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