Ratio Analysis Project

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Ratio Analysis - Project
BBA (Savitribai Phule Pune University)
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VPCSC
A
Project Report on
<RATIO ANALYSIS=
For
MAHAVIR XEROX PVT.LTD. INDAPUR

Submitted To
Savitribai PhuleUniversity of Pune
In the partial fulfillment of the degree of

Bachelor Of Business Administration
Submitted by
SHINDE AKSHAY PRAKASH
BBA (finance)
(2020-2021)
Under the guidance of

Prof. Bagwan M. S.
Vidya Pratishthan’s
Commerce & Science College,
Indapur

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certificate
Vidya Pratishthan’s
Commerce And Science College,
Indapur, Pune. 413106
This is to certify that the project report entitled.
<RATIO ANALYSIS=
For
<MAHAVIR XEROX PVT. LTD INDAPUR=
Submitted
In partial fulfillment of the requirement for the award of the degree
Of Bachelor Of Business Administration (BBA) In
<Savitribai PhuleUniversity Of Pune=
The Project Report Submitted Through
VidyaPratishthan’s Commerce And Science College,
Vidyanagari, Indapur, During The Academic Year,
2020-21
H.O.D PRINCIPAL
Date: / /2021 Place: Indapur

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VPCSC
VidyaPratishthan’s
Commerce And Science College,
Indapur, Pune. 413106
This is certify that, <SHINDE AKSHAY PRAKASH= student of TY

BBA course, Sem-3th has completed his project work titled<RATIO
ANALYSIS=For<MAHAVIR XEROX PVT. LTD.INDAPUR=as apart
of curriculum, during the academic year 2020-21.
University Seat No:-
External Examiner:- Internal examiner:-

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DECLARATION
In the undersigned here by state that the report entitled RATIO ANALYSIS
is a genuine & both fine work prepared by me under the guidance of Prof. Bagwan
M. S. The empirical Findings in this project report on the data collected by me.
The matter presented this report is not copied from any source. I understand that
any such copy is liable to the punishment in way the University authority deems
fit. The work has not been submitted for the award of any degree entire to
Savitribai Phule University Of Pune universities this project report is submitted to
Savitribai Phule University Of Pune in partial fulfillment of the degree of Bachler
Of Business Administration.
Date:
Place

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Guide Certificate
This is certify that, SHINDE AKSHAY PRAKASH. BBA Course,

SEM-3th has successfully completed his project work titled
<Ratio Analysis=
For <Mahavir Xerox Pvt. Ltd.=Under my guidance.
Prof. Bagwan M. S.
Date: / /2021
Place:

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ACKNOLEDGEMENT
Several persons have expected their helping hands in the successful completion of
this project report on RATIO ANALYSIS I must first express my sense of
gratitude to MR. MOHAN DOSHI SIR for having accorded me the permission to
undertake the project report MAHAVIR XEROX PVT. LTD Special thanks to
Mr. Atish Doshi for his valuable guidance with dearest co-operation I also must
show deepest gratitude to professor Prof. Bagwan M. S. for his valuable
suggestion,guidance& advise in bringing out this project report.
My special regards to my friends who directly or indirectly helped me in
completion of this project report. Finally I give immeasurable thanks my parents &
friends who endured report may evening & weekends of solitude for the thrill of
seeing the project report. Much of this reports is due to their patience
encouragement & love. But I also bear the responsibility for any errors between the
covers.

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INDEX
SR.NO. SUB. NO. PARTICULARS PAGE
NO.
1 PROJECT INTRODUCTION 9-14

1.1 Introduction 10
1.2 Objective Of Study 11
1.3 Research Methodology 12-13
1.4 Data Collection 14
2 CONCEPTUAL FRAMEWORK 15-33
2.1 Introduction of Ratio 16
2.2 Meaning & Definition of Ratio 17
2.3 Objectives Of Ratio Analysis 18
2.4 Advantages Of Ratio Analysis 19

2.5 Limitation Of Ratio Analysis 20
2.6 Types Of Ratio Analysis 21-33
3 BUSINESS PROFILE 34-44
3.1 History 35
3.2 Vision Statement 36
3.3 Mission Statement 36
3.4 Financial Statement 39-45
4 ANALYSIS & INTERPRETATION 46-52
5 FINDINGS 53-54
6 BIBLIOGRAPHY 55-56

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EXECUTIVE SUMMARY
Ratio Analysis in <MAHAVIR XEROX PVT.LTD.=Was the project as a part of

the academic requirement for third year Bachelor or Business Administration
Course, Vidya Pratishthan’s Commerce & Science Collage Indapur.
The objective of the project was to understand the Ratio Analysis as

prevalent in the company & evaluating it as a part of the study.
The project was carried out from 01/12/2020 to 11/01/2021 under the
guidance ofMr. MOHAN DOSHI,MAHAVIR XEROX PVT.LTD.,INDAPUR
Financial Statement & Ratio Analysis plays an important role in every

business. It refers to the administration of all aspects of current assets & current
liabilities. The amount needed to be invested in current assets affected by many
factors & many fluctuations over a period of time.

