A Study On Financial Performance in ICM Private Limited

1
A STUDY ON FINANCIAL PERFOMANCE IN ICM

PRIVATE LIMITED COIMBATORE
PROJECT REPORT
Submitted by
K.SANGEETHA
Reg no:108001611042
In partial fulfillment for the award of the degree
of
MASTER OF BUSINESS ADMINISTRATION

IN
DEPARTMENT OF MANAGEMENT STUDIES

PAAVAI COLLEGE OF ENGINNERING
PACHAL, NAMAKKAL-637 018
JUNE 2012
BONAFIDE CERTIFICATE
PAAVAI COLLEGE OF ENGINEERING

DEPARTMENT OF MANAGEMENT STUDIES
PROJECT WORK
JUNE 2012
This is to certify that the project entitled
A STUDY ON FINANCIAL PERFORMANCE IN ICM PRIVATE LIMITED COIMBATORE
is the bonafide record of project work done by K.SANGEETHA 108001611042 of MBA during
the year 2011-2012.
------------------------Project Guide
--------------------HOD
Submitted on project work Viva-Voce examination held on
----------------------------Internal Examiner
-----------------------External Examiner
DECLARATION
I affirm that project work titled A STUDY ON FINANCIAL PERFORMANCE
PRIVATE LIMITED COIMBATORE being submitted in partial fulfillment for the award of
Master of Business Administration (MBA) is the original work carried out by me. It has not
formed the part of any other project work submitted for award of any degree or diploma, either in
this or any other University.
Signature of the student
K.SANGEETHA,
Reg.no.108001611042.
I certify that the declaration made above by the candidate is true
Signature of the Guide.
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ACKNOWLEDGEMENT
First I thank the ALMIGHTY GOD for having showered his earnest blessing on me
to complete this work successful.
I would like to express my gratitude to Shri. CA. N.V. Natarajan. Chairman, B.Com.
F.C.A., and Smt. N. Mangaiarkarsi., M.Sc., Correspondent, Paavai Institutions., Pachal,
Namakkal, for giving me an opportunity and facility to complete this project.
I wish to place my deep sense of gratitude to Prof.K.K.Ramasamy, M.E, (Ph.D),
Director Administration, Paavai Institutions, pachal, Namakkal, for all the encouragement
received during the MBA course.
I would like to express my gratitude to Dr. V. Murali Baskaran, M.E., Ph.D., Principal,
Paavai College of Engineering
I would like to place my boundless thanks and gratitude towards my faculty guide
Mr.M.Gurusamy., MBA, M.Phil., (Ph.D).,Head of the department of MBA, Paavai College of
Engineering for his guidance and help to do my project successfully. I also express thanks to all
the other faculty members of the department.
I express my sincere thanks to Mr.K.Nirmal Kumar., Finance Manager for his
valuable guidance to undertake this project work in the esteemed organization.
K.SANGEETHA
8
ABSTRACT
The present study of the research entitled A Study on Financial Performance" was
conducted at Intelligence Credit Management, Coimbatore. The details regarding the history
and accounting policies of the company was collected through discussion with the company
officials. The study was based on secondary data from records, reports and profile of the
organization. The present study has been organized into five chapters. The first chapter deals
with the introduction about the project title Financial performance and profile of the company.
The second chapter deals with the need, objectives and limitations of the study. The main
objectives of the study is to make an analysis on the financial performance of the company for 5
financial Years, to calculate profitability turnover & financial ratios to assess the financial
position of the firm, to study the efficiency and liquidity position using ratios, to study the trend
of financial performance of the company, to asses individual financial segments and put forth the
strength and weakness of the financial elements of balance sheet through trend analysis.
The third chapter deals with research design, data collection and period of study. The data
for 5 financial years i.e., from 2006 2007 to 2010 2011, were collected and used in the
present study.
The fourth chapter deals with the Analysis and Interpretation. The tools used in this study
are ratio analysis, trend percentages of income statements and Balance sheet, common size
income statement & balance sheet and comparative income statement & balance sheet. Charts
and tables are used for better understanding. Through ratio analysis the company could
understand the Profitability, Liquidity, Leverage, Turnover positions of the company. Through
trend percentage of income statement & balance sheet, the company can visualize their trend of
growth. The comparative income statement & balance sheet reveals the comparison between the
various year periods.
The fifth chapter deals with results, suggestions for the improvement of the company and
conclusion. Findings of the study shows that the profitability position is good as the Net profit
ratio, return on equity, operating profit ratio have an increasing trend during the period of study.
The Turnover position was better as the Debt equity ratio, Fixed & Total asset turn over ratios
show an increasing trend during the period of study, the collection period was also within the
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efficiency level. The liquidity position was good during the period of study. The Leverage
position was not so poor during the period of study. The suggestion is that, the management may
take proper decisions to maintain their absolute liquid ratio, so that they can maintain their
liquidity position in the long run., The liquidity position could be strengthened by reducing the
current liabilities., The management may try to increase the EPS by increasing the profitability of
the company., The cash balance level of the company when compared to current liabilities is
lower. The management may improve the cash balance to an optimum level to meet the
contingencies. This study will be useful for owners, creditors, suppliers, customers, Department
managers and others to get insight about financial soundness.
The study has revealed that the financial performance of Intelligence Credit
Management, Coimbatore is good.
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CHAPTER 1
INTRODUCTION
1.1 INTRODUCTION AND DESIGN OF THE STUDY
Finance holds the key to all human activity. It is guide for regulating investment
decisions and expenditure and endeavors to squeeze the most out of every available rupee. The
government too, treats it as a signpost, a beckon to responsibility that covers men, money,
material, methods and management. Out of these finance is a resource and it has to be managed
efficiently for the successful functioning of an enterprise. Financial management is that
managerial activity which is concerned with the planning and controlling of the firms financial
resources.
1.1.1
Financial Performance Analysis.
The financial statement provides the basic data for financial performance analysis.
Basic limitation of the traditional financial statement comprising the balance sheet
and the profit and loss account is that they do not give all the information regarding the financial
operations of a firm. Nevertheless, they provide some useful information to the extent the
balance sheet mirrors the financial position on a particular date in terms of the structure of assets,
liabilities and owners equity, and so on. The profit and loss account shows the results of
operations during a certain period of time in terms of the revenues obtained and the incurred
during the year. Thus, the financial statements provide a summarized view of the financial
position and operations of a firm. Therefore, much can be learnt about a firm from a careful
examination of its financial statements as invaluable documents / performance reports. The
analysis of financial statements is, thus, an important aid to financial analysis.
The focus of financial analysis is on key figures in the financial statements and
the significant relationship that exists between them. The analysis of financial statements is a
process of evaluating relationship between component parts of financial statements to obtain a
11
better understanding of the firms position and performance. The first task of financial analyst is
to select the information relevant to the decision under consideration from the total information
contained in the financial statement. The second step involved in financial analysis is to arrange
the information in a way to highlight significant relationships. The final step is interpretation and
drawing of inferences and conclusions. In brief, financial analysis is the process of selection,
relation, and evaluation.
1.1.2. Tools of Financial Analysis
A financial analyst can adopt the following tools for analysis of the financial
statement. These are also termed as methods of financial analysis.
1.1.2.1. Ratio analysis
Ratio analysis is a widely used tool of financial analysis. It is defined as the

systematic use of ratios to interpret the financial statements so that the strengths and weakness of
a firm as well as its historical performance and current financial condition can be determined.
The term ratio refers to the numerical or quantitative relationship between two items/ variables.
This relationship can be expressed as: (i) percentages (ii) Fractions (iii) Proportion of numbers.
Computing of ratios does not add any information not already inherent in the financial statement.
The ratios reveal that relationship in a more meaningful way so as to enable us to draw
conclusions from them. The rationale of ratio analysis lies in the fact that it makes related
information comparable. A single figure by itself has no meaning but when expressed in terms of
a related figure, it yields significant interfaces. The ratio analysis, as a quantitative tool, answers
to questions such as: are the net profits adequate? Are the assets being used efficiently? Is the
firm Solvent? Can the firm meet its current obligations? And so on.
It is also defined as an expression of the quantitative relationship between two

numbers. (Wixion, Kell, Bedford 1970).
12
1.1.2.2
Significance of Ratio Analysis
Ratio analysis determines the following

1. The ability of the Firm to meet its current obligations.
2. The extent to which the firm has used its current obligations.
3. The efficiency with which the firm is utilizing its various assets in generating
sales revenue.
4. The overall operating efficiency and performance of the firm.
1.1.2.3 Limitations of Ratio Analysis
1. It is difficult to decide on the proper basis for comparison.

2. The comparison is rendered difficult because of differences in situations of two
companies or of one company over years.
3. The price level changes make the interpretations of ratios invalid.
4. The differences in the definitions of items in the balance sheet and income
statement make the interpretation of ratios difficult.
5. The ratios calculated at a point of time are less informative and defective as they
suffer from short-term changes.
1.1.2.4 Uses
These can be useful indicators of measures to appraise the financial health of an
organization and its profitability, financial stability (long term and short term), financial
management and overall efficiency of the business. The inherent strength underlying the ratio
analysis is the fact that absolute figures are meaningless and sometimes misleading and therefore
for the purpose of any comparison all absolute data should data should be converted into ratios
representing meaningful relationship.
1.1.3
Profitability Ratios
Profitability reflects the final of result of business operations.
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1.1.4 Turn over Ratios
Turn over ratios, also referred to as activity ratios or asset management ratios,
measure how efficiency the assets are employed by the firm.
1.1.5 Liquidity ratios
Liquidity refers to the ability of a firm to meet its obligations in the short run,
usually one year. Liquidity ratios are generally based on the relationship between current assets
and current liabilities. The important liquidity ratios are Current ratio, acid-test ratio
1.1.6 Leverage Ratios
Financial leverage refers to the use of debt finance. While debt capital is a
cheaper source of finance, it is also a riskier source of finance. Leverage ratios help in assessing
the risk arising from the use of debt capital.
1.1.7 Comparative Financial Statements
Comparative financial statements are these 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 facilitate comparison. Both the income statement and balance sheets can be
prepared in the form of comparative financial statement
1.1.8 Comparative Income Statements
The income statement discloses net profit and net loss on account of operations. A
comparative Income Statements 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.
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1.1.9 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.
1.1.10 Common Size Financial Statements
Common size financial statements are those in which figures reported are
converted into percentages to some common base. In the income statement the sale figure is
assumed to be low and all figures are expressed as a percentage of sales. Similarly in the balance
sheet the total of assets or liabilities is taken as 100 and all the figures are expressed as
percentages of this total.
1.1.11 Trend Percentages
Trend percentages are immensely helpful in making a comparative study of the

financial statements for several years. The method of calculating trend percentages involves the
calculation of percentage relationship that each item bears to the same item in the base year.
1.1.12 Types of Financial Statement

The term financial statements generally refer to two basic statements:
1. The income statement & 2. The balance sheet. Business men also prepare 3. A
statement of retained earnings, and 4. A statement of changes in financial position, in addition
to the above two statements.
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1.1.12.1 Income Statement
The income statement is generally considered to be the most useful of all financial
statements. It explains what has happened to a business as a result of operations between two
balance sheet dates. For this purpose, it matches the revenues and cost incurred in the process of
earning revenues and shows the net profit earned or loss suffered during a particular period.
1.1.12.2 Balance Sheet
It is a statement of financial position of a business at a specified moment of time.

