Data Analysis And Interpretation

Introduction :

Research analysis is based on data collected from the managing

director of ESPL and employees over there. A detailed and systematic
analysis was done. The main aim of the report are outlined in the
following section by drawing charts, graphs, and the entry report
object is covered in the following sections.

First, the informations collected from the managing director of

ESPL and employees over there, -collected information was classified
into different groups.

Secondly, it is put in the form the tables analysis was done and
interpretation was drawn on the basis of tabulated data.

Most of the analysis is done on the basis of percentages method;

most of the analysis is represented graphically in the form of bar
charts.

The study is about the inventory management-practices. ESPL

uses 62 components of manufacture finished goods, so there maintain
proper inventory system and good relationship with the suppliers of
raw materials, such relationship avoids the lead time of raw materials.
This ESPL buys the raw materials in credit basis the payments are
made through the banks; this avoids the huge amount of working
capital invested in the inventories.

They follow JUST-IN-TIME (JIT) manufacturing system, which

means producing the product after the order, is placed from the
customers. JIT system helps the firm to reduce the cost of
manufacturing and inventory cost in both fronts.

To reduce procurement cost, JIT makes a stable relationship with

the vendors. Whenever the material approaches the reorder level, the
vendors automatically ships the material so that it reaches the
organization exactly when it is required. Thus, the inventory level is
maintained at very low levels, this reduces the inventory holding cost.

This system helped the ESPL to invest fewer amounts in the

inventory. the investments in inventories constitute the most
significant part of current assets. These current assets are the
components of the firms working capital, thus it is very essential to
proper control and management of inventories. The purpose of
inventory management is to ensure availability of materials in
sufficient quality as and when required and also to minimize the total
cost i.e., indirect cost and direct cost and direct cost associated with
holding of inventories. The need for working capital due to the time
gap between production and realization of cash from the sale of
inventory there is an operating cycle involved in the sale and
realization and production; production and sales; and realization of
cash. For this purpose we need working capital.

The fallowing flow chart explain the operation cycle in ESPL.

DEBTORS
(receivables)

CASH/
BANK

OTHER EXPENSES

FINISHED GOODS

WORKING CAPITAL

RAW
MATERIAL

ANALYSIS:

WORK-INPROGRESS

The above chart clearly explain how ESPL, carrying there

operating cycle. The firm most sales are made on credit basis, where
the firm has to wait for the realization of cash from the debtor to whom
the goods are sold. After the cash has been realized it is invested in the
raw materials and some money for other purpose. The raw materials
purchased on the credit basis that has been paid through the bank.
The ESPL maintained the reorder level of inventory, which depicts
when the raw materials ordered to be placed with the suppliers.

1. FALLOWING
TABLE
DIFFERENT YEARS.

years

SHOWS

Opening stock

( in Rs )

THE

INVENTORIES

Closing Stock

( in Rs )

2010-11

30,27,823

49,22,085

2011-12

49,22,085

64,68,607

64,68,607

91,61,768

2012-13

IN

2013-14

91,61,768

73,44,285

ANALYSIS:
According to the above table in the year 2010-11 the opening
stock of the company is 30,27,823 and the closing stock is 49,22,085.
stock has increased which may be due to the purchase of more raw
material during the year and the sales of the company may not also be
good or other wise company might be planning to maintain some stock
for its future needs. In the year 2011-12 the opening stock of the
company is 49,22,085 and the closing stock is 64,68,607, the stock of
the company has increased compared to the previous year due to the
same reasons which was exposed earlier. In the year 2012-13 the
opening stock of the company is 64,68,607 and the closing stock is
91,61,768, where the stock has increased but in the year 2013-14 the
opening stock of the company is 91,61,768 but the closing stock has
gone down to 73,44,285 which might be due to the huge sales made
by the company.

1.Graph Showing Opening & Closing Stock

Opening

Closing
10000000
9000000
8000000
7000000
6000000
5000000

Stock Value in Rs

4000000
3000000
2000000
1000000
0
2008-09

2009-10

2010-11

2011-12

2.

