CHAPTER – V
The project entitled A STUDY ON RATIO ANALYSIS in Visakhapatnam Port Trust is
divided into five chapters.
The First chapter deals with
Introduction, Objectives of the study, need for the study
along with methodology and limitations of the study.
The Second chapter deals with the Introduction of Visakhapatnam port trust. Genesis and
growth of Visakhapatnam port trust. Its Organization Structure . Major Ports in India. Corporate
Objectives & Key Objectives of Visakhapatnam Port trust and other details under the head
Industry and Company profiles.
The Third chapter deals with the Ratio Analysis theory and practices of the
Visakhapatnam Port Trust which includes It also includes different types of ratios and their
The Fourth chapter deals with Data Analysis and Interpretation which includes Ratios
basing upon information collected from Visakhapatnam port trust annual reports.
The fifth chapter deals with the total summary of the overall four chapters. From the
overall theory and calculation of Ratio Analysis of Visakhapatnam port trust. The given
findings, suggestions and conclusions are drawn.
A ratio is a widely used tool of financial analysis. A ratio reflects the financial position
of the company to the users such as management creditors and inventors. The ratios which are
calculated to evaluate the financial position of Visakhapatnam Port Trust are broadly classified
in to liquidity, leverage, and profitability and activity ratios.
The study conducted at VPT depicts that it has been performing well in terms of
liquidity, leverage, profitability and activity.
The liquidity ratios of Visakhapatnam Port Trust is good at present i.e., 2006-2007 but it
is above the requirements during the past years
The leverage ratios of Visakhapatnam Port Trust show that the firm has favorable ratios
for the year 2006-2010 under analysis during the years. In the present year there is less
The activity ratios had shown that the Visakhapatnam Port Trust is having efficient
credit management system. The company is able to convert its receivables into cash.
The activity ratios of Visakhapatnam Port Trust have also shown that the collection
period is good.
The profitability ratios had shown that the overall performance of Visakhapatnam Port
Trust is in a good position.
The average collection period has been decreased from 103 to 56 during 2007 and from
2007-10 it was still decreased to 33
It is observed that the net profit ratio has been increasing for the year 2006 29.36% and
it has decreased to 18.23% in the year 2010
It is found that the return on total assets ratio has increased to 12.77% during the year
2005-06 but by the year 2009-10 it was reduced to6.79
It is observed that the fixed assets turnover ratio has been increasing for the past five
years i.e. 2006-2010.It indicates that the company is having more efficiency to utilize
The purpose of the proprietary ratio is to indicate what position of assets is financed by the share
holders. A ratio of 1 indicates that entity is a debt less one and totally is funded by equity. A high
proprietary ratio indicates the strong financial position of the organization. The ratio in
Visakhapatnam port trust is ranging from 98 to 99%.However there was a decrease in the ratio
during the years in mainly providing a pension fund.
The ideal ratio of Debt-Equity ratio is 1:2.Visakhapatnam port trust is not having any outside
debt except from Government of India. The ratio is ranging from 0.01- 0.6 which can be said
Quick ratio is the ratio of quick assets to current liabilities. A ratio of 1:1 for quick assets and
current liabilities is considered as idle. A very high quick ratio is also not advisable as funds can
be more profitability employed. Higher the ratio higher the short term solvency of the firm.
The performance of VISKHAPATNAM PORT TRUST regarding the traffic handled,
labor productivity and the performance of ships is good. However, more facilities are yet
to be provided to meet the requirements of increased traffic.
In order to give quick delivery of unloaded ships coming into the port it has to increase
the operating efficiency with high technological developments.
The liquidity position of Visakhapatnam Port Trust is satisfactory at present. It is above
the requirements during the past and current years as depicted by the Current and Quick
ratio. It is better to maintain at the present position.
The position of capital reserves is not well balanced, hence it is suggested to maintain a
preferable percentage against this head.
Visakhapatnam Port Trust has to decrease the expenditure of cargo handling & storage
It is suggested that the Organization has to decrease the management & general
Visakhapatnam port trust has to acquire professional and experienced financial
management personnel to enhance the financial operations.
To maintain optimum requirements of human and technological needs.
Vikas Publishing house
KHAN AND JAIN
WITH REFERANCE TO ANNUAL REPORTS OF VPT FROM YEARS
WWW. VISAKHAPATNAM PORT TRUST. COM
The port handling in the past 5 decades have Increased from 20 Mn to 288 Mn Ton, and
now there are 12 major ports. There are about 150 minor ports and about 80 Mn Ton have been
handled therein. The infrastructural drawbacks in our ports to handle large vessels, productivity,
management, all need drastic improvement to think big and do the Drastic Hi-Tech
developments. Corporatization and private participation should result in better vision and
mission to achieve the goal in a sustained manner.
The achievement in privatized container terminal in port is a pointer on this, a trend setter.
Development of private ports in Gujarat such as Adani, Pipava, Dahej, Jamnagar etc with
proactive thinking, policy ports and co-ordinating is a welcome step, which other maritime stated
should pursue. Port development is a costly proposition and hence proper coordination is
essential such that the ports complement and supplement for traffic.
Its Financial Performance is good in past and current years as per the above study.