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CHAPTER – IINTRODUCTION
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1.1 INTRODUCTON
Financial statements are the basis for managerial decision making. It is a
collection of data organized according to logical and consistent, accounting procedures.
They convey an understanding of some financial aspects of a business firm, to the
parties interested in its operations. Ratio analysis is the major tool used for analyzing the
financial statements. A financial ratio is the relationship between two according figures
expressed mathematically.
Financial Statements: - The financial statements provide rich information about
the operational results of a business unit and much can be learned from a careful
examination of these statements .A forecast of future earnings of a business can also be
prepared based on the analysis and interpretation of financial statements.
“Financial Statement Analysis”, according to Myers, “It is largely a study of
relationship among the various financial factors in a business as disclosed by a single set
of statements and a study of the trends of these factors as shown in a series of
statements”.
In the words of W.B.Meig, “Financial Statements” are organized summaries of
detailed information and are thus a form of analysis.
MEANING OF FINANCIAL STATEMENT:-
The focus of financial analysis is one key figures contained in the financial
statements and the significant relationship that exists between them.”Analyzing Financial
Statements”, according to Metcalf and Titard, is a process of evaluating the relationship
between component parts of a financial statement to obtain a better understanding of a
firm’s position and performance”.
These financial statements are required by the management for the purpose of
evaluation and decision making.
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There are three steps involved in the financial statement analysis and
they are:-
1) Selection: - The first step involved refers to the selection of information relevant
to the purpose of evaluation from the total of information contained in the financial
statements.
2) Classification: - The second step involved is the classification or grouping of
information in such a manner to focus on the significant relationship.
3) Interpretation: - The final step is the interpretation which includes drawing of
interferences and conclusions.
The analysis and interpretation are closely interlinked since interpretation is
impossible without a proper analysis and any analysis which is not followed by
interpretation becomes a meaningless exercise.Thus, interpretation precedes a proper
analysis.
1.2 Need for the study
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The study concentrates on the financial state of the company. It involves the
study of ratio analysis. It helps to present a broader picture of the financial position of
the company through ratios. The study has great significance and provides benefits to
various parties whom directly or indirectly interacts with the company.
Ratio analysis is useful in the following ways:-
1. Short term and long term planning.
2. Measurements and evaluation of financial performance.
3. Study of financial trends.
4. Decisions making for investments and operations.
5. Diagnosis of financial skills.
6. It is beneficial to top management of the company by providing clear picture
regarding important aspects like liquidity,leverage,activity and profitability.
To be done to well understand the performance of various
operations identifies the shortcoming in management and to suggest for
improvement in those areas.
1.3 Objectives of the study
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This study of INDUS Hospitals has been undertaken to evaluate the financial efficiency of
the organization by establishing the following objectives.
a) To analyze the financial performance of a company.
b) To know the changes in total financial resources of the company.
c) To know the liquidity of the company.
d) To study the operation efficiency and performance of the company.
1.4 Methodology
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The analysis of the project was based on the available information. Any
information about the topic is called the data. The data was gathered from various
sources. Basically we have two types of data collections
1. Primary data
2. Secondary data
PRIMARY DATA:
Any information that is collected afresh and for the first time thus happen to be
original in character is called Primary Data. It can be collected either through
experience or through survey or gathered from concerned employees.
SECONDARY DATA:
Any information which has already been analyzed by someone else and which
have already been passed through the statistical process is called Secondary Data. The
secondary data for the study have been gathered from balance sheets, P&L accounts,
annual reports and other books and manuals of INDUS HOSPITALS. Secondary data
may either be published data or unpublished data that are available.
Usually published data are available in company financial records, organizations
technical and trade journals; books magazines, internet and news papers etc., are
sources of secondary data. Research must be very careful in using secondary data.
1.5 Limitations
There may be limitations to this study because the study duration (project) is very short
and it’s not possible to observe every aspect.
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The study is strictly based on mathematical interpretation of the figure and
ignores the factor such as management style, motivation, leadership etc.
The entire study is based upon the secondary data available at site office.
Ratio used for financial performance analysis is not necessarily the true indicator
of future result. Firm may adopt the changes in accounting polices, procedures,
due to changes in accounting standards from time to time.
Result of a ratio analysis are not a solution for the problem. Where there is
change in price, quantitative and qualitative data in absolute figures are for
managerial decision.
Financial analysis depends up on certain individual assumption, definitions. This
gives several results leading to difficult in comparison.
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CHAPTER – IIINDUSTRY PROFILECOMPANY PROFILE
2.1 INTRODUCTION TO INDUSTRY
It is a health care industry. Health care is one of the largest sectors, in term of
revenue and employment, and this sector is expanding rapidly according to technopak
advisors in their reports ‘India health trends 2008’ healthcare, which is a US$ 35 billion
industry in India, is expected to reach over US$ 75 billion by 2012 and US$ 150 billion by
2017. The industry has today become a growth engine for the Indian economy,
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contributing substantially to the increase in the GDP, urban employment, to achieve the
vision of the powerful and resilient India. the increase in the number of affordable middle
class, rise in insured population , widening demand supply gap, growing number of life
style diseases especially cancer, cardiovascular diseases, diabetes and chronic health
care industry. Other like wellness programmes, fitness programmes, health
management, and preventive medicine- synonyms of healthcare are growing more and
more familiar with each passing heart beat. A growing elderly population and rise in
income levels are also pushing for better facilities in the country. To meet this growing
demand, the country needs US$50 billion annually for the next 20 years, says a
confederation of Indian industry (CII) study. India needs to add 3.1 million beds by 2018
to the existing 1.1 million, and requires immediate investment of US$82 billion, as per
the technopak advisors report. It clearly indicates the continuing potentiality in the
health sector.
Brief Overview:
India is one of the world’s most lucrative healthcare markets, and is expanding
rapidly, according to latest findings by a report published in February 2012, by market
research firm RNCOS. India is the most competitive destination with advantages of lower
cost and sophisticated treatments, according to RNCOS report titled ‘Indian Healthcare –
New Avenues for Growth’. The report further highlighted that several key trends are
backing the growth of India’s healthcare sector. Of these, medical city is relatively a new
concept that offers immense growth opportunities. Likewise, there is a huge potential for
day care surgeries. Almost 60 percent of all surgeries can be done in a day care mode as
the current infrastructure supports.
India will witness the largest number of mergers and acquisitions (M & A) in
the pharmaceutical and healthcare sector, according to consulting firm Grant Thornton.
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A survey conducted across 100 companies has revealed that a fourth of the respondents
were optimistic about acquisitions in the pharmaceutical sector.
Market Size:
The hospital and diagnostic centre in India has attracted foreign direct investment
(FDI) worth US$ 1,183.04 million, while drugs & pharmaceutical and medical & surgical
appliances industry registered FDI worth US$ 9,170.24 million and US$ 514.08 million
respectively, during April 2000 to January 2012, according to the data provided by
Department of Industrial Policy and Promotion (DIPP).
Trends and Investments:
Sovereign fund Government of Singapore Investment Corporation (GIC) has
picked up a minority stake in Vasan Healthcare Enterprise, an eye care chain, for
US$ 100 million. Vasan will use the funds to “expand rapidly in new geographies,
besides look at acquisitions,” as per AM Arun, Chairman, Vasan.
Ranbaxy has announced the opening of its new manufacturing facility at
Casablanca, Morocco. “Morocco is one of the important markets and this
manufacturing facility further reinforces our commitment to the people of
Morocco and the African continent,” according to Mahendra Bhardwaj, Head,
Randbaxy (Africa).
Ranbaxy Laboratories Ltd announced that it has launched the generic versions of
cholesterol reducing drug – Atorvastatin, in Italy, Sweden and the Netherlands.
With sales worth US$ 377 million, it is the largest selling pharmaceutical produt in
Italy. The market size for Atorvastatin in the Netherlands is US$ 164.4 million and
in Sweden US$ 55 million.
Dubai-based DM Healthcare has opened a multi- speciality hospital in Kolhapur in
Maharashtra. The Aster-Aadhar hospital, a joint venture (JV) between DM
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Healthcare and Aadhar hospital, is a 175 bed facility and is equipped with
complete spectrum of healthcar amenities and infrastructure. A Medicity in Kochi,
estimated to cost Rs 1,500 crore (US$ 2.98 million) , is part of the expansion
plans.
Halcyon Finance and Capital Advisors Pvt Ltd has bought management and
development and rights of an under construction super specialty hospital in Delhi,
India, for Rs 375 crore (US$ 74.4 million). Halcyon plans to develop a 700 bed
facility and will also provide allied healthcare activities such as research and
medical education at the hospital.
The urology and laparoscopy chain, RG Stone Hospital, would invest Rs 120 croe
(US$ 23.81 million) in Uttar Pradesh (UP) over the next two years to set up a chain
of hospitals across the country. “We would provide reliable and affordable
treatment available in the state,” according to Bhaldev Raj, Country Head, RG
Stone Urology and Paparoscopy Hospital.
With an intention to increase their foothold in the US healthcare market, Wipro
Technologies has launched its NextGen care management solution. The solution
enables physicians drive patient participation in devisiong a personalised care
plan with defined care goals, treatment plan and health improvement activites.
Apollo Hospitals plans to set up a second haopital in Bangladesh, at the prt city of
Chittagong, through a local partner. The 300 bed project is expected to be on
steam in two years. Apollo hospital sha participated in a similar tele-medicine
initiative in 24 countries in Africa and runs 120 video conferencing hubs, mostly in
India and a Few in Mauritius, Maldive, parts of West Asia, Sri Lanka and others, to
take healthcare to the patient’s doorstep, according to Sangita Reddy, Executive
Director, Operations, Apollo Group of Hospitals.
Bio-pharmaceutical and health science sector representatives from the UK are
willing to expand partnerships with India companies, as per lan Felton, British
Deputy High Commissioner, Bangalore.
