Mahendra institute of management

And
Technical studies

A project study report

On
RATIO ANALYSIS

PREFACE
The MFC curriculum is designed in such a way that
student can grasp maximum knowledge and can get practical
exposure to the corporate world in minimum possible time.
Business schools of today realize the importance of practical
knowledge over the theoretical base. The Spring Internship
Program provides an opportunity to the students in
understanding the industry with special emphasis on the
development of skills in analyzing and interpreting practical
problems through the application of management theories and
techniques. It is a new platform of learning through practical
experience, which incorporates survey and comparative
analysis. It gives the student an opportunity to relate the
theory with the practice, to test the validity and applicability
of his/her classroom learning against real life business
situations. 1

ACKNOWLADGEMENT

I take this opportunity to express my profound gratitude

and deep regards to my guide for his exemplary
guidance, monitoring and constant encouragement
throughout the course of this training. The help and
guidance given by him time to time shall carry me a long
way in the journey of life on which I am about to
embark. Lastly, I am thankful to staff of COCA COLA
for answering my each query regarding the process of the
company. I am obliged to staff members of COCA
COLA for the valuable information provided by them in
their respective fields. I am grateful for their cooperation
during the period of my assignment. I am making this
project not only for marks but to also increase my
knowledge.

THANKS AGAIN TO ALL WHO HELPED ME.

DECLARATION
I do hereby declare that this project report entitled
Working Capital Management of RSP is prepared
by me on the basis of the information collected by me
during the duration of 33 days i.e. from 1 st May, 2014 to
16th June, 2014, under the valuable guidance of Shri. S.
R. BEHERA Manager (F&A) Sales Accounts
Department. I hereby declare that I have fulfilled all the
provisions of institutional training in Rourkela Steel Plant.
During my training I gained knowledge on capital
structure and cost of capital of Rourkela Steel Plant,
Rourkela.

MADHUSMITA ROUT
Roll No 13MFC27
MFC (2013-15)

Summary of that Study:In this project, titled A STUDY ON FINANCIAL

PERFORMANCE USING RATIO ANALYSIS AT COCA COLA
BEVERAGES LTD. This aim is to analysis the liquidity and
profitability position of the company using the financial tools.
This study based on financial statements such as Ratio
Analysis, Comparative balance sheet. By using this tools
combined it enables to determine in an effective manner.
The study is made to evaluate the financial position, the
operational results as well as financial progress of a business
concern.
This study explains ways in which ratio analysis can be of
assistance in long-range planning, budgeting and asset
management to strengthen financial performance and help
avoid financial difficulties.
The study not only throws on the financial position of a
firm but also serves as a stepping stone to remedial measures
for coca cola .
This project helps to identify and give suggestion the area
of weaker position of business transaction in COCA COLA
LTD.

TABLE OF CONTENT PREFRANCE

1 ACKNOWLEDGEMENT
2TABLECONTENT....................................................... 3
INTRODUCTION ...........................................................................................................
............................. 5 HISTORY OF THE COCACOLA .............................................................................................................. 6 COCACOLA SYSTEM IN
INDIA ........................................................................................................... 10 COLACOLA INDIA PVT.
LTD........................................................................................................... 11
HINDUSTAN COCA-COLA BEVERAGES PVT.
LTD. ..................................................................... 11 BOTTLING NETWORK OF
COCA-COLA .....................................................................................12 THE
PRESENT POSITION OF COCA-COLA
INDIA............................................................................. 13 PACKAGES OF THE
PRODUCTS....................................................................................................... 14
COMPETITORS OF COCA-COLA IN
INDIA .........................................................................................15 LIST OF
COMPETITORS AND THEIR
PRODUCTS ......................................................................... 16 HCCBPL PLANT AT
GOBLEJ

COMPANY PROFILE

HISTORY OF THE COCA-COLA

[MIRACLE BY DR. JOHN PEMBERTON] The first Coca-Cola recipe was

invented in Columbus, Georgia, by John Stith Pemberton, originally in

1885 coca wine was called as a Pembertons French wine coca. As
miracle was made by John Stith, it is assumed that he may have been
inspired by the formidable success of European Angelo Marianas, coca
wine. John Pemberton concentrated the Coca-Cola formula in a three
legged brass kettle in his backyard. The name was a suggestion given by
John Pembertons book keeper Frank Robinson. The first sales were at
Jacobs pharmacy in Atlanta, Georgia, on May 8 1886. It was initially
sold as a patent medicines for five cents a glass at soda fountains, which
were popular in the united states at the time due to the belief that
carbonated water was good for the health. Pemberton claimed Coca-Cola
cured many diseases, including morphine addiction, dyspepsia,
neurasthenia, headache, and impotence. Pemberton ran the first
advertisement for the beverage on May 29 of the same year in the Atlanta
journal. For the first eight months only nine drinks were sold each day.
Coca-Cola was sold in bottles for the first time on March 12 1894. Cans
of coke first appeared in 1955. The first bottling of Coca-Cola occurred in
Vicksburg, Mississippi, at the biedenharn candy company in 1891. Its
proprietor was Joseph a biedenharn. The original bottles were biedenharn
bottles, very different from the much later hobble-skirt design that is now
so familiar. As a Candler was tentative about bottling the drink, but the
two entrepreneurs who proposed the idea were so persuasive. However
that Candler signed a contract proved to be problematic for the company
for decades to come, legal matters were not helped by the decision of the
bottlers to subcontract to other companies- in effect, becoming parent
bottlers. The Coca-Cola Company is a 120 years old company with its
origin from Atlanta, Georgia. Coke was at first used as a refreshment
drink. The drink was discovered by Dr. John Pemberton on May 8, 1886.
The soft drink was given the name Coca-Cola by Frank Robinson. The
Coca Cola Company was bought over and incorporated by Asa Griggs
Candler, an entrepreneur. The company was then patented in the year
1887 and final was registered in 1893. Coke sells 1.7 billion drinks a day
and it is the most recognized brand in the world. Coca-Cola currently
offers more than 500 brands in over 200 countries or territories. The
formula of manufacturing Coke lies in Downtown Atlanta on a piece of a
paper. The Coca-Cola Company was founded by Mr. Asa Griggs Candler
after he bought the brand in 1889 and incorporated the company in 1892.

Muhtar Kent is the current chairman & chief executive of the company.
The Coca-Cola Company is a beverage company which has several
competitors throughout the world. But the leading competitors of the
company globally are PepsiCo, Nestle and Dr. Pepper Snapple Group.
The people of Hong-Kong use Coca-Cola as a medicine for cough &
cold, by serving it hot then its normal temperature. 7

 Committees of the Board:2.1 Audit Committee of Directors The Board of Directors of the Company has
constituted the Audit Committee of Directors to oversee the companys financial
reporting process and disclosure of financial information and to review Internal
Audit reports, findings of internal investigations. All accounting and financial
policies of the company are being considered by the Audit Committee before
submission to the Board. The Audit Committee comprises of three NonExecutive Directors and one Executive Director. The Chairman of the Audit
Committee is Non-Executive Director.

