 fold at Rs 35.45 crore

EBIDTA up 82.4% at Rs. 54.15 crore
 Agri Machinery Division revenue up by 22.5%
Tractor volumes grow 33.8%

Escorts Limited has registered a 21.2% increase in sales in the first quarter of fiscal 2010-
11ending December 31, 2011. Net Sales for the quarter rose to Rs.600.22 crore as against
Rs. 495.26 crore in corresponding period. Escorts Limited turned in a net profit of Rs
23.40 crore for the quarter against a loss of Rs 0.34 crore in the corresponding period.
The company sold 13,561 tractors in the quarter as against 10,135 nos. in Q1 last year - a
growth of 33.8%. Escorts Limited follows an October-September fiscal year.

The Company registered over 50-fold increase in Profit before Tax (PBT) Year on Year
(YoY) at Rs 35.45 crore against Rs 0.70 crore of corresponding quarter. Escorts Limited
increased its EBITDA by 82.4% Year on Year (YoY) to Rs 54.15 crore from Rs 29.69
crore.
Speaking on the results, Chairman and Managing Director Mr Rajan Nanda said, "Escorts
has turned in a robust performance this quarter. Quarter sales have increased across the
businesses. The Agri Machinery division revenue grew by 22.5% riding on market share
gains by the new range of higher horse power tractors introduced last fiscal and a
concerted push in designated markets.The new tractors models address more segments
and agro-climatic zones and have been well received in the market. Escorts Railways
Division has got a good order book for the current fiscal and registered a revenue growth
of 17.6%. The railway business offers potential for growth and Escorts is according high
priority to its railway division. 4 new railway products for coaches and wagons built for
the Indian Railways are to be introduced by the division. The company will further
reinforce the focus on agriculture and infrastructure this fiscal."

Mr Nikhil Nanda, Joint Managing Director said, "The results reflect our consistent focus
to enhance profitability through a slew of measures. All key ratios have shown significant
improvement in comparison to the corresponding quarter. Material costs as a % to sales
have been brought down by 2.5% from 70.3% to 67.8% through a series of cost reduction
measures. Substantial term debts have been reduced leading to interest charges dropping
by 58.7% to Rs 6.78 crore from Rs 16.40 crore. As we move ahead, cost rationalization
and resource optimization initiatives will be further strengthened."
WORLD OF ESCORTS
CHAPTER-2
REVIEW OF
LITERATURE
REVIEW OF LITERATURE

The financial statements are nothing but the financial information presented in concise
and capsule form, and are the financial information is the information relating to the
financial position of any firm. The firm prepares the financial statements

 To communicate with different parties about the financial position of the firm.
(Shareholders, creditors, banks, financial institution, financial analysts, investors
etc., and
 To analyze the operations and performance of the firm for the further planning.

The basic source, which provides the financial information, is the Annual report of the
company, which is presented by the company to its shareholders at the Annual General
Meeting.
Though the presentation of annual report is a statutory requirement under the
Companies Act 1956, however it is also a medium of communication with the present as
well as prospective investors and creditors of the company.
Clause 43A of the Listing Agreement (with the stock exchange) requires every
listed company to publish unaudited quarterly results. But it does not mean the non-
corporate firms do not prepare the financial statements. Every firm big or small, prepare
the following financial statements:

1. The Balance Sheet (BS).

2. The Income Statement (IS).

Two other key financial statements, which are usually prepared by corporate firms, are:

3. Statement of Appropriation of Profit, and

4. Statement of Change in Financial Position.

ANALYSIS OF FINANCIAL STEMENTS(AFS)

Analysis of financial statements refers to the process of the critical examination of the
financial information contained in the financial statements in order to understand and
make decisions regarding the operations of the firm. The AFS is basically a study of the
relationship among various financial facts and figures as given in a set of financial
statements.
AFS is the process of establishment and identifying the financial weakness and strength
of the firm. it is indicative of two aspects of a firm i.e. the profitability and the
financial position.

OBJECTIVES OF AFS

The objectives of the AFS is to understand the information contained in financial

statements with a view to know the weakness and strength of the firm and to make a
forecast about the future prospects of the firm and thereby enabling the financial analyst
to take different decisions regarding the operation of the firm. The objectives are as
follows:

 To assess the present profitability and operating efficiency of the firm as a hole as
well as for its different departments.
 To find out the relative importance of different components of the financial
position of the firm.
 To identify the reasons for change in the profitability / financial position of the
firm, and
 To assess the short term as well as the long term liquidity position of the firm.

TECHNIQUES / TOOLS OF THE AFS

AFS can be undertaken by different by different persons and for different purposes,
therefore the methodology adopted for the AFS may be carrying from one situation to
another. However, the following are some of the common techniques of the AFS:

 Comparative financial statements.

 Common-size financial statements.
 Trend percentages analysis, and
 Ratio Analysis.

COMPARATIVE FINANCIAL STATEMENTS

In CFS, two or more BS and/or the IS of a firm are presented simultaneously in columnar
form. The financial data for two or more tears are placed and presented in adjacent
columns and thereby the financial data is provided at times perspective in order to
facilitate periodic comparison. In CFS, the BS and the IS for number of years are
presented in condensed form for year to years comparison and to exhibit the magnitude
and direction of changes.
The CFS helps a financial analyst of the firm and in establishing operating and
positional trend of the firm. The CFS may be prepared to show

1. The absolute amount of different items in monetary terms,

2. The amount of periodic changes in monetary terms,

3. The percentages of periodic changes to reveal the proportionate

changes. The CFS can be prepared for both the BS and the IS.

COMMON-SIZE STATEMENTS (CSS)

The CSS represents the relationship of different items of a financial statement with some
Common items by expressing each item as a percentage of the common item. In
Common size Balance Sheet, each item of the balance sheet is stated as a percentage of
the total balance sheet. The percentages for different items are computed by dividing the
absolute amount of that item by the Common Base and then multiply by 100. The
percentage so calculated can be easily compared with the corresponding percentages in
some other period. Thus, the CSS is useful not only in intra-firm comparisons for the
same year or free several years.
 TREND PERCENTAGE ANALYSIS(TPA)
The TPA is a technique of studying several financial statements over a series of years. In
TPA, the trend percentages are calculated for each item by taking the figure of that item
for some base year as 100. So, the trend percentage is the percentage relationship, which
each item of different years bears to the same item in the base year. Any year may be
taken as the base year, but generally the starting / initial year is taken as the base year. So,
each item for base year is taken as 100 and then the same item for other years is
expressed as a percentage of the base year.