It represents all assets owned by the business at a particular moment of time and claims or
equities of the owners and outsiders against those assets at that time. It is in a way snapshot of
the financial condition of the business at that time. The important distinction between an income
statement and a balance sheet is that income statement is for a period while balance sheet is on a
particular date.
1.1.12.3 Statement of Retained Earnings
The term retained earnings means the accumulated excess of earning over losses
and dividends. The balance shown by the income statement is transferred to the balance sheet
through this statement, after making necessary appropriations. It is thus a connecting link
between the income statement and the balance sheet. It is fundamentally display of things that
have caused the beginning of the period retained earnings balance to be charged into the one
shown in the end of the period balance sheet.
1.1.12.4 Statement of Changes in Financial Position
The balance sheet shows the financial condition of the business at a particular time while
the income statement discloses the result of operations at a particular time while the income
statement discloses the result of operations of the business over a period of time. However for
the better understanding of the affairs of the business it is essential to identify the movement of
16
working capital or cash in and out of the business. This information is available in the statement
of changes in financial position of the business. The statement may emphasize any of following
aspects relating to changes in financial position of the business.
1. Change in firms working capital.
2. Change in firms cash position.
3. Change in the firms total financial position.
1.1.13 Nature of Financial Statements
According to the American Institute of Certified Public Accountancy Financial

Statements reflect a combination of recorded in the financial are not depicted in the financial
statements, however material they might be, for example, fixed assets are shown at cost
irrespective of their market or replacement price since such price is not recorded in the books.
1.1.13.1 Accounting Conventions
Accounting conventions imply certain fundamental principles which have been sanctified
by long usage. For example, an account of the convention of conservatism provision is made for
expected losses but expected profits are ignored.
1.1.13.2 Personal Judgments
Personal judgments have also had an important bearing on the financial statement. For
example, the choice of selecting methods of depreciation lies on the accountant. Similarly, the
mode of amortization of fictitious assets also depends on the personal judgments of the
accountant.
1.1.13.3 Ignore Substance
Financial statements in India are prepared and presented in the form prescribed by law.
As a result many substantial facts go unrecorded.
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1.1.13.4 Over Generalization
A financial statement presents data in a generalized form and not as required of a specific
user, viz shareholders, employees, government, potential investors, lenders, etc... Hence they
cannot meet the specific data requirements of the users. They are only general purpose
statements.
1.1.14 Limitations of Financial Statement
Financial statements are prepared with the object of presenting a periodical review or
report on the progress by the management and deal with the 1) status of the investments in the
business and 2) results achieved during the period under the review. However these objectives
are subject to certain limitations as given below
1.1.14.1 Financial Statements are Generally Interim Reports

The profit shown by profit and loss account and financial position as depicted by the
balance sheet is not exact. The exact position can be known only when the business is closed
down.
1.1.14.2 Accounting Concepts and Conventions
Finical statements are prepared on the basis of some accounting conceptions and
conventions. On account of this reasons the financial positions as disclosed by these statements
may not be realistic. For example, fixed assets in the balance sheet are shown on the basis of
going concern concept. This means that value placed on fixed assets may not be the same as may
be realized in their scale. On account of conservation the income statement may not disclose true
income of the business since probable losses are considered while probable incomes are ignored.
1.1.14.3 Influence on Personal Judgment
Many items are left to the personal judgment of the accountant. For example the method
of amortization of fixed assets, treatment of differed revenue expenditure all depend on the
personal judgment of the accountant.
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1.1.14.4 Disclose only Monetary Facts
Financial statement does not depict those facts which cannot be expressed in the terms of
money. For example, development of a term of loyal and efficient workers enlightened
management, the reputation and prestige of management with the public are matters which are of
considerable importance for the business, but they are now here depicted by the financial
statements.
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1.2 INTRODUCTION TO COMPANY
1.2.1 Company profile
We would like to introduce ourselves as M/s Intelligence Credit Management, a wellknown organization established in the year 2008 based out in Coimbatore, Tamil Nadu and
having experience of around 2 years in the area of Collections & Verification.
Aim
Our
aim
is
to
provide
Quality
service
to
the
client
in
timely
manner.
To consistently provide world class service to our clients to enable them to leverage their profit
by means of outsourcing their services.
Corporate Office
The Intelligence Credit Management is functioning in a modern office at No.106-86, 3rd
floor, Big Bell Complex, D.B. Road, R.S. Puram, Coimbatore - 641002. Phone : +91-4224368858, 3231319, Email : icm1308@gmail.com, icmtamilnadu@gmail.com .
Experience
1. SBI CARDS: We have done service with this company for 1 year. We handled X-bucket and
Bucket-1.
2. GE Money Financial Services Ltd. : We have done service with this company for 2 years. We
handled X-bucket, Mid-buckets and recoveries.
3. Cholamandalam DBS: We have done service with this company for 1 year. We handled only
recoveries.
4. AIRCEL Cellular Ltd. : We have done service with this company for 1 year. We handled
Verifications for pre-paid connections.
5. TATA MOTORS FINANCE LIMITED: We are associated with this company for 2 years
currently. We are handling X-Bucket Collections For the Commercials, Cars all over Tamilnadu.
6. HDB Financial Services: We are associated with this company presently. We are handling
Collections of the Personal Loans.
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Infrastructure
We have a centralized call-center which links all the above locations from Coimbatore.
Latest technology based systems, phones, printers, scanners, fax etc. We have introduced the
SMS based alert systems to get more out of the services.
Personnel
We have very good staff who have got best experience in the field of collection and
Verification. Each team is followed by a Team Leader who is responsible for the performance of
his team and motivating them to achieve higher goals. All the Team Leaders have been provided
with mobile phones to facilitate easier communication round the clock with office and clients. In
addition to that, we have the SMS alert system for communication purpose. The present staff can
be enhanced when the circumstances demands.
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Past Performance
The company is on its fast track of growth and the past performance details are given
below:
(Amount in lakhs)
Details/
Year
Sales
31.03.06
31.03.07
31.03.08
31.03.09
31.03.010
31.03.11
3566.23
4436.56
5621.56
5589.79
6420.36
6840.42
5.86
39.24
302.93
148.72
312.30
3503.21
230.00
370.00
400.00
400.00
475.00
475.00
567.11
574.64
720.19
767.48
759.58
866.70
797.11
944.64
1120.19
1167.48
1389.43
1341.71
Profit
before
tax
Share
Capital
Reserves
& surplus
Net
Worth
22
Past Performance
23
1.3 NEED, OBJECTIVES, SCOPE AND LIMITATIONS OF THE STUDY
1.3.1 NEED FOR THE STUDY

The need for the study is as follows:
1. The study aim at assessing profitability and solvency position of the company.
2. The liquidity and activity positions of the firm are analyzed using liquidity and turnover
ratios involving current liabilities.
3. The solvency position of the company is also analyzed using ratios.
1.3.2 OBJECTIVES OF THE STUDY
1. To make an analysis on the financial performance of M/S Intelligence Credit

Management for 5 financial Years extending from 2005- 2006 to 2009- 2010.
2.
To calculate profitability turnover & financial ratio to assess the financial position of the
firm.
3. To study the efficiency and liquidity position using ratios.

4. To study the trend of financial performance of the company
5. To asses individual financial segments and put forth the strength and weakness of the
financial elements of balance sheet through trend analysis.
1.3.3 SCOPE FOR THE STUDY:

The following are the scope that this project possesses its main value by the following
necessities;
1. The scope of this study is to compare the budget estimate, with the actual.
2. The study helps to know the budgetary control at Coimbatore.
3. To cover commercial & Non-commercial or political risks attendant on granting credit to a
foreign buyer.
4. To cover natural risks like an earthquake, floods etc.
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5. Availability of the funds at the required time to the exporter is to be analyzed.
6. It is purely based on the Affordability of the cost of funds.
1.3.4 LIMITATIONS OF THE STUDY
1. The study is based on the data obtained from the annual reports of the concern i.e.
balance sheet.
2. The period under study has been only for 5 financial years i.e. 2005 - 2006 to 2009 2010.
3. The study doesnt take into account the other areas such as dividend policy, capital
budgeting etc.
25
RESEARCH METHODOLOGY
1.1 RESEARCH DESIGN
The collected data were presented in tables and these tables were analyzed
systematically. Ratio analysis, the vital financial tool was used to study the financial
performance of Intelligence Credit Management. A chart and various diagrams are used to
explain the analysis clearly. It is an undisputed truth that graphs and diagrams render any
complicated discussion and any intricate subject, very simple to any casual reader of the thesis.
Common size financial statement is a tool to assess, in which figures reported are
converted into percentages to some common base. Trend percentages are also taken as a tool
which is immensely helpful in making a comparative study of the financial statement for several
years. The method of calculating trend percentages involves the calculation of percentage
relationship that each item bears to the same item in the base year.
1.2 DATA COLLECTION
The study is based on secondary source of data. Secondary data have been mainly
obtained from annual reports, records and books of Intelligence Credit Management.
The secondary data were also collected from audited financial statements periodicals and other
records maintained by Intelligence Credit Management.
1.3 PERIOD OF STUDY
Data of 5 financial years are used for the purpose of study. The 5 years of study
ranges from 2005- 2006 to 2009 - 2010.
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CHAPTER 2
ANALYSIS AND INTERPRETATIONS
2.1 PROFITABILITY RATIO

