Professional Documents
Culture Documents
SABARINATHAN
SABARINATHAN
SABARINATHAN
PROJECT REPORT
Submitted by
M SABARINATHAN
MAY -2010
2
MAY 2010
--------------------- ----------------------------------
Project Guide Head of the Department
----------------------------- ---------------------------
Internal Examiner External Examiner
3
DECLARATION
ACKNOWLEDGEMENT
The ultimate result of any research work depends upon the help and guidance of
many persons. The help and guidance of such people cannot be left unnoticed.
I take this opportunity to thank them for providing the relevant and necessary
inputs for successful completion of this project
(M SABARINATHAN)
5
ABSTRACT
The study period was annual one month is the finance department of the
industries. The main sources of the industries data were some industries with
executives and other several any data like periodically, company magazines,
annual reports. Data was mainly collected from general accounts sector of the
financial departments.
Inventory Management is mainly carried out tools like ratio analysis ABC
analysis and comparative balance sheet working capital of the previous year
inference are made of these tools and based on these inference finding and
recommendation are recommended.
6
CONTENTS
LIST OF TABLES
7
TABLE.
CONTENTS PAGE. NO
NO
CURRENT RATIO
3.1 31
LIQUID RATIO
3.2 33
DEBT EQUITY RATIO
3.3 35
PROPRIETARY RATIO
3.4 37
INVENTORY TURNOVER RATIO
3.5 39
WORKING CAPITAL TURNOVER RATIO
3.6 41
3.7 DEBTORS TURNOVER RATIO 43
3.8 AVERAGE COLLECTION PERIOD 45
CREDITORS TURNOVER RATIO
3.9 47
AVERAGE PAYMENT PERIOD
3.10 49
GROSS PROFIT RATIO
3.11 51
LIST OF CHARTS
8
1 CURRENT RATIO 32
2 LIQUID RATIO 34
4 PROPRIETARY RATIO 38
CHAPTER -1
INTRODUCTION
9
The term inventory refers to the stock pile of the products a firm offering for
sale and the components that makes up the product. In other words inventory is
composed of assets that will be sold in future in the normal course of business
operations. The assets which turns store as inventory in anticipation of need are raw-
materials, work-in-progress and finished products. The raw material inventory removes
dependency between suppliers and plants. The work in progress inventory removes
dependency between various machines of a product line. The finished goods inventory
removes between plants and its customers or market.
Inventory, as a current asset, differs from other current assets because only
financial manager are not involved. Rather, all the functional areas, finance, marketing,
production and purchasing are involved. The views concerning the appropriate level of
inventory would differ among the different functional areas .The job of the finance
manager is to reconcile the conflicting viewpoints of the various functional areas
regarding the appropriate inventory levels in order to fulfill the overall objective of
maximizing the owners wealth. An optimum level of inventory should be determined
on the basis of the trade-off between costs and benefits associated with the level of
inventory.
MAXIMUM STOCK
Maximum stock is the stock level at which maximum quantity of an item of
material can be held in at any time. Stock should not exceed maximum level, if it
exceeds this level; it blocks the working capital of the business.
Maximum stock can be calculated as follows-
Re-ordering level + Re-ordering quantity – (minimum consumption x
minimum re-order period)
MINIMUM STOCK
Minimum stock level represents the stock level below which, inventory of any
item should not be allowed to fall. If it goes below this level, it will affect the
production. This level is fixed so that production may not be stopped due to shortage of
materials.
RE-ORDER LEVEL
It is the point at which material are ordered for replenishment of stock. It is the
key point and is the quantity where replenishment of stock is done. Reorder level is
fixed between minimum stock level and maximum stock level, in order to avoid time
lag between the materials ordered and receipt.
Reorder level = maximum consumption x maximum reorder period.
ORDERING COST
The category of cost is associated with the acquisition of or ordering of
inventory. Firms have to place orders with suppliers to replenish inventory of raw
materials. The expenses involved are referred to as ordering cost. The ordering cost
includes preparing a purchasing order or requisition form and receiving inspecting and
recording the goods received to ensure both quantity and quality. The cost of acquiring
material consists of clerical cost and cost of stationary. It is therefore, called set-up
cost. They are generally fixed per order placed, irrespective of the amount of order.
11
Total ordering cost = Annual requirement / order quantity x cost of single order.
