YUVA Main Project MBA

8/6/2019 YUVA Main Project MBA

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CHAPTER-I

ABSTRACT

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ABSTRACT

Financial performance study is to analysis about overall financial activities of the

Company. Finance plays a key role in a companys success, gives accurate and reliable

Information on financial parameters and helps for the decision making process of the Corporate

management.

The required datas are collected from finance department. It is divided ion to two

Categories, which are primary data and secondary data. Primary data is collected from Finance

department by querying them. Secondary data already exists data, like company Balance sheet and

other finance documents.

The major objectives of this project is to analysis the financial position of the Company,

identify the problem and provide suggestion for the improvement, a Comparative study of the

company balance sheet and sales & profit trends of the Company.

Different methods are used to analysis financial performance of the company, Such as

comparative financial statement, common-size statements, trend analysis, and ratio analysis.

Financial statement may not be realistic since they are prepared by following Certain basic

concepts and conventions. Financial disclose only monetary facts. Those Transactions, which

cannot be measured by monetary terms, are not reflected in these Statements. A highly efficient

concern may conceal its real profitability by disclosing loss Or minimum profit whereas an

inefficient concern may declare dividend by wrongly Showing profit in the books.

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CHAPTER-II

INTRODUCTION

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CHAPTER- II

1.1 Introduction

Financial performance study is to analysis about overall financial activities or the

Company.

Any successful organization needs information both internally and externally. Accurate

And reliable information form the foundation for good decision-making. Finance plays a key role.

In a companys success. This is the moving force within the organization. Accurate and reliable

Information on financial parameters speeds up the decision making process of the corporate

Management.

Financial performance analysis is prepared for the purpose of presenting a periodical

Review and deal with the state of investment in business and result achieved during the period

under review. They reflect a combination of recorded facts. Financial statements are prepared at

the end of accounting period so that various parties may take decisions of their future actions in

Respect of the relationship with the business.

1.2 Importance

Financial statements provide information to owners regarding the funds invested in the

Business. Bankers and other lenders of money want to know the financial position of a concern

before giving loans. Prospective investors who want to invest money in the firm would like to

make an analysis of the financial statements of that firm to know how safe proposed investment

would be.

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The financial statements being a mirror of the financial position of the firms are of

immense value to the research scholar who wants to make a study into financial operations of a

Particular firm.

1.3 Analysis and Interpretation of Financial Statement

Analysis and interpretation of financial statements, therefore, refers to such a treatment of

the information contained in the income statement and the balance sheet so as to afford full

Diagnosis of the profitability and financial soundness of the business.

A distinction here can be made between the two terms Analysis and Interpretation. The

Term analysis means methodical classification of the data given in the financial statement. The

Figures given in the financial statements will not help one unless they are put in a simplified Form.

For example, all items relating to current assets are put at one place while all items relating To

current liabilities are put at another place. The term Interpretation means explaining the Meaning

and significance of the data so simplified.

Both analysis and interpretation are complementary to each other interpretation requires

Analysis, while analysis is useless without interpretation. Most of the authors have used the term

Analysis only to cover the meanings of both analysis and interpretation, since analysis involves

Interpretation.

1.4 TYPES OF FINANCIAL ANALYSIS

a) According to Nature

(i) External analysis

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Those who are outsiders for the business do this analysis. The term outsiders include

Investors, credit agencies, government agencies and other creditors who have no access to the

Internal records of the company. These persons mainly depend upon the published financial

Statements. Their analysis serves only a limited purpose. The position of these analysts has

Improved in recent times on account of increase governmental control over companies and

Governmental regulations requiring more detailed disclosure of information by the companies in

Their financial statements.

(ii) Internal analysis

This analysis is done by persons who have access to the books of account and other

Information related to the business. Executives and employees of the organization or by officers

Appointed for this purpose by the government or the court under powers vested in them can

Therefore, do such analysis. This analysis is done depending upon the objective to be achieved

Through this analysis.

(b) According to Objectives

(i) Long-term analysis

This analysis is made in order to study the long term financial stability, solvency and

Liquidity as well as profitability and earning capacity of a business concern. The purpose of

Making such type of analysis is to know whether in the long run the concern will be able to earn A

minimum amount which will be sufficient to maintain a reasonable rate of return on the

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Investment so as to provide the funds required for growth and development of business and to

Meet its cost of capital.

(ii) Short-term analysis

This is made to determine the short-term solvency stability and liquidity as well as Earning

capacity of the business. The purpose of the analysis is to know whether in the short run A

business concern will have adequate funds really available to meet its short-term requirements And

sufficient borrowing capacity to meet contingencies in the near future.

( c ) According to Mode

(i) Horizontal analysis

This analysis is made to review and analyze financial statements of a number of years And

therefore based on financial date taken from several years. This is very useful for long-term Trend

analysis.

(ii) Vertical analysis

This analysis is made to review and analyze the financial statements of one particular Year

only. Ratio analysis of the financial year relating to a particular accounting year is an Example of

this type of analysis.

1.5 Tools of Financial Performance Analysis

Comparative Financial Statements

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Common Size Statements

Trend Analysis

Ratio Analysis

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1.6 OBJECTIVES

Primay Objectives

To analyze the financial performance of the company through the relevant financial

ratios & other method.

To study the financial position of the company.

Secondary Objectives

To have a comparative study of the company balance sheet and profit & loss account

Between various years.

To find the liquidity position of the company.

To find profitability position of the company and analysis of sales.

To identify the problem and provide suggestion for the improvement.

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1.7 DATA COLLECTION

The datas are obtained from the two methods

1. Primary data

2. Secondary data

Primary data

Primary data comprises information obtained by during discussions with the officials.

Secondary data

The secondary data comprises of information obtained from annual reports, balance sheet

And other financial statements, files and some other documents maintained by Organization.

In the study maximum part of the data obtained is from secondary data i.e., the annual

Reports etc and the rest is form primary data.

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1.8 LIMITATIONS

The study covers only a period of three years.

The study is based only on secondary data.

There may be basis in the published data. But this deficiency could be over come by the

Adoption of scientific evaluator methods.

The study will be only a provisional one based on the data collected from the report and

Accounts during the period and its subject to refinement.

The economic and government policies etc. may affect the industry after the study, which

Is not taken into consideration.

The studies on ratios of the company are not compared with some benchmark ratios

(industry averages) due to lack of the information regarding it.

Due to lack of constraints in time and source of information approach has not been

Fulfilled successfully.

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PROFILE

Chapter-3.I

.NDUSTRY PROFILE

CHAPTER-III

INDUSTRY

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The first manufacturing unit set up by our founders, in Chennai, Tamilnadu, in 1963, to

produce various grades of Ultramarine Blue for Laundry as well as Industrial purposes, in

partnership with Bayer AG. Today it is one of the largest Pigment and Surfactant manufacturing

companies in the world servicing prominent Polymer, Personal Care, Specialties, and Cosmetic

companies worldwide.

Lapiz Divisions set up by Ultramarine & Pigments Limited in 1999 offers Business Process

Outsourcing facility for US and UK markets. TCL, with its extensive experience for over three

decades in applied research, laboratory-scale synthesis, and development of effective

manufacturing process, set up TCL Research in 2005.

TCL Research offers research services to Pharma, Cosmetic and Intermediates Companies

in Europe and the USA, in Custom Synthesis, Product Development, Process Development, Scale-

up and small volume manufacturing.

