Cash Flows

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“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Contents
Titles Page No.
Chapter I
Executive summary
Chapter II
• Industrial profile
• Company profile
• Organization structure
• Product profile
Chapter III
Design of the study
• Statement of problem
• Objectives of the study
• Scope of the study
• Methodology of data collection
• Sources of data collection
• Limitations
Chapter I
!inancial analysis
• Financial statement
• Balance sheet
• Income statement
• Analysis of financial statement
• Significance of financial statement analysis
• Statement of changes in the financial statement
Chapter
Data analysis and interpretation
• Comparative financial statement
• Common sie financial statement
• !rend analysis financial statement
• "atio analysis
• Fund flo# statement
• Cash flo# statement
Chapter I
!indings and suggestions
"
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“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Chapter II
Conclusion
Chapter III
*i+liography
Chapter I,
-nnexure
((
(.
%'
%&
/)
/&
//
/.
.)
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“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

0I1T O! T-*0E1
Ta+le No. Name of the Ta+le Page
No.
" Comparative *alance sheet (%
' Comparative Income 1tatement (/
# Common2size Income 1tatement %)
& Common2size *alance 1heet %"
( Trend Income 1tatement %'
% Trend *alance 1heet %#
$ Current 3atio %(
/ 4uic5 3atio %$
. Proprietary 3atio %.
") 1olvency 3atio $)
"" !ixed -ssets Turnover 3atio $'
"' 6or5ing Capital Turnover 3atio $&
"# 7ross Profit Turnover 3atio $%
"& Operating Cost Turnover 3atio $$
"( 3eturn On Investment $.
"% !und !lo8 1tatement /"
"$ Cash !lo8 1tatement /&
#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

0I1T O! C9-3T1
Chart
No.
Name of the Chart Page
No.
$ Current "atio %%
& 'uic( "atio %)
* +roprietary "atio %,
- Solvency "atio )$
. Fi/ed Assets !urnover "atio )*
% 0or(ing Capital !urnover "atio )-
) 1ross +rofit !urnover "atio )%
2 Operating Cost !urnover "atio )2
, "eturn On Investment ),
C9-PTE32 I
E,EC:TIE 1:;;-3<

Shree 3454S4S45464 Chi(odi is a co7operative unit4 It is a situated near
6anadi village4
By conducting the organiation study it is found that
&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

All the departments #ere actively #or(ing to#ards the achievement of the goals of
the company4
;y topic is
8Cash and fund flo# analysis and ratio analysis of 35SS569 Chi(odi:
Financial statements summaries that the financial position and operation
of the company4 Many companies are used comparative9 ratio analysis9 fund flo#
and cash flo# analysis to (no# about the financial position of the firm4 !he
comparative9 ratio analysis9 fund flo# analysis and cash flo# analysis are #idely
used for analying the financial statements4 It is systematic use of ratio to interpret
the financial statements so that the strength and #ea(nesses of a firm is
determined4
3uring my project the firm is not in good health and the company funds are
used only for short term assets not for long term assets4
;y O+=ectives are
$4 !o determine the operational efficiency of the company using ratio analysis4
&4 !o (no# the changes in financial statements for the past * years
using trend analysis4
*4 !o conduct cash and fund flo# statement for &;;)7 &;;2
(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

-4 !o identify the financial strength and #ea(ness that the firm
might have4
1uggestions
$4 !he firm should concentrate on enhancing the operating
efficiency of the firm4
&4 From the study it is found that the funds are used for short term
assets #hich should be avoided4
CONC0:1ION
By analying the topic of 8CAS< A63 F=63 FLO0 A6AL>SIS
A63 "A!IO A6AL>SIS OF 35SS56 L!34 C<I5O3I:
I conclude that the company li?uidity position is not satisfactory
due to more concentrate on raising the fi/ed assets rather than operating activities4
#hich decreases #or(ing capital of the company4 0hich affects the operational
efficiency of the company and also the li?uidity position4
C<A+!@"7 II
IND:1T3I-0 P3O!I0E
%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

T9E *3ITI19
A! FI"S!
After the bloc(ade and the landing of British troops superior in number than
the French force of the 1eneral 3ecaen9 the French capitulated in 3ecember $2$;4
From the !reaty of +aris of $2$-9 Mauritius and its dependencies became British9
#hereas "eunion even that it #as captured #as given bac( to France4 Mauritius
became British and got bac( the name the 3utch gave her9 but stayed ?uite close to
France as she (ept the language9 culture and French la#s4 Left on their o#n9 under
the same legal system9 the ancient French colonist and their descendants #as then
able to live a French style as in the past9 changing from a colony base on maritime
trade to that of an agricultural one4
@ven that the sugar industry started under the French period9 it #as only
during the British period that it developed in such a #ay that it became almost a
mono7crop industry until some other crops #ere cultivated such as tea9 tobacco and
more recently small industries for food9 te/tile and household products4
-*O0ITION O! 10-E3<. !he most important event under the British4
Administration #as the abolition of slavery in $2*. E;-NCIP-TION O!
T9E 10-E1. !he emancipation of the slaves in $2*. #as been opposed by the
$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

colonists same at those of other British colonies for economic reasons since the
sugar industry in development needed man po#er4 !he colonists obtained a very
high compensation4 !hen there #ere no trouble as e/pected since everything #ent
on calmly9 but to replace for the sudden lac( of human resource9 the country had to
as( for free #or(ers from India4 !he first importation of Indian human resource in
Mauritius #as in $2&,4 But it #as only #hen the slaves #ere emancipated that it
too( importance4
It resulted in an accelerated development of the sugar industry and brought
prosperity as from $2.;4 !hat prosperity of $2.; #as also due to a recovery in
trade4 Another development during the British periodA the change in the
constitution9 #hich #as slo# at the start9 but got speed after the second #orld #ar
to bring independence in $,%24
TO6OD31 INDEPENDENCE
It is as from $,*) #ith the re?uests of the #or(ers and the establishment of
the Labour +arty that regrouped the colored people and certain intellectuals from
Indian origin as #ell as the recognition of the #or(ers unions that progress started
to be done4 !here #as also a ne# constitution after the elections of $,-* during
#hich t#o forth of the population could vote4 !he elections of $,.* made
democracy move ahead #hen the Labour party obtained more seats4 It #as in $,.)9
the year #hen the ministerial system started in Mauritius that 3r "amgoolam too(
the leadership of the Labour party4
+IC!="@ OF S=1A" MA5I61
/
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’


1:7-3 IND:1T3< IN INDI->

Mostly sugar industries are located in =4+9 Bihar Maharashtra9 A4+4
5arnata(a and !464 !he sugar industry is one of the largest organied industries
#ith total capital investment of more than .;; crores4 It employees more than &4.
la(hs of #or(ers besides creating e/tensive indirect employment over &. to *;
million cultivators of sugar cane9 dealers in sugar and confectioneries4
0hen sugar industry #as granted tariff protection the history of sugar
industry started again before $,*& #hich gave limpet us Bdriving forceC to gro#th
of industry4 Again the government in $,.$ provided incentives by fi/ing
minimum prices of cane and ma/imum prices of sugar4
!his incentive scheme increased the production of sugar but dis7couraged
the cane production4 0e #ill see later on ho# contradictory government4 +olicies
.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

have adversely affected the gro#th of sugar industry4 =nfortunately9 government
policy has been that of control and re7control from time to time creating an
environment inimical Bhostility9 untrendlyC to the gro#th of sugar industry4 =p to
$,.)7.2 both consumption and production of sugar rose toD &; la(hs tones each4
3uring $,%,Es production of sugar rose to *.la(shs tones and during $,);Es it #as
in bet#een -; to .; la(h tones4 And during &;;;7;$ it #as in7bet#een 2; to ,;
la(hs tonnes4
POLICY
!he present policy of partial decontrol $;F of production by each unit
is supplied for public distribution system i4e4 as levy sugar at 1ovt4 notified prices
admittedly belo# &;F of the actual cost of production4 !he levy sugar is I to the
public irrespective of their economic status4 !he balance ,;F is sold in the free
mar(et against monthlyGissued by the 1overnment4 !his policy has been
continuing since $,%)7%2 e/cept for brief periods of de7control me during the years
of surplus production and accumulated sugar stoc(s4
1overnment announces the Statutory Minimum +rice BSM+C for sugarcane every
year based on recommendations of the Commission for Agricultural Costs and
+rices BCAC+C4
")
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

CO;P-N< P3O!I0E
SHREE D.K.S.S.K.N.- CHIKODI,
Taluka – chikodi, dist.- Bl!au"
Name of the Organization : Shree D.K.S.S.K.N.-Chikodi.
Location : Nanadi Village.
Tal.-Chikodi, Dist.- elga!m
Karnataka.
"egi .office : Chikodi.
#h. No. $ %&''&-()*+', To '-
.a/: %&''& $ ()*,%-
0-1ail $ d(sugarHsancharnet4com
Constr!ction : !ilding La2o!t, 3arden 4 Light
.acilities.
Ca5acit2 : --%% tones s!gar cane crashing 6 da2.
(%.) 1. 7. #o8er 3eneration.
'% K.L.#.D. "estrified S5irit.
T!rno9er : :-% to -%% Crores 6 ;nn!m.
0m5lo2ees : )-*.
""
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

7ork Shifts : ' Shifts 6 & ho!rs 5er shift <no =olida2>
*O-3D O! DI3ECTO31
!he follo#ing composition of directors on the board of Shree
3oodhaganga 5rishna Saha(ari Sa((are 5ar(hane 6iyamit9 Chi(odi4
Name Designation
$4 Sri Mahantesh M 5avatagimath Chairman
&4 Sri Ajit S 3esai Iice Chairman
*4 Sri Annasaheb S Jolle 3irector
-4 Sri Asho( A +atil 3irector
.4 Sri +ra(ash J +atil 3irector
%4 Sri !atyasaheb 3 5ate 3irector
)4 Sri Malli(arjun 1 5ore 3irector
24 Sri 5allappa 5 Maishale 3irector
,4 Sri Shantappa > Miraji 3irector
$;4Sri Amit + 5ore 3irector
$$4 Sri Satappa 6 Saptasagar 3irector
$&4Sri +arasagouda I +atil 3irector
$*4Sri Bharatesh S Bana#ane 3irector
$-4Sri Subhash 6 5atrale 3irector
$.4Sri Malli(arjunayya I <iremath 3irector
$%4Sri 6anda(umar M 6ashipudi 3irector
$)4Sri S B =marane !he Managing 3irector
"'
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

*-C?73O:ND
S<"@@ 3OO3<A1A61A 5"IS<6A SA<A5A"I SA55A"@
5A"5<A6@ 6I>AMI!9 C<I5O3I is a co7operative society registered under
5arnata(a co7operative societyEs Act in $,%,4 !he industrial license number of the
factory is 02'(@N2'()@20C dated "%@")@".$)4
Shree 3454S4S45464 Chi(odi is a co7operative unit4 It is a situated near
6andi village9 at a distance of about $*5m from Chi(odi to#n 4and the factory at
present has an attractive campus #ith magnificent buildings over it4
Agriculture #as continues toD be an e/tremely important sector in our
country and cooperative system9 as one of its main pillars providing vital support
services9 is crucial for the transformation of agriculture4 It is ho# inspired our
founder 0ate 1ri. Chidanand * ?ore9 an agriculturist and a co7operator9 to
establish this factory during $,)&7)* #ith the financial support from cane gro#ers
of this area and the State 1overnment4 0ith an initial crushing capacity $&.; !C3
and as a stand alone sugar industry9 lour factory had faced a lot of problems all
these years in coming out as a viable unit4 !hough this factory had emerged in this
area #ith a meager beginning9 it had not only provided a source of income for
forming community but also created a sustainable employment opportunity in this
rural area4
"#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

