Internship Report (22MBAIN307)

AT

“MANGALORE CASHEW INDUSTRY”

By

DEEKSHITH(1AY22BA054)

Submitted to

Visvesvaraya Technological University (VTU), Belagavi, Karnataka

In partial fulfilment for the award of the degree of

Masters of Business Administration (MBA)

Under the guidance of

INTERNAL GUIDE EXTERNAL GUIDE

Prof. NETHRAVATHI N Mr. Balakrishna Manja

Assistant Professor, MBA, AIT Human Resource

Department of MBA

Acharya Institute of Technology

Soladevanahalli, Hesaraghatta Main Road, Bengaluru– 560107

 DECLARATION

I Deekshith, hereby declare that the Internship Report with reference to ― Mangalore Cashew
Industry prepared by me under the guidance of PROF. NETHRAVATHI N , faculty of M.B.A
Department, Acharya Institute of Technology and external assistance by Mr. Balakrishna
Manja, Accountant Mangalore Cashew Industries .

I also declare that this internship is towards the partial fulfilment of the university Regulations
for the award of degree of Master of Business Administration by Visvesvaraya Technological
University, Belagavi.

I have undergone a internship for a period of four weeks. I further declare that this internship
is based on the original study undertaken by me and has not been submitted for the award of
any degree/diploma from any other University / Institution.

Place: Bengaluru

Date: Signature of the Student

 ACKNOWLEDGEMENT

I wish to express my sincere thanks to our respected Principal, Dr. Rajath Hegde, and deep
sense of gratitude to HOD, Dr. Juin Choudhary, MBA, Acharya Institute of Technology,
Bangalore for their kind support and encouragement in completion of the internship.

I would like to express my gratitude to my project external guide , Mr Balakrishna

Manja,Manglore Cashew Mangalore. His willingness motivated me and his guidance
contributed tremendously to this project work.

I am thankful to my internal guide Prof. Nethravathi N, Assistant Professor, Department of

MBA, Acharya Institute of Technology, for her support and guidance in carrying out this
report successfully.

I am grateful to all the Faculty Members of MBA Department for their knowledge and they
have imparted on me. I wish to express my heart full thanks to all my friends for supporting
and helping me through the completion of my internship.

Last but not the least, I would like to share my joy and success with all the people who have
helped me directly or indirectly in gaining new experience, confidence in total a new
dimension to prospective.

Place: KUNDAPURA
Date: 21/11/2023
 TABLE OF CONTENTS
No. Index Page No.

1 Chapter 1 9-13

1.1 Introduction about the internship 9

1.2 Industry Profile 10

2 Chapter 2 14-24

2.1 Organisation profile 14

2.2 Back ground 15

2.3 Nature of Business 15

2.4 Vision, Mission, Quality Policy 18

2.5 Product profile 19

2.6 Ownership Pattern 20

2.7 Future growth and prospects 22

3 Chapter 3 25-28

3.1 Mckensy’s 7s framework with reference to 25

organisation study
4 Chapter 4 28-30

4.1 SWOT Analysis 28

5 Chapter 5 31-46

5.1 Analysis of financial statement 32

6 Chapter 6 47

6.1 Learning experience 47

Bibliography 48

Annexure 49
 List of Tables and graphs
No. Table and Graph Page No.

5.1 Current Ratio 32

5.2 Quick Ratio 33

5.3 Working Capital Turnover Ratio 34

5.4 Fixed Asset Turnover Ratio 36

5.5 Capital Turnover Ratio 38

5.6 Debtors Turnover Ratio 40

5.7 Stock turnover Ratio 41

5.8 Gross Profit Ratio 42

5.9 Net profit Ratio 44

5.10 Operating profit Ratio 45

5.11 Ratio of current Asset to Fixed Asset 46

 EXECUTIVE SUMMARY

Mangalore Cashew Industry Siddapura is one of the small-scale industrial units of Udupi
District. It is incorporated as limited company and registered under Companies Act of 1956.
With a view to providing quality products at reasonable price. It is located in the area of
Siddapura and Udupi District. There is availability of abundant water, electricity and
infrastructure facilities.

At present company is manufacturing Cashew nuts. It has maintained the quality of products.
The promoters have the intention of extending the activities to other fields due to tremendous
scope for consumer goods and food products in this region. The production of this company
has good market in this region and the company is equipped with latest machinery and expertise
labour to make the project a success.

The Employee welfare work at providing such service, facilities and amenities which would
enable the worker or employee in industries to perform their work in healthy, congenial
surroundings .HR will be taking corrective actions to improve welfare facilities and satisfaction
level of employees. With these perspectives, the organisation study was done at Mangalore
Cashew Industry Pvt Ltd. and these details are discussed in the following sections.
 CHAPTER 1

INTRODUCTION ABOUT THE INTERNSHIP,

INDUSTRY PROFILE

1.1 Introduction
The main source for the company is to done more sales. Cashew is one of product which is
used in every season. So the sales are to increase for the maintaining the working capital
management in the firm. According to the concept the company has to maintain their liquidity
position and the assets always over the liabilities for smooth running of the business.