RATIO ANALYSIS (RA)

The RA has emerged as the principal technique of the AFS. A ratio is a relationship
expressed in mathematical terms between two individual or groups of figures connected
with other in some logical manner. The RA is based on the premise that a single
accounting figure by itself may not communicate any meaningful information but when
expressed as a relative to some other figure, it may definitely give some significant
information. The relationship between two or more accounting figures/groups is called a

Financial Ratio.

A financial ratio helps to summarize a large mass of financial data into a concise form
and to make meaningful interpretations and conclusions about the performance of a firm.
For example, a firm has Net Sales Rs.5, 00,000
Gross Profit Rs.1, 00,000
Ratio of Gross Profit to net sales is
20% i.e., (Rs.1, 00,000 / Rs.5, 00,000)

Forms of Ratios
Since a ratio is a mathematical relationship between two or more variables / accounting
figures, such relationship can be expressed in different ways as follows:
  As a Pure Ratio.
 As a Rate of Times.
 As a Percentage.

Ratio can be classified into:

 The Liquidity Ratio
 The Activity Ratio
 The Leverage Ratio
 The Profitability Ratio
 The Market Value Ratio

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS & IS of a firm are two basic depicting the financial position of a firm at the
end of the year. These two financial statements are called the traditional financial
statements. Both these statements fail to throw light on changes in assets, liabilities and
shareholders wealth during this year.

BS deals with the financial position gives only the static view of the year –end financial
position and fails to indicate the movement and causes in assets and liabilities during the
year. Similarly, IS show the profit or loss resulting out of the operations of the firm
during the year? This profit or loss in fact to ascertain the sufficiency of resources to
declare the dividend etc. thus, there is a need to prepare another statement (together with
the BS & IS) which may identify the changes in assets, liabilities and the shareholders
funds over a given period.
The SCFP is essentially an explanation of the changes in financial position of a
firm occasioned by the firm in between two successive BS`s. The SCFP draws basic
information from the BS and IS helps in understanding the change in assets, liabilities
and shareholders worth. The SCFP deals with the flow of funds during the year i.e. the
funds coming in and going out of the firm. it summarizes the sources from where the
funds might have been arranged/ procured by the firm and the uses for which the funs
might have been used by the firm during the year.
The SCFP can be prepared as follows:

 SCFP (Cash Basis) also known as a Cash Flow Statement.

 SCFP (Net Working Capital Basis) Fund Flow Statement.

SCFP (WORKING CAPITAL BASIS):

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year i.e., it shows the
sources and uses of working capital between two balance sheet dates. The FFS attempts
to explain the changes in financial position from one BS to the subsequent BS in terms of
the change in the funds or the working capital position of the firm.
The term Working Capital (WC) is generally defined as the excess of total current
assets over the total current liabilities. The Current Assets (CA) of a firm may include
cash in hand and at bank, stock, debtors, bills, advances etc. and the Current Liabilities
(CL) includes creditor, bills payable, outstanding expenses, provision for tax, short term
liabilities etc. the term WC is a single figure representing the net effect of all CA and CL.
A flow of WC occurs when a transactions affects the WC i.e., when the net effect of a
transaction is to increase or decrease the Working Capital by affecting any of the
elements of Current Assets or Current Liabilities. Therefore, the FFS in its standard form,
incorporates only those transactions, which affect the Working Capital i.e., those
transactions where in only one of the affected accounts is a current account.

Now a flow of working capital arises when one of the affected accounts is a current
account. From the point of view of current accounts, the effected on working capital can
examined in the light of the definitions of the term working capital i.e., the excess of
current assets over current liabilities i.e.,
WC=CA-CL
Impliedly change in any of the CA or CL will affect the WC. Simple observation
equation tells that:
 Increase in any of the CA or decrease in any of the CLs will result in increase in the
WC.
 Decrease in any of the CA or increase in any of the CLs will result in decrease in the
WC.
A firm undertakes numerous during a year and most of these transactions during a year
and most of these transactions may affect one or the other current account i.e. most of
these transactions may results in the flow of the WC. Neither it is necessary nor practical
to identify the effect of each and every transaction on the WC. These transactions,
instead, are considered and analyzed in a collective form and then their effect on the WC
is identified.

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash i>e., the
transactions generatating cash and using cash. The focus in the CFS is on cash rather than
on WC. The sources of cash may be the cash profits earned by the firm, issue of capital
for cash, issue of other securities for cash, borrowings, sale of assets, investments,
redemption of debenture or preference share, repayment of loan, payment of tax,
dividend distribution etc.
Thus, the CFS summarizes the cash inflows and outflows.
An analysis of cash flows is useful for short-run planning. A firm needs sufficient cash to
debts maturing in the near future, to pay interest and other expenses and to pay dividends
to shareholders. The firm can make projections of cash flows and outflows for the near
future to determine the availability of cash. This cash balance can be matched with the
firm’s need for cash during the period, and accordingly, arrangements can be made he
deficit or invest the surplus cash temporarily. A historical analysis of cash flows provides
insight to prepare reliable cash flow projections for the immediate future.
A statement of changes in financial position on cash basis, commonly known as cash
flow statement, summarizes the causes of changes in cash position between dates of two
balance sheets. It indicates the sources & uses of cash. The cash flow statement is similar
to the fund flow statement except that it focuses attentions on cash instead of working
capital (funds). Thus, this statement analyses change in non-current accounts as well as
current accounts (other than cash) to determine the flow of cash.

