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PROJECT REPORT
STUDY ON FINANCIAL PERFORMANCE OF AISWARYA
BEVERAGES COMPANY CHUMATHRA THIRUVALLA
Submitted by
VISHNU KUMAR KA REG NO – 14P35H0212
Under the Guidance of
Mrs. RICHA PATHAK
JUNIOR ASSISTANT PROFESSOR
NEW HORIZON COLLEGE
KA11B131
MASTER OF BUSINESS ADMINISTRATION (MBA)
BHARATHIAR UNIVERSITY
BANGALORE
2014 – 2016
STUDENT DECLARATION
I hereby declare that the project entitled “STUDY ON FINANCIAL PERFORMANCE
OF AISWARYA BEVERAGES COMPANY CHUMATHRA THIRUVALLA”
undertaken in partial fulfilment of Master of Business Administration (MBA) programme
of Bharathiar University under the supervision and guidance of Mrs.RICHA
PATHAKfaculty guide of New Horizon College is an authentic work done by me and I
have not produced this work for any other purpose to any other University or Board.
Place: Bangalore VISHNU KUMAR K A
Date: Reg No: 14P35H0212
NEW HORIZON COLLEGE
BANGALORE
GUIDE CERTIFICATE
This is to certify that the project report entitled. “STUDY ON FINANCIAL
PERFORMANCE OF AISWARYA BEVERAGES COMPANY CHUMATHRA
THIRUVALLA” submitted by Vishnu Kumar K A bearing registration number
14P35H0212 to Bharathiar University for the partial fulfilment of Master of Business
Administration is an overcome of genuine research work carried under the guidance and it
has been submitted for the award any other degree, diploma or prize
Place: Bangalore Signature
Date: ( RICHA PATHAK )
NEW HORIZON COLLEGE
BANGALORE
PRINCIPAL’S CERTIFICATE
This is to certify that VISHNU KUMAR K A bearing registration number 14P35H0212 is
a bonafide student of this college the project work entitled. “STUDY ON FINANCIAL
PERFORMANCE OF AISWARYA BEVERAGES COMPANY CHUMATHRA
THIRUVALLA” is a bonafide work carried out by him in partial fulfilment of the
requirement of Master Degree in Business Administration of Bharathiar University during
the year 2014-2016
Place: Bangalore Signature
Date: ( Dr. R. BODHISATVAN
)
ACKNOWLEDGEMENT
I would like to take opportunity to express my sincere gratitude towards GOD for
successful completion of my project.
I extend my sincere gratitude to DR. R BOTHISATVAN, Principal of NEW HORIZON
COLLEGE who gave me an opportunity to conduct the research.
I would like to thank Mr. EMMANUEL MATHEW Managing Director of AISWARYA
BEVERAGES who gave the permission for doing the project.
I wish to extend my sincere gratitude to Mr. ARUN RAGHU BABU ProgrammeCo-
ordinator (MBA). I also extend my gratitude to my guide Mrs. RICHA PATHAK Asst.
professor of New Horizon College who gave a valuable guidance and generous encourage
to me.
I make use of this opportunity to thank my relatives and dear friends for their support in
completing this work.
VISHNU KUMAR K A
CONTENTS
CHAPTER TITLE PAGE
NO:
CHAPTER I INTRODUCTION
1.1 FINANCIAL MANAGEMENT
1.2 FINANCIAL PERFORMANCE
1.3 NEED FOR STUDY
1.4 STEPS TO IMPROVE FINANCIAL
PERFORMANCE
1.5 RATIO ANALYSIS
1-9
2
2
4
4
6
CHAPTER II INDUSTRY AND COMPANY PROFILE
2.1 INDUSTRY PROFILE
2.1.1 HISTORY OF BOTTLED WATER
2.2 COMPANY PROFILE
10-26
11
11
15
CHAPTER III REVIEW OF LITERATURE 27-29
CHAPTER IV RESEARCH DESIGN 4.1 RESEARCH METHODOLOGY
4.1.1 SOURCE OF DATA
4.1.2 TOOLS USED FOR THE ANALYSIS
4.2 OBJECTIVE OF THE STUDY
4.3 SCOPE OF THE STUDY
4.4 PERIOD OF STUDY
4.5 LIMITATIONS OF THE STUDY
30-34
31
32
32
33
33
33
34
CHAPTER V DATA ANALYSIS AND INTERPRETATION 35-62
CHAPTER VI FINDINGS, SUGGESTIONS AND
CONCLUSION
6.1 FINDINGS
6.2 SUGGESTIONS
6.3 CONCLUSION
63-66
64
65
66
BIBLIOGRAPHY
ANNEXURE
LIST OF TABLE
Table No Title Page No
5.1 RATIO ANALYSIS 36-48
5.1.1 DEBT EQUITY RATIO 36
5.1.2 FIXED ASSET NET WORTH RATIO 38
5.1.3 FIXED ASSET TURN OVER RATIO 40
5.1.4 NET PROFIT RATIO 42
5.1.5 PROPRIETARY RATIO 44
5.1.6 CURRENT ASSET TURNOVER RATIO 46
5.1.7 TOTAL ASSET TO DEBT RATIO 48
5.2 COMPARATIVE BALANCE SHEET ANALYSIS 51-57
5.2.1 COMPARATIVE BALANCE SHEET OF THE YEAR 2011-
2012
51
5.2.2 COMPARATIVE BALANCE SHEET OF THE YEAR 2012-
2013
53
5.2.3 COMPARATIVE BALANCE SHEET OF THE YEAR 2013-
2014
55
5.2.4 COMPARATIVE BALANCE SHEET OF THE YEAR 2014-
2015
57
5.3 COMPETITOR FINANCIAL COMPARISON 61
5.3.1 BALANCESHEET COMPARISON OF THE YEAR 2014-2015 61
LIST OF FIGURE
Figure No Title Page No
5.1 RATIO ANALYSIS 37-49
5.1.1 DEBT EQUITY RATIO 37
5.1.2 FIXED ASSET NET WORTH RATIO 39
5.1.3 FIXED ASSET TURN OVER RATIO 41
5.1.4 NET PROFIT RATIO 43
5.1.5 PROPRIETARY RATIO 45
5.1.6 CURRENT ASSET TURNOVER RATIO 47
5.1.7 TOTAL ASSET TO DEBT RATIO 49
INTRODUCTION
1.1 FINANCIAL MANAGEMENT
Finance is the life blood of business. It is rightly termed as the science of money.
Finance is very essential for the smooth running of a business. Finance controls the
policies, activities and decisions of every business.
“Finance is that the business activity which is concerned with the organisation and
conversation of capital funds in meeting financial needs and overall objectives of a
business enterprise”-Wheeler
Financial management is that managerial activity which is concerned with the
planning and controlling of a firm financial reserve. Financial management as an
academic discipline has undergone fundamental changes as regards its scope and
coverage. In the early years of its revolution it was treated synonymously with the raising
of funds. In the current literature pertaining to this growing academic discipline, a broader
scope so as to include in addition to procurement of funds, efficient use of resources is
universally recognized. Financial analysis can be defined as a study of relationship
between many factors as disclosed by the statement and the study of the trend of these
factors. The objective of financial analysis is the pinpointing of strength and weakness of
a business undertaking by regrouping and analysing of figures obtained from financial
statement and balance sheet by the tools and techniques of management accounting.
Financial analysis as the final step of accounting that result in the presentation of final
and the exact data that helps the business managers, creditors and investors.
1.2 FINANCIAL PERFORMANCE
The term „financial performance analysis is also known as analysis and
interpretation of financial statements‟, refers to the process of determining financial
strength and weakness of the firm by establishing strategic relationship between the items
of the balance sheet, profit and loss account and other operative data.
„Financial performance analysis is a process of evaluating the relationship
between component parts of a financial statement to obtain a better understanding of a
firm‟s position and performance.
The purpose of financial analysis is to diagnose the information contained in
financial statements so as to judge the profitability and financial soundness of the firm.
Just like a doctor examines his patient by recording his body temperature, blood pressure
etc. Before making his conclusion regarding the illness and before giving his treatment. A
financial statement analysis analyses the financial statements with various tools of
analysis commenting upon the financial health or weakness of an enterprise.
