A

PROJECT REPORT
ON
RATIO ANALYSIS
Of
Infowiz Pvt. Ltd.

Under The Supervision of Submitted By:

Submitted By:
Rahul Mehta
MBA ( 2nd Year )
Roll No : 180175207

SETH JAI PARKASH MUKAND LAL INSTITUDE OF

ENGINEERING & TECHNOLOGY ( YAMUNANAGAR , 135001 )
( Approved by AICTE & HRD ministry, Affiliated to Kurukshetara University )

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 KURUKSHETRA UNIVERSITY, KURUKSHETRA
ACKNOWLEDGEMENT

To test the student’s academic knowledge in practical situations of corporate world, Semester
summer internship has been included in the MBA course. I would like to take this moment to
express my deepest gratitude to the group of people without whose help and support I would not
have been able to complete this project.

I wish to begin by thanking the management at INFOWIZ COMPANY At Chandigarh. MS.

KARANPREET (Professor of Finance dept) for providing me this great opportunity to work in
their esteemed Company.I would also like to thank them for the help, support and guidance that
they have provided me with during the course of my project work.

I would also like to deeply thank my industry mentor MS. KARANPREET for his valuable
insights and constant guidance and support.

I express my deep sense of gratitude to the management of SDIMT for imparting me with the
required help. I would like to specially thank my college mentor Mrs. Anjali Aggarwal , for her
guidelines, support and motivation which have been a great help to me for this project.

I would also like to thank all those people who spent their valuable time in this project, and all
those people who directly or indirectly contributed in making this project a success.

Rahul Mehta

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 PREFACE

For the completion of the MBA it has been mandatory to obtain Training in Finance. This
training session really help me in gathering knowledge of market.
I have prepared this Project on the topic “Ratio Analysis in Infowiz Company At Chandigarh” in
which I have written about how an organization set their standards to make comparison and
better production..
This Report is prepared during my semester training. Training is life’s greatest treasure as it is
full of experience, observation and knowledge. The training held was very gainful as it took us
close to real life. This period also provide a chance to give theoretical knowledge a practical
shape and to learn from practical results semester training that I have taken at Infowiz Co. ,
Chandigarh. It has been very educative and fruitful experience for me for it has given mean
insight into some practical experience without which classroom knowledge can be regarded as
incomplete.
I wish this great company success so it may flourish and serve the nation and have to achieve
many goals.

Thanks

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 DECLARATION

I, Rahul Mehta declare that the project Ratio Analysis in INFOWIZ Pvt Ltd , at Chandigarh
submitted to KURUKSHETRA UNIVERSITY , KURUKSHETRA in partial fulfillment of the
requirement of the degree of MBA is a record of original project work done by me.

I further declare that this project report has not been submitted to any other university/ institution
of any degree.

RAHUL MEHTA

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 CERTIFICATE BY THE GUIDE

This is to certify that Mr Rahul Mehta student of MBA Final Year Seth Jai Parkash Mukand Lal
Institute of Engineerin and Technolog , has undertaken the project entitled Ratio Analysis of
Infowiz Co. , Under my guidance and supervision for partial fulfillment of the requirement for
the degree of MBA .

Mrs. Anjali Aggarwal

(Project Guide)

5
 INDEX

CHAPTER 1 :-
1.1 : Introduction Of Ratio Analysis
 Meaning Of Ratio Analysis
 Nature Of Ratio Analysis
 Objectives of Ratio Analysis
 Use And Significance of Ratio Analysis
 Interpretation Of Ratio Analysis
 Precaution For Use Of Ratio Analysis
 Classification Of Ratio Analysis
 Advantages of Ratio Analysis
 Limitations Of Ratio Analysis
1.2 : Organisation Profile
1.3 : Need For Study
1.4 : Objectives

CHAPTER 2 :- Review Literature

CHAPTER 3 :- Research Methodology

 Research
 Research Methodology
 Research Design
 Device Used
 Benifits

CHAPTER 4 :- Analysis And Discussion

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  LIQUIDITY RATIOS
 ACTIVITY RATIOS
 LONG TERM SOLVENCY RATIOS
 PROFITABILITY RATIOS

CHAPTER 5 :- Conclusion

CHAPTER 6 :- Recommendation
6.1 : Suggestions
6.2 : Bibliography
6.3 : Annexure

7
CHAPTER – 1

INTRODUCTION OF
RATIO ANALYSIS

8
  1.1 : INTRODUCTION AND MEANING OF RATIO

There are various methods and techniques used in

analyzing financial statements, such as comparative statement, trend analysis, common size
statement; schedule of changes in working capital, fund flow and cash flow analysis, cost volume
profit analysis and 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. It is with the help of ratios
that financial statements can be analyzed more clearly and decision made from such analysis.

Ratio is a simple arithmetical expression of the relationship of one number to another.

A financial ratio is the relationship between two Accounting figures expressed mathematically.
Ratio Analysis is a technique of analysis and interpretation of financial statements. It is the
process of establishment and interpreting various ratios for helping in making certain decision.

Meaning :
A relationship between various accounting figures, which are connected with
each other, expressed in mathematical terms is called ratio.

Definition :
According to Kennely and Macmillan, “The relationship of one item to
another expressed in simple mathematical form is known as ratio.”

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  Nature Of Ratio Analysis

Ratio analysis is a technique of analysis and interpretation of

financial statements. It is the process of establishing and interpreting various ratios for helping in
making certain decisions. However, ratio analysis is not an end in itself. It is only a means of
better understanding of financial strengths and weakness of a firm. Calculation of mere ratios
does not serve any purpose, unless several appropriate ratios are analyzed and interpreted. There
are a number of ratios, which can be calculated from the information given in the financial
statements; but the analyst has to select the appropriate data and calculate only a few appropriate
ratios from the same keeping in mind the objective of analysis. The following are the four steps
involved in the ratio analysis:

 Selection of relevant data from the financial statements depending upon the objective of
the analysis.

 Calculation of appropriate ratios from the above data.

 Comparison of the calculated ratios with the ratios of the same firm in the past, or the
ratios developed from projected financial statements or the ratios of some other firms or
the comparison with ratios of the industry to which the firm belongs.

 Interpretation of the ratio.

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  Objectives of Ratio Analysis

Ratio analysis is indispensable part of interpretation of results

revealed by the financial statements. It provides users with crucial financial information and points
out the areas which require investigation. Ratio analysis is a technique which involves regrouping
of data by application of arithmetical relationships, though its interpretation is a complex matter. It
requires a fine understanding of the way and the rules used for preparing financial statements.
Once done effectively, it provides a lot of information which helps the analyst:

① To know the areas of the business which need more attention.

② To know about the potential areas which can be improved

with the effort in the desired direction.

③ To provide a deeper analysis of the profitability, liquidity,

solvency and efficiency levels in the business.