CARRYING COST
The second broad category of cost associated with inventory is the carrying cost.
They are involved in maintaining or carrying inventory. The cost of holding inventory
may be divided in to 2 categories.
a) Those that arise due to storing inventory.
The main components of this category of carrying cost are storage cost,
insurance of inventory and deterioration in inventory for serving cost.
EOQ = √2 x A X O / C
Where, A = Annual usage. O = Ordering costC = Carrying cost
Cement is one of the basic important and powerful raw material used in the
constructions of variety of structure like dams, rocks, bridges, storage tanks, fiyovers
towards, multistoried building ect., it has a variety of applications like hallow bricks,
precuts door and frames, pipes, asbestor, cement sheets, concerting, plastering and other
per-cast and other per-cast and prestressed elements ect., it is greenish gray powder,
which contains the following compounds.
COMPONENTS OF CEMENTS
14
INDUSTRY PROFILE
INTRODUCTION
Cement industry is a core sector industry and forms the backbone of infrastructural
development of the country. Cement is a essential construction material and Cement
consumption has been as vital parameter. In a country’s economic growth of 7% to 8%
in the last ten years. The Cement industry gives direct and indirect downstream
employment.
1936 – 1945 Cement was declared as essential commodities under the defense of India
Rules and the same was brought under the government control.
1951 – 1956 5 years Cement units produced 4.6 million tones of Cements.
1956 Cement control order promulgated. System on fright pooling introduced for
equitable distribution of Cements at a uniform price throughout the country.
15
1977 Three tier pricing formula announced for low. Medium Cement producing units.
Levy quotas for sick and new weight are fixed 50%
1992-1993 Cement Capacity was 70.19 million tones and production was 54.08 million
tones.
1996 Cement industry has registered Whooping growth 11.4% as compared to 9.9%
during the same period previous year.
Single tired retention price was fixed at Rs. 320/- tones per port land puzzling
cement and Rs.335/- tones ordinary Portland cement.
The task force report that the per capital consumption was only about hundred Kgs. By
2002 and possible reach a level of 150 Kg by the year 2010, if the present GDP Growth
trend resists.
The history of the “house of chettinad” is linked with the 9 decades old saga. In
1912 took birth the house of chettinad thought a visionary idea - list and born
entrepreneur Dr.Rajah Sri Annamalai Chettiar who believed in social transformation
through business. The founder of the house of Chettinad envisaged his company his
companies providing the stimulus for industrial growth and conceived business as a
means of improving the living standards of people.
Establishing company:
mill for grinding raw meal. Loaches lignite mill (first of its king in India) a few stage
pre-heated kiln & electronic packing plant. Equipped with centralised control room for
process control the advanced instrumentation and elaborate display screens give up to
the minute information on the production process so corrected.
The company, which has always been striving for total quality.
Possesses international certificates an ISO 9002 and ISO 14001 and takes pride in being
acclaimed as one of the major player in a highly competitive cement industry in India
the company added another features to in cap by installing and commissioning a giant
sophisticated. High-tech and power efficient O&K cement mill resulting in a quantum
leap in production to touch one million tones mark. The company has achieved many
laurels through award for “ best performance” in the cement industry issued by national
productivity council” besides it has been customers to receive national safety awards.
chettinad cements have attached great importance to social responsibility and
environmental values. This is manifest in the installation of the latest pollution control
equipment in the plant.
The company, new state of the art green field cement plant in
Karikal Village. Dinducal district, Tamil Nadu commenced commercial production in
act 2001 with a capacity of 0.9 million tonnes per annum. It is equipped with abb’s
latest knowledge based solution package right form the treatment of raw material to the
packing of cement. making it one of the India’s most modern and efficient plants. With
the large infrastructure projects of the governments for concretising the National
Highways and rural roads. Like the golden quadrilated and the pm’s grams SADAK
YOJANA. In the pipeline the cement industry as well as your company looks forward to
a bright future and hopes to achieve more, milestones in the years to come.
COMPANY PROFILE
18
Type : Public.
Founded : 1962
Chairman : M.A.M.Ramaswamy.
Revenue : 4.5(crores)
Turnover : Granite.Garnet.Engineering.Silica.
