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CHAPTER-I
ABSTRACT
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ABSTRACT
Financial performance study is to analysis about overall financial activities of the
Company. Finance plays a key role in a companys success, gives accurate and reliable
Information on financial parameters and helps for the decision making process of the Corporate
management.
The required datas are collected from finance department. It is divided ion to two
Categories, which are primary data and secondary data. Primary data is collected from Finance
department by querying them. Secondary data already exists data, like company Balance sheet and
other finance documents.
The major objectives of this project is to analysis the financial position of the Company,
identify the problem and provide suggestion for the improvement, a Comparative study of the
company balance sheet and sales & profit trends of the Company.
Different methods are used to analysis financial performance of the company, Such as
comparative financial statement, common-size statements, trend analysis, and ratio analysis.
Financial statement may not be realistic since they are prepared by following Certain basic
concepts and conventions. Financial disclose only monetary facts. Those Transactions, which
cannot be measured by monetary terms, are not reflected in these Statements. A highly efficient
concern may conceal its real profitability by disclosing loss Or minimum profit whereas an
inefficient concern may declare dividend by wrongly Showing profit in the books.
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CHAPTER-II
INTRODUCTION
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CHAPTER- II
1.1 Introduction
Financial performance study is to analysis about overall financial activities or the
Company.
Any successful organization needs information both internally and externally. Accurate
And reliable information form the foundation for good decision-making. Finance plays a key role.
In a companys success. This is the moving force within the organization. Accurate and reliable
Information on financial parameters speeds up the decision making process of the corporate
Management.
Financial performance analysis is prepared for the purpose of presenting a periodical
Review and deal with the state of investment in business and result achieved during the period
under review. They reflect a combination of recorded facts. Financial statements are prepared at
the end of accounting period so that various parties may take decisions of their future actions in
Respect of the relationship with the business.
1.2 Importance
Financial statements provide information to owners regarding the funds invested in the
Business. Bankers and other lenders of money want to know the financial position of a concern
before giving loans. Prospective investors who want to invest money in the firm would like to
make an analysis of the financial statements of that firm to know how safe proposed investment
would be.
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The financial statements being a mirror of the financial position of the firms are of
immense value to the research scholar who wants to make a study into financial operations of a
Particular firm.
1.3 Analysis and Interpretation of Financial Statement
Analysis and interpretation of financial statements, therefore, refers to such a treatment of
the information contained in the income statement and the balance sheet so as to afford full
Diagnosis of the profitability and financial soundness of the business.
A distinction here can be made between the two terms Analysis and Interpretation. The
Term analysis means methodical classification of the data given in the financial statement. The
Figures given in the financial statements will not help one unless they are put in a simplified Form.
For example, all items relating to current assets are put at one place while all items relating To
current liabilities are put at another place. The term Interpretation means explaining the Meaning
and significance of the data so simplified.
Both analysis and interpretation are complementary to each other interpretation requires
Analysis, while analysis is useless without interpretation. Most of the authors have used the term
Analysis only to cover the meanings of both analysis and interpretation, since analysis involves
Interpretation.
1.4 TYPES OF FINANCIAL ANALYSIS
a) According to Nature
(i) External analysis
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Those who are outsiders for the business do this analysis. The term outsiders include
Investors, credit agencies, government agencies and other creditors who have no access to the
Internal records of the company. These persons mainly depend upon the published financial
Statements. Their analysis serves only a limited purpose. The position of these analysts has
Improved in recent times on account of increase governmental control over companies and
Governmental regulations requiring more detailed disclosure of information by the companies in
Their financial statements.
(ii) Internal analysis
This analysis is done by persons who have access to the books of account and other
Information related to the business. Executives and employees of the organization or by officers
Appointed for this purpose by the government or the court under powers vested in them can
Therefore, do such analysis. This analysis is done depending upon the objective to be achieved
Through this analysis.
(b) According to Objectives
(i) Long-term analysis
This analysis is made in order to study the long term financial stability, solvency and
Liquidity as well as profitability and earning capacity of a business concern. The purpose of
Making such type of analysis is to know whether in the long run the concern will be able to earn A
minimum amount which will be sufficient to maintain a reasonable rate of return on the
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Investment so as to provide the funds required for growth and development of business and to
Meet its cost of capital.
(ii) Short-term analysis
This is made to determine the short-term solvency stability and liquidity as well as Earning
capacity of the business. The purpose of the analysis is to know whether in the short run A
business concern will have adequate funds really available to meet its short-term requirements And
sufficient borrowing capacity to meet contingencies in the near future.
( c ) According to Mode
(i) Horizontal analysis
This analysis is made to review and analyze financial statements of a number of years And
therefore based on financial date taken from several years. This is very useful for long-term Trend
analysis.
(ii) Vertical analysis
This analysis is made to review and analyze the financial statements of one particular Year
only. Ratio analysis of the financial year relating to a particular accounting year is an Example of
this type of analysis.
1.5 Tools of Financial Performance Analysis
Comparative Financial Statements
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Common Size Statements
Trend Analysis
Ratio Analysis
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1.6 OBJECTIVES
Primay Objectives
To analyze the financial performance of the company through the relevant financial
ratios & other method.
To study the financial position of the company.
Secondary Objectives
To have a comparative study of the company balance sheet and profit & loss account
Between various years.
To find the liquidity position of the company.
To find profitability position of the company and analysis of sales.
To identify the problem and provide suggestion for the improvement.
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1.7 DATA COLLECTION
The datas are obtained from the two methods
1. Primary data
2. Secondary data
Primary data
Primary data comprises information obtained by during discussions with the officials.
Secondary data
The secondary data comprises of information obtained from annual reports, balance sheet
And other financial statements, files and some other documents maintained by Organization.
In the study maximum part of the data obtained is from secondary data i.e., the annual
Reports etc and the rest is form primary data.
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1.8 LIMITATIONS
The study covers only a period of three years.
The study is based only on secondary data.
There may be basis in the published data. But this deficiency could be over come by the
Adoption of scientific evaluator methods.
The study will be only a provisional one based on the data collected from the report and
Accounts during the period and its subject to refinement.
The economic and government policies etc. may affect the industry after the study, which
Is not taken into consideration.
The studies on ratios of the company are not compared with some benchmark ratios
(industry averages) due to lack of the information regarding it.
Due to lack of constraints in time and source of information approach has not been
Fulfilled successfully.
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PROFILE
Chapter-3.I
.NDUSTRY PROFILE
CHAPTER-III
INDUSTRY
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The first manufacturing unit set up by our founders, in Chennai, Tamilnadu, in 1963, to
produce various grades of Ultramarine Blue for Laundry as well as Industrial purposes, in
partnership with Bayer AG. Today it is one of the largest Pigment and Surfactant manufacturing
companies in the world servicing prominent Polymer, Personal Care, Specialties, and Cosmetic
companies worldwide.
Lapiz Divisions set up by Ultramarine & Pigments Limited in 1999 offers Business Process
Outsourcing facility for US and UK markets. TCL, with its extensive experience for over three
decades in applied research, laboratory-scale synthesis, and development of effective
manufacturing process, set up TCL Research in 2005.
TCL Research offers research services to Pharma, Cosmetic and Intermediates Companies
in Europe and the USA, in Custom Synthesis, Product Development, Process Development, Scale-
up and small volume manufacturing.
