CHAPTER: 1 INTRODUCTION

1.1 Company Profile

AQUA CARE RO Water System Pvt. Ltd. established since 2007. At Plot no 1, 8, 9, Opp. Centre point at Nadida Crossing, Bardoli. They are doing business in Water Purifying. Aqua care RO technologies Pvt. Ltd. Makes Domestic, commercial & industrial RO plant. Company is having ISO: 9001 2008 certified company in design, manufacturing, marketing and after sales service. Company is also having Membership of Water Quality Association-USA & Indian water works Association, Mumbai. We are collaborating & designing of RO plant & spare part development with USA, Taiwan & Koreas water Treatment Company. Company has huge workshop with manufacturing & assembling of domestic, commercial & industrial RO plant, UV, softener and DM plant. Objective: Main objective is to manufacture and assemble the best quality Domestic commercial and industrial RO plant. Special Features: Standard quality product. Good quality product. Best after sales & service. Tailor made RO plant as per clients requirement.

Characteristic Of Aqua Care: One of the leading manufacturing osmosis systems in India. Supply the high quality components at reasonable price. Greater saving with lower maintenance and operation cost with high performance and output. Tailor made design for high recovery. High technology and instrumental facility for manufacturing all type of Water Treatment Plant. Supply of Membranes in emergency brake down. High Experience Team of Engineers, Analyst, Technicians with rich experience in the Field of water treatment. Standard Feature: Fully equipped and customized. Higher recovery rates. Lower energy consumption High Flow, Low-energy membranes Lower maintenance Compact Space saving design Individually wet tested and sanitized 1-year warranty at site Gives pure and healthy water at your home. Feature Of Reverse Osmosis Membrane: We only preferred Filmtec and Hydranautics USA, membrane for its reliability for Consistent Performance Excellent silica rejection Low operating pressure, who reduce power cost Removing 100% bacteria and virus. Excellent product water quality, who reducing 95% to 99% TDS (total Dissolve Solids) from raw water.
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After Sales And Service: We believe that the higher sales are not a step towards goal in such a business, a step is providing satisfied after sales service. We have infrastructure as per ISO 9001:2008 standards. In case of any problem, the system is put back into operation immediately without any long period of break down and production loss. Our service system is regular as: We have team of experienced Engineers, Welders, Electricians, Technicians and Filters to repair. Annual Maintenance Contract after the end of the warranty period if required. Regular Free Service after every two months (In Warranty Period)

Department Information
Personnel Department Personnel Department is also known has human resource management. HRM is concern with the people dimension in the organization. It includes recruitment selection, labor relation activities, transferpromotion, maintainers of employees records & personnel data, safety measure. Labor welfare Measure: Tea is served twice a day. Lunch time is not fixed but it is of 1 hr. Advance is paid to worker as per their need. Company provides group insurance for the safety. Company provides facility for picking up n dropping employees at their home. One facility like bus facility. Loan facility is provided to the employees having more than five years of experiences.
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 Maintenance of employee Records & Personnel Data: There are two of record of personnel data is maintained: 1) Resume file: o Resume o Appointment o Salary slip o Attendance/ overtime sheet preparation In this file resume of employee is maintained. Letter is also attached with the resume. 2) Report file: Monthly report of the task completion. This file is very much important at the time performance appraisal. Every skilled worker of the company is bound to gives report of his work to his senior. The senior send the monthly report to the human resource manager. The HRM decides about the promotion, demotion and increment action on the basis of this report. Safety Measure: First aid equipment Helmets Cell phones Bikes License to technicians Marketing Department Marketing can be defined as the aim of marketing is to identify customer needs and to meet those needs so well that the product almost sells it self.

Marketing is the system of activities. It is designed to plan, price, promote and distribute any goods and services. Marketing activities are taken place where goods and services are offered for sell. Reporting System: Marketing manager takes the daily report from both assistant and that manager has to report to managing director. As per the following format the daily report is prepared. Daily report card:

Organization:

Name:

Date:

Department:

A part from that weekly and monthly evaluation of each activity. Pricing Policy: The price is fixed as per the Market Rate and condition. They considering all the factors and fixes the prices which remain fixed. All the order same type of industry has to follow this price. In this situation, the company whose production cost is lower will get more profit and whos higher will get less profit.

