Gokhale Education Society’s

B.Y.K. College of Commerce

Prin. T. A. Kulkarni Vidyanagar, Nashik – 5.
‘NAAC’ Re-accredited with Grade ‘A’
ISO 9001-2015 Certified College

JOSHI SANCHIT PRASHANT

TYBBA (Finance)
Roll No:80

Subject Teacher
(Mrs. Rama Yadav)
 University Seat No:

Gokhale Education Society’s

B.Y.K. College of Commerce

Prin. T. A. Kulkarni Vidyanagar, Nashik – 5.

‘NAAC’ Re-accredited with Grade ‘A’

ISO 9001-2015 Certified College

Certificate

This is to certify that Mr. Joshi Sanchit Prashant of TYBBA (FINANCE) Roll no.80
has undertaken and completed the tutorial for the subject Analysis of financial
statements as required by the rules of Savitribai Phule Pune University for the
year 2023-2024

Date: / / Project Guide

(Mrs. Rama Yadav)
INDEX
Sr. Company Topic Signature
No name of Teacher
1 Financial Analysis of any
I. DWARKA TRADERS
company of three years using
Trend Percentage/
Comparative Statement/Ratio
Analysis.

2 Financial Analysis of two

I.SHRIDHAR BATTERIES different companies using
II.SANKARSHAN Trend Percentage /
BATTERIES Comparative Statement/Ratio
analysis.
 INTRODUCTION
Finance as a subject offers variety of
concepts, trends, ratios, finacial statements and
charts. All these concepts are related to the overall
financials of a business firm or organisation in some
way or the other.It is needed for the finance students
to be able to understand and interpret these facts
and figures efficiently. So a Finance project exposes
students to the actual business environment and
aids them to study and analyze the financial records
of a business unit thereby to teach them through
practical experiences to understand and interpret all
the financial ratios, trends and charts

TREND PERCENTAGE:
Trend analysis is a strategy used in making future
predictions based on historical data. It allows to compare
data points over a given period of time and identify
uptrends, downtrends, and stagnation.
If a trend is stable and steady over a period of time, it
indicates consistency and invokes more certainty than a
trend that is drastically changing positions. However,
inconsistent trends might be more attractive to some
investors who analyze certain external factors
contributing to the radical trend changes. High risk
usually involves chances of high rewards.
Investors and business managers use this information to
make data-driven decisions and improve strategies.
BENEFITS OF TREND ANALYSIS

• It is easy to compare the performance of two or more firms

over the same period of time, so you can see how strong or
weak a business is compared to another one in the same
industry.

• Trend analysis can be used with a myriad of numerical data

types, including traditional data (i.e., profit or expenses) and
alternative data (website traffic, customer complaints, POS
transactions, and many more).

• Data suggests you can use these long-term trends to identify

actionable patterns. These patterns can afterward be used to
make forecasts.

• You can use trend analysis to examine preliminary financial

statements for inconsistencies and see whether certain
adjustments must be implemented before releasing the
statements to the public.

• Trend analysis allows you to examine the entire stock market

to detect signs of potential trend changes for better or worse.

''The core benefit of the trend analysis is that you can

compare your incoming data with another firm's and
measure your firm's performance in a realistic way. If you
know the exact way to analyze the trend then you’ll be able
to identify which direction your business is going.''
- Larry Hart, The Stock Dork
 COMPARATIVE STATEMENT
Comparative financial statements are the complete set of financial
statements that an entity issues, revealing information for more than one
reporting period. The financial statements that may be included in this
package are as follows:

The income statement (showing results for multiple periods)

The balance sheet (showing the financial position of the entity as of more
than one balance sheet date)

The statement of cash flows (showing the cash flows for more than one
period)

Comparative Balance Sheet -

 RATIO
ANALYSIS
Ratio analysis is the comparison of line items in the financial statements of
a business. Ratio analysis is used to evaluate a number of issues with an
entity, such as its liquidity, efficiency of operations, and profitability.

Ratio analysis is a systematic method by which the relationship of the items

or group of items related to financial statements are computed accurately,
determined scientifically and presented analytically.

TYPES OF RATIO ANALYSIS

Liquidity Ratios: The ability of a business to pay the due amount to

stakeholders as to when it is due is known as liquidity; the ratios calculated
to measure it are known as liquidity ratios. The most common type of
Liquidity Ratios are -

• Current Ratio
• Quick Liquid Ratio

Profitability Ratios: Profitability ratios are referred to as analysis of

business profits in relation to the revenue generated from the business
operations ( or funds) or assets used in the business and the ratios
calculated to meet its objectives are termed as profitability ratios.

