INTRODUCTION

Business firms may fairly be regarded as investment agencies or

intermediaries. That is to so that their role is to raise funds from members of the
public and from other investors and to invest those funds. Usually funds will be
obtained from the legal owners of the firm and long-term lenders, with some short
–term finance begin provided by banks other financial institutions, and trade
creditors firms typically invest in real assets as such as lands, buildings, plants
and trading stocks, through they may also invest in “financial” assets.

“Business finance is that “Business activity which is concerned with the

acquisition and conservation of capital funds in meeting financial needs and over
all objectives of a business enterprise”

“Business finance can broadly be defined as the activity concerned with

planning, raising, controlling and administering of the funds used in the business”

1. Wheeler, Business-An Introduction Analysis.

2.-H.G.Fathman and H.E.Dougall

“Finance is the life blood of business. It is rightly termed as the science of

money. We need finance for the production of goods and services as well as
their distribution”

1
 “Financing is the process of organizing the flow of funds so that can carry
out its objectives in the most efficient manner and meet its obligations as they fall
due”

“A financial statement is an organized collection of data according to

logical and consistent accounting procedures. It purpose is to convey and
understanding of some financial aspects of a business firm. It may show a
position at a moment of time as is the case of a balance sheet, or may reveal a
series of activities over given period of times as in the case of an income
statement”

3. S.A.Sherlear and C.Mallikharjuna rao, Industrial organization and

management.
4. Kenneth Midiey and Ronald Burns; Business Finance
5. Hampton johni “financial Decision making

The term financial statement generally refers to two basic statements:

i. The income statement.
ii. The balance sheet of course, a business may also prepare.
iii. A statement of retained earnings.
iv. A statement of changes in financial position in addition to the above two
statements.
2
 The financial statement involves recording, classifying and summarizing of
various business transactions. It is prepared for the purpose of presenting a
periodical review or report of the progress made by concern and with the state of
the investment in the business and results achieved during the accounting
period. The day-to-day business transactions are recorded in different subsidiary
books in chronological order. These transactions are posted in to various ledger
accounts and then the balances are extracted. The aim of maintaining various
records is to exhibit the financial positions statements are the come of the
accounting process.

Financial statement analysis largely a study of relationship among the

financial in a business as disclosed by a single set of statement and a study the
trends of these factors as shown in series of statement.

The term financial analysis as applied to almost any of the detailed

enquiry into financial data. A financial executive has to evaluate the past
performance present financial position liquidity situations enquire into profitability
of the firm and to plan for feature operations for the these all have to study the
relationship among various financial statement.

The analysis of financial statement is an attempt to determine the

significant and meaning of the financial statement .date so that the fore cost may
be made of the feature prospects for earning ability to pay interest and debt
maturities(both current and long term) and profitability.

3
The analysis of financial statement consists of a study of relationships and trends
to determine whether or not the financial position of the concern and its operating
efficiency have been satisfactory. In the process of this analysis, various tools or
methods are used by the financial analyst. The analytical tools generally
available to an analyst for this purpose are as follows:

1. Comparative statement.

2. Common-size statement.

3. Trend analysis.

4. Average analysis.

5. Statement of changes in working capital.

6. Funds flow analysis.

7. Cash flow analysis.

8. Ratio analysis.

The present study is related to comparative statement common size statement

and trend analysis only.

4
OBJECTIVES OF STUDY:-

1) To judge the financial performance of the concern.

2) To ascertain the comparative and common-size statement of the
company.
3) To analyze the trend position of the concern.
4) To make the findings, suggestions and conclusion.

 SCOPE OF STUDY

The scope of study is limited to SHANYA MARKETINGS VEERAPANDI

TIRUPUR. The project is expected to provide sufficient information about the
financial statement of SHANYA MARKETING LIMITED.ie, to evaluate the
past performance, present financial position, liquidity situation, and to plan for
the future operations.

Limitations of study

1) The study of analysis and interpretation is applicable only to

shanya marketing Limited.
2) It deals only about the financial statement of the firm
3) The collected information about the financial position of shanya
marketing Limited for 5 years. i.e., from 2000-2001 to 2004-
2005 due to limited time.

5
 Methodology

Primary data:-

Primary data is known as the data collected for the first time
through field study. Such data are collected with specific set of objectives
to assess the current status of any variable studied.

Secondary data:-

Secondary data refers to the information or facts already collected.

Such data are collected with objectives of understanding the past status of
any variable. Or the data collected and reported by some source is
assessed and used for the objective of a study.

The secondary data was collected mainly from

1. Annual reports
2. Internal records

 Period of study
The study covers a period of 5 financial years from 2003-2004 to
2007-2008 consecutively.

6
CHAPTERIZATION

Chapter-1

It deals with introduction, scope, objectives, period of study, methodology and

limitations of study.

Chapter-2

It deals with company profile. It also describes that now the manufacturing
process is done. It also deals with review of literature.

Chapter-3

This chapter deals with the analysis and interpretation of the data.

The various tools of analysis used for this report there.

1) Comparative statement.
2) Common-size statement.
3) Trend analysis.

Chapter-4

This chapter deals with the findings and suggestions which are based on the
company’s overall performance. The conclusion is given on the basis of the
above analysis.

