Financial Performance Aiswarya Beverages

transcript

PROJECT REPORT

STUDY ON FINANCIAL PERFORMANCE OF AISWARYA

BEVERAGES COMPANY CHUMATHRA THIRUVALLA

Submitted by

VISHNU KUMAR KA REG NO – 14P35H0212

Under the Guidance of

Mrs. RICHA PATHAK

JUNIOR ASSISTANT PROFESSOR

NEW HORIZON COLLEGE

KA11B131

MASTER OF BUSINESS ADMINISTRATION (MBA)

BHARATHIAR UNIVERSITY

BANGALORE

2014 – 2016

STUDENT DECLARATION

I hereby declare that the project entitled “STUDY ON FINANCIAL PERFORMANCE

OF AISWARYA BEVERAGES COMPANY CHUMATHRA THIRUVALLA”

undertaken in partial fulfilment of Master of Business Administration (MBA) programme

of Bharathiar University under the supervision and guidance of Mrs.RICHA

PATHAKfaculty guide of New Horizon College is an authentic work done by me and I

have not produced this work for any other purpose to any other University or Board.

Place: Bangalore VISHNU KUMAR K A

Date: Reg No: 14P35H0212

NEW HORIZON COLLEGE

BANGALORE

GUIDE CERTIFICATE

This is to certify that the project report entitled. “STUDY ON FINANCIAL

PERFORMANCE OF AISWARYA BEVERAGES COMPANY CHUMATHRA

THIRUVALLA” submitted by Vishnu Kumar K A bearing registration number

14P35H0212 to Bharathiar University for the partial fulfilment of Master of Business

Administration is an overcome of genuine research work carried under the guidance and it

has been submitted for the award any other degree, diploma or prize

Place: Bangalore Signature

Date: ( RICHA PATHAK )

NEW HORIZON COLLEGE

BANGALORE

PRINCIPAL’S CERTIFICATE

This is to certify that VISHNU KUMAR K A bearing registration number 14P35H0212 is

a bonafide student of this college the project work entitled. “STUDY ON FINANCIAL

PERFORMANCE OF AISWARYA BEVERAGES COMPANY CHUMATHRA

THIRUVALLA” is a bonafide work carried out by him in partial fulfilment of the

requirement of Master Degree in Business Administration of Bharathiar University during

the year 2014-2016

Place: Bangalore Signature

Date: ( Dr. R. BODHISATVAN

ACKNOWLEDGEMENT

I would like to take opportunity to express my sincere gratitude towards GOD for

successful completion of my project.

I extend my sincere gratitude to DR. R BOTHISATVAN, Principal of NEW HORIZON

COLLEGE who gave me an opportunity to conduct the research.

I would like to thank Mr. EMMANUEL MATHEW Managing Director of AISWARYA

BEVERAGES who gave the permission for doing the project.

I wish to extend my sincere gratitude to Mr. ARUN RAGHU BABU ProgrammeCo-

ordinator (MBA). I also extend my gratitude to my guide Mrs. RICHA PATHAK Asst.

professor of New Horizon College who gave a valuable guidance and generous encourage

to me.

I make use of this opportunity to thank my relatives and dear friends for their support in

completing this work.

VISHNU KUMAR K A

CONTENTS

CHAPTER TITLE PAGE

CHAPTER I INTRODUCTION

1.1 FINANCIAL MANAGEMENT

1.2 FINANCIAL PERFORMANCE

1.3 NEED FOR STUDY

1.4 STEPS TO IMPROVE FINANCIAL

PERFORMANCE

1.5 RATIO ANALYSIS

CHAPTER II INDUSTRY AND COMPANY PROFILE

2.1 INDUSTRY PROFILE

2.1.1 HISTORY OF BOTTLED WATER

2.2 COMPANY PROFILE

CHAPTER III REVIEW OF LITERATURE 27-29

CHAPTER IV RESEARCH DESIGN 4.1 RESEARCH METHODOLOGY

4.1.1 SOURCE OF DATA

4.1.2 TOOLS USED FOR THE ANALYSIS

4.2 OBJECTIVE OF THE STUDY

4.3 SCOPE OF THE STUDY

4.4 PERIOD OF STUDY

4.5 LIMITATIONS OF THE STUDY

CHAPTER V DATA ANALYSIS AND INTERPRETATION 35-62

CHAPTER VI FINDINGS, SUGGESTIONS AND

CONCLUSION

6.1 FINDINGS

6.2 SUGGESTIONS

6.3 CONCLUSION

BIBLIOGRAPHY

ANNEXURE

LIST OF TABLE

Table No Title Page No

5.1 RATIO ANALYSIS 36-48

5.1.1 DEBT EQUITY RATIO 36

5.1.2 FIXED ASSET NET WORTH RATIO 38

5.1.3 FIXED ASSET TURN OVER RATIO 40

5.1.4 NET PROFIT RATIO 42

5.1.5 PROPRIETARY RATIO 44

5.1.6 CURRENT ASSET TURNOVER RATIO 46

5.1.7 TOTAL ASSET TO DEBT RATIO 48

5.2 COMPARATIVE BALANCE SHEET ANALYSIS 51-57

5.2.1 COMPARATIVE BALANCE SHEET OF THE YEAR 2011-

5.3 COMPETITOR FINANCIAL COMPARISON 61

5.3.1 BALANCESHEET COMPARISON OF THE YEAR 2014-2015 61

LIST OF FIGURE

Figure No Title Page No

5.1 RATIO ANALYSIS 37-49

5.1.1 DEBT EQUITY RATIO 37

5.1.2 FIXED ASSET NET WORTH RATIO 39

5.1.3 FIXED ASSET TURN OVER RATIO 41

5.1.4 NET PROFIT RATIO 43

5.1.5 PROPRIETARY RATIO 45

5.1.6 CURRENT ASSET TURNOVER RATIO 47

5.1.7 TOTAL ASSET TO DEBT RATIO 49

CHAPRER 1

INTRODUCTION

1.1 FINANCIAL MANAGEMENT

Finance is the life blood of business. It is rightly termed as the science of money.

Finance is very essential for the smooth running of a business. Finance controls the

policies, activities and decisions of every business.

“Finance is that the business activity which is concerned with the organisation and

conversation of capital funds in meeting financial needs and overall objectives of a

business enterprise”-Wheeler

Financial management is that managerial activity which is concerned with the

planning and controlling of a firm financial reserve. Financial management as an

academic discipline has undergone fundamental changes as regards its scope and

coverage. In the early years of its revolution it was treated synonymously with the raising

of funds. In the current literature pertaining to this growing academic discipline, a broader

scope so as to include in addition to procurement of funds, efficient use of resources is

universally recognized. Financial analysis can be defined as a study of relationship

between many factors as disclosed by the statement and the study of the trend of these

factors. The objective of financial analysis is the pinpointing of strength and weakness of

a business undertaking by regrouping and analysing of figures obtained from financial

statement and balance sheet by the tools and techniques of management accounting.

Financial analysis as the final step of accounting that result in the presentation of final

and the exact data that helps the business managers, creditors and investors.

1.2 FINANCIAL PERFORMANCE

The term „financial performance analysis is also known as analysis and

interpretation of financial statements‟, refers to the process of determining financial

strength and weakness of the firm by establishing strategic relationship between the items

of the balance sheet, profit and loss account and other operative data.

„Financial performance analysis is a process of evaluating the relationship

between component parts of a financial statement to obtain a better understanding of a

firm‟s position and performance.

The purpose of financial analysis is to diagnose the information contained in

financial statements so as to judge the profitability and financial soundness of the firm.

Just like a doctor examines his patient by recording his body temperature, blood pressure

etc. Before making his conclusion regarding the illness and before giving his treatment. A

financial statement analysis analyses the financial statements with various tools of

analysis commenting upon the financial health or weakness of an enterprise.

The analysis and interpretation of financial statement is essential to bring out the

mystery behind the figures in financial statements. Financial statement analysis is an

attempt to determine the significance and meaning of the financial statement data so that

forecast may be made of the future earning ability to pay interest and debt maturities and

profitability of a sound dividend policy.

