Vimal Dairy Mba

A PROJECT REPORT ON RATIO ANALYSIS OF VIMAL DAIRY LTD, PALAVASANA
BY :
SUBMITTED BY:-
GUIDED
PATEL DHAVAL R Mr.Jignesh pandya MBA-II ROLL NO - 12
SUBMITTED TO:SWAMI VIVEKANAND MBA COLLEGE, VEDA AFFILIATED TO:GUJARAT TECHNOLOGY UNIVERCITY, AHMEDABAD Academic year-2010-11
SWAMI VIVEKANAND MBA COLLEGE, VEDA
PREFACE
In this era of globalization where every moment the world is moving one step ahead, so for a management student M.B.A program has become a key to success. This course cultivates skills and knowledge in students so that they have to ability to think differently to be a successful manager so that they compete this global market. Now a days, Management course are provide managerial knowledge in which they provide theoretical knowledge and other is practical knowledge. A classroom teaching gives the theoretical knowledge while industrial training gives an opportunity to take knowledge of practical aspects. I am studying in M.B.A SEM II., in which we are required to prepare grand project report. It was wonderful experience during the industrial training and I have come to know that there is big gape between theoretical and practical knowledge that I learnt in practically.
I have selected VIMAL
DAIRY
LTD MEHSANA for practical DAIRY LTD
company all over. It is very beneficial to the many company and dairy. It was a good experience to know the practical site of VIMAL MEHSANA industries. I have tried my almost efforts to present this
report. If I had made any mistake or written any wrong information which has been unclosed in this report, I ask your pardon.
I have prepared the report of VIMAL
DAIRY LTD
MEHSANA on my belief, idea, understanding and observation. I have tried to comprise all the important information in presenting report.
ACKNOWLEDGEMENT
I am over whelmed while expressing my sense of gratitude towards all those who helped and guided me during the course of this project report. Personally I am thankful to SWAMI VIVEKANAND MBA COLLEGE that I had the opportunity be involved in such industrial training experience of VIMAL DAIRY LTD. MEHSANA . I am sure this report and work behind it would be appreciated by all concern. I am really thankful to VIMAL DAIRY LTD MEHSANA for
providing co-operation and giving me a fundamental information about project. I am also thankful to managing director who gave me the permission for training in the company. I am also thankful to mayur sir who providing information regarding company. I am very thankful to our Head of department Mr.APOORVA RAVAL and my project guide MR.JIGNESH PANDYA for providing their better co-operation and assistance in preparing my dream project report. Last but not the least I would like to think those who helped me directly or indirectly in this academic endeavor.
PATEL DHAVAL R
EXECUTIVE SUMMARY
I visited Vimal Dairy ltd. I am my great experience to get knowledge what happened in real life of business. In production department, I can know the products, production process, and quality policy of the Vimal Dairy ltd. I can also know that which kind of facilities provided to the workers by the Vimal Dairy ltd. In marketing department I can know the marketing, marketing structure, export of the company product and pricing policy.
The dairy has not increased its authorized capital during the year. But in this year dairy can change its authorized capital of Rs 77699697. The subscription of share capital is increased capital is increased during the year and stood at 25 lakhs as on 31/3/2009.Thus the union is going to reach at the fully subscription of authorized capital. The union is also prepares a new plant with newly adopted technology.
In finance department, I can know that the finance and finance structure of the company. In this report the make the different types of
the ratios which show the good or bad position of the business. And we find the many types of the ratio in which included the liquidity ratio, leverage ratio, coverage ratio. This all the ratio the liquidity ratio helps to know the company is able to their liquidity or not.
During the year 2008-2009 the dairy has made less growth compare year 2007-2008, the net profit is increased to Rs 5188123 at 2009 form 6300501 at 2008 during the year. The purchasing expenses in 2009 are higher than previous year but the operating expenses are decreased which, helps to generate more revenue.
The profitability ratio shows the profitability of the firm as well as the leverage ratio is also helps to the firms return in their business. After the entire ratio analyzed we know the firms financial position is quit good.
For preparing the project report we use the annual report as well as the book of financial management and also use the book of company account and I also used the web site of the company.
CONTENT
Sr.no.
1 1.1 1.2 1.3
Particular
General information History & development Introduction of company Existing managing body
Page no.
1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 2.6 3 3.1 3.2 3.2.1
Organization chart Plant lay-out chart Finance department Introduction Capital structure Financial position Loan chart Reserve & surpluse Profit chart Ratio analysis Meaning & significance Study on ratio analysis Balance sheet ratio
-Current ratio -Liquid ratio -Proprietary ratio -Cash ratio -Networking capital ratio 3.2.2 Revenue statement ratio
-Gross profit ratio -Net profit ratio -Stock turnover ratio -Expenses ratio 3.2.3 Composite ratio
-Return on capital employed ratio -Return o shareholder funds ratio -Debtors ratio -Total asset turnover ratio
-Debtor turnover ratio -Working capital turnover ratio 4 5 6 7 Suggestion Conclusion Bibliography Annexure
HISTORY & DEVELOPMENT
Vimal Dairy Ltd. Comes in to existence on 30th June 1995. under the name of Vimal Dairy there are many other companies besides Vimal Dairy Ltd. And jointly they are well known as Vimal group. The main founder of Vimal group of companies is Mr. Chandubhai .I .Patel
The name of these companies as on their generation is :

