1

A STUDY ON RATIO ANALYSIS WITH REFERENCE TO JOCIL LIMITED

A project report Submitted in partial fulfillment of the

Requirement for the award of degree Of

MASTER OF BUSINESS ADMINISTRATION




P.VEERLANKAIAH

Regd. No:Y13BU03069

Under the guidance of

Mrs. B.RATNAVALI
M.B.A.


TELLAKULA JALAYYA POLISETTY SOMUSUNDARAM COLLEGE
GUNTUR




DEPARTMENT OF BUSINESS ADMINISTRATION


T.J.P.S COLLEGE(P G COURSES)

GUNTUR






2








TELLAKULA JALAYYA POLISETTY SOMUSUNDARAM COLLEGE

GUNTUR




DEPARTMENT OF BUSINESS ADMINISTRATION

CERTIFICATE

This is to certify that is the bonafide record of the project entitled
A STUDY ON RATIO ANALYSIS WITH REFERENCE TO JOCIL LIMITED,

work done and submitted by MR.P.VEERLANKAIAH (Regd. No: Y13BU03069) in

Partial fulfillment of then requirements for the award of the degree of MASTER OF

BUSINESS ADMINISTRATION. It is a record of independent research work

undertaken by him, under my supervision and guidance during the academic year

2012-2014.




Head of the Department Project Guide

S. ANITHADEVI Mrs.B. RATNAVALI

MBA
3


ACKNOWLEDGEMENTS


It gives me immense pleasure to acknowledge all those who have extended their
helping hand in bringing out this project.

I owe my sincere thanks to Dr.C.ANIL KUMAR, Principal, T.J.P.S.
College (P.G. Courses), for granting me permission to do this project.
I thank Dr. G. SATYANARAYANA, Director and professor,
Department of Management Studies, for allocating me this project.

I feel happy to thank Dr.S.ANITHA DEVI, Head of the
Department, Department of Management Studies, for providing me her valuable
guidance and expertise in successful completion of this project.

I express my sincere gratitude to B.RATNAVLI for her kind
cooperation and guidance in completing my project work.

I express my deep sense of gratitude to MR.LAKSHMANA Asst
MANAGER , JOCIL LIMITED DOKIPARRU who has been my guide (external)
and helped me throughout the project.

Lastly, I thank all my family members & my friends for their valuable
support regarding the completion of my project work.

MR.P.VEERLANKAIAH
(Y13BU03069)
4








DECLARATION


I declare that this project entitled A STUDY ON RATIO ANALYSIS

OF WITH REFERENCE TO JOCIL LIMITE . It is an original and

Benefited work under taken by me in partial fulfillment of the requirement for the award

of degree of MASTER OF BUSINESS ADMINISTRATION which is submitted to

ACHARYA NAGARJUNA UNIVERSITY GUNTUR, under the guidance of

Miss. .RATNAVALI MBA It has not been copied from any earlier

reports. The empirical conclusions and findings of this report are based on this and the

information collected by me.






Place: GUNTUR

Date:

(P.VEERLANKAIAH)
(Y13BUO3O69)








5









TABLE OF CONTENTS



CHAPTER
NO


TITLE

PGNO


I

II

III


IV

V



INTRODUCTION

OBJECTIVES & METHODOLOGY

INDUSTRY PROFILE&COMPANY
PROFILE

RATIO ANALYSIS IN JOCIL LTD

SUMMARY,FINDINGS & SUGGESTIONS

BIBLIOGRAPHY
ANNEXURE




1-10



11-13


14-35



36-63


64-67



6




CHAPTER I
INTRODUCTION


























7




INTRODUTION
Introduction

Finance is defined as the provision money at the time which is required even
enterprises whether big (or) small, needs finance to carry on its operations and to achieve its
target. Finance is life blood of any enterprises. Finance is one of the basic foundations of all
kinds of economic activities

FINANCIAL ANALYSIS:

The focus of financial analysis is on key figures in the financial statements and the
significant relationship that exists between them. The analysis of financial statements is a
process of evaluating the relationship between component parts of financial statements to
obtain a better understanding of the firms position and performance. The first task of the
financial analyst is to select the information relevant to the decision under consideration from
the total information contained in the financial statement. The final step interpretation and
drawing of inferences and conclusions in brief, financial analysis is the process of selection,
relation and evaluation.


Finance analysis is of immense use to a finance manager as it helps in carrying out
planning and control functions while preparing a functional plan for the company. Financial
manager must know the impact of financial decision on financial conditions and profitability
of the firm.
It concerned with the duties of the financial managers in the business firm. Financial
managers actively manages actively manage the financial affairs of any type of business
namely financial and non financial private and public large and small
Financial management divided in to three types
Investment decision
Finance decision
Dividend decision

8
MEANING OF FINANCIAL MANAGEMENT

Finance management is the entire gamut of managerial efforts devoted to
a management of finance and both its source of enterprise.

s c kuchhal _ finance management deals with procurement of funds
and their effective utilization in the business

Solomon _ finance management is concerned with the efficient use of
important economic resources, namely capital funds
































9
IMPORTANCE OF FINANCIAL MANAGEMENT

The importance of finance management cannot be over emphasized it every organization
where funds are involved, sound financial management is necessary.

As coll in books has remarked, but production management and had sales management
have slain in hundreds, but fault finance management as slain in thousands.

Sound finance management is essential in both profit and non profit organizations .It helps in
monitoring the effective developments of funds in fixed assets and in working capital financial
management also helps in ascertaining how long the company would perform in feature. It helps in
indicating whether the firm will generate enough funds to meet it various obligations. It also helps in
profit planning, capital spending, measuring cost, controlling inventory accounts; receivables etc.
financial management essentially helps in optimizing the output from a given input in funds.

























10




CHAPTER II
OBJECTIVES
&
METHODOLOGY










11


NEED FOR THE STUDY

Finance is a body of facts, principles and theories dealing with raising and using f
money by individuals, business and government. Financial management is that management
activity which is concerned with the planning and controlling of the firms financial
resources.

Financial reports like annual reports etc. we one of important resources of information
for judging the operational and financial performance of business. Ratio analysis is the basis
for scientific and quick decision making process. Ratios provide quick insight in to the
strengths and weakness of the firm.

Ratio analysis is a powerful tool of financial analysis. In financial analysis, a ratio is
used as a bench mark for evaluating the financial position and performance of a firm.

INTRODUTION OF RATIO ANALYSIS:

Financial ratios are useful to provide a snapshot of a companys financial statement.
Ratios are calculated from current year numbers and then are compared to previous year,
other companies, the industry, or even the economy to judge the performance of the
company. Ratio analysis is predominately used by proponents of fundamental analysis.

Financial ratios give out a detail report about with reference to firms performance
and financial situation. These are exercised to examine the trend and for comparing the firms
financial status with the other firms. Thus by such means, it will not be difficult to come
across the positional problems.

Ratio analysis is a tool of financial analysis. It is described as a relationship between
two or more things to evaluate the performance of a company. Traditional financial
statements provide absolute accounting figures that do not provide the financial position and
performance of a company.


12

MEANING OF RATIO ANALYSIS

Ratio analysis is a tool of financial analysis. It is described as a relationship between
two or more things to evaluate the performance of a company.

Traditional financial statements provide absolute accounting figures that do not
provide the financial position and performance of a company. Ratio analysis helps investors,
creditors, management and general public to evaluate the financial position of a company. It
is a numerical relationship between two variables. It depicts a quantified index for qualitative
judgments to the made about the companys performance.

Ratio analysis helps in comparing related information. Instead of absolute figures it
depicts data in relative figures. The figures can be expressed as a percentage or as ratios. The
ratio can be analyzed by following.

1. Trend
2. By inter-firm comparison
3. By comparing figures at a single point of time
4. By comparison with certain standards

Nature of ratio analysis

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as the
indicated quotient of two mathematical expressions and as the relationship between two or
more things. In financial analysis, a ratio is used as a benchmark for evaluating the financial
position and performance of a firm. The absolute accounting figures reported in the financial
statements do not provide a meaning full understanding of the performance and financial
position of a firm. An accounting figure conveys meaning when it is related to some other
relevant information.


Ratios help to summarize large quantities of financial data and to make qualitative
judgment about the firms financial performance. The point to note is that a ratio reflecting a
13
quantitative relationship helps to forma qualitative judgment. Such is the nature of all
financial ratios.

Advantages of ratio analysis

Ratio analysis is very useful for financial statement analysis. The following
advantages are there to a company for analyzing its statements through the help of ratios.

1. It is easy to calculate and also easy to understand. Most of the ratios do not require
any specialized training and are understood by everybody because the formulae
used are simple.

2. Ratios help in evaluating a firms performance by measuring the current ratios with
those of the past.

3. Ratio analysis helps in making an assessment of the future. It determines the past
trends from financial statements.

4. Ratios are used for comparing the performance of one firm with another. It can also
be used for comparison with industry averages.

5. A company has to continuously analyze whether its liquidity position is satisfactory.

6. Ratio analysis assesses the operational efficiency of a company and is able to detect
the areas which require more attention.

