CONTENTS

COMPANY PROFILE 02-15

THEORETICAL ASPECT 16-20

PRACTICAL ASPECT 21-29

RESEARCH METHODOLOGY 30

DATA ANALYSIS & GRAPHICAL 31-48

PRESENTATION

FINDINGS 49

CONCLUSION 50

SUGGESTION 51

BIBLIOGRAPHY 52

QUESTIONNAIRE 40-42

1 | P a g e

COMPANY PROFILE

OUR VISION

“TO BE AMONGST THE MOST ADMIRED COMPANIES IN INDIA COMMITED TO   

EXCELLENCE.” 

OUR MISSION 

BE A CUSTOMER OBSESSED COMPANY

NO.1 TYRE BRAND IN INDIA

DELIVER ENHANCED VALUE TO ALL STAKEHOLDERS

MOST PROFITABLE TYRE COMPANY IN INDIA

ENCHANCE GLOBAL PRESENCE THROUGH ACQUISITION

MOTIVATED AND COMMITTED TEAM DEVELOPMENT FOR HIGH

PERFORMANCE ORGANIZATION

JK ORGANISATION - A CENTURY OF TRUST

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

JK Organization, is one of the leading Private Sector Groups in India, was founded over 100

years ago - it's been a century of multi-business, multi-product and multi-location business

operation.

2 | P a g e

CUSTOMER SATISFACTION - OUR CREDO

Customer Satisfaction has always been our prime focus. We are indeed proud of our highly

experienced and professional team for winning the trust of customers and building strong

relationships with them.

Our 115 company owned stocking points serve over 4000 dealers across the country.

We have set up 130 JK Tyre Steel Wheels - a unique concept in car tyre retailing which

provides value added services like wheel balancing, alignment and tyre care to customers.

Our Truck Radial Care Centers offer after-sales service for Truck/Bus Radials, which operate

on 365 days / 24 hours basis. A large number of such centers have been set up along all major

National Highways.

JK Tyre has been among the top two tyre companies in respect of Customer Satisfaction, as per

JK Power Asia Pacific Study, for many years.

First Indian tyre company to introduce All Steel Truck & Bus Radials in India in 1999

Pioneered Radial technology in India by introducing passenger radials in 1977

First Indian tyre company to be recognized as 'SUPERBRAND' by Global Advertising

Professionals

R & D - TECHNOLOGY OUR DRIVING FORCE

We have always been pushing the limits of possibilities. Our research centers have been our

nerve centers for extensive research and development. These are:

Mr. Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) - Jaykaygram,

Kankroli (Rajasthan) and Faridabad (Haryana)

3 | P a g e

Dr. Raghupati Singhania Center of Excellence for Tyre and Vehicle Mechanics - Chennai (Tamil

Nadu)

FUTURE PLANS

India is fast emerging as a global automobile hub particularly for small cars. It offers immense

opportunities for JK Tyre to grow its business both organically and inorganically.

We have been constantly exploring ways of increasing our presence in different world markets,

through alliances and acquisitions in tyre and related business. In all our Endeavour’s, our core

focus is on customer delight. Enlarging the customer base, providing them with better quality of

services and more value added products, will continue to be the key areas of our thrust.

4 | P a g e

OUR FIRSTS - LEADING THE WAY

BACKGROUND AND INCEPTION OF THE COMPANY

1933 First in India to manufacture calico prints- {Juggilal Kamlapat cottons spinning and

weaving mills company, Kanpur.}

1940 First in India to manufacture steel bailing Hoops for jute and cotton and to make the

country self sufficient by meeting the entire demand- J.K Iron and Steel Co. Ltd.,

Kanpur.

1944 First in India to produce Aluminum Virgin Metal for Indian Bauxite-Aluminum

Corporation of India Ltd., Jaykayanagar.

1949 First in India to manufacture Engineering files- J.K. Engineer’s files Bombay.

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

1960 First in India to set up a Hydraulically operated Cane Crushing Mill for Kandsari Sugar

Plant and completed 100 ton plant.

1961 First in world to set up a plant for production of Hydrosulphite of soda by Sodium

Amalagam process- J.K. Chemicals Ltd., Bombay.

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

Ltd., Kota.

1965 First to produce sodium Sulphoxylate Formaldehyde [Rangolite C of Formosul] in India-

J.K. Chemicals Ltd., Bombay.

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

1976 First in India to produce steel belted Radial tyres for passenger car, trucks and buses-

J.K. Tyre plant, Kankroli.

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

5 | P a g e

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

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

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

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

1992 R&D centre setup at HASTERI.

1994 India’s first T-rated tyre launched Banmore Tyre Plant {BTP} Crossed 100 TPD.

1995 Mercedes Benz launched on JK STEEL RADIALS first tyre manufacturer in the world

to get ISO 9001.

1996 India’s first dual contact high tractions steel radial- aqua sonic launched. {Introduce steel

wheels}.

1998 First tyre manufacturer in the world to get QS 9000. Awarded CAPEXIL’S highest

export award for 1997-98.

1999 Synergy with VTL in procurement, marketing and production flexibility.

Completion of states of the art modernizations of truck radials

J.K. Tyres ranked 16th largest tyre company in the world

ISO- 14001 accreditation for environment and safety.