Financial performance refers to the act of performing financial activity. I order to

sense, financial performance refers to the degree to which financial objectives being or

has been accomplished. It is the process of measuring the results of a firm‟s overall

financial health over a given period of time and can also be used to compare similar firms

across the same industry or to compare industries or sectors in aggregation.

Organisations play an important role all over the world. Different organisations

meet people needs by provide them products, service, or both. Due to globalisationthe

world has become a global village. This has very much helped people to get their needs.

Different firm play different roles and it has its own importance. The company which I

have selected for my financial analysis is AISWARYABEVERAGECO.

Business concern needs finance to meet their requirements in the economic world.

Any kind of business activity depends on the finance. Hence, it is called as lifeblood of

business organisations. Whether the business concerns are big or small, they need finance

to fulfil their business activities

In the modern world, all the activities are concerned with the economic activities

and very particular to earning profit through any venture or activities. The entire business

activities are directly related making profit. Hence finance may be called as capital,

investment, fund etc.., but each term is having different meaning and unique characters.

Increasing the profit is the main aim of any kind of economic activity.

Financial information is needed to predict, compare and evaluate the firm‟s

earning ability. Finance department is headed by the Finance manager.

As a business institution, it should earn maximum profits. To what extend

Aiswarya Beverage co. could perform in relation to profitability. A definite picture about

the profitability performance of this business concern is considered. Profitability is the

basic and inherent concern of any business. The present study was an attempt to evaluate

the profitability performance of Aiswarya Beverage Co.

1.3 NEED FOR STUDY

Need Of Financial Management Study to Diagnose the Information Contain in

Financial statement. So as to judge the profitability and financial position of the

Financial analyst analyses the financial statements with various Tools of analysis

before commanding upon the financial health of the firm

Significance and meaning of the financial statements

1.4 STEPS TO IMPROVE FINANCIAL PERFORMANCE

Author: Terry Peltes

Given the challenges facing physicians, successful practices must take proactive

steps to combat negative trends and improve their overall financial performance.

To improve practice operations, processes can be streamlined to reduce costs;

productivity improvements can be implemented by physicians and employees to increase

revenue; a reporting structure can be created that allows for better decision making by

physicians and employees; and a rewards system can be implemented to recognize hard-

working employees.

To determine how you can improve your medical practice's performance, consider

the following management procedures.

1) Internal Cost Reduction Strategies

Cost reduction strategies focus on reducing the internal costs generated by medical

services provided to the marketplace.

2) External Cost Reduction Strategies

These strategies include the cost of services purchased from outside consultants or

vendors.

3) Asset and Credit Management Strategies

These strategies ensure that you are getting the most value from the resources invested

in your practice.

4) Personnel Resources

When managed properly, personnel costs and productivity can have a substantial impact

on practice profitability.

5) Management Reporting

The use of timely, relevant, properly formatted reports to manage your practice cannot

be overstated. This is a crucial link between setting financial and operational goals and

managing the practice to achieve them.

6) Revenue Enhancement

Physicians can improve their financial performance by improving their ability to

negotiate favourable managed care contracts and reducing practice expenses as a

percentage of revenue.

1.5 RATIO ANALYSIS

Ratio analysis is important and widely used tool of analysis of financial statement.

It is essentially an attempt to develop meaningful relationship between individual items or

group of items in the Balance sheet or Profit and loss account. The object and utility of

ratio analysis as a technique of financial analysis is confined not only to the internal

parties but to the trade Creditors, Banks and Lending institution also.

TYPES OF RATIOS

Liquidity ratios

Leverage ratios

Activity ratios

Profitability ratios

LIQUIDITY RATIO

The liquidity refers to the maintenance of cash, bank balance and those assets,

which are easily convertible into cash in order to meet the liabilities as and when arising.

So, the ratios study the firm‟s short-term solvency and its ability to pay off the liabilities.

The important liquidity ratios are:

i. Current Ratio:-

Current ratio is the ratio of current asset and current liabilities. Current assets are assets

which can be converted into cash within one year and include cash in hand and at bank,

bills receivable, net sundry debtors, stock of raw materials, finished goods and work in

progress, prepaid expenses, outstanding and occurred incomes, and short term or

temporary investments. Current liabilities are liabilities, which are to be repaid within a

period of 1 year and include bills payable, sundry creditors, bank over drafts, and

outstanding expenses, income received in advance, proposed dividend, provision for

taxation, unclaimed dividends and short term loans and advances repayable within 1 year.

A current ratio 2:1 is considered as ideal: if a business has an undertaking with its bankers

to meet its working capital requirements short notices, a current ratio of 1 is adequate.

ii. Quick Ratios:-

Quick ratio or acid test ratio takes into consideration the liquidity level of the

components of current assets. It represents the ratio between quick current assets and

total current liabilities. A quick ratio of 1 is considered as ideal. A quick ratio of less

than 1 is indicated as inadequate liquidity of the business. A very high ratio is also not

available as funds can be profitability employed.

iii. Absolute Liquid Ratio:-

It is the ratio of absolute liquid ratio assets to quick liabilities. For calculation

purposes, it is taken as ratio of liquid assets of current liabilities. Trade investments or

marketable securities are equivalent of cash therefore; they may be included in the

computation of absolute liquid ratio.

LEVERAGE RATIO

Leverage ratio indicates the relative interest of owners and creditors in a business.

It shows the proportions of debt and equity in financing the firm‟s assets. The long term

solvency of a firm can be examined by using leverage ratio. The long term creditors like

debenture holders, financial institutions etc. are more concerned with firm‟s long term

financial strength.

There are two aspects of the long term solvency of a firm

Ability to repay the principal when due, and

Regular repayment of the interest the leverage ratios are calculated to measure the

financial rest and firm‟s abilitiesof using debt.

i. Total Debt Ratio

Total debt will include short and long term borrowing from financial institutions

debentures bonds. Capital employed will include total debt and net worth. The firm may

be interested in knowing the proportion of the interest bearing debt in the capital structure

by calculating total debt ratio. A highly debt burden firms difficulty in raising funds from

creditors and owners in future. Creditors treat the owner‟s equities as a margin of safety.

ii. Debt Equity Ratio

It reflects the relative claims of creditors and shareholders against the assets of the

business. Debt,usually, refers to long term liabilities. Equity includes preferences share

capital and reserves. The relationship describing the lenders contribution foreach refers

of the owner‟s contribution is called debt equity ratio. A high ratio shows a large share of

financing by the creditors relative to the ownersand therefore, large claim against the

assets of the firm. A low ratio implies a smaller claims of creditors. The equity indicates

the margin to satisfy the creditors, so there is no doubt, the both high and low equity

ratios are not desirable. What is needed is a ratio, which strikes a proper balance between

debt and equity. Some financial expert is that debt shout indicate current liabilities also.

However, this is not a popular. In case of preferences of share capital, it is treated as a

part of shareholder‟s fund, but if the preference shares are redeemable, they are taken as a

part of long term debt. Shareholders fund are also known as proprietors fund and it

indicates items equity share capital, reserve, and surplus. A debt equity ratio of 3:1 is

considered ideal.

iii. Fixed Asset Ratio

Capital employed = equity share capital + preference share capital + reserves + long term

liabilities – fictitious assets.

This ratio indicates the mode of financing the fixed assets. A financially well managed

company will have its fixed assets financed by long term funds. A ratio of 0.67 is

considered ideal.

iv. Interest Coverage Ratio

The interest coverage ratio is computed by dividing earnings before interests and taxed by

interest charges. This interest coverage ratio shows the number of times the interest

charges are covered by funds that are demurely available for their payment. A high ratio

is desirable but too high ratio indicate that the firm is very conservative in using debt and

that is not using credit to the debt advantage of shareholder. A lower ratio indicate

excessive use of debt or inefficiency operations. The firm should make efforts make

efforts to improve the operating efficiency or to retire debt to have comfortable coverage

ratio.