Project Implementation Review Committee

(PIRC) of Directors:The Project Implementation Review Committee (PIRC) of Directors
constituted by the Board of Directors comprises of three Non-Executive
Directors and two Executive Directors. The Committee reviews the progress of
Phase-II Project and advises on critical issues, if any arise during
implementation.

Bond / Debenture Committee of Directors:The Board of Directors have constituted the Bond/Debenture
Committee of Directors comprising of two members to expeditiously consider
and approve allotment / issue, transfer, transmission, consolidation, splitting of
bonds of the Company and other related issues.

Share Committee of Directors :The Board of Directors have

constituted a Share Committee of Directors comprising of four members to

expeditiously consider and approve allotment of equity shares against Rights

Issue.

Policies of NINL :-

Quality Policy
Human Resource Policy
Environmental Policy
Human Resource Development Policy
Energy Policy
Occupational Health And Safety Policy

Quality Policies

We, at NINL are committed to meet the needs and expectations of customers
and other interested parties. To accomplish this, we will :
Produce quality products and provide services to all customers to earn
their confidence and their delight.

 Achieve quality of the products by following systematic approach

through planning, documented procedures and timely review of quality
objectives.
Continually improve the quality of all materials, process and products.
Maintain an enabling environment, which encourages teamwork and active
involvement of all employees with total commitment.
Energy Policies

We, at NINL are committed to optimally utilize various forms of energy in a

cost effective manner to affect conservation of energy. To accomplish this, we
will

Monitor closely and control the consumption of various forms of energy

through an effective Energy Management System.

Adopt appropriate energy conservation technologies.

Maximize the use of cheaper and easily available forms of energy

Make energy conservation a mass movement with the involvement of all
employees.
Maximize recovery of waste Energy

Human Resources Policies

We, at NINL believe that our employees are the most important resource. To
realize the full potential of the employees, the company is committed to
Provide work environment that makes the employees committed and
motivated for maximizing productivity.

Establish system for maintaining transparency, fairness in dealing with

employees.

Empower employees for achieving targets through commitment,

responsibility and accountability.
Encourage teamwork, creativity, innovativeness and high achievement
orientation.
Provide opportunities for developing skill and knowledge for employee
growth.
Ensure effective communication channels with employees

Introduction of Ratio analysis

RATIO ANALYSIS
INTRODUCTION
There are a number of tools and techniques to analyze the financial
Information presented in financial statements. These are, comparative
statements, common -size statements, trend analysis, ratio analysis etc. But the
techniques of financial analysis discussed earlier are not so useful to judge the
detailed financial efficiency of a concern from different angles. The ratio
analysis is a technique of financial analysis which concerns with analyzing the
financial information in depth, from different angles. It is a most widely used
technique to evaluate the detailed financial efficiency of the business concern.
There are a number of ratios out of which different ratios can be use to examine
the financial ability of a firm from different angles.
MEANING OF RATIO
A ratio is an arithmetic expression of quantitative relationship between
related numerical facts. It may be expressed as a quotient, percentage or
proportion. According to accountants hand book of wixon, kell and Bedford, a
ratio has been defined an expression of the quantitative relationship between
two number kohler defines

ratio as a relation of an amount a to anther b

expressed as the ratio of a to b (a : b) . This expression is read as a is to b . A

ratio can be also be expressed as a single number in a simple fraction, integer or
decimal fraction .
MEANING OF RATIO ANALYSIS
The ratio analysis concerns with calculating different ratios by using the
required financial information presented in the financial statements. Therefore,
the ratio analysis can be defined as the process of determining the quantitative
relationship between the related components of the financial statements in order

to judge the financial efficiency of a business concern .the different

components are to be used for judging ability from different aspects.
INTERPRETATION OF THE RATIOS:The interpretation of ratios is an important factor. The inherent
limitations of ratio analysis should be kept in mind while interpreting them. The
impact of factors such as price level changes, change in accounting policies,
window dressing etc., should also be kept in mind when attempting to interpret
ratios. The interpretation of ratios can be made in the following ways.

Single absolute ratio

Group of ratios

Historical comparison

GUIDELINES OR PRECAUTIONS FOR USE OF

RATIOS:The calculation of ratios may not be a difficult task but their use is not
easy. Following guidelines or factors may be kept in mind while interpreting
various ratios is
Accuracy of financial statements
Objective or purpose of analysis
Selection of ratios
Use of standards
Caliber of the analysis

IMPORTANCE OF RATIO ANALYSIS :

Aid to measure general efficiency

Aid to measure financial solvency

Aid in forecasting and planning

Facilitate decision making
Aid in corrective action
Aid in intra-firm comparison
Act as a good communication
Evaluation of efficiency
Effective tool
LIMITATIONS OF RATIO ANALYSIS : Differences in definitions
Limitations of accounting records
Lack of proper standards
No allowances for price level changes
Changes in accounting procedures
Quantitative factors are ignored
Limited use of single ratio
Background is over looked
CLASSIFICATION OF RATIOS
The ratio analysis is not only useful to the management but also useful to

other parties interested in the financial ability of a business concern. These three
basis of classification are as follows :
1. Traditional classification
2. Significant classification
3. Functional classification

1. Traditional classification

This classification is based on the sources of financial information for

such ratio analysis. These financial statements are the position statement or
balance sheet and the income statement. The sources of information for some
ratios is the position statement and some ratios are calculation by using the
financial information exclusively form the income statement. The ratio atre also
known as the statements ratios under this classification. under this basis the
ratios can be classified into three different categories as follows.
A. Position statement ratio
B. Income statement ratio
C. Composite ratio
A .Position statement ratio The ratio which are calculated by using the
financial data exclusively from the position statement are called position
statement ratio. These are also known as the balance sheet ratio. The ratio is
ratio, capital gearing ratio, current assets to fixed asset ratio etc.
B. Income statement ratio The ratio which are exclusively concerned with
the financial information presented in the income statement are call the income
statement ratio. It is also call as profit and loss account ratios. These are gross
profit ratio, net profit ratio, operating ratio, operating profit ratio, expense ratios
etc.
C. Composite ratios - this ratio are calculated by taking financial information
from both financial statements. One accounting data is taken from the position
statement and the from the income statement in order to calculate each of these
ratio. These ratios are also known as inter-statement ratios or mixed ratios.
These are inventor or stock turnover ratio, creditor turnover ratio, working
capital turnover ratio, debtor turnover ratio, fixed assets turnover ratio, ROI,
ROCE, EPS, DPS etc.
2. Significant classification
The classification is based on the importance of such ratio for inter-firm
comparison. As we know, the competition is increasing day-by-day in modern

business. Therefore, the ratio can also be classified into the two categories
according to their importance for inter- firm comparison these are:
A. Primary ratio
B. Secondary ratio
A. primary ratio:The ratio which are considered as most important for the
inter-firm comparison are call primary ratio there is only one such ratio which
is the return on capital employed . The firm earning higher rate of profit on its
capital employed is comparatively better in its overall activities.
B. Secondary ratio:-The ratio which are not so important for inter-firm
comparison are called secondary ratio. These ratios are generally used to
measure the efficiency of various internal activities of a concern.
3. Functional classification
The financial efficiency of a business concern in normally tested from
four different angles such as judging short-term solvency, judging long-term
solvency, judging operating activities and judging profitability. Therefore, all
the ratios can also be classificationinto four different groupsaccording to their
functions to test the financial ability of a concern form the above four specified
angles . such as:
A.
B.
C.
D.

