REPORT ON:

BY GUIDED BY
VAGHANI ROMIT
SY BBA LECTURER
ROLL NO: 10

SWAMI SAHJANAND COLLEGE OF

COMMERCE & MANAGEMENT
BHANVNAGAR UNIVERSITY,
BHAVNAGAR
BATCH: 2007 -2010

1
 P R E F A C E
BBA is professional course, which helps the student to develop their knowledge in the field
of an industrial environment and business by the means of management of the company.

As a part of our BBA syllabus we are supposed to visit an industrial and under its
working. Based on the information imparted by the authorities of the concerned industry,
we prepare a report in which we try to furnish all the information received from the unit.

One needs both practical as well as theoretical knowledge to become sharp in any field. With
the help of the practical knowledge received from the industrial; visit, we get a clear idea
about management and other aspects of the business environment.

In comparison to bookish knowledge, practical studies prove to be very important

and necessary as it helps a student to the practical field and get the idea about exact position
of the entrepreneur and the manager. In this way after completing studies, one can better in
the field of business.

In the report I have made an effort to the best of my limits, to present the preface
information regarding the working of PAR DRUGS & CHEMICALS

VAGHANI ROMIT

2
 A C K N O W L E D G E M E N T
I feel great pleasure in submitting this report as a part of practical studies in the
professional course of management. This visit has been helped me a lot in acquiring
knowledge regarding chemical industry.
Research of any unit is difficult as more you attempt more you go deep, new and new
details emerges. It is not easy exercise. It is with help of combine efforts and guidance of our
teachers, parents and friends.
“GOD” means “GO ON DUTY” it means nothing but we have to perform our duty
very well. First of all I would like to thank GOD because of him my existence is created and
that’s why I am able to doing this project. Then how can forget my PARENTS, their warm
guidance and motivation help throughout of journey of developing of my project.
✓ I would like to thank the most prominent person Dr. Sureshbhai Savani, the Trustee
of SSCCM who has helped me in one or another way.
✓ I would like to thank our principal Ms Rachna Dhruv for giving me such a nice
opportunity by providing not only educational guidance but also providing moral
support whenever it requires.
✓ I am also thankful to Prof aaaaaaai & aaaaaaa whose support encouraged me in
preparing this project.
✓ I also wish to express my sincere thanks and gratitude to our Library, and Librarian
Ms MATANGI DAVE.
✓ I am very grateful to Mr V J SAVANI owner of PAR DRUGS &CHEMICAL, whose
support and patience were instrumental during visit.
✓ I wish to express my gratitude to Mr.JIGNESH SAVANI, director of the Industry,
who behaved very kindly and help me out in making the project report.
✓ I would also thank to all managers of PAR DRUGS & CHEMICAL who help me in
one way or the other, in my endeavor.

Finally I would be grateful to all readers of this project.

3
 C A N D I D A T E ’S S TA T E M E N T

I undersigned ROMIT VAGHANI, the student of S.Y. B.B.A. here by declare that
the project work presented in this report is my own work and has carried it out under the
guidance of Ms Rachna Dhruva & Mrs. Of SWAMI SAHJANAND COLLEGE OF
COMMERCE & MANAGEMENT - BHAVNAGAR.

BHAVNAGAR
DATE:

SIGNATURE:
Full Name: VAGHANI ROMIT

4
▪ PREFACE

▪ ACKNOWLWDGEMENT

▪ CANDIDATE STATEMENT

▪ GENERAL INFORMATION

▪ HUMAN RESOURCES MANAGEMENT

▪ MARKETING MANAGEMENT

▪ FINANCIAL MANAGEMENT

5
6
 CONTENTS
No. Particulars Page No

1) PROFILE OF THE COMPANY

2) HISTORY & DEVELOPMENT OF COMPANY

3) SIZE OF THE UNIT

4) FORM OF ORGANISATION

5) ORGANISATION STRUCTURE

6) PROUCTS

7) CONTRIBUTION OF UNIT

7
 1) PROFILE OF THE COMPANY

➢ Name of the unit : Par Drugs & Chemicals PVT. LTD.

➢ Location : 333/1 Chitra G.I.D.C. Industrial Estate

Phase – 2, Bhavnagar – 364004(Gujrat)

➢ Managing Director : Mr. V. J. Savani

➢ Directors : Mr. S. V. Savani

: Mr. J. V. Savani

: Miss. S. V. Savani

➢ Auditor : Mr. V. M. Shah

➢ Bankers : ICICI BANK LTD. Bhavnagar

➢ Scale of Unit : Small Scale Unit

➢ Website : www.pardrugs.com

8
 2) HISTORY & DEVELOPMENT OF THE UNIT

Established in the year 1982 M/s PAR inorganics , the company

Was reconstituted M/s par drugs & chemicals Pvt Ltd . in the year 1999
The managing director and founder v j savani, is a technocrat with an experience
Of over 25 years in the manufacture of antacid raw materials. the company today
Manufactures more than 15 different products and all the requisite grades as available
In the market.

The products& manufactured in the view of specific needs of consuming

form calycle industries quality control right form raw material to the end of the product at each
stage using in indigenes develop must sophisticated technology . modern
Part with process control device . monitored by microprocessor & backed by
competent term of personel ensures high , parity , & consistent quality
The organization as effective network all over the country with standing point at
number of consuming station. This facilities regular available of the product to the value
patrons who are offered promised.
Present time PAR DRUGS & CHEMICAL company is one of the leading
Company in India in the field of manufacturing in raw materials

1992: state of the Par Drugs & Chemical center established

2000: spin flash drier installed giving a boost to the quality & productivity.
2001: ISO 9001, 2000 certified by M/S SGS United Kingdom Ltd the only in
2006: State GMP certified by FDA govt. of Gujarat, India.
2006: A State of art manufacturing facility exclusively for dried aluminum
Hydroxide Gel at one of the biggest industrial (chemical) cluster in Asia.
I.e. ankles war.

9
 3) SIZE OF THE UNIT

Investment of the company, total employee and Turnover of the company are
included in size of the company.

➢ Small Scale Industry: - Means the company whose investment up to 60 lacks.

➢ Medium Scale Industry: - Means the company whose investment up to 60 to 100

lacks.
➢ Large Scale Industry: - Means whose investment up to 100 lacks and more than
100 lacks.

. The present paid up capital of the company is very high and the company financial also
many better then the other chemical industry.
PAR DRUGS & CHEMICAL PVT. LTD. Is a large scale industry as per
the definition of the industry size. As per government rules

10
 4) FORM OF ORGANISATION

The various types of organization structures prevalent today are as under.

