Financial Performance Dora-2016.doc

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Financial Performance

EXECUTIVE SUMMARY

Introduction to Finance

Finance is the study of funds and management. Its general areas are business finance, personal finance, and public finance. It also

deals with the concepts of time, money, risk, and the interrelation between the given factors. It is basically focused on how the money is

spent and budgeted. It is one of the most important aspects in handling business. Finance addresses the methods where in business

entities used their financial resources on a certain period of time. It is the application of a set of techniques used by organizations in

managing their financial affairs. The income and expenditure are emphasized in finance and its differences can easily be indicated.

Financial Management:

Financial management is that managerial activity which is concerned with theplanning and controlling of the firms financial

resources. It was a branch of economics till !"#$, and as a separate discipline, it is of recent origin. %till, it has no unique body of

knowledge of its own, and draws heavily on economics for its theoretical concepts even today.

In general financial management is the effective & efficient utilization of financial resources. It means creating balance among

financial planning, procurement of funds, profit administration & sources of funds.

Meaning of Financial Management:

Financial 'anagement means planning, organizing, directing and controlling the financial activities such as procurement and

utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.

Definitions of financial management:

(ccording to Solomon, )Financial management is concerned with the efficient use of an important economic resource, namely,

capital funds.*

(ccording to ! "! Massie, )Financial management is the operational activity of a business that is responsible for obtaining and

effectively utilizing the funds necessary for efficient operation.*

(ccording to #eston $ %rig&am, )Financial management is an area of financial decision making harmonizing individual

motives & enterprise goals.*

Main features of financial management:

+n the basis of the above definitions, the following are the main characterist ics of the financial management

Anal'tical T&in(ing) -nder financial management financial problems are analyzed and considered. %tudy of trend of actual

figures is made and ratio analysis is done.

Continuous *rocess) previously financial management was required rarely but now the financial manager remains busy

throughout the year.

%asis of Managerial Decisions) (ll managerial decisions relating to finance are taken after considering the report prepared by

the finance manager .The financial management is the base of managerial decisions.

Maintaining %alance +et,een Ris( and *rofita+ilit') arger the risk in the business larger is the expectation of profits.

Financial management maintains balance between the risk and profitability.

Sco-e.Elements:

!. Investment decisions includes investment in fixed assets /called as capital budgeting0. Investments in current assets are also a part

of investment decisions called as working capital decisions.

1. Financial decisions They relate to the raising of finance from various resources which will depend upon decision on type of

source, period of financing, cost of financing and the returns thereby.

2. 3ividend decision The finance manager has to take decision with regards to the net profit distribution.

/+0ecti1es of Financial Management:

The financial management is generally concerned with procurement, allocation and control of financial resources of a concern.

The ob4ectives can be as follows5

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!. To ensure regular and adequate supply of funds to the concern.

1. To ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations

of the shareholders6

2. To ensure optimum funds utilization. +nce the funds are procured, they should be utilized in maximum possible way at least cost.

7. To ensure safety on investment, i.e., funds should be invested in safe ventures so that adequate rate of return can be achieved.

8. There should be sound and fair composition of capital so that a balance is maintained between debt and equity capital.

/%ECTIVES /F T2E STUDY

To study and analyze the financial position of the company through ratio analysis.

To study the liquidity and profitability position of the company.

To suggest the measures if any for improving the financial performance of the company.

To evaluate the performance of 3ora plastics /pvt0 td. by analyzing The liquidity position of the company.

To study the changes and identify the problems in net working 9apital position of the organization from 1$$:!!. To identify

and analysis the relationship between credit sales and 3ebtors and to analyzing the profitability position of the company.

"IMITATI/3S /F T2E STUDY

(vailability of time is a serious constant in the proposed survey, since pro4ect will be completed within a period of :$ days.

The members of financial department are very busy with the audit

;ork, hence they are not be able to spend more for me

In the case of inter firm comparison two firms should have uniform accounting practices.

Inflation makes the comparative study complicated and measuring.

The ratios are calculated from past five years financial statement and these are not indicators of future

The study is based on only on the past records.

The short span of the time provides also one of limitation.

ocke of (vailability of accurate financial information and completed up so of the company may limits so the (nalysis of the

study flu some extent.

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FI3A3CIA" A3A"YSIS

Financial (nalysis refers to the assessment of a business to deal with the planning, budgeting, monitoring, forecasting, and

improving of all financial details within an organization.

Understand4 Identif'4 Anal'5e and Ad0ust

-nderstanding your organizations financial health is a fundamental aspect of responding to todays increasingly stringent

financial reporting requirements. To avoid risks, organizations must quickly

identify ascertain financial ratios and trends across in liabilities and assets

analyze and ad4ust planned and forecasted amounts

act to provide regulatory statements as needed

Financial (nalysis applications built on the'icro %trategy platformmake these activities easier and more efficient.


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Definitions of financial management:

(ccording to Solomon, )Financial management is concerned with the efficient use of an important economic resource, namely,

capital funds.*

(ccording to ! "! Massie, )Financial management is the operational activity of a business that is responsible for obtaining and

effectively utilizing the funds necessary for efficient operation.*

(ccording to #eston $ %rig&am, )Financial management is an area of financial decision making harmonizing individual

motives & enterprise goals.*

Main features of financial management:

+n the basis of the above definitions, the following are the main characterist ics of the financial management

Anal'tical T&in(ing) -nder financial management financial problems are analyzed and considered. %tudy of trend of actual

figures is made and ratio analysis is done.

Continuous *rocess) previously financial management was required rarely but now the financial manager remains busy

throughout the year.

%asis of Managerial Decisions) (ll managerial decisions relating to finance are taken after considering the report prepared by

the finance manager .The financial management is the base of managerial decisions.

Maintaining %alance +et,een Ris( and *rofita+ilit') arger the risk in the business larger is the expectation of profits.

Financial management maintains balance between the risk and profitability.

Sco-e.Elements:

7. Investment decisions includes investment in fixed assets /called as capital budgeting0. Investments in current assets are also a part

of investment decisions called as working capital decisions.

8. Financial decisions They relate to the raising of finance from various resources which will depend upon decision on type of

source, period of financing, cost of financing and the returns thereby.

:. 3ividend decision The finance manager has to take decision with regards to the net profit distribution.

/+0ecti1es of Financial Management:

The financial management is generally concerned with procurement, allocation and control of financial resources of a concern.

The ob4ectives can be as follows5

:. To ensure regular and adequate supply of funds to the concern.

@. To ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations

of the shareholders6

". To ensure optimum funds utilization. +nce the funds are procured, they should be utilized in maximum possible way at least cost.

#. To ensure safety on investment, i.e., funds should be invested in safe ventures so that adequate rate of return can be achieved.

