A PROJECT REPORT

“FINANCIAL PERFORMANCE ANALYSIS”
OF ADITYA BIRLA GROUP SYNOPSIS REPORT

ON

Submitted in partial fulfillment of The requirement for the award degree of MASTER OF BUSINESS ADMINISTRATION TO
DEPARTMENT OF COMMERCE AND BUSINEESS MANAGEMENT JNT UNIVERSITY, HYDERABAD.
SUBMITTED BY

SREE DATTHA INSTITUTE OF ENGINEERING AND SCIENCE

K.B. KRANTHI KUMAR HT. NO. 07E41E0022

(Affiliated to JNT University) IBRAHIMPATNAM, R.R.DIST. (2007-2009)

A

PROJECT REPORT ON

―FINANCIAL PERFORMANCE ANALYSIS‖
OF

ADITYA BIRLA GROUP SYNOPSIS REPORT
SUBMITTED TO DEPORTMENT OF BUSINESS MANAGEMENT

SREE DATTHA COLLEGE OF ENG& SCIENCE
In partial fulfillment of the award degree in Business Administration (MBA) By

K.B. KRANTHI KUMAR HT. NO. 07E41E0022
Under the super vision of Dr. Mrs. USHARANI

SREE DATTHA INSTITUTE OF ENGINEERING AND SCIENCE IBRAHIMPATNAM, R.R.DIST. DEPARTMENT OF COMMERCE AND BUSINEES MANAGEMENT JNT UNIVERSITY, HYDERABAD.

(2007-2009)

ACKNOWLDGEMENT

Behind every successful achievement lies great contribution by those without whom that could have been achieved to them, although more words of gratitude is insufficient for their unlimited contribution. I take this opportunity to revel my heartfelt gratitude imprinted deep within me. I am very much thankful to the finance manager K.B.KRANTHI KUMAR and the staff of ADITYA BIRLA GROUP SYNOPSIS REPORT for giving encouragement and their kind cooperation. I would like to thanks to my college principal Mr RAM REDDY lecturers especially Mrs C USHA RANI (HOD) and every one and apologies to those I have missed upon, who helped me in successful completion of this project.

By (K.B.KRANTHI KUMAR )

B.DECLARATION I hereby declare that the enclosed project entitled ―FINANCIAL PERFERMANCE & ANALYSIS‖ done in ADITYA BIRLA GROUP SYNOPSIS REPORT is submitted to ―JNT UNIVERSITY. HYDERABAD‖ in partial fulfillment of ―MASTER OF BUSINESS ADMINISTRATION‖. K. the project is an original work done by me and to the best of my knowledge this work is not submitted to any other university or college for award of any other degree. diploma or Fellowship.KRANTHI KUMAR (07E41E0022) .

CONTENTS TOPIC 1.VIII FINDINGS&SUGETIONS BIBILOGRAPHY 92-96 97 45-91 31-44 28 -30 14-27 5-7 PAGE NO 1-4 8-13 .VII DATA ANALYSIS & INTERPRETATION 8. CHAPTER. CHAPTER –II INTRODUCTION 3. CHAPTER –IV COMPANY POROFILE 5.VI CONCEPTUAL FRAMEWORK 7. CHAPTER –V RESEARCH AND METHODOLOGY 6. CHAPTER. CHAPTER –III INDUSTRY PROFILE 4.CHAPTER -1 EXCUTIVE SYNOPSIS 2. CHAPTER.

CHAPTER -I EXECUTIVE SYNOPSIS .

EXECUTIVE SYNOPSIS COMPANY PROFILE:The Aditya Birla GroupLtd. The Aditya Birla Group limited is now on its stride of completing its 25th year in the history of manufacturing & infrastructure markets serving the cause of industrial development & economy. . Established in 1984 as a manufacturing organization. The Aditya Birla Group has been promoting the mobilization of funds in the industrial for the development of industrialization in the state of Andhra Pradesh. The group has made its beginning in 1984 and today occupies a prominent place among the leading manufacturing industry in India.

activity ratios. To carry out the present study. Hence the present study has been under taken with the help of Ratio Analysis.NEED FOR THE STUDY: The main motto behind starting of any business is to gain profits. OBJECTIVES OF THE STUDY: . some selected ratios like liquidity ratios. leverage ratios and profitability ratios are examined to test the financial position of the company. We can say the company is running in healthy position by observing its past and present financial position. The Company started in the year 1984. Aditya Birla Group. a period of three years is taken from 2006 to 2009 in the context. now the company management wants to assess the financial position of the company. SCOPE OF THE STUDY: The scope of the study is confined to the following aspects.

sources.. from 200607 to 2008-09.  To examine the short-term solvency of the company. Period of the study: The present study has been undertaken for a period of three years i.Keeping in view of above-mentioned facts. Brochures etc. . Research methodology: Research Design : Analytical Analytical tools : Ratio Analysis Data Sources : The data is collected from secondary data Like company annual reports.e. the following are the objectives of the study. Secondary objectives  To study the financial strengths and weakness of the company. Primary objective: To analyze the financial performance of the company through the calculation of various ratios.

CHAPTER -II INTRODUCTION .

A financial statement that summarizes a company's assets. These three balance sheet segments give investors an idea as to what the company owns and owes. liabilities and shareholders' equity at a specific point in time. It also shows the net profit or loss incurred over a specific accounting period. The portion of the income statement that deals with operating items is interesting to investors and analysts alike because this section discloses information about revenues and expenses that are a direct result of the regular business operations.INTRODUCTION A financial statement that measures a company's financial performance over a specific accounting period. The income statement is divided into two parts: the operating and non-operating sections. The non-operating items section discloses revenue and expense information about activities that are not tied directly to a company's regular operations. then this information would be in the non-operating items section. Also known as the "profit and loss statement" or "statement of revenue and expense". Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and nonoperating activities. if the sport equipment company sold a factory and some old plant equipment. if a business creates sports equipment. then the operating items section would talk about the revenues and expenses involved with the production of sports equipment. For example. For example. as well as the amount invested by the shareholders. The income statement is the one of the three major financial statements. The other two are the balance sheet and the statement of cash flows. . typically over a fiscal quarter or year.

shows how much revenue and profit a company has generated over a certain period.rather. the financial statements are built to be used together to present a complete picture of a company's finances. as there is no one set template that accurately accommodates for the differences between different types of businesses. It's called a balance sheet because the two sides balance out. The income statement. inventory and property are on the asset side of the balance sheet. The balance sheet is one of the most important pieces of financial information issued by a company. on the other hand. It is a snapshot of what a company owns and owes at that point in time. while on the liability side there are accounts such as accounts payable or long-term debt. Neither statement is better than the other . Accounts such as cash. . The exact accounts on a balance sheet will differ by company and by industry.Assets = Liabilities + Shareholders' Equity Each of the three segments of the balance sheet will have many accounts within it that document the value of each. This makes sense: a company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders (shareholders' equity).

CHAPTER– III INDUSTRY pROFILE Manufacturing industry refers to those industries which involve in the manufacturing and processing of items and indulge in either creation of new commodities or in value .

The cost of letting such industries flourish may even exceed the benefits generated by them. Manufacturing industries are broadly categorized into engineering industries. The manufacturing industry accounts for a significant share of the industrial sector in developed countries.addition. energy industries. construction industries. textile industries. Manufacturing industries are important for an economy as they employ a huge share of the labor force and produce materials required by sectors of strategic importance such as national infrastructure and defense. not all manufacturing industries are beneficial to the nation as some of them generate negative externalities with huge social costs. Evolution of the manufacturing industry: Manufacturing industries came into being with the occurrence of technological and socioeconomic transformations in the Western countries in the 18th-19th century. electronics industries. This was widely known as industrial revolution. plastic industries. Working of manufacturing industry: Manufacturing industries are the chief wealth producing sectors of an economy. The final products can either serves as a finished good for sale to customers or as intermediate goods used in the production process. It began in Britain and replaced the labor intensive textile production with mechanization and use of fuels. food and beverage industries. chemical industries. metalworking industries. transport and telecommunication industries. These industries use various technologies and methods widely known as manufacturing process management. However. .

Manufacturing industry analysis suggests that the manufacturing industry has served as the pivotal factor in the economic development of a country. The same applies for the United States Of America, whose economy has been growing rapidly owing to the successful manufacturing industry. Manufacturing industry analysis also indicates that the manufacturing industry provides employment to many thereby contributing to the gross domestic product and per capita income of the country. Approximately 75% of the engineers as well as the scientists get employed in the manufacturing industry as recorded by a manufacturing industry analysis. The Census bureau categorizes a particular manufactured product depending on the primary goods produced by the manufacturing industry.

Statistical data showing the impact of the manufacturing industry on economy:

In the year 1992, the expenditure incurred on the research and development by the manufacturing establishments was USD$91.2 billion in the United States Of America. Out of this Non Governmental manufacturing establishments registered 79.4% of USD$91.2 billion.

18% of GDP or gross domestic product in the year 1993 was due to revenues generated by the manufacturing industry, established according to reports of manufacturing industry analysis.

46.4 was the result obtained in order to find out the number of workers employed in every establishment. This figure was registered in the year 1992. 15% of shipments in the manufacturing segment were due to the material industry. Capital stock has registered a steady rise for all the sectors of the manufacturing industry since 1982.

Employment opportunities in the manufacturing industry have declined comparatively. Manufacturing industry analysis also suggests that in some countries like China, technological know how has to be developed. Despite the fact that China is ranked fourth in the manufacturing productivity, due to technological lacunae, it is not being able to compete in the world market. Also needed are professionals well versed in the technological know how.

Owing to the emerging technologies world wide, the world manufacturing industry has geared up and has incorporated several new technologies within it's purview. Economists consider the World manufacturing industry as a sector which generates a lot of wealth. Generating employment, introducing latest techniques, real earnings from shipments etc., have put the world manufacturing industry in a favorable position.

