A Summer Training Project Report (2)

7/25/2019 A Summer Training Project Report (2)

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1.1 Introduction Of Industry

Knowing the customer satisfaction is always the top prerogative in any business. Getting to

know the level of satisfaction and (or) the changing expectations of customers is a

continuous process. Though there are various methods and tools available for this mysteryshopping is considered as uni!ue and undeniable tool in any organisation. "s defined by

#ilson ($%%&) mystery shopping is 'a form of participant observation that uses researchers

to deceive customerservice personnel into believing that they are serving real customers or

potential customers. *ystery shopping is a techni!ue that involves looking at your

business from outside and measure the efficiency of your own key processes from the view

point of customers. *ystery +hopping can be carried out in person by telephone or less

commonly by email. ,t can recogni-e strengths and weaknesses and aid to show exactly

where service delivery can be improved. ,n instances where excellent service is provided

the service may be considered an example of best practice and specific staff members can be

singled out for recognition and reward. ,nitially set up in retail and private sector service

industries now mystery shopping is used increasingly in the private as well as public sector

to gain a better understanding of how service users are taken care of when they approach

front line offices. esearch is the foundation stone of effective marketing planning and is

vital for implementing successful marketing strategies. *ystery shopping is a research to

know about company in customer point of view. ,t is the use of individuals skilled to

measure any customer service process by acting as potential customers and in some way

reporting back on their experiences in a detailed and ob/ective way. ,t is also an act of

purchasing goods and services for collecting information for market research.

*ystery shopping is more visible in developing countries and it is mostly prevailing in retail

sector. 0ut other sectors also use it as a tool to measure their customer satisfaction

competition new technology advancements etc. some of the areas where mystery shopping

is seen commonly are 0anks estaurants 1otels +upermarkets "utomobile shops epair

shops 0ars 2lubs Theaters +hopping malls etail chain operators. 3*2G companies

2onsumer durable companies "pparel retailers. *ystery shoppers are professional in this

field as he charges a reasonable amount from the companies for doing this service of

conducting research. " feedback is given by them to the client whether the services are

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being performed according to expectations or not and gives a chance for the further

improvements that company thinks necessary for its survival. 4n the other hand they tries to

offer a better delivery to the customers to make them satisfied and a company can attract

more and more customers if it is efficient in the market.

*ystery shopping is necessary for companies to get an ob/ective opinion on how their

business is doing. ,f they used their own employees to evaluate their service and operations

it would be biased. +o mystery shoppers who don5t already have a connection with the

company are used to provide honest and unbiased feedback. ,n the 6K mystery shopping is

increasingly used to provide feedback on customer services provided by local authorities

and other nonprofit organi-ations such as housing associations and churches. *ystery

shopping is a term that describes a field based research techni!ue of using independent

auditors posing as customers to gather information about product !uality and service

delivery by a retail firm. The mystery shopper poses as a customer in order to ob/ectively

gather information on the business being.

,n the industry the practice of helping organi-ationsto improve theirperformance

operating primarily through the analysis of existing organi-ational problems and the

development of plans for improvement. 4rgani-ations may draw upon the services of

managementconsultantsfor a number of reasons including gaining external (andpresumably ob/ective) advice and access to the consultants5 speciali-ed expertise.

"s a result of their exposure to and relationships with numerous organi-ations consulting

firms are typically aware of industry 7best practices7 although the specific nature of

situations under consideration may limit the transferability of such practices from one

organi-ation to another. 2onsultancies may also provide organi-ational change

managementassistance development of coachingskillsprocess

analysis technologyimplementationstrategy development or operational improvement

services. *anagement consultants often bring their own proprietarymethodologiesor

frameworks to guide the identification of problems and to serve as the basis for

recommendations for more effective or efficientways of performing work tasks.

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https://en.wikipedia.org/wiki/Organizationhttps://en.wikipedia.org/wiki/Organizationhttps://en.wikipedia.org/wiki/Performance_managementhttps://en.wikipedia.org/wiki/Performance_managementhttps://en.wikipedia.org/wiki/Consultantshttps://en.wikipedia.org/wiki/Consultantshttps://en.wikipedia.org/wiki/Best_practicehttps://en.wikipedia.org/wiki/Change_managementhttps://en.wikipedia.org/wiki/Change_managementhttps://en.wikipedia.org/wiki/Coachinghttps://en.wikipedia.org/wiki/Coachinghttps://en.wikipedia.org/wiki/Process_analysishttps://en.wikipedia.org/wiki/Process_analysishttps://en.wikipedia.org/wiki/Technologyhttps://en.wikipedia.org/wiki/Technologyhttps://en.wikipedia.org/wiki/Strategyhttps://en.wikipedia.org/wiki/Strategyhttps://en.wikipedia.org/wiki/Methodologyhttps://en.wikipedia.org/wiki/Methodologyhttps://en.wikipedia.org/wiki/Efficiency_(economics)https://en.wikipedia.org/wiki/Performance_managementhttps://en.wikipedia.org/wiki/Consultantshttps://en.wikipedia.org/wiki/Best_practicehttps://en.wikipedia.org/wiki/Change_managementhttps://en.wikipedia.org/wiki/Change_managementhttps://en.wikipedia.org/wiki/Coachinghttps://en.wikipedia.org/wiki/Process_analysishttps://en.wikipedia.org/wiki/Process_analysishttps://en.wikipedia.org/wiki/Technologyhttps://en.wikipedia.org/wiki/Strategyhttps://en.wikipedia.org/wiki/Methodologyhttps://en.wikipedia.org/wiki/Efficiency_(economics)https://en.wikipedia.org/wiki/Organization


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*anagement consulting grew with the rise of management as a uni!ue field of study. The

first management consulting firm was "rthur 8. 9ittle,nc. founded in &::; as a

partnership and later incorporated in &) consulting market is healthier than

it5s been since the cra-y days of the dotcom boom. 2onsulting research firm Kennedy

,nformation publishers of 2onsultants Eews says that there are three key reasons for the

growthF The technology marketplace is maturing with identifiable key players? competition

is forcing companies to make better use of technology to be more efficient? and complex ,T

systems re!uire companies to seek outside help.