➢ Sole proprietorship
➢ Partnership
➢ Joint stock company
➢ Co-operative organization
➢ Government department( Public Enterprises)
➢ Public Corporation
➢ Government company

1) Sole proprietor: - In this type of org. there is a single man who uses his mind, ideas,
sources and funds for the prosperity and growth of the business.

2) Partnership: - In this type of org. the partners share an equal authority of rights and
duties for each and all of them.

3) Joint stock Company: - Legally the joint stock company is an artificial person
created for carrying on some business by an association of persons. It asserts that a
company has a legal entity of it’s in the sense that is has powers and characteristics
determined by the provision of and contribution framed in accordance with them.
➢ Private ltd. Company
➢ Public ltd. Company

11
4) Co-operative organization: - A co-operative society is essentially on
association of person who join together on a voluntary basis for the furtherance of their
common economic interest, service not profit, co-operation not competition; self held
not dependence on the profit hungry businessman.

5) Government department: - A gov. may be defined as public undertaking that is

directly under the control of the minister who is also held responsible for all the
activities of the undertaking.

6) Public Corporation: - Public corporation is a form of organization established for

public welfare under a specific act of parliament or Assembly, deriving independent
entity and internal autonomy through the same act.

7) Government Company: - Gov. Company is a company where in 51% of shares

held by the Central Government and a State Government jointly.

12
 5) ORGANISATION STRUCTURE

Generally there are three levels of management in the company.It depends upon the size of
the company.

1) TOP LEVEL: - In the top level of management there are BOD, MD, GM, and
Chairman etc are available. Theirs duty is to take the very important decisions of the
company. And to think about objectives and also for goal setting. This level is very
important for company.

2) MIDDLE LEVEL: - This level connects both the level those are top level and bottom
level so this level is called is the chain of management levels. In this level Sales
manager, Production manager, Purchase manager etc and Experts also available
at this level.

3) BOTTOM LEVEL: - The actual work of the company or the production process is
done in this level. For the guidance supervisors are available at this level. There are
Workers, Supervisors, Jobbers, and Foremen etc available at this level.

13
 STRCTURE OF PAR DRUGS & CHEMICAL

Managing
Director

Marketing Production Q.C. Head Store &

Purchase Head Dispatch
Manager
(Incharge)

Production
Supervisor Q.C. Chemist
Store &
Assistance

Dispatch

Marketing head = marketing manager

Purchasing head = purchasing managing
Management representative’s directory to managing
Directors for the effective action of the system he is given authority to
Execute the work for installation of I.S.O. 9001 system & report directly
For sake of simplicity the decision of key personal as use in the quality system is
as under

14
 6) PRODUCTS

PAR COMPANY offers a wide range of bulk drugs & antacid raw material & fine
chemical as per BP, USP & other which are as under.

1. MAGNESIUM HYDROXIDE (H2MgO2)

CAS NO. : 1309-42-8 (as IP, BP, USP specification.)
Widely used as an antacid formulations. Also used as intermediate for obtaining magnesium
metal, residual fuel oil additive, sulfite pulp, uranium processing, dentifrices, in food as alkali,
drying agent, color retention agent, frozen desserts. Also widely used in effluent treatment
plant especially where the effluents is very much alkaline in nature.

2. DRIED ALUMINUM HYDROXIDE GEL (AIH3O3)

CAS NO.: 21645-51-2 (as IP, BP, USP Standards.)
Mainly used as an active medicament in an antacid formulations, also used in manufacturing
of lake colors, inks, catalysts carrier etcs.

3. MAGNESSIUM TRISILICATE (Mg2Si3O8*nH2O)

CAS NO.: 14987-04-3 (as IP, BP, USP Standards.)
Used as antacid formulations. Also useful antioxidant, decolorizing agent and industrial odor
absorbent.

15
4. MAGALADRATE (AI5Mg10(OH)31(SO4)2)
CAS NO.: 74978-16-8 (as IP, USP Standards.)
Used as an antacid raw material in a specific antacid formulations.

5. ALUMINUM MAGNESIUM SILICATE B.P. (AL2MgO8Si2)

CAS NO.: 12511-31-8
As an antacid raw material in a specific antacid formulation, ceramics, suspending agent,
thickening, agent etc.
6. MEGNESIUM STEARATE (C36H70MgO4)
CAS NO.: 557-04-0
Used as a lubricating agent in tablet manufacturing, as a drier in paints and varnishes, as a
stabilizer and lubricant for plastics, emulsifying agent in cosmetics, as ant caking agent in
foods.

7. MEGNESIUM CARBONATE (MgCo3)

CAS NO.: 546-93-0
Magnesite and dolomite minerals are used to produce magnesium metal and basic refractory
bricks. Magnesium Carbonate is also used in flooring, fire proofing, fire extinguishing
compositions, cosmetics, dusting powder and toothpaste. Other applications are as filler
material, smoke suppressant in plastics, a reinforcing agent in neoprene rubber, a drying agent
and color retention in floods. In addition, high purity magnesium carbonate is used as antacid
and as an additive in table salt to keep it free flowing.

16
8. ALMAGATE (AI2Mg6 (OH)14(CO3)2, 4H2O)
CAS NO.: 66827-12-1
Used as an antacid raw material in a specific antacid formulations.

9. HYDROTELCITE (AI2O3*6MgO*CO2*12H2O)
CAS NO.: 12304-65-3
Laxative

10. ALLUMINUM HYDOXIDE MAGNESIUM CARBONATE CO-DRIED GEL

(AL65 (OH)213 MG26*C17O48*NH2O)
Useful where a formulation consist of Magnesium carbonate and aluminium hydroxide as by
this the handling of two different products can be avoided and one step i.e. mixing can be
omitted from the manufacturing process of an antacid formulations.

11. PARMAG-MAGNESIUM HYDROXIDE (Mg(OH)2)

17
 7) CONTRIBUTION OF THE UNIT

This company PAR DRUGS AND CHEMICAL DRUGS & CHEMICAL PVT.LTD
is a good exporter in chemical. The company is exporting its chemical in many countries in
the world.

The company or the unit is providing a lot to the society.

There is a contribution of the firm in the national market.

The company is engaged only at BHAVNAGER.
It provides employment to many persons.

