The document is a project report submitted by Dipak Subhash Waghmare to Savitribai Phule Pune University in partial fulfillment of an MBA degree. It analyzes and interprets the financial statements of Om Sai Services Pvt Ltd for the years 2018-2019. The report includes an introduction, literature review on financial statements and ratios, case study analysis of Om Sai Services Pvt Ltd's balance sheets and income statements for 2018-2019, ratio analysis, comparison with other companies, findings, conclusion, and recommendations.
Project report on Financial Statement Analysis and interpretation of A CompanyPinkey Rana
This document provides a project report on the financial statement analysis and interpretation of C.B Enterprises conducted as a summer training. It includes an introduction to the company S.D Gupta & Company, the objectives of analyzing and interpreting financial statements, and an overview of the key components of financial statements including the balance sheet, income statement, and financial ratios. The report then presents an analysis of the financial statements and ratios of C.B Enterprises for 2014-2015, including comparisons between the two years. It finds that while the company's liquidity position is good, many of its ratios related to profitability, expenses, and returns are below industry standards. The report concludes with recommendations for improving the company's performance.
This document is a project report summarizing the financial statement analysis and interpretation of C.B. Enterprises conducted as a summer internship. It includes an introduction to the company and objectives of the analysis. The report presents the formats and contents of balance sheets and profit and loss statements. It then conducts ratio analysis of C.B. Enterprises' financial statements for 2014 and 2015 to evaluate liquidity, profitability, and financial stability. Key findings are that assets and profits have decreased while liquidity remains good. The report concludes the company's prospects are not positive and recommends improving accounts receivable collection and inventory turnover.
REPORT ON SUMMER TRAINING A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION...priya bansal
REPORT ON SUMMER TRAINING
A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION OF B.K. TRADING CO.
I HELP'S U HOW TO PREPARE INTERNSHIP TRAINING REPORT ON A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION
A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATIONBIJENDRAMAHATO
MBA(FINANCE)-PROJECT REPORT ON
FINANCILA STATEMENT ANALYSIS OF AN ORGANISATION,
BALANCE SHEET,PROFIT AND LOSS STATEMENT.
IF SOMEONE IS LOOKING FOR THE IDEA HOW TO MAKE A PROJECT ON FINANCIAL STATEMENT ONE CAN GO THROUGH THIS PROJECT.IT WILL HELP THE STUDENTS TO HAVE AN IDEA ABOUT THE PATTERN .
This document is a project report on studying the financial statements and books of accounts of S.K Compuprints Pvt. Ltd. It was submitted by Shubham Jain to partial fulfillment of an MBA program. The report includes an introduction, company profile, objectives, conceptual background, research methodology, data analysis and interpretation, findings and suggestions, and conclusion. Certificates are provided by the guiding professor and institute. The analysis focuses on profitability, liquidity, and financial stability based on the company's 2015-16 and 2016-17 financial statements. Ratios and other calculations are used to analyze the company's prospects and identify areas for improvement.
FINANCIAL ANALYSIS OF RELIANCE JIO PDF.pdfVismayTyagi
The document provides an overview of financial analysis and ratio analysis. It discusses the need to analyze financial statements to better understand a company's financial position and performance. It classifies ratios into traditional categories such as liquidity, activity, profitability, and debt. Common financial analysis tools include ratio analysis, funds flow analysis, and cash flow analysis. Ratio analysis involves calculating and comparing financial metrics over time, against industry benchmarks, and between companies to evaluate performance. The summary discusses the purpose and importance of financial analysis and ratio analysis for decision making.
Summer Training Report on Financial Performance Analysis for MBAMegha Bansal
This document provides an overview of a summer training project report on the financial performance analysis of Surya Roshni Limited conducted over 45 days. It includes an acknowledgement, declaration, abstract, table of contents, and lists of tables and charts. The report analyzes the company's financial statements from 2013-2016 using various techniques like common size statements, ratio analysis, comparative statements, and cash flow analysis to evaluate the company's financial performance and position over time.
Project report on Financial Statement Analysis and interpretation of A CompanyPinkey Rana
This document provides a project report on the financial statement analysis and interpretation of C.B Enterprises conducted as a summer training. It includes an introduction to the company S.D Gupta & Company, the objectives of analyzing and interpreting financial statements, and an overview of the key components of financial statements including the balance sheet, income statement, and financial ratios. The report then presents an analysis of the financial statements and ratios of C.B Enterprises for 2014-2015, including comparisons between the two years. It finds that while the company's liquidity position is good, many of its ratios related to profitability, expenses, and returns are below industry standards. The report concludes with recommendations for improving the company's performance.
This document is a project report summarizing the financial statement analysis and interpretation of C.B. Enterprises conducted as a summer internship. It includes an introduction to the company and objectives of the analysis. The report presents the formats and contents of balance sheets and profit and loss statements. It then conducts ratio analysis of C.B. Enterprises' financial statements for 2014 and 2015 to evaluate liquidity, profitability, and financial stability. Key findings are that assets and profits have decreased while liquidity remains good. The report concludes the company's prospects are not positive and recommends improving accounts receivable collection and inventory turnover.
REPORT ON SUMMER TRAINING A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION...priya bansal
REPORT ON SUMMER TRAINING
A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION OF B.K. TRADING CO.
I HELP'S U HOW TO PREPARE INTERNSHIP TRAINING REPORT ON A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION
A FINANCIAL STATEMENT ANALYSIS AND INTERPRETATIONBIJENDRAMAHATO
MBA(FINANCE)-PROJECT REPORT ON
FINANCILA STATEMENT ANALYSIS OF AN ORGANISATION,
BALANCE SHEET,PROFIT AND LOSS STATEMENT.
IF SOMEONE IS LOOKING FOR THE IDEA HOW TO MAKE A PROJECT ON FINANCIAL STATEMENT ONE CAN GO THROUGH THIS PROJECT.IT WILL HELP THE STUDENTS TO HAVE AN IDEA ABOUT THE PATTERN .
This document is a project report on studying the financial statements and books of accounts of S.K Compuprints Pvt. Ltd. It was submitted by Shubham Jain to partial fulfillment of an MBA program. The report includes an introduction, company profile, objectives, conceptual background, research methodology, data analysis and interpretation, findings and suggestions, and conclusion. Certificates are provided by the guiding professor and institute. The analysis focuses on profitability, liquidity, and financial stability based on the company's 2015-16 and 2016-17 financial statements. Ratios and other calculations are used to analyze the company's prospects and identify areas for improvement.
FINANCIAL ANALYSIS OF RELIANCE JIO PDF.pdfVismayTyagi
The document provides an overview of financial analysis and ratio analysis. It discusses the need to analyze financial statements to better understand a company's financial position and performance. It classifies ratios into traditional categories such as liquidity, activity, profitability, and debt. Common financial analysis tools include ratio analysis, funds flow analysis, and cash flow analysis. Ratio analysis involves calculating and comparing financial metrics over time, against industry benchmarks, and between companies to evaluate performance. The summary discusses the purpose and importance of financial analysis and ratio analysis for decision making.
Summer Training Report on Financial Performance Analysis for MBAMegha Bansal
This document provides an overview of a summer training project report on the financial performance analysis of Surya Roshni Limited conducted over 45 days. It includes an acknowledgement, declaration, abstract, table of contents, and lists of tables and charts. The report analyzes the company's financial statements from 2013-2016 using various techniques like common size statements, ratio analysis, comparative statements, and cash flow analysis to evaluate the company's financial performance and position over time.
This document is a project report submitted by Pinku Kuriakose to the Faculty of Management Studies at Sikkim Manipal University in partial fulfillment of an MBA degree. The report analyzes the financial statements of Namma Cargo Services Co. Ltd. over multiple years. Ratio analysis is used to evaluate the company's profitability, liquidity, and solvency. Comparisons are made to prior years and industry standards. Recommendations will be provided to improve the company's financial condition based on the findings of the analysis.
This document appears to be a project report submitted by Pinku Kuriakose to the Sikkim Manipal University for their Master of Business Administration degree. The report focuses on conducting a financial analysis of Namaa Cargo Services Co. Ltd. over a certain period of time. The analysis will examine the company's financial statements to evaluate its profitability, liquidity, and solvency. Key financial ratios will be calculated and trends identified to assess the company's financial health and make recommendations to improve its financial condition.
This document appears to be a project report submitted for a Master's degree in Business Administration. It includes an introduction to ratio analysis, definitions of key terms, and outlines various types of ratios that will be analyzed in the report such as liquidity, activity, profitability, and leverage ratios. The objectives of the study are to analyze the financial position and performance of the company through ratio analysis and suggest measures to improve performance.
ANALYSIS OF FINANCIAL PERFORMANCE OF THOMAS COOK (INDIA) LTD. USING RATIO ANA...Anirban Chakraborty
ANALYSIS OF FINANCIAL PERFORMANCE OF THOMAS COOK (INDIA) LTD. USING RATIO ANALYSIS
This study gives in detail the analysis of various financial ratios based upon the past as well as
the present performance of Thomas Cook (India) Ltd. expressed in financial data. Based upon
the results from these financial ratios conclusions are driven out that whether the company has
been earning profits or not and also that how much it has used these results in its growth. So, the
company can also manage each of its current assets namely cash management, accounts
receivable management and also its liabilities like creditors, loans, bills payables etc. so that it
can maintain an identical financial ratio for each of its business aspects like solvency ratios,
turnover ratios, profitability ratios etc.
The document is a report analyzing the financial statements of Renata Limited. It provides an overview of the company's history and chronology. It then outlines the methodology used to analyze Renata Limited's financial statements, which included collecting primary data through interviews and secondary data from annual reports and the company's website. The report analyzes Renata Limited's balance sheet, income statement, statement of changes in equity, and cash flow statement. It also performs ratio analysis to understand the company's liquidity, profitability, and solvency.
The document provides an overview of the financial statement analysis project conducted by Sadhu Vamsi Krishna at S&P Capital IQ in Hyderabad, India. It includes an introduction to the project, declarations, acknowledgements, table of contents, and introduction sections. The project aims to analyze the financial performance of S&P Capital IQ over multiple years using tools like ratio analysis on the company's financial statements.
This report analyzes the financial performance of Shriram Properties Limited through ratio analysis and cash flow statements. Key findings include:
- Financial performance is satisfactory overall but some areas need improvement due to COVID-19 impacts.
- Current and quick ratios indicate short-term solvency issues as liabilities exceed assets.
- Inventory turnover and EPS ratios declined year-over-year due to pandemic lockdowns hampering operations.
- EBITDA margins increased from 2014-2021, showing improved profitability, but returns on assets are negative, affecting financial health.
The report concludes the company needs measures to improve certain financial areas and attract more investment to strengthen its position.