ACTIVITY RATIO

This ratio is called as efficiency ratio. Activity asset turnover ratio, measure the efficiency

of a firm managing and utilizing its assets. The higher the turnover ratio is, the more

efficiency, the management and utilisation of the assets while low turnover ratio is to

indicate the underutilization of available resources or present ideal capacity.

i. Fixed Assets Turnover Ratio

This ratio indicates extend to which the investments in fixed assets contributes towards

sales. If the ratio is compared with the previous year, it indicate whether the investment in

fixed asset has been judicious or not. The total asset turnover ratio is computed by

dividing sales by total assets.

ii. Working Capital Turnover Ratio

This ratio reflects the turnover of the firm‟s Net working capital in the course of 1 year. It

is a good measure of over trading and under trading.

Working capital = current asset – current liability

A high working capitalturnover ratio indicate efficiency utilisation of the firm‟s funds.

However, it should not result in over trading.

iii. Debtors Turnover Ratio

Debtor‟s turnover ratio express the relationship between debtors and sales

iv. Creditors Turnover Ratio

v. Inventory Turnover Ratio

CHAPTER 2

INDUSTRY AND COMPANY PROFILE

2.1 INDUSTRY PROFILE

2.1.1 HISTORY OF BOTTLED WATER

Water is essential for sustenance and multiplication of living organisms.

Whether it is unicellular Amoeba or complex human body system water is an absolute

necessity for keeping the system functioning. Humans need clean tasty and safe drinking

water free from any microorganism when he or she is thirsty and is ready to pay

substantially if need be. This is available in Pouch, Bottles and cans as per requirement of

the customers.

Bottled water is drinking water (e.g. well water, distilled water, mineral

water, or spring water) packaged in plastic or glass water bottles, Bottled water may be

carbonated or not. Sizes range from small single serving bottles to large carboys for water

coolers. Although vessels to bottle and transport water were part of the earliest human

civilizations, bottling water began in the United Kingdom with the first water bottling at

the Holy Wellin 1662. The demand for bottled water was fuelled in large part by the

resurgence in spa-going and water therapy among Europeans and American colonists in

the 17th

and 18th

centuries. The first commercially distributed water in America was

bottled and sold by Jackson‟s spa in Boston in 1767. Early drinkers of bottled spa waters

believed that the water at these mineral spring had therapeutic properties and that bathing

in or drinking the water could help treat many common ailments.

The popularity of bottled mineral water quickly leads to a market for

imitation products. Carbonated waters developed as means for approximating the natural

effervescence of spring bottled water, and in 1809 Joseph Hawkins was issued the first

U.S patent for “imitation” mineral water. As technological innovation in 19th

century

lowered the cost of making glass and improved production speed for bottling, bottled

water was able to be produced on a larger scale and the beverage grew in popularity.

Bottled water was seen by many as a safer alternative TO 19th

century municipal water

supplies that could be contaminated with pathogens like cholera and typhoid. By the

middle of the century, one America‟s most popular bottlers, Saratoga Springs, was

producing more than 7 million bottles of water annually

In the United States, the popularity of bottled water declined in the early

century, when the advent of water chlorination reduced public concerns about water

chlorination reduced public concern about water-borne diseases in municipal water

supplies. However, it remained popular in Europe, where it is spread to cafe and grocery

stores in the 2nd

half of the century. In 1977, Perrier launched a successful advertisement

campaign in the United States, heralding a rebirth in popularity for bottled water. Today,

bottled water is the second most popular commercial beverage in the United States, with

about half the domestic consumption as soft drink

RECENT TRENDS

Packaged drinking water industry has grown many folds in all the developed economics

of the world. The product is targeted especially at touring and travelling market segments.

The market also growing due to contamination/shortage of water supply in the cities. At

present the Indian market is dominated by processed water. The demand for consumption

of mineral water in India has been estimated approx. 500 million litres of pure water

bottles and the market is expected to grow at a rate of 25-35% per annum. The domestic

market of mineral water is mainly derived from the tourism sector. Further, the demand

may also be from institutional sector as well as from higher income bracket group in

urban areas

Indian Scenario

Indians currently spending about $330m a year on bottled water, analyst estimate.

The packaged water market constitutes 15 percent of the overall packaged beverage

industry, which has annual sales of at least $2.6bn, Deepak jolly spokespersons for Coca-

Cola India said.

Almost all the major international and national brands water bottles are available

in Indian market right from the malls to railway stations, bus stations, grocery stores and

even at pinwale‟s shop. Before few years bottled water, was considered as rich people‟s

choice, but now it‟s penetrated in the rural areas. . The growth and status of Indian

Bottled Industry in comparison with Western or Asian market, India is far behind in terms

of quantum, infrastructure, professionalism and standards implementation.

Water Consumption in India

India receives abundant rains. The average annual precipitation is estimated to be

4000 billion m. Only 1000 billion m/year is available as usable surface water and

ground water. At present the water consumption in India is about 750 billion m/year for

all the applications, viz agricultural, industrial, domestic and commercial. Assuming a

conservative figure of per capita water consumption of 1000 m/year, the water

availability in the country is likely to get fully stretched by the year 2010 unless

augmentation is planned right now. The consumption norm of 1000 m/year is only 10-

20% of the per capita consumption in industrialized countries. Moreover, the

geographical distribution and seasonal variation of rainfall are not uniform. There are

pockets like Saurashtra and Kutch, the coastal areas of Tamil Nadu and land locked areas

of Western Rajasthan and Marathwada in Maharashtra with scanty rainfall and perennial

water scarcity. In addition, a large number of villages in various parts of the country are

known to be suffering from excess salinity, fluoride, nitrate, iron, arsenic and microbial

contaminations of ground water. These invariably lead to widespread water borne

diseases and cause enormous hardships to the inhabitants. A holistic approach is therefore

called for to cope with the fresh water needs of the country in the coming decades.

Global Scenario

Mineral water is water containing minerals or other dissolved substances that alter

its taste or give it therapeutic value, generally obtained from a naturally occurring mineral

spring or source. Dissolved substances in the water may include various salts and sulphur

compounds. Mineral water can be sparking (with effervescence), or still (without

effervescence).

Traditionally, mineral waters were used or consumed at their source, often

referred to as “taking the waters” or “taking the cure”, at sites such as spas, baths or wells.

The term spa was used for place where the water was consumed and bathed in; bath

where the water was used primarily for bathing, therapeutics, or recreation; and well

where the water was to be consumed. Active tourist centres have grown up around many

mineral water sites since ancient times, such as Hungary, Hisarya (Bulgaria), Vichy

(France), Jermuk (Armeni), Yessentuki(Russia), Spa(Belgium), Krynica-Zdroj(Poland),

Sulphur Baths(Tbilisi, Republic of Georgia), bath(England), or Karlovy Vary(Czech

Republic). In Romania, a country enjoying a privileged position as home to over one-

third of the European mineral and thermal springs, resorts developed since antiquity in

places such as BaileHerculane, Geoagiu or Slanic. Tourist development resulted in spa

towns and hydropathical hotels (often shortned to “hydros”).

Key Players

The main key players of classic mineral waters are following;

Aquafina

Aquafina has been built through refreshing and sharp advertising. The „What a

Body‟ campaign has helped the brand to drive premium, modern and youthful imagery in

an otherwise undifferentiated category.

Bottled across India in 19 plants, Aquafina is available across more than half a

million outlets. Catering to diverse consumer needs and occasions, it is available in

various pack sizes like 300ml, 500ml, and 1 litre bottles and in bulk water jars of 25 litres.

Aquafina is the face of PepsiCo‟s water conservation initiatives and builds

awareness about PepsiCo‟s efforts to replenish and restore the water through its pack

labels. Such a big gun is a great key player for CLASSIC.

Kinley

Kinley water comes with the4 assurance of safety from the Coca-Cola Company.

They introduced Kinley with reverse-osmosis along with the latest technology to ensure

purity of their product. Because they believe that right to pure, safe drinking water is

fundamental. According to this policy Kinley has a great goodwill and well image among

the competitors.