!$. There should be sound and fair composition of capital so that a balance is maintained between debt and equity capital.

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6!7 I3DUSTRY *R/FI"E

2istor'5

Indian plastic industry has made significant achievements in the country ever since it made a promising beginning with the start

of production of polystyrene in !#8@. The industry is growing at a rapid pace and the per capita consumption of plastics in the country

has increased several times as compared to the earlier decade. The chronology of production of polymers is summarized as under

!#8@ =olystyrene

!#8# 3=?

!#:! =A9

!#:" B3=?

!#@" =olypropylene

9urrently, the Indian plastic industry is highly fragmented with an estimate of around 18,$$$ firms and over 7$$,$$$ employees.

The top !$$ players of Indian plastic industry account for 4ust 1$C of the industry turnover.


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=lastics machinery sector 5 present technology levels and demand

Finished products 5 ?xport potential

The ma4or overseas players with base in India

9urrent consumption, pro4ected growth of the Indian plastics industry

>ole of the Indian overnment in promoting 5

!. /1erseas in1estments

7! T&e Indian -lastics industr' in general!

The Indian plastics industry functions with its unique market dynamics, of which, www.plastemart.com has been a successful part.

www.plastemart.com has attempted to address these queries in H%ynopsis of the Indian =lastics Industry 5 !##11$!$H the past !" years

and what the future holds for the overseas investors.

(fter liberalization of the economy in !##1, the overnment of India has been quite supportive of industry in general, taking many steps

over the years for the conducive growth of business. These measures favouring economic growth, are being continuously taken by the

Indian overnment, irrespective of the change in power. The overnment of India is end devouring to achieve 3= growth of more than

@C in the next !$ years. It is quite possible that plastics could grow at !7C, based on historical performance

The =etrochemical 3epartment of the overnment of India is in the process of setting up a development council to promote the

development of downstream sectors in India. This

clearly illustrates that the overnment of India is quite positive and supportive to new investments in India. In fact, many foreign

entrepreneurs have been able to set up !$$C owned companies in India in the plastics processing and machinery industry sectors. Foreign

equity participation in the petrochemical industry has been increased to a 8!C stake /a ma4ority stake0. Bowever, the polymer

manufacturers and other downstream industries are free to set up pro4ects !$$C on their own equity. %ome examples of the international

Com-anies T&at 2a1e Set U- *ro0ects In India /n T&eir /,n Are:

=olymer 'anufacturing


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'oser


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novelties, a range of stationery items like files, folders, mathematical instruments, etc.

;riting Instruments =ens, ball pens, markers, sign pens, refills, etc.

Travel ware 'olded luggage, soft luggage, a range of bags like school bags M ladies handbags, wallets, etc.

eather 9loth M (rtificial eather Floor 9overings Ainyl floor coverings and linoleums

=lastics materials in India

Indiahas witnessed a substantial growth in the consumption of plastics and an increased production of plastic waste. =olyolefins

account for the ma4or share of :$C in the totalplasticsconsumption in India. =ackaging is the ma4or plastics consuming sector, with 71C

of the total consumption, followed by consumer products and the construction industry. The relationship observed between plastic

consumption and the gross domestic product for several countries was used to estimate future plastics consumption /master curve0.

?lasticitys of the individual material growth with respect to 3=were established for the past and for the next three decades estimated

for India thereby assuming a development comparable with that of ;estern ?urope. +n this basis, the total plastics consumption is

pro4ected to grow by a factor of six between 1$$$ and 1$2$. The consumption of various end products is combined with their

corresponding lifetimes to calculate the total waste quantities. The weighted average lifetime of plastics productswas calculated as "

years. Fortyseven percent of the total plastics waste generated is currently recycled in India this is much higher than the share of

recycling in most of the other countries. The recyclingsector alone employs as many people as the plastics processing sector, which

employs about eight times more people than the plastics manufacturing sector. 3ue to the increasing share of longlife products in the

economy, and consequently in the volume of waste generated, the share of recycling will decrease to 28C over the next three decades. The

total waste available for disposal /excluding recycling0 will increase at least !$fold up to the year 1$2$ from its current level of !.2

million tones

6!9 C/M*A3Y *R/FI"E

+ver a decade it came into existence as a group under the lotus feet of ord Aenkateswara in (ndhra =radesh, India. 3ora group

comprises of the following companies by establishing a own successful brand name H3+>(H The name you know for trust.

N 3ora =lastics /p0 td.

N Keshava =lastics

N Keshava Fabrics /p0 td.

N Oagdheesh Food =acks /p0 td.

In !### entered into manufacturing of H3isposable 9ontainersH viz., disposable items 3isposable 9ups and lasses and the

9ompany has celebrated its successful completion of a H3ecadeH recently in Govember 1$$#. ;ith the taste of success, in 1$$1, started

another venture Keshava =lastics, manufacturing of 3isposable %yringes and needles, with patented brand names of H3oraH and H3ora

+neH. In 1$$@ started another new venture, Keshava Fabrics =vt. td., manufacturing of == Gon;oven Fabric 9loth, which is having

multiple applications, and the product has got wide acceptance in the 'arket as one of the reputed brand HKeshava FabricH across %outh

India. In 1$!$ added another venture to the group, Oagdheesh Food =acks =vt td., manufacturing of =% Foam food packaging products

and (luminum food packaging products with patented brand name of HO3 =ackH.

(ll the 9ompanies are laced with all requisite infrastructure facilities, highly motivated supportive staffs and communication

facilities in order to cater to the rigorous requirements of diverse customers. The 9ompanies with the ultimate sense of productivity

provides special techniques to its products to facilitate the user

;e are 3+>( >+-= based in TI>-=(TI, India. ;e are member of Tradekey.com since Govember, 1$$#. +ur business is related to

Industrial 'achinery industry and we specifically deal in 3I%=+%(IG?%. =lease find our product details below5

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http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Polyolefinshttp://en.wikipedia.org/wiki/Plasticshttp://en.wikipedia.org/wiki/Consumption_(economics)http://en.wikipedia.org/wiki/GDPhttp://en.wikipedia.org/wiki/Western_Europehttp://en.wikipedia.org/w/index.php?title=Plastics_products&action=edit&redlink=1http://en.wikipedia.org/wiki/Recyclinghttp://en.wikipedia.org/wiki/Tonnehttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Polyolefinshttp://en.wikipedia.org/wiki/Plasticshttp://en.wikipedia.org/wiki/Consumption_(economics)http://en.wikipedia.org/wiki/GDPhttp://en.wikipedia.org/wiki/Western_Europehttp://en.wikipedia.org/w/index.php?title=Plastics_products&action=edit&redlink=1http://en.wikipedia.org/wiki/Recyclinghttp://en.wikipedia.org/wiki/Tonne


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DIS*/SA%"E SYRI3ES5

The product disposable syringes are available with needle and without needle in various sizes 1 mil, 2 ml, 8 ml, !$ ml, in

ribbon packing and blister packing with different guages from 1! g to 18 g.