With the implementation of the concept of eco friendly environment, world manufacturing industry has taken several measures to ensure that the manufacturing industries worldwide abide by the eco friendly norms. World manufacturing industry also plays an important role in the defense of a country. By manufacturing aircrafts which play a vital role in the country's defense, the aerospace manufacturing industry acts as a shield. Other industries in the manufacturing sector manufactures products which are indispensable in our daily lives. With regard to the GDP or gross domestic product, world manufacturing industry contributes to the global economy as well as the global GDP. World manufacturing industry and type of economy:

Capitalist economy: Manufacturing industry in a capitalist economy indulge in mass production and make them available to the customers by earning profits.

Collectivist economy:

Manufacturing industry in a collectivist economy is guided by a state run agency for making available the manufactured goods depending on the requirement.

Modern economy: Manufacturing industry in a modern economy operates under regulations framed by the Government. The manufacturing industry in India has all the qualities which enhance economic development, increase the productivity of the manufacturing industry and face competition from the global markets. The Manufacturing industry in India is believed to have the potential of improving the economic condition of India.

Indian manufacturing industry: Research findings

Studies conducted on the manufacturing industry have concluded that India has a working population of 75%. Out of this, only 600 million have acquired education till middle school. Due to this reason, the manufacturing industry in India, which is labor intensive, can provide the requisite number of employment units in the country. Studies have indicated that the productivity of the manufacturing industry in India is approximately 1/5th of the productivity in the manufacturing industry of United States Of America. It is about ½ as compared to the productivity levels in South Korea as well as Taiwan. Labor productivity has escalated only to a small extent in case of India in comparison to United States of America, on the contrary, labor productivity has increased manifold in countries like Taiwan and Korea.

Manufacturing industry in India and exports:

Exports of manufactured goods in India accounted for 75% in comparison to exports of manufactured goods all over the world. Owing to the performance manifested by the export sector in India, the scenario indicates that there is less competition in the

Malaysia. Contribution of India's export towards international market grew from 05% to 0.manufacturing segment. registered almost double increase in exports. China. Thailand and South Korea. During the same period. India continued to be one of the protected economies of the world. Absence of competition is also established by the fact that in spite of reducing the tariff in the early and mid 90s.7% during 1990 to 2000. .

CHAPTER– IV COMPANY PROFILE .

Globally the Aditya Birla Group is: A metals powerhouse. Egypt. In India. UK. France. Australia. Luxembourg. Dubai. Brazil. Over 50 per cent of its revenues flow from its overseas operations. Switzerland. Malaysia and Korea. with the largest single location copper smelter No. Italy. It is one of the three biggest producers of primary aluminium in Asia. to keep experimenting. Beyond business — the Aditya Birla Group is: . Myanmar. USA.2 billion corporation. Hindalco-Novelis is the largest aluminium rolling company. It is anchored by an extraordinary force of 130. belonging to 30 different nationalities. among the world's most cost-efficient aluminium and copper producers. The Group operates in 25 countries — India.A US $29. Indonesia. Vietnam. the Aditya Birla Group is in the league of Fortune 500. China.000 employees. Laos. Singapore.1 in viscose staple fiber In India: A premier branded garments player The second largest player in viscose filament yarn The second largest in the chlor-alkali sector Among the top five mobile telephony companies A leading player in life insurance and asset management Among the top three supermarket chains in the retail business Rock solid in fundamentals. Germany. Hungary. Canada. Philippines. the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh. Bangladesh. the Group has been adjudged "The Best Employer in India and among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007. Thailand.

LOGO The name ―Aditya Birla‖ evokes all that is positive in business and in life. Seamlessness. Speed. Logo is the symbolic reflection of these traits. Values Integrity. education. sustainable livelihood. It is the cornerstone of our corporate identity. It exemplifies integrity.Working in 3. spearheaded by Mrs. Passion. An inner circle symbolizing the internal universe of the Aditya Birla Group. Commitment. employees and Society at large. Vision: To be a premium global conglomerate with a clear focus on each business. an . earthy colours. Shareholders. it is very arresting and shows the sun rising over two circles. It helps us leverage the unique Aditya Birla brand and endows us with a distinctive visual image. performance. quality. Depicted in vibrant.700 villages Reaching out to seven million people annually through the Aditya Birla Centre for Community Initiatives and Rural Development. infrastructure and espousing social causes Running 41 schools and 18 hospitals Transcending the conventional barriers of business to send out a message that "We care". Mission To deliver superior value to our customers. perfection and above all character. Rajashree Birla Focusing on: Health care.

We retrace the highlights of this remarkable journey. Arun Jaitley. It embeds a sense of pride. . 2008 The President of India. traces its origins back to the tiny village of Pilani in the Rajasthan desert. Rajya Sabha. Pratibha Patil conferred the much coveted Rotary International Polio Eradication Champion Award on Mrs. MP. starting from the present: 2009 In recognition of work that truly exemplifies the highest values of society and corporate leadership for social responsibility and sustainable development initiatives. attended by the Chairman.2 billion. Mrs.outer circle symbolizing the external universe. This undoubtedly enhances our profile among our internal and external stakeholders. Mrs. the Reader's Digest Pegasus Star Award has been conferred on Hindalco.000 colleagues spanning 25 countries and 30 nationalities across the globe. and a dynamic meeting of rays converging and diverging between the two. Pragnya Ram as the Chief Custodian of the Aditya Birla logo OVERVIEW The Aditya Birla Group. where Seth Shiv Narayan Birla started cotton trading operations in 1857. unity and belonging in all of our 130. Our logo is our best calling card that opens the gateway to the world. Rajashree Birla who spearheads all the Group's social projects received this much coveted award on behalf of Hindalco from Mr. India's first multinational corporation. the Group's footprint extends to 25 countries and its revenues are US$ 29. Through its wide usage. It signals the common values and beliefs that guide our behaviour in all our entrepreneurial activities. on 21 January 2009 in Delhi. impact-oriented Group image. we create a consistent. Today. Rajashree Birla in an elegant function at the Rashtrapati Bhavan (Delhi). Corporate logo thus serves as an umbrella for our Group. Dr. select Rotarians and WHO officials.

T. Indo Bharat Rayon.2007 The Aditya Birla Group was honoured with the India Today Group's Readers Digest Gold award in recognition of the work that truly exemplifies the highest values of society as well as those of Reader's Digest. Canada. Rajashree Birla. In May 2007. India. Novelis became a Hindalco subsidiary with the completion of the acquisition process. Chairperson. Aditya Birla Group to set up a world-class aluminium project in Orissa. as well as being India's leading copper producer. for VSF. Hindalco awarded the CII . Grasim Industries Limited. China. at the Pegasus Corporate Social Responsibility Awards 2007 function. 2005 Indian Rayon re-christened as Aditya Birla Nuvo. 2004 . The award was received by Mrs. TransWorks Information Services announces success of bid to acquire Minacs Worldwide. Thailand and P. 2006 Hindalco in a joint venture with Almex USA Inc. Hindalco awarded the Greentech Safety Silver Award for its outstanding safety performance during 2005-06. Indonesia form a JV with Hubei Jing Wei Chemical Fibre Company. The transaction makes Hindalco the world's largest aluminum rolling company and one of the biggest producers of primary aluminum in Asia. The Aditya Birla Group signs a framework agreement to acquire St Anne Nackawic Pulp Mill. Thai Rayon Public Company Limited. Aditya Birla Center for Community Initiatives and Rural Development.Sorabji Green Business Centre "National Award for Excellence in Water Management 2007".

taking total capacity to 1. published in Business World magazine.. is ranked 9th in the same study. The Group's joint venture concern. The Group is ranked 16th in India's first ever survey of 'Great places to work in'. Bihar Caustic and Chemicals Ltd. .60. Chairman of the Group. received the FICCI Annual Award 2003-2004 in recognition of corporate initiaitve in rural development. Completion of the implementation process to demerge the cement business of L&T and completion of open offer by Grasim.000 TPA at Hi-Tech Carbon. Rehla. Hindalco recieves India CFO Award 2004 for excellence in finance in a large corporate. Kumar Mangalam Birla taking over as Chairman. 2003 Mr. Gummidipundi. Mr. Kumar Mangalam Birla. Indian Rayon completes its brownfield expansion of 40.Board reconstituted with Mr. Nagda. conducted by Hewitt Associates and Business Today. The Asian CSR Awards are Asia's premier awards programme on Corporate Social Responsibility.2003. Birla Sun Life Insurance. The Group is ranked 20th in a study on the 'Best Employers in India'.000 TPA. has received the FICCI Annual Award 2003-2004 in recognition of corporate initiative in family welfare. with the latter acquiring controlling stake in the newly formed company UltraTech. Scheme of Arrangement announced to merge Indal with Hindalco. Kumar Mangalam Birla is selected as The Economic Times' Business Leader of the year. Hindalco receives the Asian CSR Award for its "Rural Poverty Alleviation Programme". Grasim. Jharkhand. is selected as Business India's Businessman of the Year .

Grasim to acquire an 8. K. B. Misra :: Dr. Chairman :: Mr. Its Board of Directors comprises: :: Mr. K. Kumar Mangalam Birla. As a consequence. is the Group's apex decision making body and provides strategic direction to Group companies. Maheshwari :: Mr. S. S. Jain : Dr. S. the Group's first carbon black company in China. Liaoning Birla Carbon. D. K. to acquire management control of CemCo.The Group acquires the Mount Gordon Copper mines in Australia. S. Vikram Rao :: Mr. Bhattacharya :: Mr. is incorporated. Aga :: Mr. The Group divests its entire 37. The board of engineering major Larsen & Toubro Ltd (L&T) decides to demerge its cement business into a separate cement company (CemCo). another strategic step in becoming a globally competitive copper player. MANAGEMENT TEAM The Aditya Birla Management Corporation Private Limited. Ajay Srinivasan HERITAGE . K.38 per cent equity stake in Mangalore Refineries and Petrochemicals Ltd (MRPL) to the Oil and Natural Gas Corporation (ONGC). Singh :: Mr. Misra : Mr. in which L&T will retain 20 per cent of its equity with the balance to be distributed to their shareholders in proportion to their shareholding in L&T.5 per cent equity stake from L&T and then make an open offer for 30 per cent of the equity of CemCo.

