“FINANCIAL STATEMENT ANALYSIS OF LG ELECTRONIC INDIA LTD.

USING RATIO TECHNIQUES”

Dissertation submitted to Uttarakhand Technical University in Partial fulfillment
of the requirement for the award of

Master of Business Administration

By
Taruna Chaudhary
09200500039

Under the supervision of

Ms. Monika Senwal
Department of management studies
MIT, Dehradun

Mahadevi Institute of Technology

Uttarakhand Technical University
Dehradun-248001
May 2011
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 Student’s Declaration

Taruna Chaudhary

Roll No: 09200500039

Department of Management Studies

MIT Dehradun – 248001

Statement by the Student

I hereby state that the dissertation titled “Financial Statement analysis of LG Electronic India Ltd.
Using Ratio Techniques” submitted by me in partial fulfillment of the requirements for the award of
MBA degree is my original work and that it has not previously formed the basis for the award of any
other degree, Diploma, Fellowship or other similar titles.

Dehradun

Date Taruna Chaudhary

2
 Guide’s Certificate

Ms. Monika

Department of Management studies

MIT, Dehradun

This is to certify that the dissertation titled “Financial Statement analysis of LG Electronic India Ltd.
Using Ratio Techniques” submitted by Ms. Taruna Chaudhary is a bonafide record of research work
done by her under my guidance and supervision.

Dr.B.K.Sindhwani Ms. Monika Senwal Ms.Monika Senwal

(Head of Dept.) (Project Coordinator) (Guide)

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 Acknowledgement

I take this opportunity to thank various people who all have made me sail through successfully my
dissertation report. I would like to express my gratitude towards thanking the following people:

I would like to thank to Ms. Monika Senwal who have sincerely supported me with the valuable insights
into the completion of this project.

Dr. B.K.Sindhwani (HOD, Depts. of management studies, MIT, Dehradun) who helped me immensely in my
project.

I would be very thankful to many teachers who helped me throughout my project.

Apart from these, I would like to thank all my friends where I had received immense support in carrying out
my dissertation report. Finally, I am highly thankful to my parents and my entire family, who have shown all
kind of support at all points of time.

With Sincere thanks

Taruna Chaudhary

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 Table of Contents
Certificate

Acknowledgement

 INTRODUCTION TO THE STUDY 5

 COMPANY PROFILE 6
 OBJECTIVE OF THE STUDY 11
 RESEARCH METHODOLOGY 12
 RATIO ANALYSIS AND TYPES 13
 FINANCIAL ANALYSIS AND FINDINGS 15
 LIMITATIONS OF RATIOS 56
 BIBLOGRAPHY 60

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 INTRODUCTION TO THE STUDY

Notable study of the “Financial Statement Analysis of LG Electronic India Ltd.Using

Ratio Techniques’’ is an attempt being made to find out the soundness of the firm in dealing
with present market competition and in getting a view how the performance is going on for
the last five years. The ultimate aim of every business under taking is to maximize the wealth
of the shareholder.
The study begins with framing the objectives of the study and then devising a methodology
for the fulfillment of the objectives.
In the present study vertical analysis of the Balance Sheets, comparison of profit & loss
account last five years from 2006-2010 has been done. Besides Ratio have been introduced to
find the Quantitative relationship between figures and groups of figures. Following are the
four steps involved in the ratio analysis.

 SELECTION OF RELEVANT DATA FROM THE FINANCIAL STATEMENTS DEPENDING

UPON THE OBJECTIVES OF THE ANALYSIS.
 CALCULATIONS OF APPROPRIATE RATIOS FROM THE ABOVE DATA.
 COMPARISON OF CALCULATED RATIOS WITH THE RATIOS OF THE SAME FIRM IN
THE PAST.
 NTERPRETATION OF THE RATIOS

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 INTRODUCTION

COMPANY’S PROFILE

“A better life with Digital” is LG Electronics Digital Appliance Company’s (DAC) mission.

LGE DAC has been making ceaseless efforts to create a new culture in our daily life to present
convenience to all its customers all over the world.

In the midst of the revolutionary era never experience before, LG has taken the initiative to be at
the forefront. For instance, LGE DAC introduced the world first internet home network products
among many other market innovative products in the global appliance market last year. A
futuristic life you have only dreamed about is now available to you.

This and many more is attributed to LGE DAC’s product leadership and innovative activities,
LGE DAC is achieving rapid growth to become the leading global home appliance company. LG
DAC is recognized in the market along the world for its innovative home appliances.

This and many more is attributed to LGE DAC’s product leadership and innovative activities,
LGE DAC is achieving rapid growth to become the leading global home appliance company. LG
DAC is recognized in the market along the world for its innovative home appliances.

LGE DAC’s success is based on their Fast Innovative activity, which in tern is based on LGE
DAC’s management philosophy of” Great Company, Great people” (GCGP). It believes that a
great company produce great people and great people makes a great company and this
synergistic relationship is the foundation of their success.

“Gearing Up To Become the Global Digital Leader”

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LG ELECTRONICS INDIA LIMITED (LG EIL) is a wholly owned subsidiary of LG
Electronics, South Korea. The company started its operation in Delhi, in May 1997 and within a
short span of thirty months, LGEIL had achieved a turnover of approximately 1,900 crores.
LGEIL has introduced its wide range of products to the Indian Consumers and has successfully
carved a niche for itself. LGEIL success story is a result of its investment in cutting-edge
technology and its relentless efforts to bring home the smiling face.

The all-out efforts guided by “digital LG”, the 21 st century vision announced in 1999, have
resulted in flourishing product and technological innovations that combined with the corporate
resources and that enriched the LGE digital culture.

As their Digital LG Vision has progressed, they have reached a place where they are now, setting
new standards worldwide in the digital technologies and products. For instance, their internet-
featured home appliance digital TVs, next generation mobile handsets and other digital products
are on the global leading edge.

As for the future business cores, LGE have directed their energies in Research and Development
for the home network technologies and introduced the world’s first home network appliances.

“Extraordinary Innovation Activities”

At DAC, Total Productivity control, 3 by 3 and 6sigma have been the vehicles driving the
innovation activities which made them the pioneers in the digital world.

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 Mission &Vision

DAC VISION AND PHILOSOPHY

“One of the Global Majors”

At the Digital Appliance Company (DAC), one of the LG’s three-holding companies, the mid-
term goal is becoming a global major player in the digital appliance field by 2005.