After a lot of dispute on location of plant9 near 6andi village9 the
construction #or( started in year $,)$ and comp elected in the year $,)-4 !he
factory #as inaugurated by Iice7president 1hri *.D Aatti on %
th
6ovember $,)-4
!he regular production has been started from 3ecember $,)-4
!he factory started on .K*K$,%, #ith initial Crushing capacity to the e/tent
of $&.; !C3 per day began during the year $,)- #ith total e/penditure of "s4**)
la(hs4
!he area of operation covered $$$ villages of #hich $;& villages are from
chi(odi talu(as9 . villages are from chi(odi talu(a9 . villages are from "aibag
talu(a and - villages are from Athani talu(a4
At present total sugar cane supplied to this sugar industry is from &;9;;;
acres #ith average yield per acre of &. M!4
!he entire plant and Machinery has been supplied by mKs 6ational <eavy
@ngineering Co7operative Ltd4 +une9 A co7operative institution has also been
installed to meet the present re?uirement of the Crushing capacity4 !he 35SS59 at
present is e?uipped #ith modern machines and s(illed personals4 "s4 *&. la(hs
long term loan #as borro#ed from IFC9 LIC9 I3BI for original plant and First
phase e/pansion and has been repaid as per their
!he crushing capacity #as enhanced from $&.; !3C to &;;; in $,2-72.
and from &;;; !C3 to *;;; I6 $,,*7,-4 !he factory house hold e/penses of
factory from *.;; to ..;; !C34 @very e/pansion #as not easy and had created a
financial set bac(s due to the lac( of professionalism both in technical and
financial managements4
"&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!hus over the period of t#o and half decades9 the factory had gro#n
only in sies but not adopted the range of different bi7product activities and had
suffered due to a #ea( governance on efficiency9 effectiveness9 adaptability and
internal and e/ternal accountability in the management4 !hese things have brought
the factory almost to the brin( of sic(ness4 Besides resulting a huge negative net
#orth and ever7high accumulated losses4 <o#ever this cooperative and rural based
industry must succeed if the poor farmers and the rural unemployed youths have to
be prosperous4
Nature of *usiness
Sugar sector is one of the large scale industries in manufacturing sector4
6o# a day the competition in sugar sector is very high4 193EE
DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E ?-3?9-NE
NI<-;ITB C9I?ODI is a co7operative society registered under 5arnata(a co7
operative societyEs Act in $,%,4 !he object of business is to encourage proper
devolvement of agricultural industrial amongst members on co7operative lives by
promotions of co7operative and joint forming methods so as to secure best merits
of modern large scale agriculture production to the o#ners of the lands4 !he nature
of business is to encourage self help9 thrift and co7operate amongst members4
#isio$, "issio$ a$d %ualit& 'olic&
Iision
(Total custo") satis*actio$:
"(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Mission
• @ncourage agro7based co7operative industry4
• !o develop co7operative movement in rural sector4
• !o encourage the farmers to gro# sugar cane for production of sugar and
its by7products4
-I;1 C O*AECTIE O! T9E CO;P-N<
!he object of the society is to encourage proper development of Agricultural
Industrial amongst members on Co7operative lives by promotions of principal and
methods of Co7operative and joint forming methods so as to secure best merits of
modern large scale agriculture production to the o#ners of lands and for this
purpose4
aC !o encourage self7help9 thrift and co7operate amongst members4
bC !o ac?uire lands either by #ay of purchase or other#ise for cultivation of
sugar cane and other cost and for erection of building4 1oda#ns staff
?uarters etc and for installations of machineries4
cC !o manufacture sugar jogger and their by products out of sugar7cane gro#n
and supplied by members of the society and other and to sell the same to the
best advantage4
dC !o under ta(e such other activities as are identical and conductive to the
development of the society etc4
"%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

eC !o ac?uire and install machinery for the utiliation of the product and buy
ra# material and sell finished product is the course of utiliing and
mar(eting the by products4
O6NE319IP P-TTE3N
!he authoried share capital of the Society shall be "S4$.4&; crores divided
in to total *29;;; shares of "S4-9;;;K7each as under4
iC "s4$-9.$9;;;K7dividend in to *%9&). shares of the face value of
"s4-9;;;K7each reserved for the gro#er members called as 8A:Class4
iiC "s4,9;;9;;;K7dividend in to &&. shares of the face value of "s4-;;;K7
each reserved for Co7operative Institutions4 Called as 8B:Class4
iiiC "s4&;9;;9;;;K7dividend in to .;; shares of "edeemable preference
share of "s4-9;;;K7each to be issued to 1overnment of
5arnata(aKMaharastra called as 8C:Class4
ivC "s4-;9;;9;;;K7 dividend in to $9;;; shares of face value of "s4-9;;;K7
each reserved for non gro#er members called as 83: Class4
IN!3-1T3:CT:3-0 !-CI0ITIE1
 6earer to ra# materials4
 1ood transportation facilities4
"$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

 6earer to rivers place4 B5rishna "iverC
 1ood net#or(ing4
 +roper accommodation for its employees
-C9IE;ENT1 -ND -6-3D1
-C9IEE;ENT1
• S!AI9 SISS!A L 3S!A in their recent 2
th
annual convention at <yderabad
held on $*7;27&;;. have honored #ith the most prestigious a#ard as the
(THE BEST E++ICIENCY , PER+OR-.NCE S/0.R +.CTORY1 in
the country for the year &;;-7;.4 !he a#ard #as given by <onEble =nion
Minister for agricultural9 food L Civil Supplies9 in presence of <onEble
Chief Minister of Andhra +radesh4

• !he 5arnata(a State Co7op Federation Ltd4 had adjudged as (Th Bst Co-
o')ati2 Su!a) +acto)& i$ th Stat: and -6-3D had been given to us
through <onEble Chief Minister of 5arnata(a9 on $-K$$K&;;-4
"/
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

• @nergy 3epartment of 1overnment of 5arnata(a and ?3ED0 have
a#arded us he 8e/cellence A#ard: through 3eputy Chief Minister of
5arnata(a for having developed efficiently &;4) M0 Co7gen +o#er +roject
on the occasion of 3-AI 7-ND9I -?1-<- :3A- DI6-1 ON
&;K2K&;;- 4
• !he companies have the <onour of achieving the <ighest Sugar "ecovery
H $$42;F in Southern part of India for the year &;;$7;&4 And $$4,;F for
&;;&7;* also4
-8ards
!he 5arnata(a State Cooperative Sugar Factories Federation Ltd49 Bangalore had
honored the company #ith the follo#ing a#ards for theA7
$4 <ighest sugar recovery in South India during &;;$7;&4
&4 !he 8Best Administration A#ard: to the Managing 3irector #ith a cash
prie of "s 4$;4;;;K7 and a certificate4
*4 !he Best chief Chemist A#ard #ith "s4.9;;;K7 Cash prie and a Certificate4
-4 Best chief engineer #ith a#ard #orth of "s4.9;;;K7 cash prie and
certificate4
O37-NI1-TION C9-3T
*O-3D O! ;-N-7E;ENT
;-N-7IN7 DI3ECT
".
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

1EC3ET-3<
7ENE3-0 CII0 1TO3E ;EDIC-0 9E-D TI;E C9IE! C9IE! -DC O!!ICE 0.6.O. 6-TC9 C
;-N-7E3 EN7. ?EEPE3 O!!ICE3 ?EEPE3 C.D.O. O!!ICE3 1PDT 6-3D
TOO03OO;CDIE1E0
P:;P
C9IE! C9IE! DI1T. CO27EN C-NE -73I0
EN7. C9E;I1T C9E;I1T <-3D DEPT.
7ODO6N 1ECTION
7ENE3-0 C-NE 1-0E1 C-19
-DC. -DC.
CO;P:TE3
7-D E1T ;EETIN7 IN6-3D C 19-3E T<PIN7 7:E1T 0E7-0 P:3C.
1ECTION 1ECTION 1ECTION O:T6-3D 1ECTION 1ECTION 9O:1E 1ECTION 1ECTION

P3OD:CT P3O!I0E
 *<P3OD:CT1 O! 1:7-3 C-NE

!he chief by products of sugar manufacturing are 7
"E *agasse
Bagasse is the by product of sugar left behind after crushing of sugar cane4 It
is used as a fuel in the sugar factory boiler4 @/cess Bagasse finds use as ra#
materials in paper manufacturing industry4
')
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

'E ;olasses
Molasses is a by product of Sugar refining chiefly used for alcohol
production4 !he entire molasses output is routed to the distillers unit #hich is
maintained by the organiation4
#E Pressmud
+ressmud is the by product generated by cane juice filtration during sugar
manufacture9 currently +ressmud is used as a fertilier in sugarcane cultivation4
-3E- O! OPE3-TION
!he area of operation of the society shall be confined to the follo#ing
villages of chi(odi9 Athani9 "aibag !alu(as of Belgaum 3istrict and Jama(handi
!alu(a of Bagal(ot 3istrict of 5arnata(a State and villages of shirol9 (agal !alu(as
of 5olhapur 3istrict Maharastra State only4

!0O6 C9-3T O! 1:7-3 ;-N-!-CT:3IN7
3i!hd ca$-hauld to c)ushi$! &a)d
Ca$ u$loadd o$ to th ca))i)
Ca$ cut i$to 'ics
C)ushd i$ succssi2 "ills
4uic t)atd 5ith li$ a$d su)'lus d)& cha** *d i$to 6oil)s
, Hatd as *ul
Su6sid)
'"
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Suc" cla) 7uic

+ilt) cak usd cla) 2a'o)ats
.s "a$u) 7uic
Co$c$t)atd s&)u'

Su)'lus s&)u' to 2acuu" 'a$s
Boil) to "a$ cit
C$t)i*u!al

Su!a) "olasss
Ba!!i$!
Dis'atchi$! 'o5) alcohol 'o)ta6l alcohol
;C ?IN1E< $ 1 ;ODE0
''
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he first three element are strategy9 structure and system are
considered as hard#are of success9 the meet four elements are style9 staff9 s(ills
and shared values K super ordinate goals are the soft#are of any company4
". 1tructure
!he general admission of the company is carried out by the follo#ing departments
and these are do#n#ards communication in the company4 !he information flo#s
from the top level of management to the lo#er levels4
'. 1ystem
System refers to ho# the production system9 distribution9 information system
and security system is maintained in its company4
a. P)oductio$ S&st"
!he process of production consisting of input of sugar come and
output of the sugar4
'#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

+. Dist)i6utio$ S&st"
!he distribution system of the products produced is in the follo#ing
#ayA
 3irect sales are made #ith in the state and outside the state4
 Indirect sales are made outside the country and the depot sales are
also made4
 !he producers are also sold directly to the consumers or sold to the
#holesales4
c. I$*o)"atio$ S&st"
1tructure of information system

'&
CHAIRMAN
MANAGING DI3ECTO3
SENIOR GENERAL ;-N-7E3
HEAD OF THE DEPARTMENT
SECTION
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

d. Scu)it& S&st"
The D?11? has strict security system.
In the maintenance of accounts after the record have been closed9 the
records are (ept in the room and closed the room is opened only #ith
permission of higher authority4
If the visitors #ent to inter they have to ta(e prior permission #ith the
authority and after entering they are not suppose to go any dept other then the
department from #hom they too( the permission4
'(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

