Professional Documents
Culture Documents
Working Capital Management: A Project Report
Working Capital Management: A Project Report
ON
Acknowledgement
Executive Summary
10
Chapter 1
29
Data Analysis
30
Findings
58
59
Cash Management
61
62
Observations
73
Conclusion
76
Suggestions
77
Chapter 2
References
78
Appendix
A
Cash Management
108
Financial Statement
112
116
117
118
119
Some Calculations
120
79
Working capital is not measurable by only current assets & current liabilities
but there are some other factors also that have an influence on the working
capital. From the analysis of the components of working capital, it was found
that the organization is utilizing its funds properly, the inventory is managed
efficiently and the organization is able to get sufficient short term financing.
It is clear that the working capital of IFFCO is in sound position. The
suggestions
can
be
made
in
the
management
of
inventory
by
The Cash Management System at IFFCO is very sound and efficient. It has
enabled the organization to manage its funds in a proper manner resulting
in better utilization and availability of funds in cash deficit periods. IFFCO
has a tie up with banks such as
providing IFFCO
with
facilities
as
cash
management
services,
that
affects
the
Working
Capital
requirements
of
the
(IFFCO)
was
registered
on
through
their
own
The
numbers
of
In 1993, IFFCO had drawn up a major expansion programme of all the four
plants under overall aegis of IFFCO VISION 2000. The expansion projects at
Aonla, Kalol, Phulpur and Kandla have been completed on schedule. Thus all
the projects conceived as part of Vision 2000 have been realised without
time or cost overruns. All the production units of IFFCO have established a
reputation for excellence and quality.
A new growth path has been chalked out to realise newer dreams and
greater
heights
through
Vision
2010
which
is
presently
under
implementation. As part of the new vision, IFFCO has acquired fertiliser unit
at Paradeep in Orissa in September 2005. As a result of these expansion
projects and acquisition, IFFCO's annual capacity has been increased to 3.69
million tonnes of Urea and NPK/DAP equivalent to 1.71 million tonnes of
P2O5.
Mission
IFFCO's mission is "to enable Indian farmers to prosper through timely
supply of reliable, high quality agricultural inputs and services in an
environmentally sustainable manner and to undertake other activities to
improve their welfare."
Vision
Vision 2010
Encouraged by the success of Vision 2000, IFFCO has charted on a new
course of action to realise a fresh set of dreams. A high powered committee
has been constituted to steer the organisation through this Road Map.
Activities being actively pursued through the strategy are:
Phosphoric Acid plant
Foray into Power Sector to set up a 500 MW power project
Ammonia Plant for supplies to Kandla Unit
IFFCO Kisan Bazar
IFFCO Bank
Multi Commodity Exchange
Acquisition of Fertilizer Plants
Nellore Fertilizer Project
Agri business
The Approach
To achieve their mission, IFFCO as a cooperative society, undertakes several
activities covering a broad spectrum of areas to promote welfare of member
cooperatives and farmers. The activities envisaged to be covered are
exhaustively defined in IFFCOs Bye-laws.
The Commitment
The thirst for ever improving the services to farmers and member
co-operatives is insatiable, commitment to quality is insurmountable and
harnessing of mother earths' bounty to drive hunger away from India in an
ecologically sustainable manner is the prime mission.
10
UREA
NPK / DAP
TOTAL
2006-07
2007-08
2008-09
37.87
39.63
40.68
32.26
28.84
31
70.13
68.47
71.68
11
2008-09
58.69
53.89
112.58
2007-08
54.29
38.95
93.24
UREA
Kalol
2008-09
2007-08
Production
Capacity
Utilization
Production
Capacity
Utilization
(Lakh MT)
(percent)
(Lakh MT)
(percent)
5.60
102.80
5.45
100.00
12
6.63
8.40
9.87
10.18
40.68
120.30
97.20
114.10
117.80
110.30
6.30
9.24
8.76
9.89
39.63
114.30
106.90
101.30
114.40
107.40
17.94
13.06
31.00
74.30
68.00
71.40
20.18
8.66
28.84
83.50
45.10
66.50
TOTAL PRODUCTION
71.68
89.20
68.47
85.30
2004-05
2005-06
2006-07
2007-08
2008-09
Capacity
Capacity Production Utilization
(%)
12208
11304.9
93.4
12288.4
11332.9
94.5
12290.4
11524.9
95.6
12290.4
10902.8
95.2
12290.4
10900.2
95.2
P2O5
Capacity
Production
5480.4
5459.6
5736.3
5874.6
5892.3
4038.4
4202.6
4440
3714.3
3417.3
Capacity
Utilization
(%)
75.5
78.5
78.5
64.7
58.5
Sector
N
Capacity Production
Capacity
NP/NPKs SSP
(capacity: As on 1.11.20
(production: 2008
April-Ma
(Figures in '000 tonne nutri
P2O5
Production
Total
NP/NPK
SSP
To
13
3591.5
2973.2
386.7
Private
6030.3
4829.9
2860.1
Cooperative
3423.4
3133.1
1712.8
Total
13045.2
10900.2
4959.6
386.7
1225 4085.1
-
1712.8
1225 6184.6
s
191.7
1903.9
916.3
3011.9
191
405.4 230
-
916
405.4 341
2004-2005
(as on
1.11.2004)
2005-2006
(as on
1.11.2005)
2006-2007
(as on
1.11.2006)
2007-2008
(as on
1.11.2007)
2008-2009
(as on
1.11.2008)
2009-2010
(as on
1.11.2009)
Public
-
Sectors
Cooperative Private
10
Total
10
12229
-21
5427
1
7474.5
-
4231.5 14227.9
3
25933.9
3
12208
52
5428
243
7474.5
350
4231.5 14230.9
35
25936.9
385
12260
30
5671
204
7824.5
-
4231.5 14265.9
15
26321.9
15
12290
-
5875
17
7824.5
-
4231.5 14280.9
55
26336.9
55
12290
755
5892
293
7824.5
-
4231.5 14335.9
350
470
26391.9
820
13045
6185
7824.5
4581.5 14805.9
27211.9
BIO FERTILISERS
Bio-fertilisers are capable of fixing atmospheric nitrogen when suitable
crops are inoculated with them. Bio-fertilisers are low cost, effective,
14
friendly
and
renewable
source
of
plant
nutrients
to
Year
Production
2004-05
2005-06
2006-07
2007-08
2008-09
10479
11752.4
15871
20111.1
24455
( in tonnes)
Dispatches
10427.6
11357.6
15745
20100
24400
UREA
NPK
DAP
MOP
M.R.P.