Bisleri

A brand that pioneered the concept of mineral water, bottled with its distinct green

label, Bisleri, today, is a household name. Powered by 17 owned plants, 33 co-packers, 11

franchisees and a wide distribution and retail network pan India, Bisleri is at the centre of

the Aqua Green Revolution. Bisleri is proud to have pioneered the concept of bottled

water in India, way back in 1969.

Bibo Water is a BIS Approved brand manufacturing by ACER Engineers Pvt Ltd,

an ISP 9001:2000 certified organization, and the 20ltrs BIBO water is delivered to the

doorstep of over 3200 customers. BIBO water in different packs is distributed through

720 retail outlets across the twin cities. The 1 litre BIBO water is also a preferred Indian

Railway approved brand. Acer Engineers Pvt Ltd is basically a Water Treatment

Technology company having executed various industrial water treatment and drinking

water plants, the company diversified into manufacturing of Mineral water in 1996. BIBO

water, established in 1997 has strong presence across the state of Andhra Pradesh, has

been recording a consistent growth rate of 18% per annum.

Others

Mount Mist

Green Valley

Mountain Valley

Crystal Aqua

Aqua fine

2.2 COMPANY PROFILE

COMPANY PROFILE OF AISWARYA BEVERAGES CO.

The company was established by Mr Emmanuel Mathew in 21 January 2001 at

Thiruvalla with an initial investment of Rs. 20 lakhs and started its functioning with 10

employees. The company rapidly grew of the increase in the demand for its quality of its

products. In order to meet the rising demand for its prodcts, this has to expand and it was

shifted to one new building with modern facilities in 2005. With an experience of over 30

years in beverages field, classic has provided consumers with consistently high quality

products. Classic is the fourteenth company in Kerala to get ISI Certification from Bureau

of Indian Standards.

This unit has its incision in 2001 and hence was the last unit to be setup. This unit

mainly deals with packaged drinking water. The brand name is Classic and it is available

in one litre, two litre and 20 litre jars. The water for this purpose is obtained from well

and from other available stored tanks within the boundary of the units. The company

gives utmost priority to quality and therefore stringent methods are followed to attain

Indian Standard Institute (ISI) as a symbol or mark for product quality. A batch is

forwarded only after the lab test is being conducted at the company‟s very own lab.

Therefore products are being certified fit for drinking only after the supervision of these

experts. The unit has its own office at Chumathra near Muthoor in Thiruvalla.

Classic is packed pure drinking water brought to the market by Aiswarya

Beverages Company, Thiruvalla, Kerala. Water filtered and purified under modern

Swedish Technology. The classic water is pure, clear, colourless, odourless and

disinfected. Classic confirms to all the health standards and specifications on drinking

water stipulated by Bureau of Indian Standards (BIS) and it ensure health and protects

from water born diseases.

Classic pure, crystal clear water goes through a rigorous multiple stage

purification process to meet the most stringent Bureau of Standards (BIS) for water

purity.

VISION MISSION AND OBJECTIVES

Vision

Our vision is to be the world‟s premier consumer product company focused on

convenient foods and beverages. We seek to produce financial rewards to investors as we

provide opportunities for growth and enrichment to our employees. Our business partners

and the communities in which we operate. And in everything we do, we strive for

honesty, fairness and integrity.

Mission

Our responsibility is to continually improve all aspects of the world in which we

operate – environment, social, economic- creating a better tomorrow than today.

Objectives

Provide cost effective products.

Improve productive development cycle time.

To satisfy customer needs and wants.

Improve in time delivery of goods.

Awards and Achievements

ISO 9001-2000 certified.

Best Mineral Water Award for the year 2010 (Kerala circle).

One if the great achievement is, in Pathanamthitta district and Kottayam district

Classic is the market leader with more than 70% market share to almost all its

products.

VALUEWS OF THE COMPANY

Respect for people:

We treat individuals with dignity and respect. We continue to be honest, open and

ethical in all our interactions with dealers, distributors, retailers, suppliers, shareholders,

customers and with each other.

Consumers delight:

We maximizing that our business can succeed only if we can create and keep

customers. We manufacture products that offer value for money, which are differentiated

and deliver safe, effective and fast solutions.

Integrity:

People at every level are expected to adhere to the highest standards of business

ethics. Anything less is unacceptable. Our ethical conduct transcends beyond policies. It

is ingrained in our corporate tradition that is transferred from one generation of

employees to another. We comply with applicable government laws and regulations in the

geographies where we are present.

Quality:

We are committed to excellence in everything we do. Our credo: There is always

a better way- We must think creatively, continuously innovate and pursue new ideas to

achieve uncommon solutions to common problems.

Teamwork:

Teamwork is the cornerstone of our business that helps deliver value to our

customers. We work together across titles, job responsibilities and organizational

structure to share knowledge and expertise.

The right environment:

It is our responsibility to create an environment that helps employees realize their

full potential.

Leadership:

We recognize that we can be a leading company through active delegation and by

creating leaders at every level of the organisation.

Community development:

We continue to contribute to the communities in which we operate and address

social issues responsibly. Our products are safe to make and use. We conserve natural

resources and continue to invest in a better environment.

Transparency and shareholder value:

We are committed to be driven by our conscience and regulatory standards, to

deliver value to our shareholders, commensurate with our management and financial

strength.

PRESENT BOARD OF DIRECTORS

o Chairman & Managing Director : Mr Emmanuel Mathew

o Mrs Sherly Emmanuel (Executive Director).

Chain of Directors

Mr Aby Emmanuel

Mr NavinScaria

Mrs Sherly Emmanuel

Mr Kishore Jacob

Mr Boby George

PRODUCTS AND SERVICES OFFERED

Services

Aiswarya Beverages Ltd is arraying on various welfare services, social and

cultural activities for the benefit of the employee and their family member‟s. The various

welfare measures are as follows;

1. Employee Bus Facility

Company shift bus facility is providing to employees, covering all the four shift to

facilitate them to attend to shift duties.

2. Issue of Uniform

The company are issued with 2 sets of stitched cotton uniform and also issued

with a pair of head covering to the employee safety.

3. Issue of Chappals

Employees are issued with one pair of chappals every year for safety reasons,

depending upon the place of work.

4. Payment of Food Allowances as Incentive

Company is paying special allowance Rs. 6.50 per head per day and Rs. 7.50 per

head per day for other calculated on the basis of number of days actually attended duty

subsidies the food/eatable expenses incurred by employee during the working hours.

5. Education Allowance

Company is paying education allowance to all other employee at 15 days

salary/wages once in a year to meet requirements of their children‟s education expenses.

6. Merits Scholarship for Professional Courses

Merit Scholarship is given to employee‟s children‟s for MBBS and B.E students

as detailed below;

MBBS Rs. 10,000 per year

B.E Rs. 9,000 per year

7. Sickness Benefit Scheme

Company is paying 50% of salary/wages to employee up to a period of 6 months

at a stretch for those who are availing long medical leave on loss of pay for

disease which require continuous treatment and bed rest to sickness period.

8. Free Medical Treatment

Free medical treatment facility is extended to all employees including outside

references also. The employee‟s wife, children and dependents, parents are also availed

medical treatment at subsidized rates.

9. Aiswarya Beverages Employee’s Association (Benefit Fund)

Company is paying a nominal pension at Rs. 750 per annual for a period of 3

years to the superannuated and retired member.

10. Gifts

A gift worth ½ Sovereign on Gold is given to superannuated employee for

appreciation of their service.

11. Salary Advance

Salary Advance is given to employees for marriage in their family and medicated

treatment purpose.

12. Insurance

Company insure the employee pays every under “Personal Insurance” Rs. 30 in

which the company bears Rs. 15.

13. Workers Education Programme

Workers Education Programme is conducted for 25 employees every year and

once in two the programme is arranged for those employees, numbering 50 to see other

factories and other important places in Kerala. The entire expenditure is borne by the

company.

14. Medical Leave

Medical leave accumulation up to 80 days is allowed.

