CHAPTER-1
INTRODUCTION
Meaning of Financial Analysis
The first task of financial analysis is to select the information relevant to the decision
under consideration to the total information contained in the financial statement. The second step
is to arrange the information in a way to highlight significant relationship. The final step is
interpretation and drawing of inference and conclusions. Financial statement is the process of
selection, relation and evaluation.
Features of Financial Analysis
To present a complex data contained in the financial statement in simple and
understandable form.
To classify the items contained in the financial statement inconvenient and rational
groups.
To make comparison between various groups to draw various conclusions.
Purpose of Analysis of financial statements
To know the earning capacity or profitability.
To know the solvency.
To know the financial strengths.
To know the capability of payment of interest & dividends.
To make comparative study with other firms.
To know the trend of business.
To know the efficiency of management.
To provide useful information to management.
Procedure of Financial Statement Analysis
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The following procedure is adopted for the analysis and interpretation of financial
Statements:-
The analyst should acquaint himself with principles and postulated of accounting. He
should know the plans and policies of the managements that he may be able to find out
whether these plans are properly executed or not.
The extent of analysis should be determined so that the sphere of work may be decided.
If the aim is find out. Earning capacity of the enterprise then analysis of income
statement will be undertaken. On the other hand, if financial position is to be studied
then balance sheet analysis will be necessary.
The financial data be given in statement should be recognized and rearranged. It will
involve the grouping similar data under same heads. Breaking down of individual
components of statement according to nature. The data is reduced to a standard form. A
relationship is established among financial statements with the help of tools &
techniques of analysis such as ratios, trends, common size, fund flow etc.
The information is interpreted in a simple and understandable way. The significance and
utility of financial data is explained for help indecision making.
The conclusions drawn from interpretation are presented to the management in the form
of reports.
Analyzing financial statements involves evaluating three characteristics of a company: its
liquidity, its profitability, and its insolvency. A short-term creditor, such as a bank, is primarily
interested in the ability of the borrower to pay obligations when they come due. The liquidity of
the borrower is extremely important in evaluating the safety of a loan. A long-term creditor, such
as a bondholder, however, looks to profitability and solvency measures that indicate the
company’s ability to survive over a long period of time. Long-term creditors consider such
measures as the amount of debt in the company’s capital structure and its ability to meet interest
payments. Similarly, stockholders are interested in the profitability and solvency of the company.
They want to assess the likelihood of dividends and the growth potential of the stock.
COMPANY PROFILE
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Chennai Port, the third oldest port among the 12 major ports, is an emerging hub port in
the East Coast of India. This gateway port for all cargo has completed 128 years of glorious
service to the nation’s maritime trade.
Maritime trade started way back in 1639 on the sea shore Chennai. It was an open road -
stead and exposed sandy coast till 1815. The initial piers were built in 1861, but the storms of
1868 and 1872 made them inoperative. So an artificial harbour was built and the operations were
started in 1881.The cargo operations were carried out on the northern pier, located on the
northeastern side of Fort St. George in Chennai. In the first couple of years the port registered
traffic of 3 lakh tonnes of cargo handling 600 ships.
Being an artificial harbour, the port was vulnerable to the cyclones, accretion of sand
inside the basin due to underwater currents, which reduced the draft. Sir Francis Spring a
visionary skillfully drew a long-term plan to charter the course of the port in a scientific manner,
overcoming both man-made and natural challenges. The shifting of the entrance of the port from
eastern side to the North Eastern side protected the port to a large extent from the natural
vulnerabilities. By the end of 1920 the port was equipped with a dock consisting of four berths in
the West Quays, one each in the East & South Quay along with the transit sheds, warehouses and
a marshalling yard to facilitate the transfer of cargo from land to sea and vice versa. Additional
berths were added with a berth at South Quay and another between WQ2 & WQ3 in the forties.
India’s Independence saw the port gathering development, momentum. The topography
of the Port changed in 1964 when the Jawahar dock with capacity to berth 6 vessels to handle
Dry Bulk cargoes such as Coal, Iron ore, Fertilizer and non hazardous liquid cargoes was carved
out on the southern side.
In tune with the international maritime developments, the port developed the Outer
Harbour, named Bharathi Dock for handling Petroleum in 1972 and for mechanized handling of
Iron Ore in 1974. The Iron ore terminal is equipped with Mechanized ore handling plant, one of
the three such facility in the country, with a capacity of handling 8 million tonnes. The Chennai
port’s share of Iron ore export from India is 12%. The dedicated facility for oil led to the
development of oil refinery in the hinterland. This oil terminal is capable of handling Suezmax
vessels.
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In 1983, the port heralded the country’s first dedicated container terminal facility
commissioned by the then prime minister Smt.Indira Gandhi on 18th December 1983. The Port
privatized this terminal and is operated by Chennai Container Terminal Private Limited. Having
the capability of handling fourth generation vessels, the terminal is ranked in the top 100
container ports in the world. Witnessing a phenomenal growth in container handling year after
year the port is added with the Second Container Terminal with a capacity to handle 1.5 M TEUs
to meet the demand. To cater to the latest generation of vessels and to exploit the steep increase
in containerized cargo the port is planning to welcome the future with a Mega Container
Terminal, capable of handling 5 Million TEUs expected to be operational from 2013.
The Chennai port is one among the major ports having Terminal Shunting Yard and
running their own Railway operations inside the harbor on the East Coast. The port is having
railway lines running up to 68 kms and handles 25% of the total volume of the cargo, 4360 rakes
(239412 wagons) during 2009-10.
The port with three Docks, 24 berths and draft ranging from 12m to 16.5m has become a
hub port for Containers, Cars and Project Cargo in the East Coast. The port has handled an all
time high of 61.06 Million tons of cargo registering an increase of 6.2% over previous year. An
increase of 10.14% in handling of cars from 273917 Units in the year 2009-10 when compared
with 248697 Units in the year 2008-09 and an increase of 6.39% in handling of containers from
1143373 TEUs in the year 2008-09 to 1216438 TEUs in the year 2009-10. The long term plan
for Chennai Port envisages that the Port will mainly handle 4C’s i.e. Containers, Cars, Cruise
and Clean Cargo.
Future Plans
Master plan for Port Railway, Realigning Rail and Road network.
Dedicated Elevated Expressway from Chennai Port to Maduravoyalupto NH4 has been
approved by the Government to enhance the hinterland connectivity.
Development of Ro-Ro Terminal and a Multi-level car parking facility with a capacity
of 5000 cars.
