Venky 2

A
PROJECT REPORT
ON
FINANCIAL STATEMENT ANALYSIS
WITH SPECIAL REFERENCE
TO
KESHORAM CEMENTS
BY
NEERATI SHRAVANI
(H. No: 2262-16-672-082)
In partial fulfilment of the requirement for the award of
MASTER OF BUSINESS ADMINISTRATION
ACADEMY OF MANAGEMENT STUDIES
(AFFILIATED TO OSMANIA UNIVERSITY)
HYDERABAD
(2016-2018)
DECLARATION
I hereby declare that this Project Report titled

FINANCIAL STATEMENT ANALYSISWITH SPECIALREFERENCE
submitted by me to the Department of Business Management, O.U, Hyderabad,
is a bonafide work undertaken by me and it is not submitted any other University
or Institution for the award of any degree diploma / certificate or published
any time before.
Name and Address of the Student Signature of the Student
Neerati Shravani
H. No: 2262-16-672-082
Attapur, Hyderabad
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ACKNOWLEDGEMENT
Firstly I would like to express our immense gratitude towards our college
“Academy for Management services”, which created a great platform to attain
profound technical skills in the field of MBA, thereby fulfilling our most cherished
goal.
I would thank all the finance department of Kesoram, especially Mr. Murthy,
Asst. Manager Finance for guiding me and helping me in successful completion of the
project.
I am very much thankful to our principle Dr. Mohammed Haseebullah, Mr.

Mohammed Babar Zamman (Associate Director) of “AMS COLLEGE” who had given
this wonderful opportunity.
I am also thankful to our project coordinator Prof. Syed Shahbaz Faruddin sir for
extending his cooperation in completing this project.
I would like thank my mentor Ms. Aamena Zeba(Assistant professor) who
helped me in successful completion of this project.
I convey thanks to all my faculty and beloved husband who helped me directly
or indirectly in bringing this project successfully.
Date:
Place: Hyderabad. NEERATI SHRAVANI
H. No: 2262-16-672-082
2
ABSTRACT
The project report entitled to “A study on financial performance of Kesoram

Cement, Basant nagar, Karimnagar (Dist). The main objective of the study is to analyse
the financial position of the company. It is the process of identifying the financial
strength and weakness of the firm properly establishing relationship in between balance
sheet, profit and loss account. The details regarding the history and finance of the
Kesoram Cement were collected through discussions with the company officers.
Secondary data based on the annual reports from 2013 – 2017
The various tools used for the study are ratio analysis, fund flow statement and
cash flow statement. Charts and tables are used for better understanding.
Through ratio analysis the company could understand the profitability, liquidity,
leverage, turnover positions of the company.
According to this project I came to know that from the analysis of financial
statements it is clear that Kesoram Cement Ltd is a satisfactory level of profits during
the period of study.
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TABLE OF CONTENTS
CHAPTERS PARTICULARS PAGE NO
CHAPTER 1 INTRODUCTION 6-10
CHAPTER 2 REVIEW OF LITERATURE 11-29
CHAPTER 3 INDUSTRY PROFILE 30-35
CHAPTER 4 COMPANY PROFILE 36-44
CHAPTER 5 DATA ANALAYSIS AND INTERPRETATION 45-64
CHAPTER 6 FINDINGS, SUMMARY AND CONCLUSIONS 65-69
CHAPTER 7 BIBLIOGRAPHY 70-71
LIST OF FIGURES
S.NO FIGURE NAME PAGE NO
1 CEMENT CONSUMPTION (3.1) 35
2 CEMENT PRODUCTION IN INDIA (3.2) 36
4
LIST OF TABLES
S.NO TABLE NAME PAGE
NO
1 Composition of Cement(Table 3.1) 33
2 Awards of Kesoram(Table 4.1) 40
3 Production(Table 4.2) 42
4 Comparative Income Statement of KESORAM CEMENT 46
Ending 1-4-2016 to 31-3-2017. RS.000

(Table 5.1)
Ending 1-4-2015 to 31-3-2016. RS.000

(Table 5.2)
Ending 1-4-2014 to 31-3-2015. RS.000

(Table 5.3)
Ending 1-4-2013 to 31-3-2014. RS.000

(Table 5.4)
8 COMPARATIVE BALANCE SHEET OF KESORAM CEMENT FOR THE 50

YEAR ENDING 31st MARCH 2016 to 2017, RS.000
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CHAPTER – 1
INTRODUCTION
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INTRODUCTION
Financial Statement Analysis is the process of reviewing and analysing a company's financial
statements to make better economic decisions. These statements include the income
statement, balance sheet, statement of cash flows, and a statement of changes in equity.
Financial statement analysis is a method or process involving specific techniques for evaluating
risks, performance, financial health, and future prospects of an organization.
It is used by a variety of stakeholders, such as credit and equity investors, the government, the
public, and decision-makers within the organization. These stakeholders have different
interests and apply a variety of different techniques to meet their needs. For example, equity
investors are interested in the long-term earnings power of the organization and perhaps the
sustainability and growth of dividend payments. Creditors want to ensure the interest and
principal is paid on the organizations debt securities (e.g., bonds) when due.
Common methods of financial statement analysis include fundamental analysis, DuPont

analysis, horizontal and vertical analysis and the use of financial ratios.
DuPont analysis uses several financial ratios that multiplied together equal return on equity, a
measure of how much income the firm earns divided by the amount of funds invested (equity)
Ratio analysis is the most common form of financial analysis. It provides relative measures of
the firm’s conditions and performance.
Horizontal analysis is used to evaluate the trend in the accounts over the years, while vertical
analysis also called a common size financial statement discloses the internal structure of the
firm. It indicates the existing relationship between sales and each income statement account. It
indicates the mix of assets that produce income and the mix of sources of capital, whether by
current or long term debt or by equity funding. When using the financial ratios, a financial
analysis makes two types of comparison.
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1.1 PROJECT/RESEARCH OBJECTIVES
 The main objective of the study is to evaluate the financial position & financial
performance of the company, with the help of financial statements
 To assess the earning capacity or profitability of the Kesoram Cement
 To assess the operational efficiency and managerial effectiveness
 To identify the reasons for change in profitability and financial position of the firm
 To determine the short term & long term liquidity of the funds as well as solvency
position of the firm
 To identify every source of income and understand the expenditure pattern of Kesoram
Cement
 To understand the elements of balance sheets contributing to the financial soundness of
the company
1.2 SCOPE OF THE STUDY
The study mainly attempts to analyze the financial performance of Kesoram Cement. The
financial authorities can use this for evaluating their performance in future, which will help to
analyze financial statements and help to apply the resources of the company properly for the
development of the company and to bring overall growth.
1.3 NEED & IMPORTANCE OF THE STUDY
 It helps in evaluating the operational efficiency of the company and the present profit-
earning capacity of the firm as a whole
 It helps us to know the reasons for relative changes in the financial position as a whole
 It helps in calculating the profitability changes and the effect of various non-economic and
economic factors of the firm
 It helps to know both the short-term liquidity position vis-a-vis working capital position,
and the long-term liquidity and solvency position of a firm
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 It also highlights the operating efficiency and the present profit-earning capacity of the firm
as a whole
 It indicates the trend of achievements and the working capital position of the firm
 It helps in forecasting, budgeting of the firm and helps in deciding future line of action
 It provides the intra-firm comparison among of the various components of the firm
 It helps in assessing the performance of the firm by the application of various ratios
 It guides or determine the dividend action & helps in decision making and control
1.4 RESEARCH METHODOLOGY
Research Design:
The Research Design that will be use is Descriptive and Exploratory Research.
Primary data: Data observed or collected directly from first-hand experience.

Secondary data: Published data and the data collected in the past or other parties are called
secondary data.
 Books
 Internet
 Journals
 Company Records
Data Collection:
Secondary data (financial statements from the year 2013-2017)
Data Analysis:
 Comparative Income statement & Balance sheet
 Common size income statement & Balance sheet
 Trend analysis is used for analysis
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1.5 LIMITATIONS OF THE STUDY
Through an attempt has been made to study the Financial Statement Analysis. Study may suffer
from the following limitations.
 The study is conducted for the purpose of fulfillment of the condition stipulated for
Completion of course, so the study may not fulfill the requirements of a detailed
investigation
 The study is conducted with the data available for the past years only from 2013-2017
 It does not consider the changes in prices level
 Quantity aspect is ignored in the financial analysis
 It may not give the accurate results in the absence of the absolute data
 The sample size is limited to 100 employees only, due to busy schedule of the
employees
 The Duration of project is limited to 30-45 days
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CHAPTER – 2
REVIEW OF LITERATURE
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REVIEW OF LITERATURE
2.1 Meaning of financial statement
Financial statements at least refer to the two statements which are prepared by a business
concern at the end of the year. They are:
 Income statement or trading and profit and loss account which is prepared by a business
concern in order to know the profit earned and loss sustained during a specific period.
 Position statement or balance sheet which is prepared by a business concern on a
particular date in order to know its financial position.
2.2 Nature of Financial Statement
Financial statements are prepared for the purpose of presenting a periodical review or
report by the management and deal with the state of investments in business and result
achieved during the period under review. They reflect a combination or recorded facts
accounting conventions and personal judgments and conventions applied affect them
materially. Form this it is clear that financial statements are affected by three things i.e.,
recorded facts, Accounting conventions and personal judgments. Only those facts which are
recorded in business books will be reflected in the financial statements.
The following points reflect truly the nature of financial statements of business entities.
 This are reports are summarized reviews about the performance, achievements and
weakness of the business.
 These are prepared at the end of the accounting period so that various parties can take
decision of their future actions in respect of the relationship with the business.
 The reliability of financial statements depends on the reliability of accounting data.

