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Ratio analysis projct @ BEC DOMS

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Ratio analysis projct @ BEC DOMS

Ratio analysis projct @ BEC DOMS


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  • 1. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD PAGE NO.SL.NO CONTE NTS 1 PART – I EXECUTIVE SUMMARY PART – II 2 INDUSTRY PROFILE 3 PART – III INTRODUCTION OF COMPANY PART – IV 4 RESEARCH METHDOLOGY OBJECTIVES OF THE STUDY PART – V 6 WORKING CAPITAL MANAGEMENT PART – VI 7 DATA ANALYSIS AND INTERPRETATION PART – V II 8 FINDINGS SUGGESTIONS & CONCLUSIONS. A NNEX URE 9 FINANCIAL STATEMENT. BIBILOGROPHY. TABLE INDEXBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 1
  • 2. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 2
  • 3. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD INDUSTRIAL PROFILE ABOUT THE SUGAR INDUSTRY IN INDIA:- India has been known as the original home of sugar &sugar cane. Indian Mythology supports the above facts ass itcontains legends showing the origin of sugarcane India is thesecond largest producer of sugarcane next to BRAZIL. Presentlyabove 4 million Hectors land is under the sugarcane with anaverage yield of 70 tons per hectors. India is the largest singleproducer of the sugar including traditional trade Sugar sweeteners,Khandsari & gur equivalent to 26 million tonnes row value followedby Brazil in second place at 18.5 million tonnes. Even in respect ofwhite crystal sugar. India has ranked No.1 position in 7 out of last10 years HISTORY OF SUGAR INDUSTRY IN INDIA:- Traditional sweeteners gur &khandsary are consumed mostly by the rural population in India. Inthe early 1930’s nearly 2/3rd of sugarcanes production ofalternates sweeteners gur & khandsari. With better standard ofliving & higher incomes, the sweetener demand has shifted to whitesugar. Currently about 1/3rd sugarcane production is utilized bythe Gur & Khandsari sectors. Being in the small scale sector, thesetwo sectors are completely free form controls & taxes which areapplicable to sugar sector. The advent of the modern sugar processingindustry in India began 1930 with grant of tariff to the Indiansugar industry, The number of sugar mills increased from 30 inthe year 1930-31 to 135 in the year 1935-36 &the productionBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 3
  • 4. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDduring the same period in created form 1.20 lakh tonnes to 9.34lakh tonnes under the dynamic leadership of private sector. The area of planning for industrialdevelopment began in 1950-51 & Government laid down targets ofsugar production & consumption, licensed & installed capacity,Sugarcane production during each of Five year plan periods.NEED FOR THE STUDY The study has been conducted for gaining practical knowledge about Ratio analysis of Shri Halasidhnath Sahakari Sakhar Karkhana. Ltd. The study is undertaken as a part of the MBA curriculum from 1st July 2010 to 20th August 2010 in the form of summer in plant training for the fulfillment of the requirement of MBA degree. TITLE OF THE PROJECT“This project “A Study on ANALYSIS OF FINANCIAL PERFORMANCEON The BASIS OF FINANCIAL RATIO’S” of Halsidhanath SahakariSakhar Karkhana LtdOBJECTIVES:- To study the profitability of Halsidhanath Sahakari Sakhar Karkhana Ltd. Nipani. To study the liquidity position. To find activity turnoverBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 4
  • 5. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD To study operating efficiency of Halsidhanath Sahakari Sakhar Karkhana Ltd Nipani.SCOPE OF THE STUDY The scope of the study is identified after and during the study is conducted. The main scope of the study was to put into practical the theoretical aspect of the study into real life work experience. The study of Ratio analysis further the study is based on last 5 years Annual Reports Shri Halasidhnath Sahakari Sakhar Karkhana. Ltd.LIMITATIONS OF THE STUDY The analysis is limited to just five years of data study (from year 2005 to year 2009) for financial analysis. Limited interaction with the concerned heads due to their busy schedule.METHDOLOGYIn preparing of this project the information collected from thefollowing sources.Primary data:BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 5
  • 6. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDThe Primary data has been collected from Personal Interaction withFinance manager Mrs.S.M.Siragave and other staff members.Secondary data:The major source of data for this project was collected through Balance sheet of SSHSKL Profit and loss account of 5 year period from 2005-2009SAMPLING DESIGNSampling unit : Financial Statements.Sampling Size : Last five years financial statements.Tools Used: MS-Excel has been used to create a Charts andcalculation. Findings Gross profit and net profits are decreased during the period of study, which indicates that firm’s inefficient management in manufacturing and trading operations.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 6
  • 7. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Gross profit and net profits are increased during the period of 2004-05 which indicates that firm’s efficient management in manufacturing and trading operations. Liquidity ratio of the firm is not better liquidity position in over the five years. It shows that the firm had not sufficient liquid assets. The inventory of the firm in the first year has been sold very slow. And there is an increase in the movement of the inventories but it slightly decreased in the last year. This may be a sign not good to the firm. The fixed assets turnover ratio of the firm has in 2004-05 the ratio is 0.85 and it increase in the next 3years continuously and it again decrease in 2008-09. The current assets turnover ratio is increasing during the period of 2004-06 and again it decrease in the period of 2006-07. And again increase in next two year slithightlliy. Direct Material cost ratio of the firm is has less material cost during the period of 2004-05 & 2007-08 and it raised in the year of 2005-06 and 2008-09. The cost of direct labour of the firm in the year of 2004-05 is 4.94%and it increasing slithightlliy up to 2007-08 and it decrease in the next year.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 7
  • 8. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD The cost of manufacturing overhead of the firm in the year of 2004-05 is 5.22% where it compare to the next 3year it increase rapidly. SUGGESTIONS The profit Of the Company Is not in a good Position For That company has to Take Alternative Actions such As Increasing in Procurement in sugarcane , Production, and Control in Expenses Like, Administrative, selling Etc. The firms have low current ratio so it should increase its current ratio where it can meet its short term obligation smoothly. Liquidity ratio of the firm is not better liquidity position in over the five years. So I suggested that the firm maintain proper liquid funds like cash and bank balance. CONCLUSIONThis project of Ratio analysis in the production concern is notmerely a work of the project. But a brief knowledge and experienceof that how to analyze the financial performance of the firm. Thestudy undertaken has brought in to the light of the followingBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 8
  • 9. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDconclusions. According to this project I came to know that from theanalysis of financial statements it is clear that SHSSK Ltd. Havebeen incurring loss during the period of study. So the firm shouldfocus on getting of profits in the coming years by taking careinternal as well as external factors. And with regard to resources,the firm is take utilization of the assets properly. And also the firmhas a maintained low inventory. INTRODUCTION OF CONCEPTS India is developing country in which more than 70%population is dependent upon agriculture. In India Wheat, Cotton,Rice, Tobacco & Sugarcane are the some main crops. But the sugarcane is one of the important agricultural productions. And or byusing the sugar We produce sugar. Which is very important item ofdaily meals? Sugar is mainly used for tea, Coffee and so many foodproducts. It is also important raw material for bakery industry. TheSugar is produced by so many co-operative and also privatefactories. The first scheme of sugar factory in co-operative societyhas been introduced byMr.G.N. Sahastrabudhe & R.N. Hiremath in1912. But first Co-operative sugar factory started in 1918, by theLallubhai Samaldas & G. N. Sahastrabudhe in baramati. But due toLake Of sugar Cane the factory stopped its working in 1924. After that, in co-operative field, under the guidance ofVilnalirao patil, Dr Dhanjay Gudgil Tried to start secondco-operative sugar factory. He was started pravar -co-operativeSugar factory in 1950 at loni this factory got success in marketBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 9
  • 10. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDtherefore some other sugar Factories were going to start in Pune,after, the late 1970 there was a rapid increase in trend ofco-operative sugar factory. INDUSTRIAL PROFILE ABOUT THE SUGAR INDUSTRY IN INDIA:- India has been known as the original home of sugar &sugar cane.indian Mythology supports the above facts as itcontains legends showing the origin of sugarcane India is thesecond largest producer of sugarcane next to BRAZIL. Presentlyabove 4 million Hectors land is under the sugarcane with anaverage yield of 70 tonnes per hectors. India is the largest singleproducer of the sugar including traditional trade Sugar sweeteners,Khandsari & gur equivalent to 26 million tonnes row value followedby Brazil in second place at 18.5 million tonnes. Even in respect ofwhite crystal sugar. India has ranked No.1 position in 7 out of last10 years HISTORY OF SUGAR INDUSTRY IN INDIA:- Traditional sweeteners gur &khandsary are consumed mostly by the rural population in India. Inthe early 1930’s nearly 2/3rd of sugarcanes production ofalternates sweeteners gur & khandsari. With better standard ofliving & higher incomes, the sweetener demand has shifted to whitesugar. Currently about 1/3rd sugarcane production is utilized bythe Gur & Khandsari sectors. Being in the small scale sector, theseBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 10
