Professional Documents
Culture Documents
Dr. Shaveta Gupta SUBMITTED TO: SUBMITTED BY: Ankita Badyal Roll No. 1172345
Hero Cycles is a product of this philosophy. The philosophy that instills commitment, team work and foresight. Heros colossal journey started before Independence. The four Munjal brothers, hailing from a small town called Kamalia, now in Pakistan, are the men who are behind the mission. Brotherhood apart, what knit the men together was the wealth of will, integrity, ambition & determination. In the year 1944, they decided to start a business of bicycle spare parts in Amritsar. Its is modest beginning and the next 3 years saw the business grow rapidly. But the dark clouds of partition eclipsed their plans of the future. With renewed vigor and optimism, the operational base was shifted to Ludhiana.
Find out gray areas for improvement. Understand companys position over time. Estimate the managers contribution to the company. Get an idea of overall performance of the company.
To study the financial position of the company (total assts & liabilities) by comparing the balance sheet of the year ending 2009, 2010 and 2011. To study the overall profitability of the company. To analyze whether company is able to meet its current obligation with the help of Current assets or it borrows additional loan. To scrutinize the liquidity position of the company. To analyze the solvency position of the company. To study & analyze cash flow statement. To determine the efficiency with which assets are managed.
Basically project study is usually based on a research, which gives a concrete answer to a problem. This research may be Problem Solving or Problem Oriented. Both types of research are usually known as Applied Research. Marketing is a form of Applied Research which proceeds with a certain problem, specifies alternative solutions and the possible outcomes of each alternative. It may be further named as Decisional Research. The Marketing Research Methodology involves a number of interrelated activities, which overlap and do not rigidly
It is only a study of interim reports. As financial statements are prepared on the basis of going concern; it does not give the exact position.
The analysis is only a mean not an end in itself. The analysis has to make interpretations and draw its own conclusion.
Time was not sufficient to study the financial position of company.
DATA ANALYSIS
The comparative financial statements are statements of the financial position at different period of time. The elements of financial position are shown in a comparative form so as to give an idea of financial position at two or more periods. From practical point of view, generally, two financial statements (balance sheet and income statement) are prepared in comparative form for financial analysis purpose. Not only the comparison of the figure of two periods but also be relationship between balance sheet and income statement may show Absolute figures (rupee amounts) Changes in absolute figures (increase or decrease in absolute figures) Absolute data in term of percentages Increase or decrease in terms of percentages
The comparative balance sheet analysis is the study of the trend of the same items, groups of items and computed items in two or more balance sheets of the same business enterprise on different dates. The changes can be observed by comparison of the balance sheet at the beginning and at the end of a period and changes can help in forming an opinion about the progress of an enterprise.
The comparative balance sheet has two columns for the data of original balance sheets. A third column is used to show increase in figures. The fourth column may be added for giving percentages of increases or
The comparative income statement gives an idea of a business over a period of time. The changes in absolute data in money values and percentages can be determined to analyze the profitability of the business. It has also four columns. First two columns give figures of various items for two years. Third and fourth columns are used to show increase or decrease in figures in absolute amounts and percentages respectively.
Particulars Assets Fixed Assets Investments Deferred Tax Assets (Net) Current Assets, Loans & Advances - Inventories - Sundry Debtors
2008 Increase/Decrease %age 1868618197 4643913422 57796461 -153103696 143849985 -8.19 3.10
106244996 183.83
777581277 2406661773
1106936341 1968290674
-329355064 438371099
-29.75 22.27
- Cash & Bank balance - Loans & Advances Total Assets Liabilities Shareholders Funds
Loan Funds Current Liabilities & Provisions - Liabilities - Provisions Total Liabilities
152820715 1163110437
151600603 851293187
11167493567 10648448885
6526360604 2415142595 1736638728 161268726 5992951800 2538217041 1942587980 174692064
10839410653 10648448885
457780835
9270793939 5364231022 1732223697 1978589143 195750077 9270793939
851293187
10648448885 5992951800 2538217041 1942587980 174692064 10648448885
+393512352
+1377654946 +628720778 +805993344 -36001163 -21058013 +1377654946
+85.96
+14.86 +11.72 +46.53 -1.82 -10.76 +14.86
Particulars INCOME Sales Other Income Gross Profit LESS : Expenditure (Material Consumed, Manufacturing Expenses, Personnel Expenses, Administrative Expenses, Financial Expenses, Selling Expenses, Depreciation) Profit for the year before tax Less : Taxes (Wealth Tax, Taxation, Fringe Benefit Tax and Deferred Tax) Profit after tax
2011
2010
Increase/ Decrease
%age
14343464316
12799820955
1543643361
12.06
Particulars
Increase/Decr %age ease Net Sales 13308705116 12850038969 -458666147 -3.45 Less: Cost of Goods Sold (Opening 11590074348 11256550930 -333523418 -2.88 stock + Raw material consumed + Manufacturing Exp.+ Wages + Packing Exp.- Closing stock) Gross Profit 1718630768 1593488039 -125142729 -7.28
2009
2010
