1. A PROJECT STUDY REPORT ON
FINANCIAL PERFORMANCE ANALYSIS WITH SPECIAL REFERENCE
TO ABAD FISHERIES PRIVATE LIMITED, KOCHANGADY, KOCHI
In partial fulfillment of the requirements for the award of
MASTER OF BUSINESS ADMINISTRATION
Submitted By
TIJU V JOHN
Reg.No:32887
Under the guidance of
Mr. NAVIN V KOSHY
Assistant Professor
MUSALIAR COLLEGE OF ENGINEERING AND TECHNOLOGY
PATHANAMTHITTA – 689 653, Kerala
2011- 2013

2. CERTIFICATE
This is to certify that this report is based on “FINANCIAL
PERFORMANCE ANALYSIS” conducted by TIJU V JOHN, is in
partial fulfillment of the requirements for the degree of MASTER OF
BUSINESS ADMINISTRATION, degree program of MAHATMA
GANDHI UNIVERSITY, KOTTAYAM.
…………………………………. …………………………………………
Signature of the Faculty Guide Signature of the Head of Department
………………………………………….
Signature of the Examiner
MUSALIAR COLLEGE OF ENGINEERING AND
TECHNOLOGY, KUMBAZHA,
PATHANAMTHITTA

3. DECLARATION
I hereby declare that the project Report “FINANCIAL PERFORMANCE
ANALYSIS”, is a record of bona-fide work done by me in ABAD Fisheries
private limited, Kochi during 15- 6- 2013 to 15-8-2013 under the supervision of
Mr. Navin V Koshy, Department of Management Studies, Musaliar College of
Engineering and Technology, Pathanamthitta, Kerala, India.
I also hereby declare that this project report has not been submitted to any other
University or institute for the award of any degree or diploma recognition before.
Pathanamthitta TIJU V JOHN
Date

4. ACKNOWLEDGEMENT
The elation and gratification of this project study will be
incomplete without mentioning all who helped me to make it possible, whose
encouragement and guidance were valuable to me throughout conducting the
project study.
First and foremost I thank God Almighty for giving me the
ability to do this study and make the venture a success.
I express my sincere thanks to my guide Mr. MOHAMMED
SADIK for providing the necessary guidelines to conduct the study at the
organization. I am also thankful to all the department heads for their valuable
suggestions and constructive criticism throughout the preparation of the report. I
am obliged to my Guide for his valuable guidance and help throughout the
completion of the study.
I owe my sincere thanks to Navin V Koshy, faculty guide
supported me throughout the work with excellent guidance. I extend my thanks to
all the lecturers and staff members of the Department of Management studies for
their tireless help.
Last but not the least I express my sincere gratitude to my
parents and friends for their constant help and encouragement and valuable prayers
motivating me mentally for the successful completion of this project study.

5. CONTENTS
CHAPTER NO. TITLE
1 INTRODUCTION
1.1 Industry profile
1.2 Company profile
1.3 Product profile
2 LITERATURE REVIEW
3 RESEARCH METHODOLOGY
3.1 Objective of study
3.2 Scope of the study
3.3 Limitations of the study
4 ANALYSIS & INTERPRETATION
5 FINDINGS
6 SUGGESTIONS
7 CONCLUSIONS
8 BIBLIOGRAPHY

6. 1.INTRODUCTION
Today we live in the world of rapid development of technologies due to the success we
earned through innovative programs and dedicated services to nation. All this came possible with
onset of industrial flourishment widely overseas. Most of the well known reputed industries
frame their image through carrying their product sales at an increased potential for across the
horizon. To accomplish the task of achieving greater output growth about the available utilized
input, one started to make use of export-import facility that border lined our great economic
share to the national revenue.
All of us were aware about the risk associated with any business activity. This is true whether
one is engaged in manufacturing and marketing, or only engaged in trading or even providing
technical and commercial services to another individual or a business corporation.
The Govt. of India controls the export and import trade by way of Export-Import Policy
announced by them. An exporter or importer will have to deal with two ministries under the
Govt. of India viz, Ministry of Commerce and Ministry of Finance.
Over the past few years, the role of financial management in the business organization has
substantially changed and the jobs of financial manager was largely confined to the acquisition of
funds; for the most part ,the use of those funds within the organization was not the managers
concern. As business firms continued to expand their markets, however an organization become
large and classified, greater control of the financial position become necessary. The financial
management has evolved in to an integrated approach, which encompasses all aspects of acquiring
and utilizing means of financial support for the firm‟s activities. Financial statements also called
financial reports are account balances arranged in effective and meaningful order so that the facts,
concepts they portray may be readily interpreted and used as bases for decisions by all people who
are interested in the affairs of business.
The financial performance analysis of ABAD Fisheries is carried out with the help of various
tools such as Ratio analysis, common size statements, comparative balance sheets, trend
percentage analysis etc.
I had prestigious honor of completing my project in such a company were, through proper
investment in export-import practices they reaped a harvest of success. I was given a chance to
perform my project at ABAD Fisheries Pvt. Ltd., Kochi a prompt role model amongst emerging
seafood industries or Overseas marketing. The details of my studies are enclosed within.

7. 1.1 INDUSTRY PROFILE
India is a major fish producing country among the world nations, which stands in
the seventh position. Marine products have created a sensation in the world market because of
their healthy attributes. Seafood has been acclaimed as one of the fast moving commodity in the
world market with high value. The share of marine products has steadily grown over the years
from a mere of „392crores in 1961-62 to „1376crores in 1991-92. The growth continued in the
subsequent years and attained „6881crores in 2002-2003 accounting year for approximately
2.72% of the total exports from India.
When canned and frozen items started figuring increasingly in the company‟s
exports, the sophisticated markets like Japan, USA, Australia etc. became the major international
buyers. In the Indian seafood, industry experiments and innovations have a greater role in the
modern industrial sector as requirements and tastes of the society are changing fast.
Whatever happens in the seafood industry it is the matter related to the society rather
than the matter of a particular business cycle as the anglers‟ society as a whole is totally involved
in the processing units, which is on a higher side compared to other industrial units, fisheries
sectors has been contributing to a very significant share in the India Economy through
employment generation and earning foreign exchange.

8. 1.2 COMPANY PROFILE
History of the Company.
The last decade of 19th
century was a milestone in the history of the Indian seafood
industry as a new chapter titled “overseas marketing” could have been opened and thereby could
spring an enlightening experience in the international market for marine products as well as
being key factor in earning foreign currency with a fair share of its volume of exports.
1894 was absolutely a momentous year that could witness the country‟s 1st
export of
seafood that is, sun dried shrimps to Myanmar, to erstwhile Burma, by none other than Sri.
MOHAMED KASSIM ALLANA, the founder of ABAD. In the year 1931, his son USMAN
MOHAMED HASHIM established ABAD fisheries and still stands as the flagship of ABAD
Group as well as India‟s largest processors of Quick Frozen Quality seafood and could attain its
rightful place „PRIDE OF INDIA‟.
ABAD is the 1st
to construct fully penalized and air conditioned facilities for processing
seafood in India, keeping with the factory standards over the world. The GROUP is maintaining
a combined freezing capacity of 300 MT per day and a cold storage capacity of 8000 MT at a
time. All the said factories are located very next to major fishing harbors or have been integrated
to main landing centers, which ensure availability of fresh raw materials irrespective of time
constraints.
The highest quality standards are always maintained at every phase of production process
monitored by well qualified, trained and motivated workforce, considered the best in the country.
The brand name such as “Pride Of India” and “Sea Sparkle” are known over the world for
seven decades and have the regard in the International Industrial Circle. With a pronounced
emphasis on R&D and innovation, ABAD have been furthering their expertise in producing High
Quality Value Added Products to satisfy the demand from their valued customers the world over.

