CONTENTS

COMPANY PROFILE

02-15

THEORETICAL ASPECT

16-20

PRACTICAL ASPECT

21-29

RESEARCH METHODOLOGY

30

DATA ANALYSIS & GRAPHICAL

31-48

PRESENTATION
FINDINGS

49

CONCLUSION

50

SUGGESTION

51

BIBLIOGRAPHY

52

QUESTIONNAIRE

40-42

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COMPANY PROFILE
OUR VISION
TO BE AMONGST THE MOST ADMIRED COMPANIES IN INDIA COMMITED
TO

EXCELLENCE.

OUR MISSION

BE A CUSTOMER OBSESSED COMPANY

NO.1 TYRE BRAND IN INDIA

DELIVER ENHANCED VALUE TO ALL STAKEHOLDERS

MOST PROFITABLE TYRE COMPANY IN INDIA

ENCHANCE GLOBAL PRESENCE THROUGH ACQUISITION

MOTIVATED

AND

COMMITTED

TEAM

DEVELOPMENT

FOR

HIGH

PERFORMANCE ORGANIZATION

JK ORGANISATION - A CENTURY OF TRUST

Innovation and passion to perform have always been the driving forces at J K Organization.

JK Organization, is one of the leading Private Sector Groups in India, was founded over 100
years ago - it's been a century of multi-business, multi-product and multi-location business
operation.

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CUSTOMER SATISFACTION - OUR CREDO

Customer Satisfaction has always been our prime focus. We are indeed proud of our highly
experienced and professional team for winning the trust of customers and building strong
relationships with them.

Our 115 company owned stocking points serve over 4000 dealers across the country.
We have set up 130 JK Tyre Steel Wheels - a unique concept in car tyre retailing which
provides value added services like wheel balancing, alignment and tyre care to customers.

Our Truck Radial Care Centers offer after-sales service for Truck/Bus Radials, which operate
on 365 days / 24 hours basis. A large number of such centers have been set up along all major
National Highways.

JK Tyre has been among the top two tyre companies in respect of Customer Satisfaction, as per
JK Power Asia Pacific Study, for many years.
First Indian tyre company to introduce All Steel Truck & Bus Radials in India in 1999
Pioneered Radial technology in India by introducing passenger radials in 1977
First Indian tyre company to be recognized as 'SUPERBRAND' by Global Advertising
Professionals
R & D - TECHNOLOGY OUR DRIVING FORCE
We have always been pushing the limits of possibilities. Our research centers have been our
nerve

centers

for

extensive

research

and

development.

These

are:

Mr. Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) - Jaykaygram,
Kankroli

(Rajasthan)

and

Faridabad

(Haryana)

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Dr. Raghupati Singhania Center of Excellence for Tyre and Vehicle Mechanics - Chennai (Tamil
Nadu)
FUTURE PLANS

India is fast emerging as a global automobile hub particularly for small cars. It offers immense
opportunities for JK Tyre to grow its business both organically and inorganically.

We have been constantly exploring ways of increasing our presence in different world markets,
through alliances and acquisitions in tyre and related business. In all our Endeavours, our core
focus is on customer delight. Enlarging the customer base, providing them with better quality of
services and more value added products, will continue to be the key areas of our thrust.

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OUR FIRSTS - LEADING THE WAY

BACKGROUND AND INCEPTION OF THE COMPANY
1933

First in India to manufacture calico prints- {Juggilal Kamlapat cottons spinning and
weaving mills company, Kanpur.}

1940

First in India to manufacture steel bailing Hoops for jute and cotton and to make the
country self sufficient by meeting the entire demand-

J.K Iron and Steel Co. Ltd.,

Kanpur.
1944

First in India to produce Aluminum Virgin Metal for Indian Bauxite-Aluminum

Corporation of India Ltd., Jaykayanagar.

1949

First in India to manufacture Engineering files- J.K. Engineers files Bombay.

1959

First in India to set up a continuous process Rayon plant.

1960

First in India to set up a Hydraulically operated Cane Crushing Mill for Kandsari Sugar
Plant and completed 100 ton plant.

1961

First in world to set up a plant for production of Hydrosulphite of soda by Sodium

Amalagam process- J.K. Chemicals Ltd., Bombay.

1962

First in India to produce Nylon-6 with its own polymerized raw material- J.K. Synthetics
Ltd., Kota.

1965

First to produce sodium Sulphoxylate Formaldehyde [Rangolite C of Formosul] in IndiaJ.K. Chemicals Ltd., Bombay.

1968

First to manufacture TV sets in India- J.K. Electronics, Kanpur.

1976

First in India to produce steel belted Radial tyres for passenger car, trucks and busesJ.K. Tyre plant, Kankroli.

1980

First in the world to make steel belted radial tyres for 3 wheelers.

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1984

First in India to produce white cement through dry process.

1985

First in India to produce cathonic Dye able Polyester Fiber.

1989

First in India to produce magnetic tapes with cobalt technology.

1991

Banmore tyre plant {BTP} set up with the capacity of 5.7 lacks tyres per annum.

1992

R&D centre setup at HASTERI.

1994

Indias first T-rated tyre launched Banmore Tyre Plant {BTP} Crossed 100 TPD.

1995

Mercedes Benz launched on JK STEEL RADIALS first tyre manufacturer in the world
to get ISO 9001.

1996

Indias first dual contact high tractions steel radial- aqua sonic launched. {Introduce steel
wheels}.

