A study on_financial_performance_analysis_of_the_sundaram_finance_ltd

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A study on_financial_performance_analysis_of_the_sundaram_finance_ltd

  1. 1. 1CHAPTER – 1INTRODUCTION
  2. 2. 21 INTRODUCTIONThe financial statement provides the basic data for financial performance analysis. Thefinancial statements provide a summarized view of the financial position and operations of afirm. Financial analysis (also referred to as financial statement analysis or accounting analysis)refers to an assessment of the viability, stability and profitability of a business. The analyst firstidentifies the information relevant to the decision under consideration from the total informationcontained in the financial statements. Therefore, much can be learnt about a firm from a carefulexamination of its financial statements as invaluable documents and performance reports.The analysis of financial statements is an important aid to financial analysis. Theyprovide information on how the firm has performed in the past and what is its current financialposition. Financial analysis is the process of identifying the financial strengths and weakness ofthe firm from the available accounting data and financial statements. The analysis is done byestablishing relationship between the different items of financial statements.The focus of financial analysis is on key figures in the financial statements and thesignificant relationship that exists between them. The analysis of financial statements is a processof evaluating relationship between component parts of financial statements to obtain a betterunderstanding of the firm‟s position and performance.The first task of financial analyst is to select the information relevant to the decisionunder consideration from the total information contained in the financial statement. The secondstep involved in financial analysis is to arrange the information in a way to highlight significantrelationships. The final step is interpretation and drawing of inferences and conclusions. In brief,financial analysis is the process of selection, relation, and evaluation.
  3. 3. 31.1 INDUSTRIAL PROFILE1.1.1 NON-BANKING FINANCIAL COMPANIES (NBFCS)Non-bank financial companies (NBFCs) are financial institutions that providebanking services without meeting the legal definition of a bank, i.e. one that does not hold abanking license. Operations are, regardless of this, still exercised under bank regulation.According to Reserve Bank Amendment of Act 1997, A Non-Banding Financial Company(NBFCs) means,A financial institution which is a companyA non-banking institution which is a company which has its principal business receivingof deposits under any scheme of arrangement or in any other manner or lending in anymannerThe non-banking financial sector in India has tremendous growth in recent years. NBFCs‟attracted a large number of small investors since the rate of return on deposits with them wasrelatively high. NBFCs are quite flexible sectors like equipment leasing, hire-purchase, housingfinance, consumer finance and so on, where gaps between the demand and supply of funds havebeen high. The growth in number of NBFCs was facilitated by the case of entry, limited fixedassets and absence of any need to hold inventories.1.1.2 CURRENT SCENARIO OF NBFCSThe base of today‟s feebleness of Non-Banking Finance Companies can perhaps betraced back to early nineties. The buoyant capital market, in the first flush liberalizationwelcomed every issue with huge premiums and massive over subscription. This was the signalfor several unscrupulous promoters to set up high profile finance companies and raise moneyfrom both the capital markets and through public deposits.The Reserve Bank of India for its past, progressively relaxed its regulatory hold overthe industry and made it possible for the companies with little financial strength and even fewerscrupulous to raise large amounts of money from an unsuspecting public. Hardly anyone knew
  4. 4. 4or questioned how these moneys were deployed. Soon afterward, the stock market scam brokeclaiming its first victim from the non-banking finance companies sector. With the capital marketin disarray, it was no longer possible for continue of fund flow, from investors who had burnttheir fingers in the stock markets. It was thus convenient fresh deposits. In July1996, the RBI,perhaps the most sweeping changes in the non-banking finance companies regulation, virtuallypulled out all the stock, enabling companies to raise deposits with minimum number and moresignificantly, removed the ceiling on interest rate.At the point, when the government was faced with grim situation and responding to theplea of the industry, the government set up a special task force headed by Mr. C.M. Vasudev torecommend the steps for the orderly growth of finance companies while keeping investorprotection as its key priority. The committee in its final report recognized the important roleplayed by these companies and warned against the tendencies to tar all the companies with thesame brush. The silent recommendations of the Vasudev committee wereReview of minimum capital requirement of Rs. 25lakhs for registration purposesHigher capital adequacy ratio for non-banking finance companies seeking public depositswithout credit ratingPreview of prudential norms with ceiling for exposure to real estate and capital marketsDifferential ceiling on public deposit acceptance for companies with and without creditratingsA separate instrument to regulate and supervise non-banking finance companies.1.1.3 ADVANTAGE OF NBFCs1. Lower transaction costs2. Higher rate of interest on deposits compared to banks3. Quick financial decision caking4. Customer orientation5. Prompt provision of services
  5. 5. 51.1.4 RBI GUIDELINES FOR NBFCsThe nineties witnessed a dramatic increase in the number of NBFCs and it was thoughtnecessary to have a regulatory framework for NBFCs. RBI came out with set of guidelines forNBFCs specifically aimed at protecting the depositors.To encourage the NBFCs that is running on sound business principals, on July 24th1996, NBFCs were divided into two classes,i. Equipment leasing and hire purchase (finance company)ii. Loan and investment companies1.1.5 CATEGORIES OF NBFCsi. Loan Companiesii. Investment Companiesiii. Hire Purchase Companiesiv. Equipment Leasing Companiesv. Mutual Benefits Finance Companiesvi. Housing Finance CompaniesEquipment leasing company – Any company, which is a financial institution, carrying on itsprincipal business. The activities of leasing of equipment of the financing of such activity.1. Hire purchase finance company – A company, which is a financial institution, carryingon its principal business, hire purchase transaction.2. Investment Company – A company, which deals with acquisition of securities.3. Loan Company – A company, which is a financial institution and carries on its principalbusiness of providing finance by any activities other than its own.4. Mutual benefit finance company – A company, which is a financial institution. This isnotified by the central government under section 620 (a) of The Companies Act 1956.
