TERM PAPER

TOPIC- ZEE TELEFILMS

LTD

SUBMITTED TO
SUBMITTED BY
SUKHWINDER KAUR
VINEETH NAIR
RO
LL NO - B36
SE
CTION - RT1001
RE
G NO- 11002057
The company was incorporated on 25th November and it
obtained the certificate of commencement of business on
5th January 1983 as empire. it was promoted by the Essel
group of companies comprising Sanjay badgamia, Vansant
Parekh and Ashok Kothari.

It entered into the business of entertainment software

subsequently the name was changed to zee telefilms ltd.
The company co- promoted Essel packaging ltd. The
partnership company of the essel group in 1982. Channels
operated by zee telefilms are-zee studio, zee cinema, zee
news, zee music, zee café, zee movies, zee English, zee
smile etc.
 PRODUCT PROFILE
The company produces hindi films,serials, game shows,
children programmes etc. the company would also
commission serials, game shows etc, through directors on
contract basis, purchase rights of Hindi films, serials and
other programmes from the producers for a
predetermined period. They deal in television
broadcasting.

COMPETITORS
Star TV & Sony TV are the competitors of zee televisions.

SHARE PRICE
Zee stock- INR 293.70
 BRANCHES
Headquarter of Zee televisions are located in Mumbai.

Its branches are in Canada, Hongkong, India, Singapore,

South Africa, United Arab Emirates, United Kingdom and
United States of America.

LISTED ON
Bombay stock exchange and national stock exchange,
India

LATEST NEWS

1.Zee TV present- dill se diya vachan.

2. Corrigendum communication issued to stock
exchanges on annual report.

3. Zee Aflum becomes the No 1 movie channel during

Ramadan.

4. ZEEL press release for audited results for the year

ended March 31st.

5. Zee entertainment investor newsletter.

COMPARITIVE
PROFIT & LOSS A/C
Profit & Loss account of Zee
Entertainment Enterprises
Mar '08 Mar '09 Mar '10 inc/dec % inc/dec %

2008- 2008- 2009- 2009-

12 months 12 months 12 months 2009 2009 2010 2010

Income
16.1469 5.66003
Sales Turnover 1,041.99 1,210.24 1,278.74 168.25 88 68.50 44
Excise Duty 0 0 0 0 #DIV/0! 0.00 #DIV/0!
16.1469 5.66003
Net Sales 1,041.99 1,210.24 1,278.74 168.25 88 68.50 44
-
24.8779 86.5425
Other Income 75.77 56.92 106.18 -18.85 2 49.26 16
69.4789 59.4314
Stock Adjustments 48.36 81.96 130.67 33.6 08 48.71 3
15.6930 12.3391
Total Income 1,166.12 1,349.12 1,515.59 183 68 166.47 54

Expenditure 0 #DIV/0! 0.00 #DIV/0!

-
40.0576 44.6502
Raw Materials 3.47 4.86 2.69 1.39 37 -2.17 06
Power & Fuel Cost 0 0 0 0 #DIV/0! 0.00 #DIV/0!
-
48.8244 11.8589
Employee Cost 62.1 92.42 81.46 30.32 77 -10.96 05
-
43.1865 4.85642
Other Manufacturing Expenses 406.4 581.91 553.65 175.51 16 -28.26 11
22.5439
Selling and Admin Expenses 190.65 233.63 0 42.98 29 -233.63 -100
-
2.10810 1228.05
Miscellaneous Expenses 18.5 18.11 240.51 -0.39 81 222.40 08
Preoperative Exp Capitalised 0 0 0 0 0 0 0
-
0.36676 5.65241
Total Expenses 681.12 930.93 878.31 249.81 36 -52.62 21
-
11.7195 47.0091
Operating Profit 409.23 361.27 531.1 -47.96 71 169.83 62
-
13.7752 52.3900
PBDIT 485 418.19 637.28 -66.81 58 219.09 62
-
37.2069 36.2777
Interest 20.05 27.51 17.53 7.46 83 -9.98 17
-
15.9737 58.6336
PBDT 464.95 390.68 619.75 -74.27 61 229.07 64
-
12.4528 4.11073
Depreciation 10.6 11.92 11.43 1.32 3 -0.49 83

Other Written Off 0 0 0 0 #DIV/0! 0 #DIV/0!

