Beruflich Dokumente
Kultur Dokumente
Milk is the nourisher of life. And it was this elixir that brought forth-significant
changes in the lives of the people of Andhra Pradesh. It changed the way of people
looked at life in rural India. But most of all, it renewed their hopes and raised their
aspirations. And so when the white revolution looks place, nothing could stop the
flood.
People from all walks of life joined the young and the old, women, men, and
children and a movement had begin, Heralding a new dawn for the people, whole
lives now took on a different meaning.
The main thrust was not in just supplying, milk but also living opportunities to
improve the quality of rural life. And may be for the first time allowing them to dream.
1
NEED FOR THE STUDY
Since the time milk and Milk products occupied a prominent position in your
diet as well as our socio-cultural rituals, Milk is considered to be the4 important food
among all the food products. It is the best source of nutrition, in fact and it is a
complete food consisting of proteins and vitamins.
Milk is used for different purpose in our daily life, In highly developed
Countries, milk and it its products constitute and important part of daily diet of
people. Therefore those people enjoy freedom from disease4s concerned with,
malnutrition, which is commonly found in our country.
Major part of milk is produced in rural areas where as the demand for lit is
from the urban side. The urban areas have high density of pollution, which is
e3ngaged in non agriculture activities, Hence the urban people have to depend upon
rural areas for the supply of milk generally the urban consumers receive milk from
private milk venders who come from villages to supply milk.
Milk is essential product for making Milk, curd, butter, ghee etc are used
everyday by everyone home, so these products should be available in a required
time for the people. When these products are essentially the production concern has
to produce in required time if it has to produce in a required time its business has to
run smoothly.
2
OBJECTIVES OF THE STUDY
To evaluate the financial performance of the host organization over the last five
years.
To know about the organization structure and various activities going in APDDCF
Ltd.
To draw conclusion and to suggest suitable measures to over come the problems
if any to improve its performance.
3
METHODOLOGY OF THE STUDY
The Present projects book covers a period of five years from 2003-2008. The
project work is based on the data collected from primary and secondary sources
4
LIMITATIONS OF THE STUDY
The major limitation of the project study was time right weeks it had to be
completed in a very short period of time, which was not sufficient to complete the
study. During the limited period of study they my not be detailed full-fledged
utilization of resort in all in respects. Some information is not available for study due
to confidential matter.
5
INDUSTRY PROFILE & COMPANY PROFILE
INDUSTRY PROFILE
Dairy development in India :
The origin of dairy farms under public management goes back to 1866 when
the department established a few dairy forms in the year to supply milk products to
the British troops. The nest step was initialed during the First World War. In 1914,
the department of defense, on the advice of lthe3 board of agriculture, conducted a
preliminary study to access the population of cows and buffaloes. The board of
agriculture advised the government in 1916, to appoint an imperial dairy, export.
The next important step was the decision to conduct a census on livestock. The
livestock census was carried out in 1919 as a preparatory action for planed dairy
development by the board of agriculture. In 1920 the imperial dairy expert
recommended to the government the man power requirement for managing the
defense dairy farms by this there were three dairy farms and until 1923. The British
Government‘s approach to Dairying was confined to milk required of the military only.
After 1923 diploma course in Dairying was started at Bangalore.
Dr. N.C.Wright director, dairy Research institute, Scotland who was invited to
India in 1936 for reviewing the progress of dairy in the country made few important
recommendations.
6
In 1937 the Lucknow milk products cooperative union limited was established
paving the way for the organization of such unions at district and state levels.
In 1945 the Famine enquiry commission in its report embalmed the need for la
developing and folders supply for in creasing milk production and recommended the
adoption of mixed farming. The commission also made our a case for increasing the
milk production and consumption in the villages as well as the need for milk supply to
urbaneness. As a sequel to this, under the greater Bombay milk scheme, array milk
colony has been set up. Similarly in Bengal the greater Calcutta milk scheme has
been initiated two years there after. The beginning of Bombay milk scheme to
procure milk from Cairo district in Gujarat through a private diary land the resultant
exploitation point that led to the idea of creating an institutions structure for Dairying
on cooperative lines.
In 1946 the Frames integrated Dairy cooperative unit (Amul) was established
at Anand District, in Gujarat. Amul and the greater Bombay milk scheme helped the
dairy industry in India to develop at faster rate.
7
NATIONAL MILK GRID :
In 1970, the national grid was a distant seeming concept, but the next decade
how lit taking shape. The benefits from such as arrangement to both producers and
consumers are clear; to consumers the gird means more level supply of milk through
out the year. To producers grid brings more rational prices through lout the season
in rural areas and also in urban areas.
