A

ROJECT REPORT
ON

Financial Appraisal of Life Care Medicos

Through Ratio Analysis

45 Days Summer Training Project With

“Life Care Medicos”

Submitted By:-
Vishal Trivedi
MBA-III Semester

Poornima Group of Institution, Jaipur

BT-1, BIO-TECHNOLOGY PARK, SITAPURA, JAIPUR
 Poornima Group of Institution, Jaipur
(ISI – 2, Goner Road, Sitapura, Jaipur

CERTIFICATE OF

Summer Project/Training during June – July, 2010

Certified that Mr. Vishal Trivedi, student of Master of Business Administration, III Semester
has submitted his report on “Financial appraisal of Life care Medicos Through Ration
Analysis” after successfully completing the summer practical training at “Life Care Medicos”
from June 17th to August 1st 2010, towards fulfillment of the syllabus requirement prescribed
by Rajasthan Technical University, Kota for MBA III Semester Paper.

Rakesh Duggal
Director, PGI (FOM)
 TO WHOM SO EVER IT MAY CONCERN

This is to certify that Mr. Vishal Trivedi (MBA III Semester) of Poornima Group of Institution
has joined our esteemed organization Life Care Medicos as a trainee. He has undergone a
Project Training in the guidance of Mr. Uma Shankar Vyas (Partner) from 17th June to 1st
August 2010. He has done well and completed all the criteria of a Project Training and
submitted his project on time. He was well behaved and showed complete professionalism
during the Project Training.

We wish for his great and successful career.

Naval Kishore Vyas

(Owner)
 ACKNOWLEDGEMENT
Undertaking a project is never an easy job for a single person. It always involves help from
other people, who are either reviewing your work or teaching about the things you never
knew before.

For completion of any project with aplomb and expertise it is essential that teamwork is
given utmost importance. In the completion of my project “Performance Appraisal of Life
Care Medicos”. I had privilege of working with experienced professional people, for which I
am grateful to the team of “Life Care Medicose” for giving me a conductive environment to
work in, which ensured maximum productivity on my part.

I would like to extend my heartful thanks to Mr. Uma Shankar Vyas (Partner, Life care
Medicos, Bikaner) for giving me an opportunity to work in Life Care Medicos as a forty-five
days trainee.

I would also like to thank my project guide Ranu mam, for their priceless help and
guidance and my parents who have helped me in this project.

I would also like to thank Rakesh Duggal (Director PGI) for this valuable inspiration.

I must also thank the management of Life Care Medicos to provide excellent opportunity
and environment to pull my project through. Cooperation of Life Care Medicos staff is also
gratefully acknowledged.

Vishal Trivedi
 ACKNOWLEDGEMENT
Undertaking a project is never an easy job for a single person. It always
involves help from other people, who are either reviewing your work or
teaching about the things you never knew before.

For completion of any project with aplomb and expertise it is essential that
teamwork is given utmost importance. In the completion of my project
“Performance Appraisal of Life Care Medicos”. I had privilege of working with
experienced professional people, for which I am grateful to the team of “Life
Care Medicose” for giving me a conductive environment to work in, which
ensured maximum productivity on my part.

I would like to extend my heartful thanks to Mr. Uma Shankar Vyas (Partner,
Life care Medicos, Bikaner) for giving me an opportunity to work in Life Care
Medicos as a forty-five days trainee.

I would also like to thank my project guide Ranu mam, for their priceless help
and guidance and my parents who have helped me in this project.

I would also like to thank Rakesh Duggal (Director PGI) for this valuable
inspiration.

I must also thank the management of Life Care Medicos to provide excellent
opportunity and environment to pull my project through. Cooperation of Life
Care Medicos staff is also gratefully acknowledged.

Date Vishal Trivedi

 Contents of Report

Preface

Executive Summary

Chapter – 1 OVERVIEW
1.1) History of Industry
1.2) Pharmaceutical Company in India
1.3) Vision & Mission
1.4) Introduction to organization

Chapter – 2 PROJECT PROFILE

2.1) Project Title
2.2) Objective Of Study
2.3) Tools & Techniques
2.4) Opportunity & Threats

Chapter- 3 Research Methodology

Chapter – 3 Ratio Analysis

Chapter – 4 Conclusions
cha

Bibliography
PREFACE

Management of modern business requires an appreciation of

Multidisciplinary concept & in-depth knowledge of specific Analytical tools,
geared to the solution of real life problems. Knowledge, itself based on
empirical foundation, canhelp in developing the mechanism for handling such
situation. Hence, MBA curriculum has been desired to provide the future
Manager ample practical exposure to the business world.