Since 1982, TCL operates a large, multi-product Liquid Storage Terminal at Chennai Port,

to receive petrochemicals directly from ships at 3 Berths, store and load the material into railway

tankers to transport it to the final destination. It is rated among one of the best operated

petrochemical terminals in India.

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CHAPTER-IV

COMPANY PROFILE

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COMPANY PROFILE

Ultramarine & Pigments Ltd., endeavor to serve the customers with range of pigments and

surfactants and in the process, be the most preferred supplier. To achieve this, we constantly study

and understand the needs and expectations of our customers by offering quality products and

services with an uncompromising sense of responsibility and a firm commitment to the society.

Ultramarine & Pigments Ltd is one of the largest Pigment and Surfactant manufacturing

company of Indian origin, having two factories in South India. It specializes in the manufacture of

Inorganic Pigments and Organic Surfactants with international Quality standard. Today the

company produces diverse range of products.

ULTRAMARINE BLUE is a very safe, non-hazardous blue pigment with a variety of

applications worldwide. Its synthetic manufacturing process and possibility for close control over

its physical, chemical, and colour characteristics enable the production of several types of this blue

pigment, which are readily accepted by plastic, printing ink, paint, cosmetic and many other

industries due to advantages over other organic pigments and dyes. Besides, Ultramarine blue is an

environment friendly pigment available to the industry today.

LINEAR ALKYL BENZENE SULPHONIC ACID

LINEAR ALKYL BENZENE SULPHONIC ACID (LABSA) is produced in the most

sophisticated "Falling Film Reactor", with Italian technology. The process is automated fully with

most modern computer aided process equipment to produce high quality products with consistency.

LABSA is an anionic surfactant widely used in the formulations of all ranges of domestic

detergents and dishwash liquids. It is specially suited for the manufacture of all types of detergent

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powders and cakes. Due to its high active matter, quick miscibility with water and low salt content,

it easily finds its way in to variety of liquid formulations.

QUALITY ASSURANCE

Ultramarine & Pigments Ltd., is equipped with an excellent infrastructural setup which

includes most modern production equipments, process and Quality control instruments,

continuously updated technical know-how, Quality management and assurance systems. The

Quality assurance system ensures that every batch of products conforms to the grade specification

in all aspects.

Technically superior approach to analysis and measurements are constantly identified and

implemented. Besides, the organization has implemented ISO 9002 Quality system management

standard and ISO 14001 Environment system management standard.

We always strive to meet the customer demand with all aspects of Quality, delivery, and

technical services.To meet the needs and expectations of the customer, the company makes efforts

to implement important tasks of training, utilizing qualified and skilled people in solving

application oriented problems of the customer.

The company provides free technical service to industrial customers irrespective of the size,

and the technical service department maintains close link with industry, visiting customers to

understand their requirements, to provide solutions to customers who are encountering difficulties.

The technical service laboratory explores the possibility of widening the application

horizon to serve the industry better. Ultramarine & Pigments Ltd., creates Customer relationship

management with every customer, through service and communication to enhance long-term

relationship.

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CHAPTER-V

REVIEW OF

LITERATURE

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4.1 COMPARATIVE FINANCIAL STATEMENTS

Comparative financial statements are those statements, which have been designed in a Way

so as to provide time perspective to the consideration of various elements of financial Position

embodied in such statements. In these statements figures for two or more periods are placed side by

side to facilitate comparison. The preparation of comparative financial and operating statement is

an important device of horizontal financial analysis.

The American Institute of Certified Public Accountants has explained

The presentation of comparative financial statements in annual and other reports Enhances

the usefulness of such reports and brings out more clearly the nature and trend of Current changes

affecting the enterprise. Such presentation emphasizes the fact that statement for A series of

periods is far more significant than those of a single period and that the accounts of One period are

but an installment of what is essentially a continuous history. In any one year, it is Ordinarily

desired that the Balance sheet, the Income statement and the surplus statement be Given for one or

more preceding years as well as for the current year

It is divided into two categories

Comparative Income Statement

Comparative Balance sheet

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Comparative Income Statement

The income statement discloses Net profit or Net loss on account of operations. A

Comparative income statement will show the absolute figures for two or more periods, the

Absolute change from one period to another and, if desired, the change in terms of percentages.

Since the figures for two or more periods are shown side by side, the reader can quickly ascertain

Whether sales have increased, whether cost of sales has increased or decreased, whether cost of

Sales has increased or decreases, etc.

Comparative Balance Sheet

Comparative Balance sheet as on two or more different dates can be used for comparing

Assets and liabilities and finding out any increase or decrease in those items. Thus, while in a

Single Balance sheet the emphasis is on present position, it is on change in the comparative

Balance sheet.

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4.2 COMMON-SIZE FINANCIAL STATEMENT

Common-size financial statements are those in which figures reported are converted into

Percentages to some common base.

Comparative Common-Size Financial Statement

The comparative common-size financial statements show the percentage of each item to the

total in each period but not variations in respective items from period to period.

It is divided into two categories

Common-size balance sheet

Comparative common-size balance sheet

Common-Size Balance Sheet

Common-size Balance sheet means, the whole Balance sheet is converted into percentage

Form.

Comparative Common-Size Balance Sheet

When Balance sheets of the same concern for several years or when Balance sheet of two

Or more than two concerns for the same year are converted into percentage form and presented as

Such, they known as Comparative common-size Balance sheets.

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4.3 TREND ANALYSIS

Comparing the past data over a period of time with a base year is called trend analysis. The

method of calculating trend percentages involves the calculation of percentage relationship That

each item bears to the same item in the base year. Any year may be taken as the base year. It Is

usually the earliest year. Any intervening year may also be taken as the base year. Each item of

Base year is taken as 100 on that basis the percentages for each of the items of each of the years

Are calculated. These percentages can also be taken as Index Numbers showing relative changes

In the financial data resulting with the passage of time.

The method of trend percentages is a useful analytical device for the management since By

substituting percentages for large amounts; the brevity and readability are achieved. However,

Trend percentages are not calculated for all of the items in the financial statements. They are

Usually calculated only for major items since the purpose is to highlight important changes.

It is mainly used for

Sales trend analysis

Profit trend analysis

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4.4 RATIO ANALYSIS

Ratio

The term ratio refers to the numerical or quantitative relationship between two figures. A

Ratio is the relationship between two figures, and obtained by dividing the former by the latter.

Ratios are designed to show how one number is related to another. It is worked out by dividing

One number by another.

Ratio can be expressed in two ways

Times

Percentage

Times

When another divides one value, the unit used to express the quotient is termed as

Times.

Percentage

If 100 multiply the quotient obtained, the unit of expression is termed as percentage.

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1) CURRENT RATIO

Current Ratio is expresses relationship between current assets and current liabilities. It is

The most common ratio for measuring liquidity. Being related to working capital analysis, it is

Also called the working capital ratio. The current ratio is the ratio of total current assets to current

Liabilities.

The current ratio of a firm measures its short-term solvency. It is ability to meet short-

Term obligations. As a measure of short-term current financial liquidity, it indicates the rupees of

Current assets available for each rupees of current liability/obligation. The higher the current

Ratio, the larger the amount of rupees available per rupee of current liability, the more the firms

Ability to meet current obligations and the greater the safety of funds of short-term creditors.