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

2001 J.K. industries received FOCUS LAC EXPORT award for the year 1999-2000.

Commendation certification of CII ND National exam. Go- carting championships held.

6 | P a g e

1.3 J K GROUP DIVERSIFICATION

JK ORGANISATION

J.K. Organization, founded over 100 years ago, is an eminent

industrial group in India. The Group has multi-business,

multi-product and multi-location operations

 

JK PAPER LTD.

JK Paper Limited is one of the leading manufacturers of

reading and writing paper

JK LAKSHMI CEMENT LTD.

JK Lakshmi Cement Limited is a well respected name in the

cement industry in India

FENNER (I) LTD.

7 | P a g e

Fenner (I) Limited is a leading manufacturer of Industrial and

Automotive Belts, Oil Seals, Power Transmission Accessories

and Textile Yarn

UMANG DAIRIES LTD.

The Creme de la creme of dairy foods

JK AGRI-GENETICS LTD.

At JK Agri-genetics limited, concentrates on Research and

Development, production, processing and marketing of hybrid

seeds.

JK SUGAR LTD.

The company's principle activity is to manufacture Sugar.

However, the company currently operates in two segments.

Power and Sugar

JK RISK MANAGERS AND INSURANCE BROKERS

LTD.

Services rendered to various clients for all facets of Insurance

both life & non-life.

CLINIRX RESEARCH PRIVATE LTD.

8 | P a g e

Full Service Contract Research Organization (CRO)

JK Tyres Plants

Mysore plant- 1 {VTP} - Karnataka

Mysore plant- 2 {VTP Radial} - Karnataka

Kankroli - Rajasthan

Banmore - Madhya Pradesh

9 | P a g e

COMPANY HISTORY

JK ORGANISATION

JK Organisation owes its name to Late Lala Juggilal Singhania, a dynamic personality, with

a broad vision. Inspired by the cause of the Swadeshi movement of Mahatma Gandhi, and

driven by the zeal to set up an indian enterprise, Late Lala Kamlapat Singhania founded

J.K. Organisation in the 19th century ushering in a new industrial era in India.

The name JK Organisation, which today is one of the leading Private Sector Groups in India,

was founded over 100 years ago. For J.K. Organisation it's been a century of multi-business,

multi-product and multi-location business operation. The companies in the Group have a

diverse portfolio, including Automotive Tyres & Tubes, Paper & Pulp, Cement, V-Belts, Oil

Seals, Power Transmission Systems, Hybrid Seeds, Woolen Textiles, Readymade Apparels,

Sugar, Food & Dairy Products, Cosmetics, etc.

10 | P a g e

VARIOUS DIMENSIONS:

JK SEEDS

JK SUGAR

JK PAPER LTD

JK LAKSHMI CEMENT

UMANG DAIRIES

CliniRX RESEARCH

FENNER(INDIA) Ltd.

JK ORGANISATION AT A GLANCE:-

11

YEAR EVENTS 1951 - The Comp. was incorporated as a private limited Comp. in West

Bengal in 14th February, 1951. Until 31st March 1970, the Comp. was engaged in the

managing agency business. Thereafter, the Comp. decided to undertake manufacturing

activities and obtained a letter of intent in February 1972 for manufacture of automobile

of & tubes.

The letter of intent was converted into an industrial license in February 1974 for

manufacture of 4 lakh nos. each automobile tyre & tubes per annum. The Comp. was

converted into a public limited Comp. on 1st April 1974. The manufacturing project was

promoted by Straw Products Ltd & J.K. Synthetics Ltd.

The Comp. entered into technical collaboration with General Tire International Co.,

U.S.A., [a subsidiary of General Tire & Rubber Co., U.S.A.s] for technical services for a

period of 5 years & sales agreement for supply of technical know-how, engineering &

documentation for operational facilities [for a period of 8 years from 23.8.73s].

Under the collaboration agreement, the Comp. has the right to use on its products the

wording 'Made in collaboration with General Tire International Co., USA'.

YEAR EVENTS 1982 - The company technical collaboration agreement with General

Tire International Co., was renewed for a further period of 5 years.

YEAR EVENTS 1987 - The overall working resulted in substantial profits despite a 51-

days strike as well as go-slow from 14th October. The strike had since then been resolved

& amicable settlement was reached. Efforts were on to launch a new pattern in steel

belted radial tyre.

YEAR EVENTS 1988 - New steel radial tyres for Maruti Gypsy & Tata mobile were

introduced. The Comp. proposed to incur an expenditure of Rs 300 lakhs for installation

of latest & sophisticated R&D equipment.

12

YEAR EVENTS 1989 - Several new patterns & sizes of tyre were introduced including

a semi-lug Nylon Truck tyre, all of which were well received in the market. 1991 -

Handeep Investment, Ltd., Hidrive Finance Ltd., Panchanan Investment Ltd., & Radial

Finance Ltd., J. K. International Ltd., Shivdham Properties Ltd., & J. K. Asia Pacific,

Ltd., are subsidiaries of Company.

YEAR EVENTS 1992 – The J.K. International division expanded its activities by

opening its office in Moscow besides starting Company's subsidiaries in U.K. and

Honkong. The radial tyre for tractors & business launched in the previous year were well

received.

