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The project was undertaken mainly to study the financial position and the working capital management of YCH Group Pvt. Ltd. Established in the year 1955. YCH logistics is nurtured by quality consciousness, passion for hard work and the will to succeed. YCH services deals various with Intribution, Intrabution, and Retrogistics which cater the requirements of Consumer Goods Industry, Hi-tech Electronics, Chemical and Health Care. YCH with its diversified services has a strong supply chain management across India, which helps in tapping the market as a whole and provides at time services to its customers. It has also introduced a V-hub so that virtual sourcing of raw materials can be done based on the requirements, to feed the global manufacturing plants, enabling manufactures and brand owners to Buy Anywhere, Make Anywhere and Sell Anywhere. The growth of all the services which the company is dealing is linked to the economic development of the country. Our country is thriving to progress further and aims to convert her as a developed nation. To attain this

objective, the development of all the core sectors like infrastructure, power, construction, automobiles, consumer durables, etc. is essential and this in turn is expected to augment the growth of the corporate sector of the country as a whole. As the economy is growing in a faster manner, the disposable income of the people are also increasing and most of the population is brought under the spectrum for spending for housing and white goods. Importantly, the

aspiration to own luxury goods is also seen increasing and this has resulted in a revolution for consumer durables. The company is confident of capitalizing all these factors and increasing its market presence across the country.

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Every business enterprise functions with a view to earn profits. Profits are vital for a concern in order to sustain and ensure a long life. Working capital is also required in order to run day to day activities .Here in this project an attempt is made to evaluate the working capital of YCH group Pvt. ltd. The project aims to find out the financial efficiency and weakness of the concern and to draw inference about the present position of the company.

1) To study the financial position of YCH Group Pvt. Ltd and to evaluate the progress for a period of 4 years. 2) To know the financial efficiency and weakness of the concern. 3) To find out the liquidity position of the company.


Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. The study is done through by colleting primary data and secondary data. PRIMARY DATA Primary data are those data which are directly collected or which are the first hand data. Primary datas are the reliable and accurate than any other ones. Primary data can be collected by the interaction with the staffs, employees and interviewing to the managers. Primary data were collected by, Direct interview with the department heads

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Secondary data are the data, which are early, collected by some ones. It is obtained from various sources other than primary data. Secondary data consists of catalogue, manuals, magazines, annual reports and Internets. It is sufficient for an effective study. Secondary data were collected by. Annual reports of YCH Group Pvt. Ltd Periodicals, books, etc. published by the company Internet website ( )


The study basically aims to find out the financial performance of the YCH Group Pvt ltd. Knowledge of the current financial position are vital for a companys future course of action. The study also looks at the feedbacks, which can be used efficiently to improve the quality of the service and cost reduction activities. It helps the organization to make decisions regarding the control of the debts and creditors and also regarding the fund utilization of the firm.

1.6 LIMITATIONS OF THE STUDY 1. The effectiveness of the study depends on the correctness of the
information provided.

2. The study covers only a limited period of 4 years. 1.7 CHAPTERIZATION

This report is mainly divided into six chapters: Chapter-1 Introduction Chapter-2 Industry profile Chapter- 3 Company profile
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Chapter-4 Theoretical frame work Chapter-5 Data analysis and interpretation Chapter-6 Findings, Conclusion and Suggestions Bibliography Appendix

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2.1 BIRTH OF LOGISTICS: Logistics can be defined as providing the right type of products and/or services at the right price, at right place, time and in the right condition. The birth of Logistics can be traced back to ancient war times of Greek and Roman empires when military officers titled as 'Logistikas' were assigned the duties of providing services related to supply and distribution of resources. This was done to enable the soldiers to move from their base position to a new forward position efficiently, which could be a crucial factor in determining the outcome of wars. This also involved inflicting damage to the supply locations of the enemy and safeguarding one's own supply locations. Thus, this lead to the development of a system which can be related to the current day system of logistics management. The term "logistics" originates from the ancient Greek "" ("logos""ratio, word calculation, reason, speech, oration"). The Oxford English dictionary defines logistics as: The branch of military science having to do with procuring, maintaining and transporting material, personnel and facilities.The American Council of Logistics Management defines logistics as the process of planning, implementing and controlling the efficient and effective flow, and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. Logistics, as a business concept, evolved only in the 1950s. This was mainly due to the increasing complexity of supplying one's business with materials, and shipping out products in an increasingly globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians. Logistics has evolved itself as an art and science. However, it cannot be termed as an exact science. Logistics does not follow a defined set of tables nor is it based on skills inherited from birth. A logistics manager performs his duties and responsibilities based on his educational experiences, skills, past experiences and

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intuition. These skills are nourished by a constant application of the same by him for the betterment of his organization.






1960 s





Chart no: 1-Logistics Historical Development


A recent study defined logistics as: That part of the supply chain process that plans, implements and controls the efficient flow and storage of goods, services and related information from the point of origin to the point of consumption, in order to met the customers requirements. Today's modern, efficient warehouses/distribution centres are the heart of logistics, and provide control, efficiency and velocity for goods moving through the system.

A bit broad, but the elements that make up the modern logistics industry continue to evolve as the breadth of value added services warehouse logistics providers offer does. This expansion has been accelerated by three vital trends in the new economy:

The general trend toward outsourcing, The previously unprecedented growth of e-commerce and
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The importance of the partnership aspect of the manufacturer/marketerlogistics provider relationship.

A recent study found that 95 percent of the U.S.s chief executives believe they should have some form of logistics strategy, and nearly 50 percent of the nations CEOs are currently incorporating supply chain planning into their overall business strategies. One thing is certain: no matter how logistics is defined, the function accounts for 8.7 percent of the total U.S. Gross Domestic Product ($910 billion in 2002). It is growing dramatically in terms not just of services provided and outsourced but in terms of volume. The industrys 3PL provider element (that most closely served by IWLA) alone counts for more than $78 billion and is estimated to be growing by 15-20 percent per year. Its benefits include:

Reduced need for personnel Reduced transportation and distribution cost Improved customer service Improved cycle time Free-up capital in manufacturers and marketers non-core areas.


