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M.I.M-KALAMB-WALCHANDNAGAR 2010-2012
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1.1 INTRODUCTION
MEANING OF RATIO:
A relationship be HI-TECH en various accounting figures, which are connected with each other, expressed in mathematical terms, is called accounting ratios. DEFINITION: 1)According to Kennedy and Macmillan, "The relationship of one item to another expressed in simple mathematical form is known as ratio." 2)Robert Anthony defines a ratio as "simply one number expressed in terms of another." Accounting ratios are very useful as they briefly summaries the result of detailed and complicated computations. Absolute figures are useful but they do not convey much meaning. In terms of accounting ratios, comparison of these related figures makes them meaningful. For example, profit shown by two-business concern is Rs. 50,000 and Rs. 1, 00,000. It is difficult to say which business concern is more efficient unless figures of capital investment or sales are also available. Analysis and interpretation of various accounting ratio gives a better understanding of the financial condition and performance of a business concern. A ratio is simple arithmetical expression of the relationship of one number to another. It may be defined as the indicated quotient of two mathematical expressions. According to Accountants Handbook by Wixon, Kell and Bedford, A ratio is an expression of the quantitative relationship bet HI-TECH en two number.
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condition and performance of a business concern. Simply, ratio means the comparison of one figure to other relevant figure or figures. According to Myers, Ratio analysis of financial statements is a study of relationship among various financial factors in a business as disclosed by a single set of statements and a study of trend of these factors as shown in a series of statements." Ratio analysis is the method or process by which the relationship of items or group of items in the financial statement are computed, determined and presented.
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Vertical analysis- the comparison of balance sheet accounts either using ratios
or not to get use full information and draw use full consultation
Cross-selection analysis- ratio are used and compared between several firms
of the same industry in other to draw conclusion about and entitys profitability and financial performance
Inter firm analysis- can be categorized under cross sectional as the analysis is
done by using some basic ratios of the industry in which the firm under analysis belongs to ( and specifically the average of all the firm of the industry ) as bench mark or basis for our firms overall performance evaluations
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1.3COMPANY PROFILE
INTRODUCTION
HI-TECH Engineering Corporation India Private limited is a well known name in field of Turnkey sugar plant, Boilers with co generation and turnkey switchyards.
With a team of more than 125 skillful qualified and experienced professionals and 350 skilled labor force; HI-TECH ensures to deliver the highest quality and optimum satisfaction of client. HI-TECH designs, manufactures and executes the turnkey sugar plants including cane mills, boilers with cogeneration and turnkey switchyards. Now HI-TECH are also exporting sugar plant equipments to Africa. HI-TECH are committed to provide quality product to client and ISO 9001-2008 certification ensures the quality and integrity in every equipment HI-TECH manufacture at our workshop. With the constant focus on design, QC and R&D, HI-TECH make sure that our clients get the best value and quality products. VISSION Considering the demand of manufacturing sector, wants to fulfill present and future market potential by providing quality Sugar and cogeneration plants on turnkey basis.
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MISSION Our Mission is to provide our customer cost effective quality product with the latest technology, thus satisfying every criteria. VALUES The values that define our culture are:
Innovation across the whole company. Be committed, reliable & credible. Create value products for our customers. Create value for all our stakeholders & customers.
PRODUCT RANGE Turnkey Sugar Plant HI-TECH provide turnkey Sugar Plants with Co-Generation. Presently, HI-TECH are designing and setting up a Sugar Plant with a capacity of 7500 TCD with 35 MW cogeneration along with four more project. Boiler & Cogeneration HI-TECH are executing boilers up to 180 TPH steam generating capacity at 87Kg/Sq.Cm, pressure 520 C Temperatures. HI-TECH can manufacture water tube & fire tube boilers, waste heat recovery boiler and fluidized bed combustion boilers. Turnkey Switch yards for Co-generation HI-TECH are turnkey supplier of Co-generation units and is executing 18 MW & 35 MW Co-generation unit. All electrical equipments and system required for the plant are developed in-house. Cane Mills HI-TECH can design, Manufacture, Supply and Erection & Commission various sizes of milling of High performance along with Pressure Feeders from 22 X 44 Mills to 45X 90 Mills. Coal & Baggage handling System HI-TECH have separate department for baggage, Coal & Ash handling in cogeneration projects.