Pharmaceutical majors such as Novartis, GlaxoSmithKline, Pfizer, Ranbaxy and
Aventis are keen to emulate the consumer industry’s success in the hinterland.
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Novartis educates 6 million villagers in a year on health under the banner of
Arogra Parivar.
Medical Tourism:
The boom in medical tourism is encouraging hospitals and hoteliers to strike
alliances with each other. According to industry estimates, the market size of medical
tourism in India is growing at over 25 per cent annually at more than US$ 2.5 billion. The
segment’s growing business potential prompted the ITC group to set up the 58 room
Fortune Park Lake City business hotel at the Jupiter Lifeline Hospitals complex in Thane,
near Mumbai, to serve medical tourists. Apollo Hospitals is also exploring similar tie-ups
with neighbourhood hotels.
“Most international patients are from Africa, SAARC and West Asia. Patients
requiring higher-end tertiary care are now coming to India for cardiology, orthopaedics,
neurology, oncology and organ transplants. Affordability of treatment is a big pull factor
—treatment in India costs ust 10-20 percent of what it costs abroad,” added Saumyajit
Roy, Associate Director – Strategic Consulting (Education, Healthcare and Senior Living),
Jones Lang LaSalla India.
Healthcare – Government Initiatives:
The Government has decided to increase health expenditure to 2.5 percent of the
gross domestic product (GDP) by the end of the 12th Five Year Plan, from the current 1.4
percent.
In addition a number of initiatives that have been proposed and taken up by the
Government of India (GOI) for enhancement of the healthcare sector.
100percent foreign direct investment (FDI) is permitted for health and medical
services under the automatic route.
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Allocation for national Rural Health Mission (NHRM) has proposed to be increased
from Rs 18,115 crore (US$ 3.59 billion) in 2011-12 to Rs 20,822 crore (US$4.13
billion) in 2012-13.
National Urban Health Mission is being launched.
Health and Nutrition:
Proposal to extend concessional basic customs duty of 5 percent with full
exemption from excise duty/CVD to 6 specified life saving drugs/vaccines.
Basic customs duty and excise duty reduced on Soy products to address protein
deficiency among women and children.
Basic customs duty and excised duty reduced on lodine.
Basic customs duty reduced on Probiotics.
Road Ahead:
India’s thriving economy is driving urbanisation and creating an expanding middle
class, with more disposable income to spend on healthcare. The Government of India
has developed an all-inclusive policy on healthcare which aims to achieve a remarkable
growth for the sector which has led to a high number of compelling opportunities such as
developing new infrastructure and providing novel medical equipment solutions. The
sector holds enormous potential which is waiting to be unleashed to the maximum
potential.
On the back of continuously rising demand, the hospital services industry is
expected to be worth US$ 81.2 billion by 2015, according to the latest RNCOS research
report titled, “Indian Hospital Services Market Outlook,” published in March 2012. Huge
private sector investments will significantly contribute to the development of hospital
industry, comprising around 80percent of the total market, highlighted the report.
Exchange Rage used; INR 1 = US$ 0.01984 as on March 20, 2012.
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INDUSTRY SCENARIO:-
Visakhapatnam is becoming a Medical City next to Hyderabad in the State People
from Vizianagaram, Srikakulam, Godavari Districts, from neighbouring States Orissa,
Chattisgarh, Jarkhand regularly visit Visakapatnam for their medical needs.
Visakhapatnam is equipped with Govt Hospitals like K.G.H, Victoria hospital; Regional Eye
Hospital, RCD Hospital and Corporate Groups like Seven Hills, Apollo, and Care etc are
very busy in serving the needs of people. The proposed hospital project located very
near to KGH and other Corporate Hospitals. This is well known in for medical services.
In the recent past due to increase in Traffic conditions the accident and
emergency cases growing abnormally. As per the medical survey reports for every
10000 population there is a need for 10 medical beds. As at Present the population of
Greater Visakhapatnam is approximately around 25.00 Lacs and the available medical
facilities are insuffities are insufficient to cater the needs of the public. There exisits a
big gap in between the demand and supply in this field.
2.2 ABOUT INDUS HOSPITAL
A star was born on the healthcare horizon when Indus Hospitals was established
in the beach city of Visakhpatnam. Managed by a team of stalwarts in the medical
profession and ably led by Dr V Satyanaryana who is an experienced Neurologist with
over 35 years of experience. Indus Hospitals serves patients from all walks of life with the
best facilities
Dr V Satyanaryana is one of the foremost Neurologists in the country and has a
heart of gold for patients who are poor and downtrodden. He has helped countless
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number of patients recover from their illness and chronic suffering through his
philanthropic nature which has made him very highly respected among his peers.
Indus Hospitals has a capacity of 150 beds and is equipped with the best state of
the art infrastructure which is comparable to any international hospital in the world. With
well equipped Acute Medical Care units (ACMU), Cardiothoracic Intensive Care Unit
(CTICU) and Intensive Coronary care units (ICCU) departments which are built to world
class standards and use the services of the best technicians and surgeons in the medical
field.
With varied departments ranging from Nephrology, Neurosurgery and Cardiac
care, Indus Hospitals fulfils a complete spectrum of services and is a single point solution
for various medical requirements for our patients who come from the diverse social
spectrums.
With state of the art, centrally air conditioned facilities and world class facility
management; we successfully exceed the expectations of every patient who comes to
our hospital for treatment.
We are poised to redefine the future of healthcare through our dynamic services
and have established a bond of trust with our patients.
OUR PROFILE
Indus Hospitals is one of the most prominent hospitals in the city of Visakhapatnam.
Indus Hospitals was established by Dr V Satyanaryana who is a veteran to the medical
field. With a vision to establish a quality medical care facility which caters to all
segments of the population, he started Indus Hospitals in with the latest equipment and
medical acumen of several doctors who had specialized in India and abroad in some of
the finest institutions
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Indus Hospitals believes in the philosophy of delivering the best patient care for all
segments of patient who come to our hospital. With a service oriented approach, Indus
Hospitals is helping many thousands of people who are from the weaker sections of the
society and making them lead happy and healthy lives. Our founder Dr V Satyanaryana is
a great philanthropist who has helped many needy patients in their time of need and
given monetary and medical assistance to countless families on a personal basis.
We have a rare distinction of performing various critical surgeries in our hospital with a
very high rate of success. This is not only due to our world class infrastructure but also
due to the dedication and commitment of our doctors and staff who deliver the best
treatment and service for all patients who come to us. We have set our sights on the
future which holds new promise of growth and enhanced service capabilities for our
patients. We have established a state of the art Indus heart center which provides the
best cardiac care compared to any other facility in India. Our Indus heart center is
equipped with advanced equipment like the M.C 1000 Plus Automated Coagulation
Analyzer from Germany, Cardiac readers from Roche, Germany and the Siemens Artis
ZEE Cath lab which one of the world’s finest equipment for providing cardiac digital
imaging.
At Indus Hospitals, we believe in delivering quality patient care which is a combination of
the best medical equipment and human skill which leads to better patient well being and
an improvement in the healthcare standards for every ordinary person.
VISION & MISSION
Mission
To provide quality medical services to all patients and deliver international
treatment standards in India.
Vision
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To become a leader in the healthcare segment and add value to our patients,
doctors and employees through constant innovation and service enhancement.
BOARD OF DIRECTORS
The hospital is headed by Dr V Satyanaryana (Chairman and Founder)- The hospital is
headed by Dr V Satyanaryana who is one of the foremost neurologists in the country and
has a soft corner for patients who are poor and downtrodden. He has helped countless
number of patients recover from their illness and chronic suffering through his
philanthropic nature. This has made him highly respected among his peers in the
hospital.
Key Achievements include:
Achieved the rare distinction of being the first qualified neurophysician in the
entire state of Andhra Pradesh.
Served in the department of AP Medical &Health Services from 1965 to 1977.
Served as a professor in Neurology in Andhra Medical College from 1977 to
1996.
Member of various eminent medical fellowships including the Indian Medical
Association, Indian Academy of Neurology and Member of the World Federation
of Neurology and AP Neurology Scientists Association.
Has published highly acclaimed papers on the recurrent polyneurotherapy and
Wilson disease and many other critical subjects.
Dr. S. Sridhar (Managing Director) - He is the Managing director of the hospital and
is actively involved in day to administration of the hospital. He has pursued his MBBS
degree at Ranagaraya Medical College in Kakinada and his M.S in General Surgery at the
Guntur medical college. Dr Sridhar achieved his post specialization in the field of gastro
Intestinal Surgery at the GB Pant Hospital University in New Delhi.
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A highly capable administrator, he has a keen vision to make Indus Hospitals the leader
in the healthcare and medical segment in the city of Visakhapatnam. He is one of the few
highly qualified Gastro Enterologists who is present in the entire state of Andhra Pradesh.
Dr Sridhar also has the distinction of working as a surgical registrar with Nizams Institute
of Medical Sciences (NIMS). He has also served as a managing director in visaka hospital
and Siddhartha medical canter. These Institutions are now running as highly profitable
ventures and have established themselves as key facilities for providing medical
healthcare services.
Dr Sridhar also has the rare distinction of presenting various papers and research
projects in major conferences worldwide. He is a highly qualified Surgical Gastro
Enterologist.
Dr B.S Nehru (Director) is a highly eminent Nephrologist who has close to over 3
decades of experience in treating various types of Nephrological conditions. He has
established a private practice since the year 1984.
His wide ranging experience includes practicing as a Physician from 1984 to 1998 in
Srikakulam and then working as Senior Registrar in the department of Nephrology in
Apollo Hospitals in Chennai for two years from 1998-2000. He has been practicing as a
Nephrologist in Visakhapatnam since Dec 2000.
Dr B.S Nehru is a MD in General Medicine and has specialized in DNB (Nephrology).