The various points are disclosing the study benefits,

• The company will remain the certain money for the future purpose and they have to
meet their expenses.
• The study will show the result of management efficiency in the business.
• The working capital management will tell that over investment in Current Assets may
leads to the reduced profitability due to cost of fund blocked, extra storing space
required, extra efforts for follow up and recovery required, possibility of malpractice
etc.
So the company has to maintain efficient working capital management in the concern and they
will use the fund effectively for day to day expenses. The decision making is one of the
important fact to maintain the working capital management in the company. Internship is
practical education. Through internship programmed intern acquire more knowledge of the job
and learn or sharpen the needed skills, attitudes and values associated with efficient
performance off their job. It has also helped me to improve their other personality attributes
such as get better oral and written communication, management, direction, time, and project
management skills.

1.2 Industry Profile

Industry is a place where production or manufacturing take place. It refers to the process of
purchasing the raw material, and that raw materials are converted into finished goods take
place. Industry is manufacturing of goods or services with in an economy. The major source of
income of company is the indicator of its relevant industry. When a large group has multiple
sources of revenue generation, it is considered to be working in different industries.
Manufacturing industry has become a key sector of production and labour in European and
North American countries. A small-scale industry is a firm created on a small budget or for a
small group of people.

A small-scale industry produces its goods using small machines, less power and hired labour.
It is located within a single place and produces goods for few people.

Small scale industries are easy to start and manage the given the minimal scale of production.
It plays a main role in the growth of the country. It contributes almost 40% of the gross
industrial value added in the Indian economy. By less capital intensive and high labour
absorption nature. Small scale industries sector has made considerable contribution to the
employment generation and industrialization. Under the changing economic scenario, SSI has
to face number of problems like large population, large scale of unemployment and
underemployment and scarcity of capital resources etc. The government has been providing
some special facilities through different policies and programs to overcome the problem and
for the growth and development of small-scale industries. The efforts of government have
resulted in the phenomenal increase in the number of unties in the industries. The government
also introduced various schemes and incentives for the promotion of SSIs. Constant support to
SSI sector by the government in terms of infrastructural development, fiscal and monetary
policies have helped to emerge as dynamic and vibrant sector of Indian economy.

CASHEWS PRODUCTION IN INDIA

• AREA AND PRODUCTION

The estimated area and production in the country during 1999-00 has been placed at
6.81 lakhs hectares with production amount 2.5 lakhs tones respectively. Its share in the world
production is 31%. It is one of the important commercial crop, so the production of cashew is
increasing rapidly. It is one of the exporting and also importing commodity

Kerala is the leading State, which has a share of over 60% in production and 30% of
the area under the crop in the country. During 1997-98 the production and area is increasing
enormously, in that time production is 130 M.T and area of production is 154 hectares, further
it increased to 409 hectares.

Karnataka ranked second in respect of area with a share of over 12% and occupied third place
in production with a share of 9.2%.

Andhra Pradesh, Tamil Nadu, Goa, Maharashtra, Orissa, West Bengal, Pondicherry and
Tripura are the important producing States in that order.

• DEVELOPMENT OF SCHEME
 A number of developmental schemes sponsored both by the Central and State
Government are in operation to increase production by bringing new area under cashew
plantations and by improving the yield in existing plantations. Multi State Cashew
Projects (MSCP) aided by World Bank is being implemented in the State of Kerala,
Karnataka, Andhra Pradesh and Orissa with the objectives of bringing 53,775 hectares
under the raw plantations and 7.50 hectares under the improved program of the existing
plantations.

• IMPORTS

The present production of raw cashew in the industry is not adequate to meet the
requirements, of cashew processing industry in the country. Against the total requirement of
the installed capacity to handle 5.50 lakh. tone of raw cashew in the industry. The present
availability of raw cashew is of the order of 1 lakh tones leaving there by more than 78%
capacity utilized. Under these circumstances the country has to meet its additional requirement
through imports or increased indigenous production through improvement in yield of existing
plantation or by bringing raw area under cashew crop.

Owing to decline on the production of raw material of cashew in the major producing
countries, the country is meeting a part of its requirements through import. There is a serious
problem to get supply of raw cashew in the international market.

CASHEW PRODUCTION IN KARNATAKA:

Cashew plantations on a large scale have been raised in the coastal districts of the
State viz., Uttara Kannada and Daksha Kannada since 1980 under the State plan and centrally
sponsored schemes. The areas where cashew plantations have been raised in these areas are
barren and lateritic. Initially cashew was planted as a soil conservation measure in these areas.
As the demand for cashew increased extensive areas of barren lands were utilized for cashew
cultivation.
 A progeny orchard of 40 hectares is being maintained under the Centrally Sponsored Scheme.
The yield form such a land was not satisfactory. Although cashew is a very hardy tree capable
of thriving in waste lands. There no other crops grow, it is observed that the tree responds very
well to richness of soil and abundance of soil moisture. The experience on the scientific aspects
of cashew production indicates that the improved farm techniques, such as cultural, manorial
and plant production treatment result in increasing the yield. The Manurial (Mangalore) have
shown that there is appreciable response in yield.

The poor yield is due to incidence of pests and deceases and it is estimated that there will be a
40% crop loss annually due to pests and deceases. The main pest is tea Mosquito and spraying
thrice, at the time of raw emergence of flushes, at the times of emergence of panicle and at the
time of fruit setting, has controlled the pest.