1998

First tyre manufacturer in the world to get QS 9000. Awarded CAPEXILS highest
export award for 1997-98.

1999

Synergy with VTL in procurement, marketing and production flexibility.

Completion of states of the art modernizations of truck radials
J.K. Tyres ranked 16th largest tyre company in the world
ISO- 14001 accreditation for environment and safety.

2000

J.K. introduced national Go- carting championships.

2001

J.K. industries received FOCUS LAC EXPORT award for the year 1999-2000.
Commendation certification of CII ND National exam. Go- carting championships held.

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1.3 J K GROUP DIVERSIFICATION

JK ORGANISATION
J.K. Organization, founded over 100 years ago, is an eminent
industrial group in India. The Group has multi-business,
multi-product and multi-location operations

JK PAPER LTD.
JK Paper Limited is one of the leading manufacturers of
reading and writing paper

JK LAKSHMI CEMENT LTD.

JK Lakshmi Cement Limited is a well respected name in the
cement industry in India

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FENNER (I) LTD.

Fenner (I) Limited is a leading manufacturer of Industrial and
Automotive Belts, Oil Seals, Power Transmission Accessories
and Textile Yarn
UMANG DAIRIES LTD.
The Creme de la creme of dairy foods

JK AGRI-GENETICS LTD.
At JK Agri-genetics limited, concentrates on Research and
Development, production, processing and marketing of hybrid
seeds.

JK SUGAR LTD.
The company's principle activity is to manufacture Sugar.
However, the company currently operates in two segments.
Power and Sugar

JK RISK MANAGERS AND INSURANCE BROKERS

LTD.
Services rendered to various clients for all facets of Insurance
both life & non-life.

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CLINIRX RESEARCH PRIVATE LTD.

Full Service Contract Research Organization (CRO)

JK Tyres Plants
Mysore plant- 1 {VTP}

Karnataka

Mysore plant- 2 {VTP Radial}

Karnataka

Kankroli

Rajasthan

Banmore

Madhya Pradesh

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COMPANY HISTORY
JK ORGANISATION

JK Organisation owes its name to Late Lala Juggilal Singhania, a dynamic personality, with
a broad vision. Inspired by the cause of the Swadeshi movement of Mahatma Gandhi, and
driven by the zeal to set up an indian enterprise, Late Lala Kamlapat Singhania founded
J.K. Organisation in the 19th century ushering in a new industrial era in India.

The name JK Organisation, which today is one of the leading Private Sector Groups in India,
was founded over 100 years ago. For J.K. Organisation it's been a century of multi-business,
multi-product and multi-location business operation. The companies in the Group have a
diverse portfolio, including Automotive Tyres & Tubes, Paper & Pulp, Cement, V-Belts, Oil
Seals, Power Transmission Systems, Hybrid Seeds, Woolen Textiles, Readymade Apparels,
Sugar, Food & Dairy Products, Cosmetics, etc.

10 | P a g e

VARIOUS DIMENSIONS:

JK SEEDS

JK SUGAR

JK PAPER LTD

JK LAKSHMI CEMENT

UMANG DAIRIES

CliniRX RESEARCH

FENNER(INDIA) Ltd.

11

JK ORGANISATION AT A GLANCE:-

YEAR EVENTS 1951 - The Comp. was incorporated as a private limited Comp. in West
Bengal in 14th February, 1951. Until 31st March 1970, the Comp. was engaged in the
managing agency business. Thereafter, the Comp. decided to undertake manufacturing
activities and obtained a letter of intent in February 1972 for manufacture of automobile
of & tubes.

The letter of intent was converted into an industrial license in February 1974 for
manufacture of 4 lakh nos. each automobile tyre & tubes per annum. The Comp. was
converted into a public limited Comp. on 1st April 1974. The manufacturing project was
promoted

by

Straw

Products

Ltd

&

J.K.

Synthetics

Ltd.

The Comp. entered into technical collaboration with General Tire International Co.,
U.S.A., [a subsidiary of General Tire & Rubber Co., U.S.A.s] for technical services for a
period of 5 years & sales agreement for supply of technical know-how, engineering &
documentation for operational facilities [for a period of 8 years from 23.8.73s].

Under the collaboration agreement, the Comp. has the right to use on its products the
wording 'Made in collaboration with General Tire International Co., USA'.

YEAR EVENTS 1982 - The company technical collaboration agreement with General
Tire

International

Co.,

was

renewed

for

further

period

of

years.

YEAR EVENTS 1987 - The overall working resulted in substantial profits despite a 51days strike as well as go-slow from 14th October. The strike had since then been resolved
& amicable settlement was reached. Efforts were on to launch a new pattern in steel
belted radial tyre.

YEAR EVENTS 1988 - New steel radial tyres for Maruti Gypsy & Tata mobile were

12

introduced. The Comp. proposed to incur an expenditure of Rs 300 lakhs for installation
of latest & sophisticated R&D equipment.

YEAR EVENTS 1989 - Several new patterns & sizes of tyre were introduced including
a semi-lug Nylon Truck tyre, all of which were well received in the market. 1991 Handeep Investment, Ltd., Hidrive Finance Ltd., Panchanan Investment Ltd., & Radial
Finance Ltd., J. K. International Ltd., Shivdham Properties Ltd., & J. K. Asia Pacific,
Ltd., are subsidiaries of Company.

