A Project report on

ASHOK LEYLAND PVT. LTD.

PROJECT GUIDE: PROF. PROF. SUBMITTED BY: NAME: BHALODIYA KISHAN R. ROLL.NO:13 CLASS: SYBBA DIV: A SUBMITTED TO: L.J. INSTITUTE OF BUSINESS ADMINISTRATION VASTRAPUR, AHMEDABAD 380015

CERTIFICATE
This is to certify that Mr. KISHAN R. BHALODIYA of L.J Institute of Business Administration has submitted his Financial Project titled, ASHOK LEYLAND for the year 2011-12 in partial fulfillment of Gujrat University requirement for the award of the degree of bachelor of Business Administration.

For, L.J. INSTITUTE OF BUSINESS

DIRECTOR

PROJECT GUIDE

EXTERNAL EVALUATOR

Place:AHMEDABAD DATE:

ACKNOWLEDGEMENT
The successful completion of this report would not have been possible without the coopration and support of my teachers,friends and my institute. I also forward my thanks my prof. for imparting valuable guidance and co-operation in making of this finance report. I also extend my gratitude to respected director of the institute for arranging this kind of practical studies on finance report. I am also forwarding my gratitude to the company which helped me when we called them to sort out doubts. Also I am thankful to Gujrat University for introducing this kind of practical study on finance report BBA program without which we would have had no practical experience of real finance management.

Your sincerely Class:S.Y.B.B.A. Div:A Roll No:13 Place:Ahmedabad Date:

PREFACE
This practical training of B.B.A. program develops a feeling about difficulties and challenges in the business world. Only theory knowledge does not impart complete education, practical experience must accompany Theoretical knowledge to add meaning to education. We need to know the practical application of or other theoretical knowledge. So I have prepared a financial report ASHOK LEYLAND

And have tried to analysis each and every report of three successive years.

COMPANY PROFILE (A) NAME OF THE COMPANY: (B) REGISTERED OFFICE:

ASHOK LEYLAND LIMITED

NO.1,Sardar Patel Road, Guindy, Chennai 600032. Tel,+91 44 2220 6000, Fax: +91 44 2220 6001

(C) PRODUCTION PLANT:

Chennai(Ennore & Ambattur) And Hosur (Tamil nadu) Bhandara (Maharastra); Alwar(Rajasthan) Pantnagar (Uttarakhand)

(D) COMPANY E-MAIL ID:

secretarial@ashokleyland.com www.ashokleyland.com

(E) WEB SITE:

(F) TYPE OF BUSINESS:

(G) PUNCHLINE:

ENGINEERING YOUR TOMMORROWS

TABLE OF CONTENTS

LISTING OF ITEMS INCLUDED IN FINANCIAL STATEMENT

Board of directors Directors report Balance sheet Profit and loss Account Auditors report Cash flow statement Notice Consolidated financial statement

HIERARCH OF ORGANIZATIONAL STRUCTURE

The organizational structure of the ASHOK LEYLAND PVT LTD

ABOUT COMPANY (A) NAME OF THE COMPANY: ASHOK LEYLAND PVT LTD
(B) NAME OF THE DIRECTORS:
R J Shahaney D G Hinduja A K Das D J Balaji Rao (C) NAME OF AUDITORS: M S Krishnaswami&Rajan Deloitte Haskins&sell Geeyes &co.

(D) NAME OF BANKERS:

Bank of Baroda Citi bank N.A. Bank of America SBI bank

(D) NAME OF SECRETORY:

A R Chandrasekharan

(E) NAME OF THE SHARE TRANSFER AGENT : K Sridharan Geeyes &co. 9

FINANCIAL RESULT OF THE COMPANY AT A GLANCE FOR LAST 3 YEARS (RS Lakhs) 2008-09 2009-10 2010-2011
20844.63 1845.00 18999.63 22.05 54477.48 12110.00 42367.48 80179.93 17050.00 63129.93

PARTICULAR
Profit before tax Less: provision for taxation Profit after tax Excess provision written back Dividend corporate dividend tax Balance profit from last year Transfer from/(to): Debenture redemption reserve General reserve Profit available for appropriation Appropriation:

3.75
50227.38

48230.19

57744.98

2958.33 2500.00 63794.48

416.67 10000.00 81014.34

5666 (10000) 106041.57

proposed dividend
Corporate dividend tax thereon Balance profit carried to balance sheet Earning per share (face value Re.1/-) Basic (in Rs.)

