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PREFACE

Practice orientation of management student is must generating competence to


deal with issues at grass root level it is for this reason that Research project
study is prescribed as apart of syllabus for MBA Degree in Bhopal. The main
objective of this project is the
“Study on Financial Analysis of AEGON RELIGARE LIFE
INSURANCE”.

This project was also carried out to understand the future Outlook of the
AEGON RELIGARE LIFE INSURANCE. Another motive includes finding
about the key financial condition of AEGON RELIGARE LIFE INSURANCE.
Their performance, growth potential and also the opportunities that exist for the
Indian industries. The scope of this project is limited to study of AEGON
RELIGARE LIFE INSURANCE. .

Financial management involves lots of tools, but only selected tools were
studied .The study frame considered is very limited. The data used is secondary
data (books, Internet annual reports).

Research refers to the systemic method consisting of enunciating the problem, a


collecting the facts, analyzing the facts and reaching the certain conclusion
either in form of solution towards the concerned problem or for some theoretical
formulation. The study is based on the facts collected by observation and
internet.
The Performance of AEGON RELIGARE LIFE INSURANCE. are increasing
day by day. Profits of the company are also increasing, E.P.S of all the
companies is also good.
I have tried to put my maximum effort to get the accurate statistical data.
However I would appreciate if any mistakes are brought to my by the reader.

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TABLE OF CONTENT

S.NO CONTENTS PAGE NO.


01 INTRODUCTION 03
02 COMPANY PROFILE 13
03 OBJECTIVE OF THE STUDY 26
04 RESEARCH METHODOLOGY 28
05 DATAANALYSIS 32
&INTERPRETATION
06 FINDINGS 44
07 SUGGESTION 46
08 CONCLUSION 48
09 BIBLIOGRAPHY 50

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INTRODUCTION

Financial analysis

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Financial analysis (also referred to as financial statement analysis or
accounting analysis) refers to an assessment of the viability, stability and
profitability of a business, sub-business or project.

It is performed by professionals who prepare reports using ratios that make use
of information taken from financial statements and other reports. These reports
are usually presented to top management as one of their bases in making
business decisions. Based on these reports, management may:

• Continue or discontinue its main operation or part of its business;


• Make or purchase certain materials in the manufacture of its product;
• Acquire or rent/lease certain machineries and equipment in the
production of its goods;
• Issue stocks or negotiate for a bank loan to increase its working capital;
• Make decisions regarding investing or lending capital;
• Other decisions that allow management to make an informed selection on
various alternatives in the conduct of its business

Goals

Financial analysts often assess the firm's:

1. Profitability - its ability to earn income and sustain growth in both short-
term and long-term. A company's degree of profitability is usually based on the
income statement, which reports on the company's results of operations;

2. Solvency - its ability to pay its obligation to creditors and other third parties
in the long-term;
3. Liquidity - its ability to maintain positive cash flow, while satisfying
immediate obligations;

Both 2 and 3 are based on the company's balance sheet, which indicates the
financial condition of a business as of a given point in time.

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4. Stability- the firm's ability to remain in business in the long run, without
having to sustain significant losses in the conduct of its business. Assessing a
company's stability requires the use of both the income statement and the
balance sheet, as well as other financial and non-financial indicators.

Methods

Financial analysts often compare financial ratios (of solvency, profitability,


growth, etc.):

• Past Performance - Across historical time periods for the same firm (the
last 5 years for example),
• Future Performance - Using historical figures and certain mathematical
and statistical techniques, including present and future values, This
extrapolation method is the main source of errors in financial analysis as
past statistics can be poor predictors of future prospects.
• Comparative Performance - Comparison between similar firms.

These ratios are calculated by dividing a (group of) account balance(s), taken
from the balance sheet and / or the income statement, by another, for example :

Net income / equity = return on equity (ROE)


Net income / total assets = return on assets (ROA)
Stock price / earnings per share = P/E ratio

Comparing financial ratios is merely one way of conducting financial analysis.


Financial ratios face several theoretical challenges:

• They say little about the firm's prospects in an absolute sense. Their
insights about relative performance require a reference point from other
time periods or similar firms.
• One ratio holds little meaning. As indicators, ratios can be logically
interpreted in at least two ways. One can partially overcome this problem

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by combining several related ratios to paint a more comprehensive
picture of the firm's performance.
• Seasonal factors may prevent year-end values from being representative.
A ratio's values may be distorted as account balances change from the
beginning to the end of an accounting period. Use average values for such
accounts whenever possible.
• Financial ratios are no more objective than the accounting methods
employed. Changes in accounting policies or choices can yield drastically
different ratio values.
• They fail to account for exogenous factors like investor behavior that are
not based upon economic fundamentals of the firm or the general
economy (fundamental analysis) [1].

