Final Yr Finance Project

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1. INTRODUCTION
1.1 INTRODUCTION ABOUT THE TOPIC:
The present study of financial performance of Chennai port trust is intended to

examine the current practices of financial performances in the regard under the
present inflationary condition management of financial performance is perhaps more
important of an even management of profit and this requires greatest affection of the
financial performance.
The project communicates financial information to the users through

statements and reports. The financial statements contain summarized information of
the firms financial affairs organized systematically. They are means to present the
firms financial situation to users preparation of the financial statement is the
responsibility of the top management as these statements are by investors and
financial analyst to examine the firm performance in order to make investment
decisions they should be prepared very carefully and contain as much information as
possible.
Two basic financial prepared for the purpose of external reporting are 1. Profit
and Loss Account 2.Balance sheet these statements are contained in a company's
annual report. It includes the auditors report and accounting policy changes for
internal management purposes i.e., planning and controlling much more information
than contained in the published financial information is presented in different
headings and report in such a way as to serve the internal needs of management.
Financial statements are prepared from the accounting records main tended by the
firm.
Finance is the life blood of the nation as well as organization the success of the
organization the success of the organization greatly depends on the better utilization
of finance. Finance plays vital role in determining the strength, weakness and control
funds of the concern without finance no organization cannot performance its activities
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in modern enterprises financial manager occupies a key position he is responsible for

shaping the fortunes of the enterprises
The conceptual frame works of financial analysis have been discussed the
meaning of financial wealth, method financial analysis tools used for the purpose of
financial analysis and compilation of the accounts department functioning in the
Chennai port trust and detail explain nation about the revenue department and what
are the charges they treated as a income and vice versa of the expenditure about of the
each section of the revenue department of the Chennai port trust.
The report which was taken in the total study of the accounts department
function and in the profit & loss account of the Chennai port trust and balance sheet
for the last four year i.e. 2005 -2008 to find the financial position of the Chennai port
trust
The financial statement method used was comparative income statement,

comparative balance statement, common size income statement, common size balance
sheet statement and ratio analysis, Trend analysis.
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2. PROJECT PROFILE
2.1. TITLE:
“A STUDY ON FINANCIAL PERFORMANCE ANALYSIS”
2.2. NEED OF THE STUDY
Financial analysis is the starting point for making plans, before using any
sophistical forecasting and planning procedures. Financial analysis strengths of the
firms to make their best use and to be able to spot out financial weakness of the firm
to state suitable corrective actions.
The fulltime plans of the firm should be laid down in view of the firm’s
financial strengths and weakness between properly establishing relationship between
the items of the balance sheet and profit &loss account. A study of ratio, comparative,
common-size statement & trend percentage that took place for the last five years will
help the financial department of the company in better decisions in the near future.
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2.3. OBJECTIVES OF THE STUDY:-
Primary Objective
To study the overall financial performance in chennai port trust
Secondary Objective
• To analyze, interpret and suggest the means for improving the
operational efficiency of Chennai port trust
• To calculate profitability turnover , financial ratio, solvency ratio to

assess the financial position of the firm.
• To calculate the future income of the company by using trend

analysis.
• To know the strengths and weakness of Chennai port trust references

finance functions.
• To suggest ways and means of improving the financial position of

Chennai port trust.
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2.4. SCOPE OF THE STUDY
This research helps the PORT TRUST to understand the financial trend as
well as areas of the draft contributed to crises. The port can utilize date to improve
and rework on their means and methods of allocation of financial resources for the
smooth and efficient performance of the Chennai port Trust.
There are many different ways to measure financial performance, but all
measures should be taken in aggregation. Line items such as revenue from operations,
operating income or cash flow from operations can be used, as well as total unit sales.
Furthermore, the analyst or investor may wish to look deeper into financial
statements and seek out margin growth rates or any declining debt.
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3. ORGANIZATION PROFILE
3.1 PORT OVERVIEW
Chennai Port is an artificial harbor started on the Coromandel Coast in south-

east India and it is the second principal Port for handling containers. Chennai Port has
21 alongside berths in the three Docks viz., Dr.Ambedkar Dock, Jawahar Dock,
Bharathi Dock and Container Terminal.
The major items being handled in the Port of Chennai are POL, Iron Ore,
Coal, Containers, Fertilizers, Fertilizers Raw Materials, Car Export and Granites of
general cargo items. In future, with the development of Ennore Port, the Coal and
other Dusty Cargo being handled at Chennai will be shifted to that Port.
The Port of Chennai will then handle Containers, Petroleum products, General
Cargo items and Cars, which are likely to be exported by the multi-nationals, which
are setting up automobile plants in and around Chennai.
Chennai being an important metropolitan town is well connected with all its
major cities and industries centers in India by road, rail and air.
OUR MISSION
The Chennai Port Trust is committed to –
• To achieve excellence in port operations through dedicated, loyal and

committed workforce to enhance customer satisfaction.
• Strive for continual improvement at all levels by enhancing skills,

knowledge and enthusiasm to meet the needs of the challenging world.
• Strive to achieve maximum value addition through the most effective

use of resources.
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OUR VISION
• Empower employees for shouldering higher responsibilities resulting
in job enrichment and job satisfaction.
• To become the best Port in environmental management and in

controlling pollution.
OUR POLICY
• Provide efficient, prompt, safe and timely service at optimum cost.
• Ensure quick turn round of vessels by providing facilities for efficient

handling of cargo.
• Maintain total transparency in all our transactions and
• Continually improve our services to meet the expectations of the Port
Users, employees and the Society.
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3.2 ORGANISATION STRUCTURE AND DEPARTMENTS:
There are nearly 14000 employees of various categories along with officers are
working in various departments. There are 9 departments consisting of many sections
working in Chennai port trust. They are
 Secretary department.
 Civil engineering department.
 Electrical and mechanical engineering
 Marine department.
 Traffic department.
 Accounts department.
 Stores department.
 Medical department.
 Central industrial security force department
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3.3 THE HIERARCHIES IN THE

CHENNAI PORT TRUST
CHAIRMAN
DEPUTY CHAIRMAN
DEPARTMENT HEADS
DEPUTY CHIEF OFFICER
SUPERINTENDENT
LABOURERS
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3.4 THE CHENNAI PORT SURGES AHEAD WITH:
• More than 100 years of tradition
• Commitment for efficiency thro’ innovation and continuous

modernization
• Efficient services at minimum cost
• Simple and integrated procedures
• User-friendly approaches
• Facilities to handle cars and containers matching to international

standards
GRAPHICAL LOCATION
Latitude : 13° 06’ N
Longitude : 80º 18’ E
Climate : Tropical
Time : +5 Hrs. 30Minutes
Temperature : 30º C Max. 18º C Min
Annual Rainfall : About 125 Cms.
Spring Tides : 1.2 Meters
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NAVIGATION CHANNEL
ENTRANCE CHANNEL:
SOIL : Predominantly sandy and silt
LENGTH OF CHENNEL : About 7 kilometers
WIDTH OF CHENNEL : The width of channel gradually

Increases from 244m to 410m
at the portion, then maintains
a constant width of 305m
Depth of Inner Chennel : 18.6 m below chart datum
Depth of Outer Chennel : 19.2 m below chart datum
• For details of entrance Channel please refer Indian Naval

Hydrographic Chart ………or British Admiralty chart 575.
The approach channel to the Port has two sections.
A. The entrance channel within the protection of Outer Arm.
B. The outer channel beyond the protection of Outer Arm.
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NAVIGATIONAL AIDS AVAILABLE:
1) Nine channels buoy marking the 7kms. Long channel.
2) Transit lights to assist the vessels to negotiate.
3) Racon and sector lights to assist vessels to enter channel.
4) Light Beacon to assist vessels approaching Port of Chennai.
PILOTAGE:
Round the clock and compulsory, for vessels of 200 GRT and above
PILOT BOARDING AREAS:
1) Area 1 is approximately two kilometers northeast of breakwater for ships up to

230 meters in length.
2) Area 2 is about eight kilometers northeast of breakwater for ships over 230
meters in length
3.5 PORT AUTHORITY
The Chennai Port is one of the 12 major Ports in the country and governed by the
Major Port Trust Act, 1963 and Indian Ports Act, 1908. The management and control
of the Port is vested with the board of Trustees constituted under the Major Port Trust
Act, 1963. The Port is under the administrative control of the Ministry of shipping,
Government of India.
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3.6. PRODUCTS AND SERVICES OFFERED

BY CHENNAI PORT:
CHENNAI PORT’S DREDGER “CAUVERY’

The Dredger “CAUVERY” at the cost of Rs.54 crores was acquired by
Chennai Port Trust during May 2004. Since then, it is catering to the needs of
dredging at Chennai Port When Ennore Port Ltd wanted to dredge about 3.00 lakhs
cu.m in their basin, Chennai Port Trust expressed his readiness to undertake the
dredging work at Ennore Port Accordingly an MOU was signed between Chennai
Port Trust and Ennore Port Ltd on 14.12.04. From 17.01.05onwards, the Dredger
“CAUVERY” is dredging at the basin of Ennore Port as per their requirements and
about 1.00 lakhs cu.m. has already been dredged at the said location. The dredging of
the balance 2.00 lakhs cu.m is expected to be completed by early April 2005.Similarly
the Chennai Port is embarking upon undertaking such dredging works at the Indian
Ports and also in other areas, subject to its suitability, by entering into Contract /
MOU.
FLOATING CRANE “ THANGAM