Since 1982, TCL operates a large, multi-product Liquid Storage Terminal at Chennai Port,
to receive petrochemicals directly from ships at 3 Berths, store and load the material into railway
tankers to transport it to the final destination. It is rated among one of the best operated
petrochemical terminals in India.
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CHAPTER-IV
COMPANY PROFILE
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COMPANY PROFILE
Ultramarine & Pigments Ltd., endeavor to serve the customers with range of pigments and
surfactants and in the process, be the most preferred supplier. To achieve this, we constantly study
and understand the needs and expectations of our customers by offering quality products and
services with an uncompromising sense of responsibility and a firm commitment to the society.
Ultramarine & Pigments Ltd is one of the largest Pigment and Surfactant manufacturing
company of Indian origin, having two factories in South India. It specializes in the manufacture of
Inorganic Pigments and Organic Surfactants with international Quality standard. Today the
company produces diverse range of products.
ULTRAMARINE BLUE is a very safe, non-hazardous blue pigment with a variety of
applications worldwide. Its synthetic manufacturing process and possibility for close control over
its physical, chemical, and colour characteristics enable the production of several types of this blue
pigment, which are readily accepted by plastic, printing ink, paint, cosmetic and many other
industries due to advantages over other organic pigments and dyes. Besides, Ultramarine blue is an
environment friendly pigment available to the industry today.
LINEAR ALKYL BENZENE SULPHONIC ACID
LINEAR ALKYL BENZENE SULPHONIC ACID (LABSA) is produced in the most
sophisticated "Falling Film Reactor", with Italian technology. The process is automated fully with
most modern computer aided process equipment to produce high quality products with consistency.
LABSA is an anionic surfactant widely used in the formulations of all ranges of domestic
detergents and dishwash liquids. It is specially suited for the manufacture of all types of detergent
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powders and cakes. Due to its high active matter, quick miscibility with water and low salt content,
it easily finds its way in to variety of liquid formulations.
QUALITY ASSURANCE
Ultramarine & Pigments Ltd., is equipped with an excellent infrastructural setup which
includes most modern production equipments, process and Quality control instruments,
continuously updated technical know-how, Quality management and assurance systems. The
Quality assurance system ensures that every batch of products conforms to the grade specification
in all aspects.
Technically superior approach to analysis and measurements are constantly identified and
implemented. Besides, the organization has implemented ISO 9002 Quality system management
standard and ISO 14001 Environment system management standard.
We always strive to meet the customer demand with all aspects of Quality, delivery, and
technical services.To meet the needs and expectations of the customer, the company makes efforts
to implement important tasks of training, utilizing qualified and skilled people in solving
application oriented problems of the customer.
The company provides free technical service to industrial customers irrespective of the size,
and the technical service department maintains close link with industry, visiting customers to
understand their requirements, to provide solutions to customers who are encountering difficulties.
The technical service laboratory explores the possibility of widening the application
horizon to serve the industry better. Ultramarine & Pigments Ltd., creates Customer relationship
management with every customer, through service and communication to enhance long-term
relationship.
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CHAPTER-V
REVIEW OF
LITERATURE
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4.1 COMPARATIVE FINANCIAL STATEMENTS
Comparative financial statements are those statements, which have been designed in a Way
so as to provide time perspective to the consideration of various elements of financial Position
embodied in such statements. In these statements figures for two or more periods are placed side by
side to facilitate comparison. The preparation of comparative financial and operating statement is
an important device of horizontal financial analysis.
The American Institute of Certified Public Accountants has explained
The presentation of comparative financial statements in annual and other reports Enhances
the usefulness of such reports and brings out more clearly the nature and trend of Current changes
affecting the enterprise. Such presentation emphasizes the fact that statement for A series of
periods is far more significant than those of a single period and that the accounts of One period are
but an installment of what is essentially a continuous history. In any one year, it is Ordinarily
desired that the Balance sheet, the Income statement and the surplus statement be Given for one or
more preceding years as well as for the current year
It is divided into two categories
Comparative Income Statement
Comparative Balance sheet
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Comparative Income Statement
The income statement discloses Net profit or Net loss on account of operations. A
Comparative income statement will show the absolute figures for two or more periods, the
Absolute change from one period to another and, if desired, the change in terms of percentages.
Since the figures for two or more periods are shown side by side, the reader can quickly ascertain
Whether sales have increased, whether cost of sales has increased or decreased, whether cost of
Sales has increased or decreases, etc.
Comparative Balance Sheet
Comparative Balance sheet as on two or more different dates can be used for comparing
Assets and liabilities and finding out any increase or decrease in those items. Thus, while in a
Single Balance sheet the emphasis is on present position, it is on change in the comparative
Balance sheet.
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4.2 COMMON-SIZE FINANCIAL STATEMENT
Common-size financial statements are those in which figures reported are converted into
Percentages to some common base.
Comparative Common-Size Financial Statement
The comparative common-size financial statements show the percentage of each item to the
total in each period but not variations in respective items from period to period.
It is divided into two categories
Common-size balance sheet
Comparative common-size balance sheet
Common-Size Balance Sheet
Common-size Balance sheet means, the whole Balance sheet is converted into percentage
Form.
Comparative Common-Size Balance Sheet
When Balance sheets of the same concern for several years or when Balance sheet of two
Or more than two concerns for the same year are converted into percentage form and presented as
Such, they known as Comparative common-size Balance sheets.
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4.3 TREND ANALYSIS
Comparing the past data over a period of time with a base year is called trend analysis. The
method of calculating trend percentages involves the calculation of percentage relationship That
each item bears to the same item in the base year. Any year may be taken as the base year. It Is
usually the earliest year. Any intervening year may also be taken as the base year. Each item of
Base year is taken as 100 on that basis the percentages for each of the items of each of the years
Are calculated. These percentages can also be taken as Index Numbers showing relative changes
In the financial data resulting with the passage of time.
The method of trend percentages is a useful analytical device for the management since By
substituting percentages for large amounts; the brevity and readability are achieved. However,
Trend percentages are not calculated for all of the items in the financial statements. They are
Usually calculated only for major items since the purpose is to highlight important changes.
It is mainly used for
Sales trend analysis
Profit trend analysis
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4.4 RATIO ANALYSIS
Ratio
The term ratio refers to the numerical or quantitative relationship between two figures. A
Ratio is the relationship between two figures, and obtained by dividing the former by the latter.
Ratios are designed to show how one number is related to another. It is worked out by dividing
One number by another.
Ratio can be expressed in two ways
Times
Percentage
Times
When another divides one value, the unit used to express the quotient is termed as
Times.
Percentage
If 100 multiply the quotient obtained, the unit of expression is termed as percentage.
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1) CURRENT RATIO
Current Ratio is expresses relationship between current assets and current liabilities. It is
The most common ratio for measuring liquidity. Being related to working capital analysis, it is
Also called the working capital ratio. The current ratio is the ratio of total current assets to current
Liabilities.
The current ratio of a firm measures its short-term solvency. It is ability to meet short-
Term obligations. As a measure of short-term current financial liquidity, it indicates the rupees of
Current assets available for each rupees of current liability/obligation. The higher the current
Ratio, the larger the amount of rupees available per rupee of current liability, the more the firms
Ability to meet current obligations and the greater the safety of funds of short-term creditors.