Logistics is the process of movement of goods across the supply chain of the company. This process is consist of various functions, which have to be properly managed to bring effectiveness efficiency in the supply chain of organization. The major logistical function are: 1. ORDER PROCESSING: The starting point of physical distribution activities is the processing of customers orders. In order to provide quicker customer service, the orders received from customers should be processed within the least possible time. Order
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processing includes receiving the order ,recording the order, filling the order, and assembling all such orders for transportation, etc. the company and the customers benefit when these steps are carried out quickly and accurately. The error committed at this stage at times can prove to be very costly. Order processing activity consists of the following: Order checking in any deviations in agreed or negotiation term Prices , payment and delivery terms Checking the availability in of the material stock Production and material scheduling for storage Acknowledge the order, indicating deviation

2. WAREHOUSING: Warehousing refers to the storing and assorting products in order to create time utility. Generally, larger the number of warehouses firm has the lesser would be the time taken in serving customers at different locations, but greater would be the cost of warehousing. Thus, the firm has to strike a balance between the cost of warehousing and the level of customer service.

Major decision in warehousing is as follow: Logistics of warehousing facility Number of warehousing Size of warehouse Design of the building Ownership of the warehouse

3. INVENTORY MANAGEMENT: Linked to warehousing decisions are the inventory decisions which hold the key to success of physical distribution especially where the inventory costs may be as
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high 30-40 per cent(e.g., steel and automobiles). No wonder, therefore, that the new concept of Just-in-Time-Inventory decision is increasingly becoming popular with a number of companies. A correct estimate of the demand helps to hold proper inventory level and control the inventory costs. And it also maintain production at a consistent level.

4. TRANSPORTATION: Transportation seeks to move goods from points of production and sale to points of consumption in the quantities required at times needed and at a reasonable cost. The transportation system adds time and a place utility to the goods handled and thus, increases their economic value. To achieve these goals, transportation facilities must be adequate, regular, dependable and equitable in terms of costs and benefits of the facilities and service provided.

5. INFORMATION: The physical distribution managers continuously need up-to-date information about inventory, transportation and warehousing. For example, in respect on inventory, information about present stock position at each location, future commitment and replenishment capabilities are constantly required. Similarly, before choosing a 16 carrier, information about the availability of various modes of transport, their costs, services and suitability for a particular product is needed. About warehousing, information with respect to space utilization, work schedules, unit load performance, etc., is required.

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Fig no: 1- Supply Chain Management


Marketing experts have recognized that for developing a position of sustainable competitive advantage, a major source is superior logistics performance. Thus, it can be argued that instead of viewing distribution, marketing and manufacturing as largely separate activities within the business, they need to be unified, particularly at the strategic level. One might be tempted to describe such an integrated approach to strategy and planning as Marketing Logistics. Business can only compete and survive either by winning a cost advantage or by providing superior value and benefit to the customer. In recent years, numbers of companies have become aware that the market place encompasses the world, not just the India .As a practical matter, marketing
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managers finding that they need to do much work in terms of conceptualizing , designing , and implementing logistics initiatives to market effective globally. Following are the reasons behind the extension of logistics activities at global level to do business internationally. The magnitudes of global business are: Increase in the magnitude global business Business is relying on foreign countries to provide a source of raw materials and market of finished goods Fall of global trade barriers. Increase in Global competition.

2.5 PROSPECTS OF GROWTH IN THE INDUSTRY In years gone by, the traditional warehousing and logistics facility was located by rail, road tracks, a sea port, and/or air ways, usually in the least desirable parts of cities or large towns. This stereotype then faded as gigantic, state-of-the-art facilities began to sprout in more rural areas on the outskirts of transportation and population hubs. The World started beginning to see such facilities showing up in even less "traditional" areas. Modern warehouses now are being located in carefully manicured industrial parks that are sprouting as fast as the corn and wheat once did in these open spaces-often in out-of-the-way places. Why the emphasis on such locations for logistics companies? Much of it is due to the great flux that the logistics industry has been undergoing in the first three years of the 21st century. Most of these changes are being driven by a growing trend in the manufacturing and retail sectors to form partnerships with companies to which they can outsource non-core logistics competencies-3PL providers. In turn, 3PL providers are continually looking to provide innovative supply chain solutions to customers by focusing on value-added capabilities, differentiating themselves from the competition. They focus on key objectives, such as implementing information technologies, instituting effective management
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processes, integrating services and technologies globally, and delivering comprehensive solutions that create value for 3PL users and their supply chains. This need to partner with customers and become more integrated into their supply chain processes has created the ancillary need to locate close to these customers. That isn't to say the need for easy access to transportation hubs and different modes of transportation won't continue to be important. But the above shift in business strategy, along with the advances in technology and enhanced communication, has opened the door for logistics facilities to operate effortlessly in a myriad of locations. Profit warnings, share price pressures, mergers, reorganizations, relocations, disposals, painful layoffs and great geopolitical uncertainties can sweep away even the most comprehensive logistics strategies and thats despite outstanding management over many years. These are exceptionally difficult times and it has never been more important to connect logistics and freight planning to executive board thinking than now. Its easy to lose sight of the bigger picture in the rush to cut infrastructure cost and conserve cash. Hopefully organization succeed in protecting the business, satisfying shareholders and analysts, but what about capacity and flexibility, morale and momentum? To be a logistics winner in the coming years, organizations need to use the downturn to reshape for growth, propelled by an unshakeable conviction that the mission is still important, that more prosperous times lie ahead, and that in some way the company infrastructure is helping to build a better kind of world. Own passion for running the race matters most of all in a downturn, when people are insecure, see only savage cost savings, and loyalty is tested. The corporations future will be dominated by six factors, or faces of a cube, spelling F U T U R E. Logistics is inevitable in the future and essentially the management policy also has a significant role in the future of world. Generally the study is being featured with all aspects of management in Logistics and Freight areas. (Logistics include Transportation, Warehousing, Network Design, Cross docking, and Value Adding).
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Indian Supply Chain and Logistics Industry is more than USD 100 Billion in size and is the backbone of Indian Economy. Our industry is growing at a rate of 810% annually and has been a crucial contributor in the growth and development of the Indian economy. In the near future, Traditional Logistics services like Transportation and Warehousing would continue to growth at a good rate. However, the big ticket growth would come from the Value Added Logistics services in the near future. At present, Outsourced Logistics accounts for only one-third of the total Logistics market in India, which is a significantly lower proportion vis--vis the developed markets. Growth in this industry is currently being driven in India by over USD 300 billion worth of infrastructure investments, the phased introduction of VAT, the development of organized Retail and Agro-processing industries, along with a strong manufacturing growth. In addition, we expect strong Foreign Direct Investment inflows in the Indian markets, which would lead to increased market opportunities for providers of Third-Party Logistics in India. Therefore, India possesses substantial opportunities for growth in the Supply Chain &Logistics industry in the coming years, notwithstanding the temporary jolt due to the economic slowdown.