An Evaluation of the Financial Performance Analysis at Rane Brake Lining Limi...ijtsrd
This document analyzes the financial performance of Rane Brake Lining Limited in Puducherry, India over a three year period from 2017-2019. Ratios were calculated from the company's annual reports to analyze profitability, liquidity, solvency, and activity. Most ratios showed improvement over the period except for return on shareholder funds which decreased in 2019. Share price differences each month were also examined, finding the highest differences in 2016-2017. The analysis found the company's financial performance and reserves to be generally good, suggesting excellent future progress if efficient management continues to adapt to changes.
This document is a project report submitted by Arindam Barman analyzing the financial statements of Reliance Industries Limited over the past four years. It includes an introduction outlining the purpose and importance of financial analysis. The document then discusses various tools used for financial statement analysis, including ratio analysis, funds flow analysis, and cash flow analysis. It focuses on explaining ratio analysis in detail and its importance for evaluating a company's liquidity, profitability, leverage, operational efficiency, and overall financial health.
This document provides an analysis of the annual reports of Square Pharmaceuticals Ltd. for fiscal years 2015-16 and 2016-17. Key findings from the analysis include:
- Revenue declined compared to 2014-15, while gross profit increased in 2015-16 and remained steady in 2016-17. Current assets increased significantly in both years, while current liabilities grew at a lower rate.
- Profits after tax grew 15% and 19% respectively in the two years despite stagnant revenue, showing strong operational capacity. Shareholders' equity also grew steadily.
- Ratios show return on assets declined in 2016-17 due to stagnant revenue despite asset growth. Gross profit ratio remained steady at 42%.
This document is a project report on ratio analysis conducted at Shri Govardhansinghji Raghuvanshi Co-op Bank Ltd. The report includes an introduction to ratio analysis, its objectives and uses. It discusses the different types of ratios including liquidity, activity, leverage and profitability ratios. The report also outlines some limitations of ratio analysis. The project was conducted by Yash D. Pardeshi, a BBA student, under the guidance of their professor Mr. Sufiyan Bagwan for partial fulfillment of their BBA degree.
A study on financial analysis of jk cement limitedTanyavarshney42
The document analyzes the financial performance of J.K. Cement Limited from 2011-2015 using ratio analysis. Key findings include that the company's profits increased 61% in 2014-15 due to increased sales volumes. Working capital is well managed at 31.54% of current assets. Liquidity needs some improvement as current ratios are below ideal levels. Efficiency ratios show improved inventory and debtors' turnover. Overall, the analysis finds that while financial performance is satisfactory, there is still scope for further improvement in liquidity, efficiency, and profitability.
This document contains an internship report submitted by Taskin Rahman to his supervisor Dr. Md. Golam Morshed on the financial performance of Niloy Motors Limited. The report includes a letter of transmittal, student and supervisor declarations, acknowledgements, table of contents, and introduction. The introduction provides background on financial statement analysis and explains that the purpose of the report is to analyze Niloy Motors' financial performance through ratio analysis and compare key metrics to other companies.
This document is a project report submitted by Aditya Rajiv to the University of Calicut in partial fulfillment of the requirements for a Bachelor of Commerce degree. The project analyzes the financial performance of Britannia Industries Ltd over the past years under the supervision of Mr. Baby John of Christ College. It includes an introduction, literature review, company and industry profile, data analysis and interpretation using ratios, and findings and conclusions. Certificates are provided to verify the authenticity and originality of the report.
Project Report on Financial Analysis by Nirbhay Kumar, MBA - 3rd Sem.,TMBU,B...Nirbhay Kumar
The document appears to be a summer internship report submitted by a student named Nirbhay Kumar to the National Thermal Power Corporation (NTPC) in India analyzing the financial performance of NTPC from 2012-2016. The report includes an executive summary of the financial analysis, ratios calculated, findings, and recommendations to improve NTPC's profitability and financial position based on the financial statements over the period studied.
This document analyzes the financial performance of Radico Khaitan Ltd over several years using ratio analysis. It begins with an introduction and outlines the company profile. The analysis then calculates and compares various liquidity, profitability, and turnover ratios from 2016-2020. Key findings include the company's satisfactory but improving liquidity and profitability positions. The document concludes with recommendations to maintain profits and control costs, while acknowledging limitations of only considering monetary financial data.
This document analyzes financial ratios for Bharathi Cement Company over five years. It finds that the company's current and quick ratios indicate sufficient current assets to meet liabilities. Profitability ratios like net profit ratio have been decreasing since 2016-17, suggesting ineffective costs. Activity ratios show mostly positive trends, with fixed asset turnover and debtor's turnover ratios increasing in recent years. However, working capital turnover declined in 2018-19, potentially due to inefficient working capital use. Leverage ratios like debt-equity have fluctuated over the period but were highest in 2016-17, indicating greater risk from higher debt levels that year.
This document analyzes financial ratios for Bharathi Cement Company over five years. It finds that the company's current and quick ratios indicate sufficient current assets to meet liabilities. Profitability ratios like net profit ratio have been decreasing since 2016-17, suggesting ineffective costs. Activity ratios such as fixed asset turnover and debtor's turnover generally increased over time, while working capital turnover decreased in 2018-19, indicating inefficient working capital use. Leverage ratios like debt-equity were highest in 2016-17 and 2017-18, showing the company may have difficulty meeting debt obligations during those periods. Overall the analysis finds mixed financial performance with some ratios satisfactory but others indicating room for improvement.
This document contains a resume for Vishal Singh, a Chartered Accountant seeking a new role. He has over 10 years of experience in accounting, finance, taxation, and auditing for various industries. Currently he is Manager of Finance and Accounts at Credence Management Services Pvt. Ltd., where he oversees all accounting functions including financial reporting, budgeting, and analysis. He is seeking a new professional opportunity at a reputable company where he can continue developing his skills.
KALYAN CHART SATTA MATKA DPBOSS KALYAN MATKA RESULTS KALYAN MATKA MATKA RESULT KALYAN MATKA TIPS SATTA MATKA MATKA COM MATKA PANA JODI TODAY BATTA SATKA MATKA PATTI JODI NUMBER MATKA RESULTS MATKA CHART MATKA JODI SATTA COM INDIA SATTA MATKA MATKA TIPS MATKA WAPKA ALL MATKA RESULT LIVE ONLINE MATKA RESULT KALYAN MATKA RESULT DPBOSS MATKA 143 MAIN MATKA KALYAN MATKA RESULTS KALYAN CHART
This document is a project report submitted by Pinku Kuriakose to the Faculty of Management Studies at Sikkim Manipal University in partial fulfillment of an MBA degree. The report analyzes the financial statements of Namma Cargo Services Co. Ltd. over multiple years. Ratio analysis is used to evaluate the company's profitability, liquidity, and solvency. Comparisons are made to prior years and industry standards. Recommendations will be provided to improve the company's financial condition based on the findings of the analysis.
This document appears to be a project report submitted by Pinku Kuriakose to the Sikkim Manipal University for their Master of Business Administration degree. The report focuses on conducting a financial analysis of Namaa Cargo Services Co. Ltd. over a certain period of time. The analysis will examine the company's financial statements to evaluate its profitability, liquidity, and solvency. Key financial ratios will be calculated and trends identified to assess the company's financial health and make recommendations to improve its financial condition.
This document appears to be a project report submitted for a Master's degree in Business Administration. It includes an introduction to ratio analysis, definitions of key terms, and outlines various types of ratios that will be analyzed in the report such as liquidity, activity, profitability, and leverage ratios. The objectives of the study are to analyze the financial position and performance of the company through ratio analysis and suggest measures to improve performance.
ANALYSIS OF FINANCIAL PERFORMANCE OF THOMAS COOK (INDIA) LTD. USING RATIO ANA...Anirban Chakraborty
ANALYSIS OF FINANCIAL PERFORMANCE OF THOMAS COOK (INDIA) LTD. USING RATIO ANALYSIS
This study gives in detail the analysis of various financial ratios based upon the past as well as
the present performance of Thomas Cook (India) Ltd. expressed in financial data. Based upon
the results from these financial ratios conclusions are driven out that whether the company has
been earning profits or not and also that how much it has used these results in its growth. So, the
company can also manage each of its current assets namely cash management, accounts
receivable management and also its liabilities like creditors, loans, bills payables etc. so that it
can maintain an identical financial ratio for each of its business aspects like solvency ratios,
turnover ratios, profitability ratios etc.
The document is a report analyzing the financial statements of Renata Limited. It provides an overview of the company's history and chronology. It then outlines the methodology used to analyze Renata Limited's financial statements, which included collecting primary data through interviews and secondary data from annual reports and the company's website. The report analyzes Renata Limited's balance sheet, income statement, statement of changes in equity, and cash flow statement. It also performs ratio analysis to understand the company's liquidity, profitability, and solvency.
The document provides an overview of the financial statement analysis project conducted by Sadhu Vamsi Krishna at S&P Capital IQ in Hyderabad, India. It includes an introduction to the project, declarations, acknowledgements, table of contents, and introduction sections. The project aims to analyze the financial performance of S&P Capital IQ over multiple years using tools like ratio analysis on the company's financial statements.
This report analyzes the financial performance of Shriram Properties Limited through ratio analysis and cash flow statements. Key findings include:
- Financial performance is satisfactory overall but some areas need improvement due to COVID-19 impacts.
- Current and quick ratios indicate short-term solvency issues as liabilities exceed assets.
- Inventory turnover and EPS ratios declined year-over-year due to pandemic lockdowns hampering operations.
- EBITDA margins increased from 2014-2021, showing improved profitability, but returns on assets are negative, affecting financial health.
The report concludes the company needs measures to improve certain financial areas and attract more investment to strengthen its position.
An Evaluation of the Financial Performance Analysis at Rane Brake Lining Limi...ijtsrd
This document analyzes the financial performance of Rane Brake Lining Limited in Puducherry, India over a three year period from 2017-2019. Ratios were calculated from the company's annual reports to analyze profitability, liquidity, solvency, and activity. Most ratios showed improvement over the period except for return on shareholder funds which decreased in 2019. Share price differences each month were also examined, finding the highest differences in 2016-2017. The analysis found the company's financial performance and reserves to be generally good, suggesting excellent future progress if efficient management continues to adapt to changes.
This document is a project report submitted by Arindam Barman analyzing the financial statements of Reliance Industries Limited over the past four years. It includes an introduction outlining the purpose and importance of financial analysis. The document then discusses various tools used for financial statement analysis, including ratio analysis, funds flow analysis, and cash flow analysis. It focuses on explaining ratio analysis in detail and its importance for evaluating a company's liquidity, profitability, leverage, operational efficiency, and overall financial health.
