Sugarcane Financial Project

CHAPTER – I

INTRODUCTION OF THE STUDY

1.1. Introduction

India stands first in the world in sugarcane and sugar production. Sugarcane is

cultivated in about ten lakh acres with 28.3 crores tones production. In Andra Pradesh,

sugarcane crop is cultivated in 4.5 lakh acres with 136 lakh tones production. It this half of

production is useful for 6.5 lakh tones sugar preparation for seed purpose and rest is for

jiggery preparation.

In Andhra Pradesh average yield per acre is 28 tones only. To improve the yield and

for serving the farming community Nagarjuna Fertilizers and chemicals limited is giving

these hints to be followed to increase yield in sugarcane cultivation.

1.2. Climatic requirements

A growing season which is long and warm with adequate rainfall or irrigation, long

hours of bright sunshine and higher relative humidity with permits rapid growth to build up

adequate yield more tonnage and a ripening season of around 2-3 months duration having

warm days, clear skies, cool nights and relatively a dry weather without rainfall and higher

difference in day (maximum) and night (minimum) temperatures for buildup of sugar are

required.

1.3. Seeds and Sowing

Land Preparation

Soils to be worked to fine tilt to a depth of 20 cm at least once in 2 to 3 years. Open

trenches of 30 cm with, 20 cm depth and 50 cm ridges have to be formed by 80 cm between,

cane rows for early varieties and 100 cm for late verities is to be adopted.

1.4. Seed Material / Planting

Immature seed material taken from tops of narrowed canes or from entire canes of

young crop of about 7 to 8 months age is to be planted. 16000 three budded setts are to be

planted per acre. Water may be guided through planting furrows and allowed to soak in the

soil. Then seed selts are to be planted walking backwards the setts with the buds turned to the

sides are to be pressed into wet soil to not more than 2.5cm depth. The depressions made in

the furrows by walking have to be leveled while proceeding with planting.

1.5. Seed treatment

Dipping of setts, which are sufficient for one acre planting for 15 minutes in a solution

containing 150 gms carbendazim and 600 ml of p malathion mixed in 300 Liters of water

before planting, will control pineapple disease scale insect.

To void grassy shoot disease hot water treatment of seed material at 52 for 30 minutes

or treatment.

1.6. Various Kinds of sugar under a variety of name

Barley Malt

Brown Sugar

Cane sugar

Corn syrup

Dextrose

Fructose

Fruit sugar

Glucose

High-fructose corn syrup

Honey

Icing sugar

Invert sugar

Jiggery

Lactose

Maltose

Maple syrup

Powdered sugar

Raw Sugar

Rice syrup

Saccharin’s

Sucrose

Sugar beets

Turbinate’s

1.7. Sugarcane Cultivation in would wide

Sugarcane is one of six species of a tall tropical Southeast Asian gross (Family) having

stout fibrous jointed stalks whose sap at one time was the primary sources of sugar.

Sugarcane is composed of six specices of the genus sucharun in tribe and ropogonece. The

cultivated species are complicated hybrids and all species interbreed. Over 100 countries

grow sugarcane. There are 1,30,000 Km2(32million areas) of sugarcane plantations

worldwide. At present Cuba, Mexico, Brazil china India and Thailand are the leading

producers of cane Sugar and the US, Rusia, France, Germany, Italy, Poland and Netherlands

leading producers of beet sugar in the world. Brazil is a major grower of sugarcane where it is

used to produce sugar as well as to provide alcohol used in making gasohol and biodiesel

fuels.

1. 8. Cultivation

Sugarcane is native to New Guinea. Its culture requires a tropical or subtropical

climate, with a minimum of 60 cm (24 in) of annual moisture it is one of the most efficient

photosyn the seizers in the plant kingdom, able to solar energy into biomass. Sugarcane is

propagated from cuttings, rather than from seed. Each cutting must contain at least one bud,

and the cuttings are usually planted, a stand of cane can be largest several times, after each

harvest, the cane send up new stalks, called ratoons. Sugarcane is harvested by hand or

mechanically when harvested either by hand, the field set on fire. The fire spreads very

rapidly. Burning away the leaves but bearing the water-rich stalks and root unbar med.

Harvesters then cut the standing cane just above the growth with knives. A skilled cane

harvester can cut 500 kg of sugarcane in an hour.

1.9. Sugarcane Cultivation in India

In India 25 million farmers are egaged in sugarcane cultivation on 3.4 million hectares

of land, though sugarcane occupies only 2 percent of the total cultivated area it contributes

7per cent to the total value of agricultural output, the sugar industry is the largest among the

processing industries in the country, next only to the textile. It employees almost one million

people in production and marketing.

1.10. Sugar research and development

“World’s first the sugarcane research farm was started in Coimbatore (T.N)”.