The analysis and interpretation of financial statement is essential to bring out the
mystery behind the figures in financial statements. Financial statement analysis is an
attempt to determine the significance and meaning of the financial statement data so that
forecast may be made of the future earning ability to pay interest and debt maturities and
profitability of a sound dividend policy.
Financial performance refers to the act of performing financial activity. I order to
sense, financial performance refers to the degree to which financial objectives being or
has been accomplished. It is the process of measuring the results of a firm‟s overall
financial health over a given period of time and can also be used to compare similar firms
across the same industry or to compare industries or sectors in aggregation.
Organisations play an important role all over the world. Different organisations
meet people needs by provide them products, service, or both. Due to globalisationthe
world has become a global village. This has very much helped people to get their needs.
Different firm play different roles and it has its own importance. The company which I
have selected for my financial analysis is AISWARYABEVERAGECO.
Business concern needs finance to meet their requirements in the economic world.
Any kind of business activity depends on the finance. Hence, it is called as lifeblood of
business organisations. Whether the business concerns are big or small, they need finance
to fulfil their business activities
In the modern world, all the activities are concerned with the economic activities
and very particular to earning profit through any venture or activities. The entire business
activities are directly related making profit. Hence finance may be called as capital,
investment, fund etc.., but each term is having different meaning and unique characters.
Increasing the profit is the main aim of any kind of economic activity.
Financial information is needed to predict, compare and evaluate the firm‟s
earning ability. Finance department is headed by the Finance manager.
As a business institution, it should earn maximum profits. To what extend
Aiswarya Beverage co. could perform in relation to profitability. A definite picture about
the profitability performance of this business concern is considered. Profitability is the
basic and inherent concern of any business. The present study was an attempt to evaluate
the profitability performance of Aiswarya Beverage Co.
1.3 NEED FOR STUDY
Need Of Financial Management Study to Diagnose the Information Contain in
Financial statement. So as to judge the profitability and financial position of the
firm.
Financial analyst analyses the financial statements with various Tools of analysis
before commanding upon the financial health of the firm
Significance and meaning of the financial statements
1.4 STEPS TO IMPROVE FINANCIAL PERFORMANCE
Author: Terry Peltes
Given the challenges facing physicians, successful practices must take proactive
steps to combat negative trends and improve their overall financial performance.
To improve practice operations, processes can be streamlined to reduce costs;
productivity improvements can be implemented by physicians and employees to increase
revenue; a reporting structure can be created that allows for better decision making by
physicians and employees; and a rewards system can be implemented to recognize hard-
working employees.
To determine how you can improve your medical practice's performance, consider
the following management procedures.
1) Internal Cost Reduction Strategies
Cost reduction strategies focus on reducing the internal costs generated by medical
services provided to the marketplace.
2) External Cost Reduction Strategies
These strategies include the cost of services purchased from outside consultants or
vendors.
3) Asset and Credit Management Strategies
These strategies ensure that you are getting the most value from the resources invested
in your practice.
4) Personnel Resources
When managed properly, personnel costs and productivity can have a substantial impact
on practice profitability.
5) Management Reporting
The use of timely, relevant, properly formatted reports to manage your practice cannot
be overstated. This is a crucial link between setting financial and operational goals and
managing the practice to achieve them.
6) Revenue Enhancement
Physicians can improve their financial performance by improving their ability to
negotiate favourable managed care contracts and reducing practice expenses as a
percentage of revenue.
1.5 RATIO ANALYSIS
Ratio analysis is important and widely used tool of analysis of financial statement.
It is essentially an attempt to develop meaningful relationship between individual items or
group of items in the Balance sheet or Profit and loss account. The object and utility of
ratio analysis as a technique of financial analysis is confined not only to the internal
parties but to the trade Creditors, Banks and Lending institution also.
TYPES OF RATIOS
Liquidity ratios
Leverage ratios
Activity ratios
Profitability ratios
LIQUIDITY RATIO
The liquidity refers to the maintenance of cash, bank balance and those assets,
which are easily convertible into cash in order to meet the liabilities as and when arising.
So, the ratios study the firm‟s short-term solvency and its ability to pay off the liabilities.
The important liquidity ratios are:
i. Current Ratio:-
Current ratio is the ratio of current asset and current liabilities. Current assets are assets
which can be converted into cash within one year and include cash in hand and at bank,
bills receivable, net sundry debtors, stock of raw materials, finished goods and work in
progress, prepaid expenses, outstanding and occurred incomes, and short term or
temporary investments. Current liabilities are liabilities, which are to be repaid within a
period of 1 year and include bills payable, sundry creditors, bank over drafts, and
outstanding expenses, income received in advance, proposed dividend, provision for
taxation, unclaimed dividends and short term loans and advances repayable within 1 year.
A current ratio 2:1 is considered as ideal: if a business has an undertaking with its bankers
to meet its working capital requirements short notices, a current ratio of 1 is adequate.
ii. Quick Ratios:-
Quick ratio or acid test ratio takes into consideration the liquidity level of the
components of current assets. It represents the ratio between quick current assets and
total current liabilities. A quick ratio of 1 is considered as ideal. A quick ratio of less
than 1 is indicated as inadequate liquidity of the business. A very high ratio is also not
available as funds can be profitability employed.
iii. Absolute Liquid Ratio:-
It is the ratio of absolute liquid ratio assets to quick liabilities. For calculation
purposes, it is taken as ratio of liquid assets of current liabilities. Trade investments or
marketable securities are equivalent of cash therefore; they may be included in the
computation of absolute liquid ratio.
LEVERAGE RATIO
Leverage ratio indicates the relative interest of owners and creditors in a business.
It shows the proportions of debt and equity in financing the firm‟s assets. The long term
solvency of a firm can be examined by using leverage ratio. The long term creditors like
debenture holders, financial institutions etc. are more concerned with firm‟s long term
financial strength.
There are two aspects of the long term solvency of a firm
Ability to repay the principal when due, and
Regular repayment of the interest the leverage ratios are calculated to measure the
financial rest and firm‟s abilitiesof using debt.
i. Total Debt Ratio
Total debt will include short and long term borrowing from financial institutions
debentures bonds. Capital employed will include total debt and net worth. The firm may
be interested in knowing the proportion of the interest bearing debt in the capital structure
by calculating total debt ratio. A highly debt burden firms difficulty in raising funds from
creditors and owners in future. Creditors treat the owner‟s equities as a margin of safety.
ii. Debt Equity Ratio
It reflects the relative claims of creditors and shareholders against the assets of the
business. Debt,usually, refers to long term liabilities. Equity includes preferences share
capital and reserves. The relationship describing the lenders contribution foreach refers
of the owner‟s contribution is called debt equity ratio. A high ratio shows a large share of
financing by the creditors relative to the ownersand therefore, large claim against the
assets of the firm. A low ratio implies a smaller claims of creditors. The equity indicates
the margin to satisfy the creditors, so there is no doubt, the both high and low equity
ratios are not desirable. What is needed is a ratio, which strikes a proper balance between
debt and equity. Some financial expert is that debt shout indicate current liabilities also.
However, this is not a popular. In case of preferences of share capital, it is treated as a
part of shareholder‟s fund, but if the preference shares are redeemable, they are taken as a
part of long term debt. Shareholders fund are also known as proprietors fund and it
indicates items equity share capital, reserve, and surplus. A debt equity ratio of 3:1 is
considered ideal.
iii. Fixed Asset Ratio
Capital employed = equity share capital + preference share capital + reserves + long term
liabilities – fictitious assets.
This ratio indicates the mode of financing the fixed assets. A financially well managed
company will have its fixed assets financed by long term funds. A ratio of 0.67 is
considered ideal.
iv. Interest Coverage Ratio
The interest coverage ratio is computed by dividing earnings before interests and taxed by
interest charges. This interest coverage ratio shows the number of times the interest
charges are covered by funds that are demurely available for their payment. A high ratio
is desirable but too high ratio indicate that the firm is very conservative in using debt and
that is not using credit to the debt advantage of shareholder. A lower ratio indicate
excessive use of debt or inefficiency operations. The firm should make efforts make
efforts to improve the operating efficiency or to retire debt to have comfortable coverage
ratio.
