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A project report on ratio analysis at the gadag co operative textile mill ltd

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A project report on ratio analysis at the gadag co operative textile mill ltd

A project report on ratio analysis at the gadag co operative textile mill ltd

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  • 1. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD EXECUTIVE SUMMARY: Financial statements provide summarized view of the financial position and Operation of the company. Therefore, now a day it is necessary to all companies to know as well as to show the financial soundness i.e. position and operation of Company to their stakeholders. It is also necessary to company to know their financial position and operation of the company. In this report I made an effort to know the financial position of G.C.T.M HULKOTI.The Financial analysis of this report will show the Strength and weakness of theG.C.T.M. Financial analysis will help the firm to take decision.Thus, we can say that, Financial Analysis is a starting point for making plans before usingany forecasting and planning methods. “The Study of Financial Performance Based Onthe Ratio Analysis at G.C.T.M Babasabpatilfreepptmba.com 1
  • 2. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD GADAG CO-OPERATIVE TEXTILE MILLS LTD. HULKOTI. INTRODUCTIONThe textile industry holds significant status in the India. Textile industry provides one ofthe most fundamental necessities of the people. It is an independent industry, from thebasic requirement of raw materials to the final products, with huge value-addition at everystage of processing.Today textile sector accounts for nearly 14% of the total industrial output. Indian fabric isin demand with its ethnic, earthly colored and many textures. The textile sector accountsabout 30% in the total export. This conveys that it holds potential if one is ready toinnovate.The textile industry is the largest industry in terms of employment economy, expected togenerate 12 million new jobs by 2010. It generates massive potential for employment inthe sectors from agricultural to industrial. Employment opportunities are created whencotton is cultivated. It does not need any exclusive Government support even at present togo further. Only thing needed is to give some directions to organize people to get enoughshare of the profit to spearhead development. Textile Co-operative industry is being an important traditional cottageindustry plays a vital role in meeting the clothing requirements of the people. Thehandloom industry is meeting nearly 1/3 of clothing requirements of the countriespopulation .the government of India assign to the handloom sector the task of increase inthe production year by year.Textile industry is constituted of the following segments Babasabpatilfreepptmba.com 2
  • 3. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD• Readymade Garments• Cotton Textiles including Handlooms (Mill made / Power loom/ Handloom)• Man-made Textiles• Silk Textiles• Woolen Textiles• Handicrafts including Carpets• Coir• JuteThe company Objectives are To satisfy customers by integrating their needs in the mill yarn. To sustain a mill of able and committed employees and provide opportunities forgrowth and development. To improve the process of managing mill affairs through proper planning, timelyimprovement of plan and performance review. To faster culture innovation with the application of new ideas and methods to solve thebusiness problems. To provide the employment opportunities to Men& women of rural areaAncient time: Handloom is the oldest known form of making cloth by hand. The history of thetextile industry is decentralized sector as the cottage industries dates back to the epicages. In the Rig-Veda the needle used for the purpose sewing is called as “SOOCHI”&ARIVESHI the scissors “BHURIJi” , the wrap would “MAYUKH”the shuttle”VEMA”and the weaver “VAYITRI” , “VAMA & SIRI”. A mantra in the rigveda states that itshould wear the cloth woven by women at marriage occasion. As per Atharvanaveda thebridegroom should wear on the first night garments woven only by his newly wed wife.In maharastra, the garment filled with pearls is called as “MANICHEERU; . the Buddhist,pali and taina literatures to emphasis India’s artistic weaving.COMPANY PROFILEName of the company : Gadag Co-operative Textile Mill Ltd., Hulkoti. Babasabpatilfreepptmba.com 3
  • 4. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDYear of establishment : 1972Status :This co-operative society registered under the co-. operatives Societies act of 1959Location : Karnataka state, Gadag dist, Hulkoti.Chairman : Shri D.R.Patil Ex MLA, Gadag.Area of operation : Haveri, Gadag & Dharwad.Export places : New Delhi,Vietnam etc.Nature of business : Production & sale of yarn.Membership : 3021 co-operative societiesShare capital : 817.71 LakhsNo.of Departments 8 departments.No. of employees : 650No. of board of directors : elected members -18,Ex-office members-1,Nominated by Govt-3Storage capacity : 7500 million ton Background of the company Babasabpatilfreepptmba.com 4
  • 5. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDThe village Hulkoti has a population of 10000 comprising of various section of peopleand since long it has been the cradle cooperative moment in having the first primarycredit cooperative society established in the east while Bombay state .The occupation ofthe village is mainly agriculture. The farmer and the farm laborers from a nucleus of thisrural area, the main crop grown around Hulkoti is Jawar,Cotton Groundnut ,Chilly andOther pulses. Since there are no major irrigation Projects, dry land cultivation, is the onlyway out for the farming community .Agricultural produce particularlycotton,groundnut,Jawar etc where being marked to the tune of Rs 90 To 100 crores perAnnum in and around Gadag.Prior to the emergence of the Gadag Co-operative Cottonsale society limited ,Gadag farming community was undesirably exploited by privatetenders and commission agents .It is at this juncture, releasing the need for upliftment ofmuch neglected farmers community and to better the lot of rural area ,Late ShriK.H.Patil,a son of soil and foreran Co-operator devoted fully for the establishment of co-operative network around Hulkoti providing various amenities and scope for developmentof farmers which went ahead against all odds both traditional and political,till hetransformed vision into a reality. This Endeavour had transformed into worthy institutionlocated on either side of karwar –Bellary road between Hulkoti and Gadag.The main Hubof production and Processing of agro industries is farmer and farming community .After successfully setting up of Ginning and Pressing unit by the Gadag Co-operativeCotton sale society, the next ambition of our Cooperators, was to establish a textile millof 25000 Spindles capacity which would consume the main agriculture produce by payingremunerative prices to cotton Growers and to save the farming community from theclothes of private tenders .It is with this ideal background .The Gadag Co- operative textile mill was established inthe year 1972 with a project cost of Rs 220 Lakhs and was commenced its trial productionin April 1973 .We have feather in the cap for having installed 25000 spindles capacitymill in a record time in the whole of IndiaMEMBERSHIP AND SHARE CAPITAL Babasabpatilfreepptmba.com 5