-
16.6369 60.6083
Profit Before Tax 454.35 378.76 608.32 -75.59 54 229.56 01
-
50.6387
Extra-ordinary items 0 63.41 31.3 63.41 #DIV/0! -32.11 01
-
2.68075 44.6547
PBT (Post Extra-ord Items) 454.35 442.17 639.62 -12.18 27 197.45 71
- -
16.8194 38.9912
Tax 159.22 132.44 80.8 -26.78 95 -51.64 41
4.95391 80.4222
Reported Net Profit 295.12 309.74 558.84 14.62 71 249.1 9
-
36.6590 5.44883
Total Value Addition 677.65 926.07 875.61 248.42 42 -50.46 22

Preference Dividend 0 0 0 0 #DIV/0! 0 #DIV/0!

124.285
Equity Dividend 86.8 86.8 194.68 0 0 107.88 71
122.352
Corporate Dividend Tax 14.54 14.54 32.33 0 0 17.79 13
Per share data (annualised) 0 #DIV/0! 0 #DIV/0!
0.10148
Shares in issue (lakhs) 4,335.67 4,340.07 4,340.07 4.4 37 0 0
4.84581 80.3921
Earnings Per Share (Rs) 6.81 7.14 12.88 0.33 5 5.74 57

Equity Dividend (%) 200 200 400 0 0 200 100

9.98166 20.3370
Book Value (Rs) 49.09 53.99 64.97 4.9 63 10.98 99

ANALYSIS & INTERPRETATION

1.Total income of the firm has increased because of
increase in net sales and other income.

2.Stocks were also increased in 2009 and 2010.

3.total expenses have decreased in year 2010 as

compared to 2009.
4. profit before tax has increased has decreased in 2010
as compared to 2009.

COMPARITIVE BALANCE SHEET

------------------
Balance Sheet of - in Rs. Cr.
Zee Entertainment ------------------
Enterprises -
inc/de
Mar '08 Mar '09 Mar '10 inc/dec % c %
2008- 2008- 2009- 2009-
12 mths 12 mths 12 mths 2009 2009 2010 2010
Sources Of Funds
0.0922
Total Share Capital 43.36 43.4 43.4 0.04 51 0 0
Equity Share 0.0922
Capital 43.36 43.4 43.4 0.04 51 0 0
Share Application #DIV/0 #DIV/0
Money 0 0 5.5 0 ! 5.5 !
Preference Share #DIV/0 #DIV/0
Capital 0 0 0 0 ! 0 !
2,776.4 10.298 20.735
Reserves 2,084.89 2,299.60 3 214.71 39 476.83 35
Revaluation #DIV/0 #DIV/0
Reserves 0 0 0 0 ! 0 !
2,825.3 10.090
Networth 2,128.25 2,343.00 3 214.75 45 482.33 20.586
-
71.299 51.812
Secured Loans 70.87 121.4 58.5 50.53 56 -62.9 2
-
62.853 21.897
Unsecured Loans 133.39 49.55 60.4 -83.84 29 10.85 07
- -
16.307 30.447
Total Debt 204.26 170.95 118.9 -33.31 65 -52.05 5
2,944.2 7.7787 17.115
Total Liabilities 2,332.51 2,513.95 3 181.44 45 430.28 69
Mar '08 Mar '09 Mar '10
12 mths 12 mths 12 mths

