New Financial Performance

8/2/2019 New Financial Performance

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INTRODUCTIONTOTHEORGANIZATIONM/SV.RTextilesPrivateLimitedwaspromotedinSeptember1956asaPrivatecompanybylateMr.V.RangasamyNaidu(GrandFatherofMr.V.Radhakrishnan)andhisfamilymembersatpresentMr.V.RadhakrishnanistheManagingDirectorandalsoChairmanoftheBoardofDirectors.Thecompanyisaspinningmillmanufacturingcottonyarn.ThemillislocateatNallur-PunjaiPuliampatti638459,sathyTaluk,ErodeDistrictabout45Kmsawayfromcoimbatore.Thecompanycommencedisoperationsin1959withabout3000spindlesoveraperiodoftime.Theinstalledcapacityhasbeenincreasedto25,232asondate.

MANAGEMENT

TheboardofdirectorsconsistsoffourdirectorsMr.V.Radhakrishnanage71years,istheChairmancumManagingdirector.Mr.V.RadhakrishnanisawellrespectedindustrialistinCoimbatoreandhasbeenassociatedwiththecottonspinningindustryforabout3decadesAstheManagingDirectorofV.RTextilesPrivateLimitedforthepast39yearsMr.Radhakrishnanwasinstrumentinturningthecompanyintoaviableandprofitablecompanywithaninstalledcapacityof25,232spindles

1.1INTRODUCTIONOFSTUDY

ThisprojectworkhadbeenundertakenatV.R.TextilesPvtLtd.,withtheobject

iveofanalyzingthefinancialperformanceofV.R.TextilesPvtLtd.Itwasdonetofindouthowfundswerebeingutilized

ThefollowingmethodsweretoolsandTechniquesoffinancialstatementanalysis

1.RatioAnalysis2.ComparativeBalanceSheet3.Fundflowstatement4.Commonsizestatementanalysis

1RATIOANALYSIS

Thisisawidelyusedtooloffinancialanalysis.Itisdefinedasthesystematiccaseofratiotointerpretthefinancialstatementsothatthestrengthandweaknessofafirmaswellasitishistoricalperformanceandfinancialconditionstobedetermined


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2COMPARATIVEBALANCESHEETS

Thecomparativebalancesheetanalysisisthestudyofthesameitems,groupofitemsandiscomputedintwoormorebalancesheetsofthesamebusinessenterprisesondifferentdates.Thechangesinperiodicbalancesheetitemsreflecttheconductofabusiness.Thechangescanbeobservedbycomparisonofthebalancesheetatthebeginningandattheendoftheperiodandthesechangescanhelpinforminganopinionabouttheprogramsofanenterprise

3.FUNDFLOWSTATEMENTS

Fundsflowstatementisamethodbywhichwestudychangesinthefinancialpositionofabusinessenterprisebetweenbeginningandendingfinancialstatementdates.itisastatementshowingsourcesandapplicationofthefundsforaperiodoftime.Basedontheabove3methodsthefinancialpositionofthecompanyhadbeenanalyzedandsuitablesuggestionshadbeengivenbytheresearcher

4.COMMONSIZEFINANCIALSTATEMENTSANALYSIS

Whenthismethodispursuedtheincomestatementexhibitscallexpensesitemsorgroupofexpensesitemsaspercentageofnetsalesnetsalesaretakenat100%similarlyendindividualassetsandliabilitiesrespectively

5.TRENDANALYSISORTRENDPERCENTAGES

Theanalysisinvolvescomparisonsofratiosofafirmovertimespresentrationarecompareswithpastratioofthechangeintheperformanceimprovementdeteriorationandconsistencyovertheyears

1.2.PROFILEOFTHECOMPANY

NameandAddressoftheCompany:V.R.TextilesPrivateLimited,384,SathyMainRoad,Nallur,PunjaiPuliampatti638459


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SathyTaluk,ErodeDistrict.PhoneNo04295-260731,267081Fax:04295-267595Email:[email protected]:384,SathyMainRoad,Nallur,PunjaiPuliampatti638459SathyTaluk,ErodeDistrict.PhoneNo04295-260731,267081Fax:04295-267595Email:[email protected]:PrivateLimitedCompanyDateofIncorporation:19.09.1956IndustrySegment:TextilesProductsManufactured:CottonYarnInstalledCapacity:25,232RingSpindlesAuthorisedCapital:Rs300Lakhs(30lakhsshareofRs10each)PaidupCapital:Rs150Lakhs(15lakhsshareofRs10each)

NameoftheDirectors1.Mr.V.Radhakrishnan,Chairman&ManagingDirector,Anugraha,442AvinashiRoad,Peelamedu,Coimbatore641004.

2.Mrs..VimalaRadhakrishnan,Director,ParkResidence,Coimbatore.-6410043.Mr.R.Santosh,Director,

ParkResidence,Coimbatore.-6410044.Mr.R.BabaChandrasekharDirector,442A,AvinashiRoad,Peelamedu,Coimbatore641004.


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1.3.OBJECTIVESOFTHESTUDY

Thefollowingaretheobjectivesofthestudy

1.Themainobjectiveofthisprojectistostudythefinancialperformanceofthecompany2.Tofindouttheliquidity,Turnoverandsolvencypositionofthecompany3.Toknowthesourcesandapplicationsofthefunds

4.Tofindouttheworkingcapitalpositionofthecompanyandchangesofworkingcapitalinperiodofstudy5.Tocomparefinancialstatementofthestudyperiod6.Tomeasurefinancialoperationsofthecompany.

________________1.4.LIMITATIONSOFTHESTUDY

1.Thefinancialdatarequiredforthepresentstudyhadbeenobtainedfromseco

ndarysourceViz.,Publisedaccounts(Profit&LossA/CandBalancesheet)andthestudyislimitedtotheavailableaccountsonly.2.Ratiosaremarkedoutonthebasisofmoneyvalueonly.Theyarenotoftherealvalue3.Limitationsofratioanalysispertainstothisstudyalso4.Thisstudyislimitedonlytoaperiodoffiveyears


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RESEARCHMETHODOLOGY

2.1SOURCEOFDATA

Forthepurposeofthisstudyonlythesecondarydataisused.PublishedannualReportsofthecompanyfortherelevantperiodshadbeenusedextensivelyannualreportscontainingtheresultsofpastperformancehadbeenconsideredasthemostimportantandreliablesourceoffinancialdataoftheconcernfromwhichreportshadbeentaken.

2.2TOOLSUSED

Thefollowingtoolswereusedforthisprojectwork

1.Ratioanalysis2.ComparativeBalancesheet3.FundsFlowStatement4.CommonsizeBalancesheetByusingtheabovetoolsthefinancialperformanceareanalyzed.

NEEDFORTHESTUDY

ThemainobjectiveofthisstudyistofindoutthefinancialperformanceofV.R.TextilesPrivateLimited.