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CHAPTER NO.1
PROJECT INTRODUCTION

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INTRODUCTION
A good management decision should be both accomplished the goals that

management seeks. An efficient decision consumes minimum amount of
resources to achieve the desired goal. Working Capital provides knowledge to take
effective & efficient decision for to run business in appropriate manner.
Ascertainment of profitability & internal & external reporting. Today we are
living in the area of information technology. Management can avoid making
decision. Decision making is focused to words specific goal & data decision will
lack purpose & effectiveness. The < Ratio Analysis= project has a rapid step & has
established a distance & highly specialized framework to assist the business
management in planning & controlling its operations. This branch got its
importance particularly now–a-days where there is cut throat competition have
industrialization concept of the large scale production.
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OBJECTIVES OF THE STUDY
• To know the financial performance of the Firm.
• To study the Ratio Analysis and determine the position of the company
viz. a viz. its competitors
• To study the growth of an organization form financial dimensions.
• To provide the necessary basis for inter-period comparison ofMahavir

Xerox.
• To help the management in discharging its basis functions like

forecasting, planning, co-ordination, communication, control etc.
• To act as an index of the efficiency of an enterprise.
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RESEARCH METHODOLOGY
Methodology of Study:
Research can be defined as systemized effort to gain new knowledge. A
research is carried out by different methodologies which have their own pros and
cons. Research methodology is a way to solve research in studying and solving
research problem along with logic behind them are defined through research
methodology. Thus while talking about research methodology we are not only
talking of research methods but also considered the logic behind the methods and
why they are used; so that research result is capable of being evaluated either by
researcher himself or by others.
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Definition:
By Random Howl’s
<Research is a systematic and diligent examination or scientific
investigation into subject in order to discover or revise the facts, theories and
application.=
<Research is the search for knowledge. It is scientific, systematic and logical
way of finding of truth. It has certain objectives.=
Research is also known as problem solving tool. The basic purpose of any research
is to solve the problem. It is the scientific investigation of the root cause of the
problem. Research is an organized enquiry by collection of the data and analyzing
the same. Research is also based on empirical evidence and observational for
formulation conclusion to establish new theories.
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SOURCES OF DATA COLLECTION:-
Primary Sources:-
This method of the collection is firsthand information collection. This
method is needed for meeting the specific objective of the research study. The
primary data was collected in the form of list of corporate promoters, application
files etc. Primary data was collected in with the help of organization manager and
other respective staff concerned in account department. It was collected form face
to face interaction with concerned people.
Secondary Sources:-
The secondary data was gathered from different sources, which different
authors, researchers and authorities have written and given their opinion and views
about the subject. A source in this category includes text books like Financial
Management by Prop. I.M.PANDEY and Financial Management by Prop. N. M.
VECHALEKAR .
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CHAPTER NO.2
CONCEPTUAL FRAMWORK
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INTRODUCTION OF RATIO:
Ratio analysis is one of the popular tools of financial statement analysis. In

simple word, ratio is the quotient formed when one magnitude is divided by
another measured in the same unit. A ratio is defined as the indicated quotient
of two mathematical expressions and as the relationship between two or
more things. Usually the ratio is stated as a percentage i.e. distribution
expenses might be stated as 20.5 percent of sales. Often however, the ratio is
expressed in units, this sales might be expressed as 20 times inventory. Thus,
the ratio is a pure quantity or number, independent of the measurement units
being used. A financial ratio is defined as a relationship between two
variables taken from financial statements of a concern. It is mathematical
yardstick that measures the relationship between two figures.
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MEANING & DEFINATION OF RATIO:
Ratios are relationships expressed in mathematical terms between figures

which are connected with each other in some manner. Obviously, no purpose
will be served by comparing two sets of figures which are not at all
connected with each other.
Ratios can be expressed in two ways:
1.Times :
When one value is divided by another, the unit used to express the quotient is
termed as Time. For example, if out of 100 students in a class,90 are present,
the attendance ratio can be expressed as follows:
= 90/100=0.9 Times
2. Percentage :
If the quotient obtained is multiplied by 100, the unit of expression is termed