Summer training is essential for the fulfillment of MBA Curriculum; it

Provides an opportunity to the student to understand the industry with Special
emphasis on the development of skill in analyzing and Interpreting practical
problem though application of management.

The whole study is divided into various parts :-

The first chapter of study is introduction , where in I have present introduction

of the industry and firm in which I had completed my summer training.

The second chapter is project, which contains title, objective, Scope of Study
& Opportunity & Threats. The third chapter is about the facts, figures &
findings.
The fourth chapter is the ratio analysis.
The remaining chapter includes inferences drawn by me on the basis of my
observations.
Date Vishal Trivedi

CHAPTER – 1
 1.1) HISTORY OF INDUSTRY

The earliest drugstores date back to the middle Ages. The first known
drugstore was opened by Arabian pharmacists in Baghdad in 754,[2] and
many more soon began operating throughout the medieval Islamic world and
eventually medieval Europe. By the 19th century, many of the drug stores in
Europe and North America had eventually developed into larger
pharmaceutical companies.

Most of today's major pharmaceutical companies were founded in the late

19th and early 20th centuries. Key discoveries of the 1920s and 1930s, such
as insulin and penicillin, became mass-manufactured and distributed.
Switzerland, Germany and Italy had particularly strong industries, with the UK,
US, Belgium and the Netherlands following suit.

Legislation was enacted to test and approve drugs and to require appropriate
labeling. Prescription and nonprescription drugs became legally distinguished
from one another as the pharmaceutical industry matured. The industry got
underway in earnest from the 1950s, due to the development of systematic
scientific approaches, understanding of human biology (including DNA) and
sophisticated manufacturing techniques.

Numerous new drugs were developed during the 1950s and mass-produced
and marketed through the 1960s. These included the first oral contraceptive,
"The Pill", Cortisone, blood-pressure drugs and other heart medications. MAO
Inhibitors, chlorpromazine (Thomasine), Haldol (Haloperidol) and the
tranquilizers ushered in the age of psychiatric medication. Valium (diazepam),
discovered in 1960, was marketed from 1963 and rapidly became the most
prescribed drug in history, prior to controversy over dependency and
habituation.
Attempts were made to increase regulation and to limit financial links between
companies and prescribing physicians, including by the relatively new US
FDA. Such calls increased in the 1960s after the thalidomide tragedy came to
light, in which the use of a new tranquilizer in pregnant women caused severe
birth defects. In 1964, the World Medical Association issued its Declaration of
Helsinki, which set standards for clinical research and demanded that subjects
give their informed consent before enrolling in an experiment. Phamaceutical
companies became required to prove efficacy in clinical trials before
marketing drugs.

Cancer drugs were a feature of the 1970s. From 1978, India took over as the
primary center of pharmaceutical production without patent protection.[citation
needed]

The industry remained relatively small scale until the 1970s when it began to
expand at a greater rate.[citation needed] Legislation allowing for strong
patents, to cover both the process of manufacture and the specific products,
came in to force in most countries. By the mid-1980s, small biotechnology
firms were struggling for survival, which led to the formation of mutually
beneficial partnerships with large pharmaceutical companies and a host of
corporate buyouts of the smaller firms. Pharmaceutical manufacturing became
concentrated, with a few large companies holding a dominant position
throughout the world and with a few companies producing medicines within
each country.

The pharmaceutical industry entered the 1980s pressured by economics and

a host of new regulations, both safety and environmental, but also
transformed by new DNA chemistries and new technologies for analysis and
computation.[citation needed] Drugs for heart disease and for AIDS were a
feature of the 1980s, involving challenges to regulatory bodies and a faster
approval process.
Managed care and Health maintenance organizations (HMOs) spread during
the 1980s as part of an effort to contain rising medical costs, and the
development of preventative and maintenance medications became more
important. A new business atmosphere became institutionalized in the 1990s,
characterized by mergers and takeovers, and by a dramatic increase in the
use of contract research organizations for clinical development and even for
basic R&D. The pharmaceutical industry confronted a new business climate
and new regulations, born in part from dealing with world market forces and
protests by activists in developing countries. Animal Rights activism was also
a problem.

Marketing changed dramatically in the 1990s, partly because of a new

consumerism.[citation needed] The Internet made possible the direct
purchase of medicines by drug consumers and of raw materials by drug
producers, transforming the nature of business. In the US, Direct-to-consumer
advertising proliferated on radio and TV because of new FDA regulations in
1997 that liberalized requirements for the presentation of risks. The new
antidepressants, the SSRIs, notably Fluoxetine (Prozac), rapidly became
bestsellers and marketed for additional disorders.