/ur Vision:

=roviding world class quality, services and offering most competitive prices to earn customer satisfaction and preferences. To earn

trust and building corporate image of the company by constant growth and transparency to all the stake holders including share holders,

employees, customers, vendors and society as a whole.

Keeping pace with the technological development, training of the employees and benchmarking world class management systems

and there by achieving excellence in corporate governance.

/ur Mission:

=rovide excellent services to our customers in all means

?nsure the timely execution in all our endeavors

earn new strategies to identify niche markets

9reate +pportunities to achieve our highest potentials

%trive hard to enhance our values

=roviding world class quality, services and offering most competitive prices to earn customer satisfaction and preferences. To

earn trust and building corporate image of the company by constant growth and transparency to all the stake holders including share

holders, employees, customers, vendors and society as a whole Keeping pace with the technological development, training of the

employees and benchmarking world class management systems and there by achieving excellence in corporate governance.

*R/DUCT *R/FI"E

The company starts with an initial quantity of 8$,$$$ Kgs, as the production. The company -sed poly propylene as the raw

materials to produce disposable plastic cups. The raw material is imported from >eliance. The company maintains !8 tones inventory in

stores and the production process time is : hours. ( raw material is purchased once in !$ days i.e. 2 times in months. 2C input is loss in

production as process loss. 'onthly turnover of the company is 2$, $$,$$$Mapproximately and !,$$,$$$ sales per day.

The cost of the product depends on size & gauge. The method of price fixation is based on value addition price1$C of value

addition. Aalue addition means difference between inputs cost& cost of sales.

*roduct Ad1antage

The main advantages of this product is use and throw and also very cheap in cost.

The company produces !$ to !8 items based on sizes and gauges. The following are the various types of product

Dora *lastic *roducts

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*roducts

As an /rgani5ation and indi1idual ,e are committed to:

%atisfy customerEs requirement

9ontinual improvement on product, process and quality management systems

+ptimum use of resource

Descri-tion of *roduction *rocess of Single use s'ringes

The raw material used for the production of single use syringes are polypropylene for the barrel and plunger and thermoplastic

elastomer for gasket in form of granules. In the raw material store the granules are filled from the bags in to the containers and from there

they are conveyed to the in4ection molding machine. 3uring the filling into the containers, no dirt gets into the raw material.

Molding:

The plastics raw material is filled into the material hopper of the in4ection molding machines in plasticized by the in4ection units

of the machines. The plasticized material is in4ected under pressure into the closed precision in4ection molds. 3ue to the cooling watersystem linked with the mold, the plasticized material is cooled down again becoming the respective part, such as barrel, plunger, hub and

cap. (t the end of the cooling down time the mold is open hydraulically and the shaped parts are e4ected. The individual in4ection molded

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6;; ml dis tea cu-s6;;86;; 7R"? =6;;89;?

6;; ml dis tea cu-s6;;8@; 18$ml tumbler OK> /!$$P@$0

;ml tea cu-s 6;;86


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parts are filled in to storage containers for approximately 17 hours for further cooling down and shrinking to the definite measurement.

First in first out system is followed.

*rinting and Assem+l':

(fter storage the barrel are taken to the printing machines and plungers to the assembly machines. The barrels are placed onto in

feed conveyer which takes the barrels to printing drums and the ink with the help of calibrated iron roller gets transferred from ink roller

to the syringe

The printed barrel as well as plunger and gasket are taken to the assembly machines and automatically fed in to machines. In this

machine the gasket is pushed into the plunger and assembled plunger pushed into the barrel then after a required size of needle fixed on

the nozzle of syringe. (fter a functional test the assembled syringes separated into good and bad ones are e4ected and collected in

containers.

*ac(ing:

(fter assembly the hypodermic syringes with needle are ribbon packed using a laminated film suitable for thermoforming and

paper which is gas permeable but impermeable for germs. The film and paper on rolls are hanging into the packing machine. In the next

step paper roll gets unwound and conveyed to the printing device, where it gets all necessary data /3ate of 'fd., ot Go., etc.0 from here

with laminate film the syringe on conveyer led to the sealing station. The film is sealed by a heated sealing plate. This sealing is done on

all four sides of every pack. %everal cut marks on paper which permits for the ?thylene +xide gas in pack.

(fter sealing the packages, which are still interconnected are cut, crosswise, then the product leaves the clean room and is now

protected all over against contamination. The packages are then placed into inner boxes the inner boxes are already printed only

indications such as production date, lot no., expiry, etc. are stamped on.

The inner boxes are set into a dispatch carton which is also labeled with required data.

The dispatch boxes are closed and conveyed to sterilization area.

Testing:

(fter sterilization the dispatch boxes are taken to the quarantine store. There the remain under quarantine until the

microbiological controls have proven to be satisfaction. (t the same time residual gas in the products are removed by a good aeration.

The products remain in this store for a fort night, depending on the results of the sterility test. (fter the sterility of the products has been

ascertained they are transferred to the dispatch store for sale

Management -rofile:

Financial %an(s

They had the term loans for %s :$,$$,$$$

State %an( of India4

%ettipalli enigunta >oad,

%ettipalli/=ost0,

Tirupati D 8!@8$:.

Registered office

=lat Go.2$,

Industrial ?state,

>enigunta >oad,

%ettipalli /=ost0,

Tirupathi.

%/ARD /F DIRECT/RS

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'anaging directors 5 T. Kesavulu Gaidu

3irector 5 T. 3oraswami Gaidu

(uditor 5 ?. =alguna Kumar

7! T2E/RETICA" FRAME#/R>

#/R>I3 CA*ITA" MA3AEME3T

I3TR/DUCTI/3

;orking capital may be regarded as the life blood of a business. ;orking capital 'anagement is one of the most important aspects of

Financial 'anagement. It forms a ma4or function of the finance manager and accountant.

DEFI3ITI/3

!. );orking 9apital >epresents the ?xcess of 9urrent (ssets over current iabilities and identify the liquidity position of total enter

prizes 9apital*

#ritten +' As,at&a--a

1. (ccording to smit& )working capital 'anagement is concerned with the problems that arise in attempting to manage the currentassets, current liabilities, and the interrelationship that exists between them*.

MEA3I3:

Geither ;orking 9apital management nor administration of all aspects of working capital, which manage the firms current

assets and current liabilities in such a way that a satisfactory level of working capital is maintained.

?very organization funds are also needed for short term purposes for the purchase of raw materials payment of wages and other

day to day expenses etc, These funds are also known as working capital. 'ainly the organization used working capital day to day

business obligations purposed used. The main goal of working capital is to mange current assets and current liabilities. The following

formula is used calculation of working capital.

