CHAPTER – 01

1.1. CONCEPTUAL BACKGROUND OF THE STUDY

The focus of research in this project is related to the subject of finance. Finance
plays a crucial and success role of a company. Finance enables a company to
develop effective financial plans and budgets. It involves forecasting future
financial needs, setting financial goals, and allocating resources to achieve those
goal. Financial planning helps companies make informed decisions about
investments, expenses, and revenue generation strategies.
Finance is essential for determining how capita resources are allocated within a
company. It involves evaluating investment opportunities, analysing potential
risks and returns, and deciding which projects or initiatives should receive
funding. Effective capital allocation ensures that resources are utilised optimally
to maximize value for shareholders.
Finance provides the tools and framework necessary for making sound financial
decisions. It involves analysing financial data, conducting cost benefit analyses,
and evaluating the financial implications of different options. Financial decision
making encompasses capital budgeting, capital structure decisions, dividend
policy, and working capital management.
Financial planning is critical to any organization, large or small, private or
public, for profit or not-for-profit. Financial planning allows a firm to understand
the past, present, and future funding needs and distributions required to satisfy
all interested parties.
For-profit businesses work to maximize the wealth of the owners. These could
be shareholders in a publicly traded corporation, the owner managers of a “mom
and pop” store, partners in a law firm, or the principal owners of any other
number of business entities. Financial planning helps managers understand the
firm’s current status, plan and create processes and contingencies to pursue
objectives, and adjust to unexpected events.
The more thoughtful and thorough the financial planning process, the more
likely a firm will be able to achieve its goals and/or weather hard times. Financial

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 plans typically consider the firm’s strategic objectives, ethical practices, and
sources and costs of funds, as well as the development of budgets, scenarios, and
contingencies.
The financial plan Bacon Signs developed was thorough enough to anticipate
when and how growth might occur. The plan that was presented to commercial
banks allowed the firm to be guaranteed new financing at critical moments in
the firm’s expansion.
Finance is a multidisciplinary field that encompasses the study of money,
investments, financial markets and the management of financial resources. As a
research topic explores various aspects of financial systems, decision making
processes, and the behaviour of individuals, organisations, and markets. It draws
on principles and concepts from economics, accounting, mathematics, and
statistics to analyse and understand the complexities of financial transactions,
assets valuation, risk management, and financial performance evaluation.
Finance aims to develop new theories, models, and frameworks that shed light
on financial phenomena and contribute to the advancement of financial practices
and policies.
The study of financial performance analysis is rooted in the understanding that
financial information is a crucial component of assessing the overall
performance and stability of an organization. It involves the systematic
examination and interpretation of financial statements, ratios, and other financial
data to evaluate an organization's profitability, efficiency, liquidity, solvency,
and overall financial health
Another key concept underlying financial performance analysis is the use of
financial ratios. Ratios serve as powerful tools for quantifying the relationships
between different financial variables and assessing the organization's
performance against industry benchmarks or historical data.
Common ratios used in financial performance analysis include profitability
ratios (such as gross profit margin and return on equity), efficiency ratios (such
as inventory turnover and receivables turnover), liquidity ratios (such as current
ratio and quick ratio), and solvency ratios (such as debt-to-equity ratio and
interest coverage ratio). Moreover, financial performance analysis recognizes

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 that financial data should not be viewed in isolation but rather in the context of
the organization's industry, market conditions, and strategic objectives.
This necessitates benchmarking, which involves comparing an organization's
financial performance to that of its competitors or industry peers. Benchmarking
enables analysts to identify areas of relative strength or weakness and understand
the organization's competitive position. Furthermore, the study of financial
performance analysis is grounded in the need for effective decision-making. By
evaluating an organization's financial performance, decision-makers can make
informed choices regarding resource allocation, investment opportunities,
financial planning, and risk management. Financial performance analysis
provides insights into the organization's ability to generate sustainable profits,
meet financial obligations, and adapt to changing market conditions.

The conceptual background for the study of financial performance analysis lies
in recognizing the importance of financial information, understanding the
relationships between financial variables, and considering the organization's
industry and strategic context. Through the systematic analysis of financial
statements, ratios, and benchmarking, financial performance analysis helps
stakeholders evaluate the organization's financial health, make informed
decisions, and drive its long-term success.

Financial performance analysis:

Financial performance analysis involves the examination of financial statements,

including the balance sheet, income statement, and cash flow statement, to
understand the company’s financial position, revenues, expenses, cash flow
activities. It also incorporates the use of financial ratios and benchmarks to
compare the company’s performance against industry standards, peers, and
historical data.
The analysis of financial performance provides valuable insights into a
company’s ability to generate profits, manage its assets and liabilities and
maintain sustainable growth. It helps investors, lenders, shareholders, and other
stakeholders make informed decisions regarding investment, lending, and
overall business strategies.

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 Financial performance refers to the evaluation and measurement of a company’s
financial health, efficiency, and profitability. It involves analysing various
financial metrics, ratios, and indicators to assess how well an organisation is
utilising its resources and generating returns for its stakeholders.

Financial performance analysis serves multiple purpose:

Decision Making: It helps stakeholders make informed decisions related to

investment, lending, mergers and acquisitions, and other strategic initiatives. By
understanding a company’s financial performance, stakeholders can assess its
growth potential, risk level, and overall financial stability.

Performance evaluation: Financial performance analysis allows companies to

evaluate their own performance over time, identify areas of strength and
weakness, and make adjustments to improve financial efficiency and
profitability. It helps management track progress towards goals, set benchmarks
and take corrective actions when necessary.

Investor confidence: analysing financial performance enhances transparency and

trust, attracting potential investors and shareholders. A company with a strong
financial performance record is more likely to garner investors’ confidence and
support lead to increased capital inflows and growth opportunities.

Risk management: financial performance analysis assists in identifying potential

financial risks and vulnerabilities. By assessing liquidity, solvency, and
profitability ratios, companies can proactively manage risks, develop
contingency plans and ensure long term sustainability.

Strategies used to analyse the financial performance:

Financial statement analysis: review the organisation’s financial statements,

including the income statement, balance sheet, and cash flow statement.

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 Ratio analysis: calculate and interpret financial ratios that provide insights into
different aspects of the organisation’s financial performance, such as
profitability, liquidity, solvency, and efficiency.
Trend analysis: compare financial data over multiple periods to identify trends
and patterns. This analysis helps assess the organisation’s financial performance
and its progress over time.
Comparative analysis: compare the financial performance of the organisation
with its industry peers or competitors. This allows for benchmarking and
evaluating how the organisation fares in relation to others in the same industry.
Common size analysis: conduct a common size analysis to determine the
proportion of each financial statement item to a base figure (sales or revenues).
This analysis helps identify changes in the composition of financial statements
and assess the organisation’s operational efficiency.
Cash flow analysis: assess the organisation’s cash flow statement to understand
its cash inflows and outflows, operational activities, investing activities, and
financing activities. This analysis is crucial for evaluating the organisation’s
ability to generate and mange cash.
Break-even analysis: determine organisation’s break-even point, which is the
level of sales or revenue needed to cover all costs. This analysis helps assess the
organisation’s profitability and risks.
Dupont analysis: use the Dupont to evaluate the return on equity by decomposing
it into its components-profit margin, asset turnover, and financial leverage.
Qualitative factors: consider qualitative factors such as market trends,
competitive landscape, management effectiveness, and industry-specific factors
that may impact the organisation’s performance.
Benchmarking: compare the organisation’s financial performance against
industry benchmarks or best practices to identify areas for improvement and
potential areas of strength.