YEAR EVENTS 1992 The J.K. International division expanded its activities by
opening its office in Moscow besides starting Company's subsidiaries in U.K. and
Honkong. The radial tyre for tractors & business launched in the previous year were well
received.

YEAR EVENTS 1993 - New radial tyre `Brute' & `Ultima' were introduced. The Comp.
was in the process of developing steel belted radial tyre for prestigious cars in the
Mercedes Benz, Peugeot, Daewoo race & Opel Astra. A new pattern developed for bus
and trucks `PE-T8' was well received in the market.

YEAR EVENTS 1994 - The Comp. maintained its pace of growth, despite steep rise in
raw material & input costs & competition. The Company effected an all round cost
reduction & attained higher capacity utilization at both the tyre plants at Jaykaygram and
Banmore.

The T-rated Ultima tyre launched for new generation cars found its acceptance in DCM
Daewoo `Ceilo'. Also J.K. Steel radial was chosen for Mercedes Benz India.
- The Comp. undertook to develop steel radials for GM `Astra'. PAL `Peugekot' FIAT's,
`UNO' & M and M `Ford'.

- The Comp. launched a premium truck tyre `Jet Trak' - 39 which was introduced to meet

13

the need of the heavy load market. The new tractor rear tyre `SONA' was well received in
the market.

YEAR EVENTS 1996 - During this period, a new Car tyre 'Jet Drive XS', the widest
nylon car tyre for Maruti 800 was launched. Along with new semi-lug & heavy duty lug
tyre for trucks, a new lug tyre for super heavy load applications 'Jet Trak 39' was also
introduced. In the Radial category, 'Ultima XR Radial', a terrain tyre was introduced. All
these products were well received in the market.

Both the tyre plants operated to full capacity. In line with JK tyre, the radials unit
introduced the dual contact high traction & high performance Aquasonic steel radial car
tyre. The unit also developed India first & only H-rated ultima Xs' especially for
Mercedes - Benz Cars.

YEAR EVENTS 2000 - The Comp. proposes to reduce its debt by Rs 125 crore in the
current fiscal from the current level of Rs 635 crore by way of

loan repayment.

The Comp. & Indian Oil Corporation have entered into a marketing alliance for installing
digital air pressure gauges and setting up sales & services outlets at IOC petrol stations
throughout the country.

YEAR EVENTS 2001 - Raghupati Singhania managing director of J. K. Industries has

been appointed the 19th Chairman of Automotive Tyre Manufacturers Association, the
representative body of tyre industry in India.

YEAR EVENTS 2002- J. K. Industries Ltd has informed BSE that CRISIL has assigned
a P1+ rating to the Commercial Paper programme of company.

YEAR EVENTS 2003 - J. K. Industries Ltd [JKIs] has a new Marketing Director in Mr.
Ajay Kapila. Before joining JKI, Mr Kapila was Senior Vice-President [Sales &

14

Marketings] at Kinetic Engineering limited He was also Director on board & operational
head of Kinetic direct selling arm - Kinetic Marketing Services Ltd.

Completes its comprehensive restructuring exercise of

businesses that leads to its

emergence as a pure automotive tyre company. Along with the de-merger of its non-tyre
business, Sugar & Agri Seeds, into separate companies namely J. K. Sugar Ltd & J. K.
Agri-Genetics Ltd, JKI also completes the merger of Vikrant Tyre Ltd with itself.

J.

K.

Industries

delists

from

Jaipur

Stock

Exchange

divested its wholly-owned subsidiary called J. K. Drugs & Pharmaceuticals Ltd to TEVA
Pharmaceuticals of Israel.

YEAR EVENTS 2004 -J. K. Industries Ltd has informed that its securities are delisted
from Delhi Stock Exchange Association Ltd [DSEs] w.e.f. January 29, 2004.

YEAR EVENTS 2007 - J. K. Industries Ltd has informed that the name of Comp. has
been changed from J. K. Industries Ltd' to 'J. K. Tyre and Industries Ltd' w.e.f. April 02,
2007.

Comp. name has been changed from J. K. Industries Ltd to J. K. Tyre and Industries
Ltd.

YEAR EVENTS 2008 - The Comp. has issued rights in the ratio of 1:3 at a premium of
Rs.75 per Share.

15

THEORETICAL ASPECT
INTRODUCTION OF RATIO ANALYSIS

There are various methods or techniques used in analyzing financial statements

such as comparative statements, trend analysis, common size statements, schedule of
changes in working capital, funds flow and cash flow analysis, cost-volume-profit
analysis and ratio analysis. The ratio analysis is one of the most powerful tools of
financial analysis. It is the process of establishing and interpreting various ratios
(quantitative relationship between figures and group figures). It is with the help of ratios
that the financial statements can be analyzed more clearly and decision made from such
analysis.

MEANING OF RATIO:
A ratio is a simple arithmetic expression of relationship of one to other. It may be
defined as the indicated quotient of two mathematical expressions.
According to Accountants Handbook by Wixon, Kell and Bedford, a ratio is
an expression of the quantitative relationship between two numbers.
According to Myers, Ratio analysis is a study of relationship among the various
financial factors in a business.

FINANCIAL RATIO ANALYSIS:

Ratio analysis is a powerful tool of financial analysis. A

ratio is defined as the indicated quotient of two mathematical expressions and as the
relationship between two or more things. In financial analysis a ratio is used as a
benchmark for evaluating the financial position and performance of a firm. The absolute
accounting figures reported in the financial statement do not provide a meaningful
understand of the performance and financial position of a firm. An accounting figure
conveys meaning when it is related to some other relevant information.

