CHAPTER I

INTRODUCTION

1.1 FINANCIAL PERFORMANCE ANALYSIS

The term ‘financial performance analysis also known as analysis and interpretation of
financial statements’ , refers to the process of determining financial strength and weaknesses
of the firm by establishing strategic relationship between the items of the balance sheet ,
profit and loss account and other operative data.

“Financial performance analysis is a process of evaluating the relationship between

component parts of a financial statement to obtain a better understanding of a firm’s position
and performance.

The purpose of financial analysis is to diagnose the information contained in financial

statements so as to judge the profitability and financial soundness of the firm. Just like a
doctor examines his patient by recording his body temperature, blood pressure etc.

Before making his conclusion regarding the illness and before giving his treatment. A
financial analyst analyses the financial statements with various tools of analysis before
commenting upon the financial health or weaknesses of an enterprise.

The analysis and interpretation of financial statements is essential to bring out the
mystery behind the figures in financial statements. Financial statements analysis is an attempt
to determine the significance and meaning of the financial statement data so that forecast may
be made of the future earnings, ability to pay interest and debt maturities (both current and
long term) and profitability of a sound divided policy.

Financial performance refers to the act of performing financial activity. In broader

sense, financial performance refers to the degree to which financial objectives being or has
been accomplished. It is the process of measuring the results of a firm's policies and
operations in monetary terms. It is used to measure firm's overall financial health over a
given period of time and can also be used to compare similar firms across the same industry
or to compare industries or sectors in aggregation.
 “The analysis of financial statements is a process of evaluating the relationship
between component parts of financial statements to obtain a better understanding of the
firm’s position and performance.”

Financial performance analysis is the process of identifying the financial strengths

and weaknesses of the firm by properly establishing the relationship between the items of
balance sheet and profit and loss account. It also helps in short-term and long term
forecasting and growth can be identified with the help of financial performance analysis. The
dictionary meaning of ‘analysis’ is to resolve or separate a thing in to its element or
components parts for tracing their relation to the things as whole and to each other. The
analysis of financial statement is a process of evaluating the relationship between the
component parts of financial statement to obtain a better understanding of the firm’s position
and performance. This analysis can be undertaken by management of the firm or by parties
outside the namely, owners, creditors, investors.

Financial management is that managerial activity which is concerned with the

planning and controlling of a firm financial reserve. Financial management as an academic
discipline has undergone fundamental changes as regards its scope and coverage. In the early
years of its evolution it was treated synonymously with the raising of funds. In the current
literature pertaining to this growing academic discipline, a broader scope so as to include in
addition to procurement of funds, efficient use of resources is universally recognized.
Financial analysis can be defined as a study of relationship between many factors as disclosed
by the statement and the study of the trend of these factors. The objective of financial
analysis is the pinpointing of strength and weakness of a business undertaking by regrouping
and analyzing of figures obtained from financial statement and balance sheet by the tools and
techniques of management accounting. Financial analysis is as the final step of accounting
that result in the presentation of final and the exact data that helps the business managers,
creditors and investors.

NATURE:

According to the American institute to Certified Public Accounts, (AICPA),

“Financial statement reflects a combination of recorded facts, Account principals and
personal judgments”. The following points the nature of financial statements
 1. Recorded facts: The term recorded facts refers to the data taken out form accounting
records. Facts which have not been recorded in the financial book are not depicted in
financial statements, however they might be. For example, fixed assets are shown at
cost irrespective of their market or replacement price since only cost price is recorded
in the books.
2. According principles: Certain accounting principles, concepts, and conventions are
followed in the preparation of financial statement. For example, the principal of
valuing assets at cost less depreciation is following for balance sheet purpose.
3. Personal judgments: Personal judgments has and important bearing on the financial
statements. For example, the selection of a method for stock valuation depends on the
personal judgment of the accounting.

TYPES OF FINANCIAL ANALYSIS

Following are the various types of financial analysis.

A. On the basis of material used.

1. External Analysis

Analysis of financial statements may be carried out on the basis of published

information. i.e.., information made available in the annual report of the enterprise. such
analysis are usually carried out by those who do not have access to the detailed accounting
records of the Co. i.e., Banks, Creditors etc.

2. Internal Analysis

Analysis may also be based on detailed information available within the Co. which is
not available to the outsiders. such analysis is called internal analysis. this type of analysis id
of a detailed one and is carried out on behalf of the management for the purpose of providing
necessary information for decision making, such analysis emphasizes on the performance
appraisal and assessing the profitability of different activities.
B. According to objectives of analysis

1. Short Term Analysis

Short term analysis is mainly concerned with the working capital analysis in the short
run, must have ample funds readily available to meet its current needs and sufficient
borrowing capacity to meet the contingencies. In short term analysis the current assets and
current liabilities are analysed and liquidity is determined.

2. Long Term Analysis

In the long term a Co. must earn a minimum amount sufficient to maintain a
reasonable rate of return on the investment to provide for the necessary growth and
development of the Co., and to meet the cost of capital. financial planning is also desirable
for the continued success of a Co. Thus in the long term analysis the stability and the earning
potentiality of the C. is analysed i.e., fixed assets, long term debt structure and the ownership
interest is analysed.

C. According to the Modus Operandi of analysis

1. Horizontal Analysis

Analysis of financial statements involves making comparisons and establishing

relationship among related items. such comparison or establishing of relationship may be
based on financial statements of a Co.for a number of years and the financial statements of
different Co's for the same year. such analysis is called horizontal analysis. it may take the
following two forms.

a. comparative financial statement analysis

b. trend analysis.

2. vertical Analysis.

Analysis of financial data based on relationship among items in a single period of

financial statement is called vertical analysis. from a single balance sheet or P&L A/C
relationships of various items may be established.

e.g. various assets can be expressed as percentage of total assets. statements

containing such analysis are also called as common size statements. The common size P&L
A/C is more useful in analysing the operating results and costs during the year. It shows each
element of cost as a percentage of sales. Similarly common size balance sheet
show fixed assets as a percentage to total assets.

SIGNIFICANCE OF FINANCIAL PERFORMANCE ANALYSIS

Interest of various related groups is affected by the financial performance of a firm.

Therefore, these groups analyze the financial performance of the firm. The type of analysis
varies according to the specific interest of the party involved.

