CHAPTER - FINANCE

Finance is a field that is concerned with the allocation (investment) of assets and
liabilities over space and time, often under conditions of risk or uncertainty. Finance can
also be defined as the science of money management. Market participants in the market
aim to price assets based on their risk level, fundamental value, and their expected rate of
return. Finance can be broken into three sub-categories: public finance, corporate finance
and personal finance.

RAYMOND
BALANCE SHEET :
In financial accounting, a balance sheet or statement of financial position is a summary
of the financial balances of an individual or organization, whether it be a sole
proprietorship, a business partnership, a corporation, private limited company or other
organization such as Government or not-for-profit entity.A Balance Sheet is a statement
of the financial position of a business which states the assets, liabilities, and owners'
equity at a particular point in time. In other words, the balance sheet illustrates your
business's net worth.

All accounts in your General Ledger are categorized as an asset, a liability, or equity. The
relationship between them is expressed in this equation:

Assets = Liabilities + Equity

The items listed on balance sheets vary from business to business depending on the
industry, but in general the balance sheet is divided into the following three sections:

Assets :

As in the balance sheet example shown below, assets are typically organized into liquid
assets—those that are cash or can be easily converted into cash—and non liquid assets
that cannot quickly be converted to cash, such as land, buildings, and equipment.

Liabilities

Liabilities are funds owed by the business, and are broken down into current and
long-term categories. Current liabilities are those due within one year and includes
items such as:

1 1.Accounts payable (supplier invoices)

2 2.Wages
3 3.Income tax deductions 4.Pension plan
contributions 5.Medical plan payments
6.Building and equipment rents
7.Customer deposits (advance payments for goods or services to be delivered)
4 8.Utilities
5 9.Temporary loans, lines of credit, or overdrafts
 6 10.Maturing debt
7 11.Sales tax and/or goods and services tax charged on purchases

Equity :

Equity, also known as shareholders' equity, is that which remains after subtracting
the liabilities from the assets. Retained earnings are earnings retained by the
corporation—that is, not paid to shareholders in the form of dividends.Retained
earnings are used to pay down debt or are otherwise reinvested in the business to
take advantage of growth opportunities. While a business is in a growth phase,
retained earnings are typically used to fund expansion rather than paid out as
dividends to shareholders.

BALANCE SHEET OF BOMBAY DYEING COMPANY

PARTICULARS MAR’18 MAR’17 MAR’16 MAR’15 MAR’14

EQUITIES AND
LIABILITIES

SHAREHOLDE
R’S FUNDS

Equity share 41.31 41.31 41.31 41.31 41.31

capital

Reserve and 595.34 293.57 336.39 432.69 428.94

surplus

Total 636.65 334.88 1312.12 1572.28 1463.55

shareholder
funds
NON-
CURRENT
LIABILITIES
Long term 2230.32 940.89 1215.07 906.03 553.96
borrowings

Other long term 15.16 14.46 10.44 6.85 10.90

liabilities

Long term 16.22 16.61 14.92 13.60 12.03

provision

Total Non- 2261.70 971.96 1240.43 926.48 576.89

current liabilities

CURRENT
LIABILITIES
 Short term 414.83 1216.85 824.07 430.50 512.11
borrowings

Trade payable 351.11 357.74 296.49 480.75 640.60

Other current 344.90 704.68 678.82 540.21 514.54

liabilities

Short term 46.77 51.58 41.52 42.47 55.90

provisions

Total current 1157.61 2330.85 1840.90 1493.93 1723.15

liabilities

ASSETS
NON-
CURRENT
ASSETS
Tangible assets 552.17 567.76 588.44 834.65 852.91

Intangible assets 0.11 0.61 1.87 3.31 4.84

Capital work-in- 74.04 74.67 72.414 74.59 88.70

progress

Other Assets 3.68 3.75 0.00 0.00 64.69

Assets held for 0.00 0.00 222.73 0.00 0.00

sale

Fixed assets 630.00 646.79 885.45 912.55 1011.14

Non- current 950.24 773.33 55.96 55.96 55.96

investments

Long term loans 0.13 0.14 34.86 37.25 37.84

and advances

Other Non- 48.58 844.46 1812.82 1190.74 1086.95

current assets

Total Non- 1628.95 2264.72 2789.09 2196.50 2191.89

current assets

CURRENT
ASSETS
 Inventory 409.00 420.82 679.87 710.27 718.72

Trade 212.36 137.87 238.15 164.79 195.80

Receivables

Cash and cash 133.38 162.30 113.77 668.42 28.23

equivalents

Short term loan 1.86 243.39 143.11 221.01 157.33

and advances

Other Current 1670.41 408.59 429.46 531.70 471.62

Assets

Total Current 2427.01 1372.97 1604.36 1796.19 1571.70

Assets

Total Assets 4055.96 3637.69 4393.45 3992.69 3763.59

BALANCE SHEET OF RAYMOND COMPANY

PARTICULARS MAR’18 MAR’17 MAR’16 MAR’15 MAR’14
Sources of funds
Total Share 61.38 61.38 61.38 61.38 61.38
capital
Equity share 61.38 61.38 61.38 61.38 61.38
capital
Reserves 1255.68 1162.66 1177.06 1106.38 1039.40

