Chapter 1

CONTENTS

COMPANY PROFILE02-15 THEORETICAL ASPECT 16-20 PRACTICAL ASPECT 21-29 RESEARCH METHODOLOGY 30 DATA ANALYSIS & GRAPHICAL 31-48PRESENTATION FINDINGS 49 CONCLUSION 50 SUGGESTION 51 BIBLIOGRAPHY52 QUESTIONNAIRE 40-42

COMPANY PROFILEOUR VISIONTO BE AMONGST THE MOST ADMIRED COMPANIES IN INDIA COMMITED TO EXCELLENCE.

OUR MISSION BE A CUSTOMER OBSESSED COMPANY NO.1 TYRE BRAND IN INDIA DELIVER ENHANCED VALUE TO ALL STAKEHOLDERS MOST PROFITABLE TYRE COMPANY IN INDIA ENCHANCE GLOBAL PRESENCE THROUGH ACQUISITION MOTIVATED AND COMMITTED TEAM DEVELOPMENT FOR HIGH PERFORMANCE ORGANIZATION

JK ORGANISATION - A CENTURY OF TRUST

Innovation and passion to perform have always been the driving forces at J K Organization.

JK Organization, is one of the leading Private Sector Groups in India, was founded over 100 years ago - it's been a century of multi-business, multi-product and multi-location business operation.

CUSTOMER SATISFACTION - OUR CREDO

Customer Satisfaction has always been our prime focus. We are indeed proud of our highly experienced and professional team for winning the trust of customers and building strong relationships with them.

Our 115 company owned stocking points serve over 4000 dealers across the country.We have set up 130 JK Tyre Steel Wheels - a unique concept in car tyre retailing which provides value added services like wheel balancing, alignment and tyre care to customers.

Our Truck Radial Care Centers offer after-sales service for Truck/Bus Radials, which operate on 365 days / 24 hours basis. A large number of such centers have been set up along all major National Highways.

JK Tyre has been among the top two tyre companies in respect of Customer Satisfaction, as per JK Power Asia Pacific Study, for many years.First Indian tyre company to introduce All Steel Truck & Bus Radials in India in 1999Pioneered Radial technology in India by introducing passenger radials in 1977First Indian tyre company to be recognized as 'SUPERBRAND' by Global Advertising ProfessionalsR & D - TECHNOLOGY OUR DRIVING FORCEWe have always been pushing the limits of possibilities. Our research centers have been our nerve centers for extensive research and development. These are:

Mr. Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) - Jaykaygram, Kankroli (Rajasthan) and Faridabad (Haryana) Dr. Raghupati Singhania Center of Excellence for Tyre and Vehicle Mechanics - Chennai (Tamil Nadu) FUTURE PLANS

India is fast emerging as a global automobile hub particularly for small cars. It offers immense opportunities for JK Tyre to grow its business both organically and inorganically.

We have been constantly exploring ways of increasing our presence in different world markets, through alliances and acquisitions in tyre and related business. In all our Endeavours, our core focus is on customer delight. Enlarging the customer base, providing them with better quality of services and more value added products, will continue to be the key areas of our thrust.

OUR FIRSTS - LEADING THE WAYBACKGROUND AND INCEPTION OF THE COMPANY1933First in India to manufacture calico prints- {Juggilal Kamlapat cottons spinning and weaving mills company, Kanpur.}

1940First in India to manufacture steel bailing Hoops for jute and cotton and to make the country self sufficient by meeting the entire demand- J.K Iron and Steel Co. Ltd., Kanpur.

1944First in India to produce Aluminum Virgin Metal for Indian Bauxite-Aluminum Corporation of India Ltd., Jaykayanagar.

1949First in India to manufacture Engineering files- J.K. Engineers files Bombay.

1959First in India to set up a continuous process Rayon plant.

1960First in India to set up a Hydraulically operated Cane Crushing Mill for Kandsari Sugar Plant and completed 100 ton plant.

1961First in world to set up a plant for production of Hydrosulphite of soda by Sodium Amalagam process- J.K. Chemicals Ltd., Bombay.

1962First in India to produce Nylon-6 with its own polymerized raw material- J.K. Synthetics Ltd., Kota.

1965First to produce sodium Sulphoxylate Formaldehyde [Rangolite C of Formosul] in India- J.K. Chemicals Ltd., Bombay.

1968First to manufacture TV sets in India- J.K. Electronics, Kanpur.

1976First in India to produce steel belted Radial tyres for passenger car, trucks and buses- J.K. Tyre plant, Kankroli.

1980First in the world to make steel belted radial tyres for 3 wheelers.

1984First in India to produce white cement through dry process.

1985First in India to produce cathonic Dye able Polyester Fiber.

1989First in India to produce magnetic tapes with cobalt technology.

1991Banmore tyre plant {BTP} set up with the capacity of 5.7 lacks tyres per annum.