Formula
Current Assets
Current Ratio = --------------------------
Current Liabilities
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Current Assets
Which assets are easy to converted cash or which assets are easy to realized within one
Year, is called current assets. The current assets of a firm represent those assets, which can be in
The ordinary course of business converted into cash within a period not exceeding one year.
2) QUICK RATIO
Quick ratio is also known as liquid ratio or acid test ratio or near money ratio. It is the
Ratio between quick or liquid assets and quick liabilities. It indicates the relation between strictly
Liquid assets whose value is almost certain on the one hand, and strictly liquid liabilities on the
Other.
Formula
Liquid Assets
Liquid Ratio = ---------------------------
Liquid Liabilities
Liquid Assets
Liquid assets means, which assets are immediately convertible into cash without much
Loss.
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Liquid Assets = Current Assets (Stock and Prepaid Expenses)
Liquid Liabilities
Liquid liabilities mean liabilities which are payable within a short period.
Liquid liabilities = Current Liabilities Bank Overdraft
3) STOCK TURNOVER RATIO
Stock Turnover Ratio is also known as Stock Velocity. This ratio is calculated to
consider The adequacy of the quantum of capital and its justification for investing in inventory. A
firm Must have reasonable stock in comparison to sales. It is the ratio cost of sales and average
Inventory. This ratio helps the financial manager to evaluate inventory policy. This ratio reveals
The number of times finished stock is turned over during a given accounting period. This ratio is
Used for measuring the profitability.
This ratio indicates whether investment in inventory is efficiently used or not. It,
Therefore, explains whether investment in inventories is within proper limits or not. The quantum
Of stock should be sufficient to meet the demands of the business but it should not be too large to
Indicate unnecessary lock-up of capital in stock and danger of stock items obsolete and getting it
Wasted by passing of time.
The inventory turnover ratio measures how quickly inventory is sold. It is a test of
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Efficient inventory management. To judge whether the ratio of a firm is satisfactory or not, it
should be compared over a time on the basis of trend analysis.
Formula
Net Sales
Stock Turnover Ratio = -----------------------------------
Average Inventory at Cost
Opening Stock + Closing Stock
Average Stock = -------------------------------------------
2
4) DEBTORS TURNOVER RA IO
This is also called Debtor Velocity or Receivable Turnover. A firm sells goods on
Credit and cash basis. When the firm extends credits to its customers, book debts (Debtors or
Account Receivable) are created in the firms account: debtors expected to be converted into Cash
over short period and thus included in current assets. A debtor includes the amount of Bills
Receivables and Book Debts at the end of accounting period. It is most essential that a b
Reasonable quantitative relationship between Outstanding Receivables and Sales should always be
maintained. If the firm has not been able to collect its debtors within a reasonable time its Funds
are unnecessarily locked up in Receivables. In such case short-term loans have to be arranged for
paying off its current liabilities. The liquidity position of the firm depends on the Quality of
debtors to a great extent.
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The purpose of this ratio is to measure the liquidity of the Receivables or to find out the
Period over which Receivables remain uncollected.
Financial analysts to judge the liquidity of a firm use two ratios. They are
Debtors turnover ratio
Debt collection period ratio
Formula
Total Sales
Debtor turnover ratio = --------------------------------------------
Average Account Receivables
Account Receivables = Debtors + Bills Receivable
Opening Balance + Closing Balance
Average Account Receivable = ---------------------------------------------------
2
5) DEBT COLLECTION PERIOD
The ratio indicates the extent to which the debts have been collected in time. It gives the
Average debt collection period. The ratio is very helpful to the lenders because it explains to them
Whether their borrowers are collection money within a reasonable time. An increase in the period
Will result in greater blockage of funds in debtors.
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Formula
Months or Days in a year
Debt collection period = --------------------------------------
Debtors Turnover
6) CREDITOR TURNOVER RATIO
This is also known as Account payable or Creditors Velocity. A business firm usually
Purchase on credit goods, raw materials and services from other firms. The amount of total
Payables of a business concern depends upon the purchases policy of the concern, the quantity of
Purchases and suppliers credit policy. Longer the period of outstanding payable is, lesser is the
Problem of working capital of the firm. But when the firm does not pay of its creditors within
Time, it may have adverse effect on the business.
Credit turnover indicates the speed with which the payments for credit purchases are made
to the creditors. It signifies the credit period enjoyed by the firm paying creditors.
Formula:
Total Purchases
Creditor Turnover Ratio = -----------------------------------
Average Account Payable
Account Payable = Creditors + Bills Payable
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Opening Balance + Closing Balance
Average Account Payable = ------------------------------------------
2
7) FIXED ASSETS TURNOVER RATIO
The ratio gives the average credit period enjoyed from the creditors.
Formula
Months or Days in a year
Debt payment period = ---------------------------------------
Creditor Turnover
8) FIXED ASSETS TURNOVER RATIO
This ratio indicates the extent to which the investments in fixed assets contribute towards
Sales. If compared with a previous period, it indicates whether the investment in fixed assets has
been judicious or not.
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Formula
Net Sales
Fixed assets turnover ratio = --------------------------------
Net Fixed Assets
Net Sales = Sales- Sales Return Excise Duty
Net Fixed Assets = Fixed Assets Depreciation
9) WORKING CAOPITAL TURNOVER RATIO
This is also known as Working Capital Leverage Ratio. This ratio indicates whether or Not
working capital has been effectively utilized in making sales. In case a company can achieve
Higher volume of sales with relatively small amount of working capital, it is an indication of the
Operation efficiency of the company.
Formula
Net Sales
Working capital turnover ratio = ------------------------
Working Capital
10) PROPRIETARY RATIO
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Proprietary Ratio relates the shareholders funds to total assets. It is a variant of the debt
Equity ratio. This ratio shows the long term or future solvency of the business.
Formula
Shareholders Fund
Proprietary ratio = ------------------------------
Total tangible Assets
11) DEBT EQUITY RATIO
The debt-equity ratio is determined to ascertain the soundness of the long-term financial
Policies of the company. It is also known as External-Internal equity ratio.
The term external equities refer to total outside liabilities and the term internal equities refer
to shareholders funds or the tangible net worth. In case the ratio is (outsiders funds are Equal to
shareholders funds) it is considered to be quite satisfactory
Formula
Total long-term debt
Debt-Equity Ratio = ------------------------------
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Shareholders funds
12) SOLVENCY RATIO
It is also know as Debt ratio. It is difference of 100 and proprietary ratio. This ratio is
found out between total assets and external liabilities of the company. External liabilities mean all
long period and short period liabilities. Solvency generally refers to the capacity or ability of the
business to meet its short-term and long-term obligations. If a company is in a position to pay its
long-term liabilities easily, it is said to possess long-term solvency. If a companys financial
position is strong to pay current Liabilities, it is regarded as short-term solvency. There are
circumstances arising to find out Solvency of the company for very short period for immediate
solvency.
Examples
Liquidity Ratio
Absolute Liquid Ratio
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13) OPERATING RATIO
This ratio established the relationship between total operation expenses and sales. Total
Operation expenses include cost of goods, administrative expenses, financial expenses and selling
Expenses. Cost of goods sold is also known as direct operation expenses and the rest are known As
other operating expenses. Operation ratios are generally expressed in percentages.
