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Data Analysis And Interpretation
Introduction :
Research analysis is based on data collected from the managing director of ESPL and employees over there. A detailed and systematic analysis was done. The main aim of the report are outlined in the following section by drawing charts, graphs, and the entry report object is covered in the following sections.
First, the information’s collected from the managing director of ESPL and employees over there, -collected information was classified into different groups.
Secondly, it is put in the form the tables analysis was done and interpretation was drawn on the basis of tabulated data.
Most of the analysis is done on the basis of percentages method; most of the analysis is represented graphically in the form of bar charts.
The study is about the inventory management-practices. ESPL uses 62 components of manufacture finished goods, so there maintain proper inventory system and good relationship with the suppliers of raw materials, such relationship avoids the lead time of raw materials. This ESPL buys the raw materials in credit basis the payments are made through the banks; this avoids the huge amount of working capital invested in the inventories.
They follow JUST-IN-TIME (JIT) manufacturing system, which means producing the product after the order, is placed from the customers. JIT system helps the firm to reduce the cost of manufacturing and inventory cost in both fronts.
To reduce procurement cost, JIT makes a stable relationship with the vendors. Whenever the material approaches the reorder level, the vendors automatically ships the material so that it reaches the organization exactly when it is required. Thus, the inventory level is maintained at very low levels, this reduces the inventory holding cost.
This system helped the ESPL to invest fewer amounts in the inventory. the investments in inventories constitute the most significant part of current assets. These current assets are the components of the firm’s working capital, thus it is very essential to proper control and management of inventories. The purpose of inventory management is to ensure availability of materials in sufficient quality as and when required and also to minimize the total cost i.e., indirect cost and direct cost and direct cost associated with holding of inventories. The need for working capital due to the time gap between production and realization of cash from the sale of inventory there is an operating cycle involved in the sale and realization and production; production and sales; and realization of cash. For this purpose we need working capital.
FINISHED GOODSOTHER EXPENSES
WORKING CAPITAL
CASH/BANK
RAWMATERIAL
WORK-IN-PROGRESS
The fallowing flow chart explain the operation cycle in ESPL.
ANALYSIS:
The above chart clearly explain how ESPL, carrying there operating cycle. The firm most sales are made on credit basis, where the firm has to wait for the realization of cash from the debtor to whom the goods are sold. After the cash has been realized it is invested in the raw materials and some money for other purpose. The raw materials purchased on the credit basis that has been paid through the bank. The ESPL maintained
DEBTORS
(receivables)
the reorder level of inventory, which depicts when the raw materials ordered to be placed with the suppliers.
1. FALLOWING TABLE SHOWS THE INVENTORIES IN DIFFERENT YEARS.
years Opening stock
( in Rs )
Closing Stock
( in Rs )
2010-11 30,27,823 49,22,085
2011-12 49,22,085 64,68,607
2012-13 64,68,607 91,61,768
2013-14 91,61,768 73,44,285
ANALYSIS:
According to the above table in the year 2010-11 the opening stock of the company is 30,27,823 and the closing stock is 49,22,085. stock has increased which may be due to the purchase of more raw material during the year and the sales of the company may not also be good or other wise company might be planning to maintain some stock for its future needs. In the year 2011-12 the opening stock of the company is 49,22,085 and the closing stock is 64,68,607, the stock of the company has increased compared to the previous year due to the same reasons which was exposed earlier. In the year 2012-13 the opening stock of the company is 64,68,607 and the closing stock is 91,61,768, where the stock has increased but in the year 2013-14 the opening stock of the company is 91,61,768 but the closing stock has gone down to 73,44,285 which might be due to the huge sales made by the company.
2. FOLLOEING TABLE SHOWS THE SALES ANALYSIS FOR FOUR YEAR:
2008-09 2009-10 2010-11 2011-12
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
9000000
10000000
1.Graph Showing Opening & Closing StockOpening Closing
Stock Value in Rs
ANALYSIS:
The sales turnover during the year 2010-11, was amounting to Rs 7,52,00,216. In the year 2011-12 the sales turnover of the company is 8,01,27,085 which is more compared to its previous year. In the year 2012-13 the sales of the company is Rs 12,85,10,173 which was increased more than 50% compared to it previous year which is a very good thing to the company . in the year 2013-14 the profit is almost 20 cores which is 19,10,04,953 which might be due to the greater demand for its products in the market.