13303.38 2260.91 48230.19 1.4 3

19955.07 3314.29 57744.98

26606.77 431628 75118.52

3.18

4.75

ABSTRACT BALANCE SHEET

10

FOR THE LAST 2 YEARS (Rs. Lakhs) PARTICULAR Sources of funds

Shareholders funds Capital Reserve and surplus Loan funds Secured loans Unsecured loans Deferred tax liability Foreign currency monetary item translation difference

2008-09
13303.42 334086.48 30441.33 165373.06 26343.69 384.11

2009-10
13303.42 353572.39 71156.68 149232.50 38453.69 1245.01

2010-11
13303.42 382992.79 118229.75 138596.73 44388.69 _

TOTAL Application of fund

Fixed asset Gross block Less Depreciation Net block Capital work-in-progress Investments

569932.09

632128.52

706504.05

495327.22 155415.59 339911.63 99828.94 26355.71

601863.37 176907.45 424955.92 56146.97 32615.49

669188.87 205809.69 463379.18 35796.61 122999.68

Current assets, loans & advances

inventories Sundry debtors Cash & bank balances Loans & advances 133001.44 95797.42 8808.36 78954.35 163824.37 102206.15 51892.05 96046.23 220890.34 118521.33 17952.72 79360.14 11

Less Current

liabilities & 186886.41 26808.17 102866.99 968.82 569932.09 259206.57 36869.15 117892.71 517.43 632128.52 303794.77 49032.63 83897.13 431.45 706504.05

provisions Liabilities Provision Net current assets Miscellaneous expenditure TOAL

ABSTRACT OF PROFIT&LOSS A/C

12

FOR LAST 2 YEARS

PARTICULAR INCOME Sales and services Less: Excise duty OTHER INCOME TOTAL EXPENDITURE Manufacturing and other expenses Depreciation, amortization And impairment Financial expenses PROFIT BEFORE EXCEPTIONAL ITEM EXCEPTIONAL ITEM Voluntary retirement scheme Compensation amortised PROFIT BEFORE TAX provision for taxation current tax Deferred tax Fringe benefit tax PROFIT AFTER TAX Excess provision written back Dividend Corporate dividend tax Balance profit from last year Transfer from: Debenture redemption Reserve General reserve TOTAL 31-3-09 6,66,664.01 68,556.64 4,962.28 6,03,069.65 5,51,163.86 17,841.42 11,870.87 22,193.50 1,348.87 20,844.63 1,245.00 600.00 18,999.63 22.05 3.75 50,227.38 (2,958.33) (2,500.00) 63,794.48 (RS IN Lakhs) 31-3-10 31-3-2011 7,87,259.74 62,788.69 7,044.54 7,31,515.59 6,48,187.13 20,410.79 8,113.04 54,804.63 327.15 54,477.48 12,110.00 42,367.48 48,230.19 416.67 (10,000.00) 81,014.34 12,09,360.68 97,589.78 1,533.43 11,13,304.33 9,90,015.16 26,743.10 16,366.14 80,189.93 80,189.93 11,115.00 5,935.00 63,129.93 57,744.98 (5666.66) (10,000.00) 1,06,041.57 13

Proposed dividend Corporate dividend tax thereon Balance profit carried to B/S Earning per share

13,303.38 2,260.91 48,230,19 1.43

19,955.07 3,314.29 57,744.98 3.18

26,606.77 4,316.28 75,118.52 4.75

BASIC ACCOUNTING POLICIES

14

& NOTES TO ACCOUNT

Basic Accounting Policies The financial statement have been prepared to comply in all material respects with the notified accounting standard by companies accounting standard rules, 2006 and the relevant provision of the companies act, 156. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the company and are consistent with those used in previous year