This document provides an analysis of the annual reports of Square Pharmaceuticals Ltd. for fiscal years 2015-16 and 2016-17. Key findings from the analysis include:
- Revenue declined compared to 2014-15, while gross profit increased in 2015-16 and remained steady in 2016-17. Current assets increased significantly in both years, while current liabilities grew at a lower rate.
- Profits after tax grew 15% and 19% respectively in the two years despite stagnant revenue, showing strong operational capacity. Shareholders' equity also grew steadily.
- Ratios show return on assets declined in 2016-17 due to stagnant revenue despite asset growth. Gross profit ratio remained steady at 42%.
This document is a project report on ratio analysis conducted at Shri Govardhansinghji Raghuvanshi Co-op Bank Ltd. The report includes an introduction to ratio analysis, its objectives and uses. It discusses the different types of ratios including liquidity, activity, leverage and profitability ratios. The report also outlines some limitations of ratio analysis. The project was conducted by Yash D. Pardeshi, a BBA student, under the guidance of their professor Mr. Sufiyan Bagwan for partial fulfillment of their BBA degree.
A study on financial analysis of jk cement limitedTanyavarshney42
The document analyzes the financial performance of J.K. Cement Limited from 2011-2015 using ratio analysis. Key findings include that the company's profits increased 61% in 2014-15 due to increased sales volumes. Working capital is well managed at 31.54% of current assets. Liquidity needs some improvement as current ratios are below ideal levels. Efficiency ratios show improved inventory and debtors' turnover. Overall, the analysis finds that while financial performance is satisfactory, there is still scope for further improvement in liquidity, efficiency, and profitability.
This document contains an internship report submitted by Taskin Rahman to his supervisor Dr. Md. Golam Morshed on the financial performance of Niloy Motors Limited. The report includes a letter of transmittal, student and supervisor declarations, acknowledgements, table of contents, and introduction. The introduction provides background on financial statement analysis and explains that the purpose of the report is to analyze Niloy Motors' financial performance through ratio analysis and compare key metrics to other companies.
This document is a project report submitted by Aditya Rajiv to the University of Calicut in partial fulfillment of the requirements for a Bachelor of Commerce degree. The project analyzes the financial performance of Britannia Industries Ltd over the past years under the supervision of Mr. Baby John of Christ College. It includes an introduction, literature review, company and industry profile, data analysis and interpretation using ratios, and findings and conclusions. Certificates are provided to verify the authenticity and originality of the report.
Project Report on Financial Analysis by Nirbhay Kumar, MBA - 3rd Sem.,TMBU,B...Nirbhay Kumar
The document appears to be a summer internship report submitted by a student named Nirbhay Kumar to the National Thermal Power Corporation (NTPC) in India analyzing the financial performance of NTPC from 2012-2016. The report includes an executive summary of the financial analysis, ratios calculated, findings, and recommendations to improve NTPC's profitability and financial position based on the financial statements over the period studied.
This document analyzes the financial performance of Radico Khaitan Ltd over several years using ratio analysis. It begins with an introduction and outlines the company profile. The analysis then calculates and compares various liquidity, profitability, and turnover ratios from 2016-2020. Key findings include the company's satisfactory but improving liquidity and profitability positions. The document concludes with recommendations to maintain profits and control costs, while acknowledging limitations of only considering monetary financial data.
This document analyzes financial ratios for Bharathi Cement Company over five years. It finds that the company's current and quick ratios indicate sufficient current assets to meet liabilities. Profitability ratios like net profit ratio have been decreasing since 2016-17, suggesting ineffective costs. Activity ratios show mostly positive trends, with fixed asset turnover and debtor's turnover ratios increasing in recent years. However, working capital turnover declined in 2018-19, potentially due to inefficient working capital use. Leverage ratios like debt-equity have fluctuated over the period but were highest in 2016-17, indicating greater risk from higher debt levels that year.
This document analyzes financial ratios for Bharathi Cement Company over five years. It finds that the company's current and quick ratios indicate sufficient current assets to meet liabilities. Profitability ratios like net profit ratio have been decreasing since 2016-17, suggesting ineffective costs. Activity ratios such as fixed asset turnover and debtor's turnover generally increased over time, while working capital turnover decreased in 2018-19, indicating inefficient working capital use. Leverage ratios like debt-equity were highest in 2016-17 and 2017-18, showing the company may have difficulty meeting debt obligations during those periods. Overall the analysis finds mixed financial performance with some ratios satisfactory but others indicating room for improvement.
This document contains a resume for Vishal Singh, a Chartered Accountant seeking a new role. He has over 10 years of experience in accounting, finance, taxation, and auditing for various industries. Currently he is Manager of Finance and Accounts at Credence Management Services Pvt. Ltd., where he oversees all accounting functions including financial reporting, budgeting, and analysis. He is seeking a new professional opportunity at a reputable company where he can continue developing his skills.
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Adani Group's Active Interest In Increasing Its Presence in the Cement Manufa...Adani case
Time and again, the business group has taken up new business ventures, each of which has allowed it to expand its horizons further and reach new heights. Even amidst the Adani CBI Investigation, the firm has always focused on improving its cement business.
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1. 1 | P a g e
A
PROJECT REPORT
ON
“A FINANCIAL STATEMENT ANALYSIS & INTERPRETATION OF OM SAI SERVICES PVT LTD”
SUBMITTED BY
DIPAK SUBHASH WAGHMARE
(FINANCE)
UNDER THE GUIDANCE OF
PROF. Pravin Bodade
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (MBA)
THROUGH
SKN SINHGAD SCHOOL OF BUSINESS MANAGEMENT,
AMBEGAON (Bk.), PUNE
(2018-20)
4. 4 | P a g e
CERTIFICATE OF THE SUPERVISOR
This is to certify that the work entitled A Financial statement analysis & interpretation of om sai
services Pvt ltd. is a piece of SIP research work done by Mr. Dipak Waghmare under my
guidance and supervision for the degree of MBA from Savitribai Phule. I certify that the candidate
has put 60 days in industry training at Om Sai Manpower Services Pvt Ltd.
To the best knowledge and belief the report:
(i) Embodies the work of the candidate himself.
(ii) Has duly been completed.
(iii) Fulfills the requirement of the ordinance relating to the MBA degree of the University
and
(iv) Up to the standard both in respect of contents and language for being referred to the
examiner.
Signature of the Supervisor
Date
5. 5 | P a g e
ACKNOWLEDGEMENT
"I have taken efforts in this internship. However, it would not have been possible without the
kind support and help of many individuals and organizations. I would like to extend my sincere
thanks to all of them.
I am highly indebted to Mrs. Ravi Gaikwad for their guidance and constant supervision as well
as for providing necessary information regarding the internship & also for their support in
completing the internship.
I would like to express my gratitude towards my parents & member of Om sai Manpower
Services Pvt Ltd. for their kind co-operation and encouragement which help me in completion of
this internship.
I would like to express my special gratitud e and thanks to all for giving me such attention and time
7. 7 | P a g e
ABSTRACT
Financial statements are formal record of the financial activities of a business, person or other
entity and provide an overview of a business or person’s financial condition in both short and
long term. They give an accurate picture of a company’s condition and operating results in a
condensed form. Financial statements are used as a management tool primarily by company
executive and investor’s in assessing the overal position and operating results of the company.
Analysis and Interpretation of financial statements help in determining the liquidity position,
long term solvency, financial viability and profitability of a firm. Ratio ana lysis shows whether
the company is improving or deteriorating in past years. Moreover, comparison of different
aspects of all the firms can be done effectively with this. It helps the clients to decide in which
firm the risk is less or in which one they should invest so that maximum benefit can be earned.
Industries are capital intensive; hence a lot of money is invested in it. So before investing in
companies one has to carefully study its financial condition and worthiness. An attempt has been
carried out in this project to analyze and interpret the financial statements of a company.
OBJACTIVE:
To understand, analyze and interpret the basic concepts of financial statements of
different mining companies.
Interpretation of financial ratios and their significance.
Use of Tally 9.0 package for the analysis and interpretation of financial statements of
mining companies.
This project mainly focuses in detail the basic types of financial statements of different
companies and calculation of financial ratios. Ratio analysis of Om Sai Manpower Services Pvt. Ltd
wasdone.
Tally 9.0 was used for preparation of balance sheet, profit & loss statements and estimation of
few financial ratios of selected companies. Profit & Loss Statements of companies were not
calculated as Tally 9.0 has limitations in processing the data that was available. However, only
8. 8 | P a g e
three ratios viz. current ratio, quick ratio and debt-equity ratio were calculated. An advanced
version can be developed for calculation of profit & loss statements and other financial ratios.
From ratio analysis of Balance Sheet and P & L Statement of Om Sai Manpower Pvt Ltd of
2018-19 it was concluded that liquidity position of the company is good. Current ratio, debt-
equity ratio, quick ratio, net profit margin, operating profit margin, gross profit margin, return on
assets, return on investments and return on capital employed were found to be unacceptable.
In this project, comparison of different ratios viz. current ratio, debt-equity ratio, net profit
margin and return on investment of all the above e companies has been done for the period 2018-
19.It was observed that current ratio of was always more than 1 from 2017- 19which indicates
that liquidity position of the company was good.
Debt-Equity ratio of Om Sai Manpower Services Pvt. Ltd increased in 2018-19 which the debts have
been cleared. Return on Investment of Om Sai Manpower Services Pvt. Ltd increased from 44.20%
to 48.72% in Two years.
9. 9 | P a g e
CONTENTS
Sl. No. Title Page No.
Chapter -01 INTODUCTION
1.1 Om Sai Services Pvt. Ltd 14
1.2 A Financial Statement Analysis and Interpretation 14
1.3 Objectives 15
Chapter-02 FINANCIAL STATEMENTS 16
2.1 Balance Sheet 17
2.1.1 Format of Balance Sheet 18
2.1.2 Contents of Balance Sheet 20
2.2 Profit and loss statements 25
2.2.1 Format of Profit and Loss Statement 26
2.2.2 Contents of Profit and Loss Statement 27
2.3 FINANCIAL RATIOS
2.3.1 Objectives 29
2.3.2 Financial Ratios And Their Interpretation 30
Chapter-03 FINANCIAL RATIO ANALYSIS: CASE STUDY
3.1 Ratio Analysis of OM SAI SERVICES PVT LTD
3.1.1 Balance sheet of OM SAI MANPOWER SERVICES
PVT. LTD for 2018
39
3.1.2 Balance sheet of OM SAI MANPOWER SERVICES
PVT. LTD for 2019
40
3.1.3 Profit & Loss Statement for 2018 42
3.1.4 Profit & Loss Statement for 2019 44
3.1.5 Ratio Analysis for 2018 46
3.1.6 Ratio Analysis for 2019 50
3.1.7 Summary for Balance sheet and profit & loss statement 53
10. 10 | P a g e
3.2 RATIO ANALYSIS USING TALLY 9.0 54
11. 11 | P a g e
3.2.1 Balance Sheet and Ratio Analysis for 2018 55
3.2.2 Balance Sheet and Ratio Analysis for 2019 56
Chapter-04 VARIATION OF FINACIAL RATIOS
S.B ENTERPRISES 57
Chapter-05 COMPRATIVE STATEMENT
5.1 Income Statement 61
5.2 Balance Sheet 62
FINDINGS 63
CONCLUSION 64
RECOMMENDATIONS 66
LIMITATIONS 68
BIBLIOGRAPHY 69
12. 12 | P a g e
LIST OF TABLES
Sl. No. Title Page No.
