EXECUTIVE SUMMARY

The course of MBA is provided by Visvesvaraya Technological University consists of

prescribed syllabus which needs its students to choose an internship opportunity with top
entities or corporations for a term of approximately six weeks in fourth semester starting from
3.01.2019 till 16.02.2019. This project was prepared on “Study on financial aspects of URSS
(Upper Rajasthan Sales and Services) Techservices Pvt. Ltd.” helps to understand the market
which deals in selling and servicing of engine equipment and parts along with the oiling of the
engine parts which includes support from top management for enhancing customer relationship
with URSS TECHSERVICES PVT. LTD. All the project was carried out as per the terms and
conditions prescribed by the guidelines of VTU. The target respondents were the visitors of
URSS TECHSERVICES PVT. LTD., with an uncountable proportion for the study of
statement of financial analysis of the company. Tables & charts of the company were proposed
for translating responses into a vital & crucial database from those accumulated data with
understandable information along with other inferences and additional examination.
This report includes the profile of the company along with the information on the industry
profile and the future growth and the prospects of the economy in the financial sector,
company’s vision, mission and quality policy. The report also consists of the data interpretation
and the research conducted with respect to the research and findings of the whole organisation.

The project also reflects SWOT analysis of the company which refers to the strength and
weakness of the company as well as the opportunities and the threats in the external
environment. It also includes the financial analysis of the company that helps one define the
financial weakness and the strength of the company. This report has the following
organization’s financial statement that is the trading and profit/loss statement comparative
balance sheets and inflow outflow of cash liquidity. It also shows relationship between the
company’s financial assets and the various ratios. The ratios include all kinds of liquidity,
profitability, solvency and turnover based ratios.

Every research study consists of the financial aspects and performance capabilities of the
entity based on sales and services. At the end it also has the bibliography.

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 CHAPTER 1
INTRODUCTION

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 Chapter 1
Introduction

1.1 Introduction

An Internship means a work done in a company say for a period of 1 , 2, 3 or 6 months or even
for a full year and for that particular period the internee would be called the intern of the
company who will manage the affairs of the company either by spending time amongst the
other employees and helping them or observing each and every step according to set rules and
regulations and work ethics specified by the company. It is most likely for the students who
are pursuing their graduation or most frequently taken by those college going students to
contribute their leisure time in the working of the corporate world while building positive
attitude and building a constant and healthy relationship with other personnel. Overall this
training session provided to the students helps them in facing all kinds of corporate culture
along with dissimilar situation.

This applies to those enterprises to implement business solutions with certain attributes for
giving advantages for the entity as well as the employees. There are many kinds of roles and
responsibilities that an intern has to face during the internship period. Students gets a lot of
benefits and it also helps them for personal grooming and building self-confidence whenever
they join a corporation in the future.

There are so many cultural and theoretical aspects to study to understand a corporate situation
and those fields include science and technology commerce trade industry innovation media
tourism and all types of laws and permanent issues. After all the internship period the intern
has to submit their reports and the company would scan them and comes to know whether the
intern has understood something on his or her journey with the entity.

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1.2 Industry Profile

The first automobile was built in 1885 by Karl Benz which he installed first internal combustion
engine on a tricycle and was awarded by a patent by German government for the invention by
the end of 1908. Every single part was built in a factory which was hand made later on in 1908
ford motor company came up with an idea of mass production. This resulted in expansion of
the industry wherein various parts were now manufactured by various companies by this
expansion has result in till date by end of 2018 to have somewhere around 1500 companies
supplying various parts like Piston, Connecting Rod, ECU’s sensors and various motors to
biggest manufacturers to the smallest manufacturers. This industry has many phases which are
divided into various parts like engine manufactures, engine part manufacturers, brake
manufacturers, brake pads and brake calliper manufacturers.

This part supply industry for sensors and pumps is till date ruled by Bosch international they
manufacture various sensors like door sensors wiper sensors speed sensors fuel supply sensors
etc. they also do manufacture fuel pumps wiper blades wiper arms head lights break sensors
parking sensors etc in an average Bosch gets 190 to 120 patents a month.

Volkswagen Salzgitter is the top engine manufacturer for the Volkswagen group who
manufacture top of the line engines for Audi Bugatti Skoda, Porsche and other VW companies
currently Toyota motor company is the leading automobile part manufacturers who produces
ecus brakes transmissions engines and sensors for top manufacturers like Tesla, Toyota, Subaru
and some other local Japanese companies they also do produce diesel generators for electric
supply in buildings as well.

An automobile sector contains numerous varieties of organisations which does many

operations like production marketing sales development and design. This sector had generated
vast sales amongst the whole world. it’s worth is countless and are in terms of millions and
trillions in the whole world. It also inculcates all heavy weighted equipment cars SUV’s trucks
tractors parts oil and all kinds of lubricants for maintaining and smoothening the process of
vehicles which consists of 2 wheelers 3 wheelers and 4 wheelers and multi wheelers.

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There are many kinds of cars which are categorised into many different categories these are as
follows:

Passenger Cars

• Hindustan Motors, Calcutta

• Addison's
• Premier Automobiles,
• Standard Motor Products of India, Madras

Light Commercial and Utility Based Vehicles

• Mahindra & Mahindra, Bombay -

• Bajaj Tempo, Poona now Force Motors
• Standard Motor Products of India

Heavy and Medium Range Vehicles

• Heavy Vehicles factory, Chennai

• Tata Motors, Poona, then known as TELCO
• Ashok Motors, later Ashok Leyland, Madras
• Hindustan Motors
• Premier Automobiles
• Simpsons & Co, Madras

2 Wheelers Including Motorcycles and Scooters

In initial 1960’s Bajaj brand-based vehicle called the “Bajaj Chetak” had most sales revenue
in all continents. All types manufacturers of two wheelers received appropriate licenses along
with the commission based on tariffs were issued.

• Bajaj Auto, Poona

• Automobile Products of India, Bombay
• Mopeds India Limited, Tirupati
• Escorts Group, New Delhi
• Ideal Jawa, Mysore

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Top automobile companies

There are 5 top players currently in India those are as follows:

• Tata Motors

They are the top automobile manufacturing company of India and are currently counted as the
leading successful market player amongst all other competitors in India and overseas as well

• Hindustan Motors Limited

They are one of the car manufacturing company which has captured good market share in the
recent years through its low-priced cars it was founded by BM Birla in the year 1942.

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• Ashok Leyland

It was founded in the year 1948 by Hinduja group is group and is the 10th in the world for the
manufacturer of cars

• Maruti Suzuki India

It is still the biggest automobile company jointly manufactured by Maruti an Indian company
and Suzuki a Japanese company which holds 53 % stake in the Indian automobile market

• Bajaj Auto

Bajaj auto is a company formed by Jamnalal Bajaj a Rajasthan based businessman who
manufactures 2 wheelers and 3 wheelers all over the world

• Hyundai Motors

These are those motor companies who have successfully captured a decent market share in
India although it’s a south Korean company which originates from Seoul city

Recent trends and growth of financial sector

There is a lot of potential growth to be seen in the future with autonomous driving electric
vehicles and self-charging cars tyre less cars multi terrain cars (cars which can travel over water
as well as on land). In future we can expect flying cars as well. For this daily there is a research
going on various aspects some of the future cars are also seen testing on roads.

The automobile sector has been successful in achieving significant growth in the past years due
to increase in demand for household and building new infrastructure facilities. There were
many challenges and hurdles which were overcame in this sector with an increment in the
demographics that is people from different fields are managing to get their own personal
vehicle and maintain it during regular intervals with servicing and oiling.

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By the end of 2020 there are new and improved supercars awaited by the customers which have
never before seen facilities with enhanced and optimised safety feature with differentiation in
in its pricing range from diverse set of customers. People are expecting new designs and
features to travel anywhere in the world they want to explore. Increased competition had
brought a huge big change in the automobile sector each brand has to bring innovation in the
field who will attract more customers within certain time limit will survive in this competition.

1.3 Company Profile

URSS (Upper Rajasthan Sales & Services) Techservices Private Limited is a service dealership
company which deals in sales & servicing of engine parts like fuel pump, emission, air filter
etc of various company’s engines which includes Cummins limited for generators & engines
and Valvoline limited for industrial & engine oils across Rajasthan.