YEAR EVENTS 1993 - New radial tyre `Brute' & `Ultima' were introduced. The Comp.

was in the process of developing steel belted radial tyre for prestigious cars in the

Mercedes Benz, Peugeot, Daewoo race & Opel Astra. A new pattern developed for bus

and trucks `PE-T8' was well received in the market.

YEAR EVENTS 1994 - The Comp. maintained its pace of growth, despite steep rise in

raw material & input costs & competition. The Company effected an all round cost

reduction & attained higher capacity utilization at both the tyre plants at Jaykaygram and

Banmore.

The T-rated Ultima tyre launched for new generation cars found its acceptance in DCM

Daewoo `Ceilo'. Also J.K. Steel radial was chosen for Mercedes Benz India.

- The Comp. undertook to develop steel radials for GM `Astra'. PAL `Peugekot' FIAT's,

`UNO' & M and M `Ford'.

- The Comp. launched a premium truck tyre `Jet Trak' - 39 which was introduced to meet

the need of the heavy load market. The new tractor rear tyre `SONA' was well received in

the market.

13

YEAR EVENTS 1996 - During this period, a new Car tyre 'Jet Drive XS', the widest

nylon car tyre for Maruti 800 was launched. Along with new semi-lug & heavy duty lug

tyre for trucks, a new lug tyre for super heavy load applications 'Jet Trak 39' was also

introduced. In the Radial category, 'Ultima XR Radial', a terrain tyre was introduced. All

these products were well received in the market.

Both the tyre plants operated to full capacity. In line with JK tyre, the radials unit

introduced the dual contact high traction & high performance Aquasonic steel radial car

tyre. The unit also developed India first & only H-rated ultima Xs' especially for

Mercedes - Benz Cars.

YEAR EVENTS 2000 - The Comp. proposes to reduce its debt by Rs 125 crore in the

current fiscal from the current level of Rs 635 crore by way of loan repayment.

The Comp. & Indian Oil Corporation have entered into a marketing alliance for installing

digital air pressure gauges and setting up sales & services outlets at IOC petrol stations

throughout the country.

YEAR EVENTS 2001 - Raghupati Singhania managing director of J. K. Industries has

been appointed the 19th Chairman of Automotive Tyre Manufacturers Association, the

representative body of tyre industry in India.

YEAR EVENTS 2002- J. K. Industries Ltd has informed BSE that CRISIL has assigned

a P1+ rating to the Commercial Paper programme of company.

YEAR EVENTS 2003 - J. K. Industries Ltd [JKIs] has a new Marketing Director in Mr.

Ajay Kapila. Before joining JKI, Mr Kapila was Senior Vice-President [Sales &

Marketing’s] at Kinetic Engineering limited He was also Director on board & operational

head of Kinetic direct selling arm - Kinetic Marketing Services Ltd.

14

Completes its comprehensive restructuring exercise of businesses that leads to its

emergence as a pure automotive tyre company. Along with the de-merger of its non-tyre

business, Sugar & Agri Seeds, into separate companies namely J. K. Sugar Ltd & J. K.

Agri-Genetics Ltd, JKI also completes the merger of Vikrant Tyre Ltd with itself.

J. K. Industries delists from Jaipur Stock Exchange

divested its wholly-owned subsidiary called J. K. Drugs & Pharmaceuticals Ltd to TEVA

Pharmaceuticals of Israel.

YEAR EVENTS 2004 -J. K. Industries Ltd has informed that its securities are delisted

from Delhi Stock Exchange Association Ltd [DSEs] w.e.f. January 29, 2004.

YEAR EVENTS 2007 - J. K. Industries Ltd has informed that the name of Comp. has

been changed from J. K. Industries Ltd' to 'J. K. Tyre and Industries Ltd' w.e.f. April 02,

2007.

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

Ltd.

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

Rs.75 per Share.

THEORETICAL ASPECT

15

INTRODUCTION OF RATIO ANALYSIS

There are various methods or techniques used in analyzing financial statements

such as comparative statements, trend analysis, common – size statements, schedule of

changes in working capital, funds flow and cash flow analysis, cost-volume-profit

analysis and ratio analysis. The ratio analysis is one of the most powerful tools of

financial analysis. It is the process of establishing and interpreting various ratios

(quantitative relationship between figures and group figures). It is with the help of ratios

that the financial statements can be analyzed more clearly and decision made from such

analysis.

MEANING OF RATIO:

A ratio is a simple arithmetic expression of relationship of one to other. It may be

defined as the indicated quotient of two mathematical expressions.

According to Accountant’s Handbook by Wixon, Kell and Bedford, a ratio “is

an expression of the quantitative relationship between two numbers”.

According to Myers, Ratio analysis is a “study of relationship among the various

financial factors in a business”.

FINANCIAL RATIO ANALYSIS:

Ratio analysis is a powerful tool of financial analysis. A

ratio is defined as “the indicated quotient of two mathematical expressions” and as “the

relationship between two or more things”. In financial analysis a ratio is used as a

benchmark for evaluating the financial position and performance of a firm. The absolute

accounting figures reported in the financial statement do not provide a meaningful

understand of the performance and financial position of a firm. An accounting figure

conveys meaning when it is related to some other relevant information.