Table2.1 Balance Sheet Statement 18
Table2.2 Profit & Loss Statement 26
Table2.3 Different Financial Ratio 30
Table3.1 Balance Sheet of Om Sai Services Pvt. Ltd,2018 39
Table3.2 Balance Sheet of Om Sai Services Pvt. Ltd,2019 40
Table3.2 Profit & Loss Statement of Om Sai Services Pvt. Ltd,2018 42
Table3.3 Profit & Loss Statement of Om Sai Services Pvt. Ltd. 2019 44
Table3.4 Analysis of Financial Ratio for 14 46
Table3.5 Analysis of Financial Ratio for 15 50
Table3.7 Summary of Balance Sheet 53
Table3.8 Summary of Profit & Loss Statement 54
Table5.1 Comparative Income Statement 61
Table5.2 Comparative Balance Sheet 62
13. 13 | P a g e
LIST OF FIGURES
Fig.3.1 Balance Sheet,2018 55
Fig.3.2 Ratio Analysis of OM SAI MANPOWER SERVICES PVT.
LTDfor 2018
55
Fig.3.3 Balance Sheet,2019 56
Fig.3.4 Ratio Analysis of C.B ENTERPRISES for 2019 56
Fig.4.1 Current Ratio 57
Fig.4.2 Working Capital Ratio 57
Fig.4.3 Quick Ratio 58
Fig.4.4 Debt- equity Ratio 58
Fig.4.5 Inventory Turnover Ratio 58
Fig.4.6 Return On Assets 59
Fig.4.7 Return on Investment 59
Fig.4.8 Gross Profit Ratio 59
Fig.4.9 Net Profit Ratio 60
Fig.4.10 Return On Working Capital 60
Fig.4.11 Operating CostRatio 60
14. 14 | P a g e
EXECUTIVE SUMMARY
Subject Matter: This Project report provides an analysis and interpretation of the year 2017-18
and 2018-19 profitability, liquidity and financial stability of C.B.ENTERPRISES.
Methods of Analysis: Methods of analysis include horizontal and vertical analyses as well as
ratios such as Debt, Current and Quick ratios. Other calculations include rates of return on
Shareholders’ Equity and Total Assets and earnings before interest & Tax to name a few. Many
other calculation of can be found in this project.
Findings: Results of data analyzed show that all ratios are below industry averages. In particular,
comparative performance is poor in the areas of profit margins, liquidity, credit control, and
inventory management.
Assets have decreasing due to investment is decreasing.
Liquidity Position is good.
Purchase has decreased by 37.58%
COGS has decreased by 46.17%
Sales have decreased by 29.47%
Gross Profit has decreased by 45.79%
Net profit has decreased by 33.22%
Conclusion: The report finds the prospects of the company in its current position are not
positive. The major areas of weakness require further investigation and remedial action by
management.
Recommendations: Recommendations discussed include:
Improving the average collection period for accounts receivable·
Improving/increasing inventory turnover·
15. 15 | P a g e
Reducing prepayments and perhaps increasing inventory levels.
Increase in purchase and Productionactivity.
Limitations of the report: three problems involved in such report are:
a) That firms use different accounting principles and methods.
b) That it is often difficult to define what industry and firm is really a part of and
c) That accounting principles varies among countries
16. 16 | P a g e
CHAPTER- 01
INTRODUCTION
1.1 A FINANCIAL STAMENT ANALYSIS& INTERPRETATION:
Financial statements are records that provide an indication of the organization’s financial status.
It quantitatively describes the financial health of the company. It helps in the evaluation of
company’s prospects and risks for the purpose of making business decisions. 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 makin g
economic decisions. Financial statements should be understandable, relevant, reliable and
comparable. They give an accurate picture of a company’s condition and operating results in a
condensed form. Reported assets, liabilities and equity are directly related to an organization's
financial position whereas reported income and expenses are directly related to an organization's
financial performance. Analysis and interpretation of financial statements helps in determining
the liquidity position, long term solvency, financial viability, profitability and soundness of a
firm. There are four basic types of financial statements: balance sheet, income statements, cash
flow statements, and statements of retained earnings.
17. 17 | P a g e
The analysis of financial statement is a process of evaluating the relationship between
component parts of financial statement to obtain a better understanding of firm financial position.
Analysis is a process of critically examining the accounting information given in financial
statements. For the purpose of analysis, individual items are studied; their interrelationship with
other related figures is established.
Thus analysis of financial statement refer to treatment of information contain in financial
statement in a way so as to afford a full diagnosis of the profitably and financial position of the
firm concern. An attempt has been carried out in this project to analyze and interpret the
financial statements of C.BENTERPRISES.
1.2 OBJECTIVE
To understand, analyze and interpret the basic concepts of financial statements of a
company.
Interpretation of financial ratios and their significance.
Use of Tally 9.0 package for the analysis and interpretation of financial statements of C.B
ENTERPRISES.
To know about Liquidity Position
To Know about Long- TermSolvency
To Know about Operating Efficiency
To know about Over-All Profitability
To Know About Inter- firm Comparison
This project mainly focuses in detail the basic types of financial statements of C.B
ENTERPRISES and calculation of financial ratios. Ratio analysis of C.B ENTRPRISES was
done.
18. 18 | P a g e
CHAPTER -02
FINANCIAL STATEMENTS
Financial statements (or financial reports) are formal records of the financial activities of a
business, person, or other entity. Financial statements provide an overview of a business or
person's financial condition in both short and long term. All the relevant financial information of
a business enterprise, presented in a structured manner and in a form easy to understand is called
the financial statements.
The analysis of financial statement is a process of evaluating the relationship between
component parts of financial statement to obtain a better understanding of firm financial
position.
A complete set of financial statement comprises:
1) A statement of financial position as at the end of the period:
2) A statement of comprehensive income for the period;
3) A statement of changes in equity for the period:
4) A statement of cash flow for the period.
5) Notes of Account comprising a summary of significant accounting policies and other
explanatory information.
There are four basic financial statements:
1. Balance sheet: It is also referred to as statement of financial position or condition,
reports on a company's assets, liabilities, and ownership equity as of a given
19. 19 | P a g e
point in time. The Balance Sheet shows the health of a business from day one to the date
on the balance sheet.
2. Income statement: It is also referred to as Profit and Loss statement (or "P&L"), reports
on a company's income, expenses, and profits over a period of time. Profit & Loss
account provide information on the operation of the enterprise. These include sale and the
various expenses incurred during the processingstate.
The income statement shows a presentation of the sales, the main expenses and the
resulting net income over the period. Net income is based on accounting principles which
gives guidance/rules on when to recognize revenues and expenses, whereas cash from
operating activities, obviously is cash based.
3. Statement of Retained Earnings : It explains the changes in a company's retained
earnings over the reporting period. The statement of retained earnings shows the
breakdown of retained earnings. Net income for the year is added to the beginning of year
balance, and dividends are subtracted. This results in the end of year balance for retained
earnings.
4. Cash Flow Statement: It reports on a company's cash flow activities, particularly its
operating, investing and financing activities. The statement of cash flows the ins and outs
of cash during the reporting period. The statement of cash flows takes aspects of the
income statement and balance sheet and kind of crams them together to show cash
sources and uses for the period.
2.1 BALANCE SHEET
In financial accounting, a balance sheet or statement of financial position is a summary of a
person's or organization's balances. A balance sheet is often described as a snapshot of a
company's financial condition. It summarizes a company's assets, liabil ities and shareholders'
equity at a specific point in time. These three balance sheet segments give investors an idea as to
what the company owns and owes, as well as the amount invested by the shareholders. Of the
four basic financial statements, the balance sheet is the only statement which applies to a single
point in time.
20. 20 | P a g e
A company balance sheet has three parts: assets, liabilities and ownership equity. The main
categories of assets are usually listed first and are followed by the liabilities. The difference
between the assets and the liabilities is known as equity or the net assets or the net worth or
capital of the company. It's called a balance sheet because the two sides balance out. A typical
format of the balance sheet has been given in Table 2.1. It works on the following formula:
Assets = Liabilities + Shareholders' Equity
2.1.1 FORMAT OF BALANCE SHEET
Table 2.1: Balance Sheet of C.B.ENTERPRISES
LIABILITIES
1.Share Capital
Equity Share Capital
2. Reserves & surpluses
Capital Reserve
General Reserve
Security Premium Account
Capital Redemption Reserve
3. Secured Loans
Debentures
Loan from Bank
Long Term Loan
Other Secured Loans
4.Unsecured Loans
Fixed Deposit
Short Term Loans
21. 21 | P a g e
Other Loans
5.Current Liabilities & Provisions
A) Current Liabilities
Bills Payable
Sundry Creditors
Bank Overdraft
Other Liabilities (if any)
B) Provisions
Provision for Tax
Proposed Dividend
Other Provision
TOTAL
ASSETS
1.Fixed Assets
Goodwill
Land
Building
Leaseholds
Plant & Machinery
Furniture
Trade marks
Patents
Vehicle
2.Investment
3.Current Assets, Loan and Advances
A) Current Assets
Sundry Debtors
22. 22 | P a g e
Bills Receivables
Closing Stock
Interest on Investment
Cash at Bank
Cash on Hand
Securities Deposit
Fixed Deposit with Banks
B) Loans and Advances
Prepaid Expenses
Tax Paid in Advance
Advances Paid
4.Miscellaneous Expenditure
Preliminary Expenses
Revenue Expenditures
Discount Allowed
5. Profit & Loss account
TOTAL
2.1.2 CONTENTS OF BALANCE SHEET
(A) Assets
In business and accounting, assets are economic resources owned by business or company. Any
property or object of value that one possesses, usually considered as applicable to the payment of
one's debts is considered an asset. Simplistically stated, assets are things of value that can be
readily converted into cash.
23. 23 | P a g e
The balance sheet of a firm records the monetary value of the assets owned by the firm. It is
money and other valuables belonging to an individual or business.
Types of Assets
There is two major type of assets:
· Tangible assets
· Intangible assets
Tangible Assets
Tangible assets are those have a physical substance, such as equipment and real estate.