7. Commercial organizations have the objectives running an enterprise successfully.

8. Ratio analysis follows internal and external standards. Internal standards are made
by comparing the firm own pas performance and relating it to current and future
planning.

9. The external standards are made when a companys performances is compared with
similar data of other companies or industry.

14


Limitations of ratio analysis

A ratio analysis is a useful tool in business. However, there are some standards.
However, these standards become problematic due to the following reasons.

Standards of comparison are difficult due to differences on the basis of valuation of
inventory of each company. Some companies value their inventory according to first in first
out method other companies may use the evaluation of average cost. There are differences in
technique of amortization of intangible assets like patents and goodwill in will bring a
difference in results.

Depreciation methods are often different. Some companies prefer straight line method
of depreciation because of its simple technique. Other companies use written down value
method. In India it is getting standardized towards written down value method.



TYPES OF RATIOS:

Liquidity ratios
Leverage ratio
Activity ratio
Profitability ratio










15


OBJECTIVES AND METHODOLOGY


Ratios help to summarizes large quantities of financial data and to make qualitative
judgment about the firms financial performance.
Objectives of the study:-
Objectives of the study is divided into primary and secondary objectives

Primary objective of the study is the to analyze financial performance of the
JOCIL limited.

In order to achieve the above objective and to make the study more purposeful, the secondary
objective of the study are as follows.

To measure the liquidity position of the company.

To find out the profitability of the organization.

To know the solvency position of the company

To compare the present performance of the company with that of the past years.

To evaluate the overall performance of JOCIL ltd. Through Ratio analysis.

To measure the financial risk through leverage ratios.








16


METHODS OF DATA COLLECTION

This evolution primarily requires factual information and so secondary data has
been used. the data collected from companies annual reports and financial results. A
part from these, interviews have been conducted with connected persons in relevant
departments of the company there information as also been used.

SECONDARY DATA

The secondary is collected from published annual reports of the company. Like profit
and loss account and balance sheets schedules. The data has been collected through
books, journals, and websites.


TOOLS OF FINANCIAL ANALYSIS:

Funds flow statement
Cash flow statement
Trend analysis
Ratio analysis
Comparative statement analysis
Common size statement analysis














17


IMPORTANCE OF THE STUDY


Financial analysis depends primarily on financial statements to diagnose financial
performance. It appears that are three principal reasons


To assess and evaluate the earning capacity of the firm
To find out the financial stability and soundness of the firm
To determine the possibility of the firm for future growth
To assess and evaluate the fixed assets, stock of the firm

FINANCIAL RATIO ANALYSIS


Financial ratios are useful measures to provide a snapshot of companies financial
position. A tool used by individual to conduct a quantitative analysis of information in a
companys financial statement. Ratios are calculated current year figures are then compared
to previous years other companies, the industry, or even the economy to judge the
performance of the company. The ratio analysis is predominately used by proponents of
fundamentals analysis. Financial ratios give out a detail report with reference to performance
and financial situations financial positions are exercise to examine the trend for comparing
the firms financial status with the other firms. Thus by such means, it will not be difficult to
come across the potential problem

ADVANTAGES OF RATIO ANALYSIS


Ratio analysis is an important age-old technique of financial analysis. The
following are some of advantage of ratio analysis.


1. Simplifies financial statements
It simplifies the comprehension of financial statements. ratios tell the whole story of
changes in the financial condition of business.


2. Facilities intra-firm comparison
It provides data for intra-firm comparison. Ratios highlight the associated with
successful and un successful firm. They also reveal strong firm weak firms. Overvalued and
undervalued firms.
18


3. Help in planning

It helps in planning and forecasting. Ratio can assist management, in its basic
functions of forecasting. Planning, co-ordination, control communication.


4. Make inter-firm comparison possible

Ratio analysis makes possible comparison of the performance of different divisions of
the firm. Ratios are helpful in deciding about there efficiency or otherwise in the past and
likely performance in future.


5. Help in investment decision

It helps in investment decision in the case of investors and lending decision in the
case of bankers etc..























19


Limitations of the study

Any study though it is widely acceptable and is of much use suffers from certain
limitations. The limitations of this study are as follows

Different companies use different accounting standards for inventory,
depreciation, etc... Therefore comparing their financial ratios can be misleading
financial statements analysis.

Ratio analysis is based on accounting not economic data

The study period is restricted to two months and a full
Fledged investigation can not be carried out in this Period

The analysis and interpretations done with the data available

The study is restricted to one tool of Financial Analysis i.e., ratio analysis

We confined the calculation of ratio only to limited number because of time constraint















20



















CHAPTER III
INDUSTRY
&
COMPANY PROFILE










21

CHEMICAL INDUSTRY

The total volume of the chemical industry is us$ 25 billion fertilizers. It contributes
13% of GDP. It is one of fastest growing sectors of economy. Chemical industry in India is
fragmented and dispersed multi product and multi faceted chemicals sold directly to large
customers and through distribution channels distribution channels mostly consist of stockiest
and dealers spread all over India addressing small segments and retail market.


Major steps in the industry

Chemical industry is highly heterogeneous with following major sectors:

Petrochemicals
Inorganic chemicals
Organic chemicals
Fine and specialties
Agro chemicals



PETRO CHEMICALS

The major category in the chemicals
One of the fastest sectors at 13% p.a.
Major players are RELIANCE, IPCL, NOCIL, HALDIA, and GAIL


IN ORGANIC CHCHEMICALS

Us $ 2.5 billion industry
Covers basic products like caustic, chlorine, sulphuric acid etc.
Inorganic chemicals mostly used in detergents, glass, soaps, fertilizer, alkalis
Competition from imports is on rise.
22



ORGANIC CHEMICALS

1 billion dollar industry
Covers a wide range of chemicals
Units concentrated mostly in western India

FINE AND SPECIALITY CHEMICALS

Low volume, high price/margin chemicals.
Fragmented with large number of players.
Market around us $ 80 million p.a.
Major end user segment-textile, leather, paper, detergent, rubber, paints, polyester, oil
and gas etc..

AGRO CHEMICALS
In India a largest agriculture economy which is the major user. Average India
consumption is very low (1/20 of world average)

Market size 100000mt (in terms of technical grade)
US$800 million
Growth 10%p.a.
Consumption varies depending on crop and region
Cash crop like sugarcane, tobacco etc.. Is the major consumer of pesticides (above
60%)
Two types of products-
Technical-40nos Formulators-aove500nos
23

CHEMICAL INDUSTRY IN INDIA

India ranks 12
th
in the word for production of chemicals. Indias chemical industry
contributes about 3% to the nations GDP. The industry has a turnover of about US$ 30
billion, and accounts for about 14% in the general index of industrial production (IIP) and
17.5% in the manufacturing sector. It also accounts for about 13.14%of total exports and
8.9% of total imports of the country. The industry is mostly concentrated in western India,
which accounts for 45-50%^ of the total industry size.

OPPORTUNITIES

Success stories in dyes and agro-chemicals have boosted the confidence to take on
global competition.

The markets in developed countries are opening up and India can take advantage of
this, a large no. of products are going off patent.

India has the capacity for major value addition, being close to Middle East, this is a
relatively cheaper and abundant source for petrochemicals feedstock.


SWOT ANALYSIS OF CHEMICAL INDUSTRY IN INDIA
STRENGTH:

A diversified manufacturing base

Vibrant downstream industries in different segments competitive core industries
capability to produce world class end user products

Strong persons in some exports market segment

Large domestic market.

24
Raw material component sources with in the control.

Good R&D base and quality human resource

THREATS

Quantitative restrictions for imports have been removed already

Most of chemicals are now in the open general list (OGL) of import

Tariff level in India for most chemicals is significantly higher than in other countries
manufacturing the chemicals.


WEAKNESS

Cost of power: very high quality and poor quality of power

Cost of finance: chemical industry is high capital intensive, cost of finance in India
is very high

Infrastructure: theses facilities are not world class

Legacy of policy industrialization

Technology: low investment in R&D to be able to sell value-added product and
compete in developed countries is absent

Cost disadvantages: location disadvantages, such as extra transport cost raw materials
as well as finished products

Scale of production: plant size is not comparable to world scale operations



25


COMPETITIVE ADVANTAGE OF INDIA

Large resource of scientific and technical man power .
Large domestic market for various sector of chemicals.
Large cost line and abundant availability of salt.


SOAP INDUSTRY

The Rs.45 billion Indian soaps and detergents industry has been expiring low growth
and intense competition in urban areas. The physical market for detergents at about 2.7
million tones in one of the largest markets in the world. It categorized popular economy,
premium and super premium. In India, the per capita consumption of detergents is only 1.6
kg. Per annum as against over 16 kg. In Western Europe consumption soaps 1.4 kg which is
got from 93-94 report. In Taiwan 6.2kg. Thailand 32kg per annum. In Indonesia 2kg and in
Korea 7.3kg per annum per capital. Malaysia 3.7 kg per annum per capita, Japan 8.9 kg per
annum per capita.

The per capita consumption of toilet soap in India is at present whole fully low as
compared to many developing countries. The industry has made rapid progress after lifting of
the price control. The overall growth rate of the industry in the recent years has been in the
neighborhood of 15% per annum. .
The overall consumption of toilet soaps in the country has been increasing at the rate
6.7% and at more than 12% per annum in rural areas.

