a summer internship program report on "ratio Analysis" to know about the profitability and liquidity of the firm

1. A Summer Training Report
On
“RATIO ANALYSIS”
To know about the profitability and
liquidity of the firm
At
VNS GROUP OF INSTITUTION
(VIDYA NIKETAN SAMITI)
Submitted by: -
GANESH MOURYA
Batch 2015-17
MBA IInd
Semester
VNS BUSINESS SCHOOL
Year 2016

2. DECLARATION
I hereby declare that my Summer Training Report entitled
Ratio Analysis is an authentic work done by me as part of
my study at VIDYA NIKETAN SAMITI (VNS) Group
of institution.
The Project was undertaken as a part of the course
curriculum of MBA (full time course) Program of VNS
BUSINESS SCHOOL, Bhopal. This has not been
submitted to any other examination body earlier.
Date: _________
(Ganesh Mourya)
MBA (Full time course)
IInd
Semester
VNS Business School

3. ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible
without the kind support and help of many individuals and college. I would like to
extend my sincere thanks to all of them.
I am highly indebted to Prof. Meeta Sharma Moghe & Mr. Nihkilesh Mourya
for their guidance and constant supervision as well as for providing necessary
information regarding the assignment & also for their support in completing the
assignment. I express my sincere regard to Dr. Sulakshna Tiwari, college and his
valuable support. And my sincere thanks to Prof. Shirish Varma, Anirudh Pare
Sir,for valuable support.
I also show me in debt ness to my institute, VNS Business School Bhopal to
give such an opportunity take up this project.
I would like to express my gratitude towards my parents for their kind co-
operation and encouragement which help me in completion of this assignment.
I also thanks to employee’s VNS GROUP OF INSTIUTION BHOPAL who develop
their valuable time by helping me to my project & cooperated with me at all level.
GANESH MOURYA

4. INDEX
TABLE CONTENT PAGE
NUMBER
Declaration
Certificate
Acknowledgement
CHAPTERS: -
1. Introduction of topic
1.1 Financial Ratio Analysis
1.2 Liquid ratio
1.3 Solvency ratio
1.4 Profitability ratio
2. Organization/organization profile
3. Research methodology
4. Data analysis and interpretation
5. Conclusion and recommendation
6. BIBLIOGRAPHY
I
II
III
06-06
07-07
08-08
09-09
10-11
12-14
15-36
37-38
39

5. INTRODUCTION
OF THE TOPIC

6. Financial Ratio Analysis
Financial ratios are mathematical comparisons of financial statement accounts or
categories. These relationships between the financial statement accounts help investors,
creditors, and internal Organization management understand how well a business is
performing and areas of needing improvement.
Financial ratios are the most common and widespread tools used to analyze a business'
financial standing. Ratios are easy to understand and simple to compute. They can also be
used to compare different companies in different industries. Since a ratio is simply a
mathematically comparison based on proportions, big and small companies can be use
ratios to compare their financial information. In a sense, financial ratios don't take into
consideration the size of an Organization or the industry. Ratios are just a raw
computation of financial position and performance.
Ratios allow us to compare companies across industries, big and small, to identify
their strengths and weaknesses. Financial ratios are often divided up into seven main
categories: liquidity, solvency, efficiency, profitability, market prospect, investment
leverage, and coverage.
 Financial ratio
 Liquidity ratio
 Profitability ratio
 Solvency ratio

7. Liquidity Ratios
Liquidity ratios analyze the ability of an Organization to pay off both its current liabilities
as they become due as well as their long-term liabilities as they become current. In other
words, these ratios show the cash levels of an Organization and the ability to turn other
assets into cash to pay off liabilities and other current obligations.
Liquidity is not only a measure of how much cash a business has. It is also a measure of
how easy it will be for the Organization to raise enough cash or convert assets into cash.
Assets like accounts receivable, trading securities, and inventory are relatively easy for
many companies to convert into cash in the short term. Thus, these assets go into the
liquidity calculation of an Organization.
Here are the most common liquidity ratios.
 Quick Ratio
 Acid Test Ratio
 Current Ratio
 Working Capital
 Working Capital Ratio
 Times Interest Earned Ratio