Intangible Assets
Intangible assets lack physical substance and usually are very hard to evaluate. Assets which do
not possess any material value.
They include patents, copyrights, franchises, goodwill, trademarks, trade names, etc.
Types of Tangible Assets
1. Fixed Assets.
2. Current Assets.
1. Fixed Assets
This group includes land, buildings, machinery, vehicles, furniture, tools, and certain
wasting resources e.g., timberland and minerals.
It is also referred to as PPE (property, plant, and equipment), these are purchased for
continued and long-term use in earning profit in a business.
2. Current Assets
Current assets are cash and other assets expected to be converted to cash, sold, or
consumed either in a year or in the operating cycle. These assets are continually turned
24. 24 | P a g e
over in the course of a business during normal business activity. There are 5 major
items included into current assets:
Cash and Cash Equivalents
It is the most liquid asset, which includes currency, deposit accounts, and negotiable
instruments (e.g., money orders, cheque, bank drafts).
Short-term Investments
It includes securities bought and held for sale in the near future to generate income on
short term price differences (trading securities).
Receivables
It is usually reported as net of allowance for uncollectable accounts.
Inventory
The raw materials, work- in-process goods and completely finished goods that are
considered to be the portion of a business's assets that is ready or will be ready for sale.
Prepaid Expenses
These are expenses paid in cash and recorded as assets before they are used or consumed
(a common example is insurance). The phrase net current assets (also called working
capital) are often used and refer to the total of current assets less the total of current
liabilities.
I. Gross Block
Gross block is the sum total of all assets of the company valued at their cost of acquisition. This
is inclusive of the depreciation that is to be charged on each asset. Net block is the gross block
less accumulated depreciation on assets. Net block is actually what the asset are worth to the
company.
II. Capital Work in Progress
Work that has not been completed but has already incurred a capital investment from the
company. This is usually recorded as an asset on the balance sheet. Work in progress indicates
25. 25 | P a g e
any good that is not considered to be a final product, but must still be accounted for because
funds have been invested toward its production.
III. Investments
Shares and Securities, such as bonds, common stock, or long-term notes
Associate Companies
Fixed deposits with banks/finance companies
Investments in special funds (e.g., sinking funds or pension funds).
Investments in fixed assets not used in operations (e.g., land held forsale).
Remark: While fixed deposits with banks are considered as fixed assets, the investments in
associate concerns are treated as non-current assets.
IV. Loans and Advances include
House building advance
Car, scooter, computer etc.advance
Multipurpose advance
Transfer travelling allowance advance
Tour travelling allowance advance
DRS payment.
V. Reserves
Subsidy Received From The Govt.
Development Rebate reserve
Issue of Shares at Premium
General Reserves
(B) Liability
26. 26 | P a g e
A liability is a debt assumed by a business entity as a result of its borrowing activities or other
fiscal obligations (such as funding pension plans for its employees). Liabilities are debts and
obligations of the business they represent creditors claim on business assets.
Types of Liabilities
Current Liabilities
Current liabilities are short-term financial obligations that are paid off within one year or one
current operating cycle. These liabilities are reasonably expected to be liquidated within a year. It
includes:
Accrued expenses as wages, taxes, and interest payments not yet paid
Accounts payable
Short-term notes
Cash dividends and
Revenues collected in advance of actual delivery of goods or services.
Long-Term Liabilities
Liabilities that are not paid off within a year, or within a business's operating cycle, are known as
long-term or non-current liabilities. Such liabilities often involve large sums of money necessary
to undertake opening of a business, major expansion of a business, replace assets, ormake a
purchase of significant assets. These liabilities are reasonably expected not to be liquidated
within a year. It includes:
Notes payable- debt issued to a single investor.
Bonds payable – debt issued to general public or group of investors.
Mortgages payable.
Capital lease obligations – contract to pay rent for the use of plant, property or
equipments.
deferred income taxes payable,and
Pensions and other post-retirement benefits.
27. 27 | P a g e
Contingent Liabilities
A third kind of liability accrued by companies is known as a contingent liability. The term refers
to instances in which a company reports that there is a possible liability for an event, transaction,
or incident that has already taken place; the company, however, does not yet know whether a
financial drain on its resources will result. It also is often uncertain of the size of the financial
obligation or the exact time that the obligation might have to be paid.
Fixed Liability
The liability which is to be paid of at the time of dissolution of firm is called fixed liability.
Examples are Capital, Reserve and Surplus.
Secured Loans
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as
collateral for the loan, which then becomes a secured debt owed to the creditor who gives the
loan.
Unsecured Loans
An unsecured loan is a loan that is not backed by collateral. It is also known as signature loan
and personal loan. Unsecured loans are based solely upon the borrower's credit rating. An
unsecured loan is considered much cheaper and carries less risk to the borrower. However, when
an unsecured loan is granted, it does not necessarily have to be based on a credit score.
2.2 PROFIT & LOSS STATEMENT
Income statement, also called profit and loss statement (P&L) and Statement of Operations is
financial statement that summarizes the revenues, costs and expenses incurred d uring a specific
period of time - usually a fiscal quarter or year. These records provide information that shows the
ability of a company to generate profit by increasing revenue and reducing costs. The purpose of
the income statement is to show managers and investors whether the company made or lost
money during the period being reported. The important thing to remember about an income
statement is that it represents a period of time. This contrasts with the balance sheet, which
28. 28 | P a g e
represents a single moment in time. A typical format of the Profit & Loss Statement has been
given in Table 2.2.
2.2.1 FORMAT OF PROFIT & LOSS STATEMENT
Table 2.2: Profit & Loss Statement of C.B.ENTERPRISES
PARTICULARS Amount PARTICULARS Amount
Gross Profit(Transferred) Gross Profit(Transferred)
Office and Administration Exp: Interest received
Salaries Rent received
Rent Discount received
Postage & telegrams Dividend received
Office electric charges Bad debts recovered
Telephone charges Provision for discount on creditors
Printing and stationary Provision for discount on creditors
Selling and Distribution
Expenses:
Carriage outward
Advertisement
Salesmen's salaries
Commission
Insurance
Traveling expense
Bad debts
Packing expense
29. 29 | P a g e
Financial and Other Expenses:
Depreciation
Repair
Audit fee
Interest paid
Commission paid
Bank charges
Legal charges
Profit before Interest Net loss
Less- Net Interest
Profit before Tax
Less- Tax Payable
Profit after Tax
Less- Dividend
Retained Profit
2.2.2 CONTENTS OF PROFIT & LOSSSTATEMENT
a. Revenue - Cash Inflows or other enhancements of assets of an entity during a period
from delivering or producing goods, rendering services, or other activities that constitute
the entity's ongoing major operations.
b. Expenses - Cash outflows or other using- up of assets or incurrence of liabilities during a
period from delivering or producing goods, rendering services, or carrying out o ther
activities that constitute the entity's ongoing majoroperations.
c. Turnover
The main source of income for a company is its turnover, primarily comprised of sales of
its products and services to third-party customers.
d. Sales
30. 30 | P a g e
Sales are normally accounted for when goods or services are delivered and invoiced, and
accepted by the customer, even if payment is not received until some time later, even in a
subsequent trading period.
e. Cost of Sales (COS)
The sum of direct costs of goods sold plus any manufacturing expenses relating to the sales (or
turnover) is termed cost of sales, or production cost of sales, or cost of goods sold. These costs
include:
Costs of raw materials stocks
Costs of inward-bound freight paid by the company
Packaging costs
Direct production salaries and wages
Production expenses, including depreciation of trading-related fixed assets.
(f) Other Operating Expenses
These are not directly related to the production process, but contributing to the activity of the
company, there are further costs that are termed ‘other operating expenses’. These comprises of
costs like:
Distribution costs and selling costs,
Administration costs, and
Research and development costs (unless they relate to specific projects and the costs may
be deferred to future periods).
(g) Other Operating Income
Other operating income includes all other revenues that have not been included in other parts of
the profit and loss account. It does not include sales of goods or services, reported turnover, or
any sort of interest receivable, reported within the net interest category.
31. 31 | P a g e
(h) Gross Margin (or Gross Profit)
The difference between turnover, or sales, and COS is gross profit or gross margin. It needs to be
positive and large enough to at least cover all other expenses.
(i) Operating Profit (OP)
The operating profit is the net of all operating revenues and costs, regardless of the financial
structure of the company and whatever exceptional events occurred during the period that
resulted in exceptional costs. The profit earned from a firm's normal core business operations. It
is also known as Earnings before Interest and Tax(EBIT).
Operating Profit = Turnover - COS - other Operating Expenses + Other Operating Income
(j) Profit before Tax(PBT)
A profitability measure that looks at a company's profits before the company has to pay
corporate income tax. This measure deducts all expenses from revenue including interest
expenses and operating expenses, but itleaves out the payment of tax.
(k) Profit after Tax (PAT)
PAT, or net profit, is the profit on ordinary activities after tax. The final charge that a company
has to suffer, provided it has made sufficient profits, is therefore corporate taxation.
PAT = PBT - Corporation Tax
(l) RetainedProfit
The retained profit for the year is what is left on the profit and loss account after deducting
dividends for the year. The balance on the profit and loss account forms part of the capital (or
equity, or shareholders’ funds) of the company.
32. 32 | P a g e
2.3 FINANCIAL RATIOS
2.3.1 OBJECTIVES OF CALCULATION OF RATIOANALYSIS
The importance of ratio analysis lies in the fact that it presents data on a comparative basis and
enables the drawing of inferences regarding the performance of the firm. Ratio analysis helps in
concluding the following aspects:
To know about Liquidity Position:
Ratio analysis helps in determining the liquidity position of the firm. A firm can be said to have
the ability to meet its current obligations when they become due. It is measured with the help of
liquidity ratios.
To Know about Long- Term Solvency:
Ratio analysis helps in assessing the long term financial viability of a firm. Long- term solvency
measured by leverage/capital structure and profitability ratios.
To Know about Operating Efficiency:
Ratio analysis determines the degree of efficiency of management and utilization of assets. It is
measured by the activity ratios.
To know about Over-All Profitability:
The management of the firm is concerned about the overall profitability of the firm which
ensures a reasonable return to its owners and optimum utilization of its assets. This is possible if
an integrated view is taken and all the ratios are considered together.
To Know About Inter- firm Comparison:
Ratio analysis helps in comparing the various aspects of one firm with the other.
2.3.2 FINANCIAL RATIOS AND THEIRINTERPRETATION
33. 33 | P a g e
Table 2.3: Different FinancialRatios
Sl. No. CATEGORY TYPE OF RATIO ITNERPRETATION
1. Liquidity Ratio
Net Working Capital =
Current assets-current liabilities
It measures the
liquidity of a firm.
Current ratio =
Current Assets
Current Liabilities
It measures the short
term liquidity of a firm.