The relation between two accounting figures, expressed

mathematically is known as a financial ratio (or simply as a ratio) ratio help to summarize

large quantities of financial data and to make qualitative judgment about the firm’s

16

financial performance. The point to note is that a ratio reflecting a quantitative

relationship helps to form a qualitative judgment.

NATURE OF RATIO ANALYSIS

Standards of comparison

A single ratio in itself does not indicate favorable or

unfavorable condition. It should be compared with some standards. Standard of

comparison may consist of.

Past ratio i.e. ratio calculated from the financial statement of the some firm.

Competitor’s ratios, i.e. ratios of same selected firms, especially the most

progressive and successful competitor, at the same point in time.

Industry ratios i.e. ratios or the industry to which the firm belongs and

Projected ratios, i.e. ratios developed using the projected or Performa, financial

statements of the same firm.

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

They are,

1. Liquidity ratio

2. Leverage ratio

3. Activity ratio

4. Profitability ratio

I. Liquidity ratio

17

Liquidity ratios measure the ability of the form to meet its current obligation. In

fact, analysis of liquidity needs the preparation of cash budgets and cash and fund flow

statement, but liquidity ratios by establishing a relationship between cash and other

current assets to currents obligations, provide a quick measure of liquidity. A firm

ensures that it does not suffer from lack of liquidity, and also that it does not have excess

liquidity, therefore it is necessary to strike a proper balance between high liquidity and

lack of liquidity.

The most common ratios indicate the extent of liquidity or lack of it is:

Current ratio

Quick ratio

Absolute liquidity ratio

II.LEVERAGE RATIOS

Leverage ratios are calculated t analyze the long-term financial position of the

firm. These indicate mix of funds provided by owners and lenders. As a general rule,

there should be an appropriate mix be debt and owners equity in financing the firm’s

assets. The process of magnifying the shareholders return through the use of debt is

called “financial gearing” or “trading on equity”. Leverage ratios calculated to measure

the financial risk and firm’s ability of using debt to share holder’s advantages.

Interest coverage ratio

Capital equity ratio

III.ACTIVITY (OR) TURNOVER RATIOS

18

The turnover ratios indicate the efficiency with which the capital employed is

rotated in the business. The ratios are employed to evaluate the efficiency with which the

firm manages and utilizes its assets to indicate the speed with which assets are being

converted on turned over into sales. A proper balance sales and generally reflects that

assets are managed well.

Debtor’s turnover ratio.

Total assets turnover ratio.

Fixed assets turnover ratio.

Current assets turnover ratio.

IV.PROFITABILITY RATIO

Profitability is an indication of the efficiency with which the operations of the

business are carried on. Bankers, financial institutions and other creditors look at the

profitability ratios as an indicator whether or not the firm earns substantially more than it

pays interest for the use of borrowed finds and whether the ultimate repayment of their

debt appears reasonably certain. Owners are interested to know the profitability as it

indicates the return, which they can get their investments.

Gross profit ratio

Net profit ratio

Operating profit ratio

Operating ratio

Return on investment ratio

Return on equity

EPS

DPS

Pay out

OBJECTIVES

19

To know, whether the company is able to pay debt promptly or not.

To study the current financial position of the company.

To know the ability of the firm to meet fixed interest and the cost and repayment

schedules associated with the long term borrowings.

To know about the general profitability of the firm in relation to the sales.

To know about the overall profitability of the firm in relation to its investment.

To find ability of the company in utilizing of its assets.

To find companies long term solvency and survival.

PRACTICAL ASPECT

20

1. Current ratio:

This ratio relates current assets to current liabilities. The current ratio indicates

the ability of the organization to meet its current obligations. It measures short-term

solvency of the concern.

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

Current assets

Current ratio=

Current liabilities

years Current assets Current liabilities Current ratio

2004 335.21 126.20 2.66:1

2005 363.31 172.53 2.11:1

2006 525.04 398.06 1.32:1

2007 984 638.12 1.54:1

2008 1488 892.6 1.66:1

2.Interest coverage:-

21

The interest coverage ratio or the times-interest-earned is one of the most

conventional coverage ratios used to test the firms debt-servicing capacity.it can be

calculated by dividing EBIT with interest

EBIT

Interest coverage=

INTEREST

years EBIT

(in.Rs.Cr)

INTEREST

(in.Rs.Cr)

Interest coverage

ratio

2004 132.59 9.92 13.37

2005 125.89 11.85 10.62

2006 283.64 10.12 28.03

2007 127.52 28.09 4.54

2008 441.32 28.30 15.59

3.Capital equity ratio:-

22

This is the ratio which expressing the basic relationship between debt and equity.

Calculating the ratio of Net assets to Net worth can find this ratio.

Capital employed

Capital equity ratio =

Net worth

Capital employed = Total debt + Net worth

years Capital employed

(in.Rs.Cr)

Net worth

(in.Rs.Cr)

Capital equity ratio

2004 435.34 435.34 1.00

2005 482.82 482.83 0.99

2006 597.86 597.86 1.00

2007 930.78 878.12 1.06

2008 1323.40 1228.40 1.08

4. Debtors turnover ratio:-

23

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

Sales

Debtors turn over =

Debtors

years Sales Debtors Debtors turnover

ratio

2004 711.50 276.21 2.58times

2005 922.34 217.42 4.24times

2006 1197.14 412.72 2.90times

2007 2753.22 792.02 3.48times

2008 3604.7 1057.40 3.41times

5. Total assets turnover ratio:-

24

This ratio shows the firms ability in ngenerating sales from all financial resources

committed ton total assets.