Formula
Cost of goods sold + Operating Expenses
Operating Ratio = --------------------------------------------------------
Net Sales
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CHAPTER-VI
ANALYSIS AND
INTERPRETATION
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COMPARATIVE
STATEMENT
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Table No:5.1
ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT
FOR THE YEAR ENDED
31ST MARCH 2005 & 2006
particulars 2005 2006
Absolute
increase or
decrease
2006
%
increase
or
decrease
2006
Sales 36,37,26,667 46,30,90,690 99,36,40,23 27.31
Less: selling &
administrative express32,48,62,648 37,43,47,830 4,94,85,182 15.23
operating income 8,19,04,800 12,39,10,600 4,20,05,800 51.29
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Add: other income 44,92,565 39,37,268 -5,55,297 - 12.36
Total income 40,68,06,105 49,84,96,558 91,69,04,533 22.54
Less: interests 1,61,15,267 1,22,58,400 -3,85,68,67 - 23.93
Profit before tax 2,67,73,785 7,35,04,710 4,67,30,925 174.54
Provision for tax ------- 41,94,777 -41,94,777 -------
Net profit for the year 1,47,03,555 5,80,90,883 4,33,87,278 295.08
Interpretation
The sale of the company during 2005 was 36,37,26,667. In 2006 the sale was 6,30,90,690.
It shows that the company net sale 99,36,40,23 was increased during he period.
The operating income of the company during 2005 was increase. In 2005 it was
8,19,04,800 but in 2006 it was 12,39,10,600.The increased amount is 4,20,05,800.
The Other income is increase during the year 2005. In 2005 it was 44, 92,565, but in 2006
it was 39,37,268. The decrease amount is -5, 55,297, and the increase percentage is -12.23.
The income statement finally shows that, the company profit was increased by 295.08%.
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Table no:5.2
ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME
STATEMENTFOR THE YEAR ENDED
31ST MARCH 2005 & 2006
Sch Particulars 2005 2006
Absolute
increase or
decrease
2006
%
increase
decrease
2006
A Source Of funds
Shareholders funds
Share capital 45,45,12,880 45,45,12,88
0
0 0
B Reserves and surplus 13,28,556 13,28,556 0 0
Loan Funds
C Secured 6,95,62,711 12,36,97,65
3
5,41,34,942 -77.82
Unsecured 7,15,00,000 7,25,00,000 10,00,000 13.99
Total 59,69,04,147 65,20,39,08
9
5,51,34,942 9.24
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D Application of funds
Fixed Assets
Gross block 68,11,09,760 71,52,23,46
4
3,41,13,704 5.01
Less: depreciation 27,48,62,752 31,28,79,91
4
3,80,17,162 13.83
40,62,47,008 40,23,43,55
0
-39,03,458 -0.96
E Capital work-in-progress 7,30,37,701 18,86,67,80
5
1,15,630 158.32
Deferred tax assets 1,12,62,492 10,86,124 -1,01,76,368 -90.36
F Current assets, loans &
advances
Accrued income 59,046 2,13,853 1,54,807 262.18
Inventories 11,25,74,217 12,63,30,81
7
1,37,56,600 12.22
Sundry debtors 1,81,40,354 2,20,36,659 38,96,305 21.48
Cash and bank balance 1,77,72,110 1,46,20,968 -31,51,142 -17.73
Loans and advances 77,88,893 97,27,489 19,38,596 24.89
15,63,34,620 17,29,29,78
6
1,65,95,166 10.62
G Less: current liabilities
and provisions
12,34,96,971 12,86,46,51
7
51,49,546 4.17
Net Current Assets (F-G) 3,28,37,649 4,42,83,269 1,14,45,620 34.86
Profit and loss account 7,35,19,297 1,56,58,341 5,78,60,956 78.70
Total 59,69,04,147 65,20,39,08
9
5,51,34,942 92.37
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Interpretation
The current assets were increase during the year 2005. In 2005 the cost was 15,63,34,623,
but in 2006 the cost was 17,29,29,786. The decreased amount is 1,65,95,166 and the
increase percentage is 10.62.
The current liabilities sufficiently increased during the year 2005. In 2005 the cost was
12,34,96,971, but in 2006 the cost 12,86,46,517. The increased amount is 51,49,546, and
the increased percentage is 4.76.
All fixed assets have decrease during 2005. In 2005 the cost was 40,62,47,008, but in 2006
the cost was 40,23,43,550. The decrease amount is -39,03,458.
The reserve was same at 13,28,556 by 2006 compare with previous year.
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Table no:5.3
ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT
FOR THE YEAR ENDED
31
ST
MARCH 2006 & 2007
particulars 2006 2007
Absolute
increase or
decrease
2006
%
increase
or
decrease
2006Sales 46,30,90,690 53,92,93,728 7,62,03,038 16.45
Less: selling &
administrative express37,43,47,830 4300,47,853 5,57,00,023 14.88
operating income 1,23,91,000 1,20,87,000 -30,40,000 -102.51
Add: other income 39,37,268 1,19,46,451 80,09,455 2.14
Total income 49,84,96,558 55,12,40,451 5,27,43,893 10.58
Less: interests 1,22,58,400 1,45,77,140 23,18,746 18.92
Profit before tax 7,35,04,710 6,36,66,606 -98,38,104 -13.38
Provision for tax 41,94,777 71,63,854 29,69,077 70.78
Net profit for the year 5,80,90,883 3,91,18,336 -1,89,72,547 -32.66
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Interpretation
The sale of the company during 2006 was 46,30,90,690 . In 2007 the sale was
53,92,93,728. It shows that the company net sale 7,62,03,038 was increased during the
period.
The operating income of the company during 2006 was increased. In 2003 it was
28972387 but in 2004 it was 37137615. The increased amount is 8165228, and the
percentage of increase was 28.18.
The Other income is increase during the year 2004. In 2003 it was 2538085, but in 2004 it
was 3691123. The increase amount is 1153038, and the increase percentage was 45.43.
The income statement finally shows that, the company profit was increase by 24.79%.
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Table no:5.4
ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT
FOR THE YEAR ENDED
31ST MARCH 2006 & 2007
Sc
h
Particulars 2006 2007
Absolute
increase or
decrease
2007
%
increase
decrease
2007
A Source Of funds
Shareholders funds
Share capital 45,45,12,880 45,45,12,880 0 0
Reserves and surplus 13,28,556 2,98,91,848 28563292 2149.95
B Loan Funds
Secured 12,36,97,653 21,44,02,377 9,07,04,724 73.33
Unsecured 7,25,00,000 7,62,80,250 37,80,250 5.21
Total 65,20,39,089 79,74,42,083 145402994 22.29
C Application of funds
Fixed AssetsGross block 71,52,23,464 94,55,34,607 230311143 32.20
Less: depreciation 31,28,79,914 35,57,46,560 42866646 13.71
40,23,43,550 58,97,88,047 187444497 46.59
D Capital Work-in-progress 18,86,67,805 8,70,35,784 -101632021 -53.87
Deferred tax assets 10,86,124 13,91,96,849 138110725 12715.93
E Current assets, loans &
advances
Accrued income 2,13,853 -- -- --
Inventories 12,63,30,817 13,91,96,849 12866032 78.78
Sundry debtors 2,20,36,659 4,02,25,572 18188913 82.54
Cash and bank balance 1,46,20,968 1,85,53,538 3932578 26.89
Loans and advances 97,27,489 2,61,88,027 16460538 169.22
17,29,29,786 22,41,63,986 51234200 29.63
F Less: current liabilities
and provisions
12,86,46,517 10,35,45,734 -25100783 -19.51
Net Current Assets(F-G) 4,42,83,269 12,06,18,252 76334983 172.83
Profit and loss account 1,56,58,341 -- -- --
Total 65,20,39,089 79,74,42,083 - -22.30
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14,54,02,994
Interpretation
The Borrowing was increased during the year 2004. In 2003 it was 119776792 and in 2004
it was 206492425. The increased amount was 86715633.