1992R&D centre setup at HASTERI.

1994Indias first T-rated tyre launched Banmore Tyre Plant {BTP} Crossed 100 TPD.

1995Mercedes Benz launched on JK STEEL RADIALS first tyre manufacturer in the world to get ISO 9001.

1996Indias first dual contact high tractions steel radial- aqua sonic launched. {Introduce steel wheels}.

1998First tyre manufacturer in the world to get QS 9000. Awarded CAPEXILS highest export award for 1997-98.

1999Synergy with VTL in procurement, marketing and production flexibility.Completion of states of the art modernizations of truck radialsJ.K. Tyres ranked 16th largest tyre company in the worldISO- 14001 accreditation for environment and safety.

2000J.K. introduced national Go- carting championships.

2001J.K. industries received FOCUS LAC EXPORT award for the year 1999-2000.Commendation certification of CII ND National exam. Go- carting championships held.

1.3 J K GROUP DIVERSIFICATION

JK ORGANISATIONJ.K. Organization, founded over 100 years ago, is an eminent industrial group in India. The Group has multi-business, multi-product and multi-location operations

JK PAPER LTD.JK Paper Limited is one of the leading manufacturers of reading and writing paper

JK LAKSHMI CEMENT LTD.JK Lakshmi Cement Limited is a well respected name in the cement industry in India

FENNER (I) LTD.Fenner (I) Limited is a leading manufacturer of Industrial and Automotive Belts, Oil Seals, Power Transmission Accessories and Textile Yarn

UMANG DAIRIES LTD.The Creme de la creme of dairy foods

JK AGRI-GENETICS LTD.At JK Agri-genetics limited, concentrates on Research and Development, production, processing and marketing of hybrid seeds.

JK SUGAR LTD.The company's principle activity is to manufacture Sugar. However, the company currently operates in two segments. Power and Sugar

JK RISK MANAGERS AND INSURANCE BROKERS LTD.Services rendered to various clients for all facets of Insurance both life & non-life.

CLINIRX RESEARCH PRIVATE LTD.Full Service Contract Research Organization (CRO)

JK Tyres Plants Mysore plant- 1 {VTP}-Karnataka Mysore plant- 2 {VTP Radial}-Karnataka Kankroli -Rajasthan Banmore-Madhya Pradesh

COMPANY HISTORYJK ORGANISATION

JK Organisation owes its name to Late Lala Juggilal Singhania, a dynamic personality, with a broad vision. Inspired by the cause of the Swadeshi movement of Mahatma Gandhi, and driven by the zeal to set up an indian enterprise, Late Lala Kamlapat Singhania founded J.K. Organisation in the 19th century ushering in a new industrial era in India.

The name JK Organisation, which today is one of the leading Private Sector Groups in India, was founded over 100 years ago. For J.K. Organisation it's been a century of multi-business, multi-product and multi-location business operation. The companies in the Group have a diverse portfolio, including Automotive Tyres & Tubes, Paper & Pulp, Cement, V-Belts, Oil Seals, Power Transmission Systems, Hybrid Seeds, Woolen Textiles, Readymade Apparels, Sugar, Food & Dairy Products, Cosmetics, etc.

1 | Page

VARIOUS DIMENSIONS:

JK SEEDS JK SUGAR JK PAPER LTD JK LAKSHMI CEMENT UMANG DAIRIES CliniRX RESEARCH FENNER(INDIA) Ltd.

JK ORGANISATION AT A GLANCE:-

YEAR EVENTS 1951 - The Comp. was incorporated as a private limited Comp. in West Bengal in 14th February, 1951. Until 31st March 1970, the Comp. was engaged in the managing agency business. Thereafter, the Comp. decided to undertake manufacturing activities and obtained a letter of intent in February 1972 for manufacture of automobile of & tubes.

The letter of intent was converted into an industrial license in February 1974 for manufacture of 4 lakh nos. each automobile tyre & tubes per annum. The Comp. was converted into a public limited Comp. on 1st April 1974. The manufacturing project was promoted by Straw Products Ltd & J.K. Synthetics Ltd.

The Comp. entered into technical collaboration with General Tire International Co., U.S.A., [a subsidiary of General Tire & Rubber Co., U.S.A.s] for technical services for a period of 5 years & sales agreement for supply of technical know-how, engineering & documentation for operational facilities [for a period of 8 years from 23.8.73s].

Under the collaboration agreement, the Comp. has the right to use on its products the wording 'Made in collaboration with General Tire International Co., USA'.

YEAR EVENTS 1982 - The company technical collaboration agreement with General Tire International Co., was renewed for a further period of 5 years.

YEAR EVENTS 1987 - The overall working resulted in substantial profits despite a 51-days strike as well as go-slow from 14th October. The strike had since then been resolved & amicable settlement was reached. Efforts were on to launch a new pattern in steel belted radial tyre.