ACTIVITY RATIO
This ratio is called as efficiency ratio. Activity asset turnover ratio, measure the efficiency
of a firm managing and utilizing its assets. The higher the turnover ratio is, the more
efficiency, the management and utilisation of the assets while low turnover ratio is to
indicate the underutilization of available resources or present ideal capacity.
i. Fixed Assets Turnover Ratio
This ratio indicates extend to which the investments in fixed assets contributes towards
sales. If the ratio is compared with the previous year, it indicate whether the investment in
fixed asset has been judicious or not. The total asset turnover ratio is computed by
dividing sales by total assets.
ii. Working Capital Turnover Ratio
This ratio reflects the turnover of the firm‟s Net working capital in the course of 1 year. It
is a good measure of over trading and under trading.
Working capital = current asset – current liability
A high working capitalturnover ratio indicate efficiency utilisation of the firm‟s funds.
However, it should not result in over trading.
iii. Debtors Turnover Ratio
Debtor‟s turnover ratio express the relationship between debtors and sales
iv. Creditors Turnover Ratio
v. Inventory Turnover Ratio
2.1 INDUSTRY PROFILE
2.1.1 HISTORY OF BOTTLED WATER
Water is essential for sustenance and multiplication of living organisms.
Whether it is unicellular Amoeba or complex human body system water is an absolute
necessity for keeping the system functioning. Humans need clean tasty and safe drinking
water free from any microorganism when he or she is thirsty and is ready to pay
substantially if need be. This is available in Pouch, Bottles and cans as per requirement of
the customers.
Bottled water is drinking water (e.g. well water, distilled water, mineral
water, or spring water) packaged in plastic or glass water bottles, Bottled water may be
carbonated or not. Sizes range from small single serving bottles to large carboys for water
coolers. Although vessels to bottle and transport water were part of the earliest human
civilizations, bottling water began in the United Kingdom with the first water bottling at
the Holy Wellin 1662. The demand for bottled water was fuelled in large part by the
resurgence in spa-going and water therapy among Europeans and American colonists in
the 17th
and 18th
centuries. The first commercially distributed water in America was
bottled and sold by Jackson‟s spa in Boston in 1767. Early drinkers of bottled spa waters
believed that the water at these mineral spring had therapeutic properties and that bathing
in or drinking the water could help treat many common ailments.
The popularity of bottled mineral water quickly leads to a market for
imitation products. Carbonated waters developed as means for approximating the natural
effervescence of spring bottled water, and in 1809 Joseph Hawkins was issued the first
U.S patent for “imitation” mineral water. As technological innovation in 19th
century
lowered the cost of making glass and improved production speed for bottling, bottled
water was able to be produced on a larger scale and the beverage grew in popularity.
Bottled water was seen by many as a safer alternative TO 19th
century municipal water
supplies that could be contaminated with pathogens like cholera and typhoid. By the
middle of the century, one America‟s most popular bottlers, Saratoga Springs, was
producing more than 7 million bottles of water annually
In the United States, the popularity of bottled water declined in the early
20th
century, when the advent of water chlorination reduced public concerns about water
chlorination reduced public concern about water-borne diseases in municipal water
supplies. However, it remained popular in Europe, where it is spread to cafe and grocery
stores in the 2nd
half of the century. In 1977, Perrier launched a successful advertisement
campaign in the United States, heralding a rebirth in popularity for bottled water. Today,
bottled water is the second most popular commercial beverage in the United States, with
about half the domestic consumption as soft drink
RECENT TRENDS
Packaged drinking water industry has grown many folds in all the developed economics
of the world. The product is targeted especially at touring and travelling market segments.
The market also growing due to contamination/shortage of water supply in the cities. At
present the Indian market is dominated by processed water. The demand for consumption
of mineral water in India has been estimated approx. 500 million litres of pure water
bottles and the market is expected to grow at a rate of 25-35% per annum. The domestic
market of mineral water is mainly derived from the tourism sector. Further, the demand
may also be from institutional sector as well as from higher income bracket group in
urban areas
Indian Scenario
Indians currently spending about $330m a year on bottled water, analyst estimate.
The packaged water market constitutes 15 percent of the overall packaged beverage
industry, which has annual sales of at least $2.6bn, Deepak jolly spokespersons for Coca-
Cola India said.
Almost all the major international and national brands water bottles are available
in Indian market right from the malls to railway stations, bus stations, grocery stores and
even at pinwale‟s shop. Before few years bottled water, was considered as rich people‟s
choice, but now it‟s penetrated in the rural areas. . The growth and status of Indian
Bottled Industry in comparison with Western or Asian market, India is far behind in terms
of quantum, infrastructure, professionalism and standards implementation.
Water Consumption in India
India receives abundant rains. The average annual precipitation is estimated to be
4000 billion m. Only 1000 billion m/year is available as usable surface water and
ground water. At present the water consumption in India is about 750 billion m/year for
all the applications, viz agricultural, industrial, domestic and commercial. Assuming a
conservative figure of per capita water consumption of 1000 m/year, the water
availability in the country is likely to get fully stretched by the year 2010 unless
augmentation is planned right now. The consumption norm of 1000 m/year is only 10-
20% of the per capita consumption in industrialized countries. Moreover, the
geographical distribution and seasonal variation of rainfall are not uniform. There are
pockets like Saurashtra and Kutch, the coastal areas of Tamil Nadu and land locked areas
of Western Rajasthan and Marathwada in Maharashtra with scanty rainfall and perennial
water scarcity. In addition, a large number of villages in various parts of the country are
known to be suffering from excess salinity, fluoride, nitrate, iron, arsenic and microbial
contaminations of ground water. These invariably lead to widespread water borne
diseases and cause enormous hardships to the inhabitants. A holistic approach is therefore
called for to cope with the fresh water needs of the country in the coming decades.
Global Scenario
Mineral water is water containing minerals or other dissolved substances that alter
its taste or give it therapeutic value, generally obtained from a naturally occurring mineral
spring or source. Dissolved substances in the water may include various salts and sulphur
compounds. Mineral water can be sparking (with effervescence), or still (without
effervescence).
Traditionally, mineral waters were used or consumed at their source, often
referred to as “taking the waters” or “taking the cure”, at sites such as spas, baths or wells.
The term spa was used for place where the water was consumed and bathed in; bath
where the water was used primarily for bathing, therapeutics, or recreation; and well
where the water was to be consumed. Active tourist centres have grown up around many
mineral water sites since ancient times, such as Hungary, Hisarya (Bulgaria), Vichy
(France), Jermuk (Armeni), Yessentuki(Russia), Spa(Belgium), Krynica-Zdroj(Poland),
Sulphur Baths(Tbilisi, Republic of Georgia), bath(England), or Karlovy Vary(Czech
Republic). In Romania, a country enjoying a privileged position as home to over one-
third of the European mineral and thermal springs, resorts developed since antiquity in
places such as BaileHerculane, Geoagiu or Slanic. Tourist development resulted in spa
towns and hydropathical hotels (often shortned to “hydros”).
Key Players
The main key players of classic mineral waters are following;
Aquafina
Aquafina has been built through refreshing and sharp advertising. The „What a
Body‟ campaign has helped the brand to drive premium, modern and youthful imagery in
an otherwise undifferentiated category.
Bottled across India in 19 plants, Aquafina is available across more than half a
million outlets. Catering to diverse consumer needs and occasions, it is available in
various pack sizes like 300ml, 500ml, and 1 litre bottles and in bulk water jars of 25 litres.
Aquafina is the face of PepsiCo‟s water conservation initiatives and builds
awareness about PepsiCo‟s efforts to replenish and restore the water through its pack
labels. Such a big gun is a great key player for CLASSIC.
Kinley
Kinley water comes with the4 assurance of safety from the Coca-Cola Company.
They introduced Kinley with reverse-osmosis along with the latest technology to ensure
purity of their product. Because they believe that right to pure, safe drinking water is
fundamental. According to this policy Kinley has a great goodwill and well image among
the competitors.
Bisleri
A brand that pioneered the concept of mineral water, bottled with its distinct green
label, Bisleri, today, is a household name. Powered by 17 owned plants, 33 co-packers, 11
franchisees and a wide distribution and retail network pan India, Bisleri is at the centre of
the Aqua Green Revolution. Bisleri is proud to have pioneered the concept of bottled
water in India, way back in 1969.