18
19
 CONTENTS
No. Particulars PageNo

1) INTRODUCTION

2) ORGANISATION OF PERSONAL DEPARTMENT

3) RECRUITMENT & SELECTION AND INDUCTION

4) TRAINING & DEVELOPMENT

5) JOB DESCRIPTION

6) PROMOTION & TRANSFER POLICY

7) PERFORMANCE APPRAISAL SYSTEM

8) WAGE & SALARY ADMINISTRATION

9) WORKING OF E.S.I SHEME

10) PROVIDENT FUND SHEME

11) COLLECTIVE BARGAINING & Agreement

12) EMPLOYEES SERVICES

20
 1) INTRODUCTION

The Human Resources Management (HRM) function includes a variety of activities, and key
among them is deciding what staffing needs you have and whether to use independent
contractors or hire employees to fill these needs, recruiting and training the best employees,
ensuring they are high performers, dealing with performance issues, and ensuring your
personnel and management practices conform to various regulations. Activities also include
managing your approach to employee benefits and compensation, employee records and
personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these
activities themselves because they can't yet afford part- or full-time help. However, they should
always ensure that employees have -- and are aware of -- personnel policies which conform to
current regulations. These policies are often in the form of employee manuals, which all
employees have.

Human resource (or personnel) management, in the sense of getting things

done through people. It's an essential part of every manager's responsibilities, but many
organizations find it advantageous to establish a specialist division to provide an expert service
dedicated to ensuring that the human resource function is performed efficiently.

"People are our most valuable asset" is a cliché which no member of any senior management
team would disagree with. Yet, the reality for many organizations is that their people remain

• under valued
• under trained
• under utilized
• poorly motivated, and consequently
• perform well below their true capability

the rate of change facing organizations has never been greater and organizations must absorb
and manage change at a much faster rate than in the past. In order to implement a successful
business strategy to face this challenge, organizations, large or small, must ensure that they
have the right people capable of delivering the strategy.

21
The market place for talented, skilled people is competitive and expensive. Taking on new staff
can be disruptive to existing employees. Also, it takes time to develop 'cultural awareness',
product/ process/ organization knowledge and experience for new staff members.

As organizations vary in size, aims, functions, complexity, construction, the physical nature of
their product, and appeal as employers, so do the contributions of human resource
management. But, in most the ultimate aim of the function is to: "ensure that at all times the
business is correctly staffed by the right number of people with the skills relevant to the
business needs", that is, neither overstaffed nor understaffed in total or in respect of any one
discipline or work grade.

The Human Resources (HR) function provides significant support and

advice to line management. The attraction, preservation and development of high caliber
people are a source of competitive advantage for our business, and are the responsibility of
HR.

HRM is divided in two categories.

1. Managerial
2. Operative
Managerial is to control the activities of human. There is an optimum use
of manpower, organizing and developing.
“Management is the development of the people and not direction of the
thing…Management and personnel administration one the same, they should
never separate.”

22
 2) ORGANISATION OF PERSONAL DEPARTMENT

Generally there are 5 types of organisations .they are partnership, soletradership , jointstock
company , co-operative society & state & central govt owned companies .But interms of
management 2 important types of organisations are used in the prevailing trend .they are called
LINE ORGANISATION & STAFF ORGANISATION .

1) Line type organization

2) Staff type organization

➢ LINE TYPE ORGANISATION

Business or industry structure with self-contained

departments. Authority travels downwards from top and accountability upwards from bottom
along the chain of command, and each department manager has control over his or her
department's affairs and employees.

➢ STAFF TYPE ORGANISATION

In this type of organization all employee have their some authority. In this type of
organization all the authority & responsibility is on the head of the department. This type of
organization is very important & also a useful for this company.

23
 LINE TYPE ORGANISATION

Managing
Director

Sales & QA/QC

Production Human
Manufacturing MANAGER
Manager Resource
Manager
Manager
&manufacturing
Supervisor Supervisor Supervisor
Prepare Product- A Product- B
Maintenance Assistant Chemist
Chemist (R& D)
(Analyst)
Assistant
electrical

Assistant
mechanical

24
 3) RECRUITMENT SELECTION& INDUCTION

RECRUITMENT:
Process of identifying and hiring best-qualified candidate (from within or outside
of an organization) for a job vacancy, in a most timely and cost effective manner.
Recruitment refers to the process of sourcing, screening, and selecting people for a job
at an organization or firm, or for a vacancy in a volunteer-based organization or community
group. While generalist managers or administrators can undertake some components of the
recruitment process, mid- and large-size organizations and companies often retain professional
recruiters or outsource some of the process to recruitment agencies. External recruitment is the
process of attracting and selecting employees from outside the organisation.
recruitment industry has four main types of agencies: employment agencies,
recruitment websites and job search engines, "headhunters" for executive and professional
recruitment, and in-house recruitment. The stages in recruitment include sourcing candidates
by advertising or other methods, and screening and selecting potential candidates using tests
or interviews.
The recruitment of managerial and administrative level of person. The PAR D. &C
recruitment is very good because how can company. So recruitment process are done in the 15
or 20 year in once time because all the supervisors and workers are regular in the work.

25
SELECTION :
Selection is the process of picking individuals out of pool of job applicants) with
requisite qualifications and competence to fill jobs in organization

Selection means the right person for the right job. Selection means choice that is a
choice of person suitable for the job out of several people offered, their services to the
organization. It is in this way, Decision-making process by which management can feed out
the undesirable person and select the most suitable persons.
Following are some common selection techniques.
1. Searching of application 6. Written & Oral Test
2. Interview 7. Final Selection By interview
3. Selection Test 8. Placement
4. Physical Examination
5. Checking Reference

26
INDUCTION :

Induction is in the Decision Making, Problem Solving, & Strategy and Information &
Knowledge Management subjects.

Induction , also called orientation is designed to provide a new employee with the information
he or she needs to function comfortably and effectively in the organization .

It is a planned introduction of new hires to their jobs, their peers and the company

In the, PAR DRUGS & CHEMICAL PVT. LTD. They use one method for
induction. They first think about what is requirement of firm than they are going for other
process

27
 4) TRAINING AND DEVELOPMENT

TRAINING:

It is a learning process that involves the acquisition of knowledge, sharpening of

skills, concepts, rules, or changing of attitudes and behaviours to enhance the performance of
employees.

activities designed to facilitate the learning and development of new and existing
skills, and to improve the performance of specific tasks or roles. Training may involve
structured programs or more informal and interactive activities—such as group discussion or
role playing—which promote experiential learning. A wide variety of activities, including
classroom-based courses, on-the-job training, and business or simulation games, are used for
training. Audio-visual and multimedia aids such as videos and CD-ROMs may also be
employed

Training may be provided by an internal training officer or department, or by

external training organizations. The effectiveness of training can be maximized by conducting
a training needs analysis beforehand, and following up with evaluation of training. Training
should result in individual learning and enhanced organizational performance.
Training is systematic modification of behaviour through learning which occurs as
a result of education , instruction , development , and plan experience so training that prepare
people to perform there present job better .