Operation flood –1
It was launched in 1970. The estimated outlay was Rs.1164 Millions the
Indian dairy Corporation (IDC), a government of India under taking was set up at
Baroda, to advance funds for the various dairy projects. Provided by Indian Dairy
Corporation are usually on 70% loan cum 30% subsidy basis
The national diary development board dairy schemes have four major objectives;
1. They aim at bringing about an increase in the production of milk through supply of
technical inputs.
4. Build a cooperative organization for leach dairy. The milk producers must own lit
them with only limited control buy the state government.
The gross roof –operative organization was first introduced at Amul dairy,
Anand (Gujarat)
8
During operation flood –1 program major diaries were started in Indian in 10
states covering 1.3 million families. With in 10 years the income of milk producers
had been doubled.
3. Development of the original milk grids, with likages to the national milk grid major
urban centers.
FUNDS
Funds for operation flood where I initially modernized form the scale of
products based on foreign food donation in the form of skim power and buffer. With
its pledge to provide milk to one land all it was considered world’s largest dairy
development programme. It spurred Indian dairy industry to launch white revolution.
Dairy co-operatives
Co-operative type of organization for development has envisaged many
advantages.
1. It can consider needs of the producers and frame laws accordingly.
9
Federal from of co-operative system is intended to ensure unbroken link for
village level to state level and safeguard interests of milk producer
It was only during the 1950`s that Tamilnadu, Gujarat, and Utter Pradesh took
some important steps in organizing dairy co-operatives. Amul, the most significant
and prestigious venture in the dairy cooperative sector, provided a model for the milk
producer’s cooperative in Gujarat and other states, such co-operative played an
important role in creasing milk production as well.
10
Growth of dairy development
2. It achieved its target with 4.6% annual compound growth rate against 4.2%
envisaged in seventh plan.
4. The per capital availability of milk i9s anticipated to increase from 1995 to 1998
for human population 908 millions.
5. Besides this milk operations food programme has achieved success in other
fronts also. Import of milk solids has been already ended and India recently
exported 80,000 tons of milk.
6. India refused commodity laid of about l35 cores from European Economic
Community, which gives an assuring picture of total self-reliance and near self-
sufficiency in milk productions.
Dairy forming can also absorb large number of agricultural labour and rural
poor and it provides large-scale employment opportunities through out the year. The
subsidiary occupation is playing a vital role in improving rural economy which is
mainly agriculture, based. The advantage of dairy industry is that, gestation period is
very short and the benefits of development activities can be reaped soon.
11
The dairy development activities were carried on the government through the
dairy development. Though dairy industry started as a service organization land
recognized as development in to a commercial organization.
12
More than 7 lakhs milk producers get Rs.58 crores per annum for supplying
milk of which 78% of total beneficiaries belong to small and marginal farmer,
agricultural labours and other worker sections of rural community. Every day around
10 lakh liters of milk collected. Every 10 liters of milk produced in the country comes
from Andhra Pradesh.
Arresting the oscillation in milk price as well as supply of toned milk for every
needy are accelerating the programs of dairy development to a peak period. The
turnover of milk increased by 50 percent as a result today per capital availability of
cow milk is doubled.
Co-operative Federation
Andhra Pradesh Dairy development cooperation was constituted in October
1981 to implement operation flood-II program through active involvement of producer
in organizing milk production, milk procurement. Processing and marketing on” 3-
tier” co-operative structure is as per the national policy of Government of India.
The Indian Dairy co-operation offered financial assistance of Rs. 7851 crores
for dairy development programs in Andhra Pradesh with 30% grant and 70% on loan
basis.
The National Dairy development board identified the project area for
implementation of operation flood – II program in 16 districts out of 23 districts in the
state. The dairy federation is marching with dairy cooperatives to herald a new era of
rural prosperity.
13
Main Aim of Setting up a Dairy Industry in Andhra Pradesh
The majority of area of Prakasam district in our state is having agriculture to
be main Livelihood, Dairy industry occupies fifth place in earning livelihood next to
agriculture. This is an undoubted fact. After concluding that, the cattle wealth of
district is high. The surveys were conducted on this aspect and the result was the
development of dairy development union.
After changing under different management systems, it is new stoping into the
co-operative sector, the dairy industry stepped in to the co-operative sector to help
the small and backward farmer by making them the partners of the industry. The
then governer of Andhra Pradesh also explained this fact.