RATIO ANALYSIS
A relationship between various accounting figures, which are connected with each other,
expressed in mathematical terms, is called accounting ratios.
According to Kennedy and Macmillan, "The relationship of one item to another
expressed in simple mathematical form is known as ratio."
Robert Anthony defines a ratio as – "simply one number expressed in terms of another."
Accounting ratios are very useful as they briefly summarise the result of detailed and
complicated computations. Absolute figures are useful but they do not convey much
meaning. In terms of accounting ratios, comparison of these related figures makes them
meaningful. For example, profit shown by two-business concern is Rs. 50,000 and Rs.
1,00,000. It is difficult to say which business concern is more efficient unless figures of
capital investment or sales are also available.
Analysis and interpretation of various accounting ratio gives a better understanding of the
financial condition and performance of a business concern.
Ratio analysis is one of the techniques of financial analysis to evaluate the financial
condition and performance of a business concern. Simply, ratio means the comparison of
one figure to other relevant figure or figures.
According to Myers, " Ratio analysis of financial statements is a study of relationship
among various financial factors in a business as disclosed by a single set of statements
and a study of trend of these factors as shown in a series of statements."
Advantages and Uses of Ratio Analysis
There are various groups of people who are interested in analysis of financial position of
a company. They use the ratio analysis to workout a particular financial characteristic of
the company in which they are interested. Ratio analysis helps the various groups in the
following manner: -
1. To workout the profitability: Accounting ratio help to measure the profitability
of the business by calculating the various profitability ratios. It helps the
management to know about the earning capacity of the business concern. In this
way profitability ratios show the actual performance of the business.
2. To workout the solvency: With the help of solvency ratios, solvency of the
company can be measured. These ratios show the relationship between the
 liabilities and assets. In case external liabilities are more than that of the assets of
the company, it shows the unsound position of the business. In this case the
business has to make it possible to repay its loans.
3. Helpful in analysis of financial statement: Ratio analysis help the outsiders just
like creditors, shareholders, debenture-holders, bankers to know about the
profitability and ability of the company to pay them interest and dividend etc.
4. Helpful in comparative analysis of the performance: With the help of ratio
analysis a company may have comparative study of its performance to the
previous years. In this way company comes to know about its weak point and be
able to improve them.
5. To simplify the accounting information: Accounting ratios are very useful as
they briefly summarise the result of detailed and complicated computations.
6. To workout the operating efficiency: Ratio analysis helps to workout the
operating efficiency of the company with the help of various turnover ratios. All
turnover ratios are worked out to evaluate the performance of the business in
utilising the resources.
7. To workout short-term financial position: Ratio analysis helps to workout the
short-term financial position of the company with the help of liquidity ratios. In
case short-term financial position is not healthy efforts are made to improve it.
8. Helpful for forecasting purposes: Accounting ratios indicate the trend of the
business. The trend is useful for estimating future. With the help of previous
years’ ratios, estimates for future can be made. In this way these ratios provide the
basis for preparing budgets and also determine future line of action.

Limitations of Ratio Analysis

In spite of many advantages, there are certain limitations of the ratio analysis
techniques and they should be kept in mind while using them in interpreting
financial statements. The following are the main limitations of accounting ratios:
1. Limited Comparability: Different firms apply different accounting policies.
Therefore the ratio of one firm can not always be compared with the ratio of other
firm. Some firms may value the closing stock on LIFO basis while some other
firms may value on FIFO basis. Similarly there may be difference in providing
depreciation of fixed assets or certain of provision for doubtful debts etc.
2. False Results: Accounting ratios are based on data drawn from accounting
records. In case that data is correct, then only the ratios will be correct. For
example, valuation of stock is based on very high price, the profits of the concern
will be inflated and it will indicate a wrong financial position. The data therefore
must be absolutely correct.
3. Effect of Price Level Changes: Price level changes often make the comparison
of figures difficult over a period of time. Changes in price affects the cost of
production, sales and also the value of assets. Therefore, it is necessary to make
proper adjustment for price-level changes before any comparison.
4. Qualitative factors are ignored: Ratio analysis is a technique of quantitative
analysis and thus, ignores qualitative factors, which may be important in decision
making. For example, average collection period may be equal to standard credit
period, but some debtors may be in the list of doubtful debts, which is not
disclosed by ratio analysis.
5. Effect of window-dressing: In order to cover up their bad financial position some
companies resort to window dressing. They may record the accounting data
according to the convenience to show the financial position of the company in a
better way.
6. Costly Technique: Ratio analysis is a costly technique and can be used by big
business houses. Small business units are not able to afford it.
7. Misleading Results: In the absence of absolute data, the result may be
misleading. For example, the gross profit of two firms is 25%. Whereas the profit
earned by one is just Rs. 5,000 and sales are Rs. 20,000 and profit earned by the
other one is Rs. 10,00,000 and sales are Rs. 40,00,000. Even the profitability of
the two firms is same but the magnitude of their business is quite different.
8. Absence of standard university accepted terminology: There are no standard
ratios, which are universally accepted for comparison purposes. As such, the
significance of ratio analysis technique is reduced.
 CHAPTER-3
RESEARCH
METHODOLOGY
RESEARCH METHODLOGY
Research means “know about new things”. Sometimes, it may refer to scientific and
systematic search pertinent information on specific topic. In fact research is an art of
scientific investigation. According to Clifford Woody research comprises of. “define and
redefining problem, formulating hypothesis or suggested solution, collecting, organizing
and evaluating data; making deduction and reaching conclusion; and at last carefully
testing the conclusion to determine whether they fit the formulating hypothesis”. Redman
and Moray define research as a “systematic effort to gain new knowledge”. Research can
be defined as the search of knowledge or any systematic investigation to establish fact.

OBJECTIVES OF STUDY:
The broad objectives of the study are to analysis the liquidity position of steel companies
in India. The objectives are as under:
1. To analysis liquidity position of the company.

2. To analysis stock turnover of the company.

3. To know about debt equity ratio of the company.

4. To know about efficiency of the business by analyzing proprietary ratio.

SCOPE OF STUDY:
The scope my study will be confined to :
 Financial Report of the Company for past few years.

 Records compiled and held with company.

 Faridabad – Escorts Ltd.

RESEARCH DESIGN
This chapter covers Problem Identification, Survey of Existing Literature- Statement of
Problem, Objectives of the study-Hypothesis, Universe of Study, Sampling Design,
Period of Study- Data collection and data analysis, Tools and techniques for analysis of
working capital management and Limitations of the study.
TYPES OF RESEARCH DESIGN

 Exploratory Design
 Descriptive Design
 Experimental Design
I used descriptive research design in my research study.