2.3PERIODOFSTUDY

Ratios,ComparativeBalanceSheet,CommonsizeBalanceSheet,andFundflowStatementanalysishadbeenanalyzedfortwomonthsfrom1.12.2010to31.01.2011


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2.4ANALYSISOFFINANCIALSTATEMENTS

INTRODUCTIONPresentationoffinancialstatementsisimportantsincetheirverypurposeistoconveyinformation,generallytothesewhodonothaveagoodacquaintancewithaccountingfinancialstatementsconsistofbalancesheetorpositionstatements,profitandlossorincomestatementsandfundflowstatements.ThefinancialstatementsarepreparedunderthehistoricalcostconventioninaccordancewithapplicablepresentationrequirementsofthecompaniesACT1956

Analysisoffinancialstatementsconsistsofrelationshipandtrendstodeterminewhetherornotthefinancialpositionandresultsofseparationsaswellasthefinancialprogressofthecompanyaresatisfactoryorunsatisfactory.Variousanalyticalmethodscanbeusedtoascertainormeasuretherelationshipamongthefinancialstatements.Themethodwhichtheresearcherhadadoptedforanalyzingfinancialstatementhasratioanalysis

AccordingtoAmericanInstituteofAccounts,Financialstatementreflec

tacombinationof

1.Recordedfacts2.AccountingConventions3.Postulatesorassumptionsmadetoimplementconventionalprocedures4.Personaljudgmentsusedintheapplicationofconventionsandpostulates

ANALYSISANDINTERPRETATION

TheobjectiveofthisstudyistoanalysistheFINANCIALPERFORMANCEOFV.R.TEXTILESPRIVATELIMITED.,Inordertoanalysisandinterpretthefinancialstatementsthefollowingmethodswereused

1RATIOANALYSIS

Tofindouttheliquiditysolvencyandprofitabilitypositionandoperatingefficiencyofthecompanyratioanalysishasbeenused

2.COMPARATIVEBALANCESHEET

Thecomparativebalancesheethasbeenusedforcomparingassets&liabilitiesandtofindoutifthereisanyincreaseordecreaseintheseitemsondifferentbalancesheets

3.FUNDFLOWSTATEMENT


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Thefundsflowstatementhasbeenusedtofindoutthesourceandapplicationsoffunds

4.COMMONSIZEBALANCESHEET

Thecommonstatementhasbeenusedtofindoutthepercentagefiguresoffinancialstatements

3.1RATIOANALYSIS

Aratioissimplearithmeticexpressionoftherelationshipofonenumbertoanother.AccordingtoAccountantsHandbookbyWixon,KellandBedfordaratioisanexpressionofthequantitativerelationshipbetweentwonumbers

Ratioanalysisisatechniqueusedforanalyzingandinterpretingthefinancialstatements

Theratiosareclassifiedas:

1Liquidityratios2.ActivityorTurnoverratios3.Longtermsolvencyratios4.ProfitabilityRatios5.OverallProfitabilityratios


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I.LIQUIDITYRATIOS

Liquidityreferstotheabilityofaconcerntomeetitscurrentobligations.Liquidityratiosarehelpfultoknowwhethertheliquidityissufficientornot.Tomeasuretheliquidityofafirmthefollowingratioscanbecalculated.

1CurrentRatio2Quickorliquidratio3.Absoluteliquidratio

1.CURRENTRATIO

Currentratioisdefinedastherelationshipbetweencurrentassetsandcurrentliabilities.Theoptimalcurrentratio2:1.Theratioisageneralmeasureofliquidityposition.Itismostwidelyusedforashorttermanalysisofthefinancialpositionshorttermsolvencyofafirm

CurrentassetsCurrentAsset=--------------------Currentliabilities

TABLENO1

TABLESHOWINGTHECURRENTRATIOFORTHEYEAR2005-2010

YEARC.AC.LRATIO2005-200619,01,50,68619,47,36,0150.972006-200713,21,24,526


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12,18,01,5781.082007-200814,80,01,4019,67,45,6511.522008-200921,16,69,2132,87,86,0487.352009-201029,14,54,4834,00,87,6677.27

INTERPRETATION

Thecurrentratiotableshowstheyearof2005-2006theratiowas0.97whichislowerthanthestandardnormsof2:1thecurrentassets0.97timesofcurrentliabilities,sothecurrentassetsandcurrentliabilitiesbothareequalposition,sothefinancialyearof2005-2006theliquiditypositionofthecompanywerenotsatisfied

TheFinancialyear2006-2007and2007-2008theliquiditypositionwereincreasedforsmallproportionate.Thefinancialyearof2008-2009and20092010thecurrentratiowas7.35and7.25theratiosindicatesthegoodliquiditypositionofthecompanythecurrentassetsmorethan3timesofcurrentliabilitiessothecompanymaintainthegoodliquiditypositionforlasttwofinancialyears


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2.QUICK(OR)ACIDTESTRATIO

Quickratio,alsoknownasAcidTestorliquidityratioisamorerigoroustestofliquiditythanthecurrentratio.ThetermliquidityreferstotheabilityofafirmtopayItsshort-termobligationsasandwhentheybecomedue.Quickratiomaybedefinedastherelationshipbetweenquick/liquidassetsandcurrentorliquidliabilitiesthequickratiocanbecalculatedbydividingthetotalofquickassetsbytotalcurrentliabilities,thus

QuickorLiquidAssets

Quick/LquidorAcidTestRatio=------------------------------------CurrentLiabilities

TABLENO-2

THEFOLLOWINGTABLESHOWINGTHELIQUIDRATIOFOR


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THEYEAR2005-2010

YEARLIQUIDASSETSCURRENTLIABILITIESRATIO2005-20064,10,05,05919,47,36,0150.212006-20074,51,15,42112,18,01,5780.372007-20085,10,68,6589,67,45,6510.522008-20097,89,26,3932,87,86,0482.742009-2010

6,66,09,2274,00,87,6671.66

INTERPRETATION

Thequickratiotableshowsthatintheyearof2005-2006,2006-2007,2007-2008theratiowas0.21,0.37,and0.52thisshowsadeclinetrendintheliquidlyratio.Whichisduetodecreaseincashbalance.However,ithasbeenmanagedinthelasttwoyearsto2.74intheyearof2008-2009and1.66fortheyearof2009-2010itimpliesthatliquidassetsareproperlymanagedinthelasttwoyears

anditissuggestedthat,thecompanyshouldcontinuethesameinfuture

LIQUIDRATIO


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3.ABSOLUTELIQUIDRATIO

Absoluteliquidassetsincludecashinhandandcashatbankandmarketablesecuritiesortemporaryinvestments.Theacceptablenormforthisratiois0.5:1

________________________________________________

AbsoluteLiquidAssets________________________________AbsoluteliquidRatio=-----------------------------________________________________CurrentLiabilities________________


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TABLENO-3

THEFOLLOWINGTABLESHOWINGTHEABSOLUTELIQUIDRATIOFORTHEYEAR2005-2010

YEAR

ABSOLUTELIQUIDASSETSCURRENTLIABILITIESRATIO2005-200614,15,48019,47,36,015

0.072006-200745,46,82812,18,01,5780.032007-200824,94,2319,67,45,6510.022008-20091,51,05,3252,87,86,0480.52

2009-201077,24,8734,00,87,6670.19

INTERPRETATION

Theabsoluteliquidratiofortheyearof2005to2006,2006-2007and2007-2008vise,0.07,0.02,and0.03theseperiodsthecashandbankbalancenotsatisfact


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ory.Thenextyearof2008-2009ratioof0.52cashandbankbalancecompanytoachievesatisfactoryleveland2009-2010ratioof0.19againthecashandbankbalancedecreasethestandardleveltheabsoluteliquidratiowasnotsatisfied

IIACTIVITYRATIO


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Activityratiosmeasuretheefficiencyoreffectivenesswithwhichafirmmanagesitsresourcesorassets.Theseratiosarealsocalledturnoverratiosbecausetheyincitethespeedwithwhichassetsareconvertedorturnoverintosales.

1.InventoryTurnoverRatio2.DebtorsTurnOverRatio3.AveragecollectionPeriod4.FixedassetsTurnOverRatio5.WorkingCapitalTurnOverRatio6.CurrentAssetsTurnOverRatio

1.INVENTORYTURNOVERRATIO

Inventoryturnoverratioindicatestherateatwhichthefundsinvestedininventoriesareconvertedintosales.Itiscalculatedbydividingthe

salesbytheaverageinventory.Ahighinventoryturnoverratioindicatesbrisksales.Alowinventoryturnoverratio,resultsinblockingoffundsininventory.