  • 11. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDtwo sectors are completely free form controls & taxes which areapplicable to sugar sector. The advent of the modern sugar processingindustry in India began 1930 with grant of tariff to the Indiansugar industry, The number of sugar mills increased from 30 inthe year 1930-31 to 135 in the year 1935-36 &the productionduring the same period in created form 1.20 lakh tonnes to 9.34lakh tonnes under the dynamic leadership of private sector. The area of planning for industrialdevelopment began in 1950-51 & Government laid down targets ofsugar production & consumption, licensed & installed capacity,Sugarcane production during each of Five year plan periods.MANUFACTURING PROCESS & TECHNOLOGY:- Sugar (sucrose) is a carbohydrate thatoccurs naturally in every fruit & vegetable is a major product ofpirotosynthesis, the process by which plants transforms the sun’senergy into food. Sugar occurs in greatest quantities in sugarcane& sugar beets form which it is separated for commercial use. Thenatural sugar stored in the cal stalk or beet root is separated fromrest of the plant material through a process known as refiningFor sugarcane the process of retaining is carried out in followingsteps. Pressing of sugarcane to extract the juice. Boiling the juice unit it begins to thicken & sugar begin to crystallize.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 11
  • 12. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Spinning the crystal in a centrifuge to remote the syrup, producing raw sugar. Shipping the raw sugar to a refinery where it is wasted & filtered to remove Remaining non –sugar ingredient & colour. Crystallizing, drying & packing the refined sugar. Beet sugar processing is the similar but it is alone in onecontinuous process without the raw sugar stage. The sugar beets arewashed sliced & soaked in hot water to separate the sugar containingjuice from the beet fiber. The sugar laden juice is the purified, filtered,For the sugar industry, capacity utilization is conceptually differentfrom the applicable to industries in general. In depends on threecrucial factors the actual numbers of ton sugarcane crushed in aday, the recovery rate which generally depends on the quality ofthe cane & actual length of the crushing season. Since cane is not transported to any great extent, thequality of the cane that a factory receiver on its location & itoutside its control. The length of the crushing season also dependsupon location with the maximum being in south Indian. sugarcanein India is used to make either sugar, Khandsari or gur . Howeversugar products produced are divided into four basic categories;Granulated, brown, liquid, sugar, and invert sugar. PFROFILE OF THE COMPANYBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 12
  • 13. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDName of the factory Shree Halasidnath Sahakari Sakhar Karkhana LTD.Address Shree Halasidnath Sahakari Sakhar Karkhana LTD. Shankaranand nagar, Nipani. TAL:-Chikodi. DIST:-Belgaum PIN:-591237.Year of Establishment APRIL-1981.1st Crushing Season JANUARY-1983.Register Number DSK/REG-2/80-81.Register Date 22-04-1981.Phone Number STD CODE (08338) Chairman-220355 Office-222090FAX Number (08338)221315BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 13
  • 14. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD BACKGROUND & INCEPTION COMPANY. Halsidhanath sahakari sakhar karkhana is placed 3 kmaway from Nipani in north side at Shankaranandnagar , Tal:chikodiDist: belgaum. Halsidhanath sahakari sakhar karkhana is thesupport pillar to the sugar cane producer farme’s in the Nipani area.The karkhana wa started by the some social worker’s in nipaniarea with a view to provide an good option to the former in thisarea like sugarcane. Mr. Baburao Budihalkar was the chief promoter in thisproject But, some other The foundation of karkhana building washeld on 9-11-1982. The chief guest for this function wasShri.Rajiv Gandhi who was the prime minister of India in that time.The Karkha started its regular working on 30-9-1989. The delaywas due to the changing political conditions in Karnataka state.The Karkhana developed a very good rapport with the farmers inthis area and worked for their progress . So, the karkhana isBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 14
  • 15. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDoperating in entire Chikkodi talukaandAlur,Bhairapur,Kanagala,Shippur,Karajaga,Rashing,Bad,Nangnur,Mattiwade,Hitani,Shekinhasur,Konankeri, sadlaga thirteen(13) villges in Hukkeri taluka. Only Belgum in Belgum laluka and Soudattiin Raibag Taluka all these part of Belgaum district in the Karnatakastate. And Arjuni, Chikhali, Gorambe, Shendur, Shankarwadi,Vandur all these eight (8) villages in Kagal taluka is a part ofKholapur district in the Maharashtra state Thus, it will comprise ofpart of Belgaum district and part of Kolhapur district, from twoadjoining states. OBJECTIVES AND FUNCTIONS:- The principle object of the karkhana will be to promote the interests of all its members to attain their social and economic betterment through self help and mutual aid in accordance with the co-operative principles. To prepare and implement the programme for harvesting and transportation of sugarcane on behalf of the member’s from their field to factory in supply of sugarcane to factory for crushing and to avoid probable losses of sugar in cane. To manufacture sugar, Jaggery and its allied by products from the sugarcane supplied by the members and other and to sale these products at good price. To install the factory for manufacture sugar on large scale basis and to take all necessary steps to run it efficientlyBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 15
  • 16. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD To install the necessary machinery required for producing of bagasse, molasses, Press-mud etc. To ruchase the means of transportation and to run, to give and to take on hire basis. To install research centers and to assist the existing research institutions and to undertake research work helpful to sugarcane, sugar and allied industry.NATURE OF THE BUSINESS CARRIED:- S.H.S.S.K.LTD. is co-operative sector firm.It is a manufacturing company It produces sugar, molasses Andsupplies sugar tp Nipani, Chikodi Taluka, Raibag Taluka, saudatti,and Hukkeri Taluka. It operates within Karnataka as well as outsideKarnataka. Nature of business carried Shri Halasidhanath sahakari SakharKarakhana Ltd is involved in the activity of manufacturing whitecrystal sugar products which is the main product. The process ofproduction involves conversion of. Raw sugar cane to sugar, Raw sugar to refined sugar, Molasses, Bagasses are its by products. MOLASSES: Molasses is mainly used for the manufacture of ethyl alcohol(ethanol)yeast and cattle feed. BAGASSES: Bagasses is usually as a combustible in the furnaces to produce steam which in turned is used to generate the power, it is also used as raw materials for the production of paper and as feedstock for the cattle.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 16
  • 17. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDPRODUCT PROFILEShri Halasidhanath Sahakar Sakhari Karakhana Ltd established forthe purpose of sugar while producing the sugar some raw juiceand raw bagasses become molasses and some other by-product. The Shri Halasidhanath Sahakar SakhariKarakhana Ltd is producing following product 1) Sugar A) Medium-30 B) Small-30 C) Levy 2) Molasses 3) Compost 4) BagassesAREA OF OPREATIONThe Shri Halasidhanath Sahakar Sakhari Karakhana Ltd has widerange of area of operation for continuous and regular flow of sugarcane from different authorized area within the 80 kms. Around thespot of plant includes some region of two states from Maharashtraand Karanataka under. SR.NO NAME OF DISTRICT NUMBER TALUKA 1 Chikodi Belgaum 43BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 17
  • 18. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 2 Hukkeri Belgaum 05 3 Raibag Belgaum 04 4 Belgaum Belgaum 01 5 Jamkhandi Baglkot 01 6 Athani Belgaum 05 7 Kagal Kholapur 09 TOTAL 68 OWNERSHIP PATTERN Shri Halasidhanath Sahakar Sakhari Karakhana Ltd established inthe year 1981 at Hala sugar gram of chikodi Taluka. It was resolvedto collect the share of established this sugar factory in co-operativebasis. Let the late Baburao B patil Budhialkar and other socialworkers and leader working in co-operative sector also comeforward to assist team in the starting this factory. It is jointventure with share capital of Rs. 104940000 contributed by18990 share holders. The company was established in the yearApril 1981 & started the crushing in January 1983. The company isregistered under the provision of companies Act-1956. THERE IS TOTALLY 15 BOD’S.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 18