These statements cannot be said to be true and fare representatives of the strength of
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profitability of the concern if there are numerous frauds and defalcations in the
accounts.
 The figures in the financial statements are a combination of records facts. There may
be certain developments and factors which may be very important for the business are
not taken in to account as these are not recorded in the routine of accounting. More over
fixed assets are recorded at a historical value without taking in to consideration the
changes in their values due to price level fluctuations.
 These statements are prepared as per accounting concepts and conventions

 These financial statements are influence by the judgment of the accountant though he
is expected to be more objective in his approach. These judgments may be related to
valuation of inventory, depreciation of fixed assets and while making the distinction
between capital and revenue.
Importance of Financial Statements
The information given in the financial statements is very useful to a number of parties these are
the following
 Owners: - The Owners provide funds for the operations of a business and they want to
know whether their funds are being properly utilized or not. The financial statements
prepared from time to time satisfy their curiosity.
 Creditors: -Creditors (i.e.., suppliers of goods and services on credit, banker’s another
lender of money) want to know the financial position of a concern before giving loans or
granting credit. The financial statements help them in judging such position.
 Inventors: - Perspective inventors, who want to invest money in a firm would like to make
an analysis of financial statements of that firm to know how safe the reposed investment
will be.
 Employees: - Employees are interested in the financial position of a concern they serve,
particularly when payment of bonus depends upon the size of the profits earned, they would
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like to know that the bonus being paid to them is correct; so they become interested in the
preparation of correct profit and loss account.
 Government: - Central and State Governments are interested in the financial statements
because they reflect the earnings for a particular period for taxation. Moreover, these
financial statements are used for compiling statistics concerning business which, in turn
help on compiling national accounts
 Research Scholars: -The financial statements, being a mirror of the financial position on a
firm, are of immense value to the research scholar who wants to make a study into financial
operations of a particular firm.
 Consumers: -Consumers are interested in the establishment of good accounting control so

that cost of production may be reduced with the resultant reduction of the prices of good
they buy.
 Managers: - Management is the area of getting things done through others. This requires
that the subordinates are doing work properly. Financial statements are an aid in this
respect because they serve the manager in appraising the performance of the subordinates.
Actual results achieved by the employees can be measured against the budgeted
performance they were expected to achieve and remedial action can be taken if the
performance is not up to the mark.
 Limitations of Financial Statements
The following are the main limitations of the financial statements
 Interim and not final Reports: - Financial statements do not depict the exact position and
are essentially interim reports. The exact position can be only knowing if the business in
closed.
 Lack of Precision and Definiteness: - Financial statements may not be realistic because
these are prepared by the following certain basic concepts and conventions, For example,
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going concern gives us an idea that business will continue and assets are to be recorded at
cost but the book value at which the assets is shown may not be actually realizable.
 Lack of Objective Judgment: - Financial statements are influenced by the personal

judgment of the accountant; He may select any method for depreciation, Valuation of stock,
amortization of fixed assets and treatment of deferred revenue expenditure. Such judgment
if based on integrity and competency of the accountant will definitely affect the preparation
of the financial statements.
 Records Only Monetary Facts - Financial statements disclose only monetary facts, i.e..,
and those transactions are recorded in the books of accounts which can be measured in
monetary terms. Those transactions which cannot be measured in monetary terms such as,
conflict between production manager and marketing manager may be very important for a
business concern bur not recorded in the business books.
 Historical in Nature: - These statements are drawn after the actual happening of the events
they attempt to present a view of the past performance and have nothing to do with the
accounting for the future. Modern management is forward looking bur these statements do
not directly help them in making future estimates and taking decisions for the future.
 Artificial View: - These statements do not give a real and correct report about the worth of
the assets and their loss of value as these are shown on historical cost basis. Thus, these
statements provide artificial view as market or replacement value and the effect of the
changes in the price level are completely ignored.
 Scope of Manipulation: - These statements are sometimes prepared according to the need
of the whims of the management. A highly efficient concern may conceal its real
profitability by disclosing loss or minimum profit whereas an inefficient concern may
declare dividend by wrongly showing profit in the profit and loss account. For this under or
over valuation of inventory, over or under charge of depreciation, excessive or inadequate
provision for anticipated losses and other such manipulation may be resorted to. Window
dressing may also be resorted to in order to show better financial position of a concern than
its real position.
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 Inadequate Information: - there are many parties who are interested in the information
given in the financial statements but their objectives and requirements differ. The financial
statements as prepared under the provision of companies’ act, 1956, fail to meet the need of
all. These are mainly prepared to safeguard the interest of shareholders.
Profit and Loss Account
This account is prepared to calculator the net profit of the business. There are certain
items of incomes and expenses of the business which must be taken into consideration for
calculating net profit of the business. These are of indirect nature, i.e.., co concerning the whole
business and relating to various activities which are done by the business for the purpose of
making the goods available to the consumers. Indirect expenses may be selling and distribution
expenses, management expenses, financial expenses, extraordinary losses and expenses to
maintain the assets into working order. This account is prepared form nominal account and its
balance is transferred to capital account as the whole profit or loss will be that of the owner and
it wok increase or decrease his capital, the specimen proforma of this account is given as under.
Importance of Profit and Loss Account
 Information of Net Profile or Net Loss: One of the important objectives of maintaining
accounts is to see whether the business has earned profit or suffered loss during the
accounting period. Profit and Loss Account provides information regarding this important
objective because it gives information about the profitability or otherwise of the business.
 Comparison of current Profit with Past profit: Profit and Loss Account affords
comparison of the current year’s net profit with those of the past years. With this
comparison it can be ascertained whether net profit of the business is showing a rising trend
or downward trend.
 Comparison of Expenses: Comparison of the various expenses include in the Profit and
Loss Account with the expenses of the previous period helps in taking effective steps for
control of unnecessary expenses.
 Helpful in Preparation of Balance Sheet: Net profit or net loss disclosed by the Profit and
Loss Account is transferred to Capital Account and Capital Account appears on the
liabilities side of the Balance Sheet, without taking net profit net loss. The Balance Sheet
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cannot be completed, thus, profit and Loss Account helps in the preparation of the Balance
Sheet.
 Helpful in Future Growth of the Business: On the basis of profit figures of the current
and the previous period, estimates about the profit in the year to come can be made and
projection about the expansion of the business can be made.
Indirect expenses to be shown on the debit side of profit and loss account can also be
divided into two categories i.e.
(i) Operating expenses are those expenses which are incurred in a concern to run
the business efficiently and smoothly, Expenses incurred on administration,
selling and distribution come under this category.
(ii) Non-Operating expensesare those expenses which are not required to be

incurred for efficient and smooth operation of the business but still shown on
the debit side of profit and loss account. These include loss on the sale of fixed
assets, writing off tangible assets and intangible assets, financial expense etc.
Balance Sheet
A balance sheet is a statement prepared with a view to measure the financial position of
a business on a certain fixed date. The financial position of a concern is indicated by its assets
on a given date and its assets on a given data and its liabilities on that date. Excess of assets
over liabilities represent the capital and is indicative of the financial soundness of a company.
A Balance Sheet is also described as a ‘statement showing the source and application of
capital’. It is a statement and not an account and prepared from real and personal accounts. The
left hand side of the balance sheet may be viewed as a description of the sources from which
the business has obtained the capital with which that capital is invested on a specified date.
On the left hand side of the balance sheet, the several liability items describe how much
capital was obtained from trade creditors, form banks, from bill holders and other outside
parties; The Owner’s equity section shows the capital supplied by the owner.
Capital obtained from various sources has been invested according to management’s
best judgment of the optimum mix or combination of assets for the business. A certain fraction
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is invested in buildings; another fraction in stock, another fraction is retained as cash for
current needs of the business and so on. The assets side of the balance sheet, therefore, shows
the result of these management judgments’ as on the date of the balance sheet.
A properly drawn up balance sheet gives information relating to
1. The nature and value of assets.

2. The nature and extent of liabilities.
3. Whether the firm is solvent.
4. Whether the firm is overtrading.
If assets exceed the liabilities, the firm is solvent i.e.., able to pay its debts in full. A
business is, therefore, solvent by the amount of ownership capital in it, as it is the excess of
assets over liabilities, the last point i.e..; (IV) concerns the stability of the business. It the total
of the debts due to creditors (including bank overdraft) is greater than the liquid assets (i.e..,
cash, investments, bills etc.) the position of the firm may be financially unsound. Whether the
debts are being incurred without sufficient means of payment, the firm is said to be
overtrading, For the position to be quite sound, there should be some working capital i.e..,
some spare liquid assets available for current expenditure. It is not a wise policy to lock up the
entire in fixed assets. The concern may be solvent without being sound.
Characteristics of Balance Sheet
The following are the main Characteristics:
 It is prepared on a particular date and not for a particular period.

 It is prepared after the preparation of Trading and Profit & Loss Account.
 As assets must be equal to total liabilities, the two sides of the balance must have the same
total.
 It shows the financial position of a business as a going concern.
 It is a statement of assets (debit balances) and liability (credit balances) and no an account.
Information that Balance Sheet Convey to Outsiders
The following are the main items of information that the balance sheet convey to an outsider
 The nature and the value of assets.

