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Finance Ratio Analysis

VCR Institute Of Management Studies

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The sector has experienced many reforms in India and is expected to grow at 15% p.a. in

the near future. The investment in R&D will also play a vital role in this sector. In a

nutshell, the Indian chemical industry has a large potential to grow in domestic as well as

in export markets. In the current market conditions, with an appreciating rupee, pricing

will be a crucial factor while competing with other exporting countries.

Chemical Cluster Insights

The ownership pattern of the chemical companies was inclined largely towards the

private limited category that account for 69% of the total sample. It is followed by 11%

of partnership firms indicating the huge gap between the largest and the second largest

category in the sample. However, public limited entities account for 10% while 8% are

proprietary concerns.

53% of the private limited companies deal in organic chemicals, 9% deal inspecialty chemicals while 15% are involved in inorganic chemicals

58% of the public limited companies deal in organic chemicals 77% companies from the sample are established before 1990 while 21% are

established after 1990

Sub Segment

Manufacturing of organic chemicals seems to be the most popular sub segment with

around 34% of the sample companies involved in manufacturing of organic products. It is

followed by 14% of the sample companies involved in the production of inorganic

chemicals, 12% in specialty chemicals and 5% in dyes and dyes and dye stuffs. 35% of

the companies dealing in other chemical sub segments that comprise of industrial gases,

solvents etc. Display the high demand of products in this segment. 16% of the companies

dealing in organic chemical s generate 100% of their revenue exclusively through the

domestic market.


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Nature of Operations

79% of the companies are engaged exclusively in manufacturing, while 21% are engaged

in manufacturing as well trading. 58% of the manufacturing companies have single

manufacturing facility while 42% operate with two or more plants. 31% of the companies

involved exclusively in manufacturing activity have invested up to Rs 50 mn in plant and

machinery.

18% of the companies utilize 100% of their installed plant capacity while 42%utilize between 70 - 99% of the installed capacity

More than 75% of the companies involved exclusively in manufacturing activityoperate at more than 50% of the capacity utilization

9% of the companies have their manufacturing facility situated in the heart ofMumbai city while 25% have their plants in the vicinity of Mumbai such as

Dombivli, Kalyan, Ambernath and Badlapur area

2% have their plants in the Navi Mumbai while 15% have their plants in Tarapurand Boisar

33% of the total sample companies showed more than 33% revenue growth in the last

two years. 60% of the private companies accounted for the majority of revenue growth

displaying more than 33% in the last two years.

Future Plans

82% chemical companies have envisaged strategies for future growth. The plans range

from capacity expansion, modernization to new market entry and diversification.

Companies operating in organic chemicals are keen for capacity expansion anddiversification

Of the companies interested in capacity expansion, 80% belong to the privatelimited category

Of the companies interested in diversification, 65% are private limited companies.


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CHAPTER- 2

COMPANY PROFILE

Since its inception in 1999, Riya Chemy has been a pioneer and market leader in retail

segment specializing in the supply of high performance Adhesives & Construction

Chemicals in Karnataka for Building Construction, Automobile, Electrical and

Engineering Industries branded as R*SEAL.

Over the years, the company has established its own presence in the market and is

successfully catering to the need of thousands of satisfied customers.

The company is promoted by Mrs. S.Babita who has over a decade of experience inmanufacturing these products under the supervision and guidance of Indias leading

Polymer Technologist Mr. Vijay Datta ofM/S. Aster Vinyls Ltd., who are having their

manufacturing activities in Karnataka, Tamil Nadu and Maharashtra & many other

States.

R*SEAL ranges of products enjoy a very popular name in the market and R*SEAL

Water Proofing Compounds are certified by Bureau of Indian Standards as per IS: 2645 -2003. All R*SEAL Products are backed by best in house built Laboratory, Research and

Development facilities. Specialist having decades of experience understanding the

tropical conditions in India adhere to strict quality control and produce consistent

materials from batch to batch


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a. Background and Inception of the Company:Since its inception in 1999, Riya Chemy has been a pioneer and market leader in retail

segment specializing in the supply of high performance Adhesives & Construction

Chemicals in Karnataka for Building Construction, Automobile, Electrical and

Engineering Industries branded as R SEAL.

Over the years, the company has established its own presence in the market and is

successfully catering to the need of thousands of satisfied customers.

The company is promoted by Mrs. S. Babita who has over a decade of experience in

manufacturing these products under the supervision and guidance of Indias leading

Polymer Technologist Mr. Vijay Datta of M/S. AsterVinyls Ltd., who are having their

manufacturing activities in Bangalore, Chennai, and Tamil Nadu & Maharashtra.

We have recently opened our companys office at Hyderabad to cater to the requirements

ofAndhra Pradesh market.

R SEAL range of products enjoy a very popular name in the market and R SEAL WaterProofing Compounds are certified by Bureau of Indian Standards as per IS : 2645 - 2003.

All R SEALProducts are backed by best in house built Laboratory, Research and

Development facilities. Specialist having decades of experience understanding the

tropical conditions in India adhere to strict quality control and produce consistent

materials from batch to batch.


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b. Nature of the Business Carried:1. R*SEAL Fast Curing Epoxy Putty2. R*SEAL Tile grouts3. R*SEAL Crack Filling Compound4. R*SEAL Tile Fixing Adhesive5. R*SEAL Integral Water Proofing Compounds

for Cement Mortar & Concrete (Liquid)

6. R*SEAL Integral Water Proofing Compoundsfor Cement Mortar & Concrete (Powder)

7. R*SEAL Paint remover8. R*SEAL Wood preservative for wood care9. R*SEAL Wood Bond10.R*SEAL Tile cleaning agent11.

R*SEAL

Latex rubber additive

12.R*SEAL SBR Latex13.R*SEAL Super Glue14.R*SEAL Tile Cleaning Agent15.R*SEAL CP Fitting and Sanitary Ware Cleaner16.R*SEAL Premium Floor Cleaner17.R*SEAL Glass Cleaner (Non - Ammonia)18.R*SEAL Automate range of Auto Detailing Products.


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c. Vision, Mission and Quality Policy:Vision:

To be the Key Player, Earning Customers' Delight through Constant Innovation,

Embracing Best Technologies and offering world class services.Tobe the international

technology leader in sustainable construction chemicals and Adhesives. We will consider

sustainability and the environment is everything we do and create a customer delight.

Mission:

At Bluecoat we shall always strive to ensure utmost sense of delight of all our clients and

customers, to envision our customers' needs and translate them into concrete

environmental friendly products through integrated efforts of the entire R Seal Team,

setting the highest standards of quality. Each of our actions shall always be intended to

ensure best services to the customers, best job satisfaction of our employees, and highest

admiration as corporate citizens.


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Quality Policy: Keeping in mind that quality service to the customer is of utmost

importance Riya Chemy has revised its quality system to comply with a well-known

international standard, ISO 9001:2008, thus making it an ISO 9001:2008 certified

company. Riya Chemy is thoroughly committed to superior quality in the construction

chemicals that they manufacture. The standard requires companies to formalize their

processes to ensure consistent performance and encourage continuous improvement.

RiyaChemy's ISO documentation includes a quality policy manual, operating procedures,

and work instructions. To maintain ISO certification, they would be audited annually and

recertified every three years. Internal audits of each element are conducted once a year by

their employees.