BIBO
Bibo Water is a BIS Approved brand manufacturing by ACER Engineers Pvt Ltd,
an ISP 9001:2000 certified organization, and the 20ltrs BIBO water is delivered to the
doorstep of over 3200 customers. BIBO water in different packs is distributed through
720 retail outlets across the twin cities. The 1 litre BIBO water is also a preferred Indian
Railway approved brand. Acer Engineers Pvt Ltd is basically a Water Treatment
Technology company having executed various industrial water treatment and drinking
water plants, the company diversified into manufacturing of Mineral water in 1996. BIBO
water, established in 1997 has strong presence across the state of Andhra Pradesh, has
been recording a consistent growth rate of 18% per annum.
Others
Kent
Green
Mount Mist
Green Valley
Mountain Valley
Crystal Aqua
Aqua fine
2.2 COMPANY PROFILE
COMPANY PROFILE OF AISWARYA BEVERAGES CO.
The company was established by Mr Emmanuel Mathew in 21 January 2001 at
Thiruvalla with an initial investment of Rs. 20 lakhs and started its functioning with 10
employees. The company rapidly grew of the increase in the demand for its quality of its
products. In order to meet the rising demand for its prodcts, this has to expand and it was
shifted to one new building with modern facilities in 2005. With an experience of over 30
years in beverages field, classic has provided consumers with consistently high quality
products. Classic is the fourteenth company in Kerala to get ISI Certification from Bureau
of Indian Standards.
This unit has its incision in 2001 and hence was the last unit to be setup. This unit
mainly deals with packaged drinking water. The brand name is Classic and it is available
in one litre, two litre and 20 litre jars. The water for this purpose is obtained from well
and from other available stored tanks within the boundary of the units. The company
gives utmost priority to quality and therefore stringent methods are followed to attain
Indian Standard Institute (ISI) as a symbol or mark for product quality. A batch is
forwarded only after the lab test is being conducted at the company‟s very own lab.
Therefore products are being certified fit for drinking only after the supervision of these
experts. The unit has its own office at Chumathra near Muthoor in Thiruvalla.
Classic is packed pure drinking water brought to the market by Aiswarya
Beverages Company, Thiruvalla, Kerala. Water filtered and purified under modern
Swedish Technology. The classic water is pure, clear, colourless, odourless and
disinfected. Classic confirms to all the health standards and specifications on drinking
water stipulated by Bureau of Indian Standards (BIS) and it ensure health and protects
from water born diseases.
Classic pure, crystal clear water goes through a rigorous multiple stage
purification process to meet the most stringent Bureau of Standards (BIS) for water
purity.
VISION MISSION AND OBJECTIVES
Vision
Our vision is to be the world‟s premier consumer product company focused on
convenient foods and beverages. We seek to produce financial rewards to investors as we
provide opportunities for growth and enrichment to our employees. Our business partners
and the communities in which we operate. And in everything we do, we strive for
honesty, fairness and integrity.
Mission
Our responsibility is to continually improve all aspects of the world in which we
operate – environment, social, economic- creating a better tomorrow than today.
Objectives
Provide cost effective products.
Improve productive development cycle time.
To satisfy customer needs and wants.
Improve in time delivery of goods.
Awards and Achievements
ISO 9001-2000 certified.
Best Mineral Water Award for the year 2010 (Kerala circle).
One if the great achievement is, in Pathanamthitta district and Kottayam district
Classic is the market leader with more than 70% market share to almost all its
products.
VALUEWS OF THE COMPANY
Respect for people:
We treat individuals with dignity and respect. We continue to be honest, open and
ethical in all our interactions with dealers, distributors, retailers, suppliers, shareholders,
customers and with each other.
Consumers delight:
We maximizing that our business can succeed only if we can create and keep
customers. We manufacture products that offer value for money, which are differentiated
and deliver safe, effective and fast solutions.
Integrity:
People at every level are expected to adhere to the highest standards of business
ethics. Anything less is unacceptable. Our ethical conduct transcends beyond policies. It
is ingrained in our corporate tradition that is transferred from one generation of
employees to another. We comply with applicable government laws and regulations in the
geographies where we are present.
Quality:
We are committed to excellence in everything we do. Our credo: There is always
a better way- We must think creatively, continuously innovate and pursue new ideas to
achieve uncommon solutions to common problems.
Teamwork:
Teamwork is the cornerstone of our business that helps deliver value to our
customers. We work together across titles, job responsibilities and organizational
structure to share knowledge and expertise.
The right environment:
It is our responsibility to create an environment that helps employees realize their
full potential.
Leadership:
We recognize that we can be a leading company through active delegation and by
creating leaders at every level of the organisation.
Community development:
We continue to contribute to the communities in which we operate and address
social issues responsibly. Our products are safe to make and use. We conserve natural
resources and continue to invest in a better environment.
Transparency and shareholder value:
We are committed to be driven by our conscience and regulatory standards, to
deliver value to our shareholders, commensurate with our management and financial
strength.
PRESENT BOARD OF DIRECTORS
o Chairman & Managing Director : Mr Emmanuel Mathew
o Mrs Sherly Emmanuel (Executive Director).
Chain of Directors
Mr Aby Emmanuel
Mr NavinScaria
Mrs Sherly Emmanuel
Mr Kishore Jacob
Mr Boby George
PRODUCTS AND SERVICES OFFERED
Services
Aiswarya Beverages Ltd is arraying on various welfare services, social and
cultural activities for the benefit of the employee and their family member‟s. The various
welfare measures are as follows;
1. Employee Bus Facility
Company shift bus facility is providing to employees, covering all the four shift to
facilitate them to attend to shift duties.
2. Issue of Uniform
The company are issued with 2 sets of stitched cotton uniform and also issued
with a pair of head covering to the employee safety.
3. Issue of Chappals
Employees are issued with one pair of chappals every year for safety reasons,
depending upon the place of work.
4. Payment of Food Allowances as Incentive
Company is paying special allowance Rs. 6.50 per head per day and Rs. 7.50 per
head per day for other calculated on the basis of number of days actually attended duty
subsidies the food/eatable expenses incurred by employee during the working hours.
5. Education Allowance
Company is paying education allowance to all other employee at 15 days
salary/wages once in a year to meet requirements of their children‟s education expenses.
6. Merits Scholarship for Professional Courses
Merit Scholarship is given to employee‟s children‟s for MBBS and B.E students
as detailed below;
MBBS Rs. 10,000 per year
B.E Rs. 9,000 per year
7. Sickness Benefit Scheme
Company is paying 50% of salary/wages to employee up to a period of 6 months
at a stretch for those who are availing long medical leave on loss of pay for
disease which require continuous treatment and bed rest to sickness period.
8. Free Medical Treatment
Free medical treatment facility is extended to all employees including outside
references also. The employee‟s wife, children and dependents, parents are also availed
medical treatment at subsidized rates.
9. Aiswarya Beverages Employee’s Association (Benefit Fund)
Company is paying a nominal pension at Rs. 750 per annual for a period of 3
years to the superannuated and retired member.
10. Gifts
A gift worth ½ Sovereign on Gold is given to superannuated employee for
appreciation of their service.
11. Salary Advance
Salary Advance is given to employees for marriage in their family and medicated
treatment purpose.
12. Insurance
Company insure the employee pays every under “Personal Insurance” Rs. 30 in
which the company bears Rs. 15.
13. Workers Education Programme
Workers Education Programme is conducted for 25 employees every year and
once in two the programme is arranged for those employees, numbering 50 to see other
factories and other important places in Kerala. The entire expenditure is borne by the
company.
14. Medical Leave
Medical leave accumulation up to 80 days is allowed.
QUALITY CERTIFICATIONS
BIS-ISI and ISO CERTIFICATIONS
BIS can be expanded as bureau of Indian Standards. This is the top institute concerning
about standard policy and quality maintenance in India. This Institute prescribes carious
specification and rules and regulation as to how the product must be manufactured,
maintained and sold there will be no violation rules and such of those person who tend to
violate will be bought under serious prosecution. Various other standards under BIS are
ISI and ISO.