  • 19. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Grower member will elect 12 BOD’S 1 Director will be elected by the co-operative. 1 Director nominated by the principal of financial agency. Apart from this 14 director, managing director will be deputed by the governmentPRESENT BOARD OF DIRECTORS ELECTED DIRECTORShri. D.A.Chougale Managing DirectorShri. Babasaheb .S. Saasne ChairmanShri .Ramagounda .R. Patil Vice- ChairmanShri .Ganesh .P. Hukkeri DirectorShri .Appasaheb .S. Jolle DirectorShri. Annasaheb .A. Patil DirectorShri. Vishawanath .S. Kamate DirectorShri. Malagounda .P. Patil DirectorShri. Anand .D. Ginde DirectorShri. Chandrakant .S. Kotiwale DirectorShri. Ramagounda .B. Patil DirectorShri. Ramagounda .Y. Patil DirectorShri. Kanthinath .G. Chougale DirectorBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 19
  • 20. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDMEMBERSHIP OF SHARE CAPITAL:- The membership of Shri Halsidhanath SahakariKarakana Ltd has been accepted by different individuals and firmscategorized into three classes as under ‘A’ Class involves the grower (farmers of agricukturist) ‘B’ Class involves the institute and non-grower These are:- 1. Co-operative Societies 2. The belgaum District Central Co-operative Bank Ltd. 3. Karnataka State Agro –Industrias Co-operation, Bangalor. ‘C’ Class involves the state government of karnakata. The above said members born their share as share capital as Sr Member class No of Shares Share No capital 1 A Grower 15,924 613.52 B co-operative societyBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 20
  • 21. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 2 Non-Grower 3065 60.06 3 C Government of 1 Karanataka 375.82 Total 18990 1049.40 COMPETITORS INFORMATION The main competitors are as follows Doodh Ganga Shakari Sakhare Karkhane, Ltd Crashing capacity-5500 TCD Recovery -11.5% Sugar production -10000 Qtls (per day). Venkateshwer Sugar Ltd Cashing capacity -2500 TCD Recovery -10.5% Sugar production -3000 qtls (par day). Renuka Sugar Ltd Crashing capacity -10000 TCD Recovery -11.2%BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 21
  • 22. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Sugar production -14000 Qtls (par day). INFRASTRUCTURAL FACILITYCATEEN The management provides multi-purpose cooking range,utensils, working capital, and installation of gas equipment freebuilding expenditure towards purchase of furniture. Actualexpenditure towards consumption of water, electricity and gas,annual subsidy. the rates of foodstuffs in the canteen are fixed onno –no profit basis. The workers who are working in theproduction department are entitled for Tea free at cost while theyare on duty.TRNSPORTATION Up to 40 km. three transportation facilities is providedto farmers rate structure of vehicles as per kilometres Sr. KM Rate per Sr No KM Rate No km per km 1 5 45.56 11 55 156.77 2 10 57.76 12 60 166.83BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 22
  • 23. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 3 15 73.12 13 65 174.02 4 20 86.34 14 70 183.80 5 25 98.16 15 75 192.75 6 30 106.30 16 80 199.12 7 35 117.45 17 85 209.24 WATER It is established the river Vedganga. there issufficient supply of water required for production process. POWER There is provision electricity from KPTCL. & companygenerates its own power through boilers during crushing ofsugarcane. ACHIEVEMENTS In 1996-97 from South Indian Sugar TechnologistsAssociation (SISTA) for best achievement award in canedevelopment.FATURE GROWTH AND PROSPECTUSBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 23
  • 24. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD To undertake such activities as are identical and conductive to the development the society. To inn coverage for other crops where sugarcane not grown. To expand crushing capacity. WORKFLOW MODEL (END TO END MODEL )BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 24
  • 25. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Heating 65 C->Lime +SO2application APPLICATION OF 7’S MODEL OF MC, KENSEY’SBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 25
  • 26. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Strategic planning refer to the management processes inorganization which helps in management to determine the futureimpact of change and take the currentdecisions to reach designedfuture. The management literature is replace which instance oforganization which have fade stress in strategic planning but nothave been phenomenally successfully. Consultants at the Mc.Kensy‘s company very wellknown management consultancy firm the created states developthe 7’ s frame work towards the end of 7 ‘s diagnose the causes oforganizational problems and to formulate problems for important.The following is the 7’s frame related to the Mc. Kenny’s 7’s framework According to waterman organizational change isnot simply matter of structure although structure is a significantvariable in the management of change. Again it is not a simplerelationship between strategy and structure although strategy isalso critical as put. In their view effective organizational change may beunderstood to be a complex relationship between strategy,structure, system and style, skill, staff, and super ordinate goals.The framework suggests that there is a multiplicity of factors thatinfluence an organization and ability to change and its propermode of change.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 26
  • 27. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD STRUCTURE OF ORGNIGIATION SHARE HOLDER BOARD OF DIRECTOR CHAIRMAN MANAGING DIRECTORBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 27
  • 28. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD SHARE SECTION Head: - M.T. PATIL According to by-law, the factories authorized sharecapital is Rs 20 crores. Atresent the number of shareholders is18990 and capital collected from all the shareholders. i.e. Rs10,49,40,000/- The membership of Shri Halsidhanath SahakariKarakana Ltd has been accepted by different individuals and firmscategorized into three classes as under ‘A’ Class involves the grower (farmers of agricukturist) ‘B’ Class involves the institute and non-grower These are:- 4. Co-operative Societies 5. The belgaum District Central Co-operative Bank Ltd.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 28
  • 29. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 6. Karnataka State Agro –Industrias Co-operation, Bangalor. ‘C’ Class involves the state government of karnakata. The above said members born their share as share capital as Sr Member class No of Shares Share No capital 1 A Grower 15,924 613.52 B co-operative society 2 Non-Grower 3065 60.06 3 C Government of Karanataka 1 375.82 Total 18990 1049.40 TIME OFFICE LABOUR WELFARE DEPARTMENTNAME OF PERMA SEATION GOV CONSTR DAILY CONTR TOTA NENT AL T U ACT LTHE WAGEDEPT CTUAL STime 6 4 - - - 3 13OfficeBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 29
  • 30. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDSecurity 13 - - 6 - 3 22Store 6 5 - 1 - 9 21Civil 4 - - - - - 4Environm 3 3 - 1 - 9 16entAdminist 15 3 1 5 - 6 30rativeGeneral 10 - - - - 3 13A/CCane A/C 7 2 - 1 - 6 16Vehicle 7 4 - - - - 11Medical 1 - - 1 - - 2Agricultu 28 62 - 5 2 39 136reEngineer 90 70 - 3 3 41 207 8 99 - - 2 38 147ManufacturerTOTAL 198 252 1 23 7 157 638 HEAD: - S.G. MORE. Time office is one of the main part of the factorybecause in time office all records regarding many types ofBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 30
  • 31. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDdepartments and about the details of their employees are recordedso it must require in each and every organization. There is no special department like HRD or Personalmanagement in the factory time and labour welfare office is there,in this office there is labour welfare officer & head time keeper,shift time keeper and wage clerk is there. WELFARE FACILITY To take care of all the workers, the organization willprovide the some following facility those are:- A. Bonus is 08.33%based on the worker salary. B. Quarter, hospital etc. facility and allowances C. Canteen facility D. Promotion facility E. Permanent employees get one increment every year. F. School facility to the worker children. G. And medical facility are available if any accident occurs. PURCHASE SECTION Purchasing plays an important and significantrole in processing industry. Purchasing is tough task, which is to beperformed very carefully. It functions on the principal of “ MoneyBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 31
  • 32. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDsaved in purchased is money gained in sales”. Profit can also beearned in purchasing process by the purchase manager by hisknowledge about the entire market. STORE DEPARMENT:- THE WORKING FLOW CHART SHOWN BELOW In this factory the store department incharge will be Shri Kadam sir under their the information will behere. Main Points:- The store keeper will check the supplier quantity and afterwards send to the respective section wise. For ex.:- Cement, Belt etc After this the material verification will be taken by under chief enginee The store keeper will entry the purchased material in a book in systematic manner. The daily transactions will be held in the books of power house main panel board. Store department is just like a godown because in department all materials which are needed to the factory are stored.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 32
  • 33. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD The store house which contains the 21 heads. They are follows:-Heads :- 1. Oil and lubricants Ex :- Bearing oil, Greece, etc being purpose machinery. 2. Manufacturing goods Ex:- Chemical, sulphur etc uses of sugar processing. 3. Hardware Ex:- Nutbolt, chain, MS bar etc uses of machinery maintenance. 4. Welding materials Ex:- Welding rod, screen, black glass uses of welding purpose. 5. Drawing materials Ex:- Ammonia paper, Dressing paper, etc machinery maintenance of engineering department. 6. Electrical goods Ex:- Pressure gauge, vacuum gauge, temperature gauge etc for machinery maintenance. 7. Tools and tackles Ex:- Spaner, screw driver etc. 8. Transmission of goods Ex:- Bearing oil, oil seal, bearing glue 9. Iron and steel These are used for machinery maintenance of engineering department. 10. Building materials Ex:- Cement, steel, stone crystal, sand etc uses of concrete foundation for machinery.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 33