Information Technology,Plantations,
Shippin,Transpiration,Stevedoring,
Associated companies
Website : WWW.Chttinad.com
located at kumarajah muthiah Nagar in the Puiliyur village of Karur taluk in Karur
district, Tamil nadu and is about 10 km away from Karur. The factory compound
occupies an area of limestone quarry of the factory is located near Palayam at the
distance of 28 km away from Karur. It is one of the best developed and mechanized
mines in the country.
The dynamic and dedicated services of the promoter to the Chettinad Cement
Corporation Limited as the chairman of the factory are continued till 1984. Then the
elected chairman Dr.S. Narayana Swamy successfully led the company from 1985 to
1990. Today the company continuous to uphold its illustration tradition under the
dynamic leadership of Dr.M.A.M.R. Muthiah, the chairman and managing director.
PRODUCTS:
Chettinad Royal Grade 53
Chettinad Grade 43
Chettinad Super Grade
Sulphate Resistant Portland cement
Portland slag cement
Chettinad super steel
PRODUCTION CAPACITY:
The cement plant is designed for a normal capacity is 6 lakhs tones of cement
p.a. it achieves higher capacity every year. Last year it has achieved the target of
20
2335605metric tones of cement. From a modest beginning of 2 lakhs tones capacity p.a.
it was gradually increased production capacity to 15 lakhs tones today.
Presently, the plant employees the modern Dry process technology. It has the
most advanced sophisticated, computer controlled state of the art loesche mill for
grinding raw meal. Loesche lignite mill (First of its kind in India). A five stage
preheated kiln and electronic packing plant.
Equipped with centralized control room for process control, the advanced
instrumentation and elaborate display screens give up to the minute information on the
production process. So that any deviation can be promptly corrected.
The company added another feather to its capacity by installing and
commissioning a giant, sophisticated, high-technology and power efficient cement mill
resulting in a quantum leap in production to touch one million tones mark. Chettinad
cement has attached great importance to social responsibility and environmental values.
This is manifest in the installation of the latest pollution control equipment in the plant.
The companies commissioned a 15mw captive thermal power plant at its unit
karikkali in October 2004 to cater to the entire power requirement of the karikkali plant
there by reduce the power cost. The company is also in the process of installing a new
cement grinding unit at karrikkalik with a capacity of 0.5 million tones.
BANKERS
State Bank of patiala
Canara Bank
21
OPPORTUNITIES:
The fact that India being second Largest cement producer in the world and still
having the lowest per capital consumption of cement itself speaks for the vast potential
for growth available in this sector.
TOTAL STRENGTH:
Work men - 112
Staff - 56
Executive - 106
Contract workers - 131
Total - 405
Year
S. No. Awards
Best 1986-1987
Rest rooms and Lunch rooms with electric lights, fan and water taps are provided for
the benefit of the working community.
Gratuity:
Every employee in the organization has gratuity as a retirement benefit.
Insurance scheme:
Every employee in the organization must have personal accident policy. It is
adopting compulsory one of the Organization.
Housing:
Housing facilities are provided to employees for the workers who don’t find
place in the housing colony certain amount is paid as housing rent allowances.
Recreation:
Employees are also provided with temples and parks for their children inside the
housing colony. A cable T.V. Network is there for housing colony, people which shows
various channels.
25
Education:
The Chettinad Cement Corporation limited educational society running higher
secondary schools where education facilities with concession as per Tamilnadu
educational rules are being provided to the children of the employees.
Community Centre:
There is a community centre which has the facilities to conduct marriage and
other such programmes. Water facilities, vessels, electricity, etc., also provided by the
company. All the employees are eligible to get this by remitting a nominal amount as
rent.
Other facilities:
They are also having co-operative stores, ICICI limited, post office facilities for
the employees.
Vehicle stand:
For the benefit of workers the management has provided a vehicle stand to park
their vehicles.
Hospital:
The hospital which provided for the benefit of employees is common for
Chettinad Cement Corporation. It contains medical treatment including supply of
specialist medicines are given to the employees and to their families. E.C.G facilities
are also provided to the employees. The expenditure costs shared by the management.
Drinking water facility is also provided to the workers with in their working spot
itself
First Aid facilities: (Ref. Sec. 45 Factories Act 1945)
In all departments first aid boxes are provided at various work spot for the
benefit of workers. After the month they used to replace the ox with new medicines.