The soap market is divided into sub-popular and popular premium on the basis of
price and fatty matter. But for the purpose of market study, the market is categorized into
popular and premium. The popular segment constitutes about 87% while the premium soaps
make up the remaining 13%.
26

Segmentation of The Total Toilet Soaps:
Price range Soap Segment
Rs.6-8(for 75 grams) Sub-popular

Rs.8-12(for 75 grams) Popular
Rs.12+ (for 75 grams) Premium



Market Share of Premium, Popular, Sub Popular.

Segment Market Share(%) Growth Rate(%)
Premium

24 3
Popular 45 1
Sub- Popular 31 15



27
The above table shows the volume of growth rate of toilets soaps at different
segments. Premium, which is in the range of Rs.12 and above has price range between Rs.0.8
has 1% growth and sub-popular has a growth rate of 15% which is the range of between Rs.8-
12. Personal Wash market in India is very high. Everyone is using toilet

FATTY ACID INDUSTRY

Fatty Acids, as the name itself indicates, are in the organic acids derived from fats
and oils. Fats and oils are glycosides of Fatty Acids. Fatty acids are manufactured by
hydrolysis of fats and oils, which is popularly known as Fat Splitting. Glycerin is obtained as
a byproduct of the fatty acid. Fatty Acids are having diversified application in various fields
of industries like rubber manufacturing Industries, tries, plastic, cosmetics and
pharmaceuticals.

Fatty Acids are having diversified application in various fields of industries like
textile, type, plastic, surfactants, rubber, cosmetics, foods and pharmaceuticals both as it is
and as the derivatives. Present manufacture of Fatty Acids is dispersed all over the country
with units in various states.

PRESENT STATUS OF INDUSTRY
Production of fatty acid in India was insufficient Prior to the period of Second World
War.
Production on a small scale was initially started in the mid-forties that too with
obsolete equipment. The qualities of fatty acid coming out from these units are far from
desirable and recovery of Glycerin was inefficient. It is in 1953, the first high pressure Fat
splitting plant in our country went into stream in Bombay. It started production as a batch
operating Unit, which was soon converted to a semi-continuous one. The industry, which
started taking shape in the early fifties, was established on a firm

28
In the year 1954, the installed capacity of Fatty Acid plants was below 4500 tonnes
per annum. The annual production from the four operating Units at time was below 1000
tones per annum. Since then the fatty Acid Industry in India has made rapid progress during
the next two decades.

A BRIEF NOTE ON FATTY ACID INDUSTRY IN ANDHRA PRADESH
The fatty Acid industry is dependent on availability of the oils & oil seeds for
extraction and further processing, as Mutton Tallow is banned in India. The Industry found
that Rice Bran Oil (R .B. Oil) in one such source, which is cheaper than other oils. Thus,
most of the fatty Acid / Stearic Acid manufactures have chosen rice bran oil as their raw
material and the rice bran oils extraction units found placement near the raw Material source
i.e. Rice Bran even though the customers are well spread all over the Country.
The consumption pattern of Rice Bran Oil depends on the level of free Fatty Acid
Content available for industrial grade varies from time to time as the Rice Bran availability is
seasonal, having direct relation to the rice cropping and harvesting schedules.
Therefore, fluctuations are observed in the Rice Bran Oil prices, which are almost
fixed in their pattern. However, at times due to climate conditions and temperature variations,
the status of the Rice Bran oil changes form edible grade and vice-versa.

In India, as explained already Rice Bran Oil extraction is mostly available in the
major rice growing states of Andhra Pradesh and Punjab.

STEARIC ACID INDUSTRY:
+
In the Stearic acid different grades are produced with standard specification for
different industrial consumers.
The following are the different grades of Stearic acids consumed by different industries
in manufacturing their own Industrial products.



29
VARIOUS GRADES OF STEARIC ACIDS

JOTEX GRADE,
JOTEX SPECIAL GRADE
Used in drugs, Pharmaceuticals
Cosmetics, chemicals and plastics
JOSTRIC SPECIAL GRADE Chemicals, calcium carbonate
JOSTRIC GRADE Metal polish, Grease, Metallic Polish,PVC
Stabilizers and chemicals

JOCIL-9

Metal polish, Grease, Metallic polish PVC
stabilizers and chemicals
JOSTRIC-11 PVC
JOMEL Rubber, Cement and Paint,
RUBBER GRADE Rubber, Metallic polish
JOCIL Rubber, Metallic Polish, Grease.










30

COMSUMPTION PATTERN OF SREARIC IN DIFFERENT
INDUSTRIES
SI.NO
Rate
(%)

Name of the industry

Quantity

(M.T)

Industry

Share(%)

Growth
1 Rubber-type 13000 17 5
2 Rubber-Non tyre 12000 16 36
3 Stearates/Stabilizers 15000 24 7
4 PVC/polymers 9000 12 65
5 Cement paints 3000 4 69
6 Chemical auxiliaries 6000 8 5
7 Calcium carbonate 3000 4 8
8 Food/pharmacy 1000 1 30
9 Metal polishes 3000 4 5
10 Lubricants/greases 3000 4 8
11 Cosmetics 3000 4 30
12 Others 2000 3 5






31


PRESENT MARKET SHARE OF STEARIC ACID MANUFACTURES WISE

NAME OF THE
MANUFACTURER
QUANTITY
(MT)
MARKET
SHARE (%)
REGION
Godrej Soaps Ltd.,
VVF Limited
Jocil Limited
FFF Limited
Nahar Agro
Raj Agro
OCL & Thapar
Wipro Limited
Siris Agro Limited
Soda Agro Limited
Rayalaseema Alkalies Ltd.
Swastik & Oieo Chemicals
Imports
17000
9000
10000
6000
5000
5000
2000
2000
5000
2000
5000

7000
1000
22%
12%
13%
8%
7%
7%
3%
3%
7%
3%
7%

9%
1%
North
North
A.P
A.P
North
North
North
Karnataka
A.P
A.P
A.P

A.P







32





COMPANY PROFILE

The company was incorporated on 20
th
February, 1978 as per the certificate of
incorporation no.2260 granted by the register of companies, A.P., Hyderabad under the name
and style of ANDHRA PRADESH OIL AND CHEMICAL INDUSTRIES LIMITED. The
unit was promoted as public limited company in joint venture by the Andhra Pradesh
industrial development corporation limited, Hyderabad and jayalakshmi cotton and oil
products private limited; a company belongs to jayalakshmi group.

During the year 1982, the share stock of APIDC in the company has been reduced
consequently the name of the company has changed to JAYALAKSHMI OIL AND
CHEMICAL INDUSTRIES LIMITED on 12
th
April, 1982 as per the fresh certificate of
incorporation granted by the registrar of companies. Again during the year 1988, the major
share holding of the company has been acquired by the Andhra sugars limited, tanuku and the
company has become a subsidiary unit of the Andhra sugars limited effective from 27
th

October, 1988.


Later on to avail the benefit of the well noted brand name JOCIL limited
effectively from 17
th
September, 1992as per the fresh certificate of incorporation granted by
the registrar of companied, A.P. Hyderabad.

As such the present name of the company is

JOCIL LIMITED






33

LOCATION OF THE COMPANY


The company is located at Dokiparru in Medikonduru mandal of Guntur district in
the state of Andhra Pradesh. The area was declared as backward on by the government of
Andhra Pradesh. It is well connected by both road and rail only 45KM from Vijaywada, with
industrially located.


HISTORY OF THE COMPANY


A Public Limited Company incorporated in February 20, 1978 as Andhra Pradesh Oil
and Chemical Industries Ltd.

Listed in Madras and Hyderabad Stock Exchanges in India.

Renamed as Jayalakshmi Oil and Chemical Industries Limited in 1982.

Became a Subsidiary of the Andhra Sugars Ltd (ASL) on 27 October 1988.

ASL Group of companies have diversified interests in sugar, Chemicals such as
Caustic Soda, Acetic Acid, Industrial Alcohol, Sulfuric Acid, Aspirin etc., and also
Petrochemicals and Textiles at various location in Andhra Pradesh, India.

ASL is also the Sole Supplier of Rocket Fuel (UDMH) to ISRO.

Renamed once again as Jocil Limited in 1
st
September 1992.

25 years of experience in the field of manufacture of Stearic Acid Flakes, Fatty Acids,
Toilet Soap, Soap Noodles and Glycerin.

ISO 9001:2000 Certification by DNV in year 2004.

34

A 6 Mw Biomass Cogeneration Power Plant commissioned in 2001, to meet captive
requirements of Steam & Power.

Exports Surplus Power to APSPDCL (Public Utility Company).

Continuous unbroken dividend paying record since 1988-89.

Celebrated Silver Jubilee in the year 2004.

Stearic Acid Flakes are available in various grades for use in Pharmaceutical,
Cosmetics, Textiles, Paints, Plastics, Tires, Tread Rubber, Metal Polish and other
industries.