8. Profitability Ratios
Profitability ratios compare income statement accounts and categories to show an
Organization's ability to generate profits from its operations. Profitability ratios focus on
an Organization's return on investment in inventory and other assets. These ratios
basically show how good companies can achieve profits from their operations.
Investors and creditors can use profitability ratios to judge an Organization's return on
investment based on its relative level of resources and assets. In other words, profitability
ratios can be used to judge whether companies are making enough operational profit from
their assets. In this sense, profitability ratios relate to efficiency ratios because they show
how good companies are using their assets to generate profits. Profitability is also
important to the concept of solvency and going concern.
Here are some of the key ratios that investors and creditors consider when judging how
profitable an Organization should be:
 Gross Margin Ratio
 Profit Margin
 Return on Assets
 Return on Capital Employed
 Return on Equity

9. Solvency Ratios
Solvency ratios, also called leverage ratios, measure an Organization's ability to sustain
operations indefinitely by comparing debt levels with equity, assets, and earnings. In
other words, solvency ratios identify going concern issues and a firm's ability to pay its
bills in the long term. Many people confuse solvency ratios with liquidity ratios.
Although they both measure the ability of an Organization to pay off its obligations,
solvency ratios focus more on the long-term sustainability of an Organization instead of
the current liability payments.
Solvency ratios show an Organization's ability to make payments and pay off its long-
term obligations to creditors, bondholders, and banks. Better solvency ratios indicate a
more creditworthy and financially sound Organization in the long-term.
The most common solvency ratios include
 Debt to Equity Ratio
 Equity Ratio
 Debt Ratio

10. ORGANIZATION
PROFILE

11. Organization information
Group of Institutions, Bhopal
Promoted by Vidya Niketan Samiti, Estd. 1994
Gateway to Global Knowledge
Vidya Niketan Samiti, Bhopal (VNS)
VNS was established and registered in 1994 under the M.P. Societies Registration Act
(Reg. No. 26510 dated 25th December, 1994). Promoters of VNS group are
acknowledged business people having ventures in the areas of mining of iron-ore,
manganese and bauxite, construction, refractory manufacturing and daily newspaper
publishing. VNS group is committed towards promoting quality education and research
oriented activities through dynamic linkages with industry.
Vision:
 To be known as an institute for its excellence in education by producing
individuals who are technically sound, ethically strong and self-reliant.
Mission:
 Impart quality education enriched with contemporary knowledge.
 Develop employ-ability skills through corporate synergy activities.
 Strengthen innovative thinking by facilitating research.
 Nurture and confirm discipline, ethical values through individual attention.

12. VNS Group of Institutions
Vidya Niketan Samiti manages education in the areas of Engineering, Pharmacy,
Management, Physical Education & Teachers Education. All the courses are duly
approved by appropriate regulatory bodies like AICTE, PCI, NCTE and are affiliated to
RGPV, Bhopal and Barkatullah University, Bhopal. Details of colleges managed by VNS
are given below.
FACULTY OF MANAGEMENT
(Formerly VNS Institute of Management, established 1996)
Approved by AICTE, Affiliated to Barkatullah University, Bhopal
Associate Director: Dr. Roopali Bajaj
-------------------------------------------------------------------------------------------
FACULTY OF PHARMACY
(Formerly VNS Institute of Pharmacy, established 1996)
Approved by AICTE & PCI, Affiliated to RGPV, Bhopal
Associate Director: Dr. Vipin Dhote
FACULTY OF ENGINEERING
(Formerly VNS Institute of Technology, established 2006)
Approved by AICTE, Affiliated to RGPV, Bhopal
Vice Principal: Prof. G.D. Singh
VNS BUSINESS SCHOOL
(Established 2010)
(Approved by AICTE, Ministry of HRD, Govt. of India)
Director: Dr. Sulakshna Tiwari
VNS COLLEGE OF PHYSICAL EDUCATION AND
MANAGEMENT STUDIES
(Established 1995)
(Approved by NCTE, Affiliated to Barkatullah University, Bhopal)
Principal: Dr. Rajesh Tripathi

