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As a part of the course curriculum, the first year M.B.A. students are required to prepare a financial project report. The objective behind preparing this project report is to relate the management subjects taught in the classroom to their practical application.
The preparation of this project report is based on financial analysis of annual reports of 5 consecutive years for a public limited company using Ratio Analysis, Common Size Statements and other financial tools.
The scope of the project report is limited to the study of the financial position of the company on the basis of the published data available.
Our work in this project is, therefore, a humble attempt toward this end.
In spite of our best efforts there may be errors of omissions and commissions, which may please be excused.
1 S .V. INSTITUTE OF MANAGEMENT
Through this Acknowledgement we express our sincere gratitude towards all those people who have helped us in the preparation of the project, which has been a learning experience.
We would like to thank the Director, Prof. Bhavin Pandya, the faculty, the computer lab instructor and the librarian of S. V. Institute of Management for their support.
Finally, we express our sincere to Prof. Nikunj Patel and Prof. Kalpesh Prajapati who guided us throughout the project and gave us valuable suggestions and encouragement. “A success is sustained by the hands of more than one person directly or indirectly.” We are grateful to our parent‟s & friends for their love and moral support. At last but not the least, we are grateful to the almightily God, who has created this beautiful World.
Purvi Rathi Anushree Karani
(MBA - 1)
2 S .V. INSTITUTE OF MANAGEMENT
Executive Summery is an important part of the project in which have we included all the information of my project in a short manner. My project is on the titled financial analysis of SINTEX INDUSTRIES LTD.
Sintex Industries Limited was earlier known as The Bharat Vijay Mills Ltd. It is an Indian-based Company which operates in two business divisions – textiles and plastics. In the area of textiles, they had been pioneers in high value fabrics. Its Plastics Division started in the year 1975 and today they have most diversified manufacturing capabilities in plastic processing in the world, with 10 plants spread across the country, more than twelve manufacturing processes under one roof, having more than 500,000 Sq. meter area and a more than 1000 strong work force. The plastic division has a huge range of products with numerous applications. The products manufactured by the Company in plastic segment include prefabs, monoliths, storage tanks, containers, doors, windows and many more. In the textiles segment the Company manufactures men‟s structured shirting fabrics, yarn-dyed corduroy and cotton yarn-based corduroy, and fabric for ladies wear also. About Analysis Objectives To find out various critical aspects of the financial statements. To analyze and interpret the financial strength of the company. To know about trends of profit, sales expenditure, net worth, fixed assets and various other trends of the profit & loss and balance sheet statements. And the last and foremost thing is to fulfil the requirement of the course. Analysis: We have calculated various ratios such as liquidity ratios, profitability ratios, solvency ratios, turnover ratios to find out the financial performance and soundness of the company. We have also compared the balance sheet and profit & loss account of the company for last 5 years.
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V. vision & mission Organizational Design Production Marketing Personnel Page No. Particulars Preface Acknowledgment Executive summary Chapter – 1 Brief overview of the industry Introduction Of The Company History Of The Company Founder & Leaders Objectives.CONTENT Chapter No. INSTITUTE OF MANAGEMENT . 1 2 3 6 7 7 9 10 11 15 21 26 1 2 3 4 5 6 7 Ratio Analysis Chapter – 2 Comparative Balance Sheet And Analysis Of Balance Sheet 29 Chapter – 3 Comparative Profit & Loss Account And Analysis Of Profit & Loss Account 32 35 41 46 49 Chapter – 4 Common Size Statements and its Analysis Chapter – 5 Trend Analysis (Index Analysis) Chapter – 6 Analysis of Cash flow Statement Chapter – 7 Chapter – 8 Finding and Suggestions 78 80 90 95 8 9 Other Topics Chapter – 9 Annexure Biblliography 4 S .
INSTITUTE OF MANAGEMENT .V.CHAPTER 1: INTRODUCTION 5 S .
plastic bottles.A. extrusion. so that it becomes a booming industry. demand for plastics is rapidly increasing and soon India will emerge as one of the fastest growing markets in the world. Indian Plastics Industry is expanding at a phenomenal pace. Appliances: These are basically the plastic mechanical components like plastic bearings. healthcare etc. where plastic materials are used are automotive. One of such growing industry is petrochemical industry. End user markets: These are the plastic products basically used for domestic purposes. FINISHED PRODUCTS OF PLASTIC INDUSTRY INDIA: The plastic processing industry consist of over 30. . SOME ASSOCIATED INDUSTRIES: The potentiality of plastic industry India propels other associated industries to grow side by side.BRIEF OVERVIEW OF THE INDUSTRY: Plastics. electronics. telecommunications. polypropylene bags. plastic caps. Some of the end user plastic products are plastic balls. and finally calendaring. plastic baskets. Both these industries are reciprocal to each other. have set-up large manufacturing bases in India. plastic barrels. plastic bowls. The petrochemical industry facilitates the plastic industry to produce plastic products that will meet the domestic demand as well as that of the overseas market. plastic basins. The per capita consumption of plastic products in India is growing and is moving towards 8% GDP growth. plastic bellows. Plastics have a vital role to play. plastic bags. electrical and electronics. foreign investments. This potentiality of the market will surely actuate the entrepreneurs to invest in this industry. Entrepreneurs are trying to provide high quality plastic products. building & construction. industrial. Many companies from various sectors such as automobiles. polyethylene bags. INSTITUTE OF MANAGEMENT . is one of the fastest growing industries in India. then blow moulding. plastic basins. Some other industries. medical. plastic belting etc.V.packaging. transportation etc. 6 S . The plastic industry of India has a big market potentiality and is gradually prospering. packing. PROSPECT OF PLASTIC INDUSTRY INDIA: Plastic industry India is symbolizing a promising industry and at the same time creating new employment opportunities for the people of India.000 units which are producing a wide range of plastic products through the process of injection moulding. STRATEGIES OF PLASTIC INDUSTRY INDIA: The government of India is trying to set up the economic reforms to elevate and boost the plastic industry by joint venturing. food processing. Therefore.
They strive to develop products that no one else had made before. In the textiles segment the Company manufactures men‟s structured shirting fabrics. metal fabrication and concrete products facilities. HISTORY OF THE COMPANY: Sintex Industries Limited was earlier known as The Bharat Vijay Mills Ltd. It is an Indian-based Company which operates in two business divisions – textiles and plastics. 7 S . Established in India in 1931. Combination of such varied capabilities along with their state-of-the-art design and tool room facilities enables them to give vast array of products and solutions. INSTITUTE OF MANAGEMENT . windows and many more. the Sintex group creates best in class products that deliver better utility and value to its customers. having more than 500. with 10 plants spread across the country. Its Plastics Division started in the year 1975 and today they have most diversified manufacturing capabilities in plastic processing in the world. assembling. they had been pioneers in high value fabrics.000 Sq. Sintex has a proven track record of pioneering innovative concepts in plastics and textile sectors in India and an uninterrupted 77 years of dividend payment to its shareholders. custom moulding and textiles. they have even expanded their global footprints by acquisitions to offer total solutions to their customers. yarn-dyed corduroy and cotton yarn-based corduroy. The products manufactured by the Company in plastic segment include prefabs. Their application driven Research & Development team is constantly on the look-out to come up with products that can be made by integrating different materials with Custom Moulded solutions. storage tanks. doors. The plastic division has a huge range of products with numerous applications. and fabric for ladies wear also. monoliths. In the area of textiles. They have also created extensive finishing. It is Sintex‟s quest to deliver quality products at affordable prices.B. Pioneers in the development of innovation in building products. containers. Recently.V. more than twelve manufacturing processes under one roof. meter area and a more than 1000 strong work force.
window frames and pallets • Plastic Sections for Conversion into Partitions. False Ceilings. pultruded products. Indore and became the total solution provider for telecom sector 8 S ..HISTORY OF SINTEX INDUSTRY LIMITED: 1931-74 • Incorporated as The Bharat Vijay Mills • Established composite textile mill in Kalol.. • Introduced new plastic products like doors. resin transfer moulded products and injection moulded products • Modernization and expansion of the textile unit • Commenced structured yarn dyed business 2000-Till date • Alliance with European design houses and a UK based textile marketing company • Commenced production of pre-fabricated structures for classrooms. Furniture etc. 1995 • Renamed to Sintex Industries Limited • Commenced manufacturing of SMC moulded products. Gujarat Limited in June 1931 1975-90 • Commenced manufacturing of plastic moulded polyethylene liquid storage tanks including water tanks.. • Acquired 100% stake in Nief Plastic SA.Germany • Entered the housing sector with monolithic construction • First international acquisition by acquiring 81% stake in Wausaukee Composites Inc. Cabins.USA. INSTITUTE OF MANAGEMENT . Wall panelling. USA • Zeppelin acquired Digvijay Communications and Network Pvt. Cabinets.. Ltd.V. Nero Plastics Inc. a French company • Acquired automotive business division of Bright Brothers Limited • Wausaukee acquired 100% stake of its competitor. booths kiosks and office rooms • Acquisition of 74% stake in Indian subsidiary of Zeppelin Mobile systems Ltd.
He has done his B. About Mr. He has also done his B.Sc from Bombay University. so they have the brand image and Sintex is their brand name. Sintex has a proven track record of pioneering innovative concepts in plastics and textile sectors in India. Arun Patel: He is the Vice-Chairman of Sintex Industry Limited. Its plastic division was established in 1975. 9 S . They are the owners of the industry. They are the oldest in manufacturing plastic products and are also the pioneer of the industry.V.Sc from Bombay University. He has more than 5 decades of work experience. The vice chairman of the industry is Mr Arun P Patel. The chairman of the industry is Mr Dinesh P Patel who started the industry. which was earlier known as Bharat Vijay Mills was established in 1931. INSTITUTE OF MANAGEMENT . Dinesh Patel: He is the Chairman of Sintex Industry Limited. He has more than 5 decades of work experience. INTRODUCTION TO THE FOUNDING MEMBERS: Sintex Industry Ltd.C. About Mr.
So they have other objectives which are secondary objective which are equally important. 10 S . They constantly want to reach out for new height of excellence. Objectives are helpful to achieve target and with the help of them company can decide right direction.e. customer orientation and a focus on cost effectiveness. To a certain extent it has been found that successful business cannot afford to keep profit as its sole objective.V. OBJECTIVE OF SINTEX INDUSTRIES LIMITED: Sintex Industries Limited is a multi-faceted activity industry. There are two types of objectives i.D. They are doing flexible thinking and actively thinking. They are happily accepting every challenge that comes in their ways. They are constantly involved in achieving consumer satisfaction through total quality excellence and by providing competitive value to their customers. primary objective and secondary objective. PHILOSOPHY/MOTTO/OBJECTIVES OF THE COMPANY: Objectives are goals or aims which the management wishes the organisation to achieve. By Sintex. MOTTO OF SINTEX INDUSTRIES LIMITED: “The Way We Are Of Sintex. It is generally believed that business activity is carried out only for profit. quality and services”. Their aim is to expand the business by establishing a presence in global markets while at the same time consolidating in the Indian market too. INSTITUTE OF MANAGEMENT . Any industry first has to decide objectives. From Sintex” “Active Thinking” VISION OF SINTEX INDUSTRIES LIMITED: “To achieve global presence in textile business through continuous product and technical innovation.
V.ORGANISATIONAL DESIGN 11 S . INSTITUTE OF MANAGEMENT .
