Karnataka Milk Federation, Dharwad

INDUSTRY PROFILE

INDUSTRY PROFILE
DAIRY INDUSTRY IN INDIA Dairy enterprise is an important occupation of farmer. In India nearly 70% of the people depend on agriculture. It is the backbone of India. Dairy is linked with agriculture industry to a large extent. Animal husbandry in India is an essential part husbandry. It is mainly a rural occupation closely associated with agriculture.

DEVELOMENT OF DAIRY INDUSTRY IN INDIA During the Pre-independence year there was no serious stress given to dairy industry. In 1886 the Department of Defense of the British Government established the dairy farms for the supply of milk to the British troops in Alahabad. Later, in 1920 serious steps were taken by Mr. William Smith, an expert in dairy forming to improve the milk production There was discrimination done to the Indians hence this led to the rise of the first milk

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union in India. In Luck now in 1937 called the Luck now milk producers Cooperative union Ltd. In 1946 AMUL (Anand Milk Udyog Ltd ) was started in Gujarat to bring up the economic stability of villagers. When the farmer Prime Minister Lal Bahaddur Shastri visited the functioning as it was rendering a social service to the society, which helped the villagers to come in the national economic stream. The dairy and Animal Husbandry received serious attention after the independence. There were lot many of progressive steps taken by the government through five year plans. This led to the formation of National Dairy Development Board in 1965 & thus in 1970 he decided to Bring a “ White Revolution” throughout the country, Initially 10 states were selected were for this purpose excluding Karnataka. In Karnataka in 1974 an integrated project was launched to restructure and reorganize the dairy industry on Co-operative principle of AMUL. And to lay foundation for new direction in dairy industry.

NATIONAL DARIY DEVELOMENT BOARD: History: The NDDB was founded to replace exploitation with empowerment, tradition with Modernity, Stagnation with growth, transforming dairy into and instrument for the development of Indian‟s rural people. The NDDB was established in 1965; the board is registered under the Societies Registration Act and the public Trust Act, fulfilling the desire of the Prime Minister of India – the late Lal Bhahaddur Shastri to extend the success of the Kaira Co-operative Milk producers union (AMUL) TO OTHER PARTS OF India. Dr Vergese Kurien was the founder chairman. The success combined the wisdom & energy of farmers with professional management to successful
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capture liquid milk and milk product markets while supporting farmer‟s investment with inputs and services.

The Growth
NDDB began its operations with the mission of making dairying a vehicle to a better future for millions of gross roots milk producers. The mission archived helped to launce „‟Operation Flood‟‟, a programme extending over 26 years and with the help of World Bank Loan India become the world‟s largest milk producing country. As per March 2001 India‟s 96000 Dairy Co-operative are integrated thorough a three Tier Cc-operative structure. The Anand pattern which is owned by more than 10 million formers procures an average of 1605 million liters of milk every day. The milk is processed and marketed by 170 milk producers‟ co-operative unions which, in turn own 15 state co-operative milk marketing federation. Since its establishment the dairy development board has planned and spearheaded India‟s Dairy programmer by placing dairy development in the hands of milk producers and the professionals they employ to manage their co-operatives. In addition, NDDB also promotes other commodity based co-operative, allied industries and veterinary biologically on an intensive and nationwide basis.

Objectives of NDDB:      To sponsor, promote, manage, acquire, construct or control any plant or work, which promote projects of general public utility relation to dairying. To make information available on request to technical services to increase production of Milk. To prepare initial feasibility studies of dairying and other dairy related projects and undertake subsequent designing planning and start up those projects. To undertake research and development programme related to production and marketing of milk and milk products. To provide assistance for exchange of information to other international agencies.
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Karnataka Milk Federation, Dharwad

Services rendered by NDDB:
 Planning dairy and rural development projects.      Organization of farmer co-operative societies. Setting up of dairy and cattle feed plants. Manpower planning and training. Applied research and development. Implementation of milk production enchantment programme.

KARNATAKA MILK FEDERATION
The first dairy in Karnataka was started in Kudige in Kodagu district in 1955, Further in June 1974; an integrated project was launched in Karnataka to restructure and reorganize the dairy industry on the co-operative principle and to lay foundation for a new direction in dairy development. In 1975, the World Bank aided dairy development was initiated. The present Karnataka Milk Federation (KMF) came into existence in 1984-as a result of merging of Karnataka Dairy Development Co-operation, small cooperatives and Karnataka Milk Production Development and loose vendors. At the end of the March 1998, the network of 8023 Diary Co-operative Societies (DCS) have been established which are spread over 166 taluks of the total 175 taluks in all 27 districts of Karnataka. There are 13 Milk Unions and Dharwad Milk Union (DMU) is one among them. There are 35 Chilling centers, 3 Farm coolers, 15 Liquid milk plants and 2 Product dairies for chilling, processing, conservation and marketing of milk. To supply cattle feed there are 4 cattle feed plants. To ensure supply of quality germ plasma. Bull breeding farm and frozen semen bank are also available.

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Karnataka co-operative Milk Producers’ Federation Limited (KMF) is the apex Body in Karnataka representing Dairy Cooperatives. It is the third largest dairy co-operative amongst the dairy co-operatives in the country. To impart training, institutes at Bangalore and regional training institutes at Dharwad and Gulbarga are functioning. Three nitrogen plants (2 plants of 25 CPM and 1 plant of 5 CPM) are been set-up to supply nitrogen, which is used for Refrigeration purpose. Three diagnostic centres have been set-up for monitoring diseases: three fodder farms at Rajkunte, Kuttanahalli and Kodagu have been set-up to supply good quality of fodder and seed production farm at Shahpur has been set-up. The federation giving details of the latest technology in dairy industry etc is published „‟Ksheer Sagar‟‟ magazine monthly. KMF is a co-operative apex body in the state of Karnataka for representing dairy organizations and also implementing dairy development activities to achieve the following objectives.  Providing assured and remunerative market for all the milk produced by the farmer members  Providing hygienic milk to urban consumers.  To build village level institutions in co-operative sector to manage the dairy activities.  To ensure provision of milk production inputs, processing facilities and dissemination of know-how.  To facilitate rural development by providing opportunities for selfemployment at village level, preventing migration to urban areas, etc.

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The growth process……
The growth over the years and activities undertaken by KMF is summarized briefly here under: Particulars Dairy Co-operatives (Nos) Membership (No‟s) Milk Procurement (Kgs/day) Milk Sales (Lts/day) Cattle Feed Consumed (Kgs/DCS) Daily Payment to Farmers (Rs. Lakhs) Turnover (Rs. Crores) 1500.00 250 1242 35050 220 1694116 1557 37000 50000 1743664 12699785 1976-77 416 2004-05 9670

FUNCTIONS OF KMF  Co-ordination of activities between the unions.  Developing the markets for the increasing in milk production.  To make the brand „‟Nandini‟‟ as a house hold name.  Excellence in quality is to be maintained to lay a solid foundation for wide spread acceptance of „‟Nandini‟‟ products.  To increase the market share of „‟Nandini‟‟.

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TIER STRUCTURE KARNATAKA MILK FEDERATION MILK UNION MILK UNION MILK UNION DISTRIC COOPERATIVE SOCIETY DISTRICT COOPERATIVE SOCIETY DISTRIC COOPERATIVE SOCIETY R.S.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.Karnataka Milk Federation. DHARWAD Page 7 . Dharwad THE THREE.

THE MILK UNION Milk union is a channel of District Co-Operative Societies in organized form for milk procurement. Seedling and Provisions of Mobile Veterinary Health Care etc. Dharwad THE DISTRICT CO-OPERATIVE SOCIETY (DCS) It is basic organization unit.  Input facilities are also canalized to the dairy farmers through these societies and include Veterinary First Aid. All Unions own their own Milk Processing Facilities.Karnataka Milk Federation. functioning at the village level.S. Sale of Cattle Feed. It is the middle tier of the complex co-operative organization network. DHARWAD Page 8 . By training local people to organize and manage the activities village level institution building and development of local leadership is promoted. R. The procurement route is linked to chilling center or a dairy. There are 5 Milk Unions who‟s Jurisdiction covers a single district. The milk unions are organized to make them economically viable and the jurisdiction extends from one district to 3 Districts. 4 Unions COVER 2 District.  Payment for the milk is done through society. FUNCTIONS  It functions daily and acts as a marketing outset for the milk produced in the village. each 3 Unions cover 3 districts and one Union‟s territory extends to 4 District.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Unions are formed by federating the societies in locating geographical area. Dharwad Milk Union is one of such Milk Unions. Supply of Fodder Seeds.

frozen semen semen straws and liquid nitrogen are produced and distributed to Unions Excellence in quality is maintained to lay a solid foundation for widespread acceptance of the milk and milk products. process and marketing liquid milk.  Providing Training for breeding. feeding management. acquiring and applying all recent technologies.  Providing Balanced Cattle Feed. prescribing quality guidelines and norms.  Providing Animal Health Care. The Federation implements all the project activates. The Union also helps in managing these DCS by assisting in accounts. purchase. The Union helps in providing all the input facilities to DCS and channelizes the dairy farmers through DCS. R.  Providing Artificial Insemination facility for breed improvement.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.  Provides Balanced cattle feed. After the project activities are accomplished the federation aims at formulating Marketing strategies in marketing the Milk and Milk Product.Karnataka Milk Federation. The Karnataka Milk Federation which was setup in 1984 has the following functions:  The foremost function of KMF was to co-ordinate the activities between the Union and also in making market available so that production increases  The Federation also manages surpluses and deficiencies of liquid of milk among the milk union and help in disposing milk and milk product at reasonable price  The Federation also manages to market the milk and milk products outside the state.  Training and developing senior managerial personnel. DHARWAD Page 9 . Dharwad FUNCTIONS These Unions help to organize new Primary Dairy Co-operative Societies. mineral mixture. The Union provides the following facilities.S. MILK FEDERATION The main objective of the federation is to help in formation of Milk Unions through the state and thus forming the state level apes organization.

Butter. Slim. Cheese.S. Curds. Smart.Butter Milk. R. Milk Products Ghee. Flavored Milk. Badam Powder. DHARWAD Page 10 . Good Life. Dharwad The Karnataka Milk Federation consists of: UNITS Milk Dairies Liquid Nitrogen Silos Product Plant Training Center Sperm Station Cattle Feed Plant Pouch Film Plant NO.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.Karnataka Milk Federation. Ice Cream. Panner. Gulab jamoon mix. Homogenized Toned Milk. Khova. CashewBurfi. Peda. Standardized Milk. 13 17 6 3 3 1 4 1 THE PRODUCTS OF KMF: Milk Toned Milk. Full Cream Milk.

SHETTY COLLEGE OF BUSINESS ADMINISTRATION. DHARWAD Page 11 . Dharwad R.S.Karnataka Milk Federation.

SHETTY COLLEGE OF BUSINESS ADMINISTRATION. The Dharwad Milk Union (DMU) is one of the most modern plants in the country. educated the villagers about Milk and Milk products and the benefits they would get from the Milk Dairy. appointed by the Karnataka Milk Federation surveyed the whole of Dharwad districts (includes two newly formed district Gadag and Haveri and Uttar Karnataka. It is located in the spacious 25 acres of land. located in Lakamanahalli Industrial Area. Uttar Kannada and Dharwad come under its operation. They traveled the surrounding villages. It is patterned the AMUL Milk Dairy.Karnataka Milk Federation. Dharwad COMPANY PROFILE A) Dharwad Milk Union Dharwad Milk Union (DMU) came into existence on 3-3-1986. adjacent to the Nation Highway-4.S. Establishment: The Dharwad Milk Union is Co-operative society among the 13 establishment. known as the R. Anand. Gujarat. Haveri. Further they found out there as a need for a Milk Dairy. under KMF. History: A group of experienced officers. Seeing the overwhelming response and untapped resources and the huge market the Federation decided to setup the Milk Union in 1984. DHARWAD Page 12 .DMU was established under co-operative act on 3-3-1986 at Dharwad and Gadag.