The driving force behind our success is the consistent team work of our employees, with

our shared value system of commitment to excellence, closeness to customers and the

spirit of innovation we have been able to build with our customer, dealers and

distributors. Total customer satisfaction has been the company's motto. The customer's

convenience is our comfort and hence we offer a range in packing, starting from 30 g

customized packing to bulk packing in temper proof containers.

In view of the growing business potential in construction industry we are now entering in

to the market of bulk buyers with our experienced technical team to assist our customers

of any information about our products etc. - Sunil Datta C.E.O,

Riya Chemy


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d. Products/Services Profile:1. R*SEAL Crack Filling Compound2. R*SEAL Tile Fixing Adhesive3. R*SEAL Integral Water Proofing Compounds

for Cement Mortar & Concrete (Liquid)

4. R*SEAL Integral Water Proofing Compoundsfor Cement Mortar & Concrete (Powder)

5. R*SEAL Paint remover6. R*SEAL Wood preservative for wood care7. R*SEAL Wood Bond8. R*SEAL Tile cleaning agent9. R*SEAL Latex rubber additive10.R*SEAL SBR Latex11.R*SEAL Super Glue12.R*SEAL Tile Cleaning Agent13.R*SEAL CP Fitting and Sanitary Ware Cleaner14.R*SEAL Premium Floor Cleaner15.R*SEAL Glass Cleaner (Non - Ammonia)16.R*SEAL Fast Curing Epoxy Putty17.R*SEAL Tile grouts18.R*SEAL Crack Filling Compound19.R*SEAL Tile Fixing Adhesive


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20.R*SEAL Integral Water Proofing Compounds for Cement Mortar & Concrete(Liquid)

21.R*SEAL Integral Water Proofing Compounds for Cement Mortar & Concrete(Powder)

22.R*SEAL Paint remover23.R*SEAL Wood preservative for wood care24.R*SEAL Wood Bond25.R*SEAL Tile cleaning agent26.R*SEAL Latex rubber additive27.R*SEAL SBR Latex28.R*SEAL Super Glue29.R*SEAL Tile Cleaning Agent30.R*SEAL CP Fitting and Sanitary Ware Cleaner31.R*SEAL Premium Floor Cleaner32.R*SEAL Glass Cleaner (Non - Ammonia)33.R*SEAL Automate range of Auto Detailing Products:

i. R*SEAL Automate Auto Shampooii. R*SEAL Automate Auto Polish

iii. R*SEAL Automate Tyre Shineiv. R*SEAL Automate Auto Glass cleanerv. R*SEAL Automate Auto Dashboard Cleaner

vi. R*SEAL Automate Auto Dashboard Polish


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vii. R*SEAL Automate Auto Leather Cleanerviii. R*SEAL Automate Auto Windshield Washer Fluid

Product Code:(TFA)Tile Fixing Adhesive


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Description:

R SEAL Tile Fixing Adhesive is in powder form which consists of Portlandcement, imported Polymers and Minerals.

Application:

Mix TFA and water in volumetric proportions of 3 volumes TFA to 1 volumewater. Mix it well to form a creamy paste. Allow 10 minutes to mature and apply

this paste to the surface to be tiled and press the tile in firmly. Adhesion thickness

of 3mmis enough to create a good bond. Allow tiles to set for 24 hours before

grouting.

Advantages:

Excellent Adhesion to smooth surface such as existing tiles, mosaic surface etc.TFA also waterproofs the surface. Tiles need no soaking and can go directly from

box to the wall minimizing breakages during soaking. This also saves labour. The

surface to be tiled need not be made wet as TFA functions best on dry and clean

surfaces. No curing is required as TFA is self-curing type.

Coverage:

On smooth even surface TFA gives coverage of 2.5 square feet per kgapproximately.

Shelf Life:

12 months from the date of packing, if stored in tight packed condition.Packing:

R SEAL TFA is available in 1 Kg , 5Kgs , and 25 Kgs packing.


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Fast Curing Epoxy Putty

Application Procedure:

R SEAL is available in fast type (GPFC) , which sets in 30-45 minutes 27 C. aftermixing R SEAL is two components RESIN and HARDNER epoxy formulations

in putty consistency supplied in equal stick form. Cut equal length from each stick

and mix together by kneading with the hand till the mixture acquires a uniform

colour. Use the mix at the earliest on a dry, clean, and oil free surface. Smoothen

the putty while still tacky with the cloth or by pressing a polythene sheet and peel

off after complete curing. R SEAL (GPFC) is versatile product with excellent

bonding properties and resistance to chemicals etc., It is useful for sealing,

repairing, joining, grouting, building, insulating and water proofing ferrous and

non-ferrous metals, glass, asbestos, concrete, ceramics etc.

Note:

Wash hands with soap and water after use R SEAL should not be used in items/areas which come into direct and contact

with flame, high temperature or drinking water.

Remove and mix quantity as per your requirements. Unmixed quantity kept in respective wrappers has 12 months shelf life. This information intended only for general guidance in the application of our

products. Because of the large number of possible methods of application and


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processing, we are unable to accept responsibility in anyone particular case or

application.

R SEAL is available at all leading Hardware, Automobile, General and ElectricStores.

R SEAL is available in 30g, 50g, 90g, and 800g packing.

Crack Filling Compound

How to Use:

Develop the cracks in V shaped groove. Sprinkle water on prepared groove to remove loose particles. Mix 3.5 to 4 volumes of CFC to one part of water to get uniform consistency. Apply this paste to a clean groove and press properly. Finish the surface as desired.

Where to Use:

Repairing of cracks in internal and external plaster. To give a thin render coat to the even out surface.


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Advantages:

High tensile strength Non shrink Very good adhesion Smooth Finish Product developed and manufactured in India by a leading polymer technologist

understanding the tropical condition in India.

Coverage:

40 Mtr/kg.To fill 6 mm x 6mm "V" shaped groove / 3sq Ft/Kg . For 3mm render.

Tile Grouts

Description:

R SEAL tile grout is a polymer based tile joint filler used in filling gaps and levelsitself to give hard wearing, non-dusting tile joints.

R SEAL tile grout does not allow water or moisture to seep into the back of thetile and cause its dislocation.


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R SEAL tile grout firmly holds the tiles together to give long life to the floor tiles.

Application:

R SEAL tile grout is used as a tile filler in domestic floor and wall tiles ,commercial establishments , laboratories , super markets, service stations, hospital

, automobile showrooms etc.

Advantages:

R SEAL (WPL) significantly reduces water demand to enable production of good

workability concrete with minimum water cement ratio.

Imported Polymer base Non dusting Very high compressive Tensile and Flexural strengths ensure carefree joints upto

the life of the tile

Waterproof Economical Easy to use and clean

Directions to Use:

Add 1 part of water to 3 parts of R SEAL TILE GROUT by volume and mix wellto obtain a smooth and uniform paste. Let the paste stand for 7 minutes before the

use. Fill and tool the mixed material firmly without any breaks or gaps in the tile

joint using a squeegee. Use the mixed paste within 20 minutes of mixing. After

approximately 30 minutes of initial setting, remove the excess material on the tile

edges with a sponge or wet cloth. Allow 24 hours for the filling to dry and then

polish the tile with a clean, dry cloth.