 It shows the nature and extends of liabilities.
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 It shows the owner’s equity (i.e.., assets – liabilities =capital)
 It tells about credit worthiness and solvency of the firm.
 It reflects the liquidity of a firm.
 It reveals other information required to change in economic reserves and obligations.
Classification of Assets and liabilities
Assets:Assets are property and possession of a business. Stock, land, buildings, books debts,
cash, bills receivable are some examples of assets. The classification of assets depends on their
nature. The various types of assets are
 Fixed Assets: Those assets which are acquired and held permanently in this business and
are used for the purpose of earning profits are called fixed assets. Land and building,
machinery, furniture and fixtures are some examples of these assets.
 Current Assets: Those assets such as cash, debtors and stock that can be realized and
readily available to discharge liabilities within an operating cycle of one year are called
current assets.
 Tangible Assets; these are definite assets which can be seen, touched and have volume
such as machinery, cash, Stock, etc
 Fictitious Assets: These assets are fictitious in nature i.e... They are virtually not assets.
These are either the past accumulated losses or expenses which are incurred once in the life
of a business and are capitalized for the time being. Profit and loss account (debit balance),
organization expenses, discount on the issues of shares and advertisement expenses
capitalized for the times being are example of such assets.
 Intangible Assets: Those assets which cannot be seen touched and have no volume but
have are called intangible assets. Goodwill, patents, licenses and trademarks are example of
such assets but quite valuable to the undertaking, an intangible asset may not be fictitious.
If on account of the past goodwill purchased along with an existing concern, sales are
readily affected and profit is readily earned, the assets is certainly not fictitious though it is
intangible, However, if the amount of goodwill was paid in respect of a losing concern, the
assets would be factious.
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 Wasting Assets: Those assets such as mines, quarries etc. that become exhausted be
converted into cash quickly.
 Contingent Assets: It is an asset the existence, value and ownership of which is dependent
on the occurrence of a specified act. Suppose a firm has filed a suit for some specified
property now in possession of someone else. If the suit is decided in firm’s favors, the firm
will get the property. At the moment it is a contingent asset. Similar would be the position
of a patent applied for arising of a firm’s own research effort. Contingent liability in respect
of a contract for capital expenditure already entered into will give rise to an asset on
payment, at present it is only a contingent asset.
Liabilities: A liability is an amount which a business is legally bound to pay. It is a claim by

an outsider on the asset of a business. Liabilities may be classified into four categories:
 Fixed liabilities: These are those liabilities which are payable on the termination of the
business such as capital which is a liability to the owner.
 Long term liabilities: those liabilities which are not payable within the next accounting
period but will be payable within next five to ten years are called long term liabilities such
as debentures.
 Current liabilities: those liabilities which are payable out of current assets within the next
accounting period usually year or already due or called current liabilities such as
debentures.
 Contingent liabilities: A contingent liability is one which is not an actual liability but
which will become an actual one on the happening of some event which is uncertain. Thus
such liabilities have 2 characteristics:
 Uncertainty as to whether the amount will be payable to all, and

 Uncertainty about the amount involved. It is sufficient if the amount of such liability is
stated on the face of the balance sheet by way of a note unless there is a probability that
a loss will materialize. In that event it is no more a contingent liability and a specific
provision should be made therefore. Examples of such liabilities are
I) Claims against the companies not acknowledge as debts.
II) Uncalled liabilities on partly paid up shares.
III) Arrears of fixed cumulative dividend.
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Introduction
Methods used by interested parties such as investors, creditors, and management to
evaluate the past, current, and projected conditions and performance of the firm. Ratio analysis
is the most common form of financial analysis. It provides relative measure of the firm
conditions and performance. Horizontal analysis and vertical analysis are also popular firms.
Horizontal analysis is use to evaluate the trend in the accounts over the years, while vertical
analysis, also called a common size financial statement discloses the internal structure of the
firm. It indicates the existing relationship between sales and each Unicom statement account. It
indicates the mix of assets that produce income and the mix of sources o f capital, whether by a
current or long term debt or by equity funding. When using the financial ratios, a financial
analysis makes 2 types of comparisons.
Meaning of Analysis of Financial Statement
Analysis is the process of critically examining in details accounting information given

in the financial statement. For the purpose of analysis, individual items are studied, there
interrelationships with other related figures established, the data is sometimes rearranged to
have better understanding of the information with the help of different techniques or
relationship between component parts of financial statements to obtain a better understanding
firms position and performance. In the words of Myer, “Financial statement analysis is largely
a study of relationship among the various financial factors in a business as disclosed by a single
set of statement and a study of the trend of these factors as shown in a series of statements”.
The analysis of financial statements thus refers to the treatment of the information contained in
the financial statements in a way so as to afford a full diagnosis of the profitability and
financial position of the firm concerned. For this purpose, financial statements are classified
methodically, analyzed and compared with the figures of previous years or other similar firms.
Meaning of Interpretation
Analysis and interpretation are closely related. Interpretation is not possible without
analysis and without interpretation analysis has no value. Various account balances appear in
the financial statements. These account balances do not represent homogeneous data so it is
difficult to interpret them and draw some conclusions. This requires an analysis of the data in
the financial statements so as to bring some homogeneity to figures shown in the financial
statements. Interpretation is thus drawing of inference and stating what the figures in the
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financial statements really mean. Interpretation is dependent on interpreter himself. Interpreter
must have experience, understanding and intelligence to draw correct conclusions from the
analyzed data.
In other words of Kennedy and Memullar, “The analysis and interpretation of financial
statements are an attempt to determine the significance and meaning of the financial statements
data so that a forecast may be made of the prospects for future earnings, ability to pay interest
and get maturities (both current and long-term), and probability of a sound dividend policy “.
The most important objective of the analysis and interpretation of financial statements
are to understand the significance and meaning of financial statements data to know the
strength and weakness of a business undertaking so that a forecast may be made of the future
prospects of the business undertaking.
Objectives of Financial Analysis
Financial analysis is helpful in assessing the position and profitability of a concern.

This is done through comparison by ratios for the same concern over a period of years, or for
one concern against another, or for one concern against the industry as a whole (inter-firm
comparison), or for one concern against the predetermined standards, or for one departments of
the same concern (intra-firm comparison). Accounting ratios calculated for a number of years
show the trend of the change of position, that is weather the trend is upward or downward or
static, the ascertainment of trend helps us in making estimates for the future. For examples,
ratio of gross profit to sales for the last five years indicates a rising trend; we can safely
estimate that ratios of gross profit to sales for the next year will also arise. Keeping In view the
importance of accounting ratios the accountant should calculate the ratios in appropriate form,
as early as possible, for presentation to the management for managerial control.
In short, the main objectives of analysis of financial statements or to assess:
 The present and future earning capacity or profitability of the concern.

 The operational efficiency of the concern as a whole and of its various parts of
departments.
 The short term and long term solvency of the concern for the benefit of the debenture
holders and trade creditors.
 The comparative study in regarding to one firm with another firm or one department with
another department.
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 The possibility of developments in the future by making forecast and preparing budgets.
 The financial stability of a business concern.
 The real meaning and significance of financial data, and
 The long term liquidity of its funds.
Types of Financial Statement Analysis

Different types of financial statement analysis can be made on the basis of
1) The nature of the analyst and the material used by him.

2) The objectives of the analyst.
3) The modus operandi of the analysis.
Above three points is discussed one by one.
1) According to the nature of the analyst and the used by him:

On the basis, the financial analysis can be internal and external analysis:
a) Internal Analysis: It is made by those persons who have access to the books of accounts.
They are members of the organization. Analysis of financial statements or financial data for
managerial purpose is the internal type of analysis. The internal analyst can give more
reliable result than the external analyst because every type of information is at his disposal.
b) External analysis: It is made by those persons who are not connected with the enterprise.
They do not have access to the enterprise they do not have access to detailed record of the
company and have to depend mostly on published statements. Such type of analysis made
by investors, credit agencies, government agencies and research scholars.
2) According to the objectives of the analyst: - on the basis of, the analysis can
be long term and short term analysis.
a) Long term analysis: -This analysis is made in order to study the long term financial
stability, solvency and liquidity as well as profitability and earning capacity of a
business concern. The purpose of making such type of analysis is to know weather in a
long run the concern will be able to earn a minimum amount which will be sufficient to
maintain a reasonable rate of return on the investment so as to provide the funds
required for modernization, growth and development of the business and to meet its
23
costs of capital. This type of analysis helps the long term financial planning which is
essential for the continued success of a business.
b) Short-term analysis: -this is made to determine the short-term solvency, stability and
liquidity as well as earning capacity of the business. The purpose of this analysis is to
know weather in the short run a business concern will have adequate funds readily
available to meet its short-terms requirements and sufficient borrowing capacity to meet
contingencies in the near future. This analysis is made with reference to items of current
assets and current liability (working capital analysis) to have fairly sufficient
knowledge about the company’s current position which may be help full for short term
financial planning and long-term planning.
3) According to the modus operandi of the analysis: - on this basis, the analysis
may be horizontal analysis and vertical analysis.
a) Horizontal (or dynamic) Analysis: - This analysis is made toreview and analyze
financial statements of a number of years and therefore based on financial data taken
from several years. This is very useful for long term trend analysis and planning.
Comparative financial statement is an example of this type of analysis.
b) Vertical (or Static) analysis: - this analysis is made to review and analyze the financial
statements of one particular year only. Ratio analysis of the financial year relating to a
particular accounting year is an example of this type of analysis.
24
Techniques (Tools or Methods) of Analysis and Interpretation
The following techniques can be used in connection with analysis and interpretation of
financial statements:
1. Comparative Financial Statements (or Analysis)
2. Common Measurement Statements (or Analysis)
3. Trends Percentages Analysis
4. Funds Flow Statement
5. Net Working Capital Analysis
6. Cash Flow Statement

7. Ratio analysis
1) Comparative Financial Statements:
These statements are prepared in a way so as to provide time perspective to the

consideration of various elements of financial position embodied in such statements. This is
done to make the financial data more meaningful. The statements of two or more years are
prepared to show absolute data of two or more years, increases or decreases in absolute
data in value and in terms of percentages. Comparative statements can be prepared for
income statement as well as position statement or balance sheet.
i) Comparative Income Statement: -This statement discloses the net profit or net
loss resulting from the operations of business. Such statement shows the operating
results for a number of accounting periods so that changes in absolute data from one
period to another period may be stated in terms of absolute change or in terms of
percentage. This statement helps in deriving meaningful conclusions as it is very easy
to ascertain the changes in sales volume, administrative expenses, selling and
distribution expenses, cost of sales etc.
It is calculated as: -
Absolute change
------------------------ * 100
Base year
25
ii) Comparative Balance Sheet: -This statement prepared on two or more different
dates can be used for comparing assets and liabilities and to find out may increase or
decrease in these items. This facilitates the comparison of figures of two or more
periods and provides necessary information which may be useful in forming an opinion
regarding the financial condition as well as progressive outlook of the concern.
It is calculated as: -
Absolute change
------------------------ * 100
Base year
2) Common Measurement or Size Statement:

This statement indicates the relationship of various items (expressed as percentage of the
common item).
In the income statement the sale figure is taken as base and all other figures are expressed
as percentage of sales. Similarly, in the balance sheet the total of assets and liabilities is taken
as base and all other figures are expressed as a percentage of this total. The percentages so
calculated can be easily compared with the corresponding percentages in other periods and
meaningful conclusions can be drawn.
It is calculated as:-
Individual money amount

---------------------------------------- * 100
Total amount in statement
3) Trend Percentage Analysis: -
This analysis is an important tool of horizontal financial analysis. This method is immensely
helpful in making a comparative study of the financial statements of several years. Under this
method trend percentage are calculated for each item of the financial statements taking the
figure of base year as 100. The starting year is usually taken as the base year. The trend
percentages show the relationship of each item with its proceeding year’s percentages. These
26
percentages can also be presented in the form of index numbers direction. These trend ratios
may be compared with industry in order to know the strong or weak points of a concern. These
are calculated only for major items instead of calculating for all items in the financial
statement.
While calculating trend percentage, the following precautions may be taken:
(i) The accounting principles and practices must be followed constantly over
the period for which the analysis is made. This is necessary to maintain
consistency and comparability.
(ii) The base year selected should be normal and representative year.
(iii) Trend percentage should be calculated only for those items which have
logical relationship with one another.
(iv) Trend percentage should also be carefully studied after considering the
absolute figures on which these are based. Otherwise, they may give
misleading conclusions.
(v) To make the comparison meaningful, trend percentage of the current year
should be adjusted in the light of price level changes as compared to the
base year.
4) Funds Flow Statement: -This statement is prepared in order to know clearly the
various sources where from the funds are procured to finance the activities of a business
concern during the accounting period and also brings to highlight the uses to which these funds
are put during the staid period.
5) Cash Flow Statement: - This statement is prepared to know clearly the various items
of inflow and outflow of cash. It is an essential tool for short term financial analysis and is very
helpful in the evaluation of current liquidity of a business concern. It helps the business
executives of a business in the efficient cash management and internal financial management.
6) Net Working Capital: -This statement is prepared to know the net change in working
capital of the business between two specified dates. It is prepared from current asserts ant
current liabilities of the said dates to show the net increase or decrease in working capital.
27
7) Ratio Analysis: -It is done to develop meaningful relationship between individual items
or group of items usually shown in the periodical financial statements published by the
concern. An accounting ratio shows the relationship between the two inter-related accounting
figures as gross profit to sales, current assert to current liabilities, loaned capital to owned
capital etc. ratio should not be calculated between the two unrelated figures as sales and
discount on issue of shares, operating costs and equity capital etc., as it will not serve any
useful purpose,
Limitations of Financial Statement Analysis
Analysis of financial statements is a very important device but the person using this device
must keep in mind its limitations. The following are the main limitations of analysis:
1) Historical Nature of Financial Statement: The basic nature of these

statements is historical, i.e., relating to the past period. Past can never be a precise and
infallible index of the future and can never be hundred percent helpful for the future
forecast and planning.
2) No Substitute for Judgment: - Analysis of financial statement is a tool which can

be used profitably by an expert analyst but may lead to faulty conclusions if used by
unskilled analyst. The result of analyst, thus, should not be taken as judgments or
conclusions.
3) Reliability of Figure: -The reliability of analysis depends on reliability of the

figures of the financial statements under the security. The entire working of analysis
will be vitiated by manipulations in the income statement, window dressing in the
balance sheet. Questionable procedure adopted by the accountant for the valuation of
fixed assets and such other factors.
4) Single Year Analysis is Not Much Valuable and Useful: The analysis of
these statements relating to a single year only will have limited use and value. It will
28
not be advisable to depend fully on such analysis. Analysis should be extended over a
number of years so that the results may be compared to draw meaningful conclusions.
5) Results May Have Different Interpretation: The results or indications

derived from the analysis of these statements may be differently by different users. For
example, a high current ratio may suit banker, a supplier of goods or short -term lenders
but it may be index puff inefficiency of the management due to non-utilizations of
funds.
6) Change in Accounting Methods: Analysis will be effective if the figure derived

from the financial statements are comparable. Due to change in accounting methods
(i.e., depreciation method, or method of valuation stock), the figures of the current
period may be no comparable base, and then the whole exercise of analysis will become
futile and will be little value.
7) Pitfalls in Inter-Firm Comparison:When different firms are adopting different

procedures, records, objectives, policies and different items under similar headings,
comparison will become more difficult. If done, it will not provide reliable basis to
assess the performance, efficiency, profitability and financial condition of the compared
to industry as a whole.
8) Price Level Change Reduce the Validity of the Analysis: The continuous
and rapid changes in the value of money, in the present day economy, also reduce the
validity of analysis. Acquisition of assets at different levels of prices make comparison
useless as on meaningful conclusions can be drawn from a comparative analysis of such
items relating to several accounting periods.
Shortcoming of the Tool of Analysis: There are different tools of analysis (already discussed)
available to the analyst. Which tools are to be used in a particular situation depends on the
skills, training, intelligence and expertise of the analyst. If wrong tool is used, it may give
misleading results and may lead to wrong conclusions or inferences which may be harmful to
the interest of business
29
CHAPTER – 3
INDUSTRY PROFILE
30
INDUSTRY PROFILE
By stating production in 1914 the story of Indian cement is a stage of continuous growth.
Cement is derived from the Latin word “cementam”.
Egyptians and Romans found the process of manufacturing cement. In England during the first
century the hydraulic cement has become more versatile building material. Later on, Portland
cement was invented and the invention was usually attributed to Joseph ASP din of England.
India is the world’s 4th largest cement produced after china, Japan and U.S.A the south
industries have produced cement for the first time in 1904. The company was setup in Chennai
with the installed capacity of 30 tonnes per day. Since then the cement industry has progressing
leaps and bounds and evolved into the most basic and progressive leaps and 1950-51. The
capacity of production was only 3.3 million tonnes. So far annual production and demand have
been growing a pace at roughly 78 million tonnes with an installed capacity of 87 million
tonnes.
In the remaining two year of 8th plan an additional capacity of 23 million tonnes will actually
come up.
India is will endowed with cement grade limestone (90 billion tonnes) and coal (190 billion
tonnes). During the nineties it had a particularly impressive expansion with growth rate of 10%
The strength and vitality of Indian cement industry can be gauged by the interest shown and
supports given by World Bank. Considering the excellent performance of the industry in
utilizing the loans, achieving the objectives and targets. The World Bank examining the
feasibility of providing a third line of credit for further upgrading the industry in varying areas,
which will help the organization to get into the global market. With liberalization policies of
Indian government, the industry is posed for a high growth rates in nineties and the installed
capacity is expected to cross 100 million tonnes and production 90 million tonnes by 2020
31
The industry has fabulous scope for exporting its product to countries like the U.S.A., U.K.,
Bangladesh Nepal and other several countries. But there are not enough wagons to transport
cement for shipmen
Cement – the product:

The natural cement is obtained by burning and crushing the stones containing clayey, carbonate
of time and some amount of carbonate of magnesia. The natural cement is brown in colour and
its best variety is known as “ROMAN CEMENT”. It sets very quickly after addition of water.
It was in the 18thcentury that the most important advances in the development of cement were
which finally led to the invention of Portland cement.
In 1756, John Smeation showed that hydraulic lime which can resist the action of water can be
obtained not only from hard lime stone but from a limestone which contain substantial
proportion of clayey.
In 1796, Joseph Parker found that module of argillaceous limestone made excellent hydraulic
cement when burned in the usual manner. After burning the product was reduced to a powder.
This started the natural cement industry.
The common verity of artificial cement is known as normal setting cement or ordinary cement.
A mason Joseph Aspdn of Leeds of England invented this cement in 1824. He took out a patent
for this cement called it “PORTLAND CEMENT” because it had resemblance in its colour
after setting to a variety of sandstone, which is found abundance in Portland England.
The manufacture of Portland cement was started in England around 1825. Belgium and
Germany started the same 1855. America started the same in 1872 and India started in 1904.
The first cement factory installed in Tamil nadu in 1904 by South India limited and then
onwards a number of factories manufacturing cement were started.
Composition of Cement:
The ordinary cement contains two basic ingredients, namely, argillaceous and calcareous. In
argillaceous materials the clayey predominates and in calcareous materials the calcium
carbonate predominates.
32
A good chemical analysis of ordinary cement along with desired range of ingredients:
Table 3.1
Ingredients Percent Range
Lime (Cao) 62 62-67
Silica (sio2) 22 17-25
Alumina (Al2o3) 5 3-8
Calcium sulphate(CaSo4) 4 3-4
Iron Oxide (Fe2O3) 3 3-4
Magnesia(MgO) 2 1-3
Sulphur(S) 1 1-3
Alkalies 1 0.2-1
Industry Structure and Development:

With a capacity of 115 million tons of large cement plant, Indian cement industry is the fourth
largest in the world. However per capita consumption in our country is still at only 100Kgs
against 300Kgs of developed countries and offers significant potential for growth of cement
consumption as well as addition to cement capacity. The recent economic policy announcement
by the government in respect of housing, roads, power etc., will increase cement consumption.
Opportunities and Threats