“Then the Indian institute of sugarcane research (ISSR) an institute under ICAR is

engaged in research aimed at improving the cane and sugar yield.

Next “EID parry (India) Ltd has developed a tissue culture facility for improving cane

planning yield and recovery it plans to supply one lakh health and diseases free plant lets of

farmers”.

“Phytotron agro products (India) PVT. Ltd has introduced biotechnology based

chemical called phytotron sugar reopener (PSR)”.

Then “The Central Salt and Marine Chemicals Research Institute (CSMCRI) has

developed a technology which increase the production of sugar by over 10 recent and also

improve its quality and that of molasses”.

“A company, ponni sugar I chemicals Ltd, at erode, Tamilnadu technology for

superation process”.

1.11.(i) Co – generation of power in sugar mills

Bagasse, a by product of sugar industry can be utilized for co-generation of

power in sugar mills. The country’s production of bagasse is expected to reach 44.30 million

tones at the end of the eight plan in Tamilnadu two co-operative sugar mills (MRK

cooperative sugar mill and charger sugar mill are already co-generating lower and 5 more

mills are setting up co-generation plants.

1.11.(ii) By products of sugar industry

Molasses and bagasse are two important by products of sugar industry,

molasses is used in the manufacture of alcholo and bagasse has been used as a fuel in boilers

for steam generation for captive use in the sugar mill, in the manufacture of paper and new

print and in generation of electricity again by burning in boilers to generate steam to run

steam turbines.

1.11.(iii) Alcohol industry

The alcohol industry in the country has been affected by the increase in the

price of molasses. Some of the units even went out of production. The industry has started

looking for some alternate material to molasses for the production of alcohol in view of high

price of molasses in the country. The all India distillers association (AIDA) had invited

representatives from mine Lange companies from Europe and America to visit India to make

a presentation of their technologies at a seminar organized by it among the non – food cash

crops sugarcane is the most fast catching crop in Tamil Nadu.

1.12. Statement of the problem:

Analysis of financial statement is one of the necessary important part of every business

enterprise without finance neither any business can be started nor successfully run. Provision

of sufficient funds at the required time is the key of success of a concern. It is a starting point

for marking mans be tore using any sophisticated forecasting and budgeting procedures.

Finance statement is regarded as the life blood of business enterprise.

1.13. Objectives of the study

The study has the following objectives

1. To know financial position of Bajaj Hindus than Ltd.

2. To compare the current year financial position with previous year financial position.

3. To analysis the financial statement Bajaj Hindus than Ltd.

4. To find the financial problem and giving suitable suggestion to solve such problem.

1.14. Methodology

This study was used to analyses financial statement of Bajaj Hindus than Limited. Its

purpose is the statements were changed to compare one method to anther method. The case

study method was used for this study. The annual reports auditing reports and financial

statements were collected for this study.

1.15. Limitations of the study

This study has following limitations:

1. Due to non availability of data the study is concerned with only five from 2004 – 2005

to 2008 – 2009.

2. The study is concerned with finance therefore only secondary data were used for this

study.

1.16. CHAPTER SCHEME:-

This study contains five chapter schemes.

(i) Chapter 1:

This chapter contained the introduction of Bajaj Hindus than sugar mills limited.

(ii) Chapter 2:

The chapter contained the profile of the Bajaj Hindus than sugar mills limited.

(iii) Chapter 3:

This chapter contained performance analysis of Bajaj Hindus than sugar mills

limited.

(iv) Chapter 4:

This chapter contained analysis and interpretation of financial performance of Bajaj

Hindus than sugar mills limited.

(v) Chapter5:

This chapter discussed finding suggestion and conclusion of the study.

CHAPTER - II

2.1. Profile Bajaj Hindustan Limited

Bajaj Hindustan Limited (BHL) was incorporated on 23rd November 1931 under the name the

Hindustan sugar mills Limited - on the initiative of jamnala Balaji- a businessman, confidante,

disciple and adopted son of Mahatma Gandhi. He sought Gandhiji blessings in this new venture,

which apart from being a sound commercial proposition would also meet a national need, till then

there were barely thirty sugar factories in the country.

The group principal activity is to menu facture sugar and industrial alcohol. It has ten sugar

plants. Which are all located in the northern Indian state of Uttar Pradesh. These ten plants have an

aggregate sugarcane crushing. Capacity of 96000 tons crushed per day (cd) it produces 34.24 million

liters of ethanol annually. The company generates 397 magawatts of power from the bagasse.

Produced in its sugar mills.

2.2 Industry Analysis

The site selected for the first plant was at Golagokarannath, district lakhimpur kheri in the

Terai region of Uttarpradesh (UP) an area rich in sugarcane.