THIRD PARTY LOGISTICS IN INDIA Third party logistics (3PL) market in India is at its nascent stage.3PL is fast gaining popularity in Indian logistics market. Companies in textile , automotive ,pharmaceutical, manufacturing , retail and FMCG sectors are increasingly opting to outsource their logistics requirements to specialized service providers According to the recent survey of 3 PL service providers Engineering, Automotive And Retail sectors are the top revenue earners

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Own some of the assets used in the SCM which includes trucks, distribution centre and warehouses Chart no: 2

Does not own such assets.

Segments of 3pl market



10.00% 17.50% 5.00% 5% 0.00% 2005 2008 2012 10% PERCENTAGE


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STRENGTH: Quick way to re-engineer distribution networks Enhanced distribution and transportation Service Time Saving in servicing customer Flexibility in restructuring distribution networks and expansion plans Economies of scale in distribution WEAKNESS: Lesser control over outsourced third party activities. Lack of proper set of skilled man power Forged bills and claims by 3PL provider agency. Difficult to switch 3PL provider agency. Lesser co-ordination between branch offices and 3PL agency OPPORTUNITIES: Better utilization of working capital Fast expansion of principals business without investing in infrastructure and transportation resources Cost optimization as a result of fast and efficient processes Concentration on core competencies THREATS: Value Added Tax (VAT) might affect 3PL industry as distribution channels would be trimmed. Poor transportation infrastructure of India might lower the profit margin E-Commerce is emerging as a primary threat to 3PL industry. Threat of leakage of operational competencies to competitors. 2.8 COMPANIES INVOLVED IN 3PL LOGISTICS DHL FEDERAL EXPRESS VRL LOGISTICS
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YCH group is the leading integrated end to end supply chain management and logistic partner to some of the worlds largest companies in the hi-tech electronics, chemicals / health care and consumer goods industries. Business is to provide integrated logistics services such as warehousing and inventory management, transportation and distribution management, and freight management. It provide end to end supply chain management services through a suite of supply chain solutions to manage the 3 key logistics processes within a supply chain , mainly raw materials Management, consumer goods distribution and service and return management YCH operations are spanning throughout Asia Pacific, Including Singapore, Malaysia, Thailand, Indonesia, China, Taiwan, Hong Kong, Australia, India, Vietnam, and Korea.


Founded in 1955, YCH Group is the leading integrated end-to-end supply chain management and logistics partner to some of the world's largest companies in the hi-tech/electronics, chemicals/healthcare and consumer goods industries. Our business is to provide integrated logistics services such as warehousing and inventory management, transportation and distribution management, and freight management services. We also provide global end-to-end supply chain management services through a suite of supply chain solutions to manage the 3 key logistics processes within a supply chain, namely raw materials management, consumer goods distribution and service and returns management.

EARLY YEARS 1955-1970s We were established in 1955 as a small local passenger transportation business under the name of Yap Chwee Hock Transport and General Contractors ("YCH Transport"). In 1973, YCH Transport was converted from a sole proprietorship to
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a private limited enterprise and was renamed Yap Chwee Hock Transport Pte Ltd, which is today known as YCH Global Logistics Pte Ltd. 1977-1990s In 1977, we undertook a strategic decision to redirect our passenger transportation business to cargo transportation and in the following year, became one of the major cargo transport contractors for the then Port of Singapore Authority. In the early 1980s, we diversified into the business of warehouse leasing and the provision of freight forwarding services via the acquisitions of Freight Connections Worldwide Pte Ltd and Regional Forwarding & Warehousing Management Pte Ltd ("RFWM") in 1982 and 1983 respectively. RFWM was incorporated in Singapore on 6 October 1980 as a private exempt limited company and was renamed YCH Logistics Pte Ltd on 17 March 1989. In 1999, YCH Logistics Pte Ltd was renamed YCH Group Pte Ltd and presently serves as our holding company. In the mid-1980s, we grew from a warehousing and cargo transportation provider to an integrated third party logistics company providing services such as warehousing, distribution inventory management and freight management. In line with the growth of our business, we established a number of distribution centres to manage the warehousing and regional distribution for MNC clients in 1991. We developed and completed our present headquarters, known as YCH Distri Park, in 1992. The establishment of YCH Malaysia in 1991 marked our first foray overseas. In 1993, we set up PDC-YCH Distri Park, a 51% owned joint venture with Penang Development Corporation, to operate a distribution hub in Penang. This joint venture in Penang is fully operated and managed by YCH. In 1993, we also opened the Roche Distribution Centre in Singapore to manage the logistics needs of Roche. In 1994, we expanded into China and set up operations in Shanghai to operate a distribution hub by way of a 51% owned joint venture with Shanghai Wai Gao Qiao Free Trade Zone United Development Co and China Ocean
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Shipping Agency Shanghai. This joint venture in Shanghai is fully operated and managed by YCH. 1995 Onwards In 1995, we made an investment to build an automated storage and retrieval system warehouse in Singapore. In 1997, we commenced operations in Hong Kong through the establishment of YCH HONG KONG. With the growing trend of logistics outsourcing and the increasingly complex requirements of our clients, we further expanded our services to include the provision of supply chain management services through a suite of supply chain solutions, namely Intribution (raw materials management to support manufacturing) in 1996, Retrogistics (service and returns management) in 1998 and Intrabution (consumer goods distribution) in 2000.

In 1996, we were awarded an Innovation Development Award under EDB's Innovation Development Scheme, for the development of the Intribution solution. We were appointed by Compaq Asia to implement our Intribution solution to service its Asia-Pacific manufacturing operations in the same year. Today, we have implemented the Intribution solution for our various clients, such as Natsteel Electronics in Singapore and Mexico, Motorola in Singapore and China, Gateway in Malaysia, MiTac in Taiwan and Solectron in Mexico. In 1999, YCH Logistics Pte Ltd was renamed YCH Group Pte Ltd and presently serves as our holding company.

Our Philosophy YCH is founded on a philosophy that thrives on overcoming challenges. This is embodied in the corporate philosophy using the Chinese Character (Sheng)

meaning to RISE. The acronym of the word RISE was adopted as the companys
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corporate values, focusing on the level of service and confidence we provide to our client. Reliability Our proven Reliability to perform our best is the companys assurance of professionalism. Integrity We strive to deliver an uncompromising commitment to Integrity in all business activities. Sincerity Our Sincerity is demonstrated through the genuine care and interest we place on the welfare of our clients and staff. Enterprise Our dynamism and innovative spirit of Enterprise, in meeting new challenges, is a true reflection of our Vibrancies, Energy, Strength and Passion to achieve our corporate goals.