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Authorized dealers of Sugar Cane harvester QUALITY POLICY HI-TECH at Engineering Corporation India Pvt. Ltd. as an Organization and as individuals, commit ourselves to supply Cost effective Quality Machineries with fairness & Honesty in Sugar Industries on Turn Key basis, Steam Generators and Cogeneration Plants, according to customer needs and provide services to their expectations through our experienced team, skills, and innovative technology. Quality and its implementation is an integral Part of HI-TECH. The Management is committed to ensure that everybody in the organization understands & implements the quality policy & contributes in continual improvement of the Quality Management System.
Quality Objectives
Customer Satisfaction index up to min 80%. Resolution of Customer Problems within 48 business hours. On time Project Execution. Zero accident at works centre. COLLABORATION Our Focused approach on latest technology with best
technical know how and expertise ensures the quality product delivery and optimum satisfaction of clients
BMA, Germany (Order to order basis) DINAMIC OIL, Italy DESMET Distillery Plants HI-TECH are the developers of the world famous Fire CAD Boiler Design
Software. Fire CAD suite of software was developed by its technical director Mr. Narasimha Patrudu.
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Sr. No.
NAME OF CLIENT
YEAR
DETAILS
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HI-TECH manufactures Turnkey Sugar Plant with Cogeneration. Now HI-TECH are manufacturing Sugar Plant having capacity of 7500 TCD with 35 MW Cogeneration. Currently HI-TECH are exporting sugar plants to Ethiopia. HI-TECH ADVANTAGE BOILING HOUSE & GENERAL PARAMETERS MANPOHI-TECHR REQUIREMENT ADVANTAGE HI-TECH 152 FOR A 1500 TO 4200 TCD PLANT REASON
AUTOMATION
REFERENCE: 1500 TCD RETURN ON INVESTMENT BREAK EVEN WITHIN 3 YEARS OF OPERATION PLANT IS IN OPERATION AT 3500 TCD USED FLASH VESSELS, 38% ON CANE CRUSHED OSV & OTHER STEAM SAVING DEVICES
STEAM CONSUMPTION
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22 KW PER TON OF CANE POHI-TECHR CONSUMPTION CRUSHED REFERENCE : ACHIEVED 3400 TCD CRUSHING WITH 3 MW TURBINE GENERATOR SET
LIFE OF PLANT
LONG LASTING
ROBUST DESIGN & BEST QUALITY MATERIAL AND WORKMANSHIP HI-TECH entered the industry by
modifying existing Sugar Plant by making significant changes to the Milling plant of the existing sugar plant.
HI-TECH have totally changed total mill drive system with unique Inline planetary gear box, Rope Coupling and ACVFD drive; Our planetary drive is highly energy efficient compact as HI-TECH ll as with very low maintenance operation of drive system with very less noise. This system is used first time in India.
Adding over HI-TECH used all inline planetary gearbox (Dynamic Oil Italy Make) for all carriers as HI-TECH ll as for feeder table and getting advantage of HI-TECH saving.
All pumps for magma, molasses and mesquite are screw pumps which are highly energy efficient as compared to Rota pump.
HI-TECH have used OSV (Overflow Surplus Valve) by that HI-TECH saved lot of steam consumption.
HI-TECH have done centralized Grease lubrication system BAL has achieved 3000Tonne crushing on cane in one day and 3MW HI-TECH when the plant equipped with all electrical drives; itself is record to crush more than 3000Tonnes using 3MW HI-TECH.
Entire Plant was completed in record time of 7 months. Boiling house is operating at 38%of steam.