To this end, DAC is refocusing on global management, strategic alliances, innovations and
employee performance-based activities, along with Great Company Great People (GCGP)
initiatives and “Fast Innovation Management”.

Fast Innovation

High-powered management is indispensable to accelerating towards our goal of becoming the

major global player in the time of hyper competition. DAC’s Fast Innovation has functioned as a
competitive-empowering strategy and groundbreaking technology three years ahead of others.
The Fast Innovation aims at solidifying low-cost and high efficiency business structure while
speeding up overall innovations 30% faster than those of competitors.

Great Company Great People (GCGP)

A great company is built by encouraging great aspirations. The dedicated employees at DAC are
devoted to achieve professional growth and amplifying the corporate resources. Our great people
meet the challenges to help build DAC into a strong presence.

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“In the Lead of Digital-Ware”

Since the 1960’s, DAC’s full-scale global markets in 160 countries and establish manufacturing
plants, sales and branch offices in key global locations today.

Welcoming the revolution from home appliances and internet-featured appliances to diverse
home appliances, DAC is in the lead in the digital appliance industry.

CORE VALUES
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Ownership: This is our company. We accept personal responsibility, and accountability to meet
business needs

Passion For Winning: We all are leaders in our area of responsibility, with a deep commitment
to deliver results. We are determined to be the best at doing what matters most

People Development: People are our most important asset. We add value through result driven
training, and we encourage & reward excellence

Consumer Focus: We have superior understanding of consumer needs and develop products to
fulfill them better

Team Work: We work together on the principle of mutual trust & transparency in a boundary-
less organization. We are intellectually honest in advocating proposals, including recognizing
risks

Innovation: Continuous innovation in products & processes is the basis of our success

Integrity: We are committed to the achievement of business success with integrity. We are honest
with consumers, with business partners and with each other

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 OBJECTIVE OF THE STUDY

 To analyze the financial performance of LG Electronics India Ltd.

 Projection of financial performance of the company for the last five years

 To measure the overall performance and effectiveness of LG Electronics India Ltd. Using
Profitability Ratios.

 To measure the efficiency of LG Electronics India Ltd. Through Activity ratios

 To measure the LG Electronics India Ltd. Ability to meet the interest cost and repayments
schedules of its long term obligations using Solvency ratios

 To measure the contribution of financing by owners as compared to Financing by outsiders

using ratios of Capital Structure.

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 RESEARCH METHODOLOGY

Methods are the means to accomplish objective. This study of “RATIO ANAYLIS OF LG
ELECTRONICS INDIA LTD” is primarily accomplished through secondary data since the
collocation of data was made through published annual report of the company. Tools that are
being used for data collection are

 Various records being available at factory premises.

 Audited annual reports for the period 2006 to 2010.
 Website of the company.

PROBLEM IDENTIFICATION

Notable study of the “RATIO ANALYSIS OF LG ELECTRONICS INDIA LIMITED” is an

attempt binge made to find out the soundness of the firm in dealing with present market
competition and getting a view how the performance is going on for the last five years. The
ultimate aim of every business undertaking is to maximize the wealth of the shareholders.

The study begins with framing the objective of the study and then devising a methodology for
the fulfillment of the objective.

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 RATIO ANALYSIS
 Ratio analysis is one of the popular tools of financial statement analysis.

 A ratio is defined as “The indicated quotient of two mathematical expression” and as “the
relationship between two or more things”

 Usually ratio is stated as percentage i.e., distribution expenses might be stated as 20

percent of sales.

 Often, however, the ratio is expressed in units, thus sales might be expressed as 20 times
inventory.

 It is a mathematical yardstick that measures relationship between two financial figures.

 It involves the break down for the examined financial report into component parts, which
are than evaluated in relation to each other and exogenous factors.
 However such an approach would not fulfil any purpose unless the figures chosen are
significantly related to each other.

 Ratio analysis involves calculation of ratios and then comparing them with some
predetermined standards. The standard ratio may be the past ratios of the same firm or
industry’s average ratio or a projected ratio.

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 INTERPRETATION OF RATIO

One of the most difficult problems confronting the analyst is the interpretation and analysis of
financial ratios.

An adequate financial analysis involves more than an understanding and interpretation of each of
the individual ratio.

Further, the analyst require an insight into the meaning of the inter-relationships among the ratios
and financial data in the statements

The analysis of financial statement primary aims at pinpointing of strength and weaknesses of a
business undertaking by regrouping and analyzing figures contained in financial statement.

It is useful to the management for its internal affairs and to the outsiders who are directly or
indirectly related to the affairs of the company.

Financial statements are crucial reports, which reflects the financial soundness of a business
enterprise through an well-arranged financial data. But the mere statistics can’t facilitate the
decision making process.

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 CLASSIFICATION OF RATIOS

It is difficult to give exhaustive list of accounting ratios. However, a list of common, relevant
and important ratios can definitely be attempted. Moreover, these ratios these ratios can be
grouped on the basis of some or other common feature. Therefore, the ratios can be studied by
classifying into following groups:

 (a) The Liquidity Ratio

1. Current ratio
2. Quick Ratio

 (b) The Activity Ratio

1. Debtors Turnover Ratio

2. Fixed Asset Turnover Ratio

3. Current Asset Turnover Ratio

4. Total Asset Turnover Ratio

5. Working Capital Turnover Ratio

 (c) The Leverage Ratio

1. Debt Equity Ratio

2. Proprietary Ratio

3. Solvency Ratio

4. Interest Coverage Ratio

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5. Fixed Asset To Net Worth

 (d) The Profitability Ratio

1. Gross Profit Ratio

2. Net Profit Ratio

3. Operating Margin Ratio

4. Earning Per Share

5. Dividend Per share

6. Dividend Payout Ratio

THE LIQUIDITY RATIO

The liquidity refers to maintenance of cash, bank balance, which are easily convertible into
cash in order to meet the liabilities as and when arising. So the liquidity ratio study the firm’s
short term solvency and its ability to pay of its liabilities. It should be intuitive to observe that
a firm, no matter how profitable it is, cannot continue to exist unless it is able to meet its
obligations as they arise. The day to day problems of financial management consists of highly
important task of finding sufficient cash to meet current obligations. To the extent that a firm
has to make payments to its suppliers before it is paid to for the goods and services it
provides, a cash short fall has to be met, usually through the short-term borrowings. The
liquidity ratios are devised to keep a track on the extent of the firm’s exposure to the risk that
it will meet its short-term obligation
These ratios as a group are intended to provide information about a firm’s liquidity
and the primary concern is the firm’s ability to pay its current liabilities. The liquidity
ratios provide a quick measure of liquidity of the firm by establishing relationship
between its current assets and current liabilities.