Liquidity ratio
Activity ratio
Solvency ratio
Profitability ratio

A. Liquidity ratio
These ratio concern with the analysis of short-term financial ability of a
business enterprise, these are calculated by comparing different component of
the current assets with the current liabilities. These ratios are most useful for the

short term creditors to judge the ability of the concern to repay their claim in
1.
2.
3.
4.
1.

right time .the following ratio are to be calculated for such purpose.
Net working capital
Current ratio
Liquid ratio
Absolute liquid ratio
Net working capital :- Net working capital is the excess of current assets over
current liabilities a business concern. The net working capital is also popularly

known as working capital. It can be calculated as under.

Net working capital= current assets- current liabilities
2. Current ratio :- The current ratio is proportion of the current assets on the
current liabilities of a business concern. It is calculated by dividing the total of
current assets by total of all current liabilities
Current assets

Current ratio= Current liabilities

Significance:- According to accounting principles, a current ratio of 2:1 is
supposed to be an ideal ratio.
It means that current assets of a business should, at least , be twice of its current
liabilities. The higher ratio indicates the better liquidity position, the firm will
be able to pay its current liabilities more easily. If the ratio is less than 2:1, it
indicate lack of liquidity and shortage of working capital.
The biggest drawback of the current ratio is that it is susceptible to window
dressing. This ratio can be improved by an equal decrease in both current
assets and current liabilities.

3. Liquid ratio :- The quotient which is by dividing the total liquid assets by the
total current liabilities of firm is call liquid ratio. It is useful to measure the
ability of a business concern to repay its current liabilities immediately at their
due dates . The liquid ratio can be calculated by the following way .
Liquid ratio =

l iquidquick assets
current liabilities

*Liquid assets = current assets inventories prepaid expenses

Significance:- An ideal quick ratio is said to be 1:1. If it is more, it is

considered to be better. This ratio is a better test of short-term financial position
of the company.
4. Absolute liquid ratio :- The ratio of absolute liquid assets to current liabilities
is called absolute liquid ratio. It concern with measuring the absolute liquidity
position of a business firm. The absolute liquidity assets include all those
current assets which are in cash or equivalent to cash such as, cash in hand, cash
at bank, marketable securities and short term investment. The absolute liquidity
ratio can be calculated by using the following formal.
Absolute liquidity ratio =

Absolute liquid assets

current liabilities

Significance :- An ideal absolute quick ratio is said to be 0.5. If it is more or it

less considered to be difficult to be survive. This ratio also is a better test of
short-term financial position of the company.
B. Activity ratios :These ratios concern with exhibiting the efficiency of different activities in
which the resources of the firm have been employed. They can indicate the
rapidity in movement of different assets and liabilities of a business concern.
Therefore, these ratios are also known as turnover ratio. The various turnover
ratios are as follows:
1. Inventory turnover ratio As we know every business concern has to
maintain a certain levels of inventories for uninterrupted operation of its day-to
day business activities. But those inventories should be converted into next
forms as quick as possible. So,
Inventory turnover ratio =

Cost of good sold

Average inventory at cost

* Generally cost of goods sold may not be known from the published
financial statements. In such case this ratio may be calculated by dividing net
sales by average inventory at cost.
Inventory turnover ratio =

Net Sales
Average Inventory at cost

Significance:- This ratio indicates whether stock has been used or not. It
shows the speed with which the stock is rotated into sales or the number of
times the stock is turned into sales during the year.
The higher the ratio, the better it is, since it indicates that stock is selling
quickly. In a business where stock turnover ratio is high, goods can be sold at a
low margin of profit and even than the profitability may be quit high.
2. Debtor Turnover Ratio:- This ratio concern with analysis the promptness in
debts collection by business firm. The efficiency in debts management can be
tested by this ratio . This ratio is also known as debtor velocity ratio. Because it
indicates the velocity of debtors during the concerned accounting year. The
following formulae can be used can for such calculation.
Debtor turnover ratio =

Annual net credit sale

Average debtors

Average debts collection period =

periodthe year
debtor turnover ratio

Note:- If any information about opening & closing trade debtors are
not given ,then debtors turnover ratio can be calculated :* Debtor turnover ratio =

Total sale
debtors

Significance :- This ratio indicates the speed with which the amount is collected
from debtors. The higher the ratio, the better it is, since it indicates that amount
from debtors is being collected more quickly. The more quickly the debtors pay,

the less the risk from bad- debts, and so the lower the expenses of collection and
increase in the liquidity of the firm.

3. Creditors turnover ratio:- The ratio which concern with exhibiting the
rapidity of creditors payment is called creditors turnover ratio. The average
creditors payment period can be known by the help of this ratio. Such period
can be calculated by dividing the period in the concerned accounting year either
bin day or in moths or in weeks, by the creditors turnover ratio. They can be
calculated as follows.
Creditors turnover ratio =

Annual net credit purchases

Average creditors

Average creditors payment period =

period the year

creditors tunover ratio

Significance :- This ratio indicates the speed with which the amount is being
paid to creditors. The higher the ratio, the better it is, since it will indicate that
the creditors are being paid more quickly which increases the credit worthiness
of the firm.
4. Working capital turnover ratio:-This ratio can be calculated by dividing the
cost of sale of the wholes accounting year by the average of net working
capital .the cost of goods sold or the net sales figures may also be used for such
calculation , if no information is available regarding the cost of sales.
Cost of sales

Working capital turnover ratio = Average net wroking capital

Period the year
Average working capital circulation period = working capital
turnover ratio

Note:- Instead of cost of sales we can used sales as numerator & Net
working capital as denominator. So,

Sales
*Working capital turnover ratio = Net wrokingcapital

Significance:- This ratio is of particular importance in non-manufacturing

concerns where current assets play a major role in generating sales. It shows the
number of times working capital has been rotated in producing sales.
A high working capital turnover ratio shows efficient use of working capital and
quick turnover of current assets like stock and debtors.
A low working capital turnover ratio indicates under-utilization of working
capital.

C. Solvency ratio
The liquidity ratio discussed earlier concern with measuring the shoutterm financial position of a concern. They indicate the ability of a firm to meet
its current obligation in due times. Those ratios are not helpful for determining
the long term solvency position of a business firm. The following are such

ratios to examine the long-term solvency of a business concern.

1.
2.
3.
4.
5.
6.
1.