LEAVE HOLIDAY
Chettinad Cement Corporation Limited allows the following holiday
such as National Holidays, festival Holidays
National Holidays
The company provides some of the important national holidays they are as
follows:
Republic Day
May Day
Independence Day
Gandhi Jayanthi
Festival holidays
The company provides holidays to the employees for important festivals like
Pongal
Tamil New Year
Ayudha Pooja
Christmas
Deepavali
NUMBER OF LEAVE PERMITTED PER YEAR
3. Executive 7 12 30
4. Contract 7 12 18
workers
Time office is controlled by accounting department. The duty of the time office
is to maintain the attendance and leave record of all the employees. They follow
punching card system in Chettinad Cement Corporation limited. The company gives
each employee an attendance card. The employees while entering or exit the office have
to insert their attendance card into a computerized machine which makes the entry
permission for late coming (hour) will be allowed to all the employee of reasonable
aspect.
Apart from this time office gives details regarding
LOPC (loss on payment)
NSA (Night shift allowance)
OT (Over time)
HW (Holiday work)
Board, one Director is the General Manager is the Chief Executive of the unit. The
management structure has been classified as Executive Directors, Managers, Staff,
Workers and Contract workers.
ORGANISATION CHART
31
32
33
CHAPTER-2
The inventory manager must anticipate the company’s need at every stage of
production. Inventories protect the inventory manager against unforeseen failures in
supply or a sudden increase demand. Materials are transported thousands of miles
before the arrive at a plant, and while in transit they are someone’s inventory – the legal
owner of that material. Even a flat tire on the carrier’s truck could interrupt the
manufacturing process with a late delivery.
For these reasons every manufacturing enterprise carries a certain minimum
amount of inventory. In practice, almost every manufacturer carries an inventory that is
substantially greater than the minimum amount because:
The marketing, sales, and production departments all find it more
convenient to have a supply on hand that it more than ample.
The market indicates a rise in price of the raw material and
therefore increases the inventory levels.
There is a lack of skills necessary to control inventory levels,
and / or top management is unwilling to pay for controls and is willing to
carry extra inventory
35
Inventory represents one of the largest investments for any business unless
properly managed; the cost of inventory will strain the firm’s budget and cut into its
profitability. The goal of inventory control is to balance the cost of holding and
maintaining inventory with meeting customer demand.
The tools adopted here are schedule of changes in working capital, Ratio
analysis, and ABC analysis.
The visual inventory system is the most common method of controlling
merchandise in a small business.
This system works best when shortages are not likely to cause major
problems.
The ABC system is a partial system that divides a firm’s inventory into
three categories depending on each item’s rupee usage volume (cost per
unit multiplied by quantity used per time period).
The purpose of classifying items according to their value is to establish
the proper degree of control over them.
CHAPTER-3
39
B 12.33 20 Moderate
C 84 10 Minimal
TABLE NO: 2
ABC CLASSIFICATION FOR 2005-2006
% of total Type of
% of Units in Consumption inventory
Classification Inventory Value control
A 3.81 70 Strict
B 11.19 20 Moderate
C 85 10 Minimal
42
TABLE NO: 3
ABC CLASSIFICATION FOR 2006-2007
% of total
% of Units in Consumption Type of inventory
Classification Inventory Value control
A 3.62 70 Strict
B 12 20 Moderate
C 84.38 10 Minimal
TABLE NO: 4
ABC CLASSIFICATION FOR 2007-2008
% of total Type of
% of Units in Consumption inventory
Classification Inventory Value control
A 3.77 70 Strict
B 11.7 20 Moderate
C 84.53 10 Minimal
TABLE NO: 5
43
INTERPRETATION:
The table shows that item ‘A’ includes the highest value items, 70% of total
value. This class is least important in terms of number as they represent only 3.66% of
the total units. Item ‘B’ occupies the middle place with 20% items falling under this
category. These constitute about 12.33% of the total units. Nearly 84% of the items fall
under class ‘C’ and they constitute only 10% of the total value of items.
CHART NO: 1
44
90
80
70
PERCENTAGE
60
50
40
30
20
10
0
1 2 3
A B C
CHART NO: 2
CHART SHOWING ABC CLASSIFICATION
CHART NO: 3
CHART SHOWING ABC CLASSIFICATION
45
CHART NO: 4
CHART SHOWING ABC CLASSIFICATION
CHART NO: 5
CHART SHOWING ABC CLASSIFICATION
46
CURRENT RATIO:
It is computed with the help of the following equation.