Financial analysts can also use percentage analysis which involves reducing a
series of figures as a percentage of some base amount[2]. For example, a group
of items can be expressed as a percentage of net income. When proportionate
changes in the same figure over a given time period expressed as a percentage is
known as horizontal analysis[3]. Vertical or common-size analysis, reduces all
items on a statement to a “common size” as a percentage of some base value
which assists in comparability with other companies of different sizes [4].

Another method is comparative analysis. This provides a better way to


determine trends. Comparative analysis presents the same information for two
or more time periods and is presented side-by-side to allow for easy analysi

Financial Analysis

Financial Analysis refers to the assessment of a business to deal with the


planning, budgeting, monitoring, forecasting, and improving of all financial
details within an organization.

Understand, Identify, Analyze and Adjust

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Understanding your organization’s financial health is a fundamental aspect of
responding to today’s increasingly stringent financial reporting requirements.
To avoid risks, organizations must quickly

• identify ascertain financial ratios and trends acrossin liabilities and assets
• analyze and adjust planned and forecasted amounts
• act to provide regulatory statements as needed

Financial Analysis applications built on the MicroStrategy platform make these


activities easier and more efficient.

Business intelligence applications within the Financial Analysis application area


include:

• Budgeting and Budget Analysis


• Financial Performance Management
• Revenue Analysis
• Cost Analysis
• Expense Analysis
• Cash Flow Analysis
• Balance Sheet Analysis
• Accounts Receivable Analysis
• Accounts Payable Analysis
• Invoicing and Billing Analysis
• Profit and Loss Statements

Financial Analysis with MicroStrategy

The unique strengths of the MicroStrategy platform are well suited for
performing even the most demanding of Financial Analysis applications. Using
MicroStrategy, Financial users have their detailed reporting, their scorecard of
metrics, and their interactive dashboards at their fingertips via a single interface.

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From Profit Margin or Current Ratio to Assent Turnover or Debt to Equity,
users have unlimited access to financial ratios and analytics when performing
financial analysis with any MicroStrategy reporting tool.

The MicroStrategy platform offers analytics that can be used to answer key
financial questions:

• What is the aging distribution of Accounts Payable and Accounts


Receivable?
• Are there any customers with payment problems; if so, who needs to be
notified?
• What are the values of assets and liabilities on a given date?
• What is the value of assets, liabilities, and owners’ equity on a given
date?
• What is the breakdown of expenses by business units?
• Which business units are hitting their targets?
• What are the revenue trends by business units?
• What are the trends in revenue, by revenue types?
• What is the forecasted revenue? Has this forecast changed? Why have
revenue forecasts changed?
• What is the actual amount of profit margin by business unit or region?
What are the associated trends?
• What is the breakdown of costs by vendors, and what are the associated
trends?
• What is the change in cash position from period to period?
• Which bills are due this week and for what amounts?

Benefits of Financial Analysis

Financial Analysis Tools

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Financial analysis tools can be very helpful to executives of both small and
large firms. Specifically, the tools can allow the executive to see where the
money has been going on a historical basis and where it may go (or need to go)
in the future. This brief paper will explore three examples of how financial
analysis tools can be used to assess and improve business performance.

Assessing outflow
Financial analysis tools, such as Peach-Tree made by the Sage Corporation, can
help a firm gain a better understanding of monetary outflow. In essence, outflow
provides at its core a balance of payments (BOP), which provides data
(sometimes illustrated) related to various cost centers (Sloman, 2004). This term
is often assigned to foreign transactions or for companies doing business
overseas however, it can also apply to domestic organizations. Financial
analysis tools that assess outflow also:

• Quantify where money is going and to whom


• Identify trends for a particular business (i.e. seasonal trends)
• Have the potential to identify waste
• Identifying new opportunities
Financial analysis tools, such as Peachtree or for larger firms, Hyperion, can be
used to help executives identify new business opportunities.

For example, our organization, 2nd Story Counseling - a Chicago Counseling &
Psychotherapy Group, uses financial software to assess trends in consulting
needs. If we notice an uptick in a particular type of product as indicated by the
financial software, we then have the ability to identify new opportunities in the
marketplace. While an accountant may look at a financial analysis report in one
way (primarily monetarily), a manager or executive should be looking at the
report as a way to identify new opportunities. We did just such a thing at our
firm and discovered the need for more couples counseling services in our

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particular market-space.

Identify waste and increase productivity


A third way that a business can benefit from the use of financial analysis tools
can be to identify waste and possibly increase productivity. For example, a firm
may notice that they are spending a large amount of money on paper products in
the 4th quarter of a given year. This in turn has increased the firms spending,
taking away from general profits. A possible reason for the increased cost may
relate to the firms hiring of temporary, who did not go through general training
on the company's "green policy" of paper conservation. A manager who
becomes aware of this can then provide this training to the temporary workers,
thereby reducing costs to the organization and increasing productivity via
electronic data sharing (Rachman, 2010).