Factors Affecting Financial Performance:

Client Demand: The consulting industry is heavily reliant on client demand for
its services. Economic conditions, industry trends, and business cycles can
impact the demand for consulting services. During periods of economic growth,

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 companies often invest in consulting expertise to capitalize on opportunities
and drive performance improvements.
Service Offerings: The range of services offered by a consulting company plays
a significant role in its financial performance. Companies that provide
specialized services in high-demand areas, such as digital transformation, data
analytics, or sustainability consulting, may experience higher demand and better
financial results.
Reputation and Branding: The reputation and brand image of a consulting firm
influence its ability to attract clients and command higher fees. Established firms
with a strong track record and a reputation for delivering exceptional value are
likely to have a competitive advantage and achieve better financial performance.
Client Relationships: Building long-term client relationships is crucial in the
consulting industry. Maintaining a strong client base and securing repeat
business can lead to stable revenue streams and improved financial performance.
Consulting companies often rely on networking, referrals, and client satisfaction
to cultivate and retain client relationships.
Talent Acquisition and Retention: The success of a consulting firm depends on
its ability to attract and retain top talent. Highly skilled consultants with
specialized knowledge and expertise are valuable assets. Consulting companies
need to invest in talent acquisition, training, and retention strategies to maintain
a competitive edge and deliver high-quality services.
Operational Efficiency: Efficient operations and cost management are vital for
maintaining profitability in the consulting industry. Optimizing internal
processes, managing overhead expenses, and monitoring project profitability are
critical factors that impact the financial performance of a consulting company.
Industry Trends: Staying abreast of industry trends and emerging technologies is
crucial for consulting firms. The ability to adapt and offer innovative solutions
to clients can drive revenue growth and financial success. Firms that fail to keep
up with evolving client needs and industry dynamics may face challenges in
sustaining their financial performance.
When conducting a financial performance analysis of a consulting company, it
is important to consider these industry factors and assess the company's financial
statements, key performance indicators (KPIs), profitability ratios, revenue

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 sources, cost structure, and overall financial health. Comparisons with industry
benchmarks and competitor analysis can provide valuable insights into the
company's performance relative to its peers.
In conclusion, financial performance analysis is a critical process that allows
stakeholders to evaluate a company’s financial health, efficiency, and
profitability. It provides insights into the company’s ability to generate profits,
manage its resources, and meet its financial obligations. By analysing financial
statements, ratios, and indicators stakeholders can make informed decisions,
evaluate performance and manage risks effectively.

1.2. INDUSTRY BACKGROUNND OF THE STUDY

Service Industry

The service industry is a dynamic and vital sector that encompasses a wide range
of businesses dedicated to providing intangible services to individuals,
businesses, and other organizations. This sector plays a significant role in
modern economies, contributing to employment growth, fostering innovation,
and enhancing overall economic development. Within the service industry, one
can find various subsectors, including hospitality, healthcare, transportation,
finance, information technology, consulting, and many more. These service-
oriented businesses focus on meeting the diverse needs and demands of
customers, aiming to improve their well-being, convenience, and efficiency. As
the global economy continues to evolve, the service industry is expected to
thrive, driven by technological advancements, digitalization, and a growing
emphasis on customer-centric approaches, ensuring that it remains a
fundamental pillar of economic prosperity in the years to come.

The industry background of a financial performance analysis study can vary

depending on the specific sector or industry being analysed:
Market Conditions: Understanding the broader market conditions is essential.
Economic factors, industry trends, and market dynamics can significantly impact
the financial performance of companies. Factors like GDP growth, inflation

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 rates, interest rates, and consumer spending patterns can influence revenue
generation, profitability, and overall financial stability.

Industry Structure: Each industry has its unique characteristics, competitive

landscape, and business models that affect financial performance. Factors such
as market concentration, entry barriers, regulatory environment, and
technological advancements shape the financial dynamics within an industry.

Revenue Sources: Analysing the sources of revenue is crucial to understanding

a company's financial performance. Different industries have varying revenue
models, including product sales, service fees, subscription-based models,
licensing, or a combination of these. The stability, growth potential, and
profitability of revenue streams impact the company's financial health.

Cost Structure: Examining the cost structure provides insights into a company's
operational efficiency and profitability. Industries differ in terms of cost drivers
and cost structures. Some common cost categories include cost of goods sold
(COGS), operating expenses, research and development (R&D) costs, marketing
expenses, and administrative overheads. Evaluating cost control measures and
identifying cost saving opportunities can positively impact financial
performance.

Competitive Landscape: Understanding the competitive landscape is crucial for

assessing a company's financial performance. Factors such as market share,
competitive advantages, pricing power, and the ability to differentiate products
or services can influence revenue growth, profit margins, and overall financial
success. Analysing competitors' financial performance helps benchmark a
company's performance against industry peers.

Regulatory Environment: Regulatory factors play a significant role in certain

industries, such as banking, healthcare, energy, and telecommunications.
Compliance with regulations, changes in laws or policies, and potential legal or
regulatory risks can impact financial performance. It is important to consider

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 industry-specific regulations and their implications on revenue generation, costs,
and profitability.

Technological Disruptions: Technological advancements and disruptions can

have a profound impact on financial performance across industries. Companies
that successfully embrace new technologies, adapt their business models, and
leverage innovation tend to outperform their peers. Assessing the company's
approach to digital transformation and its ability to leverage technology can
provide insights into its future financial prospects.

Industry-Specific Metrics: Each industry has its key performance indicators

(KPIs) and financial metrics that are commonly used to assess performance.
Examples include revenue growth rate, gross margin, operating margin, return
on investment (ROI), inventory turnover, customer acquisition cost (CAC),
customer lifetime value (CLV), and others. Analysing these industry-specific
metrics helps gauge financial performance within the context of the particular
sector.

Service Industry in India

The service industry in India is a vital and thriving sector that plays a crucial role
in the country's economic growth. It encompasses a diverse range of services,
contributing significantly to India's Gross Domestic Product (GDP) and
providing employment opportunities to millions of people. India's service
industry is renowned for its Information Technology and IT-enabled services,
with major cities like Bangalore and Hyderabad being global IT hubs. The
country's skilled and English-speaking workforce has made it a preferred
destination for outsourcing services worldwide. Additionally, India's booming
Business Process Outsourcing (BPO) industry serves various international
clients with customer support and back-office operations. The Banking,
Financial Services, and Insurance (BFSI) sector also thrive, with Mumbai
serving as the financial capital of India. The hospitality and tourism industry,
healthcare, education, retail, and entertainment sectors are all significant
contributors to the service industry's growth. Despite facing challenges, such as

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 skill development and infrastructure, the service industry in India continues to
evolve and innovate, making it a driving force behind the nation's economic
prosperity and development.

When conducting a financial performance analysis, it is important to consider

the global, national, and regional perspectives of sectoral growth.
This analysis provides insights into the industry's overall trajectory and helps
contextualize the financial performance of the organization under study. Here
are some key points to address:

Global Perspectives: Examine the global growth trends and dynamics of the
sector. Understand factors such as market size, market growth rates, emerging
trends, technological advancements, and the competitive landscape on a global
scale. This analysis helps identify opportunities and challenges that may impact
the financial performance of the organization within the global market.

National Perspectives: Analyse the sectoral growth at the national level.

Understand how the industry is evolving within the specific country in terms of
market size, regulatory environment, government policies, and economic
conditions. Assess the impact of national-level factors on the organization's
financial performance, such as changes in tax regulations, industry-specific
policies, or government support programs.

Regional Perspectives: Consider regional variations in sectoral growth. Analyse

how the industry is performing within different regions or markets. Understand
regional trends, market characteristics, and regional factors that may influence
the organization's financial performance. Regional perspectives provide insights
into specific market dynamics and opportunities that may impact the
organization's operations and profitability.

Market Size and Growth Rates: Assess the current market size of the sector at
the global, national, and regional levels. Evaluate historical growth rates and
forecasted growth projections. Understanding the sector's growth potential and

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 market dynamics is essential for assessing the organization's financial
performance within the broader market context.

Emerging Markets and Opportunities: Identify emerging markets or regions that

present growth opportunities for the sector. Analyse factors such as changing
consumer behaviour, economic development, technological advancements, or
regulatory reforms that may drive growth in these markets. Assess the
organization's presence and performance in these emerging markets and its
potential impact on overall financial performance.

Competitive Landscape: Study the competitive landscape of the sector globally,

nationally, and regionally. Identify key players, market leaders, and their
financial performance. Analyse market share, competitive advantages, and
strategies employed by major players. Understanding the competitive
environment helps evaluate the organization's positioning and competitiveness
in the sector.

Role of Service Sector in Support to the Organisation:

Employment Generation: The service industry is labour-intensive, creating

numerous job opportunities. From skilled professionals like doctors, engineers,
and consultants to frontline service providers in retail and hospitality, the sector
employs a vast portion of the workforce.