Debt-equity ratio
Proprietory ratio
Solvency ratio
Fixed assets ratio
Coverage ratio
Cash flow ratio
Debt-equity ratio:- The ratio which representing the debt as proportion on
owned capital of a business undertaking is called Debt-equity ratio. It can be
calculated as under.
Debt-equity ratio=

Total longterm debts

shareholer s ' funds

or

Outsiders fundExternal equities

shareholer s ' funds

Significance:- This Ratio is calculated to assess the ability of the firm to meet
its long term liabilities. Generally, debt equity ratio of is considered safe.
If the debt equity ratio is more than that, it shows a rather risky financial
position from the long-term point of view, as it indicates that more and more
funds invested in the business are provided by long-term lenders.
The lower this ratio, the better it is for long-term lenders because they are more
secure in that case. Lower than 2:1 debt equity ratio provides sufficient
protection to long-term lenders.

2. Proprietary ratio : The proprietary ratio is another approach to determine the

long term solvency position of business undertaking. it concerns with
establishing the relationship between the owners net equity and the total net
assets of a business firm. Therefore, this ratio is also called as net worth ratio or
equity ratio. This ratio can be calculated as follows.
Proprietary ratio =

Owners net worth

total net assets

100

Significance:- This ratio should be 33% or more than that. In other words,
the proportion of shareholders funds to total funds should be 33% or more.
A higher proprietary ratio is generally treated an indicator of sound financial
position from long-term point of view, because it means that the firm is less
dependent on external sources of finance.
If the ratio is low it indicates that long-term loans are less secured and they
face the risk of losing their money.

3. Solvency ratio :- This ratio is the little variant of the proprietory ratio. It
concern with measuring the proportion of total net assets financed by outside
liability .This ratio is calculated as the percentage of total outside liabilities on

the total net assets of a business enterprise. Therefore this ratio is also call as
debt to total assets ratio or debt to total capital ratio. This ratio can be calculated
as under .
Solvency ratio =

Total ouside liabilities

Total net assets

100

Significance:- Generally lower the ratio of total liabilities to total asset , more
satisfactory or stable is the long term solvency position of the firm.
4. Fixed assets ratio:- The ratios which concern with measuring the proportion of
fixed assets on different components of capital are called fixed assets ratio. The
following are such fixed assets ratio.
(a) Fixed assets to net worth ratio:- This ratio concern with expressing the fixed
assets of a firm as percentage on net worth available to the . it indicates the
portion of the fixed assets financed by the owners fund.

The following

formula can be to calculate this ratio

Total

Fixed assets to net worth ratio = assets Ownersequity

100

Significance:- It indicates the extent to which the shareholders funds are sunk
Into the fixed assets. Normally 60 to 65 percent is considered to be satisfactory
ratio.
(b) Fixed assets to long term funds ratio: - This ratio concern with reflecting
the total fixed assets as a percentage on long- term funds of the business
concern. The long-term funds for this ratio are the owners equity and longterm debts.

Total

Fixed assets to long-term funds ratio = assets Total longterm

100
funds

Significance:-Here the total fixed asset must be above to the long term funds
which is good for company. Because some part of working capital requirements
is met out of the long term funds of the firm.

5. Coverage ratio- The ratio which concern with measuring the sufficiency of the
profit earned to meet various fixed charges of a business enterprise are called
coverage ratio. The following are such coverage ratios.
(A) Interest coverage ratio: - This ratio indicates the proportion of operation
profit to the fixed interest charge of a business concern. Here, the concern of
operation profit is the profit before interest and corporate income tax. Because
the interest is tax deductible.
Interest coverage ratio=

Operating profitEBIT
interest charges

(B) preference dividend coverage ratio:- This ratio concerns with analysing
the adequacy of profit after tax to pay the dividend payable to preference
shareholders is also one of the fixed charges for a joint stock company. Because
that dividend paid at an agreed fixed rate.
Preference dividend coverage ratio =

EAT
Preference dividend

(c) Total coverage ratio:-A business concern may have some other fixed
charges in addition to interest and preference dividend such as lease payment,
instalment payment on long-term debts etc . The ratio which concern with
determined the ability of a business firm to cover its total fixed charges is total
coverage ratio. The Total coverage ratio may be calculated as follows:Total coverage ratio=

EBIT + Non cash expenseslosses

charge after tax
charges before tax+
1Tax rate

Tax rate =

tax pre cent

100

6. Cash flow ratio:- This ratio is calculated by dividing the annual net cash inflow
by the total fixed charges. The net cash inflow flow for this purpose is excluding
the amount of cash required for day-to-day operation of the business activities.
This ratio indicates the adequacy of cash inflow to pay such fixed charges.

Therefore, this ratio is also called as cash to debt service ratio. the formula to
calculate this ratio may be as under.

Annual net cash inflow before interest tax

Cash flow ratio = changes before tax+ charge after tax
1tax rate

D. Profitability ratio:-The ratio which are calculated to evaluation

the

sufficiency of the profit earned by a business concern are called Profitability

ratios .They indicate the comparative results of the business operation of a
firm , during the concerned accounting year .
Classification of profitability ratio
The profitability ratio can be classified into two on the basis of their
importance. Those classifications are as under:
1. General profitability ratio
2. Overall profitability ratio
1. General profitability ratio:- These profitability ratio are not so important
form the management point of view .They simply concern with determining the
percentage of profits under different concepts, on the net sale revenue .
Therefore , these ratio are also knows as the profitability ratio related to sales .
The following are such general profitability ratio .
a) Gross profit ratio.
b) Net profit ratio.
c) Operating profit ratio.
d) Operating expense ratio.
e) Expense ratio
(a) Gross profit ratio:-The profitability ratio which concerns representing the
gross profits as a percentage on net sales is called gross profit ratio. This ratio
can be calculated as under:
Gross profit
Gross profit ratio= Net sale

100

(b)Net profit ratio:-This ratio concerns with determining the percentage of net
profit earned by a business undertaking on its net sales revenue. This ratio is
also called as the net profit margin. The net profit for this purpose is the profit
after interest and corporate income tax(EAT).This ratio can be calculated by the
following way.
Net profit ratio=

Net profit ( EAT )

Net sales

100

(c) Operating profit ratio:-This profitability ratio is the percentage of operating

profit on the net sales revenue of a business concern. The profit before interest
and corporate income tax (EBIT) is the operating profit for calculating this
ratio. The following formula can be used to calculate this ratio.
Operating profit ratio=
(d)

OPerating profit (EBIT )

Net sales

100

Operating expenses ratio:-The percentage of total operating cost of a

business concern on its net sales revenue is called operation expenses ratio. This
ratio is also popularly known as operating ratio. This ratio is to be calculated as
follows.
Operating expenses ratio =

Operationg Cost
Net sales

100

(e) Expenses ratios:-The different expenses ratios of a business concern should

also be calculated in addition to the profitability ratio discussed earlier .these
ratio helpful in future planning and forecasting , such expenses ratios can be
calculated as under.

Cost of goods sold

100
Net sales

i.

cost of goods sold ratio =

ii.

Administrative expenses ratio =

Administrative expses
100
Net sale s

iii.

Selling and distraction expenses ratio =

iv.

