INTRODUCTION TO THE TOPIC: ANALYSIS OF FINANCIAL STATEMENTS AND FINANCIAL BUDGET

The basis for the financial plannin ! anal"sis an# #ecision $a%in is the financial infor$ation! financial infor$ation is nee#e# to pre#ict! co$pare an# e&al'ate the fir$(s earnin abilit") It is also re*'ire# to ai# in econo$ic #ecision $a%in ) The financial infor$ation of the enterprise is containe# in the financial statements or accounting reports. Three basis financial state$ents of reat si nificance to o+ner! $ana e$ent an# in&estors are balance sheet! profit an# loss acco'nt an# cash flo+ state$ent! Balance sheet is a state$ent of a fir$(s assets! liabilities an# e*'it" on a specific #ate) Assets are econo$ic reso'rces that help eneratin re&en'es, liabilities are the fir$(s obli ation to cre#itors) E*'it" is the in&est$ent $a#e b" o+ners in the fir$) Both the balance sheet an# profit an# loss state$ent #o not e-plain the chan es in assets! liabilities an# o+ner(s e*'it") The state$ent of chan e in financial position is prepare# to sho+ these chan es! t+o co$$on for$s of s'ch state$ent are. !" the f'n# flo+ state$ent! an# B" the cash flo+ state$ent) The main source of fun# / +or%in capital of cash 000 is the fir$(s operations) F'n# fro$ operation are calc'late# b" a#1'stin the fi 're of net profit for none2f'n# or non0 cash ite$s s'ch as #epreciation) Depreciation is a##e# to net profits to arri&e at f'n#s fro$ operation) To #eter$ine cash fro$ operation! chan e in c'rrent assets an# c'rrent liabilities re#'ce cash +hile #ecrease in c'rrent assets an# increase in c'rrent liabilities increase cash) $un#s flo% an# Cash flo% statement are i$portant $ana erial tools for financial anal"sis) The" help the fir$ to %no+ its li*'i#it" position! capital e-pen#it're inc'rre#! #i&i#en# pai# an#

e-tent of e-ternal financin ) A pro1ecte# f'n#s or cash flo+ state$ent 'i#es the fir$ to plan the $atchin or inflo+ an# o'tflo+ of f'n# of cash) A financial ratio is a relationship bet+een t+o financial &ariables) It help o ascertain the financial con#ition of a fir$) 3atio anal"sis is a process of i#entif"in the financial stren th an# +ea%nesses of the fir$) This $a" be acco$plishe# either thro' h a tren# anal"sis of the fir$(s ratios o&er a perio# of ti$e or thro' h a co$parison of the fir$(s ratios +ith its nearest co$petitors an# +ith the in#'str" a&era e) The fo'r $ost i$portant financial #i$ensions! +hich a fir$ +o'l# li%e to anal"se! are. li*'i#it"! le&era e! acti&it" an# profitabilit")

$IN!NCI!& BUD'ET is pre#eter$ine# state$ent of $ana e$ent polic"

#'rin a i&en perio# +hich pro&i#es a stan#ar# for co$parison +ith the res'lts act'all" achie&e#) Define as a 4co$prehensi&e an# coor#inate# plan! e-presse# in financial ter$s! for the operations an# reso'rces of an enterprise for so$e specifie# perio# in the f't're)5 Accor#in to this #efinition! the essential ele$ent of a b'# et are0 678 6:8 6;8 6<8 6=8 6>8 9lan Operations an# reso'rces Financial ter$s Specifie# f't're perio# Co$prehensi&eness an# Coor#ination

INTRODUCTION TO THE CO(P!N)

UltraTech Cement &imite#

UltraTech cement &imite#! ?hars' '#a Ce$ent @or%s +hich is a part of !#it*a Birla 'roup +as pre&io'sl" 'n#er the &+T ro'p of co$panies) The Ce$ent #i&ision of LAT +as #e$er e# in :BB< after 'rasim Cement &t#. $a#e the ;BC open offer for e*'it" shares! ainin control o&er the ne+ co$pan"! christene# UltraTech) Besi#es the lon ter$ strate ic &al'e in the +a%e of risin #e$an# for ce$ent! +ith the ro+th of ho'sin an# infrastr'ct're sectors in the co'ntr"! the ac*'isition brin s si nificant s"ner " ains to the parent co$pan") UltraTech ce$ent Li$ite#! a Grasi$ s'bsi#iar" has an ann'al capacit" of 7D $illion tons) It $an'fact'res an# $ar%ets Or#inar" 9ortlan# ce$ent! 9ortlan# Blast F'rnace Sla Ce$ent an# 9ortlan# 9oEEolana ce$ent! as a part of the ei ht bi est ce$ent $an'fact'rer of the +orl#) Ultratech has fi&e inte rate# plants! fi&e rin#in 'nits an# three ter$inals0t+o in In#ia an# one in Sri Lan%a) These incl'#e an inte rate# plant an# t+o rin#in 'nits of the erst+hile Nar$a#a Ce$ent Li$ite#! a s'bsi#iar" +hich has been a$al a$ate# +ith the co$pan" in Ma" :BB>) Ultratech is the co'ntr"(s lar est e-porter of ce$ent clin%er) The co$pan" e-ports o&er :)= $illion tons per ann'$! +hich is abo't ;BC of the co'ntr"(s total e-ports) The e-port $ar%ets span co'ntries aro'n# the In#ian Ocean! Africa! E'rope an# the Mi##le East)

Incorporate# on :<th A' 'st :BBB as LAT ce$ent Li$ite#)