16

The relation between two accounting figures, expressed

mathematically is known as a financial ratio (or simply as a ratio) ratio help to summarize
large quantities of financial data and to make qualitative judgment about the firms
financial performance.

The point to note is that a ratio reflecting a quantitative

relationship helps to form a qualitative judgment.

NATURE OF RATIO ANALYSIS

Standards of comparison
A single ratio in itself does not indicate favorable or
unfavorable condition. It should be compared with some standards. Standard of
comparison may consist of.
Past ratio i.e. ratio calculated from the financial statement of the some firm.
Competitors ratios, i.e. ratios of same selected firms, especially the most
progressive and successful competitor, at the same point in time.
Industry ratios i.e. ratios or the industry to which the firm belongs and
Projected ratios, i.e. ratios developed using the projected or Performa, financial
statements of the same firm.

There are four types of ratios to be calculated to know the status of the firm.

They are,

1. Liquidity ratio

2. Leverage ratio

3. Activity ratio

4. Profitability ratio

17

I. Liquidity ratio

Liquidity ratios measure the ability of the form to meet its current obligation. In
fact, analysis of liquidity needs the preparation of cash budgets and cash and fund flow
statement, but liquidity ratios by establishing a relationship between cash and other
current assets to currents obligations, provide a quick measure of liquidity. A firm
ensures that it does not suffer from lack of liquidity, and also that it does not have excess
liquidity, therefore it is necessary to strike a proper balance between high liquidity and
lack of liquidity.

The most common ratios indicate the extent of liquidity or lack of it is:

Current ratio

Quick ratio

Absolute liquidity ratio

II.LEVERAGE RATIOS

Leverage ratios are calculated t analyze the long-term financial position of the
firm. These indicate mix of funds provided by owners and lenders. As a general rule,
there should be an appropriate mix be debt and owners equity in financing the firms
assets. The process of magnifying the shareholders return through the use of debt is
called financial gearing or trading on equity. Leverage ratios calculated to measure
the financial risk and firms ability of using debt to share holders advantages.

Interest coverage ratio

Capital equity ratio

18

III.ACTIVITY (OR) TURNOVER RATIOS

The turnover ratios indicate the efficiency with which the capital employed is
rotated in the business. The ratios are employed to evaluate the efficiency with which the
firm manages and utilizes its assets to indicate the speed with which assets are being
converted on turned over into sales. A proper balance sales and generally reflects that
assets are managed well.

Debtors turnover ratio.

Total assets turnover ratio.

Fixed assets turnover ratio.

Current assets turnover ratio.

IV.PROFITABILITY RATIO

Profitability is an indication of the efficiency with which the operations of the

business are carried on. 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 finds and whether the ultimate repayment of their
debt appears reasonably certain. Owners are interested to know the profitability as it
indicates the return, which they can get their investments.

Gross profit ratio

Net profit ratio

Operating profit ratio

Operating ratio

Return on investment ratio

Return on equity

EPS

DPS

Pay out

19

OBJECTIVES

To know, whether the company is able to pay debt promptly or not.

To study the current financial position of the company.

To know the ability of the firm to meet fixed interest and the cost and repayment
schedules associated with the long term borrowings.

To know about the general profitability of the firm in relation to the sales.

To know about the overall profitability of the firm in relation to its investment.

To find ability of the company in utilizing of its assets.

To find companies long term solvency and survival.

20

PRACTICAL ASPECT

1. Current ratio:

This ratio relates current assets to current liabilities. The current ratio indicates
the ability of the organization to meet its current obligations. It measures short-term
solvency of the concern.

The current ratio is calculated by dividing current assets by current liabilities.

Current assets
Current ratio=
Current liabilities

years

Current assets

Current liabilities

Current ratio

2004

335.21

126.20

2.66:1

2005

363.31

172.53

2.11:1

2006

525.04

398.06

1.32:1

2007

984

638.12

1.54:1

2008

1488

892.6

1.66:1

21

2.Interest coverage:-

The interest coverage ratio or the times-interest-earned is one of the most

conventional coverage ratios used to test the firms debt-servicing capacity.it can be
calculated by dividing EBIT with interest

EBIT
Interest coverage=
INTEREST

years

EBIT

INTEREST

Interest coverage

(in.Rs.Cr)

(in.Rs.Cr)

ratio

2004

132.59

9.92

13.37

2005

125.89

11.85

10.62

2006

283.64

10.12

28.03

2007

127.52

28.09

4.54

2008

441.32

28.30

15.59

22

3.Capital equity ratio:-

This is the ratio which expressing the basic relationship between debt and equity.
Calculating the ratio of Net assets to Net worth can find this ratio.

Capital employed
Capital equity ratio =
Net worth

Capital employed = Total debt + Net worth

years

Capital employed

Net worth

(in.Rs.Cr)

(in.Rs.Cr)

2004

435.34

435.34

1.00

2005

482.82

482.83

0.99

2006

597.86

597.86

1.00

2007

930.78

878.12

1.06

2008

1323.40

1228.40

1.08

23

Capital equity ratio

4. Debtors turnover ratio:-

Debtors turnover ratio can be calculated by dividing total sales by dividing debtors.