Indian Standard Institute (ISI) aims at quality product while International Standards
Organisation (ISO) a confederation comprising standard of the world which aims at
standard action quality of the products and services to enter to the complete satisfaction
of the consumer. Even Though Indian Standard Institute started in 1947 it was taken over
by Bureau of Indian Standard Institute in 1987 and ISI became the symbol or
productmarket quality
PRODUCT PROFILE
This unit had its inclusion in 2001 and hence was the last unit to be set up. This
unit is mainly deals with packaged drinking water. The brand name is CLASSIC and it is
available in one litre, two litre and 20 litre pet jars. The water for this purpose is obtained
from well and from other available stored tanks within the boundary of the units. The
company gives utmost priority to quality and therefore stringent methods are followed to
attain top quality. The unit has obtained licence from Bureau of Indian Standards (BIS)
and therefore has attained Indian Standard Institute (ISI) as a symbol or mark for product
quality. A batch is forwarded only after the lab test is being conducted at the company‟s
very own lab. Therefore products are being certified fit for drinking only after the
supervision of these experts. The unit has its own office at chumathra near muthoor in
Thiruvalla.
Classic mineral water is available in following categories :
One litre Bottle
Two Litre
20 Litre Pet Jars
DISTRIBUTION CHANNELS
Retailers
Direct Sales
COMPETITORS OF THE COMPANY
Aqafina
Crystal Aqua
Green Valley
Kent
Mountain Valley
Mount Mist
Oceana
ORGANISATION STRUCTURE
CHAIRMAN
GENERAL MANAGER
HR
Manager
Production
Manager
PurchaseM
anager
Quality
Manager
Finance
manager
Marketing
Manager
Assistant
Manager
General
Clerk/Office
clerk
Machine
Operator
Charge
Hands
Assistant
Manager
Clerk Charge
Hand
Clerks
Assistant
Manager
Assistant
Manager
Clerks
SWOT ANALYSIS OF AISWARYA BEVERAGES COMPANY
SWOT means strength, weakness, opportunities and threats. Each parameter of micro
environment can be regarded as a strength, weakness, opportunities and threat. SWOT
analysis is an important analytical technique used in a strategic management to identify
care competencies as well as lack of appropriate resources.
BENEFITS OF SWOT ANALYSIS
SWOT analysis model shows how to access various parameters of micro and
macro environment to know that they are and to extend can contribute to the firm
SWOT analysis serves as an important analytical technique used in strategic
management to identify lack of appropriate resources
STRENGTHS
Company has a good experience in the field of beverages. More than 32 years
they are serving the domestic economy+
In Pathanamthitta and Kottayam districts, Classic is the market leader with more
than 70% of market share to almost all its products
Direct sales- Companies own vehicles undergoing distribution aids to give an
important mode of advertisement
Ensures high quality , maximum utilisation of quality departments
Maintaining good relationship with Customers
Company has BIS-ISI Certification
Skilled management helps in decision making
Absence of labour unions and continues improvement in production process
Advanced Machineries and Equipments
WEAKNESS
Lack of employees the company is facing to meet the customers demand
and sometimes fails to make the delivery at time
Price fluctuations in raw materials company to make rand m price change
Workers need high proficiency
High cost of machineries, their periodic maintenance and high rate of
energy consumption
OPPORTUNITIES
In the domestic market the demand for packaged drinking water is always
high than the company‟s production capacity
The company extents the market to other district also
Availability of good transportation
Uninterrupted power supply
Support from domestic environment
THREAT
Fast changing technology
Presence of less quality products in market at very low price
Threat of new entry each year in the whole market
High competition in the local market
Customers are not much aware about quality of BHIS-ISI.
LITERATURE REVIEW
Elena Sholma 2009: “The financial performance of ethical funds;acomparative
analysis of the risk-adjusted performance of ethical and non-ethical funds mutual funds in
UK”
The review of ethical funds literature shows significant growth of the Socially
Responsible Investment (SRI) in the last decades. The increase of the interest towards
SRI indicates that ethical issues have become more essential for the investors. However
the number of surveys reveals that financial performance remains of an important concern
for the socially responsible investors. Therefore the benchmark analysis of the expected
returns and management fees of the ethical mutual fund chosen as a topic for this thesis
research. The risk-adjusted measures are used to analyse and compare performance of the
ethical and Non- ethical mutual funds in United Kingdom. The analysis does not indicates
the significant difference in the expected returns between the two groups of funds.
However this study concludes that on average ethical funds charge higher management
fees. Thus investing in ethical funds is more costly but gives about the same returns as
investing in conventional funds.
SannaMalm; EmilieRslund [2013]:“The Bond-to-total Debt Ratio and its Impact
on Firm‟s Performance”
In this study we are investigating whether the bond-to-total debt ratio impacts firm‟s
performance. We are also asking if this relationship might differ during economic states
of recession, due to the impacts of the latest financial crisis. The choice of topic stemmed
from the from the opening of the new First North Bond Market in Sweden, in
combination with the implication of the Basel III Accords coming into force in the
Swedish financial market the year. When firms have less access to bank loans but easier
access to a bond market, it is important to know whether issuing bonds could have an
impact on the firms. Due to the limited amount of data from the young Swedish bond
market, the study was conducted on the Norwegian market, in which a well – developed
and mature corporate bond market is established. The choice was further supported by the
fact that the countries socio- economic and financial environment are quite similar.
Our methodological views of positivism and objectivism guided us through our literature
review in search for theories. A deductive approach was taken in order to generate
hypothesis to test. Grand theories of capital structure and contingency theories of
performance determines served as the basis for our selection of research method and
theoretical framework. Due to the lack of a middle-range theory that explains the effects
of the relationship we wanted to test, our aim was to fill in this study.
Pensamiento& Geston-12/2011: “Financial performance analysis of innovative
companies in the food and beverage industry in Colombia”
The Article presents the findings from the financial evaluation of Colombian innovating
companies of the food and beverage sector conducted through the study of their
efficiency, and effectiveness in obtaining and using financial resources, to verify if the
basic financial objectives of creating economic value is achieved. The research
covers2000-2008 periods, and it uses financial indicators based on accounting and
economic information.
Lin Zhang; Wai Fong Chow- 2010: “Financial performance in Hong Kong listed
hotels: the effect of value added creation and cost-leadership seeking”
We structure a literature review which we provide with broader definition of the major
concepts; value creation, cost efficiency (leadership), competitive strategies, financial
performance and statement analysis. The literature review focuses mainly on Hong Kong
context and literatures supporting the similar business strategies among similar size of
companies from various industries.
4.1 RESEARCH METHODOLOGY
Research methodology is the method used to collect data from the various source.
Research is a careful investigation or the enquiry especially through search for new facts
in any branch of knowledge. In every research there are two types of data, primary and
secondary. Primary data are those data which are collected from the first time and original
in nature. Secondary data on the other hand those that have already been collected
analysed from someone else. The nature of data collected for the study is secondary data.
The study is covered five year of data from 2009-2013. The technique used for analysis
was ratio analysis, comparative balance sheet, common size and trend analysis. The
source of data collected for the study is from annual report from Aiswarya Beverages
Company.
RESEARCH DESIGN
This is a systematic way to solve the research problem and it is important component for
this study without which researches may not be able to obtain the format. A research
design is the arrangements of the condition for collection and analysis of data in a
manager that aims to combine for collection and analysis of data relevance to the research
purpose with economy in procedure.
Meaning of Research Design
The formidable problem that follows the task of defining the research problem is the
preparation of design of the research project, popularly known as the research design,
decision regarding what, where, when, how much, by what means concerning and enquiry
of a research study constitute a research design. A research design is the arrangement of
conditions for collection and analysis of data in a manager that aims to combine for
collection analysis of data relevance to the research purpose with economy in procedure.
4.1.1 SOURCE OF DATA
Primary Data:
Primary data is the first hand information that is collected during the period of research.
Primary data has been collected through discussions held with the staffs in the accounts
department. Some types of information were gathered through oral conversations with the
cashier, taxation officer etc.
Secondary Data:
Secondary data studies whole company records and company‟s balance sheet in which the
project work has been done. In addition, a number of reference books, journals and
reports were also used to formulate the theoretical model for the study. And some
information were also drawn from the websites.
It consists of data collected through various annual reports, websites, magazines, etc.
4.1.2 TOOLS USED FOR THE ANALYSIS
1. Ratio Analysis
2. Comparative Balance Sheet Analysis
Microsoft Excel has been used the data analysis
4.2 OBJECTIVE OF THE STUDY
To find out the efficiency in fund utilization of the organisation
To identify the past performance of the company
To understand the company‟s present financial position.
To have a comparative study about the balance sheet of various year
To examine the ratio of net profit to expenses, income etc.