#. 1trategy
!he #ay in #hich a business aims to improve its position in relation to its
competition is embodies in its strategy or the #ay of doing something in an
organiation4
In 35SS59 introduce ne# technologies and products strategies importance in
time #ith national objective to improve ?uality reliability of products there by
attaining the international standards4
&4 15ills
S(ills here refer to ho# the training #ill be given to the employees and
employees4 !he training #ill be given in & months they are
aE O$ th 7o6
!his is one of the oldest method9 under this method9 the individual place is on
the regular job and taught the s(ill necessary to perform that job on the job
training has the advantage of giving first hand (no#ledge and e/perience under
the actual #or(ing conditions4 !his training is given to employees4
+E O** th 7o6
In this methods trainee is separated from the job situations and his attention is
focused upon learning the material related to his future job performance4 !here
is an opportunity for freedom of e/pression for the trainees4
'%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

(. 1tyle
!he style #hich is portrayed to outside #orld is derived from the style and
behaviors e/hibits inside organiation4 !he internal style of the organiation effects
ne# staff feels thin(s and does their jobs4 !herefore an organiation is reflection of
its structure4
a8 To' do5$ 9 Botto" u'
At the time of policy framing9 the style flo#s from top to bottom4 If the
policy has to be framed then the policy has to be ta(en by upper level L it flo#s
to#ards lo#er level4
But #hen the opinion of the policy is to (no#n9 at that time the style flo#s
from bottom to up4 !his is to (no# the attitudes of the employees about the policy
#hich is framed by the upper level4
68 .utho)ita)ia$ 9 Pa)tici'ati2
Only the upper level is having the authority to ma(e the decisions in the
factory4
• R!a)di$! 'olic& "att)
Board of management #ill ta(e the decision in case of policy ma(ing4
• +i$a$cial "att)
If the financial matter is #ithin the amount of "s &;9;;;K79 Managing
3irector #ill ta(e the decision4 And if financial matter is more than "s &;9;;;K79
then the board #ill ta(e the decision4
'$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

%4 1taff
1ood hard #or(ing citien play essential role in the development of nation4 !he
employees are responsible for the success or failure of company4
!he company has totally ))2 #or(ers are #or(ing in the company4 !hey are
divided as follo#s
6o4 of 0or(ers
$C +ermanent #or(er &2.
&C Seasonal #or(ers $2*
*C Consolidated #or(er &22
-C 3aily #age #or(er 7
).%

Company is paying salary of "s4 ..9 ;;9 ;;; per month to its #or(ers4
$. 1hared values
Shared values are refers to company policies4 In Mysore Sugar
Company limited the follo#ing policies are maintained4
 'uality policies
 @nvironment policies
 !4+4M4 policies B!otal productivity managementC
'/
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

 :/.LITY POLICY
!otal customer satisfaction is our goal4 !o achieve this #e at
S43454S4S45464 committed to produce ?uality #hite crystal sugar as per the Indian
sugar standard through continual Improvement in our process9 people L sta(e
holders4
 EN#IRON-ENT POLICY
!he 35SS5 is committed to comply #ith the re?uirement of relevant
environment regulation and standards by implementing environment management
system and the continually improve its effectiveness4
 TOT.L PROD/CTI#E -.N.0E-ENT
!he 35SS5 is committed in ma/imiing limited is committed in
ma/imiing overall plants effectiveness to ma(e Mysore sugar company a #orld
class company through total productive manufactured by
 +romoting automates maintenance culture4
 Involving all employees and building culture4
 Minimiing the losses and reduced the cost4
'.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

P3OCED:3E !O00O6ED IN 1-0E O! 1:7-3B ;O0-11E1B *-7-11EB
3ECTI!IED 1PI3IT -ND -33-C?
 S/0.R
Domestic 1ale of 1ugar
!he free sale released by 1overnment of India is sold in the domestic
mar(et through tender system4 Sugar tenders #ill be called periodically from the
various sugar traders4 !he traders #ill be called advance about the grade and
?uantity being offered in tender over telephone4 !he sugar tender are some time
#ill be conducted at 5arnata(a Sugar Institute9 Belgaum and also at this factory
site4
!he offers of 54S4I #ill be present at the time of tenders4 !he rates #ill be
collected over telephone from the various parties along #ith grade and ?uantity of
sugar re?uired by them4 !he committee #ill ta(e decision on allotment of sugar to
the parties #ho have offered higher price4 5ar(hana has maintained Sugar Sale
!ender register for recording the offers received and allotment made to the parties4
!he parties #ho have purchased sugar in the tender #ill be sold against $;;F
payment4 !he rate of domestic price of sugar in the state and the rate of
neighboring sugar factories #ill be compared #hile selling the sugar in tenders4
#)
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Export of sugar
0hen the international price of sugar is remunerative compared to domestic
price of sugar9 #e do e/port some of the stoc( of sugar4 !he sugar e/port is mainly
underta(en through the mercantile e/port or through @MIM Corporation 6e#
3elhi4 !he price for e/port sugar is negotiated ta(ing into account9 the prevailing
international sugar price and the price being offered by various sugar factories for
e/port of sugar4 Once the rates are finalied9 they #ill enter into agreement #ith
the party4 !hen the party #ill obtain a release orders from the Chief 3irector of
sugar9 6e# 3elhi and necessary e/cise bond from the concerned authority4 After
completing all the necessary formalities Sugar #ill be delivered to the party for
e/port against full payment of the consignment4
After the e/port shipmen are completed9 necessary documents in proof of e/port
of consignment #ill be collected from the parties4 !he same #ill be submitted to
the e/cise department4
 ;olasses *agasses
For sale of Molasses and Bagasses #e use to ma(e a vide publicity in
the various ne#s papers in 5arnata(a and Maharashtra and also floating the
en?uiries to the prospective purchasers in order to get competitive offers and better
price realiation4
#"
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

P3OD:CTION P3OCE11
!he main ra# material in the production of sugar is4
• Sugar cane4
!he ra# materials has to go through follo#ing stages before it become
finished product4 !he process in each stage is as underA
1T-7E> " 1:7-3 C-NE 1:PP0<.
!he harvested and transported sugar can received is #eighed on the #eigh
Bridge4 It is unloaded and (ept on the feeder tables4 It is fed to the cane carrier as
per the re?uirement4
1T-7E> ' ;I00IN7 O! C-NE@ E,T3-CTION O! A:ICE.
!his cane is passed through leveler and furier by ma(ing the fine ma(ing
the fine chips4 It is crushed through series of mills4 Imbibitions hot #ater is added
prior to the last mill to e/tract more possible sugar4 !he bagasse from the last #ill
is carried through bagasse conveyor and re?uired ?uantity of bagasse is fed to the
boilers and e/cess ?uality is sent for storage4
#'
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

1T-7E> # C0-3I!IC-TION -ND E-PO3-TION1.
!he juice from all the mills is pumped to juice #eighting scale4 It is heated
to about );7))Eo c in the juice heaters4 It is ta(en to continuous juice sulphitor in
#hich mil( of lime and sulphur dio/ide gas are adjusted to maintain ph )4;4 It is
again heated in juice heaters to about $;; to $;.Eoc and sent to continuous
clarifier4 Clear juice is ta(en to multiple effect evaporators to concentrate up to
%;oc Bri/4
!he settled mud from the bottom of the clarifier is ta(en to mud mi/er to
mi/ #ith beguile and ta(en to continuous vaccum filer4 !he filtrate is transferred
to ra# juice receiving tan( for treatment4 !he adhered mud on the screens is
scraped and sent out as filter ca(e9 #hich #ill be used for composting the manure4
1T-7E> & C3<1T-00IF-TION P:37IN7 -ND 1:7-3
;-N:!-CT:3E
!he concentrated syrup from evaporator is ta(en to syrup sulpthitor to adjust
+h -42 to .4&4 !his is stored in the supply tan(s and fed to 8A: masscult boiling by
ta(ing B7seed as a footing4 It is concentrated to ,&o Bri/ and dropped to the
crystallies4 !his masscult is purged in the centrifugal machines4 !he adhered
crystals are scraped to hopper and treated #ith hot air and cold air blo#er4 It is
sent to grader the sie for gradation4 !his graded sugar is stared in SILOS4
0eighed and bagged sugar bags are transferred to respective godo#ns for stoc(ing4
##
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

1T-7E> ( !:3T9E3 P3OCE11
0hile purging A7 massecuite the A7light molasses received is sent to supply
tan(s and fed to NAE7 molasses is sent to supply tan(s and fed to NBE7 masscult
boiling #ith b7grain as footing4 !his is purged in the centrifugals4 !his sugar is
used as B7 seed and e/cess is melted and fed to NAE7 masscultEs4 0hite purging
lo# purity B7 <eavy molasses obtained is used for boiling C7 masscult #ith C7
grain as footing4
!his C7 massecuite is ta(en for purging in C4F404 Centrifugal machines4
!he final molasses is separated9 #eighed and sent to storage tan(s4 C4F4Magma is
sent to melt supply tan(s and fed to NAE massecuite boiling4 C7light molasses
obtained is tired in supply tan(s and used for C7 massecuite boiling and C7
graining also4;

!IN-NCE -ND -CCO:NT1 DEP-3T;ENT
Finance plays a vital role in the functioning of all industrial units4 Finance is
the life blood of the organiation4 In sugar Industry Finance and accounts
3epartment has very vital roles4 !he financial plan basically deals #ith raising and
proper utiliation of funds4 !he funds can be raised by issue of shares as #ell as by
raising loans various sources4
#&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he finance manager supported #ith accountant manager and an accountant
assistant loo(s finance department

!:NCTION1>
$4 !hey loo( after the overall financial re?uirements of the company4
&4 !hey see that a proper inflo# and outflo# of income and e/penditure
is maintained4
*4 Costing and accounting is framed and maintained4
-4 >early budget is framed so that each department can meet their cash
re?uirements4
.4 Budget prepared is based on sales forecasting9 e/penses forecasting9
cost forecasting9 purchase forecasting etc4 #hich submitted by
respective departments4
Finance 3epartment consists of follo#ing sub branchesA
$4 1eneral Accounts Section
&4 Cane Accounts Section
*4 Sales Section
-4 Cash Section
Accounts offices are the head of this department4 Accountant sales manager9
and head cashier assist him4
#(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Finance controlling repayment of term loans4 !a(ing loans e/cepting and
payment call deposits maintains all Accounts4 +ayment of all bills statutory and
normal bills4
-s functioning of each section is summarized follo8s 2
". 7ENE3-0 -CCO:NT1 1ECTION>
1eneral Accounts are loo(ing after the passing of bills and
payments4 Management is also done by 1eneral account section and preparation
of financial statements i4e49 Balance sheet9 profit and loss account is attended by
general accounts section4
&4 C-NE -CCO:NT1 1ECTIONA
!he Bills and payment concerned to procurement of sugar cane9 is attended
by cane accounts section4 +ayments li(e cane bills9 transport and harvesting bills
etc49 are prepared and passed in cane accounts section4
*4 1-0E1 1ECTION>
It is loo(ing after sales of sugar and by products molasses9 "ectified spirit
and other scrap materials4 It is (eeping records of the concerned to all sales
section4
#%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