(1) ACCOUNTING CONVENTION:The financial statements are prepared under the historical cost convention, on an accrual basis and in accordance with the applicable accounting standard. (2)FIXED ASSETS:Fixed assets are stated cost. Cost comprises of the purchase pride and all other attributable costs for bringing the assets to its working condition for its intended use. (3)DEPRECIATION:Depreciation on fixed assets other than intangible assets is provided on written down value method in accordance with the rates, prescribed in schedule XIV to the companies Act, 1956.Individual assets acquired for less than RS.9895/- are entirely depreciated in the year of acquisition. Depreciation on fixed assets added/disposed off during rear has been provided on pro-rata basis. Lease premium and related costs are amortized over the lease period. (4)EXPENDITURE DURING CONSTRUCTION PERIOD:Expenditure during construction period are include under capital work-in-progress and the same are allocated to the respective fixed assets on the completion of construction

15

(5)FOREIGN CURRENCY TRANSACTION:Monetary assets and liabilities related to foreign currency transactions remaining un settled at the end of the year, are restated at the closing rate/forward rates as applicable. (6)INVENTORIES:Inventories are valued of cost and estimated net realizable value (a) Raw materials, Packing materials, Stores and Spares are valued at weighted average cost method. (b) The cost of finished goods and work-in-progress includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition. (7)INVENSTMENT:Long-term investments are stated at cost after deducting provision, if any, for permanent diminution in the value of investment Current investments are stated at lower of cost and market.

NOTES TO ACCOUNTS
16

 Notes to Accounts 1. Share Capital 2. Fixed Assets 3. Loans and Advances include 4. Manufacturing and Other Expenses 5. Contracts on Capital Account 6. Contingent Liabilities 7. Earning in Foreign Exchange 8. Earnings Per Share 9. Deferred Taxes

17

POINTS RELATED TO FINANCE AND ACCOUNT FROM DIRECTORS AND AUDITORS REPORT Point related to Finance and Account from Directors Report Financial and operational performance Dividend Transfer to General Reserves Transfer to investor Education and protection fund Management discussion and analysis Directors Particulars of Employees Corporate Governance Auditor Conservation of Energy, Technology Absorption, Foreign Exchange Earning and outgo Environmental Protection and Occupational Health and Safety Policy Directors responsibility Statement Acknowledgement Point related to Finance and Account from Auditor Report

18

 In their opinion, proper books of account required by law have been kept by the company so far as appear from their examination of such books. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in the agreement with the books of the account. In their opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standard referred to in sub-section (3C) of section 211 of the Companies Act, 1956. MARKET VALUE OF EQUITY AS ON THE DATE The market value of Equity share of FAG Bearing India Limited as on date 18th January, 2011 is as under: Bombay Stock Exchange (BSE) Price: 23.90 Changes: -0.40 (-1.66%) High Price: 24.00 Low Price: 23.40

National Stock Exchange (NSE) Price: 23.65 Changes: -0.40 (-1.66%) High Price: 24.00
19

Low Price: 23.40

MEANING OF RATIO ANALYSIS

Ratio is financial form should the comparison between two financial terms". It relationship between various related items in these financial statements is established, they can provide useful clues to judge accurately the financial health and ability of business to maximize the profit. This relationship between related items of financial is thus, one number expressed in form of return on paid up capital the net profit of the business is dividend by the paid up share capital. The figure so obtain is the ratio. It the same is multiplied by 100 a percentage rate of return on paid up capital is obtained

EXPRETION:1. In the form of percentage 2. In the form of proportion of the value 3. In the form of number of times 20

IMPORTANCE OF RATIO ANALYSIS:In application to studying the rupee amount shown in the financial statements, relationships between different items may be established by computing various ratios. The relation between two related items of financial statement is known as Ratio. A ratio is thus, one number expressed in terms of other Ratios are particularly useful in comparing one years performance with other years, as well as one companys performance with anothers. In many cases the average ratios relating to companies in particular industries are available, and an individual companys ratio may be compared with such an average. Ratios help to make qualitative judgments depending upon the calculations made which are quantitative judgments. The ratio analysis involves comparison for a useful interpretation of the financial statements. A single ratio in itself does not indicate favorable or unfavorable condition. It should be compare with some standard. Standard of comparison may decided by the company or firm itself. 21

It is helpful for another party as under. Creditors Bankers Financial statement Investors Share holders and management

UTILITY OF RATIO ANALYSIS:1) PROFITABILITY:Useful information about the trend of profitability is available from profitability ratios. The gross profit ratio, net profit ratio of return on investment give a good idea of the profitability of business. On the basis of these ratios, investors get an idea about the overall efficiency of business, the management gets an idea about the efficiency of managers and bank as well as other creditors draws useful conclusions about repaying capacity of the borrowers.