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https://en.wikipedia.org/wiki/Managementhttps://en.wikipedia.org/wiki/Arthur_D._Littlehttps://en.wikipedia.org/wiki/Gross_domestic_producthttps://en.wikipedia.org/wiki/Gross_domestic_producthttps://en.wikipedia.org/wiki/Big_Four_(audit_firms)https://en.wikipedia.org/wiki/PricewaterhouseCoopershttps://en.wikipedia.org/wiki/KPMGhttps://en.wikipedia.org/wiki/Ernst_%26_Younghttps://en.wikipedia.org/wiki/Deloitte_Touche_Tohmatsuhttps://en.wikipedia.org/wiki/Auditinghttps://en.wikipedia.org/wiki/Auditinghttps://en.wikipedia.org/wiki/Managementhttps://en.wikipedia.org/wiki/Arthur_D._Littlehttps://en.wikipedia.org/wiki/Gross_domestic_producthttps://en.wikipedia.org/wiki/Big_Four_(audit_firms)https://en.wikipedia.org/wiki/PricewaterhouseCoopershttps://en.wikipedia.org/wiki/KPMGhttps://en.wikipedia.org/wiki/Ernst_%26_Younghttps://en.wikipedia.org/wiki/Deloitte_Touche_Tohmatsuhttps://en.wikipedia.org/wiki/Auditing


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1.2 ABOUT THE COMPANYF

+ince &


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Uti!i%e

" *ystery +hopper 3orce of over $%% individuals throughout ,ndia .

Aears of success and experience in the mystery shopping industry since &


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2ustomer thank you and invitation to return.

4verall onsite customer experience.

ust about anything that is important in your many locations.

Acie&e

,mproved operational performance to maximi-e the customer experience sales and

profitability.

0etter brand compliance and performance differentiating your brand promise to

customers.

,dentified areas where new procedures andIor additional training can improve your

bottom line.

"n understanding in real time of top and bottom performing stores.

8esired employee behaviors reinforced by rewarding store managers and personnel

who deliver an outstanding guest experience.

2orrelated sales results to specific operational areas in your stores with Ad&anced

Ana!ytics.

Ne' Initiati&e Of Tota! (o!ution )rou$

TOTA* +E(OU+CE ACA,EMY O- IN,IA

T",E is the strategic arm of the group which was cofounded by few of our loyal clients

who needed professional sustainable and scalable expertise in the areas of training and

development creation of standard operating procedures train the trainer programs

psychometric tests @ implementation of ob/ectives through focused interventions et all.

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4ne of the revolutionary products that has changed the face of trainings and its

efficiency has been our 5= 9earning *anagement +ystem5 and its certification program

52enter of =xcellence5.

These programs have demonstrated tangible results in a very short span of time and has

given the ,ndustry an opportunity in uplifting its standards.

T",E ensures that its interventions bring measureable and monitorable gains which

bring tremendous value towards customer satisfaction speed and service.

&. Theatrical 0ased Training >rogram

$. +4> 0ased Training

L. +oft +kills Training

C. =9earning *anagement +ystem

. ate *y +ervice5 >rogram

(UB COMPANIE( O- TOTA* (O*UTION( )+OUP

TOTA* (O*UTION( INCO+PO+ATE, /

Tota! (o!utions Incor$orated 0T(I is a !eadin" I(O 331/2333 certified strate"y consu!tin"

or"ani%ation a&in" o&er a decade !on" e4$erience 5 $resence across a!! #a6or cities in India.

To create a philosophy and experience that provides clients with an enriched platform of

growth expansion and profit is why we exist.

4ur core existence rest on the work philosophy

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"Your Growth Is Our Aim"

1aving various national @ international alliances T+, has cemented its position as a leader in the

fields ofF

&. *arket esearch @ ,ntelligence

$. "udits (*ystery ,nternal 4perations)

L. 3ixed "sset *anagement +ystems (0arcoded 3,8 G>+

+olutions)

C. 0usiness eengineering >rograms

. +oftware +olutions

T+, has a dedicated team of specialists and experts that has been instrumental in building

and contributing to the business growth of our clients and we look forward to providing

many more solutions in a lot more areas in the near future.

Ho$in" to 7e $artners as your tota! so!utions $ro&ider8

TOTA* +ETAI* (O*UTION( IN,IA P9T. *T,. /

4ur latest venture is dedicated to the retail segment which has been growing exponentially

and has become the new star of the ,ndian success story.

#e proudly introduce T+>9 launched in early $%&% @ already boasts of several

success stories wherein it contributed towards introducing various brands from across the

globe and ,ndia into newer retail avenues and has established itself as a total retail

solutions provider.

T+>9 look forward to adding to your success as well through our proprietary solutions as

underF

&. etail =xpansion +trategies

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$. 3ranchise 8evelopment >rogram

L. 0rand 0uilding "ctivities

C. +4> 2reation @ ,mplementation

. 2ustomer 2entricity >rograms (3ocus Groups Hoice of the 2ustomer

>rograms 2*)

;. *ystery +hopping >rogram

#ith our experience we have also ventured into active retailing and will start launching our

own multibrand large formats across the country which will make retail democratic and

viable for all the stakeholders in the near future. #e hope and envision T+>9 to become

a very strong extended arm of T+, and look forward to a brighter tomorrow.

TOTA* +E(OU+CE ACA,EMY O- IN,IA

T",E is the strategic arm of the group which was cofounded by few of our loyal clients

who needed professional sustainable and scalable expertise in the areas of training and

development creation of standard operating procedures train the trainer programs

psychometric tests @ implementation of ob/ectives through focused interventions et all.

4ne of the revolutionary products that has changed the face of trainings and its

efficiency has been our 5= 9earning *anagement +ystem5 and its certification program

52enter of =xcellence5.

