CHAPTER 1

INTRODUCTION
1.1 INTRODUCTION TO THE STUDY
In the modern times finance has become lifeblood of an organization whether
it is a corporate concern or a sister concern. The success of the organization greatly
depends on the proper utilization of available financial resources. Finance plays a
vital role in determining the strength and weakness of the concern. Since finance is
the most important factor in every enterprise, it requires special mention and
attention of the Management. The conventional approach to finance function in
business highlights the procurement of funds on the most economic and favorable
terms to the concern, but it ignores the efficient and effective use of the same for the
successful running of the enterprise.

In every organization funds are needed for various ventures and projects.
How much to allocate, when to allocate and how to allocate the required to the
particular projects deserves special attention in every concern. The management
has to look into the nook and corner of each project the amount of funds necessary
for them and the source from which to arrange. Financial management plays a vital
role in procurement, allocation and control of funds.

The basis for financial planning and analysis is financial information. Financial
information is needed to predict, compare and evaluate the firms earning ability. It is
also required to aid in economic decision making investment and financial decisionmaking. The financial information of an enterprise is contained in the financial
statements or annual reports. It contains summarized information of the firms affairs
organized systematically. They are the means to present the firms financial situation
to owners, creditors and general public. Preparation of these statements is the
responsibility of the top management. It should be prepared carefully with as much
information in order to give the required information to the shareholders, creditors
etc., after duly recognizing the importance of financial statement analysis, this topic
has been chosen as the focus of project.

The performance of finance function is more important for ensuring the

achievement of business goals. In the conventional method the performance of
finance disclosing final accounts namely did function: trading, profit and loss account
and balance sheet. It normally satisfied the concerned business namely: share
holders, creditors, customers and so on. But it may not be helpful for the
management to take effective decisions, therefore exists a need to provide accurate
information internally to access financial performance. Financial analysis provides
information relating to the conduct of various aspects of business in such way, in
order to assist management in the creation of policy and the day-to-day operations of
an undertaking.

1.2 INTRODUCTION OF THE COMPANY

Visaka is a diversified Company incorporated in 1981 and manfactures products

that capitalise improvement in life style standards in India and Abroad. The
Company was started as a joint venture company promoted by Dr.Vivekanand, a first
generation entrepreneur and the Andhra Pradesh Development Corporation . In
1989, APIDC divested its holdings in favour of Dr. G. Vivekanand.

Visaka Industries Limited was started in the year 1985. Since it has
become a multi- product / division company engagedin the business of Buliding
Products ( i.e. Asbestos Cement sheets, Reinforced Building Boards and
Sandwiched Panels ) and Synthetic Blended Yarn.

Since inception, the company has been showing consistent improvement in

operational front and has also been very consistent in paying dividend. A
combination of aggression and conservation translated into increased CAGR in
companys revenue at the rate of 12% in the last 5 years with a commanding position
in the industry.

1.3. OBJECTIVES OF THE STUDY

To know the strengths and weaknesses of the Visaka Industries Ltd. with
reference to finance functions.

To critically analyze the financial performance of the company with the help of
ratios.

To highlight the operational efficiency with the help of fund flow and cash flow
analysis.

To analyze, interpret and to provide for the operational efficiency of the

company by comparing the balance sheets and profit and loss account.

To suggest measures for effective utilization of financial resources.

To highlight the shortcomings in the area of finance and to put forth

recommendations with a view to increasing the efficiency of the company.

1.4 SCOPE OF THE STUDY

The study aims at analyzing the overall financial performance of the company
by using various tools. It covers a total period of 5 years from 2010-11 to 2014 2015.

1.5. RESEARCH METHODOLOGY

Research methodology is a new way to systematically solve the research

problem. It is a science of studying how research is done. The research design used
here is analytical type of research which means the research undergone on the basis
of facts & information readily available. Analytical type of research does not deal with
any assumptions or anticipations. The analysis of financial statement requires.
Methodical classification of data.
Comparison of various inter-connected figures with each other by different tools
of financial analysis.

Techniques or Tools Used In Financial Analysis

The following are the major tools used in financial analysis and interpretation.

Comparative financial statements.

Common size financial statements

Funds flow statement.

Cash flow statement.

Ratio analysis.

Trend percentages.

1.6 LIMITATIONS OF THE STUDY

Financial statement is only in terms of reports .They are not final because the
exact financial position can be known only when the business is closed.

Financial statements are prepared on the basis if certain accounting concepts

and conventions any changes in the method or procedure of accounting limit
the utility of financial statements.

Time has been a limiting factors and it has been difficult to analysis the
various aspects of finance with the prescribed time.

The authenticity of the Financial Statements has not been checked with book
of accounts of the company.

Financial statement do not depict, which cannot be expressed in terms of

many for sample developed of a team of loyal and efficient

workers

,enlightened Management, the reputation and prestige of Management.

CHAPTER 2
REVIEW OF LITERATURE

2.1 INTRODUCTION OF FINANCIAL STATEMENTS

A financial statement is an organized collection of data according to logical
and consistent procedures. Its purpose is to convey an understanding of some
financial aspects of a business firm. It may show a position at a moment of time as in
the case of a balance sheet, or may reveal a series of activities over a given period
of time, as in the case of an income statement. Thus the term financial statements
generally refer to four basic statements.

The Income statement

The Balance Sheet

A statement of retained earnings

Statement of changes in financial position

INCOME STATEMENTS
The Income statement is generally considered to be the most useful of all
financial statements. It explains what has happened to a business as a result of
operations between two balance sheet dates. For this purpose it matches the
revenues and costs incurred in the process of earning revenues and shows the net
profit earned or loss suffered during a particular period.

BALANCE SHEET
It is a statement of financial position of a business at a specified moment of
time. It represents all assets owned by the business at a particular moment of time
and the equities of the owners and outsiders against those assets at that time. The
important distinction between an Income statement and a Balance sheet is that the
Income statement and a Balance sheet is that the income statement if for a period of
time while balance sheet is on a particular date. Income statement is therefore a flow
report, as contrasted with a balance sheet, which is a static report. However, both
are complementary to each other.

STATEMENT OF RETAINED EARNINGS

The term retained earnings means the accumulated access of earnings over
losses and dividends. The balance shown by the income statement is transferred to
the balance sheet through this statement, after making necessary appropriations. It
is thus, a connecting link between the balance sheet and the income statements.
This statement is also termed as profit and loss appropriation account in case of the
companies.
COMPARATIVE FINANCIAL STATEMENTS
Comparative financial statements are those statements, which have been
designed in a way so as to provide time perspective to the consideration of various
elements of financial position embodied in such statement. In these statements
figures for two or more periods are placed side by side to facilitate comparison.
COMPARATIVE INCOME STATEMENT
Income statement discloses net profit or net loss on account of operations. A
comparative income statement will show the absolute figures for two or more
periods, the absolute changes from one period to another and if desired the changes
in terms percentages. Thus, only a reading of data included in comparative income
statements will be helpful in deriving meaningful conclusions

COMPARATIVE BALANCE SHEET

Comparative balance sheet as on two or more different data can be used for
comparing assets and liabilities and findings out any increase or decrease in those
items. Thus while a single balance sheet the emphasis is on present position, it is
change in the comparative balance sheet is very useful in studying the trends in an
enterprise.
The presentation of comparative financial statements in annual and other
reports enhance the usefulness of such reports and brings out more clearly the
nature and trend of current changes affecting the enterprise such presentation
emphasis the fact that statement for a series of period as are for more significant
than those of a single period and the accounts of one period are but an installment of
what is essentially a continuous history. In any one year, it is ordinarily desired that
the balance sheet, income statement and the surplus statement be given for one or
more preceding years as well as for the current year.

COMMON-SIZE FINANCIAL STATEMENTS

Common-size financial statements are those in which figures reported are

covered into percentages to some common base. In the income statement the sale
figure is assumed to be 100 and all figures are expressed as a percentage of sales.
Similarly in the balance sheet the total of assets or liabilities is taken as 100 and all
the figures are expressed as a percentage if this total.

FUNDS FLOW ANALYSIS

Funds flow analysis has become an important tool in the analytical kit of
financial analysts. The balance sheet of a business reveals its financial status at a
particular point of time. It does not sharply focus those major financial statements,
which have been behind the balance sheet. Funds flow analysis reveals the changes
in working capital position. It tells about the sources from which the working capital
was obtained and the purposes for which it were used. It brings to light the changes,
where have taken place behind the balance sheet/Working capital determines the
liquidity position of the firm. Working capital is being the lifeblood of the organisation,
such as analysis is extremely useful. A fund flow statements matches the funds
raised and funds applied during a particular period. The sources and application of
funds may be of capital as well as revenue in nature.

FUNDS FLOW STATEMENT

SOURCES

APPLICATIONS

# Issue of share capital

# Redemption of preference shares

# Sale of fixed assets

# Purchase of fixed assets

# Long term borrowings

# Payment of long term loans, tax and

dividends

# Operational profit

# Operational loss

CASH FLOW ANALYSIS

A statement of changes in financial position on cash basis, commonly known
as the cash flow statement, summarizes the causes of changes in cash position
between dates of two balance sheets. It indicates the sources and uses of cash. The
cash flow statement is similar to the funds flow statement, except that it focuses
attention on cash instead of working capital (funds). It shows the liquidity of a
company. Thus this statement analysis changes in non-current accounts as well as
current accounts (other than cash) to determine the flow of cash.