The distillery unit at this plant commenced production during the end of world war 11 in

1944. In the initial few years the major output was in the of power alcohol as an additive to petrol,

which was then in short supply. Then unit was the first to supply alcohol-mixed petrol of the army.

In 1967 a new company – sharda sugar & Industries limited – was established as a of

Hindustan sugar mills limited was established as a subsidiary of Hindustan mills limited under this

new subsidiary a sugar plant with a cane crushing capacity of 1400 tcd was set up in 1972 ut

paliakalan. A large cane supplying centre at a distance of about 70 kilometres from 010lagokaranth.

2.3. Objectives

The objective new unit was primarily to help the cane growers of the area supply their

produce to the new location closer.

Fields there by cutting down on transportation costs. The capacity was subsequently increased

in stages.

In the year 1988 the Hindustan sugar mills limited was renamed as Bajai hindusthan limited

and shorty there ofter in 1990 Sharda. sugar Industries.

The company embarked on an aggressu Greenfield expansion drive in 2003 – 2007 starting

with plant at kinaani near meerut (up) which was completed in a record time of just seven

months as again.

2.4. Business information:-

Today with its sugar manufacturing facilities across location in up, BHL has a cane

crushing capacity of 96,000 tcd and also the country’s largest ethanol producer with an output if

480 KLI day.

In an acquisition move, the company took over the pratuppur sugar and industries

limited (PCIL), district decria, Eastern up in December 2005. This plant, in operation since 1903,

had a crushing capacity of 3200 lcd. Which was increased to 6000 tcd in the subsequent sugar

season 2006 – 07.

PSIL was subsequently renamed Bajaj Hindustan sugar and Industries limited

(BHSIL) and is a subsidiary of BHL. This acquisition provide BHL a strategic foothold in the

sugar deficient region of eastern up and reaffirming the consolidation that took place in the sugar

industry.

Thus BHSIL now has a crushing capacity of 40,000 tcd and a distillery with the

capacity to manufacture 160 kilo – liter per day of ethanol. The total industrial alcohol ethanol

capacity of the company, including its subsidiary is 800 KL day.

With the commission of three bagasse based power co- generation plants at Kundarkhi

rudauli and utraula, BHSIL has anaggreate power generation capacity of 95.8 MW).

The company’s annual turnover was Rs18,749 million for the ended September, 30, 2008.

The company’s growth initiative has been led by a strategic focus of attainting global scales of

manufacturing and cost competitiveness. Such bench marketing provides BHL advantages for

cost and higher domestic market share where demand is expected to outstrip supply for the next

few years. While its planning and processes are benchmarked against global practices. Its

activities are directed at contributing to the Indian rural economy at a local grassroots level,

primarily in the uplifting of the farmers.

2.5 ORGANISATION CHART

CHART 1

DISPENSARY

PERONNEL

PERSONNEL TIME OFFICE SECURITY

DEPUTY MANAGER

SECTION INCHARGE

TIME KEEPER SECURITY INSPECTOR

FACTORY MEDICAL OFFICAL

STENO TYPIST CLERK ASST. SECURITY INSPECTOR

PHARMACIST

GUARDS WARD BOYS

CANE DEPARTMENT

SENIOR MANAGER

MANAGER

DEPUTY MANAGERDEPARTMENT

CANE EXECUTIVES

CANE OFFICERS

CANE INSPECTORS

Chart No – 2

FINANCE DEPARTMENT

ACCOUNTS SYSTEAM

STAFF EXECUTIVES ASSISTANT MANAGERS

CHART No – 3

CHART NO – 4

ADMINISTRATION DEPARTMNENT

EXECUTIVE

ADMINISTRATION DIESEL BUNK

CLERK ADMINISTRATION DIFSEL BUNK INCHARGE

CLERK - DFSPATCH

TELEPHONE OPERATOR

OTHER STAFF

CHAPTER - III

FINANCIAL STATEMENT ANALYSIS

3.1 Meaning of Financial statement

Financial statements refer to formal and original statements prepared by a business concern to

disclose its financial information AICPA (American Institute of certified public Accountants) say

financial statement are prepared for the purpose of presenting a periodical review or report on the

progress by the management and deal with

(i) The status of investment in the business and

(ii) The results achieved during the period under review.

The term financial statement has been widely used to represent two statements prepared

by accountants at the end of specific period under review.

The term financial statement has been widely used to represent two statements prepared

by accountants at the end of specific period. They are (i) profit and Loss account or income

statement:

(iii) Balance sheet or statement of financial position.

Schedule of fixed assets, schedule of debtors, schedule of creditors, schedule of

investment etc. are example of some of the schedule which are attached to the financial

statements.

3.2 Importance of financial statements

For Management

Till recently the feeling was that financial statements are meant only for owners of

the concern and to satisfy legal requirement now it is realized that financial statements are of

at most help to the management of a concern.