Less: Operating expenses ( Administration expenses, financial expenses, selling expenses, depreciation, repairs, personnel expenses) Operating Profit/Loss
Add: Other Income Less: Non operating expenses Net profit before tax Less: Tax provision for wealth tax, fringe benefit tax, taxation & deferred tax Net profit after tax
1275908067 1411863170
+135955103
+10.65
1025585736 662917622
(Rs. In lakhs)
Particulars
2011
2010 Increase/Decrease
%age
10289.5 7722.67
2566.81
33.24
Net Cash Flow Operating Activity Net Cash used in Investing Activity Net Cash used in Financing Activity Net Inc./Dec. in Cash & Equivalent Cash & Cash Equivalent at the begin of the year Cash & Cash Equivalent at the end of the year
2747.5
-1241.6
3989.13
4781.84 -10053 -1282.5 1294.66 12.2
-321.28
-134.31 -164.90 -99.06 584.89 0.80
1528.21 1516.01
(Rs. In lakhs)
Particulars
Profit Before Tax Net Cash Flow Operating Activity Net Cash used in Investing Activity Net Cash used in Financing Activity Net Inc./Dec. in Cash & Equivalent Cash & Cash Equivalent at the begin of the year Cash & Cash Equivalent at the end of the year
2009
12113.28 2996.85 -3143.35
2010
7722.67 -1241.63 -3560.35
Increase/Decrease
-4390.61 -4238.48 -417
%age
-35.59 -141.41 -13.27
-326.97
- 473.47 694.82 221.35
6096.64
1294.66 221.35 1516.01
+6423.61
+1768.13 -473.47 +1294.66
970.61
373.44 -68.19 584.89
A question arises as to the definition of FUND. It means Funds may mean change in cash only. Funds may mean change in working capital (the difference between current assets and current liabilities) only. Funds may mean change in financial resources, arising from changes in working capital items and from financing and investing activities of the enterprise, which may involve only non-current items. The fund flow statement analyses only the causes of changes in the firms working capital position. The cash flow statement is prepared to analyze changes in the flow of cash only. These statements fail to consider the changes in the firms total financial resources. They do not reveal some significant items that do not affect the firms cash or working
Particulars Current Assets - Inventories - Sundry Debtors - Cash & Bank Balances - Loans & Advances (A) Current Liabilities - Liabilities - Provision
2011
2010 Effects on Working Capital Increase Decrease 329355064 438371099 1220112 311817250
(B)
Net Working Capital (A-B) Net increase in working Capital Total
1897907454 2117280044
2602266748 1960840761 641425987 970781051 641425987 970781051
2602266748 2602266748
Particulars Current Assets - Inventories - Sundry Debtors - Cash & Bank Balances - Loans & Advances (A) Current Liabilities - Liabilities - Provision (B) Net Working Capital (A-B) Net increase in working Capital Total
2009
2010
805661034 1106936341 2228592486 1968290674 22134657 151600603 457780835 3514169012 851293187 4078120805
621010969 881312781
1960840761 1960840761
2009 2250727143
2010 2119891277
2011 2559482488
Current liabilities
Liquid Ratio
1978589143
1.14
1942587980
1.09
1736638728
1.47
2009 13308705116
2010 12850038969
2011 14901978247
1339829792
1960840761
6.55
2602266748
5.72
Capital 9.93
2009
13308705116
2010
12850038969
2011
14901978247
805661034 16.51
1106936341 11.60
777581277 19.16
Year No. of days in a year Debtor Turnover Ratio Average collection period
2009 5364231022
2010 5992951800
2011 6526360604
Total Assets
Equity Ratio
5407510423
99.20
5946739002
100.77
6215688703
104.99
2009 1893341411
2010 1868618197
2011 1715514501
Shareholder funds
5364231022
5992951800
31.18
6526360604
26.28
2009 1025585736
2010 662917622
2011 535810970
Net sales
Net Profit Ratio
13308705116
7.71
12850038969
5.15
14901978247
3.59
2009 1211327797
2010 772266814
2011 1028948888
Total investment
Return on Investment
3843437861
31.52
4643913422
16.63
4787763407
21.49
In this project report it has been found that sales have been decreased as compared to previous year and assets have been increased which leads to low gross profit and net profit of the company. The inventory has been increased. There is decrease in profit as compared to previous year. Instead the company is also diverting its funds in investments. There is decrease in sale as compared to previous year and increase in inventory as compared to previous year which is due to unplanned purchasing which needs to be controlled. Expenses have increased a lot so a detail note must be given to know the reason of such increase.
The Company is enjoying a good current position. It should take steps to further improve its position by repositioning the composition of current assets as large amount has been block in debtors and inventories. Period of credit sale should be reduced so that utilization of blocked funds with debtors can be properly And timely utilized. Inventory control should be on JIT basis so that stock of material as well as wastage of funds can be reduced. Expenses have increased a lot so detail note must be given to know the reason of such increase.
In the present study to the investigator point of view, it can be said that there is scope for more improvement even there is continuous improvement process on true spirit and to the tone of the KAIZEN approach. As investigator points of view, there are some of the findings based on the whole study and put forward the few suggestions relevant thereto. These however based on the description made in previous chapters. The company is not adopting the uniform credit policy even the company has a credit policy. The Company should strictly follow the guidelines of its credit policy so that the funds from the customers be recovered in time The company should negotiate with bank on the interest rate on its working capital requirement so that the financial expenses or liability towards bank can be reduced.
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