YEARS SALES IN RS
2010-11 7,52,00,216
2011-12 8,01,27,085
2012-13 12,85,10,173
2013-14 19,10,04,953
2010-11 2011-12 2012-13 2013-14
Sales & Turnover
800000 900000 1100000 1800000
100000
300000
500000
700000
900000
1100000
1300000
1500000
1700000
2.Graph Showing Sales & Turnover
Sales & TurnoverSales in Crors
3. FOLLOEING TABLE SHOWS THE CONSUMPTION OF RAW MATERIALS FOR FOUR YEAR:
ANALYSIS
YEARS
RAW-MATERIALS
IN RS
2010-11 4,85,55,018
2011-12 4,85,90,450
2012-13 8,85,02,397
2013-14 6,95,87,516
The raw material consumed by ESPL during the year 2010-11 was Rs 4,85,55,018 and in the year 2011-12 it was Rs 4,85,90,450 there was hardly any change in the consumption of raw material compared to the previous year. In the year 2012-13 the raw material consumed by the company was Rs 8,85,02,397 which has almost doubled compared due to the previous year which may be due to the increase in the production and indeed the sales in the year 2013-14 the consumption of raw material has gone down to Rs 6,95,87,516 precisely which might be due to the lack of sales and indeed the production of the company.
4. FOLLOEING TABLE SHOWS THE INVENTORY EFFECT ON WORKING CAPITAL:
2010-11 2011-12 2012-13 2013-14
Consup-tion of Raw Mate-rials
4500000 4600000 9000000 6500000
500000
1500000
2500000
3500000
4500000
5500000
6500000
7500000
8500000
3.Consuption of Raw Materials
Consuption of Raw Materials
Amount in Crores
years
WORKING CAPITAL
Closing Stock
( in Rs )
2010-11 1,17,92,600 49,22,085
2011-12 1,34,38,906 64,68,607
2012-13 1,12,85,308
91,61,768
2013-14 2,20,06,050 73,44,285
ANALYSIS
The above table furnishes how the inventory effects the working capital of the firm the above table we can understand that when the inventory is more the working capital is high because the working capital has been invested in Inventories in the year 2010-11 closing stock was Rs 49,22,085 and the working capital was Rs 1,17,92,600 where the working capital is more compared to the inventories. Which to maintain the day to day expenses of the ESPL in the year 2011-12 the closing stock of the company was Rs 64,68,607 and the working capital was Rs 1,34,38,906 which may be due to the investment in the stock of the company. In the year 2012-13 the closing stock was Rs
91,61,768 and the working capital was Rs 1,12,85,308 which is more compared to stock of the company. Which may be due to the more investment in the inventories of the company. In the year 2013-14 inventories of the company was Rs 73,44,285 and the working capital was 2,20,06,050. Here the company has invested normal in the inventories. Which may be due to the company might be planning to retain more stock for its future needs.
2010-11 2011-12 2012-13 2013-140
200000400000600000800000
10000001200000140000016000001800000
4.Graph Showing Required Working Cap-ital
Working Capital
Capital in Rs
FOLLOEING TABLE SHOWS THE PROFIT ANALYSIS FOR LAST FOUR YEARS
ANALYSIS
YEARS
PROFIT IN RS
2010-11 63,223
2011-12 4,60,840
2012-13 20,51,204
2013-14 9,01,524
The above table shows the net profit after tax during the year 2008-2009. The firm has earned a net profit of Rs 63,223 because of the good management policy maintained by the firm. In the year 2011-12 the profit of the firm is Rs 4,60,840 which is very high under these circumstances. The profit has increased in many fold compared to the previous year. In the year 2012-13 the profit of the firm has crossed 20 lakhs, which is Rs20,51,204 which is a very great thing because there are hardly a few competes in the world which could grow like that within the few year after its promotion, and the profit has increased five time compared to its previous year, Which is a good thing to the company. In the year 2013-14 the firms profit has gone down to Rs 9,01,524 which may be due to the decrease in the production, rejection of steel casting and the cost of the plant & machinery would be quite high.
2010-11 2011-12 2012-13 2013-140
200000
400000
600000
800000
1000000
1200000
5.Graph Showing Year of Profit
Year Profit
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