In the year 1968-69, a Centrally Sponsored Scheme a package program for manorial and
prophylactic treatment in older plantations was taken up and the scheme started functioning in
1972-73. in the same year the following programs were taken up under this Scheme for
increasing the yield of cashew from the plantations:

1. Maintenance of cashew plantations.

2. Schemes for establishment of Progeny Orchard, and
3. Scheme for expansion of area in cashew.

The Karnataka Cashew Development Corporation (KCDC) is implementing a package

program of intensive captivities in 8000 hectares of existing cashew plantation. This
corporation was emerged during 1978 with an authorized capital of Rs.200 lakhs.
 CHAPTER 2
ORGANIZATION PROFILE

2.1 Organisation profile or background

Mangalore Cashew Industries (MCI) is one of the pioneer cashew manufacturers of this region.
It was founded in 1977 by the great visionary, Late Sri. D. Narayan Kamath. Mr. D. Srinivas
Kamath who is now the Managing Partner of this partnership firm. It had been established with
a capital of Rs30,000 with the help of Mr. Vaman Kamath, Ramachandra Bhat, Girija Bhai,
Sundar Kamath, and Gopalakrishna Kamath. Today, it is a name to reckon with in the cashew
industry and a company that had the patronage of three generations of a respected family. It
has an annual turnover of over Rupees 90 million in national sales and exports, mainly to
countries like Japan, Australia, USA, UK, Netherlands and the Middle East.

Mangalore Cashew Industries (MCI) has established regional cashew procurement

centers all over the country and abroad. Since they believe that the first level of quality depends
on the raw materials, they take great care in procurement of raw cashew nuts in addition to
keeping a strict vigil at every stage of processing. For over a quarter of a century, Mangalore
Cashew Industries has earned an image for product quality which has come to be accepted as
the benchmark in global standards.

Mangalore Cashew Industries has 4 partnership firms in India (3 in Karnataka and 1 in

Maharashtra), with more than 2000 employees employed in the 4 plants and close to 250
employees in the Siddapura plant alone. Siddapura plant is the main centre where all the
decisions regarding the procurement of raw cashews and the distribution of the products (for
both domestic and international markets) are taken. Special care is taken on hygiene while
processing and packaging, in adherence to the guidelines of Cashew Export Inspection Agency.
Total quality management system as per the HACCP standards is adopted to match the
international quality standards.

2.2 Nature of Business

MCI is a cashew processing industry where the raw cashew kernels are processed to a
consumable form. The raw kernels are purchased from Kundapura, Mangalore and
neighbouring states like Goa, Maharashtra and Kerala. Bulk purchases are mainly made from
Kerala, because the raw materials from that region are easy to be processed and are of good
quality.

The Supplier relationship maintained by MCI is excellent. They have maintained relationship
with the same suppliers for over 25 years now. The raw materials are not available throughout
the year in India, but are seasonal. Hence to overcome this limitation, MCI was one of the first
few firms in India that started importing raw kernels from countries like Kenya, Tanzania and
Nigeria. The kernels that are imported are of low grades; hence the raw kernels obtained from
foreign countries are used for the production of low quality cashew nuts. The imported kernels
are less expensive compared to those bought within India. The company exports the cashew
kernels to USA, France, Egypt, Japan, Netherlands and Israel.

Objective of the MCI:

Our Objective at MCI Cashew processing is to extract tasty kernel from the raw nut and
bring it to you in different sizes and shapes. The cashew kernels are graded according to size,
colour and other characteristics.
 • To procure Raw Cashew nuts mainly from the local markets. So that the major benefits
of Cashew industry will go to concerned area.
• To produce almost all cashew products such as Cashew kernels, Cashew oils, Cashew
husk etc.
• Generation of employment opportunities in a large scale to the rural people.
• To see Cashew kernels more and more within states as well as in International markets

Logo and plant of the MCI:

Manufacturing Process:

The raw nuts purchased from the market or imported are dried in the yards by exposing the
nuts to heat of the sun. The moisture content of raw nuts is thus removed and the raw nuts are
packed in gunny bags of 80kgs each and stored in go downs.

Steaming:

The raw nuts are taken for process from the godown and they are steam treated for about an
hour and cooled in the atmosphere before they are taken to the cutting tables. When the nuts
achieve atmospheric temperature, they are cut by hand operated machines and the kernels are
separated. The kernels so separated are taken to a hot chamber where they are heated in trays
and the kernels are spread evenly in the trays. This process would take almost a day and the
kernels are left for cooling again.

1. Shelling:

Each cashew shell is split open and the cashew inside is immediately taken out. The brown
skin testa of the kernels is removed by hand and the white kernels are obtained.

2. Drying:

The skin on cashews in dried in an Owen at low heat for a few hours to loosen the skin.

3. Peeling:

The skin of each cashew is removed by hands and the cashew is simultaneously graded
according to the quality.