Trade creditors: interested in the liquidity of the firm (appraisal of firm’s liquidity)
Bond holders: interested in the cash-flow ability of the firm (appraisal of firm’s
capital structure, the major sources and uses of funds, profitability over time, and projection
of future profitability)
Investors: interested in present and expected future earnings as well as stability of
these earnings (appraisal of firm’s profitability and financial condition)
Management: interested in internal control, better financial condition and better
performance (appraisal of firm’s present financial condition, evaluation of opportunities in
relation to this current position, return on investment provided by various assets of the
company, etc)
1.2 IMPORTANCE OF THE STUDY
As an effective and profitable business owner, you need to regularly schedule time to
analyse your business’ performance. Business owners often fall I then into the trap of
thinking they know the state of their financial affairs as they become busier. The daily
demands of running a successful business, however, leave them little to devote this critically
important management function.
1.3 OBJECTIVES OF THE STUDY

1. To analyse the financial performance of the Bp International Garments by using ratio

analysis.
2. To study the profits of the business and net sales of the business and to know the
stock reserve for sales of the business.
3. To know the solvency of the business and the capacity to give interest to the long term
loan lenders (debenture holders) and dividend to the share holders.
4. To analyse the financial position of the company using trend analysis and comparative
balance sheet analysis.
5. To offer valuable suggestions for improving the financial performance of the
company.
1.4 SCOPE OF THE STUDY
Research is conducted only in Bp International Garments. The study is done based on
the annual reports and the analysis is done only for financial year’s form 2013-17. Research
has used only profit and loss account and balance sheet for doing the analysis. Results are
interpreted only on the basis of analysis.
1.5 LIMITATIONS OF THE STUDY

 The study has been conducted only in Bp International Garments for the purpose of
measuring the financial performance.
 Analysis and discussions are based only on the secondary data which were collected
from the annual reports of bp international Garments.
 Most of the data collected was historical in nature. The hence value of money has not
been taken into consideration.
1.6 RESEARCH METHODOLOGY

RESEARCH DESIGN
Research is a process in which the researchers wish to find out the end result for a
given problem and thus the solution helps in future course of action. The research has been
defined as “A careful investigation or enquiry especially through search for new facts in
branch of knowledge”

RESEARCH DESIGN
The research design of the present study is descriptive, analytical and conclusive.

SOURCES OF DATA
Only the secondary data has been used in project study. The researcher himself being
an external one and doing study as a part of curriculum has had to depend mainly upon
secondary data for the different aspects.

Hence the data required for the study where collected mostly from the annual report
manuals and accounts of bp international Garments, and various magazines and journals.

PERIOD OF THE STUDY

The data were collected for Five years from 2013-17.

WORK OF ANALYSIS
To arrive at research findings and the conclusion of the present study, ratio analysis,
comparative balance sheet analysis and Trend analysis have been used.
 CHAPTER II

INDUSTRY PROFILE FOR TEXTILES

A Latin word, originated from texere, it means “to weave”. A textile was originally a
woven fabric, but the textile as the plural form of Textiles. It now also applied to fibres,
filaments and yarns. Natural and manufactured and most products for which these are a
principal raw material. Note.

Textiles also refers to the yarns, threads and wools that can be spun, woven, tufted,
tied and otherwise used to manufacture cloth. The production of Textiles is an ancient art,
whose speed and scale of production has been altered Almost beyond recognition by mass-
production and the introduction of modern manufacturing techniques. An ancient Roman
weaver would have a problem recognizing a plan weave, twill, or satin.

There were various stages-from a historical perspective – where the textile industry
evolved from being a domestic small-scale industry, to the status of supremacy it currently
holds. The ‘cottage stage’ was the first stage in its history where textiles were produced on a
domestic basis.

During this period cloth was made from materials including wool, flax and cotton. The
material depended on the area where the cloth was being produced, and the time they were
being made.

In the later half of the medieval period in the northern parts of Europe, cotton came to
be regarded as an imported fiber. During the later phases of the 16th century cotton was
grown in the warmer climes of America and Asia. When the Romans ruled, wool, leather and
linen were the materials used for making clothing in Europe, while flax was the primary
material used in the northern parts of Europe.

During this era, excess cloth was bought by the merchants who visited various areas
to procure these left-over pieces. A variety of processes and innovations were implemented
for the purpose of making clothing during this time. These processes were dependent on the
material being used, but there were three basic steps commonly employed in making
clothing. These steps included preparing material fibres for the purpose of spinning, knitting
and weaving.
 During the Industrial Revolution, new machines such as spinning wheels and
handlooms came into the picture. Making clothing material quickly became an organized
industry-as compared to the domesticated activity it had been associated with before. A
number of new innovations led to the industrialization of the textile industry in Great Britain.
Clothing manufactured during the Industrial Revolution formed a big part of the exports
made by Great Britain. They accounted for almost 25%of the total exports made at that time,
doubling in the period between 1701 and 1770.

The center of the cotton industry in Great Britain was Lancashire – and the amount
exported from 1701 to 1770 had grown ten times. However, wool was the major export item
at this point of time.

In the Industrial Revolution era ,a lot of effort was made to increase the speed of the
production through inventions such as flying shuttle in 1733, the flyer-and-bobbin system,
and the Roller Spinning machine by John Wyatt and Lewis Pawl in 1738.

Lewis pawl later came up with the carding machine in 1748 and in 1764 the spinning
jenny was also developed. The water frame was invented in 1771 by Richard Arkwright. The
power loom was invented in 1784 by Edmund Cartwright.

In the initial phases, textile mills were located in and around the rivers since they were
powered by water wheels. After the steam engine was invented, the dependence on the rivers
ceased to a great extent. In the later phases of the 20th century, shuttles that were used in the
textile industry were developed and became faster and thus more efficient. This led to the
replacement of the older shuttles with the new ones.

Today, modern techniques, electronics and innovation have led to a competitive, low-
priced textile industry offering almost and type of cloth or design a person could desire.
With its low cost labour base, China has come to dominate the global textile industry.

Textile Industry in India is the second largest employment generator after agriculture.
It holds significant status in India as it provides one of the most fundamental necessities of
the people. Textile industry was one of the earliest industries to come into existence in India
and it accounts for more than 30% of the total exports. In fact Indian textile industry is the
second largest in the world, second only to China.
 Textile Industry is unique in the terms that it is an independent industry, from the
basic requirement of raw materials to the final products, with huge value-addition at every
stage of processing. Textile industry in India as vast potential for creation of employment
opportunities in the agricultural, industrial, organized and decentralized sectors & rural and
urban areas, particularly for women and the disadvantaged. Indian textile industry is
constituted of the following segments: Readymade Garments, Cotton Textile including
Handlooms, Man-made Textile, Silk Textile, Woollen Textiles, Handicrafts, Coir and Jute.

Till the year 1985, development of textile sector in India took place in terms of
general policies. In 1985, for the first time the importance of textile sector was recognized
and a separate policy statement was announced with regard to development of textile sector.
In the year 2000, National Textile Policy was announced. Its main objective was: to provide
cloth of acceptable quality at reasonable prices for the vast majority of the population of the
country to increasingly contribute to the provision of sustainable employment and the
economic growth of the nation; and to compete with confidence for an increasing share of the
global market. The policy also aimed at achieving target of textile and apparel export of US $
50 billion by 2010 of which the share of garments will be US $ 25 billion.
BP INTERNATIONAL COMPANY PROFILE:

Incepted in 2008, constant innovations and creative skills are the cornerstone of our
success. We offer woven garments, woven fabrics with colors, hues and textures crafted from
the finest materials. Traditional to contemporary, each piece is an art of work that reflects
fine craftsmanship. Our responsiveness, flexibility, and ability to create new and
innovative designs, distinguishes us from our competitors. It is the trust, support and
assurance of our clients that has become the momentum for our growth. We have been able to
establish strong liaisons with our clients by offering designer tie backs of high quality and
elegance.