A firm with a higher
ratio has better
liquidity.
A ratio of 2:1 is
considered safe.
Acid test or Quick ratio =
Quick assets
Current Liabilities
It measures the
liquidity position of a
firm.
A ratio of 1:1 is
considered safe.
2. Turnover Ratio
Inventory Turnover ratio =
Costs of goods sold
Average inventory
This ratio indicates how
fast inventory is sold.
A firm with a higher
ratio has better
liquidity.
Debtor Turnover ratio =
Net credit sales
Average debtors
This ratio measures
how fast debts are
collected.
A high ratio indicates
shorter time lag
34. 34 | P a g e
between credit sales
and cash collection.
Creditor’s Turnoverratio =
Net credit purchases
Average Creditors
A high ratio shows
that accounts are to
be settled rapidly
3. Capital
Structure Ratios
Debt-Equity ratio =
Long term debt
Shareholder’s Equity
This ratio indicates the
relative proportions of
debt and equity in
financing the assets of
a firm.
A ratio of 1:1 is
considered safe.
Debt to Total capital ratio =
Long term debt
Permanent Capital
Or
Total debt
Permanent capital + Current
liabilities
Or
Total Shareholder’s Equity
Total Assets
It indicates what
proportion of the
permanent capital of a
firm consists of long-
term debt.
A ratio 1:2 is
considered safe.
It measures the share of
the total assets financed
by outside funds.
A low ratio is desirable
for creditors.
It shows what portion
of the total assets is
35. 35 | P a g e
financed by the owners’
capital.
A firm should neither
have a high ratio nor a
low ratio.
4. Coverage ratios
Interest Coverage =
Earnings before interest and tax
Interest
A ratio used to
determine how easily a
company can pay on
outstanding debt.
A ratio of more than 1.5
I satisfactory
Dividend Coverage =
Earnings after tax
Preference Dividend
It measures the ability
of firm to pay dividend
on preference shares.
A high ratio is better
for creditors.
Total Coverage ratio =
Earning before interests and tax
Total Fixed charges
It shows the overall
ability of the firm to
fulfill the liabilities.
A high ratio indicates
better ability.
5.
Profitability
ratios
Gross Profit margin =
Gross profit * 100
Sales
It measures the profit in
relation tosales.
A firm should neither
have a high ratio nor a
low ratio.
It measures the net
36. 36 | P a g e
Net Profit margin =
Net Profit after tax before interest
Sales
Or
Net Profit after Tax and Interest
Sales
Or
Net profit after Tax and Interest
Sales
profit of a firm with
respect to sale.
A firm should neither
have a high ratio nor a
low ratio.
6. Expenses ratios
Operating ratio =
Cost of Goods
expenses
sold + other
Operating ratio shows
the operational
efficiency of the
business.
Lower operating ratio
shows higher operating
profit and vice versa .
sales
Cost of Goods sold ratio =
Cost of Goods sold
Sales
It measures the cost of
goods sold per sale
Specific Expenses ratio =
Specific Expenses
Sales
It measures the specific
expenses per sale.
7.
Return
Investments
on Return on Assets (ROA) =
Net Profit after Taxes * 100
Total Assets
Or
(Net Profit after Taxes +interest)
It measures the
profitability of the total
funds per investment of
a firm.
37. 37 | P a g e
*100
Total Assets
Or
(Net profit after Taxes + Interest)
* 100
Tangible Assets
Or
(Net Profit after Taxes + Interest)
* 100
Total Assets
Or
(Net Profit after Taxes + Interest)
* 100
Fixed Asset
Return on Capital Employed
(ROCE) =
(Net Profit after Taxes) * 100
total capital employed
Or
(Net Profit after Taxes + Interest)
*100
It measures profitability
of the firm with respect
to the total capital
employed.
The higher the ratio, the
more efficient use of
capital employed.
Total Capital Employed
38. 38 | P a g e
Or
(Net Profit after Taxes + Interest)
* 100
Total Capital Employed -
intangible assets
Return on Total Shareholders’
Equity =
Net Profit after Taxes * 100
Total shareholders’ equity
It reveals how
profitably the owner’s
fund has been utilized
by the firm.
Return on Ordinary
shareholders equity =
Net profit after taxes and Pref.
dividend *100
It determines whether
the firm has earned
satisfactory return for
its equity holders or
not.
Ordinary Shareholders’ Equity
8.
Shareholder’s
ratios
Earnings per Share (EPS) =
Net Profit of Equity holders
It measures the profit
available to the equity
holders on a per share
basis.
Number of Ordinary Shares
Dividend per Share (DPS) =
Net profits after interest and
preference dividend paid to
ordinary shareholders
Number of ordinary shares
outstanding
It is the net distributed
profit belonging to the
shareholders divided by
the number of ordinary
shares
It shows what
39. 39 | P a g e
Dividend Payout ratio (D/P) =
Total Dividend To Equity holders
Total net profit of equity holders
Or
Dividend per Ordinary
Share Earnings per Share
percentage share of the
net profit after taxes
and preference dividend
is paid to the equity
holders.
A high D/P ratio is
preferred from
investor’s point of
view.
Earnings per Yield =
Earnings per Share
Market Value per Share
It shows the percentage
of each rupee invested
in the stock that was
earned by the company.
Dividend Yield =
Dividend per share
Market Value per share
It shows how much a
company pays out in
dividends each year
relative to its share
price.
Price- Earnings ratio (P/E) =
Market value per Share
Earnings per Share
It reflects the price
currently paid by the
market for each rupee
of EPS.
Higher the ratio better it
is for owners
Earning Power =
Net Profit after taxes
Total Assets
It measures the overall
profitability and
operational efficiency
of a firm
It measures how
40. 40 | P a g e
9. Activity Ratios Inventory turnover =
Sales
Closing Inventory
quickly inventory is
sold.
A firm should neither
have a high ratio nor a
low ratio.
Raw Material turnover =
Cost of Raw Material used
Average Raw Material Inventory
Work in Progress turnover =
Cost of Goods manufactured
Average Work in process
inventory
Debtors turnover =
Cost of Goods manufactured
Average Work in Process
Inventory
It shows how quickly
current assets that are
receivables or debtors
are converted to cash.
A firm should neither
have a high ratio nor a
low ratio.
10.
Assets
Turnover
Ratios
Total Assets turnover =
Cost of Goods Sold
Total Assets
It measures the
efficiency of a firm in
managing and utilizing
its assets.
Higher the ratio, more
efficient is the firm in
utilizing its assets.
Fixed Assets turnover =
Cost of Goods Sold
Fixed Assets
41. 41 | P a g e
Capital turnover =
Cost of Goods Sold
Capital Employed
Current Assets turnover =
Cost of Goods Sold
Current Assets
CHAPTER- 03
FINANCIAL RATIO ANALYSIS
The ratio analysis of C.B ENTERPRISES from 2012-14 has been carried out below.
3.1 RATIO ANALYSIS
3.1.1 Balance Sheet of Om Sai Services Pvt. Ltd for 2018
Table 3.1: Balance Sheet of OM SAI MANPOWER SERVICES PVT. LTD as at 31st Mar -
2018
PARTICULARS Amount
Total
Amount
Source of Funds:
Capital Account 634,506.05
Sunil's Capital 875860.05
Less- Credit card HDFC 50,489.00
Donation 2,502.00
Drawings 109053
LIC 54,860.00
43. 43 | P a g e
School fees 24,450.00
Loans (Liability)
Bank od A/C
Secured Loans
Unsecured Loans
859142.95
992702.95
1851845.9
Current Liabilities 1,638,085.9
Provision 44,553.00
Sundry Creditors 1570805
Unregistered Tax Payable 65,940.00
less- Duties & Taxes 43,212.15
Profit & Loss A/C 0
Opening balance Current Period 502558.24
less- Transferred 502558.24
Total 4,124,437.8
Application of Funds:
Fixed Assets 1579196.65
Car 593850
Mobile 59,773.74
Motor Bike 31,181.65
Plant & Machinery 687189.75
Tata Ace 207201.51
Current Assets 2545241.15
Closing Stock 1035485
Loans & Advances (Assets) 53,073.00
Sundry Debtors 1425712.6
Cash in Hand 24869.00
Bank Accounts 6101.48
Total 4124437.8
3.1.2 Balance Sheet of Om Sai Services Pvt. Ltd for 2019
Table 3.2: Balance Sheet of Om Sai Services Pvt. Ltd as at 31st Mar -2019
44. 44 | P a g e
PARTICULARS Amount
Total
Amount
Source of Funds:
Capital Account 353,181.05
Sunil's Capital 595406.05
Less- Credit card HDFC 12,500.00
Star Health Insurance 9,343.00
Drawings 181362
School fees 39,020.00
Loans (Liability) 1908532.9
Bank od A/C 920609.95
Secured Loans 837922.95
Unsecured Loans 150000
Current Liabilities 2,493,868.57
Provision 76,703.00
Sundry Creditors 2385328.5
Unregistered Tax Payable 65,940.00
less- Duties & Taxes 34,102.93
Profit & Loss A/C
Opening balance Current Period 3355599.45
3355599.45
Total 50,91,181.97
Application of Funds:
Fixed Assets 1,352,287.87
Car 504772.5
Mobile 53,842.29
Motor Bike 26,504.40
Plant & Machinery 584111.4
LCD Monitor 6936
Tata Ace 176121.28
Current Assets 3738894.1
45. 45 | P a g e
Closing Stock 1235091
Loans & Advances (Assets) 35,642.00
Sundry Debtors 917360.62
Cash in Hand 1544699.00
Bank Accounts 6101.48
Total 5091181.97
3.1.3 Profit &loss
Table 3.3: Profit & Loss Statement as per the year
Ending of 31st Mar, 2018
Particulars Amount Amount
Trading Account:
Sales Account 5104025.95
Sales Ag. E Form 450887
Sales Ag. H Form 420469.5
Sales central Tax 5% 1701502
Sales Tax Invoice 5% 2531167.45
Direct Incomes
Work Contract Received 1566780
1566780
6670805.95
Cost of Sales 4358261.6
Opening Stock 343079
Add: Purchase Accounts 4068867.2
Less: Closing Stock 1035485
3376461.2
Direct Expenses 981800.4
Cartage Inward 342534
Job Work Paid 302586.4
Power& Fuel Exp. 336680
Gross Profit 2312544.35
46. 46 | P a g e
Income Statement:
Indirect Incomes
Cartage Outward
Interest 644.32
644.32
Indirect Exp.
Accounting Charges
Advertising Exp.
Audit Fees
Bank Charges
Business Promotion Exp.
Commission Exp.
Convince Exp.
Depreciation
Factory Rent
Festival Exp.
Interest on Tata Ace Loan
Interest On C.C limit
Interest On Term Loan
Insurance
Legal & Professional Charges
Postage& Currier Exp.