Everyfirmhastomaintainacertainlevelofinventoryoffinishedgoodssoastoabletomeettherequirementsofthebusiness.Butthelevelofinventoryshouldneitherbetoohighnortoolow.Itisharmfultoholdmoreinventoriesforthefollowingreasons:


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1.Itunnecessarilyblockscapitalwhichcanotherwisebeprofitablyusedsomewhereelse2.Overstockingwillrequiremoregodownspace,somorerentwillbepaid.3.Therearechancesofobsolescenceofstocks.Consumerwillprefergoodsoflatesttechnologyetc.4.Slowdisposalofstockswillmeanslowrecoveryofcashalsowhichwilladverselyaffectliquidity________________

________________________________NetSales________________________________InventoryTurnOverRatio=----------------=Times________________________________AverageInventory________________________________

________________________________

________________________________

________________________________OpeningStock+ClosingStock

________________________________AverageInventory=---------------------------------------________________________________2________________

TABLENO-4

TABLESHOWINGTHEINVENTORYTURNOVERRATIOFORTHEYEAROF20052010

YEARNETSALESAVERAGE

STOCKTIMES


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2005-200634,50,30,01667,38,66551.202006-200738,74,17,3601,85,09,52920.932007-200840,71,95,2472,90,50,49514.012008-200943,86,32,8743,67,409,3711.932009-201057,59,13,2564,10,02,42114.04

INTERPRETATION

1.InventoryTurnoverratioshowsthatinyearof2005-06theratiowas51.2timesitimpliesthatthecompanywasabletomanageinventoryturnovereffectivelybut2006to2010theratiowasgradualdecreaseformtheyear2005.-06Theratiowas20.93,14.01,11.93,14.04respectivelyfortheyearof2006-07,2007-08,2008-2009and2009-10Sothecompanytoimprovetheinventoryturnoverratio


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2.DEBTORSTURNOVERRATIO

Debtorsconstituteanimportantconstituentofcurrentassetsandthereforethequalityofdebtorstoagreatextentdeterminesafirmsliquidity.Debtorsturnoverratioindicatesthevelocityofdebtcollectionofaconcern.Higherthevalueofdebtorsturnoverratios,themoreefficientisthemanagementofdebtors.Lowerdebtorsturnoverratioimpliesinefficientmanagementofdebtors

________________________________________________TotalSales________________________________

Debtorsturnoverratio=-------------------=Times________________________________TradeDebtors________________


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TABLENO-5

TABLESHOWINGTHEDEBTORSTURNOVERRATIOFORTHEYEAROF2005-2010

YEARTOTALSALESDEBTORSTIMES2005-0634,50,30,0161,25,97,53227.382006-0738,74,17,3601,16,88,79533.142007-0840,71,95,2471,79,75,10022.652008-09

43,86,32,8742,04,42,17421.452009-1057,59,13,2561,51,92,97537.90

INTERPRETATION

TheDebtorsturnoverratioisshowingthe2005-06ratiowas27.38,2006-07ratiowas33.14,2007-08ratiowhichs22.65,2008-09ratiowas21.45,2009-10ratiowas37.90.TheDebtorsturnoverratioincreasedyearbyyearso,thefirmcollectthedebtorsmoreEfficient


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3.AVERAGECOLLECTIONPERIOD

TheaveragecollectionperiodrepresentstheaveragenumberofdaysforwhichCo

ncernhastowaitbeforeitsreceivableisconvertedincash.ShortertheaverageCollectionperiod,thebetteristhequalityofdebtorsduetoashortcollectionperiodImpliesquickpaymentbydebtors

Noofworkingdays

Averagecollectionperiodratio=----------------------------

Debtorsturnoverratio


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TABLENO-6

THETABLESHOWINGAVERAGECOLLECTIONPERIODFROMDEBTORSFORTHEYEAROF2005-2010

YEAR NOOFWORKINGDAYSDEBTORSTURNOVERRATIORATIOINDAYS2005-06

356

27.3813.002006-07

35633.1410.742007-0835622.6515.722008-0935621.4516.592009-10356

37.909.39

INTERPRETATIONTheaveragecollectionperiodintheyearof2005-200613days,2006-2007-10.74days,2007-2008-15.72days,2008-200916.59daysand2009-10-9.39daysThe


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debtorspromptpaymenttothisconcernsothisconcernmaintainaveragecollectionperiodinthislevel

4.FIXEDASSETSTURNOVERRATIO

Thefixedassetsturnoverratioisthemeasureofoperationalefficiencyoffixedassets.Thisratioindicatestheextenttowhichtowhichtheinvestmentinfixedassetscontributetowardssales

TotalsalesFixedAssetsTurnoverRatio=-------------FixedAssets


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TABLENO7

THETABLESHOWINGTHEFIXEDASSETSTURNOVERRATIOFORTHEYEAROF2005-10

YEARTOTALSALESFIXEDASSETSTIMES2005-0634,50,30,016

4,45,60,0227.742006-0738,74,17,3605,24,31,2107.392007-0840,71,95,2475,75,96,1037.07


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2008-0943,86,32,8745,64,70,1187.772009-1057,59,13,2569,26,56,9746.22

INTERPRETATION

Thefixedassetsturnoverratiofortheyearof2005-2006was7.74,2006-20077.39,2007-087.07,2008-09-7.77and2009-106.22thefirmfixedassetshavebeenutilizedeffectively


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5.WORKINGCAPITALTURNOVERRATIO

Workingcapitalturnoverindicatesthevelocityoftheutilizationofnetworkingcapital.Thisratiomeasurestheefficiencywithwhichtheworkingcapitalisbeingusedbyafirm.Ahigherratioindicatesmaximumutilizationofavailableworkingcapitalandalowratioindicatespoorutilizationofavailableworkingcapital.

________________Sales________________________________Workingcapitalturnoverratio=-------------------________________________________Networkingcapital________________________________

________________

TABLENO8


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THETABLESHOWINGWORKINGCAPITALTURNOVERRATIOFORTHEYEAROF2005-2010

YEARNETSALESNETWORKINGCAPITALTIMES2005-0634,50,30,016-45,85,329-75.242006-0738,74,17,3601,03,22,94837.522007-0840,71,95,2475,12,55,7507.94

2008-0943,86,32,87418,28,83,1652.392009-1057,59,13,25625,13,66,8162.29

INTERPRETATIONIntheyearof2005-06theratiowas-75.24,2006-07theratiowas37.52,2007-0

8theratiowas7.94,2008-09theratiowas2.39and2009-10ratiowas2.29.Buttheratiohasdecreasedfrom-75.21to2.29sothisratioindicatesthatthecompanyhasnotabletoutilizeitscurrentassetsefficientlyinordertogeneratesales


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6.CURRENTASSETSTURNOVERRATIO

Theratioisverymuchusefultodeterminehoweffectivelythecurrentassetshavebeenutilizedtowardssales.Highertheratio,bettertheutilizationofcurrentassets

NetSalesCurrentAssetsTurnoverRatio=-----------------------Currentassets


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TABLENO9

TABLESHOWINGTHECURRENTASSETSTURNOVERRATIOFORTHEYEAROF2005-2010

YEARNETSALESCURRENTASSETSTIMES2005-06

34,50,30,01619,01,50,6861.812006-07

38,74,17,360

13,21,24,5262.932007-0840,71,95,247

14,80,01,4012.752008-0943,86,32,87421,16,69,2132.072009-1057,59,13,25629,14,54,4831.97

INTERPRETATION

Thecurrentassetsturnoverratiofortheyearof2005-06ratiowas1.81,2006-07ratiowas2.93,2007-08ratiowas2.75,2008-09ratiowas2.07and2009-10ratiowas1.97Itimpliesthatthefirmisnotabletoutilizeitscurrentassetseffectively


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IIILONGTERMSOLVENCYRATIO

Longtermsolvencyratiosconveyafirmabilitytomeettheinterestcostandrepaymentscheduleofitslongtermobligations.Theseratiomeasuresthecontributionoffinancingbyownersascomparedtofinancingbyoutsiders.

Thefollowingratiosiscalculatedtomeasurethesolvencyoftheconcern1.DebtEquityRatio

2.Equity/proprietaryratio3.FixedassetstoNetworthRatio4.SolvencyRatio5.CurrentAssetstoproprietorsfundratio

1DEBTEQUITYRATIO

Debtequityratioiscalculatedtomeasuretherelativeclaimsofout


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sidersasagainstthefirmassets.Debtequityratiocalculatedtomeasuretheextenttowhichdebtfinancinghasbeenusedinthebusiness.ItisdeterminedtoascertainthesoundnessoflongtermfinancialpoliciesofthecompanyDebtDebtequityratio=--------------------Equity

Debt=LongtermliabilitiesEquity=ShareCapital.