Vimal Cables Ltd. Vimal Pumps Pvt. Ltd. Vimal Paints Ltd. Vimal Oil & Food Ltd.
Vimal Dairy Ltd. Vimal Microns Ltd. Mr. Chandubhai Patel has started Vimal electric company as partnership firm in 1978. This firm was manufacturing Capacitor, boosters and transformers. The ancillary item of submersible pump i.e. PVC winding wires and three core flat cable , power control cables were introduces in market by formatting a private limited company, under the name of Vimal cables ltd. They introduced submersible pump in the market under the brand name of Vimal pumps by forming a private Itd. Company Vimal pumps Pvt. Ltd. In 1989, they started Vimal paint to manufacture different parts of industries and decorative paints. In North Gujarat , rapeseeds are available in bulk and consumption of edible oil is mire in Gujarat. Looking to the heavy demand of refined oil , they introduced cottonseeds and reposed oil under the name of Vimal oil & food ltd.
INTRODUCTION TO COMPANY
In company profile, I have some general information about history of the company mission and goal of the company, auditors and bankers of the company. I also learn the managerial function of the entire department. In finance department I have information of financial planning, capital structure and capitalization of the company. I also have the information regarding the depreciation policy and credit policy of the company VIMAL Dairy can meet with future challenges to collect the entire milk production in district, processing and manufacturer quality milk products to
satisfy customers. Altogether Banas-I and Banas-II Dairy plant (6.5 lacks liters processing capacity) Chilling Center (Khimana, Dhanera ,Tharad, Radhanpur and Danta) Banas dairy able to process 21 lacks liters of milk per day THE NAME OF THIS COMPANIES AS ON THEIR GENERATION IS :
VIMAL DAIRY LTD. VIMAL PAINTS. VIMAL MICRONS LTD. VIMAL OIL & FOOD LTD. VIMAL PUMPS PVT LTD VIMAL CABLE LTD
PRODUCT NAME:
MILK GHEE BUTTER BUTTER MILK MILK POWDER CHEESE
COMPITITORS
Doodh Sagar dairy Mother dairy Saradar dairy Amul
COLLECT THE MILK PER DAY AS UNDER

Tharad Patan Disha TOTAL 40,000 ltr 45,000 ltr. 30,000 ltr. 1, 15,000 ltr.
REGISTERED OFFICE:
"Vimal House" 4th floor ERITAGE Nr Grand Bhagwati, S.G. Highway,Ahmedabad
CORPORATE OFFICE :
1, National Chambers 1st floor Opp, Mangal Murti Complex, Ashram Road, Ahmedabad 380009
PLANT:
Nr. Palavasana , Rly crossing, Highway, Mehsana - 384002
EXISTING MANAGING BODY
Chairman
: Shri Chandubhai I. Patel
Whole time Director Technical director Chief Accountant
: Shri Jayeshbhai C Patel : Shri C.V.Patel : Shri Mahendrabhai Patel
Marketing Manager Company secretary General manager Manager (procurement) Production manager Manager (R&D,D.C)
: Shri Dashrathbhai Patel : Shri Jigneshbhai Maniyar : Shri Dilipbhai J.Patel : Ashokbhai Patel : Shri Dineshbhai Pandya : Shri D.B.Patel
ORGANIZATION CHART
PLANT LAYOUT CHART
LOANS :
Vimal Dairy gets loans from well known banks by mortgage their assets & personal guarantee.
LIST OF BANKS :
1. Bank of India (cash credit) 2. Dena Bank (cash credit) 3. Meh.. Dist. Co.op.Bank Ltd. 4. Mehsana Urban Bank Term Loan A/c.
FINANCE DEPARTMENT
INTRODUCTION
Finance is the most important thinking, which is concerned with the planning and controlling of the firms financial sources. As a separate activity, it is recent origin. It is the lifeblood of any business. Without capital nothing can take place. At every stapes of business and manufacturing process or selling of finished goods finance is most required. Money is the lifeblood of modern business. Money is required purchase expansive machinery and also for day-to-day expanses on raw material and operational and administrative need business. Execution of expansion planned and modernization programmed are not possible without adequate finance. The manager performed by the finance personnel directly influences the efficiency or production and marketing cooperation. Finance management parish states in modern money using economy finance may be defined as the provision of money at the time it wanted. Vimal Dairy ltd. has given due attention and importance to finance and so that it has a setup own separate finance department. Which is performing the function of procurement of funds and allocation of these funds in to purchase of fixed assets as well as for meeting day-to-day requirement? It also transaction of receipt and payment and also prepares annual report.
CAPITAL STRUCTURE
Capital structure refers to the mix of long term sources of funds, such as debenture, long term debt preference share capital and equity share capital including reserve & surplus. With the unplanned capital structure a company cannot succeed. Therefore its being increasingly released that a company should plan its capital structure to maximize the use of funds and to be able to adapt more easily to changing conditions. The financial manager should plan optimum capital structure for his company. Should develop an appropriate capital structure for its company, the financial manager should aim at maximizing the long-term market price per source.
YEAR
Share Capital Reserve & Surplus Secured Loan Unsecured Loan
2007-08
26,050,000 36,011,348 112,250,207 40,230,185
2008-09
28,550,000 43,886,190 142,643,786 96,973,772
2009-10
28,550,000 49,149,697 166,557,299 69,254,926
CAPITAL STRUCTURE GRAPH