YEAR EVENTS 1988 - New steel radial tyres for Maruti Gypsy & Tata mobile were introduced. The Comp. proposed to incur an expenditure of Rs 300 lakhs for installation of latest & sophisticated R&D equipment.

YEAR EVENTS 1989 - Several new patterns & sizes of tyre were introduced including a semi-lug Nylon Truck tyre, all of which were well received in the market. 1991 - Handeep Investment, Ltd., Hidrive Finance Ltd., Panchanan Investment Ltd., & Radial Finance Ltd., J. K. International Ltd., Shivdham Properties Ltd., & J. K. Asia Pacific, Ltd., are subsidiaries of Company.

YEAR EVENTS 1992 The J.K. International division expanded its activities by opening its office in Moscow besides starting Company's subsidiaries in U.K. and Honkong. The radial tyre for tractors & business launched in the previous year were well received.

YEAR EVENTS 1993 - New radial tyre `Brute' & `Ultima' were introduced. The Comp. was in the process of developing steel belted radial tyre for prestigious cars in the Mercedes Benz, Peugeot, Daewoo race & Opel Astra. A new pattern developed for bus and trucks `PE-T8' was well received in the market.

YEAR EVENTS 1994 - The Comp. maintained its pace of growth, despite steep rise in raw material & input costs & competition. The Company effected an all round cost reduction & attained higher capacity utilization at both the tyre plants at Jaykaygram and Banmore.

The T-rated Ultima tyre launched for new generation cars found its acceptance in DCM Daewoo `Ceilo'. Also J.K. Steel radial was chosen for Mercedes Benz India. - The Comp. undertook to develop steel radials for GM `Astra'. PAL `Peugekot' FIAT's, `UNO' & M and M `Ford'.

- The Comp. launched a premium truck tyre `Jet Trak' - 39 which was introduced to meet the need of the heavy load market. The new tractor rear tyre `SONA' was well received in the market.

YEAR EVENTS 1996 - During this period, a new Car tyre 'Jet Drive XS', the widest nylon car tyre for Maruti 800 was launched. Along with new semi-lug & heavy duty lug tyre for trucks, a new lug tyre for super heavy load applications 'Jet Trak 39' was also introduced. In the Radial category, 'Ultima XR Radial', a terrain tyre was introduced. All these products were well received in the market.

Both the tyre plants operated to full capacity. In line with JK tyre, the radials unit introduced the dual contact high traction & high performance Aquasonic steel radial car tyre. The unit also developed India first & only H-rated ultima Xs' especially for Mercedes - Benz Cars.

YEAR EVENTS 2000 - The Comp. proposes to reduce its debt by Rs 125 crore in the current fiscal from the current level of Rs 635 crore by way of loan repayment.

The Comp. & Indian Oil Corporation have entered into a marketing alliance for installing digital air pressure gauges and setting up sales & services outlets at IOC petrol stations throughout the country.

YEAR EVENTS 2001 - Raghupati Singhania managing director of J. K. Industries has been appointed the 19th Chairman of Automotive Tyre Manufacturers Association, the representative body of tyre industry in India.

YEAR EVENTS 2002- J. K. Industries Ltd has informed BSE that CRISIL has assigned a P1+ rating to the Commercial Paper programme of company.

YEAR EVENTS 2003 - J. K. Industries Ltd [JKIs] has a new Marketing Director in Mr. Ajay Kapila. Before joining JKI, Mr Kapila was Senior Vice-President [Sales & Marketings] at Kinetic Engineering limited He was also Director on board & operational head of Kinetic direct selling arm - Kinetic Marketing Services Ltd.

Completes its comprehensive restructuring exercise of businesses that leads to its emergence as a pure automotive tyre company. Along with the de-merger of its non-tyre business, Sugar & Agri Seeds, into separate companies namely J. K. Sugar Ltd & J. K. Agri-Genetics Ltd, JKI also completes the merger of Vikrant Tyre Ltd with itself.

J. K. Industries delists from Jaipur Stock Exchange divested its wholly-owned subsidiary called J. K. Drugs & Pharmaceuticals Ltd to TEVA Pharmaceuticals of Israel.

YEAR EVENTS 2004 -J. K. Industries Ltd has informed that its securities are delisted from Delhi Stock Exchange Association Ltd [DSEs] w.e.f. January 29, 2004.

YEAR EVENTS 2007 - J. K. Industries Ltd has informed that the name of Comp. has been changed from J. K. Industries Ltd' to 'J. K. Tyre and Industries Ltd' w.e.f. April 02, 2007.

Comp. name has been changed from J. K. Industries Ltd to J. K. Tyre and Industries Ltd.

YEAR EVENTS 2008 - The Comp. has issued rights in the ratio of 1:3 at a premium of Rs.75 per Share.