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Chennai Mega Container Terminal with a continuous quay length of 2 km with 18-22m
side along draft. Capable of handling ultra large container ships carrying over 15000
TEU’s.
The break water extension from existing outer arm will be utilized to develop deep draft
oil berth for handling VLCCs.
PORT DETAILS:
Geographical Location
Latitude - 13° 06’ N
Longitude - 80° 18’ E
Climate - Tropical
Time - +5 Hrs. 30 Minutes
Temperature -30° C Max. 18° C Min.
Annual Rainfall - About 125 Cms.
Spring Tides - 1.2 Metres
Water Area -420.00 acres (169.97 hectares)
Land Area - 586.96 acres (237.54 hectares)
Navigation Channel:
Entrance Channel
Soil - Predominantly sandy and silt
Length of Channel - About 7 kilometres
Depth of Inner Channel - 18.6m at chart datum
Depth of Outer Channel - 19.2m at chart datum
Depth of Outer Channel - 19.2m at chart datum
Swell Allowance - 3.00 Metres.
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Width of Channel - The width of channel gradually increases from
244m to 410m at the bent portion, then
maintains a constant width of 305m
Total Length of Breakwater:
Inner Harbour
Eastern Breakwater - 1325 m
Northern Breakwater - 575 m
Outer Harbour
Eastern Breakwater - 590 m
Northern Breakwater - 460 m
Outer Arm - 1000 m
Upper Pitch Revetment - 950 m
Port Entrances:
Entrance in Bharathi Dock - 350 m
Entrance in Dr. Ambedkar Dock - 125 m
Storage Facilities:
Transit Shed/over flow shed - 7 Nos. - 30,693 sq.mts
Warehouse - 5 Nos. - 30,138 sq.mts
Container Freight Station - 3 Nos. - 40,644 sq.mts
Open space - 3,84,611 sq.mts
Container parking Yard - 2,50,600 sq.mts
Mission & Vision
Mission:
Achieve excellence in Port operations with State-of-the-Art technologies.
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Enhance competence and enthuse workforce to maximize customer satisfaction.
Anticipate and adapt to the changing global scenario.
Act as a catalyst for sustained development of the Region.
Vision:
To be recognized as a futuristic Port with foresight.
Quality Policy:
Provide efficient, prompt, safe and timely services at optimum cost
Ensure quick turn round of vessels by providing facilities for efficient handling of cargo
Maintain total transparency in all our transaction of the and
Continually improve our services to meet the expectations of the port users, employees
and the society
INDUSTRY PROFILE
A port is a location on a coast or shore containing one or more harbors where ships can
dock and transfer people or cargo to or from land. Port locations are selected to optimize access
to land and navigable water, for commercial demand, and for shelter from wind and waves. Ports
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with deeper water are rarer, but can handle larger, more economical ships. Since ports
throughout history handled every kind of traffic, support and storage facilities vary widely, may
extend for miles, and dominate the local economy. Some ports have an important military role.
Distribution
Ports often have cargo-handling equipment, such as cranes (operated by longshoremen)
and forklifts for use in loading ships, which may be provided by private interests or public
bodies. Often, canneries or other processing facilities will be located nearby. Some ports
feature canals, which allow ships further movement inland. Access to intermodal transportation,
such as trains and trucks, are critical to a port, so that passengers and cargo can also move further
inland beyond the port area. Ports with international traffic have customs facilities. Harbour
pilots and tugboats may maneuver large ships in tight quarters when near docks.
Types
The terms "port" and "seaport" are used for different types of port facilities that handle
ocean-going vessels, and river port is used for river traffic, such as barges and other shallow-
draft vessels. Some ports on a lake, river (fluvial port), or canal have access to a sea or ocean,
and are sometimes called "inland ports".
A fishing port is a port or harbour for landing and distributing fish. It may be a
recreational facility, but it is usually commercial. A fishing port is the only port that depends on
an ocean product, and depletion of fish may cause a fishing port to be uneconomical. In recent
decades, regulations to save fishing stock may limit the use of a fishing port, perhaps effectively
closing it.
A "dry port" is a term sometimes used to describe a yard used to place containers or
conventional bulk cargo, usually connected to a seaport by rail or road.
A warm water port is one where the water does not freeze in winter time. Because they
are available year-round, warm water ports can be of great geopolitical or economic interest.
Such settlements as VostochnyPort, Murmansk and Petropavlovsk-Kamchatsky in
Russia, Odessa in Ukraine,Kushiro in Japan and Valdez at the terminus of the Alaska
Pipeline owe their very existence to being ice-free ports.
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A seaport is further categorized as a "cruise port" or a "cargo port". Additionally, "cruise
ports" are also known as a "home port" or a "port of call". The "cargo port" is also further
categorized into a "bulk" or "break bulk port" or as a "container port".
A cruise home port is the port where cruise-ship passengers board (or embark) to start
their cruise and disembark the cruise ship at the end of their cruise. It is also where the cruise
ship's supplies are loaded for the cruise, which includes everything from fresh water and fuel to
fruits, vegetable, champagne, and any other supplies needed for the cruise. "Cruise home ports"
are a very busy place during the day the cruise ship is in port, because off-going passengers
debark their baggage and on-coming passengers board the ship in addition to all the supplies
being loaded. Currently, the Cruise Capital of the World is the Port of Miami, Florida, closely
followed behind by Port Everglades, Florida and the Port of San Juan, Puerto Rico.
A port of call is an intermediate stop for a ship on its sailing itinerary, which may
include up to half a dozen ports. At these ports, a cargo ship may take on supplies or fuel, as well
as unloading and loading cargo. But for a cruise ship, it is their premier stop where the cruise
lines take on passengers to enjoy their vacation.
Cargo ports, on the other hand, are quite different from cruise ports, because each
handles very different cargo, which has to be loaded and unloaded by very different mechanical
means. The port may handle one particular type of cargo or it may handle numerous cargoes,
such as grains, liquid fuels, liquid chemicals, wood, automobiles, etc. Such ports are known as
the "bulk" or "break bulk ports". Those ports that handle containerized cargo are known as
container ports. Most cargo ports handle all sorts of cargo, but some ports are very specific as to
what cargo they handle. Additionally, the individual cargo ports are divided into different
operating terminals which handle the different cargoes, and are operated by different companies,
also known as terminal operators or stevedores.
Milestones in the Indian Port Sector
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1870 - Calcutta (Kolkata) Port is commissioned. The port which ranks among India’s oldest and
only riverine port is situated 232 kilometres upstream from Sandheads, the longest pilotage
distance in the world.