7
 CHAPTER-II
COMPANY PROFILE

Shanya marketing is one of the famous marketing company in INDIA in

the energy related/infrastructure sector today.Shanya marketing Limited came
into existence to supplement and complement activities of Marketing Limited, an
organization which was established in 1980 in veerapandi Tirupur.

In the initial phase three units were established at Haridwar, Hyderabad,

and Trichirapalli during the year 1986-87, that from the core of the diversified
product range systems and services at SHANYA today. Later in 1992, SHANYA
was merged with marketing (India) limited to consolidate the assistance in
marketing limited.

Established more than 28 years ago the company ushered in the

indigenous Heavy marketig Equipment Industry in India, a dream that has been
more than realized with a well recognized track record of performance. It has
been earning profits continuously since 1994-95 and paying dividends since
1999-2000.

SHANYA markets over 180 products under 3 major groups and caters to
core sectors of the India Economy viz., Power generation and transmission,
industry, transportation, telecommunications, renewable energy, etc., The wide
network of SHANYA’s 14 marketing divisions, four power sector regional offices,
enables the company to promptly serve its customers and provide them with
suitable products, systems and services-efficiently and at competitive prices.
8
 The quality and reliability of its products is due to the emphasis on design
and marketing to international standards be acquiring and adapting some of the
best technologies from leading companies in the world, together with
technologies developed in its own R&D Centers.

SHANYA has acquired certifications to Quality Management systems-ISO

9001, Environment management systems –ISO 14001 and occupational Health
and safety management systems has also adopted the concepts of total quality
management.

SHANYA HAS
1. Makes the good relationship between the producers and customers.
2. Supplied over 25,000 motors with drive control system to power projects,
petrochemical, refineries, steel, fertilizer cement plants, etc.
3. Supplied Transaction electrics and spare parts etc,
4. Supplied over ten crore valves to power plants and other industries.

SHANYA’S OPERATIONS ARE ORGANISED AROUND THREE

BUSINESS SECTORS, NAMELY:

Marketing limited including Transmission, Transportation,

Telecommunication and national operation. This enables SHANYS to have a
strong customer orientation to be sensitive to the needs of the customer and
respond quickly to the changes in the market.
The greatest strength of SHANYA is its highly skilled and committed 2500
employees. Every employee is given an equal opportunity to develop himself and
improve his position. The company is striving to give shape to its aspirations and
fulfill the expectations as a ‘Navarathna’s company.

9
VISION OF THE COMPANY
A world class marketing enterprises committed to enhancing company
value.

MISSION OF THE COMPANY

“To be an India multinational marketing limited providing total business
solutions quality products, systems and services in the field of energy industry,
transportation, infrastructure and other potential areas”.

VALUES OF THE COMPANY

1. Zeal to excel and Zest for change.
2. Integrity and fairness in all weathers reflect for dignity and potential of
individual’s strict adherence to commitments ensure speed of response,
faster creativity and team work.
3. Loyalty and pride in the company.
OBJECTIVES OF THE COMPANY:

GROWTH

1. To ensure a steady growth enhancing the competitive edge of SHANYA.

2. Profitability.
3.To provide reasonable and adequate return on capital employed.

CUSTOMER FOCUS

To build a high degree of customer confidence by providing increased

value for his money through standards of products, quality etc.
10
PEOPLE ORIENTATION

To enable each employee to achieve his potential, improve his

capabilities, his role and contribute positively to the growth and success of the
company.

TECHNOLOGY

1. To achieve technological excellence in operations be development of

indigenous technology.
2. To fulfill the expectation which like government as owner, employees,
customers and the country at large have formed SHANYA.

PRODUCTS MARKETED AT SHANYA

POWER
1. Air Preheaters
2. Boilers
3. Control Relay panel
4. Electrostatic Precipitors
5. Fabric filters
6. Fans
7. Gas Turbine Hydro Power Plant
8. Piping Systems
9. Pulverizes
10. Pumps
11. Soot blowers
12. Steam Generation
13. Turbo generators
14. Valves
11
INDUSTRY
1. Capacitors
2. Compressor
3. Diesel Generating sets
4. Industrial motors and alternators
5. Gas turbine
6. Oil field equipments
7. Power Semiconductors
8. Device
9. Steel casting and forging
10. Steam generator

TRANSMISSION

1. Bushings
2. Capacitors
3. Control Relay Panels
4. Dry-type transformers
5. Energy Meters
6. HVDC Transmission system
7. Insulators
8. Switch gears

TRANSPORTATION

1. Battery powered road vehicle

2. Electric rolling stock
12
TELECOMMUNICATION

1. 265 port RAX

2. High capacity exchange

NON CONVENTIONAL ENERGY SOURCE

1. Battery powered road vehicle

2. Mini/Micro hydro sets
3. Solar water heating systems
4. Wind electric generators

R&D PRODUCTS
1. Fuel cells
2. Surface coatings

SERVICES

1. Power generator systems

2. Transmission system
3. Transportation systems
4.

OTHER LINKS

1. Industries
2. Groups
3. Units
4. Centers
13
SYSTEM TURBINES

1. Turbo generator
2. Valves
3. Automated storage and retrievals
4. Local sensor

14
 ANALYSIS AND INTERPRETATION

FINANCIAL STATEMENT

A financial statement is an organized collection of data according to logical

and consistent accounting procedures. Its purpose is to convey an understanding
of some financial aspects of a business firm. It may show a position at a moment
of time as in the case of a balance sheet, or many reveal a series of activities
over a given period of time, as in the case of an income statement.