These programs have demonstrated tangible results in a very short span of time and has

given the ,ndustry an opportunity in uplifting its standards.

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T",E ensures that its interventions bring measureable and monitorable gains which

bring tremendous value towards customer satisfaction speed and service.

&. Theatrical 0ased Training >rogram

$. +4> 0ased Training

L. +oft +kills Training

C. =9earning *anagement +ystem

THE EMP*OYMENT CE** O- IN,IA

T=24, has been instrumental in identifying and ac!uiring talent right from the entry

level up to the 2M4 levels and has been instrumental in ensuring a healthy pipeline of

trained manpower for various ,ndustries.

The evolution of T=24, has been a strategic move to fulfill the demands of any business

venture @ to complete the lifecycle of services through the Total +olutions Group

companies.T=24, boasts of a central repository of data of various /obseekers across the country

and its collaboration with T",E ensures that not only the demand of a position gets

fulfilled but more importantly the skillsets re!uired for the /ob function are truly

addressed.

,t also channeli-es fresh talent through a uni!ue initiative with the T",E foundation

under the N,gniting *inds @ ,deas O === 2ertification >rogram.

#e hope that through this uni!ue amalgamation of talent and training we would be able

to address the human resource demands of the ,ndustry.

esource *anagement >rogram

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Hoice of the =mployee

+uccession *anagement

1 *anual @ estructuring =mployee Herification

2ampus >lacement @ ,nternship >rograms

THE *EA(IN) COMPANY 0T*C 5 -E,E+ATION O- +ETAI* 5 +ETAI* E(TATE

MEMBE+( 0-O++EM

"nother very important area wherein we have contributed is to ensure that the right

brands reach the right place at the right price.

T92 @ 34=* boasts of one of the largest networks of brands and locations across

,ndia and has been able to manage the demands of the growth of the ,ndustry with great

success.

The two companies work in tandem with leading national @ international brands and

have tieups with various real estate players individual owners of properties on high

streets and hence ensure a scientific matchmaking process that not only involves market

research but also ensures that transparent @ fair deals are executed within a reasonable

span of time.

The ecosystem formed ensures a symbiotic profitable scalable and sustainable business

environment leading to mutually beneficial longterm association for all.

9ocation ,dentification >rogram

8ue 8iligence @ 3easibility +tudies

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0rand Tie6ps

Poning @ *all *anagement +olutions

*arketing @ >romotional +trategies

Te *easin" Co#$any

IN9E(T IN IN,IA III

,nvest ,n ,ndia ,,, is a dedicated platform wherein it provides a onestopshop solution on

how to enter and to make investments into various ,ndustries into the ,ndian markets. ,t

was launched in +eptember $%&% in 9os "ngeles 6+".

,,, provides re!uisite information on sunrise and already established sectorsIindustries

and also provides advice on regulatory matters * @ " opportunities green field and

brown field pro/ects.

,,,s panel of experts and advisors provide the much needed assistance in providing

customi-ed solutions to your !ueries @ problems.

,,, also has the support of some large investors >= funds Henture 2apitalists "ngel

,nvestors 3amily 3unds 3unds of 3unds et all who will be interested in providing

funding to businesses in

,ndia.

eal =state "dvisory

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E, +olutions

oint Hentures *ergers "c!uisitions @ 2ollaborations

2.1 *iterature +e&ie'

3inancial ratio analysis is a process of determining and interpreting relationships

between the items to financial statements to provide a meaningful understanding of the

performance and financial position of an enterprise. atio analysis is an accounting tool

to present accounting variables in a simple concise intelligible and understandable form.

atio analysis is a study of relationship among various financial factors in a business.

Thus it seeks to measure the value of the entity and purpose which it pursues financial

analysis develops the steps of collecting shaping and treatment of range of management

information which may clarify the wanted diagnosis and prognosis.

*any researchers have studied financial ratios as a part of working capital management?

however very few of them have discussed the working capital policies in specific. +ome

earlier work by )u$ta 5 Heffner 01:2 examined the differences in financial ratios

averages between industries. The conclusion of both the studies was that differences do

exist in mean profitability activity leverages and li!uidity ratios amongst industry

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groups. Pinces et a!. 01:; used factor analysis to develop seven classifications of

ratios and found that classifications were stable over the &


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?on ?. Wi!d@ =.+. (u7ra#anya# 5 +o7ert -. Ha!sey 0233/ ,n his research article

on financial C performance he has pointed that he have said that the financial statement

analysis is the application of analytical tools and techni!ues to general purpose financial

statements and related data to derive estimates and inferences useful in business

analytics. 3inancial +tatements analysis reduces reliance on hunches guesses and

intuition for business decisions. ,t decreases the uncertainty of business analysis.

I.M. Pandey 0233:/ ,n his research article on financial performance he has pointed that

the financial statements contain information about the financial conse!uences and sources

and uses of financial resources one should be able to say whether the financial condition

of a firm is good or bad? whether it is improving or deteriorating. 4ne can relate the

financial variables given in financial statements in a meaningful way which will suggest

the actions which one may have to initiate to improve the firms financial condition.

+acc Mina4i A 02311/ ,n his research article on financial performance he has

pointed and suggested that the financial statement analysis involves analy-ing the

financial statements to extract information that can facilitates decision making. ,t is the

process of evaluating the relationship between components parts of the financial

statements to obtain a better understanding of an entitys positions and performance.

Priyaa


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2.2 ABOUT THE TOPIC

-INANCIA* (TATEMENT ANA*Y(I(

The process of reviewing and evaluating a companys financial statements(+uch as

balance sheet and trading and profit and loss statement) thereby gaining an

understanding of the financial health of the company and enabling more effective

decision making. 3inancial statement record financial data ? however this information

must be evaluated through financial statement analysis to become more useful to

investors shareholders managers and other interested parties.