QUALITY CERTIFICATIONS

BIS-ISI and ISO CERTIFICATIONS

BIS can be expanded as bureau of Indian Standards. This is the top institute concerning

about standard policy and quality maintenance in India. This Institute prescribes carious

specification and rules and regulation as to how the product must be manufactured,

maintained and sold there will be no violation rules and such of those person who tend to

violate will be bought under serious prosecution. Various other standards under BIS are

ISI and ISO.

Indian Standard Institute (ISI) aims at quality product while International Standards

Organisation (ISO) a confederation comprising standard of the world which aims at

standard action quality of the products and services to enter to the complete satisfaction

of the consumer. Even Though Indian Standard Institute started in 1947 it was taken over

by Bureau of Indian Standard Institute in 1987 and ISI became the symbol or

productmarket quality

PRODUCT PROFILE

This unit had its inclusion in 2001 and hence was the last unit to be set up. This

unit is mainly deals with packaged drinking water. The brand name is CLASSIC and it is

available in one litre, two litre and 20 litre pet jars. The water for this purpose is obtained

from well and from other available stored tanks within the boundary of the units. The

company gives utmost priority to quality and therefore stringent methods are followed to

attain top quality. The unit has obtained licence from Bureau of Indian Standards (BIS)

and therefore has attained Indian Standard Institute (ISI) as a symbol or mark for product

quality. A batch is forwarded only after the lab test is being conducted at the company‟s

very own lab. Therefore products are being certified fit for drinking only after the

supervision of these experts. The unit has its own office at chumathra near muthoor in

Thiruvalla.

Classic mineral water is available in following categories :

One litre Bottle

Two Litre

20 Litre Pet Jars

DISTRIBUTION CHANNELS

Retailers

Direct Sales

COMPETITORS OF THE COMPANY

Aqafina

Crystal Aqua

Green Valley

Mountain Valley

Mount Mist

Oceana

ORGANISATION STRUCTURE

CHAIRMAN

GENERAL MANAGER

Manager

Production

Manager

PurchaseM

anager

Quality

Manager

Finance

manager

Marketing

Manager

Assistant

Manager

General

Clerk/Office

Machine

Operator

Charge

Assistant

Manager

Clerk Charge

Clerks

Assistant

Manager

Assistant

Manager

Clerks

SWOT ANALYSIS OF AISWARYA BEVERAGES COMPANY

SWOT means strength, weakness, opportunities and threats. Each parameter of micro

environment can be regarded as a strength, weakness, opportunities and threat. SWOT

analysis is an important analytical technique used in a strategic management to identify

care competencies as well as lack of appropriate resources.

BENEFITS OF SWOT ANALYSIS

SWOT analysis model shows how to access various parameters of micro and

macro environment to know that they are and to extend can contribute to the firm

SWOT analysis serves as an important analytical technique used in strategic

management to identify lack of appropriate resources

STRENGTHS

Company has a good experience in the field of beverages. More than 32 years

they are serving the domestic economy+

In Pathanamthitta and Kottayam districts, Classic is the market leader with more

than 70% of market share to almost all its products

Direct sales- Companies own vehicles undergoing distribution aids to give an

important mode of advertisement

Ensures high quality , maximum utilisation of quality departments

Maintaining good relationship with Customers

Company has BIS-ISI Certification

Skilled management helps in decision making

Absence of labour unions and continues improvement in production process

Advanced Machineries and Equipments

WEAKNESS

Lack of employees the company is facing to meet the customers demand

and sometimes fails to make the delivery at time

Price fluctuations in raw materials company to make rand m price change

Workers need high proficiency

High cost of machineries, their periodic maintenance and high rate of

energy consumption

OPPORTUNITIES

In the domestic market the demand for packaged drinking water is always

high than the company‟s production capacity

The company extents the market to other district also

Availability of good transportation

Uninterrupted power supply

Support from domestic environment

THREAT

Fast changing technology

Presence of less quality products in market at very low price

Threat of new entry each year in the whole market

High competition in the local market

Customers are not much aware about quality of BHIS-ISI.

CHAPTER 3

REVIEW OF LITERATURE

LITERATURE REVIEW

Elena Sholma 2009: “The financial performance of ethical funds;acomparative

analysis of the risk-adjusted performance of ethical and non-ethical funds mutual funds in

The review of ethical funds literature shows significant growth of the Socially

Responsible Investment (SRI) in the last decades. The increase of the interest towards

SRI indicates that ethical issues have become more essential for the investors. However

the number of surveys reveals that financial performance remains of an important concern

for the socially responsible investors. Therefore the benchmark analysis of the expected

returns and management fees of the ethical mutual fund chosen as a topic for this thesis

research. The risk-adjusted measures are used to analyse and compare performance of the

ethical and Non- ethical mutual funds in United Kingdom. The analysis does not indicates

the significant difference in the expected returns between the two groups of funds.

However this study concludes that on average ethical funds charge higher management

fees. Thus investing in ethical funds is more costly but gives about the same returns as

investing in conventional funds.

SannaMalm; EmilieRslund [2013]:“The Bond-to-total Debt Ratio and its Impact

on Firm‟s Performance”

In this study we are investigating whether the bond-to-total debt ratio impacts firm‟s

performance. We are also asking if this relationship might differ during economic states

of recession, due to the impacts of the latest financial crisis. The choice of topic stemmed

from the from the opening of the new First North Bond Market in Sweden, in

combination with the implication of the Basel III Accords coming into force in the

Swedish financial market the year. When firms have less access to bank loans but easier

access to a bond market, it is important to know whether issuing bonds could have an

impact on the firms. Due to the limited amount of data from the young Swedish bond

market, the study was conducted on the Norwegian market, in which a well – developed

and mature corporate bond market is established. The choice was further supported by the

fact that the countries socio- economic and financial environment are quite similar.

Our methodological views of positivism and objectivism guided us through our literature

review in search for theories. A deductive approach was taken in order to generate

hypothesis to test. Grand theories of capital structure and contingency theories of

performance determines served as the basis for our selection of research method and

theoretical framework. Due to the lack of a middle-range theory that explains the effects

of the relationship we wanted to test, our aim was to fill in this study.

Pensamiento& Geston-12/2011: “Financial performance analysis of innovative

companies in the food and beverage industry in Colombia”

The Article presents the findings from the financial evaluation of Colombian innovating

companies of the food and beverage sector conducted through the study of their

efficiency, and effectiveness in obtaining and using financial resources, to verify if the

basic financial objectives of creating economic value is achieved. The research

covers2000-2008 periods, and it uses financial indicators based on accounting and

economic information.

Lin Zhang; Wai Fong Chow- 2010: “Financial performance in Hong Kong listed

hotels: the effect of value added creation and cost-leadership seeking”

We structure a literature review which we provide with broader definition of the major

concepts; value creation, cost efficiency (leadership), competitive strategies, financial

performance and statement analysis. The literature review focuses mainly on Hong Kong

context and literatures supporting the similar business strategies among similar size of

companies from various industries.

CHAPTER 4

RESEARCH DESIGN

4.1 RESEARCH METHODOLOGY

Research methodology is the method used to collect data from the various source.

Research is a careful investigation or the enquiry especially through search for new facts

in any branch of knowledge. In every research there are two types of data, primary and

secondary. Primary data are those data which are collected from the first time and original

in nature. Secondary data on the other hand those that have already been collected

analysed from someone else. The nature of data collected for the study is secondary data.

The study is covered five year of data from 2009-2013. The technique used for analysis

was ratio analysis, comparative balance sheet, common size and trend analysis. The

source of data collected for the study is from annual report from Aiswarya Beverages

Company.

RESEARCH DESIGN

This is a systematic way to solve the research problem and it is important component for

this study without which researches may not be able to obtain the format. A research

design is the arrangements of the condition for collection and analysis of data in a

manager that aims to combine for collection and analysis of data relevance to the research

purpose with economy in procedure.

Meaning of Research Design

The formidable problem that follows the task of defining the research problem is the

preparation of design of the research project, popularly known as the research design,

decision regarding what, where, when, how much, by what means concerning and enquiry

of a research study constitute a research design. A research design is the arrangement of

conditions for collection and analysis of data in a manager that aims to combine for

collection analysis of data relevance to the research purpose with economy in procedure.