PROFILE OF JOCIL LIMITED:


Type of company - Large scale unit

Nature of company - Manufacturing


OWNERSHIP AND MANAGEMENT:


BOARD OF DIRECTORS
Dr. Mullapudi Harischandra Prasad Chairman
J. Murali Mohan, Managing managing Director
P. Narendranath Chowdary Director
M. Thimmaraja Director
Y. Narayanarao Chowdary Director
V. S. Raju Director
K. Srinivasa Rao Director
M. Gopalakrishna Director
Subbarao V. Tipirneni Director


35



SENIOR EXECUTIVE
Mr.p.kesavulu reddy president & secretary


BANKERS
Andhra bank Guntur
State bank of India Guntur

AUDITORS
Brahmmaiah & co Guntur






















36



































37


BOARD OF DIRECTORS

The board of directors of the company consists of 9 directors comparing of
promoter directors, additional director. The board of directors will meet once in three months
to review the working results, operations, financial and administrative matters and any other
policy matters of the company. The managing director being responsible to the board shall
appraise the board of directors about the progress of the company.


MANAGING DIRECTOR

The managing director is the chief executive of the organization and looks after the
day to day operations of the company. He is the top person in the hierarchical system of
organization. He does business operations with the assistance of all the departmental heads.
He is the pivotal of the organization.

PRESIDENT & SECRETARY

He is the in charge of administrative and finance departments.
He looks after all the matters relating to general administrative, secretarial, central
excise, purchases, account, store, personnel and all other matters relevant for smooth
operations of the company. He coordinates matters with all the departmental heads and takes
policy decisions in the absence of the managing director.

GENERAL MANAGER

He is the head of the production department. He looks after the fatty acid plant & glycerin
plant. He controls the overall production activities a term of engineers, supervisors and
helpers assist him.




38


SENIOR MANAGER-ELECTRICAL

He is the in charge of power house and responsible for all electrical installation in the
company. With the help of engineers, supervisors and electricians he looks after the matters
like power supply, operation of diesel generation sets etc...



MANAGER PRODUCTION (SOAP)

Production manager looks after the production of toilet soap and assisted by various
supervisory & other staff members.


ASST.MANAGER (ACCOUNTS)

Finance manager looks after all the works relating to audit books, commercial tax
matters and takes car4e of the accounting systems in the company. He will attend to the work
of income tax assessment orders given by the department. He will further attend to the work
of submission of working capital limits applications to the banks and submit to the banks the
required information with regard to sanction of working capital limits to the company.


The Company Policies are:

Quality
Consumer Safety
Health and Environment





39

STAFF AND WOEKERS PARTICULARS

Particulars No. of employees
1. Administration 31
2. Accounts 11
3. Marketing 5
4. Edp 3
5. Time office 7
6. Stores 13
7. Security 19
8. Transport 4
9. Production 14
10. Labour 19
11. Etp 6
12. Maintenance 4
13. Soap plant 139
14. Electrical 40
15. Power plant 102
16. Civil 6
17. Fatty acid plant 52
18. Hydrogenation plant 28
19. Flaker 6
20. Cell room 4
21. Oxygen plant 7
22. Dm plant 6
23. Fbc boiler 11
24. Workshop 49
TOTAL 586






40
OBJECTIVES OF JOCIL LIMITED

The main objective of company is to manufacture fatty acid and toilet soaps. The company
received letter of inter firm deferment of industrial development, ministry of industries,
government of India, Delhi. Enhanced the annual license capacity of fatty acids, glycerine
and fatty acids plant from 6205 M.T. per annum to 15510M.T. with effect from February
1991; this enhanced capacity came into operation. Later the company enhanced the capacity
came into operation. Later the company enhanced the capacity to 37500M.T. in March 1995.



Company Philosophy:

To conduct its operations- with Honesty, integrity and Transparency

To be the Market Leader in its Field of operation through Continual Improvement in
efficiency and Quality of Products and Services.

To have concern for Employees, Shareholders, Customers and Business Associates
alike.

To Serve Society through Industry.

To care for the Environment and the world in which we live.


MISSION OF JOCIL

JOCIL Ltd. Mission is to move up the levels of uncompromised customer care and to
e valued supplier of high quality products and services.



.

41
STRENGTHS OF JOCIL LTD

State of the art manufacturing capabilities
A team of professionals and experts
Wide distribution network
Market expertise
Consistent quality
Timely deliver.


FUNCTIONS OF JOCIL LTD

To produce, manufacture, refine, process import, sell and generally to deal in all
kinds of fatty acids and soaps and in connection there with the construction of
factories and workshop.

To fabricate manufacture and deal in all kinds of fatty acids plants.

To manufacture various kinds of soaps under contract basis for HLL.

The company organizes annual general body meeting where it submits all the four
quarterly reports regarding the actual performance with standard performance and
predicts the course of variances.

To receive, consider and adopt the profit & loss a/c for the year ended and prepares
balance sheet as at that date.

To declare dividends on equity shares.







42
INDUSTRIAL LICENCING

As the value of fixed assets envisaged in the project is less than Rs 3.3 crors the
industrial license is not required for setting of the project. The company has been registered
with directorate general technical development (DFTD),government of india,New delhi
bearing No :DGTD/HQ/D-S-S/C-26(N)/SE/79 with their latter dated 21-5-1979 and 31-3-
1990 for the manufacture of -

1. Processed Fatty Acid/Industrial Fatty Acids 9000
2. Glycerin 900
3. Toilet soaps 5000



Share Holders Pattern:-

31-03-2012
promoters 55.02%
(The Andhra Sugars Ltd, Holding
public 33.63%
Institution (ICICI &ISEC) 13.35%
Boolies corporate 1.30%
Face Value of Share Rs.10/- each












43
JOCIL LIMITED ACCOUNTING POLICIES

GENERAL

The accounts are prepared on historical cost convention and in accordance with
normally accepted accounting standards.

FIXED ASSETS

Fixed assets are stated at historical cost less accumulated depreciation

DEPRICIATION

Depreciation is provided on the written down value method at the rates and in the
manner specified in schedule XIV of companies act, 1956.`

INVESTMENTS

Long term investments are stated at cost and income there on is accounted for on
accrual. Provision towards decline in the value of long term investments is made only
when such decline is other than temporary.

Sales

Sales are of inclusive of excise duty, packing charges and sales tax.

RESEARCH AND DEVELOPMENT EXPENDITURE

Revenue expenditure is charged to profit & loss account and capital expenditure is
added to the cost of fixed assets in the year in which it is incurred.





44
RESEARCH AND DEVELOPMENT (R&D)

Specific areas in which R&D carried out by the company quality improvement of the
products and efficient use of utilities

Benefits derived as a result of above R&D. Improved product quality, quantity and
conservation of utilities.

Future plan of action utilization of various field resources as fuel in power plant
Enhancing capabilities through use of latest technology in fatty acid.


PERFORMANCE AND ACHEIVEMENTS OF JOCIL

1. Jocil leading manufacture of all kinds of fatty acids. This also manufacturesoaps.

2. Jocil supplies different grades of stearic acid and other fatty acids to other
manufacturing companies of pharmaceutical, chemicals,plastic etc.

3. Jocil supplies fatty acids to meet their specific requirement stearic acid,oleic acid
etc.

4. Jocil manufactures soaps on contract basis to HLL.

5. Jocil supplies soap noodles of mango brand to m/s Calcutta company.

6. Jocil production of quality goods is due to he following factors .


a) Usage of good quality raw materials like bran oils, coconut oils, cotton seed oils etc.

b) The processing and purification of fatty acids is done by using latest technology.

c) The technology and requirement of jocil has been imported from C.M.B.,Italy .

d) Maintence of quality control by experienced and committed operating personnel.

e) Toilet soaps and glycerin are manufactured as per BISC(formerly known as ISI )
standards.

f) It uses high quality chemicals for the purification and processing of fatty acids.

45
g) It maintains international standards in manufacturing two types products.


PRODUCTS OF JOCIL

Jocil has set up a modern plant for the manufacturing of fatty acids, toilet soaps and
refined glycerin. The major equipments were imported with lastest technology. The products
manufacture of international standards to suit different industrial users Jocil is manufacturing
two types products.

1.Industrial goods(chemical)
2.Consumers goods(soaps)


Fatty acids ,refined glycerin and fatty acids pitches fall under the category of
industrials goods where as soaps come under the category of consumer goods .

Fatty acids are manufactured from vegetable oils and fats .There are different types fatty
acids for different industrial applications .The following are the different kinds of fatty acids
which can be manufacture in JOCIL

1. Crude fatty acids of vegetable acids &fats.
2. Distilled fatty acids of vegetable acids &fats.
3. Hydrogenated fatty acids of vegetable acids &fats.


Out of the above type fatty acids. JOCIL is manufactured the following fatty acid
which is a major portion of their sale.

1. Stearic acid
2. Oleic acid
3. Distilled &hydrogenated fatty acids.




46
REFINED GLYCERIN
There varieties of refined glycerin are procedure namely.

1. Chemically pure grade (c.p)
2. Industrial white (w.h)
3. Pale straw
4.Glycerin is used in pharmaceuticals explosives, paints stroke ink, chemicals, tooth paste
etc.