Dr V. Sujatha(Director)- She is one of the Directors of Indus Hospitals and has
specialized in the field of cardiology. After completing her MBBS in the year 1990 at
Andhra Medical College Vizag, she specialized Internal Medicine in the year 1994 at
Andhra Medical College and the prestigious King George Hospital in Vizag.
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Dr Sujatha completed her DM in Cardiology in the year 2000 at Nizams Institutes of
Medical Sciences in Hyderabad.
Her professional experience includes working a consultant cardiologist since the year
2000 and she has worked in Care hospitals, Seven Hills Hospitals and Apollo Hospitals
and is familiar with the latest trends and technologies which are adopted worldwide in
the field of cardiac care.
Professional Experience:
Dec94-Dec96: Senior resident in cardiology Nizams Institute of
Medical Sciences
Jan97-Jan00: Residency in Cardiology Nizams Institute of Medical
Sciences
Feb00: Post-doctoral trainee Nizams Institute of Medical
Sciences
Mar00-July00: Assistant professor of cardiology Nizams Institute
ofMedical Sciences
Aug00-May01 : Consultant Cardiologist CARE hospitals Visakhapatnam.
May01-Sep03: Consultant Cardiologist Seven Hills hospital
Visakhapatnam
Oct03-Oct04: Fellowship in Interventio Cardiology Institute
Cardiovaculaire Paris Sud, Paris
Dr Sailaja(Director)-She is one of the key Directors of the hospital. After pursuing her
MBBS in 1990 at the Gandhi Medical College in Hyderabad. She obtained a master
degree in Internal Medicine at the Yale Primary Care Internal Medicine Residency
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Program which was conducted at New Haven, Connecticut. She is currently pursuing her
fellowship in infectious disease at the Yale University.
Her professional experience includes
1998-2004 Medical Director, Stay well Health Center, Waterbury, CT
1999-2004-Clinician Educator, Yale Primary Care Internal Medicine Residency
Program, CT
1998-2003-Emergency Staff Physician, St. Mary’s Hospital, CT
2003-2004-Staff Physician, DMR, State of CT, CT
Her Teaching Experience includes
1993-1994-Supervised research Projects of NYU medical students(Honors
Program)
1994-1995-Tutored first year medical students at NYU Medical Center
In Molecular Biology and Biochemistry
1998- Taught Medical residents of the Yale Primary Care Internal
1999-2004-Clinician Educator, Yale Primary Care Internal Medicine Residency
Program
A list of awards and merits which she has garnered include
1983-1985-National Merit Scholarship from Govt. Of India
1985-1990-National Merit Scholarship from Govt. Of India for Medical School
Education
1996 Second Prize in the poster competition at the spring Scientific Session of
the Connecticut State ACP Meeting
1996 "Intern of the Year" in the Yale Primary Care Residency Program
1997 "Young Investigator Award" from the Connecticut State Infectious Disease
Society
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1998 "John Brackett Award" for being an outstanding medical resident of the
Yale Primary Care Internal Medicine Residency Program
2001 "Best Teacher Award" from Yale Primary Care Internal Medicine
Residency Program
Mr. V Ravikumar(Director)- He is one of the present Directors of the hospital and has
completed his B. Tech at IIT Madras and PhD at the university of Southern California. He
is currently employed as senior Scientist in General Electric, USA.
Dr K Ravindra(Director)- He brings his wide range experience in general medicine to
Indus Hospitals. He completed his MBBS in the year 1972 from Belgaum University and
worked in the people’s poly clinic in Nellore from 1972 to 1975. He then opened a
general practice clinic in Tenali which was operational for four years from 1975 to 1979.
He then worked in the country of Algeria in North Africa for a period of 5 years
from 1979 to 1984 under the ministry of external affairs Govt of India. He has been
practicing General Medicine in the City of Visakhapatnam from the year 1985 till date
and has been providing a wide range of medical services to his patients. Additionally, he
has also toured various countries like France, Singapore and Germany to gain medical
experience.
CHAIRMAN'S MESSAGE
I extend a warm welcome to all the visitors who have visited our website. I had
the vision of establishing Indus Hospitals to provide quality healthcare services for the
population of visakhpatnam and adjacent areas and meet their growing medical needs.
At Indus Hospitals, we continue to set new standards of patient treatment quality which
could only be achieved by world class infrastructure and skilled medical expertise of
highly talented doctors. We have carefully chosen our staff that has not only an excellent
professional record but also a true desire to care and enhance patient well being at all
times.
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Indus Hospitals has been constantly expanding to meet the diverse needs of
patients across various specialties. Our latest addition has been the setting up a fully
fledged Indus Heart Center which provides super specialty heart care to our patients. Our
Indus heart center now offers our patients various types of invasive and non invasive
cardiac surgeries which are highly advanced and require specialized equipment and
infrastructure which was available only in a few select hospitals in the country. Our
attention to detail and a high standard of facility management ensures a very high
success ratio in the surgeries which are performed at the Indus Heart Center.
With a view towards the future, Indus Hospitals has been procuring the latest equipment
and medical technology from around the world which includes the world famous Siemens
Artis ZEE cath lab equipment which is the reference standard for cardiac imaging and
care.
Indus Hospitals is committed to deliver patient satisfaction on all fronts through
the integration of sound management, advanced infrastructure and above all a strong
will to deliver the best patient experience at all times.
INFRASTRUCTURE HOME
Indus Hospitals has the highest quality infrastructure to cater to the needs of
patients who need highly specialized care. With a focus on patient satisfaction, Indus
Hospitals has designed its hospital environment to be totally patient friendly and offer
the best utility for patients and doctors who use our facilities.
We offer the following facilities in our hospital.
Acute Medical Care Unit(AMCU)
Intensive Coronary Care Unit(ICCU)
Cardio Thoracic Intensive Care Unit(CTICU)
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Each of these departments is equipped with the latest equipments and facilities for
quality patient care and ensures very high standard of treatment and surgery for our
patients.
Ward Wise Infrastructure
AMCU 16 BEDS
ICCU 10 BEDS
CTICU 04 BEDS
GENERAL WARD 40 BEDS
SHARING(A/C& NON A/C) 53 BEDS
SINGLE(A/C&NONA/C) 18 BEDS
CATHWARD 03 BEDS
CASUALITY 05 BEDS
DIALYSIS 03 BEDS
PRE OP 04 BEDS
AMCU UNITS
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At Indus Hospitals, we know the true seriousness of an emergency which requires
specialized medical care. Our Acute medical care units(AMCU) function round the clock
and provide Critical Care for patients who are suffering from various health
complications.
Our AMCU department has the following facilities
16 bed capacity
HP monitors
Puritan Benetton and Siemens ventilators
Nelcor make pulse ox meters
Parameter display monitors with centralized networking
Centralized gas supply system
Syringe and infusion pumps
Ventilator systems for various types of patients
Transport Ventilator
Anesthesia Ventilators
Valley Lab Diathermy Apparatus
ICCU UNITS
The ICCU unit at Indus Hospitals is equipped with world class facilities which are second
to none in the market. We have designed and built our ICCU unit to world standards
which is an envy of every hospital around us.
Our ICCU consists of 10 beds which are effectively laid out to provide spacious environs.
We have installed the latest equipment for our ICCU block which includes state of the art
technology and the finest skilled technicians to handle them.
Our ICCU consists of the following:
HP Monitors
Puritan Benetton and Siemens ventilators
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Nelcor pulse oxymeters
Multiple parameter monitors with a central network
Multiple parameter monitors with a central network
Centralized gas supply system
Syringe pumps and infusion pumps
Ventilators for adult pediatric and neonatal
Transport Ventilator
Anesthesia ventilators
Valley Lab Diathermy Apparatus.
CTICU UNITS
Indus Hospitals has a fully fledged Cardiothoracic Intensive Care Unit which has been
designed to provide the best facilities for patients. Our CTICU unit is designed to provide
the highest quality critical care for patients who are admitted in the cardiothoracic
surgery unit.
We have the following specialized equipment in our CTICU unit
Central Monitoring System
High Quality Ventilators
State of the art patient monitoring systems
Beyond all the equipment, we have a highly skilled team of doctors and nursing staff who
take complete care of the patients on all fronts. This ensures that or patients make a
complete recovery after undergoing cardiac surgery and any cardiac related procedures.
We have designed our CTICU based on world standards of clean room and ICU care
design. This ensures that there is a minimal risk of infection and enhanced protection for
patients who need quick recoveries from surgeries.
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INDUS HEART CENTER
Founded as an integral part of the Indus Hospitals division, the Indus Heart Center caters
to numerous patients across diverse backgrounds using the best equipment and
specialists. Established with a vision to provide quality services at affordable prices, the
Indus Heart center is setting new standards in the handling of cardio care through the
implementation of advanced technology and expert Physicians who heal the heart.
We offer specializations in various aspects of cardiology and cardiothoracic surgery which
are of the highest standards and help our patient’s lead healthier lives. Indus Heart
Center has some of the best medical specialists who have spent a great deal of time and
effort in finding the right solutions for cardio problems which affect patients.
With wide ranging expertise in cardiology and Cardiothoracic surgery, Indus Heart Center
offers Critical Care, non Invasive and invasive cardiology treatments which exceed the
standards set by many hospitals around India.
The Indus Heart Center is equipped with the following specialized equipments which help
us provide quality cardiac services for our patients.
M.C. 1000 plus Automated Coagulation Analyzer (Germany)
The Hemoclot MC-1000 Plus is an optomechanical coagulation analyzer which applies the
turbodensitometric measuring principle. All routine coagulation clothing tests such as PT
activated and partial thromboplastin, fibrinogen and single factor assays can be
performed with the instrument. The unit uses a liquid crystal display with one row and 8
characters have been integrated for visual communication. Parameters memory is
accessed with the mode-key. The measuring channel is integrated into the 37.4OC
incubation block with 1 position reagent bottle and 4 positions for cubettis.