3inancial statement are very useful as they serve varied affected group having an

economic interest in the activities in the business entity. The purpose served by financial

statement are as followsF

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The basic purpose of financial statement is communicated to their interested

users !uantitative and ob/ective information are useful in making economic

decision. +econdly financial statements are intended to meet the speciali-ed needs of

conscious creditors and investors. 3inancial statements are prepared to provide reliable information about the

earning of business enterprise and it ability to operate of profit in future. The users

who are interested in this information are generally the investors creditors

suppliers and employees. 3inancial statements are intended to provide the base for tax assessments.

3inancial statement are prepare in a way a provide information that is useful in

predicting the future earning power of the enterprise. 3inancial statements are prepared to provide reliable information about the

changes in economic resources. 3inancial statements are prepared to provide information about the changes in net

resources of the organi-ation that result from profit directed activities.

Thus financial statement satisfy the information re!uirements of a wide crosssection of

the society representing corporate managers executives bankers creditors shareholders

investors laborers consumers and government institution.

Metods Of -inancia! Ana!ysis/

3inancial "nalysis is an art and as such there are various approaches towards financial

analysis. Two basic approaches areF

HO+IONTA* ANA*Y(I(/

,n such type of analysisfinancial statement for a number of years are reviewed and

analysed. 3igures for two or more years are contained in such type of analysis and these

figures are placed side by side to facilitate comparison. +uch analysis indicates the

increase or decrease in these items not only in absolute figures but also in percentage

form. Thus it involves making comparisons establishing relationship among related

items of an enterprise for a number of years. #hen a data about sales cost of production

profits etc. are compared for two or more years of a firm they indicate the areas of

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strength and weakness of the enterprise. ,t also helps in knowing the trend of business.

+ince such type of analysis is based on the data from yeartoyear rather than only one

year it is also called ,YNAMIC ANA*Y(I(.

9E+TICA* ANA*Y(I(/

,n such type of analysis financial statement for a single year or on a particular date are

reviewed and analy-ed with the help of proper device like ratios. ,t involves a study of

!uantitative relationship among various itemsof balance sheet or >rofit @ 9oss "ccount

of a single period. The items in the financial statements are expressed as a percentage of

total and the total is taken as e!uivalent to &%%. +tatements containing such analysis are

termed as 24**4E +,P= +T"T=*=ET.

Hertical analysis is not very useful for a proper analysis of the companys financial

position because it depends on the data of a single period whereas the business is

dynamic process. ,n comparison to vertical analysis hori-ontal analysis is more useful

because it brings out more clearly the nature and trends of current changes affecting the

enterprise. 1ori-ontal presentation emphasi-es the fact that statement for a series of

periods is far more significant than those for single period and that the accounts for one

period are but an installment of what is essentially a continuous history.

Ad&anta"es/

,t simplifies the financial statements.

,t helps in comparing of different si-e with each other.

,t helps in trend analysis which involves comparing a single company over a

period. ,t highlights important information in simple form !uickly. " user can /udge a

company by /ust looking at few numbers instead of reading the whole financial

statements.

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PU+PO(E/

The ob/ective of financial statements is to provide information about the financial

position performance and changes in financial positions of an enterprise that is useful to

a wide a range of users in making economic decisions. 3inancial statements provide

useful information to a wide range of usersF

(. No. Users Pur$ose

&.

Mana"ers

To manage the affairs of the company by assessing its

financial and performance positions and taking important

business decisions.

$. (areo!ders

To assess the risk @ return of their investment in the

company and take investment decision based on the

analysis.

L.Pros$ecti&e

In&estors

To assess the viability of investing in the company.

,nvestors may predict the future dividend based on the

profits disclosed in financial statements.

C. -inancia!

Institutions

To decide whether to grant a loan or credit to a business.

3inancial ,nstitutions assess the financial health of a

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business to determine the probability of bad loan.

. (u$$!iers

To assess the credit worthiness of a business and ascertain

whether to supply goods on credit. +uppliers need to know

if they will be paid.

;.Custo#ers To assess whether the supplier has the resources to ensures

a steady supply of goods in future.

Q. E#$!oyees

3or assessing the companys profitability and its

conse!uences on their future remunerations and /ob

security.

:. Co#$etitors

To compare the their performance with rivals companies

to learn and develop strategies to improve their

competitiveness.


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Co##on (i%e (tate#ent/ ,n these statements various figures are converted into

percentages to some common base. ,n profit and loss account sales figure is taken as &%%

and all other figures are expressed as percentage of sale. +imilarly in 0alance +heet total

assets are taken as &%% and all assets are expressed as percentage of the total.

Trend Ana!ysis/ ,t is one of the most useful form of hori-ontal analysis in making

comparative study of the financial statement for a number of years. 3or calculating trend

percentages any year is selected as the 'base year. =ach item of the base year is assumed

to be e!ual to &%% and on that basis the percentage of each item of each year is calculated.

The trend percentage is helpful in revealing the trend increase or decrease in various

items.

Accountin" +atiosF " ratio is simply one number expressed in relation to another and a

study of the relationship between various items or group of items is known as 'atio

"nalysis. ,t simplifies and summari-es a long array of accounting data to provide useful

information regarding the li!uidity solvency profitability etc. .

Cas -!o' (tate#entF

,t shows the inflows and outflows of cash and cash e!uivalents during a particular period

and analy-es the reasons for changes in balance of cash between the two balance sheet

dates. " firm may earn huge profits yet it may have paucity of cash or when it suffered a

loss it may still have plenty of cash. The reason for these deviations can be analy-ed and

understood by preparing cash flows statements.

-und -!o' (tate#ent/

" fund flow statement is designed to show the changes in the assets liabilities and capital

of the firm between the dates of two balance sheets. ,t indicates the causes of changes in

the working capital of an enterprise during the year. ,t also discloses the sources from

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which funds are obtained by the enterprise and the specific uses to which funds were

applied.

Brea< E&en Point Ana!ysisF

0reakeven point is the point where total costs are exactly e!ual to the total sales. "t this

point there is neither any profit nor any loss.