• It is a leading service organisation for marketing products and market support to reputed
multi-national corporations with respect to engineering products.
• It also includes service workshop managed for approximately 3000 customers in
Rajasthan.
• It has excellent business relations with nearly every manufacturing industrial unit of the
state, Cement plants, Textile units, Marble/Granite mining & processing industry, engineering
industry like MICO Hi-Tech gears, NBC and other bearing industrial units, Govt. departments
like PHED, Railways, GWD, Rajasthan State Mines & Minerals, Hindustan Copper, Hindustan
Zinc, ONGC, Suratgarh Thermal Power Station, UltraTech cement etc.
•

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1.3.1 Promoters

The promoters of URSS TECHSERVICES private limited are as follows:

Rajeev Singh Managing Director
Ajay Sharma Marketing Manager
OP Sharma Finance Manager
Neewani Gupta KSB Division Manager
MP Venugopalan Service Manager
Ajay Kumar Head Office Parts
Rajeev Singh 70
Sadhana Raghuvanshi 16
Archana Singh 3.8
Aditya Vikram 10.2

1.3.2 Vision, Mission & Quality Policy

Vision
URSS Techservices Pvt. Ltd. is known as a great organization for providing quality products
and Prompt, Reliable & Quality service at affordable price.

Mission
Its primary aim is to provide products and services to engineering companies for healthy and
smooth functioning of heavy weighed vehicles like tractors and trucks which carry lots of loads
onto it. It strongly believes that success will be achieved through a customer service philosophy
of understanding customer’s needs and responding with products and service solutions that
offer more value than our competition.

Quality Policy
They consider Quality to be the consistent satisfaction of Customer expectations.

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Business Philosophy:
URSS is a service organization and strongly believe that success will be achieved through a
customer service philosophy of understanding customer’s needs and responding with products
and service solutions that offer more value than our competition.

Milestones:
It was established in the year 1976 as a Cummins dealer.
In 1984, it became a dealer for KSB industrial Pumps.
In 1999, it set up Cummins Service Centre for overhauling Cummins engines above 500 KVA
to factory standards.
In 2000, it became Valvoline Cummins oil dealer.
In 2001, it became Chicago Pneumatic dealer.
In 2006, it set up TATA authorised service centre for complete range of commercial vehicles.

1.3.3 Products & Services Profile

It usually deals only in those companies which manufactures parts of the engines and servicing
of them. The products of URSS Techservices Pvt Ltd are as follows:

1. Cummins limited - Generators & engines

Cummins limited is a company which was founded by local mechanics William Glanton Irwin
and Clessie Cummins in the year 1919 at Columbus, Indiana which sells at a minimum of 190
region across the globe with diversified network above 600 corporations & distributors and
involves more than 6000 dealers for products that generates engines air handling and fuel
systems and semi-trucks.

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2. Chicago pneumatic limited - Air compressors
Chicago pneumatic limited is a company founded in the year 1894 at Chicago, Illunios by John
W. Duntley which is an industrial manufacturer of air compressor generators light towers and
other hydraulic equipment. It’s a global manufacturer company which provides wide
distribution across the world.

3. KSB Limited - Pumps & valves

KSB limited is one of the top lenders of valves, pumps with services headquartered at
Frankenthaler, Germany by Stephan Timmermann, Matthias Schmitz Ralf Kannefass &
Stephan Bross in the year 1871. The company KSB consists of manufacturing, marketing and
service facilities along with 16000 personnel and have per annum worth in crores.

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The Services of URSS Techservices Pvt Ltd are as follows:

1. TATA Authorised service stations

TATA motors are an automobile-based company headquartered Mumbai Maharashtra in the
year 1945 which is widely spread across India and have countless and unorganised service
stations through the nation and even the company is ranked amongst the top automotive
companies in the world.

2. Valvoline limited - Engine and industrial oils

Valvoline limited is a subsidiary company of Ashland incorporation which was founded in the
year 1986 at Lexington, Kentucky, United States which provides automotive service services
along with oil changes and anti-freezing changes across the globe.

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1.3.4 Areas of Operations

It operates across the whole state of Rajasthan through internet platform those cities are as
follows:
• Ganganagar
• Hanumangarh
• Churu
• Bikaner
• Dhaulpur
• Jaisalmer
• Jhunjhunu
• Jodhpur
• Bhilwara
• Barmer
• Pali
• Jalor
• Bundi
• Karauli
• Ajmer
• Jaipur
• Dausa
• Alwar
• Bharatpur
• Sawai madhopur

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 • Tonk
• Sirohi
• Udaipur
• Banswara
• Dingapur
• Kota
• Baran
• Jhalawar
• Chittorgarh

1.3.5 Infrastructure Facilities

URSS Techservices Pvt. Ltd is an organisation which is an authorised sale and services-based
dealer of CUMMINS Diesel Sales and Services Pvt Ltd Pune and it has 2 branch offices one
at jodhpur and Bhiwandi and it was established in the year 1976 with over 150 employees and
a gross turnover of Rs 30 crores. It is the first choice of customers who wants to buy engine
oils and stuffs undertaken with maintenance and repairs of diesel engines Stanford electrics
and control panels of DC sets. This company had a full-fledged service enter with an area of
10000 sq. ft. for repairing overhauling and testing diesel engine from 50 HP to 2500 HP. They
operating in Jaipur from 1995. And this facility is provided to all Cummins customers in
northern parts of India. A group of 15 highly motivated commercial staffs works in various
departments like parts and service and finance etc support the field as well as service centre
team. Adequate computerized inventory ensures timely availability of spared so as to have
minimum equipment downtime. Other facilities are as follows
• A strength of 32 field service engineers and 36 service mechanics supported by a
dedicated team of 22 commercial staff catering to over 6000 engines
• Offices at jodhpur Bhiwadi and services engine at Khetri, Alwar, Bikaner, Jaisalmer
and Sriganganagar.
• 5 Service staff and 3 Commercial staff At Jodhpur.
• 4 Service staff and 2 Commercial staff At Bhiwadi.
• 4 Service staff At Jaisalmer.
• To support this population and 500 KVA above population in North India. It is a joint
venture between URSS and Cummins.

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1.3.6 Competitors Information
There are not many competitors for UPPER RAJASTHAN SALES AND SERVICES
TECHSERVICES PRIVATE LIMITED as they are involved in dealing all engine oiling selling
and servicing of parts of the product and they are the dealers for VALVOLINE engine oils tata
services and CUMMINS for engine and KSB for air compressors or generators. Some of them
are as follows:
• Bajrang engine auto parts
• Volvo service and parts centre
• Kirloskar spare parts
• General motors
• Continental engines limited
• Force motors
• Ashok Leyland
• Bharat diesel
• Azad engine spare parts
• New Hadoti Diesel
• Triumph motors

1.4 SWOT Analysis

SWOT analysis help ascertaining all the strengths weaknesses opportunities and threats of a
specific company which in determining the position and helps conquering all the future goals
and adopt strategies for achievement of goal soon.

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WITH REFERENCE TO THE COMPANY

STRENGTH

• Dedicated and skilled empowered employees

• Dealer of reputed companies like CUMMINS, CP, TATA & KSB
• Employee friendly management
• Modern workshop facilities
• Huge customer base
• Expertise in strategic thinking and implementation

WEAKNESS

• System lacks like improper supply delivery services

• Limited financial resources
• Problems in management of inventories
• Lacking in regular oiling and servicing of engineering companies
• Rigid structure and payment collection

OPPORTUNITY

• Strong demand for engine products in future will help in expansion.

• Government contracts of railways will increase the demand for product
• Inventio of new technology will help them to improve the quality of engines.
• Opportunity to expand business abroad.

THREAT

• Entrance of private players in to the market

• Intervention of the government or local authority
• Ever increasing prices of raw materials

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1.5 Future Growth and Prospects

There is a lot of growth in this industry in the future considering all the financial analysis of
the organisation they contribute more to the gross domestic product of the country and as per
the current statistics and reports of this organisation it deals with the engine parts servicing
along with the oiling of the small engine components and their accessories.

It is believed that this private limited company has a high growth potential considering its past
business and its current performance it does benefits in selling and servicing of the California
based company CUMMINS, other high market base and intensified company of the world like
us based Valvoline KSB, Chicago Pneumatic and TATA.

This company has a lot of potential for growth in the north Indian market where it is very
difficult for the people to search for servicing and maintenance of their personal or office based
vehicles they can even expanded to the south Indian market through the recommendations and
a positive word of mouth of their own particular regular customers they have huge service
camps and stations across Rajasthan with is yielding handsome profits and have made a lot of
growth and advantages over the other major players in the market with selected product and
service based marketing strategy.