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CANE MILLS
HI-TECH are capable to supply milling Plant from 500TCD to 12000 TCD. HI-TECH have already commissioned mill size 33X66 & 42X84. 36X78 & 45X90 is under execution
COMPARISN PARAMETERS
HI-TECH MILLING PLANT VERY LESS COMPARED TO CONVENTIONAL AS HI-TECHLL AS TANDOM WITH INDIAN PLANETARY
CONVENTIONAL
CIVIL COST
VERY HIGH
HIGH
AROUND 13 TON
30 TO 40 TON
AROUND 25 TON
95%
AROUND 70 %
AROUND 80 % HIGH SPACE REQUIREMENT DUE TO BIG GEAR BOX AND FORCED LUBRICATION SYSTEM 1200 LITRES
SPACE REQUIREMENT
LUBRICATION REQUIRED
400 LITRES
VERY HIGH
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VERY LESS AS MOVING PARTS ARE VERY LESS AND WITH BETTER METALLURGY COMPARED TO PIN DROP SILENCE 100 % RELIABLE AS EACH PART IS TAKEN CARE COMPLETELY WHILE INSTALLATION LEAST QUICK INSTALLATION IS POSSIBLE USER FRIENDLY
MANY SPARE PARTS REQUIRED DUE TO POOR METALLURGY OF MOVING PARTS HIGH
NOISE CREATED
VERY HIGH
RELIABILITY
RELIABLE
VERY LESS
VERY HIGH
HIGH
LONGEST
LONG
TEDIOUS PROCESS
TIME CONSUMING
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Inline Planetary GEAR BOX in Our Sugar Mills HI-TECH are Pioneers in India to Launch the Inline Planetary Gear Box instead of conventional Mill Gearing System for Mill Drive which saves the HI-TECH loss in transmission. Also it reduces the overall Cost of foundation for mills. HI-TECH ADVANTAGE MILLING PLANT Sr . N o.
NAME OF CLIENT
YE AR
DETAILS
2007 Sugar Plant 1500 TCD (Commissioned) 2008 Sugar Plant 4200 TCD with 18 MW Cogeneration (Commissioned) Sugar plant 2500 TCD with 8 MW Cogeneration (Under Commissioned) Sugar Plant 7500 TCD with 35 MW Cogeneration (Under Execution)
2008
4 Sai Krupa S. K. Ltd. Dadra Nagar HI-TECH Sahakari Khand Udhyog Shree Shivsagar Sugar & Agro Products Ltd.
2008
2009 Sugar Plant 2500 TCD (Under Execution) Sugar Plant 2500TCD With 12 MW Cogeneration (Under Execution)
7 Jakaraya Sugars Ltd. 8 Shreenath Mastoba S.K. Ltd., Pateshan Maharashtra Shetkari Sugars Ltd.
2009
2003 (Commissioned)
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EXPORT PROJECT
Sr. No. 1 NAME OF CLIENT Wonji Sugar Ltd (Ethiopia) Shoa Sugar Ltd (Ethiopia) YEAR DETAILS
2009
Rehabilitation
2009
Rehabilitation
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Our R & D Department is staffed with well qualified and skilful experienced person. They are engaged in various R & D activities like problem identification, problem recognition, and thinking of various alternatives for the solution and carry out design exercise to improve the product. Defect investigation and defect rectification are also part of R & D Department.
The R&D Department is also responsible to develop new equipments to meet specific need of user. The R&D Department uses the world class technology while caring our new technology.
Our R & D Dept. is developing product to solve agriculture problems and also developing product for defense purpose.
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Sr. No. 1
NAME OF CLIENT Baramati Agro Ltd. (1st Phased) Baramati Agro Ltd. (2nd Phased)
YEAR
DETAILS
2007 Sugar Plant 1500 TCD (Commissioned) Sugar Plant 4200 TCD with 18 MW Cogeneration (Commissioned)
2008
Sugar plant 2500 TCD with 7 MW 2008 Cogeneration (Under Commissioning) 2008 Sugar plant 7500 TCD with 35 MW Cogeneration (Under Execution) Sugar Plant 1250 TCD (Under Commissioning)