For the Financial

Besides Management, financial statements are also of great importance to the

financiers and lenders, lenders need information regarding customer’s financial position

solvency credit standing profitability etc.

For the creditors

Trade creditors are another class for whom financial statement is important. Trade

credit implies extending facilities of deferred payment for credit purchase by seller to buyer

traditionally, the seller used to depend on trade reference, while extending trade credit and

financial statement were rarely used. Extending credit is essential due to tough competition

and at the same time supplier or trade credit feels that financial position of the customers is

faithful and paying regularly by this financial position is not sound.

For Investors

Present and prospective investors are interested in studying financial statement

to assets earning capacity growth potential and efficiently of management. The share

holders would like to assets the present and future prospects, financial statement

provide such information reading to shareholders and debenture holders.

3.3. LIMITATIONS OF FINANCIAL STATEMENTS

While analyzing financial statement the following limitations should be kept in mind.

i. Information show in financial statement is not precise since it is based on practical

experience and the conventions and rules development there from.

ii. Financial statements do not always disclose the correct financial position of business

concerns as they are influenced by the personal opinions judgment subjective view and

whims of accountants of each concern.

iii. Information disclosed by profit and loss accounts may not be real profit as may items

show in the profit and loss accounts may not be real but estimated. Financial

statements are due. Because they cannot speak themselves, the statements require

further detailer analysis and inter predation.

3.4. Financial statement analysis and interpretation

The financial statement are useful and meaningful only when they are analyzed and

interpreted scientific method has to be adopted to analysis and interpret these statement as

done in the case of preparation of these statements. The efforts taken to understand the

implication of the statement is called interpretation. Therefore it is meaningful to call it

analysis and interpretation.

3.5. Objectives of Analysis and Interpretation

The use of financial statement have definite objective to analysis and interpret, However

there are certain specific and common.

i. To interpret the profitability and efficiency of various business activities with the help of

profit and loss accounts

ii. To measures managerial efficiency of the firm.

iii. To measures short-term and long-term solvency of the business.

iv. To ascertain earning capacity in future period.

v. To determine future potential of the concern.

vi. To measure utilization of various assets during the period.

vii. To compare

3.6. Types of Analysis

The process of financial statement analysis is of different types the process of analysis is

classified on the basic.

FINANCIAL STATEMENT ANALYSIS

On the basis of Information used analysis On the basis of modus operative of analysis

a) External Analysis a) Horizontal Analysis

b) Internal Analysis b) Vertical Analysis

External Analysis

This analysis is based on published financial statement of a firm outsiders have limited access

to internal records of the concern. Therefore they depend on published financial statements. Thus the

analysis done by outsiders namely creditors, Suppliers investors and government agencies is known

as external analysis. This analysis serves a very limited purchase.

Internal Analysis

This analysis is done on the basis of internal and unpublished records. It is very much useful

and unpublished records. It is done by executive or other authorized officials. It is very much useful

and significant to employees and management.

Horizontal Analysis

This analysis is also known as “dynamic” or trend analysis. The analysis is done by analyzing

the statement of a number of years. According to John. N. Myer the horizontal analysis consists of a

study of the behaviors of each consists of in the statement. “Thus under horizontal analysis we study

the behavior of each item shown in the financial statements, we examine

CHAPTER - IV

4.1Current ratio

Current Ratio Is the Relationship between Current Assets and current liabilities,

Current Ratio=Current Assets

Current Liabilities

Current Ratio of 2:1 is considered ideal that is for every one rupee of current liability there

must be current assets of Rs.2 if the ratio is less than two it may be difficult for a firm to pay current

liabilities. If the ratio is more than two it is an indicator of idle funds.

Table 4.1

Current Ratio

Source: secondary data

Interpretation

It is from the table 4.1 that the current ratio lies between 0.9617 times and 0.6208times, In the

year 2004-2005 it was 0.9617 times and after it has decreased to 0.4582 times in the year 2005-2006.

Then it has increased to 0.5044 times in the year 2006-2007. Suddenly it has decreased 0.4590 times

in the year 2007-2008. Finally, it has grown up 0.6208 times in the year2008-2009. It indicates the

company moves towards goods situation. It indicates that there was a fluctuating in the current ratio

over the years.

