SL - No 1: A Nnex Ure

FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.
K LTD
BASAVESWAR ENGNEERING COLLEGE BAGALKOTPage 1
TABLE INDEX
SL.NO
CONTENTS
PAGE
NO.
1
PART I
EXECUTIVE SUMMARY
2
PART I I
INDUSTRY PROFILE
3
PART I I I
INTRODUCTION OF COMPANY
4
PART I V
RESEARCH METHDOLOGY
OBJECTIVES OF THE STUDY
6
PART V
WORKING CAPITAL MANAGEMENT
7
PART VI
DATA ANALYSIS AND INTERPRETATION
8
PART VI I
FINDINGS
SUGGESTIONS &
CONCLUSIONS.
9
ANNEXURE
FINANCIAL STATEMENT.
BIBILOGROPHY.
FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.K LTD
INDUSTRIAL PROFILE
ABOUT THE SUGAR INDUSTRY IN INDIA:-
India has been known as the original home of sugar &
sugar cane. Indian Mythology supports the above facts ass it
contains legends showing the origin of sugarcane India is the
second largest producer of sugarcane next to BRAZIL. Presently
above 4 million Hectors land is under the sugarcane with an
average yield of 70 tons per hectors. India is the largest single
producer of the sugar including traditional trade Sugar sweeteners,
Khandsari & gur equivalent to 26 million tonnes row value followed
by Brazil in second place at 18.5 million tonnes. Even in respect of
white crystal sugar. India has ranked No.1 position in 7 out of last
10 years
HISTORY OF SUGAR INDUSTRY IN INDIA:-
Traditional sweeteners gur &
khandsary are consumed mostly by the rural population in India. In
the early 1930s nearly 2/3rd of sugarcanes production of
alternates sweeteners gur & khandsari. With better standard of
living & higher incomes, the sweetener demand has shifted to white
sugar. Currently about 1/3rd sugarcane production is utilized by
the Gur & Khandsari sectors. Being in the small scale sector, these
two sectors are completely free form controls & taxes which are
applicable to sugar sector.
The advent of the modern sugar processing
industry in India began 1930 with grant of tariff to the Indian
sugar industry, The number of sugar mills increased from 30 in
the year 1930-31 to 135 in the year 1935-36 &the production
during the same period in created form 1.20 lakh tonnes to 9.34
lakh tonnes under the dynamic leadership of private sector.
The area of planning for industrial
development began in 1950-51 & Government laid down targets of
sugar production & consumption, licensed & installed capacity,
Sugarcane production during each of Five year plan periods.
NEED FOR THE STUDY
The study has been conducted for gaining practical knowledge
about Ratio analysis of Shri Halasidhnath Sahakari Sakhar
Karkhana. Ltd.
The study is undertaken as a part of the MBA curriculum from
1st July 2010 to 20th August 2010 in the form of summer in
plant training for the fulfillment of the requirement of MBA
degree.
TITLE OF THE PROJECT
This project A Study on ANALYSIS OF FINANCIAL PERFORMANCE
ON The BASIS OF FINANCIAL RATIOS of Halsidhanath Sahakari
Sakhar Karkhana Ltd
OBJECTIVES:-
To study the profitability of
Halsidhanath Sahakari Sakhar Karkhana Ltd. Nipani.
To study the liquidity position.
To find activity turnover
To study operating efficiency of
Halsidhanath Sahakari Sakhar Karkhana Ltd Nipani.
SCOPE OF THE STUDY
The scope of the study is identified after and during the study
is conducted. The main scope of the study was to put into
practical the theoretical aspect of the study into real life work
experience. The study of Ratio analysis further the study is
based on last 5 years Annual Reports Shri Halasidhnath
Sahakari Sakhar Karkhana. Ltd.
LIMITATIONS OF THE STUDY
The analysis is limited to just five years of data study (from year
2005 to year 2009) for financial analysis.
Limited interaction with the concerned heads due to their busy
schedule.
METHDOLOGY
In preparing of this project the information collected from the
following sources.
Primary data:
The Primary data has been collected from Personal Interaction with
Finance manager Mrs.S.M.Siragave and other staff members.
Secondary data:
The major source of data for this project was collected through
Balance sheet of SSHSKL
Profit and loss account of 5 year period from 2005-2009
SAMPLING DESIGN
Sampling unit : Financial Statements.
Sampling Size : Last five years financial statements.
Tools Used: MS-Excel has been used to create a Charts and
calculation.
Findings
Gross profit and net profits are decreased during the period
of study, which indicates that firms inefficient management
in manufacturing and trading operations.
Gross profit and net profits are increased during the period
of 2004-05 which indicates that firms efficient management
Liquidity ratio of the firm is not better liquidity position in
over the five years. It shows that the firm had not sufficient
liquid assets.
The inventory of the firm in the first year has been sold very
slow. And there is an increase in the movement of the
inventories but it slightly decreased in the last year. This may
be a sign not good to the firm.
The fixed assets turnover ratio
of the firm has in 2004-05 the ratio is 0.85 and it increase in
the next 3years continuously and it again decrease in
2008-09.
The current assets turnover
ratio is increasing during the period of 2004-06 and again it
decrease in the period of 2006-07. And again increase in
next two year slithightlliy.
Direct Material cost ratio of the
firm is has less material cost during the period of 2004-05 &
2007-08 and it raised in the year of 2005-06 and 2008-09.
The cost of direct labour of the
firm in the year of 2004-05 is 4.94%and it increasing
slithightlliy up to 2007-08 and it decrease in the next year.
The cost of manufacturing
overhead of the firm in the year of 2004-05 is 5.22% where it
compare to the next 3year it increase rapidly.
SUGGESTIONS
The profit Of the Company Is not in a good Position For That
company has to Take Alternative Actions such As
Increasing in Procurement in sugarcane ,
Production, and Control in Expenses Like,
Administrative, selling Etc.
The firms have low current ratio so it should increase its
current ratio where it can meet its short term obligation
smoothly.
over the five years. So I suggested that the firm maintain
proper liquid funds like cash and bank balance.
CONCLUSION
This project of Ratio analysis in the production concern is not
merely a work of the project. But a brief knowledge and experience
of that how to analyze the financial performance of the firm. The
study undertaken has brought in to the light of the following
conclusions. According to this project I came to know that from the
analysis of financial statements it is clear that SHSSK Ltd. Have
been incurring loss during the period of study. So the firm should
focus on getting of profits in the coming years by taking care
internal as well as external factors. And with regard to resources,
the firm is take utilization of the assets properly. And also the firm
has a maintained low inventory.
INTRODUCTION OF CONCEPTS
India is developing country in which more than 70%
population is dependent upon agriculture. In India Wheat, Cotton,
Rice, Tobacco & Sugarcane are the some main crops. But the sugar
cane is one of the important agricultural productions. And or by
using the sugar We produce sugar. Which is very important item of
daily meals? Sugar is mainly used for tea, Coffee and so many food
products. It is also important raw material for bakery industry. The
Sugar is produced by so many co-operative and also private
factories. The first scheme of sugar factory in co-operative society
has been introduced byMr.G.N. Sahastrabudhe & R.N. Hiremath in
1912. But first Co-operative sugar factory started in 1918, by the
Lallubhai Samaldas & G. N. Sahastrabudhe in baramati. But due to
Lake Of sugar Cane the factory stopped its working in 1924.
After that, in co-operative field, under the guidance of
Vilnalirao patil, Dr Dhanjay Gudgil Tried to start second
co-operative sugar factory. He was started pravar -co-operative
Sugar factory in 1950 at loni this factory got success in market
therefore some other sugar Factories were going to start in Pune,
after, the late 1970 there was a rapid increase in trend of
co-operative sugar factory.