In view of low per capita consumption in India, there is a considerable scope for growth in
cement consumption and creation of new capacities in coming years.The cement industry does
not appear to have adequately exploited cement consumption in rural segment where damaged
where damaged growth is possible.Landed cost of cement (with import duty) continues to be
higher than home market prices but with reduced import duty, increasing imports, may pose a
serious threat to the domestic cement industry.
33
Outlook:
India has a lot of potential for development in the infrastructure and construction sector and the
cement sector is expected to largely benefit from it. Some of the recent major government
initiatives such as development of 98 smart cities are expected to provide a major boost to the
sector. A large number of foreign players are also expected to enter the cement sector, owing to
the profit margins and steady demand. In future, domestic cement companies could go for
global listings either through the FCCB route or the GDR route. With help from the
government in terms of friendlier laws, lower taxation, and increased infrastructure spending,
the sector will grow and take India’s economy forward along with it
Fig 3.1 Fig 3.2
Statistics-
 India is the second largest producer of cement in the world trailing to China.
 ICRA projects demand growth for 2018-19 to marginally increase to four-five per cent.
 The housing sector is the biggest demand driver of cement, accounting for about 67 per
cent of the total consumption in India. The other major consumers of cement include
infrastructure at 13 per cent, commercial construction at 11 per cent and industrial
construction at 9 per cent.
34
 The total capacity of the cement industry in India is 435 million tonnes (MT) and the
growth of cement industry is expected to be 6-7 per cent in 2017 because of the
government’s focus on infrastructural development.
Risk and Concerns:

Slowdown of Indian economy or drop in growth rate of agriculture may adversely affect the
consumption. The recent increase in railway freight coupled with diesel / petrol price like will
increase the cost of production and distribution, as being bulky, cement is freight intensive
increase in Limestone royalty also adds to the cost of Production, which is considerably higher
than corresponding costs of many other developing countries.In our country there is a need to
undertake a massive Programme of house construction activity into the rural and urban areas. It
is impossible to construct a house without cement and steel, in other words, cement is one of
the basic construction materials and therefore it is one of the vital elements for the economic
development of the nation. India in spite of being the 4 th biggest producer of cement in the
world has still a very low per capital consumption of cement.
Kesoram is also conscious of its social responsibilities. Its rural and community development
programmes include adoption of two nearby villages, running an Agricultural Demonstration
Farm, a Model Dairy Farm etc., impressed by these activities, FAPCCI chose Kesoram to
confer the Award for “Best efforts of an industrial unit in the state to develop rural economy”
twice, in the year 1994 as well as in 1998. Kesoram also has to its credit the National Award
(Shri S.R Rangta Award for Social Awareness) for the year 1995-96, for the Best Rural
Development Efforts made by the company. In the same year Kesoram also got the FAPCCI
Award for “Best Workers Welfare” Kesoram got the first Prize for Mine Environment and
Pollution Control for year 1999 too, for the 3 rd year in succession in July, 2001 Kesoram
annexed the “Vana Mithra” Award from the Government of Andhra Pradesh.
35
CHAPTER – 4
COMPANY PROFIL
36
COMPANY PROFILE
Kesoram was founded in 1919 under the name of Kesoram Cotton Mills Ltd. From its humble
beginnings as a cotton textile mill in Calcutta, Kesoram expanded into the production of rayon.
Its first rayon plant was built in 1959, with a production capacity of 4,635 metric tons of rayon
yarn per year.
The spirit of entrepreneurship did not end there. Kesoram soon entered the tyres and cement
industries. A change of name was needed to reflect the company increasing portfolio of
businesses. So in 1986, it changed its name to Kesoram Industries Limited. Since then,
Kesoramoperations have grown from strength to strength. Its reputation is recognised today by
its listings on four global stock exchanges National Stock Exchange of India, Bombay Stock
Exchange, Calcutta Stock Exchange Association, and the Societe de la Bourse de Luxembourg.
KESORAM CEMENT is an OHSAS 08001 company and also joined the select brand of ISO
9001-2000 companies. Itisone among the industrial giants in the country today, serving the
nation on the industrial front Kesoram Industries Limited has a chequered and eventful history
is dating back to the Twenties when the Industrial House and Birla’s acquired it. with only a
Textile Mill under it banner in 1924, it grew from strength to strength and spread is its
activities to never fields like Rayon, Pulp, transparent paper, Spun pipes and Refractory, types,
Oil mill and Refinery Extraction.
Looking to the wide gap between demand and supply, of a vital commodity, cement, which
plays an important role in nation building the Government of India de-licensed the Cement
Industry in the year 1966 with a view to attract private entrepreneurs to augment the cement
product Kesoram rose to the occasion and decided to set up a few cement plants in the country.
The first cement plant of Kesoram with a capacity of 2.5 lack tonnes per annum based on dry
process, was established in1969 at Basanth Nagar a back ward area in Karimnagar District,
Telangana, and christened it Kesoram Cement
37
The second unit followed suit with added a capacity of 2 lack TPA in 1971. The plant was
further expanded to 9 lack by adding 205 lack tones in August, 1978, 1.13 lack tones in
January, 1987 and 0.87 lack tones in September, 1981.
4.1 Performance:
The Performance of Kesoram Cement industry had been outstanding achieving over cent per
cent capacity utilization although despite many odds like power cuts and which most 40% was
waste due to wagon shortage etc.
The company being a continuous process industry progress with industrial Performance. The
company had a glorious track record for the last 27 years in the industry.
4.2 Technology:
Kesoram Cement uses most modern technology and computerized control in the plant. A team
of dedicated and well-experienced exports manages the plant. The quality is maintained much
above the bureau of Indian Standards.
The raw materials used for manufacturing cement are:

• Lime stone
• Bauxite
• Hematite
• Gypsum
4.3 Environmental and social obligations

For environmental promotion and to keep-up the ecological balance, this section has
undertaken various social welfare programs by adopting ten nearly villages, organizing family
welfare camps, surgical camps, children immunization camps, animal health camps, blood
donation camps, distribution of fruit bearing trees and seeds, training for farmers etc., were
arranged.
Welfare and Recreation Facilities

• For the purpose of recreation facility 2 auditoriums were provided for plying in door
games, cultural function and activities like drama, music and dance etc.
38
• The industry has provided libraries and reading rooms. About 1000 books are available
in the library. All kinds of newspaper, magazines are made available.
• Canteen is provided to cater to the needs to the employees for supply snacks, tea, coffee
and meals etc.
• One English medium and one Telugu medium school are provided to meet the
educational requirements.
• The company has provided a dispensary with a qualified medical office and
paramedical staff for the benefit of the employees. The employees covered under ESI
hospital.
• Competitions in sports and games are conducted every year for August 15,
Independence Day and January 26, Republic day among the employees.
Electricity:
The power consumption per ton for cement has come down to 108 units against 113 units last
year, due to implementation of various energy saving measures. The performance of captive
power plant of this section continues to be satisfactory. Total power generation during the years
was 84 million units last year. This captive power plant is playing a major role in keeping
power costs with in economic levels.
The management has introduced various HRD programs for training and development and has
taken various other measures for the betterment of employee’s efficiency / performance.
The section has installed adequate air pollution control system and equipment and is ISO
14001 such as Environment Management System is under implementation.
39
Awards
Kesoram Cement bagged many prestigious awards including national awards for productivity,
technology, conservation and several state awards since 1984. The following are the important
awards.
Awards of Kesoram
Table 4.1
No Year Awards National state
1 1984 Best family planning in the state State
2 1985-86 National productivity award National
3 1986-87 Mines safety National
4 1987-88 Best industrial promotion / expansion State
5 1987-89 Productivity award State
6 1988-89 Best industrial promoter State
7 1988-89 Expansion effort in the state State
8 1988-89 Award for contribution given for rural economy State
9 1989 Best family planning effort State
10 1989 YajmanyaRatna& Best Management award State
11 1988-90 Community development programs State
12 1988-90 Energy conservation National
May day award of the government of Andhra

13 1991 State
Pradesh for beat management
Pundit Jawaharlal Nehru rolling trophy for best
14 1991 State
national productivity effort
India Gandhi memorial national award for
15 1993 State
excellence in industry(best management award)
16 1994 Best industrial rebellion award State
Rural development chief minister environment

17 1994-95 State
and mineral conservation award
40
18 1995 Best industrial rebellion award State
Best effort of an industrial unit to develop rural

19 1995-96 National
economy
Shri S.R Rungta award for social awareness for

20 1996 State
best rural development effort
21 1996 Best workers welfare State
22 1996-97 Best family welfare award State
First prize for mine environment and pollution

23 1999 State
control for the 3rd year in succession
Vanamithra award from Andhra Pradesh

24 2001 State
Government
Best management Award from Andhra Pradesh
25 2007 State
Government
"Excellence in rural development" from the
26 2008 Federation of Andhra Pradesh Chambers of State
Commerce, Andhra Pradesh
“Excellence in workers' welfare" from the
27 2010 Federation of Andhra Pradesh Chambers of State
Commerce, Andhra Pradesh
In the mines safety week celebrations, under the auspices of the Director General of Mines
Safety, KesoramBasanth Nagar limestone mines won 2 first prizes environment and pollution
control and safe drilling and blasting and 14 2nd prizes for overall performance, productivity,
operation and maintenance of machines publicity / propaganda etc.
Production
Last 20 years production of Kesoram Cements industry at Basanth Nagar,
41
Table 4.2
Year Production in tonnes
1992-93 749797
1993-94 761581
1994-95 805921
1995-96 760708
1996-97 550254
1997-1998 601453
1998-99 643307
1999-00 643663
2000-01 748258
2001-02 685596
2002-03 731177
2003-04 784555
2004-2005 782383
2005-2006 731049
2006-07 746474
2007-08 688305
2008-09 777092
2009-10 692424
2010-11 727447
2011-12 735012
2012-13 1046166
2013-14 1167576
2014-15 1007734
2015-16 1080028
Note :production including internal consumption also cement and clinker

production were lower than the previous year mainly because of lower dispatches
42
of cement due to recession prevailing in cement industry with slowdown in
demand during the year under review. This section had to curtail production due
to accumulation of large stocks of clinker. However, sales realization during the
second half of the year has improved and it is hoped that prices will stabilize at
some reasonable levels.
DIRECTORS OF KESORAM INDUSTRIES LIMITED
CHAIRMAN
Smt. Basant Kumar Birla
BOARD OF DIRECTORS
1) Smt. Manjushree Khaitan, Executive Vice Chairperson
2) Shri.AmitabhaGhosh
3) Shri.VinaySah
4) Shri. Lee SeowChuan
5) Shri.Kamal Chand Jain
6) Shri.Sudip Banerjee
7) Shri.Steven John Derkey
8) Shri.GautamGanguli (Company Secretary)
9) Shri.PesiKushruChoksey
Auditors
Messrs Price Wasterhouse
Subsidiary Companies of Kesoram Industries