One Floating Crane “THANGAM” is available in Chennai Port for loading
and Unloading heavy weight cargo from the ships as well as for other specialized
jobs. Involving lifting of heavy weights. The vessel can be utilized for lifting
requirements. Involved in under water salvage operations. This Floating crane
procured in the year 2003 is a Self propelled vessel having a main hoist with lifting
capacity to a maximum of 150 tons at hoist of 40 tons lifting capacity. The vessel is
capable of carrying 300 Tons of weight on the deck and Crane is placed at the stern of
the vessel. The vessel under the class of Indian Register of Shipping Had been built
with the state of the art technology.
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3.6 BOARD OF DIRECTORS
 Shri. K.SURESH, I.A.S.,

Chairman
 Capt. SUBHASH KUMAR,

Deputy Chairman
 Shri.C.L.DHANASEKARAN,
P.A to Chairman
 Shri.V.K.MAHENDRA BABU
P.A to Dy.Chairman
 Smt. A. PADMAVATHY
Steno to CPT
 Shri.N.BALAJI,
Steno to Dy. Chairman
 Shri. B.S.RAGHUNATHAN,I.C.A.S
Chief Vigilance Officer
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3.7 HIGHLIGHTS OF PORT
• Chennai Port is a ISPS Compliant Port
• Chennai Port Trust awarded with Certification of ISO 14001 : 2004
• 21 deep drafted berths
• All weather port
• Round the clock operations
• Handling multiple cargo, Third position among all Major Ports
• Best efficiency indicators
• Pre berthing detention of 0.9 Hrs
• Average turnover 2.4 Days
• Berthing on arrival
• Passenger terminal of international standard
• First of its kind in Indian Ports, Chennai Port has established the
Marine Pollution Management to ensure Protection for Marine life
• EDI connectivity with Customs, Bank, Online Port users Portal

established and various port activity under process.
• Excellent Rail Connectivity
• Excellent Road Connectivity
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3.8 BUSINESS OF CHENNAI PORT TRUST
The various documents/forms used in the Commercial Division are
A. DOCUMENTS ON IMPORT SIDE:
1. Import General Manifest:

A list of cargoes meant for unloading at the Chennai Port. A copy of IGM, as
approved by the Customs Authority, has to be filled by the steamer Agents
prior to the arrival of the vessel.
2. Import Tally Sheet:

As per sec.42 (2) of the Major Port Trusts Act, the Trust issues Tally Sheet to
the Steamer Agents as a token of receipt of the cargo /Container from the
vessel. The various types of tally sheets used on the import side are as follows
I. Import Tally Sheet for General Cargo Issued u/s 42(2) of the MPT Act
1963, for general Cargoes.
II. Import Tally Sheet for Containers Issued u/s 42 (2) of the MPT Act 1963,
for general Cargos.
III. Import FCL Container Destuffing Tally Sheet This Tally Sheet is not
issued u/s 42 (2) of the MPT Act 1963, as the Trust is not responsible for
cargo inside the FCL container.
IV. Import LCL Container Destuffing Tally Sheet Issued u/s 42 (2) of the
MPT Act, 1963 for the cargos destuff from LCL containers
3. Import Application:
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This document is to be filled by the consignee or this clearing agent along with
the Delivery Order from the Steamer Agent in Triplicate, for clearance of
cargo from the port.
4. Free Days Advice Slip:
The section Spud. Of the area concerned issues a Free Days Advice Slip
declaring the expiry of free days for the cargos landed from a particular vessel
Vehicle Ticket is issued by the Trust for taking delivery of the cargo through
customs manned gates.
The following Certificates are issued by the Trust on import side
‘A’ Certificate: This is a certificate issued by the trust in respect

of the cargos, which are not readily available at the time of
delivery and subsequently traced out
‘B’ Certificate: ‘B’ Certificate is issued by the Trust for the cargos,
which are not manifested but not landed from for delivery
‘C’ certificate: ‘C’ Certificate will be issued by the Trust for the
cargos landed but subsequently but available for delivery.
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B. DOCUMENTS ON EXPORT SIDE:
1) Export General Manifest: EGM has to be filled by the Steamer Agents

within one week after sailing of vessel.
2) Export Application: Export application (EA) has to be filled by the

exporter or his agent, in triplicate at the time of bringing the cargo inside the port for
export purpose.
3) Export Tally Sheet: The Trust issues Tally Sheet for the
cargo/containers received for the purpose of loading into the vessels. There are 3
types of Tally Sheets issued on export side as given below
I. Export Tally Sheet for General Cargos Issued u/s 42 (2) MPT
Act 1963 for cargos received under Trust’s custody Export
purpose
II. Containers Export Tally Sheet Issued u/s 42 (2) of the PT MPT
Act 1963 in respect of Containers received for export purpose
III. Container stuffing Tally Sheet (export LCL) issued for

Stuffed in the container at the Export Container Freight station
Mate’s vessel:
This is receipt issued by the Captain of the vessel for having taken the cargo
on board the vessel.
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3.9 FUTURE PLANS
• Second Container terminal with a capacity of 1 miilion TEU’s per

annum, developed by PSA-SICAL.
• Master plan for Port Railway, Realigning Rail and Road
• Network.
• Mechanized conveyor system for Coal to handle 9 MT.
• Dedicated Elevated Expressway from Chennai Port to Maduravoyal

upto NH4 has been approved by the Government to enhance the
hinterland connectivity.
• Development of Ro-Ro Terminal and a Multi level car parking facility

with a capacity of 5000 cars.
• Chennai Mega Container Terminal with a continuous quay length of 2

km with 18-22m side along draft. Capable of handling ultra large
container ships carrying over 15000 TEU’s.
• The break water extension from existing outer arm will be utilized to
develop deep draft oil berth for handling VLCCs.
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4. REVIEW OF LITERATURE
MEANING OF FINANCIAL STATEMENTS
The statement disclosing status of investments is known as balance sheet and

the statement showing the result is known as profit and loss account. This statement
put together, or called 'Package of Financial Statements'.
A. FOR THE FINANCIERS:
Financial statements are also of great importance to the financiers and lenders.
Lenders need information regarding customer’s financial position, solvency, credit
standing, profitability, etc. Financial statements provide most of the information.
B. FOR THE CREDITORS:
The Creditor is another class for whom financial statements are important. Trade
credit implies extending facilities of defer erred payment for credit purchases by seller
to buyer. All these facts are revealed by financial statements with the help of solvency
ratios, cash and fund flow analysis etc.,
C. FOR INVESTORS
Present and prospective investors are interested in studying financial

statements to assess earning capacity, growth potential and efficiency of
management. Financial statements provide such information readily to
share holders.
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OBJECTIVE OF ANALYSIS
1. To interpret the profitability and efficiency of various business

activities with the help of profit and loss account;
2. To measure short-term and long-term solvency of the business.
3. To measure managerial efficiency of the firm.
4. To determine potential of the concern
FINANCIAL ANALYSIS
Management, creditors, investors and others to form judgment about the

operating performance and financial performance of the firm use the information
contained in financial statement. Users of financial statement can get further insight
about financial strength and weaknesses of the firm if they properly analyze
information reported in these statements.
Management should be particularly interested in knowing financial strength of

the firm to make their best use and to be able to spot out financial weaknesses of the
firm to take suitable corrective action. The further plans of the firm should be laid
down in view of the firm’s financial strength and weaknesses. Thus, financial analysis
is the starting point for making plans, before using any sophisticated forecasting and
planning procedure, understanding the past is a prerequisite for anticipating the future.
To have a very clear understanding of the profitability and financial position of a

business, the financial statements will have to be analyzed and interpreted. Financial
analysis is the process of identifying the strengths and weaknesses of the company
with the help of accounting information’s provided by the Profit and Loss Account and
Balance Sheet.
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Financial analysis is the process of evaluation of relationship between

component parts of financial statements to obtain a better understanding of the firm’s
position and performance. Financial analysis will give the management considerable
insight into levels and areas strength or weakness. Financial statements are prepared
primarily for decision-making. They play a dominant role in setting the framework of
management decisions. But the information provide in the financial statement is not
an end in itself as meaningful conclusions can be drawn from these statement alone.
However, the information provided in the financial statements is of immense use in
making decisions through analysis and interpretation of financial statements.
Financial analysis is the process of identifying the financial strengths and weaknesses
of the firm by properly establishing relationship between the items of the balance
sheet and profit & loss account.
The following are the various types of analysis of financial statement.
TYPES OF FINANCIAL ANALYSIS
The process of financial statement analysis is of different types. The process

of analysis is classified on the basis of information used and “modus operandi” of
analysis. The classification is as under.
Types of financial Analysis :
On the basis of On the basis of 'modus

material used operandi of Analysis
External Internal Horizontal Vertical

Analysis Analysis Analysis Analysis
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EXTERNAL ANALYSIS:
This analysis is; based on published financial statements of a firm. Outsiders

have limited access to internal records of the concern. Therefore, they depend on
published financial statements. Thus, the analysis done by outsiders namely, creditors,
suppliers, investors and government agencies is known as external analysis. This
analysis serves a very limited purpose.
INTERNAL ANALYSIS:
This analysis ii done on the basis of internal and unpublished records.. It is

