1

CHAPTER I
1.1 INTRODUCTION
Financial statement:
A financial statement is an organized collection of data according to logical and
consistent accounting procedures. Its purpose is to convey an understanding of some financial
aspects of a business firm. It may show a position at a moment of time as in the case of a
balance sheet, or may reveal a series of activities over a given period of time, as in the case of
an income statement.
Thus, the term financial statement generally refers to the basis statements;
The income statement
The balance sheet
A statement of retained earnings
A statement of charge in financial position in addition to the above two statement
Financial statement analysis:
It is the process of identifying the financial strength and weakness of a firm from the
available accounting data and financial statement. The analysis is done by properly
establishing the relationship between the items of balance sheet and profit and loss account
the first task of financial analyst is to determine the information relevant to the decision under
consideration from the total information contained in the financial statement.
The second step is to arrange information in a way to highlight significant
relationship. The final step is interpretation and drawing of inferences and conclusion. Thus
financial analysis is the process of selection relating and evaluation of the accounting
datainformation.
!
This studying cntain !ll"ing analysis:
"omparative analysis statement
"ommon#size analysis statement
$atio analysis
Trend analysis
i# Cm$a%ati&e !inancial statement:
"omparative financial statement is those statements which have been designed in a
way so as to provide time perspective to the consideration of various elements of financial
position embodied in such statements. In these statements, figures for two or more periods are
placed side by side to facilitate comparison. %ut the income statement and balance sheet can
be prepared in the form of comparative financial statement.
ii# Cm$a%ati&e incme statement:
The income statement discloses net profit or net loss on account of operations.
A comparative income statement will show the absolute figures for two or more periods. The
absolute change from one period to another and if desired.The change in terms of
percentages. &ince, the figures for two or more periods are shown side by side; the reader can
'uickly ascertain whether sales have increased or decreased, whether cost of sales has
increased or decreased etc.
iii# Cm$a%ati&e 'alance sheet:
"omparative balance sheet as on two or more different dates can be used for
comparing assets and liabilities and finding out any increase or decrease in those items. Thus,
while in a single balance sheet the emphasis is on present position, it is on change in the
comparative balance sheet. &uch a balance sheet is very useful in studying the trends in an
enterprise.
(
i&# Cmmn(si)e !inancial statement:
"ommon#size financial statement are those in which figures reported are
converted into percentages to some common base in the income statement the sales figure is
assumed to be 1)) and all figures are e*pressed as a percentage of sales. &imilarly, in the
balance sheet, the total of assets or liabilities is taken as 1)) and all the figures are e*pressed
as a percentage of this total.
&# Rati analysis:
$atio analysis is a widely used tool of financial analysis. The term ratio in it
refers to the relationship e*pressed in mathematical terms between two individual figures or
group of figures connected with each other in some logical manner and are selected from
financial statements of the concern. The ratio analysis is based on the fact that a single
accounting figure by itself may not communicate any meaningful information but when
e*pressed as a relative to some other figure, it may definitely provide some significant
information the relationship between two or more accounting figuregroups is called a
financial ratio helps to e*press the relationship between two accounting figures in such a way
that users can draw conclusions about the performance, strengths and weakness of a firm.
Classi!icatin ! %atis:
+i'uidity ratio
+everage ratios
Activity ratios
,rofitability ratios
-
CHAPTER II
*.1 O+,ECTI-E. OF THE .TUD/
To study the financial position of the company
To analysis the financial stability and overall performance of the gems agro e*ports
.p/ ltd in general.
To analyze and interpret the trends revealed by several of the company in particular.
To analyze the profitability and solvency position of the unit with the e*isting tools of
financial analysis.
To study the changes in the assets, liabilities structure if the company during the
period of study
0
*.* 0I1ITATION OF THE .TUD/
The analysis and interpretation are based on secondary data contained in the published
balance sheet of the gems agro e*ports .p/ ltd for the study period.
1ue to the limited time available at the disposable of the research the study has been
confined for a period of 0 years .!))2#!)11/.
$atio itself will not completely show the company3s good or bad financial position.
Inert firm comparison was possible due to the non#availability of competitor3s data.
2
*.2 .COPE OF THE .TUD/
%y 45I6A6"7A+ ,8$59$:A6"8 A6A+;&I& 95 T<8 =8:& A=$9
8>,9$T& .,/ +T1? @e would be able to get a fair picture of the position of The
=ems Agro 8*ports .,/ +td.
The present study analysis the different aspects of profit and loss account and balance
sheet of the company.
This will result in the interpretation profitability, li'uidity, short term and long term
position. The study also cores the analysis of sales growth.
A
CHAPTER III
2 RE.EARCH 1ETHODO0O3/
2.1 Resea%ch design:
The descriptive form of research method is adopted for study.
The maBor purpose of descriptive research is description of state of affairs of the
institution as it e*ists at present. The nature and characteristics of the financial statements of
The =ems Agro 8*ports .,/ +td have been described in this study.
2.* Natu%e ! data:
The data re'uired for the study has been collected from secondary source .The relevant
information were taken from annual reports, Bournals and internet.
2.2 1ethds ! data cllectin:
This study is based on the annual report of The =ems Agro 8*ports .,/ +td. <ence the
information related to, profitability, short term and long term solvency and turnover were
very much re'uired for attaining the obBectives of the present study.
2.4 A%ea ! the study:
A study on 45I6A6"IA+ ,8$59$:A6"8 A61 A6A+;&I& 95 T<8 =8:&
A=$9 8>,9$T& .,/ +T1? period on !))2#!)11
C
2.5 Tls a$$lied:
To have a meaningful analysis and interpretation of various data collected, the following
tools were made for this study.
$atio analysis
"ommon#size statement
"omparative statement
Trend analysis
D
RE.EARCH 1ETHODO0O3/
$esearch methodology is a way to systematically solve the research problem. It may
be understood as a science of studying how research is done scientifically. &o, the research
methodology not only talks about the research methods but also considerable the logic behind
the methods used in the conte*t of the research of the research study.
RE.EARCH DE.I3N
1escriptive research is used this study because it will ensure the minimization of bias
and ma*imization of reliability of data collected. The researcher had to use fact and
information already available through financial statements of earlier years and analysis these
to make critical evaluation of the available material.
DATA
The re'uired data for the study are basically secondary in nature and the data are
collected from the audited reports of the company. 5rom the year !))2#!))A to !)1)#!)11.
1ETHOD. OF DATA ANA0/.I.
The data collected were edited, classified and tabulated for analysis. The analytical tools
in the study areE
"omparative statements
"ommon size statements
Trend percentage
$atio analysis
1)
ANA0/.I. AND INTERPRETATION
5inancial statement is an organized collection of data according to logical and consistent
accounting procedure. It purposes is to convey an understanding of some financial aspects of
a business firm. It may show a position at a movement of time as in time, as in case of a
balance sheet, or may reveal a serous of activities over a given period of time, as in the case
of an income statement. Thus the term 4financial statement? generally refers to the statementE
The income statements
The balance sheet
ANA0/.I. AND INTERPRETATION OF FINANCIA0 .TATE1ENT:
The financial statements are indicators of the significant factors
,rofitability and
5inancial soundness
Analysis and interpretation of financial statement therefore, refers to such a treatment of
the information contained in the income statement and balance sheet so as to afford full
diagnosis of the profitability and financial soundness of the business.
Classi!icatin ! %atis:
+i'uidity ratios
Activity ratios
11
,rofitability ratios
These ratios portray the capacity of the business unit to meet its short term obligation from
its short#term resources .e.g./ current ratio, 'uick ratio.
I# Cu%%ent %ati:
"urrent ratio may be defined as the relationship between current assets and current liabilities
it is the most common ratio for measuring li'uidity. It is calculated by dividing current assets
and current liabilities. "urrent assets are those, the amount of which can be realized with in a
period of one year. "urrent liabilities are those amounts which are payable with in a period of
one year.
Cu%%ent assets
Cu%%ent assets 6 (((((((((((((((((((((((((
Cu%%ent lia'ilities
TA+0E NO 1
CURRENT RATIO
;ear "urrent asset "urrent liabilities $atio
!))2#!))A 1(.)AAA 1).!C10 1.!A
!))A#!))C 1A.!CD) 11.2!C) 1.-C
!))C#!))D !-.-!)1 1(.!C(! 1.C(
!))D#!)1) !-.0)-) 1D.C1)) 1.!(
!)1)#!)11 (C.C2() !).((D) 1.D1
1!
Inte%$%etatin and Analysis:
The normal current ratio is !E1 the above tables show current ratio is not more than
!F in the all five years. &o, lower than the normal firms.
CHART NO 1
CURRENT RATIO
1(
II# 0I7UID RATIO:
The term Gli'uidity3 refers to the ability of a firm to pay its short#term
obligation as and when they become due. The term 'uick assets or li'uid assets refers current
assets which can be converted into cash immediately it comprises all current assets e*cept
stock and prepaid e*penses it is determined by dividing 'uick assets by 'uick liabilities.
0i8uid assets
0i8uid %ati 6 (((((((((((((((((((((((((
0i8uid lia'ilities
TA+0E NO *
0I7UID RATIO
Inte%$%etatin and Analysis
;ear +i'uid assets +i'uid liabilities $atio
!))2#!))A !.D(AA 1).!C10 ).!C
!))A#!))C 2.ACD) 11.2!C) ).0C
!))C#!))D D.1(1) 1(.!C(! ).2C
!))D#!)1) 10.00C) 1D.C1)) ).AC
!)1)#!)11 12.0C-! 1C.20!1 ).D-
1-
The li'uidity is being in increase mode. This is positive sign but the firm has not
reached the industrial standard. <ence it should have to concentrate on the working capital
management.
CHART NO *
0I7UID RATIO
10
III# .TOC9 TURNO-ER RATIO:
This ratio indicates whether investment is inventory is efficiently used or not it e*plains
whether investment in inventories in with in proper limits or not. It also measures the
effectiveness of the firms3 sales efforts the ratio is calculated as follows.
Cst ! gds sld
.tc: tu%n&e% %ati 6 (((((((((((((((((((((((((((((
A&e%age stc:
O$ening .tc: ; Clsing .tc:
A&e%age stc: 6 (((((((((((((((((((((((((((((((((((((((((
*
TA+0E NO 2
.TOC9 TURNO-ER RATIO
Inte%$%etatin and Analysis:
;ear "ost of goods sold Average stock $atio
!))2#!))A D(.-1(0 C.DD10 1).(C
!))A#!))C 1)1.0(C) D.!22) 1).D0
!))C#!))D D2.2)2) 11.D))- C.11
!))D#!)1) 1!1.!)() 1).D1!) 11.1)
!)1)#!)11 121.()1) 1!.C10) 1!.0C
12
The above table and diagram shows the relationship between costs of goods
sold and average stock. 1uring the year !)1)#!)11 it is 1!.0CF which shows higher position
of cost of goods sold. In the years of study it is shown above that the cost of goods sold are
almost C#1( times of the average stock.
CHART NO 2
.TOC9 TURNO-ER RATIO
1A
I-# FI<ED A..ET. TURNO-ER RATIO:
The ratio indicates the e*tent to which the investments in fi*ed assets contribute towards
sales. If compared with a previous year. It indicates whether the investment in fi*ed assets
has been Budos or not the ratio is calculated as follows.
Net sales
Fi=ed assets tu%n&e% %ati 6 (((((((((((((((((((
Fi=ed assets
TA+0E N> 4
.TOC9 TURNO-ER RATIO
Inte%$%etatin and Analysis:
As the ratio in first two years is between !(H!0, it shows the firm has effectively utilized its
assets. %ut it further year it is between DH1(, it shows a down ward trend. The firm can still
Improve use of fi*ed assets effectively.
;ear 6et sales 5i*ed assets $atio
!))2#!))A 1)-.CC)0 -.0!0C !(.1A
!))A#!))C 11-.()C) -.A1C) !-.!!
!))C#!))D 112.C!-) 11.C!!C D.CC
!))D#!)1) 1(D.A!D) 1-.(1C) D.A0
!)1)#!)11 1CA.1D)) 1-.0)1) 1!.D)
1C
CHART N> 4
.TOC9 TURNO-ER RATIO
1D
-# ?OR9IN3 CAPITA0 TURNO-ER RATIO:
@orking capital turnover ratio indicates the velocity of the utilization of net working
capital. This ratio indicates the number of times the working capital is turned over in the
course of a year. It is a good measure over Itrading and under#trading.
Net sales
?%:ing ca$ital tu%n&e% %ati 6 ((((((((((((((((((((((((((((
Net "%:ing ca$ital
TA+0E N> 5
?OR9IN3 CAPITA0 TURNO-ER RATIO
Inte%$%etatin and Analysis:
The above table and diagram shows the relationship between net working capital and
net sales. 7sually the high working capital ratio shows the efficient. %ut usually high working
capital ratio is not very good. &o the firm try to reduce the ration the decision taken is good.
;ear 6et sales 6et working capital $atio
!))2#!))A 1)-.CC)0 !.AD2! (A.0)
!))A#!))C 11-.()C) 0.221) !).1D
!))C#!))D 112.C!-) 11.1(2D 1).-C
!))D#!)1) 1(D.A!D) -.2DC) !D.A-
!)1)#!)11 1CA.1D)) 1C.0!-) 1).1)
!)
CHART NO 5
?OR9IN3 CAPITA0 TURNO-ER RATIO
!1
-I# TOTA0 A..ET. TURNO-ER RATIO:
This ratio is an indicator of how the resources of the organization utilized for
increasing the turnover. It shows the ratio between the total assets and the net sales of the
company. 5rom this ratio one can understand how the assets are performing and being
utilized in achieving the obBectives of the company.
Ttal assets
Ttal assets tu%n&e% %ati 6 (((((((((((((((((((
Net assets
TA+0E NO @
TOTA0 A..ET. TURNO-ER RATIO:
Inte%$%etatin and Analysis:
The above table and diagram shows the relationship between the total assets to net
sales. 1uring all the study period years the relationship between sales to total assets is high.
;ear Total assets 6et sales $atio
!))2#!))A 1A.2)(0 1)-.CC)0 1.))
!))A#!))C !!.))A) 11-.()C) ).1D
!))C#!))D (2.!-!D 112.C!-) ).(1
!))D#!)1) (C.C!2) 1(D.A!D) ).!C
!)1)#!)11 0(.(2-) 1CA.1D)) ).!D
!!
CHART NO @
TOTA0 A..ET. TURNO-ER RATIO
!(
-II# RETURN ON TOTA0 A..ET.:
,rofitability can be measured in terms of relationship between net profit and total
assets. It measures the profitability of investment. The overall profitability can be known by
applying this ratio.
Net $%!it
Retu%n n ttal assets 6 ((((((((((((((((((((((((((((( =1>>
Ttal assets
TA+0E NO A
RETURN ON TOTA0 A..ET. RATIO
;ear 6et profit Total assets $atio
!))2#!))A 1.A!0A 1A.2)(0 D.C)
!))A#!))C 1.D!C) !!.))A) C.A2
!))C#!))D C.00)) (2.!-!D !(.0D
!))D#!)1) 2.)10) (C.C!2) 10.-D
!)1)#!)11 D.-AD) 0(.(2-) 1A.A2
Inte%$%etatin and Analysis:
The above table and diagram shows the relationship between net profit and
total assets in percentage. As the total assets were decrease year by year the net profit
percentage was increasing.
!-
CHART NO A
RETURN ON TOTA0 A..ET. RATIO
!0
-III# .tc: tu%n&e% %ati:
The ratio indicates whether investment in inventory is efficiency used or not.
It is therefore e*plained whether investment in inventories is within proper limits or not. This
ratio is calculated as follows.
Cst ! gds sld
.tc: tu%n&e% %ati 6 ((((((((((((((((((((((((((((((((((((((((((((((((
A&e%age stc:
TA+0E .HO?. B
.TOC9 TURNO-ER RATIO
;ear "ost of goods sold Average stock &tock turnover ratio
.in times/
!))2#!))A D(.-1(0 C.DD10 1).(C
!))A#!))C 1)1.0(C) D.!22) 1).D0
!))C#!))D D2.2)2) 11.D))- C.11
!))D#!)1) 1!1.!)() 1).D1!) 11.1)
!)1)#!)11 121.()1) 1!.C10) 1!.0C
Inte%$%etatin and Analysis:
The firm3s stock turnover ratio is in increase mode e*cept in !))2#!))A. This show
there is an efficient management of inventory.
!2
CHART NO B
.TOC9 TURNO-ER RATIO
!A
I<# Retu%n n in&estment:
It is also called as 4return on capital employed?. It indicates the percentage of return
on the capital employed in the business.
CNet $%!it ; inte%est#
Retu%n n in&estment 6 ((((((((((((((((((((((((((((((((((((((((((((((((
Ca$ital em$lyed
TA+0E NO D
RETURN ON IN-E.T1ENT
;ear 6et profit "apital employed $atio .in F/
!))2#!))A 1.A!0A A.(!!) !(.02
!))A#!))C 1.D!C) 1).(AD) 1C.0A
!))C#!))D C.00)) !!.D0DA (A.!(
!))D#!)1) 2.)01) 1D.)12) (1.C!
!)1)#!)11 D.-AD) ((.)!0) !C.A)
Inte%$%etatin and Analysis:
It is found that around !0F will the return on the investment on other similar
industries.
The firm has earning more than the industry standard. This is good.
CHART NO D
!C
RETURN ON IN-E.T1ENT
<# 3%ss $%!it %ati:
!D
The ratio shows the profits relative to sales after the direct production costs are
deduced. It may be used as an indicator of the efficiency of the production operation and
relation between production costs and selling price.
3%ss $%!it
3%ss $%!it 6 (((((((((((((((((((((((((((((((((((((((((((((( E 1>>
Net sales
TA+0E NO 1>
3RO.. PROFIT RATIO
year =ross profit 6et sales $atio .in F/
!))2#!))A 11.-2A) 1)-.CC)0 1).D(
!))A#!))C 1!.AA)) 11-.()C) 11.1A
!))C#!))D !).!1C) 112.C!-) 1A.()
!))D#!)1) 1C.0!2) 1(D.A!D) 1(.!0
!)1)#!)11 !0.CCD) 1CA.1D)) 1(.C(
Inte%$%etatin and Analysis:
In first two year the firm kept its gross profit percentage very low which was the
reason for loss. &o they increased the gross profit percentage to make the firm to run in profit
trend.
CHART N> 1>
3RO.. PROFIT RATIO
()
<I# Net $%!it %ati:
The ratio indicates the net margin on a sale of $s.1)). it is calculate as followsE
(1
Net $%!it
Net $%!it 6 (((((((((((((((((((((((((((((((((((((((((((((( E 1>>
Net sales
TA+0E NO 11
NET PROFIT RATIO
year 6et profit 6et sales $atio .in F/
!))2#!))A .).)---(/ 1)-.CC)0 .).)-!/
!))A#!))C .).1)!)/ 11-.()C) .).)CD/
!))C#!))D 2.0()) 112.C!-) 0.0C
!))D#!)1) !.)0)) 1(D.A!D) 1.-2
!)1)#!)11 (.D!0) 1CA.1D)) !.)D
Inte%$%etatin and Analysis:
1uring the year !))2#!))A and !))A#!))C, the company move towards the loss and
in !))C#!))D, there is sudden increase in net profit. This is due to the change in the policy.
They have raised the gross profit percentage. In !))D#!)1), !)1)#!)11 they had made more
advantage and selling e*penses. This automatically reduced the net profit.
CHART NO 11
NET PROFIT RATIO
(!
<II# In&ent%y %ati:
This ratio tells us how much stock is hold by the company with compare to the current
assets. The high ratio means that stocks are more and this will be the cause for the lock of
working capital. The formula for calculating the ratio is as follows.
((
In&ent%y
In&ent%y %ati 6 (((((((((((((((((((((((((((((((((((((((((((((( E 1>>
Cu%%ent assets
TA+0E NO 1*
IN-ENTOR/ RATIO
;ear Inventory "urrent assets $atio .in F/
!))2#!))A 1).1-)) 1(.)AAA AA.0(
!))A#!))C 1).0))) 1A.!CD) 2).A(
!))C#!))D 10.!D)) !-.!CD) 2!.21
!))D#!)1) C.D0)) !-.0)C) (2.01
!)1)#!)11 1D.2)-) (C.C2() 0).--
Inte%$%etatin and Analysis:
The ratio is in decrease mode. In the beginning year, the inventory occupies about
held is about 2)#C)F. The usual stock can be held is about 0)F in this type of business. In
!))C#!))D and !))D#!)1) it is normal condition.
CHART NO 1*
IN-ENTOR/ RATIO
(-
<III# O$e%atin %ati:
9perating ratio establishes the relationship between costs of goods sold other operating
e*penses on the one hand and the sales on the other. In other words, it measures the costs of
operations per rupee of sales.
(0
Cst ! gds sld ;$e%ating e=$enses
O$e%atin %ati 6 ((((((((((((((((((((((((((((((((((((((((((((((((((((((( E 1>>
.ales
Cst ! gds sld 6 .ales F g%ss $%!it
TA+0E NO 12
OPERATION RATIO
;ear "ost of goods
sold
9perating
e*penses
sales $atio .in F/
!))2#!))A D(.-1(0 1).)!() 1)-.CC)0 DC.2!
!))A#!))C 1)1.0(C) 11.D2A) 11-.()C) DD.!D
!))C#!))D D2.2)2) 1!.((!A 112.C!-) D(.!0
!))D#!)1) 1!1.!)() 10.A2-) 1(D.A!D) DC.)!
!)1)#!)11 !1.!A2) !1.!A2) 1CA.1D)) DA.0(
Inte%$%etatin and Analysis:
9nly !#(F of the sales are available for interest charge, income ta* payment,
depreciation and retention of profit as reserve. The company can still reduce the cost of
operating e*penses.
CHART NO 12
OPERATION RATIO
(2
<I-# Fi=ed assets %ati:
A variant to the ratio of fi*ed assets to net worth is the ratio of fi*ed assets to total
long term funds which is calculated asE
Fi=ed asset
(A
Fi=ed assets %ati 6 ((((((((((((((((((((((((((((((((((((((((((((((((((
0ng te%m !unds
The ratio indicates the e*tern to which the totals of fi*ed assets are financed by long
term funds the firm.
TA+0E NO 14
FI<ED A..ET. RATIO
;ear 5i*ed assets +ong term funds $atio .in F/
!))2#!))A -.0!0C A.(!!) ).21
!))A#!))C -.A1C) 1).(AD) ).-0
!))C#!))D 11.C!!C !!.D0DA ).01
!))D#!)1) 1-.(1C) 1D.)12) ).A0
!)1)#!)11 1-.0)1) ((.)!0) ).-(
Inte%$%etatin and Analysis:
6ormal ratio is ).0) the firm had maintained the same level. %ut due to repayment of
loan and purchase of further assets it, amounted to high F of increase in ratio. The firm has
obtained further loan to run the day#to#day activities and it came to normal position in !))D#
!)1).
CHART NO 14
FI<ED A..ET. RATIO
(C
TA+0E NO 15
C0A.IFICATION OF +A0ANCE .HEET OF THE 3E1. A3RO E<PORT. CP# 0TD
FRO1 *>>@(*>>A TO *>1>(*>11
(D
,A$TI"7+A$& !))A !))C !))D !)1) !)11
A&&8T&E
5i*ed assets
1eposits
&tick in trade
1ebtors
%ank
"ash
9ther current assets
-.0!0C
).!0-)
1).1-))
).0(A)
1.--))
).11A)
).0CDA
-.A1C)
).!02)
1).0)))
0.))))
).CD))
).)C0)
).00C)
11.C!!C
).!C))
10.!D))
A.!1(1
1.-0))
).)DC
).1)D)
1-.(1C)
).(!1)
C.D0))
1(.)01)
1.)-C)
).)DC)
1.)-))
1-.0)1)
).(!0)
1D.2)-)
1!.-C()
0.2DC)
).1)A)
).2-2)
Total assets 1A.2)(0 !!.))A) (2.!-!D (C.C!2) 0(.(2-)
+IA%I+ITI8&E
"apital
%ank loan
"reditors
9ther current
liabilities
&ubsidies
1.-01)
0.22))
C.20))
1.2(10
).!11)
1.02C)
C.2)))
D.C)))
1.C!C)
).!11)
A.-1C)
10.(())
1!.02))
).A!(!
).!11)
1).(D!)
C.002)
1C.((D)
1.-A1)
).!11)
1-.(-D)
1C.2)C)
1D.D!()
).-12)
).!11)
Total liabilities 1A.2)(0 !!.))A) (2.!-!D (C.C!2) 0(.(2-
TA+0E NO 1@
CO1PARATI-E .TATE1ENT ANA0/.I. OF CURRENT A..ET.
AND CURRENT 0IA+I0ITIE. FOR THE /EAR *>>@ G *>>A
-)
,A$TI"7+A$& As on march
(1
st
!))2
As on march
(1
st
!))A
J 9r I in $s Increase or
decrease in
F
A&&8T&
5i*ed assets
1eposits
&tick in trade
1ebtors
%ank
"ash
9ther current assets
-.(0(1
).!0()
D.-0)C
).(0AC
).!()2
).!(A2
).(CA0
-.0!0C
).!0-)
1).1-))
).0(A)
1.--))
).11A)
).0CDA
).1A!A
).))1
).2CD!
).1AD!
1.!)D-
#).1!)2
).!)!!
(.D2))
).(D))
A.!D))
0).)C))
0!-.-0))
#0).A0))
0!.1C))
T9TA+ 10.!A)- 1A.2)(0 !.(((1 0CA.2
+IA%I+ITI8&
"apital
%ank loan
"reditors
9ther current
liabilities
&ubsidies
1.C2-)
-.CC)!
2.0C)1
1.A(01
).!11)
1.-01)
0.22))
C.20))
1.2(10
).!11)
#).-1()
).AADC
!.)2DD
#).1)(2
)
#!!.10
10.DC
(1.-0
#0.DA
)
T9TA+ 10.!A)- 1A.2)(0 !.(((1 1D.(1
TA+0E NO 1A
CO1PARATI-E .TATE1ENT ANA0/.I. OF CURRENT A..ET.
AND CURRENT 0IA+I0ITIE. FOR THE /EAR *>>A G *>>B
,A$TI"7+A$& As on march
(1
st
!))A
As on march
(1
st
!))C
J 9r I in $s Increase or
decrease in
F
-1
A&&8T&
5i*ed assets
1eposits
&tick in trade
1ebtors
%ank
"ash
9ther current assets
-.0!0C
).!0-)
1).1-))
).0(A)
1.--))
).11A)
).0CDA
-.A1C)
).!02)
1).0)))
0.))))
).CD))
).)C0)
).00C)
).1DD!
).))!
).(2
-.-2(
#).00
#).)(!
#).)(1A
-.!-
).AC
(.00
C(1.)D
#(C.1D
#!A.(0
#0.(A
T9TA+ 1A.2)(0 !!.))A) -.-1)0 A2C.A0
+IA%I+ITI8&
"apital
%ank loan
"reditors
9ther current
+iabilities
&ubsidies
1.-01)
0.22))
C.20))
1.2(10
).!11)
1.02C)
C.2)))
D.C)))
1.C!C)
).!11)
).11A
!.D-
1.10
).1D20
)
C.)2
01.D-
1(.!D
1!.)-
)
T9TA+ 1A.2)(0 !!.))A) -.--(0 C0.((
TA+0E NO 1B
CO1PARATI-E .TATE1ENT ANA0/.I. OF CURRENT A..ET.
AND CURRENT 0IA+I0ITIE. FOR THE /EAR *>>B G *>>D.
,A$TI"7+A$& As on march
(1
st
!))C
As on march
(1
st
!))D
J 9r I in $s Increase or
decrease in
F
-!
A&&8T&
5i*ed assets
1eposits
&tick in trade
1ebtors
%ank
"ash
9ther current assets
-.A1C)
).!02)
1).0)))
0.))))
).CD))
).)C0)
).00C)
11.C!!C
).!C))
10.!D))
A.!1(1
1.-0))
).)DC
).1)D)
A.1)-C
).)!-
-.AD
!.!1(1
).02
#).))A
#-.--0
10).0C
D.(A0
-0.21
--.!2!
2!.D!
#D).C!
#C).-2
T9TA+ !!.))A) (2.!-!D 1).!(DD 1-1.-2A
+IA%I+ITI8&
"apital
%ank loan
"reditors
9ther current
+iabilities
&ubsidies
1.02C)
C.2)))
D.C)))
1.C!C)
).!11)
A.-1C)
10.(())
1!.02))
).A!(!
).!11)
0.C0
2.A(
!.A2
#1.1)-C
).)))A
(A(.)C
AC.!0
!C.12
#2).-(
).((
T9TA+ !!.))A) (2.!-!D 1-.!(02 -1D.(D
TA+0E NO 1D
CO1PARATI-E .TATE1ENT ANA0/.I. OF CURRENT A..ET.
AND CURRENT 0IA+I0ITIE. FOR THE /EAR *>>D G *>1>
,A$TI"7+A$& As on march
(1
st
!))D
As on march
(1
st
!)1)
J 9r I in $s Increase or
decrease in
-(
F
A&&8T&
5i*ed assets
1eposits
&tick in trade
1ebtors
%ank
"ash
9ther current assets
11.C!!C
).!C))
10.!D))
A.!1(1
1.-0))
).)DC
).1)D)
1-.(1C)
).(!1)
C.D0))
1(.)01)
1.)-C)
).)DC)
1.)-))
!.-D0!
).)-1
#2.(-
0.C(AD
#).-)!
).)!
).D(1
!1.1
1-.2-
#-1.-2
C).D(
#!A.A!
!0.2-
C0-.1!
T9TA+ (2.!-!D (C.C!2) !.0C(1 D!A.!0
+IA%I+ITI8&
"apital
%ank loan
"reditors
9ther current
+iabilities
&ubsidies
A.-1C)
10.(())
1!.02))
).A!(!
).!11)
1).(D!)
C.002)
1C.((D)
1.-A1)
).!11)
!.DA-
#2.AAA-
0.AAD
).A-AC
#).1-(A
-).)D
#-D.1C
-2.)1
1)(.-
#2A.CA
T9TA+ (2.!-!D (C.C!2) !.0ADA A!.-0
TA+0E .HO?. *>
CO1PARATI-E .TATE1ENT ANA0/.I. OF CURRENT A..ET.
AND CURRENT 0IA+I0ITIE. FOR THE /EAR *>1> G *>11
,A$TI"7+A$& As on march
(1
st
!)1)
As on march
(1
st
!)11
J 9r I in $s Increase or
decrease in
--
F
A&&8T&
5i*ed assets
1eposits
&tick in trade
1ebtors
%ank
"ash
9ther current assets
1-.(1C)
).(!1)
C.D0))
1(.)01)
1.)-C)
).)DC)
1.)-))
1-.0)1)
).(!0)
1D.2)-)
1!.-C()
0.2DC)
).1)A)
).2-2)
).1C(
).))-
1).20-
#).02C
-.20
).))D
#).(D-
1.!A
1.!-
11D.)(
-.(0
--(.A
D.1C
#(A.CC
T9TA+ (C.C!2) 0(.(2-) 1-.0(C 0-).CD
+IA%I+ITI8&
"apital
%ank loan
"reditors
9ther current
+iabilities
&ubsidies
1).(D!)
C.002)
1C.((D)
1.-A1)
).!11)
1-.(-D)
1C.2)C)
1D.D!()
).-12)
).!11)
(.D0A
1).)0!
1.0C-
#1.)00
)
(C.)A
11A.-C
C.2(
#A1.A1
)
T9TA+ (C.C!2) 0(.(2-) 1-.0(C D!.-A
TA+0E NO *1
C0A..IFICATION OF INCO1E .TATE1ENT OF THE 3E1. A3RO E<PORT.
CP# 0TDFRO1 *>>@(*>11
-0
,articular !))A !))C !))D !)1) !)11
&ales
8%I1T
+essE
depreciation
81IT
+essE interest
8%T
1)-.CC)0
!.22AA
).D-!)
1.A!0A
1.AA))
.).)--(/
11-.()C)
!.A-2)
).C1C)
1.D!C)
!.)())
.).1)!)/
112.C!-)
D.201C
1.1)1C
C.00))
!.)!))
2.0())
1(D.A!D)
A.C01)
1.C)))
2.)01)
-.))1)
!.)0))
1CA.1D))
11.--D)
1.DA))
D.-AD)
0.00-)
(.D!0)
Inte%$%etatin and Analysis:
Cm$a%ati&e 'alance sheet
1. Fi=ed assets:
-2
5i*ed assets are purchased for about $s.C crores during the year !))A#!))C.
!. De$sits:
1eposit has been increased from !!0 lakhs to !C lakhs. 1uring !))A#!))C further ! lakhs
have been deposited during the year !))C#!))D.
(. .tc: in t%ade:
1ue to sudden change in the F of gross profit in !))A#!))C, the firm suffered to sell
out the good. These held as closing stock but !)1)#!)11, the heavy holding of during stock
due to meet out the sales.
-. De't%s:
The closing debtors during the year !))2 are low because the firm usually raises the
cash from debtors in the !#( days. This is because the usual practice of firm in each sale
brought the year !))A#!))C the company allowed the debit date to customer between ()#-0
days.
0. +an: 'alance:
All the e*penses .which are considered as material/ are only through che'ue and so
the firm has to maintain the balance around 1 crores.
2. Cash 'alance:
The cash in till is first to meet out the immediate e*penses. .usually to 1) lakhs is
maintained in till/.
-A
A. Othe% cu%%ent assets:
It is Bust about A) lakhs which includes but advance, salary, T1&, employee gratuity
fund etc.
CAPITA0 AND 0IA+I0ITIE.:
Ca$ital:
As there is no profit in !))2#!))A, !))0#!))2 the capital is very low and in the
subse'uent year as the net profit occurred the net profit is added up with the capital.
0ia'ility:
+an: lan:
1uring the year !))A#!))C the sales obtained the loan $s.C crores which way have
been used for purchase of fi*ed assets.
C%edit%s:
It increases from the year. The firm has to take steps to control the increase. The
current T1& .contact/, $ate H ta*es, etc.
.u'sidies:
This is ac'uiring the wind mill, electricity etc.
TA+0E NO **
CO1PARATI-E INCO1E .TATE1ENT *>>@(*>>B
,articular !))2#!))A !))A#!))C !))C#!))D
-C
Absolute
changes
F in
changes
Absolute
changes
F in
changes
Absolute
changes
F in
changes
&ales
8%I1T
+essE
depreciation
8%IT
+essE
interest
8%T
D.)C(-
).10)1
).)2A
).)C(1
).!)!
#).11CD
D.-A
0.D2(
A.20
0.)0
1!.CC
10D.(C
D.-!A0
).)AC(
#).1!-
).!)!(
).!2
).)0AA
C.DC
!.D(
#1(.12
11.12
1-.2C
1().!-
!.012
2.D)0C
).!C0C
2.2!!
#).)1
2()1.D2
!.!
!01.-C
(-.2D
(-(.-2
#).-D
2()1.D2
TA+0E NO *2
CO1PARATI-E INCO1E .TATE1ENT *>>D(*>11
,articular !))D#!)1) !)1)#!)11
Absolute F in changes Absolute F in changes
-D
changes changes
&ales
8%I1T
+essE depreciation
8%IT
+essE interest
8%T
!!.D)0
#1.C))C
).2DC!
#!.-DD
).DC1
#-.-C
1D.2
#1C.20
2(.(2
#!D.!!
DC.)2
#2C.2
-A.-21
(.0DC
).1A
(.-!C
1.00(
1.CA0
((.D2
-0.C!
D.--
02.20
(C.C1
D1.-2
Inte%$%etatin and Analysis:
CO1PARATI-E INCO1E .TATE1ENT
A sale is increasing from year to year. 1ue to company3s popularity among the people
and nice fluctuation, the firm sales in last year had increased by -C crores.
0)
The earning before ta* and depreciation in !))2 H!))A was although positive it was
not enough to have the I1T. &o the firm had raised the gross profit F in order to earn
the profit after covering I1T.
As the firm availed further loan, it had to pay interest. They had been obtained to
increase the earning capacity so on interest was also the increasing trend.
1uring the year !))A there was suddenly increase in net profit. This was due to
sudden change in gross profit F.
The firm has mill which also contribute income to the firm indirectly agent from the
main business and there are also interest income.
The firm had planned to increase the sales by providing much service to the customer.
TA+0E NO *4
CO11ON .IHE +A0ANCE .HEET OF THE 3E1. A3RO E<PORT. CP#
0TDFRO1 *>>A(*>11
,articular !))A !))C !))D !)1) !)11
01
AssetsE
5i*ed assets
1eposits
&tock in trade
1ebtors
%ank
"ash
9ther current assets
!0.A)
1.--
0A.2)
(.)0
C.1C
).22
(.(A
!1.--
1.12
-A.A1
!!.A!
-.)-
).(D
!.0-
(!.2!
).AA
-!.1D
1D.D)
-.))
).!!
).()
(2.CC
).C(
!(.)0
((.21
!.A)
).!0
!.2C
!A.1A
).2)
(2.A-
!(.-)
1).2C
).!)
1.!1
Total assets 1)).)) 1)).)) 1)).)) 1)).)) 1)).))
+IA%I+ITI8&E
"apital
%ank loan
"reditors
9ther current liabilities
subsidies
C.!-
(!.10
-D.1-
D.!A
1.!)
A.1(
(D.)C
--.0(
C.()
).D2
!).-A
-!.()
(-.22
1.DD
).0C
!2.AA
!!.)-
-A.!(
(.AD
).1A
!2.D)
(-.CA
(A.((
).AA
).1(
Total liabilities 1)).)) 1)).)) 1)).)) 1)).)) 1)).))
Inte%$%etatin and Analysis:
CO11ON .IHE +A0ANCE .HEET
1uring the year !))A#!))C, !))C#!))D, the fi*ed assets occupied about (( to (2F of
the total assets and in the ne*t year. It was low in !))C#!))D. This was very good and
showed the further fund inflows as directed to walking capital management.
0!
&tock occupies in total assets are also reduced. This also showed the good position.
%ank balance shows occupied 1)F of total assets. This could be reducing to 0F of
total assets.
"apital to debit funds was very poor up to year ended !))C and !))D the capital
occupied more than debts. This indicated good position of capital.
+ast year position was very good when compared to the previous year.
TA+0E NO *5
TREND PERCENTA3E OF THE 3E1. A3RO E<PORT. CP# 0TDFRO1
C*>>A(*>11#
0(
,articular !))2#!))A !))A#!))C !))C#!))D !))D#!)1) !)1)#!)11
&ales
8%IT
5i*ed assets
"urrent assets
"urrent liabilities
@orking capital
"apital employed
Total assets
1))
1))
1))
1))
1))
1))
1))
1))
1)C.DD
111.A!
1)-.!-
1(!.!)
11(.)D
!)!.!-
1-1.A0
1!0.)1
111.(C
-D0.-0
!21.!(
1C2.A(
1!D.1D
(DC.!C
(1(.0A
!)0.CC
1((.!!
(0).2-
(12.(2
1CA.2A
1D!.2A
12C.)1
!0D.C1
!!).00
1AC.-A
0-D.!C
(!).-)
!DA.12
1DA.C!
22!.-A
-01.)(
()(.1-
INTERPRETATION AND ANA0/.I.:
TREND ANA0/.I.
0-
The sales are going on increasing trend. This is due to price fluctuation popularity etc.
The firm had downward trend in !)1) but recovered in !)11.
1ue to purchase during the studies have taken prices the trend in fi*ed also goes up.
1ue to loan borrowed and net profit earned the capital employed is also in growing
trend.
"urrent liability is growing slowing when arranged to current assets this shows good
trend.
CHAPTER I-
FINDIN3.
00
This study is carried out with the obBectives of analyzing the financial performance of
&alem the gems agro e*ports .p/ltd to e*amine and understand the role of financial in
the growth company.
1uring the study it is found that the sales are in increasing trend and it is due to price
fluctuation and good management of resources.
In !))2#!))A H !))A#!))C the company had incurred loss and in the subse'uent year
.in !))A#!))C, !))C#!))D, !))D#!)1)/ it had shown a good result by net profit
growth. This shows the good efficiency of the owners and management in formulating
the policies.
"ash at bank balance in last two years are very low when comparing to the previous
year this is due to the efficient utilization of cash for procurement of goods .stock/.
The stock in hand is going on decreasing because .after a study conducted by the
management/ they realize the fact that locking funds in huge stock and decide to
reduce the stock in hand.
The current ratio is not up to the standard prescribed by the management authors and
researchers .I.e. !E1/.
The li'uid ratio prescribed by the management authors and researchers is 1E1. This
also basis for bank to sanction loan for companies. The company does not satisfy it. It
may be a hindrance for company to get apply for loan.
The debtor3s collection period is between 10#() days the normal collection period is
()#-0 days. <ence debt collection good.
The creditor3s payment period is -)#2) days.
02
There is an aggressive net profit in the year ended !))A#!))C. This due to sudden
increase in gross profit.
9nly !#(F of sales are available as operating to cover depreciation, interest, ta*es,
share of profits. 9nly the incomes from other sources are helping to earn profits.
%ank balance is always over 1 core, so to meet out the creditors. All creditors are paid
only through bank .che'ue/ this is a good symptom of having control over finance.
The net profit available for covering interest is low through it is showing increasing
trend.
&tock turnover ratio is good when compared to the industrial standard and standard
prescribed by management researchers.
.U33E.TION
0A
The company has to concentrate on increasing the current ratio to the standard level
and above. This can be achieved by directing the funds in stock, debtors, or by
reducing the current liabilities .i.e. sundry creditors/.
+i'uidity ratio is very low when compare to standard prescribed. The company
already started to take the steps but it should be still faster the creditors will place
good faith on the company solving position. If company has taken the steps to
increase the ratio.it can be safe for the company and be eligible to get further loan.
The branch managers may be given more incentives if they achieve profit in their
branch.
They may also be awarded as best manager among all the branches .this should be
conducted once in a year/ so that they will work for the company.
The company may reduce the overall cost by small percentage. This practice may in
turn helpful to earn profit.
The company deals with many products. They maintain product wise accounts and the
product which earn less profit can be concentration more.
0C
CONC0U.ION
The study shows clearly about the financial performance of the firm for past five
years. As we know that finance is life blood of every business, financial interpretation
like this, will help the firm in making financial forecasting and planning for the future
in procuring finance and to have a good control over the assets, liabilities, e*penses,
wastages etc. and such interpretation also helps to reach the obBectives .vision and
mission/ of the firm in a good manner.
<ence with this study I suggest the 4T<8 =8:& A=$9 8>,9$T& .,/ +T1? to
make such interpretation every year.
0D