④ To provide information for making cross-sectional

analysis by comparing the performance with the best industry standards.

⑤ To provide information derived from financial

statements useful for making projections and estimates for the future.

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  Use And Significance of Ratio Analysis

The ratio analysis is one of the most powerful tools of

financial analysis. It is used as a device to analyze and interpret the financial health of enterprise.
Just like a doctor examines his patient by recording his body temperature, Blood pressure etc.
before making his conclusion regarding the illness and before giving his treatment, a financial
analyst analyses the financial statements with various tools of analysis before commenting upon
the financial health or weakness of an enterprise. A ratio is known as a symptom like Blood
Pressure, the pulse rate or the temperature of an individual. It is with the help of ratios that
financial statements can be analyzed more clearly and decision made from such analysis. Thus the
ratio has wide applications and is of immense use today.

 Utility to Managers : -
1) Helps in decision making: - Financial statements are prepared primarily for decision
making but the information provided in financial statements is not an end in itself and
no meaningful conclusion can be drawn from these statements alone.
2) Helps in financial forecasting and planning: - Ratio analysis is of much help in
financial forecasting and planning. Planning is looking ahead and the ratios calculated
for a number of years work a guide for the future.
3) Helps in communicating: - The financial strength and weakness of a firm are
communicating in a more easy and understandable manner by the use of ratios. The
information contained in the financial statements is conveyed in a meaningful manner
to the one for whom it is meant.
4) Helps in Co-coordinating: - Ratio even help in co-ordination which is of utmost
importance in effective business management. Better communication of efficiency
and weakness of an enterprise results in better coordinating in the enterprise.
5) Helps in controls: - Ratio analysis even help in making effective control of the
business. Standard ratios can be based upon the Performa financial statements and
variances or deviation which helps in effective control of the business.

12
 Utility to Creditors: - The creditors or suppliers extend short term credit to the concern.
They are interested to know whether financial position of the concern warrants their
payments at a specified time or not. The concern pays short term creditors out of its
current assets. If the current assets are quite sufficient to meet current liabilities then the
creditor will not hesitate in extending credit facilities. Current and Acid test ratios will
give an idea about the current financial position of the concern.
 Utility to employees: - The employees are also interested in the financial position of the
concern especially profitability. There wage increases and amount of fringe benefits are
related to the volume of profits earned by the concern. The employees make use of
information available in the financial statements. Various profitability ratios relating to
gross profit, operating profit, net profit etc. enables employees to put forward their
viewpoint for the increase wages and other benefits.
 Utility to Government: - Government is interested to know the overall strength of the
industry. Various financial statements published by industrial units are used to calculate
ratios for determining the short term, long term and overall financial position of the
concerns. Profitability index can also be prepared with the help of ratios. Government
may base its future policies on the basis of industrial information available from various
units. The ratios may used as indicators of overall financial strength of public as well as
private sectors. In the absence of reliable economic information, governmental plans and
policies may not prove successful.
 Tax Audit requirements: - Section 44 AB was inserted in the Income Tax Act by the
Finance Act, 1984. Under this section every assesses engaged in any business and having
turnover or gross receipts exceeding Rs.40 Lacs is required to get the accounts audited by
Chartered Accountant and submit the Tax Audit Report before the due date for filing the
return of Income under section 139(1). In case of professional, a similar report is required
if the gross receipt exceed Rs.10 Lacs. Clause 32 of the Income Tax Act requires that the
following accounting ratios should be given :-
1.) Gross profit/turnover.
2.) Net profit/Turnover.
3.) Stock in trade/turnover.

13
 4.) Material consumed/Finished goods produced.
Further, it is advisable to compare the accounting ratios for the year
under consideration with the accounting ratios for the earlier two years so that the auditor can
make necessary enquiries, if there is any major variation in the accounting ratios.

 Interpretation Of Ratio Analysis

The interpretation of ratios is an important factor. Though calculation

of ratios is also important but it is only a clerical task whereas interpretation needs skill,
intelligence and foresightedness. The impact of the factors such as price level changes, change in
accounting policies, window dressing etc. should also be kept in mind when attempting to interpret
ratios.

A single ratio in itself does not convey much of the sense. To make ratio useful they have to
be further interpreted. The interpretation of the ratios can be made in the following ways:-

 Single absolute ratio: - Generally speaking one cannot draw any meaningful conclusion
when a single ratio is considered in isolation. But single ratio may be studied in relation
to certain rules of thumb which are based upon well proven conventions as for example
2:1 is considered to be good ratio for current assets to current liabilities.
 Group of ratios: - Ratio may be interpreted by calculating a group of related ratios. A
single ratio supported by other related additional ratios becomes more understandable and
meaningful. For example, the ratio of current assets to current liabilities may be
supported by the ratio of liquid assets to liquid liabilities to draw more dependable
conclusions.
 Historical comparison: - One of the easiest and most popular ways of evaluating the
performances of the firm is to compare its present ratios with its past ratios called
comparison overtime. When financial ratios are compared over a period of time, it give
an indication of the direction of change and reflects whether the firm’s performance and
financial position has improved, deteriorated or remained constant over a period of time.
But while interpreting ratios from comparisons over time, one has to be careful about the

14
 changes, if any, the firm’s policies and accounting procedures.
 Projected ratios: - Ratio can also be calculated for future standards based upon the
projected or Performa financial statements. These future ratios may be taken as standard
for comparison and the ratios calculated on actual financial statements can be compared
with the standard ratios to find out the variances, if any. Such variances help in
interpreting and taking corrective action for improvement in future.
 Inter-firm comparison: - Ratios of one firm can also be compared with ratios of some
other selected firms in the same industry at the same point of time. This kind of
comparison helps in evaluative relative financial position and performance of the firm.
But while making use of such comparison one has to be very careful regarding the
different accounting methods, policies and procedures adopted by different firms.