  • 6. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Being one the best-run Co-operative Mills in India, Having following membershipand paid up share capital structure as on 31st March 2006.SL. Category No. of Share Paid up ShareNo. Holders Capital1 "A" Class (Individual/Societies) 3019 Rs. 107.45 Lakhs2 "B" Class (K.A.I.C.) 1 Rs. 015.00 Lakhs3 "C" Class (State Govt) 1 Rs. 695.26 LakhsTotal 3021 Rs. 817.71 LakhsVISION , MISSION AND VALUES OF THE GADAG CO-OPRATIVE TEXTTILE MILL LTD .,HULKOTI VISIONTo be a premier textile company with a clear focus to become globally competitivethrough growth & technology up gradation committed to excellence in quality service&Co-operatives. MISSIONTo purchase the creation of values for all its customers, employees, members (shareholder) & society at large.COMPANY VALUES• commitment• a clarity• respect for the individuals• transparency• honesty• ethical conduct• co-operative focus• farmers oriented THE GADAG CO-OPERTIVE TEXTILE MILL LTD., HULKOTI Babasabpatilfreepptmba.com 6
  • 7. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD ORGANISATION CHART Share Holders Board of Directors Chairman Managing DirectorP&I Production Finance Administration Security Marketing Dy. Dy. Dy. Dy. Sr. Dy. Manager Manager Manager Manager Supervisor ManagerExtension Q.C. Accounts Assistants Jr. AssistantsOfficer Officer. Assistants Supervisors Helpers Assistants Helpers Helpers Helpers WorkerBoard Of Directors Babasabpatilfreepptmba.com 7
  • 8. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDShri D.R.Patil and H.M Soppin are chairman of the Gadag Co-Operative Textile Mill LtdHulkoti respectively and others following these prestigious persons are board of directorsof Gadag Co-Operative textile mill ltd, Hulkoti.Sl no Name Designation1 Shri D.R.Patil Chairman2 Shri H.M.Soppin Vice Chairman3 Shri R.M.Mulimani Director4 Shri V.B.Inamati Director5 Shri T.D.Mundavad Director6 Shri C.B.Karikatti Director7 Shri V.R.Naganur Director8 Shri S.B.Balareddy Director9 Shri S.B.Bhasetti Director10 Shri S.C.Kanavi Director11 Shri S.C.Huilgol Director12 Shri G.N.Patil Director13 Shri A.S.Patil Director14 Shri R.B.Hosamani Director15 Shri B.H.Dyavanshi Director16 Shri S.K.Kuradgi Director17 Shri D.S.Odugoudar Director18 Shri R.Y.Kempalingegoudar DirectorGeneral Manager Babasabpatilfreepptmba.com 8
  • 9. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDDistrict Industries Centre Gadag DirectorDeputy Director of Handlooms InvitersAnd TextileJoint Registrar of Co-Operative Societies DirectorShri T.Shantaveerappa (MD) DirectorInfrastructure Facilities Project CostLand and Building 33.71 LakhsPlant and Machinery 177.70 LakhsMiscellaneous 24.08 LakhsContingency 6.00 LakhsWorking Capital Margin 22.00 LakhsFree Operative Expenses 15.00 LakhsTotal 278.49 LakhsFuture Growth and Prospectus The Co-operative textile mill challenge to the society they have the capacity ofincreasing the quality and quantity of their products. The Co-Operative textile mill needs good specialized types of machines andmodernization of machines. It challenges to the competed for market shares. The Government has also helpedthe mill by giving the financial assistance to improve the industry Production Department Babasabpatilfreepptmba.com 9
  • 10. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDProduction is a main function of company raw material into final products The Gadag co-operative mill is going to receive the ginned cotton (Cotton fibresare separated from the seeds) from the above mentioned suppliers. Before going toproduction of yarn classified the cotton on the basis of staple length of cotton,fibre anddecides what count can be spun out of the cotton received. There are number of variety of yarn which are 10s,16s(Short staple)18s,20s,40s,(medium staple) 50s,60s,62s,(long staple)and 60s,80s,100s,(super staple).OBJECTIVES 1) To produce quality production. 2) Reduction in waste of raw materials. 3) To maintain the production capacity of the machine. PRODUCTION PROCESSMIXING: The is going to mix up the different variety of cotton and made a homogeneousmixing and makes it a particular count. This process is called mixing.BLOWROOM: The second step is called cleaning. The kappa’s is going to cleanedbecause it contains leaf stir, sand mud and impurities. This process done through theBlow Room machine.CARDING: After this process takes place in which fiber is made parallel and hooks areformed in the carding are straightened.RING FRAME: the next is simplex in this process final twist is inserted and wound onthe bobbin (tubes) this is also called as Ring Frame.REELING: after this simplex, Ring Frame takes places in this process next step is goingto classifying on the basis of Reeling,. Babasabpatilfreepptmba.com 10
  • 11. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDCOMPETITORS TO G.C.T.M Modern days are the two days of the competition. Where you go, in which everfield you enter there is competition; one must know how competition in the market makesit absolutely necessary for manufacturers to think of advertising. For new product,strategies and by doing all these to in areas the sales.These following companies are the competitors of the G.C.T.M. 1) Banahatti Co-operative Spinning Mill Ltd. 2) Sangola Co-operative Spinning Mill Ltd. 3) Farmers Co-operative Spinning Mill Ltd. The C.G.T.M. face major competition from the above 3 competitors and it also face the competition from which those companies have national presence. But, our G.C.T.M. has been facing the competition through maintaining good quality off cotton yarn and also reasonable price, prompt service, advertisements, and also through maintaining good relation with the suppliers, consumers with society. Infrastructural Facilities: A good sophisticated building is there for the mill for working and transportation facility also provided for the workers i.e ,2 buses are roaming from the mill to a city.Good canteen facility with the cheap price and play ground for the workers is there.and also a library facility is there for the workers. Awards : All India spinning mill productivity first to India in 1978 to 1981Infrastructure Facilities Project costLand and building 33.71 LakhsPlant and machinery 177.70 Lakhs Babasabpatilfreepptmba.com 11
