Avon Cycles Ltd

Industrial Trainingat

Avon Cycles Limited

Under Guidance Of:Dr. P. P. Singh

Presented By:Neha Jain94972238289

About Avon Cycles Limited

Business Type Exporter/ Importer/ Manufacturer

Year of Establishment 1951

Year of Commencement 1952

Company Branches Ludhiana, Chandigarh

Managing Director Sh. Onkar Singh Pahwa

Export Turnover About Rs. 100Crores (20% of turnover)

Annual Turnover Rs. 500Crores

Capacity to Produce 5000 Cycles per day

BankersPunjab National Bank, State Bank of India,

CITI Bank, HDFC Bank Limited, HSBC Bank

Company Profile

Vision:

Quality at Affordable Price with Technological

Innovation and Investment in Human Capital

Products:

Bicycles

o Roadster for Gents and Ladies

o Mountain

o City

o BMX

o Kids

Exercisers

Bicycle Parts, wide range

Electric Bicycles

Marketing

Business Strategy

Expansion Plans

Charity

Aspects of Avon Cycles Limited

Global Presence

Functioning of Departments

Electronic Data Processing

Drawing and Development Department

Inspection of Incoming Raw Material and Parts

Publicity Department

Personnel Department

Tool Room and Maintenance Department

Marketing Department

Accounts Department

Taxation Department

Production Planning and Control Department

Quality Management System

Quality Certificates

Ratio Analysis

Current Ratio = Current Assets Current Liabilities

Particulars 2006-07 2007-08 2008-09

Current Assets 1,641,865,983 1,560,706,676 1,523,525,703

Current Liabilities

622,475,713 840,357,896 689,656,719

Current Ratio 2.64 1.86 2.21

Table 2.1

Quick Ratio = Quick Assets Current Liabilities

Particulars 2006-07 2007-08 2008-09

Quick Assets 1,375,241,698 1,304,802,873 1,282,268,128

Current Liabilities

622,475,713 840,357,896 689,656,719

Quick Ratio 2.21 1.55 1.86

Table 2.2

Absolute Liquid = Absolute Liquid AssetsRatio Current Liabilities

Particulars 2006-07 2007-08 2008-09

Absolute Liquid Assets 34,166,920 64,610,902 174,724,242

Current Liabilities 622,475,713 840,357,896 689,656,719

Absolute Liquid Ratio 0.05 0.08 0.25

Table 2.3

Stock Turnover = Cost of Goods SoldRatio Average Inventory

Particulars 2006-07 2007-08 2008-09

COGS 436,142,374 388,281,130 496,041,031

Average Inventory 117,122,075 840,357,896 689,656,719

Stock Turnover Ratio

(in times)3.72 2.63 2.99

Stock Conversion

Period (in months)3.22 4.56 4.01

Table 2.4

Debtor Turnover = Net Credit Annual SalesRatio Average Trade Debtors

Particulars 2006-07 2007-08 2008-09

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Average Debtors 669,317,554.50 773,047,057 740,883,286

Debtor Turnover

Ratio (in times)4.34 4.16 5.6

Average Collection

Period (in months)2.77 2.88 2.14

Table 2.5

Creditor Turnover = Net Credit Annual Purchases Ratio Average Trade Creditors

Particulars 2006-07 2007-08 2008-09

Purchases176,514,210

175,500,672

200,779,763

Average Creditors343,282,406.50

501,238,233.50

521,249,794

Creditor Turnover Ratio

(in times)0.51 0.35 0.39

Creditor Payment Period

(in months)23.36 34.29 31.17

Table 2.6

Working capital = SalesTurnover Ratio Average working Capital

Particulars 2006-07 2007-08 2008-09

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Average Working

Capital946,899,716.50 875,696,095 782,935,452

Working Capital

Turnover Ratio3.07 3.67 5.3

Table 2.7

Fixed Asset = SalesTurnover Ratio Net Fixed Assets

Particulars 2006-07 2007-08 2008-09

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Net Fixed

Assets 194,536,779 384,994,329 659,488,577

Fixed Asset

Turnover Ratio3.07 8.36 6.3

Table 2.8

Capital Turnover = SalesRatio Capital

Employed

Particulars 2006-07 2007-08 2008-09

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Capital Employed 1,377,180,059 1,466,797,789 1,782,358,488