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If a firm does not have sufficient liquidity, it may not be in a position to meet its
commitments and thereby loose its credit worthiness.

THE ACTIVITY RATIO

The Activity Ratios are also called the Turnover Ratios or Performance Ratios as they highlight
the ability of management to convert or turn over assets of the firm into Sales. Activity Ratios
measure the efficiency of a firm in employing the available resources. Such ratio reflects the
degree of effectiveness of fund utilization in the business activity.

A Turnover Ratio or an Activity Ratio is a measure of movement and thus indicates as to how
frequently an account has moved/turned over a period.

These Ratios make a comparative study of the level of sales and the investment into various
assets accounts.

A sharp rise in this ratio may indicate that a company is expanding too quickly, and is allowing
sales to increase more rapidly then the underlying asset base.

Conversely a reduction in the ratio can indicate a decline in efficiency or fall in demand for the
firm’s product.

These ratios are usually calculated with reference to sales/cost of goods sold and are expressed in
terms of rate or times.

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 THE LEVERAGE RATIO

The financial position of a company can be studied and analyzed on two perspectives i.e. the
Short-Term financial position and the Long Term financial position. The Short-Term financial,
which is also known as the Short-Term Liquidity position or simply the Liquidity of the Firm has
already been discussed with the help of Liquidity Ratio. Leverage Ratio deals with Long-Term
financial position, its composition and implications. Leverage indicates of the use a company
makes of the borrowed funds to increase the return on Owner’s Equity. Leverage ratios measures
the contribution of financing by owners compared with financing provided by firms Creditors.

The proportion of debt capital to the total capital of the firm is usually referred to as Leverage or
Trading on the Equity.

Since the debt involves firm’s commitment to pay interest over the long run and eventually to
repay the principal amount, the financial analyst, the debt lender, the preference shareholders, the
equity shareholders and management will pay close attention to the degree of indebtedness and
the capacity of the firm to serve the debt. The more the debt a firm uses, the higher is the
probability that the firm may be unable to fulfill its commitments towards its debt lender

The ability to obtain and to repay a Long-Term debt often depends on the firm’s ability to obtain
capital from shareholders.

Therefore the relation between shareholders equity and creditors’ equity is evaluated.

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 THE PROFITABILITY RATIOS

The last group of financial ratios and probably the most often used group of ratios are the
Profitability Ratios. The Profitability Ratios measure the Operational efficiency of the firm.
There are two groups of persons who are may be specifically interested in the analysis of the
profitability of the firm.
 The management which is interested in overall profitability
 The Shareholders who are interested in ultimate return available to them.
The performance of the firm can be evaluated in terms of its earnings with reference to a
given level of assets or sales or owners interest etc.
Profitability ratios based on Sales of the Firm
Profits are a factor of sales and are earned indirectly as a part of sales revenue. So whenever a
firm makes sales, it earns profit. But how much? How the total sales revenue is is going to be
used for meeting the cost of goods sold, indirect expenses and return to shareholders etc. All
this aspect can be analyzed with the help of Profitability Ratio
Profitability ratios based on Assets/Investments
A financial analyst can employ another set of financial ratios to find out how efficiently the
firm is using its assets because the profitability of a firm can be analyzed with reference to
assets employed to earn a return. Normally, the more the assets employed, greater should be
the profits and vice-versa.
Profitability analysis from point of view of Owners
Ultimately the profits of the firm belong to the owners who have invested their funds in the
form of equity capital or preference share capital or retained earnings. Therefore the
Profitability of the firm should be analyzed from the point of view of owners also.

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 (a) LIQUIDITY RATIOS
1. CURRENT RATIO = CURRENT ASSET/CURRENT LIABILITIES

The ratio is the indicator of the firm’s commitment to meet its short-term liabilities. It is an
index of the concerns financial stability since it shows the extent to which the Current Asset
exceeds Current Liabilities. A very high ratio is not desirable which means less efficient
use of funds, slow moving stock, and increase in debtors, Cash and Bank balance lying idle.
It also means excessive dependence on long-term sources of fund, which are costlier than
Current Liabilities and can results in lowering down the profitability of the concern. A very
low ratio can mean that the concern is not maintaining adequate Cash balances that can
result in Bad Credit Image, loss of Creditors confidence. An ideal ratio is 2:1,which means
creditors will be able to get their payment in full.

YEAR CURRENT ASSET CURRENT LIB. C.RATIO

2006-2007 273.57 70.79 3.86
2007-2008 331.58 85.09 3.89
2008-2009 300.37 112.85 2.66
2009-2010 300.27 129.42 2.32
2010-2011 332.89 159.86 2.08

In 2006-2007 &2007-08 ratio was high at 3.86 & 3.89 resp. that means that company has an
extensive investment in current asset that does not provide a significant return.

In 2008-09 positioned improved & current ratio was at 2.66 mainly because of significant
decrease in Cash/Bank, from 69.10crore in 2007-08 to 23.43crore in 2008-09.In 2010-11
the ratio was most satisfactory and was at 2.08.

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CURRENT RATIO GRAPH

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 2. QUICK RATIO= LIQUID ASSET/CURRENT LIABILITIES
LIQUIDASSET=S.DEBTORS+CASH+BANK

This ratio is also termed as ‘Acid Test Ratio’ or ‘Liquidity ratio’. This ratio
is ascertained by comparing the Liquid asset to Current Liabilities. Prepaid
Expenses and Inventories are not taken as Liquid Asset.
The ideal Ratio is 1:1. In LG Electronics the Ratio somewhat less than 1 is
also acceptable.