“The expansion of this to meet the needs of the people and help the farmers
and villages because many cattle are source of income to them who supply milk”
2. To improve cattle wealth of good bread which are important for milk Production.
4. Providing the availability of good breed seed o as to improve the cattle feed.
5. Introducing mobile hospitals to provide free medical facilities to the cattle of the
Dairy and avoid disease.
7. As producers are maintaining the milk producers co-operative union and profits
gained are used for the development of the producer, which ultimately results in
development of the village.
So from the above aims of the cooperative union it is crystal clear that,
developing the cooperative sector would bring profits.
14
To put the above programs to action in our district with the co-operative of
national dairy development board, a three tier program w3als started in 1980 in
relation to it, 198 milk producers co-operative unions have been set up at village
level.
On 1975 Prakasam Zillah dairy industry management was given to Zillah milk
produce co-operative union. Well breed seeds and disease avoidable injections were
given at half rate. Required steps are taken to set up government cattle hospitals
15
provide an incentive price for milk to the rur4al producers over and above their cost
of milk production.
6. Quality control:
Quality control aspect of milk and milk products has not received much
attention due the general storage of milk,
Because of de-licensing the dairy products the ways are op-0en to exports the
products to foreign nations that make a bright future/demand.
16
Dairy Development in A.P during 2007 - 2008
COMPANY PROFILE
The milk collection in Prakasam District started with the commissioning of the
Milk chilling center of Ongole in 1975, majority of milk producers in the district are
17
from the categories of the land less agricultural labors, marginal and small farmers
most of whom are from socially economically backward classes. While dairying is an
essential side income to agriculture, majority of the milk producer farmers, slowly it
took an important turn as a prominent contribution to the rural economy.
The parkas District co-operative milk producer union established in the year
1986 with the affiliation of the mild producer dairy co-operative formed. The
investment from operation flood project strengthened the processing capacity built
up besides introduction of technical inputs for milk production enhancement of milk
producer co-operative doorsteps.
Due to constant affords of this dairy and involvement of milk producers the
milk collection of 500LPD in 1975 increased to 95,000LPD by 1994 on an average,
in he recent years, as a result of central gov, liberalization policy, more than 25
private dairies came into existence in Prakasam district, and as such the average
milk collection fell down to some extent.
The procurement has increased to 1.45 lakh liter, per day in the peak of 1986
observing the trend increase of milk production it was proposed to establish a milk
products factory of capacity of 3.5 lakh its. Per day under operation Flood-III with
financial assistance from NDDB on 30% grant and 70% loan basis.
18
The project was contemplated to handle the surplus milk from Nellore District
also. The execution of the project was entrusted NDDB on turnkey Basis.
i) Milk
ii) Butter milk
iii) Ghee
iv) Kova
v) Flavoured milk
19
Milk Chilling center, Venkatschalempalli 0.05 Lakh lts. Cap
Dairy parlors 10
A.I centers 30
20
interiorly located in specific. How ever the AI activity will be taken up by ALDA in
future.
Further, the cattle insurance activity is also under implementation and the 3-
year premium will be shared by the beneficiary, society and union in the ratio of
40:30 respectively.
21
health, hygiene, quality of milk and accounting through regular zonal meeting. MPF
tips of milk producers especially women have been arranged.
9. Padi Prakasam:
This is exclusive scheme in which only union milk producers are financed by
the nationalized banks under tic-up arrangement. In this scheme beneficiary will bear
the margin money of Rs.2, 500/- and bank finance id Rs.7, 500/- so for, nearly
10000/- producers are benefited.
22
Milk is received at Prakasam Dairy through direct routes, road tankers from
chilling centers.
Direct routes:
Milk is collected both I the morning and evening from 30 centers in the district,
Vehicles used for direct route collection of milk are hired by the dairy on contract
basis. The mode of collection is similar to any other collection center whether it is a
co-operative society (or) not.
E.G: Vijayawada, Hyderabad, Guntur, by own and or hired tankers for city
marketing on conversion on behalf of the union on custom hiring basis.
Financial activities:
The department undertakes accounting and payments of DCS bills purchase
bills. Reconciliation of accounts departments undertake the statutory functioned like
G.P.F, E.P.F, E.S.I, P.T, G.I.S, L.I.C, income Tax etc.,
Marketing activities:
Ongole dairy started its liquid milk sales 1984 since then up to 1999 there was
no separate sale wing from in 1989 taking marketing as the main thing, Ongole dairy
had divided its sales pattern as.