Revenue Generation: Service-based businesses generate substantial revenue

through the services they offer. This revenue, in turn, contributes to the country's
GDP and overall economic growth.

Contribution to Government Revenue: The service industry often involves

various taxes and fees that businesses pay to the government, including income
tax, sales tax, and value-added tax (VAT). This revenue helps fund public
services and infrastructure development.

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 Innovation and Productivity: The service sector drives innovation, especially in
areas like information technology and digital services. Innovations in services
can enhance overall productivity, efficiency, and competitiveness in the
economy.

Supporting Other Industries: The service industry supports the growth and
functioning of other sectors. For example, financial services provide capital and
funding to businesses, and transportation services enable the movement of goods
and people, facilitating economic activities.

Tourism and Foreign Exchange Earnings: Tourism is a significant component of

the service industry. Tourists spend money on various services like
accommodation, dining, and entertainment, contributing to the country's foreign
exchange earnings.

Enhancing Quality of Life: Services like healthcare, education, and

entertainment contribute to the overall quality of life of citizens, which, in turn,
has a positive impact on productivity and economic development.

Trade and Export of Services: Some countries excel in providing specialized

services that are in demand globally. Exporting services, such as IT outsourcing,
consulting, and financial services, can be a significant source of foreign
exchange earnings.

Business and Consumer Spending: The service industry benefits from both
business to-business (B2B) and business-to-consumer (B2C) spending.
Businesses invest in services to improve their operations, while consumers spend
on various services to meet their needs and desires.

Flexibility and Adaptability: The service industry is often more adaptable to

changing market demands compared to some manufacturing sectors. This
adaptability allows the service industry to respond quickly to evolving consumer
preferences and economic conditions

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 Contribution to the GDP of the Economy

Financial Services Supporting Business Investments: The financial services

sector, including banks, venture capital firms, and investment banks, plays a vital
role in supporting business investments. Companies in allied industries, such as
manufacturing, technology, and healthcare, often require capital and funding for
expansion and innovation. Financial services facilitate access to funding, credit,
and investment opportunities, thus fostering growth in these allied industries.

Logistics and Transportation Services Facilitating Supply Chain Management:

The logistics and transportation services sector is essential for the smooth
functioning of allied industries involved in manufacturing, retail, and
distribution. Efficient transportation and supply chain management services
enable timely delivery of raw materials, components, and finished goods,
reducing production costs and enhancing customer satisfaction.

Consulting Services Enhancing Business Strategies: Consulting services offer

specialized expertise and insights to allied industries. Management consultants,
strategy consultants, and industry-specific advisors help companies develop
effective business strategies, improve operations, and navigate complex
challenges.

Global Players in a Service Industry:

McKinsey & Company: One of the world's leading management consulting

firms, McKinsey offers strategic advisory services to clients across various
industries, assisting them in making critical decisions and achieving sustainable
success.

Boston Consulting Group (BCG): BCG is another top-tier management

consulting firm known for its expertise in strategy, digital transformation, and
organizational development, serving clients globally.

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 Bain & Company: Bain & Company is a global management consulting firm
that focuses on strategy, mergers and acquisitions, operations improvement, and
customer experience enhancement.

Deloitte: Deloitte is one of the "Big Four" professional services firms, providing
consulting, auditing, tax advisory, and risk management services to clients
around the world.

PricewaterhouseCoopers (PwC): PwC offers a wide range of consulting services,

including management consulting, technology consulting, human resources, and
financial advisory services.

Ernst & Young (EY): EY is a multinational professional services firm that

provides consulting, assurance, tax, and transaction advisory services to clients
in various industries.

KPMG: KPMG is another member of the "Big Four" accounting firms, offering
management and strategy consulting, as well as audit, tax, and advisory services.

Challenges and Issues:

Labor Shortages: One of the most significant challenges in the service industry
was a shortage of skilled labour. Many service sectors, such as hospitality, retail,
and healthcare, struggled to find and retain qualified workers, which affected
overall productivity and service quality.

Digital Transformation: The increasing reliance on technology and digital

platforms presented challenges for traditional service providers. Adopting and
integrating new digital tools, implementing online payment systems, and
ensuring data security were crucial but often complicated tasks.

Customer Expectations: With the rise of online reviews and social media,
customer expectations reached new heights. Customers demanded personalized,

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 efficient, and seamless service experiences, and businesses had to continually
innovate to meet these expectations.

Competition and Disruption: The service industry faced intense competition,

often from disruptive startups and digital-first companies. Established
businesses had to adapt quickly and find ways to differentiate themselves to stay
relevant.

Role of State and Central Government:

Regulation and Policy Making: Governments play a vital role in regulating the
service industry to ensure fair competition, protect consumers, and maintain
industry standards. They formulate policies and laws that govern various aspects
of the service sector, including licensing, quality control, safety standards, and
consumer protection.

Infrastructure Development: Both state and central governments invest in

infrastructure development, which is essential for the growth of the service
industry. Infrastructure, such as transportation networks, communication
systems, and utilities, facilitates the smooth functioning of service businesses
and enhances accessibility for customers.

Investment and Incentives: Governments may provide financial incentives, tax

breaks, or subsidies to encourage investments in the service industry, particularly
in sectors that contribute significantly to employment and economic growth.
These incentives can attract both domestic and foreign investors.

Skill Development and Education: Governments are involved in promoting skill

development and education programs relevant to the service industry. This helps
create a skilled workforce, addressing labour shortages and increasing the
industry's competitiveness.

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 Promotion of Tourism: Tourism is a significant component of the service
industry in many countries. Governments, both at the state and national levels,
often play a central role in promoting tourism, supporting tourism-related
businesses, and marketing the country or region as a tourist destination.

Global and Domestic Players:

Finance and Banking:

Global Players: Citigroup, JPMorgan Chase, HSBC, Bank of America, Deutsche
Bank.
Domestic Players: Wells Fargo (USA), ICICI Bank (India), Santander (Spain),
Barclays (UK), Mitsubishi UFJ Financial Group (Japan).
Healthcare:
Global Players: Johnson & Johnson (USA), Pfizer (USA), Novartis
(Switzerland), Roche (Switzerland), AstraZeneca (UK-Sweden).
Domestic Players: National Health Service (NHS - UK), Apollo Hospitals
(India), Fresenius Medical Care (Germany), Sanofi (France).
Hospitality and Tourism:
Global Players: Marriott International (USA), Hilton Worldwide (USA), Accor
(France), InterContinental Hotels Group (UK), Airbnb (USA).
Domestic Players: OYO Rooms (India), Jin Jiang International (China), Shangri-
La Hotels (Hong Kong), TUI Group (Germany), Ryokan Collection (Japan).
Retail and E-commerce:
Global Players: Amazon (USA), Walmart (USA), Alibaba Group (China),
JD.com (China), Tesco (UK).
Domestic Players: Target (USA), Flipkart (India), Carrefour (France), Rakuten
(Japan), Coles Group (Australia).

Information Technology (IT) Services:

Global Players: IBM (USA), Microsoft (USA), TCS (India), Infosys (India).
Domestic Players: HCL Technologies (India), Wipro (India), Cognizant (USA-
India),
Capgemini (France), Tata Consultancy Services (India).

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 Production, Distribution and Consumption Pattern:

In contemporary economies, the services sector—including consulting

services—is vital. An outline of the industry's production, distribution, and
consumption trends for consulting services is shown below:
1. Manufacturing:
Service Providers: Consulting firms and individual consultants are the main
providers of consulting services. These experts provide knowledge and guidance
in a number of areas, including marketing, IT, management, and finance.
Specialisation: Consulting firms frequently focus on particular sectors or
industries. They employ professionals with training and expertise in these fields.
Customization: Consulting services are frequently adapted to match the unique
requirements of customers. This could entail making recommendations, carrying
out research, and offering strategic counsel.
2. Distribution:
Consulting Firms: Global players with a presence in numerous nations are large
consulting firms such as Deloitte, McKinsey & Company, and Bain & Company.
They frequently have offices in global metropolises.
Independent Consultants: A large number of consultants operate on their own
and rely on their connections and standing to draw in business. They might
market their services using social media or personal contacts.
Online platforms: By distributing some consulting services online, clients can
more easily identify and hire consultants with specialised knowledge.
3. Ingestion:
Businesses: From small startups to major companies, businesses of all sizes are
the main clients of consulting services. They look for consulting services to
enhance their business processes, find solutions to certain issues, or create
expansion plans.
Government: Public sector and government agencies both use consulting
services. They might employ experts to boost productivity, put new rules into
place, or deal with certain issues.