-4 C-19 1ECTION>
It is loo(ing after the payments of all general bills and salary bills apart from
cane payment and it is also loo(ing after receipt of cash and chec( payment4
All accounts are maintained in usual manner4
Iarious records and boo(s (ept areA
aC 1eneral ledger
bC Sub ledger
cC Subsidiary
dC Cash boo(
eC Iouchers4
@ach branch prepares trading profits and loss account and Balance as on *$
st
March every year4 And the government Auditors audits the accounts4
P:3C9-1E DEP-3T;ENT
+urchase 3epartment is headed by purchase officer is responsible for
purchasing the spare parts re?uired for the industry4 !he store(eeper is responsible
for stac(ing ?uality maintaining and issuing to the concerned section4
The important functions of the department are>
#$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

+urchasing materials
• Calling ?uotations
• +reparing C4S4' Bcomparative statement ?uotationC
• +lacing before meeting for decision
• +lacing orders for supply of materials4
• +assing bills to Accounts section for payment4

+="C<AS@ 3@+A"!M@6! <I@"A"C<>
+"OC@3="@ OF +="C<ASI61
". DETE3;IN-TION O! P:3C9-1E *:D7ET>
#/
+="C<AS@ MA6A1@"
1O3O06 S=+@"IISO"S
S!O"@ 5@@+@"S
ASSIS!A6!S
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

In the beginning of the year the purchase manager9 #ith the help of
production planning department9 prepare a purchase budget4 !his budget ?uads
him in (no#ing #hat #hen he has to buy and also ?uality9 Sie and ?uantity of
purchase4
&4 DETE3;IN-TION O! 4:-NTIT<>
!he stoc( availability in each location is determined and compared #ith the
actual re?uirements4 After receiving the sales order ra# materials needed are
scheduled according to these order level4 !he stoc( availability in each location is
determined and compared #ith actual re?uirements these ?uantities to be
purchased are determined4
*. P:3C9-1E O3DE3>
After satisfy #ith the ?uantity of materials and reputation of the supplier9
purchase order is send to the supplier4 +urchase order contain includes the date of
order9 description of materials to be supplied made of supply4 !he companies of
this send to the <ead office9 another to accounts departments and one copy send to
the store(eeper4
-. 3ECEIIN7 -ND I11:IN7 3-6 ;-TE3I-01>
!he department heads and the store(eeper chec( the ?uality and ?uantity of
ra# materials received respectively4 !he store(eeper enters the details of
purchased materials in the store receipt boo( store receipt after the details are
entered in the stared receipt boo(9 the materials from the part of inventory4 !hen
the general manager passes the amount for payment4
#.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

;EC9-NIC-0 DEP-3T;ENT
!his department is headed by 1eneral Manager and Chief @ngineer4
Maintenance of the sugar machinery and plant over having of the some in off
season and to run all the sugar machinery and their devices properly and smoothly
in the season and to e/tract cane juice for the cane in respect of less losses of sugar
content in faes that is more e/traction4
;-N:!-CT:3E DEP-3T;ENT
!his department is headed by Chief Chemist4 !o manufacture the ma/imum
?uality the sugar from the cane juice of superior ISI4 grade minimie the sugar
losses in bye7products to maintain the register and calculations of sugar entering in
the house and production submit day to day report of production and recoverable
sugar and e/cise matters in the season4 In the off season maintenance of the
boiling house plant4
6-TC9 -ND 6-3D
!his department is headed by security officer4 Security of factory and control
on gates and supervision day and night all over the factory area from security point
of vie#49
&)
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

1TO3E1 DEP-3T;ENT
!his department is headed by store (eeper4 !o (eep the sores and re?uired
materials for the factory section #ise in a proper #ay and to maintain their
registers and big cards of indents Border goodsC
!:NCTION1>
$O "eceiving the materials
&O =nfolding the pac(ing4
*O !a(es entry in store receipt Boo( BS"BC
-O +reparing bills after receiving ?uality memo bac(4
.O Stac(ing the materials4
%O Issue of materials to concerned sections as per their indents4

TI;E O!!ICE DEP-3T;ENT
!his department is headed by head time (eeper4 !o maintain the register of
attendance of the factory staff to prepare the pay sheets and leave records and
personal services register of the staff4
-D;INI1T3-TIE O!!ICE
!he office time is from $;4*; to .4*;pm
!he lunch brea( is from $4*; to &4;; pm
!-CTO3< P3E;I1E1
InsideA from 2A*;am to .A*;pm
&"
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he lunch brea( is from $&A*; to $A*; pm
-73IC:0T:3-0 DEP-3T;ENT
!his department is headed by Cane development officer4 Cane procurement9
harvesting Bto reapC and development of cane4 !o ma(e the provision of proper
seed of cane to the cultivators9 soil testing and proper guideline for measuring etc4

CII0 DEP-3T;ENT
!his department is headed by civil engineer4 Construction of the roads for
proper transport of cane in the area9 civil #or(s of the factory9 maintenance of the
factory building etc4
0-*O:3 6E0!-3E
!his department is headed by labour #elfare officer4 !o loo( into the #elfare
activities of the #or(er and solve the labour problems4 !he factory provides all the
necessary facilities4 !he purpose of providing #elfare amenities is to facilitate the
development of total personality of #or(ing class for physical9 mental9
psychological9 cultural9 social9 moral and intellectual development the factory
provides #ell planned residential accommodation9 medical facilities9 educational
facilities9 drin(ing and #ashing #ater9 canteen9 cycle stand9 library etc4 In addition9
the factory has follo#ing non7statutory schemes for #or(ers #elfare4 Consumers
society9 uniforms to #atchman production and engineering #or(ers etc4
O*AECTIE1
$C !o secure for the #or(er fair #age4
&'
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

&C !o improve the #or(ing condition and e/press share in the increased
profitability4
*C !o ensure the #or(ers security of employment and protect larger interest
of the society4
-C !o establish relationship bet#een management and employees4
!:NCTION>
$C !o promote harmonious relation bet#een the factory management and
#or(ers4
&C !o bring to the notice of board of directors grievances of #or(ers and to
act as a liaison officer bet#een management and labour4
*C !o study and understand the point of vie# of labour in order to help the
management to shape and formulate labour #elfare policies4
-C !o advice and assist the management in fulfillment of statutory and other
obligations4
.C !o encourage the formation of #or( joint production councils9 co
operative societies and #elfare committee and supervise their #or(4
%C !o secure the provision of amentias such as canteen9 #ashing9 first aid9
shelter9 rest rooms9 launch rooms etc4
)C !o suggest the measure #hich #ill serve to raise the standard of living of
#or(ers and in general to promote their #ell being4
16OT2 -N-0<1I12
I have found some strengths and #ea(nesses9 opportunities to the factory
during my training period at this plant4 Factory is facing some problems regarding
sale of sugar under government restriction4 <o# much government permits to sell
the sugar that much only factory has to sell not more than that it sells through
&#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

?uotations4 It covers small area only4 @ven there is no particular system for
appointment of employees4
1T3EN79T1 2
• !he major strength is crushing capacity and highest chimney and
pac(ing of bags per day4
• It is producing o#n electricity it reduces the cost of electric bills4
• It also sells electricity to the 5+!CL4
• !his factory has its o#n truc(s and some other vehicles9 #hich
reduces transportation charges4
• !hey have foreign customers too4
• 1ood Administration
• <ealthy management labour relations
• Superior product ?uality
• S(illed and efficient staff and labour force
• Ma/imum profitability due to various by products
• 0ell structured distribution channel4
• Improved infrastructure4
• In total this factory has a very good organiation structure
6E-?NE112
• It does not have separate <" department9 so the selection of employees is
not satisfactory and it creates lot of burden on labour #elfare officer4
&&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

• !oo much stoc( of sugar in godo#n4
• !hey purchased t#o #heeler vehicles and truc(s on loan4 3uring off7season
they remain idle9 but the interest of the loan is al#ays shooting up4
• !hey donEt have particular employee for particular #or(4 Anybody can do
any #or( assigned by their respective superiors4
• <igh cost of production4
• 6o control on minimiing the losses in process4
• Company canEt sell as much as sugar in the mar(et at any specific time9 as
sugar release mechanism is controlled by government of India4
OPPO3T:NITIE12
• It is located in the best area4 <ere all the resources are available in less cost4
• Offer replacement of machinery to ne# machinery for good running of
factory4
• +resent production performance per tone is e/cellent4
• 6on7establishment of the programs to motivate and develop effective
manpo#er4
• "estricted mar(et opportunities shir(ed a better price for finished products4
• "educing the overhead e/penditure4
• !o provide comfort and convince to employees for doing the #or(4
&(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

• !o facilitate the smooth running of the manufacturing process4
T93E-T12
!he production comes under haardous activities9 competition are
updating latest technology4
• 3ue to uncertain rainfall procurement of ra# material is being affected4
• <igh competition in procurement of ra# material4
• !he main ra# material sugarcane may not sufficiently be available in future4
• Change in various government policies4
C9-PTE32 III
DE1I7N O! T9E 1T:D<
#." 1tatement of the pro+lem
Financial analysis being an integral part of overall corporate
management and it is one of the po#erful tools of financial performance analysis4
&%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he analysis of financial statement of S"SL is done in order to (no# the
companyEs financial position4
#.' O+=ectives of the study
For the purpose of any research9 objective is must4 It sho#s the
direction #ith #hich the tas( can be accomplished4
!he specific objectives of the study are
aC !o determine the operational efficiency of the company using ratio analysis4
bC !o (no# the changes in financial statements for the past * years using trend
analysis4
cC !o conduct cash and fund flo# statement for &;;)7 &;;2
dC !o identify the financial strength and #ea(ness that the firm might have4
#.# 1cope of the study
!he scope of the study is to find out ho# assets and liabilities are
maintained4 It is done through the Balance sheet of the company9 for the periods9
&;;-7&;;.9 &;;.7&;;%9 &;;%7&;;) and &;;)7&;;24
#.& ;ethodology
!his project is an analytical research #here in the researcher has to
use the available facts as information and analye these to ma(e a critical
evaluation of materials4 !his is also an applied research #ith an aim to find a
solution for immediate problems facing industry or the firm4
&$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he methodologies follo#ed in the analysis of the financial
statement are comparative statement9 Common sie statement9 !rend analysis9 ratio
analysis9 fund flo# analysis and cash flo# analysis4
#.( Purpose of the study
 !he purpose of doing this project is mainly to ma(e a thorough study of the
financial analysis of the company4
 !o access the companyEs trends for the last four years #ith regard to
li?uidity performance4
 !he purpose also includes assessing the impact of financial analysis on
li?uidity strength of the company
#.% 1ources of data collection
$4 Primary dataA !he data re?uired for the project #as collected minor
through primary data4 !hat is through intervie#ing L discussion #ith
concerned authorities in the company4
&4 1econdary dataA !he major source of data for this project #as collected
from annual reports9 profit and loss account9 manuals L some more
information collected through the internet4
Plan of analysis
!his study is conducted #ith the help of statistics figures L
techni?ues li(e 1raphs L charts for better comparison and interpretation4
&/
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Tools and techniGues used for analysis
!he follo#ing are the methods of financial analysis used in general4
$4 Comparative financial statements
&4 Common7sie financial statements
*4 !rend percentage analysis
-4 ratio analysis
.4 fund flo# analysis
%4 cash flo# analysis
#.$ 0imitations
$4 !he study is done only on the Balance sheet and +rofit and loss account4
$4 Study is based on information provided by the company4
C9-PTE32 I
!IN-NCI-0 -N-0<1I1
&.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Financial analysis is the selection9 evaluation and interpretation of
financial data9 along #ith other pertinent information9 to assist in investment and
financial decision7 ma(ing4 Financial analysis may be used internally to evaluate
issues such as employee performance9 the efficiency of operations9 and credit
policies9 and e/ternally to evaluate potential investments and the credit7#orthiness
of borro#ers9 among other things4
!he analyst dra#s the financial data needed in financial analysis from many
sources4 !he primary source is the data provided by the firm itself in its annual
report and re?uired disclosures4 !he annual report comprises the income
statements9 the balance sheet9 and the statement of cash flo#s4 Certain businesses
are re?uired by securities la# to disclose additional information4
!he financial analyst must select the pertinent information9 analye it9 and
interpret the analysis9 enabling judgments on the current and future financial
condition and operating performance of the firm4 In this reading9 #e introduce you
to financial ratios777777 the tool of financial analysis4 In financial ratio analysis #e
select the relevant information7777 primarily the financial statement data777 and
evaluate it4 0e sho# ho# to incorporate mar(et data and economic data in the
analysis and interpretation of financial ratios and #e sho# ho# to interpret
financial ratio analysis4
&." !IN-NCI-0 1T-TE;ENT1
()
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he Financial statements are the end product of the financial accounting
process4 !he financial statements are nothing but the financial information
presented in concise and capsule form9 and the financial information is the
information relating to the financial position of any firm4 !herefore the financial
statements are the depiction of the financial position of firm4
!he basic source #hich provides the financial information is the annual
report of the company9 #hich is presented by the company to its shareholders at the
annual general meeting4 !his annual report contains the chairmanEs report9 the
balance sheet9 the income statement 9 the auditors report together #ith number of
schedules9 anne/ure etc4 !hough the presentation of annual report is a statutory
re?uirement under the companies Act of $,.%4 @very firm prepares the follo#ing
financial statement4
$4 !he Balance Sheet
&4 !he Income Statement
&.' *-0-NCE 19EET
!he Balance sheet is regarded as the most significant and basic financial
statement of any firm4 !he Balance sheet is prepared by a firm to present a
summery of financial position at a given point of time9 usually at the end of a
financial year4 It sho#s the statement of affairs of the firm and the contribution of
the o#ners of the firm4 !he BS in fact balances the assets of firm against its
financing i4e4 the total value of the assets must be e?ual to the total claims against
the firm and this can be stated as