1) Bharat General & Textile Industries Limited
2) KICM Investment Limited
3) Assam Cotton Mills Limited
4) Softshree Estates Limited
43
The investment inventory constitutes the most significant part of current assets / working
capital in most of the undertakings. Thus, it is very essential to have proper control and
management inventories.The purpose of inventory management is to ensure availability of
materials in sufficient quantity as and when required and also to minimize investment in
inventories.
44
CHAPTER – 5
DATA ANALYSIS AND
INTERPRETATION
45
TABLE 5.1
Comparative Income Statement of KESORAM CEMENT For the year
Ending 1-4-2016 to 31-3-2017. RS.000
Absolute
Particulars 2016 2016 % Change
Change
A) Income
Sales 789.2 1723.1 933.9 1.2
(_) Excise Duty 0.0 886.9 886.9
Net Sales 789.2 836.2 47.0 0.1
other income 32.4 18.5 -13.9 -0.4
Stock adjustments 2.0 9.1 7.2 3.7
Total Income A 823.6 863.8 40.2 0.0
B) Expenditure
Material Consumed 390.3 411.7 21.4 0.1
Power and fuel cost 5.7 5.8 0.1 0.0
Employee expenses 69.9 77.1 7.2 0.1
Total Operating Expenses 465.9 494.6 28.6 6.1
Other manufacturing exp 0.0 0.0
Selling and distribution exp 0.0 0.0
Financial Expenses 107.1 108.6 1.5 0.0
Miscexp written off 0.0 0.0 0.0
Total Expenditure B 573.0 603.2 30.1 0.1
Surplus/Deficit(A-B) 218.1 242.1 24.0 0.1
INTERPRETATION:
 Sales volume is increased by 1.2% during the year 2014.
 Other income is decreased by 0.4%.
 Increases in sales are highlighting increase in Material consumption, selling cost,
miscexp written off.
 Financial expenses increased by 0.013%.
 Surplus is decreased by 0.1%
46
TABLE 5.2
Ending 1-4-2015 to 31-3-2016. RS.000
Absolute
Change
A) Income
Sales 668.7 789.2 120.5 0.2
(_) Excise Duty 0.0 0.0 0.0
Net Sales 668.7 789.2 120.5 0.2
other income 26.3 32.4 6.2 0.2
Stock adjustments 3.6 2.0 -1.7 -0.5
Total Income A 698.5 823.6 125.0 0.2
B) Expenditure
INTERPRETATION:
 Other income is increased by 0.2%
 Increases in sales are highlighting increase in Material consumption, employee cost,
while financial expenses, misc. exp written off.
 Surplus has increased to some extent which adds to financial stability.
47
TABLE 5.3
Ending 1-4-2014 to 31-3-2015. RS.000
Absolute
Change
A) Income
Sales 684.4 668.7 -15.8 0.0
(_) Excise Duty 0.0 0.0 0.0
Net Sales 684.4 668.7 -15.8 0.0
other income 25.7 26.3 0.5 0.0
Stock adjustments -3.4 3.6 7.1 -2.0
Total Income A 706.7 698.5 -8.2 0.0
B) Expenditure
Financial Expenses 97.7 95.3 -2.4 0.0
Surplus/Deficit(A-B) 209.8 180.3 -29.5 -0.1
INTERPRETATION:
 Sales volume is decreased by 0.023% during the year 2015.
 Other income is increased by 0.02%.
 Decrease in sales are highlighting decline in some of the associated expenditure
compare to last year.
 Surplus is decreased by 0.1%.
TABLE 5.4
48
Ending 1-4-2013 to 31-3-2014. RS.000
Absolute
Change
A) Income
Sales 581.5 684.4 102.9 0.2
(_) Excise Duty 0.0 0.0 0.0
Net Sales 581.5 684.4 102.9 0.2
other income 17.1 25.7 8.6 0.5
Stock adjustments 4.9 -3.4 -8.3 -1.7
Total Income A 603.6 706.7 103.2 0.2
B) Expenditure
INTERPRETATION:
 Other income is increased by 0.5%.
 Increases in sales are highlighting increase in Material consumption, employee cost,
while other manufacturing expenses, selling expenses, misc.exp written off.
 Surplus is increased by 0.5%.
49
COMPARATIVE BALANCE SHEET OF KESORAM CEMENT FOR THE YEAR
ENDING 31st MARCH 2016 to 2017, RS.000
% of
INCREASE/
PARTICULARS 31/03/2016 31/03/2017 INCREASE/
DECREASE
DECREASE
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
Share Capital 34500000 34500000 0 0
Reserves & Surplus 768783995 826961437 58177442 7.6
LOAN FUNDS
Secured Loans 609933051 555991459 -53941592 -8.8
Unsecured Loans 47324672 123979573 76654901 162.0
TOTAL 1460541718 1541432469 80890751 5.5
APPLICATION OF FUNDS
FIXED ASSETS
Gross Block 541650837 624427126 82776289 15.3
Less: Depreciation 73006804 99440569 26433765 36.2
Net Block 468644033 524986557 56342524 12.0
INVESTMENTS 54988654 168101191 113112537 205.7
CURRENT ASSETS LOANS &

ADVANCES
Inventories 508179559 578425269 70245710 13.8
Sundry Debtors 766647618 648167571 -118480047 -15.5
Cash & Bank Balances 21728135 19515628 -2212507 -10.2
Loans & Advances 79937438 118081570 38144132 47.7
Less: 1376492750 1364190038 -12302712 -0.9
CURRENT LIABILITIES &

PROVISIONS
Current Liabilities 410623831 391151250 -19472581 -4.7
Provisions 29000000 27005656 -1994344 -6.9
NET CURRENT ASSETS 936868919 946033132 9164213 1.0
DEFERRED TAX LIABILITY (Net) NIL -97712415
MISCELLANEOUS
40112 24004 -16108 -40.2
EXPENDITURE
TOTAL 1460541718 154432469 -1306109249 -89.4
INTERPRETATION:
 The comparative Balance Sheet of the company reveals that during the year 2014 there has
been a decrease in current assets of Rs. 9164213i.e., 0.89%. While current liabilities have
decreased by Rs. 19472581 i.e., 4.74%. This fact depicts that the company is suffering with
inadequate working capital to meet its short-term obligations.
 While there is increase in fixed assets value to the extent of Rs. 82776289 to that of current
liabilities. This fact depicts that the company has diverted its loans in the form of working
capital to meet its short-term obligations.
 On the whole the overall financial position of the company is satisfactory.
50
ENDING 31st MARCH 2016 to 2015, RS.000
INCREASE/ % of INCREASE/
PARTICULARS 31/03/2016 31/03/2015
DECREASE DECREASE
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
Share Capital 34500000 71000000 36500000 105.8
LOAN FUNDS
Secured Loans 555991459 868106038 312114579 56.1
Unsecured Loans 123979573 51584509 -72395064 -58.4
DEFFERED TAX LIABILITY 97712415 122772126 25059711 25.6
TOTAL 1639144884 2149671445 510526561 31.1
FIXED ASSETS
Gross Block 624427126 797011304 172584178 27.6
Net Block 524986557 666610644 141624087 27.0
INVESTMENTS 168101191 52497262 -115603929 -68.8

ADVANCES
Inventories 578425269 714978242 136552973 23.6
Sundry Debtors 648167571 1024629827 376462256 58.1
Loans & Advances 118081570 189341570 71260000 60.3
Less: 1364190038 1943446238 579256200 42.5

PROVISIONS
Current Liabilities 391151250 601369325 210218075 53.7
Provisions 27005656 71521570 44515914 164.8
MISCELLANEOUS
24004 7896 -16108 -67.1
EXPENDITURE
TOTAL 1639144884 2149671445 510526561 31.1
INTERPRETATION:
been an increase in current assets of Rs. 324522211i.e., 34.3%. While current liabilities also
increased by Rs.210218075 i.e., 53.74%. This fact depicts that the company is having adequate
working capital to meet its short-term obligations.
liabilities. This fact depicts that the company has diverted its cash & bank balances to acquire
these fixed assets.
 On the whole the overall financial position of the com
51
ENDING 31st MARCH 2015 to 2014, Rs.000
% of
INCREASE/
PARTICULARS 31/03/2015 31/03/2014 INCREASE/D
DECREASE
ECREASE
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
Share Capital 71000000 34500000 -36500000 -51.4
LOAN FUNDS
Secured Loans 868106038 1280091497 411985459 47.5
Unsecured Loans 51584509 48119721 -3464788 -6.7
TOTAL 2149671445 2936157785 786486340 36.6
FIXED ASSETS
Gross Block 797011304 1252543214 455531910 57.2
Net Block 666610644 1056517020 389906376 58.5
INVESTMENT 52497262 171566882 119069620 226.8

ADVANCES
Inventories 714978242 944109125 229130883 32.0
Sundry Debtors 1024629827 1074534824 49904997 4.9
Cash & Bank Balances 14496599 97153728 82657129 570.2
Loans & Advances 189341570 350191763 160850193 85.0
Less: 1943446238 2465989440 522543202 26.9