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 Nonprofits: To improve fundraising tactics, streamline operations, and solve
social and environmental challenges, nonprofit organisations frequently employ
consulting services.
Individuals: People occasionally look for consulting services for financial
planning or career coaching, among other things, in order to advance their
personal or professional lives.
3. Consumption:
Businesses: The primary clientele for consulting services is made up of firms of
various sorts, from little startups to large conglomerates. They seek out
consulting services to improve their business procedures, resolve problems, or
make strategies for growth.
Government: Consulting services are used by both government and public sector
organisations. They may hire specialists to address specific problems, implement
new policies, or increase production.
Nonprofits: Nonprofit companies often use consulting services to enhance
fundraising strategies, optimise operations, and address social and
environmental issues.
Individuals: In an effort to improve their personal or professional life, people
occasionally look for consulting services for things like financial planning or
career coaching.
Depending on the type of service, the industry, and the state of the economy,
consumption patterns in the consulting sector can differ greatly. However, the
industry continues to evolve, driven by changes in technology, increased
globalization, and shifts in client needs and expectations.

Internal and External Factors

Internal Factors:

Government Policies and Regulations: Government policies and regulations

directly affect the service industry. Favourable policies that promote ease of
doing business, encourage investment, and support innovation can boost the
growth of the service sector. On the other hand, restrictive regulations or
bureaucratic hurdles may hinder the industry's expansion.

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 Skilled Workforce: The availability of a skilled and educated workforce is crucial
for the service industry's success. India's large pool of qualified professionals,
especially in sectors like Information Technology, BPO, and healthcare, has been
a significant advantage for the country's service industry.

Technological Advancements: The adoption of advanced technologies can

significantly impact the service industry's efficiency and competitiveness.
Embracing digitalization, automation, and artificial intelligence can lead to
improved service delivery and customer experiences.

Entrepreneurial Culture: A thriving entrepreneurial culture fosters innovation

and the emergence of new service-based businesses. Startups and small
enterprises often contribute to the industry's dynamism and keep it on the cutting
edge of innovation.

External Factors:

Economic Conditions: Economic factors, such as GDP growth, inflation rates,

and consumer spending, can influence the demand for various services. A robust
economy typically leads to increased consumer spending and higher demand for
services like hospitality, travel, and entertainment.

Globalization and International Trade: India's service industry is impacted by

globalization as it opens up opportunities for outsourcing and offshoring.

International trade agreements and relationships with other countries can affect
the
flow of services and influence the competitiveness of Indian service providers in
the global market.

Technological Advancements (Global): Innovations and technological

advancements worldwide can create new opportunities or disrupt existing
service industries. Staying updated on global technological trends is crucial for
Indian service providers to remain competitive.

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 Social and Cultural Factors: Social and cultural factors, such as changing
consumer preferences, lifestyles, and demographics, can impact the demand for
different

services. For example, an aging population may increase the demand for
healthcare and elder care services.

Political Stability and Geopolitical Factors: Political stability and geopolitical

events can impact investor confidence and affect international relations, which
may have implications for the service industry's growth and expansion.

Environmental Factors: Increasing awareness of environmental issues and

sustainability can influence service industry practices. Companies adopting
ecofriendly initiatives and green practices may gain a competitive advantage and
meet the demands of environmentally conscious consumers.

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 CHAPTER -02

“SJK BUSINESS SOLUTIONS PVT LTD BANGALORE”

SJK Business Solutions Private Limited is a private company that was founded
2017 It is a non-government company that is registered with the Registrar of
Companies in Bangalore. It has a paid-up capital of Rs. 100,000 and an
authorized share capital of Rs. 1,000,000. It is involved in several business
activities.
SJK Business Solutions Private Limited's Annual General Meeting (AGM) was
last convened on 31 December 2021, and its balance statement was last reported
on 31 March 2021, according to Ministry of Corporate Affairs (MCA) records.
a strong staff and reliable partnerships. They have logistics, E-Commerce, and
warehouse staffing all around Bangalore, as well as virtually any place in
Hyderabad and Chennai. We have operations in Hyderabad and Chennai as well
and are striving to become a dependable name in logistics and infra services all
over India. You can now expect efficient and complete supply chain, E-
commerce, security solutions and infra services from us.
SJK Services is a reginal leader in providing End-to-End management consulting
services, starting with the basic building blocks required for implementing
enterprise project management and human resource management. SJK Infra
Services is a human capital outsourcing company in Kalyan Nagar, Bangalore.
They also have operations in Hyderabad and Chennai and want to become a
trusted name in logistics and infrastructure services throughout India. It’s can be
providing efficient and comprehensive supply chain, E-commerce, security
solutions, and infra services. The globe is currently experiencing a talent
deficit.
Companies are continually looking for human resources to help them leverage
the economy and grow their business value. Many businesses hire workers from
outside sources, either on a temporary or permanent basis.
These vendors function as human resource firms, offering corporations with
placement services through qualified or experienced personnel. Manpower
Suppliers in Bangalore provide human resources such as professional
technicians, laborers, and so on for any industrial necessity.

21 | P a g e
 SJK is dedicated team of professional are proactive and ready to meet all your
facility requirement
They are the next level in integrated logistics and run comprehensive supply
chain solution
They are the next level in security solution and run comprehensive supply of
manpower:

PEOPLE: - Our highly trained team are knowledgeable, dedicated and easy to
work with. You can rest assured and focus on your business while we look after
the details.

PARTNERSHIP: - With several partners all over Bangalore, Chennai and

Hyderabad, we suit your unique supply chain and find you the best available
value.

EXPERIENCE: - Our in-depth industry experience enables us to quickly

navigate complex logistics scenarios and provide the best solutions for you.

SJK management distinguishes itself by its focused business model and

specialized management consultation service portfolio, which distinguishes SJK
as a distinctive, credible, and unbiased service provider. Our achievements in
Bangalore are the result of our continual efforts to combine talent, quality, and
values.

Directors of SJK Infra Services Private LTD

NUTHANPATHI KISHOR KUMAR

Nuthanapati Kishore Kumar is registered with Ministry of Corporate Affairs
(MCA). Their DIN is 08579579. Following are their current and past
directorship holdings. He was Director of SJK infra services and he was
designation is whole time Director, he was appointed in July 2017.

22 | P a g e
 SREEPATHI NAIDU KODIDALA
Sreepathi Naidu Kodidala is registered with Ministry of Corporate Affairs
(MCA). Their DIN is 08787386. Following are their current and past
directorship holdings. He was Director pf SJK infra services and he was
appointed in July 2017 and worked whole time Director.

VISION, MISSION AND VALUES OF SJK.

VISION:

Connecting businesses and communities to a brighter future with the help of

efficient logistics.

MISSION:

To become India’s most preferred logistics company and to create sustainable

growth for business and society.

OUR VALUES
 Connected: - We invest in the best talent to understand our customers’ needs and
challenges to stay better connected.
 Committed: - Everything we do is keeping in mind our long-term goals. Our
focus on quality service is the cornerstone of our success.
 Creative: - We are constantly finding better ways of working together as a team
for the success of our business.

23 | P a g e
 ORGANIZATION STRUCTURE

DIRECTOR

CONTRACT FINANCIAL
MANAGER MANAGER

HR FINANACIAL
MANAGER ACTIVITIES
PAYROLL

HR HR
RECRUITER RECRUITER

ADVERTAISING EMPLOYESS
HIRING

24 | P a g e
 SERVICES OFFERED BY SJK BUSINESS SOLUTIONS

Management Consulting: Management consultants advise businesses on

strategic planning, organizational structure, operational efficiency, and process
improvement. They help companies identify and address challenges to optimize
performance and achieve business objectives.

Financial Consulting: Financial consultants assist clients with financial

planning, investment strategies, risk management, mergers and acquisitions, and
other financial matters. They offer insights to individuals and organizations for
sound financial decision-making.