CASH FLOW STATEMENT

SOURCES OF CASH

USES OF CASH

# The Profitable operations of the firm

# The loss from operations

# Decrease in assets (except cash)

# Increase in liabilities
#

Sale

proceeds

ordinary/Equity share issue

# Decrease in assets (except cash)

from

an # Decrease in liabilities
# Redemption of redeemable preference

# Sale proceeds from preference share shares

issue

# Cash dividends

TREND PERCENTAGES
Trend percentages are immensely helpful in making a comparative study of
the financial statements for several years. The method of calculating trend
percentages involves the calculation of percentage relationship that each item bears
to the same item in the base year. Any year can be taken as the base year. It is
usually the earliest year. Any intervening year may also be taken as 100 and on that
basis percentages for each of the items of each of the years are calculated.
The method of trend percentage is useful analytical device for the
management since by substitution percentage for large amounts, the brevity and
readability are achieved. However, trend percentages are not calculated for all of the
items in the financial statements. They are usually calculated only for major items,
since the purpose is to highlights the important changes.

RATIO ANALYSIS
This is the most powerful tool available to financial analyst for their work.
Ratio analysis is a widely used tool of financial analysis. It is defined as the
systematic use of ratio to interpret the financial statements so that the strengths and
weaknesses of a firm as well as its historical performance and current financial
condition can be determined. The term ratio refers to the numerical or quantitative
relationship between two items/variables.

2.2 INDUSTRY PROFILE: CEMENT

India is the second largest producer of cement in the world. No wonder,

India's cement industry is a vital part of its economy, providing employment to
more than a million people, directly or indirectly. Ever since it was deregulated
in 1982, the Indian cement industry has attracted huge investments, both from
Indian as well as foreign investors.

India has a lot of potential for development in the infrastructure and

construction sector and the cement sector is expected to largely benefit from
it. Some of the recent major government initiatives such as development of 98
smart cities are expected to provide a major boost to the sector.

Expecting such developments in the country and aided by suitable

government foreign policies, several foreign players such as Lafarge-Holmic,
Heidelberg Cement, and Vic at have invested in the country in the recent past.
A significant factor which aids the growth of this sector is the ready availability
of the raw materials for making cement, such as limestone and coal.

Market Size
Cement demand in India is expected to increase due to governments push for large
infrastructure projects, leading to 45 million tones of cement needed in the next three
to four years.
India's cement demand is expected to reach 550-600 Million Tonnes Per Annum
(MTPA) by 2025. The housing sector is the biggest demand driver of cement,
accounting for about 67 per cent of the total consumption in India. The other major
consumers of cement include infrastructure at 13 per cent, commercial construction
at 11 per cent and industrial construction at nine per cent.
9

To meet the rise in demand, cement companies are expected to add 56 million tones
(MT) capacity over the next three years. The cement capacity in India may register a
growth of eight per cent by next year end to 395 MT from the current level of 366
MT. It may increase further to 421 MT by the end of 2017. The country's per capita
consumption stands at around 190 kg.
The Indian cement industry is dominated by a few companies. The top 20 cement
companies account for almost 70 per cent of the total cement production of the
country. A total of 188 large cement plants together account for 97 per cent of the
total installed capacity in the country, with 365 small plants account for the rest. Of
these large cement plants, 77 are located in the states of Andhra Pradesh,
Rajasthan and Tamil Nadu.

Investments
On the back of growing demand, due to increased construction and infrastructural
activities, the cement sector in India has seen many investments and developments
in recent times.
According to data released by the Department of Industrial Policy and Promotion
(DIPP), cement and gypsum products attracted Foreign Direct Investment (FDI)
worth US$ 3.101 billion between April 2000 and December2015.
Some of the major investments in Indian cement industry are as follows:

India's largest cement maker UltraTech Cement is looking forward to acquire

Jaiprakash Associates six cement factories for a total value of Rs 16,500
crore (US$ 2.42 billion)

Birla Corporation Ltd, a part of the MP Birla Group, has agreed to acquire two
cement assets of Lafarge India for an enterprise value of Rs 5,000 crore (US$
733.6 million).

Dalmia Cement (Bharat) Ltd has invested around Rs 2,000 crore (US$ 293
million) in expanding its business in North East over the past two years. The
company currently has three manufacturing plants in the region one in
Meghalaya and two in Assam.

JSW Group plans to expand its cement production capacity to 30 MTPA from
5 MTPA by setting up grinding units closer to its steel plants.

10

UltraTech Cement Ltd has charted out its next phase of Greenfield expansion
after a period of aggressive acquisitions over the last two years. UltraTech
has plans to set up two Greenfield grinding units in Bihar and West Bengal.

UltraTech Cement Ltd bought two cement plants and related power assets of
Jaiprakash Associates Ltd in Madhya Pradesh for Rs 5,400 crore (US$ 792.3
million).

JSW Cement Ltd has planned to set up a 3 MTPA clinkerisation plant at

Chittapur in Karnataka at an estimated cost of Rs 2,500 crore (US$ 366.8
million).

Andhra Cements Ltd has commenced the commercial production in the

company's cement plants Durga Cement Works at Dachepalli, Guntur and
Visakha Cement Works at Visakhapatnam.

Government Initiatives
In the 12th Five Year Plan, the Government of India plans to increase investment in
infrastructure to the tune of US$ 1 trillion and increase the industry's capacity to 150
MT.
The Cement Corporation of India (CCI) was incorporated by the Government of India
in 1965 to achieve self-sufficiency in cement production in the country. Currently,
CCI has 10 units spread over eight states in India.
In order to help the private sector companies thrive in the industry, the government
has been approving their investment schemes. Some such initiatives by the
government in the recent past are as follows:

Budget 2016-17 has proposed a slew of measures to boost infrastructure and

investment, which will be positive for the cement sector, as increased
spending on infrastructure increases the demand for cement. 100 per cent
deduction for profits to an undertaking in housing project for flats upto 30
square meters in four metro cities and 60 square meters in other cities
approved during June 2016 to March 2019 and completed in three years
o

Incremental spend on smart city development, the government has

allocated Rs 7,296 crore (can give USD figures) towards Urban
Rejuvenation Mission (AMRUT and Mission for Development of 100
Smart Cities

Rise in allocation under Pradhan Mantri Gram Sadak Yojana (PMGSY)

to Rs 19,000 crore (US$ 2.79 billion) for FY17.
11

The Government of India plans to enact a law that will allow the companies
which have received mining licenses without having gone through the auction
process, to transfer these leases, in a move that is expected to make mergers
and acquisitions (M&As) easier in the steel, cement, and metals sectors.

The Government of Tamil Nadu has launched low priced cement branded
'Amma' Cement. The sale of the cement started in Tiruchi at Rs 190 crore
(US$ 27.9) a bag through the Tamil Nadu Civil Supplies Corporation
(TNCSC). Sales commenced in five go downs of the TNCSC and will be rolled
out in stages with the low priced cement available across the state from 470
outlets.

The Government of Kerala has accorded sanction to Malabar Cements Ltd to

set up a bulk cement handling unit at Kochi Port at an investment of Rs 160
crore (US$ 23.5 million).

The Andhra Pradesh State Investment Promotion Board (SIPB) has approved
proposals worth Rs 9,200 crore (US$ 1.35 billion) including three cement
plants and concessions to Hero Motorcar project. The total capacity of these
three cement plants is likely to be about 12 MTPA and the plants are
expected to generate employment for nearly 4,000 people directly and a few
thousands more indirectly.

India has joined hands with Switzerland to reduce energy consumption and
develop newer methods in the country for more efficient cement production,
which will help India meet its rising demand for cement in the infrastructure
sector.

The Government of India has decided to adopt cement instead of bitumen for
the construction of all new road projects on the grounds that cement is more
durable and cheaper to maintain than bitumen in the long run.

12

2.3 COMPANY PROFILE:

Visaka is a diversified Company incorporated in 1981 and manfactures products
that capitalise improvement in life style standards in India and Abroad.

The

Company was started as a joint venture company promoted by Dr.Vivekanand, a first

generation entrepreneur and the Andhra Pradesh Development Corporation . In
1989, APIDC divested its holdings in favour of Dr. G. Vivekanand.

Visaka Industries Limited was started in the year 1985. Since it has
become a multi- product / division company engagedin the business of Buliding
Products ( i.e. Asbestos Cement sheets, Reinforced Building Boards and
Sandwiched Panels ) and Synthetic Blended Yarn.

Since inception, the company has been showing consistent improvement in

operational front and has also been very consistent in paying dividend. A
combination of aggression and conservation translated into increased CAGR in
companys revenue at the rate of 12% in the last 5 years with a commanding position
in the industry.
The Companys shares are listed on mumbai and National Stock Exchange and the
market capitalization as on 30th September 2013 in Rs. 117 Crores. It has corporte
office in Secunderbad with manfacturing units across India as listed below.

13

Plant Address
S.
No
1.

A.C Division Plant 1

Survey No. 315, Yelumala Village, R.C. Puram mandal, Medak District,
Andhra Pradesh 502 300

2.