+atio Ana!ysis

"ccording to 8iamond ($%%;) atio analysis is a method of expressing relations among

various items in a companys financial statement. 1owever ratios are not substitutes for

looking dipper into the financial position of the company.

The main techni!ue used for financial analysis of *inda corporation limited is ratio

analysis therefore we will see ratio analysis in detail.

-inancia! ratio

3inancial ratios are very powerful tools to perform some !uick analysis of financial

statements. "ccounting atios are used to describe significant relationships which exist

between figures shown in balance sheet in a profit and loss account in a budgetary

control system or in any part of the accounting organi-ation.

atio analysis is a study of relationship among various financial factors in a business. ,t is

a techni!ue of analy-ing the financial statements so as to check financial health of the

organi-ation for its variousF

stakeholders

investors

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customers

financial institutions

8epartments of government like statistical department revenue department?

+o as to fulfill its goal such as wealth maximi-ation banking transactions credit

worthiness for /ob etc.

#e analy-ed financial statement of *inda 2orporation 9imited to draft various

inferences for its various stakeholders including but not limited to shareholders

investors customers vendors financial institutions employees and last but not the least

government.

C!assifications of +atios

+ATIO(

*iDuidity +atio (o!&ency +atio Acti&ity +atio Profita7i!ity+atio

*IUI,ITY +ATIO

9i!uidity ratio expresses a company5s ability to repay shortterm creditors out of its total

cash. The li!uidity ratio is the result of dividing the total cash by shortterm borrowings.

,t shows the number of times shortterm liabilities are covered by cash. ,f the value is

greater than &.%% it means fully covered.

They comprise of the following two ratiosF

a) 2urrent ratiob) 9i!uid ratio

(O*9ENCY +ATIO

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The solvency ratio indicates whether a companys cash flow is sufficient to meet its

shortterm and longterm liabilities. The lower a company5s solvency ratio the greater the

probability that it will default on its debt obligations.

The most common solvency ratios includeF

a) 8ebt O=!uity ratiob) Total assets to debt ratioc) >roprietary ratio

ACTI9ITY +ATIO

"ctivity ratios are used to measure the relative efficiency of a firm based on its use of its

assets leverage or other such balance sheet items. These ratios are important in

determining whether a company5s management is doing a good enough /ob of generating

revenues cash etc. from its resources.

"ctivity ratios can be classified as followsF

(a) 8ebtors turnover ratio(b) 2reditors turnover ratio(c) #orking capital turnover ratio(d) 3ixed assets turnover ratio

P+O-ITABI*ITY +ATIO

>rofitability ratios measure a companys ability to generate earnings relative to sales

assets and e!uity. These ratios assess the ability of a company to generate earnings

profits and cash flows relative to relative to some metric often the amount of money

invested. They highlight how effectively the profitability of a company is being managed.

,mportant profitability ratios areF

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a) Eet >rofit ratiob) eturn on investment or return on capital employedc) =arnings per shared) 8ividend per share

;.1 PU+PO(E O- (TU,Y

The purpose of study is to evaluate the financial performance of the company to

understand the li!uidity profitability and efficiency of the company and to evaluate and

analy-e various fact of the financial statement of the company.

;.2 +E(EA+CH OB?ECTI9E(

The primary ob/ective of the study is to find out the financial performance of the

company. There have been various secondary ob/ectives of the study which are as

followsF

To +tudy the financial statement of the company i.e. 0alance +heet @ income

statement. To understanding and assessment of financial ratios based on the statement of the

company. To recogni-e the position of the company through these ratio and data available.

To see the applicability and usability of theory which has been taught during the

first year of the course.

;.; +E(EA+CH METHO,O*O)Y

" broad definition of research is given by *artyn +huttleworth',n the broadest sense of

the word thee definition of research includes any gathering of data information and facts

for the advancement of knowledge.

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esearch is a systematic in!uiry to describe explain predict and control the observed

phenomenon. esearch involves inductive and deductive methods. ,nductive methods

analyse the observed phenomenon and identify the general principles structures or

processes underlying the phenomenon observed? deductive methods verify the

hypothesi-ed principles through observations. The purposes are differentF one is to

develop explanation and the other is to test the validity of the explanations.

TYPE( O- +E(EA+CH/

" research design is the specification of method and procedure for accruing the

information needed. ,t is overall operational pattern of frame work of pro/ect that

stipulates what information is to be collected for sources by that procedures.

,escri$ti&e +esearc desi"n is a$$ro$riate for tis study.

8escriptive study is used to study the situation. The ma/or purpose of descriptive research

is the description of the state of affairs as it exists at present. This study helps to describe

the situation. " detail descriptive about present and past situation can be found out by the

descriptive study.

The methods of research utili-ed in descriptive research are survey methods of all kinds

including comparative and correlation methods. This involves the analysis of the situation

using the secondary data.

(ources Of ,ata/

Generally we can collect data from two sources primary sources and secondary sources.

8ata collected from primary sources are known as >rimary data and data collected from

secondary sources are secondary data.

3ollowing are the secondary sources of data that are studied and analysed for this pro/ectF

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"nnual eport 4f The 2ompany

3inancial 0alance +heet

,ncome +tatement

3inancial reports

8ifferent reports prepared by 3inance 8epartment

*i#itation Of Te (tudy/

The study provides an insight into the financial aspects of organi-ation. =very study will

be bound with certain limitation. The below mentioned are the constraints under which

the study is carried out.

4ne of the factors of the study was lack of availability of ample information.

*ost of the information has been kept confidential and as such as not assed as art

of policy of company.

Time is an important limitation. The whole study was conducted in a period of Q

to : weeks which is not sufficient to carry out proper interpretation and analysis.

The changes made in the schedule ,H have posed as a ma/or problem which have

a caused a difficulty in the valuation of items in the balance sheet and other

reports.

8ifferent companies operate in different industries each having different

environmental conditions such as regulation market structure etc. +uch factors

are so significant that a comparison of two companies from different industries

might be #is!eadin".