2) LIQUIDITY:In fact, the use of ratios was made initially to ascertain the liquidity of business. The current ratio, liquid ratio and acid test ratio will tell whether the business will be able to meet its current liabilities as and when they mature. Banks and other leaders will be able to conclude from 22

these ratios whether the firm will be able to pay regularly the interest & loan installments.

3) EFFICIENCY:The turnover ratios are excellent guides to measure the efficiency of managers. e.g. the stock turnover will indicate how efficiently the sale is being made, the debtors turnover will indicate the efficiency of collection department and assets turnover shows the efficiency with which the assets are used in business. All such ratios related to sales present a good picture of the success or otherwise of the business.

4) INTER FIRM COMPARISON:The absolute ratios of a firm are not of much use, unless they are compared with similar ratios of other firms belonging to the same industry. This is inter-firm comparison, which shows the strength and weakness of the firm as compared to other firms and will indicate corrective measures.

5) INDICATE TREND:The ratios of the last three to five years will indicate the trend in the respective fields. For example, the current ratios of a firm are lower than the industry average, but if the ratios of last five years show an improving trend, it is an encouraging trend. Reverse may also be true. A particular ratio of a company for one year may compare favorably with industry average but, of its trend shows a deteriorating position, if is not desirable. Only ratio analysis will provide this information. 6) USEFUL FOR BUDGETORY CONTROL:Regular budgetary reports are prepared in a business where the system of budgetary control is in use. If various ratios are presented in these 23

reports, if will give a fairly good idea about various aspect of financial position.

7) USE FOR DECISION MAKING:Ratio guide the management in making some of the importation show an unsatisfactory position, the management may decide to get additional liquid funds. Even for capital expenditure decisions, the ratio of return on investment will guide the management can be judged on the basis and efficiency of each department can thus be determined.

CALCULATION OF RATIO ANALYSIS

(A) PROFITABILITY RATIO:

(1)Gross Profit Ratio: It is the basic measure of Profitability of business. It expresses relationship between gross profits earned to net sales. Gross Profit Ratio=
Years Gross Profit (RS in laces) 2008-09 2009-10 2010-11 129751.64 160210.63 253234.17

x 100
Sales (RS in laces) 598107.37 724471.05 1111770.90 Gross Profit Ratio (In %) 21.69 % 22.11 % 22.78 % 24

1200000 1000000 800000 600000 400000 200000 0 2008-2009 2009-2010 2010-2011 SALES GP

Interpretation: This ratio shows the relationship between G.P and Sales.
This ratio shows profitability of the company from pure trading activity. The ratio is increase every day, so we can say. Company financial positions are good.

2)Net Profit Ratio: The net profit is obtained after charging operating Expenses, interest, depreciation and taxes to gross profit.

Net Profit Ratio=

x 100

25

Years

Net Profit (RS in laces)

Sales (RS in laces) 598107.37 724471.05 1111770.90

Net Profit Ratio (In %) 3.18 5.85 5.68

2008-2009 2009-2010 2010-2011

18999.63 42367.48 63129.93

Interpretation: The net profit ratio is considering loss than previous

year. It implies that proportion of administrative and selling expenses have rise considerably. This is not good for the company.

26

3)Operating Ratio:
It is a ratio that shows relationship between cost of goods sold plus operating expenses to sales. Operating expenses include administration, selling and distribution expenses.