Application Of Funds
17.028 14.144
Gross Block 162.2 189.82 216.67 27.62 36 26.85 98
Less: Accum. 40.08 49.89 58.29 9.81 24.476 8.4 16.837
Depreciation 05 04
14.584 13.185
Net Block 122.12 139.93 158.38 17.81 02 18.45 16
Capital Work in 188.66 506.11
Progress 6.35 18.33 111.1 11.98 14 92.77 02
1,531.9 0.0111 13.508
Investments 1,349.47 1,349.62 3 0.15 15 182.31 25
35.138 41.833
Inventories 236.41 319.48 453.13 83.07 11 133.65 6
-
13.863 31.761
Sundry Debtors 408.28 351.68 463.38 -56.6 04 111.7 83
Cash and Bank 397.20 171.92
Balance 22.21 110.43 300.29 88.22 85 189.86 79
Total Current 1,216.8 17.197 55.682
Assets 666.9 781.59 0 114.69 48 435.21 65
- -
Loans and 10.845 - 17.518
Advances 744.36 663.63 547.37 -80.73 56 116.26 8
Fixed Deposits 0.01 0.01 0 0 0 -0.01 -100
Total CA, Loans & 1,764.1 2.4063 22.068
Advances 1,411.27 1,445.23 7 33.96 43 318.94 46
#DIV/0 #DIV/0
Deffered Credit 0 0 0 0 ! 0 !
-
22.349 28.246
Current Liabilities 384.98 298.94 383.38 -86.04 21 84.44 47
-
18.353 69.704
Provisions 171.74 140.22 237.96 -31.52 32 97.74 75
-
Total CL & - 21.116 41.483
Provisions 556.72 439.16 621.34 117.56 54 182.18 74
1,142.8 17.730 13.593
Net Current Assets 854.55 1,006.07 3 151.52 97 136.76 49
Miscellaneous
Expenses 0.01 0.01 0 0 0 -0.01 -100
2,944.2 7.7796 17.115
Total Assets 2,332.50 2,513.96 4 181.46 36 430.28 63
-
Contingent 1,057.9 7.7216 62.975
Liabilities 703.48 649.16 7 -54.32 13 408.81 23
9.9816 20.337
Book Value (Rs) 49.09 53.99 64.97 4.9 66 10.98 1

ANALYSIS & INTERPRETATION

1.Total assets have increased in 2010 because of increase
in its cash balance and investments and inventories.

2.total current liabilities and provisions have increased

because of increase in current liabilities and loans and
advances.

Common size profit & loss A/C

Profit & Loss account of
Zee Entertainment
Enterprises

common common common

Mar '08 Mar '09 Mar '10 size% size% size%

12 mths 12 mths 12 mths 2008 2009 2010

Income
Sales Turnover 1,041.99 1,210.24 1,278.74 100 100 100
Excise Duty 0 0 0 0 0 0
Net Sales 1,041.99 1,210.24 1,278.74 100 100 100
7.2716628 4.7031993 8.30348624
Other Income 75.77 56.92 106.18 76 65 4
63.824732 143.99156 123.064607
Stock Adjustments 48.36 81.96 130.67 74 71 3
2411.3316 1646.0712 1159.86071
Total Income 1,166.12 1,349.12 1,515.59 79 54 8
Expenditure 0 0 0
Raw Materials 3.47 4.86 2.69 0 0 0
Power & Fuel Cost 0 0 0 0 0 0
Employee Cost 62.1 92.42 81.46 0 0 0
Other Manufacturing 654.42834 629.63644 679.658728
Expenses 406.4 581.91 553.65 14 23 2
46.911909 40.148820
Selling and Admin Expenses 190.65 233.63 0 45 26 0
9.7036454
Miscellaneous Expenses 18.5 18.11 240.51 24 7.751573 0
Preoperative Exp Capitalised 0 0 0 0 0 0
Total Expenses 681.12 930.93 878.31 0! 0 0

Mar '08 Mar '09 Mar '10

12 12 12
months months months
39.273889 29.851103 41.5330716
Operating Profit 409.23 361.27 531.1 38 91 2
640.09502 734.69782 600.188359
PBDIT 485 418.19 637.28 44 15 4
41.459884 33.565153
Interest 20.05 27.51 17.53 2 73 13.4154741
39.871539 28.958135 40.8916659
PBDT 464.95 390.68 619.75 81 67 5
Depreciation 10.6 11.92 11.43 0 0 0
Other Written Off 0 0 0 0 0 0
Profit Before Tax 454.35 378.76 608.32 0 0 0
68.610690 38.4237662
Extra-ordinary items 0 63.41 31.3 0 33 7
111.79872 75.985977 115.527860
PBT (Post Extra-ord Items) 454.35 442.17 639.62 05 21 6
83.514293 56.687925
Tax 159.22 132.44 80.8 21 35 0
1595.2432 1710.3257
Reported Net Profit 295.12 309.74 558.84 43 87 232.356243
Total Value Addition 677.65 926.07 875.61 0 0 0
Preference Dividend 0 0 0 0 0 0
Equity Dividend 86.8 86.8 194.68 0 0 0
Corporate Dividend Tax 14.54 14.54 32.33 0 0 0

Per share data (annualised) 0 0 0

Shares in issue (lakhs) 4,335.67 4,340.07 4,340.07 0 0
1.6641008 1.9763611 2.42515533
Earning Per Share (Rs) 6.81 7.14 12.88 72 7 8
41.237113 47.825151 62.7667587
Equity Dividend (%) 200 200 400 4 25 2
244.83790 196.25590 370.621791
Book Value (Rs) 49.09 53.99 64.97 52 69 2

ANALYSIS &INTERPRETATION
1. There is percentage change in total income of the firm
as compared to2008 and 2009 in 2010.