as Percentage. For instance, in the above example, the attendance ratio as a
percentage of the total number of students is as follows:
= 0.9 x 100 = 90 %
Accounting ratios are, therefore mathematical relationships expressed

between inter-connected accounting figures.
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OBJECTIVES OF RATIO ANALYSIS:
1. To help in providing a part of information needed in the process of decision

making.
2. To focus on facts on a comparative basis and facilitate drawing of

conclusions relating to the performance of a firm.
3. To throw light on the degree of efficiency in the management and the

effectiveness in the uilisation of its assets.
4. To provide the way for effective control of the enterprise in the matter of
achieving the physical and monetary targets.
5. To help the management in discharging its basic functions like forecasting,

planning, co-ordination, communication, control etc.
6. To act an index of the efficiency of an enterprise.
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Advantages of Ratio Analysis:
1) It guides of the management future financial planning &policies .
2)It through light on the efficiency of the business organization .
3)It ensures effective cost control.
4)It provides greater clarity, Perspective or meaning to the data & it brings out
information not otherwise apparent .
5)It measures profitability & solvency of concern.
6)It helps in investment decision.
7)It permit monitory figures of many digits to condensed to two or three digits
which enhanced managerial efficiency.
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Limitation of Ratio Analysis:
1)It lacks standard values for the ratios, therefore scientific analysis is not possible.
2)As there are no standard with which to compare ,it fails to throw light on the
efficiency of the activity of the business.
3) It gives only the relationship between different variable & the actual magnitude
are not known through ratios.
4)Ratios are derived from the financial statements & naturally reflect their
drawbacks.
5)It fails to indicate immediately where the mistake or error lies.
6) It does not take into consideration the market & other changes.
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Types of Ratio Analysis:
Classification of ratio is made on the basis of requirement by end

users and they indicate symptom as characteristic of company.
Functional classification
A] Profitability B] Solvency C] Liquidity D] Profitability E] Efficiency
Ratio RatioRatioRatioRatioS
1. Gross Profit 1.Dept-equity 1.Current Ratio 1.Return on 1.Inventory turno-
Ratio Ratio 2.Liquid Ratio Investment -ver ratio
2. Net Profit 2.Interest 3.Absulate liquid 2.Return on Equity 2.Fixed assets
Ratio coverage Ratio Ratio 3.Earnings per turnover ratio
3. Operating 3.Proprietary share 3.Total assets
Profit Ratio Ratio turnover ratio
4. Expences 4.Fixed assets 4.Debtors Turnov-
Ratio to net worth -er ratio
5. Capital gearing 5.Working capital
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RATIO ANALYSIS
It refers to the systematic use of ratios to interpret the financial statements in terms
of the operating performance and financial position of a firm. It involves
comparison for a meaningful interpretation of the financial statements.
In view of the needs of various uses of ratios the ratios, which can be calculated
from the accounting data are classified into the following broad categories
• Liquidity Ratio
• Turnover Ratio
• Solvency or Leverage ratios
• Profitability ratios
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A. LIQUIDITY RATIO
It measures the ability of the firm to meet its short-term obligations, that is capacity
of the firm to pay its current liabilities as and when they fall due. Thus these ratios
reflect the short-term financial solvency of a firm. A firm should ensure that it
does not suffer from lack of liquidity. The failure to meet obligations on due time
may result in bad credit image, loss of creditors confidence, and even in legal
proceedings against the firm on the other hand very high degree of liquidity is also
not desirable since it would imply that funds are idle and earn nothing. So
therefore it is necessary to strike a proper balance between liquidity and lack of
liquidity.
The various ratios that explains about the liquidity of the firm are
• Current Ratio
• Acid Test Ratio / quick ratio
• Absolute liquid ratio / cash ratio
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1. CURRENT RATIO
The current ratio measures the short-term solvency of the firm. It establishes the
relationship between current assets and current liabilities. It is calculated by
dividing current assets by current liabilities.
Current Ratio = Current Asset

Current Liabilities
Current assets include cash and bank balances, marketable securities, inventory,
and debtors, excluding provisions for bad debts and doubtful debtors, bills
receivables and prepaid expenses. Current liabilities includes sundry creditors,
bills payable, short- term loans, income-tax liability, accrued expenses and
dividends payable.
2. ACID TEST RATIO / QUICK RATIO
It has been an important indicator of the firm’s liquidity position and is used as a
complementary ratio to the current ratio. It establishes the relationship between
quick assets and current liabilities. It is calculated by dividing quick assets by the
current liabilities.
Acid Test Ratio = Quick Assets