Formula

Current Assets

Current Ratio = --------------------------

Current Liabilities

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Current Assets

Which assets are easy to converted cash or which assets are easy to realized within one

Year, is called current assets. The current assets of a firm represent those assets, which can be in

The ordinary course of business converted into cash within a period not exceeding one year.

2) QUICK RATIO

Quick ratio is also known as liquid ratio or acid test ratio or near money ratio. It is the

Ratio between quick or liquid assets and quick liabilities. It indicates the relation between strictly

Liquid assets whose value is almost certain on the one hand, and strictly liquid liabilities on the

Other.

Formula

Liquid Assets

Liquid Ratio = ---------------------------

Liquid Liabilities

Liquid Assets

Liquid assets means, which assets are immediately convertible into cash without much

Loss.

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Liquid Assets = Current Assets (Stock and Prepaid Expenses)

Liquid Liabilities

Liquid liabilities mean liabilities which are payable within a short period.

Liquid liabilities = Current Liabilities Bank Overdraft

3) STOCK TURNOVER RATIO

Stock Turnover Ratio is also known as Stock Velocity. This ratio is calculated to

consider The adequacy of the quantum of capital and its justification for investing in inventory. A

firm Must have reasonable stock in comparison to sales. It is the ratio cost of sales and average

Inventory. This ratio helps the financial manager to evaluate inventory policy. This ratio reveals

The number of times finished stock is turned over during a given accounting period. This ratio is

Used for measuring the profitability.

This ratio indicates whether investment in inventory is efficiently used or not. It,

Therefore, explains whether investment in inventories is within proper limits or not. The quantum

Of stock should be sufficient to meet the demands of the business but it should not be too large to

Indicate unnecessary lock-up of capital in stock and danger of stock items obsolete and getting it

Wasted by passing of time.

The inventory turnover ratio measures how quickly inventory is sold. It is a test of

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Efficient inventory management. To judge whether the ratio of a firm is satisfactory or not, it

should be compared over a time on the basis of trend analysis.

Formula

Net Sales

Stock Turnover Ratio = -----------------------------------

Average Inventory at Cost

Opening Stock + Closing Stock

Average Stock = -------------------------------------------

2

4) DEBTORS TURNOVER RA IO

This is also called Debtor Velocity or Receivable Turnover. A firm sells goods on

Credit and cash basis. When the firm extends credits to its customers, book debts (Debtors or

Account Receivable) are created in the firms account: debtors expected to be converted into Cash

over short period and thus included in current assets. A debtor includes the amount of Bills

Receivables and Book Debts at the end of accounting period. It is most essential that a b

Reasonable quantitative relationship between Outstanding Receivables and Sales should always be

maintained. If the firm has not been able to collect its debtors within a reasonable time its Funds

are unnecessarily locked up in Receivables. In such case short-term loans have to be arranged for

paying off its current liabilities. The liquidity position of the firm depends on the Quality of

debtors to a great extent.

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The purpose of this ratio is to measure the liquidity of the Receivables or to find out the

Period over which Receivables remain uncollected.

Financial analysts to judge the liquidity of a firm use two ratios. They are

Debtors turnover ratio

Debt collection period ratio

Formula

Total Sales

Debtor turnover ratio = --------------------------------------------

Average Account Receivables

Account Receivables = Debtors + Bills Receivable

Opening Balance + Closing Balance

Average Account Receivable = ---------------------------------------------------

2

5) DEBT COLLECTION PERIOD

The ratio indicates the extent to which the debts have been collected in time. It gives the

Average debt collection period. The ratio is very helpful to the lenders because it explains to them

Whether their borrowers are collection money within a reasonable time. An increase in the period

Will result in greater blockage of funds in debtors.

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Formula

Months or Days in a year

Debt collection period = --------------------------------------

Debtors Turnover

6) CREDITOR TURNOVER RATIO

This is also known as Account payable or Creditors Velocity. A business firm usually

Purchase on credit goods, raw materials and services from other firms. The amount of total

Payables of a business concern depends upon the purchases policy of the concern, the quantity of

Purchases and suppliers credit policy. Longer the period of outstanding payable is, lesser is the

Problem of working capital of the firm. But when the firm does not pay of its creditors within

Time, it may have adverse effect on the business.

Credit turnover indicates the speed with which the payments for credit purchases are made

to the creditors. It signifies the credit period enjoyed by the firm paying creditors.

Formula:

Total Purchases

Creditor Turnover Ratio = -----------------------------------

Average Account Payable

Account Payable = Creditors + Bills Payable

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Opening Balance + Closing Balance

Average Account Payable = ------------------------------------------

2

7) FIXED ASSETS TURNOVER RATIO

The ratio gives the average credit period enjoyed from the creditors.

Formula

Months or Days in a year

Debt payment period = ---------------------------------------

Creditor Turnover


This ratio indicates the extent to which the investments in fixed assets contribute towards

Sales. If compared with a previous period, it indicates whether the investment in fixed assets has

been judicious or not.

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Formula

Net Sales

Fixed assets turnover ratio = --------------------------------

Net Fixed Assets

Net Sales = Sales- Sales Return Excise Duty

Net Fixed Assets = Fixed Assets Depreciation

9) WORKING CAOPITAL TURNOVER RATIO

This is also known as Working Capital Leverage Ratio. This ratio indicates whether or Not

working capital has been effectively utilized in making sales. In case a company can achieve

Higher volume of sales with relatively small amount of working capital, it is an indication of the

Operation efficiency of the company.

Formula

Net Sales

Working capital turnover ratio = ------------------------

Working Capital

10) PROPRIETARY RATIO

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Proprietary Ratio relates the shareholders funds to total assets. It is a variant of the debt

Equity ratio. This ratio shows the long term or future solvency of the business.

Formula

Shareholders Fund

Proprietary ratio = ------------------------------

Total tangible Assets

11) DEBT EQUITY RATIO

The debt-equity ratio is determined to ascertain the soundness of the long-term financial

Policies of the company. It is also known as External-Internal equity ratio.

The term external equities refer to total outside liabilities and the term internal equities refer

to shareholders funds or the tangible net worth. In case the ratio is (outsiders funds are Equal to

shareholders funds) it is considered to be quite satisfactory

Formula

Total long-term debt

Debt-Equity Ratio = ------------------------------

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Shareholders funds

12) SOLVENCY RATIO

It is also know as Debt ratio. It is difference of 100 and proprietary ratio. This ratio is

found out between total assets and external liabilities of the company. External liabilities mean all

long period and short period liabilities. Solvency generally refers to the capacity or ability of the

business to meet its short-term and long-term obligations. If a company is in a position to pay its

long-term liabilities easily, it is said to possess long-term solvency. If a companys financial

position is strong to pay current Liabilities, it is regarded as short-term solvency. There are

circumstances arising to find out Solvency of the company for very short period for immediate

solvency.

Examples

Liquidity Ratio

Absolute Liquid Ratio

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13) OPERATING RATIO

This ratio established the relationship between total operation expenses and sales. Total

Operation expenses include cost of goods, administrative expenses, financial expenses and selling

Expenses. Cost of goods sold is also known as direct operation expenses and the rest are known As

other operating expenses. Operation ratios are generally expressed in percentages.