4. Grading:

The kernels so obtained are graded as 180, 240, 320 etc. and also as "Wholes", "Halves",
"Pieces" etc., etc. While the wholes have high value, the latter have lesser value. The figures
180, 240, 320 represent the number of counts each pound of kernel would have. In other words,
320 is smaller in size as compared to 180 grade. Even though there is no change in taste and
its nutritious value. Normally, there is a good demand for 180 counts within the country and
now at abroad also which commands good premium. Neverthless, others like 320 and 240 also
exported.

5.Packaging

The kernels are packed in metallic tins and before the tins are sealed, carbon dioxide is pumped
into the tins containing kernels withdrawing air from the tin and the process ensures avoidance
of kernels getting infected by fungus and the gas works as insecticide. Normally, such sealed
tins have six to eight months of life before which they are to be consumed. In the recent past,
the importers from abroad insist for plastic bag packing, flexi packing, instead of packing in
metallic tins. Of course, the plastic would be of a specific quality without the danger of causing
health hazards. Our cashews are packed in 50-pound (22.68 kg) multilayer barrier pouches in
a modified atmosphere of low oxygen and high carbon dioxide and nitrogen.

2.3 Vision mission, quality policy

Vision
To be a competent institution for providing policy, regulatory and technical advice for a
modern, efficient, and economically viable and sustainable cashew nut industry.

Mission
To promote, control and regulate all matters in the cashew industry in an efficient, effective
and fair manner. The Board will achieve this through delivery of services in the highest
standard of excellence to all stakeholders.
Quality policy
• They purchase good quality of raw cashews from other.
• In our endeavor for total customer satisfaction, we will control costs, improve
productivity and practice safety in all our activities.
• We have commitment to protect environment through education and spreading
awareness within the organization and to the stakeholders.
• It provides good quality of service to suppliers.

2.5 Products profile

W180

White whole – 180

‘W’ means whole. It comes in the first quality kernels. It looks like nice and it has white whole
on kernels. This is the king of cashew. It is very expensive. Its size is very large compare to
other kernels. Its count is 180 for 452 grams.
W210

White Wholes – 210

White 210 kernels have called as jumbo nuts. It comes in the first quality nuts. Its count is 210
for 452 grams. It is a nice nut and it contains white whole in the nut. Its size is smaller than
W180.

W240

White Wholes – 240

Its colour is white and it also looks very nice nuts. It is the first quality cashew kernel. It is
smaller than W210 nuts. That would produce 240 kernels for 452 grams.

W320

White Wholes – 320

It should be white in colour and free from black spots. It is smaller than W240. It produces 320
for 452 grams. It is the most popular among other cashew kernels.
W450

White Whole -450

It is smaller than W320. It produces 330 for 460 grams.

S180

Scorched Wholes – 180

These nuts white in colour. It is measured as 180 for 452 grams. In this type of nuts we can see
a lines pleat on the nuts.

S210

Scorched Wholes – 210

It also has some lines on its nuts. It is smaller than S180 kernels. It measured as 210 for 452
grams.
SSW

Scorched Wholes Seconds

Trade name is Scorched Wholes Seconds. Kernels may be over scorched, immature, discolored
and light blue. It is the smallest nuts than others. It is measure 350-450 for 452 grams.

DW

Dessert Wholes
It is the second quality of cashew kernels. It trade name is dessert Whole. It is called as ‘Black
nuts’, because it has some black on the nuts.

Splits
Split is the trade name of “S” grade kernels. It also comes in the first quality piece kernels. It
is also a two piece of nut, but it is smaller than JH nuts are broken naturally.

LWP
 Large White Pieces
It is the half of JH piece. It is also called as Four pieces nuts. Kernel are broken into more than
two pieces. Its trade name is large white pieces. It has a white in color.

BB

Baby Bits
It is also called as Baby Bits. It is the very smallest pieces in the cashew kernels. Its color is
white or light ash.

SWP

Small White Pieces

It is called as eight-piece nuts. It has 1/4th portion of two pieces. Small White piece is the trade
name of SWP. It is smaller than LWP.

DP
 Dessert pieces
Its trade name is Dim Piece. It looks like reddish colour. This comes in the second quality
cashew kernels.

2.5 Ownership pattern

The partnership is a relationship between persons which is established through an agreement
which may be oral or written. Team and condition upon which such a relationship is established
are contents of a partnership deed.
Partners of Mangalore Cashew Industries (MCI)
✓ Mr. D. Srinivas Kamath.
✓ Mr. D Vaman Kamath.
✓ Mr. D Gopalakrishna Kamath.
✓ Mr. D Manjunatha Kamath.
✓ Mr. D Vedavyasa Kamath.

All the members are having very experience in manufacturing of cashew, and all the partners
shared their knowledge and idea, and cooperate each other in their business. And they also
cooperate with their workers to run the business successfully and to undertake labour
satisfaction. All these partners have good name in surroundings of the Mangalore town in
cashew manufacturing.

2.6 Achievements/awards

• Leading manufacturing and exporter of Cashew kernels and Cashew Nut.

• Awarded for Export performance on national and state level by the Govt.
• Awarded by the FIEO, KLN foundation and chamber of commerce.
• International & National Level award for quality.