TABLENO10

TABLESHOWINGTHEDEBTEQUITYRATIOFORTHEYEAROF20052010

YEARDEBTEQUITY

RATIO2005-06

2,57,55,304

1,35,47,563

1.90

2006-07

3,73,48,052

2,53,05,607

1.47

2007-08


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8,30,49,840

2,73,04,448

3.04

2008-09

20,43,43,331

4,24,21,808

4.81

2009-10

29,26,57,654

5,27,73,840

5.54

INTERPRETATION

Thedebtequityratiointheyearof2005-06ratiowas1.90,2006-07ratiowas1.472007-08ratiowas3.042008-09ratiowas4.81and2009-10ratiowas5.54.Itshowsthatthefirmismoredependentonoutsidesourcestomeetitsobligation.


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2.EQUITYPROPRIETARYRATIO

Itestablishestherelationshipbetweenshareholdersfundsandtotalassetsofthefirm.Theratioofproprietorsfundstototalfundsisanimportantratiofordetermininglongtermsolvencyofafirm.Ahighproprietaryratiowillindicatearelativelylittledangertothecreditorsintheeventofforcedwindingupofthecompany.Thelowproprietaryratioindicatesgreaterrisktothecreditors

ShareholdersfundsEquityproprietaryratio=-----------------------------TotalAssets


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TABLENO11

TABLESHOWINGTHEEQUITYPROPRIETARYRATIOFORTHEYEAR2005-2010

YEARSHAREHOLDERSFUNDTOTALASSETSRATIO2005-061,35,47,56323,47,10,708

0.062006-072,53,05,60718,45,55,7360.142007-082,73,04,44820,55,97,5040.132008-094,24,21,80826,81,39,3310.16

2009-105,27,73,84038,41,11,4570.13

INTERPRETATION


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Theaboveequityratioshowsthattheratiowas0.06intheyearof2005-2006,2006-2007-0.14,2007-08-0.13,2008-09-0.16and2009-10-0.13.Itisnotasatisfactorypositiontothefirm.itimpliesthatthefirmshouldmakethearrangementtoincreasetheshareholdersfundtoreducerisk

3.FIXEDASSETSTONETWORTH

Afixedassettonetworthisrelationshipbetweenfixedassetsandshareholdersfund.Itismeasurethesolvencyofthefirm

NetFixedAssetsFixedassetstonetworth=----------------------------Networth


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Networth=Networthisthesameasashareholdersfunds

TABLENO-12

TABLESHOWINGTHEFIXEDASSETSTONETWORTHFORTHEYEAROF20052010

YEARNETFIXEDASSETSNETWORTHRATIO2005-06

4,45,60,0221,35,47,5633.282006-075,24,31,2102,53,05,6072.072007-085,75,96,1032,73,04,448


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2.102008-095,64,70,1184,24,21,8081.332009-109,26,56,9745,27,73,8401.75

INTERPRETATION

Thefixedassetstonetworthratio2005-06was3.28,2006-07was2.07,2007-08was2.10,2008-09was1.33and2009-10was1.75thefixedassetstonetworthratiohasSatisfactorypositionofafirm

4.SOLVENCYRATIO


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Thesolvencyratioreferstorelationshipbetweentotalliabilitiesandtotalassets.Itismeasurethesolvencyofthefirm

TotalliabilitiestooutsidersSolvencyratio=---------------------------------------------TotalAssets

TABLENO-13

THETABLESHOWINGSOLVENCYRATIOFORTHEYEAROF2005-2010

YEARTOTALLIABILITIES


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TOTALASSETSRATIO2005-0622,04,91,31923,47,10,7080.932006-0715,91,49,63018,45,55,7360.862007-0817,97,95,49120,55,97,5040.872008-0923,31,29,37926,81,39,3310.862009-1033,27,45,32138,41,11,4570.86

INTERPRETATION

Thesolvencyratiowas2005-060.93,2006-070.86,2007-08-0.87,2008-09and2009-10was0.86.Sothesolvencyratioindicatesthetotalassetsequaltototalliabilities


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5.CURRENTASSETSTOPROPRIETORSFUNDRATIO

Thecurrentassetstoproprietorsfundratioreferstorelationshipbetweenshareholdersfundandcurrentassets

CurrentassetsCurrentassetstoproprietorsfunds=---------------------------Proprietorsfunds


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TABLENO-14

TABLESHOWINGTHECURRENTASSETSTOPROPRIETORSRATIOFORTHEYEAROF20052010

YEARCURRENTASSETSPROPRIETORS

FUNDRATIO2005-0619,01,50,6861,35,47,56314.03

2006-0713,21,24,5262,53,05,6075.222007-0814,80,01,4012,73,04,4485.422008-0921,16,69,2134,24,21,8084.982009-10

29,14,54,4835,27,73,8405.52

INTERPRETATION

ThecurrentassetstoProprietorsfundratiowas2005-06-14.03,2006-07-5.22,2007-085.42,2008-094.98and2009-105.52.Sothecurrentassetsandproprietorsfundrelationshipweresatisfactory


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IV)PROFITABILITYRATIOS

InthewordsofLordKeynes,ProfitistheenginethatdrivesthebusinessenterpriseAbusinessneedsprofitnotonlyforitsexistencebutalsoforexpansionanddiversification.Theinvestorswantanadequatereturnontheirinvestments,workerswanthigherwagescreditorswanthighsecurityfortheirinterestandloan

1.GROSSPROFITRATIO2.OPERATINGRATIO

3.OPERATINGPROFITRATIO4.NETPROFITRATIO


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1.GROSSPROFITRATIO

Grossprofitratiomeasurestherelationshipofgrossprofittonetsalesandisusuallyrepresentedasapercentage

GrossProfitGrossProfitratio=----------------------x100Netsales


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TABLENO-15

THETABLESHOWINGTHEGROSSPROFITRATIOFORTHEYEAROF20052010

YEARGROSSPROFITNETSALESRATIO2005-0615,07,66,85134,76,09,79543.372006-0717,03,85,13639,00,00,42743.68

2007-0816,93,14,23541,40,11,74540.892008-0919,67,76,95145,71,22,82243.042009-1026,46,33,50657,16,42,43846.29

INTERPRETATION

TheGrossProfitratio2005-06-43.37,2006-0743.68,2007-2008-40.89,2008-09-43.04,2009-1046.29,itshowsrelationshiptogrossprofittonetSalesoftheconcern


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2.OPERATINGRATIO

Operatingratioestablishedtherelationshipbetweencostsofgoodssoldandotheroperatingexpensesontheonehandandsalesontheother.CostofGoodsSold+OperatingExpensesOperatingRatio=-----------------------------------------------------------x100NetSales


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TABLENO-16THETABLESHOWINGTHEOPERATINGRATIOFORTHEYEAROF2005-2010

YEARCostofGoodsSoldOperatingExpenses

NetSalesRatio2005-0619,68,42,94413,48,80,75734,76,09,79595.422006-0721,96,15,29115,78,35,24939,00,00,42796.782007-08

24,46,97,51010,28,26,90541,40,11,74583.942008-0926,03,45,87110,37,31,52645,71,22,82279.642009-1030,70,08,93213,91,65,74357,16,42,438

78.05

INTERPRETATION

Theoperatingratiorelationshipbetweencostofgoodssoldandnetsalesoftheconcerntheoperatingratioforthepercentageof2005-06was95.42,2


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006-07was96.68,2007-08was83.94,2008-09was79.64,2009-10was78.05