4830
7197
7637
6295
9350
4455
15
and
the
IFFCO
Consortium
has
taken
over
the
16
17
to
co-operative
societies
through
Societys
another
18
Farm
Forestry
Development
Cooperative,
multi-state
Rs 100 million
Employees of IFFCO
Rs 10 million
Rs 90 million
TOTAL
Rs 200 million
19
sustainable
manner
is
the
prime
mission.
farmers.
20
Subsidiaries of IFFCO
Kisan International Trading FZE (KIT)
Kisan International Trading FZE (KIT) was set up as a wholly owned
subsidiary of the Society in Dubai in April 2005. KIT has become a
leading international trading organisation, which handles the import
and export of various fertilisers and fertiliser Raw Materials and
Intermediates.
IFFCO Kisan Bazar Ltd.
IFFCO Kisan Bazar Ltd. (IKBL) was incorporated on 26th February, 2004
as
IFFCOs
wholly
owned
subsidiary
company
for
inter-alia
on
31st
March
2009
2008
21
888.27
750.13
Investment in Business Associates
25.73
20.44
Total
914.00
770.57
Financial Performance
As per its tradition, the Society has again exhibited an impressive financial
performance in all its major parameters, namely, Revenue Growth and
Resource Utilisation, testifying to the robustness of its Corporate Strategy of
creating multiple drivers of growth in spite of constraints in the availability
of raw materials, the Global Economic Meltdown and inordinate delays in
receipt of large subsidy amounts from the Government of India. This was
possible due to higher production, sales volume and improvement in
operating efficiencies.
The Society achieved the highest ever sales turnover of Rs 32,933 Crore.
This represents an increase of 170 per cent over the previous year. While,
the sales volume of fertiliser material increased by 20 per cent to 112.58
lakh MT fertiliser during 2008-09, as against 93.24 lakh MT in the previous
year, the major increase in the sales turnover was on account of substantial
increase in the commodity prices. The performance is even more satisfying
when viewed in the light of the challenging business environment of the
fertiliser industry.
1560
1072
Cash Used in Investing activities
(6578)
(970)
2007-08
22
4844
(190)
Decrease in cash and cash equivalents
(174)
(88)
Corporate Governance
The
Society
has
consistently
followed
transparent,
democratic
and
Financial Ratings
The Societys excellent credit ratings with bankers and rating agencies allows
access to short term funds including foreign currency borrowings at
competitive rates. Ratings assigned by different Rating Agencies to the
Society were as under:
CRISIL Ratings
Rating for Governance and Value Creation (GVC) Practices of
IFFCO
CRISIL has, assigned a GVC Level 2 rating to IFFCO. This rating
indicates that the capability of the Society with respect to wealth
creation for all its stakeholders, while adopting sound corporate
governance practices, is high.
Rating for the Rs. 100 crore Commercial Paper Programme of
IFFCO
CRISIL has assigned a P1+ (pronounced P One Plus) rating to
IFFCOs Rs.100 Crore Commercial Paper Programme. This rating
23
FITCH Ratings
Rating for the Rs. 100 crore Commercial Paper Programmes of
IFFCO
FITCH Ratings has assigned a National Short Term Rating of F1+
(Ind)to IFFCOs Rs. 100 crore Commercial Paper Programme. This
rating indicates that the degree of safety with regard to timely
payment of interest and principal on the instrument is Very Strong.
Rating
for
Long
Term
Borrowing
Programme
of
IFFCO
CARE Ratings
PR 1+ (P One Plus) rating to IFFCOs Working Capital facilities/Short
Term Loans having tenure of up to one year.
CARE AA (Double A) rating to External Commercial Borrowings and
other existing long term borrowings having tenure of over one year.
24
Value Added
Value Added is the wealth which an enterprise has been able to create
through the collective effort of capital, management and employees. In
economic terms, value added is the market price of the output of an
enterprise less the price of the goods and services acquired by transfer.
Value Added can provide a useful measure in gauging performance and
activity of the company.
25
(ii).
Assets retired from active use and held for disposal are shown
separately under Fixed Assets at lower of net book value and
estimated realisable value.
during
construction
period
up
to
the
date
of
the
26
27
on
pro-rata
basis
from
the
date
of
obligation,
unless
the
probability
of
outflow
in
settlement is remote.
(c) Reimbursement expected in respect of expenditure required to
settle a provision is recognised only when it is virtually certain that
the reimbursement will be received.
(d) Contingent assets are neither recognised nor disclosed in the
financial statements.
10.
Operating Leases
28
Pre-Paid Expenses
29
CHAPTER 1
Working Capital
Management
30
Average Inventory
Cost of Goods sold (COGS) / 365
(in Rs. Crores)
Year
Average
Inventory
COGS
DIO (number of
days)
2004-05
2005-06
2006-07
2007-08
2008-09
976.03
1225.57
1901.79
1930.52
1654.23
6809.48
9166.48
9578.09
11336.77
31496.75
52.317
48.801
72.473
62.155
19.170
Analysis
The smaller the number of days of inventory outstanding, the more efficient
a company is. IFFCO day inventory outstanding is around 19 days for the
year 2008-09 which is very good. Inventory is held for less time and less
money is tied up in inventory. Instead, money is freed up for things like
research and development, marketing or even share buybacks and dividend
payments.
31
Days Sales
Outstanding
(DSO)
Year
Avg. A/c
Receivables
(in crores)
Net Sales
(in Crores)
DSO (number of
days)
2004-05
2005-06
2006-07
2007-08
2008-09
397.025
399.495
418.04
387.72
410.495
7396.87
9942.93
10330.11
12162.82
32933.30
19.591
14.665
14.771
11.635
4.550
Analysis
Days Sales Outstanding (DSO) looks at the number of days needed to collect
on sales and involves Accounts Receivables. While cash-only sales have a
DSO of zero, people do use credit extended by the company, so this number
is going to be positive.
Most of sales of IFFCO are on cash basis and sales to large institutions
only are on credit basis. The DSO for the year 2008-09 is 4.550, which is
32
Year
Average
Accounts Payable
COGS
DPO (number of
days)
2004-05
2005-06
2006-07
2007-08
2008-09
728.425
934.165
913.425
833.87
1664.225
6809.48
9166.48
9578.09
11336.77
31496.75
39.045
37.198
34.809
26.847
19.286
Analysis
This involves the company's payment of its own bills or Accounts Payables. If
this can be maximized, the company holds onto cash longer, maximizing its
investment potential.