3inancial accounting information is affected by estimates and assumptions.

"ccounting standards allow different accountin" $o!icies which impairs

comparability and hence ration analysis is less useful in such situations.

atio analysis explains relationships between $ast infor#ationwhile users are

more concerned about current and future information.

+ome firms resort to window dressing their financial statement to cover up bad

financial position on the eve of accounting date.

3inancial statement record only those events and transactions which can be

expressed in terms of money. Rualitative aspects of business units are omitted

27


28/55

thus change in management reputations of the business customer satisfaction etc.

are ignored which have a vital bearing on the profitability of company.

*IUI,ITY +ATIO

CU++ENT +ATIO

2urrent ratio may be defined as the relationship between current assets and current

liabilities. This ratio also known as #orking capital ratio is a measure of general li!uidity

and is most widely used to make the analysis of a shortterm financial position (or)

li!uidity of a firm. ,t measures the li!uidity position of the firm with its future events.

*ain purpose of this ratio is to know the has power to meet its current liabilities.

Current +atio F Current AssetsGCurrent *ia7i!ities

Co#$onents of Current +atio

CU++ENT A((ET( CU++ENT *IABI*ITIE(

2ash in hand 4utstanding or accrued expenses

2ash at bank 0ank over draft

0ills receivable 0ills payable

*arketable securities +hortterm advances

+hortterm investments +undry creditors

+undry debtors 8ividend payable

>repaid expenses ,ncometax payable

28


29/55

TAB*E NO. C1

Current +atio

0A#ount in +s. 0A#ount in +s.

Year Current Assets Current Liabilities Ratio

23121;


30/55

The huge increase in sundry debtors resulted an increase in the ratio which is above the

benchmark level of $F& which shows the comfortable position of the firm.

UIC= +ATIO/

Ruick ratio is a test of li!uidity than the current ratio. The term li!uidity refers to the

ability of a firm to pay its shortterm obligations as @ when they become due. Ruick ratio

may be defined as the relationship between !uick or li!uid assets and current liabilities.

"n asset is said to be li!uid if it is converted into cash within a short period without loss

of value.

uic< +atio F *iDuid AssetsG Current *ia7i!ities

Co#$onents of uic< or *iDuid ratio

UIC= A((ET( CU++ENT *IABI*ITIE(




+undry debtors +hortterm advances

*arketable securities +undry creditors

Temporary investments 8ividend payable

,ncome tax payable

TAB*E NO. C2

uic< +atio

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Year Quick Assets Current Liabilities Ratio

23121; :


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"lthough receivable debtors and bills receivable are generally more li!uid than

inventories yet there may be doubts regarding their reali-ation into cash immediately or

in time. 1ence absolute li!uid ratio should also be calculated together with current ratio

and !uick ratio so as to exclude even receivables from the current assets and find out the

absolute li!uid assets.

A7so!ute !iDuid ratioF A7so!ute !iDuid assetsG Current !ia7i!ities

"bsolute li!uid assets include cash in hand etc. The acceptable forms for this ratio is %D

(or) %.F& (or) &F$ i.e. s.& worth absolute li!uid assets are considered to pay s.$ worth

current liabilities in time as all the creditors are nor accepted to demand cash at the same

time and then cash may also be reali-ed from debtors and inventories.

Co#$onents of A7so!ute *iDuid +atio

AB(O*UTE *IUI, A((ET( CU++ENT *IABI*ITIE(


32


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,nterest on 3ixed 8eposit 0ills payable

+hortterm advances

+undry creditors

8ividend payable

,ncome tax payable

TAB*E NO. C;

A7so!ute Cas +atio


Year Absolute Liquid Assets Current Liabilities Ratio

23121; L:%: CQ&&Q&< &.&C

231;1 L;C


34/55

Inter$retation

The current assets which are ready in the form of cash are considered as absolute li!uid

assets. 1ere the cash and bank balance are absolute li!uid assets. ,n the year $%&$&L

the cash and bank balance is decreased due to decrease in the deposits and the current

liabilities. That causes a slight increase in the current years ratio.

*E9E+A)E +ATIO(

P+OP+IETA+Y +ATIO

" variant to the debte!uity ratio is the proprietary ratio which is also known as

e!uity ratio. This ratio establishes relationship between share holders funds tototal assets of the firm.

Pro$rietary ratioF O'ners fundsG Tota! assets

Co#$onents Of Pro$rietary +atio

O'ners -UN, TOTA* A((ET(

4wners 2apital 3ixed "ssets

eserves @ +urplus Current Assets

2ash in hand @ at bank

0ills receivable

,nventories

*arketable securities

+hortterm investments

+undry debtors >repaid =xpenses

34


35/55

TAB*E NO. C

Pro$rietary +atio

(A#ount in +s. (A#ount in +s.

Year Owners Funds otal Assets Ratio

23121; ;CQL; &%;L:$% %.L

231;1


36/55

Total assets includes fixed and current assets. The fixed assets are reduced because of the

depreciation and there are no ma/or increments in the fixed assets. The current assets are

increased compared with the year $%&$&L. Total assets are also increased than precious

year which resulted an increase in the ratio than older.

ACTI9ITY +ATIO(

WO+=IN) CAPITA* TU+NO9E+ +ATIO

#orking capital of a concern is directly related to sales.

Wor


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*arketable securities +hortterm advances

+hortterm investments +undry creditors

+undry debtors 8ividend payable

>repaid expenses ,ncometax payable

TAB*E NO. C>

Wor


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Inter$retation

,ncome from services is greatly increased due to the extra invoice for +ervice >rovided

and the working capital is also increased greater due to the increase in from services

because the huge increase in current assets.

The income from services is raised and the current assets are also raised together resulted

in the decrease of the ratio of $%&L&C compared with $%&$&L.

-IJE, A((ET( TU+NO9E+ +ATIO

,t is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit

earning capacity of the firm. 1igher the ratio greater is the intensive utili-ation of fixed

assets. 9ower ratio means underutili-ation of fixed assets.