Year Current assets Current liability Ratio

2004-2005 108.74 113.06 0.9617

2005-2006 78.39 171.08 0.4582

2006-2007 271.25 537.69 0.5044

2007-2008 512.42 1116.36 0.4590

2008-2009 686.28 1105.35 0.6208

Chart 4.1

2004-20052005-2006

2006-20072007-2008

2008-2009

0.961700000000001

0.4582 0.50440.459

0.620800000000001

Current Ratio

Ratio

4.2 LIQUID RATIO

Quick ratio is also known as liquid ratio or acid test ratio, Quick ratio may be defined as

relationship between the quick assets and quick liability. As assets is said to be liquid if it can

converted in to cash within a short period without loss of value. The ideal current ratio

Quick Ratio= Quick AssetsQuick Liability

Table 4.2

Quick Ratio

Year Quick assets Quick liability Quick Ratio

2004-2005 31.33 113.06 0.2771

2005-2006 22.84 171.08 0.1335

2006-2007 148.86 537.69 0.2168

2007-2008 117.59 1116.36 0.1053

2008-2009 49.04 1105.35 0.0443


Interpretation

It is from the table 4.2 that the quick ratio lies between 0.2771 times and 0.0443 times. In the

year 2004-2005 it was 0.2771 times and after that it has decreased 0.1335 times in the year 2005-

2006. After then in the year 2006-2007 it has increased in the sub sequent years from 2007-2008 to

2008-2009, as 0.1053 times and 0.0493 times. It indicates the quick assets were not well to compare

with quick liabilities. The Company must try to maximize its quick assets.

Chart 4.2

31.33

22.84

148.86

117.59

49.04

Quick Ratio

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

4.3 PROPRIETARY RATIO

Proprietary ratio relates the share holder’s funds to total assets, It is a variant of the debt

equity ratio. This ratio shows the long term or future solvency of the business. It is calculated by

dividing share holders funds by the total assets.

Proprietary Ratio= ShareHolders FundsTotal Assets ( ¿ )Total Resouce

Table 4.3

Proprietary Ratio

Year ShareHolders Funds Total Assets Proprietary Ratio

2004-2005 137.73 459.91 0.2994

2005-2006 614.24 1124.27 0.5463

2006-2007 1368.67 2874.75 0.4761

2007-2008 1434.33 4325.24 0.3316

2008-2009 1345.10 4754.19 0.2829


Interpretation

It is from the table 4.3 that the Proprietary ratio lies between 0.28994 times and 0.2829 times.

In the year 2004-2005 it was 0.2994 times and after that it has increased 0.546 times in the year 2005-

2006. After then in the year 2006-2007 it has increased to 0.4761times. Again it has decreased in the

sub sequent years from 2007-2008 to 2008-2009, as 0.3316 times and 0.0493 times. It indicates the

share holders funds were not well to compare with total assets. The Company must try to maximize

its share holder’s funds.

It indicates that there were fluctuating in the proprietary ratio.

Chart 4.3

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

0.2994

0.5463

0.4761

0.3316

0.2829

Proprietary Ratio

Proprietary ratio

4.4 CASH POSITION RATIO

It has the variation of quick ratio, when liquidity is highly restricted in term of cash and cash

equivalents, this ratio should be calculated, liquidity ratio measures the relationship item on the hand

and immediately maturing obligation on the other inventory and the debtors are excluded from

current asset, to calculate

Cash PositionRatio=Cash+marketableSecuritiesCurrent Liabities

Table 4.4

Cash Position Ratio

Year Cash Current Liabilities Cash Position Ratio

2004-2005 137.73 459.91 0.2994

2005-2006 614.24 1124.27 0.5463

2006-2007 1368.67 2874.75 0.4761

2007-2008 1434.33 4325.24 0.3316

2008-2009 1345.10 4754.19 0.2829


Interpretation:

It is from the table 4.4 that the cash position ratio lies between 0.0309 times and 0.0060times.

In the year 2004-2005 it was 0.0309 times and after that it has decreased 0.0291 times in the year

2005-2006. After then in the year 2006-2007 it has increased to 0.1618times. Again it has decreased

in the sub sequent years from 2007-2008 to 2008-2009, as 0.0067 times and 0.0060 times. It indicates

the cash position were not well to compare with current liabilities. The Company must try to

maximize its cash position.

It indicates that there were fluctuating in the cash position ratio over the year.

Chart 4.4

2004-20052005-2006

2006-20072007-2008

2008-2009

0.2994

0.5463

0.4761

0.3316

0.2829

Cash Position Ratio

Cash Position Ratio

4.5 NETWORKING CAPITAL RATIO

The difference between current assets and current liabilities is called networking capital. The

current assets refer to assets which in the normal course of business get into cash over a short period.

It is measure of Company’s liquidity position. Generally it is understood that between two firms. The

measure of liquidity is a relationship rather than the difference between current assets and current

liabilities.