INDUSTRIAL PROFILE
ABOUT THE SUGAR INDUSTRY IN INDIA:-
India has been known as the original home of sugar &
sugar cane.indian Mythology supports the above facts as it
contains legends showing the origin of sugarcane India is the
second largest producer of sugarcane next to BRAZIL. Presently
above 4 million Hectors land is under the sugarcane with an
average yield of 70 tonnes per hectors. India is the largest single
producer of the sugar including traditional trade Sugar sweeteners,
Khandsari & gur equivalent to 26 million tonnes row value followed
by Brazil in second place at 18.5 million tonnes. Even in respect of
white crystal sugar. India has ranked No.1 position in 7 out of last
10 years
HISTORY OF SUGAR INDUSTRY IN INDIA:-
Traditional sweeteners gur &
khandsary are consumed mostly by the rural population in India. In
the early 1930s nearly 2/3rd of sugarcanes production of
alternates sweeteners gur & khandsari. With better standard of
living & higher incomes, the sweetener demand has shifted to white
sugar. Currently about 1/3rd sugarcane production is utilized by
the Gur & Khandsari sectors. Being in the small scale sector, these
two sectors are completely free form controls & taxes which are
applicable to sugar sector.
The advent of the modern sugar processing
industry in India began 1930 with grant of tariff to the Indian
sugar industry, The number of sugar mills increased from 30 in
the year 1930-31 to 135 in the year 1935-36 &the production
during the same period in created form 1.20 lakh tonnes to 9.34
lakh tonnes under the dynamic leadership of private sector.
The area of planning for industrial
development began in 1950-51 & Government laid down targets of
sugar production & consumption, licensed & installed capacity,
Sugarcane production during each of Five year plan periods.
MANUFACTURING PROCESS & TECHNOLOGY:-
Sugar (sucrose) is a carbohydrate that
occurs naturally in every fruit & vegetable is a major product of
pirotosynthesis, the process by which plants transforms the suns
energy into food. Sugar occurs in greatest quantities in sugarcane
& sugar beets form which it is separated for commercial use. The
natural sugar stored in the cal stalk or beet root is separated from
rest of the plant material through a process known as refining
For sugarcane the process of retaining is carried out in following
steps.
Pressing of sugarcane to extract the juice.
Boiling the juice unit it begins to thicken & sugar begin to
crystallize.
Spinning the crystal in a centrifuge to remote the syrup,
producing raw sugar.
Shipping the raw sugar to a refinery where it is wasted &
filtered to remove Remaining non sugar ingredient & colour.
Crystallizing, drying & packing the refined sugar.
Beet sugar processing is the similar but it is alone in one
continuous process without the raw sugar stage. The sugar beets are
washed sliced & soaked in hot water to separate the sugar containing
juice from the beet fiber. The sugar laden juice is the purified, filtered,
For the sugar industry, capacity utilization is conceptually different
from the applicable to industries in general. In depends on three
crucial factors the actual numbers of ton sugarcane crushed in a
day, the recovery rate which generally depends on the quality of
the cane & actual length of the crushing season.
Since cane is not transported to any great extent, the
quality of the cane that a factory receiver on its location & it
outside its control. The length of the crushing season also depends
upon location with the maximum being in south Indian. sugarcane
in India is used to make either sugar, Khandsari or gur . However
sugar products produced are divided into four basic categories;
Granulated, brown, liquid, sugar, and invert sugar.
PFROFILE OF THE COMPANY
Name of the factory Shree Halasidnath Sahakari
Sakhar Karkhana LTD.
Address Shree Halasidnath Sahakari
Sakhar Karkhana LTD.
Shankaranand nagar,
Nipani.
TAL:-Chikodi.
DIST:-Belgaum
PIN:-591237.
Year of Establishment APRIL-1981.
1
st
Crushing Season JANUARY-1983.
Register Number DSK/REG-2/80-81.
Register Date 22-04-1981.
Phone Number STD CODE (08338)
Chairman-220355
Office-222090
FAX Number (08338)221315
BACKGROUND & INCEPTION COMPANY.
Halsidhanath sahakari sakhar karkhana is placed 3 km
away from Nipani in north side at Shankaranandnagar , Tal:chikodi
Dist: belgaum. Halsidhanath sahakari sakhar karkhana is the
support pillar to the sugar cane producer farmes in the Nipani area.
The karkhana wa started by the some social workers in nipani
area with a view to provide an good option to the former in this
area like sugarcane.
Mr. Baburao Budihalkar was the chief promoter in this
project But, some other The foundation of karkhana building was
held on 9-11-1982. The chief guest for this function was
Shri.Rajiv Gandhi who was the prime minister of India in that time.
The Karkha started its regular working on 30-9-1989. The delay
was due to the changing political conditions in Karnataka state.
The Karkhana developed a very good rapport with the farmers in
this area and worked for their progress . So, the karkhana is
operating in entire Chikkodi taluka
andAlur,Bhairapur,Kanagala,Shippur,Karajaga,Rashing,Bad,Nangnur,
Mattiwade,Hitani,Shekinhasur,Konankeri, sadlaga thirteen(13) vill
ges in Hukkeri taluka. Only Belgum in Belgum laluka and Soudatti
in Raibag Taluka all these part of Belgaum district in the Karnataka
state. And Arjuni, Chikhali, Gorambe, Shendur, Shankarwadi,
Vandur all these eight (8) villages in Kagal taluka is a part of
Kholapur district in the Maharashtra state Thus, it will comprise of
part of Belgaum district and part of Kolhapur district, from two
adjoining states.
OBJECTIVES AND FUNCTIONS:-
The principle object of the karkhana will be to promote the
interests of all its members to attain their social and
economic betterment through self help and mutual aid in
accordance with the co-operative principles.
To prepare and implement the programme for harvesting and
transportation of sugarcane on behalf of the members from
their field to factory in supply of sugarcane to factory for
crushing and to avoid probable losses of sugar in cane.
To manufacture sugar, Jaggery and its allied by products
from the sugarcane supplied by the members and other and
to sale these products at good price.
To install the factory for manufacture sugar on large scale
basis and to take all necessary steps to run it efficiently
To install the necessary machinery required for producing of
bagasse, molasses, Press-mud etc.
To ruchase the means of transportation and to run, to give
and to take on hire basis.
To install research centers and to assist the existing research
institutions and to undertake research work helpful to
sugarcane, sugar and allied industry.
NATURE OF THE BUSINESS CARRIED:-
S.H.S.S.K.LTD. is co-operative sector firm.
It is a manufacturing company It produces sugar, molasses And
supplies sugar tp Nipani, Chikodi Taluka, Raibag Taluka, saudatti,
and Hukkeri Taluka. It operates within Karnataka as well as outside
Karnataka.
Nature of business carried Shri Halasidhanath sahakari Sakhar
Karakhana Ltd is involved in the activity of manufacturing white
crystal sugar products which is the main product. The process of
production involves conversion of.
Raw sugar cane to sugar,
Raw sugar to refined sugar, Molasses, Bagasses are its by
products.
MOLASSES: Molasses is mainly used for the manufacture of
ethyl alcohol(ethanol)yeast and cattle feed.
BAGASSES: Bagasses is usually as a combustible in the
furnaces to produce steam which in turned is used to
generate the power, it is also used as raw materials for the
production of paper and as feedstock for the cattle.
PRODUCT PROFILE
Shri Halasidhanath Sahakar Sakhari Karakhana Ltd established for
the purpose of sugar while producing the sugar some raw juice
and raw bagasses become molasses and some other by-product.
The Shri Halasidhanath Sahakar Sakhari
Karakhana Ltd is producing following product
1) Sugar
A) Medium-30
B) Small-30
C) Levy
2) Molasses
3) Compost
4) Bagasses
AREA OF OPREATION
The Shri Halasidhanath Sahakar Sakhari Karakhana Ltd has wide
range of area of operation for continuous and regular flow of sugar
cane from different authorized area within the 80 kms. Around the
spot of plant includes some region of two states from Maharashtra
and Karanataka under.