• Gross Profit Ratio

• Net Profit Ratio
• Operating Ratio

Turnover Ratio: These are the ratios that are calculated for measuring the
efficiency of business operations based on the effective utilization of
resources. Hence, these are also termed efficiency ratios. A higher turnover
ratio means better utilization of assets and signifies improved business
efficiency and profitability.
Some prominent examples of Turnover Ratio are -

• Activity Turnover Ratio

• Fixed Asset Turnover Ratio
Solvency Ratio: The business solvency is determined by its ability to meet
its contractual obligations towards stakeholders, specifically towards
external stakeholders, and the ratios calculated to measure the business
solvency positions are known as the solvency ratio. The solvency ratios are
long-term in nature.

• Debt-Equity Ratio
• Proprietory Ratio

WHAT ARE THE USES OF RATIO ANALYSIS?

i. Ratio analysis can be performed to track changes to

a company over time to better understand the
trajectory of operations.
ii. Ratio analysis can be performed to compare results
with other similar companies to see how the
company is doing compared to competitors.
iii. Ratio analysis can be performed to strive for
specific internally-set or externally-set benchmarks.
 Q.1 Financial Analysis of any company of three years using
Trend Percentage/ Comparative Statement/Ratio Analysis.

ORGANIZATION PROFILE
Dwarka Traders in Dwarka, Nashik is known to satisfactorily cater to the demands of its
customer base. The business came into existence in 1988 and Dwarka Traders has created a
strong foothold and designation in the area of Land Developement. They have undertaken
many prominent land developing projects which add more feathers in the unique
infrastrures of Nashik. They have been succesful in creating a recognition in the field of
Land Development, Construction and Architecture. Customer centricity is at the core of
Dwarka Traders in Dwarka, Nashik and it is this belief that has led the business to build
long-term relationships. Ensuring a positive customer experience, making available goods
and/or services that are of top-notch quality is given prime importance.
 BALANCE SHEET OF DWARKA
TRADERS AS ON
31 MARCH
ST

Equities & March March March

Liabilities 2019 2020 2021

Share 400,000 500,000 710,000

Capital
Loan 250,000 440,000 780,000
Bills Payable 550,000 600,000 571,000
General 200,000 280,000 340,000
Reserve
Total 1,400,000 1,820,000 2,401,000
Liabilities
Assets Mar Mar Mar
ch ch ch
201 202 202
9 0 1
Fixed Assets 320,000 450,000 6,00,000
Investment 400,000 500,000 650,000
Bills 250,000 300,000 450,000
Receivable
Sundry 100,000 265,000 325,000
debtors
Cash 330,000 305,000 376,000
Total Assets 1,400,000 1,820,000 2,401,000
 Trend Percentage

Equities & March March March Trend Trend Trend

Liabilities 2019 2020 2021 Percent Percent Percent
age2020 age2021 age2022

Share 400,000 500,000 710,000 100% 125% 177.5%

Capit
al
Loan 250,000 440,000 780,000 100% 176% 312%
Bills 550,000 600,000 571,000 100% 109% 109%
Payable
General 200,000 280,000 340,000 100% 140% 170%
Reserve
Total 1,400,000 1,820,000 2,401,000 100% 130% 171.5%
Liabil
ities
Assets March March March
2019 2020 2021

Fixed Assets 320,000 450,000 6,00,000 100% 140.62% 187.5%

Investment 400,000 500,000 650,000 100% 125% 162.5%
Bills 250,000 300,000 450,000 100% 120% 180%
Receivable
Sundry 100,000 265,000 325,000 100% 265% 325%
debtors
Cash 330,000 305,000 376,000 100% 92.42% 113.93%
Total Assets 1,400,000 1,820,000 2,401,000 100% 130% 171.5%
COMPARATIVE BALANCE SHEET :
IN THE BOOKS OF
DWARKA TRADERS
COMPARATIVE
BALANCE SHEET
OF YEAR 2019 AND
2020