  • 34. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 11. Machinery and machine spare Ex:- Bearing, coupling, nutbolt etc. 12. Pipe and pipe fitting Ex:- pipe, bend, flang etc 13. Furniture and fixtures Ex:- Chairs, tables etc 14. Stationary Ex:- Log book , indent book, bucket etc. 15. Rubber goods Ex:- Bush, rubber belt, wheel, ordinary material. 16. Library Ex:- Books. 17. Vehcle spare 18. Medical Ex:- Druds, tablets, syringe, salines etc. 19. Printing Ex:- Log, book, store recipt book etc.. 20. Computer spare Ex:- Ribbon, cartridge, pen drive etc. SALES SECTION The main product of H.S.S.K.Ltd is sugar andby-Bagasses, Molasses, and press mud. These all are sold bycalling tenders. Because the factory has no right to sale theseproducts directly in the open market. The Office Superintendentdoes this work and sales officer with the help of sugar directorsBangalore Central Govt. fixes the selling quantity.There are two types of sales:- A. Free sale--------- 90% of the produced sugar.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 34
  • 35. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD B. Levy sale--------10% of the produced sugar. The factories’ by-products like, A. Bagasses-------used in paper industry. B. Molasses-------used in distilleries. C. Press-Mud-----used in fertilizer. SECURITY SECTION There are 22 security guards and their function are, 1) Checking in-out persons and vehicles. 2) Protecting and securing proper and best use of assets of the factory. 3) Maintaining the below mentioned registers, A. Attendance registers. B. Visitors register. C. Vehicle register. D. Workers get pass E. Bagasse, Molasses, Press-Mud get pass.Cane Development SectionBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 35
  • 36. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Department-Structure Chief of C.D.OFor Manager C.D.OAssistants AssistantC.D.OWorkers Cane-Inspector Field-Offices The duty of C.D.O (Cane Development Officer) isto develop the growth of sugarcane by providing training andseeds to the farmers.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 36
  • 37. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Cane development process:- Providing training to the farmers. Providing seeds on loan basis. Seeds are developed in the firm and distributed to farmers. Early detection and pests and crop decreases and providing solution Cane-Verities:- Karnataka Hybrid Seeds. Coimbatore Coimbatore Cadlar Coimbatore Melattur.ENGINEERING-DEPARTMENTHEAD:-M Umapati It is very important department to any factory,because engineer only have capacity to run the productionsmoothly. In this factory this section has217 employee The mainfunctions of this section as follows, 1. To take of all the divisions like boiler, mill, electricity etc.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 37
  • 38. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 2. To ensure that all machineries are in good condition. 3. They inform board of management about scares materials and make them to purchase that material. 4. The repair the broken down machines and make them to work properly. Department-Structure Assistant Electrical Environmental Work-ShopCivil Engineer Engineer Engineer EngineerEngineerSupervisor Supervisor Supervisor SupervisorSupervisorBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 38
  • 39. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Worker Worker Worker Workerworker During off season their functions are, 1. Maintenance of all the machineries currently. 2. Overhauling of the machineries. 3. Machinery erection. PRODUCTION DEPARTMENTBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 39
  • 40. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD The Chief Engineer, chief chemist and Civil engineer from the structure of the production The chief engineers work is to technical and mechanical works and improve them to increase the production capacity. The chief chemist work is to instruct how where & when to use chemical in the production process. The civil engineers work is to plan where to situate the machineries and also they advise useful suggestions to make the production very easy and smooth. COMPARATIVE STUDY OF PRODUCTION OF SUGARSr. YEAR SHARE SUGARCANE SUGAR RECOVERYNo CAPITAL CRUSHING PRODUCTION RATEBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 40
  • 41. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD A/C (In MT) (In qtl)1 151480 10.71 2004-05 837.13 141430.8522 239950 11.40 2005-06 972.40 210556.4283 275240 11.41 2006-07 1049.40 241130.0004 132920 11.82 2007-08 1125.40 113345.000 Cane Yard:- In this collect sugarcane from the farmers. Cane weight:- In this they measure sugarcane including vehicle after unloading the cane. they measure vehicle weight and they deduct that weight in the total weight. Thus they get the actual weight of the cane. They prepare 3 weight receipts with the help of computers, one goes to cane a/c, another goes to farmers and third one goes to transfot office.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 41
  • 42. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Cane Carrier:- The unloaded cane is put down in carrier and carrier is driven by the motor It is concerned to cane cutter. Cane cutter:- there are two types cane cutter, 1) 1st cutter---In this cane cuts into 12 to 20 inches. 2) 2nd cutter---In this cane cuts into 12 to 20 inches. After cutting cane is forwarded in fibriser. The fidrised cane is taken into mill section. Mill Section: - In this section, the cane is squeezed. Whatever the quantity of juice quizzed in the mill is pumped into clarification house. At this time they get the by- product called bagasse. Dorr:- The juice has come by- product like press mud and bagasse before it is taken stored in the Dorr. After storing in the Dorr these are separated and move down ward. Evaporators:- After classification of the juice stored in Dorr. Then it is taken in to Evaporators to evaporate that the water evaporation juice is taken into pan section. Pan Section:- In this section again syrup (juice) is boiled or heated by the steam. In this section they remove water, which is mixed in the syrup. After that make crystals.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 42
  • 43. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Centrifugals:- This is last process in producing sugar in this section factory gets a main by-product molasses and stores it in storage tank. They produce mainly 3 types of sugar, 1) L30: This is big crystal. 2) L30: This is medium crystal. 3) L20: This is small crystal. GODOWNAfter packing the sugar in the gunny, they are stored in thegodown. In the godown they maintain register consisting therecords of stock, dispatch and closing balance.Factory has 4 largeGod owns and their capacity is given below, STORE CSPSCITY (In qtl bags) HOUSE 2 1lakhs 2 70000BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 43
  • 44. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD SKILL Skill is the distinctive capabilities or competence of theorganization as a whole, Skills developed are, Product quality awareness. Time management. Result orientation. Dedication. This type of training also known as job instruction training isthe most commonly used method. Under this method, theindividual is placed on a regular job though the skill necessary toperform that job. The trainee learns under the supervision of aqualified worker of instructor. On-the-job training has theadvantage of giving firsthand knowledge and experience under theactual working condition. While the trainee learns how to performjob, he is also a regular worker rendering the services for which hepaid. The problem of transfer of trainee is also minimized as theperson learns on-the –job training methods includes job rotations,coaching job instruction or training through step-by-step andcommittee assignment. STYLE Style includes two things, one management style andorganizational culture. Management style the way in which themanagerial personnel behave and collectively spend their time toachieve organizational goals, it consists the way of lending.motivating and the style of leadership in the management. HereBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 44
  • 45. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDthey usually use authoritative style means top to down decisionmaking parameter pertaining to day-to-day operation but theyallow subordinates to participate in the decisions affecting theirinterest and ask their suggestions for their decisions. This makesorganization more effective. SRTATEGY Strategy means the actions which a company plans in to oranticipates of changes in its external environment. In other words itis the determination of basis long term objectives or courses ofaction and allocation of resources to achieve the organizationalgoals’. They are as follows, Waste Elimination S.H.S.S.K. Ltd. Produces molasses and sell it to liquor industries. And it uses biogases boilers in order to generate energy for factory during crushing process. Cost Reduction: They are reducing the intake of employees and reducing the number of employees in order to reduce cost. They are not depending on K.P.T.C.L. for power while crushing process is carrying on. They produce energy by boilers. SYSTEM A system includes formal and informalprocedures that support the strategy and structure. In other words,it is the processes and flows that shown how an company gets itsday-to-day things done. This includes the procedures and theroutines that will characterized how important work to be done. i.e.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 45