Production Department Production is the process of conversion input of raw material, machinery, information, manpower etc, into output like semi finished goods and services. Production is done on the planning, organizing, directing and controlling activities of production function. Production Plan: The plan is started with the market demand and dealers. The information of their demand is collect by marketing staff. And after that as per this order production staff has to follow the rest. According to that demand, the production is made. If customer or dealer want to continue the contract for one month than as per that contract production is run. Company gets order through telephone.

 Production Process:

Finance Department: Finance is regarded as the lifeblood of a business organization. Financial management is concerned with the efficient use of an important economic resource. That means how to manage whole capital fund of an organization. Where, when and how to utilize the capital of an organization that maximum profit could be earn. Hierarchy Of Finance Department:

Activities: Budgeting and Planning Accounting Prepare balance sheet and annual general report Working capital management Maintain debt. / Equity ratio Providing funds to different department

 Computer Software: TALLY 7.2 software is used to assist financial data and also it is used for accounting data. This software is providing so many features for the maintain a financial and accounting data. Sources of Fund: For working capital management, they are using the following two sources of funds that are: Loan from Bank Retain Earnings Partner personal Investment Bank Cash Credit facilities Unsecured loan Relationship with other Department: Finance management is an important part of the overall management, and is not independent areas, it depend to all other various department of the company such as personnel, production, marketing etc. In other department purchase, storage, dispatch etc. department is also included and they also required finance for their various activities. Relationship with personnel Department: In personnel department finance is useful in the form of wages, salaries, perquisites, allowances, bonus etc. The personnel manager and finance manager has jointly take the decision about the scale of the organization; they also decide that how extra benefits to be provided to them. Relationship with Production Department: The production manager has to be interlinked with each other and they take joint decision related to make or purchase decision about plant expansion, repair and maintenance of machinery etc. the finance manager helps to minimize production costs, cash flow, storage cost, inventory management etc.

 Relationship with marketing Department: Finance is also linked with marketing department because finance is needed for every step of marketing. In finance capital budgeting involves planning the availability, controlling of long term investment funds for promoting product through advertisement , selling, giving free samples , the finance is first aspects to be takes care. At the time of deciding cash discount on different quantity, both finance and marketing manager sitting together. Accounting policies: Fixed assets are stated at cost of acquisition or purchase, including cost of improvement which substantially increases the life of assets. Cost of installation is also capitalized. Depreciation is provided on straight line method on assets acquired. Valuation of assets: o Finish goods: cost or realizations value whichever is lower. o Raw material: at cost o Goods in transit: at material cost

1.2 Product Profile

1. Name Of The Product: WATER TREATMENT RO PLANT. 2. Sales Volume: Here sales volume is based on small scale. 3. Product Line: Firm is using product line that is making product related to 1 channel. 4. Types Of Product: Four types of product a) Domestic
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b) Commercial c) Industrial Ro plant d) Cooler with RO 5. Raw Material: a) Membrane b) Membrane housing c) Filter d) Filter housing e) Pump f) Motor g) Cabinet 6. Major Customer: The product mostly purchase by following Colleges and school Resident areas Hospital 7. Method Doing Production: Straight line 8. Other Related Features Of Product: Making small range of Domestic RO plant for home use. Making medium range of Domestic Ro plant for office, hotel, Apartment, Temple, Mosque, Bus station, Railway station, Airport etc. Making High range of RO plant, Softener & DM plant for commercial & industrial use. Our all components filter & filters, Vessels and other parts are food grade certified components.