180,000,000 160,000,000 140,000,000 120,000,000 100,000,000 8 0,000,0 00 6 0,000,0 00 4 0,000,0 00 2 0,000,0 00 0 2007-08 2008 -09 2009-10 S hareCapital Reserve& S urplus S ecured L oan Unsecured L oan
FINANCIAL POSITION
LOAN CHART
PARTICULARS AMOUNT (Rs.) AMOUNT (Rs.) AMOUNT (Rs.)
2007-2008
Owned capital Reserve and surplus Unsecured loan Secured loan Sales Fixed assets Inventories Investment Debtors Loans and advances Cash and bank Current liabilities Working capital Wages and salaries Marketing selling & advertisement expenses Profit before tax Profit after tax 26,050,000 36,011,348 40,230,185 112,250,207 473,587,743 54,655,119 159,106,315 1,503,100 21,562,764 12,175,282 10,334,318 38,043,398 110,996,223 4,466,510 15,726,230 6,822,251 3,610,422
2008-2009
28,550,000 43,886,190 96,973,772 142,643,786 594,646,535 66,055,080 226,472,904 14,231,077 26,083,598 12,375,477 18,644,550 44,441,402 119,373,462 5,839,318 16,947,999 5,188,123 3,149,905
2009-10
28,550,000 49,149,697 69,254,926 166,557,299 765,445,123 69,449,166 221,342,966 14,231,077 27,620,336 19,359,725 4,930,348 37,308,551 149,592,430 8,262,976 18,974,140 6,300,501 5,538,572
YEAR YEAR SECURED LOAN UNSECURED LOAN RESERVE & SURPLUS
2007-08 (Rs.) 2007-08 112,250,207 (Rs.) 40,230,185 36,011,348
2008-09 (Rs.) 2008-09 142,643,786 (Rs.) 96,973,772 43,886,190
200910 2009-10 (Rs.) 166,557,299 (Rs.) 69,254,926 49,149,697
180000000 160000000 140000000 120000000 100000000 80000000 60000000 40000000 20000000 0
SECURED LOAN UNSECURED LOAN
2007- 2008- 200908 09 10
RESERVE & SURPLUS CHART
50000000 45000000 40000000 35000000 30000000 25000000 20000000 15000000 10000000 5000000 0
RESERVE & SURPLUS
2007-08 2008-09 2009-10
PROFIT CHART
YEAR
2007-08 (Rs.)
2008-09 (Rs.) 3,149,905 5,188,123
2009-10 (Rs.) 5,538,572 6,300,501
PROFIT AFTER TAX PROFIT BEFORE TAX
3,610,422 6,822,251
MEANING OF RATIO ANALYSIS

Ratio analysis among the most popular and widely used tools of financial analysis. Ratios are tools providing us with clues and symptoms of underlying conditions. Analysis of a ratio reveals important relations and bases of comparison in uncovering conditions and trends difficult to detect by inspecting individual components comprising the ratio.
SIGNIFICANCE OF RATIO ANALYSIS

The accounting ratios offer the following advantages: Help in financial statements analysis: It is easy to understand the financial position of a business enterprise in respect of short term solvency, capital structure position etc., with the help of various ratios. The users can also gain by knowing the profitability ratios of the firm.
Help in simplifying accounting figures: The single figures in terms of absolute amounts such Rs. 10 lakhs income, Rs. 50 lakhs sales etc., are not much use. But they become important when relationships are established, say for example, between gross profit and sales or net profits and capital employed and so on.
Help in calculating the operating efficiency of the business enterprise: Ratios enable the users of financial information to determine operating efficiency of a business firm by relating the profit figure to the capital employed for a given period.
Help in locating weak points of the firm:

Ratio analysis would pin point the deficiency of various departments, or branches of a business unit even though the overall performance is satisfactory.
Help in inter-firm and inter-period comparisons: A firm can compare its results not only with other firms in the same industry but also its own performance over a period of time with the help of ratio analysis.
Help in forecasting: Accounting ratio calculated and tabulated for a number of years enable the users of financial information to determine the future results on the ba
STUDY ON RATIO ANALYSIS
BALANCE SHEET RATIO: When two items or groups of items appearing in the balance sheet are compared the ratio so, obtained is a balance sheet ratio. E.g. ratio establishing relationship between current assets and current liabilities is a balance sheet ratio.
Current ratio Liquid ratio Proprietary ratio Cash ratio Net working capital ratio
CURRENT RATIO: -
The current ratio measures the ability of the firm to meets its current liabilities current assets get converted into cash in the operating cycle of the firm and provide the funds needed to pay current liabilities. Apparently, the higher the ratio, the greater the short term solvency.
CURRENT RATIO: -
CURRENT ASSETS CURRENT LIABILITIES
YEAR
Current Assets Current Liabilities
2007-08
203,178,679 38,043,398
2008-09
283,576,529 44,441,402
2009-10
273,253,375 37,308,551
Ratio
5.34 : 1
6.38 : 1
7.32 : 1
8 7 6 5 4 3 2 1 0 2007-08 2008-09 2009-10
Current Ratio
INTERPRETATION: -
Here, the current ratio for the year 2007-08 is 5.34, for the year 2008-09 is 6.38 and for the year 2009-10 is 7.32. The current ratio of the year 2009-10 is higher than the years 2007-08 &2008-09 and so, we can say that the current ratio of the year 2009-10 is effective ratio than 07-08 & 08-09, because of the standard ratio is 7.32:1. So position of the company in the market is good in the year 2009-10.
LIQUIDITY RATIO: Liquidity refers to the ability of a firm to meet its obligations in short run, usually one year. Liquidity ratios are generally based on the relationship between current assets (the sources for meeting short term obligations) and current liabilities.
LIQUIDITY RATIO: -
LIQUID ASSETS LIQUID LIABILITIES
YEAR
Liquid Assets Liquid Liabilities
2007-08
203,178,679 38,043,398
2008-09
283,576,529 44,441,402
2009-10
273,253,375 37,308,551
Ratio
5.34:1
6.38:1
7.32:1
8 7 6 5 4 3 2 1 0 2007-08 2008-09 2009-10
Liquidity Ratio
INTERPRETATION: Here, the liquid ratio indicates for the year 2007-08 is 5.34, for the year 2008-09 is 6.38 & for the year 2009-10 is 7.32. The liquid ratio of the year 200910 is higher than the years 2007-08 & 2008-09, which indicates that the firm had sufficient cash to meet the immediate payments. So, it is better position than past few years.
PROPRIETARY RATIO: The proprietary ratio is calculated by dividing the proprietors fund by the total assets of the firm with multiplying by hundred. Where as the proprietors fund is the sum of share capital and reserve & surplus. The total assets are the sum of net assets, investment and net current assets of the firm.
PROPRIETARY RATIO: -
PROPRIETORS FUND x 100 TOTAL ASSETS
YEAR
Proprietors Fund Total Assets
2007-08
62,061,348 221,328,907
2008-09
72,436,190 319,421,284
2009-10
77,699,697 319,625,067
Ratio
28.04 %
22.68 %
24.31 %
30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2007-08 2008-09 2009-10
Proprietary Ratio
INTERPRETATION: The ratio shown for the year 2007-08 is 28.04%, for the year 2008-09 is 22.68% & for the year 2009-10 is 24.31%. As per the above chart we can say that the ratio of the year 2008-09 is lower than the year 2007-08 & 2009-10.If the high ratio, the stronger the financial position. A very high ratio is therefore not desirable, because it means that insufficient use is being made of out side funds. According to study under taken by RBI, this ratio use between 36% to 38% most of the Indian companies. But our company had not very high ratio.
CASH RATIO: The cash is most liquid asset, a financial analyst may examine cash ratio and its equivalent to current liabilities. Trade investment or marketable securities are equivalent of cash; therefore, they may be included in the computation of cash ratio.
CASH RATIO: - CASH & BANK BALANCE