THEORETICAL ASPECT

INTRODUCTION OF RATIO ANALYSIS

There are various methods or techniques used in analyzing financial statements such as comparative statements, trend analysis, common size statements, schedule of changes in working capital, funds flow and cash flow analysis, cost-volume-profit analysis and ratio analysis. The ratio analysis is one of the most powerful tools of financial analysis. It is the process of establishing and interpreting various ratios (quantitative relationship between figures and group figures). It is with the help of ratios that the financial statements can be analyzed more clearly and decision made from such analysis.

MEANING OF RATIO:A ratio is a simple arithmetic expression of relationship of one to other. It may be defined as the indicated quotient of two mathematical expressions. According to Accountants Handbook by Wixon, Kell and Bedford, a ratio is an expression of the quantitative relationship between two numbers.According to Myers, Ratio analysis is a study of relationship among the various financial factors in a business.

FINANCIAL RATIO ANALYSIS:

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as the indicated quotient of two mathematical expressions and as the relationship between two or more things. In financial analysis a ratio is used as a benchmark for evaluating the financial position and performance of a firm. The absolute accounting figures reported in the financial statement do not provide a meaningful understand of the performance and financial position of a firm. An accounting figure conveys meaning when it is related to some other relevant information.The relation between two accounting figures, expressed mathematically is known as a financial ratio (or simply as a ratio) ratio help to summarize large quantities of financial data and to make qualitative judgment about the firms financial performance. The point to note is that a ratio reflecting a quantitative relationship helps to form a qualitative judgment.

NATURE OF RATIO ANALYSIS

Standards of comparisonA single ratio in itself does not indicate favorable or unfavorable condition. It should be compared with some standards. Standard of comparison may consist of. Past ratio i.e. ratio calculated from the financial statement of the some firm. Competitors ratios, i.e. ratios of same selected firms, especially the most progressive and successful competitor, at the same point in time. Industry ratios i.e. ratios or the industry to which the firm belongs and Projected ratios, i.e. ratios developed using the projected or Performa, financial statements of the same firm.

There are four types of ratios to be calculated to know the status of the firm.

They are,

1. Liquidity ratio

2. Leverage ratio

3. Activity ratio

4. Profitability ratioI. Liquidity ratio

Liquidity ratios measure the ability of the form to meet its current obligation. In fact, analysis of liquidity needs the preparation of cash budgets and cash and fund flow statement, but liquidity ratios by establishing a relationship between cash and other current assets to currents obligations, provide a quick measure of liquidity. A firm ensures that it does not suffer from lack of liquidity, and also that it does not have excess liquidity, therefore it is necessary to strike a proper balance between high liquidity and lack of liquidity.

The most common ratios indicate the extent of liquidity or lack of it is: Current ratio Quick ratio Absolute liquidity ratio

II.LEVERAGE RATIOS

Leverage ratios are calculated t analyze the long-term financial position of the firm. These indicate mix of funds provided by owners and lenders. As a general rule, there should be an appropriate mix be debt and owners equity in financing the firms assets. The process of magnifying the shareholders return through the use of debt is called financial gearing or trading on equity. Leverage ratios calculated to measure the financial risk and firms ability of using debt to share holders advantages.

Interest coverage ratio

Capital equity ratio

III.ACTIVITY (OR) TURNOVER RATIOS

The turnover ratios indicate the efficiency with which the capital employed is rotated in the business. The ratios are employed to evaluate the efficiency with which the firm manages and utilizes its assets to indicate the speed with which assets are being converted on turned over into sales. A proper balance sales and generally reflects that assets are managed well.

Debtors turnover ratio. Total assets turnover ratio. Fixed assets turnover ratio. Current assets turnover ratio.

IV.PROFITABILITY RATIO

Profitability is an indication of the efficiency with which the operations of the business are carried on. Bankers, financial institutions and other creditors look at the profitability ratios as an indicator whether or not the firm earns substantially more than it pays interest for the use of borrowed finds and whether the ultimate repayment of their debt appears reasonably certain. Owners are interested to know the profitability as it indicates the return, which they can get their investments.

Gross profit ratio Net profit ratio Operating profit ratio Operating ratio Return on investment ratio Return on equity EPS DPS Pay outOBJECTIVES

To know, whether the company is able to pay debt promptly or not. To study the current financial position of the company. To know the ability of the firm to meet fixed interest and the cost and repayment schedules associated with the long term borrowings. To know about the general profitability of the firm in relation to the sales. To know about the overall profitability of the firm in relation to its investment. To find ability of the company in utilizing of its assets. To find companies long term solvency and survival.

PRACTICAL ASPECT

1. Current ratio:

This ratio relates current assets to current liabilities. The current ratio indicates the ability of the organization to meet its current obligations. It measures short-term solvency of the concern.