SR.NO NAME OF
TALUKA
DISTRICT NUMBER
1 Chikodi Belgaum 43
2 Hukkeri Belgaum 05
3 Raibag Belgaum 04
4 Belgaum Belgaum 01
5 Jamkhandi Baglkot 01
6 Athani Belgaum 05
7 Kagal Kholapur 09
TOTAL 68
OWNERSHIP PATTERN
Shri Halasidhanath Sahakar Sakhari Karakhana Ltd established in
the year 1981 at Hala sugar gram of chikodi Taluka. It was resolved
to collect the share of established this sugar factory in co-operative
basis. Let the late Baburao B patil Budhialkar and other social
workers and leader working in co-operative sector also come
forward to assist team in the starting this factory. It is joint
venture with share capital of Rs. 104940000 contributed by
18990 share holders. The company was established in the year
April 1981 & started the crushing in January 1983. The company is
registered under the provision of companies Act-1956.
THERE IS TOTALLY 15 BODS.
Grower member will elect 12 BODS
1 Director will be elected by the co-operative.
1 Director nominated by the principal of financial agency.
Apart from this 14 director, managing director will be
deputed by the government
PRESENT BOARD OF DIRECTORS ELECTED DIRECTOR
Shri. D.A.Chougale Managing
Director
Shri. Babasaheb .S. Saasne Chairman
Shri .Ramagounda .R. Patil Vice- Chairman
Shri .Ganesh .P. Hukkeri Director
Shri .Appasaheb .S. Jolle Director
Shri. Annasaheb .A. Patil Director
Shri. Vishawanath .S. Kamate Director
Shri. Malagounda .P. Patil Director
Shri. Anand .D. Ginde Director
Shri. Chandrakant .S. Kotiwale Director
Shri. Ramagounda .B. Patil Director
Shri. Ramagounda .Y. Patil Director
Shri. Kanthinath .G. Chougale Director
MEMBERSHIP OF SHARE CAPITAL:-
The membership of Shri Halsidhanath Sahakari
Karakana Ltd has been accepted by different individuals and firms
categorized into three classes as under
A Class involves the grower (farmers of agricukturist)
B Class involves the institute and non-grower
These are:-
1. Co-operative Societies
2. The belgaum District Central Co-operative Bank Ltd.
3. Karnataka State Agro Industrias Co-operation,
Bangalor.
C Class involves the state government of karnakata.
The above said members born their share as share capital
as
Sr
No
Member class No of Shares Share
capital
1 A Grower
B co-operative society
15,924 613.52
COMPETITORS INFORMATION
The main competitors are as follows
Doodh Ganga Shakari Sakhare Karkhane, Ltd
Crashing capacity-5500 TCD
Recovery -11.5%
Sugar production -10000 Qtls (per day).
Venkateshwer Sugar Ltd
Cashing capacity -2500 TCD
Recovery -10.5%
Sugar production -3000 qtls (par day).
Renuka Sugar Ltd
Crashing capacity -10000 TCD
Recovery -11.2%
2 Non-Grower 3065 60.06
3 C Government of
Karanataka
1
375.82
Total 18990
1049.40
Sugar production -14000 Qtls (par day).
INFRASTRUCTURAL FACILITY
CATEEN
The management provides multi-purpose cooking range,
utensils, working capital, and installation of gas equipment free
building expenditure towards purchase of furniture. Actual
expenditure towards consumption of water, electricity and gas,
annual subsidy. the rates of foodstuffs in the canteen are fixed on
no no profit basis. The workers who are working in the
production department are entitled for Tea free at cost while they
are on duty.
TRNSPORTATION
Up to 40 km. three transportation facilities is provided
to farmers rate structure of vehicles as per kilometres
Sr.
No
KM Rate per
km
Sr No KM Rate
per km
1 5 45.56 11 55 156.77
2 10 57.76 12 60 166.83
3 15 73.12 13 65 174.02
4 20 86.34 14 70 183.80
5 25 98.16 15 75 192.75
6 30 106.30 16 80 199.12
7 35 117.45 17 85 209.24
WATER
It is established the river Vedganga. there is
sufficient supply of water required for production process.
POWER
There is provision electricity from KPTCL. & company
generates its own power through boilers during crushing of
sugarcane.
ACHIEVEMENTS
In 1996-97 from South Indian Sugar Technologists
Association (SISTA) for best achievement award in cane
development.
FATURE GROWTH AND PROSPECTUS
To undertake such activities as are identical and conductive
to the development the society.
To inn coverage for other crops where sugarcane not grown.
To expand crushing capacity.
WORKFLOW MODEL (END TO END MODEL )
Heating 65 C->Lime +SO2
application
APPLICATION OF 7S MODEL
OF MC, KENSEYS
Strategic planning refer to the management processes in
organization which helps in management to determine the future
impact of change and take the currentdecisions to reach designed
future. The management literature is replace which instance of
organization which have fade stress in strategic planning but not
have been phenomenally successfully.
Consultants at the Mc.Kensys company very well
known management consultancy firm the created states develop
the 7 s frame work towards the end of 7 s diagnose the causes of
organizational problems and to formulate problems for important.
The following is the 7s frame related to the Mc. Kennys 7s frame
work
According to waterman organizational change is
not simply matter of structure although structure is a significant
variable in the management of change. Again it is not a simple
relationship between strategy and structure although strategy is
also critical as put.
In their view effective organizational change may be
understood to be a complex relationship between strategy,
structure, system and style, skill, staff, and super ordinate goals.
The framework suggests that there is a multiplicity of factors that
influence an organization and ability to change and its proper
mode of change.
STRUCTURE OF ORGNIGIATION
SHARE HOLDER
CHAIRMAN
MANAGING DIRECTOR
BOARD OF DIRECTOR
SHARE SECTION
Head: - M.T. PATIL
According to by-law, the factories authorized share
capital is Rs 20 crores. Atresent the number of shareholders is
18990 and capital collected from all the shareholders. i.e. Rs
10,49,40,000/-
The membership of Shri Halsidhanath Sahakari
Karakana Ltd has been accepted by different individuals and firms
categorized into three classes as under
A Class involves the grower (farmers of agricukturist)
B Class involves the institute and non-grower
These are:-
4. Co-operative Societies
5. The belgaum District Central Co-operative Bank Ltd.
6. Karnataka State Agro Industrias Co-operation,
Bangalor.
C Class involves the state government of karnakata.
The above said members born their share as share capital
as
TIME OFFICE LABOUR WELFARE DEPARTMENT
Sr
No
Member class No of Shares Share
capital
1 A Grower
B co-operative society
15,924 613.52
2 Non-Grower 3065 60.06
3 C Government of Karanataka 1 375.82
Total 18990
1049.40
NAME OF
THE
DEPT
PERMA
NENT
SEATION
AL
GOV
T
CONSTR
U
CTUAL
DAILY
WAGE
S
CONTR
ACT
TOTA
L
Time
Office
6 4 - - - 3 13
HEAD: - S.G. MORE.
Time office is one of the main part of the factory
because in time office all records regarding many types of
Security 13 - - 6 - 3 22
Store 6 5 - 1 - 9 21
Civil 4 - - - - - 4
Environm
ent
3 3 - 1 - 9 16
Administ
rative
15 3 1 5 - 6 30
General
A/C
10 - - - - 3 13
Cane A/C 7 2 - 1 - 6 16
Vehicle 7 4 - - - - 11
Medical 1 - - 1 - - 2
Agricultu
re
28 62 - 5 2 39 136
Engineer 90 70 - 3 3 41 207
Manufact
urer
8 99 - - 2 38 147
TOTAL 198 252 1 23 7 157 638
departments and about the details of their employees are recorded
so it must require in each and every organization.
There is no special department like HRD or Personal
management in the factory time and labour welfare office is there,
in this office there is labour welfare officer & head time keeper,
shift time keeper and wage clerk is there.
WELFARE FACILITY
To take care of all the workers, the organization will
provide the some following facility those are:-
A. Bonus is 08.33%based on the
worker salary.
B. Quarter, hospital etc. facility
and allowances
C. Canteen facility
D. Promotion facility
E. Permanent employees get one
increment every year.
F. School facility to the worker
children.
G. And medical facility are available
if any accident occurs.
PURCHASE SECTION
Purchasing plays an important and significant
role in processing industry. Purchasing is tough task, which is to be
performed very carefully. It functions on the principal of Money
saved in purchased is money gained in sales. Profit can also be
earned in purchasing process by the purchase manager by his
knowledge about the entire market.