OLEIC ACID

Only one variety of oleic acid namely commercial grade is manufactured by
JOCIL.It is used to in fertilizers, cutting oils, liquid soaps and other chemicals manufactures.

DISTILLED FATTY ACID

The fatty acids of different oils are tailor made products to suit different industrial users
specifications.
At present JOCIL is manufacturing distilled hydrogenated rice bran fatty acids,
distilled cotton seed oils fatty acids, distilled coconut fatty acids.

They plan to manufacture some varieties of fatty acids in future.
Distilled hydrogenated rice bran fatty acids and distilled plan oil fatty acids are also being
manufactured for consumption in soap plant for the manufacture of toilet soaps.

FATTY ACIDS PITCHES
Fatty acid pitches are obtained during distillation of crude fatty acids.

These products are supplied yo laundry soaps ,grease ,foundry chemical uses.


Raw Materials and Products:-
Raw Materials:
Rice Bran Oil
Rice Bran Acid Oil
Crude Palm Oil
47
Palm Fatty Acid Distillate
Palm Kemel Oil
Coconut Oil
Hydrogenated Rice Bran Oil
Neem
Products:

Fatty Acids
Stearic Acid
Distilled Rice Bran Fatty Acid
Hydrogenated Rice Bran Fatty Acids
Oleic Acid
Toilet Soap Noodles
Toilet Soaps
Refined Glycerin
Rice Bran Oil Pitch
Industrial Oxygen

Plants in Industry:-

Fat splitting plant
Fatty Acid Distillation
Fatty Acid Hydrogenation plant
Electrolyser
Cell Room
Oxygen Plant
Faker section
Sweet water Evaporation
Glycerin Distillation
D.M. water plant
Soap plant
Power plant



48
CASH MANAGEMENT IN JOCIL LIMITED

It is done by preparing a cash budget availing the information from the pay order
books, which will in turn, help to eliminate over keeping of cash. To reduce the delay of
clearing the cheques, JOCIL provides the facility of electronic fund transfer. The cash
management helps JOCIL limited to estimate the cash requirements and other day-to-day
payments. Jocil limited collected the money in the following two ways.


Concentration banking
Electronic funds transfer

1.CONCENTRATION BANKING
Concentration banking is a means of accelerating the flow of funds of the firm by
establishing strategic collection centers. Instead of a single collection centre located the
company had quarters multiple collection centers are established.
This system helps to the company to shorters the period between the times. Customers mail
their payments and the time the company has the use of funds .The company instructs its
customers in a particular geographic area to remit their payments the collection center in that
area. When the payments are received they are deposited in the collection centers or local
bankers. Surplus funds transferred from these local accounts to a concentration bank .
Generally the bank act as the collection centers. Jocil limited is having different centers for
collection i.e., banks accounts allover the country.


CURRENT ACCOUNT WITH ANDHRA BANK (LEAD BANK)


Name of the branch purpose

Main branch, guntur OCC A/c







49
CURRENT ACCOUNT WITH OTHER BANKS

Name of the bank

Address purpose
State bank of india

Main branch, Guntur OCC
State bank of Bikaner
operation

Khari baoli,Delhi Depot
Axis bank Naaz centre, Guntur Current A/c



CONTROL OF DISBURSEMENTS

We have already studied that along with the fastening of collection the management
of cash is also concerned with the control of disbursements.

The one and only procedure and followed by jocil limited for slowing of
disbursement is payment at the head office branch account. By doing so the cheque given to
out station paries will be out standing for sometime. The advantage of delays postal
activities deposition of cheques, encashment area utilized well by the company .Generally
the head office pays out station parties by demand draft and local parties with cheque.

MARKETABLE SECURITIES

Jocil limited I not holding any sort of marketable securities instead of investing in
marketable securities it is holding some field deposits which yield an interest amount
@10%p.a. if any need of cash is faced these deposits can be easily transferred to cash with a
cost of 1% of the amount.

The current account deposits shown in the table are those that are the credit balances
with the sales deposits accounts. These will instantly transfer to the main branch overdraft
account, the current will not yield any interest so this is transferred to the overdraft account
where there is debit balance .
By doing so the interest change on these balances by the bank can be decreased to some
extent.


50




Future out look

70 percent to 80 percent of the installed capacity of fatty acids is fully utilized in our country
and there is scope for 100% usage of the installed capacity.

A major reason behind this rate of consumption of Fatty Acid in India, compared to
developed countries is that they have not yet achieved that level of sophistication in demand
to utilize the versatile fatty acid derivatives. However, India is fast developing country and
auxiliary chemical industries are growing fast, where application of fatty acid derivatives are
very much a necessity.

Separation and purification of fat and oils is an important aspect of this fatty acid industry
and modern development in these lines have expanded the field of application of fatty acid to
industries like plastics, fibers, surfactants etc


SOAP MANUFACTURING

Different types of distilled fatty acids and hydrogenated fatty acids are mixed to
obtain desired quality to toilet soaps. Differed types are manufactured to satisfy different
types of users. Generally features of toilet soaps ate good lather, good perfume stability and
longer use.







51
Process of soap manufacturing




Saponification

Reaction with caustic soda

Neat soap

Spray drying (to reduce moisture to desired
level)

Soap noodles

Amalgamation (addition of color, perfume)

Mixing (homogenization)

Extrusion (taking to soap bar)

Soap bar

Stamping


packing

Finished soap

Fatty acids
52

TYPES OF RATIOS:

Liquidity ratios
Leverage ratio
Activity ratio
Profitability ratio

1. LIQUIDITY RATIO

Liquidity ratios analyses the short term solvency of a company. The reason for
calculating liquidity ratios is to find out if a firm has adequate funds to pay their current
requirements whenever they are due. If a firm is able to meet its short term obligations it
depicts its financial strength ad solvency. Creditors that supply short term loans are keen to
know the companys liquidity position. The liquidity ratio is required for an understanding in
preparing cash budgets and cash flow statements of a company

Current ratio
Quick ratio
Cash ratio

Current ratio:

A current asset consists of cash as well as the assets which can be converted into cash
within a year. The current assets that are included are marketable securities, debtors and
inventory. If there are any prepaid expenses they will be included as a part of current assets as
they are payments that the firm has already paid without any future liabilities in them.


Quick ratio:

The quick ratio is useful to depict and liquid current assets as a ratio of current
liabilities. it takes into account only those current assets which can be immediately converted
into cash without any loss in value.

53


Cash ratio:

Another test of liquidity in a company is through its cash ratio. Cash and marketable
securities are measured with the current liabilities.


2. LEVERAGE RATIOS

Leverage ratios indicate the debt paying ability of a company. There are two
types of debts in a company. These are short term and long term debts. Leverage ratios
calculate the proportion of debt in total financing of a company. It is useful for bankers and
creditors to find out the paying capacity of the company.

It is also useful for shareholders to find out the debt position of the
company and the return on total capital employed in the company. Leverage ratios examine
the long term solvency of the company.



Debt equity ratio:
Total debt ratio:
Proprietary ratio




Debt equity ratio:

This ratio is a measure of long term financial solvency of a company. It shows the
relationship between owners capital and borrowed capital.



54
Total debt ratio:

The total debt ratio can be calculated in different ways. One method is to calculate
the total debt divided by the total debt plus net worth of the shareholders. It depicts the lender
contribution for each rupee of the owners contribution.


Proprietary ratio:

The ratio throws light on the general financial strength of the company. It is also
regarded as a test of the soundness of the capital structure. Higher the ratio or share of
shareholders in the total capital of the company better is the long-term solvency position of
the company


3. ACTIVITY RATIO

The efficient management of assets helps in generating a good volume of sales. This
provides a good return to the owners and the creditors of a company. In ratio analysis
turnover ratios are used to evaluate the efficiency of the use of assets.

These turn over ratios are called activity ratios. They indicate the relationship
between sales and assets in a company. From these ratios a person can find out how quickly
the firm is able to convert is expressed either in percentages or number of times to depict the
result.

A higher turnover ratio will indicate that the resources are utilized efficiently. The
following activity ratios are commonly used to find out utility of the resources.

Debtors turnover ratio
Collection period ratio
Total assets turnover ratio
Fixed assets turnover ratio
Current assets turnover ratio
Working capital turnover ratio
55


Debtors turnover ratio

A firm has to extend its sales by selling goods on credit to customers. Cash sales are
very good for a company. But sales are limited because customers want some time interval to
make their payments.

To enhance the sales of a company there have to be sales made on credit. A
company has to be careful in selecting customers to whom credit can be extended.



Collection period ratio:

This ratio measures the efficiency of collecting the payments by the company.
The firm should have a good but firm credit policy. If it grants 15 days credit policy it should
be able to collect its funds from the debtors after the interval date.


Total assets turnover ratio:

The total assets ratio is calculated to get a view of the turnover of all the assets
resources in a company.


Fixed assets turnover ratio:

This ratio exclusively indicates the turnover of sales from net fixed assets.
Another turnover ratio between sales and current assets can also be calculated.





56


Current assets turnover ratio:

This ratio calculates the efficiency of current assets in comparison with sales of a
company.


Working capital turnover ratio:

This ratio measures the turnover of sales with working capital. Current liabilities are
reduced from the current assets the amount is called working capital.