N0n-operating expenses ratio =

v.

Financial expenses ratio =

Sellingdistribution expese
100
Net sales

Non operating expenses

100
Net sales

Financial expenses
100
Nte sales

2. Overall profitability ratio: - The profitability ratio discussed earlier are not so
useful for analyzing the profit of a business concern form investment point of
view. Those ratio simply concern with expressing the profit under different
concepts as a percentage of net sale. The following profitability ratio can be
calculated to examine the overall efficiency in earning of a business firm.
3. Return on investment (ROI)
4. Return on equity capital
5. Return on capital employed
6. Earnings per share(EPS)
7. Earning yield ratio
8. Dividend per share (DPS )
9. Dividend yield ratio
10.Dividend pay-out ratio
11.Price earnings ratio
(a) Return on investment:Return on shareholders investment popularly known as RETUN
ON INVESTMENT Or return on shareholder/proprietors funds is the
relationship between net profits (after interest & tax) and the proprietors
funds. Thus,
Return on Investment =

Net profit (after taxinterest )

Shareholder ' s funds

(b) Return on Equity capital:Return on equity capital which is the relationship between profits
of a company & its equity capital, can be calculated as:Return on equity capital =

(c)Return on capital employed:-

Net profit after tax preference Dividend

Equity share capital ( paid up)

Return on capital employed establishes the relationship between

profits and the capital employed. It is the primary ratio and is most
widely used to measure the overall profitability and efficiency of a
business.
The term capital employed refers to the total investments made in a
company and can be defined in a number of ways. Three most widely
used in a business.
Gross capital employed:Gross capital employed = Fixed Assets + Current Assets
Net Capital employed:Net capital employed = Total assets Current liabilities
Proprietors Net capital employed:Proprietors Net capital employed =
Fixed Assets + current liabilities- outside liabilities
(d) Earnings per share:Earnings per share is a small variation of return on equity capital. So
E.P.S=

Net profit ( after taxinterest ) preffernce share

No. of Equity Shares

(e) Dividend per share:-

Dividend paid

Shareholders
No . of shares

Dividend per share =

(f) Dividend yield ratio:Shareholders are the real owners of a company & they are interested in
real sense in the earnings distributed and paid them as dividends.
Dividend yield ratio

Net profit (after taxinterest )

Number of shares

(g) Earning yield ratio:This ratio also shows the relationship between earning per share and
market values of shares.
Earning yield ratio=

Net profit (after taxinteres t )

x100
Shareholder ' s funds

(h) Dividend pay-out ratio:Mainly to find the extend of which earning per share have been retained
in the business. So,
Dividend pay-out ratio =

Dividend per equity share

market value per equity share

(i) Price earnings ratio:This ratio mainly calculated to estimate of appreciation in the value of
share of a company and is widely used by investors to decide whether
share buy ir not. So,
Price earnings ratio

Market price per equity share

earning per share

LIQUIDITY RATIOS
1 .Net working capital
Net working capital =current assets -current liabilities
Table-2.1.1
Years
Current Assets
current Liabilities
Net working
capital

2012
2011
58007.86 85464.10
60506.76 75087.04
-2498.9 10377.06

2010
54129.78
22180.73
31949.05

2009
56665.56
19862.98
36802.58

Chart -2.1.1

Net Working Capital

40000
35000
30000
25000

Net Working Capital

20000
15000
10000
5000
0
-5000

2012

2011

2010

2009

The above chart shows that in COCA COLA , Net working capital is negative
value in the yr 2012. Net working capital position is increasing in year 2009 as
compared to year 2010. In year 2011 net working capital is decreasing as
compared to year 2010.
1.2. Current ratio

Current ratio =

current assets
current liabilities

Table2. 1.2

Years
Current
Assets
current
Liabilities
Current
ratio

2012
58007.86

2011
85464.1

2010
56129.78

60506.76

75087.64

22180.73

0.958

1.138

2.53

2009
56665.56
19862.98
2.85

Chart -2.1.2

Current Ratio
3
2.5
2
Current Ratio
1.5
1
0.5
0
2012

2011

2010

2009

A relatively high current ratio is an indication that the firm is liquid &
has the ability to pay its current obligation when they become due. The

financial performance of a company ratio is nearer to standard ratio 2:1.

In the study it is noticed that for the period of 201-13 the current ratio is
decreased as compared to the previous year because of increase in
current liability. So a decrease in the current ratio represents decrements
in the liquidity position of the organization .It is using its blocked money
in normal business activities which expected to fetch more return.

1.3Liquid ratioLiquid ratio=

l iquidquick assets
current liabilities

Liquid assets = current assets - inventories - prepaid expenses

Table2. 1.3
Years

2012

2011

2010

2009

Liquid Assets

15476.44

33178.56

29781.38

12305.31

current Liabilities

60506.76

75087.04

22180.73

19862.98

0.25

0.44

1.34

0.61

Liquid ratio

Chart2. 1.3

Liquid Ratio
1.6
1.4
1.2
1

Liquid Ratio

0.8
0.6
0.4
0.2
0
2012

2011

2010

2009

A high acid test ratio indicates that the firm is liquid & has the ability to
meet its current liabilities in time. The acid test ratio is decreased from in
the year 2010-11 to 0.234 in the year 2012. The company need to recast
its quick ratio in the acceptable range of 1:1by reducing its inventory.

1.4 Absolute liquid ratio:Absolute liquid ratio =

Absolute liquid assets

current liabilities

Table 2.1.4
Year
Absolute liquid assets
current Liabilities
Absolute liquid ratio

Chart 2.1.4

2012

2011

2010

2009

8855.15

24999.48

1206.51

2391.34

60506.76

75087.04

22180.73

19862.98

0.146

0.73

0.056

0.12

Absolute liquide ratio

0.8
0.7
0.6
0.5

Absolute liquide ratio

0.4
0.3
0.2
0.1
0
2012

2011

2010

2009

The above chart shows that in NINL, Absolute liquid ratio increasing in year
2011 as compared to year 2009-10. In year 2012 Absolute liquid ratio is
decreasing as compared to year 2011.
2 Activity ratios
2.1. Inventory turnover ratio

Inventory turnover ratio =

Net Sales
Average Inventory at cost

Table2. 2.1.2
Years

2012

2011

2010

2009

193121.66

157760.65

152122.67

131634.66

Average stock

22986.05

23561.37

20541.24

46528.37

Inventory
turnover ratio

8.4

6.69

7.4

7.96

Net sales

Inventory Turnover Ratio

9
8
7
6
Inventory Turnover Ratio

5
4
3
2
1
0
2012

2011

2010

2009

The above chart shows that in NINL, inventory ratio increasing in year 2012 as
compared to year 2009-10. In year 2011 inventory ratio is decreasing as
compared to year 2012 which good sign for the company.