  6. 6. 61.2 COMPANY PROFILESundaram Finance Limited was incorporated in 1954 and has grown into one of themost trusted financial services group in India and a part of TV Sundaram Iyengar and Sons groupof companies, one of India‟s largest industrial conglomerates and diversified industrialconglomerate with principal base in Chennai and Madurai. Almost all the companies in thegroup are privately held. The company was started with a paid-up capital of Rs.2Lakhs andlater went public in 1972.1.2.1 FOUNDER OF THE COMPANYThe Company was founded by Sri. T. S. Santhanam. He has a rich experience in theautomobile and road transport sector for nearly six decades. He was the founder, Director andFirst managing director of Sundaram Finance Limited and has served on various committeesconstituted by the Central Government and Reserve Bank of India on various aspects relating togrowth and development of the Road Transport and Non-Banking Financial Companies.The company has been rated as „MAA‟ by the ICRA signifying the highest number ofdeposits. The Company mobilizes its funds from driver sources at competitive rates thusachieving a reduction in overall cost of funds. The company gets its funds from the main sourcesnamely,DepositsBank/Industrial FinanceDebenturesCommercial Papers1.2.2 THE MAIN ACTIVITIES OF SUNDARAM FINANCE LIMITED Deposits Hire Purchasing Leasing
  7. 7. 71.2.3 FIVE PILLARS OF SUNDARAM FINANCE LIMITED1. Faith2. Depositor‟s confidence3. Institutional trust4. Investor safety5. Employee loyalty1.2.4 CORPORATE PHILOSOPHY OF THE COMPANYTruth and fairness guide the management of financeCustomer satisfaction through excellent service and reliabilityPrudence and conservation in finance operationsTruth, honesty and efficiency in all dealingsProfessional management with high standards of integrityFull compliance with law and regulations.1.2.5 OBJECTIVES OF THE COMPANYSundaram Finance was initiated with the sole objective of financing commercialvehicles and passenger cars. Within a span of 55 years they have spread their wings to everyexposable area in the Non-banking finance sector. Sundaram Finance – Where Truth, Fairnessand Transparency guide the management of finance.1.2.6 VALUESA set of values have governed their growth over the years. Among them are transparentin their business practices, dedicated customer service fair, efficient and safe financial policies.1.2.7 STRENGTHSupport of the group companies.Involvement of the directors on major policy matters.High employee morale.Good initial system for operation and control.
  8. 8. 8Efficiency and sophisticated software system for decision support system.Investor‟s trust and faith in the company.Easy financing schemes for all cars – new and second hand cars.Simple documentation, quick processing and speedy approval.Customized schemes, personalized service.Direct dealing between customer and company.No hidden costs.Tailor – made products to suit individual requirements.1.2.8 SUBSIDARIES / GROUPSSundaram FinanceSundaram BNP Paribas Asset ManagementSundaram BNP Paribas Home Finance LimitedRoyal Sundaram Alliance InsuranceSundaram InfoTech SolutionsSundaram Business ServicesSundaram Finance Distribution LimitedInfrieght Logistics Solutions Limited1.2.9 AWARDS RECEIVED„Certificate of Commendation‟ award by the Government of India under the scheme of“Good Tax Payers”.“Second Best Tax Payer” in the category of Private Sector Company for AssessmentYear 1994-95 in Tamil Nadu Region, from the Income Tax Department, Tamil Nadu.„Rolling Trophy‟ by Rotary Club of Madras South West for Best Employer-EmployeeRelationship for the year 1995-96.“Best Tax Payer” in the category of Private Sector Company for Assessment Year 1995-96 in Tamil Nadu Region, from the Income Tax Department, Tamil Nadu.
  9. 9. 9“Automan Award” to Shri T S Santhanam, Chairman, from Motor India in 1998.“Pioneering Service Award” to Shri T S Santhanam Chairman, from Chennai GoodTransport Association.“Sarige Ratna Award” to Shri T S Santhanam, Chairman, from the Bangalore CityLorry Transporting Agents‟ Association (Regd).“Most Valued Customer Award” to Shri T S Santhanam Chairman, from the StateBank of India.“The Best Financier of the New Millennium 2000” to Shri. G K Raman, ManagingDirector, from the All India Motor Transport Congress.
  10. 10. 10
  11. 11. 11NEED, OBJECTIVES AND SCOPE OF THE STUDY2.1 NEED FOR THE STUDYThe Financial Statements are mirror which reflects the financial position and strengths orweakness of the concern. The Non- Banking Financial Company has been witnessed intensecompetition from domestic banks and international banks. Every business needs to view thefinancial performance analysis.The study on effectiveness of operational and financial performance of Sundaram financelimited is conducted to measure the overall performance of company. The financial analysisstrengths the firms to make their best use, and to be able to spot out financial weakness of thefirm to state suitable corrective actions.This study aims at analyzing the overall financial performance of the company by usingvarious financial tools like Comparative Analysis, common size statement analysis, RatioAnalysis, and Cash Flow Analysis.
  12. 12. 122.2 OBJECTIVES OF THE STUDY2.2.1 PRIMARY OBJECTIVE:o To study the financial performance analysis of Sundaram Finance Limited,Chennai.2.2.2 SECONDARY OBJECTIVES:o To compare and analyze the financial statements for the past three financial years(2008,2009 and 2010)o To know the profitability, liquidity and solvency position of Sundaram financelimited.o To compare and interpret financial statements of the Sundaram Finance Limitedwith comparative and common-size statement analysis.o To forecast the annual growth rate of income of the company with the help ofregression analysis.o To provide suggestions for improving the overall finance performance of thecompany.
  13. 13. 132.3 SCOPE OF THE STUDYThe study is based on the accounting information of the SUNDARAM FINANCELIMITED, CHENNAI. The study covers the period of 2008-2010 for analyzing the financialstatement such as income statements and balance sheet.The scope of the study involves the various factors that affect the financial efficiencyof the company. To increase the profit and sales growth of the company. This study finds out theoperational efficiency of the organization and allocation of resources to improve the efficiency ofthe organization.The data of the past three years are taken into account for the study. The performanceis compared within those periods. This study finds out the areas where Sundaram Finance Ltdcan improve to increase the efficiency of its assets and funds employed.