The current assets were increased during the year 2004. In 2003 the cost was 168560352,
but in 2004 the cost was 173792236. The increased amount is 5231884 and the increased
percentage is 3.10.
The current liabilities increased during the year 2004. In 2003 the cost was 77959588, but
in 2004 the cost was 100915372. The increased amount is 22955784, and the increased
percentage is 29.45.
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Fixed assets have increased during 2004. In 2003 the cost was 171339877, but in 2004 the
cost was 287779800. The increased amount is 116439923, and the percentage of increase
is 67.96.
The reserve was increased during the year 2004. The increased amount is 12000390.
STATEMENT
COMMON-SIZE
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Table no:5.5
ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT
FOR THE YEAR ENDED
31ST MARCH 2005 & 2006
particulars 2005 % 2006 %
Sales 36,37,26,667 100.01 46,30,90,690 100.00
Less: selling &
administrative express32,48,62,648 89.32 37,43,47,830
80.84
operating income 81,90,48,600 225.18 1,23,91,000 2.68
Add: other income 44,92,565 1.24 39,37,268 0.85
Total income 40,68,06,105 111.84 49,84,96,558 107.65
Less: interests 1,61,15,267 4.43 1,22,58,400 2.65
Profit before tax 2,67,73,785 7.36 7,35,04,710 15.87
Provision for tax ------- -------- 41,94,777 0.91
Net profit for the year 1,47,03,555 4.04 5,80,90,883 12.54
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Table no:5.6
ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT
FOR THE YEAR ENDED
31ST MARCH 2006 & 2007
Interpretation
Net Profits were fluctuating during the study period. In 2002 the sales was 5.90%, in 2003
it was 5.59%, in 2004 it was 5.30%, in 2005 it was 3.99%, and in2006 was 5.06.
Companys Gross profit was decreased in during the study period. During 2002 it was
19.51, in 2006 it was 18.19%.
particulars 2006 % 2007 %Sales 46,30,90,690 100.00 53,92,93,728 100.00
Less: selling &
administrative
express
37,43,47,830
80.84
4300,47,853
79.74
operating income 1,23,91,000 2.68 1,20,87,000 2.24
Add: other income 39,37,268 0.85 1,19,46,451 2.22
Total income 49,84,96,558 107.65 55,12,40,451 102.22
Less: interests 1,22,58,400 2.65 1,45,77,140 2.70
Profit before tax 7,35,04,710 15.87 6,36,66,606 11.81
Provision for tax 41,94,777 0.91 71,63,854 1.33
Net profit for the
year
5,80,90,883 12.54 3,91,18,336 7.25
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During 2002 to 2006 the cost of sales were gradually declined. This decline may due to
fall in raw materials prices and efficiency of the purchasing departments.
During 2002 to 2006 other income was increased. During 2002 other income was 0.64, in
2006 it was 0.85%.
During 2002 to 2006 total income was decreased. during 2002 total income was 10.96%, in
200 it was 10.70%.
during 2002 to 2006 the interests were increased. During 2002 it was 2.49%, in 2006 it
was 3.89%.
Table no:5.6
ULTRAMARINE & PIGMENTS LIMITED COMMON-SIZE BALANCESHEET
AS ON 31ST MARCH 2005 & 2006
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Sch Particulars 2005 % 2006 %
A Source Of funds
Shareholders funds
Share capital 45,45,12,880 124.96 45,45,12,88
0
98.15
B Reserves and surplus 13,28,556 0.37 13,28,556 0.39
Loan Funds
C Secured 6,95,62,711 19.13 12,36,97,65
3
26.71
Unsecured 7,15,00,000 19.68 7,25,00,000 15.76
Total 59,69,04,147 164.11 65,20,39,08
9
140.81
Application of funds
D Fixed Assets
Gross block 68,11,09,760 187.26 71,52,23,46
4
154.44
Less: depreciation 27,48,62,752 75.57 31,28,79,91
4
67.66
40,62,47,008 111.71 40,23,43,55
0
86.98
E Capital work-in-progress 7,30,37,701 20.11 18,86,67,80
5
40.74
Deferred tax assets 1,12,62,492 3.11 10,86,124 0.37
F Current assets, loans &
advances
Accrued income 59,046 0.02 2,13,853 0.12
Inventories 11,25,74,217 31.10 12,63,30,81
7
27.28
Sundry debtors 1,81,40,354 5.01 2,20,36,659 4.76
Cash and bank balance 1,77,72,110 4.99 1,46,20,968 3.16Loans and advances 77,88,893 2.14 97,27,489 2.10
15,63,34,620 42.99 17,29,29,78 37.34
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6
G Less: current liabilities
and provisions
12,34,96,971 33.96 12,86,46,51
7
27.87
Net Current Assets (F-G) 3,28,37,649 9.03 4,42,83,269 9.66
Profit and loss account 7,35,19,297 20.21 1,56,58,341 3.28Total 59,69,04,147 164.11 65,20,39,08
9
140.80
Table no :5.7
ULTRAMARINE & PIGMENTS LIMITED COMMON-SIZE BALANCESHEET
AS ON 31ST MARCH 2006 & 2007
Sch Particulars 2006 % 2007 %
A Source Of funds
Shareholders funds
Share capital 45,45,12,880 98.15 45,45,12,88
0
84.28
B Reserves and surplus 13,28,556 0.39 2,98,91,848 5.54
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Loan Funds
C Secured 12,36,97,653 26.71 21,44,02,37
7
39.86
Unsecured 7,25,00,000 15.76 7,62,80,250 14.14
Total 65,20,39,089 140.81 79,74,42,08
3
147.87
Application of funds
D Fixed Assets
Gross block 71,52,23,464 154.44 94,55,34,60
7
175.33
Less: depreciation 31,28,79,914 67.66 35,57,46,56
0
65.97
40,23,43,550 86.98 58,97,88,04
7
109.36
E Capital work-in-progress 18,86,67,805 40.74 8,70,35,784 16.14
Deferred tax assets 10,86,124 0.37 -------- ------
F Current assets, loans &
advances
Inventories 12,63,30,817 27.28 13,91,96,84
9
25.81
Sundry debtors 2,20,36,659 4.76 4,02,25,572 7.56
Cash and bank balance 1,46,20,968 3.16 1,85,53,538 3.44
Loans and advances 99,41,.342 2.10 2,61,88,027 4.96
17,29,29,786 37.34 22,41,63,98
6
41.97
G Less: current liabilities
and provisions 12,86,46,517 27.87 10,35,45,73
4
.
19.20
Net Current Assets (F-G) 4,42,83,269 9.66 12,06,18,25
2
22.37
Profit and loss account 1,56,58,341 3.28 -- ------
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Total 65,20,39,089 140.80 79,74,42,08
3
147.87
Interpretation
Current assets and total current liabilities have considerably increased during he period. At
the end of 2006, the firms current assets are sufficiently more than its current liabilities.
