PROJECT REPORT ON

STUDY ON COMPARITIVE FIANANCIAL

STATEMENTS AND ANALYSIS IN MUTHOOT
FINCORP, NIZAMABAD
Project Report submitted to J awaharlal Nehru Technological University,
Hyderabad,
In partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by:
Mr./Ms._____________________________
H.T.No._____________________________
Under the esteemed guidance of
Mr./Ms._________________________
Associate/Assistant Professor





DEPARTMENT OF BUSINESS MANAGEMENT
VIJAY RURAL ENGINEERING COLLEGE, NIZAMABAD
(Approved by AICTE, New Delhi and Affiliated to JNTU Hyderabad)
2012-2014


DECLARATION


I hereby declare that the work described in this project entitled --------------------------
---------------------------------------- carried out at -----------------------------------. which
is being submitted by me in partial fulfillment for the award of degree of Master of
Business Administration in the Dept. of Business Management ,Vijay Rural
Engineering College , Nizamabad to the Jawaharlal Nehru Technological University
Hyderabad, Kukatpally, Hyderabad (Telanagana.) -500 085, is the result of
investigations carried out by me under the Guidance of Mr./Ms. --------------------------
------------------.

The work is original and has not been submitted in full /partial for any
Degree/Diploma of this or any other university or institution.





Place: Signature
Date:
Name of the Candidate:
Hall Ticket No.:
Email-Id:












COMPANY CERTIFICATE


























CERTIFICATE


This is to certify that the project report entitled CUSTOMER RELTIONSHIP
MANAGEMENT BIG BAZAR is being submitted by Mr./Ms.------------------------------- (H.T.No.
------------------) in partial fulfillment for the award of the Masters Degree in Business
Administration (MBA) during the academic year 2014 to the JNTUH is a recorded of bonafide
work carried out by him/her under the guidance and supervision.
The results embodies in this project have not been submitted to any other university
or institute for the award of any degree or diploma.

Signature of the Internal guide Signature of the HOD
( ) ( )


Signature of the External Examiner Signature of the Principal
(Dr.B.R.VIKRAM)






ACKNOWLEDGEMENT

I take this opportunity to thank all who have rendered their full support to my
work. The pleasure, the achievement, the glory, the satisfaction, the reward, the
appreciation and the construction of our project cannot be thought without a few, how
apart from their regular schedule, spared a valuable time for us. This
acknowledgement is not just a position of words but also an account of the
indictment. They have been a guiding light and source of inspiration towards the
completion of the project.
I would like to express my hearted thanks to Mr. K.Narendhar Reddy Garu
Chairman, Mrs. Amrutha Latha Garu, Secretary and Dr. B.R.Vikram Garu,
Principal- Vijay Rural Engineering College for their kind consent to carry out this
project and also providing necessary infrastructure and resources to accomplish my
project work.
I express my profound sense of gratitude to Mr.---------------------------,
Associate Professor & Head of the Department of MBA, who has kindly permitted me
to do major project in any area of my choice and providing me all the facilities for the
project.
I am deeply indebted to my project guide Mr. ----------------------------,
Assistant Professor in Department of MBA for his valuable guidance, meticulous
supervision, support and sincere advice to complete the project successfully.
And I would like to express my sincere thanks to all the staff members of
MBA Department for their kind cooperation in completion of this project.
Finally, I thank to one and all those who have rendered help directly or
indirectly at various stages of the project and also my family members for their care
and moral support in finishing my project.
STUDENT NAME
H.T.NO
ABSTRACT























INDEX























LIST OF TABLES























Introduction

Finance studies and addresses the ways in which individuals, businesses, and
organizations raise, allocate, and use monetary resources over time, taking into
account the risks entailed in their projects. The term "finance" may thus incorporate
any of the following:
The study of money and other assets.
The management and control of those assets,
Profiling and managing project risks,
The science of managing money,
As a verb, "to finance" is to provide funds for business or for an individual's
large purchases (car, home, etc.).

The field of finance deals with the concepts of time, money and risk and how
they are interrelated. It also deals with how money is spent and budgeted. Finance
works most basically through individuals and business organizations depositing
money in a bank. The bank then lends the money out to other individuals or
corporations for consumption or investment, and charges interest on the loans.
The activity of finance is the application of a set of techniques that individuals
and organizations (entities) use to manage their money, particularly the differences
between income and expenditure and the risks of their investments.
An entity whose income exceeds its expenditure can lend or invest the excess
income. On the other hand, an entity whose income is less than its expenditure can
raise capital by borrowing or selling equity claims, decreasing its expenses, or
increasing its income.
Finance is used by individuals (personal finance), by governments (public
finance), by businesses (corporate finance), as well as by a wide variety of
organizations including schools and non-profit organizations. In general, the goals of
each of the above activities are achieved through the use of appropriate financial
instruments, with consideration to their institutional setting.
Finance is one of the most important aspects of business management.
Without proper financial planning a new enterprise is unlikely to be successful.
Managing money (a liquid asset) is essential to ensure a secure future, both for the
individual and an organization.
Financial Management:
Management of funds is an important aspect of financial management.
Management of funds acts as the primary concern whether it may be in a business
undertaking or in an educational institution. Financial management, which is simply
meant dealing with management of money matters.
Meanings of Financial Management:
Financial Management mean efficient use of economic resources namely
capital funds. According to Phillippatus, "Financial management is concerned with
the managerial decisions that result in the acquisition and financing of short term and
long term credits for the firm". Here it deals with the situations that require selection
of specific assets, the selection of specific problem of size and growth of an
enterprise. Here the analysis deals with the expected inflows and outflows of funds
and their effect on managerial objectives. So the analysis simply states two main
aspects of financial management like procurement of funds and an effective use of
funds to achieve business objectives.
Objective of Financial Management:
Financial management of any business firm has to set goals for and interpret
them in relation to the objectives of the firm. Broadly there are only two alternative
goals/ objective of financial management.
1. Specific objectives:
a) Profit Maximization:
It is consider as an important goal in financial decision making in an
organization. Maximization is the condition achieving the maximum target profit with
available resources in an economic and efficient manner.
b) Wealth maximization:
It refers to the maximization of wealth by maximization in the market value of
shares of a company. The efficient of an organization maximizes present not only for
shareholders but for including employees, customers, suppliers and community at
large. It is the ultimate objective of every organization.



1. General objective:
a) Balance asset structure:
A proper balance between the fixed assets and current assets is an important
factor for efficient managements of funds. This is one of the objectives of financial
management that size of current asset must permit the company to exploit the
investment on fixed assets.
b) Liquidity:Liquidity refers to available cash and it is an indication of
positive growth of a company. It is an important factor for meeting the short and long
term obligation of a firm.
c) Proper planning of funds:
Proper planning of funds include acquisition and allocation of funds in the best
possible manner that is minimum cost of acquisition of funds but maximum returns
through wise decision.
d) Efficiency:
Efficiency and effectiveness are very much necessary in controlling flow of
funds. The efficiency level should continuously increase for betterment of statements
etc.
e) Financial discipline:
There shouldnt be any mishandling of funds, misuse etc. Proper discipline
should be practiced in matters relating to finance, its flow and control. This can be
done through various techniques like budgeting funds flow statement etc.
Scope of financial management:
The scope of financial management is determined from the stages of
development of the study. Financial management developed as a separate subject
from economics in the year 1920. Its scope has enlarged to make it an integrated and
complete subject for every organization. Since 1950 it has assumed an important
status.
Traditional scope of financial management:
Traditionally financial management was used by corporate organizations
mainly for the purpose of finding the sources of funds and the methodologies of
raising them from such sources and utilizing them for the organizations requirements.
It also incorporated the legal and accounting requirements relating to sources and uses
of funds. Traditionally Financial Management was known as Corporation Finance and
was called the outsider looking approach.
Its emphasis was centred on the following three issues:
To organize funds from different sources like banks, investment companies
and financial institutions.
To use financial instruments in the form of shares, debentures, bonds, fixed
deposits for companys requirements.
To settle the organization of funds through proper administration, legal
advice and proper accounting records.

Modern Financial Management:
Modern Financial Management is a concept of overall management of a
company. Its scope is broadly divided into three important decisions which may also
be called the functions of financial management. These are investment decisions,
financing decisions and dividend decisions. It covers the areas of sourcing of funds,
financial analysis, attaining an optimum capital structure, profit planning and control,
project planning and evaluation and corporate taxation. It takes care of internal and
external management of funds and covers the requirements of different groups of
people such as shareholders, management, investors, government, customers and
suppliers.
1. Investment Decision Making:
A firm is required to take decisions relating to acquisition of long term assets and
current assets. Capital investment proposals require heavy investment.
2. Financing Decisions:
A financial manager has to procure funds from different sources. He has to decide the
quantum of funds and the type of source that he should use for the firm. There is a
cost attached to every source of fund and hence balance has to be maintained between
debt and equity.
3. Dividend Decisions Making:
Dividend decision making pertains to an analysis of the right amount of dividend to
be distributed to shareholders. It has to take care of the legal restrictions and
accounting processes before giving a dividend. The correct decisions have to be taken
regarding the percentage of reserves before distribution of dividends.


4. Balancing Profitability And Liquidity:
Conflicts in goals have to be solved as they are within the ambit of the scope of
financial management. A firm has to balance its conflicts between being profitable
and liquid. When profitability increases a financial manager may have the problem of
low liquidity as all the funds may be used to make the profitable.

Tools of Financial Statements:

In the analysis of financial statements, the analyst has available a number of
tools from which he has to choose best suited for his specific purpose. The following
are the principal tools of analysis of financial statements.
a) Comparative Financial Statements.
b) Common-size Financial Statements.
c) Trend percentage analysis.
d) Funds flow statement.
e) Cash flow statement
f) Net working capital analysis
g) Cost-volume profit analysis
h) Ratio analysis


Objectives of the study:
This widely used by the financial analysiss and credit granting institutions
and financial managers in performance of their jobs. It has become a useful tool in
their analytical kit. This is because the financial statements, i.e., Income Statement
and the Balance Sheet have a limited role to perform. Income Statement measures
flow restricted to transitions that pertain to rendering of goods and services to
customers. The Balance Sheet is merely a static statement. It is a statement of assets
and liabilities as on a particular date.

The main objectives of the study are:
To analyze the financial statement.
To forecast and prepare the plans for the future.
To establish ideal standards of the different items of the business.
To provide useful information to the management.
To simplifies and summarizes a long array of accounting data and make them
understandable.
To will reveal the trend of costs, sales, profits and other important facts.


Scope of the study:
It is useful for the management.
It gives information to the investors about the earning capacity of the business.
Current year's ratios are compared with those of previous years and if some
weak spots are thus located remedial measures are taken to correct them.
It gives information to the financial institution for providing the finance to the
company
It gives information to the taxation authorities.
It gives information to the researchers for conducting research in respect of
profitability, efficiency, financial soundness and growth of that company.


Research methodology:
Research methodology is a way to systematically solve the research problem.
In it, step-by-step Research Methodology is a way to systematically solve the research
problem. In it, step-by-step methods are followed to solve a particular problem. It
refers to a search for knowledge. It can also be defined as a scientific and systematic
search for pertinent information on a specific topic. In fact, research is an art of
scientific investigation.

