e-ISSN: 2582-5208

International Research Journal of Modernization in Engineering Technology and Science

Volume:02/Issue:04/April-2020 www.irjmets.com

A STUDY ON FINANCIAL PLANNING FOR SALARIED EMPLOYEE AND

FOR TAX SAVING AT SMIK SYSTEMS, COIMBATORE CITY
Mr. Jegan M*1, Ms. D. Caroline Rebecca*2
*1
MBA, Sri Ramakrishna Business School, Sri Ramakrishna Arts and Science college, Coimbatore,
India.
*2
Assistant Professor, MBA, M.Phil, Sri Ramakrishna Business School, Sri Ramakrishna Arts and
Science college, Coimbatore, India.

ABSTRACT
Result View Original Financial Planning is that the process of meeting life goals through the right management
of finances. Financial planning may be a process that an individual goes through to seek out where they're now
(financially), determine where they want to be in the future, and what they are going to do to get there. Financial
Planning provides direction and meaning to take financial decisions. It allows understanding of how each
financial decision an individual makes affects other areas of their finances. For example, buying a specific
investment product might help to pay off mortgage faster or it'd delay the retirement significantly. By viewing
each financial decision as a part of the whole, one can consider its short and long- term effects on their life
goals.
KEYWORDS: Current Ratio, Quick Ratio, Gross profit ratio.

I. INTRODUTION
India financial planning refers only investing money within the tax saving instruments. Thanks to the plethora of
tax exemptions and incentives available under various law sections and subsections of the Income Tax Act. This
led to a situation where people invest money without really understanding the real logic or the rationale behind
the investments actually made. Further the inner spirit in investment seems to be the ‘rebate’ they receive from
the individual agents and advisors. The more the rebate an agent gives, the person are in the belief that they have
made an intelligent decision of selecting the proper agent who has offered them more rebate. In the process what
is not being realized is that the incontrovertible fact that the financial future is getting compromised.

II. OBJECTIVES OF THE STUDY

1. To understand the financial planning done in India.
2. To research the characteristics of various asset class.
3. To review changes in financial planning with change in age.
Need and Importance Of The Study:
1. This project helps the managements for expanding the dualism & the project viability & present availability
of funds.
2. This project is useful as it companies the present year data with the previous year data and thereby it shows
the trend analysis, i.e. increasing fund or decreasing fund.
III. REVIEW OF LITERATURE
Savita and Lokesh Gautam(2013), Tax Planning: A Study of Tax Saving Instruments, International Journal of
Management and Social Sciences Research (IJMSSR) Volume 2, No. 5, ISSN: 2319-4421, The paper studied
the options for investments for tax savings ,the object of the study was to find the most popular form of
investment for tax savings. It was observed that investment by way of premium paid for life insurance policy,
followed by provident fund contribution and fixed deposits savings were the most popular forms of investment.
The other forms of investment followed. The paper also revealed that the savings for tax purpose was the

www.irjmets.com @International Research Journal of Modernization in Engineering, Technology and Science

[362]
 e-ISSN: 2582-5208
International Research Journal of Modernization in Engineering Technology and Science
Volume:02/Issue:04/April-2020 www.irjmets.com
maximum in age group 50-60 and least in age group 20-30. It also states that as income increase the investment
for tax saving increases. If the income is between Rs. 5 lakhs to Rs. 10 lakhs investment is Rs. 70000 to Rs.
90000.

IV. RESEARCH METHODOLOGY

Sample design is actually based on principles of sample survey done. Samplings were decided on socio
demographic factors such as income and age group. The number of respondent were restricted to 50 thanks to
lack of time. Sampling unit was geographical unit where the research was carried in Nariman Point,
Mumbai. Source list for respondents was not predetermined but it was on random basis to choose the samplings.
The various parameters on which the research was to be conducted are:
Research Design : Analytical Method
Sample Procedure Sampling : Probability – Simple Random.
Type Of Data : Secondary Data (Past 5 Year’s Balance Sheet)

V. DATA ANALYSIS AND INTERPRETATION

Current Ratio
The current ratio is a liquidity ratio that measures a firm's ability to pay its short-term liabilities with
its current assets. The current ratio is an measure of liquidity because short-term liabilities are due within the
next year.

Current ratio =

Table no.- 5.1.1: Showing current ratio

Year Times
2014-2015 16.32
2015-2016 0.00
2016-2017 10.12
2017-2018 0.00
2018-2019 0.00
Chart no.5.1.2: Showing current ratio
20

15

10

0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

Interpretation:
From the above table no.4.1.1 it is evident that the current ratio of 2014 – 2015 is ranges from 16.32 times, in
the year 2015– 2016 the ratio is 0, 2016 – 2017 the ratio is 10.12, in the year 2017 – 2018 the ratio decreases to
0 and in the year 2018 – 2019 the ratio decreases to 0. During the year 2014 and 2016 even though the ratio is

www.irjmets.com @International Research Journal of Modernization in Engineering, Technology and Science

[363]
 e-ISSN: 2582-5208
International Research Journal of Modernization in Engineering Technology and Science
Volume:02/Issue:04/April-2020 www.irjmets.com
increased the company is not able to maintain the current ratio. Therefore the liquidity position is not
satisfactory.