INCOME STATEMENT

The income statement (also termed as profit and loss account) is

generally considered to be the most useful of all financial statements. It explains
what has happened to a business as a result of operations between two balance
sheet dates. For this purpose it matches the revenues and cost incurred in the
process of earning revenues and shows the net profit carried or loss suffered
during a particular period

BALANCE SHEET

It is a statement of financial position of a business at a specified moment

of time. It represents all assets owned by the business at a particular moment of
time and claims (or equities) of the owners and outsiders against these assets at
the time. It is in a way snapshot of the financial condition of the business at the
time.
15
COMPARATIVE INCOME STATEMENT

A comparative income statements show the operating results for a number

of accounting periods, so as to facilitate comparison. It gives an idea of the
progress of a business over a period of time. It gives an idea about the
improvement (or otherwise) in sales, profits and other expenses over the
previous year(s).

A comparative income statement has two columns for the figures of the current
year and the previous year. A third column is used to show the increase or
decrease in figures. A fourth column may be added for giving percentage of
increase or decrease.

16
 Table No: 3.1
COMPARATIVE INCOME STATEMENT FOR
THE YEAR ENDED 2003-2004
Increase/
Year Increase/
Year 2003 decrease
Particulars 2004 (In decrease
(In Millions) Amount (In
Millions) %
Millions)

Sales 66339.71 63477.62 (2862.09) (4.31)

Other income 7708.39 15754.82 8046.43 104.39

Total income(A) 74048.10 79232.44 5184.34 7.00

Manufacturing 29940.80 32443.12 2502.32 8.35

expenses
Personnel 11329.70 21702.11 10372.41 91.55
expenses
Administration
selling& other 16358.54 15725.75 (632.79) (3.87)
expenses
Interest and 216.56 437.64 221.08 102.08
finance charges
Depreciation 1535.00 1577.80 42.80 2.79

Total 59380.60 71886.42 12505.82 21.06

expenses(B)
Net profit before
tax (A-B) 14667.50 7346.02 (7321.48) (49.91)
Less: provision
for tax 5526.88 2838.35 2688.53 (48.64)

Net profit after tax

9140.62 4507.67 (4632.95) (50.68)
Source: secondary data

17
INTERPRETATION

The comparative income statement of shanya marketing Limited during

the year 2003-2004 reveals that there had been a increase in the total income of
Rs. 5184.34 millions i.e., 7% due to the increase in sales. The total expenses
have also been increased by Rs.12505.82 millions i.e., 21.06% because of the
increase in the personnel expenses. The net profit after tax was decreased by
Rs.4632.95 millions i.e., 50.68%. This shows that the overall profitability during
the year 2000 and 2001 is not good for the company.

Table No: 3.2

18
 COMPARATIVE INCOME STATEMENT FOR
THE YEAR ENDED 2004-2005

Increase/
Year Year Increase/
decrease
Particulars 2004 (In 2005 (In decrease
Amount (In
Millions) Millions) %
Millions)

Sales 63477.62 72866.25 9388.63 14.79

Other income 15754.82 7433.55 (8321.27) (52.81)

Total income(A) 79232.43 80299.80 1067.37 1.35

Manufacturing 32443.12 34924.61 2481.49 7.65

expenses
Personnel 21702.11 14447.17 (7254.94) (33.43)
expenses
Administration 15725.75 16421.51 695.76 4.42
selling& other
expenses
Interest and 437.64 969.76 532.12 121.58
finance charges
Depreciation 1577.80 1692.01 114.21 7.23

Total
expenses(B) 71886.42 68454.06 (3432.36) (4.77)
Net profit before
tax (A-B) 7346.02 11845.73 4499.71 61.25
Less: provision
for tax 2838.35 3272.26 433.91 15.28

Net profit after tax

4507.67 8573.46 4065.80 90.19
Source: Secondary data

19
INTERPRETATION

The comparative income statement of shanya marketing Limited

during the year 2004-2005 reveals that there had been a increase in the
total income of Rs.1067.37 millions ie,1.35%.the total expenses have
been decreased by Rs.3432.36 millions i.e., 4.77%. There is an increase
in the net profit after tax accounting to 4065.80 millions i.e., 90.19% due to
minimization of personnel expenses. This shows that the overall
profitability during the year 2004 and 2005 is good for the company.