  • 12. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDMiscellaneous 24.08 LakhsContingency 6.00 LakhsWorking capital marginFree operative expenses 22.00 Lakhs 15.00 LakhsTotal 278.49Our Mill has another distinction of having established with a project cost of Rs 278.49Lakhs, which was, met out in the following manner.Means of FinanceMembers of share capital 40.00 LakhsGovernment share capital 80.00 LakhsTeam loan 100.00 LakhsTotal 220.00 LakhsADMINISTRATION DEPARTMENT Administrative department play very important role in the organization for fitssmooth running of the business and success of this company is mainly depending on theefficient administration of the G.C.T.M. This department looks after administrative functions such as payment of salaries,arrangement of meetings, and formation of policies etc, the general functions of thisdepartment are as follows.  Maintenance of files, records etc. up to date, collecting and presenting data in the form of useful information from the records.  Implementing the organization systems, procedures and policies in a coordinated manner. Babasabpatilfreepptmba.com 12
  • 13. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD  Ensuring smooth running of the office buy interfacing with the eternal agencies as required. For ex-payment of telephone bills, electricity, water supply bills etc.  Maintenance of the office premises.  Providing required facilities. SHIFT INCHARGE:  He is the person who works under the production manager.  He assists which are done in shift GCTM has three shifts Viz 8 a.m. to 4 p.m. to 12 p.m. to 8 a. m. SECTION SUPERVISOR:  He is the person who supervises the works done in the section he is the key.HUMAN RESOURCE DEPARTMENT This department looks after the recruitment, selection and welfare of the employees. It also conduct and orientation programmes. Facilities given to employees are as follows.  Transportation  Medical  Canteen  Uniform  Provident fund  Gratuity Babasabpatilfreepptmba.com 13
  • 14. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD  Womens pregnancy allowance.LABOUR WELFARE :Our mills has provided a gainful employment to 350 regular employees and about 200trainees of 3 shifts basis. The employees are given Bonus up to 20% & residentialaccommodation on nominal rent. Besides the employees are given confessional transportfacilities from Gadag to Hulkoti. They are also members of the employee’s credit Co-operative society for getting loans.Functions of HRD Department :  Job design a. Job rotation b. Job enrichment  Job analysis a. Job description b. Job enrichment  Human resources planning  Recruitment resources planning  Recruitment and selection  Placement and induction  Performance appraisal  Training and developmentCLASSIFICATION OF THE WORK FORCEWork force of the society shall be classified as under : 1) Permanent 2) Badli Babasabpatilfreepptmba.com 14
  • 15. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD 3) Trainee or apprentice RECRUITMENT PLANNING Maintaining an organization culture of outpace elements like mutual trust, human values, openness etc, requires a proper recruitment plan on the part of the human resources manager. Hence, recruitment plan is an important component of the human resource plan. It is recruitment which enables an organization to provide a substantially large pool of potential candidates for each join, so that adequate talents would be available for the organization on to select whenever needs arise.OBJECTIVES OF THE H.R.D. DEPARTMENTS• To maintain high morale among the workers.• To motivate the employees to contribute their maximum to the organizational goal.• Creating the employment opportunity to the society.• To take welfare care of labors. RECRUITMENT PROCEDURE: Interview panel of G.C.T.M. consist of 4 members who will responsible for selection of worker or employees. The interview panel will be same for every time. In case of lower level management direct recruitment is preferred. In case of top level management such as Accountants, Engineering, Managers etc. They need B.Com, B.E., M.B.A., M.Com, Etc., In case of production level G.C.T.M. will prefer diploma in electrical or diploma in mechanism or any Graduate who will be suitable for job.WORKING HOURS OF THE EMPLOYEES TIME SHIFTS Babasabpatilfreepptmba.com 15
  • 16. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD* 8.30am to 4.30pm 1ST Shift* 4.30pm to 12.30am 2nd Shift* 12.30pm to 8.30am 3rd Shift Half an hour break is there between the working hours in each shift.HOUR OF WORK The hour of work for all employees shall be fixedFINANCE DEPARTMENTOBJECTIVES OF FINANCE MANAGEMENT• To have permanent record of all the transaction for future reference.• To know the result of business in terms of profit and loss.• To know the financial position of the business.• To know the progress of the business from year to year. FUNCTIONS OF FINANCE DEPARTMENT• To prepare a Trading & P&L account.• To prepare Balance sheet.• Maintenance of accounts is undertaken• Rate fixing.• Suppliers bill paying.• Maintenance of cash and bank balance. ACCOUNTING SYSTEM Gadag Co-operative Textile Mill Ltd Finance, Every company needs carry on itsbusiness operations and to achieve its targets and finance is the lifeblood of the business.It is the foundation of every economic activities needs. A business requires finance atevery stage. Finance is needed for bringing a business in no existence. It is required for Babasabpatilfreepptmba.com 16
  • 17. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDfinancing. The fixed capital is used for expansion and modernization of business and alsofor financing the working capital. The management of finance is necessary for very organization and financialmanagement is managerial and activities or effort which is concerned with theascertainment of finance and it is that aspect of management which is responsible for theacquisition of funds and their allocation. This management of finance is locked after by the finance and prepares theaccounts. It has to plan for funds acquisition, funds allocation and acceptable levels ofrevenue generation. If surplus are generated then there funds have to be properly utilizedso that they produce the maximum returns with safely, at the same time available forbusiness purposes at the shortest notice. There are mainly 2 types of financialrequirement: 1) Long Term – Acquisition fixed assets 2) Short Tem – Working capital needsFor both these requirements funds can be found the senior manager of finance andexecutive maintain key role in accessing the financial transaction.PURCHASE DEPARTMENT The Cotton Purchase policy of the mill is designed in a way so as to provide anincentive price to the Cotton Growers. The Mill purchases its cotton at the open auctionheld by Co-operatives namely The Gadag Co-op. Cotton Sale Society. T.A.P.C.S.M.Society of Annigeri. Cotton brought in these Societies is graded by the A.P.M.C.Agricultural authority. Around 3000 Grower members and also 10200 other cottonGrower derive a significant economic benefits from our mills. Babasabpatilfreepptmba.com 17