Sales
Debtors turn over =
Debtors

years

Sales

Debtors

Debtors turnover
ratio

2004

711.50

276.21

2.58times

2005

922.34

217.42

4.24times

2006

1197.14

412.72

2.90times

2007

2753.22

792.02

3.48times

2008

3604.7

1057.40

3.41times

24

5. Total assets turnover ratio:-

This ratio shows the firms ability in ngenerating sales from all financial resources
committed ton total assets.
Sales
Total assets turnover=
Total assets

years

sales

Total assets

Total assets turnover

ratio

2004

711.50

435.34

1.63

2005

922.34

482.82

1.91

2006

1197.14

597.86

2.00

2007

2753.22

930.78

2.96

2008

3604.7

1323.40

2.72

25

6.Fixed assets turnover ratio:-

Fixed assets turnover ratio can be calculated by dividing of sales with net fixed
assets.

Sales
Fixed assets turn over ratio=
Net fixed assets

Years

sales

Net fixed assets

Fixed assets
turnover ratio

2004

711.50

133.24

5.34

2005

922.34

170.05

5.42

2006

1197.14

156.79

7.64

2007

2753.22

247.03

11.15

2008

3604.7

290.9

12.39

26

7.Curent assets turnover ratio:-

Current assets turnover ratio can be calculated by dividing of sales with net
current assets.

Sales
Current assets turnover ratio=
Net current assets

Years

sales

Net current assets

Current assets
turnover ratio

2004

711.50

209.01

3.40

2005

922.34

190.79

4.83

2006

1197.14

126.99

9.42

2007

2753.22

345.89

7.96

2008

3604.7

595.40

6.05

27

8. Gross profit ratio:This ratio expresses relationship between gross profit and net sales. It relates the
efficiency with which management produces each unit of product. It indicates the degree
to which the selling price of goods per unit may decline without resulting in losses from
operations to the firm.
The first profitability ratio n relation to sales is the gross profit ratio it is
calculated by dividing the gross profit by sales.

Gross profit
Gross profit ratio =

X 100
Sales

Gross profit = Net sales cost of goods sold

Cost of goods sold = power & fuel + other manufacturing expenses

Year

Gross Profit

Sales

Gross profit Ratio

(in.Rs.Cr)

(in.Rs.Cr)

(%)

2004

655.38

711.50

92.11

2005

819.88

922.34

88.89

2006

994.86

1197.14

83.10

2007

2178.53

2753.22

79.12

2008

2887.40

3604.7

80.11

28

9.Net profit ratio:-

Net profit ratio is obtained when operating expenses; interest and taxes subtracted
from the gross profit. Net profit ratio helps in determining efficiency with which affairs
of the business are being managed. This ratio is the overall measure of the firms ability
to turn each rupee sales into net profit. The ratio is thus an effective measure to check the
profitability of business.
The net profit margin ratio is measured by dividing profit after tax by sales.

Profit after tax

Net profit margin=

100
Net sales

Years

Profit after tax

Net Sales

(in.Rs.Cr)

(in.Rs.Cr)

2004

94.13

711.50

13.23%

2005

71.09

922.34

7.71%

2006

220.12

1197.14

18.39%

2007

65.23

2753.22

2.37%

2008

325.70

3604.7

9.04%

29

Net profit margin

RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It deals
with the objective of a research study, the method of defining the research problem, the
type of hypothesis formulated, the type of data collected, method used for data collecting
and analyzing the data etc. The methodology includes collection of primary and
secondary data.
TYPE OF RESEARCH
DESCRIPTIVE RESEARCH
The study follows descriptive research method. Descriptive studies aims at portraying
accurately the characteristics of a particular group or situation. Descriptive research is
concerned with describing the characteristics of a particular individual or a group. Here
the researcher attempts to present the existing facts by collecting data.
5.2 RESEARCH DESIGN
A research design is a basis of framework, which provides guidelines for the rest
of research process. It is the map of blueprint according to which, the research is to be
conducted. The research design specifies the method of study. Research design is
prepared after formulating the research problem.
5.3 SOURCES OF DATA
Data are the raw materials in which marketing research works. The task of data collection
begins after research problem has been defined and research design chalked out. Data
collected are classified into primary data and secondary data
PRIMARY DATA
Questionnaires were used for collecting primary data
SECONDARY DATA
Secondary data were collected from the companys annual publications,
memorandums of settlements, newspapers, journals, websites, and from library
books
SAMPLE SIZE: NIL

30

DATA ANALYSIS & GRAPHICAL PRESENTATION

1. Current ratio:
This ratio relates current assets to current liabilities. The current ratio indicates
the ability of the organization to meet its current obligations. It measures short-term
solvency of the concern.

The current ratio is calculated by dividing current assets by current liabilities.

Current assets
Current ratio=
Current liabilities

years

Current assets

Current liabilities

Current ratio

2004

335.21

126.20

2.66:1

2005

363.31

172.53

2.11:1

2006

525.04

398.06

1.32:1

2007

984

638.12

1.54:1

2008

1488

892.6

1.66:1

Analysis:

The current ratio of the company is decreased from 2004 to 2006 as 2.66:1,
2.11:1, 1.32:1, later it is increased from 2006 to 2008 as 1.32:1, 1.54:1, and 1.66:1.

31

The graph between Years and Current ratio shows as below

CURRENT RATIO
3

CURRENT RATIO

2.5

1.5
CURRENT RATIO
1

0.5

0
2004

2005

2006

2007

2008

YEARS

Interpretation:
In the year of 2004, 2005 the current ratio of TechJK TYRE maintains the
standards of 2:1. After the situation is less than 2:1 it shows the margin of safety for
creditors is low and company may be struggling to meet their obligations to pay.

32

2.Interest coverage:-

The interest coverage ratio or the times-interest-earned is one of the most

conventional coverage ratios used to test the firms debt-servicing capacity.it can be
calculated by dividing EBIT with interest

EBIT
Interest coverage=
INTEREST

years

EBIT

INTEREST

Interest coverage

(in.Rs.Cr)

(in.Rs.Cr)

ratio

2004

132.59

9.92

13.37

2005

125.89

11.85

10.62

2006

283.64

10.12

28.03

2007

127.52

28.09

4.54

2008

441.32

28.30

15.59

Analysis:The interest coverage ratio of the firm for 2004 is 13.37 after the
year it decraesed to 10.62 in the year 2005. Again it increased to 28.03 later years it
decreased to 4.54 & it finally reached to 15.59.

33

The graph between Years and Interest coverage ratio shows as below

Interest coverage ratio

30

interest coverage ratio

25

20

15
Interest coverage ratio
10

0
2004

2005

2006

2007

2008

years

Interpretation:-

The interest coverage ratio of higher ratio is desirable.the analysis indicates that
the firm using debt in conservatively.It is higher in the year 2006 i.e.28.03, it is low in the
year 2007 i.e.4.54.

34

3.Capital equity ratio:-

This is the ratio which expressing the basic relationship between debt and equity.
Calculating the ratio of Net assets to Net worth can find this ratio.

Capital employed
Capital equity ratio =
Net worth

Capital employed = Total debt + Net worth

years

Capital employed

Net worth

Capital equity ratio

(in.Rs.Cr)

(in.Rs.Cr)

2004

435.34

435.34

1.00

2005

482.82

482.83

0.99

2006

597.86

597.86

1.00

2007

930.78

878.12

1.06

2008

1323.40

1228.40

1.08

Analysis:Capital equity ratio of the firm for 2004 to 2008 are 1, 0.99, 1, 1.03, 1.08.it is
decreased from 2004 to 2005 after the years it raised to 1.08.

35

The graph between Years and Capital equity ratios ratio shows as below

CAPITAL EQUITY RATIO

1.1
1.08

CAPITAL EQUITY RATIO

1.06
1.04
1.02
CAPITAL EQUITY RATIO
1
0.98
0.96
0.94
2004

2005

2006

2007

2008

YEARS

Iterpretation:-

The funds being contributed by the lenders and owners for each rupee is almost
i.e. Rs.1/-.It indicates that the firm maintained the constant capital and equity in the equal
proportion change.

36

4. Debtors turnover ratio:-

Debtors turnover ratio can be calculated by dividing total sales by dividing debtors.

Sales
Debtors turn over =
Debtors

years

Sales

Debtors

Debtors turnover
ratio

2004

711.50

276.21

2.58times

2005

922.34

217.42

4.24times

2006

1197.14

412.72

2.90times

2007

2753.22

792.02

3.48times

2008

3604.7

1057.40

3.41times

Analysis:Debtors turnover ratio for the years 2004, 2005, 2006, 2007 and 2008 are 2.58,
4.24, 2.90, 3.48 and 3.41 respectively. It is raised to 4.24 for the year 2005 after it
decreased to 3.41 in the year 2008.

37

The graph between Years and Debtors turnover ratios shows as below

DEBTORS TURNOVER RATIO

4.5
4
3.5

CURRENT RATIO

3
2.5
DEBTORS TURNOVER
RATIO

2
1.5
1
0.5
0
2004

2005

2006

2007

2008

YEARS

Interpretation:The ratios are more than 2, this indicates the firm is good at the management of
credit. It is high in the year 2005 and least in the year 2004. The firm maintained
conversion of the debtors funds to sales is sufficiently.

38

5. Total assets turnover ratio:-

This ratio shows the firms ability in ngenerating sales from all financial resources
committed ton total assets.
Sales
Total assets turnover=
Total assets

years

sales

Total assets

Total assets turnover

ratio

2004

711.50

435.34

1.63

2005

922.34

482.82

1.91

2006

1197.14

597.86

2.00

2007

2753.22

930.78

2.96

2008

3604.7

1323.40

2.72

Analysis:Total assets turnover ratio of the year 2004 to 2008 are 1.63, 1.91, 2.00, 2.96 and
2.72 times respectively.it is gradually increased year by year.

39

The graph between Years and total assets turnover ratio shows as below

TOTAL ASSETS TURNOVER RATIO

3.5

TOTAL ASSETS TURN OVER RATIOS

2.5

2
TOTAL ASSETS TURNOVER
RATIO

1.5

0.5

0
2004

2005

2006

2007

2008

YEARS

Interpretaion:The total assets turnover ratio of the firm are 1.63, 1.91, 2, 2.96 and 2.72 times it
implies that the firm generate a sales more than one for one rupee investment on total
assets.

40

6.Fixed assets turnover ratio:-

Fixed assets turnover ratio can be calculated by dividing of sales with net fixed
assets.

Sales
Fixed assets turn over ratio=
Net fixed assets
Years

sales

Net fixed assets

Fixed assets
turnover ratio

2004

711.50

133.24

5.34

2005

922.34

170.05

5.42

2006

1197.14

156.79

7.64

2007

2753.22

247.03

11.15

2008

3604.7

290.9

12.39

Analysis:The fixed assets turnover ratios for 2004 to 2008 are 5.34, 5.42, 7.64, 11.15 and
12.39 times respectively. It was increased from 2004 to2008.

41

The graph between Years and Fixed assets turnover ratio shows as below

Fixed assets turn over ratio

14

FIXED ASSETS TURN OVER RATIOS

12

10

Fixed assets turn over ratio

0
2004

2005

2006

2007

2008

YEARS

Interpretation:Increasing fixed assets turnover ratio implies that the firms utilization of fixed
assets is increased.

42

7.Curent assets turnover ratio:-

Current assets turnover ratio can be calculated by dividing of sales with net
current assets.

Sales
Current assets turnover ratio=
Net current assets

Years

sales

Net current assets

Current assets
turnover ratio

2004

711.50

209.01

3.40

2005

922.34

190.79

4.83

2006

1197.14

126.99

9.42

2007

2753.22

345.89

7.96

2008

3604.7

595.40

6.05

Analysis:The current assets turnover ratios for the years from 2004 to 2008 are 3.40, 4.83,
9.42, 7.96 and 6.05 times.

43

The graph between Years and current assets turnover ratio shows as below

Current assets turnover ratio

10

CURRENT ASSETS TURN OVER RATIOS

5
Current assets turnover ratio
4

0
2004

2005

2006

2007

2008

YEARS

Interpretation:-

It is increased from 2004 to 2006 and then decreased to 6.05 times for the year
2008.it indicates that the usage of current assets is more than its investments.

44

8. Gross profit ratio:This ratio expresses relationship between gross profit and net sales. It relates the
efficiency with which management produces each unit of product. It indicates the degree
to which the selling price of goods per unit may decline without resulting in losses from
operations to the firm.
The first profitability ratio n relation to sales is the gross profit ratio it is
calculated by dividing the gross profit by sales.

Gross profit
Gross profit ratio =

X 100
Sales

Gross profit = Net sales cost of goods sold

Cost of goods sold = power & fuel + other manufacturing expenses
Year

Gross Profit

Sales

Gross profit Ratio

(in.Rs.Cr)

(in.Rs.Cr)

(%)

2004

655.38

711.50

92.11

2005

819.88

922.34

88.89

2006

994.86

1197.14

83.10

2007

2178.53

2753.22

79.12

2008

2887.40

3604.7

80.11

Analysis:
The calculated gross profit ratio indicates that the proportion of gross profit to
sales shows decreased figures from year 2004 i.e. 92.11 to79.12 in the year 2007 later
year it increased to 80.11

45

The graph between Years and Gross profit ratio shows as below

Gross profit ratio (%)

95

gross profit ratio

90

85

Series1

80

75

70
2004

2005

2006

2007

2008

year

Interpretation:

Gross profit ratio of the firm is highest in the year 2004 is 92.11% it indicates that
firm got more sales for attaining more profit. Firms performance is good in the year 2008
i.e. 80.11%.

46

9.Net profit ratio:-

Net profit ratio is obtained when operating expenses; interest and taxes subtracted
from the gross profit. Net profit ratio helps in determining efficiency with which affairs
of the business are being managed. This ratio is the overall measure of the firms ability
to turn each rupee sales into net profit. The ratio is thus an effective measure to check the
profitability of business.
The net profit margin ratio is measured by dividing profit
after tax by sales.

Profit after tax

Net profit margin=

100
Net sales

Years

Profit after tax

Net Sales

Net profit margin

(in.Rs.Cr)

(in.Rs.Cr)

2004

94.13

711.50

13.23%

2005

71.09

922.34

7.71%

2006

220.12

1197.14

18.39%

2007

65.23

2753.22

2.37%

2008

325.70

3604.7

9.04%

Analysis:Net profit margin ratio for the years from 2004 to 2008 are 13.25%, 7.71%,
18.39%, 2.37% and 9.04%.it is highest in the year 2006 i.e. 18.39% and the least in the
year 2007 i.e. 2.37%.

47

The graph between Years and Net profit ratio shows as below

Net profit margin

20.00%
18.00%

NET PROFIT RATIOS

(%)

16.00%
14.00%
12.00%
10.00%
Net profit margin

8.00%
6.00%
4.00%
2.00%
0.00%
2004

2005

2006

2007

2008

YEARS

Interpretation:-

Through this ratio overall profitability can be measured after adjusting nonoperating income & non-operating expenses. Firm showing best performance in the year
2006.in the year 2008 it is good.

48

FINDINGS

Firm maintained liquidity ratio indicates that it is in standards in the years 2004 &
2005. In the next years it is below the standards.

Debt of the firm is almost equal to its net worth.

Turnover ratios indicate that the firm is in good at conversion assets to sales.

Current assets turnover is very high when compare to the fixed assets turnover.

Gross profit is high in the years 2004 after the years firm gets fluctuations finally
it is in good position.

In the 2004 & 2005 years it is having more operating expenses than to sales it is
well for next years.

Returns is not in preferable way it is below 25% on average.

Earnings on each share are good condition for the firm.

But the payment to the share holders is below 50%.

49

CONCLUSION

The companys overall position is at a good position. Particularly the

current years position is well due to raise in the profit level from the last year position. It
is better for the organization to diversify the funds to different sectors in the present
market scenario.
Financial Analysis is the process of evaluating businesses and other
finance-related entities to determine their suitability for investment. Typically, financial
analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable
enough to be invested in. One of the most common ways of analyzing financial data is to
calculate ratios from the data to compare against those of other comparable companies. In
Infinancials, financial ratios are categorized according to the financial aspect of the
business which the ratio measures: Profitability, Asset Utilization, Capital Structure on a
specific tab, Financial Ratios. Financial analysis allows for comparisons between
companies, between industries and also between a single company and its industry
average or peer group average.