He was the first to put Indian business on the world map. the Birla business expanded rapidly.The roots of the Aditya Birla Group date back to the 19th century in the picturesque town of Pilani. laying the foundation for the House of Birlas. It was at "Birla House" in Delhi that the luminaries of the Indian freedom struggle often met to plot the downfall of the British Raj Ghanshyamdas Birla found no contradiction in pursuing business goals with the dedication of a saint. Mr. Aditya Birla dared to dream of setting up a global business empire at the age of 24. As a close confidante of Mahatma Gandhi. Aditya Vikram Birla. emerging as one of the foremost industrialists of pre-independence India. aluminium. he played an active role in the Indian freedom struggle. set up industries in critical sectors such as textiles and fibre. our Group's legendary leader. along with Gandhiji. He had foreseen the winds of change and staked the . It was here that Seth Shiv Narayan Birla started trading in cotton. In the early part of the 20th century. The principles by which he lived were soaked up by his grandson. long before globalization became a buzzword in India. Aditya Vikram Birla: putting India on the world map A formidable force in Indian industry. as far back as 1969. he ventured to set up world-class production bases. set amidst the Rajasthan desert. In the then vibrant and free market South East Asian countries. Through India's arduous times of the 1850s. Ghanshyamdas Birla. He represented India at the first and second round-table conference in London. cement and chemicals. our Group's founding father.

an employee strength of 75. free market driven economy order. 22 years before economic liberalisation was formally introduced by the former Prime Minister. the largest refiner of palm oil. He believed that a business could be global even whilst being based in India. comprising of 55 benchmark quality plants. Malaysia. He set up 19 companies outside India. Therefore.000. Interestingly. Under his stewardship. the Group has sustained and established a leadership position in its key businesses through . they attained the status of the largest single producer of viscose filament yarn. At the time of his untimely demise. he drove single-mindedly to put together the building blocks to make our Indian business a global force. Through this outstanding record of enterprise. In his time. Indonesia. Under the leadership of our Chairman. the third largest producer of insulators and the sixth largest producer of carbon black. was a dream he forever cherished.000 crore globally. In India. he helped create enormous wealth for the nation. apart from being a producer of cement. his companies earned respect and admiration of the people. Narasimha Rao and the former Union Finance Minister. That India attains respectable rank among the developed nations. his companies rose to be the world's largest producer of viscose staple fibre. Mr. Mr. Kumar Mangalam Birla.future of his business on a competitive. He put Indian business on the globe. and the first Indian International Group globally. for Mr. his success was unmatched by any other industrialist in India. with assets of over Rs. He was proud of India and took equal pride in being an Indian. as one of India's finest business houses. grey cement and rayon grade pulp.000 and a shareholder community of 600. globalisation meant more than just geographic reach. The Group is also the largest producer of aluminium in the private sector. Aditya Birla. and respect for Indian entrepreneurship in South East Asia. Dr. Most importantly.000 crore. the lowest first cost producers in the world and the only producer of linen in the textile industry in India. back in his home-territory.9. the Philippines and Egypt. Manmohan Singh. in Thailand.8. the Group's revenues crossed Rs.

Spearheaded by Grasim. garments. the Group is today one of Asia's most diversified business groups. telecom. GROUP COMPANIES :: Grasim Industries Ltd. palm oil. :: Aditya Birla Nuvo Ltd. software and BPO. Aditya Birla Nuvo. And with successful forays into financial services. . :: Hindalco Industries Ltd. Indonesia. INDIAN COMPANIES :: PSI Data Systems :: Aditya Birla Minacs Worldwide Limited :: Essel Mining & Industries Ltd :: Idea Cellular Ltd.continuous value-creation. :: Aditya Birla Insulators :: Aditya Birla Retail Limited :: Bihar Caustic and Chemicals Ltd. cement. copper. the Philippines and Egypt. Malaysia. :: UltraTech Cement Ltd. carbon black. INTERNATIONAL COMPANIES Thailand :: Thai Rayon :: Indo Thai Synthetics :: Thai Acrylic Fibre :: Thai Carbon Black :: Aditya Birla Chemicals (Thailand) Ltd. aluminium. Indo Gulf Fertilisers and companies in Thailand. Hindalco. the Aditya Birla Group is a leader in a swathe of products — viscose staple fibre. insulators.

Indonesia :: PT Indo Bharat Rayon :: PT Elegant Textile Industry :: PT Sunrise Bumi Textiles :: PT Indo Liberty Textiles :: PT Indo Raya Kimia Egypt :: Alexandria Carbon Black Company S.A. Group Australia :: Aditya Birla Minerals Ltd.V.A.:: Thai Peroxide Philippines :: Indo Phil Group of companies :: Pan Century Surfactants Inc.E China :: Liaoning Birla Carbon :: Birla Jingwei Fibres Company Limited :: Aditya Birla Grasun Chemicals (Fangchenggang) Ltd. Canada :: A. .E :: Alexandria Fiber Company S.

Singapore :: Swiss Singapore Overseas Enterprises Pte Ltd. (SSOE) Joint ventures :: Birla Sun Life Insurance Company :: Birla Sun Life Asset Management Company :: Birla Sun Life Distribution Company Limited :: Tanfac Industries Limited PRODUCTS COMPANY: HINDALCO :: Everlast aluminium roofing sheets :: Freshwrapp aluminium foil :: Freshpakk semi-rigid containers :: Permashield waterproofing :: Aluminium foil :: Aura alloy wheels :: Hindalco extrusions COMPANY: HINDALCO :: Birla Copper :: Birla Gold :: Birla Silver . Europe and Asia :: Novelis Inc.Laos :: Birla Laos Pulp & Plantations Company Limited North and South America.

COMPANY: GRASIM :: Birla Super :: UltraTech Cement (formerly Birla Plus) :: Birla White COMPANY: ULTRATECH :: UltraTech cement :: UltraTech Concrete COMPANY: GRASIM :: Birla Cellulose COMPANY: INDO GULF :: Birla Shaktiman Urea COMPANY: HINDALCO :: Birla Balwan COMPANY: ADITYA BIRLA NUVO :: Linen Club :: Pyroguard :: Ray One :: Kolorone COMPANY: GRASIM :: Ice Touch :: Uncrushables :: Purista .

:: Clean Fab COMPANY: THAI ACRYLIC FIBRE :: Texlan CHAPTER– V RESEARCH METHODOLOGY .

2.NEED FOR THE STUDY: The main motto behind starting of any business is to gain profits. Research Methodology Research design Analytical tools Analytical Ratio analysis. 4. Analyzing profit & loss account for the next four years with the help of last five years data available. Objectives of the study     To study to study the existing financial of the company. now the company management wants to assess the financial position of the company. annual reports Period of study 2005-06 to 2008-09 Source of data 1. 3. P&L accounts. . Five year annual report of Aditya Birla Group from 2005-2009 comprising of balance sheets. operating cycle analysis. We can say the company is running in healthy position by observing its past and present financial position. The Company started in the year 1984. Interaction with the related finance departments. To analyze future financial position of the company To analyze the financial performance of the company with reference to the cash flows. The data required for the study is mainly based on secondary data. Data Sources Secondary data has been collected from Company records. To study the operating cycle analysis of the company. Aditya Birla Group. Past five year’s profit & loss account. Hence the present study has been under taken with the help of Ratio Analysis. schedule of change in Working capital.

some selected ratios like liquidity ratios. activity ratios.5. activity ratios. . To carry out the present study. Objectives of the study Keeping in view of above-mentioned facts. a period of five years is taken from 2005 to 2009 in the context. The related data is obtained from the printed and published journals and financial statement of the corporation. leverage ratios. starting from 2005-2009 Scope of the study The scope of the study is confined to the following aspects. Operating cycle analysis and profitability ratios are examined to test the financial position of the company. Period of study: Data for a period of 5 years has been taken for the study i. leverage ratios and profitability ratios are examined to test the financial position of the company. Tools for data analysis: Some selected ratios like liquidity ratios. the following are the objectives of the study.e.

CHAPTER– VI CONCEPTUAL FRAMEWORK .

The notes will typically describe each item on the Balance sheet.Financial statements: (Or financial reports) are formal records of a business' financial activities. liabilities and net equity as of a given point in time. Because these statements are often complex. also known as the "top line") is transformed into net income (the result after all revenues and expenses have been accounted for. 4. also known as the "bottom line"). 2. . Also called Profit and Loss Statement (P&L) outside the USA or Statement of Activities and Changes in Net Assets in reference to charitable organizations. Income statement and Cash flow statement in further details. particularly its operating. Notes to Financial Statements are considered an integral part of the Financial Statements. Income Statement . reports on a company's assets. There are four basic financial statements: 1. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported. an extensive set of Notes to the Financial Statements and management discussion and analysis is usually included. Balance Sheet – Is also referred to as statement of financial condition. 3. Income statements is a financial statement for companies that indicate how net revenue (money received from the sale of products and services before expenses are taken out. Statement of Retained Earnings – It explains the changes in a company's retained earnings over the reporting period. Cash Flow Statement – reports on a company's cash flow activities. reports on a company's results of operations over a period of time. These statements provide an overview of a business' profitability and financial condition in both short and long term.Is also referred to as Profit or loss statement. investing and financing activities.

g. but more and more companies choose multiple-step statements. brand recognition and loyalty)  some numbers depend on accounting methods used (e. just two groups exist: revenues and expenses. using FIFO or LIFO accounting to measure inventory level)  Some numbers depend on judgments and estimates (e. The basic format is shown below. Expenses are deducted from revenues to get net income (single step).g.g. However.Usefulness and limitations of income statement Income statements should help investors and creditors determine the past performance of the enterprise. Single-step income statement In the single-step statement. information in an income statement has several limitations:  items that might be relevant but cannot be reliably measured are not reported (e. Example: Revenue Net sales ____________________ Rent revenue _________________ Interest revenue _____________ Total revenue ______________ Expenses (usually sorted by amount) Cost of goods sold ___________ . predict future performance. depreciation expense depends on estimated useful life and salvage value). Its main advantage is simplicity. and assess the risk of achieving future cash flows.