  • 18. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDObjectives: • Experiment of cotton and yarn • Observing the cotton and yarn • Minimize the purchase cost • Transportation (minimizing the transportation cost).Suppliers:  CCI cotton co operation of India  Maharastra cooperative federation  Shanty textile Mumbai  Baradia cotton cooperative Mumbai  Pm kolhar Gokak  CCI Auraghabad.Local suppliers: S.T chuavan Gadag.Purchase committee:It includes 1) Managing director 2) General manager 3) Production manager 4) Quality controller 5) Cost department headECONOMIC BENEFITS TO MEMBERS:  The rates offered for cotton by our Mill in the Tenders at the Marketing Societies are generally higher than the rates available to the farmers at Tenders carried out at the premises of Private Commission Agent.  A price incentive of Rs. 100 to Rs. 150 per quintal over the market rates are given to every member linked to the Share value of Rs. 100 each. Babasabpatilfreepptmba.com 18
  • 19. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD  Members cotton is ginned and converted into yarn on behalf of them and after deduction of conversion cots; the profits are passed on to members concerned. Form 1982-83 onwards members availing of such scheme got up to Rs. 150 per quintal after sale of yarn.  Extension advice to improve cotton production is given by Agricultural Science Foundation established by the Mill. Our mill has been arranging Workshops/Seminars by inviting Agricultural experts for the benefits of Farming Community of this area. Thus, we have taken care of cotton development in particular and AgriculturalDevelopment of this area, in general. STORES DEPARTMENT Stores Department is one which stores all the materials, equipments and spare parts etc. Which are needed in the signalization for its smooth running . Objectives of the Stores Department: 1) Concentrating towards smooth running of the production process. 2) Facilitating all required equipments on time . 3) Reduction of Inventory equipments on time . 4) Working like a traffic signal to signalize to all equipments. 5) Proper maintenance of all equipments. This Stores Department is divided in to two sub departments they are: a) Materials stores b) General Stores. a) Material Stores: It is a sub department of the stores , which maintain the stock of raw material needed in the plant i.e. cotton , paper cones , bags . This department mainly concerned with storage of 30 days stock of raw material in the plant. b) General Stores: It is also a sub department of the stores which maintaining the stock of general material like ,paper ,files ,uniforms of workers ,shoes ,goggles, Babasabpatilfreepptmba.com 19
  • 20. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD helmets, glows, cups, spare parts of machines , stationeries and other lubricants and packing materials. These all materials are stored under bin system. In this department each material or item will be assigned a number to it which is called as Bin number. There are about 11,000 items are maintained in this department and all have been assigned in No’s. Bin number is a 9 digit number, which will help in recognizing the item very quickly and accurately. The first three numbers in Bin card will giving the information about which section . and the second 3 digit will gives information about which equipment and the last 3 digit will gives information of which item it is. The stores department is maintaining mainly two ledgers , they are: 1) Material Receipts Ledger. 2) Material Issued Ledger. At he time of each entry in the ledger they are quoting the date, item number quantityprice / piece, total priceVarieties of bags Varieties suppliers0-1 socks Mpower belting & elestomus BangaloreP-P Jute Shah cooperation Ahemdabad.Polithin bag New pack industry Belgaum.0-1 In the form of packENGINEERING AND MAINTENANCE DEPARTMENT The department maintains stock of important spare parts of the machinery andlooks after the accuracy of the machinery. Well qualified engineers are always ready torepair the defects in the machineriesFUNCTIONS  To look after the proper working of the machines. Babasabpatilfreepptmba.com 20
  • 21. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD  To take immediate measures in case of any defect in the machines.To keep the stock of the machines MARKETING DEPARTMENT The Mill manufactures 10s, 14s 20s, 30s, 34s, 40s, 60s, 80s, 100s, 2/20s, 2/40s,2/60s, etc., in the form of Hanks as well as Cones as per the prevailing market demand.Sale of hank yarn and cone forms 40:60 respectively. We have been fulfilling the HankYarn obligated stipulated by the Textile Commissioner, Government of India at the end ofevery quarter. The daily production of yarn is about 8,500 kgs. And Mills is workinground the clock for all the seven days of the week. Special preference is selling yarn isgiven to Weavers Co-operative Apex Organizations and Karnataka HandloomDevelopment Corporation. Export of yarn has been our priority Yarn is being exported tocountries like Vietnam, South Korea, China and couple of European Countries. In last Sixyears, we have exported yarn worth Rs. 676.00 Lakhs. We are happy to inform that, wehave fulfilled Export obligation as stipulated by the D.G.F.T., New-Delhi.Sales will have mainly in 3 types  Direct Sale  Consignment Sale  Through Depot SaleSales Places: 1) National Handloom Development Corporation Babasabpatilfreepptmba.com 21
  • 22. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD 2) Karnataka Hand look Development Corporation 3) Depot a. Coimbatore b. Solhapur c. Ieachalkaranji d. MalegaonPACKAGING OF YARN It is a process of converting to a product for protection hanks yarn are packing inthe bale form cones yarn are packing form. The standard of bale is consists of 181.6 kgs. Mode of Sales : In this organization orders are normally done through: 1) By phone 2) By their own sales depots and 3) By local sales agents.RESPONSIBILITIES OF MARKETING MANAGER• Billing• Collection of amount• Ordering•PROBLEMS• Electricity• Labor QUALITY CONTROL DEPARTMENT Babasabpatilfreepptmba.com 22
  • 23. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD The main objective of the quality control department is to check the quality of the cotton and the cotton yarn I the firm. The step by step tests are conducted by the officers to meet this requirement. If any product does not pass through the quality standards than that is rejected. Even before dispatching the products they undergo testing and they must be approved by the quality department.THE STEPS OF TESTING • Raw material testing I.e. cotton testing. • Testing at first stage i.e. blow room stage. • Testing at the carding level. • Testing the yarn at processing level. • Testing at the final stage.OBJECTIVES • Increasing customer satisfaction. • Quick response to order fulfillment. • Producing the quality products.COMPETITORS Mill has competition with many competitors like • Banahatti Co-operative spinning mill • Mandya etc. Babasabpatilfreepptmba.com 23