Drug development progressed from a hit-and-miss approach to rational drug

discovery in both laboratory design and natural-product surveys. Demand for
nutritional supplements and so-called alternative medicines created new
opportunities and increased competition in the industry. Controversies
emerged around adverse effects, notably regarding Vioxx in the US, and
marketing tactics. Pharmaceutical companies became increasingly accused of
disease mongering or over-medicalizing personal or social problems.

There are now more than 200 major pharmaceutical companies, jointly said to
be more profitable than almost any other industry, and employing more
political lobbyists than any other industry. Advances in biotechnology and the
human genome project promise ever more sophisticated, and possibly more
individualized, medications

1.2) Pharmaceutical Company in India

With 14% of annual growth the Pharmaceutical Companies in India is worth

USD 3.1 billion. It is the largest generic drugs producer in the world and has
substantial contribution towards meteoritic growth of India Inc.
The pool of ' Pharmaceutical Company' is dominated by generic
manufacturers. Although, some first line companies are slowly shedding
'Generic' tag and dawning 'Innovator' tag to get a global footage, but still
generic drugs accounts for 80% of revenue. ' Pharmaceutical Companies in
India ' are getting technologically strong and self reliant. ' Pharmaceutical
Companies in India ' are armed with –

 Low costs of production & R&D costs (around 70% less than their
Western counterparts).
 Highly innovative scientific manpower.
 Hosts of national and private laboratories.
 A strong IPR regime following WTO and WIPO norms.

Pharmaceutical Market in India is actively partnering with Government, NGOs

and other Healthcare providers to improve the health and quality of life by
innovating and developing safe, cost-effective and quality medicines. It also
aims to increase the access of medicines to people in rural areas and those
living at or below the poverty line. Companies like Ranbaxy, Dr. Reddy's Lab,
Lupin Lab, Torrent Pharmaceuticals, Glenmark etc are performing excellently
at the global level also. Ranbaxy has recently won a fierce battle against
infringement (Norway) involving key Norwegian patents on Atorvastatin (a
cholesterol-lowering drug marketed by Pfizer). MNC ' Pharmaceutical
Companies in India ' are aggressively forging collaboration, acquisitions and
even cross- licensing with foreign firms for greater reach, both in domestic and
world market. ' Pharmaceutical Company inspite of registering fabulous
growth is still laced with some negative market imperatives. ' Pharmaceutical
Companies Operating in India ' is a pool representing about 250 large
Pharmaceuticals manufacturers and suppliers and about 8000 Small Scale
Pharmaceutical & Drug Units which forms the core (including 5 Central Public
Sector Units).
The issues are:
'Patentable inventions' with respect to Sec 3 (d)of the Patents acts and Rules.
Compulsory Licensing.
Data Exclusivity.
Spurious drugs.
Availability.
Price control of essential drugs.
Sky high price of drugs manufactured by foreign companies.
To be one of the largest and most advanced in the world ' Pharmaceutical
Market in India ' must address the issues of exporters, manufacturers and
suppliers. ' Pharmaceutical Companies in India ' offers tremendous growth
opportunities in years to come especially in the areas of Biological Sciences
Research (particularly genomics and proteomics), Clinical Research &
Development and Innovative Process Chemistry.
1.4 ) Company Profile
The pharmaceutical firms comprises of both generic and ethical medicines.
Your Firm is a Whole seller of the ethical medicines. They supply their
medicines in whole over the Bikaner like nokha, Lunkaransar etc. your firm
started in year 2005.

Mr. Naval Kishore Vyas is the original promoter of this firm. At the time of
starting of the business the firm was selling the products of the Lexus &
Cipla’s Products. Now this firm is selling the products of various companies
like Cipla, Renbaxy, Torent, Active Health Care & Lexus.

The firm has the contacts to the various Doctors, to whom the medicines are
wrote. Some of the doctors’ names are as follows:-

Dr. Pintu Nahta Heart Specialist

Dr. Sudhir Chandak Physician Bikaner
Dr. Ganshyam Swami Physician Nokha
Dr. Sarad Kalla T.B.
Dr. Brijesh Chandak ENB Department
Dr. Shyam Agarwal Children’s Specialist.