Human Resources Consulting: HR consultants provide guidance on talent

acquisition, employee training and development, performance management,
compensation and benefits, and other HR-related areas to optimize workforce
productivity and engagement.

Information Technology Consulting: IT consultants offer expertise in various

technology-related areas, such as software development, system
implementation, cybersecurity, data management, and digital transformation.

Marketing and Sales Consulting: Marketing consultants help businesses develop

marketing strategies, branding, market research, and customer engagement
plans. Sales consultants focus on improving sales processes, techniques, and
performance.

Legal Consulting: Legal consultants provide expert advice on legal matters, such
as contract review, regulatory compliance, intellectual property, and dispute
resolution.

25 | P a g e
 Environmental Consulting: Environmental consultants assist clients in
understanding and managing environmental issues, sustainability practices, and
compliance with environmental regulations.

Healthcare Consulting: Healthcare consultants work with hospitals, medical

practices, and healthcare organizations to improve patient care, operational
efficiency, and healthcare management.

Education Consulting: Education consultants offer expertise to educational

institutions, governments, and non-profits in areas like curriculum development,
school administration, and education policy.

Public Relations and Communication Consulting: PR consultants help clients

manage their public image, handle crises, and develop effective communication
strategies.

Supply Chain and Logistics Consulting: Consultants in this area focus on

optimizing supply chain processes, inventory management, logistics planning,
and distribution strategies.

Energy and Sustainability Consulting: Energy consultants advise businesses and

governments on energy efficiency, renewable energy adoption, and sustainable
practices.

Social Media and Digital Marketing Consulting: These consultants assist clients
in leveraging social media platforms and digital marketing techniques to reach
their target audience effectively.

26 | P a g e
 SJK CLIENTS AND PARTNERS

27 | P a g e
 COMPITETORS

1) Sumashri private ltd

2) Vishnu private ltd
3) Vizzen private ltd
4) Brothers group 5) VJP private ltd
6) Well care private ltd
7) SLV associate private ltd

SJK SWOT Analysis

1. Strength
• Employee productivity
• Good communication
• Advertisement
• Employees benefits: - PF, Gratuity, insurance, ESI
• Business growth
• Contract based company

2. Weakness
• Employees retention
• Determine employee’s weakness
• Bad habits
• Poor communication, indifferent time reporting
• Limited knowledge about work
• Lack of effective management or training

3. Opportunity
• Additional benefits
• Continued professional development
• Increasing network

28 | P a g e
 4. Threats
• Competitors targeting existing employees.
• Industry decline

COMPENSATION AND BENIFITS

SJK will work closely with the customer to reach to the most suitable wage
structure that is reach to the most suitable wage structure that is complicate with
the wage curve, pay grades and rate ranges this service will enable the customer
to achieve the following
1. To reword employees past performance
2. To remain competitive in the labour market
3. To attract new employees
4. To reduce unnecessary turnover

EMPLOYEES BENEFITS

SJK will work with the customer to develop the most appropriate benefits plans.
These plans include, but not limited to the following:
1. Pension
2. Worker’s compensation
3. Health benefits
4. Insurance
5. Provident funds
6. Maternity
7. Gratuity.

ROLES AND RESPONSIBILITIES OF EACH DESIGNATION IN SJK

BUSINESS SOLUTIONS PVT LTD:

Managing Partner or CEO:

Roles and Responsibilities:

29 | P a g e
 • Oversee the overall strategic direction and vision of the consultancy.
• Lead business development efforts and maintain key client relationships.
• Manage the firm's financial performance, including revenue and
profitability.
• Make high-level decisions on resource allocation and expansion strategies.

• 2. Partner or Director:
• Duties and Responsibilities:
• Manage and grow client relationships as a trusted advisor.
• Lead and steer particular practise areas or client segments.
• Support the firm's expansion and business development initiatives.
• Coach and mentor junior consultants.

• 3. Senior Manager or Principal:

• Lead project teams and customer engagements as part of your roles and
responsibilities.
• Create and provide to client’s strategic recommendations.
• Control project spending, schedules, and customer expectations.
• Participate in the firm's thought leadership and practice development.

• 4.Business Development and Sales:

• Positions and Accountabilities:
• Determine prospective customers and business opportunities for consulting
services.
• Build a rapport with prospective customers and learn about their demands.
• Make pitches and proposals to get new business.
• Work together with partners and consultants to customise services to meet
the needs of clients.

30 | P a g e
 • 5.Support and Operational Positions:
• Roles & Responsibilities:
• Manage office operations, scheduling, resource allocation, and other
administrative duties.
• Perform finance, HR, and IT support duties.
• Make sure that the consultancy's daily operations go off without a hitch.

• 6.Finance Manager:
• Responsibilities:
• Budgeting and financial planning.
• Monitoring and managing financial transactions.
• Generating financial reports for management.
• Ensuring compliance with financial regulations.

• 7.Marketing Manager:
• Responsibilities:
• Developing marketing strategies to promote the consultancy.
• Managing online and offline marketing campaigns.
• Brand management and public relations.
• Monitoring and analyzing market trends.

• 8.Administrative Staff:
• Responsibilities:
• Providing administrative support to the organization.
• Handling office logistics and coordination.
• Managing communication within the company.

It's important to note that in smaller consultancy firms, individuals may wear
multiple hats, and roles might overlap. Additionally, the roles and
responsibilities can evolve as the company grows and its focus areas change.

31 | P a g e
 CURRENT CHALLENGES

Client Expectations: Clients now demand more tangible and measurable

results from consulting engagements. They expect consultants to deliver
practical and implementable solutions that drive real business outcomes.

Industry Expertise: Consultants need to stay updated on industry trends

and developments to provide relevant and insightful advice to clients.
Specialized expertise in specific sectors becomes crucial to address
clients' unique challenges.

Data Privacy and Security: As consultants handle sensitive client

information, ensuring data privacy and security becomes a top priority.
Compliance with data protection regulations is essential to maintain
client trust.

Talent Acquisition and Retention: Attracting and retaining top consulting

talent can be challenging. Experienced consultants are in high demand,
and consulting firms need to offer competitive compensation, career
growth opportunities, and a positive work culture.

Project Management and Delivery: Successfully managing consulting

projects with multiple stakeholders and competing priorities requires
strong project management skills and the ability to adapt to changing
client needs.

Risk Management: Consultants may face risks associated with project

failures, client dissatisfaction, or legal issues. Adequate risk
management strategies are essential to mitigate potential negative
impacts.

32 | P a g e
 Sustainable Value Creation: Clients are increasingly focused on long-
term, sustainable value rather than short-term gains. Consultants must
align their recommendations with clients' ethical and environmental
considerations.

Global and Geopolitical Factors: Consultants operating internationally

need to navigate geopolitical tensions, trade restrictions, and varying
regulatory environments across different countries.

Ethical Considerations: Maintaining ethical standards is critical for

consulting organizations. Addressing conflicts of interest and adhering
to professional codes of conduct are crucial for building trust with
clients.

33 | P a g e
 CHAPTER- 03
RESEARCH DESIGN

3.1. STATEMENT OF THE PROBLEM

The statement of problem is to analyse the financial performance of

organization. The study on the financial performance contains the
revenue, tax, expenses etc and the other side it shows the liabilities and
assets potions in the year sometimes difficult to calculate the financial
potions of the organization. Financial performance is prepared to review
the investment in a business and results achieved during specific period
sometimes financial performance hard to analysis the investment returns
and provide proper strategies.

3.2. NEED FOR THE STUDY

The present study of financial performance analysis is of paramount

importance for various stakeholders, including management, investors,
creditors, regulators, and analysts. Firstly, for company management, it
provides a comprehensive understanding of the company's financial
health, allowing them to assess the effectiveness of their strategies,
identify areas forimprovement, and make informed decisions to optimize
performance and profitability. Secondly, investors rely on financial
performance analysis to evaluate the potential returns and risks
associated with investing in a particularcompany.

3.3. OBJECTIVES

• To assess the profitability position of the company.

• To know the financial tools used to study the company’s progress.
• To identify the operational efficiency and growth opportunities.

34 | P a g e
 3.4. SCOPE OF THE STUDY

• To study the financial performance of the Prequate consulting

located in the Bangalore and maintain the structure.
• This project clear picture the financial performance and ratio
analysis of the Prequate consulting
• To know the financial positions of the consulting firm from year to
year.