The company is best appreciated by its buyers for superior quality, competitive rates
and timely deliveries, which credited the company with an endless list of buyers across the
globe.

Bp international
Manufacturer / Exporters / Wholesale Suppliers Of Ladies Half Sleeve Tops, Ladies
Sleev Less Tops, Check Short Sleev Shirt, Check Long Sleev Shirt, shirt with knit sleeves,
Mens Short Sleev Plain Shirt, mens long sleeve plain shirts, Girls Tops, Girls Sleeveless
Frocks, Girls Half Sleeve Frocks, Ladies Jump Suit, Poly Woven Ladies Dress, Poly Woven
Ladies Dress, Ladies Jump Suit, Ladies Sleev Less Tops, Check Short Sleev Shirt, Check
Long Sleev Shirt, Shirt With Knit Sleev, Mens Short Sleev Plain Shirt, Mens long sleev plain
shirt, Ladies Half Sleeve Tops, Girls Skirts, Ladies Quarter Sleeve Tops, Ready Made
Garments, Ladies Pants, Ladies Capris, Woven Garments, Ready Made Garments, Pants,
Ladies Woven Garments, Ladies Garments, Ladies Blouse, Mens Full Sleeve Shirts, Mens
Half Sleeve Shirts, Ladies Full Sleeve Tops, Ladies Layered Tops, Ladies Half Sleeve Tops,
Ladies Poly woven AOP Dress, Ladies Jump Suits, Ladies Sleeveless Tops, Mens Half
Sleeve Checked Shirts, Mens Full Sleeve Checked Shirts, Boys Knit Sleeve Shirts, Capris

ABOUT Bp international
 Our workforce consists of talented designers and agile craftsmen who are
engaged in the production of decorative and high quality garments
 Our Capacity per month 9000 to 10000 Dozens standard woven garments
  Our main focus is on offering outstanding products to our customers and sticking
to timely delivery schedule
 Right from fabric to Garments all in house Production which keep us ahead of our
competitor in respect to quality
CUSTOMER BASE

We are supplying all types of woven garments to Europe & USA customers.
HUMAN RESOURCE POLICIES

 The company complies with all local labor law requirements voluntarily.
 The company is an equal opportunity employer and does not discriminate on the basis
of sex, religion, caste or creed.
 We do not employ any child labor (below 18 years) and make every effort to comply
with the established human rights standards.
 The company is driven ethical values.

OUR PRINCIPLES

 The company complies with all local labour law requirements voluntarily.

 The company is an equal opportunity employer and does not discriminate on the basis
of sex, religion, caste or creed.

 We do not employ any child labour (below 18 years) and make every effort to comply
with the established human rights standards.

 The company is driven ethical values.

OUR MANPOWER

Own Textile mill (Sister Concern): Assure fabric quality and timely deliveries.· Own
Laboratory: Complete yarn, fabric & Garment Testing facilities.· Own Factory:
Manufacturing all types of Garments and having Hi-Tech computerized sewing machines.
The complete operation from fabric, pattern making, sampling, cutting, stitching, Ironing and
packing right up to dispatch are all in-house. We unveil our scintillating range of products
that are designed to suit the diverse tastes of our clients. Our gamut of products includes.
OUR EXCELLENCE
Our objective is to manufacture high quality, specialized products to cater to the needs
of customers. Our main focus is on offering outstanding products to our customers and
sticking to timely delivery schedule. Quality raw material, latest equipment and quality
control measures culminate into quality products. Our team of experts maintains a strict vigil
on the manufacturing process to ensure the quality of the ensembles.
OUR CLIENTELE

Owing to our impeccable quality, sound infrastructure and proactive service, we boast
a good reputation among our clients. We have a wide client base all across the globe.

HEAD OFFICE ADDRESS

No. 82, SIDCO Women Industrial Park,

Salem,
Tamil Nadu - 636011,
India
 CHAPTER – III

REVIEW OF LITERATURE

H. Hall (1994)1 The results are given of an investigation into the perception and use of
information as a strategic resource for effective business performance and competitive
advantage in the Scottish high performance textile industry. Case studies reveal that there are
predominant patterns of information usage within the industry. There is a low level of
appreciation of information as a strategic resource. The results confirm that there is a strong
relationship between information activity and innovative practices. Current information needs
of the industry in question are highlighted and recommendations are made on how these
might be met.

Torben J. Andersen (2001)2 Clarifying the relationships between information technology

(IT), organizational performance, and decision structure remains an important area of inquiry
in IS research. Through an empirical analysis and complementary case examples, our study
examines these associations among firms operating in the US-based apparel and textile
industry from 1992 to 1997. Based on data gathered from 50 public firms located across the
USA, the study finds that IT used to enhance internal communication supports a
decentralized decision structure, which in turn is associated with higher financial
performance. Hence, IT exhibits an indirect performance effect. However, use of IT to
enhance communication is also found to have a direct performance effect in large
organizations. This paper proposes that use of communication enhancing IT can support
organizational learning processes by facilitating flexible exchange of skills and knowledge
across functional areas. Case examples are used to illustrate how these learning effects can
materialize.

1
H. Hall (1994) - International Journal of Information Management, Volume 14, Issue 4, August 1994, Pages
281–294
2
Torben J. Andersen (2001) - Information & Management, Volume 39, Issue 2, December 2001, Pages 85–
100
Hui-Lin Lin ed all (2011)3 Is the spatial concentration of manufacturing activity able to
enhance firm-level productivity? This question is particularly relevant to production in China,
which has a huge territory and population, but a skewed distribution in terms of urban–rural
development. This paper aims to examine the dynamics of industrial agglomeration and the
impact of agglomeration on firm-level productivity in China's textile industry by using a
firm-level panel dataset from 2000 to 2005. First, the average value of the Ellison–Glaeser
(EG) index (city level) is found to be approximately 0.00019. Moreover, the calculated city
EG index of spatial concentration for each year exhibits a decreasing trend of spatial
agglomeration for garments and other fiber products, but an increasing trend for the textile
industries' agglomeration in China.

Ali Hasanbeigi (2012)4 The textile industry is a complicated manufacturing industry because
it is a fragmented and heterogeneous sector dominated by small and medium enterprises
(SMEs). There are various energy-efficiency opportunities that exist in every textile plant.
However, even cost-effective options often are not implemented in textile plants mostly
because of limited information on how to implement energy-efficiency measures. Know-how
on energy-efficiency technologies and practices should, therefore, be prepared and
disseminated to textile plants. This paper provides information on the energy use and energy-
efficiency technologies and measures applicable to the textile industry.