  • 24. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDTHE TOTAL WORKERS OF G.C.T.M * The strength of skilled workers 350 * The strength of unskilled workers 300 Total workers 650Waste elimination Row materials 20 count, 100 kg row materials (cotton) in the 100 kg of rowmaterials 85 kg is pure 15 kg is waste row materials. Waste of 15 kg as under: Blow Room 6 kg Carding 5 kg Preparatory 2 kg Hard waste 1.5 kg Roving/silver 1 kg 15 kgInventory control system This is also followed daily and it is also computerized. Purchase: Variety wise row materials opening stock Add: purchase xxx Total xxx Less: Issued for consumption xxx Closing stock xxxSales: Babasabpatilfreepptmba.com 24
  • 25. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Variety wise finished goods Add: Production xxx Total xxx Less: Sold xxx Closing stock xxxquality control of cotton yarn production bears distinct advantage for all whetherproducers or consumers, some of the important advantages to quality control one asfollows. IMPORTANCE OF THE QUALITY CONTROL  The brand products build up goodwill or image, which ultimately increase sales of G.C.T.M. yarn  It helps the manufacturers in fixing responsibility of workers in the production process.  Quality control also helps in minimizing the costs by increasing efficiency, standardization, working conditions at the G.C.T.M.  It also help or enables the G.C.T.M. to know the cost of their product quite in advance which helps them in determining competitive prices of their product.  Last but not the least; the G.C.T.M. can confirm whether the yarn manufactured by them is in accordance with standard set by the government. It further facilities the G.C.T.M. to take necessary actions to comply with the standard set.Order of execution A committee consisting of seven directors and chairman / managing directors willmeet every Saturday in the meeting after completion and after formalities committee willpurchase the Raw materials (cotton) and sell the finished goods (yarn) the officials willexecute the decisions made in the committee meeting and act accordingly. Babasabpatilfreepptmba.com 25
  • 26. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDSTAFF Classification of staff and Duties and Responsibilities of various groups of staff. 1) Administrative staff 2) Technical and factory staff1) Administrative staff Chairman The chairman of the Mill shall have an over all control over the day to daymanagement of the Mill. He shall preside over the meetings of the Board of Directors andthe General Body. The chairman of the Mill shall have general control over the affairs ofthe Mill. He shall exercise such of the powers of the Board as may be delegated to himform time to time.Managing DirectorThere shall be a Managing Director appointed by the Board of Directors. He shall be aprofessionally qualified experienced man in the textile industry. He shall be the ChiefExecutive Officer of the Mill. He shall be an Ex-officio, Member of the Board ofDirectors. He shall be responsible for the Executive Administration of the Mill subject tothe control of the Board and chairmanSecretary There shall be a Secretary to assist the Managing Director in the day - to – dayworking of the society who shall have such powers as delegated by the board from time totime. Babasabpatilfreepptmba.com 26
  • 27. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD To keep or cause to keep all accounts and registers required by the rules, toprepare all the vouchers, Balance Sheet and other documents required for the transactionsof the Mill in, Administrative section.purchaser He is the most important Administrative staff in the company. He purchases rowmaterials for production of finished goods.Seller He is also one of the staff in the company. By the name itself he sells finishedgoods effectively and efficiently.2) Technical & Factory staffGeneral Manager General Manager overall production performance of the Mill mainly machineutilization, productivity in each department men engage, power control, maintenance etc.Deputy Spinning Master There are two Deputy Spinning Master in the Mill. One should look up toSpinning point and another Deputy Spinning Master look past spinning. Babasabpatilfreepptmba.com 27
  • 28. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDAssistance Spinning Master There are two Assistance Spinning Master in the Mill. They are shift in chargers.There are three shifts First shift from 8.30 am to 4.30 pm. Second shift from 4.30 pm to12.30 am. Third shift from 12.30 am to 8.30 am.Supervisors Supervisor is one of the technical staff in the Mill. He takes every work fromevery section.SWOT ANALYSISStrength WeaknessOpportunities ThreatsSTRENGTHS:1) Nearest to the raw materials source: Availability of the row material to the G.C.T.M. is very near, it is in such way thatis, the purchase cotton from around 3000 grower members of G.C.T.M. and the millpurchases its cotton at the open auction held by co-operatives namely The Gadag Co- Babasabpatilfreepptmba.com 28
  • 29. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDoperative cotton sale society, T.A.P.C.S.M. society of Annigeri and in Gadag A.P.M.C.this is result in less transport cost.2) Less transport cost: G.C.T.M. purchases row materials around the Gadag area, so carrying cost of the rowmaterial is very less.3) Goodwill: Around Gadag area there are less industries, and it has provided largeemployment opportunities to people. So it has good will in south Karnataka.4) Satisfaction of consumer needs: G.C.T.M. has been satisfying the consumer needs.5) Highly quality: And also G.C.T.M. maintains high quality of cotton yarn.1) Availability of cheap labor:WEAKNESS:1) National presence is not there: In international market G.C.T.M. has been demand for its product, so it has lessnational presence.2) Heavy excise duty: Government has fix up heavy excise duty on cotton yarn export of G.C.T.M.3) Less working capital: Babasabpatilfreepptmba.com 29
  • 30. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD The main weakness of G.C.T.M. is the less working capital for its day to dayactivities.4) Electricity problem: G.C.T.M. also facing the electricity problem. So it is also one of the barriers tocontinuous production.OPPORTUNITIES:1) Grab market in south Karnataka: G.C.T.M. has it maximum share in south Karnataka2) Increase in production capacity: Due to the installation of new technology, new machines, production capacity of the G.C.T.M. has been increasing .3) Increasing demand for yarn: Step by step demand for yarn and yarn products have been increasing.4) Bank finance: G.C.T.M. takes its financial assistance from K.C.C. Bank, N.C.D.C. Bank,. Bijapur, D.C.C. Bank5) Employment Oriented: G.C.T.M. is the employment oriented unitTHREATS:1) Danger from the strong competitors: Danger from the strong competitors who are having national presence and spend alot on promotion activities.2) Danger of loosing international market: It is because of other strong competition from the other standard companies who arehaving a national presence.3) Heavy excise duty: Babasabpatilfreepptmba.com 30