DATA COLLECTION
It is the process of gathering and measuring information on variables of interest, in an
established systematic fashion that enables one to answer stated research questions, test
hypotheses, and evaluate outcomes. The data collection component of research is
common to all fields of study including physical and social sciences, humanities,
business, etc. While methods vary by discipline, the emphasis on ensuring accurate and
honest collection remains the same. SOURCES OF DATA The tools of data collection
translate the research objectives into specific questions/items, the responses to which will
provide the data required to achieve the research objectives. In order to achieve this
purpose, each question/item must convey to the respondent the idea or group of ideas
required by the research objectives, and each item must obtain a response which can be
analyzed for fulfilling the research objective. Information gathered through the tools
provide descriptions of characteristics of individuals institutions or other phenomena
under study. The characteristics may help to explain differences in behavioural pattern
and performance of objects under study. Information gathered through the tools serve
another purpose also. It is useful for measuring the various variables pertaining to the
study. The variables and their interrelationships are analysed for testing the hypothesis or
for exploring the content areas set by the research objectives.

The sources of data may be classified into :

 Primary Sources
 Secondary sources
PRIMARY SOURCES OF DATA COLLECTION:
Primary sources are original sources from which the researcher directly collects data that
have not been previously collected, e.g., collection of data directly by the researcher on
brand awareness, brand preference, brand loyalty and other aspects of consumer
behaviour from a sample of consumers by interviewing them. Primary data are first-hand
information collected through various methods such as observation, interviewing, mailing
etc.

SECONDARY SOURCES OF DATA COLLECTION:

These are sources containing data which have been collected and compiled for another
purpose. The secondary sources consists of readily available compendia and already
compiled statistical statements and reports whose data may be used by researches for
their studies, e.g., census reports, annual, reports and financial statements of companies,
Statistical statements, Reports of Government Departments, Annual Reports on currency
and finance published by the Reserve Bank of India, Statistical Statements relating to
Cooperatives and Regional Rural Banks, published by the NABARD, Reports of the
National Sample Survey.
Organization, Reports of trade associations, publications of international organizations
such as UNO, IMF, World Bank, ILO, WHO, etc., Trade and Financial Journals,
newspapers, etc., Secondary sources consists of not only published records and reports,
but also unpublished records. The latter category includes various records and registers
maintained by firms and organizations, e.g., accounting and financial records, personnel
records, personnel records, register of members, minutes of meetings, inventory records,
etc.
DATA COLLECTION METHODS
The various methods of data gathering involve the use of appropriate recording forms.
These are called tools or instruments of data collection. They consist of- Observation
schedule or
 Observationnaire
 Interview guide
 Interview schedule
 Mailed questionnaire
 Rating scale
 Opinionnaire
  Document schedule/data sheet
 Schedule for institutions
 Inventories

Each of the above tools is used for a specific method of data gathering:
observation schedule for observation method, interview schedule and guide for
interviewing, questionnaire and option air for mail survey, and so on.
Observation Schedule or Observationnaire
The is a form on which observations of a object or a phenomenon are recorded. The
items to be observed are determined with reference to the nature and objectives of the
study. They are grouped into appropriate categories and listed in the schedule in the order
in which the observer would observe them. The items are structured with possible
alternatives. Space is provided against each unit observation for encircling or checking,
or recording, as the case may be. Provision is made for the correct identification of each
case observed and of the observer. The schedule should be so constructed as to make it
possible to record the observations easily and correctly, and to tabulate and analyzed
effectively. The schedule must be so devised as to provide the required verifiable and
quantifiable data and to avoid selective bias and misinterpretation of observed items. The
units of observation must be simple, and meticulously worded so as to facilitate precise
and uniform recording.
Interview Guide
This is used for non-directive and depth interviews. It does not contain a complete list of
items on which information has to be elicited from a respondent; it just contains only the
broad topics or areas to be covered in the interview. Interview guide serves as a
suggestive reference or prompter during interview. It aids in focusing attention on salient
points relating to the study and in securing comparable data in different interview by the
same or different interviewers. There is considerable flexibility as to the manner, order
and language in which the interviewer asks the questions. If the interviewer has to refer
the guide very often, it would defeat its own purpose. The interviewer cannot listen
closely and analytically if his attention rests on the guide. He may fail to respond to the
use and implications of the interviewee‘s remarks.
Interview Schedule and Mailed Questionnaire
Both these tools are widely used in surveys. Both are complete list of questions on which
information is elicited from the respondents. The basic difference between them lies in
recording responses. While a schedule is filled out by the interviewer, a questionnaire is
completed by the respondent.
Check List
This is the simplest of all the devices. It consists of a prepared list of items pertinent to an
object or a particular task. The presence or absence of each item may be indicated by
checking ‗yes‘ or ‗no‘ the object, act or task. A check list contains terms which the
respondent understands and which more briefly and succinctly express his views than
answers to open- ended question. It is a crude device, but careful pre-test can make it less
so. It is at best when used to test specific hypothesis. It may be used as an independent
tool or as a part of a schedule/questionnaire. Its main drawback is that items may be
responded in different ways. They may try to create a favourable impression of
themselves by checking those qualities that they regard as socially desirable.
Opinionnaire
This is a list of questions or statements pertaining to an issues or program. It is used for
studying the opinions of people. It is commonly used in opinion polls. People are asked
to express their responses to the listed questions or reactions to the listed statements.
Documents Schedule/Data Sheet
This is a list of items of information to be obtained from documents, records and other
materials. In order to secure measurable data, the items included in the schedule are
limited to those that can be uniformly secured from a large number of case histories or
other records. For example, a study of annual returns and financial statements filed by
joint-stock companies with the register of joint-capital employed, net worth, volume of
business, income and expenditure, gross profit, net profit before tax and net profit after
tax.
Schedule for Institutions
This is used for survey of organizations like business enterprises, educational institutions,
social or cultural organizations and the like. It will include various categories of data
relating to their profile, functions and performance. These data are gathered from their
records, annual reports and financial statements.
Inventories
An inventory is essentially a list that the respondent is asked to mark or check in a
particular way. Some example of inventories are
1. Lists of interest: the respondents are asked to check those things that interest
them a lot.
2. List of personality traits: people are asked to check which of these apply to them.
3. List of spare-time activities: one has to check the activity engaged most often.
4. Perceived effects of T.V: The respondents may be asked to check ‗true‘ or
‗untrue‘ the following items:
a. I have copied the way the people dress on TV.
b. I have made things after they have been shown on TV.
c. I I have purchased a particular brand after seeing its advertisement on TV.
d. I have gone to an art gallery after seeing it on TV. And so on.