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Caution:

R SEAL TILE GROUT MUST BE FILLES WITHIN 24 HOURS OFFIXING THE TILES

R SEAL TILE GROUT UTILITY CHART

Coverage per kg of R SEAL TILE GROUT in square feet

Tile Sizes

Width of Joint 6x6 6x12 4x4 8x8 12x12

2mm 95 130 90 130 186

3mm 65 87 60 87 126

4mm 50 66 45 66 95

6mm 32 45 31 45 64

Colours:

R SEAL TILE GROUTS are available in 16 popular shades.

Available Colours:

WHITE, IVORY, GREY, DRAK BROWN, PINK, BURGUNDY, TERRA, RED,BLUE, COPPER CLOUDY, ALPINE BLUE, MUSHROOM, GREEN, BEIGE,

YELLOW, DARK GREY & BLACK.

Special shades can be developed against bulk order.

Storage:

2 Years from the date of packing, if stored in tight container away from heat andsunlight.

Super Plaster Master

Product Code: Super Master (SPM)


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Description:

After a prolonged laboratory research and practical tests, R SEAL (SPM) isdeveloped to get over the demerits and deficiencies of both richer and leaner

mortar mixes.

R SEAL (SPM) contains highly concentrated mixture of very active ingredientswhich make the richer concrete mixture resistant to shrinkage, cracking, crazing

and dramatically improves the adhesion of learner mixes apart from imposing

overall workability, strength, rebound losses and surface finish

Integral Water Proofing Compoundsfor Cement Mortar & Concrete (Liquid).

Product Code: (WPL) Water Proofing Liquid

Description:

R*SEAL WPL a concrete / mortar admixture in liquid form that acts both as ahighly efficient plasticizer and waterproofing compound. R*SEAL WPL is

specially formulated additive composed of cement compatible, surface active

agent, polymers & additives. It is used as an additive for cement concrete/

mortar/plasters, because plasticizing properties, makes concrete cohesive and

prevents segregation. It improves the integral waterproofing properties of cement

concrete & plasters after curing.

R*SEAL WPL is a chloride free water reducing admixture based on selectedsugar-reduced lignosulphonates. It is supplied as a brown solution which instantly

disperses in water R*SEAL WPL disperses the fine particles in the concrete mix,enabling the water content of the concrete to perform more effectively and

improving the consistency of the concrete. This produces higher levels of

workability for the same water content, allowing benefits such as water reduction

and increased strengths to be taken.


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Fast Curing Epoxy Putty

Application Procedure:

R SEAL is available in fast type (GPFC), which sets in 30-45 minutes 27 C. after mixing

. R SEAL is two components RESIN and HARDNER epoxy formulations in putty

consistency supplied in equal stick form. Cut equal length from each stick and mix

together by kneading with the hand till the mixture acquires a uniform colour. Use the

mix at the earliest on a dry, clean, and oil free surface. Smoothen the putty while still

tacky with the cloth or by pressing a polythene sheet and peel off after complete curing.

R SEAL (GPFC) is versatile product with excellent bonding properties and resistance to

chemicals etc., It is useful for sealing, repairing, joining, grouting, building, insulating

and water proofing ferrous and non-ferrous metals, glass, asbestos, concrete, ceramics

etc.


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e. Area of Operation:HEAD OFFICE & FACTORY

RIYA CHEMY

Magadi Road, Bangalore

Bangalore -560091

Tel: 65959955 / +919845057606

Email:[email protected]

f. Ownership Pattern:Riya Chemy is I so undertaking under and administrative control by the government of

Karnataka. The bore headed by the chief minister of the state. Who is the chairperson,

comprises senior officers of the state government, environment technical experts and

efficient management professionals of the organization.

MANAGEMENT TEAM:

Name Designation

S.Babita Proprietor

Sunil Datta C.E.O

Gaurav Datta Assistant C.E.O


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g. Competitors information:

Each and every Company needs competition to strive hard and stay for long in the

market. Riya Chemy has many competitors amongst which the main competitor is:

1. Pidilite Industries Limited

g. Infrastructure:Their manufacturing facilities are spread over 11000 sq. feet in an industrial location

Bangalore, to ensure good manufacturing practices, segregation of production facilities

for every grade and elaborate quality control measures are followed as per rigid internal

systems. The plant has been set up with total indigenous R&D and expertise. The state of

art manufacturing unit is ISO: 9001:2008 certified.

They have in house full-fledged R&D and Quality Assurance Laboratory for undertaking

basic research and application testing, equipped with modern analytical instruments and

supported by India's leading Polymer technologist Mr. Vijay Datta and qualified chemists

to ensure quality of their products batch after batch.

Their dedication towards quality in all the products has made "R*SEAL" a well

acknowledged brand.

i. Achievement:

From the survey the feedback of the Company is good and they have positive

response from its customer.


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Work-Flow Model (End to End)

Engineering Department

Planning Department

Production

Testing

Packing

Dispatch


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I. ENGINEERING DEPARTMENTAccording to the customer requirements engineers will design the product with the

help research department. Company has got good technical knowledge. The

designing is done by using Auto CAD (Computer Aided Designing), inventor and

Solid Edge 3D modeling which helps for accuracy in designing.

II. PLANNING DEPARTMENT1) Planning of required product with engineering department2) After taking assembly and sub-assembly designs, the item required are categorized

into parts; one; which are to be purchased from vendors outside and, second; which

are to be manufactured in-house.

3) Placing order for items which have to be purchased from vendors4) Calculating cost of components.5) Spares requirement and management.6) Process of production prepared with designs.

III. PRODUCTIONThe marketing department will send an order forwarding memo to production

department. In response to this production department will send order

acknowledgement and delivery schedule to respective order.

IV.PACKING

After production the products will be packing. After packing the products will be

sent to

Testing department.

V.TESTING

After Packing Rseal products and are tested according to the customer requirement.


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k. Future Growth

Business Opportunity

we are one of the leading manufacturers of ISI mark Construction Chemicals &

Adhesives under the well-knownbrand .

Our products carry good image and have vast dealers and distributor network throughout

Karnataka, Tamil Nadu & Andhra Pradesh in India.

We are regularly developing new products in our respective field.

To increase our network further we want to appoint distributors at un-represented

areas of India.

Parties already in distribution of Paints, Hardware, Building Materials, Cement or allied

products with sound financial strength may contact us.

New entrepreneurs willing to make big in business may also

contact us for a successful venture.

We shall provide you with a strong company support.

Approx. investment is around 2 to 3.Crore.


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CHAPTER-3

MCKINSEYS 7S MODEL

The MckinseysSeven-Ss is a frame work for analyzing organization and their

effectiveness. It looks at the seven key elements that make the organization

successful, or not; strategy; structure; system; style; skills; staff and shared valves.

Consultants at Mckensey and company developed the 7S model in the late 1970s to help

managers address the difficulties of organizational change. The model shows that

organizational immune system and many interconnected variables involved make change

complex and that an effective change effort must address many of these issues

simultaneously.

The 7-S model is tool for managerial analysis and action that provides a structure

with which to consider a company as a whole, so that the organizati ons problems

may be diagnosed and a strategy may be developed and implemented.


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The 7-S diagram illustrates the multiplicity interconnectedness of elements that

define an organizations ability to change. The theory helped to change managers

thinking about how companies could be improved. It says that it is not just a matter

of devising a new strategy and following it through, nor is it a matter of setting up

new systems and letting them generate improvement.