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1.3 About Topic

Ratio Analysis
Introduction Of Ratio Analysis:

An integral aspect of fundamental analysis involves performing what many would call ratio analysis. This involves calculating a number of different industry standard ratios and comparing them to various benchmarks. The benchmarks can be the ratios of other competitors, industry average ratios, or industry rules-of-thumb. Theres no set procedure for performing ratio analysis because it all depends on the type of company youre analyzing certain industries have industry specific ratios. Regardless, this article will give you an overview of some of the standard ratios and what they may tell us about a company. Four categories used to evaluate the different facets of a companys performance and overall condition: liquidity, Profitability, leverage, and efficiency ratio. Liquidity Ratios: Being liquid is same as being able to pay your bills when they become due. Current Ratio The Current Ratio is the perhaps best-known measure of a companys liquidity.

Current Ratio

Current assets Current liabilitie s

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This ratio gives you a sense of the companys abilities to pay its short-term liabilities. A value of less than 1 indicates that the company may have trouble meeting its short-term obligations and could be facing a liquidity crisis. As a general rule-of-thumb look for companies with a current ratio of 2 or more. Quick Ratio The Quick Ratio is a more stringent measure of a companys short-term liquidity position.
Quick Ratio Cash Marketable Securities Accounts Receivable Current liabilitie s

Like the current ratio, its generally better to have a high quick ratio. Both ratios measure the same thing, but the quick ratio ignores inventory and other assets included in Current Assets that may not be all that liquid, and thus may not be easily sold to meet short-term obligations. Look for companies with ratios of 1 or more. One thing to note is that while its favorable to have high current and quick ratios, ratios that are too high could indicate that a company isnt being efficient and that its just sitting on a hoard of cash or inventory. Cash Ratio
Cash Ratio Cash and bank balance Current liabilitie s

This ratio includes only cash. Profitability Ratios: Profitability Ratios measure how effectively a firms management is generating profits on sales, total assets, and stock holders equity.

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Profit Margin Ratio

Profit Margin Ratio Net income Sales

Generally, the higher is the better. This ratio measures how profitable the firms sales are after all expenses, including taxes and interest are deducted. Return on Assets Ratio
Return on Assets Netincome interest Total assets

Generally, the higher is the better. This ratio measures how much each dollar invested by the firm earns at the end of the year. Return on Equity Ratio

Re turn on Equity

Net income Equity

Generally, the higher is the better. This ratio measures how much each dollar invested by the shareholders earns at the end of the year. Leverage Ratios: Financial Leverage ratios are an indication of the amount of debt the company is using and how capable is the firm to pay off its debt. The more leveraged the firm, the more risky it is. Long-term debt ratio:

Long term debt ratio

Long term debt Long term debt Equity

This ratio is the percentage of long-term debt to the total capital of the
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firm. Long-term debt -to-equity ratio:

Long term debt to equity

Long term debt Equity

This is the ratio of debt financing to equity financing. Debt ratio:

Debt Ratio

Long term debt Total capital employed

This is the ratio of total debt to equity financing. Efficiency Ratios These ratios indicate how efficient the firm is in using its assets by comparing the asset value to the revenue these assets are producing. Total Asset Turnover Ratio
Total Asset Turnover Ratio Sales Total assets

Generally, the higher is the better. Assets turnover ratio is a measurement of how well the firm is utilizing its total assets (i.e. fixed and current assets) to produce sales. Fixed Assets Turnover Ratio
Fixed Assets Turnover Ratio Sales Net fixed assets

Fixed assets turnover ratio is a measurement of how well the firm is utilizing its fixed assets (i.e. property, plant, equipment and intangibles) to produce sales.

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Inventory Turnover Ratio: Inventory Turnover measures how efficient the firm is in processing inventory and inventory management. It measures how lean the firm runs with respect to inventory and how quickly it can sell its inventory.
Inventory Turnover Ratio Sales inventory

Generally, turnover ratios that are closest to the industry norm are ideal. Inventory turnover ratios that are too low may indicate that the firm has too much capital tied up in inventory and the inventory may be obsolete. A ratio that is too low, on the other hand, may suggest the firm has inadequate stock on hand to meet sales. Note: average inventory in this case would just be the average of the inventory balances shown on the current periods and last periods balance sheets.