Our Mission to Be The No. 1 Supply Chain Solutions Player in Asia Pacific.

Our Vision to Build THE Logistics Superhighway in a Borderless World represents our passion in creating the ultimate superhighway of optimal efficiency & speed. THE Logistics Superhighway will enable the Physical, Informational, and Financial flows of the supply chain to flow seamlessly throughout a borderless world.


Over the years, the YCH brand has come to represent reliability and integrity. As the company evolved, so did our brand identity.

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In 1955, our logo brings memories to YCH's humble beginnings - from a transportation company to today's leading supply chain solutions provider. The need for YCH to keep up with the increasing pace of globalisation dictated by technological advances instilled our need to reinvent our corporate identity.

Hence, in 1999, the company updated the logo to give it a more modern look for the times. The YCH logo embodied a new dynamism. A robust spirit that has evolved from a corporate philosophy of rising to the challenges in exceeding customer expectations, in a demanding, ever-changing world. The symmetry of each letter rendered in twin lines headed in the same direction suggests a commitment to building strong partnerships.

The current YCH brand identity was introduced in October 2005, on YCHs 50th Anniversary. Research from our branding exercise indicated that the brand audience associated YCHs brand essence with the characteristic font type and the colour yellow. The new YCH logo encapsulates the companys vision, energy, and dynamism. It personifies YCH Groups forward-looking spirit and also signifies strong partnerships, in a journey on the Logistics Superhighway.

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is embedded right in the heart of supply chain and is the key to

connecting global businesses, empowering through a connected supply chain The company had gone through three eras of change and had emerged a more vibrant, dynamic leading-edge company than ever before. The new logo embraced the strengths of the previous logo - the twin lines and the familiar yellow corporate colour. YCH is now better represented in this new visually dynamic context and ready to move towards new horizons in this borderless world.

3.7 Consumers of YCH Group Pvt. Ltd.

CONSUMER GOODS INDUSTRY Unilever Mary Kay CHEMICALS / HEALTH CARE BASF (Badische Anilin- und Soda-Fabrik) Hunts Man ELECTRONICS Dell Motorola Samsung LG


Our award-winning end-to-end supply chain solutions, namely Intribution, Intrabution and Retrogistics, address the entire supply chain needs of our clients, from suppliers to manufacturers (for parts and components), from manufacturers and brand owners to resellers and consumers (for finished products), and from consumers to original equipment manufacturers (for spares and returns), respectively.
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These solutions allows us to provide more holistic supply chain management services to our clients from supply chain consulting, design, solutioning, through to the delivery of integrated logistics services such as warehousing, freight forwarding and transportation. All these are integrated through cutting edge technology applications and the management of the information supply chain or electronic transfer of information, either via the EDI, API, web services and so on. The implementation of our supply chain solutions for our clients involves: (1) The setting up of physical inventory management facilities such as supplier and distribution hubs, (2) The setting up of system interfaces between YCH and our customers' operations and computer systems and (3) The customisation of our clients' supply chain networks processes with regards to the flow of inventory and information



Chart no: 4 End To End Supply Chain Management Solutions

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As depicted in the diagram above, the entire supply chain can be broken into 3 key stages, involving interactions between:

Suppliers and manufacturers, where raw materials are aggregated to support the manufacturing process; Manufacturers and end consumers, where finished consumer goods are distributed directly to the end consumer or indirectly via various distribution channels such as distributors, wholesalers and retailers; and

End consumers and manufacturers, where defective goods are returned to the manufacturer or appointed returns centre for service and repair.

In addition to the physical movement of goods, each of these interactions also involves the exchange of information between parties in the supply chain The supply chain management also involves the co-ordination and integration of various functions such as procurement, manufacturing planning, distribution and marketing. INTRIBUTION Manufacturing Logistics Solutions: Managing the flow of your raw materials information and financial transactions has never been smoother than with Intribution , a web enabled manufacturing logistics solutions .Intribution ensure that the manufacturers needs are met throughout the manufacturing process in a cost and time efficient manner. Vendor Managed Inventory/Suppliers Owned Inventory: As we know how everything connects, we can help you to nimble in your business. It is done by orchestrating the movements of your inventories on a Just - In - Time basis to support built to order (BTO) and configured to order (CTO) manufacturing .under the SOI model, we enable the transfer of materials ownership from suppliers to manufacturers only upon manufacturing pull.

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Materials Hub Management: Inventory from anywhere in the world is carefully housed in these hubs until such time that they are needed to be delivered in a just- in time basis to the production floor. Our mini-max replenishment capability ensures that inventory can be replenished or adjusted based on the needs of manufacturer, minimizing inventory obsolescence. Virtual Hub: It allows virtual sourcing of raw materials based on optimised requirements to feed to global manufacturing plants, enabling manufacturers and brand owners to Buy Anywhere, Make Anywhere, Sell Anywhere. INTRABUTION Customer Goods Fulfilment The internet generation has produced a new breed of consumers with sophisticated demands. Getting finished goods to them as quickly as their tastes evolve becomes a priority. And this we take very seriously with Intrabution a solution that bridges the complexities in distributing finished products to retailers and final consumers. Order Fulfilment Order management and fulfilment takes on a new approach with Intrabution, streamlining it to a distinct advantage for brand owners and manufacturers. Harnessing the power of internet and cutting-edge technologies as well as the traditional means of phone and fax, Intrabution synchronises the order fulfilment process for ease of use. With the Intrabution hubs that pick, pack and deliver according to order specifications, providing real-time delivery and inventory status visibility, we are very swiftly able to fulfil your commitments to your customers. RETROGISTICS Service and Return Logistics: Service does not stop at the shop floor. It means following up with your clients needs even after the point of sale. To help you and your clients,
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Retrogistics efficiently manages the service and returns logistics when your products require after-sales parts replacement, warranty returns and servicing. In a nutshell, we become a critical part of your after-sales service, helping you create brand loyalty among your consumers. Spares and Returns Management: YCH even look into the nuts and bolts of operating a spare and returns policy. They receive and pick up defective products from the end users. Without skipping a beat, they ensure parts and components inventory management, auto replenishment and spare parts delivery to facilitate on site after sales service.