4.1.1 SOURCE OF DATA

Primary Data:

Primary data is the first hand information that is collected during the period of research.

Primary data has been collected through discussions held with the staffs in the accounts

department. Some types of information were gathered through oral conversations with the

cashier, taxation officer etc.

Secondary Data:

Secondary data studies whole company records and company‟s balance sheet in which the

project work has been done. In addition, a number of reference books, journals and

reports were also used to formulate the theoretical model for the study. And some

information were also drawn from the websites.

It consists of data collected through various annual reports, websites, magazines, etc.

4.1.2 TOOLS USED FOR THE ANALYSIS

1. Ratio Analysis

2. Comparative Balance Sheet Analysis

Microsoft Excel has been used the data analysis

4.2 OBJECTIVE OF THE STUDY

To find out the efficiency in fund utilization of the organisation

To identify the past performance of the company

To understand the company‟s present financial position.

To have a comparative study about the balance sheet of various year

To examine the ratio of net profit to expenses, income etc.

To access the financial strength and weakness of the organisation

To compare the performance of the company with its competitors

To study the working capital management of Aiswarya Beverages co.

4.3 SCOPE OF THE STUDY

Financial management is one of the important parts of overall management, which is

directly related with various functional departments like personnel, marketing and

production. Financial management covers wide area with multidimensional approaches.

The financial analysis is conducted to have practical knowledge about the various entities

of the finance department and to compare its performance with competitors. By this we

have to get a clear idea about all the financial entities of an organisation. it also provides a

chance to see the practical constraints faced by the finance managers and to compare the

financial performance with a competitor.

4.4 PERIOD OF STUDY

The present study deals with the data collected from annual reports and other relevant

documents for the period commencing from 2011-2015

4.5 LIMITATIONS OF THE STUDY

There are certain limitations for the study conducted in AISWARYA

BEVERAGES CO.

Time available for the project is limited (about 2 months). It will affect the

entire study.

The study is mostly based on secondary data, so errors are possible

Lack of limited information.

Inter comparison among other similar company‟s is not possible in this study.

The company‟s higher officials were not allowed to meet in person and the

company‟s data was kept confidential among them.

Since all the employees were busy with their works, detailed interaction was

not possible.

The study is confined to five years and as such the conclusions arrived at may

be valid only for these years.

CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

5.1 RATIO ANALYSIS

The analysis of financial statements consists of a study of relationship and trends to

determine whether or not the financial position of the concern and its operating efficiency

have been satisfactory. Ratio analysis is the important and widely used tool of analysis of

financial statement. It is essentially an attempt to develop meaningful relationship

between individual items or group of items in the balance sheet or profit and loss account.

The object and utility of ratio analysis is a technique of financial analysis is confined not

only to the internal parties but to the trade creditors, banks and lending institution also.

5.1.1 DEBT EQUITY RATIO

This ratio indicate the relationship between loan funds and net worth of the

company, which is known as “gearing” if the proportion of debt to equity is low, a

company is said to be low-geared and vice versa.

Equation:-

Debt Equity Ratio= Borrowed fund

Owned fund

5.1.1 DEBT EQUITY RATIO CHART

Rs. In Lakhs

Particulars 2011 2012 2013 2014 2015

A) Borrowed Fund 12.00 9.00 6.00 3.00 0.00

B) Owned Fund 31.18 32.82 35.20 37.58 39.85

C) Debt Equity

Ratio (A/B)

0.384 0.274 0.170 0.079 0.00(Nil)

5.1.1 DEBT EQUITY RATIO DIAGRUM

INTERPRETATION

It is the ratio between proprietors fund and outsider‟s fund. This ratio reveals the

contribution by the proprietor and outsiders to the total fund of the firm. The above ratio

shows that proprietors share to total fund is increased, so the ratio shows decrease in trend

and become zero in the last year

2011 2012 2013 2014 2015

Debt Equity Ratio (A/B)

5.1.2 FIXED ASSET NET WORTH RATIO

It is the ratio between fixed asset and net worth. This ratio indicates that owner‟s

contribution by the owner to the fixed asset is reduced with indicate the financial

soundness of the business

Equation:-

Fixed Asset to Net Worth Ratio = Owned fund

Fixed Asset

5.1.2 FIXED ASSET TO NET WORTH RATIO CHART

Rs. In Lakhs

Particulars 2011 2012 2013 2014 2015

A) Borrowed Fund 31.18 32.82 37.58 37.58 39.85

B) Owned Fund 41.5 38.35 35.52 32.99 30.72

C) Fixed Asset Net

Worth Ratio(A/B)

0.75 0.856 .991 1.139 1.297

5.1.2 FIXED ASSET TO NET WORTH RATIO DIAGRUM

INTERPRETATION

It is the ratio between fixed asset and proprietary fund. The ratio shows the increase in

trend that the contribution by the proprietor to total fund increase

2011 2012 2013 2014 2015

Fixed Asset Net Worth Ratio(A/B)

5.1.3 FIXED ASSET TURN OVER RATIO

This ratio will be analysed further with ratio for each minimum category of asst. This is a

difficult set of ratio to interpret as asset values are based on historic cost. An increase in

the fixed asset figure may result from the replacement of an asset at an increased price or

the purchase of an additional asset intended to increase production capacity.

Equation:-

Fixed Asset Turnover Ratio= Sales

Fixed Asset

5.1.3 FIXED ASSET TURN OVER RATIO CHART

Rs. In Lakhs

Particulars 2011 2012 2013 2014 2015

A) Borrowed Fund 30.00 35.00 40.00 45.00 50.00

B) Owned Fund 41.5 38.35 35.52 32.99 30.72

C) Fixed Asset Turn

Over Ratio (A/B)

17.9 22.8 32.5 29.34 33.58

5.1.3 FIXED ASSET TURN OVER RATIO DIAGRUM

INTERPRETATION

It is the ratio between fixed asset to sales. this ratio shows an increase in trend because

of the increase in sales without making an increase in Fixed asset.

2011 2012 2013 2014 2015

Fixed Asset Turn Over Ratio (A/B)

5.1.4 NET PROFIT RATIO

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 percentage of sales. A drawback is that

the percentage which result varies depending in the source employed to

finance business activity; interest is changed above the line while dividends

are deducted below the line. It is for this reason that net profit ie; earnings

before interest and tax [EBIT] is used

Equation:-

Net Profit Ratio= Net Profit *100

5.1.4 NET PROFIT RATIO CHART

Rs. In Lakhs

Particulars 2011 2012 2013 2014 2015

A) Borrowed Fund 5.375 8.00 13.00 13.207 16.791

B) Owned Fund 30.00 35.00 40.00 45.00 50.00

C) Net Profit

Ratio(A/B)*100

17.9 22.8 32.5 29.34 33.58

5.1.4 NET PROFIT RATIO DIAGRUM

INTERPRETATION

It is the ratio between net profit and sales. The ratio shows an increase in trend that is the

net profit of the firm is increasing from year after year in accordance with increase in

2011 2012 2013 2014 2015

Net Profit Ratio (A/B)*100

5.1.5 PROPRIETARY RATIO

This ratio indicates the extent to which Tangible Asset are financed by Owner‟s fund. The

ratio will be 100% when there is no borrowing for purchasing of Assets.

Equation;-

Proprietary Ratio= Shareholders fund

Total Asset

5.1.5 PROPRIETARY RATIO CHART

Rs. In Lakhs

YEAR SHAREHOLDRES FUND

TOTAL ASSET

PROPRIETARY

2010-2011 31.18 43.18 0.7221

2011-2012 32.82 41.82 0.7848

2012-2013 35.20 41.20 0.8549

2013-2014 37.58 40.58 0.9261

2014-2015 39.85 39.85 1.00

5.1.5 PROPRIETARY RATIO DIAGRUM

INTERPRETATION

This ratio shows the financial strength of the company. It helps the creditors to find out

the proportion of share holders fund in the total assets

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

PROPRIETARY RATIO

5.1.6 CURRENT ASSET TURNOVER RATIO

The current asset turnover ratio determines the velocity of utilization of current asset.