 Precaution For Use Of Ratio Analysis

The calculation of May not be difficult task but their use is not easy. The
information on which these are based, the constraints of financial statements, objective for using
them, the caliber of the analyst etc. are important factors which influence the use of ratios.
Following guidelines or factors may be kept in mind while interpreting various ratios:-

 Accuracy of financial statements: - The ratios are calculated from the data available in
financial statements. The reliability of ratios is linked to the accuracy of information in
these statements. Before calculating ratios one should see whether proper concepts and
conventions have been used for preparing financial statements or not. These statements
should also be properly audited by competent auditors. The precautions will establish the
reliability of data given in financial statements.
 Objective of analysis: - The type of ratios to be calculated will depend upon the purpose
for which these are required. If the purpose is to study current financial position then
ratios relating to current assets and current liabilities will be studied. The purpose of
‘USER’ is also important for analysis of ratios. A creditor, a banker, an investor, a
shareholder, all has different objects for studding ratios. The purpose or object for which
ratios are required to be studied should always be kept in mind for studied various ratios.
15
 Selection of Ratios: - Another precaution in ratio analysis is the proper selection of
appropriate ratios. The ratio should match the purpose for which these are required.
Calculation of large number of ratio without determining their need in the present context
may confuse the things instead of solving them. Only those ratios should be selected
which can through proper light on the matter to be discussed.
 Use of standards: - The ratios will give an indication of financial position only when
discussed with reference to certain standards. Unless otherwise these ratios are compared
with certain standards one will not be able to reach at conclusions. These standards may
be rule of thumb as in case of current ratio (2:1) and acid test ratio (1:1) may be industry
standards, may be budgeted or projected ratios etc. The comparison of calculated ratios
with the standards will help the analyst in forming his opinion about financial situation of
the concern.
 Caliber of the analyst: - The ratios are only the tools of analysis and their interpretation
will depend upon the caliber and competence of the analyst. He should be familiar with
various financial statements and significance of changes. A wrong interpretation may
create havoc for the concern since wrong conclusions may lead to wrong decisions. The
utility of ratios is linked to the expertise of the analyst.
 Ratios provide only a base: - The ratios are only guidelines for the analyst; he should
not base his decisions entirely on them. He should study any other relevant information,
situation in the concern, general economic environment etc. before reaching final
conclusions. The study of ratios in isolation may not always prove useful. A businessman
will not afford a single wrong decision because it may have far-reaching consequences.
The interpreter should use the ratios as guide and may try to solicit any other relevant
information which helps in reaching a correct decision.

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  Classification Of Ratio Analysis

The use of ratio analysis is not confined to financial manager only.

There are different parties interested in the ratios analysis for knowing the financial position of a
firm for different purposes. In view of various users of ratios, there are any types of ratios which
can be calculated from the information given in the financial statements. The particular purpose of
the user determines the particular ratios that might be used for financial analysis.

CLASSIFICATION OF
RATIO ANALYSIS

Short Term Long

Profitability
Financial Term
Analysis
Statement Solvency
Analysis Analysis

Liquidity Current
Assets
Analysis
Movement
Analysis

17
(1) Short Term Financial Statement Analysis
The Short term creditors of a company like suppliers of
goods of credit and commercial banks providing short term loans are primarily interested in
knowing the company's ability to meet its current or short term obligations as and when these
become due. Therefore a firm must ensure that it does not suffer from lack of liquidity or the
capacity to pay its current obligations. If a firm fails to meet such current obligations due to lack
of good liquidity position, its goodwill in the market is likely to be affected beyond repair. It will
result in a loss of creditor's confidence in the firm and may cause even closure of the firm. Two
types of ratios can be calculated for measuring short-term financial position or short-term
solvency of a firm.

I. Liquidity Ratios
II. Current Assets Movement or Efficiency Ratios

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 I. LIQUIDITY RATIOS

Liquidity refers to the ability of a concern to meet its current obligations as and when these
become due. The short-term obligations are met by realizing amounts from current, floating or
circulating assets. The current assets should either be liquid or near liquidity. These should be
convertible into cash or paying obligations of short-term nature. The sufficiency of current assets
should be assessed by comparing them with short term (Current) liabilities-The bankers,
suppliers of goods and others. Short Term creditors are interested in the liquidity of the concern.
They will extend credit only if they are sure that current assets are enough to pay out the
obligations. To measure the liquidity of a firm, following ratios can be calculated:-

o Current Ratio.
o Quick or Acid Test

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II. Current Asset Movement Analysis
These ratios ignore the movement of current assets, it is
important to calculate the following turnover or efficiency ratios to comment upon the liquidity
or the efficiency with which the liquidity resources are being used by a firm.
The efficiency with which assets are managed directly affects the volume of sales. The better
the management of assets, the larger is the amount of sales and the profits. Activity ratios measure
the efficiency or the effectiveness with which a firm manages its resources or assets. These ratios
are called turnover ratios because they indicate the speed with which assets are converted or turned
over into sales. It includes following ratios:-

o INVENTORY/ STOCK TURNOVER RATIO

o DEBTORS TURNOVER RATIO
o CREDITORS TURNOVER RATIIO
o WORKING CAPITAL TURNOVER RATIO

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(2) Long Term Solvency Analysis
The term solvency refers to the ability of a concern to
meet its long-term obligations. The long term creditors of a firm are primarily interested in
knowing the firm's ability to pay regularly interest on long term borrowings repayment of the
principal amount at the maturity and the security of their loans. Following ratios are calculated to
know the long-term solvency position of a company.

o Debt Equity Ratio

o Funded Debt to Total Capitalization Ratio
o Proprietary Ratio or Equity Ratio
o Solvency Ratio or Ratio of Total Liability to Total Assets:
o Fixed Assets to Net Worth Ratio
o Fixed Assets to Net Worth Ratio:

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(3) ANALYSIS OF PROFITABILITY
In the words of lord Keynes, ‘’profit is the engine
that drives the business enterprise ‘’. Businesses need profit not only for its existence but also for
expansion and diversification. The investors want an adequate return on their investment
.workers want higher wages, crs. Want higher security for their interest and loan and so on. A
business enterprise can discharge its obligations to the various segments of the socity only
through earning of profits. Profits are, thus a usefull meaeure of overall efficiency of a business.
Profits to the management are the test of efficiency and a measurement of control to owners a
measure of worth of their investement to the margin of safty .
The primary objective of a business is to earn Profits. Profits earning is considered essential for the
survival of the business. A business needs profits not only for its existence but also for expansion
and diversification. The investors want as adequate return on their investments, workers want
higher wages creditors want higher security for their interest and loan and so on. Business
enterprises can discharge its obligations to the various segments of the society only through
earning of profits.
Generally profitability rarios are calculate either in relation to sales or in relation to investment the
variorus profitability are discussed below:-

o G.P. Ratio
o Net worth ratio
o Operating Profit Ratio
o Net Profit Ratio:

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  Advantages of Ratio Analysis

The ratio analysis if properly done improves the

user’s understanding of the efficiency with which the business is being conducted. The numerical
relationships throw light on many latent aspects of the business. If properly analysed , the ratios
make us understand various problem areas as well as the bright spots of the business. The
knowledge of areas which are working better helps you improve the situation further. It must be
emphasised that ratios are means to an end rather than the end in themselves. Their role is
essentially indicative and that of a whistle blower. There are many advantages derived from ratio
analysis. These are summarised as follows:

 Helps to understand efficacy of decisions : The ratio analysis helps you to

understand whether the business firm has taken the right kind of operating, investing and
financing decisions. It indicates how far they have helped in improving the performance.

 Simplify complex figures and establish relationships : Ratios help in simplifying

the complex accounting figures and bring out their relationships. They help summarise the
financial information effectively and assess the managerial efficiency, firm’s credit
worthiness, earning capacity, etc.