A.C Division Plant 2

Behind Supa Gas, Manickanantham Village, Paramanthi Velur District ,
Tamil nadu 637 207

3.

A.C Division Plant 3

Changsole Mouza , Bankibund, G.P No. 4, Salboni Block, Midnapore
West Bengal 721 147

4.

A.C Division plant 4

Survey No. 27/1, G. Nagenahalli Village, Kora Hobli, TumkurTalak &
District, Karnataka

5.

A.C Division Plant 5

Village Kaannawan, P.S. Bacharawan, Tehsil: MaharajGanj Raibareli
District, Uttar Pradesh - 229 301

6.

A.C District Plant 6

Servay No. 385 and 386, Near Kanchikarcharla, Jujjuru ( Village ),
Veerula Padu Mandal, Krishna District , Andhra Pradesh 521 181

7.

A.C District Plant 7

Plot No. 2006, 1994 Khata No. 450, Survey No.179 & 180, AtManejwan,Navamunda Village , Sambalpur District, Odisha- 768 200

14

8.

A.C Division Plant 8

Gat.No. 70/3A/1B/1C, Sahajpur Industries Areas, Nandur ( Village ),

Daund ( Taluk ), Pune ( District ) 410 202, Maharastra
9.

Textile Division

Survey No. 179 & 180, Chiruva Village, Maudha Taluq, Nagpur District,
Maharastra
10.

V Board Division 1

Survey No. 95 & 96, Gajalapuram Village, Near Miryalguda P.O

Pedadevullapally Mandal Tripuraram Adjacent to Kukkadam Railway
Station Nalgonda District, Andha Pradesh 508 207

11.

V- Boards Division -2

Gatt No. , Delwadi Village, Daund Talaq, District Pune, Maharastra.

In addition , it is in the process of setting up a 2.50 Mega Watt Solar Plant at

Miryalaguda.

15

PRODUCTS AND LOCATIONS :

PRODUCT

CEMENT

MANUFACTURING

INSTALLED CAPACITY(

LOCATIONS

MAR. 31ST 2014 )

Patancheru ( Andha

7,520,000

Pradesh )
Vijayawada (
Asbestos

Andhra Pradesh )
Paramathi ( Tamil

Products

Nadu)
Tumkur ( Karnataka)
Midnapur ( West
Bengal )
Rae Bareli ( Uttar
Pradesh )
Pune ( Maharastra)
Sambalpur ( Odisha
)

Fibre cement

Miryalguda ( Andhra

1,29,750

Pradesh )
Daund (
Flat board

Maharashtra )

Products
Textiles

Nagpur (

31 MTS M/CS

Maharashtra )

FIBRE CEMENT SHEET :

VISAKAS high tech Fibre Cement plant is a fully automated factory incorporating
the latest and the most sophiscated technology, resulting in consistency in physical
properties and strength, which far exceeds the standards prescribed by I.S.I

16

MISSION AND VISION STATEMENT OF THE COMPANY

MISSION :

Visaka stands for Integrity and disciplined hard work.

VISION :
To be the leader in building products and textile bt leveraging the technology and
by meeting the ever changing- needs of the customers

SWOT ANALYSIS :
Viska Industries Limited dynamic and strategic SWOT analysis - Strength,
Weakness , Opportunities , Threats of Visaka Industries.

The dynamic and strength SWOT analysis of Visaka Indistries Limited prvides
a strategic SWOT analysisof the companys business and operations. The profile
shows a comprehensive view of the companys key strength and weakness and the
potential opportunites and threats.

STRENGTH :

ACHIVEMENTS AND REWARDS :

Divesified and implemented a totally new technology Air Jet Spinning in
the year 1991 and became the Worlds set up for manufacture of Twin
Air Jet Spun Yarn.

Steady

Growth Growth from a single product single locaton

company. The turnover of the company has grown from Rs. 5 crores to
Rs. 918 crores over a period of 28 years.

As social responsibility, C ompany established Charitable Trust to

support initatives that benefit the Society at large.
17

VISAKA now is the second largest in the Asbestos Cement Industry.

Highest productivity award from the government of Andhra Pradesh for
the year 1987.

Best Enrepreneur of the year award from theCouncil for Industrial and
Trade Development for the year 1990-91.

Highest Productivity award from the Council for Industrial and Traded
Development for the year 1995.

Best Industrial award from the Government of Tamil Nadu for the year
2000.

Best performance in large and Medium Sector for the year 200
awarded by All India Manufacturers Organisation , Andhra Pradesh
State Board.

A.P Distinguished Industrialist Award for the year 2003 awarded by

Exhibition Society.

Good quality sercives are available at lower cost

India has a good supply of fibre sheets
Mainly used in roofing and faade products because of its strength and
durability.
WEAKNESS :

The turnover of the company is rs.146 crores but the competitors are showing
rs.150 crores. Its its only limited to the companys turnover but not the
competitors.
Less design of fiber sheets
The company produces the fibre sheets only were there is excess of turnover
Many competitors have english language and computer skills.
18

OPPORTUNITES :

Opening the new branches in strategic locations.

Increasing the cement and fifre sheets. ( V boards and V panels)
Providing the best supply of fibre sheets to their competitors.
THREATS :

Increasing the power and supply in the nearer future market.

Increasing the competitors.

COMPETITORS OF VISAKA INDUSTRIES:

Company Name

Current
Price

Previous
Price

High
Price

Low
Price

Hyderabad Industries Ltd.

582.00

673.00

582.00

571.05

Indian Hume Pipe

Company Ltd.

343.20

364.80

352.45

343.20

Eternit Everest Ltd.

306.50

314.10

307.00

300.00

Ram co Industries Ltd.

122.75

115.60

124.90

120.85

Sanghi Industries Ltd.

73.85

49.50

75.25

73.50

19

CHAPTER 3
DATA ANALYSIS AND INTERPRETATION

The Analysis and Interpretation of financial statements are an attempt to

determine the significance and meaning of the financial statements date so that a
forecast may be made on the prospectus for future earnings, ability to pay interest
and debt upon maturity(both current and long term) and probability of a sound
dividend policy. The analysis and interpretation of financial statements includes four
major steps. They are as follows:

Analysis of each transaction to determine the accounts to be debited and

credited and the valuation of each transaction to determine the amounts
involved.

Recording the information in books of original entry, classified in the ledger,

and preparation of a trail balance.

Preparation of financial statement.

The presentation of information that will aid business executives, investors

and creditors.

The

analysis

and

interpretation

of

financial

statements

require

comprehensive intelligent understanding of their nature and limitation.

As well as the determination of the monetary valuation of the item, at the time
of analysis, the analyst must understand what represents sound as well as unsound
relationship among the items of interest included in the financial statements. The
process of analyzing financial statements involves the completion and study of
financial and operating data and the preparation and interpretation of measuring
devices such as ratios, trends, comparative balance sheet and common size balance
sheet.

20

DATA ANALYSIS AND INTERPRETATION

Table No 3.1.1
COMPARATIVE BALANCE SHEET ANALYSIS

(Rs. In crores)
Particulars

Application

2010

2011

Absolute

Inc./Dec.

Inc./Dec.

of

funds
Fixed assets

207.76

210.46

+2.7

+1.2

Total fixed assts

207.76

210.46

+2.7

+1.2

Current assets

109.44

287.86

+178.42

+163.02

Loan and advance

78.26

16.24

-62.02

-79.2

Investments

2.30

14.97

+12.67

+50.86

Miscellaneous

397.76

538.53

+140.77

+35.4

Share capital

15.92

15.92

Reserve & surplus

219.81

245.43

+25.62

+11.6

Non-current

45.94

45.37

-0.57

-1.24

231.81

+115.72

+99.6

538.53

+140.77

+35.4

Current assets
and loan and
advances

expenses
Total assets
Source of funds

liabilities
Current

liabilities 116.09

and provision
Total Liabilities

397.76

21

of

INTERPRETATION 2010-2011
It is observed that the fixed assets have been increased to 1.2%
for the year 2010-2011
The current assets have increased by 63.02%
Investment have increased by 50.86%
Loan and advances have decreased by 79.2% over the previous
year
Reserves and surplus have been increased by 11.6% over the
previous year
Current liabilities increased by 99.6% over the previous year and
the position of the company is satisfactory

22

Table No. 3.1.2

COMPARATIVE BALANCE SHEET ANALYSIS

(Rs. In Crores.)

Particulars

2011

Application

2012

Absolute

Inc./Dec.

Inc./Dec.

of

funds
Fixed assets

210.46

248.42

+37.96

+18

Total fixed assts

210.46

248.42

+37.96

+18

Current assets

287.86

299.67

+11.81

+4.1

Loan and advance

16.24

16.28

+0.04

+0.02

Investments

14.97

15.06

+0.09

+0.6

Miscellaneous

538.53

573.82

+35.29

+6.5

Share capital

15.92

15.92

Reserve & surplus

245.43

270.56

+110.23

+10.2

Non-current

45.37

48.8

+3.43

+7.5

238.54

+6.73

+2.9

573.82

+35.29

+6.5

Current assets and

loan and advances

expenses
Total assets

Source of funds

liabilities
Current

liabilities 231.81

and provision
Total Liabilities

538.53

23

of

INTERPRETATION 2011-2012
It is observed that the fixed assets have been decreased to 18%
for the year 2011-2012
The current assets have increased by 4.1%
Investment have increased by 0.6%
Loan and advances have decreased by 0.02% over the previous
year
Share capital remains constant over the period.
Reserves and surplus have been increased by 10.2% over the
previous year
Current liabilities increased by 2.9% over the previous year and
the position of the company is satisfactory

24

Table No. 3.1.3

COMPARATIVE BALANCE SHEET ANALYSIS
(Rs. In crores )
Particulars

2012

2013

Absolute inc. % of inc. /dec.