  14. 14. 14CHAPTER – 3LITERATUREREVIEW
  15. 15. 153 LITERATURE REVIEW3.1 REVIEW OF LITERATURELiterature Review was done by referring previous studies, articles and books to knowthe areas of study and analyze the gap or study not done so far. There are various studies wereconducted relating to operational performance of the company from which most relevantliteratures were reviewed.Kennedy and Muller (1999), has explained that “The analysis and interpretation of financialstatements are an attempt to determine the significance and meaning of financial statements dataso that the forecast may be made of the prospects for future earnings, ability to pay interest anddebt maturines (both current and long term) and profitability and sound dividend policy.”T.S.Reddy and Y. Hari Prasad Reddy (2009), have stated that “The statement disclosing statusof investments is known as balance sheet and the statement showing the result is known as profitand loss account”Peeler J. Patsula (2006), he define that a sound business analysis tells others a lot about goodsense and understanding of the difficulties that a company will face. We have to make sure thatpeople know exactly how we arrived to the final financial positions. We have to show thecalculation but we have to avoid anything that is too mathematical. A business performanceanalysis indicates the further growth and the expansion. It gives a physiological advantage to theemployees and also a planning advantage.I.M.Pandey (2007), had stated that the financial statements contain information about thefinancial consequences and sources and uses of financial resources, one should be able to saywhether the financial condition of a firm is good or bad; whether it is improving or deteriorating.One can relate the financial variables given in financial statements in a meaningful way whichwill suggest the actions which one may have to initiate to improve the firm‟s financial condition.Chidambaram Rameshkumar & Dr. N. Anbumani (2006), he argue that Ratio Analysisenables the business owner/manager to spot trends in a business and to compare its performance
  16. 16. 16and condition with the average performance of similar businesses in the sameindustry. To do this compare your ratios with the average of businesses similar to yours andcompare your own ratios for several successive years, watching especially for any unfavorabletrends that may be starting. Ratio analysis may provide the all-important early warningindications that allow you to solve your business problems before your business is destroyed bythem.Jae K.Shim & Joel G.Siegel (1999), had explained that the financial statement of an enterprisepresent the raw data of its assets, liabilities and equities in the balance sheet and its revenue andexpenses in the income statement. Without subjecting these to data analysis, many fallaciousconclusions might be drawn concerning the financial condition of the enterprise. Financialstatement analysis is undertaken by creditors, investors and other financial statement users inorder to determine the credit worthiness and earning potential of an entity.Susan Ward (2008), emphasis that financial analysis using ratios between key values helpinvestors cope with the massive amount of numbers in company financial statements. Forexample, they can compute the percentage of net profit a company is generating on the funds ithas deployed. All other things remaining the same, a company that earns a higher percentage ofprofit compared to other companies is a better investment option.M Y Khan & P K Jain (2011), have explained that the Financial statements provide asummarized view of the financial position and operations of a firm. Therefore, much can belearnt about a firm from a careful examination of its financial statements as invaluabledocuments / performance reports. The analysis of financial statements is, thus, an important aidto financial analysis.Elizabeth Duncan and Elliott (2004), had stated that the paper in the title of efficiency,customer service and financing performance among Australian financial institutions showed thatall financial performance measures as interest margin, return on assets, and capital adequacy arepositively correlated with customer service quality scores.Jonas Elmerraji (2005), tries to say that ratios can be an invaluable tool for making aninvestment decision. Even so, many new investors would rather leave their decisions to fate than
  17. 17. 17try to deal with the intimidation of financial ratios. The truth is that ratios arent that intimidating,even if you dont have a degree in business or finance. Using ratios to make informed decisionsabout an investment makes a lot of sense, once you know how use them.Carlos Correia (2007), had explained that any analysis of the firm, whether by management,investors, or other interested parties, must include an examination of the company‟s financialdata. The most obvious and readily available source of this information is the firm‟s annualreport. The financial statements shall, in conformity with generally accepted accounting practice,fairly present the state of the affairs of the company and the results of operations for the financialyear.Greninger et al.(1996), identified and refined financial ratios using a Delphi study in the areasof liquidity, savings, asset allocation, inflation protection, tax burden, housing expenses and,insolvency. Based on the Delphi findings, they proposed a profile of financial well-being for thetypical family and individual.Rachchh Minaxi A (2011), have suggested that the financial statement analysis involvesanalyzing the financial statements to extract information that can facilitate decision making. It isthe process of evaluating the relationship between component parts of the financial statements toobtain a better understanding of an entity‟s position and performance.Salmi, T. and T. Martikainen (1994), in his "A review of the theoretical and empirical basis offinancial ratio analysis", has suggested that A systematic framework of financial statementanalysis along with the observed separate research trends might be useful for furthering thedevelopment of research. If the research results in financial ratio analysis are to be useful for thedecision makers, the results must be theoretically consistent and empirically generalizable.John J.Wild, K.R.Subramanyam & Robert F.Halsey (2006), have said that the financialstatement analysis is the application of analytical tools and techniques to general-purposefinancial statements and related data to derive estimates and inferences useful in businessanalysis. Financial statement analysis reduces reliance on hunches, guesses, and intuition forbusiness decisions. It decreases the uncertainty of business analysis.
  18. 18. 18CHAPTER – 4RESEARCHMETHODOLOGY
  19. 19. 194. RESEARCH METHODOLOGYResearch can be defined as “A Scientific and Systemic Search for pertinentinformation on a specific topic”. Therefore, research could be understood as an organizedactivity with specific objectives on a problem or issues supported by compilation of related dataand facts, involving application of relevant tools of analysis and deriving logically on originality.4.1 RESEARCH DESIGNResearch Design is the arrangement of condition for collection and analysis of data inmanner that aims to combine relevance to the research purpose with the economy in procedure.Research Design is important primarily because of the increased complexity in the market aswell as marketing approaches available to the researchers. A research design specifies themethods and procedures for conducting a particular study.4.2 TYPE OF RESEARCHANALYTICAL RESEARCHIn this type of research has to use facts or information already available, and analyzethese to make a critical evaluation of the material. The researcher depends on existing data forhis research work. The analysis revolves round the material collected or available.4.3 SOURCE OF DATA SECONDARY DATASecondary Data refers to the information or facts already collected such data are collected withthe objectives of understanding the past status of any variable or the data collected and reportedby some source is accessed and used for the objective of a study. Normally in research, thescholars collect published data, journals, annual reports and websites.