 Helpful in comparative analysis : The ratios are not be calculated for one year only.
When many year figures are kept side by side, they help a great deal in exploring the trends
visible in the business. The knowledge of trend helps in making projections about the business
which is a very useful feature.

 Identification of problem areas : Ratios help business in identifying the problem areas
as well as the bright areas of the business. Problem areas would need more attention and bright
areas will need polishing to have still better results.

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 Enables SWOT analysis : Ratios help a great deal in explaining the changes occurring in
the business. The information of change helps the management a great deal in understanding
the current threats and opportunities and allows business to do its own SWOT (Strength-
Weakness-Opportunity-Threat) analysis.

 Various comparisons : Ratios help comparisons with certain bench marks to assess as to
whether firm’s performance is better or otherwise. For this purpose, the profitability, liquidity,
solvency, etc. of a business, may be compared: (i) over a number of accounting periods with
itself (Intra-firm Comparison/Time Series Analysis), (ii) with other business enterprises (Inter-
firm Comparison/Cross-sectional Analysis) and (iii) with standards set for that firm/industry
(comparison with standard (or industry expectations).

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  Limitations Of Ratio Analysis

The ratio analysis is one of the most powerful

tools of financial management. Though ratios are simple calculate and easy to understand, they
suffer from some serious limitations:-

 Limited use of single ratio: - A single ratio, usually, does not convey much of sense.
To make a better interpretation a number of ratios have to be calculated which is likely to
confuse the analyst than help him in making any meaningful conclusion.
 Lack of adequate standards: - There are no well accepted standards or rule of thumbs
for all ratios which can be accepted as norms. It renders interpretation of the ratios difficult.
 Inherent limitations of accounting: - Like financial statements, ratios are also suffer
from the inherent weakness of accounting record such as their historical nature. Ratios of the
past are not necessarily true indicators of the future.
 Change of accounting procedures: - Change in accounting procedure by a firm often
makes ratios analysis misleading e.g. a change in the variation of methods of inventories,
from FIFO to LIFO increases the cost of sales and reduces considerably the value of closing
stocks which makes stock turnover ratio to be lucrative and an unfavorable gross profit ratio.
 Window Dressing: - Financial statements can easily be window dressed to present a
better picture of its financial and profitability position to outsiders. Hence, one has to be very
careful in making a decisions from ratios calculated from such financial statements..
 Price level changes: - While making ratio analysis, no consideration is made to the
changes in price levels and this makes the interpretation of ratios invalid.
 Ratios no substitutes: - Ratio analysis is merely a tool of financial statements. Hence,
ratios become useless if separated from the statements from which they are computed.

25
  1.2 : INTRODUCTION OF THE COMPANY

 BRIEF HISTORY OF THE COMPANY

INFOWIZ is leading strategic IT
Company offering integrated IT solution. INFOWIZ is having rich experience managing global
clients across various business verticals and align IT strategies to achieve business goals. The
various accreditations that we achieved for every service, we offer reflect our commitment
towards the quality assurance.

INFOWIZ is a 8 years young organization which has won the

NATIONAL AWARD for 2 consecutive years 2014-2015 & 2015-16 for BEST Industrial
Training from Hon` able GOVERNER of Punjab & Haryana Sh. Kaptan Singh Solanki. He
is also the Chancellor of PTU & Punjabi University. INFOWIZ is a member of Confederation
of Indian Industry ( CII membership number – N4654P ) & also with an ISO Certification.
We have a global foot prints in providing the off shore companies of US, UK, France, Ireland,
Canada and Australia with quality and timely Web and SEO services.

26
 INFOWIZ is an organization which is established in the field
of Web Development (PHP & .NET), JAVA (Core as well as Advance), I-phone & Android
Applications, Embedded systems (AVR, PIC & ARM),Automation, ROBOTICS, Networking
(MCSE, CCNA & RHSE) & in Mechanical.

Our skilled team of professionals make sure that the product is developed as per the
customer’s needs and keeping the customer informed about the development of their project
from time to time. We do not only emphasize on formulating an attractive solution to our clients
but also believe in providing a workable solution. INFOWIZ offers research based Search
Engine Marketing products that help achieve greater insights to customer’s online business. Our
Research & Development arm offers SEO tools for SEM professionals.

INFOWIZ also provides Technical Support & Consultancy to Software Companies like
JIA Group, Newzealand, Sagitech solutions Panchkula, Jarc infotech Mohali, Infonet Solution,
Delhi etc.

Over time Infowiz has gained a reputation of delivering esteemed training. We provide 6
months industrial training in Chandigarh and Mohali to six weeks industrial training both
depending upon the student’s requirements. Infowiz provides training to students from various
fields involving CSE, IT, MCA, BCA, Civil, Electrical and Electronics, MBA and Mechanical.
We also provide specialized training in several technologies like PHP, Java, .NET, Android,
Networking, C/C++, Automation, Matlab, VLSI-VHDL, Autocad, 3Ds MAX, Solidworks, CNC
Programming, CRE-O, NX-CAD and many more. We also provide training in the latest
technologies like Python, AI, Machine Learning and VR along with few other diploma courses.
Infowiz apart from facilitating Industrial training in Chandigarh and Mohali also offers
services such as:
Web Designing
Website Development
Digital Marketing
Android and IOS app Development

27
Infowiz embarks upon a step further regarding industrial training with placements. We provide
in-house training aided by a strong placement and consultancy wing. We impart industry based
effective training and excellent placements by bolstering the students with technical and soft
skills. We have placed students in several reputed organizations like DRDO, NTPC, Indian
Railways, and MTS etc making Infowiz Software the best industrial training company in
Chandigarh, Mohali, Bathinda, and Delhi
.

 Our Mission :
 To bring to the students the best possible training and provide them with skills so that the
students get the placements and advance in their professional lives on a higher pedestal. We
aim to deploy the best of our infrastructure and team of experts in educating and training the
students with the skills necessary.
 To promote technical education.
 To maintain our status as an excellent training provider coupled with placements.
 To provide value-based education and make a difference.
 To provide best and sustainable services and solutions to clients.

“ I Hated Every Minute of Training, but I Said, “Don`t Quit. Suffer Now and
Live The Rest Of Your Life AS A Champion. ”
Muhammad Ali

 Our Vision :
Infowiz’s vision it to present itself as the best among the class nurturing
excellence through a systematic approach fostering the growth of students and our clients. We
wish to move to greater heights incorporating a high standard of ethics. We wish to expand our
services across several places and in the course making Infowiz Software the best industrial
training company in Chandigarh, Mohali, Bathinda, and Delhi.

28
 Values :
Our values are the silos upon which rests our company. We ensure to add value
to our education, services and help it to reach higher realms.

 Team Work :
Moving forward together with an all-inclusive mindset ensuring benefit to all.