Sales

Total assets turnover=

Total assets

years sales Total assets Total assets turnover

ratio

2004 711.50 435.34 1.63

2005 922.34 482.82 1.91

2006 1197.14 597.86 2.00

2007 2753.22 930.78 2.96

2008 3604.7 1323.40 2.72

6.Fixed assets turnover ratio:-

25

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

assets.

Sales

Fixed assets turn over ratio=

Net fixed assets

Years sales Net fixed assets Fixed assets

turnover ratio

2004 711.50 133.24 5.34

2005 922.34 170.05 5.42

2006 1197.14 156.79 7.64

2007 2753.22 247.03 11.15

2008 3604.7 290.9 12.39

7.Curent assets turnover ratio:-

26

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

current assets.

Sales

Current assets turnover ratio=

Net current assets

Years sales Net current assets Current assets

turnover ratio

2004 711.50 209.01 3.40

2005 922.34 190.79 4.83

2006 1197.14 126.99 9.42

2007 2753.22 345.89 7.96

2008 3604.7 595.40 6.05

8. Gross profit ratio:-

27

This ratio expresses relationship between gross profit and net sales. It relates the

efficiency with which management produces each unit of product. It indicates the degree

to which the selling price of goods per unit may decline without resulting in losses from

operations to the firm.

The first profitability ratio n relation to sales is the gross profit ratio it is

calculated by dividing the gross profit by sales.

Gross profit

Gross profit ratio = X 100

Sales

Gross profit = Net sales – cost of goods sold

Cost of goods sold = power & fuel + other manufacturing expenses

Year Gross Profit

(in.Rs.Cr)

Sales

(in.Rs.Cr)

Gross profit Ratio

(%)

2004 655.38 711.50 92.11

2005 819.88 922.34 88.89

2006 994.86 1197.14 83.10

2007 2178.53 2753.22 79.12

2008 2887.40 3604.7 80.11

9.Net profit ratio:-

28

Net profit ratio is obtained when operating expenses; interest and taxes subtracted

from the gross profit. Net profit ratio helps in determining efficiency with which affairs

of the business are being managed. This ratio is the overall measure of the firm’s ability

to turn each rupee sales into net profit. The ratio is thus an effective measure to check the

profitability of business.

The net profit margin ratio is measured by dividing profit after tax by sales.

Profit after tax

Net profit margin= ×100

Net sales

Years Profit after tax

(in.Rs.Cr)

Net Sales

(in.Rs.Cr)

Net profit margin

2004 94.13 711.50 13.23%

2005 71.09 922.34 7.71%

2006 220.12 1197.14 18.39%

2007 65.23 2753.22 2.37%

2008 325.70 3604.7 9.04%

RESEARCH METHODOLOGY

29

Research methodology is a way to systematically solve the research problem. It deals

with the objective of a research study, the method of defining the research problem, the

type of hypothesis formulated, the type of data collected, method used for data collecting

and analyzing the data etc. The methodology includes collection of primary and

secondary data.

TYPE OF RESEARCH

DESCRIPTIVE RESEARCH

The study follows descriptive research method. Descriptive studies aims at portraying

accurately the characteristics of a particular group or situation. Descriptive research is

concerned with describing the characteristics of a particular individual or a group. Here

the researcher attempts to present the existing facts by collecting data.

5.2 RESEARCH DESIGN

A research design is a basis of framework, which provides guidelines for the rest

of research process. It is the map of blueprint according to which, the research is to be

conducted. The research design specifies the method of study. Research design is

prepared after formulating the research problem.

5.3 SOURCES OF DATA

Data are the raw materials in which marketing research works. The task of data collection

begins after research problem has been defined and research design chalked out. Data

collected are classified into primary data and secondary data

PRIMARY DATA

Questionnaires were used for collecting primary data

SECONDARY DATA

Secondary data were collected from the company’s annual publications,

memorandums of settlements, newspapers, journals, websites, and from library

books

SAMPLE SIZE: NIL

DATA ANALYSIS & GRAPHICAL PRESENTATION

30

1. Current ratio:

This ratio relates current assets to current liabilities. The current ratio indicates

the ability of the organization to meet its current obligations. It measures short-term

solvency of the concern.

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

Current assets

Current ratio=

Current liabilities

years Current assets Current liabilities Current ratio

2004 335.21 126.20 2.66:1

2005 363.31 172.53 2.11:1

2006 525.04 398.06 1.32:1

2007 984 638.12 1.54:1

2008 1488 892.6 1.66:1

Analysis:

The current ratio of the company is decreased from 2004 to 2006 as 2.66:1,

2.11:1, 1.32:1, later it is increased from 2006 to 2008 as 1.32:1, 1.54:1, and 1.66:1.