  • 31. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDG.C.T.M. is in loss. So excise duty on its sales and export is the major threat forG.C.T.M.Research MethodologyMethodology:  The methodology includes the personal interaction with the finance manager.  Selection of data: From the Annual Reports of the Company for last three years; i.e. from Annual Report for the year 2005-06 Annual Report for the year 2006-07 Annual Report for the year 2007-08  Period: The Study covers a period of three years data from 2005 -06, 2006-07.and 2007-08 to mean an Accounting year of the company consisting of 365 working days.  Frame work Analysis for the purpose of analyzing the Liquidity Position of the company. The study make use of various accounting Ratios INTRODUCTION When we observed the financial statements comprising the balance sheet andprofit or loss account is that they do not give all the information related to financialoperations of a firm, they can provide some extremely useful information to the extentthat the balance sheet shows the financial position on a particular date in terms ofstructure of assets, liabilities and owners equity and profit or loss account shows theresults of operation during the year. Thus the financial statements will provide asummarized view of the firm. There fore in order to learnt about the firm the carefulexamination of in valuable reports and statements through financial analysis or ratios isrequired.Meaning and Definition:- Babasabpatilfreepptmba.com 31
  • 32. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Ratio analysis is one of the powerful technique which is widely used forinterpreting financial statements. This technique serves as a tool for assessing thefinancial soundness of the business. The idea of ratio analysis was introduced byAlexander Wall for the first time in 1919. Ratios are quantitative relationship betweentwo or more variables taken from financial statements. Ratio analysis is defined as. "The systematic use of ratio to interpret the financialstatement so that the strength and weakness of the firm as well as its historicalperformance and current financial condition can be determined.In the financial statements we can find many items are co-related with each other Forexample current assets and current liabilities, capital and long term debt, gross profit andnet profit purchase and sales etc.Whole taking managerial decision the ratio of such items reveals the soundness offinancial position. Such information will be useful for creditors, shareholders,management and all other people who deal with company. Babasabpatilfreepptmba.com 32
  • 33. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDImportance. As a tool of financial management ratio are of crucial significance. Theimportance of ratio analysis lies in the fact that it presents facts on a comparativebasis and enables the drawing inferences regarding the performance of a firm. Ratioanalysis is relevant in assessing the performance of a firm in respect of thefollowing aspects: (i) liquidity position, (ii) long-term solvency. (Hi) operatingefficiency, (iv) overall profitability, (v) inter-firm comparison, and (vi) trendanalysis. Liquidity Position With the help of ratio analysis conclusions can be drawnregarding the liquidity position of a firm. The liquidity position of a firm would besatisfactory if it is able to meet its current obligations when they become due. Afirm can be said to have the ability to meet its short-term liabilities if it hassufficient liquid funds to pay the interest on its short-maturing debt usually within ayear as well as to repay the principal. This ability is reflected in the liquidity ratiosof a firm. The liquidity ratios are particularly useful in credit analysis by banks andother suppliers of short-term loans.As ratios provide a benchmark for company’s against their own performance inindustry. The company wants to study the ratio’s and compare its performance ofpast with the present performance with the help of ratio analysis, various items offinancial statement that ensure their existence as well as their future progressResearch Problem: Babasabpatilfreepptmba.com 33
  • 34. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD To know the Financial Position of the company and its LiquidityPerformance through comparing three years financial performance by applyingdifferent financial Ratios.Purpose of the study:  As it is very difficult to decide any inference from the mass of figures included in financial statements. So in order to judge accurately the financial health of the firm, it is generally regroup and analyze the figures as disclosed by these financial statement.  The use of Ratio Analysis or Accounting Ratios enables conclusions to be drawn from the figures as to know the earning capacity, operational efficiency, and financial condition etc. of a concern.  The study includes the calculation of different financial ratios. It compares three years financial statements of the company to know its performance in these different years.  To know whether the company is growing or incurring losses or it is stagnant in its performance.Objectives of the study: Babasabpatilfreepptmba.com 34
  • 35. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD 1. Main Objective is to study the different ratios used in Gadag co operative textile mill 2. To know the mills financial performance based on ratios. 3. To find out the companies efficiency based on past and present profitability ratios 4. To study the liquidity position of the company. To improve its future performance by analyzing its financial statementsDATA COLLECTION METHOD: 1. PRIMARY DATA: The information is collected from the personal interaction with the financial managers of Gadag co-operative textile 2. SECOUNDARY DATA: This is been is collected through mills ANNUAL REPORTS, & WEBSITES.MEASUREMENT TECHNIQUE / STATISTICAL TOOLS: • Accounting Ratios. Babasabpatilfreepptmba.com 35
  • 36. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD • Financial statements of the company.ANALYTICAL TECHNIQUE: Statistical technique used for calculation of ratios is in terms ofpercentage.LIMITATION OF THE STUDY:  The study is done only on the Balance sheet and profit and Loss A/c  Study is based on information provided by the company.  The limitation of ratio analysis is itself a limitation in achievement the set objective.Meaning and Definition Ratio analysis is one of the powerful techniques which are widelyused for interpreting financial statements. This technique serves as a tool forassessing the financial soundness of the business. it can be used to compare the riskand return relationship of firms of different sizes. The term ratio refers to thenumerical or quantitative relationship between two items/ variables. The idea of ratio analysis was introduced by Alexander Wall for thefirst time in 1919. Ratios are quantitative relationship between two or morevariables taken from financial statements. Ratio analysis is defined as, “the systemic use of ratio to interpret thefinancial statement so that the strength and weakness of the firm a well as itshistorical performance and current financial condition can be determined. Babasabpatilfreepptmba.com 36