Capital Turnover

Ratio 2.11 2.19 2.33

Table 2.9

Debt Equity = Outsiders FundsRatio Shareholders’ Funds

Particulars 2006-07 2007-08 2008-09

Outsiders Funds 365,237,755 313,195,516 395,117,338

Shareholders’ Funds

1,007,312,157 1,105,875,990 1,285,326,819

Absolute liquid Ratio

0.36 0.28 0.31

Table 2.10

Ratio of Fixed Asset = Fixed Assetto Funded Debt Funded Debt

Particulars 2006-07 2007-08 2008-09

Fixed Funds 194,536,779 384,994,329 659,488,577

Funded Debt 118,133,466 118,133,466 195,197,664

Ratio of Fixed Asset

to Funded Debt1.65 3.26 3.38

Table 2.11

Financial = Earnings before Interest and Tax (EBIT)Leverage EBIT – (Interest and Preference Dividend)

Particulars 2006-07 2007-08 2008-09

EBIT 210,649,142 269,878,682 397,872,707

Interest 18,823,416 34,963,006 46,585,380

Preference Dividend 0 0 0

Financial Leverage 1.1 1.15 1.13

Table 2.12

Ratio of Reserves to = ReservesEquity Capital Equity Share Capital

Particulars 2006-07 2007-08 2008-09

Reserves 998,347,737 1,096,911,570 1,276,362,399

Equity Share Capital 8,964,420 8,964,420 8,964,420

Ratio of Reserves to

Equity Share Capital111.37 122.36 142.38

Table 2.13

Gross Profit = Gross Profit * 100

Net Sales

Particulars 2006-07 2007-08 2008-09

Gross Profit 2,466,945,599 2,829,285,663 3,656,043,876

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Gross Profit

Ratio (%)

84.98 87.93 88.05

Table 2.14

Net Profit = Net Profit after Tax * 100Ratio Net Sales

Particulars 2006-07 2007-08 2008-09

Net Profit 134,707,316 156,328,540 217,464,279

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Net Profit Ratio

(%)4.64 4.86 5.24

Table 2.15

Operating = Operating Cost * 100Ratio Net Sales

Particulars 2006-07 2007-08 2008-09

Operating Cost 893,571,550 873,321,953 1,156,759,584

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Operating Ratio

(%)30.78 27.14 27.86

Table 2.15

Operating Profit = Operating Profit * 100Ratio Net Sales

Particulars 2006-07 2007-08 2008-09

Operating Profit

2,009,516,423 2,344,244,840 2,995,325,323

Sales 2,903,087,973 3,217,566,793 4,152,084,907

Gross Profit

Ratio (%) 69.22 72.86 72.14

Table 2.17

Return on Shareholders’ = Net Profit (after interest & tax) * 100Investment Shareholders’ Funds

Particulars 2006-07 2007-08 2008-09

Net Profit 134,707,316 156,328,540 217,464,279

Shareholders’ Funds

1,007,312,157 1,105,875,990 1,285,326,819

Return on

Shareholders’

Investment (%)

13.37 14.14 16.92

Table 2.18

E.P.S. = Net Profit after Tax – Preference Dividend Number of Equity Shares

Particulars 2006-07 2007-08 2008-09

Net Profit after Tax 134,707,316 156,328,540 217,464,279

Preference Dividend 0 0 0

Number of Equity

Shares896,442 896,442 896,442

E.P.S. 150.27 174.39 242.59

Table 2.19

Trend Analysis

Trend of Sales

Figure 2.1

Trend of Net Profit

Figure 2.2

Trend of Earning Per Share (E.P.S.)

Figure 2.3

TITLE:

Hurdles faced by Exporters of

Ludhiana under Bicycle Industry

Objectives

To know the problems faced by exporters in cycle

industry.

To know the satisfaction level of exporters for the

support provided by government.

Need of the Study

Problems faced by exporters of Ludhiana under

bicycle industry.

Satisfaction level of organizations from

• Government

• ITPO

• Shipping Companies

Limitations of the Study

Time is the major constraint while doing this

research project, as it may have effected the

inference drawn in the study.

All the firms in bicycle industry in Ludhiana

could not be surveyed, which could effect the

result.

Research Methodology

Research Design

Descriptive Research Design.