/ dec.

Application

of

funds
Fixed assets

248.42

266.31

+17.89

+7.2

Total fixed assts

248.42

266.31

+17.89

+7.2

299.67

418.96

+119.29

+39.8

and 16.28

25.99

+9.71

+59.6

Investments

15.06

15.07

+0.1

+0.06

Miscellaneous

573.82

739.82

+166

+28.9

15.92

15.92
310.13

+39.57

+14.6

77.29

+28.49

+58.3

336.48

+97.94

+41

739.82

+166

+28.9

Current
and

assets

loan

and

advances
Current assets
Loan
advance

expenses
Total assets

Source of funds
Share capital
Reserve

and 270.56

surplus
Noncurrent

48.8

liabilities
Current liabilities 238.54
and provision
Total Liabilities

573.82

25

INTERPRETATION 2012 -2013

It is observed that the fixed assets have been increased to 7.2%
for the year 2012-2013
The current assets have increased by 39.8%than the previous
year
Investment has increased by 59.6% compare to the previous
year.
Loan and advances have decreased by 31.98% over the
previous year
Share capital remains constant over the period.
Reserve and surplus have been increased by 14.6%
Current liabilities decreased by 41% over the previous year the
financial position of the company is not in good position.

26

Table No. 3.1.4

COMPARATIVE BALANCE SHEET ANALYSIS
(Rs. In crores )
Particulars

2013

2014

Absolute

%of

inc./dec.

inc/dec

Fixed assets

266.31

355.44

+89.1

+33.4

Total fixed assets

266.31

355.44

+89.1

+33.4

Current assets

299.67

340.64

+40.97

+13.6

Loan and advance

25.99

29.75

+3.76

+14.4

Investments

15.07

15.07

Total assets

739.82

728.42

-11.4

-1.5

15.92

15.92

317.45

+7.32

+2.3

125.82

+48.53

+62.7

269.23

-67.25

-19.9

728.42

-11.4

-1.54

Current assets and

loan and advances

Source of funds
Share capital
Reserves

and 310.13

surplus
Non-current

77.29

liabilities
Current

liabilities 336.48

and provision
Total Liabilities

739.82

INTERPRETATION 2013-2014
It is observed that the fixed assets have been decreased by
33.4% over the previous year.
The current assets have increased by 13.6%
Share capital remains constant over the period.
Reserve and surplus have been increased by 2.3% over the
previous year
Current liabilities decreased by 19.9% over the previous year

27

Table No. 3.1.5

COMPARATIVE BALANCE SHEET ANALYSIS
(Rs. In Crores)
Particulars

2014

2015

Absolute

% of inc./dec.

inc./dec.
Application of
funds
Fixed assets
Total

355.44

312.57

-42.87

-12.06

fixed 355.44

312.57

-42.87

-12.06

443.78

+103.14

+30.02

36.69

+6.94

+23.33

assets
Current assets
and loan and
advances
Current assets
Loan

340.64

and 29.75

advance
Investments

15.07

14.58

-0.49

-3.25

Miscellaneous

Deferred tax

0.57

0.58

+0.01

+1.7

Total assets

728.42

790.22

+61.8

+8.4

15.92

15.92

and 317.45

316.26

-1.19

-0.37

125.82

119.39

-6.43

-5.11

269.23

338.65

+69.42

+25.7

expenses

Source

of

funds
Share capital
Reserve
surplus
Non-current
liabilities
Current
liabilities

and

provision

28

INTERPRETATION 2014-2015
Fixed assets have been decreased to 12.06%
The current assets have increased by 30.02%
Investment have decreased over the previous year by 2.25%
Loan and advances have decreased by 23.33% over the
previous year
Share capital remains constant over the period.
Reserve and surplus have been decreased by 0.37%
Current liabilities decreased by 25.7% over the previous year

29

Table no. 3.2.1

COMMONSIZE BALANCE SHEET FOR THE YEAR 2010-2011

(Rs. in Crores.)
Particulars

2010

2011

Fixed assets

207.76

52.2

210.46

39.8

Total fixed assets

207.76

52.2

210.46

3.98

Current assets

109.44

27.5

287.86

53.4

Loan and advances

78.26

19.67

16.24

3.01

Investment

14.97

2.78

Miscellaneous expenses

100

538.53

100

Current assets and loan

advances

Total assets

397.76

LIABILITIES
Share capital

15.92

15.92

2.95

Reserve & surplus

219.81

55.26

245.43

45.57

Non-current liabilities

45.94

11.54

45.37

8.42

and 116.09

29.1

231.81

43.04

397.76

100

538.53

100

Current

liabilities

provision
Total liabilities

INTERPRETATION:

The percentage of current asset to total current Asset was 27.5% in 2010. It
has gone up to 53.4% in 2011. Fixed Assets have come down to 3.98% in the year
2011&. Share capital was constant for both the years. Reserve and surplus have
decreased to 45.57% . The overall financial position of the company is satisfactory.

30

Table No. 3.2.2

COMMONSIZE BALANCE SHEET FOR THE YEAR 2011-2012

(Rs. In Crores.)
Particulars

2011

2012

Fixed assets

210.46

39.8

248.42

43.2

Total fixed assets

210.46

3.98

248.42

43.2

Current assets

287.86

53.4

299.67

52.22

Loan and advances

16.24

3.01

16.28

2.83

Investment

14.97

2.78

15.06

2.62

Miscellaneous expenses

Total assets

538.53

100

573.82

100

Share capital

15.92

2.95

15.92

2.77

Reserve & surplus

245.43

45.57

270.56

47.1

Non-current liabilities

45.37

8.42

48.8

8.50

43.04

238.54

41.5

100

573.82

100

Current assets and loan

advances

Liabilitie7

Current liabilities and 231.81

provisions
Total liabilities

538.53

INTERPRETATION:

Fixed Assets have come down from 39.8% to 43.2% and current assets
decreased from 53.44 to 52.22 in 2012. Current liabilities and provision have come
down to 41.5% in the year 2012.. Reserve and surplus have increased for 47.71% in
the

year

2012.

Both

The

Position

31

of

the

company

quite

satisfactory.

Table No. 3.2.3

COMMONSIZE BALANCE SHEET FOR THE YEAR 2012-2013
(Rs. in crores)
Particulars

2012

2013

Fixed assets

248.42

43.2

266.31

35.99

Total fixed assets

248.42

43.2

266.31

35.99

Current assets

299.67

52.22

299.67

40.50

Loan and advances

16.28

2.83

25.99

3.51

Investment

15.06

2.62

15.07

2.03

Miscellaneous

573.82

100

739.82

100

Share capital

15.92

2.77

15.92

2.15

Reserve & surplus

270.56

47.1

310.13

41.9

Non-current liabilities

48.8

8.50

77.29

10.4

41.5

336.48

45.4

100

739.82

100

Current assets and

loan advances

expenses
Total assets

Liabilities

Current

liabilities 238.54

and provision
Total liabilities

573.82

INTERPRETATION:

Fixed assets have decreased from 43.2% to 35.99% in the year 2013. Current
Asset is also decreased to 40.55% in the year 2013. Investments have decreased to
2.03%. Share capital was constant.. Current liabilities were increased to 45.4. The
company position is not good

32

Table No. 3.2.4

COMMONSIZE BALANCE SHEET FOR THE YEAR 2013-2014
(Rs.in crores)
Particulars

2013

2014

Fixed assets

266.31

35.99

355.44

48.7

Total fixed assets

266.31

35.99

355.44

48.7

Current assets

299.67

40.50

340.64

46.76

Loan and advances

25.99

3.51

29.75

4.08

Investment

15.07

2.03

15.07

2.06

Miscellaneous expenses

Total assets

739.82

100

728.42

100

Share capital

15.92

2.15

15.92

2.18

Reserve & surplus

310.13

41.9

317.45

43.5

Non-current liabilities

77.29

10.4

125.82

17.27

45.4

269.23

36.96

100

728.42

100

Current

assets

and

loan advances

Liabilities

Current liabilities and 336.48

provision
Total liabilities

739.82

INTERPRETATION:

Fixed assets were 35.99% in the year 2013 and it rise to 48.7% in the year
2014. Current Asset have increased to 46.76% share capital was constant. current
liabilities and provision have came down to 36.96 for the year 2014. Comparatively
last two years the position of the company is improved.