3.OPERATINGPROFITRATIO

Thisratioestablishestherelationshipbetweentheoperatingnetprofitandsalesoperatingprofitiscalculatedas,OperatingProfitOperatingProfit=---------------------------x100salesOperatingProfit=NetProfit+Non-Operatingexpenses-NonoperatingIncomeOrOperatingProfit=Sales(Costofgoodssold+administrativeexpenses+Selling

&distributionExpenses)


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TABLENO-17

TABLESHOWINGTHEOPERATINGPROFITRATIOFORTHEYEAROF2005-2010

YEAROPERATINGPROFITSALESRATIO2005-061,13,68,38334,76,09,7953.27

2006-071,25,25,14839,00,00,4273.212007-081,40,91,03541,40,11,7453.212008-091,72,42,58245,71,22,8223.772009-10

3,36,08,29657,16,42,4385.87

INTERPRETATION


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Theoperatingprofitratio200506was3.27,200607was3.21,2007-08was3.21,200809was3.772009-10was5.87

4.NETPROFITRATIO

Netprofitratioestablishesarelationshipbetweennetprofitandsales.Thisratioistheoverallmeasureoffirmsprofitabilityandiscalculatedas:NetProfitAfterTaxNetProfitRatio=--------------------------------

NetSales


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TABLENO-18

THETABLESHOWINGTHENETPROFITRATIOFORTHEYEAROF2005-2010

YEARNETPROFITAFTERTAXNETSALESRATIO2005-0623,83,82634,76,09,7950.68

2006-0717,58,04439,00,00,4270.452007-0819,98,84141,40,11,7450.482008-0931,17,360


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41,40,11,7450.752009-1062,52,03257,16,42,4381.09

INTERPRETATION

Thenetprofitratiofortheyearof2005-06was0.68,2006-07was0.45,2007-08was0.48,2008-09was0.75and2009-10was1.09

4.OVERALLPROFITABILITYRATIOS

Profitsarethemeasureofoverallefficiencyofabusiness.Thehighertheprofit,themoreefficientisthebusinessconsidered.Overallprofitabilityorefficiencyofabusinesscanbemeasuredintermsofprofitsrelatedtoinvestmentsmadeinthebusiness


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NetProfit(AfterTax)ReturnonShareHoldersInvestment=------------------------------------x100ProprietorsFunds

TABLENO-19

THETABLESHOWINGTHEOVERALLPROFITABILITYRATIOFORTHEYEAROF2005-10

YEARPROFITAFTERTAXPROPRIETORSFUNDSRATIO2005-0623,83,8261,35,47,56317.592006-0717,58,044


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2,53,05,6076.942007-0819,98,8412,73,04,4487.322008-0931,17,3604,24,21,8087.342009-1062,52,0325,27,73,84011.84

INTERPRETATION

Theoverallprofitabilityratiofortheof200506was17.59,200607was6.94,2007-08was7.32,200809was7.32and200910was11.84


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3.2COMPARATIVEBALANCESHEETS

Thechangesinperiodicbalancesheetitemsreflecttheconducttobusiness.Thechangescanbeobservedbycomparisonofthebalancesheetatthebeginningandattheendofaperiodandthesecanhelpinforminganopinionabouttheprogressofanenterprise.Thecomparativebalancesheethastwocolumnsforthedataoforiginalbalancesheet.Athirdcolumnisusedtoshowincreaseinfigures.Thefourthcolumnmaybeaddedforgivingpercentageofincreaseordecrease.

GUIDELINESFORINTERPRETATIONOFCOMPARATIVEBALANCESHEET

1Currentfinancialpositionandliquidityposition2LongTermfinancialposition3.Profitabilityoftheconcern

TABLENO-20

COMPARATIVEBALANCESHEETOFYEAR2005-2006

PARTICULARS20052006INCREASE(OR)DECREASEIN%ISOURCESOFFUNDS

1.ShareholdersFund


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a)ShareCapitalb)Reserve&SurplusDeferredTaxLiability2.LOANFUNDSa)SecuredLoansb)UnsecuredLoansGRANDTOTALIIAPPLICATIONOFFUNDS1.FixedAssetsA.GrossBlockB.LessDepreciation

NETBLOCK2.Investment3.aCurrentAssets&LoansandAdvancesb.CurrentLiabilities&Provisions

NetCurrentAssets

50,00,00061,63,73721,36,016

70,48,92480,00,000

2,83,48,677

10,56,78,2556,91,54,6953,65,23,560354250

10,70,36,005

11,55,65,138

-85,29,133


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50,00,00085,47,56310,26,076

77,55,3041,80,00,0004,03,28,943

12,04,59,9517,58,99,9294,45,60,0223,54,250

19,01,50,686

19,47,36,015

-45,85,239

-+38.66-51.67

+10.02+125+42.26

+13.99+9.75+22.00-

+77.65


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+68.51

-46.24

GRANDTOTAL2,83,48,6774,03,28,943+42.26

INTERPRETATION

Thecomparativebalancesheetofthecompanyrevealsthatduringthe200506therehasbeenanincreaseinfixedassets22%whiletheliabilityhasincreasedto42.26%.Thisindicatesthatthecompanyhasthepolicyofpurchasingfixedassetsfromlongtermsourceoffinance

Thecurrentassetshaveincreasedby77.65%butthecurrentliabilitieshasincreasedto68.51%.Thisindicatesthatthecurrentassetsmorethancurrentliabilities.Itrevealsthatthereisadequateamountofworkingcapitaltomaintainthecurrentfinancialpositionofthefirm.

Thereservesandsurplushasincreasedto38.66%,Indicatingthatthere

isanincreaseintheprofitabilitypositionofthefirm.Theoverallfinancialpositionofthecompanyissatisfactory.


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TABLENO-21COMPARATIVEBALANCESHEETOFYEAR2006-2007


1.ShareholdersFunda)ShareCapitalb)Reserve&Surplus

DeferredTaxLiability

2.LOANFUNDSa)SecuredLoansb)UnsecuredLoans

GRANDTOTAL

IIAPPLICATIONOFFUNDS1.FixedAssetsA.GrossBlockB.LessDepreciation

NETBLOCK

2.Investment3.aCurrentAssets&LoansandAdvancesb.CurrentLiabilities&Provisions

NetCurrentAssets

50,00,00085,47,563


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10,26,076

77,55,3041,80,00,000

4,03,28,943

12,04,59,9517,58,99,929

4,45,60,022

3,54,250

19,01,50,686

19,47,36,015

-45,85,239

1,50,00,0001,03,05,607

4,54,749

2,04,48,0521,69,00,000


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6,31,08,408

13,72,57,7628,48,26,552

5,24,31,210

3,54,250

13,21,24,526

12,18,01,578

1,03,22,948

+200

+20.57

-55.68

+163.67-6.11

+56.48

+13.94+11.76


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+17.66

0

+-30.51

-37.45

-325.13

GRANDTOTAL4,03,28,9436,31,08,408

+56.48

INTERPRETATION

Thecomparativebalancesheetof2006-07revealsthatthereisaincreasedinfixedassetsof17.66%andthereisaincreaseinliabilityof56.78%thisfactshowsthatthefixedassetshasbeenpurchasedduringtheyearThecurrentassetshasincreasedfor30.51%andcurrentliabilitya

redecreasedfor37.45%.Thisshowsthatthecurrentliabilitieslessthanthecurrentassets.However,thecurrentfinancialpositionofthecompanyissatisfactory.