Quick liabilities
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Quick assets are those current assets, which can be converted into cash
immediately or within reasonable short time without a loss of value. These include
cash and bank balances, sundry debtors, bill’s receivables and short-term
marketable securities.
B. TURNOVER RATIO
Turnover ratios are also known as activity ratios or efficiency ratios with which a
firm manages its current assets. The following turnover ratios can be calculated to
judge the effectiveness of asset use.
• Inventory Turnover Ratio

• Debtor Turnover Ratio
• Creditor Turnover Ratio
• Asset Turnover Ratio
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1. INVENTORY TURNOVER RATIO
This ratio indicates the number of times the inventory has been converted into sales
during the period. Thus it evaluates the efficiency of the firm in managing
its inventory. It is calculated by dividing the cost of goods sold by average
inventory.
Inventory Turnover Ratio = Cost of goods sold

Average Inventory
The average inventory is simple average of the opening and closing balances of
inventory. (Opening + Closing balances / 2). In certain circumstances opening
balance of the inventory may not be known then closing balance of inventory may
be considered as average inventory
2. DEBTOR TURNOVER RATIO
This indicates the number of times average debtors have been converted into cash
during a year. It is determined by dividing the net credit sales by average debtors.
Debtor Turnover Ratio = Net Credit Sales

Average Trade Debtors
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Net credit sales consist of gross credit sales minus sales return. Trade debtor
includes sundry debtors and bill’s receivables. Average trade debtors (Opening +
Closing balances / 2)
When the information about credit sales, opening and closing balances of trade
debtors is not available then the ratio can be calculated by dividing total sales by
closing balances of trade debtor
Debtor Turnover Ratio = Total Sales

Trade Debtors
3. CREDITOR TURNOVER RATIO
It indicates the number of times sundry creditors have been paid during a year. It
is calculated to judge the requirements of cash for paying sundry creditors. It is
calculated by dividing the net credit purchases by average creditors.
Creditor Turnover Ratio = Net Credit Purchases

Average Trade Creditor
Net credit purchases consist of gross credit purchases minus purchase return
When the information about credit purchases, opening and closing balances of
trade creditors is not available then the ratio is calculated by dividing total
purchases by the closing balance of trade creditors.
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Creditor Turnover Ratio = Total purchases

Total Trade Creditors
4. ASSETS TURNOVER RATIO
The relationship between assets and sales is known as assets turnover ratio.
Several assets turnover ratios can be calculated depending upon the groups of
assets, which are related to sales.
• Total asset turnover.

• Net working capital turnover ratio
A) TOTAL ASSET TURNOVER
This ratio shows the firm’s ability to generate sales from all financial resources
committed to total assets. It is calculated by dividing sales by total assets.
Total asset turnover =Total Sales

Total Assets
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B) NET WORKING CAPITAL TURNOVER RATIO
A higher ratio is an indicator of better utilization of current assets and working

capital and vice-versa (a lower ratio is an indicator of poor utilization of current
assets and working capital). It is calculated by dividing sales by working capital.
Net working capital turnover ratio = Total Sales

Working Capital
Working capital is represented by the difference between current assets and current
liabilities.
C. SOLVENCY OR LEVERAGE RATIOS
The solvency or leverage ratios throws light on the long term solvency of a firm
reflecting it’s ability to assure the long term creditors with regard to periodic
payment of interest during the period and loan repayment of principal on maturity
or in predetermined installments at due dates. There are thus two aspects of the
long-term solvency of a firm.
• Ability to repay the principal amount when due

• Regular payment of the interest.
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The ratio is based on the relationship between borrowed funds and owner’s capital
it is computed from the balance sheet, the second type are calculated from the
profit and loss a/c. The various solvency ratios are
• Debt equity ratio
• Debt to total capital ratio
• Proprietary (Equity) ratio
• Fixed assets to net worth ratio
• Fixed assets to long term funds ratio
• Debt service (Interest coverage) ratio
1. DEBT EQUITY RATIO

Debt equity ratio shows the relative claims of creditors (Outsiders) and owners
(Interest) against the assets of the firm. Thus this ratio indicates the relative
proportions of debt and equity in financing the firm’s assets. It can be calculated
by dividing outsider funds (Debt) by shareholder funds (Equity)
Debt equity ratio = Outsider Funds (Total Debts)