4.PROFITABILITY RATIOS

Profitability ratios indicate the operating efficiency of a company by measuring
the revenues of a company. Profitability in a company is essential because a commercial
enterprise must sustain itself. However, social obligations, employees satisfaction,
shareholders, debtors and creditors interest have to be kept in mind while working towards
profit. To measure profitability the ratios can be calculated in relation to sales or investment.

Net profit margin ratio
Gross profit ratio


Net profit ratio:

Gross profit is measured by deducting the cost of good sold from the sales of a company.
However, in India gross profit is defined differently by organizations depending on the
interest of the organization. Profits can be calculated before tax or after taxes.




57

Gross profit ratio:

Gross profit ratio may be indicated to what extent the selling prices of goods per
unit may be reduced with out incurring losses on operations.


GROSS PROFIT RATIO = GROSS

PROFIT / NET SALES=100


Net profit ratio

This is used to measure the overall profitability and hence it very useful to
proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not be
able to achieve a satisfactory return on its investment.


NET PROFIT RATIO = NET PROFIT / NET SALES*100



Operating profit ratio

This ratio expresses the relationship between operating profit and sales with the help of
the ratio one can judge the managerial efficiency which may not be reflected in net profit
ratio.

OPERATING PROFIT RATIO = OPERATING PROFIT /NET SALES*100



EARNING PER SHARE RATIO


Earning per share ratio helps in determine the market price of the equity share of
company. It helps in deciding whether equity share capital is being effectively used or not.


EARNING PER YIELD = EPS / MARKET VALUE PER SHARE*100



58





CHAPTER- IV
RATIO ANALYSIS IN
JOCIL LTD




















59




DATA ANALYSIS AND INTERPRETATION



LIQUIDITY RATIO:-


Current ratio:-
Current ratios are a measure to find out the liquidity of the business of a company. It
is calculated in the following way.

Current ratio = currents assets/current liabilities

Current assets = debtors, cash, inventory, bills receivable, short term investments

Current liabilities = short term bank loan, creditors, bills payable, provisions, bank
overdraft.

Table-1.1

Year Current assets Current liabilities Ratio
2008-09 624866578 190479571 3.28
2009-10 854200067 30175603 2.83
2010-11 997737475 391631987 2.54
2011-12 1359287561 839692182 1.61
2012-13 1630346325 1012327536 1.61






60





CURRENT RATIO:





Interpretation:

The current ratio defined as the relationship between current assets and current
liabilities. As can be from the table 1.1 current ratio was 2.83 & 2.54 in 2008-2009, 2008-
2010 years respectively. It was decreased in the year 2009-10 to 2.54 from 2.83 and the
increased in the next year 2010-11 to 2.64 from 2.54 and not recovered in the years 2011-
12, 2012-2013 to 2.64 from 1.61.

The JOCIL limited it is maintaining the current ratio, which is more then ideal ratio
2:1 in all years.






0
0.5
1
1.5
2
2.5
3
3.5
2008-09 2009-10 2010-11 2011-12 2012-13
61





Quick ratio:-


Quick ratio should be 1:1 to indicate a satisfactory healthy financial condition of a
company. This test is considered to be better than the current ratio because it is able to assess
the liquidity of a company since it includes only quick conversion assets.

Quick ratio=current assets-stock/current liabilities

Quick assets=current assets-inventory




Table-1.2

Year Liquid assets Current liabilities Ratio
2008-09 485948545 190479571 2.55
2009-10 685232006 30175603 2.27
2010-11 828769414 391631987 2.11
2011-12 899469880 594510225 1.59
2012-13 1731751809 839692182 1.60






62



QUICK RATIO






Interpretation:

The standard norm of quick ratio is 1:1 the quick ratio of Jocil Ltd. was 2.51 in 2006-
07 and it was increased to 2.55 in the year 2007-08. it was 2.27, 2.11 & 1.51 in the year 2008-
09, 2010-2011 respectively. The company performance and maintain liquid in very high
level.









0
0.5
1
1.5
2
2.5
3
2008-09 2009-10 2010-11 2011-12 2012-13
63





Cash ratio:-

Absolute liquid ration is represented by cash and near cash item. It is a ratio of
absolute assets to current liabilities. In the computation of this ratio only the absolute liquid
assets are compared with the liquid liabilities.


Absolute liquid ratio =absolute liquid assets/current liabilities


Table-1.3


Year Absolute liquid assets Current liabilities Ratio
2008-09 64796749 190479571 0.34
2009-10 239149881 30175603 0.79
2010-11 103757796 59,45,10,225 0.75
2011-12 22265007 839692182 0.24
2012-13 56338144 1012327536 0.30









64





CASH RATIO






Interpretation:

A standard norm of 0.5:1 absolute liquid ratio is considered as an acceptable norm.
Hear the Jocil Ltd cash liquid ratio showed that 0.59,0.34, 0.79, 0.26, 0.075 in the year 2006-
07, 2007-08, 2008-09, 2009-10, 2010-11 but after it in








0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2008-09 2009-10 2010-11 2011-12 2012-13
65







LEVERAGE RATIO:-

Debt equity ratio:-

It measures the ratio of long term debt to share holders funds. Idle ratio usually
recommended is 2:1 as such if the debt is less than two times the equity. The logical
conclusion is that the financial structure of the concern is sound.

Debt equity ratio=long term debt /net worth

Table-2.1


Year Total debt Net worth Ratio
2008-09 60840461 886403369 0.03
2009-10 113086409 1048292529 0.06
2010-11 481661744 1201279603 0.40
2011-12 14752083 1274707156 0.01
2012-13 10788572 1358570216 0.03







66







DEBT EQUITY RATIO








Interpretation:

This ratio includes how much the company is leveraged (in debt) by comparing what
is owned. A high debt to equity ratio could indicate that the company may be over- leveraged
and should look for ways to reduce its debt.
How the Jocil Ltd debt equity ratio was highest in 2006-07 i.e., 0.42 and 2
nd
highest is
0.40 in 2010-11 and least ratio in 2007-08 i.e., 0.03. This ratio is showing a mixed trend.



0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
2008-09 2009-10 2010-11 2011-12 2012-13
67







Total debt ratio:-


Debt ratio analysis is the long term solvency of a firm. It indicates the preparation of
the interest being debt in the capital structure.

Total debt ratio=total debt/capital employed




Table-2.2



Year Total debt Capital employed Ratio
2008-09 60840461 947243830 0.03
2009-10 113086409 1161378938 0.06
2010-11 481661744 1682941347 0.09
2011-12 14752083 1274707156 0.01
2012-13 10788572 1358570216 0.03











68









TOTAL DEBT RATIO












Interpretation:

The debt ratio is highest in the year of 2006-07 i.e., 0.29 and fall down in the year
2007-08 i.e., 0.03 and moves increased from year to year from 2007-08 to 2010-11.











0
0.02
0.04
0.06
0.08
0.1
2008-09 2009-10 2010-11 2011-12 2012-13
69









Proprietary ratio:-


The ratio throws light on the general financial strength of the company. It is also
regarded as a test of the soundness of the capital structure. Higher the ratio or share of
shareholders in the total capital of the company better is the long-term solvency position of
the company.



Proprietary ratio =net worth/total assets





Table-2.3



Year Net worth Total assets Ratio
2008-09 886403369 800206864 1.18
2009-10 1048292529 1650431451 0.70
2010-11 1201279603 959021319 1.25
2011-12 1274707156 223820856 0.56
2012-13 1358570216 2493929873 0.58









70










PROPRIETARY RATIO









Interpretation:

The proprietary ratio is the relationship between equity and total assets. The table
shows that the ratio in the year 2010-11 is high. The table shows ups and downs year on
year. It has one year upwards and another year it will decrease and again recovery his status.

From the above proprietary ratio of Jocil Ltd. It is clear that the company is
maintaining a mixed trend.






0
0.2
0.4
0.6
0.8
1
1.2
1.4
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
71





ACTIVITY RATIO



Debtors turnover ratio:-


Debtors turnover ratio indicates the velocity of debt collection of a firm. In simple
words it indicates the number of times average debtors are tuned over during a year.



Debtors turnover ratio =sales/debtors




Table-3.1




DEBTORS TURNOVER RATIO


Year

Sales

Debtors

Ratio
2008-09 2141379194 228771563 9.36
2009-10 3235031620 355316081 9.10
2010-11 4186169010 438561908 9.54
2011-12 4301475544 468117277 9.18
2012-13 4534635784 531782979 8.52










72


DEBTORS TURNOVER RATIO










Interpretation:

The debtors turnover ratio was 9.54 in the year 2010-11 and it is highest. In the year
of 2006-07 and 2007-08 of 6.21 and 6.19. It was increased in the year 2008-09 i.e., 9.36 and
decreased in the year of 9.10 of 2009-10 and again recovered in the year 2010-11
i.e., from 9.10 to 9.54.
















8
8.2
8.4
8.6
8.8
9
9.2
9.4
9.6
2008-09 2009-10 2010-11 2011-12 2012-13
73






Collection period ratio:-



It represents the average no. of days for which a firm has to wait before their
receivable is converted into measure the quality of debtors. Generally, the shorter the average
collection period the better is the quality of debtors.