CURRENT LIABILITY
YEAR
Cash & Bank Current Liabilities
2007-08
10,334,318 33,829,653
2008-09
18,644,550 39,683,240
2009-10
4,930,348 32,197,087
Ratio
0.31 : 1
0.47 : 1
0.15 : 1
0.5 0.4 0.3 0.2 0.1 0
Cash Ratio
2007-08 2008-09 2009-10
INTERPRETATION: Here, from the above chart the ratio shown for the year 2007-08 is 0.31, for the year 2008-09 is 0.47 & for the year 2009-10 is 0.15. As per the higher of this ratio is good for the company. Because its increase the borrowing power of company from to consist with liability or any thing else. In this company the cash ratio of 0.31 means 31% in the year 2007-08. It is lower then 0.47 means 47% in the year 2008-09. But it is good performance of company because in the year 2009-10 the ratio is 0.15 means 15%. So, the company is performed good & modified its old bad performance. And it is good for the company to maintain & increase its performance.
NET WORKING CAPITAL RATIO: Net working capital means the different between current assets & current liabilities: excluding short term bank borrowing is called net working capital or are as firms liquidity.
NET WORKING CAPITAL RATIO: -
NET WORKING CAPITAL NET ASSETS
YEAR
Net Working Capital Net Assets
2007-08
110,996,223 165,135,281
2009-08
119,373,462 239,135,127
2009-10
149,592,430 235,944,824
Ratio
0.67
0.50
0.63
0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2007-08 2008-09 2009-10
Net Working Capital Ratio
INTERPRETATION: -
The ratio shows that the higher 0.67 in the year 200708,than the other year. And it is lower 0.50 in the year 2008-09 then 2007-08 & 2009-10. Net working capital is sometimes used as a measure of a firms liquidity. Net working
capital has the greater ability to meet its current obligations. Net working capital measures the firms potential reservoir of funds. It can be related to net assets.
REVENUE STATEMENT RATIO: These are the ratio are computed on the basis of items taken from revenue statement i.e. profit and loss account. E.g. Net profit ratio is computed by dividing net profit and loss account.
Gross profit ratio Net profit ratio Stock turn over ratio
Expanses ratio
GROSS PROFIT RATIO: The gross profit reflects the efficiency with which management produces each unit of product. This ratio indicates the average spread between the cost of goods sold and the sales revenue.
GROSS PROFIT RATIO: -
GROSS PROFIT SALES
100
YEAR
Gross Profit
2007-08
21,997,813
2008-09
25,608,235
2009-10
28,758,140
Sales
473,587,743
594,646,535
765,445,123
Ratio
4.64 %
4.31 %
3.76 %
5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2007-08 2008-09 2009-10
Gross Profit Ratio
INTERPRETATION: The ratio shows increasing order in the year 2007-08 & 2008-09. But in the year 2009-10 some portion is lower due to increasing operating expanses. As per this ratio the company should required to reduce operating expanses. In this
industry, there is more or less recognized gross profit ratio and business should strive to maintain this standard. If the ratio is low, it indicates that the cost of sales is high or that the purchasing is inefficient. Alternatively, it may also mean that due to depression, the selling price is reduced but there may be no corresponding reduction in cost of sales. In such a case, the management must investigate the causes and try to bring up this ratio.
NET PROFIT RATIO: Net profit ratio establishes the relationship between net profit and sales. It indicates the efficiency of the management in manufacturing, selling, administrative and other activities of the concern.
NET PROFIT RATIO: - NET PROFIT