9. ABAD FISHERIES PRIVATE LIMITED.
Abad fisheries private ltd is a partnership firm, converted private limited company registered
under the Companies Act 1956 performing its business in and around Kochi. Sailing as a
flagship of the “ABAD Group”, the parent unit of the group continues to contribute the lion
share of its revenue right from commencement of its commercial operations in the year 1931
under the name of Abad Fisheries. This is the most familiar and reputed organization within the
group.
AUTHORIZED CAPITAL.
Authorized capital of the company is „200lakhs.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL.
Authorized capital of the company has been fully issued, subscribed and paid up.
CONSTRUCTION CAPITAL
Capital of the company has been fully taken as the Authorized capital, which has been fully
issued and subscribed. The subscribed capital of the company has fully paid up and it figures at
‟20,000,000.00 divided into 20,000 equity shares of 10,000.00 each, but in the year 2010-11
equity shares issued are 20,600 @ 10000 each.
REGISTERED OFFICE
The registered office of the company is situated at ABAD Building, Jews Town Road,
Kochangady, Cochin KERALA-682002. The main objective of the company to be pursued is to
carry on the business of the procuring, producing, processing, marketing, importing and
exporting of all kinds of food items in India and abroad.

10. FACTORY
The existing factory attached to the registered office also situated at „Abad fisheries‟,
having address at Jew Town Road, Kochangady, Cochin-682002. This plant is having 15 tones
capacity per day as approved by Export Inspection Agency and is utilizing the entire capacity.
The factory is having all features required for a processing plant such as a Pre-processing plant,
Ice plant, Mini laboratory, Effluent treatment plant etc.
The pre-processing plant within the factory premises to be very much satisfactory and
hence the entire phases of processing can be done under one roof right from procurement of raw
materials up to shipment of finished goods. Around 200 persons are employed to produce 15 MT
peeled materials per day. The factory is self contained with its own landing centre, an Ice plant
consisting 1 MT Alfa level Tube Ice Machine, one Dg Set and a Spiral Freezer from
Frigoscandia, Sweden.
One full-fledged mini laboratory has been placed, equipment like Elisa Kit have been
produced and installed. A team of highly qualified and HACCP ensures the “safety and
wholesomeness” of the „product from water to consumer‟ with consistent excellency. A well
equipped water treatment plant has also been opened whereby the waste water treatment
mechanism is effectively carried out in a very good manner in compliance of all the statutory
formalities and standards laid by authorities like Kerala State Pollution Control Board.
BRANCH UNITS OF ABAD FISHERIES.
1. ABAD FISHERIES, MALIPPURAM
Opened in the year 1987, this is well equipped classic factory having 10 tons capacity per day
and storage capacities 300 MT. All the statutory requisites such as pre-processing plant, effluent
treatment plant etc have been dispensed.
2. ABAD FISHERIES, MUNAMBAM.
This unit was started in the year 2000. This is also a well equipped and most modernized one
having all facilities and infrastructure. This is situated near to the Arabian Sea with freezing
capacity of 10MT and storage capacity 330MT.
3. ABAD FISHERIES, VIZHINJAM
This factory is a classic one in appearance and in its operation, having 15 tons capacity to
process all kind of marine food products per day as approved by EIA and the cold storage
capacity 300MT.

11. 4. ABAD FISHERIES, NAMBIAPURAM
This unit is a well equipped and most modernized one having all facilities and infrastructure.
This unit is having 10 tons capacity per day as approved by EIA and the cold storage capacity
300MT.
5. ABAD FISHERIES, THE COLD STORAGE
This is the third public cold storage having 3000MT capacity and the second one in Kerala. This
is situated in the 63 cent of land bordered on one side of the NH47 Aroor. This is a State-of-art
public cold storage having 3000MT capacity. With fully penalized and computer controlled
operations. The cold store will accommodate 3000 pellets of 1 MT each.
SISTER CONCERNS .
1. ABAD EXIM PVT. LTD.
2. ABAD EXPORT PVT. LTD.
3. ABAD OVERSEAS PVT. LTD.
4. CAP SEAFOODS PVT. LTD.
5. ABAD FOODS PVT. LTD.
6. ABAD FOOD CANNING COMPANY PVT. LTD.
SISTER CONCERNS OTHER THAN SEAFOOD
INDUSTRY.
ABAD Group has very versatile interests in various areas extended to real estate and hospitality
industry. The main business interested areas consists of;
1. ABAD HOTELS (INDIA) PVT. LTD.
2. ABAD FLIGHT CATERS AND HOTELS PVT. LTD.
3. ABAD MOTELS AND RESORTS PVT. LTD.
4. ABAD BUILDERS PVT. LTD.
5. ABAD CONSTRUCTIONS PVT. LTD.

12. OBJECTIVES OF THE COMPANY
a) Improve the goodwill and reputation of the firm.
b) Ensure maximum profit through customer satisfaction.
c) Provide best quality products.
d) Ensure the existence, growth and expansion of enterprises.
e) Provide good working conditions to the workers.
f) Conservation of environment and natural resources.
g) Prompt payment to the suppliers in respect of price of raw materials.
QUALITY POLICY
i. Maximum utilization of resources of the company.
ii. To procure, manufacture and export sea foods with good quality.
iii. Meeting the requirements of the customers those of regulatory agencies abroad.
iv. To ensure safety and wholesomeness of the product from the workers to
customers.
v. Plan and implement quality management system namely Hazards Analysis
Critical Control Point (HACCP).
vi. To enable HACCP, conducted and developed in all disciplines of the facilities by
catering to all possible needs of the business.
vii. Plan and impart need-based hands of training from low level to the top
management on a regular basis.
ABAD FISHERIES PVT .LTD: - MILESTONES
 1894- 1st
export of Indian seafood (Sun-dried shrimps).
 1931- ABAD Fisheries the flagship of ABAD Group established.
 1979- ABAD introduced faster 90 minutes freezer.
 1985- India‟s 1st
IQF freezer (indigenous).
 1985- India‟s 1st
Frigoscandia IQF freezer.
 1987- India‟s 1st
Frigoscandia IQF spiral freezer.
 1995- ABAD Commissions India has 1st
fully penalized air conditioned factory,
CAP Seafood.
 1998- CAP Seafood became the 1st
Indian factory to get EOU.
 2002- Commissioned 2500 tones cold storage at Chennai.
 2003- ABAD Overseas joint venture factory started with partners from Spain,
USA, Australia and New Zealand.
 ABAD Fisheries got an award for outstanding export performance for the
following years; 2006, 2007, 2008 and 2009.

13. VISION
To be in the path of success through customer satisfaction.
To attain monopoly in the international market.
To make possible what others consider to be impossible by earnest and dedicated
service.
MISSION
To provide product of good quality and fair price.
To maintain smooth industrial relationship.

14. 1.3 PRODUCT PROFILE
1. Prawns, Shrimps and Lobsters.
a) HOSO, HLSO, PUD, PTO, PDTO, etc..
b) Raw, Blanchard or cooked.
2. Speciality products include:
a) Blast frozen Whole Squid.
b) IQF Block Frozen Octopus.
c) Whole Cleaned Cuttle Fish IQF
d) Squid.
e) Cuttle Fish Sashimi Grade Fillets.
3. Fishes.
a) Tuna.
b) Red Snapper.
c) Seer Fish.
d) Reef Cold.
e) Mackerel.
f) Pomp Fret.
g) Ribbon Fish.
h) Whole, Gutted, H&G, Fillets & Steaks.
4. Crabs.
a) Four species, soft shell crabs packed in moulded trays.
5. Bivales.
a) Grit and sand free baigai.
b) Calm and mussles

15. 2.LITERATURE REVIEW
1. "The analysis of financial statements is a process of evaluating the relationship between
component parts of financial statements to obtain a better understanding of the firm's
position and performance"
Metcalf, R.W. and P.L. Titard
Principles of Accounting
W.B, Saunders,1976, P-157
2. "Financial Performance Analysis is the process of selection, relation and evaluation"
Meigs, W.B and others
Intermediate Accounting, McGraw - Hill,
New York, 1978, P-1049
3. Global Data‟s Datum International Limited (DATP.PZ) - Financial Analysis provides a
comprehensive insight into the company‟s history, business structure and operations. The
report contains information on the company‟s key employees, key competitors and major
products and services, as well as detailed financial ratios for the last 5 years.
Pavlock (2000)
4. “A comparative study on the financial performance of Sakthi Finance ltd., and Annamalai
finance ltd., “focused mainly on growth and related problems in finance companies. In
her study she has observed that financial companies should maintain proper plan and
adequate efforts must be made to overcome the difficulties through better performance.
Kanchanna Devi (1998)
5. “Financial performance appraisal –A case study of associated cement companies
Ltd.,“focused on the performance appraisal of associated cement companies ltd. The
study has provided reliable financial information about economic resources an
obligations of a business and other needed information about changes in such resources
and obligations.
Sherly Roselyn (1994)