Quick Ratio
The quick ratio is an indicator of a company’s short-term liquidity and equity position. Since it indicates the
company’s ability to instantly use its near-cash assets (that is, assets that can be converted quickly to cash) to
pay down its current liabilities, it is also called the acid test ratio. An acid test is a quick test designed to
produce instant results and measures

QR =

Table no.-5.2.1: Showing quick ratio

Year Times

2014-2015 16.32

2015-2016 0.00

2016-2017 10.12

2017-2018 0.00

2018-2019 0.00

Chart no.-5.2.2: Showing quick ratio

18
16
14
12
10
8
6
4
2
0
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

Interpretation
From the above table no.4.2.1 it is evident that the quick ratio of 2014 – 2015 ranges to 16.32 times, in the year
2015 – 2016 the ratio is 0, 2016 – 2017 the ratio is 10.12, in the year 2017 – 2018 the ratio decreases to 0 and in
the year 2018 – 2019 the ratio decreases to 0.
During the two year 2014 and 2016 the ratio has increased the company is not able to maintain the current ratio.
Therefore the quick ratio position is not satisfactory.

Gross Profit Ratio

Gross profit ratio is a profitability ratio that shows the relationship between gross profit and total net sales
revenue eventually. This is a popular tool to evaluate the operational performance of the business organisation.
The ratio is calculated by dividing the gross profit figure by net sales.

www.irjmets.com @International Research Journal of Modernization in Engineering, Technology and Science

[364]
 e-ISSN: 2582-5208
International Research Journal of Modernization in Engineering Technology and Science
Volume:02/Issue:04/April-2020 www.irjmets.com

Gross profit ratio = X 100

Table no.-5.3.1: showing gross profit ratio

Year Percentage

2014-2015 87

2015-2016 100

2016-2017 100

2017-2018 100

2018-2019 100

Chart no.-5.3.2: Showing gross profit ratio

105
100
95
90
85
80
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

Interpretation:
From the above table no.4.3.1 it is evident that the gross profit ratio of the year 2014 – 2015 the ratio is 87%, in
the year 2015 – 2016 the ratio is increased to 100% and in the year 2016 – 2017 the ratio remains 100%, in the
year 2017 – 2018 the ratio is 100% and in the year 2018 – 2019 the ratio is increased to 100%.
During the year the ratio is increased the company is able to maintain the Gross profit ratio. This shows that the
gross profit ratio position is satisfactory.

VI. FINDINGS
 The current ratio is increasing during the period of 2014 – 2015 and again it decreased in the period of 2017
– 2019. This shows that the liquidity position is not satisfactory.
 The quick ratio is increasing during the period of 2014 – 2015 and again it decreased in the period of 2017
– 2019. This shows that the quick ratio position is not satisfactory.
 The gross profit ratio is increasing during the period of 2014 – 2015 and again it decrease in the period of
2015 – 2019. This shows that the gross profit ratio is satisfactory.
VII. SUGGESSTIONS
 For inventory, in order to improve the position, Smik Systems (OPC) Private Limited can reduce the level
of stocks by resorting to phased production i.e. they should produce the requirement and disposing off or
recycling the unserviceable inventories accordingly. However, the low turnover of stock may be due to the
problems with generation of sales. Inventory management is a great concern for Smik Systems especially
stores and spares. The purchase manager must take proper steps for procurement of inventories in the
organization.
 The company must take various steps to decrease the working capital.

www.irjmets.com @International Research Journal of Modernization in Engineering, Technology and Science

[365]
 e-ISSN: 2582-5208
International Research Journal of Modernization in Engineering Technology and Science
Volume:02/Issue:04/April-2020 www.irjmets.com
VIII. CONCLUSION
Tax evasion is a serious crime. In general, assesses show lethargic attitude towards tax planning. This is likely to
land the assesses in financial trouble. Tax planning is a strategy to reduce tax burden. In fact, it helps to save by
encouraging investments in Government Securities. The tax planning reduces the tax burden and also gives
mental satisfaction. If salaried assesses adopt tax planning measures it will help them to save a considerable
amount of their hard earned money in a legal way. When the Government has given a wide chance of investing
money according to the assesses’ financial condition and taste, it is the prime duty of every salaried assesses to
utilize his/her chances and reaps the harvest.

IX. REFERENCE
[1] Advani, V.A., Investment Management, Himalaya Publishing House, Mumbai, 2006.
[2] Batra, G.S, and Dangwal, R.C., Financial services, Deep and Deep Publications, New Delhi.
[3] Gordon, E, and Natarajan, K., Financial Services, Himalaya Publishing House, Mumbai.
[4] Kothari, C.R., Research Methodology Methods and Techniques, Wishwa Prakasam New Delhi.
[5] Ross, Joel., Mutual Funds: Taking the Worry out of Investing, Prentice Hall, 1998.
[6] Shanmugam, R., Financial Services, Wiley India Pvt., Ltd., New Delhi, 2010.

www.irjmets.com @International Research Journal of Modernization in Engineering, Technology and Science

[366]