Operating Ratio:
Years 2008-2009 2009-2010 2010-2011 Sales (RS in laces) 598107.37 724471.05 1111770.90 COGS (Rs in laces) 462770.4 559526.32 851623.4

x 100
Operating Exp Operating (RS in laces) Ratio (in %) 104022.49 94.76% 120250.87 93.83% 169979.39 91.89%

27

Interpretation: This ratio measures the proportion of an enterprise cost of sales and operating expenses in comparison to its sales lower is the better for the company

4) Expenses Ratio: For the purpose of the ascertaining relationship between operating expenses and net sales, expense ratios are computed. For example proportion of selling expense or administration expenses or finance expenses in relation to net sales is an expenses ratio. Operating Expenses Expense Ratio = ------------------------ x 100 Sales

Years 2008-2009

Sales (RS in lakhs) 598107.37

Operating expenses(RS in lakhs) 91226.28

Expenses ratio (In %) 15.25% 28

2009-2010 2010-2011

724471.05 1111770.90

111105.51 152435.98

15.34% 13.71%

Interpretation: Expenses ratio in 2011is decrease compare to the year 2009, 2010. So it is good for company because expenses ratio are very important for analysis the profitability of the firm.

5)Return on Capital Employed

Perhaps the most widely used ratio for measuring the profitability of any enterprise is return on Capital Employed. Profit is consider in relation to capital employed.

Net Profit (EBIT) Return on Capital Employed= ------------------------------- x 100 Capital Employed

29

Years

EBIT (RS in lakhs)

Capital Employed (RS in lakhs) 301419.27 542235.47 652691.24

ROCE (In %) 6.92% 7.10% 15%

2008-2009 2009-2010 2010-2011

20844.63 38505 97892.85

Interpretation: Profit of company increase in second year but it is less in third year which may be because of less stock turnover ratio in third year. As a result the company cannot get higher return on capital provider.

30

6)Return on Shareholder Fund Profit is earned in business for owners

and so they are naturally interested in return they get on their money invested in companys business.

Return on Shareholder Fund: Years Net Profit (RS in lakhs) 2008-2009 2009-2010 2010-2011 18999.63 42367.48 63129.93 Owner Fund (RS in lakhs) 347389.9 366875.8 396296.21

x 100 Return on Shareholder Fund (In %) 5.47 % 11.55 % 15.93%

31

Interpretation:
It shows the overall profitability of funds supplied by long term share holder taken together. It shows how much money left for sh.holder. 7) Return on equity share holder fund:It shows what percentage of profit is earned in the capital invested by ordinary shares holder the ratio is ordinary share holders. Return on equity share capital= P.A.T. - Pre. Dividend X 100 Equity share holder fund Shareholder fund Return on eq.sh/h (RS in lakhs) fund ratio (in %) 347389.9 5.47% 366875.81 11.55% 396296.21 15.93%

Years 2008-2009 2009-2010 2010-2011

PAT-PREF.DIV (RS in lakhs) 18999.63 42367.48 63129.93

32

Interpretation: It shows how much money left for company ownered. It is very important for the company

8) Earnings per Share: This ratio measures the profit available to

equity shareholder on per share basis. It is not the Actual amount paid to shareholder as dividend but is maximum.

Earnings per Share (EPS): profit available for eq.sh/h No. of eq.share

100

Years

Profit available for eq.sh/h (RS in lakhs) 18999.63 42367.48

No. of Equity Share (Rs in lakhs)

EPS (In RS)

2008-2009 2009-2010

13303.42 13303.42

1.43 RS 3.18RS 33

2010-2011

63129.93

13303.42

4.75RS

Interpretation: It shows comparison between loans fund. It low that

is suggest loan safe stable no advantages of trading on equity. It high suggests that loan fund is very high.

9) DIVIDEND PER SHARE:It shows the dividend per share which shareholders of the company get on their investment by the company declaration

DPS:

Proposed dividend 100 No. of eq.share

Years

Proposed

No. of share

DPS ratio 34

divi. (RS in lakhs) 2008-2009 2009-2010 2010-2011 13303.42 19955.07 26606.77

(Rs in lakhs)

(in RS)

13303.42 13303.42 13303.42

1 RS 1.50RS 2 RS

Interpretation: It is increases in every year. It shows that better for the company and also better for the share holder.

10)Price earning ratio: It shows the relationship between the market price of the share and the earnings per share P/E ratio: Market price of share EPS 35

Years 2008-2009 2009-2010 2010-2011

Market price of share 25.2 40.93 64.65

EPS 1.43 3.18 4.75

P/E ratio (in proportion) 17.62:1 12.87:1 13.61:1

Interpretation: the year 2008-2009 ratio is 17.62:1,which is dealing in 2009-2010 to 12.87:1 then after it is increase in 2010-2011 to 13.61:1 but,it is not good for the company.