20
 Table No: 3.3
COMPARATIVE INCOME STATEMENT FOR
THE YEAR ENDED 2005-2006

Increase/
Year Year Increase/
decrease
Particulars 2005 (In 2006 (In decrease
Amount (In
Millions) Millions) %
Millions)

Sales 72866.25 74822.19 1955.94 2.68

Other income 7433.55 7921.81 488.26 6.56

Total income(A) 80299.80 82744.00 2444.20 3.04

Manufacturing 34924.61 31603.78 (3320.83) (9.50)

expenses
Personnel 14447.17 15046.44 600.27 4.16
expenses
Administration 16421.51 14669.29 (1752.22) (10.67)
selling& other
expenses
Interest and 969.76 547.80 (421.94) (43.51)
finance charges
Depreciation 1692.01 1853.50 161.49 9.54

Total
expenses(B) 68454.06 63720.81 (4733.25) (6.91)
Net profit before
tax (A-B) 11845.73 19023.19 7177.46 60.59
Less: provision
for tax 3272.26 4203.08 930.82 28.44

Net profit after tax

8573.46 14820.11 6246.64 72.86
Source: Secondary data

21
INTERPRETATION

The comparative income statement of shanya marketing Limited during

the year 2005-2006 reveals that there had been a increase in the total income of
Rs.2444.20 millions i.e., 3.04%.The total expenses have been decreased by
Rs.4733.25 millions i.e., 6.91%. There is a increase in the net profit after tax
accounting to 6246.64 millions i.e., 72.86%. The net profit after tax was
increased because of the minimization of all the expenses which is a good sign
for the company’s future.

Table No: 3.4

22
 COMPARATIVE INCOME STATEMENT FOR
THE YEAR ENDED 2006-2007
Increase/
Year Year Increase/
decrease
Particulars 2006 (In 2007 (In decrease
Amount (In
Millions) Millions) %
Millions)

Sales 74822.20 86624.70 11802.50 15.77

Other income 7921.81 4821.40 (3100.41) (39.14)

Total income(A) 82744.00 91446.10 8702.10 10.52

Manufacturing 31603.78 36346.56 4742.78 15.00

expenses
Personnel 15046.44 16395.09 1348.65 8.96
expenses
Administration 14669.29 17143.97 2474.68 16.87
selling& other
expenses
Interest and 547.80 600.80 53.00 9.68
finance charges
Depreciation 1853.50 1980.01 126.51 6.83

Total
expenses(B) 63720.81 72466.45 8745.64 13.72
Net profit before
tax (A-B) 19023.19 18979.66 (43.53) (2.08)
Less: provision
for tax 4203.08 208.44 (3994.64) (95.00)

Net profit after tax

14820.11 18771.22 3951.11 26.66
Source: Secondary data

23
INTERPRETATION

The comparative income statement of shanya marketing Limited during

the year 2006-2007 reveals that there had been a increase in the total income of
Rs.8702.10 millions i.e., 10.52% due to the increase in sales, Although the total
expenses have been increased by Rs.8745.64 millions i.e., 13.72%.There is an
increase in the net profit after tax accounting to 3951.11 millions i.e., 26.66%.
Though there in an increase in the net profit the total expenses of the company
exceeds the total sales made by the company.

TABLE NO:3,5
COMPARATIVE INCOME STATEMENT FOR
24
 THE YEAR ENDED 2007-2008
Increase/
Year Year Increase/
decrease
Particulars 2007 (In 2008 decrease
Amount
Millions) (In Millions) %
(In Millions)

Sales 86624.70 103363.97 16739.27 19.32

Other income 4821.40 11954.74 7133.34 147.95

Total income(A) 91446.10 115318.71 23872.61 26.11

Manufacturing 36346.56 50976.78 14630.22 40.25

expenses
Personnel 16395.09 16503.80 108.71 0.66
expenses
Administration 17143.97 27747.75 10603.78 61.85
selling& other
expenses
Interest and 600.80 814.06 213.26 34.50
finance charges
Depreciation 1980.01 2188.65 208.64 10.54

Total 72466.45 98231.04 25764.59 35.55

expenses(B)

Net profit before 18979.66 17087.67 (1891.99) (9.97)

tax (A-B)
Less: provision 208.44 1262.45 1054.01 505.66
for tax
Net profit after tax
18771.22 15825.22 (2946.00) (15.69)
Source: Secondary data

INTERPRETATION

25
 The comparative income statement of shanya marketing Limited during
the year 2007-2008 reveals that there had been a increase in the total income of
Rs.23872.61 millions ie,26.11% due to the increase in the sales up to 20%. The
total expenses during the year were also on the increasing side which of
Rs.25764.59 millions i.e., 35.55% due to the increase in the manufacturing,
administration and selling expenses. There is a decrease in the net profit after
tax accounting to 2946 millions i.e., 15.7% because of a high provision for tax.
This shows that the overall profitability during the year 2007 and 2008 is not good
for the company.

26
COMPARATIVE BALANCE SHEET

Comparative balance sheet as on two or more different dates can be

used for comparing assets and liabilities and finding out any increase or
decrease in those items. Thus, while in a single balance sheet the emphasis is
on present position, it is on change in the comparative balance sheet.