Shareholder Funds or Equity
The outsider fund includes long-term debts as well as current liabilities. The
shareholder funds include equity share capital, preference share capital, reserves
and surplus including accumulated profits. However fictitious assets like
accumulated deferred expenses etc. should be deducted from the total of these
items to shareholder funds. The shareholder funds so calculated are known as net
worthof the business.
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2. DEBT TO TOTAL CAPITAL RATIO
Debt to total capital ratio = Total Debts

Total Assets
• PROFITABILITY RATIOS
The profitability ratio of the firm can be measured by calculating various

profitability ratios. General two groups of profitability ratios are calculated.
• Profitability in relation to sales.
• Profitability in relation to investments.
Profitability in relation to sales
• Gross profit margin or ratio

• Net profit margin or ratio
• Operating profit margin or ratio
• Operating Ratio
• Expenses Ratio
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1. GROSS PROFIT MARGIN OR RATIO
It measures the relationship between gross profit and sales. It is calculated by

dividing gross profit by sales.
Gross profit margin or ratio = Gross profit X100

Net sales
Gross profit is the difference between sales and cost of goods sold.
2. NET PROFIT MARGIN OR RATIO
It measures the relationship between net profit and sales of a firm. It indicates
management’s efficiency in manufacturing, administrating, and selling the
products. It is calculated by dividing net profit after tax by sales.
Net profit margin or ratio = Earnings after tax X 100

Net Sales
3. EXPENSES RATIO
While some of the expenses may be increasing and other may be declining to know
the behavior of specific items of expenses the ratio of each individual operating
expences to net sales should be calculated. The various variants of expenses are
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Cost of goods sold = Cost of goods sold X 100

Net Sales
Administrative Expenses Ratio =Administrative Expenses X 100

Net sales
Selling and distribution expenses ratio =Selling and distribution expenses X 100
Net sales
• OPERATING PRFIT MARGIN OR RATIO
Operating profit margin or ratio establishes the relationship between operating

profit and net sales. It is calculated by dividing operating profit by sales.
Operating profit margin or ratio = Operating Profit X 100

Net sales
Operating profit is the difference between net sales and total operating expenses.
(Operating profit = Net sales – cost of goods sold – administrative expenses –
selling and distribution expenses.)
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CHAPTER NO.3
BUSINESS PROFILE
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HISTORY
Mahavir Xerox is started as a small start. The Mahavir Xerox is establish in 1982
as small start in retail shop which is need of photocopy machine in Mahivirbhandi
store. There no facility in IndapurTaluka to make photocopy of the document.
First is started by Mr. Mohan PremchandDoshi in Indapur as side business of the
Bhandi store. But as a requirement & demand & need of the people it becomes
their main business. First they started Xerox machine which made by Indian
company which takes 3 minute, to take one side imprecation. As a demand & need
they get Automatic Xerox machine in 1985 which is made by Cannon Japan
company, which takes 3 sec. for one copy.
After paring time the Mahavir Xerox is well goodwill in the market. Become of the
service & quality of service. In new mahiver Xerox center is started in his own
place. Is goodwill which improve them as symbol of good shopkeeper.
In the 1998 the san Mr. Atish Mohan Doshi also given the business &the
decelerate the firm & started new shop, at itIndapur V.P. college named as
Mahavir Enterprises. Now both shop running successfully with help of 5 workers.
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VISION STATEMENT
Mahavir aims to be quality leader in class of Xerox through continuing to be the

market pioneer of environmentally innovative technology, introducing good
quality of Xerox to the market that increases company popularity.
MISSION STATEMENT
The center have management of the print to Xerox produce

to increases storage memory of the Xerox machine.
The center have the quality of the photocopy & give the minimum price to
customer.
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FINANCIAL STATEMENT
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MAHAVIR XEROX PVT. LTD.

PROP.SHRI. MOHAN PREMCHAND DOSHI
Trading A/c, profit & loss A/C
For year ended 31-3-2019
Particular Amount Particular Amount
To Opening stock 2,11,787.00 By Sales 14,13,230.00
To Purchases 12,17,570.00 By Closing stock 3,10,353.00
To Transp.&Hamali 11,580.00
To Gross Profit 2,82,6460.00
17,23,583.00 17,23,583.00
To Salary 48,000.00
To Shop Expenses 9,865.00 By Gross Profit 2,82,646.00
To Bank Interest 18,845.00 By Xerox, Ltd. &DTP. 3,76,500.00
To Insurance 10,993.00
To Bank Commission & 843.80
Charges
To A/c Writing Charges 2,000.00
To Lower Fees 1,000.00
To Postage & Courier 3,323.00
To Travelling Expenses 13,880.00
To Repairs & Maintains 11,460.00
To Electricity Charges 19,875.00
To Muncipal Tax 2,200.00
To Mobile & Telephone 12,745.00
Bill
To Depreciation
Computer 704.88
Furniture 24,784.00
Shop Building 10,576.26
To Net Profit 4,55,080.68
6,59,146.00 6,59,146.00
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CAPITAL A/C
As On 31-3-2019