2. Total income of the firm has increased because of

increase in percentage of net sales and and other income.

3.Earning per share of the firm has also increased as

compared to 2008 and 2009 in 2010 which is 2.42 %.

COMMON SIZE BALANCE SHEET

Balance Sheet of Zee

Entertainment Enterprises

common common common

Mar '08 Mar '09 Mar '10 size % size% size%

12 12 12
months months months 2008 2009 2010
Sources Of Funds
1.85894165 1.72636687 1.47406962
Total Share Capital 43.36 43.4 43.4 5 3 1
 1.85894165 1.72636687 1.47406962
Equity Share Capital 43.36 43.4 43.4 5 3 1
Share Application Money 0 0 5.5 0 0 0
Preference Share Capital 0 0 0
2,776.4 89.3839683 91.4735774
Reserves 2,084.89 2,299.60 3 4 4 94.300717
Revaluation Reserves 0 0 0 0 0 0
2,825.3 95.9615926 93.1999443 95.9615926
Net worth 2,128.25 2,343.00 3 7 1 7
3.03835782 4.82905387 1.98693716
Secured Loans 70.87 121.4 58.5 1 9 2
5.71873218 2.05147016
Unsecured Loans 133.39 49.55 60.4 1 1.97100181 4
8.75709000 6.80005568 4.03840732
Total Debt 204.26 170.95 118.9 2 9 6
2,944.2
Total Liabilities 2,332.51 2,513.95 3 100 100 100

Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths

Application Of Funds
6.95391211 7.55063724 7.35911474
Gross Block 162.2 189.82 216.67 1 2 6
1.71832797 1.98451844 1.97979784
Less: Accum. Depreciation 40.08 49.89 58.29 4 9 3
5.56611879 5.37931690
Net Block 122.12 139.93 158.38 17.3594132 3 4
12.9354247 0.72912854 3.77346955
Capital Work in Progress 6.35 18.33 111.1 3 6 4
1,531.9 53.6850228 52.0314240
Investments 1,349.47 1,349.62 3 57.8550911 3 7
10.1354769 15.3903893
Inventories 236.41 319.48 453.13 6 12.7082372 7
58.0371865 54.1746256 43.7989735
Sundry Debtors 408.28 351.68 463.38 6 7 1
45.2434304 204.537877 462.197937
Cash and Bank Balance 22.21 110.43 300.29 3 4 5
1,216.8 28.5916398 31.0899934
Total Current Assets 666.9 781.59 0 7 8 41.3281526
31.9125401 26.3977947 18.5912153
Loans and Advances 744.36 663.63 547.37 9 1 9
0.00042872 0.00039777
Fixed Deposits 0.01 0.01 0 5 9 0

1,764.1 60.5046087 57.4881859 59.9193679

Total CA, Loans & Advances 1,411.27 1,445.23 7 9 7 9
Deferred Credit 0 0 0 0 0 0
16.5050375 11.8911995 13.0213569
Current Liabilities 384.98 298.94 383.38 1 4 5
24.4129186 5.57765437 8.08222155
Provisions 171.74 140.22 237.96 3 8 8
1134.08026 67.6505021 58.7294535
Total CL & Provisions 556.72 439.16 621.34 1 9 8
1,142.8 36.6366559 1863.43767 1759.01185
Net Current Assets 854.55 1,006.07 3 5 4 2
0.00042872 0.00039777
Miscellaneous Expenses 0.01 0.01 0 5 9 0
2,944.2
Total Assets 2,332.50 2,513.96 4 100 100 100
1,057.9 30.1597849 35.9336736
Contingent Liabilities 703.48 649.16 7 5 25.8223115 6
2.10459976 2.14761630 2.20668901
Book Value (Rs) 49.09 53.99 64.97 6 1 5
ANALYSIS & INTERPRETATION
1.Total assets of the firm has increased in respective
years to 100%,which is a good sign for the firm.