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 Chapter 2
CONCEPTUAL BACKGROUND & LITERATURE
REVIEW

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 Chapter 2
Conceptual Background and Literature Review

2.1 Theoretical background of the study

Financial analysis is a procedure through which assessing organisations, ventures, spending
plans and other funds along with the related elements of deciding execution and
appropriateness. Ordinarily, financial analysis is utilized to breakdown whether a substance is
steady or sufficiently gainful to warrant a financial speculation. When taking about an
organisation, a money related expert examination behaviour is highly concentrating on salary
explanation, monetary record and income articulation

Usage by Stakeholders

It is utilised by a surge of partners for example credit and value speculators, the administration,
the open and the leaders inside the association. All these partners have a distinctive interest and
they apply a wide range of systems to address their issues, for instance value speculators are
keen on the high-income intensity of the association and maybe the management ability and
developments of profits. Leasers need to guarantee that the chief is paid on the association’s
obligation of securities whenever due.

Usage by Managers
The financial ratios are those ratios which is very important to check the magnitude of any two
numerical values and it helps in scrutinizing the monetary worth and value of any kind of
corporation. These ratios are opted to know the firm current creditors and the professional
owners too.

Usage by Company
the achievement of any business firm is greatly dependent upon its cost awareness. Along these
lines the administration should dependably remember the cost factor is the way to progression.
All monetary investigation examines the financial exchanges of the firm. It provides light to
all long term and short-term assets of the firm are properly manged and utilized. Regardless of
whether monetary assets are utilized for long purposes like procuring any hardware or gear or
so forth.

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How to analyse

The examination should call the attention to with respect to what is the pattern of the firm in
stretching out credit to its clients.at that point normally the firm should bear the occurrence of
enthusiasm on its working capital raised from the bank and would affect the organisation. It
should help in finding ways against letters of credit. For example, when these reports are
revealed the firm enters the sales proceeds.

How to conduct a financial study

This study conducted on the statement of financial analysis has made the helps to know and
understand the current market positions and well as performance of the company and its
business that where it is running smoothly in an effective and efficient way.

The financial statements must acquire those data which must relate to the monetary affairs of
the entity it would also be very crucial for the bankers and the investors who could use this
vital information to survey the associations execution to take budgetary choices like allowable
bank fund limit and expectations about the future. Accordingly, budget summary gives the
information which is expected to access the future of corporation from benefits of incomes

It consists of income statement along with the comparative balance sheet with the ratio analysis
is very feasible in conducting the business research and analysing the past and the current trends
of the entity as a result there should be appropriate future growth with ample pf profits and
reserves for the survival of the business.

Objectives of Financial Analysis

• It helps in profit maximisation of shareholders

• It helps in proper and optimal utilization of finance
• It helps in building a good corporate image of the firm
• It creates goodwill for the benefit of the company
• It maximizes the wealth of the shareholders
• It helps in monitoring the cash inflows and outflows

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• It helps in creating resources with minimal utilization of each of them
• It improves coordination within the internal management of the company
• It reduces overall cost of capital
• It provides guidance for planning the capital structure of the company
• It reduces operating risks

Scope of Financial Analysis

All scope for financial analysis is categorized into two approaches which are mentioned below:

1. Traditional Approach

2. Modern Approach

1. Traditional Approach

It consists of following functions which must be played the financial manager which is as
follows:

• Mobilization of funds through all the financial instruments like preference and equity
shares, bonds & debentures
• Compliance of legal finance for distribution and procurement of funds
• Systematic allocation of short- and long-term funds

2. Modern Approach

It consists of the following functions which must be played the financial manager which is
justified below:

1) Investment Decision

2) Financing Decision

3) Dividend Decision

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1) Investment Decision

These are those decisions which are taken by the top-level managers who does planning for
appropriate decision for the success of the business.

2) Financing Decision

These are those kinds of decision which helps the financial officials to take some crucial
decisions on allocation and accumulation of funds.

3) Dividend Decision

This kind of decision helps in calculation of earnings amongst all the amount credited to the
shareholders and reserves that’s is retained earnings.

Merits of Monetary Analysis

Merits on monetary analysis is as follows:

• It improves monetary health of the firm

• It helps in facilitation of communication
• It provides managerial control
• It is very important in measurement of financial solvency
• It forecasts unanticipated events

Disadvantages of Monetary Analysis

Demerits on monetary analysis is as follows:

• Different price level of different firms

• It wholly depends upon accuracy of reports
• It is difficult in analysing absolute results for revenue and profits
• It becomes unable to cope up with the current trends in the market
• It does not indicate company’s actual performance

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Sources of Financial Analysis

there are 4 sources of financial analysis through which each and every firm or company have
to go through those are as follows

1. Gains and Expense Account

2. Income Statement

3. Balance Sheet

4. Cash Flow Statement

1. Trading and Profit and Loss Account

Trading and profit and loss account is calculated to determine profit levels. It provides vital
information on future of shareholders wealth along with the total expenditure occurred while
revenue generation. Trading and profit and loss account is crucial for evaluating new
opportunities and trends based on current and previous year.

2. Income Statement

Income statement is useful to every business because:

• To know profitability position of the organization

• It also helps in determining the status and prestige of the company who is running its
business
• It provides the organisation a clear picture of the entity along with its current position
• It determines the worth to pay off the shareholders within a reasonable time frame to
measure success in the long run.

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3. Balance Sheet

It consists of equity and liabilities side as well as a side for assets of the company which is
crucial and vital to dispose in front of the public to entertain a market standard and strength to
compete in this big competitive world.

The Analysis of the financial statements is the process of overseeing and analysing financial
statement which includes:

• Monetary strength at the conclusion of a year

• It contains assets and liabilities which generates benefits
• It helps in generating cash inflow
• It consists of asset side and liabilities side
• Assets consists of investments, non-current assets which consists of fixed tangible
assets and intangible assets, current assets which consists of inventories, accounts
receivables and cash and cash equivalents
• Equity and Liabilities consists of shareholders’ equity, provisions & accounts payable
• The total of equity and liabilities matches with the total of the asset

4. Cash Flow Statement

Cash flow statement status shows the related finance acquired to utilise for working capital and
requirement of cash. It is also very helpful to evaluate the cash availability with banks and the
entity. This information shows a cash’s incoming and outgoing from the organisation.

Objectives of cash flow statements is as follows:

• It reveals liquidity condition about a firm

• It helps in evaluating an organisations future profit potential
• It helps the organisation to take vital financial decisions on maximum permissible
finance limit of a bank, along with prediction for future
• It helps in crucial investing decisions

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Tools for Financial Analysis

There are many tools for analysing the current financial aspects of the company it consists of
the following:

1. Comparative Balance Sheet

2. Comparative Income Statement
3. Common Size Statements
4. Trend Analysis
5. Ratio analysis

1. Comparative Balance Sheet

It helps in ascertaining 3 aspects:

• Profitability of the firm

• Financial position in the long run
• Current liquidity and financial position

2. Comparative Income Statement

It helps in determining the following:

• Increment or decrement in net profit & gross profits

• Helps in researching a firm’s operational profits
• Firm’s overall profitability

3. Common Size Statements

These statements are also known as vertical analysis which is concluded by considering a
percentage form where the whole balance sheet of the company is transformed into percentage
along with the profit and loss statements are inculcated into a common base.

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4. Trend Analysis

This analysis shows the company’s current trend in the whole market through a graphical or
diagrammatic representation over a series of years which represents an upward or a backward
trend and a comparison between the past and the current year is highlighted. As a result, quality
and performance of the management is detected through good and poor sign.

5. Ratio analysis

This analysis reveals the consistency of 2 opted number values extracted from financial
statements of an organisation. Moreover, they are screened in plenty standards to analyse the
monetary condition of an organisation. For all the content analysis of the financial statements
5 kinds of ratios are used those are mentioned as follows:

A. Profitability Ratios

Profitability ratios determines a firm’s usage of financial assets and monitoring the
expenditures to know the return. It helps in revealing a true financial position of the enterprise
in monetary terms there are many kinds of profitability ratios some of them are as follows:

1) Net Profit Ratio

It helps in evaluation of efficiency of management to profitably conduct a business from

organisation’s eye. It indicates profit on shareholders wealth. A business entity considers
higher net profit ratio for better efficiency.
PBDIT = profit before depreciation, interest and tax
Net Profit Ratio = Net Profit/Net Sales*100

2) Gross profit ratio

This is a type of ratio in which the company compares its gross profit with that of its revenue
basically it justifies basic profitability of the firm. It’s called margin ratio too which indicates
percentage of sales.

