Financial Statement AnalysisA case study of A.V. Birla Cement Ltd.

INTRODUCTION About Financial Statement

Financial Statement provide Summary of Accounts of Business enterprise, the balance sheet reflecting the assets, liabilities and capital as on certain date and the income statement showing the results of operations during certain period

Definition
Analysis of financial statement is the systematic numerical calculations of the relationship between one fact with the other to measure the profitability, operational, efficiency, solvency and the growth potential of Business

OBJECTIVE OF STUDY:
To evaluate the potential & prospects of company s Business based on 15% growth prospects. To evaluate the Industrial prospects with respect to Indore s Infrastructure perspective. To prepare information budget about various activities of enterprise that results from the profit oriented activities. To suggest the next possible budgetary and planning information related to the financial statements which are relevant to the others. in Crores

Profit and Loss Account for the year ended March 31, 2010
Rs. in Crores Schedules INCOME Gross Sales Less: Excise Duty Net Sales Interest and Dividend Income Other Income Increase / (Decrease) in Stocks Total Year2010 7,729.13 679.45 7,049.68 56.21 66.50 (2.27) 7,170.12 expected2011 8888.49 781.36 8107.13 64.64 76.47 (2.61) 8245.63

EXPENDITURE Raw Materials Consumed Manufacturing Expenses Purchase of Finished Products Payments to and Provisions for Employees Selling, Distribution, Administration any Other Expenses Interest and Finance Charge Depreciation and Obsolescence

16 17 18 19 20

960.61 2,152.11 63.74 250.62 1,653.30 117.52 388.08 5,585.98 (4.02) 5,581.96 1,588.16

1104.70 2474.92 73.30 288.20 1901.29 135.14 446.20 6423.75 4.62 6419.13 1826.38

Less: Captive Consumption of Cement {Net of Excise DutyRs. 3.46 Crores Total Expenditure Profit Before Tax Expenses Income Tax Expenses Provision for Current Tax {including provision for Wealth Tax Rs. 0.50 Crore) Deferred Tax Provision for Fringe Benefit Tax Profit After Tax

387.12 107.80 1,093.24

445.18 123.97 1257.23

Balance brought forward from Previous Year Profit Available for Appropriation Appropriations Proposed Dividend Corporate Dividend Tax Debenture Redemption Reserve General Reserve Balance carried to Balance Sheet Basic Earnings Per Equity Share (in Rs.) Diluted Earnings Per Equity Share (in Rs.)

2,438.40 3,531.64 74.69 12.41 (34.83) 750.00 2,729.37 3,531.64 87.82 87.79

2804.16 4061.39* 85.89 14.27 (40.05) 800.00 3138.77 3998.88 100.99 100.95

 RESEARCH & METHODOLOGY THE STUDY The Study of Financial Statement of A. V. Birla cement, Neemuch. THE SAMPLE The sample is taken from finance& Accounting department of A.V.Birla cement, Neemuch. THE TOOLS Tools for data collection Primary data The Primary data used in research is: Balance Sheet Profit &Loss A/c Prospectus of the company Annual general report

 Secondary Data Secondary data is used for analysis. Research is based on financial data which will be collected through secondary source like: Website Books Journals Magazines Tools for data analysis I am using different ratio for data analysis like: Liquidity Ratio, Activity Ratio, Leverage Ratio, Profitability Ratio. Comparative Financial Statement

SCOPE AND LIMITATION

SCOPE: There are various managerial aspect of Birla cement, Neemuch such as human resources management, marketing management are available for study. Considering the requirement of the course and signification of subject only aspect of financial statement analysis of the organization is selected for the study

 LIMITATIONS: The project report will be prepared the postgraduate level course of the university; study is carried out according to that level only. Time is major constraint

Conclusion: Economic growth is a necessity for progress. It heralds greater opportunity, social mobility and equality of living standards. Robust infrastructure lays the platform for economic growth, linking producers and markets, lowering transaction costs and providing access to important services like education and healthcare. Vikram Cement serves purpose by meeting the varied requirements of customers for different types of Cement and Concrete in an efficient and eco-friendly manner. This represents a modest contribution to the nation's progress. The business has all its manufacturing locations in India. All plants are following the good business policies & they also fulfill their CSR responsibility. All units ensure consistent quality work and employ state-of-the-art technology. All the cement units are certified with ISO 9001 for Quality Systems, ISO 14001 for Environment Management Systems. Financial Statement are prepared primarily for decision making . They play important role in setting the framework for managerial decision.

REFERENCES:
Jain, P K& Khan, M Y, Financial Management& Cost Accounting (2002), Tata McGraw-Hill Publishing Ltd, New Delhi. Jain, Nirmal Financial Management (2010), Nakoda Publisher , Indore. Visited sites: www.a.v.birla.com (24/04/2010) www.grasim.com (26/04/2011) www.wikipedia.com (06/05/2011)

Submitted by: Akhilesh Pandey MBA IV Sem Roll No.- 09190556