hal presentation

1. Study of Cost Accounting And
Working Capital Management In
Finance department At Hindustan
Aeronautics Limited
Prepared By-
Ranu Singh
1212470118

2. COMPANY PROFILE
 The Company traces its roots to the pioneering efforts of an industrialist with
extraordinary vision, the late Seth Walchand Hirachand, who set up Hindustan
Aircraft Limited at Bangalore in association with the Government of Mysore as a
private limited company in December 1940. The Government of India became a
shareholder in March 1941 and took over the Management in 1942.
 Hindustan Aeronautics Limited (HAL) came into existence on 1st October 1964. The
Company was formed by the merger of Hindustan Aircraft Limited with Aeronautics
India Limited and Aircraft Manufacturing Depot, Kanpur.

3.  Company’s vision to become a significant global player in
the aerospace industry and its mission to achieve self
reliance in design, manufacture, upgrade and maintence of
aerospace equipments.
 HAL become a “NAVRATNA” company in June 2007.
 Today, HAL has 14 Production Units and 9 Research and
Design Centers in 7 locations in India. The Company has
an impressive product track record - 12 types of aircraft
manufactured with in-house R & D and 14 types produced
under license.
 HAL has played a significant role for India's space
programs by participating in the manufacture of structures
for Satellite Launch Vehicles .

4. HAL LUCKNOW DIVISION
 Accessories Division of HAL was established in 1970 with the
primary objective of manufacturing systems and accessories for
various aircraft and Engines and attains self sufficiency in this area.
 The Division started with manufacturing various Systems and
Accessories like Hydraulics, Engine Fuel System, Air-conditioning
and Pressurization, Barometric Instruments, Electrical System
items, Electronic items all under one roof to meet the requirements
of the aircraft, helicopters and Engines being produced by HAL
 At present it is turning out over 1100 different types of accessories.

5. SWOT Analysis Of The
Company
Strengths-
 Design capability
 Modern manufacturing infrastructure
 Skilled and committed man power
 Strong financial position
 Good understanding of the Indian defence market
Weakness-
 Dependence on foreign sources for raw materials and critical
technologies.
 Limited customer base
 Lack of flexibility in fixing compensation package to attract and retain
talent.

6. Opportunities
Modernization & expansion of Indian armed forces.
Growing civil market in India.
Competitive price of indigenous products
Threats-
Aggressive product marketing by foreign companies
Competition from private sector and foreign companies

7. OBJECTIVES OF THE STUDY
The objective of the research conducted in HAL is to analyse the financial statements
of the company by using financial tool such as ratio analysis.
 To identify the financial strength and weakness of the company
 To study the components, determinants of working capital.
 To study how HAL finances working capital requirements of the firms.
 Interpreting, analyzing based on the various ratios, the liquidity position of HAL.

8. RESEARCH METHODOLOGY
Problem Statement:
In every step of life resources are always scarce. In the same way, business organization
are also facing such type of problem. In this respect every organization wishes to use
available resources in an optimum level. This study is basically emphasizing on the
Working Capital Management H.A.L. and tries to find out ways of optimum
utilization of financial resources.
Research type : Descriptive and Analytical

9. Data Sources
Secondary data:
Secondary data are those which have already been
collected by someone else and have already been passed
through the statistical process.
All the data has been collected from internal source
that includes:-
Books
Websites
Reports
Files.
Manual
Company’s Manual related to Working Capital

10. DATA ANALYSIS
2010-
11
2011-
12
1.52
1.5
1.48
1.46
1.44
1.42
1.4
1.38
1.36
CURRE
NT
RATIO
1.5 1.4
1.34
TIMES
CURRENT RATIO INTERPRETATION:
 It can be concluded that for
HINDUSTAN
AERONAUTICS LIMITED,
the ratio stands out to be
1.4 form last year’s ratio of
1.5, so we can say that
there is no major change in
the current ratio of the
organization.
 It can be followed from the
ratio that the firm is having
capability to fulfill all its
obligations and claims .

11. QUICK RATIO
2010-
11
2011-
12
1.45
1.4
1.35
1.3
1.25
Quick
Ratio
1.43 1.3
1.2
TIMES
Quick Ratio INTERPRETATION:
The ratio has declined
from 1.43 in the year
2010-2011 to 1.3 in
the year 2011-2012
due to the purchase
of inventories and
the other reason can
be payment of loans.

12. ABSOLUTE LIQUID RATIO
2010-11 2011-12
0.81
0.8
0.79
0.78
0.77
0.76
0.75
ABSOLUTE
LIQUID RATIO
0.76 0.8
0.74
Times
ABSOLUTE LIQUID
RATIO
INTERPRETATION:
 HINDUSTAN AERONAUTICS LIMITED
, stands to satisfy the ratio which says that
an ideal ratio is 50% (1:2) i.e. absolute
liquid assets worth one half of the value of
the current liabilities are sufficient for a
satisfactory liquid position of the company
 HAL can be regarded to be sound
enterprise as there has been a remarkable
increase in the cash ratio position of the
company.