  20. 20. 204.4 TOOLS USED FOR ANALYSIS(1) Ratio Analysis(2) Comparative Statement Analysis(3) Common-size Statement Analysis(4) Cash Flow Statement Analysis(5) Regression Analysis4.4.1 RATIO ANALYSISA ratio is the process of determining and presenting the relationship of items and groups of itemsin the financial statements. The ratios can be classified into the following types:4.4.1.1 PROFITABILITY RATIOProfitability Ratio measured as a ability to make maximum profit from optimum utilization ofresources by a business concern is termed as profitability.o GROSS PROFIT RATIOThis ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit Ratio includesthe difference between sales and direct costs.Gross Profit Ratio = ( Gross Profit / Net Sales ) * 100o NET PROFIT RATIOIt measures of management efficiency in operating the business successfully from the owner‟spoint of view. Higher the ratio better is the operational efficiency of business concern.Net Profit Ratio = ( Net Profit After Tax / Net Sales ) * 100
  21. 21. 21o RETURN ON EQUITY OR RETURN ON NET WORTHThis ratio signifies the return on equity shareholders funds. The profit considered for computingthe ratio is taken after payment of preference dividend.Return on Equity = ( Net Profit After Interest And Tax / Shareholder’s funds ) * 1004.4.1.2 ACTIVITY RATIO OR TURNOVER RATIOS:Activity ratios highlight the operational efficiency of the business concern. The term operationalefficiency refers to effective, profitable and rational use of resources available to the concern.o WORKING CAPITAL TURNOVER RATIOWorking capital ratio measures the effective utilization of working capital. It also measures thesmooth running of business. The ratio establishes relationship between cost of sales and workingcapital.Working Capital Turnover Ratio = ( Sales / Net Working Capital )o CAPITAL TURNOVER RATIOManagerial efficiency is also calculated by establishing the relationship between cost of sales orsales with the amount of capital invested in the business.Capital Turnover Ratio = (Sales / Capital Employed)o FIXED ASSET TURNOVER RATIOThis ratio determines efficiency of utilization of fixed assets and profitability of a businessconcern.Fixed Asset Turnover Ratio = (Sales / Net Fixed asset)
  22. 22. 224.4.1.3 SOLVENCY OR FINANCIAL RATIOSSolvency or Financial Ratios include all ratios which express financial position of the concern.The term financial position generally refers to short-tem and long-term solvency of the businessconcern, including safety of different interested parties.o CURRENT RATIOIn order to measure the short-term liquidity or solvency of a concern, comparison of currentassets and current liabilities is inevitable. Current ratio indicates the ability of a concern to meetits current obligations as and when they are due for payment.Current Ratio = ( Current asset / Current liabilities )o DEBT EQUITY RATIOThe debt equity ratio is determined to ascertain the soundness of the long term financial policiesof the company and also to measures the relatives‟ proposition of outsider‟s funds andshareholders funds investments in the company.Debt-Equity Ratio = ( Total Long-term Debt / Shareholder’s Funds )o DEBT TO TOTAL FUNDS RATIOThis ratio gives same indication as the debt equity ratio as this is a variation of debt equity ratio.This ratio is the relationship between long term debts and total long term funds.Debt to Total Funds Ratio = ( Long-term Debt / Total Funds)o EQUITY TO TOTAL FUNDSEquity to total funds explains the relationship between equity and total funds.Equity to Total Funds = ( Equity / Total Funds)
  23. 23. 234.4.2 COMPARATIVE STATEMENT ANALYSISComparative balance sheet as on two or more different dates can be used for comparingassets and liabilities and findings out any increase or decrease in the items. Thus while in singlebalance sheet the emphasis is on present position, it is on change in the comparative balancesheet.4.4.3 COMMON SIZE STATEMENT ANALYSISCommon size statements indicate the relationship of various items with some commonitems. In the income statements, the sales figure is taken as basis and all other figures areexpressed as percentage of sales. Similarly, in the balance sheet the total assets and liabilities istaken as base and all other figures are expressed as percentage of this total.4.4.4 CASH FLOW STATEMENTCash flow includes cash inflows and out flows - cash receipts and cash payments during aperiod. A cash flow statement is a statement which portrays the changes in the position betweentwo accounting period. Cash flow analysis can reveal the causes for even highly profitable firmsexperiencing acute cash shortages.4.4.5 REGRESSION ANALYSISA fundamental and versatile research technique that seeks to explain an outcome variablein terms of multiple predictor variables. This analysis reveals the nature and strength of therelationship between each predictor variable and the outcome, independent of the influence fromall other predictors.Regression Equation Y on X is given as:Y = a + bXEquations to find constants „a‟ and „b‟ are given as:∑Y = Na + b∑X∑XY = a∑X + b
  24. 24. 24CHAPTER - 5DATA ANALYSIS ANDINTERPRETATION
  25. 25. 255 DATA ANALYSIS AND INTERPRETATION5.1 RATIO ANALYSIS5.1.1 PROFITABILITY RATIOS5.1.1.1 Gross Profit Ratio:This ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit Ratioincludes the difference between sales and direct costs.Gross ProfitGross Profit Ratio = X100Net SalesTable No 5.1.1 GROSS PROFIT RATIOYears Gross Profit(Rs.)Net sales(Rs.)Ratio(In %)2007-2008 30289.71 90176.44 33.582008-2009 21971.03 108277.62 20.292009-2010 32347.63 118189.37 27.37Chart No 5.1.1 GROSS PROFIT RATIOINFERENCES:The Gross Profit for the financial year 2007-2008 was recorded as per the ratio is33.58%, where as the years between 2008-2009 went through a change in the ratio of 20.29%and the companies profit went upward in 2009-2010 with the ratio of 27.37%. Thus, it isshowing the steady growth in the company profile.0102030402007-2008 2008-2009 2009-2010RATIO(INPERCENTAGE)YEARS