33
DIO +
DSO
Year
DIO
DSO
2004-05
2005-06
2006-07
2007-08
2008-09
52.317
48.801
72.473
62.155
19.170
19.591
14.665
14.771
11.635
4.550
(in Days)
GOC
71.908
63.466
87.244
73.791
23.720
Analysis
Gross operating cycle is a tool which measures the total number of days
from the day the purchases are made or the stock arrives to the day all the
34
Cash
Conversion
Cycle (CCC)
DIO +
DPO
DSO
Year
DIO
DSO
DPO
2004-05
2005-06
2006-07
2007-08
2008-09
52.317
48.801
72.473
62.155
19.170
19.591
14.665
14.771
11.635
4.550
39.045
37.198
34.809
26.847
19.286
(in Days)
CCC
32.863
26.269
52.435
46.943
4.434
35
Analysis
The cash conversion cycle (CCC) measures how fast a company can convert
cash on hand into even more cash on hand. The CCC does this by following
the cash as it is first converted into inventory and accounts payable (AP),
through sales and accounts receivable (AR), and then back into cash.
IFFCO CCC is of around 4.4 days in the year 2008-09. This means that the
company is able to generate the cash within this period after making it
payments of its own bills. Since it is very low, it is good for the company.
COGS
Average
Inventory
Inventory
Turnover Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
6809.48
9166.48
9578.09
11336.77
31496.75
976.03
1225.57
1901.79
1930.52
1654.23
6.977
7.479
5.036
5.872
19.040
36
Analysis
The inventory turnover ratio at IFFCO is 19.040 in 2008-09. It means that
that the company is turning its inventory of finished goods into sales 19.040
times in a year and is in good position. There had been a decrease in the
inventory turnover ratio from 7.479 in 2005-06 to 5.036 in 2006-07. During
this period, there was a large amount of inventory in the company because
of the purchase of the Paradeep production plant. During all other period,
the turnover is always increasing.
Inventory
Working Capital
X 100
Year
Inventory
(in Crores)
Working Capital
(in Crores)
Inventory to
Working Capital
Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
931.50
1519.64
2283.94
1577.10
1731.36
1499.14
3387.39
4880.05
4404.17
4490.10
62.136
44.862
46.802
35.809
38.559
37
Analysis
The Inventory to Working Capital Ratio measures how well the company is
able to generate cash using working capital at its current inventory level. An
increasing inventory to working capital ratio is generally a negative sign,
showing the company may be having operational problems. If a company has
too much working capital invested in inventory, they may have difficulty
having enough working capital to make payments on short term liabilities
and accounts payable.
Inventory to working capital ratio for IFFCO has been decreasing consistently
with increasing very marginally in the year 2006-07 and in 2008-09.
Inventory
Current Assets
X 100
Year
Inventory
(in Crores)
Current Assets
(in Crores)
Inventory to
Current Assets
Ratio
2004-05
2005-06
2006-07
2007-08
931.50
1519.64
2283.94
1577.10
2603.98
4748.98
6081.28
5775.74
35.772
31.999
37.557
27.306
38
1731.36
7672.99
22.564
Analysis
The Inventory to Current Assets Ratio measures that how much percentage
of current assets is formed by the inventories. An increasing inventory to
current assets ratio is a negative sign. It means that more & more percentage
of current assets is being constituted by the inventories. This indicates poor
operational efficiency of the organization. Also it shows that the funds
invested in current assets to meet obligations on a short notice are actually
illiquid to some extent and it may be difficult to convert them into cash
immediately. Normally, less than 50 % of current assets are treated as
average position of inventory.
IFFCO has shown a decrease in this ratio over the past years, which
indicates a GOOD inventory position for IFFCO and, the ratio was never been
above 38%.
Inventory
Sales
X 100
Year
Inventory
(in Crores)
Sales
(in Crores)
Inventory to Sales
Ratio
2004-05
931.50
7396.87
12.593
39
1519.64
2283.94
1577.10
1731.36
9942.93
10330.11
12162.82
32933.30
15.284
22.110
12.967
5.257
Analysis
The Inventory to Sales Ratio measures the percentage of inventory the
company currently has on hand to support the current amount of sales. An
increasing Inventory to Sales ratio is generally a negative sign, showing the
company may be having trouble keeping inventory down and/or Net Sales
have slowed, and can sometimes indicate larger financial problems the
company may be facing.
As per the data of IFFCO, this ratio had increased initially till the year
2006-07 but is falling down consistently after that time, which is a POSITIVE
sign indicating good movement of inventory.
Net Sales
Average Accounts
Receivable
40
Net Sales
(in Crores)
Avg. A/c
Receivables (in
Crores)
Debtor Turnover
Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
7396.87
9942.93
10330.11
12162.82
32933.30
397.03
399.50
418.04
387.72
410.50
18.631
24.888
24.711
31.370
80.227
Analysis
This ratio is also known as Accounts Receivable Turnover Ratio and
measures the number of times Accounts Receivables were collected during
the year. This is also a measure of how well the company collects sales on
credit from its customers.
IFFCO have a high and increasing Accounts Receivable Turnover which is
a Positive Sign. The company is able to turnover its debtors 80.227 times in
a year.
360
Debtor Turnover
Ratio
41
Sales
(in Crores)
2004-05
2005-06
2006-07
2007-08
2008-09
7396.87
9942.93
10330.11
12162.82
32933.30
Average
Debtors
(in Crores)
397.03
399.50
418.04
387.72
410.50
Debtor
Turnover
Ratio
18.631
24.888
24.711
31.370
80.227
Average
Collection
Period
19.323
14.465
14.569
11.476
4.487
Analysis
The Average Collection Period represents the average number of days for
which a firm takes to collect accounts receivables. It measures the quantity
of debtors.
The Average Collection Period for IFFCO was around 4.5 days in 2008-09.
This is extremely good considering the fact that IFFCO is a fertilizer company,
and functions as a cooperative. The maximum collection period during this
five year period is around 17 days in the year 2005-06 and is decreasing
since then.
Debtors
X 100
42
Current Assets
Year
Debtors
(in Crores)
Current Assets
(in Crores)
Debtors to Current
Assets Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
324.59
474.40
361.68
413.76
407.23
2603.98
4748.98
6081.28
5775.74
7672.99
12.465
9.990
5.947
7.164
5.307
Analysis
Debtors to Current Assets Ratio indicates the position of debtors in total
current assets. This ratio is calculated by debtors with current assets. If
debtors are average or less than average, it indicates proper realization of
debtors. On the other hand, if debtors are very heavy in respect of other
current assets, it indicates poor recovery of the company.
As Per the table, the Debtors to Current Assets Ratio for IFFCO decreased
from 2004-05 to 2006-07 and then increased in the year 2007-08 and then
decreasing onwards. The decrease is a healthy sign showing proper
realization of debts in 2008-09.
43
Debtors
Working Capital
X 100
Year
Debtors
(in Crores)
Working Capital
(in Crores)
Debtors to
Working Capital
Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
324.59
474.40
361.68
413.76
407.23
1499.14
3387.39
4880.05
4404.17
4490.10
21.652
14.005
7.411
9.395
9.070
Analysis
Working capital is directly related with the position of debtors. If debtors are
lower as compared to Working Capital, then it indicates proper and smooth
utilization of working capital. But on the other hand, the amount of debtor is
very large in that condition, Working capital blocked and operational
efficiency is directly affected.