or other activities that constitute the entity's ongoing major or central operations. stationery. legal and professional fees. o o Cost of goods sold . and allowances.represent expenses to manage the business (officer salaries. supplies) . rendering services. depreciation of office building and equipment. rendering services. returns.Selling expenses _____________ Administrative expenses ______ Interest expense _____________ Total expenses _____________ Income before taxes ____________ Income taxes ___________________ Net income _____________________ Earnings per share _____________ Items on income statement Operating section  Net Revenue – Inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing goods. utilities.represents the amount a product costs to produce General and administrative expenses (G & A) . insurance. Usually presented as sales minus sales discounts. or carrying out other activities that constitute the entity's ongoing major or central operations.  Expenses – Outflows or other using-up of assets or incurrence of liabilities during a period from delivering or producing goods.

represent expenses needed to sell products (e. depreciation of sales equipment) o o R & D expenses .g. shipping. rent. for example.irregular items most likely won't happen next year. expropriation. Irregular items They are reported separately because this way users can better predict future cash flows . but not both (e.  Discontinued operations is the most common type of irregular items.g. freight. sale of securities or fixed assets).  Other expenses or losses – expenses or losses not related to primary business operations. unexpected nature disaster. It also includes unusual gains and losses that are either unusual or infrequent.  Extraordinary items are both unusual (abnormal) and infrequent.represent expenses included in research and development Depreciation .. advertising. patents). Note: natural disaster . sales salaries and commissions. Shifting business location.o Selling expenses . These are reported net of taxes. or changes due to technological improvement do not qualify as discontinued operations. stopping production temporarily. prohibitions under new regulations.represents costs associated with depreciated assets Non-operating section  Other revenues or gains – revenues and gains from other than primary business activities (e.g.

Diluted EPS is considered to be a more accurate way to measure EPS. Earnings per share Because of its importance. changing method of computing depreciation from straight-line to sum-of-the-years'-digits. Below is an alternative definition which carries a direct relationship to terminology commonly used in financial analysis. earnings per share (EPS) are required to be disclosed on the face of the income statement. There are two forms of EPS reported:  Basic: in this case "weighted average of shares outstanding" includes only actual stocks outstanding. changes in estimates (e. A company which reports any of the irregular items must also report EPS for these items either in the statement or in the notes. and other securities that could be transformed into shares are transformed. Changes in accounting principle is.  Diluted: in this case "weighted average of shares outstanding" is calculated as if all stock options. Alternative setup of multiple-step income statement Setups of income statements come in many shapes and forms. estimated useful life of a fixed asset) do not qualify.might not qualify depending on location (e.g. convertible bonds. frost damage would not qualify in Canada but would in the tropics).g. This way number of shares increases and EPS decreases. On the right hand side of the table several alternative suggestions for . for example. However.

having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well.Taxes ------------------------------------------------------------------------------------------------E Earnings Net income Profitability Ratio A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.economics and accounting is by no means a discipline with a single standard definition of terms used. part of the skill in understanding income statements and balance sheets is to see through the words Income statement item Revenues -CoGS Acronym spelled out Alternative terminology Sales. Gross profit. Hence.terminology are listed . Earnings before I+T+D+A Gross margin. .Depreciation . Financial income. operating Financial expense ----------------------------------------------------------------------------------------------EBT Earnings before Taxes Pretax net income . Turnover Cost of Goods Sold Cost of sales -----------------------------------------------------------------------------------------------EBITDA margin . For most of these ratios.Amortization ---------------------------------------------------------------------------------------------EBIT Earnings before I+T Financial items. Income.

It is important to note that a little t of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios.Some examples of profitability ratios are profit margin. giving it a profit margin of 10% ($10 million/$100 million). . Therefore. a 20% profit margin. return on assets and return on equity. some industries experience seasonality in their operations. Profit Margin A ratio of profitability calculated as net income divided by revenues. Profit margin is displayed as a percentage. or net profits divided by sales. For instances. . it would not be too useful to compare a retailer's 4th quarter profit margin with its 1st quarter profit margin. Imagine a company has a net income of $10 million from sales of $100 million. This is an indication that costs need to be under better control. typically experiences higher revenues and earnings for the Christmas season.20 for each dollar of sales. So while the company increased its net income. comparing a retailer's 4th quarter profit margin with the profit margin from the same period a year before would be far more informative. Increased earnings are good. its profit margin would fall to 7. It measures how much out of every dollar of sales a company actually keeps in earnings. On the other hand. but an increase does not mean that the profit margin of a company is improving. if a company has costs that have increased at a greater rate than sales. Profit margin is very useful when comparing companies in similar industries. For instance. it leads to a lower profit margin. for example. The retail industry.5%. for example. If in the next year net income rose to $15 million on sales of $200 million.Looking at the earnings of a company often doesn't tell the entire story. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. means the company has a net income of $0. it has done so with diminishing profit margins.

factory expenses ratio is the ratio of factory . Earnings before interest and tax Net sales EXPENSES RATIO: Expenses Ratios are the ratios that supplement the information given by the operating ratio. it indicates to us the profitability of the core activity of the business. Net profit after tax Net sales Net Profit Margin: The net profit margin. Thus a trading profit margin of 10% means that every 1. high margin industries may be low volume. In other words. sometimes known as the trading profit margin measures trading profit relative to sales revenue.10 (10p) in profit before interest and taxes. For example. The higher the ratio. Higher than average net profit margins for the industry may be an indicator or good management. Gross profit Net sales Net profit ratio: It indicates the result of overall operations of the firm. It reveals the result of trading operations of business. which are compensated for by high volumes. Each of the expenses ratios highlights the relationship between the particular expenses and net sales.Gross profit ratio: Gross Profit ratio is one of the most commonly used ratios. the more profitable is the business. Some industries tend to have relatively low margins. Conversely.00 of sales revenue generates .

it measures the excess or shortfall of cash flows. once financing charges are met. Used for capital budgeting. Operating expenses ratio: Administrative expenses + Selling expenses Net sales Administrative expenses ratio Administrative expenses Net sales Selling expenses ratio: Selling expenses Net sales Operating ratio: Cost of goods sold + operating expenses Net sales Net present value Net present value (NPV) is a standard method for the financial appraisal of long-term projects. By definition. All such ratios fall under the broad head of Expenses ratio.expenses to net sales. and widely throughout economics. Formula NPV = PVCI-PVCO . in present value (PV) terms. Any expenditure can be shown as a ratio to sales.

The rate used to discount future cash flows to their present values is a key input of this process. This is appropriate in the absence of capital rationing. their investment funds are committed to target a specified rate of return. A good practice of choosing the discount rate is to decide the rate which the capital needed for the project could return if invested in an alternative venture. that rate of return should be selected as the discount rate for the NPV calculation. Most firms have a well defined policy regarding their capital structure. higher discount rates can be used for more risky projects. Another method is to apply higher discount rates to cash flows occurring further along the time span. So the weighted average cost of capital (after tax) is appropriate for use with all projects. which tends to exaggerate the calculated values. Reinvestment rate There are assumptions made about what rate of return is realized on cash that is freed-up before the end of the project. In the NPV model it is assumed to be reinvested at the discount rate used.The discount rate Choosing an appropriate discount rate is crucial to the NPV calculation. to reflect the yield curve premium for long-term debt. In this way. Refer to the tutorial article written by Samuel Baker for more detailed relationship between the NPV value and the discount rate. a direct comparison can be made between the profitability of the project and the desired rate of return. In the IRR model. use this discount rate in the NPV calculation to allow a direct comparison to be made between Project A and the alternative. Alternately. If. In such cases. no assumption is made about the reinvestment rate of free cash. NPV value obtained using variable discount rates with the years of the investment duration is more reflecting to the real situation than that calculated from a constant discount rate for the entire investment duration. For some professional investors. Some people believe that if the firm's reinvestment rate . the capital required for Project A can earn five percent elsewhere. Obviously. for example.

comparison with other available investments. NPV >0 would add value to the project should be accepted the firm the investment NPV <0 would subtract value the project should be rejected from the firm . the investment Then. if there is a choice between two mutually exclusive alternatives. the one yielding the higher NPV should be selected.. it becomes. It means. if Ct is a positive value. an opportunity cost and should be used as the discount rate.. If. If Ct is a negative value... In financial theory. in effect. Appropriately risked projects with a positive NPV should be accepted.e.. This does not necessarily mean that they should be undertaken since NPV at the cost of capital may not account for opportunity cost.is higher than the Weighted Average Cost of Capital.. What NPV tells With a particular project. the project is in the status of cash inflow in the time of t. i. The following sums up the NPV's various situations. the project is in the status of cash outflow in the time of t.

Decision should be based on other criteria. then the firm may be indifferent. the decision rule is to Accept the proposal if its PI is more than 1 and to reject the same if the PI is less than 1. This approach is very helpful when one is faced with a choice involving several alternative investments of different size. strategic positioning or other factors not explicitly included in the calculation. the profitable index expresses the cost or benefit relationship between initial cash outlay and the NPV of the proposal. e. FORMULA: PVCI / PVCO THE DECISION RULE: Under the profitability index method.g. It measures the return on a project with regard to the investment required for the project . NPV would neither gain =0 nor lose value for the firm PROFITABILITY INDEX: The profitability Index is a variant of the NPV method. This project adds no monetary value. While NPV states whether a proposal is viable. ACCOUNTING RATE OF RETURN: The ARR is based on the concept of rate of return. The return is measured in terms of .the investment the project could be accepted because shareholders obtain required rate of return. If the PI is equal to 1.

FORMULA: Average annual profit after tax x 100 Average investment THE DECISION RULE: The ARR is compared with a pre-specified rate of return. . The investment considered for calculation of this ratio is the average amount blocked in the project. If the ARR is greater than the pre-specified rate of return. If the ARR is less than the pre-specified rate. then the project is rejected.the average profit earned by the project over the duration of the project. then the project is accepted.

CHAPTER– VII DATA ANALYSIS & INTERPRETATION .