To be effective, your organization must have a high degree of fit or internal

alignment among all the seven Ss. All S are interrelated, so a change in one has a

ripple effect on all the others. It is impossible to make progress on one without

making progress on all. Thus, to improve your organization, you have to master

system thinking and pay attention to all of the seven elements at the same time.

There is no starting point or implied hierarchy. Different factor may drive the

business in any one organization

1) STRUCTUREThe structure of framework in which the activities of the organizations members

are coordinated. The four basic structural forms are the functional form, divisional

structure, matrix structure and network structure.

i.PURCHASE AND STORES DEPARTMENTFunctions:

Making the availability of materials Reasonable price Information about the availability Investigation and selection sources of supply Fallowing up of order to ensure prompt deliveries Ensure proper packing, transportationDocumentation and flow of activities of purchase department:

Materials requirement slips (MRS) from production department. MRS received by purchase and stores department.


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Enquiries sent to vendors or advertisement issued calling for seated offers withinspecified time.

Offers/quotations received all opened on the specified date by representatives ofpurchase, user department, audit or finance.

Tabulation of quotation and recommendation of purchase department.Credit and duration:

Normally Riya Chemy will get 30days credit from suppliers. This period varies

from 30 to 90 days; according to the value of the materials purchased and the

demand for the product, which is received by the user department. Sometimes Riya

Chemy pays advances to suppliers. Riya Chemy collects 20% of the values of

tender which is termed as safety deposit, this is collected because some supplier

quote for less amount and late they wont supply the goods.

STORES:

Material management

Material management is one of the areas covered by the whole process of

management for balanced growth and efficient running of the enterprise. It is

necessary to control the management cost, material supply utilization such a way

that they can lead to:

Proper handling of material. Maximum utilization of production. Minimizing the cost of production Maximizing the margin of profit.

ii. PRODUCTION DEPARTMENTProduction department plays a very important role in the organization as such; it

acts as main centre of whole organization by converting the raw material into

finished products. This department is responsible in carrying out the production

activity evenly and in most efficient manner.


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Objectives:

To follow up the daily production schedule as per the plan To maintain the ethical standards and safety of employees To maintain cost of production as low as possible To upgrade technical efficiency of productionTo maintain integrated relationship with all other departments to maintain the quality

of the product.

Production Department Hierarchy

iii. HUMAN RESOURCE DEPARTMENT

Objective:

To maintain good relationship between the employer and the employees; To maintain good industrial relation; To assist employees in attaining their personal goals so as the organization goal; To select right position for right person and number of employees; To help individual growth;

Manager

Supervisor / Executive

Engineer

Trainee

Workers


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Working Hours:

General shift : 09:30-18:00 Break : 13:00-14:00

Human Resources Department Hierarchy

IV.FINANCE DEPARTMENTObjectives:

Maintenance of adequate liquid assets Profit Maximization

b. Increase In Revenuec. Controlling Costsd. Minimizing Risk

Wealth Maximization

HR Manager

Executive

Officer

Trainee

Assistant


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Functions:

Planning and organizing the funds. Directing and controlling the funds. Minimizing the loss.

V.WORKING CAPITAL:

Working capital is daily requirement of funds to carry out all operation and

function of company smoothly and efficiently without interruption. RIYACHEMY

is hypothecated with the bank, drawing of working capital requirements. Drawing

of money from depends on stock, cost and margin.

This percentage of margin is decided by bank, i.e. how much to lend to the

company. Excessive working capital impairs profitability and on other hand

inadequate amount of working capital can threaten the solvency of the firm. The

working capital requirement changes according to the change in business activity

Finance department hierarchy

Manager

Executive

Officer

Assistants


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VI.MARKETING DEPARTMENT

Objectives:

To analyse marketing opportunities. To satisfy the customer wants as the business exists only due to existence of

customer demands.

To distribute the products in time.Functions:

The function included and performance in the marketing process and called

marketing functions are:

A. PRODUCT PLANNINGThe product planning is most tangible and important single components of

marketing. The product policy, product planning and strategy are cornerstone of

marketing program. Product planning is companys strategy for marketing its

product.

MARKET SEGMENTATION

Market segmentation gives format recognition to facts the requirement of

customers is different in quality and quantity. So we can formulate specific segment

of the market so that supply will have best co-relation with demand. Each market

segment can be selected as market target to be reached.

PRICING POLICY

The pricing policy provides general framework within which managerial decisions

are made on pricing the products. These are guidelines to carry out pricing strategy.

Pricing policy may change or adopt themselves with the changing objectives and

changing environment of the market.


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B. CHANNELS OF DISTRIBUTION:The channels of distribution is set of interdependent institutions participating in

marketing activities involved in movement of goods from primary producer to

ultimate customers.

There are several routes, which can be used for distribution of product. They are:-

Direct sales. Sales through industry distributor Sales through agents and distributors Sales through agent

C. ADVERTISINGThe following are the various modes of advertising media used by Riya Chemy

Internet Media ( News Papers & Add Agency )

D. PACKINGPacking is very important to make sure the product safety till it reaches the

customer. Packing of products will be handled by packing sections. For packing,

boxes and covers will be used.

E. LABELING:Labelling is one of the major roles of marketing department. This tells about

products briefly and other information about the same labelled boxes are prepared

at packing companies under the contract.


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Marketing Department Hierarchy:

STRATEGY:

Strategy is the systematic action allocation of resources to achieve company goals. A

strategy is defined as a coherent set of action aimed at gaining a sustainable advantageover competitors by improving market position and effective allocation of resources vice-

versa. Thetwo important areas which determine achievement of objective of the

organizations.

1. Pricing2. Waste elimination

STAFF:Riya Chemy is organizing several training and development programs. It acquires

engineering graduates, diploma, and ITI and multi skilled qualification to utilize their

skills.

HOD

Marketing

Market

Managers

Marketing

Executive

Marketing

Sales person


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STYLE:

Riya Chemy follows democratic style of leadership. The elected representative will try to

do what the majority of subordinates desire. Decision making process is decentralized so

the lower level employees are contributing towards the decision making process in the

organization. By decentralizing, the individuals at lower levels are closer to the problem

area in the organization. The employees are given importance in considering their

opinions for any organizational issues.

SKILLS:

Skills refer to the distinctive capabilities of an organization. Skills possessed by the

employees in the organization are one of the important factors determining the success of

the organization. These skills of the employees will have a direct impact on the on their

productivity and performance. A highly skilled employee can perform his work both

effectively and efficiently.

SHARED VALUES:

Shared values are the super ordinate goals of the organization. The shared values govern

and regulate the behavior of the member of the organization. These are the values shared

by the all members in the organization. Organization develops the mission statement toshare the ultimate aim of the organization with its employees and customers. A clear

thoughtful mission statement provides employees with a shared sense of purpose,

direction and opportunity.

SYSTEM-

It means set of protocols which are identified to carry out the activates in a prescribed

manner. This should be carried out by the organization in all situation, systems differ

from organization to organization. There are various systems like performance

management system, production system, information s.


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CHAPTER-4

SWOT ANALYSIS

Appraising a companys resource strengths and weakness and its external opportunities

and threats, commonly known as SWOT analysis, provides a good overview of whether

its overall situation is fundamentally healthy or unhealthy.

STRENGHTS

The company has a good brand name. There are highly skilled and committed employees. There are large numbers of customers spread all over the country. Worlds class quality management and control. RiyaChemy by Schneider electric offer a unique combination and innovation

and Legendary Reliability.