Chair person.I.A.. from IIM. Ahmedabad 3 decades of experience in plastics Sintex Group Of Companies Is Managed By Independent Professionals Are: President CEO : David Lisle Gilles Nief Indru G Advani Sandeep Harsh Neelesh Jain CEO : 12 S . Board of Directors..B.G.V.sc from Bombay University More than 5 decades of work experience Vice-chairman : Arun P Patel B. President. Top management consists of Chief Executive Officer. Executive Vice President.. INSTITUTE OF MANAGEMENT . Top Management Of Sintex Industries Limited is.. chemical and plastic B. Managing Director.Sc (Hons) S B Dangayach P. Top managers are responsible for making organisation-wide decisions and establishing the plans and goals for the organisation.) TOP MANAGEMENT: The top level management is known as the upper level of organisation. Chief Operating Officer.sc from Bombay University More than 5 decades of work experience Managing directors : Rahul A Patel Bachelors degree in Communications MBA from USA More than 24 years experience in textile and plastic Amit D Patel Bachelors degree in Commerce MT from USA 18 years of experience in textile.D. Chairman : Dinesh Patel B.
INSTITUTE OF MANAGEMENT .) HIERARCHY: Higher level Dinesh Patel (Chairman) Middle level Arun Patej (ViceChairman) S B Dangayach (Managing Director) Lower level SBU 1.V. Sanjiv Roy Building related products and industries and electric related SBU 2.II.) ORGANISATIONAL STRUCTURE AND CHART: 13 S .Mr. S Venktachalam III.Mr.
As Kalol is a village and it is not highly developed so it is beneficial for the industry. GEOGRAPHICAL DEPARTMENTALIZATION: The plant of Sintex is located in Kalol near Gandhinagar in Gujarat. 14 S . to 11 p. INSTITUTE OF MANAGEMENT . morning..4 p.7 a. there is departmentalisation on the basis of product as they have a huge range of products. PROCESS DEPARTMENTALIZATION: Sintex Industry Ltd.m. In Sintex they have two shifts for workers i. They are manufacturing more than 50 types of products. in which working hours for workers are fixed for specific period.e. also has departmentalization on the basis of process into various departments like.) DEPARTMENTALIZATION AND ITS BASIS: PRODUCT DEPARTMENTALISATION: In Sintex Industry Ltd. and evening. to 4 p.m.m. also has departmentalisation on the basis of time..m.. Production unit Packaging department Quality control unit Personnel department In addition to this Sintex Industry Ltd..IV. CUSTOMER DEPARTMENTALIZATION: Sintex has customer departmentalization as it manufactures the products according to the customers need because main aim of the industry is to provide quality products at affordable prices.V.
PRODUCTION 15 S . INSTITUTE OF MANAGEMENT .V.
The address of the plant location is as under.I.) PLANT LOCATION: The plant of Sintex Industry Ltd.V. INDIA Phone: 253500.in HEAD OFFICE OF SINTEX INDUSTRY LIMITED BRANCHES OF SINTEX INDUSTRIES LIMITED AHMEDABAD BANGALORE CHANDIGARH CHENNAI KOLKATA LUCKNOW NEW DELHI PUNE SECUNDERABAD TRIVANDRUM BHOPAL JAIPUR MUMBAI RANCHI 16 S . ADDRESS: SINTEX INDUSTRIES LIMITED Plastic Division NEAR SEVEN GARNALA KALOL (N.Gujarat) near Gandhinagar. GUJARAT) 382 721. Fax: (02764) 253800 Email: plastic@sintex. is located in Kalol (N.co. INSTITUTE OF MANAGEMENT .
. So the unskilled labourers are easily available over there which is beneficial for the industry as they are employed at very low wages. Land Climate Political and strategically considerations 17 S . Primary Factors includesRAW-MATERIAL: The basic raw material used by Sintex Industry Ltd..V. it has cheap transportation cost.. is powder which is in granule form. The major suppliers of raw material for Sintex are Reliance. Haldia and IPCL.FACTORS AFFECTING PLANT LOCATION: There are so many factors affecting plant location. TRANSPORT: As Sintex is located in Kalol. Sintex is a national player so it has a network in internal as well as global market. MARKET: Sintex is located in Kalol near Gandhinagar which is a good place for manufacturing products. primary data and secondary data. INSTITUTE OF MANAGEMENT . There are Secondary Factors that may affect the industry which are. Factors are categorized into two parts i.e.. LABOUR: The location of Sintex is in Kalol which is not highly developed as it is a village.
SMC Trench Covers 10. Processing Trolleys 8. Sintex produces a wide range of products. Chemical Tanks 4. FRP Cable Trays 9. Pallet Containers (Returnable Reusable Containers) 2. Sintex product range comprises the following: Product Category Prefabs Industrial 1. 4. With their multifarious capabilities in the field of plastics. 2. FRP Straight Cross Arms (REC Design) 7. concrete etc. Insulated Boxes 12. FRP Underground Petroleum Storage Tanks 3. they have created many path breaking products. Uno Pallets 5. Open Mouth Packaging Drums 1. Racking Systems 11. SMC Meter Boxes SMC Distribution Pillar Boxes SMC Distribution Boxes SMC Distribution Boards (DBS) SMC Pole Mounted Junction Boxes (Street Light Boxes) 6. Pallets 10. 4. metals. Products Name Prefabs For Schools BTS Shelters / Instrument Enclosures Prefabs For Housing Prefabs For Site Offices Bunk Houses Prefabs Toilets / Bathrooms Compound Wall (Prefabricated. Multi Bins Electrical Product Consumer 18 S .II. 3. 5. 2. They have an excellent design. SMC Danger Notice Plates 1. Mixing Tanks 9. 3.V. INSTITUTE OF MANAGEMENT . Intermediate Bulk Containers (IBC) 6. Relocatable) Industrial Product 1. 7. is as under. FRP V type Cross Arms (REC Design) 8. The product portfolio of Sintex Industry Ltd. engineering. 6.) PRODUCT PORTFOLIO: Sintex leads in meaningful innovations and solutions. It produces 50 types of plastic products. marketing and manufacturing set up to offer many standard and custom products and solutions for satisfying needs anywhere in the world. Supertuff Crates 7. 5.
V.PICTURES OF PRODUCTS MANUFACTURED BY SINTEX INDUSTRY LIMITED: BUILDING AND CONSTRUCTI ON PREFABRICATED BUILDING ELECTRICAL ENGINEERING INTERIO RS INDUSTRI AL CONSUM ER 19 S . INSTITUTE OF MANAGEMENT .
CUSTOM MOULDI NG PALLE TS OPEN MOUTH PACKAGING DRUMS INSULATED BOXES SINTEX WATER TANKS CONTINOUS SANDWICH PANEL 20 S .V. INSTITUTE OF MANAGEMENT .
INSTITUTE OF MANAGEMENT .V.MARKETING 21 S .
and support or non-tangibles the customer will receive. consumer. etc. produces a wide range of plastic products that are used in every field i. Marketers adjust each of these components to arrive at a mix that the customer will prefer over competitors Diagram showing 4 P‟s of management: PRODUCT: The product is the full bundle of goods and services offered to the customer. in household. electrical industry. At the core of Marketing are the “four P‟s” – Price. The plastic segment of Sintex Industry Ltd. They produce more than 50 types of products.V. Promotion. Marketing is a completely separate function that helps position products and services correctly so that sales can be made more effective. and Place. 22 S . Product.e. Some of the products that Sintex produces are as under: SMC Panel Tanks Prefabs for Anganwadis Wall paneling and false ceiling Septic Tanks Primary and integrated waste collection FRP Underground Water Storage Tanks Home and office furniture The above mentioned is a list of some products manufactured by the Sintex Industry and products are already shown in the portion of product portfolio. This includes the appearance.4 P’s OF MARKETING. INSTITUTE OF MANAGEMENT . construction. functionality.
Sintex has a strong presence in the European.PRICE: The price is the amount a customer pays for a product. is a national player. or a distributor? If a service. so it has a wide distribution network. personal selling. PROMOTION: Promotions are activities such as advertising. African. Germany and USA. Sintex Industry Ltd. Place means distribution network of company. conferences.V. advertisement on various websites or through some sources. American. The price of the products manufactured by Sintex Industry Ltd. Will you sell it yourself. is fixed according to market situation and the prices are fixed at a reasonable price so that everyone can afford it to buy. and Asian markets including countries like France. carries out promotional activities like campus recruitments. As Sintex Industry Ltd. 23 S . through a broker. INSTITUTE OF MANAGEMENT . and sales promotion which communicate the merits of the product and persuade target customers to buy it. do you deliver in person or through the internet or telephone? These all questions involves “place”. seminars. PLACE: This is where and how your product is distributed and sold.
they are smarter.Grasim . construction & building companies.Bombay Dyeing . WHO. Company has to spend considerable time and resources searching for new customers. Target customers are those customers who actually buy the products. Sintex has a strong presence in the European. Reliance Infocomm. Larsen & Tourbo. Mainly Sintex deals with Government and Semi-government sectors. etc. more demanding. They have their presence in 9 countries across 4 continents. Ranbaxy. INSTITUTE OF MANAGEMENT . Cipla.3M India . American. The major clients of Sintex Industry Ltd.) PLACE: DISTRIBUTION NETWORK: A set of interdependent organisations involved in the process of making a product or service available for consumption on consumer is known as Distribution Network. agriculture.Prakash Ind . IV. Sintex‟s target customers are their competitors who are as under: . Siemens. The main office of the company is located at Kalol in Gujarat. 24 S . sends direct mail.Nava Bharat Ven . African. Germany and USA. Market is more customers oriented. So they all are the target customers of Sintex. GE Motors. Market is operated according to customer‟s tastes and preferences. Reliance energy. They also work with Western and Southern part of the country. UNICEF. etc. has large distribution network in India and also outside India. Torrent Pharma.) PRICE: Price is the amount a customer pays for the product. Engineered structural plastic products supplied to Global OEM‟s.Century . Sintex Industry Ltd. etc.Voltas . Eicher.Orient Paper III.II. For these company creates ads and places them in media.Kesoram . Today customers are harder to please. They are producing high quality products at affordable price so that the consumers are happy with the products. CARE. households. etc. Sintex is the pioneer for manufacturing of plastic products. The business increases or decreases their prices if other stores having the same product.V. more price conscious. are ABB.) TARGET CUSTOMERS Customer is the king of the market. and Asian markets including countries like France.
V. Competition shapes business. various websites.V. INSTITUTE OF MANAGEMENT . 25 S . Advertising and promotions are best carried out by implementing advertising and promotions plan.Grasim . particularly threats from competition.Kesoram .) PROMOTIONAL AND ADVERTISING CAMPAIGN: Advertising and promotions is bringing a service to the attention of potential and current customers.Orient Paper VII. Competition may be direct and indirect. new products and new ideas.Voltas . news papers. Competitors of SINTEX INDUSTRY LIMITED are as follows: . American. A study of the competitive scenario is essential for the marketer.) COMPETITORS: Competitors are the other business entities that compete for resources as well as market.3M India . campus recruitment.Prakash Ind . Sintex is promoting cost savings. VI.Bombay Dyeing . They offer substitute which attract our present customers. Sintex has a strong presence in the European. and Asian markets including countries like France. Germany and USA. They have their presence in 9 countries across 4 continents. African. etc. Sintex promotes through various advertisements.) EXPORTS: Sintex is an international player.Nava Bharat Ven .Century . The goals of the plan should depend very much on the overall goals and strategies of the organization.