13. RESEARCH
METHODOLOGY

14. ResearchMethodology
Research methodology is a methodology for collecting all sort of information and
data pertaining to the subject in question. The objective is to examine all the issues
involved and conduct situational analysis. The methodology includes the overall research
design, sampling, procedure and fieldwork done. The methodology used in the study
consistent of sample survey using both primary and secondary data. The primary data has
been collected with the questionnaire as well as personal observation book, magazine;
journals have been referred for secondary data. The questionnaire has been drafted and
presented by the researcher himself.
Definition of ResearchMethodology
“The process used to collect information and data for making business decisions. The
methodology may include publication research, interview, survey and other research
techniques, and could include both present and historical information.”
In simple terms methodology, can be defined as, it is used to give a clear-cut idea
on what the researcher is carrying out his or her research. To plan in a right point of time
and to advance the research work methodology makes the right platform to the
researcher to mapping out the research work in relevance to make solid plans.
More over methodology guides the researcher to involve and to be active in his or
her field of enquiry. Most of the situations the aim of the research and the research topic
won’t be same at all time it varies from its objectives and flow of the research but by
adopting a suitable methodology this can be achieved.
On the other hand, from the methodology the internal environment constitutes by
understanding and identifying the right type of research, strategy, philosophy, time
horizon, approaches, followed by right procedures and techniques based on his or her
research work. In other hand the research methodology acts as the nerve center because
the entire research is bounded by it and to perform a good research work, the internal and
external environment must follow the right methodology process.
Types of Research:
Descriptive Research
ExploratoryResearch

15. RREESSEEAARRCCHH OOBBJJEECCTTIIVVEESS
 FFiirrsstt aanndd ffoorreemmoosstt,, oobbjjeeccttiivvee iiss ttoo uunnddeerrssttaanndd wwhhaatt VVNNSS ggrroouupp ooff IInnssttiittuuttiioonn iiss..
 TToo ffiinndd oouutt tthhee PPrroodduucctt aanndd SSeerrvviicceess pprroovviiddeedd bbyy tthhee VVNNSS ggrroouupp ooff IInnssttiittuuttiioonn..
 TToo ggeenneerraattee tthhee lleeaaddss tthhrroouugghh tthhee ssuurrvveeyy..
 TToo ssoorrtt oouutt tthhee pprroossppeeccttiivvee lleeaaddss ffrroomm tthhee ddaattaa II hhaavvee ccoolllleecctteedd tthhrroouugghh ssuurrvveeyy..
 TToo aannaallyyzzee tthhee rroollee ooff VVNNSS ggrroouupp ooff IInnssttiittuuttiioonn iinn IInnddiiaann mmaarrkkeett..
 TToo kknnooww aabboouutt tthhee vvaarriioouuss ccoonncceeppttss VVNNSS ggrroouupp ooff IInnssttiittuuttiioonn ffoorr ffaacciilliittaattiinngg tthhee
IInnddiiaann ppeeoopplleess..
 TToo ssttuuddyy tthhee ppeerrffoorrmmaannccee ooff tthhee VVNNSS ggrroouupp ooff IInnssttiittuuttiioonn..
 TToo uunnddeerrssttaanndd tthhee ddaayy-- ttoo-- ddaayy wwoorrkk ccaarrrryyoouutt bbyy tthhee oorrggaanniizzaattiioonn..
 TToo ggeett tthhee llaatteesstt nneewwss rreellaatteedd ttoo tthhee oorrggaanniizzaattiioonn..
 TToo kknnooww tthhee aaccttuuaall ppoossiittiioonn ooff tthhee VVNNSS ggrroouupp ooff IInnssttiittuuttiioonn iinn sseerrvviinngg tthheeiirr
pprroodduuccttss iinn IInnddiiaann mmaarrkkeett..