Average collection period ratio=365/debtor turnover ratio





Table-3.2
















Year 360 Debtors turn over ratio Ratio
2008-09 360 9.36 38.46
2009-10 360 9.10 39.56
2010-11 360 9.54 37.73
2011-12 360 9.18 39.21
2012-13 360 8.52 42.25
74





COLLECTION PERIOD RATIO













Interpretation:

The ratio of Jocil Ltd. was showing that 2006-07 the ratio was 57.97 later it was
increased to 58.15 due to increased in sales. But after the ratio was decreased in 2008-09 i.e.,
38.46 and least in the year of 2010-11 i.e., 37.73.














35
36
37
38
39
40
41
42
43
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
75






Total assets turnover ratio:-



The total assets ratio is calculated to get a view of the turnover of all the assets
resources in a company. The following formula is used to compute the ratio.

Total assets turnover ratio=sales/total assets





Table-3.3



Year Sales Total assets Ratio
2008-09 2141379194 800206864 2.67
2009-10 3235031620 1650431451 1.96
2010-11 4186169010 959021319 0.84
2011-12 4301475544 2238208567 1.92
2012-13 4534635784 2493929873 1.81
















76






TOTAL ASSETS TURNOVER RATIO












Interpretation:

This ratio indicates how much sales generated when one rupee investment in total
assets i.e., fixed and current assets. For example the current year 2010-11 total assets turnover
ratio 0.84 implies that Jocil limited a sale of Rs.0.84 for one rupee investment in fixed and
current assets together.







0
0.5
1
1.5
2
2.5
3
2008-09 2009-10 2010-11 2011-12 2012-13
77






Fixed assets turnover ratio:-


This ratio exclusively indicates the turnover of sales from net fixed assets. Another
turnover ratio between sales and current assets can also be calculated.



Fixed assets turnover ratio=sales/fixed assets




Table-3.4



Year Sales Fixed assets Ratio
2008-09 2141379194 498450861 4.29
2009-10 3235031620 652693976 5.88
2010-11 4186169010 804045285 1.98
2011-12 4301475544 804252439 5.34
2012-13 4534635784 816571140 5.55
















78





FIXED ASSETS TURNOVER RATIO









Interpretation


This ratio measures the relationship between sales and fixed assets. The fixed assets
turnover ratio was 1.98 in 2006-07 where it increased to 2.44 and 4.29 in 2007-08 and 2008-
09 years respectively. But later it is decreased to 2.44 and 1.98 in 2009-10 and 2010-11
respectively.












0
1
2
3
4
5
6
2008-09 2009-10 2010-11 2011-12 20112-13
79






Current assets turnover ratio:-


This ratio calculates the efficiency of current turnover ratio assets in comparison with
sales of a company.



Current assets turnover ratio=sales/current assets



Table-3.5



Year Sales Current assets Ratio
2008-09 2141379194 301756003 7.09

2009-10 3235031620 997737475 3.16
2010-11 4186169010 1574976034 2.65
2011-12 4301475544 1359287561 3.16
2012-13 4534635784 1630346325 2.78

















80





CURRENT ASSECTS TURNOVER RATIO









Interpretation:


This ratio indicates how much sales generated when one rupee investment in total
current assets. For example the current year 2010-11 current assets turnover ratio 2.65
implies that that Jocil limited a sale of Rs.2.65 for one rupee investment in current assets.

















0
1
2
3
4
5
6
7
8
2008-09 2009-10 2010-11 2011-12 2012-13
81





Working capital turnover ratio:-



This ratio measures the turnover of sales with working capital.




Working capital turnover ratio=sales/current assets-current liabilities







Table-3.6



Year Sales Working capital ratio ratio
2008-09 12141379194 552444064 3.87
2009-10 3235031620 606131790 5.33
2010-11 4186169010 980465809 4.26
2011-12 4301475544 818319599 5.25
2012-13 4534635784 835350799 5.42














82






WORKING CAPITAL TURNOVER RATIO







Interpretation:

It measures the relationship between working capital and the sales. The companys
working capital turnover ratio was 1.11 in 2006-07 where it increased to 1.56 in the next year
due to increased in sales and later it increased to 3.87 in the 2008-09. It remains increased
to5.33 in the 2009-10 and decreased in the year 2010-11 i.e., 4.26 here the ratio is showing a
mixed trend.














0
1
2
3
4
5
6
2008-09 2009-10 2010-11 2011-12 2012-13
83





PROFITABILITY RATIOS:-


Net profit ratio:-


The net profit is a good indicator of profitability as its takes into consideration all
these expenses including interest and taxes.



Net profit ratio=profit after tax/sales



Table-4.1



Year Profit after tax Sales Ratio
2008-09 96905513 1277135937 0.04
2009-10 213670150 2141379194 0.06
2010-11 194274652 32335031620 0.04
2011-12 125037026 4186169010 0.02
2012-13 146206069 4337557560 0.03















84





NET PROFIT RATIO









Interpretation:

This ratio measures the net profit in net sales or relationship between net profit and
net sales. The net profit ratio in the year 2006-2007 was 0.05% the ratio in the year 2007-08
was increased to 0.06%. Later it increased to 0.04% in 2008-09 and thereafter the ratio
increased to 0.06% and 0.04% in 2009-10, 2010-11 respectively.













0
0.01
0.02
0.03
0.04
0.05
0.06
2008-09 2009-10 2010-11 2011-12 2012-13
85

JOCIL LIMITED
BALANCE SHEET OF JOCIL LIMITED AS ON 31-03-2009

SCHEDULE
As on
31-03-2009
Sources of funds
Shareholders funds
Capital 4,44,10,500
Reserves & surplus 84,19,92,869
Loan funds:
Secured loans 2,82,41,585
Unsecured loans 3,25,98,876
Net Deferred tax liability 10,99,07,275
Total 1,05,71,51,105
Application of funds
Fixed assets:
Gross block 1,09,38,52,232
Less-depreciation 61,05,11,307
Net block 48,33,40,925
Capital work-in-progress 1,51,09,936
49,84,50,861
Investments 62,56,180
Current assets, loans & advances:
Inventories 16,89,68,061
Sundry debtors 22,87,71,563
Cash & bank balances 23,91,49,881
Other current assets 1,87,84,44
Loans & advances 21,54,32,118
85,42,00,067
Less: Current liabilities and provisions:
Current liabilities 11,79,36,595
Provisions 18,38,19,408
30,17,56,003
Net current assets 55,24,44,064
Total 1,05,71,51,105








86
JOCIL LIMITED
BALANCE SHEET OF JOCIL LIMITED AS ON 31-03-2010

SCHEDULE
As on
31-03-2010
Sources of funds
Shareholders funds
Capital 4,44,10,500
Reserves & surplus 1,00,38,82,029
Loan funds:
Secured loans 3,47,93,615
Unsecured loans 7,82,92,794
Deferred tax liability 10,74,56,953
Total 1,26,88,35,891
Application of funds
Fixed assets:
Gross block 1,21,00,02,136
Less-depreciation 65,94,27,245
Net block 55,05,74,891
Capital work-in-progress 6,28,35,018
Advance for capital goods 39,28,35,018
65,26,93,976
Investments 1,00,10,125
Current assets, loans & advances:
Inventories 29,76,92,856
Sundry debtors 35,53,16,081
Cash & bank balances 10,37,57,796
Other current assets 5,35,381
Loans & advances 24,04,35,361
99,77,37 475
Less: Current liabilities and provisions:
Current liabilities 15,22,85,441
Provisions 23,93,20,244
39,16,05,685
Net current assets 60,61,31,790
Total 1,26,,88,35,891








87
JOCIL LIMITED
BALANCE SHEET OF JOCIL LIMITED AS ON 31-03-2011

SCHEDULE
As on
31-03-2011
Sources of funds
Shareholders funds
Capital 4,44,10,500
Reserves & surplus 1,15,68,69,103
Loan funds:
Secured loans 24,95,10,370
Unsecured loans 23,21,51,374
Net Deferred tax liability 11,61,10,121
Total 1,79,90,51,468
Application of funds
Fixed assets:
Gross block 1,39,44,35,216
Less-depreciation 72,63,15,450
Net block 66,81,19,766
Capital work-in-progress 12,66,93,414
Advance for capital goods 9,23,21,05
80,40,45,285
Investments 1,45,40,374
Current assets, loans & advances:
Inventories 67,55,06,154
Sundry debtors 43,85,61,908
Cash & bank balances 4,46,15,362
Other current assets 79,310
Loans & advances 41,62,13,300
1,57,49,76,034
Less: Current liabilities and provisions:
Current liabilities 29,89,46,810
Provisions 29,55,63,415
59,45,10,225
Net current assets 98,04,65,809
Total 1,79,90,51,468








88

JOCIL LIMITED
BALANCE SHEET OF JOCIL LIMITED AS ON 31-03-2012

SCHEDULE
As on
31-03-2012
Sources of funds
Shareholders funds
Capital 8,88,16,250
Reserves & surplus 1,18,58,90,906
Loan funds:
Secured loans 24,35,41,078
Unsecured loans 5,72,60,611
Net Deferred tax liability 11,71,15,539
Total 1,69,26,24,384
Application of funds
Fixed assets: 16,13,39,258
Gross block 81,40,86,819
Less-depreciation 80,42,52,439
Net block 1,40,67,160
Capital work-in-progress