2.1.1 Gross Profit Margin Ratio
Table 2.1.1.1
Gross Profit Ratio = (Gross profit / Net sales) x 100
Year
2006 - 2007
2007 - 2008
2008 - 2009
2009 - 2010
2010 - 2011
Gross Profit
15,524,000
42,814,000
26,844,000
41,968,000
46,919,000
Net Sales
443,655,702
562,156,209
558,979,157
642,036,128
684,042,985
Ratio %
3.50
7.62
4.80
6.54
6.86
INTERPRETATION
The table reveals Gross Profit Ratio showing slightly increasing trend, it was low in the
period 2006 - 2007 with 3.50% and raised during the period 2007 - 2008 to 7.62% then a sudden
decrease in the next year to 4.80% and from that it started raising to 6.86% in the period 2010 2011.
27
Chart 2.1.1.1
Gross Profit Margin Ratio
28
2.1.2 Net Profit Margin Ratio
Net Profit Ratio = (Net Profit after Tax / Net Sales) x 100
Table 2.1.2.1
Year
Net Profit After

Tax
Net Sales
Ratio %
2006 - 2007
2,483,226
443,655,702
0.56
2007 - 2008
27,793,429
562,156,209
4.94
2008 - 2009
13,372,347
558,979,157
2.39
2009 - 2010
26,629,773
642,036,128
4.15
2010 - 2011
22,321,948
684,042,985
3.26
INTERPRETATION
The ratio was highest in the period 2006 - 2007 and lowest in the period 2005 - 2006. It
shows a fluctuating trend.
29
2.1.3 Operating Profit Margin Ratio
Operating Profit Ratio = (Operating Profit / Net Sales) x 100
Table 2.1.3.1
Year
Operating Profit
Net Sales
Ratio %
2006 2007
24,963,264
443,655,702
5.63
2007 - 2008
33,518,306
562,156,209
5.96
2008 - 2009
35,247,359
558,979,157
6.31
2009 - 2010
60,449,540
642,036,128
9.42
2010 - 2011
65,282,800
684,042,985
9.54
INTERPRETATION
Higher operating profit ratio shows better operating efficiency. The ratio was high in
period 2009 - 2010. Therefore the operating efficiency is better in periods 2008 - 2009 & 2009 2010.
30
Chart 2.1.3.1
Operating Profit Margin Ratio
31
2.1.4 Return on Capital Employed
Return on Capital Employed = (Operating Profit / Capital Employed) x 100

Table 2.1.4.1
Year
Operating Profit
Capital Employed
Ratio %
2006 - 2007
24,963,264
251,868,614
9.91
2007 - 2008
33,518,306
325,379,860
10.30
2008 - 2009
35,247,359
295,678,264
11.92
2010- 2011
60,449,540
290,317,852
20.82
2011 - 2012
65,282,800
299,028,910
21.83
INTERPRETATION
The return on capital employed was low in the period 2005 - 2006 and highest in the
period 2009 - 2010. It shows the increasing trend so it is good for the company.
32
Chart 2.1.4.1
Return on Capital Employed
33
2.1.5 Return on Equity

Return on Equity= (Equity Earnings / Net Worth) x 100
Table 2.1.5.1
Year
Equity Earnings
Net Worth
Ratio %
2006 - 2007
3,924,130
94,464,264
4.15
2007 - 2008
30,293,429
112,019,306
27.04
2007 - 2009
14,872,347
116,748,359
12.74
2009 - 2010
31,229,773
138,943,355
22.48
2010 - 2011
35,032,105
134,170,505
26.11
INTERPRETATION
The ratio was low in the period 2005 - 2006 and high in the period 2006 - 2007 and 2009
- 2010. Though there was a decline in the period 2007 - 2008 to 12.74% it shows the increasing
trend in the succeeding periods.
34
Chart 2.1.5.1
Return on Equity
35
2.1.6 Earning Per Share

Earnings Per Share = (Net Profit Preference Dividend / No. of equity Shares)
Table 2.1.6.1
Year
Profit After Tax
2006 2007
3,924,130
No. of equity
Shares
37,000,000
2007 - 2008
30,293,429
40,000,000
0.76
2008 - 2009
14,872,347
40,000,000
0.37
2009 - 2010
31,229,773
47,500,000
0.66
2010 - 2011
35,032,105
47,500,000
0.74
Ratio (Rs.)
0.11
INTERPRETATION
The Earnings per Share helps in determining the market price of the Equity shares of the
company. Initially the EPS was low (Rs. 0.11) in the period 2005 - 2006 and high in the period
2006 - 2007 & 2009 - 2010. There was a decline in the period 2007 - 2008 to Rs. 0.37 and started
increasing in the succeeding periods.
36
Chart 2.1.6.1
Earning Per Share
50000000
45000000
40000000
35000000
30000000
profitaftertax
25000000
no.ofequityshares
20000000
ratio(Rs)
15000000
10000000
5000000
0
20062007 20072008 20082009 20092010 20102011
37
2.2 TURN OVER RATIO

2.2.1 Debtors turnover Ratio
Debtors turnover Ratio = (Total Sales / Debtors)

Table 2.2.1.1
Year
Total Sales
Debtors
Ratio (in times)
2006 2007
443,655,702
93,213,080
4.76
2007 - 2008
562,156,209
123,053,398
4.57
2008 - 2009
558,979,157
126,619,031
4.41
2009 - 2010
642,036,128
111,904,860
5.74
2010 - 2011
684,042,985
124,894,006
5.48
INTERPRETATION
The Debtors turnover ratio shows a fluctuating trend. The ratio was low in the period
2007 - 2008 and high in the year 2008 - 2009. Though it is fluctuating it show a consistent
position.
38
Chart 2.2.1.1
Debtors Turnover Ratio
39
2.2.2 Debt Collection Period

Debt Collection Period = [ (Months/ Days in a Year) / Debtors Turnover]
Table 2.2.2.1
Year
Days in a Year
Debtors Turnover
(in times)
Debt Collection
Period (in days)
2006 - 2007
360
4.76
75.63
2007 - 2008
360
4.57
78.77
2008 - 2009
360
4.41
81.63
2009 - 2010
360
5.74
62.72
2010 - 2011
360
5.48
65.69
INTERPRETATION
A shorter collection period implies prompt payment by debtors. The collection period
was high in the period 2007 - 2008 (81.63 days) and low in the period 2008- 2009 (62.72 days).
40
Chart 2.2.2.1
Debt Collection Period
41
2.2.3 Fixed Asset Turnover Ratio

Fixed Asset Turnover Ratio = (Net Sales / Fixed Assets)
Table 2.2.3.1
Year
Net Sales
Fixed Assets
Ratio
2006 - 2007
443,655,702
147,770,694
3.00
20067- 2008
562,156,209
139,052,943
4.04
2008- 2009
558,979,157
132,523,352
4.22
2009- 2010
642,036,128
128,771,175
4.99
2010 - 2011
684,042,985
144,989,602
4.72
INTERPRETATION
The Fixed Asset Turnover ratio shows an increasing trend. The ratio was low initially and
rose in succeeding periods to 4.99 in the period 2008 - 2009 and it slightly decreased to 4.72 in
the period 2009 - 2010.
42
Chart 2.2.3.1
Fixed asset turnover ratio
43
2.2.4 Total Assets Turnover Ratio
Total Assets Turnover Ratio = ( Net Sales / Total Assets)
Table 2.2.4.1
Year
Net Sales
Total Assets
Ratio
2006 2007
443,655,702
251,868,614
1.76
2007 - 2008
562,156,209
325,379,860
1.73
2008 - 2009
558,979,157
295,678,264
1.89
2009 - 2010
642,036,128
290,317,852
2.21
2010 - 2011
684,042,985
299,028,910
2.29
INTERPRETATION
The ratio was low in the period 2005 - 2006 and high in the period 2009 - 2010. It shows
an increasing trend.
44
Chart 2.2.4.1
Total Assets Turnover Ratio
45
2.2.5 Inventory Turnover Ratio
Inventory Turnover Ratio = (Cost of Goods Sold / Average Inventory)

Table 2.2.5.1
Year
Cost of Goods Sold
Average Inventory
In times
2006 2007
240,246,671
58,290,635
4.12
2007 - 2008
305,918,359
77,811,639
3.93
2008 - 2009
305,609,655
88,734,863
3.44
2009 - 2010
353,912,960
90,990,585
3.89
2010 - 2011
362,439,330
101,639,924
3.57
INTERPRETATION
A high inventory turnover ratio may be caused by a low level of inventory which may
result in frequent stock outs and loss of sales. The ratio was high in the period 2005 - 2006 and
low in the period 2006 - 2007 & 2009 - 2010. It shows a decreasing trend.
46
Chart 2.2.5.1
Inventory Turnover Ratio
47
2.2.6 Stock Velocity