63 18.95 7.01 0 31.3 56.53 119.71 0 189.88 15.71 96.25 278.93 103.59 3 303.78 3.09 89.25 443.28 0 324.87 443.55 309.36 6.58 107.42 227.07 81.09 309.38 17.25 135. Loans & Advances Less: Current Liabilities & Provisions Total Net Current Assets Miscellaneous Expenses not written off TOTAL 164.28 19.33 2008/09 2007/08 2006/07 2005/06 2005/05 PROFIT AND LOSS ACCOUNT OF ADITYA BIRLA GROUOP FOR THE PERIOD OF 2005 TO 2009 Profit and Loss .34 407.23 144.09 74.45 0.01 271.64 45.28 129 0 296.25 47.1 0 207.98 3 142.93 83.04 469.01 170.BALANCE SHEET OF ADITYA BIRLA GROUP FOR THE PERIOD OF 2005 TO 2009 Balance Sheet Rs. Cr Period & months SOURCES OF FUNDS Owned Funds Equity Share Capital Share Application Money Preferential Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans TOTAL USES OF FUNDS Fixed Assets Gross Block Accumulated Depreciation Less: Revaluation Reserve Net Block Capital Work-in-progress Investments Net Current Assets Current Assets.25 15.53 92.62 27.45 278.4 11.25 136.63 55 407.31 112.01 0 16 146.32 3 349.6 28.51 0 0 226.61 0.28 0.9 41.01 0 0 111.29 51.13 13.01 425.57 15.61 0.29 227.58 0.04 17.2 38.43 3.9 47.68 0 236.01 0 16 126.19 56.67 88.25 15.

00 -3.9 10.95 9.6 44.31 14.12 32.43 20.45 -87.83 12.73 12.33 50.61 16.72 20.36 103.69 -25.54 33.7 0.09 0.45 0.18 43.61 62.2 19.00 22.27 19.20 216.00 38.90 43.75 100.46 177.74 0 0 3.59 13.04 33.16 24.53 52.21 5.57 -0.4 2007/08 191.S.24 0.81 70.35 25.42 2005/06 140.00 28.90 -0.74 3.39 135.04 5.02 7.62 15.75 10.73 33.85 75.16 -3.94 17.02 0 0 11.74 0.88 61.92 -3.57 4.69 61.41 14.08 53.80 -0.86 72.82 55.84 0.24 23.32 43.53 76.16 33.99 10.25 9.44 0.86 34.27 29.50 19.27 5.53 17. cr Period & months INCOME Net Operating Income EXPENSES Material Consumption Manufacturing Expenses Personal Expenses Selling Expenses Administrative Expenses Capitalized Expenses Cost of Sales Reported PBDIT Other Recurring Income Adjusted PBDIT Depreciation Other Write-offs Adjusted PBIT Financial Expenses Adjusted PBT Tax Charges Adjusted PAT Non-recurring Items Other Non-cash Adjustments REPORTED PAT PAT % COGS TO SALES % sum of per&admin&selling expense P.44 -0.36 46.16 6.78 -35.58 0.37 3.23 28.58 0 129.05 8.A.Exp to SALES INTEREST TO SALES % NO.00 0.02 157.43 14.OF EQUITY SHARES EPS NET WORTH BOOK VALUE PER SHARE P/E RATIO DIFF BET RESERVES OF PR YRS DIVIDEND PAID DPS DPR RETENTION RATIO 2008/09 235.63 -0.26 31.65 14.04 18.08 41.39 28.91 45.96 -4.93 4.56 0.32 187.12 2006/07 167.73 121.58 49.54 5.35 24.71 -21.04 10.25 35.08 22.45 19.55 5.24 2.48 5.47 18.00 .63 67.11 1.17 16.81 5.79 16.7 11.33 244.Rs.56 0.01 13.06 0 101.7 27.17 2005/05 113.33 7.26 38.39 39.78 36.12 2.99 12.78 7.23 51.6 29.12 0 23.46 13.28 11.84 40.43 14.04 8.45 0 -0.25 0 117.54 17.25 3.06 0.23 23.20 12.29 71.02 16.43 9.1 11.00 33.5 0 159.91 0.84 8.09 42.47 67.8 7.69 126.75 7 0 81.

91 1.23 67.thus the annual cost of sales in every was also decreasing.Table 2 Showing growth rate of cost of goods sold for the period 2005-2009 YEAR COGS TO SALES 2005 2006 2007 2008 2009 GROWTH% 71.38 0.45 72.10 -2.78 -3.24 70.86 67.25 COGS TO SALES 73 72 71 GROWTH 70 69 68 67 66 65 2005 2006 2007 YEAR 2008 2009 Chart 2 Showing growth rates of COGS for the period 2005-09 In the year 2005-09 the cost of goods sold declined for three years 2005-2006 and increased only in 2007. .07 AVERAGE -1.

31 GROWTH % AVERAGE Cha rt 1 Sho win g gro wth rate of profit after tax for the period 2005-09 PROFIT AFTER TAX 16 14 12 GROWTH 10 8 6 4 2 0 2005 2006 2007 YEAR 2008 2009 In the year 2005 the profit after tax was very high then in year 2005 it declined to a large extent.29 7.27 49.86 9. in 2007 in declined to negative.23 12. then in year 2006 it increased.65 24.83 45.81 14. .63 138.Table 1 Showing growth rate of PAT for the period 2005-2009 YEAR 2005 2005 2005 2006 2007 PAT% 3. Thus there was increase in pat% every year.04 -11.

78 2009 45.53 2006 23.89 2007 28. But annual personal administration and selling exp increased in every year.5 32 23.61 20.64 Chart 3 Showing growth rate of Sum of PER.Table3 Showing growth rate of Sum of PER.47 20.88 2008 34.54 20. administration and selling exp was almost common for three years 2005-2006 and increased only in 2007 by 12%.ADMIN & SELLING EXP 50 40 GROWTH 30 20 10 0 2005 2006 2007 YEAR 2008 2009 In the year 2005-09 the Sum of personal. ADMIN & SELLING EXP for the period 2005-09 SUM OF PER.ADMINI&SELLING YEAR EXP GROWTH% AVERAGE 2005 19. ADMIN & SELLING EXP for the period 2005-09 SUM OF PER. .

S.5 18 17.05 18.84 17.33 -2.S.SELLING & ADMIN EXP 20 19.5 17 16.5 16 15.5 2005 2006 2007 YEAR 2008 2009 The personal selling and administration exp to sales was negative in the first year 2005 then there after there is continuous increase in personal administration and selling exp on sales.02 Chart 4 Showing growth rate of P.5 19 18.08 1.21 5.A EXP for the period 2005-09 PER.2 16.S.A EXP for the period 2005-09 YEAR P.A. GROWTH .17 3.EXP TO SALES 2005 2006 2007 2008 2009 GROWTH% AVERAGE 17.8 7.04 19.Table 4 Showing growth rate of P.

55 -35.44 2.05 -11.48 8.58 -3.15 -8.27 8.02 Chart 5 Showing growth rate of interest to sales% for the period 2005-09 INTEREST TO SALES % 14 12 GROWTH 10 8 6 4 2 0 2005 2006 2007 YEAR 2008 2009 From the chart 5.Table 5 Showing growth rate of interest to sales% for the period 2005-09 YEAR INTEREST TO SALES% 2005 2006 2007 2008 2009 GROWTH% AVERAGE 12. .81 8. it can be seen that during the period 2005-09 there is gradual negativity in the growth rate of interest to sales%.21 7. but 2005-2006 there is increasing in the growth rate of interest to sales%.

84 0 0 0 16.4 5.66 4.OF EQUITY SHARES 6 5.2 5 4.6 GROWTH 5.Of Equity Shares of the company.8 4. .6 4. it can be seen that during the period 2005-2006 there is no increasing in the growth rate of No .Table 6 Showing growth rate of NO.16 Chart 6 Showing growth rates of NO.OF EQUITY SHARES for the period 2005-09 YEAR NO.8 5.4 2005 2006 2007 YEAR 2008 2009 From the chart 6.OF EQUITY SHARES for the period 2005-09 NO. but 20062007 it has increased with nearly 17% growth rate.OF EQUITY SHARES 2005 2006 2007 2008 2009 GROWTH% AVERAGE 5 5 5 5 5.

47 19.58 15.46 38.44 14.69 28.2 40.33 23.66 GROWTH% AVERAGE Chart 7 Showing growth rate of EARNING PER SHARE for the period 200509 EARNINGS PER SHARE 45 40 35 30 25 20 15 10 5 0 2005 2006 2007 YEAR 2008 2009 From the chart 7. it can be seen that during the period 2005-09 there is gradual decreasing in the growth rate of earning per share of the company.02 33.16 5.eventhough there is an increase in the earning per share of the company.Table 7 Showing growth rate of EARNING PER SHARE for the period 200509 YEAR 2005 2006 2007 2008 2009 EARNING PER SHARE 22. GROWTH .

08 24.9 244.37 12.25 216. . 2007 it has decreased nearly half of its previous year.Table 8 Showing growth rate of NET WORTH for the period 2005-09 YEAR 2005 2006 2007 2008 2009 NET WORTH 126.71 22.35 157.53 18.02 GROWTH% AVERAGE Chart 8 Showing growth rate of NET WORTH for the period 2005-09 NETWORTH 300 250 GROWTH 200 150 100 50 0 2005 2006 2007 YEAR 2008 2009 From the chart 8.46 12.26 177. it can be seen that during the period 2005-09 there is gradual increase and decrease in the growth rate of NET WORTH of the company .2005.

46 12.54 AVERAGE 14 Chart 9 Showing growth rate of BOOK VALUE PER SHARE for the period 2005-09 BOOK VALUE PER SHARE 50 40 GROWTH 30 20 10 0 2005 2006 2007 YEAR 2008 2009 In the year 2005 the book value per share increasing every year and then in the year 2005 percentage of growth rate is declined double and then year 2006 there increase in double percentage of growth and sudden fall of growth percentage in the year 2007 even though there is continuously increase in book value of share of the company.43 35.71 22.43 43.35 41.25 31.82 GROWTH% 24.Table 9 Showing growth rate of BOOK VALUE PER SHARE for the period 2005-09 YEAR BOOK VALUE PER SHARE 2005 2006 2007 2008 2009 25. .37 -3.