2.7 Future growth and prospects

The company is planning to set up a large unit or expand in next 2 years. Mangalore cashew
Industries is also planning to employ more and more skilled and qualified employees to work
more effectively, which would lead towards achievements of organizational goal. The company
is also planning to do foreign collaboration. By 2019-2020 Mangalore Cashew Industries is
planning to earn 1000 crores.
They wanted to establish new coconut oil factory in the area.
They planned to buy new machineries for grading purpose.
They are possibility of increasing the area of operation.
They planned to donation to poor students.
The company is planning to get into the manufacture of all kind of cashew components and
Equipment’s, by producing it would lead step towards getting into the large scale operation.
 CHAPTER 3

Mckensy’s 7S framework study on cashew

industry.

Mckensy’s 7S framework study on cashew industry.

McKensey 7s model is a tool that analyzes firm’s organizational design by looking at 7 key
internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to
identify if they are effectively aligned and allow organization to achieve its objectives
.

McKensey 7s model was developed in 1980s by McKensey consultants Tom Peters, Robert
Waterman and Julien Philips with a help from Richard Pascale and Anthony G. Athos. Since
the introduction, the model has been widely used by academics and practitioners and remains
one of the most popular strategic planning tools

Under McKensey model, represents the connections between seven areas and divides them into
‘Soft Ss’ and ‘Hard Ss’. The shape of the model emphasizes interconnectedness of the
elements. Mckensy’s 7s factors

Hard S Soft S
Strategy Style
Structure Staff
Systems Skills
Shared values
 1. Strategy
Strategy which are framed by companies to achieve a competitive advantage in the market.
strategies are formulated by the company to achieve a competitive advantage.
➢ Total business integrity.
➢ Largest production with largest client
2. Structure
Structure is an organizational chart of the firm. Structure is always visible & can change
elements.
The hierarchy of MCI is very strong in nature.
➢ Strong hierarchy
3. Systems

Systems are the processes and procedures of the cashew industry, which reveal business’ daily
activities and how decisions are made.

➢ Management systems
➢ Budget and measurement systems
4. Skills

Skills are the abilities that firm’s employees perform very well. They also include capabilities
and competences.

➢ Knowledge reuse
➢ Capacity to standardise
5. Staff

Staff element is concerned with what type and how many employees and organization will
need and how they will be recruited, trained, motivated and rewarded.

➢ Promote from within/up

➢ Frequent appraisals
6. Style

Style represents the way the company is managed by top-level managers, how they interact,
what actions do they take and their symbolic value.

➢ Flexible
➢ Disciplined
7. Shared value
They are norms & standards which will guide employees behaviour & company action.

CHAPTER 4
SOWT Analysis

SWOT Analysis on cashew industry

SWOT analysis was developed by Albert Humphrey; it is a technique which is considered

appropriate for the prior stages of planning. However, it can be used at all stages of an cashew
industry’s functions. SWOT analysis includes identifying and measuring the cashew industry’s
strengths, weaknesses, opportunities and threats. It involves the identification of the internal
resources and capabilities (strengths and Weaknesses) and the external environmental factors
(opportunities and threats).

SWOT is the acronym for “Strength Weakness Opportunity Threat” which outlines the current
position of a cashew industry. It identifies that whether a company is in. a good or bad market
position. While the strengths and weaknesses are internal factors, the opportunities and threats
are external to the cashew industry. Analysing all these give a complete perspective to the
managers regarding the external factors that influence the cashew industry or may influence in
future. This analysis also indicates the faults in the cashew industry that are to be corrected.
Hence, SWOT analysis plays a vital role 1n formulating suitable strategies for the Cashew
industry.

Components of SWOT Analysis on Cashew industry

1. Strength
2. Weaknesses
3. Opportunities
4. Threat

1. Strength:
These are the factors that provide competitive advantage to the cashew industry. These factors
collectively may allow cashew industry to bring change in cashew industry. These factors can
be different for different cashew industries. These can be resources, skills, etc.

➢ Better relationships with the customers

➢ Locality of plant is the in good area.

➢ Man powers are available near the factory area.

➢ Transportation facilities to its workers.

➢ Good relationship with the customers and marketing of products

➢ Skilled labours and machine operators.

➢ A-1 Product cashew industry has a good brand image.

2. Weakness:

Weaknesses are the factors that limit the growth of company or restrict the company from
moving in a desired direction. These factors also hinder the cashew industry from
achieving success through the internal capabilities.

➢ Lack advertisement

➢ Operative area is limited

➢ Competitors are more in local areas.

➢ Lack of latest technologies.

 ➢ High maintenance cost.

➢ Advertising are done through only news papers.

➢ Raw cashew purchase from other state.

3. Opportunity:

An opportunity is a major favourable situation in the firm’s environment the industry should
build its production capacity to meet the upward moving demand, both for domestic and
international markets.

➢ Good availability of foreign customers.

➢ An increasing for cashew nuts on the world markets

➢ Increasing demand by the local processing industries.

4. Threats

Threats are the external unfavourable conditions. They act as barrier for the cashew industry in
achieving its desired market position.

➢ High number of competitors.

➢ Increasing in tax rates.

➢ Increasing the competitors in the areas.