Reliability, Productivity and Availability of information systems worldwideby protecting hardware and data from the On-going threat of power

disturbances.

WEAKNESS

Under-utilization of resources because of overstaffing. There is less coordination between different departments. The employees have become less productive because of job security.

OPPORTUNITIES

Growth through mergers: The Company can tie-up with other companywhich have

Strong distribution channel so that it would be possible to increase its whichin turn brings profit to the company.


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Superior customer service:The companys aim should not only to producegood products but it should satisfy its customers who are using their products

by getting feedback, so that the company would come to know the taste and

preferences of its customers.

To give stiff competition to its competitors: The Company must understandthe market condition and should bring out new products at a reasonable price

with good quality.

Utilizing the skilled manpower to maximum extent.

THREATS

Competition: The Company is facing stiff competition from its rivals. Threat due to globalization, privatization and liberalization: Since more

number of foreign companies is also entering into this segment, the company

is finding difficult to withstand its position in the market by facing

competition with foreign as well as national companies.

Increase in cost of raw materials: The Company is finding it difficult tomaintain the price levels of its products due to increase in cost of raw

materials.

Emergence of substitutes.


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CHAPTER5

ANALYSIS OF FINANCIAL STATEMENT

Sl.No Ratios 2009-2010 2010-2011 2011-2012

1 Current ratio 1.67 2.17 1.45

2 Cash ratio 0.01 0.03 0.03

3 Fixed asset turnover ratio 6.27 5.62 4.69

4 Return total assets 0.12 0.11 0.12

5 Quick ratio 0.97 1.53 1.01

6 Gross profit margin 22.52 21.09 20.65

7 Net profit margin 4.92 4.54 4.37

8 Current assets to fixes asset ratio 1.3 1.34 1.11

9 Solvency ratio 1.00 0.73 1.00


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ANALYSIS

The table shows that the current ratio of Riya Chemy in all three financial yearwas increasing

The above tables shows that the ratio was 1.67 in the year 2009-10 & it increaseto 2.17 in the year 2010-11, 1.45 in 2011-12.

Except the fluctuation in few years, it is 0.1, 0.3, and 0.3 in the three financialyears.

The ratio in the year 2010 was 6.27 in the year 2011 is 5.62 in the year 2012 was4.69

The above analysis indicates that the fixed assets are not efficiently used in theyear 2009-10& 2010-11.It kept on increasing for next 3 year i.e. 2009-10, 2010-

11, 2011-12.

Here the ratio is more than 100% it shows that the investment on fixed assets ismore.

In the year 2009-10 0.97 the ratio is & it has increased to 1.53 in the year 2010-11& it increased in the year 2011-12 as 1.01

In the year 2009-10 the ratio is 22.752 & it has decreased to 21.01 in the year2010-11& it has increased in the year 2008-09 as 20.65

In the year 2009-10 the ratio is 3.7 & it has increased to 5.05 in the year 2010-11& it has decreased to 6.04 in the year 2011-12.

In the year 2009-10 the ratio is 14.29& it has increased to 14.57, in 2011-12decreased to 8.53.


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CHAPTER-6

LEARNINGEXPERIENCE

The main objective of the summer project was to have brief study of organization, its

background, nature of business, its working, analyses the various product profiles of the

organization etc. This is the first experience to me in Riya Chemy when I undergone

summer project training in that company for ten weeks. This training helped me a lot to

understand how the classroom theories are applied in the organizations. Staying in Riya

Chemy for almost ten weeks gained me basic knowledge to know more details about

how and when it was started, how its function, its business conditions in the initial stage

and its ground growth.

Riya Chemy gave me the immense opportunity to study the behavior, policies, practices,

strategy and their operations. It helped me gain knowledge about the companys

operations, products, competitors etc.

To begin with the introduction part that, as RiyaChemy being Iso Company. I got to

know the working of the company and how the staff and people work and how is their

work culture. It was the second best experience for a fresher like me. The management

was very co-operative and it was a great experience with the staff as they helped me all

my queries and needs and they supported me a lot.

To begin with the training, I had to report to the company everyday sharp at 9.30 am and

had to sort the files in their cabins. Then I came to know about the integrity part and

how well we should be in a formal context with other people. I learnt a lot about the

manufacturing sector, how Product is generated where it is transmitted and stored. What

processes are involved and who are the major producers. How the financing of theproducts manufacturing projects go on.


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PART-B

CHAPTER1

General Introduction:

This report deals with the financial performance of Riya Chemy For the financial years

2009 to2012.

This report briefly explains the subject matter (financial performance) of the study

conducted. The basis for the financial planning, analysis and decision- making is the

financial information. Financial planning, analysis and decision -making is the financial

information. Financial information is needed to predict, compare and evaluate the firmsearning ability. it is also required to aid in economic decision making investment and

financing decision- making.

The first task in the analysis is the selection of the information relevant to the decision

under consideration from the total information contained in the financial statements. The

second task is to arrange the information in a way to highlight comparison among

different variables from balance sheet and income statement of different years. The final

step is that of drawing inferences and conclusions.

The best tool used for finding out trends of an organizations growth over a period of

time is ratio analysis. The variables in the balance sheet provides considerable

information which is eventually helpful for the organization as the trends can be studied

and it forms the basis of drawing important inferences .


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Statements of the Problem:

Statement: -A study on financial performance of Riya Chemy

The study is undertaken to ascertain the companys past present and future financial

conditions, through the use of financial statements analysis techniques such as ratio

analysis, comparative analysis and trend analysis.

The companys profitability and liquidity positions are the two major parameters to be

understood and validated. The profitability can be found through the use of profitability

ratios and the liquidity can be ascertained through the use of the liquidity ratios.

Need of the study:

Financial performance is used to identify the trends and relationships between financial

statement items. Both internal management and external users (such as analysts, creditors

and investors) of the financial statements need to evaluate a companys profitability,

liquidity and solvency.

The objective of financial statement is to provide information about the financial

position, performance and changes in financial position of an enterprise that is useful to a

wide range of users in making economic decisions. Financial statement analysis makes

financial statement understandable, relevant, reliable and comparable. Thus reported

assets, liabilities, equity, income and expenses are directly related to an organizations

financial position and performance using financial statement analysis.

Financial statement analysis are intended to be understandable by readers who have a

reasonable knowledge of business and economic activities and accounting and who are

willing to study the information diligently. Financial statement analysis reports may be

used by users for different purposes.

Financial statement analysis are intended to be understandable by readers who have a

reasonable knowledge of business and economic activities and accounting and who are

willing to study the information diligently . Financial statement analysis report may be

used by users for different purposes:


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Owners and managers require financial analysis report to make important business

decisions that affect its continued operations. Financial analysis performed on financial

statements provides the managements with a more detailed understanding of the

stockholders.

Prospective investors make use of financial report to assess the viability of investing in a

business. Financial analyses are often used by investors and are prepared by professionals

(financial analysts) , thus providing them with the basis for making investment decision .

Financial institutions (banks and other lending companies) use them to decide whether to

grant a company with fresh working capital or extend debt securities (such as a long-term

bank loan or debentures) to finance expansion and significant expenditures.

Media and the general public are also interested in financial analysis reports for a variety

of reasons.

As a tool of financial management, ratios are of crucial significance.

With the help of financial statement analysis conclusion can be draw regarding the

liquidity position of the firm.