Table No: 3.6

COMPARATIVE BALANCE SHEET FOR
27
 THE YEAR ENDED 2003-2004

Increase/
Year Year Increase/
decrease
Particulars 2003 2004 decrease
Amount
(In Millions) (In Millions) %
(In Millions)

Sources of funds

Share capital 2447.60 2447.60 --- ---

Reserves & 33539.15 35856.03 2316.87 6.91

surplus

Secured loans 1960.00 5000.00 3040.00 155.10

Unsecured loans 447.01 5255.99 4808.98 1075.82

Total 39393.76 48559.62 10165.85 26048

Application of
funds

Fixed assets 11602.33 12037.92 435.59 3.75

Investments 103.43 103.43 --- ---

Net current 24278.57 34132.37 9853.80 40.58

assets
Miscellaneous 2409.43 2285.90 (123.53) (5.13)
expenditure

Total 38393.76 48559.62 10165.86 26.48

Source: Secondary data

28
INTERPRETATION

The comparative balance sheet of the company during the years

20003and 2004 reveals that there had been an increase in the unsecured loans
of Rs.4809 millions which is a massive of 1075.82% because of the increase in
the expenses and provisions for taxes. The secured loans was also increased by
Rs.3040 millions i.e., 155.10%. The net current assets had been increased by
Rs.9853.79 millions i.e., 40.58%, which shows the company has invested more
in its current assets. Miscellaneous expenditure was reduced by Rs.123.53 i.e.,
5.13%.

Table No: 3.7

COMPARATIVE BALANCE SHEET FOR
THE YEAR ENDED 2004-2005
29
 Increase/
Year Year Increase/
decrease
Particulars 2004 2005 decrease
Amount
(In Millions) (In Millions) %
(In Millions)

Sources of funds

Share capital 2447.60 2447.60 --- ---

Reserves & 35856.03 42248.45 6392.42 17.82

surplus

Secured loans 5000.00 5002.80 2.80 0.06

Unsecured loans 5255.99 1655.04 (3600.95) 68.51

Total 48559.62 51353.89 2794.27 5.75

Application of
funds

Fixed assets 12037.92 12332.39 294.47 2.45

Investments 103.43 103.43 --- ---

Net current 34132.37 33379.12 (753.25) (2.21)

assets
Miscellaneous 2285.90 2492.77 206.87 9.05
expenditure
Deferred current --- 3046.18 --- ---
assets

Total 48559.62 51353.89 2794.27 5.75

Source: secondary data

INTERPRETATION
30
 The comparative balance sheets of SHANYA during the years 2004 and
2005 shows that there is an increase in Reserves and Surplus of Rs.6392.43
millions i.e., 17.82% because of the increase in the net profit. The net current
assets have been decreased by 753.25 millions i.e., 2.21%. The unsecured loans
was decreased by 3600.95 millions i.e., 68.51% which shows the company has
sufficient funds to repay its creditors.

Table No: 3.8

COMPARATIVE BALANCE SHEET FOR

31
 THE YEAR ENDED 2005-2006
Increase/
Year Year Increase/
decrease
Particulars 2005 2006 decrease
Amount
(In Millions) (In Millions) %
(In Millions)

Sources of funds

Share capital 2447.60 2447.60 --- ---

Reserves & 42248.45 45589.10 3340.65 7.91

surplus

Secured loans 5002.80 5000.00 (2.80) (0.06)

Unsecured loans 1655.04 310.91 (1344.13) (81.21)

Total 51353.89 53347.61 1993.72 3.88

Application of
funds

Fixed assets 12332.39 12291.99 (40.40) (0.33)

Investments 103.43 103.27 (0.16) (0.16)

Net current 33379.12 35923.37 2544.25 7.62

assets
Miscellaneous 2492.77 955.03 (1537.74) (61.68)
expenditure
Deferred tax 3046.18 4073.95 1027.77 33.73
assets

Total 51353.89 53347.61 1993.72 3.88

Source: Secondary data

32
INTERPRETATION

The comparative balance sheet of SHANYA during the year 2005 and
2006 reveals that there had been a decrease fixed asset by Rs.40.40 millions
i.e., 0.33% because of a high provision made for depreciation and investments
was reduced by Rs.0.163 millions i.e., 0.16%. The unsecured loans was
decreased by 1344.13 millions i.e., of 81.21% which shows the company opts to
reduce the outsider’s fund in its capital. The deferred tax assets was increased
by 1027.77 millions i.e., 33.73% because of a high provision was made for tax.

33
 Table No: 3.9
COMPARATIVE BALANCE SHEET FOR
THE YEAR ENDED 2006-2007
Increase/
Year Year Increase/
decrease
Particulars 2006 2007 decrease
Amount
(In Millions) (In Millions) %
(In Millions)

Sources of funds

Share capital 2447.60 2447.60 --- ---

Reserves & 45589.10 50511.80 4922.70 10.80

surplus

Secured loans 5000.00 5000.00 --- ---

Unsecured loans 310.91 400.26 89.35 28.74

Total 53347.61 58359.66 5012.05 9.39

Application of
funds

Fixed assets 12291.99 12026.98 (265.01) (2.16)

Investments 103.27 289.82 186.55 180.64

Net current 35923.37 40878.46 4955.09 13.79

assets
Miscellaneous 955.03 179.21 (775.82) (81.23)
expenditure
Deferred tax 4073.95 4985.19 911.24 22.36
assets

Total 53347.61 58359.66 5012.05 9.39

Source: Secondary data

34
INTERPRETATION

The comparative balance sheet of SHANYA during the years 2006 and
2007 reveals that there had been an increase in the investments of Rs.186.55
millions i.e., 180.64% which shows that the company has excessive funds. The
fixed assets was decreased by Rs.265.01 millions i.e., 2.16%. The reserves and
surplus made during the year 2003-2004 increased by Rs.4922.70 millions i.e.,
10.8% because of a high profitability made by the company.