Net workingCapital Ratio=Net workingcapitalNet assets

Table 4.5

Year Net Working Capital Net Assets Ratio

2004-2005 -4.32 459.91 -0.0093

2005-2006 -92.69 1124.27 -0.0824

2006-2007 -266.44 2874.75 -0.0927

2007-2008 -603.94 4325.24 0.1396

2008-2009 -419.07 4754.19 0.0881


Interpretation

It is from the table 4.5 that the Net Working Capital ratio lies between -0.0093 times and

0.0881times. In the year 2004-2005 it was -0.0093times and after that it has increased -0.0824times in

the year 2005-2006. After then in the year 2006-2007 it has increased to -0.0927times. Again it has

increased in the sub sequent years from 2007-2008 to 2008-2009, as 0.1396times and 0.0881times. It

indicates the cash position were not well to compare with Net Assets. The Company must try to

maximize its Net working capital.

It indicates that there were fluctuating in the net working ratio.

Chart 4.5

-4.32 -92.69

-266.44

-603.94

-419.07

Networking Capital Ratio

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

4.6 FIXED ASSETS TO PROPRIETORS FUND RATIO

This shows the relationship between fixed assets and share holders’ funds. The purpose of this

ratio is to calculate the percentage of the owners funds invested in fixed assets.

¿ Assets¿Proprietors Fund Ratio= ¿assetsProprietors Fund

Table 4.6

Fixed Assets to Proprietors Fund Ratio

Year Fixed Assets Proprietors Fund Ratio

2004-2005 244.66 137.73 1.7763

2005-2006 456.29 614.24 0.7428

2006-2007 1013.48 1368.78 0.7404

2007-2008 2218.04 1434.33 1.5463

2008-2009 2478.82 1345.10 1.8428


Interpretation

It is from the table 4.6 that the Fixed Assets to proprietor’s ratio lies between 1.7763 times

and 1.84281times. In the year 2004-2005 it was 1.7763times and after that it has decreased

0.7428times in the year 2005-2006 It has decreased to 0.7404 times. In the year 2006-2007 suddenly

it has increased 1.5463 time in the years from 2007-2008 Finally, Then it has grown up 1.8428timess

in the year 2008-2009. It indicates the Company moved towards, good situation.

It indicates that there were fluctuating in the Fixed Assets to proprietors fund ratio over the

year.

Chart 4.6

2004-20052005-2006

2006-20072007-2008

2008-2009

1.7763

0.7428000000000010.7404

1.5463

1.8428


Ratio

4.7 CURRENT ASSETS TO PROPRIETORS FUND RATIO

It shows the relationship between Current assets and share holders’ funds. The purpose of this

ratio is to calculate the percentage of the share holders’ funds invested in current ratio.

Current Assets¿ Proprietors Fund Ratio= Current assetsProprietors Fund

Table 4.7

Year Current Assets Proprietors Fund Ratio

2004-2005 108.74 137.73 0.7895

2005-2006 78.39 614.24 0.1276

2006-2007 271.25 1368.78 0.1971

2007-2008 512.42 1434.33 0.3572

2008-2009 686.28 1345.10 0.5102


Interpretation

It is from the table 4.7 that the Current Assets to proprietors ratio lies between 0.7895 times

and 0.5102times. In the year 2004-2005 it was 0.7895times and after that it has decreased to 0.1276

times in the year 2005-2006. Then it has increased 0.1981times in the year 2006-2007 suddenly it

has increased 0.3572 times. In the 2007-2008 Finally it has again grown up 0.5102times in the year

2008-2009, It indicates the Company moves towards, goods situation.

It indicates that were a fluctuating in the current assets to proprietors fund ratio over the year.

Chart 4.7

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

0.7895

0.1276

0.1971

0.3572

0.5102


Ratio

4.8 DEBT EQUITY RATIO

The financing of total assets of a business concern is dole by owners , the relationship

between borrowed funds and owners capital is a popular is external equity ratio debt –equity ratio is

determined to ascertains soundness of the long –term financial policies of the company

Debt−equity ratio= External equitiesInternal equities

Table 4.8

Year External Internal Ratio

2004-2005 322.18 137.73 2.3392

2005-2006 510.04 614.24 0.8303

2006-2007 1506.09 1368.67 1.1004

2007-2008 2890.89 1434.33 2.0154

2008-2009 3409.07 1345.10 2.5344


Interpretation

It is from the table 4.8 that the Debt equity ratio lies between 2.3392 times and 2.5344 times.

In the year 2004-2005 it was 2.3392 times and after that it has decreased to 0.8303 times in the year

2005-2006. Then it has increased as1.1004times in the year 2006-2007 suddenly it has increased

2.0154 times. In the 2007-2008 Finally it has grown up 2.5344 times in the year 2008-2009, it

indicates the Company moves towards, goods situation.

It indicates that were a fluctuating in the Debt equity ratio over the year.

Chart 4.8

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

2.3392

0.8303

1.1004

2.0154

2.5344

Debt Equity Ratio

Ratio

4.9 NET CURRENT ASSETS TO TOTAL ASSETS RATIO

Net Current Assets to Total Assets Ratio explain the relationship between net current assets

and total assets.