George E. Halkos (2012)5 In data envelopment analysis (DEA) context financial data/ratios
have been used in order to produce a unified measure of performance metric. However,
several scholars have indicated that the inclusion of financial ratios create biased efficiency
estimates with implications on firms’ and industries’ performance evaluation. By applying
bootstrap techniques the paper provides an application of evaluating the performance of 23
Greek manufacturing sectors with the use of financial data. The results reveal that in the first
stage of our sensitivity analysis the efficiencies obtained are biased. However, after applying
the bootstrap techniques the sensitivity analysis reveals that the efficiency scores have been
significantly improved.

3
Hui-Lin Lin ed all (2011) - Agglomeration and productivity: Firm-level evidence from China's textile
industry, Volume 22, Issue 3, September 2011, Pages 313–329
4
Ali Hasanbeigi (2012) - Renewable and Sustainable Energy Reviews, Volume 16, Issue 6, August 2012,
Pages 3648–3665
5
Nese Yalcin ed all (2012) - Expert Systems with Applications, Volume 39, Issue 5, April 2012, Pages 5872–
5880
Nese Yalcin ed all (2012)6 For textile industries, financial performance evaluation is very
important in a highly competitive environment. Therefore, an accurate and appropriate
performance evaluation is critical. As financial performance indicators reflect the
competitiveness of a company, they must be carefully identified in the evaluation process.
Generally, traditional accounting-based financial performance (AFP) measures are used for
performance evaluation. However, these measures are not sufficient for performance
evaluation solely in the modern industry time. So, value-based financial performance (VFP)
measures have recently been introduced to express the company value. In this paper, we
propose a new financial performance evaluation approach to rank the companies of each
sector in the Turkish manufacturing industry.

Chris K.Y. Lo ed all (2012)7 With rising environmental concerns from consumers and
stakeholder groups, environmental management has become an important responsibility for
today's fashion and textiles manufacturers. The production of fashion and textiles related
products often requires high levels of energy and water consumption, and emits large
quantities of pollutants to the environment. Therefore, the adoption of environmental
management systems (EMSs) is important and could have a significant impact on these firms'
operational performance. This study presents empirical evidence on the performance impact
of EMS adoption in the fashion and textiles related industries (FTIs). Although EMSs have
emerged as a passport to business in the FTIs, their actual impacts on firms' financial
performance have not been explored.

Shahid-ul-Islam ed all (2013)8 With the consumer's enhanced awareness of eco-safety, there
has been an increasing tendency towards the use of sustainable and environmentally friendly
materials. In recent years, considerable attention has been given to the products produced
from non-food crops for use in various industries notably in the textile industry. Based on
biocompatibility, biodegradability, non-toxicity, in addition to their recently discovered
properties such as insect repellent, deodorizing, flame retardant, UV protection, and
antimicrobial activity are gaining popularity all around the world for producing more
appealing and highly functional value-added textiles.

6
Nese Yalcin ed all (2012) - Expert Systems with Applications, Volume 39, Issue 1, January 2012, Pages 350–
364
7
Chris K.Y. Lo ed all (2012) - International Journal of Production Economics, Volume 135, Issue 2, February
2012, Pages 561–567
8
Shahid-ul-Islam ed all (2013) - Journal of Cleaner Production, Volume 57, 15 October 2013, Pages 2–18
Dursun Delen ed all (2013)9 Determining the firm performance using a set of financial
measures/ratios has been an interesting and challenging problem for many researchers and
practitioners. Identification of factors (i.e., financial measures/ratios) that can accurately
predict the firm performance is of great interest to any decision maker. In this study, we
employed a two-step analysis methodology: first, using exploratory factor analysis (EFA) we
identified (and validated) underlying dimensions of the financial ratios, followed by using
predictive modeling methods to discover the potential relationships between the firm
performance and financial ratios.

Ali Diabat ed all (2014)10 Industries currently face pressure on environmental initiatives
from both government regulations and global competition in addition to customer pressure.
Hence, organizations are forced to implement sustainable practices to improve their
environmental financial performance over economic performance. The Sustainable Supply
Chain Management (SSCM) system is a concept which ensures environmentally friendly
practices in traditional supply chains. Industries in developing countries such as India face
pressure from various perspectives to adopt SSCM in Traditional SCM. In this regard, the
objective of this study has been fixed to analyze the enablers for implementing SSCM into
Indian industries. This study is essential for Indian industries, and especially for textile
industries, to market products in the World Trade Organization and huge market
opportunities.

Natalia Moreira ed all (2014)11 Textiles can be applied in a wide variety of aircrafts'
components and it is known for its highly polluting dyes, short life-cycle and small concern
with end of life. Combined with the aeronautic emissions, the textile industry represents a
clear threat to the environment, but it also represents opportunities. In order to promote
sustainability in the completion industry, the product development process is of central
importance. A large number of general approaches and methods for the development of
sustainable products has been proposed and used in the literature, but how they can be
integrated to improve the design process in the Green Aircraft Completion (GAC) sector is an
open research question.

9
Dursun Delen ed all (2013) - Expert Systems with Applications, Volume 40, Issue 10, August 2013, Pages
3970–3983
10
Ali Diabat ed all (2014) - Journal of Cleaner Production, Volume 83, 15 November 2014, Pages 391–403
11
Natalia Moreira ed all (2014) - Journal of Cleaner Production, Available online 15 November 2014
Patrica Crifo ed all (2014)12 This paper analyzes how different combinations of Corporate
Social Responsibility (CSR) dimensions affect corporate economic performance. We use
various dimensions of CSR to examine whether firms rely on different combinations of CSR,
in terms of quality versus quantity of CSR practices. Our empirical analysis based on an
original database including 10,293 French firms shows that different CSR dimensions in
isolation impact positively firms’ profits but their effect in term on intensity varies among
CSR dimensions. Moreover, the findings on the qualitative CSR measure, based on
interaction between its dimensions, show that the substitutability of these dimensions is
highly significant for firm performance. However, in terms of the intensity, those interactions
produce differential effects.

G.Y. Qi ed all (2014)13 The debate on the relationship between corporate or industrial
environmental performance (EP) and financial performance (FP) has yet to be resolved, and
studies need to examine the possible moderating effects on the EP-FP link. We argue that
industrial EP has a positive effect on FP and that industrial munificence and resource slack
can moderate the EP-FP link. Using a dataset from Chinese industrial firms, we examine the
direct effect of industrial EP on FP and the indirect effects of industrial munificence and
resource slack on the EP-FP link. Our results show that improving corporate or industrial-
level EP significantly influences FP and that slack resources play a significant role on the EP-
FP link. However, we found no significant moderating effect of industrial munificence on the
link.