done by executives or other authorized officials. It is very much useful and significant
to employees and management.
ON THE BASIS OF 'MODUS OPERANDI OF ANALYSIS :
HORIZONTAL ANALYSIS:
In the case of this type of analysis, financial statement for number of years are
reviewed and analyzed. The current year's figures are compared with; in; the
standards or base year. The analysis statement usually contains figures for two or
more years and the changes are shown regarding each item from the base year usually
in; the form of percentage. Such an analysis gives the management considerable
insight in to levels and areas of strength and weakness. Since this type of analysis is
based on the date from year to year rather than on one date, it is also termed as
"Dynamic Analysis ".
VERTICAL ANALYSIS:
Vertical analysis is also known as ‘Static Analysis' or ‘Structural Analysis'.
This analysis is made on the basis of a single set of financial statements prepared at a
particular date. Under vertical analysis, quantitative relationship is established
between different items shown in a particular statement. Common-size statements are
a form of vertical analysis. Different items shown in the statement are expressed as a
percentage to any one item as base.
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RATIO ANALYSIS
The ratio analysis is one of the most powerful tools of financial analysis. It is the
process of establishing and interpreting various ratios. A financial ratio is the
relationship between two accounting figures expressed mathematically. Ratios
provide clues to the financial position of a concern. These are the pointers and
indicators of financial strength, soundness, position or weakness of an enterprise. One can
draw conclusions about the exact financial positions of a concern with the help of
ratios.
Ratio analysis is a process of comparison of one figure against another, which

make a ratio, and the appraisal of the ratios to make proper analysis about the
strengths and weaknesses of the company’s operations. Ratio analysis is extremely
helpful in providing valuable insight into a company’s financial picture.
CLASSIFICATIONS OF RATIOS
1. Current ratio
2. Gross profit ratio
3. Administrative ratio
4. Return on investment
5. Return on total investment
6. Fixed asset ratio
7. Debt equity ratio
8. Cash position ratio
9. Net profit ratio
10. Asset turnover ratio

11. Operating ratio
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Short-Term Solvency Ratio:

The short-term solvency ratios, which measure the liquidity of the firm and its
ability to meet its maturing short-term obligations. Liquidity is defined as the ability
to realize value in money, the most liquid of assets. It refers to the ability to pay in
cash, the obligations that are due.
CURRENT RATIO:
Current Assets, Loans & Advances

Current Ratio =
Current Liabilities & Provisions
This ratio measures the solvency of the company in the short-term. Current
assets are those assets, which can be converted into cash within a year. Current
liabilities and provisions are those liabilities that are payable within a year. A current
ratio of 2:1 indicates a highly solvent position.
QUICK ASSET OR LIQUID RATIO:
Current Assets, Loans & Advances - INVENTORIES

Quick Ratio =
Current Liabilities & Provisions – Bank Overdraft
Quick ratio is used as a measure of the company’s ability to meet its current
obligations. Since bank overdraft is secured by the inventories, the other current assets
must be sufficient to meet other current liabilities. A quick ratio of 1:1 indicates
highly solvent position. This ratio is also called the acid test ratio. This ratio serves as
a supplement to the current ratio in analyzing liquidity.
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Long-Term Solvency Ratio:
DEBT NET WORTH:

Long-term debt
Debt to Net worth Ratio =
Net worth
This ratio is finer than the debt-equity ratio and includes capital, which is
invested in fictitious assets like deferred expenditure and carried forward losses.
This ratio would be of more interest to the contributories of long-term finance

to the firm, as the ratio gives a factual idea of the assets available to meet the long-
term liabilities.
FIXED ASSET RATIO:
Fixed Assets * 100

Fixed Assets Ratio =
L.T. Debts
This ratio is an indicator and a measure of the amount of capital which is

invested in assets of the organization. Ratio more than `1’ indicates that fixed assets
are purchased either with both equity and short term funds or with any one of the
mode of financing. Here, the ratio is slightly more than 1 which indicates the pumping
of funds from any of the sources as mentioned above.
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PROFITABILITY RATIO:
The purpose of study and analysis of profitability ratios are to help assessing
the adequacy of profits earned by the company and also to discover whether
profitability is increasing or declining.
RETURN ON INVESTMENT:
Profit Before Int & tax

Return on Investments = X 100
Capital employed
This ratio shows the relationship between the return before interest and taxes
expressed as a percentage of the Capital employed, where Capital employed is the
summation of Net fixed Assets after depreciation and amortization and the working
capital.
GROSS PROFIT RATIO:
Sales – Cost of goods sold

Gross Profit Ratio = x 100
Sales
The ratio measures the gross profit on the total net sales made by the
company. The gross profit represents the excess of sales proceeds during the period
under observation over their cost, before taking into account administration selling
and distribution and financing charges. The ratio measures the efficiency of the
company’s operations and this can also be compared with the previous year’s results
to ascertain the efficiency partners with respect to the previous years.
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NET PROFIT RATIO:
Net profit before interest and tax

Net Profit Ratio = x 100
Sales
This ratio reflects net profit on the total sales after deducting all expenses but
before deducting interest and taxation. This ratio measures the efficiency of operation
of the company. The net profit is arrives at from gross profit after deducting
administration, selling and distribution expenses. The non-operating incomes and
expenses are ignored in computation of net profit before tax, depreciation and interest.
This measure will depict the correct trend of performance where there are
erratic fluctuations in the tax provisions from year to year.
FIXED ASSET TURNOVER RATIO
Sales
Fixed Assets Turnover Ratio =
Fixed Assets
This ratio determines efficiency of utilization of fixed assets and

profitability of a business concern. Higher the ratio, more is the efficiency in
utilization of fixed assets. The lower ratio is the indication of under utilization of
fixed assets.
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OPERATING RATIOS
PBIT
Operating Profit Ratio = x 100
Sales
Operating ratio shows the operational efficiency of the business. Lower

operating ratio shows higher operating profit and vice versa. An operating ratio
ranging between 75% and 80% is generally considered as standard for
manufacturing concerns. This ratio is considered to be a yardstick of operating
efficiency but it should be used cautiously because it may be affected by a number of
uncontrollable factors beyond the control of the firm. Moreover, in some firms, non-
operating expenses from a substantial part of the total expenses and in such cases
operating ratio may give misleading results.
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COMPARATIVE BALANCE SHEET ANALYSIS
The comparative balance sheet analysis is the study of the trend of the same
items, group of items and computed items in two or more balance sheets of the same
business enterprise on different dates. The changes in periodic balance sheet items
reflect the conduct of a business. The changes can be observed by comparison of the
balance sheet at the beginning and at the end of a period and these changes can help in
forming an opinion about the progress of an enterprise.
Balance sheets as on two or more different dates are used for comparing the
assets, liabilities and the net worth of the company. Comparative balance sheet
analysis is useful for studying the trends of an undertaking.
ADVANTAGES
 Comparative statements help the analyst to evaluate the performance
of the company.
 Comparative statements can also be used to compare the performance

of the firm with the average performance of the industry between
different years.
 It helps in identification of the weaknesses of the firm and remedial

measures can be taken accordingly
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COMMON SIZE STATEMENTS:
Common size statements indicate the relationship of various items expressed

as percentage of the common item). In the income statements, the sales figure is taken
as basis and all other figures are expressed as percentage of sales. Similarly, in the
balance sheet the total assets and liabilities is taken as base and all other figures are
expressed as percentage of this total.
TREND ANALYSIS:
‘Trend’ signifies a tendency and as such there view and appraisal of tendency
in accounting variables are nothing but trend analysis. Trend analysis is carried out by
calculating trend ratios (percentage) and or by plotting the accounting data on graph
paper or chart. Trend analysis is significant for forecasting and budgeting. Trend
analysis discloses the changes in financial and operating data between specific
periods.
TREND PERCENTAGES:
Trend percentages are immensely helpful in making as a Comparative study of
the financial statements for several years. The method of calculating trend percentages
involves in the calculation of percentages relationship that each item bears to the same
item in the base year.
LINEAR REGRESSION
Linear regression analyzes the relationship between two variables, X and Y.