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I.) STRENGTH OF PERSONNEL DEPARTMENT: Personnel management is that phase of management, which deals with effective control, use of man power or human resources. Labour is the main factor of production. Sintex has almost more than 2500 employees. It is very important to have strength of employees for Sintex. Following are some of the strengths of Sintex Industry Ltd. They have internal audits. Management is most important for the industry, so they also have management meetings. As they are the leading company, it is important for them to have contract procedures. As they are selling high quality products, they also have product quality review.
II.) RECRUITMENT POLICY: Recruitment is the process of locating, identifying and attracting capable applicants to an organisation. As such Sintex has no specific recruitment policy, they generally have several sources of recruitment policy, which are as under: Internet Employee referrals Company website College recruiting Professional recruiting organizations
III.) TRAINING & DEVELOPMENT: The training is an act of increasing the knowledge and skill of a worker for doing a certain job. A skill thus acquired by the employee through training is thus an asset to the organisation and the employer. Sintex has a training institute i.e. ITI in Kubernagar. Generally they give training to the freshers and unskilled labourers so that the production process doesn‟t have any breakdown. IV.) REWARD SYSTEM: Many organisations provide rewards to their employees for their precious work contribution. The rewards may be in the form of incentives, gifts articles, and appretiational items like award for best employee, etc. These rewards may be given to employees at the end of the year in their annual meeting. By giving rewards to employees they feel that they are an important part of organisation and thereby they are motivated to work more efficiently. Sintex also gives rewards to their employees so that they are motivated.
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COMPARATIVE BALANCE SHEET AND ANALYSIS OF BALANCE SHEET
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93 3048.10 50.98 15.63 228.89 1773.82 119.87 359.05 0.30 0.17 -130.54 213.29 145.19 0.12 1058.37 1329.00 327.09 518.13 26.49 247.26 68.15 900.80 1099.11 353.COMPARATIVE BALANCE SHEET PARTICALAR SOURCES OF FUNDS: Share Capital Share Warrants & Outstandings Total Reserves Shareholder's Funds Secured Loans Unsecured Loans Total Debts Total Liabilities APPLICATION OF FUNDS : Gross Block Less: Accumulated Depreciation Net Block Capital Work in Progress Investments Current Assets.65 2174.53 1434.59 136.87 289.13 582.05 1336.65 58.15 789.07 522.79 37. Loans & Advances Inventories Sundry Debtors Cash and Bank Other Current Assets Loans and Advances Total Current Assets Less: Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets / Liabilities Total Assets Contingent Liabilities Book Value Adjusted Book Value 45.99 1146.53 19.31 137.02 295.52 -61.26 2450.62 2.74 602.36 86.69 3566.06 815.70 1325.09 317.15 4056.10 107.13 27.75 53.00 172.87 0.65 636.70 677.06 783.38 637.96 242.73 791.43 469.71 449.93 476.24 312.26 1329.77 1575.28 150.14 2292.58 304.64 444.47 29.70 1927.94 19.43 289.79 206.73 2221.00 1588.66 1037.83 881.00 66.78 1536.37 1938.55 163.61 -152.85 246.67 355.53 22.15 -99.37 4056.27 1832.31 581.95 1037.26 678.64 437.45 3048.02 156.41 429.23 59.68 650.72 1115.49 2006 2007 2008 2009 2010 (RS IN CRORES) 29 S .53 223.10 12.63 1627.83 810.68 429.43 38.12 -72.30 292.V.36 3566.58 27.47 168.00 628.00 36.87 506.63 294.73 5.59 4.35 0.73 454.17 1690.82 1221.73 179.75 807.29 197.79 291.15 495.54 1079.47 1.10 22.99 629.71 162. INSTITUTE OF MANAGEMENT .10 1640.53 254.02 1511.75 1882.10 22.42 635.09 27.04 674.06 181.04 385.96 205.
Company‟s total reserves is showing increasing trend which is a good indicator of its performance. Inventories are showing increasing trend till 2009 but in 2010 it reduces by 7%.V.ANALYSIS The share capital of the company has remained constant from 2007 to 2010. INSTITUTE OF MANAGEMENT . Companies investments are also showing an increasing trend which means that they are investing their money in the market. Till 2007 secured loans were than unsecured loans but after 2007 unsecured loans were more than secured loans. Total debts of the company shows an increasing trend which means that the interest burden on the company has been increasing which is not a good sign. 30 S . Total debt consists of secured loans and unsecured loans. Total reserves consist of retained earnings and net profit. Company has been acquiring new assets every year which means that their production capacity is increasing. Although company‟s debtors are increasing. Current liabilities of the company are not consistent in last five years and there are lot many fluctuations. it means that either the company‟s collection mechanism is not sound or it allows high credit period o its debtors. Since the company‟s debtors are increasing year by year. This means that the company has not issued any equity shares after 2006. its cash balance is also shoeing an increasing trend which means that the company is earning profit from other sources as well.
V. INSTITUTE OF MANAGEMENT .CHAPTER 3: COMPARATIVE PROFIT AND LOSS ACCOUNT AND ANALYSIS OF PROFIT AND LOSS ACCOUNT 31 S .
77 5.33 1510.03 63.01 2010.53 161.68 9.V.33 4.29 26.10 709.56 853.48 67.69 94.72 33.29 1982.17 75.09 144.00 19.85 60.40 46.70 98.04 -20.20 216.79 57.66 177.71 1630.41 93.63 1883.73 468.47 32.53 280.29 92.70 58.25 332.01 1272.00 41.83 51. INSTITUTE OF MANAGEMENT .53 30.84 674.68 114.99 40.COMPARATIVE PROFIT & LOSS ACCOUNT PARTICULAR INCOME : Gross Sales Less: Sales Returns Less: Excise Duty Net Sales EXPENDITURE : Increase/Decrease in Stock Raw Material Consumed Power & Fuel Cost Employee Cost Other Manufacturing Expenses General and Administration Expenses Selling and Distribution Expenses Miscellaneous Expenses Less: Expenses Capitalised Total Expenditure Operating Profit (Excl OI) Other Income Operating Profit Interest PBDT Depreciation Profit Before Taxation & Exceptional Items Profit Before Tax Provision for Tax Profit After Tax Adjustments to PAT Profit Balance B/F Appropriations Equity Dividend % Earnings Per Share Adjusted EPS 110.99 30.91 476.76 134.15 71.82 93.42 95.11 373.25 1.80 497.20 10.70 41.98 0.55 913.54 34.88 280.13 50.91 1159.88 202.48 341.78 24.90 44.29 29.53 64.04 1117.63 30.43 32.70 6.08 14.22 70.95 130.02 900.78 343.48 56.75 72.56 55.56 2006 2007 2008 2009 2010 (RS IN CRORES) 32 S .56 388.08 58.47 161.60 20.86 77.03 341.44 104.97 7.92 44.95 266.47 695.17 947.06 62.80 70.66 341.63 379.97 404.30 114.23 51.00 11.30 94.89 510.87 60.88 20.40 341.59 1655.79 174.17 -37.17 68.89 59.00 20.30 22.70 243.08 29.80 308.04 2103.76 1025.32 425.00 15.99 203.98 1212.01 1.70 280.33 -20.87 55.38 48.98 456.47 217.58 1311.80 3.80 1790.51 84.14 144.63 43.66 74.92 96.16 722.00 9.78 273.
ANALYSIS Net sales of the company are increasing since last five years which is a very good indicator for the company. INSTITUTE OF MANAGEMENT . Company‟s earnings per share is also increasing which means it leads to wealth maximization of shareholders. Company‟s equity dividend percentage from Rs 44% to 60% that is almost 150%. Company‟s administrative expenses have shown increase of 63% from 2006 to 2010. Company is able to control its miscellaneous expenses as it is showing decreasing trend. As assets of the company are increasing it directly affect the depreciation and depreciation of the company also increases year by year. Company‟s interest income is also showing increasing trend. 33 S . Power and fuel cost of the company is almost constant and does not show any major fluctuations.V. Company‟s selling and distribution expense have increased about 58% which are less than the administrative expenses. Employee cost is also increasing each year which increases company‟s total manufacturing expenses.
CHAPTER 4: COMMON SIZE STATEMENTS 34 S .V. INSTITUTE OF MANAGEMENT .
34 15.75 55.36 100 44.16 100 65.97 100 1.00 1.09 0.00 0.00 10.81 0.37 Investments Current Assets.55 45.13 8.64 7.00 -3.00 0.25 12.18 46.47 62.67 0.44 -5.25 0.64 43.00 5.00 45.00 17.57 60.89 1.66 47.53 0.17 2.39 9.65 21.40 0.12 0.51 0.03 28.55 50.15 54.52 41.21 32.90 0.95 16.00 2.03 100 66.80 0.66 100 2010 1.00 47.87 29.00 14.03 61.17 9.50 53.00 -3.00 34.00 5.30 48.89 0.04 -3.96 51.72 0.65 0.00 3.99 0.32 14.92 0.50 19.20 0.00 15.29 0.68 0.05 19.75 100 35 S .54 0.49 0.80 1.42 43.51 56.83 0.00 5.COMMON SIZE STATEMENT OF BALANCE SHEET PARTICULARS SOURCES OF FUNDS: Share Capital Share Warrants & Outstandings Total Reserves Shareholder's Funds Secured Loans Unsecured Loans Total Debts Total Liabilities APPLICATION OF FUNDS : Gross Block Less: Accumulated Depreciation Less: Impairment of Assets Net Block Lease Adjustment A/c Capital Work in Progress 2006 2007 2008 2009 (RS IN CRORES) 0.00 8.00 5.59 20.52 17.60 100 43.00 10.45 0.98 39.72 10.97 38.34 44.52 34.10 27.00 47.41 100 35.64 22.00 19.17 16.77 0.25 9.44 100 0.10 0.00 8.00 0.08 13. INSTITUTE OF MANAGEMENT .81 21.26 100 0.92 0.55 45.46 60.00 0.00 5.00 12.30 45.25 0.76 0.16 16.32 43.69 20. Loans & Advances Inventories Sundry Debtors Cash and Bank Other Current Assets Loans and Advances Total Current Assets Less: Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets / Liabilities Total Assets 19.00 19.00 0.96 0.00 7.00 3.04 49.02 0.16 -5.92 0.95 0.00 15.40 26.00 25.V.07 12.25 0.00 32.54 0.00 15.84 34.73 75.35 18.33 0.00 10.99 0.00 4.83 0.67 0.89 47.90 30.
INSTITUTE OF MANAGEMENT .V.Application of Funds 36 S .
In last two years company has acquired assets and expand its production capacity. It increased in 2008 up to 55% and again it decreased in 2010 by 47%.ANALYSIS: Contribution of total current assets in the total assets is 42% in 2006. which slightly decreased in 2007 which was 40%. Contribution of total current liabilities in the total liabilities is 12% in 2006. which slightly increased in 2007 which was 14%. inventories. Contribution of net block in the total assets is 11% in 2006 and 10% in 2007. and 10% in 2007 & 2008. 37 S . INSTITUTE OF MANAGEMENT . Then slightly changes were there. It significantly decreased in 2008 up to 19% and again it increased in 2009 by 26% and 25% in 2010.then it increased in 2009 & 2010 by 13% & 15% respectively. Contribution of investments in the total assets is 11% in 2006. cash etc. Current assets includes debtors.V.