To access the financial strength and weakness of the organisation
To compare the performance of the company with its competitors
To study the working capital management of Aiswarya Beverages co.
4.3 SCOPE OF THE STUDY
Financial management is one of the important parts of overall management, which is
directly related with various functional departments like personnel, marketing and
production. Financial management covers wide area with multidimensional approaches.
The financial analysis is conducted to have practical knowledge about the various entities
of the finance department and to compare its performance with competitors. By this we
have to get a clear idea about all the financial entities of an organisation. it also provides a
chance to see the practical constraints faced by the finance managers and to compare the
financial performance with a competitor.
4.4 PERIOD OF STUDY
The present study deals with the data collected from annual reports and other relevant
documents for the period commencing from 2011-2015
4.5 LIMITATIONS OF THE STUDY
There are certain limitations for the study conducted in AISWARYA
BEVERAGES CO.
Time available for the project is limited (about 2 months). It will affect the
entire study.
The study is mostly based on secondary data, so errors are possible
Lack of limited information.
Inter comparison among other similar company‟s is not possible in this study.
The company‟s higher officials were not allowed to meet in person and the
company‟s data was kept confidential among them.
Since all the employees were busy with their works, detailed interaction was
not possible.
The study is confined to five years and as such the conclusions arrived at may
be valid only for these years.
5.1 RATIO ANALYSIS
The analysis of financial statements consists of a study of relationship and trends to
determine whether or not the financial position of the concern and its operating efficiency
have been satisfactory. Ratio analysis is the important and widely used tool of analysis of
financial statement. It is essentially an attempt to develop meaningful relationship
between individual items or group of items in the balance sheet or profit and loss account.
The object and utility of ratio analysis is a technique of financial analysis is confined not
only to the internal parties but to the trade creditors, banks and lending institution also.
5.1.1 DEBT EQUITY RATIO
This ratio indicate the relationship between loan funds and net worth of the
company, which is known as “gearing” if the proportion of debt to equity is low, a
company is said to be low-geared and vice versa.
Equation:-
Debt Equity Ratio= Borrowed fund
Owned fund
5.1.1 DEBT EQUITY RATIO CHART
Rs. In Lakhs
Particulars 2011 2012 2013 2014 2015
A) Borrowed Fund 12.00 9.00 6.00 3.00 0.00
B) Owned Fund 31.18 32.82 35.20 37.58 39.85
C) Debt Equity
Ratio (A/B)
0.384 0.274 0.170 0.079 0.00(Nil)
5.1.1 DEBT EQUITY RATIO DIAGRUM
INTERPRETATION
It is the ratio between proprietors fund and outsider‟s fund. This ratio reveals the
contribution by the proprietor and outsiders to the total fund of the firm. The above ratio
shows that proprietors share to total fund is increased, so the ratio shows decrease in trend
and become zero in the last year
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
2011 2012 2013 2014 2015
Debt Equity Ratio (A/B)
5.1.2 FIXED ASSET NET WORTH RATIO
It is the ratio between fixed asset and net worth. This ratio indicates that owner‟s
contribution by the owner to the fixed asset is reduced with indicate the financial
soundness of the business
Equation:-
Fixed Asset to Net Worth Ratio = Owned fund
Fixed Asset
5.1.2 FIXED ASSET TO NET WORTH RATIO CHART
Rs. In Lakhs
Particulars 2011 2012 2013 2014 2015
A) Borrowed Fund 31.18 32.82 37.58 37.58 39.85
B) Owned Fund 41.5 38.35 35.52 32.99 30.72
C) Fixed Asset Net
Worth Ratio(A/B)
0.75 0.856 .991 1.139 1.297
5.1.2 FIXED ASSET TO NET WORTH RATIO DIAGRUM
INTERPRETATION
It is the ratio between fixed asset and proprietary fund. The ratio shows the increase in
trend that the contribution by the proprietor to total fund increase
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2011 2012 2013 2014 2015
Fixed Asset Net Worth Ratio(A/B)
5.1.3 FIXED ASSET TURN OVER RATIO
This ratio will be analysed further with ratio for each minimum category of asst. This is a
difficult set of ratio to interpret as asset values are based on historic cost. An increase in
the fixed asset figure may result from the replacement of an asset at an increased price or
the purchase of an additional asset intended to increase production capacity.
Equation:-
Fixed Asset Turnover Ratio= Sales
Fixed Asset
5.1.3 FIXED ASSET TURN OVER RATIO CHART
Rs. In Lakhs
Particulars 2011 2012 2013 2014 2015
A) Borrowed Fund 30.00 35.00 40.00 45.00 50.00
B) Owned Fund 41.5 38.35 35.52 32.99 30.72
C) Fixed Asset Turn
Over Ratio (A/B)
17.9 22.8 32.5 29.34 33.58
5.1.3 FIXED ASSET TURN OVER RATIO DIAGRUM
INTERPRETATION
It is the ratio between fixed asset to sales. this ratio shows an increase in trend because
of the increase in sales without making an increase in Fixed asset.
0
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015
Fixed Asset Turn Over Ratio (A/B)
5.1.4 NET PROFIT RATIO
This ratio is designed to focus attention on the net profit margin arising from
business operations before interest and tax is deducted. The convention is to
express profit after tax and interest as percentage of sales. A drawback is that
the percentage which result varies depending in the source employed to
finance business activity; interest is changed above the line while dividends
are deducted below the line. It is for this reason that net profit ie; earnings
before interest and tax [EBIT] is used
Equation:-
Net Profit Ratio= Net Profit *100
Sales
5.1.4 NET PROFIT RATIO CHART
Rs. In Lakhs
Particulars 2011 2012 2013 2014 2015
A) Borrowed Fund 5.375 8.00 13.00 13.207 16.791
B) Owned Fund 30.00 35.00 40.00 45.00 50.00
C) Net Profit
Ratio(A/B)*100
17.9 22.8 32.5 29.34 33.58
5.1.4 NET PROFIT RATIO DIAGRUM
INTERPRETATION
It is the ratio between net profit and sales. The ratio shows an increase in trend that is the
net profit of the firm is increasing from year after year in accordance with increase in
sale.
0
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015
Net Profit Ratio (A/B)*100
5.1.5 PROPRIETARY RATIO
This ratio indicates the extent to which Tangible Asset are financed by Owner‟s fund. The
ratio will be 100% when there is no borrowing for purchasing of Assets.
Equation;-
Proprietary Ratio= Shareholders fund
Total Asset
5.1.5 PROPRIETARY RATIO CHART
Rs. In Lakhs
YEAR SHAREHOLDRES FUND
(A)
TOTAL ASSET
(B)
PROPRIETARY
RATIO
2010-2011 31.18 43.18 0.7221
2011-2012 32.82 41.82 0.7848
2012-2013 35.20 41.20 0.8549
2013-2014 37.58 40.58 0.9261
2014-2015 39.85 39.85 1.00
5.1.5 PROPRIETARY RATIO DIAGRUM
INTERPRETATION
This ratio shows the financial strength of the company. It helps the creditors to find out
the proportion of share holders fund in the total assets
0
0.2
0.4
0.6
0.8
1
1.2
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
PROPRIETARY RATIO
5.1.6 CURRENT ASSET TURNOVER RATIO
The current asset turnover ratio determines the velocity of utilization of current asset.
This analysis helps to find the organization ability to reduce a large volume current asset,
is the most important aspect of its operating performance
Equation:-
Current Asset Turnover Ratio= Net Sale
Current Asset
5.1.6 CURRENT ASSET TURNOVER RATIO CHART
Rs. In Lakhs
Year Total Sales(A) Current Asset (B) Current Asset
Turnover Ratio
2010-2011 30.00 1.675 17.9104
2011-2012 35.00 3.465 10.10101
2012-2013 40.00 5.685 7.03606
2013-2014 45.00 7.582 5.93511
2014-2015 50.00 9.13 5.47645
5.1.6 CURRENT ASSET TURNOVER RATIO DIAGRUM
INTERPRETATION
Here the current asset turnover ratio is reducing. The average turnover ratio shows the
organisation ability to reduce large volume of current asset, is the most important aspects
of its operating performance
0
2
4
6
8
10
12
14
16
18
20
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
PROPRIETARY RATIO
5.1.7 TOTAL ASSET TO DEBT RATIO
Total asset to debt ratio may be used analyze the long term solvency of firm; the firm may
be interested being debt in the capital structure
Equation;-
Total Asset To Debt Ratio= Total Debt
Total Asset
5.1.7 TOTAL ASSET TO DEBT RATIO CHART
Rs In Lakhs
Year Total Debt(A) Total Asset (B) Total Asset To Debt
Ratio
2010-2011 12.00 43.18 0.278
2011-2012 9.00 41.82 0.215
2012-2013 6.00 41.20 0.146
2013-2014 3.00 40.58 0.074
2014-2015 0.00 39.85 0.00(Nil)
5.1.7 TOTAL ASSET TO DEBT RATIO DIAGRUM
INTERPRETATION
This ratio shows the relationship between the total debt and total assest. Here it
shows s decreasing trend. In the year 2010-2011 is the higher ratio and the lowest one is
2014-2015.