For each subject (or experimental unit), you know both X and Y and you want to find
the best straight line through the data. In some situations, the slope and/or intercept
have a scientific meaning. In other cases, you use the linear regression line as a
standard curve to find new values of X from Y, or Y from X.
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The term "regression", like many statistical terms, is used in statistics quite
differently than it is used in other contexts. The method was first used to examine the
relationship between the heights of fathers and sons. The two were related, of course,
but the slope is less than 1.0. A tall father tended to have sons shorter than himself; a
short father tended to have sons taller than himself. The height of sons regressed to
the mean. The term "regression" is now used for many sorts of curve fitting.
Prism determines and graphs the best-fit linear regression line, optionally
including a 95% confidence interval or 95% prediction interval bands. You may also
force the line through a particular point (usually the origin), calculate residuals,
calculate a runs test, or compare the slopes and intercepts of two or more regression
lines.
In general, the goal of linear regression is to find the line that best predicts Y
from X. Linear regression does this by finding the line that minimizes the sum of the
squares of the vertical distances of the points from the line.
Note that linear regression does not test whether your data are linear (except
via the runs test). It assumes that your data are linear, and finds the slope and intercept
that make a straight line best fit your data.
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5. RESEARCH METHODOLOGY
The term research is derived from French word research meaning, “search
back”, research is a careful inquiry or examination in seeking fact or principle
intelligent investigation in order to ascertain something web masters international
dictionary.
Research methodology is way to systematically solve the problem when we

talk of research methodology we not mean the research methods. Also, consider the
logic behind the methods used in the context of research study and explain why a
particular method or technique is used, so that research results are capable of being
evaluated.
5.1. RESEARCH DESIGN:
Research design is purely and simply framework or plan for study that guides
the collection and analysis of the data.
RESEARCH TYPE:
The type of research used in this study is desk research.
DESK RESEARCH:
Desk research (sometimes known as secondary data or secondary research )

involves gathering data that already exists either from internal some of the client,
publications of governmental institutions, free access data on the internet, in
professional newspapers and magazines, in annual reports of companies and
commercial databases to name but a few. In many projects, carrying out an initial
desk research stage is strongly recommended to background knowledge to a subject as
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well as providing useful leads that will help to get the maximum from a research
budget
5.2. DATA COLLECTION METHODS:
SECONDARY DATA:
The rest of the data is collected from the annual report brochures and websites
of the organization.
5.3. ANALYSIS OF TOOLS:
To analyze and study about the company with regard to financial performance
the following tools have been applied.
 COMPARATIVE FINANCIAL ANALYSIS

• Comparative Income statement
• Comparative Balance sheet
• Common size balance sheet
 RATIO ANALYSIS
• Current ratio
• Cash position ratio
• Fixed asset ratio
• Debt equity ratio
• Return on investment
• Return on total asset
• Administrative expenses
• Gross profit ratio
• Net profit ratio
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• Operating ratio
 TREND PERCENTAGE BALANCE SHEET
 STATEMENT OF WORKING CAPITAL ANALYSIS
5.4. LIMITATIONS OF THE STUDY:-
 The first limitation of the study was the time constraint. As the time
given for the study was 4 months it was not possible to make an extensive
study so the coverage confines to the period of past five years only.
 No primary data is used for the study.
 Figures for the analysis are taken from the annual reports. So all the
limitations of there statements will apply to the study.
 Major part of the work is concerned with financial data; adequate data
was not able to pool because of the secrecy maintained by the company
 The study reveals the finding for present and it will not reflect the past
and the future.
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6. DATA ANALYSIS AND INTERPRETATION
6.1 RATIO ANALYSIS
6.1.1. CURRENT RATIO:
Current ratio is calculated by dividing current asset by current liabilities. It

is also known as working capital ratio. It measures short-term debt paying ability. The
acceptable rule of current ratio is 2:1 it helps to know the liquidity position of the
firm.
FORMULA:
Current Assets
CURRENT RATIO = -------------------------------
Current Liabilities
TABLE NO - 6.1.1
CURRENT
CURRENT
YEARS LIABILITIES RATIO
ASSET
(Rs. in million )
2004-05 12686.28 13837.42 0.91
2005-06 14212.40 14511.00 0.979
2006-07 16809.95 15348.73 1.095
2007-08 20567.9 16737.93 1.228
2008-09 24056.55 17774.06 1.353
CHART NO. 6.2.1
CURRENT RATIO
1.353
1.228
1.4
1.095
1.2 0.979
0.91
1
Ratio
0.8
0.6
X Axis - Years
0.4 Y Axis - Ratio
0.2
0
2004-05 2005-06 2006-07 2007-08 2008-09
Years
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37
DATA ANALYSIS AND INTERPRETATION:

 The above table shows the current ratio of the company for the
financial year from 2004-2009.
 The current ratio is low in 2004-05 with 0.91% and high in 2008-
09with 1.353%.
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6.1.2. CASH POSITION RATIO:

This ratio measures liquidity in terms of cash and near cash items and short-
term current liabilities.
FORMULA:
Cash & Bank Balance
+Marketable Securities
CASH POSITION RATIO = -------------------------------
Current Liabilities
TABLE NO. 6.1.2
CASH, BANK
BALANCES+ CURRENT
YEARS RATIO
MARKET LIABILITIES
SECURITIES
2004-05 17619.53 13837.42 1.2733
2005-06 17353.26 14511.00 1.1958
2006-07 20033.83 15348.73 1.3052
2007-08 22983.88 16737.93 1.3731
2008-09 26356.17 17774.06 1.4828
CHART 6.2. 2
Cash Position Ratio

1.4828
1.6
1.3731
1.3052
1.4 1.2733
1.1958
1.2
1
X Axis - Years
Ratio
0.8
Y Axis - Ratio
0.6
0.4
0.2
0
2004-05 2005-06 2006-07 2007-08 2008-09
Years

 The above table shows the cash position ratio of the company for the
 The cash position ratio is increased in the year 2005-09 with ratio
1.2733% to 1.4828%.
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6.1.3. FIXED ASSETS RATIO:

This ratio explains whether the firm has raised adequate long-term funds to
meet its fixed assets requirements.
FORMULA:
Fixed Assets
FIXED ASSETS RATIO = ----------------------------
Long -Term Funds
TABLE NO. 6.1.3

YEARS FIXED ASSET LONG TERM FUNDS RATIO
2004-05 5874.28 261.58 22.45
2005-06 8153.13 236.53 34.46
2006-07 8201.14 211.47 38.78
2007-08 8408.71 186.42 45.10
2008-09 8720.49 161.36 54.04
CHART NO. 6.2.3
Fixed Assets Ratio
2008-09 54.04
2007-08 45.1
X Axis - Years
2006-07 38.78 Y Axis - Ratio
2005-06 34.46
2004-05 22.45
0
10 20 30 40 50 60
DATA ANALYSIS & INTERPRETATION:
• The above table shows the proprietary ratio of the company for the
• The fixed assets ratio of the company in the year 2004-05 the level
with the ratio 22.45%.
• In the year 2008-09 its high with the ratio 54.04%.
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6.1.4. DEBT EQUITY RATIO:

This ratio is ascertained to determine long-term solvency position of the
company. Debt equity ratio is also called as external –internal equity ratio.
FORMULA:
External Equities
DEBT EQUITY RATIO = --------------------
Internal Equities
TABLE NO. 6.1.4

EXTERNAL INTERNAL
YEARS RATIO
EQUITIES EQUITIES
2004-05 261.58 1253.06 0.208
2005-06 236.53 13982.30 0.0169
2006-07 211.47 15301.60 0.0138
2007-08 186.42 17511.05 0.0106
2008-09 161.36 20600.57 0.00783
CHART NO. 6.2.4
Debit Equity Ratio
0.25
0.2 0.208
Ratio
0.15
X Axis - Years
0.1 Y Axis - Ratio
0.05
0 0.0169 0.0138 0.0106 0.00783

2004-05 2005-06 2006-07 2007-08 2008-09
Year
• The above table shows the debt-equity of the company for the financial year from
2004-2009.
• From the table it is inferred that the debt equity ratio ranges from 7.26% to 5.07%.
The ratio is peak in the year 2005 and 2007 with 6.41% and low in the year
2009 with 5.07%. The firm’s debt equity ratio is in the satisfactory level.
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II. PROFITABILITY RATIOS
6.1.5 RETURN ON INVESTMENT:

The measures the sufficiency or otherwise of profit in relation in relation to
capital employed.
FORMULA:
RETURN ON Profit Before Interest Tax
INVESTMENT = ----------------------------------------------- x 100
Capital Employed
TABLE NO. 6.1.5

PROFIT BEFORE CAPITAL
YEARS RATIO
INTEREST TAX EMPLOYED
2004-05 741.84 12764.65 5.81
2005-06 791.7 14218.89 5.567
2006-07 1176.7 15513.07 7.585
2007-08 1859.53 17697.47 10.50
2008-09 2732.03 2761.94 98.91
CHART NO. 6.2.5
Return on Investment
98.91
100
90
80
70
60 X Axis - Years
Ratio
50
Y Axis - Ratio
40
30
20 7.585 10.5
5.81 5.567
10
0
2004-05 2005-06 2006-07 2007-08 2008-09
Year

• The above table shows the ROI for the financial year from 2004 to
2009.
• From the above table it is inferred that ROI fluctuates from 5.81% to
98.91%. The ROI is high in financial year 2009 with 98.91% and is
low in 2005 with 5.81%.
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6.1.6 RETURN ON TOTAL ASSETS:

This ratio is computed to know the productivity of the total assets.
FORMULA:
RETURN ON Profit after Interest Tax
TOTAL ASSETS = ------------------------------------x 100
Total Assets
TABLE NO. 6.1.6

PROFIT AFTER
YEARS TOTAL ASSETS Ratio
INTEREST TAX
2004-05 741.89 5874.28 12.629
2005-06 1159.48 8153.13 14.221
2006-07 1335.63 8201.14 16.285
2007-08 1969.85 8408.71 23.426
2008-09 3024.89 8720.49 34.687
CHART NO. 6.2.6
Return on Total Assets
34.687
2008-09
23.426
2007-08
16.285
2006-07
X Axis - Years
14.221
Y Axis - Ratio
2005-06
12.629
2004-05
0 5
10 15 20 25 30 35
 The above table shows the proprietary ratio of the company for the financial
year from 2004-2009.
 From the table it is inferred that the return on total asset ratio ranges from
12.63% to 34.96%. there is a increasing level in the total asset of the company
 The asset of the company is used high the year 2009 according to previous
year.
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6.1.7 ADMINISTRATIVE EXPENSES RATIO:

This ratio indicates the efficiency with business as a whole functions therefore
each aspect of cost of sales and operating expenses are analyzed.
FORMULA:
Administrative expenses
Administrative expenses ratio =------------------------------------ x 100
Net sales
TABLE NO. 6.1. 7

ADMINISTRATIVE RATIO
YEARS NET SALES RS
EXPENSES RS (In times)
2004 – 05 2613.91 741.89 852.25
2005 – 06 2864.72 1159.48 247.06
2006 – 07 3129.452 1335.634 234.30
2007 – 08 3480.83 1969.853 176.70
2008 - 09 4008.550 3024.893 132.51
CHART NO. 6.2. 7
Administrative Expenses Ratio
900
852.25
800
700
X Axis - Years
600
Ratio
Y Axis - Ratio
500
400
300
247.06 234.3
200 176.7
132.51
100
0 Ratio
2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09
Year
• The above table shows the administrative expenses ratio of the

company for the financial year from 2004-2009.
• The above table shows the administrative expenses ratio is 852.25 in
the year 2004 -05 and it decreased to 132.51 in the year 2008 -09.
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6.1.8 GROSS PROFIT RATIO:

This ratio also known as gross margin or trading margin ratio. Gross profit ratio
indicatates the difference between sales and direct cost. It explains the relationship
between gross profit and net sales.
FORMULA:
Gross Profit
Gross profit ratio = ---------------- x 100
Net Sales
TABLE NO. 6.1.8

TOTAL
NET PROFIT/ RATIO
INCOME/
YEAR OPERATING RATIO (IN
NET SALES
RS PERCENTAGE)
RS
2004 – 05 1071.715 3685.625 0.290
2005 – 06 1171.731 4036.473 0.290
2006 – 07 1187.484 4316.936 0.275
2007 – 08 1868.886 5349.718 0.3493
2008 - 09 2272.395 6280.945 0.3617
CHART NO. 6.2.8
Gross Profit Ratio
0.4 0.3493 0.3617
0.35
0.29 0.29 0.275
0.3
0.25 X Axis - Years

0.2 Y Axis - Ratio
0.15
0.1
0.05
0
2004 - 05 2005 - 06 2006 - 07 2007- 08 2008 - 09
• The above table shows the gross profit ratio of the company for the
• The above table shows the gross profit ratio is in the year 2004 -05 was
0.290 And it decreased to 0.3617 in the year 2008- 09.
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6.1.9 NET PROFIT RATIO:

This ratio also known as net profit or sales ratio. It is measure of management
efficiency in operating the business successfully from the owner point of view
increase the ratio better the operation efficiency of the business concern.
FORMULA:
Net Profit after Tax
NET PROFIT = --------------------------------------
Net Sales
Table No. 6.1.9

RATIO
NET PROFIT
YEAR NET SALES (IN
AFTER TAX
PERCENTAGE)
2004 – 05 12268.41 33545.79 0.97
2005 – 06 7418.49 36856.25 0.20
2006 – 07 11594.86 40364.72 0.28
2007 – 08 13356.33 43169.36 0.30
2008 – 09 19698.52 53497.18 0.36
CHART NO. 6.2.9
Ratio
0.97
1
0.9
0.8
0.7
X Axis - Years
0.6
Y Axis - Ratio
0.5 0.36
0.3
0.28
0.4 0.2
0.3
0.2
0.1
0
2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09
• The above table shows the net profit ratio of the company for the
• The above table shows the net profit ratio is in the year 2004 -05 was
0.37 And it decreased to 0.36 in the year 2008- 09.
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6.1.10 OPERATING RATIO:

Operating ratio measure the amount of expenditure incurred in production
sales and distribution of output. It indicates operational efficient of the concern
FORMULA:
Operating Expenditure
OPEARATING RATIO = -------------------------------
Operating Income
TABLE 6.1.10
Ratio
OPERATING OPERATING
YEAR (In
EXPENDITURE INCOME
Percentage)
2004 – 05 270.25 335.46 0.81
2005 – 06 261.39 368.56 0.71
2006 – 07 86.47 103.64 0.71
2007 – 08 312.94 431.69 0.72
2008 - 09 348.08 534.97 0.65
CHART NO. 6.2.10
Operative Ratio
0.9
0.81
0.8 0.71 0.71 0.72
0.65
0.7 X Axis - Years
0.6 Y Axis - Ratio
0.5
0.4
0.3
0.2
0.1
Ratio
0
2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09
• The above table shows the operating ratio of the company for the
• In year 2004-05 it was 0.81 and it does not increase but it has been
smoothly running in the last year 2008-09 it was declined 0.65
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6.1.11 ASSET TURNOVER RATIO:

This ratio is useful to determine the amount of sales that are generated from
each dollar of assets. As noted above, companies with low profit margins tend to have
high asset turnover, those with high profit margins have low asset turnover.
FORMULA:
Operating Income
ASSET TURNOVER RATIO = --------------------------------
Total Asset
TABLE 6.1.11
TOTAL Ratio
YEAR OPERATING INCOME
ASSET (In Percentage)
2004 – 05 335.46 2791.88 0.12
2005 – 06 368.56 2868.78 0.13
2006 – 07 403.64 3099.23 0.13
2007 – 08 431.69 3350.97 0.13
2008 - 09 534.97 3763.39 0.14
CHART NO. 6.2.11
Ratio
0.14
2008 - 09
0.13
2007 - 08
X Axis - Years
0.13 Y Axis - Ratio
2006 - 07
0.13
2005 - 06
0.12
2004 - 05
0.11 0.115 0.12 0.125 0.13 0.135 0.14
• The above table shows the asset turnover ratio of the company for the
• In 2004-05 it was 0.12, 2004-06 it was same 0.13 and in final year of
2008-09 it was 0.14.
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TABLE NO. 6.1.12 - COMPARATIVE INCOME STATEMENT

FOR THE YEAR 2006 – 2007
PARTICULAR 31.3.2006` 31.3.2007 INCREASE %

INCOME
23046.16 25392.47 2346.31 10.18
Cargo handling &
Storage 10364.70 11352.70 988.06 9.53
Port & Dock
3171.89 3272.24 100.35 3.16
charges
Railway Earnings 273.48 347.24 73.76 26.97
Estate Rentals
TOTAL 36856.25 40364.25 3508.48 49.84

EXPENDITURE
Cargo handling &
10043.45 10352.36 308.81 3.07
Storage
Port & Dock 4790.81 5919.95 1129.14 23.51
charges
1989.18 1937.88 51.3 2.58
Railway Workings
Rentable Land and 252.10 344.98 92.88 36.84
Buildings
Management & 9063.53 10092.32 1028.79 11.35

Administration
Total 26139.09 28644.74 2559.62 77.35
Gross Operating
Surplus
10717.15 11717.30 1000.15 9.33
Finance & 4501.82 7132.08 2630.26 58.42
Miscellaneous
Finance &
Miscellaneous 7800.49 7254.52 545.97 6.99
Expenses
NET SURPLUS 7418.49 11594.86 4176.37 56.30
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TABLE NO. 6.1.13 - COMPARATIVE INCOME STATEMENT OF

PARTICULAR 31.3.2007 31.3.2008 INCREASE %

INCOME
Cargo handling &
Storage charges
25392.47 26342.42 949.95 3.74
Port & Dock 11352.77 11975.07 622.3 5/48
charges
Estate Rentals 347.25 1360.15 1012.9 291.69
Total 40364.73 43169.36 2804.63 307.62
EXPENDITURE
Cargo Handling & 10352.26 11202.08 849.82 8.21
Storage
Port & Dock 5919.96 5553.06 366.9 6.20
charges
Railway Workings 1937.89 2408.82 470.93 24.31
Rentable Land & 344.99 433.94 88.94 25.79
Buildings
Management & 10092.32 11696.32 1604.0 15.90
Administration
Total 28647.42 31294.22 2647.1 80.41
Gross Operating 11717.31 11875.14 157.53 1.35
Surplus
Finance &
Miscellaneous 7132.08 8856.82 1724.74 24.19
Income
Finance & 7254.73 4895.32 2359.21 32.52
Miscellaneous
Expenses
NET SURPLUS 11594.86 15836.34 4241.48 36.58
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TABLE NO. 6.1.14 - COMPARATIVE INCOME STATEMENT OF

PARTICULAR 31.3.2008 31.3.2009 INCREASE %

INCOME
Cargo handling &
Storage charges
26342.42 3320. 28 6860.86 26.05
Port & Dock 11975.07 14325.78 2350.71 19.64
charges
Estate Rentals 1360.15 1201.61 158.54 11.66
Total 43169.36 53497.18 10328.82 93.85
EXPENDITURE
Cargo Handling & 11202.08 12388.14 1186.06 1059
Storage
Port & Dock 5553.06 5591.16 38.1 0.69
charges
Rentable Land & 433.94 460.93 26.99 6.22
Buildings
Management & 11696.32 14018.85 2322.53 19.86
Administration
Total 31294.52 34808.32 3513.8 62.09
Gross Operating 11874.84 18688.86 6814.02 57.39
Surplus
Finance & 8856.82 13879.27 5016.45 56.66
Miscellaneous
Income
Finance & 4895.32 6283.60 1388.28 28.36
Miscellaneous
Expenses
NET SURPLUS 15836.34 26278.53 10442.19 65.94
INFERENCE FOR COMPARATIVE