There are some training methods which are as under

1. off the job training
2. on the job training

Off the job training include the training like lecture, conference, meeting, role play,
Programme instruction . vestibule training
On the job training include coaching , job rotation , mentoring , commitee assignment

28
Needs or Basic purpose of Training
 To increase the productivity
 To improve quality of order
 To help the company in fulfilling its future personnel needs
 To improve organization climate
 To improve health and safety.

There are many types of training from those some types are decrypted below.
╬ On the job Training
╬ Vestibule
╬ Demonstration
╬ Simulation
╬ Apprenticeship
╬ Class-room method
▪ Lecture
▪ Conference
▪ Case Study
▪ Role Playing
▪ Programmed Instruction
╬ Other Training method
▪ Association
▪ Audiovisual

29
DEVELOPMENT:

Human development is the study of how people develop on physical, intellectual and social
levels. It probes the different stages of life to better understand how people work.

Human Resource Development is the frameworks for helping employees develop their
personal and organizational skills, knowledge, and abilities. Human Resource Development
includes such opportunities as employee training, employee career development, performance
management and development, coaching, succession planning, key employee identification,
tuition assistance, and organization development.

The focus of all aspects of Human Resource Development is on developing the most superior
workforce so that the organization and individual employees can accomplish their work goals
in service to customers.

Human Resource Development can be formal such as in classroom training, a college course,
or an organizational planned change effort. Or, Human Resource Development can be informal
as in employee coaching by a manager. Healthy organizations believe in Human Resource
Development and cover all of these bases.

Systematic use of scientific and technical knowledge to meet specific objectives or

requirements. Extension of the theoretical or practical aspects of a concept, design, discovery,
or invention.

30
 5) JOB DESCRIPTION
“Job description” is an important document which is basically descriptive in
nature and contains a statement of the job analysis. It provides both organizational information
and functional information. Job descriptive is a part of HRP job description describes “Job
and not job holders”

A job is a collection of tasks and responsibilities that an employee is responsible

to conduct. Jobs have titles. A task is a typically defined as a unit of work, that is, a set of
activities needed to produce some result, e.g., vacuuming a carpet, writing a memo, sorting the
mail, etc. Complex positions in the organization may include a large number of tasks, which
are sometimes referred to as functions. Job descriptions are lists of the general tasks, or
functions, and responsibilities of a position. Typically, they also include to whom the position
reports, specifications such as the qualifications needed by the person in the job, salary range
for the position, etc. Job descriptions are usually developed by conducting a job analysis,
which includes examining the tasks and sequences of tasks necessary to perform the job. The
analysis looks at the areas of knowledge and skills needed by the job. Note that a role is the
set of responsibilities or expected results associated with a job. A job usually includes several
roles.

Job descriptions are written statements that describe the duties, responsibilities, most
important contributions and outcomes needed from a position, required qualifications of
candidates, and the reporting relationship of a particular job.

The process of developing a job description helps you articulate the most important
outcomes you need from an employee performing a particular job. A job description is also a
communication tool that tells coworkers where their job leaves off and the job of another starts.
A well-written job description tells an employee where their job fits within the overall
department and the overall company.

31
 6) PROMOTION & TRANSFER POLICY

PROMOTION POLICY :

Promoting from within is good business practice and has been shown to be a powerful
employee motivator. Internal promotion policies can generate loyalty through the recognition
of individual merit and improved morale by fulfilling employees’ need for increased status.

This promotion policy offers employers guidelines on the importance of having a well-
developed job posting policy and offers expert advice on:

· Promotion from Within

· Creating Equal Opportunities for Promotion
· Role of Supervisors
· Information About Job Openings
· Time Limit
· Outside Hiring
· Factors for Promotion
· Medical Examinations
· Introductory Period and Performance Evaluations
· Posting of Job Openings
· Glass Ceiling Audits and Selection Discrimination
· Aptitude or Achievement Tests

Promotion requirements arises by,

1. Resignation
2. Termination
3. Death of any employees
4. Vacancy for new position etc.
In many company, promotion is based on either seniority or
qualification. But in PAR D&C. promotion is given by neither on the base of seniority
nor for qualification. PAR D&C’S. Policy is quite different from others. The required
feature for promotion is capacity and willingness.

32
TRANSFER POLICY :
Job transfers generally fall into one of two categories: those initiated by
management or those made in response to an employee’s request. Transfers initiated by the
employer may be necessary because of temporary workload imbalances; the need to rotate
employees to limit exposure to harmful conditions; corporate restructuring; dislocations
caused by job elimination or reductions in force; and demotions in response to disciplinary or
performance problems. Employees may initiate a transfer because they want new or broader
experience; there is friction among coworkers; they want to better use their skills; or they
need accommodation for disabilities or family care responsibilities. Either way, transfers may
be temporary or long-term, depending on the organization’s business needs.

PAR D&C. has information transfer policy. There isn’t any transfer system or policy
like government transfer policy. Any employee can be transferred to any plant and that is the
reason why PAR D&C’S work is going smoothly. Not any other industry has applied this
system, not only internal transfer; external transfer can also be done. But this is very limited.
If any employee wants transfer and gives application report to the company, then company
transfers him to other sites. It is happened once in two or four years. But probably transfer is
nil.

33
 7) PERFORMANCE APPRAISAL SYSTEM

People differ in their abilities and their aptitudes. There is always some difference
between the quality and quantity of the same work on the same job being done by two different
people. Therefore, performance management and performance appraisal is necessary to
understand each employee’s abilities, competencies and relative merit and worth for the
organization. Performance appraisal rates the employees in terms of their performance.
Performance appraisals are widely used in the society. The history of performance
appraisal can be dated back to the 20th century and then to the second world war when the
merit rating was used for the first time. An employer evaluating their employees is a very old
concept. Performance appraisals are an indispensable part of performance measurement.
. The latest mantra being followed by organizations across the world being – “get paid
according to what you contribute” – the focus of the organizations is turning to performance
management and specifically to individual performance. Performance appraisal helps to rate
the performance of the employees and evaluate their contribution towards the organizational
goals. If the process of performance appraisals is formal and properly structured, it helps the
employees to clearly understand their roles and responsibilities and give direction to the
individual’s performance. It helps to align the individual performances with the organizational
goals and also review their performance.