 Respect :
Respect for individuals and addressing their needs.

 Delivery :
Time management and ensuring pinpoint and precise delivery with no delay
and extracting the most out of 6 months industrial training in Chandigarh and Mohali.

 Brilliance :
Offering best and competitive services and training solutions.

 Quality :
Ensuring quality backed by hard work and sincere effort.

29
 Our Hottest Clients & Projects:-

Sr. No. Projects URL’s Country

1) Viva Sales www.infowiz.in/vivasales UK

2) Mds Creative www.mdscreative.com Germany

3) Liddle TV www.filmon.com UK

4) Paradigms( Android) Running Australia

5) Printcost www.popgraphics.net UK

6) PSTDO Bootstrap www.bootstrap.achieversperfect.com USA

7) Essencesoftwares www.essencesoftwares.com Australia

8) Dashboard(Wordpress) Running USA

9) Realstate www.realestate.infowiz.in Russia

10) Dealpartners(WordPress) www.dealpartners.co.uk.gridhosted.co.uk UK

11) Littletonvineyard www.littletonvineyard.net USA

12) Gpakoffshore www.gpakoffshore.com UK

30
 OUR TEAM :-

“ A Ship is as good as the crew who sail her. ”

Our Technical team of professionals handing, designing & delivering of projects has a strong
presence in the North India & the US. Our engineers are already working on the latest
technologies like I-Phone & Android Applications, Robotics, VLSI-VHDL, Embedded
System, Networking and Cloud computing.

1) Dr. Seema
(Managing Director)
She is the backbone of INFOWIZ and a woman with more than 9 year rich practical
experience who believes in taking up new ventures and projects.

2) Mr. kamaljot kansal

(Deputy Director)
A man who strongly feel that “Nothing is Impossible”. A very committed team
leader who has been professionally attached with Multinational companies for more than 18
years and has lead the marketing teams in all states of North India.

3) Mr. Bonish singla

(Branch Manager)
A man who believes that “Honour Time & Place, then you will be honoured.” he
has more than 4 years solid industrial experience in a software companies & is very dashing and
innovative in his technical approach.

31
4) Ms. Urvashi
(Dean Academics)
A woman who believes that “Challenges are what make life interesting and
overcoming them is what makes life meaningful.” She has more than 3years experience in
business development.

5) Er. Nishant Goyal

(Manager)
A woman believes that “don’t wait for extra ordinary opportunities, seize common
occasions and make them great.” She has more than 4 years experience in marketing field.

6) Er. Kamal Garg

(Head & Technical Advisor at US Branch)
More than 10 years industrial experience in US and smooth handling of the entire
US business.

7) Ms.Mandeep Kaur
(Center Head- US Branch)
A woman who firmly believes that “In life, where you reach largely depends
upon where you start.” She joined this branch in the year 2007 and has given her immense inputs
in bringing the company to its present status.

32
 COURSES Offered :-

 For CSE/IT/MCA Professionals:-

1) Web Development in PHP with LIVE Projects

2) Web Development in .NET with LIVE Projects
3) JAVA (Core as well as Advance ) with LIVE Projects
4) Android Applications with LIVE Projects
5) Web Designing (Photoshop, Coral Draw)
6) C#, Console Applications, VB.NET, ASP.NET
7) MySQL, SQL, ORACLE
8) Networking (MCSE, CCNA, RHSE)
9) SEO (Search Engine Optimization)

 For ECE/EE/EIE/ME/CIVIL Professionals:-

1) Robotics With Live Project

2) VLSI-VHDL with Live Project
3) Embedded System Design with Live Project
4) Microcontroller with Live Project
5) Microprocessor with Live Project
6) PCB Designing
7) AVR & PIC Family
8) PCB and layout designing
9) AUTOMATION with Live Project
10) Project development with ARM processors
11) CATIA, PRO-E, AUTOCAD, SOLID WORKS.

Our core strength is our timely, technically and cost effective project delivery. We also provide
customers with designs as per their demands. INFOWIZ also provide JOB Oriented Industrial
Training of 1 year and 6/4/2 Months in CSE, IT, ECE, EE, ME, Civil, BBA,BCA,MBA, MCA
& also for Non-technical students . We help students in building their career.

33
1.3 : Need For Study

 The study has great significance and provides benefits to various parties whom directly or
indirectly with the company.
 To express the relationship between different financial aspects in such a way that it
allows the user to draw conclusion about the performance strengths and weakness of the
company.
 To diagnose the information contained in financial statement so as to judge the
profitability of the firm.
 The study helps to know a liquidity, solvency, profitability and turnover position of the
company.

34
1.4 : Objectives
The main objectives of the project are: -

o To get families with the actual working environment in industry.

o To work under an authority in discipline.
o To find out the gap between practical knowledge and theoretical knowledge
of Account & Finance.
o To complete the training report.
o To know the financial position of the industry.
o To know the working capital requirements of the concern.
o To know the profitability of the concern.
o To know the long term financial position of the concern.
o To know the liquidity position of concern.

35
CHAPTER – 2

REVIEW
LITERATURE

36
Munya Mtetwa (2010)
 In this article he short propose that about the fixed asset. He define that fixed assets are
assets that are used in production or supply of goods or services and they are to be used
within the business for more than one financial year. Consequently, fixed assets
represent the company's long term income generating assets and they can either be
tangible or non tangible. It includes land and buildings, plant and equipment, golf
courses, casinos, football players, machinery and hotels depending on the nature of the
business under consideration. Fixed asset turnover = Sales / Net fixed asset.

Jo Nelgadde (2010)
 In this article he briefly about the asset management ratio. It divided into different types
of categories. He state that about the used to analyze accounts receivable and other
working capital figures to identify significant changes in the 12 company’s operations
and financial accounts. He said that there are two categories about this ratio such as
account receivable turnover and average age of account receive. He measurement the
ratio as, Accounts receivable turnover = Sales / Average Accounts receivable. Average
age of accounts receivable/ collection period = 365 days / Accounts receivable Turnover.

Gopinathan Thachappilly (2009)

 In this articles he discuss about the Financial Ratio Analysis for Performance evaluation.
It analysis is typically done to make sense of the massive amount of numbers presented
in company financial statements. It helps evaluate the performance of a company, so that
investors can decide whether to invest in that company. Here we are looking at the
different ratio categories in separate articles on different aspects of performance such as
profitability ratios, liquidity ratios, debt ratios, performance ratios, investment evaluation
ratios.
 He discuss about the Profitability Ratios Measure Margins and Returns such as gross,
Operating, Pretax and Net Profits, ROA ratio, ROE ratio, ROCE ratio. However, he
determines the Gross profit is the surplus generated by sales over cost of goods sold. He
discussion about the Gross Profit Margin = Gross Profit/Net Sales or Revenue.