23
1. Liquid milk sales
2. Milk bi-products sales
The above chart reveals that the factory distribution system is directed as well
as indirect. The factory has its own parlor through which it sells the milk to ultimate
consumer who orders for milk. On bulk basis will ge4t milk directly from the company
provided that minimum order in 40 liters.
The factory also sells milk through indirect distribution for instance the factory
has appointed number of commission agents in Ongole District who self liter sachets
in the vacant part the factory has introduced U.H.T milk in sachets, which are being
districted through retailers, The factory gives them reasonable margin on but milk.
ORGANIZATION CHART
Board of Director
24
Chairman
Managing Director
Deputy Director
Lab assistant
Driver Mechanic Boiler operator
Workers
25
RATIO ANALYSIS
A theoretical frame work Ratio is among the best known and most widely
used tools of financial analysis. Ratio may be expressed in any of three forms
1) As a pure ratio
2) As a rate, and
3) As a percentage.
1. Liquidity ratios
2. Leverage ratios
3. Activity ratios
4. Profitability ratios
1. Liquidity ratios:
26
It is extremely essential for a form to be able to meet its obligations as they
become due. Liquidity ratios measure the ability of the firm to cover its current
obligations. Liquidity ratios by establishing a relationship between cash others
current assets provide a quick measure of liquidity. A firm should ensure that it does
not suffer from lack liquidity, and also that it is not too much liquid. The failure of a
company to meet its obligations, due to lack of sufficient liquidity, will result in bad
credit image, loss of creditors confidence, or even lawsuits resulting in the closure of
the company. A very high degree of liquidity is also bad, as idle assets earn nothing.
The firm’s funds will be unnecessarily tied up in current assets. Therefore it is
necessary to strike a proper balance between liquidity and lacks of liquidity important
liquidity ratios are:
a) Current ratio:
This ratio is to current assets to current liabilities. The current assets are
those which are readily realizable with in a period of one year such as trade debtors,
bills receivable, and stock of raw material securities, deposits, and advances.
Similarly the current liabilities are those which are repayable on demand or that will
fall due within a period of one year of the balance sheet date. The determining factor
is the date of maturity and not the possible date of payment. The relation ship
between current assets and current liabilities reflects the short – term financial
position. The current ratio of 2:1 is generally considered satisfactory. It is calculated
by dividing current assets by current liabilities.
b) Quick ratio:
This is also called as acid test ratio o liquid ratio. The word liquidity means
conversion of assets in to cash during the normal course of business and to have a
regular uninterrupted flow of cash meet outside current liabilities or current
obligations as and when due and payable. Moreover business also will have to
ensure money for day to day operations. In computation of this ratio only liquid
assets are taken in to account. Liquid assets would include cash in hand, cash at
bank, sundry debtors and marketable investment and other items including stocks.
Inventories are excluded from liquid assets since sale of products takes time to
convert them in to cash. It is calculated by dividing the quick assets by current
liabilities.
27
c) Current Ratio:
Since cash in the most liquid assets, a financial analyst may examine this
ratio. Trade investments or marketable securities are equivalent of cash ratio. It is
calculated by dividing cash by current liabilities.
2. Leverage ratio:
Financial leverage refers to the use of debt finance. While debt capital is a
cheaper source of finance, it is also a riskier source of finance. Leverage ratio are
generally designed to measure the contribution of the company’s owner’s vis-à-vis
the fund provided by its creditors. A firm can be examined by using these ratios. The
important leverage ratios are:
From the leader’s point of view, the financial structure should reveal a
satisfactory balance of own funds and borrowed funds. Net worth means capital plus
reserves plus development reserves minus fictitious assets. Debt includes all long
term debts viz., term loans and debentures. It is generally desirable to have
substantial state of owner in the business so that the enterprise is free from the
burden of paying too much interest on borrowed funds and can absorb stocks of
business.
28
Total debt to net worth and total debt to total capital
This ratio establishes the relation ship between the total debt and total capital.
Total debt means current liabilities plus long term debt. Too much capital should not
be raised by way of debentures, because debentures don’t share in business losses.
It is calculated by dividing total debt by total capital
3. Activity ratios:
The firm employs activity ratios, also referred to as turnover ratios or asset
management ratios, measure how efficiently the assets. These ratios are based on
the relationship between the level of activity, represented by sales or cost of goods
sold, and the investment in various assets viz., inventories, receivables, fixed assets,
etc. The important turnover ratios are
This ratio indicates the number of times inventory is replaced during the year. It
indicates the efficiency of the firm in selling its product. There are two approaches in
measuring any ratio, one measure relationship between cost of goods sold and
average inventory, the other approach relates sales and inventory.