From the data, it can be seen that this ratio for IFFCO has been decreasing
which is good for the company. There was a increment in the year 2007-08
due to increase in the debtors but again it continued to decrease.
44
Debt
Total Equity
Year
Debt
(in Crores)
Equity
(in Crores)
Debt to Equity
Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
647.09
5035.39
6486.12
6775.64
12802.78
3301.15
3555.38
3641.84
3688.66
3958.87
0.196
1.416
1.781
1.837
3.234
Analysis
The ratio shows the extent to which debt financing has been used in the
business. A high ratio means that claims of creditors are greater than those
of owners. A high level of debt introduces inflexibility in the firms
operations due to the increasing interference and pressure from creditors. A
low debt-equity ratio implies a greater claim of owners than capital.
At IFFCO, this ratio is increasing every year. It means that increase in debt
of the company is more than the increase in the equity. In the year 2008-09,
it increased to 3.234 from 1.837 in the year 2007-08 because of the major
increase in the short term loans from the banks.
45
Current Assets
Current Liabilities
Year
Current Assets
(in Crores)
Current
Liabilities
(in Crores)
Current Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
2603.98
4748.98
6081.28
5775.74
7672.99
1104.84
1361.58
1201.23
1371.57
3182.89
2.357
3.488
5.063
4.211
2.411
Analysis
Working Capital Ratio is used to analyze the short term solvency of the
company. Usually a ratio of 2:1 is considered to be the best current ratio.
Higher the ratio, greater is the ability of the firm to meet its short term
obligations.
46
Year
Current
Assets
(in
Crores)
Inventories
(in Crores)
2004-05
2005-06
2006-07
2007-08
2008-09
2603.98
4748.98
6081.28
5775.74
7672.99
931.50
1519.64
2283.94
1577.10
1731.36
Quick
Assets
(in
Crores)
1672.48
3229.34
3797.34
4198.64
5941.63
Current
Liabilities
(in Crores)
Quick Ratio
1104.84
1361.58
1201.23
1371.57
3182.89
1.514
2.372
3.161
3.061
1.867
Analysis
47
Cash
=
X 100
Current Assets
Year
Cash
(in Crores)
Current Assets
(in Crores)
Cash to Current
Asset Ratio (%)
2004-05
2005-06
2006-07
2007-08
2008-09
199.10
98.22
330.84
243.32
69.63
2603.98
4748.98
6081.28
5775.74
7672.99
7.646
2.068
5.440
4.213
0.907
48
Analysis
The Cash to Current Assets Ratio indicates what percentage of current assets
is comprised of cash at hand and cash at bank.
Upon analyzing the data of the past 5 years for IFFCO it was observed that
the cash balances formed only a very small percentage of the current assets.
In the last 5 years, the highest was 7.65% in the year 2004-05 after which it
is decreasing. The ratio had variations in this period an in the year 2008-09,
it was 0.91%. This is a POSITIVE SIGN as it shows effective utilization of the
funds of the organization and there is not much of idle cash with the
organization.
Sales
Current Assets
Year
Sales
(in Crores)
Current Assets
(in Crores)
Sales to Current
Asset Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
7396.87
9942.93
10330.11
12162.82
32933.30
2603.98
4748.98
6081.28
5775.74
7672.99
2.841
2.094
1.699
2.106
4.292
49
Analysis
The Sales to Current Assets Ratio basically measures how well a company is
making use of its assets in generating sales. An increasing sale to current
assets ratio is a POSITIVE SIGN as it indicates that the company has a healthy
production scenario because of which most of inventory is being converted
into sales for the company.
IFFCO has shown a decrease in its sales to current assets ratio from
2004-05 to 2006-07 after which it is constantly increasing which implies
that the company is doing well and inventory is not being held up at any
stage in the production process.
Year
Sales
=
Sales
(in Crores)
Working Capital
(in Crores)
Working Capital
Turnover Ratio
50
7396.87
9942.93
10330.11
12162.82
32933.30
1580.36
2443.27
4133.72
4642.11
4447.14
4.680
4.070
2.499
2.620
7.406
Analysis
IFFCO has a high working capital turnover ratio.
A high or increasing Working Capital Turnover is usually a Positive Sign,
showing the company is better able to generate sales from its Working
Capital. The company has been able to gain more Net Sales with the smaller
amount of Working Capital in 2008-09 as compared to that in 2007-08. The
working capital turnover had been decreasing from 4.860 in the year
2004-05 to 2.499 in 2006-07 but it increasing since then to 7.406 in the
year 2008-09.
Sales
=
51
Sales
(in Crores)
Working Capital
(in Crores)
Sales to Working
Capital Ratio
2004-05
2005-06
2006-07
2007-08
2008-09
7396.87
9942.93
10330.11
12162.82
32933.30
1580.36
2443.27
4133.72
4642.11
4447.14
4.680
4.070
2.499
2.620
7.406
Analysis
The Sales to Working Capital ratio measures how well the company's working
capital is being used to generate sales. Working Capital represents the
major items typically closely tied to sales, and each item will directly affect
this ratio. Increasing Sales to Working Capital ratio is usually a positive sign,
indicating the company is more able to use its working capital to generate
sales.
The sales to working capital ratio has been increasing from 2007-08 for
IFFCO which is good as it implies that the company is generating more &
more sales and is able to utilize its working capital more efficiently with the
passing years. The decrease of the ratio in the previous years was due to the
increase in inventory holding which was required for the Paradeep production plant.
Profitability Ratios
1. Return on Assets
Return on Assets
52
Year
Profit After
Tax
(in
Crores)
Average Total
Assets
(in crores)
ROA
2004-05
2005-06
2006-07
2007-08
2008-09
319.64
341.35
175.02
257.59
360.01
4449.22
6709.33
9855.58
10830.24
14151.13
0.072
0.051
0.018
0.024
0.025
Analysis
ROA is an indicator of how profitable a company is relative to its total
assets. The ROA figure gives investors an idea of how effectively the
company is converting the money it has to invest into net income. The
higher the ROA number, the better, because the company is earning more
money on less investment.
At IFFCO, the ROA is increasing from the year 2006-07 which is good for
the company. Earlier it was decreasing as there was increase in the assets
due to purchase of the production plants.