Other than these doctors the medicines of this firm is sold to many of the
Retailers of the Medicines and also to the doctors of the PBM.
Competitors :-

There are some names of the competitors of the firm who are wholesellers of
the medicines. They are :-

 Gujrat Medicose
 Shanti Medicose
 Shri Medicose
 Annapurna Medicose
 Delux Medicose
 Punjab Medicose
 City Drug House

1.3) Vision & Mission

Life Care Medicos roots in Bikaner but its actionand thoughts are of the world
standard. Life Care Medicos would study the best and implement then as per
its local requirement which would in able to emerge as a strong
Pharmaceutical group in the future. It would march ahead with the times and
would reach where there are consumers.
Staff Members of the Organization :-

Naval Kishore Vyas Owner

Kishan Kumar Vyas M.R.

Uma shankar Vyas Supplier

Ram kumar Vyas Computer Operator

Gyan Prakash Peon

 CHAPTER – 2

OBJECTIVE SCOPE

 Project Title
 Objective Of Study
 Tools & Techniques
 Opportunity & Threats
Project Title

“Financial Appraisal of Life Care Medicose Through Ratio Analysis”.

Objective of Study

 To study the financial Strengths of Company.

 To Find out Various ratios.
 To Compare the financial statements of previous & current
year.

Tools & Techniques

 Ratio Analysis
 Financial Statements of the Company.

Opportunity & Threats

  Availability of financial report of the company.
 Support of all staff members.
 Lack of practical knowledge about Pharamceutical Firms.
Research methodology
Title:-
Financial Appraisal of Life Care Medicos Through Ratio Analysis

TITLE JUSTIFICATION:
The above title is self explanatory. The study deals mainly with
studying the ratio pattern in the company with a special focus on life
care medicose.

OBJECTIVE:-

 To study the financial Strengths of Company.

 To Find out Various ratios.
 To Compare the financial statements of previous & current
year.
 To determine reasons behind opting for an insurance.
 To provide the company with information of customer's
Insurance policy if they have any and reasons for opting for
that particular policies.
 To know the most preferred policy.
  To determine customers perception towards private insurance
companies and their expectation form private insurance
companies.
 To determine the feedback on services provided by any other
insurance agent.
 To study the types of benefits provided by insurance services.
 To determine the use of Internet for valuable information and
decision-making process.

SCOPE OF THE STUDY:-

A big boom has been witnessed in Insurance Industry in recent
times. A large number of new players have entered the market and
are buying to gain market share in this rapidly improving market.
The study deals with life care medicose in focus and the various
segments that it caters to. The study then goes on to evaluate and
analyse the findings so as to present a clear picture of trends in the
medicose sector.
SIGNIFICANCE OF THE STUDY:-
This is a limited study which takes into consideration the responses
of 100 people. This data can be explorated to take in the trends
across the industry. The significance for the industry lies in studying
these trends that emerge from the study. It is a rapiddly changing
and evolving sector. People are only beginning to wake up to it’s
 vast possibilities. A study like this can attempt to guide the future of
the industry based on current trends.

SIGNIFICANE FOR THE RESEARCHER:-

To facilitate and provide all the useful informtaion of the studt, the
company, the insurance industry and also provide marketing ways,
methods of reliance life insurance.
RESEARCH DESIGN:-
 NON-PROBABILITY
 EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH
The research is primarily both exploratory as well as descriptive in
nature. The sources of information are both primary & secondary.
A well-structured questionnaire was prepared and personal
interviews were conducted to collect the customer’s perception and
buying behavior, through this questionnaire.

SAMPLING METHODOLOGY
SamplingTechnique:
Initially, a rough draft was prepared keeping in mind the objective of
the research. A pilot study was done in order to know the accuracy
of the Questionnaire. The final Questionnaire was arrived only after
certain important changes were done. Thus my sampling came out
to be judemental and convinent
Sampling Unit:
The respondants who were asked to fill out questionnaires are the
sampling units. These comprise of employees of MNCs, Govt.
Employees, Self Employeds etc.
Sample size:
The sample size was restricted to only 100, which comprised of
mainly peoples from different regions of Bikaner due to time
constraints.
Sampling Area :
The area of the research was Bikaner, Rajasthan.
 Chapter – 3

DATA ANALYSIS
AND
INTERPRITATION
Ratio Analysis:-
Introduction

The financial statements viz. in Income statement and Balance

Sheets Report what has actually happened to earnings during a specified
period and presents a summary of financial position of the company at given
point of time. The statement of retained earnings reconciles income earned
during the year and any dividends distributed with the change in retained
earnings between the start and end of the financial year under study. The
statement of changes in financial position provides a summary of funds flow
during the period of financial statements.