1875 - The first wet dock in India - Sasson Dock is constructed on the Bombay harbour and is
followed by the Prince’s and Victoria Dock in 1880 and 1888 respectively, setting off the
development of Bombay (Mumbai) port.
1881 - Madras (Chennai) port is commissioned, six years after the construction of the port was
proposed by the Madras Chamber of Commerce and after the foundation stone was laid in 1875
by the Prince of Wales King Edward II.
1908 - The Indian Ports Act 1908 - the first-ever comprehensive Indian port law to be enacted
for governing the administration of all ports in India.
1925 - Carriage of Goods By Sea Act was passed, which led adoption of uniform rules declaring
minimum rights, liabilities and immunities of a common carrier to be attached to bills of lading.
1933 -Visakhapatnam (Vizag) Port is commissioned as a commodity port for export of
manganese ore. The first major port to be set up along the coastline of Andhra Pradesh.
1948 - Dock Workers (Regulation of Employment) Act 1948 was enacted and laid the basis for
creation of Dock Labour Boards at various major ports like Mumbai, Kolkata, Chennai and
Visakhapatnam.
1955 - Kandla port is commissioned. The port located on the Gujarat coast was established to
substitute the Karachi port, which became part of Pakistan following the partition of India.
1958 - Merchant Shipping Act 1958 is passed to regulate the Indian shipping industry and define
provide measure of protection to coastal shipping.
1963 -Major Ports Trust Act 1963 passed by the Indian Parliament. The Major Port Trusts Act
lays the basis for an institutional framework for creation of a port trusts for each major port.
Goa, liberated from Portuguese rule becomes an integral part of India. The Mormugao (Goa)
port, on the West Coast is declared a major port.
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1966 - Paradip port incorporated as India’s Eighth Major Port.Indian Railways launch first-ever
Container Service” providing an integrated inter-modal door-to-door service
1971 - Cochin (Kochi) port received containers for the first time from a conventional general
cargo vessel of the American President Lines (APL)
1974 - New Mangalore port is incorporate as ninth major port on India’s West Coast. The State
of Karnataka gets its first major port. Tuticorin Port is incorporated as the 10th major port,
second major port in Tamil Nadu.
1976 - Dredging Corporation of India is set up by Government of India to undertake dredging
operation.
1977 - Calcutta Port Trust commissions Haldia Dock Complex as a satellite port. The port is 104
kilometres downstream of Calcutta.
1978 -Vadinar, a satellite port of Kandla located in Jamnagar district of Gujarat, is
commissioned.
1982 - India’s first-ever State-level maritime board – Gujarat Maritime Board (GMB) is formed
to undertake comprehensive development of minor and other intermediate ports of Gujarat.
1986 - Inland Waterway Authority of India (IWAI) is constituted under the IWAI Act, entrusted
with the responsibility of developing inland waterways in India.
1989 - India’s youngest and most modern major port – Jawaharlal Nehru Port (NhavaSheva Port)
at NhavaSheva, near Mumbai is commissioned in May, 1989
1991- Coastal Regulation Zone Act passed leading to creation of Coastal Regulatory Zone
Authority requiring compliance of all Greenfield port projects.
1993 - Multimodal Transportation of Goods Act is passed with a view to rationalize customs
documentation procedures as applicable to goods being moved through multiple modes of
transportation, involving road, rail, coastal movement etc.
1995 - The Government of Tamil Nadu converts the Tamil Nadu Port Department into Tamil
Nadu Maritime Board (TMB). The Board is entrusted with the responsibility for development of
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minor ports in the state. World Bank comes out with India Port Sector - Strategy Report in
March 1995 coming out with detailed recommendatory proposals on modalities of infrastructure
financing and port reforms roadmap.
1996 - Government announces path-breaking policy guidelines for the first time opening up port
sector for both overseas and domestic private sector investors. The Maharashtra Maritime Board
(MMB) is constituted in November 1996.
1997 - Port (Laws) Amendment Act was introduced to give teeth to the new policy guidelines on
private sector participation in port sector and a Tariff Authority for Major Ports (TAMP)
established to regulate tariffs for major ports
1999 - Gujarat Infrastructure Development Act passed by Gujarat government paving way for
privatization of port sector in the State. The first-ever BOT project involving private sector port
developer P&O Ports (Australia) - NhavaSheva International Container Terminal (NSICT)
becomes operational.
2000 - The Ministry of Shipping (holding charge for ports) is formed through bifurcation
erstwhile Ministry of Surface Transport. PSA Corporation, Singapore and SICAL jointly
establish India’s second private sector Container Terminal at Tuticorin Port
2002 - India’s first-ever corporatisedEnnore Port, near Chennai becomes operational. Global
tender invited for Vallarpadam International Container Terminal, Cochin; Offshore Container
Terminal, Mumbai Port, and conversion of dry bulk terminal into a container terminal,
Jawaharlal Nehru Port Trust (JNPT). JM Baxi Group & Dubai Port Authority (DPA) consortia
signs BOT agreement (VPT) to build Container Terminal in the outer harbor of Visakhapatnam
Port.
Ports in India:
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India has been rightly called a country of sub-continental proportions. This statement is
true not only in terms of the vast geographic expanse of the country but also its maritime trade,
which serves a vast land-locked hinterland that extends into Jammu & Kashmir in the North to
landlocked countries like Bhutan, Nepal and Tibet (China) and North Eastern regions. The
vastness of India’s Northern Gangetic plains, which encompass large agriculturally prosperous
states like Madhya Pradesh, Uttar Pradesh, Rajasthan, Punjab, and Haryana coupled with long
peninsular coastline of over 6,000 kilometres – shared by nine littoral states of Gujarat,
Maharashtra, Goa, Kerala, Tamil Nadu, Andhra Pradesh, Orissa and West Bengal – form part of
a formidable natural endowment, impregnated with the possibilities of economic growth that can
push up India as a significant global maritime trading nation.
Quite remarkably, some of India’s states, given the length of their coastline and many
natural deep harbours have a maritime economic potential, which is comparable to some of the
most favoured maritime nations of the world. The latent potential however, needs to be largely
tapped in terms of building extensive coastal shipping networks, inland waterway linkages to
hinterlands, coastal ferry services, cruise industry and other marine and offshore- based
industries. As borne out by the experience of maritime development being witnessed in case of
states like Gujarat, with about a dozen bustling ports and rapidly growing cargo traffic volumes,
the potential for development of several under-developed ports along the coastline are immense,
though some of the coastal states have been not very aggressive in pushing the development of
their coastline port industry and trade. Often major ports in the state have tended to dominate
market share of trade cargo originating from the regional hinterland,leaving little market space
for the smaller regional ports. Despite significant growth of several captive minor ports, the gap
between the inherent potential for development and actual performance of regional ports still
remains to be bridged as one reviews the performance of the various major and minor ports.