Theoverallfinancialpositionofthecompanyduringthe2006-07issatisfactory


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1.ShareholdersFund

a)ShareCapitalb)Reserve&Surplus

DeferredTaxLiability

2.LOANFUNDSa)SecuredLoansb)UnsecuredLoansGRANDTOTALIIAPPLICATIONOFFUNDS1.FixedAssets

A.GrossBlockB.LessDepreciationNETBLOCK

2.Investment

3.aCurrentAssets&LoansandAdvances

b.CurrentLiabilities&Provisions

NetCurrentAssetsDeferredTaxAssetMiscellaneousExpenditure

1,50,00,0001,03,05,607


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4,54,749

2,04,48,0521,69,00,0006,31,08,408

13,72,57,762

8,48,26,5525,24,31,210

3,54,250

13,21,24,526

12,18,01,578

1,03,22,948-

-

1,50,00,0001,23,04,448

-

1,96,50,3626,33,99,47811,03,54,388


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14,97,84,211

9,21,88,1085,75,96,103

3,54,250

14,80,01,401

9,67,45,651

5,12,55,7507,42,105

4,06,080

-+19.39

-

-3.90+275.14+74.86479

+9.12

+8.67+9.85

-


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+12.01

-20.57

+396.52-

-GRANDTOTAL6,31,08,40811,03,54,288

+74.86

INTERPRETATION

Thecomparativebalancesheetof2007-08revealsthatthereisadecreaseinsecuredloansfor3.90%butinthesametimeincreasedforunsecuredloansof275.14%andincreasesthelongtermliabilities74.86%.Theincreasedforfixedassetsof9.85%andincreasethecurrentassetsfor12.01%andduringthedecreaseinthecurrentliabilitiesfor20.57%

Thecurrentliabilitieslessthancurrentassetssothecurrentfinancialpositi

onofthecompanyissatisfactory

Theoverallfinancialpositionofthecompanyduringtheof2007-08weresatisfactory


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1.ShareholdersFund

a)ShareCapitalb)Reserve&Surplus2.LOANFUNDSa)SecuredLoansb)UnsecuredLoansGRANDTOTAL

IIAPPLICATIONOFFUNDS

1.FixedAssetsA.GrossBlock

B.LessDepreciationNETBLOCK2.Investment3.aCurrentAssets&LoansandAdvancesb.CurrentLiabilities&ProvisionsNetCurrentAssetsDeferredTaxAssetMiscellaneousExpenditure

1,50,00,0001,23,04,448

1,96,50,3626,33,99,47811,03,54,388


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14,97,84,2119,21,88,108

5,75,96,1033,54,25014,80,01,401

9,67,45,6515,12,55,7507,42,105

4,06,080

,70,00,0001,54,21,808

17,08,83,5273,34,59,80424,67,65,139

15,99,65,82410,34,95,706

5,64,701183,54,25021,16,69,213

2,87,86,04818,28,83,16517,36,171

53,21,435


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+80+25.33

+769.62-47.22+123.61

+6.79

+12.26

-1.95-+43.01

-70.24+256.80+133.95

+1210.44

GRANDTOTAL11,03,54,28824,67,65,139+123.61

INTERPRETATIONThecomparativebalancesheetsof2008-09showsthatthereisadecreaseinfixedassetsof1.95percentageandincreaseinshareholdersfund80%andreservesandsurplus25.33%


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Thesecuredloansincreasedfortheyear769.62%anddecreaseinunsecuredloansfor47.22%Thelongtermliabilitieswereincreasedforsecuritybasis

Thecurrentliabilities70.24%lessthancurrentassetsfortheyearthecompanyreducethecurrentliabilitiesandincreasedthelongtermliabilities

Theoverallfinancialpositionissatisfactory



1.ShareholdersFunda)ShareCapital

b)Reserve&Surplus

2.LOANFUNDSa)SecuredLoansb)UnsecuredLoans

GRANDTOTAL


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IIAPPLICATIONOFFUNDS1.FixedAssetsA.GrossBlockB.LessDepreciation

NETBLOCK

2.Investment3.aCurrentAssets&LoansandAdvancesb.CurrentLiabilities&ProvisionsNetCurrentAssetsDeferredTaxAssetMiscellaneousExpenditure

2,70,00,0001,54,21,808

17,08,83,5273,34,59,804

24,67,65,139

15,99,65,824

10,34,95,706

5,64,70118

3,54,250

21,16,69,213

2,87,86,04818,28,83,16517,36,171


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53,21,435

3,11,00,0002,16,73,840

24,60,90,2214,65,67,433

34,54,31,494

21,51,57,821

12,25,00,847

9,29,24,257

3,54,250

29,14,54,483

4,00,87,66725,13,66,8167,86,171

-

+15.18+40.54

+44.01+39.17


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+39.98

+34.50

+18.36

+64.55

-

+37.69

+39.26+37.44-54.71

-GRANDTOTAL24,67,65,13934,54,31,494+39.98

INTERPRETATION

Thecomparativebalanceasheetfortheyearof2009-10showsthatthereisincreasedinshareholdersfunds15.18%andreservesandsurplus40.54%.Thesecuredloanswereincreasedfor44.01%andunsecuredloansincreasedfor39.17%.

Thefixedassetsduringtheyearincreasedfor64.55%thecompanypurchasedforfixedassets.Thelongtermfinancialsourcesfullyinvestedforfixedassetsformodernmachineries.

Thecurrentassetsofthecompanylessthanthecurrentliabilitiessothecompanyworkingcapitalpositionsarenotsatisfactory.

Theoverallfinancialpositionissatisfactorybecausethecompanyconcentrated


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forreplacethemodernmachineriesinsteadofexistingoldmachineries.

3.3FUNDFLOWSTATEMENT

Itisastatementshowingvarioussourcesandapplicationoffundssteps1Scheduleofchangesinworkingcapital2Fundflowstatement

1SCHEDULEOFCHANGESINWORKINGCAPITAL

Workingcapitalmeansexcessofcurrentassetsovercurrentliabilities.Statementofchangesinworkingcapitalispreparedtoshowthechangesintheworkingcapitalbetweentwoyears.

2.FUNDFLOWSTATEMENT

Fundsflowstatementisamethodbywhichchangesinfinancialpositionofabusinessenterprisebetweenbeginningandendfinancialstatementdates.Itisastatementshowingsourcesandusesoffundsforaperiodoftime


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TABLENO-25

STATEMENTOFCHANGESINWORKINGCAPITALFORTHEYEAROF2005-2006

PARTICULARS20052006INCREASE

DECREASECURRENTASSETSStockDebtorsCashandBankTotalcurrentassets

CURRENTLIABILITESLiabilityforpurchaseLiabilityforexpensesLiabilityforotherfinance

Customercreditbalances

PROVISIONS

IncomeTaxGratuityTotalcurrentliabilitiesWorkingCapitalNetDecreaseinWorkingCapital

78074025108433914009713

92927129


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97806796

12120990

67631

1545990

17535502270181

115565138

226380095129694

149219547125975325151233

166968312

169692401

14893034

59545

3549451


75/123

41341342407450

194736015

27767703

7114552217541411141520

8086


76/123

5129694

71885605

2772044

2003461

2380584

137269

TOTAL27767703277677037917896379178963


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INTERPRETATION

Thestatementofchangesinworkingcapitalfortheyearof2005-06showstheworkingcapitalofthecompanyhasdecreasedto5129694.Thecurrentassetshaveincreasedandcurrentliabilitiesalsoincreased.Theliabilityforpurchaseandliabilitiesforexpensesandprovisionhaveincreased.Theincreaseincashandbankbalancessufficientfundstomeetthecurrentliabilities

TABLENO-26


PARTICULARS2006


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2007INCREASEDECREASECURRENTASSETS

StockDebtorsCashandBankTotalcurrentassets

CURRENTLIABILITESLiabilityforpurchaseLiabilityforexpensesLiabilityforotherfinanceCustomercreditbalances

PROVISIONS

IncomeTaxGratuityTotalcurrentliabilities

WorkingCapitalNetIncreaseinWorkingCapital

14,92,19,5471,25,97,53251,51,233

166968312

169692401

14893034

59545

3549451


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41341342407450

19473601527767703

87009105116887958469034

107166934

96505063

16151878

0

4036430

23850902723117

12180157814634644

13133059

3317801


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73187338

59545

1749044

62210442

908737

1258844


81/123

486979

315667

13133059

TOTAL27767703277677037831372878313728

INTERPRETATION

Thestatementofchangesinworkingcapitalfortheyearof2006-07showstheworkingcapitalofthecompanyhasincreasedfor13133059.thedebtorslevelincreasedandliabilityofpurchasedecreasedandprovisionsofincometaxdecreased.Thefirmhasenoughliquidityfundstomeetitsshorttermobligations.