Ratio analysis is a very powerful analytical tool useful for

measuring performance of an organization. The ratio analysis concentrates on
the inter-relationship among the figures appearing in the aforementioned four
financial statements. The ration analysis helps the management to analyse
the past performance of the firm and to make further projections. Ratio
analysis allow interested parties like shareholders, investors , creditors,
Government and analysis to make as evaluation of certain aspects of a firm’s
performance.

Ratio analysis is a process of comparison of one figure against

another, which make a ratio, and the appraisal of the ratios to make proper
analysis about the strengths and weakness of the firm’s operations. The
calculation of ratios is a relatively easy and simple task but the proper analysis
and interpretation of the ratios can be made only by the skilled analyst. While
interpreting the financial information, the analyst has to be careful in
limitations imposed by the accounting concepts and methods of valuation.
Information of non-financial nature will also be taken into consideration before
a meaningful analysis is made. Ratio analysis is extremely helpful in providing
valuable insight into a company’s financial picture. Ratios normally pinpoint a
business’s strengths and weakness in two ways:-

 Ratio provide an easy way to compare present performance with past.

  Ratios depict the areas in which a partner business in competitively
advantaged or disadvantaged through comparing ratios to those of other
businesses of the same size within the same industry.

Categories of Ratios

The ratio analysis is made under six broad categories as follows:

 Liquidity Ratios or Short term Solvency Ratios

 Activity or Efficiency Ratio
 Profitability Ratios
 Leverages or Capital Structure Ratios
 Investment Analysis Ratios

Liquidity Ratios or Short Term Solvency Ratios

Liquidity ratios are those which are used to measure the ability of the
firm to meet its short term obligations out of short term resources. Such ratios
highlight short term solvency of the firm. It includes the following ratios:

1. Current ratios
2. Absolute Liquidity ratio, and
 3. Liquid ratio

Current Ratio

Current Ratio = Current Assets, Loans & Advances

Current Liabilities & Provisions

This ratio measures the solvency of the company in the short-

term.
Current assets are those assets which can be converted into cash within a
year. Current liabilities and provisions are those liabilities that are payable
within a year. A current ratio of 2:1 indicates a highly solvent position. A
Current ratio of 1.33: 1 is considered by banks as the minimum acceptable
level for providing working capital finance. The constituents of the current
assets are as important as the current assets themselves for evaluation of a
company’s solvency position. A very high current ratio may be due to the
pilling up of inventory, inefficiency in collection of debtors, high balances in
cash and bank accounts without proper investment.

Analysis of the Ratio:-

2008-09 2007-08
83492.28 143338.9
12926.24 70113
 = 6.45 : 1 = 2.04 : 1

RATIO STATUS

7
6
5
RATIO

4
3
2
1
0
RATIO2008-09
2007-08
YEAR

Idle Ratio is 2: 1. Hence the Liquidity of the firm’s ratios in both years is high
then idle ratio. This indicates the sound position of the company.

Liquid or Quick Ratio

Quick Ratio = Current Assets – (Stock + Prepaid Exp.)

Current Liabilities & Provisions – Bank Overdraft

Quick ratio is used as a measure of the firm’s ability to meet its current
obligations. Since bank overdraft is secured by the inventories, the other
current assets must be sufficient to meet other current liabilities. A Quick ratio
of 1 : 1 indicates highly solvent position. This ratio is called acid test ratio.
This serves as a supplement to the current ratio in analyzing liquidity.

Analysis of the Ratio :-

2008-09 2007-08

83492.28-55545.54 143338.9-45932.90
12926.24 70113

= 2.1: 1 = 1.38: 1

RATIO STATUS

2.5

2
RATIO

1.5

0.5

0
RATIO2008-09
2007-08
YEAR

Idle Ratio is 1: 1. Hence the liquidity of the firm’s ratios in both years is high
then the idle ratio.
Absolute Liquid Ratio

Absolute Liquid Ratio =Current Assets – (Stock + Prepaid Exp.+Debtor & B/R)
Current Liabilities & Provisions – Bank Overdraft

This ratio indicates the immediate cash position the firm on a particular date. It
is also known as Cash Position Ratio or Super Quick Ratio. This ratio pays
more significance to liquidity at particular time, when used with other liquidity
ratio. The ideal ratio is 1: 2 or 0.5: 1.

