SUMMER TRAINNING REPORT

ON

ORGANIZATIONAL STUDY AT DIGJAM LTD & RESEARCH WORK ON

COMPARISON OF RATIO ANALYSIS OF DIGJAM LTD V/S RAYMOND LTD

SUBMITTED BYNIRAV MEHTA

MBA Sem-III

Guided byPROF. ASHISH NATHWANI

ACADEMIC YEAR2009-2011

SUBMITTED TOJAYSUKHLAL VADHAR INSTITUTE OF MANAGEMENT STUDIES

(JVIMS)BIPIN T. VADHAR COLLEGE OF MANAGEMENT

JAMNAGAR

AFFILIATED TOGUJARAT TECHNOLOGICAL UNIVERSITY

AHMEDABAD

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INDIAN TEXTILE INDUSTRY

INTRODUCTION

The Indian textile industry has a significant presence in the economy as well as in the

international textile economy. Its contribution to the Indian economy is manifested in

terms of its contribution to the industrial production, employment generation and foreign

exchange earnings. It contributes 20 percent of industrial production, 9 percent of

excise collections, 18 percent of employment in the industrial sector, nearly 20 percent

to the countries total export earning and 4 percent to the Gross Domestic Product.

In human history, past and present can never ignore the importance of textile in a

civilization decisively affecting its destinies, effectively changing its social scenario. A

brief but thoroughly researched feature on Indian textile culture.

HISTORY OF TEXTILE INDUSTRY : -

India has been well known for her textile goods since very ancient times. The traditional

textile industry of India was virtually decayed during the colonial regime. However, the

modern textile industry took birth in India in the early nineteenth century when the first

textile mill in the country was established at fort gloster near Calcutta in 1818. The

cotton textile industry, however, made its real beginning in Bombay, in 1850s. The first

cotton textile mill of Bombay was established in 1854 by a Parsi cotton merchant then

engaged in overseas and internal trade. Indeed, the vast majority of the early mills were

the handiwork of Parsi merchants engaged in yarn and cloth trade at home and Chinese

and African markets. The first cotton mill in Ahmedabad, which was eventually to

emerge as a rival centre to Bombay, was established in 1861. The spread of the textile

industry to Ahmedabad was largely due to the Gujarati trading class.

The cotton textile industry made rapid progress in the second half of the nineteenth

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century and by the end of the century there were 178 cotton textile mills; but during the

year 1900 the cotton textile industry was in bad state due to the great famine and a

number of mills of Bombay and Ahmedabad were to be closed down for long periods.

However, during the period 1922 to 1937 the industry was in doldrums and during this

period a number of the Bombay mills changed hands. The second World War, during

which textile import from Japan completely stopped, however, brought about an

unprecedented growth of this industry. The number of mills increased from 178 with

4.05 lakh looms in 1901 to 249 mills with 13.35 lakh looms in 1921 and further to 396

mills with over 20 lakh looms in 1941. By 1945 there were 417 mills employing 5.10 lakh

workers.

The cotton textile industry is rightly described as a Swadeshi industry because it was

developed with indigenous entrepreneurship and capital and in the pre-independence

era the Swadeshi movement stimulated demand for Indian textile in the country.

The partition of the country at the time of independence affected the cotton textile

industry also. The Indian union got 409 out of the 423 textiles mills of the undivided

India. 14 mills and 22 per cent of the land under cotton cultivation went to Pakistan.

Some mills were closed down for some time. For a number of years since

independence, Indian mills had to import cotton from Pakistan and other countries.

After independence, the cotton textile industry made rapid strides under the Plans.

Between 1951 and 1982 the total number of spindles doubled from 11 million to 22

million. It increased further to well over 26 million by 1989-90.

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BRIEF HISTORY

Formally, this mill was established in the area of Shrinagar-Kashmir. The name of mill

was “Shri Karansingh Woolen Mills” which was promoted by Mr.A.K.Watter. In 1948,

when Pakistan attacked on Jammu-Kashmir, Mr.A.K.Watter came towards this area

with the view to set a mill somewhere in Gujarat in the coasted areas. During those

days, Jam Sahib used to rule over Jamnagar. When he learnt about Mr.A.K.Watter, he

permitted Mr.A.K.Watter to set up mill within his provinces. Besides he also offered

attractive concessions. He gave:

1) 40 acres of land free of charge

2) 20 lacks loan towards equity

3) Free import of raw material

4) Exception from state taxes

This A.K. Wattel starts mill and give the name “Shri Digvijay Wollen Mill” to give honor to

Jamsaheb which is today famous with the name of DIGJAM LIMITED. In the year of

1948 the foundation store was laid by Shri H.H. Krishna Kumar Singh, the king of

Bhavnagar. In 1949 civil construction of mills was commenced and in 1952 the trial

production was started.

Around 1954 BIRLA took over the reigns of mills in their hands and since Digjam is a

Birla managed company a unit of Birla VXL Ltd as S.K. Birla Group Company. The

name of the company now stands change to DIGJAM LIMITED in which “DIG” for

Digvijay Wollen Mills and “JAM” for Jamnagar unit.

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Company Profile -

DIGJAM Limited, an S K Birla Group Company, began its activites nearly 60

years back in Jamnagar, Gujarat. Since then, it has been catering to the ever-growing

demands of the Clothing and Fashion industry, in the domestic as well as the

international markets.

Digjam Limited is a leading textile company in India, manufacturer of fabrics for

suiting and casual wear. In recent years, the company restructured its business

portfolios to focus as a textile company manufacturing and marketing fabrics and ready-

to-wear clothing under its own brands.

A complete vertically integrated plant, Digjam has ultra modern production

facilities to convert wool tops to finished fabrics through different processes of Dyeing,

Spinning, Weaving and Finishing using state-of-the-art machinery imported from

France, Germany, Switzerland and Italy. Stringent quality checks at every stage and

process enabled Digjam to bag the prestigious ISO 9001 certification. Keeping pace

with the complex requirements of the industry, Digjam expanded its production capacity

to over 5 million meters, of which 35%-40% (approximately) is exported to major

countries across the globe.

Andersen Consulting, a leading management and corporate advisors agency,

undertook a major review of the operational parameters of our textile company.

Following a thorough review of the operating and marketing practices,

recommendations were made which now form the basis of our strategic marketing and

manufacturing thrusts spanning the coming 3-4 years. The company has also initiated

steps to strengthen its organization and induct the youth and skills necessary to attain

results from this strategic shift-cum-consolidation exercise.

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While the company lays uniform stress on all fundamental aspects such as

quality, designs and cost-friendliness for products under all its brands, DIGJAM is

undoubtedly its premium fabrics brand. DIGJAM has a high-end fabric brand presence

in the domestic market, reputed for its finish and quality. The company manufactures

over 3000 design-shade combinations each year in Light Wool, Polyester Wool and

Woolen fabrics for the DIGJAM brand alone. Constant research on designs ensures

creation of innovative future trends. In the new millennium, DIGJAM introduced super-

premium fabrics designed by European experts (with whom we work regularly and

extensively) comprising fine wool yarn of Super 150s and Super 120s and occasionally

blended with exotic fibres like Silk or Cashmere.

Dressing in India has come of age - rising affluence levels, increased media

exposure of international fashions and a growing tendency towards self-indulgence

have all contributed to it. The all round impact is visible with the influx of international,

and domestic products and brands in both, formal and casual wear. Indian customer

has choice today, but one where we are determined to make and sustain our mark.

The DIGJAM brand will increasingly reflect, both tradition and modernity in its

positioning, product range and marketing approach. We intend to position the brand as

the clear favorite for a wider, but demanding clientele with special emphasis on

becoming the preferred premium choice for the youthful consumer. This segment offers

a high potential in terms of market size and also presents a tougher challenge to us in

terms of providing satisfaction. DIGJAM's superior product quality is at par with global

standards and many of the world's best readymade brands use fabrics produced by us.

A major proportion of our output is exported to USA, Europe, Middle East and Far East.

This bodes well for our future as our preeminent position as one of the largest

manufacturer of textiles from India.

DIGJAM products and their ranges are available at its exclusive showrooms and over

3000 other retail outlets across the country

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ACHIEVEMENTS

Digjam has achieved also the certificate of Confidence in Textiles.

They have even achieved the Certificate of Recognition.

By using the best technology and machineries available, DIGJAM has achieved

the ISO 9001 International Quality Certificates.

The present production capacity is of 20000 meters of woolen per day, which is one

of the highest in the textile industry.

Bureau of Indian Standards License for the Quality Management Systems

Certification

For four consecutive years DIGJAM has received the highest Exporter Award in the

woolen worsted category from the Export Promotion Council of India.

The first and only woolen worsted mill in India to be awarded the status of

“ACCREDIATED MILL” from internationally renewed DuPont.

They have got Wool mark wool blend licenses from international wool secretariat.

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ORGANISATION STRUCTURE:

1. President

2. Vice President

Sales

export

3. General Manager

Personnel

HRD

Sulzer & Weaving

Spinning

Finishing

Financing

4. Deputy General Manager

Raw Material & Store

Mechanical Engineer

Sulzer

Management Information System

Electric Data Processing

5. Senior Manager

6. Manager

7. Assistant Manager

8. Senior Officer

9. Officer

10.Supervisor

11.Junior Supervisor

12.Trainee

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PRODUCTIONDEPARTMENT

Plant Location: -

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Plant location may be understood as the function of determining where the

plant should be located for maximum operation, economy and effectiveness. The

selection of place for locating a plant is one of the most important functions which are

handled by the entrepreneur while launching a new enterprise.

DIGJAM is located at the coastal region of Jamnagar at Gujarat, because

this land is given by H.H.JamSaheb. This place is helpful to import raw material like wool

and export finished products and also helpful in transportation facilities because of remote

town. The total weaving capacity of the plant is 14000 meter per day. The plant spread

over 47 acres, 515 employees and executives and dedicated force of 1300 employees.

Plant Layout: -

Plant layout refers to the arrangement of the production facilities in a

scientific way such that the production continues softly and without any interruption.

Plant Layout is the concept in which the arrangement of different sections of the

production dept is done. The layout is designed in such a way that the not required

movement of machines is eliminated.

The layout can be classified into four types:

1.) Product Layout

2.) Process Layout

3.) Fixed Position Layout

4.) Combined / Mixed Layout

The company operates in the woolen worsted textile segment and has

composite mill with having a certificate of ISO 9001. DIGJAM covers more than 19000

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square meters of plant area with nearly 220 machines for manufacturing high quality

suiting at Jamnagar. The type of layout used at DIGJAM is Process Layout. The

machinery remains at the fixed place and material flows to one machine to another. The

sequence of the machines is not changed frequently.

Raw Material: -

At DIGJAM unit major raw material manufactured of fabric is as follows:

POLYESTER:

It is man made fiber. The raw material “polyester tow” in a firm is bought

from Reliance Industries Limited. There are two types of Polyester Available:

1.) Trilobal

2.) Circular

The Trilobal polyester is more lustrous as compared to other one. The

polyester in DIGJAM is received from IOCL Pondicherry and RIL Patalganga. It comes

in bales of approximately 350 Kg. Some qualities of polyester are imported from

Germany and packing of 200 Kg is bought.

BASIC RAW MATERIAL:

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It is a natural fiber. The raw material, greasy wool is imported from

Australia and New Zealand and is extracted from a breed of sheep called “Marino” by

shearing machines in these countries. This wool is tested and certified for its quality by

IWTO (International Wool Testing Organization). The wool is received in the form of

bales weighting 125-150 Kg of each.

Inventory Management:-

Inventory control is also an essential aspect in production management.

There are few sectors which DIGJAM considers:

1.) Average periodical requirement of a production Dept.

2.) To maintain inventory by involving minimum funds.

3.) To keep stock according to the space availability.

4.) To maintain stock after considering purchase lead time

5.) At the time of maintaining stocks we should also consider the self-life

of material.

In DIGJAM the raw material used are woolen and polyester, for the control

of inventory they use ABC method i.e. Always Better Control.

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Production Planning:-

It is the nerve center, co-coordinating activities from the time of procurement

of order to delivery up to warehouse. It also ensures timely delivery of all fabrics in the

stipulated frame and in assortment.

In the planning dept. depending upon the manufacturing order the process

takes place. Depending on the order given by the party, planning dept. plans the first to the

last stage.

[a] Recombing 6 days

[b] Dyeing 8 days

[c] Spinning 15 days

[d] Warping 2 days

[e] Weaving 10 days

[f] Mending 7 days

[g] Finishing 12 days

Total 60 days

Planning dept also follow up the material process. In the planning dept. they

consider the allowance percentage depending upon the quality.

For e.g.

In the domestic market the delivery time: 70 to 75 days

In the export market the delivery time : 60 to 65 days

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PRODUCTION PROCESS

Scouring

Carding

Gilling

Combing

Dyeing

Recombing

Spinning

Weaving

Finishing

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Flow Chart of Grey Combing, Dyeing & Recombing

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Greasy Wool

Sorting / Trapping

Carding

Gilling - 2Gilling - 1

Scouring

Gilling - 3

Combing

Gilling (Post Combing)

Grey Wool Tops

Top Dyeing

Blend Preparation

Recombing

Recombed Tops

Polyester Tow

Convertor

3 Gilling

Polyester Top

Hydro for Polyester

Back Wash for wool

GREY COMBING: -

SCOURING: -

The wool contains dirt, mud, grease which has to be removed. Scouring removes the

dirt, grease, perspiration & salt from the wool by washing the wool fiber in non – ionic

detergent, with Soda –ash & hot water. (600 - 650 C)

Process flow of Scouring

Re- Opening

Washing

Squeezing

Drying

The Detergent used in the washing process is SAPCO – 1735 or RVKMA - 950. Grey

wool contains following: -

Grease – 15% - 20%

Dirt & Dust – 8 % - 10%

Vegetable Matters – 1%

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To remove the above impurities from the wool scouring is done. It’s done in

scouring machine, which consists of 3 units :

1. Hooper or Feeding Zone :

In Hooper, wool is fed which is then moved to washing bowls by means of

horizontal & vertical conveyor lattice.