John Z. Ni ed all (2014)14 The increase in the number of high-profile product recalls in
recent years highlights the issue of ensuring product safety in global supply chains. Although
the financial effect of a product recall announcement has been previously investigated from
the perspective of manufacturers, it has not been investigated for retailers. Because retailers
are the interface between consumers and the upstream supply chain, they play an important
role as the first link in the reverse supply chain. Building upon attribution theory, signaling
theory and prospect theory, we develop hypotheses about the way that investors view various
attributes of a retailer‫׳‬s recall announcement and test them using event study methodology

12
Patrica Crifo ed all (2014) - International Journal of Production Economics, Available online 19 December
2014
13
G.Y. Qi ed all (2014) - Revisiting the relationship between environmental and financial performance,
Volume 145, 1 December 2014, Pages 349–356
14
John Z. Ni ed all (2014) - International Journal of Production Economics, Volume 153, July 2014, Pages
309–322
and hierarchical regression analysis of objective, archival data. The results support the
hypotheses that a product recall announcement has a financial impact on retailers that is more
negative for a private label product, a refund remediation strategy and for causes that are
potentially more hazardous.

A. Lui (2014)15 The value of radio frequency identification (RFID) technology is critical for
the clothing and textiles supply chain, because the fashion business is characterized by a wide
assortment of seasonal items with short life-cycles, high levels of impulse-purchasing and
complicated distribution and logistics operations. This study aims to test whether the
adoption of the RFID system can improve supply chain performance (measured as inventory
days, accounts receivable days and operating cycle). Based on the 31 clothing and textiles
companies that publicly announced their RFID adoption, 18 of them were matched with
comparable control firms for the testing of abnormal supply chain performance. The results
show that clothing and textiles RFID adopters’ inventory days drop by about 12.89 days over
the 5-year period, while other RFID adopters (other manufacturing sectors) only drop by
about 2.47 days.

15
A. Lui (2014) - Fashion Supply Chain Management Using Radio Frequency Identification
(Rfid)Technologies, 2014, Pages 187–202
 CHAPTER – IV
DATA ANALYSIS AND INTERPRETATION

ANALYSIS OF DATA

The analysis of data requires a number of closely related operations such as

establishment of categories, the application of these categories to raw data through coding,
tabulation and then drawing inferences. The unwieldy data should necessarily condense into a
manageable groups and tables for further analysis.

Thus, researcher should classify the raw data into some purposeful and usable
categories. Analysis work after tabulation is generally based on the computation of various
percentages, coefficients, etc., by applying various well defined statistical formulae.

INTERPRETATION OF DATA

The real value of research lies in its ability to arrive at certain generalizations. If the
researcher had no hypothesis to start with, he might seek to explain his findings on the basis
of some theory. It is known as interpretation. The process of interpretation may quite often
trigger off new questions which in turn may lead further researches.
4.1 CURRENT RATIO:

Current ratio is the most common ratio for measuring liquidity. The current ratio is
the ratio of total current assets to total current liabilities. Current ratio of affirm measures its
term solvency i.e. ability to meet short term obligations. Current assets mean assets that will
either be used up or converted into cash within a year’s time or during the normal operating
cycle of the business, whichever is longer.

Current assets
Current assets = ------------------------------
Current liabilities
 TABLE NO 4.1

CURRENT RATIO

Year Current Assets Current Liabilities Ratio

2012-13 265.25 179.43 1.48

2013-14 378.37 267.33 1.42

2014-15 352.76 259.67 1.36

2015-16 363.61 271.83 1.34

2016-17 380.85 291.20 1.31

Source: secondary data

INTERPRETATION

The current ratio is a measure of firm’s short term solvency. It indicates the
availability of current assets in rupees for every one rupee of current liability. As conversion
role, during the year 2012-13 the current ratio was 1.48 which are decreased to 1.42 the next
year. The next year 2014-15 is decreased to 1.36. The last year it decreased 1.31 in 2016-17.

The current ratio is decreasing trend during the study period.

 CHART NO 4.1

CURRENT RATIO

1.5

1.45

1.4
RATIO

1.35 1.48
1.42
1.3
1.36 1.34
1.31
1.25

1.2
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.2 FIXED ASSET RATIO

The ratio establishes the relationship between fixed assets and long-term funds. The
objective of calculating this ratio is to ascertain the proportion of long-term funds invested in
fixed assets. The ratio is calculated as given below:

Formula

Fixed assets

Fixed assets ratio = ----------------------------

Long – term funds

The ratio should not generally be more than ‘1’. If the ratio is less than one it indicates
that a portion of working capital has been financed by long – term funds. It is desirable in that
part of working capital is core working capital and it is more or less a fixed item.

An ideal fixed assets ratio is 0.67

 TABLE NO 4.2

FIXED ASSETS RATIO

Year Fixed Assets Long Term Funds Ratio

2012-13 164.65 106.42 1.55

2013-14 350.45 124.63 2.81

2014-15 335.84 137.86 2.44

2015-16 381.55 157.88 2.42

2016-17 379.56 183.30 2.07

Source: secondary data

INTERPRETATION

Table - 4.2 shows the fixed assets ratio during the period 2012-13 to 2016-17. The
table indicates that the company has 1.55 in the year of 2012-13 Then next year increased to
2.81 in 2013-14. The last year decrease 2.07 of in the year of 2016-17. The Fixed asset ratio
is fluctuated year by year.
 CHART NO 4.2

FIXED ASSETS RATIO

2.5

2
RATIO

1.5 2.81
2.44 2.42
2.07
1
1.55
0.5

0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.3 LIQUIDITY RATIO

The term „liquidity‟ refers to the ability of a firm to pay its short-term obligation and
when they become due. The term quick assets or liquid assets refers current assets which can
be converted into cash immediately and it comprises all current assets except stock and
prepaid expenses it is determined by dividing quick assets by quick liabilities.

Liquid assets

Liquidity ratio =

Current liabilities
 TABLE – 4.3

LIQUIDITY RATIO

Year Liquid assets Current Liabilities Ratio

2012-13 149.29 179.43 0.83

2013-14 185.56 267.33 0.69

2014-15 159.11 259.67 0.61

2015-16 155.44 271.83 0.57

2016-17 161.00 291.20 0.55

Source: secondary data

INTERPRETATION

The above table shows that the liquidity ratio during the study period is 0.83 in the
year of 2012-13 and further Decreased to 0.55 in 2016-17 and it has been fluctuating and is
below the normal ratio. Hence the firm is not controlling its stock position because there are
linear relationship between current ratio and liquidity ratio.
 CHART - 4.3

LIQUIDITY RATIO

0.9
0.8
0.7
0.6
RATIO

0.5
0.83
0.4 0.69
0.3 0.61 0.57 0.55
0.2
0.1
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.4 ABSOLUTE LIQUIDITY RATIO

Absolute liquidity ratio includes cash, bank, and marketable securities. This ratio
obtained by dividing cash, bank and marketable securities by current liabilities.