Financial statements analysis is equally useful for assessing the long term financial

viability of a firm. This aspect of financial position of a borrower is of concern to the

long-term creditors, security analyst, and the present and potential owners of a business.

Another dimension of the financial statement analysis, relevant from the viewpoint of

management, is that it throws light on degree of efficiency in the management and

utilization of its assets.

Financial statements analysis not only throws light on the financial position of the firmbut also serves as a stepping to remedial measures. This is made possible due to inter firm

comparison.


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Objectives of the Studies:

To evaluate the liquidity position of company. To analyze the profitable position of the company. To offer suggestion if necessary. To analyze the long term solvency and leverage position. To make overall performance analysis.

Scope of the Study:

Financial statements analysis covers the following aspects:

The study is confined only to Riya Chemy.

The scope of the study pertaining in for the last four years i.e. 2009-2010, 2010-2011 ,

2011-2012 and the analysis is done on the basis of published data obtained from the

annual reports by using financial ratios, trend analysis , tables and graphs.

Ratio analysis is used to evaluate financial condition of the firm.

The study determines firms ability to meet its short term and long term obligations.

The study determines firms ability to generate profits.

Methodology:

Research methodology

Exploratory research

An exploratory research focuses on the delivery of ideas and is generally based on

secondary data. It is a preliminary investigation a preliminary investigation, which does

not have a rigid, design. This is because a researcher engaged in exploratory study may

have to change his focus as a result of new ideas and relation among the variables.


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The study conducted through exploratory research with the help of data obtain from

secondary data, there is no specific sample design made or questionnaire used to obtain

information

Data collection technique

Data collection to perform financial analysis was obtained from secondary data sources.

The research involved analysis of secondary data and interpretation the results. The

secondary data sources provided reliable, suitable adequate and specific knowledge to

complete the research.

Secondary sources of data collection employed in the research were obtained from;

The companys audited report for the last four years.

Broachers of Riya Chemy

Companys website

Research databases

Standard reference books for the theoretical information about the analysis techniques.

Data analysis technique:

Financial analysis can be conducted using several techniques and tools. The secondary

data collected was edited, classified and tabulated for analysis. The financial analysis

conducted employs the following analytical tools to perform data analysis;


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Ratio analysis

Comparative balance sheet

Trend analysis and percentage

Limitations of the studies:

The study is restricted to Riya Chemy only The study is based on the financial statements of the company for the last 3 years

only. The past performance is not indicative for future results. This study holds

significant only in the present situation.

Ratios are based on the summarized year- end information, which may not be atrue reflection of the overall years results.

Ratios alone are not adequate for proper conclusions. Ratios may be misleading inthe absence of absolute data.

All the information provided by the company is assumed correct. There were some restrictions in assessing the information in the company. The study of financial performance can be only a means to know about the

financial condition of the company and cannot show a through picture of the

activities of the company.


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CHAPTER-2

DATA ANALYSIS AND INTRPRETATION

Meaning of financial statements:

Financial statements refer to such statements which contains financial information

about an enterprise. They report profitability and the financial position of the business at

the end of accounting period. The team financial statement includes at least two

statements which the accountant prepares at the end of an accounting period.

The two statements are:

The balance sheet

Profit and loss account

They provide some extremely useful information to the extent that balance sheet mirrors

the financial position on a particular date in term of the structure of assets , liabilities and

owners equity , and so on and the profit and loss account shows the results of operations

during a certain period of time in terms of the revenues obtained and the cost incurred

during the year. Thus the financial statement provides a summarized view of financialpositions and operations of a firm.

Financial analysis is largely a study of relationship among the various financial factors

in a business as closed by a single set of statements , and a study of the trend of those

factors as shown in series of statements.

Features of financial analysis:

To present a complex data contained in the financial statements in simple andunderstandable form.


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To classify the items contained in the financial statements in convenient and rational

groups.1

To make comparison between various groups to draw various conclusions.

Procedure of financial statements analysis:

The following procedure is adopted for the analysis and interpretation of financial

statements.

The analysis should acquaint him with principals and postulated of accounting. He should

know the plans and policies of the management so that he may be able to find out

whether these plans are properly executed or not.

The extent of analysis should be determined so that the sphere of work may be decided. If

the aim is find out. Earning capacity of the enterprise then analysis of income statements

will be undertaken. On the other hand, if financial position is to be studied then balance

sheet analysis will be necessary.

Steps involved in the analysis of financial statements:

Analysis Comparison Interpretation

Objectives of financial statements:

Financial statements are generally analysis with the following objectives

To determine the profitability or earning capacity of the concern

To know the progress of the concern To judge the financial position of the concern To know the trends of the business i.e. purchases, sales, profits, liquidity,

solvency, etc.

To measure the financial performance of the concern


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To assess the debt-capacity of the concern To measure the efficiency of operations To estimate the future prospects of the concern To facilitate decision-making and policy formulation To judge managerial performance and efficiency To facilitate analytical presentation data

Meaning of financial analysis:

The term financial analysis is also known as analysis and interpretation of financial

statements refers to the process of determining financial strength and weakness of the

firm by establishing strategic relationship between the items of the balance sheet , profit

and loss account and other operative data.

The first task of financial analysis is to select the information relevant to the decision

under consideration to the total information contained in the financial statements. The

second step is to arrange the information in a way to highlight significant relationship.

The final step is interpretation and drawing of inference and conclusions. Financial

statement is the process of selection, relation and evaluation.

Purpose of analysis of financial statements

To know the earning capacity or profitability To know the solvency To know the financial strengths To know the capacity of payment of interest and dividends To make comparative study with other firms To know the trend of business To know the efficiency of management


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enterprise can choose those techniques which are suitable to its requirements. The

principle techniques of financial analysis are :

Comparative financial statements Ratio analysis

Comparative financial statements:

When financial statements figures for two or more years are placed side-side to facilitate

comparison, these are called comparative financial statements. Such statements not only

show the absolute figures of various year but also provide for columns to indicate to

increase or decrease in these figures from one year to another. In addition, these

statements may also show the changes from one year to another on percentage form.

Such cooperative statements are of great value in forming the opinion regarding the

progress of the enterprise.

Functions of comparative financial statements

To simplify data To make inter period/ inter-firm comparison To indicate the trends To enable forecasting To indicate the strength and weaknesses of the firm Compare the performance To analyze expenses Analyze profits

Tools for comparative of financial statements:

Comparative financial statement is a tool of financial analysis that depicts change in each

item of the financial statements in both absolute amount and percentage term, taking the

item in preceding accounting period as base.

Comparison and analysis of financial statements may be carried out using the following

tools:


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Comparative balance sheet: - The comparative balance sheet shows increase and

decrease in absolute terms as well as percentages, in various assets, liabilities and capital.

A comparative analysis of balance sheet of two periods provides information regarding

progress of the business firm.

The main purpose of comparative balance sheet is to measure the short-term and long-

term solvency position of the business.

Ratios analysis:

Meaning:

Absolute figures expressed in financial statements by themselves are meaningfulness.

These figures often do not convey much meaning unless expressed in relation to other

figures. Thus, it can be say that the relationship between two figures, expressed in

arithmetical terms is called a ratio.