29
The second major activity ratio is the receivables or debtors turnover ratio.
Allied and closely related to this is the average collection period. It shows how
quickly debtors are converted into cash. In other words, the debtors turnover ratio is
the test of the liquidity of the debtors of a firm.
4. Profitability ratio:
30
The operating efficiency of the firm and its ability to ensure adequate return to
its shareholders depends ultimately on the profits earned by it. Profitability is
measure of efficiency and the search for it provides an incentive to achieve
efficiency. The profitability of the firm can be measured by its profitability ratio.
31
Another profitability ratio related to sales is operating expenses ratio. It is the
reciprocal of profit margin, gross as well as net. It is very important for analyzing the
profitability of the firm. This ratio is computed by dividing operating expenses by
sales.
e) Return on investment:
Return on investment is a measure of business performance, which is not
effected by interest charges and tax payments. It abstracts away the effect of
financial structure and tax rate focus on operating performance. Hence, it is
eminently suited for inter – firm comparison.
It is calculated by dividing earnings before interest and taxes (ebit) with total
assets.
32
Capital employed
g) Return on Equity:
This ratio is called as return on net worth. This ratio reveals how the firms
have utilized profitability the owner funds. The ordinary share holders equity is also
referred as a net worth. It is calculated by dividing earnings after taxes (eat) with net
worth.
Eps = EAT
No of equity share held
It helps to take time dimension into account by trend analysis and time
series analysis
Comparison of current or past ratios with future ratios show the firm’s
relative strengths & weaknesses in the past and the future ratio analysis
can serve as a better tool for measurement of the financial health of an
enterprise that is possible by the analysis o absolute figures.
34
The importance of ratio analysis lies in the fact that it presents facts on a
comparative basis and enables the drawing of inferences regarding the performance
of a firm.
2. Long-term solvency.
3. Operating efficiency.
4. Overall profitability.
6. Trend analysis.
35
The liquidity position of a firm would be explained with the help of ratio
analysis.
Basing on the conclusions of ratio analysis a firm can said to have the ability
to meet its short term liability. The ability can be reflected in the liquidity ratio of a
firm. The liquidity ratios are particularly useful in credit analysis by banks and other
suppliers of short term loans.
1. OPERATING EFFECIENCY:
Ratio analysis is helpful in the view point of management such as measuring
the efficiency in the management and utilization of its assets activity ratios play a
vital role in this context.
2. OVERALL PROFITABILITY:
The management of any firm is mainly planned to maintain the long
and short term obligations of the firm. Here the profitability ratios of the firm taken
into consideration.
4. TREND ANALYSIS:
36
Ratio analysis facilitates the management to know whether the firm financial
position is improving of deteriorating or deteriorating or constant over the years by
setting a trend analysis with the help of ratios.
Ratios worked out from the first financial statements of the organization.
Ratios of most progressive and successful firms at the same point of time.
37
Comparison between two variables proves worth provided their basis
of valuation is identical. But in reality, it is not possible, such as
methods of valuation of stock-in-trade, or charging different methods of
depreciation of fixed assets etc.
Ratio is calculated join the basis of past result which may not be suited
to implement to the present business policies.
38
DATA ANALYSIS & INTERPRETATION
Current ratio:-
The current ratio is calculated by dividing current assets by current liabilities.
Current assets include cash and those assets, which can be converted in to cash
within a year, such as marketable securities, debtors and inventories.
CURRENT ASSETS
CURRENT RATIO:
CURRENT LIABILITIES
TABLE:-1
CURRENT
YEAR CURRENT LIABILITIES RATIO
ASSETS
2003-04 162630266.3 66086200.13 2.46088088
2004-05 144043232.6 80007395.86 1.800373966
2005-06 119472334.5 89258186.27 1.338502825
2006-07 87350227.24 81488065.33 1.071938902
2007-08 149331000 122846800 1.215587219
39
Graph-1:-
CURRENT RATIO
3
2.5
2
PERCENTAGE
1.5
1
0.5
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
The current ratio main purpose is to measures short-term debt paying ability
of the firm. Its standard is 2:1. So the companies maintain this ratio. So in the
company the position of liquidity position is some part of good in the year 2003-04
only. Another four years means 2004-05, 2005-06, 2006-07, 2007-08 these four
years the liquidity position is not good. So the company concentrates in the part.
40
2. Quick ratio:-
This ratio establishes a relationship between quick or liquid assets and current
liabilities. An asset is liquid if it can be converted in to cash immediately or
reasonably soon without a loss of value cash is the most liquid assets, other assets
are bills receivables, debtors and marketable securities. Inventories are considered
to be less liquid.