Gross Profit Ratio = Gross Profit/Revenue from Operations*100

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3) Operating profit ratio

Operating Profit Margin is productivity or execution, proportion which is used to compute the
level of benefits an organisation produces from its activities, before subtracting expenses and
determining charges.
Operating Profit Ratio =Gross Profit / Sales

B. Liquidity Ratio

Liquidity ratio evaluates how should debt cover the cash of entity. It helps in measuring the
short-term adequacy for certain time intervals to check and measure the solvency level. There
are many kinds of liquidity ratios some of them are as follows:

1) Current Ratio
To quantify the outlet or dissolvability for an examination and comparing the current liability
with those current assets to reach the possible obligation and ability of an establishment. 2:1 is
the ideal one for this.
Current Ratio = Current Assets / Current Liabilities

2) Quick Ratio
It considers firm’s strengths to pay off its subsequent debts by realising only quick assets that
is prepaid expenses stock and marketable securities. These ratios are also called acid test ratio
and the ideal ratio seems to be 1:1.
Quick Asset = Current Asset – Stock – Prepaid Expenses
Quick Ratio=Quick Asset/Current Liability

3) Cash Ratio
This ratio measures the firm’s liquid assets to that of entity’s subsequent liabilities which helps
in the determination of knowing if the firm would be able to cover its short period liabilities.
The ideal ratio in it is 2 :1.
Cash Ratio=Cash and Cash Equivalents/Current Liability

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C. Activity ratios

Activity ratio also called efficiency ratios, as well as turnover ratios which measures the entity’s
impact through the optimally utilizing assets. It helps in interpreting the efficiencies of the
establishment. In short, it indicates the position of assets usage. There are many kinds of
activity ratios 3 of them are as follows:

1) Fixed Asset Turnover Ratio

The fixed asset turnover ratio is a productivity ratio that estimates the organisations arrival on
their interests in property plant by contrasting net sales and fixed assets. In other words, it
computes how productively an organisation is creating deal with its machine and gear.
Fixed Asset Turnover Ratio =Revenue /Fixed Asset

2) Total Asset Turnover Ratio

The asset turnover ratio is an effectiveness proportion that estimates an organisations capacity
to generate revenue through the usage of all assets. Moreover, it demonstrates how proficiently
an organisation can utilize its revenue through proper resources.
Total Assets Turnover Ratio=Net Sales/ Total Assets

3) Capital Employed Turnover Ratio

A capital employed turnover ratio is a kind of ratio in with which a firm estimates the deals
generated utilizing its current fixed resources. It sets up a connection between capital utilized
and the deals.
Capital Employed = Total Assets – Current Liabilities
Capital Employed Turnover Ratio=Net Sales/ Capital Employed

4) Inventory Turnover Ratio

A stock turnover ratio is an effectiveness ratio with which it is very easy to derive how a firm
adequately tales the load of the entity by separating cost of merchandise sold with the normal
stocks prevailed in a company.

Average Inventory = (Opening Stock + Closing Stock)/2

COGS = Opening Stock + Purchases + Direct Expenses – Closing Stock

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Inventory Turnover Ratio=COGS / Average Inventory

COGS = Cost of Goods Sold

5) Debtors Yield Ratio

A debtor’s yield ratio is an efficiency ratio with which a firm how effectively the firm collects
payments from its debtors

Average Receivables = (Opening Debtors &B/R + Closing Debtors & B/R)/2

Net Credit Sales = Sales – Sales Return

6) Creditors Yield Ratio

A creditor’s yield ratio is an efficiency ratio with which a firm how effectively the firm pays
off its debt.

Average Receivables = (Opening Creditors & B/P + Closing Creditors & B/P)/2

Net Credit Purchase = Purchases – Purchase Return

D. Debt Ratios

Leverage or debt ratio estimates the time taken to waive off all liabilities of the firm. It
interprets whether organisation would be able to reimburse future debt obligations within
stipulated time limit and the debt financed by proportion. Major types of debt or leverage ratios
are mentioned below:

1) Debt Equity Ratio

debt equity ratio is a ratio demonstrating the general extent of proprietor’s equity and the
obligation used to fund an establishment’s assets. closely identifies with utilizing, the
proportion is otherwise called liability ratio
Debt Equity Ratio= Total Liability/ Share Holders Equity

29
2) Debt to Capital Ratio
The debt capital ratio is a kind of leverage ratio in which the company’s capital structure level
of risk with monetary solvency is measured during a point of time when the company is running
in a good pace.
Debt to Capital Ratio= Total Debt/ (Total Debt + Total Equity)

3) Interest Coverage Ratio (%)

The interest coverage is utilized to decide how effectively an organisation can pay their
advantage costs in extraordinary obligation. This ratio is determined by separating an
organisations’ profit before earnings before interest and tax (EBIT) for a similar period
Interest Coverage Ratio= EBIT / Interest Expenses

E. Market ratios

Market ratio helps in evaluating the price of stock and shares which included the comparison
of investment and profits of the establishment. It also helps in determining whether the shares
are undervalued or overvalued. Major types of market ratios are mentioned below:

1) Earnings Per Share

EPS considers in estimating performance at a business and where the actual income of the
company is derived, and it is simultaneously compared with the shares which are held by the
company.

EPS = Earnings Available for Equity Shareholders – Preference Dividend / Equity Shares Held

2) Market Price Per Share

It’s a share at which share price of an establishment could be used at market place, like a stock
exchange. An investor has to make sure that the stocks or shares are charged at sufficiently low
price. It helps the investors to buy shares at a low level from the open market.

Market Price per share = Current Market Price / Number of Outstanding Shares

30
3) Price Earnings Ratio

Price earnings ratio helps company to know whether the stocks have been priced at an
undervalued or overvalued rate during a stage of competition amongst multiple firms for the
success of any business.

Price earnings ratio = Market price per share / Earnings per share

2.2 Literature Review

1. N. K. Nair (1991) had concentrated on part in India’s fortify trade. Thus, review
accepted concrete, building objects possessed key in economy. Review uncovered in 1990 –
1991 the trade had introduced a limit of forty-eight metric tonnes with a creation of 48 million
tons. It also had estimated a bond industry limit development of approximately 100 million
tons by the year 2000. This review had additionally concentrated on probability and monetary
related execution list of the concrete business with a specific end target to differentiate between
fundamentals and perspective.

2. Hempel, Simonpson (1998) has examined in financial institutions based on budgetary

administrative effectiveness in Taiwan. The review found that the higher the return on assets,
the higher the money related execution or productivity of the financial institution

3. Miller (1977) said that all that insignificant favourable position of additional
commitment constructs lessons as a proof of those arguments based on commitments, while
fringe benefit costs gradually raise upward which will focus on the trade-off while packing all
the evaluations and important returns that are used in financing any kind of projects

4. Govind Rao and Roe (1999) concentrated on the effect of working capital and those
financial analysis which made a huge impact on and huge gains in the concrete industry of
India. Both the positive and the negative connections that could be investigated between
working capital ratio proportion and the gains from resourcefulness

31
5. Elizabeth Duncan and Elliott (2004) had expressed report at the level of productivity,
client administration, financial finishing amongst Aussies money related entity demonstrated
that all kinds of measures of budgetary execution, for instance, edge of premium, profit from
optimally maintaining the resources and capital ampleness are prior only connected with those
clients and the quality of administration.

6. Pandey (1985) thinking along those lines it is watched that at the first an investigation
of the financing and the speculation choices accessible to the entity outright to be done, and on
assessment of execution by identifying with the destinations set up towards the start of the
budgetary arrangement. In the usage of the arrangement which consists of an agenda and the
rectifications of the projections is the key in capacity of the varieties of outside and inside air
of the association.

7. Eisenhardt (1989) states that it is the second issue of the hazardous conveyance that
emerges when the main and the operator have diverse demeanours towards this vulnerability.
This issue here is that the standard and the operator may lean toward various activities
considering various vulnerable inclinations.

8. Gitman (1997) stated that the periodical change is as indicated by the movement and
interests of the association. This will help lessen the instabilities or dangers that can be a
hindrance to the development of that organisation. This wholly guarantees dependability and
gainfulness in the worry. Along these lines, the monetary arrangement can be extremely helpful
for those entrepreneurs to withstand awful circumstances and exceed expectations amid great
circumstances.