37
 Moreover, Operating profits are arrived at by deducting marketing, administration and
depreciation and R&D costs from the gross margin. Nonetheless, He explains about the
operating profit margin. Operating Profit Margin = Operating Profit/Net Sales or
Revenue. Nevertheless, pretax profits are computed by deducting non-operational
expenses from operating profits and by adding non-operational revenues to it. Pretax
Profit Margin = Pretax Profit/Net Sales or Revenue .Nonetheless, he also analysis about
the net profit margin.Net Profit Margin = Net Profit/Net Sales or Revenue. He also
explains that the returns on resources used dividend into three categories such as ROA,
ROE, and ROCE: At first the Return on Assets = Net Profit/ (Total Assets at beginning
of the period + Total Assets at the close of the period)/2) - The denominator is the
average total assets employed during the year. Return on Equity = Net Profit/
(Shareholders' Equity at the beginning of the year + Shareholders' Equity at the close of
the year)/2).ROCE ratio: Return on Capital Employed = Net Profit/ (Average
Shareholders' Equity + Average Debt Liabilities) - Debt Liabilities.

James Clausen (2009),

 He state that the Profitability Ratio Analysis of Income Statement and Balance Sheet
Ratio analysis of the income statement and balance sheet are used to measure company
profit performance. He said the learn ratio analyses of the income statement and balance
sheet. The income statement and balance sheet are two important reports that show the
profit and net worth of the company. It analyses shows how the well the company is
doing in terms of profits compared to sales. He also shows how well the assets are
performing in terms of generating revenue. He defines the income statement shows the
net profit of the company by subtracting expenses from gross profit (sales – cost of goods
sold). Furthermore, the balance sheet lists the value of the assets, as well as liabilities. In
simple terms, the main function of the balance sheet is to show the company’s net worth
by subtracting liabilities from assets. He said that the balance sheet does not report
profits, there’s an important relationship between assets and profit. The business owner
normally has a lot of investment in the company’s assets.
 In this article he barfly express about the liquidity ratio. He Pronounce that it is analysis
of the financial statements is used to measure company performance. It also analyses of

38
 the income statement and balance sheet. Investors and lending institutions will often use
ratio analyses of the financial statements to determine an 11 company’s profitability and
liquidity. If the ratios indicate poor performance, investors may be reluctant to invest.
Therefore, the current ratio or working capital ratio, measures current assets against
current liabilities. The current ratio measures the company’s ability to pay back its short-
term debt obligations with its current assets. He thinks a higher ratio indicates the
company is better equipped to pay off short-term debt with current assets. Wherefore, the
acid test ratio or quick ratio, measures quick assets against current liabilities. Quick assets
are considered assets that can be quickly converted into cash. Generally they are current
assets less inventory.
 He also state that the Liquidity Ratios help Good Financial .He know that a business has
high profitability, it can face short-term financial problems and its funds are locked up in
inventories and receivables not realizable for months. Any failure to meet these can
damage its reputation and creditworthiness and in extreme cases even lead to bankruptcy.
In addition to, liquidity ratios are work with cash and near-cash assets of a business on
one side, and the immediate payment obligations (current liabilities) on the other side.
The near-cash assets mainly include receivables from customers and inventories of
finished goods and raw materials. Coupled with, current ratio works with all the items
that go into a business' working capital, and give a quick look at its short-term financial
position. Current assets include Cash, Cash equivalents, Marketable securities,
Receivables and Inventories. Current liabilities include Payables, Notes payable, accrued
expenses and taxes, and Accrued installments of term debt). Current Ratio = Current
Assets / Current Liabilities. Similarly, Quick ratio excludes the illiquid items from
current assets and gives a better view of the business' ability to meet its maturing
liabilities. Quick Ratio = Current Assets minus (Inventories + Prepaid expenses +
Deferred income taxes + other illiquid items) / Current Liabilities. In the final ratio under
this article is cash ratio .Cash ratio excludes even receivables that can take a long time to
be converted into cash. Cash Ratio = (Cash + Cash equivalents + Marketable Securities) /
Current Liabilities.
 He denotes that about the total asset ratio. The calculation uses two factors, total revenue
and average assets to determine the turnover ratio. When calculating for a particular year,

39
 the total revenue for that year is used. Instead of using the year ending asset total from the
balance sheet, a more accurate picture would be to use the total average assets for the
year. Once the average assets are determined for the same time period that revenue is
compared, the formula for calculating the asset turnover ratio is. Total Revenue / Average
Assets = Asset Turnover Ratio.

Jo Nelgadde (2009),
 He said that learn how to perform inventory analysis and inventory turnover analysis to
better understand a business as well as to identify effective inventory management. He
analyzing a company’s financial performance definitely includes performing inventory
analysis. He know that there are three types of business inventory: Raw Materials
(RM),Work-In-Progress (WIP),Finished Goods (FG).He give idea two types formula of
ratio such as Inventory Turnover = Cost of Goods Sold / Average Inventory, Average
age of Inventory = 360 days / Inventory Turnover.

Maria Zain (2008)

 In this articles he discuss about the return on assets is an important percentage that shows
the company’s ability to use its assets to generate income. He said that a high percentage
indicates that company’s is doing a good utilizing the company’s assets to generate
income. He notices that the following formula is one method of calculating the return on
assets percentage. Return on Assets = Net Profit/Total Assets. The net profit figure that
should be used is the amount of income after all expenses, including taxes. He enounce
that the low percentage could mean that the company may have difficulties meeting its
debt obligations. He also short explains about the profit margin ratio – Operating
Performance .He pronounces that the profit margin ratio is expressed as a percentage that
shows the relationship between sales and profits. It is sometimes called the operating
performance ratio because it’s a good indication of operating efficiencies. The following
is the formula for calculating the profit margin. Profit Margin = Net Profit/Net Sales.

40
CHAPTER – 3

RESEARCH
METHODOLOGY

41
  Research :-

 A Voyage of discovery; A Journey; An attitude; an experience method of critical

thinking; a careful critical enquiry in see facts for principles.
 An art of scientific investigation, Scientific and systematic search for pertinent
information on a topic. Process of arriving at dependable solutions to problems
through planned and systematic collection, analysis and interpretation of collection
data.
 A systematized effort to gain new knowledge; A movement to known to the unknown,
search for new knowledge, facts through objectives, systematic and scientific method
of finding solution to a problem.
 Implicit questions + explicit answer + data to answer the questions, not synonymous
with commonsense, but systematic, objective (purposeful), reproducible, relevant
activity control over see factors.
 An activity caused by instinct of inquisitiveness to gain free insight / find answer to
questions / acquires knowledge.

 Research Methodology :-
For carrying out the project all of the
information is collected from the annual report of the company. My own experience &
knowledge which I gathered during my training duration

Questioning:-
Actually no particulars questionnaire was prepared. Question related to problems and data
tallied with CA, FM & accountants of the company.