Data Collection

Primary Data – through questionnaires comprising 16

questions.

Population

Exporters of bicycle/ bicycle parts in Ludhiana.

Sampling Frame

Exporters of bicycle/ bicycle parts in Ludhiana.

Sampling Unit

Any individual organization which is exporting bicycle/ bicycle

parts in Ludhiana.

Sample Size

30

Sampling Technique

Convenience Sampling

Data Analysis &

Interpretation

Number of years from which the company is into exports of bicycle/ bicycle parts.

N = 30

Figure 4.1

N = 30

Figure 4.2

Continents to which the company exports their bicycle/ bicycle parts.

Continent to which the export is maximum.

N = 30

Figure 4.3

Any problem in the execution of exports is faced or not.

N = 30

Figure 4.4

N = 30

Exchange rate fluctuations effect the cash flow cycle.

1 2 3 4 4.2 5Figure 4.5

Rating Number of Responses

Strongly disagree 1

Moderately disagree 0

Neither agree nor disagree 3

Moderately agree 14

Strongly agree 12

Mean 4.2Table 4.4

CENVAT is refunded by government on time.

N = 30Rating Number of Responses

Strongly disagree 3



Moderately agree 0

Strongly agree 0

Mean 2.27Table 4.5

1 2 2.27 3 4 5Figure 4.6

Documents are cleared by government on time.

N = 30Rating Number of Responses

Strongly disagree 3



Moderately agree 8

Strongly agree 0

Mean 2.83Table 4.6

1 2 2.83 3 4 5Figure 4.7

Availability of port is optimum.

N = 30 Rating Number of Responses

Strongly disagree 5



Moderately agree 7

Strongly agree 1

Mean 2.57Table 4.7

1 2 2.57 3 4 5Figure 4.8

Non-availability of main port in Ludhiana leads to problems for the organization.


Strongly disagree 0



Moderately agree 14

Strongly agree 7

Mean 3.93Table 4.8

1 2 3 3.93 4 5 Figure 4.9

Indian Cycle Industry needs technological advancement.


Strongly disagree 3



Moderately agree 12

Strongly agree 11

Mean 3.87Table 4.9

1 2 3 3.87 4 5Figure 4.10

India Trade Promotion Organization is working satisfactorily.


Strongly disagree 4



Moderately agree 6

Strongly agree 2

Mean 3Table 4.10

1 2 3 4 5Figure 4.11

Government support provided to Cycle Industry is optimum.


Strongly disagree 10



Moderately agree 4

Strongly agree 0

Mean 2.23Table 4.11

Figure 4.121 2 2.23 3 4 5

Labor required is easily available in sufficient number.





Moderately agree 2

Strongly agree 1

Mean 2Table 4.12

1 2 3 4 5 Figure 4.13

Language is a barrier in international trade.


Strongly disagree 4



Moderately agree 3

Strongly agree 1

Mean 2.6Table 4.13

1 2 2.6 3 4 5 Figure 4.14

Services provided by shipping companies are satisfactory.


Strongly disagree 2



Moderately agree 11

Strongly agree 0

Mean 2.93Table 4.14

1 2 2.93 3 4 5Figure 4.15

Infrastructure available to Indian Cycle Industry is optimum.





Moderately agree 3

Strongly agree 0

Mean 2.1Table 4.15

1 2 2.1 3 4 5 Figure 4.16

Findings

• Exports of bicycle/ bicycle parts are mainly to Africa and less to

Europe and North America.

• Exporters face problem in execution of exports only in the country,

Uganda.

• Indian bicycle industry needs technological advancement.

• The government is not providing optimum support to the bicycle

industry.

• Labor is not available in sufficient number.

• Shipping lines do not provide satisfactory services.

• Infrastructure provided to Indian bicycle industry is insufficient.

• Clearance of goods takes time.

• Container is not available at optimum time.

Cont..

Suggestions

• Government should invest in more in research and development for the

bicycle industry.

• Exporters should invest in technological tools, and come at par to

compete with China.

• Shipping companies should provide better and timely services to the

exporters.

• Proper infrastructure should be provided to the industry.

• CENVAT should be refunded by the government on time.

• Indian Trade Promotion Organization should organize more of trade

fairs and exhibitions.

Conclusion