 CHAPTER 5
ANALYSIS OF FINANCIAL STATEMENT

Ratio Analysis:

Financial statements contain a lot of figures or items indicating business results and the
financial position of the business concern. But the figures or items given in the financial
statements will not be of much use, if they are considered individually. They will be more
useful only when they are compared with other relevant figures.

5.1 Current Ratio:

This ratio is also called “working capital ratio”. It is used to assess the short term financial
position of the business concern. In other word it is an indicator of the company’s ability to
meet its short-term obligations. It matches the total current asset of the company against its
current liabilities. It indicates the amount of current assets available for repayment of current
liabilities. Higher the ratio, the greater is the short term solvency of a firm and vice a versa

𝑪𝒖𝒓𝒓𝒆𝒏𝒕𝑨𝒔𝒔𝒆𝒕𝒔
𝑪𝒖𝒓𝒓𝒆𝒏𝒕𝑹𝒂𝒕𝒊𝒐 =
𝑪𝒖𝒓𝒓𝒆𝒏𝒕𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔

Table showing Current Ratio:

 YEAR Current Asset Current Liability RATIO

2020-21 121137628 110752430 1.09

2021-22 177609036 154324079 1.15

2022-23 247415799 219281227 1.12

Graph showing Current Ratio:

CURRENT RATIO
1.16
1.15
1.15
1.14
1.13
1.12
1.12
1.11 RATIO
1.1
1.09
1.09
1.08
1.07
1.06

The higher the ratio, the more liquid the company is. The standard current ratio should be 2:1.
It means the current assets of the firm are double the current liabilities. Here in 2010-2011 the
ratio was 1.09, in 2021-22 it was 1.15 and in 2022-23 it was 1.12. This indicates that the firm
is not quite comfortable in meeting its obligation. The company have to maintain the more
asset than liabilities.

5.2 Quick Ratio:

This ratio is also known as “Liquid ratio or Acid test ratio”. It is only a variation of current
ratio. Like current ratio, it measures the ability of the company to meets its current obligations.
It explains the relationship between liquid assets and current liabilities.

𝑸𝒖𝒊𝒄𝒌𝑨𝒔𝒔𝒆𝒕𝒔
𝑸𝒖𝒊𝒄𝒌𝑹𝒂𝒕𝒊𝒐 =
𝑸𝒖𝒊𝒄𝒌𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔

Table showing the Liquid Ratio (Acid Test Ratio):

YEAR Liquid Asset Current Liability RATIO

2020-21 37947385 110752430 0.34

2021-22 36946268 154324079 0.24

2022-23 47056638 219281227 0.21

Graph showing the Liquid Ratio (Acid Test Ratio):

 LIQUID RATIO
0.4
0.34
0.35
0.3
0.24
0.25 0.21
0.2 RATIO
0.15
0.1
0.05
0

In the above ratio the quick ratio showing decreases. In the year 2020-21 it is 0.34, in 2021-22
it is 0.24 and in 2022-23 it was 0.21. so in 2020-21 it was more compared to last two years.
The liquid ratio of 1:1 usually considered as to be good. Here the company not having the liquid
asset as per 1:1. So it is not satisfactory.

5.3 Working Capital Turnover Ratio:

Working capital means excess of current assets over current liabilities. Working capital is
closely related to sales. Working capital turnover ratio indicates the number of times working
capital is converted into cash. Working capital of a concern is directly related to sales. The
current assets like debtors, bill receivables, cash, stock etc, change with the increase or decrease
in sales.

Net Sales
Working Capital Turnover Ratio= ----------------------------------
Net working capital

Table showing Working Capital Turnover Ratio:

 YEAR Net Sales Working Capital RATIO

2020-21 423297651 10385198 40.76

2021-22 345896754 23284957 14.85

2022-23 386555286 28134572 13.7

Graph showing Working Capital Turnover Ratio:

WORKING CAPITAL TURNOVER

RATIO
60
40.76
40
RATIO
20 14.85 13.7

The graph is showing the working capital turnover ratio. In the working capital turnover
ratio of the year 2020-21 it was 40.76, in 2021-22 it is 14.85 and in the year 13.70. So in 2020-
21 it has more working capital. The working capital turnover ratio was decreased due to
increase in current liability and the company has to increase the working capital for the day to
day transaction.

5.4 Fixed Asset Turnover Ratio:

Fixed asset turnover ratio compares the sales revenue a company to its fixed assets. This ratio
tells us how effectively and efficiently a company is using its fixed assets to generate revenues.
This ratio indicates the productivity of fixed assets in generating revenues. If a company has a
high fixed asset turnover ratio, it shows that the company is efficient at managing its fixed
assets. Fixed assets are important because they usually represent the largest component of total
assets.

Sales
 Fixed asset turnover ratio= -----------------------------------------------

Net Fixed Asset

Table showing Fixed Asset turnover ratio:

YEAR Sales Net Fixed Asset RATIO

2020-21 423297651 27228072 15.5

2021-22 345896754 27971609 12.3

2022-23 386555289 26302175 14.6

Graph showing Fixed Asset turnover ratio:

FIXED ASSET TURNOVER RATIO

18
15.5
16 14.6
14
12.3
12

10
RATIO
8

0
 The above graph is showing the Fixed Asset turnover ratio is in the year 2020-21 is
15.5, in 2021-22 it is 12.3 and in 2022-23 it is 14.6 in. In 2020-21 company having more fixed
asset. The company has the decrease in the fixed asset in 2021-22 but they recovering it.