DATA COLLECTION:
The data can be of two types:
Primary Data:
Primary Sources are original sources from which the researcher directly
collects data that have not been previously collected. Primary data are first-hand
information collected through various methods such as observation, interviewing, etc.
Here, the primary data is collected as follows:
Interview with the Sales Manager.
Discussions with other personnel such as advisors and trainers.

Secondary Data:
Secondary Data are those data which are already collected and stored and
which has been passed through statistical research.
In this project, secondary data has been collected from following sources:
Annual Report
Other material and report published by company

Research designs:
Research Design is the way in which the research is carried out. It works as a
blue print. Research Design is the arrangement of conditions for the collection and
analysis of data in a manner that aims to combine relevance to the research purpose
with economy in procedure.

The present project is descriptive in nature. In Descriptive Research Design,
those studies are taken which are concerned with describing the characteristics of a
particular group. The major purpose of descriptive research is the description of state
of affairs, as it exists at present.

Exploratory Research:
An exploratory research focuses on the delivery of ideas and is generally
based on secondary data. It is a preliminary investigation a preliminary investigation
which does not have a rigid deigns. This is because a researcher engaged in
exploratory study may have to change his focus as a result of new ideas and relation
among the variables.
The study conducted through exploratory research with the help of data obtain
from the secondary data, there is no specific sample design made or questionnaire
used to obtain information

Data Type:
The data used for the study is secondary data:
Source of data:
Insurance company broacher
IRDA web site
Companies web sites
Annual report of company

Limitations of the study:

The survey conducted may not be considered as comprehensive as only
limited respondents could be contacted because of the time constraint.
Lacks of information of company.
It depends on past information.
Only the last 4 years data is considered for the study.
Only limited sample size had been considered for the study and therefore, the
conclusions drawn based on this may not be a reflection of the entire industry.

Financial statement:
Profit and loss account is prepared to ascertain the results of business
operations called net profit or net loss of the business for an accounting year.
The balance sheet is prepared to indicate the financial position. Object of
balance sheet is prepared to know the soundness of the business indicated by
its assets and liabilities.
In balance sheet there are 2 major things to learn before is

Current Assets:
The term Current Assets includes assets which are acquired with the
intention of converting them into cash during the normal business operations of the
company.

Current Liabilities:
The term Current Liabilities is used principally to designate such obligations
whose liquidation is reasonably expected to require the use of assets classified as
current assets in the same balance sheet or the creation of other current liabilities or
those expected to be satisfied within a relatively short period of time usually one year.
The term current liabilities also includes amounts set apart or provided for any known
liability of which the amount cannot be determined with substantial accuracy e.g.,
provision for taxation, pension etc.

LITERATURE REVIEW

FINANCIAL STATEMENTS ANALYSIS
The financial statements are indicators of the two significant factors:
1. Profitability and
2. Financial soundness
Analysis and interpretation of financial statement therefore, refers to such a treatment of the
information contained in the Income Statement and Balance Sheet so as to afford full diagnosis
of the profitability and financial soundness of the business.
Balance Sheet
A balance sheet is the basic financial statement. It presents data on a companys financial
conditions on a particular date, based on conventions and generally accepted principles of
accounting. The amount shown in the statements on the balances, at the time it was prepared in
the various accounts listed in the companys accounting records, is considered to be a
fundamental accounting statements. The income statement summarizes the business operations
during the specific period and shows the results of such operations in the form of net income or
net loss. By comparing the income statements of successive periods, it is possible to determine
the progress of a business. A statement is supplemented by a comparative statement of the cost
of goods manufactured and sold. It is prepared at regular intervals and shows what a business
enterprise owns and what it owes. It provides information which helps in the assessment of the
three main aspects of an enterprises position its profitability, liquidity and solvency. Of these,
the later two are concerned with an enterprises ability to meet its liabilities, while profitability
is most useful overall measure of its financial conditions, the balance sheet is a statements of
assets, liabilities capital on specified date. It is therefore a static statement, indicating resources
and the allocation of these resources to various categories of asset. It is so to say financial
photography finance. Liabilities show the claims against its assets.

The shareholders equity comprises the total owner ship claims in a firm. This claim includes
net worth of shareholders equity and preferred stock. The traditional company balance sheet
statement of assets valued on the basis of their original cost and the means by which they have
been financed by its shareholders, lenders, suppliers and by the retention of income.
This tool suffers from the following limitations:
1. A balance sheet gives only a limited picture of state of affairs of a company, because it
Includes only those items which can be expressed in monetary terms.
2. The values shown on the balance sheet for some of the assets are never accurate
3. A balance sheet assumes that the real value of money remain constant.
4. On the basis of balance sheet, it is not possible to arrive at any conclusion about the success
of an enterprise in the future.
5. It is a detailed statement of the financial structure of a business.
Income statement
The results of operations of a business for a period of time are presented in the income
statement.
From the accounting point of view, an income statement is subordinate to the balance sheet
because the former simply presents the details of the changes in the retained earnings in balance
sheet accounts. However, if vital source of financial information an income statement
summarizes the results of business operations during specific period and shows in the form of
net income or net loss by comparing income statements for successive periods, it is possible to
observe the progress of the business the statement is supplemented by a comparative statement
of cost of goods manufactured and sold. It summarizes firms operating results for the past
period.
Comparative balance sheet
Financial statements are sometimes recast for facility of scrutiny. The effects of the conductor
businesses are reflected in its balance sheet by changes in assets and liabilities and in its net
worth.
The comparative income statement presents a review of operating activities in business. A
comparative balance sheet shows effect of the operations on the assets and liabilities. The
practice of presenting comparative statement in the annual report is now becoming wide spread
because it is a connection between balance sheet and income statement. Considerations like
price levels and accounting methods are given due weight at the time of comparison.
Common-size statements
The percentage balance sheet is often known as the common size balance sheet. Such balance
sheet are, in a broad sense ratio analysis general items in the profit and loss accounts and in the
balance sheet are expressed in analytical percentages when expressed in the form, the balance
sheet and profit and loss account are referred to as a common size statement. Such statements
are useful in comparative analysis of the financial position in operating results of the business.
Cash flow statement
A cash flow statement is the financial analysis of the net income or profit after including book
expense items which currently do not use cash; for example, depreciation, depletion and
amortization. Revenue items, which do not currently provide funds, are to be deducted. A gross
cash flow is net profit after tax plus provision for depreciation. A net cash flow is arrived after
deducting dividends from the gross cash flow. The cash flow is very significant because it
represents the actual amount of cash available to the business.
Ratio Analysis
Financial ratio analysis is the calculation and comparison of ratios which are derived
from the information in a company's financial statements. The level and historical trends
of these ratios can be used to make inferences about a companys financial condition, its
operations and attractiveness as an investment.
Financial ratios are calculated from one or more pieces of information from companys
financial statements. For example, the "gross margin" is the gross profit from operations
divided by the total sales or revenues of a company, expressed in percentage terms. In
isolation, a financial ratio is a useless piece of information. In context, however, a
financial ratio can give a financial analyst an excellent picture of a company's situation
band the trends that are developing.
A ratio gains utility by comparison to other data and standards. Taking our example, a
gross profit margin for a company of 25% is meaningless by itself. If we know that this
company's competitors have profit margins of 10%, we know that it is more profitable
than its industry peers which are quite favorable. If we also know that the historical trend
is upwards, for example has been increasing steadily for the last few years, this would
also be a favorable sign that management is implementing effective Business, policies
and strategies.
Classification of Ratios
Financial ratio analysis involves the calculation and comparison of ratios which are
derived from the information given in the company's financial statements. The historical
trends of these ratios can be used to make inferences about a companys financial
condition, its operations and its investment attractiveness.
Financial ratio analysis groups the ratios into categories that tell us about the different
facets of a company's financial state of affairs. Some of the categories of ratios are
described below:

Liquidity Ratios give a picture of a company's short term financial situation or
solvency
Turnover Ratios show how efficient a company's operations and how well it is
using its assets.
Solvency Ratios show the long term profitability of the company.
Liquidity Ratios
Liquidity Ratios are ratios that come off the Balance Sheet and hence measure the
Liquidity of the company as on a particular day i.e. the day that the Balance Sheet was
prepared. These ratios are important in measuring the ability of a company to meet both
its short term and long term obligations.
1. Current Ratio
2. Liquid Ratio
3. Net working capital ratio
1. Current Ratio:
An indication of a company's ability to meet short-term debt obligations; the higher
the ratio, the more liquid the company is. Current ratio is equal to current assets
divided by current liabilities. If the current assets of a company are more than twice
the current liabilities, then that company is generally considered to have good short-
term financial strength. If current liabilities exceed current assets, then the company
may have problems meeting its short-term obligations.
Current Ratio = Current assets / Current liability
2. Quick Ratio:
Liquid ratio is also known as quick or Acid test ratio. Liquid assets refer to assets
which are quickly convertible into cash. Current Assets other stock and prepaid
expenses are considered as quick assets. The ideal liquid ratio accepted norm for
liquid ratio 1.
Quick Ratio = Total Quick Assets/ Total Current Liabilities
Quick Assets = Total Current Assets (minus) Inventory
3. Net Working Capital Ratio
Working Capital is more a measure of cash flow than a ratio. The result of this
calculation must be a positive number. Companies look at Net Working Capital over
time to determine a company's ability to weather financial crises. Loans are often tied
to minimum working capital requirements.
Net working capital ratio = Net Working Capital / Capital Employed
Turnover Ratios
The turnover ratio is also known as activity or efficiency ratios. They indicates the
efficiency with which the capital employed is rotated in the business (i.e.) the speed at
which capital employed in the business rotates. Higher the rate of rotation, the greater
will be the profitability. Turnover ratios indicate the number of times the capital has
been rotated in the process of doing business.
1. Fixed Asset Turnover Ratio
2. Working Capital Turnover Ratio
3. Debtor Turnover Ratio
4 Stock Turnover Ratio
1. Fixed Assets Turnover Ratio
Fixed asset turnover is the ratio of sales (on your Profit and loss account) to the value
of your fixed assets (on your balance sheet). It indicates how well your business is
using its fixed assets to generate sales.
Generally speaking, the higher the ratio, the better, because a high ratio indicates the
business has less money tied up in fixed assets for each dollar of sales revenue. A
declining ratio may indicate that you've over-invested in plant, equipment, or other
fixed assets.
Fixed Assets Turnover Ratio = Gross Sales / Net Fixed Assets
2. Working Capital Turnover Ratio
Working capital refers to investment in current assets. This is also known as gross
concept of working capital. There is another concept of working capital known as net
working capital. Net working capital is the difference between current assets and
current liabilities. Analysts intend to establish a relationship between working capital
and salsas the two are closely related. Through this ratio we are attempting to see that
one rupee blocked by the organization in net working capital is generating how much
sales. Higher the ratio better it is.So, the working capital can be defined either as a
gross working capital, which include funds invested in all current assets, or as net
working capital, which denotes the difference between the current assets current
liabilities of an organization.
Working Capital Turnover Ratio = Net Sales / Net Working Capital
3. Debtors Turnover Ratio
Debtors turnover ratio measures the efficiency with which the debtors are converted
into cash. This ratio indicates both the quality of debtors and the collection efforts of
the business enterprise. This ratio is calculated as follows:

I. Debtors turnover ratio
II. Debt collection period.
The numerator of this ratio should preferably be credit sales. This is so because the
denominator is logically related to credit sales as it arises from credit sales only. Cash
sales do not generate debtors. However, as the information related to credit sales is
not separately available in corporate accounts, so total sales could be taken in the
numerator. Average debtors are calculated by dividing the sum of beginning-of-year
and end-of-year balance of debtors by 2.
Debtors Turnover Ratio = Credit sales / Average accounts receivables
Debt collection period:
The ratio indicates the extent to which the debt has been collected in time. It gives the
average debt collection period. The ratio is very helpful to lenders because it explains
to them whether their borrowers are collecting money within a reasonable time. An
increase in the period will result in greater blockage of funds in debtors.
Debt collection period = Months/Days in a year/ Debtors turnover ratio
4. Stock Turnover Ratio:
This ratio indicates whether investment in inventory is efficiently used or not. It is
therefore explains whether investment in inventories is within proper limits or not.
The Inventory turnover ratio signifies the liquidity of the Inventory. A high inventory
turnover ratio indicates brisk sales. The ratio is, therefore a measure to discover the
possible trouble in the form of over stocking or over valuation.
It is difficult to establish a standard ratio of inventory because it will differ from
industry to industry.
Stock Turnover Ratio = Sales / Average Inventory
Profitability Ratios
Profitability is an indication of the efficiency with which the operation of the business
is carried on. Poor operational performance may indicate poor sales and hence poor
profits. A lower profitability may arise due to lack of control over the expenses.
Bankers, financial institutions and other creditors look at the profitability ratios as an
indicator whether or not the firm earns substantially more than it pays interest for the
use of borrowed funds.
1. Return on Investment
2. Return on Shareholders fund
3. Return on total asset
4. Earnings per Share
5. Net profit Ratio
6. Operating ratio
7. Payout ratio
8. Dividend yield ratio
1. Return on Investment:
It is also called as Return on Capital Employed. It indicates the percentage of return
on the total capital employed in the business.
The term operating profit means profit before interest and tax and the term
capital employed means sum-total of long term funds employed in the business. i.e.
Share capital + Reserve and surplus + long term loans [non business assets
+fictitious assets]
Return on investment = Operating profit/ Capital employed *100
2. Return on Shareholders Fund:
In case it is desired to work out the productivity of the company from the
shareholders point of view, it should be computed as follows:
Return on shareholders fund = Net profit after Interest and Tax/Shareholders
fund*100
The term profit here means Net Income after the deduction of interest and tax. It is
different from the Net operating profit which is used for computing the Return on
total capital employed in the business. This is because the shareholders are interested
in Total Income after tax including Net non-operating Income (i.e. Non- Operating
Income -Non-Operating expenses).
3. Return on Total Assets:
This ratio is computed to know the productivity of the total assets.The term Total
Assets includes the fixed asset, current asset and capital work in progress of the
company. The above table clearly reveals the relationship between the net profit and
Total Assets employed in the business.
Return on Total Assets = Net profit after Tax/Total Assets* 100
4. Earnings per Share:
In order to avoid confusion on account of the varied meanings of the term capital
employed, the overall profitability can also be judged by calculating earnings per
share with the help of the following formula:
Earning Per Equity Share = Net Profit after Tax / Number of Equity Shares X 100
The earnings per share of the company helps in determining the market price of the
equity shares of the company. A comparison of earning per share of the company with
another will also help in deciding whether the equity share capital is being effectively
used or not. It also helps in estimating the companys capacity to pay dividend to its
equity shareholders.
Earning Per Equity Share = Net Profit after Tax / Number of Equity Shares X
100
5. Net Profit Ratio:
This ratio indicates the Net margin on a sale of Rs.100.This ratio helps in determining
the efficiency with which affairs of the business are being managed. An increase in
the ratio over the previous period indicates improvement in the operational efficiency
of the business. The ratio is thus on effective measure to check the profitability of
business. However, constant increase in the above ratio after year is a definite
indication of improving conditions of the business.
Net Profit Ratio =Net Operating Profit/Net Sales*100
6. Operating Ratio:
This ratio is a complementary of Net Profit ratio. In case the net profit ratio is20%. It
means that the operating profit ratio is 80%.It is calculated as follows:
Operating Ratio =Operating Cost/Net Sales*100
The operating cost include the cost of direct materials, direct labor and other
overheads, viz., factory, office or selling.
Direct Material cost to sales =Direct Material/Net Sales*100
This ratio is the test of the operational efficiency with which the business is being
carried. The operating ratio should be low enough to leave a portion of sales to give a
fair to the investors.
7. Payout Ratio:
This ratio indicates what proportion of earning per share has been used for paying
dividend. The payout ratio is the indicator of the amount of earnings that have been
ploughed back in the business. The lower the payout ratio, the higher will be the
amount of earnings ploughed back in the business and vice versa.
Payout Ratio =Dividend per equity share/Earning per equity share*100

8. Dividend Yield Ratio
This ratio is particularly useful for those investors who are interested only in dividend
income. The ratio is calculated by comparing the ratio of dividend per share with its
market value.
Dividend yield =Dividend per Share/Market price per share*100
And Dividend per share = Dividend paid/ Number of shares.
Long Term Financial Position or Solvency Ratios
The term solvency refers to the ability of a concern to meet its long term obligations.
The long term indebtedness of a firm includes debenture holders, financial institutions
providing medium and long term loans and other creditors selling goods on
installment basis. So, the long term Solvency ratios indicate a firms ability to meet
the fixed interest and costs and repayment schedules associated with its long term
borrowings. Two types of ratios are there:
1. Capital structure ratios-ex. Debt equity ratio
2. Coverage ratios-ex. Debt service ratio or Interest coverage ratio
1. Debt-Equity Ratio
Debt Equity ratio also known as External- Internal Equity Ratio is calculated to
measure the relative claims of outsiders and the owners against the firms assets.
The ratio is calculated as:
Debt equity ratio = Outsiders funds / Shareholders funds
Outsiders fund includes all debts/liabilities to outsiders, whether long term or short
term or whatever in the form of debentures bonds, mortgages or bills. The
shareholders fund consist of equity share capital, preference share capital , capital
reserves, revenue reserves, and reserves representing accumulated profits and
surpluses.
2. Interest Coverage Ratio
This ratio is used to test the debt servicing capacity of a firm. The ratio is calculated
as:
Interest coverage ratio = EBIT/Fixed interest charge











PROFILE OF INDUSTRY & COMPANY
Muthoot Finance Ltd. is the largest player in the gold loan business in India.
76% of its business is generated from the 5 southern states in the Country. The
Company has a market share of 19.5% in the organized sector as on FY10. It is facing
major legal hurdle related to Kerala State Money lender Act which, if implemented
will substantially reduce the profitability of the Company as Kerala accounts to 24%
of Companys business. Moreover, there is a good probability for gold price to get
corrected after this prolonged bull run which may reduce the ticket size of the loans,
leading to a drop in growth and associated profitability. We are quite bullish on the
growth potential of this firm but we would like to avoid the scrip until the
abovementioned factors are sorted out and the scrip is available at a deep discount.
INTRODUCTION OF THE MUTHOOT FINANCE LTD
Incorporated in 1997, Muthoot Finance Ltd. is Indias largest gold loan
Company. It is a subsidiary of Muthoot Group which is headquartered at Kochi, India.
It provides personal and business loans secured by gold jewellery, or Gold Loans,
primarily to individuals who possess gold jewellery but could not access formal credit
within a reasonable time, or to whom credit may not be available at all, to meet
unanticipated or other short-term liquidity requirements. It has the largest branch
network among gold loan providers in India with 1921 branches and a strong presence
in the underserved rural and semi-urban markets. In 2010, it received a fund infusion
of Rs.250 cr. from
private equity players like Baring India Private Equity, Matrix Partners India, Kotak
India Private Equity Fund and Well come Trust for a 6% stake in the Company. In
2011, well comes Trust picked up an additional 1% stake from the promoters, taking
the total stake of private equity investors to 7%.






HISTORY - MUTHOOT FINANCE LTD

Our Company was originally incorporated as a private limited company on
March 14, 1997 with the name The Muthoot Finance Private Limited under the
Companies Act. Subsequently, by fresh certificate of incorporation dated May 16,
2007, our name was changed to Muthoot Finance Private Limited. The Company
was converted into a public limited company on November 18, 2008 with the name
Muthoot Finance Limited and received a fresh certificate of incorporation
consequent upon change in status on December 02, 2008 from the RoC.
Merger with Muthoot Enterprises Private Limited Our Company, along with
Muthoot Enterprises Private Limited, filed a composite scheme of arrangement
bearing C.P. Nos. 48 and 50 of 2008 under the Companies Act before the High Court
of Kerala (Scheme of Amalgamation). The Scheme of Amalgamation was approved
by the board of directors of our Company through the board resolution dated April 28,
2008.
Pursuant to the approval of the Scheme of Amalgamation by the High Court of
Kerala by an order dated January 31, 2009, Muthoot Enterprises Private Limited was
merged with our Company, with effect from March 22, 2009 and the High Court of
Kerala had instructed all the parties to comply with the statutory and other legal
requirements to make the Scheme of Amalgamation effective.

The company on March 22, 2009 filed a certified copy of the order of the High
Court of Kerala with the RoC. With the successful implementation of the Scheme of
Amalgamation, the undertaking of Muthoot Enterprises Private Limited along with its
assets and liabilities was transferred to and vested in our Company.

KEY EVENTS, MILESTONES AND ACHIEVEMENTS YEAR

1. 2001 RBI license obtained to function as an NBFC.
2. 2008 Obtained highest rating of F1 from Fitch Ratings for short term debt of Rs.
200 million.
3. 2009 Retail loan and debenture portfolio of the Company exceeds Rs. 500 million.
4. Merger of Muthoot Enterprises Private Limited with the Company
5. 2010 F1 rating obtained from Fitch Ratings affirmed with an enhanced short term
debt of Rs. 400 million.
6. 2007 Retail loan portfolio of the Company crosses Rs. 10 billion.
7. RBI accords status of Systemically Important ND-NBFC.
8. Branch network of the Company crosses 500 branches.
9. Net owned funds of the Company crosses Rs. 1 billion.
10. 2008 Net owned funds of the Company crosses Rs. 2 billion.
11. Retail loan and debenture portfolio crosses Rs. 20 billion and Rs. 10 billion
respectively.
12. F1 rating obtained from Fitch Ratings affirmed with an enhanced short term debt
of Rs. 800 million.
13. Overall credit limits from lending banks crosses Rs. 5 billion.
14. Conversion of the Company into a public limited company.
15. Fresh RBI license obtained to function as an NBFC without accepting public
deposits, consequent to change in name.
16. 2009 Retail loan and debenture portfolio crosses Rs. 30 billion and Rs. 15 billion
respectively.
17. Net owned funds of the Company crosses Rs. 3 billion.
18. Gross annual income crosses Rs. 5 billion.
19. Overall credit limits from lending banks crosses Rs. 10 billion.
20. 2010 Retail loan and debenture portfolio crosses Rs. 50 billion and Rs. 20 billion
respectively.
21. Net owned funds of the Company crosses Rs. 4 billion.
22. Overall credit limits from lending banks crosses Rs. 20 billion.
23. ICRA assigns A1+ rating for short term debt of Rs. 2 billion.
24. CRISIL assigns P1+ rating for short term debt of Rs. 4 billion.
25. Branch network of the Company crosses 1,000 branches.
26. Demerger of the FM radio business into Muthoot Broadcasting Private Limited.
27. Private equity investment of an aggregate of Rs. 1,575.45 million from Matrix
Partners India Investments, LLC and Baring India Private Equity Fund III Limited.