Types of ratios:

Proportion or pure ratio or simple ratios Rate or so many times Percentage Fraction

Functions of ratio analysis:

Helpful in analysis of financial statements Simplification of accounting data Helpful in comparative study

Helpful in locating the weak spots of the business Helpful in forecasting Estimate about the trend of the business Fixation of ideal standards Effective control Study of financial soundness


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Classification of ratios:

In view of the financial management or according to the tests satisfied,

Various ratios have been classified as below:

Liquidity ratios:

These are the ratios, which measures the short-term solvency or financial position of a

firm. These ratios are calculated to comment upon the short-term paying capacity of a

concern or the firms ability to meet its current obligations.

These ratios measure the ability of the company to meet its financial obligations. In

liquidity ratios by establishing a relationship between cash and other current assets to

current obligation, provide a quick measure of liquidity.

Debtequity ratio Net worth ratio Fixed assets to proprietors ratio Current assets to net worth ratio Fixed assets ratio

Activity ratios:

These ratios are employed to evaluate the efficiency with which the company manages

and utilizes its assets. These ratios are also called turnover ratio because they indicate the

speed with which assets are being covered or turned over into sales. Activity ratios, thus

involved a relationship between sales and assets are managed well. The better

management of assets, the larger the amount sales. Several ratios can be calculated to the

judge effectiveness of assets utilization. These ratios are:

Stock turnover ratio

Debt turnover ratio Creditors turnover ratio Current assets turnover ratio Fixed assets turnover ratio


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The fund-flow statement is a statement which shows the movement of funds and is a

report of the financial operations of the business undertaking. It indicates various means

by which funds were obtained during a particular period and ways in which these funds

were employed. The word fund is used to denote working capital.

Common-size statements:

The common-size statements consist of balance sheets and income statements are Shown

in percentages. The figures are shows as percentage of total assets, total liabilities and

total sales. The different assets are expressed as percentage of the total asset, similarly

various liabilities are expressed as percentage of the total liabilities. These statements are

also known as component percentage. The shortcoming of the comparative statements

and trend percentages where changes in items could not be compared with the total can

cover up. The analysis is able to assess the figures in relation to total values.

Trend analysis:

The financial analysis may be analyzed by computing trends of series of information.

This method determines the directions upward and downwards and involves the

computation of the percentage relationship that each statements item bears to the same

item in base year. The information for a number of years is taken up and one year

generally the first year, is taken as base year. The figure of the base year is taken as

hundred and trend ratio for other year are calculated on basis of base year and trend is

analyzed.

C .V.P analysis

C. V. P analysis is an analytical technique for studying the relationship between cost,

volume, and price of profits. It is a device used and to determine the influence of theprofit planning process of the firm. The formal profit planning and control involves the

use of budget and forecast. C.v.p. Analysis provides an overview of the profit planning

process and helps to evaluate the purpose of reasonableness of such budgets and

forecasts. It helps the management to seek most profitable combination of cost and

volume.


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RATIO ANALYSIS:

1. Current Ratio:

The current ratio expresses the relationship between the current assets and current

liabilities. The current ratio of a firm measures its short term solvency. I.e. is the ability to

meet short-term obligations. It indicates the rupee to current asset available for each

rupee of current liability

Table 1

Current Ratio:

Year

Current

Assets Rs.in

Lakhs

Current

Liabilities Rs. In

Lakhs

Ratio

2009-10 3094561.73 1856358.35 1.67

2010-11 3444046 1587081.55 2.17

2011-12 3734486.01 2570534 1.45

Current Ratio = Current Assets

Current Liabilities


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Interpretation:

The current ratio of Riya Chemy for the year 2009 is 1.67 times &it increased to times in

the year 2010

In the year 2010 it is 2.17 times in the year 2010 it is 1.45times &in the year 2011 it is

10.79times.

The graph shows that the current ratio of Riya Chemy in all five financial year was

increasing

0.00

500000.00

1000000.00

1500000.00

2000000.00

2500000.00

3000000.003500000.00

4000000.00

Current

Assets Rs.in

Lakhs

Current

Liabilities Rs.

In Lakhs

Ratio

Current Ratio

2009-10 2010-11 2011-12


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2. Fixed assets Turnover Ratio:

It is also called as sales to fixed assets ratio. It measures the efficient use of fixed assets.

This ratio is a measure of efficient use of fixed assets.

Table: 2

Year Sales Net fixed assets Ratio

2009-10 15035735 2396151.51 6.27

2010-11 13828565 2461377 5.62

2011-12 15638187 3336405.97 4.69

0

2000000

40000006000000

8000000

10000000

12000000

14000000

16000000

Sales Net fixed

assets

Ratio

2009-10,

6.27

2010-11,

5.62

2011-12,

4.69

AxisTitle

Fixed Assets Turnover Ratio

Fixed assets turnover Ratio = Cost of Goods sold

Net Fixed Assets


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Interpretation:

The above analysis indicates that the fixed assets are not efficiently used in the year

2006-07 & 2010-11.

It kept on increasing for next 3 year i.e. 2007-08, 2008-09, 2009-10.

3. Quick Ratio:

This ratio is also known as acid test ratio or liquid ratio. It is a more severe test of

liquidity of a company. It shows the ability of a business to meet its immediate financial

commitments. It is used to supplement the information given by the current ratio

The quick assets include cash, debtors (excluding bad debts) and securities which can be

realized without difficulty.

Quick liabilities refers to all current liabilities expect bank overdraft.

Table: 3

YearQuick

Assets

Current

LiabilitiesRatio

2009-10 1804061.73 1856358.35 0.97

2010-11 2424546 1587081.55 1.53

2011-12 2589486.01 2570534 1.01

Quick Ratio = Quick Assets

Current Liabilities


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Interpretation:

to the standard ratio 0.97 though in year 2010-11 it has reached 1.53 which is highest

in the study period which indicates the firm does not have the ability to meet its

short term ability therefore the quick ratio is not satisfied.

4. GROSS PROFIT RATIO:

Gross profit ratio measures the relationship of gross profit to net sales and is usually

represented as a percentage. Thus, it is calculated by dividing the gross profit by sales:

0

1000000

2000000

3000000

Quick AssetsCurrent

LiabilitiesRatio

Quick Ratio

2009-10 2010-11 2011-12

Gross Profit Ratio = Gross Profit *100Sales


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Table: 4

YearGross

profit

Sales Ratio

2009-10 3114660 13828565 22.52

2010-11 3171698.5 15035735 21.09

2011-12 3228737 15638187.08 20.65

Interpretation:

In the year 2009-2010 is 22.25 times&it decreased to times in the year 2011

In the year 2011 it is 21.09 times in the year 2012it is 20.65 times.

0

5000000

10000000

15000000

20000000

Gross

profit

Sales Ratio

Gross Profit Margin

2009-10 2010-11 2011-12


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5. NET PROFIT RATIO:

Net profit ratio establishes a relationship between net profit (after taxes) and sales, and

indicates the efficiency of the management in manufacturing, selling, administrative and

other activities of the firm. The ratio is the overall measure of firms profitability and is

calculate.

Table: 5

Year

Earnings after

interest and

taxes

Net Sales Ratio

2009-10 680066 13828565 4.92

2010-11 682043 15035735 4.54

2011-12 684019 15638187.08 4.37

Net Profit Ratio = Net Profit *100Sales


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Interpretation:

The current ratio of Riyachemy for the year 2010 is 4.92 times&it decreased to times in

the year 2011

In the year 2011 it is 4.54 times, in the year in the year 2012 is4.37 it is times.