9. Brealey and Myers (1998) said that this gives us all details on finance as there are even
software’s based on some methods that calculate the possibility of variation for each of the
component of the plan which itself is based upon some area of study

32
10. Adolphus J. Toby (2008) has conducted the study on the liquidity performance
proportion ratio of the Nigeria based manufacturing firms. The result of the study had put
forward a significant relationship between liquidity, profitability, efficiency and leverage
values. The study had also attempted to suggest that to guide money supply, monetary policy
could be used to facilitate the monetary transmission mechanism by integrating minimum
liquidity requirement for the manufacturing industry.

11. Hajihassani (2012) he stated that correlation of monetary execution in the concrete
part in Iran. This review demonstrated an examination of the monetary execution for the review
from 2006 to 2009. The correlation of the money related execution of certain bond organisation
can be evaluated by utilising different monetary ratios and it estimates the concrete entities
working in the boundaries of Iran. The money related portion are divided into 3 classifications.
In this it is presumed that the execution of concrete entity on the premise of various productivity
proportions then in the view of the liquidity proportion and the used proportion.

12. A Rachchh Minaxi (2011) have proposed an examination of budgetary explanations

which includes the investigation of those monetary articulations to concentrate on those data
that could encourage basic leadership factor. It is the way through which the connection
between segments of the monetary explanation’s gets a superior comprehension of the position
and execution of the element

13. Greninger (1996) distinguished and refined monetary proportions utilising a Delphi
technique considering all the regions of liquidity, reserved funds, resource distribution, lodging
expenses, taxation rate, security against swelling and insolvency. In the view of the Delphi
discoveries it projected that part of monetary prosperity to common person.

14. T Salmi And Marthikainen T (1994) has stated that here there was a survey
conducted on hypothetical as well as experimental establishments of monetary ratio-based
investigation which proposed that a deliberate structure for dissecting budgetary explanations
together with the watched isolate which inquiries about the patterns that could be useful for
cultivating the improvements of research. On the off chance that the after affects of the research
in the evaluation of cash-based relationship which are very helpful for leaders, the outcomes
ought to be hypothetically reliable.

33
15. Robert Halsey F , J John Wild And Subramanyam K. R. (2006) had expressed and
analysed the information of budgetary articulations in the use of exemplary devices and
systems to universally useful money based proclamations and related information to determine
valuable assessments and inductions in the examination of business, and as a result it also
diminishes dependence on future predictions, guess works and instant decision making for
dealing with those choices.

16. Snehalata GC Bhodiakhera (2015) has analysed that proportion of examination has
been done to look at the money related proclamations and monetary records of Mahindra and
Mahindra co also offer recommendations of the change for the effectiveness of the
organisation.

17. Bell and Brown (1968) Beaver (1968) And Beaver Et Al. (1980) has analysed
greatness in value fluctuations encompassing appraisal in an organisation’s yearly profits.
Their outcomes demonstrated that the connection happened rapidly and, in this manner, the
EMH in the semi solid frame holds ground.

18. Amalendu Bhunia, Sri Somnath Mukhti and Sri Gautam Roy (2011) has
investigated to differentiate the budgetary qualities and shortcomings of Indian open segment
pharmaceutical businesses by properly setting up link in components within accounts.

19. Altman and Eberhart (1994) told usage in neural framework of separating verification
that grieved corporate through Italian national. Operating further than 1000 examined firms
with proportions in able factors, create arrangement in neural systems very close to
accomplishment tests.

20. Carlose Correia (2007) clarified an investigation in organisation, regardless of

administration, speculators or else invested individuals, ought to incorporate an examination
of the establishment’s monetary transactions. The clearest and properly accessible wellsprings
of this kind of data is the firms yearly predicted reports. As per the large acknowledged book
keeping rehearse, the money related articulations will genuinely show the conditions of the
establishments business and consequences of operations for the particular year.

34
Author/ Title of the Article Objective Outcomes Gaps identified
researcher /Study or Findings
Pandey (1985) Financial and speculation To identify the Untrue reflections
choices destinations set up
towards the start of the
budgetary arrangement
Eisenhardt inclinations operator have diverse It may lean toward
(1989) demeanours various activities
considering
various vulnerable
inclinations.

Gitman (1997) periodical change It will help lessen the It became unable to
instabilities or dangers withstand awful
that can be a hindrance circumstances
to the development

35
 CHAPTER 3
RESEARCH DESIGN

36
 Chapter 3

Research Design

3.1 Statement of the problem

The financial aspect of the company helps in discovering the monetary situation of the whole
organisation. It is helpful in evaluating the quality and shortcomings of the firm which is
legitimately settled by the connection between the thing those consolidated profit and loss
account along with the balance sheet and the problem of the statement is that ratios do not give
the clear picture of the firm’s financial position and strength amongst other firms and entities.

3.2 Need of the study

The need for the study is that there is enough potential of growth for the individual as well as
the organisation and both the fields would be able to work with their full effort and interest to
tackle almost each and every problem of the deal of servicing and selling the products to their
customers and making a far better relationship then other competitors in this vast world of
technology people will bring new inventions to conquer any business which might be next to
impossible.

The study conducted on the financial analysis of URSS Techservices Private Limited has a
large and steady market in Rajasthan and it also encourages the employees and the financial
analysists to evaluate the current tax rate slabs goods and services tax and various other kinds
of taxes which is levied according to the rules and guidelines levied by the government with
inclusion of exemptions and deductions.

3.3 Objectives

• To determine the profitability using techniques in an entity

• It helps to identify the cash coverability factor for company
• For examining leverage of an organisation
• To formulate the market trends of the company

37
3.3 Scope of the study

An investigation of the capital structure includes the examination of the long haul and
additionally here and now sources that an organisation taps to meet its necessities of those
funds. The extent of the review is bound to the sources that URSS Techservices Pvt. Ltd.
Throughout the year is under review from 2015 – 2018

3.4 Research methodology

It is absolute and it’s a is also a basic structure of the review that aids the accumulation and
evaluation of the information. Research is an important and a logical approach towards taking
care of the issue and it helps in progression of then organisation to enhance its own potential.
This showcases a conceivable strategy for gathering vital information from a roundabout
technique, one by one and touching base at the best arrangement considering the exploration
of the well-arranged opinion of the research.

RESEARCH DESIGN

In this design we will think about the subjective and quantitative way toward dealing with the
available information which is assembled and accumulated in a one place which concentrates
the last outcomes with utilizing research apparatuses. As a result, this experiment configures
the basic methodology what we have chosen. we can make our examination without any issues.

COLLECTION OF DATA

The above information had been accumulated from the yearly report, apparent sites and all
places where an organisation information is available:

Sources of Data Collection

• Secondary Data
1. Company’s yearly reports
2. www.urssjpr.com

38
 3. Company Audited Final Statement and Conclusions
4. Company’s Registration Websites

3.6 Limitations

• The study is basically done in light of the auxiliary information given in the monetary
explanations.

• This study depends upon the recorded information and the data given in the yearly
reports and all the audited financial report statement of the organisation.

• This study does not provide a clear picture of the organisation’s financial accounts and
aspects as all companies should follow the rules and regulations prescribes by the
government of India as well as the registrar of companies.

• This study helps in evaluating an organisation’s funding on different departments and

their individual requirement with an aim to reserve profits for future development of
the organisation but these profits would be generated in the business is mainly
dependent on the individual performance of the organisation.

• This study does not clearly indicate how the organisation is moving on in this vast world
with huge number of competitors.