Performance appraisal methods:

Although there is no easy way classifying all of the various kinds of performance
appraisal methods that have been devised as under.
Rating scale method
Checklist method
Forced choice method
Critical incident technique
Essay appraisal

34
The employee performance appraisal is based on:
Past year performance
Competence requirement
Future anticipation form employment
Employee’s personal development
Motivation
Every year the company took place a performance appraises to appraise the
employee activity during the year. The performance appraisal is done by the directors or by
functional heads. If there is any need of training then also the company took place a p. a. is
based on above criteria. If there is any trying identifying by p.a. of employees then the persons
have given training. Thus performance appraisal forms an important of HRM. Performance
appraisal are mainly use for three purpose

a. As a basic of reward allocation such as salary increment, promotion and

other rewards.

b. Performance appraisal will point out the weakness of employees and will
spot the areas where development efforts are needed. Performance
appraisal is a tool for identification of deficiency.

c. It can be used for the selection and development program. It will

differentiate satisfactory performers from unsatisfactory ones. The
performance appraisal will help the management to functions rating to
selections, development, salary, promotion, penalties, discharge and
retrenchment.

35
 8) WAGE & SALARY ADMINISTRATION

The goal of the Institute's salary administration program is to provide an

equitable and systematic means of compensating its various categories of employees in
relation to their assigned duties and responsibilities and, as much as possible, recognize
differences in individual performance levels. Further, it is the Institute's policy that its salary
administration practices and compensation levels be competitive with those in like
organizations for comparable job categories.

The basic purpose of wages and salary administration is to maintain

equitable wages and salary structure. Proper and regular wages indirectly motivates the
workers and increase his efficiency.

Wages refers to the compensation payable to the labors for performing his
job wages usually refers to hourly or daily rat paid to such group for maintaining employees
( blue collar workers ) salary normally refers to the weekly for monthly rates paid to the
clerical administrative and professional, employees( white collar )

36
 9) WORKING OF E.S.I. SCHEME

INTRODUCTION:
The ESI Act.1948 envisages an integrated social insurance scheme to provide social
security to the industrial workers in certain contingencies such as sickness, maternity,
temporary or permanent physical disablement and death due to employment injury
resulting in loss of wages or earning capacity. The act also guarantees full medical care
to the workers and their dependent family members

BENEFITS UNDER THE ACT:

The following benefits are provided to the insured persons(I.Ps.)and their family members
under the provisions of ESI Act.

1) Medical Benefit.

2) Sickness Benefit

3) Maternity Benefit

4) Disablement Benefit.

5) Dependant’s Benefit.

6) Funeral benefit.

The First benefit i.e medical Benefit is provided by the State Government through the ESI
Scheme and the remaining five benefits, which are cash benefits are provided by the ESI
Corporation directly.

In Par D & C PVT. LTD. for E.S.I., fund is created from the contribution received
from the employees, various grants, donation and gifts received from others. These facilities
are very help full to the workers if anything happens to them and give them guarantee of
compensation

COTRIBUTION:
The contributions from the employees are about 1.75% of his bally wages and from an
employer it is 4.75% of profit.

37
 10) PROVIDENT FUNDS SCHEME

The Employees' Provident Fund & MP Act,1952 is an important piece of Labour

Welfare legislation enacted by the Parliament to provide social security benefits to the workers
. At present , the Act and the Schemes framed there under provides for three types of benefits
-Contributory Provident Fund , Pensionary benefits to the employees/ family members and the
insurance cover to the members of the Provident Fund.
The object of the Act in 1952 was the institution of the compulsory contributory
Provident Fund to the employees to which both the employee and the employer
would contribute . The Employees' Provident Fund Scheme was accordingly framed
under the Act and it came into effect from 1-11-1952 . Initally the title of the Act
was , "The Provident Fund Act 1952".

On a review of the working of the scheme over the years , it was found that in the
event of the premature death of the employees the accumulation in the Provident
Fund were too meagre to the family of the deceased .Thus another social security
benefit of providing Family Pension through the Employees' Family Pension Fund
Scheme , 1971 was introduced by amending the Act . At this stage , the Act was
renamed as "The Employees' Provident Fund & Family Pension Act , 1952" and the
Employees' Family Pension Scheme came into force on 1-3-1971 .

The Act was further amended in the year 1976 to introduce another social security
benefit to provide an insurance cover to the members of the Provident Fund in
covered establishment . The Employees' Deposit Linked Insurance Scheme , 1976
came into force from 1-8-1976 . The name of the Act was then changed to the present
one i.e. 'The Employees' Provident Fund & MP Act,1952' . From 16-11-1995 , the
Employees' Pension Scheme has come into force which provides pension to retiring
employees on reaching 50/58 years of age , widow pension , children pension and
nominee pension on death of the member to his eligible family members . This
replaces the Employees' Family Pension Scheme 1971 .

38
 The provisions of the Employees' Provident Fund & MP Act , 1952 extends to whole
of India except the State of Jammu & Kashmir and also the State of Sikkim where it
has not been notified so far after its annexation with the Union of India .

Contribution to finance the P.F. scheme 12% of basic salary plus D.A. is deducted from
the salary or the employee give wage of the employee and equal contributor. But in
factories employing 50 or more employee the contribution 12% of the basic salary plus
D.A.

The employer should remit the total amount of his contribution within 15 days of the
close of every month. In his employee has worked for at least 15 year or more then double the
amount of his contribution will be paid. But if he has plus 8.3% of the employee’s contribution
as P.F. Benefits.

39
 11) COLLECTIVE BARGAINING&AGREEMENT

Collective bargaining is the process whereby workers

organize together to meet, converse, and compromise upon the work environment with their
employers. In various national labor and employment law contexts, collective bargaining
takes on a more specific legal meaning. In a broad sense, however, it is the coming together
of workers to negotiate their employment.