1.4 Literature Review

1) Financial Analysis of National Grid Group Plc The objective of paper was to understand the future aspect of investment in the National grid group with the help of ratio analysis of balance sheet and profit and loss account for last two years. Many ratios were calculated like Investment Ratio, P/E Ratio, Gearing Ratio, Liquidity Ratio and many more to understand the position of the company. The findings that came out with the help of trend ratio analysis were that the researcher came to know about the pitfalls of payout ratio. The suggestions were to decrease the payout ratio and increase the retained earnings, which would help the company to increase the wealth of the share holders.
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The main research gap of this study is that the researcher has not compared the ratios of the company with other firms. And the other drawback is that he has not compared with the industry average. 2) Financial Statement Analysis of ICICI Bank Ltd. The comparative study was done by Rupesh Nahata and group considering the financial years 2008-09 and 2009-10 of ICICI Bank Ltd. The objective of the study was to compare the financial statements of the above financial years and forecast future financial conditions and results. The tool used in this research study was ratio analysis. The findings by the study were in almost all the ratios, the bank is in a better position than it was in the last year. And the research gap is that researcher has not given any suggestions on their findings. As I am also working on almost the same topic this research tools would serve useful to me in my research work. 3) Martin Manufacturing Company The research work was done by the company martin manufacturing company. The period taken into consideration was 2001 2003. The objective of the study was to know the companys position in the overall industry by comparing the past data with the industry average. The tool used in this research was ratio analysis. According to the study liquidity and profitability ratios of the firm are better than the industry average. But activity, marketability and debt ratios are not showing a good result as compared to the industry average. From the research, one can say that overall the company fails to display financial stability via its historical ratios. 4) Evaluating Financial Performance of GTE Telephone Co. The study was done by The Financial World for GTE Telephone co. The objective of this research was to use of financial ratios to assess the operating health of GTE Telephone Company with its competitors. The study
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was done for the year 1994. The tool that was used here was inter firm ratio analysis. The analysis on the GTEs continuous profitable growth and companys operating health is fair and accurate. From the article, it looks like GTE is positioning itself to prosper in deregulated world. The industry growth rate is 30% and GTEs growth rate is 25%, so still there is a room for betterment. 5) Cash Flows: Another Approach to Ratio Analysis. The study was done by Don E. Giacomino, David E. Mielke. The objective of the study was to find new ways to interpret the ratios by not using balance sheet and profit and loss account rather using cash flows statements; Cashflow-based ratios are useful in evaluating a company's financial strength and profitability. The tool used was ratio analysis on accrued cash flow. The findings from the study was Relative performance evaluation is one important use of cash flow ratios, which can be viewed in terms of sufficiency and efficiency. Another finding from cash flows ratio was how much effect is there on cash flow when new machinery is bought against the amortization funds, lesser the effect company is considered to be more efficient. This is a new way of ratio analysis which can be useful in companies.

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CHAPTER: 2. RESEARCH METHODOLOGY

2.1 Research Topic:
To study the Financial Performance of AQUA CARE RO Water system Pvt. Ltd by ratio analysis.

2.2 Research Objective:

2.2.1 Primary Objective To analyze the AQUA CARE RO Water system Pvt. Ltd. by using ratio analysis for three years. 2.2.2 Secondary Objectives: To analyze the liquidity of the company To study the assets turnover of the company To know the profitability of the company To study the financial leverage of the company.

2.3 Research Design:

The research design is the plan structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance. Here in this particular topic of Ratio Analysis the liquidity of the company, profitability of the company, its market performance, and about its financial ratios. So the research design is used in this topic is descriptive research design.

2.4 Data Collection Method:

The main thing in the research is the method by which the data is collected and that is known as data collection method. There are mainly two methods by which the data is collected. Here in this analysis I want to use secondary data collection.

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Secondary data is gathered through company the previous project reports. Through this source I will gather the data about the company history and its background and the detail about the different departments.