3.5. Research Methodology

The study can employ a quantitative research design as it involves the

analysis of numerical financial data and the calculation of financial
ratios. This designallows for systematic data collection and statistical
analysis of the variables under investigation.

3.5.1. Type of Research

Quantitative research approach has been adopted here. The purpose of

using this method is not the pursuit of accurate conclusions, but simply to
understandwhere the problem is located and to find out the situation,
drawing the perceptions finally, and importantly, the information in this
research method isshown in figures.

3.5.2. Sources of Data

a) Primary data
b) Secondary data

Primary Data- the primary data is collected through personal

conversationswith the management of the organizations and organization
staff for collectinginformation about their area of operations and services
rendered by the firm.

35 | P a g e
 Secondary Data- secondary data is collected based on the internal
sources. The balance sheet and profit and loss accounts of the company
are collected fromcompany management.

3.5.3. Tools for Data Collection

In a set of phases, data collection and analysis tools will be designed, and
datawill be shown using charts, maps, and diagrams.

3.6. REVIEW OF LITERATURE

Oel Capon (1990), a meta-examination of results from 320 distributed

investigations relates ecological, key and authoritative variables to
monetary execution. A few variables (e.g., fixation and development)
have been considered generally and have a moderately reliable positive
effect on execution. Other broadly contemplated factors (e.g., estimate)
have couple of steady impacts. Numerous elements (especially
authoritative factors) are understudied. We recommend suggestions for
research and administration hone.

Tian-Jian Yang (2009), financial performance analysis of e-coordinated

effort store network under stock interruptions is done by framework
elements displaying and recreation. Money related exhibitions of three
diverse supply chains with Internet e-cooperation instruments are 23 | P
a g e contrasted and the suspicion that a stock disturbance happens at the
retailer stockroom. Numerical outcomes are appeared to uncover the
Non-communitarian, Collaborative Forecasting and Collaborative
Planning supply chains have very unique money related reaction
qualities under certain stock catastrophe, and Collaborative Forecasting
inventory network has the best conduct if there should be an occurrence
of these occasions rather than the others.

Damitio, J. Schmidgall and R. S. Dennington, L J.(1995),this article

looks at the Statement of Cash Flows examination, a generally new

36 | P a g e
 money related proclamation that contains a lot of valuable data. There
are two general methodologies for breaking down the Statement of Cash
Flows: (1) getting ready relative proclamations of money streams and
(2) utilizing proportion examination. The money related proclamations
of a speculative inn, the Example Inn, are broke down utilizing these
instruments.

Chandrasekhar, B. S. (2015), urban helpful banks assume an imperative

part in meeting the developing credit needs of urban and semi-urban
territories of the nation. They have customarily focused on retail
benefits, giving investment funds items and credit to shoppers, retail
dealers, experts, independently employed and little and medium
estimated endeavors. The hugest improvement identified with UCBs
was the extension of certain arrangement arrangements of keeping
money Regulations Act, 1949to the helpful social orders in 1966 after
that which the agreeable banks likewise got the advantage of store
protection plans. The goals of this paper are to get to the development
and structure of agreeable credit social orders in India and to think about
the budgetary and recognize general execution of UCBs in India. The
investigation depends on Secondary information. Urban helpful bank are
a vital part for the legislatures of comprehensive development and has
come to possess an impressive place in the Indian budgetary framework.

Sathish Kumar (2008), composed an examination on Evaluation of the

budgetary execution of Indian private piece banks mulled over that
Private area bank expect an essential part being delivered of Indian
economy. After development the managing a record industry
experienced gigantic change. The money related changes totally have
changed the keeping money segments. RBI empowered new banks to be
begun in private piece according to the 24 | P a g e suggestion of
Narasimha board. The Indian keeping money industry was told by the
comprehensive group banks.

37 | P a g e
 All things considered, now the condition has changed new age saves
money with the utilization of headway and ace association has gotten a
sensible position in the managing a record industry.

Beaver William H, Correia Maria and McNichols, Maureen. F et.al.,

(2010), directed an investigation "financial statement analysis and the
expectation of Financial Distress" has dissected that Financial including
exchange providers, banks, FICO assessment offices, speculators and
administration, among others. Monetary trouble alludes to the failure of
the organization to pay its money related commitments as they develop.
Exactly, scholastic research in bookkeeping and fund has concentrated
on either security default or chapter 11. The essential issue is whether
the likelihood of pain shifts in a huge way contingent upon the extent of
the money related articulation proportions. This monograph talks about
the development of three standards inside the budgetary pain forecast
writing: The arrangement of reliant and logical factors utilized, the
factual strategies for estimations, and the demonstrating of money
related misery.

McGowan Jr., Carl B Stambaugh an and Andrew.R et.al.,(2011),directed

an investigation on 'Financial analysis of Bank Al Bilad' presents a
model for the budgetary examination of a bank in light of the DuPont
arrangement of monetary investigation. The DuPont arrangement of
monetary examination is gotten from an investigation of profit for value
that comprises of three sections: 1) Operating productivity as estimated
by net revenue, 2) Asset utilize proficiency as estimated by add up to
resource turnover, and 3) Financial use as estimated by the value
multiplier.

M. Cathy Claiborne and Kirkland A. Wilcox (2011), directed an

investigation on "Home Heaters: A Holistic View of Financial
statement" has taken up two new businesses in a similar industry that
have indistinguishable monetary exchanges. Albeit the two

38 | P a g e
 organizations take after sound accounting guidelines (GAAT), every
chief settles on various decisions and appraisals while applying GAAP.
By setting up the monetary proclamations, figuring proportions, and
investigating the two organizations.

Professor M.R. Kumaraswamy (2009),directed an examination

'Financial Management cell for New way to deal with Ethical-Based
Financial proclamation investigation's has talked about that the present
business world has been described by moral chapter 11 damaging all
standards of good business morals which, thusly, has caused mounting
monetary (financial issues ) because of continuous organization and
bank disappointments and bankruptcies, the 26 | P a g e aftereffect of
their taking part in false (manipulative) bargains in as much as endeavors
are begun with benefit making thought processes, the requirement for a
careful connection amongst men and benefit is something overlooked.
Keeping these contemplations in see the creator has figured another way
to deal with monetary articulation investigation fusing moral qualities in
business administration.

Mahesh R. & Daddikar Prasad (2012), this paper is centered around the
post-merger and obtaining of Indian carrier organizations to know the
financial performance. The paper looks at to demonstrate whether the
organization has achieved a financial performance productively amid the
position joining or not. The organization has taken a matched t-trial of
before two years and following two years of budgetary execution of the
organization and they find there is no change in the financial
performance To discover this they have taken a specific equations like
net revenue, profit per share and so on.

Deepti Sahoo & Pulak Mishra (2012), this paper look at the execution of
structure and direct in Indian keeping money division. It says in regards
to there is a change in promote course of action of Indian saving money
segment and furthermore ways banks execution of earlier years. There

39 | P a g e
 is an examination between the nationalized banks and private banks like
both local and outside it demonstrates a lower execution however private
segment banks demonstrates a superior execution in offering endeavors
than open part banks.

Priyanka Aggarwal (2013), this paper is to know whether the

maintainable organizations are cash making or not. Specialists contain
led a year ago money related execution to know the benefit or loss of the
organization. Optional information are utilized to know the budgetary
execution of organization in Indian setting. Results find there is no
money related execution in maintainability.

40 | P a g e
 CHAPTER - 04
DATA ANALYSIS AND INTERPRETATION

4.1 WORKING CAPITAL

Working capital = current assets- current liabilities

4.1. Table showing the working capital (lakhs).

Current
Year Current Assets Liabilities Working Capital

2014-2015 1436.3 725.7 710.6

2015-2016 1384.5 659 725.5

2016-2017 1763.7 782.4 981.3

2017-2018 1431.2 1062.3 368.9

(Source annual report of 2014-2017)

4.1. Graph showing working capital of four years 2013-

2014 to 2017-2018.