Get ;orking 9apital Q 9urrent (ssets 9urrent iabilities

(ccording to gensten+erg Circulatingcapital means current assets of a company that are changed in the ordinary course of

business from one form to another, as for example from cash to inventories, inventories to receivables, receivables into cash*.

I! TY*ES /F #/R>I3 CA*ITA"

There are two types of working capital. They are

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I? /3 T2E %ASIS /F C/3CE*T:

6? ross ,or(ing ca-ital!

7? 3et ,or(ing ca-ital!

6! ross #or(ing Ca-ital

>efers to the firms investment in current assets are the assets, which can be concerned into and within an accounting year /or

operating cycle0 and include cash, shortterm securities, debtors /accounts receivables or book debts0 bills receivable and stock

/inventory0ross working capitals points to the arranging of funds to finance current assets.

7! 3et,or(ing Ca-ital

>efers to the difference between current assets and current liabilities. 9urrents liabilities are those claims of outsiders, which are

expected to nature for payment within accounting years and include creditors /accounts payable0.


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EXAM*"E: )?very firm has to maintain a minimum level of raw materials, workinprogress, finished goods and cash balance. This

minimum level of current assets is called permanent or fixed working capital as this part of capital is permanently blocked in current

assets. (s the business grows, the requirements of permanent working capital also increase due to the increase in current assets.

(mount Temporary w c

+f w c +r

Fluctuating w c

=ermanent w cTime

Gote5 ; 9 where Qworking capital

7? Tem-orar' #or(ing Ca-ital :

3epending upon the changes in production and sales, the need for working capital over and above permanent working capital,

will have in be maintained to support the peak proceeds of sale and investment in receive may also increase during such periods. +n the

other hand, investment in raw material, working in progress and finished goods will fall if the market is slack.

The extra working capital needed to support the changing production and sales activities is called fluctuating, or variable or

temporary working capital. The firm to meet liquidity measurement that will last only temporarily creates temporary working capital.

(mount Temporary w c

+f w c or

Fluctuating w c

Time permanent ; c

II! DETERMI3ATES /F #/R>I3 CA*ITA" /R FACT/RS AFECTI3

The working capital requirement of a firm affected by a number of factors.

The various factors, which affect the working capital requirement of a concern, are as follows5

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I3TER3A" FACT/RS

!! 3ature of %usiness

The working capital requirements of enterprises are basically related to the conduct of business. =ublic utilities have certain

features which have a bearing on their working capital needs. They do not maintain big inventories arid have, therefore, probably the

least requirement of working capital. +n the other hand trading and manufacturing concern required large amount of working capital to

maintain a sufficient amount of cash inventories and book debts.

7! *roduction C'cle

The term production or manufacturing cycle refers to the span between the procurement of raw materials and completion of the

manufacturing process leading to the production of finished goods. In other words, there is a sometime gap before raw materials become

finished goods. Therefore the longer the time span, the larger will be the working capital needed and vice versa.

9! %usiness c'cle

The business fluctuations influence the size of working capital mainly during updated phase when boom conditions prevail, the need

for working capital is likely to cover the lag between increases sales and receipt of cash as well as invest in plant and machinery to meet

the increased demand. The down swing an opposite effect on the level of working capital requirement.

!Credit *olic'

The credit policy relating to sales and purchases also affects the working capital. The credit policy in influences the requirements

of working capital in two ways5

Though credit terms granted by the firm to its customersMbuyers of goods credit terms available to the firm from its creditors. (firm, which more credit sales and cash purchase required high working capital than a firm having more credit purchase and cash sales.

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( concern carrying on activities on a small scale of needs less working capital. +n the other hand a concern undertaking activities

on large scale needs large amount of working capital.

@! ro,t& and E8-ansion of %usiness

The growth and expansion of business also affect the working capital requirement. ;hen there is growth and expansion in the

business of a firm the working capital needs of the firm will also increase.

B! /-erating Efficienc'

The operating efficiency of the management is also important determinant of the level of working capital. ( firm en4oying

operating efficiency can eliminate wastage and use its resources efficiently and thereby reduce its working capital needs considerably.

EXTER3A" FACT/RS

6! %usiness Fluctuations

;orking capital needs of business enterprises are affected sharply by taxation policy of the government. In the event of

regressive taxation policy of the government, as it exists today in India, imposing heavy tax burdens on business enterprises leaves very

little profits for distribution and retention purposes.

III! S/URCES /F #/R>I3 CA*ITA"

(mong the various sources available for financing working capital needs finance manager has to select the best suitable source

depending on working capital need of company

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The need of working capital is increased by raising prices of end products and relative inputs. +n the other hand the government

and monetary authorities play their own role to curd the malice in periods of inflation. The control measures often take the firm of dear

money policy and restriction credit. Financing of additional working capital in such an amusement becomes a real problem to finance

manager of a concerned unit. 9ommercial banks play the most significant role in providing working capital finance, particularly in

Indians context. In view of mounting inflation, the >.


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IV! MET2/DS F/R ESTIMATI3 #/R>I3 CA*ITA" REGUIRME3TS

Three widely used methods for determining working capital requirements of a firm are 5

*ercentage of sales met&od

Regression anal'sis met&od

/-erating c'cle met&od

6! *ercentage of Sales Met&od

In this method, level of working capital requirements is decided on the basis of past experience. The past relationship between

sales and working capital is taken as a base for determining the size of working capital requirements for future. It is, however, presumed

that the relationship between sales and working capital that has existed in the past has been stable. This may be explained with the help

of the following illustration.

=ercentage of sales method is a simple and easily understood method and practically used for ascertaining shortterm changes in

working capital in future. Bowever this method lacks reliability inasmuch as its basic assumption of linear relationship between sales

and working capital does not hold true in all the cases. (s such, this method cannot be recommended for universal application.

7! Regression Anal'sis Met&od

This is a statistical method of determining working capital requirements by establishing the average relationship between sales

and working capital and its various components in the past years. In this regard the method of least squares is employed and the

relationship between sales and working capital is expressed by the equation5

LQ aSbx

The values of a and b is obtained by the solution of simultaneous linear equations given as under5

;here aQfixed component

bQvariable component

xQsales

yQinventory

nQnumber of observation

9! /-erating C'cle A--roac&

+perating cycle refers to the length of time necessary to complete the following cycle of events.

9onversion of cash into inventory.

9onversion of inventory into receivable

9onversion of receivable into cash

If the operating cycle is length than the working capital requirement will be more on the other hands, if the operating cycle is

shorter than the working capital requirement will be less.