26
Cardiac Reader Instrument (Roche, Germany)
Cardiac reader instrument 5 designed for cardiac profile investigations such as
Troponin.T, Myoglobin, D-Dimer and Pro-BMP tests Quantitatively. The instrument
is programmed for parameters with a digital display which shows the results
automatically.
Cardiac Catheterization (CathLab) : SIEMENS ARTIS ZEE
The digital imaging capabilities and flat panel detector technology of the Siemens Artis
Zee modules are unmatched and provide quality images to manage the various types of
treatments which Indus offers. This enhanced quality of imaging help identify minute
problems which were invisible through other means which lead to better diagnosis and
accurate treatment.
FACILITIES
We strive and provide the best facilities to enable our doctors and staff to serve patients
effectively. Every aspect of facility management services are carefully monitored to
ensure that there is no shortfall in the quality of service towards the patient at any point
of time. Indus Hospitals is equipped with the following facilities
Biomedical Engineering Department
This department caters to all the maintenance planning and repairs of every biomedical
department in the hospital.
Ambulance Services
We have two large ambulances and one small ambulance which is equipped with various
life saving drugs and equipment.
Medical Records Department
27
totally computerized medical records department handles all the storage and
management of medical records in the hospital as per regulatory norms.
Backup Power Supply
Indus Hospitals has 2 fallback generators which of 250 Kva, these are designed to act in
manual and automatic modes in the event of main power supply failure.
Medical Gas Storage
Indus Hospitals stores various medical gasses which are required for emergency medical
care and always maintains 100% redundancy of gas stock over and above the current
usage levels.
Centralized Air Conditioning
The hospital consists of a high quality daikin VRV system. And all major rooms in the
hospital are air conditioned except for a few unimportant areas.
Solar Water Heating System
Indus Hospitals has a 4500 litter solar water heater system combined with the effective
use of with heating elements.
Surplus Water Supply
Indus Hospitals has a reverse osmosis facility to provide high quality water supply to the
entire hospital. Indus Hospitals uses about 50,000 litters of water a day and these are
28
also provided using various ground and piped water sources.
Patient Lifts
Indus Hospitals has 2 bed lifts and 1 passenger lift. The passenger lift can accommodate
a patient bed with oxygen cylinder and also the support nursing staff.
We additionally have the following facilities which we offer our
patients:
1) 26 dedicated outpatient consultation chambers for total patient comfort.
2)Four state of the art operation theatres which are equipped with world class
anaesthesia work stations and surgical equipment with facility for laminar flow (bacteria
free air flow) to ensure absolute sterility and prevent risk of infection.
3) A single operation theater which is exclusively dedicated for Neuro Surgery and
specific operation theaters which are present exclusively for Cardiothoracic Surgery,
Surgical Gastro Enterology, General surgery and Orthopedic surgery. We also have two
exclusive operating theaters for cardiothoracic sugery which meet international
standards.
We offer a wide suite of rooms for our patients based on their requirements these include
1. Single A/c Rooms
2. Deluxe Rooms
3. Single Non-A/c Rooms
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4. Sharing Non-A/c Rooms
4) Indus Hospitals also has a well stocked library which consists of a vast collection of
medical literature which comprises of various nations and international journals and
papers.
5) We are equipped with a large air conditioned Lecture hall which has a seating capacity
of 120 people. It is equipped with a slide projector and LCD projector for
showing multimedia presentations and training the hospital staff.
6) We have a 100% medical emergency standby system for the hospital which consists of
a reserve vacuum generator, reserve oxygen and nitrogen supply and a dedicated UPS.
7) We have installed Epoxy poly urethane flooring around the hospital to maintain
stertility in all public areas, operation theaters, Critical Care Units.
8) We have designed our rooms to be spacious and well ventilated and ensured that all
wards have the required amount of light and air.
9) We are equipped with a state of the art video conferencing and Tele conferencing
facility.
10) Indus Hospitals has a very advanced ambulance facility.
11) We use very powerful software for billing and patient management along with record
maintenance.
12) We have a fire proof record room for manual and digital storage of patient records.
30
MANAGEMENT
Indus hospital believes in delivering quality care to its patients at all times. Indus has been
providing quality services to patients from all walks of life and of different economic strata.
Indus was started with the sole aim of providing quality healthcare to patients by a team of
dedicated specialists who felt the need for a specialized healthcare facility in the city of
vishakapatnam. At Indus, We believe in giving our patients the best care and facilities of
international standards which they can expect within the country.
The hospital is headed by Dr V Satyanaryana (Chairmen and Founder) who is one of the
foremost Neurologists in the Country and has a soft corner for patients who are poor and
downtrodden. He has helped countless number of patients recover from their illness and
chronic suffering through his philanthropic nature. This has made him highly respected among
his peers in the hospital.
Key Achievements include:
Achieved the rare distinction of being the First Qualified Neurologist in entire Coastal Andhra
Pradesh.
Served in the department of AP Medical&Health Services from 1965 to 1977.
Served as a Professor in Neurology in Andhra Medical College from 1977 to 1996.
Member of various eminent Medical Fellowships including the Indian Medical Association,
Indian Academy of Neurology and Member of the World Federation of Neurology and AP
Neurology Scientists Association.
Has published highly acclaimed papers on the Recurrent Polyneurotherapy and Wilson
Disease and many other critical subjects
DR S. Sridhar (Managing Director) is the Managing Director of the company and is actively
involved in day to Administration of the Hospital. He has pursued his MBBS degree at
31
Ranagaraya Medical College in Kakinada and his M.S in General Surgery at the Guntur Medical
College. Dr Sridhar achieved his post specialization in the field of Gastro Intestinal Surgery at
the GB Pant Hospital University in New Delhi.
A highly capable Administrator, he has a keen Vision to make Indus the leader in the
Healthcare and Medical Segment in the city of Visakhapatnam. He is one of the few highly
qualified Gastro Enterologists who is present in the entire state of Andhra Pradesh.
Dr Sridhar also has the distinction of working as a surgical registrar with Nizams Instittute of
Medical Sciences(NIMS). He has also served as a Managing Director in Visaka Hospital and
Siddhartha Medical Center. These Institutions are now running as highly profitable ventures
and have established themselves as key facilities for providing medical healthcare
services. He is a highly qualified Surgical Gastro Enterologist
Dr Sridhar also has the rare distinction of presenting various papers and research projects in
major conferences worldwide.
Dr B.S Nehru (Director) is a highly eminent Nephrologist who has close to over 3 decades of
experience in treating various types of Nephrological conditions. He has established a private
practice since the year 1984.
His wide ranging experience includes practicing as a Physician from 1984 to 1998 in
Srikakulam and then working as Senior Registrar in the department of Nephrology in Apollo
Hospitals in Chennai for two years from 1998-2000. He has been practicing as a Nephrologist
in Visakhapatnam since Dec 2000.
Dr B.S Nehru is a MD in General Medicine and has specialized in DNB(Nephrology).
Dr V. Sujatha (Director) is a Director of Indus Hospitals and has specialized in the field of
Cardiology. After completing her MBBS in the year 1990 at Andhra Medical College Vizag she
specialized Internal Medicine in the year 1994 at Andhra Medical College and the prestigious
King George Hospital in Vizag.
Dr Sujatha completed her DM in Cardiology in the year 2000 at Nizams Institutes of Medical
32
Sciences in Hyderabad.
Her professional experience includes working a consultant Cardiologist since the year 2000
and she has worked in Care Hospitals, Seven Hills Hospitals and Apollo Hospitals and is familiar
with the latest trends and technologies which are adopted worldwide in the field of Cardiac
Care.
Professional Experience:
Dec’94-Dec’96: Senior Resident in Cardiology Nizam’s Institute of Medical
Sciences
Jan’97-Jan’00 : Residency in Cardiology Nizam’s Institute of Medical Science
Feb’00 : Post-Doctoral Trainee Nizam’s Institute of Medical Sciences
Mar’00-july’00: Assistant professor of Cardiology Nizam’s Institute of
Medical Sciences
Aug’00-May’01 : Consultant Cardiologist Care Hospitals Visakhapatnam.
May’01-Sep’03 : Consultant Cardiologist Seven Hills Hospital Visakhapatnam
Oct 03-Oct 04: Fellowship in Interventio Cardiology Institute Cardiovaculaire
Paris Sud, Paris
Dr Sailaja (Director) is one of the key directors of the hospital. After pursuing her MBBS in
1990 at the Gandhi Medical College in Hyderabad. She obtained a master degree in Internal
Medicine at the Yale Primary Care Internal Medicine Residency Program which was conducted
at New Haven, Connecticut. She is current pursuing her fellowship in infections disease at the
Yale University.
Her professional experience includes
1998-2004 Medical Director, Staywell Health Center, Waterbury, CT
1999-2004-Clinician Educator, Yale Primary Care Internal Medicine Residency Program, CT
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1998-2003-Emergency Staff Physician, St. Mary’s Hospital, CT
2003-2004-Staff Physician, DMR, State of CT, CT
Her Teaching Experience includes
1993-1994-Supervised research Projects of NYU medical students(Honor’s Program)
1994-1995-Tutored first year medical students at NYU Medical Center In Molecular Biology
and Biochemistry
1998- Taught Medical residents of the Yale Primary Care Internal
1999-2004-Clinician Educator, Yale Primary Care Internal Medicine Residency Program
A list of awards and merits which she has garnered include
1983-1985-National Merit Scholarship from Govt. Of India
1985-1990-National Merit Scholarship from Govt. Of India for Medical School Education
1996 Second Prize in the poster competition at the spring Scientific Session of the
Connecticut State ACP Meeting
1996 “Intern of the Year” in the Yale Primary Care Residency Program
1997 “Young Investigator Award” from the Connecticut State Infectious Disease Society
1998 “John Brackett Award” for being an outstanding medical resident of the Yale Primary
Care Internal Medicine Residency Program
2001 “Best Teacher Award” from Yale Primary Care Internal Medicine Residency Program
Dr K Ravindra (Director) brings his wide range experience in general medicine to Indus
Hospitals. He completed his MBBS in the year 1972 from Belgaum university and worked in the
people’s poly clinic in Nellore from 1972 to 1975. He then opened a general practice in tenali
which was operational for four years from 1975 to 1979.