2.current liabilities of the firm has also increased because

of increase in loans and advances and current liabilities to
59.91%as compared to 57 % in 2009.

BALANCE
SHEET
TREND
ANALYSIS

Balance Sheet of Zee

Entertainment Enterprises

trend trend
Mar '08 Mar '09 Mar '10 % %

12 12 12 2009- 2010-
months months months 2008 2008
Sources Of Funds
100.0 100.09
Total Share Capital 43.36 43.4 43.4 92 2
100.0 100.09
Equity Share Capital 43.36 43.4 43.4 92 2
Share Application Money 0 0 5.5 0 0
Preference Share Capital 0 0 0 0 0
2,299.6 2,776.4 110.2 133.16
Reserves 2,084.89 0 3 98 9
Revaluation Reserves 0 0 0 0 0
2,343.0 2,825.3 110.0 132.75
Networth 2,128.25 0 3 9 4
82.545
Secured Loans 70.87 121.4 58.5 171.3 5
37.14 45.280
Unsecured Loans 133.39 49.55 60.4 67 8
83.69 58.210
Total Debt 204.26 170.95 118.9 24 1
2,513.9 2,944.2 107.7 126.22
Total Liabilities 2,332.51 5 3 79 6

Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths

 Application Of Funds
117.0 133.58
Gross Block 162.2 189.82 216.67 28 2
124.4 145.43
Less: Accum. Depreciation 40.08 49.89 58.29 76 4
114.5 129.69
Net Block 122.12 139.93 158.38 84 2
288.6 1749.6
Capital Work in Progress 6.35 18.33 111.1 61 1
1,349.6 1,531.9 100.0 113.52
Investments 1,349.47 2 3 11 1
135.1 191.67
Inventories 236.41 319.48 453.13 38 1
86.13 113.49
Sundry Debtors 408.28 351.68 463.38 7 6
497.2 1352.0
Cash and Bank Balance 22.21 110.43 300.29 08 5
1,216.8 117.1 182.45
Total Current Assets 666.9 781.59 0 97 6
89.15 73.535
Loans and Advances 744.36 663.63 547.37 44 7
Fixed Deposits 0.01 0.01 0 100 0
1,445.2 1,764.1 102.4 125.00
Total CA, Loans & Advances 1,411.27 3 7 06 6
Deferred Credit 0 0 0 0 0
77.65 99.584
Current Liabilities 384.98 298.94 383.38 08 4
81.64 138.55
Provisions 171.74 140.22 237.96 67 8
78.88 111.60
Total CL & Provisions 556.72 439.16 621.34 35 7
1,006.0 1,142.8 117.7 133.73
Net Current Assets 854.55 7 3 31 5
Miscellaneous Expenses 0.01 0.01 0 100 0
2,513.9 2,944.2 107.7 126.22
Total Assets 2,332.50 6 4 8 7
1,057.9 92.27 150.39
Contingent Liabilities 703.48 649.16 7 84 1
109.9 132.34
Book Value (Rs) 49.09 53.99 64.97 82 9

ANALYSIS & INTERPRETATION

1.The networth of the firm has increased to 132.1% in
2010 as compared to 2009 because of increase in
reserves.

2.secured loans have decreased and unsecured loans have

increased as a result the total debt of the firm has
increased which is not good for the company.

3.Fixed deposits have decreased because of increase in

loans and advances and current liabilities of the firm.
PROFIT & LOSS TREND ANALYSIS

Profit & Loss account of Zee

Entertainment Enterprises

Mar '08 Mar '09 Mar '10 trend % trend %

Income
116.146 122.720
Sales Turnover 1,041.99 1,210.24 1,278.74 99 9
Excise Duty 0 0 0 0 0
116.146 122.720
Net Sales 1,041.99 1,210.24 1,278.74 99 9
75.1220 140.134
Other Income 75.77 56.92 106.18 8 6
169.478 270.202
Stock Adjustments 48.36 81.96 130.67 91 6
115.693 129.968
Total Income 1,166.12 1,349.12 1,515.59 07 6

Expenditure 0 0
140.057 77.5216
Raw Materials 3.47 4.86 2.69 64 1
Power & Fuel Cost 0 0 0 0 0
148.824 131.175
Employee Cost 62.1 92.42 81.46 48 5
143.186 136.232
Other Manufacturing Expenses 406.4 581.91 553.65 52 8
122.543
Selling and Admin Expenses 190.65 233.63 0 93 0
97.8918 1300.05
Miscellaneous Expenses 18.5 18.11 240.51 92 4