Freight Management Warehousing Transportation

Freight management: There freight management service includes managing clients' freight requirements and activities, including the booking and scheduling of freight activities and the preparation and coordination of the necessary documentation. They have established a network of overseas air and sea freight agents to provide on time deliveries to Europe, the Americas and Asia. Y-Track their web-based global track and trace system, is incorporated to our freight management services to provide their customers with end-to-end visibility in tracking shipments via the Internet. The YCH Freight Connector provides user an access to the simplest shipment booking system with competitive rates from multiple Carriers/Agents. The Freight Connector is an interactive multi-modal, internet-based supply chain management tool that allows customers to create shipment bookings over the

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internet. This system allows the shipper to make, search, and edit bookings, irrespective of time, day, and location, all over the Internet. With the Freight Connector online Shipment Tracking system user can track the status as well as the history of your shipments from the job level down to the individual SKU level anywhere in the world. The system allows the user to search by their Booking references, the Forwarders reference, House and Master Air Waybill numbers, Bill of Lading numbers, Container/Trailer numbers, Purchase Order Numbers or the date ranges. Transportation: They have developed an extensive and comprehensive network of transportation fleets, providing container trucking services and local cargo delivery services such as the collection and transportation of our clients' goods from a designated pick-up point to a designated drop-off point. YCH transportation and distribution management services also include the delivery of our clients' inventory which are managed by us and stored in our warehouses to designated locations. Warehousing: YCH provide warehousing and inventory management services such as the provision of warehouse space, the stocking and tracking of inventory, and other ancillary services such as the stuffing and unstuffing of cargo, handling, packaging and labelling. Their headquarters at YCH Distri park, Singapore is situated on a 7.8 hectare land in Tuas.The facilities located within YCH Distri Park include Air-Conditioned Warehouses, Cold and Clean Room, Temperature-controlled warehouses, Very Narrow Aisles and Automated Storage and Retrieval Systems warehouses to maximise use of space and improve operational efficiency. They also have specialized Chem Parks which manage Dangerous & Hazardous Cargo, with stringent safety systems, such as spillage containment tanks, Strong
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Rooms, and so on. All their hubs and facilities have 24-hr security with CCTVs and Motion Detectors and also comply with industry specific standards and classifications such as TAPA, Responsible Care, etc.

YCH (Tianjin) donates to Quake Victims. YCH (India) organizes Blood Donation Camp in association with Lions Club of India. YCH (Thailand) launches Voices of Customer Survey

YCH was awarded with Best IT/Electronic Logistics Service Provider (Singapore). YCH bagged frost and Sullivan Best Domestic Logistic Service Provider (Singapore). YCH bags SBA ENTERPRISE of the year award. YCH wins the prestigious CIO 100 award for the year 2010. YCH has been honoured with the Singapore Chemical Industry Councils (SCIC) Responsible Care achievement award for Employee Health and Safety Code in 2010.

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Business as we know is concerned with the financial activities. In order to ascertain the financial status of the business every enterprise prepares certain statements, known as the financial statements. Financial statements refer to two statements which are prepared by a business concern at the end of the year. These are (i) Income Statement Or Trading And Profit And Loss Account which is prepared by a business concern in order to know the profit earned and loss sustained during a specified period; (ii) Position Statement Or Balance Sheet which is prepared by a business concern on a particular date in order to know its financial position. 1) Income statement: Trading concerns, whose financial activities are restricted to purchases and sales of goods prepare trading and Profit and Loss Account. The trading and Profit and Loss Account in order to ascertain their net income/net loss. Manufacturing concern require information regarding the cost of production also, so they prepare one more additional Account, known as the manufacturing Account. In case of Joint Stock Companies profit and loss appropriation is also prepared to show the disposal of profit earned by the company. It furnishes the information regarding purchases, sales, direct expenses, gross profit or gross loss and net profit and net loss 2) Position statement: it is a mirror which reflects the true position of the assets and liabilities of the business on a particular date. Assets include all current and non-current assets and the liabilities include creditors equities and proprietors equities. It is traditionally known as the balance sheet.


Financial analysis is the systematic numerical calculation of the relationship of one financial fact with the other to measure the profitability, operational
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efficiency, solvency and the growth potential of the business. The analysis serves the interests of shareholders, debenture-holders, potential investors, creditors, bankers, journalists, legislators, politicians, researchers, stock exchanges, taxations authorities and economists. The analysis of financial statements makes it simple, intelligible, and meaningful for all concerned parties. Financial statements are split into simple statements by the process of rearranging, regrouping and calculations of various ratios. The analysis simplifies, summarizes and systematizes the monotonous figures. Financial analysis in this way is the purposeful and systematic presentation of financial statements. Various items of income and position statements are compared and their inter relationship is established. According to Kennedy and Memullar The analysis and interpretation of financial statements are an attempt to determine the significance and meaning of financial statements data, so that a forecast may be made of the prospects for future earning, ability to pay interest and debt maturities( both current and long term) and profitability of sound dividend policy. To these statements added are the statement of retained earnings and some other statements (as fund flow statement, cash flow statement, etc.) and schedules of fixed assets (as investments, current assets etc) to give a full view of the financial affairs. All these statements are collectively called as a package of financial statements. Statement of retained earnings (when prepared separately) or profit and loss appropriation Account shows the utilization of profits of the company i.e., dividend declared, amount transferred to general reserve or any other reserve are shown in this Account. Funds flow statement summarizes the changes in working capital in a specified period and indicates the various sources and applications of funds. Cash flow statement gives the various items of inflow and outflow of cash. Various schedules of fixed assets are prepared by companies to show as to how the figures shown in the balance sheet have been arrived at.
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Financial statements are prepared for the purpose of presenting a periodical review or report by the management and deal with the state of investment in business and result achieved and best result achieved during the period under review. They reflect a combination of recorded facts, Accounting conventions and personal judgments. From this it is clear that financial statements are affected by three things i.e., recorded facts, conventions and personal judgments. Only those facts which are recorded in the business books will be reflected in the financial statements. For example, fixed assets are recorded in the books at cost price and shown in the balance sheet cost price irrespective of their market or realizable price. Again, financial statements are prepared by following certain principles which are in use from a long time. Such convention will not reflect the true position of the business as the actual position of the business will definitely be better as compared to the position depicted from the financial statements. Personal judgment of the Accountant again will reflect the preparation of financial statements. For an example, the choice of the method of depreciation or which expenditure is to be capitalized or not will affect the preparation of the financial statements. Following points truly reflect the nature of financial statements of business entities: These are reports or summarized reviews about the performance, achievements and weaknesses of the business. These are prepared at the end of the Accounting period so that various parties may take decisions of their future actions in respect of the relationship with the business. The reliability of financial statements depends on the reliability of Accounting data The figures in the financial statements are a combination of recorded facts
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These statements are prepared as per Accounting concepts and conventions These statements are influenced by the personal judgement of the Accountant though he is expected to be more objective in his approach. These judgements may relate to the valuation of inventory, depreciation of fixed assets and while making distinction between capital and revenue.