2. Return on Equity
Return on
Equity (ROE)
53
Year
Average Equity
(in crores)
ROE
2004-05
2005-06
2006-07
2007-08
2008-09
319.64
341.35
175.02
257.59
360.01
3205.37
3428.27
3598.61
3665.25
3823.77
0.100
0.100
0.049
0.070
0.094
Analysis
Return on Equity measures the rate of return on the ownership interest of
the common stock owners. It measures a firm's efficiency at generating
profits from every unit of shareholders' equity. ROE shows how well a
company uses investment funds to generate earnings growth.
From the data, IFFCO ROE had always been good. There was a decrease in
the year 2006-07 due to the purchase of Paradeep plant which increased the
purchases of the organization.
54
Year
Average Capital
Employed
(in crores)
ROCE
2004-05
2005-06
2006-07
2007-08
2008-09
470.92
481.90
251.25
380.52
441.95
4449.22
6709.33
9855.58
10830.24
14151.13
0.1058
0.0718
0.0255
0.0351
0.0312
Analysis
ROCE is used to prove the value the business gains from its assets and
liabilities. It basically can be used to show how much a business is gaining
for its assets, or how much it is losing for its liabilities. At IFFCO, ROCE had
shown variable changes. This is due to the variable increments in the
capital employed (majorly the loan funds) as compared to the profit before
tax.
55
Year
Sales
(in Crores)
2004-05
2005-06
2006-07
2007-08
2008-09
319.64
341.35
175.02
257.59
360.01
7396.87
9942.93
10330.11
12162.82
32933.30
0.043
0.034
0.017
0.021
0.011
Analysis
Net profit margin ratio establishes a relationship between net profit and
sales and indicates managements efficiency in manufacturing, administering
and selling the products. This ratio is the overall measure of the firms ability
to turn each rupee sales into net profit.
From the data, IFFCO have a variable net profit margin. The sales turnover
depend upon the element of subsidy which is decided by the government
from time - to - time depending on the condition of international market.
During the year 2008-09, the component of subsidy increased tremendously
due to high international fertilizer price. Looking at the turnover of 2008-09,
56
Loans and
Advances
Current Assets
Year
Loans and
Advances
(in
Crores)
Current Assets
(in Crores)
2004-05
2005-06
2006-07
2007-08
2008-09
1148.77
2656.70
3104.82
3541.56
5464.77
2603.98
4748.98
6081.28
5775.74
7672.99
X 100
Loans and
Advances to
Current Assets
Ratio
44.116
55.943
51.055
61.318
71.221
Analysis
As per the data, it can be clearly said that the position of the Loans &
Advances with respect to current assets is increasing every year (a marginal
decrease in the year 2006-07) which is very Good for IFFCO. The ratio was
around 44.116% in 2004-05 which had increased to 71.221% in 2008-09.
57
Loans and
Advances
X 100
Working Capital
Year
Loans and
Advances
(in
Crores)
Working Capital
(in Crores)
2004-05
2005-06
2006-07
2007-08
2008-09
1148.77
2656.70
3104.82
3541.56
5464.77
1499.14
3387.39
4880.05
4404.17
4490.10
Loans and
Advances to
Working Capital
Ratio (%)
76.629
78.429
63.623
80.414
121.707
Analysis
58
Year
Current Assets
(in Crores)
Current
Liabilities
(in Crores)
Working Capital
(in Crores)
2004-05
2005-06
2006-07
2007-08
2008-09
2603.98
4748.98
6081.28
5775.74
7672.99
1104.84
1361.58
1201.23
1371.57
3182.89
1499.14
3387.40
4880.05
4404.17
4490.10
Analysis
59
IFFCO
Coromandel National
International Fertilizers
Fertilizers
and
Chambal
Chemicals Fertilizers
Travancore
Net Worth
3958.87
1127.14
1470.70
647.94
1234.35
Sales Turnover
32933.30 9374.98
5127.10
706.89
4595.53
Net Profit
360.01
496.38
97.46
42.95
230.56
Inventory
1731.36
1347.51
348.68
412.60
316.82
7672.99
3726.38
1525.51
823.53
1566.28
3182.89
1755.02
886.65
392.21
1288.58
Working Capital
4490.10
1971.36
638.86
431.32
277.70
Total Assets
Working Capital to Sales
Turnover
Inventory to Working
Capital
17303.77 2926.50
1851.19
1457.77
3982.04
0.136
0.210
0.125
0.610
0.060
0.386
0.684
0.546
0.957
1.141
2.41
2.12
1.72
2.10
1.22
60
7.41
6.21
7.06
1.97
9.63
0.226
0.362
0.229
0.501
0.202
Inventory to Sales
0.053
0.144
0.068
0.584
0.069
0.011
0.053
0.019
0.061
0.050
Findings
After the analysis of the components of current assets & current
liabilities and the trends of working capital, we find that
Current assets are increasing more than current liabilities. But the
current ratio has decreased as the percentage increase in current
liabilities is more than the current assets.
Cash and Bank Balances have decreased during this period which
indicates proper utilization of funds at IFFCO.
Position of inventory is Very Good in current assets (22.564%).
Inventory Turnover Ratio increases consistently, which shows greater
degree of utilization of inventory during the study period.
Position of Debtors to Current Assets is 5.307%. This ratio had
decreased during this period with an increase in the year 2007-08.
This increase was due to the significant increase in the debts of the
company.
Loans and Advances are increasing every year and contribute majorly
to current assets. This means that the company is not facing any
problem to get the required short term financing.
61
62
After the discussion and analysis of the financial position of IFFCO Ltd., it is
clear that the working capital of IFFCO is in sound position. Working capital
is not measurable by only current assets & current liabilities but there
are some other factors also that have an influence on the working capital.
In current assets, there are two most important factors, Debtors and
Inventory that affect working capital. In IFFCO Ltd., Inventory and Debtors
are efficiently managed to strengthen the position of the organization both
in short term and long terms.
63
year
is
more
than
the
budgeted
subsidiary,
the
64
CHAPTER 2
Cash Management
65
The fertilizers are sold to corporate societies and most of the payments are
made on prepaid basis. The payments are done through the means of
demand drafts/ pay orders. The system of payment through cheques is not
66
IFFCO has been effectively managing the cash in the following ways:
To measure the cash flow time line and assess the magnitude of
savings that could result from the alternative management strategies.
To compare the length of timeline with that of other companies in the
industry or standard set by the company.
To not permit cash to stand idle for as much as a day
To know the requirements of funds at various units at different
periods of time
Repayment of loans and debt has been one of the prime objectives
To make every effort to speed up the flow
Bankers of IFFCO
Indian Overseas Bank
State Bank of India
Bank of Baroda
Standard Chartered Bank
The Maharashtra State Cooperative Bank Ltd.
The West Bengal State Cooperative Bank Ltd.
Madhya Pradesh State Cooperative Bank Ltd.
The Karnataka State Cooperative Bank Ltd.