Preoperative Exp Capitalised 0 0 0 0 0

136.676 128.950
Total Expenses 681.12 930.93 878.31 36 8
88.2804 129.780
Operating Profit 409.23 361.27 531.1 29 3
86.2247 131.397
PBDIT 485 418.19 637.28 42 9
137.206 87.4314
Interest 20.05 27.51 17.53 98 2
84.0262 133.293
PBDT 464.95 390.68 619.75 39 9
112.452 107.830
Depreciation 10.6 11.92 11.43 83 2

Other Written Off 0 0 0 0 0

83.3630
Profit Before Tax 454.35 378.76 608.32 46 133.888
Extra-ordinary items 0 63.41 31.3 0 0
97.3192 140.776
PBT (Post Extra-ord Items) 454.35 442.17 639.62 47 9
83.1805 50.7473
Tax 159.22 132.44 80.8 05 9
104.953 189.360
Reported Net Profit 295.12 309.74 558.84 92 3
136.659 129.212
Total Value Addition 677.65 926.07 875.61 04 7

Preference Dividend 0 0 0 0 0
224.285
Equity Dividend 86.8 86.8 194.68 100 7
 222.352
Corporate Dividend Tax 14.54 14.54 32.33 100 1
Per share data (annualised) 0 0
100.101 100.101
Shares in issue (lakhs) 4,335.67 4,340.07 4,340.07 48 5
104.845 189.133
Earnings Per Share (Rs) 6.81 7.14 12.88 81 6

Equity Dividend (%) 200 200 400 100 200

109.981 132.348
Book Value (Rs) 49.09 53.99 64.97 67 7

ANALYSIS & INTERPRETATION

1. Total income of the firm has increased because increase
in net sales and other income of the firm in 2010.

2. Total expenses of the firm have decreased in 2010

because of decrease in employee cost and selling and
distribution expenses.

3. Net profit of the firm has increased in 2010 to 189.36%

as compared to 2009.

4. Earnings per share of the firm has increased to 189%in

2010 as compared to 2009 because of increase in the
earning capacity of the firm.

LIQUIDITY RATIO

1. Current ratio =current assets/ current liabilities

 year 2008 2009 2010
current assets 666.9 781.59 1216.8
current liabilities 556.72 439.16 621.34
current ratio 1.19 1.77 1.95

ANALYSIS
1. The ideal norm is 2:1 of the current ratio.

(i) In the year 2008 current ratio was 1.19 which is less
than the standard norm of 2:1which means the
current position of the firm is not so good and is
satisfactory.
(ii) In the year 2009 the current ratio has decreased as
compared to 2008 but in 2010 it has increased to
some extent but is still less than the standard norm
of 2:1 which means firms short term obligations is
very weak.
(iii) The reason behind the decrease in current
ratio is due to increase in the current liabilities of
the firm then the current assets.

2. Quick Assets Ratio =Quick Assets/Current

Liabilities

Quick assets =Current assets-Inventories

year 2008 2009 2010

current assets 666.9 781.59 1216.8
inventories 236.41 319.48 453.13
current liabilities 556.72 439.16 621.34
Quick Ratio 0.77 1.05 1.22

ANALYSIS
(i).In 2008 the quick ratio was 0.77 which is very less than
the standard norm of 1:1.In the year 2009 it has increased
somewhat to 1.05 which has again increased in 2010 to
1.22. it means the position of the company is increasing
year by year which is good sign for the company and it is
greater than the standard norm set.

(ii) The increase in the quick ratio of the firm in 2009 and
2010 is due to increase in the amount of the inventory and
current assets of the firm in the year 2009 and 2010.