This analysis helps to find the organization ability to reduce a large volume current asset,

is the most important aspect of its operating performance

Equation:-

Current Asset Turnover Ratio= Net Sale

Current Asset

5.1.6 CURRENT ASSET TURNOVER RATIO CHART

Rs. In Lakhs

Year Total Sales(A) Current Asset (B) Current Asset

Turnover Ratio

2010-2011 30.00 1.675 17.9104

2011-2012 35.00 3.465 10.10101

2012-2013 40.00 5.685 7.03606

2013-2014 45.00 7.582 5.93511

2014-2015 50.00 9.13 5.47645

5.1.6 CURRENT ASSET TURNOVER RATIO DIAGRUM

INTERPRETATION

Here the current asset turnover ratio is reducing. The average turnover ratio shows the

organisation ability to reduce large volume of current asset, is the most important aspects

of its operating performance

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

PROPRIETARY RATIO

5.1.7 TOTAL ASSET TO DEBT RATIO

Total asset to debt ratio may be used analyze the long term solvency of firm; the firm may

be interested being debt in the capital structure

Equation;-

Total Asset To Debt Ratio= Total Debt

Total Asset

5.1.7 TOTAL ASSET TO DEBT RATIO CHART

Rs In Lakhs

Year Total Debt(A) Total Asset (B) Total Asset To Debt

2010-2011 12.00 43.18 0.278

2011-2012 9.00 41.82 0.215

2012-2013 6.00 41.20 0.146

2013-2014 3.00 40.58 0.074

2014-2015 0.00 39.85 0.00(Nil)

5.1.7 TOTAL ASSET TO DEBT RATIO DIAGRUM

INTERPRETATION

This ratio shows the relationship between the total debt and total assest. Here it

shows s decreasing trend. In the year 2010-2011 is the higher ratio and the lowest one is

2014-2015.

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Total Asset To Debt Ratio

5.2 COMPARATIVE BALANCE SHEET ANALYSIS

5.2.1 COMPARATIVE BALANCE SHEET OF THE YEAR 2011-2012

Rs. In Lakhs

PARTICULA

2011 2012 AMOUNT

INCREASE/DEC

PERCENTAGE

INCREASE/DEC

A) Source of

Owned Fund 31.18 32.8

1.64 5.26%

Borrowed

12.00 9.00 -3.00 -25.00%

B)Total 43.18 41.8

-1.36 -3.15%

C)Applicatio

n of Fund

Fixed assets

Land 10.00 10.0

0.00 0.00%

Vehicle 9.00 8.10 -0.90 -10.00%

Furniture 0.90 0.81 -0.09 -10.00%

Plant 11.7 10.5

-1.17 -10.00%

Machinery 8.1 7.29 -0.81 -10.00%

Computer 1.8 1.62 -0.18 -10.00%

Current

Assets

Stock 0.5 1.00 0.5 100%

Cash in hand 1.175 2.46

1.29 109.79%

D)Total 43.18 41.8

-1.36 -3.15%

INTERPRETATION

The comparative balance sheet reveals that has been decreased total fixed asset

10.00% each unless land.

The total current asset increased

In current assets, cash in hand and stocks are increased.

The total asset decreased -3.15%

25% of the borrowed fund paid to the bank and owned fund increased 5.26%

Rs. In Lakhs

PARTICULAR

2012 2013 AMOUNT INCREASE/

DECREASE

PERCENTAGE OF

INCREASE/

DECREASE

A) Source of

Owned Fund 32.82 35.2 3.62 11.03%

Borrowed Fund 9.00 6.00 -3.00 -33.33%

B)Total 41.82 41.20 -0.62 -1.48%

C)Application

of Fund

Fixed assets

Land 10.00 10.00 0.00 0.00%

Vehicle 8.10 7.29 -0.81 -10.00%

Furniture 0.81 0.73 -0.08 -9.87%

Plant 10.53 9.48 -1.05 -9.97%

Machinery 7.29 6.57 -0.72 -9.88%

Computer 1.62 1.45 -0.17 -10.49%

Current Assets

Stock 1.00 0.05 -0.5 -50.00%

Cash in hand 2.465 5.185 2.72 109.79%

D)Total 41.82 41.20 -0.62 -1.48%

INTERPRETATION

The total current asset increased 79.895%

In current assets, cash in hand increased 109.79% and reached Rs.518500

Rs. In Lakhs

PARTICULARS 2013 2014 AMOUNT

INCREASE

/DECREASE

PERCENTAGE OF

INCREASE/

DECREASE

A) Source of

Owned Fund 35.2 37.58 2.38 6.76%

Borrowed Fund 6.00 3.00 -3.00 -50.00%

B)Total 41.20 40.58 -0.62 -1.50%

C)Application of

Fixed assets

Land 10.00 10.00 0.00 0.00%

Vehicle 7.29 6.57 -0.72 -10.00%

Furniture 0.73 0.66 -0.07 -9.59%

Plant 9.48 8.54 -0.94 -9.92%

Machinery 6.57 5.92 -0.65 -9.89%

Computer 1.45 1.31 -0.14 -9.66%

Current Assets

Stock 0.05 1.00 0.5 100.00%

Cash in hand 5.185 6.582 1.397 26.94%

D)Total 41.20 40.58 -0.62 -1.50%

INTERPRETATION

The total current asset increased 63.47%

In current assets, and stock increased 100% and cash in hand increased 26.94%,

so it increased Rs.139700 .

50% of the borrowed fund paid to the bank and owned fund increased 6.76% and

now the value of owned fun is Rs. 3758000.

Rs. In Lakhs

PARTICULARS 2014 2015 AMOUNT

INCREASE/

DECREASE

PERCENTAGE OF

INCREASE/

DECREASE

A) Source of

Owned Fund 37.58 39.85 2.27 6.04%

Borrowed Fund 3.00 0.00 -3.00 -100.00%

B)Total 40.58 39.85 -0.73 -1.798%

C)Application of

Fixed assets

Land 10.00 10.00 0.00 0.00%

Vehicle 6.57 5.92 -0.65 -9.89%

Furniture 0.66 0.60 -0.06 -9.09%

Plant 8.54 7.68 -0.86 -10.07%

Machinery 5.92 5.33 -0.59 -9.97%

Computer 1.31 1.18 -0.13 -9.92%

Current Assets

Stock 1.00 0.5 -0.5 -50.00%

Cash in hand 6.582 8.63 2.048 31.11%

D)Total 40.58 39.85 -0.73 -1.798%

INTERPRETATION

In the last year the borrowed fund has been paid back completely.

The total fixed asset diminished about 9.9% each unless land.

In current assets, and stock decreased 50% and cash in hand increased 31.11%,

so it increased Rs.204800 .

and now the value of owned fun is Rs. 3985000.

5.3 COMPETITOR FINANCIAL COMPARISON

COMPANY DETAILS

Vrindavanam Mineral Water Products

Owner: Mr. Manoj Kumar

Kottanad P.O, Vrindavanam, Ranni Road,

Near Paranamalakv Devi Temple,

Pathanamthitta-689615,

Kerala, India. PH:+919747980308

Vrindavanam is a manufacturer and supplier of packaged drinking water and domestic

competitor of Aiswarya Beverages.