 To provide good quality of cattle feed. Dharwad DHARWAD DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES UNION LIMITED. DMU formed 551 milk producer‟s co-operative societies in Dharwad. DMU is collecting 70thousand liters of milk per day from its societies and sells 60 thousand liters of milk per day and the remaining milk is used for producing milk products.S.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. the Raipur Dairy and Chilling Center. fodder. R. setup in 1968. and 6 tones of ghee per day. the training center.2Crore of share capital and authorized capital of DMU is Rs. Gadag.  To educate the villagers about milk and its quality  To make ‟Nandini‟ as a part of daily life. Further in 1988.5crore. Functions of DMU  The main function of DMU is to procure milk from villagers and pay them the right price. DHARWAD Page 13 . also came under the union.Karnataka Milk Federation. In 1989. The prediction capacity of DMU is 2 lack liters of milk per day and also has the capacity to produce 12 tons of milk powder. 10 tones of butter.7 Crore Projects of which Government has Rs.  To see that the DCS‟s are carrying out their activities properly and in an efficient manner. DMU was Rs. Haveri and Uttar Kannada districts. veterinary properly and in an efficient manner. came under Dharwad Milk Union. which was controlled by KMF.

To see that every citizen becomes healthy by consuming good quality of milk. To eliminate middlemen‟s in the business so that the milk products receive there appropriate share of bread.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Its temperature is bought down and then the milk is stored in a tank called as ‟Ram Milk Tank‟ From this tank milk is pumped to a pasteurizing cell where the milk is heated up to 720 c and 15 seconds. As the milk is at room temperature is to be brought down to 40 c to 50 c. A sample of milk is taken and is tested in a laboratory for fat content. the quality and quantity of milk bought is checked at the Reception center by a supervisor. To build the economic strength of the milk products in villages. DHARWAD . so that all the bacteria and microorganisms may be killed and then the milk is simultaneously cooled to 40 C to 5o C and is store in a „Pasteurized Milk Tank‟ From here the milk is separated according to the requirement of production of different types of milk and the remaining milk is used for manufacturing milk products. Page 14 R. Solid Not fat (SNF) acidity etc.Karnataka Milk Federation.S. Dharwad Objectives of DMU:       Providing hygienic and good quality of milk to the consumers. Process at DMU” The milk collected at DCS‟s is brought to the center thought carries trucks etc. To educate the villages about the adulteration of milk and its harmful effect on the body. To make villagers self-viable and build self image. so that it may check the growth of bacteria. To ensure this milk is passed through a chilling chamber where the milk is chilled.

Through excellence in marketing by DMU committed team. hygienic milk and milk products through continuous improvement of quality standards. DMU MISSION STATEMENT At DMU we Endeavour to satisfy the taste and nutritional requirements of the customers.(DCS)  National Dairy Development Board. QUALITY POLICY OF DMU.Karnataka Milk Federation.(NDDB) R. D) Product/service profile: .  Transparency. DMU builds and runs under the co-operative institutions such as  District Co-operative Society. Dharwad B) Nature of business carried Procuring and marketing of milk production and sale of milk products.Milk and milk products E) Area of operation . DMU are committed to offering quality products that provide best value for money. DHARWAD Page 15 . To ensure pure.S.  Cleanliness  Total quality maintenance  Discipline  Co-operation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. C) VISION OF THE DMU.Regional F) Ownership pattern.

 Security facilities.  Shifts facilities-3shifts per day.  Heat allowance  Cold allowance I) Achievements or awards DMU has got ENERGY SAVING award for the production activities. Dharwad G) Competitors of information. Infrastructural facilities of DMU are as follows.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S.  Canteen facilities. DMU has various competitors in the milk products market such as  Krishna  Arokya  Spurthi  Datta  Bharath Dairy H) Infrastructural facilities. DHARWAD Page 16 . R.

Dharwad J) Workflow model. DCS Fresh Liquid Milk Sample Testing Fat and SNF Chilling Storing Pasteurization Storing Homogenization Separation Packing Dispatching R.S. (End to End) Production process has the following work flow model.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. DHARWAD Page 17 .Karnataka Milk Federation.

Karnataka Milk Federation.000 units of electricity 4 to 5 tones of coal Generator in case of electricity failure and manpower R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. 5. Dharwad K) Future growth and prospectus      Procuring and selling 1 lack litters per day.S. 6. 2. DHARWAD Page 18 . 4. Getting export Grade milk powder. Purchasing Department Quality Control Department Production Department Procurement and Input Department (P & I) Finished goods and materials storage Department (FGS) Stores Department Sales and Marketing Department Finance and Accounts Department Administration Department Input required per day:      Milk procurement up to 70000 liters 5 to 6 lakh liters of water 10. 7. Departments of DMU: 1. Developing HACCP-hazards Analysis and Critical Control Points. 3. 9. Marketing quality improvement. Preparing for ISO-9001 certification. 8.

Karnataka Milk Federation.S. Any defects or unconformity to standard containing a small percentage of fat content is sold to the soap manufactures. Different chemicals are used and sterilized fresh water is released for agricultural purpose. otherwise it is sent to a special tank with agitator rotating in it. Everyday nearly 4-5 tones of cal is required the ash sold to the brick manufactures. this steam is produced in steam production plant where coal is used for this purpose. Caution is taken with regard to the height of the chimney to avoid air pollution. R. DHARWAD Page 19 . Dharwad Quality Control: At different stages of production the officer from the Quality Control department keeps verifying the quality of the products frequently.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Steam Plant: In various steps of production for instance melting of butter to ghee to etc… steam is required.

S. SHARE CAPITAL PLALNT CAPACITY 3 Crores approx 2 Lakh lites/day Milk Powder Butter Ghee MILK CHILLING CENTERS AND CAPACITY Gadag CENTERS AND CAPA Haveri Hirekerur Naragund Ron Sirsi KARWAR PACKING UNIT 20. Bhatkal. PRENSE VALUE OF ACTIVITY Collection of Milk 70. Gadag Uttar Kannada district R. DHARWAD Page 20 .000LPD 20. Haveri.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.000 LPD The milk in Bulk is sent Packing and Distribution at karwar which supplies the need of Karwar.000LPD AREA OF OPERATION Dharwad.Karnataka Milk Federation.000 LPD 12 MT/Day 6MT/Day 6MT/Day 20.000LPD Sale of milk 60.000LPD 20. NATURE OF BUSINESS Procuring & Marketing of Milk Production & Sale of Milk Products. Honnavar.000 LPD 10. Murdeshwar and Goa. Gokarna. Dharwad DHARWAD MILK UNION STATUS A Co-operative society registered under the Co-operative Act 1959.000LPD 8.

DEPARTMENT BRAND NAME PROCUCTS 9 NANDINI MILK: Toned Milk.S. Paneer. Lassi. Standard Milk. Ghee. Dharwad. MILK PRODUCTS: Butter.Karnataka Milk Federation. Dharwad BOARD OF DIRECTORS Elected Member EX-Officers By Govt. 8 5 3 TOTAL WORKERS LOCATION 309 Workers Lakamanahalli Industrial Area. DHARWAD Page 21 . Milk Powder CO-OPERATIVE SOCIETIVE AT VILLAGE LEVEL 460 Societies R. Shubham Milk. Curd.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.

Available in 500ml and 11tr packs. Toned Milk: Karnataka‟s most favorite milk. and other functions. containing 6% fat and 9% snf. R. DHARWAD Page 22 .5% SNF.Karnataka Milk Federation. Full Cream Milk: Full cream milk. Available in 500ml and 11trs packs. 100% pure pasteurized processed and packed hygienically. Shubham: Buffalo‟s milk.0% FAT and 8. Dharwad PROCUCT PROFILE KMF. Rich. ideal for preparing home-made sweet & savories. and also Available in 5trs packs for marriages. Dharwad produces the following milk and Milk Products. creamier tastier milk.S.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Nadine Toned Fresh and pure milk containing 3. Available in 5ooml and 1ltr. this milk has 5%fat and 9%snf.

it‟s thick delicious Giving you all the goodness of homemade curds. 1kg& 25kg Pack. 500gms. DHARWAD Page 23 . R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. processed and packed hygienically. Available in 100gms. Available in 500ml packs.Karnataka Milk Federation. Dharwad Homogenized toned milk: Nandini homogenized milk is pure milk. 200mgs. consistent right through.S. it gives you more cups of tea or coffee and is easily digestible. Milk powder: Enjoy the taste of pure milk! Skimmed milk powder made form pure milk. Curd: Nandini curd made from pure milk. Which is homogenized and pasteurized. Available in 200gms and 500gms sachet.

500ml. 1000ml sachets. R. Nandini butter is made out of fresh pasteurized cream.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. It is fresh and pure with a delicious flavor. Available in 200ml. 200gms and 500gms cartons both salted and unsalted Peda : No matter what you ate celebrating! Made from pure milk. Nandini ghee made from pure butter. smooth texture and the rich purity of cow‟s milk makes any preparation a delicious treat. Available in 100gms(salted). Dharwad Butter: Rich. Available in 250gms pack containing 10pieces each. DHARWAD Page 24 .Karnataka Milk Federation. Nandini peda is a delicious treat for the family.S. It will be store at room temperature approximately 7days. hygienically manufactured and packed in a special pack to retain the goodness of pure ghee. Ghee: A state of purity. smooth and delicious. rich taste. Shelf life of 6 months at ambient temperature. 51trs tins and 15kegs tins.

Karnataka Milk Federation.) Director (DCS.) Director (NDDB.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. DHARWAD Page 25 .) Director (Society) MANAGING DIRECTOR Procuremen t Dept Product Process Dept Marketing Dept Admn Dept Finance Dept Transport Quality Control FGS&Stores MIS Account & Purchse R.) Director (Govt. Dharwad ORGANISATION STRUCTURE A) Organization structure President Director (Govt.S.

Karnataka Milk Federation.S. DHARWAD Page 26 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Dharwad B) Sub-structure of various departments and their functions PROCUREMENT AND INPUT DEPARTMENT (structure) Manager (P&I) Procurement Wing Technical Input Wing Deputy Manager Deputy Manager Assistant Manager Assistant Manager Extension Officer Clerks Clerks Helpers R.

Dharwad The Union carries on procurement by setting up-operative societies at village level. Infertility Camp. Then a survey on availability of transportation facilities and productive capacity of villages are conducted. milk is chilled up to 4degree Celsius. R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Vaccination. The main function of this department is to procure milk different areas throughout the year. After this. Procurement is done twice a day and payment is made on the basis of percentage of the content and SNF in the milk. If the marketable surplus is more than 150liters per day. Other services provided are:  Veterinary services to keep up the good heath of cattle through -Regular health Camps -Emergency service round the clock -First aid. supervise and operate village dairy co-operative societies and to procure more milk from village societies. Fodder  Artificial Insemination facility for improvement of cattle breeds.Karnataka Milk Federation. DHARWAD Page 27 . further 10promeoters are selected from the village and are given the responsibility of collecting the capital for the society by selling shares. a society is formed. Milk collected from the milk center. At the chilling center.  Facilitating Training Programs regarding management of cattle  Supply of Fodder to cattle. Later milk is collected in the Chilling Center. the main function of P & I Department is to organize. is first tested there are milk-testing equipments for this purpose. Later this chilled milk is sent to Union in Insulated Tankers for further processing. Milk is sent to Union else chilling center. whichever is near.S.

Dharwad ORGANIZATION REVIEW R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S. DHARWAD Page 28 .Karnataka Milk Federation.