Financial analysis tools should be viewed as helpers for managers. When used
properly, the can help to identify waste, increase products and increase
productivity. Financial analysis tools need not be large expensive software
packages - a tool can be a simple Excel spreadsheet. The idea is for managers to
have a device to help inform decisions and create a healthy financial business
environment.

Importance of Financial Analysis

All financial statements are essentially historically historical documents. They


tell what has happened during a particular period of time. However most users
of financial statements are concerned about what will happen in the future.
Stockholders are concerned with future earnings and dividends. Creditors are
concerned with the company's future ability to repay its debts. Managers are
concerned with the company's ability to finance future expansion. Despite the

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fact that financial statements are historical documents, they can still provide
valuable information bearing on all of these concerns.

Financial statement analysis involves careful selection of data from financial


statements for the primary purpose of forecasting the financial health of the
company. This is accomplished by examining trends in key financial data,
comparing financial data across companies, and analyzing key financial ratios.

Managers are also widely concerned with the financial ratios. First the ratios
provide indicators of how well the company and its business units are
performing. Some of these ratios would ordinarily be used in a balanced
scorecard approach. The specific ratios selected depend on the company's
strategy. For example a company that wants to emphasize responsiveness to
customers may closely monitor the inventory turnover ratio. Since managers
must report to shareholders and may wish to raise funds from external sources,
managers must pay attention to the financial ratios used by external inventories
to evaluate the company's investment potential and creditworthiness.

Although financial statement analysis is a highly useful tool, it has two


limitations. These two limitations involve the comparability of financial data
between companies and the need to look beyond ratios. Comparison of one
company with another can provide valuable clues about the financial health of
an organization. Unfortunately, differences in accounting methods between
companies sometime makes it difficult to compare the companies' financial
data. For example if one company values its inventories by the LIFO method
and another firm by average cost method, then direct comparisons of financial
data such as inventory valuations are and cost of goods sold between the two
firms may be misleading. Some times enough data are presented in foot notes to
the financial statements to restate data to a comparable basis. Otherwise, the
analyst should keep in mind the lack of comparability of the data before
drawing any definite conclusion. Nevertheless, even with this limitation in

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mind, comparisons of key ratios with other companies and with industry
averages often suggest avenues for further investigation.

An inexperienced analyst may assume that ratios are sufficient in themselves as


a basis for judgment about the future. Nothing could be further from the truth.
Conclusions based on ratio analysis must be regarded as tentative. Ratios should
not be viewed as an end, but rather they should be viewed as a starting point, as
indicators of what to pursue in greater depth. They raise may questions, but they
rarely answer any question by themselves. In addition to ratios, other sources of
data should be analyzed in order to make judgments about the future of an
organization. They analyst should look, for example, at industry trends,
technological changes, changes in consumer tastes, changes in broad economic
factors, and changes within the firm itself. A recent change in a key
management position, for example, might provide a basis for optimism about
the future, even though the past performance of the firm may have been
mediocre.

Few figures appearing on financial statements have much significance standing


by themselves. It is the relationship of one figure to another and the amount and
direction of change over time that are important in financial statement analysis.
How does the analyst key in on significant relationship? How does the analyst
dig out the important trends and changes in a company? Three analytical
techniques are widely used; dollar and percentage changes on statements,
common-size statements, and financial ratios formulas.

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COMPANY
PROFILE

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AEGON Religare Life Insurance Company

AEGON, an international life insurance, pension and investment company,


Religare, a global financial services group and Bennett, Coleman & company,
India’s largest media house, have come together to launch AEGON Religare
Life Insurance Company Limited (ARLI). This venture is dedicated to build a
profitable customer-centric business with scale, providing a work environment
that fosters excellence and innovation. This joint venture will balance a local
approach with the power of an expanding global operation.ARLI launched its
pan-India operations in July, 2008 following a multi-channel distribution
strategy with a vision to help people plan their life better. The fulfillment of this
vision is based upon having a complete product suite, providing customised
advice and enhancing the overall customer experience through superior service.

ARLI has launched a suite of products that are focused on providing the
customer with the means to meeting their long-term financial goals. At the same
time product development has been founded on the tenet of providing the
customer with great value. ARLI products such as AEGON Religare iTerm Plan
and AEGON Religare Invest Maximiser Plan have been ranked among the best
in terms of value and have attracted many external accolades.