YEAR LIQUID ASSET CURRENT LIB. Q.RATIO

2006-2007 146.12 70.79 2.06
2007-2008 187.28 85.09 2.20
2008-2009 161.12 112.85 1.42
2009-2010 141.73 129.42 1.09
2010-2011 154.24 159.86 0.96

Represent a similar position as of Current Ratio in 2007-08 it was high at

2.20 which was reduced to 1.42 in 2008-09 and further to 1.09 in 2009-10
mainly due to decrease in Debtors.
In 2010-11 it was at 0.96. The ratio was initially high, as deposits in form
of Cash/Bank were high.
It is advisable to decrease the amount of liabilities, as liabilities from
2005-2006 to 2010-2011 increased by 23%. Which in the year 2008-2009
to 2010-2011 increased by only 15%.
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QUICK RATIO GRAPH

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 (b) ACTIVITY RATIO

1.DEBTORS TURNOVER RATIO=CREDIT SALES/AVG.DEBTORS

AVG.DEBTORS = OPENING DEBTORS+CLOSING DEBTORS
Debtors constitute an important constituent of Current Assets and therefore the quality of
Debtors to a great extent determines firms Liquidity. Sales to Account Receivable Ratio indicate
the efficiency of the staff entrusted with collection of book debts. The higher the ratio the better
it is, since it would indicate that debts are being collected more promptly.
The ratio helps in cash budgeting since the flow of cash can be worked out on the basis of
sales.
YEAR CREDIT SALES AVG. DEBTOR D.T.R.
2006-2007 914.77 109.27 8.37

2007-2008 1042.58 103.79 10.05

2008-2009 1166.46 127.93 9.12

2009-2010 1163.19 128.88 9.02

2010-2011 1232.29 118.31 10.41

It was low in year 2006-07 and was at 8.37, which increased to 10.05 in 2007-08 as a result
of increase in Credit Sales but Avg. Debtors remaining somewhat constant.
In 2008-09 & 2009-10 Debtors Turnover Ratio reduced to 9.12 & 9.02 resp. mainly due to
increase in the amount of Avg. Debtors by 23%, while sales increased by only 12%.
In 2010-11 the positioned improved as Sales increased while Avg. Debtors declined and
was at 10.41

There is no ideal ratio. In LG Electronics the policy they follow is that the Credit given to
Debtors should be less than the Credit given by the Creditors to the Company.
Since the ratio is on increase it is Positive sign for the company.

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DEBTORS TURNOVER GRAPH

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 2. FIXED ASSET TURNOVER RATIO=NET SALES/FIXED ASSET

The ratio indicates the extent to which the investments in fixed assets contribute towards sales.
If compared with previous periods, it indicates whether the investment in fixed assets has been
judicious or not.

YEAR NET SALES FIXED ASSET FA.T.R.

2006-2007 914.77 238.51 3.84

2007-2008 1042.58 250.83 4.15

2008-2009 1166.46 242.86 4.80

2009-2010 1163.19 244.42 4.75

2010-2011 1232.29 204.65 6.02

In 2006-07 Fixed Asset Turnover Ratio was 3.84, which increased to 4.15 as with the
application of only 5% increase in Fixed Asset, sales increase by 14%
In year 2009-2010 there was a slight decline of in the ratio as with the increase in Fixed Asset
the sale revenue declined.
In the year 2010-11 Fixed Asset Turnover Ratio increased significantly and was 6.02 as sales
increased but Fixed Asset declined as in the year 2010-11 there was a decline in BUILDING,
PLANT, FURNITURE and OFFICE EQUIPMENTS by 23%, and depreciation increased by
20%

The increasing ratio is a good sign for LG Electronics . LG Electronics per rupee sales
generated by per rupee of tangible asset maintained by the firm is increasing.

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FIXED ASSET TURNOVER GRAPH

3. CURRENT ASSET TURNOVER RATIO

=NETSALES/CURRENTASSET
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This ratio measures the per rupee sales generated by per rupee of current asset being
maintained. An increasing ratio is a good sign for the company.

YEAR NET SALES CURRENT ASSET CA.T.R

2006-2007 914.77 273.57 3.34
2007-2008 1042.58 331.58 3.14
2008-2009 1166.46 300.37 3.88
2009-2010 1163.19 300.27 3.87
2010-2011 1232.29 332.89 3.70

In 2006-07 Current Asset Turnover Ratio was 3.34 which reduced in 2007-08 to 3.14 as CA
increased by 21% while Sales increased by only 14% Current Asset increased as a result of
increase in Sundry Debtors and Cash & Bank Balance.
In 2008-09/2009-10 there was an increase in the ratio as current asset decreased while Sales
increased, decrease in Current Asset. was mainly due to decrease in Cash & Bank Balance.
In 2010-11 Current Asset again increased mainly due to the increase in Inventories. So
there was a fall in the ratio. So it is a bit of concern for the company.
It is suggested that the level of inventories should be brought down, as there was increase in
inventories by 12% while sales increased by only 6%. The company was not producing
keeping in view the sales prospects.

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CURRENT ASSET TURNOVER GRAPH

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 4. TOTAL ASSET TURNOVER RATIO=SALES/TOTAL ASSET
The ratio measures the per rupee sales generated by per rupee of total assets being
maintained by the company

YEAR NET SALES TOTAL ASSET TA.T.R

2006-2007 914.77 512.08 1.78
2007-2008 1042.58 582.41 1.79
2008-2009 1166.46 543.24 2.15
2009-2010 1163.19 544.69 2.14
2010-2011 1232.29 537.54 2.29

There is no ideal ratio, it should be compared with the ratio of previous years of the same
firm if the ratio is increasing it is a good sign for the company.
In 2006-07/2007-08 the ratio was 1.78 & 1.79 resp.
In 2008-09 it increased to 2.15 which was mainly due to the fall in Current asset, which
forms a part of total asset.
In 2009-10 the ratio decreased due to fall in sales revenue.
In 2010-11 the ratio increased due to fall in total asset and increase in Net Sales.
Since the ratio has increased it is a good sign for LG Electronics as it indicates that sale as a
percentage of total assets have increased.

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 TOTAL ASSET TURNOVER GRAPH

5. WORKING CAPITAL TURNOVER RATIO

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 =SALES/NET WORKING CAP.
NET WORKING CAPITAL=CURRENT ASSET- CURRENT
LIABILITIES

This is also known as Working Capital Leverage Ratio. This ratio indicates whether or not
Working Capital has been effectively utilized in making sales. In case a company can
achieve higher volume of sales with relatively small amount of working capital, it is an
indication of the operating efficiency of the company. The higher the Working Capital
Turnover ratio, the lower is the investment in the working capital and higher would the
profitability.

YEAR NET SALES NET WORKING CAP WC.T.R

2006-2007 914.77 202.78 4.51
2007-2008 1042.58 246.48 4.22
2008-2009 1166.46 187.51 6.22
2009-2010 1163.19 171.02 6.80
2010-2011 1232.29 173.02 7.12

In the year 2006-07 the ratio was 4.51 which reduced to 4.22 as a result of increase in Net
Working Capital, which was mainly due to substantial increase in Current Asset in
comparison with Current Liabilities.
In year 2008-09 the ratio improved to 6.22 which was due to decrease in net working
capital by 24% while sales increase by 12%.
In 2010-11 the ratio was 7.12%, as a result of increase in sales.
Working capital ratio of LG Electronic is increasing which is a positive sign for the
company.
The sales of the company have increased with less investment in working capital.