5.5 Capital Turnover Ratio:

This Ratio shows the efficiency of capital employed in the business by computing how many
times capital is turned over in a started period. This ratio ensures whether the capital employed
has been effectively used or not. It also shows the profitability and efficiency of the
management. Higher the ratio more efficient rotation of capital employed and a consequence,
higher profitability.

Sales

Capital Turnover Ratio= -------------------------

Capital Employed

Table Showing Capital Turnover Ratio:

YEAR Sales Capital Employed RATIO

2020-21 423297651 37613270 11.2

2021-22 345896754 51256566 6.7

2022-23 386555289 54436747 7.0

Graph Showing Capital Turnover Ratio:

CAPITAL TURNOVER RATIO

12 11.2

10

8
6.7 7

6 RATIO

The capital turnover ratio is showing decrease in above graph. In the year 2020-21 it is
11.2 and in the year 2021-22 it is 6.7 and again in 2022-23 it is 7. The company having less
capital turnover in 2021-22 due to less sales compared to 2020-21.

5.6 Debtors Turnover Ratio:

Receivable turnover ratio provides relationship between credit sales and receivables of a firm.
Debtors’ turnover ratio is determined by dividing the net credit sales by average debtors
outstanding during the years.
 Sales
Debtor’s Turnover Ratio =
Average Account Receivables

Table showing Debtor Turnover ratio:

YEAR Net Credit Sales Avg. Receivables RATIO

2020-21 423297651 37294232 11.3

2021-22 345896754 36531722 9.47

2022-23 386555286 46566015 8.3

Graph showing Debtor Turnover ratio:

 DEBTOR TURNOVER RATIO
11.3
12

10 9.47

8.3
8

6 RATIO

The graph is showing the 3 years debtors Turnover ratio. It is showing decrease in above
3 years. In the year 2020-21 it is 11.3, in 2021-22 it is 9.47 and in 2022-23 it is 8.3. So in the
2021-22 the company has the more turnover ratio. The fall in the is not significant for debtors.
In the year 2020-21 was has more ratio for debtors.

5.7 Stock Turnover Ratio:

This ratio is also known as “inventory turnover ratio” or “stock velocity ratio” it
established relationship between average stock at cost and coat of goods sold. If there is no
employed to measure how quickly stock is converted into sales. Higher the ratio, the better it
is, since it indicates that more sales are being made by a rupee of investment in stock.

Cost of Goods sold

Stock turnover Ratio = --------------------------------------------------

Average Stock
Table showing Stock Turnover Ratio:

YEAR Cost of Goods sold Average Stock at cost RATIO

2020-21 379332020 9511068 3.98

2021-22 289658095 104287719 2.77

2022-23 323501483 159990217 2.02

Graph showing Stock Turnover Ratio

STOCK TURNOVER RATIO

4.5
3.98
4

3.5
2.77
3

2.5
2.02 RATIO
2

1.5

0.5

The graph is showing the stock turnover ratio. The ratio was showing decrease in ratios.
In the year 2020-21 it was 3.98, in 2021-22 it is 2.77 and in the year 2022-23 2.02. So in the
year 2020-21 having more stock. The company has to maintain the effective stock for smooth
process of business.
5.8 Gross Profit Ratio:

This ratio is known as “Gross margin ratio” or “Trading margin ratio”. It shows the
relationship between the gross profit to net sales and generally expressed in percentage. In other
words, it expresses the gross margin as a percentage of sales.

Gross Profit

Gross Profit Ratio= ------------------------------------------ ×100

Net Sales

Table showing Gross Profit Ratio:

YEAR Gross Profit Net Sales RATIO

2020-21 43695630 423297651 10.3

2021-22 56238658 345896754 16.2

2022-23 63053806 386555289 16.3

Graph showing Gross profit Ratio:

GROSS PROFIT RATIO

20
16.2 16.3
15
10.3
10 RATIO

0
The graph is showing the gross profit ratio. Gross profit ratio indicates the average margin
products sold. In this Gross profit ratio it was increasing. The ratio is in the year 2020-21 it is
10.13. In 2021-22 it is 16.2 and in 2022-23 it is 16.3 it showing more compared to the above
years.in the there is a efficiency in management. The gross profit ratio was important to meet
the direct expenses of the company. So the company maintaining the gross profit efficiently.

5.9 Net Profit Ratio:

This ratio is also known as “the net profit to sales ratio” or “net profit margin”. It
measures the rate of the net profit per unit of sales. It is determined by dividing the net profit
to net sales for the period.

Net Profit

Net profit ratio =-------------------------------------------------×100

Net Sales

Table showing Net Profit Ratio:

YEAR Net Profit After Tax Net Sales RATIO

2020-21 8385532 423297651 1.98

2021-22 12510520 345896754 3.61

2022-23 9052324 386555286 2.34

Graph showing Net profit Ratio:

NET PROFIT RATIO

4
3.61
3.5

2.5 2.34
1.98
2 RATIO

1.5

0.5

Above graph is showing the Net Profit Ratio of 3 years from 2020-21 to 2022-23. In
the Net Profit Ratio in the year 2021-22 showing 1.98, in 2021-22 it is 3.61 and in 2022-23 it
is 2.34. In the year 2021-22 the company in high profit compared next year’s profit. The net
profit ratio was decreasing because there is a investment in the financial year for the purpose
of business.