YEARS

SALES IN RS

2010-11

7,52,00,216

2011-12

8,01,27,085

TABLE
SALES
FOR

FOLLOEING
SHOWS
THE
ANALYSIS
FOUR YEAR:

ANALYSIS:

The sales
the year 2010amounting
to
In
the
year
sales turnover
is 8,01,27,085

2012-13

12,85,10,173

2013-14

19,10,04,953

turnover during
11,
was
Rs 7,52,00,216.
2011-12
the
of the company
which is more

compared to its previous year. In the year 2012-13 the sales of the
company is Rs 12,85,10,173 which was increased more than 50%
compared to it previous year which is a very good thing to the
company . in the year 2013-14 the profit is almost 20 cores which is
19,10,04,953 which might be due to the greater demand for its
products in the market.

2.Graph Showing Sales & Turnover

1800000
1600000
1400000
1200000
1000000

Sales & Turnover

Sales in Crors
800000
600000
400000
200000
0
2010-11

2011-12

2012-13

2013-14

3. FOLLOEING TABLE SHOWS THE CONSUMPTION OF RAW

MATERIALS FOR FOUR YEAR:

RAW-MATERIALS
YEARS

IN RS

2010-11

4,85,55,018

2011-12

4,85,90,450

2012-13

8,85,02,397

2013-14

6,95,87,516

ANALYSIS
The raw material consumed by ESPL during the year 2010-11 was
Rs 4,85,55,018 and in the year 2011-12 it was Rs 4,85,90,450 there
was hardly any change in the consumption of raw material compared
to the previous year. In the year 2012-13 the raw material consumed
by the company was Rs 8,85,02,397 which has almost doubled
compared due to the previous year which may be due to the increase
in the production and indeed the sales in the year 2013-14 the
consumption of raw material has gone down to Rs 6,95,87,516
precisely which might be due to the lack of sales and indeed the
production of the company.

3.Consuption of Raw Materials

9000000
8000000
7000000
6000000
Amount in Crores

5000000
4000000
3000000
2000000
1000000
0

Consuption of Raw Materials

4. FOLLOEING TABLE SHOWS THE INVENTORY EFFECT ON

WORKING CAPITAL:

years

Closing Stock
WORKING CAPITAL
( in Rs )

2010-11

1,17,92,600

49,22,085

2011-12

1,34,38,906

64,68,607

2012-13

1,12,85,308

91,61,768

2,20,06,050

73,44,285

2013-14

ANALYSIS
The above table furnishes how the inventory effects the working
capital of the firm the above table we can understand that when the
inventory is more the working capital is high because the working
capital has been invested in Inventories in the year 2010-11 closing
stock was Rs 49,22,085 and the working capital was Rs 1,17,92,600
where the working capital is more compared to the inventories. Which
to maintain the day to day expenses of the ESPL in the year 2011-12
the closing stock of the company was Rs 64,68,607 and the working
capital was Rs 1,34,38,906 which may be due to the investment in the
stock of the company. In the year 2012-13 the closing stock was Rs
91,61,768 and the working capital was Rs 1,12,85,308 which is more
compared to stock of the company. Which may be due to the more
investment in the inventories of the company. In the year 2013-14
inventories of the company was Rs 73,44,285 and the working capital
was 2,20,06,050. Here the company has invested normal in the
inventories. Which may be due to the company might be planning to
retain more stock for its future needs.

4.Graph Showing Required Working Capital

1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0

Working Capital

2010-11

2011-12

2012-13

Capital in Rs

2013-14

FOLLOEING TABLE SHOWS THE PROFIT ANALYSIS FOR LAST

FOUR YEARS

YEARS

PROFIT IN RS

2010-11

63,223

2011-12

4,60,840

2012-13

20,51,204

2013-14

9,01,524

ANALYSIS

The above table shows the net profit after tax during the year
2008-2009. The firm has earned a net profit of Rs 63,223 because of
the good management policy maintained by the firm. In the year 201112 the profit of the firm is Rs 4,60,840 which is very high under these
circumstances. The profit has increased in many fold compared to the
previous year. In the year 2012-13 the profit of the firm has crossed 20
lakhs, which is Rs20,51,204 which is a very great thing because there
are hardly a few competes in the world which could grow like that
within the few year after its promotion, and the profit has increased
five time compared to its previous year, Which is a good thing to the
company. In the year 2013-14 the firms profit has gone down to Rs
9,01,524 which may be due to the decrease in the production, rejection
of steel casting and the cost of the plant & machinery would be quite
high.

5.Graph Showing Year of Profit

1200000
1000000
800000

Year Profit

600000
400000
200000
0

2010-11

2011-12

2012-13

2013-14