4 Sai Krupa S. K. Ltd. Dadra Nagar HI-TECH Sahakari Khand Udhyog Shree Shivsagar Sugar & Agro Products Ltd.
2007
2009 Sugar Plant 2500 TCD (Under Execution) Sugar Plant 2500TCD With 12 MW Cogeneration (Under Execution)
2009
2003 (Commissioned) 20TPH steam generation at 45Kg/Sq.Cm pressure and 4400C temp. For Distillery Unit. Sugar Plant 3500TCD with 20 MW Cogeneration
2010
10
2010
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Wonji Sugar Ltd (Ethiopia) 2009 Rehabilitation Shoa Sugar Ltd (Ethiopia) 2009 Rehabilitation
OUR ACHIEVEMENT IN 1st SUGAR PLANT HI-TECH entered the industry by modifying existing Sugar Plant by Making significant changes to the Milling plant of the existing sugar plant. HI-TECH have totally changed total mill drive system with unique Inline planetary gear box, Rope Coupling and ACVFD drive; Our planetary drive is highly energy efficient compact as HI-TECH ll as with very low maintenance operation of drive system with very less noise. This system is used first time in India. Adding over HI-TECH used all inline planetary gearbox (Dynamic Oil Italy Make) for all carriers as HI-TECH ll as for feeder table and getting advantage of HITECH saving. All pumps for magma, molasses and mesquite are screw pumps which are highly energy efficient as compared to Rota pump. HI-TECH have used OSV (Overflow Surplus Valve) by that HI-TECH saved lot of steam consumption. HI-TECH have done centralized Grease lubrication system BAL has achieved 3000Tonne crushing on cane in one day and 3MW HI-TECH when the plant equipped with all electrical drives; itself is record to crush more than 3000Tonnes using 3MW HI-TECH.
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BOARD OF DIRECTOR
N.PATHRUDN
(DIRECTOR)
RAJENDRA INGOWLE(DIRECTOR)
General Manager (Finance) kishor sir (kis Account Purchase M.G.GODBOLE Marketing Store (R.M & Central Design
Officers
Officers
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BASED ON USER
1] LIQUIDITY RATIO 2] LEVERAGE RATIO 3] ACTIVITY RATIO 4] PROFITABILITY RATIO 5] COVERAGE RATIO
1] RATIOS FOR SHORT TERM CREDITORS 2] RATIO FOR SHAREHOLDER 3] RATIOS FOR LONG TERM
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service ratios.
I] LIQUIDITY RATIO:
The liquidity ratio measures the firms liquidity and its ability to meet its maturing short term obligations. It is defined as the ability to realize value in money, the most liquid of assets. It refers to the ability to pay in cash, the obligations that are due. The quantitative aspects includes the quantum, structure and Utilizations of liquid assets and in the qualitative aspect, it is the ability to meet all present and potential demands on cash from any source in a manner that minimizes cost and maximizes the value of the firm.
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1) Current ratio:
Meaning: This ratio compares the current assets with the current liabilities. It is also known as working capital ratio or solvency ratio. It is expressed in the form of pure ratio. The current ratio 2:1 shows highly solvent position. Current ratio = Current assets Current liabilities
3) Cash ratio:
Meaning: This is also called as super quick ratio. This ratio considers only the absolute liquidity available with the firm. The cash & bank balance are the most liquid assets. The ideal cash ratio is taken as 1:2. It is calculated as follows
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Leverage ratios lay emphasis on long term financial prospects. In order to assess the long term financial soundness it is necessary to find out whether the organization is able to maintain or increase the market value of its shares. The long term financial stability of the firm may be considered as dependent upon its ability to meet all its liabilities, including those not currently payable.
4 ) Proprietary ratio: It is the ratio between proprietors fund and total assets. It indicates the strength of the funding of the company. A high ratio will definitely indicate high financial strength but a very high ratio will indicate inadequate utilization of external equities. Proprietary ratio = Proprietors funds Total assets
III] TURNOVER RATIOS: Assets management ratio measures how efficiently the firm employs its resources. These ratios are also called activity or turnover ratios which involve comparison between the level of sales and investment in various accounts. They are used to measure speed with which various accounts are converted into sales or cash.
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Working capital
Net Sales
Capital employed
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percentage of net sales. It measures the overall efficiency of all the functions of a business firm like production, administration, selling, financing, pricing, tax management etc. Net profit ratio = Net profit before interest & tax x 100 Sales
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1] LIQUIDITY POSITION: With the help of Ratio analysis conclusion can be drawn regarding the liquidity position of a firm.
2] LONG TERM SOLVENCY: Ratio analysis is equally useful for assessing the long-term financial viability of a firm.
3] OPERATING EFFICIENCY:
Yet another dimension of the useful of the ratio analysis, relevant from the viewpoint of management, is that it throws light on the degree of efficiency in management & utilization of its assets.