5.3.1 BALANCESHEET COMPARISON OF THE YEAR 2014-2015

Particulars Aiswarya

BveragesComoany

Vrindavanam

Mineral Water

Production

Difference

In Amount

Percentage Of

Difference

A) Source of

Owned Fund 39.85 38.50 -1.30 -3.387%

Borrowed Fund 0.00 9.71 9.71

B)Total 39.85 48.21 8.36 20.978%

C)Application

of Fund

Fixed assets

Land 10.00 17.00 7.00 70.00%

Vehicle 5.92 5.50 -0.42 -7.094%

Furniture 0.60 0.50 -0.10 -16.667%

Plant 7.68 8.95 1.27 16.536%

Machinery 5.33 4.76 -0.57 -10.694%

Computer 1.18 1.02 -0.16 -13.559%

Current Assets

Stock 0.5 1.12 0.62 124.00%

Cash in hand 8.63 9.36 0.73 8.458%

D)Total 39.85 48.21 8.36 20.978%

INTERPRETATION

The competitor‟s project is 20.978% is more expensive than Aiswarya Beverages

Competitor has invested more money on land and plant but investment on other

depreciating assets are comparatively less stock

Competitor holds bulk amount of stock, about 124% more than that of Aiswarya

Beverages Co,

The net current assets are more with competitor so they can ensure more liquidity

that will help in complex situation

CHAPTER 6

FINDINGS SUGGESTIONS AND CONCLUSION

6.1 FINDINGS

The company is in a profitable situation

In the last year (2015) the borrowed fund has been paid back completely

The total fixed asset diminishing about 9.9% each year unless land

Net profit ratio of the company shows sustainable growth in the past 3 years. i.e in

the 2013-2015. This is gained by increased sales volume

Overall profit ratio shows an increasing trend in the past 5 years. The efficient

management of credit

Current Asset turnover ratio of the company shows an decreasing trend. This

indicates the firm‟s disability to produce a large volume of income for a given

amount of current assets.

Proprietary ratio indicates the extent to which tangible asset are financed by

Owner‟s fund. It shown an increasing trend. The ratio is 100% in the last year

where there is no borrowing for purchasing of assets.

The debt equity ratio shows that proprietors share to total fund is increased, so the

ratio shows decrease in trend and it becomes zero in the last year.

Fixed asset to net worth ratio is the ratio between fixed asset and proprietary fund.

Here the ratio shows an increase in trend that the contribution by the proprietor to

total fund increasing

Fixed asset turnover shows an increase in trend because of the increase in sale

without making an increase in fixed asset. So the operating efficiency of the firm is

better

.6.2 SUGGESTIONS

The company has extent the market in whole Kerala

The company has to maintain prominent reserve in the form of cash and bank balance,

so that the liquidity position can be increased

Maintain the idle proportion of current asset and current liabilities help to improve

better working capital management

In order to improve profitability , expenses incurred by the organization should be

reduced

Make use of assets in most efficient manner by using advanced technologies

Acquire more liquid-able assets which are having less depreciation

Proper ratio of current assets and timely liquidation of current liabilities must be

ensuring to maintain the solvency position of the company

The absolute liquidity ratio should be maintain by the company for the sound liquidity

position

The company better try to increase the asset than its debt

6.3 CONCLUSION

Aiswarya Beverages Company is one of the major package drinking water manufacturers

in Central Travancore, they are having a good chance of growth and prospectus in future.

An increase in profitability statement proves the operating efficiency of the firm. By

verifying the balance sheet it is identified that the financial position of the firm is sound,

the firm has the capacity to repay all their liabilities in time and ratios shown are idle.

The ratios and annexure explain that the industry will become number one package

drinking water manufacturing company in the market within few years.

The project is technically feasible, economically viable and commercially sound and

deserves best assistance from financial institutions

Newhorizon College

CHAPTER 7

BIBILIOGRAPHY

Newhorizon College

BIBILIOGRAPHY

Text Books:

Cost Accounting by V K Kapoor, Reliance Publications

Reports:

Annual reports of Aiswarya Beverages Company

Online Resources

http://en.wikipedia.org/wiki/bottledwater

Newhorizon College

8 ANNEXURE

Newhorizon College

8.1 PROJECTED PROFITABILITY STATEMENT

Rs. In Lakhs.

Year 2011 2012 2013 2014 2015

A)INCOME

B)TOTAL 30.00 35.00 40.00 45.00 50.00

C)VARIABLE COST

a)Opening Cost 0.00 0.5 1.00 0.5 1.00

b)Purchase of Materials 12.00 13.00 12.00 15.00 14.00

c)Closing Stock 0.5 1.00 0.5 1.00 0.5

Material Consumed

(a+b+c)

11.5 12.5 12.5 14.5 14.5

D)TOTAL 11.5 12.5 12.5 14.5 14.5

E)GROSS PROFIT(B-D) 18.5 22.5 27.5

F)OPERATING EXPENSES

Salary 6.75 7.25 7.75 8.25 8.75

Electricity Charge 0.5 1.00 1.5 2.00 2.5

Travelling Expenses 0.375 0.4 0.425 0.45 0.475

Repairs 0.25 0.5 0.75 1.00 1.25

Office Expense 0.25 0.5 0.75 1.00 1.25

Interest on Loan 1.5 1.35 1.215 1.093 0.984

Depreciation 3.5 3.5 3.5 3.5 3.5

G)TOTAL 13.25 14.5 14.5 17.293 18.70

H)NET PROFIT 5.375 8.00 13.00 13.207 16.791

Newhorizon College

8.2 PROJECTED CASH FLOW STATEMENT

Rs. In Lakhs

Year Pre-

operative

period

2011 2012 2013 2014 2015

A)INFLOW

Owned capital 30.00

Borrowed Term

Inflow from

operation

- 5.375 8.00 13.00 13.207 16.791

Add depreciation - 3.5 3.5 3.5 3.5 3.5

Decrease in current

- 0.00 0.00 0.5 0.00 0.5

B)TOTAL 45.00 8.875 11.5. 11.7 16.707 20.791

Fixed asset

Land 10.00

Vehicle 10.00

Furniture 1.00

Plant 13.00

Machinery 9.00

Computer 2.00

Increase in current

- 0.5 0.5 0.00 0.5 0.00

Repayment of loan 3.00 3.00 3.00 3.00 3.00

Income tax 0.75 1.51 2.28 3.05 3.82

Drawings 3.45 5.2 9.00 8.76 12.49

C)TOTAL 45.00 7.7 10.21 14.28 15.31 19.31

D)SURPLUS 1.175 1.29 2.72 1.397 1.481

E)CUM.

SURPLUS

1.175 2.465 5.185 6.582 8.063

Newhorizon College

8.3PROJECTED DEBT SERVICE COVERAGE RATIO

Rs in lakhs

2011 2012 2013 2014 2015

A)SOURCE OF FUND

Inflow from operation

5.375 8 13 13.207 16.791

Add depreciation

3.5 3.5 3.5 3.5 3.5

Less Income tax

0.75 1.51 2.28 3.05 3.82

B)TOTAL 8.125

9.99 14.22 13.657 16.471

C)Service of Debt

Repayment of loan

3.00 3.00 3.00 3.00 3.00

D)TOTAL

3.00 3.00 3.00 3.00 3.00

F)DSCR(B/D) 2.708

3.33 4.74 4.552 5.490

Newhorizon College

PROJECTED BALANCE SHEET FOR THE YEAR 2011

Year Pre-operative

period

A) Source of Fund

Owned Fund

30.00 31.18

Borrowed Fund

15.00 12.00

B)Total

45.00 43.18

C)Application of Fund

Fixed assets

10.00 10.00

Vehicle

10.00 9.00

Furniture

1.00 0.90

13.00 11.7

Machinery

9.00 8.1

Computer

2.00 1.8

Current Assets

Cash in hand

D)Total

Newhorizon College

A) Source of Fund

Owned Fund

Borrowed Fund

B)Total

Fixed assets

Vehicle

Furniture

Machinery

Computer

Current Assets

Cash in hand

D)Total

Newhorizon College

A) Source of Fund

Owned Fund

Borrowed Fund

B)Total

Fixed assets

Vehicle

Furniture

Machinery

Computer

Current Assets

Cash in hand

D)Total

Newhorizon College

A) Source of Fund

Owned Fund

Borrowed Fund

B)Total

Fixed assets

Vehicle

Furniture

Machinery

Computer

Current Assets

Cash in hand

D)Total

Newhorizon College

A) Source of Fund

Owned Fund

Borrowed Fund

B)Total

Fixed assets

Vehicle

Furniture

Machinery

Computer

Current Assets

Cash in hand

D)Total

Financial Performance Aiswarya Beverages

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