To Drawing 1,15,740.00 By Balance B/d 12,59,683.27
To LIC Paid 35,008.00 By Agriculture Income 55,760.00
To Interest On Hosing Loan 1,76,905.00 By Net Profit 4,55,080.68
To Balance C/f 14,42,870.95
17,70,523.95 17,70,523.95
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MAHAVIR XEROX CENTER

PRO.SHRI. MOHAN PREMCHAND DOSHI
BALANCE SHEET AS AT 31-3.2019
LIABITIES AMT AMT ASSETS AMT AMT
CAPITALA/C FIXED ASSETS

Shri. Mohan P. Doshi FURNITURE
(As per Statement 14,42,870.95 Balance 1,72,845.00
attached) Addition During The
Year 75,000.00
SECURED LOAN Less: Depreciation 24,784.50 2,23,060.50
JanataSah. Bank 1,87,784.00 HOUSE BUILDING
(Credit Cash 10,38,373.00 Balance 17,79,100.00
JanataSha. Bank SHOP PREMISES
(Housing Loan) Balance 10,5,762.60
CURRENT Less: Depression 10,576.26 95,186.34
LIBILITIES MACHINERY
S. Creditors 1,50,000.00 Balance 86,999.20
Income Tax 4,600.00 Less: Depression 13,049.88 73,949.32
Bills Payable 1,45,400.00 3,00,000,00 COMPUTER &
PRINTING
Balance 1,174.80
Less: Depreciation 704,88 469.92
OPEN PLOT at
Indapur 15,800.00
House Hold Furniture
DEPOSITS 1,45,630.00
Telephone Deposits
Share with Bank 2,000.00
FD With Janata Bank 55,000.00
(Anamat) 50,000.00
CURRENT ASSETS 58,630.00
S. Debtors 3,10,353.00
Closing Stock 1,25,000.00
Atish M. Doshi 34,848.87 5,28,831.87
Cash & Bank Bal.
29,69,027.95 29,69,027.95
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Trading A/c, profit & loss A/C
For year ended 31-3-2020
To Opening stock 2,52,820.00 By Sales 15,20,410.00
To Purchases 13,06,420.00 By Closing stock 3,12,515.00
To Transp.&Hamali 12,130.00
To Gross Profit 2,61,555.00
18,32,925.00 18,32,925.00
To Salary 51,000.00
To Shop Expenses 9,565.00 By Gross Profit 2,61,555.00
To Bank Interest 15,225.00 By Xerox, Ltd. &DTP. 3,76,500.00
To Insurance 10,925.00
To Bank Commission & 843.80
Charges
To A/c Writing Charges 2,000.00
To Lower Fees 1,200.00
To Postage & Courier 2,851.00
To Travelling Expenses 14,380.00
To Repairs & Maintains 11,455.00
To Electricity Charges 18,920.00
To Muncipal Tax 2,500.00
To Mobile & Telephone 13,200.00
Bill
To Depreciation
Computer 802.88
Furniture 23,900.00
Shop Building 11,300.26
To Net Profit 4,47,989.68
6,38,055.00 6,38,055.00
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CAPITAL A/C
As On 31-3-2020

To Drawing 1,15,740.00 By Balance B/d 12,59,683.27
To LIC Paid 35,008.00 By Agriculture Income 55,760.00
To Interest On Hosing Loan 1,76,905.00 By Net Profit 4,47,989.68
To Balance C/f 14,35,779.95
17,63,432.95 17,63,432.95
44