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 (c) LEVERAGE RATIO
1. DEBT- EQUITY RATIO=TOTAL DEBT/TOTAL OWNER’S
EQUITY
TOTAL DEBT=LOAN+LIABILITIES
OWNER’S EQUITY=SHAREHLDERS FUND-MISC. EXPENDITURE
The DE ratio is the basic and the most common measure of studying the indebtedness of the
firm, it indicates the percentage of funds being financed through borrowings. The Debt-
Equity ratio is determined to ascertain the soundness of the long-term financial policies of
the company.
The ratio indicates the proportion of owner’s stake in business. Excessive liabilities tend to
cause insolvency. The ratio indicates the extent to which the firm depends upon outsiders
for its existence. It tells the owners the extent to which they can gain benefits or maintain
control with a limited investment.
The greater the ratio higher is the risk to the lenders and vice versa.
YEAR TOTAL DEBT OWNER EQUITY RATIO
2006-2007 365.72 251.66 1.45
2007-2008 374.11 312.99 1.19
2008-2009 308.95 354.81 0.87
2009-2010 342.41 396.89 0.86
2010-2011 269.87 408.69 0.66

In 2006-07 the ratio was 1.45 which continuously declined for all the above period and was
at 0.66 in the year 2010-11. Decrease in the ratio is mainly due assets being financed more
by shareholders funds then by external equities. Total debt decreased by 21% from 2008-09
to 2010-11 while owner’s equity increased in the same period leading to fall in debt equity
ratio by 23%.
The larger the ratio, the more is the amount of risk assumed by creditors, and the claims of
the creditors against the assets of the firm.

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As the ratio has decreased in case of LG Electronics it is a good sign for the company.

DEBT- EQUITY RATIO GRAPH

35
 PROPRIETORY RATIO=OWNERS EQUITY/TOTAL ASSET

It establishes relationship between the proprietor’s funds and the total tangible assets. It
measures the conservatism of capital structure and shows the extent of shareholders funds in total
assets employed in the business. The ratio focuses the attention on the general financial strength
of the enterprise. The ratio is of particular importance to the creditors who can find out the
proportion of shareholders fund in the total asset employed in the business. A high ratio will
indicate a relatively little danger to the creditors etc. in case of winding up of the business. A low
proprietary ratio indicates greater risk to the creditors since in the event of losses a part of their
money may be lost. A ratio below 50% may be alarming for the creditors.

YEAR OWNER EQUITY TOTAL ASSET RATIO

2006-2007 251.66 512.08 0.49
2007-2008 312.99 582.41 0.53
2008-2009 354.81 543.24 0.65
2009-2010 396.89 544.69 0.72
2010-2011 408.69 537.54 0.76

In 2006-07 the ratio was 0.49 which increased continuously and was at 0.76 in the year
2010-11
The increase in the ratio was due to increase in owner’s equity as a result of increase in
Reserves & Surplus. The positioned has improved which means relatively higher degree of
security for the company. An enterprise is considered financially weak if it has relatively
small investment in firm in comparison to creditors. A low proprietary ratio would indicate
a relatively larger degree of security for the company.
For LG Electronics owner’s equity in total asset has increased.
It is a good sign for the Company.

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 3. SOLVENCY RATIO=EXTERNAL EQUITY/TOTAL ASSET

The ratio of external equity to total asset is a variant of the proprietary ratio. This ratio
measures the proportion of the firm’s assets that are financed by creditors. To the creditors,
a low ratio would ensure greater security for extending credit to the firm.

YEAR EXTERNAL EQUITY TOTAL ASSET RATIO

2006-2007 365.72 512.08 0.71
2007-2008 374.11 582.41 0.64
2008-2009 308.95 543.24 0.56
2009-2010 342.41 544.69 0.62
2010-2011 269.87 537.54 0.50

In 2006-07 the solvency ratio was at .71, which reduced in 2007-08/2008-2009

In 2009-10 the ratio increased to .62 from .56 in 2009-10 due to increase in the amount of
External debt by 11% while total asset increased marginally
In 2010-11 the ratio was .50 reduced from .62 as the external debt reduced by 21% while
total asset reduced by only 1%.
External equity in total asset has decreased. A high ratio indicates high risk to lenders and
vice versa.
Since the ratio has decreased it is a good sign for the company.

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 4. FIXED ASSET TO NET WORTH= FIXED ASSET/NET WORTH

Fixed asset to net worth indicates the percentage contributed by owners to

the value of fixed assets. The financial experts are of the opinion that in manufacturing
concerns, the investment in Plant should be made out of equity rather than borrowed
capital, therefore a ratio of 1:1 is considered desirable.

YEAR FIXED ASSET NET WORTH RATIO

2006-2007 238.51 251.66 0.94
2007-2008 250.83 312.99 0.80
2008-2009 242.86 354.81 0.68
2009-2010 244.42 396.89 0.61
2010-2011 204.65 408.69 0.50

In the year 2006-07 the ratio was .94, which decreased to .80
mainly due to increase in Net Worth as a result of increase in PAT from
50.10crore to 73.43crore a rise of 55%. An ideal ratio is considered to be1: 1
LG Electronics has achieved this ideal ratio. It is a good sign for the company.

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39
 5. INTEREST COVERAGE RATIO=EBIT/FIXED INTEREST
CHARGES
This ratio is also called times interest earned ratio and it measures the ability of the firm to pay the
fixed interest liabilities. The higher the ratio, better it is both for the firm and for the lenders. For
the firm the probability of committing defaults is reduced and for the lenders the firm is
considered less risky.

YEAR EBIT FIX.INT.CHARGES RATIO

2006-2007 84.07 32.47 2.58
2007-2008 106.40 25.11 4.23
2008-2009 114.77 29.66 3.86
2009-2010 99.47 23.94 4.15
2010-2011 112.62 17.08 6.59

In the year 2006-07 the ratio was 2.58, which increased to 4.23 as a result of decrease in
Fixed Interest Charges which reduced to 3.86 due to rise in the fixed interest charges from
25.11crore to 29.66crore. For the next two years the ratio increased as a result of fall in the
interest charges and was at 6.59 in the year 2010-11.
As the ratio in case of LG Electronics has increased it is a good sign for the company.