About AEGON

As an international life insurance, pension and investment company, AEGON


has businesses in over twenty markets in the Americas, Europe and Asia. With
headquarters in The Hague, the Netherlands, AEGON companies employ
approximately 28,000 people and serve some 40 million customers across the
globe. The company’s common shares are listed on three stock exchanges:
Amsterdam, New York and London. AEGON has more than 160 years of
experience with its roots going back to 1844. AEGON holds 26% equity in
ARLI.About Religare Enterprises Limited

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Religare Enterprises Limited (REL) is a global financial services group with a
presence across Asia, Africa, Middle East, Europe and the Americas. In India,
Religare’s largest market, the group offers a wide array of products and services
ranging from insurance, asset management, broking and lending solutions to
investment banking and wealth management. The group has also pioneered the
concept of investments in alternative asset classes such as arts and films. With
over 10,000 employees across multiple geographies, Religare serves over a
million clients, including corporates and institutions, high net worth families
and individuals, and retail investors. REL hold 44% equity in ARLI.

About Bennett, Coleman & Company Limited

Bennett, Coleman & Company Limited (BCCL), part of the mammoth Times
Group, is India’s largest media house. It reaches out to 2468 cities and towns all
over India. The group owns and manages powerful media brands like The
Times of India, The Economic Times, Maharashtra Times, Navbharat Times,
Femina, Filmfare, Grazia, Top Gear, Radio Mirchi, Zoom, Times Now, Times
Music, Times OOH, Private Treaties and indiatimes.com. All of its brands are
multinational in outlook, traditional at heart and national in spirit. From the very
first edition on November 3, 1838 the mammoth BCCL Group has come a long
way. By way of the innovative venture of Times Private Treaties
(http://www.timesprivatetreaties.com), the BCCL Group holds 30% equity in
ARLI

Vision & Values

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Products
Life Insurance

Life Insurance is a commonly used term, yet it is seldom understood and not
many are confident about choosing the best life insurance policy for themselves
and their families. There are many life insurance companies and innumerable
plans available, but before you opt for the perfect life insurance policy, you
need to evaluate the pros and cons. Evaluate life insurance as an investment
option and think about whether you really need it. And if you do, should you
choose a cheap life insurance policy or opt for the best life cover available.
Which insurance company should you select? And if you already have a policy,
should you buy another?

The questions that pop up are mind boggling; so to help you plan your life
better, we have provided answers to a few basic ones. This will equip you
choose the best life insurance company and plan for you and your family.

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What is life insurance?

Simply put, life insurance is a medium of providing a financial backup for your
family even after you pass on. Life insurance is an important part of a sound
financial planning. Different types of life insurance plans will not only
financially protect you and your loved ones incase of unfortunate event but, also
help you save in a planned manner for important goals

How Does Life Insurance Work?

Life insurance companies charge you a regular premium for the cover it
provides for chosen time period. Whereas, incase of ULIPs (Unit Linked
Insurance Plans) part of the premium post deductions of charges is invested to
earn returns.

Do I Need Life Insurance?

Whether or not you need life insurance and how much, depends on whether or
not you have dependent family members. But practical wisdom suggests that
even if nobody relies on your income for daily living, you should still buy at
least one life insurance plan which serves as a means of personal investment
and tax savings instrument.On the other hand if your income is important to
your family members and your salary contributes to paying bills and loans, then
you must choose the best life insurance option that you can afford. Of all plans
available, Term Plan is the pure protection plan and will be cheap life insurance
as well. Be sure to compare life insurance companies and the plans they offer
well before settling for one.

My Employer Offers Life Insurance, Do I Still Need a New Life Insurance


Policy?

If your employer provides you with a life insurance policy, that's a bonus. These
days large organizations do offer life insurance as one of the perks, but

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remember that often these cheap life insurance plans may not cover enough. So
always ensure that you read the fine print and are aware of how much your
employer's life insurance company promises you. And if this insurance is not
adequate, it is advisable to invest in a new life insurance plan as well.

Also, the insurance amount changes from organization to organization and


different life insurance companies offer different plans and payment options
which need to be kept in mind. Having one new life insurance plan tucked away
for safety will help you save in the present and feel less worried about the
future.

How Do I Determine How Much Life Insurance I Need?

There are some important things to consider when determining the best life
insurance policy and ideal policy amount for you:

• Evaluate the financial need of your family. Is it a growing family with


diverse needs and a single bread winner or a mature family with limited
needs and perhaps more than one source of income? The rule of thumb is
the younger a family, the more the need for life insurance.
• Secondly, you must assess how much money you can invest in life
insurance premiums on a regular basis. You may be tempted to get the
best life insurance plans money can buy but it may be too expensive for
you to continue paying premiums after a certain time. On the other hand
if you pick a cheap life insurance policy it might prove to be inadequate
to cover basic necessities in your absence. Hence, it becomes very
important to evaluate your present and future needs before finalising the
plan.
• Give a thought to how long you will need the life insurance money to
work for you. Whether you select a cheap life insurance cover that will
sustain monthly expenses for few years or the best life insurance plan that

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will exist lifelong, will depend on the duration of your financial
requirement.

As you grow in life, you should revisit the existing plan and evaluate if you
need to invest in new life insurance plans. You can diversify your

• insurance savings with a new life insurance plan and actually schedule
when and how much money your family receives.