A collective agreement is a labor contract between an employer and one or more unions.
Collective bargaining consists of the process of negotiation between representatives of a union
and employers (represented by management, in some countries by employers' organization) in
respect of the terms and conditions of employment of employees, such as wages, hours of
work, working conditions and grievance-procedures, and about the rights and responsibilities
of trade unions. The parties often refer to the result of the negotiation as a Collective
Bargaining Agreement (CBA) or as a Collective Employment Agreement

The collective Bargaining and agreement the management term stands on one side And
the union on the other side. For the discussion here usually the demands of the union and the
polices of the company, each clash each other all discussed. Both the parties try to come as
agreement protecting. Their interest and keeping the opposite part satisfied. While the
discussion the representative of both the parties takes into consideration.

The prevailing condition in the industry the laws and act impose by the government
situation in the factory and the department concerned the polices of the company working
condition etc.

40
 12) EMPLOYEES SERVICES

PAR DRUGS & CHEMICAL takes all decisions by keeping the employee in center.
PAR DRUGS & CHEMICAL has open door policy. Appointment is not necessary to meet an
employee. Every decision is taken keeping all employees in mind.

PAR DRUGS & CHEMICAL threats all its employees as equal human
beings whether he is workers, staff, supervisor or manager, there isn’t any difference among
them, employees are provided services and benefit monitory and non-monitory items.
The link between the workers & owners of the company is
very well. Though most of the workers in the industry are on the contract base, they are given
very well services. The condition of the work is very good that each & every worker likes to
work efficiently in that atmosphere. It is like a joint family works for their members of the
family. The point is to be noted that there is not a single strike in the whole history of the
company; this shows how workers kept carefully in the company. After all good industrial
relation lies between workers & owners.

The service of the tea twice in a day is appreciable & workers are given daily salary
.moreover, they are given medical treatment in case of accidents.

In short workers in the industry & entire staff of the industry is very happy with the
services given by the owners always try to make their best efforts for the welfare of the industry
& the workers.

41
42
 CONTENTS
No. Particulars Page No

1) INTRODUCTION

2) PRODUCT PLANNING

3) PROCESS FLOW

4) EXPORTS

5) MARKET SEGMANTATION

6) PRICING POLICY

7) MARKETING RESEARCH

1) INTRODUCTION
43
 Several definitions have been proposed for the term marketing. Each tends to
emphasize different issues. Memorizing a definition is unlikely to be useful; ultimately, it
makes more sense to thinking of ways to benefit from creating customer value in the most
effective way, subject to ethical and other constraints that one may have. The 2006 and 2007
definitions offered by the American Marketing Association are relatively similar, with the 2007
appearing a bit more concise. Note that the definitions make several points.
When producer has finished manufacturing of product, it is necessary to bring that
product in the market so that producer can go on making that product constantly. In between
the producer & consumer many things come like transport, decision relating to the price,
related to the quality & quantity, packing &much more. The marketing management will
handle these all. “Sound marketing is critical to the success of any organization large or small,
for profit or non-profit domestic or global”.
MARKETING: -
“Marketing is a social & managerial process by which individuals or group of persons
obtains what they want & need through creating, offering, exchanging product of value with
others”
MARKETING: -
AMA, 1948; “ Marketing was the performance of business activities directed toward,
and incident to the flow of good and services from producer to consumer” a mere highway
Marketing is societal process by which individual and groups obtain what they need and want
through creating, offering and freely exchanging products and services of value with others.
MARKETING: -
“The process of planning and executing the conception, pricing, promotion and
distribution of ideas and goods and services to create exchanges that satisfy individual and
organizational objectives” - AMA, 1985

44
 2) PRODUCT PLANNING

The product plan helps resolve issues related the markets, the types
of products and the opportunities that the company will invest in and the resources required to
support product development. More specifically, the product plan is used to:

• Define an overall strategy for products to guide selection of development projects;

• Define target markets, customers, competitive strengths, and a competition strategy
(e.g., competing head-on or finding a market niche);
• Position planned products relative to competitive products and identify what will
differentiate or distinguish these products from the competition;
• Rationalize these competing development projects and establish priorities for
development projects;
• Provide a high-level schedule of various development projects; and
• Estimate development resources and balance project resource requirements with a
budget in the overall business plan.

Few companies have a formal product planning process, let alone a rigorous process. While a
product plan is generally prepared on an annual basis, it should be reviewed and updated at
least quarterly, if not monthly. Market conditions will change, new product opportunities will
be identified, and new product technology will emerge all causing a potential impact to the
product plan. These opportunities need to be evaluated and the product plan changed if needed.
This changes may result in re-prioritizing development projects or making a decision to hire
additional development personnel to undertake a new development opportunity.

Here in this company product planning involves following things:-

Product Quality
Product Features
Product design
Branded Products
Storing Product

45
 PRODUCT PLANNING PROCESS :
The product planning process is one of the most controversial
within any company. Everyone wants a hand in new product definition and almost everyone
will have contributions that will make a new product successful. With all these interested
parties, you are going to need a system to help you through the product planning process and
a way to decide which ideas have the most merit. This system also needs to incorporate
customer feedback, assure that important new product ideas are approved, and that
development of them initiated immediately. What follows is a product planning system that
works well for most companies.

The above diagram outlines the phases in the product planning cycle. In any given company,
these steps may be condensed or combined. For example, some companies may use a single
document to cover both the Market Requirements Document and the Functional Specification.

3) PROCESS FLOW :
46
 Equity generated

Never
Production

QA/QE HEAD
OR R & D HEAD

Exiting product
Specification

Production head

47
 4) EXPORTS

Exports means the company has sales his product to an international market means
the out of the country. This company PAR DRUGS & CHEMICAL PVT. LTD. is a good
exporter in chemical.
The company is exporting its chemical in many countries in the world. Which are
BANGLADESH, SHRILANKA, CORIA, IRAN, NIGERIA, ZIMBABWE and many
others? The company is export of 25% chemical of its overall production. The company is
selling its product or chemical through agent and all deal through the agent.
The company has exported its products by shipping.

48
 5) MARKET SEGMANTATION

A market segment is a subgroup of people or organizations sharing one or more

characteristics that cause them to have similar product and/or service needs. A true market
segment meets all of the following criteria: it is distinct from other segments (different
segments have different needs), it is homogeneous within the segment (exhibits common
needs); it responds similarly to a market stimulus, and it can be reached by a market
intervention.

Market segmentation is the process of classifying a market into distinct subsets (segments) that
behave in similar ways or have similar needs. The segmentation process in itself consists of
segment identification, segment characterization, segment evaluation and target segment
selection. If each segment is fairly homogeneous in its needs and attitudes, it is likely to
respond similarly to a given marketing strategy. That is, they are likely to have similar feelings
and ideas about a marketing mix comprising a given product or service, sold at a given price,
and distributed and promoted in a certain way.