Current Assets
47
Current Ratio =
Current Liabilities
TABLE –2
CURRENT RATIO
Current
Current Assets Liabilities
Years (Rs.in Lakhs) (Rs.in Lakhs) Current Ratio
INFERENCE:
48
From the above table shows that the current ratio for the year 2004-05 is
1.6.In the year 2005-06 it increase to 2.1. In the year 2006-07 it decrease to 1.7 and in
the year 2007-08 decreases in 1.3. In the year 2008-09 is 1.1.here current ratio has
average level so it should improve this position in future.
CHART NO -2
CURRENT RATIO
2.5
2.0
1.5
1.0
0.5
0.0
1 2 3 2008
4 2009
5
QUICK RATIO:
It is computed with the help of the following equation.
Quick Assets
Quick Ratio =
Current Liabilities
TABLE –3
QUICK RATIO
Quick
Quick assets liabilities
Years (Rs.in Lakhs) (Rs.in Lakhs) Quick ratio
2004 - 2005 5392 6934 0.78
2005 - 2006 6538 7928 0.82
2006 - 2007 7939 10768 0.74
2007 - 2008 13962 17296 0.81
2008 - 2009 23852 35839 0.67
INFERENCE:
From the above table shows that the quick ratio for the year 2004-05
is 0.78.In the year 2005-06 it increase to 0.82. In the year 2006-07 it
50
decrease to 0.74 and in the year 2007-08 increases in 0.81. In the year
2008-09 is 0.67.here quick ratio is decreased.
CHART NO – 3
QUICK RATIO
1 .0 0
0 .8 0
0 .6 0
RATIO IN %
0 .4 0
0 .2 0
0 .0 0
1 2 3 4 5
2005 2006 2007 2008 2009
51
INVENTORY TURNOVER
TABLE – 4
INFERENCE:
From the above table shows that the r inventory turnover ratio for the year 2004-
05 is 6.71.In the year 2005-06 it decrease to 4.84. In the year 2006-07 it increase to 5.83
and in the year 2007-08 increases in 10.81. In the year 2008-09 is 6.66.here inventory
turnover ratio has average level so it should improve this position in future.
52
CHART NO -4
12.00
10.00
8.00
6.00
4.00
2.00
IN
%
O
R
A
T
I
0.00
1 2 3 4 5
2005 2006 2007 2008 2009
53
TABLE – 5
DEBITORS TURNOVER RATIO
INFERENCE:
From the above table shows that the debtors turnover ratio for the year 2004-05 is
26.75.In the year 2005-06 it decrease to 25.09. In the year 2006-07 it increase to 33.50
and in the year 2007-08 increases in 49.82. In the year 2008-09 is 74.45.here debtor’s
turnover ratio.
54
CHART NO -5
R s . 8 0 .0 0
R s . 7 0 .0 0
R s . 6 0 .0 0
R s . 5 0 .0 0
RATIO IN %
R s . 4 0 .0 0
R s . 3 0 .0 0
R s . 2 0 .0 0
R s . 1 0 .0 0
R s . 0 .0 0
1 2 3 4 5
2005 2006 2007 2008 2009
55
Net Sales
TABLE-6
NET PROFIT RATIO
NET CREDIT
YEARS NET PROFIT SALES RATIO
2004-05 3941 40258 9.79
2005-06 4691 47853 9.80
2006-07 5723 58417 9.80
2007-08 7397 84647 8.74
2008-09 14879 110702 13.44
INFERENCE:
From the above table shows that the net profit ratio for the year 2004-05 is
9.79.In the year 2005-06 increase to 9.80.and again same value for the year 2006-07 and
in the year 2007-08 decreases in 8.74 In the year 2008-09 is 13.44.here net profit ratio is
increased.
