CHAPTER 4

FINDINGS, RECOMMENDATIONS AND CONCLUSION

4.1FINDINGS OF THE STUDY :
The major findings of the study are as follows: 1. The net sales have been increasing from the year 2010-2011 to 2013-2014,
but in the year 2014-2015 net sales has drop because of the market price of
the good. The cost of production of the goods are at a higher position. So the
company is not able to sell much of its good.
2. The operating expense has been continuously increasing from 2010-2011 to
2014-2015 due to increase in price of raw material, power and fuel and
employees remuneration.
3. The net profit of the company is fluctuating due to decrease in sales and
increase in expenses.
4. Organisation is based on traditional approach on financing total funds that is
shareholders funds.
5. Organisation is based on financing its working capital on conservative
approach.
6. Organisation is consistently improving its reserves and surplus which is
good sign strengthening future financial stabilities.
Liquidity Ratio: It shows that Assam Petrochemicals Limited has the ability to meet its
current obligation. It does not suffer from excess liabilities. It thus has proper balance
between high liquidity and lack of liability. Its a good sign for the company as the
creditors would definitely extend credit because of the satisfactory liquidity position of
the company.
Profitability Ratio: The primary objective of the business concern is to earn profit
which is required not only for existence but also for expansion and diversification. The

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profitability ratio of Assam Petrochemicals Limited does not show a good sign for the
company.
Activity ratio: Activity ratio shows the speed with which the asset are converted to
sales. The efficiencies in turning its inventory ratio has considerable which despite, that
Assam Petrochemical Limited is in the position to sell its stock quickly. The Company
Debtor turnover Ratio has increased in some year and decreased in some year but in
the current year 2014-2015 it has decreased which despite that the company operates on
cash basis and collection of account receivable is efficient enough.
Solvency Ratio: The solvency ratio of Assam Petrochemicals Limited show that at
present the company is utilizing less amount of debt as compared to equity. The
solvency ratio of the company shows that it has a good long solvency position.
7.

4.2RECOMMENDATIONS :
From the analysis of balance sheet & Income statement of Assam petro chemicals
Limited(APL), some of the recommendation to the company are as follows:1. Earnings per Share (EPS) of APL has been showing the declining trend. The
company should aim to maximize value and long term return its
shareholders through a strategy of new investment and cost reduction.
2. The company has lots of Reserve and Surplus which the company can
investment in some financial institution so that the company can earn returns
on the same. Moreover, the cash which remains stagnant should be invested
to increase returns.
3.

One of the major concern of APL is its fluctuating profits. It should aim at
working on it by controlling its operating expenses.

4. Raw material, power & fuel and employees remuneration constitute the
majority of the operating expenses. The company should properly utilize its
raw material by practicing newly adopted methods like Economic order

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Quantity (EOQ) / Economic Batch Quantity (EBQ) so as to reduce the

wastage of raw material.
5. The company has very less proportion of debt with respect to equity, the
company should aim to have a proper debt equity ratio in order to improve
its EPS and gain advantages of low cost debt.

4.3CONCLUSION :
Assam Petrochemicals Limited has travelled a long distance in pursuit of excellence in
all the areas of its performance. Following are the conclusion as follows:
1. Organization is based on traditional approach on financing total funds that is
shareholders funds.
2. Organization is based on financing its working capital on conservative
approach.
3. Organization is consistently improving its reserves and surplus which is
good sign strengthening future financial stabilities.

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