Broadly, markets can be divided according to a number of general criteria, such as by industry
or public versus private sector. Generally segmentation is conducted using demographic,
geographic, attitudinal or behavioral data. Small segments are often termed niche markets or
specialty markets. However, all segments fall into either consumer or industrial markets.
Although industrial market segmentation is quite different from consumer market
segmentation, both have similar objectives. All of these methods of segmentation are merely
proxies for true segments, which don't always fit into convenient demographic boundaries.

The process of segmentation is distinct from targeting (choosing which segments to address)
and positioning (designing an appropriate marketing mix for each segment). The overall intent
is to identify groups of similar customers and potential customers; to prioritize the groups to
address; to understand their behaviour; and to respond with appropriate marketing strategies
that satisfy the different preferences of each chosen segment. Revenues are thus improved.

6) PRICING POLICY
49
 INTRODUCTION
Pricing is the only elements in the marketing mix that product revenue. Pricing
problem arises when a firm to set a price for the first time. This happens when the firm develops
a new area of acquires a new product. In this company pricing has given more important.

PRICING FROM THE VIEW POINT OF COMPANY

PAR DRUGS & CHEMICAL PVT. LTD. enjoying a perfect competition over their
produces in the field DRUGS & CHEMICAL of production. It can charge responsible price
it is mentioned and society oriented concern about price is included cost of production, profit
other expenses, transportation cost act. Thus pricing policy taken in to consideration is very
simple in PAR DRUGS & CHEMICAL PVT. LTD.
many of the company ,takes into consideration the following factors while
fixing the price.

➢ Price of raw material

➢ Cost of production
➢ Competitors’ price
➢ Creditability in market
➢ Wages, salary & liabilities of employee
➢ Govt. direct & in-direct taxes
➢ Advertising & Business promotional expenses
➢ Sales Tax & Professional Tax
➢ Municipal Conroy & Land and Building taxes
➢ Interest of capital investment

7) MARKET RESEARCH

50
 Marketing research, or market research, is a form of business research and
is generally divided into two categories: consumer market research and business-to-business
(B2B) market research, which was previously known as industrial marketing research.
Consumer marketing research studies the buying habits of individual people while business-
to-business marketing research investigates the markets for products sold by one business to
another.

Consumer market research is a form of applied sociology that concentrates

on understanding the behaviours, whims and preferences, of consumers in a market-based
economy, and aims to understand the effects and comparative success of marketing campaigns.
The field of consumer marketing research as a statistical science was pioneered by Arthur
Nielsen with the founding of the A Nielsen Company in 1923[1].

Thus marketing research is the systematic and objective identification, collection, analysis,
and dissemination of information for the purpose of assisting management in decision making
related to the identification and solution of problems and opportunities in marketing.[2] The
goal of marketing research is to identify and assess how changing elements of the marketing
mix impacts customer behavior.

8) CHANNEL OF DISTRIBUTION
51
 Now in modern economy industries grows like anything. These industries
goods and services. In today’s economy most producers do not sell their goods directly to the
final users. Between them the final users a host of marketing intermediaries performing a
variety agent, etc. The company chosen channel intimately affects all other marketing
decisions.
The number of channel involved can describe distribution channels.
Following figure shows several consumer distribution channels of different length.

Channel 1
Manufacturer Consumer

Channel 2
Manufacturer Retailer Consumer

Channel 3 Manufacturer Wholesaler Retailer

Consumer

52
 CONTENTS
No. Particulars page no
53
1) INTRODUCTION.

2) ORGANIZATION OF FINANCIAL DEPARTMENT

3) FINANCIAL PLANNING.

4) CAPITALIZATION.

5) CAPITAL STRUCTURE.

6) MANAGEMENT OF FIXED ASSETS.

7) MANAGEMENT OF WORKING CAPITAL.

8) PROFITABILITY & DIVIDEND DISTRYBUTION.

9) RATIO ANALYSIS

1) INTRODUCTION

Financial management in the small firm is characterized,

in many different cases, by the need to confront a somewhat different set of problems and
54
opportunities than those confronted by a large corporation. One immediate and obvious
difference is that a majority of smaller firms do not normally have the opportunity to publicly
sell issues of stocks or bonds in order to raise funds. The owner-manager of a smaller firm
must rely primarily on trade credit, bank financing, lease financing, and personal equity to
finance the business. One therefore faces a much more severely restricted set of financing
alternatives than those faced by the financial vice president or treasurer of a large corporation.

On the other hand, many financial problems facing the small firm are very similar to those of
larger corporations. For example, the analysis required for a long-term investment decision
such as the purchase of heavy machinery or the evaluation of lease-buy alternatives, is
essentially the same regardless of the size of the firm. Once the decision is made, the financing
alternatives available to the firm may be radically different, but the decision process will be
generally similar.

One area of particular concern for the smaller business owner lies in the effective management
of working capital. Net working capital is defined as the difference between current assets and
current liabilities and is often thought of as the "circulating capital" of the business. Lack of
control in this crucial area is a primary cause of business failure in both small and large firms.

The business manager must continually be alert to changes in working capital accounts, the
cause of these changes and the implications of these changes for the financial health of the
company. One convenient and effective method to highlight the key managerial requirements
in this area is to view working capital in terms of its major components:

2) ORGANIZATION OF FINANCIAL DEPARTMENT

Managing Directors

55
 Finance Controller

Finance Department

Financial Advisor

Treasure
The finance department is undertakes following the various types of function.

➢ Estimating of financial requirement for the firm

➢ Searching new resources of finance
➢ Recording the business transactions
➢ Maintaining the books of account of cash and other
➢ Designing the capital structure
➢ Management of cash
➢ Management of dealing with cash
➢ Management of fixed assets
➢ Management of working capital

3) FINANCIAL PLANNING.
A financial planning is required to meet the future requirements, as
finance is the soul of the industry.
Each department of the organization it’s asked to make is budgetary plan as
per their requirements.
Financial planning is one of the most important functions of finance
department, financial means make a budget, which relate to the finance and include all the
56
information about the finance. There are two types of capital are mainly required in a
business, from duration point of view. Two types of financial planning.

➢ Long term financial planning.