31 2.48 5.40 3.88 13.04 0.09 16.41 16.07 3.91 3.45 2.00 0.50 100 107.13 0.12 0.69 4.61 10.00 81.39 2.99 3.09 0.26 0.00 5.21 0.71 14.56 19.68 0.21 4.76 4.35 62.23 20.18 1.24 0.00 79.77 2.09 0.98 0.83 6.81 59.12 0.78 104.77 11.55 3.17 0.50 0.39 21.40 1.00 0.00 13.07 -3.86 6.72 2.00 0.16 4.49 20.00 0. INSTITUTE OF MANAGEMENT .45 0.00 4.16 3.95 0.37 0.46 3.44 2.00 7.88 4.18 16.24 100 108.20 0.00 83.17 3.25 61.67 18.44 0.63 0.91 2.20 1.34 1.82 23.04 3.26 1.00 0.COMMON SIZE STATEMENT OF PROFIT AND LOSS ACCOUNT PARTICULARS 2006 2007 2008 (RS IN CRORES) INCOME : Gross Sales Less: Inter divisional transfers Less: Sales Returns Less: Excise Duty Net Sales EXPENDITURE : Increase/Decrease in Stock Raw Material Consumed Power & Fuel Cost Employee Cost Other Manufacturing Expenses General and Administration Expenses Selling and Distribution Expenses Miscellaneous Expenses Less: Expenses Capitalised Total Expenditure Operating Profit (Excl OI) Other Income Operating Profit Interest PBDT Depreciation Profit Before Taxation & Exceptional Items Exceptional Income / Expenses Profit Before Tax Provision for Tax Profit After Tax 0.64 0.20 0.22 0.10 0.00 16.82 4.98 3.V.00 8.13 100 108.00 0.70 63.55 21.10 100 2009 2010 38 S .94 3.00 8.12 16.85 5.06 0.91 3.74 -1.06 3.81 0.60 13.83 3.00 16.30 0.97 1.10 18.00 4.69 23.20 0.37 13.39 0.40 20.98 3.63 100.90 4.00 80.45 0.00 14.94 0.95 0.04 0.61 -0.00 105.18 3.
Profit before tax is around 17% in 2006 and it highly decreased in 2007 and it was only 0. Contribution of total expenditure to net sales is around 80% to 83% over 5 years. Thus we can say that here 2007 was not a good financial year for the company because profit and sales of the company has significantly decreased.18% in 2006 and it significantly decreased in 2007 and it was 0. 39 S . Contribution of depreciation to net sales was 4. Major portion increase in total expenditure was raw material consumed.ANALYSIS OF COMMON SIZE STATEMENT The contribution of gross sales to net sales was nearly same in all the year it was near about 107 to 104% over 5 years and excise duty has increased 2006 to 2008 and for last two years it has decreased which is good for the company. After that it increased due to acquisition of assets by the company. Which simply means that company is able to generate profit by 20% to 17% in last 5 years and because of this it can able to expand its operations. INSTITUTE OF MANAGEMENT .17% only.V.95% and it again increased in 2008 and then it was decreasing in 2009 and 2010.
CHAPTER 5: TREND ANALYSIS 40 S . INSTITUTE OF MANAGEMENT .V.
77 294.32 352.36 376.33 100.79 428.33 166.TREND ANALYSIS OF BALANCE SHEET PARTICALAR SOURCES OF FUNDS: Share Capital Share Warrants & Outstandings Total Reserves Shareholder's Funds Secured Loans Unsecured Loans Total Debts Total Liabilities APPLICATION OF FUNDS : Gross Block Less: Accumulated Depreciation Net Block Capital Work in Progress Investments Current Assets.00 100.00 100.00 100.19 2133.75 284.00 100.08 323.59 131.00 245.96 426.91 3.43 180. INSTITUTE OF MANAGEMENT .00 100.68 141.48 500.53 176.34 934.53 293.06 309.00 100.30 143.00 100.41 128.00 100.75 168.46 0.76 210.41 884.78 293.00 100.73 139.34 221.36 290.65 128.97 260.87 515.96 343.68 343.70 332.95 116.34 41 S .00 100.86 233.43 237.63 172.01 364.54 335.34 411.67 718.52 449.00 100.36 119.12 209.14 162.74 77.47 160.00 112.18 195.00 100.91 238.18 390.62 1851.04 406.V.65 25.70 274. Loans & Advances Inventories Sundry Debtors Cash and Bank Other Current Assets Loans and Advances Total Current Assets Less: Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets / Liabilities Total Assets Contingent Liabilities Book Value Adjusted Book Value 2006 2007 2008 2009 (RS IN CRORES) 137.09 140.84 220.00 373.96 389.38 373.83 137.11 129.82 128.91 1275.83 188.00 100.38 190.65 159.78 212.32 176.00 100.36 229.34 304.70 263.20 116.37 264.98 304.00 100.60 1869.00 100.86 115.00 100.98 262.83 238.00 100.37 130.95 143.60 390.95 329.98 369.00 100.00 100.39 108.00 100.23 135.00 146.77 332.53 364.00 100.68 357.11 203.37 0.71 2010 100.29 513.83 316.65 129.00 100.00 155.00 100.94 403.72 1037.70 46.48 413.72 333.32 1202.08 1841.71 264.00 100.11 137.00 100.
Total current assets has increased about 28%. 08-09. 235%. 306%. and total current liabilities over 5 years. Share capital has remained constant since last 3 years. and 289% in years 06-07. 09-10 respectively. 264%. 07-08. INSTITUTE OF MANAGEMENT . total current assets. 174%. Total current liabilities has increased about 62%. and 415% in years 06-07. investments. 08-09. it has increased 37% from 2006 to 2010. Investments has increased about 31%. 223%. 253%.1400 1200 1000 800 600 Investments 400 Share Capital 200 0 2006 2007 2008 YEARS 2009 2010 Total Current Liabilities Total Current Assets ANALYSIS Above graph shows the trend analysis of share capital. 42 S . 08-09. Though current assets are increasing we cannot say that the company is performing well because debtors are increasing at a higher rate than the cash. Total current liabilities include provisions which are increasing at a alarming rate. 09-10 respectively. 09-10 respectively. 07-08.V. 07-08. and 190% in years 0607.
72 318.71 173.41 160.91 -301.38 42.15 288.88 278.00 268.99 109.32 173.16 193.16 140.57 227.04 608.86 219.01 467.18 411.85 298.43 147.36 298.56 176.95 263.01 162.91 278.94 130.72 1044.36 216.89 140.01 135.46 163.69 203. INSTITUTE OF MANAGEMENT .64 171.84 229.35 149.88 141.92 176.28 132.57 159.41 216.15 141.19 253.02 113.69 212.15 168.TREND ANALYSIS OF PROFIT &LOSS ACCOUNT PARTICULAR INCOME : Gross Sales Less: Sales Returns Less: Excise Duty Net Sales EXPENDITURE : Increase/Decrease in Stock Raw Material Consumed Power & Fuel Cost Employee Cost Other Manufacturing Expenses General and Administration Expenses Selling and Distribution Expenses Miscellaneous Expenses Total Expenditure Operating Profit (Excl OI) Other Income Operating Profit Interest PBDT Depreciation Profit Before Taxation & Exceptional Items PBDT Provision for Tax Profit After Tax Adjustments to PAT Profit Balance B/F Appropriations Equity Dividend % Earnings Per Share Adjusted EPS 100 100 100 100 100 160.72 132.59 26.40 115.58 223.00 211.09 126.97 222.40 356.15 297.46 32.59 132.98 238.35 229.95 258.63 140.57 216.00 126.78 170.35 151.32 289.24 194.19 126.84 184.01 138.15 2006 2007 2008 2009 2010 (((RS IN CRORES)(RS)IN CRORES 43 S .49 245.57 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 -543.75 293.39 171.40 249.85 203.18 171.01 128.58 235.39 200.32 273.10 -303.59 89.67 236.98 150.48 304.04 211.76 97.69 336.86 220.81 177.V.24 245.27 125.43 229.17 136.45 100 100 100 100 156.88 216.21 135.06 205.69 153.69 195.30 325.86 230.40 293.48 273.09 235.32 140.40 158.99 136.
and 193% in years 06-07.1200 1000 Profit After Tax 800 600 PBDT 400 Total Expenditure 200 Net Sales 0 2006 2007 2008 YEARS 2009 2010 ANALYSIS Above graph shows the trend analysis of Profit after tax. 09-10 respectively. 09-10 respectively. Total expenditure includes raw material consumed. 113%. Net sales has increased about 31%. Profit before depreciation & tax has increased about 40%. 85%. 0809. 07-08. 129%. 94%. 09-10 respectively. Total expenditure and Net sales over 5 years. 44 S . Profit before depreciation and tax. 07-08. INSTITUTE OF MANAGEMENT . Net sales of the company is increasing which is a good sign for the company. Total expenditure has increased about 27%. 08-09. 07-08. the raw material consumed cost increased and overall expenses of the company increased. 120%. and 135% in years 06-07. Here. selling & distribution expenses and administrative expenses. 178%. and 130% in years 06-07. employee cost.V. As production increased. since other income is also included so we can say that there the entire profit is not from the core business of the company. 08-09.
Profit after tax has increased about 41%, 135%, 190%, and 197% in years 06-07, 0708, 08-09, 09-10 respectively. Net profit has continuously increased so for investors it is a good opportunity to invest in the company.
CHAPTER 6: ANALYSIS OF CASH FLOW STATEMENT
45 S .V. INSTITUTE OF MANAGEMENT
CASH FLOW STATEMENT
PARTICULARS Profit Before Tax Adjustment Depreciation Impairment Interest Expenses Profit/Loss on sale of Fixed Assets Dividend Received Interest Income Effect of Exchange Rate Change Provision for doubtful debts &advances Misc. Expenses written off Other Adjustments Changes In working Capital Trade & Other receivables Inventories Trade & Other payables Cash Flow after changes in WorkingCapital Interest Paid Tax Paid Cash From Operating Activities Cash Flow from Investing Activities Purchase of Fixed Assets Sale of Fixed Assets Sale of Investments Investment in Subsidiaries Dividend Income Interest received Loans & advances given to subsidiaries / partnership firms etc. Other Investment Activities Cash from Financing Activities Increase / (Decrease) in Loan Funds Proceeds from Long Term Borrowings Proceeds from Debenture / Bonds Proceeds from Issue of Equity Share Capital Equity Dividend Paid Interest Paid Net Cash Inflow / Outflow Opening Cash & Cash Equivalents Closing Cash & Cash Equivalent Mar-10 341.48 54.26 84.03 51.32 -8.67 -0.22 -33.00 -49.64 0.17 10.27 -610.01 -563.54 12.45 -58.92 -214.27 -66.64 -280.91 -112.76 -94.25 1.06 -71.88 0.22 29.63 32.99 -10.53 253.86 27.64 339.10 Mar-09 Mar-08 Mar-07 Mar-06 (RS IN CRORES) 341.66 280.53 161.53 114.30 89.84 93.43 66.36 38.96 62.40 51.70 41.47 30.68 29.09 63.97 56.25 40.99 -19.63 -13.18 -1.47 -15.80 -2.02 -65.70 -13.47 -10.58 -6.85 51.96 8.55 -5.33 -0.70 0.25 -0.12 0.10 0.98 0.97 1.28 2.43 -2.37 2.73 -148.00 -298.04 -55.96 40.04 -156.06 -337.99 -90.47 1.98 -18.38 -17.40 -59.25 20.56 26.44 57.35 93.76 17.50 283.50 -63.19 220.31 -891.02 -434.62 1.12 -420.74 2.02 65.70 75.92 -35.48 40.44 -638.34 -380.02 0.74 -127.91 13.47 171.93 -21.90 150.03 -230.22 -221.50 0.43 -18.00 10.58 -1.73 143.56 148.65 -0.85 254.87 20.74 215.91 50.62 -10.09 -45.62 63.37 510.58 573.95 46 S .V. INSTITUTE OF MANAGEMENT 26.64 -8.42 276.09 234.49 510.58 6.85 193.31 -28.73 -12.09 152.48 -131.26 -161.44 0.17 24.01
26.23 -144.62 -130.73 59.70 1681.46 -201.01 129.84 354.91 885.21 759.53 -12.56 -80.56 1083.56 573.95 1657.51
-17.51 -95.37 -139.81 1046.50 906.69
-15.94 -78.26 -611.01 1657.51 1046.50
The profit and loss account reports only the effects of the current operation of the enterprise on its financial position. The balance sheet shows the financial position of the enterprise at the end of the year. Neither of these statements describes the investments in assets during and how those investments are financed. The statement of cash flows is a relatively new financial statement that reflects the major sources of cash receipts and cash payments of an enterprise. It reports the cash effects during a period of not only the enterprise‟s operations but also its investing and financing activities. In the above statement, it can be observed that the cash flow from operating activities is showing negative balance in 2006 and then in 2007 it is showing positive balance. In 2008 the cash flow again decreased and then it is increasing. Negative cash flow clearly indicates that its manufacturing expenses were greater than the income from the sales of goods. Cash flow from investing activities is negative in all the 5 years. This is only due to purchase of more fixed assets and unrecovered of loans. Cash flow from financing activities was highest in 2007-08 and in remaining years it had small fluctuations.