Net-worth 1317.06 1224.04 1238.44 1167.76 1100.78

Secured Loans 116.13 439.67 507.86 535.64 661.65

Unsecured Loans 1042.37 846.53 671.25 555.00 577.09

Total debt 1158.50 1286.20 1179.11 1090.64 1238.74

Total liabilities 2475.56 2510.24 2417.55 2258.40 2339.59

Application of
funds
Gross black 1380.42 748.83 1846.37 1813.09 1784.71

Less:accum. 273.33 179.95 1264.10 1201.66 1110.93

Depreciation
Net block 1107.09 568.88 582.27 611.43 673.78

Capital work in 15.10 290.60 196.76 167.40 157.72

progress
Investments 804.13 836.38 834.45 708.68 770.18

Inventories 936.87 698.27 656.89 576.66 551.86

Sundry debtors 618.95 713.96 668.19 569.81 480.45

Cash and bank 66.94 38.75 65.40 95.46 51.58

balance
Total current 1622.76 1450.98 1390.48 1241.93 1083.89
Assets
Loans and 444.81 459.36 460.14 453.88 355.62
advances
Total CA, loans 2067.57 1910.34 1850.62 1695.81 1439.51
& Advances
Current liabilities 1480.73 1056.85 1014.11 874.97 657.87

Provisions 37.59 39.11 32.45 49.92 43.78

Total CL & 1518.32 1095.96 1046.56 924.89 701.65

Provisions
Net current 549.25 814.38 804.06 770.92 737.86
Assets
Total Assets 2475.57 2510.024 2417.54 2258.43 2339.54

EXPLANATION:

From the above Balance sheet, its shows that the financial condition of RAYMOND
company is good then BOMBAY DYEING company because Bombay dyeing
company has high amount of liability and less assets as compare to Raymond
company. The long term borrowing of Bombay company is increasing year by year
and assets are not increased . So on the basis of going concern concept, company is
in risk position. While the Raymond company has less amount of long term
borrowing and high amount of assets so, company has bright future. The revenue of
Bombay dyeing company is increases every year but not as much as Raymond.
So, Raymond company has good market condition and market capitalization and
consumer likes there product more as compare to Bombay dyeing. The demand of
product of Raymond company is more then Bombay dyeing company which
increases its profit.

CASH FLOW STATEMENT

A cash flow statement is a financial statement that provides aggregate data regarding all
cash inflows a company receives from its ongoing operations and external investment
sources, as well as all cash outflows that pay for business activities and investments
during a given period.
In financial accounting, a cash flow statement, also known as statement of cash flows, is a
financial statement that shows how changes in balance sheet accounts and income affect
cash and cash equivalents, and breaks the analysis down to operating, investing and
financing activities. Essentially, the cash flow statement is concerned with the flow of
cash in and out of the business. The statement captures both the current operating
results and the accompanying changes in the balance sheet.As an analytic tool, the
statement of cash flows is useful in determining the short-term viability of a company,
particularly its ability to pay bills. International Accounting Standard 7 (IAS 7), is the
International Accounting Standard that deals with cash flow statement.

CASH FLOW STATEMENT OF BOMBAY DYEING

PARTICULARS MAR’18 MAR’17 MAR’16 MAR’15 MAR’14
Net profit before 190.44 -51.19 -85.24 34.94 33.14
tax
Net cash from -369.04 169.04 0.00 44.99 -13.77
Operating
Activities
Net cash (used 558.63 120.50 0.00 -37.10 3.56
in)/from
Investing
activities
Net cash (used -236.28 -256.88 0.00 30.01 -0.92
in)/from
Financing
Activities
Net (decrease) -46.69 35.66 10.68 37.90 -11.13
/increase in cash
and cash
equivalents
Opening cash & 60.84 25.18 8.07 20.12 31.25
cash Equivalents
Closing cash & 14.15 60.84 18.75 58.02 20.12
cash Equivalents

CASH FLOW STATEMENT OF RAYMOND

PARTICULARS MAR’18 MAR’17 MAR’16 MAR’15 MAR’14

Net profit before 91.45 53.03 128.21 111.58 64.61
Tax
Net Cash from 253.44 229.48 218.44 149.78 12.97
Operating
Activities
Net cash(used in)/ -117.98 -65.25 -142.77 77.93 45.26
from investing
Activities
Net cash(used -115.92 -165.97 -79.99 -233.55 -55.05
in)/from
financing
Activities
Net (decrease) 19.55 -1.74 -4.32 -5.84 3.18
/increase in cash
and cash
Equivalents
Opening cash & 6.75 8.49 14.55 20.40 17.22
cash Equivalents
Closing cash & 26.30 6.75 10.23 14.55 20.40
cash Equivalents

EXPLANATION:
Cash from Operating activities of Bombay dyeing is decreasing every year and on the other side Raymond
company operating activities is increasing which shows that Raymond company has enough cash for
operating its day to day activities and Bombay dyeing has not cash for daily activities. Bombay dyeing
company has good cash and cash equivalents which increased year by year but Bombay dyeing company
cash has reduced year by year. So basically this cash flow statement shows that cash position of
company.Financing activities of Raymond company and Bombay dyeing is decreases.