SHETTY COLLEGE OF BUSINESS ADMINISTRATION. DHARWAD Page 29 .Karnataka Milk Federation. Dharwad PRODUCTION DEPARTMENT The Production department has the following structure MANAGER (DAIRY) Deputy Manager Office Staff Assistant Manager Assistant (Stores) Assistant (Account) Technical Officer Clerk Typist Senior Spervisor Junior Supervisor Dairy Operator Dairy Technician Dairy Worker R.S.

Karnataka Milk Federation. DHARWAD Page 30 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S. Dharwad PRODUCTION PROCESS DCS Fresh Liquid Milk Sample Testing Fat and SNF Chilling Storing Pasteurization Storing Homogenization Separation Packing Dispatching R.

Later.Karnataka Milk Federation. R. texture and taste. to destroy any microorganism. PURPOSE OF PASTEURIZATION Pasteurization is a process where milk is heated to high temperature and cooled instantly. is pumped through pipeline to the balance tank. PURPOSE OF CHILLING This is done to avoid the growth of micro organisms.S. The pasteurized milk will stored in Pasteurized milk silos and then sent to pre-packing section. The fat and SNF content of each sample of milk is accessed the cow and buffalo‟s milk are separately received and sent too the production section separately through two different stainless steel pipes. which are responsible for spoilage of milk and bitter taste. as it is highly perishable product has to processed immediately to avoid spoilage milk with respect to its flavor. it is poured in dump tank. which helps to maintain the steady speed flow of milk in the Pasteurization machine. DMU. Dharwad The main objective of this department is to follow up production schedule as per plan and to maintain close and co-ordinate relationship with other department and ensures to upgrade the technical efficiency of production. This cooled raw material is further stored in a silo of 30. it is first weighed with the help of weighing bowl. Once the milk is received from P & I department. Production department is well equipped and has various types of highly sophisticated machines imported from Sweden and Denmark. which is stored in silos. Packing is done in 500m l and 1000ml and stored in cold storage at 70. DHARWAD Page 31 .000 liters capacity.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. the raw milk is passed through plate chiller of variable capacity where it is cooled up to 4-5 degrees Celsius. there are 2 milk Pasteurization machine and 1 Cream Pasteurization machine. Later. The milk. Sample testing is made through lactometer reading and other tests. Milk. In.

SHETTY COLLEGE OF BUSINESS ADMINISTRATION. 25 gms. This skimmed milk is sent to powder section. the cream is separated. Later Ghee is allowed for cooling (at 300-400) and packed in Tin of Liter.S. The milk with no fat is skimmed milk. The vacuum pump removed excess of moisture and butter comes out of continuous butter making machine (capacity – 1500 kgs/hour). A Butter of 2. Butter is packed in 100. Here it is heated to 116-117 degree Celsius for 15 minutes so that the residue is allowed to settle down and Ghee is passed to setting tank through clarifiers.5 tons is melted and is brought to Ghee Boiler.Karnataka Milk Federation. Here butter fat and buttermilk are separated. This skim milk is pumped back to Pasteurization Unit and heated to 720 using steam and chilled to 40 using chilled water and stored silos. Dharwad PASTEURIZATION OF CREAM: The milk in bulk is taken to the cream separator. The pasteurize cream is mixed in portion to pasteurized milk. DHARWAD Page 32 . CURDS: Raw milk is heated to 90 0 and allowed to cool to 30 0. BUTTER: The cream. is taken to the churning section where it is churned. R. these are stored in deep freezer room with temperature – 22 0 and if the order of salt butter they mix the salt water with cream and other process is same. 500 ml and 200 ml of pack and kept in the cold storage. The cream is passed through cream Pasteurization Unit. Later culture is added to it and packed. This cream is sent to Butter section. GHEE: There are 2 Ghee Boiler of capacity 1500 kgs/batch. the curd is formed in the packet itself. which is stored in cream refining tank. 200 and 500 gms and also in 10. Here. It is stored and packed in 200gms and 500gms.

The milk is heated to 900 for 15-20 minutes. and then milk is strained through fine muslin cloth. DMU has separate pedha section. milk is boiled for 550 at high vacuum. moisture is removed and the milk powder obtained consists of 4% moisture.Karnataka Milk Federation. The solid portion is retained and is put in water and then it is put in chilled water and left overnight. There are two sections – Evaporator and spray Drier through which milk is converted to Milk Powder. then Paneer is been made. later sugar and other ingredients are added and stirred continuously on low flame. Milk Powder is made.S.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. About 8 Liters (depends upon the demand) is heated continuously for 3 hours till the milk is semi-solid. Glacial acetic acid is added to milk. Later it cooled and it is shaped in small balls and packed. MILK POWDER: When there is excess of milk. PEDA: Dharwad is famous for its delicious Pedhas. R. The capacity of the powder plant is 12 tons. Milk is concentrated to drier to-45% of milk is solid. In Evaporator. DHARWAD Page 33 . Later it is packed and stored in cold storage. Dharwad PANEER: If there is excess of milk.

1% 4.S. moisture Content: PRODUCT Butter Ghee Panner FAT 83% 99.8% 20% SNF 1% 30% MOISTURE 16% 0. DHARWAD Page 34 .Karnataka Milk Federation.1% SNF 8.2% 50% R.5% 6% 5.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. their fat SNF. Dharwad The milk produced here is differentiated by the content of fat and SNF TYPE FAT 3.5% 9% 9% 9% Toned Milk Standard Milk Subham Milk Full Cream Milk He below table gives a brief idea of the milk products.

at every stage. pipes and other equipments are washed with hot water before starting off with new production. The packed milk we get will have undergone 3 quality tests. The other tests conducted are: R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S. First test is done on raw milk. care is taken to ensure that the customer gets the products. which get from chilling center. There is a separate laboratory for this. Dharwad TEST QUALITY CONTROL DEPARTMENT REASON The Quality Control department has the following structure Deputy Manager Assistant Manager Assistant manager Quality Assistant Officer (Chemicals) Quality Assistant Officer (Chemicals) Lab Assistant Quality Assistant Quality Analyst In DMU. There are many tests conducted here. Hence there is a separate department called Quality Department here the quality testing is done. DHARWAD Page 35 . Quality control is very essential as to maintain the freshness of the milk. All the containers.Karnataka Milk Federation. Next before standardization and the last test before packing. which have a very high quality.

DHARWAD Page 36 . Dharwad Temperature Clot on Boiling Acidity Test Alcohol Test Lactometer Fat test SNF Test Should be below 5 degrees If mill curdles soon after billing milk is rejected To test the extent of acidity To check the heat stability of milk To check the density of milk Percentage of fat determined Percentage of SNF determined for pricing SNF=CLR+FAT/4 R.S.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.

purchase etc. The card attached to each article consists of amount balance. date of issue. A card is maintained for each item and a number is allotted.Karnataka Milk Federation.  Items of urgent and not easily available are stored sufficiently for further demand. This is later recorded in separated ledge book. spares. There are at least 4000 different inventories. DHARWAD . This department has the following services:  It tries to maintain maximum and minimum level of inventory so as to avoid blockage of capital and storage.S. packing items to animal drugs.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Dharwad STORE DEPARTMENT The Stores Department in DMU follows the Cordex system (Coded Control System). The inventories are of different kind ranging from mechanical.  The structure of this department is as shown Stores Superident Stores Assistant (Fds) Store Assistant (Gr-2) Helpers Page 37 R. and stationary and veterinary drugs.  Ordinary and local available commodities are maintained at minimum possible level.

It ensures that the goods are maintained properly with respect to quality Accounts are maintained and daily and daily and monthly report is submitted to the production. It is concerned with maintenance of finishes goods connected records. As the products as perishable First-In-first-Out method of inventory is followed.Karnataka Milk Federation. It received all the finished goods and issued the stock to marketing department as per indents.   STORES FINISHED GOODS STORE FINISHED GOODS STORES: This Department acts as an interface between production and Marketing Department. DHARWAD Page 38 . Dharwad Store Department has two Sub-department.S. R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Marketing and Finance Departments.

Karnataka Milk Federation.S. Dharwad The FGS Department has the following Structure: Stores Superident Stores Assistant (Fds) Store Assistant (Gr-2) Helpers R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. DHARWAD Page 39 .

It prepares budget every year and financial rules for receipts all payments are framed.  To prepare year ending financial statements. The structure of finance Department is as shown: Deputy Manager Assiatant Manager Assistant Account Officer Assistant Account R.S. Pre-Audit System – done by Finance and Account Department every year.  To prepare integrated business plan. Dharwad FINANCE DEPARTMENT This Department is responsible for keeping all the inward and outward flow of money of union. Statutory System –Done by Private charted accountants every year.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.  To prepare quarterly financial statement.  To get accounts audited from statutory books of accounts. DMU Follows to types of auditing: 1. DHARWAD Page 40 . The functions of these departments are:  To prepare monthly accounts (Receipts and payment P & I Account and Balance Sheet). 2.Karnataka Milk Federation.

695.571-03 2.195-30 51.53 GROSS PROFIT B/F.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.36.32.S.12. 1-Apr-2008 to 31-Mar.23.473-63 3.385.722-53 24. Sale of Milk Products.425-00 31.911-90 3.322-80 (-) 4.446-75 36. Net Profit.83. Stock-Other. Sale of Milk.67.2009 3.71.793.57.20.763-00 PURCHASE ACCOUNTS Purchase of Feed.06.167-70 6.845-98 8. Interest and Bank Expenses.56.09. Stock-Others.11.87.42. 11.385.01. Particulars OPENING STOCK.752-19 7.08.80.26.28. Gross Profit C/o. 1-Apr-2008 to 31-Mar.251-50 2.224-73 6.87.Expenses.2009 57.39.09. Stock-P/I.85.50.100-04 7.67.532-26 35.53 R. Staff Expenses.39.2008 to 31-Mar-2009.94. Purchase of PA. Admn Expenses. Prod.71.80. Depreciation A/c.751-00 55. Stock-Milk Products.53.884-67 1. Sale of P & I.80 54.89.40. CLOSING STOCK.65.31. Purchase of Others.64.03.354-32 5. Dharwad DHARWAD MILK UNION (2008-10) Profit and Loss A/c. Stock Milk. Expenses.911-90 GRAND TOTAL: Rs.37. Indirect Incomes Other Income.03.78.102-04 10.12.83.015-00 36.28. Stock-P/I.Karnataka Milk Federation.779-85 1. GRAND TOTAL: Rs.72.249-59 29.56.65.27.414-18 6.99. DIRECT EXPENSES: P & Wing Expenses. Purchase of Milk Products. 59. Sale – Other Sales.18.53.34.38.40. 42.91. 1-Apr.37.768-48 70.22. INDIRECT EXPENSES. Stock Milk. Selling and Dist.14.505-57 1.73.71.37. Stock-Milk.71. Purchase of Milk.11.01.775-50 82.021-38 11.05.50-6-46 Particulars SALES ACCOUNTS Sale Cattle Feed.58.438-02 3. DHARWAD Page 41 .29.304-14 1.968-47 1. & Manuf.549-58 1.37 5.91.473-63 59.593-00 41.07.