INCOME STATEMENT
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 The income have increase from the 2006 - 2007 by 49.84% and
gross operating surplus has increase 9.33% and net surplus by 56.30%.
 The income have increase from the 2007 – 2008 by 307.62%, it

may be due to increase the demand for estate rentals and gross
operating surplus has increased by 1.35% and net surplus by 36.58%.
 The income have increased from the 2008 – 2009 by 93.85%,

but income has decrease in estate and operating group has increased by
57.39% and net surplus by 65.94%.
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6.1.15- COMPARATIVE BALANCE SHEET FOR THE YEAR 2006-2007

(In Rupees)
31.03.200 31.03.200 Increase/Decrease
Particulars
6 7 Amount Percentage
1. Reserves & Surplus
a. Capital Reserve 76191.4 79166.01 2974.61 3.90
b. Revenue Reserves 39227.01 40.344.47 1017.46 2.587
c. Statutory Reserves 9512.25 20312.25 10800.00 113.53
Total A 125030.66 139822.73 14792.07 11.83
2. Loan Funds
a. Secured Loans – – – –
b. Government Loans 2615.87 2365.32 (–) 250.55 (–) 9.57
c. Unsecured Loans – – – –
Total B 2615.87 2365.32 (–) 250.55 (–) 9.57
3. Current Liabilities
a. Provision 138374.21 145110.02 6735.81 4.86
Total C 138374.21 145110.02 6735.81 4.86
Total A+B+C 266020.74 287298.07 21277.33 7.99
Application of funds
1. Fixed Assets
Gross Block 58742.81 59554.17 811.30 1.38
Total A 58742.81 59554.17 811.30 1.38
2. Investments 80415.11 85620.12 5205.01 6.47
Total B 80415.11 85620.12 5205.01 6.47
3. Current Assets,
Loan & Advanced
a. Current Assets
i) Interest accrued on 10114.88 12888.27 2773.39 27.41
investments
ii) Stores Material 1682.28 1438.89 (–)243.39 (–)14.46
iii) Sundry Debtors 5902.60 4014.19 (–)1888.41 (–)31.99
iv) Cash & Bank 95780.20 87912.53 (–)7867.67 (–)8.21
Balances
b. Loans & Advances 13382.85 35870.15 22487.33 168.0
Total C 126862.81 142124.03 15261.72 12.0
Total A+B+C 266020.74 287298.32 21277.58 7.99
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6.1.16-COMPARATIVE BALANCE SHEET FOR THE YEAR 2007-2008

(In Rupees)
31.03.200 Increase/Decrease
Particulars 31.03.2007
8 Amount Percentage
b. Revenue Reserves 40344.47 42407.04 2062.57 5.112
Total A 139822.73 153016.00 13193.27 9.43
2. Loan Funds
Total B 2365.32 2114.76 (–) 250.55 (–) 10.59
a. Provision 145110.02 153487.31 8377.29 5.77
Total C
Total A+B+C 2872298.0 308618.07 21320.00 7.42
7
1. Fixed Assets
Gross Block 59554.17 58082.76 (–) (–) 2.47
7471.41
Total A 59554.17 58082.76 (–) (–) 2.47
7471.41
2. Investments 85620.12 82435.81 (–) (–) 3.719
3184.31
Total B 85620.12 82435.81 (–) (–) 3.719
3184.31
3. Current Assets,
Loan & Advanced
a. Current Assets
i) Interest accrued 12888.27 8847.20 (–) (–) 31.35
on investments 4041.07
ii) Stores Material 1438.89 1392.61 (–) 46.78 (–) 3.21
iii) Sundry Debtors 4014.19 4610.04 595.85 14.84
iv) Cash & Bank 87912.53 117907.51 29989.48 34.11
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Balances
b. Loans & Advances 35870.15 35347.14 (–) 523.01 (–) 1.458
c. Total (C) 142124.03 168099.51 25975.48 18.27
Total A+B+C 287298.32 308618.07 21319.75 7.42
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6.1.17- COMPARATIVE BALANCE SHEET FOR THE YEAR 2008-2009

(In Rupees)
31.03.200 31.03.200 Increase/Decrease
Particulars
8 9 Amount Percentage
1.Reserves & Surplus
c. Statutory Reserves 30712.25 45962.25 15250 49.65
Total A 153016.00 175110.58 22094.57 14.43
2. Loan Funds
Total B 2114.716 1864.21 (–) 250.50 (–) 11.8
a. Provision 153487.31 167379.31 13892.00 9.05
Total C
Total A+B+C 308618.07 344354.10 35736.00 11.57
1. Fixed Assets
Gross Block 58082.76 58576.84 494.13 0.0085
Total A 58082.76 58576.84 494.13 0.0085
2. Investments 82435.91 80101.24 (–) – 0.028
2334.57
Total B 82435.91 80101.24 (–) – 0.028
2334.57
3. Current Assets,
Loan & Advanced
a. Current Assets
i) Interest accrued 8847.20 8204.84 (–) 642.36 7.2
on
investments
ii) Stores Material 1392.61 1720.16 (–) 172.45 12.38
iv) Cash & Bank 117902.51 149737.64 31835.13 27.00
Balances
b. Loans & Advances 35347.14 37897.64 2550.50 7.2
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c. Total (C) 168099.51 205675.97 37576.40 22.00

Total A+B+C 308618.07 344354.10 35736.00 11.57
INFERENCE FOR COMPARATIVE BALANCE SHEET
CURRENT ASSETS:
 During the year 2006-2007, the current assets has been

decreased to 6.37% , which indicate that has not in a good liquidity
position during this year.

increased to 24.46% , which indicate that has in a good liquidity

CURRENT LIABILITIES:
 In the year 2006-2007, the current liabilities has decrease to

7.06% , which indicate that company has repaid its current liabilities
promptly.

promptly.

promptly.
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57
RESERVE AND SURPLUS:

 During the year 2006-2007 the reserve was increase to 24.20% which
shows that the company has maintain good reserve to meet
contingencies situation.
contingencies situation
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6.1.18 - COMMON SIZE INCOME STATEMENT OF C.P.T.

PARTICULAR 31.3.2006 % 31.03.2007 %

INCOME
Cargo handling & 23046.16 62.53 25392.47 62.91
Storage charges
Port & Dock charges 10364.70 28.12 11352.76 28.13
Estate Rentals 273.48 0.74 347.24 0.86
Total 36856.25 100 40364.72 100
EXPENDITURE
Cargo Handling & 10043.45 38.42 10352.39 36.14
Storage
Rentable Land & 252.10 0.96 344.98 1.20
Buildings
Management & 9063.53 34.67 10092.32 35.23
Administration
Total 26139.09 100 28644.74 100
Gross Operating 10717.15 100 11717.30 100
Surplus
Finance & 4501.82 36.59 7132.08 49.57
Miscellaneous
Income
Finance & 7800.49 63.41 7254.52 50.43
Miscellaneous
Expenses
NET SURPLUS 7418 100 11594.86 100
58
59
TABLE NO. 6.1.19- COMMON SIZE INCOME STATEMENT OF

PARTICULAR 31.3.2007 % 31.03.2008 %

INCOME
Cargo handling & 25392.47 62.91 26342.42 61.02
Storage charges
Estate Rentals 347.24 0.86 1360.15 3.15
Total 40364.72 100 43169.36 100
EXPENDITURE
Cargo Handling & 10352.36 36.14 11202.08 35.79
Storage
Rentable Land & 344.98 1.20 433.94 1.38
Buildings
Management & 10092.32 35.23 11696.32 37.37
Administration
Total 28644.74 100 31294.52 100
Gross Operating 11717.30 100 11874.84 100
Surplus
Finance & 7132.08 49.57 8856.82 64.44
Miscellaneous
Income
Finance & 7254.52 50.43 4895.32 35.56
Miscellaneous
Expenses
NET SURPLUS 11594.86 100 15836.34 100
59
60
TABLE NO. 6.1.20 - COMMON SIZE INCOME STATEMENT

PARTICULAR 31.3.2008 % 31.03.2009 %

INCOME
Cargo handling & 26342.42 61.02 33203.28 62.06
Storage charges
Estate Rentals 1360.15 3.15 1201.61 2.24
Total 43169.36 100 53497.18 100
EXPENDITURE
Cargo Handling & 11202.08 35.78 12388.14 35.58
Storage
Port & Dock charges 5553.06 17.74 55.91.16 16.06
Rentable Land & 433.94 1.38 460.93 1.32
Buildings
Management & 11696.32 37.37 14018.85 40.27
Administration
Total 31294.52 100 34808.32 100
Gross Operating 11874.84 100 18688.86 100
Surplus
Finance & 8856.82 64.41 13879.27 68.83
Miscellaneous
Income
Finance & 4895.32 35.59 6283.60 31.17
Miscellaneous
Expenses
NET SURPLUS 15836.34 100 26278.53 100
60
61
INFERENCE FOR COMMONSIZE

INCOME STATEMENT
 The income for the year 2006-2007 have increased from 36.85
to 40.36 crores and gross operating surplus has increased from 10.71 to
11.71 crores and also net surplus from 7.4 to 11.5 crores.
61
62
6.1.21- COMMON SIZE BALANCE SHEET