2. Washing Bowls :

There are 5 washing bowls in scouring machine. Out of these five bowls 3

bowls are of detergent (non-ionic) or soap and soda solution, remaining 2 bowls

are of plain water. Here, Three times washing with the help of Non-ionic

Detergent and Two times with plain water.

3. Drying Units : -

A drying chamber is provided at the end of machine which consists

of steam heated coils & fan. It dries up the wool. In dryer chamber hot air is

passed form downward direction.

CARDING: -

Carding breaks open the entangled scoured wool and remove the “BURR” and

“SHODDY”, leaving the wool as a continuous web called “SLIVERS”

Purpose of carding: -

To remove the vegetable matter

To remover Burr and Shoddy wast

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Carding Machine: -

Model No. Of Machine

Thibeau TTC 2

RTC Thibeau 1

The Main objective of this process is Parallelization of fibers and removal of dust.

The By product of carding are burrs and shoody.

Burrs are the bunch of fibers in ball shape with vegetable matter found in wool.

Shoody has short fibers with mud & dust..

GILLING: -

Gilling is the process done before combing. Gilling uses a comb to blend different

quality of card silver together and aligns fiver parallel to one another. In gilling multiple

slivers from carding are fed into gilling machine & then drafted to form a more uniform,

properly mixed silver with parallel fibers. The multiple fibers are mixed to reduce

variation in quality.

Gilling use a coarse comb to blend different qualities of card slivers together &

align the fibre panel to one another

The Sliver from carding is given 3 gilling processes before sending it to for

combing to convert into tops because after carding the wool fibre takes a shape of hook.

The carded sliver follows following 3 gilling operations as under : -

1st Gilling: -

Here 10 carded slivers are fed to the one machine drafted together to form one

sliver.

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2nd Gilling: -

Here 5 slivers from the first gilling machine is fed to the machine to produce

uniform sliver.

3rd Gilling: -

This is also called Bi – Coiler. Here 2 slivers are produced from 4 slivers & stored

in one can.

Machine Model No. Of Machine

Gill – 1 GC 13 1

Gill – 2 GC 13 1

Gill – 3 GN 5 2

COMBING: -

Combing continuous the fibre alignments using a fine metallic pinnings circular

half laps & top comb. It removes the remaining vegetable matter & short fibres during

carding. The product of combing is “Top” and by product is called “Noil”

Combing is the main operation in the worsted combing further removes the short

fibres & remaining vegetable matters and broken fibres during carding, It also removes

the short stable fibres from the sliver which are formed by doubling & drafting during

previous session. It males the sliver more uniform & maintains the span length of fibres.

NSC machine from France is used from combing.

Model No. Of Machine

PB 28 5

PB 30 4

PB 31 2

POST GILLING: -

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This is same as gilling process. The additional process is that the tops are

formed here of desired weight from combed sliver. 10 Slivers are fed into this machine

drafted together to produce one sliver & to form a top.

QUALITY CHECKS:-

After the final top is made it’s sent to lab for following testing: -

Mean fiber length is maintained

Coefficient of variation

Checks for oil & moisture content in the sample. It must be less than 1% & 14%

respectively.

No. of Neps.

DYEING: -

Dyeing is the process of uniformly colouring or applying the dye at a particular

temperature & pressure. Dyeing colours the wool & can be carried out scoured wool

tops, yarn, fabric or garments.

There are 2 types of dyes used for dyeing wool & polyester.

Material Type of Dye Used

Polyester Dispersed Dyes

Wool Metal Compexes

Sulpho dyes

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Here 3 Types of Dyeing are done they are as follows: -

1. Top Dyeing

2. Yarn Dyeing

3. Fabric/Piece Dyeing

List of Machineries: -

Names of

Machines

Kg in each machine Tops formed (in each

machine)

Ilma 200 4

Dalal-1 200 4

Dalal-2 200 4

Staffi-1 100 4

Staffi-2 100 4

Staffi-3 20 3

Staffi-4 20 3

Staffi-5 15 2

Dalal-3 50 3

Dalal-4 50 3

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For Fabric dyeing, generally polyester/wool blend fabrics are dyed in JET BECK

machine.

Model Capacity (Kgs) No. of machines

Dalal Jet Back HT1 100 1

Dalal Jet Back HT2 200 3

MCS SF82 200 1

PROCESS FLOW OF TOP DYEING

Tops from Grey Combing

Packing in Top Dyeing

Dyeing

Hydro Extraction

Back Washing or R.F.Dryer

Defelter

Recombing

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PROCESS OF YARN DYEING

Yarn

R F Dryer

Rewinding

PROCESS FLOW OF DYEING ACCORDING TO DIFFERENT SHADES

Dyeing

Hydro Extractor

WOOL POLYESTER

Light Shade - R.F.Dryer For Both (Light & Dark

Dark Shade Back Washing Dryer Shade) Radio Frequency

Dryer is used.

Defelting

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Some important points for Dyeing :

Wool is dyed at 100°C.

Polyester is dyed at 130°C.

Yarn is dyed at 120°C.

Light and Medium Shades are dyed for 30 minutes.

Dark shades are dyed for 45 minutes.

RECOMBING: -

During dyeing process, certain degree of disturbances takes place in the

fiber. Hence parallelization is required. In Recombing we achieve this as well as remove

short fibers to achieve better quality of yarn. In Recombing department drying of wool,

Defelting, Gilling and Combing is done.

Objective of Recombing: -

To get blended wool & polyester.

Parallelization of fibres.

To remove the impurities.

To get the requires shades.

Blend Produces: -

Polyester (%) Wool %

55 45

70 30

80 20

40 60

0 100

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Process of Recombing: -

1. Defelter Selection

2. Gilling

3. Recombing

4. Auto Leveler

5. Auto Looper

List of Machineries: -

Name Of Machine /

Name Of Producer

No Of Machine Model

Defelter

(NSC France)

3 GN 6

Gill Box

(NSC France)

7 GN 6 - 3 Machine

GN 5 - 4 Machine

Comber

(NSC France)

12 PB 28 - 6 Machine

PB 29 - 5 Machine

PB 31 - 1 Machine

Auto Leveler

(NSC France)

2 -

Auto Looper

(NSC France)

2 -

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SPINNING: -

Recombed Top

Gilling 1 Gilling 2 Gilling 3 Gilling 4

Flyer Frame / Rubbing Frame

Ring Frame (Spinning)

Single Yarn Steaming

Auto Corner

(Single Yarn Winding)

Assembly & Winding

T.F.O. Twisting

Two Fold Yarn Steaming

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Two Fold Yarn Winding

To achieve the better quality and improve the yarn, Spinning is required.

Spinning converts “TOP” into “Yarn”. It is the art of using fibers of variable length to twist

then together in order to produce continuous yarn with characteristics adapted to their

subsequent use weaving.

Spinning Process takes the worsted roving and twists it into thread or yarn.

Twisting wool strands increases the strength of yarn & creates continuous unbroken yarn

necessary for weaving. Spinning further reduces the thickness of roving. Then apply twist

to bind the fiber together to make continuous yarn. The purpose of Spinning is the

conversion of recombed tops into the yarn of desired quality.

The Spinning department has seven sections:

NSC preparatory.

Frame sections.

Ring frame Section

Auto corner

Twisting-TFO

Steaming

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Final winding and delivery.

NSC Prepatory: -

In NSC Prepatory, the set of Gill Box “GNs” is included. There are total eight

machines in spinning department. The main purpose of Gilling is as follows:

To reduce the wrapping

To parallelize the fiber

To increase the Sliver uniformity.

Frame Section:

The Flyer Frame is a machine used for Drafting and Twisting. There are three

machines of Flyer Frame in spinning dept. each with the capacity of 48 spindles and

having speed of 60 meters per minute. Flyer Frame is manufactured by NSC-France

makers from 1980. The basic principle of Rubbing Frame is same as of Flyer Frame. A

false twist is given to roving bobbin in Rubbing Frame. This machine is used for rubbing

and twisting. The Objective of the Flyer Frame is as Follows:

To reduce the wrapping i.e. weight unit /length of the Sliver.

To make suitable package for Ring frame.

To make fibers more parallel as far as possible which is done by the high drafting

machine.

Flyer frame is the conversion from sliver to import a slight twist in order to increase

its strength.

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List of Machine: -

Ring frame Section:

Ring frame machines are used for Drafting and Twisting. There are 37 machines of Ring

Frame in spinning dept. these machines are from India and Nether land. Some of the

important points about this machine:

This is required to make a yarn of required count and of required

twist.

Spindle capacity of ring frame is 400.

Total spindle capacity of shed=37*400=14,800

Speed of the machine-7000to 9000 per minute.

Auto Corner:

This machine is used to remove the yarn faults. There are 5 machines of Auto

corner in spinning dept. These machines are imported from Germany. It is used to make

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Machines Models Spindles Meter/Minute

Flying Frame BM12 32 spindles 60 meter/minute

Flying Frame BM12 32 spindles 60 meter/minute

Flying Frame BM14 48 spindles 60 meter/minute

Rubbing Frame FM7N 32 spindles 160 meter/minute

a suitable or bigger package for further process which is known as Cone. Cone is the

bundling of the yarn. The total cone capacity is 300.

Assembly:

The job of assembly machine is to mix any two color of yarn. In this the two yarn

mixed can be seen separately. There are three machines in the spinning dept. of

assembly. These machines are from India.

Twisting TFO:

It is a Two for One machine. In this machine yarn is twisted and it is seen as one.

There are 19 machines in all in spinning dept. these machines are from India.

Steaming:

Steaming is done to fix the yarn from doubling. It is done in order to make yarn

strong. The object of the Steaming is to recover the winding from high twist yarn.

In this process first the material which comes from single and double frame are put

in one trolley and then this trolley is put into the trolley machine and accordingly the

pressure and vacuum is controlled.

Final Winding Machine and Delivery:

This is the final process where the yarns are winded in order to remove knot, if at

all present.

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WEAVING : -

Weaving is done by the interlacement of warp & weft. Two sets of yarn

move in two motions, lengthwise & widthwise. Longtudinal moving yarn is warp &

widthwise moving yarn is weft. The process of interlacement is called weaving.

Weaving interlaces yarn at right angles to one another forming a fabric.

Warp yarn runs the length of fabric & weft yarn runs across the fabric. Weaving take

place on a loom.

Weaving consist of two things that is Warping and Wefting.

In wrapping process, a complete warp is made for a loom from the

individual cones. Warping process is divided in two namely:

Warping: - In this process the bunch of cones are wound on the drum and yarn

section is made according to the requirement.

Beaming: - After warping, all sections are fixed up on the wrapper beam. Width of the

beam is maintained by flange of the beam.

In wefting process, the horizontal layer is formed with the help of yarn in

fabric.

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FINISHING:

FABRIC

WOOL BLEND

Fixation Thermofixation

Scouring Singeing

Hydro Extraction Hydro Extraction

Drying Drying

Decatising Sheraring/Cropping

Shrinkage Decatizing

Pressing Pressing

Kier Decatizing Kier Decatizing

Finishing describe a number of processes designed to impart the required

drape handle and aesthetic properties to a wool fabric .Wet finishing involves liquors and

chemical being applied to the fabric while dry finishing involves mechanical treatments.

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FOLDING: -

Process of Folding.

1] Final inspection

2] Stamping

3] Measuring & Cutting

4] Folding

5] Weight and piece according in production sheet

6] Wrapping pkg.

After finishing and checking in perching m/c., the fabric comes in to folding

dept. In this dept., at first the fabric is finally inspected. Here the fabrics which are defective

are given identification by placing a red and white flag (thread). If the fabric is having defect

but can be mended is given the identification of white flag. Similarly, if the fabric is having

defect but it can’t be mended than it is given the identification of red flag. The fabrics

having the red flag cannot be exported so these fabrics are sold at less cost.

DESIGNING: -

What is Design?

They define deign as purposeful, systematic and creative activity. The

purpose is purposeful designers give form to products, interior and visual communication

satisfies the fundamental psychological and aesthetic needs of users.

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Stage through the design:

Survey of market

Feed back of Dealers

Season wise Decision on the shades

Sampling

Sample cutting

Handloom card preparation

Send to market and dealers for approval

Sort book entry

Yarn order by PPC.

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Design is creative, as designers must posses the expertise to create the

compelling forms for product spaces and information systems and to advance application

of new techniques in our everyday life.

Sources of Design:

International Magazines which contains fabric cuttings.

Designers Intuition and Past Experience.

Market Survey.

Customer Requirement (they also design for Institutions).

QUALITY CONTROL: -

The Quality Policy of DIGJAM is:

Our Company is Committed:

To achieve the highest quality standards of its fabrics and services for maximum

customer satisfaction by following systematic quality management system.

To continually improve the effectiveness of the Management System.

Functions of Quality Control Department : -

The main functions of the quality control department are:

1] To find out micron value of wool.

2] To find out blend composition.

3] To find out count value of yarn.

4] To find out the fabric properties like steam shrinkage, Relaxation Shrinkage, stretch &

growth percentage, Fastness, etc.

In quality control some of the checking is done. The types of Checking are as follows:

36JVIMS - JAMNAGAR

Tow:

(1) Denier

(2) C.V %

(3) Oil %

(4) Shade

Final Top:

(1) C.V %

(2) Short fiber %

(3) Oil %

(4) M.F.L

(5) Neps

Yarn Checking:

(1) Count & Its C.V %

(2) Neps

(3) Twist & its C.V %

(4) Shade checking

Dyeing:

(1) Fastness

(a) Washing fastness

(b) Dry cleaning fastness

(c) Light fastness

(d) Rubbing fastness

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Fabric Checking:

(1) Weight

(2) Width (cms)

(3) Blends Composition

(4) Pilling test

(5) Crease Recovery Angel

(6) Shrinkage

(a) Relaxation shrinkage

(b) Steam shrinkage

(c) M/C Wash shrinkage

(7) Drape Coefficient

(8) Martindale abrasion test

(9) Fabric Strength

(10) Fabric tear strength

(11) Fabric stretch & Growth

(12) Color fastness

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HUMAN RESOURCE DEPARTMENT

39JVIMS - JAMNAGAR

HR Policy of the Company

HRD POLICY STATEMENT

Coming together is beginning…

Keeping together is progress…

Working together is success…

Some of the Policies of the company are as follows:

Employees satisfaction creates an environment where people enjoy there work

and realize their full potential; find opportunity to grow, focus their attention and

satisfying the customer and the organization.