Cash + bank +marketable securities

Absolute liquidity ratio =
Current liabilities
 TABLE - 4.4

ABSOLUTE LIQUIDITY RATIO

Year Cash & bank Balance Current Liabilities Ratio

2012-13 9.79 179.43 0.05

2013-14 18.45 267.33 0.07

2014-15 16.45 259.67 0.06

2015-16 14.81 271.83 0.05

2016-17 16.09 291.20 0.05

Source: secondary data

INTERPRETATION

The above table shows the absolute ratio for the study period 2012-13 to 2016-17.
There is a fluctuation in the absolute liquidity ratio. It was 0.05 in the year 2012-13. Next it
move increased to 0.07 in the year 2014-15 and it moves decreased to final year 0.05.
 CHART - 4.4

ABSOLUTE LIQUIDITY RATIO

0.07

0.06

0.05

0.04
RATIO

0.07
0.03 0.06
0.05 0.05 0.05
0.02

0.01

0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.5 DEBT EQUITY RATIO
Expresses the relationship between the external equities and internal equities or the
relationship between borrowed funds and „owners‟ capital. It is a popular measure of the
long-term financial solvency of a firm. This relationship is shown by the debt equity ratio.
This ratio indicates the relative proportion of debt and equity in financing the assets of a firm.
This ratio is computed by dividing the total debt of the firm by its equity (i.e.) net worth.

Outsider’s funds
Debt equity ratio =
Proprietor’s funds
(OR)

Total Long Term Debt

Debt equity ratio = ------------------------------------
Shareholders Funds
The term external equities refer to total outsiders liabilities.
Internal equities refer to shareholders funds or the tangible net worth. Here a
shareholder refers to only the equity shareholders.

Total Long –Term Debt = debentures, secured loans,

Shareholders Funds = share capital + reserves + P/L

 TABLE - 4.5

DEBT EQUITY RATIO

Year Total Long –Term Debt Shareholders’ Funds Ratio

2012-13 340.12 106.42 3.19

2013-14 382.81 124.63 3.07

2014-15 348.95 137.86 2.53

2015-16 318.89 157.88 2.02

2016-17 290.69 183.30 1.58

Source: secondary data

INTERPRETATION

The above table shows that the debt equity relationship of the company during the
study period. It was 3.19 in the year 2012-13 and then reached up to 3.07 again in the next
year 2014-15 onwards it ultimately come down to 2.53. It was decreased from the year 2016-
17 is 1.58. Hence the company is not maintaining its debt position. The debt equity ratio was
decreasing trend.
 CHART - 4.5

DEBT EQUITY RATIO

3.5

2.5

2
RATIO

1.5 3.19 3.07

2.53
1 2.02
1.58
0.5

0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
S
4.6 PROPRIETARY RATIO

Proprietary ratio relates to the proprietors funds to total assets. It reveals the owners
contribution to the total value of assets. This ratio shows the long-time solvency of the
business. It is calculated by dividing proprietor’s funds by the total tangible assets.

Shareholders’ fund

Proprietary ratio=

Total tangible Assets

Shareholders fund = Share capital + Reserves and Surplus

Total tangible Assets = fixed assets + Current assets + Investment

 TABLE - 4.6

PROPRIETARY RATIO

Year Shareholders’ fund Total tangible Assets Ratio

2012-13 106.42 471.44 0.22

2013-14 124.63 728.85 0.17

2014-15 137.86 688.63 0.20

2015-16 157.88 745.19 0.21

2016-17 183.30 760.44 0.24

Source: secondary data

INTERPRETATION

The above table and diagram shows that the proprietary ratio during the study period. In
the year of 2012-13 is 0.22 and in the last year of 2016-17 is increased to 0.24. In all the
years the owner's contribution to the total assets was appropriate and they maintain their
share in the company's assets.
 CHART - 4.6

PROPRIETARY RATIO

0.25

0.2

0.15
RATIO

0.24
0.22 0.21
0.1 0.2
0.17

0.05

0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.7 DEBTORS TURNOVER RATIO

Ratio of net credit sales to average trade debtors is called as debtor’s ratio. It is also
known as receivables turnover ratio. This ratio is expressed in times.Accounts receivables are
the term which includes trade debtors and bills receivables. It is a component of current assets
and as such has direct influence on working capital position (liquidity) of business. Perhaps,
no business can afford to make cash sales only thus extending credit to the customers is a
necessary evil. But care must be taken to collect book debts quickly and within the period of
credit allowed. Otherwise chances of debts becoming bad and unrealizable will increase.

Total Sales
Debtors ‘turnover ratio =
Account receivable
 TABLE - 4.7

DEBTORS ‘TURNOVER RATIO

Year Total Sales Account receivable Ratio

2012-13 351.80 40.13 8.77

2013-14 498.83 58.39 8.54

2014-15 649.47 71.73 9.05

2015-16 658.24 78.70 8.36

2016-17 707.82 96.18 7.35

Source: secondary data

INTERPRETATION

From the above table it is inferred that the debtor’s turnover ratio shows a fluctuation,
it was higher Ratio 9.05 in the year 2013-14 and shows an decreased 7.35 in the year of
2016-17. It shows that the company has not better collection of debt. The debtors turnover
ratio is decreasing and fluctuating trend.
 CHART - 4.7

DEBTORS‘TURNOVER RATIO

10
9
8
7
6
RATIO

5 8.77 9.05
8.54 8.36
4 7.35
3
2
1
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.8 INVENTORY TURNOVER RATIO

This ratio is also called stock velocity ratio. It is calculated to ascertain the efficiency
of inventory management in terms of capital investment. It shows the relationship between
the cost of goods sold and the amount of average inventory. Stock turnover ratio is obtained
by dividing the cost of sales by average stock. The rationale behind establishing the
relationship between cost of sales and average stock is that stock is at the cost price. This
ratio is helpful in evaluating and review of inventory policy.

Net sales
Inventory turnover ratio =
Average Inventory or stock
 TABLE - 4.8

INVENTORY TURNOVER RATIO

Year Net Sales Average Inventory Ratio

2012-13 351.80 139.42 2.52

2013-14 498.83 154.38 3.23

2014-15 649.47 193.23 3.36

2015-16 658.23 200.91 3.28

2016-17 707.77 214.01 3.31

Source: secondary data

INTERPRETATION

The ratio is observed that it shows the good position as far as Inventory turnover ratio
is concerned. In the year of 2012-13 ratio was 2.52 and then next year 3.23. the last year
inventory turnover ratio was 3.31. The company Inventory turnover ratio was increasing
trend.
 CHART - 4.8

INVENTORY TURNOVER RATIO

3.5

2.5

2
RATIO

3.23 3.36 3.28 3.31

1.5
2.52
1

0.5

0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.9 WORKING CAPITAL TURNOVER RATIO

Working capital of a concern is directly related to sales (i.e.) the current assets like
debtors, bills receivables, cash, stock etc., and change with the increase or decrease in sales.
This ratio indicates the number of times the working capital is turned over in course of a year.
A higher ratio indicates efficient utilization of working capital and a low indicates vice versa.