PROVISIONS
Provisions 71521570 110080953 38559383 53.9
MISCELLANEOUS
7896 256563 248667 3149.3
EXPENDITURE
TOTAL 2149671445 2936157785 786486340 36.58
INTERPRETATION:
been an increase in current assets of Rs. 437261977i.e., 34.4%. While current liabilities also
increased by Rs.46721842 i.e., 7.74%. This fact depicts that the company is having adequate
these fixed assets.
52
ENDING 31st MARCH 2014 to 2013, Rs.000
% of
INCREASE/
PARTICULARS 31/03/2014 31/03/2013 INCREASE/D
DECREASE
ECREASE
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
Share Capital 34500000 34500000 0 0
LOAN FUNDS
Secured Loans 1280091497 1792249027 512157530 40.0
Unsecured Loans 48119721 44588001 -3531720 -7.3
TOTAL 2936157785 4312622821 1376465036 46.9
FIXED ASSETS
Gross Block 1252543214 1785079415 532536201 42.5
Net Block 1056517020 1528841742 472324722 44.7
INVESTMENTS 171566882 239339398 67772516 39.5
ADVANCES
Inventories 944109125 1199191291 255082166 27.0
Sundry Debtors 1074534824 2231501170 1156966346 107.7
Loans & Advances 350191763 574515948 224324185 64.1
Less: 2465989440 4077769905 1611780465 65.4
PROVISIONS
Provisions 110080953 127080953 17000000 15.4
MISCELLANEOUS
256563 13148859 12892296 5025.0
EXPENDITURE
TOTAL 2936157785 4312622821 1376465036 46.9
INTERPRETATION:
been an increase in current assets of Rs.823475502i.e., 48.2%. While current liabilities also
increased by Rs.1611780465i.e., 65.4%. This fact depicts that the company is having adequate
 While there is increase in fixed assets value to the extent of Rs.472324722to that of current
these fixed assets.
 On the whole the overall financial position of the company is satisfactory.
53
Common Size Income Statement of KESORAM CEMENT For the year
Ending 1-4-2016 to 31-3-2017.
RS.000
Particulars 2016 % 2017 %
A) Income
Sales 789.2 95.8 1723.1 199.5
(_) Excise Duty 0.0 0.0 886.9 102.7
Net Sales 789.2 95.8 836.2 96.8
other income 32.4 3.9 18.5 2.1
Total Income A 823.6 863.8
B) Expenditure
Other manufacturing exp 0.0 0.0 0.0 0.0
Selling and distribution exp 0.0 0.0 0.0 0.0
Miscexp written off 0.0 0.0 0.0 0.0
Total Expenditure B 573.0 603.2
Surplus/Deficit(A-B) 218.1 242.1
INTERPRETATION:
 Sales volume has increases from 2016-2017, giving its effects on the company
revenues.
 Other income has decreased by 13.91.
 Total operating expenses has increases by 28.7 in the year 2017
 Financial expenses have been increased by 1.48.
54
Ending 1-4-2015 to 31-3-2016.
RS.000
A) Income
Sales 668.7 95.7 789.2 95.8
(_) Excise Duty 0.0 0.0 0.0 0.0
Net Sales 668.7 95.7 789.2 95.8
other income 26.3 3.8 32.4 3.9
B) Expenditure
INTERPRETATION:
 Sales volume has increases from 2015-2016, giving its effects on the company
revenues.
 Other income also increases by 6.19.
 Total operating expenses has increases by 69.2 in the year 2016.
 Financial expenses have been increased by 11.8.

Ended 1-4-2014 to 31-3-2015
RS.000
55
A) Income
Sales 684.4 96.8 668.7 95.7
(_) Excise Duty 0.0 0.0 0.0 0.0
Net Sales 684.4 96.8 668.7 95.7
other income 25.7 3.6 26.3 3.8
Stock adjustments -3.4 -0.5 3.6 0.5


B) Expenditure
INTERPRETATION:
 Sales volume has decreased from 2014-2015, giving its effects on the company
revenues.
 Other income also decreased by 0.53.
 Total operating expenses has increases by 1.36 in the year 2015.
 Financial expenses have been decreased by 2.37.

Ended 1-4-2013 to 31-3-2014
RS.000
56
A) Income
Sales 581.5 96.4 684.4 96.8
(_) Excise Duty 0.0 0.0 0.0 0.0
Net Sales 581.5 96.4 684.4 96.8
other income 17.1 2.8 25.7 3.6
Stock adjustments 4.9 0.8 -3.4 -0.5


B) Expenditure
INTERPRETATION:
Sales volume has increases from 2013-2014, giving its effects on the company revenues.
 Other income also increases by 0.3%.
 Total operating expenses has increases by 1.09% in the year 2013.
 Financial expenses have been decreased by 2.37%
COMMONSIZE BALANCE SHEET

KESORAM CEMENT FOR THE YEAR ENDING 31st MARCH 2014 to 2015, Rs.000
% OF % OF
PARTICULARS 31/03/2014 31/03/2015
CHANGE CHANGE
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
57
Share Capital 34500000 2.36 34500000 2.1
Reserves & Surplus 768783995 52.63 826961437 50.45
LOAN FUNDS
Secured Loans 609933051 41.76 555991459 33.92
Unsecured Loans 47324672 3.24 123979573 7.56
TOTAL 1460541718 100 1639144884 100
FIXED ASSETS
Gross Block 541650837 37.09 624427126 38.09
Net Block 468644033 32.09 524986557 32.03
INVESTMENTS 54988654 3.76 168101191 10.26

ADVANCES
Inventories 508179559 34.79 578425269 35.29
Sundry Debtors 766647618 52.49 648167571 39.54
Cash & Bank Balances 21728135 1.49 19515628 1.19
Loans & Advances 79937438 5.47 118081570 7.2
Less: 1376492750 94.25 1364190038 83.23

PROVISIONS
Current Liabilities 410623831 28.11 391151250 23.86
Provisions 29000000 1.99 27005656 1.65
NET CURRENT ASSETS 936868919 64.15 946033132 57.72
MISCELLANEOUS EXPENDITURE 40112 0 24004 0
TOTAL 1460541718 100 1639144884 100
INTERPRETATION:
 An analysis of current assets of both the years shows that the percentage of Current Assets to
that of Total Assets is 94% in the year 2015 and reduced to 83% in the year 2014 and in the
both the years the company is having adequate working capital. The percentages of Current
Liabilities are less than that of Current Assets of both the years, the Inventories share greater
value in Current Assets.An analysis of Current Liabilities to that of Shareholders Funds shows
that the percentage of debt is less than the equity that is a good sign i.e., the company’s
solvency is sound.
 To run the company, it has to depend on working capital. That is the most of working capital
procurement has been done from the profit earned and Reserves maintained by the Company.
Company’s reserve capacity is very good. All the fixed assets are well utilized and investments
are made regularly.

% OF % OF
PARTICULARS 31/03/2015 31/03/2016
CHANGE CHANGE
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
58
Share Capital 34500000 2.10 71000000 3.30
LOAN FUNDS
Secured Loans 555991459 33.92 868106038 40.38
Unsecured Loans 123979573 7.56 51584509 2.40
DEFFERED TAX LIABILITY 97712415 5.96 122772126 5.71
TOTAL 1639144884 100.00 2149671445 100.00
FIXED ASSETS
Gross Block 624427126 38.09 797011304 37.08
Less: Depreciation 99440569 6.07 130400660 6.07
Net Block 524986557 32.03 666610644 31.01
INVESTMENTS 168101191 10.26 52497262 2.44
ADVANCES
Inventories 578425269 35.29 714978242 33.26
Sundry Debtors 648167571 39.54 1024629827 47.66
Loans & Advances 118081570 7.20 189341570 8.81
Less: 1364190038 83.23 1943446238 90.41
PROVISIONS
Provisions 27005656 1.65 71521570 3.33
MISCELLANEOUS
24004 0.00 7896 0.00
EXPENDITURE
TOTAL 1639144884 100.00 2149671445 100
INTERPRETATION:
value in Current Assets.
 An analysis of Current Liabilities to that of Shareholders Funds shows that the percentage of
debt is less than the equity that is a good sign i.e., the company’s solvency is sound. To run the
company, it has to depend on working capital. That is the most of working capital procurement
has been done from the profit earned and Reserves maintained by the Company.
 Company’s reserve capacity is very good. All the fixed assets are well utilized and investments
are made regularly.

KESORAM CEMENT FOR THE YEAR ENDING 31st MARCH 2015 to 2016 Rs.000
% OF % OF
PARTICULARS 31/03/2015 31/03/2016
CHANGE CHANGE
SOURCES OF FUNDS
59
SHARE HOLDERS FUNDS
Share Capital 71000000 3.30 34500000 1.18
LOAN FUNDS
Secured Loans 868106038 40.38 1280091497 43.60
Unsecured Loans 51584509 2.40 48119721 1.64
TOTAL 2149671445 100.00 2936157785 100.00
FIXED ASSETS
Gross Block 797011304 37.08 1252543214 42.66
Net Block 666610644 31.01 1056517020 35.98
INVESTMENTS 52497262 2.44 171566882 5.84
CURRENT ASSETS LOANS & ADVANCES
Inventories 714978242 33.26 944109125 32.15
Sundry Debtors 1024629827 47.66 1074534824 36.60
Loans & Advances 189341570 8.81 350191763 11.93
Less: 1943446238 90.41 2465989440 83.99
CURRENT LIABILITIES & PROVISIONS
Provisions 71521570 3.33 110080953 3.75
MISCELLANEOUS EXPENDITURE 7896 0.00 256563 0.01
TOTAL 2149671445 100.00 2936157785 100
INTERPRETATION:
are made regularly.