STORE DEPARMENT:-
THE WORKING FLOW CHART SHOWN BELOW
In this factory the store department in
charge will be Shri Kadam sir under their the information will be
here.
Main Points:-
The store keeper will check the
supplier quantity and afterwards send to the respective
section wise. For ex.:- Cement, Belt etc After this the
material verification will be taken by under chief enginee
The store keeper will entry the
purchased material in a book in systematic manner.
The daily transactions will be
held in the books of power house main panel board.
Store department is just like a
godown because in department all materials which are
needed to the factory are stored.
The store house which contains
the 21 heads. They are follows:-
Heads :-
1. Oil and lubricants Ex :- Bearing
oil, Greece, etc being purpose machinery.
2. Manufacturing goods Ex:-
Chemical, sulphur etc uses of sugar processing.
3. Hardware Ex:- Nutbolt, chain,
MS bar etc uses of machinery maintenance.
4. Welding materials Ex:-
Welding rod, screen, black glass uses of welding purpose.
5. Drawing materials Ex:-
Ammonia paper, Dressing paper, etc machinery
maintenance of engineering department.
6. Electrical goods Ex:- Pressure
gauge, vacuum gauge, temperature gauge etc for
machinery maintenance.
7. Tools and tackles Ex:- Spaner,
screw driver etc.
8. Transmission of goods Ex:-
Bearing oil, oil seal, bearing glue
9. Iron and steel These are used
for machinery maintenance of engineering department.
10. Building materials Ex:-
Cement, steel, stone crystal, sand etc uses of concrete
foundation for machinery.
11. Machinery and machine spare
Ex:- Bearing, coupling, nutbolt etc.
12. Pipe and pipe fitting Ex:-
pipe, bend, flang etc
13. Furniture and fixtures Ex:-
Chairs, tables etc
14. Stationary Ex:- Log book ,
indent book, bucket etc.
15. Rubber goods Ex:- Bush,
rubber belt, wheel, ordinary material.
16. Library Ex:- Books.
17. Vehcle spare
18. Medical Ex:- Druds, tablets,
syringe, salines etc.
19. Printing Ex:- Log, book,
store recipt book etc..
20. Computer spare Ex:-
Ribbon, cartridge, pen drive etc.
SALES SECTION
The main product of H.S.S.K.Ltd is sugar and
by-Bagasses, Molasses, and press mud. These all are sold by
calling tenders. Because the factory has no right to sale these
products directly in the open market. The Office Superintendent
does this work and sales officer with the help of sugar directors
Bangalore Central Govt. fixes the selling quantity.
There are two types of sales:-
A. Free sale--------- 90% of the
produced sugar.
B. Levy sale--------10% of the
produced sugar.
The factories by-products like,
A. Bagasses-------used in paper
industry.
B. Molasses-------used in
distilleries.
C. Press-Mud-----used in
fertilizer.
SECURITY SECTION
There are 22 security guards and their function are,
1) Checking in-out persons and
vehicles.
2) Protecting and securing proper
and best use of assets of the factory.
3) Maintaining the below
mentioned registers,
A. Attendance registers.
B. Visitors register.
C. Vehicle register.
D. Workers get pass
E. Bagasse, Molasses, Press-Mud
get pass.
Cane Development Section
Department-Structure
Chief of C.D.O
For Manager
C.D.O
Assistants
AssistantC.D.O
Workers
Cane-Inspector
Field-Offices
The duty of C.D.O (Cane Development Officer) is
to develop the growth of sugarcane by providing training and
seeds to the farmers.
Cane development process:-
Providing training to the
farmers.
Providing seeds on loan basis.
Seeds are developed in the firm
and distributed to farmers.
Early detection and pests and
crop decreases and providing solution
Cane-Verities:-
Karnataka Hybrid Seeds.
Coimbatore
Coimbatore Cadlar
Coimbatore Melattur.
ENGINEERING-DEPARTMENT
HEAD:-M Umapati
It is very important department to any factory,
because engineer only have capacity to run the production
smoothly. In this factory this section has217 employee The main
functions of this section as follows,
1. To take of all the divisions like
boiler, mill, electricity etc.
2. To ensure that all machineries
are in good condition.
3. They inform board of
management about scares materials and make them to
purchase that material.
4. The repair the broken down
machines and make them to work properly.
Department-Structure
Assistant Electrical Environmental Work-Shop
Civil
Engineer Engineer Engineer Engineer
Engineer
Supervisor Supervisor Supervisor Supervisor
Supervisor
Worker Worker Worker Worker
worker
During off season their functions are,
1. Maintenance of all the
machineries currently.
2. Overhauling of the machineries.
3. Machinery erection.
PRODUCTION DEPARTMENT
The Chief Engineer, chief
chemist and Civil engineer from the structure of the
production
The chief engineers work is to
technical and mechanical works and improve them to
increase the production capacity.
The chief chemist work is to
instruct how where & when to use chemical in the production
process.
The civil engineers work is to
plan where to situate the machineries and also they advise
useful suggestions to make the production very easy and
smooth.
COMPARATIVE STUDY OF PRODUCTION OF SUGAR
Sr.
No
YEAR SHARE
CAPITAL
SUGARCANE
CRUSHING
SUGAR
PRODUCTION
RECOVERY
RATE
Cane Yard:- In this collect
sugarcane from the farmers.
Cane weight:- In this they
measure sugarcane including vehicle after unloading the
cane. they measure vehicle weight and they deduct that
weight in the total weight. Thus they get the actual weight of
the cane. They prepare 3 weight receipts with the help of
computers, one goes to cane a/c, another goes to farmers
and third one goes to transfot office.
A/C (In MT) (In qtl)
1
2004-05 837.13 141430.852
151480 10.71
2
2005-06 972.40 210556.428
239950 11.40
3
2006-07 1049.40 241130.000
275240 11.41
4
2007-08 1125.40 113345.000
132920 11.82
Cane Carrier:- The unloaded
cane is put down in carrier and carrier is driven by the motor
It is concerned to cane cutter.
Cane cutter:- there are two
types cane cutter,
1) 1
st
cutter---In this cane cuts
into 12 to 20 inches.
2) 2
nd
cutter---In this cane cuts
into 12 to 20 inches.
After cutting cane is forwarded in fibriser. The fidrised cane
is taken into mill section.
Mill Section: - In this section,
the cane is squeezed. Whatever the quantity of juice quizzed
in the mill is pumped into clarification house. At this time
they get the by- product called bagasse.
Dorr:- The juice has come by-
product like press mud and bagasse before it is taken stored
in the Dorr. After storing in the Dorr these are separated and
move down ward.
Evaporators:- After
classification of the juice stored in Dorr. Then it is taken in
to Evaporators to evaporate that the water evaporation juice
is taken into pan section.
Pan Section:- In this section
again syrup (juice) is boiled or heated by the steam. In this
section they remove water, which is mixed in the syrup.
After that make crystals.
Centrifugals:- This is last
process in producing sugar in this section factory gets a
main by-product molasses and stores it in storage tank.
They produce mainly 3 types of
sugar,
1) L30: This is big crystal.
2) L30: This is medium crystal.
3) L20: This is small crystal.
GODOWN
After packing the sugar in the gunny, they are stored in the
godown. In the godown they maintain register consisting the
records of stock, dispatch and closing balance.Factory has 4 large
God owns and their capacity is given below,
STORE
HOUSE
CSPSCITY (In qtl bags)
2 1lakhs
2 70000
SKILL
Skill is the distinctive capabilities or competence of the
organization as a whole, Skills developed are,
Product quality awareness.
Time management.
Result orientation.
Dedication.
This type of training also known as job instruction training is
the most commonly used method. Under this method, the
individual is placed on a regular job though the skill necessary to
perform that job. The trainee learns under the supervision of a
qualified worker of instructor. On-the-job training has the
advantage of giving firsthand knowledge and experience under the
actual working condition. While the trainee learns how to perform
job, he is also a regular worker rendering the services for which he
paid. The problem of transfer of trainee is also minimized as the
person learns on-the job training methods includes job rotations,
coaching job instruction or training through step-by-step and
committee assignment.