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TABLENO-27STATEMENTOFCHANGESINWORKINGCAPITALFORTHEYEAROF2007-2008

PARTICULARS

20072008INCREASEDECREASECURRENTASSETS


CURRENTLIABILITESLiability

forpurchaseLiabilityforexpenses

Customercreditbalances

PROVISIONS


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WorkingCapital

NetIncreaseinWorkingCapital

87009105116887958469034

107166934

76505063

16151878

4036430

23850902723117

101801578

5365356

20280176


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96932743179751007483340

122391183

82927133

9193438

0

24460802179000

96745651

25645532

99236386286305


85/123

6958440

4036430

544117

985694

6422070


86/123

60990

20280176

TOTAL25645532

25645532

27748930

27748930

INTERPRETATION

Thestatementofchangesinworkingcapitalfortheyearof2006-07showstheworkingcapitalofthecompanyhasincreasedto20280176.Thestockanddebtorslevelsareincreasedandliabilitiesofpurchaseddecreasedandliabilityofexpensesareincreasedforduringtheyear.Theprovisionsforincometaxincreasedandgratuitydecreased.InthisyearthefirmhaveenoughliquidfundstomeetitscurrentliabilitiesHencetheliquiditypositionofthecompanyissatisfactory


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TABLENO-28


PARTICULARS20082009INCREASEDECREASE

CURRENTASSETSStockDebtorsCashandBankTotalcurrentassets

CURRENTLIABILITESLiabilityforpurchaseLiabilityforexpenses

PROVISIONS


WorkingCapital


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96932743179751007483340

122391183

82927133

9193438

24460802179000

96745651

25645532

123354577

132742820

2044217424601163

177786157


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11198214

11347828

32508092989197

28786048

149000109

35810077246707417117823

71728919

2154390


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804729 810197

123354577

TOTAL149000109

149000109

127123893

127123893


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INTERPRETATION

Thestatementofchangesinworkingcapitalfortheyearof2006-07showstheworkingcapitalofthecompanyhasincreasedto123354577.Thestocklevel,debtorsandcashandbankbalancehasincreasedduringyear.Theliabilityofpurchaseandexpenseddecreasedduringyear.Thefirmenoughliquidfundstomeetitscurrentliabilities

TABLENO-29



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PARTICULARS20092010INCREASEDECREASECURRENTASSETS


CURRENTLIABILITESLiabilityforpurchase

Liabilityforexpenses

PROVISIONS


WorkingCapital


1327428202044217424601163

177786157

11198214

11347828


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32508092989197

28786048

149000109

65003355

22484525615192975

14052900

254091131

18164429

13238469

55730933111676

40087667

214003464


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92102436

524919910548263

6966215

1890641

2322284122479

65003355


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TOTAL214003464

214003464

92102436

92102436

INTERPRETATION

Thestatementofchangesinworkingcapitalfortheyearof2006-07showstheworkingcapitalofthecompanyhasincreasedto65003355.Duringtheyearthestock

levelincreasedbutdebtorsandcashandbankbalancedecreased.Theallcurrentliabilitiesincreased.Howeveroverworkingcapitalwasincreasedso,thefinancialpositionissatisfactory


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FLOWSTATEMENT

TABLENO-30

FUNDSFLOWSTATEMENTFORTHEYEAR2005-06

SOURCES

APPLICATIONS

DecreaseinworkingCapital

Raisingofloans

SaleofFixedassets

51,29,694

7,06,380

11,83,262Fundslostinoperations

RepaymentofLoan

PurchaseofFixedassets

-1,89,45,622


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100,00,000

1,59,64,95870,19,336

70,19,336

INTERPRETATION

Theabovetableindicatesadecreaseinworkingcapitalrequirements.LoanshadbeenrepaidforRs100,00,000andPurchasedforfixedassetsforRs1,59,64,958andsaleoffixedassets11,83,262However,thefundslostfromoperationsowhichindicatesinefficientfinancialplanning

TABLENO-31FUNDSFLOWSTATEMENTFORTHEYEAR2006-07

SOURCES

APPLICATIONS

Fundsfromoperations

Raisingofloans

SaleofFixedassets

1,61,38,121


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1,26,92,748

20,51,575

IncreaseinworkingCapital

RepaymentofLoan


1,31,33,059

-11,00,000

1,88,49,3853,08,82,444

3,08,82,444

INTERPRETATION

ThefundflowstatementshowsthatthereisaincreaseinworkingcapitalthefundsfromoperationcomestobusinessforRs1,61,38,121.Duringtheperiodtoincreasedtheproductivity.Thisindicatessatisfactoryfinancialplanning


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TABLENO-32


SOURCES

APPLICATIONS

Fundsfromoperations

Raisingofloans

SaleofFixedassets

5,60,67,363

-7,97,690

52,11,120

Increaseinworkingcapital


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RepaymentofLoanPurchaseofFixedassets

2,02,80,176

2,24,63,048

1,77,37,569

6,04,80,793

6,04,80,793

INTERPRETATION

ThefundflowstatementshowsthattheincreasingworkingcapitalrequirementsforRs2,02,80,176,FundsfromoperationsofRs5,60,67,363,RepaymentofloanofRs2.24.63,048andPurchasedforFixedassetsofRs1,77,37,569andSaleoffixedassetsofRs52,11,120.Thefundsutilizedforeffectivelyduringthefinancialperiod

TABLENO-33FUNDSFLOWSTATEMENTFORTHEYEAR2008-09


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SOURCES

APPLICATIONS

Fundsfromoperations

Raisingofloans

SaleofFixedassets

1,22,42,700

15,12,33,165

26,12,170

IncreaseinworkingCapital

RepaymentofLoan


12,33,54,577

2,99,39,674

1,27,93,784

16,60,88,035

16,60,88,035


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INTERPRETATION

TheabovefundflowstatementshowsthatthereisanincreaseinworkingcapitalofRs12,33,54,577.ThefundsfromoperationsisRs1,22,42,700expressanenhancementintheproductionactivitytherebyleadingtotheutilizedofitsfixedassetstothemaximumlevel.Thisyearthefundswereusedforrepaymentofloans

TABLENO-34


SOURCES

APPLICATIONS

Fundsfromoperations

Raisingofloans

SaleofFixedassets

5,89,79,441


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7,52,06,694

17,72,331Increaseinworking

Capital

RepaymentofLoan


6,50,03,355

1,31,07,629

5,78,47,48213,59,58,466

13,59,58,466

INTERPRETATION

TheabovefundflowstatementshowsthatthereisanincreaseinworkingcapitalofRs6,50,03,355andthefundsfromoperationofRs5,89,79,441showsthattotallythecompanyisrecoveringtoagoodsituation.Thecompanyhasutilizedtheirfixedassetsandrepaidtheloans


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3.4COMMONSIZEBALANCESHEET

Financialstatementswhenreadwithabsolutefigurearenoteasilyunderstandable.Theyareevenmisleading.Eachitemofassetsisconvertedintopercentagetototalassetsandeachitemofcapitalandliabilityisexpressedtototalliabilityandcapitalfunds.Thusthewholebalancesheetisconvertedintopercentageformsuch,convertedbalancesheetisknownascommon-sizebalancesheet

TABLENO-35


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COMMONSIZEBALANCESHEETFORTHEYEAROF2006

PARTICULARSAMOUNTPERCENTAGECURRENTASSETS

StockDebtorsCashandBankLoans&AdvanceTotalcurrentassetsInvestment

FIXEDASSETSTotalFixedAssetsTOTALASSETS

CURRENTLIABILITIES&CAPITAL&RESERVES

TotalCurrentLiabilitiesCapital&Reservesi)ShareCapitalii)ReservesDeferredTaxLiabilities