  • 37. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD In the financial statement we can find many items are co-related witheach other for example current assets and current liabilities, capital and long termdebt, gross profit and net profit purchase and sales etcImportance of the ratio analysis As a tool of financial management, ratios are of crucial significance. The importance of the ratio analysis lies in the fact that it presents facts on a comparative basis and enables the drawing of inference regarding the performance of a firm. The ratios which i studied about are Liquidity ratio 1.Current ratio 2.Quick ratio 3.Inventory/Stock turn over ratio 4.Gross profit ratio 5.Net profit ratio 6.Working capital turnover ratio 7.Debtors turnover ratio 8.Debt collection periodLiquidity Ratio: The importance of adequate liquidity in the sense of the ability of afirm to meet current /short –term obligations when they become due for paymentcan hardly be overstressed. The liquidity ratios measure the ability of the firm tomeet its short-term obligations and reflect and the short-term financialstrength/solvency of a firm. Babasabpatilfreepptmba.com 37
  • 38. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDCurrent Ratio: The current ratio is the ratio of current assets to the currentliabilities .It is calculated by dividing current assets by current liabilities. The current ratio of total current assets to total current liabilities. Current Ratio = Current Assets / Current Liabilities Year Current assets Current Liabilities Ratio 2004-2005 117291902 72046325 1.62 2005-2006 119869315 68946971 1.73 2006-2007 138949815 77335112 1.79 2007-2008 138554890 69425372 1.99 2008-2009 126873621 72678933 1.74 Babasabpatilfreepptmba.com 38
  • 39. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD CURRENT RATIO 2.5 2 2004-2005 1.5 2005-2006 2006-2007 1 2007-2008 0.5 2008-2009 0 YearInterpretation: The working capital of G.C.T.M is good. Because current assets are doubledcompared to the current liabilities. And the ratio called to be standard. .Quick ratio: Babasabpatilfreepptmba.com 39
  • 40. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD It is a measure of liquidity calculated dividing current assets minusinventory And prepaid expenses by current liabilities. Quick ratio= Quick assets Quick liabilitiesYear Quick assets Quick liabilities Ratio 2004-2005 64343512 59498988 1.08 2005-2006 66826151 68946971 0.96 2006-2007 76593359 77335112 0.99 2007-2008 80483135 69425372 1.16 2008-2009 80584499 72678933 1.11 Babasabpatilfreepptmba.com 40
  • 41. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Quick ratio 1.4 1.2 2004-2005 1 2005-2006 0.8 2006-2007 0.6 2007-2008 0.4 2008-2009 0.2 0 YearInterpretation: The quick ratio of 1:1 is satisfactory. The company is having goodLiquidity. That is in the years of 2004-2005,2007-2008,2008-2009 I,e1.08,1.16,1.11 respectively. Babasabpatilfreepptmba.com 41
  • 42. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDInventory/Stock turn over ratio: The ratio indicates how fast inventory is sold. A high ratio is good from theviewpoint of liquidity and vice versa..The cost of the goods sold can also be computed as net sales less gross profit.The average inventory is computed as the simple average of the opening stock andclosing stock of the inventory. This ratio indicates number of times inventory isreplaced during the year. In case of seasonal industries, the average can becomputed by taking simple average for opening stock of a month for a year, whichwill smoothen out fluctuating in the inventory. In some cases if the data is noteasily available, then this ratio can be calculated by dividing the net sales byclosing inventory.Formula: Inventory turnover ratio= cost of goods sold/average stock Cost of goods sold = op.stock + pur + direct exps – cl. Stock Average stock= op.stock +cl.stock/2Year Cost of goods sold Average stock Ratio 2004-2005 267396134 46596794.5 0.57 2005-2006 215622553 46438443.5 4.64 2006-2007 227364007 51082152 4.45 2007-2008 263436840 53337453.5 4.93 2008-2009 252689320 44985614.5 5.62 . Babasabpatilfreepptmba.com 42
  • 43. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD INVENTORY TURNOVER RATIO 6 5 2004-2005 4 2005-2006 3 2006-2007 2 2007-2008 2008-2009 1 0 YearInterpretation: The inventory turnover ratio of the company is satisfactory becausethe ratio is go on increasing year by year from 2004-2005 to 2008-2009 Babasabpatilfreepptmba.com 43
  • 44. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDGross profit ratio: It is ratio of Gross profit to net sales expressed as percentage. It shows therelationship between gross profit and sales.Gross profit/ sales*100Year G/P Sales Ratio2004-2005 2536378 269932512 0.932005-2006 15767889 231390442 6.812006-2007 27291869 254655866 10.712007-2008 10816538 274253348 3.942008-2009 4049865 256739185 1.57 GROSS PROFIT RATIO 12 10 2004-2005 8 2005-2006 6 2006-2007 4 2007-2008 2008-2009 2 0 Year Babasabpatilfreepptmba.com 44
  • 45. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDInterpretation: The gross profit ratio increased year by year I.e. 0.93, 6.81,10.71 forthe financial years of 2004-2005,2005-2006,2006-2007NET PROFIT RATIO: It is ratio of Net profit to net sales expressed as percentage. It shows therelationship between Net profit and sales.Net profit/ sales*100Year Net Profit sales Ratio Babasabpatilfreepptmba.com 45
  • 46. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD2004-2005 -7733598 269932512 -2.862005-2006 -228728 231390442 -0.0982006-2007 7421223 254655866 2.912007-2008 4449324 274253348 1.622008-2009 -13165013 256739185 -5.12 NET PROFIT RATIO 4 2 2004-2005 0 2005-2006 Year 2006-2007 -2 2007-2008 -4 2008-2009 -6 Interpretation: By analyzing the company financial statements it is recovering losses in the year 2007-08 but it is not possible in the year 2009 Babasabpatilfreepptmba.com 46
  • 47. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD The above chart shows that the company is facing heavy loss in the year 2009.beacuase the reasons behind this is one is the previous year losses and also the expenses are increased year by year Working capital turnover ratio: It represents the excess of current assets over current liabilities. It is a measure of liquidity calculated by subtracting current liabilities from current assets. : sales/net working capital Net working Year Sales capital Ratios2004-2005 264624507 45245577 5.842005-2006 228943400 50922344 4.492006-2007 250490529 61614703 4.062007-2008 262156033 69129518 0.372008-2009 242486231 54194688 4.47 Babasabpatilfreepptmba.com 47