Loan funds 2006-07 =294.93 2007-08 =289.02 2008-09 =196.09

2009-10 =213.16 2010-11 = 110

It is seen that though the loan funds had decreased from 289crore in 2010-2011 to 196crore
in 2008-2009 the Fixed interest charges has increased from 25.11crore to 29.66crore. This
is due to the fact that a debt burden was paid off in the month of March for which interest
was paid for the whole year.

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 (d) PROFITABILITY RATIOS

1.GROSS PROFIT RATIO= (GROSS PROFIT/NET SALES) *100

It is also called as average mark up ratio. The Gross Profit is the difference between sales
revenue and the cost of generating those sales. Therefore, the gross profit amount and the
gross profit ratio depend upon the relationship between selling price and cost of production
including direct expenses. The gross profit ratio reflects the efficiency with which it
produces/purchases goods. The gross profit ratio should be analyzed and studied as a time
series.

YEAR G.PROFIT NET SALES RATIO

2006-2007 419.70 914.77 45.88
2007-2008 485.61 1042.58 46.57
2008-2009 558.44 1166.46 47.87
2009-2010 573.91 1163.19 49.33
2010-2011 616.35 1232.29 50.01

The Gross profit ratio for the company is on an increase mainly due to the continuous
increase in the Gross profit, which is mainly due to the increase in sales as a percentage of
direct expenses is more.
A gross profit ratio of 50% means that on every 1-rupee sale, the firm is earning a gross
profit of 50paise.
This ratio indicates the degree to which the selling price of goods per unit may decline
without resulting in losses from operations to the firm.

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42
 2. NET PROFIT RATIO=(NET PROFIT/NET SALES)*100

Net profit is the revenue over expenses in a particular accounting year. It is the net result of
the working of the company during a particular year. This ratio is widely used as measure
of overall profitability and is very useful to proprietors.
It measures the efficiency of management in generating additional revenue over and above
the total cost of operations. It measures the overall efficiency in manufacturing,
administrative, selling and distributing the product.

YEAR N.PROFIT NET SALES RATIO

2006-2007 50.10 914.77 5.47
2007-2008 77.43 1042.58 7.42
2008-2009 77.92 1166.46 6.67
2009-2010 64.44 1163.19 5.53
2010-2011 85.10 1232.29 6.90

Net profit ratio in the year 2006-07 was 5.47, which increased to 7.42 in the year 2007-08
because of 54% increase in Net Profit
In 2008-09 the ratio fell to 6.67 because Net profit increase by less than 1% while sales
increased by 12%
In 2009-10 the ratio further fell to 5.53 as a result of decrease in net profit by 17%
In 2010-11 the ratio increased because of rise in net profit by 32%

Since the ratio has increased it is considered a good sign for the company.

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44
 3. OPERATIN MARGIN=PBDIT/SALES PBDIT-OTHER INCOME

The Operating Profit refers to the pure operating profits of the firm i.e. the profit generated
by the operation of the firm and hence is calculated before considering any financial
charges, non operating income/loss and tax liability etc. The OP ratio shows the percentage
of pure profit earned on every 1 rupee of sale made. OP ratio would be less than the Gross
Profit ratio as Selling and Administrative Expenses, Financial Expenses; Depreciation
charges are deduced to arrive at OP. The OP ratio in conjunction with the gross profit ratio
depicts whether changes in the profitability of the firm are caused by changes in the
manufacturing efficiency or administrative efficiency.

YEAR PBDIT SALES OPERATING MARGIN

2006-2007 80.23 914.77 8.77
2007-2008 93.51 1042.58 8.96
2008-2009 118.42 1166.46 10.15
2009-2010 106.58 1163.19 9.16
2010-2011 126.35 1232.29 10.25

In the year 2006-07 and 2007-08 the operating margin improved marginally
But in the year 2008-09 the margin rose to 10.15 from 8.96 in 2007-08 due to increase in
PBDIT
The margin declined to 9.16 in the year 2009-10 due to fall in PBDIT
The margin again improved in 2010-11 to 10.25 due to better figure of PBDIT.

4. EARNING PER SHARE=PAT/NO. OF SHARES

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This is a well-known and widely used indicator of the profitability because it can be easily
compared to the previous EPS figures and the EPS figures of other companies. The aim of
every company should be wealth maximization or to increase the earnings of the
shareholders. The EPS helps in determining the Market Price of the Equity Share of the
Company. A comparison of EPS of the company with another will also help in deciding
whether the equity share capital is being effectively used or not. It also helps in estimating
the company’s capacity to pay dividend to its equity shareholders.

YEAR PAT NO. OF SHARES EPS

2006-2007 50.10 28,50,89,501 1.76
2007-2008 77.43 28,52,14,832 2.71
2008-2009 77.92 28,52,14,832 2.73
2009-2010 64.44 28,53,66,429 2.26
2010-2011 85.10 28,56,62,514 2.98

The EPS has increased from the year 2006-07 to 2007-08 but in the year 2009-10 the EPS
Fell from 2.73 in 2008-09 to 2.26 due to fall in the PAT
In 2010-11 the EPS increased to 2.98 due to increase in PAT by 32%.
The increase in the EPS is a good sign for any company as it increases the confidence of the
equity shareholders on the company.
It is a good sign for LG Electronics.

5. DIVIDEND PER SHARE (DPS) = TOTAL PROFITS DISTRIBUTED

NUMBER OF SHARES

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Sometimes the equity shareholders may not be interested in the EPS but in the return, which they
are actually receiving from the firm in form of dividends. The amount of profits distributed to
share holders per share is known as DPS.

YEAR DIVIDEND DECLARED NO. OF SHARES DPS

2006-2007 1425.45 28,50,89,501 0.5
2007-2008 2851.28 28,52,14,832 1.0
2008-2009 2852.14 28,52,14,832 1.0
2009-2010 1427.47 28,53,66,429 0.5
2010-2011 4000.52 28,56,62,514 1.4

Dividend per share in 2006-07 was Rs.5, which was increased to Rs.10 in the year 2007-
08and remained same for the next year
In the year 2009-10 the DPS fell to Rs.5 as PAT reduced during this period
In 2010-11 the DPS was again at Rs.14 due to increase in PAT.
It is a good sign for the company as well as for the shareholders as the DPS have increased.

6. DIVIDENED PAYOUT RATIO = DPS/EPS

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This is the ratio between the DPS and the EPS of the firm, i.e. it refers to the proportion of
EPS that has been distributed by the company as dividend.