Analysis of the Ratio:-

2008-09 2007-08

83492.28 – (55545.54+7495.74) 143338.9 –

(45932.9+54842)
12926.24 70113

= 1.58: 1 = 0.60: 1
 RATIO STATUS

1.8
1.6
1.4

RATIO
1.2
1
0.8
0.6
0.4
0.2
0
2007-08RATIO2008-09
YEAR

Activity Ratio or Efficiency Ratio

Activity ratios measure how effectively the firm employs its resources. These
ratios are called Turnover ratios which involve comparison between the level
of sales and investment in various inventories, debtors, fixed assets, etc.
activity ratios are used to measure the speed with which various accounts are
converted into sales or cash. It includes the following ratios:-into sales or
cash. It includes the following ratios:-
1. Stock or inventory Turnover Ratio
2 .Debtor Turnover Ratio
3 .Creditor Turnover Ratio
4 Total Assets Turnover Ratio
5 Fixed Assets Turnover Ratio
6 Current Assets Turnover Ratio
7 Working Capital Turnover Ratio
8 Capital Turnover Ratio
9 Net Worth Turnover Ratio
Total Assets Turnover Ratio

Total Assets Turnover Ratio = Cost of Goods Sold/ Net Sales

Total Assets

The Ratio express the relationship between cost of goods sold and total
assets. It is also known as Total Investment Turnover Ratio. Total assets
includes net fixed assets, current assets, and realizable Intangible assets.
Fictitious assets are not included. This measures the firm’s ability to
generate sales revenue in relation to the size of the assets. The higher
ratio indicates the effective utilization of investments in assets, while lower
assets turnover ratio indicates that the assets are not being utilized
properly as compared to Sales.

Analysis of the Ratio :-

2008-09 2007-08

50394.75 70389
83492.28 154815.90

=0.60 : 1 = 0.45 : 1
 RATIO STATUS

0.7
0.6
0.5

RATIO
0.4
0.3
0.2
0.1
0
2007-08RATIO2008-09
YEAR

Both the ratios indicates the Idle capacity of the firm.

Fixed Assets Turnover Ratio

Fixed Assets Turnover Ratio= Sales or Cost of Goods Sold

Fixed Assets(Less Depreciation)

The ratio shows the relationship between net fixed assets and Cost of Goods
Sold or Sales. Long term investments are also included in fixed assets. This
ratio measures the efficiency and profit earning capacity of the firm. The high
ratio indicates intensive utilization of fixed assets, while low ratio indicates
under utilization of fixed assets.

Analysis of the Ratio :-

2008-09 2007-08

50394.75 70389
0 8477

=0 = 8.30 : 1

RATIO STATUS

9
8
7
RATIO

6
5
4
3
2
1
0
RATIO2008-09
2007-08
YEAR

The firm’s Fixed Assets have been decreased from last year so it indicates
that firm is not employing money in fixed assets.
Current Assets Turnover Ratio

Current Assets Turnover Ratio = Sales or Cost of Goods Sold

Current Assets

This ratio expresses relationship between current assets and cost of goods
sold or Sales. This ratio measures the efficiency and usefulness of current
assets. The low ratio indicates the inefficient use of current assets and less
working; high ratio indicate higher business working and efficient use of
current assets.

Analysis of the Ratio :-

2008-09 2007-08

50394.75 70389
83492.28 143338.9
.
=0.60 : 1 = 0.49 : 1
 RATIO STATUS

0.7
0.6
0.5

RATIO
0.4
0.3
0.2
0.1
0
2007-08RATIO2008-09
YEAR

The Current Assets ratio is higher than the year in 2007-08. That means the
firm is working more efficiently by using their current assets.

Working Capital Turnover Ratio

Working Capital Turnover Ratio = Cost of Goods Sold or Sales

Net Working Capital

This Ratio discloses the relationship between Net Working Capital and Cost of
Goods Sold or Sales. This Ratio indicates the efficiency with which working
capital is being used in the business. A high ratio shows efficient management
of working capital. While low ratio indicates low trading and inefficient use of
working capital.
 Analysis of the Ratio :-

2008-09 2007-08
50394.75 70389
70566.00 73225
.
= 0.71: 1 = 0.96 : 1

RATIO STATUS

1.2

1
RATIO

0.8

0.6

0.4

0.2

0
2007-08RATIO2008-09
YEAR

The Working Capital Turnover Ratio is lower then the previous one. That
means there is a little bit inefficient use of working Capital.
Capital Turnover Ratio

Capital Turnover Ratio = Cost of Goods Sold or Sales

Capital Employed

Capital Employed=
Total Assets (Excluding Fictitious Assets) – Current Liabilities

This ratio expresses relationship between capital employed and Cost of

Goods Sold or Sales. The main objects of calculating this ratio indicate higher
business in the firm.