Stock Velocity = (Days in a Year / Inventory Turnover Ratio)
Table 2.2.6.1
Year
Days in a Year
Inventory
Turnover Ratio
(in times)
In days
2006 2007
360
4.12
87.38
2007 - 2008
360
3.93
91.60
2008 - 2009
360
3.44
104.65
2009 - 2010
360
3.89
92.54
2010 - 2011
360
3.57
100.84
INTERPRETATION
The inventory turnover ratio and the velocity period of the company remained stable
which is 3.44 times and 104.65 days. In 2005 - 2006 the velocity period was 87.38. Introduction
of proper stock control system like periodic stock taking would bring down the velocity period.
48
Chart 2.2.6.1
Stock Velocity
49
2.3 LIQUIDITY RATIO
2.3.1 Current Ratio
Current Ratio = (Current Assets / Current liabilities)
Table 2.3.1.1
Year
Current Assets
Current liabilities
Ratio
2006 2007
195,883,904
102,660,992
1.91
2007 - 2008
300,572,233
133,910,888
2.24
2008 - 2009
261,060,070
115,396,812
2.26
2009 - 2010
280,750,701
136,000,733
2.06
2010 - 2011
291,217,546
163,281,315
1.78
INTERPRETATION
This ratio indicates the extent to which short term creditors are safe in terms of liquidity
of the current assets. Thus, higher the value of the current ratio, more liquid the firm is and more
ability it has to pay the bills. However a current ratio of 2:1 is considered generally satisfactory.
As per the study the current ratio varies from 1.78 to 2.26. The current ratio was satisfactory
during 2006 - 2007, 2007 - 2008 and 2008 - 2009.
50
Chart 2.3.1.1
Liquidity Ratio: Current Ratio
51
2.3.2 Quick Ratio

Quick Ratio = (Quick Assets / Current liabilities)
Quick Assets = Current Assets - Inventory
Table 2.3.2.1
Year
Quick Assets
Current liabilities
Ratio
2006 2007
135,269,918
102,660,992
1.32
2007 - 2008
205,562,934
133,913,888
1.54
2008 - 2009
178,599,642
115,396,812
1.55
2009 - 2010
181,229,959
136,000,733
1.33
2010 - 2011
187,458,441
163,281,315
1.15
INTERPRETATION
The quick ratio of 1:1 is considered satisfactory. Though the quick ratio during the period
of study are above the satisfactory level, the period 2007 - 2008 having the ratio 1.55 times was
good to the company and it started decreasing in the succeeding years.
52
Chart 2.3.2.1
Quick Ratio
53
2.4 LEVERAGE RATIO

2.4.1 Debt Equity Ratio
Debt Equity Ratio = (Total Debt / Share Holders Fund)
Table 2.4.1.1
Year
Total Debt
Share Holders
Fund
Ratio
2006 2007
93,213,080
94,464,264
0.99
2007 - 2008
123,053,398
112,019,306
1.10
2008 - 2009
126,619,031
116,748,359
1.08
2009 - 2010
111,904,806
138,943,355
0.81
2010 - 2011
124,894,006
134,170,505
0.93
INTERPRETATION
The ratio indicates the proportion of owners stake in the business. Excessive liabilities
tend to cause insolvency. The ratio was high during the period 2006 - 2007 and low during the
period 2008 - 2009. The general norm for this ratio is 2:1.
54
Chart 2.4.1.1
Leverage Ratio: Debt Equity ratio
55
2.4.2 Debt Assets Ratio
Debt Assets Ratio = (Total Debt / Total Assets)
Table 2.4.2.1
Year
Total Debt
Total Assets
Ratio
2006 2007
157,404,350
251,868,614
0.62
2007 - 2008
213,360,554
325,379,860
0.66
2008 - 2009
178,929,905
295,678,264
0.61
2009 - 2010
151,374,497
290,317,852
0.52
2010 - 2011
145,762,978
299,028,910
0.49
INTERPRETATION
The ratio was high during the period 2006 - 2007 and low during the period 2009 - 2010.
It shows a decreasing trend.
56
Chart 2.4.2.1
Debt assets ratio
57
2.5 ANALYSIS OF COMMON SIZE BALANCE SHEET
2.5.1 Common Size Balance Sheet (2006, 2007)
Table 2.5.1.1
Particulars
Sources of Funds
Share Capital
Reserves & Surplus
Loan Funds
Secured Loans
Unsecured Loans
Total
Application of Funds
Fixed Assets
Investments
Current Assets, Loans
& Advances
Inventories
Sundry Debtors
Cash & Bank Balances
Deposits, Loans&
Advances
Total
Less: Current Liabilities
& Provisions
Current Liabilities
Provisions
Net Current Assets
Miscellaneous
Expenditure
Total
31.03.2006
Percentage
31.03.2007
Percentage
23,000,000
56,710,638
9.53
23.50
37,000,000
57,464,264
14.69
22.82
128,370,342
33,201,000
241,281,980
53.20
13.76
100.00
113,771,350
43,633,000
251,868,614
45.17
17.32
100.00
179,872,825
1,102,442
74.55
0.46
147,770,694
692,786
58.67
0.28
55,967,284
69,949,936
8,599,952
23.20
28.99
3.56
60,613,986
93,213,080
18,554,203
24.07
37.01
7.37
36,523,557
15.14
23,502,635
9.33
171,040,729
70.89
195,883,904
77.77
117,112,122
3,247,779
50,680,828
48.54
1.35
21.00
99,963,143
2,697,779
93,222,982
39.69
1.07
37.01
9,625,885
3.99
10,182,152
4.04
241,281,980
100.00
251,868,614
100.00
58
Chart 2.5.1.1
Analysis on common size balance sheet: Balance sheet 2006-07
59
Table 2.5.2.1
Particulars
31.03.2007
Percentage
31.03.2008
Percentage
Share Capital
37,000,000
14.69
40,000,000
12.29
Reserves & Surplus
57,464,264
22.82
72,019,306
22.13
Secured Loans
113,771,350
45.17
185,582,274
57.04
Unsecured Loans
43,633,000
17.32
27,778,280
8.54
Total
251,868,614
100.00
325,379,860
100.00
147,770,694
58.67
139,052,943
42.74
Sources of Funds
Share holders Fund
Loan Funds
Fixed Assets
Investments
Current Assets, Loans &
Advances
Inventories
692,786
0.28
685,222
0.21
60,613,986
24.07
95,009,299
29.20
Sundry Debtors
93,213,080
37.01
123,053,398
37.82

Deposits, Loans&
Advances
Total
Less: Current Liabilities &
Provisions
Current Liabilities
18,554,203
7.37
5,729,942
1.76
23,502,635
9.33
76,779,594
23.60
195,883,904
77.77
300,572,233
92.38
99,963,143
39.69
128,369,169
39.45
Provisions
2,697,779
1.07
5,541,719
1.70
Net Current Assets

Miscellaneous
Expenditure
Total
93,222,982
37.01
166,661,345
51.22
10,182,152
4.04
18,980,350
5.83
251,868,614
100.00
325,379,860
100.00
Chart 2.5.2.1
60
Common Size Balance Sheet (2007, 2008)
2.5.3
Common Size Balance Sheet (2008, 2009)
61
Table 2.5.3.1
Particulars
31.03.2008
Percentage
31.03.2009
Percentage
Share Capital
40,000,000
12.29
40,000,000
13.53
Reserves & Surplus
72,019,306
22.13
76,748,359
25.96
Secured Loans
185,582,274
57.04
150,171,725
50.79
Unsecured Loans
27,778,280
8.54
28,758,180
9.73
Total
325,379,860
100.00
295,678,264
100.00
139,052,943
42.74
132,523,352
44.82
Sources of Funds
Share holders Fund
Loan Funds
Fixed Assets
Investments
Current Assets, Loans
& Advances
Inventories
685,222
0.21
684,222
0.23
95,009,299
29.20
82,460,428
27.89
Sundry Debtors
123,053,398
37.82
126,619,031
42.82
5,729,942
1.76
6,589,816
2.23
76,779,594
23.60
45,390,795
15.35
300,572,233
92.38
261,060,070
88.29
128,369,169
39.45
108,751,813
36.78
5,541,719
1.70
6,644,999
2.25
166,661,345
51.22
145,663,258
49.26
18,980,350
5.83
16,807,432
5.68
325,379,860
100.00
295,678,264
100.00

Deposits, Loans&
Advances
Total
Less: Current Liabilities
& Provisions
Current Liabilities
Provisions
Net Current Assets
Miscellaneous
Expenditure
Total
62
Chart 2.5.3.1
Balance Sheet 2008-2009
63
Table 2.5.4.1
Particulars
Sources of Funds
Share holders Fund
Share Capital
Reserves & Surplus
Deferred Tax(net)
Loan Funds
Secured Loans
Unsecured Loans
Total
Application of
Funds
Fixed Assets
Investments
Current Assets,
Loans & Advances
Inventories
Sundry Debtors
Cash & Bank
Balances
Deposits, Loans&
Advances
Total
Less: Current
Liabilities &
Provisions
Current Liabilities
Provisions
Net Current Assets
Miscellaneous
Expenditure
Total
31.03.2008
Percentage
31.03.2009
Percentage
40,000,000
76,748,359
------------
13.53
25.96
----------
47,500,000
75,958,085
15,485,270
16.36
26.16
5.33
150,171,725
28,758,180
295,678,264
50.79
9.73
100.00
128,552,520
22,821,977
290,317,852
44.28
7.86
100.00
132,523,352
684,222
44.82
0.23
128,771,175
683,722
44.36
0.24
82,460,428
126,619,031
27.89
42.82
99,520,742
111,904,860
34.28
38.55
6,589,816
2.23
9,821,111
3.38
45,390,795
15.35
59,503,988
20.50
261,060,070
88.29
280,750,701
96.70
108,751,813
6,644,999
145,663,258
36.78
2.25
49.26
114,898,809
21,101,924
144,749,968
39.58
7.27
49.86
16,807,432
5.68
16,112,987
5.55
295,678,264
100.00
290,317,852
100.00
Chart 2.5.4.1
64
65
Table 2.5.5.1
Particulars
Sources of Funds
Share Capital
Reserves & Surplus
Deferred Tax(net)
Secured Loans
Unsecured Loans
Total
Application of Fund
Fixed Assets
Investments
Current Assets
Inventories
Sundry Debtors
Cash & Bank
Depo., Loans & Adva.
Total
Current Liabilities
Provisions
Net Current Assets
Misc. - Expenditure
Total
31.03.2009
Percentage
31.03.2010
Percentage
47,500,000
75,958,085
15,485,270
128,552,520
22,821,977
290,317,852
16.36
26.16
5.33
44.28
7.86
100.00
47,500,000
86,670,505
19,095,427
123,702,659
22,060,319
299,028,910
15.88
28.98
6.39
41.37
7.38
100.00
128,771,175
683,722
44.36
0.24
144,989,602
698,722
48.49
0.23
99,520,742
111,904,860
9,821,111
59,503,988
280,750,701
114,898,809
21,101,924
144,749,968
16,112,987
290,317,852
34.28
38.55
3.38
20.50
96.70
39.58
7.27
49.86
5.55
100.00
103,759,105
124,894,006
13,077,458
49,486,977
291,217,546
135,465,900
27,815,415
127,936,231
25,404,355
299,028,910
34.70
41.77
4.37
16.55
97.39
45.30
9.30
42.78
8.50
100.00
INTERPRETATION
Taking total source of funds as 100 reserves and surplus, both secured and unsecured
loans shows an increasing trend and slight decrease in the period 2008 - 2009. Taking total
application of funds as 100 the fixed assets shows a fluctuating trend varying from 58.67 during
the period 2005 - 2006 to 42.74 during the period 2006- 2007. the total current assets shows an
increasing trend during period of the study, it was low 77.77 during the period 2005 - 2006 and
high 97.39 during the period 2009 - 2010, though there was a slight decrease during the period
2007 - 2008. The current liabilities shows an fluctuating trend, it was high 54.6 during the period
2009 - 2010 and low 39.05 during the period 2007 - 2008. On netting the current assets and
current liabilities, net current assets shows a fluctuating trend, it was low 37.01 during the period
2005 - 2006 and high 51.22 during the period 2006 - 2007.
66
Chart 2.5.5.1
67
2.6 ANALYSIS OF COMMON SIZE INCOME STATEMENT
2.6.1 Common Size Income Statement (2005, 2006)
Table 2.6.1.1
Particulars
31.03.2005
Percentage
31.03.2006
Percentage
356,623,072
2,527,954
98.11
0.70
443,655,702
2,677,899
99.70
0.60
4,337,079
1.19
-1,342,571
-0.30
363,488,105
100.00
444,991,030
100.00
187,365,835
2,138,042
3,633,696
6,076,505
32,199,076
56,853,505
51.55
0.59
1.00
1.67
8.86
15.64
240,246,671
2,143,176
5,338,101
9,638,063
36,977,451
63,683,585
53.99
0.48
1.20
2.17
8.31
14.31
Interest, Finance & Bank