He then worked in the country of Algeria in North Africa for a period of 5 years from 1979 to
1984 under the ministry of external affairs Govt Of India.
He has been practicing General Medicine in the City of Visakhapatnam from the year 1985 till
date and has been providing a wide range of medical services to his patients. Additionally, he
34
has also toured various countries like France, Singapore and Germany to gain medical
experience.
35
CHAPTER – IIITHEORITICAL FRAME WORK
36
3.1 Theoretical Framework:
3.1.1 Use and significance of ratio analysis:-
The ratio is one of the most powerful tools of financial analysis. It is used as a device
to analyze and interpret the financial health of enterprise. Ratio analysis stands for the
process of determining and presenting the relationship of items and groups of items in
the financial statements. It is an important technique of the financial analysis. It is the
way by which financial stability and health of the concern can be judged. Thus ratios
have wide applications and are of immense use today. The following are the main points
of importance of ratio analysis:
A.Managerial uses of ratio analysis:-
1. Helps in decision making:-
Financial statements are prepared primarily for decision-making. Ratio analysis
helps in making decision from the information provided in these financial Statements.
2. Helps in financial forecasting and planning:-
Ratio analysis is of much help in financial forecasting and planning. Planning is
looking ahead and the ratios calculated for a number of years a work as a guide for the
future. Thus, ratio analysis helps in forecasting and planning.
3. Helps in communicating:-
The financial strength and weakness of a firm are communicated in a more easy
and understandable manner by the use of ratios. Thus, ratios help in communication and
enhance the value of the financial statements.
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4. Helps in co-ordination:-
Ratios even help in co-ordination, which is of at most importance in effective
business management. Better communication of efficiency and weakness of an
enterprise result in better co-ordination in the enterprise
5. Helps in control:-
Ratio analysis even helps in making effective control of business. The weaknesses
are otherwise, if any, come to the knowledge of the managerial, which helps, in effective
control of the business.
B.Utility to shareholders/investors:-
An investor in the company will like to assess the financial position of the concern
where he is going to invest. His first interest will be the security of his investment and
then a return in form of dividend or interest. Ratio analysis will be useful to the investor
in making up his mind whether present financial position of the concern warrants further
investment or not.
C.Utility to creditors: -
The creditors or suppliers extent short-term credit to the concern. They are
invested to know whether financial position of the concern warrants their payments at a
specified time or not.
D.Utility to employees:-
The employees are also interested in the financial position of the concern
especially profitability. Their wage increases and amount of fringe benefits are related to
the volume of profits earned by the concern.
E. Utility to government:-
38
Government is interested to know overall strength of the industry. Various
financial statement published by industrial units are used to calculate ratios for
determining short term, long-term and overall financial position of the concerns.
F. Tax audit requirements:-
Sec44AB was inserted in the income tax act by financial act; 1984.Caluse 32 of
the income tax act requires that the following accounting ratios should be given:
1. Gross profit/turnover.
2. Net profit/turnover.
3. Stock in trade/turnover.
4. Material consumed/finished goods produced.
Further, it is advisable to compare the accounting ratios for the year under
consideration with the accounting ratios for earlier two years so that the auditor can
make necessary enquiries, if there is any major variation in the accounting ratios.
3.1.2 Limitations:
Ratio analysis is very important in revealing the financial position and soundness
of the business. But, in spite of its advantages, it has some limitations which restrict its
use. These limitations should be kept in mind while making use of ratio analysis for
interpreting the financial the financial statements. The following are the main limitations
of ratio analysis:
1. False results:-
Ratios are based upon the financial statement. In case financial statement are in
correct or the data of on which ratios are based is in correct, ratios calculated will all so
false and defective. The accounting system it self suffers from many inherent
weaknesses the ratios based upon it cannot be said to be always reliable.
39
2. Limited comparability:-
The ratio of the one firm cannot always be compare with the performance of other
firm, if uniform accounting policies are not adopted by them. The difference in the
methods of calculation of stock or the methods used to record the deprecation on assets
will not provide identical data, so they cannot be compared.
3. Absence of standard universally accepted terminology:-
Different meanings are given to a particular term, egg. Some firms take profit
before interest and tax; others may take profit after interest and tax. A bank overdraft is
taken as current liability but some firms may take it as non-current liability. The ratios
can be comparable only when all the firms adapt uniform terminology.
4. Price level changes affect ratios:-
The comparability of ratios suffers, if the prices of the commodities in two
different years are not the same. Change in price effect the cost of production, sale and
also the value of assets. It means that the ratio will be meaningful for comparison, if the
prices do not change.
5. Ignoring qualitative factors:-
Ratio analysis is the quantitative measurement of the performance of the
business. It ignores qualitative aspect of the firm, how so ever important it may be. It
shoes that ratio is only a one sided approach to measure the efficiency of the business.
6. Personal bias:-
Ratios are only means of financial analysis and an end in it self. The ratio has to
be interpreted and different people may interpret the same ratio in different ways.
7. Window dressing:-
40
Financial statements can easily be window dressed to present a better picture of
its financial and profitability position to outsiders. Hence, one has to be very carefully in
making a decision from ratios calculated from such financial statements.
8. Absolute figures distortive:-
Ratios devoid of absolute figures may prove distortive, as ratio analysis is
primarily a quantitative analysis and not a qualitative analysis.
3.1.3 Classification of ratios:
Several ratios, calculated from the accounting data can be grouped into various
classes according to financial activity or function to be evaluated. Management is
interested in evaluating every aspect of the firm’s performance. They have to protect the
interests of all parties and see that the firm grows profitably. In view of thee requirement
of the various users of ratios, ratios are classified into following four important
categories:
Liquidity ratios - short-term financial strength
Leverage ratios - long-term financial strength
Profitability ratios - long term earning power
Activity ratios - term of investment utilization
Liquidity ratios measure the firm’s ability to meet current obligations;
Leverage ratios show the proportions of debt and equity in financing the firm’s assets;
Activity ratios reflect the firm’s efficiency in utilizing its assets; and
Profitability ratios measure overall performance and effectiveness of the firm
LIQUIDITY RATIOS:
41
It is extremely essential for a firm to be able to meet the obligations as they become
due. Liquidity ratios measure the ability of the firm to meet its current obligations
(liabilities). The liquidity ratios reflect the short-term financial strength and solvency of a firm. In fact, analysis of
liquidity needs the preparation of cash budgets and cash and funds flow statements; but
liquidity ratios, by establishing a relationship between cash and other current assets to
current obligations, provide a quick measure of liquidity. A firm should ensure that it
does not suffer from lack of liquidity, and also that it does not have excess liquidity. The
failure of a company to meet its obligations due to lack of sufficient liquidity, will result in
a poor credit worthiness, loss of credit worthiness, loss of creditors’ confidence, or even
in legal tangles resulting in the closure of the company. A very high degree of liquidity is
also bad; idle assets earn nothing. The firm’s funds will be unnecessarily tied up in
current assets. Therefore, it is necessary to strike a proper balance between high
liquidity and lack of liquidity.
The most common ratios which indicate the extent of liquidity are lack of it, are:
(i) Current ratio
(ii) Quick ratio.
(iii)Cash ratio and
(iv)Networking capital ratio.
1. Current Ratio:
Current ratio is calculated by dividing current assets by current liabilities.
Current ratio = Current assets
Current liabilities
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Current assets include cash and other assets that can be converted into cash within in a
year, such as marketable securities, debtors and inventories. Prepaid expenses are also
included in the current assets as they represent the payments that will not be made by
the firm in the future. All obligations maturing within a year are included in the current
liabilities. Current liabilities include creditors, bills payable, accrued expenses, short-
term bank loan, income tax, liability and long-term debt maturing in the current year.
The current ratio is a measure of firm’s short-term solvency. It indicates the
availability of current assets in rupees for every one rupee of current liability. A ratio of
greater than one means that the firm has more current assets than current claims
against them Current liabilities.
2. Quick Ratio:
Quick ratio also called Acid-test ratio, establishes a relationship between
quick, or liquid, assets and current liabilities. An asset is a liquid if it can be converted
into cash immediately or reasonably soon without a loss of value. Cash is the most liquid
asset. Other assets that are considered to be relatively liquid and included in quick
assets are debtors and bills receivables and marketable securities (temporary quoted
investments). Inventories are considered to be less liquid. Inventories normally require
some time for realizing into cash; their value also has a tendency to fluctuate. The quick
ratio is found out by dividing quick assets by current liabilities.
Quick ratio = Quick assets
Current liabilities
3. Cash Ratio:
43
Since cash is the most liquid asset, it may be examined cash ratio and its
equivalent to current liabilities. Trade investment or marketable securities are
equivalent of cash; therefore, they may be included in the computation of cash ratio:
Cash + Marketable Securities
Cash Ratio=
Current Liabilities
4. Interval Measure
Yet another, ratio, which assesses a firm’s ability to meet its regular cash expenses, is
the interval measure. Interval measure relates liquid assets to average daily operating
cash outflows. The daily operating expenses will be equal to cost of goods sold plus
selling, administrative and general expenses less depreciation (and other non cash
expenditures divided by number of days in a year (say 360).