Printing & Stationary Exp.
Repair & Maintenance Of Building
Repair & Maintenance Exp.
Salaries
Short & Excess
Staff Welfare
Telephone Exp.
Traveling Exp.
15000
16120
10000
12556.54
15840
9680
71842
239417.59
275000
77425
42290.94
85655.96
44465.7
14832
23000
1872
12134
54670
43700.29
412633
0.66
56450
41488.75
65670
2313188.67
1810630.43
47. 47 | P a g e
Vehicle Running & Maintenance 168886
Nett Profit: 502558.24
3.1.4 Profit & Loss Statement for 2019
Table 3.4: Profit & Loss Statement as per the year
Ending of 31st Mar, 2019
Particulars Amount Amount
Trading Account:
Sales Account 3599918
Sales Ag. D Form 139550
Sales Ag. E Form 667113
Sales Tax Invoice 5% 2793255
Direct Incomes
3599918
Cost of Sales 2346186.55
Opening Stock 1035485
Add: Purchase Accounts 2539552.55
Less: Closing Stock 1235091
2339946.55
Direct Expenses 6240
Cartage Inward 2210
Job Work Paid 4030
Gross Profit 1253731.45
Income Statement:
Indirect Incomes
Indirect Exp.
Accounting Charges 13750
1253731.45
918132.03
48. 48 | P a g e
Advertising Exp. 9752
Audit Fees 12500
Bank Charges 10752
Business Promotion Exp. 7524
Cartage Outward (-)2187.75
Commission Exp. 6582
Company Insurance 14621
Convince Exp. 9850
Depreciation 238638.78
Donation (Charity) 1401
Factory Rent 120000
Festival Exp. 12580
Interest on Tata Ace Loan 20992
Interest Aon VAT 154
Interest On C.C limit 115379
Legal & Professional Charges 9852
Office Exp. 1880
Printing & Stationary Exp. 9782
Salaries 245864
Short & Excess (-)5
Staff Welfare 2356
Telephone Exp. 15710
Toll Tax (Octory) 180
Vehicle Running & Maintenance 40145
Weighting & Measurement 80
Nett Profit: 335599.42
49. 49 | P a g e
3.1.5 Ratio analysis for2018
Table 3.5: Analysis of Financial Ratios for 2018
Sl.
No.
RATIOS PARTICULARS VALUE REMARKS
1.
Working Capital =
Current Assets =
2545241.15
907155.25 Liquidity position
is good.
Current assets-Current liabilities Current Liabilities =
1638085.90
2. Current Assets = 1.55:1 It is safe.
Current Ratio = 2545241.15
Current Assets Current Liabilities =
Current Liabilities 1638085.90
3.
Acid test or Quick ratio =
liquid Assets =
1509756.15
0.92:1 It is not good.
Liquid Assets Current Liabilities =
Liquid Liabilities 1638085.90
4.
Debt-Equity Ratio =
Long term debt
Capital A/C+ Net Profit
Long term debt 1.63:1 It is safe
=1851845.90
Capital A/C =
634506.05
Net Profit= 502558.24
It is good
5.
Return On Investment Ratio = Net Profit
44.20%
502558.24
Net Profit*100 Capital A/C
Capital a/c+ Net Profit 634506.05
50. 50 | P a g e
6.
Gross Profit Ratio =
Gross Profit * 100
Sales
Gross Profit= 45.31% It is not satisfactory
2312544.35
Sales=
5104025.95
7.
Net Profit Ratio =
Net Profit * 100
Sales
Net Profit 9.84% It is not satisfactory
= 502558.24
Sales=
5104025.95
8. Net Income 20.21% It is not good
Return on Assets Ratio = 502528.24
Net Income*100 Fix. Assets=
Fix. Assets+Net WorkingCapital 1579196.65
Net Working Capital=
907155.25
9.
Return on working capital =
Net profit=
502558.24
55.40% It is good
Net Profit ∗ 100
Working Capital
Net Working capital=
907155.25
10. Cost of goods sold= 85.38 It is not satisfactory
Cost of Goods Sold Ratio =
Cost of Goods Sold*100
4358261.6
Sales=
Sales 5104025.95
11. COGS= 120.86 It is so high
Operating Cost Ratio = 4358261.6
COGS+ Operating Exp.*100 Operating Exp.=
Net Sales 1810630.43
Sales=
5104025.95
51. 51 | P a g e
12. Sales a/c= It is not safe
Fixed Assets turnover = 5104025.95
Sales a/c Fixed Assets=
3.23
Fixed Assets 1579196.65
13.
Working Capital Turnover=
Sales=
5104025.95 5.63
It is safe
Sales a/c Working Capital=
working Capital 907155.25
14. Sales= It is not good
Inventory Turnover= 5104025.95 4.93
Sales a/c Closing Stock=
Closing stock 1035485
Liquid Assets = Total Current Assets – Inventory – PrepaidExp.
= 2545241.15- 1035485
=1509756.15
Liquid Liabilities = Current Liabilities – Bank Overdraft
= 1638085.90
Long Term Debt = Secured Loans + Other Long Term liabilities
= 992702.95
Shareholder Funds = Equity Share+ Pre. Share+ Profit+ General Reserve
= 875860.05+ 502558.24
= 1318418.29
52. 52 | P a g e
Earnings before Interest & Tax (EBIT) OR Operating Profit =
Net Profit + Tax + Interest
= 502558.24+ 644.32
= 503202.56
Operating Expenses = Financial Exp. + Administration Exp.+ Financial Exp.+ Sales
Operating & DistributionExp.
= 981800.40
Operating Cost= COGS – OPERATING EXP.
=4358261.6 – 981800.40
= 3376461.2
Cost of Goods Sold = Opening Stock+ Purchase+ Direct Exp. – Closing Stock =
343079+ 4068867.2+ 981800.4- 1035485 = 4358261.6
53. 53 | P a g e
3.1.6 Ratio analysis for2019
Table 3.6: Analysis of Financial Ratios for 2019s
Sl.
No.
RATIOS PARTICULARS VALUE REMARKS
1. Current Assets = 1245025.53 Liquidity position
Working Capital = 3738894.1 is good
Current assets-Current liabilities Current Liabilities =
2493868.57
2. Current Assets = 1.50:1 It is safe
Current Ratio = 3738894.1
Current Assets Current Liabilities =
Current Liabilities 2493868.57
3. Liquid Assets = 1.00:1 It is good
Acid test or Quick ratio = 2503803.1
Liquid Assets Current Liabilities =
Liquid Liabilities 2493868.57
Debt-Equity Ratio =
Long term debt
Capital A/C+ Net Profit
Long term debt 2.77:1 It is safe
= 1908532.90
4.
Capital A/C =
353181.05
Net Profit=
335599.45
Return On Investment =
net Profit*100
Capital a/c + Net Profit
Net Profit=
It is good
5.
335599.45
48.72%
Capital a/c=
353181.05
54. 54 | P a g e
6.
Gross Profit Ratio =
Gross Profit * 100
Sales
Gross Profit=
1253731.45
Sales=
3599918
34.83% It is not satisfactory
7.
Net Profit Ratio =
Net Profit * 100
Sales
Net Profit
= 335599.42
Sales=
3599918
9.32% It is not satisfactory
8.
Return on Assets =
Net Income*100
Fix. Assets Net + Working
Capital
Net Income=
335599.45
Fix. Assets=
1352287.87
Working Capital=
1245025.53
12.92%
It is not good
9.
Return on working capital =
Net Profit ∗ 100
Working Capital
Net profit=
335599.45
Net Working capital=
1245025.53
26.96% It is not good
10.
Cost of Goods Sold Ratio =
Cost of Goods Sold*100
Sales
Cost of goods sold=
2346186.55
Sales=
3599918
65.17 It is not satisfactory
11.
Operating Cost Ratio =
COGS + Operating Exp.*100
Net Sales
COGS=
2346186.55
Operating Exp.=
918132.03
Sales=
3599918
90.67% It is so high
12. Fixed Assets turnover =
Sales a/c
Fixed Assets
Sales a/c=
3599918
Fixed Assets=
2.66
It is not safe
55. 55 | P a g e
1352287.87
13.
Working Capital Turnover=
Sales a/c
working Capital
Sales=
3599918
Working Capital=
1245025.53
2.89
It is safe
14.
Inventory Turnover=
Sales a/c
Closing stock
Sales=
3599918
Closing Stock=
1235091
2.91
It is not good
Liquid Assets = Total Current Assets – Inventory – Prepaid Exp.
= 3738894.1- 1235091
= 2503803.1
Liquid Liabilities = Current Liabilities – Bank Overdraft
= 2493868.57
Long Term Debt = Secured Loans + Other Long Term liabilities
= 837922.95
Shareholder Funds = Equity Share+ Pre. Share+ Profit+ General Reserve
= 595406.05+ 3355599.45
= 629005.5
56. 56 | P a g e
Earnings before Interest & Tax (EBIT) OR Operating Profit =
Net Profit + Tax + Interest
= 3355599.45
Operating Expenses = Financial Exp. + Administration Exp.+ Financial Exp.+ Sales
Operating & DistributionExp.
= 918132.03
Cost of Goods Sold = Opening Stock+ Purchase+ Direct Exp. – Closing Stock =
= 1035485+ 2539552.55+ 6240- 1235091
= 2346186.55
3.1.7 Summary for Balance Sheetand Profit & Loss Statement
Table 3.7: Summary of Balance Sheet
PARTICULARS 2018 2019 Remarks
Current Assets 2545241.15 3738894.10 Short term liquidity available is very
less.
Fixed Assets 1579196.65 1352287.87 Fixed Assets have decreased due to
decrease in investment.
Current Liabilities 1638085.85 2493868.57 Substantial increase in liabilities.
Liquidity position is not good.
Long Term Liabilities 992702.95 837922.95 Debts have decreased because of less
investment
57. 57 | P a g e
Table 3.8: Summary of Profit & Loss Statement
PARTICULARS 2018 2019 Remarks
Purchase 4068867.20 2539552.55 Purchase has decreased by 37.58%
Cost of GoodsSold 4358261.60 2346186.55 COGS has decreased by 46.17%
Sale 5104025.9 3599918 Sales have decreased by 29.47%
Gross Profit 2312544.35 1253731.45 Gross Profit has decreased by 45.79%
Net Profit 502558.24 335599.45 Net profit has decreased by 33.22%
3.2 RATIO ANALYSIS USING TALLY 9.0
Tally 9.0 manufactured by Tally Solutions FZ LLC, Dubai, and Tally India Private Limited. It
facilitates smooth and error free Excise Accounting for manufacturers and dealers engaged in
manufacturing or trading of excisable goods. It is mainly used for the calculation of excise
duties, taxes and other transactions. In this project Tally 9.0 is used to compute the balance sheet
and the financial ratios of companies that can be obtained from it. However Tally 9.0 has certain
limitations. It has been used to calculate only current ratio, quick ratio and debt – equity ratio. In
future the version can be modified to calculate other ratios.