Encourage teamwork along with individual excellence; develop a sense of

belonging amongst employee by carrying attitude.

Consider quality consciousness as the key requirement for the products and

services.

Consider employees as a valuable asset.

Promote commitment and creativity for better performance.

Build enough flexibility to encourage and accommodate innovative thoughts.

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Human Resource Planning: -

The human resource planning is a key to the success of the organization, if

it is done carefully cautionary and based on real and factual data available. It is a process

of determing how an organization should move from its current manpower position to its

desired manpower position.

HRP is the process of acquiring and utilizing the human resource in

organization. In simple terms, Human resource planning is the term used to describe how

companies ensure that their staffs are the right staff to do the jobs. With the help of HRP

management strives to have the right number, the right kind of people at the right place at

the right time to do things which results in both the organization and individual receiving

the maximum long term benefits. It is a continuous process.

In DIGJAM human resource planning is used in following situations:

1.) HRP is used in urgent production, routine production as well as in

special situation.

2.) HRP is motivation for better productivity, better individual performance

and output bonus as per requirement.

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Recruitment & Selection: -

Recruitment:

Recruitment is the process of identifying that the organization needs to

employ someone up to the point at which application forms for the post have arrived at

the organization. Recruitment has been regarded as the most important function of the

personnel department because unless the right type of people are hired, even the best

plans and controls of organization would not do much good.

The recruiting procedure of DIGJAM consists of three segments:

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Segments

Recruitment of Workers

Recruitment of Executives & Managerial Staff

Recruitment of Technical Personnel

Sources of Recruitment:

For any organization there are various sources available. Mainly two

sources are available for the recruitment for DIGJAM:

1.) Internal Sources.

2.) External Sources.

Internal Source:

In DIGJAM the internal recruitment is done by the reference of internal

members of the organization. With the help of internal advertisement, within the

company, company gets enough reference for the recruitment.

External Source:

In DIGJAM the external sources for the recruitment are as follows:

1.) New entrance for the labor force i.e. young, mostly inexperience,

potential employees, college students.

2.) The unemployed with wide range of skills and abilities.

3.) Experienced persons such as mechanics, accountants and welders.

Selection:

Selection consists of the processes involved in choosing from applicants a

suitable candidate to fill a post. In DIGJAM recruitment & selection procedure for blue

collar force is as per laws. For the recruitment of the labor in the company it is essential

that he should acquire the certificate of ITI examination. Workers are selected by the

concern supervisor and the assistant personnel management. Physical fitness for the

workers are considered at the time of selection.

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Recruitment and Selection procedure for white collar force refers to the

selection of officers and managers. They are selected by departmental head..

Training & Development: -

In DIGJAM the HRD identifies the training of all employees with the

department heads. Every year in the month of March, after having training date identified

the HRD with the approval of the top management prepares a training calendar and

conducts the Training Programme.

In case of Workman, training is given on safety, housekeeping, quality

improvement, skill improvement, multiskilling, awareness, discipline, behavior and

conduct rules are given.

In case of Staff Category, the training areas are skill development, attitude,

motivation, awareness, roles and responsibilities etc. are given.

In case of Management Training, all the training areas are of specific nature

mainly the management development areas are been conducted.

In company Employees are developed through demonstration, seminar and

discussion process also.

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There are two type of training is given to the employee in DIGJAM. They

are as follows:

On the Job Training:

DIGJAM provides on the job training to the workers, who are on the

machinery. The head of the dept. provides the specific training to the workers and also

solves problems which are faced by the workers. This method is economically, as the

supervisor provides the training. The regular work is not affected as the trainee learns

within the factory premises. However this method makes the clear, the practical and

theoretical aspects of the job.

Off the Job Training:

DIGJAM provides off the job training to the workers and the employees. In

that they provide classroom training in which they invite some engineers to train the

workers and they arrange different seminars. Trained employees handle machines and

equipments much carefully. The result is that, machines and equipments are carefully

utilized. Not only maintenance cost is reduced but also working life of machines and

equipments are also increased. Because of this profit is also increased.

45JVIMS - JAMNAGAR

Training atDIGJAM

On the Job Training

Off the Job Training

Industrial Relationship: -

“The relationship between employees and employer or trade union is

called Industrial Relations”.

Industrial Relations deal with the nature of working relationship that

subsists between the two particular partners in production management and workers.

One thing is clear that if the relationship is good and management and workers work in

good spirit of goodwill and understanding, production will be maximized. If relationship

lacks goodwill and understanding workers will not be at their best. Production will suffer,

and losses will be inevitable.

In DIGJAM there is a better co-operation between all of them and

management also. The company has not faced any strike problem in past few years.

They always try to motivate their union members and try to increase the efficiency of the

members in the workers.

There is a family type of environment of the unit and if any problem occurs

then union leader or labor officers solve the problem jointly. All the trade union helps in

the development of the unit.

46JVIMS - JAMNAGAR

Induction: -

Induction mainly implies familiar introduction of new employees with the

work, follow workers, work culture, superiors and organization.

DIGJAM has systematic induction programme, which helps to make

employees feel at home and reduces the initial nervousness on his part. The main

objectives of an induction program of DIGJAM are:

1.) To develop a feeling of belongings and loyalty to the organization.

2.) To give all the necessary information to employee about location of

workrooms, canteen and other facilities, leave rules, rest periods, etc.

3.) To build up the new employee’s confidence in him in lathe new

organization so that he may become an efficient employer.

Performance Appraisal:-

“Performance is not a matter of chance. It is not a thing to be waited for. It is

a thing to be achieved……”

Performance Appraisal is the step where the management fields out how

effective it has been at hiring and placing employees he performs. In DIGJAM the

Performance Appraisal is a unit for managerial level which is done on yearly basis. This

is done normally in the month of February & March. The Performance Appraisal

committee is consisting of department head and the Senior Management head

personnel.

The annual & increments are decided on the basis of individual

performance during the year. The appraisal is being carried out on following points:

47JVIMS - JAMNAGAR

1.) Achievements.

2.) Behaviors.

3.) Attendance

4.) Skills

5.) Knowledge

6.) Efficiency

7.) Co-operation with others.

Social Responsibility:-

The DIGJAM has not only concentrated on building an industrial empire

but also they are one of the largest philanthropic groups in India. Over the years, the

BIRLA Group has been involved in recreation and religious centers, museums,

planetarium, art galleries and rural development programs. They are also a great patron

of Indian art and culture.

DIGJAM has contributed extensively to education and research. The

prestigious Birla Institute of Technology at Pilani is recognized as the premier Institute.

From this Institute thousands of students graduate and comes out each year. Some of

the other responsibilities that DIGJAM looks after are as follows:

1.) Build an Auditorium at Jamnagar.

2.) Given a donation in Laboratory of L.G.Haria School, Jamnagar.

3.) 1500 families’ requirement is fulfilled by the Company.

4.) Pay health tax and wealth tax.

5.) Co-operation with the Society.

48JVIMS - JAMNAGAR

Promotion & Transfer: -

“A promotion is the transfer of an employee to a job which pays more

money or one that carries some preferred status.”

In DIGJAM the management reviews the performance of every individual on

the yearly basis. The promotion is given on the merit basis. There are no fix promotion

schemes. In DIGJAM demotion is also followed. These step is also been taken for some

workers who does not perform the job well as required.

“A lateral shift causing movement of individuals from one position to another

usually without involving any marked change in duties, responsibilities, skills needed or

compensation. ”

In DIGJAM workmen and staff employees are normally being transferred

from one department to another. This is also done in case of Sales Promotion i.e. from

one location to another

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Time Keeping System: -

Time Keeping System is very important aspect. Through Time Keeping

System company can run smoothly and successfully with boosting profits every year.

DIGJAM has different Time Keeping System. The main functions of this department are

as under:

1.) Attendance

2.) Wages & Salary

3.) Leave Records.

4.) Gratuity

5.) Bonus Payments

6.) PF & Employee Safety Insurance (ESI) Scheme

In case of workers they have three shifts. They are provided with the

attendance card is issued to them which they have to carry while reporting on the job and

submit to the respective dept. Respective heads dept. make the present of all the

workmen and deliver to the time office, for making attendance register. The timing for

shifts is as follows:

1.) 7:00 a.m. to 3:30 p.m.

2.) 3:30 a.m. to 12:00 p.m.

3.) 12:00 p.m. to 7:00 a.m.

With a recess of half an hour.

In case of Staff and management category the records is being maintain

through computerized cards and punching machine system which prepares the payroll

automatically. They come in the general shifts of 8:30 a.m. to 5:30 p.m. with 1 hour

recess. Workmen and Staff and Management are having weekly holiday on Sundays.

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Leave Rules:

Leave Rules are different for workers and for employees in DIGJAM. They

have four types of workers:

1.) Contract Workers.

2.) Badli Workers.(Substitutes)

3.) Permanent Workers.

4.) Temporary Workers.

Leave Rules for Workers:

1.) Privilege Leave Qualified - 240 days / 365 days (1 P.L. on 16 day basis)

2.) Casual Leave-7 days in a year. (for Badli workers 7 days per year)

3.) Sick Leave – for permanent workers 7 days per year. For Badli workers

1 day leave on 40 days.

Leave Rules for Staff Employees:

1.) Privilege Leave-30 days

2.) Casual Leave-10 days

3.) Sick Leave-10 days

In DIGJAM there is one policy regarding leave for workers and employees

that is:

1.) Casual Leave can’t be carried forward

2.) Sick Leave can be carried forward up to 3 years.

3.) Privilege Leave can be enchased up to 3 years.

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Wages & Salary: -

The wage is remuneration paid for the service of labor. In production wages

usually refers to the contribution to production, while salary normally refers to the clerical

administration & professional employees. A person who gets the wages is called “Blue

Collar Work”.

On the other hand salary normally refers to the monthly rates paid to

clerical administration & professional employees or “White Collar Work”. In DIGJAM time

office dept. decides the wages of workers. There is attendance system and after totaling

the attendance of workers they pay the workers on the 10 th date of the month. If the

worker needs money earlier i.e. advance than it will be given on 25 th of the month. The

maximum general advance will be Rs.450 each.

In case of Staff Category the employees gets consolidated salary on

monthly calculated basis. The pay scale starts from 7000 gross salary.

Trade Union: -

There are 1336 employees in the DIGJAM that is there are:

1.) Permanent = 751

2.) Badli = 260

3.) Sub-Staff = 52

4.) Staff = 273

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For the state of protection of rights they have formed the trade union.

Presently there are five trade unions. These unions are affiliated with the external trade

unions such as:

Woolen Mill Mazdur Sangh affiliated to BMS

Woolen Mill Kamdar Sangh affiliated to AITUC

Woolen Kamdar Manda

Grievance Management: -

There is hardly any organization which runs smoothly all time. In some

companies, the employees have complaint against the other employees. While on the

other hand it is the employees who have the dispute with the employees. There dispute

may be real or imaginary, valid or invalid, genuine or false.

DIGJAM has its own certified standing orders. The company is having

five labor unions. In case of the unions, representatives of the unions put the grievance

to management. The management mainly solves the disputes within the framework of

the organization and as per the provision of industrial dispute act.

1.) They investigate the problem whether it is genuine or not.

2.) After confirmation they discuss the matter with the workers and listen

their arguments.

3.) Then they discuss the problem with supervisors of workers and try to

solve the problems.

4.) It problem is serious then he arranges meeting between workers and

supervisors and prepare an agreement of conclusion.

5.) Sometimes they discuss the problem with personnel dept. also.

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Benefits & Welfare: -

Benefits provided by DIGJAM are as follows:

Employees at various levels are provided with tea with different intervals of time.

Water and Sanitary facility for all.

Canteen facilities for workers in the campus of the unit. It contains tea, coffee,

breakfast etc. at reasonable rates.

Medical facility includes ambulance, doctors for workers and employees for

monthly checkup.

Telephone facility is also provided to employees and above staff.

All employees are connected through Local Area Network (LAN) and internet for

Senior Executives.

PF facilities for all the workers and employees.

Vehicle facility for managerial with driver for official purpose today.

Petrol allowance to employees for official workers.

Casual leave, Sick leave and Privilege Leave for all.

Festival advances and bonus given on the basis of attendance.

Quarters provided to employees.

Park or garden is provided in front of house of employees.

Pension fund and ESI scheme are also provided by the company.

Separate training halls with necessary equipments for workers, employees and

executives also.

Library facilities

Welfare Facilities.

Mobile Facility for staff and Managerial category.

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MARKETINGDEPARTMENT

55JVIMS - JAMNAGAR

Organization Structure

Vice President

General Manager

Dy. General Manager

Senior Manager (4 zone)

(East, West, South, North)

Assistant Manager

Senior Officer

Officer

Senior Assistant

Dy. Assistant

Clerk

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Distribution Channel: -

DIGJAM

Sales /Marketing Selling Representative

Team

Exclusive Show Rooms MBO’s (Multi Brand Outlet) Whole Seller / Distributors

Dealers/Tag Dealers

End Customer

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Sales Process: -

The General Manager (Sales) heads the sales function of the organization.

Indian market is normally divided into four zones and the zonal sales manager who is

designated as Senior Sales manager ahs many territories. Each territory is looked after

by a area sales manger (ASM). The area Sales Manager is posted in a city in the territory

that looks after the sales in his respective territory. Each of four has a Sales Officer. The

sales officers are posted at the mill and their basic function is to co-ordinate between

ASM who is on the field and the mill.

The Sales Officer is an important link as he ensures smooth operation of the

sales person at the field. The company operates through Sales Representatives for each

territory, there is Sales Representatives appointed by the company. This Sales

Representatives assists the ASM in catering to the market needs. The function include

market development by making new customers, order booking, collection of payments, co-

ordination on mills behalf on local publicity, gift items to retailers, etc. The financial liability

rests with the Sales Representatives, this essentially means that in case of default in

payment by a customer, the Sales Representatives will have to bear this bad debt and his

account with the company is debited. The noteworthy characteristics of such a system are

that the company remains safe from defaults.