Total assets P !otal claims B3ebt Q shareholdersC
P Liabilities Q shareholders e?uity
("
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

The *alance sheet includesA
$4 Assets
&4 Liabilities
• -11ET1
Assets are the monetary value of the resources that o#ned by the
concern at a measurable cost4 A resource is valuable if it is in form of the cash or
convertible into cash or e/pected to benefit in the future operation of the business9
an asset includes aC physical resources li(e land9 machinery9 plant9 building9 stoc(s
etc4 bC non physical resources li(e cash9 securities9 accounts receivables etc4C
Intangible resources li(e good#ill9 trademar( and dC future benefit li(e e/penses
paid in advance4 Some time some fictitious assets also sho# li(e as incorporation
cost of the company discount on issue of debentures etc4
• Fi/ed assets
• Current assets
!ixed assets
Fi/ed assets are held in business for use not for sale4 !hese assets provide long7
term benefits to the concern4 Fi/ed assets #ill be higher in manufacturing concern4
!he fi/ed assets involves R !angible assets R includes land9 building9 machinery9
e?uipment9 furniture9 fi/tures etc4 these assets are sho#n the balance sheet
deducting the depreciation there on4
aE Intangi+le fixed assets>
('
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!hese assets include the patents9 copyright9 trademar(s9 trade name
good#ill etc4
+E 0ong term investment>
!hese assets represent the firmEs long term investments li(e
investments in share9 investments in debenture and bonds of other firms or
government bodies4
cE Other non current assets>
!hese assets are those #hich represent the deferred charges etc4
dC Current assetsA
Current assets consist of cash and other sources of cash #hich get
converted into cash during the period of operating cycle of the firm4 !hese assets
are o#ned for a short period of time4 !he other name of the current assets includes
cash9 debtors9 bills receivables9 stoc( of #or( in progress9 ban( balance9 advance
payment of e/penses li(e ta/es and insurance9 loan and advances to customers and
employees4
• 0I-*I0ITIE1
Liabilities are the obligations of the concern that is to pay the outsiders4
CONTEN1 O! -NN:-0 3EPO3T>
!he Shree 3oodhaganga 5rishna Saha(ari Sa((are 5ar(hane 6iyamit9 Chi(odi
annual report for the year &;;)7&;;2 contains
aC "eport of the board of directors
bC Auditors report
cC Accounting policies
(#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

• 3eport of the +oard of directors
3irectors report provides a summery of profits made and appropriated
by the company and other relevant information such as industrial relations9
investments9 financing9 reorganiation9 appointment of auditors and directors
etc4 the report of the S"SL board of directors gives a brief account of the
company profit and dividend during the &;;.7&;;%4
• -uditors report
Auditors report to shareholders verifies #hether the balance sheet and
profit and loss account provides a true and fair vie# of the state of a
companyEs affairs4 Auditors should obtain all necessary informations and
e/planations and ensure that proper boo(s of accounts as re?uired by la#
have been prepared by the company4
• -ccounting policies
Companies adopt different accounting policies for preparing their balance
sheet and profit and loss account4 Annual reports incorporate major accounting
policies as #ell as changes made in current year4
(&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

&.# INCO;E 1T-TE;ENT1
Income statement is9 also (no#n as the profit and loss account or the
statement of earnings9 summaries the revenues and e/penses of the firm for an
accounting period4 It gives a detail of sources of income and e/penses and thus it
provides the summery of the operating results of the firm for a specific period4 It
matches the revenues #ith the costs that are incurred in generating the revenues9
and sho#s the difference bet#een the t#o as the net profit made or net loss
incurred during the period4 !he IS sho#s the results of the operations of the firm
during the period4 !he IS therefore9 is a flo# report against the BS #hich is a stoc(
report or a status report4 !he IS depicts the earning capacity of the firm during the
period under consideration4
+rofit and loss account presents the summery of revenues9 e/penses and
net income of a firm4 It serves as a measure of the firmEs profitability4 "evenues are
amount4 !he main content of the income statement areA
 6et sales
 Cost of goods sold
 1ross profit
 Operating e/penses
 Operating income
 6on operating e/penses
 6on operating income
((
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

 +rofit
 Loss
&.& -N-0<1I1 O! !IN-NCI-0 1T-TE;ENT
AFS refers to the process of the critical e/amination of the financial
information contained in the financial statement in order to understand and ma(e
decisions regarding the operations of the firm4 !he AFS is basically a study of the
relationship among various financial facts and figures as given in a set of financial
statements4 !he basic financial statements i4e4 the BS and IS9 already discussed in
the preceding section contain a #hole lot of historical data4
It is very important to analysis the financial statement to (no# the
different factors to see are behind the change in the figures of the financial
statement4 Analysis of financial statements contains comparison bet#een different
figures of different periods9 comparison4
Process of the analysis of the financial statements>
Financial statement analysis contains the follo#ing stepsA
 Analysis of all transaction one by one to determine the accounts
to credited and debited evaluate all transactions to ascertain the
amount involved in that4
 Analysis of recording of the transactions in the journal9
summaries that in ledger and preparation of trial balance4
 +reparation of final accounts or financial statements4
(%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

 1et different information by analying these statements and
provide the information to the interested parties li(e the ban(ers9
investors9 creditors and managerial personals4
&.( 1ignificance of the financial statement analysis>
!he analysis of financial statement is very important for the different
parties related to the concern i4e4 internal users and e/ternal users4 !he
significance of the financial statement analysis #ill be clear from the
follo#ing pointsA7
• !his analysis simplifies9 summaries and present the accounting figures
in that #ay that they can provide more and more information to the
different parties for ta(ing the valuable decisions4
• Financial statement analysis is provide in valuable aid to management
for complete the basic functions li(e forecasting9 planning9 directing9 co7
ordaining and control4
• !his analysis diagnose the financial health of the concern by evaluating
different facts of the business i4e4 li?uidity9 solvency9 profitability9
capital gearing etc4
($
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

• !he financial statement analysis involves the different #ays of analysis
and interpretation of the financial statements4 So anyone can ta(e the
decision according to hisKher re?uirement4
• !he analysis of financial statements provides important and useful
information to the management as #ell as other users4 If this analysis
does not ma(e then it is difficult to ta(e decision from the financial
statements4
TEC9NI4:E1@TOO01 O! T9E -!1
!he methodology adopted for the AFS may be varying from one situation to
another4 <o#ever9 the follo#ing are some of the common techni?ues of the AFSA
$4 Comparative financial statements
&4 Common7sie financial statements
*4 !rend percentage analysis
-4 "atio analysis
.4 Fund flo# analysis
%4 Cash flo# analysis
!he ratio analysis is the most common9 comprehensive and po#erful tool of
the AFS4
&.% 1T-TE;ENT O! C9-N7E1 IN !IN-NCI-0 PO1ITION
!#o basic financial statements of importance to o#ners9 management and
investors are Balance sheet and profit and loss account4 Balance sheet gives a
(/
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

summery of firmEs resourcesBassetsC and obligations B liabilities and o#ners e?uityC
at a point of time9 the profit and loss account reflects the result of the business
operations by summariing revenues and e/penses during a period of time4 Both
these statement fail to e/plain the changes in assets and liabilities and o#ners
e?uity4 !his statement is intended to summaries4
• Changes in assets and liabilities resulting from financial and investment
transactions during the period9 as #ell as those changes #hich resulted
due to change in o#nerEs e?uity4
• !he statement of changes in financial position deals #ith the flo# of
funds during the year i4e49 the funds coming in and going out of the firm4
It summaries the sources from #here the funds might have been
arranged by the firm and the uses for #hich the funds might have been
used by the firm during the year4 !he follo#ing are the important
concepts of funds4
• !he term funds may be ta(en to refer to cash only4 !his is a general
notation of the term funds and is used for e/pressing the li?uidity of a
firm4 !herefore9 a SCF+ based on this concept of funds #ill report and
include only those transaction #hich are affecting the cash balance9 such
SCF+ #ill be just a summery of the cash transactions4 <ence9 non7
monetary transaction such as purchase of fi/ed assets by issue of
debenture #ill not be reported in a SCF+4
• !he term funds may also be used to denote the net #or(ing capital of the
firm4 !he net #or(ing is the difference bet#een the total current assets
and total current liabilities4 Since9 cash is only one of the several current
(.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