2.2. Debtor Turnover Ratio

Net sale

Debtor turnover ratio = Debtors

Table 2.2.2
Years
Net sale
Debtors
Debtor Turnover
Ratio

Chart 2.2.2

2012
193121.66
1615.65
119.53

2011
157760.65
1303.96
120.98

2010
152122.67
20475.93
7.42

2009
131654.66
599.34
219.66

Debt turn over ratio

250
200
150

Debt turn over ratio

100
50
0
2012

2011

2010

2009

The above chart shows that in NINL, Debtor turnover ratio decreasing in year
2010 was very low In year 2009 Debtor turnover ratio was highedt as compared
to year 2011-12.
2.3. Creditors turnover ratio

Creditors turnover ratio =

Net credit purchases

Creditors

Table 2.2.3
Years
Net credit purchases
Creditors
Creditors turnover
ratio
Chat2. 2.3

2012

2011

2010

2009

125113.55

146648.58

92440.10

89084.42

30959.41

41055.1

6975.58

5374.66

4.04

3.57

13.25

16.57

Creditor Turnover Ratio

18
16
14
12
Creditor Turnover Ratio

10
8
6
4
2
0
2012

2011

2010

2009

The above chart shows that in NINL, Creditors turnover ratio is totally
decreasing in year 2011-12 as compared to year 2009-10. In year 2011 Creditors
turnover ratio is increasing as compared to year 2010.

2.4Working capital turnover ratio

Cost of sales
Working capital turnover ratio = Average net wroking capital

Table2. 2.4
Years
Cost of sales
Average net
working capital
working capital
turnover ratio
Charts 2.2.4

2012
193121.66

2011
157760.65

2009
131634.66

10377.06

2010
152122.6
7
31949.05

-(2498.9)
-77.282

15.20

4.76

3.57

36802.58

W.C . Turnover Ratio

40
20
0
2012

2011

2010

2009

-20

W.C . Turnover Ratio

-40
-60
-80
-100

The above chart shows that in NINL,Working capital turnover ratio negative
value in the year2012. Working capital turnovers increasing in year 2011 as
compared to year 2009& 2010..

3.Solvency ratio
3.1, Debt-equity ratio:Debt-equity ratio=

Total longterm debts

'
shareholer s funds

or

Outsiders fundExternal equities

'
shareholer s funds

Table 2.3.1
Years
2012
Outsiders funds
175388.81
shareholders' funds 99767.47
debt equity ratio
1.75
Chart 2.3.1

2011
181957.46
100008.73
1.81

2010
179362.32
83310.3
2.15

2009
173019.45
79804.3
2.16

Debt-Equity Ratio
2.5
2
1.5

Debt-Equity Ratio

1
0.5
0
2012

2011

2010

2009

The above chart shows that in NINL, debt equity ratio is decreasing in year
2012 as compared to year 2009-10. In year 2011 capital turnover ratio is
decreasing as compared to year 2010. In year 2012 capital turnover ratio is
decreasing as compared to year 2011 which is good for company.

3.2Proprietory ratio
Proprietary ratio =

Owners net worth

total net assets

100

Table 2.3.2
Years
Owners net
worth
total net assets
proprietory
ratio
Chart 2. 3.2

2012

2011

2010

2009

99767.47

100008.73

83310.8

79804.3

335663.04

345041.19

272686.73

284853.87

29.72

28.98

30.55

28.01

proprietory Ratio
31
30.5
30
29.5
proprietory Ratio

29
28.5
28
27.5
27
26.5
2012

2011

2010

2009

The above chart shows that in NINL, propritory ratio highest in year 2010 as
compared to year 2009-10. In year 2011 propritory ratio is decreasing as
compared to year 2010. In year 2012 propritory ratio is increasing as compared
to year 2011.

3.3Solvency ratio
Solvency ratio =

Total ouside liabilities

Total net assets

100

Table 2.3.3
Years

2012

2011

2010

2009

Total outside
liabilities
Total net asset

235895.5

245032.46

201543.05

192882.43

335663.04

345041.19

272686.73

284853.87

solvency ratio

70.27

71.01

73.91

67.71

Chat 2.3.3

Solvency Ratio
76
74
72
Solvency Ratio
70
68
66
64
2012

2011

2010

2009

The above chart shows that in NINL, solvency ratio increasing in year 2010 as
compared to year 2009. In year 2011 solvency ratio is decreasing as compared
to year 2010. In year 2012 solvency ratio is decreasing as compared to year
2011.

3.4.1Fixed assets to net worth ratio

Total

Fixed assets to net worth ratio = assets Ownersequity

100

Table 2.3.4.1
Years
Total fixed assets
owners equity
fixed assets ratio to net wroth
Chart2. 3.4.1

2012

2011

2010

2009

277615.18

259577.02

230724.09

216021.17

99767.47

100008.73

83310.8

74804.3

278.26

259.55

276.94

288.78

Fixxed asset to net worth Ratio

300
290
280

Fixxed asset to net worth

Ratio

270
260
250
240
2012

2011

2010

2009

The above chart shows that in NINL, fixed assets ratio to net worthies
decreasing in year 2010 as compared to year 2009. In year 2011fixed assets
ratio to net worth is decreasing as compared to year 2010. In year 2012 fixed
assets ratio to net worth is decreasing as compared to year 2011. In 2013 fixed
assets ratio to net worth is increasing.

3.4.2 Fixed assets to long term funds ratio

Total

Fixed assets to long-term funds ratio = assets Total longterm

100
funds

Table 2.3.4.2
Years
Total fixed assets
Total long-term fund
fixed assets to longterm funds ratio
Chart 2.3.4.2

2012

2011

2010

2009

277615.1
8
275156.2
8
100.89

259577.02

230724.09

216021.37

251885.53

262673.14

252823.75

103.05

87.83

85.44

Fixxed asset to long term funds Ratio

120
100
80

Fixxed asset to long term

funds Ratio

60
40
20
0
2012

2011

2010

2009

The above chart shows that in NINL, Fixed assets to long-term funds ratio is
greater in the year 2011 as compared to other year. In year 2010 fixed assets to
long-term is lower than the other financial years.

3.5 Interest coverage ratio

Interest coverage ratio=

Operating profitEBIT
tnterest charges

Table 2.3.5
Years
operating profit
or EBIT
fixed interest
charges(10.45%)
interest coverage
ratio

Chart 2.3.5

2012

2011

2010

2009

15568.28

--28968.8

18094.56

27750.3

20000

20000

20000

20000

0.77

-1.44

0.90

1.38

interestcoverage ratio
2
1.5
1
0.5

interestcoverage ratio

0
-0.5

2012

2011

2010

2009

-1
-1.5
-2

The above chart shows that in NINL, Interest coverage ratio negetive in year 2011 as
compared to year 2009-10 & 2012. In year 2012 Interest coverage ratio is covered some
extent of loss which is made in the year 2011.