The company follows the system of order booking and delivery of these

orders to the customers by the desired date through transport or courier service depending

on the urgency of order. Order booking is done in two ways:

1.) Seasons booking (Winter and Summer Booking)

2.) Intermediate Visits and booking and mid season book.

58JVIMS - JAMNAGAR

Sales Promotion:-

DIGJAM gives sales promotion in two types in which lot of dealers scheme

and consumer scheme are included. In both types they give discount coupon (about 15%

discount) of frequent year and all the discount coupons are included in lucky draw and trip

is given to lucky draw winner. Such activity is done for both winter and summer Carnival.

They also give award for top five dealers, top five retailers and top five showrooms.

Major Sales Promotion tools for SIGJAM are as follows:

For Consumer:

2) Samples

3) Coupons

4) Premium

5) Prizes

6) Discounts

For Traders:

1) Price Off

2) Allowance

For Business:

1) Trade shows

2) Fashion Shows

3) Specialty adds.

DIGJAM is also sending Punchang and Calendar to their dealers to know

when marriage and other occasion period comes, when there will be more demand for

that functions, so that dealer can make stock for it and sale at right time.

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Branding & Packaging: -

Branding:

Branding is the art and cornerstone of marketing. Perhaps the most

distinctive skills of professional marketer is the ability to create, maintain and protect brand.

A brand is a name or trademark connected with a product or producer. Brands have

become increasingly important components of culture and the economy, now being

described as "cultural accessories and personal philosophies". A product identity, or brand

image are typically the attributes one associates with a brand, how the brand owner wants

the consumer to perceive the brand - and by extension the branded company,

organization, product or service.

A brand is a complex symbol that can convey up to 6 level of meaning:

Attributes

Benefits

Values

Culture

Personality

User

In DIGJAM the branding on the cloth a big label is stick which is known as

Selvedge or Monogram. It contains:

Name of the company is written.

Details of the product i.e. of which fabric the cloth has been made whether it should be

washed or dry cleaned etc. It includes all the information.

60JVIMS - JAMNAGAR

Packaging:

Packaging is the science, art and technology of enclosing or protecting

products for distribution, storage, sale, and use. Packaging also refers to the process of

design, evaluation, and production of packages. Packaging contains, protects, preserves,

transports, informs, and sells. DIGJAM define packaging as all the activities of designing

and producing the container for the product. The container called as a package and it is

growing use as a marketing tool:

Self Service

Consumer affluence

Company and Brand Image

Innovation Opportunity

In DIGJAM the packaging of the final products depends on the requirement of

the customer. In case of export the fabric is being packed in the form of role with a plastic

cover with a proper tag. In case of container load the material is being pack and loaded in

the container with the proper fumigation. In case of local market it is being packed in boxes

and balers. In case of finished products the product is being packed in different manner

that is according to its price range. They have velvet bag, leather bag, plastic bag etc.

Price Decision: -

In general terms price is a component of an exchange or transaction that

takes place between two parties and refers to what must be given up by one party (i.e.,

buyer) in order to obtain something offered by another party (i.e., seller). In simple terms-

the amount of money charged for the product or a service or some of values that consumer

exchanges for the benefits of having or using the product or services.

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Pricing is a strategic element in marketing mix. A product cannot enter in the

market without a price tag. Pricing policies and strategies are guidelines and framework

within which management of a company administrates prices so as to match them with the

market needs. Price policies are general guidelines to make future decision. 

In DIGJAM prices are selected on the basis of cost, market and competitors.

They select price range in the conference, which is held twice in a year. In June and

December DIGJAM has different range of products available in the market from the price

range of Rs.217 to Rs.5580 per meter.

New Product Development:

For the development of any unit and for achieving continuous growth in the

market, a systematic planning for the development of new product and new idea

generation as well as idea screening is must.

In DIGJAM Company create new product development from the following

point of view:

1.) Designer book

2.) Websites

3.) According to the Customer Requirement and Choice dealers.

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Mainly DIGJAM produce following products but from these they have

produced many new products also:

1) All wool i.e.100% wool

2) Wool Rich i.e. 60% wool and 40% polyester

3) Poly Wool i.e. they are having three ratios in this i.e.

Polyester Wool

70 % 30 %

80 % 20 %

55 % 45 %

4) Poly Viscose i.e. they are having three ratios in this:

Polyester Wool

65 % 35 %

67 % 33 %

80 % 20 %

New Product Categories:

1.) Poly: Wool: Lycra

2.) Poly: Wool: Linen

3.) Poly: Viscose: Linen

4.) Poly: Wool: Cotton

5.) Wool: Cashmere 95:5, 100% Linen

6.) Poly: Wool: Bamboo

63JVIMS - JAMNAGAR

Advertising: -

Advertising is any paid form of non-personal presentation and promotion of

ideas, goods or services by an identified sponsor. As we know that modern marketing

cannot service without advertising.

The department carries out the function of communicating the brand

name, value and image to the consumer. It ensures that the premium brand of DIGJAM

brand is upheld in the market place. For this, it decides on advertising to be under taken by

the company and supervises the functioning of the advertising agency.

In DIGJAM advertising is done by mainly three ways:

1.) International Campaign

2.) National Campaign

3.) Local publicity.

They did international campaign through participating in international fairs

being held in Germany, Italy and Hong Kong. Using national campaign they give

advertising across the country, in the entire world through television, newspaper,

magazines etc. they give local publicity through hoarding, posters, pamphlets, neon lights,

exhibition, fashion shows, gift banners, cinema slides, carry bags, point of purchase etc.

they also give advertisement through internet. They also have advertisement in the

magazines like Namashkar, Exotica, Go, Time-Out (which is published mainly in Delhi,

Mumbai and Bengaluru) and Go (which is an international business magazine). They

advertised also through films like “Kabhie Khushi Kabhie Gum.”

64JVIMS - JAMNAGAR

Mr. India World 2008 Finale at Intercontinental The Grand, Mumbai, India

on 9th February 2008 India's most desirable man - ready to conquer the world. The 23

finalists totally charmed the audience with their walk, wit and style in dazzling and

sensational creations by DIGJAM

In Digjam they are preparing advertising budget. They are spending 10% of

last year’s sales for advertising purpose. In T.V.Media they are giving advertisement in

News Channels only.

65JVIMS - JAMNAGAR

FINANCE DEPARTMENT

Source of Finance: -

66JVIMS - JAMNAGAR

There are several resources of finance/funds available to any company. An

effective appraisal mechanism of various sources of funds available to any company must

be instituted in the company to achieve its main objectives. Such a mechanism is required

to evaluate risk, tenure and cost of each and every sources of fund. The selection of the

fund sources is dependent on the financial strategy pursued by the company, the

leverage planned by the company, the financial condition prevent in the economy and the

risk profile of both i.e. the company as well as industry in which the company operates.

Each and every source of funds has some advantages as well as disadvantages. Sources

of finance mean a place where a company gets their finance. There are mainly two types

of sources:

: In DIGJAM they use both types of sources to meet their different types of

requirements:

Internal Source includes:

Depreciation Fund

Profit Fund.

External Source includes:

Banks

Financial Institutions

IDBI

Bank of India

Bank of America

Central Bank of India

State Bank of India

UCO Bank

Union Bank of India

Capital Budgeting; -

67JVIMS - JAMNAGAR

Capital Budgeting consist of planning & budgeting of the available capital

for the purpose of maximization the long term profitability.

In Capital Budgeting there are different methods, which can determine the

period in which investment made is recovered. There are different methods of evolution

capital budgeting as payback method, accounting rate of return method etc. DIGJAM

uses “Pay Back Period Method” for evaluating the investment. And it has the policy

of yearly capital budgeting. The BOD with the help of experts does capital budgeting:

Dividend Policy: -

Dividend is a term that refers to that part of a profit of a company, which is

distributed by the company among its shareholders. It is one kind of reward for

shareholders for the investment made by them in the shares of a company. The major

decision in financial management is related to dividend policy, involves the choice

between distributing the profit belonging to the shareholders and retention by the firm.

Dividend refers to the part of the firms net earning which are paid to shareholders. Focus

is on dividend paid to ordinary shareholders because holder of preference share is

entitled to a fix rate of dividend.

DIGJAM has a policy of rewarding its shareholders by way of payment of

dividend out of distribute profit of the company. The company had paid uninterrupted

dividend for 36 years till the year 1998. However due to adverse market condition and

lack of profitability the company has not paid any dividend since year 1999.

Equity Capital Structure

(Rs.in Cr)  

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Year Authorized Issued Subscribed Called UpLess : Calls

in ArrearsForfeited Paid Up

2009 80.00 68.76 68.76 68.74 0.00 0.02 68.76

2008 80.00 68.76 68.76 68.74 0.00 0.02 68.76

2007 80.00 68.76 68.76 68.74 0.00 0.02 68.76

2006 80.00 13.02 13.01 13.01 0.00 0.02 13.03

2005 80.00 65.12 65.07 65.07 0.00 0.02 65.09

2004 80.00 65.12 65.09 65.07 0.00 0.02 65.09

2002 80.00 65.12 65.09 65.07 0.00 0.02 65.09

2001 80.00 65.12 65.09 65.07 0.00 0.02 65.09

2000 80.00 65.12 65.09 65.07 0.00 0.02 65.09

Cash Flow

(Rs. in Crores)

Particulars Mar-09 Mar-08 Mar-07

Cash and Cash Equivalents at Begining of the year 2.20 4.33 29.30

Net Cash from Operating Activities 0.03 -0.99 7.02

Net Cash Used In Investing Activities 4.00 0.67 63.90

Net Cash Used In Financing Activities -5.63 -1.81 -95.89

Net Inc/(Dec) In Cash And Cash -1.60 -2.13 -24.97

Cash And Cash Equivalents At End Of The Year 0.60 2.20 4.33

Balance Sheet

(Rs. in Crores)

69JVIMS - JAMNAGAR

Particulars Mar-09 Mar-08 Mar-07 Mar-06SOURCES OF FUNDS :        Share Capital 88.76 68.76 68.76 43.76Reserves Total -137.53 -125.97 -117.86 -95.17Total Shareholders Funds -48.77 -57.21 -49.10 -51.41Secured Loans 127.84 133.02 138.84 211.93Unsecured Loans 18.82 29.15 26.54 30.59Total Debt 146.66 162.17 165.38 242.52Total Liabilities

97.89 104.96 116.28 191.11

APPLICATION OF FUNDS :        Gross Block 249.78 251.40 252.05 257.63Less : Accumulated Depreciation 187.37 184.21 178.19 173.09Less:Impairment of Assets 0.23 0.23 0.23 NANet Block 62.18 66.96 73.63 NALease Adjustment 0.00 0.00 0.00 0.00Capital Work in Progress 0.28 0.08 0.00 0.08Investments 4.41 4.42 4.42 70.90Current Assets, Loans & Advances        Inventories 39.85 45.01 43.71 40.75Sundry Debtors 31.57 26.42 24.54 24.60Cash and Bank 0.61 2.21 4.34 29.30Loans and Advances 13.92 14.50 13.79 21.24Total Current Assets 85.95 88.14 86.38 115.89Less : Current Liabilities and Provisions        Current Liabilities 50.06 50.18 44.01 64.02Provisions 4.87 4.46 4.14 16.28Total Current Liabilities 54.93 54.64 48.15 80.30Net Current Assets 31.02 33.50 38.23 35.59Miscellaneous Expenses not written off 0.00 0.00 0.00 0.00Deferred Tax Assets 0.00 0.00 0.00 0.00Deferred Tax Liability 0.00 0.00 0.00 0.00Net Deferred Tax 0.00 0.00 0.00 0.00Total Assets 97.89 104.96 116.28 191.11Contingent Liabilities 0.82 0.84 0.83 13.49

70JVIMS - JAMNAGAR

RESEARCH ON RATIO

ANALYSIS OF DIGJAM LTD

V/S RAYMOND LTD.

71JVIMS - JAMNAGAR

Overview of Financial Statement Analysis: -

“A Financial Statement is an organized collection of data organized according to

logical and consistent accounting procedures.” - Hampton

Financial statement analysis is defined as the process of identifying financial

strengths and weaknesses of the firm by properly establishing relationship between the

items of the balance sheet and the profit and loss account.

The Process of critical evaluation of the financial information contained in the

financial statements in order to understand and make decision regarding the operations

of the firm is called “Financial Statement analysis”. It is a study of relationship among

various financial facts and figures as given in a set of financial statements, and the

interpretation thereof to gain an insight into the profitability and operational efficiency of

the firm to assess its financial health and future prospects.

Financial statements are prepared to meet external reporting obligations and also

for decision making purposes. They play a dominant role in setting the framework of

managerial decisions. But the information provided in the financial statements is not an

end in itself as no meaningful conclusions can be drawn from these statements alone.

However, the information provided in the financial statements is of immense use in

making decisions through analysis and interpretation of financial statements.

An important aspect of financial statement analysis is determining relevant

relationship among specific items of information. Companies typically present financial

information for more than one time period, which permits users of the information to

make comparisons that help them understand changes over time. Financial Statements

based on absolute value and percentage changes and trend percentages are tools for

comparing information from successive time periods.

In short, Financial Statements represents a summary of the financial information

prepared in the required manner for the purpose of use by managers and external

stakeholders.

72JVIMS - JAMNAGAR

Objectives of Financial Statement Analysis: -

1. To assess the current profitability and operational efficiency of the firm as a

whole as well as its different departments so as to judge the financial health of

the firm

2. To ascertain the relative importance of different components of the financial

position of the firm

3. To identify the reasons for change in the profitability/financial position firm.

4. To Judge the ability of the firm to repay its debt and assessing the short-term as

well as long-term liquidity position of the firm.

Advantages of Financial Statement Analysis: -

1. Investors get enough idea to decide about the investments of their funds in the

specific company.

2. Regulatory Authorities like International Accounting Standards Board can ensure

whether the company is following accounting standards or not.

3. Company can analyze it own performance over the period time through financial

statement analysis.

Limitation of Financial Statement Analysis: -

1. Financial Statements only reveal financial position of the company in a

summarized manner; In case of balance sheet it shows the financial position of

business on a particular day usually at the end of the year.

2. Financial Statement s don’t recover non-monetary transaction.

3. Unless the statements are audited their authenticity is under doubt and they may

be misleading and fraudulent.