CHART NO –6
56
14.00
12.00
10.00
8.00 R
A
6.00 I
O
4.00 I
2.00 N
%
0.00
1
2 S1
3
4
5
2005 2006 2007 2008
2009
Gross Profit
Gross Profit Ratio = x 100
Net sales
TABLE NO-7
GROSS PROFIT RATIO
NET CREDIT
YEARS GROSS PROFIT SALES RATIO
2004-05 15628 40258 38.82
2005-06 18060 47853 37.74
2006-07 26034 58417 44.57
2007-08 7397 84647 8.74
2008-09 14879 110702 13.44
INFERENCE:
From the above table shows that the gross profit ratio for the year 2004-05 is
38.82.In the year 2005-06 it decrease to 37.74. In the year 2006-07 it increase to 44.57
and in the year 2007-08 decreases in 8.74 In the year 2008-09 is 13.44.here gross profit
CHART NO -7
50.00
40.00
RATIO IN %
30.00
20.00
10.00
0.00
1 2 3 4 5
2005 2006 2007 2008 2009
TABLE NO -8
Statement Of Changes In Working Capital 2004-05
rs.in lakhs
59
INFERENCE:
From the above table shows that changes in working capital for the years
of 2004 -2005 was increase Rs, 1606.
CHART NO-8
60
TABLE NO -9
61
RS IN lakhs
Particulars 31-03-2005 31-03-2006 Increase Decrease
CURRENT ASSETS:
Inventory 4939 5112 173 -
Sundry debtors 2102 1985 - 117
Cash And Bank balances 1092 1075 - 17
Other current Assets 17 16 - 1
loans And advances 2889 1475 - 1414
A- Total current assets 11039 9663 - -
Less: CURRENT
LIABILITIES:
Liabilities 4895 5414 519
Provisions 154 70 84 -
B- Total current liabilities 5049 5484 - -
Net Working Capital (A –
B) 5990 4179 - -
Increase / Decrease in W/C 1811 -
5990 5990 2068 2068
INFERENCE:
From the above table shows that changes in working capital for the years
of 2005 -2006 was decrease Rs, 1811.
CHART NO-9
62
T
ABLE NO -10
STATEMENT OF CHANGES IN WORKING CAPITAL
RS.IN LAKHS
Particulars 31-03-2006 31-03.2007 Increase Decrease
CURRENT ASSETS:
Inventory 5112 6004 892 -
Sundry debtors 1985 1505 - 480
Cash And Bank
balances 1075 1395 320 -
Other current Assets 16 30 14 -
loans And advances 1475 2462 987 -
A- Total current assets 9663 11396 - -
Less: CURRENT
LIABILITIES:
Liabilities 5414 6083 - 669
Provisions 70 851 - 781
B- Total current
liabilities 5484 6934 - -
Net Working Capital (A
- B) 4179 - - -
Increase / Decrease in
W/C - - - 283
4179 4179 2213 2213
INFERENCE:
From the above table shows that changes in working capital for the
years of 2006 -2007 was increase Rs, 283.
63
CHART NO-10
64
TABLE NO-11
INFERENCE:
From the above table shows that changes in working capital for the years
of 2007 -2008 was increase Rs, 4045.
65
CHART NO-11
9000
8000
7000
Amount in Rupees
6000
5000
4000
3000
2000
1000
0
1 2
2007 2008
TABLE-12
STATEMENT IN CHANGES WORKING CAPITAL
66
RS IN LAKHS
INFERENCE:
From the above table shows that changes in working capital for the years
of 2008 -2005 was decrease Rs, 1289.
CHART NO-12
67
TABLE NO -7
COMPARITIVE BALANCESHEET FOR THE YEARS OF 2004 – 2005
68
INFERENCE:
Above table shows in the year 2004-2005 share capital (0.00%) same the
amount of both year, reserve& surplus (7.5%), secured loan (-58.29%) decreased. and
unsecured loans (778.77%) increased, fixed assets (-3.46%) decreased,
inventories(17.45%) increased ,sundry debtors (-24.18) decreased, cash at bank (29.77)
increased loans and advances (66.92%) increase, liabilities (12.36%) increase.
TABLE-8
70
INFERENCE:
71
Above table shows in the year 2005-2006 share capital (0.00%) same the
amount of both year, reserve& surplus (14.03%), secured loan (-52.48%) decreased. and
unsecured loans (62.42%) increased, fixed assets (5.46%) increased,
inventories(64.84%) increased ,sundry debtors (26.71%) increased, cash at bank
(22.51%) increased loans and advances (17.95%) increase, liabilities (-0.44%)
decrease.