SALES
100
YEAR
Net Profit Sales
2007-08
3,610,422 473,587,743
2008-09
3,149,905 594,646,535
2009-10
5,538,572 765,445,123
Ratio
0.76
0.53
0.72
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2007-08 2008-09 2009-10
Net Profit Ratio
INTERPRETATION: -
The net profit ratio from above chart respectively for the year 2007-08 is 0.76%, for the year 2008-09 is
0.53% and for the year 2009-10 is 0.72%.It is good position for the company. The higher of this ratio is shows the better profitability of the company. In this company the gross profit ratio is continuously increasing order. But in the year 2008-09 it is some portion decrease due to increasing administrative expanses. So, that effects the net profit ratio may be some portion decrease.
STOCK TURN OVER RATIO: This ratio measures how fast the inventory is moving through the firm and generating sales. Consistency in valuation requires the use of cost of goods sold in
the numerator because, like inventories, it is reported at cost. Sales in contrast, include a profit margin. The inventory turnover reflects the efficiency of inventory management. The higher the ratio, the more efficient the management of inventories and vice versa.
STOCK TURN OVER RATIO: - COST OF GOOD SOLD

AVERAGE STOCK
YEAR
Cost Of Good Sold Average Stock
2007-08
451,589,930 68,670,657
2008-09
569,038,300 69,415,745
2009-10
736,686,983 69,419,235
Ratio
6.58 Times
8.2 Times
10.61 Times
12 10 8 6 4 2 0 2007-08 2008-09 2009-10
Stock Turn Over Ratio
INTERPRETATION: Stock turn over ratio shows the number of times the average stock is turned over during the year. Here the ratio signifies that the average stock is turned over 10.61 times in the year 2009-10, 8.2 times in the year 2008-09 and 6.58 times in the year 2007-08. The ratio is very important in judging the ability of the management with which it can move the stock. The stock turn over ratio is shows in decreasing way it is not good for company. As per the study of stock turn over ratio is in decrease continuously. So, company should increase the time in stock turn over.
EXPENSE RATIO: It is the relationship of various expenses to net sales. It is calculated by dividing each item of expenses or groups of expenses with the net sales to analyze the cause of variation of the operating ratio.
EXPENSE RATIO: - TOTAL EXPENSE x 100

SALE
YEAR
Total Expenses Sales
2007-08
15,726,230 473,587,743
2008-09
16,947,999 594,646,535
2009-10
18,974,140 765,445,123
Ratio
3.32 %
2.85 %
2.48 %
3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2007-08 2008-09 2009-10
Expenses Ratio
INTERPRETATION: The ratio shown for the year 2007-08 is 3.32%, for the year 2008-09 is 2.85% & for the year 2009-10 is 2.48%. As per the above chart we can say that the ratio of the year 2009-10 is lower than the year 2007-08 & 2008-09. If the smaller the ratio, the higher is the profitability; and the greater the ratio, the lower is the profitability. From the above data we can say that expanses ratio of the company would be lower in year
by year, so the company decreasing of the administrative expanses.
COMPOSITE RATIO: A ratio showing the relationship between one item taken from balance sheet and other taken from profit and loss account is a composite ratio known as balance sheet and revenue statement ratios. A return on capital employed and it is a composite ratio.
Return on capital employed ratio Return on shareholders funds ratio
Debtors ratio Current assets turn over ratio Total assets turn over ratio Debtor turn over ratio Working capital turn over ratio
RETURN ON CAPITAL EMPLOYED: It is an index of profitability of business and is obtained by comparing net profit with capital employed. The ratio is normally expressed in the percentage. The term capital employed includes share capital. Reserves and long term loans such as debentures.
RETURN ON CAPITAL EMPLOYED: 100
NET PROFIT S CAPITAL
EMPLOYED
YEAR
Net Profit Capital Employed
2007-08
6,822,251 214,541,740
2008-09
5,188,123 312,053,748
200910
6,300,501 313,511,922
Ratio
3.18 %
1.66 %
2%
3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2007-08 2008-09 2009-10
Return On Capital Employed
INTERPRETATION: -
The above chart shows the return on capital employed. It shows respectively for 2007-08 is 3.18%, for 2008-09 is
1..66% and for 2009-10 is 2.00%. The return on capital employed shows the earning capacity of the firm in year 2008, 2009 and 2010 but the earning capacity of the year 2007-08 is more than the year 2008-09 & 2009-10. The return on capital employed reveals the rate of the earning capacity of the concern. It also indicates whether the proprietors funds have been used properly or not. The higher the ratio, the greater will be the return for the owners and the better the profitability. As per above chart we can say that earning capacity is good.
RETURN ON SHARE HOLDERS FUNDS: Return on shareholders investment is known as ROI or return on shareholders/Proprietors funds. This ratio establishes the relationship between net profits (after tax and interest) and proprietors funds.
RETURN ON SHF: -
NET PROFIT (PAT)
x 100
SHARE HOLDERS FUNDS
YEAR
2007-08
2008-09 2009-10
Net Profit Share Holders Funds
3,610,422 62,061,348
3,149,905 72,436,190
5,538,572 77,699,697
Ratio
5.82 %
4.35 %
7.13%
8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00%
Return On Share Holder's Fund's
2007-08 2008-09 2009-10
INTERPRETATION: -
As per this ratio the shareholders gets less benefit 4.35% in the year 2008-09, as compare to the year 2007-08 & 2009-10. But company paid good return in the year 2009-10 to its investors as per the year 2007-08 and the year 2008-09, it is higher than the year 2009-10. This ratio is used to measure the overall efficiency of a concern. The higher the ratio the better the results will be as this ratio reveals how well the resources of a concern are being used. The shareholder get good benefits from the company as per the trend of recession.
DEBTORS RATIO: The ratio shows the number of days taken to collect the dues of credit sales. It shows the efficiency or otherwise of the collection policy of the enterprise. The ratio is computed by dividing the amount of debtors and bills receivable by the credit sales.
DEBTORS RATIO: -
DEBTORS CREDIT SALES
x 365
YEAR
Debtors Credit Sales
2007-08
21,562,764 473,587,743
2008-09
26,083,598 594,646,535
2009-10
27,620,336 765,445,123
Ratio
17 Days
16 Days
13 Days
18 16 14 12 10 8 6 4 2 0
Debtors Ratio
2007-08 2008-09 2009-10
INTERPRETATION: -
Here, the debtors ratio indicates for the year 2007-08 is 17 days, for the year 2008-09 is 16 days & for the year 2009-10 is 13 days. The ratio of the year 2009-10 is lower than the year 2007-08 & 2008-09. So, the more satisfactory position is shows. It suggests that the credit
and collection policy is strong. This would result in to satisfactory state of working capital and good liquid position.
TOTAL ASSETS TURN OVER RATIO: Total assets turn over ratio is computed on the total assets turn over in addition to or instead of assets turn over. This ratio shows the firms ability in generation sales from all financial resources committed total assets.
TOTAL ASSETS TURN OVER RATIO: -
SALES TOTAL ASSETS
YEAR
Sales Total Assets
2007-08
473,587,743 221,328,907
2008-09
594,646,535 319,421,284
200910
765,445,123 319,625,067
Ratio
2.14
1.86
2.39
2.5 2 1.5 1 0.5 0
Total Assets Turn Over Ratio
2007-08 2008-09 2009-10
INTERPRETATION: -
The amount was invested in the business, are investing in all assets jointly and sales are affected through them to earn profit so, in order to find out relation between total assets to sales. The higher the ratio, it shows that with less amount of
investment in total assets, the business has a capacity to sell more and as such its profitability is also more. The above shows that, the ratio of 2007-08 and 2009-10 are more than 2008-09.
DEBTORS TURN OVER RATIO: Debtors turnover ratio measures the efficacy of a companys credit and collection policy. The ratio shows the number of times each year a companys debtors turn into cash. The ratio provides some indication of the quality of both the debtors and the companys collection efforts. A high debtor turnover ratio indicates that the debtors were converted frequently into cash and the quality of the companys portfolio of debtors can be considered good.
DEBTORS TURN OVER RATIO: -
CREDIT SALES AVERAGE DEBTORS
YEAR
Sales Average Debtors
2007-08
473,587,743 21,562,764
2008-09
594,646,535 26,083,598
2009-10
765,445,123 27,620,336
Ratio
21.96 Times
22.80 Times
27.71 Times
30 25 20 15 10 5 0 2007-08 2008-09 2009-10
Debtors Turn Over Ratio
INTERPRETATION: The ratio for the year 2007-08 is 21.96 times, for the year 2008-09 is 22.80 times and for the year 2009-10 is 27.71 times. It indicates the information regarding the liquidity of one item of current assets of the firm. The ratio measure how rapidly debt is collected. A high ratio indicates the shorter time lag between sales and cash collection. A low ratio indicates the debts are not being collected rapidly. According to debtor turn over ratio is increasing order. So, higher of this ratio is better for the company.
WORKING CAPITAL TURN OVER RATIO: This ratio indicates the demand made on working capital in supporting the sales revenues of a business enterprise. It shows the effectiveness or utilization of working capital.
WORKING CAPITAL TURN OVER RATIO: - COST OF GOOD