4. Financial Statements reflect the recorded facts and figures. Hence these are not

useful for control purposes.

73JVIMS - JAMNAGAR

Need for Financial Statement Analysis: -

Need for Management: -

1. Measuring the success or the failure of the operation, as a whole.

2. Making sound decisions relating to all the phase of operations.

3. Controlling Operations and

4. Determining the relative efficiency of departments and process.

Need for Outside Parties: -

1. Creditors use analysis as a basis of granting credit.

2. Investors use it to come to a decision of buying, selling or holding shares in a

company and,

3. Government uses it for purposes of regulations and administration.

74JVIMS - JAMNAGAR

Research methodology

Meaning of Research: -

75JVIMS - JAMNAGAR

Research is simply the process of arriving as dependable solution to a problem through the planned and systematic collection, analysis and interpretation of data. The term research consists of two words:

Research = Re + Search

“Re” means again and “Search” means to find out something.

Definition of Research: -

The Advanced Lerner’s Dictionary of Current English lays down the meaning of research as “A careful investigation or inquiry especially through search for new facts in any branch of knowledge”

According to Fred Kerlinger, “Research is an organized enquiry designed and carried out to provide information for solving a problem”

According to Francis Rummel, “Research is a careful inquiry or examination to discover new information or relationships and to expand and to verify existing knowledge”

Research Objective: -

The objective of Financial Statement Analysis of Digjam Ltd v/s Raymond Ltd are as follows: -

1. To assess the current profitability & operational efficiency of both the company.2. To analyze growth & performance of both the company.3. To Identify the reason for change in the profitability/financial position4. To Judge the ability of the firm to repay its debt & assessing the short-term as

well as long-term liquidity position of both companies5. To Judge the financial health of both companies.6. To Judge the ability of the company to pay the principal and interest,

arrangements for amortization of debt and the security available for the loans extended.

76JVIMS - JAMNAGAR

Significance of Research: -

The Research is study about “Comparison of Financial Statement Analysis of Digjam Ltd v/s Raymond Ltd. Significance of this research of this research from the view point of interested parties are as under: -

Management: -

Financial Statement Analysis will help the management of Digjam & Raymond in understanding the progress, position and prospects of business.

Investors: -

Financial Statement Analysis is also significant for investor both present and prospective. They will invest in the company where they feel that financial structure of a company is sound & which has bright future.

Bankers: -

Financial Statement Analysis is also significant for bankers because banker is primarily concerned with the ability of paying current debts and the current operation results. He wants no only the payment of advances but he also wants that such advance should be repaid at proper time also.

Government: -

Financial Statement Analysis is also significant for govt. because Central and State Governments are also interested in published financial statements in order to assess their revenues through various taxes to regulate capital issue and public utility regulation.

Creditors: -

From the creditor’s point of view Financial Statement Analysis act as magic eye highlighting the credit worthiness i.e., assurance whether the company will honour obligations as and when they mature.

77JVIMS - JAMNAGAR

Statement of the Problem: -

The first step while conducting research is careful definition of Research Problem “To ERR IS THE HUMAN” is a proverb which indicates that no one is perfect in this world. Every researcher has to face many problems while conducting any research that’s why problem statement is defined to know which type of problems a researcher has to face while conducting any study. It is said that “Problem well defined is problem half solved”

Basically, a Problem Statement refers to some difficulty, which researcher experiences in the context of either a theoretical or practical situation and wants to obtain solution for the same.

The Problem Statement for this research is:

“Comparison of Financial Statement Analysis of Digjam v/s Raymond

Research Design: -

“A Research Design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure”

“Research Design is the plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance” - Kerlinger

“In This Research Study Experimental / Hypothesis Testing Research Design have been applied”

78JVIMS - JAMNAGAR

Data Collection: -

There are two types of data collection method :

1. Primary Data2. Secondary Data

Primary Data: -

Primary data are those data which are collected fresh and for the first time and thus happen to be original in character.

Secondary Data: -

The Secondary data are those data which have been collected by someone else and which have already been passed through the statistical process.

In this research Secondary Data are collected, (Annual Reports of Digjam Ltd & Raymond Ltd, for the year 2007, 2008 & 2009 are collected)

Tools/Methods of Financial Statement Analysis: -

1. Comparative Statements2. Ratio Analysis3. Common-size statements

Comparative Statements: -

These are the statements showing the profitability and financial position of a company for different periods of time in a comparative form to give an idea about the position of two or more periods. It usually applies to the two important financial statements, namely, Balance Sheet and Income Statements prepared in a comparative form. The financial data will be comparative only when same accounting principles are used in preparing these statements. Comparative figures indicate the trend and direction of financial position and operating results. This analysis is also known as Horizontal Analysis

79JVIMS - JAMNAGAR

Ratio Analysis: -

It describes the significant relationship which exists between various items of a balance sheet and a profit and loss account of a company. As a technique of financial statement analysis, accounting ratios measure the comparative significance of the individual items of the income and position statements. It is possible to assess the profitability, solvency and efficiency of an enterprise through the technique of ratio analysis.

Common Size Statements: -

These are the statements which indicate the relationship of different items of a financial statement with some common item by expressing each item as a percentage of the common item. The percentage thus calculated can be easily compared with the results corresponding percentages of the previous year or of some other firms, as the numbers are brought to common base. Such statements also allow an analyst to compare the operating and financing characteristics of two companies of different sizes in the same industry. Thus, common-size statements are useful, both, in intra-firm comparison for the same year or for several years. This analysis is also known as “Vertical Analysis”

Hypothesis Formulation: -

The word hypothesis consists of two words:

Hypo + thesis = Hypothesis.

Hypo means composition of two or more variables which is to be varied.

Thesis means position of these variables in the specific frame of reference

Thus, Hypothesis means assumption regarding all results before going for experiment. In other words, Hypothesis is a special proposition, formulated to be tasted in a certain given situation as a part of research which states what the researcher is looking for,

80JVIMS - JAMNAGAR

Types of Hypothesis: -

Null Hypothesis: -

If we have to compare method A with method B about its superiority and if we proceed on the assumption that both methods are equally good, then this assumption is termed as Null Hypothesis. It means that there is no significance difference between methods. Null Hypothesis is symbolized by HO

Alternate Hypothesis: -

As against null hypothesis, we may think that the method A is superior or the method B is inferior, we are then stating what it is termed as alternate hypothesis. It means that there is a significance difference between two methods. Alternative Hypothesis is symbolized by H1.

Level of Significance: -

This is very important concept in the context of hypothesis testing. It is always some percentage (usually 5%) which should be chosen with great care, thought and reason. Thus the significance level is the maximum value of probability of rejecting HO

when it is true and it usually determined in advance before the testing the hypothesis.

In Context to this Research, -

1. H0 = There is no significance difference in Gross Profit ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Gross Profit ratio of Digjam Ltd & Raymond

2. H0 = There is no significance difference in Net Profit ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Net Profit ratio of Digjam Ltd & Raymond during the study period

81JVIMS - JAMNAGAR

3. H0 = There is no significance difference in Expenditure ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Expenditure ratio of Digjam Ltd & Raymond during the study period

4 H0 = There is no significance difference in Return on Capital Employed of Digjam & Raymond during the study period

H1 = There is significance difference in Return On Capital Employed of Digjam Ltd & Raymond during the study period

5 H0 = There is no significance difference in Return on Equity Share Capital of Digjam & Raymond during the study period

H1 = There is significance difference in Return on Equity Share Capital of Digjam Ltd & Raymond during the study period

6. H0 = There is no significance difference in Earning per Share of Digjam & Raymond during the study period

H1 = There is significance difference in Earning Per Share of Digjam Ltd & Raymond during the study period

7. H0 = There is no significance difference in Price Earning Ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Price Earning ratio of Digjam Ltd & Raymond during the study period

8. H0 = There is no significance difference in Current ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Current ratio of Digjam Ltd & Raymond during the study period

82JVIMS - JAMNAGAR

9. H0 = There is no significance difference in Quick ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Quick ratio of Digjam Ltd & Raymond during the study period

10. H0 = There is no significance difference in Proprietary ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Proprietary ratio of Digjam Ltd & Raymond during the study period

11 H0 = There is no significance difference in Debt-Equity ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Debt-Equity ratio of Digjam Ltd & Raymond during the study period

12 H0 = There is no significance difference in Stock turnover ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Stock turnover ratio of Digjam Ltd & Raymond during the study period

13. H0 = There is no significance difference in Fixed Assets Turnover ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Fixed Assets Turnover ratio of Digjam Ltd & Raymond during the study period

14. H0 = There is no significance difference in Overall Turnover ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Overall Turnover ratio of Digjam Ltd & Raymond during the study period

83JVIMS - JAMNAGAR

15. H0 = There is no significance difference in Debtors ratio of Digjam & Raymond during the study period

H1 = There is significance difference in Debtors ratio of Digjam Ltd & Raymond during the study period

Statistical Tool Used in Research: _

In this research chi-square Test is used as a statistical tool.

Chi- square Test:-

Suppose we have obtained an observed frequency distribution and we are interested in knowing whether the observed frequency distribution supports a particular hypothesis. For this a very powerful test for testing the significance of the discrepancy between frequency distribution and expected distribution. This test was given by Karl Pearson in 1900.

Chi-square is a continuous distribution and the form of the distribution depends upon degree of freedom n. This test is also known as Test of Goodness of Fit.

The value of X2 is calculated by following formula : -

X2 = ∑ (Oi - Ei)2

----------------- Ei

84JVIMS - JAMNAGAR

RATIO ANALYSIS

PROFITABILITY RATIOS85

JVIMS - JAMNAGAR

In Relation to Sales:-

1. Gross Profit Ratio

2. Net Profit Ratio

3. Expenditure Ratio

In Relation to Investment:-

1. Return on Capital Employed

2. Return on Equity Share Capital

3. Earning Per Share

4. Price Earning Ratio

86JVIMS - JAMNAGAR

In Relation to Sales

Gross Profit Ratio: -

Gross Profit Ration measures the percentage of each sales rupee remaining

after the firm has paid for its goods. It is a ratio expressing relationship between Gross

Profit earned to Net Sales. It is an useful indication of the profitability of business.

A high ratio of gross profit to sales is a sign of a good management, while a low

ratio is definitely a danger signal, warranting a careful and detailed analysis of the

factors responsible for it.

Formula: - Gross ProfitGross Profit Ratio = ------------------- x 100

Sales

Where, Gross Profit = Sales - Cost of goods sold (COGS)

COGS = Opening Stock

+ Purchases

+ Purchase Expenses

- Closing Stock-

Digjam: - (Amt in Lacs.)

6979.322007 = ------------------ x 100 = 64.61%

10802.49

6907.34 2008 = ----------------- x 100 = 62.20% 11104.63

8861.132009 = ----------------- x 100 = 63.32%

13992.89

87JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.)

122263.012007 = ------------------ x 100 = 95.21%

128419.35

119781.252008 = ----------------- x 100 = 90.57%

132251.15

127267.862009 = ----------------- x 100 =92.28%

137919.38

YEAR DIGJAM RAYMOND2007 64.61% 95.21%2008 62.20% 90.57%2009 63..32% 92.28%

2007 2008 20090

102030405060708090

100

GROSS PROFIT RATIO

DIGJAMRAYMOND

YEAR

PERCENTAGE

88JVIMS - JAMNAGAR

Interpretation : -

The Gross Profit ratio of Digjam Ltd. Shows fluctuating trend. In the year 2007 it was 64.61%, while in 2008 it was decreased to 62.20%, again in 2009 it was increased to 63.32%.

The Gross Profit Ratio of Raymond Ltd. Also shows fluctuating trend. In 2007 it was 95.21%, which was decreased to 90.57% in 2008, & again in 2009 it was increased to 92.28%.

When we compare the ratio of both the company we can say that Raymond has High Gross Profit Ratio. It shows good sign of management for Raymond as it implies that cost of production of the firm is relatively low. Gross Profit Ratio of Digjam Ltd is low because High cost of production, low selling price resulting form severe competition.

Chi - square Test for DIGJAM: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 64.61 63.38 1.23 0.0242008 62.20 63.38 -1.18 0.0212009 63.32 63.38 -0.06 0.001

TOTAL 0.046

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

Difference in the Gross Profit Ratio of DIGJAM Ltd during the study period.

89JVIMS - JAMNAGAR

Chi - square Test for RAYMOND: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 95.21 92.69 2.52 0.0692008 90.57 92.69 -2.12 0.0482009 92.28 92.69 -0.41 0.002

TOTAL 0.119

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

Difference in the Gross Profit Ratio of RAYMOND Ltd during the study period.

90JVIMS - JAMNAGAR

Net Profit Ratio: -

Net Profit Ratio measures the percentage of each sales rupee remaining after all

costs and expenses including interests and taxes have been deducted.

This ratio is valuable for the purpose of ascertaining the over-all profitability of the

business & shows the efficiency or otherwise of operating the business. This ratio

indicates what portion of sales revenue is left to the proprietors after all operating

expenses are met.

A high net profit ratio would ensure adequate return to the owners as well as

enable a firm to withstand adverse economic conditions when selling price is declining,

cost of production is rising and demand for the product is falling. A low net profit ratio

has opposite implications.

Formula: -

Net Profit after TaxNet Profit Ratio = ---------------------------- x 100 Sales

Digjam: - (Amt in Lacs.)

(2269.10)2007 = ------------------ x 100 = (21)%

10802.49

(811.21) 2008 = ----------------- x 100 = (7.3)% 11104.63

(1156.24)2009 = ----------------- x 100 = (8.26) %

13992.89

91JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.)

20125.282007 = ------------------ x 100 = 15.67%

128419.35

6612.172008 = ----------------- x 100 = 5%

132251.15

(27039.68)2009 = ----------------- x 100 = (19.60)%

137919.38

YEAR DIGJAM RAYMOND2007 (21)% 15.67%2008 (7.3)% 5%2009 (8.26)% (19.60)%

2007 2008 2009

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Net Profit Ratio

DIGJAMRAYMOND

Year

Percentage

92JVIMS - JAMNAGAR

Interpretation: -

The Net Profit Ratio for Digjam Ltd. Shows negative trend. Digjam Ltd. Has net

loss for the year 2007,2008 & 2009. They are not making net profit during these 3 years

Their loss shows fluctuating trend.