  26. 26. 265.1.1.2 NET PROFIT RATIOIt measures of management efficiency in operating the business successfully from theowner‟s point of view. It indicates the return on shareholder‟s investment. Higher the ratio betteris the operational efficiency of business concern.Net Profit after TaxNet Profit Ratio = X 100Net SalesTable No 5.1.2 NET PROFIT RATIOYears Net Profit(Rs.)Net sales(Rs.)Ratio(In %)2007-2008 21254.24 90176.44 23.562008-2009 15073.14 108277.62 13.922009-2010 22674.86 118189.37 19.18Chart No 5.1.2 NET PROFIT RATIOINFERENCES:The Net Profit Ratio depicts that the company had a good profit in 2007-2008 where ithad a good yield profit. Comparing to the year 2008-2009 is 13.92%, the sales of the companyhave a steady attitude and increase upwards to 19.18%. This indicates that there is animprovement in the operational efficient of the business and it leads to the increase in theprofitability of the firm.05101520252007-2008 2008-2009 2009-2010RATIO(INPERCENTAGE)YEARS
  27. 27. 275.1.1.3 RETURN ON EQUITY OR RETURN ON NET WORTHThis ratio signifies the return on equity shareholders funds. The profit considered for computingthe ratio is taken after payment of preference dividend.Net profit after interest and taxReturn on Equity = X 100Shareholder fundTable No 5.1.3 RETURN ON EQUITYYears Net profit afterinterest and tax(Rs.)ShareholderFund (Rs.)Ratio(In %)2007-2008 21254.24 231280.81 9.182008-2009 15073.14 268538.97 5.612009-2010 22674.86 333318.07 6.80Chart No 5.1.3 RETURN ON EQUITYINFERENCES:Return on shareholder fund determines the profitability from the shareholders point ofview. From the above, it shows that in the year 2008-2009, the company shows 5.61% of ratioand it has risen to 6.80%. This is a clear indication of overall operation is efficient.02468102007-2008 2008-2009 2009-2010RATIO(INPERCENTAGE)YEARS
  28. 28. 285.1.2 TURNOVER RATIO5.1.2.1 WORKING CAPITAL TURNOVER RATIOWorking capital ratio measures the effective utilization of working capital. It alsomeasures the smooth running of business. The ratio establishes relationship between cost of salesand working capital.SalesWorking Capital Turnover Ratio =Net Working CapitalTable No 5.1.4 WORKING CAPITAL TURNOVER RATIOYears Sales(Rs.)Net Working Capital(Rs.)Ratio(In Times)2007-2008 90176.44 645733.44 0.132008-2009 108277.62 666319.18 0.162009-2010 118189.37 898497.54 0.13Chart No 5.1.4 WORKING CAPITAL TURNOVER RATIOINFERENCES:A higher ratio is the indication of lower investment of working capital and more profit.In 2007-2008, the sales of the company are low at 0.13 times but in the year 2008-2009, it goneupward of sales to 0.16 times.00.050.10.150.22007-2008 2008-2009 2009-2010RATIO(INTIMES)YEARS
  29. 29. 295.1.2.2 CAPITAL TURNOVER RATIOManagerial efficiency is also calculated by establishing the relationship betweencost of sales or sales with the amount of capital invested in the business.SalesCapital Turnover Ratio =Capital EmployedTable No 5.1.5 CAPITAL TURNOVER RATIOYears Net Sales(Rs.)Capital Employed(Rs.)Ratio(In Times)2007-2008 90176.44 536009.27 0.162008-2009 108277.62 533288.26 0.202009-2010 118189.37 720052.92 0.17Chart No 5.1.5 CAPITAL TURNOVER RATIOINFERENCES:In the year 2007-2008, the sales‟ comparing to 2008-2009 it is increased to 0.20 times andit shows that efficient methods are adopted to use the capital employed. In 2009-2010, whichcompares to the year 2007-2008 it indicates higher ratio of 0.17 times. The capital of thecompany has utilized efficiently comparing to 2007-2008.00.050.10.150.20.252007-2008 2008-2009 2009-2010RATIO(INTIMES)YEARS
  30. 30. 305.1.2.3 FIXED ASSET TURNOVER RATIOThis ratio determines efficiency of utilization of fixed assets and profitability of abusiness concern.SalesFixed Asset Turnover Ratio =Net Fixed assetTable No 5.1.6 FIXED ASSET TURNOVER RATIOYears Sales(Rs.)Fixed Asset(Rs.)Ratio(In Times)2007-2008 90176.44 17264.30 5.222008-2009 108277.62 20241.05 5.352009-2010 118189.37 23237.80 5.09Chart No 5.1.6 FIXED ASSET TURNOVER RATIOINFERENCES:Higher the ratio is more than the efficiency in utilization of Fixed Assets. Lower ratioindicates the under utilization of fixed assets. From the above table it indicates in the year 2008-2009, the sales have been increased comparing to the next year 2009-2010. And it‟s graduallydeclining over the next year 2009-2010 for 5.09 times.4.9555.055.15.155.25.255.35.355.42007-2008 2008-2009 2009-2010RATIO(INTIMES)YEARS
  31. 31. 315.1.3 SOLVENCY OR FINANCIAL RATIOS:5.1.3.1 CURRENT RATIOIn order to measure the short-term liquidity or solvency of a concern, comparison ofcurrent assets and current liabilities is inevitable. Current ratio indicates the ability of a concernto meet its current obligations as and when they are due for payment.Current assetCurrent Ratio =Current liabilitiesTable No 5.1.7 CURRENT RATIOYears Current Asset(Rs.)Current Liabilities(Rs.)Ratio(In Times)2007-2008 56187.53 53034.57 1.062008-2009 68876.04 50360.94 1.362009-2010 166489.36 55084.13 3.02Chart No 5.1.7 CURRENT RATIOINFERENCES:A high current ratio is an assurance that the firm will have adequate funds to payscurrent liabilities and other payment. During the year 2009-2010, the current ratio is 3.02 timesand it is more when compared with previous year 2008-2009 is 1.36 times.00.511.522.533.52007-2008 2008-2009 2009-2010RATIO(INTIMES)YEARS
  32. 32. 325.1.3.2 DEBT EQUITY RATIOThe debt equity ratio is determined to ascertain the soundness of the long termfinancial policies of the company and also to measures the relatives‟ proposition of outsider‟sfunds and shareholders funds investments in the company.Total Long-term debtDebt Equity Ratio =Shareholders FundsTable No 5.1.8 DEBT EQUITY RATIOChart No 5.1.8 DEBT EQUITY RATIOINFERENCES:From the above table, during the year 2007-2008 the debt equity ratio is 4.13 times and it isdecreased to 3.62 times then it shows the uptrend from the year 2009-2010 as 4.47 times.Suggest that the debt from the company has increased over the years with increase in shareholderfunds as well.Years Long term debts(Rs.)Shareholders funds(Rs.)Ratio(In Times)2007-2008 431716.93 104292.34 4.132008-2009 418021.26 115267 3.622009-2010 588417.27 131635.65 4.470123452007-2008 2008-2009 2009-2010RATIO(INTIMES)YEARS