Major Port Profiles
Kandla Port
JNPT, NhavaSheva
Mumbai Port
Mormugao Port
New Mangalore Port
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Cochin Port
Tuticorin Port Trust
Chennai Port
Visakhapatnam Port
Paradip Port
Kolkata
Haldia
Minor Ports in Tamil Nadu
Tamil Nadu with a coastline of 992 kilometres has three major ports of TuticorinEnnore
and Chennai and two intermediate ports of Cuddalore and Nagapattinam and seven other minor
ports, which include the ports of Rameshwaram, Pamban, Kolachal, Kanyakumari and
Valinokkam. The State is known for high level of investment under implementation in various
industrial andinfrastructure projects, which signify good prospects for port development in the
coming years. The Tamil Nadu Maritime Board (TNMB) constituted in 1995 is responsible for
development and regulation of the ports sector in the state. The TNMB is conducting a detailed
study for formulating a master plan for port development in the State.
Total traffic handled at all the minor ports in Tamil Nadu grew from 0.2 million tonnes in
1990-91 to 0.5 million tonnes in 2001-02, representing an annualised growth rate of 11%. Two
of the liquid bulk handling SBM jetties of Thirukkadaiyar and PY-3 oil fields has handled
significant cargo volumes. Currently, around 0.35 million tonnes of crude oil, produced at the
PY-3 oil fields, are loaded for coastal exports to Chennai Port for Chennai Oil Refinery, while
Thirukkadaiyar handles naphtha imports for a captive power plant.
New Port Projects
The port of Thiruchopuram was to be developed for handling of 6.5 million tonnes of
annual crude imports and 2.8 million tonnes of products exports. The project was tied to the 6.0
mtpa refinery project of Nagarjuna Oil Corporation. However, given the current glut in refining
capacity in the country, the project is unlikely to come up in the near future.
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There are some proposals for setting up of captive facilities at few locations, such as the
proposal of Chennai Petroleum Corporation Limited (CPCL) to set up a permanent jetty facility
at Nagapattinam for receiving crude oil for its Cauvery basin refinery.
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Objective of the study
Primary Objective:
To study the segment wise financial performance of Chennai Port Trust.
Secondary objectives:
To analyze and identify the trend of future income.
To study the liquidity position through various working capital related ratio.
To analyze the asset position.
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NEED OF THE STUDY
The study is conducted with the help of finance department of Chennai Port Trust which
is located at Chennai.
The scope of the study is entitled towards analyzing the current status in management of
payables using recent financial statements of the company.
One of the most fundamental facts about business is that the financial analysis of the firm
shapes its financial structure. Planning and control are the two most important ingredients to a
Successful Business. A Business plan takes most of the guess work out of Business Strategy and
Control through solid financial analysis. Financial Data provides a way to gauge where you are
in your Strategic plan, telling you where changes in your plan are necessary. Because of this,
Financial data Analysis and Management are Vitally important to running a successful business.
Therefore in order to obtain a favorable financial structure, it is necessary to study the efficiency
of the firm.
Efficiency measurements imply prior knowledge of the input’s of an organization. To
increase the level of output for a company to study the operating efficiency of the firm. The main
problem in business that of making correct estimates for the future which cannot done unless
data representing changes over a period are systematically and scientifically analyzed.
The main purpose of the study is to identify the financial strength and weakness of the firm
by properly establishing relationship between the items of the Balance Sheet, Profit and Loss
account and Budget Estimate of the company.
The Vital need for this study is to obtain the present performance of the company. The
financial performance calculated is based on each and every activity of the company.
The study helps in improving the operation efficiency of the company and also helps in
finding the future expected income of the company. It also helps thereby preventing any loss due
to wasteful activities.
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CHAPTER-2
REVIEW OF LITERATURE
Financial Performance Analysis of Selected Software Companies
HAMSALAKSHMI, M.MANICHAM, Finance India Vol. XIX No,3, September 2005
The study has been undertaken to examine and understand the management of finance
playing a crucial role in growth. It is concerned with examining the structure of liquidity
position, leverage position and profitability position of selected thirty four software companies in
India quoted at BSEfora period of five years (1997-98 to 2001-2002). The study reveals that the
liquidity position and working capital were favorable during the period of study. Regarding
turnover ratios, the efficiency in management of fixed assets and total assets must be increased.
With respect to debt financing. Return on Investment and Return On Equity proved that the
overall profitability position of selected software companies had been increasing at a moderate
rate. The developments will create large domestic demand over the next few years.
A Study on Financial Performance of The Select SarvodayaSanghams in Tamil Nadu
N.MURUGA, Finance India Vol.XXIV NO.3,September 2010
Small-Scale and cottage industries plays significant role in the development of the rural
economy. Their role in integrating the rural economy with the urban economy in an agro- based
country like India is indispensable for the overall economic development of the country. These
industries by promoting rural entrepreneurship contribute significantly to the social and
economic development through labourabsorption , income distribution, poverty eradication, and
removal of regional economic imbalances. Khadi and Village Industries, constituent of cottage
industrial sector, playa very vital role in the rural economy by accommodating the surplus labour
force in the rural areas.Khadi and village industries activities are promoted and carried out by
various institutions such as co-operative institutions, public and private charitable trusts,
individual proprietors, small-scale and cottage industrial units etc. Khadi craft,
Khadigramodyogbhavans,andSarvodayaSanghams with eight decades of dedicated service stand
out among them.
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Short-term Solvency Position
The Current ratio of all the sanghams under study are well above the conventional
standard of 2:1 indicating high liquidity. This situation is very comfortable for the creditors. But
then, it indicates that the sanghams have locked up their funds in the current assets. The quick
ratio of the sanghams were much higher than the standard except KOSS. The sanghams have
locked-up their funds in current assets, especially in inventory, which is likely to have adverse
impact on their profitability. The structure of inventory revealed that there was a huge volume of
finisheds goods indicating problem of poor demand in the market.
The absolute liquidity ratio of the sanghams shows that the cash position of these
sanghams was weak and inadequate to meet the short-term obligations. A substantial portion of
the current assets has been in: the form of trade debtors and receivables affecting the turnover of
working capital A very high degree of liquidity is bad, as idle assets earn nothing and affect
profitability.