FOR THE YEAR 2006-2007
(In Rupees)
31.03.200 31.03.200
PARTICULARS % %
6 7
b. Revenue Reserves 39227.01 14.78 40.344.47 14.04
Total A 125030.66 47.00 139822.73 48.69
2. Loan Funds
b. Government Loans 2615.87 0.983 2365.32 0.823
c. Unsecured Loans – – –
Total B 2615.87 0.983 2365.32 0.823
a. Provision 138374.21 52.02 145110.02 50.50
Total C 138374.21 145110.02
Total A+B+C 266020.74 100.0 287298.07 100.00
0
1. Fixed Assets
Gross Block 58742.81 22.08 59554.17 20.72
Total A 58742.81 22.08 59554.17 20.72
2. Investments 80415.11 30.22 85620.12 29.80
Total B 80415.11 30.22 85620.12 29.80
3. Current Assets, Loan
& Advanced
a. Current Assets
investments
ii) Stores Material 1682.28 0.632 1438.89 0.500
iv) Cash & Bank Balances 95780.20 36.00 87912.53 30.59
b. Loans & Advances 13382.85 5.03 35870.15 12.48
c. Total (C) 126862.81 47.70 142124.03 49.49
62
63
Total A+B+C 266020.74 100.0 287298.32 100.00

0
63
64

(In Rupees)
31.03.200 31.03.200
PARTICULARS % %
7 8
b. Revenue Reserves 40.344.47 14.04 42407.04 13.74
Total A 139822.73 48.69 153016.00 49.58
2. Loan Funds
Total B 2365.32 0.823 2114.716 0.685
a. Provision 145110.02 50.50 153487.31 49.73
Total C 145110.02 50.50 153487.31 49.73
Total A+B+C 287298.07 100.0 308618.07 100.00
0
1. Fixed Assets
Gross Block 59554.17 20.72 58082.76 18.82
Total A 59554.17 20.72 58082.76 18.82
2. Investments 85620.12 29.80 82435.91 26.71
Total B 85620.12 29.80 82435.91 26.71
& Advanced
a. Current Assets
investments
b. Loans & Advances 35870.15 12.48 35347.14 11.45
c. Total (C) 142124.03 49.49 168099.51 54.47
64
65
Total A+B+C 287298.32 100.0 308618.07 100.00

0
65
66

(In Rupees)
31.03.200 31.03.200
PARTICULARS % %
8 9
Total A 153016.00 49.58 175110.58 50.86
2. Loan Funds
Total B 2114.716 0.685 1864.21 0.541
a. Provision 153487.31 49.73 167379.31 48.60
Total C 49.73 48.60
Total A+B+C 308618.07 100.0 344354.10 100.00
0
1. Fixed Assets
Gross Block 58082.76 18.82 58576.84 17.02
Total A 58082.76 18.82 58576.84 17.02
2. Investments 82435.91 26.71 80101.24 23.26
Total B 82435.91 26.71 80101.24 23.26
& Advanced
a. Current Assets
investments
b. Loans & Advances 35347.14 11.45 37897.64 11.00
c. Total (C) 168099.51 54.47 205675.97 59.72
66
67
Total A+B+C 308618.07 100.0 344354.10 100.00

0
INFERENCE FOR COMMONSIZE BALANCE SHEET
CURRENT ASSETS:
 During the year 2006-2007, the current assets has decreased

from 42.67% to 37.01%, which indicate that company has spend some
amount money for the purchase of assets.
 During the year 2007-2008, the current assets has increased

amount money for the purchase of assets

 The current liabilities of firm have decreased from 52.02% to

50.50% which indicate that the company has repaid its debts during the
year 2006-2007 there is an outflow of cash.


48.60%, which indicate that the company has repaid its debts during
the year 2008-2009 there is an outflow of cash.
67
68
TABLE NO. 6.1.24 - WORKING CAPITAL STATEMENT

ANALYSIS FOR THE YEAR 2006-2007
Particulars 2006 2007
Current Asset
i) Investment 80415.11 85620.12
ii) Interest accrued on investments 10114.88 12888.27
iii) Stores Material 1682.28 1438.89
iv) Sundry Debtors 95780.20 4014.19
v) Cash & Bank Balances 13382.85 87912.53
Total A 201375.32 191874.00
Current Liabilities
Provision 138374.21 145110.02
Total B 138374.21 145110.02
Working Capital (A-B) 63001.11 46763.98
Increase in working capital 16237.13
63001.11 63001.11
68
69
TABLE NO. 6.1.25- WORKING CAPITAL STATEMENT

Current Asset
i) Investment 85620.12 82435.81
Total A 191874.00 215188.17
Current Liabilities
Provision 145110.02 153487.31
Total B 145110.02 153487.31
Decrease in working capital 14936.88
61700.86 61700.86
69
70
TABLE NO. 6.1.26 - WORKING CAPITAL STATEMENT

Current Asset
i) Investment 82435.81 80101.24
Total A 215219.17 247879.55
Current Liabilities
Provision 154348.71 206215.32
Total B 154348.71 206215.32
Increase in working capital 19206.23
60870.46 60870.46
70
71
DATA ANALYSIS AND INFERPRETATION:
The working capital statement analysis has been seen for 3 years.
• In 2006-2007, the value has been increased 16237.13
• In 2007-2008, the value has been decreased 14936.88
• In 2008-2009, the value has been increased 19206.23
71
72
Table No. 6.1.27-

TREND PERCENTAGE FOR THE YEAR 2004-2009
(In Rupees)
2004- 2005- 2006- 2007- 2008-
Particulars
05 06 07 08 09
a. Capital Reserve 100 104 107.7 108.7 111.96
b. Revenue Reserves 100 100.8 103.4 108.7 120.28
1 0
c. Statutory Reserves 100 139.7 298.0 450.7 674.49
9 8 0
Total A 100 104 117.2 128.3 146.82
3 0
2. Loan Funds
a. Secured Loans – – – – –
b. Government Loans 100 90.81 82.11 73.41 64.71
c. Unsecured Loans – – – – –
Total B 100 90.81 82.11 73.41 64.71
a. Provision 100 240.9 252.6 267.2 291.40
1 3 2
Total C 100 240.9 252.6 267.2 291.40
1 3 2
Total A+B+C 100 103.7 112.0 120.3 134.27
3 2 4
1. Fixed Assets
Gross Block 100 102.2 103.9 101.1 101.98
7 8 2
Total A 100 102.2 103.9 101.1 101.98
7 8 2
2. Investments 100 89.29 95.07 91.54 88.95
Total B 100 89.29 95.07 91.54 88.95
3. Current Assets, Loan &
Advanced
a. Current Assets
i) Interest accrued on 100 85.34 108.7 74.65 69.23
72
73
investments 5
ii) Stores Material 100 84.41 72.20 69.87 61.22
iii) Sundry Debtors 100 113.0 76.90 88.32 165.06
8
iv) Cash & Bank Balances 100 129.1 118.5 158.9 201.93
6 5 9
b. Loans & Advances 100 84.99 227.8 224.2 240.68
1 7
c. Total (C) 100 116.4 130.4 154.2 188.75
2 3 7
Total A+B+C 100 103.7 112.0 120.3 134.27
3 2 4
73
74
DATA ANALYSIS AND INFERPRETATION:
Trend analysis has been seen for 5 years. The current assert and current
liabilities has been increased year to year.
74
75
LINEAR REGRESSION
OBJECTIVE
To find out future income of the company
The trend equation is y = a + b(x) ----------- 1

Where a = ∑ Y/N ----------- 2
B = ∑ XY/∑ X2 ---------- 3
TABLE NO. 6.1.28
Year Income X X2 XY
2004-05 335.45 -2 4 -670.90
2005-06 368.56 -1 1 -368.56
2006-07 403.64 0 0 0
2007-08 431.69 1 1 431.69
2008-09 534.97 2 4 1069.94
Total 2074.31 0 10 462.17
Substitute the value of ∑ X2, ∑Y, ∑XY in equation “1” & “2”
We get,
a = 2074.31
----------
5
a = 462.17 ------------ 4
b = 462.17
----------
10
b = 46.21 ------------ 5
Equation “1” becomes,
Yc = 414.86 + 46.21 (x) ------------ 6
75
76
CHART NO. 6.2.28 – LINEAR REGRESSION
700 Income in Rupees
600
500
400
300
200
100
0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Years
INTERPRETATION
(Indirect method for Trend Analysis for Income Projection)
From the above table, the income of the five year from (2004-2008) is taken as “Y”,
from the statistical formula for trend equation are found which are give below:
Ye = 414.86 + 46.21(x)
In order to project the income of the company for the year 2009, we can take X = 3,
then the income of company for the year 2009 is given below.
Ye = 553.49 crores
76
77
In order to project the income of the company for the year 2010, we can take X = 4,
Ye = 599.70 crores
In order to project the income of the company for the year 2011, we can take X= 5,
Ye = 645.91 crores.
For the year 2009 X=3, then
Ye = 414.86 + 46.21(3) ----------- 7
Ye =553.49 ----------- 8
For the year 2010 X = 4, then
Ye = 414.86 + 46.21(4) ----------- 9
Ye = 599.7 ----------- 10
For the year 2011 X = 5, then
Ye = 414.86 + 46.21(5) ----------- 11
Ye = 645.91 ------------ 12
77
78
7. FINDINGS
• The current ratio is low in 2004-05 with 0.91% and high in 2008-
09with 1.353%.
• The cash position ratio is increased in the year 2005-09 with ratio
1.2733% to 1.4828%.
• The fixed assets ratio of the company in the year 2004-05 the level
with the ratio 22.45%.In the year 2008-09 its high with the ratio
54.04%.
• The debt equity ratio ranges from 7.26% to 5.07%. The ratio is peak in
the year 2005 and 2007 with 6.41% and low in the year 2009 with
5.07%. The firm’s debt equity ratio is in the satisfactory level
• The ROI fluctuates from 5.81% to 98.91%. The ROI is high in