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MAHAVIR XEROX CENTER

PRO.SHRI. MOHAN PREMCHAND DOSHI
BALANCE SHEET AS AT 31-3-2020
LIABITIES AMT AMT ASSETS AMT AMT
CAPITALA/C FIXED ASSETS

Shri. Mohan P. Doshi FURNITURE
(As per Statement 14,35,779.95 Balance 1,72,845.00
attached) Addition During The
Year 75,000.00
SECURED LOAN Less: Depreciation 23,900.50 2,23,945.50
JanataSah. Bank 1,87,784.00 HOUSE BUILDING
(Credit Cash Balance 17,69,785.00
JanataSha. Bank 10,38,373.00 SHOP PREMISES
(Housing Loan) Balance 10,5,765.60
CURRENT Less: Depression 11,300.26 94,462.34
LIBILITIES MACHINERY
S. Creditors 1,50,000.00 Balance 86,999.20
Income Tax 4,600.00 Less: Depression 13,049.88 73,949.32
Bills Payable 1,45,400.00 3,00,000,00 COMPUTER &
PRINTING
Balance 1,174.80
Less: Depreciation 802,88 372.92
OPEN PLOT at
Indapur 15,800.00
House Hold
Furniture 1,45,630.00
DEPOSITS
Telephone Deposits 2,000.00
Share with Bank 55,000.00
FD With Janata Bank 50,000.00
(Anamat)
CURRENT ASSETS
S. Debtors 58,630.00
Closing Stock 3,12,515.00
Atish M. Doshi 1,25,000.00
Cash & Bank Bal. 34,848.87 5,30,993.87
29,61,936.95 29,61,936.95
45

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CHAPTER NO.4
ANALYSIS & INTERPRETATION
46

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Formulas of ratio’s
1) CURRENT RATIO:-
(2014)Current Ratio = Current Asset
Current Liabilities
=5,28,831.87/3,00,000.00
= 1.76:1
(2015)Current Ratio = Current Asset

Current Liabilities
=5,30,993.00/3,00,000.00
= 1.77:1
(Current assets include cash and bank balances, inventory, and

debtors, excluding provisions for bad debts and doubtful debtors, bills
receivables and prepaid expenses. Current liabilities includes sundry
creditors, bills payable, short- term loans, income-tax liability,
accrued expenses and dividends payable)
47

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2) ACID TEST RATIO:-
(2014) Acid Test Ratio = Quick Assets

Quick liabilities
=2,18,478.87/3,00,000.00
=0.72:1
(2015)Acid Test Ratio = Quick Assets
Quick liabilities
=2,18,478.87/3,00,000.00
=0.72:1
3) INVENTORY TURNOVER RATIO:-
(2014) Inventory Turnover Ratio =Cost of goods sold

Average Inventory
=14,13,230.00/5,22,140.00
= 2.70:1
(2015)Inventory Turnover Ratio =Cost of goods sold

Average Inventory
=12,58,855.00/2,82,667.00
= 4.45:1
(The average inventory is simple average of the opening and closing balances of
inventory. (Opening + Closing balances / 2). In certain circumstances opening
balance of the inventory may not be known then closing balance of inventory may
be considered as average inventory)
48

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4) DEBTORS TURNOVER RATIO:-
(2014) Debtor Turnover Ratio = Net Credit Sales

=14,13,230.00/58,630.00
=24.1 times
(2015)Debtor Turnover Ratio = Net Credit Sales

=15,20,410.00/58,630.00
=26 times
(Net credit sales consist of gross credit sales minus sales return. Trade debtor
includes sundry debtors and bill’s receivables. Average trade debtors (Opening +
Closing balances / 2))
(When the information about credit sales, opening and closing balances of trade
debtors is not available then the ratio can be calculated by dividing total sales by
closing balances of trade debtor).
49

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5) CREDITORS TURNOVER RATIO:-
(2014)Creditor Turnover Ratio =Net Credit Purchases

=12,17,570/1,50,000
=8.11 time
(2015)Creditor Turnover Ratio =Net Credit Purchases

=13,06,420/1,50,000
=8.70 time
6) TOTAL ASSET TURNOVER RATIO:-
(2014)Total asset turnover = Total Sales

Total Assets
=14,13,239.00/29,69,027.95
=0.476:1
(2015)Total asset turnover = Total Sales

Total Assets
=15,20,410.00/29,61,936.95
=0.513:1
(Net fixed assets represent the cost of fixed assets minus depreciation.)
50

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7) NET WORKING CAPITAL TURNOVER RATIO:-
(2014) Net working capital turnover ratio =Total Sales

Working Capital
=14,13,230.00/2,28,831.95
=6.17
(2015)Net working capital turnover ratio =Total Sales
Working Capital
=15,20,410.00/2,30,993.95
=6.58
(Working capital is represented by the difference between current assets and

current liabilities.)
8) DEBT EQUITY RATIO:-
(2014) Debt equity ratio = Outsider Funds (Total Debts)

=4,55,080.68/14,42,870.95
= 0.31:1
(2015)Debt equity ratio = Outsider Funds (Total Debts)