The Punjab State Cooperative Bank Ltd.
The Hong Kong and Shanghai Banking Corporation Ltd. (HSBC)
ICICI Bank Ltd.
IDBI Bank Ltd.
HDFC Bank Ltd.
67
This Centralized Cash Management at IFFCO also helps in to check the idle
cash, which would otherwise have a cost structure attaches to it. Through
this system, the cash is not allowed to remain idle at various branches and is
used by the co-operative giant to pay its short term liabilities, which may
arise. This system of centralized cash management gives an added
advantage to IFFCO to effectively implement a policy of cash flow timeline
management. IFFCO maintains a strict vigil on the movement of funds for
collection
and
payments
both.
Although
manufacturing
units
are
independent enough to issue cheques, but they still have to inform the head
office. It also prepares the budgets and forecasts and matches the actual
with that, so as to have a proper control over transaction.
68
69
Collection Procedure
In earlier times, Field Representatives takes the Demand Drafts/ pay orders
and deposits into Area Office. From Area Office it goes to State Office. From
State Office, Demand Draft goes to Marketing Central Office and in the end,
to the Head Office. This process takes around six days. Due to this delay, the
transaction cost was high and there was a loss of interest on the payments
received.
After the implementation of CMS, bank services are hired for better
management of cash. The Field Representatives collects the Demand Drafts
from the societies. The bank agent collects these Demand Drafts and
deposits them into the State offices, either in person or through courier.
From State Offices, the drafts get deposited into the banks through bank
agents only. The bank then transfers the money to the Head Office. This
process takes one day or a maximum of two days. Thus, it saves at least four
days and cash of the organization. There are different banks for different
state offices. For the service provided by the banks, different banks charge
the organization differently.
Cash savings can be classified as follows:
Direct savings
Direst Savings are the savings on the interest of the days for which the
organisation has received its cash earlier.
Indirect savings
It
includes
administrative
cost
reduction
(transaction
and
70
Management
Information
System
(MIS)
as
per
71
STATE
PICK UP
LOCATION
SERVICE
CHARGES
PAY OUT
DAY
HSBC
Punjab
Haryana
Rajasthan
West Bengal
Chandigarh
Chandigarh
Jaipur
Kolkata
NIL
NIL
NIL
NIL
Day
Day
Day
Day
1
1
1
0 (HV)
72
BNP PARIBAS
Standard
Chartered
Bank
HDFC Bank
Assam
A. P.
Karnataka
Tamil Nadu
Orissa
Kerala
HP
J&K
Bihar
Jharkhand
Uttaranchal
ICICI Bank
Uttar Pradesh
Mumbai
NIL
Pune
Nagpur
Aurangabad
Other Districts
NIL
NIL
NIL
NIL
Day
Day
Day
Day
Day
Day
Day
1
0 (HV)
1
1
1
2
2
Nasik
Kholapur
Other Districts
0.15/1000
0.15/1000
0.15/1000
Day 2
Day 2
Day 2
Assam
A. P.
Karnataka
Tamil Nadu
Orissa
Kerala
NIL
NIL
NIL
NIL
NIL
NIL
Day
Day
Day
Day
Day
Day
1
1
1
1
1
1
Patna
Gaya
Bhagalpur
Muzzafarpur
Ranchi
Dehradoon
Haldwani
Rudraprayag
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
Day
Day
Day
Day
Day
Day
Day
Day
Day
Day
2
1
1
2
2
2
2
2
2
2
Lucknow
NIL
Day 0 (HV)
Day 1
All 13 Area
Offices
0.02/1000
Day 1
IOB
Gujrat
Chhatisgarh
MP
Ahemdabad
Raipur
Bhopal
NIL
NIL
NIL
Day 1
Day 1
Day 1
SBI
Uttar Pradesh
FSC
NIL
Day 1
Axis Bank
Uttar Pradesh
38 Districts
NIL
Day 1
73
74
75
76
Disbursement of Funds
77
78
Investments
(in Rs.
Crores)
As at
31.03.2009
7.95% Fertilizer
Bonds, 2026
7.00% Fertilizer
Bonds, 2022
6.20% Fertilizer
Bonds, 2022
6.65% Fertilizer
Bonds, 2023
As at
31.03.2008
6638.95
646.16
Since the GOI was short of funds, they have issued the above bonds which
have disturbed the cash position of the society.
Subsidies from government
The entire fertilizer industry gets subsidy from the government of
India.
In IFFCO, since the society is dealing in Urea and Phosphate
Fertilizer, there are two system of claiming subsidy.
79
towards
primary
and
secondary
freights
to
the
80
Total Subsidy
on all
Fertilizers
15879
18460
26222
39990
95849
49980*
In the year 2008-09, there was a large increase in the subsidy. This was due
to the increase in the prices of the imported raw materials and finished
goods (for resale). The price for these goods is usually US$370 per metric
tonne but during 2008-09 it was US$1200 per metric tonne.
Conclusion
The organization IFFCO is basically a Farmers Organization. It
functions in the cooperative sector of India and is owned by the
Government of India along with the cooperative societies. IFFCO is one
of the most profitable and financially secure fertilizer companies in
India.
The generation of funds through sale is a seasonal factor. 70% of Sales
activity in the business of fertilizers is in Monsoons and the balance
30% is spread throughout the rest of the year. The month from April to
81
reports
as
per
mutual
agreement
etc.
the
cash
82
References
Books
83
84
1. In
the
management
of
fixed
assets,
time
is
very
important
85
Financial manager now a day is responsible for shaping the fortunes of the
enterprise, and is involved in the most vital decision of the allocation of
capital. There is a need to have a broader and farsighted outlook and must
ensure that the funds of the enterprise are utilized in the most efficient
manner .One of the most important task of financial manager is to select an
assortment of appropriate sources of finance for the current assets. Normally
the excess of current assets over current liabilities should be financed by
86
87
Types of Capital
Every business needs funds for two purposes for its establishment to carry
out its day-to-day operations. Capital required for business can be classified
under two main categories:
1) Fixed Capital
2) Working Capital
Fixed Capital
Long term funds are required to create production facilities through
purchase of fixed assets such as plant & machinery, land, buildings,
furniture, etc. investments in these assets represents that part of firms
capital, which is blocked on a permanent or fixed basis and is called fixed
capital.
Working Capital
Funds are also needed for short-term purpose for the purchase of raw
materials, payment of wages and other day-to-day expenses, etc. These
funds are known as Working Capital. There are two concepts of working
capital:
1. Gross working Capital
2. Net working Capital
Gross Working Capital
88
89
90
Temporary
Working
Capital
Permanent
Working
Capital
Time
91
92
93
94
95
payments
of
salaries,
wages
and
other
day-to-day
commitments
A company which has ample working capital can make regular
payments of salaries, wages and other day-to-day commitments which
raise the morale of its employees, increases their efficiency, reduces
wastages and costs and enhances production and profits.