Paid Salary/Wages A/.91.67.700-21 8.587-32 1.755-23 10. Opening Balance Current Period.180-33 9. Amrut Yojane.33.06 R.600-00 2.63. Deposits (Assset) Loans & Advances (Asset) Sundry Debtors.39. Job Loan Suspense. Security Deposit A/c.15.751-41 2.16.016-54 Assets FIXED ASSETS Fixed Assets INVESTMEN TS Investment CURRENT ASSETS Closing Stock.37.355-00 2.90.926-95 98. Share Capital-B Class Share Suspence LOANS (LIABILITY) CURRENT LIABILITIES Grants O.981-30 (-) 5.80.c. OTHER LIABILITIES Salary Recoveries.18.78.91.746-00 53.00.2008 to 31-Mar-2009.37.17.932-26 50.97.79.20.23.160-54 3.63.000-00 69.Karnataka Milk Federation. Sundry Creditors. Less: Transferred.12.17.000-00 29. Share Capital-A Class. Bank Accounts PROFIT & LOSS ACCOUNT.737-83 (-) 70. Dharwad DHARWAD MILK UNION (2008-10) Balance Sheet 1-Apr.05.98.12.383-67 2.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.57.02.95. Liabilities CAPITAL ACCOUNT Reserves & surplus Govt.75523 2.15. Duties & Taxes.16.600-00 7.67.800-00 2. DHARWAD Page 42 .021-00 4.26.14.580-25 7.23.00.137-58 2.465-88 63.301-22 94.S.409-00 (-) 1.34.59.23. as at 31-Mar-2009 10.07.231-00 5.20.55. GRAND TOTAL: as at 31-Mar-2009 8.L.04. Cash-in-Hand.58.292-78 1.21.27.01139 1. Yojane DCS Contribution.57.06 GRAND TOTAL: 21.S.24. Loan.60.480-00 2.41.570-00 21.78.07.406.28.655-50 1.53.918-12 16.812-26 1.406.

Quotations with lowest rate are sanctioned. quotations etc. It also maintains records of all the suppliers calls for Tenders. This department act to purchase materials. After ascertaining the stock position by stores department and indent is sent by different department duly approved by the Managing Director. The structure of Purchase Department is as shown: Purchase Officer Purchase Suprident Assistant Purchase Officer Helpers R.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Purchase up to 50.S. then the approval of Managing Director.000. Dharwad PURCHASE DEPARTMENT It is a sub-department. DHARWAD Page 43 . which comes under Finance Department. The main work of this department is to purchase various materials required by different department.

DHARWAD Page 44 . and Assistance Manager.  Supervisory level included technical officers and supervisors. The organization consists of the following three levels. The department has the following structure: Deputy Manager Assistant Manager (Board) Assistant Manager (Personnel) Administration Superintendent Administration Superintendent Administration Assistant Time Canteen Security The Department also handles Canteen. Deputy Manager.  Worker level includes labors helpers. R.  Managerial cadre includes Managing Director.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Dharwad ADMINISTRATION DEPARTMENT The Administration Department controls the overall functioning of the organization.S.Karnataka Milk Federation. Security and Time Keeping Machine.

Karnataka Milk Federation. R. at reasonable rates. The time machine shows the entry time and exit time of each employee. The workers divided into different shifts control the working of the Department. Attendance register etc. employee is given a Punch Card. Dharwad CANTEEN: There is a Canteen in the premise itself.. Tea etc. The employees are provided lunch. DHARWAD Page 45 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION. All the vehicles are checked before entering the premise. The security people work in three shifts.S. TIME KEEPER: This Department records the working hours of the employees. The Canteen is handled by the Canteen-In charge. Each SECURITY DEPARTMENT: Dharwad Milk occupies 25 acres of land the whole premise is been guarded by the security personnel. The departments is also maintains separate registers like store-in Register.

DHARWAD . The second category is related to office work and fieldwork. This first category contains the people who are in the top-management level the second category consists of the supervisor‟s office assistants etc. The third category consists of the workers at the operational. The third level people consist of the workers who are actually into the operation these people are also trained into fields like checking the quality of milk processing packing etc. secretarial skills.Karnataka Milk Federation. The third category consists of the supervisor‟s office assistants etc. TRAINING SYSTEM The Union emphasizes on training the employees. Anand dairy for Training.  Data Base Administrator  Finance Training for non-Finance Officer  Co-Operative management Training Programs  Clean Milk Production Training Page 46 R. Dharwad SKILLS The skills here refers too the various skills the workers have here the workers are further divided into three categories. These people are also trained in computer Applications.S. Most of the training given to the employees here are On-the-Job training and few Off-the-Job Training.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. The first category consist of the people who are in the decision making process in KMF these people are highly qualified few Deputy Managers are to industries like IRMA. accounting skills etc.  Procurement and Technical Input Training (NDDB)  PG Diploma in Rural Management  Basic Computer Applications.

The marketing department provides information to production department regarding daily requirements of the sale of the milk and milk products based on the marketing demand. Self-Controlled. Fair and Firm. R. Dharwad STYLES A) DMU has follows Top to Bottom or Top down style system.S. The fact is that for a manufacturing firm like the KMF. rules and procedure Is always Reliable. The Indicators of the Style are:     Follows Orders. Dependable Watches Details\Prefers to write out Communications Is Rational. later the production department will take the decision about production activities. B) The Styles of the organization is said to follow the participative type that is the management cadre follow the participative type of administration. Decision making parameter for day to day operations. Logical.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Dharwad this type of administration is necessary.Karnataka Milk Federation. DHARWAD Page 47 .

SHETTY COLLEGE OF BUSINESS ADMINISTRATION. The present year has the following strategies. MARKETING DEPARTMENT Marketing Manager Deputy Manager Assistant Manager Marketing Officer Marketing Superiendent Marketing Accountants Marketing Supervisor Marketing Clerks R.S. Below are the strategies set for this year. which will be formulated event year. Dharwad STRATEGIES The Dharwad Milk Union has the following set of strategy. DHARWAD Page 48 .Karnataka Milk Federation. The strategies are formulated with the help of KMF and NDDB an the union members.

drawing and consumer mela.  Aims at conducting agents‟ meetings. Dharwad STARAGETIES OF THE MARKETING DEPARTMENT:  Visit to all roots of individual points by going in a root distribution vehicle for contact with all agents.S.  Joining with other programs. R.Karnataka Milk Federation.  Aims to conduct 5 Consumer Awareness Program and various Seminars. DHARWAD Page 49 .  Press advertisements  Hoardings  Wall paintings  Rental for KSRTC Buses  Leaf lets  Banners  Vehicles paintings and own hoarding paintings  Pole ads and Flute boards  Rate display boards  Milk carry bags  Calendar and greetings  Exhibition.  Aims at setting 10 Exclusive NANDINI Milk Parlors.  Aiming to set up new sales promotional and advertisement activities.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.  Women association programs. Strategy Implementation system: Marketing strategy like sales promotional and advertisement activities of DMU are as follows.

STORE CONTROL SYSTEM. This department has the following services:  It tries to maintain maximum and minimum level of inventory So as to avoid blockage of capital and storage. This is later recorded in separated ledge book. Dharwad SYSTEMS STORE DEPARTMENT: The Stores Department in DMU follows the Cordex system (Coded Control System).S.  Ordinary and local available commodities are maintained at minimum possible level.Karnataka Milk Federation. DHARWAD Page 50 . FIFO System (First In First Out System). packing items to animal drugs. and stationary and veterinary drugs. purchase etc. It means milk which is procured first which is sent first to production process immediately.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. The card attached to each article consists of amount balance. A card is maintained for each item and a number is allotted. R.  Items of urgent and not easily available are stored sufficiently for further demand. date of issue. spares. The inventories are of different kind ranging from mechanical. There are at least 4000 different inventories. DMU has follows inventory control system like.

S. DHARWAD Page 51 . PERSONNEL POLICIES: There are around 339 employees working in Dharwad Milk Union.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. PROMOTION AND TRANSFER Promotion is solely on the basis of sensitivity and experience. manpower consultant. Dharwad HR DEPARTMENT STAFF The staff deals with the various personnel Policies followed by the Organization. he\she has to be made familiar to the union and also known the objective.Karnataka Milk Federation. RECRUITMENT & SELECTION: Due to registration. value. functions and the operations. There are various policies followed by the Union. This helps the employee to interact with senior staff members from various departments. employment exchanges and personnel reference and available data bank. retirement and transfers. Transfers are always accompanied by promotions. termination. Below are given the personnel policies followed by the Organization. The manpower sourcing is done through advertisement. INDUCTION: After an employee is employed in DMU. in the concerned department head will give the manpower requirement along with the job description according the HR department arranges for recruitment. The Human Resource Department is the in Dharwad Milk Union Works as a sub Department of Administration Department. R.

SHETTY COLLEGE OF BUSINESS ADMINISTRATION. DHARWAD Page 52 .Karnataka Milk Federation. House Rent Allowance. like: SHIFT ALLOWANCE: There are separate allowances given to employees working in different shift like:    First shift Allowance Second shift Allowance Third shift Allowance HEAT ALLOWANCE: Separate allowance is given to those workers working near boilers and other equipments. Further there is Uniform code for every employee. There are special benefits given to few employees. CCA. Dharwad Salaries and Employee Benefits GROSS SALARY: A regular staff member in the Union will have a gross salary consisting of Basic salary. R. and Conveyance Allowance. Dearness Allowance.S. The Union provides 2 pair of uniforms to the employees every year HOUSE INTEREST: The employee working in the union can take a loan from other external sources and the Union will pay half the interest on the capital per month. COLD ALLOWANCE: Separate allowance is given to workers working in Defreeze or cold storage.

Dharwad also follows environment Policies. KMF. SHARED VALUES These shared values include the mission and vision of the organization. KMF. surrender Leave. Dharwad OTHER BENEFITS: Canteen subsidy. The plant doesn‟t pollute the environment.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S. Festival Advance. medical Allowance. The Effluents are properly dumped so that on environment hazards occurs. Dharwad has the mission to provide a lucrative market for farmers to sell their milk and to provide best milk to urban customers. It also includes objective values. Its Vision is to produce more milk and milk Products in the forth-Coming years. R. DHARWAD Page 53 . Environment Policies etc. The organization has its own Effluent Treatment Plant in its own Premises.

S.Karnataka Milk Federation. DHARWAD Page 54 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Dharwad R.

It is also necessary to company to know their financial position and operation of the company.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. The financial analysis of this report will show the strength and weakness of the Dharwad milk Producers union limited. DHARWAD Page 55 . The methodology includes the personal interaction with the financial manager. Financial Analysis is a starting point for making plans before using any sophisticated forecasting and planning. Therefore. Thus. Collection of data from the Annual Report of the Company for last five year.Karnataka Milk Federation. In this report I made an effort to know the financial position of Dharwad Milk Producers union limited.S. 2007-08 and 2008-09 Frame work analysis for the purpose of analyzing the Liquidity position of the company. The objectives of study: 1. To study financial performance of the organization and suggest measures to management for improvement of profit.e. position and operation of company to their stakeholders. “The study of Financial Position and trend Analysis through Ratio Analysis at Dharwad milk Union Ltd. by using the Annual Reports of the firm. Dharwad”. Financial analysis will help the firm to take decision. i. R. Main objective is to study the different ratios used in DMUL 2. now a day it is necessary to all companies to know as well as to show the financial soundness i. we can say that.e. 3. The study make use of various accounting Ratios. Dharwad EXECUTIVE SUMMERY Financial statements provide summarized view of the financial position and operation of the company. To Study the liquidity position of the Company. of 2004-07.

It was an opportunity to learn practical aspects of industries.S. DHARWAD Page 56 . Thus the financial statements will provide a summarized view of the firm. The suggestions are as follows:  Have to concentrate on short term loans to improve liquidity position. RATIO ANALYSIS When we observed the financial statements comprising the balance sheet and profit or loss account is that they do not give all the information related to financial operations of a firm. Firm is more dependent Internal funds Its Good sign. liabilities and owners equity and profit or loss account shows the results of operation during the year. they can provide some extremely useful information to the extent that the balance sheet shows the financial position on a particular data in terms of structure of assets. 2. Therefore in order to learn about the firm the careful examination of in valuable reports and statements through financial analysis or ratios is required. I have chosen this topic because “Ratios are use to interpret the financial statement so that strengths and weakness of a firm as well as to know its historical performance and current financial condition can be determined”.  The operating profit of the company is not in a good position for that company has to take alternative actions such as increasing in procurement of milk.  Management of manufacturing. My study covers the calculation of ratios for DMUL and knows their financial performance. production.Karnataka Milk Federation. and control in fixed expenses like. 3. The firm is not utilizing assets efficiently. Dharwad The findings are: 1. Selling Etc… INTRODUCTION The study paper on the topic “a study financial position and Trend Analysis through Ratio Analysis at DMUL”. Is partial fulfillment of requirement of BBA course in finance. Profit of the firm is increasing but not satisfactory. R. Administrative. administrative and selling expenses is necessary.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.