SOLD WORKING CAPITAL
YEAR
Cost Of Good Sold Working Capital
2007-08
451,589,930 110,996,223
2008-09
569,038,300 119,373,462
2009-10
736,686,983 149,592,430
Ratio
4.07 Times
4.77 Times
4.92 Times
5 4 3 2 1 0
Working Capital Turn Over Ratio
2007-08 2008-09 2009-10
INTERPRETATION: The ratio shows that the requirement of working capital 4.92 times in the year 2009-10, If more as compare to the year 2007-08 & 2008-09. Its reduced working capital 4.07 times in the year 2007-08 as compared to the year 200809. It is good for the company to maintain & reduce this stage of working capital & to collect quick payment from the debtor.
PART 3
SUGGESTIONS
Vimal dairy needs to make its marketing team strong and also it should increase marketing activities such as promotional campaigns. Vimal dairy should educate the investments organizing classes, corporate presentations, taking part in consumer fairs, organizing events.
Company should show the benefits of sales of the products Vimal dairy can also use Newspapers and Local New Channels as a medium of advertising. Vimal dairy may also use its helpline number for giving Problem on market. Company may appoint special team for giving Problem & attracting people towards in market.
Over all the companys position is good in terms of quick ratio.
CONCLUSION
After doing financial terms inventory management. I would like to give following suggestion
the higher portion of amount is blocks in inventory is higher . so the company should try to invest necessary amount in inventory.
It can be concluded that unit has a high potential.
Companys future is very bright because of good management , good workers, and good department, some experienced of skilled & educated persons . In my opinion, VIMAL growing its business. This preparing the project
DAIRY LIMITED. Has wide scope of information , which is very report.
company has good management who has provide me best useful necessary for
BIBLIOGRAPHY
Books:
I M Pandey (2005), Financial Management - 9th Edition Published by VIKAS PUBLISHING HOUSH PVT LTD M.Y. Khan and P.K. Jain, Financial management Vikas Publishing house ltd., New Delhi. K.V. Smith- management of Working Capital- Mc-Grow Hill New York Satish Inamdar- Principles of Financial Management-Everest Publishing House
Annual Reports:
Year: 2007-08, 2008-09 .2009-10
Websites:
www.vimaldairy.co.in
ANNEXURE
ANNAXURE-1
BALANCE SHEET AS AT 31ST MARCH, 2010 SR NO LIABILITIES / ASSETS 31ST MARCH ,2010 AMOUNT[ RS] SOURCES OF FUNDS
SHAREHOLDERS` FUNDS (A) CAPITAL 28550000 (B) RESERVE & SURPLUS 49149697 77699697 6113145
2 3
DEFERRED TAX LIABILITY LOAN FUNDS (A) SECURED LOANS 166557299 (B) UNSECURED LOANS 69254926 TOTAL 319625067
B 1
APPLICATION OF FUNDS FIXED ASSETS (A) GROSS BLOCK 139453645 (B) LESS DEPRECIATION FUND (C) NET BLOCK 69449166 70004479
2 3
INVESTMENTS 14231077 CURRENT ASSETS (A) INVENTORIES 221342966 (B) SUNDRY DEBTORS 27620336 (C) CASH & BANK BALANCES 4930348
(D) LOANS & ADVANCES 19359725 TOTAL : A 273253375 LESS : CURRENT LIABILITIES (A) LIABILITIES 32197087 (B) PROVISIONS 5111464 TOTAL : B 37308551 NET CURRENT ASSETS 235944824 4 MISCELLANEOUS EXPENDITURE 0 TOTAL 319625067
PROFIT AND LOSS ACCONNT FOR THE YEAR ENDED ON 31ST MARCH 2010
SR NO A
INCOMES / EXPENDITURE INCOMES SALES & OPERATING INCOME
AMOUNTS
765445123 OTHER INCOME INCREASE / DECREASE IN FINISHED GOODS &STOCK TOTAL 760499694 919058 (5864486)
EXPENDITURE RAW MATERIAL CONSUMED 622673408 PURCHASE FOR RESALE 2164276 MANUFACTURING EXPENSES 76963126 ADMINISTRATIVE EXPENSES 6233268 SELLING & DISTRIBUTION EXPENSES 18974140 INTEREST & FINANCIAL CHARGES 18243316 DEPRECIATION 8782211 AUDITORS REMUNERATION 165450 PRELIMINARY &PRE-OPERATIVE EXPS WRITTEN OFF TOTAL 754199194 0