STYLE
Style includes two things, one management style and
organizational culture. Management style the way in which the
managerial personnel behave and collectively spend their time to
achieve organizational goals, it consists the way of lending.
motivating and the style of leadership in the management. Here
they usually use authoritative style means top to down decision
making parameter pertaining to day-to-day operation but they
allow subordinates to participate in the decisions affecting their
interest and ask their suggestions for their decisions. This makes
organization more effective.
SRTATEGY
Strategy means the actions which a company plans in to or
anticipates of changes in its external environment. In other words it
is the determination of basis long term objectives or courses of
action and allocation of resources to achieve the organizational
goals. They are as follows,
Waste Elimination S.H.S.S.K. Ltd.
Produces molasses and sell it to liquor industries. And it uses
biogases boilers in order to generate energy for factory during
crushing process.
Cost Reduction: They are
reducing the intake of employees and reducing the number of
employees in order to reduce cost. They are not depending on
K.P.T.C.L. for power while crushing process is carrying on. They
produce energy by boilers.
SYSTEM
A system includes formal and informal
procedures that support the strategy and structure. In other words,
it is the processes and flows that shown how an company gets its
day-to-day things done. This includes the procedures and the
routines that will characterized how important work to be done. i.e.
financial system, hiring, promotion and performance appraisal
system and information system etc.
PRODUCTION PROCESS:-
Pressing of sugarcane to extract
the juice.
Boiling the juice until it begins
to thicken and sugar begins to crystallizes.
Spinning the crystals in a
centrifuge to remove the syrup, producing raw
sugar.
Shipping the raw sugar to a
refinery where it is washed and filtered to remove
remaining non-sugar ingredients and color crystallizing,
and drying packing the refined sugar.
INVENTORY CONTROL SYSTEM
Here in stored department the inventory control used FIFO.
Here the method FIFO is appropriate because the sugarcane is not
a durable commodity it is better to crush the sugarcane freshly. It
is not stored for a long time because it turned in too dry sooner.
STAFF
Staffs refer to the people in the enterprise and their
socialization into the socialiseational culture. Productive high
performing employees are the companies
most valuable assets. The company follows a progressive policy
taking keen interest in its personnel and well beings and progress,
which builds a strong sense of belongingness.
Technical Department:-
A. Machine shop and maintenance
quality assurance.
B. Laboratory
C. Tool room
D. Manufacturing engineering
departments
E. Production planning and control
F. Research and development
Non-Technical
Department:-
A. Administration
B. Clerical
DUTIES AND RESPONSIBILITIES:-
Technical Staff:-
Operators/Technicians:-
Carry out the work as per the
instruction and job allocation.
In process inspection wherever
applicable.
Maintenance in charge:-
1. Planning of preventing
maintenance.
2. Attending breaks down
maintenance.
3. Taking corrective action for
reduce break down.
4. Planning spares and raising
purchase intend.
5. Maintaining the quality record.
SHARED VALUE
There are values shares by the members of the organization.
It is the super ordinate goal that is centrally responsible for
providing a core mission to the organization Used as an umbrella,
which embraces all the other managerial activities. In short it says
what does the organization stands for and what is believes in. A
devoted and sincere contribution to the mankind through the
various business activities of the company and compromise to the
quality.
1. Continues growth is the main
force behind the achievement of S.H.S.S.K ltd.
2. Customer satisfaction through
quality services.
3. Quick decision and execution
with speed.
SWOT ANNALYSIS OF THE COMPANY
STRENGHTS
Produces good quality of sugar.
Its near the river of the
Vedganga so there is availability of the sufficient water.
SHSSK is not dependent of
KPTCL for supply of power while production is carrying on the
generator through rower.
WEAKNESS:-
Since it is agro based industry
monsoon effects its production.
Lack of good administration.
Lack of infrastructure.
Backward technology and
complexity
OPPORTUNITIES:-
Possibility of willing
co-operation by bank.
Arrangement for KPTCL grid.
THREATS:-
Competition from the domestic
player.
Due to unfavorable Govt. Polices,
factory has to sell sugar below its production cost.
.
NEED FOR THE STUDY
The study has been conducted for gaining practical knowledge
about Ratio analysis of Shri Halasidhnath Sahakari Sakhar
Karkhana. Ltd.
The study is undertaken as a part of the MBA curriculum from
1st July 2010 to 20th August 2010 in the form of summer in
plant training for the fulfillment of the requirement of MBA
degree.
TITLE OF THE PROJECT
This project A Study on RATIO ANALYSIS of Halsidhanath
Sahakari Sakhar Karkhana Ltd is considered as an analytical
research
OBJECTIVES
To study the profitability of
Halsidhanath Sahakari Sakhar Karkhana Ltd. Nipani.
To study the liquidity position.
To find activity turnover
To study operating efficiency of
Halsidhanath Sahakari Sakhar Karkhana Ltd Nipani.
SCOPE OF THE STUDY
The scope of the study is identified after and during the study
is conducted. The main scope of the study was to put into
practical the theoretical aspect of the study into real life work
experience. The study of Ratio analysis further the study is
based on last 5 years Annual Reports Shri Halasidhnath
Sahakari Sakhar Karkhana. Ltd.
LIMITATIONS OF THE STUDY
The study duration (summer in plant) is short.
The analysis is limited to just five years of data study (from year
2005 to year 2009) for financial analysis.
Limited interaction with the concerned heads due to their busy
schedule.
METHDOLOGY
In preparing of this project the information collected from the
following sources.
Primary data:
The Primary data has been collected from Personal Interaction with
Finance manager Mrs.S.M.Siragave and other staff members.
Secondary data:
The major source of data for this project was collected through
Balance sheet of SSHSKL
Profit and loss account of 5 year period from 2005-2009
SAMPLING DESIGN
Sampling unit : Financial Statements.
Sampling Size : Last five years financial statements.
Tools Used: MS-Excel has been used for calculations.
THEORETICAL FRAME WORK
INTRODCTION:- Finance is life blood of the business. The
financial management is the study about the process of procuring
and judicious use of financial resources is a view to maximize the
value of the firm. There by the value of the owners i.e. the
example of equity share holders in a company is maximized. The
traditional view of financial management looks into the following
function that a finance manager of a business firm will perform.
1. Arrangement of short-term and
long-term funds from the financial institutions.
2. Mobilization of funds through
financial instruments like equity shares, bond Preference shares,
debentures etc.
3. Orientation of finance with the
accounting function and compliance of legal provisions relating
to funds procurement, use and distribution. With increase in
complexity of modern business situation, the role of the
financial manager is not just confirmed to procurement of
funds, but his area of functioning is extended to judicious and
efficient use of funds available to the firm, keeping in view the
objectives of the firm and expectations of providers of funds.
DIFINATION:-
Financial Management has been defined differently by different
scholars.
1) Howard and Upton:-
Financial Management is the application of the planning
and control function to the finance functions
2) Bringham:- Financial
Management is an area of financial decision making
harmonizing, individual motives and enterprise goals
MEANING OF RATIOS
Financial Statement contains a wealth of information which, if
properly analyzed and interpreted, can provide valuable insights
into a firms performance and position. Analysis Soft financial
statements is of interest to (short terms well as long term)
investors, security analysts, managers, and others financial
statement analysis may be done for a variety of purpose, which
may range from a simple analysis of the short -term liquidity
position of the firm to a comprehensive assessment of the
strengths and weaknesses of the firm in various areas.
The principal tool of financial statement
analysis is financial ratio analysis. An absolute figure does not
convey much meaning. Ti, there for, become necessary to study a
certain figure in relation to some other relevant figure to arrive at
certain conclusion e.g. If we give the figure of only gross profit
earned by certain firm, we cannot say
whether the gross profit is heavy, reasonable or sufficient
for this purpose we must take into consideration the figure of sales.
Thus, the gross profit to is required to be studied in relation to
the sales to decide the percentage of gross profit to sale on the
basis of percentage we can conclude whether the gross profit
earned is reasonable or otherwise. Thus the relationship between
the two figures expressed mathematically is called a ratio.