assetsD this vie# of the term funds is broader than the preceding concept4
A SCF+ prepared on the basis of the net #or(ing capital concept of funds
#ill include all those transactions #hich affect the net #or(ing capital of
the firm4 So9 any transaction affecting current assets or current liabilities
#ill find place in the SCF+4 <o#ever9 there may be different transaction
#hich do not affect the net #or(ing capital and therefore9 #ill be outside
the scope of SCF+4
C9-PTE32
D-T- -N-0<1I1 -ND INTE3P3ET-TION
(." CO;P-3-TIE !IN-NCI-0 1T-TE;EN0 HC!1E
In CFS9 t#o or more BS andK or the IS of a firm are presented
simultaneously in columnar form4 !he financial data for t#o or more years are
placed and presented in adjacent columns and thereby the financial data is
provided a times perspective in order to facilitate periodic comparison4
!he preparation of the CFS is based on the premise that a statement covering
a period of a number of years is more meaningful and significant than for a single
year only9 and that the financial statement for one period represent only $ phase of
the long and continuous history of the firm4
%)
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he CFS can be prepared for both the BS and the IS4
(." aE CO;P-3-TIE *-0-NCE 19EET HC*1E
!he CBS sho#s the different assets and liabilities of the firm on different
dates to ma(e comparisons of absolute balances and also of changes if any9 from
one date of another4 !he CBS may be helpful in analying and evaluating the
financial position of the firm over a period of number of years4
Ta+le No. "
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
Comparative *alance 1heet
H-mts in croresE
Particulars '))%2'))$ '))$2'))/ INC3E-1E@ INC3E-1E @
DEC3E-1EH-mtE
DEC3E-1E
HItageE
0I-*I0ITIE1 2
Share Capital $*&4$, $**4%% $4-) $4$&
"eserves L Surpluses %)%42; ).)4,; 2$4$; $$4,,
!erm loan -;,4-, .;&42* ,*4*- &&42;
0or(ing capital loan ,$&4-% )$)42. B$,-4%$C &$4**
Ban( O4 34 payable 24-; $&42* -4-* .&4)-
Statutory and other deposits %2*4$2 %%%4$) B$)4;$C &4-,
Suspense9 sundries L other ...4,, -)$4;) B2-4,&C $.4&2
Total ##$/.(" #'%'.#" H""%.')E #.&&
-11ET1 2
%"
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Fi/ed assets $&,%4*; $*;)4-- $$4$- ;42%
Investments &4%& $%4)* $-4$$ .2*4..
Current assets $&-&4-) $;*,42) B&;&4%C $%4*$
Loans and advances -24.. $;$4-- .&42, $;24,-
3ebtors &)&4,* &)-4** $4-; ;4.&
Cash in hand ;4*& ;4*; B;4;&C %4&.
Cash at ban( $.24** $*&4-; B&.4,*C $%4*2
+rofit and loss account *.%4,, *2,42; *&42$ ,4$,
Total ##$/.(" #'%'.#" H""%.')E #.&&
INTE3P3ET-TION
Current assets
!he investments in the current assets are lo# and it has decreasing trend
over the period under study4 !he current assets have decreased by "s4 &;&4%;
BcroresC i4e49 "s4$&-&4-) in &;;) and "s4$;*,42) in &;;24 So it is significantly
effects on the li?uidity position of the company and it also decrease the #or(ing
capital of the company4
Net fixed assets
!he net fi/ed assets increased by $$4$-BcroresC i4e49 almost $*;)4-- in &;;2
#hen composed to &;;)4 So it is increased the financial performance of the
company4
Investments
!here is change in investments for comparing the previous year and the
current year4 For previous year it #ill be "s4 &4%& BcroresC and for current year it
#ill be "s4 $%4)* BcroresC4
Current lia+ilities
%'
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Current liabilities include current liabilities and provisions4 Current
liabilities and provisions decreased by "s4&).4$;BcroresC i4e49 about "s4$-)%42. in
&;;) #hen composed to "s4$&;$4). in &;;24
4 3eserve and surplus
!he "eserve and Surplus has increased by "s42$4$;BcroresC i4e9 about
"s4%)%42; in &;;) to "s4).)4,; in &;;24
(." +E CO;P-3-TIE INCO;E 1T-TE;ENT HCI1E
A CIS sho#s the figure of different items of the IS of the firm in
absolute terms9 the absolute changes from one period to another and if desired9 the
changes in percentage form4 !he CIS is helpful in deriving meaningful conclusions
regarding changes in sales volume9 cost of goods sold9 different e/penses items etc4
from the CIS9 a financial analyst can ?uic(ly ascertain #hether sales are increasing
or decreasing and by ho# much amount or by ho# much percentage4
Ta+le No. '
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
CO;P-3-TIE INCO;E 1T-TE;ENT
H-mounts in croresE
'))%2'))$ '))$2'))/ Increase@decrease Increase@decrease
Details -;O:NT HItageE
Income
Sales B"evenuesC $%-;42$ $))*4$; $*&4&, 24;)
Other Income $;4-2 *4&. )4&* %24,,
Total "%(".'. "$$%.#( "'(.)% $.(/
%#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

@/penditure
Cost of goods sold $.$)4,. $%&-42$ $;%42% )4;-
7ross Profit $**4*- $.$4.- "/.' "#.%(
Selling and Administration
@/penseBoperating e/pC &).'# .&.$( .-4.& $*.4.&
Operating income -&4*. $4*% &)... .%.$.
6on operating e/p $&-4*) $%$4%& *)4&. &,4,.
Non operating income $."# $).%% %#.(# /.".)#
0oss "/.'' #'./" "&.(. /).)/
INTE3P3ET-TION
On the basis of comparative income statement it can be said that gross profit
for the year &;;% has increased by "s4$24&; over the profit for the year &;;24 !he
6et sales during the same period have increased by "s4$*&4&,4 !he cost of goods
sold increased by "s4$;%42%4
!he selling and Administrative e/penses increased by $*.4.&F 6on
operating income for the year &;;2 is increased by 2,$4;*F4 !he non operating
e/pense is increased by &,4,.F during the year &;;24 !he 6et loss is increased
2;4;2F4
(.' CO;;ON 1IFE 1T-TE;ENT
!he CSS represents the relationship of different items of a financial
statement #ith some common item by e/pressing each item as a percentage of the
common item4 In common sie Balance sheet9 each item of the Balance sheet is
stated is stated as a percentage of the total of the Balance sheet4 Similarly in
common sie income statement9 each item is stated as percentage of the net sales4
%&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he percentage for different items is computed by dividing the absolute amount of
that item by the common base and then multiplying by $;;4 !he percentage so
calculated can be easily compared #ith the corresponding percentages in some
other period4
Ta+le No. #
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
CO;;ON 1IFE INCO;E 1T-TE;ENT
H-mts in croresE
Particulars '))( '))% '))$ '))/
6et sales $;; $;; $;; $;;
less7cost of goods
sold ),4;2 ,%4)2 ,&4.& ,$4%-
7.P. ')./. #.'' $.&. /.#$
less7selling
Ladministrative e/p &-4&. $$4&2 &4-% .4*.
Add7operating
income &$4$* $4*; &4., ;4;2
Less76on operating
e/p $.4-. %4,* )4.2 ,4$&
Add76on operating
income ;4&- ;4), ;4-- *4,,
Profit '.(% ).&/
0oss "'..) '.)&
%(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Ta+le No. &
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
CO;;ON 1IFE *-0-NCE 19EET
H-mts in croresE
Particulars '))&2)( '))(2)% '))%2)$ '))$2)/
0I-*I0ITIE1 2
Share Capital *4,$ *4-- *4,& -4$;
"eserves L Surpluses $%4)- $24$- &;4;& &*4&*
!erm loan $,4&. $%4-* $&4$& $.4-&
0or(ing capital loan &&4). &.4&* &)4;$ &&4;$
Ban( O4 34 payable ;4,% ;4$2 ;4&. ;4-;
Statutory and other deposits &)4&- &*4)* &;4&* &;4-$
Suspense9 sundries L other ,4$. $&42. $%4-. $-4-*
Total ")) ")) ")) "))
-11ET1 2
Fi/ed assets -;4$2 *,4*$ *24*) -;4;2
Investments ;4;. ;4;) ;4;2 ;4.&
Current assets -.4)$ -24%) *%4)2 *4$$
Loans and advances $42; $4.. $4-- *$42%
3ebtors 24), )4,. 24;2 24-$
Cash in hand ;4;. ;4;- ;4;$ ;4;$
Cash at ban( &4,) $4,) -4%) -4;%
Other assets ;4-. ;4-- 7 7
+rofit and loss account 7 7 $;4.) $$4,.
Total ")) ")) ")) "))
%%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

(.# T3END PE3CENT-7E -N-0<1I1
!he !+A is a techni?ue of studying several financial statements over
a series of years4 In !+A the trend percentage are calculated for each item by ta(ing
the figure of that item for some base year as "S4 $;;4 So9 the trend percentage is
the percentage relationship #hich each item of different years bears to the same
item in the base year4 Any year may be ta(en as the base year9 but generally the
startingKinitial year is ta(en as the base year4 So9 each item for base year is ta(en as
$;;and then the same item for other years is e/pressed as a percentage of the base
year4
Ta+le No. (
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
T3END -N-0<1I1 INCO;E 1T-TE;ENT
BAmounts in croresC
!rend percentage BFC
+articulars &;;% &;;) &;;2
Sales $;; $&;4$) $&,42%
Less7 cost of sales $;; $$-42) $&&4,%
7ross profit ")) '$..&. ##$.##
Less7 admin L selling e/p4 $;; &%4$- %$4.%
Add7 operating income $;; &*24)* )4%)
Less7 6on operating e/p $;; $*.4.* .,4.-
Add7 6on operating income $;; ;4** .)4$*
Profit ")) %%.%&
0oss ")) %%).#/
%$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Ta+le No. %
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
T3END -N-0<-1I1 *-0-NCE 19EET
BAmounts in croresC
Particulars '))(2'))% '))%2)$ '))$2)/
0I-*I0ITIE1 2
Share Capital $;; $&;%4,* $&&;4*;
"eserves L Surpluses $;; $$)4&& $*$4&)
!erm loan $;; ,%4$* )24&2
0or(ing capital loan $;; $$*4%& 2,4*,
Ban( O4 34 payable $;; $*,4;) &$&4-$
Statutory and other deposits $;; ,;4-- 224$,
Suspense9 sundries L other $;; $*.422 $$.4$&
Total ")) ")%."' ")'.&$
-11ET1 2
Fi/ed assets $;; $;*4%; $;-4.;
Investments $;; $;*4,2 %%%4.*
Current assets $;; 2;4$2 %)4$;
Loans and advances $;; ,24-$ &;.4%*
3ebtors $;; $;)42* $;24*2
Cash in hand $;; &24*$ &%4.-
Cash at ban( $;; &.$4), &$;4..
Other assets $;; 7 7
+rofit and loss account $;; 7 7
Total ")) ")%."' ")'.&$
I6!@"+"@!A!IO6A
Current -ssets and Current 0ia+ilities
%/
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Current assets and current liabilities have declined in current year4 It
affected the li?uidity of a company4 Current assets are %)4$;F in &;;2 and Current
Liabilities are $&24;2F in &;;24
Net fixed assets
!he net fi/ed assets increased in &;;2 by $;-4.;F and $;*4%; in &;;)4 It
sho#s the company is more invested in fi/ed assets4
Investments
!here is change in investments for comparing the base year and the current
year4 For previous year it #ill be $;*4,2F and for current year it #ill be %%%4.*F4
(.& R.TIO .N.LYSIS
;E-NIN7
"atio analysis is a #idely7used tool of financial analysis4 It is defined as the
systematic use of ratio to interpret the financial statements to that the strength and
#ea(nesses of a firm as #ell as its historical performance and current financial
condition can be determined4 A ratio is relationship e/pressed in mathematical
terms bet#een t#o individual and groups of figures connected #ith each other in
some logical manner4 !he relationship bet#een t#o or more accounting
figuresKgroups is called financial ratio4 A financial ratio helps to summarie a large
mass of financial data into a concise form and to ma(e meaningful interpretation
and conclusion about the performance and positions of a firm4
T<PE1 O! 3-TIO
%.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

"atio can be classified into four broad groupsA
• LI'=I3I!> "A!IOS
• L@I@"A1@ "A!IOS
• AC!III!> "A!IOS
• +"OFI!ABILI!> "A!IOS
0I4:IDIT< 3-TIO
Li?uidity ratio measures the ability of the firm to meet its current obligation4
In fact9 analysis of li?uidity needs the preparation of cash budgets and cash and
fund flo# statementsD but li?uidity ratio9 by establishing a relationship bet#een
cash and other current assets to current obligation9 provide a ?uic( measure of
li?uidity4