  • 46. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDfinancial system, hiring, promotion and performance appraisalsystem and information system etc.PRODUCTION PROCESS:- Pressing of sugarcane to extract the juice. Boiling the juice until it begins to thicken and sugar begins to crystallizes. Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar. Shipping the raw sugar to a refinery where it is washed and filtered to remove remaining non-sugar ingredients and color crystallizing, and drying packing the refined sugar. INVENTORY CONTROL SYSTEM Here in stored department the inventory control used FIFO.Here the method FIFO is appropriate because the sugarcane is nota durable commodity it is better to crush the sugarcane freshly. Itis not stored for a long time because it turned in too dry sooner. STAFF Staffs refer to the people in the enterprise and theirsocialization into the socialiseational culture. Productive highperforming employees are the companiesBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 46
  • 47. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD most valuable assets. The company follows a progressive policytaking keen interest in its personnel and well beings and progress,which builds a strong sense of belongingness. Technical Department:-A. Machine shop and maintenance quality assurance.B. LaboratoryC. Tool roomD. Manufacturing engineering departmentsE. Production planning and controlF. Research and development Non-Technical Department:- A. Administration B. ClericalDUTIES AND RESPONSIBILITIES:-Technical Staff:- Operators/Technicians:- Carry out the work as per the instruction and job allocation. In process inspection wherever applicable.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 47
  • 48. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Maintenance in charge:- 1. Planning of preventing maintenance. 2. Attending breaks down maintenance. 3. Taking corrective action for reduce break down. 4. Planning spares and raising purchase intend. 5. Maintaining the quality record. SHARED VALUE There are values shares by the members of the organization.It is the super ordinate goal that is centrally responsible forproviding a core mission to the organization Used as an umbrella,which embraces all the other managerial activities. In short it sayswhat does the organization stands for and what is believes in. Adevoted and sincere contribution to the mankind through thevarious business activities of the company and compromise to thequality.1. Continues growth is the main force behind the achievement of S.H.S.S.K ltd.2. Customer satisfaction through quality services.3. Quick decision and execution with speed.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 48
  • 49. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD SWOT ANNALYSIS OF THE COMPANYBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 49
  • 50. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDSTRENGHTS Produces good quality of sugar. It’s near the river of the Vedganga so there is availability of the sufficient water. SHSSK is not dependent of KPTCL for supply of power while production is carrying on the generator through rower. WEAKNESS:- Since it is agro based industry monsoon effects its production. Lack of good administration. Lack of infrastructure. Backward technology and complexity OPPORTUNITIES:- Possibility of willing co-operation by bank. Arrangement for KPTCL grid. THREATS:- Competition from the domestic player.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 50
  • 51. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Due to unfavorable Govt. Polices, factory has to sell sugar below its production cost. RESEA RCH ON FI NA NCI A L A NA L Y SIBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 51
  • 52. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD .NEED FOR THE STUDY The study has been conducted for gaining practical knowledge about Ratio analysis of Shri Halasidhnath Sahakari Sakhar Karkhana. Ltd. The study is undertaken as a part of the MBA curriculum from 1st July 2010 to 20th August 2010 in the form of summer in plant training for the fulfillment of the requirement of MBA degree. TITLE OF THE PROJECT“This project “A Study on RATIO ANALYSIS of HalsidhanathSahakari Sakhar Karkhana Ltd” is considered as an analyticalresearchOBJECTIVES To study the profitability of Halsidhanath Sahakari Sakhar Karkhana Ltd. Nipani. To study the liquidity position. To find activity turnoverBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 52
  • 53. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD To study operating efficiency of Halsidhanath Sahakari Sakhar Karkhana Ltd Nipani.SCOPE OF THE STUDY The scope of the study is identified after and during the study is conducted. The main scope of the study was to put into practical the theoretical aspect of the study into real life work experience. The study of Ratio analysis further the study is based on last 5 years Annual Reports Shri Halasidhnath Sahakari Sakhar Karkhana. Ltd.LIMITATIONS OF THE STUDY The study duration (summer in plant) is short. The analysis is limited to just five years of data study (from year 2005 to year 2009) for financial analysis. Limited interaction with the concerned heads due to their busy schedule.METHDOLOGYIn preparing of this project the information collected from thefollowing sources.Primary data:The Primary data has been collected from Personal Interaction withFinance manager Mrs.S.M.Siragave and other staff members.Secondary data:The major source of data for this project was collected through Balance sheet of SSHSKL Profit and loss account of 5 year period from 2005-2009BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 53
  • 54. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDSAMPLING DESIGNSampling unit : Financial Statements.Sampling Size : Last five years financial statements.Tools Used: MS-Excel has been used for calculations. THEORETICAL FRAME WORKINTRODCTION:- Finance is life blood of the business. Thefinancial management is the study about the process of procuringand judicious use of financial resources is a view to maximize thevalue of the firm. There by the value of the owners i.e. theexample of equity share holders in a company is maximized. Thetraditional view of financial management looks into the followingfunction that a finance manager of a business firm will perform.1. Arrangement of short-term and long-term funds from the financial institutions.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 54
  • 55. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD2. Mobilization of funds through financial instruments like equity shares, bond Preference shares, debentures etc.3. Orientation of finance with the accounting function and compliance of legal provisions relating to funds procurement, use and distribution. With increase in complexity of modern business situation, the role of the financial manager is not just confirmed to procurement of funds, but his area of functioning is extended to judicious and efficient use of funds available to the firm, keeping in view the objectives of the firm and expectations of providers of funds. DIFINATION:- Financial Management has been defined differently by different scholars. 1) Howard and Upton:- “Financial Management is the application of the planning and control function to the finance functions” 2) Bringham:- “Financial Management is an area of financial decision making harmonizing, individual motives and enterprise goals” MEANING OF RATIOS Financial Statement contains a wealth of information which, ifproperly analyzed and interpreted, can provide valuable insightsinto a firm’s performance and position. Analysis Soft financialstatements is of interest to (short terms well as long term)BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 55
  • 56. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDinvestors, security analysts, managers, and others financialstatement analysis may be done for a variety of purpose, whichmay range from a simple analysis of the short -term liquidityposition of the firm to a comprehensive assessment of thestrengths and weaknesses of the firm in various areas. The principal tool of financial statementanalysis is financial ratio analysis. An absolute figure does notconvey much meaning. Ti, there for, become necessary to study acertain figure in relation to some other relevant figure to arrive atcertain conclusion e.g. If we give the figure of only gross profitearned by certain firm, we cannot say whether the gross profit is heavy, reasonable or sufficientfor this purpose we must take into consideration the figure of sales.Thus, the gross profit to is required to be studied in relation tothe sales to decide the percentage of gross profit to sale on thebasis of percentage we can conclude whether the gross profitearned is reasonable or otherwise. Thus the relationship betweenthe two figures expressed mathematically is called a ratio.OBJECTIVES OF RATIO ANALYSIS:- The study of financial statement of any corporate will help in knowing its present and future earning capacity. The study of financial resources can help in knowing whether a company can pay its long-term or short-term liabilities.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 56