3. Absolute liquid ratio =Cash + bank/current

liabilities

year 2008 2009 2010

Cash and bank balance 22.21 110.43 300.29
current liabilities 556.72 439.16 621.34
Absolute liquid ratio 0.03 0.25 0.48

(i) In the year 2008 the absolute liquid ratio was 0.03
which has increased

to 0.25 in the year 2009 and 0.48 in the year 2010.it

means the ratio has

Increased subsequently which shows the position of

the firm is improving year by
year and is more than the standard set of 0.5:1

(ii) The increase in the absolute liquid ratio is due to

increase in the cash and bank balance of the firm
which has lead to increase in the absolute liquid ratio.
 ACTIVITY RATIO

1. Inventory turnover Ratio =Net sales/Average

inventory

year 2008 2009 2010

Net sales 1041.99 1210.24 1278.74
Inventory 236.41 319.48 453.13
Inventory turnover ratio 4.4 3.78 2.82

ANALYSIS
(i)In the year 2008 the inventory turnover ratio was
4.40 which is greater than the ratio in 2009 and 2010
but in 2009 and 2010 it has decreased very much
which shows that the firm is going into recession .

(ii) The decrease in the ratio is due to the decrease in the

cost of goods sold in the respective year.

(iii)The inventory holding has increased which is a

good sign for the company.

2. DEBTORS TURNOVER RATIO =Total sales/Total

Debtors

year 2008 2009 2010

Total sales 1041.99 1210.24 1278.74
Total Debtors 408.28 351.68 463.38
Debtor turnover ratio 2.55 3.44 2.75
 ANALYSIS

(i) The higher the debtor turnover ratio better it is for

the company. In the ratio in 2008 was 2.55 which is
less than in the year 2009 and 2010,In the year 2009
the debtor turnover ratio has increased, but it has
again decreased in the year 2010 which is not a good
sign for the company.

(ii) The decrease in the debtor turnover ratio is due to

increase in the number of debtors of the firm.

3. ASSET TURNOVER RATIO = Net Sales/Total Assets

year 2008 2009 2010

Net Sales 1041.99 1210.24 1278.74
Total Assets 2332.5 2513.96 2944.24
Asset Turnover Ratio 0.44 0.48 0.43

ANALYSIS

(i) The asset turnover ratio of the firm was 0.44 which is
less than 2009 but is more than 2010.it means 2009
has been a good year for the firm due to increase in
the assets of the firm in 2009.it means the firm has
the capability to pay of its long term liabilities which
is a good sign for the company.

SOLVENCY RATIO

1. DEBT EQUITY RATIO = Total Debt/ Shareholders fund

Shareholders fund =Equity share + preference share +

reserve & surplus
 year 2008 2009 2010
Total Debt 204.26 170.95 118.9
Shareholders fund 2128.25 2343 2819.83
Debt Equity Ratio 0.09 0.07 0.04

ANALYSIS

(i) The debt equity ratio of the firm was 0.09 but it has
decreased in the year 2009 and 2010 with figures of
0.07 and 0.04 which is a good sign for the firm
because the lower the debt equity ratio better it is for
the company.

(ii) The decrease in the debt equity ratio is due

decrease in the total debt of the firm.

2. PROPRIETORY RATIO = Shareholders fund/Total

Asset

year 2008 2009 2010

shareholders fund 2128.25 2343 2819.83
Total Asset 2332.5 2513.96 2944.24
Proprietory Ratio 0.91 0.93 0.95

ANALYSIS

(i)The proprietory ratio of the firm in 2008 was 0.91

which has increased in 2009 and 2010 to 0.93 and
0.95.

(ii) The increase in the ratio is due to increase in the

total assets of the firm year by year which is a good
sign for the company.
 PROFITABILITY RATIO

1. GROSS PROFIT RATIO = GROSS PROFIT/ NET SALES

×100

year 2008 2009 2010

gross profit 1337.03 1617.28 1810.64
net sales 1041.99 1210.24 1278.74
gross profit ratio 1.28 1.33 1.41

ANALYSIS

(i) The gross profit ratio of the firm during 2008 was
1.28 which has increased in 2009 and 2010 to 1.33
and 1.41.

(ii) The increase is due to increase in the gross profit

and net sales of the company which means the firm is
going very high.

3. NET PROFIT RATIO = NET PROFIT/NET SALES×100

year 2008 2009 2010

net profit 295.12 309.74 558.84
net sales 1041.99 1210.24 1278.74
net profit ratio 0.28 0.25 0.43
 ANALYSIS

(i)The net profit ratio in the year 2008 was 0.28 which
has increased in the respective year of 2009 and 2010
which shows that there is an increase in the net profit
of the company.

(ii) The increase in the net profit ratio is due to the

increase in the net profit and net sales of the
company.