The current ratio is calculated by dividing current assets by current liabilities.

Current assetsCurrent ratio= Current liabilities

yearsCurrent assetsCurrent liabilitiesCurrent ratio

2004335.21126.202.66:1

2005363.31172.532.11:1

2006525.04398.061.32:1

2007984638.121.54:1

20081488892.61.66:1

2.Interest coverage:-

The interest coverage ratio or the times-interest-earned is one of the most conventional coverage ratios used to test the firms debt-servicing capacity.it can be calculated by dividing EBIT with interest

EBITInterest coverage= INTEREST

yearsEBIT(in.Rs.Cr)INTEREST(in.Rs.Cr)Interest coverage ratio

2004132.599.9213.37

2005125.8911.8510.62

2006283.6410.1228.03

2007127.5228.094.54

2008441.3228.3015.59

3.Capital equity ratio:-

This is the ratio which expressing the basic relationship between debt and equity. Calculating the ratio of Net assets to Net worth can find this ratio.

Capital employedCapital equity ratio = Net worth

Capital employed = Total debt + Net worth

yearsCapital employed (in.Rs.Cr)Net worth(in.Rs.Cr)Capital equity ratio

2004435.34435.341.00

2005482.82482.830.99

2006597.86597.861.00

2007930.78878.121.06

20081323.401228.401.08

4. Debtors turnover ratio:-

Debtors turnover ratio can be calculated by dividing total sales by dividing debtors.

SalesDebtors turn over = Debtors

yearsSalesDebtorsDebtors turnover ratio

2004711.50276.212.58times

2005922.34217.424.24times

20061197.14412.722.90times

20072753.22792.023.48times

20083604.71057.403.41times

5. Total assets turnover ratio:-

This ratio shows the firms ability in ngenerating sales from all financial resources committed ton total assets.Sales Total assets turnover=Total assets

yearssalesTotal assetsTotal assets turnover ratio

2004711.50435.341.63

2005922.34482.821.91

20061197.14597.862.00

20072753.22930.782.96

20083604.71323.402.72

6.Fixed assets turnover ratio:-

Fixed assets turnover ratio can be calculated by dividing of sales with net fixed assets.

Sales Fixed assets turn over ratio= Net fixed assets

Years salesNet fixed assetsFixed assets turnover ratio

2004711.50133.245.34

2005922.34170.055.42

20061197.14156.797.64

20072753.22247.0311.15

20083604.7290.912.39

7.Curent assets turnover ratio:-

Current assets turnover ratio can be calculated by dividing of sales with net current assets.

SalesCurrent assets turnover ratio= Net current assets

YearssalesNet current assetsCurrent assets turnover ratio

2004711.50209.013.40

2005922.34190.794.83

20061197.14126.999.42

20072753.22345.897.96

20083604.7595.406.05

8. Gross profit ratio:-This ratio expresses relationship between gross profit and net sales. It relates the efficiency with which management produces each unit of product. It indicates the degree to which the selling price of goods per unit may decline without resulting in losses from operations to the firm.The first profitability ratio n relation to sales is the gross profit ratio it is calculated by dividing the gross profit by sales.

Gross profit

Gross profit ratio =X 100

Sales

Gross profit = Net sales cost of goods soldCost of goods sold = power & fuel + other manufacturing expenses

YearGross Profit(in.Rs.Cr)Sales(in.Rs.Cr)Gross profit Ratio (%)

2004655.38711.5092.11

2005819.88922.3488.89

2006994.861197.1483.10

20072178.532753.2279.12

20082887.403604.780.11

9.Net profit ratio:-

Net profit ratio is obtained when operating expenses; interest and taxes subtracted from the gross profit. Net profit ratio helps in determining efficiency with which affairs of the business are being managed. This ratio is the overall measure of the firms ability to turn each rupee sales into net profit. The ratio is thus an effective measure to check the profitability of business.The net profit margin ratio is measured by dividing profit after tax by sales.

Profit after tax Net profit margin= 100 Net sales

YearsProfit after tax(in.Rs.Cr)

Net Sales(in.Rs.Cr)Net profit margin

200494.13711.5013.23%

200571.09922.347.71%

2006220.121197.1418.39%

200765.232753.222.37%

2008325.703604.79.04%

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It deals with the objective of a research study, the method of defining the research problem, the type of hypothesis formulated, the type of data collected, method used for data collecting and analyzing the data etc. The methodology includes collection of primary and secondary data. TYPE OF RESEARCHDESCRIPTIVE RESEARCH The study follows descriptive research method. Descriptive studies aims at portraying accurately the characteristics of a particular group or situation. Descriptive research is concerned with describing the characteristics of a particular individual or a group. Here the researcher attempts to present the existing facts by collecting data. 5.2 RESEARCH DESIGN A research design is a basis of framework, which provides guidelines for the rest of research process. It is the map of blueprint according to which, the research is to be conducted. The research design specifies the method of study. Research design is prepared after formulating the research problem.5.3 SOURCES OF DATAData are the raw materials in which marketing research works. The task of data collection begins after research problem has been defined and research design chalked out. Data collected are classified into primary data and secondary data PRIMARY DATAQuestionnaires were used for collecting primary data SECONDARY DATASecondary data were collected from the companys annual publications, memorandums of settlements, newspapers, journals, websites, and from library booksSAMPLE SIZE: NIL DATA ANALYSIS & GRAPHICAL PRESENTATION