As such, the firms solvency position appears to be satisfactory.
during 2002 to 2006 the current assets were 59.74%, 49.59%, 37.652%, 33.99% and
32.766%. During 2002 to 2006 the current liabilities were 20.45%, 22.93%, 21.86%,
18.82% and 18.64%. This information show that the company is in solvency position.
Reserve funds were fluctuating during the study period. In 2002 it was37.01%, in 2003 it
was 35.07%, in 2004 it was 28.43%, in 2005 it was 21.96%, and in 2006 was 19.80%.
This show that the companys profits retain percentage is decreasing year by year.
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Borrowings were fluctuating during the study period. In 2002 it was34.84%, in 2003 it was
35.23%, in 2004 it was 44.73%, in 2005 it was 50.03%, and in 2006 48.32%. It shows the
companys burden is increasing.
Fixed assets were considerably increasing during the study period. In 2002 it was 69.2%,
in 2003 it was 79.52%, in 2004 it was 87.21%, in 2005 it was 82.03%, and in 2006 77.84%,
hence it seems that the company is investing its borrowing money in buying fixed assets.
CHAPTER VI
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TREND
ANALYSIS
Chapter :vi
6.1 SALES TREND ANALYSIS
TABLE 6 .1
Year Sales Trend percentage
2005 36,37,26,667 100
2006 46,30,90,690 127.31
2007 53,92,93,728 148.27
55
0
20
40
60
80
100
120
140
160
36,3
7,
26,6
67
46,
30,9
0,6
90
53,9
2,
93,7
28
2005 2006 2007
Trend percentage
Trend percentage
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6.2 PROFIT AND LOSS ANALYSIS
TABLE6.2
Year Net profit Trend percentage
2005 1,47,03,555 100
2006 5,80,90,883 395.08
2007 3,91,18,336 266.05
PROFIT TREND
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Table no 6.3
TREND ANALYSIS AS ON 31ST MARCH 2005-2007
31st march Trend % base year 2002
Sch Particulars 2005 2006 2007 % % %
A Source Of funds
Shareholders
fundsShare capital 45,45,12,880 45,45,12,880 45,45,12,880 100.00 100.00 100.00
B Reserves and
surplus
13,28,556 13,28,556 2,98,91,848 100.00 100.00 2250.0
1
Loan Funds
C Secured 6,95,62,711 12,36,97,653 21,44,02,377 100.00 177.82 308.22Unsecured 7,15,00,000 7,25,00,000 7,62,80,250 100.00 101.21 106.71Total 59,69,04,147 65,20,39,089 79,74,42,083 100.00 109.24 133.61
Application of
funds
57
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1,47,03,555 5,80,90,883 3,91,18,336
2005 2006 2007
Trend percentageTrend percentage
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D Fixed Assets
Gross block 68,11,09,760 71,52,23,464 94,55,34,607 100.00 105.01 138.82Less: depreciation 27,48,62,752 31,28,79,914 35,57,46,560 100.00 113.83 129.43
40,62,47,008 40,23,43,550 58,97,88,047 100.00 99.04 145.18
E Capital work-in-
progress 7,30,37,701 18,86,67,805 8,70,35,784 100.00 258.32
119.17
Deferred tax assets 1,12,62,492 10,86,124 -------- 100.00 9.65 1236.9
3
F Current assets,
loans & advances
Accrued income 59,046 2,13,853 -------- 100.00 362.18 -----Inventories 11,25,74,217 12,63,30,817 13,91,96,849 100.00 112.22 123.65Sundry debtors 1,81,40,354 2,20,36,659 4,02,25,572 100.00 121.48 221.75Cash and bank
balance
1,77,72,110 1,46,20,968 1,85,53,538 100.00 82.27 104.21
Loans and
advances
77,88,893 97,27,489 2,61,88,027 100.00 124.48 336.22
15,63,34,620 17,29,29,786 22,41,63,986 100.00 110.62 143.49
G Less: current
liabilities and
provisions
12,34,96,971 12,86,46,517 10,35,45,734
100.00 104.17 83.85
Net Current Assets
(F-G)
3,28,37,649 4,42,83,269 12,06,18,252 100.00 134.91 367.32
Profit and loss
account
7,35,19,297 1,56,58,341 ------- 100.00 21.31 ----
Total 59,69,04,147 65,20,39,089 79,74,42,083 100.00 109.24 133.61
Interpretation
From the trend analysis as on 31st March 2005 to 2007, it is observed that the reserve funds
trend percentage in base year 2005 is 100%, in 2006 was 100.00, in 2007 was 2250.90. It shows
that the reserve fund is sufficiently increased compare with every previous year.
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From the trend analysts it is observed that the application of funds in fixed assets and
current assets drastically changes during the study period. Fixed assets the cost for the base year is
100% in 2005 but in 2006 percentage was 100.00, in 2007 percentage was 145.18 these trends
show that the fixed assets costs were increased year by year as well as the accumulated
depreciation increase year by year in base year 2005 it is 100%, in 2006 is 113.83, in 2007 is
129.43.
During 2005 to 2007 the current liabilities were, the percentage in the base year 2005 was
100%, in 2006 were 104.17, and in 2007 were 83.85.
The applications of funds such as inventories, cash and bank balance and loans & advances
have a different trend analysis. It finally the entire trend shows that there is upward result in during
the study period.
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CHAPTER VII
RATIO
ANALYSIS
Chapter : VII
7.1 RATIO ANALYSIS
1) 7.1CURRENT RATIO
(i) Significance
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Current ratio provides a margin of safety to the creditors. In a sound business, a current Ratio
of 2:1 is considered an ideal one. The ratio of 2 is considered as a safe margin of solvency due to the
fact that it the current assets are reduced to half, I instead of 2, then also the creditors will be able to
get their payment in full.
(ii) Table- 7.2
YEAR CURRENT
ASSETS
CURRENT LIABILITES RATIO
2005 3,28,37,649 12,34,96,971 0.26
2006 4,45,82,565 12,79,05,710 0.34
2007 12,05,65,607 10,32,26,334 1.16
(iii) Interpretation
From the above table it is clearly observed that, the current ratios for the 2005 and
2006were matched with the ideal ratio. During 2006 to 2007 the ratios show that the company was
sufficiently able to repay its debts.
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Chart 7.3
CURRENT RATIO
2) QUICK RATIO
(i) Significance
62
RATIO
0
0.2
0.4
0.6
0.8
1
1.2
1.4
12,34,96,971 12,79,05,710 10,32,26,334
3,28,37,649 4,45,82,565 12,05,65,607
2005 2006 2007
RATIO
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An acid test ratio of 1:1 is considered satisfactory as a firm can easily meet all current
Claims. If the ratio is less than 1:1, that is, liquid assets are less than current liabilities, the
Financial position of the concern shall be deemed to be unsound.
(ii) Table 7.4
YEAR LIQUID ASSETS CURRENT
LIABILITES
RATIO
2005 15,63,34,620 12,34,96,971 1.26
2006 17,24,88,275 12,79,05,710 1.34
2007 22,37,91,941 10,32,26,334 2.76
(iii) Interpretation
From the above table it is clearly observed that, the current ratio during the three year
Matched with the in 2005 and 2006. During 2005 to 2007 the ratios Show that every one rupee of
companys current liabilities it has 1.26, 1.34, & 2.76 of Liquid assets. Hence, its liquidity position
is satisfactory.