16. Scope of Study
While studyingthe aspectsof the VVNNSS ggrroouupp ooff IInnssttiittuuttiioonnrealize itisagreat effortbythe VVNNSS
ggrroouupp ooff IInnssttiittuuttiioonntoserve the peoplesof IndiaandIndianmarketwiththeirproducts.Because
inIndiait isverydifficulttodosuch kindof businessbecause of differentpolicies,corruption,
politicsandthe mostimportantthe taste of the consumer.Insteadof suchdifficultiesVNSgroup
of Institutionis onthe 1st
position andmaintainit.
DATA COLLECTION
Collection of data is done by different sources, i.e. –
Research Types :- Descriptive Research
SSeeccoonnddaarryy DDaattaa
Secondary data is collected from various sources like – websites, Magazines,
Newspapers, Journals, Reports, and Books etc.
Secondary data is the data which is not collected from primary source, means
Secondary data is the data that have been already collected by and readily available from
other sources. Such data are cheaper and more quickly obtainable than the primary data
and may be available when primary data cannot be obtained at all.
Limitation of Study
There is no activity that can be completed without any limitation. The main limitations
faced during the preparation of this project report are: -
 Time available for the completion of the project is very short; hence much
information could not be undertaken.
 The information collected through secondary data. Some of the information might
be wrong, misunderstood and typically described (can’t be understand by
students).
 There are very huge areas covered by VVNNSS ggrroouupp ooff IInnssttiittuuttiioonn so it is not
possible to analyze all the data.
 Cooperation with the employees of the organization is very important while
collecting data for the project work, so there is a little bit of problem faced by me
for collecting the data.

17. DATA ANALYSIS
AND
INTERPRETATION

18. VNS group of
Institution
Standalone Balance Sheet ------------------- in Rs. Cr. -------------------
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
12
months
12 months
12
months
12
months
12
months
Sources of Funds
Total Share Capital 128.30 128.30 128.30 128.30 73.32
Equity Share Capital 128.30 128.30 128.30 128.30 73.32
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 2,928.55 2,572.58 2,161.51 1,622.00 1,153.99
Revaluation Reserves 0.00 0.00 14.27 14.42 14.58
Net worth 3,056.85 2,700.88 2,304.08 1,764.72 1,241.89
Secured Loans 12.93 0.20 8.23 13.82 34.52
Unsecured Loans 0.75 2.06 5.17 12.96 19.15
Total Debt 13.68 2.26 13.40 26.78 53.67
Total Liabilities 3,070.53 2,703.14 2,317.48 1,791.50 1,295.56
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
12
months
12 months
12
months
12
months
12
months
Application of Funds
Gross Block 1,485.00 1,365.61 1,604.18 1,171.40 1,111.53
Less: Accum. Depreciation 784.65 748.42 728.88 637.59 600.82
Net Block 700.35 617.19 875.30 533.81 510.71
Capital Work in Progress 74.91 58.29 47.69 33.03 12.95
Investments 1,055.04 1,052.50 781.64 688.06 265.52
Inventories 548.50 449.60 405.72 303.53 281.32
Sundry Debtors 1,840.62 1,735.62 1,510.18 1,212.79 1,012.26
Cash and Bank Balance 288.79 321.10 124.22 112.43 181.49
Total Current Assets 2,677.91 2,506.32 2,040.12 1,628.75 1,475.07
Loans and Advances 761.41 336.19 587.55 402.31 516.55
Fixed Deposits 0.00 0.00 26.67 436.07 291.02
Total CA, Loans &
Advances
3,439.32 2,842.51 2,654.34 2,467.13 2,282.64
Differed Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 2,013.13 1,717.06 1,634.38 1,534.63 1,265.88
Provisions 185.96 150.29 407.11 395.90 510.38
Total CL & Provisions 2,199.09 1,867.35 2,041.49 1,930.53 1,776.26

19. Net Current Assets 1,240.23 975.16 612.85 536.60 506.38
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 3,070.53 2,703.14 2,317.48 1,791.50 1,295.56
Contingent Liabilities 1,422.59 326.08 278.74 362.56 788.21
Book Value (Rs) 47.65 42.10 35.70 27.28 33.48
VNS group of
Institution
Previous Years »
Standalone Profit & Loss
account
------------------- in Rs. Cr. -------------------
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
12
months
12
months
12
months
12
months
12
months
Income
Sales Turnover 7,571.07 6,934.47 6,411.18 5,627.68 4,971.85
Excise Duty 435.77 366.45 325.05 232.09 293.06
Net Sales 7,135.30 6,568.02 6,086.13 5,395.59 4,678.79
Other Income 98.68 74.39 95.68 124.18 -67.25
Stock Adjustments 42.99 8.72 56.84 49.29 1.66
Total Income 7,276.97 6,651.13 6,238.65 5,569.06 4,613.20
Expenditure
Raw Materials 5,496.25 4,723.10 4,083.39 3,534.44 3,101.11
Power & Fuel Cost 47.30 42.66 35.90 31.02 29.04
Employee Cost 411.17 363.59 310.17 255.79 227.23
Other Manufacturing Expenses 28.04 201.41 245.26 200.37 173.63
Selling and Admin Expenses 0.00 37.65 500.68 508.56 351.80
Miscellaneous Expenses 600.92 487.65 40.86 56.38 43.53
Preoperative Exp. Capitalized 0.00 0.00 -6.20 -0.04 -1.17
Total Expenses 6,583.68 5,856.06 5,210.06 4,586.52 3,925.17
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
12
months
12
months
12
months
12
months
12
months
Operating Profit 594.61 720.68 932.91 858.36 755.28
PBDIT 693.29 795.07 1,028.59 982.54 688.03
Interest 25.41 27.66 20.69 20.00 28.55
PBDT 667.88 767.41 1,007.90 962.54 659.48
Depreciation 71.86 90.71 80.89 51.90 45.21
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 596.02 676.70 927.01 910.64 614.27