1. Current ratio:This ratio relates current assets to current liabilities. The current ratio indicates the ability of the organization to meet its current obligations. It measures short-term solvency of the concern.

The current ratio is calculated by dividing current assets by current liabilities.

Current assetsCurrent ratio= Current liabilities

yearsCurrent assetsCurrent liabilitiesCurrent ratio

2004335.21126.202.66:1

2005363.31172.532.11:1

2006525.04398.061.32:1

2007984638.121.54:1

20081488892.61.66:1

Analysis:

The current ratio of the company is decreased from 2004 to 2006 as 2.66:1, 2.11:1, 1.32:1, later it is increased from 2006 to 2008 as 1.32:1, 1.54:1, and 1.66:1.

The graph between Years and Current ratio shows as below

Interpretation:In the year of 2004, 2005 the current ratio of TechJK TYRE maintains the standards of 2:1. After the situation is less than 2:1 it shows the margin of safety for creditors is low and company may be struggling to meet their obligations to pay.

2.Interest coverage:-

The interest coverage ratio or the times-interest-earned is one of the most conventional coverage ratios used to test the firms debt-servicing capacity.it can be calculated by dividing EBIT with interest

EBITInterest coverage= INTEREST

yearsEBIT(in.Rs.Cr)INTEREST(in.Rs.Cr)Interest coverage ratio

2004132.599.9213.37

2005125.8911.8510.62

2006283.6410.1228.03

2007127.5228.094.54

2008441.3228.3015.59

Analysis:- The interest coverage ratio of the firm for 2004 is 13.37 after the year it decraesed to 10.62 in the year 2005. Again it increased to 28.03 later years it decreased to 4.54 & it finally reached to 15.59.

The graph between Years and Interest coverage ratio shows as below

Interpretation:-

The interest coverage ratio of higher ratio is desirable.the analysis indicates that the firm using debt in conservatively.It is higher in the year 2006 i.e.28.03, it is low in the year 2007 i.e.4.54.

3.Capital equity ratio:-

This is the ratio which expressing the basic relationship between debt and equity. Calculating the ratio of Net assets to Net worth can find this ratio.

Capital employedCapital equity ratio = Net worth

Capital employed = Total debt + Net worth

yearsCapital employed (in.Rs.Cr)Net worth(in.Rs.Cr)Capital equity ratio

2004435.34435.341.00

2005482.82482.830.99

2006597.86597.861.00

2007930.78878.121.06

20081323.401228.401.08

Analysis:-Capital equity ratio of the firm for 2004 to 2008 are 1, 0.99, 1, 1.03, 1.08.it is decreased from 2004 to 2005 after the years it raised to 1.08.

The graph between Years and Capital equity ratios ratio shows as below

Iterpretation:-

The funds being contributed by the lenders and owners for each rupee is almost i.e. Rs.1/-.It indicates that the firm maintained the constant capital and equity in the equal proportion change.

4. Debtors turnover ratio:-

Debtors turnover ratio can be calculated by dividing total sales by dividing debtors.

SalesDebtors turn over = Debtors

yearsSalesDebtorsDebtors turnover ratio

2004711.50276.212.58times

2005922.34217.424.24times

20061197.14412.722.90times

20072753.22792.023.48times

20083604.71057.403.41times

Analysis:-Debtors turnover ratio for the years 2004, 2005, 2006, 2007 and 2008 are 2.58, 4.24, 2.90, 3.48 and 3.41 respectively. It is raised to 4.24 for the year 2005 after it decreased to 3.41 in the year 2008.

The graph between Years and Debtors turnover ratios shows as below

Interpretation:-The ratios are more than 2, this indicates the firm is good at the management of credit. It is high in the year 2005 and least in the year 2004. The firm maintained conversion of the debtors funds to sales is sufficiently.

5. Total assets turnover ratio:-

This ratio shows the firms ability in ngenerating sales from all financial resources committed ton total assets. Sales Total assets turnover= Total assets

yearssalesTotal assetsTotal assets turnover ratio

2004711.50435.341.63

2005922.34482.821.91

20061197.14597.862.00

20072753.22930.782.96

20083604.71323.402.72

Analysis:-Total assets turnover ratio of the year 2004 to 2008 are 1.63, 1.91, 2.00, 2.96 and 2.72 times respectively.it is gradually increased year by year.