4.1 General profitability ratio

4.1.1Gross profit ratio
Gross profit
Gross profit ratio= Net sale

100

Table 2.4.1.1
Years
Gross profit
Net sale
Gross profit
ratio
Chart2. 4.1.1

2012

2011

2010

2009

43036.73

29200.49

42550.01

56255.96

193121.66

157760.65

152122.67

131634.66

22.28

22.71

27.97

42.73

Gross profit ratio

45
40
35
30
Gross profit ratio

25
20
15
10
5
0
2012

2011

2010

2009

The above chart shows that in NINL, gross profit ratio is decreased in year 2012
as compared to year 2009-10. But in year 2012 gross profit ratio is
approximately same as compared to year 2011 not greater than in the year 2009.

4.1.2 Net profit ratio:-

Net profit ratio=

Net profit ( EAT )

Net sales

100

Table 2.4.1.2
Years
Net profit(EAT)
Net sales
net profit ratio

Chart 2.4.1.2

2012

2011

2010

2009

2944.5

-173.14

3793.47

7923.04

193121.66

157760.65

152122.67

131634.66

1.524

-10.97

2.49

6.018

Net profit ratio

8
6
4
2
Net profit ratio

0
-2

2012

2011

2010

2009

-4
-6
-8
-10
-12

The above chart shows that in COCA COLA , net profit ratios negative in year
2011. In year 2009 sound well as compared to year 2010 & 2012.

4.1.3 Operating profit ratio

Operating profit ratio =

OPerating profit ( EBIT )

Net sales

100

Table 2.4.1.3
Years
Operating profit
(EBIT)
Net sale
operating profit
ratio
Chart2.4.1.3

2012

2011

2010

2009

10468.58

-6788.4

152122.67

22192.00

193121.66

157760.65

17054.18

131634.66

5.42

-4.3

11.21

16.85

operating profit ratio

20
15
10

operating profit ratio

5
0
2012

2011

2010

2009

-5
-10

The above chart shows that in COCA COLA , 0perating profit ratio negative in year 2011 as
compared to other financial year. In year 2012 operating profit ratio is slightly decrease as
compared to year 2010-09.

4.1.4 Operating expenses ratio

Operating expenses ratio =

Operationg Cost
Net sales

100

Table 2.4.1.4
Years

2012

2011

2010

2009

operating cost

187924.24

165009.89

139692.07

116270.76

Net sales

193121.66

157760.65

152122.67

131634.66

97.30

104.59

91.82

88.32

operating
expenses ratio

Chart 2.4.1.4

operating profit ratio

110
105
100
operating profit ratio
95
90
85
80
2012

2011

2010

2009

The above chart shows that in COCA COLA , operating expenses ratio is in year 2011
increasing as compared to year 2009-10. In year 2012 net profit ratio is comparatively low as
in the year 2011

Expenses ratios
4.1.5.1

cost of goods sold ratio

Cost of goods sold

100
Cost of goods sold ratio =
Net sales

Table 2.4.1.5.1
Years

2012

2011

2010

2009

Cost of goods sold

150084.93

128560.16

109572.66

75378.70

Net sale

193121.66

157760.65

152122.67

131634.66

77.71

81.49

72.02

57.26

Cost of goods sold

ratio

Chart 2.4.1.5.1

Cost of goood sold ratio

90
80
70
60
Cost of goood sold ratio

50
40
30
20
10
0
2012

2011

2010

2009

The above chart shows that in COCA COLA Cost of goods sold ratio is in year 2012 slightly
decreasing as compared to year 2011. In year 2011 Cost of goods sold ratio is increasing as
compared to year 2010-09.

2.5Overall Profitability Ratio:2.5.1 Return on investment:Return on Investment =

Net profit (after taxinterest )

Shareholder ' s funds

Table 2.2.5.1
Years
Net Profit
Shareholders
Fund
Return on
investment(%)
Chat 2.2.5.1

2012

2011

2010

2009

2944.50

(17314)

3793.47

7923.04

99767.47

100008.73

83310.8

79804.3

2.95

(17.31)

4.55

9.92

Return on investment
15
10
5
Return on investment

0
-5

2012

2011

2010

2009

-10
-15
-20

The above chart shows that in COCA COLA, return on investment totally decreasing in year
2011 as compared to other year . In 2009 financial year figure was better than the other
financial year.

Return on Equity capital:Return on equity capital =

Net profit after tax preference Dividend

Equity share capital( paidup)

Table2. 2.5.2
Years

2012

2011

2010

2009

Net PAT

2944.50

(17313.93)

3793.47

7923.04

Preference Dividend

2135.72

2135.72

2135.72

2135.72

58129.41

47951.05

39979.41

39979.41

1.39

(31.65)

4.146

14.47

Equity share
capital(paid up)
Return on equity
capital

Chart2. 2.5.2

Return on equity capital

20
10
0
2012

2011

2010

2009

Return on equity capital

-10
-20
-30
-40

The above chart shows that in COCA COLA, return on equity capital is totally
decreasing in year 2010 as compared to other financial year. In year 2009 is
highest ratio than the other financial year.

 PROFIT& LOSS A/C AFTER YEAR ENDED OF

31ST MARCH (2009-12)
Particulars

2009

2011
2010

2012

INCOMES
Gross Sales
including Inter
Plant Transfer

135870.6
0

157995.9
1

161584.8
2

4235.94

5873.24

3824.17

131634.6
6

152122.6
7

157760.6
5

330.76

101.08

703.8

131965.
42

152223.
75

158464.
45

Raw materials
consumed

89084.82

92440.10

146668.5
8

Changes of
inventory of
finished goods
[+/(-)]

-20534.08

12508.98

-18549.25

714.31

-665.63

1919.32

3137.74

2796.50

3486.48

Power & Fuel

772.97

939.23

803.86

Repair and
maintenance

370.05

623.36

460.83

4679.36

5129.86

6690.14

35167.56

23401.61

24988.41

9325.53

9302.93

9310.00

Less:1) Excise duty

3)JPC cess
Net Sales
Other Income
Total Income

0 0

EXPENDITURE

Changes of excise
duty on stock of
finished goods
Stores& Spares
consumed

Employees
benefits expenses
Other expenses
Depreciation
expenses
Total
expenditure

122718. 146476.
26 94

175778.
37

Profit before tax

9247.16

2746.81

17313.9
2

(Less) Tax
deduction(Current
+ differed tax)

2861.69

3906.68

7923.04

3793.47

17313.9
2

Profit after tax

Comparative Statement from Balancesheet:Comparative study of financial statement is the comparison of the
financial statement of the business with the previous years financial statements
and with the performance of other competitive enterprises, so that weaknesses
may be identified and remedial measures applied.
Comparative statements can be prepared for both types of financial
statements i.e., Balance sheet as well as profit and loss account. The
comparative profits and loss account will present a review of operating
activities of the business. The comparative balance shows the effect of
operations on the assets and liabilities that change in the financial position
during the period under consideration.
Comparative analysis is the study of trend of the same items and computed
items into or more financial statements of the same business enterprise on
different dates.
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 trends of current changes affecting the enterprise.

Particulars

Non Current Asset(A)

31st
March
2012(In
lakhs)

31st March
2011(In
lakhs)

Changes
(In
Lakhs)

277,655.1

259,577.

180,78.