33

Table No. 3.2.5

COMMONSIZE BALANCE SHEET FOR THE YEAR 2014-2015
(Rs. In crores)
Particulars

2014

2015

Fixed assets

355.44

48.7

312.57

39.55

Total fixed assets

355.44

48.7

312.57

39.55

Current assets

340.64

46.76

443.78

55.4

Loan and advances

29.75

4.08

36.69

4.64

Investment

15.07

2.06

14.58

1.84

Miscellaneous expenses

Deferred tax

0.57

0.078

0.58

0.073

Total assets

728.42

100

790.22

100

Share capital

15.92

2.18

15.92

2.01

Reserve & surplus

317.45

43.5

316.26

40.02

Non-current liabilities

125.82

17.27

119.39

15.10

and 269.23

36.96

338.65

4.89

100

790.22

100

Current

assets

and

loan

advances

Liabilities

Current

liabilities

provision
Total liabilities

728.42

INTERPRETATION:

Fixed asset was decreased to 39.55% and current asset was increased to
57.44 and investment was fluctuating. Reserve and surplus decreased to 40.02%
.current liabilities and provision increased to 40.89% in the year 2015. The position
of the company not satisfactory.

34

Table No. 3.3.1

SCHEDULE OF CHANGES IN WORKING CAPITAL
(Rs. In Crores)

Effect on changes in working

PARTICULARS

2010

2011

capital
Increase

Decrease

Current Assets
Debtors

50.76

69.48

Loans & Advances

78.26

16.24

62.04

Cash

60.87

53.85

7.02

(a)

Total

Current 189.89

18.72

287.86

Asset
CURRENT
LIABILITIES
Current Liabilities
(b)

Total

116.09

231.81

Current 116.09

231.81

115.72

Liabilities
(A- B)
Net

73.8
decrease

In

56.05
17.75

Working Capital

35

17.75

FUNDS FLOW STATEMENT FOR THE YEAR 2010 2011

(Rs. in Crores)
SOURCES AMOUNT

APPLICATIONS

AMOUNT

Increase in 16.8

FFO

26.74

secured
loan

Net

17.75

decrease

Purchase

of 12.67

Investments

in w.c
Decrease

in 5.85

unsecured loan
Total

45.26

45.26

Figure No. 3.3.1. a

Figure No. 3.3.1.b

INTERPRETATION:
The above table clearly indicates net decrease in working capital for the year 2010
2011.
In this table there was decrease in loan and advances, cash and current assets, and
Increase in Debtors. The value of provisions and current liabilities increased and this
table
Clearly indicates the position of Current Assts and Current liabilities and net
decrease
in working capital for the period. There was Rs. 26.4 Crore as funds from operation
for the year and rest was used for working capital.
36

Table No. 3.3.2

SCHEDULE OF CHANGES IN WORKING CAPITAL
(Rs. In Crores)
Effect on changes in working
PARTICULARS

2011

2012

capital
Increase

Decrease

Current Assets
Debtors

69.48

73.96

4.48

Loans & Advances

16.24

16.28

0.04

Cash

53.85

53.88

0.03

299.67

11.81

(a)

Total

Current 287.86

Asset
CURRENT
LIABILITIES
Current Liabilities
(b)

Total

231.81

238.54

6.73

Current 231.81

238.54

6.73

Liabilities
(A- B)
Net

56.05
Increase

61.13

In 5.08

Working Capital
61.13

61.13

37

FUNDS FLOW STATEMENT FOR THE YEAR 2011-2012

(Rupees in Crores)
SOURCES AMOUNT

APPLICATIONS

Issue

Net Increase in 5.08

of 2.12

debentures
FFO

AMOUNT

Working Capital
17.63

Purchase

of 0.09

Investments
Decrease in loan
Total

19.75

14.58
19.75

FigureNo3.3.1a

Figure No. 3.3.1.b

INTERPRETATION:
The above table clearly indicates net increase in working capital for the year
2011 2012. In this table there was increase in loan and advances, cash and current
assets, and increase in Debtors. The value of provisions and current liabilities
increased and this table clearly indicates the position of Current Assts and Current
liabilities and net increase in working capital for the period.

38

Table No. 3.3.3

SCHEDULE OF CHANGES IN WORKING CAPITAL
(Rs. In Crores)
PARTICULARS

2012

2013

Effect on changes in working

capital
Increase

Decrease

Current Assets
Debtors

73.96

86.27

12.31

Loans & Advances

16.28

25.99

9.71

Cash

53.88

33.59

Stock

155.55

273.11

117.56

Current 299.67

418.96

119.29

(a)

Total

20.29

Asset
CURRENT
LIABILITIES
Current Liabilities
(b)

Total

238.54

336.48

97.94

Current 238.54

336.48

97.94

Liabilities
(A- B)
Net

61.13
Increase

82.48

In 21.35

Working Capital
82.48

82.48

39

FUNDS FLOW STATEMENT FOR THE YEAR 2012- 2013

(Rupees in Crores)
Sources

Amount

Applications

Increase in loans

28.81

Net

Increase

Amount
in 21.35

Working Capital
Issue

of 28.49

debentures

Purchase

of 0.01

investments
FFO

Total

57.3

35.74
57.3

Figure No. 3.3.2.a

Figure No. 3.3.2.b

INTERPRETATION:
Net increase in the working capital for the period was 21.35and there was
increase in current assets and current liabilities have increase this also helps to
know the position of working capital available to me company for the effective
operations. The sources of funds are from sales to fixed assets, investments and
increasing loans in the case of application of funds. The company has utilized for the
loans.

40

Table No. 3.3.4

SCHEDULE OF CHANGES IN WORKING CAPITAL
(Rs. In Crores)
Effect

on

changes

Working Capital
PARTICULARS

2013

2014

Increase

Decrease

Stock on Hire

273.11

187.54

Debtors

86.27

97.25

10.98

Loan & Advance

25.99

29.75

3.76

Cash & Bank Balance

33.59

26.11

7.48

340.64

78.32

Current Assets

(a)

Total

Current 418.96

85.57

Asset
CURRENT
LIABILITIES
Current Liabilities
(b)

Total

336.48

269.23

67.25

Current 336.48

269.23

67.25

Liabilities
(A- B)
Net

82.48
decrease

71.41

In 11.07

Working Capital
71.41

71.41

41

in

FUNDS FLOW STATEMENTS FOR THE YEAR 2013 - 2014

(Rupees in Crores)
Sources

Amount

Net decrease in 11.07

Applications

Amount

Decrease in loan

22.21

FFO

37.39

w.c
Issue

of 48.53

debentures
Total

59.6

59.6

Figure No. 3.3.3.a

Figure No 3.3.3.b

INTERPRETATION:
There was Rs. 11.09 crores as net decrease in working capital and even
though the position of cash and Bank Balance, stock on hire, Debtors, Loans and
advance has gone up and current liabilities has gone down when co compared to the
previous year.
The major sources of debtors during the year was through loans, Fixed
Assets and in the case of application of funds the company has utilized for purchase
of investment but the project portion has gone for the effective utilization of Working
capital.

42

Table No. 3.3.5

SCHEDULE OF CHANGES IN WORKING CAPITAL
(Rs. In Crores)
PARTICULARS

2014

2015

Effect

340.64

443.78

working capital
Increase
Decrease
103.14
-

29.7

36.59

6.89

340.64

443.78

Current Liabilities

263.71

326.95

63.24

Provision

5.52

11.7

6.18

(b)Total Current liabilities

269.23

338.65

(A- B)

71.41

105.13

Current assets

Loan & Advance

(a) Total Current Asset

on

changes

in

103.14

CURRENT LIABILITIES

Net increase In Working 33.72

Capital
105.13

105.13

FUNDS FLOW STATEMENTS FOR THE YEAR 2014 - 2015

(Rupees in Crores)
Sources

Amount

Applications

Amount

Increase in loan

2.03

Net increase in w.c

33.72

Total

33.72

sale

of

Fixed 0.49

Assets
FFO

31.2

Total

33.72

43

Figure No. 3.3.4.a

Figure no 3.3.4.b

INTERPRETATION:
The company has a net increase in working capital for the period was 33.72.
In this table there was increase in loans & advance in the current Assets. Increase
current liabilities remains the same when compared to the previous year.
The major sources of funds during the year was through loans sources of
funds during the year was through loans in the case of application of funds during
the year was through purchase in Fixed Assets & Investment these was effective
utilization in Working Capital.

44

Table No. 3.4.1

CASH FLOW STATEMENT ANALYSIS (2010 2011)
CASH FROM OPERATION
(Rs. In Crores)
Dr

Cr

Particulars
To

Amount

Amount

By balance b/d

60.87

Miscellaneous -

Particulars

Expenses
To

increase 2.25

By

current liabilities
By

decrease

loans

Increase

in 18.72

debtors
in 62.02

By CFO

38.53

and

advances
Total Balance c/d

53.85

Total

118.12

Total

118.12

CASH FLOW STATEMENT

INFLOWS
Opening

AMOUNT
Cash 36.81

Balance
Increase

OUTFLOWS
Purchase

AMOUNT
of 12.67

Investment
Secured 16.68

CFO

38.53

loans
Sale of fixed asset

5.51

Closing Cash balance

7.80

Total

59

Total

59

INTERPRETATION:
The Company position with reference to cash from operation was good as
the position of cash was manageable and the major cash inflows are loans fixed
asset investments are purchased to 12.67 crores. This will help in further
establishment of the company. The CFO is valued as 38.53.