Corporate history
The Group traces its business roots to 1887 from patron founder Ninan Mathai
Muthoot. The Group is named after Mr. Mathew M Thomas (popularly known as
Muthoot Pappachan). It started with retail provisions business and then moved into
chits, finance against gold and other financial services. MPG has diversified into other
businesses including hospitality, real-estate, automotive dealerships,
health and alternate energy.
Financial Services
Muthoot Pappachan Group has multiple companies under its financial services
vertical. These include:
Muthoot Fincorp
Muthoot Fincorp Limited is a proactive Systemically Important Non-Deposit Taking
Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India.
The company is a mass provider of finance against gold and other loans, with over
2600 branches pan India and has an average of 50,000 walk in customers per day. and
now mpg has more than 3700 branches across the india MFL netted a revenue of INR
15070 Million, with a profit of INR 2990 Million for FY 2011-12.
[1]

Muthoot Capital Services
Muthoot Capital Services Limited primarily offers vehicle loans, including two-
wheeler & three-wheeler loans. It has established its base in the rural and semi-urban
areas of South India and has ventured into other states like Maharashtra, Gujarat and
Goa. MCSL is listed on the Bombay Stock Exchange with revenue of INR 670 Mio
and a profit of INR 155 Mio for FY 2011-12.
[2]

Muthoot Housing Finance Company
Muthoot Housing Finance Company is an emerging home financier in India for the
lower and middle income segment and MPG plans to invest INR 1000 Mio in this
venture in the near future. The company plans to set up 25 branches initially for the
housing finance business and also leverage the strength of the Groups existing base
of over 1.5 million gold loan customers.
[3]

Muthoot Mahila Mitra
Muthoot Mahila Mitra (MMM) is the microfinance arm operating under the Groups
flagship company, Muthoot Fincorp, and aims to serve the lower sections of the
society through rural women entrepreneurship, and skill development in association
with NABARD & ROPE.

Automotive
The Muthoot Papachan Group has automotive dealerships in various locations across
Kerala. It has dealerships of Jaguar, Land Rover, Honda cars,Honda and Yamaha
bikes.
[5]

Hospitality
Muthoot Plaza, the one of its kind star hotel in Trivandrum (Thiruvananthapuram) is
to become the Hilton Garden Inn. The hotel reopened on 27 December 2013 after
renovation as Hilton Garden Inn with 127 rooms in the business class hotel category.
The iconic Vivanta by Taj (previously known as Taj Green Cove) at Kovalam, is one
of the internationally renowned Taj Hotels and also one of the jewels in MPGs
Hospitality Crown. MPG's upcoming properties include three business-class hotels
and one five-star resort, to be located in Chennai and Kochi. A luxury serviced
apartment is under development in Trivandrum. The Muthoot Skychef, with a facility
spread over 32,000 sq ft, serves airlines such as Air India, Indian Airlines and Qatar
Airways, and charters and VVIP flights.
[6]

Real Estate
MPG Hotels and Infrastructure Ventures is a real estate development company
headquartered in Trivandrum. The Group is currently developing 6 hotels, to be
operated by international brands, as well as commercial and residential spaces in
India. Muthoot Technopolis, located in Kochi, is an IT park, with a built-up area of
355,000 square feet wherefrom global IT Majors are operating.
[7]

Alternate Energy
MPG has been setting up wind farms in Tamil Nadu, India since 1993. The total
installed capacity in wind power is 25 mega watts, with an investment of INR 1250
Mio. MPG has put plans in place to double its wind power generation capacity in the
near future.
Entertainment
The Group owns the 943 seater DTS Sound Kripa Cinema in Trivandrum.
Muthoot Fincorp Limited, the flagship Company of the Muthoot Pappachan Group
(MPG) ; established in 1887, the Muthoot Pappachan Group (MPG) is a diversified
conglomerate with an overwhelming presence in multiple verticals. A journey of a
thousand miles begins with a single step. True to this adage, the group planted its
roots in retail trading and later diversified into various sectors including Financial
Services, Hospitality, Automotive, Real Estate & Infrastructure, IT Services,
Healthcare, Precious Metals, Global Services and Alternate Energy .
Over the years MPG has grown to become a significant entity in the Indian business
landscape. Currently it has an army of 20,000 employees, serving over a million
customers. MPG's customer-centric approach an innovation in terms of new products
that cater to changing customer needs have helped in winning the loyalty of
innumerable customers, as well as attracting new ones. Adapting the latest technology
and new ways to serve the customers without compromising on basic principles and
ethics, that it has been following since its inception, is the backboneof Muthoot
Pappachan Group. MPG has grown to encompass unimaginable proportions.

The Muthoot Pappachan Group has established a business without boundaries, where
challenges are considered stepping stones to progress. MPG strives to take the world
forward and with ambition at work, the possibilities are infinite!

Muthoot Fincorp is a finance company that caters to the financial needs of retail and
institutional customers. We are registered with the Reserve Bank of India as a
systemically important non-deposit taking non-banking finance company (NBFC)
with a paid up capital of Rs 186.56 Crores and a Net Worth of Rs 1249.85 Crores as
on 31-03-2014. At Muthoot Fincorp Limited, we are focused on providing a host of
financial services. Our services comprise of a mix of retail offerings in the areas of
gold loan & other loan products including Auto loans, Home Loans, Micro Finance
Loans, Investment products. We have been offering these services to our customers
across India with a wide network of over 3800 branches. We believe in three
parameters when it comes to financial services delivery, i.e. people, process &
technology. Heavy investments have been made in these three parameters, and we
expect these would propel our progress as a global retail financial conglomerate.

Muthoot Pappachan Foundation
Philosophy & Outlook
Muthoot Pappachan Foundation (MPF), a Public Charitable Trust was formed in the
year 2007 as the CSR arm of the Muthoot Pappachan Group to facilitate CSR
activities for the entire Group.Planning and implementing various CSR activities
towards the set objectives of the organization and facilitate the CSR programmes
through various group companies of MPG, is the major responsibility of MPF.

CSR objectives of the Muthoot Pappachan Group
1. To build a framework of CSR activities with a philanthropic approach in line
with business unit objectives, which also benefits the organization at large
Social returns together with financial returns, while imbibing the organisation's ethos
and value systems.
Build sustainability for the organization by 'Engaging the Community.'
To build a corporate brand through CSR
For other stakeholders make it "an integral part of the company's DNA, so much so
that it has to be an organic part of the business ".
CSR Theme
Sustainability is the new interest zone in the CSR space; wherein MPG is looking to
partner projects that ensure sustainability in the long term. MPF will be planning and
implementing strategic CSR initiatives which would be a blend of philanthropy and
business; looking for the combined social and economic benefit of all stakeholders.
The benefits foreseen through the strategic CSR efforts are:
To effectively communicate the organization's goals and direction
Enhanced brand value and reputation
Long-term sustainability for the organization and society
Improved financial performance
Build the relationship with businesses in the community and with local
authorities
Good relations with government and communities
A license to operate
With a long term and futuristic perspective, the entire range of CSR activities
undertaken by the various group companies is streamlined through Muthoot
Pappachan Foundation. The CSR programs of Muthoot Pappachan Foundation are
bound by the theme- HEEL
Health
Education
Environment
Livelihood
All the MPG companies will be leading their own CSR initiatives within the HEEL
themes, specifically involving their staff and customers. MPF facilitates this process.
Other than directly MPF-run CSR initiatives, activities would be initiated from the
following divisions:
Finance (MPG NBFCs)
Hospitality
Real Estate
Automobiles
Healthcare (Life Brigade Hospital)
The stakeholders of MPG can be categorized as follows:
Customers
Employees
Corporate
Other stakeholders (NGOs, Corporate partners)
Govt. sector
Public
Marginalized Communities

Major CSR Initiatives within the HEEL Themes:
1. The Streejyoti Program
(Micro-Finance Team) - Livelihood Theme
Objective: To ensure competitiveness through the development of managerial skills of
the members, which in turn, would translate to higher incomes and better lifestyles?.
Streejyoti is a joint initiative of the Muthoot Pappachan Group and Action
International created to educate budding women entrepreneurs and help them be
financially literate. This program has coverage in Kerala, Karnataka and Tamil Nadu
and more than 25,000 women entrepreneurs have been trained to date.
2. Muthoot Life Blood Directory
(Muthoot Fincorp Ltd & Medicare) - Health Theme
Muthoot Pappachan Lifeblood Directory creates a platform for all the good souls that
are willing to donate blood and save precious lives. We are targeting to create the
largest Donor Directory in the country involving our stakeholders from all the MP
Group companies.
This Directory was piloted in Kerala from 1
st
October 2012 (National Blood Donor
Day) through the 800+ MFL branches across the state. So far around 30,000+ Donors
have voluntarily registered in the Directory. A help desk at Head office, Trivandrum
facilitates the process of donor management and helps patient-donor interface to get
connected to concerned MFL branches in their city
3. Medical Camps
(Muthoot Fincorp Ltd) - Health Theme
This year, MFL's branches conducted over 200 eye check-up camps, in partnership
with various eye hospitals in the state.
Free check up and cataract surgeries (IOL) were offered to staff, families and
customers. Also, a subsidy was offered on selected services from these hospitals in
case of extended treatments.
There is a good demand for eye camps and other medical camps from rural areas and
MPF is taking efforts to extend it to other states too.
4. Adoption of Villages (Educational Support for children)
(Hospitality & MFL) - Education
Two villages have been adopted for providing educational support for children from
economically deprived families.
Konni (Pathanamthitta)
Panathura (Thiruvananthapuram)
This program me is facilitated by Rajagiri out REACH, the extension wing of Rajagiri
School of Social Sciences.
5. Disability and Rehabilitation
(Medicare) - Health Theme
Swasraya Training and Rehabilitation Centre
Paraplegia (total or partial crippling below the waist on account of spine injuries) is an
affliction tormenting the lives of hundreds of people in Kerala. Road accidents and
accidental falls from trees or high-rise buildings are the causative reasons, and
tragically most victims come from the 15-45 age groups belonging to low-income
families. Swasraya provides support for these individuals in various forms.
MPF supports Swasraya in developing their infrastructure for the rehabilitation centre
in Mulanthuruthi.

Vision Statement

To be The Most Trusted Financial Service Provider,
at the Doorstep of the Common Man,
Satisfying him Immediately with
Easy and Simple Products.

Alliance Partners
We have strategic alliances with leading companies which offers our customers
access to premium services at affordable costs.