Such information will be useful for creditors. gross profit and net profit purchase and sales etc…. This technique serves as a tool for assessing the financial soundness of the business. Importance As tool of financial management ratio are of crucial significance. “The systematic use of ratio to interpret the financial statement so that the strength and weakness of the firm as its historical performance we can find many items are co-related with each other for example current assets and current liabilities. Ratio analysis is defined as. Dharwad Meaning and definition Ratio analysis is one of the powerful techniques which is widely used for interpreting financial statements. ratios are quantitative relationship between two or more variables taken from financial statements. shareholders management and all other people who deal with company. The importance of ratio analysis is lies in the fact that it presents facts on a comparative basis and enables the drawing inferences regarding the performance of the firm. Ratio analysis is relevant in assessing the performances of a firm in respect of the following aspects.  Liquidity position  Long term solvency  Operating efficiency  Overall profitability  Inter firm comparison  Trend analysis Liquidity position: With the help of ratio analysis conclusions can be drawn regarding the liquidity position of a firm would be satisfactory if it is able to meet its current obligations when it become due‟s firm can be said to have the ability to meet its short term liabilities if it has sufficient liquid funds today the R. DHARWAD Page 57 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION. The idea of ratio analysis was introduced by Alexander wall for the first time in 1919. To take managerial decision the ratio of such items reveals the soundness of financial position. capital and long term debt.S.Karnataka Milk Federation.

The long term solvency is measured by the leverage/capital structure and profitability ratios which focus on earning power and operating efficiency. This aspect of the financial position of a borrower is of concern to the long term creditors. The leverage ratio for instance. dependent upon the sales revenues generated by the use of its asset total as well as its components. security analysts and the present and potential owners of a business. the management is constantly concerned about the overall profitability of the enterprise. will indicate whether a firm has reasonable proportion of various sources of finance or if it is heavily loaded with debt in which case its solvency is exposed to serious strain. to ensure a reasonable return to its owners and secure optimum utilization of the assets of the firm. Overall profitability: Unlike the outside parties which are interested in one aspect of the financial position of a firm. Similarly the various profitability ratios would reveal whether or not the firm is able to offer adequate return to its owners consistent with the risk involved. Long term solvency: Ratio analysis is equally useful for assessing the long term financial viability of a firm. That is. Operating efficiency: Yet another dimension of the usefulness of the ratio analysis. The liquidity ratios are particularly useful in credit analysis by banks and other suppliers of short term loans. relevant from the viewpoint of management. In fact. The various activity ratios measure this kind of operational efficiency. it‟s that it throws light on the degree of efficiency in the management and utilization of its assets. This is possible if an integrated view is taken and all the ratios are considered together. DHARWAD Page 58 . Ratio analysis reveals the strengths and weakness of a firm in this respect.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. This ability is reflected in the liquidity ratios of a firm. they are concerned about the ability of the firm to meet its short term as well as long term obligations to its creditors. the solvency of a firm is.S. R. in the ultimate analysis. Dharwad interest on its short maturing debt usually within a year as well as to repay the principal.Karnataka Milk Federation.

take remedial measures.Karnataka Milk Federation. Some of the limitations which characterize ratio analysis are: 1. in that light.On the other hand. ratio analysis enables a firm to take the time dimension into account. A single figure of particular ratio is meaningless unless it is related some standard or norm. This is made possible due to inter firm comparison and comparison with industry averages. This is made possible by the use of trend analysis the significance of a trend analysis of ratios lies in the fact that the analysis can know the direction of movement . the ratio may be low as compared to the norm but the trend may be upward . though the present level may be satisfactory but the trend may be declining one. For example.whether the movement is favorable or unfavorable. Dharwad Inter firm comparison: Ratio analysis not only throws light on the financial position of a firm but also serves as a stepping stone to remedial measures. In other words. Limitations: Ratio analysis is a widely used tool of financial analysis. Difficulty in comparison 2.S. DHARWAD Page 59 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION. An interfere comparison would demonstrate the firm‟s positions vis-à-vis its compotators. If the results are at variance either with the industry average or with those of the competitors. whether the financial position of a firm is improving or deteriorating over the years. the firm can seek to identify the probable reasons and. Yet. Conceptual diversity R.that is . Trend analysis: Finally. Impact of inflation 3. it suffers from various limitations the operational implication of this is that while using ratios. One f the popular techniques are to compare the ratio of a firm with the industry average. the conclusion should not be taken on their face value. It should be reasonably expected that the performance of a firm should be in broad conformity with that of the industry to which it belongs.

The differences may relate to: Differences in the basis of inventers valuation (example. For these reasons..SHETTY COLLEGE OF BUSINESS ADMINISTRATION. and so on. R.S. Capitalization of lease.This presupposes the availability. companies may have different accounting periods. Different depreciation methods (I. Another basis of comparison is the industry average . last in first out next first in first out. the utility of ratio analysis would be limited.straight line vs. average cost and cost ).particularly current assets. apart from different accounting procedures. Estimated working life of assets .. on a comprehensive scale. Amortization of intangible assets like good will. implying differences in the composition of the assets .Secondly.particularly of plant and equipment. .written down basis ). the ratios of two firms may not be strictly comparable. Dharwad        Difficulty in comparison One serious limitation of ratio analysis arises out of the difficulty associated with their comparison are vitiated by different procedures adopted by various firms . DHARWAD Page 60 . . Treatment of extraordinary items of income and expenditure. however as is likely such information is not compiled and available. If. patents and so on… Amortization of differed revenue expenditure such as preliminary expenditure and discount on issue of shares.Karnataka Milk Federation. of various ratios for each industry group over a period of time.e.

Dharwad Impact of inflation The second major limitation of the ratio analysis as a tool of financial analysis is associated with a price level change. the return on the investment of the firm with a lower book value would over state. For instance the current ratio alone is not a as adequate measure of short term financial strength. in facts a weakness of the analysis of the traditional financial statements which are based on historical costs . Reliance on the single ratio. Obviously.S. As a result. From the point of profitability. ratio analysis will not yield strictly comparable and. identical rate of returns on investment are not indicative of equal profitability of the two firms. This is limitations of ratios. debtors turnover ratio and inventory turnover ratio to have real insight into the liquidity aspect. profit and so on . This.assets.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. DHARWAD Page 61 . shown at different prices I the balance sheet. as they are not adjusted for changes in the price level. Conceptual diversity: Yet another factor which influences the usefulness 0f ratios is that there is difference of opinion regarding the various concepts used to compute the ratios. There is always room for diversity of opinion as to what constitutes share holders equity. dependable results. while that of the latter higher. debt . R. infect.An implication of this feature of the financial statements as regards ratio analysis is that assets acquired at different periods are.say 15%. As a result. the book value of the fixed assets of the former type of firm would be lower. To illustrate there are two firms which have identical rates of return on investments . it should be supplemented by the acid test ratio.But one of these had acquired its fixed assets when prices were relatively low. for a particular purpose may not be a conclusive indicator.Karnataka Milk Federation. while the other one had purchased them when prices were high .Different firms may use these terms in different senses or the same the firm may use them to mean different things at different times. therefore.

Liquidity ratio  Current ratio  Quick acid ratio  Networking capital ratio 2. easy competition with a high degree precision. Classification of Ratio: 1. For one thing.Karnataka Milk Federation.S. Dharwad Finally. ratio analysis suffers from some serious limitations. In brief. the position in the interim period us bit revealed by ratio analysis . Capital structure ratio  Debt equity ratio  Proprietor ratio  Coverage ratio 3. DHARWAD Page 62 .Moreover.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Profitability ratio  Gross profit ratio  Net profit ratio  Operating expenses ratio  Turnover on investment ratio  Return on equity R. ratios are only a postmortem analysis of what has happened between two balance sheet dates. Activity ratio  Inventory turnover ratio  Debtors turnover ratio  Creditors turnover ratio  Assets turnover ratio 4. they give no clue about the future. The analyses should not be carried away by it‟s over simplified nature.

Karnataka Milk Federation. liquidity and profitability required for efficient financial management. The leverage or capital structure ratios 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 creditor with regard to: 1. The greater is the rate of turnover or conversion.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. The efficiency with which the assets are used would be reflected in the speed and rapidity with assets is converted in to sales. But liquidity implies. other things being equal. the more efficient is the utilization/management. Activity Ratios: Activity ratios are concerned with measuring the efficiency in asset management . Repayment of principal on maturity or in pre determined installments at due dates. For this reason. that is. The long term creditors would judge the soundness of a firm on the basis of the long term financial strength measured in terms of its ability to pay the interests regular as well as repay the installment of the principal on due dates or in one lump sum at the time of maturity. DHARWAD Page 63 . The short term creditors of the firm are interested in the short term solvency or liquidity of a firm. The liquidity ratios measure the ability of firm to meet its short term obligations and reflect the term financial solvency of a firm. such ratios are also designated as turnover ratios. Periodic payment of interest during the period of the loan 2. R. Leverage/capital structure ratios: The second category of financial ratio is leverage or capital structure ratios. The long term solvency ratios of a firm can be examined by using leverage or capital structure ratios. A proper balance between the two contradictory requirements.these ratios are also called efficiency ratios or assets utilization ratios. In fact liquidity is a pre requisite for the very survival of a firm. Dharwad Liquidity Ratios: The importance of adequate liquidity in the sense of the ability of a firm to meet current /short term obligations when they become due for payment can hardly be overstressed. Turnover is the primary mode for measuring the extent of efficient employment of assets by relating the assets to sales.S. from the viewpoint of utilization of the funds of the firm that funds are ideal or earn very little.

Karnataka Milk Federation. Since time immemorial. the profitability ratios are designed to provide answers to questions such as: 1. which is engaged in marketing of milk and milk products. What is the rate of return to equity holders? Literature review DIARYING IN INDIA The association of Indian with Animal Husbandry and dairying is deeprooted in history. KMF. In other words. It is said in Indian mythology that lord „Krishna‟ the god of righteousness grew up by drinking milk and eating bitter and ghee. both short term and long term. which was named as Nandini says Indian mythology.S. DHARWAD Page 64 . Dharwad Profitability Ratios: A pert from the creditors. in short. Is the profit earned by the firm adequate? 2. R. donated by Lord Brahma. The profitability of a firm can be measured by its profitability ratios. also interested in the financial soundness of a firm are the owners and management or the company itself. The management of the firm is naturally eager to measure its operating efficiency of a firm and its ability to ensure adequate return to its shareholders depends ultimately on the profits earned by it. What rate of return does it represent? 3. the god of knowledge. He was nicknamed as „Butter Krishna‟ as he used to steal the butter in his neighborhood. What is the rate of profit for various divisions and segments of the firm? 4. The sage Vashistha possessed a sacred cow.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. milk and milk products have been accepted in the diet of people of India as items of choice. The word Nandini is the family brand of the Karnataka co-operative Milk Producers Federation.