Net current are also known as working capital it can computed as follows

Net Current Assets¿Total assets Ratio= Net Current assetsTotal assets

Table 4.9

Year Net Current Assets Total Assets Ratio

2004-2005 36.58 459.91 0.0795

2005-2006 39.47 1124.27 0.0351

2006-2007 432.38 2874.75 0.1504

2007-2008 1104.16 4325.24 0.2552

2008-2009 1648.42 4754.19 0.3467


Interpretation

It is from the table 4.9 that the Net Current Assets to Total assets Ratio lies between 0.0795

times and 0.3467times. In the year 2004-2005 it was 0.0795times and after that it has decreased to

0.0351 times in the year 2005-2006. Then it has increased 0.1504 times in the year 2006-2007

suddenly it has increased 0.2552 times. In the 2007-2008 Finally it has grown up 0.3467times in the

year 2008-2009, It indicates the Company moves towards, goods situation.

It indicates that were a fluctuating in the Net Current Assets to Total assets Ratio over the

year.

Chart 4.9

0.0795000000000001

0.0351

0.1504

0.2552

0.3467

Net Current Assets to Total assets Ratio

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

4.10 INVESTMENT TO TOTAL ASSETS RATIO

Investment to total Assets Ratio expresses relationship between investment and the total

assets, it can calculated as follows

Investment ¿ total Assets Ratio= InvestmentTotalassets

Table 4.10

Year Investment Total Assets Ratio

2004-2005 0.07 459.91 0.0001

2005-2006 5.07 1124.27 0.0045

2006-2007 205.81 2874.75 0.0715

2007-2008 437.47 4325.24 0.1011

2008-2009 488.26 4754.19 0.1027


Interpretation

It is from the table 4.10 that the investment to total assets ratio lies between 0.0001 times and

0.1027 times. In the year 2004-2005 it was 0.0001times and after that it has increased to 0.0045 times

in the year 2005-2006. Then it has increased as 0.0715times in the year 2006-2007 suddenly it has

increased 0.1011 times. In the 2007-2008 Finally it has grown up 0. 1027 times in the year 2008-

2009, It indicates the Company moves towards, a good situation.

It indicates that were a fluctuating in the investment to total assets ratio over the year

Chart 4.10

0.0001

0.0045 0.0715

0.1011

0.1027

Investment to total Assets Ratio

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

4.11 NET CURRENT ASSETS TO FIXED ASSETS RATIO

Net Current Assets to Fixed assets Ratio explain the relationship between net current assets

and fixed assets. It can be computed as following data

Net Current Assets¿¿assets Ratio=Net Current assetsTotal ¿

assets ¿

Table 4.11

Year Net Current Assets Fixed Assets Ratio

2004-2005 36.58 244.66 0.1435

2005-2006 39.47 456.29 0.0865

2006-2007 432.38 1013.48 0.4266

2007-2008 1104.16 2218.04 0.4978

2008-2009 1648.42 2478.82 0.6650


Interpretation

It is from the table 4.11 that the Net Current Assets to Fixed assets Ratio lies between 0.1435

times and 0.6650 times. In the year 2004-2005 it was 0.1435 times and after that it has decreased to

0.0865 times in the year 2005-2006. Then it has increased 0.4266 times in the year 2006-2007

suddenly it has increased 0.4978 times. In the 2007-2008 Finally it has grown up 0.6650 times in the

year 2008-2009, It indicates the Company moves towards, goods situation.

It indicates that were a fluctuating in the Net Current Assets to Fixed Assets Ratio over the

year.

Chart 4.11

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

0.1435

0.0865

0.4266

0.4978

0.665000000000001

Net Current Assets to Fixed assets Ratio

Ratio

4.12 DEBTORS TURNOVER RATIO

This ratio show on an average number of times debtors are turnover during a year. A high

ratio indicates efficiencies in assets management & vice versa.

Debtors turnover ratio= Net credit salesAverage receviable

Table 4.12


Interpretation:

It is from the table 4.12 that the debtor’s turnover Ratio lies between 1.6819 times and 1.0582

times. In the year 2004-2005 it was 1.6819 times and after that it has decreased to 0.9753 times in the

year 2005-2006. Then it has increased to 1.3507 times in the year 2006-2007 suddenly it has

decreased 0.872 times. In the 2007-2008 Finally it has grown up 1.0583 times in the year 2008-2009,

It indicates the Company moves towards, goods situation.

It indicates that were a fluctuating in the debtors turnover Ratio over the year.