The graph between Years and total assets turnover ratio shows as below

Interpretaion:-The total assets turnover ratio of the firm are 1.63, 1.91, 2, 2.96 and 2.72 times it implies that the firm generate a sales more than one for one rupee investment on total assets.

6.Fixed assets turnover ratio:-

Fixed assets turnover ratio can be calculated by dividing of sales with net fixed assets.

Sales Fixed assets turn over ratio= Net fixed assetsYears salesNet fixed assetsFixed assets turnover ratio

2004711.50133.245.34

2005922.34170.055.42

20061197.14156.797.64

20072753.22247.0311.15

20083604.7290.912.39

Analysis:-The fixed assets turnover ratios for 2004 to 2008 are 5.34, 5.42, 7.64, 11.15 and 12.39 times respectively. It was increased from 2004 to2008.

The graph between Years and Fixed assets turnover ratio shows as below

Interpretation:-Increasing fixed assets turnover ratio implies that the firms utilization of fixed assets is increased.

7.Curent assets turnover ratio:-

Current assets turnover ratio can be calculated by dividing of sales with net current assets.

SalesCurrent assets turnover ratio= Net current assets

YearssalesNet current assetsCurrent assets turnover ratio

2004711.50209.013.40

2005922.34190.794.83

20061197.14126.999.42

20072753.22345.897.96

20083604.7595.406.05

Analysis:-The current assets turnover ratios for the years from 2004 to 2008 are 3.40, 4.83, 9.42, 7.96 and 6.05 times.

The graph between Years and current assets turnover ratio shows as below

Interpretation:-

It is increased from 2004 to 2006 and then decreased to 6.05 times for the year 2008.it indicates that the usage of current assets is more than its investments.

8. Gross profit ratio:-This ratio expresses relationship between gross profit and net sales. It relates the efficiency with which management produces each unit of product. It indicates the degree to which the selling price of goods per unit may decline without resulting in losses from operations to the firm.The first profitability ratio n relation to sales is the gross profit ratio it is calculated by dividing the gross profit by sales.

Gross profit

Gross profit ratio =X 100

Sales

Gross profit = Net sales cost of goods soldCost of goods sold = power & fuel + other manufacturing expensesYearGross Profit(in.Rs.Cr)Sales(in.Rs.Cr)Gross profit Ratio (%)

2004655.38711.5092.11

2005819.88922.3488.89

2006994.861197.1483.10

20072178.532753.2279.12

20082887.403604.780.11

Analysis:The calculated gross profit ratio indicates that the proportion of gross profit to sales shows decreased figures from year 2004 i.e. 92.11 to79.12 in the year 2007 later year it increased to 80.11

The graph between Years and Gross profit ratio shows as below

Interpretation:

Gross profit ratio of the firm is highest in the year 2004 is 92.11% it indicates that firm got more sales for attaining more profit. Firms performance is good in the year 2008 i.e. 80.11%.

9.Net profit ratio:-

Net profit ratio is obtained when operating expenses; interest and taxes subtracted from the gross profit. Net profit ratio helps in determining efficiency with which affairs of the business are being managed. This ratio is the overall measure of the firms ability to turn each rupee sales into net profit. The ratio is thus an effective measure to check the profitability of business.The net profit margin ratio is measured by dividing profit after tax by sales.

Profit after tax Net profit margin= 100 Net sales

YearsProfit after tax(in.Rs.Cr)

Net Sales(in.Rs.Cr)Net profit margin

200494.13711.5013.23%

200571.09922.347.71%

2006220.121197.1418.39%

200765.232753.222.37%

2008325.703604.79.04%

Analysis:-Net profit margin ratio for the years from 2004 to 2008 are 13.25%, 7.71%, 18.39%, 2.37% and 9.04%.it is highest in the year 2006 i.e. 18.39% and the least in the year 2007 i.e. 2.37%.

The graph between Years and Net profit ratio shows as below

Interpretation:-

Through this ratio overall profitability can be measured after adjusting non-operating income & non-operating expenses. Firm showing best performance in the year 2006.in the year 2008 it is good.

FINDINGS

Firm maintained liquidity ratio indicates that it is in standards in the years 2004 & 2005. In the next years it is below the standards.

Debt of the firm is almost equal to its net worth.

Turnover ratios indicate that the firm is in good at conversion assets to sales.

Current assets turnover is very high when compare to the fixed assets turnover.

Gross profit is high in the years 2004 after the years firm gets fluctuations finally it is in good position.

In the 2004 & 2005 years it is having more operating expenses than to sales it is well for next years. Returns is not in preferable way it is below 25% on average.

Earnings on each share are good condition for the firm.

But the payment to the share holders is below 50%.