There was also an unstable position in regard to liquidity. Hence, it is concluded that the
liquidity management in these Sarvodayasanghams was poor.
Long-term Solvency Position
All the samples sanghams have used considerable proportion of debt in their total capital
funds. The proportion varied from 65 percent to 87 percent. The proportion of debt to the total
assets has, however, declined gradually and remained around one third in the total assets (35 per
cent in KOSS and 30 Per cent in PSS). The average proportion of reserves to total capital fund
varied between 61 per cent and 74 percent. The sanghams are not capital intensive. Yet have
employed higher amount of debt capital in their business which is mostly used as operation
capital. The higher proportion of debt capital affect the profitability of the sanghams. As it has to
service the debt. Reserves constitute a higher proportion in the total capital fund. The reason is
obvious, i.e. the sanghams being trust with service motive plough back the surplus.
All the sanghams are having better interest coverage capacity (26.67 times to 13.58
times),which is much higher than the standard of six to seven times. This could be attributed to
the decreasing trend in borrowing. Thus, there is no immediate threat to the long-term solvency
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of the sanghams. The ability of the sanghams to honour the long –term obligations of the
creditors was sufficient in terms of capital funds, total assets and surplus funds. The debt service
capacity of the sanghams was also good in terms of interest coverage ratio.
Profitability Position
The gross-profit ratio of the sample sanghams has increased from 5.04 per cent to 14.00
per cent with notable fluctuations in one or two years. The operating profit ratio of the sanghams
has also- increased during the study period (from 95.78 per cent to 99.59 per cent) Similarly, the
operating expenses ratio of the sanghams reveals an increasing trend from 2.51 percent to 12.38
percent with notable fluctuations in one or two years. All these that factory and administrative
expenses are not effectively managed by the sangham there has been a considerable increase in
the operating and administrative expenses all the three sanghams during the period under review.
The gross profit ratio while remained almost constant, the net profit ratio has shown a
fluctuating trend from 1.07 per cent to 0.17 per cent, especially in the later years under study.
This indicates that the management of the sangham has largely failed to bring down or control
the operational expenses especially administrative expenses. Therefore, it can be stated that the
high cost of production, inadequate demand for K & VI products and managerial competence
are the major reasons for the low net profit ratio in all the sample sanghams.
Profitability of the sanghams in terms of return on capital employed, return on capital
fund and return on total assets has shown a fluctuating but decling trend, especially in the last
four to five years. The results of these ratios imply that these sanghams are over capitalized. In
other words, the capital and other resources are not effectively and profitability utilized. This is
mainly due to the fact that the capital employed and the total assets were in the form of
permanent assets, which are not fully utilized the manufacturing process. The slow and declining
rates of inventory and debtors turnover also added to this problem. Hence, the profitability of the
sanghams is not in proportion to quantum of capital employed and the total assets used.
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Predication of Financial Soundness
The technique score was used to predict the financial soundness of the sanghams. As per
the norm, the firm is considered as failing when score is below 1.21 and it is considered as
healthy when it is above 2.90. The financial health of the sanghams was not sound in almost all
the years under study. The values of score were between 1.23 and 2.90 in all the sanghams under
review indicating a critical and poor financial soundness. The score turned very worse especially
in the later years and it fell far below the standard prescribed, pointing the impending failure of
the sanghams. Out of the three sanghams under review, KASS has already gone in to the state of
bankruptcy, whereas the other two sanghams KOSS and PSS are likely to become bankrupt
within another two to three years if the same trend continues.
Liner programming- Product Profitability- Use of LPP
Liner programming is applied to find out the optllnum model pertaining to product IX. Four
different models are constructed to arrive at the required model, separately for textile and non-
textile products for the sample sanghams VIZ.,KASS,KOSS and PSS, which results in maximum
profit (more then the existing profit) from the existing level of operation. The models were run
with the following assumptions:\
The number of units produced and sold is same; as such there is no closing or opening
stock
The fast moving, slow moving and non-moving status of products can be identified based
on the average stock position.
The product mix can be changed by suitably modifying the proportion of product
combination
There is no possibility for bringing change in the levels of efficiency
The models run include:
Model:1 – Without introduction additional demand for products
Model:2- Dropping of non-moving and reducing the quantum of slow- moving products
Model:3- Modifying the product mix based on the customer base of product and
21
Model:4 – A variant of the third model with altered proportion of product mix.
From the results of linear programming models it is found that in the case of KASS the
model 4 for textile-products and model 3 for non-textile products are profitable . Model 3 for
both textile products and non-textile products are suitable in the case of KOSS. Model 4 both
in case of textile-products and non-textile products are profitable to the PSS. Therefore, the
models may be considered for implementation as these product mixes yield better results.
Chien Ho and Song Zhu, 2004
Investigated the effectiveness of Greek banks according to their asset size. They used in their
study if multi criteria methodology to classify Greek banks according to the return and
operating factors and shown the difference of the bank’s profitability and efficiency between
small and large banks.
Elizabeth Duncan and Elliot,2004
Showed in their study that most previous studies considering company performance
evaluation focus merely on operational efficiency and operational effectiveness which might
directly influence the survival of the company. By using an innovative two stage data
enveloped analysis model in their study, the empirical result of this study is that a company
with better efficiency does not allows mean that it has better effectiveness. A proper in the
difference of efficiency, customer service, a financial performance among Australian
financial institution.
English M and Talaring, 1992
Showed that all financial performance measures an interest margin, Return on asset and
capital adequacy all positively correlated with customer service quality score.
Generally the concept of efficiency can be regarded as the relationship between output of
system and the corresponding input used in their production. Within the financial efficiency
literature, efficiency is traded as a relative measure which deflects the derivation from
maximum attainable output for a given level of input.
22
CHAPTER-3
RESEARCH METHODOLOGY
Research methods
It denotes methods or techniques which are used by the researcher while performing the
research operations.
Research methods can be put in three groups:
1. Collection of data
2. Application of statistical techniques.
3. Evaluating the accuracy of the result obtained
Research methodology
Research methodology is the way to systematically solve the research problem. Research
methodology has many dimensions and research methods constitute a part of that.
Definition:
According to Clifford Woody, “Research comprises defining and redefining problems,
formulating hypothesis or suggested solutions calculating organizing and evaluating data,
making deductions and reaching conclusions and at last, testing the conclusions to determine
whether they fit the formulating hypothesis”
Research design for this study Analytical Research Design
Analytical research is the type of research where the research has to use facts or
information’s already available and analyzes these to make a critical evaluation of materials .