16. 6. Benchmarking begins with measuring and evaluating internal operating practices
followed by comparative analyses with those of external best-performing organizations.
This comparison facilitates identification of an organization's strengths and weaknesses.
Business practices of the industry's best performing, most profitable, and most productive
organizations are then adopted and evaluated using a continuous quality improvement
approach to assist organizations to become more efficient.
Gift & mosel (1994)
7. Examined the frame work of financial statement analysis in five years. The first part of
his study has focused on “return on asset performance”. It has examined the profitability
of solton company. He has examined the components related to return on sales and assets
management in depth. According to him, inefficient asset management will result in
destroyed market value of the company and will probably cause financial distress
problems which may even result in bankruptcy. He has also opined that if the weighted
average cost of capital on a before tax basis exceeds the return on assets, the company
would need to improve the performance through higher return on sales or increased asset
turnover or both.
George Gallingar (2000)
8. Finance is the lifeblood of business. Finance is most important function of organization.
Effective management of finance can do much more to the success of the business while
its ineffective management will undoubtedly lead to ensure failure of the business. In the
past few years the sugar industry has been facing several problems like mounting stocks,
controls by the government and underutilization of capacity. The financial analysis of
sugar unit was done by using Ratio analysis technique and analyzed previous five years
financial statements from 2004-2009. It was observed that the particular unit needs to
improve its liquidity position and should utilize its financial resources which is helpful
for increasing the profitability of sugar unit.
Sathe (2011)
9. Financial ratios are used to restate the accounting data in relative terms to identify some
of the financial strengths and weakness of a company. The objective in using a ratio when
analyzing financial information is simply to standardize the information being analyzed,
so that the comparison can be made between ratios of different firms or possibly the same
firm at different points in time.
Keown, Martin and Petty (2009)

17. 10. Financial analysis are undertaken to interpret the position of an enterprise. Financial
analysis includes the study of relationships within a set of financial statements at a point
in time. Analysis of financial statement is a process of evaluating the relationship
between component part of a financial statement to obtain a better understanding of a
firm‟s position and performance.
Sreevastava and Misra (2008)
11. Financial statement provide a summary of the accounts of a business enterprise, the
balance sheet reflecting the assets and liabilities and the income statement showing the
results of operations during a certain period. It emphasis the importance of balance sheet
and profit and loss account, but ignores the importance of other financial statement like
cash flow statement, fund flow statement ,and statement of retained earnings.
Myer(2006)
12. Financial statement is a process of evaluating the relation between component parts of a
financial statement to obtain a better understanding of a firm‟s position and performance.
Metcall and Tiford(2000)
13. Ratio analysis identifies potential frauds by computing the variance in asset of
transactions of then calculating the ratios for selected numeric fields. Three commonly
employed ratios are the ratio of the highest value to the lowest value, the ratio of the
highest value to the next highest , and the ratio of one numeric field to another , such as
the current year to the previous year or one operational area to another.
Coderre (2000)
14. The statement of profit and loss is the condensed and classified record of gains and losses
causing changes in the owners interest in the business for a period of time. Hence profit
and loss account in the statement of revenues earned and expenses incurred during a
particular period. It is prepared taking into consideration all expenses paid and payable
and all incomes received and receivable during a particular period, generally a year. The
excess of revenues earned over the expenditure incurred is termed as profit or earnings
and excess of expenditure incurred over the revenues earned is termed as loss.
Guttmann, (2002)

18. 15. Financial statement analysis is useful both to help anticipate future conditions and
more important as a starting point for planning action that will improve firm‟s future
performance.
Brighain (1999)
16. Ratio analysis is a widely used tool of financial analysis. It is defined as the
systematic use of ratio to interpret financial statements so that the strengths and
weaknesses of a firm, as well as its historical performance and current financial
condition can be determined. Ratios are relative figures reflecting the relationship
between related variables.
Khan and PK Jain, (2000)
17. financial ratio analysis doesn‟t involve just comparing different numbers from the
balance sheet, income statement, and cash flow statement. It‟s comparing the number
against previous years, other companies, the industries or even the economy in
general. It‟s an excellent method for determining the overall financial condition of a
business. Ratios can also help you spot potential threats to company health to help
you decide where to dive deeper into the analysis.
Ismael.D. Tabije (2002)

19. 3.RESEARCH METHODOLOGY
A research methodology defines what the activity of research is, how to proceed, how to measure
progress, and what constitutes success. Thus the nature and scope of the research greatly affects
the choice of the method to be adopted for the collection of research data. Availability of time and
finance also affects the choice of methods for collecting primary data. Thus in simple terms
research methodology may be considered as science and art of conducting a research throughout.
3.1 OBJECTIVES OF STUDY
The main objective of the study is to carryon brief study on "Analysis of three year
balance sheet of ABAD through comparative balance sheet in Comparative Statement" through
this I am able to get the differences of various assets and liabilities of ABAD Fisheries.
Other objectives of this project are as follows:
PRIMARY OBJECTIVE
To find out the financial performance of the company.
SECONDARY OBJECTIVE
To estimate the earning capacity of the firm and the long term liquidity.
Comparative study of three year annual reports.
To analyse the trend for the past three years.
3.2 SCOPE OF STUDY
Ratio analysis consists of calculating financial performance using basic types of
ratios: profitability, liquidity, activity, debt and market.
Ratio analysis consists of the calculation of ratios from financial statements and is
a foundation of financial analysis.

20. A financial ratio, or accounting ratio, shows the relative magnitude of selected
numerical values taken from those financial statements.
Availability of cash over short term: ability to service short-term debt.
3.3 LIMITATIONS OF THE STUDY
The study is purely based on the data available in the form of annual reports.
Analysis is only means and not ends of itself different people interpreting the
same analysis in the different ways.
The overall financial performances taken consideration without taking into
account the minute values for individual values.
This study provides the information regarding the analysis on p & L A/C and
Balance Sheet only.
PERIOD OF THE STUDY: The time allowed to do the project work is from July 15th
to September 15th
2013.
TOOLS USED FOR THE STUDY
1. Ratio analysis
2. Trend analysis
3. Comparative balance sheet
4. Common size balance sheet

21. 4. FINANCIAL ANALYSIS AND INTERPRETATION
A financial statement (or financial report) is a formal record of the financial activities of a business,
person, or other entity. Relevant financial information is presented in a structured manner and in a form
easy to understand. They typically include, balance sheet and profit & loss account. Financial statements
are intended to be understandable by readers who have a reasonable knowledge of business and economic
activities and accounting and who are willing to study the information diligently. Financial statements may
be used by users for different purposes:
Owners and managers require financial statements to make important business decisions that
affect its continued operations. Financial analysis is then performed on these statements to
provide management with a more detailed understanding of the figures. These statements are
also used as part of management's annual report to the stockholders.
Employees also need these reports in making collective bargaining agreements (CBA) with
the management, in the case of labor unions or for individuals in discussing their
compensation, promotion and rankings.
Prospective investors make use of financial statements to assess the viability of investing in a
business. Financial analyses are often used by investors and are prepared by professionals
(financial analysts), thus providing them with the basis for making investment decisions.
Financial institutions (banks and other lending companies) use them to decide whether to
grant a company with fresh working capital or extend debt securities (such as a long-
term bank loan or debentures) to finance expansion and other significant expenditures.
The objective of financial statements is to provide information about the financial position, performance
and changes in financial position of an enterprise that is useful to a wide range of users in making
economic decisions. Financial statements should be understandable, relevant, reliable and comparable.
Reported assets, liabilities, equity, income and expenses are directly related to an organization's financial
position. Financial statements have been created on paper for hundreds of years. The growth of the Web
has seen more and more financial statements created in an electronic form which is exchangeable over the
Web. Common forms of electronic financial statements are PDF and HTML. These types of electronic
financial statements have their drawbacks in that it still takes a human to read the information in order to
reuse the information contained in a financial statement.
More recently a market driven global standard , XBRL (Extensible Business Reporting
Language), which can be used for creating financial statements in a structured and computer
readable format, has become more popular as a format for creating financial statements. Many
regulators around the world such as the U.S. Securities and Exchange Commission have
mandated XBRL for the submission of financial information.