92 20 24.69 34.05 23.Table 10 Showing growth rate of diff b/w reserves of pr ysr for the period 2005-09 YEAR 2005 2006 2007 2008 2009 14.63 55.15 126. .1 DIFF B/W RESERVES OF PR YSR GROWTH% AVERAGE Chart 10 Showing growth rates of diff b/w reserves of pr yrs for the period 2005-09 DIFFERENCE OF RESERES 60 50 GROWTH 40 30 20 10 0 2005 2006 YEAR 2007 2008 In the year 2005 the difference between reserves of pr ysr is increasing every year and then in the year 2006 percentage of growth rate is decreased and sudden rise of growth percentage in year 2007.11 61.

74 -3.46 -77.Table 11 Showing growth rate of DIVIDEND PAID for the period 2005-09 YEAR 2005 2006 2007 2008 2009 DIVIDEND PAID 3.9 -3. .96 GROWTH% AVERAGE -204.57 -0.59 3145 713.8 -25.28 -8. at the same time there is continuously increase in fall of growth percentage.67 Chart 11 Showing growth rate of DIVIDEND PAID for the period 2005-09 DIVIDENDS PAID 10 5 0 GROWTH -5 -10 -15 -20 -25 -30 2005 2006 2007 2008 2009 YEAR In the year 2005 the dividend paid is decrease and there is also decrease in growth percentage and every year there is fall of dividend paid.

at the same time there is continuously increase in fall of growth percentage .16 -4.84 GROWTH% AVERAGE Chart 12 Showing growth rate of Dividend per share for the period 2005-09 DIVIDEND PER SHARE 2 1 0 GROWTH -1 -2 -3 -4 -5 2005 2006 2007 2008 2009 YEAR In the year 2005 the dividend per share is decrease and there is also decrease in growth percentage and every year there is fall of dividend per share.46 -77.78 -0.45 -204.71 -0.28 -8.75 -0.69 597.59 2681.Table 12 Showing growth rate of Dividend per share for the period 2005-09 YEAR 2005 2006 2007 2008 2009 DPS 0.

36 -87.55 2501.39 -38.39 -21.32 GROWTH% AVERAGE -135.73 -3.Table 13 Showing growth rate of DPS for the period 2005-09 YEAR 2005 2006 2007 2008 2009 DPR 100 -35.62 Chart 13 Showing growth rates of DPS for the period 2005-09 DIVIDEND PAYOUT RATIO 150 100 GROWTH 50 0 2005 -50 -100 YEAR 2006 2007 2008 2009 In the year 2005 the dividend per rate is decrease and there is also decrease in growth percentage but from 2005 to 2007 there is recover in growth percentage and finally there is lot of increase in growth percentage of dividend per rate in year 2007.02 560. .6 -84.

39 121. .68 GROWTH% AVERAGE Chart 14 showing growth rate of RENT RATIO for the period 2005-09 RETENTION RATIO 200 150 GROWTH 100 50 0 2005 2006 2007 YEAR 2008 2009 In the year 2005 the rent ratio is 135. but in the year 2007 there is lot of increase in rent ratio along with growth percentage.32 #DIV/0! -10.Table 14 showing growth rate of RENT RATIO for the period 2005-09 YEAR 2005 2006 2007 2008 2009 RENT RATIO 0 135.09 -15.09 81.36 187.39 and in the year 2005 to 2006 there is decrease in rent ration along with growth percentage.73 103.23 18.

This mean there may be a gradual increase in the operating expenses.16 23.42 191. .06 AVERAGE Chart 1 Showing growth rate of net operating income for the period 2005-09 NET OPERATING INCOME 25 20 GROWTH 15 10 5 0 2005 2006 2007 YEAR 2008 2009 From the chart 1.47 19.17 20.Table 1 Showing growth rate of net operating income for the period 2005-09 YEAR 2005 2006 2007 2008 2009 NET OPERATING INCOME 113.12 235. Even though there is an increase in the net operating income.44 14.4 GROWTH% 0 23. it can be seen that during the period 2005-07 there is a decrease in the operating profit for first three years and suddenly growth rate increases in 2007. the growth rate is decreasing.53 140.17 167.

also it can be seen that from the period 2005-2005 the growth rate increased slightly and from the period 2005-2006 the growth rate plunged to negativity.23 52.Table 2 Showing growth rate of material consumption for the period 2005-09 YEAR 2005 2006 2007 2008 2009 METERIAL CONSUMPTION 28.83 37.28 AVERAGE Chart 2 Showing growth rate of material consumption for the period 2005-09 MATERIAL CONSUMPTION 40 30 GROWTH 20 10 0 2005 -10 YEAR 2006 2007 2008 2009 From chart 2 it can be seen that during the period from 2005-09 there is gradual increase in the rate of material consumption but growth rate of the company declined in the year 2006. Table 3 Showing growth rates of manufacturing expenses for the period 200509 .21 22.17 -6.09 43.32 18.04 33.88 GROWTH% 0 19. In the same process there are up’s and down’s in the material consumption also.6 46.

05 18.57 44.YEAR 2005 2006 2007 2008 2009 MANUFACTURING EXPENSES 33. .46 GROWTH% 0 31.99 Chart 3 Showing growth rates of manufacturing expenses for the period 200509 MANUFACTURING EXPENSES 35 30 25 GROWTH 20 15 10 5 0 -5 2005 2006 2007 YEAR 2008 2009 From chart 3 it can be seen that during the period from 2005-09 the growth rate of manufacturing expenses have slightly increased.48 21.99 61.19 -2. but from the period 2005-2006 has plunged to negativity and then after from the period 2005-2007 the growth rate has slightly increased and decreased.22 AVERAGE 16.04 42.95 51.

78 5.72 GROWTH% 0 21.8 9.99 13.9 Chart 4 showing growth rates of personnel expenses for the period 2005-09 PERSONAL EXPENSES 60 50 GROWTH 40 30 20 10 0 2005 2006 2007 YEAR 2008 2009 From chart 4 it can be seen that during the period 2005-09 there has been gradual increase and decrease in the growth rate of personal expenses of the company.04 10.84 AVERAGE 30. Even though there is an increase in the personnel expenses of the company.34 55.57 24.86 21.Table 4 showing growth rate of personnel expenses for the period 2005-09 YEAR 2005 2006 2007 2008 2009 PERSONAL EXPENSES 4. .

75 10.Table 5 Showing growth rate of selling expenses for the period 2005-09 YEAR 2005 2006 2007 2008 2009 SELLING EXPENSES 7.9 20. Even though there is an increase in the selling expenses of the company.26 25.83 AVERAGE Chart 5 Showing growth rate of selling expenses for the period 2005-09 SELLING EXPENSES 70 60 GROWTH 50 40 30 20 10 0 2005 2006 2007 YEAR 2008 2009 From chart 5 it can be seen that during the period 2005-09 there has been gradual increase and decrease in the growth rate of selling expenses of the company.85 57. .75 7.28 GROWTH% 0 0 32.25 12.21 28.

. and from the period 2006-2007 there has decrease in the growth rate of the company.Table 6 Showing growth rate of administrative expenses for the period 200509 YEAR 2005 2006 2007 2008 2009 ADMINISTRATIVE EXPENSES 7 10.68 AVERAGE Chart 6 Showing growth rates of administrative expenses for the period 200509 ADMINISTRATIVE EXPENSES 50 40 30 GROWTH 20 10 0 -10 -20 YEAR 2005 2006 2007 2008 2009 From chart 6 it can be seen that during the period 2005-2005 the growth rate of administrative expenses have slightly increased.7 14.5 GROWTH% 0 43.58 11. and from the period 2005-2006 there has been slightly increased.06 9.71 -8.05 14.38 8. and from the period 2005-2005 the growth rate plunged to negativity.25 10.

12 10. . and from the period 2006-2007 the growth rate has slightly increased.26 18.83 16.26 117.58 129.12 101.3 23.Table 7 Showing growth rate of cost of sales for the period 2005-09 YEAR 2005 2006 2007 2008 2009 COST OF SALES 81.69 159.62 AVERAGE Chart 7 Showing growth rate of cost of sales for the period 2005-09 COST OF SALES 30 25 GROWTH 20 15 10 5 0 2005 2006 2007 YEAR 2008 2009 From chart 7 it can be seen that during the period 2005-2006 there has been a gradual decrease in the growth rate of cost of sales of the company. Even though there is an increase in the cost of sales of the company.85 GROWTH% 0 24.

44 75.91 49.27 22.41 38.Table 8 Showing growth rate of reported PBDIT for the period 2005-09 YEAR 2005 2006 2007 2008 2009 REPORTED PBDIT 32.6 AVERAGE Chart 8 Showing growth rate of reported PBDIT for the period 2005-09 REPORTED PBDIT 30 25 GROWTH 20 15 10 5 0 2005 2006 2007 YEAR 2008 2009 From chart 8 it can be seen that during the period 2005-09 there has been gradual decrease in the growth rate of reported PBDIT of the company.09 23.98 23. but from the period 2005-2005 the growth rate has slightly increased.06 28. Even though there is an increase in the reported PBDIT of the company.84 61.56 GROWTH% 0 20. .

.54 0.33 0.39 0.24 AVERAGE Chart 9 Showing growth rate of other recurring income for the period 200509 OTHER RECORING INCOME 100 50 GROWTH 0 2005 -50 -100 -150 YEAR 2006 2007 2008 2009 From chart 9 it can be seen that during the period 2005-09 there has been a gradual increase in the growth rate of other recurring income of the company.11 -10.32 -15.61 0.53 GROWTH% 0 -97.Table 9 Showing growth rate of other recurring income for the period 2005-09 YEAR 2005 2006 2007 2008 2009 OTHER RECORING INCOME 14.85 -13.38 84.

04 76. .17 62.25 AVERAGE Chart 10 Showing growth rate of adjusted PBDIT for the period 2005-09 ADJUSTED PBDIT 30 25 GROWTH 20 15 10 5 0 2005 2006 2007 YEAR 2008 2009 From chart 10 it can be seen that during the period 2005-2005 there has been increase in the growth rate of adjusted PBDIT.01 39.09 27.66 22.08 GROWTH% 0 19. Even though there is an increase in the adjusted PBDIT of the company. from the period 2005-2005 there is slightly increase in the growth rate and from the period 2005-2007 there has been a gradual decrease in the growth rate of adjusted PBDIT of the company.63 23.Table 10 Showing growth rate of adjusted PBDIT for the period 2005-09 YEAR 2005 2006 2007 2008 2009 ADJUSTED PBDIT 33.63 23.31 50.

