financial statement analysis ppt

1. Presented by:
G.Sai Shirov,
5022-14-672-079,
NISHITHA DEGREE & PG COLLEGE.

2. INTRODUCTION
 Financial statement is an organized
collection of data according to logical and
consisted accounting procedures.
 the financial analysis is on key figures in the
financial statements and the significant
relationships that exists between them.

3. DEFINITION
 Financial analysis is the process of identifying the financial
strengths and weakness of the firm by property establishing
relationships between the item of the balance sheet and the
profit and loss account. Financial analysis can be undertaken
by management of the firm, or by parts outside the firm.

4. Objectives
 To provide a strong theoretical framework for analyzing
financial statements.
 To study the financial position of the company and
operation of Bharat Bags.
 To offer suggestions for improvement in the company.
 To appraise financial soundness of the company.

5. Need of the study
o The study mainly attempts to analyze the financial
performance of the company selected for the study.
o There can be forecasting to evaluate the overall performance
of the Bharat Bags in future.
o The financial authorities can use this for evaluating their
performance in future, which will help to analyze financial
statements and help to apply the resources of the company
properly for the development of the company.

6. Methodology
 METHODOLOGY:-
 TYPES OF FINANCIAL STATEMENTS
ADOPTED:
 Following two types of financial statements are
adopted in analyzing the firm financial position
 BALANCE SHEET.
 Profit and Loss statements.
 TOOLS OF FINANCIAL STATEMENT
ANALYSIS USED
 The following financial analysis tools are used in
order to interpret the financial position of the firm.

7. Methods of data collection
 Data we collected based on two sources:
 primary data.
 secondary data.
• Primary data :
The primary data are those information’s which are
collected afresh and for the first time, thus happen to be
original in character.
• Secondary data :
The secondary data are those which are already
collected by some agencies reports the source of
secondary data are annual, browsing, through magazines.

8. Company profile
 Company name - Bharat Bags
 Established year - 1980
 Chairman - Sri Bhoopendar Parmar
 Class - private company
 Activity type -Manufacturing and selling of Bags
 Registrar - Nizamabad
Bharat Bags is a expert quality
production located in Nizamabad. The capacity of the
factory is tons 1lakh. The machinery of the factory are of
brands like Bharat & Toffee.

9. DATA INTERPRETATION
 Current Ratio during the year
06-07 is the 1.57. In the next year
2007-08 it was maximum 1.58 and in
the year 2008- 09 it was 1.46. In the
year 2009-10 the current ratio is 1.39
and in the last year 2010--11 the
current ratio decreased to 1.30.
 The ideal value of current ratio
2:1, but during the period of study,
the current ratio is lesser than the
standard. This shows the current
ratio to shows a do down ward which
indicates the inefficiency of the
company to meet its current
obligations.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
Current Ratio
Current Ratio

10. Net Profit
 Interpretation
 It is found that the net
profit has been fluctuating
during the study period. In the
year 2006-07 the net profit
ratio was 9.2%. In the year
2007-08 it was increased to
11.6%. In the next year 2008-09
it was further increased 12.9%.
During the year 2009-10 there
was a slight increases to 13.4%.
During the year 2010-11 the net
profit ratio was 11.20%.
0
2
4
6
8
10
12
14
16
2006-2007 2007-2008 2008-2009 2009-2010

11. FINDINGS
• Current ratio shows a document trend indicating the company not
able to fulfill current obligations furthers this also indicate that
liquidity position of the company is less satisfactory.
• In all the five years the liquid ratio is higher than the ideal ratio of
1 Common size financial statements clearly shoes the firm
allocates half of the total current assets to debtor.
• Sales shows the increasing trend at the rate in every year.

12. SUGGESTIONS :-
 The current ratio of the company is below the standard
ratio in all the 5 years under study , Hence it should be
improved at least to the standard.
 The debt collection period is more than 180 days which
is to be reduced or the debt collection policy of the company is
to be changed.
 Suitable training may be imparted to all the executives
including laborers as and when they are recruited.

13. CONCLUSION:-
 BHARAT BAGS is developing corporate social
responsibility such as self Employment generation,
Environment protection, Education apart also.
 The company may take one of the measures for improving
more profits, sale should be enhanced from into end
through innovative marketing techniques.

14. THANK YOU