Charges
18,559,501
5.11
25,764,462
5.79
Selling & Distribution

Expenses
38,849,374
10.69
36,481,781
8.20
Other Expenses
Repair & Maintenance
Depreciation
Total Expenditure
Net Profit for the Year
Total
1,784,216
4,754,737
10,736,554
362,951,041
537,064
363,488,105
0.49
1.31
2.95
99.85
0.15
100.00
5,254,581
3,939,064
11,599,965
441,066,900
3,924,130
444,991,030
1.18
0.89
2.61
99.12
0.88
100.00
Income
Sales
Other Income
Increase/ Decrease in Stock of
Finished Goods & Stock in
Trade
Total Income
Expenditure
Raw Materials Consumed
Stores & Consumables
Power & Fuel
Trading Goods Consumed
Employee Cost
Administrative Expenses
68
Chart 2.6.1.1
Common Size Income Statement (2005, 2006)
69
Table 2.6.2.1
Particulars
Income
Sales
Other Income
Increase/ Decrease in
Stock of Finished Goods
& Stock in Trade
Total Income
Expenditure
Raw Materials
Consumed
Power & Fuel
Trading Goods
Consumed
Employee Cost
Excise Duty
Interest, Finance &
Bank Charges
Expenses
Other Expenses
Depreciation
Total Expenditure
Total
31.03.2006
Percentage
31.03.2007
Percentage
443,655,702
2,677,899
99.70
0.60
562,156,209
2,194,910
96.76
0.38
-1,342,571
-0.30
16,624,415
2.86
444,991,030
100.00
580,975,534
100.00
240,246,671
53.99
305,918,359
52.66
2,143,176
5,338,101
0.48
1.20
2,999,915
6,906,040
0.52
1.19
9,638,063
2.17
739,213
0.13
36,977,451
63,683,585
8.31
0.00
14.31
43,176,685
76,055,525
15,004,348
7.43
13.09
2.58
25,764,462
5.79
26,291,527
4.53
36,481,781
8.20
53,317,699
9.18
5,254,581
3,939,064
11,599,965
441,066,900
3,924,130
444,991,030
1.18
0.89
2.61
99.12
0.88
100.00
2,763,446
4,987,867
12,521,481
550,682,105
30,293,429
580,975,534
0.48
0.86
2.16
94.79
5.21
100.00
70
Chart 2.6.2.1
Income Statement (2006, 2007)
71

Table 2.6.3.1
Particulars
Income
Sales
Other Income
& Stock in Trade
Total Income
Expenditure
Raw Materials
Consumed
Power & Fuel
Trading Goods
Consumed
Employee Cost
Excise Duty
Interest, Finance &
Bank Charges
Expenses
Other Expenses
Depreciation
Total Expenditure
Total
31.03.2007
Percentage
31.03.2008
Percentage
562,156,209
2,194,910
96.76
0.38
558,979,157
1,766,026
100.12
0.32
16,624,415
2.86
-2,422,729
-0.43
580,975,534
100.00
558,322,454
100.00
305,918,359
52.66
305,609,655
54.74
2,999,915
6,906,040
0.52
1.19
2,877,773
5,770,990
0.52
1.03
739,213
0.13
172,412
0.03
43,176,685
76,055,525
15,004,348
7.43
13.09
2.58
46,667,402
70,179,471
14,507,346
8.36
12.57
2.60
26,291,527
4.53
25,245,113
4.52
53,317,699
9.18
51,493,793
9.22
2,763,446
4,987,867
12,521,481
550,682,105
30,293,429
580,975,534
0.48
0.86
2.16
94.79
5.21
100.00
4,977,782
3,976,867
11,971,503
543,450,107
14,872,347
558,322,454
0.89
0.71
2.14
97.34
2.66
100.00
72
Chart 2.6.3.1
73

Table 2.6.4.1
Particulars
Income
Sales
Other Income
& Stock in Trade
Total Income
Expenditure
Raw Materials Consumed
Power & Fuel
Trading Goods
Consumed
Employee Cost
Excise Duty
Charges
Expenses
Other Expenses
Depreciation
Total Expenditure
Total
31.03.2008
Percentage
31.03.2009
Percentage
558,979,157
1,766,026
100.12
0.32
568,970,924
2,888,479
97.46
0.49
-2,422,729
-0.43
11,962,376
2.05
558,322,454
100.00
583,821,779
100.00
305,609,655
2,877,773
5,770,990
54.74
0.52
1.03
353,912,960
4,301,998
6,268,736
60.62
0.74
1.07
172,412
0.03
95,905
0.02
46,667,402
70,179,471
14,507,346
8.36
12.57
2.60
51,392,395
5,055,469
17,310,767
8.80
0.87
2.97
25,245,113
4.52
23,681,777
4.06
51,493,793
9.22
66,314,412
11.36
4,977,782
3,976,867
11,971,503
543,450,107
14,872,347
558,322,454
0.89
0.71
2.14
97.34
2.66
100.00
9,304,847
4,214,800
10,737,940
552,592,006
31,229,773
583,821,779
1.59
0.72
1.84
94.65
5.35
100.00
74
Chart 2.6.4.1
75

Table 2.6.5.1
Particulars
Income
Sales
Other Income
Inc. / Dec. in Stock of
FG & Stock in Trade
Total Income
Expenditure
Raw Materials
Consumed
Power & Fuel
Trading Goods Consu.
Employee Cost
Excise Duty
Admi. Expenses
31.03.2009
Percentage
31.03.2010
Percentage
568,970,924
2,888,479
97.46
0.49
604,922,063
3,095,246
100.79
0.52
11,962,376
2.05
-7,837,636
-1.31
583,821,779
100.00
600,179,673
100.00
353,912,960
60.62
362,439,330
60.39
4,301,998
6,268,736
95,905
51,392,395
5,055,469
17,310,767
0.74
1.07
0.02
8.80
0.87
2.97
3,898,992
6,044,134
5,605,012
55,357,601
-------------20,867,497
0.65
1.01
0.93
9.22
-----3.48
Int.,& Bank Charges
23,681,777
4.06
12,629,477
2.10
Selling & Dist. Exp.
66,314,412
11.36
72,959,579
12.16
Other Expenses
Depreciation
Total Expenditure
Total
9,304,847
4,214,800
10,737,940
552,592,006
31,229,773
583,821,779
1.59
0.72
1.84
94.65
5.35
100.00
9,133,027
4,325,955
11,886,964
565,147,568
35,032,105
600,179,673
1.52
0.72
1.98
94.16
5.84
100.00
INTERPRETATION
Assumed total income as 100 sales figure shows a fluctuating trend it was low 96.76
during the period 2006 - 2007 and high 100.79 during the period 2009 -2010. The total
Expenditure was high 99.85 during the period 2005 - 2006 and low 94.16 during the period 2009
- 2010, it shows that the company has started reducing the expenses. The net profit was low 0.15
during the period 2005 -2006 and high 5.84 during the period 2009 -2010; it shows that the net
profit has an increasing trend during the period of study.
76
Chart 2.6.5.1
Income statement 2009-10
77
2.7 ANALYSIS OF COMPARATIVE BALANCE SHEET