45

Figure No. 3.4.1. a

CASH INFLOWS

Figure No. 3.4.1. b

CASH OUTFLOWS

46

TABLE NO. 3.4.2

CASH FLOW STATEMENT ANALYSIS (2011 2012)
CASH FROM OPERATION
(Rs. In Crores)
Dr

Cr

Particulars
To

increase

Amount
in 0.04

Particulars

Amount

By balance b/d

53.85

Loan and Advance

To

increase 6.73

current liabilities

By

Increase

in 4.48

debtors

Total Balance c/d

53.88

CFO

2.32

Total

60.65

Total

60.65

CASH FLOW STATEMENT

INFLOWS
Opening

AMOUNT
Cash 7.80

Balance

OUTFLOWS
Purchase

AMOUNT
of 0.09

investments

CFO

2.32

Closing Cash balance

10.03

Total

10.12

Total

10.12

INTERPRETATION:
The Company position with reference to cash from operation was bad as
the position of cash was manageable and the major cash inflows are loans fixed
asset investments are purchased to 0.09 crores. This will help in further
establishment of the company. The CFO is valued as 2.32.
Figure No. 3.4.1.a

Figure No.3.4.1.b

CASH OUTFLOWS

CASH INFLOWS

47

TABLE NO. 3.4.3

CASH FLOW STATEMENT ANALYSIS (2012 2013)
CASH FROM OPERATION
(Rs. In Crores)
Dr

Cr

Particulars
increase

Amount

Current 97.94

Particulars

Amount

By balance

53.88

liabilities
To

decrease -

By increase loans 28.81

Miscellaneous

and advances

Expenditure
The CFO

75.12

By

Decrease 4.67

Provision
To Balance c/d

33.59

By

increasing 119.29

Current assets
Total

206.65

Total

206.65

CASH FLOW STATEMENT

INFLOWS

AMOUNT

Opening

Cash 10.03

OUTFLOWS

AMOUNT

CFO

75.12

Balance
Raising

of

Secured 36.13

Closing Cash Balance 53.64

Loan
Raising of un secured 82.66
Loan
Total

128.76

Total

483.43

INTERPRETATION:
The CFO was valued as 75.12. The Current Assets shows are increase of 119.29
and current liabilities shows are increase of 97.94 crores. These sales will reduce
the companys value in the market so it should be avoided.

48

Figure No. 3.4.2.a

CASH INFLOWS

Figure No. 3.4.2.b

CASH OUTFLOWS

49

TABLE NO. 3.4.4

CASH FLOW STATEMENT ANALYSIS (2013 2014)
CASH FROM OPERATION
(Rs. In Crores)
Dr

Cr

INFLOWS

AMOUNT

decrease in loans 22.21

OUTFLOWS

AMOUNT

By balance b/d

33.59

and Advances
To

decrease

By

Miscellaneous

decrease 67.25

Current liabilities

Expenditure
CFO

52.52

To Balance c/d

26.11

Total

100.84

Total

100.84

CASH FLOW STATEMENT

(Rs. In Crores)
INFLOWS
Opening

AMOUNT
Cash 53.64

OUTFLOWS

AMOUNT

CFO

52.52

Balance
Raising of Secured 32.15

Closing Cash Balance 30.89

Loan

Total

85.79

Decrease provision

2.38

Total

85.79

INTERPRETATION:
Current liabilities decreased to 67.25 Lakhs. The CFO in valued at 52.52.
The CFO is valued at 52.52 Crores.
22.21crores.
.

50

Decrease by loans and advances is

Figure No. 3.4.3.a

CASH INFLOWS

Figure No. 3.4.3.b

CASH OUTFLOWS

51

TABLE NO. 3.4.5

CASH FLOW STATEMENT ANALYSIS (2014 2015)
CASH FROM OPERATION
(Rs. In Crores)
Dr

Cr

Particulars
By

Amount

increase 69.42

Particulars

Amount

By balance b/d

26.11

Current liabilities
Increase

in 6.18

By

provision

increasing 103.14

Current assets

CFO

25.57

To balance b/d

28.08

Total

129.25

Total

129.25

CASH FLOW STATEMENT

(Rs. In Crores)
INFLOWS

AMOUNT

Opening Cash Balance

30.89

Raising

of

Secured 18.20

OUTFLOWS

AMOUNT

CFO

25.57

Loan
Raising of unsecured 21.15

Increase loans and 2.03

Loans

advance

sale of Fixed Assets

42.87

Deferred Tax

3.86

Closing Cash Balance 81.65

Total

113.11

Total

113.11

INTERPRETATION:

Current Asset has increased to 103.14 and Current liabilities had

increased to 69.12 lakhs. CFO is valued at 25.57 crores. The overall cash
position of the company is good. This will be helpful in further establishment of
the company. Increase secured loan should be unpaid in further years.
52

Figure No. 3.4.4.a

CASH INFLOWS

Figure No. 3.4.4. b

CASH OUT FLOWS

53

TABLE NO. 3.5

TREND ANALYSIS
PARTICULARS 2010

2011

2012

(Rs. In Crores %)
2013

2014

2015

PARTICULARS 2010 2011

LIABILITIES

ASSETS

SOURCES

APPLICATION

Share capital
Reserve

15.92 15.92

and 100

15.92

15.92

15.92

15.92

104.11 109.61 113.81 102.24 99.64

2012

2013

2014

2015

Fixed assets

100

97.34

120.86 102.21 133.8

93.3

Investment

100

65.0

100.6

100.05 100

96.74

100

116.7

96.43

153.9

129.80

& 100

20.75

100.24 159.6

surplus
Loans

and

Current assets

funds

and

loan&

advances
Secured loans

100

114.31 71.8

Unsecured

100

87.13

137.7

124.3

159.12 230.11 69.3

111.3

Current assets

120.9

Loan

loans
Current

79.9

114.46 113.21

advances
100

103.9

122.1

111.39 88.13

125.69 Miscellaneous

liabilities

100

expenses

Provision

100

10.30

207.08 62.08

69.8

211.9

Total liabilities

100

113.16 102.91 134.8

99.5

106.62 Total assets

54

100

113.16 102.91 134.8

99.5

106.62

Table No. 3.6.1

RATIO ANALYSIS
CURRENT RATIO
Current assets / Current Liabilities
Years

( Rs.In crores)

Current assets

Current

Current Ratio

Liability
2010-2011

287.86

231.81

1.241

2011-2012

299.67

238.54

1.256

2012-2013

418.96

336.48

1.245

2013-2014

340.64

269.23

1.265

2014-2015

443.78

338.65

1.310

Figure No. 3.6.1

Interpretation:
The current ratio initially stood at 1.24 for the year 2010 2011 and then it
has increased to 1.256 in the year 2011 20012 and in the next 3 years it was
increasing continuously. Finally current position of this ratio is 31 times. The
current ratio of times measures its short term solvency i.e. ability to meet short
term obligation. The higher the current ratio the lower the amount of Rs. available
for rupees of current liability. The greater the safety of funds short term creators
the company showed satisfactory working capital position as the current assets
31 times the current liabilities.

55

Table No. 3.6.2

FIXED ASSET RATIO

Fixed assets / Long term funds

( Rs.In crores)

Years

Fixed assets

Long term funds

Ratio

2010-2011

210.46

261.35

0.805

2011-2012

248.42

286.48

0.867

2012-2013

266.31

326.05

0.816

2013-2014

355.44

333.37

1.066

2014-2015

312.57

332.18

0.940

Figure No. 3.6.2

Interpretation

There is no diversion of long term funds, which is reflected in the

fluctuating position of the fixed assets ratio. The ratio is 0.805 in the year 2010
2011 and was increased to 0.867 in the year 2011 2012 and it was .816 and
1.066 in the year 2012 2013and 2013-2014.

56

TABLE NO. 3.6.3

DEBT - EQUITY RATIO

External Liabilities / Internal Equities

( Rs.In crores)

Years

External Equities

Internal Equities

Debt Equity Ratio

2010-2011

45.37

261.35

0.17

2011-2012

48.8

286.48

0.17

2012-2013

77.29

326.05

0.23

2013-2014

125.82

333.37

0.38

2014-2015

119.39

332.18

0.36

Figure No. 3.6.3

Interpretation:

The debt equities ratio shows a increased ratio when compare to the ideal
ratio during the year 2010-2011 and 2011 2012 the ratio stood at 0.17 and
0.17 and later it has been increased in all the year. The acceptable norms of ratio
is considered to be 2:1 the higher debt equity ratio is allowed in the case of
capital intensive companies a norms of 4:1 is used for fertilizers and cement units
and a norms of 6:1 is used for shipping units. A high ratio shows that the claims
of creditors are greater than those of Owners. A very high ratio is unfavorable
from the firms of view form the point of view of creditors it represents a not
satisfactory capital structure of the Business since, a low proportion of equity of
provides a less margin of safety for them.
57