Western Union Money Transfer
Money Transfer

Franklin Templeton
Mutual Funds

Ezremit Money Transfer
Money Transfer

Xpress Money
Money Transfer

Money Gram Money Transfer
Money Transfer

Trans Fast Money Transfer
Money Transfer

HDFC Mutual Fund
Mutual Fund

IDFC Mutual Fund
Mutual Fund

1. Corporate Ethos

Let us not judge ourselves by the profit we make but by the trust and the confidence
that people have in us. Let us cherish and nurture that trust and ensure that every
person who deals with us deals with the confidence that he will not be misguided but
his interests will be carefully protected.
Even before the word ethos found a place in the corporate lexicon, Muthoot Finance
Ltd. imbibed a work culture based on conscience. Since its inception, the company
has nurtured trust as its most prominent value. We are committed to keep this heritage
alive throughout the generations to come.
At Muthoot Finance Ltd. we are committed to creating a balance. We believe in a
simple yet profound theory of from excess or scanty, to appropriateness. A
prominent example of this is our financial inclusion policy. The company provides
gold loan on extremely easy terms and conditions to people of each segment of the
society. Our gold loan range begins at Rs. 1500 and extends to a maximum of Rs. 1cr.
Driven by the invaluable trust and commitment that people have shown in us through
centuries, we created a reputable market image.
Our Values
Being a prominent venture of the Muthoot Group, Muthoot Finance Ltd. carefully and
passionately imbibes the values of the former. Our take pride in our strong foundation
which is deeply rooted in the following pillars :
Ethics: Our main aim is to put the needs of the customer first before anything
else. We strive to provide you with the best quality of service under the Muthoot
Brand Umbrella and we do the same with a smile.
Values: Accountability for all our operations & services and towards the society
makes us a socially responsible and intelligent citizen. Our empire has grown
leaps and bounds on the basis of these values. The times may change, but our
values will remain unchanged.
Reliability: With an unblemished track record throughout the markets we serve;
and across national as well as global boundaries, Muthoot Finance values its
commitment to customer-service.
Dependability: We do not judge ourselves by the profit we make but by the trust
and confidence that people have shown in us for the past 127 years. Over 6
million people have turned to us for help in their hour of need just because of this
guiding principal of ours.
Trustworthiness: We pledge loyalty in our operations, fairness in our dealings
and openness in our practices. At Muthoot Finance Ltd., we embrace policies and
practices that fortify trust.
Integrity: The value is innate to a corruption-free atmosphere and an open work
culture. We at Muthoot Finance Ltd. therefore cultivate transparency as a work
ethic.
Good Will: Muthoot Finance serves more than 6 million customers across the
country. We add over 81000 customers each day to our customer base. With an
unmatched goodwill, the company shoulders the responsibility of creating a
deserving brand image
Muthoot Fincorp (MF) was established to unify all group businesses pertaining to the
Non-Banking Financial Sector. MF is today counted among the premier financial
institutions in South India, with over 360 branches offering a whole gamut of products
and services including Gold Loan, Debentures, Swarnavarsham, Life Insurance,
General Insurance, Home Loan, Auto Loan, Money Transfer and Investment
Solutions to meet the lifetime needs of customers


BACKGROUND - MUTHOOT FINANCE LTD
Muthoot finance is a flagship company of the Muthoot Group based in Southern
India. The group has a presence in diverse businesses including financing, healthcare,
real estate, education, hospitality, forex, wealth management services, money transfer
services, power generation and entertainment.
Muthoot Finance Ltd (MFL), incorporated in 1997, is the Kerala based largest
gold financing company in India in terms of loan portfolio. The company offers gold
loan to individuals like small businessmen, vendors, traders, and salaried individuals
who cannot access formal credit for reasons like lack of credit history, documentation,
accessibility. The company generally gives small ticket loans (average ticket size of
~`31000) with a tenor not exceeding one year, thereby limiting interest risk and asset-
quality concerns. The loan-to-value varies from 60%-85%. Muthoot Finance Gold
Loan portfolio as of November 30, 2010 comprised approximately 4.1 mn loan
accounts in India which it serviced through 2263 branches across 20 states. The
company has further increased its branch network to 2611 branches as of February 28,
2011, servicing an average of 67,953 customers per day in the month of February
2011. As of February 28, 2011, the company has employed 15,664 persons. Other
then Gold Loans business, the company provides money transfer services through
their branches as sub-agents of various registered money transfer agencies.
PRODUCT AND SERVICES OF THE MUTHOOT FINANCE
1. GOLD LOAN

Muthoot Finance, Indias largest gold loan company is the first choice of Indians who
want to make their dream a reality. May the dream be to start their own business or to
buy their own home, for over 124 years Muthoot Finance has helped almost every
Indians dream come true. Trusted by over 70000 customers every day, Muthoot
Finance Gold Loan has services and products that fit the need of any customer,
making it the quickest, most convenient and safest way to take a gold loan.
Key features of Gold Loan:
Loan disbursal in 5 minutes
Loans starts from 1,500 to 1 Crore
Minimal documentation and credit assessment requirements
High quality customer service in short response time
Evaluation of gold ornaments takes place in house.
Safety of Gold Ornaments: All branches as equipped with Strong Rooms for
keeping safe custody of Gold Ornaments
Gold Loan available at over 3,000 Muthoot Finance branches across India
0% processing fees
Pre-payment option-without any penalty

GOLD LOAN SCHEMES
Scheme Name Value (per gram) Interest (% p.a.)
True Value Personal Loan (TPL) Rs. 1,035/- 12%
Super Value Personal Loan (SPL) Rs. 2,260/- 24%
Real Value Personal Loan (RPL) Rs 1,960/- 18%
Express Personal Loan (XPL) Rs. 2,090/- 21%

2. GOLD COINS
Now invest your wealth in the ever rising power of Gold with the Muthoot Precious
Metals Corporation. 24 carat Pure Gold Coins: Muthoot Precious Metals Corporation
presents Gold Coins with 999% purity (24 Carat). Invest in safe, secure and profitable
Gold Coins.
The Gold Coins hold many advantages:
999% pure
Finance schemes with easy monthly installments
Appreciating asset
Higher return on investment with no risks
Available in denominations such as 2g, 4g, 8g, 20g and 50g to suit every
pocket.
The ideal gift for your near and dear ones
Silver Coins
999% pure Silver Coins
One of India's few financial players that deals in Silver Coins
Available in 50 gm and 100 gm
Available at over3, 000 Muthoot Finance brances across India
3. MONEY TRANSFER
One of the finest Money Transfer services in India, with over 700,000 transfers
annually, Muthoot Money Transfer is the largest payout centre in India. Muthoot
Money Transfer allows real time money transfers from across the seas, with the
money reaching the receiver in less than 10 minutes. The money can be transferred
from First Remit/Coinstar, Xpress Money, Ez Remit, Money Gram, Royar Money,
Global Money Transfer, Western Union, Transfast, Instant Cash and even Muthoot
Finances own branches abroad. The service boasts low costs, high exchange rates
and NO additional service charge to the receiver.
The key highlights of this service are:
Fastest Money Transfer facility
No bank account needed for amounts up to Rs. 50,000
The receiver does not have to pay any service charge
Certified by the RBI
Access it in any of the 3000 branches across the country



4. FOREIGN EXCHANGE
Muthoot Foreign Exchange offers you currency exchange facilities as well as allows
you to buy and sell foreign currency and Travellers cheques with Muthoot Foreign
Exchange service. With the wide network of almost 3000 branches, we ensure ease of
transaction. Muthoot Foreign Exchange helps you get competitive rates for all
currencies and notes in 35 major currencies as well as 100 miscellaneous ones!
A few features of our Foreign Exchange service:
Buying and selling of all major Travelers cheques and Travel Cards
Commission free encashment of Travelers cheques
Competitive rates for all currencies
Remittance of funds abroad for various purposes

5. MPOWER CARD
Your life is made infinitely easier with the Muthoot MPower Card, which is a
unique identity card with numerous benefits:
Access it anywhere in India
Earn Loyalty Points on every transaction at ANY Muthoot branch
Redeem these Loyalty Points for attractive gifts
Get Rs. 20 per gram extra on Gold Loan
Keep all your jewelry in our lockers free of cost (No locker charges!)
Rs. 50,000 Personal Accident Insurance coverage
Deposit and withdraw money from any branch on Real Time
Special overdraft scheme for MPower Cardholders.

6. TRAVEL SMART
Within just a few months of its launch Muthoot Travel smart has already become one
of the leading IATA (International Air Transport Association) accredited agencies and
has got certified by IRCTC. Muthoot Travel smart offers all the services of a travel
agency and more, such as travel insurance and foreign exchange Muthoot Travel
smart carries forward the groups core values of helping India make the right decision
with their money by helping you during your travels, both familial and official. In
addition to the 3000 branches of Muthoot Finance in India, the services of Muthoot
Travel smart can be accessed in 6 offices overseas as well.
The services offered under Travel smart include:
International & Domestic Ticketing
Railway Ticketing
Tours
Passport, Emigration & Visa
Travel Insurance


VALUE ADDITION IN PRODUCT AND SERVICES OF THE MUTHOOT
FINANCE LTD
We have challenged ourselves to perform better than the best. We have now
launched a new venture in Gold Financing, offering Customers loan against the
security of Gold Exchange Traded Funds (ETFs) units. This will not only add value to
the services but also enable the Company to service financial requirements of new
Customer segment.
The visionary zeal, constant innovation and customer-oriented product &
service delivery deployed at every phase of its growth are indeed exemplary. And
Muthoot Group is now all set to go places, backed by its assets built by extraordinary
people and high values.
With the guiding principles of honesty, sincerity, confidence and service, Muthoot
Group has indeed come a long way. These values continue to drive all business
decisions of the Group Companies. With customer-centric products and services to
offer, the Group has been constantly innovating and evolving to deliver superior
products, transparent workplace practices, easy accessibility and personalized services
at all levels. Perhaps why, Muthoot Group has earned the trust of millions of
customers and associates across the country.

1. Muthoot Finance launches new gold loan scheme

Indian non-banking finance company (NBFC) Muthoot Finance Ltd Friday
announced the launch of a new gold loan scheme that will provide loans to public
against the security of Gold Exchange Traded Fund (ETF) across the country.
The new scheme Gold ETF Loan Scheme which will be made available to
the customers by July-end 2011 will help customers get loan against their Gold ETF
units to the extent of 85% of the net asset value (NAV) of ETFs, said a press release
issued by Muthoot Finance.
Gold ETFs are mutual fund units issued by Asset Management Companies
against 995 purity physical gold. They are listed and traded on stock exchanges and
can be bought and sold like stocks on a real-time basis. Gold ETFs were valued at Rs
50 billion as of June 2011.
Loan against Gold ETF is a scheme through which Muthoot Finance plans to
venture into totally new segment of gold financing which would not only add value
but also enable the company to service the financial requirements of newer customer
segments, said George Alexander Muthoot, managing director of Muthoot Finance
during the launch.