1946 in samakha village decided to set up a milk producers union limited and the kaira District union was identified as Anand milk union limited. R. The man of action took no time to find a solution. paved the way for co-operative dairy in India. which manages the dairy with the help of elected representative of the districts unions. the year 1965. The role of the government is to supervise quite and encourage the co-operatives. DHARWAD Page 65 . provided main impetus to the farmers. co-operation the dairy. Dharwad BACKGROUND: Towards the end of 1950‟s a development in the kaira district of Gujarat state. which collect the milk from producers daily and pay them: the district level producers unions (a representative body of the village societies) which provide the inputs required by the farmers including artificial insemination. The Anand pattern is a three tier structure consisting of the producers societies at the village lavel.Karnataka Milk Federation. the federation undertakes the collecting marketing of milk and milk products attending to quality control. The milk producers of this district decided to co0me together and from a co-operative as a protection against the exploitation by the private dairy owners and middlemen in the form of un-remunerative by the prices. A meeting called on January 4. Sardar vallabhai Patel.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Kurien in the objective of percolating the Anand pattern in rural India. a great Indian freedom fighter and the first Deputy Prime Minister of independent India. The NDDB was set up under the chairmanship of Dr. V. veterinary services and the supply of feeds. their establish a direct link between the producers and consumers. The Anand pattern. It procures milk from many villages on daily bases. came the era of co-operative dairying in Indian dairying. He heard the formers tale of woe and was touched to the quick. Thus.S. On behalf of the unions. and a federation of the unions of the state level. Dharwad milk producer union limited has been established in 1986 and started function in 1988. To achieve this objective of replicating Anand or Amul pattern dairy co-operative society.

So the company wants to know the reasons for declining in net profit with the help of ratio analysis. DHARWAD Page 66 . increase and decrease and also net loss in the year 2003-04 and 2005-06. To study financial performance of the organization and suggest measures to management for t improvement of profits. Hence the title of the problem is “A study of financial position and trend analysis through ratios analysis at DMUL”. To suggest possible future performance by analyzing its financial statements. 4.S.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. To study the liquidity position of the company. 2.e. Main objective is to study the different ratios used in DMUL. Dharwad STATEMENT IF PROBLEMS Management problem There is a fluctuation in net profit i. 5. 3. R.Karnataka Milk Federation. To find out the firms efficiency based on past and present profitability ratios. Objectives of study: 1. Research problem To study the financial performance and to find out the reasons form Net Loss through ratios.

SECOUNDARY DATA: this is collected through DMUL ANNUAL REPORTS.  Selection of date: from the annual reports of the firm for last three years.2005-06.2007-08. and 2007-08 to mean an accounting year of the company consisting of 365 working days. 2. DHARWAD Page 67 . For a period 200405. from  Annual report for the year 2000-05  Annual report for the year 2005-06  Annual report for the year 2006-07  Annual report for the year 2007-08  Annual report for the year 2008-09  Period:  The study covers a period of five year data from 2005-06. It is done through balance sheet and profit and loss account of firm.Karnataka Milk Federation.S. R. DATA COLLECTION METHOD: 1. i.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Purpose of the study: The purpose of the study is to find out the financial performance of the firm for last 5 years through ratio analysis and their by suggest the company to take better decision for improvement of profits. The financial performance of the company is known by calculating financial statement and ratio. PRIMARY DATA: The information is collected from the personal interaction with the financial managers DMUL.2008-09. Dharwad Research methodology: Methodology:  The methodology includes the personal interaction with the finance manager.e. Scope of the study: The scope of the study is conducted only for organization level. 2006-07.

 Financial statement of the company. Financial statement are prepared for the management to deal with a. Income statement: the income statement also termed as (profit or loss account) is generally considered to be the most useful of all financial statements.Karnataka Milk Federation. Results achieved during a given period under review a financial statement generally refers to the following. Its purpose is pose is to convey understanding of some financial aspects of business firm. DHARWAD Page 68 . profit and Loss A/c and interactions with management. Status of investments. It discloses the revenue realized from the sale of goods and the costs incurred in the process of producing the scheme.  ANALYTICAL TEHNIQUE:  Statistical technique used for calculation of ratios is in terms of percentage. It tells the story of progress or decline over given period and why and how an indicated result achieved. R. FINANCIAL STATEMENT A financial statement is a organized collection of data according to logical and consistent accounting procedures.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. It explains what has happened to a business as a result of operations between two balance sheet dates. 1. It may show a position at a moment in time as in the case b/s or may reveal a series of activities over a given period of time as in case income statement. LIMITATION OF THE STUDY:  The accuracy of the ratios is subject to the validity of information provided through Balance sheet. b.  The standard for the ratios are suitable modified to prudently reflect the financial position keeping in mind the peculiarities of the industry/ company.S. Dharwad MEASURMENT TECHNIQUE/STATISTICAL TOOLS:  Accounting ratios.

R.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. 3. Dharwad 2. However for a better understanding of the affairs of the business. the facts and figures in the financial statements can be transformed into meaningful and useful figures through a process called as “analysis and interpretation”. This information is available in the statement of changes in financial position of the business. ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: Analysis means methodical classification of data given in the financial statements. After making necessary appropriations. Thus.S. The balance shown income statement is transferred to the balance through this statement. This statement is also termed as project and loss appropriation account in case of companies. DHARWAD Page 69 . It is thus a connecting link between the b/s and income statement. The figures given in the financial statements will not help for comparison unless they are put in a simplified from. it is essential to identify the movement of working capital or cash in and out business. Statement if retained earnings: the term retained earnings means the accumulated excess of earnings over losses and dividends. 4. Balance sheet: It is statement of financial position of a business at particular moment of time and claims of the owners and outside against those assets at time. Statement of changes in financial position: The balance sheets show the financial condition of the business at a particulars moment of time while the income statement discloses the result of operations of business over a period of time.Karnataka Milk Federation.

Dharwad FINANCIAL STATEMENT OF THE FIRM Profit and loss for the year of 2004-2005 of the DMUL Particular Income Income earned Total income Expenditure Expenditure incurred Total expenditure Profit or loss Profit for the year Balance of profit transferred to balance sheet 806.14 Amt (in lacks) 76.Karnataka Milk Federation.90 883. DHARWAD Page 70 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION.14 883.24 R.S.24 76.90 806.

19 326.00 490.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.17 2288.81 607. DHARWAD Page 71 .79 R.71 702.07 1127.S.Karnataka Milk Federation.79 73.52 CAPITAL AND LIABILITIES Capital Reserves and surplus Borrowings Current liabilities Total ASSETS AND PROPERTIES Investment Fixed assets Work in progress Current assets Total 2288. Dharwad Balance sheet of the DMUL for the year ending 31-03-2005 Amt (in lacks) 345.10 905.

76 Amt (in lacks) R.29 889. Dharwad Profit and loss account for the year of 2005-2006 of the DMUL Particular Income Income earned Total income Expenditure Expenditure incurred Total expenditure Profit or loss Profit for the year Balance of profit transferred to balance sheet 13.29 876.76 875.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S. DHARWAD Page 72 .53 13.53 889.

47 490.Karnataka Milk Federation.81 2360.42 435.76 CAPITAL AND LIABILITIES Capital Reserves and surplus Borrowings Current liabilities Total ASSETS AND PROPERTIES Cash in hand Cash at bank Investment Fixed assets Work in progress Current assets Total 2360.70 149. Dharwad Balance sheet of the DMUL for the year ending 31-03-2006 Amt (in lacks) 474.S.93 R.54 559. DHARWAD Page 73 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION.72 44.92 711.24 888.26 1060.93 6.

85 922. DHARWAD Page 74 .73 15.85 907.12 R. Dharwad Profit and loss account for the year of 2006-2007 of the DMUL Particular Income Income earned Total income Expenditure Expenditure incurred Total expenditure Profit or loss Profit for the year Balance of profit transferred to balance sheet Amt (in lacks) 922.73 907.S.12 15.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.

Karnataka Milk Federation.44 359.33 R.08 951.21 492.82 983.S.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.33 14.08 45. Dharwad Balance sheet of the DMUL for the year ending 31-03-2007 Amt (in lacks) CAPITAL AND LIABILITIES Capital Reserves and surplus Borrowings Current liabilities 401.18 134.31 2334. DHARWAD Page 75 .78 Total ASSETS AND PROPERTIES Cash in hand Cash at bank Investment Fixed assets Work in progress Current assets Total 2334.29 589.47 697.

DHARWAD Page 76 .Karnataka Milk Federation.S. Dharwad Profit and loss account for the year of 2007-2008 of the DMUL Particular Income Income earned Total income Expenditure Expenditure incurred Total expenditure Profit or loss Profit for the year Balance of profit transferred to balance sheet Amt (in lacks) 1118.27 1118.89 201.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.38 201.27 916.89 R.38 916.

Karnataka Milk Federation.86 Total ASSETS AND PROPERTIES Investment Fixed assets Current assets Work in progress 2418.83 499.S.34 586.59 45.10 518.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Dharwad Balance sheet of the DMUL for the year ending 31-03-2008 Amt (in lacks) CAPITAL AND LIABILITIES Capital Reserves and surplus Borrowings Current liabilities 426.28 887.35 991.59 R. DHARWAD Page 77 .32 882.09 Total 2418.

40 1097.S.14 R.40 1167.14 70. Dharwad Profit and loss account for the year of 2008-2009 of the DMUL Particular Income Income earned Total income Expenditure Expenditure incurred Total expenditure Profit or loss Profit for the year Balance of profit transferred to balance sheet Amt (in lacks) 1167.26 1097.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.26 70. DHARWAD Page 78 .Karnataka Milk Federation.

25 398.67 2.34 985.33 220.91.S.37 823.8 721.67 R.91.57 101.Karnataka Milk Federation.63 507.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.27 608. DHARWAD Page 79 .28 Total 21. Dharwad Balance sheet of the DMUL for the year ending 31-03-2009 Amt (in lacks) 462.41 CAPITAL AND LIABILITIES Capital Reserves and surplus Borrowings Current liabilities Total ASSETS AND PROPERTIES Cash in hand Cash at bank Investment Fixed assets Work in progress Current assets 21.

Current Ratio= Current assets Current liabilities YEAR 2004-05 2005-06 Current assets Current liabilities Ratio 60717987 71181058 2006-07 63658413 (Amt in Rs) 2007-08 2008-09 86244063 72128952 32652240 43576691 35978861 53736056 50741016 1. It tells the business cannot pay debts due within one year from assets which it expects to turn into cash within the year. In 2004-05 it was 1. it has gradually increased it indicates improvements in the financial position of the company.63 1.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.76 1.Karnataka Milk Federation. DHARWAD Page 80 . again it has decreased in 2006-08 and 2008-09 so it has to improve.41.S. Dharwad Analysis and Interpretation of Ratio 1) Current ratio: This ratio indicates the rupees of current assets available for each rupee of current liability. R. but the ratios of the company are less than 1.42 Source: annual report of company Interpretation: according to the standards the current ratio of the firm should be 2:1.86 1.60 1.

Quick ratio= Quick assets Current liabilities Year Quick Assets 2004-05 30921237 2005-06 49441660 2006-07 39499293 2007-08 58065233 2008-09 50123452 Current liabilities Ratio 32652240 43576691 35978861 51886328 50741016 . DHARWAD Page 81 .95 1.13 1.Karnataka Milk Federation.11 Source: annual report of company Interpretation: The ideal ratio of the firm should be 1:1. this ratio shows the relationship between the borrowed capital and owner‟s capital. In other words. this ratio shows relative claim of the creditors and shareholders against the assets of the company. DEBT-EQUITY RATIO: It measures the relation between debt and equity in the capital structure of the firm.S.1 1. Dharwad 2) Quick ratio: while calculating this ratio we will not consider inventories. DER = long term debt Share-holders funds-net loss R. but the ratios of the company are less than 1 in 2004-05 and 2005-06. It tells the business can not pay debts due within one year from assets that it expects to turn into cash within the year but in 2006-07 and 2008-09 it is increasing it is a good sign for organization. I.12 1.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.

Karnataka Milk Federation, Dharwad

Generally higher the ratio greater is the possibility of increasing the ROR to equity and vice versa. A high debt equity ratio may be adopted to take advantage of cheaper debt capital. The ratio indicates the extent to which the firm depends upon outside for its existence. The ratio provides margin of safety to the creditors. It tells owners the extent to which they can gain benefits of maintaining control with a limit investment. YEAR Long term Debt 2004-05 2005-06 2006-07 98344158 2007-08 88710194 2008-09 82363231

112719511 106042793

Shareholders Fund Ratio

91132042

85120464

100623785 121452266 135797558

1.24

1.25

0.98

0.73

0.61

Interpretation: General standard of debt Equity ratio is 2:1. Since the company is using more borrowings. But compare to 2006-07 to 2007-08 it has decreased little more it good sign. Even though it has to improve.