  • 57. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD It’s very use full to know how much working capital is employed in business and same effectively used. It’s use full to measure earning capacity and its comparison to other competitive units. Help full to known marginal efficiency. Use full to future planning. INTERPRETATION OF RATIOS The benefit of the ratio analysis depends to great extentupon their correct interpretation. Interpretation requiresconsiderable ability on the part of the analyst. He has to decidewhether the relationship disclosed by the ratio is satisfactory or not.He has to base his decision on experience, or on comparison maybe interpreted in any one of the following ways.1) BASED ON SINGLE RATIO AND GROUP RATIOS:-The interpretation may be based on individual ratio e.g. If currentratio persistently falls and goes below one, it can be interpreted asan indication of short-term insolvency. However, one cannot getthe position corrected bystudying individual ratio in isolation. It is therefore a commonpractice to studyand interpret a set of several related ratios e.g. for short-termsolvency both theBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 57
  • 58. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDratios, whose significance is not fully understood , are made moremeaningfulby the computing and study of additional relevant ratios.2) COMPARISON OVERTIME:- Ratio analysis is primarily useful for studying trends,indicating rise, decline or stability over a period of time. For thispurpose, ratios by themselves are of no particular significance. Forreveling such trends, the same ratio or a group of ratios is studiedover period of years. Thus the movements in the ratios, rather thanthe ratios themselves, are important.3) INTER-FIRM COMPARISON:- Ratios of undertakings are compared with the respectiveratios of other firm in the same industry and with the industry onaverage An immense benefit is likely to from such comparison asthe concerns similarly situated are as a matter of fact , “to sail inthe same boat.” PROCEDURE OF ANALYSIS:- First or all the depth, object and extent of analysis must bedetermined, so that necessary information can collect. The analysisis required to go through various financial statements of thebusiness and collect other required information from themanagement. The analysis is required to rearrange the data givenBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 58
  • 59. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDin the financial statements in a manner, which will help the toanalysis the statements easily and conveniently. After analyzing thestatement the interpretation is made and the conclusions are drawn. TYPES OF RATIOS:- Classification of ratios is done in two ways. A. According to nature of items. B. According to purpose of the function. A) According to nature of items:- 1) Balance Sheet Ratios:- The ratios exhibiting the relationship between two item or group of items in the balance sheet e.r. Relation between current Assets and Current Liabilities. 2) Revenue Statement or Profit and loss account ratios:- The ratios disclosing the relationship between two items or group of items in the profit and loss account it. Relationship between Sales and Gross profit. 3) Inter Statement or Composite Ratio:- The ratios indicating the relationship of certain items in the balance sheet with some figures in the revenue statements i.e. Net Profit and Capital or Sales and Fixed Assets. B) Functional Classification:- Liquidity Ratios; - These ratios measure the liquid position of the enterprise i.e. whether the current assets to pay current liabilities as and whenBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 59
  • 60. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD they mature. Thus, these ratios indicates short-term solvency of the business Leverage Ratios; - They indicate the relative use of debt and equity in financing assets of the firm. The extent, to which the practice of trading on equity can be carried on safety, can be known through these ratios. Activity Ratios:- These ratios measure the efficiency in the employment of funds in the business operations. They respect the company’s level of activities in relation to its turnover. Profitability Ratios:- There ratios measure overall performance. And profits earning Capacity of the business. They reveal the effect of the business transaction on the profit position of the enterprise. PROFITABILITY RATIO:- 1) Gross Profit Ratio:- This ratio reflects the efficiency with which the management produces each unit product. The ratio is calculated as under: Gross Profit Ratio= Profit SalesIt is the ratio which is most commonly employed by accountantsfor comparing the earnings of business for one period with thoseof other or earnings of one concern with of another in the sameBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 60
  • 61. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDindustry. It indicates the degree to which selling prices goods perunit may decline without in losses on operations for the firm. 2) Net Profit Ratio:-Net Profit is that proportion of net saleswhich remains to the owners or the shareholders after all costs.Charges and expenses including income-tax have been deducted.It is calculated as under. Net profit (after tax) Sales It differs from the ratio of operating profit is to net sales in asmuch as it is calculated after adding non-operating incomes, likeinterest, dividends on investment etc. To operating profit anddeducting non-operating expenses such as loss on sale of oldassets, provisions for legal damages etc. from such profits.LIQUIDITY/SOLVENCY RATIO:-1) Current Ratio or working capital Ratio or 2:1 Ratio:- It is a ratio of current assets to current liabilities. The ratio is calculated by dividing the current assets by the current liabilities. Current Assets Current liabilitiesCertain authorities have suggested that in order to ensure solvencyof a concern. Current assets should be at least twice the liabilitiesand therefore. his ration is known as 2:1 ratio.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 61
  • 62. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD2) Liquid Ratio or Acid Test Ratio or Quick Ratio:- The current Ratio fails to serve as a realistic guide to the solvency of the concern, as the major portion on the current assets may comprise of such assets which cannot be converted immediately cash (e.g. stock) to meet the immediate liabilities. It this ratio is 1:1, it is considered that all claims will be met when they arise. Quick / Liquid Assets Current liabilities ACTIVITY RATIO1) Inventory Turnover Ratio:- The term “Inventory Turnover “ refers to the number of times in a year inventories are sold and replaced.Inventory Turnover Ratio:- Cost of Goods Sold or sales Average Inventory at cost It is Indication of the velocity with which merchandize movesthrough the business. This is a test of inventory to discoverpossible trouble in the form of over stocking or over valuation. Itassists the financial manager in evaluating inventory policy.2) Operating Ratio:- The ratio shows the percentage of net sales i.e. observed by the cost of goods sold operating. Naturally higher the ratio, the less favorable it is. Because it would leave a small margin to meet interest, dividends and other corporate needs.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 62
  • 63. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Operating Ratio = Cost Goods Sold + Operating Expenses Net Sales3) Fixed Assets Turnover Ratio:-The ratio measures the efficiency in the utilization of fixed assets. This ratio indicates whether the fixed assets are being fully unitized A high ratio is an index of the vestment in fixed asset. Normally standard ratio taken as five times. Fixed Assets Turnover Ratio = Sales Net Fixed Assets4) Total Assets Turnover Ratio:- The ratio is arrived at by dividing sales by the total assets i.e. Sales Total Assets The ratio indicates the sales generated per rupee of investment intotal assets. Thus, it aims to point out the efficiency or inefficiencyin the used of total assets or capital employed. Increase in ratioindicates that more revenue is generated per rupee of totalinvestment in assets.LEAVERGE RATIO:-BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 63
  • 64. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD1) Debt Equity Ratio:- It measure of the relative claims of creditors and owners against the assets of the firm. Total Debts Net worth owner’s Equity The term “total debt” includes all debts i. e. long – term, shortterm mortgages. Bills, debentures etc. whereas the term net worthmeans equity share capital, reserves and surplus i.e. proprietor’s.Funds or equity 1:1 ratio is acceptable.2) Fixed Assets to worth Ratio:- Fixed assets Net worth It indicates that the company has used short term funds foracquiring fixed assets, which policy is not desirable. To the extentfixed assets exceed the amount of capital and reserves, theworking capital are depleted. When the amount of proprietor’sfund exceeds the value of fixed Assets i.e. when the percentage isless than 100, a part of the working capital is supplies by theshareholders. Provided that there are no other non-current assets.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 64
  • 65. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 65
  • 66. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD DATA ANALIYSIS AND INTERPRETATION 1) PROFITABILITY RATIO:- Gross Profit Gross Profit Ratio = X 100 SalesYEAR GROSS PROFIT SALES GROSS PROFIT RATIO 23.26 7,00,15,301.58 2004-05 301002504.06 13.66 41317359.41 2005-06 302304793.75BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 66