2. MUTHOOT FINANCE LAUNCHES THE WESTERN
UNION

MONEY TRANSFER
SM
SERVICE:
May 27, 2011, Kochi, India: International money transfer consumers across Kerala -
Indias foremost remittance driven economy will now be able to receive their Western
Union Money TransferSM transactions from Muthoot Finance - a leading Kerala
based financial institution.
Muthoot Finance will now offer Western Union Money Transfer services from
its countrywide network of 2800 locations linking them to Western Unions network
of more than 400,000 locations in over 200 countries and territories across the world.
Launching the service, Mr George Alexander Muthoot Managing Director,
Muthoot Finance Ltd said, Here, on this occasion, three of the biggest players of the
Indian Financial Services industry have come together with the intention of providing
a premium money transfer service to customers across the country.
Muthoot Finance Ltd., through its extensive network of branches, aims to
capitalize the huge potential of the money transfer business in India.
With its expansive global network, Western Union is uniquely positioned to
deliver fast, reliable and convenient money transfer services to consumers across
remote geographical locations globally.
Through our agreement with Western Union we have facilitated a number of
classes of trade including retail and banks to offer Western Union Money
Transfers services to the remotest corners of India. The collaboration with Muthoot
Finance is one more step in this direction which would positively impact people
across the 2,800 branches offering the service,

History of GOLD loan
Gold is a brilliant yellow precious metal that is resistant to air and water corrosion. It
is a very soft and pure metal. Gold is the most malleable and ductile metal found on
earth. Thats why it is expensive and it is alloyed with other metals, usually copper
and silver to make it less expensive and harder, a karat is the unit that measures the
purity of gold jewellery or else it is hallmarked with a three digit number that
indicates the parts per thousand of gold. Some countries hallmark gold with a three
digit number that indicates the parts per thousand of gold. The alloyed gold comes in
many colours and may not be bright yellow all the time. It has long been a values
commodity, particularly in India where it is considered auspicious, and had been in
use for centuries in the form of jewellery, coins, bullions, electronics, and dentistry,
also for other medical purposes. Though gold is a highly liquid asset, it wasnt until
recently that consumers leveraged it effectively to meet their liquidity needs.
Lenders provide loans by securing gold assets as collateral. Compared with the rest of
the world in India the gold loan market is big business. Until a decade back, most of
the lending was in the unorganized sector through pawnbrokers and money lenders.
However this scenario changed with the entrance of organized sector players such as
banks and non banking finance companies (NBFCs) which now command more than
25% of the market. The organized gold loan market has grown at 40% CAGR form
2002 to 2010. NBFCs have been a major driving force behind this growth given their
extensive network. Faster turnaround time, higher loan to value ratios and the ability
to serve non-bankable customers. Of late, banks have improved their gold loan
product features and services. Coupled with comparatively lower interest rates
charges, bank stand to gain market share at the expanses of NBFCs in the near future.
The eligibility criteria required to apply for gold lone in India includes three factors.
Firs-tly, the person has to be above 18 years of age. Secondly, the person applying or
a gold loan in India should have a ID & address proof and last but not the least the
applicant should be working on a regular salary basis , means there should be a
constant flow of income.
BACKGROUND: GOLD AND THE INDIAN SOCIETY
Gold has traditionally been among the most liquid asset and is an accepted universal
currency. it has traditionally been consumed by individuals in the form of jewellery,
especially in India were it is considered auspicious. Gold is presumed to be a safe
haven in times of economic uncertainty, a fact exemplified by a 30% increases the
value of gold over the past year India is one of the largest market of gold accounting
for approximately 10% of the total world gold stock as of 2010. Rural India accounts
for 65% of this gold stock. Though gold price have increased 19% CAGR from 2002
to 2010, gold stock in India has grown at 22% CAGR During the same period to
18000 tons (Rs.32000 billion). The demand for gold has followed a regional trend
with southern India accounting for 40% of annual demand, followed by the west
(25%), north (20-25%) and east (10-15%).
Looking for Gold Loan Market
The Key Players in the Indian gold loan market include the unorganized sector,
banks _ public/private/cooperatives and NBFCs. While the unorganised sector,
comprising local pawnbroker and money leader has traditionally dominated the gold
loan market for money decades and still commands nearly 75% of the market the
organized sector led by NBFCs is catching up fast. The organized sector has grown at
rapid paces of 40% CAGR form the 2002 to 2010 and is expected to grow by 33%
to41% CAGR in 2011
And in doing so these companies are challenges the dominance of the large
unorganized sector within the organized sector, NBFCs have grown at a repaid rate
from 18.4% in FY to 32.2% in FY10. (Source: cognizant 20-20 insight jan.2012)
Muthoot finance
With a tagline loan in just 5 minutes muthoot fiancs is a Indias largest gold loan
company & is the fast choice of Indian who want to make their dream a reality. May
the dream be to start their own business or to buy their own home: muthoot finance
has helped almost every Indians dream come true, trusted by over 76000 customer
every day muthoot finance gold loan has services and products that fit the need of any
customers, making it the quickest ,most convenient and safest way to take gold loan
Headquartered in the southern Indian state of Kerala, their operating history has
evolved over a period of 72 since M George muthoot (the father of our promoter)
founder a gold loan business in 1939 under the heritage of a treading business
established by his father, ninan mathai muthoot in 1987. since our formation, we have
broadened the scale and geographic scope of their retail leading operation so that, as
of march 31, 2008, 2009, 2010, 2011 and in the period ended September 30, 2011
revenue from their gold loan business constituted 95.97% 96.71% 98.08% 98.75%
and 99.01% respectively , of their total income,








DATA ANALYSIS AND INTERPRETATION

1. Balance Sheet
Table No.1

Classification of Balance Sheet of Muthoot Fincorp from 2007-2013

(Rs. in Crores)
PARTICULARS 2007 2008 2009 2010 2011 2012 2013
ASSETS
Fixed Assets 14414

13550 12851 12920 12796 13960 18813
Investment 543

543 606 293 514 538 653
Current Assets 7312

8246 14333 15630 20375 26317 34511
Mis.Expenditure 536

378 294 215 129 59 0.00
P&L a/c 2765

- - - - - -
Total Assets 25570

22717 28084 29058 33854 40874 53977
LIABILITIES



Shareholders
Funds

5290 5037 10306 12601 17313 23063 27984
Loan Funds 12969

8690 5770 4298 4180 3045 7539
Current
Liabilities
& Provisions
7311 8990 10166 10675 10949 13198 17122
Deferred
Liabilities
- - 1842 1484 1412 1568 1332
TOTAL
LIABILITIES
25570

22717 28084 29058 33854 40874 53977






2. Comparative Balance Sheet
Table No.2
Comparative Balance Sheet of Muthoot Fincorp from 2007-2008 to 2012 2013
( Rs. in Crores)
PARTICUL
ARS
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

ASSETS
Fixed Assets

(864) (5.9) (699) (5.1) 69 0.53
(124
)
(0.9
)
1164 9.09 4853 34.76
Investment
nt
0

0


63


11.6

(313)


(51.
6)


221

75.4

24 4.66 115 21.37
Current
Assets


934 12.77 6087 73.8 1297 9.04
474
5
30.3 5942 29.16 8194 31.13
Mis.
Expenditure
(158) (29.4) (184) (22) (79)
(26.
8)
(84) (39) (70) (54) (59) (100)
P&L a/c - - - - - - - - - - - -
LIABILITI
ES

Shareholders
Funds
(253)

(4.78)

5269

104.6

2295

22.2
6

471
2

37.3

5750 33.21 4921 21.33
Loan Funds
(427
9)
(32.9) (2920) (34)
(147
2)
(25.
5)
(118
)
(2.7
)
(113
5)
(27) 4494 147.6
Current
Liabilities&
Provisions
1679 22.96 1176 13.08
(868
2)
(85.
4)
(72)
(4.8
)
2249 20.5 3924 29.73
Deff.
Liabilities
- - - - 8833 479 274 2.56 156 11.04 (236) (15)




Interpretation:
Long Term Financial Position:
The comparative Balance Sheet of the company reveals that during the financial year
2008 2009 there has been a large increase in fixed assets (34.76%) compared to 2007-
2008(9.09%) while the long term liabilities which contains shareholders funds and long
term loans also show growth. Long term loans show an increase of 147.6% in 2008-09
which means that most of the fixed assets are financed by long term loans.
There has been an increase in plant and machinery in 2009 compared to 2008 which
means that it will increase production capacity of the concern.
Current Financial position and liquidity position:
The company has increased its current assets by increasing the level of inventories at
Rs.10121 crores in 2009 compared to Rs.6857 crores in 2008. The current liabilities
highly fluctuate and show continuous increase in 2007-08 (20.5%) and 2008-09 (29.3%).
The Net Working Capital was in peak by the continuous increase after the year 2009. The
company got good liquidity position due increase in Current assets but it may affect the
profitability of the company.
The overall financial position of the company is very good.









3. Income Statement
Table No.3

Classification of Income Statement of Muthoot Fincorp from 2007 to 2013
(Rs. in crores)
PARTICULARS 2007 2008 2009 2010 2011 2012 2013
Sales
EBIDTA
Less:
Depreciation
19207
2165
1147
24178
4652
1123
31805
11097
1127
32280
7381
1207
39189
10966
1211
45555
12955
1235
48681
10941
1285
EBIT
Less: Interest
Charges
1018
1334
3529
901
9970
605
6174
468
9755
322
11720
251
9656
253
PBT
Less : Tax
(316)
(12)
2628
116
9365
2548
5706
1693
9423
3221
11469
3932
9403
3229
PAT (Net Profit) (304) 2512 6817 4013 6202 7537 6174

4. Comparative Income Statement
Table No.4
Comparative Income Statement of Muthoot Fincorp from 2007-2008 to 2012- 2013
( Rs.in Crores)
PARTIC
ULARS
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

change % of
change
change % of
change
change % of
change
change % of
chang
e
change % of
change
change % of
Change
Sales
EBIDT
Less:
Depreci
4971
2487
(24)
25.9
114.8
(2.1)
7627
6445
4
31.5
138.5
0.35
475
(3716)
80
1.49
(33.4)
7.09
6909
3585
4
21.4
48.5
0.3
6367
1989
24
16.2
18.1
1.98
3126
(2014)
50
6.86
(15)
0.04
ation
EBIT
Less:
Interest
Charges
2511
(433)
246.6
(32.4
)
6441
(296)
182.5
(32.7)
(3769)
(137)
(38)
22.64
3581
(146)
58
(31)
1965
(71)
20.1
(22)
(2064)
2
(17.6)
0.7

PBT
Less :
Tax
2312
104
731.6
866.6
6737
2432
256.3
2096
(3659)
(855)
(39)
(33.5)
3717
1528
65.1
90.2
2046
711
21.7
22
(2066)
(703)
(18)
(17.8)
PAT
(Net
Profit)
2208 726 4305 171.3 (2804) (41.1) 2189 54.5 1335 21.5 (1363) (18)

Interpretation
The Net Sales figure shows an increasing trend. After the year 2007 it shows
an increasing trend which will help to increase in Net Profit.
The company has sufficient control over its depreciation which shows an
increase of only 0.04% in 2009 over 2008.
The company has considerable change in Interest Charges and rather the latter
has decreased in recent years.
The company has able to attain Profit after Tax of Rs.6174 crores in the year
2009 compare to 7536 crores in 2008 which can be attributed to increase in
cost of goods sold.
It may conclude that there is a sufficient progress in the company and the
overall profitability of the concern is very good.