2.7.1 Comparative Balance Sheet (2005, 2006)
Table 2.7.1.1
Particulars
2005
2006
Inc. / Dec.
Inventories
Sundry Debtors
Cash & Bank
Dep. Loans& Adv.
Total C.A.
Fixed Assets
Investments
Total Assets
Current Liabilities
Provisions
Total C.L.
Mis.- Expenditure
Share Capital
Reserves & Surpl.
Total Reserves &
Surplus
Secured Loans
Unsecured Loans
Total Loan
Total Liabilities &
Capital
55,967,284
69,949,936
8,599,952
36,523,557
171,040,729
179,872,825
1,102,442
352,015,996
117,112,122
3,247,779
120,359,901
9,625,885
23,000,000
56,710,638
60,613,986
93,213,080
18,554,203
23,502,635
195,883,904
147,770,694
692,786
344,347,384
99,963,143
2,697,779
102,660,922
10,182,152
37,000,000
57,464,264
4,646,702
23,263,144
9,954,251
-13,020,922
24,843,175
-32,102,131
-409,656
-7,668,612
-17,148,979
-550,000
-17,698,979
556,267
14,000,000
753,626
Inc. / Dec.
(%)
8.30
33.26
115.75
-35.65
14.52
-17.85
-37.16
-2.18
-14.64
-16.93
-14.71
5.78
60.87
1.33
79,710,638
94,464,264
14,753,626
18.51
128,370,342
33,201,000
161,571,342
113,771,350
43,633,000
157,404,350
-14,598,992
10,432,000
-4,166,992
-11.37
31.42
-2.58
371,267,766
364,711,688
-6,556,078
-1.77
INTERPRETATION
On comparing the balance sheet of company for the year ending 2005,2006. Current
assets have been increased by 14.52 %, the total Assets have been decreased by 2.18 %. The
current liabilities have been decreased by 14.71 %; total reserves and surplus have been raised
by18.51 %. The total liabilities and capital have been decreased by 1.77%.
78
Chart 2.7.1.1
Comparative Balance Sheet: Balance Sheet 2005-06
79
Table 2.7.2.1
Particulars
2006
2007
Inc. / Dec.
Inc / Dec(%)
Inventories
Sundry Debtors
Cash & Bank
Dep. Loans& Adv.
Total C.A.
Fixed Assets
Investments
Total Assets
60,613,986
93,213,080
18,554,203
23,502,635
195,883,904
147,770,694
692,786
344,347,384
95,009,299
123,053,398
5,729,942
76,779,594
300,572,233
139,052,943
685,222
440,310,398
34,395,313
29,840,318
-12,824,261
53,276,959
104,688,329
-8,717,751
-7,564
95,963,014
56.74
32.01
-69.12
226.69
53.44
-5.90
-1.09
27.87
Current Liabilities
99,963,143
128,369,169
28,406,026
28.42
Provisions
Total C.L.
Mis. - Expenditure
Share Capital
Reserves & Surplus
Total Reserves &
Surplus
Secured Loans
Unsecured Loans
Total Loan
Total Liabilities &
Capital
2,697,779
102,660,922
10,182,152
37,000,000
57,464,264
5,541,719
133,910,888
18,980,350
40,000,000
72,019,306
2,843,940
31,249,966
8,798,198
3,000,000
14,555,042
105.42
30.44
86.41
8.11
25.33
94,464,264
112,019,306
17,555,042
18.58
113,771,350
43,633,000
157,404,350
185,582,274
27,778,280
213,360,554
71,810,924
-15,854,720
55,956,204
63.12
-36.34
35.55
364,711,688
478,271,098
113,559,410
31.14
INTERPRETATION
assets have been increased by 53.44 %, the total Assets have been increased by 27.87 %. The
current liabilities have been increased by 30.44 %; total reserves and surplus have been raised by
18.58 %. The total liabilities and capital have been increased by 31.14%.
80
Chart 2.7.2.1
Comparative Balance Sheet 2006-07
81

Table 2.7.3.1
Particulars
2007
2008
Inc / Dec
Inc / Dec (%)
Inventories
Sundry Debtors
Cash & Bank
Dep.Loan& Adv.
Total C.A.
Fixed Assets
Investments
Total Assets
Current Liabilit.
Provisions
Total C.L.
Mis.-Expenditur.
Share Capital
Res. & Surplus
Total Reserves &
Surplus
Secured Loans
Unsec. Loans
Total Loan
Total Liabilities
& Capital
95,009,299
123,053,398
5,729,942
76,779,594
300,572,233
139,052,943
685,222
440,310,398
128,369,169
5,541,719
133,910,888
18,980,350
40,000,000
72,019,306
82,460,428
126,619,031
6,589,816
45,390,795
261,060,070
132,523,352
684,222
394,267,644
108,751,813
6,644,999
115,396,812
16,807,432
40,000,000
76,748,359
-12,548,871
3,565,633
859,874
-31,388,799
-39,512,163
-6,529,591
-1,000
-46,042,754
-19,617,356
1,103,280
-18,514,076
-2,172,918
0
4,729,053
-13.21
2.90
15.01
-40.88
-13.15
-4.70
-0.15
-10.46
-15.28
19.91
-13.83
-11.45
0.00
6.57
112,019,306
116,748,359
4,729,053
4.22
185,582,274
27,778,280
213,360,554
150,171,725
28,758,180
178,929,905
-35,410,549
979,900
-34,430,649
-19.08
3.53
-16.14
478,271,098
427,882,508
-50,388,590
-10.54
INTERPRETATION
assets have been decreased by 13.15 %, the total Assets have been decreased by 10.46 %. The
current liabilities have been decreased by 13.83 %; total reserves and surplus have been raised by
4.22 %. The total liabilities and capital have been decreased by 10.54%.
82
Chart 2.7.3.1
83
Table 2.7.4.1
Particulars
2008
2009
Inc / Dec
Inc / Dec (%)
Inventories
Sundry Debtors
Cash & Bank
Dep. Loan& Adv.
Total C.A.
Fixed Assets
Investments
Total Assets
Current Liabilities
Provisions
Total C.L.
Mis.- Expenditure
Share Capital
Res. & Surplus
Total Reserves &
Surplus
Secured Loans
Unsecured Loans
Total Loan
Total Liabilities &
Capital
82,460,428
126,619,031
6,589,816
45,390,795
261,060,070
132,523,352
684,222
394,267,644
108,751,813
6,644,999
115,396,812
16,807,432
40,000,000
76,748,359
99,520,742
111,904,860
9,821,111
59,503,988
280,750,701
128,771,175
683,222
410,205,098
114,898,809
21,101,924
136,000,733
16,112,987
47,500,000
75,958,085
17,060,314
-14,714,171
3,231,295
14,113,193
19,690,631
-3,752,177
-1,000
15,937,454
6,146,996
14,456,925
20,603,921
-694,445
7,500,000
-790,274
20.69
-11.62
49.03
31.09
7.54
-2.83
-0.15
4.04
5.65
217.56
17.85
-4.13
18.75
-1.03
116,748,359
123,458,085
6,709,726
5.75
150,171,725
28,758,180
178,929,905
128,552,520
22,821,977
151,374,497
-21,619,205
-5,936,203
-27,555,408
-14.40
-20.64
-15.40
427,882,508
426,946,302
-936,206
-0.22
INTERPRETATION
5.75 %. The total liabilities and capital have been decreased by 0.22 %.
84
Chart 2.7.4.1
85

Table 2.7.5.1
Particulars
Inventories
Sundry Debtors
Cash & Bank
Dep. Loan& Adv.
Total C.A.
Fixed Assets
Investments
Total Assets
Current Liabilities
Provisions
Total C.L.
Mis. - Expenditure
Share Capital
Reserves & Surplus
Total Reserves &
Surplus
Secured Loans
Unsecured Loans
Total Loan
Total Liabilities &
Capital
Inc/Dec
(%)
4.26
11.61
33.16
-16.83
3.73
12.59
2.27
6.51
17.90
31.81
20.06
57.66
0
14.10
2009
2010
Inc / Dec
99,520,742
111,904,860
9,821,111
59,503,988
280,750,701
128,771,175
683,222
410,205,098
114,898,809
21,101,924
136,000,733
16,112,987
47,500,000
75,958,085
103,759,105
124,894,006
13,077,458
49,486,977
291,217,546
144,989,602
698,722
436,905,870
135,465,900
27,815,415
163,281,315
25,404,355
47,500,000
86,670,505
4,238,363
12,989,146
3,256,347
-10,017,011
10,466,845
16,218,427
15,500
26,700,772
20,567,091
6,713,491
27,280,582
9,291,368
0
10,712,420
123,458,085
134,170,505
10,712,420
8.68
128,552,520
22,821,977
151,374,497
123,702,659
22,060,319
145,762,978
-4,849,861
-761,658
-5,611,519
-3.77
-3.34
-3.71
426,946,302
468,619,153
41,672,851
9.76
INTERPRETATION
8.68 %. The total liabilities and capital have been increased by 9.76 %.
86
Chart 2.7.5.1
87
2.8 ANALYSIS OF COMPARATIVE FINANCIAL STATEMENT

2.8.1 Comparative Financial Statement (2005, 2006)
Table 2.8.1.1
Particulars
Income
Sales
Other Income
F.G.& Stock in Trade
Total Income
Expenditure
R.M. Consumed
Power & Fuel
Trading Goods
Consumed
Employee Cost
Interest, Finance &
Bank Charges
Other Expenses
Depreciation
Total Expenditure
31.03.2005
31.03.2006
Inc / Dec
Inc/ Dec (%)
356,623,072
2,527,954
443,655,702
2,677,899
87,032,630
149,945
24.40
5.93
4,337,079
-1,342,571
-5,679,650
-130.96
363,488,105
444,991,030
81,502,925
22.42
187,365,835
2,138,042
3,633,696
240,246,671
2,143,176
5,338,101
52,880,836
5,134
1,704,405
28.22
0.24
46.91
6,076,505
9,638,063
3,561,558
58.61
32,199,076
56,853,505
36,977,451
63,683,585
4,778,375
6,830,080
14.84
12.01
18,559,501
25,764,462
7,204,961
38.82
38,849,374
1,784,216
4,754,737
10,736,554
362,951,041
537,064
36,481,781
5,254,581
3,939,064
11,599,965
441,066,900
3,924,130
-2,367,593
3,470,365
-815,673
863,411
78,115,859
3,387,066
-6.09
194.50
-17.15
8.04
21.52
630.66
INTERPRETATION
On comparing the financial statement of company for the year ending 2005,2006. Total
income has been increased by 22.42 %. The total Expenditure has been increased by 21.52 %.
The Net profit has been increased by 630.66 %.
88
Chart 2.8.1.1
Comparative Financial Statement (2005, 2006)
89