22. The UN/CEFACT (the United Nations Centre for Trade Facilitation and Electronic Business)
created, with respect to Generally Accepted Accounting Principles, (GAAP), internal or
external financial reporting XML messages to be used between enterprises and their partners,
such as private interested parties (e.g. bank) and public collecting bodies (e.g. taxation
authorities). Many regulators use such messages to collect financial and economic information.
FINANCIAL ANALYSIS:
Financial analysis (also referred to as financial statement analysis or accounting
analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability
of a business, sub-business or project. It is performed by professionals who prepare reports using
ratios that make use of information taken from financial statements and other reports. These
reports are usually presented to top management as one of their bases in making business
decisions. It is the process of identifying the financial strength and weakness of a firm from the
available accounting data and financial statement. The analysis is done by properly establishing
the relationship between the items of balance sheet and profit & loss account.
TYPES OF FINANCIAL ANALYSIS
1. External Analysis:-
External analysis of financial statement is made by those who do not have access to the detailed
accounting records of the company, i.e., banks, creditors and general public. These people depend
almost entirely on published financial statement. The main objective of such analysis varies from
party to party.
According to
materials used
According to
modus operandi
According to the
objectives of
analysis
Internal
analysis Short term
analysis
Vertical
analysis
Horizontal
analysis
Long term
analysis
External
analysis

23. 2. Internal Analysis:-
Such analysis is made by the finance and accounting department to help the top management.
These people have direct approach to the relevant financial records. So they can peep behind the
two basic financial statement and narrate the inside story, such analysis emphasis on the
performance appraisal and assessing the profitability of different activities.
3. Horizontal Analysis:-
When the financial statement for a number of years are reviewed and analyzed, the analysis is
called horizontal analysis. The preparation of comparative statement is an example of horizontal
analysis. As it is based on data from year to year, rather than o one data or period or time as a
whole, this is also known as “Dynamic Analysis.”
4. Vertical Analysis:-
Vertical analysis is also known as “Static Analysis.” When ratios are calculated from the Balance
Sheet of one year, it is called vertical analysis. It is not very useful for long-term planning as it
does not include the trend study for future.
5. Long-term Analysis:-
In the long term the company must earn a minimum amount sufficient to maintain a suitable rate
of return on the investment to provide for the necessary growth and development of the company
and to meet the cost of capital. Thus, in the long run analysis the stress is on the stability and
earning potentiality of the concern. In long term analysis the fixed assets, long term debt
structure and the ownership interest is analyzed.
6. Short-term Analysis:-
The short term analysis of financial statement is mainly concerned with the working capital
analysis. In the short run a company must have ample funds readily available to meet its current
needs and sufficient borrowing capacity to meet the contingencies. Hence, in short term analysis,
the current assets and current liabilities are analyzed and cash position of the concern is
determined. For short term analysis the Ratio Analysis is very useful.

24. OBJECTIVES:
1. To estimate the earning capacity of the firm.
2. To gauge the financial position and financial performance of the firm.
3. To determine the long-term liquidity of the funds.
4. To judge the solvency of the firm.
5. To determine the debt capacity of the firm.
6. To decide about the future prospectus of the firm.
7. To know the progress of the firm.
8. To measure the efficiency of operations
METHODS OR DEVICES OF FINANCIAL ANALYSIS:
The analysis and interpretation of financial statement is used to determine the financial position
and results of operations as well. A number of methods or devices are used to study the
relationship between different statements. An effort is made use those devices which clearly
analyse the position of the enterprise. The following methods of analysis are generally used;
 Ratio analysis.
 Trend analysis.
 Comparative balance sheet.
 Common size balance sheet.
 RATIO ANALYSIS
Ratio analysis is one of the most important financial tools which has come to be used very
frequently for analyzing the financial strength and weakness of the enterprise. Ratio analysis is a
technique of analysis and interpretation of financial statements. It is the process of establishing
and interpreting various ratios for helping in making certain decisions.
Ratio may be expressed in either of three ways. It may be a quotient obtained by dividing one
value by the other. This unit of expression is called as „times‟.
If the quotient is multiplied by one hundred, the unit of expression becomes „percentage‟. It may
also be stated in terms of proportion between the two figures. Thus times, percentage and
proportion are the three forms of expressing ratio.

25. ADVANTAGES
 It makes it easy to grasp the relationship between various items and helps in
understanding the financial statements.
 Inter firm comparisons can be made with the help of ratios, which may help management
in evolving future „market strategies‟.
 It throws light on the degree of efficiency of the management and utilization of the assets
and that is why it is called surveyor of efficiency. They help management in decision
making.
A. LIQUIDITY RATIO
1. Current ratio
Current Ratio is the most common ratio for measuring liquidity. It represents the
ratio of current assets to current liabilities. It is also called Working Capital Ratio, is a
measure of general liquidity and is most widely used to make the analysis of a short-term
financial position or liquidity of a firm. It is calculated by dividing the total of current
assets by current liabilities.
Current Ratio= Current Assets/Current Liabilities
2. Quick ratio.
This ratio is also known as acid test ratio, is a more rigorous test of liquidity than
the current ratio. The term liquidity refers to the ability of a firm to pay its short-term
obligations and when they become due. Quick ratio may be defined as the relationship
between liquid assets and current or liquid liabilities. An asset is said to be liquid if it can
be converted into cash within a short period without loss of value. The quick ratio can be
calculated by dividing the total of the quick assets by current liabilities.
Quick ratio = quick or liquid assets/current liabilities.
3. Absolute liquid ratio.
This ratio is obtained by dividing cash and marketable securities by current
liabilities. It is also known as cash position ratio. Some authorities are of the opinion that
the absolute liquid ratio should also be calculated together with current ratio and acid test
ratio so as to exclude even receivables from the current assets and find out the absolute
liquid assets.
Absolute liquid ratio= absolute liquid assets/current liabilities.

26. B. LEVERAGE RATIO
1. Debt- equity ratio.
The relationship between borrowed funds and owner‟s capital is a popular
measure of the long term financial solvency of a firm. This relationship is shown by
the debt-equity ratio. This ratio indicates the relative proportion of debt and equity in
financing the assets of a firm. This ratio is computed by dividing the total debt of the
firm by its worth.
Debt-equity ratio= debt/equity
2. Proprietary ratio.
A variant to the debt equity ratio is the proprietary ratio, also known as equity
ratio or shareholder‟s to total equities ratio or net worth or total assets ratio. This ratio
establishes the relationship between shareholder‟s funds to total assets of the firm.
The ratio is important for determining long term solvency of a firm. The components
of this ratio are shareholder‟s fund or proprietor‟s funds and total assets.
Proprietary ratio=shareholder‟s funds/total assets
3. Fixed asset to net worth ratio.
This ratio shows the relationship between fixed assets and shareholders fund. The
purpose of this ratio is to find out the percentage of the owners fund invested in fixed
assets.
Fixed assets to net worth= fixed assets/shareholders fund.
C. ACTIVITY RATIO.
These ratios are also called as “turnover ratios or efficiency ratios”. It shows the
operational efficiency of the business concern. Activity ratios measure how efficient the
assets are employed by the firm. This ratio indicates the speed with which assets are
converted into sales.
1. Total assets turnover ratio.
A firm‟s ability to produce a large volume of sales for a given amount of net assets is
the most important aspect of its operating performance. It shows the firm‟s operating
efficiency. This ratio shows the firm‟s ability in generating sales from all financial
resources committed to assets.
Total assets turnover ratio= net sales/net total assets.