% OF % OF
PARTICULARS 31/03/2016 31/03/2017
CHANGE CHANGE
SOURCES OF FUNDS
60
SHARE HOLDERS FUNDS
Share Capital 34500000 1.18 34500000 0.80
LOAN FUNDS
Secured Loans 1280091497 43.60 1792249027 41.56
unsecured Loans 48119721 1.64 44588001 1.03
TOTAL 2936157785 100.00 4312622821 100.00
FIXED ASSETS
Gross Block 1252543214 42.66 1785079415 41.39
Net Block 1056517020 35.98 1528841742 35.45
INVESTMENTS 171566882 5.84 239339398 5.55
CURRENT ASSETS LOANS & ADVANCES
Inventories 944109125 32.15 1199191291 27.81
Sundry Debtors 1074534824 36.60 2231501170 51.74
Loans & Advances 350191763 11.93 574515948 13.32
Less: 2465989440 83.99 4077769905 94.55
CURRENT LIABILITIES & PROVISIONS
Provisions 110080953 3.75 127080953 2.95
MISCELLANEOUS EXPENDITURE 256563 0.01 13148859 0.30
TOTAL 2936157785 100.00 4312622821 100.00
INTERPRETATION:
are made regularly.
61
TREND ANALYSIS:
BALANCE SHEET SHOWING TRENDS IN PERCENTAGES OF KESORAM CEMENT

FOR THE YEAR ENDING 31st MARCH 2012 TO 2016, Rs.000
31/03/201 31/03/201 31/03/201 31/03/201 31/03/201
PARTICULARS
3 4 5 6 7
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
Share Capital 100 100 205.79 100 100
Reserves & Surplus 100 107.56 134.78 182.2 291.12
LOAN FUNDS
Secured Loans 100 91.16 142.32 209.87 293.84
Unsecured Loans 100 261.98 109 101.68 94.21
DEFFERED TAX LIABILITY 0 0 0 0 0
TOTAL 100 112.23 147.18 201.03 295.27
FIXED ASSETS
Net Block 100 112.02 142.24 225.44 326.22
INVESTMENTS 100 305.7 95.46 312 435.25
CURRENT ASSETS LOANS
& ADVANCES
Inventories 100 113.82 140.69 185.78 235.98
Sundry Debtors 100 84.55 133.65 140.16 291.07
Cash & Bank Balances 100 89.81 66.72 447.13 333.95
Loans & Advances 100 147.72 236.86 438.08 718.71
Less: 100 99.1 141.19 179.15 296.24
PROVISIONS
Current Liabilities 100 95.25 146.45 157.83 345.67
Provisions 100 93.12 246.63 379.59 438.21
NET CURRENT ASSETS 100 100.99 131.62 182.29 270.18
MISCELLANEOUS
100 59.84 19.68 639.62 32780.36
EXPENDITURE
TOTAL 100 112.23 147.18 201.03 295.27
Note*: Assuming the values of base year i.e., 2011 as 100%.
62
INTERPRETATION:
 As per the above table of Trend Percentages of Balance Sheet of Kesoram Cements Ltd.
the position of Current Assets is improved year after year. During the year 2013 the
Current Assets were at 99.1%, but it gradually increased and in the year 2016 it is
296%. This increasing trend is due to increase in the value of Cash & Bank Balances
and Loans & Advances
FIXED ASSETS:
 s per the above table of Trend Percentages of Balance Sheet of Kesoram Cement there
is a continuous increase in the value of Fixed Assets. During the year 2015 it is at 326%
which is a positive sign.
INVESTMENTS:
 As per the above table of Trend Percentages of Balance Sheet of Kesoram Cement there
is a Continuous trend. But during the year 2010 its value reduced insignificantly.
However Company was able to cope this situation and the Fixed Assets showed an
increasing trend thereafter and during the year 2015 it is at 435%.
CURRENT LIABILITIES:
 As per the above table of Trend Percentages of Balance Sheet of Kesoram Cement there
is a Continuous trend. From the year 2011 to 2015 there is increase in Current
Liabilities that indicates the Companies Credit Worthiness, its reputation in the credit
market.
Conclusion:
Thus, the overall position, working capital utilization etc., indicates that the firm is in a satisfactory
level.
63
CHAPTER – 6
FINDINGS,
SUGGESTIONS,
CONCLUSIONS
&
BIBLIOGRAPHY
64
FINDINGS
2016-17
 The comparative Balance Sheet of the company reveals that during the year 2012 there
has been a decrease in current assets of Rs.12302712 i.e.0.89%. While current liabilities
have decreased by Rs.19472581 i.e.4.74%. This fact depicts that the company is
suffering with inadequate working capital to meet its short-term obligations.
 While there is increase in fixed assets value to the extent of Rs.82776289 to that of
current liabilities. This fact depicts that the company has diverted its loans in the form
of working capital to meet its short-term obligations.
 On the whole the overall financial position of the company is satisfactory.
2015-16
has been an increase in current assets of Rs.579256200 i.e., 42%. While current
liabilities also increased by Rs.210218075 i.e., 53.74%. This fact depicts that the
company is having adequate working capital to meet its short-term obligations.
current liabilities. This fact depicts that the company has diverted its cash & bank
balances to acquire these fixed assets.
2014-15
has been an increase in current assets of Rs.522543202 i.e., 26%. While current
liabilities also increased by Rs.46721842 i.e., 7.74%. This fact depicts that the company
is having adequate working capital to meet its short-term obligations.
65
2013-2014
has been an increase in current assets of Rs. 1611780465 i.e., 65%. While current
liabilities also increased by Rs.771304963 i.e.119%. This fact depicts that the company
is having adequate working capital to meet its short-term obligations.
On the whole the overall financial position of the company is satisfactory
66
SUGGESTIONS
The study is to offer some suitable suggestions on the basis of studying and analysing the
financial statements to improve the financial performance of “Kesoram Industries pvt.ltd
 The Cement industry is huge and has huge potential for growth; the company should try
and revamp its operations.
 The management needs to increase the stock.It can be done by increasing production,
achieve economies of scale and hence increase market penetration.
 It is suggested for the company to control over the current liabilities.
 The product is doing reasonably well in most of the market so they should promote the
product accordingly. Eg: free sampling, discounts etc.
67
CONCLUSION
This project of Financial Statement analysis in the production concern is not merely a work of
the project. Brief knowledge and experience of that how to analyse the financial performance
of the firm. The study undertaken has brought in to the light of the following conclusions.
 According to this project I came to know that from the analysis of financial statements
it is clear that Kesoram Cement Ltd isa satisfactory levelof profits during the period of
study.
 The firm should focus on maximizing the profits in the coming years by taking care of
internal as well as external factors.
 And with regard to resources, the firm is taking utilization of the assets properly.
 The fact depicts that the company has diverted its cash & bank balances to acquire the
fixed assets.
 The overall financial position of the company is satisfactory.
68
BIBLIOGRAPHY
69
BIBLIOGRAPHY
BOOKS
M.Y KHAN : FINANCIAL MANAGEMENT
JAIN AND NARANG : FINANCIAL CCOUNTING&ANALYSIS
S N MAHESHWARI : FINANCIAL ACCOUNTING & ANALYSIS
PRASHANTHA ATHMA : FINANCIAL ACCOUNTING & ANALYSIS
WEBSITES
 www.google.com
 www.lancoinfratech.com
 www.wikipedia.com
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A

FINANCIAL STATEMENT ANALYSIS

WITH SPECIAL REFERENCE

(H. No: 2262-16-672-082)

In partial fulfilment of the requirement for the award of

MASTER OF BUSINESS ADMINISTRATION

ACADEMY OF MANAGEMENT STUDIES

(AFFILIATED TO OSMANIA UNIVERSITY)

I hereby declare that this Project Report titled

Name and Address of the Student Signature of the Student

I am very much thankful to our principle Dr. Mohammed Haseebullah, Mr.

The project report entitled to “A study on financial performance of Kesoram

CHAPTER 1 INTRODUCTION 6-10

CHAPTER 2 REVIEW OF LITERATURE 11-29

CHAPTER 3 INDUSTRY PROFILE 30-35

CHAPTER 4 COMPANY PROFILE 36-44

CHAPTER 5 DATA ANALAYSIS AND INTERPRETATION 45-64

CHAPTER 6 FINDINGS, SUMMARY AND CONCLUSIONS 65-69

CHAPTER 7 BIBLIOGRAPHY 70-71

1 CEMENT CONSUMPTION (3.1) 35

2 CEMENT PRODUCTION IN INDIA (3.2) 36

1 Composition of Cement(Table 3.1) 33

2 Awards of Kesoram(Table 4.1) 40

4 Comparative Income Statement of KESORAM CEMENT 46

Ending 1-4-2016 to 31-3-2017. RS.000

Ending 1-4-2015 to 31-3-2016. RS.000

6 Comparative Income Statement of KESORAM CEMENT 48

Ending 1-4-2014 to 31-3-2015. RS.000

7 Comparative Income Statement of KESORAM CEMENT 49

Ending 1-4-2013 to 31-3-2014. RS.000

8 COMPARATIVE BALANCE SHEET OF KESORAM CEMENT FOR THE 50

Common methods of financial statement analysis include fundamental analysis, DuPont

1.2 SCOPE OF THE STUDY

1.3 NEED & IMPORTANCE OF THE STUDY

1.4 RESEARCH METHODOLOGY

Primary data: Data observed or collected directly from first-hand experience.

2.1 Meaning of financial statement

2.2 Nature of Financial Statement

 The reliability of financial statements depends on the reliability of accounting data.

 These statements are prepared as per accounting concepts and conventions

Importance of Financial Statements

 Consumers: -Consumers are interested in the establishment of good accounting control so

 Limitations of Financial Statements

The following are the main limitations of the financial statements

 Lack of Objective Judgment: - Financial statements are influenced by the personal

Profit and Loss Account

Importance of Profit and Loss Account

(ii) Non-Operating expensesare those expenses which are not required to be

A properly drawn up balance sheet gives information relating to

1. The nature and value of assets.

Characteristics of Balance Sheet

The following are the main Characteristics:

 It is prepared on a particular date and not for a particular period.

Information that Balance Sheet Convey to Outsiders

 The nature and the value of assets.

Classification of Assets and liabilities

Liabilities: A liability is an amount which a business is legally bound to pay. It is a claim by

 Uncertainty as to whether the amount will be payable to all, and

Meaning of Analysis of Financial Statement

Analysis is the process of critically examining in details accounting information given

Objectives of Financial Analysis

Financial analysis is helpful in assessing the position and profitability of a concern.

In short, the main objectives of analysis of financial statements or to assess: