Manik and An

A STUDY ON FINANCIAL PERFORMANCE AND
ANALYSIS IN SRI SOWDESWARI MILLS (P) LTD,

JALAKANTAPURAM
A project submitted to the
PERIYAR UNIVERSITY
In partial fulfillment of the requirements
For the award of the degree
MASTER OF BUSINESS ADMINISTRATION

Submitted by
P.MANIKANDAN
REGISTER NUMBER: P12MGT2027
Under the guidance of
Dr. T. SARATHY, BE (ECE)., M.B.A., Ph.D.

Assistant Professor
PRIMS
Periyar University, Salem.
PERIYAR INSTITUTE OF MANAGEMENT STUDIES (PRIMS)
PERIYER UNIVERSITY
SALEM 636011
2013
BONAFIED CERTIFICATE
PERIYAR INSTITUTE OF MANAGEMENT STUDIES

PERIYAR UNIVERSITY
SALEM 636 011
BONAFIDE CERTIFICATE
Certified that this project report titled A STUDY ON FINANCIAL PERFORMANCE
AND
ANALYSIS
IN
SRI
SOWDESWARI
MILLS
PRIVATE
LIMITED.,
JALAKANTAPURAM is the bonafide work of P.MANIKANDAN (REGISTER

NUMBER : P12MGT2027 ) who carried out the project under my supervision . Certified
further , that to the best of my knowledge the work reported here in does not from part of any
other project report or dissertation on the basis of which a degree or award was conferred on
an earlier occasion on this or any other candidate,
DIRECTOR
SUPERVISOR
Viva voice held on
INTERNAL EXAMINER
EXTERNAL EXAMINER
DECLARATION
DECLARATION
P.MANIKANDAN [REGISTER NUMBER : P12MGT2027 ] a student of
Periyar Institute of Management Studies, Periyar University , Salem hereby declare that the
Project work titled A STUDY OF FINANCIAL PERFORMANCE AND ANALYSIS IN
SRI SOWDESWARI MILLS PRIVATE LIMITED., JALAKANTAPURAM submitted
to the Periyar University in partial fulfillment of the requirement for the award of degree of
MASTER OF BUSINESS ADMINISTRATION is a record of bonafide research carried out
by me under the guidance of Dr.T.SARATHY, Assistant Professor, PRIMS, Periyar
University, Salem and no part of it has been for any other degree or diploma
Place:
(P.MANIKANDAN)
Date:
signature of the student
ACKNOWLEDGEMENT
ACKNOWLEDGEMENT
First of all I thank god and My Parents who have brought me to this position.
It is my responsibility to express my thanks to Vice chancellor Dr.K.MUTHUCHELIAN,
Periyar University, Salem, for encouragement me to do this project.
I would like to convey my sincere thanks to Dr.N.RAJENDHIRAN, M.com, MBA., PhD.
Professor cum Director, Periyar Institute of Management Studies (PRIMS), Periyar
University, Salem-11 for his Valuable encouragement.
I express my Deep Sense of gratitude Dr.T.SARATHY, B.E., M B A.,Ph.D. in Periyar
Institute of Management Studies (PRIMS) , Periyar University, Salem-11. Who gave me
constant inspiration and guidance throughout the Project work.
My Sincere thanks to MR.R.GUNASEKARAN, ACCOUNTS MANAGER, FINANCIAL
DEPARTMENT, SRI SOWDESWARI MILLLS, JALAKANTAPURAM, SALEM (DT)
for giving the necessary facilities for the successive completion of the Project.
I record My Sincere thanks to My Friend and all those who helped me to prepare the Project
and helped me in getting the Project work beautiful Printed and bound.
CERTIFICATE
ABSTRACT
ABSTRACT
The study focuses about the financial performance of Sri Sowdeswari Mill
Private Limited, Jalakantapuram, Salem and titled as A STUDY ON FINANCIAL
PERFORMANCE AND ANALYSIS IN SRI SOWDESWARI MILLS PRIVATE
LIMITED, JALAKANTAPURAM, SALEM undertaken at Sri Sowdeswari Mills
Private Limited, Jalakantapuram, Salem.
Financial analysis is to identify the strength and weakness of the firm by
properly establishing relationships between the items of balance sheet and profit and
loss account, and other operative data. The current study covers a period of five years
(from 2009-2013).
The study aims assessing the liquidity, profitability position of the firm. It
analyzed by using the ratios, schedule of changes in working capital, and comparative
balance sheets.
The analysis reveals that the companys short term solvency position is not up
to the optimal but long term and increase their current assets like cash and bank
balance.
TABLE OF CONTENTS
CONTENTS
CHAPTER
TITLE
NO
PAGE NO
List of Tables
List of charts
Abstract
GENERAL INTRODUCTION
1.1 Introduction of the study
1.2 Introduction about industry
II
III
IV
V
VI
1.3 About the company Profile

REVIEW OF THE LITERATURE
INTRODUCTION TO THE STUDY
3.1 Objectives of the Study
3.2 Scope of the Study
3.3 Limitation of the study
RESEARCH METHODOLOGY
DATA ANALYSIS AND INTERPRETATION
RESULT
6.1 Findings
6.2 Suggestion
6.3 Conclusion
BIBLIOGRAPHY
APPENDIX
1
2-6
7-29
30-31
32
33
34
35-40
41-76
77
78
79
80
81-82
LIST OF TABLES
LIST OF TABLES
TABLE
PAGE
NAME OF THE TABLE
NO
NO
5.1.1
NET PROFIT RATIO
41
5.1.2
OPERATING PROFIT RATIO
43
5.1.3
DEBTORS TURNOVER RATIO
45
5.1.4
FIXED ASSETS TURNOVER RATIO
47
5.1.5
TOTAL ASSETS TURNOVER RATIO
49
5.1.6
5.1.7
5.1.8
5.1.9
5.1.10
5.2.1
5.2.2
5.2.3
5.2.4
5.3.1
5.3.2
5.3.3
5.3.4
INVENTORY TURNOVER RATIO

CURRENT ASSET TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO
CURRENT ASSET RATIO
LIQUID ASSET RATIO
COMPARATIVE BALANCE SHEET 2009-2010
STATEMENT OF CHANGES IN WORKING CAPITAL 2009-2010
51
53
55
57
59
61
63
65
67
69
71
72
74
LIST OF CHARTS
LIST OF CHARTS
CHART
PAGE
NAME OF THE CHART
NO
NO
5.1.1
NET PROFIT RATIO
42
5.1.2
44
5.1.3
46
5.1.4
FIXED ASSETS TURNOVER RATIO
48
5.1.5
TOTAL ASSETS TURNOVER RATIO
50
5.1.6
5.1.7
5.1.8
5.1.9
5.1.10
5.3.1
5.3.2
5.3.3
5.3.4

CURRENT ASSET RATIO
LIQUID ASSET RATIO
52
54
56
58
60
70
72
74
76
CHAPTER I
GENERAL INTRODUCTION
CHAPTER-I
1.1 INTRODUCTION TO THE STUDY
Financial statements are prepared primarily for decision making. They play a
dominant role in setting the framework of managerial decisions. The term financial analysis,
also known as analysis and interpretation of financial statements refers to the process of
determining financial strengths and weaknesses of the firm by establishing strategic
relationship between the items of the Balance sheet, profit and loss account and other
operative data.
Analyzing financial statements, according to Metcalf and Tigard, is a process of
evaluating the relationship between component parts of a financial statement to obtain a
better understanding of a firms position and performance. The purpose of financial analysis
is to diagnoses the information contained in financial statements so as to judge the
profitability and financial soundness of the firm.
1.2 INDUSTRIAL PROFILE

INDRODUCTION ABOUT THE INDUSTRY
Textile industry is the eldest and one of the firmly established major industries in the
country producing a wide range of products for human consumption in India as well as
abroad.
Cotton textile industries is the largest industry in providing Employment about 20
million people. During 1992-1993, 138 lakhs bales of cotton valued at Rs.94 crores was
produced. Out of this, 13 lakhs bales were exported during the same period. The position has
greatly improved to 173.94 lakhs bales during 1992-1993 while the demand (or) total take is
133 lakhs bales.
Indias share in the world trade of cotton exports is just 5% during 1992-1993. Cotton
textile exports touched Rs.3884.64 crores. The basic tenant of Indias exports policy has been
to exports which will take into consideration the interest of traders, mills and state agencies
has to be implemented.
In 1998 the cotton textile exports fall by 3% as a result of sharp fall in the export of
Cotton yarn and knitted fabrics. The cotton exports during 2006 were to the tune of Rs.57.41
crores against Rs.46.83 crores in the previous year.
PRESENT CONDITION OF THE INDUSTRY

The growth of the cotton spinning sector, in terms of capacity, received an impetus in
1991 with the deli censing of spindle age. Installed spindle age has been rising steadily since
then, in 1991, the number of spindles installed was around 26.27 million and the number
went up to nearly 50 million in 1995 (in the non-SSI units). The total spindles installed by
2007 are estimated to have gone up to 400 millions.
Cotton spun yam production (excluding blended and 100 percent non-cotton yarn
declined from 2.213 million kg in 1997-98 but recovered to 2.266.86 million kg in 2000-01.
Spindle capacity utilization, which was 76 percent in 1991-1992, had gone up to 86 percent
in 1996-1997 fell to 79 percent in 2004-2005 before bouncing back to 83 percent in 20052006.
As on march 31, 2006, the spinning capacity was 57, 41 million. During 2005-2006,
while the power loom sector had consumed around 24 percent was exported.
The cotton yarn spinning units could capitalize on the growth in yarn imports expected
in key Asian destinations. According to the Chairman of Southern India mills Association
(SIMA), there has been a revival both in the domestic and export makers. However, if the
revival is to be sustained, certain issues need to be addressed, he feels.
The Chairman of textile Exports Promotion Council says a major step needed is to
reduce the cost of production. The cost of almost all components power, raw material,
transport and labour has gone up during the last four or five years. Up to Rs.1776.54 kg. In
order to make availability raw cotton of good quality at reasonable price, the price, the thrust
is on integrated cotton farming now.
TEXTILE INDUSTRY IN INDIA
Textile industry is the eldest and one of the firmly established major industries in the
country producing a wide range of products from human consumption in India as well as
abroad.
Cotton textile industry is the largest industry in providing Employment to about 20million
people. During 1992-1993, 138 lakhs bales of cotton valued at Rs.94 crores was produced.
Our of the above 131 lakhs bales were exported during the same period. The position has
greatly improved to 173.94 Lakhs bales during 1992-93 while the demand (or) total take off is
133 lakhs bales.
Indias share in the world trade of cotton exports just 5 percent during 1992-93. The cotton
textile exports touched Rs.3884.64 crores. The basic tenant of Indias exports policy has been
to export only the surplus however a liberalized policy in cotton exports which will take into
consideration the interest of traders, mills and state agencies has to be implemented.
In 1998 the cotton textile exports fall by 3% as a result of sharply falls in the export of
cotton yarn and knitted fabrics. Total cotton exports during 1998 were to the tune of Rs.14.216
crores against Rs.13.028 crores in the previous year.
PRESENT TREND OF THE INDUSTRY
The growth of the cotton spinning sector, in terms of capacity, received an impetus in 1991
with the deli censing of spindle age, installed spindle age has been rising steadily since, in
1991. The number of spindles installed was around 26.27 million and the number went up to
nearly 50 million in 1995 (in the non-SSI units). The total spindles installed by 2001 are
estimated to have gone up to 35.53 million.
The share of spinning capacity of south Indian mills (including small scale spinning units) in
All India capacity is estimated to be around 50 per cent. As on march 31.2002. The spinning
capacity of southern mills was 19.53 million spindles with the All India capacity was 38.33
million. During 2000-01, while the power loom sector had consumed nearly 42 per cent of the
total cotton yarn produced, handlooms had consumed around 23 per cent was exported.
During 1994-2002 some of the major destinations for Indian cotton yarn exports had been
South Korea, Bangladesh and Hong Kong. According to a report on Achieving Breakthrough
Growth in Cotton Textile Export, India has a large and modern spinning industry and a major
portion of its capacity is in the organized sector. In 2001, it had shot up to Rs.232.63 a kgs. In
order to make available raw cotton of good quality at reasonable price, the thrust is on
integrated cotton farming now.
GROWTH AND DEVELOPMENT
Even while there has been a steady rise in spindle age, there has been an increase in the
number of mills that stopped production temporarily, and those closed and sick. While the
number of closed mills (non SSI) was 130 in 1991-92 and 132 in 1994-95, it rose to 383 in
2000-01. There is a feeling that serious efforts should be made to identify and support mills
that can be revived. The south India textile Research Association (SITRA) has done an
ABC Analysis and submitted the report to the ministry of textile. According to SITRA, the
study covered nearly 90 spinning mills (that are in operation) in the four southern states. The
objective was to identify mills that could be revived with some support. They will be classified
into A, B and C categories based on criteria such as financial performance during the last 10
year and the level of modernization.
As a measure to find a solution for the problems of the units and ensure a level playing field,
the industry has been demanding an unbreakable convert chain. Representatives of the
spinning sector are of the opinion that a four percent excise duty on cotton yarns for a two or
three year period will help the revival trend.
With modernization and value addition at every stage including weaving and processing,
domestic consumption of high quality yarn is bound to go up. With the restructuring of the
sector, and the revival of the market, it is felt that the spinning units can be put back on the
rails with immediate attention to these external factors and the problems faced at the factory
level.
1.3 COMPANY PROFILE
SRI SOWDESWARI MILLS PRIVATE LIMITED

This Project work was carried out at SRI SOWESWARI MILLS PVT LTD is
registered office 201-A, Tharamangalam Main Road, Jalakantapuram, Salem 636 501. It has
been incorporated as private limited company, 1991 and the companies act, 1956. The factory
is constructed in a modern type.
PROMOTERS OF THE COMPANY

R. Arthanari Cettiar,
A. Kandasamy,
R. Chokalingam,
A. Padmanaban,
A. Saravanan,
P. Sivaraj
Sri R. Arthanari Cettiar is the main promoter of the company, and he have good
experience person in power loom fabric manufacture in jalakandapuram.
At the time of incorporation of the company, the share capital was just Rs. 50Laks but
now the authorized capital of the company is Rs. 85 Lakhs and the paid up capital is around
Rs. 75 Lakhs. Thus company has a prosperous growth in its life time.
MILLS SITUATED AT
Sri Sowdeswari Mills Pvt Ltd,

Near Kattampatti,
Jalakantapuram, Salem (Dt).
GENESIS AND DEVELOPMENT

Ventured in 1995 the mill started with a spindle capacity of 3024 had grown into a
unit having as installed of 15720 spindles.

1. Name and Address of the Company
SRI SOWDESWARI MILLS PVT LTD,

201-A, Tharamangalam main Road,
Jalakantapuram 636 501.
2. Registered and Administrative Office
JALAKANTAPURAM
3. State in which the company is registered :
TAMIL NADU
4. Status
PRIVATE LIMITED COMPANY
5. Year of Commencement
1995
6. Type of Industry
100% cotton yarn production
7. Mill Location
Near Kattampatti,
Jalakantapuram,
Salem 636 501
8. Sales Office
381, Trichy main Road,

Guai, Salem.
9. The Management
The Board of Directors,

B. Arthanari Chettiar,
A. Padmanaban,
A. Saravanan,
R. Chockelingam
P.Sivaraj
10. Financial Institutions
The city union Bank,

Jalakantapuram.
11. Auditors
R. Gunasekaran.
Chartered Accountants, Salem.
PRESENT PLAN:
The Company is presently headed by Sri R. Arthanari Chettiar, Managing Director who
is sincere, Motivated with hands on approach towards all issues and leading from the front.
He is ably assisted by his sons A. Padmanaban and A. Saravanan. They have been involved in
the running of the company for the past more than to decade and have acquired considerable
knowledge in finance, textile and general management Sri A. Saravanan yen graduate
GOAL OF THE COMPANY

FUTURE PLAN
The company is planned for a forward integration, in the area of weaving, knitting and
processing and also garments manufacturing for exports with in a period of 3 years.
GROUP STRENGTH
The company directors have own Power looms and Auto looms to consumed their
yarns used to 50% of the mill yarn production.
FULFILLMENT OF SOCIAL RESPONSIABILITIES

The Company has contributed its share to the well being of the social, it lends a helping
towards the educational aids and medical contribution to the poor people by foundation of
R..ARTHANARI CHETTIAR AND SIVAGAMI AMMAL CHARITABLE TRUST.
DEPARTMENT ACTIVITIES
1. Receipts:
Funds Transfer from Head office
Cash with drawls
Sale of scraps
A.C. Sheet sales
2. Payments:
Validated & approved bill are paid on due dates through bank. Petty expenses are paid
after verification by accounts officer & approved by works.
PURCHASE / JOB WORK

Purchase orders are screened & forwarded to work manager for approval. After Approval
of purchase orders, GRN is raised against the material receipt at the stores. Supplier invoices
is obtained & matched with PO & GRN then the process of ERP-Validation approves & crate
accounting is carried out.
Job works are certified by the concern HOD & approval by works manager. Approved
job work bill works bills are verified and entered in the system. TDS & Service tax wherever
applicable is provide then the process of ER-validation approval & create accounting is
carried out.
PART TIME MEDICAL OFFICER

We are pleased to inform that Dr. S. parasuraman, M.B.B.S., will be visiting our factory
on every Monday and Thursday between 3.00 pm and 4.00 pm. All are advised to check up
their health, if required, and take advice from medical officer.
SOURCES OF FINANCE:
The finance of the company can be obtained from.

Private Share Capital.
Loans from bank & financial institutions.
PRIVATE CAPITALS
It means the capital sponsored by the board of directors (or) the founders of the
organization (or) company.
LOANS FROM BANK &FINANCIAL INSTITUTIONS:
It means the capital raised from the banks (or) financial Institution the bankers and
financial institution of the company are THE CITY UNION BANK respectively. The
financial status of GSM is studied from the accounts department.
The company started it business with their Own Capital. The Companys share capital is
2.85 crores. They also utilized reserves and surplus and loans.
The companies maintain good accounting policies in the following areas.
(1). Fixed asset.
(2). Investments.
(3). Inventories.
(4). Sales.
(5). Government grants.
(6). Contingencies
SPINNING METERIALS
Total Machine
: 16
Machine Name
: LAKHSMI
Model
: LR 6
Year of Bought
: 2004 and 2005
Machine
:6
Machine name
: LMW C Lakhsmi
Model
: LRG 5/1
Year of Bought
: 1995 TO 1998
No. of Machines
:4
Machine name
: Lakhsmi LMW
Model
: LR 60
Year of bought
: 2012
No. of machines
:6
I Cops Weight
: 86 to 96 grams
Empty Cops Weight
: 53 grams
INPUT
: Raving 270 per M/C
OUTPUT
: Cop
PRODUCTION PROCESS CHART
Cotton
Mixing
Blow Room
Carding
Silver Ribbon
Lab
Drawing
Comber
Simplex
Spinning
Cone
Winding
Packing
Doubling
Yarn Go down
Reeling
Baling
PRODUCTION PROCESS
Mixing
This department plays an important role. In this department, the various varieties of cotton are
mixed, according to their length, strength, fineness and maturity to get the required counts of
yarn i.e. 60s, 80s etc. Usually four buckets of water and one liter firm soap oil is sprayed on
the spread cotton and kept for 24 hours before the next process.
Blow Room
Mixed cotton is cleaned by removing the foreign matters and waste. This may consist of seed
coats, jute, etc. The output from this process is a uniform and clean sheet like form rolled in a
rod and is known as LAP.
Carding
The proverb of the experts says, well carded is half spun and effective carding, efficient
spinning. All these 4 proverbs demonstrate that the immense significance of carding is the
final result of the spinning operation.
Carding Process
The laps that are produced in a sheet form are sent to the carding section. The main aim of
carding is to eliminate short fibers and also elimination of laps which are formed in the blow
room. The process done here is completely open into individual fibers and the dirty foreign
matter and nap are removed.
Carded Sliver
The sliver produced after normal carding in the form of long thread like fibers called as carded
sliver. There carded slivers are sent to drawing the next stage.
Combined Sliver
The combined slivers aim is to further remove short fibers and laps that are still present in it.
The comber process means just like we comb over hair. In this combing process short fibers
are removed and fibers are arranged in parallel formation. This combed sliver is the best
quality of sliver then the carded.
Sliver Lap
The carding slivers are fed and by pressing them it is transformed into lab form. The output is
called as Sliver Lap.
Ribbon Lap
The sliver lap is fed and by drafting process it is converted into a Ribbon Lap.
Comber
It is the high quality process. In this process producing the high quality sliver. It is the next
stage of carding. Then go to the sliver into the simplex and spinning. The main different
between drawing and comber is producing the high quality combed yarn.
Also 20% waste reduces than drawing process.
- 20 slivers converted into single comber lap
- Per comber lap producing time 7 minutes.
- Per comber lap have 3.7 kgs weight
- Get the output time of the comber sliver within 2.5 hours. 17
Drawing
It is the fourth stage in the manufacturing process. In this process eight slivers can be
converted into singly sliver.
Again 8 single can be converted into one sliver. There are 8 machines installed in the
drawing room.
Processing Time.
Eight sliver completing time is 4 hours.
Simplex Operation:
Sliver is converted into Roving. In this process sliver size is decreased. There are 8
machines located in the simplex operation. Each machine has 120 spindles. Spindles mean
rod or shaft rotating which twist the yarn.
Processing Time
40s and 41s output get within 2 hours.
80s output get within 4 hours.
Cone winding
Input
Finishing Form
Output
Spinning Cop:
Single Yarn on Cones
Packing
Spinning Cop:
Doubled Yan
Doubled Winding
Double Yan on Cones
Packing
Doubling Cop:
Doubling
Twist the doubt thread into single thread. There are 32 doubling machines being the doubling
section. Each machine has 400 spindles. Twist than yarn according to the order according to
the order basis. For Example
2 yarns X 40s Count =
2/40s
2 yarns X 60s Count =
2/60s
Reeling
The yarn spindles are wound in hank from the process is called reeling. There are 36
machines installed in the reeling section. Each machine has 80 spindles.
Packing
Packing refers to the activities of designing and producing the container or wrapper for a
product. There are two types of packing used are as under:
i.
Cone Packing
ii.
Yarn packing
According to the customer a requirement the packing is done by the packing department.
Cone packing is done using manpower. For yarn packing, bale press machine is used.
PRODUCT TESTING
It is the final testing in the product to find the imperfection. The buyers accept the 495imperfection condition within the 100 kilometers yarn.
U%
12.5
Thin
25.0
Thick 160.0
Neps 297.5
_______
Total
495.0
It is accepted for the 80s combed yarn.
NUMBER OF WORKERS
The manpower details are
Total numbers of workers are
183
Out of this, permanent workers
128
Temporary workers
55
OFFICE STAFF
Non Technical staff
10
Technical staff
10
Total
20
ALLOCATION OF WORKERS
The worker in the company is working in different department as pet the details given
below:
Up to preparatory
21
Spinning
46
Cone Winding
30
Doubling
17
Reeling
25
Bundling / Packing
Maintenance & Cleaning
20
Others
17
Total
183
FORMATION OF SHIFT SYSTEM

The shift timing for general shift workers and staff category is
Non Technical
Technical
Morning
9.00 am to 1.00 pm
8.00 pm to 1.00 pm
Afternoon
2.00 am to 6.00 pm
2.00 pm to 5.00 pm
The Shift Working For Workers Are;

1st Shift
7.00 am to 3.00 pm
with half an hour break
2nd Shift
3.00 am to 11.00 pm
3rd Shift
3.00 am to 11.00 pm
ANNUAL LEAVE WITH WAGES

As per the provisions of the Factories Act, all the workers are provide with one day annual
leave for the 20 worked days in the previous year.
Apart from this, maximum 9 days of national & Festival holidays are allowed in a calendar
year. They are
Republic Day
May 1st
Independence Day
Gandhi Jayanthi
Pongal Day
Mariamman Festival
1 (local holidays)
Pooja Holiday
Deepavali
PAYMENT OF WAGES / SALARY

WAGES
The wages are disbursed to workers on 7th of every month by way of THE CITY UNION
BANK ATM.
SALARY
The salary to staff is being paid on 7th of every month by way of THE CITY UNION BANK
ATM.
STATUTORY BENEFITS
PROVIDENT FUND
The company is deducting 12% of basic plus dearness allowances of employees as
employees contribution to provident fund and the company is contributing 12% as its
contribution. In this, 3.67% goes to provident fund and the remaining 8.33% goes to family
pension scheme.
ESI SCHEME
The company is deducting 1.75% on total wages and salary of employees as a contribution
to ESI scheme and the company is contributing 4.75% as its contribution.
The various benefits which the employees enjoying under this scheme are
1. Sickness Benefit
2. Maternity Benefit
An insured women is entitled to claim maternity benefit in case of

1
Confinement
Miscarriage
Funeral Benefit
Disablement Benefit
TAMIL NADU LABOUR WELFARE FUND

All the employees have to contribute the prescribed amount to this fund every year. The
benefits from this fund are
1
Scholarship for workers children
Funeral expenses up to Rs. 1000/- for the workers
Medical facilities
BONUS
Bonus is provided to all workers, for the period of one year. It is given as per discussed
with SIMA (South India Mill Owners Association) on the basic salary of previous year i.e.
Basic, Dearness Allowance 20%
LOAN
In case of marriage, family function and any emergency expenses, workers are provided
with loan. This loan is recoverable from their wage in monthly installments.
SAFETY MEASURES
Adequate safety measures with water fire extinguisher are providing throughout the mill.
UNIFORM
Aprons and caps are providing to female workers. Male workers are providing with
Banyans and Toreros. Free uniform is given permanent workers once in a year. Temporary
workers purchase their union outside. The company will issues banyans and the cost will be
deducted from their wages.
UNION
Trade union principle underlined in the above is that a group of persons whether workers
or employees will have a better voice than an individual raising a loan voice.
FACILITIES OR WORKERS
1
Rs. 75 is given to each worker for medical allowances.
Rs. 150 is given to each worker for housing rent.
Tea and sacks is given free to all workers of night shift.
Water coolers are provided for employees to use in the mill.
First aid facilities are available.
INCREMENT
The regular employers are eligible for increment on every year in January based on their
job performance.
Excluding casual workers, other workers are eligible for this increment.
Categories
Amount
Basis
Rs. 3/- to Rs. 10/Workers
Once in 6 months
(on daily wages)
Staff
Rs. 500/-
Yearly once
PROMOTION
It is carried out in three stages and to become eligible for such promotion, all workers
should have completed certain period of year in services.
Workers
6 months to 1 year
Apprentice
3 years
Confirmation
2 years
When a worker employees all the stages have become a permanent workers.
WAGE STRUCTURE
The labours are classified as follows.

unskilled labour
Semi-skilled labour.
Skilled labour
Permanent labour.
UNSKILLED TRAINEES
Newly employed trainees who are yet to start training. They have only daily wage
scheme which is around 25/day.
SEMI-SKILLED TRAINEES
They are those in the training career and have the same daily wage structure.
SKILLED TRAINEES:Those who completed the training successfully are called skilled trainees. They are
entitled to ex-gratia, cloth, wan etc. Their leave and absent during the year is taken into
account for the annual increment. Their efficiency and job turn over plays an important factor
in becoming a permanent worker.
PERMANENT WORKERS
The workers who have been working for a period of 5years and above are considered
to be permanent workers. The enjoy the benefit of.
WORKING HOURS
They are having 3 shifts/day

First Shift
7A.M. to 3P.M.
Second Shift
3P.M to 11P.M
Third Shift
11P.M to 9 A.M.
MEDICAL FACILITIES
They also extend their welfare towards the employee of their concern. Concessions
are provided to the workers.
LABOUR WELFARE FACILITY
Hospital, co-operating, society loan, provident fund was given to workers.
FUNDS
3.67% - Provident Fund
8.33% - Family Fund
BONUS
Last years bonus 24%
Minimum bonus 8.33%
IDENTIFICATION
Identification card is given to each and every worker.

White card
- permanent workers
Any color
- Training workers
INCREMENT BASES
Increments are paid to the workers which are as follows.
GRADE
RS.
ABSENTEEISM
Up to 2 days
Up to 7 days
Up to 15 days
2.50
Up to 25 days
More than 25 days
EXPORT MARKET IN LOCAL

The yarns have specific application which is manufacture according at the
specifications of the buyers. This companys products are being sold into industrial
consumers at local market in
Erode
Shevapet (Salem)
DELIVERY GOODS
In Sri Sowdeswari Spinning Mills Limited, are two types of delivery of goods. There are
CONE & HANK.
HANK
Hank yarn in hand loom sectors are used to only of them. Yarn it is not a final product.
Only semi-finished goods.
CHAPTER II
REVIEW OF LITERATURE
CHAPTER-II
REVIEW OF LITERATURE
Financial performance analysis is vital for the triumph of an enterprise. Financial performance
analysis is an appraisal of the feasibility, solidity and fertility of a business, sub-business or
mission.
Altman And Eberhart (1994) reported the use of neural network in identification of
distressed business by the Italian central bank. Using over 1,000 sampled firms with 10
financial ratios as independent variables, they found that the classification of neural networks
was very close to that achieved by discriminate analysis. They concluded that the neural
network is not a clearly dominant mathematical technique compared to traditional statistical
techniques.
Altman (1968) and Ohlsons (1980) models to a matched sample of failed and non-failed
firms from 1980s, they found that the predictive accuracy of Altmans model declined when
applied against the 1980s data. The findings explained the importance of incorporating the
time factor in the traditional failure prediction models.
Campbell (2008) constructed a multivariate prediction model that estimates the probability of
bankruptcy reorganization for closely held firms. Six variables were used in developing the
hypotheses and five were significant in distinguishing closely held firms that reorganize from
those that liquidate. The five factors were firm size, asset profitability, the number of secured
creditors, the presence of free assets, and the number of under-secured secured creditors.
The prediction model correctly classified 78.5% of the sampled firms. This model is used as a
decision aid when forming an expert opinion regarding a debtors likelihood of rehabilitation.
No study has incorporated the financial performance analysis of the central public sector
enterprises in Indian drug & pharmaceutical Industry. Nor has any previous research examined
the solvency position, liquidity position, profitability analysis, operating efficiency and the
prediction of financial health and viability of public sector drug & pharmaceutical enterprises
in India.
Dr, S.P Gupta rightly pointed out, it is only by interpreting the financial reports one can
make the figure position of a business concern in clear and simple language understand by
the layman.
Financial statement analysis is a method if analysis of interpreting information the financial
statements contain. In doing so, our goal is to determine whether a company is going or
losing ground struggle for profitability and solvency.
ANTHONS (2005), the financial statements essentially are interim reports presented
annually and reflect a division of life of an enterprise into more or less arbitrary accounting
period more normally a year .
AMUTHAVALLI (2000) in her study had revealed that the companys profitability position
and short term financial position are sound during the period of the study.
SUMATHI (2002) had concluded that the operating efficiency solvency position and the
profitability of the company were satisfactory. The liquidity position company remarkable
good.
CHAPTER III
INTRODUCTION OF THE STUDY
CHAPTER- III
3.1 OBJECTIVES OF THE STUDY
To analyze the financial performance of the company through the measurement
profitability, liquidity, turnover and capital structure aspects
To measure the efficiency and performance of SRI SOWDESWARI MILLS (P) LTD.
To study the changes in the assets, liabilities of the company during the period of
study.
To offer suggestion to increase the financial performance of the company
3.2 SCOPE OF THE STUDY

Financial analysis is the process of identifying the financial strengths and weakness
of the firm by properly establishing relationships between the item of the balance sheet and
profit and loss account.
It is process of synthesis and summarization of financial and operative data with a
view to getting an insight in to the operative activities of a business enterprise.
The study is conducted at Sri Sowdeswari Mills (P) Ltd. He topic selected is A
GENERAL STUDY ON FINANCIAL PERFORMANCE AND ANALYSIS WITH SPECIAL
REFERENCE
TO
VENUS
SRI
SOWDESWARI
MILLS
(P)
LTD,
KATTAMPATTI,
JALAKANTAPURAM, SALEM -636 501. The project work is confined to finance department
only. Various tools of financial operations like, Ratio analysis, Comparative balance sheet,
schedule of changes in working capital have been used. Based on analysis some findings and
recommendation are given.
3.2 LIMITATIONS OF THE STUDY
The study is based on the result of limited period only i.e.5 years from 2008-09 to 2012-13.
The analysis and interpretation are based on secondary data taken from financial reports.
Ratio itself will not completely show the companys good (or) bad financial position.
The figures from the financial statements for analysis were historical in nature and the time
value of money is not considered.
CHAPTER IV
RESEARCH METHODOLOGY
CHAPTER-IV
4.1 RESEARCH METHODOLOGY
INTRODUCTION:
This chapter deals with the methodology and the steps undertaken for the collection
and organization of data and presenting the findings of investigation. The methodology of
research indicates the general pattern of organizing the procedure for gathering valid and
reliable data for the purpose of investigation
The methodology of the study includes the description of research design,
population sample size, sampling technique development and description of tool, data
collection procedure and method analysis.
4.2 TYPES OF RESEARCH

The study is based on theoretical and also the data can be analyzed. The research type
is analytical research.
4.3 ANALYTICAL RESEARCH

In this study the researcher has to use facts or information already available and
analyze these to make a critical evaluation of the material.
4.4 SAMPLING DESIGN

Sample unit
The sample unit A financial year.
Sample size
The sample size of the study is 5 years from 2008-09 to 2012-2013.
Method of collection data

Source of data
1. Primary data
2. Secondary data
Primary data
Research data collected has to be done of industry of company
It refers to collected the information
Using different type of data and finance analysis
Present study collected working capital
Secondary data
This information already collected in the data some of earlier research work
The secondary data has annual report financial report
All information collected Sri Sowdeswari Spinning Mills
4.5 TOOLS USED FOR ANALYSIS

A financial analyst can adopt the following tools for analysis of the financial statement. These
are also termed as methods of financial analysis.
Ratio Analysis
Comparative Balance Sheet
Changes In Working Capital
4.5.1 RATIO ANALYSIS

Ratio analysis is a widely used tool of financial analysis. It is defined as the
systematic use of ratios to interpret the financial statements so that the strengths and weakness
of a firm as well as its historical performance and current financial condition can be
determined. The term ratio refers to the numerical or quantitative relationship between two
items/ variables. This relationship can be expressed as (i) percentages (ii) Fractions (iii)
Proportion of numbers. Computing of ratios does not add any information not already inherent
in the financial statement. The ratios reveal that relationship in a more meaningful way so as
to enable us to draw conclusions from them. The rationale of ratio analysis lies in the fact that
it makes related information comparable. A single figure by itself has no meaning but when
expressed in terms of a related figure, it yields significant interfaces. The ratio analysis, as a
quantitative tool, answers to questions such as are the net profits adequate? Are the assets
being used efficiently? Is the firm Solvent? Can the firm meet its current obligations? And so
on.
A) PROFITABILITY RATIOS
The primary objective of a business undertaking is to earn profits. Profit earning is
considered essential for the survival of the business. A business needs profits not only for its
existence but also for expansion and diversification. Generally, profitability ratios are
calculated either in relation to sales or in relation to investment.
The following ratios can be calculated,
Net Profit Ratio
Operating Profit Ratio
B) TURN OVER RATIOS
Turn over ratios, also referred to as activity ratios or asset management ratios, measure
how efficiency the assets are employed by the firm. . Here the calculated activity ratios are
Debtors Turnover Ratio
Fixed Asset Turnover Ratio
Total Assets Turnover Ratio
Inventory Turnover Ratio
Current Assets Turnover Ratio
Working Capital Turnover Ratio
C) LIQUIDITY RATIOS
Liquidity refers to the ability of a concern to meet its current obligations as and when
these become due. The short term obligations are met by realizing amounts from current
floating or circulating assets. The current assets should either be liquid or hear liquidity.
These should be convertible into cash for paying obligations of short term nature.
Current Ratio
Liquid Ratio
D) LEVERAGE RATIO
Financial leverage refers to the use of debt finance. While debt capital is a cheaper
source of finance, it is also a riskier source of finance. Leverage ratios help in assessing the
risk arising from the use of debt capital.
4.5.2 WORKING CAPITAL MANAGEMENT

Working capital management also referred to short term financial management refers
to the day to day financial activities that deal with current assets (inventors, debtors
short term holding of marketing securities and cash ) and current liabilities ( short
term debt, trade creditors, accrual provisions)
WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITY
STATEMENT OF CHANGES IN WORKING CAPITIAL

Working capital means the excess of current assets over current liability,
statements of changes between the two balance sheet dates. This statement is prepared
with the help of current assets liabilities derived from the two balance sheets.
Every business needs funds for two purposes for its establishment and to carry out its
day operations. Long term funds are required to create production facilities through
the fixed assets such as plant & machinery land buildings furniture etc.
Investments in the assets such as plant part of firms capital which is blocked on a
permanent of fixed bass answer it called fixed capital. Funds are also needs for short term
purpose for purchase for purchase raw material payment of wages and other day to day
expenses etc., these funds are known as working capital.
In the words of statement of working capital is the amount of funds necessary to cover
the cost of opening of the enterprise.
4.5.3 COMPARATIVE BALANCE SHEET

The comparative balance sheet analysis is the study trend of the same items groups of
items and compute items in two more balance sheet items reflect the conduct of the business.
The change can be observed by comparison of the balance sheet, at the beginning and at the
period and these can help is forming an opinion about the columns for the original balance
sheets. A third column is used to show increase in figures. The following items are included
in the share balance viz., Fixed assets investments current asset, loans and advances, share
capital, reserves, secured loans, current liabilities and provisions, deferred tax.
CHAPTER -V
DATA ANALYSIS AND

INTERPRETATION
CHAPTER-V
DATA ANALYSIS AND DATA INTERPRETATION
5.1 RATIO ANALYSIS
5.1.1 NET PROFIT RATIO
The ratio indicates net margin earned on income this ratio, helps to determine the
efficiency with which the affairs of business are being managed. A higher ratio indicates better
position.
Net profit
Net Profit Ratio =
x 100
Net Sales
TABLE NO; 5.1.1

Net Profit
S.No
Net Sales
Year
(Rs.in.Lakhs)
1
2008 2009
71
2
2009 2010
84
3
2010 2011
109
4
2011 2012
161
5
2012 2013
-84
Source: Annual Report 2009-2013 of SSM PVT Ltd
Ratio %
(Rs.in.Lakhs)
2160
2903
3514
4733
4207
3.28
2.89
3.10
3.40
-1.99
INTERPRETATION
The above table shows the net profit ratio is maximum 3.40% in the year 2011-2012. It
gradually changes in the year 2009&2010&2011. It was minimum -1.99% in the year 20122013. It shows an average net profit ratio is 2.13% for the study period.
CHART NO; 5.1.1
NET PROFIT RATIO
Net Profit Ratio

4
3.4
3.28
2.89
3.1
2008 - 2009
2009 - 2010
2010 - 2011
2011 - 2012
2012 - 2013
-1
-2
-1.99
-3
year
5.1.2 OPERATING PROFIT RATIO
This ratio indicates the relationship between operating profit and sales. It shows the
operational efficiency of the firm and it measures the operational efficiency of the
management in carrying the routine operations of the firm.
Operating Profit
Operating Profit Ratio =
X 100
Sales
TABLE NO; 5.1.2

Operating Profit
S.No
Sales
Year
(Rs.in.Lakhs)
1
2008 2009
90
2
2009 - 2010
90
3
2010 - 2011
172
4
2011 - 2012
236
5
2012 2013
53
Ratio%
(Rs.in.Lakhs)
2160
2903
3514
4733
4207
4.16
3.10
4.89
4.98
1.24
INTERPRETATION
The above table shows the operating profit ratio is maximum 4.98 in the year 2011-2012. It
gradually changes in the year 2009-2011. It is minimum 1.24% in the year 2012-2013. It
shows an average operating profit ratio is of 3.67% for the study period.
CHART NO; 5.1.2

Operating Profit Ratio

6
4.89
4.98
4.16
4
3.1
3
2
1.24
1
2008 - 2009
2009 - 2010
2010 - 2011
2011 - 2012
2012 - 2013
YEAR
5.1.3 DEBTORS TURNOVER RATIO

Debtors turnover ratio is called "Receivable Turnover ratio" or "Debtors Velocity". Goods are
sold on credit based on credit policy adopted by the firm. Those customers who are purchases
on credit are called traded debtors or book debtors. Bills or bundies are termed as bills
receivables. The debtors turnover ratio can be calculated as follows:
Total Sales
Debtors Turnover Ratio =
Credit Sales
or
______________
Debtors
Average Debtors
TABLE NO; 5.1.3

Sales
S.No
Debtors
Year
(Rs.in.Lakhs)
1
2008 2009
2160
2
2009 - 2010
2903
3
2010 - 2011
3514
4
2011 - 2012
4733
5
2012 2013
4207
Ratio
(Rs.in.Lakhs)
91
99
98
77
186
23.73
29.32
35.85
61.46
22.61
INTERPRETATION
The above table shows that debtors turnover ratio during 2011-2012 was 61.46 then
2010-2011 was 35.85 and it has been 2009-2010 was 29.32. But has been decreased was
23.73 and 22.61 in the year 2008-209 & 2012-2013. The average Debtors turnover ratio is
34.59 during the period of study.
CHART NO; 5.1.3

Debtors Turnover Ratio

70
61.46
60
50
40
35.85
29.32
30
23.73
22.61
20
10
2008 2009
2009 - 2010
2010 - 2011
2011 - 2012
2012 2013
year
5.1.4 FIXED ASSET TURNOVER RATIO

These ratios express the number of times fixed asset are being turned over in a stated
period. It also indicated the adequacy of sales is relation to the relation to the investment in
fixed assets. It shows whether fixed assets are being efficiently used or not. A higher rate
shows efficient utilization of fixed assets.
Sales
Fixed assets turnover ratio =
Net fixed asset
TABLE NO; 5.1.4
Sales
S.No
Fixed Asset
Year
(Rs.in.Lakhs)
1
2008 2009
2160
2
2009 2010
2903
3
2010 2011
3514
4
2011 2012
4733
5
2012 2013
4207
Ratio
(Rs.in.Lakhs)
1941
1282
1804
1656
1490
1.11
1.54
1.94
2.85
2.82
INTERPRETATION
The above table shows that fixed assets turnover ratio during 2011-2012 was 2.85
then 2012-2013 was 2.82 and it has been 2010-2011 was 1.94. But has been decreased was
1.54 and 1.11 in the year 2009-2010 & 2008-2009. The average fixed assets turnover ratio is
CHART NO; 5.1.4

FIXED ASSET TURNOVER RATIO
Fixed Asset Turnover Ratio

3
2.85
2.82
2011 - 2012
2012 2013
2.5
1.94
2
1.54
1.5
1.11
1
0.5
2008 2009
2009 - 2010
2010 - 2011
YEAR
5.1.5 TOTAL ASSETS TURNOVER RATIO
The total asset turnover represents the amount of revenue generated by a company as a result
of its assets on hand. This equation is a basic formula for measuring how efficiently a
company is operating
Sales
Total Assets Turnover Ratio =
Total Assets
TABLE NO; 5.1.5
Sales
S.No
Total Assets
Year
(Rs.in.Lakhs)
1
2008 2009
2160
2
2009 - 2010
2903
3
2010 - 2011
3514
4
2011 - 2012
4733
5
2012 2013
4207
Ratio
(Rs.in.Lakhs)
2412
2469
2541
2610
2550
0.89
1.10
1.38
1.81
1.64
INTERPRETATION
The above table shows that total assets turnover ratio during 2011-2012 was 1.81.
Then 2012-2013 was 1.64 and it has been 2010-2011 was 1.38. But has been decreased was
1.10 and 0.89 in the year 2009-2010 & 2008-2009. The average total assets turnover ratio is
CHART NO; 5.1.5

TOTAL ASSET TURNOVER RATIO
Total Asset Turnover Ratio

2
1.81
1.8
1.64
1.6
1.38
1.4
1.2
1
1.1
0.89
0.8
0.6
0.4
0.2
0
2008 2009
2009 - 2010
2010 - 2011
2011 - 2012
2012 2013
year
5.1.6 INVENTORY TURNOVER RATIO

Inventory turnover ratio indicates how quickly the goods are sold by a enterprise. It measures
the number of times the inventories are held and replaced during the period, by comparing the
cost of good sold with the stock carried. A company uses this ratio to determine whether there
is excess stock or not. Ideal ratio is 7-8 times per year.
Sales
Inventory/Stock Turnover Ratio =
Average Inventories
TABLE NO; 5.1.6
Sales
S.No
Inventories
Year
(Rs.in.Lakhs)
1
2008 2009
2160
2
2009 - 2010
2903
3
2010 - 2011
3514
4
2011 - 2012
4733
5
2012 2013
4207
Ratio
(Rs.in.Lakhs)
160
282
545
370
260
13.50
10.29
6.44
12.79
16.18
INTERPRETATION
The above table shows that inventory turnover ratio during 2012-2013 was 16.18 then
2008-2009 was 13.50 and it has been 2010-2012 was 12.79. But has been decreased was
10.29 and 6.44 in the year 2009-2010 & 2010-2011. The average of inventory turnover ratio
is 11.84 during the period of study.
CHART NO; 5.1.6

Inventory Turnover Ratio

18
16.18
16
14
13.5
12.79
12
10.29
10
8
6.44
6
4
2
0
2008 2009
2009 - 2010
2010 - 2011
year
5.1.7 CURRENT ASSETS TURNOVER RATIO

That indicates how efficiently a firm is its to generate.
2011 - 2012
2012 2013
Net Sales
Current Assets Turnover Ratio = __________________
Current Assets
TABLE NO; 5.1.7
Sales
S.No
Current Assets
Year
(Rs.in.Lakhs)
1
2008 2009
2160
2
2009 - 2010
2903
3
2010 - 2011
3514
4
2011 - 2012
4733
5
2012 2013
4207
Ratio
(Rs.in.Lakhs)
361
501
789
792
711
5.98
5.79
4.45
5.97
5.91
INTERPRETATION
The above table shows that current assets turnover ratio during 2008-2009 was 5.98
then 2011-2012 was 5.97 and it has been 2012-2013 was 5.91. But has been decreased was
5.79 and 4.45 in the year 2009-2010 & 2010-2011. The average of current assets turnover
ratio is 5.62 during the period of study.
CHART NO; 5.1.7

Current Asset Turnover Ratio

7
5.98
5.79
5.97
5.91
2011 - 2012
2012 2013
5
4.45
4
2008 2009
2009 - 2010
2010 - 2011
year
5.1.8 WORKING CAPITAL TURNOVER RATIO
These ratio measures the effective utilization of working capital it also measure the smooth
running of business or otherwise the ratio establishes relationship between cost of sales and
working capital.
Sales
Working capital Turnover Ratio =
_________________
Working capital
TABLE NO; 5.1.8

Sales
S.No
Working Capital
Year
(Rs.in.Lakhs)
1
2008 2009
2160
2
2009 - 2010
2903
3
2010 - 2011
3514
4
2011 - 2012
4733
5
2012 2013
4207
Ratio
(Rs.in.Lakhs)
-97
15
140
351
247
- 22.26
19.35
25.10
13.48
17.03
INTERPRETATION
The above table shows that working capital turnover ratio during 2010-2011 was
25.10 then 2009-2010 was 19.35 and it has been 2012-2013 was 17.03. But has been
decreased was 13.48 and -22.26 in the year 2012-2013 & 2008-209. The average working
capital turnover ratio is 10.54 during the period of study.
CHART NO; 5.1.8

Working Capital Turnover Ratio

30
25.1
19.35
20
17.03
13.48
10
2008 2009
2009 - 2010
2010 - 2011
2011 - 2012
2012 2013
-10
-20
-22.26
-30
year
5.1.9 CURRENT RATIO

The ratio of current assets to current liabilities is called current ratio. In order to
measure the short term liquidity or solvency of the concern, comparison of current assets and
current liabilities is inevitable. Current ratio in the case liability of a concern to meet its
current obligations as and well they are due for payment.
The current ratio is calculated by the following formula.
Current Assets
Current ratio =
Current Liabilities
TABLE NO; 5.1.9
Current Assets
S.No
Current Liability
Year
Ratio
(Rs.in.Lakhs)
1
2008 2009
361
2
2009 - 2010
501
3
2010 - 2011
789
4
2011 - 2012
792
5
2012 2013
711
(Rs.in.Lakhs)
458
486
649
441
464
0.79
1.03
1.21
1.80
1.53
INTERPRETATION
The above table shows that current ratio during 2011-2012was 1.87 then 2012-2013
was 1.53 and it has been 2010-2011 was 1.21.But has been decreased was 1.03 and 0.79 in
the year 2009-2010 & 2008-2009. The average current ratio is 1.27 during the period of
study.
CHART NO; 5.1.9

CURRENT RATIO
Current Ratio
2
1.8
1.8
1.6
1.53
1.4
1.21
1.2
1.03
1
0.8
0.79
0.6
0.4
0.2
0
2008 2009
2009 - 2010
2010 - 2011
2011 - 2012
2012 2013
year
5.1.10 QUICK RATIO

This ratio is otherwise known as quick ratio. This ratio measures the firms ability to convert
its current assets quickly into cash in order to meet its current liabilities. It is a true test of
business solvency. A company uses this ratio to determine the extent to which its immediate
liabilities are met. Higher ratio indicates sound financial position.
(Quick Assets = Current Assets Inventory)
Liquid Assets
Liquid/Quick Ratio =
Liquid Liabilities
TABLE NO; 5.1.10
Quick Asset
S.No
Current Liability
Year
Ratio
(Rs.in.Lakhs)
1
2008 2009
201
2
2009 2010
219
3
2010 2011
244
4
2011 2012
422
5
2012 2013
451
(Rs.in.Lakhs)
458
486
649
441
464
0.43
0.45
0.37
0.95
0.97
INTERPRETATION
The above table shows that quick ratio during 2012-2013was 0.97 then 2011-2012 was 0.95
and it has been 2009-2010 was 0.45. But has been decreased was 0.43 and 0.37 in the year
2008-2009 & 2010-2011. The average quick ratio is 0.63 during the period of study.
CHART NO; 5.1.10

QUICK RATIO
Quick Ratio
1.2
0.95
0.97
2011 - 2012
2012 2013
0.8
0.6
0.43
0.45
0.37
0.4
0.2
2008 2009
2009 - 2010
2010 - 2011
year
5.2 COMPARATIVE BALANCE SHEET
TABLE NO; 5.2.1
Comparative balance sheet for the year ended 31st March 2009 to 31st March 2010.
Particulars
2008-2009
(Rs.in.Lakhs)
2009-2010
(Rs.in.Lakhs)
Increase/
Decrease
Amount
Increase/
Decrease
%
4308
4322
14
0.32
2367
2440
73
3.08
1941
1882
-59
-3.03
55
16
-39
-70.90
1996
1898
-98
-4.90
108
108
160
282
122
76.65
91
99
8.79
110
120
10
9.09
405
448
43
10.61
0.00
0.00
766
949
183
23.90
2762
2847
85
3.07
450
478
28
6.22
458
486
28
6.22
ASSETS
Fixed Assets
Gross block
Less: Depreciation
Net Block
Capital Working process
Sub Total
Investments
Current Assets & Loans
Inventories
Sundry Debtors
Cash & Bank Balance
Loans & Advances
Miscellaneous exp
Sub Total
Grand Total
LIABILITIES
Current Liabilities
Provisions
Sub Total
Secured Loan
672
770
28
4.16
285
285
1454
1413
-41
-2.81
1739
1698
-41
-2.81
2869
2954
85
2.96
Share Holders Fund

Share capital
Reserves and Surplus
Sub Total
Grand Total
Source: Annual Report 2009-2010
INTERPRETATION
From the comparative balance sheet of the year 2009 2010 The following inference can be
made.
Net block has decreased by 3.03%.
Capital work in progress has been decreased by 70.90%.
No changes in investment.
Net current asset & loan has been increased by the 23.90%
Current liability has been increased by the 6.22%
Secured loan increase 4.16%
No changes in share capital.
Reserve has been decreased by 2.81%.
TABLE NO; 5.2.2

Comparative balance sheet for the year ended 31st March 2010 to 31st March 2011
Particulars
2009-2010
(Rs.in.Lakhs)
2010-2011
(Rs.in.Lakhs)
Increase/
Decrease
Amount
Increase/
Decrease
%
ASSETS
Fixed Assets
Gross block
4322
4355
33
0.76
Less: Depreciation
2440
2551
111
4.54
Net Block
1882
1804
-78
-4.14
16
15
-1
-6.25
Sub Total
1898
1819
-79
-4.16
Investments
108
105
-3
-2.77
Inventories
282
545
263
93.26
Sundry Debtors
99
98
-1
-1.01
Cash & Bank Balance
120
146
26
21.66
Loans & Advances
448
477
29
6.47
Sub Total
1057
1371
314
29.70
Grand Total
2955
3190
235
7.95
LIABILITIES
Current Liabilities
478
634
156
32.63
Provisions
15
87.5
Sub Total
486
649
163
33.53
Secured Loan
770
859
89
11.55
Share capital
285
285
1413
1398
-15
-1.06
Sub Total
1698
1683
-15
-1.06
Grand Total
2954
3191
237
8.02
Share Holders Fund
INTERPRETATION
From the comparative balance sheet of the year 2010 2011. The following inference can
be made.
Investment has been decrease 2.77%
TABLE NO; 5.2.3

Particulars
2010-2011
2011-2012
(Rs.in.Lakhs) (Rs.in.Lakhs)
Increase/
Decrease
Amount
Increase/
Decrease
%
ASSETS
Fixed Assets
Gross block
4355
4387
32
0.73
Less: Depreciation
2551
2731
180
7.05
Net Block
1804
1656
-148
-8.20
15
-7
-46.66
Sub Total
1819
1664
-155
-8.52
Investments
105
105
Inventories
545
370
-175
-32.11
Sundry Debtors
98
77
-21
-21.42
Cash & Bank Balance
146
345
199
136.30
Loans & Advances
477
490
13
2.72
Miscellaneous exp
Sub Total
1266
1282
16
1.26
Grand Total
3085
2946
-139
-4.50
LIABILITIES
Current Liabilities
634
420
-214
-33.75
Provisions
15
21
40
Sub Total
649
441
-208
-32.04
Secured Loan
859
892
33
3.84
Share capital
285
285
1398
1434
36
2.57
Sub Total
1683
1719
36
2.13
Grand Total
2205
2159
-46
-2.08
Share Holders Fund
INTERPRETATION
From the comparative balance sheet of the year 2011 2012. The following inference can
be made.
No changes in investment.
TABLE NO; 5.2.4

Particulars
2011-2012
2012-2013
(Rs.in.Lakhs) (Rs.in.Lakhs)
Increase/
Decrease
Amount
Increase/
Decrease
%
ASSETS
Fixed Assets
Gross block
4387
4399
12
0.27
Less: Depreciation
2731
2909
178
6.5
Net Block
1656
1490
-166
-10.02
-1
12.5
Sub Total
1664
1497
-167
-10.03
Investments
105
-105
-100
Inventories
370
260
-110
-29.72
Sundry Debtors
77
186
109
141.55
Cash & Bank Balance
345
265
-80
-23.18
Loans & Advances
490
806
316
64.48
Miscellaneous exp
Sub Total
1282
1517
235
18.33
Grand Total
3051
3014
-37
-1.21
LIABILITIES
Current Liabilities
420
412
-8
-1.90
Provisions
21
52
31
147.61
Sub Total
441
464
23
5.21
Secured Loan
892
1040
148
16.59
Share capital
285
285
1434
1225
-209
-14.57
Sub Total
1692
1510
-209
-12.15
Grand Total
3025
3014
-11
-0.36
Share Holders Fund
INTERPRETATION
From the comparative balance sheet of the year 2012 2013. The following inference
can be made
Investment has been decrease by 100%.
5.3 SCHEDULE OF CHANGES IN WORKING CAPITAL

TABLE NO; 5.3.1
Statement showing changes in working capital for the year ended 31st March 2010.
2009-2010
2008-2009
PARTICULAR
(Rs.in.Lakh
INCREASE
DECREASE
(Rs.in.Lakhs)
s)
Current Assets
Inventories
160
282
122
Sundry debtors
91
99
Cash and bank balance
110
120
10
Loan and advances

Total current assets
Current Liability
405
766
448
949
43
Current liability
450
478
28
Provisions
Total current liability
Net working capital
8
458
8
486
0
-
308
28
(CA-CL)
463
183
Increase Working
155
Capital
Total
463
155
463
183
183
INTERPRETATION
In the year 2009-2010 the working capital has been increased up to 155 lakhs due to the
increase in the current asset such as inventories, debtors, cash and bank balance, loan and
advance. The current liability is decrease. In the year firm has enough money to met its
current liability.
CHART NO; 5.3.1

SCHEDULE OF CHANGES IN WORKING CAPITAL
Working Capital For Year 2009-2010

500
463
450
400
350
308
300
250
200
155
150
100
50
0
CA-CL 2009(A)
CA-CL 2010(B)
A-B
TABLE NO; 5.3.2

Statement showing changes in working capital for the year ended 31st March 2011
2009-2010
2010-2011
(Rs.in.Lakhs)
(Rs.in.Lakhs)
282
PARTICULAR
INCREASE
DECREASE
545
263
99
98
120
146
26
448
447
29
949
1266
478
634
156
15
486
649
463
617
Current Assets
Inventories
Sundry debtors
Loan and advance
Current Liability
Current liability
Provision
Net working capital
318
164
(CA-CL)
Increase working capital
Total
154
617
154
617
318
318
INTERPRETATION
current liability.
CHART NO; 5.3.2


700
617
600
500
463
400
300
200
154
100
0
CA-CL 2010(A)
CA-CL 2011(B)
A-B
TABLE NO; 5.3.3

2010-2011
2011-2012
(Rs.in.Lakhs)
(Rs.in.Lakhs)
545
370
98
77
146
345
199
477
490
13
1266
1282
634
420
15
21
649
441
PARTICULAR
INCREASE
DECREASE
Current Assets
Inventories
Sundry debtors
Loan and advances
175
21
Current Liability
Current liability
Provisions
Net working capital
617
841
214
6
426
202
(CA-CL)
Total
224
841
224
841
426
426
INTERPRETATION
current liability.
CHART NO; 5.3.3


900
841
800
700
617
600
500
400
300
224
200
100
0
CA-CL 2011(A)
CA-CL 2012(B)
A-B
TABLE NO; 5.3.4

2011-2012
2012-2013
(Rs.in.Lakhs)
(Rs.in.Lakhs)
inventories
370
260
sundry debtors
77
186
cash and bank balance
345
265
loan and advances
490
806
1282
1517
420
412
PARTICULAR
INCREASE
DECREASE
Current Assets
10
109
80
316
Current liability
Current liability
8
Provisions
21
52
441
464
Net working capital
841
(CA-CL)
221
1053
212
Total
1053
31
433
212
1053
433
433
INTERPRETATION
current liability.
CHART NO; 5.3.4


1200
1053
1000
841
800
600
400
212
200
0
CA-CL 2012(A)
CHAPTER -VI
CA-CL 2013(B)
A-B
FINDI
NG,
SUGGESTION,
CONCULSION
CHAPTER-VI
6.1 FINDINGS
Net profit ratio has a slow growth and decline during the period of study. It is
decreases in the year 2012 2013. It indicates insignificant improvement in
conditions of the business.
Operating profit ratio is the test of operational efficiency. The efficiency has risen
slightly and decreases 1.24 in the year 2012 2013.
Debtor turnover ratio shows slight variation between the all years, the higher ratio it
signifies that the debts are being collected more promptly in the company.
Fixed asset turnover ratio shows increasing trend in the all financial year during the
period of study. It shows asset share well utilized.
Total asset turnover ratio indicates the fluctuation status of the company. The lowest
ratio 0.89 in the year 2008 2009.
Inventory turnover ratio indicates the utilization of inventory in an efficient manner. It
was higher ratio 16.18 in the year 2012-2013.
Current asset turnover ratio shows the smooth condition of the company.
Working capital turnover ratio shows the negative 22.26 in the year 2008 2009. It is
smooth condition during the period 2009 -2010 to 2012 2013.
The current ratio was favorable to the organization during the year 2010-2013. It is
decrease 0.79 in the year 2009.
The liquid ratio was dissatisfaction level. Liquid liability is excesses the liquid asset
during the period of study.
Comparative balance sheet shows the overall financial position in good.
The schedule of changes in working capital shows the increasing trends of all period.
6.2 SUGGESTIONS & RECOMMENDATIONS
The management may take proper decisions to maintain their absolute liquid ratio, so
that they can maintain their liquidity position in the long run.
The liquidity position could be strengthened by reducing the current liabilities.
The management may try to increase the EPS by increasing the profitability of the
company.
The cash balance level of the company when compared to current liabilities is
minimum and the management may improve the cash balance to an optimum level to
meet the contingencies.
The company may increase their net profit.
The company may control the expenses and increase their operating profit.
The company should concentrate with investment and it will be helpful to the
company for its successful running.
6.3 CONCLUSION
The study made the researcher to analyses the financial position of the SRI
SOWDESWARI MILLS.
The company has maintained the proper financial position to meet day to day
activities. But if we take the current liability, they should keep some attention the
reduce these things in the following year through the company is a small scale
company. If they utilize the resources in a effective and efficient way to meet the
profit.
The study was undertaken on the financial performance of the company tools such as
ratio analysis and schedule of changes in working capital, comparative balance sheets
have been used to find out of the companys efficiency. The firm has healthy
condition of finance for long term.
BIBLIOGRAPHY
BIBLIOGRAPHY
I.
II.
Company profile is Sri Sowdeswari Mills Private Ltd.

Dr.S.N.Maheswari (2000) Principles Of Management Accounting, Publishing
By Sultan Chand&Sons, New Delhi.
III.
Dr.V.R.Palanivel (2010) Financial Management 1st Edition, S Chand &

Company Ltd, New Delhi.
IV.
Dr.I.M.Pandey (2003) Financial Management 8 th Edition, Vikas Publishing

House Pvt. Ltd, New Delhi.
V.
T.S. REDDY, Y.HARI PRASAD REDDY, Management Accounting
READ MORE;
I.
II.
http;//www.investorwords.com
http;//www.businessdictionary.com
III.
http;//www.google.com
IV.
http;//www.yahoo.com
APPENDIX
APPENDIX;

BALANCE SHEET
.. In Rs
Cr..
Sources of
funds
Mar '13
Mar '12
Mar '11
Mar '10
Mar09
Total Share
Capital
2.85
2.85
2.85
2.85 2.85
Equity Share
Capital
2.85
2.85
2.85
2.85 2.85
Share
Application
Money
0.00
0.00
0.00
0.00 0.00
Preference
Share Capital
0.00
0.00
0.00
0.00 0.00
12.25
14.34
13.98
14.13 14.54
0.00
0.00
0.00
0.00 0.00
Networth
15.10
17.19
16.83
16.98 17.39
Secured
Loans
10.40
8.92
8.59
7.70 6.72
Unsecured
Loans
0.00
0.00
0.00
0.00 0.00
Total Debt
10.40
8.92
8.59
7.70 6.72
Reserves
Revaluation
Reserves
Total
Liabilities
25.50
26.11
25.42
Application
of funds
Mar '13
Mar '12
Mar '11
Mar '10
Gross Block
43.99
43.87
43.55
43.22
Less: Accum.
Depreciation
29.09
27.31
25.51
24.40
Net Block
14.90
16.56
18.04
18.82
Capital Work
in Progress
0.07
0.08
0.15
0.16
Investments
0.00
1.05
1.05
1.08
Inventories
2.60
3.70
5.45
2.82
1.86
0.77
0.98
0.99
2.65
3.45
1.46
1.20
7.11
7.92
7.89
5.01
8.06
4.90
4.77
4.48
0.00
0.00
0.00
0.00
15.17
12.82
12.66
9.49
Sundry
Debtors
Cash and
Bank Balance
Total Current
Assets
Loans and
Advances
Fixed
Deposits
Total CA,
Loans &
Advances
Deffered
Credit
Current
Liabilities
Provisions
Total CL &
Provisions
Net Current
Assets
Miscellaneou
s Expenses
24.68 24.11
Mar09
43.08
23.67
19.41
0.55
1.08
1.60
0.91
1.10
3.61
4.05
0.00
7.66
0.00
0.00
0.00
0.00
4.12
4.20
6.34
4.78
0.52
0.21
0.15
0.08
4.64
4.41
6.49
4.86
10.53
8.41
6.17
4.63
0.00
0.00
0.00
0.00
0.00
4.50
0.08
4.58
3.08
0.00
Total Assets
Contingent
Liabilities
Book Value
(Rs)
25.50
26.10
25.41
24.69
0.00
0.00
0.00
0.00
52.97
60.30
59.04
59.59
24.12
0.00
61.03

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A STUDY ON FINANCIAL PERFORMANCE AND

ANALYSIS IN SRI SOWDESWARI MILLS (P) LTD,

MASTER OF BUSINESS ADMINISTRATION

Dr. T. SARATHY, BE (ECE)., M.B.A., Ph.D.

PERIYAR INSTITUTE OF MANAGEMENT STUDIES (PRIMS)

PERIYAR INSTITUTE OF MANAGEMENT STUDIES

JALAKANTAPURAM is the bonafide work of P.MANIKANDAN (REGISTER

Viva voice held on

P.MANIKANDAN [REGISTER NUMBER : P12MGT2027 ] a student of

signature of the student

1.3 About the company Profile

NET PROFIT RATIO

OPERATING PROFIT RATIO

DEBTORS TURNOVER RATIO

FIXED ASSETS TURNOVER RATIO

TOTAL ASSETS TURNOVER RATIO

INVENTORY TURNOVER RATIO

NET PROFIT RATIO

OPERATING PROFIT RATIO

DEBTORS TURNOVER RATIO

FIXED ASSETS TURNOVER RATIO

TOTAL ASSETS TURNOVER RATIO

INVENTORY TURNOVER RATIO

1.2 INDUSTRIAL PROFILE

PRESENT CONDITION OF THE INDUSTRY

TEXTILE INDUSTRY IN INDIA

PRESENT TREND OF THE INDUSTRY

GROWTH AND DEVELOPMENT

1.3 COMPANY PROFILE

SRI SOWDESWARI MILLS PRIVATE LIMITED

PROMOTERS OF THE COMPANY

Sri Sowdeswari Mills Pvt Ltd,

GENESIS AND DEVELOPMENT

SRI SOWDESWARI MILLS PRIVATE LIMITED

SRI SOWDESWARI MILLS PVT LTD,

2. Registered and Administrative Office

3. State in which the company is registered :

PRIVATE LIMITED COMPANY

100% cotton yarn production

381, Trichy main Road,

The Board of Directors,

10. Financial Institutions

The city union Bank,

GOAL OF THE COMPANY

FULFILLMENT OF SOCIAL RESPONSIABILITIES

PURCHASE / JOB WORK

PART TIME MEDICAL OFFICER

The finance of the company can be obtained from.

: 2004 and 2005

Empty Cops Weight

: Raving 270 per M/C

PRODUCTION PROCESS CHART

Single Yarn on Cones

Double Yan on Cones

2 yarns X 60s Count =

It is accepted for the 80s combed yarn.

Out of this, permanent workers

Maintenance & Cleaning

FORMATION OF SHIFT SYSTEM

The Shift Working For Workers Are;

with half an hour break

with half an hour break

with half an hour break

ANNUAL LEAVE WITH WAGES