So choose with care. You can learn more about the different life insurance plans
to further narrow down your choices and select the ideal life insurance plan for
yourself.

Different Types of Life Insurance Plans and How to Choose the Ideal Plan
for you

Before you get into the different kinds of life insurance plans available, our
guide to understanding life insurance will help you understand the basics. Life
insurance plans not only act as a protection cover for you and your family in
case of ill health and untimely demise but, also doubles as a savings and
investment plan to achieve set goals. So, remember that the decision of selecting
the ideal Plans is very critical and instead of purchasing any life insurance plan
that you are offered in haste, take time to make your decision

Life insurance plans have various options to suit different people at different life
stages. Before you decide on which life insurance Plans you need to buy

, you must carefully analyse why you need the Plans, what will be the sum
assured and for how long.To help you answer these questions we have prepared
a step by step guide that takes you through the process of understanding and
selecting the best life insurance Plans for your needs.

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STEP 1: Evaluate why you are investing in life insurance plans.

• If you have dependent family members, then life insurance plans like
Protection Plans which provide only life cover will help your family tide
over financial losses in tough times.
• If you are investing to save for your child’s future or planning for your
retirement, then special plans like Child Plans and Retirement Plans
would be better life insurance schemes.
• If you don’t have dependent family members, then your life insurance
plans can become your channel of investment. Earlier you start saving
better it is because your investments get that much more time to grow in
the long run.
• For people who don’t have any other major investments, life insurance
schemes are also ideal ways to save tax.

STEP 2: Assess the total financial needs of your family.

In the unfortunate event of your demise, knowing the amount of

• monetary compensation that will be sufficient to honour your family’s


financial commitments is important and must be considered while buying
any life insurance schemes available.
• If the plan is to achieve certain future goals then it is important to
ascertain the future value to the goal and save for the same.

STEP 3: Assess how much you can invest regularly.

• After you know how much you need, assess how much you can save and
invest in life insurance plansplans on an ongoing basis.
• If you expect your income to grow in the near future, then you can opt for
an increasing premiumPlans where the premium increases gradually and
also helps increase the sum assured.

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STEP 4: Pick a Plans to suit your needs.

• After having assessed your life insurance requirements and the amount
you can save, it is time for you to evaluate different products. It is also
important to spend some time researching various plans available.

There are a lot of insurance companies offering numerous life insurance plans.
The names of plans may vary but what you need to look out for is the advantage
each plan offers you over the other.

Our Plans:

• Child Plans

Protection Plans

ULIPs

Unit Linked Insurance Policies or ULIPs as they are commonly called, are more
innovative forms of life insurance that also offer returns on your investments.
Every ULIP provides cover against death. In addition, these unit linked
insurance plans also serve as great means of long-term savings, structured to
give you miximum benefit. In simple words, investment in ulips is great
combination of protection and investment.Let us help you understand ULIPs
better.

Working of Unit Linked Insurance Plans (ULIPs)

When you buy ULIPs, every year from the premium your life insurance
company deducts the charges towards life cover, administration and fund
management. The balance ULIP premium is invested in various funds offered
by the insurance company.

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Every unit linked insurance plan holder is allotted a set number of units based
on the ULIP investment. On a daily basis, life insurance companies declare a
Net Asset Value, also known as NAV or ULIP NAV. This is your unit's worth
in the market on that given day. You can monitor and modify your ULIP
investments in various fund options and make the most of your hard earned
money.

Flexibility of ULIP investment

Most unit linked policy holders opt for ULIPs because of the flexibility they
offer. There is an option of making lumpsum investment or paying regular
premiums using the systematic investment plans (SIP). And just like any other
life insurance policy, with ULIPs also you can choose from annual, half-yearly,
quarterly or monthly ULIP premium payment options to suit your financial
requirements. Additionally, as a unit linked policy holder, you have the option
of investing your units across various fund options such as equity fund,
balanced fund, debt fund and secure fund. During the tenure of your policy
depending on your risk appetite you can also switch investments from one fund
to another. This gives you the flexibiltiy of customising your investment plan.

Most importantly, ULIP investors have the added ability to invest additional

lumpsum amount anytime during the policy term.Or if you should need more
liquid cash at some point of time, you can even partially withdraw from the
fund value at that time

Tax Benefits of ULIP investments

One of the other common reason for the success of unit linked insurance plans
is that all ULIP investments qualify for tax deductions under Section 80C of the

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Income Tax Act. Irrespective of your plan and fund options you can enjoy these
tax redemption benefits.

However, once you have decided to invest in ULIPs, you will realise that it has
many unique benefits which a good investment plans should have.

