Roopa Project

A STUDY ON FINANCIAL ANALYSIS OF VRL LOGISTICS LIMITED
CHAPTER-01
INTRODUCTION
K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

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INTRODUCTION
Finance is defined as the provision of money when it is required. Every enterprise needs
finance to start and carry out its operation. Finance is the life-blood of an organization. So,
finance should be managed effectively.
A central focus of financial analysis is evaluating the VRL Logistics limited ability to earn
a return on its capital that is at least equal to the cost of that capital, to profitably grow its
operations, and to generate enough cash to meet obligations and pursue opportunities.
The study of Financial Statement is a prepared for the purpose of presenting periodical
review or report by management in business and result achieved during the period under review.
They reflect the financial position and operating strength or weaknesses of the VRL Logistics
Limited by properly establishing relationship between the items of the balance sheet and remove
statements.
The VRL Logistics Limited analyst is able to say how well the firm could utilize the resources
of the society in generating services. It is necessary for every company. Hence it is overall
responsibility of the management to see that the resources of the company are used most
efficiently & effectively and the VRL Logistics Limited financial position is good.
The VRL Logistics Limited Financial Statement analysis does indicate what can be expected
in future Form the firm.
NEED FOR THE STUDY
The VRL company balance sheets and Financial Statements are prepared to meet External
reporting obligation and also for decision making purposes. They play dominant role in setting
the framework of managerial decisions.

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OBJECTIVES OF THE STUDY
1) To examine the liquidity position of VRL Logistics limited.
2) To analyze the solvency position of VRL Logistics Limited
3) To determine the profitability and operating efficiency of VRL logistics Limited
4) To analyze the financial position of VRL Logistics Limited.
RESEARCH METHODOLOGY
This study is completely based on secondary data which were collected from the company's
annual audited reports, reference books, articles and company website.
Financial tools such as comparative analysis and ratio analysis were used to analyze the
financial statements of the company and determine the financial position of the company.
SCOPE OF THE STUDY
 This project considers financial data analyzed for four years.

 This study covers comparative analysis of Balance sheet and ratio analysis, both analyses
enables conclusions to be drawn from the figures as to know the earning capacity,
operational efficiency & financial position etc. of a concern.
 This study includes the calculation of different financial ratios. It compares 4 years
financial statements of the company to know its performance in these different years.
LIMITATIONS OF THE STUDY
1) This study is restricted to data relating to a period of previous 4 years.
2) Data has been collected from secondary source and hence the results are limited to the
reliability of such secondary data.

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CHAPTER SCHEME
The whole organization study work is divided into 5 chapters. The chapters are arranged
in sequential order.
CHAPTER -01- INTRODUCTION
The introduction chapter deals with the introduction to the project reports. Need for the
study, Objectives of the study, Research methodology, Scope and Limitations of the study.
CHAPTER-02- CONCEPTUAL FRAME WORK OF FINANCIAL ANALYSIS
This chapter will provide the theoretical or conceptual framework of the key definition
and the concept, like introduction, meaning, concept, objective, importance, and types of
financial analysis, procedure, methods or devices, applications, limitations of financial analysis.
Ratio Analysis- meaning, nature, limitations, and types of Ratio analysis.
CHAPTER-03- PROFILE OF VRL LOGISTICS LIMITED
This chapter deals with the introduction of VRL Logistics Limited like industry profile,
history of VRL Ltd. Current position, profile of VRL Ltd, vision, mission, objectives,
achievements, awards, products and services, organization structure, board of directors, and
SWOT analysis of VRL Logistics Limited.
CHAPTER -04- DATA ANALYSIS AND INTERPRETATION
This chapter deals with data analysis and interpretation of VRL Logistics Limited.
CHAPTER -05 – FINDINGS, SUGGESTIONS AND CONCLUSION
This chapter includes findings, suggestions, conclusion of the study.