CONCLUSION

The companys overall position is at a good position. Particularly the current years position is well due to raise in the profit level from the last year position. It is better for the organization to diversify the funds to different sectors in the present market scenario.Financial Analysis is the process of evaluating businesses and other finance-related entities to determinetheir suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. One of the most common ways of analyzing financial data is to calculate ratios from the data to compareagainst those ofother comparable companies.In Infinancials, financial ratios are categorized according to the financial aspect of the business which the ratio measures: Profitability, Asset Utilization, Capital Structure on a specific tab, Financial Ratios. Financial analysis allows for comparisons between companies, between industries and also between a single company and its industry average or peer group average.

SUGGESTIONS

Although firm maintains sufficient liquidity, it is needed to increase, in order to attain future demand.

Because of being a soft solutions JK TYRE ltd need to raise their turnovers to get good impression on the maintenance.

Firm needed to decrease the operating expenses, in order to sustain in this rescission period.

Returns are of below 25% there is necessary to increase it. By getting more projects it will happens.

Although the earnings on each share is good payment to the share holders is below 50%.it is better to maintain 50% to 75%, it will helps attracting share holders towards invest.

BIBLIOGRAPHY

REFFERED BOOKS FINANCIAL MANAGEMENT - I. M. PANDEY MANAGEMENT ACCOUNTANCY - PILLAI & BAGAVATI MANAGEMENT ACCOUNTING SHARMA & GUPTA

INTERNET SITE www.ercap.org www.wikipedia.com www.nwda.gov.in

Key Financial Ratios of JK Tyre and Industries

Mar '13Mar '12Mar '11Mar '10Mar '09

Investment Valuation Ratios

Face Value10.0010.0010.0010.0010.00

Dividend Per Share3.502.503.003.502.70

Operating Profit Per Share (Rs)118.7068.1281.40117.5092.93

Net Operating Profit Per Share (Rs)1,288.691,375.101,168.60895.561,201.70

Free Reserves Per Share (Rs)--141.64141.79130.0293.27

Bonus in Equity Capital0.090.090.090.090.09

Profitability Ratios

Operating Profit Margin(%)9.214.956.9613.127.73

Profit Before Interest And Tax Margin(%)7.063.154.5510.094.70

Gross Profit Margin(%)7.083.154.5710.144.72

Cash Profit Margin(%)4.691.963.156.872.76

Adjusted Cash Margin(%)4.691.963.156.872.76

Net Profit Margin(%)1.980.191.274.420.38

Adjusted Net Profit Margin(%)1.980.191.274.420.38

Return On Capital Employed(%)13.097.7411.9924.8414.94

Return On Net Worth(%)14.221.648.5723.573.33

Adjusted Return on Net Worth(%)18.391.425.2720.11-2.86

Return on Assets Excluding Revaluations180.70163.32174.07168.88138.97

Return on Assets Including Revaluations180.70163.32174.07168.88138.97

Return on Long Term Funds(%)20.7010.9919.9230.4821.94

Liquidity And Solvency Ratios

Current Ratio0.600.630.640.790.60

Quick Ratio0.840.680.690.610.72

Debt Equity Ratio2.992.501.841.241.91

Long Term Debt Equity Ratio1.521.470.710.830.98

Debt Coverage Ratios

Interest Cover1.881.072.494.171.55

Total Debt to Owners Fund2.992.501.841.241.91

Financial Charges Coverage Ratio2.421.662.043.051.65

Financial Charges Coverage Ratio Post Tax2.061.662.002.691.71

Management Efficiency Ratios

Inventory Turnover Ratio7.419.787.919.1114.03

Debtors Turnover Ratio5.937.147.997.9111.24

Investments Turnover Ratio7.419.787.919.1114.03

Fixed Assets Turnover Ratio1.432.041.761.442.18

Total Assets Turnover Ratio1.792.412.372.382.95

Asset Turnover Ratio1.992.582.682.28--

Average Raw Material Holding--29.8929.1139.1920.71

Average Finished Goods Held--15.5826.6218.6927.88

Number of Days In Working Capital36.027.4128.87-2.1019.00

Profit & Loss Account Ratios

Material Cost Composition74.8774.6177.9363.3870.44

Imported Composition of Raw Materials Consumed37.6433.2228.8434.2133.56

Selling Distribution Cost Composition--3.637.218.037.24

Expenses as Composition of Total Sales16.3410.548.869.8215.24

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit15.9293.2720.0910.2568.08

Dividend Payout Ratio Cash Profit7.709.127.006.027.52

Earning Retention Ratio87.69-7.3267.3587.99179.42

Cash Earning Retention Ratio93.2690.7691.9193.4190.54

AdjustedCash Flow Times8.9115.128.663.388.04

Mar '13Mar '12Mar '11Mar '10Mar '09

Earnings Per Share25.702.6814.9339.814.64

Book Value180.70163.32174.07168.88140.24

35