Significance/ purpose
1) Judging the operational efficiency of the business: It is very

significant that the company must know the operational efficiency of its management. We analyze the financial, match the amount of manufacturing, selling, distribution and financial expenses of the current year with the corresponding expenses of the previous year and assess the managerial efficiency of the business. We can judge the operational efficiency of the business by calculating the profitability ratios. 2) Measuring short term and long term financial position: The business must know its financial soundness. It should satisfy itself that its current resources are sufficient to meet its current liabilities. We can calculate current and liquid ratios for comparing current assets and current liabilities to ascertain short term financial soundness. Long term and financial position can be measured by calculating debt equity, proprietary d fixed asset ratios. The results of the financial analysis may be studied and corrective steps can be taken, if necessary. 3) Indicating the trend of achievements: Financial statements of the previous years can be compared and the trend regarding various expenses, purchases, sales, gross profit and net profit can be ascertained, cost of goods sold, values of assets and liabilities can be compared and the future prospects of the business can be indicated.
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4) Assessing the growth potential of the business: The trend and dynamic analysis of the business provides us sufficient information indicating the growth potential of the business. If the trend predicts gloomy picture, effective measures can be applied as remedial (corrective) measures. If the cost of production is rising without corresponding increase in sales price, efforts should be made to reduce cost of production. 5) Measuring the profitability: Financial statements show the gross profit, net profit and other expenses. The relationship of these items can be established with sales. Gross profit, net profit expenses and operating ratios may be calculated and the profitability of the business ascertained. 6) Intra-firm and inter firm comparison of the firm: Analysis of financial statements can be made with the previous years performance of the same firm and also with the performance of other firms. Intrafirm analysis provides an opportunity to self appraisal, whereas interfirm analysis presents the operational efficiency of the firm as compared to other firms. Comparison helps us in detecting our weaknesses and applying corrective measures. 7) Forecasting, budgeting and deciding future line of action: The analysis provides sufficient information regarding the profitability, performance and financial soundness of the business on the basis of these informations, we can make effective forecasting budgeting and planning. 8) Simplified, systematic and intelligible presentation of the facts: Analysis of financial statements is an effective tool for simplifying, systematizing and summarizing the monotonous figures. An average person can draw conclusion from these ratios. The facts can be made more attractive by graphs and diagrams, which can be easily understood
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1) Owners: The owners provide funds for the operations of a business and they want to know whether their funds are being properly utilized or not. The financial statements prepared from time to time to satisfy their curiosity. 2) Creditors: They want to know the financial position of a concern before giving loans or granting credit. The financial statements help them in judging such position. 3) Potential Investors: Prospective investors, who want to invest money in a firm, would like to make an analysis of the financial statements of that firm to know how safe proposed investment will be. 4) Employees: Employees are interested in the financial position of a concern they serve, particularly when payment of bonus depends upon the size of the profits earned. 5) Government: Central and State governments are interested in the financial statements because they reflect the earnings for a particular period for purposes of taxation. Moreover, these financial statements are used for compiling statistics concerning statistics concerning business which, in turn, help in compiling national Accounts 6) Research scholars: The financial statements, being a mirror of the financial position of a firm, are of immense value to the research scholar who wants to make a study into financial operations of a particular firm. 7) Consumers: Consumers are interested in the establishment of good Accounting control so that cost of production may be reduced with the resultant reduction of the prices of goods they buy. 8) Managers: actual results achieved by the employees can be measured against the budgeted performance they were expected to achieve and the remedial action can be taken if the performance is not upto the
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mark. Accounting information is very helpful to the management for planning, control, evaluation of performance and decision making.


1) Interim and not final reports: financial statements do not depict the exact position and are essentially interim reports. The exact position can be only known if the business is closed. 2) Lack of precision and definiteness: financial statements may not be realistic because these are prepared by following certain basic concepts and conventions. For example, going concern concept gives us an idea that the business will continue and assets are to be recorded at cost but the book value at which the asset is shown may not be actually realisable. Similarly, by following the principle of conservatism the financial statements will not reflect the true position of the business. 3) Lack of objective judgement: financial statements are influenced by the personal judgement of the Accountant. He may select any method for depreciation, valuation of stock, amortization of fixed assets and treatment of deferred revenue expenditure. Such judgement if based on the integrity and competency of the Accountant will definitely affect the preparation of the financial statements. 4) Record only monetary facts: financial statements record only monetary facts, i.e., those transactions are recorded in the books of Accounts which can be measured in monetary terms. Those transactions which cannot be measured in monetary terms such as, conflict between production manager and marketing manager may be very important for a business concern but not recorded in the books of Accounts. 5) Historical in nature: These statements are drawn after the actual happening of the events. They attempt to present a view of the past performance and have nothing to do with the Accounting for the future.
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Modern management is forward looking but these statements do not directly help them in making future estimates and taking decisions for the future. 6) Artificial view: These statements do not give a real and correct report about the worth of the assets and their loss of value as these are shown on historical cost basis. Thus, these statements provide artificial view as market or replacement value and effect of the changes in the price level are completely ignored. 7) Scope of manipulations: these statements are sometimes prepared according to the needs of the situation or the whims of the management. A highly efficient concern may conceal its real profitability by disclosing loss or minimum profit whereas an inefficient concern may declare dividend by wrongly showing profit in Profit and Loss Account. Window dressing may also be resorted to in order to show better financial position of a concern than its real position. 8) Inadequate information: There are many parties who are interested in the information given in the financial statements but their objectives and requirements differ. The financial statements as prepared under the provisions of the companies act, 1956, fail to meet the needs of all. These are mainly prepared to safeguard the interests of the shareholders. 9) Ignores price level changes: The results shown by financial statements may be misleading, if price level changes have not been accounted for. The ratio may improve with the increase in price, whereas the actual efficiency may not improve. Ratios of the two years will not be meaningful for comparison, if the prices of commodities are different. Change in price effects, cost of production, sales and values of assets and as a consequence comparability of ratios also suffers.