The ratio shows that the immediately available assets, with assets are
immediately converted in to cash to meet the short term solvency of the firm.
QUICK RATIO:-
CURRENT LIABILITIES
TABLE: - 2
41
Graph 2:-
QUICK RATIO
1.5
1
PERCENTAGE
0.5
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
The normal standard of liquid ratio is 1:1 regarding quick ratio. So in the
standard PDMPMACU LTD is maintains quit satisfies. Only one year the ratio is get
down in 2006-07. So the quick ratio is good.
42
3. Inventory turnover:-
The inventory turnover ratio measures how quickly that stock is converted in
to sales. It is the test of efficient inventory management. To measure the efficient,
the ratio should be compared on the basis of trend analysis or with the level of other
firms. The higher the ratio, the better is the performance of the company. A low ratio
may indicate a slow moving inventory or none too aggressive sales jokes. A low ratio
also reveals the other investment in inventory.
INVENTORY TURNOVER:-
AVERAGE INVENTORY
TABLE: - 3
43
Graph 3 :-
45
40
35
30
PERCENTAGE
25
20
15
10
5
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
44
4. Debtors’ turnover ratio:-
Debtors constitute an important constituent of current assets and therefore the
quality of debtors to a great extent determines a firm’s liquidity. Two ratios are used
by financial analysts to judge the liquidity of the firm they are
The ratio indicates the extent to which the debts have beet collected in time. It
gives the average debt collection period. The ratio is very helpful to the lenders
because it explain to them whether their borrowers are collecting money with is a
reasonable time.
TOTAL SALES
DEBTORS
TABLE: - 4
45
Graph 4 :-
8
7
6
5
4
3
PERCENTAGE
2
1
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
In the ratio is good. In the way the company runs the business in the further
days the firm takes good sales. So firm to improved this cash business.
46
5. Debt collection period:-
It is use to identify the how much day to re collect the money to the debtors.
DEBTOR’S TURNOVER
TABLE: - 5
47
Graph 5:-
120
100
80
60
DAYS
40
20
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
DAYS
Interpretation:-
In the ratio point of you it is not good. The debtor’s collection period is very
high. Means the collection of the money is very long. In the way the firm to maintains
the more working capital. So modify this thing also.
48
6. Fixed assets turnover ratio:-
Assets are used to generate sales therefore the firm should manage its assets
efficiently to maximize sales. The relationship between sales and assets is called
assets turnover. The firm can compute fixed assets turnover simply by dividing sales
by fixed assets.
SALES
TABLE: - 6
49
Graph 6:-
2.5
2
PERCENTAGE
1.5
1
0.5
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
In the fixed assets ratio is not good. To improve the sales of the firm to
improve the sales automatically the firm runs in good way and gets good profits.
50
7. Total assets turnover ratio: -
Assets are used to generate sales. A firm should manage its assets efficiency
to maximize sales. The relationship between sales and assets is called assets turn
over. Assets turnover ratio is computed by dividing sales by total assets.
SALES
CAPITAL
TABLE: - 7
51
Graph 7:-
1.4
1.2
1
PERCENTAGE
0.8
0.6
0.4
0.2
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
In the total five years the assets turnover ratio is very bad. More concentrates
in the sales increases. This is most important point in the financial analysis.
52
8. Working capital turnover ratio:-
SALES
TABLE: - 8
NET WORKING
YEAR SALES RATIO
CAPITAL
2003-04 418131979.8 96544066.2 4.330996158
53
Graph 8:-
80
70
60
50
PERCENTAGE
40
30
20
10
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
The working capital means to run the business in smooth manner in raw
materials to up to finished goods how much of cost to spent the business is called
working capital. So in way you will use low working capital you get the more sales. In
the graph point of you the year 2006-07 the ratio is good in other years to improve
the ratio.
54
9. Debt-equity ratio:-
The debt equity ratio is determined to ascertain the sound ness of the long
term financial policies of the company. It is also know as “external internal” equity
ratio. It may be calculated as follow;
The term external equities refers to total outside liabilities that consists of both
short term and long term liabilities and the term internal equities refer to share
holders funds that consists of both equity and preference capital.
In case the ratio (i.e. outsiders funds are equal to share holders funds it is
considered to be quite satisfactory).