39
3.7 Chapter Scheme

Chapter 1: Introduction
This chapter includes Introduction, Industry profile & Company Profile which also consists of
Promoters, Vision, Mission & Quality Policy, Services along with the product profile, scope
of the operations, Infrastructure facilities, SWOT Analysis, Future growth and prospects

Chapter 2: Conceptual background & Literature review

This chapter describes Theoretical background of the study& Literature review

Chapter 3: Research Design

This chapter includes Statement of the problem, need of the study, Objectives, Scope of the
study, Research techniques adopted, Limitations & at last Chapter Scheme

Chapter 4: data Analysis and Interpretation

This chapter contains all the Financial Analysis, Observation on Statement of P&L and
Statement of Balance Sheet & Ratio Analysis

Chapter 5: Summary of Findings, Conclusion and suggestions

This chapter contains Findings, Conclusions & Suggestions

40
 Chapter 4

ANALYSIS AND INTERPRETATION

41
 Chapter 4

Data analysis and interpretation

4.1 Profit and Loss Statement

PARTICULARS Mar'18 Mar'17 Mar'16

Revenue from operations 503868565.82 466696066.16 461729097.31
Excise Duty .00 .00
Other Income 2902570.02 9818174.33 8229457.48
TOTAL INCOME 506771135.84 476514240.49 469958554.79
EXPENDITURE:
Material Consumed 381528108.70 360191690.35 360063387.41
Employee benefit expenses 64750152.66 58774057.00 55972226.43
Finance costs 8631751.35 8087181.39 7659716.98
Depreciation & amortization 2451978.67 2002081.24 2144939.18
expenses
Other expenses 33040438.95 31700393.01 31584376.96

TOTAL EXPENDITURE 490402430.33 460755402.99 45424646.96

Profit before tax 16368705.51 15758837.50 12533904.83
Tax expenses 6571162.22 5805019.00 5512809.63
Profit for the year 9797543.29 9953818.50 7021098.20
Appropriation of profit
Dividend
Net profit for the year 9797543.29 9953818.50 7021098.20

42
4.3 Balance Sheet

PARTICULARS Mar 18 Mar 17 Mar 16

LIABILITIES AND EQUITIES
OWNER’S FUNDS
Equity Share Capital 2500000.00 2500000.00 2500000.00
Reserves & surplus 134918438.11 125120894.82 115167076.32
Money received against warrants
on shares
Total Owner’s Fund 137418438.11 127620894.82 117667076.32
NON-CURRENT LIABILITIES
Long Term Borrowings 3271918.93 770629.93 346507.13
Others long term debts
Long Term Provisions
Total Non-Current Liabilities 3271918.93 770629.93 346507.13
CURRENT LIABILITIES
Short Term Borrowings 64307485.15 59216599.50 58579278.77
Trade Payables 43067970.74 44089420.62 30030417.15
Other Current Liabilities 1745008.40 5868922.33 658676.54
Short Term Provisions 9503191.45 8729263.02 6612078.53
Total Current Liabilities 118623655.74 117904205.47 95880450.99
Total Capital and Liabilities 259314012.78 246295730.22 213894034.44
ASSETS
NON-CURRENT ASSETS
Fixed Assets
Tangible Assets 17467954.25 14983287.25 11283970.93
Intangible Assets
Non-Current Investments 12950000.00 2385000.00 2835000.00
Long Term Loans and Advances 40488570.00 41307771.00 45619449.92
Other Non-Current Assets 3948901.28 8570278.19
Total Non-Current Assets 74855425.53 67246336.44 59738420.85

43
PARTICULARS Mar 18 Mar 17 Mar 16
CURRENT ASSETS
Inventories 104701703.34 99701375.22 87721523.80
Cash and bank balances 32349789.92 20399176.62 19280420.79
Trade receivables 43807376.69 51221360.92 42779691.28
Other Current Assets 3599708.30 7727481.02 4373977.22
Total Current Assets 184458587.25 179049393.78 154155613.59
Total Assets 259314012.78 246295730.22 193974221.68

44
4.3 Ratio Analysis

PROFITABILITY RATIOS

1. NET PROFIT RATIO

NET PROFIT RATIO = NET PROFIT / NET SALES * 100

Table -4.1

YEAR NET PROFIT NET REVENUE NET PROFIT RATIO

2018 9797543.29 503868565.82 1.944464083
2017 9953818.50 466696066.16 2.132826741

2016 7021098.20 461729097.31 1.520609864

Chart - 4.1

NET PROFIT RATIO

2.5

1.5

NET PROFIT RATIO

1

0.5

0
2018 2017 2016

INFERENCES:

The net profit ratio constantly seems to be in a fluctuating trend it was 1.520609864 in the year
2016 and 2017 it was 1.944464083 and in the current year it declined up to 1.944464083 which
reveals that the benefits of the establishment is constantly declining, and company is running
into losses.

45
2. GROSS PROFIT RATIO

GROSS PROFIT RATIO = GROSS PROFIT/REVENUE FROM OPERATIONS*100

Table – 4.2

YEAR GROSS PROFIT REVENUE GROSS PROFIT RATIO

FROM
OPERATIONS
2018 16368705.51 503868565.82 3.248606208
2017 15758837.50 466696066.16 3.376681023
2016 12533904.83 461729097.31 2.714558147

Chart - 4.2

GROSS PROFIT RATIO

4
3.5
3
2.5
2
GROSS PROFIT RATIO
1.5
1
0.5
0
2018 2017 2016

INFERENCES:

The Gross profit ratio constantly seems to be in an unsteady trend it was 2.714558147 in th
year 2016 & 2017 it as reduced to 3.376681023 and in the current year it declined up to
3.248606208 which interprets the benefits of the establishment are constantly declining and
company is running into huge losses.

46
3. OPERATING PROFIT RATIO

OPERATIONAL BENEFIT RATIO = GROSS BENEFIT / SALES

Table – 4.3
YEAR OPERATING SALES OPERATING PROFIT
PROFIT RATIO
2018 16368705.51 503868565.82 3.248606208
2017 15758837.50 466696066.16 3.376681023
2016 12533904.83 461729097.31 2.714558147

Chart - 4.3

OPERATING PROFIT RATIO

68
67
66
65
64
OPERATING PROFIT
63 RATIO
62
61
60
59
2018 2017 2016

INFERENCES:

Operational benefit ratio is decreasing continuously from 2.714558147 in 2016 to that of

3.376681023 in 2017 and in the current year it is3.248606208 which means that it would have
a fewer edge of working benefit for the instalments of profits and the production of stores

47
LIQUIDITY RATIOS

1. CURRENT RATIO

CURRENT RATIO = CURRENT ASSET / CURRENT LIABILITY

Table - 4.4

YEAR CURRENT ASSET CURRENT LIABILITY CURRENT RATIO

2018 184458587.25 118623655.74 1.554989906
2017 179049393.78 117904205.47 1.518600571
2016 154155613.59 95880450.99 1.607789826

Chart - 4.4

CURRENT RATIO
1.65

1.6

1.55
CURRENT RATIO
1.5

1.45
2018 2017 2016

INFERENCES:

This ratio seems to be fluctuating on a 1.607789826 in 2016 to 1.518600571 in the year 2017
and again it raised to 1.554989906 in the year 2018 and as per the act the ideal ratio for current
ratio is 2. The higher the current proportion, the more able the entity is of paying its
commitments, as it has a bigger extent of advantage esteem with respect to the estimation of
its liabilities.

48
2. QUICK RATIO

QUICK ASSET = CURRENT ASSETS – STOCK – PREPAID EXPENSES

QUICK RATIO = QUICK ASSET / CURRENT LIABILITY

Table – 4.5

YEAR QUICK ASSET CURRENT LIABILITY QUICK RATIO

2018 79756883.91 118623655.74 0.672352267
2017 79348018.56 117904205.47 0.672987178
2016 66434089.79 95880450.99 0.692884619

Chart - 4.5

QUICK RATIO
0.695
0.69
0.685
0.68
0.675 QUICK RATIO
0.67
0.665
0.66
2018 2017 2016

INFERENCES:

As compared to the previous years the Quick ratio seems to be declining on a 0.692884619 in
2016 to 0.672987178in the year 2017 and again it diminished 0.672352267 in the year 2018
and as per the act the ideal ratio for quick ratio is 1:1. The more the quick ratio, the more the
fit the entity is paying off its commitments, as it has a bigger extent of advantage esteem in
respect of the estimation of its liabilities.

49
1. CASH RATIO

LIQUID CASH RATIO = CASH and CASH EQUIVALENTS / CURRENT LIABILITY

Table – 4.6

YEAR BALANCE OF CURRENT LIABILITY CASH RATIO

CASH
2018 32349789.92 118623655.74 0.272709433
2017 20399176.62 117904205.47 0.173014835
2016 19280420.79 95880450.99 0.201088132

Chart - 4.6

CASH RATIO
0.3

0.25

0.2

0.15
CASH RATIO
0.1

0.05

0
2018 2017 2016

INFERENCES:

As compared to the previous years the Cash ratio seems to be fluctuating on a 0.201088132 in
2016 to 0.173014835 in the year 2017 and again it reached up to 0.272709433 in the year. The
higher the monetary proportion, the more skilled will be the entity to pay off certain liabilities
up to a limited extent.