Formula

Cost of goods sold + Operating Expenses

Operating Ratio = --------------------------------------------------------

Net Sales

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CHAPTER-VI

ANALYSIS AND

INTERPRETATION

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COMPARATIVE

STATEMENT

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Table No:5.1

ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT

FOR THE YEAR ENDED

31ST MARCH 2005 & 2006

particulars 2005 2006

Absolute

increase or

decrease

2006

%

increase

or

decrease

2006

Sales 36,37,26,667 46,30,90,690 99,36,40,23 27.31

Less: selling &

administrative express32,48,62,648 37,43,47,830 4,94,85,182 15.23

operating income 8,19,04,800 12,39,10,600 4,20,05,800 51.29

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Add: other income 44,92,565 39,37,268 -5,55,297 - 12.36

Total income 40,68,06,105 49,84,96,558 91,69,04,533 22.54

Less: interests 1,61,15,267 1,22,58,400 -3,85,68,67 - 23.93

Profit before tax 2,67,73,785 7,35,04,710 4,67,30,925 174.54

Provision for tax ------- 41,94,777 -41,94,777 -------

Net profit for the year 1,47,03,555 5,80,90,883 4,33,87,278 295.08

Interpretation

The sale of the company during 2005 was 36,37,26,667. In 2006 the sale was 6,30,90,690.

It shows that the company net sale 99,36,40,23 was increased during he period.

The operating income of the company during 2005 was increase. In 2005 it was

8,19,04,800 but in 2006 it was 12,39,10,600.The increased amount is 4,20,05,800.

The Other income is increase during the year 2005. In 2005 it was 44, 92,565, but in 2006

it was 39,37,268. The decrease amount is -5, 55,297, and the increase percentage is -12.23.

The income statement finally shows that, the company profit was increased by 295.08%.

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Table no:5.2

ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME

STATEMENTFOR THE YEAR ENDED

31ST MARCH 2005 & 2006

Sch Particulars 2005 2006

Absolute

increase or

decrease

2006

%

increase

decrease

2006

A Source Of funds

Shareholders funds

Share capital 45,45,12,880 45,45,12,88

0

0 0

B Reserves and surplus 13,28,556 13,28,556 0 0

Loan Funds

C Secured 6,95,62,711 12,36,97,65

3

5,41,34,942 -77.82

Unsecured 7,15,00,000 7,25,00,000 10,00,000 13.99

Total 59,69,04,147 65,20,39,08

9

5,51,34,942 9.24

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D Application of funds

Fixed Assets

Gross block 68,11,09,760 71,52,23,46

4

3,41,13,704 5.01

Less: depreciation 27,48,62,752 31,28,79,91

4

3,80,17,162 13.83

40,62,47,008 40,23,43,55

0

-39,03,458 -0.96

E Capital work-in-progress 7,30,37,701 18,86,67,80

5

1,15,630 158.32

Deferred tax assets 1,12,62,492 10,86,124 -1,01,76,368 -90.36

F Current assets, loans &

advances

Accrued income 59,046 2,13,853 1,54,807 262.18

Inventories 11,25,74,217 12,63,30,81

7

1,37,56,600 12.22

Sundry debtors 1,81,40,354 2,20,36,659 38,96,305 21.48

Cash and bank balance 1,77,72,110 1,46,20,968 -31,51,142 -17.73

Loans and advances 77,88,893 97,27,489 19,38,596 24.89

15,63,34,620 17,29,29,78

6

1,65,95,166 10.62

G Less: current liabilities

and provisions

12,34,96,971 12,86,46,51

7

51,49,546 4.17

Net Current Assets (F-G) 3,28,37,649 4,42,83,269 1,14,45,620 34.86

Profit and loss account 7,35,19,297 1,56,58,341 5,78,60,956 78.70

Total 59,69,04,147 65,20,39,08

9

5,51,34,942 92.37

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Interpretation

The current assets were increase during the year 2005. In 2005 the cost was 15,63,34,623,

but in 2006 the cost was 17,29,29,786. The decreased amount is 1,65,95,166 and the

increase percentage is 10.62.

The current liabilities sufficiently increased during the year 2005. In 2005 the cost was

12,34,96,971, but in 2006 the cost 12,86,46,517. The increased amount is 51,49,546, and

the increased percentage is 4.76.

All fixed assets have decrease during 2005. In 2005 the cost was 40,62,47,008, but in 2006

the cost was 40,23,43,550. The decrease amount is -39,03,458.

The reserve was same at 13,28,556 by 2006 compare with previous year.

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Table no:5.3


FOR THE YEAR ENDED

31

ST

MARCH 2006 & 2007

particulars 2006 2007

Absolute

increase or

decrease

2006

%

increase

or

decrease

2006Sales 46,30,90,690 53,92,93,728 7,62,03,038 16.45

Less: selling &

administrative express37,43,47,830 4300,47,853 5,57,00,023 14.88

operating income 1,23,91,000 1,20,87,000 -30,40,000 -102.51

Add: other income 39,37,268 1,19,46,451 80,09,455 2.14

Total income 49,84,96,558 55,12,40,451 5,27,43,893 10.58

Less: interests 1,22,58,400 1,45,77,140 23,18,746 18.92

Profit before tax 7,35,04,710 6,36,66,606 -98,38,104 -13.38

Provision for tax 41,94,777 71,63,854 29,69,077 70.78

Net profit for the year 5,80,90,883 3,91,18,336 -1,89,72,547 -32.66

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Interpretation

The sale of the company during 2006 was 46,30,90,690 . In 2007 the sale was

53,92,93,728. It shows that the company net sale 7,62,03,038 was increased during the

period.

The operating income of the company during 2006 was increased. In 2003 it was

28972387 but in 2004 it was 37137615. The increased amount is 8165228, and the

percentage of increase was 28.18.

The Other income is increase during the year 2004. In 2003 it was 2538085, but in 2004 it

was 3691123. The increase amount is 1153038, and the increase percentage was 45.43.

The income statement finally shows that, the company profit was increase by 24.79%.

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Table no:5.4


FOR THE YEAR ENDED

31ST MARCH 2006 & 2007

Sc

h

Particulars 2006 2007

Absolute

increase or

decrease

2007

%

increase

decrease

2007

A Source Of funds

Shareholders funds

Share capital 45,45,12,880 45,45,12,880 0 0

Reserves and surplus 13,28,556 2,98,91,848 28563292 2149.95

B Loan Funds

Secured 12,36,97,653 21,44,02,377 9,07,04,724 73.33

Unsecured 7,25,00,000 7,62,80,250 37,80,250 5.21

Total 65,20,39,089 79,74,42,083 145402994 22.29

C Application of funds

Fixed AssetsGross block 71,52,23,464 94,55,34,607 230311143 32.20

Less: depreciation 31,28,79,914 35,57,46,560 42866646 13.71

40,23,43,550 58,97,88,047 187444497 46.59

D Capital Work-in-progress 18,86,67,805 8,70,35,784 -101632021 -53.87

Deferred tax assets 10,86,124 13,91,96,849 138110725 12715.93

E Current assets, loans &

advances

Accrued income 2,13,853 -- -- --

Inventories 12,63,30,817 13,91,96,849 12866032 78.78

Sundry debtors 2,20,36,659 4,02,25,572 18188913 82.54

Cash and bank balance 1,46,20,968 1,85,53,538 3932578 26.89

Loans and advances 97,27,489 2,61,88,027 16460538 169.22

17,29,29,786 22,41,63,986 51234200 29.63

F Less: current liabilities

and provisions

12,86,46,517 10,35,45,734 -25100783 -19.51

Net Current Assets(F-G) 4,42,83,269 12,06,18,252 76334983 172.83

Profit and loss account 1,56,58,341 -- -- --

Total 65,20,39,089 79,74,42,083 - -22.30

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14,54,02,994

Interpretation

The Borrowing was increased during the year 2004. In 2003 it was 119776792 and in 2004

it was 206492425. The increased amount was 86715633.

