RATIO ANALYSIS OF R.S FASTENERS

IN
R.S FASTENERS
(#249/13. G.T ROAD, DORAHA)
In Partial Fulfillment of the requirement for the degree
of BACHELOR OF BUSINESSADMINISTRATION ( BBA )
Panjab university chandigarh
SUBMITTED TO: SUBMITTED BY:
Department of Commerce and KAMALJOT KAUR
Business administration Univ.R.No.11309000222
Guru Nanak National College Doraha

PREFACE
Finance is regarded as the lifeblood of a business organization. This
is because the modern money economy, finance is one of the basic
foundations of all kind of the economic activities. For any business
student, who is striving to perform outstanding it is paramount
importance that apart from theoretical knowledge, they must also gain
some practical knowledge.
The training project deals with providing an opportunity to
management student to have the knowledge of real world concept in
the depth of its usage. As per the requirement of BBA degree,
students are sent to different industrial unities for gaining practical
experience.
This report is a result of 8 weeks of management summer training in
R.S FASTENERS. The project report is concerned with “To study
the ratio analysis of R.S FASTENERS”. R.S FASTENERS is
dealing with the manufacturing of nuts, bolts, washers, Steel metal
components.The main purpose of this report is to give a written
account on whatever I have studied about the company.
I have tried my best to present the true picture of the company.

CERTIFICATE
This project report
Of
Kamaljot Kaur
( University Roll No. 11309000222)
Titled
An Analytical study of Ratio Analysis
In
R.S FASTENERS
G.T ROAD DORAHA
Is approved and
Is acceptable in quality and form
Mr. Gursharanjit Singh
External Examiner
Head of Department of Commerce
( G.N.N College, Doraha )

ACKNOWLEDGEMENT
First of all, I would like to thank the alimighty god for his blessings showed
on me during the training programmed.
I would also like to express my special thanks to Mr. SANJIV KUMAR
MAHESHWARI who permits me for doing training in R.S FASTENERS.
I am extremely grateful to the Chief Finance Officer Mr. RAM SAROOP for
his constant encouragement and valuable suggestions through-out my
summer training and project for his cooperation extended to me.
It is really a matter of pleasure and sense of gratitude, I especially thank
MS. PREETINDER KAUR without whose supervision I would not able to
make project report.
I also express my sincere gratitude towards DR. NARINDER SINGH
SIDHU (Principal of G.N.N college DORAHA) and PROF.
GURSHARANJIT SINGH (Head of Department of commerce) and
PROF. BALPREET KAUR who has always been source of inspiration.
I am thankful to all my teachers who have provided me the guidance, help
and whole hearted cooperation during the training.
Last but not the least, my parents and friends were always there to give me
moral support in difficult situations.
KAMALJOT KAUR

DECLARATION
I hereby declared that entitled project report on “RATIO
ANALYSIS” is originally prepared by me In Partial
Fulfillment of the requirement for the degree of BACHELOR
OF BUSINESS ADMINISTRATION (BBA) Panjab university
chandigarh
Kamaljot kaur
Uni. Roll no. 11309000222
Place…………
Doraha …….....

CONTENTS
Chapter
No.
Topic Page
no.
1. INTRODUCTION 1-30
A. INTRODUCTION TO COMPANY 1-13
B. INTRODUCTION TO RATIO
ANALYSIS
14-30
2. OBJECTIVES OF THE STUDY 31
3. RESEARCH METHODOLOGY 32
4. DATA ANALYSIS AND
INTERPRETATION
33-55
5. FINDINGS 56
6. SUGGESSTIONS 57
7. LIMITATIONS 58
COCLUSION 59
BIBLIOGRAPHY 60
ANNEXURE 61-71

Light that shines through the ever growing, ever evoling group that is R.S
FASTENERS started in 1980. company has gained unquestionable
supremacy in the wide range of fasteners. RSF, with accreditation of
ISO/TS 1649:2002, enjoys the reputation for producing the widest range of
critical application fasteners for automobile,2 wheelers ,agricultural
tractor,heavy engine- eering equipments, chemical industry, military and
customized products.
The company’s manufacturing plant spread over 10,000 sq.mts. with
production faclilities of 2000 metric tones per annum, manned by a
dedicated team of employees working in perfect harmony,supllying over
350 items to about 110 customers.
RSF has installed sophisticated and precision machines and instruments to
ensure production of superior quality fasteners. Keeping in mind the
competitive and growing needs of customer,RSF is always on the look-out
for expansion and modernization.

GENERAL PROFILE
COMPANY NAME : R.S FASTENERS head office
3062, ST.no.12, new janta nagar,
Ludhiana : 141003. ph. O167507814
Works: #249/13. G.T ROAD, DORAHA
DISTT : LUDHIANA ( PB )
Ph. 01628256860
Website : www.r.s.fasteners.com
Revenue : 124 lac
Net worth : 10 lac.(app.)
Turnover : 28 lac.(app.)

NAME OF PARTNERS:
SANJIV KUMAR MAHESHWARI
RAJESH KUMAR MAHESHWARI
AJAY KUMAR MAHESHWARI
PARTNERS OF THE COMPANY
CONTROL
BY
Sanjiv Kumar
Maheshwari
(Partner sales)
Ajay Kumar
Maheshwari
( Partner purchases )
Rajiv Kumar
Maheshwari
(Partner works)

WORKING OF PARTNERS
MANAGING
PARTNER
PARTNER
WORKS
PRODUCTION
SUPERVISOR
HELPERS
FITTERS
MAINTAINACE
I/C
PURCHASE
EXECUTIVE
PARTNER
PURCHASE
PARTNER
SALES
MR
QC INCHARGE
QUALITY
CONTROL
INSPECTOR
INCOMING
INSPECTION
INPROCESS
INSPECTION
FINAL
INSPECTION
ACCOUNTS

LIST OF SOME OF OUR CUSTOMERS
M/S Mahindra & Mahindra limited, Zaherrabad/haridwar.
M/S force Motor LTD, Pune.
M/S QH Tablors Ltd.,Gurgaon/Manesar/Dehradune.
M/S Remsons Industuries Ltd., Mumbai/Daman.
M/S Mahindra Ugine Steel Co. Ltd,Nasik.
M/S Majestic Auto Limited,Ghazibad/Ludhiana.
M/S Rane Madras Ltd,
Chennai/Mysore/Pondy/panthnaagar
M/S Rane TRW Steering system Ltd. Trichy
M/S ZF Steering Gear India Limited, Pune.
M/S Suprajit Engineering Ltd.,Pune/panthanagar.
M/S Dana India Pvt. Ltd., Pune
M/S Mahindra & Mahindra Limited, SAS Nagar Mohali
M/S Mahindra & Mahindra Limited,IBD,Chandigarh.
M/S Mahindra & Mahindra Limited, Chappancherri.
M/S Kirlosker Toyoda, Banglore
M/S RSB Internatinal Ltd., Pune
M/S International Tractors Ltd., Hoshiarpur
M/S Sonassomic Lemforder Ltd., Gurgaon. AND MANY MORE