. Even though there is an increase in the depreciation of the company.74 10.Table 11 Showing growth rate of depreciation for the period 2005-09 YEAR 2005 2006 2007 2008 2009 DEPRECIATION 13.02 AVERAGE Chart 11 Showing growth rate of depreciation for the period 2005-09 DEPRECIATION 25 20 GROWTH 15 10 5 0 2005 2006 2007 YEAR 2008 2009 From chart 11 it cab be seen that during the period 2005-09 there has been gradual decrease and increase in the growth rate of depreciation of the company.06 GROWTH% 0 10.24 22.45 16.09 14.94 14.58 18.01 20.39 14.

27 0.Table 12 Showing growth rate of other write-offs for the period 20052007 YEAR 2005 2006 2007 2008 2009 OTHER WRITE-OFFS 0. in the period 2006 the growth rate of other write-offs has slightly increased. and in the period 2007 the growth rate plunged to negativity.74 0 12. .18 0.08 GROWTH% 0 -40.95 AVERAGE Chart 12 Showing growth rates of other write-offs for the period 2005-09 OTHER WRITE OFFs 20 10 0 GROWTH -10 -20 -30 -40 -50 -60 2005 2006 2007 2008 2009 YEAR From chart 12 it can be seen that during the period 2005-2005 the growth rate of other write-offs is negative and is below zero.5 -55.56 -20.16 0.16 0.

Even though there is an increase in the adjusted PAT of the company.07 24.7 29.27 44.56 GROWTH% 0 194.65 49.02 16.Table 13 Showing growth rate of adjusted PAT for the period 2005-09 YEAR 2005 2006 2007 2008 2009 ADJUSTED PAT 3.45 23.73 78.74 11. .18 AVERAGE Chart 13 Showing growth rate of adjusted PAT for the period 2005-09 ADJUSTED PAT 250 200 GROWTH 150 100 50 0 2005 2006 2007 YEAR 2008 2009 From chart 13 it can be seen that during the period 2005-2005 the growth rate of adjusted PAT has slightly increased and during the period 2005-2007 the growth rate of adjusted PAT has gradually decreased.

02 16.Table 14 Showing growth rate of reported PAT for the period 2005-09 YEAR 2005 2006 2007 2008 2009 REPORTED PAT 3.74 11.73 GROWTH% 0 194.43 23.39 AVERAGE Chart 14 Showing growth rate of reported PAT for the period 2005-09 REPORTED PAT 250 200 GROWTH 150 100 50 0 2005 2006 2007 YEAR 2008 2009 From chart 14 it can be seen that during the period 2005-2006 the growth rate of reported PAT has slightly increased and during the period 2005-2007 the growth rate of reported PAT has gradually decreased.65 49.09 45. .76 78.04 24.83 29. Even though there is an increase in the reported PAT of the company.

67 25 AVERAGE Chart 15 Showing growth rate of equity divided for the period 2005-09 EUITY DIVIDENDS 60 50 GROWTH 40 30 20 10 0 2005 2006 2007 YEAR 2008 2009 From chart 15 it can be seen that during the period 2005-2006 the growth rate of equity dividend has zero value.5 2.Table 15 Showing growth rate of equity divided for the period 2005-09 YEAR 2005 2006 2007 2008 2009 EQUITY DIVIDEND 1.5 GROWTH% 0 0 50 33. .Eventhough there is an increase in Equity Dividend. during the period 2005-2009 the growth rate of equity dividend has slightly increased and during the period 2005-2007 the growth rate of equity dividend has gradually decreased.5 1.25 3 3.33 16.

FORECASTED PROFIT&LOSS ACCOUNT FOR THE NEXT FOUR YEARS 2008-2011 .84 32.25 170.39 29.25 146.75 301.59 19.88 226.03 94.Table 16 Showing growth rate of Retained Earnings for the period 2005-09 Reported PAT YEAR 2005 2006 2007 2008 2009 RETAINED EARNINGS 78.67 Chart 16 Showing growth rates of Retained Earnings for the period 2005-09 RETAINED EARNINGS 35 30 GROWTH 25 20 15 10 5 0 2005 2006 2007 YEAR 2008 2009 From chart 16 it can be seen that during the period 2005-09 growth rate of retained earnings have increased continuously. from 2005-06 there is normal increase in growth % but in the last year in has increased almost double.4 15.03 GROWTH% 111.73 53.33 126.6 AVERAGE 168.57 0 13.84 16. Thus it shows that the earning potential of company has increased a lot in the last year.

06 52.44 32.43 0.55 37.45 176.98 84.26 72.03 .11 23.76 56.67 0.67 0.69 0.96 19.03 73.96 34.22 168.Period & months INCOME Net operating income EXPENSES Materials consumption Manufacturing expenses Personnel expenses Selling expenses Administrative expenses Cost of sales Reported PBDIT Other recurring income Adjusted PBDIT Depreciation Other write-offs Adjusted PAT Reported PAT 2008 2009 2010 2011 282.97 15.12 40.05 93.5 98.04 167.34 0.03 297.39 0.85 94.5 115.37 489.13 13.34 266.67 53.88 316.15 0.12 224.95 301.55 71.43 115.31 407.91 115.6 87.39 142.9 17.27 0.78 142.75 103.09 62.57 28.77 25.62 339.4 30.61 93.19 189.35 175.48 93.64 17.5 43.

45 GROSS PROFIT MARGIN 49.61 224.00 50.00 53. .00 52.64 SALES 189.4 140.78 316.00 51.00 2008 2009 2010 2011 GROSS PROFIT MARGIN From chart 17 it can be seen during the period 2008-2011 that the gross profit margin is more or less constant ranging between 49% to 54%.00 49. The gross profit margin of the company is increasing every year.00 46.00 47.05 50.86 52.Table 17 Showing Gross Profit Margin for the period 2008-2011 YAER 2008 2009 2010 2011 GROSS PROFIT 93.91 266.59 172.56 Chart 17 Showing Gross Profit Margins for the period 2008-2011 GROSS PROFIT MARGIN 55.01 114.00 48.But gross profit margin in last four has increased less than 10%.70 54.00 54.

45 OPERATING PROFIT RATIO 36.78 316.91 266.64 41.61 224.00 10.00 0.75 138.19 38. .00 2008 2009 2010 2011 OPERATING PROFIT RATIO From chart 18 it can be seen that during the period 2008-2011 the operating profit of the company is increasing constantly.00 20.00 30.14 43. It can be said that this ratio can be accepted by the company.70 Chart 18 Showing operating profit ratio for the period 2008-2011 OPERATING PROFIT RATIO 50.Table 18 Showing operating profit ratio for the period 2008-2011 YEAR 2008 2009 2010 2011 EBIT 68.28 SALES 189.9 109.62 86.00 40.

TABLE 19 Showing Net Operating Ratio for the period 2008-2011
YEAR 2008 2009 2010 2011 ADJUSTED EAT 52.67 93.85 167.22 297.95 SALES 189.61 224.91 266.78 316.45 NET OPERATING RATIO 27.78 41.73 62.68 94.15

Chart 19 Showing Net Operating Ratio for the period 2008-2011
NET OPERATING RATIO 100.00 80.00 60.00 NET OPERATING RATIO 40.00 20.00 0.00 2008 2009 2010 2011

From chart 19 it can be seen that during the period 2008-2010 the net operating ratio of the company is increasing with a difference of 20% but from the period 2009-2010 the net operating ratio has increased with a difference of nearly 35% .Which is almost doubled with compared to previous years.

Table 20 Showing Net Operating Income for the period 2008-2011
YEAR 2008 2009 2010 2011 REPORTED EAT 53.03 94.6 168.75 301.03 SALES 189.61 224.91 266.78 316.45 NET OPERATING RATIO 27.97 42.06 63.25 95.13

Chart 20 Showing Net Operating Income for the period 2008-2011
NET OPERATING RATIO 100.00 80.00 60.00 NET OPERATING RATIO 40.00 20.00 0.00 2008 2009 2010 2011

From chart 20 it can be seen that during the period 2009-2010 the net operating ratio of the company is increasing with a difference of 20% but from the period 2010-2011 the net operating ratio has increased with a difference of nearly 33%.Which is almost doubled while compared to previous years. Table 21 Showing Operating Expenses Ratio for the period 2008-2011

YEAR 2008 2009 2010 2011

ADMINISTRATIVE EXPENSES 13.19 15.12 17.34 19.88

SELLINGEXPENSES TOTAL 34.13 43.97 56.64 72.96 47.32 59.09 73.98 92.84 SALES 189.61 224.91 266.78 316.45

OPERATING EXPENSES RATIO 24.96 26.27 27.73 29.34

Chart 21 Showing Operating Expenses Ratio for the period 2008-2011
OPERATING EXPENSES RATIO 30.00 29.00 28.00 27.00 26.00 25.00 24.00 23.00 22.00 2008 2009 2010 2011 OPERATING EXPENSES RATIO

From chart 21 it can be seen that operating expenses ratio of the company is increasing constantly. There is slowing incremental in the operating expenses ratio.

80 2008 2009 2010 2011 ADMINISTRATIVE EXP RATIO From chart 22 it can be seen that during the period 2008-2011 the administrative expenses of the company are decreasing gradually.40 6.12 17.20 6.88 SALES 189.28 Chart 22 Showing Administrative Expenses ratio for the period 2008-2011 ADMINISTRATIVE EXP RATIO 7.50 6.60 6.45 ADMINISTRATIVE EXP RATIO 6.91 266.20 7.34 19.78 316. The administrative expenses may not be accepted by the company .72 6.80 6.00 6.19 15.00 5.96 6.Table 22 Showing Administrative Expenses ratio for the period 2008-2011 YEAR 2008 2009 2010 2011 ADMINISTRATIVE EXPENSES 13.61 224.