47 S .V. INSTITUTE OF MANAGEMENT
INSTITUTE OF MANAGEMENT .CHAPTER 7: RATIO ANALYSIS 48 S .V.
g. current ratio to current liability ratio 2:1 b) Rate at which is ratio between two numerical facts. e. c) Percentage which is a special type of rate expressing the relation in hundredth. but the type of ratio he would precisely use depends on the purpose for which analysis is made. dividend per share. So. gross profit ratio is 25% on sales. stock turnover ratio is 3 times a year. Ratio analysis of financial statements stands for the process of determining and presenting the relationship of items in the statement.V. 4) It helps in investment decisions in the case of investors and lending decisions in the case of bankers and financial institutions. INSTITUTE OF MANAGEMENT .. There are several ratios which an analyst can employ.. 2) It provides inter-firm comparison to measure efficiency and helps the management to take remedial measures.g. Uses of Ratio Analysis 1) It facilitates the comprehension of financial statement and evaluation of several aspects such as financial health. profitability and operational efficiency of undertaking. Ratios are expressed in various forms a) Pure ratio which are arrived at by the simple division of one number by another. investers will be interested in such ratios as earning per share. usually over a period of time. 49 S . 3) It is also helpful in forewarning corporate sickness and helps the management to take corrective actions.Meaning : A ratio is a statistical yardstick that provides a measure of relationship between two figures. e.
A) LIQUIDITY RATIO Liquidity is defined as the ability to realize value in money e most liquid of assets.term obligations. structure and utilization of liquid assets and in the qualitative aspect. It refers to the ability to pay in cash. it is the ability to meet all present and potential demands on cash from any source in a manner that minimizes cost and maximizes the value of the firm. The liquidity ratio measure the liquidity of the firm and its ability to meet its maturing short.V. The corporate liquidity has two dimensions that are quantitative and qualitative concepts. Excess liquidity results into: 1) 2) 3) 4) lower profitability Deterioration in managerial efficiency Ideal cash fund giving lower returns Too liberal credit and dividend policies Too little liquidity result into: 1) 2) Reduce rate of return Missing of profitable business opportunities The important ratio measuring short-term solvency are : 1) Current ratio 2) Quick ratio 50 S . the obligations that are due. The quantitative aspects includes the quantum. INSTITUTE OF MANAGEMENT .
From the above table. INSTITUTE OF MANAGEMENT . Current liabilities and provisions are those liabilities that are payable within a year. Current assets are those which can be converted into cash within a year.15 581. This ratio measures the solvency of the company in the short-term. sundry debtors. Due to high proportion of obsolete.3) Particular Current Assets(RS IN CRORES) Current Liabilities(RS IN CRORES) Current Ratio 2006 629. cash & bank balances etc.2) Formula: Current ratio =Current Assets Current Liabilities Where current assets include inventories.06 522.V.1)CURRENT RATIO 1.1) Meaning: Current ratio measures relationship between current assets and current liabilities.99 179. and current liability includes creditors. the current ratio may be high but its capacity to meet its current liabilities is definitely weak 51 S .17 3.1 3.09 2.82:1 2010 2450. When current ratio is double than current liabilities the firm has no difficulties in paying short term obligations on time.69:1 1.81:1 2009 2221. 1. slow moving stock. 1.51:1 2007 810. bank overdraft. the current ratio is increasing.4) Analysis: The ideal current ratio is 2:1. This may be bcause the inventory of the company ahs increased due t low sales.71 3.78:1 2008 2292.7 4.64 602.71 292.
3) Particular Current Assets(RS IN CRORES) Inventories(RS IN CRORES) Current Liabilities(RS IN CRORES) Quick Ratio 2006 2007 629.54:1 3. INSTITUTE OF MANAGEMENT . The quick ratio establishes a relationship between quick assets and current liabilities.15 2450.28:1 2008 2009 2010 2292.1) Meaning: Quick ratio is used as a measure of the company‟s ability to meet its current obligations.03:1 2.2) Formula: Quick ratio = Current Assets .09 3.28 145.4) Analysis: The ideal quick ratio is 1:1.51:1 4.Inventory Current Liabilities 2.06 162.93 181.71 86.7 3.15 168.71 292.99 810.7 602. Here inventory is deducted because rupee of cash is more readily available to meet current obligations than a rupee of inventory.V.1 522.54 179. From the table it is clear that quick ratio for all the 5 years is more than the ideal ratio.2) QUICK RATIO 2.36:1 2. This indicates that the company‟s liquidity position is good and it has enough cash resources on hand to meet its urgent cash requirements 52 S .17 581.64 2221. 2.
There are two aspect of long term solvency 1) 2) Ability to repay the principal when due. There are three type of leverage ratios : 1) 2) 3) Debt – Equity ratio Capital Employed to Net Worth ratio Fixed Interest Coverage ratio 53 S .B) LEVERAGE RATIO The leverage ratio may be defined as financial ratios which throw light on the long term solvency of a firm as reflected in its ability to assure the long term lenders. INSTITUTE OF MANAGEMENT . Regular payment of interest The long term financial stability of the firm may be considered as depedent upon its ability to meet all its liabilities. Thus long term solvency of the firm can be examined by using the leverage ratios. including those not currently payable.V.
shares so company loses advantage. 54 S .05 2008 1536.2) Formula : Debt – Equity Ratio = Total Debt Net Worth(excl. In 05-06 it was 1.94 1. INSTITUTE OF MANAGEMENT .85 1.93 1459. total debt = secured loans + unsecured loans. This relationship is shown by the debt equity ratio.) Where.3) Particular Total Debt(RS IN CRORES) Net Worth(RS IN CRORES) Debt-Equity Ratio 2006 582. If debt equity ratio is low the company is said to be low geared company and it is not taking advantage of trading on equity.31 2007 678. Net worth = share capital+ reserves & surplus . Ultimately ratio is very low so company is low geared one. The relationship between borrwed funds and owner‟s capital is a popular measure of the long term financial solvency of a firm.66 444.1) DEBT-EQUITY RATIO 1.20 2010 2174.05 2009 1938. 1.17 1.56 1.26 648.4) Analysis : This ratio indicates the relationship between total debt and net worth of the company. Debt equity ratio of 2:1 is accepted norm for financial institutions for giving loans for projects.17.36 1615. The main reason behind this is that therre are no preference shares and debentures. share cap. Capital structure of the company does not include debentures and pref.1) Meaning : This ratio indicates the relationship between total debt and net worth of the company. In this company debt equity ratio is very low than required once.31.fictitious assets. pref.97 1.V.37 1859.75 1. 1. in 09-10 it was 1.
2) CAPITAL EMPLOYED TO NET WORTH RATIO 2.55 1615.44 2009 2407.57 2.4) Analysis: This ratio is found out to know how much capital is employed to net worth. Pref. In this company in 05-06 capital employed ratio was 1.94 1.49 & 1. While in 06-07 it was 1.44.fictitious assets.97 1.1) Meaning: This ratio establishes a relationship between how much capital employed in the company and the net worth. Capital employed including share capital.47 444.85 1.78 2008 2096. 2.78. it decreases and in 07-08 it slightly decreased and it was 1. This ratio is found out to know how much capital is employed to net worth.75 648.12 1459.81 2007 1154.57 1859. 2.81 times more than net worth of the company. reserves and surplus and long term loans and net worth includes share capital and reserves and surplus. 55 S .V.2) Formula: CE to NW Ratio = Capital Employed Net Worth inclu.and in last 2 years it was 1.49 2010 2918. INSTITUTE OF MANAGEMENT . Long term loans are not much employed so this ratio is near to one and it remains same for last three years. share capital Capital Employed = share capital + reserves & surplus + secured Loans – fictitious Assets Net worth = share capital+ reserves & surplus .81 that means company‟s total capital is 1.75 1.56 1.57 respectively.3) Particular Capital Employed(RS IN CRORES) Net Worth(RS IN CRORES) Capital Employed to Net Worth Ratio 2006 804.
3.29 3.2) Formula: Fixed Interest Coverage Ratio = Earning Before Interest And Taxes Interest 3. From the table.91 2009 468.95 2008 388.4) Analysis: This ratio measures the debt serving capacity of a firm insofar as fixed interest on long term loan is concerned. 56 S .99 5.08 29.83 51.98 2007 243.32 9.09 5.99 40.32 2010 476. INSTITUTE OF MANAGEMENT .03 63.48 56.3) FIXED INTEREST COVERAGE RATIO 3. This ratio can be determined by dividing the operating profits by the fixed interest charges on loan.97 7.3) Particular EBIT(RS IN CRORES) Interest(RS IN CRORES) Fixed Interest Coverage Ratio 2006 174.1) Meaning: This ratio measures the debt serving capacity of a firm insofar as fixed interest on long term loan is concerned. It means that the financial strength of the company is sound because it has greater ability to handle fixed charge liabilities. it is clear that this ratio shows increasing trend.25 6.V.
The profitability ratios show the combined effects of liquidity. and debt management on operating results. INSTITUTE OF MANAGEMENT . asset management.C) PROFITABILITY RATIO The purpose of study and analysis of profitability ratios are to help assessing the adequacy of profits earned by the company and also to discover whether profitability is increasing or declining.V. capital employed. shareholders funds etc. Profitability ratios are measured with reference to sales. The profitability of the firm is the net result of a large number of policies and decisions. The major profitability ratios are as follows : 1) Gross Profit Ratio 2) Net Profit Ratio 3) Operating Profit Ratio 4) Operating Ratio 5) Expenses Ratio 6) Return On Shareholder’s Fund 7) Return On Total Assets 8) Return On Capital Employed 57 S .