5. Trend Percentage
Table No.5
Trend Percentage of Muthoot Fincorp from 2007-2008 to 2012- 2013

Base Year 2007 Figure
in %
Particulars 2007 2008 2009 2010 2011 2012 2013
SALES

100

125.88 165.59 168.06 204.03 237.17 253.45
EBIT

100 346.66 979.37 606.48 958.25 1151.27 948.52
FIXED
ASSETS

100 94.00 89.15 89.63 88.77 96.85 130.51
CURRENT
ASSETS

100 112.77 196.02 213.75 283.57 359.91 471.97
CURRENT
LIABILITIES

100 122.96 139.05 146.01 149.76 180.52 234.19
WORKING
CAPITAL

100 81.83 302.55 370.29 554.05 673.81 889.54
CAPITAL
EMPLOYED
TOTAL

100 92.00 121.29 131.65 154.01 171.99 208.88
TOTAL
ASSETS
100 88.84 109.83 113.64 132.39 159.85 211.09

Interpretation:
The sales of the product have continuously increased in all the years up to
2009.The increase in sales is quite satisfactory.
The EBIT grows continuously up to 2008 and decreases slightly in 2009 due to
increase in the cost of goods sold.



6. Common Size Balance Sheet
Table No.6
Common Size Balance Sheet of Muthoot Fincorp from 2007-2013
( Rs.in Crores)
PARTICULARS 2007 2008 2009 2010 2011 2012 2013
ASSETS
Fixed Assets 56.37 59.64 45.75 44.46 37.90 34.15 34.85
Investment 21.23 2.39 2.15 1.00 1.54 1.31 1.209
Current Assets 28.59 36.29 51.06 53.78 60.18 64.51 63.93
Mis.Expenditure 2.09 1.68 1.04 0.76 0.38 0.144 0.00
P&L a/c 10.72 - - - - - -
Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00

LIABILITIES
Shareholders
Funds
20.60 22.17 36.69 43.36 51.14 56.42 51.84
Loan Funds 50.73 38.25 20.54 14.79 12.34 7.44 13.96
Current
Liabilities
& Provisions
28.59 39.58 36.19 5.10 4.17 32.28 31.72
Deferred
Liabilities
- - 6.58 36.75 32.35 3.83 2.46
Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00






Interpretation:
Out of the total investment the owners funds is more compare to outsiders
fund in the company which shows that the company has depended more on its
own funds. It shows that the company is traditionally financed.
The proportion of current assets to total assets has increased comparing to
current liabilities which serve as an evidence for good working capital position
of the company.
Investments, Miscellaneous expenditure and deferred liabilities have their own
limited contribution to their respective side totals.

RATIO ANALYSIS
Liquidity ratios
1. Current Ratio:
Table No.7
Table showing Current ratio
(Rs. In Crores)
YEAR CURRENT
ASSETS
CURRENT
LIABILITIES
CURRENT
RATIO
2007 7282 4777 1.524
2008 8075 6025 1.340
2009 14187 6608 2.146
2010 17384 8108 2.144
2011 20379 6500 2.917
2012 26317 9439 2.788
2013 34511 12228 2.822

An ideal current ratio is 2. The ratio of 2 is considered as a safe margin of solvency
due to the fact that if current assets are reduced to half (i.e.) 1 instead of 2, then also
the creditors will be able to get their payments in full.
Interpretation:
Here, the current ratio fluctuates from year to year but has maintained the ratio above
2 from 2009 onwards which is positive consideration.

CHART 1


2. Quick Ratio:
Table No.8
Table showing Quick ratio
(Rs. In Crores)
YEAR LIQUID ASSETS CURRENT
LIABILITIES
QUICK RATIO
2007 3537 4777 0.740
0
5000
10000
15000
20000
25000
30000
35000
40000
2007 2008 2009 2010 2011 2012 2013
current assets
current liabilities
2008 4993 6025 0.828
2009 9966 6608 1.508
2010 11174 8108 1.378
2011 13728 6984 1.965
2012 19460 9439 2.061
2013 24389 12228 1.994

Interpretation:
The liquid ratio denotes the concern had achieved more than the ideal ratio of 1:1 in
the years 2009 onwards.

CHART 2



3. Net Working Capital Ratio:
Table No.9
Table showing Net Working Capital Ratio

0
5000
10000
15000
20000
25000
30000
2007 2008 2009 2010 2011 2012 2013
liquid assets
current liabilities

YEAR Net Working
Capital
Capital Employed Net Working
Capital Ratio
2007 2505 16541 0.151
2008 2050 15218 0.134
2009 7579 20104 0.377
2010 9276 21438 0.432
2011 13879 24992 0.535
2012 16879 28450 0.593
2013 22283 34552 0.645



CHART 3



Interpretation:
Net Working capital measures the firms potential reserve of funds. It can be related
to net assets. This ratio represents the availability of working capital in relation with
capital employed.
0
5000
10000
15000
20000
25000
30000
35000
40000
2007 2008 2009 2010 2011 2012 2013
net working capital
capiotal employed
Turnover Ratios
1. Fixed Assets Turnover Ratio:

Table No.10
Table showing fixed asset turnover ratio

YEAR GROSS SALES
(Rs IN
CRORES)
FIXED
ASSETS (Rs in
crores)
FIXED
TURNOVER
RATIO (In
Times)
2007 19207 14036 1.36
2008 24178 13168 1.83
2009 31805 12485 2.54
2010 32280 12162 2.65
2011 39189 11598 3.37
2012 45555 11571 3.93
2013 48681 12269 3.96

Interpretation:
Here, the value of fixed assets employed in the business shows a reducing trend which
implies that company didnt add any more fixed asset during the period 2007 2008.
Only the depreciation effect had been given to fixed asset. Fixed turnover ratio has
been increasing which is a good sign because the gross sales have increased
considerably without increasing the current assets.
CHART 4



0
10000
20000
30000
40000
50000
60000
2007 2008 2009 2010 2011 2012 2013
GROSS SALES
FIXED ASSETS
2. Working Capital Turnover Ratio:

Table No.11
Table showing Working capital turnover ratio

Interpretation:
Here, the Working Capital ratio shows a increasing trend from 2007 to 2008 and then
slope downwards due to holding high current assets in the form of cash, bank
balances and receivables in the year 2009 to 2009.


CHART 5


0
10000
20000
30000
40000
50000
60000
2007 2008 2009 2010 2011 2012 2013
GROSS SALES
WORKING CAPITAL
YEAR GROSS SALES
(Rs IN
CRORES)
WORKING
CAPITAL (Rs in
Crores)
Working capital
turnover ratio
(in times)
2007 19207 2505 7.667
2008 24178 2050 11.79
2009 31805 7579 4.196
2010 32280 9276 3.479
2011 39189 13879 2.823
2012 45555 16879 2.698
2013 48681 22283 2.184

3. Debtors Turnover Ratio:
Table No.12
Table showing Debtors turnover ratio
YEAR CREDIT SALES
(Rs. In Crores)
DEBTORS
(Rs. In Crores)
Debtors turnover
ratio
(In times)
2007 19207 1660 11.570
2008 24178 1550 15.598
2009 31805 1908 16.669
2010 32280 1882 17.151
2011 39189 2315 16.928
2012 45555 3048 14.945
2013 48681 3024 16.098

Interpretation:
There has been increase in the turnover ratio from 2007-2010 and has stabilized
thereafter .As the ratio is sufficiently high it can be concluded that efficient
management of the debtors has taken place.

CHART 6




0
10000
20000
30000
40000
50000
60000
2007 2008 2009 2010 2011 2012 2013
CREDIT SALES
DEBTORS
Debt collection period:
Table No.13
Table showing Debt collection period
(In Days)
YEAR COLLECTION PERIOD
2007 32
2008 23
2009 22
2010 21
2011 22
2012 24
2013 23

Debtors collection period measures the quality of debtors since it measures the
rapidity or slowness with which money is collected from them.

CHART 7


INTERPRETATION;
Here, there has been decreasing trend in the debt collection period which is favorable
for the company. Because, the quicker the collection period the better is the quality of
debtors as a short collection period implies quick payment by debtors. Then more the
0
5
10
15
20
25
30
35
2007 2008 2009 2010 2011 2012 2013
COLLECTION PERIOD
COLLECTION PERIOD
utilization of cash collected from debtors. It decreased from 32 days in 2007 to 23
days in 2009.

4. Stock Turnover Ratio:
Table No.14

YEAR SALES (Rs in
crores)
AVERAGE
STOCK (Rs in
crores)
STOCK
TURNOVER
RATIO ( in times)
2007 19207 3745 5.128
2008 24178 3082 7.844
2009 31805 4221 7.534
2010 32280 6210 5.198
2011 39189 6651 5.892
2012 45555 6857 6.643
2013 48681 10121 4.809


INTERPRETATION:
Here, there has been a lot of fluctuation in the Inventory turnover ratio. There has
been an increase in the ratio in 2008 and 2009 but it shows a decreasing trend in 2010
and 2007.In 2008 the ratio showed an increase due to a large increase in sales. But in
2009 there was a large increase in average stock/inventory which contributed to a
lower inventory turnover ratio . This can be attributed to uncertain economic situation
and weak demand of steel in the market. The overall situation is still good enough.






CHART 8



Profitability Ratios
1. Return on Investment:
Table No.14
Table showing Return on Investment

YEAR OPERATING
PROFIT (Rs in
crores)
CAPITAL
EMPLOYED (Rs
in crores)
RETURN ON
INVESTMENT (In
%)
2007 1018 16541 6.154
2008 3530 15218 23.196
2009 9970 20104 49.690
2010 6174 21782 28.344
2011 9755 25476 38.290
2012 11720 28450 41.195
2013 9656 34552 27.946

0
10000
20000
30000
40000
50000
60000
2007 2008 2009 2010 2011 2012 2013
CREDIT SALES
AVERAGE STOCK


Interpretation:
Return on investment shows an increasing trend from 2007 to 2008.However there are
small fluctuations in 2010 and 2009 due to lower operating profits. Average Capital
employed shows regular increase from 2007 to 2009.

CHART 9


2. Return on Shareholders Fund:
Table No.15
Table showing return on Shareholders Fund
YEAR NET PROFIT
(Rs in crores)
SHAREHOLDERS
FUND (Rs in crores)
RETURN IN
SHAREHOLDERS
FUND (IN %)
2007 -304 5290 -5.746
2008 2512 5038 49.861
2009 6817 10307 66.139
2010 4013 12601 31.846
2011 6202 17313 35.822
2012 7537 23063 32.680
2013 6174 27984 22.062
0
5000
10000
15000
20000
25000
30000
35000
40000
2007 2008 2009 2010 2011 2012 2013
OPERATING PROFIT
CAPITAL EMPLOYED

INTERPRETATION:
Here, the Net Profit (i.e.) Profit after Interest and Tax has been in negative in the year
2007 due to a net loss in the corresponding year because of very high interest and
finance charges of the company. But there was a huge jump in net profits in the year
2008-2009 compared the shareholders funds which were responsible for increase in
the return on investment. There has been a considerable increase in shareholders
funds from 2009 onwards which has resulted in stabilizing return on investment.
CHART 10


3. Return on Total Assets:
Table No.16
Table showing return on Total Assets
YEAR NET PROFIT (Rs
in crores)
TOTAL ASSETS (
IN CRORES)
RETURN ON
TOTAL
ASSETS(IN %)
2007 -304 25570 -1.188
2008 2512 22717 11.057
2009 6817 28084 24.273
2010 4013 29058 13.810
2011 6202 33854 18.319
2012 7537 40874 18.439
-5000
0
5000
10000
15000
20000
25000
30000
2007 2008 2009 2010 2011 2012 2013
NET PROFIT
SHARE HOLDERS FUND
2013 6174 53977 11.438

Interpretation:
There has been a considerable in increase in total assets from 2007 to 2009 but the net
profit has fluctuated which has resulted in the fluctuations in the return on total assets.