YEAR DPS EPS RATIO

2006-2007 0.5 1.76 28.4
2007-2008 1.0 2.71 36.9
2008-2009 1.0 2.73 36.6
2009-2010 0.5 2.26 22.2
2010-2011 1.4 2.98 46.9

As the percentage of DP ratio has increased it is a good sign for the shareholders, whose
earnings are increasing.

EXPENSES RATIO

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 The expense ratios are the measure of cost control and are computed by
establishing relationship between different expense items and the sales. In a
firm total expense can of operations can be subdivided into.
 (A) Cost of Goods Sold
 (B) Total Material Cost
 (C) Selling and Administrative Expenses
 (D) Advertisement Expenses
 (E) Employee cost ratio
 (F) Return on owner’s equity
 (G) Return on capital employed
(A) COST OF GOOD SOLD RATIO
=(CST.OF GOODS SOLD/NET SALES)*100
This ratio measures the percentage of sales that is being spent on the
producing the goods for sale. It takes into account the Direct Expenses.
YEAR CST OF GOODS SOLD NET SALES RATIO
2006-2007 495.07 914.77 54.11
2007-2008 556.97 1042.58 53.44
2008-2009 608.02 1166.46 52.12
2009-2010 589.28 1163.19 50.66
2010-2011 624.22 1232.29 50.65

The cost of goods sold ratio has decreased continuously from 54.11 in 2006-07
To 50.65 in 2010-11. The company is spending less on direct expenses but still the sales are
increasing which is good for the company.
It is complimentary of gross profit ratio. If cost of goods sold were 50%, gross profit would
be 50%.

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 (B) TOTAL MATERIAL COST RATIO
= (MATERIAL COST/NET SALES)*100

It measures the amount spent on material (Direct) for producing goods, that is
contributing to Sales.
YEAR MATERIAL COST NET SALES RATIO
2006-2007 458.49 914.77 50.10
2007-2008 526.94 1042.58 50.54
2008-2009 538.47 1166.46 46.16
2009-2010 515.61 1163.19 44.32
2010-2011 521.18 1232.29 42.29

As the ratio is on a fall, it is a very good sign for the company, as the sales are increasing
more in relation to the amount spent on Material.

(C) SELLING & ADMINISTRATIVE RATIO

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 = (SELLING & ADMINISTRATIVE RATIO/NETSALES)*100

It measures the amount that the company is spending on selling its product.
It takes into account all the indirect expenses.

YEAR EXPENSES NET SALES RATIO

2006-2007 258.95 914.77 28.30
2007-2008 292.08 1042.58 28.01
2008-2009 339.72 1166.46 29.11
2009-2010 364.57 1163.19 31.34
2010-2011 386.27 1232.29 31.34

The ratio is showing an increasing trend, which is not good for the company.
The company is spending more on selling and administration but the returns in form of
sales are not increasing in relation to the spending.
The company should have a check on the indirect expenses, it has to find out the item of
expenses which is not given returns in a Positive manner.

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 (D) ADVERTISEMENT EXPENSES RATIO
= (ADVERTISEMENT COST/NET SALES)*100

This ratio measure the amount spent on advertisement and publicity and the percentage it is
contributing to sales.

YEAR ADV. EXP. NET SALES RATIO

2006-2007 114.34 914.77 12.49
2007-2008 120.01 1042.58 11.51
2008-2009 146.07 1166.46 12.52
2009-2010 154.45 1163.19 13.27
2010-2011 159.96 1232.29 12.98
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Since the ratio has decreased it is considered a good sign for the company as, though the
advertisement expenditure has increased by 4%. Advertisement expenses as a percentage of
sales have decreased.
However the company has to keep a check on this expense as out of total selling and
administrative expense the company is spending around 40% on Advertisement expenses.

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 (E) EMPLOYEE COST RATIO
= (EMPLOYEE COST/NET SALES)*100
This ratio measure the amount spent on Employees wages and salaries and the percentage it is
contributing to sales.

YEAR EMP. COST NET SALES RATIO

2006-2007 54.88 914.77 5.91
2007-2008 63.13 1042.58 6.05
2008-2009 77.69 1166.46 6.66
2009-2010 84.48 1163.19 7.26
2010-2011 93.81 1232.29 7.61

As the ratio is increasing it is a good sign for the company as it is looking after the
employees’ welfare by increasing their salaries. Also it would motivate the employees.

(F) RETURN ON OWNER’S EQUITY=(PAT/OWNER’S EQUITY)*100

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 (RETURN ON NET WORTH)
The ROE examines profitability from the perspective of the equity investors by relating profits
available for the equity shareholders with the book value of the equity investment. The ROE
indicates as to how the firm has used well the funds of the owners.
YEAR PAT OWNER’S EQUITY RATIO
2006-2007 50.10 251.66 19.90
2007-2008 77.43 312.99 24.73
2008-2009 77.92 354.81 21.96
2009-2010 64.44 396.89 16.23
2010-2011 85.10 408.69 20.82

In the year 2006-07 the ratio was 19.90 that rose to 24.73 in the year 2007-08 due to
increase in the amount of PAT by 35%.
In the year 2008-09 the ratio decreased as PAT increased by only 0.49 Crore while owner’s
equity rose by 44 Crore
In 2010-11 the ratio further declined mainly due to decrease in PAT, by 17%
In 2010-11 the ratio improved due to increase in PAT by 32%.

(G) RETURN ON CAPITALEMPLOYED/ASSET =PAT + INTEREST/

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 CAPITAL EMPLOYED

One of the most widely used ratios is the return on Capital Employed/Assets. Since assets
are used to generate income, the higher the income, the more productive assets were during
the period. The return on Capital Invested is a concept that measures the Profit that a firm
earns on investing a Unit of Capital. The inclusion of interest is conceptually sound because
total assets have been financed from the pool of funds supplied by creditors and owners.

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YEAR PAT + INT. CAP. EMPLOYED RATIO

2006-2007 82.57 556.43 14.8
2007-2008 102.54 609.05 16.8
2008-2009 107.58 558.30 19.2
2009-2010 88.38 613.53 14.4
2010-2011 102.18 521.09 19.6

Return on capital employed is the Testimony of a Companies continuous effort to

effectively utilize its Assets. There was a continuous improvement in this ratio for LG
Electronics, but during the year 2009-10 due to fall in PAT and investment in Capital
Employed increased, the Ratio fell to 14.4 from 19.2
The ratio improved as investment in Capital Employed decreased from 613.53 to 521.09
mainly because the company was able to decrease the amount of loan funds by around 50%.
The increase in the Ratio is a good sign for the Company.