PROFIT BEFORE TAX
6300501 D E F G H I J K PROVISION FOR FRINGE BENEFIT TAX 90000 PROVISION FOR TAXTION 2300000 SHORT PROVISION OF INCOME TAX DIFFERED TAX ASSET / (LIABILITY) PROFIT AFTER TAX 5538572 SHORT / EXCESS PROVISION FOR PREVIOUS YEAR BALANCE CARRIED TO BALANCE SHEET 5538572 EARNING PER EQUITY SHARE 1.94 0 (373680) (1254391)
ANNEXURE-2
BALANCE SHEET AS AT 31ST MARCH, 2009 SR NO A 1 LIABILITIES / ASSETS 31ST MARCH ,2009 AMOUNT[ RS] SOURCES OF FUNDS SHAREHOLDERS` FUNDS (A) CAPITAL 28550000 (B) RESERVE & SURPLUS 43886190 2 3 DEFERRED TAX LIABILITY 7367536 LOAN FUNDS (A) SECURED LOANS 142643786 (B) UNSECURED LOANS 96973772 TOTAL 319421284 72436190
B 1
APPLICATION OF FUNDS FIXED ASSETS (A) GROSS BLOCK 127326731 (B) LESS DEPRECIATION FUND 61271651
(C) NET BLOCK 66055080 2 3 INVESTMENTS 14231077 CURRENT ASSETS (A) INVENTORIES 226472904 (B) SUNDRY DEBTORS 26083598 (C) CASH & BANK BALANCES 18644550 (D) LOANS & ADVANCES 12375477 TOTAL : A 283576529 LESS : CURRENT LIABILITIES (A) LIABILITIES 39683240 (B) PROVISIONS 4758162 TOTAL : B 44441402 NET CURRENT ASSETS 239135127 4 MISCELLANEOUS EXPENDITURE 0 TOTAL 319421284
PROFIT AND LOSS ACCONNT FOR THE YEAR ENDED ON 31ST MARCH 2009
SR NO A
AMOUNTS
594646535 OTHER INCOME 1314387 INCREASE / DECREASE IN FINISHED GOODS &STOCK TOTAL 665376667 69415745
EXPENDITURE RAW MATERIAL CONSUMED 540395005 PURCHASE FOR RESALE
5049786 MANUFACTURING EXPENSES 67245465 ADMINISTRATIVE EXPENSES 6376285 SELLING & DISTRIBUTION EXPENSES 16947999 INTEREST & FINANCIAL CHARGES 16582391 DEPRECIATION 7387846 AUDITORS REMUNERATION 168360 PRELIMINARY &PRE-OPERATIVE EXPS WRITTEN OFF TOTAL 660188544 35407
C D E F G H I
PROFIT BEFORE TAX 5188123 PROVISION FOR FRINGE BENEFIT TAX 65000 PROVISION FOR TAXTION 1670000 SHORT PROVISION OF INCOME TAX DIFFERED TAX ASSET / (LIABILITY) 580369 PROFIT AFTER TAX 3149905 SHORT / EXCESS PROVISION FOR PREVIOUS YEAR (277151)
0 J K BALANCE CARRIED TO BALANCE SHEET EARNING PER EQUITY SHARE 3149905 1.10
ANNEXURE-3
BALANCE SHEET AS AT 31ST MARCH, 2008 SR NO A 1 LIABILITIES / ASSETS 31ST MARCH ,2008 AMOUNT[ RS] SOURCES OF FUNDS SHAREHOLDERS` FUNDS
(A) CAPITAL 26050000 (B) RESERVE & SURPLUS 36011348 2 3 DEFERRED TAX LIABILITY 6787167 LOAN FUNDS (A) SECURED LOANS 112250207 (B) UNSECURED LOANS 40230185 TOTAL 221328907 62061348
B 1
APPLICATION OF FUNDS FIXED ASSETS (A) GROSS BLOCK 109867936 (B) LESS DEPRECIATION FUND 55212817 (C) NET BLOCK 54655119
2 3
INVESTMENTS 1503100 CURRENT ASSETS (A) INVENTORIES 159106315 (B) SUNDRY DEBTORS 21562764 (C) CASH & BANK BALANCES 10334318
(D) LOANS & ADVANCES 12175282 TOTAL : A 203178679 LESS : CURRENT LIABILITIES (A) LIABILITIES 33829653 (B) PROVISIONS 4213745 TOTAL : B 38043398 NET CURRENT ASSETS 165135281 4 MISCELLANEOUS EXPENDITURE 35407 TOTAL 221328907
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH 2008
SR NO A
AMOUNTS
473587743 OTHER INCOME 535187 INCREASE / DECREASE IN FINISHED GOODS &STOCK TOTAL 542793587 68670657
EXPENDITURE RAW MATERIAL CONSUMED 435811198 PURCHASE FOR RESALE 9430877 MANUFACTURING EXPENSES 56688427 ADMINISTRATIVE EXPENSES 4315225 SELLING & DISTRIBUTION EXPENSES 15726230 INTEREST & FINANCIAL CHARGES 6920721 DEPRECIATION 6853523
AUDITORS REMUNERATION 168360 PRELIMINARY &PRE-OPERATIVE EXPS WRITTEN OFF TOTAL 535971336 56775
C D E F G H I J K
PROFIT BEFORE TAX 6822251 PROVISION FOR FRINGE BENEFIT TAX 78710 PROVISION FOR TAXTION 4000000 SHORT PROVISION OF INCOME TAX 483438 DIFFERED TAX ASSET / (LIABILITY) PROFIT AFTER TAX 3610422 SHORT / EXCESS PROVISION FOR PREVIOUS YEAR 0 BALANCE CARRIED TO BALANCE SHEET 3610422 EARNING PER EQUITY SHARE 1.39 (1350319)