Our Plans
Retirement

regular income sources. Once you gauge your expenses after your retirement,
appraise what sources of income you will have then. Also assess how you can
make your current assets work optimally for you and assist in retirement
planning. If you have invested in AEGON Religare Pension Plans, you can
count on at least one reliable source of income. Key to good retirement planning
is to have an early start and steady growth. After evaluating your expenses post
retirement, choose a plan which can help you achieve that amount by investing
reasonable premium over a period of time. For example AEGON Religare
Pension Plans offers the 'Increasing Premium' option which allows you to
increases the premium year on year to address the inflation cost. You can pay
regular premiums which increase by 5% or 8% of the first year's premium,
every year. Thus ensuring that you always maintain the current lifestyle, even
after retirement.

Taking these simple steps will ensure you have a happy retirement by making
your money work as hard as you do. Do read about ULIPs and Child Plans if
you are looking for more life insurance investment options.
One of the other common reason for the success of unit linked insurance plans
is that all ULIP investments qualify for tax deductions under Section

80C of the Income Tax Act. Irrespective of your plan and fund options you can
enjoy these tax redemption benefits.However, once you have decided to invest

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in ULIPs, you will realise that it has many unique benefits which a good
investment plans should have.
Health Plan

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OBJECTIVE OF STUDY

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OBJECTIVE OF THE STUDY
PRIMARRY OBJECTIVE :

1. To study about the Financial Analysis in AEGON RELIGARE

LIFE INSURANCE Bhopal


2. To find out the financial condition of AEGON RELIGARE LIFE
INSURANCE.
3. To know the various methods to be followed by AEGON
RELIGARE LIFE INSURANCE for inventories and accounts
receivables

SECONDARY OBJECTIVE:

1. To know how the financial Analysis is important.


2. To give suggestions, if any, for better financial management in
AEGON RELIGARE LIFE INSURANCE.

OBJECTIVE OF THE STUDY


PRIMARRY OBJECTIVE :

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4. To study about the Financial Analysis in AEGON RELIGARE

LIFE INSURANCE Bhopal


5. To find out the financial condition of AEGON RELIGARE LIFE
INSURANCE.
6. To know the various methods to be followed by AEGON
RELIGARE LIFE INSURANCE for inventories and accounts
receivables

SECONDARY OBJECTIVE:

1. To know how the financial aspect is important.


2. To give suggestions, if any, for better financial management in
AEGON RELIGARE LIFE INSURANCE.

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RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
Research comprises of defining & redefining problems, formulating hypothesis
or suggested solutions, collecting, organizing & evaluating data, making
deductions & reaching conclusions. In research design we decide about:

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• Type of data

• From whom to get data

• About sample size

• How to analyze data

• How to make report

Data collection Methodology


Research refers to the systemic method consisting of enunciating the
problem, a hypothesis, collecting the facts, analyzing the facts and reaching the
certain conclusion either in form of solution towards the concerned problem or
for some theoretical formulation.. The study is based on the facts collected by
observation and internet.
Secondary sources of data mainly include annual reports of AEGON
RELIGARE LIFE INSURANCE. Statement of changes in working capital for
the past 3 years is done using the data taken from these financial reports.
Similarly time series analysis of operating cycle and calculations of ratios is
done. Apart from this, the website of AEGON RELIGARE LIFE INSURANCE
is referred to know the products, product facilities, network etc.

Method of Data collection


Sources of secondary data:-
• Books
• Websites
• Business Magazines
• Annual reports of company

TOOLS AND TECHNIQUES

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As no study could be successfully completed without proper tools and
techniques, same with my project. For the better presentation and right
explanation I used tools of statistics and computer very frequently. And I am
very thankful to all those tools for helping me a lot. Basic tools which I used for
project from statistics are-
- Pie charts
- Tables
bar charts and pie charts are really useful tools for every research to show the
result in a well clear, ease and simple way. Because I used bar charts and pie
charts in project for showing data in a systematic way, so it need not necessary
for any observer to read all the theoretical detail, simple on seeing the charts
any body could know that what is being said.
Technological Tools
Ms-Word
Ms-excel
Internet
Above application software of Microsoft helped me a lot in making project
more interactive and productive.
Microsoft-Excel had a great role in my project, it created for me a situation of
“you sit and get”. I provided it simply all the detail of data and in return it given
me all the relevant information..
Microsoft-Access did the performance of my personal assistant who organizes
my all the details of document without disturbing them even a single time in all
the project duration.
And in last Microsoft-Word did help me for the documentation of the project in
a presentable form.

Scope of the study


The study gave me a chance to carry Financial Analysis along with its
various tools used in AEGON RELIGARE LIFE INSURANCE which helps to

30
understand the basics of Financial management, cash flow and provides the
tools that help to decide how AEGON RELIGARE LIFE INSURANCE manage
to cash management. This type of analysis examines key ratios of a business in
order to determine its financial health and gives an idea of the future value of its
stock. .The scope of project extends to the study of financial terms of AEGON
RELIGARE LIFE INSURANCE.