Analytical research attempts to explain why and how. It usually concerns itself with
cause-effect relationships among variables. The researcher attempts to analyze the situation and
make critical evaluation.
23
Source of information
There are numerous possible sources of data.The selection of the source of data for a particular
study is important. It depends on the research objectives. Generally the source of data is
classified into two categories
Primary data
Secondary data
The data used for this study were secondary in nature
Secondary data
Secondary data consists of information that already exists. The data collected from the
purpose of this analysis is secondary. There was no need for collecting primary data as the study
involves analysis of data available. The data has been collected through the annual report and
statement available with the company. The study has been conducted for a period of four years
starting from 2006 to 2010.
Balance sheet
Profit and loss account
Other financial statements
Tools used for data analysis
Variance analysis
Linear Regression
Overhead variance analysis
24
VARIANCE ANALYSIS:
A variance is defined as the difference between the actual amounts and the standard
amounts. Variance can be calculated for both costs and revenues. Variance analysis in
managerial accounting is basically associated with the outcome of the planned and actual results
and the effects of their differences among the routine performance of a company.
LINEAR REGRESSION:
Linear regression analyzes the relationship between two variables, X and Y. For each
subject (or experimental unit), know both X and Y. And we want to find the best straight line
through the data. In some situations, the slope and/or intercept have a scientific meaning. In other
cases, we use the linear regression line as a standard curve to find new values of X from Y, or Y
from X.
In general, the goal of linear regression is to find the line that best predicts Y from X.
linear regression does this by finding the line that minimizes the sum of the squares of the
vertical distances of the points from the line.
Note that linear regression does not test whether our data are linear. It assumes that our
data are linear, finds the slope and intercept that make a straight line best fit our data.
The trend equation is Y=a+b(x)
Where a=∑ Y/N
b=∑XY/∑X2
25
CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
4.1 Table Statement showing Operating Income for the year 2007-08(Rs. In lakhs)
Particulars 2007-08
Actual Revised Estimates
Variance Percentage Remark
Cargo handling &
Storage charges 28644.43 25769.00 2875.43 11.15 Favourable
Port & Dock 14695.87 15070.70 -744.92 -4.92 unfavourable
Railway earnings 5073.98 4575.00 498.98 10.90 Favourable
Estate rentals 2471.15 2530.00 - 58.85 -2.32 unfavourable
Container handling 11924.02 9617.43 2306.59 23.98 Favourable
Total Operating Income 62809.45 57472.13 4877.23 38.78
Source: Secondary data
4.1.1 Chart showing Operating Income for the year 2007-08
cargo handling & storage charges
Port & Dock Railway earnings Estate rentals Container handling-1000
-5000
50010001500200025003000
2875.43
-744.92
498.979999999999
-58.85
2306.59Variance
Variance
Interpretation:
With reference to the above table it indicates that the budget variance for Operating Income for cargo handling storage charges and container handling and Railway earnings are favourable and others is unfavourable. Container handling are highest variance is Rs.2875.43 and port and dock is lowest variance Rs.744.92.
26
4.2 Table Statement showing Operating Income for the year 2008-09(Rs. In lakhs)
Particulars 2008-09
Actual Revised Estimates
Variance Percentage Remark
Cargo handling & storage
charges
31891.93 29422.00 1869.93 6.35 favourable
Port & Dock 16951.27 15430.00 1521.27 9.85 Favourable
Railway earnings 4834.60 5205.00 -371.00 -7.67 Unfavourable
Estate rentals 1862.85 2537.30 -674.45 -36.20 Unfavourable
Container handling 11608.73 13631.70 -2022.97 -17.42 Unfavourable
Total Operating Income 67149.38 66226.00 322.78 -45.09
Source: Secondary data
4.2.1Chart showing Operating Income for the year 2008-09
Cargo han
dling &
storag
e charg
es
Port & Dock
Railway
earn
ings
Estate
rental
s
Container
handlin
g
-2500-2000-1500-1000
-5000
500100015002000
1869.93 1521.27
-371-674.45
-2022.97
variance
Variance
Interpretation:
With reference to the above table it indicates that the budget variance for Operating Income for cargo handling storage charges and port and dock are favourable and others is unfavourable. Cargo handling storage charges are Rs.1869.93 is highest variance and container handling is lowest variance is Rs.-2022.97
27
4.3. Table Statement showing Operating Income for the year 2009-10(Rs. In lakhs)
Particulars 2009-10
Actual Revised
Estimates
Variance Percentage Remark
Cargo handling & storage
charges
32830.75 33743.00 -912.25 -2.77 Unfavourable
Port & Dock 19597.93 17655.38 1942.55 11.00 Favourable
Railway earnings 4271.93 4962.20 -371.00 -8.68 Unfavourable
Estate rentals 1668.15 1352.18 188.35 13.92 Favourable
Container handling 13467.15 12682.24 784.91 6.18 Favourable
Total Operating Income 71835.05 76300.00 1632.66 19.71
Source: Secondary data
4.3.1 Chart showing Operating Income for the year 2009-10
-1000-500
0500
100015002000
-912.25
1942.55
-371188.35000000
0001784.91
Variance
Variance
Interpretation:
With reference to the above table it indicates that the budget variance for Operating Income for port and dock ,estate rental and container handling are favourable and others is unfavourable. Port and dock are highest is Rs.1942.55 and cargo handling are lowest variance is Rs.-912.25.
4.4 Table Statement showing Operating Income for the year 2010-11
28
(Rs. In lakhs)Particulars 2010-11
Actual Revised
Estimates
Variance Percentage Remark
Cargo handling & storage
charges
27934.17 35698.20 -7764.03 -27.78 unfavourable
Port & Dock 19110.63 20567.50 -1456.87 -7.63 Unfavourable
Railway earnings 2867.79 4282.00 -1414.21 -49.31 unfavourable
Estate rentals 1880.97 1856.50 24.47 1.30 Favourable
Container handling 16597.57 14095.80 2501.77 15.07 Favourable
Total Operating Income 68391.131 76500.00 -8108.86 -68.35
Source: Secondary data
4.4.1 Chart showing Operating Income for the year 2010-11
cargo handling,&storage
charges
Port & Dock Railway earnings Estate rentals Container handling
-8000
-6000
-4000
-2000
0
2000
4000
-7764.03
-1456.87 -1414.21
24.47
2501.77
variance
Interpretation
With reference to the above table it indicates that the budget variance for Operating Income for estate rental and container handling are favourable and others is unfavourable. Container handling are highest is Rs.2501.77 and cargo handling are lowest variance is Rs.-7764.03.