Current assets - inventory
Interval measure =
Average daily operating expenses
5. Net Working Capital Ratio
The difference between current assets and current liabilities excluding short – term
bank borrowings in called net working capital (NWC) or net current assets (NCA). NWC is
sometimes used as a measure of firm’s liquidity. It is considered that between two firm’s
the one having larger NWC as the greater ability to meet its current obligations. This is
not necessarily so; the measure of liquidity is a relationship, rather than the difference
between current assets and current liabilities. NWC, however, measures the firm’s
potential reservoir of funds. It can be related to net assets (or capital employed)
Net working capital (NWC)
44
NWC ratio =
(Net assets (or) Capital Employed)
6. LEVERAGE RATIO:
The short-term creditors, like bankers and suppliers of raw materials, are more
concerned with the firm’s current debt-paying ability. On other hand, ling-term creditors
like debenture holders, financial institutions etc are more concerned with the firm’s long-
term financial strength. In fact a firm should have a strong short as well as long-term
financial strength. In fact a firm should have a strong short-as well as long-term financial
position. To judge the long-term financial position of the firm, financial leverage, or
capital structure ratios are calculated. These ratios indicate mix of funds provided by
owners and lenders. As a general rule there should be an appropriate mix of debt and
owners equity in financing the firm’s assets.
Leverage ratios may be calculated from the balance sheet items to determine the
proportion of debt in total financing. Many variations of these ratios exist; but all these
ratios indicate the same thing the extent to which the firms has relied on debt in
financing assets. Leverage ratios are also computed form the profit and loss items by
determining the extent to which operating profits are sufficient to cover the fixed
charges.
7. DEBT RATIO:
Several debt ratios may be used to analysis the long term solvency of the firm The firm
may be interested in knowing the proportion of the interest bearing debt (also called as
funded debt) in the capital structure. It may, therefore, compute debt ratio by dividing
total debt by capital employed or net assets. Capital employed will include total debt and
net worth
Total debt (TD)
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Debt ratio =
Total debt (TD) + Net worth (NW)
Debt-Equity Ratio:
The relationship describing the lenders contribution for each rupee of the
owners’ contribution is called debt-equity (DE) ratio is directly computed by dividing total
debt by net worth:
Total debt (TD)
Debt - equity ratio =
Net worth (NW)
8. Capital Employed to Net worth Ratio
It is another way of expressing the basic relationship between debt and
equity. One may want to know: How much funds are being contributed together by
lenders and owners for each rupee of owners’ contribution? Calculating the ratio of
capital employed or net assets to net worth can find this out:
Capital employed (CE)
Capital employed to net worth Ratio =
Net worth (NW)
COVERAGE RATIO:
46
Interest Coverage Ratio:
Debt ratios described above are static in nature, and fail to indicate the firm’s ability
to meet interest (and other fixed charges) obligations. The interest coverage ratio
or the times interest-earned is used to test the firm’s debt-servicing capacity. the
interest coverage ratio is computed by dividing earnings before interest and
taxes(EBIT)by interest charges:
EBIT
Interest coverage ratio=
Interest
ACTIVITY RATIOS:
Funds of creditors and owners are interested in various assets to generate
sales and profits. The better the management of assets, the larger the amount of sales.
Activity ratios are employed to evaluate the efficiency with which the firm manages and
utilizes its assets. These ratios are also called turnover ratios because they indicate the
speed with which assets are being converted or turned over into sales. Activity ratios,
thus, involves a relationship between sales and assets. A proper balance between sales
and assets generally reflects that assets are managed well. Several activity ratios are
calculated to judge the effectiveness of asset utilization.
10. Inventory Turnover Ratio:
Inventory turnover indicates the efficiency of the firm in producing and selling its
product. It is calculated by dividing the cost of goods sold by the average inventory:
Cost of goods sold
47
Inventory turnover Ratio =
Average inventory
(OR)
Net sales
Inventory
The average inventory is the average of opening and closing balances of inventory. The cost of
goods sold may not be available so we can compute inventory turnover as sales divided by
inventory In a manufacturing company inventory of finished goods is used to calculate inventory
turnover. This inventory turnover ratio indicates whether investment in inventory is efficiently
utilized or not. It, therefore, explains whether investment in inventory in within proper limits or
not. It is calculated by dividing the cost of goods sales by the average inventory. The inventory
turnover shows how rapidly the inventory in turning into receivable through sales. A high
inventory turnover is indicative of good inventory management. A low inventory turnover
implies excessive inventory levels than warranted by production and sales activities or a slow
moving or obsolete inventory.
Inventory Conversion Period:
It may also be of interest to see the average time taken for clearing the stock. This can
be possible by calculating the inventory conversion period. This period is calculated by dividing
the no. of days by inventory turnover ratio:
48
No. of days in the year
Inventory turnover ratio=
Inventory turnover ratio
11.Debtors (Accounts Receivable) Turnover Ratio:
A firm sells goods for cash and credit. Credit is used as a marketing tool by
number of companies. When the firm extends credits to its customers, debtors
(accounts receivable) are created in the firm’s accounts. Debtors are convertible into
cash over a short period and, therefore, are included in current assets. The liquidity
position of the firm depends on the quality of debtors to a great extent. Financial analyst
applies these ratios to judge the quality or liquidity of debtors (a) Debtors Turnover Ratio
(b) Debtors Collection Period Debtors’ turnover is found out by dividing credit sales by
average debtors:
Credit sales
Debtors turnover =
Debtors
Debtors’ turnover indicates the number of times debtors’ turnover each year generally,
the higher the value of debtors’ turnover, the more efficient is the management of credit.
To outside analyst, information about credit sales and opening and closing balances
of debtors may not be available. Therefore, debtors’ turnover can be calculated by
dividing Total sales by the year-end balances of debtors:
Sales
Debtors turnover =
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Debtors
Average Collection Period:
Average Collection Period is used in determining the collectibles of debtors and
the efficiency of collection efforts. In ascertaining the firms comparative strength and
advantage relative to its credit policy and performance
The average number of days for which the debtors remain outstanding is called
the Average Collection Period. The Average Collection Period measures the quality of the
debtors since it is indicated the speed of their collection.
360
Average Collection Period=
Debtors Turnover Ratio
[or]
Debtors
= X 360
Sales
13. Net Assets Turnover Ratio:
Net assets turnover can be computed simply by dividing sales by net sales (NA)
Sales
Net Assets Turnover =
50
Net assets
It may be recalled that net assets (NA) include net fixed assets (NFA) and net current
assets (NCA), that is, current assets (CA) minus current liabilities (CL). Since net assets
equal capital employed, net assets turnover may also be called capital employed, net
assets turnover may also be called capital employed turnover.
Total Assets Turnover:
Some analysts like to compute the total assets turnover in addition to or
instead of the net assets turnover. This ratio shows the firm’s ability in generating sales
from all financial resources committed to total assets.
Thus:
Sales
Total Assets Turnover =
Total assets
Total Assets (TA) include net fixed Assets (NFA) and current assets (CA)
(TA=NFA+CA)
15. Current Assets Turnover
A firm may also like to relate current assets (or net working gap) to sales. It may
thus complete networking capital turnover by dividing sales by net working capital.
Sales
Current assets turnover =
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Current assets
16. Fixed Assets Turnover:
The firm to know its efficiency of utilizing fixed assets separately. This ratio
measures sales in rupee of investment in fixed assets. A high ratio indicates a high
degree of utilization in assets and low ratio reflects the inefficient use of assets
Sales
Fixed Assets Turnover =
Fixed Assets
17. Working Capital Turnover Ratio:
Working Capital of a concern is directly related to sales. The current assets like debtors,
bills receivable, cash, and stock etc. change with the increase or decrease in sales. The Working
Capital is taken as:
Working Capital = Current Assets – Current Liabilities
This Ratio indicates the velocity of the utilization of net working capital. This Ratio indicates
the number of times the working capital is turned over in the course of a year. This Ratio
measures the efficiency with which the working capital is being used by a firm. A higher ratio
indicates the efficient utilization of working capital and the low ratio indicates inefficient utilization
of working capital.
Sales
Working capital turnover =
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Net working capital
PROFITABILITY RATIOS
A company should earn profits to survive and grow over a long period of time.
Profits are essential, but it world be wrong to assume that every action initiated by
management of a company should be aimed at maximizing profits, irrespective of
concerns for customers, employees, suppliers or social consequences. It is unfortunate
that the word profit is looked upon as a term of abuse since some firms always want to
maximize profits ate the cost of employees, customers and society. Except such
infrequent cases, it is a fact that sufficient profits must be able to obtain funds from
investors for expansion and growth and to contribute towards the social overheads for
welfare of the society.
Profit is the difference between revenues and expenses over a period of time
(usually one year). Profit is the ultimate output of a company, and it will have no future if
it fails to make sufficient profits. Therefore, the financial manager should continuously
evaluate the efficiency of the company in terms of profit. The profitability ratios are
calculated to measure the operating efficiency of the company. Besides management of
the company, creditors and owners are also interested in the profitability of the firm.
Creditors want to get interest and repayment of principal regularly. Owners want to get
a required rate of return on their investment. This is possible only when the company
earns enough profits.
Generally, two major types of profitability ratios are calculated:
Profitability in relation to sales.
Profitability in relation to investment.
16. Net Profit Margin
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Net profit is obtained when operating expenses; interest and taxes are subtracted
form the gross profit margin ratio is measured by dividing profit after tax by sales:
Net Profit
Net profit Ratio = X 100
Sales
Net profit ratio establishes a relationship between net profit and sales and
indicates and management’s in manufacturing, administrating and selling the products.
This ratio is the overall measure of the firm’s ability to turn each rupee sales into net
profit. If the net margin is inadequate the firm will fail to achieve satisfactory return on
shareholders’ funds. This ratio also indicates the firm’s capacity to withstand adverse
economic conditions.A firm with high net margin ratio would be advantageous position to
survive in the face of falling prices, selling prices, cost of production .