  33. 33. 335.1.3.3 DEBT TO TOTAL FUNDS RATIOThis ratio gives same indication as the debt equity ratio as this is a variation of debtequity ratio. This ratio is also known as solvency ratio. This ratio is the relationship between longterm debts and total long term funds.Long Term DebtsDebt to Total Funds Ratio =Total FundsTable No 5.1.9 DEBT TO TOTAL FUNDS RATIOYears Long Term Debts(Rs.)Total Funds(Rs.)Ratio(In Times)2007-2008 431716.93 712389.16 0.602008-2009 418021.26 742843.84 0.562009-2010 588417.27 981013.79 0.59Chart No 5.1.9 DEBT TO TOTAL FUNDS RATIOINFERENCES:During the year 2007-2008, the debt to total funds ratio is 0.60 times and it wasdecreased. And in 2009-2010 again it had an increase in the company‟s sales comparing toprevious year 2008-2009 is 0.56 times to 0.59 times in 2009-2010.0.540.550.560.570.580.590.60.612007-2008 2008-2009 2009-2010RATIO(INTIMES)YEARS
  34. 34. 345.1.3.4 EQUITY TO TOTAL FUNDSEquity to total funds explains the relationship between equity and total funds.EquityEquity to Total Funds =Total FundsTable No 5.1.10 EQUITY TO TOTAL FUNDSYears Equity(In Rs.)Total Funds(In Rs.)Ratio(In Times)2007-2008 104292.34 712389.16 0.142008-2009 115267.00 742843.84 0.152009-2010 131635.65 981013.79 0.13Chart No 5.1.10 EQUITY TO TOTAL FUNDSINFERENCES:In the year 2007-2008, the total funds was Rs.712389.16 (in lakhs) and it showsupward trend of Rs.981013.79 (in lakhs) and during the year 2009-2010 comparing to the year2008-2009 is Rs.742843.84 (in lakhs).0.120.1250.130.1350.140.1450.150.1552007-2008 2008-2009 2009-2010RATIO(INTIMES)YEARS
  35. 35. 355.2.1 COMPARATIVE INCOME STATEMENT OF SUNDARAM FINANCE LIMITEDFOR THE YEAR ENDED 31.03.2010Particulars 2009(Rs.)2010(Rs.)Amount Increase /Decrease during2009-2010 (Rs.)PercentageIncrease / Decreaseduring2009-2010 (In %)Income from OperationLess: Financial ExpenseGross Profit (A)Other Income:Profit on Sale of SharesOther IncomeTotal (B)Total Income(A+B) = CExpense:Operating Expense:Administration ExpenseEstablishment ExpenseProvisionDepreciationTotal OperatingExpense (D)Operating Profit(C-D)Non-Operating Expense:TaxationTotal Non-OperatingExpense (F)Net Profit (E-F)108277.6264544.0943733.53-3199.283199.2846932.817160.919407.974616.803776.1024961.7821971.036897.896897.8915073.14118189.3763379.5554809.822538.904142.576681.4761491.296042.2710011.238608.594481.5729143.6632347.639672.779672.7722674.86+9911.75(1164.54)+11076.29-+943.29+3482.1914558.48(1118.64)+603.26+3991.79+705.47+4181.88+10376.6+2774.88+2774.88+7601.72+9.15(1.80)+25.33-+29.48+108.84+134.17(15.62)+6.41+86.46+18.68+16.75+47.23+40.23+40.23+50.43
  36. 36. 36INFERENCES:The comparative income statement shows income from operation amount increase duringthe year 2009-2010 was Rs.9911.75 and increase in percentage of 9.15.For the year 2009-2010, the total income indicates Rs.14558.48 and percentage increaseduring the year 2009-2010 was 134.17.The operating profit has been increased is Rs.32347.63 in the year 2010 which iscomparing to the previous year was Rs.21971.03 and the percentage shows increase by 47.23.The Net profit amount increases during 2009-2010 is Rs. 7601.72 and shows percentageincrease by 50.43.
  37. 37. 375.2.2 COMPARATIVE BALANCE SHEET OF SUNDARAM FINANCE LIMITED FORTHE YEAR ENDED 31.03.2010Particulars2009(Rs.)2010(Rs.)Amount Increase /Decrease during2009-2010(Rs.)PercentageIncrease /Decrease during2009-2010 (In %)Assets:Current AssetsLoans & AdvanceDeferred Tax AssetInvestmentFixed AssetTotal AssetLiabilities andCapital:Current LiabilityUnsecured LoanSecured LoanTotal Liabilities(A)Capital andReserve:Share CapitalReserve & StockOptionsTotalShareholdersFunds (B)Total Liabilitiesand Capital (A+B)68876.04653955.775691.3651188.8720241.05799953.0958478.77208479.20417728.12684686.095555.19109711.81115267.00799953.09==========166489.36799363.966124.4053744.8023237.801048960.3267946.53260960.87588417.27917324.675555.19126080.46131635.651048960.32==========+97613.32+145408.19+433.04+2555.93+2996.75+249007.23+9467.76+52481.67+170689.15+232638.58-+16368.6516368.65249007.23=============+141.72+21.98+7.61+4.99+14.80+31.13+16.19+25.17+40.86+33.98-+14.92+14.20+31.13=============
  38. 38. 38INFERENCES:In the year 2009-2010, the investment it shows the uptrend for the year 2010 asRs.53744.80 and it has increased by 4.99%.Fixed assets has been increased was Rs.23237.80 in the year 2010 which is comparing tothe previous year and the percentage shows increase by 14.80.During the year 2009, the shareholders fund amount to Rs.115267.00 it has been increasedto the amount of Rs. 131635.65 and percentage increased was 14.20.Secured loans shows uptrend by Rs.588417.27 over the previous year of Rs.417728.12 andincrease in percentage of 33.98.
  39. 39. 395.3.1 COMMON SIZE INCOME STATEMENT OF SUNDARAM FINANCE LIMITEDFOR THE YEAR ENDED 31.03.2009Particulars2008 2009Amount(Rs.)Percentage(%)Amount(Rs.)Percentage(%)Income from OperationLess: Financial ExpenseGross Profit (A)Other Income:Profit on Sale of SharesOther IncomeTotal (B)Total Income(A+B) = CExpense:Operating Expense:Administration ExpenseEstablishment ExpenseProvisionDepreciationTotal OperatingExpense (D)Operating Profit(C-D) = ENon-Operating Expense:TaxationTotal Non-OperatingExpense (F)Net Profit (E-F)90176.4449699.5240476.92-3199.283199.2843676.207198.818821.903308.023012.1922340.9221335.289035.479035.4712299.8110055.144.88-3.543.5448.437.989.783.663.3424.7723.6510.0110.0113.63108277.6264544.0943733.53-3199.283199.2846932.817160.919407.974616.803776.1024961.7821971.036897.896897.8915073.1410059.640.39-2.952.9543.346.618.684.263.4823.0520.296.376.3713.92
  40. 40. 40INFERENCES:The operating profit of the Sundaram Finance Limited has been increased during theyear 2008-2009, the operating profit shows Rs.21335.28 in 2008 and Rs.21971.03 in thefinancial year 2009.For the year 2008, the establishment expense shows Rs.8821.90 and it has beenincreased to Rs.9408.97 during the year 2009.In 2008, provision is 3.66% and it indicates increase during the year 2009 was 4.26%.The operating expenses incurred to the Sundaram Finance Limited during the financialyear 2008 which shows Rs.22340.92 and it has risen to Rs.24961.78 during the financial year2009.The net profit percentage recorded as 13.63 in 2008 where as in the year 2009 thecompanies profit went upward with the percentage of 13.92.