SCALING TECHNIQUES
Introduction
In research we quite often face measurement problem (since we want a valid
measurement but may not obtain it), specially when the concepts to be measured are
complex and abstract and we do not possess the standardised measurement tools.
Alternatively, we can say that while measuring attitudes and opinions, we face the
problem of their valid measurement. Similar problem may be faced by a researcher, of
course in a lesser degree, while measuring physical or institutional concepts. As such we
should study some procedures which may enable us to measure abstract concepts more
accurately. This brings us to the study of scaling techniques.
Meaning of Scaling
Scaling describes the procedures of assigning numbers to various degrees of opinion,
attitude and other concepts. This can be done in two ways viz., (i) making a judgement
about some characteristic of an individual and then placing him directly on a scale that
has been defined in terms of that characteristic and (ii) constructing questionnaires in
such a way that the score of individual‘s responses assigns him a place on a scale. It may
be stated here that a scale is a continuum, consisting of the highest point (in terms of
some characteristic e.g., preference, favourableness, etc.) and the lowest point along with
several intermediate points between these two extreme points. These scale-point positions
are so related to each other that when the first point happens to be the highest point, the
second point indicates a higher degree in terms of a given characteristic as compared to
the third point and the third point indicates a higher degree as compared to the fourth and
so on. Numbers for measuring the distinctions of degree in the attitudes/opinions are,
thus, assigned to individuals corresponding to their scale-positions. All this is better
understood when we talk about scaling technique(s). Hence the term ‘scaling‘ is applied
to the procedures for attempting to determine quantitative measures of subjective abstract
concepts. Scaling has been defined as a procedure for the assignment of numbers (or
other symbols) to a property of objects in order to impart some of the characteristics of
numbers to the properties in question.
Scale construction techniques
Following are the five main techniques by which scales can be developed.
i. Arbitrary approach: It is an approach where scale is developed on ad hoc basis.
This is the most widely used approach. It is presumed that such scales measure
the concepts for which they have been designed, although there is little evidence
to support such an assumption.
ii. Consensus approach: Here a panel of judges evaluate the items chosen for
inclusion in the instrument in terms of whether they are relevant to the topic area
and unambiguous in implication.
iii. Item analysis approach: Under it a number of individual items are developed into
a test which is given to a group of respondents. After administering the test, the
total scores are calculated for everyone. Individual items are then analysed to
determine which items discriminate between persons or objects with high total
scores and those with low scores.
iv. Cumulative scales are chosen on the basis of their conforming to some ranking of
items with ascending and descending discriminating power. For instance, in such
a scale the endorsement of an item representing an extreme position should also
result in the endorsement of all items indicating a less extreme position.
v. Factor scales may be constructed on the basis of inter correlations of items
which indicate that a common factor accounts for the relationship between items.
This relationship is typically measured through factor analysis method.

LIMITATIONS OF STUDY:
The study, though conducted to the best of ability, suffers from certain limitations. These
are:

 The changing environment of the industry makes the data analysis difficult.
 The time availability for the study is less, and as such it hinders the progress
of the study.

 The data is secondary one and as such its reliability may be questioned upon.

 Senior official were rarely approachable.

 Websites were not giving comprehensive data.

 Data availability is very rare & the company is not ready to provide full facts
and figures about their organization that is under study.
 CHAPTER-4
DATA ANALYSIS AND
INTERPRETATION
Introduction
Processing of data is the most important step in research. Lot of statistical
treatment is done on the data. After such analysis, an interpretation of the
statistics is made to draw inferences about the population.

Meaning of procession and analysis of data

The data collected needs to be processed and analyzed. processing of data
implies editing, coding, classification, tabulation, charting and diagrammatic
presentation of data. The analysis of the data means computing appropriate
statistical measures such as measures of central tendency, measures of
dispersion, measures of association, computing test statistics and drawing
inferences from all the above.

Importance of data processing and analysis

To distil the essence of information from the mass of data, processing and
analysis of data are essential. Data processing and analysis are the culmination
of the long process of research design, survey and data collection. From the
mass of data meaning must be churned out. This needs editing I the first place
to do away with unnecessary and irrelevant data. Thus some data reduction is
effected. Furth reduction of data is done through coding which replaces similar
ones by a standard code. After coding, classification is done which groups data
according to common features found or established. This is another data
reduction purpose. Tabulation then follows which involves presenting
classified data in the form of tables. Each table provides a summary data on an
issues or related issues. A table present essential data on a particular topic and
helps to mke sense out of the figures. All these are certain aspect of data
processing. The purpose is to figure out the essential fact from a vast mass of
data. This facilitates analysis.
I. Analysis involves computing
II. descriptive statistics or parameters like measures of central tendency
III. associative statistics such as correlation and regression,
IV. test statistics such as Z values, ‘t‘ values, ‘F‘ values, chi-square values,
‘U‘ values, and so on, and
 V. finding out clusters, principal components, etc. Without these analyses,
no inference, no conclusion and no recommendation can be offered.

So, description, association, hypotheses testing and inference are possible only when
the basics of processing and relevant analyses are done. The overall understanding of
the problems, issues, phenomenon and events studies is facilitated by data
processing. Description, implantation and prediction of phenomena, problems and
issues studied are facilitated only by processing and analysis. A major part of the
main body of any research work has its bases in processing and analysis-hence the
importance of data processing and analysis
CODING
Coding is necessary for efficient analysis and through it, the several replies
may be reduced to a small number of classes which contain the critical information
required for analysis. Coding decisions should usually be taken at the designing
stage of the questionnaire. This makes it possible to pre-code the questionnaire
choices, which in turn, is helpful for computer tabulation as on can straightaway
enter from the original questionnaires.

But in the case of hand-coding, some standard method may be used. One such
standard method is to code in the margin with a coloured pencil. The other method
can be to transcribe the data from the questionnaire to a coding sheet. Whatever
method is adopted, one should see that coding errors are altogether eliminated or
reduced to the minimum level.