OBJECTIVES OF RATIO ANALYSIS:-
The study of financial statement
of any corporate will help in knowing its present and future
earning capacity.
The study of financial resources
can help in knowing whether a company can pay its long-term
or short-term liabilities.
Its very use full to know how
much working capital is employed in business and same
effectively used.
Its use full to measure earning
capacity and its comparison to other competitive units.
Help full to known marginal
efficiency.
Use full to future planning.
INTERPRETATION OF RATIOS
The benefit of the ratio analysis depends to great extent
upon their correct interpretation. Interpretation requires
considerable ability on the part of the analyst. He has to decide
whether the relationship disclosed by the ratio is satisfactory or not.
He has to base his decision on experience, or on comparison may
be interpreted in any one of the following ways.
1) BASED ON SINGLE RATIO
AND GROUP RATIOS:-
The interpretation may be based on individual ratio e.g. If current
ratio persistently falls and goes below one, it can be interpreted as
an indication of short-term insolvency. However, one cannot get
the position corrected by
studying individual ratio in isolation. It is therefore a common
practice to study
and interpret a set of several related ratios e.g. for short-term
solvency both the
ratios, whose significance is not fully understood , are made more
meaningful
by the computing and study of additional relevant ratios.
2) COMPARISON OVERTIME:-
Ratio analysis is primarily useful for studying trends,
indicating rise, decline or stability over a period of time. For this
purpose, ratios by themselves are of no particular significance. For
reveling such trends, the same ratio or a group of ratios is studied
over period of years. Thus the movements in the ratios, rather than
the ratios themselves, are important.
3) INTER-FIRM
COMPARISON:-
Ratios of undertakings are compared with the respective
ratios of other firm in the same industry and with the industry on
average An immense benefit is likely to from such comparison as
the concerns similarly situated are as a matter of fact , to sail in
the same boat.
PROCEDURE OF
ANALYSIS:-
First or all the depth, object and extent of analysis must be
determined, so that necessary information can collect. The analysis
is required to go through various financial statements of the
business and collect other required information from the
management. The analysis is required to rearrange the data given
in the financial statements in a manner, which will help the to
analysis the statements easily and conveniently. After analyzing the
statement the interpretation is made and the conclusions are drawn.
TYPES OF RATIOS:-
Classification of ratios is done in two ways.
A. According to nature of items.
B. According to purpose of the
function.
A) According to nature of items:-
1) Balance Sheet Ratios:- The
ratios exhibiting the relationship between two item or
group of items in the balance sheet e.r. Relation between
current Assets and Current Liabilities.
2) Revenue Statement or Profit and
loss account ratios:- The ratios disclosing the relationship
between two items or group of items in the profit and loss
account it. Relationship between Sales and Gross profit.
3) Inter Statement or Composite
Ratio:- The ratios indicating the relationship of certain
items in the balance sheet with some figures in the
revenue statements i.e. Net Profit and Capital or Sales
and Fixed Assets.
B) Functional Classification:-
Liquidity Ratios; - These ratios
measure the liquid position of the enterprise i.e. whether
the current assets to pay current liabilities as and when
they mature. Thus, these ratios indicates short-term
solvency of the business
Leverage Ratios; - They
indicate the relative use of debt and equity in financing
assets of the firm. The extent, to which the practice of
trading on equity can be carried on safety, can be known
through these ratios.
Activity Ratios:- These ratios
measure the efficiency in the employment of funds in the
business operations. They respect the companys level of
activities in relation to its turnover.
Profitability Ratios:- There
ratios measure overall performance. And profits earning
Capacity of the business. They reveal the effect of the
business transaction on the profit position of the
enterprise.
PROFITABILITY RATIO:-
1) Gross Profit Ratio:- This ratio
reflects the efficiency with which the management produces
each unit product. The ratio is calculated as under:
Gross Profit Ratio= Profit
Sales
It is the ratio which is most commonly employed by accountants
for comparing the earnings of business for one period with those
of other or earnings of one concern with of another in the same
industry. It indicates the degree to which selling prices goods per
unit may decline without in losses on operations for the firm.
2) Net Profit Ratio:-Net Profit is that proportion of net sales
which remains to the owners or the shareholders after all costs.
Charges and expenses including income-tax have been deducted.
It is calculated as under.
Net profit (after tax)
Sales
It differs from the ratio of operating profit is to net sales in as
much as it is calculated after adding non-operating incomes, like
interest, dividends on investment etc. To operating profit and
deducting non-operating expenses such as loss on sale of old
assets, provisions for legal damages etc. from such profits.
LIQUIDITY/SOLVENCY RATIO:-
1) Current Ratio or working
capital Ratio or 2:1 Ratio:- It is a ratio of current assets to
current liabilities. The ratio is calculated by dividing the current
assets by the current liabilities.
Current Assets
Current liabilities
Certain authorities have suggested that in order to ensure solvency
of a concern. Current assets should be at least twice the liabilities
and therefore. his ration is known as 2:1 ratio.
2) Liquid Ratio or Acid Test Ratio
or Quick Ratio:- The current Ratio fails to serve as a realistic
guide to the solvency of the concern, as the major portion on
the current assets may comprise of such assets which cannot
be converted immediately cash (e.g. stock) to meet the
immediate liabilities. It this ratio is 1:1, it is considered that all
claims will be met when they arise.
Quick / Liquid Assets
Current liabilities
ACTIVITY RATIO
1) Inventory Turnover Ratio:- The
term Inventory Turnover refers to the number of times in a
year inventories are sold and replaced.
Inventory Turnover Ratio:- Cost of Goods Sold or sales
Average Inventory at cost
It is Indication of the velocity with which merchandize moves
through the business. This is a test of inventory to discover
possible trouble in the form of over stocking or over valuation. It
assists the financial manager in evaluating inventory policy.
2) Operating Ratio:- The ratio
shows the percentage of net sales i.e. observed by the cost of
goods sold operating. Naturally higher the ratio, the less
favorable it is. Because it would leave a small margin to meet
interest, dividends and other corporate needs.
Operating Ratio = Cost Goods Sold + Operating Expenses
Net Sales
3) Fixed Assets Turnover
Ratio:-The ratio measures the efficiency in the utilization of
fixed assets. This ratio indicates whether the fixed assets are
being fully unitized A high ratio is an index of the vestment in
fixed asset. Normally standard ratio taken as five times.
Fixed Assets Turnover Ratio = Sales
Net Fixed Assets
4) Total Assets Turnover Ratio:-
The ratio is arrived at by dividing sales by the total assets i.e.
Sales
Total Assets
The ratio indicates the sales generated per rupee of investment in
total assets. Thus, it aims to point out the efficiency or inefficiency
in the used of total assets or capital employed. Increase in ratio
indicates that more revenue is generated per rupee of total
investment in assets.
LEAVERGE RATIO:-
1) Debt Equity Ratio:- It measure
of the relative claims of creditors and owners against the assets
of the firm.
Total Debts
Net worth owners Equity
The term total debt includes all debts i. e. long term, short
term mortgages. Bills, debentures etc. whereas the term net worth
means equity share capital, reserves and surplus i.e. proprietors.
Funds or equity 1:1 ratio is acceptable.
2) Fixed Assets to worth Ratio:-
Fixed assets
Net worth
It indicates that the company has used short term funds for
acquiring fixed assets, which policy is not desirable. To the extent
fixed assets exceed the amount of capital and reserves, the
working capital are depleted. When the amount of proprietors
fund exceeds the value of fixed Assets i.e. when the percentage is
less than 100, a part of the working capital is supplies by the
shareholders. Provided that there are no other non-current assets.