2.5 Period of the Study:

This study is based on secondary data, which have been obtained from published sources i.e. Annual report for the period of Three years (2008-09, 2009-10 and 2010-11). The collected data has been analyzed with the help of ratio analysis.

2.6 Source of Data:

There are two types of data, primary data and secondary data. The data which is freshly collected by the researcher for some particular research is known as primary data. The data which is already been collected by some other researcher for some other study and now is been used for some other research it is called secondary data. Secondary data can be collected through two source they are internal source and external source. In this study we are going to use secondary data. Here, in this study secondary data will be used which would be from internal as well as from external source. The annual reports, i.e. balance sheet and profit and loss accounts of the firm will be collected from internal source. The competitors balance sheet and profit and loss account will be collected from external source, mainly through the internet. Moreover some reference books have helped to clear my basic theoretical knowledge.

2.7 Tools Used For Analysis:

Analysis of Financial Statements is done in two parts: Ratio Analysis of AQUA CARE RO Water system Pvt. Ltd. for three years from 2007-2008, 2008-09 and 2009-10 including the following ratios: Current Ratio Assets Turnover Ratio
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 Return on Equity Debt Equity Ratio Return on Assets (ROA) Profit Margin Ratio Quick Ratio Cash Ratio 2.8 Limitations of the Study: Although I got an opportunity of working with AQUA CARE RO Water system Pvt. Ltd., but it was not easy to gain information in each and every area. And due to shortage of time, it was not able to cover all the operations. But brief information is provided for the same. Due to unavailability of all data, the research could not be done on a detailed basis. This study is limited to three years. The study is restricted to the application of ratio analysis. The data of this study has been primarily taken from published annual reports only.

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CHAPTER: 3 Data Analysis & Interpretation

Liquidity Ratios:
Current Ratio:

Cash Ratio

Cash and bank balance Current liabilitie s

Table No-1 Year 2007-2008 2008-2009 2009-2010 Current Assets 8541478 13171886 25526421 Current Liabilities 2759135 2345610 11345499 Current Ratio 3.095708619 5.615548194 2.249916112

Graph:

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Interpretation:From chart it can show that in the year 2007-08 ratio is 3.09 which shows that firm has sufficient assets to meet the day to day requirements. It increases in the year 2008-09 which also shows efficiency of the firm but in the recent year 2009-10 ratio is decreases but able to idle ratio and in year 2009-10 firm has 2.25% which shows good position.
Quick Ratio:

Quick Ratio

Cash Marketable Securities Accounts Receivable Current liabilitie s

Table No-2 Account Year 2007-2008 2008-2009 2009-2010 Graph: Cash 208742 87614 420000 Receivable 1291541 4814779 16342227 Current Liabilities 2759135 2345610 11345499 Total 1500283 4902393 Ratio 0.543751 2.090029

16762227 1.477434

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Interpretation:Quick Ratio is that which indicates that firm can pay it current asset from current liabilities. It is good position for firm to be in the year 2007-08 firm not able to achieve the 1% which not good for firm but afterwards firm has concentrate on its liabilities so it increases the ability in the year 2008-09 which is good. And in the year 2009-10 it decrease but firm able to achieve more than 1 which is good.
Cash Ratio:

Cash Ratio

Cash and bank balance Current liabilitie s

Table No-3 Current Year 2007-2008 2008-2009 2009-2010 Cash 208742 87614 420000 Liabilities 2759135 2345610 11345499 Ratio 0.07565487 0.037352331 0.037019086

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Graph:

Interpretation:Cash Ratio indicates that all respective years have low cash ratio because the firm has dangerous zone if not have the 1 or more than 1% Ratio So firm need to be careful about its cash management.