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A PROJECT REPORT ON RATIO ANALYSIS OF VIMAL DAIRY LTD, PALAVASANA

PATEL DHAVAL R Mr.Jignesh pandya MBA-II ROLL NO - 12

SWAMI VIVEKANAND MBA COLLEGE, VEDA

I have selected VIMAL

LTD MEHSANA for practical DAIRY LTD

SWAMI VIVEKANAND MBA COLLEGE, VEDA

I have prepared the report of VIMAL

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

HISTORY & DEVELOPMENT

The name of these companies as on their generation is :

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

COLLECT THE MILK PER DAY AS UNDER

SWAMI VIVEKANAND MBA COLLEGE, VEDA

EXISTING MANAGING BODY

: Shri Chandubhai I. Patel

SWAMI VIVEKANAND MBA COLLEGE, VEDA

Whole time Director Technical director Chief Accountant

: Shri Jayeshbhai C Patel : Shri C.V.Patel : Shri Mahendrabhai Patel

SWAMI VIVEKANAND MBA COLLEGE, VEDA

PLANT LAYOUT CHART

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

CAPITAL STRUCTURE GRAPH

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

YEAR YEAR SECURED LOAN UNSECURED LOAN RESERVE & SURPLUS

2007-08 (Rs.) 2007-08 112,250,207 (Rs.) 40,230,185 36,011,348

2008-09 (Rs.) 2008-09 142,643,786 (Rs.) 96,973,772 43,886,190

200910 2009-10 (Rs.) 166,557,299 (Rs.) 69,254,926 49,149,697

180000000 160000000 140000000 120000000 100000000 80000000 60000000 40000000 20000000 0

SECURED LOAN UNSECURED LOAN

2007- 2008- 200908 09 10

RESERVE & SURPLUS CHART

SWAMI VIVEKANAND MBA COLLEGE, VEDA

RESERVE & SURPLUS

2007-08 2008-09 2009-10

SWAMI VIVEKANAND MBA COLLEGE, VEDA

2008-09 (Rs.) 3,149,905 5,188,123

2009-10 (Rs.) 5,538,572 6,300,501

PROFIT AFTER TAX PROFIT BEFORE TAX

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

SWAMI VIVEKANAND MBA COLLEGE, VEDA

MEANING OF RATIO ANALYSIS

SIGNIFICANCE OF RATIO ANALYSIS

SWAMI VIVEKANAND MBA COLLEGE, VEDA

Help in locating weak points of the firm:

SWAMI VIVEKANAND MBA COLLEGE, VEDA

STUDY ON RATIO ANALYSIS

SWAMI VIVEKANAND MBA COLLEGE, VEDA

CURRENT ASSETS CURRENT LIABILITIES

SWAMI VIVEKANAND MBA COLLEGE, VEDA

8 7 6 5 4 3 2 1 0 2007-08 2008-09 2009-10

SWAMI VIVEKANAND MBA COLLEGE, VEDA

LIQUID ASSETS LIQUID LIABILITIES

SWAMI VIVEKANAND MBA COLLEGE, VEDA