27. 2. Fixed asset turnover ratio.
It measures the capacity of utilization and the quantity of fixed assets. This ratio
expresses the number of times fixed assets are being turned over. This ratio shows the
relationship between sales and fixed assets. Thus ratio shows how the fixed asset will
be used in the business. Higher the ratio, indicate the better performance.
Fixed asset turnover ratio= net sales/fixed asset.
3. Inventory turnover ratio.
It shows how rapidly the inventory is turning into receivables through sales.
Inventory ratio expresses the relationship between sales and inventory. It denotes the
efficiency in inventory management. Its purpose is to measure the liquidity of the
inventory.
Inventory turnover ratio=sales/average stock.
Average stock= opening + closing/2
4. Debtor’s turnover ratio.
It indicates the number of times debtor‟s turnover each year. It measures the ratio of
account receivables and tells about the efficiency of the credit policy of the company.
Higher the ratio indicates more efficiency in the credit management.
Debtor‟s turnover ratio=net sales/sundry debtors.
5. Average collection period.
It indicates how fast the debtors of the firm are get collected. Shorter the average
collection period, better will be the quality of the debtors.
Average collection period=sundry debtors/sales * 360.
6. Inventory holding period.
The number of day‟s inventory is also known as average inventory period and
inventory holding period. A high number of days inventory indicates that there is a
lack of demand for the product being sold. A low day inventory ratio may indicate
that the company is not keeping enough stock on hand to meet demands.
Inventory holding period=inventory/sales * 360

28.  COMPARATIVE BALANCE SHEET
Comparative Balance Sheet is the study of the trend of the same item, group of item and
computed item in two or more Balance Sheet of the same business enterprises on different date.
The changes in periodic balance sheet items reflect the conduct on the business. The changes can
be observed by comparison of the balance sheet at the beginning and end of the period and these
changes help in forming an opinion about the progress of an enterprise. The comparative Balance
Sheet has two Colum for the data for original balance sheet. A third column is used to show
increase in figures, the forth column may be added for giving percentage or increase and decrease.
As per the name suggesting, it is the method of comparing the assets and liabilities of two or more
different dates. Hence we can find the increase or decrease in those items. It is very useful in
studying the trends in an enterprise. It is helpful to know;
i. Current financial position and liquidity position.
ii. Long term financial position.
iii. Profitability of the concern.
 TREND ANALYSIS
Trend ratios are also an important tool of horizontal financial analysis. Under this technique
of financial analysis, the ratios of different items for various periods are calculated and then a
comparison is made. The method of trend percentage is a useful analytical device for the
management since by substituting percentages for large amounts; the brevity and readability are
achieved. An aspect of technical analysis that tries to predict the future movement of a stock
based on past data. Trend analysis is based on the idea that what has happened in the past gives
traders an idea of what will happen in the future. Trend analysis provide important information
regarding historical performance and growth and given a sufficiently long history of accurate
seasonal information, can be of great assistance as a planning and forecasting tool for
management and analysis. Trend analysis is also an important and useful technique of financial
statement analysis. Trend means any general tendency. Analysis discloses the direction of
change upward or downward in financial and operating data during the period under review by
linking each statement item into same base year. Generally the first year is taken as base year.
The analysis of trend is highlighted; such analysis is very significant for forecasting the business
events. It might also be useful to compare such trends with similar trends in the firm generally
and in the industry concerned particularly. Being a horizontal analysis of financial statement, it is

29. often called the pyramid method of ratio analysis. There are three main types of trends: short-,
intermediate- and long-term.
 COMMON SIZE BALANCE SHEET.
A company balance sheet that displays all items as percentages of a common base figure . This
type of financial statement can be used to allow for easy analysis between companies or between
time periods of a company. Comparative statements that give only the vertical percentage ratio for
financial data without giving rupee values are known as common size statements. They are also
known as 100% statements. A statement in which balance sheet items are expressed as percentage
of each asset to total asset and percentage of each liability to liabilities is called common size
balance sheet.
RATIO ANALYSIS:
Ratio analysis helps to analysis and understands the financial health and trend of
a business. Past performance and future projection could be reviewed through the ratio analysis
easily.
1. CURRENT RATIO:
Current ratio is the most common ratio for measuring liquidity. It represents the ratio
of current assets to current liabilities. It is calculated by dividing the total of current assets by
current liabilities.
Current Ratio=Current Assets/Current liabilities.
Year Current assets Current liabilities Current ratio
2008-09 2369.48 326.18 7.26
2009-10 2539.52 605.43 4.19
2010-11 3182.75 653.34 4.90

30. INTERPRETATION:
Current ratio of the ABAD FISHERIES shows a dual trend. The standard norm of current ratio
of the firm is 2:1. In the year 2008-2009 the ratio was 7.26 and then it decreased to 4.19 in the
year 2009-2010., but after that in the year 2010-11 it shows a slight increase in the ratio,ie;4.90
From the chart it is clear that the current ratio is increased in the year 2010-2011. Hence the
current ratio of ABAD is almost satisfactory.
2. QUICK RATIO
This ratio is also known as Acid Test or Liquid Ratio, is a more rigorous test of liquidity than
the current ratio. The term „liquidity‟ refers to the ability of a firm to pay its short-term
obligations and when they become due. Quick ratio may be defined as the relationship between
quick/liquid assets and current or liquid liabilities. The quick ratio can be calculated by dividing
the total of the quick assets by current liabilities.
Quick Ratio= Quick or Liquid Assets/ Current Liabilities
Year Quick asset Current liabilities Quick ratio
2008-09 1871.26 326.18 5.73
2009-10 2012.57 605.43 3.32
2010-11 2291.90 653.34 3.50
0
1
2
3
4
5
6
7
8
2008-09 2009-10 2010-11
current ratio
current ratio

31. INTERPRETATION:
Quick Ratio of 1:1 is considered to represent a satisfactory current financial condition. The quick
ratio of ABAD shows a dual character. In the year 2008-09 it is 5.73 and next year it has ben
declined to 3.32 and started increasing from the very next year 2010-11.From this, it can be
understood that the company has liquid asset sufficient to provide a cover to current liability and
ABAD can meet all its current liabilities.
3 . DEBT EQUITY RATIO.
A measure of a company's financial leverage calculated by dividing its total liabilities by
stockholders' equity. It indicates what proportion of equity and debt the company is using to
finance its assets.
Total liability/share holders equity
year Total liability Share holders equity Debt equity ratio
2008-09 3200.84 882.84 3.62
2009-10 3403.46 354.30 9.6
2010-11 4148.86 600.62 2.6
0
1
2
3
4
5
6
7
2008-09 2009-10 2010-11
quick ratio
quick rario

32. Interpretation:
A high debt/equity ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the additional interest
expense. If a lot of debt is used to finance increased operations (high debt to equity), the
company could potentially generate more earnings than it would have without this outside
financing.
4. INVENTORY TURNOVER RATIO.
A ratio showing how many times a company's inventory is sold and replaced over a period. The
days in the period can then be divided by the inventory turnover formula to calculate the days it
takes to sell the inventory on hand or "inventory turnover days."
ITR = Cost of goods sold / average inventory
YEAR COST OF GOODS
SOLD
AVERAGE
INVENTORY
RATIO
2009-10 7966.03 512.58 15.5
2010-11 9796.81 708.91 13.8
0
2
4
6
8
10
12
2008-09 2009-10 2010-11
DEBT EQUITY
DEBT EQUITY

33. INTERPRETATION:
A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either
strong sales or ineffective buying. High inventory levels are unhealthy because they represent an
investment with a rate of return of zero. It also opens the company up to trouble should prices
begin to fall.
A low turnover is usually a bad sign because products tend to deteriorate as they sit in a
warehouse.
Companies selling perishable items have very high turnover.
5. NET PROFIT MARGIN.
This ratio is also called as the net profit to sales or net profit ratio. It is determined by dividing
the net income after tax to the net sales for the period and measures the profit per rupee of sales.
Net profit ratio= Net profit/ Net sales*100
YEAR NET PROFIT NET SALES RATIO
2008-09 667.84 8005.05 8.34
2009-10 1139.30 7966.03 14.30
2010-11 1379.62 9796.81 14.08
12.5
13
13.5
14
14.5
15
15.5
16
2009-10 2010-11
INVENTORY TURNOVER RATIO
INVENTORY TURNOVER
RATIO