  • 67. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 11.02 3,79,03,469.81 2006-07 337985566.07 17.44 6,09,91,621.57 2007-08 349546301.04 12.63 5,44,14,256.14 2008-09 430543494.12 INTERPRETATION:- The Gross-Profit Margin ratio of SHSSKL has ups and downin these five years period. The gross profit measures the relationbetween the sales and profits. The gross-profit ratio in the year2004-05 is 23.26 and next year 2005-06 is 13.66 and in 2006-07its 11.22 then in 2008its become 17.44 and in 2008-09 it is 12.63. C) Net Profit Margin Ratio:- Net Profit Net Profit Ratio = X 100 Sales YEAR NET PROFIT SALES GROSS-NET RATIOBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 67
  • 68. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 2004-05 14569011.39 301002504.06 4.84 2005-06 4053781.26 302304793.75 1.34 2006-07 1179916.79 337985566.07 0.34 2007-08 2178816.70 349546301.04 0.62 2008-09 1653143.88 430543494.12 0.38INTERPRETATION The net profit is the indicative of the management’sability to operate the business with sufficient success. In the abovebar diagram it shows that the net profit ratio of SHSSKL hasincreased 4.84 in 2004-05 but it decreased in the next years 1.34BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 68
  • 69. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDin 2004-05 and it again decreased in 2006-07.then it increased0.62 and it again decreased 0.38.in 2008-09.LIQUIDITY RATIO CURRENT RATIO:- Current Ratio = Current Assets Current Liabilities YEAR Current Assets Current RATIO Liabilities 308321871.3 454294589.7 0.67 2004-05 265422636.1 563620481.6 0.47 2005-06 875637598.7 623087336.2 1.40 2006-07 446111012.4 565628200.9 0.78 2007-08 471836449.8 542837550.5 0.86 2008-09BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 69
  • 70. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD SINTERPRETATION:- An ideal current ratio is 2: 1 Thus 2 is theconsidered as a safe margin from the above diagram it determinesthat the firm has safe margin in1.4 2006-07 and in 2004-06 it has0.67&0.47 moreover it has not safe margin 2007-09 e.i to 0.78&0.86Liquidity Ratio Liquidity Ratio = Liquid Assets Liquid LiabilitiesLiquid Assets= Current Assets-InventoriesLiquid-Liabilities = Current Liabilities - Bank-overdraft Years Liquid assets Liquid Ratio Liabilities 2004-2005 110024781.8 454294589.7 0.24 2005-2006 37885949.4 563620481.6 0.067 2006-2007 496655612.5 623087336.2 0.79 2007-2008 102195141.3 565628200.9 0.18 2008-2009 163116368.5 542837550.5 0.30BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 70
  • 71. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD INTERPRETATION:- Usually, a high acid test ratio is an indication of that firm’ s better liquidity position. From the above table it determines that the firm has 0.24 &0.067 in the year 2004-06 and it increased 0.79 in 2006-07 and it again decreased 0.18 in 2007-08 then again raised0.30 in 2008-09 ACTIVITY RATIO INVENTORY TURN-OVER RATIO Sales Inventory Turn-Over ratio= Average Inventory Opening-Stock + Closing-Stock Average Inventory = 2 Years Average Inventory Sales Inventory Turn-Over ratio 192353685.5 1.562004-2005 301002504.06 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 71
  • 72. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD2005-2006 234674943.5 1.28 302304793.752006-2007 324789674.5 1.04 337985566.072007-2008 342085995.0 1.02 349546301.042008-2009 305513910.0 1.40 430543494.12 INTERPRETATION: - This means that the inventory in the first year has been sold1.56 very slow in 2004-05 And it again increase in 2005-08 e.i 1.28, 1.04, 1.02.and in last year it again decreased 1.4 in 2008-09 FIXED ASSETS TURN-OVER RATIO Sales BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 72
  • 73. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Fixed assets turn-over ratio = Fixed-Assets YEARS SALES FIXED-ASSETS FIXED ASSETS TURN-OVER RATIO2004-05 301002504.06 350064970.91 0.852005-06 302304793.75 361712835.66 0.832006-07 337985566.07 363487965.66 0.922007-08 349546301.04 371470849.66 0.942008-09 430543494.12 647506096.70 0.66 INTERPRETATION:- The ratio indicates the extent to which the investment infixed assets contributed towards to sales. As the figure shows, in2004-05 the fixed assets turnover ratio is 0.85 and it increase inthe next 3years continuously with 0.83, 0.92, 0.94. And it againdecreases in 2008-09 e.i to 0.66.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 73
  • 74. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD CURRENT ASSETS TURN-OVER RATIO Sales Current assets turn-over ratio = Current Assets YEARS SALES CURRENT CURRENT ASSETS ASSETS TURN-OVER RATIO2004-2005 301002504.06 308321871.3 0.972005-2006 302304793.75 265422636.1 1.132006-2007 337985566.07 875637598.7 0.382007-2008 349546301.04 446111012.4 0.782008-2009 430543494.12 471836449.8 0.91 INTERPRETATION:- The current assets turnover ratio measures that how quicklythe short term obligations can be met. In the following graph it isshown that there is increasing0.97, 1.13 in 2004-06 current assetsBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 74
  • 75. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDturnover ratio. And it falls0.38 in 2006-07 and it increaseslightly0.78 to 0.91 in 2007-09.Operating-Efficiency Ratio:- 1) Direct Material cost to sales = Direct Material cost *100 Net-sales YEARS Direct SALES Percentage (%) Material2004-2005 200389076.8 301002504.06 66.572005-2006 219224160.5 302304793.75 72.512006-2007 241453980.32 337985566.07 71.432007-2008 224546979.08 349546301.04 64.232008-2009 309403524.5 430543494.12 71.86INTERPRETATION:- Direct Material cost to sales should be lowenough to leave portion of sales to give fair return to investorsfrom the above table show that 66.57 & 64.23 in the year 2004-05BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 75
  • 76. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDand 2007-08 it give the fair to the investors where as72.51, 71.43and 71.86. 2005-07and 2008-09 are not up to mark able . 2) Direct Labour cost to sales = Direct Labour cost *100 Net-sales YEARS Direct SALES Percentage (%) Labour2004-2005 14885365.90 301002504.06 4.942005-2006 16958271.40 302304793.75 5.602006-2007 27661900.24 337985566.07 8.182007-2008 34862365.60 349546301.04 9.972008-2009 35562670.05 430543494.12 8.25INTERPRETATION:- From the above table shows that the cost ofdirect labour of the firm in the year of 2004-05 is 4.94% where itcompare to the next 3year it increase5.60, 8.18 & 9.97. Slithightlliy.And it again decreases in the year of 2008-09. It shows that thefirm efficient utilized the labour in the year of 2004-05 and2005-06.Factory Overhead to Sales:-BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 76
  • 77. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 3) Factory Overhead to Sales = Factory Overhead cost *100 Net-sales YEARS Factory Net-SALES Percentage (%) Overhead2004-2005 15712759.79 301002504.06 5.222005-2006 25581554.35 302304793.75 8.462006-2007 30966215.70 337985566.07 9.162007-2008 32038895.00 349546301.04 9.162008-2009 29269482.40 430543494.12 6.79INTERPRETATION: - From the above table shows that the cost ofmanufacturing overhead of the firm in the year of 2004-05 is5.22% where it compare to the next 3year it increase 8.46,9.16,&9.16 in 2005-08. And it again decreases 6.79 in the year of2008-09.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 77
  • 78. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Findings Gross profit and net profits are decreased during the period of study, which indicates that firm’s inefficient management in manufacturing and trading operations. Gross profit and net profits are increased during the period of 2004-05 which indicates that firm’s efficient management in manufacturing and trading operations. Liquidity ratio of the firm is not better liquidity position in over the five years. It shows that the firm had not sufficient liquid assets. The inventory of the firm in the first year has been sold very slow. And there is an increase in the movement of the inventories but it slightly decreased in the last year. This may be a sign not good to the firm. The fixed assets turnover ratio of the firm has in 2004-05 the ratio is 0.85 and it increase inBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 78
  • 79. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD the next 3years continuously and it again decrease in 2008-09. The current assets turnover ratio is increasing during the period of 2004-06 and again it decrease in the period of 2006-07. And again increase in next two year slithightlliy. Direct Material cost ratio of the firm is has less material cost during the period of 2004-05 & 2007-08 and it raised in the year of 2005-06 and 2008-09. The cost of direct labour of the firm in the year of 2004-05 is 4.94%and it increasing slithightlliy up to 2007-08 and it decrease in the next year. The cost of manufacturing overhead of the firm in the year of 2004-05 is 5.22% where it compare to the next 3year it increase rapidly.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 79
  • 80. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD SUGGESTIONS The profit Of the Company Is not in a good Position For That company has to Take Alternative Actions such As Increasing in Procurement in sugarcane , Production, and Control in Expenses Like, Administrative, selling Etc. The firms have low current ratio so it should increase its current ratio where it can meet its short term obligation smoothly.BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 80
  • 81. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Liquidity ratio of the firm is not better liquidity position in over the five years. So I suggested that the firm maintain proper liquid funds like cash and bank balance. It should enhance its employee’s efficiency, more training needed to its employees in order to increase its production capacity and minimize mistakes while performing the tasks, also more safety precaution need to implement to the employees who directly working on sugar production process CONCLUSIONThis project of Ratio analysis in the production concern is notmerely a work of the project. But a brief knowledge and experienceof that how to analyze the financial performance of the firm. Thestudy undertaken has brought in to the light of the followingconclusions. According to this project I came to know that from theBASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 81