02

16

42,519.30

52,259.0

9,739.7

Current Assets (B)

Inventories
Sundry Debtors

1615.65

Cash and Bank Balance

Loans and Advances

8,855.15
5017.76

1,303.96
24,999.9
8
6901.12

4
311.69
16,144.
83
1,883.3
6

Total current Assets

(B+A)

335,663.0

345,041.

12

9,378.0
8

Shareholders Funds :
Share Capital

60,265.13

Reserves and Surplus

39,502.34

50,086.7

10,178.

36

31,853.3

7649

Total Shareholders

99,767.47

81,940.1

17,827.

36

175,388.8

169,945.

5,443.3

42

60,506.76

75,087.0

14,580.

Funds(A)
Non

current

liability

(B)
Current liability(C)

28
Total Liabilities
(A+B+C )

335,663.0

345,041.

12

9,378.0
8

Comparative Balance sheet of 31st March2012-11:-

Interpretation of balance sheet 31st March 2012-11

The comparative balance sheet of the company reveals during 2012,

that there has been a increase in the non-current assets of Rs.18,078.16 lakhs,
which indicates company purchased machineries for the org.
Inventories position is increased as compared to 2011 because it
creates somehow problems for future. Due to less cash balance in 2012 its non
current liability is increased of Rs5443.39 which is also not good.
The overall financial position of the company for the year (2012-2011) is
not satisfactory.

Comparative Balance sheet of 31st March2011-10:-

Particulars

Non Current Asset(A)

31st March
2010(In
Lakhs)

Changes

259,577.

230,724.

28,852.

02

09

93

52,259.0

24,348.4

27,910.

64

1,303.96

20,475.9

19171.9

31st
March
2011(In
Lakhs)

(In Lakhs)

Current Assets (B)

Inventories
Sundry Debtors
Cash and Bank Balance
Loans and Advances

24,999.9
8

1,260.51

6901.12

8,044.94

7
23739.4
7
1143.82

Total current Assets

(B+A)

345,041.

284853.8

60,187.

12

25

50,086.7

42,115.1

7971

31,853.3

41,195.6

81,940.1

83,310.8

1370.71

169,945.

179,362.

-9416.9

42

32

75,087.0

22,180.7

52,906.

31

345,041.

284853.8

60,187.

12

25

Shareholders Funds :
Share Capital
Reserves and Surplus

Total Shareholders
Funds(A)
Non

current

liability

(B)
Current liability(C)

Total Liabilities
(A+B+C )

9342.35

Interpretation of balance sheet 31st March 2011-10

The comparative balance sheet of the company reveals

during 2011, that there has been a increase in the non-current assets of
Rs.28,852 lakhs, which indicates company purchased machineries for phase-ii
Inventories position is increased as compared to 2010 of Rs27,910
lakhs which is not good sign for the company. Due to excess cash balance in
2011 is utilized for the repayment of loan, for meeting out current liabilities and
provision and also for making investment, also increased for continuing day to
day expenses.
The overall financial position of the company for the year (2011-2010) is
satisfactory.

Comparative Balance sheet of 31st March2010-09:-

Particulars

Non Current Asset(A)

31st March
2009(In
lakhs)

Changes

230,724.

216,021.

14702.3

09

17

24,348.4

44,360.2

20011.8

20,475.9

599.34

31st
March
2010(In
lakhs)

(In Lakhs)

Current Assets (B)

Inventories
Sundry Debtors
Cash and Bank Balance
Loans and Advances

3
1,260.51

2391.34
9314.63

8,044.94

5
19876.5
9
1130.83
1269.99

Total current Assets

(B+A)

284,853.

272,686.

12,167.

87

73

14

42,115.1

42,115.1

41,195.6

37,689.1

83,310.8

79,804.3

179,362.

173019.4

6342.8

32

22,180.7

19,862.9

2317.75

284853.

272,686.

12,167.

87

73

14

Shareholders Funds :
Share Capital
Reserves and Surplus

Total Shareholders
Funds(A)
Noncurrent

liability

(B)
Current liability(C)

Total Liabilities
(A+B+C )

3506.52

3506.52

Interpretation of balance sheet 31st March 2010-09

The comparative balance sheet of the company reveals during 2010,

that there has been a increase in the non-current assets of Rs. 14702.39lakhs,
which indicates company purchased machineries for phase-ii
Inventories position is increased as compared to 2010 of Rs-20011.85
Lakhs which is not good sign for the company. Due to excess cash balance in
2010 is utilized for the repayment of loan, for meeting out current liabilities and
provision and also for making investment, also increased for continuing day to
day expenses.

The overall financial position of the company for the year (2010-2009) is
satisfactory.

 FINDINGS OF THE STUDY:1) The current ratio is gradually decreasing from the financial year 2009
,which is not good for the profit point of view . Because the firm shall not
able to pay the current liabilities in time.
2) The liquid ratio is decreasing year after year. Though the ratio is above 1
in all thefour years, it is preferable to improve upon the situation. This
may be due to the fact that the stock is major composition of current
assets, which excludes liquid assets. The firm should try to clear the
stocks.
3) The inventory turnover ratio from the four years indicated a good
inventory policy and efficiency of business operations of the company.

4) The working capital turnover ratio has been increasing during the four
years, which indicates that there is lowest investment of the working
capital and more profit. More profit is in the sense that there is higher
ratio.
5) The proprietary ratio in all the four years is not above the satisfactory
level, that is, 50%. It indicates the creditors are facing some credit
problems for them.
6) The debt to equity ratio is decreasing year after year, which indicates, the
servicing of debt is less burden and consequently its credit standing is not
adversely affected. But it maintaining its standards as like 1:1.
7) The Net Profit for the four years has been ups & down which shows that
the selling and distribution expenses arent works properly.
8) Comparative balance sheet proves that the financial performance for each
financial year is not as much satisfactory as compared with its previous
year during the period of 2009-2012.

SUGGESTION & RECOMMENDATION:7.1 SUGGESTION AND RECOMMENDATION

1. The liquidity position of the company can be utilized in a better or other
effective purpose.
2. The company should use increase the inventory turn over ratio to increase
profitability.
3. The company can increase its sources of funds to make effective research
and development system for more profits in the years to come.
4. Finally most important thing is to must avoid repeatedness of loss.

 CONCLUSION:The study is made on the topic financial performance using ratio

analysis with five years data in COCA COLA.
The current and liquid ratio indicates the short term financial position
of COCA COLA whereas debt equity and proprietary ratios shows the long term
financial position.
Similarly, activity ratios and profitability ratios are helpful in evaluating
the efficiency of performance in COCA COLA
The financial performance of the company for the five years is analyzed
and it is proved that the company is financially sound.

BIBLOGRAPHY

BOOKS:M.Y. Khan and P K Jain Financial Management

Shasi k Gupta, R.K. Sharma Management Accounting Kalyani
Publisher
S.M. Maheswari Management Accounting, Sultan Chand & Sons
Educational Publishers, New Delhi.

WEBSITES:-

www.COCA COLA .in

www.google.co.in