5.10 Operating Profit Ratio:

Operating profit ratio is a variation of net profit ratio. It measures the relationship
between operating profits and sales. It is calculated by subtracting the operating expenses that
include the cost of goods sold, office and administration, selling and distribution expenses
relating to the business.

Operating Profit

Operating profit Ratio =--------------------------------------------×100

Net Sales
Table showing Operating Profit Ratio:

YEAR Operating Profit Net Sales RATIO

2020-21 66393031 423297651 1.56

2021-22 12966882 345896754 3.74

2022-23 18450871 386555289 4.77

Graph showing Operating Profit Ratio:

OPERATING PROFIT RATIO

6

5 4.77

4 3.74

3 RATIO

2 1.56

The operating profit ratio is increased year by year. The ratio is showing hike in every year. In
the year 2020-21 it is 1.56, in 2021-22 it is 3.74 and in the year 2012-2013 it is 4.77. So the
company has the better operational efficiency.
5.11 Ratio of Current Asset to Fixed Asset:

This ratio establishes relationship between fixed asset and current asset. A decrease in
this ratio means a heavy investment on debtors and stocks or that fixed asset more intensively
used. If current asset increase with the corresponding increase in profit, it show that the
business is expanding.

Fixed Asset

Ratio to Current Asset to Fixed Asset= ------------------------------

Current Asset

Table showing the Ratio to Current to Fixed Asset:

YEAR Fixed Asset Current Asset RATIO

2020-21 27228072 121137628 0.22

2021-22 27971609 177609036 0.15

2022-23 26302176 247415799 0.11

Graph showing the Ratio to Current to Fixed Asset:

RATIO TO CURRENT ASSET TO FIXED

ASSET
0.11
0.15
0.22

0 0.05 0.1 0.15 0.2 0.25

RATIO

The graph is showing the ratio of current to fixed asset of 3 years. In the ratio of current asset
to fixed asset the ratio is decreasing. In the year 2020-21 it is 0.22, in 2021-22 it is 0.15 and
in the year 2022-23 it is 0.11. The current asset is increasing it Shows Company in profit. The
company is having a view to increase the current asset for the future.
 CHAPTER 6
LEARNING EXPERIENCE

LEARNING EXPERIENCE

LEARNING EXPERIENCE: -
Here I DEEKSHITH got knowledge about how organization works or carries on
its activities and supporting activities.

How Punctuality –here they are very strict about the working hours even for training students
also.
How communication takes place between the Management & Employees.
How they train their workers or employees on the job and off the job.
Work flow, what are the barriers in work follow and how to eliminate or reduce the barriers.
 BIBLIOGRAPHY

Books
❖ Pandey I.M, Financial Management (Ninth Edition)”, Vikas Publishing House PVT
LTD, New Delhi,2006.
❖ Khan & Jain, Basis Financial Management, (4th Edition) Tata Me Graw Hill
Publications New Delhi,
❖ Khan & Jain, Basis Financial Management, (4th Edition) Tata Me Graw Hill, New
Delhi.
❖ A Murthy and S Guruswamy Management Accounting (2nd Edition), Tata Me Graw
Hill Publications New Delhi.

Websites:
www.mangalorecashews.com

www.google.com

www.linkedin.com
 Annexure
Balance sheet of Mangalore Cashew Industries

PARTICULARS 2020-21 2021-22 2022-23

A) Current Assets:

Cash and bank Balance 653152.60 414544.61 490622.60

Sundry debtors 37294231.88 36531722.92 46566014.84

Stock in trade 83190242.90 140662768.16 200359160.73

Assets:

Fixed Asset 27228072.35 27971609.28 26302175.43

Investments:

Deposits and Investments 10117915.80 22020039.97 26597199.75

Others:

Vat receivables 204315.46 204315.46 204315.46

Vat under protest 786051 786051 786051

Finance suspense charges 128040 48844 7577

Advances 322498 2931406 -

159924518.99 231567301.40 301370536.81

Liabilities:

Loan and Advances 100867918.50 15399079.08 215302559

Partners’ capital A/c 40597000 54597000 54597000

Partners current a/c 8485088.97 12112271.30 27417310.96

Current Liabilities

Sundry creditors 9260294 9295561.25 2186552.00

Outstanding expenses 714217.51 1163389.97 1867114.72

159924518.99 231567301.40 301370536.81

 Profit and loss account of Mangalore Cashew Industries

Particular 2020-21 2021-22 2022-23

Net Sales 423297651 345896754 386555286

Less: cost of goods 379332020 289658095 323501483

sold

Gross profit 43695630 56238658 63053806

Less: operating (22697401) 43271777 44602935

expenses

Operating profit 66393031 12966882 18450871

Add: non-operating
income

Less: non-operating 58007499 456362 9398547

expenses

Net Profit 8385532 12510520 9052324