Net Profit Ratio for Raymond shows decreasing trend. Their Net Profit decreases

continuously during the year 2007, 2008 & 2009. They have net profit in 2007 & 2008,

but it has loss in the year 2009.

When we compare the ratio of both companies we can say that for the year 2009

both company shows loss. This shows that management is not able to operate business

with sufficient success for recovering the revenues from the business.

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 -21 -12.19 -33.19 -90.362008 -7.3 -12.19 -19.49 -31.162009 -8.26 -12.19 -20.45 -34.30

TOTAL -155.82

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Net Profit Ratio of DIGJAM Ltd during the study period.

93JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 15.67 0.36 15.31 651.102008 5 0.36 4.64 59.802009 -19.60 0.36 -19.96 1106.67

TOTAL 1817.57

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal > X2

tab . So, Ho is rejected. Therefore it can be said that there is significance

difference in the Net Profit Ratio of RAYMOND Ltd during the study period.

94JVIMS - JAMNAGAR

Expenditure Ratio:-

In order to determine & scrutinize the operational efficiency of the business,

every expenditure has to be matched with sales. For the purpose of ascertaining

relationship between expenses & net sales expense ratios are computed.

Formula: - Total ExpensesExpense Ratio = ------------------------ x 100

Sales

Digjam: - (Amt in Lacs.)

11504.242007 = ------------------ x 100 = 106.50%

10802.49

12314.51 2008 = ----------------- x 100 = 110.89% 11104.63

14806.522009 = ----------------- x 100 = 105.81%

13992.89

Raymond: - (Amt in Lacs.)

121798.532007 = ------------------ x 100 = 94.84%

128419.35

135717.192008 = ----------------- x 100 = 102.62%

132251.15

95JVIMS - JAMNAGAR

153654.892009 = ----------------- x 100 =111.41%

137919.38

YEAR DIGJAM RAYMOND2007 106.50% 94.84%2008 110.89% 102.62%2009 105.81% 111.41%

2007 2008 200985

90

95

100

105

110

115

Expenditure Ratio

DIGJAMRAYMOND

Year

Percentage

96JVIMS - JAMNAGAR

Interpretation: -

The Expenditure ratio of Digjam Ltd. Shows increasing trend. IN 2007 it was

105.81%, then it was increased to 106.50% & in 2009 it was increased to 110.89%.

Thus, Expenditure of Digjam Ltd. are increasing from year 2007 to 2009.

Expenditure ratio of Raymond Ltd also shows increasing trend. In 2007 it was

94.84% the it was increased to 102.48% in 2008, & in 2009 it was 111.41%. Thus,

Expenditure of Raymond Ltd. are increasing from year 2007 to 2009.

When we compare the expenditure ratio of both company expenditures of both

the companies are increasing from 2007 to 2009. Digjam Ltd. Has more expenditure as

compared to Raymond.

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 106.50 107.73 -1.23 0.012008 110.89 107.73 3.16 0.092009 105.81 107.73 -1.92 0.03

TOTAL 0.13

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Expenditure Ratio of DIGJAM Ltd during the study period.

97JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 94.84 102.96 -8.12 0.642008 102.62 102.96 -0.34 0.012009 111.41 102.96 8.45 0.69

TOTAL 1.34

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Expenditure Ratio of RAYMOND Ltd during the study period.

98JVIMS - JAMNAGAR

In Relation to Investment

Return on Capital Employed: -

It is an index of profitability of business & is obtained by comparing net profit with

capital employed. This ratio provides a test of profitability related to the sources of long

term funds & it provides sufficient insight into how efficiently the long-term funds of

owners and lenders are being used.

The term capital employed includes share capital, reserves & surplus and long

term loans such as debentures. The success of the enterprise is judge with the help of

this ratio. The higher the ratio, the more efficient is the use of capital employed.

Formula: - EBITReturn on Capital Employed = --------------------------- x 100

Capital Employed

Where, EBIT = Earnings before interests & tax

Capital Employed = Equity Share Capital

+ Reserves & Surplus

+ Long Term Loans.

Digjam: - (Amt in Lacs.)

(393.66)2007 = ------------------ x 100 = (1.90)%

20760.06

(1120.38) 2008 = ----------------- x 100 = (5.55)% 20177.54

(712.22)2009 = ----------------- x 100 = (3.62)%

19660.25

99JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.)

23823.282007 = ------------------ x 100 = 16.85%

141415.94

8169.662008 = ----------------- x 100 = 4.62%

176458.17

(29755.06)2009 = ----------------- x 100 = (15.23) %

195363.49

YEAR DIGJAM RAYMOND

2007 (1.90)% 16.85%

2008 (5.55)% 4.62%

2009 (3.62)% (15.23)%

2007 2008 2009

-20

-15

-10

-5

0

5

10

15

20

Return on Capital Employed

DIGJAMRAYMOND

Year

Percentage

100JVIMS - JAMNAGAR

Interpretation:-

Return on capital employed of Digjam ltd. Shows fluctuating trend. Digjam Ltd. Is

not getting return on their capital employed.

Return on capital employed of Raymond ltd. Shows decreasing trend. Their

return on capital employed are decreasing. They are getting return in 2007 & 2008.

While in 2009 they are not getting any return on their capital employed.

When we compare the ratios of both the company we can say that performance

of Digjam Ltd. Is poor as they are not getting return on their capital employed & their

operational efficiency is not good. So, they have less internal accruals & suppliers are

not willing to extend more favorable terms. While in Raymond ltd. Their performance is

decreasing. So, we can say that their operational efficiency is declining. So, they have

less efficient use of capital employed.

Chi - square Test for DIGJAM: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 (1.90) -3.69 -5.59 -8.472008 (5.55) -3.69 9.24 -23.142009 (3.62) -3.69 7.31 -14.48

TOTAL - 45.79

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Return on capital employed of DIGJAM Ltd during the study period.

101JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 16.85 2.08 14.77 104.882008 4.62 2.08 2.54 3.102009 (15.23) 2.08 -17.31 144.05

TOTAL 252.03

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal >X2

tab . So, Ho is rejected. Therefore it can be said that there is significance

difference in the Return on capital employed of RAYMOND Ltd during the study period.

102JVIMS - JAMNAGAR

Return on Shareholder’s Fund: -

This ratio indicates whether the return on shareholder’s funds is enough in

relation to the risks that they undertake. This ratio shows what amount of dividend is

likely to be received on shares. It has great practical importance to be compared with

that of the other company.

This ratio reveals how owners fund (shareholders funds) are utilized by the firm.

This ratio will throw light on the relative performance and strength of the company.

Formula: - Net Profit after TaxReturn on Shareholders Fund = --------------------------- x 100

Shareholders fund

Digjam: - (Amt in Lacs.)

(2269.10)2007 = ------------------ x 100 = (9.69) %

23413.57

(811.21) 2008 = ----------------- x 100 = (3.51) % 23092.38

(1156.24)2009 = ----------------- x 100 = (4.91) %

23542.72

Raymond: - (Amt in Lacs.)

20125.282007 = ------------------ x 100 = 14.84%

135615.94

6612.172008 = ----------------- x 100 = 4.67%

141915.45

103JVIMS - JAMNAGAR

(27039.68)2009 = ----------------- x 100 = (23.56) %

114798.32

YEAR DIGJAM RAYMOND

2007 (9.69)% 14.84%

2008 (3.51)% 4.67%

2009 (4.91)% (23.56)%

2007 2008 2009

-30

-25

-20

-15

-10

-5

0

5

10

15

20

Return on Shareholders Fund

DIGJAMRAYMOND

Year

Percentage

104JVIMS - JAMNAGAR

Interpretation: -

Return on shareholders fund ratio shows negative trend for Digjam ltd. Digjam ltd

is not earning on their shareholders fund. Their return is in negative & it is fluctuating. In

2007 it was -9.69%, then it 2008 it was -3.51% and in 2009 it was -4.91%.

Return on shareholders fund ratio shows Decreasing trend for Raymond Ltd.

They are getting return on shareholders fund on 2007 & 2008 but in 2009 they are not

getting any return on shareholders fund. In 2007 return on shareholders fund ratio was

14.84%, which was decreased to 4.67% & again in 2009 it was decreased to -23.56%.

When we compare the ratio of return on shareholders fund we can say that

Raymond Ltd is earning more return on equity share capital as compare to Digjam.

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 (9.69) (6.04) -15.73 -40.962008 (3.51) (6.04) -9.55 -15.102009 (4.91) (6.04) -10.95 -19.85

TOTAL -75.91

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Return on Shareholders Fund of DIGJAM Ltd during the study period.

105JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 14.84 -1.35 13.49 -134.802008 4.67 -1.35 3.32 -8.162009 (23.56) -1.35 -24.91 -459.63

TOTAL -602.53

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is rejected. Therefore it can be said that there is no significance

difference in the Return on Shareholders Fund of RAYMOND Ltd during the study

period.

106JVIMS - JAMNAGAR

Return on Equity Share Capital: -

It shows what percentage of the profit is earned on the capital invested. The ratio

is obtained by dividing net profit after deduction of preference divided by amount of

equity share capital.

This ratio measures the return on the total equity funds of ordinary shareholders.

Formula: - Net Profit after Tax – Preference Dividend Return on Equity Share capital = --------------------------------------------------------- x 100

Equity Capital

Digjam: - (Amt in Lacs.)

(2269.10)2007 = ------------------ x 100 = (33) %

6875.79

(811.21) 2008 = ----------------- x 100 = (11.79) % 6875.79

(1316.24)2009 = ----------------- x 100 = (19.14) %

6875.79

Raymond: - (Amt in Lacs.)

20125.282007 = ------------------ x 100 = 328.86%

6138.08

107JVIMS - JAMNAGAR

6612.17

2008 = ----------------- x 100 = 107.72% 6138.08

(27039.68)

2009 = ----------------- x 100 = (440.52) % 6138.08

YEAR DIGJAM RAYMOND2007 (33)% 328.86%2008 (11.79)% 107.72%2009 (19.14)% (440.52)%

2007 2008 2009

-500

-400

-300

-200

-100

0

100

200

300

400

Return on Equity Share Capital

DIGJAMRAYMOND

Year

Percentage

108JVIMS - JAMNAGAR

Interpretation: -

Return on equity share capital of Digjam ltd. Shows fluctuating and negative

trend. They are not getting return on their equity share capital.

Return on equity share capital of Raymond ltd. Shows decreasing trend. In 2007

& 2008 they are getting return on their equity share capital, while in 2009 they are not

getting return on equity share capital.

When we compare return on equity share capital we can say that Raymond has

more return on equity share capital except 2009. So, we can say that for the year 2007

& 2008 Raymond has earned satisfactory return for their shareholders. While Digjam ltd

has not earned satisfactory return for its shareholders.

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 (33) -21.31 -54.31 -138.412008 (11.79) -21.31 -33.10 -51.412009 (19.14) -21.31 -40.45 -76.78

TOTAL -266.60

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Return on Equity Share Capital of DIGJAM Ltd during the study period.

109JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 328.86 -3.94 332.8 -28110.622008 107.72 -3.94 111.66 -3164.452009 (440.52) -3.94 -444.46 -50138.25

TOTAL -81413.32

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is rejected. Therefore it can be said that there is no significance

difference in the Return on Equity Share Capital of RAYMOND Ltd during the study

period.

110JVIMS - JAMNAGAR

Earning Per Share:-

EPS measures the profit available to the equity shareholders on a per share

basis, that is, the amount they can get on every share held.

The EPS shows the average income that the firm earns per share if profit of the

firm is more than EPS will increase and if profit of the firm is lower than EPS will

decrease. The objective of finding this ratio is to measure the profitability of the firm on

per equity share basis.

Formula: -

Net Profit after tax – Preference Dividend Earning per Share = ----------------------------------------------------------

No. Of Equity Share

Digjam: - (Amt in Lacs.)

(2269.10)2007 = ------------------ = -3.30 Rs.

687.41

(811.21) 2008 = ----------------- = -1.18 Rs. 687.41

(1316.24)2009 = ----------------- = -1.91 Rs.

687.41

Raymond: - (Amt in Lacs.)

20125.282007 = ------------------ = 32.79 Rs

613.80

111JVIMS - JAMNAGAR

6612.172008 = ----------------- = 10.77 Rs

613.80

(27039.68)2009 = ----------------- = -44.05 Rs

613.80

YEAR DIGJAM RAYMOND2007 -3.30 Rs. 32.79 Rs.2008 -1.18 Rs. 10.77 Rs.2009 -1.91 Rs. -44.05 Rs.

2007 2008 2009

-50

-40

-30

-20

-10

0

10

20

30

40

Earning Per Share

DIGJAMRAYMOND

Year

Rs.

112JVIMS - JAMNAGAR

Interpretation: -

EPS of Digjam ltd shows negative trend &it is fluctuating. Their Earning per share

is negative. So their shareholders are not getting earnings on every share held by them.

EPS of Raymond shows decreasing trend. EPS of Raymond ltd is decreasing.

Raymond’s shareholders get return on every shares held by them in 2007 & 2008 but in

2009 they are not getting return on shares.

When we compare EPS of both company we can say that shareholders of

Raymond ltd are getting more return on their share as compare to Digjam.

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 -3.30 -2.13 -5.43 -13.842008 -1.18 -2.13 -3.31 -5.142009 -1.91 -2.13 -4.04 -7.66

TOTAL -26.64

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Earning Per Share of DIGJAM Ltd during the study period.

113JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 32.79 -0.16 32.63 -6654.482008 10.77 -0.16 10.61 -703.572009 -44.05 -0.16 -44.21 -12215.77

TOTAL -19573.82

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is rejected. Therefore it can be said that there is no significance

difference in the Earning Per Share of RAYMOND Ltd during the study period.

114JVIMS - JAMNAGAR

LIQUIDITY RATIOS

1. Current Ratio

2. Quick Ratio / Acid Test Ratio

115JVIMS - JAMNAGAR

Current Ratio: -

This ratio is most commonly used to perform short term financial analysis. It is

also known as working capital ratios. This ratio matches the current assets of the firm to

the current liabilities of the firm. This ratio is an indication of the firm’s commitment to

meet its short-term liabilities. Normally a current ratio of 2:1 is considered satisfactory.