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10) Financial analysis spots the symptoms but does not arrive at diagnosis: Financial analysis shows the trend of the affairs of the business. It may spot symptoms of financial unsoundness and operational inefficiency but that cannot be accepted. A final decision in this regard will require further investigation and thorough diagnosis. 11) Financial analysis is only a tool, not the final remedy: Analysis of statement is a tool to measure the profitability, efficiency and the financial soundness of the business. It should be noted that personal judgement of the analyst is more important in financial analysis. We should not rely on single ratio. Before reaching any conclusion, we should calculate several ratios. Accountant should not be biased in the calculation of ratios. It should not be calculated to prove the personal contention.







Financial statements analysis is largely a study of relationship among various financial factors in a business as disclosed by single set of statements and a study of the trend of these factors as shown in a series of statements MYER Analysis is the process of critically examining in detail Accounting information given in the financial statements. For the purpose of analysis, individual items are studied; their interrelationships with other related figures established, the data sometimes rearranged to have better understanding of the information with the help of different techniques or tools for the purpose. Analyzing financial statements is a process of evaluating relationship between component parts of financial statements to obtain better understanding of firms position and performance. The analysis of financial statements thus refers to the treatment
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of the information contained in the financial statements in a way so as to afford a full diagnosis of the profitability and financial position of the firm concerned. For this purpose financial statements are classified methodically, analysed and compare with the figures of previous years or other similar firms.

Meaning of Interpretation
Analysis and interpretation are closely related. Interpretation is not possible without analysis and without interpretation analysis has no value. Various Account balances that appear in the financial statements do not represent homogeneous data so it is difficult to interpret and draw conclusion. This requires an analysis of the data in the financial statements so as to bring some homogeneity to the figures shown in the financial statements. Interpretation is thus drawing inference and stating what the figures in the financial statements really mean. Interpretation is dependent on interpreter itself. Interpreter must have experience, understanding and intelligence to draw correct conclusions from the analyzed data.


The main objective of analysis of financial statements is to assess:

The present and future earning capacity or profitability of the concern, The operational efficiency of the concern as whole and of its various
parts of the departments,

The short term and long term solvency of the concern for the benefit of
the debenture holders and trade creditors,

The comparative study in regard to one firm or one department with

another department,

The possibility of developments in the future by making forecasts and

preparing budgets,
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The financial stability of a business concern, The real meaning and significance of financial data, and The long term liquidity of its funds 4.8 TYPES OF FINANCIAL STATEMENTS
Different type of financial statements can be made on the basis of 1) Nature of the analyst and the materials used 2) The objective of the analysis 3) The modus operandi of the analysis These are discussed in detail below: 1) According to the nature of the analyst and the material used by him External analysis

It is made by those persons who are not connected with the enterprise. They do not access to the enterprise. They do not have access to the detailed record of the company and have to depend mostly on published statements. Such type of analysis is made by the investors, credit agencies, governmental agencies and research agencies. Internal analysis

The internal analysis is made by those persons who have access to the books of Accounts. They are members of the organisation. Analysis of financial statements or other financial data for managerial purpose in the internal type of analysis. The internal analyst can give more reliable result than the external because every type of information is at his disposal. 2) According to the objective of the analysis Long term analysis

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This analysis is made in order to study the long term financial stability, solvency, liquidity and profitability as well as the earning capacity of a business concern. The purpose of making such type of analysis is to know whether in the long-run the concern will be able to earn a minimum amount which will be sufficient to maintain a reasonable rate of return on the investment so as to provide the funds required for modernization, growth and development of the business and to meet its costs of capital. This type of analysis helps the long term financial planning which is essential for the continued success of a business. Short term analysis

This is made to determine the short term solvency, stability and liquidity as well as earning capacity of the business. The purpose of this analysis is to know whether in the short run a business concern will have adequate funds readily available to meet its short-term requirements and sufficient borrowing capacity to meet contingencies in the near future. This analysis is made with reference to items of current assets and current liabilities (working capital analysis) to have fairly sufficient knowledge about the companys current position which may be helpful for short term financial planning and long-term planning. 3) According to the modus operandi of the analysis Horizontal (or dynamic) analysis

This analysis is made to review and analyze financial statements of a number of years and therefore based on financial data taken from several years. This is very useful for long-term trend analysis and planning. Comparative financial statement is an example of this type of analysis. Vertical (or static) analysis

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This analysis is made to review and analyse the financial statements of one particular year only. Ratio analysis of the financial year relating to a particular Accounting year is an example of this type of analysis.


Financial Analysis Techniques

Comparative Financial Statements Commonsize Financial Statements Trend Percentages Fund Flow Analysis CVP Analysis Ratio Analysis

Cash Flow Analysis

Chart No: 5 Tools of Financial analysis 1) Comparative financial statements 2) Common size statements 3) Trend analysis 4) Funds flow statement 5) Cash flow statement 6) Cost profit volume analysis 7) Ratio analysis COMPARATIVE FINANCIAL STATEMENTS In the words of FLAUKE Comparative analysis is the study of trend of the same items and computed from two or more financial statements of the same business enterprise on different dates. The comparative financial statements are statements of the financial position at different periods of time. The elements of financial position are shown in a
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comparative form so as to give an idea of financial position at two or more periods. Any statement prepared in a comparative form will be covered in comparative statements. The two comparative statements are 1) Comparative balance sheet 2) Comparative income statement Comparative balance sheet

The comparative balance sheet analysis is the study of the trend of the same items, group of items and computed items in two or more balance sheets of the same business enterprise on different dates. The changes in periodic balance sheet items reflect the conduct of the business. The changes can be observed by comparison of the balance sheet at the beginning and at the end of a period and these changes can help in forming an opinion about the progress of an enterprise. Comparative income statement

The income statement gives the result of the operations of a business. The comparative income statement gives an idea of the progress of a business over a period of time. The changes in absolute data in money values and percentages can be determined to analyze the profitability of the business. COMMON SIZE STATEMENT The common size statements, balance sheet and income statement, are shown as analytical percentages. The common size statements may be prepared in the following way: 1. The total assets or liabilities are taken as 100 2. The individual assets are expressed as a percentage of total assets, i.e., 100 and different liabilities are calculated in relation to total liabilities.
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Common size balance sheet

A statement in which balance sheet items are expressed as the ratio of each asset to total assets and in the ratio of each liability is expressed as a ratio of each asset to total liabilities is called common size balance sheet. Common size income statement

The items in income statement are shown as percentages of sales to show the relation of each item to sales. This relationship is helpful in evaluating operational activities of the enterprise. TREND ANALYSIS Trend analysis refers to the comparison of past data over a period of time with that of a base year. Under this method, percentage relationship that each statement item bears to the same item in the base year is calculated. Any year i.e., earliest year involved in comparison, or the latest year, or any intervening year, may be taken as the base year. As the purpose of this analysis is to highlight some important changes, the trend calculated only for some important items that can be connected with each other. The concerned item in the base year is taken to be equal to as 100 and then based on this, trend percentage for the corresponding items in other years are calculated. This method is a horizontal type of analysis of financial statements. The trend percentages are shown in comparative financial statements. Trend analysis is a useful tool for the management since it reduces large amount of absolute data in to a simple and easily readable form. By looking at the trend in a particular ratio one can see whether the ratio is increasing or decreasing or remaining constant. From this a problem is unearthed and good management is observed.