17. Net Margin Based on NOPAT
The profit after tax (PAT) figure excludes interest on borrowing. Interest is
tax deducts able, and therefore, a firm that pays more interest pays less tax. Tax saved
on account of payment of interest is called interest tax shield. Thus the conventional
measure of net profit margin-PAT to sales ratio- is affected by firm’s financial policy. It
can mislead if we compare two firms with different debt ratios. For a true comparison of
the operating performance of firms, we must ignore the effect of financial leverage, viz.,
the measure of profits should ignore interest and its tax effect. Thus net profit margin
(for evaluating operating performance) may be computed in the following way:
EBIT (1-T) NOPAT
Net profit margin = =
Sales Sales
18. Operating Expense Ratio:
54
The operating expense ratio explains the changes in the profit margin (EBIT to
sales) ratio. This ratio is computed by dividing operating expenses viz., cost of goods sold
plus selling expense and general and administrative expenses (excluding interest) by
sales.
Operating expenses
Operating expenses ratio=
Sales
19. Return on Investment (ROI)
The term investment may refer to total assets or net assets. The funds
employed in net assets in known as capital employed. Net assets equal net fixed assets
plus current assets minus current liabilities excluding bank loans. Alternatively, capital
employed is equal to net worth plus total debt.
The conventional approach of calculating return of investment (ROI) is to
divide PAT by investments. Investment represents pool of funds supplied by
shareholders and lenders, while PAT represent residue income of shareholders; therefore,
it is conceptually unsound to use PAT in the calculation of ROI. Also, as discussed earlier,
PAT is affected by capital structure. It is, therefore, more appropriate to use one of the
following measures of ROI for comparing the operating efficiency of firms:
BIT (1-T) EBIT (1-T)
ROI = ROTA = =
Total assets TA
EBIT (1-T) EBIT (1-T)
ROI = RONA = =
55
Net assets NA
Since taxes are not controllable by management, and since firm’s opportunities for
availing tax incentives differ, it may be more prudent to use before tax to measure ROI.
Many companies use EBITDA (Earnings before Depreciation, Interest, Tax and
Amortization) instead of EBIT to calculate ROI. Thus the ratio is:
EBIT
ROI=
Total Assets (TA)
20. Return on Equity (ROE)
Common or ordinary shareholders are entitled to the residual profits. The
rate of dividend is not fixed; the earnings may be distributed to shareholders or retained
in the business. Nevertheless, the net profits after taxes represent their return. A return
on shareholders equity is calculated to see the profitability of owners’ investment. The
shareholders equity or net worth will include paid-up share capital, share premium, and
reserves and surplus less accumulated losses. Net worth also be found by subtracting
total liabilities from total assets. The return on equity is net profit after taxes divided by
shareholders equity, which is given by net worth:
Profit after taxes PAT
ROE = =
Net worth (Equity) NW
56
ROE indicates how well the firm has used the resources of owners. In fact, this
ratio is one of the most important relationships in financial analysis. The earning of a
satisfactory return is the most desirable objective of business. The ratio of net profit to
owners’ equity reflects the extent to which this objective has been accomplished. This
ratio is, thus, of great interest to the present as well as the prospective Shareholders and
also of great concern to management, which has the responsibility of maximizing the
owners’ welfare.
The return on owners’ equity of the company should be compared with the ratios
of other similar companies and the industry average. This will reveal the relative
performance and strength of the company in attracting future investments.
21. Earnings per Share (EPS)
The profitability of the shareholders investments can also be measured in many
other ways. One such measure is to calculate the earnings per share. The earnings per
share (EPS) are calculated by dividing the profit after taxes by the total number of
ordinary shares outstanding.
Profit after tax
EPS =
Number of share outstanding
22. Dividends per Share (DPS or DIV)
The net profits after taxes belong to shareholders. But the income, which
they will receive, is the amount of earnings distributed as cash dividends. Therefore, a
large number of present and potential investors may be interested in DPS, rather than
57
EPS. DPS is the earnings distributed to ordinary shareholders dividend by the number of
ordinary shares outstanding.
Earnings paid to shareholders (dividends)
DPS=
Number of ordinary shares outstanding
23. Dividend – Payout Ratio
The Dividend – payout Ratio or simply payout ratio is DPS ( or total equity
dividends) divided by the EPS ( or profit after tax):
Equity dividends
Dividend Payout Ratio =
Profit after tax
Dividends per share DPS
= =
Earnings per share EPS
58
CHAPTER – IVDATA ANALYSIS AND INTERPRETATION
59
1. CURRENT RATIO
An indication of a company's ability to meet short-term debt obligations; the
higher the ratio, the more liquid the company is. Current ratio is equal to current
assets divided by current liabilities. If the current assets of a company are more than
twice the current liabilities, then that company is generally considered to have
good short-term financial strength. If current liabilities exceed current assets, then the
company may have problems meeting its short-term obligations.
CURRENT ASSETS
CURRENT RATIO = -------------------------------
CURRENT LIABILITIES
YEAR
CURRENT ASSETS
CURRENT
LIABILITIES
RATIO
2009 37458958 35737300 1.04
2010 79123668 59518613 1.33
2011 98954704 74765613 1.32
2012 135471895 87613251 1.55
60
2009 2010 2011 20120
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
RATIO
INTERPRETATION
Table 4.1 establishes relationship between current assets and current liabilities.
The ratio of current assets to current liabilities maintained by the company was not
considered satisfactory. The ratio was 1.04 in the year 2009 increased to 1.33 in the year
2010. The ratio again dropped to 1.32 in 2011 and increased to 1.55 in 2012.
Based on this company is not using the current assets in a proper manner. The
company not maintained a standard norm ratio i.e. 2:1 in any year.
61
2. NET WORKING CAPITAL RATIO
A measure of a company's operating liquidity expressed as current
assets less current liabilities. Companies with current liabilities that exceed current
asset are operating with a working capital deficiency which may prevent them from
fulfilling short term obligations such as accounts payables, operational expenses and
current interest payments. Analysts track net working capital over time in order
to assess a company's operational efficiency. Also called working capital.
NET WORKING CAPITAL RATIO NET WORKING CAPITAL
= -------------------------------------------*100
NET ASSETS
YEAR NET WORKING
CAPITAL
NET ASSETS
RATIO
2009 17216585 37458958 0.45
2010 19605055 79123668 0.24
2011 24189091 98954704 0.24
2012 47858644 135471895 0.35
62
2009 2010 2011 20120
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
INTERPRETATION
Networking capitals represents the excess of current assets over current liabilities
although networking capital is really not a ratio, it is frequently employed as a measured
of a company’s liquidity position. An enterprises should have sufficient networking capital
in order to able to meet the claims of creditors and day to day needs of business.
In 2009 Networking Capital to asset ratio 0.45 it was decreased to 0.24 in to 2010 and
2011, increased to 0.35 in 2012 but overall bases the Networking Capital to total asset
ratio was not considered satisfactory.
63
3. DEBT EQUITY RATIO
A measure of a company's financial leverage. Debt/equity ratio is equal to long-
term debt divided by common shareholders' equity. Typically the data from the prior
fiscal year is used in the calculation. Investing in a company with a higher debt/equity
ratio may be riskier, especially in times of rising interest rates, due to the additional
interest that has to be paid out for the debt.
A high debt/equity ratio generally means that a company has been aggressive in
financing its growth with debt. This can result in volatile earnings as a result of the
additional interest expense.
DEBT EQUITY RATIO =
YEAR DEBTORS FUNDS SHARE HOLDERS
FUNDS
RATIO
2009 81691789 55953280 1.46
2010 71199361 79110401 0.90
2011 108704785 105538626 1.03
2012 228077918 139071901 1.64
64
2009 2010 2011 20120
0.20.40.60.8
11.21.41.61.8
RATIO
INTERPRETATION
This is an important tool of financial analysis apprised financial structure of a
firm. A high ratio shows a large share financing by the creditors of firm, a low ratio
implies a smaller claim of creditors.
From the table 4.3 the Debt – Equity ratio maintained by the company is considered
satisfactory.
65
4. EQUITY RATIO
A financial indicator that measures a company's use of stockholders' equity to finance
operations. The ratio is calculated by dividing the total equity in the company by its total
assets. A high equity ratio indicates more reliance on equity financing than debt
financing.
A ratio used to help determine how much shareholders would receive in the event of
a company-wide liquidation. The ratio, expressed as a percentage, is calculated by
dividing total shareholders' equity by total assets of the firm, and it represents the
amount of assets on which shareholders have a residual claim. The figures used to
calculate the ratio are taken from the company's balance sheet.
EQUITY RATIO = SHARE HOLDERS FUNDS
TOTAL ASSETS
YEAR SHARE HOLDERS
FUNDS
TOTAL ASSETS RATIO
2009 55953280 37458958 1.49
2010 79110401 79123668 0.99
2011 105538626 98954704 1.07
2012 139071901 135471895 1.03
66
2009 2010 2011 20110
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
RATIO
INTERPRETATION
This ratio also known as euity ratio. As equity represents the relationship of
owners funds to total assets, higher the ratio or share of share holders in the capital of
the company, better is the long-term solvency position of the company. This ratio
indicates the extent to which the assets of the company can be lost without affecting the
interest of creditors of the company.
From the table 4.4 the equity ratio of the company is considered well throughout
the project period because it was more than 0.80
67
5. CAPITAL TURNOVER RATIO
A company's annual sales divided by its average stockholders' equity. Capital turnover is
used to calculate the rate of return on common equity, and is a measure of how well a
company uses its stockholders' equity to generate revenue. The higher the ratio is, the
more efficiently a company is using its capital. Also called equity turnover.