Easy loans
A concern having adequate working capital, high solvency and good
credit standing can arrange loans from the banks and others on easy
and favorable terms.
Regular supply of raw materials
Sufficient working capital ensures regular supply of raw materials and
continuous production.
96
97
share
capital,
preference
share
capital,
debentures,
suppliers
of
short-term finance
in
the
money
market.
98
99
results
are
based
on
highly
summarized
information.
Sources of Cash
The various sources of cash that provide the money to fund the working
capital include the following:
Existing cash reserves
Payables (credit from suppliers)
New equity or loans from shareholders
Bank overdrafts or lines of credit
Long term loans
Profit or net income
Inventory Management
Inventories constitute the most significant part of current assets. Inventories
are stock of the product, a company is manufacturing for sale and
components to make that product. The various forms of inventory in a
fertilizer manufacturing company are:
100
Construction materials
Objectives of Inventory Management
The problems faced by an organization in the context of inventory
management are:
To maintain a large size of inventory for efficient and smooth
production & sales operation
To
maintain
minimum
investment
in
inventories
to
maximize
profitability
To ensure continuous supply of materials, spares & finished goods.
To avoid both overstocking & under stocking of inventory
To eliminate duplicate stock orders. This is possible with the help of a
centralized purchasing system.
To design proper organization for inventory management
101
102
Receivable Management
Accounts Receivable refers to the amount owed by the debtors to the
business. They are usually created because of trade credit that is given to the
customers of the business.
These receivables have three characteristics:
It involves an element of risk, which should be carefully analyzed.
It is based on economic value
It implies futurity.
103
management
involves
the
careful
consideration
of
the
Cash Management
Cash, the most liquid asset and also referred to as the life blood of a
business enterprise and is of vital importance to the daily operations of the
business firms. Its efficient management is crucial to the solvency of the
business because cash is the focal point of the fund flows in a business. If a
business has no cash and no way of getting any cash, it will have to close
down.
Cash Management is concerned with the managing of:
Cash flows into and out of the firm.
Cash flows within the firm
Cash balances held by the firm at a point of time for financing deficits
or investing Surplus cash.
104
105
Operating Cycle
Operating Cycle is the times duration required to convert sales, after the
conversion of resources into inventories, into cash. The operating cycle of a
manufacturing company involves three phases:
Acquisition of resources such as raw material, labour, power and fuel
etc.
Manufacture of the product which includes conversion of raw
material into work-in-progress into finished goods.
Sale of the product either for cash or on credit. Credit sales create
account receivable for collection.
Credit Sales
Collection
Purchases
Inventory Period
Accounts Receivable
Period
Accounts
106
Days Inventory
Outstanding(DIO) + Days
Sales Outstanding(DSO)
107
Days Inventory
Outstanding
(DIO)
365
Broadly, the smaller number of days, the more efficient a company inventory is held for less time and less money is tied up in inventory.
Instead, money is freed up for things like research and development,
marketing or even share buybacks and dividend payments. If the
number of days is high, that could mean that sales are poor and
inventories are piling up in warehouses.
If inventory days are increasing, thats not necessarily a bad thing.
Companies normally let inventories build up when they are introducing
a new product in the market or ahead of a busy sales period. However,
if you dont foresee an obvious pickup in demand coming, the increase
could mean that unsold goods will simply collecting dust in the
stockroom.
Days Sales Outstanding (DSO)
This looks at the number of days needed to collect on sales and
involves Accounts Receivables. While cash-only sales have a DSO of
zero, people do use credit extended by the company, so this number
is going to be positive. Again, smaller is better.
Days Sales
Outstanding
Average Accounts
Receivable
108
Days Payable
Outstanding
(DPO)
(COGS) / 365
Key Ratios
The ratios can be divided into following categories according to financial
activity or functions to be evaluated:
Ratios related to Inventory Management
Ratios related to Receivables Management
Ratios related to Cash Management
Profitability Ratios
Ratios related to Inventory Management
1. Inventory Turnover Ratio
2. Inventory to Working Capital Ratio
3. Inventory to Current Assets Ratio
4. Inventory to Sales Ratio
109
Ratio
Average Inventory
110
Inventory
X 100
Working Capital
Ratio
difficult
to
convert
inventory
raw
materials,
Inventory
Current Assets
X 100
111
It
is
also
important
to
compare
this
ratio
among
Inventory
Sales
X 100
112
Net Sales
Average Accounts Receivable
loosened its credit policies with customers, meaning that they may
have been extending credit to companies where they normally would
113
Average
Collection
Debtor Turnover
Period
Ratio
Debtors
Current Assets
X 100
Debtors
Working Capital
X 100
Debt
Equity
114
115
Current Assets
Current
Liabilities
Quick Ratio
Current Liabilities
116
Cash
X 100
Current Assets
The Sales to Current Assets ratio is best measured over several periods
compared to industry averages, as the amount of Current Assets varies
widely among companies and industries. Decreasing Sales to Current
Assets ratio is generally a negative sign, indicating the company may
have slowed production, decreasing the amount of inventory and
resultantly the Current Assets.
Sales to
Current Asset
Ratio
Sales
Current Assets
117
Working
Capital
Turnover
Ratio
Sales
=
Average Working Capital
118
Sales
=
Profitability Ratios
1. Return on Assets (ROA)
2. Return on Equity (ROE)
3. Return on Capital Employed (ROCE)
4. Net Profit Margin
1. Return on Assets (ROA)
ROA is an indicator of how profitable a company is relative to its total
assets. ROA tells how efficient management is at using its assets to
generate earnings. The ROA figure gives investors an idea of how
effectively the company is converting the money it has to invest into
net income. The higher the ROA number, the better, because the
company is earning more money on less investment.