FINANCIAL RATIO
A financial ratio or accounting ratio is a relative magnitude of two selected
numerical values taken from an enterprise's financial statements. Often used
in accounting, there are many standard ratios used to try to evaluate the overall
financial condition of a corporation or other organization. Financial ratios may be
used by managers within a firm, by current and potential shareholders (owners) of a
firm, and by a firm's creditors. Financial analysts use financial ratios to compare
the strengths and weaknesses in various companies.If shares in a company are
traded in a financial market, the market price of the shares is used in certain
financial ratios.
A financial ratio or accounting ratio is a relative magnitude of two selected
numerical values taken from an enterprise's financial statements. Often used in
accounting, there are many standard ratios used to try to evaluate the overall
financial condition of a corporation or other organization. Financial ratios may be
used by managers within a firm, by current and potential shareholders (owners) of a
firm, and by a firm's creditors. Financial analysts use financial ratios to compare
the strengths and weaknesses in various companies.[1] If shares in a company are
traded in a financial market, the market price of the shares is used in certain
financial ratios.

FINANCIAL RATIO OF BOMBAY DYEING

PARTICULARS MAR’18 MAR’17 MAR’16 MAR’15 MAR’14

Investment 128.90 93.14 89.33 115.15 128.61

valuation ratio

Profitability 21.84 14.36 10.40 10.68 9.20

ratios

Liquidity and 1.97 0.77 1.47 1.60 1.22

solvency ratios
 DEBT 1.46 0.86 0.70 1.15 1.17
COVERAGE
RATIOS

Profit & loss 43.69 59.87 62.07 63.47 59.97

account ratios

Cash flow 42.02 - - 67.26 67.87

indicator ratios

FINANCIAL RATIO OF RAYMOND

PARTICULARS MAR’18 MAR’17 MAR’16 MAR’15 MAR’14

Investment 34.11 25.90 38.24 36.99 39.36

valuation ratio

Profitability ratio 6.95 5.63 8.40 8.58 11.05

Liquidity and 2.88 0.87 1.10 1.20 1.18

solvency ratios

Debt coverage 1.62 1.37 1.94 1.75 1.42

ratios

Profit & loss 53.42 50.03 49.86 49.16 45.22

account ratios

Cash flow 7.82 54.43 22.43 18.41 13.93

indicator ratio

EXPLANATION :

In Raymond company , ratio of investment is fluctuated year by year. Sometimes its ratio
increase and sometime decreases. In Bombay company, ratio is also fluctuated but now
its has equal amount of investment ratio which they had in 2014. Profitability ratio of
Raymond company is decreases yearly, but the Bombay dyeing company ratio is
increasing yearly.Raymond company has an ideal position of liquidity ratio because they
has 2 assets to beat 1 liability, but Bombay dyeing has no ideal position for liquidity ratio.

Stock Price of Bombay Dyeing company

BSE 100.95 -5.30 NSE 101.05 -5.30

Stock Price of Raymond Company

BSN 627.30 - 14.90 NSE 627.55 -12.60

Market Capitalization of Raymond company

Company Last price % chg 52 wk high 52 week low Market cap.
name

Raymond 807.70 1.52 151.70 756.00 4957.73

CONCLUSSION

Raymond is India's largest and world's third largest integrated manufacturer of

wool and wool blended fabrics. Its fabric capacity stood at around 38 m meters
(mm) at the end of FY12 and the company commanded over 60% market share in
worsted suiting in India. It is also the domestic market leader in files and tools with
around 80% market share. It has a widespread distribution network across the
country, which it can leverage to sell some of its well-recognized brands.Bombay
Dyeing (BDL) is one of the oldest composite mills in India - it spins yarn, weaves
Grey cloth and further processes it. Large ad spend and a massive retail network
have enabled the company to establish a dominant role in textiles (mainly in home
furnishings), though its forward integration into garments has not been so
successful. It is also the largest manufacturer of DMT in India.

At last, it is concluded that Raymond company has a bright future because they have
good demand of their product in market and their Financial position is also stable as
compare to Bombay dyeing company.The stock price of RAYMOND company is
decreasing but it does not affecting the demand of product in market. Bombay dyeing
need to plan new strategies to improve their business performance in market, so that
company can earn huge profit and able to improve their financial position.