Limitations of the study:

1. Although every effort has been made to study the “Financial


Management” in detail, in an organization of AEGON RELIGARE
LIFE INSURANCE size, it is not possible to make an exhaustive
study in a limited duration..
2. It is not possible to include data of 2008-09, as the audited
financial report has not come yet (at the time of preparation of this
report). However data of 2008-09 is included partially from the un
audited financial reports of AEGON RELIGARE LIFE
INSURANCE.
3. Apart from the above constraint, one serious limitation of the study
is, that it is not possible to reveal some of the financial data owing
to the policies and procedures laid down by AEGON RELIGARE
LIFE INSURANCE. However the available data is analyzed with
great effort to get an insight into Cash Management in AEGON
RELIGARE LIFE INSURANCE.

31
DATA ANALYSIS
&
INTERPRETATION

Equity Share Capital of AEGON RELIGARE LIFE INSURANCE .

32
Year Rs. In Cr.
2009 101.29
2008 76.08
2007 64.40
120

100

80

60
Equity Share Capital
40

20

0
2009 2008 2007

INTERPRETATION

In the year 2009 Equity Share Capital of AEGON RELIGARE LIFE


INSURANCE was Rs. 101.29Crores while in 2008 it was 76.08and in 2007 it
was 64.40crores .

Networth of AEGON RELIGARE LIFE INSURANCE .

33
Year Rs. In Cr.
2009 2,518.64
2008 481.32
2007 288.29

3,000.00

2,500.00

2,000.00

1,500.00
Networth
1,000.00

500.00

0.00
2009 2008 2007

INTERPRETATION

In the year 2009 Networth of AEGON RELIGARE LIFE INSURANCE was


Rs. 2,518.64Crores while in 2008 it was 481.32and in 2007 it was
288.29crores .
34
Investments of AEGON RELIGARE LIFE INSURANCE

Year Rs. In Cr.


2009 2,023.55
2008 545.28
2007 289.81

2,500.00

2,000.00

1,500.00
Investments
1,000.00

500.00

0.00
2009 2008 2007

INTERPRETATION

In the year 2009 Investments of AEGON RELIGARE LIFE INSURANCE was


2,023.55Crores while in 2008 it was 545.28and in 2007 it was
289.81crores .

35
Total Current Assets of AEGON RELIGARE LIFE INSURANCE

Year Rs. In Cr.


2009 1.28
2008 1.13
2007 3.22

3.5
3
2.5
2
Total Current Assets
1.5
1
0.5
0
2009 2008 2007

INTERPRETATION

36
In the year 2009 Total Current Assets was (Rs) 1.28Crores while in 2008 it
was Rs 1.13cr and in 2007 it was Rs 3.22crores .
Net Sales of AEGON RELIGARE LIFE INSURANCE .

Year Rs. In Cr.


2009 12.55
2008 31.85
2007 15.38

35
30
25
20
15 Net Sales

10
5
0
2009 2008 2007

INTERPRETATION

37
In the year 2009 Net Sales was Rs 12.55Crores while in 2008 it was Rs
31.85Cr and in 2007 it was Rs 15.38crores

Year Rs. In Cr.


2009 0.00 Equity Dividend of
2008 17.39 AEGON RELIGARE

2007 6.74 LIFE INSURANCE .

18
16
14
12
10
8 Equity Dividend
6
4
2
0
2009 2008 2007

INTERPRETATION

38
In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it was Rs
17.39cr and in 2007 it was Rs 6.74crores .

Year Rs. In Cr.


2009 16.08
2008 4.51
Total Value Addition of
2007 0.92
AEGON RELIGARE
LIFE INSURANCE .

39
18
16
14
12
10
8 Total Value Addition
6
4
2
0
2009 2008 2007

INTERPRETATION

In the year 2009 Total Value Addition was Rs 16.08Crores while in 2008 it
was Rs 4.51cr and in 2007 it was Rs 0.92crores .
Equity Dividend of AEGON RELIGARE LIFE INSURANCE .

40
Year Rs. In Cr.
2009 0.00
2008 17.39
2007 6.74

18
16
14
12
10
8 Equity Dividend
6
4
2
0
2009 2008 2007

INTERPRETATION

In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it was Rs
17.39cr and in 2007 it was Rs 6.74crores .

Total Expenses of AEGON RELIGARE LIFE INSURANCE .


41
Year Rs. In Cr.
2009 16.08
2008 4.51
2007 0.92

18
16
14
12
10
8 Total Expenses
6
4
2
0
2009 2008 2007

INTERPRETATION

In the year 2009 Total Expenses was Rs 16.08Crores while in 2008 it was Rs
4.51cr and in 2007 it was Rs 0.92crores .

Current Liabilities of AEGON RELIGARE LIFE INSURANCE .