00 15. .00 0.The selling expenses ratio can be accepted by the company.00 10.64 72.13 43.96 SALES 189.00 5.45 SELLING EXPENSES RATIO 18.55 21.Table 23 Showing Selling Expenses ratio for the period 2008-2011 YEAR 2008 2009 2010 2011 SELLING EXPENSES 34.00 19.00 20.23 23.06 Chart 23 Showing Selling Expenses ratio for the period 2008-2011 SELLING EXPENSES RATIO 25.61 224.97 56.91 266.78 316.00 2008 2009 2010 2011 SELLING EXPENSES RATIO From chart 23 it can be seen that during the period 2008-2011 the selling expenses of the company are increasing gradually with more or less a difference of nearly 2.

00 102. With in four years the operating ratio has increased from 105 to 111.68 290.00 110.00 2008 2009 2010 2011 OPERATING RATIO From chart 24T it can be seen that during the period 2008-2010 the operating ratio of the company is increasing gradually.00 109.64 351.00 111.94 111.00 105.Table 24 Showing Operating Ratio for the period 2008-2011 YEAR 2008 2009 2010 2011 OPERATING EXPENSES 199.00 104.15 Chart 24 Showing Operating Ratio for the period 2008-2011 OPERATING RATIO 112.00 107.01 108.61 224. Which is a very healthy sign.78 316.91 266.00 108.00 106.73 240.34 107. .00 103.45 OPERATING RATIO 105.72 SALES 189.

78 36.7 11.58 0.53 52.59 12.14 33.5 0.5 0 5.02 0 0 11.59 13.04 18.17 2005/04 113.84 0.39 39.28 11.02 16.65 14.45 0 -0.24 2.44 0.74 0 0 3.7 0.16 6.85 75.6 44.83 3 2.69 61.75 10.44 -0.62 15.PROFIT AND LOSS ACCOUNT Profit and Loss Rs.04 5.22 22.45 0.37 3.79 16.74 1.58 49.16 24.2 19.24 0.09 42.11 1.12 32.33 50.1 11.1 28.27 29.88 61.09 0.31 14.12 2.41 14.61 62.75 7 0 81.42 2006/05 140.17 16.44 .01 13.99 12. cr Period & months INCOME Net Operating Income EXPENSES Material Consumption Manufacturing Expenses Personal Expenses Selling Expenses Administrative Expenses Capitalized Expenses Cost of Sales Reported PBDIT Other Recurring Income Adjusted PBDIT Depreciation Other Write-offs Adjusted PBIT Financial Expenses Adjusted PBT Tax Charges Adjusted PAT Non-recurring Items Other Non-cash Adjustments REPORTED PAT APPROPRIATION Equity dividend preference dividend retained earnings 2009/08 235.25 1.53 76.56 0.8 7.25 9.57 4.06 0.9 10.12 2007/06 167.23 51.26 38.58 0 129.06 0 101.99 10.23 23.43 14.5 0 159.4 2008/07 191.93 4.27 19.5 2.72 20.6 16.18 43.7 27.46 13.08 22.56 0.25 0 117.02 1.6 29.04 10.73 3.91 0.54 33.35 43.95 9.43 2.06 26.08 53.94 17.06 46.16 33.54 5.04 33.12 0 23.78 7.

09 COST OF SALES 189.05 686.61 CHART 25 Showing cash inflows for the period 2008-2011 CASH INFLOWS 1200 1000 800 600 400 200 0 2008 2009 2010 2011 Series1 PROFITABILITY INDEX CALCULATION OF PROFITABILITY INDEX PROFITABILITY INDEX = PVCI/PVCO 3.Table 25 Showing cash inflows for the period 2008-2011 YEAR 2008 2009 2010 2011 GRAND TOTAL NET OPERATING INCOME 282.76 3251.74 874.00 .52 199.78 316.06 1140.91 266.91 335.22 TOTAL OF CASH INFLOWS 550.37 489.61 224.82 122.31 407.45 CASH INFLOWS 77.62 339.

64 351.12 PERSONEL EXPENSES 17.11 98.72 1082.34 19.Table 26 Showing Cash Outflows for the period 2008-2011 YEAR 2008 2009 2010 2011 MATERIAL CONSUMPTION 62.97 56.96 ADMINISRTATIVE EXPENSES 13.98 87.55 73.76 40.5 30.4 115.96 23.64 72. .5 103.77 GRAND TOTAL Chart 26 Showing Cash Outflows for the period 2008-2011 CASH OUTFLOWS 400 300 200 100 0 2008 2009 2010 2011 TOTAL OF CASH OUTFLOWS From chart 26 it can be seen that during the period 2008-2011 the cash flows of the company are increasing in the same manner.9 84.68 290.12 17.26 SELLING EXPENSES 34.19 15.88 TOTAL OF CASH OUTFLOWS 199.5 MANUFACTURING EXPENSES 71.73 240.13 43.

75 301.03 617.64 .03 94.6 168.625 *100 =69.41 AVERAGE RATE OF RETURN Average annual profit after tax = ____________________________ *100 Average investments = 154.3525 / 221.Table 29 showing average rate of return for the period 2008-2011 Calculation of AVERAGE RATE OF RETURN YEAR 2008 2009 2010 2011 TOTAL PAT 53.

. but in the year 2011 it increased nearly with the difference of hundred. but in the year 2011 the earnings after tax of the company increased to a great extent.Chart 27 Showing profit after tax for the period 2008-2011 PAT 350 300 250 200 150 100 50 0 2008 2009 2010 2011 PAT From chart 27 it can be seen that during the period 2008-2009 the earnings after tax or profit after tax are increasing slowly. In the period 2008-2009 the earnings after tax increased nearly with forty differences. Even though there is an increase in the Profit after Tax of the company. and in the period 20092010 it increased with seventy two difference.

CHAPTER– VIII FINDINGS & SUGGESTIONS .

2. 5. 4. The working capital turnover ratio of the company has been increased in 200809 and reduced duly the ie. The current ratio is gradually increasing year after year. The liquidity of the company is in a poor condition but it has been improving in the year 2008-2009 compare to the earlier years. 6. The company is becoming efficient in asset utilization. The net assets turnover ratio is decreasing from 2008-09..FINDINGS 1. . 2008-09 which shows the company improper utilization of working capital funds. The cash ratio (or) absolute liquid ratio of the company is not at liquid level during 2006-2007 it was below standard ratio and increasing during 2007-08 and 2008-2009 3. Debtors turnover ratio of the company is in increasing trend during the study period.

SUGGESTIONS: -The expenses towards salaries. which is higher so that the net working capital will reduced. should be reduced so that the net profit doesn’t fall into negative. -The cash and Bank Balances should be maintained towards the standards in order to meet its short term obligations. .. -The establishment and administrative expenses are needed to be reduced in order to improve profitability. dated and taxes etc. -The company should reduce its current assets position especially debtors.

2. During the period 2005-07 there is a gradual decrease in the operating profit growth rate of the company. During the period 2005-09 there has been a gradual increase in the growth rate of other recurring income of the company. but from the period 2005-2005 has plunged to negativity and then after from the period 2005-2006 the Growth rate has slightly increased. 3. During the period 2005-2006 there has been a gradual decrease in the growth rate of cost of sales of the company. 7. 5. Even though there is an increase in the selling expenses. also it can be seen that from the period 2005-2005 the growth rate increased slightly and from the period from 2005-2006 the growth rate plunged to negativity. 4. 8. in 2006-2007 it slightly decreased. the growth rate is decreasing. Even though there is an increase in the reported PBDIT in 2005-2005 it increased slightly. During the period 2005-09 the growth rate of personnel expenses has gradually increased & decreased. 6. . During the period 2005-09 there has been gradual increase and decrease in the growth rate of selling expenses of the company. 9. Even though there is an increase in the cost of sales. During the period 2005-2005 there has been gradual increase in the growth rate of administrative expenses and from the period 2005-2005 the growth rate plunged to negativity.CONCLUSIONS 1. and from the period 2005-2006 there has been a gradual increase in the growth rate of the company. During the period 2005-09 there has been gradual decrease and increase in the growth rate of reported PBDIT of the company. During the period from 2005-09 there is increase in the rate of material consumption growth rate of the company. During the period from 2005-09 the growth rate of manufacturing Expenses have slightly increased. In 2006-2007 there is slight increase in growth rate. Even though there is an increase in the net operating income.

in the period 2006 the growth rate of other Write-offs has slightly increased.Eventhough there is an increase in Equity Dividend. 11. During the period 2005-09 growth rate of retained earnings was in positive value.10.During the period 2005-2005 the growth rate of other write-offs is Negative and is below zero.During the period 2005-2005 there has been a gradual increase in the growth rate of adjusted PBDIT.During the period 2005-2005 the growth rate of adjusted PAT has gradually increased and during the period 2005-2007 the growth rate of adjusted PAT has gradually decreased and during the period 2005-2006 the growth rate of adjusted PAT has further decreased.During the period 2005-2005 the growth rate of reported PAT has gradually increased and during the period 2005-2007 the growth rate of reported PAT has gradually decreased. Even though there is an increase in the depreciation of the company. 13. 15.During the period 2005-09 there has been gradual decrease and Increase in the growth rate of depreciation of the company. from the period 2005-2005 there is slight increase in the growth rate and from period 2005-2007 there is slight decrease in the growth rate of the company. 12. 14. during the period 2005-2006 the growth rate of retained earnings has decreased. During the period 2005-2005 the growth rate of equity dividend has zero value. Even though there is an increase in the adjusted PBDIT.2007 it again was negative. 16. during the period 2005-2005 the growth rate of equity dividend has slightly increased and during the period 2005-2007 the growth rate of equity dividend has gradually decreased. .

icicidirect. FINANCIAL MANAGEMENT -KHAN&JAIN 2. BUSINESS LINES 6. SELF ASSESEMENT 3. ECONOMIC TIMES .com 5. 4.BIBLIOGRAPHY 1. TIMES OF INDIA 7.com www. www.adityabirlagroup.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer: Get 4 months of Scribd and The New York Times for just $1.87 per week!

Master Your Semester with a Special Offer from Scribd & The New York Times