Chart 4.12

Year Net Credit sales Average Receivable Ratio

2004-2005 47.81 27.83 1.6819

2005-2006 17.42 17.86 0.9753

2006-2007 83.56 61.86 1.3507

2007-2008 95.92 110.00 0.872

2008-2009 44.77 42.30 1.0583

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

1.6819

0.9753

1.3507

0.872000000000001

1.0583

Debtors turnover Ratio

Ratio

4.13 FIXED ASSETS TO TOTAL ASSETS RATIO

This ratio expresses to relationship between fixed assets to total Assets Ratio.

¿assets ¿total AssetsRatio= ¿assetsTotal assets

Table 4.13

Year Fixed Assets Total Assets Ratio

2004-2005 244.66 459.91 0.5319

2005-2006 456.29 1124.27 0.4058

2006-2007 1013.48 2874.75 0.3525

2007-2008 2218.04 4325.24 0.5128

2008-2009 2478.82 4754.19 0.5213


Interpretation:

It is from the table 4.13 that the fixed assets to Total Assets Ratio lie between 0.5319 times

and 0.5213 times. In the year 2004-2005 it was 0.5319 1times and after that it has decreased to

0.4058 times in the year 2005-2006. Then it has decreased as 0.3525times in the year 2006-2007

suddenly it has increased 0.5128 times. In the 2007-2008 Finally it has grown up 0.5213 times in the

year 2008-2009, It indicates the Company moves towards, a good situation.

It indicates that were a fluctuating in the fixed assets to total Assets Ratio over the year

Chart 4.13

244.66

456.28999999

99991013.4

8

2218.04

2478.82

Fixed assets to total Assets Ratio

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

4.14 RETURN ON SHARE HOLDER FUND RATIO

Return on equity (or) Return net worth this ratio signifies the return on equity share holder

funds. The profit considered for computing the ratio is taken of the payment of preference dividend

the ratio of return on equity share holder fund is calculated as given below

Returnon shareholder fund= APT PerferencedividendEquity share holder fund

x100

Table 4.14


Interpretation

It is from the table 4.13 that the Return on share holder fund ratio lies between 44.30 times

and -0.354 times. In the year 2004-2005 it was 44.30 1times and after that it has decreased in the

following year 2005-2006 to 2008-2009, the ratio was 22.85 times to -3.54 times. The return on share

holder fund were not well is the concern .

It indicates that were a fluctuating in the Return on share holder fund ratio over the year

Chart 4.14

Year APT Preference dividend Share holder Ratio

2004-2005 61.02 137.73 44.30

2005-2006 148.39 614.24 22.85

2006-2007 190.83 1368.67 13.94

2007-2008 45.65 1434.33 3.18

2008-2009 -47.68 1345.10 -3.54

2004-20052005-2006

2006-20072007-2008

2008-2009

44.3

22.85

13.94

3.18

-3.54

Return on share holder fund Ratio

Ratio

4.15 RETURN ON TOTAL ASSETS RATIO

This is calculated to measure the productivity of total assets. There are two way of calculating

this ratio.

ReturnonTotal Assets=Net profit after taxTotal Assets

x 100

Table 4.15

Year Net profit after interest Total Assets Ratio

2004-2005 61.02 459.91 13.4761

2005-2006 140.39 1124.27 12.5861

2006-2007 190.83 2874.75 6.6664

2007-2008 45.65 4325.24 1.0612

2008-2009 -47.68 4754.19 -1.0123


Interpretation

It is from the table 4.15 that the Return on total assets Ratio lies between 13.4761 times and -

1.0123 times. In the year 2004-2005 it was 13.4761 1times and after that it has decreased to 12.5861

times in the year 2005-2006. After then in the year 2006-2007 y it has increased to 6.6664 times.

Again it has decreased in the sequent years from 2007-2008 to 2008-2009 as 1.0621 times and -

1.0123 times.

It indicates the net profit after interest was not well to compare with the total assets.

Chart 4.15

2004-20052005-2006

2006-20072007-2008

2008-2009

13.476112.5861

6.6664

1.0612

-1.0123

Return on total assets Ratio

Ratio

SUGGESTION

1. As there is a continuous growth in the Bajaj Hindustan Ltd. I suggest the Hindustan

company expand their business.

2. The management should allocate sufficient working capital in order to meet our current

obligations of the business.

3. The cash position may in prove to meet emergency requirements.

4. The fixed assets to proprietary fund ratio is also good position.

5. The companies try to decrease current liability at the minimum level.

CONCLUSION

The BHL is the one of the leading companies in India.

It financial position was running good to compare with other companies.

I have concentrated my attention on “Ratio Analysis in which I have find out some of the

ratios & I have also drawn Bar chart with explicitly the movement ratio.

I have concentrated my attention on correlation between different aspects & the result is

satisfactory during my study. I have also given suggestion to the BHL based on analysis.

Sugarcane Financial Project

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