B)LIQUIDITY RATIO: (11) CURRENT RATIO:This is the most widely used ratio shows the proportion of Current Assets to Current Liabilities. It is also known as Working Capital Ratio. This is a measure of Short Term financial strength of the business and shows whether the business will be able to meet its Current Liabilities as and when they mature 36

Current Ratio:
Years Current assets (RS in lakhs) 2008-2009 2009-2010 2010-2011 316561.57 413968.43 436724.53 Current liability (RS in lakhs) 213694.58 296075.72 353827.40 Current ratio (in proportion) 1.48:1 1.40:1 1.24:1

Interpretation:the ideal ratio is 2:1.current ratio is lower than ideal ratio. From 2008-2009 to 2010-2011 it is continuously decreasing. 12)Liquid Ratio To remove the defect of the current ratio, Liquid ratio is used. It variant of current which is designed to show the amount of funds available to meet payment.

37

Liquid Ratio: Years Liquid Assets (RS in lakhs) 2008-2009 2009-2010 2010-2011 183560.13 250144.43 215834.19 Liquid Liabilities (RS in lakhs) 213694.58 296075.72 352827.40 Liquid Ratio (in Proportion) 0.86:1 0.85:1 0.61:1

Interpretation: Ideally current ratio is 1:1 in this current ratio in the year2008 is very good and in the year of 2009 and 2010 is good but not best. 13)ACID TEST RATIO:The measure of absolute liquidity may be obtained by comparing only cash and bank as well as readily marketable securities with Liquid Liabilities. It is computed by dividing the value of Quick Assets by Liquid liabilities Quick Assets ACID TEST RATIO= -----------------------Liquid Liabilities 38

Years 2008-2009 2009-2010 2010-2011

Quick assets (Rs in lakhs) 8808.36 51892.05 17952.72

Liquid liab. (Rs in lakhs) 213694.58 296075.72 352827.40

Acid test ratio (in proportion) 0.04:1 0.18:1 0.05:1

Interpretation: In the ratio companys Cash, Bank and Investment is decreases in every year but the liquid liabilities is increase every year so that the position of the company is not good.

14)Proprietary Ratio The Ratio shows the proportion of proprietors funds to total assets employed in the business. The proprietors funds or shareholder equity consist of share capital of share capital and reserve.

Proprietary Ratio: 39

Years

Owner Funds (Rs in lakhs)

Total Assets (Rs in lakhs) 782657.85 927686.51 1058900

Proprietary Ratio (in %) 44.39 % 39.55% 37.43%

2008-2009 2009-2010 2010-2011

347389.90 36675.81 396296.21

Interpretation: In all the three years the ratio is very slowly increasing, so the burden of loan to trade on equity, but at same time Owners Funds are not utilized to purchased Total Assets. 15)DEBT EQUITY RATIO:40

This ratio is only another form of proprietary ratio establishes relationship between the outside long term liabilities and Owners Funds. It shows the proportion of long term Eternal Equities & Internal Equities i.e. proportion of funds by long term creditors and that provides by shareholder or proprietors Debt eq.ratio: long term debt 100 sh.h/fund

Years

Long term debt (Rs in lakhs)

Sh.h/fund (Rs in lakhs) 347389.90 366875.81 396296.21

Debt eq.ratio (in %) 8.76% 19.4% 29.83%

2008-2009 2009-2010 2010-2011

30441.33 71156.68 118229.75

Interpretation: This ratio is continuously increases it shows the business is not stable & the companies have advantages of trading on equity. 41

16) Capital gearing ratio: This ratio expresses the proportion of preference capital debenture and ordinary capital. In other words, it is ratio of fixed interest and dividend bearing capital to ordinary capital.

Capital gearing ratio: fixed interest bearing capital Ordinary capital

Years

Fixed int.bearing.capital (Rs in lakhs)

Ordinary capital (Rs in lakhs 13303.42 13303.42 13303.42

Capital gearing ratio (in times)

2008-2009 2009-2010 2010-2011

30441.33 71156.68 118229.75

2.29 5.35 8.89

42

Interpretation: This ratio establishes a relationship between equity capital including all reserves and undistributed profit & fixed cost bearing capital.