QUALITY POLICY
WE ARE COMMITED TO MANUFACTURE AND SUPPLY,
PRODUCTS THAT ADHARE TO CONTACTUAL SPECIFICATIONS
AND SPECIFICATIONS AND SATISFY CUSTOMERS IN TERMS
OF CONSISTENT QUALITY COMPETITIVE PRICE, TIMELY
DELIVERY AND COMPANY IS COMMITTED TO COMPLY WITH
REQUIREMENTS AND CONTINUALLY IMPROVE THE
EFFECTIVENESS OF THE QUALITY MANAGEMENT SYSTEM.
Sd/- S. Maheshwari
(partner)
VISISON/MISSION
VISION
To be the largest and the most respected domestic company with
global footprints mission.
MISSION
 Be the no.1 company on a global level.
 Export to more than 100 countries through supply of nuts and
bolts’
 Create own brand presence in export and domestic market
through market penetration.
 Introduce more more products

PRODUCT PROFILE:
The company is mainly producing fasteners (nuts & bolts) for
automobiles, 2 wheelers, heavy chemical industries, agricultural
tractor, military and customized products. The company has gained
unquestionable supremacy in the wide range of fasteners.
MAIN TYPES OF NUTS:
The main types of nuts are as follow
MAIN TYPES
OF NUTS
HEX NUTS
NYLOCK
NUTS
LOCK NUTS
WHEEL
NUTS
PROJECTION
SQUARE
WELD NUTS
FLANGED
NUTS
HEX WELD
NUTS
SPECIAL
NUTS

HEX NUTS
RANGE METRIC-M3 TO M60
INCHES-THRED AVAILABLE-UNF, UNC, BSW, 14” TO
2”MANUFACTURING FACILITIES-HOT FORGE, COLD FORGE,
MACHINED
MATERIAL- AISI-1010, 1015, 15B25,
1541, as per requirement
NYLOCK NUTS:
RANGE METRIC-M4 TOM30
INCHES-THRED AVIALABLE- UNF, UNC, BSW,
AND AS PER CUSTOMERS REQUIREMENTS
14”TO1”
FINISH-PLAIN, YELLOW PLATED, BLACK
MANUFACTURING FACILITIES-COLD FORGE,
MACHINED
LOCK NUTS:

RANGE METRIC-M3TOM60
INCHES-14”TO2”
FINISH- PLAIN, BZP, YELLOW PLATED, BLACK, TRIVALENT
MATERIAL-AISI-1010, 1015, 15B25, 1541
MANUFACTURING FACILITIES-HOT FORGE, COLD FORGE,
MACHINED
WHEEL NUTS:
RANGE METRIC-M3 TOM35
INCHES-14” TO2”
FINISH-PLAIN, BZP, YELLOW PLATED, BLACK
MATERIAL-AISI-1010, 1015, 1541, 15B25

PROJECTION SQUARE WELD NUTS:
RANGE METRIC-M4TOM16
INCHES-14” TO12”
FINISH- RUST PREVENTIVE OIL
MATERIAL-AISI-1010, 1015, 15B25, 1541, AS PER REQUIREMENT
MANUFACTURING FACILITIES-COLD FORGE
FLANGE NUTS:
RANGE METRIC- M4 TO M30
INCHES-14” TO12”, AS PER REQUIREMENT
FINISH-PLAIN, BZP, YELLOW PLATED, BLACK
MANUFACTURING FACILITIES-COLD FORGE, HOT FORGE
HEX WELD NUTS:

RANGE METRIC-M4 TO M16
INCHES-14” TO 12”
FINISH-RUST PREVENTIVE OIL
MATERIAL- AISI1010, 1015, 15B25, 1541
MANUFACTURING FACILITIES- COLD FORGE
SPECIAL NUTS:
ALL AS PER CUSTOMER REQUIREMENT

SWOT ANALYSIS
STRENGTH
1. Visitory management with strong focus an growth and
diversification.
2. Established sales network in all major cities of the country.
3. Core competency in manufacturing different type of nuts.
4. Produts are well accepted in the markets.
5. Easy availability of raw material.
OPPORTUNITIES
1. Arrival of new technologies.
2. Scope for expansion in international market.
3. good quality offers a very good opportunity to R.S Fasteners in local
& international market.
4. R&D centre continuously on improving quality standards introducing
new & unique in their product.
WEAKNESSES
1. High cost structure.
2. No separate R&D facility.
3. Poor supply chain causes wastages of resources and increases and
increase cost.
4. The price of raw material and finished goods move in tandem with
international prices, which are,in turn,have positive correlation with
the prices of petrochemical products.
THREATS
1. Rules & regulations.
2. Arrival of new companies
3. Change in government policies and business cycles.
4. Continuous quality improvement will be the need of the hour for
which urgent measures are called for from all shareholders.

GOVERNING REGULATIONS
Acknowledgement of registration of firms by registrar of firms.
Certificate of Punjab pollution control board for grant consent to
operate an industrial plant.
Certificate of registration issued under central excise.
Importer exporter code issued to director, R.S.Fasteners.
Certificate of registration issued under central sales act, 1956.

FINANCE DEPARTMENT OF COMPANY:
As the present day, business activities are predominantly carried on
by company form of organization, there is need to give the emphasis
to the financial practices and problems
of the company.
To fulfill this need the company has a different department for
controlling the finance activities of the company. As the company is a
partnership firm all the finance activities are controlled by one of the
partner i.e. Sanjiv Maheshwari. All the receipt and payments are
made by them and a proper control is established by him. The
accounting activities are done by Mr. Ramsaroop and all other
functions are done by Miss. Preetinder kaur.
OBJECTIVES:
The main objectives of the finance department are as
follow;
1. Acquiring sufficient funds: The main aim of finance department
is to assess the financial needs of the company and finding out
suitable sources for raising the funds. The sources should be
commensurate with the needs of the business.
2. Proper utilization of funds: Though raising of funds is important
but their effective utilization is more important. The funds should
be used in such a way that maximum benefit is derived from them.

3. Increasing profitability: The planning and control of finance
function aims at increasing profitability, sufficient funds will have to
be invested.
4. Maximizing firm value: Finance function also aims at maximizing
the value of firm .Beside profits ,the type of sources used for
raising funds ,the cost of funds ,the condition of money market ,the
demand for products are some other considerations which also
influence a firm value.
5. RATIO ANALYSIS
The term “Ratio” refers to the numerical and quantitative relationship
between two items or variables. The relationship can be exposed as
 Percentages
 Fractions
 Proportion of numbers
Ratio analysis is defined as the systematic use of the ratio to interpret
the financial statements. So, that the strengths and weaknesses of a
firm, as well as its historical performance and current financial
condition can be determine. Ratio reflects a quantitative relationship
helps to form a quantitative judgement.
A ratio is only a comparison of the numerator with the denominator.
The term ratio refers to the numerical or quantitative relationship
between two figures. Ratio is designed to show how one number is
related to another. In simple words. Ratio is the numerical
relationship between two variables which are connected with each
other in same way or the other.

DEFINITION :
According to Hunt, William and Donaldson, “Ratios are simply a
means of high lighting in the arithmetical terms the relationship
between figures drawn financial statements.”
According to J. Betty , “The term accounting ratios is used describe
significant relationships exits between figures shows on a balance
sheet, in a profit and loss account, in a budgetary control system or in
any other part of the accounting organization.”
STEPS IN THE RATIO ANALYSIS
A. The first task of the financial analysis is to select the information
relevant to the decision under consideration from the statements
and calculates appropriate ratios.
B. To compare the calculated ratios of the same firm relating to the
past or with the industry ratios. It facilitates in assessing success
or failure of the firm.
C. Third step is to interpretation, drawing of inferences and report
writing conclusions are drawn after comparison in the shape of
report or recommended courses of action.
IMPORTANCE OF RATIO ANALYSIS
Comparison of a firm with its own performance in the past.
Comparison of one firm with another firm in the industry.
Comparison of one firm with the industry as a whole.
Comparison of an achieved performance with predetermined
standards.
Comparison of one department of a concern with other
departments.

BASIS OR STANDARDS OF COMPARISON
Ratio are relative figures reflecting the relation between variables.
They enable analyst to draw conclusions regarding financial
operations. They use of ratios as a tool of financial analysis involves
us the comparison with related effects. This is the basis of ratio
analysis. The basis of ratio analysis is of four types.
Past ratios, calculated from past financial statements of the firm at
the same point of time.
Competitor’s ratio, of the same most progressive and successful
competitor firm at the same point of time.
Industry ratio, the industry ratios to which the firm belongs to.
Projected ratios, ratios of the future developed from the projected
of proforma financial statements.
NATURE OF RATIO ANALYSIS
Ratios analysis is a technique of analysis and interpretation of
financial statements. It is the process of establishing and interpreting
various ratios for helping in making certain decisions. It is only a
means of understanding of financial strengths and weaknesses of a
firm. There are a number of ratios which can be calculated from the
information given in the financial statements, but the analyst has to
select the appropriate data and calculate only a few appropriate
ratios. The following are the four steps involved in the ratio analysis.
Selection of relevant data from the financial statements depending
upon the objective of analysis.
Calculation of appropriate ratios from the above data.
Comparison of the calculated ratios with the ratio of same firm in
the past, or the ratios developed from projected financial
statements or the ratios of some other firms or the comparison
with the ratios of the industry to which the firm belongs.

INTERPRETATION OF RATIO
Calculation of ratio is comparatively simple, routine clerical in nature
but the interpretation of ratio is highly sophisticated and intricate
phenomenon. The benefit of ratio analysis depends a great deal upon
the correct interpretation. It needs skills, intelligence, training and
intuition of high order on the part of the analyst.
The following are different ways in which ratios may be interpreted :-
1. Individual Ratio :- Individual ratio may have significance of its
own. For example if the current ratio of one unit continuously falls,
It may indicate probable insolvency. But generally single ratio may
not convey any sense. However single ratios may be studied with
reference to certain popular rules of thumb with can only give
approximations. Care must be exercised because such.
comparison may be erroneous or unrealistic.
2. Group Ratio :- Ratio may be interpreted by considering groups of
several related ratio. Such interpretation may be studied along
with liquid ratio. Such interpretation may be more meaningful. For
example- current ratio may be studied along with return on
investment.
3. Comparisons with projections:- in a business unit where system
of budgetary control and forecast is in existence, projected
financial statement are usually drawn. Ratios calculated based on
such projected financial statements shall be compared. Variances
shall be calculated and analysis by reasons and persons. It shall
enable to take corrective action wherever required.
4. Inter- firm comparison :- Ratios of one unit may be compared
with the ratios of another identical unit. Such comparison is useful
for evaluations relatives financial position of the unit or industry.
While making such comparisons, care must be taken regarding the
difference of accounting methods, policies, procedures and
terminology being followed by different units.

GUIDELINES FOR USE OF RATIO
1) Accuracy Of Financial Statement:- The reliability of ratios is
linked to accuracy of information of ratios in these statements.
Before calculation ratio one should see whether proper concepts
and conventions have been used for preparing financial
statements or not. This statement should also be properly audited
by competent auditors. The precaution will establish the reliability
of data given in financial statement.
2) Selection Of Ratios :- Another precaution in ratio analysis is the
proper selection of appropriate ratios. The ratio should match the
purpose for which these required. Calculation of large number of
ratio without determining their need in the present context may
confuse the things instead of solving them. Only those ratio should
be selected which can throw proper light on the matter to be
discussed.
3) Caliber of the Analyst :- The ratio is only the tools of analysis and
their interpretation will depend upon the caliber and competence of
the analyst. He should be familiar with the various financial
statements and the significance of changes etc. A wrong
interpretation may create havoc for the concern since wrong
conclusions may lead to wrong decisions. The utility of ratio is
linked to the expertise of the analyst.
4) Ration Provides Only a Base :- The ratio are only guidelines for
the analyst, he should not base his decisions entirely on them. He
should study any other relevant information, situation in the
concern, general economic environment, etc. before reaching final
conclusions. The study of ratios in isolation may not always prove
useful. A businessman will not afford single wrong decisions
because it may far- reaching consequences. The interpreter
should use the ratio as guide and may try to solicit any other
relevant information which helps in reaching correct decision.

ADVANTAGES OF RATIO ANALYSIS
Ratio can assist management in its basic functioning like forcasting,
planning and controlling etc. performances of the various divisions
associated with the firms can be calculated with the help of the ratio
analysis.
Following are the some advantages of ratio analysis :-
1) Simplifies Financial Statements:- Ratio analysis helps in
studying the whole story of the change occurring in the financial
condition of the business. Thus we can say that ratio analysis
simplifies the comprehension of the financial statement.
2) Facilitates Inter Firm Comparison:- Ratio analysis provides
sufficient data in order to compare inter firm performance. Ratio
highlights the factors associated with successful and unsuccessful
firms, strong and weak firms.
3) Helpful In Intra Firm Comparisons:- Ratio analysis is also
useful in comparing the results of different divisions of the firm.
These ratios decide their efficiency in the past as well as in the
future.
4) Helpful In Planning:- As we know that planning and forcasting is
the important part of the firm, so ratio analysis helps in deciding
the various norms that may indicate future success in failure.
Thus, we can say ratio analysis is helpful in various ways and can
assist the company to move in the direction of success and helps in
culling away the faults or errors.

USEFULNESS OF RATIO ANALYSIS
1) Usefulness For Short Term Creditors :- Short term creditors,
bills payables, creditors for expenses etc. they are interested in
analyzing the liquidity of unit. They determine the firm ability to
meet its current obligations with the help of liquidity ratios such as
current ratio and quick ratio.
2) Usefulness For Long Term Creditors :- Long term creditors are
financial institutions, debenture holders, mortgage creditors etc.
are interested in analyzing the capacity of the unit of reply
periodical interest and repayments of loan on schedule.
3) Usefulness To Employees :- Employees are interested in fair
wages adequate fringe benefits and bonus linked with productivity.
Ratio analysis provides them adequate information regarding
efficiency and profitability of the unit. This knowledge helps them
to bargain with the management regarding their demands for
improving wages, bonus etc.
4) Usefulness To Government:- Government is interestedto know
the overall strength of the industry. Various financial statements
published by industry units to calculate ratios for determining short
term, long term and overall financial positions of the concerns.
Profitability indexes can also be prepared with the help of ratios.
Government may base its future policies on the basis of industrial
information available from various units.
5) Usefulness For Investors :- The investors can determine the
magnitude and direction of the movement in firm earnings with the
help of profitability ratios such as earning per ratio, dividend per
share, etc. After analyzing the relevant ratios the present investors
can decide whether to hold, sell or purchase the shares and the
prospective investors can decide whether or not to buy the shares.

LIMITATIONS OF RATIO ANALYSIS
In spite of many advantages, there are certain limitations of the ratio
analysis techniques and they should be kept in mind while using them
in interpreting financial statements. The following are the main
limitations of accounting ratios:
1. Limited Comparability: Different firms apply different accounting
policies. Therefore the ratio of one firm can not always be
compared with the ratio of other firm. Some firms may value the
closing stock on LIFO basis while some other firms may value on
FIFO basis. Similarly there may be difference in providing
depreciation of fixed assets or certain of provision for doubtful
debts etc.
2. False Results:Accounting ratios are based on data drawn from
accounting records. In case that data is correct, then only the
ratios will be correct. For example, valuation of stock is based on
very high price, the profits of the concern will be inflated and it will
indicate a wrong financial position. The data therefore must be
absolutely correct.
3. Effect of Price Level Changes: Price level changes often make
the comparison of figures difficult over a period of time. Changes
in price affects the cost of production, sales and also the value of
assets. Therefore, it is necessary to make proper adjustment for
price-level changes before any comparison.
4. Qualitative factors are ignored:Ratio analysis is a technique of
quantitative analysis and thus, ignores qualitative factors, which
may be important in decision making. For example, average
collection period may be equal to standard credit period, but some
debtors may be in the list of doubtful debts, which is not disclosed
by ratio analysis.
5. Effect of window-dressing:In order to cover up their bad
financial position some companies resort to window dressing.
They may record the accounting data according to the

convenience to show the financial position of the company in a
better way.
6. Costly Technique: Ratio analysis is a costly technique and can be
used by big business houses. Small business units are not able to
afford it.
7. Misleading Results: In the absence of absolute data, the result
may be misleading. For example, the gross profit of two firms is
25%. Whereas the profit earned by one is just Rs. 5,000 and sales
are Rs. 20,000 and profit earned by the other one is Rs. 10,00,000
and sales are Rs. 40,00,000.
CLASSIFICATION OF RATIOS :-
The use of ratio analysis is not confined to financial manager only.
There are different parties interested in the ratio analysis for knowing
the financial position of a firm for different purposes. Various ratios
can be classified as follows:-
1) Traditional Ratio
2) Functional Classification
3) Significance Ratios
Traditional classification
It includes the following:
Balance sheet (or) position statement ratio: They deal with the
relationship between two balance sheet, e.g. the ratio of current
assets to current liabilities etc., both the items must, however, pertain
to the same balance sheet.
Profit & loss account (or) revenue statement ratio: these ratios
deal with the relationship between two profit & loss account items,
e.g. the ratios of gross profit to sales etc.

Composite (or) inter statement ratio: These ratios exhibit the
relation between a profit & loss account or income statement item
and a balance sheet items, e.g. stock turnover ratio, or the ratio of
total assets to sales.
SIGNIFICANCE RATIOS :-
Some ratios are important than others and the firm may classify them
as primary and secondary ratios. The primary ratio is one which is of
the prime importance to a concern. The others ratiosa that support
the primary ratio are called secondary ratios.
IN THE VIEW OF FUNCTIONAL CLASSIFICATION THE RATIOS ARE:
1. Liquidity ratio
2. Leverage ratio
3. Activity ratio
4. Profitability ratio
5. Overall profitability ratio
LIQUIDITY RATIOS:- Liquidity refers to the ability of a concern
to meet its current obligations as & where there becomes due. The
short term obligations of a firm can be met only when there are
sufficient liquid assets. The short term obligations met by realizing
amounts from current, floating or circulating assets. The current
assets should either be calculated liquid or near liquidity. They should
be convertible into cash for paying obligations of short term nature. If
current assets can pay off current liabilities, then liquidity position will
be satisfactory.
To measure the liquidity of a firm the following ratios can be
calculated:
1) Current assets
2) Quick or acid test or liquid ratio
3) Absolute liquid ratio or cash position ratio

A) CURRENT RATIO:
Current ratio may be defined as relationship between current assets
& current liabilities. This ratio also known as “working capital ratio” is
a general measure of liquidity and is most widely used to make the
analysis of a short term financial position or liquidity of a firm. It is
calculated by following method
CURRENT RATIO =Current Assets/Current Liabilities
COMPONENTS OF CURRENT RATIO
CURRENT ASSETS CURRENT LIABILITIES
Cash in hand Outstanding and accured
expenses
Cash at bank Bank overdraft
Bills receivable Bills payable
Inventories Short term advances
Work-in –progress Sundry creditors
Marketable securities Dividend payable
Short term investments Income-tax payable
Sundry debtors
Prepaid expenses
 Current Ratio measures short term liquidity of the concern and its
ability to meet its short term obligations within a time span of a
year.
 It shows the liquidity position of the enterprise and its ability to
meet current obligations in time.
 Higher ratio may be good from the point of view of creditors. In the
long run very high current ratio may affect profitability ( e.g. high
inventory carrying cost)

 Shows the liquidity at a particular point of time. The position can
change immediately after that date. So trend of the current ratio
over the years to be analyzed.
 Current Ratio is to be studied with the changes of NWC. It is also necessary
to look at this ratio along with the Debt-Equity ratio.
B) Quick or Acid Test Ratio: Quick ratio, also known as Acid
test or Liquid ratio is more rigorous test of liquidity than the current
ratio. The term liquidity refers to the liabilities of the firm to pay its
short term obligation as and when they become due. Current assets
included inventory and prepaid expenses which is not easily
convertibles into cash with in a short period not considered in current
assets quick ratio may be define as a relationship between quick
assets and currents liabilities. An asset is said to be liquid if it is
converted into cash with in a short period without loss of value.
QUICK RATIO = QUICK ASSETS /CURRENT
LIABILITIES
COMPONENTS OF QUICK OR LIQUID RATIO
QUICK ASSETS CURRENT LIABILITIES
Cash in hand Outstanding or accured
expenses
Sundry debtors Short term advances
Marketable securities Sundry creditors
Temporary investments Dividend payable
Income tax payable
C) ABSOLUTE LIQUID RATIO : Although receivables, debtors and
bills receivable are generally more liquid than inventories, yet there
may be doubts regarding there realization into cash immediately or in
time.Hence absolute liquid ratio should also be calculated together
with the current ratio and quick ratio so as to exclude even

receivables from the current assets and find out the absolute liquid
assets.
Absolute liquid assets include cash in hand etc. the acceptable forms
for this is 50% (or) 0.50% (or)1:2 i.e.,Rs.=1 worth absolute liquid
assets are considered to pay Rs. 2 worth current liabilities in time as
all the creditors are nor accepted to demand cash at the same time
and then cash may also be realized from debtors and inventories.
COMPONENTS OF ABSOLUTE LIQUID RATIO
ABSOLUTE LIQUID RATIO CURRENT LIABILITIES
Cash in hand Outstanding expenses
Interest on fixed assets Bills payable
Short term advance
Sundry creditors
Dividend payable
2. LEVERAGE RATIO:- The leverage on solvency ratio refers to
the ability of a concern to meet its long term obligations.The following
ratio serves the purpose of determining the solvency of the concern.
(b) PROPRIETORY RATIO :- A variant to the debt equity ratio to
the proprietary ratio which is also known as equity ratio. The ratio
establishes relationship between shareholder funds to total assets of
the firm.
Absolute liquid ratio= Absolute liquid ratio/Current liabilities
Proprietary Ratio = shareholder fund / Total assets

COMPONENTS OF PROPRIETORY RATIO
2. ACTIVITY RATIO :- Funds are invested in various assets in
business to make sales and earn profits. The efficiency with which
assets are managed directly effect the volume of sales. Activity ratio
measures the efficiency (or) effectiveness with which a firm manages
its resources (or) assets. These ratios are also called turnover ratio.
A)WORKING CAPITAL TURNOVER RATIO :- It indicates the
velocity of the utilization of net working capital. This indicates the no.
of times the working capital is turned over in the course of a year. A
higher ratio indicates efficient utilization of working capital and a lower
ratio indicates indicates inefficient utilization.
SHAREHOLDER FUND TOTAL ASSETS
Share capital Current assets
Reserve and surplus Cash in hand and at bank
Bills receivable
Inventories
Sundry debtors
Prepaid expenses
Marketable securities
Working capital turnover ratio= cost of goods sold
Working capital = current assets – current liabilities

Components of working capital
Current assets Current liabilities
Cash in hand Outstanding expenses
Inventories Short-term advances
Work-in-progress Sundry creditors
Marketable securities Dividend payable
Short term investments Income-tax payable
Sundry debtors
Prepaid expenses
(b) FIXED ASSETS TURNOVER RATIO:- It is also known as
sales to fixed assets ratio. This ratio measures the efficiency and
profit earning capacity of the firm. Higher the ratio, greater is the
intensive utilization of fixed assets. Lower ratio means under-
utilization of fixed assets.
Fixed assets turnover ratio = cost of sales/net fixed assets
Cost of sales = Income from services
Net fixed assets = Fixed assets – Depreciation
c) CAPITAL TURNOVER RATIO:- Sometimes the efficiency
and effectiveness of the operations are judged by comparing the cost
of sales or sales with amount of capital invested in the business and
not with assets held in the business,though in both cases the same
result is expected. Capital invested in the business may be classified
as long-term and short-term capital.

d) CURRENT ASSETS TO FIXED ASSETS RATIO :- This
ratio differs from industry to industry. The increase in the ratio means
that debtors and stock are increased too much orr fixed assets are
more intensively used. If the current assets increase with the
corresponding increase in profit, it will show that the business is
expanding.
COMPONENTS OF CURRENT ASSETS TO FIXED ASSET RATIO
Capital turnover ratio = cost of goods sold/capital employed
Capital employed = capital+ reserves & surplus
CURRENT ASSETS FIXED ASSETS
Cash in hand Machinery
Cash at bank Building
Bills receivable Plant
Inventories Vehicles
Work-in-progress
Marketable securities
Sundry debtors
Current assets to fixed assets ratio = current assets/fixed assets

3. PROFITABILITY RATIO :- The primary objective of business
is to earn profits because profit is the engine that drives the
business enterprise.
A) NET PROFIT RATIO:- Net profit ratio establishes a
relationship between net profit after tax and sales and indicates the
efficiency of the management in manufacturing, selling,
administrative and other activities of the firm.
Net profit ratio = net profit after tax/net sales
Net profit after tax =
Net profit(-)depreciation(-)interest(-)income tax
c) RETURN ON TOTAL ASSETS :- Profitability can be measured in
terms of relationship between net profit and assets. This ratio is
also known as profit-to assets ratio. It measures the profitability of
investment. The overall profitability can be known.
Return on assets = Net profit/Total assets
Net profit = Earning before interest and tax
B) RESERVES AND SURPLUS TO CAPITAL RATIO :- It reveals the
policy by the company with regard to growth shares. A very high
ratio indicates a conversation dividend policy and increased
ploughing back to profit. Higher the ratio better will be the position.
Reserves & surplus to capital = Reserves & surplus/ capital
Total assets = Fixed assets + Current assets

d) OPERATING PROFIT RATIO :- operating ratio establishes the
relationship between cost of goods and other operating expenses
on the one hand and the sales on the other.
Operating profit ratio is calculated by dividing operating profits by
sales.
Operating profits = net sales – operating cost
Operating profit ratio = operating profit/ sales
G) RETURN ON INVESTMENT :- Return on shareholders
investment, popularly known as return on investment or return on
shareholders or proprietor’s funds is the relationship between net
profit after interest and tax and the proprietor’s fund.
Operating ratio = operating cost/net sales
Return on shareholders investment =
net profit after interest and tax/shareholders funds

OBJECTIVES OF THE STUDY
1) To study the present financial system of R.S FASTENERS.
2) To determine the profitability, liquidity ratios.
3) To know the current trend of assets and liabilities.
4) To analyze the liquidity position of the firm.
5) To analyze the capital structure of the company with the help of leverage
ratio.
6) To offer appropriate suggestions for the better performance of the
organization.

RESEARCH METHODOLOGY
Research is an art of scientific investigation advances learner’s
dictionary of current English.
“Research is a careful investigation or injury especially through
search for finding new fact in any branch of knowledge.”
The research done during this project was primary and secondary
research i.e. the data was collected through direct methods. The
systematic designed, collection & analyses of data relevant to a
specific marketing situation facing an organization.
COLLECTION OF DATA
There are several ways of collection the appropriate data which differ
considerably in context of money< cost, time and other resourcesat
disposable of the researcher.
There are two types of data:
a) Primary data
b) Secondary data
PRIMARY DATA :- Primary data are those which are collected
afresh and for the first time, thus happen to be original in character. In
the case of descriptive research, researcher from survey whether
sample survey or census survey it is called primary data.
SECONDARY DATA :- secondary data are those which have
already been collected by someone else and have already been
passed through statically process.

Analysis of short term Financial Position or test of
liquidity
A)LIQUIDITY RATIO
(a) CURRENT RATIO = CURRENT ASSETS/CURRENT
LIABILITIES
CURRENT RATIO YEAR 2008-2009 YEAR 2009-2010
Current Assets 163607608.17 314374027.31
Current Liabilities 54594268.02 220788892.57
Current Ratio 3.01 1.83
Interpretation :-
According to banker’s rule of thumb 2:1 is the
ideal ratio of the current ratio as compared to previous year;
current ratio has decreased in current year. Because of
decrease in current assets.
0
0.5
1
1.5
2
2.5
3
3.5
2009 2010
CurrentAssets
Year

(b) QUICK RATIO = QUICK ASSETS /CURRENT LIABILITIES
Particular 2008-2009 2010-2010
Current Assets 103202141.72 307769019.16
Quick Ratio 1.89 1.39
Interpretation:-
According to banker’s rule of thumb 1:1 is the
ideal ratio for liquid ratio. As compared to previous year, liquid
ratio has decrease in current year.
0
0.5
1
1.5
2
2009 2010
QuickRatio
Year

(c)ABSOLUTE LIQUID RATIO = LIQUID RATIO
CURRENT LIABILITIES
Particular 2008-2009 2009-2010
Liquid Assets 97367927.22 296237680.8
Absolute Liquid Ratio 1.78 1.34
Interpretation :-
As compared to previous year absolute ratio has
decreased in current year because of increase in current liabilities.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2009 2010
AbsoluteliquidRatio
Year

(d)WORKING CAPITAL = CURRENT ASSETS – CURRENT
LIABILITIES
WORKING
CAPITAL RATIO
YEAR 2008-2009 YEAR 2009-2010
Current Assets
Inventories
Sundry debtors
Cash & Bank
balance
Loan & advances
61272671.45
94701925.98
1698020.24
5801603.50
97786024.15
289315442.38
4688411.65
9648055.36
TOTAL 163474221.17 401437933.54
Working capital
ratio
108879953.15 180649040.97
Working capital ratio
Interpretation :-
As compared to previous year has been increased in
current year. Because of increased in current liabilities and
decreased on current assets.
0
50000000
10000000
15000000
20000000
2008-
2009
2009-
2010
Amount
Year

(B)PROFITABILITY RATIO
(a) GROSS PROFIT RATIO = GROSS PROFIT * 100
SALES
GROSS PROFIT RATIO YEAR 2008-2009 Year 2009-2010
Net sale 236762542.52 401482564.42
Gross profit 31584123.17 52291147.72
Gross profit ratio 13.33 13.02
Interpretation :-
As compared to previous year, gross profit ratio
has been decreased from 13.33 to 13.02 in the current year.
12.85
12.9
12.95
13
13.05
13.1
13.15
13.2
13.25
13.3
13.35
2008-
2010
2009-
2010
Amount
Year

(b) NET PROFIT RATIO = NET PROFIT AFTER TAX * 100
NET SALES
NET PROFIT RATIO YEAR 2008-2009 YEAR 2009-2010
Net profit after tax 5782106.85 9536298.09
Net sales 236762542.52 401482564.42
Ratio 2.44 2.37
Interpretation :-
As compared to previous year, net profit ratio
has decline.
2.32
2.34
2.36
2.38
2.4
2.42
2.44
2009 2010
N.Pratio
Year
k

(C) CASH PROFIT RATIO :- CASH PROFIT * 100
NET SALES
CASH PROFIT RATIO YEAR2008-2009 YEAR 2009 -2010
Cash profit
Net profit
Add:- depreciation
5782106.35
5680211.86
9536298.09
11339320.80
TOTAL 11462318.21 20875618.84
Net sales 236762542.52 401482564.42
Cash profit ratio 4.8 5.1
Interpretation :-
As compared to previous year, cash profit ratio has
been increased.
4.6
4.7
4.8
4.9
5
5.1
2008 -
2009
2009-
2010
Amount
Year

(C) ACTIVITY RATIO :-
(a) INVENTORY TURNOVER RATIO = COGS
AVERAGE STOCK
Interpretation :-
As compared to previous year there is decrease in the
ratio of current year.
Particular 2008-2009 2009-2010
Cost of goods sold 205178419.35 439761101.50
Average Inventory at
cost
61272671.45 97786024.15
Inventory turnover
ratio
3.34 3.57
0
0.5
1
1.5
2
2.5
3
3.5
4
2009 2010
Inventory
TurnoverRatio
Year

(B) DEBTOR TURNOVER RATIO :- NET CREDIT SALES
AVERAGE DEBTORS
Interpretation :-
As compared to previous year, debtor turnover ratio has
been decreased due to increase in sales.
0
1
2
3
4
5
6
2009 2010
Debtorsturnoverratio
Year
DEBTOR TURNOVER
RATIO
2008-2009 2009-2010
Net Credit Annual Sales 505180506.02 643473082.10
Average Trade Debtors 94701925.8 89315442.38
Debtors Turnover Ratio 5.33 2.22

(c) CREDITOR TURNOVER RATIO :- NET CREDIT PURCHASES
AVERAGE CREDITORS
Interpretation :-
As compared to previous year, creditors turnover ratio
has been decreased in creditors in current year.
0
1
2
3
4
5
6
2009 2010
Creditorsturnoverratio
Year
CREDITOR TURNOVER
RATIO
2008-2009 2009-2010
Net credit annual
purchase
268803474
.27
472810230.88
Average trade creditors 52159254.
02
203953820.57
Creditors turnover ratio 5.15 2.31

(D)WORKING CAPITAL TURNOVER RATIO =
COGS
AVERAGE WORKING STOCK
Interpretation :-
As compared to previous year, working capital ratio
has been increased in the current year.
1.85
1.855
1.86
1.865
1.87
1.875
1.88
2008-
2009
2009-
2010
WorkingcapitalratioWORKING
CAPITAL RATIO
2008-2009 2009-2010
Cost of sale 205178419.35 349191416.7
Net working capital 110248620.15 184947617.74
Working capital
turnover ratio
1.86 1.88

(D) SOLVENCY RATIO
(a) DEBT EQUITY RATIO = TOTAL LONG TERM DEBTS
SHAREHOLDERS FUND
DEBT EQUITY RATIO YEAR 2008-2009 YEAR 2009-2010
Total long term debt 91415679.04 426750085.30
Shareholders fund 102665219.08 202721427.87
TOTAL 0.89 1.33
Interpretation :-
As compared to previous year, debt equity ratio has
been decreased due to increase in long debt in current year.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2008-
2009
2009-
2010
Debtequityratio
Year

(b) FUNDED DEBT TO TOTAL CAPITALISATION
= TOTAL LONG TERM DEBT * 100
TOTAL CAPITALISATION
FUNDED DEBTED TO
TOTAL
CAPITALISATION
YEAR 2008-2009 YEAR2009-2010
Total long term debt 91415679.04 426750085.30
TOTAL 0.89 1.33
Interpretation :-
As compared to previous year, funded debt to
capitalization ratio has been decreased due to increase in long debt
in current year.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2008-
2009
2009-
2010
Amount
Year

(c) DEBT EQUITY RATIO = SHAREHOLDERS FUND
TOTAL ASSETS
EQUITY RATIO YEAR 2008-2009 YEAR 2009-2010
Total 102665219.08 202721427.87
Total assets
Current assets
Fixed assets
164842888.17
29238009.95
405736510.31
68130941.15
Total 194080898.12 473867451.46
Debt equity ratio 0.53 0.43
Interpretation:-
As compared to previous year, equity ratio has been
decreased due to increase in shareholders fund and total assets in
current year.
0
0.1
0.2
0.3
0.4
0.5
0.6
2008-
2009
2009-
2010
Debtequityratio
Year

(d) SOLVENCY RATIO = TOTAL LIABILITIES TO OUTSIDERS
TOTAL ASSETS
SOLVENCY RATIO YEAR 2008-2009 YEAR 2009-2010
Total liabilities to
outsiders fund
91415679.04 426750085.30
Total assets
Fixed assets
Current assets
29238009.95
164842888.17
68130941.15
405736510.31
Total 194080898.12 473867451.46
SOLVANCY RATIO 0.47 0.90
Interpretation :-
As compared to previous year, solvency ratio has
been increased due to decrease in shareholders fund and total
assets in current year.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2008-
2009
2009-
2010
Amount
Year

(e ) FIXED ASSETS TO NETWORTH =
FIXED ASSETS AFTER TAX
SHAREHOLDERS FUND
FIXED ASSETS TO
NETWORTH RATIO
YEAR2008-2009 YEAR 2009-
2010
Fixed assets after tax 29238009.95 68130941.15
Total 0.28 0.33
Interpretation :-
As compared to previous year, fixed assets to net
worth ratio has been increased due to increase in shareholders fund
and decrease in current assets.
0.25
0.26
0.27
0.28
0.29
0.3
0.31
0.32
0.33
2008-
2009
2009-
2010
Amount
Year

(f) FIXED ASSETS TO LONG TERM FUND = FIXED ASSETS
LONG TERM DEBT
Interpretation :-
As compared to previous year, fixed assets long term
fund ratio has been increased due to increase in long term funds.
0.32
0.33
0.34
0.35
0.36
0.37
0.38
2008-
2009
2009-
2010
Amount
Year
FIXED ASSETS TO
LONG TERM FUND
YEAR 2008-2009 YEAR2009-2010
Fixed assets 29238009.95 68130941.15
Long term funds
Secured loans 84326442.82 178780072.52
Total 0.34 0.38

(g) CURRENT ASSETS TO SHAREHOLDERS FUND =
CURRENT ASSETS
SHAREHOLDERS FUND
CURRENT ASSETS
TO SHAREHOLDERS
FUND RATIO
YEAR 2008-2009 YEAR 2009-2010
Current assets
Inventories
Sundry debtors
Cash and bank
Loans and advances
61272671.45
94701925.98
1698020.24
5801603.50
97786024.15
289315442.38
4688411.65
9648055.36
Total 163474221.17 401437933.54
Ratio 1.59 1.98
Interpretation :-
As compared to previous year, current assets to
shareholders fund has been increased due to increase in current
assets.
0
0.5
1
1.5
2
2008-
2009
2009-
2010
Amount
Year

(e)OVERALL PROFITABILITY RATIO
(a) RETURN ON SHAREHOLDER = NET PROFIT AFTER TAX
INVESTMENT SHAREHOLDERS FUND
Interpretation :-
As compared to previous year, return on shareholders
investment has been decreased due to increased in the profits in
current year .
4
4.5
5
5.5
6
2008-
2009
Amount
Year
RETURN ON
SHAREHOLDER
INVESTMENT
YEAR2008-2009 YEAR 2009- 2010
Total 5.63 4.70

(b) TOTAL ASSETS TURNOVER RATIO =
COST OF GOODS SOLD
TOTAL ASSETS
TOTAL ASSETS
TURNOVER RATIO
YEAR 2008 -2009 YEAR 2009- 2010
COGS 205178419.35 439761101.50
TOTAL ASSETS
Fixed assets
Current assets
29238009.95
164842888.17
68130941.15
473867451.46
TOTAL 1.05 0.92
Interpretation :-
Total assets turnover ratio has been decline.
0.85
0.9
0.95
1
1.05
2008-
2009
2009-
2010
Amount
Year

(d) RETURN ON EQUITY CAPITAL = NET PROFIT-PREFERENCE
EQUITY SHARE CAPITAL
RETURN ON
EQUITY CAPITAL
YEAR 2008-2009 YEAR 2009-2010
Equity share capital 18338776.26 23941355.35
Ratio 0.31 0.39
Interpretation :-
As compared to previous year, current assets to
shareholders fund has been increased due to increase in current
assets.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
2008-
2009
2009-
2010
Amount
Year

(d)RETURN ON GROSS CAPITAL EMPLOYED =
NET PROFIT AFTER TAX
GROSS CAPITAL EMPLOYED
RETURN ON GROSS
CAPITAL EMPLOYED
YEAR 2008-2009 YEAR 2009-2010
NET PROFIT AFTER
TAX
5782106.35 9536298.09
GROSS CAPITAL
EMPLOYED
Inventories
Sundry debtors
Cash and bank
Loans & advances
61272671.45
94701925.98
1698020.24
5801603.50
97786024.15
289315442.38
4688411.65
9648055.36
Total 163474221.17 401437933.54
Ratio 3.53 2.37
Interpretation :-
As compared to previous year, return on gross capital
employed has been decreased.
0
1
2
3
4
2008-
2009
2009-
2010
Amount
Year

(e)RETURN ON NET CAPITAL EMPLOYED =
NET PROFIT
NET PROFIT EMPLOYED
Interpretation :-
As compared to previous year, net capital employed
has been decreased.
5.25
5.26
5.27
5.28
5.29
5.3
5.31
2008-
2009
2009-
2010
Amount
Year
RETURN ON NET
CAPITAL EMPLOYED
YEAR2008-2009 YEAR2009-2010
NET PROFIT AFTER
TAX
5782106.35 9536298.09
NET CAPITAL
EMPLOYED
Inventories
Sundry debtors
Cash and bank
Loans and advances
Less:- Current liabilities
61272671.45
94701925.98
1698020,24
5801603.50
54594268.02
97786024.15
289315442.38
4688411.65
9648055.06
220788892.57
Total 108879953.15 180649040.97
Total 5.31 5.27

FINDING OF THE STUDY
 From the study we find out that the sundry debtors has been
increased by 34.14% in 2010 from 2009.
 The working capital has also increased 17.088% as compared
to last year.
 We have also study that the current assets has been also
increased 27.98% in 2010 from the last year 2009.
 The current liabilities has been decreased in the current year so
the company have need to maintain reserve and surplus and
invest them.
 Gross profit is increased by 207.55 lakhs.
 The fixed assets have been increased by 388.12 lakhs while
long term liabilities to outsiders have relatively 3353.26 lakhs.
This fact depicts that the policy of the company is to purchase
fixed assets from long term sources of finance thereby not
affecting the working capital.
 The cost of goods sold has increased nearly by 2345.15 lakh
from the last year 2009.
 Net profits after tax of the company have decline by 0.07%.
 The sales has increased in absolute figures in 2010 as
compared to 2009.

SUGESSTIONS OF THE STUDY
The following suggestions are made on the basis of above
study:
a) As the company does not have enough cash & bank balance
to meet its current liabilities so company is required to
increase its cash.
b) The company should capitalize its reserves and surplus.
c) The company should improve overall profitability.
d) The company should raise additional funds through debt
because interest on debt is a tax deductible expense.
e) The company should use short term funds for meeting
fluctuations in working capital.

LIMITATIONS OF THE STUDY
A. This study is based on annual reports of the company
B. This study is very time consuming.
C. Ratios may not prove to be the ideal tool for inter-firm
companies.
D. The two firms may adopt different accounting policies. So the
results may not be comparable.
E. Ratios are depends upon the original data base. If the original
data base is not correct then the ratios will be misleading.
F. Ratios are based on the past data. They can’t reliable guide to
future performance, as future is dependent on various aspects
of business.

FROM THE STUDY CONCLUDE SOME POINTS WHICH ARE
DESCRIBED AS FOLLOWS:
 The current assets consist of debtors,stock,marketable
securities and loans and advances. Current assets and current
liabilities are more than 2009. the current ratio is increased by
the previous year but it is satisfactory. Absolute liquid ratio is
less than previous year we can say that liquidity position need
to be improved and cash must be properly managed.
 The equity ratio of the company is less than the previous year
so long term solvency position is poor.
 The company’s reserve and surplus are more than the previous
year and its share capital is same.
 The net working capital of the company is increasing.

1.Management Accounting and Business Finance ( 2007)
-Gupta Shashi K.
-R.K Sharma
2.Financial Management
- Shashi K. Gupta
- R.K sharma
-Neeti Gupta
3. Management Accounting and Business Finance ( 2010 )
-Gupta Shashi K.
-R.K Sharma
4.Internet Site –www. r.s fasteners.com
5. Annual Report of R.S Fasteners ( 2009 )
6.Annual Report of R.S Fasteners ( 2010 )

ANNEXURE
TRADING ACCOUNT AS ON 31ST
MARCH2010 OF
R.S FASTENERS
Particular Amount
(Rs.)
Particular Amount(rs.)
To opening
stock
61272671.45
By sale central RD. 60327730.42
To purchases
raw material
52420694.25 By sale Punjab RD. 341154834.00
To purchases
goods
321070740.00 =401482564.42
To wages
598970.00
By closing stock
(valued at cost)
97786024.15
To packing
expenses
677154.00
To dies and
tools 1630888.00
To consumables
stores
6300354.00
To electricity
charges
941613.00
To oil and
lubricants
1288245.75
To job work 776110.40
446977440.
85
To gross profit
(13.02%)
52291147.7
2
Grand total 499268588.
57
499268588.5
7

PROFIT & LOSS ACCOUNT AS ON 31ST
MARCH 2010 0F R.S
FASTENERS
PARTICULAR AMOUNT(R
s.)
PARTICU
LAR
AMOUNT
(Rs.)
To AMC charges 24697.00 By gross
profit
52291147.72
To Audit charges 110000.00 By generator
rent
96000.00
To Bank Charges 298386.73 By interest
income
215341.77
To Bonus 216189.00
To Building Repair 274803.68
To Calibration on
Expenses
3300.00
To Car Expenses 332617.00
To Computer
Expenses
22603.00
To Depreciation 11339320.80
To Dies & Tools Repair 247508.50
To Diwali Expenses 48780.00
To Donation & Charity 27100.00

To E.P.F 81506.00
To E.S.I 28457.00
To Electric Repair 96684.00
To Excise Duty
Revised
44141.00
To Electric Load ext.
Charges
327500.00
To Fees &
Membership
2000.00
To Fire & Penalty 1400.00
To Freight,Cartage &
Octori
2422262.91
To Generator
Expenses
262464.00
To Insurance 115034.00
To Interest on Car
Loan
42684.00
To Interest on late
deposit
8276.00
To Interest on Bank 17117290.60
To Interest on Capital 1845451.00
To Interest on
Unsecured loan
1796694.00
To I.S.O Expenses 38000.00
To Labour & Staff
Welfare
85370.00
To Lease & Rent 120000.00

To L.W.W 51235.00
To labour charges 5203.00
To legal charges 18000.00
To machinery repair 836992.00
To miscellaneous
expenses
42510.48
To office electricity
expenses
16617.00
To postage & courier 26628.85
To printing &stationary 89351.00
To processing fees 751087.00
To professional
charges
272500.00
To rebate & discount 1020722.27
To rent,rate&taxes 25585.00
To salary &wages 493100.00
To salary to partners 1500000.00
To scooter expenses 27845.00
To service tax 3573.00
To telephone
expenses
58351.49

To segration
charges
887.09
To testing
charges
803.00
To traveling
charges(foreign)
295130.00
=43066191.40
To net profit
TRF. To capital
a/c
9536298.09
Total 52602489.49 Total 52602489.49

BALANCE SHEET AS ON 31ST
MARCH 2010 OF R.S FASTENERS
LIABILITIES AMOUNT ( RS.) ASSESTS AMOUNT
(RS.)
Partners capital
account
23941355.35 Fixed assets 68130941.15
Secured loan 178780072.52
Unsecured loan 50357131.02 Current assets
loan & advances
405736510.31
Current liabilitities 220788892.57
Total =473867451.46 =473867451.46

TRADING ACCOUNT AS ON 31ST
MARCH 2009 0F
R.S.FASTENERS
PARTICULAR AMOUNT
(RS.)
PARTICULAR AMOUNT(RS.)
To opening stock 20706600.00 By sale capital
central RD.
41744056.52
To purchases
raw material
239661479.00 By sale punjab
RD.
195018484.00
To wages 624848.00 By sale punjab
export
0.00
To packing
expenses
491149.00 By sale trading
goods
0.00
To dies and tools 1629587.00 236762542.52
To consumables
stores
1199988.00 By closing stock 61272671.45
To electricity
charges
805648.00
To oil and
lubricants
707398.40
To job work 624393.00
To gross profit
(13.34%)
31584123.17
Total 298035213.97 298035213.97

PROFIT & LOSS ACCOUNT AS ON 31ST
MARCH 2009 OF
R.S FASTENERS
Particular Amount
(Rs.)
Particular Amount (Rs.)
To AMC
charges
29503 BY gross profit 31584123.17
To advance 5000 By generator rent 80000
To audit fees 65000
To bank charges 878393.33
To bonus 188504.00
To calibration
expenses
300
To car expenses 202059
To computer
expenses
5091100
To dies & tool
repair
73104
To depreciation 5680211.86
To diwali
expenses
43490
To donation 21200
To E.P.F 128287
To E.S.I 44774
To electric repair 73649
To fees nd
membership
1828
To freight and
cartage
1978243
To generator
expenses
96300

To insurance 133921
To interest on car
loan
58559
To interest on late
deposit
249
To interest on bank 9303379
To interest on capital 1518097
To interest on
unsecured loan
866272
To I.S.O expenses 147935
To labour and staff
welfare
76045
To lease and rent 70000
To L.W.W 40619
To legal charges 33100
To machinery
expenses
782575.25
To miscellaneous
expenses
119828.46
To postage 33249.28
To printing and
stationary
47451
To processing fees 280826
To rebate & discount 240000
To rent,rate & taxes
43223
To salary & wages 317674
To salary to partners 1500000
To scooter
expenses
18470

To telephone
expenses
51305
To traveling
expenses
358169
=25601704.18
To net profit 6062418.99
Total =31664123.17 =31664123.17

BALANCE SHEET AS ON 31ST
MARCH 2009 OF R.S FASTENERS
LIABILITIES AMOUNT
( RS.)
ASSETS AMOUNT
( RS.)
Partners capital
acconut
18338776.26 Fixed assets 29238009.95
Secured loan 84326442.82
Unsecured loan 36821411.02 Current assets,
loans and
advances
164842888.17
Current
liabilitities
54594268.02
Total 194080898.12 194080898.12

RATIO ANALYSIS OF R.S FASTENERS

RATIO ANALYSIS OF R.S FASTENERS

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RATIO ANALYSIS OF R.S FASTENERS