Analysis:-
Analysis of various types of data, statements are also made during the study by using
standard formulas.

42
  RESEARCH DESIGN

In dealing with any problem it is often found that data at hand are inadequate, and hence, it
becomes necessary to collect data that are appropriate. There are several ways of collecting the
appropriate data which differ considerably in context of money cost, time and other resources.
There are two types of data-
 PRIMARY DATA
 SECONDARY DATA

 Secondary Data Has Been Used In The Project

Secondary data means data that are already available i.e., they refer to the data which have
already been collected and analyzed by someone else. Sources of data are - manuals, annual
reports of INFOWIZ Pvt. Ltd. and through internet.

 FINANCIAL DEVICES USED

The ratio analysis is done to determine the
financial position and results of operations as well; a number of methods or devices are used to
study the relationship between different statements which clearly analyze the financial position
of the enterprise.

The following devices are generally used:-

 INCOME STATEMENTS:-
Income statement is prepared to determine the original position of the firm. It is a statement of

43
revenues earned and the expenses incurred for earning that revenue. If there is an excess of
revenues over expenditure it will show a profit and vice versa. The income statement is prepared
for a particular period, generally a year. The income statement may be prepared in the form of
manufacturing account to find out the cost of production, in the form of trading account to
determine gross profit or gross loss, in the form of profit and loss account to determine net profit
or net loss.

 BALANCE SHEET STATEMENTS:-

The American institute of certified public accountants defines balance sheet as, “a tabular
statement of summary of balances carried forward after an actual and constructive closing of
books of account and kept according to principles of accounting.”
The balance sheet is one of the important statements depicting the financial strength of the
concern. It shows all the assets owned by the firm and all the liabilities and claims it owes to
owners and outsiders. The companies act, 1956 has prescribed a particular form for showing
assets and liabilities in a balance sheet for companies registered under this act.

 STATEMENT OF PROFIT & LOSS:-

The profit and loss (P&L) statement is a financial statement that summarizes the revenues, costs
and expenses incurred during a specified period, usually a fiscal quarter or year. The P&L
statement is synonymous with the income statement. These records provide information about a
company's ability or inability to generate profit by increasing revenue, reducing costs or both.
Some refer to the P&L statement as a statement of profit and loss, income statement, statement
of operations, statement of financial results or income, earnings statement or expense statement.

 CASH FLOW STATEMENT:-

In financial accounting, a cash flow statement, also known as statement of cash flows, is

44
a financial statement that shows how changes in balance sheet accounts and income affect cash
and cash equivalents, and breaks the analysis down to operating, investing, and financing
activities. Essentially, the cash flow statement is concerned with the flow of cash in and out of
the business. As an analytical tool, the statement of cash flows is useful in determining the short-
term viability of a company, particularly its ability to pay bills. International Accounting
Standard 7 (IAS 7) is the International Accounting Standard that deals with cash flow statements.

 BENEFITS OF RESEARCH METHODOLOGY

 Advancement of wealth of human knowledge.

 A tool of the trade to carry out research provides tools at things in life objectively.
 Develops a critical and scientific attitude, Disciplined, A bent of mind to observe
objectively, Skills of research will pay off in long particularly in the age of information.
 Enriches practitioner and his practices, provides change study a subject in depth, enable
us to make intelligent, understand the material which no other kind of work.
 A consumers of research output helps to inculcate and evaluate and use of results for
earlier research with reason, confidence and take rational decisions.
 Doing research is the best way to learn to read and think.

45
CHAPTER – 4

ANALYSIS AND
DISCUSSIO

46
  DATA ANALYSIS AND INTERPRETATION

Liquidity Ratio
1) Current Ratio :--
The current ratio is a liquidity ratio that measures a company's
ability to pay short-term obligations or those due within one year. It tells investors and analysts
how a company can maximize the current assets on its balance sheet to satisfy its current debt
and other payables.
Current Ratio = Current liabilities / Current assets
(in lacs)
Year Current assets Current liab. Current ratio
2015-16 208767.29 17462.36 11.9
2017-18 114539.46 25887.05 4.42

2) Quick ratio :--

Quick ratio may be define as the relationship between liquid assets
and current liab. Inventres and prepaid exp. Are not included in quick assets because they can not
be converted in to cash immediately.
Quick ratio = quick assets / quick liabilities.
(in lacs)
Year Quick assets Quick liab. Quick ratio
2015-16 54497.28 25887.08 1:2.1
2017-18 154397.35 17462.36 1:8

47
 Solvency Ratio
1) Debt equity ratio :-
Debt equity ratio also known as external -internal ratio. This ratio
indicate relationship between the external equity and internal equity .

Debt equity ratio= out sider fund/share holders funds

(in lacs)
Year Outsider fund Shareholders funds Ratio
2015-16 177108.18 132450.56 1:1.3
2017-18 145023.46 168911.27 1:1.16

Interpretation:-
A high debt equity ratio which indicate that the claim of outsides are greater
then the owners. A ratio of 1:1 may be usually concedired to be satisfactory. The debt equity
ratio of the firm is comparatively satisfactory.

2) Interest coverage ratio :--

Interest coverage ratio indicate the number of times is
covered by the profit available to pay the interest charge generally higher the ratio more safe are
the long term crs. Because even if the earning of the firm fall the firm shall be able to meet its
commitment to fix interest charge.

Interest coverage ratio=EBIT /fixed int. charge

(in lacs)
Year EBIT Fixed int. charge Ratio
2015-16 21833.66 127.48 1:17
2017-18 32205.28 82.35 1:39

48
3) Capital gearing ratio:-
The term capital gearing is used to describe the relationship
between equity share capital including reserve and surplus to preference share capital and other
fixed interest. If the preference share capital and other fixed interest bearing loans exceed the
equity share capital including reserve the firm said to be highly geared. The firm is said to be in
low gear if preference share capital and other fixed interest bearing loans are less than equity
capital and reserve.

Capital gearing ratio= equity share cap. + reserve & surplus / Preference capital +fixed int.
(in lacs)
Year ESP+R&P PR. C +F.INT RATIO
2015-16 132450.56 13472.36 9.8%
2017-18 168911.27 10202.94 16.5%

Activity Ratio

1) Inventory turnover ratio:-

Inventory turnover ratio include whether inventer has been
efficiently under or no. the purpose is to see whether only the required minimum funds here been
locked up in inventory. Inventory average ratio indicate the no. of times the stock has been
turnover during the period and evaluate the efficiency and include firms is able to manage its
inventory.

Inventory turnover ratio:- net sales/ average stock.

Year Net sales (lacs) Average stock Ratio
2015-16 89496.32 14009.88 6.38 times
2017-18 119570.57 14890.63 8 times

Interpretation:-
Inventory turnover ratio measures the velocity of conversion of stock into

49
sales. Usually a high inventory turnover / stock velocity indicates efficient management of
inventory. In the year 2009-10 the ratio is greater then the previous. So its shares great
satisfactory to the company. Its shows the stock does not sale quickly and remain in store for the
long time.