Particulars 2019 2020 Absolut Percentag

e

Share Capital 400,000 500,000 100,000 25%

Loa 250,000 440,000 190,000 76%
n
Bills Payable 550,000 600,000 50,000 9.09%
General Reserve 200,000 280,000 80,000 40%
Total Liabilities 1,400,00 1,820,00 420,000 30%
0 0
ASSETS March March
2019 2021
Fixed Assets 320,000 450,000 130,000 40.62%
Investment 400,000 500,000 100,000 25%
Bills Receivable 250,000 300,000 50,000 20%
Sundry debtors 100,000 265,000 165,000 165%
Cas 330,000 305,000 -25,000 75.75%
h
Total Assets 1,400,00 1,820,00 420,000 30%
0 0
 IN THE BOOKS OF
DWARKA TRADERS
COMPARATIVE
BALANCE SHEET
OF YEAR 2020 AND
2021

Liabilities 2020 2021 Absolute Percentage

Change
Share Capital 500,000 710,000 210,000 42%
Loan 440,000 780,000 340,000 77.27%
Bills Payable 600,000 571,000 -29,000 4.83%
General Reserve 280,000 340,000 60,000 21.42%
Total Liabilities 1,820,000 2,401,000 581,000 31.92%
ASSETS March March
2020 2021
Fixed Assets 450,000 6,00,000 150,000 33.33%
Investment 500,000 650,000 150,000 30%
Bills Receivable 300,000 450,000 150,000 50%
Sundry debtors 265,000 325,000 60,000 22.64%
Cash 305,000 376,000 71,000 23.27%
Total Assets 1,820,000 2,401,000 581,000 31.92%
 RATIO ANALYSIS

• Current Ratio:

Current ration indicates how the expected claims are covered by

current assets.

Formula:
Current Ratio = Current Assets/Current Liabilities

Hence,

Year Current Current Current

Assets Liabilities Ratio
2019 680,000 550,000 1.23
Times
2020 870,000 600,000 1.45
Times
2021 1,151,000 571,000 2.01
Times

This ratio indicates the coverage of current assets to

current liabilities. Higherrate of the ratio is higher
liquidity of the firm. Here in 2021.
 • Current Assets to Fixed Assets:

This Ratio shows proportion of current assets to fixed assets.

Formula:
Current Assets to Fixed Assets = Current Assets / Fixed Assets

Hence,

Year Current Fixed Current Assets

Assets Assets to Fixed Assets
2019 680,000 320,000 2.12Times
2020 870,000 450,000 1.93Times
2021 1,151,000 600,000 1.91Times

This ratio indicates the coverage of Current assets to

Fixed assets. The higherrate of ratio are items that the
company expects to use up or sell within a year.

• Total Assets Turnover:

The total asset turnover ratio compares the sales of a

company to its asset base.

Total Assets Turnover = Net Sale / Total Assets

Formula:

Hence,

Year Sales Total Total Asset

Assets Turnover
2019 600,000 1,400,000 0.428 Times
2020 800,000 1,820,000 0.439 Times
2021 1,200,000 2,401,000 0.499 Times
Not only fixed assets are directly concern with the
generation of sales, but otherassets also contribute to the
production and sales activity of the firm.

CONCLUSION

• In this project financial statement of 3 years has

been compared and by applying the ratio analysis
technique it is concluded that firm is gaining
momentum in 2021 as compared to last 2 years

• The Current Ratio has increased from last 2

consecutive years crossing 2 . This is because of
increase in profitability due to less bills payable.

• Total assets ratio is increasing from last year. That

means the total assets and sales are increasing
remarkabely.

• Current Ratio is 2.01 in 2021 which is greater than

normal standard of 2;1. Current ratio indicate the
coverage of current asset large to the current
liability.
• We can observe that total asset turnover ratio is
increasing as compared to previous years. Which is
good for business and its growth. We can conclude
that this firm can make best use of it's available
resources and can show great results in the years to
come.
 Q. 2

ORGANIZATION
PROFILE
• Sridhar Batteries ;

Sridhar Batteries is a local business enterprise offering all

types of batteries such as Automotive vehicle batteries, Inverter batteries,
UPS, Lift batteries and all kinds of services related to batteries and it's
maintainence such as Battery Charging, replacing distilled water in the
batteries which plays important role in cooling the batteries.

Sridhar Batteries has dealership of many prominent

battery brands such as Exide, Amaron, SF Sonic, Powerzone, TATA, Amco
and many more. Which offers many options to its customers in order to
which battery brand they want to rely upon.