4] OVERALL PROFITABILITY:
Unlike the outsides parties, which are interested in one aspect of the financial position of a firm, the management is constantly concerned about overall profitability of the enterprise.
6] TREND ANALYSIS:
Finally, ratio analysis enables a firm to take the time dimension into account.
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2.8 PURPOSE OF RATIO ANLYSIS: 1] To identify aspects of a businesss performance to aid decision making. 2] Quantitative process may need to be supplemented by qualitative Factors to get a complete picture. 3] 5 main areas: Liquidity the ability of the firm to pay its way. Investment/shareholders information to enable decisions to be made on the extent of the risk and the earning potential of a business investment. Gearing information on the relationship between the exposure of the business to loans as opposed to share capital. Profitability how effective the firm is at generating profits given sales and or its capital assets. Financial the rate at which the company sells its stock and the efficiency with which it uses its assets.
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2.9. ROLE OF RATIO ANALYSIS: It is true that the technique of ratio analysis is not a creative technique in the sense that it uses the same figure & information, which is already appearing in the financial statement. At the same time, it is true that what can be achieved by the technique of ratio analysis cannot be achieved by the mere preparation of financial statement. Ratio analysis helps to appraise the firm in terms of their profitability & efficiency of performance, either individually or in relation to those of other firms in the same industry. The process of this appraisal is not complete until the ratio so computed can be compared with something, as the ratio all by them do not mean anything. This comparison may be in the form of intra firm comparison, inter firm comparison or comparison with standard ratios. Ratio analysis is one of the best possible techniques available to the management to impart the basic functions like planning & control. As the future is closely related to the immediate past, ratio calculated on the basis of historical financial statements may be of good assistance to predict the future.
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Questions are central to research. If there is no question, then the answer is off no use. Research is focused on relevant, useful and important questions. Without a question, research has no focus, drive or purpose.
A research design was prepared as under: The analysis is done on the subject Interpretation of the financial statement by using ratio analysis technique. The analysis is done in the firm HI-TECH.. The analysis is done with the help for primary and secondary data. The purpose of the project is to study the various financial ratios.
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Schedules and Formal / Informal Information: 1] Information relating to the project was collected during formal & informal discussions with the HOD (Finance). 2] Quires arising in due course of the project brought into the notice of concerned authority & necessary explanation & solutions are adapted.
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1] Annual Report
Majority of information gathered from data exhibited in the annual reports of the company. These include annual reports of the year 2006-07, 2007-08 & 2009-10.
2] Reference Books:
Theory relating to the subject matter and various concepts taken up from various financial reference books.
3] HI-TECH sites:
The information relating to ratio analysis taken up from HI-TECH sites.
Research Design:
It includes following steps: 1] Calculations of Ratios. 2] Analyzing & Interpreting the Ratios. 3] Research Findings. 4] Recommendations. 5] Conclusion.
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7.24
3.09
3.5
.98
INTERPRETATION: A higher current ratio has better liquidity. A standard norm of current ratio is 2:1. Since last 3 years companys current assets are more than its current liabilities. So that the company is assuring to pay its current maturing debt as and when it becomes due. Ratio is satisfactory to the company according to its characteristics. It is good sign that company is keeping sufficient margin of safety.
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2. QUICK/ ACID TEST RATIO: Quick Ratio= Quick Assets /Quick Labilits
2007-08
2008-09
2009-10
2010-11
RATIO
2 1.5 1 0.5 0 2007-08 2008-09 YEAR 2009-10 2010-11 QUICK ACID TEST RATIO
INTERPRETATION: It is widely accepted as the best available test of the liquidity position of the firm. Generally speaking, a liquid ratio 1:1 is considered satisfactory as a firm can easily meets all current claims. The ratio of 2006-07 is 3.09 and in 2007-08 and 2008-09 the ratio is near to ideal. The ratio of 2009-10 is .41 is very low because of excess current liability
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3. FIXED ASSET TURNOVER RATIO: Sales Fixed Assets Turnover Ratio = Fixed Assets
INTERPRETATION: A high ratio indicates efficient utilization of fixed assets in generating sales. And low ratio indicates low sales per rupee of fixed asset.