-i4ed assets turno&er ratioF Cost of (a!esG Net fi4ed assets

Cost of (a!es F Inco#e fro# (er&ices

Net -i4ed Assets F -i4ed Assets ,e$reciation

-i4ed Assets Turno&er +atio


Year Income From !erices &et Fi'ed Assets Ratio

23121; %;C &%;


39/55

2012-13 2013-140

1

2

3

4

5

67

3.69

6.82

FIXED ASSET TURNOVER RATIO

YEAR

RATIO

)ra$ No. .

Inter$retation

3ixed assets are used in the business for providing services. This ratio shows the firms

ability in generating sales from all financial resources committed to total assets. The ratio

indicates the account of one rupee investment in fixed assets.The income from services is

greaterly increased in the current year due to the increase in the service provided due to

the increase in extra invoice and the net fixed assets are reduced because of the increased

charge of depreciation. 3inally that effected a huge increase in the ratio compared with

the previous years ratio.

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CAPITA* TU+NO9E+ +ATIO

+ometimes the efficiency and effectiveness of the operations are /udged by

comparing the cost of sales or sales with amount of capital invested in the

business and not with assets held in the business though in both cases the same

result is expected. 2apital invested in the business may be classified as longterm

and shortterm capital or as fixed capital and working capital or 4wned 2apital

and 9oaned 2apital. "ll 2apital Turnovers are calculated to study the uses of

various types of capital.

Ca$ita! turno&er ratioF Cost of "oods so!dG Ca$ita! e#$!oyed

Cost of )oods (o!d F Inco#e fro# (er&ices

Ca$ita! E#$!oyed F Ca$ita! K +eser&es 5 (ur$!us

Ca$ita! Turno&er +atio


Year Income From !erices Ca%ital (m%lo)ed Ratio

23121; %;C ;CQL; %.


41/55

2012-13 2013-14

0.97

0.98

0.99

1

0.98

1.00

CAPITAL TURNOVER RATIO

YEAR

RATIO

)ra$ No. .:

Inter$retation

This is another ratio to /udge the efficiency and effectiveness of the company like

profitability ratio. The income from services is greater increased compared with the

previous year and the total capital employed includes capital and reserves @ surplus. 8ue

to huge increase in the net profit the capital employed is also increased along with

income from services. 0oth are affected in the increment of the ratio of current year.

CU++ENT A((ET( TO -IJE, A((ET( +ATIO

This ratio differs from industry to industry. The increase in the ratio means that trading is

slack or mechani-ation has been used. " decline in the ratio means that debtors and

stocks are increased too much or fixed assets are more intensively used. ,f current assets

increase with the corresponding increase in profit it will show that the business isexpanding.

Current Assets to -i4ed Assets +atioFCurrent AssetsG-i4ed Assets

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Co#$onent of Current Assets to -i4ed Assets +atio

CU++ENT A((ET( -IJE, A((ET(

2ash in hand *achinery

2ash at bank 0uildings

0ills receivable >lant

*arketable securities Hehicles

+hortterm investments

TAB*E NO. C

Current Assets To -i4ed Assets +atio


Year Current Assets Fi'ed Assets Ratio

23121;


43/55

2urrent assets are increased due to the increase in the sundry debtors and the net fixed

assets of the firm are decreased due to the charge of depreciation and there is no ma/or

increment in the fixed assets. The increment in current assets and the decrease in fixed

assets resulted an increase in the ratio compared with the previous year.

P+O-ITABI*ITY +ATIO(

)ENE+A* P+O-ITABI*ITY +ATIO(

NET P+O-IT +ATIO

Eet profit ratio establishes a relationship between net profit (after tax) and sales

and indicates the efficiency of the management in manufacturing sellingadministrative and other activities of the firm.

Net $rofit ratioFNet $rofit after ta4GNet sa!es

Net Profit after Ta4 F Net Profit 0 ,e$reciation 0 Interest 0 Inco#e Ta4

Net (a!es F Inco#e fro# (er&ices

,t also indicates the firms capacity to face adverse economic conditions such as

price competitors low demand etc. 4bviously higher the ratio the better is the

profitability.

Net Profit +atio


Year &et *ro+it A+ter a' Income +rom !erices Ratio

23121; &:$


44/55

2012-13 2013-14

0

0.1

0.2

0.3

0.4

0.5

0.33 0.42

NET PROFIT RATIO

YEAR

RATIO

)ra$ No. .

Inter$retation

The net profit ratio is the overall measure of the firms ability to turn each rupee of

income from services in net profit. ,f the net margin is inade!uate the firm will fail to

achieve return on shareholders funds. 1igh net profit ratio will help the firm service in

the fall of income from services rise in cost of production or declining demand. The net

profit is increased because the income from services is increased. The increment resulted

a slight increase in $%&L&C ratio compared with the year $%&$&L.

OPE+ATIN) P+O-IT

4perating ratio establishes the relationship between cost of goods sold and other

operating expenses on the one hand and the sales on the other.

O$eratin" ratioF O$eratin" costG Net sa!es

O$eratin" $rofit F Net sa!es O$eratin" cost

O$eratin" $rofit ratioF O$eratin" $rofitG (a!es

44


45/55

1owever Q to :D may be considered to be a good ratio in case of a manufacturing under

taking. 4perating profit ratio is calculated by dividing operating profit by sales.

O$eratin" Profit


Year O%eratin$ *ro+it Income From !erices Ratio

23121; L&:;Q& %;C %.Q

231;1 ;Q&


46/55

+ETU+N ON TOTA* A((ET( +ATIO/

>rofitability can be measured in terms of relationship between net profit and assets. This

ratio is also known as profittoassets ratio. ,t measures the profitability of investments.

The overall profitability can be known.