  41. 41. 415.3.2 COMMON SIZE BALANCE SHEET OF SUNDARAM FINANCE LIMITED FORTHE YEAR ENDED 31.03.2009Particulars2008 2009Amount(Rs.)Percentage(%)Amount(Rs.)Percentage(%)Assets:Current AssetsLoans & AdvanceDeferred Tax AssetInvestmentFixed AssetTotal AssetLiabilities andCapital:Current LiabilityUnsecured LoanSecured LoanTotal Liability (A)Capital and Reserve:Share CapitalReserve & StockOptionsTotal ShareholdersFunds (B)Total Liabilities andCapital (A+B)56187.53652655.004263.6745645.5017264.30776016.0063626.84176379.89431716.93671723.662777.60101514.74104292.34776016.00==========7.2484.100.545.882.22100===========8.1922.7255.6386.560.3513.0813.43100===========68876.04653955.775691.3651188.8720241.05799953.0958478.77208479.20417728.12684686.095555.19109711.81115267.00799953.09============8.6181.740.716.392.53100=============7.3126.0652.2185.590.6913.7114.40100=============
  42. 42. 42INFERENCES:The current assets have increased during the financial year 2009 is 8.61% which iscomparing to 2008 was 7.24% of the Sundaram Finance Limited.There was an increase in fixed assets of Rs.20241.05 comparing to the year 2009. Higherthe ratio is more than the efficiency in utilization of fixed assets.The current liabilities have been decreased to 7.31% of the total liabilities of theSundaram finance Limited during the year 2009. The current liability was 8.91% of the totalliabilities during the year 2008.Reserves and stock options has been increased was in the year 2009 which isRs.109711.81 comparing to the previous year and the percentage shows increase by 13.71%.During the year 2008-2009, the shareholders fund amount to Rs.104292.34, it has beenincreased to the amount of Rs.115267 and the percentage increased was 14.40% in 2009.
  43. 43. 435.4 CASH FLOW STATEMENT OF SUNDARAM FINANCE LIMITED FOR THEYEAR ENDED 31.3.2010Particulars 2009-2010(In Rs.)(A)CASH FLOW FROM OPERATING ACTIVITIESNet ProfitAdd: Lease Equalization AccountProvision for Taxation (Including Wealth Tax)Add: Financial ExpensesDepreciationProvision against InvestmentsProvision against Non - Performing assetsGeneral Provisions on Standard AssetsEmployee Stock Option Compensation Expenses(Profit) loss on sale of assets(Profit) loss on sale of InvestmentsInterest / Dividend IncomeEffect of Foreign Exchange rates on Cash and Cash Equivalents,netOPERATING PROFIT BEFORE WORKING CAPITALCHANGESIncrease in Net Stock on hireDecrease in Leased assets - net of salesIncrease in Trade Bills purchasedDecrease in Net Investment in LeaseDecrease in Loans and AdvancesIncrease in Other ReceivablesDecrease in Bank Deposits (net)Decrease in SLR Investments - net of salesIncrease in Current LiabilitiesCash generated from OperationsFinancial ExpensesDirect Taxes PaidNET CASH FROM OPERATING ACTIVITIES (A)B) CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed AssetsSale of Fixed AssetsPurchase of InvestmentsPurchase of Investments in Subsidiaries/Joint VentureSale of InvestmentsInterest ReceivedDividend ReceivedNET CASH FROM INVESTING ACTIVITIES (B)226,74.86(91.85)96,72.77322,55.78633,79.5567,08.38(60,87.57)15,44.60(32.25)(1465,04.17)13.29(1079,89.81)(22,40.77)32,87.01(619,43.37)(90,05.16)956,35.3345,80.231,44.644,79.9831,61.6923.2834.21(53,36.95)(22,00.38)0.18965,22.21(709,48.53)(2257,27.61)(15,38.40)96.09(12677,85.28)(18,33.50)12746,00.342.7521,97.6557,39.65
  44. 44. 44C) CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issue of DebenturesDebentures RedeemedIncrease (Decrease) in Long Term BorrowingsIncrease (Decrease) in Fixed DepositsIncrease (Decrease) in Short Term Loans and AdvancesDividend paid (including Corporate Dividend Tax)NET CASH FROM FINANCING ACTIVITIES (C)D) Effect of Foreign Exchange rates on Cash and CashEquivalents, net (D)NET INCREASE IN CASH AND CASH EQUIVALENTS(A)+(B)+(C)+(D)CASH AND CASH EQUIVALENTS AT THE BEGINNINGOF THE YEARCASH AND CASH EQUIVALENTS AT THE END OF THEYEARCOMPONENTS OF CASH AND CASH EQUIVALENTSAT THE END OF THE YEARCurrent Account with BanksCash, Stamps and Stamp Papers on Hand3475,75.18(2686,00.00)869,13.98154,84.84417,96.83(53,51.34)2178,19.49(0.18)(21,68.65)48,39.3526,70.7013,50.1313,20.5726,70.70
  45. 45. 45INFERENCES:In the year 2009-2010, the operating profit before working capital changes show theprofit amount of Rs.96522.The employee stock option compensation expenses of the Sundaram finance Limitedhas shown 31,61.69 (Rs. in lakhs) during the year 2009-2010.While the Net Cash from investing activities depicts Rs.5739.65 in the year 2009-2010.There was a increase in net stock on hire during the financial year 2009-2010 of67,08.38 (Rs. in lakhs).The financial year 2009-2010 depicts the Net cash from financing activities amount ofRs.217819.49 shows upward profit in the company.Cash and cash equivalents at the end of the year were Rs.4839.35 it shows that thecompany position in the year 2009-2010.