=4,47,989.68/14,35,779.95
= 0.31:1
51

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(The outsider fund includes long-term debts as well as current liabilities. The
shareholder funds include equity share capital, preference share capital, reserves
and surplus including accumulated profits. However fictitious assets like
accumulated deferred expenses etc should be deducted from the total of these items
to shareholder funds. The shareholder funds so calculated are known as net
worthof the business.)
9) GROSS PROFIT RATIO:-
(2014) Gross profit margin or ratio =Gross profit X 100

Net sales
=2,82,646/14,13,230*100
=20%
(2015)Gross profit margin or ratio =Gross profit X 100

Net sales
=2,61,555 /15,20,410×100
=17.20%
(Gross profit is the difference between sales and cost of goods sold.)
52

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10) NET PROFIT RATIO:-
(2014) Net profit margin or ratio =Earnings after tax X 100

Net Sales
=4,55,080.68/14,13,230×100
= 32.20%
(2015)Net profit margin or ratio =Earnings after tax X 100

Net Sales
=4,47,989.68/15,20,410×100
= 29.44%
53

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CHAPTER NO.5
FINDING
54

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FINDING:-
The center is not using techniques of cost accounting i.e. budgetary control,
standard costing.
Fixed assets turnover ratio of factoring indicates that the fixed assets of the center
are underutilized.
Total assets turnover ratio of center indicates that there is over investment in the
assets of the industry & the assets of the industry are underutilized,
Working Capital turnover ratio of the center indicates that there is excess
investment in Working Capital of the center.
The debtor’s turnover ratio of the center indicates that there is poor management of
receivables.
The Debt-Equity ratio of the center in higher than the standard which indicates
there is dominance of out spider on the affairs of the center.
Fixed assets to net worth indicates that fixed assets are partly financed by
proprietor fund.
55

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CHAPTER NO.6
BIBLOGRAPHY
56

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BIBLOGRAPHY
Book namepublisher
Analysis of fincial statements Nirali
Management accounting Tech max
Websites:
www.google.com
www.wickipidia.com
www.rediff.com
Reports:
Trading & profit & loss A/c &
Balance sheet &
Annual report of year 2014-15
On Mahavir Xerox Pvt. Ltd.
Indapur.
57

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Ratio Analysis - Project

BBA (Savitribai Phule Pune University)

Studocu is not sponsored or endorsed by any college or university

MAHAVIR XEROX PVT.LTD. INDAPUR

In the partial fulfillment of the degree of

Under the guidance of

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This is certify that, <SHINDE AKSHAY PRAKASH= student of TY

University Seat No:-

External Examiner:- Internal examiner:-

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SHINDE AKSHAY PRAKASH

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This is certify that, SHINDE AKSHAY PRAKASH. BBA Course,

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1 PROJECT INTRODUCTION 9-14

2.4 Advantages Of Ratio Analysis 19

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Ratio Analysis in <MAHAVIR XEROX PVT.LTD.=Was the project as a part of

The objective of the project was to understand the Ratio Analysis as

Financial Statement & Ratio Analysis plays an important role in every

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A good management decision should be both accomplished the goals that

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OBJECTIVES OF THE STUDY

• To know the financial performance of the Firm.

• To study the growth of an organization form financial dimensions.

• To provide the necessary basis for inter-period comparison ofMahavir

• To help the management in discharging its basis functions like

• To act as an index of the efficiency of an enterprise.

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Research can be defined as systemized effort to gain new knowledge. A

cons. Research methodology is a way to solve research in studying and solving

researcher himself or by others.

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<Research is the search for knowledge. It is scientific, systematic and logical

way of finding of truth. It has certain objectives.=

problem. Research is an organized enquiry by collection of the data and analyzing

formulation conclusion to establish new theories.

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SOURCES OF DATA COLLECTION:-

This method of the collection is firsthand information collection. This

to face interaction with concerned people.

Management by Prop. I.M.PANDEY and Financial Management by Prop. N. M.

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Ratio analysis is one of the popular tools of financial statement analysis. In

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MEANING & DEFINATION OF RATIO:

Ratios are relationships expressed in mathematical terms between figures

Ratios can be expressed in two ways:

If the quotient obtained is multiplied by 100, the unit of expression is termed

Accounting ratios are, therefore mathematical relationships expressed

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OBJECTIVES OF RATIO ANALYSIS:

1. To help in providing a part of information needed in the process of decision

2. To focus on facts on a comparative basis and facilitate drawing of

3. To throw light on the degree of efficiency in the management and the