35
 Table No: 3.10
COMPARATIVE BALANACE SHEET FOR
THE YEAR ENDED 2007-2008
Increase/
Year Year Increase/
decrease
Particulars 2007 2008 decrease
Amount
(In Millions) (In Millions) %
(In Millions)

Sources of funds

Share capital 2447.60 2447.60 --- ---

Reserves & 50511.80 57821.34 7309.54 14.47

surplus
---
Secured loans 5000.00 5000.00 ---

Unsecured loans 400.26 369.83 (30.43) (7.60)

Total 58359.66 65638.77 727.90 1.25

Application of
funds

Fixed assets 12026.98 11395.59 (631.39) (5.25)

Investments 289.83 89.53 (200.30) (69.11)

Net current 40878.46 48970.86 8092.40 19.80

assets
Miscellaneous 179.21 --- --- ---
expenditure
Deferred tax 4985.19 5182.79 197.60 3.96
assets

Total 58359.66 65638.77 727.90 1.25

Source: Secondary data

36
INTERPRETATION

The comparative balance sheet of SHANYA during the year 2007 and
2008 reveals that the investments were disinvested to Rs. 200.3 millions i.e.,
69.11% because of the increase in sales and production expenses. There has
been an increase in the reserves and surplus of Rs. 7309.54 millions i.e.,
14.47%. The net current assets were increased to Rs. 8092.40 millions i.e.,
nearly 20% because of the increase in the sales made by the company.

37
COMMON-SIZE STATEMENT

The common-size statements balance sheet and income statement, are

shown in analytical percentages. The figure is shown as total assets, total
liabilities and total sales. The total sales are taken as 100 and different assets
are expressed as a percentage of total. Similarly, various liabilities are taken as
a part of total. Similarly various liabilities are taken as a part of total liabilities.
These statements are also known as component percentage. The analyst is able
to assess the figure in relation to total values.

COMMON-SIZE INCOME STATEMENT

The items in income statement can be shown as percentage of sales to

show the relation of each items of income statement and volume of sales. The
increase in sales will certainly increase selling expenses and not administrative
or financial expenses. In case the volume of sales increases, the expenses may
go up. If the sales reduce the expenses should be reduced. It is helpful in
evaluating operational activities of the enterprises.

38
 Table No: 3.11
COMMON-SIZE INCOME STATEMENT OF SHANYA FOR THE YEAR ENDED 2003 TO 2008
Year Percentage
Particulars

2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Sales 63477.62 72866.25 74822.20 86624.70 103363.97 100.00 100.00 100.00 100.00 100.00

Other income 15754.82 7433.55 7921.81 4821.40 11954.74 24.82 10.20 10.59 5.55 11.56

Total income(A) 79232.43 80299.80 82744.00 91446.10 115318.71 124.82 110.20 110.59 105.55 111.56

Manufacturing 32443.12 34924.61 31603.78 36346.56 50976.78 51.11 47.93 42.24 41.96 49.32
expenses
21702.11 14447.17 15046.44 16395.09 16503.80 34.19 19.82 20.11 18.93 15.97
Personnel
expenses 15725.75 16421.51 14669.29 17143.97 27747.75 24.77 22.54 19.60 19.79 26.84

Administration
selling& other 437.64 969.76 547.80 600.80 814.06 0.69 1.33 1.30 0.69 0.79
expenses
1577.80 1692.01 1853.50 1980.01 2188.65 2.49 2.32 2.26 2.28 2.12
Interest and
finance charges

Depreciation

Total 71886.42 68454.06 63720.81 72466.45 98231.04 113.25 93.94 85.51 83.65 95.04
expenses(B)

Net profit before 7346.02 11845.73 19023.19 18979.66 17087.67 11.57 16.26 25.08 21.90 16.52
tax (A-B)
2838.35 3272.26 4203.08 208.44 1262.45 4.47 4.49 5.62 0.24 4.47
Less: provision
39
for tax

Net profit after 4507.67 8573.46 14820.11 18771.22 15825.22 7.10 11.77 19.46 21.66 12.05
tax
Formula:

Year value
Common-size percentage = X 100
Total value

40
INTERPRETATION

The analysis of common-size income statement of SHANYA for the years

2003-2008 reveals that the overall income of the company is high during the
period of study. The overall profitability in 2006-20047is high when compared to
other years. This is because the expenses are minimized during that year.

41
 CHART NO: 3.11

Common-size Income Statement of Net Profit after Tax

25
21.66
20 19.46

15
Percentage

11.77 12.05
10
7.1

0
2004 2005 2006 2007 2008
Net profit after tax

COMMON-SIZE BALANCE SHEET

42
 A statement in which balance sheet items are expressed as the ratio of
each assets to total assets and the ratio of each liabilities is called common–size
balance sheet. The common-size balance sheet is a horizontal analysis. The
comparison of figures in different periods is not useful because total figures may
be affected by a number of factors. It is not possible to establish standard firms
for various assets. The trends of figures from year to year may not be studied
and even they may not give proper results.