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CHAPTER-02
CONCEPTUAL FRAMEWORK OF FINANCIAL ANALYSIS

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INTRODUCTION TO FINANCIAL ANALYSIS
Financial analysis is the process of examining company's performance in the context of

its industry and economic environment in order to arrive at a decision or recommendation. Often,
the decisions and recommendations addressed by financial analysts pertain to providing capital
to companies-specifically, whether to invest in the company's debt or equity securities and at
what price.
Financial statements are prepared primarily for decision making. Financial statement
analysis refers to the process of determining financial strength and weaknesses of the firm by
properly establishing strategic relationship between the items off the balance sheet and profit and
loss account. There are various methods and techniques used in analyzing financial statement;
such has comparative statements, trend analysis, and common size statement, schedule of
changes in working capital, funds flow and cash flow analysis. Cost volume profit analysis and
ratio analysis and other operative data. The analysis of financial statement is used for decision
making by various practice.
MEANING AND CONCEPT OF FINANCIAL ANALYSIS
The term "financial analysis" also known as analysis and interpretation of financial
statements, refers to the process of determining financial strength and weaknesses of the firm by
establishing strategic relationship between the items of the balance sheet, profit and loss account
and opposite data.
According to Metcalf and Titard, "It is a process of evaluating the relationship between
component parts of financial statements to obtain a better understanding of a firm's position and
performance". In the words of Myers," Financial statement analysis is largely a study of
relationship among the various financial factors in a business as disclosed by a single set of
statement and study of the trend of these factors as shown in a series of statements".
The purpose of financial analysis is to diagnose information contained in financial

statements of the firm. Just like a doctor examines his patient by recording his body temperature,
blood pressure etc. before making his conclusion regarding the illness and before giving his
treatment, financial analyst analyses the financial statements with various tools of analysis before

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commenting upon the financial health or weaknesses of an enterprise. The analysis and
interpretation of financial statements is essential to bring out the mystery behind the figures in
financial statements, Financial statement analysis is an attempt to determine the significance and
meaning of the financial statements data so that forecast maybe made of the futures earnings,
ability to pay interest and debt maturities (both current and long term), profitability of and
soundness of dividend policy.
The term financial analysis includes both analysis and interpretation. A distinction should
be made between the two terms. While the terms analyses is used to mean the simplification of
financial data by methodical classification of the data given in the financial statements.
'Interpretation' means, explaining the meaning and significance of the data so that it can be
simplified. However, both analysis and interpretation are inter linked and complementary to each
other. Analysis is useless without interpretation and interpretation without analysis is difficult or
even impossible. Most of the authors have used the term analysis only to cover the meaning of
both. We have also used the terms financial statement analysis or simply financial analysis to
cover the meaning of both analysis and interpretation.
OBJECTIVE AND IMPORTANCE OF FINANCIAL STATEMENT ANALYSIS
The primary object of financial analysis is to understand and diagnose the information
contained in financial statements with a view to judge the profitability, financial soundness of the
firm and to make forecast about future prospects of the firm. The purpose of analysis depends
upon the person interested in such analysis and his objective.
However the following objectives of financial statement analyses may be stated to bring out
significance of such analysis.
1) To assess the earning capacity or profitability of the firm.
2) To assess the operational efficiency and managerial effectiveness.
3) To assess the short term as well as long term solvency of the firm.
4) To identify the reasons for change in profitability and financial position of the firm.
5) To make inter firm comparisons.

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6) To forecast the future prospects for the firm.
7) To assess the progress of the firm over a period of time.
8) To help in decision making and control.
9) To guide on determining the dividend action.
10) To prove important information for granting credit.
TYPES OF FINANCIAL ANALYSIS
1) On the Basis of Material Used
According to material used, financial analysis can be of two types:
(a) External analysis,
(b) Internal analysis
(a) External analysis
This analysis is done by outsiders who do not have access to the detailed internal accounting
records of the business firm. These outsiders include investors, potential investors, creditors,
potential creditors, government agencies, credit agencies, and the general public.
For financial analysis, these external parties to the firm depend almost entirely on the published
financial statements. External analysis, thus serves only a limited purpose. However, the recent
changes in the government regulations requiring business firms to make available more detailed
information to the public through audited published accounts have considerably improved the
position of the external analysis.
(b) Internal analysis