Efficiency Ratios: Asset Turn over Ratio:

Total Asset Turnover Ratio Sales Total assets

Table No-4 Average Total Year 2007-2008 2008-2009 2009-2010 Sales 4550026 13629065 23819327 Assets 9713131 14262214 28360267 Asset Turnover Ratio 0.468440712 0.955606542 0.839883736

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Graph:

Interpretation:This ratio simply compares the turnover with the asset that the business has used to generate that turnover. In the year 2008-09 the ratio is increase than 2007-08. It means firm has increases its turnover in 2008-09 but in the year 2009-10 it deceases which means companys turnover is less than 2008-09. It may affect the firms profit. Fixed Asset Turn over Ratio:
Fixed Assets Turnover Ratio Sales Net fixed assets

Table No-5 Average Fixed Year Sales Assets 1171653 1090328 2833846 Fixed Assets Turnover Ratio 3.883424529 12.4999679 8.405300429
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2007-2008 4550026 2008-2009 13629065 2009-2010 23819327

Graph:

Interpretation:This ratio compares the sales with the fixed assets that the business has used to generate that sale. In the year 2008-09 ratio is increases from 200708 which is good. But in 2009-10 it decreases which may be not good for the firm. Inventory Turn over Ratio:

Inventory Turnover Ratio

Table No-6 Average Year 2007-2008 2008-2009 2009-2010 Cost Of Sales 863123 8780377 19055461 Inventory 5616930 7252604 7680796

Sales inventory

Inventory Turnover Ratio 0.153664546 1.21065165 2.48092268

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Graph:

Interpretation:This ratio shows that a low turnover implies poor sales and therefore excess inventory. But here sales are increase in all three years with increase in inventory so it is good for the company.

Profitability Ratios:
Profit Margin Ratio:
Profit Margin Ratio Net income Sales

Table No-7 Profit Margin Year 2007-2008 2008-2009 2009-2010 Net Income 4559088 13630063 23819327 Sales 4550026 13629065 23819327 Ratio 1.001991637 1.000073226 1

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Graph:

Interpretation:Net profit margin ratio tells us the amount of net profit per rupee of turnover a business has earned. The net profit margin is the ratio of net profits to sales. This is the best indicator of the companys efficiency in that net profit takes in to the consideration all expenses of the company. The firm is enabling the normal margin of profit in all the three years it remains constant but if it increases in future, it will be good for firm. But it is also good that firm is able to maintain its margin. Return on Equity Ratio:

Re turn on Equity

Net income Equity

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Table No-8 Return On Equity Year 2007-2008 2008-2009 2009-2010 Net Income 4559088 13630063 23819327 Average Equity 7502430 8940729 10000000 Ratio 0.607681511 1.524491236 2.3819327

Graph

Interpretation:This ratio shoes the return on the eqity to shareholder of the company. From the year 2007 firm is able to return more in increasing proportion. It is beneficial to shareholder of the company. This is a good sign for the equity shareholders and for company.

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Return on Asset Ratio:

Return on Assets Netincome interest Total assets

Table No-9 Total Year 2007-2008 2008-2009 2009-2010 Net Income Interest 4550026 13629065 23819327 9062 998 0 Total 4559088 13630063 23819327 Asset 9713131 14262214 28360267 Return On Asset Ratio 0.469373676 0.955676517 0.839883736

Graph:

Interpretation:It shows the return of the firm on its assets. Firm is able to use its assets in well manner because from the year 2007 till 2010, firm has increased its return on assets. From that it can say that firm using the efficient assets. This is favorable to the firm.

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LEVERAGE RATIOS: Long term Debt to Equity Ratio:

Long term debt to equity

Long term debt Equity

Table No-10 Long Term Debt Year 2007-2008 2008-2009 2009-2010 Long Term Debt 1291541 4814779 16342227 Equity 7502430 8940729 10000000 To Equity Ratio 0.17214969 0.538521971 1.6342227

Graph:

Interpretation:It indicates the company is aggressive in financing their growth by using long term debt in this or not. In the year 2007 and 2008 firm is not able to
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finance it by using debt more than equity but in the year 2009 it successful because it has ratio more than 1. And this situation is good for firm to achieve long term debt financing. Long term Debt Ratio:

Long term debt ratio

Table-11

Long term debt Long term debt Equity

Long term year 2007-2008 2008-2009 2009-2010 debt 1291541 4814779 16342227

Long term debt +equity 8793971 13755508 16442227 Long term debt ratio 0.146866643 0.350025532 0.993918099

Graph:

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Interpretation:The long term debt ratio is used in conjunction with other measures of financial health; the debt ratio can help the investors to determine a companys level of risk. If the debt ratio is greater than 1 then the company has more debt than the assets an if the ratio is less than 1 then the company has more assets than debt. The firm has not the ratio in any of three year that is 2007, 2008 and 2009. It means the firm has not more assets than its debt. And it is for company that it need not to sell any assets for the coverage of its debt. Debt Ratio:

Debt Ratio
Table No-12 Long Term Debt 250000 500000 5681356

Long term debt Total capital employed

Year 2007-2008 2008-2009 2009-2010

Total Capital Employed 7502430 8940729 10000000

Debt Ratio 0.033322537 0.055923851 0.5681356

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Graph:

Interpretation:It shows the debt of company. It is the total of firms long term and short term debt. The firm has good position if it able to maintain minimum ratio. Even though debt to equity is good and overall performance of the firm total debt are increasing year by year.

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CHAPTER: 4 FINDINGS
By analyzing the different liquidity ratios ,I have found that the overall liquidity of the company is lower because the different ratios shows that the company has not the sufficient current assets to pay its current liabilities. From Asset turnover ratio I found that the companys receivable turnover is low and the accounts receivables are inefficient. The average collection period of the company is very high so that the company is not able to generate revenue quickly which is a lacking point for the company. From leverage ratio I have found that the companys debt is not more than its assets and the debt of the company is not higher than the equity in the year 2010 so in this particular year the return of the shareholders is not affected. The gross profit margin in all the three year is 1 which is not more sufficient to the firm so that the profitability of the company is low. 90% from the total sales based on the credit so, its lake in liquidity for the company because they can not recover cash early. The net profit margin ratio of the company in the year 2009-2010 is very low net profit margin earned by the company per rupee of the turnover is that almost 1% and in the year 2010 they faces loss so there is no net profit margin. So looking at the net profit margin ratios of all the three years the efficiency in terms of net profit margin of the company is low. The cash to current assets ratio shows decreasing trends 0.03 in 2008-09 compare 0.07 in 2007-08.

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CHAPTER: 5 CONCLUSIONS
From the overall analyses I can say that the company risk is high in terms of the liquidity, low profitability prevailing in the company and the high proportion of debt in the capital structure which affects the return of the shareholders. Finally it can say that firm is able to earn profit and it has managed its liquidity, efficiency, profitability and leverage position but it has to focus on cash management for future.

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CHAPTER: 6 RECOMMEDATIONS
Firm can increase its investment in short term sources for cash requirement. Fixed assets are well managed but for current assets firm should take action so that turn over can increases. The another main thing that I would like to recommend to the company that in the capital structure of the company shareholder is not adversely affected. Firm can reinvest its reserves and surplus in higher return sources. From the analysis and interpretation it can conclude that firm has good liquidity position expect the proper management of cash so firm need to focus more on cash position rather assets. Firms efficiencies are good in fixed assets. Also the inventory management is good but firm need to focus on its turnover. it can be say Firms profitability is good from all its profitability ratios. It is favorable to firm. Also the firms leverage position is good because it has maintained the debt, equity to debt and also the total debt. should use such proportion of debt and the equity so that the return of the

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BIBLIOGRAPHY
Books: I M. Pandey (Eight edition). Financial management. Vikas Publishing House Pvt Ltd. Pandian p. (2008) Security analysis and portfolio management, Vikas Publishing House Pvt Ltd. (Page no. 237-243) Companys Financial Statements: Balance sheet Profit and loss a/c Sales records Sites: www.windwell.com www.investopedia.com/terms/v/valueinvesting.asp/liquidator.asp www.search/searchresults.asp www.wickepedia.org www.wickepedia.org/wiki/financial/ratios/beginnersinvest.about.com / www.financialratio.htm

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