(ccording to this approach, size of working capital requirements of a firm is determined by multiplying the duration of the

operating cycle by cost of operations. The duration of the operating cycle may be found with the help of the following formula5

+Q> S ; S F S ( D =

;here, +Q3uration of operating cycle

>Q3uration of raw materials

;Q3uration of workinprocess

FQ3uration of finished goods

(Q3uration of accounts receivable

=Q3uration of accounts payable

Duration of ra, materials

It reflects the number of days for which raw materials remain in inventory before they are issued for production. The following

formula can be used to determine duration of raw materials.

~18~


19/50


(verage stock of raw materials

>Q

=er day consumption of raw materials

Duration of t&e ,or()in)-rocess

It denotes the number of days required in the workinprocess stage. It may be ascertained with the help of the following formula5

(verage workinprocess inventory

;Q

(verage production per day

Duration of finis&ed goods

It refers to the number of days for which finished goods remain in inventory before they are sold. This can be computed by the

following formula

(verage finished goods inventory

FQ

=er day sale of goods

Duration of t&e accounts recei1a+le

It represents the number of days required to collect the accounts receivable. This may be calculated as under5

(verage book debts

(Q

(verage credit sales per day

Duration of accounts -a'a+le

It refers to the number of days for which the suppliers of raw materials offer credit. This may be measured with the help of the

following formula5

(verage trade creditors=Q

(verage credit purchases per day

V! /*ERATI3 CYC"ES

RECEIVA%"ES MA3AEME3T

~19~


20/50


Finished goods sold on credit get converted /from the point of view of the selling firm0 into receivables /book debts0 which

realized generate cash. The average balance in the receivable account would approximately be average daily credit sales multiplied by

average collection period.

/%ECTIVES /F RECEIVA%"E MA3AEME3T

The main ob4ectives of receivable management are5

To obtain the optimum value of sales.

To control the cost of credit and keep it at minimum.

To reduce the average collection period.

AS*ECTS /F RECEIVA%"E MA3AEME3T

3etermining the credit policy.

3etermining the credit terms.

?valuating the credit applications.

3etermining collection policies and methods.

9ontrol and analysis of receivables.

DETERMI3I3 CREDIT */"ICY

The first decision area of receivable management is determining credit policy. In developing an optimum credit policy, the

financial manager should compare the benefits of credit extension with the cost of credit. The ma4or considerations in costs are liquidity

and opportunity cost. The credit policy of a firm provides the frame work to determine.

;hether or not extent to a customer

Bow much credit to extend.

I3TR/DUCTI/3 T/ RATI/ A3A"YSIS

Definition of Ratio Anal'sis

( tool used by individuals to conduct a quantitative analysis of information in a companyEs financial statements. >atios

are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to

4udge the performance of the company. >atio analysis is predominately used by proponents of fundamental analysis.

Ad1antages of Ratios Anal'sis:

>atio analysis is an important and ageold technique of financial analysis. The following are some of the advantages M atios tell the whole story of changes in

the financial condition of the business

1. Facilitates inter)firm com-arison: It provides data for interfirm comparison. >atios highlight the factors associated with

successful and unsuccessful firm. They also reveal strong firms and weak firms, overvalued and undervalued firms .

2. 2el-s in -lanning: It helps in planning and forecasting. >atios can assist management, in its basic functions of forecasting.

=lanning, coordination, control and communications .

7. Ma(es inter)firm com-arison -ossi+le: >atios analysis also makes possible comparison of the performance of different

divisions of the firm. The ratios are helpful in deciding about their efficiency or otherwise in the past and likely performance in

the future.

~20~


21/50


8. 2el- in in1estment decisions: It helps in investment decisions in the case of investors and lending decisions in the case of

bankers etc.

"imitation of Ratio Anal'sis:

>atio analysis is used by almost all the accounts managers for strategic planning and decision making. It also very helpful tool to

know the effect of each item of financial statements by creating relationship with other items. There is big list of benefits of ratio analysis

but it has also some limitations. %o, account managers and other parties who use ratio and its analysis should remember these limitations

when they take any decision.

Follo,ingaremaindra,+ac(sorlimitationsofratioanal'sis:

"imited Use of Single Ratio5

%ometime, we cannot compare our ratios with others. For example, we have started new business and our financial results are not

still normal. (t that time, our profitability ratio will have limited use because there is not any past data of profitability ratios.

"ac( of AdeHuate Standards:

;e could not make standards of all ratios. For example, we cannot tell what is rule of them of our net profit ratio because there

are lots of factors affect it. In the lack of adequate standards of ratios, we cannot give exact comment on the basis of ratio analysis.

In&erent "imitation of Financial Accounting:

>atio analysis is 4ust like simplification of financial accounting data.


22/50


Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used in

iquidity ratios

(sset turnover ratios

Financial leverage ratios

=rofitability ratios

3ividend policy ratios

"iHuidit' Ratios:

iquidity ratios provide information about a firmEs ability to meet its shortterm financial obligations. They are of particular

interest to those extending shortterm credit to the firm. Two frequentlyused liquidity ratios are the current ratio /or working capital

ratio0 and the quick ratio.

The current ratio is the ratio of current assets to current liabilities5

%hortterm creditors prefer a high current ratio since it reduces their risk. %hareholders may prefer a lower current ratio so that

more of the firmEs assets are working to grow the business. Typical values for the current ratio vary by firm and industry. For example,

firms in cyclical industries may maintain a higher current ratio in order to remain solvent during downturns.

Guic( Ratio:

+ne drawback of the current ratio is that inventory may include many items that are difficult to liquidate quickly and that have

uncertain liquidation values. The quick ratio is an alternative measure of liquidity that does not include inventory in the current assets.

The quick ratio is defined as follows5

9urrent (ssets Inventory Uuick >atio Q VVVVVVVVVVVVVVVVVVVVVVVVVVV

9urrent iabilities

The current assets used in the quick ratio are cash, accounts receivable, and notes receivable. These assets essentially are current

assets less inventory. The quick ratio often is referred to as the acid test.

Cas& Ratio:

Finally, the cash ratiois the most conservative liquidity ratio. It excludes all current assets except the most liquid5 cash and cash

equivalents. The cash ratio is defined as follows5

9ashS 'arketable %ecurities

9ash >atio Q

9urrent iabilities

The cash ratio is an indication of the firmEs ability to pay off its current liabilities if for some reason immediate payment were

demanded.

Asset Turno1er Ratios:

(sset turnover ratios indicate of how efficiently the firm utilizes its assets. They sometimes are referred to as efficiency ratios,

asset utilization ratios, or asset management ratios. Two commonly used asset turnover ratios are receivables turnover and inventory

turnover.