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The analysis conducted by persons who have access to the internal accounting records of a
business firm is known as internal analysis. Such an analysis can, therefore, be performed by
executives and employees of the organization as well as government agencies which have
statutory powers vested in them. Financial analysis for managerial purposes is the internal type
of analysis that can be affected depending upon the purpose to be achieved.
2) On the Basis of Entities Involved
On the basis of entities involved in the analysis, financial analysis can also be of two
a) Cross sectional or inter-firm analysis, and
b) Time series or intra-firm analysis.
a) Cross Sectional or Inter-firm Analysis
Cross sectional analysis involves comparison of financial data of a firm with other firms
(competitors) or industry averages for the same time period.
b) Time Series or Intra-firm Analysis
Time series analysis involves the study of performance of the same firm over a period of time.
3) On the Basis of Time Horizon or Objective of Analysis
On the basis of time horizon, financial analysis can be classified under two categories:
(a) Short-term analysis, and
(b) Long-term analysis.
a) Short-term Analysis
Short-term analysis measures the liquidity position of a firm, i.e. the short-term paying capacity
of a firm or the firm's ability to meet its current obligations.

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b) Long-term Analysis Long-term analysis involves the study of firm's ability to meet the
interest costs and repayment schedules of its long-term obligations. The solvency, stability and
profitability are measured under this type of analysis.
PROCEDURE OF FINANCIAL ANALYSIS
Broadly speaking there are three steps involved in the analysis of financial statements.
There are
1) Selection
2) Classification
3) Interpretation
The first step involves selection of information relevant to the purpose of analysis of financial
statements. The second step involved is the methodical classification off the data and the third
step includes drawing of inferences and conclusions.
The following procedure is adopted for analysis and interpretation of financial statements.
1) The analyst should acquire himself with principal and postulates of accounting. He should
know the plan and policies of the management so that he may be able to find out whether those
plants are properly executed or not.
2) The extent of analysis should be determined so that the here of work may be decided. If the
aim is to find out the earning capacity of the Enterprise an analysis of income statement will be
undertaken. On the other hand, if the financial position is to be studied at then balance sheet
analysis will be Necessary.
3) The financial data given in the statements should be reorganized and Re-arranged. It will
involve the grouping of similar data under same heads, breaking down of individual components
of statements according to nature. The data is reduced standard form.
4) A relationship is established among financial statements with the help of tools and techniques
of analysis such as ratios, trends, common size, fund flow etc.

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5) The information is interpreted in a simple and understandable way.
6) The conclusion drawn from interpretation is presented to the management in the form of
reports.
METHODS OR DEVICES OF FINANCIAL ANALYSIS
A number of methods or devices are used to study the relationship between different statements.
The following methods of analysis are generally used
1) Comparative statement
2) Trend analysis
3) Common size statement
4) Funds flow analysis
5) Cash flow analysis
6) Ratio analysis
7) Cost volume profit analysis.
Focus on financial statement analysis
Financial statement analysis involves evaluating different aspects of a business enterprise, which
are of great importance to different uses such as management, investors, creditors, bankers,
analyst, and investment advisor etc. Generally the following analyses are made while making
financial statement analysis.
APPLICATION OF FINANCIAL ANALYSIS
Following are the application of financial analysis:
1) Assessing corporate excellence
2) Judging credit worthiness