TABLE: - 9
LONG TERM SHARE HOLDERS
YEAR RATIO
DEBT EQUITY
2003-04 281629148.5 21411620 13.15309857
55
Graph 9:-
DEBT-EQUITY RATIO
14.5
14
PERCENTAGE
13.5
13
12.5
12
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
In the ratio main indication is the percentage of funds being financed through
borrowings; a measure of the extent of trading on equity. So in the way firm based
on more in long term liabilities. So the ratio is not satisfaction.
56
10. Debt ratio:-
Debt ratio is used to analyze the long term solvency of firm it helps in knowing
the proportion of the interest bearing debt in the capital structure debt ratio is
computed by dividing total debt by capital employed (CE) or net assets (NA). Total
debt will include short and long -term borrowings from financial institutions,
debentures/bonds, deferred payment arrangement fro buying capital equipment,
bank borrowings. Public deposits other interest bearing loans. Capital employed will
include total debt and set worth.
TOTAL DEBT
DEBT RATIO:-
CAPITAL EMPLOYED
TABLE: - 10
57
Graph 10:-
DEBT RATIO
1
0.9
0.8
0.7
0.6
PERCENTAGE
0.5
0.4
0.3
0.2
0.1
0
2003-04 2004-05 2005-06 2006-07 2007-08
YEARS
RATIO
Interpretation:-
In the ratio of the firm is increasing but the ratio is very position. So the firm
run the business in smooth manner.
58
11. Interest coverage ratio:-
The interest coverage ratio or the times interest is used to test the firm debt
servicing capacity. The interest coverage ratio is corrupted by dividing earning before
interest and taxes (EBIT) by interest charges.
The interest coverage ratio shows the numbers of times the charges are
covered by funds that are ordinarily available to depreciation are also available to
pay interest charges. Hence interest coverage ratios earning before depreciation
interest and taxes (EBIT) divided by interest.
INTEREST
INTEREST COVERAGE: -
EBIT
TABLE: - 11
59
Graph 11:-
0.4
0.3
0.2
PERCENTAGE
0.1
0
-0.1 2003-04 2004-05 2005-06 2006-07 2007-08
-0.2
-0.3
YEARS
RATIO
Interpretation:-
In the ratio the first four years the ratio is negative. So the company takes
care about these aspects. The last one year only get profits and positive value.
60
12. Gross profit ratio:-
It is calculated by dividing the gross margin by sales. This ratio shows the
profits relative to sales after the direct production costs are deducted. It may be used
as an indicator of the efficiency of the production operation and the relation between
production costs and selling price.
GROSS PROFIT
GROSS PROFIT RATIO: - _______________
NET SALES
TABLE: - 12
GROSS PROFIT OR
YEAR SALES RATIO
LOSS
2003-04 21207515.04 418131979.8 5.071966762
61
Graph 12:-
10
5
PERCENTAGE
0
2003-04 2004-05 2005-06 2006-07 2007-08
-5
-10
YEARS
RATIO
Interpretation:-
In the ratio is some part of good in year 2003-04, 2007-08 get profits. And
2004 -05 the profit is decline. And 2005-06, 2006-07 get loss. So the firm spent in
more in direct expenses. So the firm controls the expenses.
62
13. Net profit ratio:-
NET SALES
TABLE: - 13
NET
YEAR SALES RATIO
PROFIT/LOSS
2003-04 -5946213.51 418131979.8 -1.422090105
63
Graph 13:-
4
2
0
-2 2003-04 2004-05 2005-06 2006-07 2007-08
PERCENTAGE
-4
-6
-8
-10
-12
-14
YEARS
RATIO
Interpretation:-
In the ratio all the first four years company cannot get the profits. In the last
year get the some amount of profits. So in the way the company spent the more
indirect expenses also. Company controls the expenses.
64
14. Return on total assets:-
The profitability ratio is measured in terms of the relation ship between net
profits and assets. The return on assets may also be called profit to assets ratio.
There are various approaches possible to define profits and assets.
TABLE: -14
65
Graph 14:-
6
4
2
0
PERCENTAGE
RATIO
Interpretation:-
In the ratio point of you the company cannot get the good profits. So the
return on total assets ratio is negative. In the last year 2007-08 get some part of
return to the firm.
66
15. Return on equity:-
RETURN ON EQUITY:-
NET WORTH
The shareholders equity or net worth will include paid up share capital share
premium and reserves and surplus less accumulated losses. Return or equity
measures the profitability of equity funds invested in the firm. It is very important
measure because of it reflects the productivity of the owner ship capital employed in
the form. It is influenced by several factors like earning power, debt equity ratio and
average cost of debt funds and tax rate.