>eceivables turnover is an indication of how quickly the firm collects its accounts receivables and is defined as follows5

~22~

9urrent (ssets

9urrent >atioQ VVVVVVVVVVVVVVVVVVVVVV

9urrent iabilities


23/50


(nnual 9redit %ales

>eceivablesQ VVVVVVVVVVVVVVVVVVVVVVVVVVVV

(ccounts >eceivable

The receivables turnover often is reported in terms of the number of days that credit sales remain in accounts receivable before

they are collected. This number is known as the collection period. It is the accounts receivable balance divided by the average daily credit

sales, calculated as follows5

(ccounts >eceivable

(verage 9ollection =eriod Q VVVVVVVVVVVVVVVVVVVVVVVVVVVVVV

(nnual 9redit %ales M 2:8

2:8

(verage 9ollection =eriod Q VVVVVVVVVVVVVVVVVVVVVVVV

>eceivables Turnover

In1entor' Turno1er:

(nother ma4or asset turnover ratio is inventory turnover. It is the cost of goods sold in a time period divided by the average

inventory level during that period5

9ost of goods %old

Inventory Turnover Q VVVVVVVVVVVVVVVVVVVVVVVVVVVV

(verage Inventory

The inventory turnover often is reported as the inventory period, which is the number of days ,ort&of inventory on hand,

calculated by dividing the inventory by the average daily cost of goods sold5

The inventory period also can be written as5

2:8

Inventory =eriod Q VVVVVVVVVVVVVVVVVVVVVVVVV

Inventory Turnover

+ther asset turnover ratios include fixed asset turnover and total asset turnover.

Financial everage >atios5

Financial leverage ratios provide an indication of the longterm solvency of the firm. -nlike liquidity ratios that are concerned

with shortterm assets and liabilities, financial leverage ratios measure the extent to which the firm is using long term debt.

The debt ratiois defined as total debt divided by total assets5

Total 3ebt

3ebt >atio Q VVVVVVVVVVVVVV

Total (ssets

The debt-to-equityratio is total debt divided by total equity5

Total 3ebt

3ebt ?quity >atio Q VVVVVVVVVVVVVVVVV

Total ?quity

3ebt ratios depend on the classification of longterm leases and on the classification of some items as longterm debt or equity.

The times interest earnedratio indicates how well the firmEs earnings can cover the interest payments on its debt. This ratio also is known

as the interest coverageand is calculated as follows5

~23~

(verage Inventory

Inventory =eriod Q VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV

(nnual 9ost of oods %old M 2:8


24/50


?


25/50


Financial performance

?very business needs funds for two purposes, for its establishment and to carry on its day to day operations. ong term funds are

required to create production facilities through purchase of fixed assets such as plant and machinery, land, building, furniture etc.

Investment in these assets represents that part of firm capital, which is blocked on a permanent or fixed basis called fixed capital. Funds

are also needed for short term purposes i.e. for the purchase of raw material, payment of wages and other day to day operations of

business. These funds are known as financial performance. In other words, financial performance refers to that firms capital which is

required for short term assets or current assets. Funds thus invested in current assets keep revolving last and being constantly converted

into cash and this cash flow is again converted into other current assets. Bence it is known as circulating or short term capital.

Gair G.K /!##!0 has studied the productivity aspect of Indian =lastic Industry. This study emphasized that plastic, being a

construction material, occupied a strategic place in the Indian economy. This study has revealed that the industry had an installed

capacity of :$ million tones with a production of 7" million tones. In this study the plastic industry was forecasted to have a capacity

growth of about !$$ million tones. This study has also analyzed the productivity and performance ratios of the plastic industry with a

view to identifying the ma4or problem areas and the prospects for solving them.

(nup (garwal and Gandu O.Gagara4an /!##10 have identified that the influence of family relationship amongst the senior

managers of all equity firms in decisionmaking process and came out with the following findings,!.'anagers off allequity firms have

significantly larger stock holdings rather than mangers of similarsized levered firms in the industry .There is significantly more familyinvolvement in the corporate operations of all equity firms rather than the levered firms,2.'anagerial ownership in all equity firms are

characterized by greater liquidity positions than the levered firms.

3ebasish %ur/!##70, in his study related to working capital management on


26/50


(vailability of the 3ora plastics =vt ltd in the balance sheets 1$!!!1

(vailability of the 3ora plastics =vt ltd in the balance sheets 1$!1!2



3EED F/R T2E STUDY

To evaluate the performance of 3ora plastics /pvt0 td. by analyzing. The liquidity position of the company.

To study the changes and identify the problems in Get ;orking !9apital position of the organization from 1$$"!2.

To identify and analysis the relationship between credit sales debtors and to analyzing the profitability position of the company.

To identify and analysis the relationship between credit sales and debtors.

To ascertain the financial position of the company.

SC/*E /F T2E STUDY

The primary ob4ective of the company is to obtain maximum profit thought the business. The amount of profit largely depends up

on the magnitude of sales. Bowever the sale does not convert into cash instantaneously.

There is always a time gap between the sales and their actual realization in cash is technical termed as operating cycle. (dditional

capital required to have uninterrupted business operations, and the amount will be locked up in the current assets.

>egular availability of advocate working capital is inevitable for sustained business operations, if the proper fund is not provided

for the purpose, the business operations will be effected, and hence this part of finance managed well

/%ECTIVES /F T2E STUDY

To study and analyze the financial position of the company through ratio analysis.

To study the liquidity and profitability position of the company.

To suggest the measures if any for improving the financial performance of the company.

To evaluate the performance of 3ora plastics /pvt0 td. by analyzing the liquidity position of the company.

To study the changes and identify the problems in net working 9apital position of the organization from 1$$"!2. To identify

and analysis the relationship between credit sales and 3ebtors and to analyzing the profitability position of the company.

"IMITATI/3S /F T2E STUDY

(vailability of time is a serious constant in the proposed survey, since pro4ect will be completed within a period of :$ days.

The members of financial department are very busy with the audit

;ork, hence they are not be able to spend more for me

In the case of inter firm comparison two firms should have uniform accounting practices.

Inflation makes the comparative study complicated and measuring.

The ratios are calculated from past five years financial statement and these are not indicators of future

The study is based on only on the past records.

The short span of the time provides also one of limitation.

ocke of (vailability of accurate financial information and completed up so of the company may limits so the (nalysis of the

study flu some extent.

~26~


27/50


! DATA A3A"YSIS A3D I3TER*RETATI/3

SC2EDU"E /F C2A3ES I3 #/R>I3 CA*ITA" 7;6;)7;66

Inter-retation:

The net working capital requirement of

the company during 1$!! has increased than in

the year 1$!$ and the working capital of the

company was recorded >s.",#@,#$8 and it was

been increased to >s.!1,2$,@2: in the year 1$!!.