Table No. 3.6.4

PROPRIETARY RATIO
Share holders fund / Total assets
( Rs.In crores)
Years

Share

holders Total assets

Ratio

funds
2010-2011

261.35

538.53

0.24

2011-2012

286.48

273.82

1.04

2012-2013

326.05

739.82

0.44

2013-2014

333.37

728.42

0.45

2014-2015

332.18

790.22

0.42

Figure No. 3.6.4

Interpretation:
The ratio is initially.24 and 1 .09 in the year 2010 2011 and

2011

2012 it has been decreased to 0.44 in the year 2012 2013 and in the year 2013
2014 it has increased to .45 and then it has decreased in the year 2014 2015
up to 0.42... The acceptable norms of the ratio is 1:3 the ratio shows the general
strength of the company higher the ratios indicters a secured position to creditors
and low ratio indicates greater risk to creditors the ratio below 50% may be
alarming for the creditors they may have to loss heavily in the event of companies
liquidation on account of heavy losses. The above table shows to loss heavily in
the event of companys liquidation on account of heavy losses.
58

Table No.3.6.5
CAPITAL GEARING RATIO
Long term loans/ equity share holders funds
Years

Long

term Equity

( Rs.In crores)
share Ratio

loans

holders funds

2010-2011

6.56

15.92

0.41

2011-2012

5.34

15.92

0.33

2012-2013

29.73

15.92

1.86

2013-2014

72.5

15.92

4.55

2014-2015

66.98

15.92

4.20

Figure No. 3.6.5

Interpretation:
Low gearing ratio indicates over capitalization and High gearing ratio
indicate over capitalization and it achieve fair capitalization the ratio was 0.44
times in the year 2010-2011 and it was continuously increased for the further
year. It showed a increase of 4.22 ratios for the year 2014-2015. It shows the
mix of the finance employed in the business. It indicates the proportion between
owners funds & non owners fund. If the ratio is high the capital gearing is said to
the high a if the ratio low the gearing is said to be low. The extent which capital is
get shows the speed with which the enterprise accelerating towards the corporate
goal. High gearing means more speed, low gearing means less speed. The
above table shows that the amount of capital is disproportionate to the needs
measured by the volumes of activity.
59

Table No. 3.6.6

CASH HOLDING RATIO

Cash on hand & Bank / Total assets x 100

( Rs.In crores)
Years

Cash on Hand & Total assets

Ratio

Bank
2010-2011

53.85

538.53

0.10

2011-2012

53.88

573.82

0.10

2012-2013

33.59

739.82

0.045

2013-2014

26.11

728.42

0.035

2014-2015

28.08

790.22

0.035

Figure No. 3.6.6

Interpretation:

The cash holding ratio is steadily increasing because of the increase in

both the components the ratio is initially 0.10 in 2010 2011 and decreased
0.10 in the year 2011 2012 and to 0.44 in the year 2012 2013 and decreased
to 0.35 in the year 2013 2014 and finally decreased to .35 in the year 2015.

60

Table No. 3.6.7

DEBT - ASSET RATIO

Long Term Liabilities / Total assets

( Rs.In crores)
Years

Debt

Total assets

Ratio

2010-2011

45.37

538.53

0.084

2011-2012

48.8

573.82

0.085

2012-2013

77.29

739.82

0.10

2013-2014

125.82

728.42

0.17

2014-2015

119.39

790.22

0.15

Figure No. 3.6.7

Interpretation:

The debt asset ratio is initially increasing year by year because of the
sizable increase in the secured and unsecured loans. The ratio is initially 0.84
and increased to 0.8 in the year 2011 2012 and then decreased to 0.15 and
was the same for the year 2014 2015.
61

Table No. 3.6.8

ABSOLUTE CASH RATIO

Cash & Bank Balance + Trade Investment / Current Liabilities

( Rs.In crores)
Years

Cash

Current

Ratio

Liabilities
2010-2011

123.33

231.81

0.53

2011-2012

127.84

238.54

0.54

2012-2013

119.86

336.48

0.35

2013-2014

123.36

269.23

0.45

2014-2015

156.98

338.65

0.46

Figure No. 3.6.8

Interpretation:

The cash ratio was initially 0.53 and it increased to 0.54 in the year 2011
2012 and started declining in the year 2012 2013 to 0.35 and finally it
increased to 0.46 in the year 2014 2015. The above table shows that the cash
ratio is less than the ideal ratio. The company has to think about the increase in
the lower liquidity. Generally 75% ratio is recommended to ensure liquidity. The
test if the ratio is 1:1, then the terms has enough cash on hand to meet all current
liabilities. The above table shows that less than 0.75:1
62

Table No. 3.6.9

FIXED ASSET TURNOVER RATIO

Sales/ fixed asset

( Rs.In crores)
Years

Sales

Fixed

Ratio

asset
2010-2011

652.71

210.46 3.10

2011-2012

750.04

248.42 3.01

2012-2013

914.8

266.31 3.43

2013-2014

892.1

355.44 2.50

2014-2015

1021.13

312.57 3.27

Figure No. 3.6.9

Interpretation:

This ratio determines efficiency of utilization of fixed assets and profitability

of a business concern the ratio was 3.10 in the year 2010-2011 and it decreased
in the year 2011-2012 to 3.01and it was increasing to 3.27 to the year 2014-2015.
It indicates the efficiency and profit earnings capacity of the firm. Higher the ratio,
greater is the intensive utilization of fixed assets. Lower ratio means under
utilization of fixed assets.
63

Table No. 3.6.10.

WORKING CAPITAL TURNOVER RATIO
Cost of Sales / Networking Capital X 100

Years

Sales

( Rs.In crores)

Networking Ratio (%)

capital

2010-2011

652.71

55.85

11.68

2011-2012

750.04

61.13

12.27

2012-2013

914.8

82.48

11.09

2013-2014

892.1

71.41

12.5

2014-2015

1021.13

105.13

9.71

Figure No. 3.6.10.

Interpretation
A higher ration is the indication of lower investment of working capital and
more profit. The ratio stood at 11.68 in the year 2010-2011 and it was increased
to 12.26 in the year 2011-2012 and it was in the declining stage only. It indicates
over and under trading and is harmful for the smooth conduct of business. If help
in determining the liquidity of a firms as such as its gives the rate at which
inventories are converted to sales and then to cash. A higher working capital turn
over ratio shows that there is low investment in working capital and there is more
profit. The above table shows that 11.68 to 9.71 it indicates to under trading.
64

Table No. 3.6.11

TOTAL INVESTMENT TO TOTAL ASSETS RATIO

Total investments / total assets

Years

( Rs.In crores)

Total

Total assets

Ratio

investments
2010-2011

14.97

538.53

0.028

2011-2012

15.06

573.82

0.026

2012-2013

15.07

739.82

0.020

2013-2014

15.07

728.42

0.020

2014-2015

14.58

790.22

0.018

Figure No. 3.6.11

Interpretation:

The ratio is initially 0.028 in the year 2010 2011 which decreased to
0.020 in the year 2012 2013 and decreased to 0.020 in the year 2013 2014
and finally it was decreased to 0.018 in the year 2014 2015.

65

Table No. 3.6.12

FINANCIAL EXPENSES RATIO

Financial Expenses / Sales X 100

Years

Financial

( Rs.In crores)

Sales

Ratio (%)

expenses
2010-2011

11.53

652.71

1.76

2011-2012

14.17

750.04

1.9

2012-2013

15.01

914.8

1.64

2013-2014

21.40

892.1

2.4

2014-2015

22.03

1021.13 2.1

Figure No. 3.6.12

Interpretation:

This ratio is also known as supporting ratio. During the year 2010-2011 it
showed 176 and 2012-2013 the year decreased 1.74% and again the financial
expenses increased to 2.1% in the year 2014-2015. This Ratio reveals that the
find out as how for the concern is able to save or is making over expenditure in
respect of different items of expanses. The lower the ratio the greater is the
profitability. The above table shows the same pattern.

66

Table No. 3.6.13

ADMINISTRATIVE EXPENSES RATIO

Administrative expenses/ sales *100

Years

Administrative

( Rs.In crores)

Sales

Ratio (%)

expenses
2010-2011

39.82

652.71

6.10

2011-2012

37.34

750.04

4.98

2012-2013

146.98

914.8

16.06

2013-2014

142.34

892.1

16.0

2014-2015

195.61

1021.13

19.16

Figure No. 3.6.13

Interpretation:
Administrative expenses for the year 2010 2011 stood at 6.10 of income
of the company. During the year 2012 2013 administrative expenses decreased
by 16.06 and again it decreased to 16 to 2013 2014 and during 2014 2015 it
increased to 19.16% of the income indicating control over these expenses have
been exercised. This Ratio reveals that the find out as how for the concern is able
to save or is making over expenditure in respect of different items of expanses.
The lower the ratio the greater is the profitability. The above table shows the
same pattern.
67

Table No. 3.6.14

NET PROFIT RATIO

Net profit/ sales*100

( Rs.In crores)

Years

Net profit

Sales

Ratio (%)

2010-2011

43.4

652.71

6.65

2011-2012

36.31

750.04

4.84

2012-2013

50.69

914.8

5.54

2013-2014

11.97

892.1

1.34

2014-2015

21.24

1021.13

2.08

Figure No. 3.6.14

Interpretation
The table shows that there is 6.65 in the year 2010 20011 and it also
decreased to 4.85 in the year 2011 -2012 and it decreased in the year 2011
2012 as 4.85% this show that net profit inadequate.

This ratio reveals to

measure overall profitability. It is an index of efficiency and profitability when used

with gross profit ratio and operating Ratio. The above table shows that higher the
ratio of net operating profit to sales not good as operational efficiency.