34. INTERPRETATION:
This ratio is used to measure overall profitability and hence it is very useful to proprietors. It is
an index of efficiency and profitability of the business. In 2008-09 the ratio is 8.34, in 2009-10 it
increases to 14.30 and in 2010-11 it shows a slight change ie, 14.08.
6. DEBTORS TURNOVER RATIO.
Debtors turnover ratio indicates the number of items debtors turn over each year. It tells about
the efficiency of the credit policy of the company. Higher the ratio indicates, more efficient in
the management of credit. Debtor‟s turnover ratio expresses the relationship between sales and
debtors. It reflects the efficiency with which the debtors are turned over into cash. It refers to
how fast the collection from customers is made.
Debtors Turnover Ratio= Sales/ Sundry debtors.
YEARS SALES SUNDRY DEBTORS RATIO
2008-09 8005.05 913.580 8.76
2009-10 7966.03 976.06 8.16
2010-11 9796.81 1249.75 7.83
0
2
4
6
8
10
12
14
16
2008-09 2009-10 2010-11
NET PROFIT RATIO
NET PROFIT RATIO

35. INTERPRETATION:
It also measures the liquidity of company. Higher the ratio lowers the average debtors to the
credit sales. The debtor‟s turnover ratio is varying over the study period. It is found from
debtor‟s ratio that the turnover from debtors shows fluctuations in each year. In 2008-2009 it is
higher, ie 8.76 but in 2010-2011 it decreases to 7.83.
7. EXPENSE RATIO.
YEAR TOTAL EXPENSE TOTAL SALES RATIO
2008-09 8443.27 8005.05 1.055
2009-10 8401.15 7966.03 1.054
2010-11 10440.84 9796.81 1.065
7.2
7.4
7.6
7.8
8
8.2
8.4
8.6
8.8
9
2008-09 2009-10 2010-11
DEBTORS TURNOVER RATIO
DEBTORS TURNOVER
RATIO

36. INTERPRETATION: From the data it is clear that the expense is little bit higher than the amount
of sales.
8. PROPRIETORY RATIO.
A variant to the debt-equity ratio is the proprietary ratio which is also known as Equity ratio or
Shareholders to Total Equities Ratio or Net Worth or Total Assets Ratio. This ratio establishes
the relationship between shareholders funds to total assets of the firm. This ratio shows the
financial strength of the company. It helps the creditors to find out the proportion of shareholders
fund in the total assets. Higher ratio indicates a secured position to creditors and low ratio
indicates greater risk to creditors.
YEAR SHAREHOLDERS
EQUITY
TOTAL ASSETS RATIO
2008-09 883 3200 0.275
2009-10 1354 3403 0.397
2010-11 1601 4149 0.385
1.048
1.05
1.052
1.054
1.056
1.058
1.06
1.062
1.064
1.066
2008-09 2009-10 2010-11
EXPENSE RATIO
EXPENSE RATIO

37. INTERPRETATION:
The proprietary ratio of ABAD is 0.275 in the year 2008-09, in 2009-10 it increases to 0.397 and
then it decreases to 0.385 in the year 2010-11 but in 2010-2011
9. FIXED ASSET TO NETWORTH RATIO.
This ratio shows the relationship between fixed assets and shareholders fund. The purpose of this
ratio is to find out the percentage of the owners fund invested in fixed assets. If the ratio is
greater than one, it means that creditors fund have been used to acquire a part of the fixed assets.
If the ratio is less than 100%, it implies that owner‟s funds are more than total fixed assets and a
part of working capital is provided by the shareholders. When the ratio is more than 100%, it
implies that owner‟s fund are not sufficient to finance the fixed assets and the firm has to depend
upon outsiders to finance the fixed assets.
Fixed assets to net worth ratio=Fixed assets/ Shareholders fund
YEAR FIXED ASSETS SHAREHOLDERS
FUND
RATIO
2008-09 831 883 0.94
2009-10 864 1354 0.63
2010-11 966 1601 0.60
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
2008-09 2009-10 2010-11
PROPRIETORY RATIO
PROPRIETORY RATIO

38. INTERPRETATION:
The fixed asset ratio helps in ascertaining the long-term solvency of a firm which depends
basically on whether the firm has adequate resources to meet its long-term funds requirement.
The ratio should not be more than 1. If it is less than 1, it shows that a part of the working capital
has been financed through long-term funds. During the period of study the ratio shows a
decreasing trend, it is favorable to the organization.
10. FIXED ASSET TURNOVER RATIO
This ratio expresses the number of items fixed assets are being turned over. This ratio shows the
relationship between sales and fixed assets. Thus ratio shows how will the fixed assets are being
used in the business. It measures the capacity of utilization and the quantity of fixed assets higher
the ratio indicates the better performance.
Fixed Asset Turnover Ratio= Sales/Fixed Asset
YEAR SALES FIXED ASSETS RATIO
2008-09 8005.05 831 9.63
2009-10 7966.03 864 9.21
2010-11 9796.81 966 10.14
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2008-09 2009-10 2010-11
FIXED ASSET TO NET WORTH
FIXED ASSET TO NET
WORTH

39. INTERPRETATION:
The effective utilization of fixed assets shows a higher ratio in the year 2010-2011. The ratio is
10.14 which is highest in the study period of time and the least is in the year 2009-2010 which is
9.21. Higher the ratio indicates the better performance of the company.
11. WORKING CAPITAL TURNOVER RATIO
This ratio reflects the turnover of the firm‟s net working capital in the course of year.A
measurement comparing the depletion of working capital to the generation of sales over a given
period. This provides some useful information to how effectively a company is using its working
capital to generate sales. The working capital turnover ratio is used to analyze the relationship
between the money used to fund operations and the sales generated from these operations.
Working Capital Turnover Ratio= Sales/ Net Working Capital
YEAR SALES NET WORKING
CAPITAL
RATIO
2008-09 8005.05 2043.03 3.91
2009-10 7966.03 1934.09 4.11
2010-11 9796.81 2529.41 3.87
8.6
8.8
9
9.2
9.4
9.6
9.8
10
10.2
10.4
2008-09 2009-10 2010-11
FIXED ASSET TO TURNOVER RATIO
FIXED ASSET TO
TURNOVER RATIO

40. INTERPRETATION:
The highest net working capital is favorable for the company‟s liquidity position. During the
year 2008-09 ratio is 3.91; in the next year 2009-2010 it increases to 4.11. Then it was decreased
to 3.87 in the year 2010-2011.
12. TOTAL ASSET TURNOVER RATIO
A firm‟s ability to produce a large volume of sales for a given amount of net assets is the most
important of its operating performance. It shows the firm‟s operating efficiency. This ratio shows
the firm‟s ability in generating sales from all financial resources committed to total assets. Asset
turnover ratios indicate how efficiently the firm utilizes its assets.
Total Asset Turnover Ratio= Net Sales/ Net Total Assets
YEAR NET SALES NET TOTAL
ASSETS
RATIO
2008-09 8005.05 2874.66 2.78
2009-10 7966.03 2798.03 2.84
2010-11 9796.81 3495.51 2.80
3.75
3.8
3.85
3.9
3.95
4
4.05
4.1
4.15
2008-09 2009-10 2010-11
WORKING CAPITAL TURNOVER RATIO
WORKING CAPITAL
TURNOVER RATIO

41. INTERPRETATION: This ratio implies the firm‟s ability in generating sales from all financial
resources committed to total assets. The highest turnover ratio is shown in the year 2009-2010
and lowest in the year 2008-2009.
13. CURRENT ASSET TO WORKING CAPITAL RATIO
This ratio shows the relationship between total current assets in the firm and net working capital
in the firm. Current asset and working capital are closely related to each other because if a firm is
said to be in a good working capital position high current assets are needed than the current
liabilities.
Current Asset to Working Capital Ratio=Current Asset/ Net Working Capital.
YEAR CURRENT ASSET NET WORKING
CAPITAL
RATIO
2008-09 2369.48 2043.03 1.15
2009-10 2539.52 1934.09 1.31
2010-11 3182.75 2529.41 1.25
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2008-09 2009-10 2010-11
TOTAL ASSET TURNOVER RATIO
TOTAL ASSET TURNOVER
RATIO