LONGTERMLIABILITIES

LoanFunds

Totalcapital&ReservesTotalLiabilities

14,92,19,5471,25,97,53251,51,2332,31,82,37419,01,50,6863,54,250

4,45,60,022

23,50,64,958


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19,47,36,015

50,00,00085,47,56310,26,076

25755304

40328943

235064958

63.48

5.362.199.8680.890.15

18.96

100

82.84

2.123.64

0.44

10.96

17.16

100


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INTERPRETATION

Thecommonsizebalancesheetshowsthatfixedassetspercentageas8.96,whichhasbeenincreasedcomparativelyandcurrentassetspercentageis80.89theliabilitiespercentageis82.84longtermliabilitiespercentageis10.96andcapitalandreservespercentageis17.16itindicatesthatthecompanyhadutilizedinlongtermdebt

TABLENO-36COMMONSIZEBALANCESHEETFORTHEYEAROF2007


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PARTICULARS2007PERCENTAGECURRENTASSETS

StockDebtorsCashandBankLoans&AdvanceTotalcurrentassets

Investment

FIXEDASSETSTotalFixedAssets

TOTALASSETS

CURRENTLIABILITIES&CAPITALRESERVES

TotalCurrentLiabilities

DeferredTaxCapital&Reservesi)ShareCapitalii)Reserves

LONGTERMLIABILITIES

LoanFundsTotalcapital&Reserves

TotalLiabilities

8,70,09,1051,16,88,79584,69,0342,49,57,592

132124526

354250


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5,24,31,210

184909986

121801578

454749

1,50,00,0001,03,05,607

3734805263108408

184909986

47.056.324.5613.50

71.45

0.19

28.35


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100

65.87

0.25

8.115.57

20.1934.13

100

INTERPRETATION

Thecommonsizebalancesheetshowsthatfixedassetspercentageas28.35,increasedforcomparedtolastyearwhichhasbeenincreasedcomparativelyandcurrentassetspercentageis71.45theliabilitiespercentageis65.87thecurrentliabilitydecreasedcomparedtolastyearlongtermliabilitiespercentageis20.19andcapitalandreservespercentageis34.13itindicatesthatthecompanyhadutilizedinlongtermdebt


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StockDebtors

CashandBankLoans&AdvanceTotalcurrentassetsDeferredTaxAssetsMiscellaneousExpensesINVESTMENTFIXEDASSETSTotalFixedAssets

TOTALASSETS

CURRENTLIABILITES&CAPITAL&RESERVES


Capital&Reserves


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i)ShareCapitalii)Reserves

LONGTERMLIABILITIESLoanFunds

Totalcapital&Reserves

TotalLiabilities

9,69,32,7431,79,75,10074,83,3402,56,10,218

14,80,01,4017,42,105

4,06,0803,54,250

5,75,96,103

20,70,99,939

9,67,45,651

1,50,00,000

1,23,04,448

8,30,49,840


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11,03,54,288

20,70,99,939

46.808.673.6112.37

71.460.360.200.17

27.81

100

46.71

7.245.9

40.10

53.29

100

INTERPRETATION


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Theabovecommonsizebalancesheetshowsthatthefixedassetspercentageis27.81andthecurrentassetspercentageis71.46whichhadbeenincreasedincomparatively.Incaseofcurrentliabilityis46.71so,theworkingcapitalisincreasedinthisyear.Thelongtermdebtsis40.10.Itindicatesthatthecompanyhadmostlyutilizedlongtermdebts

TABLENO-38

COMMONSIZEBALANCESHEETFORTHEYEAROF2009



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StockDebtorsCashandBankLoans&AdvanceTotalcurrentassets

INVESTMENTSDeferredTaxAssetsMiscellaneousExpenditureFIXEDASSETSTotalFixedAssets

TOTALASSETS

CURRENTLIABILITIES&CAPITAL&RESERVES


Capital&Reservesi)ShareCapitalii)ReservesLONGTERMLIABILITIES

LoanFunds


TotalLiabilities

13,27,42,8202,04,42,1742,46,01,1633,38,83,056

21,16,69,213

3,54,25017,36,17153,21,4355,64,70,118

27,55,51,187


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2,87,86,048

2,70,00,0001,54,21,808

20,43,43,331

246765139

27,55,51,187

48.177.428.9312.30

76.82

0.130.631.9320.49

100

10.45


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9.805.60

74.15

89.55

100

INTERPRETATION

Theabovecommonsizebalancesheetshowsthatthefixedassetspercentageis20.49andthecurrentassetspercentageis76.82whichhadbeenincreasedincomparatively.Incaseofcurrentliabilityis10.45so,theworkingcapitalisincreasedinthisyear.Thelongtermdebtsare74.15.Itindicatesthatthecompanyhadmostlyutilizedlongtermdebts


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StockDebtorsCashandBankLoans&Advance

Totalcurrentassets

INVESTMENTSDeferredTaxAssetsMiscellaneousExpenditureFIXEDASSETSTotalFixedAssetsWorkinprogressTOTALASSETS

CURRENTLIABILITES&CAPITAL&RESERVES

TotalCurrentLiabilitiesProvisions

Capital&Reservesi)ShareCapitalii)Reserves

LONGTERMLIABILITIESLoanFunds


TotalLiabilities


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22,48,45,2561,51,92,9751,40,52,9003,73,63,351

29,14,54,482

3,54,2507,86,171-9,26,56,9742,67,28338,55,19,160

3,14,02,897

8684769

3,11,00,000

2,16,73,840

29,26,57,654

34,54,31,494

38,55,19,160

58.323.943.659.69

75.60


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0.100.20

24.030.07100

8.15

2.25

8.075.62

75.91

89.60

100

INTERPRETATION

Theabovecommonsizebalancesheetshowsthatthefixedassetspercentageis24.03andthecurrentassetspercentageis75.60whichhadbeenincreasedincomparatively.Incaseofcurrentliabilityis8.15so,theworkingcapi

talisincreasedinthisyear.Thelongtermdebtsis75.91.Itindicatesthatthecompanyhadmostlyutilizedlongtermdebts


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FINDINGS

1.Theliquiditypositionofthefirmissatisfactoryfortwoyearscomparedtopreviousyears2.Inventoryturnoverratioisincreasingyearbyyearitissatisfactory3.Thedebtorsturnoverratioissatisfactory.Whichrevealstheabilityofthefirmtocollectthefundsattherighttime4.Thefixedassetsturnoverratio,isincreasingyearbyyearwhichindicatesthefirmabilitytoutilizedthefixedassetstoitsoptimumlevel5.Overalldebtequityratioisnotsatisfactory,itindicatesthatthecompanyisdependingmoreonoutsidersfund6.Theworkingcapitalandcurrentassetsturnoverratioissatisfactory.Itindicatedefficientlyutilizationofworkingcapitalofthecompany

7.Thecomparativebalancesheetshowsthatthefinancialpositionissatisfactoryfor8.Thefundflowstatementindicatesthatthefirmvarioussourcesandapplicationsoffund.The2005-06duringyearfundslostfromoperations


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SUGGESTIONS

1.Theindirectexpensescanbereduced2.Thecompanymayincreasethesalesleveltogeneratereturns3.Thecompanyusageofshorttermfundstolongtermliabilitiescanbereduced4Thefirmmayreduceitsdependenceonoutsidersfunds.5Overallthefirmcangenerategoodreturnsfromthefundsalreadyborrowed

CONCLUSION


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ThestudywasdonetoanalyzethefinancialperformanceofV.R.TextilesPrivateLimited,anditwasfoundthattheliquiditypositionofthecompanytobeimproveforfuturefinancialoperations.Thesolvencypositionisnotbecausethecompanyhasdependedmoreontheoutsidersfunds.Thenetsalesofthecompanyisincreasingwhichhasleadtoincreasingfutureprofitoftheconcern

Itishopedthatthecompanymanagementwilllookintotheproblemspointoutinthisstudyandtakenecessarystepstorectifyitbyimplementalthesuggestionsgiventhebetterperformance.

New Financial Performance

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