TABLE: - 15
67
Graph 15:-
RETURN ON EQUITY
1
0.5
0
2003-04 2004-05 2005-06 2006-07 2007-08
PERCENTAGE
-0.5
-1
-1.5
-2
YERAS
RATIO
Interpretation:-
In the return on equity is based on the profits. So the 2003-04 to 2006-07 the
four year the company runs the business with loss. So the ratio is negative. After
2006-07 the firm get the profit auto metical ratio is growing.
68
MARKET RATIOS:-
It is use full to the share holders how much of returns to earn there
investment. And what is the position of the market to the investment share rate. To
now the deferent types of all market information to analyze to using these ratios.
In the ratio to know the Avery year how much of amount to earning the
investors means the share holders. The equity share holders to get the how much of
amount to get the return on the investment.
TABLE: - 16
TOTAL NUMBER OF
PROFIT AFTER TAX EPS
YEAR SHARES
2003-04 -5946213.51 6450 -921.8935674
69
Graph 16:-
4000
2000
0
RUPES
-4000
-6000
-8000
YEARS
EPS
Interpretation:-
The first four years means 2003-04 to 2006-07 firms not get profits. So share
holders are not getting any returns. The last year the each share holder gets the
return nearly 3000Rs get the 2007-08. So company gets the profits.
70
FINDINGS
1. The Liquidity Position of the firm it not satisfactory from the financial year
2004-05 to 2006-07 as there is a declining trend in current ratio.
2. The quick ratio of the firm is satisfactory for all the years.
3. Regarding capital structure the firm is high geared i.e. it is dependent and
more debt capital.
4. The Interest Coverage Ratio of the firm is very bad i.e. the firm is not in
position to pay regular interest payment in future i.e. problem of financial risk.
7. The gross profit ratio for two years indicates negative trend the firm must try to
improve.
71
SUGGESTIONS
2. The rich quality of P.D.M.P.M.A.C.U. Limited can make sure of approval from
various quality accreditations like ISO and has a success fully career in near
future.
3. Inspection and quality checking must be doubled for providing quality milk.
6. The gross profit decreased comparatively than previous year. So, the gross
profit must be improved.
8. The net profit of the company should improve as the company. So for losses
from the last 4 years.
72
CONCLUSION
73
ANNEXURE
Table –1
APDDCF&PDCCB
21000.00 0.003
Investment
c)total Investment s
203956072.83
&other assets
74
Particulars 31-03-2003 Percentage
Current liabilities
Outstand liabilities 34036922.89 5.646
Due to (sun-Cr) 48539033.70 8.054
Recovery from milk bills 6682229.68 1.108
a) total current liabilities 89258186.27
75
Table – 2
Financial Statement PDMPMACU Ltd., Common Size Balance Sheet during the year
2003 -2004.
Current Assets
A) Total CA 169962341.87
Investments &
Other Assets
APDDCF&PDCCB
21000.00 0.004
Investment
C) Total Investment
123264020.44
& Other Assets
76
Particulars 31-03-2004 Percentage
Current Liabilities
Table –3
77
Financial statement PDMPMACU ltd. Common size balance sheet during the year
2003 – 2004
Particulars 31-03-2004 Percentage
Current assets
A) Total CA 162630266.40
78
Particulars 31-03-2005 Percentage
Current liabilities
Table – 4
79
Financial statement PDMPMACU ltd. Common size balance sheet during the year
2005-2006
Current assets
A) Total CA 144043232.61
80
Current liabilities
Table –5
81
Financial Statement PDMPMACU Ltd. Common size Balance sheet during
the year 2006-2007
Table –6
82
Financial Statement PDMPMACU Ltd. common size balance sheet during the
year 2006-2007
Current assets
Cash on hand 60783.56 0.009
Bank balance 7797759.89 1.225
Due to (sun-Dr) 57313980.84 9.006
Closing stock 18932802.40 2.975
Pre paid expenses 1244900.55 0.196
A)Total CA 85350227.24
APDDCF&PDCCB
21000.00 0.003
Investment
C) Total Investments
269711718.70
& other Assets
83
Particulars 31-03-2008 Percentage
Current liabilities
Outstang liabilities 27102212.00 4.259
Due to (sun-Cr) 46890712.65 7.368
Recovery from milk bills 7495140.68 1.178
a) total current liabilities 81488065.33
84
BIBLIOGRAPHY
- JAMES C. VANCHORNE
2. FINANCIAL MANAGEMENT
- I.M. PANDEY
3. FINANCIAL MANAGEMENT
4. FINANCIAL MANAGEMENT
- S.N. MAHESWARI
Web-: www.google.com
www.PDMPMACO.com
85