50
ACTIVITY RATIO

1. FIXED ASSET TURNOVER RATIO

FIXED ASSET EFFICIENCY RATIO = NET REVENUE / FIXED ASSETS

Table – 4.7

YEAR NET FIXED FIXED ASSET EFFICIENCY

REVENUE ASSETS RATIO
2018 503868565.82 17467954.25 28.8453106
2017 466696066.16 14983287.25 31.14777541
2016 461729097.31 11283970.93 40.91902577

FIXED ASSET EFFICIENCY RATIO

50

40

30
FIXED ASSET
20 TURNOVER RATIO

10

0
2018 2017 2016

Chart - 4.7

INFERENCES:

The fixed asset turnover ratio of the company is constantly declining from 40.91902577 in the
year 2016 to 31.14777541 in the year 2017 and in the current year it is 28.8453106 which
indicates better utilization of fixed assets as compared to previous years.

51
2. TOTAL ASSETS TURNOVER RATIO

TOTAL ASSETS EFFICIENCY RATIO = NET REVENUE / TOTAL ASSETS

Table – 4.8

YEAR NET TOTAL ASSETS TOTAL ASSETS

REVENUE EFFICIENCY RATIO
2018 503868565.82 259314012.78 1.943082676
2017 466696066.16 246295730.22 1.894860564
2016 461729097.31 193974221.68 2.380363191

Chart - 4.8

TOTAL ASSETS EFFICIENCY RATIO

2.5

1.5
TOTAL ASSET
1 TURNOVER RATIO

0.5

0
2018 2017 2016

INFERENCES:

This ratio is fluctuating from 2.380363191in 2016 to 1.894860564 in 2017 and in current year
it is 1.943082676 which implies that that the entity is not properly utilising its advantages
productively and doubtlessly have the board or creation issue.

52
3. CAPITAL EMPLOYED TURNOVER RATIO

CAPITAL EMPLOYED = TOTAL ASSETS – CURRENT LIABILITIES

CAPITAL EFFICIENCY RATIO = NET REVENUE / CAPITAL EMPLOYED

Table – 4.9

YEAR NET CAPITAL CAPITAL EFFICIENCY

REVENUE EMPLOYED RATIO
2018 503868565.82 140690357 3.581400862
2017 466696066.16 128391524.8 3.634944494
2016 461729097.31 98093770.69 4.707017521

Chart - 4.9

CAPITAL EFFICIENCY RATIO

5

3
CAPITAL EMPLOYED
2 TURNOVER RATIO

0
2018 2017 2016

INFERENCES:

Total Capital employed turnover ratio of the company is constantly declining from
4.707017521 in 2016 to 3.634944494 in 2017 and in current year it is 3.581400862 which
means that the entity is not equally monitoring its capital structure to lose the market share in
a competition.

53
4. INVENTORY TURNOVER RATIO

AVERAGE INVENTORY = (OPENING STOCK + CLOSING STOCK) / 2

COGS = OPENING INVENTORY + PURCHASES + DIRECT EXPENSES – CLOSING
STOCK
INVENTORY TURNOVER RATIO=COGS / AVERAGE INVENTORY

Table – 4.10

YEAR COGS AVERAGE INVENTORY TURNOVER

INVENTORY RATIO
2018 381528108.70 102201539.3 3.733095522
2017 360191690.35 93711449.51 3.843625216
2016 360063387.41 82608803.61 4.358656362

Chart- 4.10

INVENTORY TURNOVER RATIO

4.6

4.4

4.2

4 INVENTORY TURNOVER
RATIO
3.8

3.6

3.4
2018 2017 2016

INFERENCES:

Inventory turnover ratio of the company is declining from 4.358656362 days in 2016 to
3.843625216 days in 2017 and in current year it is 3.733095522 which mean optimally utilising
the stocks.

54
5. DEBTORS EFFICIENCY RATIO

AVERAGE RECEIVABLES = (OPENING TRADE RECEIVABLES + CLOSING TRADE

RECEIVABLES) / 2
DEBTORS EFFICIENCY RATIO = NET CREDIT SALES / AVERAGE DEBTORS

Table – 4.11

YEAR NET CREDIT AVERAGE DEBTORS TURNOVER

SALES RECEIVABLES RATIO
2018 503868565.82 47514368.81 10.60455139
2017 466696066.16 47000526.1 9.929592387
2016 461729097.31 42848569.99 10.77583447

Chart- 4.11

DEBTORS EFFICIENCY RATIO

11
10.8
10.6
10.4
10.2 DEBTORS
10 TURNOVER RATIO
9.8
9.6
9.4
2018 2017 2016

INFERENCES:

This ratio is fluctuating initially through 10.77 for 2016 to 9.92 for 2017 and in current year it
is 10.60 days to get payments from debtors which more from the last year which is again a
fluctuation in its threshold

55
6. CREDITORS TURNOVER RATIO

AVERAGE RECEIVABLES = (OPENING CREDITORS &B/P + CLOSING CREDITORS

& B/P)/2

Table – 4.12

YEAR NET CREDIT MEAN CREDITORS EFFICIENCY

BUY PAYABLES RATIO
2018 386528436.82 43578695.68 8.869665115
2017 372171541.70 37059918.89 10.04242731
2016 370288827.8 26210608.02 14.12744136

Chart- 4.12

CREDITORS EFFICIENCY RATIO

16
14
12
10
8 CREDITORS
6 EFFICIENCY RATIO
4
2
0
2018 2017 2016

INFERENCES:

Creditors turnover ratio of the company is fluctuating from 14.13 days in 2016 to 10.04 days
in 2017 and in current year it is 8.87 days to pay off certain debts of the company

56
LEVERAGE RATIOS

1. DEBT EQUITY RATIO

DEBT EQUITY RATIO = TOTAL LIABILITY/ SHARE HOLDERS EQUITY

Table – 4.13

YEAR TOTAL SHARE HOLDERS DEBT EQUITY RATIO

LIABILITIES FUND
2018 259314012.78 137418438.11 1.8870394
2017 246295730.22 127620894.82 1.9299013
2016 213894034.44 117667076.32 1.81779

Chart - 4.13

DEBT EQUITY RATIO

1.95

1.9

1.85
DEBT EQUITY RATIO
1.8

1.75
2018 2017 2016

INFERENCES:

As the ideal debt equity ratio is 2:1 which is currently at 1.8870394 and therefore it is hazardous
in light of the fact that it demonstrated that financial specialists are subsidized those activities
as much as leasers have another was speculators don’t have a much skin in the amusement as
the loan bosses do and the company is also not financially sound.

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2. DEBT CAPITAL RATIO

DEBT TO CAPITAL RATIO= ALL DEBTS / (ALL DEBTS+ALL EQUITIES)

Table – 4.14

YEAR ALL DEBT ALL DEBT + ALL DEBT TO

EQUITY CAPITAL
RATIO
2018 121895574.7 259314012.78 0.47006937
2017 118674835.4 246295730.22 0.481838785
2016 96226958.12 193974221.68 0.496081166

Chart - 4.14

DEBT TO CAPITAL RATIO

0.5
0.495
0.49
0.485
0.48
DEBT TO CAPITAL
0.475
RATIO
0.47
0.465
0.46
0.455
2018 2017 2016

INFERENCES:

As the ideal debt to capital ratio is 1:1and tit seems that the company is declining from the year
2016 and 2017 that is 0.49608 and 0.48183 it raised up to 0.4700 in the current financial year
which indicates that it got a high financial strength in the current year with a low debt cost.

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3. INTERST COVERING RATIO

INTEREST COVERAGE RATIO = EBIT / EXPENSES OF INTEREST

Table – 4.15

YEAR EBIT EXPENSES OF INTEREST COVERAGE

INTEREST PROPORTION
2018 16368705.51 6571162.22 2.490990933
2017 15758837.50 5805019.00 2.714691804
2016 12533904.83 5512809.63 2.273596527

Chart - 4.15

INTEREST COVERING PROPORTION

2.8
2.7
2.6
2.5
2.4 INTEREST
2.3 COVERAGE RATIO
2.2
2.1
2
2018 2017 2016

INFERENCE:

In 2018 the interest coverage ratio was 2.490 which was lower as compared to year 2017 and
2016 which is 2.27 and 2.714 it shows us an improved feasibility report of financials and its
capability had also been successful in crossing interest duties which is bound to be paid

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MARKET RATIOS

1. EARNINGS PER SHARE (EPS)

EPS = (EARNINGS AVAILABLE FOR EQUITY SHAREHOLDERS – PREFERENCE

DIVIDEND) / EQUITY SHARES HELD

Table – 4.16

YEAR EARNINGS EQUITY SHARES HELD EPS

AVAILABLE
2018 9797543.29 2500 3919.017316
2017 9953818.50 2500 3981.5274
2016 7021098.20 2500 2808.43928

Chart - 4.16

EPS
5000

4000

3000

2000 EPS

1000

0
2018 2017 2016

INFERENCE:

In 2018 the EPS was lower as compared to year 2017 in which it was 3919.017316 and it
indicates that EPS was fluctuating in every financial year which mean that the shareholders
wealth was maximising.