4.5 Table statement showing Operating Income for the year 2011-12
29
(Rs. In lakhs)Particulars 2011-12
Departments Actual Revised
Estimates
Variance Percentage Remark
Cargo handling, & storage
charges
22963.15 22652.00 311.15 1.37 Favourable
Port & Dock 17518.72 17900.00 -381.28 -2.17 Unfavourable
Railway earnings 2219.83 1594.00 625.83 39.26 Favourable
Estate rentals 1711.74 1930.00 -218.26 -12.75 Unfavourable
Container handling 18297.20 18132.00 165.20 0.91 Favourable
Total Operating Income 62710.64 62181.00 529.64 26.64
Source: Secondary data
4.5.1 Chart showing Operating Income for the year 2011-12
-4000
400800
311.15
-381.28
625.83
-218.26
165.2
Variance
Variance
Interpretation
With reference to the above table it indicates that the budget variance for Operating Income for cargo handling, Railway earning and container handling are favourable and others is unfavourable. Railway earning are highest is Rs.625.83 and Port and dock are lowest variance is Rs.-381.28
30
4.6 Table showing Comparative Budget Deviation Analysis for Operating Income
Department Deviation (in %)
2007-08 2008-09 2009-10 2010-11 2011-12
Cargo handling, & storage
charges
11.15 6.35 -2.77 -27.78 1.37
Port & Dock -4.92 9.85 11.00 -7.63 -2.17
Railway earnings 10.90 -7.67 -8.68 -49.31 39.26
Estate rentals -2.32 -36.20 13.92 1.30 -12.75
Container handling 23.98 -17.42 6.18 15.07 0.91
Total Operating Income 38.78 -45.09 19.71 -68.35 26.62
Source: Secondary data
4.6.1 Chart Showing Comparative Budget Deviation Analysis for Operating Income
2007-08 2008-09 2009-10 2010-11 2011-12
-50
-40
-30
-20
-10
0
10
20
30
40
cargo handling, & storage charges Port & DockRailway earningsEstate rentalsContainer handling
Interpretation
With reference to the above chart is indicates that the budget Deviation for Operating Income for during the year 2007-08 , 2009-10 and 2011-12 are favourable and others is unfavourable. 2007-08 are highest deviation 38.78% and 2010-11 are lowest deviation is Rs. -68.35.
31
LINEAR REGRESSION
To find out the future of the company
The trend equation is Y=a + b(x) …………… 1
Where a= ∑Y /N ………….…2
b= ∑ XY∑ X 2
……….……3
Table showing the Linear regression
Year Income X XY X^2
2006 43169.4 -2 -86339 4
2007 53497.2 -1 -53497 1
2008 62809.4 0 0 0
2009 67149.4 1 67149.4 1
2010 71835 2 143670 4
2011 68391.1 3 205173 9
TOTAL 366852 3 276157 19
Substitute the values of ∑X2, ∑Y, ∑XY in equation “2” & “3”
We get,
a = 366852
6
a = 61142
b = 276157
19
b = 14534.58
Equation “1” becomes,
Y= 61142 + 14534.58(X)
32
2006 2007 2008 2009 2010 2011 2012 2013 20140
20000
40000
60000
80000
100000
120000
140000
160000
Linear Regression
Income
YEAR
INC
OM
E
Charting showing the future income of the company
From the above table, income of the company for six year is taken as “Y”.
In order to project the future income of the company we can use the statistical formula for trend
equation which is given below:
Y= a+ b (X)
Here a = 61142 & b = 14534.58Finding the income for the year 2012 we can take X= 4
Y= 61142 + 14534.58(X)
Y=119280.2
Finding the income for the year 2013 we can take X= 5
Y= 61142 + 14534.58(X)
Y=133814.8
Finding the income for the year 2014 we can take X= 6
Y= 61142 + 14534.58(X)
Y=148349.4
INFERENCE
It can be inferred that the company income is estimated to 119280.2 in the year 2012 and
113814.8 in the year 2013 and 148349.4 in the year 2014.
33
OVER HEAD VARIANCEANALYSIS
Variance is defined as the difference between actual and the standard amounts.
Total expenditure variance
Fixed cost overhead variance
Variable cost overhead variance
Semi variable cost overhead variance
Total expenditure variance
Formula:
Total expenditure variance = Revised total overhead – Actual total overhead
Fixed cost overhead variance
Formula:
Fixed cost overhead variance = Budgeted fixed overhead – Actual fixed overhead
Variable cost overhead variance
Formula:
Variable cost overhead variance = Budgeted variable overhead – Actual variable overhead
Semi variable cost overhead variance
Formula:
Semi variable cost overhead variance = Budgeted semi variable overhead – Actual semi variable
overhead
34
Civil Engineering Department
Table showing the Civil Engineering Department
Year Total Expenditure
Variance
Fixed Expenditure
Variance
Variable Expenditure
Variance
Semi Variable Expenditure
Variance2006-2007 4914-3620.73
=1293.272908.2-2687.04
=221.161257.35-721.04
=536.31635.45-218.29
=417.162007-2008 5611-4628.14=
982.862996.32-3406.44=
(416.12)1344.58-1013.68
= 330.9276.1-207.53=
68.572008-2009 7610-5381.36=
2228.642965.88-4047.69=
(1081.76)1445.97-1061.87
= 384.1290.95-254.97=
35.982009-2010 6031-4771.01=
1259.994444.72-1806.18=
2638.541714.58-100.3=
1614.2825.35-11.88=
13.47
Inference
From the above table it is inferred that the total expenditure variance is good for the year 2007-
2008 (i.e) 982.86 and the fixed expenditure variance is adverse for the year 2008-2009 with
(1081.76) and the variable expenditure variance is adverse for the year 2008-2009 with (384.1)
and semi variable is good for the year 2009-2010 (i.e) 13.47.