119
4. Net
Return on
Capital
Employed
(ROCE)
Profit
Margin
Net Profit Margin ratio is measured by dividing profit after tax by sales:
Net Profit
Margin
120
121
122
123
motives
to
hold
cash
and
marketable
securities
are:
124
125
426.28
423.93
3532.59
3958.87 3264.73
3688.66
3
4
7373.18
5429.6
2404.67
12802.78 4370.97
6775.64
TOTAL
APPLICATION OF FUNDS
Fixed Assets:
Gross block
Less: Accumulated
Depreciation
Net Block
Capital Work-In-Progress
Investments
Current Assets, Loans and
Advances
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
Less: Current Liabilities and
Provisions
Current Liabilities
Provisions
Net Current Assets
Miscellaneous Expenditure
(to the extent not written
off)
542.12
534.19
17303.77
10998.49
5
8808
8138.98
3842.16
4965.84
290.98
3400.04
4738.94
5256.82
430.85
7552.95
8
9
10
11
1731.36
407.23
69.63
5464.77
7672.99
1577.1
413.76
243.32
3541.56
5775.74
12
13
2860.18
322.71
3182.89
1048.49
323.08
1371.57
6
7
5169.79
1416.73
4490.10
4404.17
3.9
7.8
17303.77
10998.49
Voluntary Retirement
Scheme Expenses
TOTAL
As At 31.03.2008
(Rs. in Crores)
For yr 31.03.2008
126
14
15
7387.70
5968.47
7387.70
5968.47
Raw Materials
Stores and
Spares
Chemicals and Catalysts
Packing
Materials
Power, Fuel and Water
Less: Stock Transfer for Self
Consumption
Purchase of products for resale
Employees' Remuneration & Benefits
Manufacturing, Administration,
Distribution and Other Expenses
Interest
Depreciation/ Amortisation
Prior Period Adjustments (Net)
Deferred Revenue Exp. Written-off
(Voluntary Retirement Scheme
Expenses)
Profit Before Tax
Provision for
Taxation
Current Tax
Fringe Benefit Tax
Deferred Tax
Earlier Years
Profit After Tax
Profit transferred
to:
Capital Repatriation Fund
Dividend Equalisation Fund
Contribution towards Approved
Donations
16
13997.22
6646.44
108.34
41.38
96.26
38.22
200.39
981.80
15329.13
170.43
756.48
7707.83
159.41 15169.72
14539.23
595.96
17
18
19
92.80
8.02
7.93
(26.81)
7589.02
1245.44
405.75
1481.91
1023.20
470.40
(13.46)
3.90
959.49
389.37
410.93
(3.00)
3.86
33270.86
441.95
11000.86
380.52
81.94
360.01
0.47
1.00
118.81
61.80
6.50
56.14
(1.51)
122.93
257.59
0.46
1.47
0.46
127
358.54
257.13
441.95
470.40
857.19
0.01
17.60
107.68
0.04
13.41
83.16
148.84
4.29
(274.42)
3.90
81.16
(3.88)
(0.12)
(279.54)
(1717.19)
1747.04
(135.23)
(2.57)
(1.90)
(1.87)
(Rs. In Crores)
Year Ended
31.3.2008
380.52
410.93
362.71
0.31
0.20
2.27
15.47
5.10
2.75
(132.54)
(115.22)
3.97
(14.12)
1509.26
2.95
544.78
1951.21
925.30
706.83
(487.06)
(249.69)
3.43
1701.52
223.20
1148.50
(72.07)
(1.75)
(1.60)
(0.67)
(76.09)
(141.57)
1559.95
(590.82)
11.50
(6300.54)
1072.41
(594.93)
31.89
(691.73)
128
246.61
55.66
132.74
115.22
26.26
(970.55)
(6577.59)
2.35
(362.67)
(9.21)
589.37
5809.65
0.01
(153.97)
(4.10)
160.88
286.72
(389.37)
(84.45)
(5.10)
(1008.14)
(84.53)
(92.87)
4843.95
(189.38)
(173.69)
(87.52)
243.32
330.84
69.63
243.32
(173.69)
(87.52)
129
FINANCIAL RATIOS :
Operating Profit to Sales (%)
Profit before Tax to Sales (%)
Return on Capital Employed (%)
Profit before Tax to Net Worth
(%)
Profit After Tax to Net Worth (%)
Fixed Assets Turnover (Times)
Working
Capital
Turnover
(Times)
Inventory of Finished Goods
(Months Sales)
Inventory of Raw Material &
Packing
Material (Months Consumption)
Sundry Debtors (Months Sales)
Current Ratio
Quick Ratio
Debt Equity Ratio
Employees Productivity
No. of Employees
Sales per Employee (Rs. Crore)
2008-0
9
2007-0
8
2006-0
7
2005-0
6
2004
-05
6.5
1.34
3.12
7.8
3.13
3.5
6.69
2.43
2.53
6.92
4.85
7.18
6.52
6.37
10.58
11.16
10.31
6.9
13.55
14.27
9.09
6.32
6.99
2.38
4.81
2.2
9.6
3.01
9.68
3.57
7.41
2.62
2.5
4.07
4.58
0.12
0.76
1.48
0.74
0.9
0.74
0.67
2.41:1
1.87:1
3.23:1
1.25
0.78
4.21:1
3.06:1
1.84:1
1.01
0.9
5.06:1
3.15:1
1.78:1
0.86
0.89
3.49:1
2.37:1
1.42:1
0.79
1.17
2.36:1
1.51:1
2.20:1
6757
4.87
6743
1.8
6826
1.51
6506
1.77
5752
1.29
130
71.68 lakh MT
40.68 lakh MT
31.00 lakh MT
112.58 lakh MT
58.69 lakh MT
53.89 lakh MT
Rs.441.95 crore
Rs.360.01 crore
Rs 32933 crore
131
5.941 Gcal/ MT
(Rs. In Crore)
Year ended
31.3.2008
32933.30
499.00
33432.30
12162.82
354.77
12517.59
29418.89
9971.54
1481.91
959.49
2531.50
1586.56
Applied to meet:
Employee Cost
Interest Payment
Income Tax (Net)
Dividend
Donations
Cooperative Education Fund
Retained Cash Profit
595.96
1023.20
74.00
85.10
1.75
3.59
747.90
405.75
389.37
66.79
84.53
0.75
2.57
636.80
Particulars
Income from Sales
Dividend and Other Income
Less:
Cost of Materials
Manufacturing, Admn.,
Distribution
& Other Expenses
132
2531.50
1586.56
7.57
12.67
17.89
63.95
14.65
43.01
37.46
23.53
Ratios
Value added to Total Income
(%)
Value added to Capital
Employed (%)
Value added to Net Worth (%)
Value added per Employee
(Rs. Lakh)
46%N
21%N
26%N
25%N
16% P2O5
60%K2O
48%K2O
18 46
16 - 20% P2O5
NPK Grades
133
Opening Stock
Closing Stock
Purchases
COGS
2004-05
2005-06
2006-07
2007-08
2008-09
495.27
353.65
593.33
1347.34
211.13
353.65
593.33
1347.34
211.13
491.64
6667.86
9406.16
10332.1
10200.56
31777.26
6809.48
9166.48
9578.09
11336.77
31496.75
134
Opening
Inventory
Closing
Inventory
Average
Inventory
2004-05
2005-06
2006-07
2007-08
2008-09
1020.56
931.50
1519.64
2283.94
1577.10
931.50
1519.64
2283.94
1577.10
1731.36
976.03
1225.57
1901.79
1930.52
1654.23