42. INTERPRETATION: This ratio shows a dual character both increasing and decreasing trend. It
shows the firm‟s working capital position is fluctuating. The lowest ratio is shown in the year
2008-2009 and the highest ratio is shown in the year 2009-2010. It shows an increasing trend in
every year.
14. AVERAGE COLLECTION PERIOD
Average collection period indicates how fast the debtors of the firm are got collected. Shorter
the average collection period, better will be the quality of the debtors.
Average Collection Period= Sundry Debtors/ Sales*360
YEARS SUNDRY DEBTORS SALES DAYS
2008-09 913.580 8005.05 41.08
2009-10 976.06 7966.03 44.11
2010-11 1249.75 9796.81 45.92
1.05
1.1
1.15
1.2
1.25
1.3
1.35
2008-09 2009-10 2010-11
CURRENT ASSET TO WORKING CAPITAL
RATIO
CURRENT ASSET TO
WORKING CAPITAL RATIO

43. INTERPRETATION: The debtor‟s turnover ratio and average collection period is having inverse
relationship. Higher the turnover ratio lower will be the average collection period. Shorter
collection period indicates prompt payment by the debtors. The highest collection period is
shown in the year 2010-2011 and the lowest is shown in the year 2008-2009.
38
39
40
41
42
43
44
45
46
47
2008-09 2009-10 2010-11
DAYS
DAYS

44. 2. COMPARATIVE BALANCE SHEET
COMPARATIVE BALANCE SHEET AS ON 2009-10 (IN LAKHS)
PARTICULARS 2009 2010
INCREASE/
DECREASE PERCENTAGE
Fixed Assets 821.21 850.61 29.4 3.5
Current Assets 2369.48 2539.52 170.0 7.2
Other Assets
(a) Investment 1.187 1.177 -0.1 -8.4
(b) Deferred tax assets 8.126 11.729 3.6 44.3
(c )Miscellaneous expenses 0.838 0.419 -0.4 -47.73
TOTAL ASSETS 3200.84 3403.46 202.62 6.33
Current Liability 326.18 605.43 279.3 85.6
Other Liability
Share Capital 200.00 200.00 0 0
Reserves And Surplus 682.84 1154.29 471.45 69.04
Secured Loans 1097.88 594.46 -503.42 -45.85
Unsecured Loans 893.92 849.26 -44.66 -4.99
TOTAL LIABILITIES 3200.84 3403.46 202.62 6.33

45. COMPARATIVE BALANCE SHEET AS ON 2010-11 (IN LAKHS)
PARTICULARS 2010 2011
INCREASE/
DECREASE PERCENTAGE
Fixed Assets 850.61 948.56 97.9 11.5
Current Assets 2539.52 3182.75 643.2 25.3
Other Assets
(a) Investment 1.177 1.177 0.0 0.0
(b) Defferred tax assets 11.729 16.379 4.7 39.6
(c ) Miscellaneous expenses 0.419 0 -0.4 -100.0
TOTAL ASSETS 3403.46 4148.86 745.4 21.9
Current Liability 605.43 653.35 47.9 7.9
Other Liability
Share Capital 200.00 206.00 6 2.91
Reserves And Surplus 1154.29 1394.62 240.33 17.23
Secured Loans 594.46 957.85 363.39 37.93
Unsecured Loans 849.26 937.03 87.77 9.36
TOTAL LIABILITIES 3403.46 4148.86 745.4 21.9

46. 3 .COMMON SIZE BALANCE SHEET
THREE YEAR COMMON SIZE BALANCE SHEET
LIABILITIES 2008-09 % 2009-10 % 2010-11 %
Shareholders fund
Share Capital 20000000.00 6.25 20000000.00 5.88 20600000.00 4.97
Reserves and
Surplus
68284806.04 21.33 115429927.80 33.92 139462994.60 33.61
Loans funds;
Secured Loans 109788647.30 34.30 59446874.89 17.47 95785731.76 23.09
Unsecured loans 89392669.95 27.93 84926211.88 24.95 93703130.24 22.59
Current Liabilities 28836424.69 9.01 54603889.47 16.04 61545200.21 14.83
Provision 3782059.46 1.18 5939162.43 1.75 3789719.00 0.91
TOTAL 320084607.44 100.00 340346066.47 100.00 414886775.81 100.00
ASSETS
Fixed Assets
Gross Block 114964951.70 128821421.90 150049157.00
less: Depreciation 32843609.00 43760095.88 55193042.60
Net Block 82121342.67 25.66 85061326.00 24.99 94856114.39 22.86
Investments 118700.00 0.04 117700.00 0.03 117700.00 0.03
Deferred Tax
Payments
812600.00 0.25 1172930.00 0.34 1637900.00 0.39
Current assets, Loans &
Advances;
Inventories 49821819.60 15.57 52695168.00 15.48 89084935.50 21.47
Sundry Debtors 91358042.56 28.54 97606164.76 28.68 124975291.50 30.12
Cash and Bank
Balances
36160488.54 11.30 47937497.27 14.08 3987251.92 0.96
Loans and Advances 59607814.06 18.62 55713380.47 16.37 100227582.50 24.16
TOTAL CURRENT ASSETS 236948164.76 253952210.50 318275061.42
MISCEL/EXPENDITURE 83800.00 0.03 41900.00 0.01 0.00 0.00
TOTAL 320084607.43 100.00 340346066.50 100.00 414886775.81 100.00

47. 6.25
21.33
34.30
27.93
9.01
1.18
2008-09 Liabilities
Share Capital
Reserves and
Surplus
Secured Loans
Unsecured loans
Current
Liabilities
Provision
0.03
18.62
11.30
28.54
15.57
0.25
0.04
25.66
2008-09 Assets
MISCELLANEOUS
EXPENDITURE
Loans and Advances
Cash and Bank Balances
Sundry Debtors
Inventories
Deferred Tax Payments
Investments
Net Block
5.88
33.92
17.47
24.95
16.04
1.75
2009-10 Liabilities
Share Capital
Reserves and
Surplus
Secured Loans
Unsecured loans
Current Liabilities
Provision
24.99
0.03
0.3415.48
28.68
14.08
16.37
0.01
2009-10 Assets
Net Block
Investments
Deferred Tax
Payments
Inventories
Sundry Debtors
Cash and Bank
Balances
Loans and Advances
MISCELLANEOUS
EXPENDITURE
4.97
33.61
23.09
22.59
14.83
0.91
2010-11 Liabilities
Share Capital
Reserves and
Surplus
Secured Loans
Unsecured loans
Current Liabilities
Provision
22.86
0.03
0.39
21.47
30.12
0.96 24.16
0.00
2010-11 Assets
Net Block
Investments
Deferred Tax Payments
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
MISCELLANEOUS
EXPENDITURE

48. 4. TREND ANALYSIS.
YEARS EXPENDITURE NETPROFIT SALES
2008-09 8443.27 667.84 8005.05
2009-10 8401.15 1139.29 7966.03
2010-11 10440.84 1379.62 9796.81
0
2000
4000
6000
8000
10000
12000
2008-09 2009-10 2010-11
NET SALES
NET PROFIT
EXPENDITURE

49. 5.FINDINGS
Profits for the year 2011 has decreased dramatically compared to 2010 as follows
2010 2011 Inc./Dec. %
Op. Profit 83512327 51684418 -31827909 -38
PBT 71548915 37568097 -33980818 -47
PAT 47145122 24033067 -23112055 -49
Elevated manufacturing, selling and administration costs are major charge against
revenue.
Though, in 2011 there is substantial increase (of 19%) in the revenue generated by the
company compared to 2010.
In 2011 Gross Profit margin has decreased to 23% from 25% of 2010.
Additional share capital of 6lakhs was introduced in 2011
Company holds a huge surplus fund of around 14crores which is double than of 2009.
Liquidity position is satisfactory but when it comes to Quick Ratio, company‟s liquid
cash position in 2011 (.6) is not satisfactory.
They have a highly leveraged capital structure; it is more risky as the debt equity ratio is
greater than 1:1. In 2011 DER is brought downed to 2.6 from 9.6 of 2010.
Their return on investment is 33%. An Expense ratio 1.1 shows that they are able to cover
their expenses from revenues.
In 2011there is 11.5% increase in assets holdings compared to 2010.
69% increase in closing inventory (in 2011) compared to 2010 shows that company needs
to review their inventory management.
Closing stock alone constitutes 21% of total assets.
Working capital management is very essential for the firm as current assets constitutes
lion part of the total assets.
Cash balance dropped 92% than 2010 levels which may cause cash management
problems.
Debtors turnover ratio decreased to 7.8 as compared to 2010, elevated closing stock and
decreased DTR are like a two edged sword.
Operating expense of the company is slightly high.