4. OPERATING PROFIT RATIO =OPERATING PROFIT/NET

SALES×100

year 2008 2009 2010

operating profit 409.23 361.27 531.1
net sales 1041.99 1210.24 1278.74
operating profit ratio 0.39 0.29 0.41

ANALYSIS

(i)The operating profit ratio in the year 2008 was 0.39

which has decreased to 0.29 in 2009 but has
respectively increased in the year 2010 which means
the firm is growing in a good position.

(ii) The
increase in the ratio is due to the increase in the
operating profit and net sales of the firm.
 2008 2009 2010
12 months 12 months 12 months

Net Profit Before Tax 456.92 376.19 608.34

Net Cash From Operating

Activities 169.72 181.47 164.24

Net Cash (used in)/from -5.47

Investing Activities 109.45 344.03

Net Cash (used in)/from

Financing Activities -145.92 -202.7 -286.66

Net (decrease)/increase In 18.33

Cash and Cash Equivalents 88.22 221.61

Opening Cash & Cash
Equivalents 3.88 22.21 110.43
Closing Cash & Cash
Equivalents 22.21 110.43 332.05

ANALYSIS

(i) The net cash from operating activities in the year

2008 was 169.72 which has increased in the year
2009 to 181.47 but has again decreased in the recent
year to 164.24.

(ii) The decrease in the cash from operating activities in

the recent year is due to increase in the depreciation
and reserves of the firm and increase in the current
liabilities as well as the decrease in the current
assets of the firm.
 (iv) The increase in the cash from investing activities
in the year 2010 is too much than the increase in the
year 2009 because there has been the sale of assets
in large number and fixed assets have been
purchased, so there is an increase in cash from
investing activities during the respective years.

(v) The cash from financing activities has gone

negative due to the bank loan borrowed by the firm,
non payment of short term borrowing and dividend
has been paid, so the cash generated from financing
activities has gone negative.

(vi) Cash and bank balance of the firm has increased

which shows what amount of cash has been out
flowed and what amount has inflow into the
company.

STATEMENT OF CHANGES IN WORKING CAPITAL

particular 2009 2010 Increase Decrease
CURRENT ASSETS
sundry debtors 351.68 463.38 111.7
inventories 319.48 453.13 133.65
investment 1349.62 1531.93 182.31
work in progress 18.33 111.1 92.77
cash and bank balance 110.43 300.29 189.86
TOTAL ASSETS 2149.54 2859.83
CURRENT LIABILITIES
current liabilities 439.16 621.34 182.18
TOTAL CURRENT
LIABILITY 439.16 621.34
change in working
capital 1710.38 2238.49 710.29 182.18
Net increase in
working capital 528.11 528.11
TOTAL 2238.49 2238.49 710.29 710.29

ADJUSTED PROFIT AND LOSS

ACCOUNT

amou
particulars amount particulars
309.7
To balance c/d 558.84 To balance b/d 4
To depreciation on fixed
assets -0.49
By fund from 725.4
To general reserve 476.83 operations 4
1035.
TOTAL 1035.18 18

FUND FLOW STATEMENT

 APPLICATION OF
SOURCES OF FUNDS Amount FUNDS Amount
Purchase of fixed
Fund from operation 725.44 assets 18.45
Issue of share capital 0 Repayment of loan -116.26
Raising long term Increase in working
loans -295.14 capital 528.11
TOTAL 430.3 430.3

ANALYSIS

(I (i) The statement of changes in working capital shows the curren

the
Current liabilities of the firm for the particular year
2009 and 2010, after analysing the current assets
changes in working capital was found which showed a net
increase in the working capital of the firm.
(ii) Adjusted profit and loss account shows the
adjustment made to the profit and loss of the firm to
find out the fund from operations which is necessary to
make fund flow statement regarding the firm.
(iii) The fund flow statement shows the sources of funds
and application of funds which shows from where the
funds have been provided the total of both the funds
are same which shows that the fund flow statement
made is true.
 PARTICULARS AMOUNT
DIRECT MATERIAL 2.69
less excise duty 0
PRIME COST 2.69
add factory overhead
power and fuel cost 0
other manufacturing expenses 553.65
depreciation 11.43
Factory COST 567.77
Office and administrative
add expenses
miscellaneous expenses 240.51
employee cost 81.46
COST OF PRODUCTION 889.74
add selling and distribution expenses
selling expense 0
COST OF SALES 889.74
add profit 558.84
SALES 1448.58