0
0.05
0.1
0.15
0.2
0.25
0.3
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Total Asset To Debt Ratio
5.2.1 COMPARATIVE BALANCE SHEET OF THE YEAR 2011-2012
Rs. In Lakhs
PARTICULA
RS
2011 2012 AMOUNT
INCREASE/DEC
REASE
PERCENTAGE
OF
INCREASE/DEC
REASE
A) Source of
Fund
Owned Fund 31.18 32.8
2
1.64 5.26%
Borrowed
Fund
12.00 9.00 -3.00 -25.00%
B)Total 43.18 41.8
2
-1.36 -3.15%
C)Applicatio
n of Fund
Fixed assets
Land 10.00 10.0
0
0.00 0.00%
Vehicle 9.00 8.10 -0.90 -10.00%
Furniture 0.90 0.81 -0.09 -10.00%
Plant 11.7 10.5
3
-1.17 -10.00%
Machinery 8.1 7.29 -0.81 -10.00%
Computer 1.8 1.62 -0.18 -10.00%
Current
Assets
Stock 0.5 1.00 0.5 100%
Cash in hand 1.175 2.46
5
1.29 109.79%
D)Total 43.18 41.8
2
-1.36 -3.15%
INTERPRETATION
The comparative balance sheet reveals that has been decreased total fixed asset
10.00% each unless land.
The total current asset increased
In current assets, cash in hand and stocks are increased.
The total asset decreased -3.15%
25% of the borrowed fund paid to the bank and owned fund increased 5.26%
5.2.2 COMPARATIVE BALANCE SHEET OF THE YEAR 2012-2013
Rs. In Lakhs
PARTICULAR
S
2012 2013 AMOUNT INCREASE/
DECREASE
PERCENTAGE OF
INCREASE/
DECREASE
A) Source of
Fund
Owned Fund 32.82 35.2 3.62 11.03%
Borrowed Fund 9.00 6.00 -3.00 -33.33%
B)Total 41.82 41.20 -0.62 -1.48%
C)Application
of Fund
Fixed assets
Land 10.00 10.00 0.00 0.00%
Vehicle 8.10 7.29 -0.81 -10.00%
Furniture 0.81 0.73 -0.08 -9.87%
Plant 10.53 9.48 -1.05 -9.97%
Machinery 7.29 6.57 -0.72 -9.88%
Computer 1.62 1.45 -0.17 -10.49%
Current Assets
Stock 1.00 0.05 -0.5 -50.00%
Cash in hand 2.465 5.185 2.72 109.79%
D)Total 41.82 41.20 -0.62 -1.48%
INTERPRETATION
The comparative balance sheet reveals that has been decreased total fixed asset
10.00% each unless land.
The total current asset increased 79.895%
In current assets, cash in hand increased 109.79% and reached Rs.518500
The total asset decreased -1.48%
33% of the borrowed fund paid to the bank and owned fund increased 11.03%
5.2.3 COMPARATIVE BALANCE SHEET OF THE YEAR 2013-2014
Rs. In Lakhs
PARTICULARS 2013 2014 AMOUNT
INCREASE
/DECREASE
PERCENTAGE OF
INCREASE/
DECREASE
A) Source of
Fund
Owned Fund 35.2 37.58 2.38 6.76%
Borrowed Fund 6.00 3.00 -3.00 -50.00%
B)Total 41.20 40.58 -0.62 -1.50%
C)Application of
Fund
Fixed assets
Land 10.00 10.00 0.00 0.00%
Vehicle 7.29 6.57 -0.72 -10.00%
Furniture 0.73 0.66 -0.07 -9.59%
Plant 9.48 8.54 -0.94 -9.92%
Machinery 6.57 5.92 -0.65 -9.89%
Computer 1.45 1.31 -0.14 -9.66%
Current Assets
Stock 0.05 1.00 0.5 100.00%
Cash in hand 5.185 6.582 1.397 26.94%
D)Total 41.20 40.58 -0.62 -1.50%
INTERPRETATION
The comparative balance sheet reveals that has been decreased total fixed asset
10.00% each unless land.
The total current asset increased 63.47%
In current assets, and stock increased 100% and cash in hand increased 26.94%,
so it increased Rs.139700 .
The total asset decreased -1.50%
50% of the borrowed fund paid to the bank and owned fund increased 6.76% and
now the value of owned fun is Rs. 3758000.
5.2.4 COMPARATIVE BALANCE SHEET OF THE YEAR 2014-2015
Rs. In Lakhs
PARTICULARS 2014 2015 AMOUNT
INCREASE/
DECREASE
PERCENTAGE OF
INCREASE/
DECREASE
A) Source of
Fund
Owned Fund 37.58 39.85 2.27 6.04%
Borrowed Fund 3.00 0.00 -3.00 -100.00%
B)Total 40.58 39.85 -0.73 -1.798%
C)Application of
Fund
Fixed assets
Land 10.00 10.00 0.00 0.00%
Vehicle 6.57 5.92 -0.65 -9.89%
Furniture 0.66 0.60 -0.06 -9.09%
Plant 8.54 7.68 -0.86 -10.07%
Machinery 5.92 5.33 -0.59 -9.97%
Computer 1.31 1.18 -0.13 -9.92%
Current Assets
Stock 1.00 0.5 -0.5 -50.00%
Cash in hand 6.582 8.63 2.048 31.11%
D)Total 40.58 39.85 -0.73 -1.798%
INTERPRETATION
In the last year the borrowed fund has been paid back completely.
The total fixed asset diminished about 9.9% each unless land.
In current assets, and stock decreased 50% and cash in hand increased 31.11%,
so it increased Rs.204800 .
The total asset decreased -1.798%
100% of the borrowed fund paid to the bank and owned fund increased 6.04%
and now the value of owned fun is Rs. 3985000.
5.3 COMPETITOR FINANCIAL COMPARISON
COMPANY DETAILS
Vrindavanam Mineral Water Products
Owner: Mr. Manoj Kumar
Kottanad P.O, Vrindavanam, Ranni Road,
Near Paranamalakv Devi Temple,
Pathanamthitta-689615,
Kerala, India. PH:+919747980308
Vrindavanam is a manufacturer and supplier of packaged drinking water and domestic
competitor of Aiswarya Beverages.
5.3.1 BALANCESHEET COMPARISON OF THE YEAR 2014-2015
Particulars Aiswarya
BveragesComoany
Vrindavanam
Mineral Water
Production
Difference
In Amount
Percentage Of
Difference
A) Source of
Fund
Owned Fund 39.85 38.50 -1.30 -3.387%
Borrowed Fund 0.00 9.71 9.71
B)Total 39.85 48.21 8.36 20.978%
C)Application
of Fund
Fixed assets
Land 10.00 17.00 7.00 70.00%
Vehicle 5.92 5.50 -0.42 -7.094%
Furniture 0.60 0.50 -0.10 -16.667%
Plant 7.68 8.95 1.27 16.536%
Machinery 5.33 4.76 -0.57 -10.694%
Computer 1.18 1.02 -0.16 -13.559%
Current Assets
Stock 0.5 1.12 0.62 124.00%
Cash in hand 8.63 9.36 0.73 8.458%
D)Total 39.85 48.21 8.36 20.978%
INTERPRETATION
The competitor‟s project is 20.978% is more expensive than Aiswarya Beverages
C0.