43
 Table No: 3.12
COMMON-SIZE
Source: Secondary data BALANCE SHEET OF SHANYA FOR THE YEAR ENDED 2003-2008

Year Percentage
Particulars
2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Application of
funds
12037.92 12332.39 12291.99 12026.98 11395.59 24.79 24.14 23.04 20.61 17.36
Fixed assets
103.43 103.43 103.27 289.83 89.53 0.21 0.20 0.19 0.49 0.14
Investments
34132.37 33379.12 35923.37 40878.46 48970.86 70.28 65.00 67.34 70.05 74.60
Net current
assets 2285.90 2492.77 955.03 179.21 --- 4.72 4.85 1.80 0.30 ---

Miscellaneous --- 3046.18 4073.95 4985.19 5182.79 --- 5.81 7.63 8.55 7.90
expenditure

Deferred tax
assets

Total 48559.62 51353.89 53347.61 58359.66 65638.77 100.00 100.00 100.00 100.00 100.00

Sources of
funds
2447.60 2447.60 2447.60 2447.60 2447.60 5.04 4.77 4.59 4.19 3.73
Share capital
35856.03 42248.45 45589.10 50511.80 57821.34 73.84 82.27 85.46 86.55 88.09
Reserves & 44
surplus 5000.00 5002.80 5000.00 5000.00 5000.00 10.30 9.74 9.37 8.57 7.62

Secured loans 5255.99 1655.04 310.91 400.26 369.83 10.82 3.22 0.58 0.69 0.56

Unsecured loans

Total 48559.62 51353.89 53347.61 58359.66 65638.77 100.00 100.00 100.00 100.00 100.00
Formula:

Year value
Common-size percentage = X 100
Total value

45
INTERPRETATION

The analysis of common size balance sheets of SHANYA for the years
2003-2008 reveals that the balance sheet of the company was increasing all the
time during the period of study. The fixed assets of the company were oscillating
during the period of study. The share capital remains the same throughout the
period of study. The reserves and surplus have been increased reasonably.

46
 CHART NO: 3.12

Common-size Balance Sheet of Net Current Assets

Net Current Assets

60000
48970.86
50000
40878.46
40000 35923.37
34132.37 33379.12

30000

20000

10000

0
2004 2005 2006 2007 2008
Net Current Assets

47
TREND ANALYSIS

Trend analysis is very helpful in making a comparative study of the

financial statement of several years. Under this technique information for a
number of years is taken up and one year (usually the first year) is taken as the
base year. Each item of the base year is taken as 100 and on the basis the
percentage for the other years is calculated.

48
 Table 3.13
TREND PERCENTAGE INCOME STATEMENTOF SHANYA FOR THE YEAR ENDED 2003-
2008

Year Percentage
Particulars
2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Sales 63477.6 72866.2 74822.2 86624.7 103363.9 100.0 114.7 102.6 115.7 119.3
2 5 0 0 7 0 9 8 7 2
Other income
15754.8 7433.55 7921.81 4821.40 11954.74 100.0 47.18 106.5 60.75 248.4
2 0 7 2

Total income(A) 79232.4 80299.8 82744.0 91446.1 115318.7 100.0 101.3 103.0 110.5 126.1
3 0 0 0 1 0 5 4 2 0

Manufacturing expenses 32443.1 34924.6 31603.7 36346.5 50976.78 100.0 107.6 90.50 115.0 140.2
2 1 8 6 0 5 0 5
Personnel expenses 16503.80 104.1
21702.1 14447.1 15046.4 16395.0 100.0 66.56 6 108.9 100.6
Administration selling& 1 7 4 9 27747.75 0 6 6
other expenses 104.4 89.33
15725.7 16421.5 14669.2 17143.9 100.0 2 116.8 161.8
Interest and finance 5 1 9 7 814.06 0 7 5
charges 56.49
2188.65 221.5
Depreciation 437.64 969.76 547.80 600.80 100.0 9 109.5 109.6 134.5
0 4 8 0
1577.80 1692.01 1853.50 1980.01 107.2
100.0 4 106.8 110.5
0 3 4

Total expenses(B) 71886.4 68454.0 63720.8 72466.4 98231.04 100.0 95.22 92.56 114.3 135.5
2 6 1 5 0 7 5
49
Net profit before tax(A-B) 7346.02 11845.7 19023.1 18979.6 17087.67 100.0 161.2 163.6 97.92 90.03
3 9 6 0 5 2
Less: provision for tax 2838.35 1262.45 4.96 605.6
3272.26 4203.08 208.44 100.0 115.2 128.4 6
0 8 5

Net profit after tax 4507.67 8573.46 14820.1 18771.2 15825.22 100.0 190.2 177.0 123.6 84.30
1 2 0 0 5 6
INTERPRETATION

The analysis of trend percentage income statement of SHANYA for the

year 2003-2008 reveals that the overall income of the company is in a increasing
trend during the period of study. The expenses were in a decreasing trend for the
first three years and it is on the increasing trend for the last two years because of
the variation in the administration, selling and other expenses. The overall
profitability for the company was a fluctuating one because of the fluctuation in
the provisions and expenses incurred by the company during the period of study.