!he most common ratios #hich indicate the e/tent of li?uidity areA
Current ratio
4uic5 ratio
• Current ratio
!he current ratio is calculated by dividing current assets by current liabilitiesA

Current ratio P current assets
SSSSSSSSSSSSSSSSSSSSSSS
Current liabilities
Current assets include cash and those assets #hich can be converted into cash
#ithin a year9 such as mar(etable securities9 debtors and inventories4 !he standard
ratio is &A$4
$)
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Ta+le No. $
C9-3T 19O6IN7 C:33ENT -11ET1
TO C:3ENT 0I-*I0ITIE1
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
$4 C=""@6!
"A!IO $4.$ $4&. $4-$ $4&$
Current Assets $-;&422 $.&$4;) $%)*4)- $--%4,&
Current Liabilities ,*&4-) $&$%4.; $-)&4,. $&;;4.&
Chart No. "
INTE3P3ET-TION
$"
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

As a matter of policy or as referred to as ban(erEs rule of thumb9 the
current ratio of &A$ is considered to be satisfactory4 !he analysis is proved that the
current ratio position of the 35SS5 is not fully satisfactory4 !hat is $4.$ times in
&;;.9 $4&. times in &;;%9 $4$- times in &;;)9 $4&$ times in &;;24
• 4uic5 ratio
'uic( ratio establishes a relationship bet#een ?uic(9 or li?uid9 assets and
current liabilities4 An asset is li?uid if it can be converted into cash immediately or
reasonably soon #ithout a loss of value4 Inventories are considered to be less
li?uid4 !he ?uic( ratio is found out by dividing ?uic( asset by current liabilities4
!he standard ratio is $A$4
'uic( ratio P li?uid assets
SSSSSSSSSSSSSSSSSSSSSSS
li?uid liabilities
Ta+le No. /
$'
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

C9-3T 19O6IN7 0I4:ID -11ET1
TO 0I4:ID 0I-*I0ITIE1
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
&4 '=IC5 "A!IO ;4.; ;4*2 ;4-$ ;4-%
Li?uid assets -.;4%; -.-4*& .,.4-. .*.4),
Li?uid Liabilities ,;.4&; $&$;4-. $-%-4.. $$2)4%2
Chart No. '
INTE3P3ET-TION
$#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he ?uic( ratio of $A$ is considered satisfactory4 !he company is not
having a good li?uidity4 !hat is in the years &;;.9 &;;%9 &;;) and &;;2 the ?uic(
conversion ratio is ;4.;9 ;4*29 ;4-$9 and ;4-% times respectively of the current
liabilities4
1O0-NC< 3-TIO

!hese ratios are used in analying long term solvency of a firm4
!hese ratios indicate the pattern of financing i4e4 #hether long term re?uirements
have been met out of long term funds or not4
Proprietary ratio
1olvency ratio
• Proprietary ratio
It is the ratio of proprietorEs funds to tangible assets4 !he standard is
).F to 2.F4

+roprietary ratio P Share holders funds
SSSSSSSSSSSSSSSSSSSSSSS
!otal tangible assets

Ta+le No..
$&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

C9-3T 19O6IN7 19-3E 9O0DE31
TO T-N7I*0E -11ET1
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
*4 +"O+"I@!A">
"A!IO ;4-; ;4-- ;4-) ;4%$
Share holders funds .**42, %*$4,2 ).-4$$ 2*%4%2
!otal tangible assets $*-,4,; $-%%4$2 $%$242. $*,&4;*
Chart No. #
INTE3P3ET-TION
$(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!his ratio sho#s the ris( means9 high ratio sho#s the lesser ris( to the
creditors4 In &;;. it is ;4-;9 &;;% it is ;4--9 &;;) it is ;4-) and &;;2 it is ;4%$4 !he
proprietary ratio #ill be satisfactory4
• 1olvency ratio
It refers to the ability of the firm to pay both short term and long term
liabilities4 A co is solvent9 if it can meet its outside liability out of its total assets4
Solvency ratio P Out side liabilities
SSSSSSSSSSSSSSSSSSSSSSST $;;
!otal assets
Ta+le No. ")
$%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

C9-3T 19O6IN7 O:T 1IDE 0I-*I0IT<
TO TOT-0 -11ET1
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
-4 SOLI@6C>
"A!IO ;4%& ;4%- ;4%; ;4)$
Out side liabilities 2&24;, ,*.4%* ,%,4$& ,2-4%$
!otal assets $*-,4,; $-%%4$2 $%$242. $*,&4;*
Chart No. &
$$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

INTE3P3ET-TION
!he company cannot meet solvency because there is high solvency
ratio4 <igh solvency ratio sho#s insolvent4 !he company cannot pay both short
term and long term liabilities4 i4e4 &;;.9 &;;%9 &;;) and &;;2 are ;4%&9 ;4%-9 ;4%&
and ;4)$ respectively4
E!!ICIENC< 3-TIO
@fficiency ratios measures efficiency #ith #hich the assets are managed
in the business4 <igh ratio indicates efficient management of assets and lo# ratio
depicts inefficient management of assets4
!ixed assets turn over ratio
6or5ing capital turnover ratio
• !ixed assets turnover ratio
!his ratio indicates the e/tent to #hich the investment in fi/ed assets
contribute to#ards sales4
Fi/ed assets turnover ratio P 6et sales
SSSSSSSSSSSSSSSSSSSSSSS
Fi/ed assets
Ta+le No. ""
C9-3T 19O6IN7 NET 1-0E1
$/
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

TO !I,ED -11ET1
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
.4 FIM@3
ASS@!S
!="6OI@"
"O!IO $4;; $4$; $4&) $4*%
6et sales $$-*4$. $*%.4-) $%-;42$ $))*4$;
Fi/ed assets $$-&4$$ $&.$4$. $&,%4*; $*;)4--
Chart No.(
INTE3P3ET-TION
$.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!here is a more investment in fi/ed assets4 All fi/ed assets are
contributed to#ards sales4 In &;;. it is $4;;9 &;;% it is $4$;9 &;;) it is $4&) and
&;;2 it is $4*% there is increase in fi/ed assets4
• 6or5ing capital turnover ratio
!his ratio sho#s #hether #or(ing capital has been efficiency used in
ma(ing sales4 <igh ratio indicates higher operating efficiency of a firm4
0or(ing capital turnover ratio P 6et sales
SSSSSSSSSSSSSSSSSSSSSSS
0or(ing capital
Ta+le No. "'
C9-3T 19O6IN7 NET 1-0E1
/)
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

TO 6O3?IN7 C-PIT-0
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
%40O"5I61
CA+I!AL
!="6OI@"
"A!IO -4%- %42; .4*, *4))
6et sales $$-*4$. $*%.4-) $%-;42$ $))*4$;
0or(ing capital &-%4-; &;;4)2 *;-4.% -);4-;
Chart No. %
INTE3P3ET-TION
/"
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

3ecrease in #or(ing capital turnover ratio4i4e4 -4-%9 %42;9 .4*, and
*4)) in &;;.9 &;;%9 &;;) and &;;2 respectively4 It sho#s the #or(ing capital does
Nnot efficiently used in ma(ing sales4
P3O!IT-*I0IT< 3-TIO
+rofitability is an indicator of efficiency #ith #hich the operations of the
business are performed4 +rofitability ratios are used to (no# ho# efficiently
operations are carried out4
7ross profit ratio
Operating cost ratio
3eturn on investment
• 7ross profit ratio
It is ratio of gross profit to net sales e/pressed as a percentage4 It sho#s
the relationship bet#een gross profit and sales4
1ross profit ratio P 1ross profit
SSSSSSSSSSSSSSSSSSSSSSST $;;
6et sales
Ta+le No. "#
/'
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

C9-3T 19O6IN7 73O11 P3O!IT
TO NET 1-0E1
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
)4 1"OSS
+"OFI! ;4&$ ;4;- ;4;2 ;4;,
1ross profit &*24). -*4,% $&&42% $-24&,
6et sales $$-*4$. $*%.4-) $%-;42$ $))*4$;
Chart No. $
INTE3P3ET-TION
/#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he gross profit ratio #ill be slightly increased from &;;% to &;;24
i4e4 ;4;-9 ;4;2 and ;4;, respectively4 It helps to ascertain the average gross margin
to be maintained on sales4
Operating cost ratio
!his is the ratio of net profit to net sales4 It indicates #hether the cost
component in the sales is higher or lo#4
Operating cost ratio P operating cost
SSSSSSSSSSSSSSSSSSSSSSST $;;
6et sales
/&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Ta+le No. "&
C9-3T 19O6IN7 OPE3-TIN7 CO1T
TO NET 1-0E1
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
24O+@"A!I61 COS!
"A!IO $;*4*) $-4.; ,4,- $*4)$
Operating cost $$2$4., $,)422 $%*4;, &-*4;-
6et sales $$-*4$. $*%.4-) $%-;42$ $))*4$;
Chart no. /
INTE3P3ET-TION
/(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he operating cost ratio sho#s the operating efficiency of a firm4
!here is a standard up to ).F to 2.F4i4e $;*4*)9 $-4.;9 ,4,- and $*4)$ in &;;.9
&;;;%9 &;;) and &;;2 respectively4
3eturn on investment ratio
!his is the ratio #hich indicates percentage of return on capital invested
in the business4 It sho#s the efficiency of the business as a #hole4
Operating profit
"OI ratio P SSSSSSSSSSSSSSSSSSSSSSST $;;
Capital employed
/%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Ta+le No. "(
C9-3T 19O6IN7 OPE3-TIN7 P3O!IT
TO C-PIT-0 E;P0O<ED
Details
'))&2
)(
'))(2
)%
'))%2
)$
'))$2
)/
$4"@!="6 O6
I6I@S!M@6!
"A!IO 7 ;4;* 7 ;4;, ;4;) ;4;-
Operating profit 7 *24--
7
$;,4%% 2&4%* .*4.-
Capital employed $$*-4;- $&;,4,* $&$24-, $*,-4-;
Chart No. .
INTE3P3ET-TION
/$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

"eturn on investment sho#s the capital is fruitfully employed in
the business or not4 !he "OI ratio #ill be lo# compare to &;;) i4e4 ;4;) and ;4;-
in &;;24there is no "OI in &;;. and &;;%4
(.( !:ND !0O6 1T-TE;ENT
M@A6I61
Fund flo# statement is a statement of sources and application of
funds4 According to "obert Anthony9 8the funds flo# statement describes the
sources from #hich funds #ere derived and the uses to #hich these funds #ere
put4:

In other #ords of Smith and Bro#n9: A funds flo# statement is
prepared in summary form to indicate changes occurring in terms of financial
condition bet#een t#o different balance sheets4 In short9 it is a statement #hich
sho#s ho# the #or(ing capital is obtained and ho# it is put to use4
//
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Ta+le No. "%
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
1C9ED:0E O! C9-N7E1 IN 6O3?IN7 C-PIT-0
BAmounts in croresC
Particulars Previous
year
Current
year
Increases in
8.c.
Decreases in
8.c.
Current assets
Current assets $&-&4-) $;*,42) 2 &;&4%;
Loans L advances -24.. $;$4-- .&42) 7
"eceivables &)&4,* &)-4** $4-; 7
Cash ;4*& ;4*; ;4;& 7
Ban( $.24** $*&4-; 7 &.4,*
H-E "$''.%) "(&/.#&
Current lia+ilities
Short term loan ,$&4-% )$)42. $,-4%$ 7
B4O434 24-; $&42* 7 -4-*
Suspense9 sundries L cane
payables
...4,, -)$4;) 2-4,& 7
H*E "&$%./( "')".$(
6or5ing capital H-2*E '&(.$( #&%.(.
Increase or decrease in 8.c. "))./& "))./&
#&%.(. #&%.(. ###./) ###./)
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
!:ND1 !3O; OPE3-TION1
/.
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