II. PROPRITORY RATIO: It establishes relationship between the proprietor or shareholders funds and total tangible assets. It may be expressed as: Proprietor Ratio= shareholders funds Total Assets The ratio indicates properties stake in total assets. Higher the ratio lowers the risk and lower the ratio higher the risk. Debt- equity ratio and current ratio affects the proprietary ratio.

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Karnataka Milk Federation, Dharwad

Proprietary ratio YEAR 2004-05 Share 72180350 holders fund Total 156528692 assets ratios 0.46

2005-06 91132042

2006-07 85120464

2007-08 2008-09 100623785 121452266

15860052

164460270

163314054 191928236

0.57

0.51

0.61

0.63

Interpretation: Since company property ratio is low in 2003-04 but later it goes on increasing in 2004-05 was 0.57 and in 2005-06 was 0.51 and 2006-07 was 0.61 and 2007-08 was 0.63 its shows the little dangers to creditors and above 50% is satisfactory. III. INTEREST COVERAGE RATIO : This is a measure of the protection available to creditors for payment of interest charges by the company. The ratio shows whether the company has sufficient income to cover its interest requirements by a wide margin. The interest coverage ratio is computed by dividing profit before interest and tax by the interest expenses. A high ratio implies adequate safety for payment of interest even if there were to be a drop in the company‟s earnings. The interest coverage ratio is as follows: Interest coverage Ratio = profit before interest and tax Interest expenses Interest Coverage Ratio YEAR 2004-05 2005-06 2006-07 2007-08 EBIT 11917496 2429693 4830399 20762147 Interest 4284974 2889174 1910180 585744 Ratio 2.78 0.84 2.52 35.44

2008-09 4567386 236572 20.43

Interpretation: Since the company interest coverage ratio is 2.78 in the year 2004-05 the company is not able to recover their interest but later it turn into positive in the year 2007-08 the ratio is 35.44 its good sign for company but it has to increase.
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Karnataka Milk Federation, Dharwad

Turnover Ratio
1) INVENTORY/STOCK TURNOVER RATIO (ITR/STR). It indicates the efficiency of the firm in producing and selling its products. High ratio is good from the view point of liquidity and vice versa. A low ratio would signify that inventory does not sell fast and stably in the warehouse for a longtime. It is calculated as follows: Cost of goods sold OR Avg Inventory

sale (If there is no opening stock) Closing Stock

Hence Avg Inventory= Opening stock + Closing Stock 2 Avg Inventory is calculated by taking stock levels of raw materials, working process and finished goods at the beginning of year and at the end of the year and that is divided by 2. Inventory/Stock turnover Ratio: YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Cost of 303696602 346684069 446321775 397561562 440874259 goods sold Avg 21095190 28794258 25768074 22949259 27151621 inventory Ratio 14.39 12.04 17.32 17.32 16.23 Source: Annual Report Inventory Conversion Ratio YEAR 2004-05 No. of days 365 in a year ITR 12.04 DAYS 30.31

2005-06 365 17.32 21.07

2006-07 365 17.32 21.07

2007-08 365 16.23 22.48

2008-09 365 14.39 25.36

Interpretation: In 2004-05 and 2005-06 there is management of inventory is not good because the Convert-ion period is high As compare to 2005-06. But in 2007-08 again it increases. But in the period 2004-05 there is more inventory
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Page 84

Debtor‟s tern-over=Sales Debtors Higher the ratio is better. They are: 1) Debtor Tern-over Ratio 2) Debtor Collection Period Ratio Debtor‟s tern-over can be calculated by dividing total sales by balance of debtors. In the subsequent year it has improved.02 31. DHARWAD Page 85 .39 31. since it indicate that debts are being collected more promptly. There are two ratios.67 35.03 468283461 14783343 511817364 14555763 341538442 9748573 R. YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Sales 390565567 489014707 15577528 Avg Debtors Ratio 11152086 35.Karnataka Milk Federation.16 35. 2) DEBTORS TURNOVER RATIO: Debtors constitute an important constituent of current assets and therefore the quality of debtors to great extent determines that firm‟s liquidity. In the period 2005-06 due to increase sales inventory convert-ion period is less but it has increased in 2008-09.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S. Dharwad level than required by the production and sales activities.

Dharwad DEBTORS COLLECTION PERIOD This ratio indicates the extent to which the debts have been collected in time. On the other hand. of days DTR It is helpful to the creditors and lenders of the firm to know the firm‟s collecting within a reasonable time. It gives the average debt collection period.03 in the year 2008-09. of days 365 365 in a year DTR 35.41 Source: Annual reports of company Interpretation: The ratios Indicates the debtors collection.38 2008-09 365 35. low turnover ratio and long collection period reflects that payments by debtors are delayed.02 31. In 2004-05. Collection period of WCPM is improving i.16 10.Karnataka Milk Federation. Debtor collection period = No. The higher is the tern-over ratio and shorter is the average collection period the better is the trade credit management and the better is the liquidity of debtors. from 11 days to only 10 days.02. DEBTOR COLLECTION PERIOD YEAR 2004-05 2005-06 No.35. R. DHARWAD Page 86 . It shows the payments of debtors are very prompt.52 2007-08 365 35.39 Days 10. i. 2005-06 it was 35.e.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.03 10.42 11. e.S.67 11.62 2006-07 365 31.02 and but in the year 2005-06 its decreasing the debtors collection days are increasing but again decreases to 35. days are decreasing. as short collection period and high turnover ratio imply prompt payment on the part of debtors.

The creditor payment period is decreasing i. opening and closing A/c payable have not been given.77 12275101 22.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.19 16. it is decreasing continuously and in 2008-09 it become 10 days.75 13. in 2003-04 is 16 days.33 10.31 10219771 36.75 10735527 35. of days 365 in a year CTR 29.15 2007-08 365 35.20 2008-09 365 22. R. In 2004-05. and the ratio may be calculated as follows: = Total purchase Creditors CREDITORS TURN-OVER RATIO: YEAR 2004-05 2005-06 Total 303770822 371288996 Purchase Creditors Ratio 10363756 29. It shows company is having credit worthiness. DHARWAD Page 87 . It signifies the creditors are being paid promptly.45 2005-06 365 36. 35.19 Creditor‟s payment period YEAR 2004-05 No.Karnataka Milk Federation.e.77 10.31 AYS 12. Dharwad 3) CREDITOR’S TURN-OVER RATIO: It indicates the speed with which the payment for credit purchases is made to creditors.44 Source: annual reports of company Interpretation: The ratios are increasing.S.04 2006-07 365 27.33 2006-07 340907385 2007-08 384036630 2008-09 27242865 12280764 27. This ratio is calculated as follows: = credit purchases Avg creditor It details regarding gredit purchases.77 times.

91 17.91. Underutilized assets increases the firm‟s need for costly financing as well as expenses for maintains and up keep. Dharwad 4) WORKING CAPITAL TURN-OVER RATIO: This ratio indicates whether or not working capital has been effective utilized in making sales.67 Interpretation: The ratios are fluctuating in 2008-09 the ratio is 20.91.91 14. Overall this ratio indicates that working capital has been effectively utilized in making sales except in 2004-05 and in 2008-09 still they have to make better utilization of working capital. A firm‟s ability to produce large volumes of sales for a given amount of net assets is the most important aspects of its operating performance. DHARWAD Page 88 . in 2005-06 increases to 17.S. And in 2007-08 it becomes 14.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.72.72 16. This ratio is calculated as follows: = sales Net Working Capital YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Sales Net Working Capital Ratio 390565567 489014707 468283461 511817364 341538442 28065747 27604367 27679552 36323028 16518934 13. The ratio is calculated as follows: = Net Sales Net Assets R.09 20.09.Karnataka Milk Federation. 5) NET ASSETS TURNOVER RATIO Net assets include net fixed assets and net current assets. in 2004-05 it decrease to 13.67 times. But in 2006-07 it decline to 16.

46.31 however in 2005-06 it increases to 3.Karnataka Milk Federation.S. But in 2006-07 it decrease to 2.31 Interpretation: The ratios are fluctuating in 2008-09 the ratio is 2. R. in 2004-05 it increase to 2. DHARWAD Page 89 . Overall it shows they are improving their sales. I. in 2005-06 increases to 3.67 2008-09 341538442 147709374 2.e.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.31 times. Dharwad NET ASSETS TURNOVER RATIO YEAR 2004-05 2005-06 Net Sales 390565567 489014707 Net 158600052 163107199 Assets Ratio 2.97 2007-08 511817364 19198236 2. one rupee of investment they are making sales.46 3 2006-07 468283461 163314054 2.97 And in 2008-09 it decreases to 2.

GROSS PROFIT RATIO 2. RETURN ON TOTAL ASSETS R.Karnataka Milk Federation.S. INTERSTED PARTIES IN PROFITABILITY RATIOS:  MANAGEMENT  CREDITORS  OWNERS Generally tow major types of profitability ratios are calculated:  Profitability in relation to sales  Profitability in relation to investment PROFITABILITY RATIOS INVOLVE: 1. RETURN ON EQUITY 7. Therefore company should continuously evaluate the efficiency of the company in terms of profits. OPERATING PROFIT RATIO 5. Profit is the ultimate output of company and company will have no future if it fails to make sufficient profits. OPERATING EXPENES RATIO 4. DHARWAD Page 90 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION. Dharwad PROFITABILITY RATIO INTRODUCTION: A company should earn profit to survive and grow over a long period of time. RETURN ON INVESTMENT/OVERALL PROFITABILITY RATIO 6. NET PROFIT RATIO 3. OBJECTIVES: Profitability ratio is calculated to measures the operating efficiency of the company. Poor operational performance may indicate poor sales and hence poor profits. Lower profitability may arise due to lack of control over the expenses.

23. A low gross profit margin reflects higher cost of goods sold due to  Reduction in selling price  Inefficient utilization of plant and machinery etc…. 2006-07is 15. DHARWAD Page 91 .. 2004-05 is 11.86 it‟s not good because the expenses are more.86 11. Gross profit margin ratio reflects the efficiency with Which management and implies that the firm is able to produce at relatively lower cost.23 8.07 Interpretation: The gross profit ratio is not satisfactory its fluctuating in 2004-05 is 11.73.73 15.10 13. And Gross profit is compared with the sales.1 and 2007-08 is 13.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.07. 2005-06is 8. It is calculated as follows: Gross profit ratio= sales – cost of goods sold Net Sales = Gross profit Net Sales *100 GROSS PROFIT MARGIN RATIO YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 Gross 43881498 42692932 70721899 70943105 37841840 profit Net Sales 390565567 489014707 468283461 511817364 341538442 RATIO (%) 11. R. Dharwad 1) GROSS PROFIT MARGIN RATIO:Gross profit is the difference between sales and the manufacturing cost of goods sold.S.

= Profit (loss) after tax Net Sales *100 This ratio indicates company‟s capacity to withstand adverse economic conditions. it is calculated as follows.Karnataka Milk Federation. Depending on the concept of net profit employed. DHARWAD Page 92 .SHETTY COLLEGE OF BUSINESS ADMINISTRATION.S.58 (%) Source: Annual Reports of Company Interpretation: since the net profit ratio of company in 2004-05 become negative because increasing in expenses and later it has recover the profit rapti in the year 2004-05 its 2 again in 2005-06 negative but in the last 2 financial year its goes on increasing in 2008-09 was 3. R. A company with high net margin ratio would ensure adequate return to the owners as well as enable a firm to withstand adverse economic condition when selling price is declining.94 but it has to improve.27 0.94 3. Dharwad 2) NET PROFIT MARGIN RATIO This ratio is also known as net margin.32 3. NET PROFIT MARGIN RATIO 2004-05 2005-06 2006-07 2007-08 7624062 -1353071 1512197 20189449 YEAR 2008-09 Net -8819318 Profit Net 390565567 489014707 468283461 511817364 341538442 Sales Ratio 2 -0. cost of production is rising and demand for the product is falling. It would really be difficult for a low net margin ratio company to withstand these advantageous. This measures the relationship between net profit and sales of a firm.