CHART 11



4. Earnings per Share:
Table No.17
Table showing Earning per Share
YEAR NET PROFIT (Rs
in crores)
NUMBER OF
EQUITY
SHARES ( IN
CRORES)
EARNING PER
SHARE (IN %)
2007 -304 413 -0.736
2008 2512 413 6.082
2009 6817 413 16.506
2010 4013 413 9.716
2011 6202 413 15.016
2012 7537 413 18.249
2013 6174 413 14.949

-10000
0
10000
20000
30000
40000
50000
60000
2007 2008 2009 2010 2011 2012 2013
NET PROFIT
TOTAL ASSETS
Interpretation:
Here the Earning per Share is the result of Net Profit after Tax. It shows the positive
correlation during the period of study. It shows an increasing trend except in the year
2008 and 2009 due to lower net profits than previous years.




CHART 12


5. Net Profit Ratio:
Table No.18
Table showing Net Profit Ratio

YEAR OPERATING
PROFIT (RS IN
CRORES)
SALES (IN
CRORES)
NET PROFIT
RATIO (IN %)
2007 1018 19207 5.300
2008 3530 24178 14.600
2009 9970 31805 31.347
2010 6174 32280 19.126
-1000
0
1000
2000
3000
4000
5000
6000
7000
8000
2007 2008 2009 2010 2011 2012 2013
NET PROFIT
NUMBER OF EQUITY SHARES
2011 9755 39189 24.892
2012 11720 45555 25.727
2013 9656 48681 19.835

Interpretation:
The operating profit and value of sales are the causes for the fluctuation in the Net
Profit ratio. While sales has constantly increased over the years operating profit has
increased but shows some fluctuations. In 2009 the ratio is lower than in 2008 due to
lower operating profits. The reason can be attributed to uncertain economic situation
and higher cost of goods sold as well as weak demand.
CHART 13



6. Operating Ratio:
Table No.19
Table showing Operating Ratio
YEAR OPERATING
COST(RS IN
CRORES)
SALES
(Rs. In crores)
OPERATING
RATIO
(In %)
2007 17940 19207 93.403
2008 19512 24178 80.701
2009 20339 31805 63.949
2010 23675 32280 73.342
2011 26483 39189 67.577
2012 30423 45555 66.783
2013 36848 48681 75.692
0
10000
20000
30000
40000
50000
60000
2007 2008 2009 2010 2011 2012 2013
OPERATING PROFIT
SALES

Interpretation:
A comparison of operating ratio or expenses ratio will indicate whether the cost
components is high or low in the figure of sales. The operating ratio shows a decrease
in trend up to 2008 but shows a slight increase in 2009. Normally 75% to 85% is
considered to be a good ratio for manufacturing undertakings. So the ratio is good in
case for MUTHOOT FINCORP.
CHART 14



7. Payout Ratio:
Table No.20
Table showing Payout Ratio
YEAR DIVIDEND PER
EQUITY
EPS Dividend pay out
ratio
2009 3.3 16.50 20
2010 2.0 9.71 20.59
2011 3.10 15.01 20.65
2012 3.7 18.25 20.27
2013 2.6 14.95 17.39

0
10000
20000
30000
40000
50000
60000
2007 2008 2009 2010 2011 2012 2013
DIRECT MATERIAL
SALES
Interpretation:
The pay out ratio for the year 2009 is 20%, 2010 is 20.59, 2007 is 20.65, 2008 is
20.27% which implies that remaining 80% of earning per share is kept as retained
earning by the company. However in 2009 lesser amount of dividend is given so EPS
is 14.95 and pay out ratio is 17.39 this implies that the company keeps 82% of earning
per share as retained earnings.
CHART 15

NOTE: Here the company had paid dividend only after 2009 in the course of seven
years period from 2007 to 2009.

8. Dividend Yield Ratio:
Table No.21
Table showing Dividend yield

YEAR DIVIDEND PER
EQUITY
MARKET PRICE Dividend yield
2009 3.3 62.87 5.25
2010 2.0 83.30 2.40
2011 3.10 114.30 2.71
2012 3.7 185 2
2013 2.6 96 2.70

0
2
4
6
8
10
12
14
16
18
20
2009 2010 2011 2012 2013
DIVIDENT PER EQUITY
EPS
Interpretation:
This percentage implies that 5.25% of market price of the share was issued as
dividend in the year 2009 and later on it get decreases due to various economic
changes in MUTHOOT FINCORP.
CHART 16



Long Term Financial Position or Solvency Ratios
1. Debt-Equity Ratio
TABLE NO: 21
Table showing Debt-Equity ratio
YEAR OUTSIDERS
FUND
SHAREHOLDERS
FUND
DEBT EQUITY
RATIO
2007 34385 5290 6.5
2008 9419 5037 1.87
2009 5977 10306 0.58
2010 4410 12601 0.35
2011 4155 17313 0.24
2012 2988 23063 0.13
2013 7555 27984 0.27

0
20
40
60
80
100
120
140
160
180
200
2009 2010 2011 2012 2013
DIVIDEND PER EQUITY
MARKET PRICE




CHART 17

Interpretation
The debt-equity ratio is calculated to measure the extent to which debt financing has
been used in a business. From 2007 onwards there has been a decrease in outsiders
fund and a corresponding increase in shareholders funds. This indicates that the firm
is traditionally financed and it is considered to be favorable from a long term
creditors point of view as a high proportion of owners funds provide a larger margin
of safety for them.
Interest Coverage Ratio
This ratio is used to test the debt servicing capacity of a firm The ratio is calculated
as:
Interest coverage ratio = Ebit/Fixed interest charge



0
5000
10000
15000
20000
25000
30000
35000
40000
2007 2008 2009 2010 2011 2012 2013
OUTSIDER'S FUND
SHARE HOLDER'S FUND
TABLE NO: 22
YEAR EBIT FIXED
INTEREST
CHARGES
INTEREST
COVERAGE
RATIO
2007 1018 1339 0.76
2008 3529 910 3.88
2009 9970 607 16.43
2010 6174 472 13.07
2011 9755 333 29.29
2012 11720 252 46.39
2013 9656 326 29.59

Interpretation:
There has been decreasing trend in the fixed interest charges and corresponding
increase in EBIT from 2007-2008.This has led to increase in interest coverage ratio
which is a good sign for the company. There has been a decrease in EBIT in 2009 and
a slight increase in fixed interest charges due to uncertainties in the market, higher
raw material costs and lower steel demand.
CHART 18


0
2000
4000
6000
8000
10000
12000
14000
2007 2008 2009 2010 2011 2012 2009
EBIT
FIXED INTEREST CHARGES
CALCULATION AND INTERPRETATION OF CASH FLOW
STATEMENT
CASH FLOW STATEMENT (in Rs.crores)
PARTICULARS

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Profit before tax


(315.87) 1246.70 9365.35 5705.74 9422.62 11468.73 9403.45
Net Cash Flow
Operating activity
2667.74 7199.45 8899.47 3823.93 5632.91 8378.18 6124.26
Net Cash used in
investing activity
(31.61) (235.76) (286.54) (337.18) (587.53) (1139.89) (4406.47)
Net Cash used in
Fin. Activity

(2,517.34) (5475.51) (4516.63) (3574.26) (1608.19) (3088.68) 2751.30
Net inc./decrease
in cash or
equivalent
118.79 1488.18 4096.30 (87.51) 3437.19 4149.61 4469.09
Cash and
equivalent at
beginning of the
year
416.37 717.31 2035.82 6260.15 6172.64 9609.83 13759.44
Cash and
equivalent at end
of the year

535.16 2205.49 6132.12 6172.64 9609.83 13759.44 18228.53

INTERPRETATION
1. Cash flow statement shows that the profit before tax increases continuously in
2008, 2009, 2010, 2011, 2012 and decreases in 2013 due to unstable economic
conditions.
2. Net cash flow from operating activities increases continuously in 2007 and
2008 due to increase in sales and earnings but it came down in 2009.
3. Net cash outflows in investing activities have been growing in MUTHOOT
FINCORP as cash is being used to purchase fixed assets like plants and
machinery and higher development costs.
RECOMMENDATION AND SUGGESTION

MUTHOOT FINCORP should always try to maintain an adequate quantum of net
current assets in relation of current liabilities as to keep a good amount of liquidity
throughout the year.
The company should tighten the debt collection efforts and should reduce the
amount tied up in debtors. In order to improve the quality of debtors and also to
bring down the amount tied-up in debtors, a periodical report of the overdue may
be prepared and effective action may be taken by the management time to time to
expedite the collections.
Inventory turnover ratio is lesser in MUTHOOT FINCORP compared to other
competitors which indicates inefficient management of inventories. So it is
advisable to keep less inventories to minimize costs and improve efficiency.
The company is more traditionally financed with low debt and more of equity
financing, so in future debt should be preferred for financing to bring the ratio
close to the ideal ratio of 1:1.
The management of MUTHOOT FINCORP should also try to maintain a definite
proportion among various components of working capital in relation to overall
current assets to keep an adequate quantum of liquidity all the times.








CONCLUSION
On the basis of analysis of financial statements of MUTHOOT FINCORP we may
conclude that the overall working stability soundness have improved over the years.
Sales turnover of MUTHOOT FINCORP increased by 6.86% i.e. Rs. 48681 crores in
the FY 2008-09 from Rs. 45555 crores in the FY 2007-08 whereas profit before tax
has decreased by 18% i.e. Rs. 2064 crores in the FY 2008-09 from Rs. 11469 crores
in the FY 2007-08 indicating increase in cost of goods sold.
The debtors turnover ratio is lower for MUTHOOT FINCORP compared to its
competitors which shows that the debtors are less liquid implying inefficient
management of debtors/sales.
The proportion of current assets to total assets has increased comparing to current
liabilities which serve as an evidence for good working capital position of the
company.
The current ratio for MUTHOOT FINCORP is more than other competitors which
shows that it has enough liquidity in comparison to other competitors.
The debt equity ratio is 0.27 which is lower than the competitors. This means that it is
more traditionally financed in comparison to other competitors. It has lower debt so it
can easily raise debt in future.
MUTHOOT FINCORP is more efficient and effective to utilize its fund.



BIBILIOGRAPHY

BOOKS:
Financial management by R.K. SHARMA &
SHASHI K GUPTA
Annual Report of MUTHOOT FINCORP
Magazines of MUTHOOT FINCORP

INTERNET WEB SITES:

www.google.co.in
www.Muthoot Fincorp.co.in
www.money control.com