Ce$ent b'siness of LAT Lt#) #e$er e# an# &este# in co$pan" in :BB<) Grasi$ ac*'ire# $ana e$ent control in ?'l" :BB<) To ether +ith Grasi$ the lar est ce$ent pro#'cer in In#ia) Na$e chan e# to UltraTech Ce$ent Li$ite# +ith effect fro$ 7<th October :BB<)

,COPE O$ THE ,TUD)

Scope of the st'#" is li$ite# 'p to the Ultratech 9&t) Lt#) This st'#" is 'sef'l for internal $ana e$ent! o+ners! in&estors an# borro+ers) Internal $ana e$ent incl'#es the Chair$an! Director! C)F)O) an# other senior $ana er of #ifferent #epart$ent)

U,E$U&NE,, + I(PORT!NCE O$ ,TUD)

Financial state$ents contain financial infor$ation) The" are prepare# for e-ternal reportin ) Section :7B of the Co$panies Act! 7F=> re*'ires the boar# of #irectors to la" at e&er" ann'al) There are $an" 'sers of financial state$ents) The e-ternal users are a) b) c) #) e) f) ) present an# potential in&estors e$plo"ees len#ers s'ppliers an# other tra#e cre#itors C'sto$ers o&ern$ent an# its a encies an# p'blic! Different e-ternal 'sers are intereste# in the co$pan" #ifferentl") Go+e&er &ario's 'sers are $ostl" interest to 'n#erstan# three important financial characteristics. namel*. sol/enc*. li0ui#it*. an# profita1ilit*. Three i$portant financial characteristics in +hich al$ost all 'ser / ro'ps ha&e eneral interest! of co'rse! for #ifferent reasons! are sol&enc"! li*'i#it" an# profitabilit") ,ol/enc* in#icates abilit" of the reportin entit" to $eet its obli ations in the lon r'n an# to contin'e operations at least at the sa$e scale in the foreseeable f't're) &i0ui#it* in#icates abilit" of the reportin entit" to $eet all its c'rrent obli ations as an# the" fall #'e) In other +or#s! li*'i#it" i$plies short 0 ter$ sol&enc") Profita1ilit* in#icates earnin capabilit" of the reportin entit" either in relation to total re&en'e or assets e$plo"e# or capital e$plo"e#)

$un# flo% anal*sis helps in 'n#erstan#in

the le&el of +or%in

capital an# its

$o&e$ent) It helps to i#entif" the &ario's so'rces an# applications) Cash flo% is cr'cial to b'siness #ecisions) Cash is in&este# in b'siness an# the rationalit" of s'ch in&est$ents is e&al'ate# ta%in into acco'nt the f't're cash flo+s it is e-pecte# to enerate) $inancial 1u#get is an i$portant co$ponent of o&erall financial $ana e$ent) Mana e$ent of +or%in profitabilit" of b'siness) capital li%e lon 0ter$ financial #ecisions affects the ris% an#

RE,E!RCH (ETHODO&O'):
3esearch in co$$on place refers to search for %no+le# e) Infect! research is an art of scientific in&esti ation or it can be #efine# as s"ste$atiEe# effort to ain Hno+le# e)

PROB&E( ,T!TE(ENT:
Anal"sis of Financial State$ents an# @or%in Capital)

R!TION!&:
As the o&erall responsibilit" or the fir$ is to see that reso'rces that reso'rces of the fir$ are 'se# $ost effecti&el" an# efficientl"! an# that the fir$(s financial con#ition so'n# or not! the fir$ Ultratech 9&t) Lt#) is intereste# in each an# e&er" aspect of financial anal"sis therefore the pro1ect has been to researcher b" the co$pan" to #o st'#" b" 'sin #ifferent anal"sis)

OB2ECTI3E, O$ THE ,TUD):

To st'#" Co$pan"(s Balance sheet an# 9rofit A Loss state$ent for t+o "ears an# on the basis of that calc'late co$$on siEe an# co$parati&e Balance sheet an# 9rofit A Loss state$ent) To calc'late those ratios fro$ +hich profitabilit"! efficienc"! t'rno&er an# li*'i#it" can be 1'# e#) To calc'late the +or%in capital on the basis of f'n# flo+ an# cash flo+ state$ents) To anal"sis A e&al'ate the areas +here i$pro&e$ent can be #one an# to s' strate ies to increase sales an# $a-i$iEe profits) est the

RE,E!RCH TOO&,:
Obser&ation $etho# Inter&ie+ $etho# Acco'ntin A financial Tools

D!T! ,OURCE,:
o o PRI(!R) D!T!: Obser&ation Metho# Inter&ie+ Metho#

o o o

,ECOND!R) D!T!: Acco'nts boo%s an# recor#s of the co$pan") Financial $ana e$ent boo%s) Internet

&I(IT!TION, O$ THE ,TUD):

Ti$e constraints0As the sche#'les of the $ana ers +ere too hectic the" +ere 'nable to #e&ote a#e*'ate ti$e) The ti$e li$it i&en for the pro1ect +as not s'fficient for s'ch an e-tensi&e st'#") As the co$pan" is a pri&ate co$pan" an# is thin%in to o p'blic! the financial #etails +ere not #isclose# +hich restricte# the scope of the pro1ect) Beca'se of the non #irect co$petitors in the $ar%et! the co$parati&e st'#" of t+o or $ore fir$s is not to #one) Tren#s anal"sis is not #one beca'se of onl" t+o "ear financial #ata are a&ailable)

&I,T O$ BIB&IO'R!P) !ND 4EB&IO'R!PH)

IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII SJ 7) :) ;) <) =) >) Title Manna e$ent Acco'ntin an# Financial Mana e$ent b" 3 H Mittel Financial Mana e$ent b" I M 9an#e" F'n#a$entals of Mana e$ent Acco'ntin b" T 9 Ghosh +++)'ltratech ce$ent +++)b'siness0stan#ar#)co$