Competitor has invested more money on land and plant but investment on other
depreciating assets are comparatively less stock
Competitor holds bulk amount of stock, about 124% more than that of Aiswarya
Beverages Co,
The net current assets are more with competitor so they can ensure more liquidity
that will help in complex situation
6.1 FINDINGS
The company is in a profitable situation
In the last year (2015) the borrowed fund has been paid back completely
The total fixed asset diminishing about 9.9% each year unless land
Net profit ratio of the company shows sustainable growth in the past 3 years. i.e in
the 2013-2015. This is gained by increased sales volume
Overall profit ratio shows an increasing trend in the past 5 years. The efficient
management of credit
Current Asset turnover ratio of the company shows an decreasing trend. This
indicates the firm‟s disability to produce a large volume of income for a given
amount of current assets.
Proprietary ratio indicates the extent to which tangible asset are financed by
Owner‟s fund. It shown an increasing trend. The ratio is 100% in the last year
where there is no borrowing for purchasing of assets.
The debt equity ratio shows that proprietors share to total fund is increased, so the
ratio shows decrease in trend and it becomes zero in the last year.
Fixed asset to net worth ratio is the ratio between fixed asset and proprietary fund.
Here the ratio shows an increase in trend that the contribution by the proprietor to
total fund increasing
Fixed asset turnover shows an increase in trend because of the increase in sale
without making an increase in fixed asset. So the operating efficiency of the firm is
better
.6.2 SUGGESTIONS
The company has extent the market in whole Kerala
The company has to maintain prominent reserve in the form of cash and bank balance,
so that the liquidity position can be increased
Maintain the idle proportion of current asset and current liabilities help to improve
better working capital management
In order to improve profitability , expenses incurred by the organization should be
reduced
Make use of assets in most efficient manner by using advanced technologies
Acquire more liquid-able assets which are having less depreciation
Proper ratio of current assets and timely liquidation of current liabilities must be
ensuring to maintain the solvency position of the company
The absolute liquidity ratio should be maintain by the company for the sound liquidity
position
The company better try to increase the asset than its debt
6.3 CONCLUSION
Aiswarya Beverages Company is one of the major package drinking water manufacturers
in Central Travancore, they are having a good chance of growth and prospectus in future.
An increase in profitability statement proves the operating efficiency of the firm. By
verifying the balance sheet it is identified that the financial position of the firm is sound,
the firm has the capacity to repay all their liabilities in time and ratios shown are idle.
The ratios and annexure explain that the industry will become number one package
drinking water manufacturing company in the market within few years.
The project is technically feasible, economically viable and commercially sound and
deserves best assistance from financial institutions
Newhorizon College
BIBILIOGRAPHY
Text Books:
Cost Accounting by V K Kapoor, Reliance Publications
Reports:
Annual reports of Aiswarya Beverages Company
Online Resources
http://en.wikipedia.org/wiki/bottledwater
Newhorizon College
8.1 PROJECTED PROFITABILITY STATEMENT
Rs. In Lakhs.
Year 2011 2012 2013 2014 2015
A)INCOME
B)TOTAL 30.00 35.00 40.00 45.00 50.00
C)VARIABLE COST
a)Opening Cost 0.00 0.5 1.00 0.5 1.00
b)Purchase of Materials 12.00 13.00 12.00 15.00 14.00
c)Closing Stock 0.5 1.00 0.5 1.00 0.5
Material Consumed
(a+b+c)
11.5 12.5 12.5 14.5 14.5
D)TOTAL 11.5 12.5 12.5 14.5 14.5
E)GROSS PROFIT(B-D) 18.5 22.5 27.5
F)OPERATING EXPENSES
Salary 6.75 7.25 7.75 8.25 8.75
Electricity Charge 0.5 1.00 1.5 2.00 2.5
Travelling Expenses 0.375 0.4 0.425 0.45 0.475
Repairs 0.25 0.5 0.75 1.00 1.25
Office Expense 0.25 0.5 0.75 1.00 1.25
Interest on Loan 1.5 1.35 1.215 1.093 0.984
Depreciation 3.5 3.5 3.5 3.5 3.5
G)TOTAL 13.25 14.5 14.5 17.293 18.70
H)NET PROFIT 5.375 8.00 13.00 13.207 16.791
Newhorizon College
8.2 PROJECTED CASH FLOW STATEMENT
Rs. In Lakhs
Year Pre-
operative
period
2011 2012 2013 2014 2015
A)INFLOW
Owned capital 30.00
Borrowed Term
loan
15.00
Inflow from
operation
- 5.375 8.00 13.00 13.207 16.791
Add depreciation - 3.5 3.5 3.5 3.5 3.5
Decrease in current
asset
- 0.00 0.00 0.5 0.00 0.5
B)TOTAL 45.00 8.875 11.5. 11.7 16.707 20.791
Fixed asset
Land 10.00
Vehicle 10.00
Furniture 1.00
Plant 13.00
Machinery 9.00
Computer 2.00
Increase in current
asset
- 0.5 0.5 0.00 0.5 0.00
Repayment of loan 3.00 3.00 3.00 3.00 3.00
Income tax 0.75 1.51 2.28 3.05 3.82
Drawings 3.45 5.2 9.00 8.76 12.49
C)TOTAL 45.00 7.7 10.21 14.28 15.31 19.31
D)SURPLUS 1.175 1.29 2.72 1.397 1.481
E)CUM.
SURPLUS
1.175 2.465 5.185 6.582 8.063
Newhorizon College
8.3PROJECTED DEBT SERVICE COVERAGE RATIO
Rs in lakhs
Year
2011 2012 2013 2014 2015
A)SOURCE OF FUND
Inflow from operation
5.375 8 13 13.207 16.791
Add depreciation
3.5 3.5 3.5 3.5 3.5
Less Income tax
0.75 1.51 2.28 3.05 3.82
B)TOTAL 8.125
9.99 14.22 13.657 16.471
C)Service of Debt
Repayment of loan
3.00 3.00 3.00 3.00 3.00
D)TOTAL
3.00 3.00 3.00 3.00 3.00
F)DSCR(B/D) 2.708
3.33 4.74 4.552 5.490
Newhorizon College
PROJECTED BALANCE SHEET FOR THE YEAR 2011
Year Pre-operative
period
2011
A) Source of Fund
Owned Fund
30.00 31.18
Borrowed Fund
15.00 12.00
B)Total
45.00 43.18
C)Application of Fund
Fixed assets
Land
10.00 10.00
Vehicle
10.00 9.00
Furniture
1.00 0.90
Plant
13.00 11.7
Machinery
9.00 8.1
Computer
2.00 1.8
Current Assets
Stock
0.5
Cash in hand
1.175
D)Total
43.18
Newhorizon College
PROJECTED BALANCE SHEET FOR THE YEAR 2012
Year
2012
A) Source of Fund
Owned Fund
32.82
Borrowed Fund
9.00
B)Total
41.82
C)Application of Fund
Fixed assets
Land
10.00
Vehicle
8.10
Furniture
0.81
Plant
10.53
Machinery
7.29
Computer
1.62
Current Assets
Stock
1.00
Cash in hand
2.465
D)Total
41.82
Newhorizon College
PROJECTED BALANCE SHEET FOR THE YEAR 2013
Year
2013
A) Source of Fund
Owned Fund
35.2
Borrowed Fund
6.00
B)Total
41.20
C)Application of Fund
Fixed assets
Land
10.00
Vehicle
7.29
Furniture
0.73
Plant
9.48
Machinery
6.57
Computer
1.45
Current Assets
Stock
0.05
Cash in hand
5.185
D)Total
41.20
Newhorizon College
PROJECTED BALANCE SHEET FOR THE YEAR 2014
Year
2014
A) Source of Fund
Owned Fund
37.58
Borrowed Fund
3.00
B)Total
40.58
C)Application of Fund
Fixed assets
Land
10.00
Vehicle
6.57
Furniture
0.66
Plant
8.54
Machinery
5.92
Computer
1.31
Current Assets
Stock
1.00
Cash in hand
6.582
D)Total
40.58
Newhorizon College
PROJECTED BALANCE SHEET FOR THE YEAR 2015
Year
2015
A) Source of Fund
Owned Fund
39.85
Borrowed Fund
0.00
B)Total
39.85
C)Application of Fund
Fixed assets
Land
10.00
Vehicle
5.92
Furniture
0.60
Plant
7.68
Machinery
5.33
Computer
1.18
Current Assets
Stock
0.5
Cash in hand
8.63
D)Total
39.85