20. Extra-ordinary items 0.00 -18.29 0.00 0.00 0.00
PBT (Post Extra-Ord Items) 596.02 658.41 927.01 910.64 614.27
Tax 150.18 171.84 232.68 293.30 217.18
Reported Net Profit 445.84 504.86 694.33 617.34 397.09
Total Value Addition 1,087.43 1,132.96 1,126.67 1,052.08 824.06
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 76.98 89.81 141.13 80.65 73.31
Corporate Dividend Tax 12.69 14.57 23.29 13.70 12.46
Per share data (annualized)
Shares in issue (lakhs) 6,414.92 6,414.92 6,414.92 6,414.92 3,665.67
Earning Per Share (Rs) 6.95 7.87 10.82 9.62 10.83
Equity Dividend (%) 60.00 70.00 110.00 110.00 100.00
Book Value (Rs) 47.65 42.10 35.70 27.28 33.48

21. Liquidity Ratios
1. Current Ratio =
Current Assets
Current Liabilities
Current Assets =
Cash in hand, bank, Short Term Investments, Bills Receivable, Sundry Debtors, Stock,
Work in Progress, Prepaid Expenses etc.
Current Liabilities =
Outstanding Expenses, Creditors, Bills Payable, Long term Loans, Income Tax Payable,
Dividend payable, Bank OD (If Permanent)
Ideal Ratio is 2:1
For 2009
1753.54 = 1.38: 1
1265.88
For 2010
2349.84 = 1.53: 1
1534.63
For 2011
2880.05 =1.76: 1
1634.38
For 2012
3617.11 = 2.10: 1
1717.06
For 2013
3807.86 = 1.89: 1
2013.13

22. Interpretation
Current ratio is a measure of liquidity of a Organization at a certain date. It must be
analyzed in the context of the industry the Organization primarily relates to. The
underlying trend of the ratio must also be monitored over a period of time
In VNS group of Institution India I analyze that the current ratios of different 5 years are
very close to the ideal current ratio i.e. 2:1 which was the good sign for the organization.
Graphical Representation
Current Ratio
1.38
1.53
1.76
2.1
1.89
0
0.5
1
1.5
2
2.5
2009 2010 2011 2012 2013

23. 2. Quick Ratio =
Quick Assets or Liquid Assets
Quick Liabilities or Liquid Liabilities
Quick Assets=
Current Assets – Prepaid Expenses – Stock
Ideal Ratio is 1: 1
For 2009
1472.22 = 1.16: 1
1265.88
For 2010
2046.31 = 1.33: 1
1534.63
For 2011
2474.33 = 1.51: 1
1634.38
For 2012
3167.51 = 1.84: 1
1717.06
For 2013
3259.36 = 1.61: 1
2013.13

24. Interpretation
Quick ratio is considered a more reliable test of short-term solvency than current ratio
because it shows the ability of the business to pay short term debts immediately.
As we seen in the VNS group of Institution India the ratios are quite close enough to the
ideal condition 1:1 and it indicates that the organization maintain its liquidity for paying
short term debts.
Graphical Representation
Quick ratio
1.16
1.33
1.51
1.84
1.61
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2009 2010 2011 2012 2013

