Presentation

on
(Summer Training Report)
A Study & Analysis of Financial statement
at
JAY-USHIN LTD.
(under the guidance)
Of
Dr. Vikas Madhukar
AMITY BUSINESS SCHOOL, MANESAR
Objectives of the study

To know the liquidity position of the company.

To know the solvency position of the company.
To know the profitability of the company.
To know the scope of improvement in the working of
company.
To know the future prospect of the company.
To know the future capacity of the company.
To determine the financial position and performance of
the company.
Significance of the study
This study helps the stockholders who are concerned
with their with their future earning and dividends.
This study helps the creditor to know the company
ability to repay it debts.
This study helps the manager’s to know the company
ability to finance the future expansion.
This study helps the investors to get the enough idea to
decide about the investment of their funds in the
company.
This study helps the company to analyze its own
performance over the period of time.
Conceptualization
Financial statement
• The financial statement are the end product of the financial
accounting process. It present financial information in concise
form.
Analysis of financial statement
• It is a process of evaluating the relationship between
componenent parts of a financial statement to obtain a better
understanding of a firm’s position and performance – Metcalf and
Titard
Types of Analysis
 Horizontal analysis
 Vertical analysis
Horizontal analysis
– It compare the financial data of a company for several year. The figures are
presented horizontally over a number of columns to analyze. The figure of
various years are compared with standard or base year.
– Tools employed
o Comparative statement

Vertical analysis
– The study of relationship of the various item in the financial statements of one
accounting period. Figures from financial statements of a year are compared
with a base selected from the same year’s statement.
– Tools employed are:-
• Common size financial statement
• Financial ratios
Introduction

 JAY-USHIN is auto ancillary manufacturing company established in

1986.
 It mainly supply or produce lock set, switches for the companies
like Honda, Hero Honda, Yamaha, Maruti Suzuki, etc.
 In this study descriptive research is used and the source of data is
mainly secondary data like company annual reports and financial
results.
 Tools are used for analyze the data are:-
– Comparative financial statement
– Common size financial statement
– Ratio analysis
Findings from ratio analysis

Current ratio meets the only satisfactory benchmark 1:1.

Liquidity ratio fails to match the industry benchmark 1:1
Average collection period is slightly decrease from past
four year.
The used of total assets is quite satisfactory to generate
sales.
From the last two year the working capital ratio is
decreased heavily.
Stock turn over ratio is decrease by 24% in past four
year.
 findings of ratio analysis cont……

Gross profit is decreased by 20% from past four year.

 Net profit ratio is heavily fluctuate from past four years
and it decrease by 20% from past four year.
long term solvency position is concern for company
because its debt equity ratio is high and increase from the
past four year.
The company is not utilizing its resources efficiently to
generate the profit.
Findings from Comparative Financial Analysis
Balance sheet
 Reserve & surplus have been
increased from last past four year
by 48%.
 Secured loan has been increased
heavily by 138%.
 Current liabilities has increased
heavily by 182%.
 Fixed asset has been increased at
constant rate.
 Current assets has been increased
heavily by 148% from last past 4
year. but cash & bank balance
increased only by 11%.
Income statement
 Income from operation has been
increased heavily by 137% from
last 3 year but in last year it only
increased by2%.
 Operational expenses has been
increased heavily by 132%.
 Finance charges increase heavily
from last 4 year by 233%.
 Other expenses like
administrative and selling
expense has been increased costly
from past 4 years.
 Trend of net profit is volatile in
nature. It only increased by 65%.
Finding from Common Size Financial Analysis
Balance sheet
 Company constantly increased its
level of reserve but in each year it
has same 10% of total liability.
 Secured loan is increased but its
percentage in total liability is also
increased.
 Current liabilities has major share in
total liabilities.
 Fixed assets increased heavily from
past four years but it has same 66%
of total assets in each year.
 The major part of current assets is
inventory in each year about 20%.
 The minor part of current assets is
cash and bank balance in each year is
about 1.5%.
Income statement
 The operational income of a company
has been increased constantly at high rate
about 100% but it share in total liability
is same in each year.
 The operational expenditure has been
increased heavily from past 4 year by
125% but its share in total expenditure is
same in each year.
 The major share in total expenditure is
operational expenses about 78%.
 The net profit of the company has been
increased heavily from past four years
about 282% but its percentage is same in
each year about 1.2%.
Suggestions & Recommendations

 Reduced the operational inefficiencies.

 Increased the efficiencies in using the resources.
 Improving the cash position of the company.
 Improving the instability in financial results.
 Company need a efficient and regular analysis of their
financial performance.
 Company has to improve its net profit by reducing cost.
 Company has to need efficient staff who work sincerely
and efficiently.
Limitations

Time is too less to study and analysis.

Analysis and interpretation are based on Secondary data.
Inter firm comparison was not possible due to non
availability of competitor data.
Some figure have been round off to the nearest rupee.
Price level changes are not considered.
The study is based on the analysis of 4 year data.
THANK YOU