CAPITAL TURNOVER RATIO = NET INCOME
CAPITAL EMPLOYED
YEAR NET INCOME CAPITAL EMPLOYED RATIO
2009 123288048 17216585 7.16
2010 248904160 19605055 12.69
2011 277901517 24189091 11.48
2012 321716095 47858644 6.72
68
2009 2010 2011 20120
2
4
6
8
10
12
14
RATIO
INTERPRETATION
From the table 4.5 the capital turnover ratio of the company is not satisfactory
because the same ratio is decreasing from 8.19 to 5.85 in the year 2009 as compared
with 2010, and it also decreasing 5.85 to 5.61 from above standard. In the last year the
ratio is lesser than 2.50
69
6. GROSS PROFIT RATIO
What remains from sales after a company pays out the cost of goods sold. To obtain
gross profit margin, divide gross profit by sales. Gross profit margin is expressed as a
percentage.
GROSS PROFIT RATIO= GROSS PROFIT *100
NET INCOME
YEAR GROSS PROFIT NET INCOME RATIO
2009 123288048 123288048 7.16
2010 248904160 248904160 12.69
2011 277901517 277901517 11.48
2012 321716095 321716095 6.72
70
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr80.5
8181.5
8282.5
8383.5
8484.5
8585.5
RATIO
INTERPRETATION
Higher the ratio, the better it is a low ratio indicates unfavorurable trends in the
four of reducation in selling prices not accompanied by proportionate decrease in cost of
goods sold or increase I cost of production from the above table, the G.P ratio of the
company not considered satisfactory.
From table 4.6 the gross profit ratio of the company is decreasing from 31.18
percent to 28.94 percent , from 28.94 to 26.24 percent and 26.24 percent to 22.84
percent in the years 2008 to 2012.
71
7. OPERATING RATIO
A company's operating expenses divided by its operating revenues. More
generally, any of a number of ratios measuring a company's operating efficiency, such
as sales to cost of goods sold, net profits to gross income, operating expenses
to operating income, and net profit to net worth.
OPERATING RATIO = OPERATING COST *100
NET INCOME
YEAR OPERATING COST NET INCOME RATIO
2009 123308482 123288048 98.90
2010 221659395 249804160 98.73
2011 247035920 277901517 98.89
2012 287069939 321716095 98.23
72
2009 2010 2011 201297.8
98
98.2
98.4
98.6
98.8
99
RATIO
INTERPRETATION
Lower ratio, the better it is. Higher the ratio, the less favorable it is because it wold
leave asmaller margin of operating profit for the payment of dividends and the creation
of reserve. From the above table the operation ratio of the company considered not
satisfaction because in all the years the operation ratio is almost all 100 percent this
means that, the companies of cost is equal to sales.
8. OPERATING PROFIT RATIO
73
Operating profit for a certain period divided by revenues for that period.
Operating profit margin indicates how effective a company is
at controlling the costs and expenses associated with their normal business operations.
OPERATING PROFIT RATIO = OPERATING PROFIT *100
NET INCOME
YEAR OPERATING
PROFIT
NET INCOME RATIO
2009 12328804 123288048 1.10
2010 67447123 249804160 1.27
2011 30599166 277901517 1.11
2012 417813110 321716095 1.77
74
2009 2010 2011 20120
0.20.40.60.8
11.21.41.61.8
RATIO
INTERPRETATION
This ratio indicates the portion remaining out of every rupee worth of sales after
all operating cost and expenses have been met. For the calculation of this ratio, non-
operation exp, non-operating income are ignored. Higher the ratio is the better it is.
From the above table 4.8 the operating profit ratio is not considered satisfactory,
because it is less than 3 percent, the operating profit ratio has been increased from 0.73
percent to 2.07 percent and in the remaining years the ratio is decreasing from 2.07
percent to 1.10 percent, 0.23 percent and 0.28 percent respectively.
9. NET PROFIT RATIO
75
Net profit divided by net revenues, often expressed as a percentage.
This number is an indication of how effective a company is at cost control. The higher the
net profit margin is, the more effective the company is at converting revenue
into actual profit. The net profit margin is a good way of comparing companies in
the same industry, since such companies are generally subject
to similar business conditions. However, the net profit margins are also a good way to to
compare companies in different industries in order to gauge which industries are
relatively more profitable.
NET PROFIT RATIO = NET PROFIT AFTER TAX*100
NET INCOME
YEAR NET PROFIT AFTER
TAX
NET INCOME RATIO
2009 202836 123288048 1.64
2010 23353943 249804160 0.94
2011 31798817 277901517 1.14
2012 33099669 321716095 1.02
76
2009 2010 2011 20120
0.20.40.60.8
11.21.41.61.8
RATIO
INTERPRETATION
Higher the ratio, the better it is because it gives idea of improved efficiency
of the concern from the above table, we can say that up ratio of the company not
considered satisfactory because the ratio is allwas less 2 percent in all the year
77
10.INVENTRY TURNOVER RATIO
The ratio of a company's annual sales to its inventory; or equivalently, the fraction
of a year that an average item remains in inventory. Low turnover is a sign of
inefficiency, since inventory usually has a rate of return of zero.
INVENTRY TURNOVER RATIO = COST OF GOODS SOLD
AVERAGE INVENTORY
YEAR COST OF GOODS
SOLD
INVENTORY RATIO
2009 18297472 10887565 1.60
2010 43479185 17775970 2.44
2011 49196731 25579960 1.92
2012 55040516 36655060 1.50
78
2009 2010 2011 20120
0.5
1
1.5
2
2.5
RATIO
INTERPRETATION
From the above table the inventory turnover ratio is not considered good
because year 2010 2:1 and 2011 to 2:1 good but 2012,2009 is not good. The inventory
turnover ratio is decreased 2011,2012.
79
CHAPTER- VSUMMARY, FINDINGS AND
SUGGESTIONS
80
5.1 SUMMARY
The total project summary is divided into 5 chapters
Chapter 1 :-
Explains, introduction, objectives,methodology, main Limitation of the study,
introduction to financial statement analysis is the analysis of financial statement
is process of evaluating relationship between component parts of financial
statement to obtain a better understanding of the firm’s position and
performance.
The first task of financial analysis is to select the information relevant to the
decision under consideration from the total information contained in the financial
statement.
Second step is to arrange the information in a way to highlight significant
relationship.
Final step is interpretation and drawing of inferences and conclusion. Financial
analysis is the process of selection, relation and evaluation.
The focus of the study is on ratio analysis as the most widely used technique of
financial statement common –size statements as method of analysis statement.
The importance of ratio analysis and its limitation are briefly out lined in the
major points are summrised in the last of the study.
81
The ratio analysis technique is the most convenient and acceptable technique for
the analysis and interpretation of financial statement.
Chapter2:-
It is a health care industry. Health care is one of the largest sectors, in term of revenue
and employment, and this sector is expanding rapidly according to technopak advisors in
their reports ‘India health trends 2008’ healthcare, which is a US$ 35 billion industry in
India, is expected to reach over US$ 75 billion by 2012 and US$ 150 billion by 2017.
The industry has today become a growth engine for the Indian economy,
contributing substantially to the increase in the GDP, urban employment, to
achieve the vision of the powerful and resilient India. the increase in the number
of affordable middle class, rise in insured population , widening demand supply
gap, growing number of life style diseases especially cancer, cardiovascular
diseases, diabetes and chronic health care industry.
Other like wellness programmes, fitness programmes, health management, and
preventive medicine- synonyms of healthcare are growing more and more familiar
with each passing heart beat. A growing elderly population and rise in income
levels are also pushing for better facilities in the country.
To meet this growing demand, the country needs US$50 billion annually for the
next 20 years, says a confederation of Indian industry (CII) study. India needs to add
3.1 million beds by 2018 to the existing 1.1 million, and requires immediate
investment of US$82 billion, as per the technopak advisors report. It clearly indicates
the continuing potentiality in the health sector.
82
Chapter 3 :-
It deals with theoretical framework to financial statement analysis and various
technique of financial statement is ratio analysis, meaning of ratio, classification
of Ratio, importance etc...
Chapter 4 :-
It deals with data analysis ,by using different ratios, current ratio, networking
capital ratio, debt eqity ratio, prorietory ratio , capital turnover ratio, grass profit
ratio, operating ratio, operating profit ratio, net profit ratio.
Chapter 5 :-
It deals with Findings, suggestion, summary based on the four unit’s band
bibliography.
5.2 FINDINGS
83
The current ratio of the organization is comparatively high and stable
The prorietory ratio of the organization is considered good throughout the
year2010-2011 because it was more then 0.80 the gross profit ratio of the
organization was increase in the first two years and the reaming years
decreased.
The operating ratio for all the years not considered satisfactory the operating cost
in all the years i.e., from 2008 to 2012 is equal to income.
The operating profit ratio for all the years of the orgnization was not considered
satisfactory.
Major part source of fund and cash are utilizing towards the purchjages of fixed
assets and payment of borrowed funds
The working capital ratio of the organization was not satisfactory ,it is decreasing
year to year .
The capital turnover ratio of the organization considered good in all the year
expect 2012.
Net profit ratio of the organization is considered less then 2 percent in all the
years2008-2011
5.3 SUGGESSTIONS
84
On the basis of above findings, the following features are suggested to Indus hospital for
future growth
The organization is maintaining a current ratio of above the standard norm of
2:1 .except 2008 and 2010 thus it was suggested that the organization checks its
current ratio, so that the funds are not blocked, because it makes the firm funds
unnecessarily tied up in current assets and idle assets earn nothing.
The organization should tries to increase its quick assets ratio, because if the
inventory of the organization do not sell them, it could be very difficult.
The firm should increase its cost of goods sold , so as to earn of net profit
It was suggested that the organization must reduce its operating cost ,because
the operation cost of the organization is almost all or equal to net sales
The organization must reduce its cost of goods expenditure so as to increase the
profit as well as net profit
85
ANNEXURES
86