Table 2.8.2.1
Particulars
Income
Sales
Other Income
Total Income
Expenditure
R. M Consumed
Power & Fuel
Trading Goods
Consumed
Employee Cost
Excise Duty
Adm. Expenses
Interest, Finance &
Bank Charges
Other Expenses
Depreciation
Total Expenditure
31.03.2006
31.03.2007
Inc / Dec
Inc/ Dec (%)
443,655,702
2,677,899
562,156,209
2,194,910
118,500,507
-482,989
26.71
-18.04
-1,342,571
16,624,415
17,966,986
-1338.25
444,991,030
580,975,534
135,984,504
30.56
240,246,671
305,918,359
65,671,688
27.34
2,143,176
5,338,101
2,999,915
6,906,040
856,739
1,567,939
39.98
29.37
9,638,063
739,213
-8,898,850
-92.33
36,977,451
43,176,685
76,055,525
6,199,234
76,055,525
16.76
0
63,683,585
15,004,348
-48,679,237
-76.44
25,764,462
26,291,527
527,065
2.05
36,481,781
5,254,581
3,939,064
11,599,965
441,066,900
3,924,130
53,317,699
2,763,446
4,987,867
12,521,481
550,682,105
30,293,429
16,835,918
-2,491,135
1,048,803
921,516
109,615,205
26,369,299
46.15
-47.41
26.63
7.94
24.85
671.98
INTERPRETATION
On comparing the financial statement of company for the year ending 2006,2007. Total
income has been increased by 30.56 %. The total Expenditure has been increased by 24.85 %.
The Net profit has been increased by 671.98 %.
90
Chart 2.8.2.1
Financial statement 2006-07
91

Table 2.8.3.1
Particulars
Income
Sales
Other Income
Total Income
Expenditure
R. M. Consumed
31.03.2007
31.03.2008
Inc / Dec
Inc/ Dec (%)
562,156,209
2,194,910
558,979,157
1,766,026
-3,177,052
-428,884
-0.57
-19.54
16,624,415
-2,422,729
-19,047,144
-114.57
580,975,534
558,322,454
-22,653,080
-3.90
305,918,359
305,609,655
-308,704
-0.10
2,999,915
2,877,773
-122,142
-4.07
Power & Fuel

Trading Goods
Consumed
Employee Cost
Excise Duty
Adm. Expenses
Charges
Other Expenses
Depreciation
Total Expenditure
6,906,040
5,770,990
-1,135,050
-16.44
739,213
172,412
-566,801
-76.68
43,176,685
76,055,525
15,004,348
46,667,402
70,179,471
14,507,346
3,490,717
-5,876,054
-497,002
8.08
-7.73
-3.31
26,291,527
25,245,113
-1,046,414
-3.98
53,317,699
2,763,446
4,987,867
12,521,481
550,682,105
51,493,793
4,977,782
3,976,867
11,971,503
543,450,107
-1,823,906
2,214,336
-1,011,000
-549,978
-7,231,998
-3.42
80.13
-20.27
-4.39
-1.31
30,293,429
14,872,347
-15,421,082
-50.91
INTERPRETATION
On comparing the financial statement of company for the years 2007-08. Total income
has been decreased by 3.90 %. The total Expenditure has been decreased by 1.31 %. The Net
profit has been decreased by 50.91 %.
92
Chart 2.8.3.1
93

Table 2.8.4.1
Particulars
Income
Sales
Other Income
Total Income
Expenditure
R. M. Consumed
31.03.2008
31.03.2009
Inc / Dec
Inc/ Dec (%)
558,979,157
1,766,026
568,970,924
2,888,479
9,991,767
1,122,453
1.79
63.56
-2,422,729
11,962,376
14,385,105
-593.76
558,322,454
583,821,779
25,499,325
4.57
305,609,655
353,912,960
48,303,305
15.81
2,877,773
4,301,998
1,424,225
49.49
Power & Fuel

Trading Goods
Consumed
Employee Cost
Excise Duty
Adm. Expenses
Interest, Finance &
Bank Charges
Other Expenses
Depreciation
Total Expenditure
5,770,990
6,268,736
497,746
8.62
172,412
95,905
-76,507
-44.37
46,667,402
70,179,471
14,507,346
51,392,395
5,055,469
17,310,767
4,724,993
-65,124,002
2,803,421
10.12
-92.80
19.32
25,245,113
23,681,777
-1,563,336
-6.19
51,493,793
4,977,782
3,976,867
11,971,503
543,450,107
66,314,412
9,304,847
4,214,800
10,737,940
552,592,006
14,820,619
4,327,065
237,933
-1,233,563
9,141,899
28.78
86.93
5.98
-10.30
1.68
14,872,347
31,229,773
16,357,426
109.99
INTERPRETATION
On comparing the financial statement of company for the years 2008, 2009. Total income
has been increased by 4.57 %. The total Expenditure has been increased by 1.68 %. The Net
profit has been increased by 109.99 %.
94
Chart 2.8.4.1
95
Table 2.8.5.1
Particulars
Income
Sales
Other Income
Total Income
Expenditure
R.M. Consumed
31.03.2009
31.03.2010
Inc / Dec
Inc/ Dec (%)
568,970,924
2,888,479
604,922,063
3,095,246
35,951,139
206,767
6.32
7.16
11,962,376
-7,837,636
-19,800,012
-165.52
583,821,779
600,179,673
16,357,894
2.80
353,912,960
362,439,330
8,526,370
2.41
4,301,998
3,898,992
-403,006
-9.37
Power & Fuel

Trading Goods
Consumed
Employee Cost
Excise Duty
Adm. Expenses
Interest, Finance &
Bank Charges
Other Expenses
Depreciation
Total Expenditure
6,268,736
6,044,134
-224,602
-3.58
95,905
5,605,012
5,509,107
5744.34
51,392,395
5,055,469
17,310,767
55,357,601
20,867,497
3,965,206
-5,055,469
3,556,730
7.72
-100.00
20.55
23,681,777
12,629,477
-11,052,300
-46.67
66,314,412
9,304,847
4,214,800
10,737,940
552,592,006
72,959,579
9,133,027
4,325,955
11,886,964
565,147,568
6,645,167
-171,820
111,155
1,149,024
12,555,562
10.02
-1.85
2.64
10.70
2.27
31,229,773
35,032,105
3,802,332
12.18
INTERPRETATION
On comparing the financial statement of company for the years 2009, 2010. Total income
has been increased by 2.80 %. The total Expenditure has been increased by 2.27 %. The Net
profit has been increased by 12.18 %.
96
Chart 2.8.5.1
97
2.9 TREND ANALYSIS
2.9.1 Financial Statement Trend Percentages Base Year (2005 - 2006)
Table 2.9.1.1
2009 2010
2008 2009
2007 2008
2006 2007
2005 2006
Sales
136
128
126
127
100
Total Income
135
131
125
131
100
Total
Expenditure
128
125
123
125
100
Net Profit
893
796
379
772
100
Particulars
INTERPRETATION
Trend Percentages of financial statement as base year 2005 - 2006. Sales have been
increased during the period 2009 -2010 making Sales 136. Both the Total income and Total
Expenditure have been raised during the year 2009 - 2010 making Total income 135 and Total
Expenditure 128. Net Profit has been increased during the period 2009 - 2010. Therefore the
Financial Statement shows an increasing trend.
98
Chart 2.9.1.1
Trend Analysis: Financial statement trend percentages base year 2005-06
99
2.9.2 Balance Sheet Trend Percentages Base Year (2005 - 2006)
Table 2.9.2.1
Particulars
Share
Capital
Reserves &
Surplus
Secured
Loans
Unsecured
Loans
2009 2010
2008 2009
2007 2008
2006 2007
2005 2006
128.38
128.38
108.11
108.11
100
150.83
132.18
133.56
125.33
100
108.73
112.99
131.99
163.12
100
50.56
52.30
65.91
63.66
100
Fixed Assets
98.12
87.14
89.68
94.10
100
Investments
100.86
98.69
98.76
98.91
100
Inventories
171.18
164.19
136.04
156.74
100
133.99
120.05
135.84
132.01
100
70.48
52.93
35.52
30.88
100
210.56
253.18
193.13
326.69
100
249.50
158.25
165.07
186.41
100
159.05
132.48
112.41
130.44
100
Sundry
Debtors
Cash & Bank
Balance
Deposits,
Loans &
Advances
Miscellaneou
s Expenses
Current
Liability &
Provisions
INTERPRETATION
Trend Percentages of Balance Sheet as base year 2005 - 2006. Fixed assets and Current
liabilities have been increased during the period 2009 -2010 making fixed assets 98.12 and
current assets as 687.07. Current liabilities have been increased as 159.05 during the period 2009
-2010. Therefore the balance sheet shows an increasing trend.
100
Chart 2.9.2.1
Balance Sheet Trend Percentages Base Year 2005-06
101
CHAPTER III
FINDINGS, SUGGESTIONS AND CONCLUSION