72
TABLE-9
INFERENCE:
Above table shows in the year 2006-2007 share capital (0.00%) same the
amount of both year, reserve& surplus (22.86%), secured loan (-59.30%) decreased. and
unsecured loans (4.95%) increased, fixed assets (8.35%) increased, inventories (1.21%)
increased ,sundry debtors (-8.55%) decreased, cash at bank (25.75%) increased loans
and advances (40.22%) increase, liabilities (28.12%) increase.
74
TABLE-10
INFERENCE:
75
Above table shows in the year 2007-2008 share capital (0.00%) same the
amount of both year, reserve& surplus (61.29%), secured loan (-62.44.%) decreased.
and unsecured loans (-20.84%) decreased, fixed assets(249.79%) increased,
inventories(-21.86%) decreased ,sundry debtors (-21.86%) decreased, cash at bank
(31.46%) increased loans and advances (131.70%) increase, liabilities (-3.89%)
decrease.
76
TABLE-11
INFERENCE:
77
Above table shows in the year 2008-2009 share capital (0.00%) same the
amount of both year, reserve& surplus (55.30%), secured loan (316.0%) increased. and
unsecured loans (79.27%) increased, fixed assets(-49.85%) decreased,
inventories(112.30%) increased ,sundry debtors (-12.48) decreased, cash at bank (-
8.50%) decreased loans and advances (109.64%) increase, liabilities (109.74%)
increase.
78
CHAPTER – 4
4.1SUMMARY OF FINDINGS
ABC analysis at Chettinad Cements, the percentage of unit in Inventory items A =
3.66%, B = 12.33% and C = 84%.
The Inventory and net sales of the company has net sales was increased for based on
proper inventory management system.
The Current asset of Inventories. Inventories decreased for the year 2007 – 08 at
29.78%.
The Gross Working Capital for the Chettinad Cements is stable but fifth year it was
reduced.
The Net working capital for the Chettinad Cements was increased consistently for
every year.
The cash and bank balance of the Chettinad Cements are increase every year
consistently.
Other current asset for the company had positive sign in past records.
The current Ratio for the company maintaining nearest to standard ratio for the last
five years.
The Quick Ratio of the Chettinad Cements are maintain stable manners in last five
79
4.2 SUGGESTION
The company shouldn’t issue the new share capital. But they are increase the
cash balance, current assets and fixed assets.
Increasing in inventories which will leads to the company can holding the
money to lock up.
The current assets of the debtors will show the company in right trend.
The company should maintain high level of opening Raw Material, which will
help the organization to fulfill sudden increase in demand.
Reduction in loan and advance, current liabilities, scrap values and other
expenses will increase the cash balance which can used for purchasing materials
and other needs.
Declaration of dividend amount to the share holders should be made to attract
the share holders and will also motivate them.
Use new techniques for analyzing financial information by using various
techniques to more accuracy can be attained and more time can be saved.
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4.3 CONCLUSION
APPENDIX
BALANCE SHEET
PARTICULARS 2004 2005 2006 2007 2008 2009
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A SOURCES OF
FUNDS
Shareholders fund
Capital 2950 2950 2950 2950 2950 2950
Reserve and surplus 9617 10345 11796 14492 23374 36299
Loan funds
Secured loan 29793 12428 5906 2404 903 3761
Unsecured loan 1875 16477 26762 28087 22233 39858
Deferred tax 3667 4470 5604 7874 7345 6430
TOTAL 47902 46670 53018 55807 56895 89298
B APPLICATION
OF FUNDS:
Fixed assets
Block 43723 42208 44511 48228 168695 84608
Investments
Current assets :
Inventories 5112 6004 9897 10017 7827 16617
Sundry debtors 1985 1505 1907 1744 1699 1487
Cash and bank
balances 1075 1395 1709 2149 2825 2585
Other current assets 16 30 18 4 4 0
Loans and advances 1475 2462 2904 4072 9435 19780
LESS: CURRENT
LIABILITIES:
Liabilities 5414 6083 6056 7759 7457 15640
Provisions 70 851 1875 3009 9839 20197
Net current assets 4179 4462 8507 7218 4493 4632
TOTAL 47902 46670 53018 55807 56895 89298
BIBLIOGRAPHY:
M.Y khan & p.k jain, Financial management (5th ed: Tata Mc Graw-Hill
publishing company limited) ch.16,p.16.1
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