The graph between Years and Current ratio shows as below

31

2004 2005 2006 2007 20080

0.5

1

1.5

2

2.5

3

CURRENT RATIO

CURRENT RATIO

YEARS

CURR

ENT

RATI

O

Interpretation:

In the year of 2004, 2005 the current ratio of TechJK TYRE maintains the

standards of 2:1. After the situation is less than 2:1 it shows the margin of safety for

creditors is low and company may be struggling to meet their obligations to pay.

2.Interest coverage:-

32

The interest coverage ratio or the times-interest-earned is one of the most

conventional coverage ratios used to test the firms debt-servicing capacity.it can be

calculated by dividing EBIT with interest

EBIT

Interest coverage=

INTEREST

years EBIT

(in.Rs.Cr)

INTEREST

(in.Rs.Cr)

Interest coverage

ratio

2004 132.59 9.92 13.37

2005 125.89 11.85 10.62

2006 283.64 10.12 28.03

2007 127.52 28.09 4.54

2008 441.32 28.30 15.59

Analysis:-

The interest coverage ratio of the firm for 2004 is 13.37 after the

year it decraesed to 10.62 in the year 2005. Again it increased to 28.03 later years it

decreased to 4.54 & it finally reached to 15.59.

The graph between Years and Interest coverage ratio shows as below

33

2004 2005 2006 2007 20080

5

10

15

20

25

30

Interest coverage ratio

Interest coverage ratio

years

inte

rest

cove

rage

ratio

Interpretation:-

The interest coverage ratio of higher ratio is desirable.the analysis indicates that

the firm using debt in conservatively.It is higher in the year 2006 i.e.28.03, it is low in the

year 2007 i.e.4.54.

3.Capital equity ratio:-

34

This is the ratio which expressing the basic relationship between debt and equity.

Calculating the ratio of Net assets to Net worth can find this ratio.

Capital employed

Capital equity ratio =

Net worth

Capital employed = Total debt + Net worth

years Capital employed

(in.Rs.Cr)

Net worth

(in.Rs.Cr)

Capital equity ratio

2004 435.34 435.34 1.00

2005 482.82 482.83 0.99

2006 597.86 597.86 1.00

2007 930.78 878.12 1.06

2008 1323.40 1228.40 1.08

Analysis:-

Capital equity ratio of the firm for 2004 to 2008 are 1, 0.99, 1, 1.03, 1.08.it is

decreased from 2004 to 2005 after the years it raised to 1.08.

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

35

2004 2005 2006 2007 20080.94

0.96

0.98

1

1.02

1.04

1.06

1.08

1.1

CAPITAL EQUITY RATIO

CAPITAL EQUITY RATIO

YEARS

CAPI

TAL E

QUI

TY R

ATIO

Iterpretation:-

The funds being contributed by the lenders and owners for each rupee is almost

i.e. Rs.1/-.It indicates that the firm maintained the constant capital and equity in the equal

proportion change.

4. Debtors turnover ratio:-

36

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

Sales

Debtors turn over =

Debtors

years Sales Debtors Debtors turnover

ratio

2004 711.50 276.21 2.58times

2005 922.34 217.42 4.24times

2006 1197.14 412.72 2.90times

2007 2753.22 792.02 3.48times

2008 3604.7 1057.40 3.41times

Analysis:-

Debtor’s turnover ratio for the years 2004, 2005, 2006, 2007 and 2008 are 2.58,

4.24, 2.90, 3.48 and 3.41 respectively. It is raised to 4.24 for the year 2005 after it

decreased to 3.41 in the year 2008.

The graph between Years and Debtors turnover ratios shows as below

37

2004 2005 2006 2007 20080

0.5

1

1.5

2

2.5

3

3.5

4

4.5

DEBTORS TURNOVER RATIO

DEBTORS TURNOVER RATIO

YEARS

CURR

ENT

RATI

O

Interpretation:-

The ratios are more than 2, this indicates the firm is good at the management of

credit. It is high in the year 2005 and least in the year 2004. The firm maintained

conversion of the debtor’s funds to sales is sufficiently.

5. Total assets turnover ratio:-

38

This ratio shows the firms ability in ngenerating sales from all financial resources

committed ton total assets.

Sales

Total assets turnover=

Total assets

years sales Total assets Total assets turnover

ratio

2004 711.50 435.34 1.63

2005 922.34 482.82 1.91

2006 1197.14 597.86 2.00

2007 2753.22 930.78 2.96

2008 3604.7 1323.40 2.72

Analysis:-

Total assets turnover ratio of the year 2004 to 2008 are 1.63, 1.91, 2.00, 2.96 and

2.72 times respectively.it is gradually increased year by year.

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

39

2004 2005 2006 2007 20080

0.5

1

1.5

2

2.5

3

3.5

TOTAL ASSETS TURNOVER RATIO

TOTAL ASSETS TURNOVER RATIO

YEARS

TOTA

L ASS

ETS

TURN

OVE

R RA

TIO

S

Interpretaion:-

The total assets turnover ratio of the firm are 1.63, 1.91, 2, 2.96 and 2.72 times it

implies that the firm generate a sales more than one for one rupee investment on total

assets.

6.Fixed assets turnover ratio:-

40

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

assets.