Analysis of the Ratio :-

2008-09 2007-08

50394.75 *100 70389*100

70566.00 84702.90
.
= 71.42% = 83.10%
 RATIO STATUS

84.00%
82.00%
80.00%

RATIO
78.00%
76.00%
74.00%
72.00%
70.00%
68.00%
66.00%
64.00%
2007-08 RATIO
2008-09
YEAR

The Capital Turnover Ratio is decreased in this year. That means the firm
goes down at somewhat level.

Profitability Ratios:-

The purpose of study and analysis of profitability ratios are to help assessing
the adequacy of profits earned by the firm and also to discover whether
profitability is increasing or declining. The profitability of the firm is the net
result of a large number of policies and decisions. The profitability ratios show
the combined effects of liquidity, asset management and debt management
on operating results. Profitability ratios are measured with reference to sales,
capital employed, total assets employed shareholders funds etc. The major
profitability ratios are as follows:-
  Gross Profit Margin Ratio
 Operating Ratio
 Operating Profit Ratio
 Net Profit Ratio
 Expenses Ratio
 Return on Capital Employed
 Return on Shareholder’s fund
 Return on Equity Capital
 Return on Total Assets

Gross Profit Ratio

Gross Profit Ratio = Gross Profit * 100

Net Sales
Gross Profit = Sales – Cost of Goods Sold

This ratio clearly indicates the percentage of Gross Profit on net sales. This
ratio reveals the gross profitability of the firm. This ratio reflects the efficiency
of business and the capacity of the firm to earn profit.
Analysis of the Ratio :-

2008-09 2007-08

22098.35 *100 34122.90*100

50394.75 70389
.
= 43.85% = 48.48%

RATIO STATUS

49.00%
48.00%
47.00%
RATIO

46.00%
45.00%
44.00%
43.00%
42.00%
41.00%
2007-08 RATIO
2008-09
YEAR

The firm’s Gross Profit Percentage is decreased in current year against of the
previous year. That means there is less efficiency and capacity of the firm to
earn profit in current year.
Net profit ratio

Net profit ratio = Net Profit * 100

Net Sales
This ratio is designed to focus attention on the net profit margin arising from
business operations before interest and tax is deducted. The convention is to
express profit after tax and interest as a percentage of sales. This ratio
reflects net profit margin on the total sales after deducting all express but
before deducting interest and taxation. This ratio measures the efficiency of
operation of the company. The net profit is arrived at from gross profit after
deducting administration, selling and distribution expenses.

Analysis of the Ratio :-

2008-09 2007-08

6188.04*100 9829.90*100
50394.75 70389
.
= 12.28% = 13.97%

RATIO STATUS

14.5
14
13.5
13
Ratio

12.5
12
11.5
11
2007-08 2008-09
year
The firm’s Net Profit Percentage is decreased in current year against of the
previous year. That means there is less efficiency and capacity of the firm to
earn profit in current year.

Return on Total Assets

Return on Total Assets = = Net profit after tax *100

Total Assets

This ratio is calculated on the basis of Profit after Tax and Total Assets. This
ratio reveals the Return on Total Assets and working efficiency of the
management. As such, if this ratio is high, the profit earning capacity of the
company is considered high. But this opinion is not strong enough since the
total assets are arranged out of creditors and owner’s fund. Hence these
profits must be considered which are obtained before deducting interest to
creditors.

Analysis of the Ratio :-

2008-09 2007-08

6188.04*100 9829.90*100
 83492.28 154815.90

= 7.41% = 6.35%

RATIO STATUS

7.6
7.4
7.2
7
6.8
Ratio

6.6
6.4
6.2
6
5.8
2007-08 2008-09
year

The ratio is high than the previous year. That means the profit earning
capacity of the firm is high than the previous year, and working efficiency of
the management is also high.

Return on Capital Employed

Return on Capital Employed = = Net profit *100

Capital Employed
Capital Employed = Fixed Assets + Current Assets – Current Liabilities

It is also called return on investments. On this basis, total profitability of the

firm is tested. It is ascertained by dividing Net Profit by Capital Employed and
multiplying the quotient with 100.
Analysis of the Ratio :-

