A  study  on  financial  &  performance analysis  of acc limited
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A study on financial & performance analysis of acc limited Presentation Transcript

  • 1. A STUDY ON FINANCIAL & PERFORMANCE ANALYSIS OF ACC LIMITED.
    Presented by:
    Vignesh C J
    8uta45
  • 2. HISTORY:
  • 3.
  • 4. ABOUT INDUSTRY
    The Indian cement industry is the second largest market after China.
    Cement industry plays an important role in the process of development of an economy.
    The infrastructural development of a country depends considerably on the growth of cement industry.
    Cement is used as binding material along with bricks, stones, iron and steel in the construction building, bridges, roads, etc..
  • 5. ABOUT COMPANY
    India's foremost manufacturer of cement and concrete.
    spread throughout the country with 14 modern cement factories, more than 30 Ready mix concrete plants, 20 sales offices, and several zonal offices.
    Every factory has pollution control equipment and devices.
    Company has won several prizes and certificates of merits for environmental measures undertaken at its various plants and mines.
    As the largest cement producer in India, it is one of the biggest customers of the Indian Railways.
  • 6. OBJECTIVE OF THE STUDY
    To compute the financial position of the ACC Ltd.,
    To analyze the profitability and solvency position of the firm.
    To analyze the efficiency of the firm through ratios.
    To suggest ways and means to improve the present condition.
    To examine the over all performance of the company.
    To study the future prospect of Indian Cement Industry.
  • 7. FINANCIAL ANALYSIS
    The primary objective is to judge profits and financial soundness of the company.
    The financial analysis are the mirrors, which reflect the financial positions and operating strength or weakness of the concern
    Better understanding of a firm’s position and performance.
    Consist of various ratios.
  • 8. RATIOS USED
    CURRENT RATIO
    The company’s ability to meet current obligations, the current assets must be sufficient to pay current liabilities.
    Current assets *100
    Current liability
    QUICK RATIO
    Quick assets are those assets, which are readily convertible into cash. They include cash and bank balances, bills receivable, debtors, short-term investments.
    current Assets - Inventories
    Current Liability
  • 9. Cont…
    CASH RATIO
    Trade investment or marketable securities are equivalent of cash; they may be included in the computation of cash ratio.
    Cash + Marketable Securities
    Current Liabilities
    NETWORKING CAPITAL RATIO
    The difference between current assets and current liabilities excluding short-term bank borrowing. The larger NWC has the greater ability to meet its current obligations.
    Net Working Capital
    Net Assets
  • 10. Cont…
    DEBTORS TURNOVER RATIO
    The liquidity position of the firm depends on the quality of debtors largely.
    Sales
    Debtors
    DEBTORS COLLECTION PERIOD
    The ratio indicates the extent to which the debts have been collected in time. It gives the average debt collection period
    Debtors
    Sales x 360
  • 11. Cont…
    NET ASSETS TURNOVER RATIO
    Net assets include Net Fixed Assets (NFA) and Net Current Asset (NCA) that is Current Assets (CA) minus Current Liabilities (CL). Sales
    Net assets
    CURRENT ASSETS TURNOVER RATIO
    The firm may wish to know its efficiency of utilizing fixed assets and current assets separately.
    Sales
    Current assets
  • 12. Cont…
    WORKING CAPITAL TURNOVER RATIO
    The ratio indicates the relationship between the sales and working capital and this ratio shows whether the working capital has been efficiency or not.
    Sales
    Network capital
    INVENTORY TURNOVER RATIO
    The efficiency of the firm in producing and selling its product.
    Cost of goods sold
    Average Inventory
  • 13. Cont…
    FIXED ASSETS TURNOVER RATIO
    Indicates whether the investments in fixed assets have been judicious or not. Firms efficiency of utilizing fixed assets.
    Sales
    Net fixed assets
    GROSS PROFIT RATIO
    The difference between sales and the manufacturing cost of goods sold.
    Gross profit
    Sales x 100
  • 14. Cont…
    NET PROFIT RATIO
    Obtained when operating expenses, interest and taxes are subtracted from the gross profit. 
    Net profit
    Salesx 100
    STOCK TO CURRENT ASSETS RATIO
    This ratio establishes the relationship between stock and current assets. This shows low much of current assets are occupied by the stock.
    Stock
    Current Assets
  • 15. Cont…
    SUNDRY DEBTORES TO TURNOVER RATIO
    The relationship between sundry debtors and current assets. Higher ratio indicates the high contribution of sundry debtors towards current assets of the firm.
    Sundry debtors
    Current Assets
    RETURN ON CAPITAL EMPLOYED
    This ratio is also called Return on Investment. It measures the sufficiency or profit in relation to Capital Employed.
    Net Profit
    Capital Employed *100
  • 16. Cont…
    RETURN ON SHAREHOLDERS FUND
    Determines the profitability from the Shareholders point of view.
    Net Profit (After Interest & Tax)
    Shareholders Fund
    RETURN ON CAPITAL TURNOVER RATIO
    Calculate the rate of return on common equity, and is a measure of how well a company uses its stockholders equity to generate revenue.
    Sales
    Capital Employed
  • 17. Cont…
    DEBT EQUITY RATIO 
    Indicates what is the proportion of fixed interest bearing capital taken by the company, as compared to the equity shareholders capital.
    Total debt *100
    Equity
    CAPITAL EMPLOYED TO NET WORK RATIO 
    showsfunds contributed by lenders and owners
     
    Capital Employed (CE)
    Net Worth (NW)
  • 18. Cont…
    EQUITY RATIO
    The ratio of proprietor’s funds to total funds is an important ratio for determining long-term solvency of a firm. The total asset on the other hand denotes total resources of the concern
    Shareholders fund
    Total Assets
    RATIO OF FIXED ASSETS TO PROPRIETORS FUND
    The ratio establishes the relationship between the fixed assets and shareholders funds i.e. the share capital plus reserves, surplus and retained earnings.
    Fixed Assets
    Shareholders fund
  • 19. Cont…
    RATIO OF CURRENT ASSETS TO PROPRIETORS FUND
    The ratio indicates the extent to which proprietors funds are invested in current assets.
     
    Current Assets
    Shareholders funds
  • 20. RATIO ANALYSIS OF ACC CEMENTS
  • 21. Cont…
  • 22. Cont…
  • 23. CHART SHOWING THE RATIO ANALYSIS
  • 24. Cont…
  • 25. Cont…
  • 26. FINDINGS
    Current Ratio shows an average ratio of 1.21which is less than the ideal ratio is 2:1.
    Cash Ratio shows as average greater than its ideal ratio that is 0.5.
    Debtors Turnover Ratio shows the amount of credit sales has been increased, collection period is derived as 18 days.
    In the calculation of Working capital Turnover Ratio there is an adequacy of fund except the year 2007-2008.
    Gross profit ratio is fluctuating during the period of study.
    The company’s Net Profit Margin has declined.
    Capital Employed in the concern has been efficiently utilized
  • 27. CONCLUSION
    The company should maintain quick ratio of 1:1.
    The Debt/Equity ratio is satisfactory during the period of study.
    Company is efficiently utilizing its Fixed Assets and Current Assets in generating sales
    Inventory Turnover ratio implies that the Inventory has been utilized efficiently.
  • 28. THANK YOU !!!