25. 3. Cash Position Ratio
Cash + Marketable Securities
Current Liabilities
Ideal ratio is 1:2
For 2009
447.01 = 0.35: 1
1265.88
For 2010
800.49 = 0.52: 1
1534.63
For 2011
905.86 = 0.55: 1
1634.38
For 2012
1373.6 = 0.79: 1
1717.06
For 2013
1343.83 = 0.66: 1
2013.13

26. Interpretation
Cash position ratios are calculated to compare the proportion of cash and short term
investments with the current liabilities.
As we seen in the financial analysis of VNS group of Institution India we realize that they
were in the fine condition. Because all ratios of different years are close to the ideal
condition i.e. 1:2.
Graphical Representation
Cash position Ratio
0.35
0.52
0.55
0.79
0.66
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2009 2010 2011 2012 2013

27. Activity Ratios
1. Fixed Assets Turnover Ratio
Net Sales
Average Total Assets
Average Total Assets = Opening total assets + Closing total assets
2
For 2009
4678.79 = 3.61: 1
1295.56
For 2010
5395.59 = 3.49 : 1
1543.53
For 2011
6086.13 = 2.96: 1
2054.45
For 2012
6568.02 = 2.61: 1
2510.31
For 2013
7135.30 = 2.47: 1
2886.83

28. Interpretation
The fixed asset turnover ratio is the ratio of net sales to net fixed assets. A high ratio
indicates that a business is: Doing an effective job of generating sales with a relatively
small amount of fixed assets A low ratio indicates that a business: Is overinvested in
fixed assets.
But in VNS group of Institution it is not in well condition
Graphical Representation
Fixed Asset Turnover Ratio
3.61
3.49
2.96
2.61
2.47
0
0.5
1
1.5
2
2.5
3
3.5
4
2009 2010 2011 2012 2013

29. 2. Inventory Turnover Ratio =
Cost of Goods Sold
Average Stock
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock
Average Stock= Opening Stock + Closing Stock
2
For 2010
3512.23 = 12.01 times
292.42
For 2011
3981.2 = 11.22 times
354.62
For 2012
4679.22 = 10.94 times
427.66
For 2013
5397.33 = 10.81 times
499.05

30. Interpretation
A low inventory turnover ratio is a signal of inefficiency, since inventory usually has a
rate of return of zero. It also implies either poor sales or excess inventory. A low turnover
rate can indicate poor liquidity, possible overstocking, and obsolescence, but it may also
reflect a planned inventory buildup in the case of material shortages or in anticipation of
rapidly rising prices.
A high inventory turnover ratio implies either strong sales or ineffective buying (the
Organization buys too often in small quantities, therefore the buying price is higher).A
high inventory turnover ratio can indicate better liquidity, but it can also indicate a
shortage or inadequate inventory levels, which may lead to a loss in business. But in VNS
group of Institution India it not very high it is generally low.
Graphical representation
Inventory Turnover Ratio
12.01
11.22
10.94
10.81
10.2
10.4
10.6
10.8
11
11.2
11.4
11.6
11.8
12
12.2
2010 2011 2012 2013

31. 3. Working Capital Turnover Ratio =
Net Sales
Average Working Capital
Average Working Capital = Opening Working Capital + Closing Working Capital
2
For 2009
4678.79 = 36.12: 1
120.95
For 2010
5395.59 = 23: 1
229.9
For 2011
6086.13 = 15.07: 1
403.6
For 2012
6568.02 = 12.41: 1
529
For 2013
7135.30 = 10.71: 1
666

32. Interpretation
Generally, a high working capital turnover ratio is better. A low ratio indicates inefficient
utilization of working capital. The ratio should be carefully interpreted because a very
high ratio may be a sign of insufficient working capital. And in VNS group of Institution
India it is well condition.
Graphical Representation
Working Capital Turnover Ratio
36.12
23
15.07
12.41
10.71
0
5
10
15
20
25
30
35
40
2009 2010 2011 2012 2013

33. Profitability Ratios
1. Gross Profit Ratio=
Gross Profit * 100
Net sales
For 2009
1111.53 * 100 = 23.75 %
4678.79
For 2010
1171.40 * 100 = 21.70 %
5395.79
For 2011
1604.18 * 100 = 26.35%
6086.13
For 2012
1365.61 * 100 = 20.79 %
6568.02
For 2013
1485.66 * 100 = 20.82 %
7135.30