C)Turnover ratio:

17) Debtors turnover ratio: The ratio showers the number of days taken to collect the dues of credit sales. It shows the efficiency and otherwise of the collection policy of the enterprise.

Debtors turnover ratio = Debtors +Bills payable X 360

43

Credit sales

Years

Debtor (Rs lakhs) in

Bills payable (Rs in lakhs) 40706.5 2 50476.6 56853.3 7

Credit sales (Rs lakhs) in

Ratio (in days)

2008-2009 2009-2010 2010-2011

95797.42 102206.1 5 118521.3 3

598107.37 724471.05 1111770.9 0

82.16 75.87 56.79

Interpretation: Debtors continuosly increasing since last three years. It suggest no.of time within. Which company pay payment. This ratio is good for the company 44

18) CREDITORS RATIO:The Creditors Ratio gives us the number of days within which the amount due for credit Purchase is payment. Similarly the number of days within which we payment to our creditors for Credit Purchase is obtained from Creditors Velocity Creditors + B\P Creditors Ratio = ------------------------------- x 360 credit Purchase B/P (Rs in lakhs) 66124.93 76912.59 57901.55 Credit purchase (Rs lakhs) in 136.15 148.71 113.53 Ratio (in days)

Years

Creditors (Rs lakhs) in

2008-2009 2009-2010 2010-2011

111004.2 156175.2 212838.98

468355.73 564260.42 858536.73

45

Interpretation: It suggests no. of days within which company makes payment. This ratio is 2009-2010 is 148.71 days and in 2010-2011 is 113.53 days. It is goods for the company

19)Total Asset Turnover Ratio:

The funds used in business are employed in both Fixed Assets and Current Assets and Profit is earned with the help of both. Hence it would be useful to known the proportion of Total Assets to Sales.

Total Assets Turnover Ratio:

Years

Sales (Rs in lakhs)

Total assets (Rs in lakhs) 782657.85

Ratio (in times) 0.76 46

2008-2009

598107.73

2009-2010 2010-2011

724471.05 1111770.90

927686.51 1058900

0.78 1.05

Interpretation: This ratio is higher better for the business. The ratio of these company is continuously increasing. It is good for the company

20)Book Value Per Share

Book Value per Share:

47

This ratio measures the profit available to equity shareholder on per share basis. It is not the Actual amount paid to shareholder as dividend but is maximum.

Earning per Share (EPS): Net worth No of eq.share

Years 2008-2009 2009-2010 2010-2011

Net worth (Rs in lakhs) 347389.90 366875.81 396296.21

No. of Equity Share (Rs in lakhs) 13303.42 13303.42 13303.42

EPS (In Rs) 26.11 27.58 29.79

48

Interpretation: it shows that value per share this ratio is compare with market value of share if market value is lower the company safe.

LIMITATION OF RATIO ANALYSIS

1) Single year ratio have limited utility: 49

The utility of ratio computed from the financial statement of one year only is obviously limited.

2)

Other factor must be considered:

While comparing ratio of different firms, it must be remember that different firms follow different accountancy plans and policies.

3)

Lack of Standard Ratio:

There is practically no standard ratio against which the actual performance can be compared.

4)

Other factors Important:

Financial result of business depend upon a number of factor such as general economic condition and competition, local factor and the policy adopted by management.

5)

Ratio of two irrelevant Figures:

Ratio must be established between related matters. It is of no use if ratios are found between two figures.

50

COMMON SIZE OF BALANCE SHEET

particular source of funds share holder/fund Capital Reserve & surplus loans fund Secure loan Unsecure loan deferred liabi. tax 30441.33 165373.0 6 26343.69 384.11 569932.0 5.34 29.02 4.62 0.07 100 71156.68 149232.50 38453.69 1245.01 632128.52 11.26 23.71 6.08 0.2 100 118229.75 138596.73 44388.69 706504.05 51 13303.42 334086.4 8 2.33 58.62 13303.42 353572.39 2.10 55.93 13303.42 382992.79 1.88 54.2 20082009 % 20092010 % 20102011 %