2) Formula: Gross Profit Ratio = (Sales – Cost Of Goods Sold) *100 Net Sales 1. 58 S . INSTITUTE OF MANAGEMENT .04 2007 203 1117.41 21.04% which is low because near to 30% is good for the company.23 1655.1) Meaning: The ratio measures the gross profit margin on the total net sales made by the company.16 Cost Of Goods Sold = Opening Stock+ direct exp.7 19.46 2009 404. From 06-07 to 09-10 it shows increasing trend.45 2010 425. 1.V.51 2010. In 05-06 this ratio was 17. – closing stock Net sales = sales – other income 1.76 18. The gross profit represents the excess of sales proceeds during the period under observation over their cost. before taking into account administration.4) Analysis: The ratio measures the gross profit margin on the total net sales made by the company.1) GROSS PROFIT RATIO 1.42 17. selling & distribution and financial charges.16 2008 322.3) Particular Gross Profit(RS IN CRORES) Net Sales(RS IN CRORES) Gross Profit Ratio(%) 2006 145.55 21.43 853.06 1883.
7 13.55 13.4) Analysis: This ratio establishes relationship between net profit and sales of firm.71 1883.78% which is not good for the company.78 2007 130. In 06-07 it slightly increased and it was 11.V.02 853.2) NET PROFIT RATIO 2.76 11.2) Formula: Net Profit Ratio = Profit After Tax *100 Net Sales 2. 2.1) Meaning: This ratio establishes relationship between net profit and sales of firm.7 2010.07 2009 366.41 19. interest & tax is deducted.58 1117.68%. As compare to both years in 07-08 it further increased and it was 13.33 1655.3) Particular PAT(RS IN CRORES) Net Sales(RS IN CRORES) Net Profit Ratio(%) 2006 92.61 2.47 2010 273. In 05-06 the ratio was 10.68 2008 216.07%.42 10. INSTITUTE OF MANAGEMENT .47% 59 S . The ratio was highest in 08-09 which was 19. The ratio is designed to focus attention on the net profit margin arising from the business operations business after operating expenses.
19 3. 60 S .76 0.7 1117.3) OPERATING PROFIT RATIO 3.19 and it was same in 2010 which is slightly increasing.48 44.08 29. In 05-06 Operating Profit Ratio was 0.17 which was very low. 3.V.19 2008 388.17 2007 243.3) Particular EBIT(RS IN CRORES) Other Income(RS IN CRORES) Net Sales(RS IN CRORES) Operating Profit Ratio 2006 174.73 1883.4) Analysis: This ratio measures a relationship between operating profit and net sales of the company.42 0.55 0.21 2009 468. As compare to previous year in 06-07 it was 0.56 1655.83 96.2) Formula: Operating Profit Ratio = (Earning Before Interest & Tax – Other Income) Net sales 3.41 0.03 94. INSTITUTE OF MANAGEMENT .20 2010 476. It is focus on profit arising from business operations before interest & tax is deducted and after the deduction of other incomes. Though sales were showing increasing trend but operating profit was fluctuating.7 0.79 853.1) Meaning: This ratio measures a relationship between operating profit and net sales of the company.91 2010.99 26.
From the above table we can say that operating ratio is almost constant in last 5 years and it is high.8 2010 0.21 0. to sales is the operating ratio.1) Meaning: The ratios of all operating expenses that means material used. labour.3) Particular Operating Profit Ratio Operating Ratio 2006 0.20 0. 61 S .81 2008 0. income tax.17 0. 4.19 0. INSTITUTE OF MANAGEMENT . labour.19 0.81 4.4) OPERATING RATIO 4. administration & selling expenses etc. dividends and reserves.4) Analysis: The ratios of all operating expenses that means material used. This is less favourable because it would have small margin to cover interest. to sales is the operating ratio.79 2009 0.83 2007 0. administration & selling expenses etc.2) Formula: Operating Ratio = 1 – Operating Profit Ratio 4.V.
55 81.5) EXPENSE RATIO 5.78 1655.63 2010. selling & distribution expenses and administrative expenses.23 2009 1510.1) Meaning: This ratio measures a relationship between total expense incurred by the company and net sales.42 83. employee cost. It shows that how much company is expending for selling its product.V.4) Analysis: This ratio measures a relationship between total expense incurred by the company and net sales.09 2007 900.11 1883.18 2010 1630. the raw material consumed cost increased and overall expenses of the company increased. 62 S .2) Formula: Expense Ratio = Total Expenses *100 Net Sales 5.3) Particular Total Expenses(RS IN CRORES) Net Sales(RS IN CRORES) Expenses Ratio(%) 2006 709. Total expenditure includes raw material consumed.47 1117.14 853.41 80.10 5. Total expenditure shows small fluctuations since last 5 years. As production increased. INSTITUTE OF MANAGEMENT .76 80.7 79. 5.56 2008 1311.
7 1859.82%.02 444.56 22.V.71 1615.94 20. Funds employed by the shareholder are not giving them sufficient return.3) Particular PAT(RS IN CRORES) 2006 92.33 1459.68 2007 130.72%.75 20.82 2009 366. INSTITUTE OF MANAGEMENT .97 14. Capital + reserves & surplus – fictitious assets 6. 6.68%. And in 09-10 it further decreased to 14.72 Shareholder‟s Fund(RS IN CRORES) Return On Shareholder‟s Fund(%) 6. This ratio is an important yardstick of performance for equity shareholder since its indicates the return on the funds employed by them. In 07-08 it decreased up to 14.13 2008 216. In 05-06 the ratio was 20. 63 S .2) Formula: Return On Shareholder’s Fund = Profit After Tax *100 Shareholder’s Fund Shareholder’s Fund = equity sh.85 14.58 648.70 2010 273.1) Meaning: This ratio express the profit after tax in terms of the equity shareholder‟s funds. Decreasing trend shows that this is not a good option for investing.4) Analysis: This ratio expresses the profit after tax in terms of the equity shareholder‟s funds.6) RETURN ON SHAREHOLDER’S FUND 6.
V.33 2007 130.7 4594.2) Formula: Return On Total Assets = Profit After Tax *100 (Fixed assets+Inbvestments+Current assets) 7.37 6.96 7.59 5.17 2009 366.68 7. From 2006 to 2010 the ratio shows many fluctuations because total assets of the company was increasing but profits was not constant in last five years. 64 S . INSTITUTE OF MANAGEMENT .4) Analysis: This ratio indicates relationship between profit after tax and total assets employed. 7.33 8.65 7.90 2008 216.3) Particular PAT(RS IN CRORES) Total Assets(RS IN CRORES) Return On Total Assets(%) 2006 92.02 1255.58 1652.The profitability of the firm is measured by establishing relation of net profit with the total assets of the organization.33 3506.71 4080.7) RETURN ON TOTAL ASSETS 7.1) Meaning: This ratio indicates relationship between profit after tax and total assets employed.99 2010 273. This ratio indicates the efficiency of utilization of assets in generating revenue.
57 9.87 11.V. 65 S .38 8. INSTITUTE OF MANAGEMENT .31 2009 366.4) Analysis: This ratio shows relationship between profit after tax and total capital employed.27 10.2) Formula: Return On Capital Employed = Profit After Tax *100 Total Capital Employed Total Capital Employed = share capital + reserves & surplus + secured loan 8.8) RETURN ON CAPITAL EMPLOYED 8.33 2097. The ratio in the year 2010 is bit low which is not satisfactorily.58 1156.29 2008 216.7 2918. the return was highest in 2009 which indicates the company is able to earn good profits on its capital employed.02 808.72 15.23 2010 273. It indicates how effectively the operating assets are used in earning return.1) Meaning: This ratio shows relationship between profit after tax and total capital employed.71 2407. 8.37 2007 130.99 11.3) Particular PAT(RS IN CRORES) Total Capital Employed(RS IN CRORES) Return On Total capital Employed(%) 2006 92. In this company.
In turnover ratio. This ratio involves comparison between the level of sales and investment in various accounts – inventories. following ratios are to be computed : 1) 2) 3) 4) 5) 6) Inventory Turnover Ratio Fixed Assets Turnover Ratio Working Capital Turnover Ratio Total Assets Turnover Ratio Net Worth Turnover Ratio Debtors Turnover Ratio 66 S . debtors. Turnover ratios are also called activity ratios because they indicate the spend with which assets are being converted into sales. fixed assets etc. INSTITUTE OF MANAGEMENT .V.D) TURNOVER RATIO Turnover ratio involved a relationship between sales and assets. This ratio measures how effectively the firm employes its resources.
1) INVENTORY TURNOVER RATIO 1. In 07-08 it was further increased up to 8. The higher the stock turnover rate or the lower the stock turnover period the better.65 times and also cost of goods sold increased in 07-08 is higher than previous year. 1.3) Particular COGS(Sales . INSTITUTE OF MANAGEMENT .89 times their inventory was decreasing.04 8.GP) (RS IN CRORES) Average Inventory(RS IN CRORES) Inventory Turnover Ratio(Times) 2006 707.28 8.99 86.60 2010 1585.91 7.89 2008 1333. 67 S .21 2007 914.06 1.1) Meaning: The inventory turnover ratio measures how many times a company‟s inventory has been sold during the year.21 times inventory was sold during the year that is good for the company.V.04 174.65 2009 1479.47 154.76 115.21 times that means 8.4) Analysis: The inventory turnover ratio measures how many times a company‟s inventory has been sold during the year. In 05-06 inventory turnover ratio was 8.35 172. In 06-07 this ratio slightly decreased from the previous year and that is 7. It was highedt in 2009-10 which means that the company is able to secure more sales.93 9.24 8.2) Formula: Inventory Turnover Ratio = Cost Of Goods Sold Average Inventory Average Inventory = opening stock + closing stock 2 1.
Hence.2)FIXED ASSETS TURNOVER RATIO 2.54 1.53 1.96 1.59 1.82 times and in 2009-10 it was 1.76 1655. INSTITUTE OF MANAGEMENT . the company should utilize its assets efficiency to maximize the amount of sales.55 1221. Net assets were also increased up to considerable extent. 2.29 1336.50 Fixed Assets Turnover Ratio(Times) 2.82 2007 2008 1117. The management purchased new fixed assets because they had expanded their operation.7 635.41 2010.43 783. The assets are used to generate sales.1) Meaning: The relationship between net sales and fixed assets is known as fixed assets turnover ratio.11 2009 2010 1883.42 469.V. In 06-07 assets were not effectively used so it results into slight decreased in this ratio. In 05-06 ratio was 1.3) Particular Net Sales(RS IN CRORES) Net Fixed Assets(RS IN CRORES) 2006 853.76 2. 68 S .4) Analysis: The relationship between net sales and fixed assets is known as fixed assets turnover ratio.Net sales was increasing in last five years.2) Formula: Fixed Assets Turnover Ratio = Net Sales Net Fixed Assets 2.50.
05 1. 69 S .V.1) Meaning: This ratio indicates the extent of working capital turned over in achieving sales of the firm.04 3. 3.62 2. INSTITUTE OF MANAGEMENT .42 449. Working capital is difference between current assets and current liability of the company.15 2010 2010.36 1.41 1640.90 2007 1117.2) Formula: Working Capital Turnover Ratio = Net Sales Net Working Capital Net Working Capital = current assets – current liability 3. This ratio was highest in 2006-07 and it was lowest in 2007-08.16 2008 1655.76 518.59 1.98 2009 1883.3) Particular Net Sales(RS IN CRORES) Net Working Capital(RS IN CRORES) Working Capital Turnover Ratio(Times) 2006 853.47 0.55 1927.3)WORKING CAPITAL TURNOVER RATIO 3.7 1690.4) Analysis: This ratio indicates the extent of working capital turned over in achieving sales of the firm.