50. 6.SUGGESTIONS
To improve GP margin firm have to undertake intelligent material sourcing.
Marketing efforts should be result oriented to reduce selling costs.
Take necessary care to improve production capacity in order to meet its current demand
and also to reduce the operating expenses.
Inventory management need to be improved to determine optimum inventory levels.
Credit policy need to be reviewed to improve debtors turnover ratio.
Cost control and cost reduction techniques have to be implemented to increase profit
margins.
They have to improve cash management. This can be made more meaningful by utilizing
the investment avenues. Over the years no efforts are taken to make improve investments.
Company should maintain proper plan and adequate efforts must be made to overcome
the difficulties through better performance.

51. 7.CONCLUSIONS
The focus of financial analysis is on key figures contained in the financial statements and the
significant relationship that exits. The reliability and significance attach to the ratios will largely
on hinge upon the quality of data on which they are best. They are as good for as bad as the data
itself .Financial ratios are a useful by product of financial statement and provide standardized
measures of firms financial position, profitability and riskiness. It is an important and powerful
tool in the hands of financial analyst. By calculating one or other ratio or group of ratios he can
analyze the performance of a firm from the different point of view.
The ratio analysis can help in understanding the liquidity and short-term solvency of the firm,
particularly for the trade creditors and banks. Long-term solvency position as measured by
different debt ratios can help a debt investor or financial institutions to evaluate the degree of
financial risk. The operational efficiency of the firm in utilizing its assets to generate profits can
be accessed on the basis of different turnover ratios.
The profitability of the firm can be analyzed with the help of profitability ratios. However the
ratio analysis suffers from different limitations also. The ratios need not be taken for granted and
accepted at face values. These ratios are numerous and there are wide spread variations in the
same measure. Ratios generally do the work of diagnosing a problem only and failed to provide
the solution to the problem.

52. 8.BIBLIOGRAPHY

1. I M Pandey, “Financial Management”, Himalaya Publishing House, 9TH
Edition, page no.517 – 536.
2. John J. Wild, K R Subramanyan, Robert F. Halsey, “Financial Statement
Analysis” TATA McGRAW-HILL 9TH
EDITION.
3. S N Maheshwary, “Accounting for Management” Vikas Publishing House.
 THREE YEARS ANNUAL REPORT OF ABAD FISHERIES.
 WEBSITES:
www.investopedia.com
www.abadgroup.com.
www.abadfisheries.org

53. APPENDIX:
BALANCE SHEET OF ABAD FISHERIES (PVT) LTD
FOR THE YEAR ENDING 31-3-09
PARTICULARS SCHEDULE AS AT 2008-09
SOURCES OF FUND
Shareholders fund;
Share capital 1 20000000
Reserves and surplus 2 68284806.04
Loans funds;
Secured loans 3 109788647.3
Unsecured loans 4 89392669.95
TOTAL 287466123.3
APPLICATION OF FUNDS
Fixed assets; 5
Gross block 114964951.7
Less: depreciation 32843609
Net Block 82121342.67
Investments 6 118700
Deferred Tax Payments 7 812600
Current assets, Loans & Advances; 8
Inventories 49821819.6
Sundry debtors 91358042.56
Cash and bank balances 36160488.54
Loans and advances 59607814.06
236948164.8
Less: current liabilities 9 28836424.69
& provision 3782059.46
32618484.15
NET CURRENT ASSETS 204329680.6
MISCELLANEOUS EXPENDITURE 83800
TOTAL 287466123.3

54. BALANCE SHEET OF ABAD FISHERIES (PVT) LTD
FOR THE YEAR ENDING 31-3-10
PARTICULARS SCHEDULE AS AT 2009-10
SOURCES OF FUND
Shareholders fund;
Share capital 1 20000000
Reserves and surplus 2 115429927.8
Loans funds;
Secured loans 3 59446874.89
Unsecured loans 4 84926211.88
TOTAL 279803014.6
APPLICATION OF FUNDS
Fixed assets; 5
Gross block 128821421.9
Less: depreciation 43760095.88
Net Block 85061326
Investments 6 117700
Deferred Tax Payments 7 1172930
Current assets, Loans & Advances; 8
Inventories 52695168
Sundry debtors 97606164.76
Cash and bank balances 47937497.27
Loans and advances 55713380.47
253952210.5
Less: current liabilities 9 54603889.47
& provision 5939162.43
60543051.9
NET CURRENT ASSETS 193409158.6
MISCELLANEOUS EXPENDITURE 41900
TOTAL 279803014.6

55. BALANCE SHEET OF ABAD FISHERIES (PVT) LTD
FOR THE YEAR ENDING 31-3-11
PARTICULARS SCHEDULE AS AT 2010-11
SOURCES OF FUND
Shareholders fund;
Share capital 1 20600000
Reserves and surplus 2 139462994.6
Loans funds;
Secured loans 3 95785711.76
Unsecured loans 4 93703130.24
TOTAL 349551837
APPLICATION OF FUNDS
Fixed assets; 5
Gross block 150049157
Less: depreciation 55193042.6
Net Block 94856114.39
Investments 6 117700
Deferred Tax Payments 7 1637900
Current assets, Loans & Advances; 8
Inventories 89084935.5
Sundry debtors 124975291.5
Cash and bank balances 3987251.92
Loans and advances 100227582.5
318275041.4
Less: current liabilities 9 61545200.21
& provision 3789719
65334919.21
NET CURRENT ASSETS 252940122.2
MISCELLANEOUS EXPENDITURE NIL
TOTAL 349551837

56. PROFIT AND LOSS ACCOUNT OF ABAD FISHERIES
PARTICULARS SCHEDULE 31-3-10 31-3-09
INCOME
Sales 10 796603759 800505334.6
Income 11 115060707.8 103754155.6
Total 911664466.8 904259490.2
EXPENDITURE
Raw materials consumed 12 659198875.3 664936324.1
Stock differential 13 -2793985.2 25053608.4
Manufacturing, selling & administration 14 171826613.2 142943655.8
Depreciation written off 11436992.88 10127147.3
Preliminary expense written off 41900 41900
Provision for gratuity 405156 1175089
Total 840115552.1 844327724.6
PROFIT BEFORETAX 71548914.76 59931765.6
less: provision for taxation
current tax 25800000 22500000
deferred tax -360330 -195800
fringe benefit tax nil 305000
excess provision for income taxwritten back -1035877.03 nil
Profit For The Year 47145121.79 37322565.6
Profit Brought Forward FromPrevious Year 66784806.04 29462240.44
NET PROFIT 113929927.8 66784806.04
rnings per share(2000 equity shares @10000 each) 23570 18660

57. PROFIT AND LOSS ACCOUNT OF ABAD FISHERIES
PARTICULARS SCHEDULE FOR THEYEAR ENDED 31-3-11
INCOME
Sales 10 979681816.6
Income 11 101970433.4
Total 1081652250
EXPENDITURE
Raw materials consumed 12 853803417.4
finished goods purchased 13981808
stock differential 13 -36157163.7
manufacturing, selling & administration 14 198572374.1
depreciation written off 12290345.39
Preliminary expense written off 41900
Total 1044084153
PROFIT BEFORETAX 37568096.77
less: provision for taxation
current tax 14000000
deferred tax -464970
Profit For The Year 24033066.77
Profit Brought Forward FromPrevious Year 113929927.8
NET PROFIT 137962927.6
12020Basic & diluted earnings per share 2060 @ 10000