35
Accounts Department
Table showing the Accounts Department
Year Total Expenditure
Variance
Fixed Expenditure
Variance
Variable Expenditure
Variance
Semi Variable Expenditure
Variance2006-2007 4080-3963.9=
116.11190.65-
1131.6=59.054.95-32.19=
(27.24)10.85-8.11= 2.74
2007-2008 4177-4254.8= (77.8)
1239.85-1416.15= (176.7)
64.5-68.45= (3.95)
12.35-10.03= 2.32
2008-2009 456-668.29=(105.71)
1221.2-1536.56= (315.36)
87.2-153.21= 66.01
10.03-9.59=.44
2009-2010 4972-4771.01= 200.99
1507.60-1783.63 = (276.03)
106.3-100.3= 6 12.05-11.88=017
Inference
From the above table it is inferred that the total expenditure variance is adverse for the year
2008-2009 (i.e) 105.29 and the fixed expenditure variance is adverse for the year 2008-2009 with
(315.36) and the variable expenditure variance is adverse for the year 2008-2009 with (66.01)
and semi variable is good for the year 2007-2008 (i.e) 2.32.
36
Mechanical and Electrical Department
Table showing the Mechanical and Electrical Department
Year Total Expenditure
Variance
Fixed Expenditure
Variance
Variable Expenditure
Variance
Semi Variable Expenditure
Variance2006-2007 12250-12267.63
=(11.63)6451.85-9835.04
=(3383.19)1645.8-2025.5
=(379.7) 320.45-401.07
=(80.62)2007-2008 13296-13817.98
= (521.98)9703.82-11278.25
=(1574.43)2152.13-2090.5
=(61.63)418.95-449.23
=(30.28)
2008-2009 16743-15664.35 =1078.65
10262.99-12575.63 =(2312.64)
3596.75-2673.58 =923.17
60.26-414.33 =(354.07)
2009-2010 17038-16271.49 =766.51
1101.85-13607.86 = (2506.01)
3619.2-2650.61 =(968.59)
408.35-13.02 =395.33
Inference
From the above table it is inferred that the total expenditure variance is adverse for the year
2007-2008 (i.e) 521.98 and the fixed expenditure variance is adverse for the year 2006-2007 with
(3383.19) and the variable expenditure variance is adverse for the year 2009-2010 with (968.59)
and semi variable is adverse for the year 2007-2008 (i.e) 354.07.
37
Traffic Department
Table showing the Traffic Department
Year Total Expenditure
Variance
Fixed Expenditure
Variance
Variable Expenditure
Variance
Semi Variable Expenditure
Variance2006-2007 6630.00-
6538.66=91.346210.3-6287.46
=(77.16)19.95-41.99
=(22.04)92.2-208.97 =(116.77)
2007-2008 6838-7872.22 =(1034.22)
6885.3-7639.08 =(753.78)
97.7-50.82 =46.88
95-168.75 =(73.75)
2008-2009 7914-8256.76 =(342.76)
6930.78-8093.14 =(1162.36)
97.37-40.96 =56.41
95.25-123.15 =(27.9)
2009-2010 8720-10112.23 =(1392.23)
7937.3-9763.27 =(1825.97)
116-72.57 =43.43
221.67-110.55 =111.12
Inference
From the above table it is inferred that the total expenditure variance is adverse for the year
2009-2010 (i.e) 1392.23 and the fixed expenditure variance is adverse for the year 2009-2010
with (1825.97) and the variable expenditure variance is adverse for the year 2006-2007 with
(22.04) and semi variable is adverse for the year 2007-2008 (i.e) 116.77.
38
Marine Department
Table showing the Marine Department
Year Total Expenditure Variance
Fixed Expenditure
Variance
Variable Expenditure
Variance
Semi Variable
Expenditure Variance
2006-2007 3126-2755.46 =370.54
1730.35-1691.53 =38.82
385.3-6.53 =378.77
8-3.48 =4.52
2007-2008 3709-3431.28 =277.2
1760.52-2129.08 =(368.56)
1442.03-1794.03 =(352.8)
10-10.56 =(.56)
2008-2009 4469-3939.76 =529.44
1789.15-2483.38 =(694.2)
2024.75-1409.56 =615.19
17.1-10.43 =6.67
2009-2010 8139.6661.23 =1477.77
3530.44-4768.71 =(1238.27)
2800.95-1875.3 =925.65
31.11-17.22 =13.89
Inference
From the above table it is inferred that the total expenditure variance is adverse for the year
2009-2010 (i.e) 1392.23 and the fixed expenditure variance is adverse for the year 2009-2010
with (1825.97) and the variable expenditure variance is adverse for the year 2006-2007 with
(22.04) and semi variable is adverse for the year 2007-2008 (i.e) 116.77.
39
CHAPTER-5
FINDINGS
By using the linear regression it is projected that the expected company income is
estimated to 119280.2 in the year 2012, 133814.8 in the year 2013 and 148349.4 in the
year 2014.
From the budget variance table of Operating Income for cargo handling storage charges
and container handling and Railway earnings are favourable and others is unfavourable.
Container handling are highest variance is Rs.2875.43 and port and dock is lowest
variance Rs.744.92 in the year 2007-2008
From the budget variance table of Operating Income for port and dock ,estate rental and
container handling are favourable and others is unfavourable. Port and dock are highest
is Rs.1942.55 and cargo handling are lowest variance is Rs.-912.25 in the year 2009-
2010.
From the budget variance table of Operating Income for estate rental and container
handling are favourable and others is unfavourable. Container handling are highest is
Rs.2501.77 and cargo handling are lowest variance is Rs.-7764.03 in the year 2010-2011.
From the budget Deviation table of Operating Income for during the year 2007-08 , 2009-
10 and 2011-12 are favourable and others is unfavourable. 2007-08 are highest deviation
38.78% and 2010-11 are lowest deviation is Rs. -68.35.
The total expenditure variance is good for the year 2007-2008 (i.e) 982.86 and the fixed
expenditure variance is adverse for the year 2008-2009 with (1081.76) and the variable
expenditure variance is adverse for the year 2008-2009 with (384.1) and semi variable is
good for the year 2009-2010 (i.e) 13.47 in the Civil Engineering department
40
SUGGESTIONS:
The company should have to concentrate more on diversified investment.
The company should have to concentrate in reducing the expenses in all aspects
When comparing to the last year the cash position of the company is higher so the
company should maintain the same to meet its liabilities.
When comparing to the last five years the current financial position of the company is
low so the company should improve the financial status.
The company can reinvest its retained earnings in its core business to increase its profit
and its asset position.
41
CONCLUSION
The overall position of the company when compared to the previous year is weak. The profit of
the company decreased in the current year. The liquidity position of the company is average. The
net cash and cash equivalent of the company is decreased in the current year. When compared to
the last five years the company has continuously increased the profit randomly but the current
year profit is less when compared to the previous years.
42
BIBLIOGRAPHY
Reference books:
Financial management by M.Y.KHAN & P.K.JAIN
Annual reports of the Chennai Port Trust:
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
43