• Sankarshan Batteries and Solar ;

Sankarshan Batteries and Solar is a renowed batteries

and solar distributer in Nashik City. Sankarshan Batteries and Solar have
created a renowed name of their enterprise among its customer base which
is spread widely across Nashik and beyond it as well. The owner of the firm
stresses the fact that its because of its apt service and a great knowlegde in
the field of solar that it has been possible for them to attract the customers
and clients from outside Nashik as well.
Sankarshan Batteries and Solar has exclusive
distributership of some prominent and renowned brands in battery sector.
Along with batteries they also offer solar services which adds more value to
the enterprise.
 BALANCE SHEET
OF
SRIDHAR BATTERIES &
SANKARSHAN
BATTERIES AND SOLAR
AS ON 31 MARCH 2021
ST

Equities and Liabilities Sridhar Sankarshan

Batteries Batteries &
Solar
Proprietors Funds 2,600,000 3,200,000
Total Liabilities 2,600,000 3,200,000
Assets
Fixed Assets 1,400,000 1,800,000
Investments 400,000 500,000
Current Assets 800,000 900,000
Total Assets 2,600,000 3,200,000
 Trend Percentage:

Particula Sridhar Sankarsh Trend

Batteries an Percenta
rs
Batteries ge
& Solar
Proprietor 2,600,00 3,200,00 123.07%
s 0 0
Funds
Total 2,600,0 3,200,0 123.07%
Liabiliti 00 00
es
Asset
s
Fixed 1,400,00 1,800,00 128.57%
Assets 0 0
Investmen 400,000 500,000 125%
ts
Current 800,000 900,000 112.5%
Assets
Total 2,600,0 3,200,0 123.07%
Assets 00 00
 COMPARATIVE STATEMENTS :

Liabilitie Sridh Sankars Absolu Percenta

han te ge
s ar
Batteries change change
Batter & Solar
ies
Proprieto 2,600,000 3,200,000 600,000 23%
rs Funds
Total 2,600,000 3,200,000 600,000 23%
Liabiliti
es
Assets
Fixed 1,400,000 1,800,000 400,000 28.57%
Assets
Investme 400,000 500,000 100,000 25%
nts
Current 800,000 900,000 100,000 12.5%
Assets
Total 2,600,000 3,200,000 600,000 23%
Assets
 RATIO ANALYSIS:

• Debt to Equity Ratio:

This ratio is used to evaluate a company's financial

leverage and is calculated by dividing a company's total
liabilities by its shareholder equity.

Debt to Equity Ratio = Long term Debt/Shareholders Funds

Formula:
Hence,

Company Long term Shareholder’s Debt to Equity

Debt Funds Ratio
Sridhar 824,365 1,648,732 0.49: 1
Batteries
Sankarshan 845,896 1,691,792 0.5:1
Batteries &
solar

• Proprietory Ratio:

Proprietary ratio is a type of solvency ratio that is useful

for determining the amount or contribution of
shareholders or proprietors towards the total assets of the
business. It is also known as equity ratio or shareholder
equity ratio or networth ratio.

Proprietary Ratio = Shareholder’s Fund / Total Assets

Formula:
Hence,

Companies Shareholder’s Total Assets Proprietary

Fund Ratio
Sridhar 2,000,000 2,600,000 0.76:1
Batteries
Sankarshan 2,450,000 3,200,000 0.76:1
Batteries &
Solar

• Current Assets to Fixed Assets:

The CA/FA ratio is obtained by dividing current assets by

the fixed assets of a firm. It is notable that the CA/FA
ratio provides some significant outcomes for the firm's
investment policies.

Formula:
Current Assets to Fixed Assets = Current Assets / Fixed Assets

Hence,

Companies Current Fixed Current

Assets Assets Assets to
Fixed
Assets
Sridhar 800,000 1,400,000 0.57:1
batteries
Sankarshan 900,000 1,800,000 0.5:1
Batteries
& Solar
 CONCLUSION
• Comparative data can demonstrate how a company
is performing over time and can be used to estimate
likely future performance. This data can also
compare a company's financial standing with
industry averages while measuring how a company
stacks up against others within the same sector.

• As we can see in the comparative statement balance

sheet above thecurrent
assets of Sankarshan Batteries & Solar are more
than Sridhar Batteries by Rs.100,000. And there is
difference of Rs.100,000 in investment.

• Therefore, the above case study explains the

relevance of accounting ratios in analyzing the
financial statements of a company.