Current assets represents those assets which can be in the ordinary course of

business, converted into cash within a short period of time, normally not exceeding one

year and includes cash and bank balances, marketable securities, debtors, bills

receivables, & prepaid expenses.

Current Liabilities defined as liabilities which are short-term maturing obligations

to be met, as originally contemplated, within a year, consist of trade creditors, bills

payable, and bank credit, provision for taxation, dividends and outstanding expenses.

Formula: -

Current AssetsCurrent Ratio = -------------------------

Current Liabilities

Digjam: (Amt in Lacs.)

8637.342007 = ------------------ = 1.79:1

4815.16

8814.40 2008 = ----------------- = 1.61:1 5464.61

8595.022009 = ----------------- = 1.56:1

5492.71

116JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.)

82490.592007 = ------------------ = 2.84:

29083.90

93282.09 2008 = ----------------- = 3.31:1 28210.03

98165.332009 = ----------------- = 2.80:1

35044.23

YEAR DIGJAM RAYMOND2007 1.79:1 2.84:12008 1.61:1 3.31:12009 1.56:1 2.80:1

2007 2008 20090

0.5

1

1.5

2

2.5

3

3.5

Current Ratio

DIGJAMRAYMOND

Year

Times

117JVIMS - JAMNAGAR

Interpretation: -

Current Ratio of Digjam ltd shows decreasing trend. It is decreasing from 2007 to

2009. In 2007 it was 1.79:1, then it decreases to 1.61:1, & then in 2009 it was 1.56: 1.It

shows that in 2009 current ratio of Digjam is 1.56:1. It implies that every one rupee of

current liabilities current assets of 1.56 Rs are available to meet them.

Current Ratio of Raymond ltd shows fluctuating trend. In 2007 it was 2.84:1 then

it was increased to 3.31:1 in 2008 & in 2009 it was 2.80:1.In 2009 current ratio of

Raymond ltd is 2.80: 1. It implies that every one rupee of current liabilities, current

assets of Rs. 2.80 are available to meet them.

When we compare the current ratio of both company we can say that current

ratio of Raymond is higher. It implies that Raymond has larger amount of rupees

available per rupee of current liability & the more is firm’s ability to meet current

obligations & the greater is tha safety of funds for short term creditors.

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 1.79 1.65 0.14 0.0122008 1.61 1.65 -0.04 0.0012009 1.56 1.65 -0.09 0.004

TOTAL 0.017

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Current Ratio of DIGJAM Ltd during the study period.

118JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 2.84 2.98 -0.14 0.0072008 3.31 2.98 0.33 0.0372009 2.80 2.98 -0.18 0.011

TOTAL 0.055

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal <X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Current Ratio of RAYMOND Ltd during the study period.

119JVIMS - JAMNAGAR

Quick Ratio / Acid- test Ratio: -

It is a measure of liquidity. It is a measurement of a firm’s ability to convert its

current assets quickly into cash in order to meet its current liabilities. This ratio removes

the defect of current ratio that current ratio fails to convey information on the

composition of the current assets of a firm.

Quick assets refers to current assets which can be converted into cash

immediately or at short notice without diminution of value. In this category of current

assets are cash and bank balances; short-term marketable securities;

debtors/receivables. It doesn’t include prepaid expenses & inventory.

Formula: - Quick AssetsQuick Ratio /Acid Test Ratio = -------------------------

Current Liabilities

Digjam: - (Amt in Lacs.)

4266.092007 = ------------------ = 0.88:1

4815.16

4313.51 2008 = ----------------- = 0.79:1 5464.61

4610.172009 = ----------------- = 0.84:1

5492.71

Raymond: - (Amt in Lacs.)

54124.232007 = ------------------ = 1.86:1

29083.90

120JVIMS - JAMNAGAR

60307.91 2008 = ----------------- = 2.14:1 28210.03

64124.972009 = ----------------- = 1.83:1

35044.23

YEAR DIGJAM RAYMOND2007 0.88:1 1.86:12008 0.79:1 2.14:12009 0.84:1 1.83:1

2007 2008 20090

0.5

1

1.5

2

2.5

Quick/Acid Test Ratio

DIGJAMRAYMOND

Year

Times

121JVIMS - JAMNAGAR

Interpretation: -

Quick Ratio of Digjam ltd shows fluctuating trend. In 2007 it was 0.88: 1, then in

2008 it decreases to 0.79:1 , then again in 2009 it increases to 0.84: 1.

Quick Ratio of Raymond ltd shows fluctuating trend. In 2007 it was 1.98: 1 then it

increases to 2.26: 1, in 2009 it decreases to 1.90:1

When we compare the ratio of both the company we can say that quick ratio of

Raymond ltd is comparatively higher than Digjam ltd. It shows that Raymond ltd has

good liquidity position. They can able to serve their short-term liabilities

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 0.88 0.84 0.04 0.0022008 0.79 0.84 -0.05 0.0032009 0.84 0.84 0 0

TOTAL 0.005

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Quick/Acid Test Ratio of DIGJAM Ltd during the study period.

122JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 1.86 1.94 -0.06 0.0022008 2.14 1.94 0.2 0.0212009 1.83 1.94 -0.11 0.006

TOTAL 0.029

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal <X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Quick/Acid Test Ratio of RAYMOND Ltd during the study period.

123JVIMS - JAMNAGAR

LEVERAGE RATIOS

1. Proprietary Ratio

2. Debt Equity Ratio

124JVIMS - JAMNAGAR

Proprietary Ratio: -

Proprietary Ratio indicates the extent to which assets are financed by owners

funds.

The higher the ratio, the stronger the financial position of enterprise, as it

signifies that the proprietors have provided larger funds to purchase the assets.

Formula : - Proprietors Funds Proprietary Ratio = --------------------------- x 100

Total Assets

Digjam: - (Amt in Lacs.)

23413.572007 = ------------------ x 100 = 146.32%

16000.79

23092.38 2008 = ----------------- x 100 = 148.81% 15517.98

23542.572009 = ----------------- x 100 = 158.63%

14840.81

Raymond: - (Amt in Lacs.)

135615.942007 = ------------------ x 100 = 85.47%

158664.74

125JVIMS - JAMNAGAR

141915.452008 = ----------------- x 100 = 85.19%

166592.96

114798.32

2009 = ----------------- x 100 = 56.20% 204280.57

YEAR DIGJAM RAYMOND2007 146.32% 85.47%2008 148.81% 85.19%2009 158.63% 56.20%

2007 2008 20090

20

40

60

80

100

120

140

160

180

Proprietary Ratio

DIGJAMRAYMOND

Year

Percentage

126JVIMS - JAMNAGAR

Interpretation: -

Proprietary ratio of Digjam ltd shows increasing trend. In 2007 it was 146.32%,

then in 2008 it was increased to 148.81%, & in 2009 it was 158.63%. So their

proprietary ratio is increasing fro year 2007 to 2009.

Proprietary ratio of Raymond ltd shows decreasing trend. In 2007 it was 85.47%,

it was decreased to 85.19% in 2008 and again in 2009 it was decreased to 56.20%

When we compare the proprietary ratio of both the company we can say that

proprietary of both the company we can say that proprietary ratio of Digjam ltd is

comparatively high,

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 146.32 151.25 -4.93 0.1602008 148.81 151.25 -2.44 0.0392009 158.63 151.25 7.38 0.360

TOTAL 0.559

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Proprietary Ratio of DIGJAM Ltd during the study period.

127JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 85.47 75.62 9.85 1.2832008 85.19 75.62 9.57 1.2112009 56.20 75.62 -19.42 4.987

TOTAL 7.481

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal >X2

tab . So, Ho is rejected. Therefore it can be said that there is significance

difference in the Proprietary Ratio of RAYMOND Ltd during the study period.

128JVIMS - JAMNAGAR

Debt Equity Ratio: -

Debt-equity ratio measures the ratio of long-term debt to shareholder’s fund. It

shows relationship between borrowed funds & owner’s capital. This ratio reflects the

relative claims of creditors & shareholders against the asset of the firm.

Alternatively, this ratio indicates the relative proportions of debt & equity in

financing the assets of the firm.

Formula: -

Long Term Debt Debt Equity Ratio = -----------------------------

Shareholders Fund

Digjam: - (Amt in Lacs.)

10447.112007 = ------------------ = 1.52:1

6875.79

9835.73 2008 = ----------------- = 1.44:1 6875.79

9454.272009 = ----------------- = 1.07:1

8875.79

Raymond: - (Amt in Lacs.)

56686.052007 = ------------------ = 0.42:1

1135615.94

129JVIMS - JAMNAGAR

50498.04 2008 = ----------------- = 0.35:1 141915.45

86884.812009 = ----------------- = 0.77:1

114785.32

YEAR DIGJAM RAYMOND2007 1.52:1 0.42:12008 1.44:1 0.35:12009 1.07:1 0.77:1

2007 2008 20090

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Debt Equity Ratio

DIGJAMRAYMOND

Year

Times

130JVIMS - JAMNAGAR

Interpretation: -

Debt-equity ratio of Digjam ltd shows decreasing strand. Debt equity ratio is

declinining from 2007 to 2009. In 2007 it was 1.52:1, which was decreased to 1.44:1 in

2008 and again in 2009 it was decreased to 1.07:1.

In 2009 Debt equity ratio of Digjam ltd is 1.07:1. It implies that every one rupee of

equity Rs. 1.07 debt is there.

Debt equity ratio of Raymond ltd shows fluctuating trend. In 2007 it was 0.42: 1,

which was decreased to 0.35:1 & again in 2009 it was increased to 0.77:1

In 2009 Debt equity ratio of Raymond ltd is 0.77:1 which implies that every one

rupee of equity Rs. 0.77 debt is there.

Chi - square Test for DIGJAM : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 1.52 1.34 0.18 0.0242008 1.44 1.34 0.10 0.0072009 1.07 1.34 -0.27 0.054

TOTAL 0.085

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Debt Equity Ratio of DIGJAM Ltd during the study period.

131JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 0.42 0.51 -0.09 0.0162008 0.35 0.51 -0.16 0.0502009 0.77 0.51 0.26 0.132

TOTAL 0.198

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal <X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Debt Equity Ratio of RAYMOND Ltd during the study period.

132JVIMS - JAMNAGAR

activity RATIOS

1. Stock Turnover Ratio

2. Fixed Assets Turnover Ratio

3. Overall Turnover Ratio

4. Debtors Ratio

5. Creditors Ratio

133JVIMS - JAMNAGAR

Stock Turnover Ratio: -

This ratio indicates whether investment in inventories is within proper limits or not

keeping in view the turnover of the business.

Stock Turnover ration indicates how fast inventory is sold. A high ratio is good

from the viewpoint of liquidity and vice versa. A low ratio would signify that inventory

doesn’t sell fast and stays on the shelf or in the warehouse for a long time.

Formula: -

Cost of Goods Sold (COGS) Stock Turnover Ratio = ---------------------------------------- Average Stock

Where,

Cost of goods sold (COGS) = Opening Stock

+ Purchases

+ Purchase Expenses

- Closing Stock

Opening Stock + Closing Stock Average Stock = --------------------------------------------- 2

Digjam: - (Amt in Lacs.)

5131.762007 = ------------------ = 1.49 times

3448.63

4197.29 2008 = ----------------- = 1.20 times 3497.12

134JVIMS - JAMNAGAR

3823.172009 = ----------------- = 1.18 times

3227.12

Raymond: - (Amt in Lacs.)

10651.522007 = ------------------ = 0.63 times

17020.18

12469.90 2008 = ----------------- = 0.76 times 16487.09

9454.272009 = ----------------- = 0.43 times

8875.79

YEAR DIGJAM RAYMOND2007 1.49 times 0.63 times2008 1.20 times 0.76 times2009 1.18 times 0.43 times

2007 2008 20090

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Stock Turnover Ratio

DIGJAMRAYMOND

Year

Times

135JVIMS - JAMNAGAR

Interpretation: -

Stock turnover ratio of Digjam ltd. Shows increasing trend. In 2007 it was 1.18

times then it increases to 1.20 times & in 2009 it is 1.49 times.

Stock Turnover ratio of Raymond ltd shows fluctuating trend. IN 2007 it was 0.43

times then it increases to 0.76 times then in 2009 it was 0.63 times.

When we compare the ratio of both company we can say that Digjam ltd has high

stock turnover ratio , it shows that inventories are sold fast & doesn’t stay in warehouse

for a long time. While Raymond ltd has low stock turnover ratio as compare to Digjam, it

shows that inventories are not sold fast & stays in warehouse for a long time.

Chi - square Test for DIGJAM: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 1.49 1.29 0.20 0.0312008 1.20 1.29 -0.09 0.0062009 1.18 1.29 -0.11 0.009

TOTAL 0.046

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Stock Turnover Ratio of DIGJAM Ltd during the study period.

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Chi - square Test for RAYMOND: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 0.63 0.61 0.02 0.0012008 0.76 0.61 0.15 0.0372009 0.43 0.61 -0.18 0.053

TOTAL 0.091

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal <X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Stock Turnover Ratio of RAYMOND Ltd during the study period.

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Fixed Assets Turnover Ratio: -

The Fixed assets turnover ratio measures the efficiency with the firm is utilizing

its investment in fixed assets. It also indicates the adequacy of sales in relation to the

investment in fixed assets. To ascertain the efficiency & profitability of business, the

total fixed assets are compared to sales

The greater the ratio more will be efficiency of assets usage.

Formula: -

Sales Fixed Asset turnover Ratio = -------------------

Fixed Asset

Digjam: - (Amt in Lacs.)

10802.492007 = ------------------ = 1.47 times

7363.05

11104.63 2008 = ----------------- = 1.66 times 6703.58

13992.892009 = ----------------- = 2.24 times

6245.76

Raymond: - (Amt in Lacs.)