Current Assets

1431.2 1436.3

1384.5
1763.7

2014-2015 2015-2016 2016-2017 2017-2018

41 | P a g e
 Analysis and interpretation:

The above graph shows that working capital expanded gradually

between 2014 and 2016, suggesting improved liquidity. However, when
current liabilities outpaced current assets in 2017, working capital
significantly decreased, indicating possible financial difficulties. It's
critical to look into what caused this decline and how it might affect the
company's capacity to make money.

4.2 REVENUE OF PREQUATE

4.2. Table showing revenue company from 2014-2017 (Rs

in lakhs).

Year Profit after year

2014-2015 440.5

2015-2016 565.8

2016-2017 550.1

2017-2018 563.6

4.2. Graph showing revenues of four years 2013-2017.

Profit after year

440.5
563.6

565.8
550.1

2014-2015 2015-2016 2016-2017 2017-2018

42 | P a g e
 Analysis and Interpretation:

The above graphs show the company’s earnings following a fiscal year
from 2014 to 2018 is depicted in the graph. Generally speaking, the
profit trend is rising, which suggests that the company's financial
performance has improved steadily throughout this time. This implies
that the business is probably running its operations efficiently and
making wise business judgements.

4.3 PROFITS AFTER TAX

4.3. Table showing profit after tax from 2014-2017.

Year Profit after year

2014-2015 102.5

2015-2016 181.2

2016-2017 145.4

2017-2018 98.6

4.3. Graph showing profits after tax of four years 2013-

2017.

Profit after year

98.6 102.5

145.4
181.2

2014-2015 2015-2016 2016-2017 2017-2018

43 | P a g e
 Analysis and Interpretation:

The above graphs show that from 2014 to 2018, varying pattern in the
company's profit following each fiscal year. Although profit increased
significantly during 2014–2015 and 2015–2016, it decreased in the
following years. This points to the possibility of volatility in the
business's financial results and the necessity of looking more closely at
the variables influencing its profitability.

4.4 RATIO ANALYSIS

Types of ratio analysis

• Liquidity ratio
• Profitability ratio
• Activity ratio

4.4.1 LIQUIDITY RATIOS

A. Current ratio:

Current ratio is defined as the relationship between the current assets and
current liability. A ratio should 2:1 is considered satisfactory as per the
thumb rule

Current ratio = Current assets (CA)

Current liabilities (CL)

4.4. Table showing current ratio of four years from 2014-

2017.

year Current ratio

2014 1.98

44 | P a g e
 2015 2.10

2016 2.25

2017 1.35

4.4. Graph showing current ratio of four years from

2014-2017.

Current ratio

1.35
1.98

2.25

2.1

2014 2015 2016 2017

Analysis and Interpretation:

The company's current ratio is depicted on the graph for the four-year
period between 2014 and 2017. The ability of the business to pay its
current liabilities and maintain short-term liquidity is gauged by the
current ratio. The data indicates that the company exhibited a stable and
robust current ratio between 2014 and 2016, suggesting a sound liquidity
situation.

45 | P a g e
 On the other hand, the current ratio significantly decreased in 2017,
indicating that year would have been problematic for liquidity. This
might call for more research into the company's short-term debt
management and financial stability.

B. QUICK RATIO:

It may be defined as the relationship between the available of cash in

hand, quick assets and current liabilities. The ratio should be 1:1 is
considered as good ratio.
Cash + accounts Receivable
Quick ratio =
Current Liabilities

4.5. Table showing quick ratio for four years from 2014-
2017.

year quick ratio

2014 1.615

2015 1.71

2016 2.25

2017 1.35

46 | P a g e
 4.5. Graph showing of quick ratio for four years from
2014-2017.

quick ratio

1.35
1.98

2.25
2.1

2014 2015 2016 2017

Analysis and Interpretation:

The quick ratio describes the company's ability to turn its liquidity
position into cash at any time. Quick ratio and detailed analysis from
2014-2015 to 2017-2018 are shown in the above graph. The firm's fast
ratio was 1.615:1 in the year 2014–2015. It increased somewhat to
1.71:1 in the following year and significantly to 2.25:1 in the following
year, making it the company with the highest quick ratio.

4.4.2 Profitability ratio

A. Return on capital employed

It can be defined the relationship between operating profit and capital

employed
Operating profit
Return on capital employed = X 100
Capital employed

47 | P a g e
 4.6. Table showing return on capital employed of four
years from 2014-2017.

Year Capital employed

2014 16.26%

2015 19.44%

2016 15.39%

2017 9.92%

4.6. Graph showing of return on capital employed for

four years from 2014.

Capital employed

9.92%

16.26%

15.39%

19.44%

2014 2015 2016 2017

48 | P a g e
 Analysis and Interpretation:

Return to the company as a percentage of capital employed the capital

employed is a metric that would enable the wage to be consistently
expressed in terms of percentage. Return on capital employed and a
thorough study from 2014–2015 to 2017–2018 are shown in the
aforementioned graphs. The company's return on capital employed was
16.26% in 2014–2015, 19.44% in 2015–2016, 15.39% in 2016–2017,
and a significant decrease to 9.92% when compared to all prior years.
These figures indicate that the company has been managing its capital
well.

B. Operating Profit Margin

It is defined as the relationship between the operating income and the net
sales.
Operating Income X 100
Operating profit margin = net sales

4.6. Table showing of operating profit margin for four

years from 2014-2017.

YEAR OPERATING PROFIT

MARGIN
2014 38.23%

2015 50.18%

2016 44.30%

2017 30.34%

49 | P a g e
 4.7. Graph Showing of Operating profit margins for four
years 2014.

OPERATING PROFIT MARGIN

30.34%
38.23%

44.30%

50.18%

2014 2015 2016 2017

Analysis and Interpretation:

The operating profit margin is the amount of profit that remains after
deducting the cost of sales. The company's operational profit margin and
a thorough study from 2014–2015 to 2017–2018 are shown in the above
graph. The company's operating profit for the year 2014–2015 was
38.23%. The operating profit margin increased to 50.18% in 2015–2016.
The operating profit decreased to 44.3% in 2016–2017. The operating
profit decreased significantly in the current year, 20–17–2018. Since the
company's operating profit has decreased relative to all previous years,
they must focus on making more money than they spend on expenses.

50 | P a g e
 C. Return on net worth

It is defined as the relationship between the net income and shareholder’s

equity
Net Income
Return on net worth = X 100
Shareholder’s Equity

4.8. Table showing Return on Net worth for four years

from 2014-2017.

Year Return on net worth

2014 23.71%

2015 33.05%

2016 24.82%

2017 16.18%

Graph 4.8 graph showing Return on Net worth for four

years from 2014.

Return on net worth

16.18%
23.71%

24.82%
33.05%

2014 2015 2016 2017

51 | P a g e
 Analysis and Interpretation:

The profit from shareholder equity is discussed in the return on net

worth. The graph above shows the net worth return and a thorough
examination from 2014–2015 to 2017–2018. The return on the
company's net worth was 23.71% in 2014–2015, 33.05% in 2015–2016,
24.82% in 2016–2017, and 16.18% in 2017–2018. In the current year,
the company is not making much profit over the equity of its
shareholders, so they must take care of their earnings.

4.4.3 ACTIVITY RATIO

A. Investment turnover ratio

It is relationship between the net sales and shareholder’s equity and debt
outstanding
Net Sales
Investment Turnover Ratio =
(Shareholder’s Equity+ Debt outstanding)

4.8. Table showing of investment turnover ratio from

2014-2017.

year Investment turnover ratio

2014 2.17

2015 1.87

2016 2.25

2017 1.40

52 | P a g e
 4.9. Graph showing of investment turnover ratio for four
years from 2014-2017.

Investment turnover ratio

1.4

2.17

2.25

1.87

2014 2015 2016 2017

Analysis and Interpretation:

Investment turnover ratio discusses income derived from both equity and
debt. The investment turnover ratio and a thorough study from 2014–
2015 to 2017–2018 are shown in the above graph. The investment
turnover ratio of the company is 2.17:1 in the year 2014–2015; it
decreases to 1.87:1 in the year 2015–2016; it increases to 2.25:1 in the
year 2016–2017; and it decreases to 1.4:1 in the current year 2017–2018.
As a result, the company must monitor its investment turnover ratio.