  • 82. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD analysis of financial statements it is clear that SHSSK Ltd. Have been incurring loss during the period of study. So the firm should focus on getting of profits in the coming years by taking care internal as well as external factors. And with regard to resources, the firm is take utilization of the assets properly. And also the firm has a maintained low inventory. PROVISIONAL BALANCE SHEET AS AT 31st MARCH, 2005LIABILITY AMOUNT ASSETS AMOUNTSOURCES OF FUNDS FIXED ASSETSShare capital 88846018.59 Gross block 350064970. BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 82
  • 83. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 09Reserves and surplus 274191573.3 Less: 4 Depreciation Net Block 350064970. 09 Investment 6975000.00CURRENT LIABILITIES CURRENT ASSETSWorking capital 279908387.0 Inventories 198297089. 8 91Statuary deposits 4508406.18 Cash in hand 374639.72Deposit 7217637.93 Cash at bank 2879292.96Suspense 14373128.04 Advances 60423970.9 1Sundries 84028.25 Other assets 46346877.8 0Other Sundries 3239794.41 Profit &loss 152726340. Account 15loan funds 118309456.4 7Cane bills and other 26653751.52payablesTOTAL 818088181.8 TOTAL 818088181. 1 81 TRADING AND PROFIT & LOSS ACCOUNT AS ON 31-3-2005 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 83
  • 84. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDExpenditure AMOUNT Incomes AMOUNTOpening stock 201471850.0 Sugar sales 270160956.1 0 6 Other sales 30841547.90Cost of production 212750813.4 Closing stock 183235461.0 8 0Gross profit 70015301.58Total 484237965.0 Total 6 484237965.0 6Establishment charges 7247138.80 By gross profit 70015301.58Travelling expenses 661534.60 Other income 2071499.26Exp .on vehicle 762054.92Printing and 575316.06stationeryMeetings &AGM 299139.58ExpensesInterest &Insurance 35111966.31chargesGovt Tax & Other 121490.67Social Expenses’ 198765.78Rent rates & Taxes 1257774.92Other management 1001874.80ExpensesBonus for the year 1600000.002005Depreciation 8680733.00 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 84
  • 85. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDNet profit 14569011.39TOTAL 72086800.84 TOTAL 72086800.84 PROVISIONAL BALANCE SHEET AS AT 31st MARCH, 2006LIABILITY AMOUNT ASSETS AMOUNTSOURCES OF FUNDS FIXED ASSETSShare capital 97239684.00 Gross block 361712835.6 6Reserves and surplus 270171150.6 Less: 0 DepreciationLOAN FUNDS Net Block 361712835.6 6Loans Investment 587259.00CURRENT LIABILITIES CURRENT ASSETSWorking capital 321283573.1 Inventories 303308585.5 6 3Statuary deposits 10513761.18 Cash in hand 717669.52Deposit 7539531.49 Cash at bank 16549209.47suspense 29044436.06 Advances 49015066.50Sundries 120071494.2 Other assets 37433717.42 9Other Sundries 9966024.46 Profit &loss 161706973.2 Account 3 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 85
  • 86. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDCane bills and other 65201661.09payablesTOTAL 931031316.3 TOTAL 931031316.3 3 3 TRADING AND PROFIT & LOSS ACCOUNT AS ON 31-3-2006Expenditure AMOUNT Incomes AMOUNTOpening stock 182458909.0 Sugar sales 281761927.5 0 0 Other sales 205428665.2 5Cost of production 365419503.3 Closing stock 286890978.0 4 0Gross profit 41317359.41Total 589195771.7 Total 589195771.7 5 5Establishment charges 8198563.96 By gross profit 41317359.41Travelling expenses 487622.01 Other income 11971545.7Exp .on vehicle 1547647.76Printing and 683769.76 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 86
  • 87. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDstationeryMeetings &AGM 385579.30ExpensesInterest &Insurance 29539180.87chargesGovt Tax & Other 573.00Social Expenses’ 435704.22Rent rates & Taxes 1978687.76Other management 605143.20ExpBonus for the year 1700000.002006Bonus & Incentive 1618790.00paid- 05Depreciation 2053862.00Net profit 4053781.26TOTAL 53288905.10 TOTAL 53288905.10 PROVISIONAL BALANCE SHEET AS AT 31st MARCH, 2007LIABILITY AMOUNT ASSETS AMOUNTSOURCES OF FUNDS FIXED ASSETSShare capital 104940110.0 Gross block 363487965.6 0 6Reserves and surplus 272212433.6 Less: ------------ BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 87
  • 88. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 2 Depreciation ---LOAN FUNDS Net Block 363487965.6 6Loans Investment 587259.00CURRENT LIABILITIES CURRENT ASSETSWorking capital 3261620.57 Inventories 378981986.2 8Statuary deposits 187080.00 Cash in hand 327612.88Other funds 13747634.18 Cash at bank 3238097.38Deposit payable 8619351.89 Advances 47810043.43Advance from debtors 6317241.93 Receivables 45279858.83 Provisions for 164768060.1 Profit &loss 160527056.4expenses 0 Account 4Other liability 2037609.50Creditor 101250338.1 3TOTAL 1000239879. TOTAL 1000239879. 90 90 TRADING AND PROFIT & LOSS ACCOUNT AS ON 31-3-2007 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 88
  • 89. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDExpenditure AMOUNT Incomes AMOUNTOpening stock 286890978.0 Sugar sales 321102204.0 0 5 Other sales 16883368.02Cost of production 375879489.2 Closing stock 362688371.0 6 0Gross profit 37903469.81Total 700673937.0 Total 700673937.0 7 7Administration 10876604.35 By gross profit 37903469.81Employee costAdministration 7705246.66 Other income 11835306.34ExpensesFinancial Expenses 29337549.35 Other Misc 1401824.00 incomeDepreciation 2041283.00Net profit 1179916.79TOTAL 51140600.15 TOTAL 51140600.15 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 89
  • 90. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD PROVISIONAL BALANCE SHEET AS AT 31st MARCH, 2008LIABILITY AMOUNT ASSETS AMOUNTSOURCES OF FUNDS FIXED ASSETSShare capital 110288173.0 Gross block 371470849.6 0 6Reserves and surplus 274371212.6 Less: ------------ 0 Depreciation ---------LOAN FUNDS Net Block 371470849.6 6Loans 26729775.00 INVESTMENT 1087259.00CURRENT LIABILITIES CURRENT ASSETSWorking capital 277252952.2 Inventories 343915871.1 0 4Statuary deposits 160307605.1 Cash in hand 1446247.76 8Suspense 7820327.58 Cash at bank 5289323.68Deposit 8237656.89 Advances 44575300.80Sundries 120856075.8 other assets 50884269.05 0 Other sundries 61753564.01 Profit &loss 158348240.3 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 90
  • 91. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD Account 4Cane bills and Other 73676864.17 investment 1087259.00payableCreditor ------------ -------TOTAL 977017361.4 TOTAL 977017361.4 3 3 TRADING AND PROFIT & LOSS ACCOUNT AS ON 31-3-2008Expenditure AMOUNT Incomes AMOUNTOpening stock 362688371.0 Sugar sales 334738255.9 0 4 Other sales 14808045.10Cost of production 249243488.4 Work in progress 1893561.00 7Gross profit 60991621.57 Closing stock 321483619.0 0Total 672923481.0 Total 672923481.0 4 4 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 91
  • 92. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTDEstablishment charges 11233553.20 By gross profit 60991621.57Travelling expenses 953442.66 Other income 10365431.00Exp .on vehicle 1668460.99Printing and 834305.94stationeryMeetings &AGM 374096.00ExpensesInterest &Insurance 42150121.77chargesGovt Tax & Other 239482.00Social Expenses’ 233234.86Rent rates & Taxes 1945779.45Other management 3513408.60ExpBonus for the year ------------2007 ---Bonus & Incentive 3873572.00paid- 07Depreciation 2158779.00Net profit 2178816.10TOTAL 71357052.57 TOTAL 71357052.57 PROVISIONAL BALANCE SHEET AS AT 31st MARCH, 2009LIABILITY AMOUNT ASSETS AMOUNTSOURCES OF FUNDS FIXED ASSETSShare capital 110870645.0 Gross block 647506096.7 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 92
  • 93. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD 0 0Reserves and surplus 537014300 Less: ------------ .20 Depreciation ---------LOAN FUNDS Net Block 647506096.7 0Loans 85915406.30 INVESTMENT 600259.00CURRENT LIABILITIES CURRENT ASSETSWorking capital 290699121.2 Inventories 308720081.3 0 7Statuary deposits 20855108.18 Cash in hand 531803.69Suspense 3444808.93 Cash at bank 61187786.16Deposit 8613186.089 Advances 49701553.25sundries 121366173.1 other assets 51695225.44 3 Other sundries 65532462.01 Profit &loss 156695096.4 Account 6Cane bills and Other 32326689.23payableCreditor ------------ -------TOTAL 977017361.4 TOTAL 977017361.4 3 3 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 93
  • 94. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD TRADING AND PROFIT & LOSS ACCOUNT AS ON 31-3-2009Expenditure AMOUNT Incomes AMOUNTOpening stock 323377180.0 Sugar sales 389224030.4 0 2 Other sales 41319463.70Cost of production 340402697.9 Work in progress ----------- 8Gross profit 54414256.14 Closing stock 287650640.0 0Total 718194134.1 Total 718194134.1 2 2Establishment charges 12621652.10 By gross profit 54414256.14Travelling expenses 985614.25 Other income 24316580.24Exp .on vehicle 1830501.57Printing and 672343.25stationeryMeetings &AGM 484440.00ExpensesInterest &Insurance 43032479.08chargesGovt Tax & Other 1616986.78Social Expenses’ 223744.90Rent rates & Taxes 4227787.22Other management 1367794.55ExpBonus & Incentive 4700000.00 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 94
  • 95. FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD2008-09Bonus & Incentive 5015552.80paidDepreciation 298796.00Net profit 1653143.88TOTAL 78730836,38 TOTAL 78730836,38 BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 95

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