76 1652.4) Analysis: This ratio establishes a relationship between net sales and total assets. Hence.3) Particular Net Sales(RS IN CRORES) Total Assets(RS IN CRORES) Total Assets Turnover Ratio(Times) 2006 853. The assets are used to generate sales for a firm. the company should utilize its assets efficiently to maximize the amount of sales.2) Formula: Total Assets Turnover Ratio = Net Sales Total Assets 4.68 0.33 0.41 4080.44 4. It shoes inefficient utilization of resources.V. This ratio shows firm‟s ability in generating sales from all financial resources commited to total assets.68 times. INSTITUTE OF MANAGEMENT .68 2007 1117.65 0. 70 S .1) Meaning: This ratio establish a relationship between net sales and total assets.44 times which was slightly lower than previous years. 4.37 0.55 4594. In 09-10 ratio was 0.4)TOTAL ASSETS TURNOVER RATIO 4.42 1255. In 05-06 & 06-07 this ratio was 0.7 3506.68 2008 1655.46 2010 2010.47 2009 1883. This ratio shows firm‟s ability in generating sales from all financial resources committed to total assets.59 0.
5) NET WORTH TURNOVER RATIO 5.76 648. This ratio shows ability to generate sales from net worth of the company.V. Capital 5. 71 S . the owner has committed to carry out firms operation is low.17 2010 2010.85 1.1) Meaning: This ratio establishes a relationship between net sales and net worth. This means that the company is not using the funds provided by the owner efficiently.08 5.72 2008 1655. INSTITUTE OF MANAGEMENT .94 1.3) Particular Net Sales(RS IN CRORES) Net Worth(RS IN CRORES) Net Worth Turnover Ratio(Times) 2006 853. Net worth of the company includes equity share capital and reserves of the company.2) Formula: Net Worth Turnover Ratio = Net Sales Net Worth Excl.97 1.55 1859. 5.7 1459.42 444. It also means that the productivity of the sources. Pref.13 2009 1883. From the above table.56 1.4) Analysis: This ratio establishes a relationship between net sales and net worth.92 2007 1117. This ratio shows ability to generate sales from net worth of the company. we can say that the net worth turnover ratio is decreasing from 2005-06.75 1.41 1615.
66 5.06 5. Generally higher the ratio.8 677.7 1883.47 3.3) Particular Net Sales(RS IN CRORES) Debtors(RS IN CRORES) Debtors Turnover Ratio(Days) 2006 2007 2008 2009 2010 853. The company should follow a reasonable collection policy which is determined on the basis of practice of trade credit in the industry. It also implies better liquidity as debtors make prompt payment. This means that the company follows very strict collection policy which may reduce the volume of sales.25 3.42 1117. INSTITUTE OF MANAGEMENT .67 213.55 150.04 476.41 2010.1) Meaning: This ratio measures the amount of resources tied up in debtors is reasonable and whether the company has been efficient in converting debtors into cash. 72 S .76 1655.4) Analysis: This ratio measures the amount of resources tied up in debtors and whether the company has been efficient in converting debtors into cash.2) Formula: Debtors Turnover Ratio = Net Sales Debtors + Bills Receivables 6.80 2.V.97 6. From the above table we can say that the ratio is a moderate in all the 5 years. better the position.7 495. But this can also be looked as very short collection period. 6.6) DEBTORS TURNOVER RATIO 6. This indicates that the company‟s credit collection department is functioning very efficiently.
Valuation approach is the general way which is followed to determine a value indication of a business. they are of no interest to most market participants who prefer growth stocks. or vice-versa. In this context. INSTITUTE OF MANAGEMENT . A valuation ratio is calculated by dividing a measure of price by a measure of value. Business Valuation is an estimation of the market value of a corporation / business. The market value is determined by multiplying the quoted share price of the company by the number of shares.V. It differs from appraisal in the sense that appraisals only takes into consideraton the tangible. corporate ownership interest. growth. that is. or intangible asset. or momentum stock. security. compared to some measure of profit or value. value stocks are out of favor. The following are the valuation ratios : 1) 2) 3) Dividend Yield Ratio Dividend Payout Ratio Price Earning Ratio 73 S .E) VALUATION RATIO A valuation ratio is a measure of how cheap or expensive a security (or business) is. Valuation ratios tell you something about whether the market is pricing your candidate as a value.
07 0.28 0. Market price per share 1.3) Particular DPS(Rs) MPS(Rs) Dividend Yield Ratio(%) 2006 0.1) DIVIDEND YIELD RATIO 1. This measure is useful for investors who are interested in yield per share. 74 S .014 2007 0. it was same in 2006 and in 2010 with minimal fluctuations i between the year.1 189. From the table above.65 0.88 62.014 1.2) Formula: Dividend Yield Ratio = Dividend Per Share Avg. INSTITUTE OF MANAGEMENT .006 2010 1. It shoes the actual returns on the amount invested by him.005 2009 1.1) Meaning: This ratio reflects the percentage yield that an investor receives on this investment at the current market price of the shares.2 88.96 96. 1.010 2008 1 195.2 0.4) Analysis : This ratio reflects the percentage yield that an investor receives on this investment at the current market price of the shares.V.1 0.
4) Analysis: Dividend payout ratio indicates the extent of the net profits distributed to the shareholders as dividend.35 0. From the above table that although comany‟s earning per share is increasing but it is paying less dividend to its investors and its preferring to reinvest in the business more. 2.15 0.2 0.09 2007 0.88 9.06 2010 1.1) Meaning: Dividend payout ratio indicates the extent of the net profits distributed to the shareholders dividend.3) Particular DPS(Rs) EPS(Rs) Dividend Payout Ratio(Times) 2006 0.06 2.2) DIVIDEND PAYOUT RATIO 2. INSTITUTE OF MANAGEMENT .1 19. A high payout signifies a liberal distribution policy and a low payout reflects conservative policy.68 0. 75 S .33 0.08 2008 1 18.2 20.05 2009 1.96 12.V.2) Formula: Dividend Payout = Dividend Per Share Earning per share 2.
INSTITUTE OF MANAGEMENT . This ratio was highest in the year 2007-08 which indicates the investor‟s confidence in the stability and growth of company‟s income.28 18. It measures the number of times the earnings per share discounts the market price of an equity share. 3.39 3.2) Formula: Price EarningRatio = Avg.4) Analysis: The ratio indicates the market price of an equity share to the earning per share.65 20.1) Meaning: The ratio indicates the market price of an equity share to the earning per share.2 12.07 19.1 9.3) Particular MPS(Rs) EPS(Rs) Price Earning Ratio(Rs) 2006 62.66 2007 96.61 2010 88. 76 S .68 9.64 2009 189.2 4.3) PRICE – EARNING RATIO 3. It signifies the price that is currently rulling in the market for each rupee of earnings being made by company per share.33 6.35 10.15 7.V. Market price per share Earning Per Share 3.92 2008 195.
INSTITUTE OF MANAGEMENT .CHAPTER 8: RECOMMENDATONS & SUGGESTIONS 77 S .V.
solar water heating systems and rain harvesting structures. among others. This initiative will help the country in general and the company in particular. and electrical equipments . fuses. The company shares excellent business relationships with the electrical sector as it is one of the largest enclosure manufacturers for various products like meters. Sintex is pioneer in manufacturing of plastic moulded products which exports their products in various places beyond the country and thus it has bright prospect ahead of it. One of the most important thing is they are running their business since last 35 years. INSTITUTE OF MANAGEMENT . At present there are many competitors. Ahmadabad who have helped it to spread awareness regarding green and sustainable building materials and technologies. SINTEX INDUSTRY LTD. The company integrated certain “green” elements. So they are having good experience of the market.V. gray water recycling systems. They have been associated with CEPT University. 78 S . The company also serviced utility companies in both private and public sectors and executed turnkey projects for lastmile connectivity in Rajasthan. is one of the big names in production of plastic products and textiles. In the forth coming years the company will be able to offer affordable green housing solutions using several technologies like decentralized wastewater treatment systems. Karnataka and Gujarat. so they have to give their best in terms of quality of the products. by bringing about green orientation in the field of build up structures.
INSTITUTE OF MANAGEMENT .CHAPTER 9: OTHER TOPICS 79 S .V.
39 444.94 648.28 2002 376.12 2002 2003 2004 2005 2006 2007 2008 2009 2010 327.SALES YEARS SALES/OTHER INCOME 2001 296.42 2007 1117.55 SALES/OTHER INCOME 2500 2000 1500 1000 500 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 SALES/OTHER INCOME NET WORTH YEARS NET WORTH 2001 320.78 500.56 2003 447.97 1615.85 NET WORTH 2000 1500 1000 500 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 NET WORTH YEARS 80 S .7 2009 1883.01 2004 547.98 2006 853.41 2010 2010.28 348.4 346.76 2008 1655.75 1459. INSTITUTE OF MANAGEMENT .56 1859.V.27 2005 687.
91 2003 84.58 2002 65.71 2006 174.09 2005 123.5 71.85 98.PROFIT BEFORE DEPRICIATION & TAX YEARS PBDT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 40.43 203 332.53 2007 243.06 425.03 2010 476.51 PBDT 450 400 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YEARS PBDT PROFIT BEFORE DEPRICIATION INTEREST AND TAX YEARS PBDIT 2001 59.48 2009 468. INSTITUTE OF MANAGEMENT .23 404.29 44.99 2008 388.86 145.34 56.V.99 2004 98.83 PBDIT 500 450 400 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YEARS PBDIT 81 S .
98 2003 624.56 1099.91 92.03 3696.7 2002 569.66 53.49 3148.78 4208.V.48 1401.71 273.33 266.64 TOTAL ASSETS 4500 4000 3500 3000 2500 2000 1500 1000 500 TOTAL ASSETS 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YEARS 82 S .95 33.02 130.18 2004 694.58 216.PROFIT AFTER TAX YEARS PAT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 24.14 19. INSTITUTE OF MANAGEMENT .69 2005 2006 2007 2008 2009 2010 916.7 PAT 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YEARS PAT TOTAL ASSETS YEARS TOTAL ASSETS 2001 582.22 23.
14 9.95 12.2 EPS 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YEARS EPS 83 S .43 7.36 2. INSTITUTE OF MANAGEMENT .97 4.32 2.35 19.V.68 20.15 18.EARNING PER SHARE YEARS EPS 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 3.
Flexibility:The capital structure should not be inflexible to meet the changing conditions. INSTITUTE OF MANAGEMENT . Solvency:The use of excessive debt threatens the solvency of the company. It should also be possible for the company to provide funds whenever needed to finance its profitable activities. It should be possible for a company to adapt its capital structure within minimum cost and delay if warranted by a changed situation. The debt capacity of a company depends on its ability to generate future cash flows. It should have enough cash to pay creditors. maximum use of leverage at a minimum cost should be made. The value will be maximized when the marginal real cost of each source of funds is the same. it should be used otherwise its use should be avoided. To the point debt does not add significant risk. long-term debt. preference share capital and equity share capital including reserves and surplus. The optimum capital structure is obtained when the market value per share is maximum. Capacity:The capital structure should be determined within the debt capacity of the company. A sound appropriate capital structure should have the following features: Profitability:The capital structure of the company should be most advantageous.CAPITAL STRUCTURE Capital structure refers to the mix of long-term sources of funds. fixed charges and principles. 84 S . The financial manager should plan an optimum capital structure for his company. Within the constraints.V. and this capacity should not be exceeded. such as debentures.