The current assets were increased during the year 2004. In 2003 the cost was 168560352,

but in 2004 the cost was 173792236. The increased amount is 5231884 and the increased

percentage is 3.10.

The current liabilities increased during the year 2004. In 2003 the cost was 77959588, but

in 2004 the cost was 100915372. The increased amount is 22955784, and the increased

percentage is 29.45.

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Fixed assets have increased during 2004. In 2003 the cost was 171339877, but in 2004 the

cost was 287779800. The increased amount is 116439923, and the percentage of increase

is 67.96.

The reserve was increased during the year 2004. The increased amount is 12000390.

STATEMENT

COMMON-SIZE

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Table no:5.5


FOR THE YEAR ENDED

31ST MARCH 2005 & 2006

particulars 2005 % 2006 %

Sales 36,37,26,667 100.01 46,30,90,690 100.00

Less: selling &

administrative express32,48,62,648 89.32 37,43,47,830

80.84

operating income 81,90,48,600 225.18 1,23,91,000 2.68

Add: other income 44,92,565 1.24 39,37,268 0.85

Total income 40,68,06,105 111.84 49,84,96,558 107.65

Less: interests 1,61,15,267 4.43 1,22,58,400 2.65

Profit before tax 2,67,73,785 7.36 7,35,04,710 15.87

Provision for tax ------- -------- 41,94,777 0.91

Net profit for the year 1,47,03,555 4.04 5,80,90,883 12.54

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Table no:5.6


FOR THE YEAR ENDED

31ST MARCH 2006 & 2007

Interpretation

Net Profits were fluctuating during the study period. In 2002 the sales was 5.90%, in 2003

it was 5.59%, in 2004 it was 5.30%, in 2005 it was 3.99%, and in2006 was 5.06.

Companys Gross profit was decreased in during the study period. During 2002 it was

19.51, in 2006 it was 18.19%.

particulars 2006 % 2007 %Sales 46,30,90,690 100.00 53,92,93,728 100.00

Less: selling &

administrative

express

37,43,47,830

80.84

4300,47,853

79.74

operating income 1,23,91,000 2.68 1,20,87,000 2.24

Add: other income 39,37,268 0.85 1,19,46,451 2.22

Total income 49,84,96,558 107.65 55,12,40,451 102.22

Less: interests 1,22,58,400 2.65 1,45,77,140 2.70

Profit before tax 7,35,04,710 15.87 6,36,66,606 11.81

Provision for tax 41,94,777 0.91 71,63,854 1.33

Net profit for the

year

5,80,90,883 12.54 3,91,18,336 7.25

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During 2002 to 2006 the cost of sales were gradually declined. This decline may due to

fall in raw materials prices and efficiency of the purchasing departments.

During 2002 to 2006 other income was increased. During 2002 other income was 0.64, in

2006 it was 0.85%.

During 2002 to 2006 total income was decreased. during 2002 total income was 10.96%, in

200 it was 10.70%.

during 2002 to 2006 the interests were increased. During 2002 it was 2.49%, in 2006 it

was 3.89%.

Table no:5.6

ULTRAMARINE & PIGMENTS LIMITED COMMON-SIZE BALANCESHEET

AS ON 31ST MARCH 2005 & 2006

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Sch Particulars 2005 % 2006 %

A Source Of funds

Shareholders funds

Share capital 45,45,12,880 124.96 45,45,12,88

0

98.15

B Reserves and surplus 13,28,556 0.37 13,28,556 0.39

Loan Funds

C Secured 6,95,62,711 19.13 12,36,97,65

3

26.71

Unsecured 7,15,00,000 19.68 7,25,00,000 15.76

Total 59,69,04,147 164.11 65,20,39,08

9

140.81

Application of funds

D Fixed Assets

Gross block 68,11,09,760 187.26 71,52,23,46

4

154.44

Less: depreciation 27,48,62,752 75.57 31,28,79,91

4

67.66

40,62,47,008 111.71 40,23,43,55

0

86.98

E Capital work-in-progress 7,30,37,701 20.11 18,86,67,80

5

40.74

Deferred tax assets 1,12,62,492 3.11 10,86,124 0.37


advances

Accrued income 59,046 0.02 2,13,853 0.12

Inventories 11,25,74,217 31.10 12,63,30,81

7

27.28

Sundry debtors 1,81,40,354 5.01 2,20,36,659 4.76

Cash and bank balance 1,77,72,110 4.99 1,46,20,968 3.16Loans and advances 77,88,893 2.14 97,27,489 2.10

15,63,34,620 42.99 17,29,29,78 37.34

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6


and provisions

12,34,96,971 33.96 12,86,46,51

7

27.87

Net Current Assets (F-G) 3,28,37,649 9.03 4,42,83,269 9.66

Profit and loss account 7,35,19,297 20.21 1,56,58,341 3.28Total 59,69,04,147 164.11 65,20,39,08

9

140.80

Table no :5.7

ULTRAMARINE & PIGMENTS LIMITED COMMON-SIZE BALANCESHEET

AS ON 31ST MARCH 2006 & 2007

Sch Particulars 2006 % 2007 %

A Source Of funds

Shareholders funds

Share capital 45,45,12,880 98.15 45,45,12,88

0

84.28

B Reserves and surplus 13,28,556 0.39 2,98,91,848 5.54

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Loan Funds

C Secured 12,36,97,653 26.71 21,44,02,37

7

39.86

Unsecured 7,25,00,000 15.76 7,62,80,250 14.14

Total 65,20,39,089 140.81 79,74,42,08

3

147.87


D Fixed Assets

Gross block 71,52,23,464 154.44 94,55,34,60

7

175.33

Less: depreciation 31,28,79,914 67.66 35,57,46,56

0

65.97

40,23,43,550 86.98 58,97,88,04

7

109.36

E Capital work-in-progress 18,86,67,805 40.74 8,70,35,784 16.14

Deferred tax assets 10,86,124 0.37 -------- ------


advances

Inventories 12,63,30,817 27.28 13,91,96,84

9

25.81

Sundry debtors 2,20,36,659 4.76 4,02,25,572 7.56

Cash and bank balance 1,46,20,968 3.16 1,85,53,538 3.44

Loans and advances 99,41,.342 2.10 2,61,88,027 4.96

17,29,29,786 37.34 22,41,63,98

6

41.97


and provisions 12,86,46,517 27.87 10,35,45,73

4

.

19.20

Net Current Assets (F-G) 4,42,83,269 9.66 12,06,18,25

2

22.37

Profit and loss account 1,56,58,341 3.28 -- ------

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Total 65,20,39,089 140.80 79,74,42,08

3

147.87

Interpretation

Current assets and total current liabilities have considerably increased during he period. At

the end of 2006, the firms current assets are sufficiently more than its current liabilities.