BAmounts in croresC
Loss from pLl aGc 7 *&4,%
Add R non fund items debited to pLl aGc
Interest paid $%$4%&
Management e/penses $4$)
"ates and ta/es &&4*)

Total
$2.4$%
"('.')
Less R non operating incomes credited to pLl aGc
Interest on dividend $4*%
!unds from operations "()./&
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
!:ND !0O6 1T-TE;ENT !O3 T9E <E-3 ENDIN7 #"2)#2'))/
BAmounts in croresC
1ources of funds -mount -pplication of funds -mount
Issue of funds $4-) +aid to statutory L other $)4;;
.)
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

deposits
Long term loans ,*4*; +urchases of fi/ed assets $$4;;
Funds from operations $.;42- +urchases of investment $-4;;
"eserve L surplus 2$4;;
!a/ paid &&4$%
Increase in #4c4 $;;42-
'&%.)) '&%.))
INTE3P3ET-TION
!he fund flo# statement sho#s the increase in #or(ing capital
because there is increase in current assets and the sources of funds are hugely used
in purchasing fi/ed assets and investment4
(.% C-19 !0O6 1T-TE;ENT
M@A6I61
A cash flo# statement is a statement9 #hich sho#s the changes in cash
position of a firm from one period to another4 It is a statement indicating inflo#
and out flo# of cash during a financial period4
In other #ords it is a statement #hich provides information about the cash
receipt and payments of a firm for a given period4
."
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

!he Institute of Cost and 0or(s Accountants of India has defined cash
flo# of statement as 8a statement setting out the flo# of cash under distinct heads
of sources of funds and their utiliation to determining the re?uirements of cash
during the given period and to prepare for its ade?uate provision:
Ta+le No. "$
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
1T-TE;ENT O! C-19 !3O; OPE3-TION1
BAmounts in croresC
Funds from operations $.;42-
Add R notional cash received
3ecrease in current assets $)-4&%
#'(.")
Less R notional cash paid
3ecrease in current liabilities &).4$;
Cash from operations ().))
193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
C-19 !0O6 1T-TE;ENT !O3 T9E <E-3 ENDIN7 #"2 #2 '))/
BAmounts in croresC
Opening +alance HCashE "(/.%(
-dd J sources of cash
Issue of shares $4-%
Long term loans ,*4*;
Cash from operations .;4;; $--4)%
#)#.&"
0ess J application of cash
+urchase of fi/ed assets $$4$-
+urchase of investment $-4$&
+aid to statutory L other deposits $)4;;
.'
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

"eserve and surplus 2$4$;
!a/ paid &&4*.
6on trading payments &.4;; $);4)$
Closing +alance HcashE "#'.$)
INTE3P3ET-TION
In cash flo# statement the application of cash is more compare to
sources of cash and it is also helpful in planning for immediate future to avoid
cash shortages4
!IN-NCI-0 1T3EN7T9 -ND 6E-?NE11E1 O! T9E CO;P-N<
S!"@61!<
• On the basis of comparative income statement it can be said that gross profit
for the year &;;2 has increased by "s4$*4%.F over the profit for the year
&;;)4 !he 6et sales during the same period have increased by "s424;)F4
• In comparative balance sheet the fi/ed assets9 investments and reserve and
surplus are increases i4e4 ;42%F9 .2*4..F and $$4,,F respectively4 Current
liabilities are decrease by $24%*F4
• Based on common sie income statement the gross profit is gradually
increases i4e4 &;42,F in &;;.9 *4&&F in &;;%9 )4-,F in &;;) and 24*)F in
&;;24
.#
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

• In common sie balance sheet the share capital9 reserve and surplus9 fi/ed
assets and investments are increases in &;;2 i4e4 -4$;F9 &*4&*F9 -;4;2F
and ;4.&F respectively4
• On the basis of trend income statement the sales are increased by $&,42%F
in &;;2 to $&;4$) in &;;)4 !he gross profit is also increase by &;4);F4
• In trend balance sheet the share capital9 reserve and surplus9 fi/ed assets and
investments are increases i4e4 $&;4*;9 $.,4*$9 $$-4-2 and $$2%4.*4
• Based on ratio analysis the current ratio9 li?uidity ratio and gross profit ratio
slightly increases4 It sho#s the company li?uidity4
• Based on fund flo# statement it sho#s the sources from #hich funds #ere
derived and the uses to #hich these funds #ere put4
• On the basis of cash flo# statement it sho#s the inflo# and out flo# of cash4
0@A56@SS@S
• Based on comparative income statement the selling and Administrative
e/penses increased by $*.4.&F 6on operating income for the year &;;2 is
increased by 2,$4;*F4 !he non operating e/pense is increased by &,4,.F
during the year &;;24 !he 6et loss is increased 2;4;2F4
• In comparative balance sheet the current assets are decrease by $%4*$F4 And
cash L ban( balance also decrease by &&4%.F4
• On the basis of common sie income statement the cost of goods sold is high
i4e4 ),4;2F in &;;.9 ,%4)2F in &;;%9 ,&4.&F in &;;) and ,$4%-F in &;;2
on total sales4
.&
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

• In common sie balance sheet the current assets are decreased by *4$$F4
!he current liabilities are also increased by *%42-F4
• Based on trend income statement the cost of goods sold are increase in
&;;)7 $$-42) and &;;2 7$&&4,%4
• In trend balance sheet the current assets are decreased by 2;4;- and the
current liabilities are increased by *$-4*,4
• Based on ratio analysis the solvency ratio sho#s the insolvent of the
company and return on investment sho#s the capital is not fruitfully
employed in the business4
• Based on fund flo# statement there is a decrease in #or(ing capital and it
sho#s the sources of funds are hugely used in purchasing fi/ed assets4
• On the basis of cash flo# statement the application of cash is more compare
to sources of cash4
C<A+!@" II
!INDIN71 -ND 1:77E1TION1

!INDIN71>
aC !he current ratio and ?uic( ratio are not satisfactory because the current
ratio is not up to the standard limit for efficient utiliation of current assets4
bC In ?uic( ratio the li?uid liabilities are more than li?uid assets4
.(
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

cC !he proprietary ratio is good because the share holderEs funds are up to the
standard limit4 It sho#s lesser ris( but solvency ratio is not satisfactory due
to increases in out side liability4
dC !he fi/ed assets turnover ratio indicates the efficient management of assets4
In #or(ing capital turnover ratio the #or(ing capital is not efficiently used
in ma(ing sales4
eC !he gross profit ratio and operating cost ratio are satisfactory because the
gross profit is high to#ards sales and operating cost is less compare to last
t#o years4
fC "eturn on investment and gross profit also is found to be very very lo# i4e4
negative in the year &;;.7&;;% and it is slightly positive in &;;% and &;;)4
gC !he major application of fund is decrease of #or(ing capital and not
purchase of long term assets4
1:77E1TION1
$4 "atio analysis indicates the firm is not in good health none of the ratios are
reaching the ideal ratios necessary for enhancement of share holderEs #ealth4
<ence the firm should concentrate on enhancing the operating efficiency of
the firm4
.%
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

&4 From the study it is found that the funds are used for short term assets #hich
should be avoided4 !he long term sources of fund should be used for long
term assets and not short term assets4
C<A+!@" III
CONC0:1ION
By analying the topic of 8CAS< A63 F=63 FLO0 A6AL>SIS
A63 "A!IO A6AL>SIS OF 35SS56 L!34 C<I5O3I:
I conclude that the company is more concentrate on raising the
fi/ed assets rather than operating activities #hich decreases #or(ing capital of the
company4 0hich affects the operational efficiency of the company and also the
li?uidity position is not satisfactory due to these reasons4
!his project report helped me to get the good (no#ledge on to
improve the li?uidity position for better maintenance of the company4
C9-PTE3 I,
-NNE,:3E
.$
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

193EE DOOD9-7-N7- ?3I19N- 1-9-?-3I 1-??-3E
?-3?9-NE NI<-;ITB C9I?ODI
*-0-NCE19EET -1 -T
;-3C9 #"
st
2 '))(B '))%B '))$ -ND '))/
BAll amounts in crores of Indian rupees unless other#ise statedC
P-3TIC:0-31 '))&2'))( '))(2'))% '))%2'))$ '))$2'))/
0I-*I0ITIE1 2
Share Capital $$$4$$ $;,4.* $*&4$, $**4%%
"eserves L Surpluses -).4). .))4** %)%42; ).)4,;
!erm loan .-)4$) .&*4;% -;,4-, .;&42*
0or(ing capital loan %-)4;- 2;*4;$ ,$&4-% )$)42.
Ban( O4 34 payable &)4&% %4;- 24-; $&42*
Statutory and other deposits ))-4;$ )..4** %2*4$2 %%%4$)
Suspense9 sundries L other &.,4,$ -;,4$) ...4,, -)$4;)
Total '/&'.'( #"/#.&$ ##$/.(" #'%'.#"
-11ET1 2
Fi/ed assets $$-&4$$ $&.$4$. $&,%4*; $*;)4--
Investments $4-$ &4.& &4%& $%4)*
Current assets
$&,,4$2 $.-,4%; $&-&4-) $;*,42)
Loans and advances
.$4;- -,4*- -24.. $;$4--
3ebtors &-,4.2 &.*4$$ &)&4,* &)-4**
Cash in hand $4.& $4$* ;4*& ;4*;
Cash at ban( 2-4*$ %&422 $.24** $*&4-;
Other assets $*4$; $*4)- 7 7
+rofit and loss account 7 7 *.%4,, *2,42;
Total '/&'.'( #"/#.&$ ##$/.(" #'%'.#"
+"OFI! A63 LOSS ACCO=6! FO" !<@ >@A" @63@3 *$
st
MA"C<
'))(B '))%B '))$ -ND '))/
BAll amounts in crores of Indian rupees unless other#ise statedC
P-3TIC:0-31 '))&2)( '))(2)% '))%2)$ '))$2)/
Income
Sales B6et revenueC $$-*4$. $*%.4-) $%-;42$ $))*4$;
Other Income 7 %&4$% $;4-2 *4&.
./
“CASH AND FUND FLOW ANALYSIS AND RATIO
ANALYSIS’

Total ""&#."( "&'$.%# "%(".'. "$$%.#(
Expenditure
Less 7 Cost of goods sold ,;-4-; $*&$4.$ $.$)4,. $%&-42$
7ross Profit '#/.$( ")%."' "##.#& "(".(&
Less 7 Selling L Administration
@/pense B;perating e/pC &))4$, $.*4,& -;4&* ,-4).
Operating profit@loss 2#/.&& 2&$./) .#."" (%.$.
Add 7 Operating income &-$4-, $)4)- -&4*. );4%%
Less 7 6on operating e/pense $)%4.. ,-4., $&-4*) $%$4%&
Add 7 6on operating income &4)& $;4); )4$* $4*%
Profit '..''
Loss ""#..& "/.'' #'./"
..

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