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3) Forecasting bankruptcy
4) Valuing equity shares
5) Predicting bounds ratings
6) Estimating market risk.
IMPORTANCE OF FINANCIAL ANALYSIS
 Judging the operational efficiency of the business
It is very important that the company must know the operational efficiency of its management. Analyst
analyzes the financial statements, match the amount of manufacturing. Selling, distribution and financial
expenses of the current year with the corresponding expenses of the previous year and assess the
management efficiency of the business.
 Helps in evaluating Return on Investment
Financial analysis can help you evaluate your return on investment and also give you an edge
over the competition in a down market.
 Indicating the trend of achievements
Financial statements of the previous years can be compared and the trend regarding various
expenses, purchases, sales, gross profit and net profit can be ascertained, cost of goods sold,
values of assets and liabilities can be compared and the future prospects of the business can be
indicated.
 Assessing the growth potential of the business
The trend and dynamic analysis of the business provides us sufficient information indicating the
growth potential of the business. Effective measures can be applied as remedial (corrective)
measures, if the trend predicts gloomy picture.
 Measuring the profitability

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Analysis can improve profitability, allow you to set benchmarks, assist your organization in
optimizing productivity, and allow you to get a thorough look at your finances situation now and
into the future.
 Intra firm and inter firm comparison of the performance
Analysis of financial statements can be made with the previous year's performance of the same
firm and also with the performance of other firms. Intra-firm analysis provides an opportunity of
self-appraisal, whereas inter-firm analysis presents the operational efficiency. of the firm as
compared to other firms. Weakness can be detected by making comparison and corrective
measure can be applied.
 Forecasting, budgeting and deciding future line of action
Analysis of financial statements predicts the growth potential of the business. Comparison of
actual performance with the desired performance shows our shortcomings. The analysis provides
sufficient information regarding the profitability, performance and financial soundness of the
business on the basis of these information's, analyst can make effective forecasting, budgeting
and planning.
 Simplified, systematic and intelligible presentation of facts
Analysis of financial statements is an effective tool for simplified, systematizing and

summarizing the monotonous figures. An average person can draw conclusion from these ratios.
The facts can be made more attractive by graphs and diagrams, which can be easily understood.
 Pinpoints strengths and weakness
Financial analysis can be an important tool in getting the most bangs out of your buck. It can
really help in pinpointing the strengths and weaknesses and adjusting the planning strategy
accordingly.

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LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS
Financial analysis is a powerful mechanism of determining financial strengths and

weaknesses of firm. But, the analysis is based on the information available in the financial
statements. Thus, the financial analysis suffers from various limitations financial statements. The
financial analysis has also been careful about the impact of price level changes, windows
dressing of financial statements, changes in the accounting policies of a firm, accounting
concepts and conventions, and personal judgments, etc. The readers are advised to know the
limitations of financial statement. Few important limitations of financial analysis are:
1) It is only a study of interim in reports,
2) Financial analysis is based upon only monetary information and non-monetary factors. are in
ignore.
3) It does not consider changes in price levels.
4) Has the financial statements are prepared on the basis of going Concern; it does not give Exact
position. Thus accounting concepts and convention cause a serious limitation financial analysis.
5) Changes in accounting procedure by a firm may often make financial analysis misleading.
6) Analysis is only a means and not an end in itself. The analyst has to make interpretation and
draw on his own conclusions. Different people may interpret the same analysis in different ways.
IN THIS PROJECT RATIO ANALYSIS IS USED TO STUDY THE

FINANCIAL ANALYSIS OF VRL LOGISTICS PRIVATE LIMITED .
RATIO ANALYSIS
INTRODUCTION
Ratio analysis is a widely used tool of financial analysis. It can be used to compare the
risk and return relationships of firms of different sizes. It is defined as the systematic use of ratio
interprets financial statement so that the strength and weaknesses of a firm as well as its