128419.352007 = ------------------ = 1.67 times

76174.15

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132251.15 2008 = ----------------- = 1.80 times 73310.87

137919.382009 = ----------------- = 1.30 times

106115.24

YEAR DIGJAM RAYMOND2007 1.47 times 1.67 times2008 1.66 times 1.80 times2009 2.24 times 1.30 times

2007 2008 20090

0.5

1

1.5

2

2.5

Fixed Assets Turnover Ratio

DIGJAMRAYMOND

Year

Times

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Interpretation: -

Fixed assets turnover ratio of Digjam ltd shows increasing trend. In 2007 it was

1.47 times then it increases to 1.66 times & in 2009 it was 2.24 times. It shows good

efficiency of Digjam in utilizing its investment in fixed assets.

Fixed assets turnover ratio of Raymond ltd shows fluctuating trend. In 2007 it

was 1.67 times then it was 1.80 times in 2008 & in 2009 it decreases to 1.30 times. It

shows average efficiency of Raymond in utilizing its investment in fixed assets.

When we compare the ratio of both company fixed assets turnover ratio was high

in Raymond ltd in the year 2007 & 2008. It shows that in 2007 & 2008 efficiency of

Raymond in utilizing its investment in fixed assets is good, while in 2009 fixed assets

turnover ratio of Digjam ltd was high this shows good efficiency of Digjam for year 2009

in utilizing its investment in fixed assets.

Chi - square Test for DIGJAM: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 1.47 1.79 -0.32 0.0572008 1.66 1.79 -0.13 0.0092009 2.24 1.79 0.45 0.113

TOTAL 0.179

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Fixed Assets Turnover Ratio of DIGJAM Ltd during the study period.

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Chi - square Test for RAYMOND: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 1.67 1.59 0.08 0.0042008 1.80 1.59 0.21 0.0282009 1.30 1.59 -0.29 0.053

TOTAL 0.085

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal <X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Fixed Assets Turnover Ratio of RAYMOND Ltd during the study period.

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Overall Turnover Ratio: -

The overall turnover ratio shows overall turnover of the business in times. It

indicates how many times business can stand against the net sales; it means efficiency

or total capital employed of the business against net sales of the firm. It obtains by

dividing net sales with capital employed.

Formula: - Net Sales Overall turnover Ratio = -------------------------

Capital Employed

Digjam: - (Amt in Lacs.)

10802.492007 = ------------------ = 0.71 times

20760.06

11104.63 2008 = ----------------- = 0.55 times 20177.54

13992.892009 = ----------------- = 0.52 times

19660.25

Raymond: - (Amt in Lacs.)

128419.352007 = ------------------ = 0.91 times

141415.94

132251.15 2008 = ----------------- = 0.75 times 176458.17

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137919.38

2009 = ----------------- = 0.70 times 195363.49

YEAR DIGJAM RAYMOND2007 0.71 times 0.91 times2008 0.55 times 0.75 times2009 0.52 times 0.70 times

2007 2008 20090

0.10.20.30.40.50.60.70.80.9

1

Overall Turnover Ratio

DIGJAMRAYMOND

Year

Times

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Interpretation: -

Overall turnover ratio of Digjam ltd shows increasing trend. In 2007 it was 0.52

times then it was increased to 0.55 times then it was increased to 0.71 times.

Overall turnover ratio of Raymond ltd shows decreasing trend. In 2007 it was

0.91 times then it was 0.75 times & then in 2009 it decreased to 0.70 times.

When we compare the ratio of both company we can say that overall turnover

ratio of Raymond ltd is high. It’s a good sign of management for Raymond ltd & its

capital employed are efficiently used.

Chi - square Test for DIGJAM: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 0.71 0.59 0.12 0.0142008 0.55 0.59 -0.04 0.0032009 0.52 0.59 -0.07 0.008

TOTAL 0.025

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Overall Turnover Ratio of DIGJAM Ltd during the study period.

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Chi - square Test for RAYMOND: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 0.91 0.79 0.12 0.0182008 0.75 0.79 -0.04 0.0022009 0.70 0.79 -0.09 0.010

TOTAL 0.030

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal <X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Overall Turnover Ratio of RAYMOND Ltd during the study period.

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Debtors Ratio: -

The ratio shows the number of days taken to collect the dues of credit sales. It

shows the efficiency or otherwise of the collection policy of the enterprise. This ratio

shows how quickly debtors are converted into cash.

In, other words debtors ratio is a test of the liquidity of a firm. The debtors

turnover shows the relationship between credit sales & debtors of a firm.

Formula: - Debtors Debtors Ratio = ------------------ x 365

Credit Sales

Digjam: - (Amt in Lacs.)

2453.90 2007 = -------------- x 365 = 83days 10802.49

2641.91 2008 = -------------- x 365 = 86 days 11104.63

3157.20 2009 = -------------- x 365 = 82 days 13992.89

Raymond: - (Amt in Lacs.)

26877.07 2007 = -------------- x 365 = 76 days 128419.35

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28988.56 2008 = -------------- x 365 = 80 days 132251.15 30447.61 2009 = --------------- x 365 = 81 days 137919.38

YEAR DIGJAM RAYMOND2007 83 days 76 days2008 86 days 80 days2009 82 days 81 days

2007 2008 200970

72

74

76

78

80

82

84

86

88

Debtors Ratio

DIGJAMRAYMOND

Year

Days

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Interpretation: -

Debtors ratio of Digjam ltd shows fluctuating trend. In 2007 they are getting

payments in 83 days which was increased to 86 days in 2008 & in 2009 they are getting

payments within 82 days.

Debtors Ratio of Raymond ltd shows increasing trend, In 2007 they are getting

payment within 76 days, the in 2008 it increases to 80 days & in 2009 it increases to 81

days.

When we compare debtors ratio of both companies we can say that debtors ratio

of Raymond ltd is comparatively lower as compare to Digjam. They are getting payment

early from their debtors, It shows shorter time lag between credit sales & cash

collection.

Chi - square Test for DIGJAM: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 83 83.67 -0.67 0.0052008 86 83.67 2.33 0.0652009 82 83.67 -1.67 0.033

TOTAL 0.103

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal < X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Debtors Ratio of DIGJAM Ltd during the study period.

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Chi - square Test for RAYMOND: -

Year ObservedFrequency

(OI)

ExpectedFrequency

(Ei)

(Oi-Ei) (Oi-Ei)2 / Ei

2007 76 79 -3 0.1142008 80 79 1 0.0132009 81 79 2 0.051

TOTAL 0.178

D.f = n-1 = 3-1=2

Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991

X2cal <X2

tab . So, Ho is accepted. Therefore it can be said that there is no significance

difference in the Debtors Ratio of RAYMOND Ltd during the study period.

.

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SWOT ANALAYSIS

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SWOT Analysis

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Strength

1. Participative leadership style of management.

2. Co-ordination mgt. Policy.

3. Give facility to employees.

Opportunity

1. Good after sales service.

2. Fully satisfaction among

customers.

3. Increasing in market sales value.

4. Digjam is going to enter into market of shirtings.

Weakness

1. No more expense in

advertisement.

2. Ability to expand diversifies

basis in the line with

market trends, demands

and requriemnets(Ready

made garments).

Threat

1. Cut throught competition with

Raymond, Raid and Tailor,

Reliance, Dines etc…at

national level

2. Change in consumer

preference towards

readymade garments.

GENERAL INFORMATION

1. Name of the companyAns. DIGJAM woolen mill

2. what is the address of the companyAnds. DIGJAM Limited,

Aerodrome Road,

Jamnagar – 361 006

Gujarat.

3. where is the head officeAns. DIGJAM Limited,

Aerodrome Road,

Jamnagar – 361 006

Gujarat.

4. who is the chairman of the company Ans. S. K. Birla – Chairman

Siddharth Birla – Vice Chairman

5. who is the bankers of the companyAnds.

a. UCO Bank

b. Bank of India

c. Bank of Baroda

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d. PNB

e. Punjab & Sind Bank

f. SBI

g. SBS

h. Standard Chartered Bank

i. UBI

6. who is the auditor of the companyAns. Deloitte Haskins & Sells

7. which is the establishment yearAns. 1948 – 49

8. which are the departments available in the company

Ans. There are main 8 departments in the company like

PPC department Production department Personnel department Finance department Sales & marketing department Quality control department Export department Design & development department

9. phone no of the companyAns. (O288)2712972

10. what is the fax no. of the companyAns. (0288)2712991

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11. what is the URL address of the companyAns. www.digjam.co.in

12. what is the email id of the companyAns. ________@digjam.co.in.

13. what is total hour acored by the companyAns.24 hour.

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PRODUCTION DEPARTMENT

1. products of your company Ans.

Blazers

Trousers

Sherwani

Safari

suiting & shirting

2. which are the raw materials usedAns. Greasy wool & polyester

3. how is the production processAns.

Grey combing

Tow to top converting

Dyeing & back washing

Recombing

Spinning

Weaving

Finishing & folding

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4. which production layout does company followsAns. DIGJAM follows process layout

5. how inventory is doneAns. As per the requqirment and according to order they maintain inventory. appoximent they keep stock 3 month

Average periodical requirement of production department To maintain inventory by involving minimum funs. To keep stock according to space availability. To maintain stock after considering purchase lead time.

6. what is the waste management systemAns. company sale their by product and company has a etp plant for purify the waste water .

7. which type of technology do they useAns. Company has a latest technological laboratory and as well as production machine.

8. what do they do for quality controlAns. For maintain the quality they test their quality in each stage of the process.

9. what is the capacity of productionAns. The total weaving capacity of the plant is 7 million meters per annum.

10. quality standard of the companyAns. ISO 9001:2009

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11. how do company test their qualityAns. For maintain the quality they test their quality in each stage of the process.

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PERSONNEL DEPARTMENT

1. how is organizing done in personnel departmentAns. The main function of the personnel dept. is to maintain a peacefull enviorment in the organization.

2. which are the sources of recruitmentAns. Internal and external sources .

3. how selection is doneAns. selection are done based on requirement of

different department. they take person based

on education and their experience

4. how interview is doneAns. Telephonic interview, oral interview, department wise interview, H.R. interview, medical fitness test, and final selection.

5. how training is given to the workers apprentice training are given to the

worker who are new come in their work.

And stipend are given to that worker

6. how development is doneAnds To provide a proper training to the worker and employee , therefore company can improve worker’s efficiency.

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7. how promotion is given to the workersAnds .Based on experience and performance of

their work promotion are given to the employee.

8. how transfer is given to the workersAns. In the company, the permanent employee or worker are absent in the organization , to fill up their space or temporary work company has to appoit a person it’s called “BADLI” . And this person regular entry done in the temporary register.

9. how is performance appraisal system of the companyAns. company having a performance appraisal form through which company decide some crieteria for performance appraisal, that is less absents, attendance,experience, behavior, past record, knowledge

10. how wages and salary is given to the employeesAns. minimum wages are given to the worker.

11. what benefits and services are given to the employeesAns.

● Canteen facilities are available for the worker and employee at regular interval.

● Water and sanitation facilities are available.

● Telephone facilities are available to some employee.

● Internet, extranet & intranet facilities.

● Provident fund and gratuity funds facilities.

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● Casual leave, sick leave and privilege leave to worker and employees.

● Festival advances and bonus to worker at their attendance bases.

● Provide quarter to employees for housing to nearer to unit.

● Park and garden facilities to employees in front of their residences.

● Cable connection for T.V. of their employees at rein the residences.

● Pension fund & ESI scheme also provided by the unit.

● Training facilities are available in the unit.

● Available of pollution free environment for the safety of their workers health.

● Library, parking area, security guards, welfare activity.

● Petrol allowance to employee for office works.

12. how many hours are in one shiftAns. 8 hours & 30 minutes in one shifts and night shift have 7 hours.

13. how many shifts are there in the companyAns. There are 3 shifts

7:00AM to 3:30PM 3:30PM to12:00AM 12:00AM to7:00AM

14. how many employees are working in the companyAns. 515 employees & 1050workers

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MARKETING DEPARTMENT

1. what is the distribution channel Ans. Company to retailer

Company to direct customer.

Company to wholesaler

2. how is the organization in marketing department Ans. DOMESTIC SALES

VP (S&M)

(Shri Ravinder Sharma)

EAST WEST SOUTH NORTH

SR. MANAGER DY. GM GM

(Shri Rajesh Sharma) (Shri Sharad Goel) (Shri Amit Gupta)

SR. MANAGER

DY. MANAGER / ASST. MANAGER

SALES OFFICERS

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3. are you dealing in global marketing Ans. Yes,

4. how transportation arrangement done Ans. Company doing their transportation in two way.

1. By ship2. By air

And also company purchase their raw material from forigen country by ship which is land at nahava seva port, Mumbai .

And company transport their finished good by truck.

5. who are your competitors Ans.main competitor is Raymond.

6. how is the company doing their advertisement Ans. through T.V. , magazine, & newspaper.

7. what is your advertisement budget Ans. Advertising budget of digjam is 10% of turnover of that year.

8. how is the company doing market research Ans. Through Research agency

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FINANCE DEPARTMENT

1. how is the company doing their financial planning Ans. “DIGJAM Ltd.” Undertakes both the term of planning. Short term planning is done for current assets and long term planning is done for fixed assets.

2. what is the capital structure of the companyAns.

Year Authorized Issued Subscribed Called UpLess : Calls

in ArrearsForfeited Paid Up

2009 80.00 68.76 68.76 68.74 0.00 0.02 68.76

2008 80.00 68.76 68.76 68.74 0.00 0.02 68.76

2007 80.00 68.76 68.76 68.74 0.00 0.02 68.76

2006 80.00 13.02 13.01 13.01 0.00 0.02 13.03

2005 80.00 65.12 65.07 65.07 0.00 0.02 65.09

2004 80.00 65.12 65.09 65.07 0.00 0.02 65.09

2002 80.00 65.12 65.09 65.07 0.00 0.02 65.09

2001 80.00 65.12 65.09 65.07 0.00 0.02 65.09

200080.00 65.12 65.09 65.07 0.00 0.02 65.09

3. how is the management of fixed assets

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Ans. In DIGJAM Ltd., assets are being depreciated on the basis of the straight line method. They have also maintained depreciation fund on its fixed assets to purchase new assets in future. Following are the fixed assets of DIGJAM Ltd.

4. what is the capital budgeting of the companyAns. DIGJAM using pay back period method for evaluating the investment proposals.

5. how is the management of working capitalAns. There are mainly three components of working capital, are to be managed by DIGJAM

1. Inventory management2. Cash management3. Received management

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