34. Interpretation
Gross profit is very important for any business. It should be sufficient to cover all
expenses and provide for profit. There is no norm or standard to interpret gross profit
ratio (GP ratio). Generally, a higher ratio is considered better. And in VNS group of
Institution it is high that means the better condition for the organization.
Graphical Representation
Gross Profit
23.75
21.7
26.35
20.79 20.82
0
5
10
15
20
25
30
2009 2010 2011 2012 2013

35. 2. Net Profit Ratio =
Net Profit after Tax * 100
Net Sales
For 2009
397.09 * 100 = 8.48 %
879.78
For 2010
617.34 * 100 = 11.44 %
5395.59
For 2011
694.33 * 100 = 11.40 %
6086.13
For 2012
504.86 * 100 = 7.68 %
6568.02
For 2013
445.84 * 100 = 6.24 %
7135.30

36. Interpretation
Net profit (NP) ratio is a useful tool to measure the overall profitability of the business. A
high ratio indicates the efficient management of the affairs of business. There is no norm
to interpret this ratio.
Graphical Representation
Net Profit
8.48
11.44 11.4
7.68
6.24
0
2
4
6
8
10
12
14
2009 2010 2011 2012 2013

37. 3. Expenses Ratio =
Particular Expenses * 100
Net Sales
For 2009 (Manufacturing Expenses)
173.63 * 100 = 3.71 %
4678.79
For 2010 (Manufacturing Expenses)
200.37 * 100 = 3.71 %
5395.59
For 2011 (Manufacturing Expenses)
245.26 * 100 = 4.02 %
6086.13
For 2012 (Manufacturing Expenses)
201.41 * 100 = 3.06 %
6568.02
For 2013 (Manufacturing Expenses)
28.04 * 100 = 0.39 %
7135.30

38. Interpretation
Expense ratio shows what percentage of sales is an individual expense or a group of
expenses. A lower ratio means more profitability and a higher ratio means less
profitability. And it is quite good condition of manufacturing expenses in VNS group of
Institution. It means they were not incurred huge expenses.
Graphical Representation
Manufacturing Expenses
3.71 3.71
4.02
3.06
0.39
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2009 2010 2011 2012 2013

39. CONCLUSION
AND
RECOMMENDATION

40. Conclusion
Financial Analysis plays a very important role in providing facts and figures for
the decision makers. In the same way ratios, will act analysis kit in the hands of financial
analyst, these ratios will help is and in answering the basic question like why, how what
of these statements.
Now a day’s financial analysis in very much in consideration for decision making,
in deciding what to do and what not to do are required to analyze the data as per their
requirements. Thus, in my project I try brief outline of ratio analysis i.e. how to analyze
the facts and figures given in the financial statements.
Throughout my project, I have analyzed Organization’s financial position and
pros and cons of the situations and I have also interpreted the data. Despite some
limitation, I try to analyze and interpreted the facts and figures with accuracy.
Based on the analysis and interpretation I tried to give my findings and
suggestions for the Organization as per my best knowledge.
Finally, project really helps me in knowing the practical things of the corporate
world. Really, I enjoyed this project work in its real spirit.

41. Suggestions and Recommendations
 The Organization should adopt new technology to reduce cost.
 The Organization shoed connect weekly meeting for the valuation of
performance.
 The Organization is in a good condition but they can also make it better.
 Along with their new product and its distribution the Organization also must their
employee and make them more benefits
 Organization should maintain its good relations with the customers and suppliers
of different region
Organization should work based on ethics and do not hurt the any religion by their false
advertisements and any other conditions

42. BIBLIOGRAPHY

43. Bibliography
www.vns.ac.in
www.myaccountingcourse.com
www.allbankingsolution.com
www.finansesolution.com
Books
 Reddy G. sudarshan, financial management
(principles and practices), Himalaya publication
 Panday I M, financial management, (10th
edition),
vikas publication
 Gupta Shashi K., Sharma RK, Financial
management (theory and practice) 7th
edition,
Kalyani publication.
 Bhalla V.K. Financial management and policy
(text and cases), (7th
edition), Anmol publication
Pvt. Ltd.
 chandra Prasanna (4th
edition) (fundamental of
financial management), Tata Mcgrow Hill
Education Pvt. Ltd.