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INTERPREATATION:The graph shows that Hi-Tec industries Ltd Baramati is increasing current assets turnover ratio year 2006-07&2007-08.In year 2008-09&&2009-10 the CATR is decreasing . It means that they achieve maximum sales by investing minimum current assets .
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Particulars
2007-08 645,057,254
2008-09 600,889,091
2009-10 422,137,997
Net Sales Working capital Ratio(in times) 174,743,395 3.69 84,151,449 7.14 68,621,299 6.15
INTERPRETATION: This ratio compares the net sales with net working capital of company. The indication given by this ratio is the number of times working capital is turned around in a particular period. The higher this ratio, the better is the utilization of working capital and also indication of low working capital.
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6. INVENTORY TURNOVER RATIO: Net sales Inventory Turnover Ratio = Average Inventory
Particulars
2007-08
2008-09
2009-10
2010-11
Net Sales
INTERPRETATION: It measures how quickly inventory sold. A high inventory turnover ratio is better than a low ratio. A high ratio implies good inventory management. Yet, a very high ratio calls for a careful analysis. Very low level of inventory has serious implications.
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2010-11 462,020,245.68
21,749,963
32,178,140
21,364,846
175,035,859
12.14
15.29
2.63
INTERPRETATION: The creditors turnover ratio graph shows that in year 2006-07 Soma Textile and Industries Ltd, Baramati. is very high ratio it means delay in payment to suppliers. But 2009-10 it is very low it means creditors are paid promptly. In year 2007-08 and 2008-09 the ratio is good.
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Particulars Sales
2007-08 645,057,254
2008-09 600,889,091
2009-10 422,137,997
2010-11 552,839,754
664,596,760 .90
583,872,216 .72
455,866,866 1.21
INTERPRETATION: In case of Soma Textile & Industries Ltd,Baramati.ratio has increased in year 2006-07, 2007-08 & 2009-10.But except in 2008-09. High ratio indicates efficiency of the organization with which the capital is being utilized.
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9. TOTAL ASSET TURNOVER RATIO: Sales Total Assets Turnover Ratio = Total Assets
YEAR
INTERPRETATION: The total assets utilization is satisfactory, because high ratio indicates efficient utilization of total assets in generating sales.
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10. DEBTORS TURNOVER RATIO: Total Sales / Credit Sales Debtors Turnover Ratio = Average A/Cs Receivable
INTERPRETATION: A higher turnover ratio and shorter collection period, a better is the trade credit management and better is the liquidity of debtors, as short collection period and high turnover ratio imply prompt payment on the part of debtors. In short, high turnover is preferable.
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Particulars
Gross Profit
Sales
Ratio (%)
INTERPRETATION: The gross profit ratio is decreasing every year. so Soma Textile & Industries Ltd, Baramati .have to maintain it properly. But, the Average Industry ratio is 20% to 40%. So, ratios are satisfactory.
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12. NET PROFIT RATIO: Net Profit Ratio = Net Profit / Sales*100
INTERPRETATION: This ratio measures overall efficiency of all the functions of a business firm like production, administration, selling, financing, pricing, tax management etc. The higher ratio indicates better it is because it gives an idea of overall efficiency of the firm.
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13.CASH PROFIT RATIO: Cash profit Cash profit ratio = Sales Cash profit ratio = (Net profit+ non cash expenses/depreciation) Particulars 2007-08 2008-09 103,857,607 600,889,091 17.28 2009-10 176,710,700 422,137,997 41.86 2010-11 108,184,838 552,839,754 19.56 *100
11.33
INTERPRETATION: The cash profit ratio is increasing first three years i.e. 2006-07, 2007-08 & 2008-09.But then decreasing in year 2009-10.
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14. FIXED ASSET TO CAPITAL EMPLOYED: Fixed asset to capital employed = Fixed asset/capital employed *100
RATIO
INTERPRETATION: The above graph shows that fixed asset turnover ratio is increasing every year. So this ratio is good for Soma Textile & Industries Ltd, Baramati. Capital employed indicates the long term fund supplied by creditors and owners of the firm.