13. INVENTORY RATIO
INTERPRETATION:
There has been a slight
variation seen in the
inventory ratio i.e. 0.38.
to 0.34., which means
that the ability of the
firm to convert its
assets in sales has
increased.
0.38
0.37
0.36
0.35
0.34
0.33
0.32
inventory ratio
2010-11
2011-12
inventory ratio

14. The Debt-Equity Ratio:
0.0003
0.00025
0.0002
0.00015
0.0001
0.00005
0
20
08-
20
09
20
09-
20
10
20
10-
11
20
11-
12
DEBT EQUITY
RATIO
0.0003 0.000020.000020.00001
Times
DEBT EQUITY RATIO INTERPRETATION:
 Regarding HINDUSTAN
AERONAUTICS LIMITED we
can say that the capital
gearing position is
satisfactory and the company
can benefit from issuing
capital.

15. EARNING PER SHARE
2008
-09
2009
-10
2010
-11
2011
-12
250
200
150
100
50
earning per
share
144.39 163.27 175.46 210.74
0
Rupees
earning per share INTERPRETATION:
The earnings per share is
increasing year by year
which means the
shareholders are thinking
that their hard earned
money is being potentially
utilized , and thus
shareholders continually
invests in the company for
its smooth running and
proper functioning .

16. FIXED ASSET TURNOVER RATIO
Fixed Asset Turnover
Ratio Times
Fixed Asset Turnover
Ratio Times
0.8
0.79
0.78
0.77
0.76
0.75
0.74
2010-11
2011-12
TIMES
2010-11 2011-12
Fixed Asset
Turnover Ratio
Times
0.76 0.8
INTERPRETATION:
 This ratio is used for
calculating the
contribution of the fixed
assets in terms of sales
made by the company.
 In the above calculation
major portion being
given by the fixed assets
is having the capacity to
be converted into sales
amount.

17. NET PROFIT MARGIN
2010-11 2011-12
23.5
23
22.5
22
21.5
21
Net Profit
Margin
21.5 23
20.5
PERCENTAGE
Net Profit Margin INTERPRETATION:
 Net profit margin of the
company is increases over
the previous year that
indicates the improving
conditions of the business
 An increase in the ratio
indicates the improvement
in the operational efficiency
of the business

18. SALES OF THE COMPANY
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12
16000
14000
12000
10000
8000
6000
4000
2000
0
sales 8626 10374 11457 13116 14204
Rs.Cr
sales INTERPRETATION:
 The graph shows the sales of
Hindustan Aeronautic Limited.
From the graph we can easily
said that the sales are
continuously increasing year
by year despite of high
inflation rate, adverse foreign
exchange rate and a drop in
manufacturing indices. HAL
achieved a turnover of Rs.
14204.21 crore with the
growth of 8.30% over the
previous year.

19. FINDINGS
 During the year, company has registered a
record turnover of Rs.14204 crore, with a
growth of 8.30% over the previous year.
 Inventory turnover ratio depicts the increasing
trend which indicates the faster sale of
inventory which is good for the company.
Earning per share is Rs 210.74 as against Rs
175.46 in the previous year
 As current ratio is showing an increasing
trend year on year, which implies that current
asset, are more compared to current
liabilities.

20. SUGGESTIONS
 To maintain a good current ratio, it must try to increase the amount
of current assets.
 The company is facing a problem of liquidity due to the reason that
the payment to be received from the debtors is not realized in the
time. That is the collection period is more than the required.
 The company, has to be strict to its debtors by reducing the credit
period allowed, so as to improve its efficiency in managing work.
 Company should try to explore new foreign market and
should enter in manufacturing of commercial aircraft for
domestic as well as for international market so that it can
utilize its resources well and can increase its profitability.

21. CONCLUSIONS
At last we can conclude that after having all the required information for
preparing my report, I have tried to analyze each and every function of the
HAL . During my report all the staff member of the HAL LUCKNOW had
well co-operate me. And also I have found that the, there is a very good
level of commitment in all the staff members. During my report I have tried
to cover each department of finance . I can conclude that the
HINDUSTAN AERONAUTICS LIMITED is one of the leading
NAVRATAN organisation .

22. LIMITATIONS
 Most of the information is collected from the secondary sources.
 As HAL comes under Defence sector of central government. So, the
overall data of HAL is not available .
 Due to shortage or less availability of time it may be possible that all the
related and concerned aspects may not be covered in the project.
 Only past two year data has been taken in this project which might not
give complete scheme performance.
 The training period was very less.

23. BIBLIOGRAPHY
Books:
Maheshwari S N and Maheshwari S K “An Introduction to
Accountancy” Ninth edition Vikas Publication,Section-IV
Financial Statements And Interpretation, page no-5.13 to 5.38.
 Bhalla V K “Working capital Management” 14th edition Anmol
Publication Pvt. LTD.,Chapter-3 Working Capital Policies page
no-64 and 66 to 70
Internet websites
 www.hal-india.com
http://115.112.148.193/aboutus.asp
http://115.112.148.193/financials.asp