Coding is the process/operation by which data/responses are organized into

classes/categories, and numerals or other symbols are given to each item according
to the class in which it falls. In other words, coding involves two important
operations:
 deciding the categories to be used and
 allocating individual answers to them.
These categories should be appropriate to the research problem, exhaustive of
the data, mutually exclusive and uni-directional. Since coding eliminates much
of the information in the raw data, it is important that researchers design
category sets carefully, in order to utilize the available data more fully.
The study of the responses is the first step in coding. In the case of processing-
coded questions, coding begins at the preparation of the interview schedules.
Secondly, the coding frame the indicators used for coding is developed by
listing the possible answers to each question and assigning code numbers or
symbols to each of them. The coding frame is an outline of what is coded and
how it is to be coded. That is, a coding frame is a set of explicit rules and
conventions that are used to base classification of variable observations into
values which are transformed into numbers. Thirdly, after preparing the sample
frame, the gradual process of fitting the answers to the questions must begin.
Lastly, transcription is undertaken, i.e., transferring of the information from the
schedules to a separate sheet called transcription sheet. A transcription sheet is a
large summary sheet which contains the answer/codes of all the respondents.
Transcription may not be necessary when only simple tables are required and
the number of respondents is few.

DATA ENTRY
Data entry is the act connected with transcribing some type of information into
another medium, usually through input right into a computer program. Forms
connected with data that people might transcribe include handwritten
documents, in sequence off spreadsheets, and sequences of numbers, as well as
computer code and in many cases names and addresses. Where as Web
Research or Internet Research means to collect the specified information
through web. It truly is nothing although knowing the most recent updating
about online, relevant to your industry or your interest. Which means, Google
may be indexed everything about which means company to individual person
information and you should separate whatever you need. Both these types of
terms are generally related together. In truth, though “Data Entry & Web
Research”

ANALYSIS AND INTERPRETATION OF DATA

Data analysis and interpretation is the process of assigning meaning to the collected information
and determining the conclusions, significance and implications of the findings. It is an important
and exciting step in the process of research. In all research studies, analysis follows data
collection.

According to C.R.Kothari (1989), “The term analysis refers to the computation of measures
along with searching for patterns of relationship that exist among data-groups”. Analysis
involves estimating the values of unknown parameters of the population and testing of
hypotheses for drawing inferences. The aim of present study is to find out the “Attitude of
Engineering College English Lecturers towards Technical English with Communication Skills
Laboratory in Engineering Curriculum and the Barriers in Implementation.” The investigator
collected data from 300 English lectures of 57 Engineering Colleges from 4 southern districts.
The collected data are arranged properly, analyzed systematically and interpreted precisely.
TABULATION
Tabulation is the process of summarizing raw data and displaying it in compact form for further
analysis. Therefore, preparing tables is a very important step. Tabulation may be by hand,
mechanical, or electronic. The choice is made largely on the basis of the size and type of study,
alternative costs, time pressures, and the availability of computers, and computer programmes. If
the number of questionnaires is small and their length short, hand tabulation is quite satisfactory.

A table may be divided into:

(i) Frequency tables,
(ii) Response tables,
(iii) Contingency tables,
(iv) Uni-variate tables,
(v) Bi-variate tables,
(vi) Statistical tables and
(vii) Time series tables.

Generally a research table has the following parts: (a) table number, (b) title of the table,
(c) caption, (d) stub (row heading), (e) body, (f) headnote (g) footnote. As a general rule
the following steps are necessary in the preparation of a table:

i. Title of table: The table should be first given a brief, simple and clear title
which may express the basis of classification
ii. Columns and rows: Each table should be prepared in an adequate number
of columns and rows.
iii. Captions and stubs: The columns and rows should be given simple and
clear captions and stubs.
iv. Ruling: columns and rows should be divided by means of thin or thick rulings.
v. Arrangement of items: Comparable figures should be arranged side by side.
vi. Deviations: These should be arranged in the column near the original data so
that their presence may be easily noted.
vii. Size of columns: This should be according to the requirement
viii. Arrangements of items: This should be according to the problem.
 ix. Special emphasis: This can be done by writing important detain bold or
special letters.
x. Unit of measurement: The unit should be noted below the lines
xi. Approximation: This should also be noted below the title.
xii. Footnotes: These may be given below the table.
xiii. Total: totals of each column and grand total should be in one line.
xiv. Source: source of data must be given. For primary data, write primary data.

It is always necessary to present fact in a tabular for if they can be presented more simply in the
body of the text. Tabular presentation enables the reader to follow it more quickly than textual
presentation. A table should not merely repeat information covered in the text. The same
information should not, of course, be presented in tabular form and graphical form. Smaller and
simpler tables may be presented in the text, while the large and complex tables may be placed at
the end of the chapter or report.

TOOLS FOR ANALYSIS

CHI SQUARE TEST
Chi square test is applied in statistics to test the goodness of fit to. verify the distribution of
observed data with assumed theoretical distribution. Therefore, it is a measure to study the
divergence of actual and expected frequencies. It has great use in statistics, specially in
sampling studies, where we expect a doubted coincidence between actual and expected
frequencies, and the extend to which the difference can be ignored, because of fluctuations in
sampling. If there is no difference between the actual and expected frequencies, χ2 is zero.
Thus, the Chi square test describes the discrepancy between theory and observation.

Characteristics of χ2 test
 Test is based on events of frequencies,- where as in theoretical distribution, the test
is based on mean and standard deviation.
To draw inferences, this test is applied, specially testing the hypothesis but not useful
for estimation.
The test can be used between the entire set of observed and expected frequencies.
 For every increase in the number of degree of freedom, a new χ2 distribution is
formed.
  It is a general purpose test and as such is highly useful in research.

Assumptions
1. All the observations must be independent.
2. All the events must be mutually exclusive.
3. There must be large observations.
4. For comparison purposes, the data must be in original units.