As such, the firms solvency position appears to be satisfactory.

during 2002 to 2006 the current assets were 59.74%, 49.59%, 37.652%, 33.99% and

32.766%. During 2002 to 2006 the current liabilities were 20.45%, 22.93%, 21.86%,

18.82% and 18.64%. This information show that the company is in solvency position.

Reserve funds were fluctuating during the study period. In 2002 it was37.01%, in 2003 it

was 35.07%, in 2004 it was 28.43%, in 2005 it was 21.96%, and in 2006 was 19.80%.

This show that the companys profits retain percentage is decreasing year by year.

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Borrowings were fluctuating during the study period. In 2002 it was34.84%, in 2003 it was

35.23%, in 2004 it was 44.73%, in 2005 it was 50.03%, and in 2006 48.32%. It shows the

companys burden is increasing.

Fixed assets were considerably increasing during the study period. In 2002 it was 69.2%,

in 2003 it was 79.52%, in 2004 it was 87.21%, in 2005 it was 82.03%, and in 2006 77.84%,

hence it seems that the company is investing its borrowing money in buying fixed assets.

CHAPTER VI

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TREND

ANALYSIS

Chapter :vi

6.1 SALES TREND ANALYSIS

TABLE 6 .1

Year Sales Trend percentage

2005 36,37,26,667 100

2006 46,30,90,690 127.31

2007 53,92,93,728 148.27

55

0

20

40

60

80

100

120

140

160

36,3

7,

26,6

67

46,

30,9

0,6

90

53,9

2,

93,7

28

2005 2006 2007

Trend percentage

Trend percentage


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6.2 PROFIT AND LOSS ANALYSIS

TABLE6.2

Year Net profit Trend percentage

2005 1,47,03,555 100

2006 5,80,90,883 395.08

2007 3,91,18,336 266.05

PROFIT TREND

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Table no 6.3

TREND ANALYSIS AS ON 31ST MARCH 2005-2007

31st march Trend % base year 2002

Sch Particulars 2005 2006 2007 % % %

A Source Of funds

Shareholders

fundsShare capital 45,45,12,880 45,45,12,880 45,45,12,880 100.00 100.00 100.00

B Reserves and

surplus

13,28,556 13,28,556 2,98,91,848 100.00 100.00 2250.0

1

Loan Funds

C Secured 6,95,62,711 12,36,97,653 21,44,02,377 100.00 177.82 308.22Unsecured 7,15,00,000 7,25,00,000 7,62,80,250 100.00 101.21 106.71Total 59,69,04,147 65,20,39,089 79,74,42,083 100.00 109.24 133.61

Application of

funds

57

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1,47,03,555 5,80,90,883 3,91,18,336

2005 2006 2007

Trend percentageTrend percentage


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D Fixed Assets

Gross block 68,11,09,760 71,52,23,464 94,55,34,607 100.00 105.01 138.82Less: depreciation 27,48,62,752 31,28,79,914 35,57,46,560 100.00 113.83 129.43

40,62,47,008 40,23,43,550 58,97,88,047 100.00 99.04 145.18

E Capital work-in-

progress 7,30,37,701 18,86,67,805 8,70,35,784 100.00 258.32

119.17

Deferred tax assets 1,12,62,492 10,86,124 -------- 100.00 9.65 1236.9

3

F Current assets,

loans & advances

Accrued income 59,046 2,13,853 -------- 100.00 362.18 -----Inventories 11,25,74,217 12,63,30,817 13,91,96,849 100.00 112.22 123.65Sundry debtors 1,81,40,354 2,20,36,659 4,02,25,572 100.00 121.48 221.75Cash and bank

balance

1,77,72,110 1,46,20,968 1,85,53,538 100.00 82.27 104.21

Loans and

advances

77,88,893 97,27,489 2,61,88,027 100.00 124.48 336.22

15,63,34,620 17,29,29,786 22,41,63,986 100.00 110.62 143.49

G Less: current

liabilities and

provisions

12,34,96,971 12,86,46,517 10,35,45,734

100.00 104.17 83.85

Net Current Assets

(F-G)

3,28,37,649 4,42,83,269 12,06,18,252 100.00 134.91 367.32

Profit and loss

account

7,35,19,297 1,56,58,341 ------- 100.00 21.31 ----

Total 59,69,04,147 65,20,39,089 79,74,42,083 100.00 109.24 133.61

Interpretation

From the trend analysis as on 31st March 2005 to 2007, it is observed that the reserve funds

trend percentage in base year 2005 is 100%, in 2006 was 100.00, in 2007 was 2250.90. It shows

that the reserve fund is sufficiently increased compare with every previous year.

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From the trend analysts it is observed that the application of funds in fixed assets and

current assets drastically changes during the study period. Fixed assets the cost for the base year is

100% in 2005 but in 2006 percentage was 100.00, in 2007 percentage was 145.18 these trends

show that the fixed assets costs were increased year by year as well as the accumulated

depreciation increase year by year in base year 2005 it is 100%, in 2006 is 113.83, in 2007 is

129.43.

During 2005 to 2007 the current liabilities were, the percentage in the base year 2005 was

100%, in 2006 were 104.17, and in 2007 were 83.85.

The applications of funds such as inventories, cash and bank balance and loans & advances

have a different trend analysis. It finally the entire trend shows that there is upward result in during

the study period.

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CHAPTER VII

RATIO

ANALYSIS

Chapter : VII

7.1 RATIO ANALYSIS

1) 7.1CURRENT RATIO

(i) Significance

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Current ratio provides a margin of safety to the creditors. In a sound business, a current Ratio

of 2:1 is considered an ideal one. The ratio of 2 is considered as a safe margin of solvency due to the

fact that it the current assets are reduced to half, I instead of 2, then also the creditors will be able to

get their payment in full.

(ii) Table- 7.2

YEAR CURRENT

ASSETS

CURRENT LIABILITES RATIO

2005 3,28,37,649 12,34,96,971 0.26

2006 4,45,82,565 12,79,05,710 0.34

2007 12,05,65,607 10,32,26,334 1.16

(iii) Interpretation

From the above table it is clearly observed that, the current ratios for the 2005 and

2006were matched with the ideal ratio. During 2006 to 2007 the ratios show that the company was

sufficiently able to repay its debts.

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Chart 7.3

CURRENT RATIO

2) QUICK RATIO

(i) Significance

62

RATIO

0

0.2

0.4

0.6

0.8

1

1.2

1.4

12,34,96,971 12,79,05,710 10,32,26,334

3,28,37,649 4,45,82,565 12,05,65,607

2005 2006 2007

RATIO


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An acid test ratio of 1:1 is considered satisfactory as a firm can easily meet all current

Claims. If the ratio is less than 1:1, that is, liquid assets are less than current liabilities, the

Financial position of the concern shall be deemed to be unsound.

(ii) Table 7.4

YEAR LIQUID ASSETS CURRENT

LIABILITES

RATIO

2005 15,63,34,620 12,34,96,971 1.26

2006 17,24,88,275 12,79,05,710 1.34

2007 22,37,91,941 10,32,26,334 2.76


From the above table it is clearly observed that, the current ratio during the three year

Matched with the in 2005 and 2006. During 2005 to 2007 the ratios Show that every one rupee of

companys current liabilities it has 1.26, 1.34, & 2.76 of Liquid assets. Hence, its liquidity position

is satisfactory.