Sales / Cost of sales

Working capital turnover ratio =
Working capital
Net working capital = current assets – current liabilities
 TABLE - 4.9

WORKING CAPITAL TURNOVER RATIO

Year Sales Working capital Ratio

2012-13 351.80 85.82 4.10

2013-14 498.83 111.04 4.49

2014-15 649.47 93.09 6.98

2015-16 658.23 91.78 7.17

2016-17 707.77 89.65 7.89

Source: secondary data

INTERPRETATION

Working capital turnover ratio establishes relationship between cost of sales and net
working capital. The above table depicts the working capital turnover ratio from the year of
2012-13 was 4.10 and the last year has increased 7.89 from 2016-17. This shows constant
increase in the working capital of the company.
 CHART - 4.9

WORKING CAPITAL TURNOVER RATIO

8
7
6
5
RATIO

4 7.89
6.98 7.17
3
4.1 4.49
2
1
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.10 CASH TO WORKING CAPITAL RATIO

The cash to working capital ratio measure how well a company can meet its short-
term liabilities using its liquid assets such as cash and cash equivalents and marketable
securities. The ratio will also help uncover situations where the companymay be too heavily
spending its cash on inventory that is not being turned into sales as rapidly as it should be.

Cash
Cash to working capital ratio =
Working capital
 TABLE - 4.10

CASH TO WORKING CAPITAL RATIO

Year Cash Working capital Ratio

2012-13 9.79 85.82 0.11

2013-14 18.45 111.04 0.17

2014-15 16.45 93.09 0.18

2015-16 14.81 91.78 0.16

2016-17 16.09 89.65 0.18

Source: secondary data

INTERPRETATION

From the above table, the ratio is gradually from year 2012-13 to 2016-17
performance in working capital. In the year of 2012-13 is 0.11. In the year of 2013-14 are
increased to 0.17. In the year of 2014-15 and 2016-17 was 0.08. Increasing cash to working
capital ratio can indicate the company may be from Better cash reserves, and may not be able
to meet its financial obligations.
 CHART - 4.10

CASH TO WORKING CAPITAL RATIO

0.18
0.16
0.14
0.12
RATIO

0.1 0.18 0.18

0.17 0.16
0.08
0.06 0.11
0.04
0.02
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.11 RETURN ON SHAREHOLDER FUNDS

This ratio determines the profitability from the shareholder’s point of view.

Net profit after interest and tax

Return on shareholders’ funds = X 100

Shareholders fund

The net profit here is net income after payment of interest and tax and it includes net
non operating income also. ( i.e., non – operating income minus non- operating expenses).
 TABLE - 4.11

RETURN ON SHAREHOLDER FUNDS

Net profit after

Shareholders fund
Year interest and tax Ratio
Rs.
Rs.

2012-13 15.11 106.42 14.20

2013-14 18.20 124.63 14.60

2014-15 12.92 137.86 9.37

2015-16 20.49 157.88 12.98

2016-17 25.56 183.30 13.94

Sources: Secondary Data

INTERPRETATION

From the above table shows the return on shareholder funds ratio for the year 2012-13
is 14.20 and the next year of 2013-14 is Increased to 14.60. The final year of 2016-17 is
Decreased to 13.94. The return on shareholder funds ratio is very low performance for the
company. This is fluctuated for year by year.
 CHART - 4.11

RETURN ON SHAREHOLDER FUNDS

16
14
12
10
RATIO

8 14.2 14.6 13.94

12.98
6
9.37
4
2
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.12 OPERATING RATIO
This ratio indicates the relationship between total operating expenses and sales.
Formula
Cost of goods sales + Operating expenses
Operating profit ratio = X 100
Net Sales
Total operating expenses here include cost of goods sold administrative expenses and
selling and distribution expenses. Generally finance expenses like interest are not included
under operating expenses.
Net sales mean total sales minus sales returns.
Operating expenses include administration, selling and distribution expenses. Finance
expenses are generally excluded.
 TABLE 4.12

OPERATING RATIO

Cost of sales +
Year Net sales Ratio
Operating expenses

2012-13 351.80 351.80 1.00

2013-14 498.83 498.83 1.00

2014-15 649.47 649.47 1.00

2015-16 658.24 658.23 1.00

2016-17 707.82 707.77 1.00

Source: secondary data

INTERPRETATION

The above table shows that the operating ratio. From the year for 2012-13 were 1.00
and up to final year were 1.00. Hence the firm operating ratio was maintain same level.
 CHART 4.12

OPERATING RATIO

1
0.9
0.8
0.7
0.6
RATIO

0.5 1 1 1 1 1
0.4
0.3
0.2
0.1
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.13 CURRENT ASSET TO TOTAL ASSET

This ratio represents the structure of assets and the amount in form of current assets
per each pound invested in assets. Current assets are important to business because they are
the assets that are used to found day-to-day operations and pay on-going expenses and
include cash, accounts receivable, inventory, marketable securities, prepaid expenses and
other liquid assets that can be readily converted to cash.

Current assets
Current Asset to Total Asset =
Total assets
 TABLE 4.13

CURRENT ASSET TO TOTAL ASSET

Year Current assets Total assets Ratio

2012-13 265.25 446.55 0.59

2013-14 378.37 507.44 0.74

2014-15 352.76 486.81 0.72

2015-16 363.61 473.36 0.77

2016-17 380.85 469.24 0.81

Source: secondary data

INTERPRETATION

The above table shows the relationship between current assets to total assets. In the
year of 2012 to 13 was 0.59 and then next year increase to 0.74. The final year of 2016-17
ratio was Increased to 0.81. The current asset to fixed assets ratio was Increasing Trend.
 CHART 4.13

CURRENT ASSET TO TOTAL ASSET

0.9
0.8
0.7
0.6
RATIO

0.5
0.4 0.77 0.81
0.74 0.72
0.3 0.59
0.2
0.1
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
4.14 LOANS ADVANCES TO CURRENT ASSETS RATIO

This ratio defines the relationship between loans and advances to current assets ratio.
It also determines the loans and advances that had been taken by the company.

Loans advances
Loans advances to current assets =
Current assets
 TABLE 4.14

LOANS ADVANCES TO CURRENT ASSETS RATIO

Year Loans advances Current assets Ratio

2012-13 99.37 265.25 0.37

2013-14 108.72 378.37 0.29

2014-15 70.93 352.76 0.20

2015-16 61.93 363.61 0.17

2016-17 48.73 380.85 0.13

Source: secondary data

INTERPRETATION

The above table shows the relationship between loans and advances to current assets
ratio and ratio is 2012-13 to 0.37 and in the year of 2015-16 to 0.17. The final year of 2016-
17 is decreases gradually to the end of the year.
 CHART 4.14

LOANS ADVANCES TO CURRENT ASSETS RATIO

0.4
0.35
0.3
0.25
RATIO

0.2 0.37
0.15 0.29
0.1 0.2
0.17
0.13
0.05
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
 CHAPTER – V

FINDINGS, SUGGESTION AND CONCLUSION

FINDINGS

 The current ratio is decreasing trend during the study period.