50
 CHART NO: 3.13

Trend Percentage Income Statement of Sales Structure

Sales Structure
120000 103363.97

100000 86624.7
72866.25 74822.2
80000 63477.62

60000

40000

20000

0
2004 2005 2006 2007 2008
Sales Structure

51
 Table 3.14
TREND PERCENTAGE BELANCE SHEET OF SHANYA FOR THE YEAR ENDED 2003-
20082005
Year Percentage
Particulars
2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Application of
funds
12037.92 12332.39 12291.99 12026.98 11395.59 100.00 102.45 99.67 97.93 94.75
Fixed assets
103.43 103.43 103.27 289.83 89.53 100.00 100.00 99.84 280.64 30.89
Investments
34132.37 33379.12 35923.37 40878.46 48970.86 100.00 97.79 107.62 113.79 119.80
Net current assets
2285.90 2492.77 955.03 179.21 --- 100.00 --- 133.74 122.37 103.96
Miscellaneous
expenditure --- 3046.18 4073.95 4985.19 5182.79 100.00 109.05 38.12 18.76 ---

Deferred tax assets

Total 48559.62 51353.89 53347.61 58359.66 65638.77 100.00 105.75 103.88 109.40 112.47

Sources of funds

Share capital 2447.60 2447.60 2447.60 2447.60 2447.60 100.00 100.00 100.00 100.00 100.00

Reserves & surplus 35856.03 42248.45 45589.10 50511.80 57821.34 100.00 117.83 107.91 110.80 114.47

Secured loans 5000.00 5002.80 5000.00 5000.00 5000.00 100.00 100.05 99.94 100.00 100.00

Unsecured loans 5255.99 1655.04 310.91 400.26

369.83 100.00 31.49 18.78 128.74 92.40
52
Total 48559.62 51353.89 53347.61 58359.66 65638.77 100.00 105.75 103.88 109.40 112.47
INTERPRETATION

The analysis of trend percentage balance sheet of SHANYA for the year
2003-2008 reveals that the balance sheet of the company is high during the
period of study with some variations. The fixed assets have been decreased
throughout the study period. The investment was high in the year 2006-2007 and
low in the year 2007-2008 and it is constant in the other years due to the
company’s financial policy. The company has a strict eye on the borrowed funds
in the means of unsecured loans which is low throughout the 5 years except
2006-2007.

53
 CHART NO: 3.14

Trend Percentage Balance Sheet of Fixed Assets

Fixed Assets
12332.39 12291.99
12400
12200 12037.92 12026.98
12000
11800
11600 11395.59

11400
11200
11000
10800
2004 2005 2006 2007 2008
Fixed Assets

54
FINDINGS

The analysis of various reports of SHANYA for the last 5 years from 2003-
2004 to 2007-2008 and the analysis of their financial statements have been
attempted in the preceding chapter.

The condensed findings of the study are presented below:

 In the comparative income statement, the total income had been greater
throughout the study period because of the increased sales made by the
company.

 The net profit after tax is on the diminishing side because of the increase
in the expenses and provisions made for tax.

 In the comparative balance sheet, the net current assets had been
fluctuating and diminished in the year 2005.This indicates that the current
assets of the company were maintained properly.

 The reserves and surplus were maintained by the company has slight
fluctuations but it is in a increasing trend during the study period.


55
 In the common-size income statement, the total income of the company is
on an increasing side and the expenses are fluctuating during the study
period. This is due to increase in the quantity of sales.

 Under the common-size balance sheet, the fixed assets show a

decreasing trend in all the years and the long term liabilities remains
constant during the study period.


 The net current assets had been fluctuating during the study period, it
shows an increasing trend (2005-2008).it shows the company has
adequate working capital.

 The trend percentage had been increasing throughout the period of study
except 2005-2006. This indicates the increase in sales.

 The trend percentage on profit before tax shows the diminishing trend in
the year 2006-2007 and 2007-2008 and in all subsequent years it has
been increased. This shows proper controls on sales.

56
SUGGESTIONS

The management of SHANYA may take the following steps to improve its
financial position in the future years. The following suggestions which have been
made to improve the financial position of the company.

 The fixed assets of the company has decreased, it has to be

increased.

 The administration and selling expenses has increased, it has to be

decreased to increase the net profit of the company.

 The company has to take care of optimum level of working capital

in case of emergency.

 The interest which was paid to outsider’s fund can be minimized.

 The company must try to decrease stock and debentures and

increase the share capital and reserves and surplus.

57
CONCLUSION

In present scenario the government is not in favour of public sector

companies, this is due to continuous loss making units, labour problems and
management incapabilities. Many of the public sector units have failed due to
various reasons. But SHANYA is one of the best profit making public sector
enterprises.

Based on the analysis made with the financial statement of SHANYA from
2003-2004 to 2007-2008, the financial position of SHANYA, the profitability,
solvency and the liquidity position of SHANYA during the study period is
appreciable. Hence the overall performance of SHANYA is remarkably good.

58
BIBLIOGRAPHY

BOOKS

AUTHOR’S NAME BOOK’S NAME

S.NO
C.R.KOTHARI SECOND
1 RESEARCH METHODOLOGY
EDITION 1990
2 HAMPJON JOHN J FINANCIAL DECISION MAKING

KENNETH MIOIELY AND

3 BUSINESS FINANCE
RONALD BURNS

I.M.PANDEY NINTH
4 FINANCIAL MANAGEMENT
EDITION 2004

5 GANESAN MANAGEMENT ACCOUNTING

WEBSITES

1 WWW.YAHOOFINANCE.COM

2 WWW.SHANYAMKNG.COM

59
60