Degree of Freedom
When we compare the computed value of χ2 with the table value the degree of freedom is
evident. The degree of freedom means the number of classes to which values can be assigned at
will, without violating restrictions. For e.g., we choose any four numbers, whose total is 50. Here
we have a choice to select any three numbers, say 10, 15, 20 and the fourth number is 5, [50 –
(10 + 15 + 20)]. Thus our choice of freedom is reduced by one, on the condition that the total be
50. Therefore the restriction placed on the freedom is one and degree of freedom is three. As the
restrictions increase, the freedom is reduced. Thus,
V–n–K
V : (nu) = Degree of freedom
K : Number of independent constraints
n : Number of frequency classes.
For a contingency table, 2><2,table , the freedom
is V = (C-l) (r-l)
= (2-1) (2-1)
= 1.

Uses
χ2 test of goodness of fit. Through the test we can find out the deviations between the observed
values and expected values. Here we are not concerned with the parameters but concerned with
the form of distribution. Karl pearson has developed a method to test the difference between the
theoretical value (hypothesis) and the observed value. The test is done by comparing the
computed value with the table value of χ2 for the desired degree of freedom. A greek letter χ2 is
used to describe the magnitude of difference between the fact and theory. The χ2may be defined
as
 O = observed frequencies
E = Expected frequencies.
Steps
 A hypothesis is established along with the significance level.
 Compute deviations between observed value and expected value (O-E).
 Divide the (O-E)2 by its expected frequency.
 Square the deviations calculated (O-E)2.
 Add all the values obtained in step 4.
 Find the value of χ2, from χ2 table at certain level of significance, usually 5% level.

If the calculated value of χ2 is greater than the tabled value of χ2, at certain level of significance,
we reject the hypothesis. If the computed value of χ2 value is zero then, the observed value and
expected values completely coincide. If the computed value of χ2 is less than the table value, at a
certain degree of level of significance, it is said to be non significant. This implies that the
discrepancy, between the observed and expected frequencies in simple sampling.

χ2 as a test of independence
χ2 test can be used to find out whether one or more attributes are associated or not. For example,
coaching class and successful candidate, marriage and failure, etc; we can find out whether they
are related or independent we take a hypothesis that the attributes are independent. If the
calculated value of x2 is less than the tabled value at a certain level of significance, the
hypothesis is correct and vice versa

DATA ANALYSIS
1. CURRENT RATIO:
This ratio explains the relationship between current assets and current liabilities of the
company.

FOR 2018-19 Current Assets (A) 184,112,688

Current Liabilities (B) 115,462,757
Current Ratio (A/B) 1.59
FOR 2019-20 Current Assets (A) 118,098,714
Current Liabilities (B) 84,368,890
Current Ratio (A/B) 1.39
FOR 2020-21 Current Assets (A) 108,745,687
Current Liabilities (B) 64,253,852
Current Ratio (A/B) 1.69

CURRENT RATIO

1.8
1.6
1.4
1.2
YEAR
1
0.8
0.6 CURRENT RATIO
0.4
0.2
0

2018-192019-202020-21

INTERPRETATION: According to accounting principles, a current ratio of 2:1 is an

ideal ratio for a company. But according to banking norms and practical approach current
ratio more than 1.5:1 is considered as good liquidity. In case of escorts ltd, the current
ratio is higher than 1.5:1 for two years. But in the year 2019–20 current ratio is decreased
from 1.59 to 1.39. But in 2020-21 it again increased to 1.69, which indicates good
liquidity.

2. QUICK RATIO

This ratio is a measure of a company’s immediate short-term liquidity.

FOR 2018-19 current assets(A) 184,112,688

inventories(B) 18,099,687

loan & advances© 49,560,001

liquid assets(D=A-(B+C)) 116,453,000

current liability(E) 115,462,757

quick ratio(D/E) 1.00

FOR 2019-20 current assets(A) 118,098,714

inventories(B) 7,462,575

loan & advances© 23,453,331

liquid assets(D=A-(B+C)) 87,182,808

current liability(E) 84,368,890

quick ratio(D/E) 1.03

FOR 2020-21 current assets(A) 108,745,687

inventories(B) 9,531,682

loan & advances© 9,392,629

liquid assets(D=A-(B+C)) 89,821,376

current liability(E) 64,253,852

quick ratio(D/E) 1.39

 QUICK RATIO

1.6
1.4
1.2
1
0.8
0.6
0.4 QUICK RATIO
0.2
0

2018-19 2019-20 2020-21

YEAR

INTERPRETATION: An ideal quick ratio is said to be 1:1. This ratio is a better test of
short-term financial position of the company than the current ratio, as it considers only
those assets, which can be easily and readily converted into cash. It follows the same
pattern as current ratio. But in the two years the ratio is higher than 1:1, which indicates
that the company is in a position to repay its financial debt within a month or
immediately.
 3. OPERATING ASSESTS RATIOS:
Income ratios assess the company’s ability to earn income from the assets employed. It
checks whether the assets employed by the company are properly managed or not. The
higher the ratio the better it is for the company and vice versa.

TURNOVER OF TOTAL OPERTAING ASSETS

It tracks over-investment in operating assets. It is calculated as follows :

FOR 2018-19 Net Sales (A) 594,383,287
Total Assets (B) 998,052,379

Long Term Investments (C) 0

Operating Assets (D=B-C) 998,052,379
Turnover of Total Operating Assets ratio (A/D) 0.59
FOR 2019-20 Net Sales (A) 511,845,562
Total Assets (B) 977,718,745
Long Term Investments (C) 0
Operating Assets (D=B-C) 977,718,745
Turnover of Total Operating Assets ratio (A/D) 0.52
FOR 2020-21 Net Sales (A) 488,044,780
Total Assets (B) 503,125,251
Long Term Investments (C) 0
Operating Assets (D=B-C) 503,125,251
Turnover of Total Operating Assets ratio (A/D) 0.97
 TURNOVER OF TOTAL OPERATING ASSETS RATIO

1.2

0.8
Series1
0.6
0.4

0.2

0
2018-19 2019-20 200-21
YEAR
09

INTERPRETATION:

As we can see that the turnover of total operating assets ratios is showing tremendous
decrease from 2018-19 to 2019-20 i.e. from 0.97 in 2018-19 to .0.52 in 2019-20. This has
happened because decreases in sales. But it is increasing in the 2020-21 i.e. from 0.52 to
0.59.
 4. WORKING CAPITAL RATIOS
Working capital (also known as net working capital) is a financial metric, which
represents the amount of day-by-day operating liquidity available to a business.
FOR 2020-21 Cost of Sales (A) 57,062,095
Net Working Capital (B) 68,649,931
Working Capital Turnover Ratio
(A/B) 0.83
FOR 2019-20 Net Sales (A) 56,054,528
Net Working Capital (B) 33,729,824
Working Capital Turnover Ratio
(A/B) 1.66
FOR 2018-19 Net Sales (A) 45,304,106
Net Working Capital (B) 44,491,835
Working Capital Turnover Ratio
(A/B) 1.01

WORKING CAPITAL TURNOVER RATIO

1.8
1.6
1.4
1.2
1
0.8
0.6 Series1
0.4
0.2
0

2018-19 2019-20 2020-21

YEAR

INTERPRETATION: : The working capital turnover ratio is low for the year 2020-21
i.e. 0.83, which is not a good sign for the company, as much higher ratio indicates
inefficient utilization of working capita
 5. STOCK TURNOVER RATIO

This ratio indicates the relationship between cost of goods sold during the year
and average stock kept during the year.

FOR 2020-21 NET SALES(A) 594,383,287

INVENTORY(B) 18,099,687
INVENTORY TURNOVER
RATIO(A/B) 32.8
FOR 2019-20 NET SALES(A) 511,845,562
INVENTORY(B) 7,462,575
INVENTORY TURNOVER
RATIO(A/B) 69
FOR 2018-19 NET SALES(A) 488,044,780
INVENTORY(B) 9,531,682
INVENTORY TURNOVER
RATIO(A/B) 51

INVENTORY TURNOVER RATIO

80
70
60
50
40
30
20 Series1
10
0

2018-19 2019-20 2020-21

YEAR

INTERPRETATION: This ratio indicates whether stock has been efficiently used or
not. It shows the speed with which the stock is rotated into sales or the number of times
the stock is turned into sales during the year. The higher the ratio, the better it is, since it
indicates that stock is selling quickly.
 6. DEBT EQUITY RATIO

This ratio expresses the relationship between long-term debts in comparison to

shareholder’s fund.

FOR 2020-21 LOAN FUNDS(A) 26,299,369

CURRENT LIABILITY(B) 115,462,757

OUTSIDERS FUNDS(C=A+B) 141,762,126

SHAREHOLDERS FUND(D) 220,000,000

DEBT EQUITY RATIO(E=C/D) 0.64

FOR 2019-20 LOAN FUNDS(A) 61,304,939

CURRENT LIABILITY(B) 84,368,890

OUTSIDERS FUNDS(C=A+B) 145,673,829

SHAREHOLDERS FUND(D) 220,000,000

DEBT EQUITY RATIO(E=C/D) 0.66

FOR 2018-19 LOAN FUNDS(A) 110,046,742

CURRENT LIABILITY(B) 64,253,852

OUTSIDERS FUNDS(C=A+B) 174,300,594

SHAREHOLDERS FUND(D) 220,000,000

DEBT EQUITY RATIO(E=C/D) 0.36

 DEBT EQUITY RATIO

0.7
0.6
0.5
0.4
0.3
0.2
0.1 Series1
0

2018-19 2019-20 2020-21

YEAR

INTERPRETATION: This ratio is calculated to ascertain the soundness of the long-

term financial policies of the firm. Generally, a ratio of 2:1 is considered safe. In case of
fortis escorts hospital. it is lower than the ideal ratio of 2:1 which is good for the
company as well as to the long term lenders.It shows that the company is relying more on
its own money. Thus the creditors can enjoy a safety for their money.
 7. PROPRIETORY RATIO

The ratio establishes the relationship between shareholders fund to total assets of the
firm.

PRORIETORY RATIO

4
Series1
3
2

0
2018-19 2019-20 2020-21
YEAR

INTERPRETATION: This analysis shows the efficiency of the business indicates the
percentage of owner’s capital to total capital of the firm.
 CHAPTER-5
CONCLUSIONS
CONCLUSIONS

Optimum use of all available resources has always struck me as key word for all the
development. Being a trainee of escorts ltd., I have experienced their organizational
culture, their way of working and evidencing their drastic growth in short span of time.
I, being an BBA student always felt concerned to investigate scientifically some of the
aspects of the Financial Report of the company.
I had discussed this with the top management of the company who allowed me to
undertake the project on “ANALYSIS OF FINANCIAL STATEMENT OF ESCORTS
LTD.

Following are the conclusions of this study:-

1). Current ratio of the company is the ideal according to banking norms.
2). Quick ratio of the company shows that company is in position to repay it financial
debt.
3). Working capital ratio of the company shows not a good signal for a
company. 4). Stock turnover ratio is higher which shows that stock the selling
quickly.
5). Debt equity ratio of the company is good for the company as well as to long term
lenders.
6). Efficiency of the business indicates the percentage owner’s capital to total of the firm.
 CHAPTER-6
SUGGESTIONS
SUGGESTIONS:
The study has amply revealed that there is a large scope for management to improve the
effectiveness of utilization of funds and thus increase the growth rate of the company
and profit as well. Major recommendations are:
 Management should carry out some study and should put special efforts to reduce
the selling & marketing cost which is on very higher side and hampering its net
profit Ratio.

 Top management should seriously examine the working capital needs of the
company because as an organisation is already having a Expansion project in
progress, so little carelessness may fetch liquidity problems to the company.

 Escorts should also need to have a close watch over the inventories. As it is
having bulk inventories so regular physical stock taking and other internal control
are very essential.

 Escorts should develop an organizational culture where everyone contributes to

reduce and control overheads of the company. Because Escorts is already having
higher overhead and manpower cost as compare to its competitors, which is
hampering its Net Profit ratios.

 Company should take care about its liquidity position.

 CHAPTER-7
BIBLIOGRAPHY
 BIBILOGRAPHY

 Annual Reports Of The Company.

 Publications by the organizational circulation
 Company Records
 Financial statements of escort’s ltd.

WEBSITE
 WWW.ESCORTSGROUP.COM
 WWW.GOOGLE.COM
 WWW.SWARAJMAZADA.COM
 www.managementschollar.org
 http://en.wikipedia.org/wiki/knowledge_management
 http://conspire.com
 http://www.knowledgeboard.com/