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While calculating trend percentage, care should be taken regarding the following matters: The accounting principles and practices followed should be constant throughout the period for which analysis is made. In the absence of such consistency, the comparability will be adversely affected. The base year should be carefully selected. It should be a normal year and be representative of the items shown in the statement. Trend percentage should be calculated only for items having logical relationship with one another. RATIO ANALYSIS Systematized, simplified and summarized presentation of the

information from financial statements in the form of ratios is termed as ratio analysis. A ratio is a simple arithmetical expression of the relationship of one number to another. It may be defined as the indicated quotient of two mathematical expressions. However, ratio analysis is not an end in itself. It is only a means of better understanding of financial strengths and weaknesses of a firm. Calculation of mere ratios does not serve any purpose, unless several appropriate ratios are analysed and interpreted. There are a number of ratios which can be calculated from the information given in the financial statements, but the analyst has to select the appropriate data and calculate only a few appropriate ratios from the same keeping in mind the objective of analysis. The following are the four steps involved in the ratio analysis: 1) Selection of relevant data from the financial statements depending upon the objective of the analysis. 2) Calculation of appropriate ratios from the above data. 3) Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statements or
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the ratios of some other firms or the comparison with the ratios of the industry to which the firm belongs 4) Interpretation of the ratios CASH FLOW STATEMENT It is a statement of changes in the short term financial position of the business due to inflow and outflow of cash. Such a statement enumerates net effects of the various business transactions on cash and its equivalents and takes into account receipts and disbursements of cash. A cash flow statement summarizes the causes of changes in cash position of a business enterprise between dates of two balance sheets. Cash flows exclude movements between items that constitute cash or cash equivalents because these components are part of the cash management of an enterprise rather than part of its operating, investing and financing activities. Cash management includes the investment of excess cash in cash equivalents. FUND FLOW STATEMENT The fund flow statement is a statement which shows the movement of funds and is a report of the financial operations of the business undertaking. It indicates various means by which funds were obtained during a particular period and the ways in which these funds were employed. In simple words, it is a statement of sources and application of funds. The term flow means movement and includes both inflow and outflow. The term flow of funds means transfer of economic values from one asset of equity to another. Flow of funds is said to have taken place when any transaction makes changes in the amount of funds available before happening of the transaction. If the effect of transaction results in the increase of funds, it is called source of funds and if it results in the decrease of funds, it is known as application of funds.

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LIQUIDITY RATIOS The short term creditors of a company like suppliers of goods of credit and commercial banks providing short term loans are primarily interested in knowing the companys ability to meet its current or short term obligations as and when these become due. The short term obligations of a firm can be met only when there are sufficient liquid assets. Therefore a firm must ensure that it does not suffer from lack of liquidity or capacity to pay its current obligations. If a firm fails to meet such current obligations due to lack of liquidity position, its goodwill in the market is likely to be affected beyond repair. It will result in a loss of creditors confidence in the firm and may cause even closure of the firm. Even a very high degree of liquidity is not good for a firm because such a situation represents unnecessarily excessive funds of the firm being tied up in current assets. Therefore, it is very important to have a proper balance in regard to the liquidity of the firm. The short term obligations are met by realizing amounts from current, floating or circulating assets. The current assets should either be liquid or near liquidity. These should be convertible into cash for paying obligations of short term nature. If current assets can pay off current liabilities, then the liquidity position will be satisfactory. On the other hand, if current liabilities may not be easily met out of current assets then liquidity position will be bad. The bankers, suppliers of goods and other short term creditors are interested in the liquidity of the concern. They will extend credit only if they are sure that current assets are enough to pay out the obligations. To measure the liquidity of a firm, the following ratios can be calculated:
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Current Ratio Quick Ratio Or Acid Test Ratio Or Liquid Ratio Absolute Liquid Ratio Or Cash Position Ratio
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CURRENT RATIO Current ratio may be defined as the relationship between current assets and current liabilities. This ratio, also known as working capital ratio, is a measure of general liquidity and is most widely used to make the analysis of a short term financial position or liquidity of a firm. It is calculated by dividing the total of current assets by total of current liabilities. Current ratio=current assets/current liabilities Table no: 1 Current ratio YEAR CURRENT ASSETS 2007 2008 2009 2010 64,130,350 271,903,801 312,727,723 366,844,660 CURRENT LIABILITIES 22,305,873 156,648,560 324,810,506 364,169,492 CURRENT RATIO 2.87 1.73 0.96 1.007

3 2.5 2 1.5 1 0.5 0 2007-2008 2008-2009 2009-2010 2010-2011 2.87 1.73 0.96 1 current ratio

Graph no: 2 Current Ratio

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As a convention the minimum of 2:1 is referred to as a rule of thumb or arbitrary standard of liquidity for a firm. A ratio equal to or near the rule of thumb is considered to be satisfactory. Here, we see that expect for the financial year 2009 and 2010. The Companys current assets are double the current liabilities. The years shows an unsatisfactory current assets position. The ratio of current assets over current liabilities is found to be decreasing over the period but gradually it increases in the year 2010. This is due long term liabilities they have to meet. Moreover, they have started talking long term loans from the year 2008 as their business expanded. And they are meeting their short term obligations from the current assets. The current ratio are 2.87, 1.73, 0.96, 1.00 times the current liabilities in the financial years 2007, 2008, 2009, 2010 respectively. Hence, it can be inferred that the general liquidity position the firm over a period of 4 years is not up to the mark but gradually its current assets are increasing as shown in the year in the year 2010. (Note: current liabilities are taken as 1 and current assets are given comparison to it.)

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