Chart 7.5
63
0
0.51
1.52
2.53
12,
34,
96,
971
12,
79,
05,
710
10,
32,
26,
334
15,63,34,62017,24,88,27522,37,91,941
2005 2006 2007
RATIO
RATIO
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3.STOCK TURN OVER RATIO
(i) Significance
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A high inventory turnover ratio indicates brisk sales. A high ratio implies good inventory
management and an indication of under-investment. It will adversely affect the ability of a firm to
meet customers demand. At the same time, a higher ratio reflects efficient business activities
A low inventory turnover ratio is dangerous. It is an indication of excessive inventory and over
investment in inventory. A low ratio may be result of inferior quality goods, stock of Unsaleable
and absolute goods. A lower ratio reflects dull business and suggests that some steps should be
taken to push up sales.
(ii) Table 7.6
YEAR SALES AVERAGE INVENTORY RATIO
2005 36,37,26,667 11,25,74,210 3.23
2006 46,30,90,690 12,63,30,817 3.66
2007 53,92,93,728 13,91,96,849 3.87
(iii) Interpretation
From the above table it is clearly observed that, the inventory turnover ratio shows that 3.23
times in 2005, 3.66 in 2006, 3.87 in 2007, It shows that the stock turnover of the company is
satisfactory.
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Chart7.7
4) DEBTORS TURNOVER RATIO
(i) Significance
66
11,25,74,210
36,37,26,667
2005
12,63,30,817
46,30,90,690
2006
13,91,96,849
53,92,93,728
2007
RATIO
RATIO
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It indicates the efficiency of the staff entrusted with collection of book debts. The higher
the ratio, the better it is, since it would indicate that debts are being collected more promptly. For
measuring the efficiency, it is necessary to set up a standard figure; a ratio lower than the standard
will indicate inefficiency.
(ii) Table 7.8
YEAR SALES AVERAGE DEBTRES RATIO
2005 36,37,26,667 1,81,40,354 20.05
2006 46,30,90,690 2,20,36,659 21.01
2007 53,92,93,728 4,02,25,572 13.41
(iii) Interpretation
From the above table it is clearly observed that, the company was able to turnover its
Debtors 20.05 times in 2005, 21.01 times in 2006, 13.41 times in 2007. It shows that the
companys debtors turnover was decreasing which is not satisfactory.
Chart 7.9
67
0
5
10
15
20
25
RATIO
RATIO 20.05 21.01 13.41
1,81,40,354 2,20,36,659 4,02,25,572
36,37,26,66746,30,90,69053,92,93,728
2005 2006 2007
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5) DEBT COLLECTION PERIOD
(i) Significance
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Debtors collection period measures the quality of debtors since it measures the rapidity or
slowness with which money is collected from them a shorter collection period implies prompt
payment by debtors. It reduces the chances of bed debts. A longer collection period implies too
liberal and inefficient credit collection performance. The amount of receivables should not exceed
90-120 days credit sales.
(ii) Table 7.10
YEAR DAYS IN A YEAR DEBTER RATIO DAYS
2005 360 20.05 18.00
2006 360 21.01 17.13
2007 360 13.41 26.85
(iii) Interpretation
From the above table it is clearly observed that, the company was able to collect money
Form its debtors, 79 days in 2005, 130 days in 2006 and 150 Days in 2007. It has been showing
increasing situation from 2005 to 2007 as it may due to Change in economic conditions and/or
laxity in managing receivables
Chart 7.11
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0
10
20
30
DAYS
DAYS
DAYS 18 17.13 26.85
20.05 21.01 13.41
360 360 360
2005 2006 2007
6) PROPRIETARY RATIO
(i) Significance
The acceptable norm of the ratio is 1:3. The ratio shows the general strength of the
company. If is very important to creditors as it helps them to find out the proportion of
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shareholders funds in the total assets used in the business. Higher ratio indicates a secured position
to creditors and a low ratio indicates greater risk to creditors. A ratio below 50% may be alarming
for the creditors since they may have to lose heavily in the event of companys liquidation on
account of heavy losses.
(ii) Table 7.12
YEAR SHAREHOLDERS
FUND
TOTAL TANGIBLE
ASSETS
RATIO
2005 45,45,12,880 14,84,86,681 3.06
2006 45,45,12,880 16,25,79,477 2.80
2007 45,45,12,880 19,77,39,690 2.30
(iii) Interpretation
From the above table it is clearly observed that, the proprietary ratio during the three-year is
not matching the ideal proprietary ratio. During 2005 to 2007 the ratios were 3.06, 2.80, and 2.30.
This shows that there is no secured position to creditors.
Chart 7.13
71
0
0.5
1
1.5
2
2.5
3
3.5
0 0 0 0
0 0 0 0
0 3.06 2.8 2.3
YEAR 2005 2006 2007
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7) DEBT-EQUITY RATIO
(i) Significance
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As acceptable norms for this ratio is considered to be 2:1 a higher debt-equity ratio allowed
in the case of capital-investment industries. A norm of 4:1 is used for fertilizer and cement units
and a norm of 6:1 is used for shipping units.
(ii) Table 7.14
YEAR
TOTAL LONGTURN
DEBT
SHREHOLDERS
FUND
RATIO
2005 1,81,40,354 45,45,12,880 0.04
2006 2,20,36,659 45,45,12,880 0.05
2007 4,02,25,572 45,45,12,880 0.09
(iii) Interpretation
From the observation it is clear that the total debt ratio that the companys lenders have
Contributed more than owners; lenders contribution was 0.04 times of owners contribution in
the year of 2005, 0.05 times in 2006, and 0.09 times in 2007.
Chart 7.15
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0
0.02
0.04
0.06
0.08
0.1
Series1 0.04 0.05 0.09
45,45,12,880 45,45,12,880 45,45,12,880
1,81,40,354 2,20,36,659 4,02,25,572
2005 2006 2007
8) OPERATING RATIO
(i) Table 7.16
YEAR OPERATING
EXPENSES
SALES RATIO
2005 32,48,62,648 36,37,26,667 0.87
2006 46,30,90,690 46,30,90,690 0.80
2007 53,92,93,728 53,92,93,728 0.79
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(ii) Interpretation
From the above table it is clearly observed that, the operating ratio has been fluctuating
form 2005 to 2007. This has resulted in fluctuation of the profit.
Chart 7.17
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0.74
0.76
0.78
0.8
0.82
0.84
0.86
0.88
Series1 0.87 0.8 0.79
36,37,26,6 46,30,90,6 53,92,93,7
32,48,62,64846,30,90,69053,92,93,728
2005 2006 2007
9) TOTAL ASSETS TURNOVER RATIO
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(i) Significance
This ratio shows the firms ability in generating sales from all financial resources
committed to total assets.
(ii) Table 4.44
YEAR SALES TOTAL ASSETS RATIO
2005 36,37,26,667 15,63,34,620 2.33
2006 46,30,90,690 17,24,88,275 2.68
2007 53,92,93,728 22,37,91,941 24.09
(iii) Interpretation
The total assets turnover of 2.33 times in 2005, 2.68 times in 2006, 24.09 times in 2004,
which implies that the company generates a sale of Rs.2.33 in 2005, 2.68 in 2006, 24.09in 2007,
against one rupee investment infixed and current assets together.