85,30,16,666
Investments 1,45,40,371
Current assets, loans & advances:
Inventories 50,64,56,758
Sundry debtors 50,00,71,735
Cash & bank balances 2,22,65,007
Other current assets 49,30,379
Loans & advances 32,55,63,682
1,35,92,87,561
Less: Current liabilities and provisions:
Current liabilities 1,01,23,27,536
Provisions
19,04,79,571
`Net current assets 43,43,87,007
Total 1,69,26,24,384







89
JOCIL LIMITED
BALANCE SHEET OF JOCIL LIMITED AS ON 31-03-2013


SCHEDULE
As on
31-03-2013
Sources of funds
Shareholders funds
Capital 8,88,16,250
Reserves & surplus 1,26,97,53,966
Loan funds:
Secured loans 24,66,42,332
Unsecured loans 11,02,71,853
Net Deferred tax liability 11,52,52,186
Total 1,83,07,36,587
Application of funds
Fixed assets:
Gross block 1,72,02,30,923
Less-depreciation 90,36,59,783
Net block 81,65,71,140
Capital work-in-progress 1,87,79,659

83,75,59,396
Investments 1,35,40,374
Current assets, loans & advances:
Inventories 5,20,00,689
Sundry debtors 5,55,17,832
Cash & bank balances 5,63,38,144
Other current assets 70,26,399
Loans & advances 43 ,98 ,02 ,561
1,63,03,46,325
Less: Current liabilities and provisions:
Current liabilities 10,31,38,178
Provisions
20,28,88,519
Net current assets 44,20,19,163
Total 1,83,07,36,587







90
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31
ST
MARCH, 2009
Schedule Year ended
31-03-2009
Income
Gross sales 2141379194
Less: excise duty 207211577
1934167617
Other income 24637052
Increase in stocks 24762620
1983567289
Expenditure
Raw materials consumed 1265982728
Payments and benefits to employees 93601653
Manufacturing, selling, administrative and Other expenses 414945600
Rates and taxes 1221494
Interest 3382506
Depreciation 52327795
1831461776
Profit before extra-ordinary items 152105513
Less: provision for diminution in value of investments withdrawn 0
Profit after extra-ordinary items and before tax 152105513
Less: provision for-income tax 50000000
Deferred tax 4800000
Fringe benefit tax 400000
96905513
Add: excess provision for income-tax in earlier years 0
Profit after tax 96905513
Add: surplus brought forward from Previous year 54308212
Profit available for appropriations 151213725
Transfer to general reserve 50000000
Provision for proposed dividend 35524600
Provision for tax on distributed profits 6037406
Balance of profit carried forward to 59651719
151213725








91


PROFITANDLOSSACCOUNTFORTHEYEARENDED31
ST
MARCH,2010
Schedule Year ended
31-03-2010
Income
Gross sales 3235031620
Less: excise duty 218396299
3016635321
Other income 34357603
Increase in stocks 72396784
3123389708
Expenditure
Raw materials consumed 2014723347
Payments and benefits to employees 119391601
Manufacturing, selling, administrative and Other expenses 610581013
Rates and taxes 1381013
Interest 5525056
Depreciation 51086052
2802688697
Profit before tax 320701011
Less: provision for income-tax 110000000
Deferred tax 0
210701011
Add: excess provision for income-tax in earlier years 518817
Deferred tax (credit) 2450322
Profit after tax 213670150
Add: surplus brought forward from Previous year 59651719
Profit available for appropriations 273321869
Transfer to general reserve 100000000
Provision for proposed dividend 44405750
Provision for tax on distributed profits 7375240
Balance of profit carried forward to 121540879
273321869
4440575
No.of equity share of RS.10/- each basic &diluted earning per share
(net profit after tax / no.of equity shares) 194274652/4440575 48.12




92





PROFITANDLOSSACCOUNTFORTHEYEARENDED31
ST
MARCH,2011
schedule Year ended
31-03-2011
Income
Gross sales 4186169010
Less: excise duty 360887271
382581739
Other income 36406218
Increase in stocks 110018212
3,97,17,06,169
Expenditure
Raw materials consumed 2,80,53,70,177
Payments and benefits to employees 16,64,09,618
Manufacturing, selling, administrative and Other expenses 61,90,17,636
Rates and taxes 18,31,259
Interest 2,62,95,669
Depreciation 6,82,48,340
3,68,71,72,699
Profit before tax 28,45,33,470
Less: provision for income-tax 8,36,53,168
Deferred tax 86,53,168
19,28,80,302
Add: excess provision for income-tax in earlier years 13,94,350
Deferred tax (credit) 0
Profit after tax 19,42,74,652
Add: surplus brought forward from Previous year 12,15,40,879
Profit available for appropriations 31,58,15,531
Transfer to general reserve 10,00,00,000
Provision for proposed dividend 3,55,24,600
Provision for tax on distributed profits 57,62,978
Balance of profit carried forward to 17,45,27,953
31,58,15,531
44,40,575
No.of equity share of RS.10/- each basic &diluted earning per share
(net profit after tax / no.of equity shares) 194274652/4440575 43.75



93






PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31
ST
MARCH, 2012
Schedule Year
ended
31-03-2012
Income
Gross sales 430147554
Less: excise duty 422864149
387861139
Other income 2584288
Increase in stocks 36082016
394053629
Expenditure
Raw materials consumed 277660548
Payments and benefits to employees 177928595
Manufacturing, selling, administrative and Other expenses 656477474
Rates and taxes 6020879
Interest 6317296
Depreciation 88816183
3712165915
Profit before tax 186042444
Less: provision for income tax 60000000
Deferred tax 1005418
125037026
Add:excess provision for income- tax in earlier years 0
Deferred tax (credit) 1005418
Profit after tax 12503702
Add: surplus brought forward from Previous year 174527953
Profit available for appropriations 299564979
Transfer to general reserve 144405750
Provision for proposed dividend 44405750
Provision for tax on distributed profits 7203723
Balance of profit carried forward to 125037026
299564979
No.of equity shares of Rs.10 each 8881150
(Net profit after tax/No. of equity shares) 125037026/8881150 Rs. 14.08


94
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31
ST
MARCH, 2013
Schedule Year ended
31-03-2013
Income
Gross sales 4534635784
sLess: excise duty 516021770
4018614014
Other income 16280465
Increase in stocks 57859896
4092754375
Expenditure
Raw materials consumed 27528240
Payments and benefits to employees 197818702
Manufacturing, selling, administrative and Other expenses 780065757
Rate s and taxes 4468626
Interest 7707539
Depreciation 100067870
3842971734
Profit before tax 229446261
Less: provision for-income tax 85000000
Deferred tax 1863353
146309614
Add: excess provision for income-tax in earlier years 103545
Diferred tax (credit) 0
Profit after tax 146206064
Add: surplus brought forward from Previous year 103549756

Provision for proposed dividend 53286900
Provision for tax on distributed profits 9056109
Balance of profit carried forward to 146206069
249755825
8881150

No.of equity shares of Rs.10 each basicand diluted earningshare
(net profit after tax/no.of equity shares) 146206069/8881150 Rs.16.46








95











FINDINGS:-


The gross profit of JOCIL Ltd is declining continuously from 2005-2011. as it implies
cost of production is increasing for every year

Current assets management needs to be more efficient

A conventional rule, a current ratio of 2:1 or more is considered satisfactory JOCIL is
maintain more than the suggested current ratio

The debtors turnover is showing fluctuations. In the year 2011 9.54 implies the firm
collects the debts rapidly

As net profit have fluctuations. It is represents variances in inventory turnover

The fixed assets turnover ratio of JOCIL has been decreasing from 2010-2011.
Showing the need to improve fixed assets utilization.








SUGGESTIONS:-

Average collection period should be reduced as much as possible for quick payments by
debtors

Net profit of JOCIL Ltd to improve as ensure adequate return to the owners

96
The company many increase the current ratio by increasing the cash balance

The company must improve liquid assets ratio by improving the debtors and short
term investments

To company may increase investments in current assets to meet it short term
obligations

The company should maintain collection of debts effectively in order to have efficient
management of credit.




The data used in this study is entirely the secondary data. The data is collected from
annual reports of JOCILE. The required theoretical concepts are collected from various
theoretical books and websites.


Data analysis

The process of analyzing the data will begin with the first collecting the data, which is
obtained from the annual reports and then tabulating it. Then the tabulated data is then
depicted in diagrammatic form that is in terms of a graph like bar charts, pie charts. The data
is analyzed mainly from the annual reports. Data interpretations done with the help of
statistical tools like ratio.

Significance:-


To present study is of significant to the following groups:-


To find out the financial stability and soundness of the firm

To determine the possibilities of the firm for future growth

97
The extent to which the firm has used its long term solvency by borrowing funds

The efficiency with which firm is utilizing its various assets in generating sales.

To assess and evaluate the earning capacity of the firm



s