3.1 FINDINGS
1. Gross Profit Ratio shows an increasing trend from 2005 2006, though there was
slight decrease during the period 2007 - 2008. There is a significant change in
cost of material consumed. The companies highest gross profit ratio was during
the period 2006 - 2007.
2. Net Profit Ratio has a slow growth and decline during the period of study. It
indicates insignificant improvement in conditions of the business.
3. Operating Ratio is the test of operational efficiency. The efficiency has risen
slightly during the period of study.
4. The Return on Capital Employed ratio shows increasing trend in all financial
years during the period of study. Highest of 21.83% was during the period 2009 2010.
5. Return on Equity Ratio shows an increasing trend though there is a slight decrease
during the year 2007 - 2008. Highest during the period 2006 - 2007 (27.04%).
6. Earnings per Share Ratio in 2006 - 2007 and 2009 - 2010 is 0.76 and 0.74
respectively, these were the highest.
7. Debtors Turnover Ratio shows slight variations between the periods. It varies
from 4.41 to 5.74. Higher the ratio it signifies that the debt are being collected
more promptly. This ratio indicates that the debts are being collected more
promptly in the company.
8. Debt collection period indicates the quality of debtors since it measures the
fastness with which money is collected from them. As it is between 2 to 3 months,
it indicates the debt collection efficiency is satisfactory in the business. In general
the amount of receivables should not exceed 3 4 months of credit sale.
9. Fixed asset turnover ratio shows an increasing trend in all the financial years
except during 2009 - 2010. The ideal ratio is 0.67. During the period of study it
doesnt fall below 3.
102
10. Total asset turnover ratio shows an increasing trend in all the financial years
during the period of study. It shows that the assets are well utilized.
11. Inventory turnover ratio indicates the utilization of inventory in an efficient
manner. It is therefore clear that the sales are quick and stock does not consist of
non-salable items. It was higher in 2005 - 2006, indicates speedier movement of
stock. It has decreased from 4.12 to 3.44 with a difference of 0.68 times.
12. Stock velocity shows the duration of the stock at the company. The company
takes 87.38 days to 104.65 days to clear the stocks.
13. The current ratio was favorable during 2006 2009
14. the quick ratio was above the satisfactory level as it shows a favorable trend
15. Debt equity ratio shows that the company is depending outsiders more during the
year 2006 - 2007.
16. Sales have been raised from 100% to 136%.
17. Net profit has been raised from 100% to 893%.
18. During the period of study the total income was always more than the total
expenditure which is good for the company.
19. Share capital has been raising in all financial years from 100% to 128.38%.
20. Reserves and surplus has been raising from 100% to 150.83%.
21. Sundry debtors has been raising from 100% to 133.99%.
22. Investment shows a decreasing trend from 100% to 98.12%.
103
3.2 SUGGESTIONS
1. The management may take proper decisions to maintain their absolute liquid ratio,
so that they can maintain their liquidity position in the long run.
2. The liquidity position could be strengthened by reducing the current liabilities.
3. The management may try to increase the EPS by increasing the profitability of the
company.
4. The cash balance level of the company when compared to current liabilities is
minimum and the management may improve the cash balance to an optimum
level to meet the contingencies.
5. The company may tighten the credit policy to the customers to reduce the debt
collection period.
104
3.3 CONCLUSION
On studying the financial performance (through ratio analysis) of Intelligence Credit
Management for a period of five years from 2005 - 2006 to 2009 - 2010, the study reveals that
the financial performance in general is satisfactory. It could be concluded that the company
Intelligence Credit Management has been performing well.
105
CHAPTER 4
4.1 SCOPE OF FUTURE WORK:

A financial statement is physical documentation of a business's finances. This statement is
sent out to shareholders and potential shareholders if the company is publicly traded in order to
inform them of the business's financial health.
It consists of four parts: The balance sheet report, income statement, statement of cash
flow and statement of shareholders' equity. In addition to this, the financial performance review
at the regular intervals of time is also considered as a vital part for the organizational sustainable
development.
Hence, this project paves the way for all the future research work and it becomes an
essential part for those researchers to fulfill their research work with accurate and expected
results.
The consolidations of all the financial performance will both the shows the financial
results of the parent company and its subsidiaries as if the group were a single company with
multiple branches.
By following the correct sequence for recording transactions and preparing financial
statements, financial managers ensure the reports are accurate and in line with regulatory
guidelines.
106
Appendices 1
Balance Sheet (Amount in Rupees)
Particulars
Sources of
Funds
Share holders
Fund
Share Capital
Reserves &
Surplus
Deferred
Tax(net)
Loan Funds
Secured Loans
Unsecured Loans
Total
Application of
Funds
Fixed Assets
Investments
Current Assets,
Loans &
Advances
Inventories
Sundry Debtors
Cash & Bank
Balances
Deposits, Loans&
Advances
Total
Less: Current
Liabilities &
Provisions
Current
Liabilities
Provisions
Net Current
Assets
Miscellaneous
Expenditure
Total
As on
31.03.2006
As on
31.03.2007
As on
31.03.2008
As on
31.03.2009
As on
31.03.2010
37,000,000
40,000,000
40,000,000
47,500,000
47,500,000
57,464,264
72,019,306
76,748,359
75,958,085
86,670,505
15,485,270
19,095,427
113,771,350
43,633,000
251,868,614
185,582,274
27,778,280
325,379,860
150,171,725
28,758,180
295,678,264
128,552,520
22,821,977
290,317,852
123,702,659
22,060,319
299,028,910
147,770,694
692,786
139,052,943
685,222
132,523,352
684,222
128,771,175
683,722
144,989,602
698,722
60,613,986
93,213,080
95,009,299
123,053,398
82,460,428
126,619,031
99,520,742
111,904,860
103,759,105
124,894,006
18,554,203
5,729,942
6,589,816
9,821,111
13,077,458
23,502,635
76,779,594
45,390,795
59,503,988
49,486,977
195,883,904
300,572,233
261,060,070
280,750,701
291,217,546
99,963,143
128,369,169
108,751,813
114,898,809
135,465,900
2,697,779
5,541,719
6,644,999
21,101,924
27,815,415
93,222,982
166,661,345
145,663,258
144,749,968
127,936,231
10,182,152
18,980,350
16,807,432
16,112,987
25,404,355
251,868,614
325,379,860
295,678,264
290,317,852
299,028,910
107
Appendices 2
Income Statement (Amount in Rupees)

Particulars
Income
Sales
Other Income
Increase/ Decrease
in Stock of
Finished Goods &
Stock in Trade
Total Income
Expenditure
Raw Materials
Consumed
Stores &
Consumables
Power & Fuel
Trading Goods
Consumed
Employee Cost
Excise Duty
Administrative
Expenses
Interest, Finance &
Bank Charges
Selling &
Distribution
Expenses
Other Expenses
Repair &
Maintenance
Depreciation
Total Expenditure
Net Profit for the
Year
Total
As on
31.03.2006
As on
31.03.2007
As on
31.03.2008
As on
31.03.2009
As on
31.03.2010
443655702
2677899
562156209
2194910
558979157
1766026
568970924
2888479
604922063
3095246
-1342571
16624415
-2422729
11962376
-7837636
444991030
580975534
558322454
583821779
600179673
240246671
305918359
305609655
353912960
362439330
2143176
2999915
2877773
4301998
3898992
5338101
6906040
5770990
6268736
6044134
9638063
739213
172412
95905
5605012
36977451
43176685
76055525
46667402
70179471
51392395
5055469
55357601
63683585
15004348
14507346
17310767
20867497
25764462
26291527
25245113
23681777
12629477
36481781
53317699
51493793
66314412
72959579
5254581
2763446
4977782
9304847
9133027
3939064
4987867
3976867
4214800
4325955
11599965
441066900
12521481
550682105
11971503
543450107
10737940
552592006
11886964
565147568
3924130
30293429
14872347
31229773
35032105
444991030
580975534
558322454
583821779
600179673
108
REFERENCES
1. Dr. S.N. Maheswari (2000) Principles of Management Accounting. Published by

Sultan Chand & Sons, New Delhi.
2. I.M Pandey (1995) Financial Management. Published by Vikas Publishing House
Pvt. Ltd., New Delhi.
3. Khan & Jain (2001) Theory and problems of Financial Management. Published
by Tata McGraw-Hill Publishing Company Ltd., New Delhi.
4. Wixom R, Kelly W.G, Bed Ford N.M (1970) Accounts Hand Book.
5. Prasanna Chandra (1999) Fundamentals of Financial Management. Published

by Tata McGraw-Hill Publishing Company Ltd., New Delhi.

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1

A STUDY ON FINANCIAL PERFOMANCE IN ICM

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES

PAAVAI COLLEGE OF ENGINEERING

A STUDY ON FINANCIAL PERFORMANCE IN ICM PRIVATE LIMITED COIMBATORE

Submitted on project work Viva-Voce examination held on

Signature of the student

I certify that the declaration made above by the candidate is true

Signature of the Guide.

1.1 INTRODUCTION AND DESIGN OF THE STUDY

Financial Performance Analysis.

1.1.2. Tools of Financial Analysis

1.1.2.1. Ratio analysis

Ratio analysis is a widely used tool of financial analysis. It is defined as the

It is also defined as an expression of the quantitative relationship between two

Significance of Ratio Analysis

Ratio analysis determines the following

1.1.2.3 Limitations of Ratio Analysis

1. It is difficult to decide on the proper basis for comparison.

Profitability reflects the final of result of business operations.

1.1.5 Liquidity ratios

1.1.6 Leverage Ratios

1.1.7 Comparative Financial Statements

1.1.8 Comparative Income Statements

1.1.10 Common Size Financial Statements

1.1.11 Trend Percentages

Trend percentages are immensely helpful in making a comparative study of the

1.1.12 Types of Financial Statement

1.1.12.2 Balance Sheet

It is a statement of financial position of a business at a specified moment of time.

1.1.12.3 Statement of Retained Earnings

1.1.12.4 Statement of Changes in Financial Position

1.1.13 Nature of Financial Statements

According to the American Institute of Certified Public Accountancy Financial

1.1.13.2 Personal Judgments

1.1.13.3 Ignore Substance

1.1.14.1 Financial Statements are Generally Interim Reports

1.1.14.2 Accounting Concepts and Conventions

1.1.14.3 Influence on Personal Judgment

1.2.1 Company profile

1.3.1 NEED FOR THE STUDY

1.3.2 OBJECTIVES OF THE STUDY

1. To make an analysis on the financial performance of M/S Intelligence Credit

3. To study the efficiency and liquidity position using ratios.

1.3.3 SCOPE FOR THE STUDY:

1.3.4 LIMITATIONS OF THE STUDY

1.1 RESEARCH DESIGN

1.2 DATA COLLECTION

1.3 PERIOD OF STUDY

ANALYSIS AND INTERPRETATIONS

2.1 PROFITABILITY RATIO

Gross Profit Ratio = (Gross profit / Net sales) x 100

Gross Profit Margin Ratio

2.1.2 Net Profit Margin Ratio

Net Profit After

2.1.3 Operating Profit Margin Ratio

Operating Profit Ratio = (Operating Profit / Net Sales) x 100

Operating Profit Margin Ratio

2.1.4 Return on Capital Employed

Return on Capital Employed = (Operating Profit / Capital Employed) x 100

Return on Capital Employed

2.1.5 Return on Equity