42
Year Rs. In Cr.
2009 3.97
2008 1.70
2007 3.10

4
3.5
3
2.5
2
Current Liabilities
1.5
1
0.5
0
2009 2008 2007

NTERPRETATION

In the year 2009 Current Liabilities was Rs 3.97Crores while in 2008 it was Rs
1.70cr and in 2007 it was Rs 3.10crores .
Miscellaneous Expenses of AEGON RELIGARE LIFE INSURANCE .

43
Year Rs. In Cr.
2009 2.07
2008 0.70
2007 0.14
2.5

1.5
Miscellaneous
1 Expenses

0.5

0
2009 2008 2007

INTERPRETATION

In the year 2009 Miscellaneous Expenses)was Rs 2.07Crores while in 2008 it


was Rs 0.70cr and in 2007 it was Rs 0.14crores .

44
FINDINGS

Finding

45
• In the year 2009 Equity Share Capital of AEGON RELIGARE LIFE
INSURANCE was Rs. 101.29Crores while in 2008 it was 76.08and in
2007 it was 64.40crores .
• In the year 2009 Networth of AEGON RELIGARE LIFE INSURANCE
was Rs. 2,518.64Crores while in 2008 it was 481.32and in 2007 it was
288.29crores .
• In the year 2009 Investments of AEGON RELIGARE LIFE
INSURANCE was 2,023.55Crores while in 2008 it was 545.28and in
2007 it was 289.81crores .
• In the year 2009 Total Current Assets was (Rs) 1.28Crores while in
2008 it was Rs 1.13cr and in 2007 it was Rs 3.22crores .
• In the year 2009 Net Sales was Rs 12.55Crores while in 2008 it was Rs
31.85Cr and in 2007 it was Rs 15.38crores .
• In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it
was Rs 17.39cr and in 2007 it was Rs 6.74crores .
• In the year 2009 Total Value Addition was Rs 16.08Crores while in
2008 it was Rs 4.51cr and in 2007 it was Rs 0.92crores .
• In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it
was Rs 17.39cr and in 2007 it was Rs 6.74crores .
• In the year 2009 Total Expenses was Rs 16.08Crores while in 2008 it
was Rs 4.51cr and in 2007 it was Rs 0.92crores .
• In the year 2009 Current Liabilities was Rs 3.97Crores while in 2008 it
was Rs 1.70cr and in 2007 it was Rs 3.10crores .
• In the year 2009 Miscellaneous Expenses)was Rs 2.07Crores while in
2008 it was Rs 0.70cr and in 2007 it was Rs 0.14crores .

46
SUGGESTION

47
SUGGESTION

The measurement of profitability is a tool of overall measurement of efficiency


an overall study profitability of AEGON RELIGARE LIFE INSURANCE has
been Dade in relation to sales operating assets capital employed and its net
worth.
By analysis the working result i.e. Profit and loss account of AEGON
RELIGARE LIFE INSURANCE Bhopal . It was found that the net profit
before interest and tax of the AEGON RELIGARE LIFE INSURANCE Bhopal
is showing increasing trends. This is very good for AEGON RELIGARE LIFE
INSURANCE Bhopal The increase in the profits is nearly 24% more then
previous year the reason is good sales growth between years. For this following
suggestion should be considered.
• Proper cost control is required and cost control technique should be
adopted for it.
• Operating expenses, administration. Expenses should be specially
considered to be reduced.
• Inventory is the biggest items of balance sheet that must have demanded a
large amount of maintaining cost. So efficient inventory management
should be done. Inventory should be reduced extent that would help to
recover blocking money in inventory.
• The service staff should be given proper training and better environment
for work.

48
CONCLUSION

49
CONCLUSION:

After studying the components of Financial Analysis of AEGON RELIGARE


LIFE INSURANCE. It is found that the company has a sound and effective
policy and its performance is very good even in this bad recession situation
company has managed to post good profit. Company is competing well at the
domestic as well as the international level .and it is among the low cost services
and offers in the world only because of its proper management of finance.
Cash flow & working Capital increased year on year. The factors contributing
to the increase are:
a) Increase in Sundry Debtors due to relaxing of the credit policy, although the
AR days has remained more or less constant
b) Increase in Inventory from
c) Increase in Other Current Assets and Loans and Advances from 2007-2009
However, increase in Current Liabilities and Provisions has offset the increase
in Current Assets thereby making marginal impact on the Cash management

50
BIBLIOGRAPHY

51
BIBLIOGRAPHY:

Books:
• Dr. S. N. Maheshwari, Financial Management, English Revised
Edition.
• M.Y. Khan and P. K. Jain, Financial Management,
• Ravi M. Kishore, Financial Management, 6th Edition.
• I.M. Pandey, Financial Management.

Website:
• http://www.AEGON RELIGARE LIFE INSURANCE.com
• http://www.google.com
• http://www.wikipedia.com
• http://www.scribd.com

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