Project Report on-

RATIO ANALYSIS -

At Northern Coalfields Limited Singrauli

Presented by- Shashank Pandey

Introduction of topic-

•To analyze the financial position of NORTHERN COALFIELDS LIMITED, different tools are used , of Ratio Analysis.

• Financial analysis involves the use of various financial statements. These statements do several things.

• First the balance sheet and the second is income statement.

IMPORTANCE

Ratio analysis is an important technique of financial analysis. It is a means for judging the financial health of a business enterprise. It determines and interprets the liquidity, solvency, profitability, etc. of a business enterprise

Objective of study-• Analysis of financial statements is an attempt

to assess the efficiency and performance of an enterprise. For that there are some objectives which are described as under.

1. Earning capacity or profitability2. Comparative position in relation to other firm.3. Efficiency of management4. Financial strength

Company profile-

NCL is a subsidiary of Coal India Limited (CIL). It was founded in the year (1984). Earlier it was a subsidiary of Central Coalfields Limited (CCL). It is among the top PSU's in India. NCL is the only subsidiary of CIL producing 100% of coal from opencast mines. There is steep rise in the coal demand on NCL to meet the power and energy needs of the country . (44.43MT in 2002-03 to 78.44MT in 2011-12).

The major demand of coal on NCL is from power sector, which contributes more than 96% of the total demand. The CILs production level in the year 2011-12 is projected as 619.67 million tones out of which NCLs contribution will be 78 million tonnes.

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Research Methodology-

The research is done through : • Journals : I have used the the organizational journals published by the company

for collecting the data. • Annual Reports : Annual reports are the best way to collect the information

about the company. If we are going to conduct any research work in the field of Finance then we must should have to refer the company’s Annual Report.

• Plant visit : By visiting the Plant I came to know that what is the real scenario,

what is the position of the company? How the work flows ? etc. then I collected the relevant information which I was needed to complete my project.

• Personal discussion and interaction : I have Discussed with the concerned people and thus collected information for the research.

RATIO ANALYSIS-

According to Myers-

Ratio analysis is a “study of relationship among the various financial factors in a business.”

TYPES OF RATIOS-

1. Liquidity ratios

2. Turnover Ratios-

3. Leverage Ratios

4. Profitability Ratios

vision &Mission-VISION-• “Be the leading energy supplier in the

country, through best practices from mine to market.”

MISSION-• “The mission of Coal India Limited is to

produce and market the planned quantity of coal and coal products efficiently and economically with due regard to safety, conservation, quality and environment.”

Finding-I came across following suggestions and findings during undergoing the

project work on topic“FINANCIAL ANALYSIS OF NORTHERN COALFIELDS LIMITED”.

1.In NCL the coordination among the various sections of the Finance & Accounts department is very nice, as the Finance & Accounts department is a big department consisting of near about 32 sections. It is the work force of the Finance & Accounts department, which makes it possible.

2.In the NCL there not to create debtors they generally deal with first to receive the cash or cheque, and then they supply the finished material. 3. In the NCL there working capital management is very good, they use the IBS (ERP system) to manage the over all activity.

Conclusion-After analyzing the different Ratios of the Northern Coalfields Limited I found that the Company is really in Good financial condition because the management has taken a great effort in managing the funds like acquiring and allocation of the funds, optimum utilization of the available resources. The analysis shows that the profitability of the company is increases as compared to the last years due to high production and sells with lesser expenses

LIMITATION-

The ratios analysis is one of the most powerful tools of financial management. Though ratios are simple to calculate and easy to understand,

they suffer from serious limitations1. Limitations of financial statements2. Comparative study required3. Problems of price level changes4. Lack of adequate standard5. Limited use of single ratios

Thank You