+eturn on assetsF Net $rofitG Tota! assets

Net Profit F Earnin"s 7efore Interest and Ta4

Tota! Assets F -i4ed Assets K Current Assets

+eturn on Tota! Assets +atio


Year &et *ro+it A+ter a' otal Assets Ratio

23121; &:$


47/55

Inter$retation

This is the ratio between net profit and total assets. The ratio indicates the return on total

assets in the form of profits. The net profit is increased in the current year because of the

increment in the income from services due to the increase in +ervice >rovided. The fixedassets are reduced due to the charge of depreciation and no ma/or increments in fixed

assets but the current assets are increased because of sundry debtors and that affects an

increase in the ratio compared with the last year i.e. $%&$&L.

+E(E+9E( 5 (U+P*U( TO CAPITA* +ATIO/

,t reveals the policy pursued by the company with regard to growth shares. " very high

ratio indicates a conservative dividend policy and increased ploughing back to profit.

1igher the ratio better will be the position.

+eser&es 5 sur$!us to ca$ita!F +eser&es5 (ur$!usGCa$ita!

+eser&es 5 (ur$!us To Ca$ita! +atio


Year +eser&es 5 (ur$!us Ca$ita! +atio

23121; LQQCLQ &:Q&


48/55

2012-13 2013-14

0

1

2

3

4

5

2.02

4.19

RESERVE & SURPLUS TO CAPITAL RATIO

YEAR

RATIO

)ra$ No. .12

Inter$retation

The ratio is used to reveal the policy pursued by the company a very high ratio. 1igher

the ratio better will be the position.

The reserves @ +urplus is increased in the year $%&L&C as the >rofit is increased due to

increase in +ervice >rovided. 0ut the capital is remaining constant.

+o the increase in the reserves @ surplus caused a greater increase in the current years

ratio compared with the older.

48


49/55

O9E+A** P+O-ITABI*ITY +ATIO(

+ETU+N ON IN9E(TMENT

eturn on share holders investment popularly known as eturn on investments (or)

return on share holders or proprietors funds is the relationship between net profit

(after interest and tax) and the proprietors funds.

+eturn on sareo!ders in&est#ent F Net $rofit 0after interest and ta4G(areo!ders

funds

The ratio is generally calculated as percentages by multiplying the above with &%%.

Ta7!e No. .1;

)ra$ No. .1;

49

+eturn on In&est#ent


Year &et *ro+it A+ter a' Owners Ca%ital Ratio

23121; &:$


50/55

Inter$retation

This is the ratio between net profits and shareholders funds. The ratio is generally

calculated as percentage multiplying with &%%.

The net profit is increased due to the increase in the income from services and the 2apital

funds are increased because of reserve @ surplus. +o the ratio is increased in the current

year.

50


51/55

>.1 -IN,IN)( O- THE (TU,Y

The current ratio has shown in a fluctuating trend as &.


52/55

The return on investment is increased from %.L$ to %.C$ compared with the previous

year. 0oth the profit and shareholders funds increase cause an increase in the ratio.

52


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+ECOMMEN,ATION( AN, (U))E(TION(

#ith reference to the findings of the study the researcher recommends the followingF

4rgani-ation is doing well in the respective field of mystery shopping and serviceconsultancy. "ll the financial ratios are increasing on yearly basis.

4rgani-ation has sufficient amount of current assets and current liabilities are

decreasing. Therefore 2urrent ratio is increasing. , would like to suggest organi-ation

should invest in the market securities that yields the income for organi-ation in future.

2urrent "ssets to fixed assets ratio shows that current assets plays a vital role in total

assets. , suggest the company to employ the current assets effectively for generating

the revenue.

"s >rofit of the organi-ation is increasing trend company should look up for growth

via expansion and diversification of business.

3inancial ratios should be used with careful examination and proper understanding of

the meaning implication and effect of the actual figures shown in financial

statements in order to avoid making wrong /udgments conclusions and decision.

3inancial ratios should be /udiciously used by firms investors lenders shareholders

managers and other stakeholders in view of their numerous benefits and limitations.

CONC*U(ION

53


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The companys overall position is at a good position. >articularly the current years

position is well due to raise in the profit level from the last year position. ,t is better for

the organi-ation to diversify the funds to different sectors in the present market scenario.

.

The main ob/ective of all the investor is to earn the higher return on their investment so

they always try to invest in those securities and fund which give them higher return with

a less risk.

,n this pro/ect , tried to focus on the performance of various funds of the Total +olution

Group. 3rom the various data available for helping in the pro/ect compilation we said that

the performance of the various funds of the Total +olution Group is better than previous

year i.e. $%&$&L.

, also got useful insights regarding financial analysis of this organi-ation and about their

proceedings and also its general background. ,t helped me gain useful information about

how the revenue management is actually practiced.

The ma/ority of the companys profitability ratio show increasing trend. The various ratio

that have been analy-ed interpret that the company has a good financial position @ the

overall credibility is also very good. The performance of the company can be considered

as satisfactory although there is a whole lot of scope for improvement.

54


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BIBI*O)+APHY

BOO=(

.>. ustagi ($%&L)F 3,E"E2,"9 *"E"G=*=ET OTheory 2oncepts @ problems

Taxmann >ublication Eew 8elhi evised =dition

Khan *.A. @ ain >.K. (&ublication Eew 8elhi

fifth =dition

?OU+NA*

8r. >romod Kumar? ' "nalysis of financial statement of ,ndian ,ndustries +au/aniya

publication 9td. &erformance of 4rganisation 4hio 6niversity +chool 4f *anagement.

>riyaaks (*ar $%&$)F "naly-e the relationship between 3inancial +tatement.

WEB(ITE

httpsFIIen.wikipedia.orgIwikiIfinancialSanalysis

httpFIIwww.investopedia.comItermsIfIfinancialanalysis.asp

www.totalsolutions.inIaboutIreports
https://en.wikipedia.org/wiki/financialhttp://www.investopedia.com/terms/f/financial-analysis.asphttp://www.totalsolutions.in/https://en.wikipedia.org/wiki/financialhttp://www.investopedia.com/terms/f/financial-analysis.asphttp://www.totalsolutions.in/

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