B. Fixed Assets Turnover Ratio

It is defined as relationship between net revenue and average fixed

Net Revenue
Investment Turnover Ratio = Average fixed assets

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 4.10. Table showing of fixed assets Turnover Ratio four
years from 2014-2017.

year Fixed assets turnover ratio

2014 1.35

2015 0.77

2016 0.914

2017 0.41

4.10. Graph showing of fixed assets turnover ratio for

four from 2014-2017.

Fixed assets turnover ratio

0.41

1.35

0.914

0.77

2014 2015 2016 2017

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 Analysis and Interpretation:

The value of sales divided by the total value of fixed assets is known as
the fixed assets turnover ratio. The graph and thorough analysis from
2014–2015 to 2017–2018 are shown above. The company's fixed asset
turnover ratio was 1.35:1 in the years 2014–2015, 0.77:1, and 0.914:1,
with a slight increase in the year 2016–2017. The fixed asset turnover
ratio declined again in the current year 2017–2018, to 0.41:1. As a result,
the company does not have a good fixed asset ratio, as it is less than 1,
meaning that it must manage how it uses its fixed assets to get a return
on investment.

C. Total Assets Turn Over Ratio

It is defined as the relationship between net revenue and average fixed

assets.
Net Revenue
Investment Turnover Ratio = Average fixed assets

4.11. Table showing total assets turnover ratio for four

years from 2014-2017.

year Total Assets Turnover Ratio

2014 0.5

2015 0.534

2016 0.465

2017 0.40

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 4.11. Showing graph of total assets turnover ratio for four
years from 2014-2017.

Total Assets Turnover Ratio

0.4
0.5

0.465

0.534

2014 2015 2016 2017

Analysis and Interpretation:

The revenue earned is compared to the average total assets in the total
asset’s turnover ratio. The total assets turnover ratio and a thorough
study covering the four years from 2014–2015 to 2017–2018 are shown
in the graphs above. The company's total assets turnover ratio was 0.50:1
in the years 2014–2015, 0.53:1 in the following year, and 0.47:1 in the
following year. The company lost a lot of money in the years 2016–2017
compared to the previous years, so its total assets turnover ratio dropped
to 0.40:1 in the following year in the face of low profitability. Therefore,
the corporation needs to make a healthy profit in order to equal its entire
assets.

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 4.12 Cash Flow Statement (IN LAKSH)

4.12. Table showing cash flow statement for four years

from 2014-2017.

Pro Forma Cash Flow

INCOME 2014 2015 2016 2017

Cash Received 165.9 444.3 498.5 1343

Cash from Operations 19.2 87.3 592.2 91

Cash Sales 440.5 565.8 550.1 563.6

Subtotal Cash from
Operations 19.2 87.3 592.2 91

Subtotal Cash Received 165.9 1097.5 1640.8 1997.6

EXPENDITURES 2014 2015 2016 2017

Expenditures from
Operations 42.4 85.9 82.5 89

Cash Spending 29.7 386.86 150.68 438.89

Bill Payments 109.2 126.14 133.12 519.51

Subtotal Spent on
Operations 42.4 85.9 82.5 89

Subtotal Cash Spent 138.9 513 283.8 958.4

Net Cash Flow 181.3 598.9 366.3 1047.4

Cash Balance 444.3 498.5 1343 950.2

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 Interpretation:

The company's cash inflow and outflow as well as its end-of-year cash
balance are discussed in the cash flow table.
According to the above table, the company's cash balance in 2016 was
excessively high, and there was never a cash deficit, indicating that the
company was maintaining a healthy cash balance. Good cash flow was
observed in all areas of the business, even though the company still
needed to manage its expenses because in 2017 those expenses increased
to $1047.4.

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 CHAPTER – 05
FINDINGS, SUGGESTIONS AND CONCLUSION

5.1SUMMARY OF FINDINGS

▪ In comparison to the years 2016 to 2017 (2.25) and 2017 to 2018 (1.345),
the current ratio in 2015–2016 (2.21) is good.
▪ In comparison to 2015–2016 (725.5), 2016–2017 (981.3), and 2017–
2018 (368.9) lakhs, the company's working capital was good in 20114–
2015 (710.6) lakhs.
• Cash position is healthy level. In the year 2016-2017 it was 2.25 and in
the current year 1.345
• Operating profit increased year by year, it shows the firm in a good
financial stability. In the year 2016-2017 (243.70) in the current year it
was 171 so company operating profit is gets decreased.
• Profitability ratio of company was good in the year 2015 (19.4%) and in
2016 (15.39%) and its gets decreased in the current year 2017(9.92%).
• The liquidity ratio of the company has been decreed because if its more
than 1:2 ratio of quick it will more amiability of cash in the organization.
It was 2.25 in the year 2016 and it was 1.35 in the year 2017.
• The return on capital employed was decreased in subsequent years
19.44% in the year 2015, in the year 15.39% in the year 2016 and 9.92%
in 2017
• Return on the net worth of company is was good in the year 2015
(33.05%) it was decreased in the year 2016 (24.82%) and 2017 (16.18%)
• Investment turnover ratio was good in the year 2016 (2.25) and it was
decreased in 2017 (1.40).
• Company’s financial position of prevision year was good that in the year
2016 because they having good return and good profit .

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 • In the year 2017 company’s profit, return and inflow also decreased
• In the cash flow statement company’s spent huge cash on the
expenditure it decreases the cash balance and operating profit.

5.2 SUGGESTIONS

• The company’s cash position was slightly decreased so they have to

take corrective action
• Working capital of company has been decreased so they have to
increase there working capital
• Company fixed assets are in the well position, so the company has
to maintain the same
• Return on resources that is return on fixed assets, return on net worth,
investment turnover ratio and total assets turnover ratio are slightly
decreased, so the company has to use the recourses effectively.
• Cash sending’s has been increased they have look after their
expenditure so that cash position will be maintained so well
• If the company gets the publicity in the corporate world so will get
more and more projects so they can make huge profit
• They have look after for the recruitment of employs
• The current ratio of the company was good, but the company should
maintain better current ratio to maintain its obligation.

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 5.3 CONCLUSION

The study entitles “A Study of financial Performance of SJK Business

solutions private limited” had been continued with the objective to
separate and decode the association's financial performance. The
analysis of the company was undertaken with the help of ratio, which
are imperative tool of financial analysis. In general, the company has
achieved progress in the 2 financial years. The company has a healthily
financial performance .it has been found that current assets are more than
current liability and we can conclude that the company will able to meet
all its immediate all the financial commitments, therefore, the cash
position of the SJK Business Solutions private limited remains healthy.
After going through the solved ratios, analysing the financial data, we
can conclude that the company has continuously exceeded expectations
by over the years. Thus, ratio analysis is very important technique, which
has featured the performance of SJK Business Solutions private limited
remains in many areas and also has helped in the portions of specific
decisions has taken after by SJK Business Solutions private limited,
which is crucial to its future growth
Through the cash flow analysis as we can conclude that the company is
maintaining good cash balance over year there is no were the deficit of
cash so they are having good inflow of the cash to company but they
have to look after their expenditure also because as cash inflow increases
the outflow of the cash also increased so if they cut down the expenditure
so they might have higher balance for the coming years.

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 EXPERIENCE and LEARNING:
EXPERIENCE:
• The experience which I had working as a sales intern in SJK
BUSINESS was really good.
• The experience I got from there can also be of great help to my future
endeavours and also help to assess how an organization function. I
could experience how corporate organizations work, the experience
of completing the project well before the deadline and to report to
the finance department head in-charge within the specified date.
• I also had a great experience on how to manage time along with my
other busy schedule, and also have a good experience of working
with the team members to submit the assigned work.
• Overall, it was a great experience working as an intern in the
organization to gain knowledge on how the finance department work
in the organization.

LEARNINGS:
• The opportunity I got from working as a sales intern in SJK
BUSINESS was great.
• The exposure helped me to gain knowledge about various things.
• I could learn to do cold calling, to interact with customers and to
maintain a standard relationship between the employees in the
organization.
• It made me realize that customer satisfaction plays a significant role
in the growth of the organization. Also, I could learn how significant
the role of brand is to the organization as I could observe that the
customers used to acquire the property because of the trust they have
towards the brand.
• I could learn about the work classification between the different
departments in the organization. The internship also helped me to
learn to interact with customers and to analyse customer delight at
different levels.

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