DATA ANALI YSI SAND
INTERPRETATION
1) PROFITABILITY RATIO:-
Gross Profit
Gross Profit Ratio = X 100
Sales
YEAR GROSS PROFIT SALES GROSS PROFIT
RATIO
2004-05
7,00,15,301.58
301002504.06
23.26
2005-06
41317359.41
302304793.75
13.66
2006-07
3,79,03,469.81
337985566.07
11.02
2007-08
6,09,91,621.57
349546301.04
17.44
2008-09
5,44,14,256.14
430543494.12
12.63
INTERPRETATION:-
The Gross-Profit Margin ratio of SHSSKL has ups and down
in these five years period. The gross profit measures the relation
between the sales and profits. The gross-profit ratio in the year
2004-05 is 23.26 and next year 2005-06 is 13.66 and in 2006-07
its 11.22 then in 2008its become 17.44 and in 2008-09 it is 12.63.
C) Net Profit Margin Ratio:-
Net Profit
Net Profit Ratio = X 100
Sales
YEAR NET PROFIT SALES GROSS-NET
RATIO
2004-05 14569011.39 301002504.06 4.84
2005-06 4053781.26 302304793.75 1.34
2006-07 1179916.79 337985566.07 0.34
2007-08 2178816.70 349546301.04 0.62
2008-09 1653143.88 430543494.12 0.38
INTERPRETATION
The net profit is the indicative of the managements
ability to operate the business with sufficient success. In the above
bar diagram it shows that the net profit ratio of SHSSKL has
increased 4.84 in 2004-05 but it decreased in the next years 1.34
in 2004-05 and it again decreased in 2006-07.then it increased
0.62 and it again decreased 0.38.in 2008-09.
LIQUIDITY RATIO
CURRENT RATIO:-
Current Ratio = Current Assets
Current Liabilities
YEAR Current Assets Current
Liabilities
RATIO
2004-05
308321871.3 454294589.7 0.67
2005-06
265422636.1 563620481.6 0.47
2006-07
875637598.7 623087336.2 1.40
2007-08
446111012.4 565628200.9 0.78
2008-09
471836449.8 542837550.5 0.86
S
INTERPRETATION:-
An ideal current ratio is 2: 1 Thus 2 is the
considered as a safe margin from the above diagram it determines
that the firm has safe margin in1.4 2006-07 and in 2004-06 it has
0.67&0.47 moreover it has not safe margin 2007-09 e.i to 0.78&
0.86
Liquidity Ratio
Liquidity Ratio = Liquid Assets
Liquid Liabilities
Liquid Assets= Current Assets-Inventories
Liquid-Liabilities = Current Liabilities - Bank-overdraft
Years Liquid assets Liquid
Liabilities
Ratio
2004-2005 110024781.8 454294589.7 0.24
2005-2006 37885949.4 563620481.6 0.067
2006-2007 496655612.5 623087336.2 0.79
2007-2008 102195141.3 565628200.9 0.18
2008-2009 163116368.5 542837550.5 0.30
INTERPRETATION:-
Usually, a high acid test ratio is an indication of that firm
s better liquidity position. From the above table it determines that
the firm has 0.24 &0.067 in the year 2004-06 and it increased 0.79
in 2006-07 and it again decreased 0.18 in 2007-08 then again
raised0.30 in 2008-09
ACTIVITY RATIO
INVENTORY TURN-OVER RATIO
Sales
Inventory Turn-Over ratio=
Average Inventory
Opening-Stock + Closing-Stock
Average Inventory =
2
Years Average Inventory Sales Inventory
Turn-Over ratio
2004-2005
192353685.5
301002504.06
1.56
INTERPRETATION: -
This means that the inventory in the first year has been sold1.56
very slow in 2004-05 And it again increase in 2005-08 e.i 1.28,
1.04, 1.02.and in last year it again decreased 1.4 in 2008-09
FIXED ASSETS TURN-OVER
RATIO
Sales
2005-2006 234674943.5
302304793.75
1.28
2006-2007 324789674.5
337985566.07
1.04
2007-2008 342085995.0
349546301.04
1.02
2008-2009 305513910.0
430543494.12
1.40
Fixed assets turn-over ratio =
Fixed-Assets
INTERPRETATION:-
The ratio indicates the extent to which the investment in
fixed assets contributed towards to sales. As the figure shows, in
2004-05 the fixed assets turnover ratio is 0.85 and it increase in
the next 3years continuously with 0.83, 0.92, 0.94. And it again
decreases in 2008-09 e.i to 0.66.
YEARS SALES FIXED-ASSETS FIXED ASSETS
TURN-OVER
RATIO
2004-05 301002504.06 350064970.91 0.85
2005-06 302304793.75 361712835.66 0.83
2006-07 337985566.07 363487965.66 0.92
2007-08 349546301.04 371470849.66 0.94
2008-09 430543494.12 647506096.70 0.66
CURRENT ASSETS
TURN-OVER RATIO
Sales
Current assets turn-over ratio =
Current
Assets
INTERPRETATION:-
The current assets turnover ratio measures that how quickly
the short term obligations can be met. In the following graph it is
shown that there is increasing0.97, 1.13 in 2004-06 current assets
YEARS SALES CURRENT
ASSETS
CURRENT ASSETS
TURN-OVER
RATIO
2004-2005 301002504.06 308321871.3 0.97
2005-2006 302304793.75 265422636.1 1.13
2006-2007 337985566.07 875637598.7 0.38
2007-2008 349546301.04 446111012.4 0.78
2008-2009 430543494.12 471836449.8 0.91
turnover ratio. And it falls0.38 in 2006-07 and it increase
slightly0.78 to 0.91 in 2007-09.
Operating-Efficiency Ratio:-
1) Direct Material cost to sales
= Direct Material cost *100
Net-sales
INTERPRETATION:- Direct Material cost to sales should be low
enough to leave portion of sales to give fair return to investors
from the above table show that 66.57 & 64.23 in the year 2004-05
YEARS
Direct
Material
SALES
Percentage (%)
2004-2005 200389076.8 301002504.06 66.57
2005-2006 219224160.5 302304793.75 72.51
2006-2007 241453980.32 337985566.07 71.43
2007-2008 224546979.08 349546301.04 64.23
2008-2009 309403524.5 430543494.12 71.86
and 2007-08 it give the fair to the investors where as72.51, 71.43
and 71.86. 2005-07and 2008-09 are not up to mark able .
2) Direct Labour cost to sales
= Direct Labour cost *100
Net-sales
INTERPRETATION:- From the above table shows that the cost of
direct labour of the firm in the year of 2004-05 is 4.94% where it
compare to the next 3year it increase5.60, 8.18 & 9.97. Slithightlliy.
And it again decreases in the year of 2008-09. It shows that the
firm efficient utilized the labour in the year of 2004-05 and
2005-06.
Factory Overhead to Sales:-
YEARS
Direct
Labour
SALES
Percentage (%)
2004-2005 14885365.90 301002504.06 4.94
2005-2006 16958271.40 302304793.75 5.60
2006-2007 27661900.24 337985566.07 8.18
2007-2008 34862365.60 349546301.04 9.97
2008-2009 35562670.05 430543494.12 8.25
3) Factory Overhead to Sales =
Factory Overhead cost *100
Net-sales
INTERPRETATION: - From the above table shows that the cost of
manufacturing overhead of the firm in the year of 2004-05 is
5.22% where it compare to the next 3year it increase 8.46,9.16,&
9.16 in 2005-08. And it again decreases 6.79 in the year of
2008-09.
YEARS
Factory
Overhead
Net-SALES
Percentage (%)
2004-2005 15712759.79 301002504.06 5.22
2005-2006 25581554.35 302304793.75 8.46
2006-2007 30966215.70 337985566.07 9.16
2007-2008 32038895.00 349546301.04 9.16
2008-2009 29269482.40 430543494.12 6.79
Findings
Gross profit and net profits are decreased during the period
of study, which indicates that firms inefficient management
Gross profit and net profits are increased during the period
of 2004-05 which indicates that firms efficient management
over the five years. It shows that the firm had not sufficient
liquid assets.
The inventory of the firm in the first year has been sold very
slow. And there is an increase in the movement of the
inventories but it slightly decreased in the last year. This may
be a sign not good to the firm.
The fixed assets turnover ratio
of the firm has in 2004-05 the ratio is 0.85 and it increase in
the next 3years continuously and it again decrease in
2008-09.