 The Fixed asset ratio is fluctuated year by year.
 Hence the firm is not controlling its stock position because there are linear relationship
between current ratio and liquidity ratio.
 There is a fluctuation in the absolute liquidity ratio. It was 0.05 in the year 2012-13. Next it
move increased to 0.07 in the year 2014-15 and it moves decreased to final year 0.05.
 It was 3.19 in the year 2012-13 and then reached up to 3.07 again in the next year
2014-15 onwards it ultimately come down to 2.53. It was decreased from the year
2016-17 is 1.58. Hence the company is not maintaining its debt position. The debt
equity ratio was decreasing trend.
 In all the years the owner's contribution to the total assets was appropriate and they
maintain their share in the company's assets.
 The debtor’s turnover ratio shows a fluctuation, it was higher Ratio 9.05 in the year
2013-14 and shows an decreased 7.35 in the year of 2016-17. It shows that the
company has not better collection of debt. The debtors turnover ratio is decreasing and
fluctuating trend.
 In the year of 2012-13 ratio was 2.52 and then next year 3.23. the last year inventory
turnover ratio was 3.31. The company Inventory turnover ratio was increasing trend.
 Working capital turnover ratio from the year of 2012-13 was 4.10 and the last year has
increased 7.89 from 2016-17. This shows constant increase in the working capital of
the company.
 Increasing cash to working capital ratio can indicate the company may be from Better
cash reserves, and may not be able to meet its financial obligations.
 The return on shareholder funds ratio is very low performance for the company. This is
fluctuated for year by year.
 From the year for 2012-13 were 1.00 and up to final year were 1.00. Hence the firm
operating ratio was maintain same level.
 In the year of 2012 to 13 was 0.59 and then next year increase to 0.74. The final year
of 2016-17 ratio was Increased to 0.81. The current asset to fixed assets ratio was
Increasing Trend.
 Loans and advances to current assets ratio and ratio is 2012-13 to 0.37 and in the year
of 2015-16 to 0.17. The final year of 2016-17 is decreases gradually to the end of the
year.
SUGGESTIONS
1. The company should concentrate more on the working capital.
2. The company maintains it debit in order to have profit maximizations.
3. It’s important for the company to stability in growth of sales by adapting the
completive promotional programs so that it will result in increase of profit as well as
volume of stock.
4. It is very much essential for the firm to manage the movement of fund from the fund
mobilized from term sources should necessarily be used for the purpose of purchasing
a fixed asset or redemption of loan suppose the firm uses its fund mobilized from long
term sources for other purpose it will question that the expansion of business and the
real earning of the business.
5. Generally the firm has used fund arise from operating activities. It shows that
financial the firm is expanding so the firm should maintain the present position until it
reaches as the available opportunities.
CONCLUSION
The study conducted on ratio analysis at “BP INTERNATIONAL GARMENTS”
gives a view of analysis evaluation of liquidity position of the company. Based on the tools
used analysis and interpretation have been made giving way for useful and constructive
suggestions. Thus the ratio analysis of the company is satisfactory. The company should
enhance its performance for meeting challenges and exploiting opportunities in future. The
project will guide to the management to interpret its weakness and problems this will
certainly help the management to taking financial decision. However more efforts need to be
taken to improve the financial position for the growth of the company.
 PROFIT AND LOSS ACCOUNT OF BP INTERNATIONAL GARMENTS AS ON
MARCH 2013-2017

PARTICULAR 2013 2014 2015 2016 2017

Income
Sales turnover 351.80 498.83 649.47 658.24 707.82
Excise duty 0.00 0.00 0.00 0.01 0.05
Net sales 351.80 498.83 649.47 658.23 707.77
Other income 4.01 7.54 2.47 1.76 7.19
Stock adjustments -4.35 26.14 11.59 9.84 11.29
Total income 351.46 532.51 663.53 669.83 726.25
Expenditure
Raw materials 205.28 323.25 431.03 426.59 464.71
Power & Fuel cost 32.76 43.70 53.97 52.01 52.36
Employee cost 22.29 31.97 41.42 48.28 51.91
Selling and Admin Expenses 0.00 0.00 0.00 0.02 0.19
Miscellaneous expenses 24.61 38.71 36.94 39.11 44.85
Total expenses 284.94 437.63 563.36 566.01 614.02

Operating profit 62.51 87.34 97.70 102.06 105.04

PBDIT 66.52 94.88 100.17 103.82 112.23
Interest 37.36 43.88 61.40 61.45 52.80
PBDT 29.16 51.00 38.77 42.37 59.43
Depreciation 11.73 16.24 17.72 19.79 21.25
Profit before tax 17.43 34.76 21.05 22.58 38.18
PBT (Post extra-ord Items) 17.43 34.76 21.05 22.58 38.18
Tax 2.31 16.47 8.13 2.09 12.62
Reported Net profit 15.11 18.29 12.92 20.49 25.56
Total Value Addition 79.66 114.37 132.34 139.42 149.30
Per share data (annualised)
Shares in issue (lakhs) 198.20 198.20 198.20 198.20 198.20
Earning Per Share (Rs) 7.63 9.23 6.52 10.34 12.90
Book Value (Rs) 53.69 62.88 69.56 79.66 92.48
 BALANCE SHEET OF BP INTERNATIONAL GARMENTS AS ON MARCH
2013-2017

PARTICULAR 2013 2014 2015 2016 2017

Sources of funds
Total share capital 19.82 19.82 19.82 19.82 19.82
Equity share capital 19.82 19.82 19.82 19.82 19.82
Reserves 86.60 104.81 118.04 138.06 163.48
Net worth 106.42 124.63 137.86 157.88 183.30
Secured loans 340.12 382.81 348.95 318.89 290.69
Total debt 340.12 382.81 348.95 318.89 290.69
Total liabilities 446.54 507.44 486.81 476.77 473.99
Application Of Funds
Gross block 269.68 471.56 475.53 536.83 551.91
Less: Accum. depreciation 105.03 121.11 139.69 155.28 172.35
Net block 164.65 350.45 335.84 381.55 379.56
Capital work in progress 154.54 45.92 57.85 0.00 0.00
Investments 41.54 0.03 0.03 0.03 0.03
Inventories 115.96 192.81 193.65 208.17 219.85
Sundry debtors 40.13 58.39 71.73 78.70 96.18
Cash and bank balance 9.79 18.45 16.45 14.81 16.09
Total current assets 165.88 269.65 281.83 301.68 332.12
Loans and advances 99.37 108.72 70.93 61.93 48.73
Total CA, Loans & advances 265.25 378.37 352.76 363.61 380.85
Current liabilities 173.48 259.69 255.50 267.28 285.66
Provisions 5.95 7.64 4.17 4.55 5.54
Total CL & provisions 179.43 267.33 259.67 271.83 291.20
Net current assets 85.82 111.04 93.09 91.78 89.65
Total Assets 446.55 507.44 486.81 473.36 469.24

Contingent liabilities 27.55 131.19 40.80 39.89 95.95

Book value (Rs) 53.69 62.88 69.56 79.66 92.48