LIMITATIONS OF RATIOS 
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      Ratios provide a great deal of information, but they do have limitations. Remember that
ratios only indicate the relationship between two sets of figures. What is more, one ratio should
not be taken to represent the whole of your business. Try to get an overall picture.

Ratio analysis allows you to compare current and past performances of the company but doesn't
offer any indication of future performance. Ratios are developed for specific periods.
Consequently, if you operate a seasonal business, ratios may not provide an accurate measure of
financial performance.

   Additionally, if you make comparisons with other businesses in your industry, keep in mind
not all businesses are the same. Ratios are usually comparisons with industry averages, however
your business will not, and should not be, exactly the same as others in your industry. It should
also be noted that financial statements are often prepared by different methods, resulting in
financial ratios that may not present an accurate account of the average business in your industry.

1. Accounting Information

o Different Accounting Policies

   The choices of accounting policies may distort inter company comparisons. Example IAS 16
allows valuation of assets to be based on either revalued amount or at depreciated historical cost.
The business may opt not to revalue its asset because by doing so the depreciation charge is
going to be high and will result in lower profit.  

o Creative accounting

   The businesses apply creative accounting in trying to show the better financial performance or
position which can be misleading to the users of financial accounting. Like the IAS 16
mentioned above, requires that if an asset is revalued and there is a revaluation deficit, it has to
be charged as an expense in income statement, but if it results in revaluation surplus the surplus
should be credited to revaluation reserve. So in order to improve on its profitability level the
company may select in its revaluation programme to revalue only those assets, which will result
in revaluation surplus leaving those with revaluation deficits still at depreciated historical cost.

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 2. Information problems
o Ratios are not definitive measures 
Ratios need to be interpreted carefully. They can provide clues to the company’s
performance or financial situation. But on their own, they cannot show whether
performance is good or bad. Ratios require some quantitative information for an
informed analysis to be made.

o Outdated information in financial statement 

The figures in a set of accounts are likely to be at least several months out of date,
and so might not give a proper indication of the company’s current financial
position.

o Historical costs not suitable for decision making  

IASB Conceptual framework recommends businesses to use historical cost of
accounting. Where historical cost convention is used, asset valuations in the
balance sheet could be misleading. Ratios based on this information will not be
very useful for decision-making.

o Financial statements certain summarized information

   Ratios are based on financial statements, which are summaries of the accounting records.
Through the summarization some important information may be left out which could have been
of relevance to the users of accounts. The ratios are based on the summarized year-end
information, which may not be a true reflection of the overall year’s results.

o Interpretation of the ratio

   It is difficult to generalize about whether a particular ratio is ‘good’ or ‘bad’. For example a
high current ratio may indicate a strong liquidity position, which is good or excessive cash,
which is bad. Similarly Non current assets turnover ratio may denote either a firm that uses its
assets efficiently or one that is under capitalized and cannot afford to buy enough assets.

3. Comparison of performance over time

o Price changes 
Inflation renders comparisons of results over time misleading as financial figures
will not be within the same levels of purchasing power. Changes in results over
time may show as if the enterprise has improved its performance and position
when in fact after adjusting for inflationary changes it will show the different
picture.
o Technology changes 
When comparing performance over time, there is need to consider the changes in
technology. The movement in performance should be in line with the changes in
technology. For ratios to be more meaningful the enterprise should compare its
results with another of the same level of technology as this will be a good basis
measurement of efficiency.

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 o Changes in Accounting policy
o    Changes in accounting policy may affect the comparison of results between
different accounting years as misleading. The problem with this situation is that
the directors may be able to manipulate the results through the changes in
accounting policy. This would be done to avoid the effects of an old accounting
policy or gain the effects of a new one. It is likely to be done in a sensitive period,
perhaps when the business’s profits are low.

o Changes in Accounting standard

   Accounting standards offers standard ways of recognising, measuring and presenting financial
transactions. Any change in standards will affect the reporting of an enterprise and its
comparison of results over a number of years.

o Impact of seasons on trading

   As stated above, the financial statements are based on year-end results which may not be true
reflection of results year round. Businesses, which are affected by seasons, can choose the best
time to produce financial statements so as to show better results. For example, a tobacco growing
company will be able to show good results if accounts are produced in the selling season. This
time the business will have good inventory levels, receivables and bank balances will be at its
highest. While as in planting seasons the company will have a lot of liabilities through the
purchase of farm inputs, low cash balances and even nil receivables.

4. Inter-firm comparison
o Different financial and business risk profile

   No two companies are the same, even when they are competitors in the same industry or
market. Using ratios to compare one company with another could provide misleading
information. Businesses may be within the same industry but having different financial and
business risk. One company may be able to obtain bank loans at reduced rates and may show
high gearing levels while as another may not be successful in obtaining cheap rates and it may
show that it is operating at low gearing level. To Uninformed analyst he may feel like company
two is better when in fact its low gearing level is because it cannot be able to secure further
funding.

o Different capital structures and size

   Companies may have different capital structures and to make comparison of performance when
one is all equity financed and another is a geared company it may not be a good analysis.

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 o Impact of Government influence

   Selective application of government incentives to various companies may also distort inter
company comparison. One company may be given a tax holiday while the other within the same
line of business not, comparing the performance of these two enterprises may be misleading.  

o Window dressing

   These are techniques applied by an entity in order to show a strong financial position. For
example, MZ Trucking can borrow on a two-year basis, K10 Million on 28th December 2003,
holding the proceeds as cash, then pay off the loan ahead of time on 3rd January 2004. This can
improve the current and quick ratios and make the 2003 balance sheet look good. However the
improvement was strictly window dressing as a week later the balance sheet is at its old position.

  Ratio analysis is useful, but analysts should be aware of these problems and make

adjustments as necessary. Ratios analysis conducted in a mechanical, unthinking manner is

dangerous, but if used intelligently and with good judgment, it can provide useful insights

into the firm’s operations.  

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 BIBLIOGRAPHY

 Annual Reports of LG Electronic India Ltd.

 www.lgelectronic.in
 Non Executive Finance Analysis : P CHANDRA

FINANCIAL MANAGEMENT CHANDRA PRASANNA

FINANCIAL AND COST

ACCOUNTING DR. S.N.MAHESHWARI

MANAGEMENT ACCOUNTING A.K GARG

MANAGEMENT ACCOUNTING K.G GUPTA

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