16.73

19.62 6.28 100

foreigncurrenc y monetary item TOTAL

9 application fund fixed assets Gross block

less

of

495327.2 2 155415.5 9 339911.6 3 99828.94

86.91 27.27 39.64 17.52

61863.37 176907.45 424955.92 56146.97

95.21 27.98 67.23 8.88

669188.87 205809.69 463379 35796.61

94.72

depreciation Net block Capital work

29.13

65.59 5.07

in Progress investment CA.loans &advances Investment Sundry debtors Cash & bank Loans&advance s
less

26355.71

4.62

32615.49

5.16

122999.68

17.41

13301.44 95797.42 8808.36 78954.35

23.34 16.81 1.55 13.85

163824.37 102206.15 51892.05 96046.23

25.92 16.17 8.21 15.19

220890.34 118521.33 17952.72 791360.14

31.27

16.78 2.54

11.23

CL provision

& 186886.4 1 26808.17 102866.9 9 32.79 4.7 18.05 259206.57 36869.15 117892.71 41.01 5.83 18.65 303794.77 49032.63 83897.13

Current liability Provision Net assets current

42.00 6.94

11.87

52

miss.expenditure TOTAL

968.83 569932.0 9

0.17 100

517.43 632128.52

0.08 100

431.45 706504.05

0.06 100

COMMON SIZE OF PROFIT & LOSS A/C

Particular Sales
less

2008-2009 598107.37 462770.4 135336.97 31527.3 59698.98 12795.51 25729.85

% 100 77.37 22.63 5.27 9.98 2.14 4.3

2009-2010 704471.05 559526.22 164944.83 41299.04 69806.47 9145.56 39959.56

% 100 77.23 22.47 5.7 9.64 1.26 5.52

2010-2011 1111770.90 8516234 260147.5 51489.33 100940.65 17543.41 31765.45

% 100 76.60 23.40 4.63 9.08 1.58 2.86

COGS

Gross profit
less

s&d exp.
less

admi/exp.
less

finan.exp. Net profit

53

KEY RATIOS AND ITS COMPARISION WITH INDUSTRIES

Name of the ratio Gross profit Net profit Operating ratio Expenses ratio 2008-2009 21.69% 3.18% 94.70% 15.25% 2009-2010 22.11% 5.85% 93.83% 15.34% 2010-2011 22.78% 5.68% 91.89% 13.71% 54

Return on capital employed Return on sh/h/fund Return on eq.fund Earning per share Dividend per share Price earning Current ratio Liquidity ratio Acid test ratio Proprietory ratio Debt eq.ratio Capital gearing Debtors ratio Creditors ratio Total assets ratio

6.92% 5.47% 5.47% 1.43 rs 1 rs 17.62:1 1.48:1 0.86:1 0.04:1 44.39% 8.76% 2.29:1 82.16 days 136.15 days 0.76 times

7.10% 11.55% 11.55% 3.18 rs 1.50 rs 12.87:1 1.40:1 0.85:1 0.18:1 39.55% 19.4% 5.35:1 75.87 days 148.71 days 0.78 times

15% 15.93% 15.93% 4.75 rs 2 rs 13.61:1 1.24:1 0.61:1 0.05:1 37.43% 29.83% 8.89:1 56.79 days 113.53 days 1.05 times

55

CONCLUSION

As per this finance report I conclude that the company is doing excellent work, I am very thankful to get a project of ASHOK LEYLAND PVT LTD. And definitely prove benefits this project. The financial position of the company is very good. And companys social responsibility is very good. The company is making profit since many years. And company is good for the share holder because company is to give good dividend.

56

BIBLOGRAPHY
three years of balance sheet

WWW.ASHOKLEYLAND.COM

Website:WWW.MONEY.CONTROL.COM

times of India

economic times

57

 annual report

58

DECLARATION
I hereby declare that the grand project title ASHOK LEYLAND PVT LTD is original to the best of our knowledge and has not been published elsewhere. This is for the purpose of partial fulfillment of Gujarat University requirements for the awards of the degree of the Bachelor of Business Administration.

Signature: BHALODIYA KISHAN R. Roll no.:- 13 Class: - S.Y. B.B.A. Division: - A

59