2008-09 2007-08

6188.04*100 9829.90*100
70566.04 84702.90

= 8.77% = 11.61%

RATIO STATUS

14.00%
12.00%
RATIO

10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2007-08 2008-09
YEAR

The ratio is decreased in current year against of previous year. That means
the profitability of the firm is low than the previous year.
 6. Facts and Findings
In Relligare I found
(1) Religare Securities provides ADVICE, EDUCATION, TOOLS AND EXECUTION
services for investors.
(2) Religare Securities has dedicated research teams for fundamental and technical
research
(3) employees are loyal towards the organization resulting enriched and considerable
working experience
(4) Religare Securities used modern technology for trading and investment.
(5) Relligare securities have dedicated and qualified employees.
(6) Relligare is offering best services and opportunity in every sphere.
CONCLUSION

• The idle ratio is 2:1. Hence the liquidity of the firm’s ratios in both years
is high then idle ratio. This indicates the sound position of the firm.
• The idle ratio is 1:1. Hence the liquidity of the firm’s ratios in both
years is very high then idle ratio.
• The idle ratio is 0.5:1. Hence the liquidity of the firm’s ratios in both
years is very high then idle ratio.
• Both the ratios indicate the idle capacity of the firm.
• The firm’s fixed assets have been decreased from last year so it
indicate that firm is not employing more money in fixed assets and
better utilization of funds.
• The firm’s current assets ratios have increased from last year so it
indicates the efficient use of current assets.
• The firm’s Working Capital Turnover Ratio is lower than the previous
one so it indicates the inefficient use of the Working Capital.
• The firm’s capital employed ratio is lower than previous year so it
indicates low business in this year.
• There is not more effect on the firm’s Gross Profit & Net Profit margin,
but a little decrement is noticed.
• There is somewhat decrement is noticed in both Return on total assets
ratio and Return on Capital Employed.

Suggestions:-
• Commitment should be equalized for every person.
• Improvement in the opening of De-mat & contract notice
procedure is required.
• There should be a limited number of clients under the
relationship manger. So that he can handle new as well as old
customer properly.
• Some promotional activities are required for the awareness of
the customer.
• People at young age should be encouraged to invest in stock
market.
 • Seminars should be held for providing information to
prospective and present customers.
• Commitment should be equalized for every person.
• Provide the facility of free demonstrations for all.
• Improvement in the opening of De-mat & contract notice
procedure is required.
• There should be a limited number of clients under the
relationship manger. So that he can handle new as well as old
customer properly.
• Some promotional activities are required for the awareness of
the customer.
• People at young age should be encouraged to invest in stock
market.
• Seminars should be held for providing information to
prospective and present customers.

Limitations
1. Lack of access new international literature and professional practices
2. Lack of systematic management leading to duplication
3. Lack of quality of technical equipments and accessible resources
4. Lack of promotion of self-development
5. Lack of a link between theories and practices
6. Lack of necessary knowledge and skills about new learning strategies at
all levels.
7. Lack of suitable alternative model for in-service training
8. Lack of a plan for national implementation and indication of support and
commitment By the Government.
9. Lack of time.
 BIBILOGRAPHY

Avadhani V. A., Securities Analysis and Portfolio Management, Himalaya

Publication House, Ninth Edition 2008
Cooper Donald R. and Schindler Pamela S. Business Research
Methods, Tata McGraw Hill, Ninth Edition 2006
Khan M.Y. Indian Financial System, Tata McGraw Hill, Fifth Edition
2008
Khan M.Y. and Jain P.K., Financial Management, Tata McGraw Hill,
Fourth Edition, 2005
Khatri Dhanesh Kumar, Investment Management and Security Analysis,
Macmillan India Ltd, First Edition 2006
Kothari C. R. Research Methodology, New Age International Publishers,
First Edition 2006
Krishna Swami O R and Ranganatham M, Methodology of Research in
Social Science, Himalaya Publishing House, Fifth Edition 2007
Michael Dr. V. P.Research Methodology in Management, Himalaya
Publishing House, Fifth Edition 2007
Mithani Dr. DM ,Money, Banking, International Trade and Public Finance,
Himalaya Publishing House, Sixteenth Edition 2008
Websites
• http://www.religare.com
• http:// www.religare.com /Demos/speedtrade/index.html
• http:// www.religare.com /Demos/classic/index.html
• http://www.religare.com /mutualfund.html
• http://www.RelianceMoney.com /finacialrecordshtml
Magazines

1. Economics and Business Facts for you (Feb 2009)

2. India page of HT paper (Dec. 07,2009)
3. The Business world (Mar 2009)

 Kishore, Ravi M., “Financial Management” 3rd edition,

Taxmann Allied Services Pvt. Ltd., New Delhi

 Pandey I.M. “Financial Management” 8th edition, Vikas

publishing house Pvt. Ltd., New Delhi.

 Final Accounts of Organization.