The current assets turnover
ratio is increasing during the period of 2004-06 and again it
decrease in the period of 2006-07. And again increase in
next two year slithightlliy.
Direct Material cost ratio of the
firm is has less material cost during the period of 2004-05 &
2007-08 and it raised in the year of 2005-06 and 2008-09.
The cost of direct labour of the
firm in the year of 2004-05 is 4.94%and it increasing
slithightlliy up to 2007-08 and it decrease in the next year.
The cost of manufacturing
overhead of the firm in the year of 2004-05 is 5.22% where it
compare to the next 3year it increase rapidly.
SUGGESTIONS
The profit Of the Company Is not in a good Position For That
company has to Take Alternative Actions such As
Increasing in Procurement in sugarcane ,
Production, and Control in Expenses Like,
Administrative, selling Etc.
The firms have low current ratio so it should increase its
current ratio where it can meet its short term obligation
smoothly.
over the five years. So I suggested that the firm maintain
proper liquid funds like cash and bank balance.
It should enhance its employees efficiency, more training
needed to its employees in order to increase its production
capacity and minimize mistakes while performing the tasks,
also more safety precaution need to implement to the
employees who directly working on sugar production
process
CONCLUSION
This project of Ratio analysis in the production concern is not
merely a work of the project. But a brief knowledge and experience
of that how to analyze the financial performance of the firm. The
study undertaken has brought in to the light of the following
conclusions. According to this project I came to know that from the
analysis of financial statements it is clear that SHSSK Ltd. Have
been incurring loss during the period of study. So the firm should
focus on getting of profits in the coming years by taking care
internal as well as external factors. And with regard to resources,
the firm is take utilization of the assets properly. And also the firm
has a maintained low inventory.
PROVISIONAL BALANCE SHEET AS AT 31
st
MARCH, 2005
LIABILITY AMOUNT ASSETS AMOUNT
SOURCES OF FUNDS FIXED ASSETS
Share capital 88846018.59 Gross block 350064970.
TRADING AND PROFIT & LOSS ACCOUNT AS ON 31-3-2005
09
Reserves and surplus 274191573.3
4
Less:
Depreciation
Net Block 350064970.
09
Investment 6975000.00
CURRENT LIABILITIES CURRENT ASSETS
Working capital 279908387.0
8
Inventories 198297089.
91
Statuary deposits 4508406.18 Cash in hand 374639.72
Deposit 7217637.93 Cash at bank 2879292.96
Suspense 14373128.04 Advances 60423970.9
1
Sundries 84028.25 Other assets 46346877.8
0
Other Sundries 3239794.41 Profit &loss
Account
152726340.
15
loan funds 118309456.4
7
Cane bills and other
payables
26653751.52
TOTAL 818088181.8
1
TOTAL 818088181.
81
Expenditure AMOUNT Incomes AMOUNT
Opening stock 201471850.0
0
Sugar sales 270160956.1
6
Other sales 30841547.90
Cost of production 212750813.4
8
Closing stock 183235461.0
0
Gross profit 70015301.58
Total 484237965.0
6
Total
484237965.0
6
Establishment charges 7247138.80 By gross profit 70015301.58
Travelling expenses 661534.60 Other income 2071499.26
Exp .on vehicle 762054.92
Printing and
stationery
575316.06
Meetings &AGM
Expenses
299139.58
Interest &Insurance
charges
35111966.31
Govt Tax & Other 121490.67
Social Expenses 198765.78
Rent rates & Taxes 1257774.92
Other management
Expenses
1001874.80
Bonus for the year
2005
1600000.00
Depreciation 8680733.00
st
MARCH, 2006
Net profit 14569011.39
TOTAL 72086800.84 TOTAL 72086800.84
Share capital 97239684.00 Gross block 361712835.6
6
0
Less:
Depreciation
LOAN FUNDS Net Block 361712835.6
6
Loans Investment 587259.00
6
Inventories 303308585.5
3
Deposit 7539531.49 Cash at bank 16549209.47
suspense 29044436.06 Advances 49015066.50
Sundries 120071494.2
9
Other assets 37433717.42
Other Sundries 9966024.46 Profit &loss
Account
161706973.2
3
Cane bills and other
payables
65201661.09
TOTAL 931031316.3
3
TOTAL 931031316.3
3
0
0
5
4
0
Total 589195771.7
5
Total 589195771.7
5
Printing and 683769.76
st
MARCH, 2007
stationery
Meetings &AGM
Expenses
385579.30
Interest &Insurance
charges
29539180.87
Other management
Exp
605143.20
Bonus for the year
2006
1700000.00
Bonus & Incentive
paid- 05
1618790.00
TOTAL 53288905.10 TOTAL 53288905.10
Share capital 104940110.0
0
Gross block 363487965.6
6
Reserves and surplus 272212433.6 Less: ------------
2 Depreciation ---
6
Loans Investment 587259.00
Working capital 3261620.57 Inventories 378981986.2
8
Other funds 13747634.18 Cash at bank 3238097.38
Deposit payable 8619351.89 Advances 47810043.43
Advance from debtors 6317241.93 Receivables 45279858.83
Provisions for
expenses
164768060.1
0
Profit &loss
Account
160527056.4
4
Other liability 2037609.50
Creditor 101250338.1
3
TOTAL 1000239879.
90
TOTAL 1000239879.
90
0
5
6
0
Total 700673937.0
7
Total 700673937.0
7
Administration
Employee cost
10876604.35 By gross profit 37903469.81
Administration
Expenses
7705246.66 Other income 11835306.34
Financial Expenses 29337549.35 Other Misc
income
1401824.00
TOTAL 51140600.15 TOTAL 51140600.15
st
MARCH, 2008
Share capital 110288173.0
0
Gross block 371470849.6
6
0
Less:
Depreciation
------------
---------
6
Loans 26729775.00 INVESTMENT 1087259.00
0
4
Statuary deposits 160307605.1
8
Cash in hand 1446247.76
Suspense 7820327.58 Cash at bank 5289323.68
Deposit 8237656.89 Advances 44575300.80
Sundries 120856075.8
0
other assets 50884269.05
Other sundries 61753564.01 Profit &loss 158348240.3
Account 4
Cane bills and Other
payable
73676864.17 investment 1087259.00
Creditor ------------
-------
TOTAL 977017361.4
3
TOTAL 977017361.4
3
0
4
7
Work in progress 1893561.00
Gross profit 60991621.57 Closing stock 321483619.0
0
Total 672923481.0
4
Total 672923481.0
4
st
MARCH, 2009
Printing and
stationery
834305.94
Meetings &AGM
Expenses
374096.00
Interest &Insurance
charges
42150121.77
Other management
Exp
3513408.60
Bonus for the year
2007
------------
---
Bonus & Incentive
paid- 07
3873572.00
TOTAL 71357052.57 TOTAL 71357052.57
Share capital 110870645.0 Gross block 647506096.7
0 0
Reserves and surplus 537014300
.20
Less:
Depreciation
------------
---------
0
Loans 85915406.30 INVESTMENT 600259.00
0
7
Suspense 3444808.93 Cash at bank 61187786.16
Deposit 8613186.089 Advances 49701553.25
sundries 121366173.1
3
other assets 51695225.44
Other sundries 65532462.01 Profit &loss
Account
156695096.4
6
Cane bills and Other
payable
32326689.23
Creditor ------------
-------
TOTAL 977017361.4
3
TOTAL 977017361.4
3
0
2
8
Work in progress -----------
Gross profit 54414256.14 Closing stock 287650640.0
0
Total 718194134.1
2
Total 718194134.1
2
Printing and
stationery
672343.25
Meetings &AGM
Expenses
484440.00
Interest &Insurance
charges
43032479.08
Other management
Exp
1367794.55
Bonus & Incentive 4700000.00
2008-09
Bonus & Incentive
paid
5015552.80
TOTAL 78730836,38 TOTAL 78730836,38

SL - No 1: A Nnex Ure

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FINANCIAL RATIO ANALYSIS OF SRI HALSIDHNATH S.S.

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