(iv) Chart 4.11
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0
5
10
15
20
25
Series1 2.33 2.68 24.09
15,63,34,6 17,24,88,2 22,37,91,9
36,37,26,6646,30, 90,6953,92, 93,72
2005 2006 2007
10) FIXED ASSETS TURNOVER RATIO
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(i) Table 7.18
YEAR SALES NET FIXEDASSETS RATIO
2005 36,37,26,667 40,62,47,008 0.89
2006 46,30,90,690 40,22,69,816 1.15
2007 53,92,93,728 58,97,44,071 0.91
(ii) Interpretation
From the above table it is clearly observed that the companys fixed assets turnover ratios
were decreasing during 2005 to 2007 which show that the company did not use its fixed assets
promptly.
(iii) Chart 7.19
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0
0.2
0.4
0.6
0.8
1
1.2
Series1 0.89 1.15 0.91
40,62,47,00 40,22,69,81 58,97,44,0
36,37,26,66746,30,90,69053,92,93,728
2005 2006 2007
11) CURRENT ASSETS TURNOVER RATIO
(i) Table 7.20
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YEAR SALES CURRENT ASSETS RATIO
2005 36,37,26,667 3,28,37,649 11.08
2006 46,30,90,690 4,45,82,565 10.39
2007 53,92,93,728 12,05,65,607 4.47
(ii) Interpretation
From the above table it is clearly observed that, during 2005 to 2007 current assets were
sufficiently used.
(iii) Chart 7.21
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0
2
4
6
8
10
12
Series1 11.08 10.39 4.47
3,28,37,649 4,45,82,565 12,05,65,6036,37,26,66746,30,90,69053,92,93,728
2005 2006 2007
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CHAPTER-V
FINDINGS
FINDINGS
The company net sales were increased during the three years.
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The cost of sales was increased due to production increased.
The operating expenses were increased during the three years.
The operating income was increased during the study period.
The depreciation was increased due to fixed assets were increased and used.
Company profits were increased year by year due to increase of sales and efficient
management.
Company raised borrowings year by year.
Fixed assets were increased during the study period.
Net working capital was increased during the last two years.
Current & liquidity ratios during the five years matching ideal ratio so companys solvency
and liquidly positions were good.
Inventory turnover ratio shows normal fluctuations during 2002 to 2006 due to product is
moving in market.
Debtors enjoying credit facility more than 150 days.
Proprietary ratios during the three years were not satisfactory.
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Debt equity ratio shows that the lenders have contributed more than owners.
During 2005 to 2007 fixed assets were not properly used.
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SUGGESTION
SUGGESTION
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During the five years study low inventory turnover ratio is found due to production was not
matching with the demand. So create the demand for the product. Debt should be collected in right
time and rectify debt collection department.
Apply budget and budgetary control system for each and every item of operating expenses
Push sales and reduce expenses in order to retain its current positions. Product is not familiar to
market so make advertisement in appropriate media. Motivate sales representatives through various
promotional activities.
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CONCLUSION
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CONCLUSION
During the project study period it was observed that the companys financial position as steadily
increasing, sales were increasing, and assets were effectively utilized.
The companys borrowings were increasing compare with every previous year hence which should
be considered so as to avoid high burden.
The project period gave an opportunity to interact with the experienced people and gains
acquire knowledge about various financial activities.
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BIBLIOGRAPHY
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BIBLIOGRAPHY
S.NO AUTHOR NAME BOOK NAME
1
Dr.S.N. MAHESHWARI
Management Accounting . Edition
Published by Sultan Chand & Sons.
2
I.M.PANDEY
Financial Management , Vikas
Publishing House Private Limited.
3
R.S.N. PILLAI BAGAVATHI
Management Accounting . Edition
Published by Sultan Chand Company
Limited.
4 R.PRASANNA CHANDRA Financial Management, Himalaya
Publication Limited, Delhi.
Reference sites
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http://www.moneycontrol.com/financials/ultramarinepigments/balance-sheet/UP02
http://www.ultramarinepigments.net/
http://money.rediff.com/money/jsp/company.jsp?companyCode=16090012
http://economictimes.indiatimes.com/ultramarine-&-pigments-ltd/stocks/companyid-12880.cms
http://www.thirumalaichemicals.com/upl.html
92
http://www.moneycontrol.com/financials/ultramarinepigments/balance-sheet/UP02http://www.ultramarinepigments.net/http://money.rediff.com/money/jsp/company.jsp?companyCode=16090012http://economictimes.indiatimes.com/ultramarine-&-pigments-ltd/stocks/companyid-12880.cmshttp://www.thirumalaichemicals.com/upl.htmlhttp://www.moneycontrol.com/financials/ultramarinepigments/balance-sheet/UP02http://www.ultramarinepigments.net/http://money.rediff.com/money/jsp/company.jsp?companyCode=16090012http://economictimes.indiatimes.com/ultramarine-&-pigments-ltd/stocks/companyid-12880.cmshttp://www.thirumalaichemicals.com/upl.html8/6/2019 YUVA Main Project MBA
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ANNEXURE
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PROFIT AND
LOSS A/C
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ULTRAMARINE & PIGMENTS PROFIT AND LOSS A/c
particulars 2005 2006 2007
Sales 36,37,26,667 46,30,90,690 53,92,93,728
Less: selling &
administrative express32,48,62,648 37,43,47,830 4300,47,853
operating income 8,19,04,800 12,39,10,600 1,20,87,000
Add: other income 44,92,565 39,37,268 1,19,46,451
Total income 40,68,06,105 49,84,96,558 55,12,40,451
Less: interests 1,61,15,267 1,22,58,400 1,45,77,140
Profit before tax 2,67,73,785 7,35,04,710 6,36,66,606
Provision for tax ------- 41,94,777 71,63,854
Net profit for the year 1,47,03,555 5,80,90,883 3,91,18,336
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BALANCE
SHEET
ULTRAMARINE & PIGMENTS BALANCE SHEET
S.no Particulars 2005 2006 2007
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A Source Of funds
Shareholders funds
Share capital 45,45,12,880 45,45,12,880 45,45,12,880
B Reserves and surplus 13,28,556 13,28,556 2,98,91,848
Loan FundsC Secured 6,95,62,711 12,36,97,653 21,44,02,377
Unsecured 7,15,00,000 7,25,00,000 7,62,80,250
Total 59,69,04,147 65,20,39,089 79,74,42,083
Application of funds
D Fixed Assets
Gross block 68,11,09,760 71,52,23,464 94,55,34,607
Less: depreciation 27,48,62,752 31,28,79,914 35,57,46,560
40,62,47,008 40,23,43,550 58,97,88,047
E Capital work-in-progress 7,30,37,701 18,86,67,805 8,70,35,784Deferred tax assets 1,12,62,492 10,86,124 --------
F Current assets, loans &
advances
Accrued income 59,046 2,13,853 ------
Inventories 11,25,74,217 12,63,30,817 13,91,96,849
Sundry debtors 1,81,40,354 2,20,36,659 4,02,25,572
Cash and bank balance 1,77,72,110 1,46,20,968 1,85,53,538
Loans and advances 77,88,893 97,27,489 2,61,88,027
15,63,34,620 17,29,29,786 22,41,63,986
G Less: current liabilities and
provisions
12,34,96,971 12,86,46,517
10,35,45,734
Net Current Assets (F-G) 3,28,37,649 4,42,83,269 12,06,18,252
Profit and loss account 7,35,19,297 1,56,58,341 --
Total 59,69,04,147 65,20,39,089 79,74,42,083