50

SUGGESTIONS

Although firm maintains sufficient liquidity, it is needed to increase, in order to

attain future demand.

Because of being a soft solutions JK TYRE ltd need to raise their turnovers to get
good impression on the maintenance.

Firm needed to decrease the operating expenses, in order to sustain in this

rescission period.

Returns are of below 25% there is necessary to increase it. By getting more
projects it will happens.

Although the earnings on each share is good payment to the share holders is below
50%.it is better to maintain 50% to 75%, it will helps attracting share holders
towards invest.

51

BIBLIOGRAPHY

REFFERED BOOKS

FINANCIAL MANAGEMENT - I. M. PANDEY

MANAGEMENT ACCOUNTANCY - PILLAI & BAGAVATI

MANAGEMENT ACCOUNTING SHARMA & GUPTA

INTERNET SITE

www.ercap.org
www.wikipedia.com
www.nwda.gov.in

52

Key Financial Ratios of JK Tyre and

Industries

Mar '13
Investment Valuation Ratios
Face Value
10.00
Dividend Per Share
3.50
Operating Profit Per Share (Rs)
118.70
Net Operating Profit Per Share (Rs) 1,288.69
Free Reserves Per Share (Rs)
-Bonus in Equity Capital
0.09
Profitability Ratios
Operating Profit Margin(%)
9.21
Profit Before Interest And Tax
7.06
Margin(%)
Gross Profit Margin(%)
7.08
Cash Profit Margin(%)
4.69
Adjusted Cash Margin(%)
4.69
Net Profit Margin(%)
1.98
Adjusted Net Profit Margin(%)
1.98
Return On Capital Employed(%)
13.09
Return On Net Worth(%)
14.22
Adjusted Return on Net Worth(%)
18.39
Return on Assets Excluding
180.70
Revaluations
Return on Assets Including
180.70
Revaluations
Return on Long Term Funds(%)
20.70
Liquidity And Solvency Ratios
Current Ratio
0.60
Quick Ratio
0.84
Debt Equity Ratio
2.99
Long Term Debt Equity Ratio
1.52
Debt Coverage Ratios
Interest Cover
1.88
Total Debt to Owners Fund
2.99
Financial Charges Coverage Ratio
2.42
Financial Charges Coverage Ratio
2.06
Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio
7.41
Debtors Turnover Ratio
5.93
Investments Turnover Ratio
7.41
Fixed Assets Turnover Ratio
1.43
Total Assets Turnover Ratio
1.79
Asset Turnover Ratio
1.99
Average Raw Material Holding
-Average Finished Goods Held
-Number of Days In Working Capital 36.02
Profit & Loss Account Ratios
Material Cost Composition
74.87
Imported Composition of Raw
37.64

Mar '12

Mar '11

Mar '10

Mar '09

10.00
2.50
68.12
1,375.10
141.64
0.09

10.00
3.00
81.40
1,168.60
141.79
0.09

10.00
3.50
117.50
895.56
130.02
0.09

10.00
2.70
92.93
1,201.70
93.27
0.09

4.95

6.96

13.12

7.73

3.15

4.55

10.09

4.70

3.15
1.96
1.96
0.19
0.19
7.74
1.64
1.42

4.57
3.15
3.15
1.27
1.27
11.99
8.57
5.27

10.14
6.87
6.87
4.42
4.42
24.84
23.57
20.11

4.72
2.76
2.76
0.38
0.38
14.94
3.33
-2.86

163.32

174.07

168.88

138.97

163.32

174.07

168.88

138.97

10.99

19.92

30.48

21.94

0.63
0.68
2.50
1.47

0.64
0.69
1.84
0.71

0.79
0.61
1.24
0.83

0.60
0.72
1.91
0.98

1.07
2.50
1.66

2.49
1.84
2.04

4.17
1.24
3.05

1.55
1.91
1.65

1.66

2.00

2.69

1.71

9.78
7.14
9.78
2.04
2.41
2.58
29.89
15.58
7.41

7.91
7.99
7.91
1.76
2.37
2.68
29.11
26.62
28.87

9.11
7.91
9.11
1.44
2.38
2.28
39.19
18.69
-2.10

14.03
11.24
14.03
2.18
2.95
-20.71
27.88
19.00

74.61
33.22

77.93
28.84

63.38
34.21

70.44
33.56

53

Materials Consumed
Selling Distribution Cost
Composition
Expenses as Composition of Total
Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash Profit
Earning Retention Ratio
Cash Earning Retention Ratio
AdjustedCash Flow Times

Earnings Per Share

Book Value

--

3.63

7.21

8.03

7.24

16.34

10.54

8.86

9.82

15.24

15.92
7.70
87.69
93.26
8.91

93.27
9.12
-7.32
90.76
15.12

20.09
7.00
67.35
91.91
8.66

10.25
6.02
87.99
93.41
3.38

68.08
7.52
179.42
90.54
8.04

Mar '13

Mar '12

Mar '11

Mar '10

Mar '09

25.70
180.70

2.68
163.32

14.93
174.07

39.81
168.88

4.64
140.24

54