12 % 1.73 429.83 21.13 1032. 85 S . The share of secured and unsecured loan was about 35% and 21% respectively.73 359.CAPITAL STRUCTURE OF 2005-06 PARICULARS Share Capital Reserves & Surplus Secured Loans Unsecured Loans Total RS IN CRORES 19. This shows that the liabilities of the interest payments on the company is high.64 34.53 223.62 100 Unsecured Loans 21% 2005-06 Share Capital 2% Reserves & Surplus 42% Secured Loans 35% ANALYSIS:In the year 05-06. INSTITUTE OF MANAGEMENT .V.91 41. the reserves and surplus constituted around 42% where as the share capital constituted merely 2% of the total capital structure.
It means that company has distributed less profit and maintain excessive reserves and surplus to execute growth plans.67 47. 86 S .99 100 2006-07 Unsecured Loans 13% Share Capital 2% Secured Loans 38% Reserves & Surplus 47% ANALYSIS:In the year 06-07. the reserves and surplus constituted around 47% where as the share capital constituted merely 2% of the total capital structure.68 506 172.28 38.76 1329. This shows that the liabilities of the interest payments on the company are high.63 % 1. INSTITUTE OF MANAGEMENT . Here from the previous year reserves are increasing and secured loans are also increasing.06 12.19 628.CAPITAL STRUCTURE OF 2006-07 PARICULARS Share Capital Reserves & Surplus Secured Loans Unsecured Loans Total RS IN CRORES 22. The share of secured and unsecured loan was about 38% and 13% respectively.V.
87 S .05 100 Share Capital 1% 2007-08 Unsecured Loans 30% Reserves & Surplus 48% Secured Loans 21% ANALYSIS:In the year 07-08. The share of secured and unsecured loan was about 21% and 30% respectively.83 21.02 636.05 % 0. the reserves and surplus constituted around 48% where as the share capital constituted merely 1% of the total capital structure. This shows that the liabilities of the interest payments on the company are high.78 2998.V. INSTITUTE OF MANAGEMENT .90 47.15 900.CAPITAL STRUCTURE OF 2007-08 PARICULARS Share Capital Reserves & Surplus Secured Loans Unsecured Loans Total RS IN CRORES 27.1 1434.22 30.
INSTITUTE OF MANAGEMENT .25 100 2008-09 Unsecured Loans 32% Share Capital 1% Reserves & Surplus 45% Secured Loans 22% ANALYSIS:In the year 08-09.76 44.70 22.28 32.99 1146.CAPITAL STRUCTURE OF 2008-09 PARICULARS Share Capital Reserves & Surplus Secured Loans Unsecured Loans Total RS IN CRORES 27.09 % 0.1 1588.37 3554. the reserves and surplus constituted around 45% where as the share capital constituted merely 1% of the total capital structure. The share of secured and unsecured loan was about 22% and 32% respectively. This shows that the liabilities of the interest payments on the company are high.63 791.V. 88 S .
INSTITUTE OF MANAGEMENT . the reserves and surplus constituted around 45% where as the share capital constituted merely 1% of the total capital structure.CAPITAL STRUCTURE OF 2009-10 PARICULARS Share Capital Reserves & Surplus Secured Loans Unsecured Loans Total RS IN CRORES 27.67 45.66 100 2009-10 Unsecured Loans 28% Share Capital 1% Reserves & Surplus 45% Secured Loans 26% ANALYSIS:In the year 09-10.43 26.1 1832. 89 S .65 4034. This shows that the liabilities of the interest payments on the company are high.22 % 0.75 1058. The share of secured and unsecured loan was about 26% and 28% respectively.V.24 27.72 1115.
V. INSTITUTE OF MANAGEMENT .ANNEXURE 90 S .
17 -130.61 -152.15 -99.36 3566.87 444.V.68 429.37 4056.53 223.54 145.52 -61.73 791.63 789.00 66.10 12.63 294.12 -72.49 1773.43 38.89 181.64 437.13 26.74 602.53 45.05 1336.79 206.75 807.26 68.30 292.95 1037.00 36.05 0.59 136.10 107.38 637.65 636.47 29.73 179.62 2.07 522.77 162.10 22.41 429.35 0.58 304.85 246.17 1690.82 119.75 53.96 205.70 677. INSTITUTE OF MANAGEMENT .19 0.82 1221.79 37.15 900.47 1.11 353.67 355.78 1536.68 650.99 629.99 1146.70 1325.15 4056.00 628.87 506.14 2292.13 881.28 150.75 1882.53 1434.53 674.09 518.65 58.04 385.10 1640.47 27.59 4.04 91 S .49 247.72 1115.00 172.23 59.43 469.12 1058.42 635.00 327.31 137.29 197.02 156.87 359.96 242.83 86.26 678.24 27.BALANCE SHEET OF SINTEX INDUSTRIES LIMITED PARTICALAR SOURCES OF FUNDS: Share Capital Share Warrants & Outstandings Total Reserves Shareholder's Funds Secured Loans Unsecured Loans Total Debts Total Liabilities APPLICATION OF FUNDS : Gross Block Less: Accumulated Depreciation Net Block Capital Work in Progress Investments Current Assets.73 2221.02 295.15 495.58 1079.27 1832.06 783.54 213.83 810.30 0.09 1575.26 1329.29 163.55 22.73 454.15 289.93 476.43 289.10 50.65 2174.06 815.79 291.66 1037.36 27.63 1627.13 582.71 254.00 1588.31 581.73 5.02 1511.37 1938.37 1329.87 0.98 15.70 1927.94 168.53 19.71 449.26 2450.06 228.80 1099. Loans & Advances Inventories Sundry Debtors Cash and Bank Other Current Assets Loans and Advances Total Current Assets Less: Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets / Liabilities Total Assets Contingent Liabilities Book Value Adjusted Book Value 2006 2007 2008 2009 2010 (RS IN CRORES) 19.69 3566.09 317.45 3048.64 312.93 3048.10 22.
84 2103.66 74.47 32.17 75.17 709.08 29.11 373.23 51.47 161.92 96.56 55.04 1117.48 67.72 33.69 94.80 95.09 144.68 9.70 -20.01 1.88 202.48 341.40 46.PROFIT & LOSS ACCOUNT OF SINTEX INDUSTRIES LIMITED PARTICULAR INCOME : Gross Sales Less: Sales Returns Less: Excise Duty Net Sales EXPENDITURE : Increase/Decrease in Stock Raw Material Consumed Power & Fuel Cost Employee Cost Other Manufacturing Expenses General and Administration Expenses Selling and Distribution Expenses Miscellaneous Expenses Less: Expenses Capitalised Total Expenditure Operating Profit (Excl OI) Other Income Operating Profit Interest PBDT Depreciation Profit Before Taxation & Exceptional Items Profit Before Tax Provision for Tax Profit After Tax Adjustments to PAT Profit Balance B/F Appropriations Equity Dividend % Earnings Per Share Adjusted EPS 2006 2007 2008 2009 2010 (RS IN CRORES) 913.63 30.70 280.80 308.90 44.53 280.10 92 S .00 41.95 130.53 161.25 332.97 7.63 1883.03 63.60 20.68 114.63 379.98 0.51 84.29 92.30 94.06 62.76 -37.78 24.99 40. INSTITUTE OF MANAGEMENT .89 510.53 64.89 59.08 1510.41 -20.95 266.79 57.38 48.66 1212.82 93.78 273.80 70.63 43.73 468.71 456.15 71.33 4.86 77.00 9.47 695.29 134.01 2010.88 1790.55 14.97 404.03 341.79 174.16 722.33 280.08 58.56 388.56 93.99 203.91 1159.98 1982.83 51.00 15.56 853.47 217.25 1.66 341.92 44.20 10.00 20.17 68.V.04 1311.43 32.33 900.91 476.17 947.29 26.44 104.77 5.13 50.00 19.53 30.76 1025.02 110.30 22.04 98.00 11.75 72.20 216.88 20.70 58.01 1272.42 6.80 497.32 425.87 60.48 56.70 674.98 60.58 177.40 341.59 1655.78 343.22 70.87 55.14 144.70 243.70 41.99 30.29 29.30 114.80 3.85 1630.54 34.
2. An audit includes examining. as well as evaluating the overall financial statement presentation. As required by the Companies (Auditor‟s Report) Order. The said accounting treatment has been followed as prescribed under the Scheme. as per which Scheme. 5. 93 S . The relevant Indian Generally Accepted Accounting Principles. We have audited the attached Balance Sheet of SINTEX INDUSTRIES LIMITED (“the Company”) as at 31st March.AUDITORS’ REPORT To the Members of Sintex Industries Limited 1. 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act. 2010.53 crores during the year) being expenses of the nature as specified under the Scheme. These financial statements are the responsibility of the Company‟s Management. Had the Company accounted for these expenses as per Generally Accepted Accounting Principles in India. in absence of such Scheme.53 crore for the year ended on 31st March. Further to our comments in the Annexure referred to in paragraph 3 above.V. Our responsibility is to express an opinion on these financial statements based on our audit. on a test basis. 2010 and Profit after tax would have been lower by ` 10. We conducted our audit in accordance with the auditing standards generallaccepted in India. instead of accounting for as per the Scheme. the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. We believe that our audit provides a reasonable basis for our opinion. 1956. the balance of Securities Premium Reserve / IBDR would have been higher by ` 141. 4. 2010. Without qualifying our opinion. 2010 (including ` 10. An audit also includes assessing the accounting principles used and the significant estimates made by the Management. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 3. we report as follows: a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. we draw attention to Note 4 of Schedule 20 to these financial statements. INSTITUTE OF MANAGEMENT . would not permit the adjustment of expenses against the Securities Premium Reserve / IBDR. we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. in the year 2008-09 the Company earmarked ` 200 crore from Securities Premium Reserve to International Business Development Reserve Account (the “IBDR”) and has adjusted against the earmarked balance of IBDR. evidence supporting the amounts and the disclosures in the financial statements.46 crore upto 31st March. regarding the Scheme of Arrangement (the “Scheme”) approved by the Honourable High Court of Gujarat. ` 141.46 crore as at 31st March. both annexed thereto.
the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act. the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.V. of the state of the affairs of the Company as at March 31. d) in our opinion. 1956. 35701 Ahmedabad Date: April 30. 1956. 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet. c) the Balance Sheet. 2010. 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act. e) in our opinion and to the best of our information and according to the explanations given to us. proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. the said accounts give the information required by the Companies Act. and iii) in the case of the Cash Flow Statement. of the cash flows for the year ended on hat date. INSTITUTE OF MANAGEMENT . none of the Directors is disqualified as on 31st March. 2010 94 S . 2010 taken on record by the Board of Directors.b) in our opinion. 117365W) Gaurav J. For Deloitte Haskins & Sells Chartered Accountants (Registration No. 6. the Balance Sheet. ii) in the case of the Profit and Loss Account. of the profit for the year ended on that date. Shah Partner Membership No. On the basis of the written representations received from the Directors as on 31st March.
michelfortin. 26-50 “Accounting”.net/servicemarketingmix.. Ravi.wikipedia. Kishore M. 310-334.netmba. Radhaswamy M. 1999. „Taxmann‟ SOURCES OF INFORMATION http://www. “Advanced Accountancy”.google.com/terms/f/financialmanagement www.yahoo.com 95 S .com/how-to-target-your-perfect-customer/ Main search engines are: www. „Sultan Chand &Sons‟.htm l http://www. L. INSTITUTE OF MANAGEMENT .investopedia. „The ICFAI University‟.V.html http://www.com/definition/.BIBLIOGRAPHY Gupta R.com www.learnmarketing.com www.business dictionary. “Cost & Management Accounting”.com/marketing/mix/ http://www. 2000.
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