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2. MARKET PRICE PER SHARE (MPS)

MARKET PRICE PER SHARE = CURRENT MARKET PRICE / NUMBER OF

OUTSTANDING SHARES

Table – 4.17

YEAR CURRENT MARKET NO. OF OUTSTANDING MPS

PRICE SHARES
2018 22.78 10 2.278
2017 86.87 67 1.296
2016 68.08 14 4.862

Chart - 4.17

MPS
6
5
4
3
MPS
2
1
0
2018 2017 2016

INFERENCE:

In 2018 the MPS was fluctuating throughout years and it 2016 it was the highest with 4.862
and in 2017 it diminished to a 1.296 and in the current year it was raised a little to 2.278 which
indicates that firms market value was not worth and the customers were switching over to
another organizations.

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3. PRICE EARNING RATIO

PRICE EARNING RATIO = MPS (Market Price Per Share ) / EPS(Earning Price Per Share)

Table – 4.18

YEAR MPS EPS PRICE EARNINGS RATIO

2018 2.278 3.13604 0.726393796
2017 1.296 1.39549 0.928706046
2016 4.862 2.40448 2.022058824

Chart - 4.18

PRICE EARNINGS RATIO

2.5

1.5

1 PRICE EARNINGS RATIO

0.5

0
2018 2017 2016

INFERENCE:

In 2018 the price earnings ratio was lower which is currently at 0.726393796 and it indicates a
slow financial growth and the company has started reducing all profits and they were able to
recover some amount of investment as compared to the year 2016 in which it has recovered
some proportion of their standard price set.

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 CHAPTER 5

SUMMARY OF FINDINGS SUGGESTIONS AND

CONCLUSIONS

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 Chapter 5

Summary of Findings, Conclusion and Suggestions

1.1 Findings

✓ Margin benefit ratio is constantly declining as far as concerned about the company it is
running into huge losses are at 1.944464083 in the current year.

✓ Gross profit ratio of the company is constantly declining and the company is running into
huge losses are at 3.248606208 in the current year.

✓ Operating profit ratio indicates that the company is not running smoothly and efficiently
and not providing more value in terms of profit to its shareholders and is now at 3.24860

✓ Current proportion should be 2:1. The higher the current proportion, the more able the
entity is of paying its commitments, as it has a bigger extent of advantage esteem with
respect to the estimation of its liabilities.at 1.554989906 in the current year.

✓ Quick ratio of the company should be at 1:1 and the establishment should check whether
the liabilities are properly used for paying liabilities which is at 0.672352267 in the
current year.

✓ Cash proportion must be at 1:1 indicating that the organisation is not able to reimburse
off certain liabilities from the past years and it currently shows 0.272709433 of current
liabilities

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✓ The fixed asset turnover proportion is of 28.84 days showing entity whether its capable
of paying all kinds of expenses as liabilities and the organisation is financially stable and
healthy

✓ the total asset turnover ratio of the company is 1.94 days for the current year which
indicates that the performance would be reflected from converting inventory into sales

✓ The capital employed ratio of the company are 3.58 days in the current year which means
mean organisation did not had appropriate structure to lose the market share in a
competition.

✓ Stock turnover proportion for this establishment for the current year is at 3.643953217
which mean optimally utilising the stocks.

✓ Debtors turnover ratio of the company of current year is 11 days to get payments from
debtors

✓ Creditors turnover proportion in the current annum are 8.97 days to pay off certain debts
of firm

✓ the debt equity ratio of the company is also not financially sound and in the current year
it is 1.8870394 :1 which indicates that the firm has more debts as compared to equity.

✓ The debt to capital ratio seems to be at a stagnant position at 0.47006937

✓ The interest coverage ratio of the company is currently at 2.49 which than past year which
shows an improved financials and its capability had also been successful in crossing
interest duties which is bound to be paid

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✓ EPS of current year is 3919.017316 that indicates that the shareholders wealth was
maximising.

✓ MPS to 2.278 which indicates that firms market value was not worth and the customers
were switching over to other organizations from the past years fluctuating results

✓ Price Earnings Ratio of the current year is 0.72 which indicates a slow financial growth
and the company has started reducing all profits and they were able to recover some
amount of investment over the past few years

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5.2 Suggestions

✓ Through this training what I concluded is that in this world of uncertainty and change,
the policy of the dealership-based company should be to diversify its risk & properly
manage its portfolio so that maximum benefit is achieved.

✓ Transparency of data within the organization is necessary.

✓ They need to cope up with the problems of internal management so as to tackle all the
external problems and compete other dealers across the state of Rajasthan.

✓ They should have a proper understanding of their work and the management could be
adopted in such a way all the employees and the mangers can work with utmost good
faith and interests to build more outputs and bring more profits in the future years

✓ A motivation training session to all employees for performance improvements and

control of their work activities to effectively manage time as time is money for each and
every entity

✓ The entity has to be more creative towards value creation amongst the customers

✓ They do not have to entirely receive quotations for the products and services from
websites

✓ They have to build tie ups with the local businesses for expansion purpose

✓ Improve the quality of work through building good relation with the customers

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5.3 Conclusions

The study conducted In Upper Rajasthan Sales and Services Private Limited on the
financial analysis had some conclusions which made a handsome profit in some years due to
support from the market and low competitors and reliable market in the Rajasthan circle or
territory.

Although the products and services are low and the availability across the state and the
company is gradually changing its strategies according to the demand available in the whole
market where engine equipment, air compressors, pumps and valves along with generators
and power supplier for those bulky or heavy weighed machinery for achievement of
handsome profits. At last the company have a plan for expansion in the future so that other
customers from different states might buy for their projects on office site or site of residency.

Moreover this company has shown a significant growth in achievements in the past few years
through proper management and less rigid structure. Now a days many top leading firms are
using new and latest techniques to conquer the peoples minds and curiosity top acquire all the
capacity across the city with limited resources available for them.

This organisation had successfully defeated all the competitors and satisfied their customers
along with enhancement in personnel’s productivity. Managing every resources within possible
requirements is not very easy for any entity with the help of lots of workers, employees and
professionals too.

At last but not he least this establishment had performed brilliantly to benefit the society as
well as the government of Rajasthan for building everlasting ultimate relationship for easily
carrying any kind of activities and processes throughout its life cycle

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 BIBLIOGRAPHY

BOOKS:
• Khan & Jain, Financial Management, Vikas Publications, 5th Edition
• Varshini & Maheshwari, Managers Accounting, Vikas Publications, 3rd Edition
• I.M. Pandey, Financial Management, Vikas Publications, 11th Edition
• Eugene F. Brigham, Financial Management-Theory & Practice, Atlantic Publications 8th
Edition

ARTICLES:
• Williams, E. E., & Dobelman, J. A. (2017). Financial statement analysis. World Scientific
Book Chapters, 109-169.
• Alexander, C. (2001). Market models: A guide to financial data analysis. John Wiley &
Sons.
• Helfert, E. A., & Helfert, E. A. (2001). Financial analysis: tools and techniques: a guide for
managers (pp. 221-296). New York: McGraw-Hill.
• Altman, E. I. (1968). Financial ratios, discriminant analysis and the prediction of corporate
bankruptcy. The journal of finance, 23(4), 589-609.
• Foster, G. (2004). Financial Statement Analysis, 2/e. Pearson Education India.
• Higgins, R. C., & Reimers, M. (1995). Analysis for financial management (No. s 53).
Chicago: Irwin.
• Penman, S. H., & Zhang, X. J. (2002). Modelling sustainable earnings and P/E ratios with
financial statement analysis. E Ratios with Financial Statement Analysis (June 1, 2002).
• Fraser, L. M., Ormiston, A., & Fraser, L. M. (2010). Understanding financial statements.
Pearson.

WEBLIOGRAPY:
• www.ursjpr.com
• www.wiki.com/cumminsltd
• www.wikipedia.com/valvolineltd
• www.moneycontrol.com/
• www.google.com//

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