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PROFITABILITY RATIOS:
The Gross profit ratio decrease year-by-year due to increase in material & manufacturing cost. Operating performance of the company is satisfactory. Net profit of the company decreased increase in indirect expenses as compared to year 2005-06 & 2006-07.
LIQUIDITY RATIOS:
Companys current assets are more than its current liabilities. Company is keeping sufficient margin of safety.
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CONCLUSION: In this project financial statement of last 3 years has been compared & through the ratio analysis technique it is concluded that the company is doing excellent in its field year after year. The study is restricted to only financial statements. The companys business has recorded significant increase in sales & profit.
company. Also with the help of ratio analysis and past data management can taking corrective action regarding growth of business.
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CHAPTER-V SUGGESTIONS
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SUGGETIONS: In future company should expand their Business for increase in Profit. Gross profit of the company is low because of increase in raw material cost. Hence Company should purchase raw material in bulk quantity whenever cost is low. Company should make contract with vendors for a long period at fixed prices.
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LIMITATIONS OF RATIO ANALYSIS Ratio analysis has its limitations. These limitations are described below: 1. Ratios are calculated on the basis of past financial statements. They do not indicate future trends and they Comparison not possible if different firms adopt different accounting policies. 2. Ratio analysis becomes less effective due to price level changes. 3. Ratio may be misleading in the absence of absolute data. 4. Limited use of a single data. 5. Lack of proper standards. 6. False accounting data gives false ratio. 7. Ratios alone are not adequate for proper conclusions. 8. Effect of personal ability and bias of the analyst. 9. Limited Comparability. 10. Qualitative factors are ignored. 11. Effect of window-dressing. 12. Costly Technique.
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HI-TECH sites:
Annual Reports of HI-TECH engineering company ltd baramati. (Year 2006-07, 2007-08, 2008-09 2009-10)
WEBSITE:
1] www,universalteacher4u.com/cbse/xii.. 2] eg,Wikipedia.org/wiki/financial_ratio
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ANNEXURE
Schedule 2008 Rupees SOURCES OF FUNDS Head office a/c Reserves and surplus Total LOAN FUNDS Secured Loans Unsecured Loans 1 402,372,616 402,372,616 2 3 160,578,780 103,430,428 264,009,208 TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Accumulated Depreciation Net Block Capital work-in-progress CURRENT ASSETS,LOANS AND ADVANCES Inventories Sundry Debtors Cash & Bank Balances Loans,Advances & other current assets 666,381,824
5 6 7 8
M.I.M-KALAMB-WALCHANDNAGAR 2010-2012
LESS: CURRENT LIABILITIES AND PROVISIONS Liabilities Provisions Net Current Assets MISCELLEANEOUS EXPENDITURE (to the extent not return of or adjusted)
9 10
11
81,427,673
171,486,224
4,508,841
4,694,724
666,381,824 0
778,218,335
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HI-TECH ENGINEERING CO. LIMITED PRFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2008
Schedule INCOME Sales Interest Received Other income TOTAL EXPENDITURE Manufacturing & Other Expenses Interest Paid Depreciation 14 12 4
12 13
TOTAL PRIOR PERIOD ITEMS PROFIT BEFORE TAX Fringe Benefit Tax (Refer note 25 of Notes On Accounts) PROFIT/(LOSS) FOR THE YEAR PROFIT/(LOSS) TRANSFERRED TO HEAD OFFICE
678,089,883
650,727,029
45,195,592 178,947
15,741,299 196,964
45,374,539 45,374,539
15,544,335 15,544,335
NOTES TO ACCOUNTS
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Schedule SOURCES OF FUNDS Head office a/c Reserves and surplus Total LOAN FUNDS Secured Loans Unsecured Loans 1
2009-10 Rupees
2008-09 Rupees
310,166,589 310,166,589
2 3
TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Accumulated Depreciation Net Block Capital work-in-progress CURRENT ASSETS,LOANS AND ADVANCES Inventories Sundry Debtors Cash & Bank Balances Loans, Advances & other current assets 4
453,769,953
585,841,558
5 6 7 8
9 10
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Net Current Assets MISCELLEANEOUS EXPENDITURE (Refer Note no.08 in Notes to accounts)
11
6,425,699
66,081,802 4,508,841
453,769,863
585,841,559
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