Land: - Quantity of land required and the rate at which it is available is taken into
consideration.
Building: - Depending on the working space required with 25% more provision is
worked out and then the planning is being done regarding the electricity.
Water resources: - Generally, the industry is consuming more water a planning is
done on long-term basis to minimize the expenses as well as to save the natural
resources. Besides this is the water utilization is arranged more over it also consisting
of water storage tank.
Laboratory: - To have a very good quality control system laboratory is there in the
industry for long term planning. This factor should not be neglected in PAR DRUGS&
CHEMICALS use a laboratory in testing of chemicals

➢ Short term financial planning.

Monthly salary & wages: - Generally the total salary and wages payable to the
employees and workers is planned out.

57
Electricity & Food: - The total expenses to be incurred for electricity and fuel like
coal, petrol, telegraph and stationary during the month are planned out.
Advertisement and sales promotion expenses: - Expenses to be incurred at the month
regarding advertisement and sales promotion are into consideration.

4) CAPITALIZATION

58
Intro of Capitalization: - Capitalisation means total amount of company’s capital or total
value of its capital structure.
Over Capitalisation: - When the real value of shares is less than its book value the
company is said to be over capitalized.
Under Capitalisation: - Under Capitalisation is a situation opposite to over capitalisation.
It is a situation in which the real value of a company’s shares as determined by its earning
capacity is higher than their book value.
Liquidity Ratio (LR): - LR shows the amt of cash available to meet immediate payment
LR should not be too high or too law. It wills unnecessary help up the current assets and if LR
is low means capital is insufficient and this will reduce the confidence of the customers. So a
proper balance is requiring.

There are mainly three types of capitalisation.

➢ Over capitalisation
➢ Under capitalisation
➢ Fair capitalisation (Optimum)

Capitalization is the process of determining the quantum of funds that a firm would
require to run its business. It includes capital stock and debt with in its coverage.
Capitalization, appraisal or estimation of present values.
In the PAR DRUGS & CHEMICAL PVT. LTD. the manager of factory takes all the
decision about capitalization.

5) CAPITAL STRUCTURE.

In finance, capital structure refers to the way a corporation finances its

assets through some combination of equity, debt, or hybrid securities. A firm's capital structure
is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion

59
in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The
firm's ratio of debt to total financing, 80% in this example is referred to as the firm's leverage.
In reality, capital structure may be highly complex and include tens of sources.

The Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the
basis for modern thinking on capital structure, though it is generally viewed as a purely
theoretical result since it assumes away many important factors in the capital structure
decision. The theorem states that, in a perfect market, the value of a firm is irrelevant to how
that firm is financed. This result provides the base with which to examine real world reasons
why capital structure is relevant, that is, a company's value is affected by the capital structure
it employs. These other reasons include bankruptcy costs, agency costs, taxes, information
asymmetry, to name some. This analysis can then be extended to look at whether there is in
fact an optimal capital structure: the one which maximizes the value of the firm. The capital
strcture of the PAR DRUGS & CHEMICALS are as follow

Share capital 85, 00,180

Reserves & surplus 14, 47,917
99, 48,097

6) MANAGEMENT OF FIXED ASSETS

Unit does not change any complicated management of fixed assets. They manage
according to the requirement department of fixed assets.
When an asset become old or absolute of GM and executive is taken.
Maintenance fund is created for maintenance of fixed assets. Market value is considered rather
than book value.

60
 Fixed Assets are the non-liquid assets that are required for the company's
day-to-day operations. They include facilities, equipment, and real property .capital budgeting
is also one type of management of fixed assets

Capital budgeting (or investment appraisal) is the planning process used

to determine whether a firm's long term investments such as new machinery, replacement
machinery, new plants, new products, and research and development projects are worth
pursuing.

Many formal methods are used in capital budgeting, including the techniques such as

➢ Net present value

➢ Profitability index
➢ Internal rate of return
➢ Modified Internal Rate of Return, and
➢ Equivalent annuity.

7) MANAGEMENT OF WORKING CAPITAL.

Company will require capital according to its
turnover the working capital has got direct relationship with profitability of the company
holding of working capital or liquid assets may earn nothing. There are mainly three
components of working capital they are as follow.

61
 1. Inventories
2. Receivables
3. Cash and Bank Balance

A managerial accounting strategy focusing on maintaining efficient levels of both components

of working capital, current assets and current liabilities, in respect to each other. Working
capital management ensures a company has sufficient cash flow in order to meet its short-term
debt obligations and operating expenses.
Implementing an effective working
capital management system is an excellent way for many companies to improve their earnings.
The two main aspects of working capital management are ratio analysis and management of
individual components of working capital.
A few key performance ratios of a working capital management system are the working capital
ratio, inventory turnover and the collection ratio. Ratio analysis will lead management to
identify areas of focus such as inventory management, cash management, accounts receivable
and payable management.

8) PROFITABILITY
Profit is the lifeblood of any business. As blood is important for life, same profit is important
for the survival of any business.

62
 Ability of a firm to generate net income on a consistent basis. It is often
measured by price to earnings ratio. Profitability is in the Accounting & Auditing and
Banking, Commerce & Finance subjects.

profitability appears in the definitions of the following terms: operating income, bail out,
return on equity (ROE), economic value added (EVA), return on assets managed (ROAM),
basic earnings power, adaptive control method, gross income, return on average assets,
financial analysis

PAR DRUGS & CHEMICALS makes profit gradually from years and
it has strong financial position. PAR DRUGS & CHEMICAL there is increase in profit every
year. Profit means surplus over cost. In other words, it is difference between total sales
proceeds and total cost of production. From the point of view of interest, profit is percentage
return on capital investment.

9) RATIO ANALYSIS

An integral aspect of fundamental analysis involves performing what many

would call “ratio analysis”. This involves calculating a number of different industry standard
ratios and comparing them to various benchmarks. The benchmarks can be the ratios of other
competitors, industry average ratios, or industry “rules-of-thumb”. There’s no set procedure
63
for performing ratio analysis because it all depends on the type of company you’re analyzing
– certain industries have industry specific ratios. Regardless, this article will give you an
overview of some of the standard ratios and what they may tell us about a company.

Ratio Analysis can be defined as the study and interpretation of

relationships between various financial variables, by investors or lenders. It is a quantitative
investment technique used for comparing a company's financial performance to the market in
general. A change in these ratios helps to bring about a change in the way a company works.

Types of ratio are as follow

➢ Current ratio
➢ Quick ratio
➢ Activity ratio
➢ Net profit ratio
➢ Debtor ratio
➢ Acid turn over
➢ Inventory turn over
➢ Gross profit ratio
➢ Creditor ratio

64
65
66