Preparation of balance sheet and ratio analysis of Om Sai Services Pvt. Ltd from 2017-19
using Tally 9.0 has been carried out below:
58. 58 | P a g e
3.2.1 Om Sai Services Pvt. Ltd
3.2.1 Balance Sheet and Ratio Analysis For 2018
Fig. 3.1: Preparation of Balance Sheet of Om Sai Services Pvt. Ltd
Fig. 3.2: Ratio Analysis of Om Sai Services Pvt. Ltd
59. 59 | P a g e
3.2.2 Balance Sheet and Ratio Analysis For 2019
Fig.3.3: Preparation of Balance Sheet of OM SAI MANPOWER SERVICES PVT. LTD OF
2019
Fig. 3.4: Ratio Analysis of OM SAI MANPOWER SERVICES PVT. LTD OF 2019
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Working Capital
1400000
1200000
1000000
800000
600000
400000
200000
Current Ratio
1.5
CHAPTER -04
VARIATION OF FINANCIAL RATIOS
The variation of different financial ratios from 2017-19 of OM SAI MANPOWER SERVICES PVT.
LTD has been shown below:
4.1 Om Sai Services Pvt. Ltd
1 2
Series1 1.55 1.5
Fig.4.1: Current Ratio
1 2
Series1 907155.25 1245025.53
Fig.4.2: Working Capital
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Debt - Equity Ratio
2.5
1.5
0.5
Quick Ratio
0.9
2.91
4.93
Inventory TurnoverRatio
1 2
Series1 0.92 1
Fig.4.3: Quick Ratio
1 2
Series1 1.63 2.77
Fig.4.4: Debt-Equity Ratio
Fig.4.5: Inventory Turnover Ratio
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Return on Assets
25.00%
20.00%
15.00%
10.00%
5.00%
Return on Investment
Gross Profit Ratio
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
1 2
Series1 20.21% 12.92%
Fig.4.6: Return on Assets
1 2
Series1 44.20% 48.72%
Fig.4.7: Return on Investment
1 2
Series1 45.31% 34.83%
Fig.4.8: Gross Profit Ratio
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Return on Working Capital
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Operating Cost Ratio
140.00%
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
Net Profit Ratio
10.00%
9.00%
1 2
Series1 9.84% 9.32%
Fig.4.9: Net Profit Ratio
1 2
Series1 55.40% 26.96%
Fig.4.10: Return on Working Capital
1 2
Series1 120.86% 90.67%
Fig.4.11: Operating Cost Ratio
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CHAPTER-05
COMPRATIVE STATEMENTS
Table: 5.1 COMPARATIVE INCOME STATEMENT
Particulars Previous
Year
Current
Year
Absolute
Change
Percentage
change
Sales
Less- Cost of Goods Sold
5104025.95
4358261.6
3599918
2346186.55
-1504107.95
-2012075.05
-29.47%
-46.17%
Operating Profit
Add- Other Income
745764.35
1566780
1253731.45
-
507967.1
-1566780
68.11%
-100%
Gross Profit
Less-Operating Exp.
2312544.35
1810630.43
1253731.45
918132.03
-1058812.9
-63667.97
-45.79%
-3.52%
Earnings Before Interest & Tax
Add- Interest
501913.92
644.32
335599.45
0
-167603.11
-644.32
-33.39%
-100%
Profit 502558.24 335599.45 -166958.79 -33.22%
Percentage Change = Absolute Change
Figures of the previous year
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Table: 5.2 Comparative Balance Sheetof Om Sai Services Pvt. Ltd
Particulars
Pervious
Year
Current
Year
Absolute
Change
Percentage
Change
Car 593850 504772.5 (89077.5) 15%
Mobile 59773.74 53842.29 (5931.45) 9.92%
Motor Bike 31181.65 26504.40 (4677.25) 15%
Plant & Machinery 687189.75 584111.4 (103078.35) 14.99%
LCD Monitor - 6936 - -
Tata Ace 207201.51 176121.28 (148919.77) 71.87%
Closing Stock 1035485 1235091 199606 19.28%
Loans & Advances (Assets) 53073 35642 (17431) 34.81%
Sundry Debtors 1425712.6 917360.62 (508351.98) 35.66%
Cash in Hand 24869.00 1544699 1519830 61.11%
Bank Accounts 6101.48 6101.48 - -
Total
4124437.85
5091181.97 966744.12 23.43%
Capital Account 634506.05 353,181.05 281325 44.33%
Loans (Liability) 1851845.9 1908532.9 (56687) 3.06
Current Liabilities 1,638,085.9 2,493,868.57 855782.67 52.24%
Total 4124437.85 5091181.97 966744.12 23.43%
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FINDINGS
This report work has identified how companies use financial statement analysis and
interpretation in making effective management decisions. Overall organizational profitability and
achievement of organizational objectives were discussed. Again the difference between the
returns of a financial statement analysis and interpretation based on management decisions were
also discussed.
Gross profit and net profits are decreased during the period of 2017-19, which indicates
that firm’s inefficient management in manufacturing and trading operations
Liquidity ratio of the firm is better liquidity position in over the two years. It shows that
the firm had sufficient liquid assets.
The fixed asset turnover ratio of the firm has in 2017-19 the ratio is 3.23 or 2.26
respectively and it decrease.
cost ratio of the company has decreased during the period of 2017-19
Current liabilities are Increasing by 52.4%
Current assets Ratio are decreased in two years.
Net profit also decreased by 33.22%
Return on Investment hasincreased.
Gross Profit has decreased by 45.79%
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CONCLUSION
Analysis and interpretation of financial statements is an important tool in assessing company’s
performance. It reveals the strengths and weaknesses of a firm. It helps the clients to decide in
which firm the risk is less or in which one they should invest so that maximum benefit can be
earned. It is known that investing in any company involves a lot of risk. So before putting up
money in any company one must have thorough knowledge about its past records a nd
performances. Based on the data available the trend of the company can be predicted in near
future.
This project of financial analysis & interpretation in the production concern is not merely a work
of the project but a brief knowledge and experience of that how to analyze the financial
performance of the firm. The study undertaken has brought in to the light of the following
conclusions. According to this project I came to know that from the analysis of financial
statements it is clear that OM SAI MANPOWER SERVICES PVT. LTD have been incurring
profit during the period of study. So the firm should focus on getting of more profits in the
coming years by taking care internal as well as external factors. And with regard to resources, the
firm is take utilization of the assets properly. And also the firm has a maintained low inventory.
This project mainly focuses on the basics of different types of financial statements. Balance
Sheet and Profit & Loss statements of OM SAI MANPOWER SERVICES PVT. LTD have been
studied.
From ratio analysis of Balance Sheet and P & L Statement of OM SAI MANPOWERSERVICES
PVT. LTD of 2017-19 it was concluded that liquidity position of the company is good. Current
ratio, debt-equity ratio, quick ratio, net profit margin, operating profit margin, gross profit
margin, return on assets, return on investments and returnon capital employed were found to be
unacceptable. The ratios that are found to be desirable are Current Ratio, Return On investment and
Return on working capital and Debt – Equity Ratio.
Tally 9.0 is used for analyzing the balance sheet and profit & loss statements of a company and
calculating the financial ratios. In this project Tally 9.0 is used to prepare the balance sheet and
calculate the financial ratios of different companies. Profit & Loss Statements of companies were
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not calculated as Tally 9.0 has limitations in processing the data that was available. However,
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only three ratios viz. current ratio, quick ratio and debt-equity ratio were calculated. An
advanced version can be developed for calculation of profit & loss statements and other financial
ratios.
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RECOMMENDATION
8.1 Recommendation for Company:
The profit Of the Company is not in a good Position. Profit decrease in 2018-15 comparison to
2017-18 so for earn more profit company has to Take Alternative Actions for more profit such
As:
Increasing in Procurement insugarcane,
Production, and Control in Expenses Like, Administrative, selling Etc.
The firms have low current ratio in 2018-19 comparison to 2019-18 so it should increase
its current ratio where it can meet its short term obligation smoothly.
Liquidity ratio of the firm is less in 2018-19 comparison to 2017-18 liquidity position in
over the years. So I suggested that the firm maintain proper liquid funds like cash and
bank balance
It should enhance its employee’s efficiency, more training needed to its employees in
order to increase its production capacity and minimize mistakes while performing the
tasks, also more safety precaution need to implement to the employees who directly
working on sugar production process.
The company high inventory so I suggested that the firm must reduce the stock by
increase sales.
The firms should have proper check all process of the plant.
Recommendation for the Students:
Based on the findings of this study as presented, analyzed and interpreted, the following
recommendations were deemed necessary by the Student who prepares project report:
Adequate time should always be allowed for collection of financial statement data and
preparation for their analysis.
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Financial statement should be properly interpreted and should be made to reflect current
cost accounting to reduce the negative effects of historical cost principle on financial
statement decisions.
The effects of inflation on financial statement result should be considered to reduce the
inflation risk.
The adequacy of financial information need to be emphasized on, as it will provide
enough and necessary details for investment and management decisions.
A combination of different ratios should be used to analyze a company’s financial and/or
operating performance.
Finally, the management of the selected company should make proper use of financial
statement analysis in other decision areas of management.
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LIMITATION
LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION
1. It is suffering from the limitations of financial statements.
2. There is Absence of standard universally accepted terminology in financial analysis
3. Price level changes is ignored in financial analysis
4. Quantity aspect is ignored in financial analysis
5. Financial analysis provides misleading result in absence of absolute data
6. The qualitative elements like quality management, quality of labor, public relations are
ignored while carrying out the analysis of financial statement only.
7. In many situations, the account has to make choice out of various alternatives available, e.g.
choice in the method of depreciation, choice in the method of inventory valuation etc. s ince
the subjectivity is inherent in personal judgment, the financial statement are therefore not free
from bias.
8. Financial Statements are essential interim reports.
9. Lack of Exactness in financial Statement analysis and interpret.
10. Lack of comparability in financial statement analysis and interpret.
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BIBLIOGRAPHY
BOOKS:
1. M.Y. KHAN, P.K.JAIN (1981), Financial Management, and Cost Accounting (third
edition) New Delhi: McGraw – Hill publishing company limited.
2. I.M.PANDEY.Financial Management New Delhi Vikas publishing house private Ltd –
ninth addition 2004
3. Financial Statement
4. Financial Management
COMPANY DATA:
Vouchers of Sale & Purchase
Bank Statement
Other Data of Om Sai Services Pvt. Ltd
WEBSITES
www.google.com