2) Debtors turnover ratio:-

Debtors Turnover ratio indicates the velocity of debt collection
of firm. In simple words , it indicates the number of times average drs.

Drs. Turnover ratio:- net credit annual sales/ average drs.

Year Total sales(lacs) Debtors(lacs) Ratio

2015-16 89496.32 11950.06 7.48
2017-18 119570.57 15165.52 0.78

Interpretation:-
Generally the higher the value of drs. Turnover the more efficient is the
management of drs./ sales or more liquid are the drs. Similarly low drs. Turnover implies
inefficient management of drs. And less liquid debtors.

3) Fixed assets turnover ratio:-

Fixed assets turnover ratio:-- sales / fixed assets

Year Sales(in lacs) Fixed assets Ratio

2015-16 89496.32 72284.30 1.23
2017-18 119570.57 176176.66 .67

Interpretation:-
Fixed assets turnover ratio is the relationship between sales or cost of goods

50
sold and fixed capital. In the year 2008-09 the ratio i. 1.23 shows the share market efficiency of
assets in the year 2009-10 the ratio derived up to .67 show inefficiency of the fixed assets.

4) Working capital turnover ratio:--

Working capital turnover ratio shows the velocity
of the utilization of net working capital.
working.capital ratio. :-- sales /fixed assets

Year Sales (in lacs) Fixed assets Ratio

2015-16 89496.32 191304.93 .46
2017-18 119570.57 88652.41 1.34

Interpretation:-
Working capital ratio show the excess of c.a. in year on the working capital
of the company is not good and improving in the year 2009-10.

5) Average collection period:-

The average collection period represent the average no. of
days for which a firm has to wait before its receivable are converted into cash.

Average Collection. Period :- average debtors/ sales per day

Year A.S.(in lacs) Sales per day Ratio

2015-16 11950.63 248.60 90days
2017-18 15165.52 332.14 45 days

Interpretation:-
Generally the shorter the period of average collection period the better is the
quality of debtors. On the year 2008-09 if it is very high in 90 days. it show the inefficient
collection performance. But it improve in the year 2009-10 up to 45 days.

51
 Profitability Ratio

1) Gross profit ratio:-

G.P. ratio measure the relationship of gross profit to net sales and is
usually represented as a percentage.
Gross Profit. ratio:-- gross profit /net sales(100)

Year Gross.P. lacs) Net sales Ratio

2015-16 26807.01 89496.32 18%
2017-18 38539.20 11957.57 32%

Interpretation:--
The Gross Profit ratio shows the company is increasing year by year. It
shows that change may be the result of decrease in cost of good sold without increasing in sales
revenues as change in the method of valuation of closing stock.

2)Net Profit Ratio :-

Net profit ratio establishes a relationship between net profit (after taxes)
and sales and indicates the efficiency or the management in manufacturing selling administrative
and other activities of the firm. This ratio is the overall measure of firm’s profitability and is
calculated as:-
Net Profit RATIO:- net profit after tax /net sales (100)

Year N.P. after tax (lacs) Net sales Ratio

2015-16 16355.03 89496.32 18%
2017-18 23584.44 119570.57 19%

52
Interpretation:--
The high net profit margin would assure adequate return to the owners as
well as enable to with stand adverse. Condition when selling price is decline. The ratio is margin
improve in the year 2009 by 1%.

3) Earning per shares:-

E.P.S. is a small variation of return on equity capital and is
collected by dividing the net profit after tax & preference dividend by the total no. of equity
share
E.P.S. = net profit after tax – pref. dividend/ no. of equity share.
E.P.S.= 2010(18.86) 2009(14.71)

4) Return on equity :--

Return on Equity. = profit after tax/share holders funds(100)

Year P.A. Tax S.H. fund Ratio

2015-16 16355.03 132450.56 12.3%
2017-18 23584.44 168911.27 14%

Interpretation:--
This ratio is more meaningful to the equity shareholders who are interested
to know profit earned by the company and that profit which can be made available to pay
dividend to them. The ratio to increasing rate at 12.3 to 14% in the year 2009-10 it indicate that
firm good return and satisfactory to share holders.

53
 CHAPTER - 5

CONCLUSION

CONCLUSION

1. . The company has started its operation in 2016 and arises with full swing from
2016 onwards.

2. In activity ratios, the creditors ratio is more satisfactory as the company has been taken
shorter period to make payments and there is an efficient management of available funds.

3. It has started to be its competitors by floating a various schemes, Business promotion

programs, high margins to its distributors, and customer satisfaction.

54
4. The long term position of the company is very good whereas liquidity position is in
critical situation but it can be clearly seen that the liquidity position will be stable soon in
subsequent years.

FINDINGS

1. The liquidity position of the firm is not sound as compared to last year.

2. The solvency position of the firm is satisfactory.

3. The company has raised less debt as compared to last year.

4. The stocks are used efficiently.

5. The working capital usage has also improved this year.

6. The debtor management system is inefficient.

7. The fixed Assets are also not utilized.

8. The gross profit is increasing due to decrease in cost of goods sold.

9. The net profits of the company have increased by 1%.

55
 CHAPTER - 6

SUGGESTIONS

SUGGESTIONS

 Company should increase its own funds by creating reserves.

 The company should have a proper dividend policy.

 It is recommended that the Company should improve its absolute quick asset ratio.

 The company should raise its current assets.

 The average collection period of company is increased from 1 day in 2016-17 to 2 day in

56
 2017-18. The company needs to look into the same and try to reduce the collection period
to avoid the interest on funds.

 The profit of the company is not in a good position for that company has take alternative
actions.

 The company should look for sources of working capital.

 The firm have low current ratio so it should increase its current ratio where it can meet
its short term obligation smoothly.

 Liquidity ratio of the firm is not better .So I suggested that the firm maintain proper
liquid funds.

 Cash inflow management system should be fast.

BIBLIOGRAPHY

BOOKS REFERRED-

1. KHAN M.Y. & JAIN P.K, FINANACIAL MANAGEMENT, KALYANI

PUBLISHERS, NEW DELHI.

2. GUPTA SK., MANAGEMENT ACCOUNTING, KALYANI PUBLISHERS, NEW

DELHI.

3. SHARMA R.K & GUPTA S.K., MANAGEMENT ACCOUNTING & BUSINESS

FINANCE, KALYANI PUBLISHERS, NEW DELHI.

57
INFORMATION FROM THE WEBSITES-

1. www.google.com

STATEMENTS OF BOANG TECHNOLOGY PRIVATE LIMITED

1. BALANCE SHEET
2. STATEMENT OF PROFIT & LOSS
3. CASH FLOW STATEMENT

58