Karnataka Milk Federation. it indicates more operating expenses. OPERATING EXPENSES RATIO YAER 2004-05 2005-06 Operating 378648070 486585013 expenses Net sales 390565567 489014707 Ratio (%) 96.50 2006-07 463453061 468283461 98.96 2007-08 491055215 511817364 95.94.94 2008-09 344171419 341538442 100. R.50 it decreases and again in 2006-07 and 2007-08 it was 98. cost of goods sold plus selling expenses and general and administrative expenses (excluding interest) by sales.S. DHARWAD Page 93 .77 and 99. Dharwad 3) OPERATING EXPENSE RATIO: It explains the changes in the profit margin ratio. This ratio is computed by dividing opening expenses viz.96 and 95. Operating Expenses Ratio = Operating Expenses *100 Net Sales A higher operating Expenses ratio is unfavorable..SHETTY COLLEGE OF BUSINESS ADMINISTRATION. since it will have a small amount of operating income to meet interest.94 99. In subsequent years it has decreased it shows changes in the sales price and demand for the products in the market it has to. and on the othere hand lower operating expenses ratio is favorable. dividends etc.77 Interpretation: the operating expenses ratio was more in 2003-04 in 2005-06 was 100.

03% 4.62 12.58 1. Return on Equity= PAT *100 Shareholder‟s equity or net worth Return on Equity indicates how well the firm has used the resources of owners.50 16.05% 0. So it has to be improved.77% Interpretation: The operating profit ratio in the year 2004-05 it was 3.49% 1. R.S. which has the responsibility of maximizing the owner‟s welfare. This ratio is of great interest to the present as well as the prospective shareholders and also of great concern to management.5.05% YEAR EBIT Net Sales Ratio (%) 2008-09 -2632977 341538442 3. The firm is not getting more profit by its shareholders fund because of its more operating expenses. RETURN ON EQUITY YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 PAT 7624062 -1353071 1512197 20189449 8819318 Net Worth 91132042 85120464 100623785 121452266 72180358 Ratio (%) 8.05 because of the increasing in expenses in 2004-05 3. 5) RETURN ON EQUITY (ROE)/ NET WORTH Return on Equity is calculated to see the profitability of owner‟s investment.49 later it recover in 2007-08 it become 4. Dharwad 4) OPERATING PROFIT RATIO The ratio is calculated as follows: = EBIT*100 Net Sales OPERATING PROFIT RATIO 2004-05 2005-06 2006-07 2007-08 11917497 2429694 4830400 20762149 390565567 489014707 468283461 511817364 3.5 again in decline in 200506 0.36 -1. DHARWAD Page 94 .21 Interpretation: Since return on Equity is also increasing but it is not favorable. This Ratio reflects the extent to which this objective has been accomplished.Karnataka Milk Federation.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.5. The ratios are decreasing due to increases in expenses ratio. it means for 100 Rupee of sale the operating profit is rupees 4.

50 0. Dharwad 6) RETURN ON TOTAL ASSETS (ROTA) This ratio is compared to know the „ productivity of the total assets‟.82 11.Karnataka Milk Federation. DHARWAD Page 95 .68 Interpretation: in period 2003-04 there is net loss no return in 2004-05 its 7. There are methods of computing Return on Total Assets A. ROTA = PAT Total Assets B.S.93 in 2007-08 it was 10. ROTA = PAT+ interest *100 Total Assets RETURN ON TOTAL ASSETS (ROTA) YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 PAT 11909036 1536103 3422377 20775193 2632979 Total 158600052 164460270 163314054 191928236 156528692 Assets Ratio (%) 7.82 and interest both are less compare to 2004-05 so there is fluctuation return on total asset ratio.5 again in 2005-06 it decreases to 0.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.93 2. There is no proper utilization of total assets in the company. *100 R.092 10.

Profits but in later year it has increased to Rs. the more efficient use of the capital employed. tools + freight. Dharwad 7) RETURN ON INVESTMENT(ROI): It is also called as overall profitability ratio or return on capital employed (ROCE) ratio. transportation.14 Rs.S.84.Karnataka Milk Federation.87 respectively.  Gross profit = Net Sales.Closing Stock.27 PBIT *100 Capital Employed 2006-07 4830400 198967943 2. ROI = Operating Profit *100 OR Capital employed RETURN ON INVESTMENT (ROI): YEAR 2004-05 2005-06 EBIT 11917497 2429694 Capital 203851553 191163257 employed Ratio (%) 5.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. But also it is not favorable because operating expenses are more. The higher ratio.  Operating expenses = COGS + payments to and provision for employees + rent + rates and taxes + Insurance + Publicity and selling expenses work operating expenses + Repairs to building + Repairs to plant and machinery + other expenses + depreciation.41 Interpretation: In 2004-05 for 100Rs. port charges + power and fuel). This ratio is the broadest measure of the overall performance of business firm.84 1. It is calculated on the bases of the following. Of investment the company is getting only 0.87 2008-09 -2632977 185834050 -1.COGS  Total Assets = Fixed Assets + Current Assets. It indicates the percentage of return on the total capital employed in the business.  Net Worth = Capital + Reserves and surplus.  COGS = cost of goods sold  Other incomes Considered as Operating Income R. Stock+ Purchases of products+ Consumption of Raw materials and components + consumption of stores spares. 9.42 2007-08 20762149 210162460 9. DHARWAD Page 96 . NOTES:  Net sales= Gross Sales-Excise  COGS=(Op. Rs. 5.

63 35.58 Page 97 R.98  Debt equity 0.63 1.73 0.91 2.Karnataka Milk Federation.51 0.13 1.16 10.57 0.10  Quick ratio 1.86 3.09 2. DHARWAD .67 14.57 0.70 1.10 0.24 1.31 C 11.84 2.32 13.46 17.75 13 16.94 11.19 16 20.03 10. Dharwad COMPARITIVE STATEMENT S.25 0.76  Current Ratio 0.33 10 17.41 22.31 12 13.44 200809 1.97 16. 05 06 07 A Financial Ratios 1.41 0.62 36.12 0.67 2.78 0. Name Of the ratio 200420052006No.42 29.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.72 3 17.72 1.04 30 35.73 -0.23 2 8.39 25 35.32 35.52  Proprietary Ratio  Interest Coverage Ratio Turnover Ratio  Stock Turnover Ratio  Inventory Conversion Period  Debtors Turnover ratio  Debtors Collection period  Creditors turnover Ratio  Creditors Collection Period  Working Capital Turnover Ratio  Net Asset Turnover Ratio Profitability Ratio  Gross profit Ratio 200708 1.23 22 35.07 -2.27 15.86 1.42 B 12.95 1.91 2.46 -0.52 27.32 21 31.S.02 10.77 10 14.32 21 31.67 11.39 11.61 ratio 2.

09 95.Karnataka Milk Federation.36 7.77% 0.50 99.94 4.96 1.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.5% 9. DHARWAD Page 98 .87 16.94 3.50 0. Dharwad  Net profit  Operating Expense Ratio  Operating profit  Return on investment  Return on equity  Return on total Assets Ratio 96.77 -0.82 100.21 -1.S.84 8.93 98.68 R.49% 1.50 2.5% 5.42 1.03% 2.62 10.27 -1.58 0.14 -12.

DHARWAD Page 99 .e. 8. The inventory turnover ratios are not good.68(avg) the assets are not using properly. 7.56. It also shows that the balanced risk on both parties. 3.. a low debt company). 9.Karnataka Milk Federation. 5. R. Less inventory ratio i.46 and days are 24(average). 4. it shows that the company is financially strong(i. Working capital turnover ratio is not good because its decreasingly every year it shows there no proper use of working capital ratio is 16. The Current ratio is below the standard ratio and it is not good from company‟s point of view. 6. The creditor‟s turnover ratio goes on increasing and creditor‟s payment period is decreasing. holding periods are increasing in conversion of work in progress to finished goods ratio is 15.S.56 paisa through share funds. It shows the collection of debtors is very prompt. 10. The liquidity ratio is according to standard ratio (1:1) and it is good from company‟s point of view. It shows that it is not good position to meet the short term liabilities. it shows that company is becoming financially strong and indicates how much share funds are invested in total assets of a firm.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. But company‟s point of view they are not taking credit benefits provided by creditors. The debtor turnover ratio is good. It signified creditors being paid promptly.e.A net asset turnover ratio is also not good ratio is 2. It show the company is able to meet its liabilities is short period. i.e. The debt equity ratio is showing decreasing trend in year by years. Dharwad FINDINGS 1. the ratio is 0. 1 Rupees of total Assets 0. 2. It indicates funds means the shareholders fund.66. Interest coverage ratio is towards the equity shareholder it shows decreases in financial year. The proprietary ratio increasing year by year.

3. As is evidenced above.00. which is not even 50% of the capacity. The Company can think to increase the Debt equity which is profitable to the company its helps in expansion of business or investing in some mutual funds and other market securities.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.Karnataka Milk Federation. Further. the operational aspects also need to be reviewed as is in following suggestion. As seen in the operating expenses ratio. which means there a sort of mismanagement of the expenses. so the firm is forced to think to maintain it. administering and selling expenses. hence a special funds managers can be appointed or a broker who will take care of such aspects. there is increase in the operating expenses. b. Hence there is a need of better management of manufacturing. As mentioned above. a. But a very low collection period may also imply its inability to allow credit to its customers (dealers) and thereby losing sales and profits. Presently only 85. Though it is a government run organization. Conversely the credit policies with respect to purchases can adjust to the above. 2. This can be owned to very high procurement expenses of raw-material (milk) and Staff Expenses the other operating expenses are under control.000 ltrs of milk is produced by DMU. The existing capacity of DMU is 2.000 its of milk per day. R. Hence it has to increase milk procurement routes by encourage village people to increase the cooperative milk societies (Presently 560) and add to their existing list of suppliers to DMU. DHARWAD Page 100 . by enhanced sales through better credit policies. Investment Is again subject to market risk. 5. and also improve the liquidity position through increasing cash at hand and at Bank. the firm has small margin or Operating Profit.S. as the return on capital has been fluctuating even on account of increased sales. The existing debtor‟s collection period is low and prompt. The company should increase its current assets to meet the current obligations through making credit sales. the resource (mainly funds) utilization of the firm has been poor. This might require an in-depth analysis of capital requirements of the firm. So the only remedy for the situation may be to either decrease the cost of raw material or increase the selling price of finished material. competitiveness must be ensured. Dharwad SUGGESTIONS 1. 4.

Dharwad 6.S.SHETTY COLLEGE OF BUSINESS ADMINISTRATION. It is further suggested that the firm should grow less dependent on the loans as the rates of interest are on the rise. Also it is dis-heartening to find that over a long period of operation of almost 25years.Karnataka Milk Federation. DHARWAD Page 101 . It should plan to go national and may be even International. the firm operates only in one state. The planning for further expansion activities should take place now. R.

S. Dharwad CONCLUSION When we analysis its financial performance through ratio there is a decline of its profit in 2004-05 but in 2005-06 & there is a increment in its financial performance but it is not enough because the firm has 25 years experience. And it has great potential to increase its profit.SHETTY COLLEGE OF BUSINESS ADMINISTRATION.Karnataka Milk Federation. R. DHARWAD Page 102 .

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