68

Table No. 3.6.15

RETURN ON NET WORTH RATIO

Equity Share Capital / Average on Net Worth*100

Years

Equity of Share

( Rs.In crores)

Average on net Ratio (%)

worth

2010-2011

15.92

156.68

10.16

2011-2012

15.92

151.61

10.50

2012-2013

15.92

270.32

5.89

2013-2014

15.92

246.16

6.46

2014-2015

15.92

285.99

5.56

Figure No. 3.6.15

Interpretation:
The ratio was 10.16 in the year 2010 2011 and increased to 10.50 in the
year 2011 2012 and continuously it has decreased from 2011 2012, 2012
2013 , 2014 2015 from 5.89 to 5.56%.
69

Table No. 3.6.16

RETURN ON TOTAL ASSETS RATIO

Net Profit / Total Assets*100

( Rs.In crores)

Years

Net profit

Total assets

Ratio (%)

2010-2011

43.4

538.53

8.05

2011-2012

36.31

573.82

6.32

2012-2013

50.69

739.82

6.82

2013-2014

11.97

728.42

1.64

2014-2015

21.24

790.22

2.68

Figure No. 3.6.16

Interpretation:

This ratio is calculated to measure the productivity of total assets for the
first four years that is from 2010 -2011 to 2013 2014 it showed a small changes
in the ratio but it had decline to 2.68 in the year 2014 2015.

70

Table No. 3.6.17

EARNING PER SHARE

Net profit after tax/no. of equity share X 100

Years

Net profit after tax

( Rs.In crores)

Equity share

Ratio
(%)

2010-2011

43.4

15.92

2.72

2011-2012

36.31

15.92

2.28

2012-2013

50.69

15.92

3.18

2013-2014

11.97

15.92

0.75

2014-2015

21.24

15.92

1.33

Figure No. 3.6.17

Interpretation:

The ratio was 2.72 in the year 2010-2011 and it came down to 2.28 in the
year 2011-2012 and it shown are 1.33 decreasing ratio for the year 2014-2015.
This ratio high lights the overall success of the concern from owners point of
view and it is helpful in determining market price of equity share.
71

Table No. 3.6.18

RETURN ON SHARE HOLDERS FUND RATIO

Net Profit after Tax& Interest/ Share Holders Funds*100

Years

Net profit

Share

( Rs.In crores)

holders Ratio (%)

funds
2010-2011

43.4

261.35

16.67

2011-2012

36.31

286.48

12.67

2012-2013

50.69

326.05

15.54

2013-2014

11.97

333.37

3.6

2014-2015

21.24

332.18

6.39

Figure No. 3.6.18

Interpretation:
This ratio determines the profitability from the shares holders point of view
in 2005-2006 ratio is 16.67%, and it decreased to 3.6 in the year 2013 2014
and it increased to 6.39% in the year 2014 2015.

72

Table No. 3.1.19

GROSS SURPLUS RATIO

Gross Profit Ratio / Total Assets

( Rs.In crores)

Years

Gross Profit Ratio

Total assets

Ratio (%)

2010-2011

66.62

538.53

0.12

2011-2012

53.21

573.82

0.10

2012-2013

74.64

739.82

0.10

2013-2014

18.8

728.42

0.02

2014-2015

33.21

790.22

0.04

Figure No. 3.1.19

Interpretation:

The Ratio is initially 0.12 and then decreased to 0.10 and 0.10 in the year
2012 - 2013 and it decline to 0.04 in the year 2015 due to the decrease of Gross
profit.

73

Table No. 3.6.20

RETURN ON INVESTMENT RATIO

Operating Profit / Capital Employed *100

( Rs.In crores)

Years

Net profit

Capital employed

Ratio (%)

2010-2011

43.4

306.32

14.16

2011-2012

36.31

335.28

10.82

2012-2013

50.69

403.34

12.56

2013-2014

11.97

459.15

2.6

2014-2015

21.24

451.57

4.7

Figure No. 3.6.20

Interpretation:
This ratio measures the sufficiency or otherwise of profit in relation to capital
employed. The return on investment ratio showed 14.16 in 2010 2011 and it
decreased to 10.8 in the year 2011 2012 and it is showing the decreased trend
of 4.7% in the year 2014 2015

74

CHAPTER 4.
SUMMARY OF FINDINGS
From the comparative and common size statement it is evident that total
income shows an increasing trend.
shows an increasing trend.

However income from other sources

However income from other sources show a

decreasing trend their by off setting increasing a company incomes.

Expenses, operating and administrative expenses, with account for major part
of expenses show an increasing trend.
An account of the above, the profit have shown a fluctuating trend.
It is found that the current ratio has improved over the five years is in
the ideal position of thirty one times during the current year, which is
2010 to 2015.
Absolute cash ratio is also improved over the five years and it is less than the
ideal ratio. The ideal ratio is less than 0:75:1.
From the profitability ratio viz., Net profit and the return on investment ratio, it
is seen that the profitability position of the company is in fluctuating.
From the fixed assets turn over ratio, it is evident that the lower ratio
shows under utilization of fixed assets .
Proprietary ratio generally shows the soundness of the company. A ratio
below 0.5 is the alarming for the creditors since they have to lose
heavily in the event of companys liquidation and it indicates more of
creditors funds and less of the share holders fund in the total assets
of the company.
Working capital turnover ratio was 11.68 in the year 2010-2011 and it
later was decreased in the current year up to 9.71. This shows the
sales turn over is high with less investment of working capital. A high
ratio is the indication of lower investments of working capital and more
profit.
There is no diversions of long term funds, which is reflected in the increasing
position of the fixed assets ratio. This ratio is 3.10 in the year 2010-2011
and it was 3.27 in the year 2014 - 2015.

75

 It is found that the reserves and surplus is increased in for all the five
years from 2010 to 2015.
It is found that the current assets had increased for the year 2010-2015
and current liability are fluctuating in the five years.
It is found in 2011-2012, deferred tax liability are increased to 33.33
Secured loans have raised for all the five years and unsecured loans
are remaining the same for all the five years.

76

CHAPTER 5
SUGGESTIONS AND RECOMMENDATIONS
In 2010 the current ratio is 1.241 times it implies that every 120 of current
liabilities, 2 Rs of Current Assets are available to meet them. The current
Assets are 2 times the Current Liabilities. The liquidity of the company is
lightly satisfied.
The Ratio of 2:1 is considered satisfactory as a rule thumb. This company
higher current ratio has (2015-1.351 times). The company has better
liquidity short term solvency. It provides margin of safety to the creditors.
Proprietary ratio generally shows the soundness of the Company. The
acceptable norm of the ratio is 1:3. Higher the ration indicates a served
position to creditors and a lower ratio indicates greater to creditors.
The company maintains share holders fund to total assets is in constant
way. The company should improve the proprietary ratio (50% above)
alarming for the creditors.
Since there may have to lose having in the event of creditors liquidation on
account on heavy losses. The company should maintain better norms of
proprietary ratios.
In 2010 to 2015 the Absolute cash Ratio is fluctuating which is 0.302 to 0.9
times. Generally, 0.75:1 ratio is recommended to ensure liquidity. If the
ratio is 1:1, then the firm has enough cash on hand to meet all current
liabilities. So the co should take necessary actions to take to improve the
Absolute cash ratio.
In 2010 Debt Equity ratio is 0.17 and following years up to 2015 the ratio is
increasing trend. As acceptable norms of ratio is considered to 2:1. The
higher debt equity ratio is allowed in the case of capital intensive
industries. A low debt equity ratio implies a greater claim of owners than
creditors.
The above point of view of creditors, it represents not a satisfactory capital
structure of business, the company should take a necessary steps to
improve

high proportion of equity provides a large margin of safety for

them.
77

 In 2010-2015 the Working Capital Turn Over Ratio showed decreasing

trend this indicates the ratio helps determining the liquidity of the firm is as
much as it gives the rate at which inventories are converted to sales and
then to cash.
Higher and lower incomes compare to Working Capital means under
trading. In this company Capital Turn over Ratio shows that there are
shows that there is low investment in working capital and more profit.

78

CHAPTER - 6

CONCLUSION

Though it is observed that during the year ending 2015, there seems to the
improvements. The company can take advantage of the reputation it has created
in the market for itself and become more competitive. The company position is
good and satisfactory.

The recommendation and suggestions given, it adopted will improve the

position of the company substantially and optimal profitability coupled with better
service and satisfaction for investors may be achieved.

79

BIBILOGRAPHY:

REFERENCE:
Dr. S.N. Maheswari, Financial Management, Sultan Chand & Sons, New
Delhi, 2000, 9th Edition.
Pandey I.M, Financial Management Vikas Publishing Pvt Ltd., New Delhi,
200, 7th Edition.
Reddy T.S. Hari Prasad, Financial and Management Accounting
Margham Publishing, Chennai 2001.
Khan. M.Y. and Jain P.K., Financial Management, Tata Mc Graw Hill
Publishing Co Ltd., New Delhi, 1992, 3rd Edition.
Prasanna Chandra, Financial Management, Tata Mc Graw Hill New Delhi,
3rd Edition.
Annual Reports of Visaka industries Ltd. for the 2010-11 to 2014-15.

WEBSITES:
WWW.VIL.NIC.IN

80