SC2EDU"E /F C2A3ES I3

#/R>I3 CA*ITA" 7;66)7;67

*articulars As on

96.9.67

a! Current Assets

Inventories 71,7",!:@

%undry 3ebtors 1",:",7:7

9ash &


28/50


SC2EDU"E /F C2A3ES I3 #/R>I3 CA*ITA" 7;67)7;69

Inter-retation:

The net working capital requirement of the company during 1$!2 has increased than in the year 1$!2 and the working capital of

the company was recorded >s.78,77,778 and it was been increased to >s."!,"8,278 in the year 1$!1.

SC2EDU"E /F C2A3ES I3 #/R>I3 CA*ITA" 7;69)7;6

~28~

*articularsAs on

96.9.69

As /n

96.9.67C&ange /F #or(ing Ca-ital

Increase

Rs.)

Decrease

Rs.)

a! Current Assets

Inventories :7,2#,22! 71,7",!:@ 1!,#!,!:7

%undry 3ebtors !@,2!,2$" 1",:",7:7 !!,2@,!8:

9ash &


29/50


Inter-retation5

The net working capital requirement of the company during 1$!7 has increased than in the year 1$!7 and the working capital of the

company was recorded >s."!,"8,278 and it was been increased to >s.#1,#7,##@ in the year 1$!2.

SC2EDU"E /F C2A3ES I3 #/R>I3 CA*ITA" 7;6)7;6s.#8,

:7,##@ and it was been increased to

>s.!1", #1,881 in the year 1$!7.

T&e statement s&o,ing t&e

,or(ing ca-ital from 7;6;)66 to

7;6)6>?GT (%%?T%

9->>?GT >(TI+Q

9->>?GT I(


32/50


!7! GUIC> RATI/:

In a short period a firm should be able to meet all its short term obligations i.e. current liabilities and provisions. 9urrent assets

are those assets which can be converted into cash in the short run or with in one year. 9urrent assets should not only yield sufficient fund

to meet current liabilities as they fall due.

9urrent (ssetsInventory Uuick >atio Q

9urrent liabilities

Ta+le: !7

ra-&: !7

Inter-retation:

Uuick ratio of the 3ora =lastics during the period from 1$!$!8graduly fluctuated.It is the standard norm of !5!.%o the company

has follow up the standard norm.Bence the Uuick ratio is satisfied.

!9! CAS2 RATI/:

It is suggested that it would be useful, for the management if the liquidity measure also takes into account reserve borrowing

power. as the firms real debt paying ability depends not only on cash resources available with it but also on its capacity on its capacity on

borrow from the market at short notice. (bsolute liquid assets include cash in hand and at bank and marketable securities or temporary

investments. This ratio may be expressed as under.

~32~

Years Current Assets)

)In1entor'

Current "ia+ilities Ratios

1$!$1$!! :77"88$ @18#:#$ $.""

1$!!1$!1 @7@2827 @!@@18: !.$7

1$!11$!2 @118@#$ 87@#@@: !.2!

1$!21$!7 ##$2""" :"8$":! !.77

1$!71$!8 !2:7"#@$ #7!@12" !.77


33/50


Cas&

Cas& Ratio J ))))))))))))))))))))))))))))

Current "ia+ilities

Ta+le : !9

raph : !2

Inter-retation:

The above chart shows that 9ash ratio of the 3ora =lastics during the period from 1$!$!8, gradually fluctuated. In the year

1$!1!2is increased of $.2$.In the year of 1$!$!!, 1$!7!8is decreased of $.$7, [email protected] cash ratio is standard norm is !5!. %o the

company has not follow up the standard norm.

!! 3ET#/R>I3 CA*ITA" RATI/:

The difference between 9urrent (ssets and 9urrent iabilities is called Getworking 9apital or Get 9urrent (ssets.

3et #or(ing Ca-ital

3et #or(ing Ca-ital J ))))))))))))))))))))))))))))))))))))))))))

3et Assets

3et #or(ing Ca-ital J Current Assets K Current "ia+ilities

Ta+le: !

Years 3et #or(ing

Ca-ital

3et Assets Ratios

1$!$1$!! !12$@2: !$:#!@1# $.!!

~33~

Years Cas& Current "ia+ilities Ratios

1$!$1$!! 22!$!! @18#:#$ $.$7

1$!!1$!1 !!1#""2 @!@@18: $.!8

1$!11$!2 !::@:"$ 87@#@@: $.2$

1$!21$!7 8!"$"# :"8$":! $.$@

1$!71$!8 !"2!""" #7!@12" $.!#


34/50


1$!!1$!1 7877778 !#@#1:!! $.11

1$!11$!2 "!"8278 1171228" $.2:

1$!21$!7 :"8$":! 11$1!2"# $.2!

1$!71$!8 #7!@12" 18#1$8## $.2:

ra-&!

Inter-retation:

The Getworking capital should be increasing in the year 1$!! & 1$!2.In the next year is decreased in the year of 1$$".%o the

company is trying to decrease the Getworking capital in future also.

I! "EVERAE RATI/S:

II! !

The relationship dis cribs the enders contribution for each >upee of the owners contribution is called 3ebt ?quity >atio.

Total De+t

De+t EHuit' Ratio J )))))))))))))))))))))))))))))))))))))))))))

3et #ort&

Ta+le : !atio.

Sales

3et #or(ing Ca-ital Ratio J ))))))))))))))))))))))))))))))))))))))))

3et Current Assets

Ta+le: !B

Years Sales 3et Current Assets Times

1$!$1$!! 2!87:$@$ !12$@27 18.:2

1$!!1$!1 1#@87$#7 787778 :.88

1$!11$!2 7!:2"$:@ "!"8278 8.$"

1$!21$!7 8$$#!17 :"8$":! @.2!

1$!71$!8 8!8811!8 #7!@12" 8.7@

~36~


37/50


ra-& : !B

Inter-retation:

The above chart shows that ;orking 9apital Turnover >atio of the 3ora =lastics during the period from 1$!$!8 graduallyfluctuated. The ratio sales bases to spend the working capital. Bence in that ratio depended total turnover and current assets and

liabilities bases. The highest value is 18.:2 in the year 1$!$ and lowest value is 8.$" in the year 1$!2.

IV! ASSETS TUR3/VER RATI/S :

!! 3ET ASSETS TUR3/VER RATI/:

( firm may also like to relate Get (ssets to %ales.

Ta+le : !:

Years Sales 3et Assets Times

1$!$1$!! 2!87:$@$ !$:#!@1# 1.#8

1$!!1$!1 1#@87$#7 !#@#1:!! !.8$

1$!11$!2 7!:2"$:@ 1171228" !."8

1$!21$!7 8$$#!17 11$1!2"# 1.1@

1$!71$!8 8!8811!8 18#1$8## !.#"

ra-& : !

~37~

Sales

3et Assets Turno1er Ratio J )))))))))))))))))))))))))))))))))

3et Assets


38/50


Inter-retation:

The above chart shows that Get (ssets Turnover >atio of the 3ora =lastics during the period from 1$!$!8 gradually fluctuated.