  • 48. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD . WORKING CAPITAL TURNOVER RATIO 7.00 6.00 2004-2005 5.00 2005-2006 4.00 2006-2007 3.00 2007-2008 2.00 1.00 2008-2009 0.00 year Interpretation: Babasabpatilfreepptmba.com 48
  • 49. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD The ratio is increased in 1 st financial year i.e. in the year 2004-05 is at 5.84, and in the year 2005-06 is at 4.49. But in the year 2006-07 it decreases to 4.06.But it is quit normal and it is negligible. This ratio indicates that working capital has been effectively utilized. Debtor’s turnover ratio Debtors constitute an important constituent of current assets and therefore the quality of debtors to great extent determines that firm’s liquidityDebtors turnover = Sales /debtors Year credit sales average debtor Ratios 2004-2005 269932512 35371142 7.63 2005-2006 231390442 43475086 5.32 2006-2007 254655866 49449732 5.14 2007-2008 274253348 49515187.5 5.53 2008-2009 256739185 51356537 4.99 Babasabpatilfreepptmba.com 49
  • 50. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD DEBTORS TURNOVER RATIO 9.00 8.00 7.00 6.00 2004- 2005 2005- 2006 5.00 2006- 2007 4.00 2007- 2008 3.00 2008- 2009 2.00 1.00 0.00 yearInterpretation: The ratio increases in the year 2004-05 is at 7.63, which decreases to5.32, 5.14, in the year 2005-06, 2006-07. But in the year 2007-08 it decreases to5.53, 4.99.. It indicates that debts are being collected more promptly. Babasabpatilfreepptmba.com 50
  • 51. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Debt collection period This ratio indicates the extent to which the debts have been collected in time. It gives the average debt collection period. The higher is the turnover ratio and shorter is the average collection period the better is the trade credit management and the better is the liquidity of debtors, as short collection period and high turnover ratio imply prompt payment on the part of debtors. On the other hand, low turnover ratio and long collection period.Debtors Collection Period = No. of days __________ DTR Debtors turnoverYear DAYS ratio Ratio2004-2005 365 7.63 47.832005-2006 365 5.32 68.602006-2007 365 5.14 71.012007-2008 365 5.53 66.002008-2009 365 4.49 73.14 Babasabpatilfreepptmba.com 51
  • 52. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD DEBT COLLECTION PERIOD 80.00 70.00 2004-2005 60.00 50.00 2005-2006 40.00 2006-2007 30.00 2007-2008 20.00 2008-2009 10.00 0.00 year. Interpretation: The debt collection period is not satisfactory. The standard period of collecting debt is 30 days. Within 30 days the debt to be collected but the mill has taken more time. It affects all the current assets. Babasabpatilfreepptmba.com 52
  • 53. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD FINDINGS , SUGGESTIONS & CONCLUSIONFINDINGS:1) The debtor turnover ratio is good. It shows the collection of debtors is veryprompt.2) The current ratio of the company has been increased from 1.62 to 1.99, from the2004to 2008.3) The quick ratio has been increased by years i .e. 1.08, 1.11, 1 .16respectivelyfrom 2005, 2008& 2009 & last year it was constant i.e. 1. It shows that company’sliquidity position is good, so it is favorable to the company4) The inventory ratio indicates how fast inventory is sold .A high ratio is goodfrom the viewpoint of liquidity.5) The working capital ratio have increased in the financial year 2004-05 I.e. 5.84& decrease in the next 2 years.6) Net working capital is a measure of liquidity; inadequate working capital is thefirst sign of financial problems for a firm. Babasabpatilfreepptmba.com 53
  • 54. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD SUGGESTION. The firm should try to bring them more professionalism. From the study it isfound that there is lack of periodic review & analysis which is leading to inefficientutilization of resources & thus loss. Therefore it is suggested that the firm shouldconduct quarterly analysis. So that the problems can be amended in time. Babasabpatilfreepptmba.com 54
  • 55. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDConclusion Financing is the backbone of the progress of any company. A Ratio gives The clear picture of financial condition of the company. The areas which were assigned to me were all key areas of the finance Divisions which also include different departments & functions. . ANNEXURETHE GADAG COOP. TEXTILE MILL LTD.HULKOTI.TENTATIVE BALANCE SHEET AS ON 31.3.2009 Babasabpatilfreepptmba.com 55
  • 56. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTDLIABILITIES Rs ASSETS Rs Ps PsAUTHORISED SHARE 5,56,00,000.00 Cash in Hand 27,094.00CAPITAL 8,17,73,700.00 Cash at Bank 1,93,46,309.87Share capital 1,00,00,000.00 F.D.with Banks 2,75,077.54Rehabilitation Fund(BGK) 500.00 Investments 1,24,42,533.00Share Suspense 1,29,45,559.76 Deposits 40,52,950.00Reserve Fund 17,01,97,970.2 Sundry Debtors 5,10,03,132.190ther Funds 3 Loan to F C S M...Hulkoti 85,00,000.00Modernization Fund 10,00,000.00 Pre-University College 2,55,296.95Subsidy 20,35,400.00 Advances 48,58,427.87 Fixed Assets(Land) 1,23,187.00 Buildings 1,56,72,362.49 Equipments(Old) 15,77,875.91BORROWINGS(A and B) Equipments( Modernization) 77,40,422.00(A)K C C Bank Ltd, LOAN 2,62,50,000.00 Plant & Machinery 12,52,74,234.4(B)N C D C 3,68,00,000,00 Library(Books) 0Loan(Modernization) 40,20,383.00 Furniture’s & Fixtures 1,01,893.31Deposits 5,24,86,226.29 Rehabilitation Ac (BGK) 18,42,166.61Current Liabilities 12,27,535.00 Other Receivables 60,63,048.72Bonus Provision Payment 1,02,00,000,00 Vehicles 10,21,508.00Reserve for Bad & Doubtful 47,44,788.75 Closing Stock(stores& packing) 16,18,814.00Debts Stock as per Mfg Ac 71,03,034.54Other payables Stock as per TR Ac 1,59,36,750.00 Previous year’s loss 2,32,49,338.00 9,24,31,193.39 10,55,96,206.4 Loss April 08 to 4 1,31,65,013.05 March 2009 41,36,81,663.0 3 TOTAL 41,36,81,663.0 TOTAL 3 BIBILOGRAPHY FINANCIAL MANAGEMENT: M Y KHAN AND JAIN Babasabpatilfreepptmba.com 56
  • 57. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD FINANCIAL MANAGEMENT: I M PANDEY . Babasabpatilfreepptmba.com 57
  • 58. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Babasabpatilfreepptmba.com 58
  • 59. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD . Babasabpatilfreepptmba.com 59
  • 60. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Babasabpatilfreepptmba.com 60
  • 61. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD Babasabpatilfreepptmba.com 61
  • 62. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD BIBILOGRAPHY Financial management - M.Y. KHAN & P.K JAIN Financial management I.M.PANDEY 1) . . Babasabpatilfreepptmba.com 62
  • 63. A Study on RATIO ANALYSIS AT THE GADAG CO-OPERATIVE TEXTILE MILL LTD .. Babasabpatilfreepptmba.com 63
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