Chart 7.5

63

0

0.51

1.52

2.53

12,

34,

96,

971

12,

79,

05,

710

10,

32,

26,

334

15,63,34,62017,24,88,27522,37,91,941

2005 2006 2007

RATIO

RATIO


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3.STOCK TURN OVER RATIO

(i) Significance

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A high inventory turnover ratio indicates brisk sales. A high ratio implies good inventory

management and an indication of under-investment. It will adversely affect the ability of a firm to

meet customers demand. At the same time, a higher ratio reflects efficient business activities

A low inventory turnover ratio is dangerous. It is an indication of excessive inventory and over

investment in inventory. A low ratio may be result of inferior quality goods, stock of Unsaleable

and absolute goods. A lower ratio reflects dull business and suggests that some steps should be

taken to push up sales.

(ii) Table 7.6

YEAR SALES AVERAGE INVENTORY RATIO

2005 36,37,26,667 11,25,74,210 3.23

2006 46,30,90,690 12,63,30,817 3.66

2007 53,92,93,728 13,91,96,849 3.87


From the above table it is clearly observed that, the inventory turnover ratio shows that 3.23

times in 2005, 3.66 in 2006, 3.87 in 2007, It shows that the stock turnover of the company is

satisfactory.

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Chart7.7

4) DEBTORS TURNOVER RATIO

(i) Significance

66

11,25,74,210

36,37,26,667

2005

12,63,30,817

46,30,90,690

2006

13,91,96,849

53,92,93,728

2007

RATIO

RATIO


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It indicates the efficiency of the staff entrusted with collection of book debts. The higher

the ratio, the better it is, since it would indicate that debts are being collected more promptly. For

measuring the efficiency, it is necessary to set up a standard figure; a ratio lower than the standard

will indicate inefficiency.

(ii) Table 7.8

YEAR SALES AVERAGE DEBTRES RATIO

2005 36,37,26,667 1,81,40,354 20.05

2006 46,30,90,690 2,20,36,659 21.01

2007 53,92,93,728 4,02,25,572 13.41


From the above table it is clearly observed that, the company was able to turnover its

Debtors 20.05 times in 2005, 21.01 times in 2006, 13.41 times in 2007. It shows that the

companys debtors turnover was decreasing which is not satisfactory.

Chart 7.9

67

0

5

10

15

20

25

RATIO

RATIO 20.05 21.01 13.41

1,81,40,354 2,20,36,659 4,02,25,572

36,37,26,66746,30,90,69053,92,93,728

2005 2006 2007


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5) DEBT COLLECTION PERIOD

(i) Significance

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Debtors collection period measures the quality of debtors since it measures the rapidity or

slowness with which money is collected from them a shorter collection period implies prompt

payment by debtors. It reduces the chances of bed debts. A longer collection period implies too

liberal and inefficient credit collection performance. The amount of receivables should not exceed

90-120 days credit sales.

(ii) Table 7.10

YEAR DAYS IN A YEAR DEBTER RATIO DAYS

2005 360 20.05 18.00

2006 360 21.01 17.13

2007 360 13.41 26.85


From the above table it is clearly observed that, the company was able to collect money

Form its debtors, 79 days in 2005, 130 days in 2006 and 150 Days in 2007. It has been showing

increasing situation from 2005 to 2007 as it may due to Change in economic conditions and/or

laxity in managing receivables

Chart 7.11

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0

10

20

30

DAYS

DAYS

DAYS 18 17.13 26.85

20.05 21.01 13.41

360 360 360

2005 2006 2007

6) PROPRIETARY RATIO

(i) Significance

The acceptable norm of the ratio is 1:3. The ratio shows the general strength of the

company. If is very important to creditors as it helps them to find out the proportion of

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shareholders funds in the total assets used in the business. Higher ratio indicates a secured position

to creditors and a low ratio indicates greater risk to creditors. A ratio below 50% may be alarming

for the creditors since they may have to lose heavily in the event of companys liquidation on

account of heavy losses.

(ii) Table 7.12

YEAR SHAREHOLDERS

FUND

TOTAL TANGIBLE

ASSETS

RATIO

2005 45,45,12,880 14,84,86,681 3.06

2006 45,45,12,880 16,25,79,477 2.80

2007 45,45,12,880 19,77,39,690 2.30


From the above table it is clearly observed that, the proprietary ratio during the three-year is

not matching the ideal proprietary ratio. During 2005 to 2007 the ratios were 3.06, 2.80, and 2.30.

This shows that there is no secured position to creditors.

Chart 7.13

71

0

0.5

1

1.5

2

2.5

3

3.5

0 0 0 0

0 0 0 0

0 3.06 2.8 2.3

YEAR 2005 2006 2007


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7) DEBT-EQUITY RATIO

(i) Significance

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As acceptable norms for this ratio is considered to be 2:1 a higher debt-equity ratio allowed

in the case of capital-investment industries. A norm of 4:1 is used for fertilizer and cement units

and a norm of 6:1 is used for shipping units.

(ii) Table 7.14

YEAR

TOTAL LONGTURN

DEBT

SHREHOLDERS

FUND

RATIO

2005 1,81,40,354 45,45,12,880 0.04

2006 2,20,36,659 45,45,12,880 0.05

2007 4,02,25,572 45,45,12,880 0.09


From the observation it is clear that the total debt ratio that the companys lenders have

Contributed more than owners; lenders contribution was 0.04 times of owners contribution in

the year of 2005, 0.05 times in 2006, and 0.09 times in 2007.

Chart 7.15

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0

0.02

0.04

0.06

0.08

0.1

Series1 0.04 0.05 0.09

45,45,12,880 45,45,12,880 45,45,12,880

1,81,40,354 2,20,36,659 4,02,25,572

2005 2006 2007

8) OPERATING RATIO

(i) Table 7.16

YEAR OPERATING

EXPENSES

SALES RATIO

2005 32,48,62,648 36,37,26,667 0.87

2006 46,30,90,690 46,30,90,690 0.80

2007 53,92,93,728 53,92,93,728 0.79

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(ii) Interpretation

From the above table it is clearly observed that, the operating ratio has been fluctuating

form 2005 to 2007. This has resulted in fluctuation of the profit.

Chart 7.17

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0.74

0.76

0.78

0.8

0.82

0.84

0.86

0.88

Series1 0.87 0.8 0.79

36,37,26,6 46,30,90,6 53,92,93,7

32,48,62,64846,30,90,69053,92,93,728

2005 2006 2007

9) TOTAL ASSETS TURNOVER RATIO

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(i) Significance

This ratio shows the firms ability in generating sales from all financial resources

committed to total assets.

(ii) Table 4.44

YEAR SALES TOTAL ASSETS RATIO

2005 36,37,26,667 15,63,34,620 2.33

2006 46,30,90,690 17,24,88,275 2.68

2007 53,92,93,728 22,37,91,941 24.09


The total assets turnover of 2.33 times in 2005, 2.68 times in 2006, 24.09 times in 2004,

which implies that the company generates a sale of Rs.2.33 in 2005, 2.68 in 2006, 24.09in 2007,

against one rupee investment infixed and current assets together.