6. Cash Ratio:

Although receivables, debtors and bills receivable are generally more liquid than

inventories, yet there may be doubts regarding their realization into cash immediately or

in time. Hence, some authorities are of the opinion that the absolute Liquid ratio should

also be calculated together with current ratio and acid test ratio so as to exclude even

receivables from the current assets and find out the absolute liquid assets.

0

5000000

10000000

15000000

20000000

Earnings after

interest and

taxes

Net Sales Ratio

Net Profit Margin

2009-10 2010-11 2011-12

Absolute liquid Ratio = Absolute Liquid Assets *100

Current Liabilities


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Table: 6

Year

Cash in hand

and at bank +

Marketable

securities

Current

Liabilities Rs.

In Lakhs

Ratio

2009-10 22540.3 1856358.35 0.01

2010-11 51701 1587081.55 0.03

2011-12 64972.66 2570534 0.03

In the year 2011 it is 0.03 times, in the year 2012 it is 0.03 times.

0

500000

1000000

1500000

2000000

2500000

3000000

Cash in

hand and

at bank +

Marketable

securities

Current

Liabilities

Rs. In Lakhs

Ratio

Cash Ratio

2009-10

2010-11

2011-12


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7. Return on total assets:

Table: 7

Year

Net profit

after Interest

and Tax

Total Assets Ratio

2009-10 680066 5490713.24 0.12

2010-11 682043 5981423 0.11

2011-12 684019 7070891.98 0.10

Interpretation:

The current ratio of Riya Chemy for the year 2010 is 0.01 times&it decreased to times in

the year 2011

In the year 2011 it is 0.03 times, In the year in the year 2012 is 0.03 it is times

0

2000000

4000000

6000000

8000000

Net profit after

Interest and Tax

Total Assets Ratio

Return on Total Assets

2009-10 2010-11 2011-12


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8. Current Assets to Fixed Assets Ratio:

The current ratio is the ratio that expresses the relationship between current assets and

fixed asset. Current assets refer to all those assets that change into cash within a year.

Fixed assets refer to net assets i.e., fixed assets to minus depreciation. The fixed assets of

a concern have contributed to sales. The current assets to fixed assets ratio is generally

expressed as a rate. It can be calculated using the following formula.

Table: 8

Year Current AssetsFixed

assetsRatio

2009-10 3094561.73 2396152 1.3

2010-11 3444046 2461377 1.34

2011-2012 3734486.01 3336906 1.11

Currentsassets to Fixed AssetRatio = Current Assets

Fixed Assets


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Interpretation:


the year 2011

In the year 2011 it is 1.34 times, in the year in the year 2012 is 1.11 times.

99. Solvency Ratio:

This ratio is a small variant of equity ratio and can be simply calculated as 100-equity

ratio, i.e., continuing the example taken for the equity ratio, solvency ratio = 100-66.67 or

say 33.33%. The ratio indicates the relationship between the total liabilities to out sider to

total assets of a firm and can be calculates as follows:

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

1 2 3

Current Assets

Fixed assets

Ratio

Solvency Ratio = Tax Liabilities to Outsiders

Total Assets


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Table: 9

Yeartotal

liabilities

total assets Ratio

2009-10 5490713.24 5490713.24 1.00

2010-11 2570534 3520046.00 0.73

2011-12 7070891.98 7070891.98 1.00

Interpretation:


the year 2011

In the year 2011 it is 0.73 times, in the year in the year 2012 is 1.00 times

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

toyal lialabilities total assets Rato

Series1

Series2

Series3


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Trend Analysis:

FOR THE YEAR 2009 T0 2012 IN THOUSANDS:

2009-10 2010-11 2011-12 2010% 2011% 2012%

Liabilities

proprietors Capital 1,671,160.22 1847601 1947319.35 100% 110.55 116.52

Secured loan 699,639.83 1453654 1478511.06 100% 207.77 211.32

Other liabilities 740000 - 300000 100% 40.54

Current liabilities 1856358.35 2570534 159140.00 100% 138.47 8.57

Total liabilities 4967158.4 15922013 3884970.41 100% 320.54 78.21

Assets

Fixed assets 2396151.51 2461377 3336405.97 100% 102.72 139.24

Deposits 31000 - 31000 100% 100

Closing stock 1290500 1995500 1145000 100% 154.62 88.72

Sundry debtors 1666239.68 1996129 2052494..37 100% 119.79 123.18

Cash 22540.30 51701 64972.66 100% 229.37 288.25

Bank 84281.75 300716 421018.98 100% 356.79 499.53

Total Assets 5490713.24 6805423 7070891.98 100% 123.94 128.77


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Category 1 Category 2 Category 3 Category 4

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Series 2

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Page - 70

CHAPTER-3

FINDINGS

The current ratio i.e. 1.67% of the company higher than the ideal ratio. It shows a good

financial position of the company.

The quick ratio i.e. 0.97% of the company lower than the standard ratio. It shows

company good liquidity position.

The working capital turnover ratio of the company is much lower which indicates

efficient management of working capital.

The debtors turnover ratio of the company is decreasing from year to year which

indicates that more steps should be taken by the company so as to realize the debt from

the customers.

Fixed assets turnover ratio is good for the company it indicates efficient utilization of

fixed assets in generating sales. But there was decline in the current year.

The net profit ratio talks about the firms business affairs and RiyaChemys net profits

have increased and in the current year decreased this is due the reason that the net profits

are not increased proportionately to sales.

The fixed assets net worth ratio measures the profit earning capacity of the business and

it is showing an increasing which is very good for the company.

The cash flow statement shows that in the 2011 more cash is being used for the financing

activities than in the year2010.

The inventory turnover ratio of the company maintain inefficient manner.


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Page - 71

CHAPTER-4

SUGGESTIONS

It is suggested Riya Chemy to continue the same with respect to the current ratio.

It is estimated to Riya Chemy to improve fixed assets ratio.

It is suggested for Riya Chemy to keep the same increasing trend in order to make its

shareholder happy.

Riya Chemy should plan while purchasing the assets about their returns so that it can

move positive every upcoming year.

The firm should try to improve its net profit because to sustain in the sector and to have a

good profitability it must improve on this region.

The fixed assets turnover ratio is considerably increasing and the firm should continue to

do so in the near future.

To curb power thefts and losses arising out of it Riya Chemy should devise new

technology to check on power thefts.


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CHAPTER-5

CONCLUSION

As per the study of analysis conducted on the financial performance of Riya Chemy for

the last 3 years i.e. 2009 to 2012 it is seen that the public sector company its liquidity

position has been good over the last 3 years. The profitability of the firm has also been

fluctuating over the years.

Being a public sector company the firm should concentrate on providing better service to

the public rather than increasing its profits from this point of view Riya Chemy has been

doing a remarkable job and it is having a well-respected, trusted, brand and brand equity

in the market.

Riya Chemy has adopted a unique technique in the organization compare to any other

power generation organizations. The shareholders are also enjoying an increasing trend in

the dividend payout.

As per the overall study it can be conclude that the financial position of the firm during

the last five years is satisfactory.

The income of Riya Chemy is steadily increasing and it shows some increase and

decrease and the company should try to increase its income and reduce its expenses to

increase its profitability.

The shareholders are also enjoying an increasing trend in the dividend payout and the

company should try to increase this future

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