  46. 46. 465.5 REGRESSION ANALYSIS FOR SALESYear XSalesRs( in Lakhs )YXY X22008 ─1 90176.44 ─ 90176.44 12009 0 108277.62 0 02010 1 118189.37 118189.37 1Total ∑x = 0 ∑y= 316643.43 ∑x y= 28012.93 ∑ X2=2∑ Y = N a + b ∑ X∑ XY = a ∑ X + b ∑ X2Y = a + b X3 a + 0 b = 316643.43 --------------- ( 1 )0 a + 2 b = 28012.93 --------------- ( 2 )Solving ( 1 ) and ( 2 ) We get,a = 105547.81b = 14006.46When X = 2, Y2011 = 105547.81 + 14006.46( 2 )Y2011 = Rs. 133560.73 ( in Lakhs )When X = 3, Y2012 = 105547.81 + 14006.46( 3 )Y2012 = Rs. 147567.19 ( in Lakhs )
  47. 47. 47INFERENCE:The net sales during the year 2008 were 90176.44 (Rs. in Lakhs) which has beenincreased to 108277.62 (Rs. in Lakhs) during 2009 which also raised to 118189.37 (Rs. inLakhs) during 2010.The projection is made for the fore coming years 2011 and 2012 where the net saleswould be 133560.73 (Rs. in Lakhs) during the year 2011 and the net sales during the financialyear 2012 will be 147567.19 (Rs. in Lakhs).
  48. 48. 48CHAPTER - 6CONCLUSIONANDSUGGESTIONS
  49. 49. 496 SUMMARY AND CONCLUSION6.1 FINIDNGSThe Gross Profit Ratio shows that increasing in sales has maintained the companies profitlevel. In the year 2008-2009, the percentage shows 20.29 it has been increased during theyear 2009-2010 to 27.37.The net profit ratio has been increased to 19.18 during the financial year 2009 – 2010 to13.92 during 2008 – 2009 which indicates that there is an improvement in the operationalefficient of the business and it leads to the increase in the profitability of the firm.It has found that the return on equity during the year 2008-2009, the company shows5.61% of ratio and it has risen to 6.80%. This is a clear indication of overall operation isefficient.The Working capital in the year 2008-2009, the sales of the company is low atRs.666319.18 and it is increased to Rs.898497.54 in 2009-2010. It measures the effectiveutilization of working capital.The capital turnover of capital employed in the financial year 2008-2009 it showsRs.533288.26 and during the year 2009-2010 it is increased to Rs.720052.92. It haseffective utilization of capital employed under the current year.Fixed asset turnover shows increase in sales of Rs.118189.37 comparing to the previousyear of Rs. 108277.62 and the firm should maintain this increasing trend in future also.During the year 2009-2010, the current ratio is 3.02% and it is more when compared withprevious year 2008-2009 is 1.36 %. So the short term liquidity of a concern, comparisonof current assets and current liabilities is inevitable.
  50. 50. 50The debt equity ratio has shows 3.62% in 2008-2009 and it has been raised to 4.47%during 2009-2010 which indicates that the company has increased over the years withincrease in shareholder funds as well.It is found that the shareholders funds had increased by Rs.16368.65 over the percentageof 14.20 in comparative income statement analysis. It determines the profitability fromthe shareholders point of view.The financial year 2009-2010 depicts the Net Cash from financing activities amount ofRs.217819.49 shows upward profit in the company.
  51. 51. 516.2 SUGGESTIONSThe current ratio is improving rapidly so the company wants to keep an eye on thecurrent assets flow. The company has been suggested to reduce the expenditure as it increasesevery year. Decrease in expenses will increase the profitability.By over viewing the working capital turnover ratio it is clear that the companywants to utilize its working capital efficiently that is the excess current assets should be adjustedaccording to current scenario. Though the net profit shows it is increased but we found that thenet profit ratio has been decreased. So the company should consider increasing the sales in turnto increase the actual profit.The debt equity ratio of the company is also increasing. The company should focuson the debt and long term funds which are utilized in the company. The excess cash flow shouldor can be utilized in any new ventures if the company wishes to do.
  52. 52. 526.3 CONCLUSIONIn the study of Financial Performance of Sundaram Finance Limited Chennai, it isclear that the company‟s financial performance is satisfactory. The company has stable growthand it shows a greater efficiency in all the areas it works.If the company utilizes its working capital then the company can go heights which itwanted to achieve. The comparative income statement shows increase in the current year of netprofit and it depict the companies current profit position. To improve the efficiency the companywill strive for better performance and increase the market share the company.The suggestions provided through the study will help the company to improve theoperational performance efficiently. The suggestions provided through the study will help thecompany to improve the operational performance efficiently.
  53. 53. 53REFERENCES
  54. 54. 54REFERENCES Carlos Correia, David Flynn, Enrico Uliana & Michael Wormald, “FinancialManagement”, 6thEdition, 5.1 -5.34. Chidambaram Rameshkumar, Anbumani N, “An overview on financial statements andratio analysis”,2006, Vol.1, p. 30 George Foster, “Financial Statement Analysis”, 2ndEdition, 57 – 94. Greninger et al.(1996), Fundamentals of Financial Management, 5thEdition, 4.1-4.18. Jae K.Shim, Joel G.Siegel, Schaum‟s Outline of Theory and Problems of FinancialAccounting, 1999, 279-298. John J.Wild, K.R.Subramanyam & Robert F.Halsey (2006), Financial StatementAnalysis, 9thEdition, 2-90. Jonas Elmerraji, “Analyze Investments Quickly with ratios”, 2005, 33-36 Kennedy and Muller, “Analysis of Financial Statements”,1999, 1.3 – 1.34 Khan M Y & Jain P K, “Financial Management”, 4thEdition , 2006, 6.1 - 6.81 Pandey I M, “A Management Guide for Managing Company‟s Funds and Profits”, 6thEdition, 1 – 58 Peeler J. Patsula, “Successful Business Analysis”,2006, 18-19 Rachchh Minaxi A (2011), Introduction to Management Accounting, 3-88.
  55. 55. 55 Reddy T S & Hari Prasad Reddy Y, “Management Accounting”, 3rdEdition, 2008, 3.9 -3.25 Salmi, T. and T. Martikainen (1994), "A review of the theoretical and empirical basis offinancial ratio analysis", The Finnish Journal of Business Economics 43:4, 426-448. Susan ward, “Financial Ratio Analysis For Performance Check”, p.132Websites: www.google.com www.sundaramfinance.in http://scholar.google.com www.managementparadise.com
  56. 56. 56APPENDICES

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