A Project Report on Ratio Analysis and Interpretation of AB Leasing & Finance Limited Jabalpur

In the partial fulfillment of the requirement of degree of MASTER OF BUSINESS ADMINISTRATION Submitted to Rani Durgavati Vishwa Vidhyalaya, Jabalpur

Submitted by
Shubhi Choudhary MBA 3rd Semester Gyan Ganga College Of Technology

INTRODUCTION

AB Leasing and finance limited is basically Central India based Company. It established its branch in the year 1998 in Jabalpur. It has its registered head office situated in Bhopal (Madhya Pradesh) and its two other branches situated in Jabalpur and Indore. It engaged in the business of delivering credit.

COMPANY PROFILE

AB leasing & finance limited is a non banking finance company. It is registered with RBI under companys act 1956. It is non depository making company. This company was registered in the year 1996. Company started its operations from Bhopal (Madhya Pradesh). In 1998 Mr. AKASH JAIN established its branch in Jabalpur (Madhya Pradesh) and started its operations into two wheeler finance. In 2000 company established its one more branch in Indore (Madhya Pradesh). In 2005 company started to give personal loans. From 1998 to 2005 company also provided loan for consumer durables also. In 2008 company started to provide secured loans. At present company deals with only secured loans and it does not provide unsecured loans.

VISION OF ABLF
AB leasing sees itself in the first position amongst all the leasing company. It will expand its branches all across the world.

MISSION OF ABLF

To satisfy the consumer needs. To introduce new schemes for the benefit of the public. To reach out to the maximum people in need. The company is planning to expand its business in Chhattisgarh. (C.G.)

VARIOUS SCHEMES OF AB LEASING & FINANCE LIMITED

AB Leasing & Finance Limited deals with five types of loans

Personal Loans. (secured only) Two Wheeler Loans. Easy Loan. Loan against Property Scheme (LAP).

Warehouse Loan.

RATIO ANALYSIS

The ratio analysis is one of the most powerful tools of financial analysis. It is the process of establishing and interpreting various ratios. It is with the help of ratios financial statements can be analyzed and decisions can be made. A ratio is a simple arithmetic expression of the relationship of one number to another.

CLASSIFICATION OF RATIO:Liquidity ratio. Activity/efficiency ratio. Profitability ratio.

Solvency ratio.

DATA ANALYSIS & INTERPRETATION

LIQUIDITY RATIO:-Liquidity ratio shows an increasing trend which is due to the high proportion of current assets, but due to too high proportion in liquidity ratio it can be conclude that company is not effectively using its cash funds. ACTIVITY RATIO:-In Activity ratios debtors turnover ratios shows an increasing trend due to increase in total sales from 83 lacks to 90 lacks in 2010 and companys debtors also has been reduced from 3.55 in 2009 to 45 lacks in 2010 which indicate company is trying to manage his debtors and in current assets turnover ratios there is an increasing trend from 0.20 to 0.68 due to increase in sales from 83 lacks to 90 lacks which indicates there is an effective utilization of current assets in the company.

PROFITABILITY RATIO:-There has been decreasing trend in profitability ratio because company is fail to recover all operating expenses in 2010. SOLVENCY RATIO:- There is no major change in proprietary ratio which means in the long run the financial position of the firm would improve.

SUGGESTIONS & RECOMMENDATIONS

The limit of loan amount which the company provides to the customer should be increased. Loans and advances which are granted by the company should be at fixed rate because it is causing blockage of funds due to an uneven trend of granting loan. Company should utilize its cash funds effectively because liquidity ratio is too high. The company should give training to their employees on regular basis which will upgrade their level. The areas where the company is providing its loan facilities should be increased so that more people may get benefit. Company should allocate its cash properly, it may first pay off its staff related liabilities and other liabilities. The company is paying off its loan on regular basis which is not good for the current position of ABLF.

CONCLUSION
The procedure involved in sanctioning of loans by ABLF is very simple and easy in this process less documents are required. It basically provides a less amount of loan so majority of people interested in taking loan belong to middle and lower class. The interest rate is not fixed; company charges different rates according to loan amount. The time period for which the loan is provided is been set according to the wish and capability of the customer to repay the loan. And company is also effectively using its debtors and current assets which indicate company has strong financial position.