Sales

Fixed assets turn over ratio=

Net fixed assets

Years sales Net fixed assets Fixed assets

turnover ratio

2004 711.50 133.24 5.34

2005 922.34 170.05 5.42

2006 1197.14 156.79 7.64

2007 2753.22 247.03 11.15

2008 3604.7 290.9 12.39

Analysis:-

The fixed assets turnover ratios for 2004 to 2008 are 5.34, 5.42, 7.64, 11.15 and

12.39 times respectively. It was increased from 2004 to2008.

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

41

2004 2005 2006 2007 20080

2

4

6

8

10

12

14

Fixed assets turn over ratio

Fixed assets turn over ratio

YEARS

FIXE

D AS

SETS

TUR

N O

VER

RATI

OS

Interpretation:-

Increasing fixed assets turnover ratio implies that the firms utilization of fixed

assets is increased.

7.Curent assets turnover ratio:-

42

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

current assets.

Sales

Current assets turnover ratio=

Net current assets

Years sales Net current assets Current assets

turnover ratio

2004 711.50 209.01 3.40

2005 922.34 190.79 4.83

2006 1197.14 126.99 9.42

2007 2753.22 345.89 7.96

2008 3604.7 595.40 6.05

Analysis:-

The current assets turnover ratios for the years from 2004 to 2008 are 3.40, 4.83,

9.42, 7.96 and 6.05 times.

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

43

2004 2005 2006 2007 20080

1

2

3

4

5

6

7

8

9

10

Current assets turnover ratio

Current assets turnover ratio

YEARS

CURR

ENT

ASSE

TS T

URN

OVE

R RA

TIO

S

Interpretation:-

It is increased from 2004 to 2006 and then decreased to 6.05 times for the year

2008.it indicates that the usage of current assets is more than its investments.

8. Gross profit ratio:-

44

This ratio expresses relationship between gross profit and net sales. It relates the

efficiency with which management produces each unit of product. It indicates the degree

to which the selling price of goods per unit may decline without resulting in losses from

operations to the firm.

The first profitability ratio n relation to sales is the gross profit ratio it is

calculated by dividing the gross profit by sales.

Gross profit

Gross profit ratio = X 100

Sales

Gross profit = Net sales – cost of goods sold

Cost of goods sold = power & fuel + other manufacturing expenses

Year Gross Profit

(in.Rs.Cr)

Sales

(in.Rs.Cr)

Gross profit Ratio

(%)

2004 655.38 711.50 92.11

2005 819.88 922.34 88.89

2006 994.86 1197.14 83.10

2007 2178.53 2753.22 79.12

2008 2887.40 3604.7 80.11

Analysis:

The calculated gross profit ratio indicates that the proportion of gross profit to

sales shows decreased figures from year 2004 i.e. 92.11 to79.12 in the year 2007 later

year it increased to 80.11

45

The graph between Years and Gross profit ratio shows as below

2004 2005 2006 2007 200870

75

80

85

90

95

Gross profit ratio (%)

Series1

year

gros

s pro

fit ra

tio

Interpretation:

Gross profit ratio of the firm is highest in the year 2004 is 92.11% it indicates that

firm got more sales for attaining more profit. Firms performance is good in the year 2008

i.e. 80.11%.

9.Net profit ratio:-

46

Net profit ratio is obtained when operating expenses; interest and taxes subtracted

from the gross profit. Net profit ratio helps in determining efficiency with which affairs

of the business are being managed. This ratio is the overall measure of the firm’s ability

to turn each rupee sales into net profit. The ratio is thus an effective measure to check the

profitability of business.

The net profit margin ratio is measured by dividing profit

after tax by sales.

Profit after tax

Net profit margin= ×100

Net sales

Years Profit after tax

(in.Rs.Cr)

Net Sales

(in.Rs.Cr)

Net profit margin

2004 94.13 711.50 13.23%

2005 71.09 922.34 7.71%

2006 220.12 1197.14 18.39%

2007 65.23 2753.22 2.37%

2008 325.70 3604.7 9.04%

Analysis:-

Net profit margin ratio for the years from 2004 to 2008 are 13.25%, 7.71%,

18.39%, 2.37% and 9.04%.it is highest in the year 2006 i.e. 18.39% and the least in the

year 2007 i.e. 2.37%.

The graph between Years and Net profit ratio shows as below

47

2004 2005 2006 2007 20080.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

Net profit margin

Net profit margin

YEARS

NET

PRO

FIT

RATI

OS

(%)

Interpretation:-

Through this ratio overall profitability can be measured after adjusting non-

operating income & non-operating expenses. Firm showing best performance in the year

2006.in the year 2008 it is good.

FINDINGS

48

Firm maintained liquidity ratio indicates that it is in standards in the years 2004 &

2005. In the next years it is below the standards.

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

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

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

Gross profit is high in the years 2004 after the years firm gets fluctuations finally

it is in good position.

In the 2004 & 2005 years it is having more operating expenses than to sales it is

well for next years.

Returns is not in preferable way it is below 25% on average.

Earnings on each share are good condition for the firm.

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

CONCLUSION

49

The company’s overall position is at a good position. Particularly the

current year’s position is well due to raise in the profit level from the last year position. It

is better for the organization to diversify the funds to different sectors in the present

market scenario.