Bence in that ratio depended total turnover and current assets and liabilities basis6 The highest value is 1.#8 in the year 1$!$ and lowest

value is !.8$ in the year 1$!!.

! ! T/TA" ASSETS TUR3/VER RATI/ :

Get (ssets Turnover can be computed simply by dividing sales by Total (ssets.

%ales

Total (ssets Turnover >atio Q

Total (ssets

Ta+le: !!

Years Sales Total Assets Times

1$!$1$!! 2!87:$@$ !@#8!7!# !.@8

1$!!1$!1 1#@87$#7 1$!!2@"2 !.7@

1$!11$!2 7!:2"$:@ 1@#$2!27 !.7#

1$!21$!7 8$$#!17 2!8":2": !.8"

1$!71$!8 8!8811!8 2""!2!8! !.21

ra-&:!

~38~


39/50


Inter-retation:

The above chart shows that Total (ssets Turnover >atio of the 3ora =lastics during the period from 1$!$ to 1$!1 gradually

increased after 1$!8 it is decreased why because in the year 1$!8 the turnover is very low on that situation the total assets are also low.

Bence this company not concentrates in that ratio especially in the years 1$!8.

!6;! FIXED ASSETS TUR3/VER RATI/:

Fixed (ssets Turnover >atio can be computed simply by dividing %ales by Fixed (ssets.

Sales

Fi8ed Assets Turno1er Ratio J ))))))))))))))))))))))))))

Fi8ed Assets

Ta+le:!6; :

Years Sales Fi8ed Assets Times

1$!$1$!! 2!87:$@$ #7:$##2 2.22

1$!!1$!1 1#@87$#7 "2#1$"2 2.87

1$!11$!2 7!:2"$:@ !712"$!2 1.#1

1$!21$!7 8$$#!17 !8!@$81" 2.2$

1$!71$!8 8!8811!8 !:8$22:! 2.!1

~39~


40/50


ra-& :!6;

Inter-retation:

The above chart shows that Fixed (ssets Turnover >atio of the 3ora =lastics during the period from 1$!$!8 gradually fluctuated.

(fter 1$$!$ to 1$!! it is increased why because in the year 1$$# the turnover is very high on that situation the total assets are also high.

C/M*ARITIVE I3C/ME STATEME3T /F T2E YEAR 7;6;)7;66

C/M*ARITIVE I3C/ME STATEME3T

/F T2E YEAR 7;66)7;67

*ARTICU"ARS 7;66 7;67 A%S/"UTE

ross Sales 946


41/50


*ARTICU"ARS 7;67 7;69 A%S/"UTE

ross Sales 94964


42/50


/0 3epreciation !8,@#,27# !@,:$,:7! !,"!,1#1

*rofit %efore Interest $ Ta8 4


43/50


1

2

%hare capital

%hare application money

>eserves &surplus

oans funds5

%ecured and unsecured loans

3eferred tax liability

Total

A--lication of funds:

!.fixed assets/gross


44/50


%A"A3CE S2EET AS /3 7;66)67

3UM%ERS *ARTICU"ARS SC2EDU"ES 7;66 7;67

! Sources of funds

1

%hare capital

%hare application money

>eserves &surplus5

oans funds5

%ecured and unsecured loans

3eferred tax liability

Total

A--lication of funds

!.fixed assets/gross


45/50


2

'iscellaneous expenses

!1 87@#@@:

V

@!@@18:

V

T/TA" 77799


46/50


2

a0iabilities

b0provisions


!!

!1

#882#7@

!!$8$

822@#8$

!7!"1:

:"8$":!

V

87@#@@:

V

T/TA" 77;769 77799


47/50


2

d0 +ther assets

ess5 9urrent iabilities & provisions

a0iabilities

b0provisions


#

!$

!!

!1

28@71$7 8"#"!!$

112$#@#$ !:7!8"8"

!12#$2$:

8$117:

#882#7@

!!$8$

#7!@12"

V

:"8$":!

V

T/TA" 7


48/50


2

less depreciation

Get


49/50


The above chart shows that 9ash ratio of the 3ora =lastics during the period from 1$!$!8 , graduly fluctuated. In the year 1$!$

!! is increased of $.2$.In the year of 1$!!!1,1$!2!7 is decreased of $.$7,[email protected] cash ratio is standard norm is !5!. %o the

company has not follow up the standard norm.

The Getworking capital should be increasing in the year 1$!$&1$!1.In the next year is decreased in the year of 1$$".%o the

company is trying to decrease the Getworking capital in future also.

In the 3ebt ratio of the company is in the all years total 3ebt is less than the capital employed . %o it show good position, it willmaintains the bellow ratio in future also.

;orking 9apital Turnover >atio of the 3ora =lastics during the period from 1$!$!8 gradually fluctuated. The ratio sales bases

to spend the working capital. Bence in that ratio depended total turnover and current assets and liabilities bases. The highest

value is 18.:2 in the year 1$!$ and lowest value is 8.$" in the year 1$!7.

SUESTI/3S

The working capital was increased in the year 1$!1!7. %o the companies maintain more working capital in that year because of

investment was made in the current (ssets.

The working capital was decreased in the year 1$!$!!. %o the company maintains less working capital in that year.

It is better to reduce the long term loans which base high interest charges. If the concern clear off there loans and so for fresh loans

with current interest rates.

~49~


50/50


C/3C"USI/3

The iquidity position of 3+>( =(%TI9% =vt td. was good but the cash position was low, so the company should improve

the cash position in future, the everage ratio was not satisfied. The (ctivity >atio was satisfied of 3+>( =(%TI9% =vt td. The

=rofitability >atio of the company is not good. +verall the Financial performance of the company is good, and it has to take necessary

steps to further growth of the company.

%I%"I/RA*2Y

I.'.=(G3?L,1$!1,Financial 'anagement, ?ighth ?dition, Aikas =ublishing Bouse =vt. td.

' .L.KB(G & =. K. O(IG Financial 'anagement, Third ?dition, Tata 'c. raw Bill =ublishing 9o.td.

=rasanna 9handra, financial management, 8th edition 1$$1 Tata 'c. raw Bill =ublishing 9o.td4Gew 3elhi.

%3 G(I3- & < %-3BI> financial management, first edition, student ship line publishing house

=aresh %hah, Financial management, %econd ?dition 1$$8, 9osting and =ricing %ystem at >esearch =ublication

#E% SITES

www.google.com

www.indian plastic industry.com

www.wikipedia.com

www.doragroup.co.in
http://www.wikipedia.com/http://www.doragroup.co.in/http://www.wikipedia.com/http://www.doragroup.co.in/

Documents

Financial Performance Dora-2016.doc