financial year 2009 with 98.91% and is low in 2005 with 5.81%.
• The return on total asset ratio ranges from 12.63% to 34.96%. There is
a increasing level in the total asset of the company.
• The administrative expenses ratio is 22.31 in the year 2004 -05 and it
decreased to 852.25 in the year 2008-09.
• The gross profit ratio is in the year 2004 -05 was 0.290 And it
decreased to 0.3617 in the year 2008- 09
• The net profit ratio is in the year 2004 -05 it was 0.37 And it
decreased to 0.36 in the year 2008- 09.
78
79
• The operating ratio year 2004-05 it was 0.81 and it does not increase
but it has been smoothly running in the last year2008-09 it was
declined 0.65.
• The asset turnover ratio 2004-05 it was 0.12 2004-06 it was same 0.13
and in final year of 2008-09 it was 0.14.
INFERENCE FOR COMPARATIVE INCOME STATEMENT
 The income have increase from the 2006-2007 by 49.54% and

gross operating surplus has increase 9.33% and net surplus by 56.30%.
 The income have increase from the 2007 – 2008 by 307.62%, it

may be due to increase the demand for estate rentals and gross
operating surplus has increased by 1.35% and net surplus by 36.58%.
 The income have increased from the 2008 – 2009 by 93.85%,

but income has decrease in estate and operating group has increased by
57.39% and net surplus by 65.94%.
79
80
INFERENCE FOR COMPARATIVE BALANCE SHEET
CURRENT ASSETS:
decreased to 6.37%, which indicate that has not in a good liquidity

increased to 24.46%, which indicate that has in a good liquidity


7.06%, which indicate that company has repaid its current liabilities
promptly.

promptly.

promptly.
RESERVE AND SURPLUS:

80
81
contingencies situation
 During the year 2008-2009 the reserve was increase to 27.03%

which shows that the company has maintain good reserve to meet
INFERENCE FOR COMMONSIZE INCOME STATEMENT
INFERENCE FOR COMMONSIZE BALANCE SHEET
CURRENT ASSETS:
 During the year 2006-2007, the current assets has decreased


amount money for the purchase of assets
81
82




48.60%, which indicate that the company has repaid its debts during
the year 2008-2009 there is an outflow of cash.
DATA ANALYSIS AND INFERPRETATION FOR WORKING

CAPITAL:
The working capital statement analysis has been seen for 3 years.
 In 2006-2007, the value has been increased 16237.13
 In 2007-2008, the value has been decreased 14936.88
 In 2008-2009, the value has been increased 19206.23
DATA ANALYSIS AND INFERPRETATION FOR TREND

ANALYSIS:
Trend analysis has been seen for 5 years. The current assert and current
liabilities has been increased year to year.
82
83
INTERPRETATION FOR LINEAR REGRESSION
(Indirect method for Trend Analysis for Income Projection)
From the above table, the income of the five year from (2004-2008) is taken as “Y”,
from the statistical formula for trend equation are found which are give below:
Ye = 414.86 + 46.21(x)
In order to project the income of the company for the year 2009, we can take X = 3 ,
Ye = 553.49 crores
In order to project the income of the company for the year 2010, we can take X = 4 ,
Ye = 599.70 crores
In order to project the income of the company for the year 2011, we can take X= 5 ,
Ye = 645.91 crores
83
84
8. SUGGESTION
• There is an increasing in working capital due to increase in current

asset. The port wants to maintain the current asset and current
liabilities for forth coming year.
• The trend analysis of income and expenses indicates an increasing

trend for forth coming years.
• The cash position ratio indicates that liquidity of the organization is

weak so the collection period of sundry debtor should be reduced.
• Current liabilities of organization are reduced.
• Secured loan are increasing year to year. It should be reduced in the
forth coming year.
84
85
9. CONCLUSION
On studying the financial performances (through ratio analysis of
CHENNAI PORT TRUST) for a period of three years from 2004-2009 to study
reveals that the financial performances in general is satisfactory.
It could be concluded that the PORT must increase the performance level of the
organization.
The study reveals the financial position of the company for the four years. The
study will enable the company to plan for future Financial analysis establishes
relationship between different items in the balance sheet and helps to analyzing the
firm’s profitability over time, its ability to generate cash, to be able to pay interest and
repay principle It’s of responsibilities financial manager to see that the source of the
funds are used in an effectively and efficiently. There is a scope for diversification
and also the company has the opportunity for enter global market.
85
86
10. BIBLIOGRAPHY
REFERENCES
 M.Y.Khan & P.K.Jain – Management Accounting, Tata McGraw Hill

publishing company Ltd., 2004\
 M.A.Sahaf – Management Accounting (Principles & Pratice): Vikas

Publishing House Pvt. Ltd., New Delhi, 2004
 R.S.N.Pillai & Bagavathi – Managemnt Accounting S.Chand & Co. Ltd.,

New Delhi, (2002)
 R.Narayanaswamy – Financial Accounting – A managerial perspective

Prentice Hall India Pvt., Ltd., New Delhi.
 Bhattacharya S.K.John Dearden Accounting for Managemnt text and cases –

Vikas publishing house, New Delhi, 2000.
 Charles T.Hornegren – Introduction to management accounting Prentice Hall,

New Delhi, 2001.
 I.M.Pandey Financial Management, Vikas Publishing House Pvt. Ltd., 8th

edition, 1999
 M.Y. Khan and P.K.Jain Financial management, Text, Problems and cases Tata
McGraw Hill Publishing company Ltd., 4th edition, 2004.
 Company annual report of Chennai port trust

WEBSITE:
 www.google.com
 www.chennaiport.gov.in
86

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1

1.1 INTRODUCTION ABOUT THE TOPIC:

The present study of financial performance of Chennai port trust is intended to

The project communicates financial information to the users through

in modern enterprises financial manager occupies a key position he is responsible for

The financial statement method used was comparative income statement,

2.2. NEED OF THE STUDY

2.3. OBJECTIVES OF THE STUDY:-

• To calculate profitability turnover , financial ratio, solvency ratio to

• To calculate the future income of the company by using trend

• To know the strengths and weakness of Chennai port trust references

• To suggest ways and means of improving the financial position of

2.4. SCOPE OF THE STUDY

3.1 PORT OVERVIEW

Chennai Port is an artificial harbor started on the Coromandel Coast in south-

The Chennai Port Trust is committed to –

• To achieve excellence in port operations through dedicated, loyal and

• Strive for continual improvement at all levels by enhancing skills,

• Strive to achieve maximum value addition through the most effective

• To become the best Port in environmental management and in

• Provide efficient, prompt, safe and timely service at optimum cost.

• Ensure quick turn round of vessels by providing facilities for efficient

• Maintain total transparency in all our transactions and

• Continually improve our services to meet the expectations of the Port

Users, employees and the Society.

3.2 ORGANISATION STRUCTURE AND DEPARTMENTS:

 Civil engineering department.

 Electrical and mechanical engineering

 Central industrial security force department

3.3 THE HIERARCHIES IN THE

DEPUTY CHIEF OFFICER

3.4 THE CHENNAI PORT SURGES AHEAD WITH:

• More than 100 years of tradition

• Commitment for efficiency thro’ innovation and continuous

• Efficient services at minimum cost

• Simple and integrated procedures

• Facilities to handle cars and containers matching to international

Latitude : 13° 06’ N

Longitude : 80º 18’ E

Time : +5 Hrs. 30Minutes

Temperature : 30º C Max. 18º C Min

Annual Rainfall : About 125 Cms.

Spring Tides : 1.2 Meters

SOIL : Predominantly sandy and silt

LENGTH OF CHENNEL : About 7 kilometers

WIDTH OF CHENNEL : The width of channel gradually

Depth of Inner Chennel : 18.6 m below chart datum

Depth of Outer Chennel : 19.2 m below chart datum

• For details of entrance Channel please refer Indian Naval

The approach channel to the Port has two sections.

A. The entrance channel within the protection of Outer Arm.

B. The outer channel beyond the protection of Outer Arm.

NAVIGATIONAL AIDS AVAILABLE:

1) Nine channels buoy marking the 7kms. Long channel.

2) Transit lights to assist the vessels to negotiate.

3) Racon and sector lights to assist vessels to enter channel.

4) Light Beacon to assist vessels approaching Port of Chennai.

PILOT BOARDING AREAS:

1) Area 1 is approximately two kilometers northeast of breakwater for ships up to

3.5 PORT AUTHORITY

3.6. PRODUCTS AND SERVICES OFFERED

CHENNAI PORT’S DREDGER “CAUVERY’

FLOATING CRANE “ THANGAM