Financial Analysis is the process of evaluating businesses and other

finance-related entities to determine their suitability for investment. Typically, financial

analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable

enough to be invested in. One of the most common ways of analyzing financial data is to

calculate ratios from the data to compare against those of other comparable companies. In

Infinancials, financial ratios are categorized according to the financial aspect of the

business which the ratio measures: Profitability, Asset Utilization, Capital Structure on a

specific tab, Financial Ratios.  Financial analysis allows for comparisons between

companies, between industries and also between a single company and its industry

average or peer group average.

SUGGESTIONS

50

Although firm maintains sufficient liquidity, it is needed to increase, in order to

attain future demand.

Because of being a soft solutions JK TYRE ltd need to raise their turnovers to get

good impression on the maintenance.

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

rescission period.

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

projects it will happens.

Although the earnings on each share is good payment to the share holders is below

50%.it is better to maintain 50% to 75%, it will helps attracting share holders

towards invest.

BIBLIOGRAPHY

51

REFFERED BOOKS

FINANCIAL MANAGEMENT - I. M. PANDEY

MANAGEMENT ACCOUNTANCY - PILLAI & BAGAVATI

MANAGEMENT ACCOUNTING – SHARMA & GUPTA

INTERNET SITE

www.ercap.org

www.wikipedia.com

www.nwda.gov.in

52

Key Financial Ratios of JK Tyre and Industries

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

Investment Valuation RatiosFace Value 10.00 10.00 10.00 10.00 10.00Dividend Per Share 3.50 2.50 3.00 3.50 2.70Operating Profit Per Share (Rs) 118.70 68.12 81.40 117.50 92.93

Net Operating Profit Per Share (Rs) 1,288.69 1,375.10 1,168.60 895.56 1,201.70

Free Reserves Per Share (Rs) -- 141.64 141.79 130.02 93.27Bonus in Equity Capital 0.09 0.09 0.09 0.09 0.09Profitability RatiosOperating Profit Margin(%) 9.21 4.95 6.96 13.12 7.73Profit Before Interest And Tax Margin(%) 7.06 3.15 4.55 10.09 4.70

Gross Profit Margin(%) 7.08 3.15 4.57 10.14 4.72Cash Profit Margin(%) 4.69 1.96 3.15 6.87 2.76Adjusted Cash Margin(%) 4.69 1.96 3.15 6.87 2.76Net Profit Margin(%) 1.98 0.19 1.27 4.42 0.38Adjusted Net Profit Margin(%) 1.98 0.19 1.27 4.42 0.38Return On Capital Employed(%) 13.09 7.74 11.99 24.84 14.94Return On Net Worth(%) 14.22 1.64 8.57 23.57 3.33Adjusted Return on Net Worth(%) 18.39 1.42 5.27 20.11 -2.86Return on Assets Excluding Revaluations 180.70 163.32 174.07 168.88 138.97

Return on Assets Including Revaluations 180.70 163.32 174.07 168.88 138.97

Return on Long Term Funds(%) 20.70 10.99 19.92 30.48 21.94Liquidity And Solvency RatiosCurrent Ratio 0.60 0.63 0.64 0.79 0.60Quick Ratio 0.84 0.68 0.69 0.61 0.72Debt Equity Ratio 2.99 2.50 1.84 1.24 1.91Long Term Debt Equity Ratio 1.52 1.47 0.71 0.83 0.98Debt Coverage RatiosInterest Cover 1.88 1.07 2.49 4.17 1.55Total Debt to Owners Fund 2.99 2.50 1.84 1.24 1.91Financial Charges Coverage Ratio 2.42 1.66 2.04 3.05 1.65Financial Charges Coverage Ratio Post Tax 2.06 1.66 2.00 2.69 1.71

Management Efficiency RatiosInventory Turnover Ratio 7.41 9.78 7.91 9.11 14.03Debtors Turnover Ratio 5.93 7.14 7.99 7.91 11.24Investments Turnover Ratio 7.41 9.78 7.91 9.11 14.03Fixed Assets Turnover Ratio 1.43 2.04 1.76 1.44 2.18Total Assets Turnover Ratio 1.79 2.41 2.37 2.38 2.95Asset Turnover Ratio 1.99 2.58 2.68 2.28 --

Average Raw Material Holding -- 29.89 29.11 39.19 20.71Average Finished Goods Held -- 15.58 26.62 18.69 27.88

53

Number of Days In Working Capital 36.02 7.41 28.87 -2.10 19.00Profit & Loss Account RatiosMaterial Cost Composition 74.87 74.61 77.93 63.38 70.44Imported Composition of Raw Materials Consumed 37.64 33.22 28.84 34.21 33.56

Selling Distribution Cost Composition -- 3.63 7.21 8.03 7.24

Expenses as Composition of Total Sales 16.34 10.54 8.86 9.82 15.24

Cash Flow Indicator RatiosDividend Payout Ratio Net Profit 15.92 93.27 20.09 10.25 68.08Dividend Payout Ratio Cash Profit 7.70 9.12 7.00 6.02 7.52Earning Retention Ratio 87.69 -7.32 67.35 87.99 179.42Cash Earning Retention Ratio 93.26 90.76 91.91 93.41 90.54AdjustedCash Flow Times 8.91 15.12 8.66 3.38 8.04

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

Earnings Per Share 25.70 2.68 14.93 39.81 4.64Book Value 180.70 163.32 174.07 168.88 140.24

54