(iv) Chart 4.11

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0

5

10

15

20

25

Series1 2.33 2.68 24.09

15,63,34,6 17,24,88,2 22,37,91,9

36,37,26,6646,30, 90,6953,92, 93,72

2005 2006 2007


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(i) Table 7.18

YEAR SALES NET FIXEDASSETS RATIO

2005 36,37,26,667 40,62,47,008 0.89

2006 46,30,90,690 40,22,69,816 1.15

2007 53,92,93,728 58,97,44,071 0.91

(ii) Interpretation

From the above table it is clearly observed that the companys fixed assets turnover ratios

were decreasing during 2005 to 2007 which show that the company did not use its fixed assets

promptly.

(iii) Chart 7.19

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0

0.2

0.4

0.6

0.8

1

1.2

Series1 0.89 1.15 0.91

40,62,47,00 40,22,69,81 58,97,44,0

36,37,26,66746,30,90,69053,92,93,728

2005 2006 2007

11) CURRENT ASSETS TURNOVER RATIO

(i) Table 7.20

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YEAR SALES CURRENT ASSETS RATIO

2005 36,37,26,667 3,28,37,649 11.08

2006 46,30,90,690 4,45,82,565 10.39

2007 53,92,93,728 12,05,65,607 4.47

(ii) Interpretation

From the above table it is clearly observed that, during 2005 to 2007 current assets were

sufficiently used.

(iii) Chart 7.21

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0

2

4

6

8

10

12

Series1 11.08 10.39 4.47

3,28,37,649 4,45,82,565 12,05,65,6036,37,26,66746,30,90,69053,92,93,728

2005 2006 2007

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CHAPTER-V

FINDINGS

FINDINGS

The company net sales were increased during the three years.

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The cost of sales was increased due to production increased.

The operating expenses were increased during the three years.

The operating income was increased during the study period.

The depreciation was increased due to fixed assets were increased and used.

Company profits were increased year by year due to increase of sales and efficient

management.

Company raised borrowings year by year.

Fixed assets were increased during the study period.

Net working capital was increased during the last two years.

Current & liquidity ratios during the five years matching ideal ratio so companys solvency

and liquidly positions were good.

Inventory turnover ratio shows normal fluctuations during 2002 to 2006 due to product is

moving in market.

Debtors enjoying credit facility more than 150 days.

Proprietary ratios during the three years were not satisfactory.

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Debt equity ratio shows that the lenders have contributed more than owners.

During 2005 to 2007 fixed assets were not properly used.

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SUGGESTION

SUGGESTION

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During the five years study low inventory turnover ratio is found due to production was not

matching with the demand. So create the demand for the product. Debt should be collected in right

time and rectify debt collection department.

Apply budget and budgetary control system for each and every item of operating expenses

Push sales and reduce expenses in order to retain its current positions. Product is not familiar to

market so make advertisement in appropriate media. Motivate sales representatives through various

promotional activities.

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CONCLUSION

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CONCLUSION

During the project study period it was observed that the companys financial position as steadily

increasing, sales were increasing, and assets were effectively utilized.

The companys borrowings were increasing compare with every previous year hence which should

be considered so as to avoid high burden.

The project period gave an opportunity to interact with the experienced people and gains

acquire knowledge about various financial activities.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

S.NO AUTHOR NAME BOOK NAME

1

Dr.S.N. MAHESHWARI

Management Accounting . Edition

Published by Sultan Chand & Sons.

2

I.M.PANDEY

Financial Management , Vikas

Publishing House Private Limited.

3

R.S.N. PILLAI BAGAVATHI

Management Accounting . Edition

Published by Sultan Chand Company

Limited.

4 R.PRASANNA CHANDRA Financial Management, Himalaya

Publication Limited, Delhi.

Reference sites

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http://www.moneycontrol.com/financials/ultramarinepigments/balance-sheet/UP02

http://www.ultramarinepigments.net/

http://money.rediff.com/money/jsp/company.jsp?companyCode=16090012

http://economictimes.indiatimes.com/ultramarine-&-pigments-ltd/stocks/companyid-12880.cms

http://www.thirumalaichemicals.com/upl.html

92
http://www.moneycontrol.com/financials/ultramarinepigments/balance-sheet/UP02http://www.ultramarinepigments.net/http://money.rediff.com/money/jsp/company.jsp?companyCode=16090012http://economictimes.indiatimes.com/ultramarine-&-pigments-ltd/stocks/companyid-12880.cmshttp://www.thirumalaichemicals.com/upl.htmlhttp://www.moneycontrol.com/financials/ultramarinepigments/balance-sheet/UP02http://www.ultramarinepigments.net/http://money.rediff.com/money/jsp/company.jsp?companyCode=16090012http://economictimes.indiatimes.com/ultramarine-&-pigments-ltd/stocks/companyid-12880.cmshttp://www.thirumalaichemicals.com/upl.html


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ANNEXURE

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PROFIT AND

LOSS A/C

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ULTRAMARINE & PIGMENTS PROFIT AND LOSS A/c

particulars 2005 2006 2007

Sales 36,37,26,667 46,30,90,690 53,92,93,728

Less: selling &

administrative express32,48,62,648 37,43,47,830 4300,47,853

operating income 8,19,04,800 12,39,10,600 1,20,87,000

Add: other income 44,92,565 39,37,268 1,19,46,451

Total income 40,68,06,105 49,84,96,558 55,12,40,451

Less: interests 1,61,15,267 1,22,58,400 1,45,77,140

Profit before tax 2,67,73,785 7,35,04,710 6,36,66,606

Provision for tax ------- 41,94,777 71,63,854

Net profit for the year 1,47,03,555 5,80,90,883 3,91,18,336

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BALANCE

SHEET

ULTRAMARINE & PIGMENTS BALANCE SHEET

S.no Particulars 2005 2006 2007

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A Source Of funds

Shareholders funds

Share capital 45,45,12,880 45,45,12,880 45,45,12,880

B Reserves and surplus 13,28,556 13,28,556 2,98,91,848

Loan FundsC Secured 6,95,62,711 12,36,97,653 21,44,02,377

Unsecured 7,15,00,000 7,25,00,000 7,62,80,250

Total 59,69,04,147 65,20,39,089 79,74,42,083


D Fixed Assets

Gross block 68,11,09,760 71,52,23,464 94,55,34,607

Less: depreciation 27,48,62,752 31,28,79,914 35,57,46,560

40,62,47,008 40,23,43,550 58,97,88,047

E Capital work-in-progress 7,30,37,701 18,86,67,805 8,70,35,784Deferred tax assets 1,12,62,492 10,86,124 --------


advances

Accrued income 59,046 2,13,853 ------

Inventories 11,25,74,217 12,63,30,817 13,91,96,849

Sundry debtors 1,81,40,354 2,20,36,659 4,02,25,572

Cash and bank balance 1,77,72,110 1,46,20,968 1,85,53,538

Loans and advances 77,88,893 97,27,489 2,61,88,027

15,63,34,620 17,29,29,786 22,41,63,986

G Less: current liabilities and

provisions

12,34,96,971 12,86,46,517

10,35,45,734

Net Current Assets (F-G) 3,28,37,649 4,42,83,269 12,06,18,252

Profit and loss account 7,35,19,297 1,56,58,341 --

Total 59,69,04,147 65,20,39,089 79,74,42,083

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