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historical performance and current financial condition can be determined. The term ratio: refers
to the numerical for quantitative relationship between two variables.
MEANING OF RATIO
Ratio is a simple arithmetical expression of the relationship of one number to another. It may be
defined as the indicate quotient of two mathematical expressions. According to accountant's
handbook by Wixom keel and Bedford, a ratio" is an expression of the quantitative relationship
between two numbers". In simple language ratio is one number expressed in term of another and
can be worked out by dividing 1 number into other.
NATURE OF RATIO ANALYSIS
Ratio analysis is a technique of analysis and interpretation of financial statements. There are a
number of ratios which can be calculated from the information given in the financial statements
but the analyst has to select the appropriate data and calculate only off you are appropriate ratios
from the same keeping in mind the objective of analysis. The following are the four steps
involved in the ratio analysis.
• Selection of relevant data from the financial statements depending upon the objective of the
analysis.
• Calculation of appropriate ratios from the above data.
• Comparison of the calculated ratio with the ratios of the same firm the past, or the ratios
developed from Project financial statements or the ratios of some other terms or the comparison
with the ratios of the industry to which the firm belongs.
• Interpretation of the ratios.

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LIMITATIONS OF RATIO ANALYSIS
1) Limited use of single ratio
A single ratio usually e does not convey much of our sense. To make a better interpretation a
number of ratios have to be calculated which is likely to confuse the analyst then help him in
making any meaningful conclusion.
2) Lack of adequate standards
There are no well accepted standard or rules of thumb for all ratios which can be accepted has
a norms. It renders interpretation of the ratios difficult.
3) Inherent limitations of accounting:
Like financial statements ratio also suffers from the inherent weakness of accounting records
such as their historical nature. Ratios of the past are not necessarily true indicators of the future.
4) Change of accounting procedure
Change in accounting procedure by a firm Afton makes ratio analysis misleading. Example a
change in the valuation of methods of inventories, from FIFO to LIFO increases the cost of sales
and reduces considerably the value of closing stock which makes stock turnover ratio to be
uncreative and unfavorable gross profit ratio.
5) Window dressing
Financial statement can be easily be window dressed to presents a better picture of its financial
and profitability position to outsiders. Hence one has to be very careful in making a decision
from ratios calculated from such financial statements.
6) Personal bias
Ratios are only means of financial analysis and not an end itself. Ratios have to be interpreted
and different people may interpret the same ratio in different ways.

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7) Incomparable
Not only Industries differ in their nature but also the firms of the similar business widely
different in their size and accounting procedure etc.
8) Absolute figures distortive
Ratios devoid of absolute figures may prove distortive as ratio analysis is primarily a quantitative
analysis and not a qualitative analysis.
9) Price level changes
While making ratio analysis, no consideration is made to the changes in price levels and this
makes the interpretation of ratio in valid.
10) Ratios no substitutes
Ratio analysis is merely a tool of financial statements. Hence, ratio become useless it separated
from which they are computed.
TYPES OF RATIOS
1) Liquidity ratios
 Current ratio
 Quick ratio
2) Long term solvency ratios
 Debt equity ratio
 Interest coverage ratio
3) Profitability ratios
 Gross profit ratio

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 Net profit ratio
 Operating ratio
 Return on assets ratio
 Return on shareholders' equity ratio
 Earnings per share
 Book value per share
 Working capital turnover ratio
4) Activity ratios
 .Fixed asset turnover ratio
 Proprietary ratio
 Debtors turnover ratio
 Average debt collection period
 Working capital ratio
LIQUIDITY RATIOS
Liquidity ratios are an important class of financial metrics used to determine a debtor's ability
to pay off current debt obligations without raising external capital.
1) Current ratio
2) Quick ratio
1) CURRENT RATIO
The current ratio is a liquidity ratio that measures a company’s ability to pay short-term
obligations or those due within one year. It is calculated as follows,
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Current ratio = Current assets
Current liabilities
Ideal ratio: 2:1
High indicates under trading and over capitalization.
Low ratio indicates over trading and over capitalization.
2) QUICK RATIO
The quick ratio is an indicator of a company’s short-term liquidity position and measures a
company’s ability to meet its short-term obligations with its most liquid assets.
Quick ratio = Quick assets
Current liabilities
Ideal ratio: 1:1
Usually, a high acid test ratio is an indication that the firm is liquid and as ability to meet its
current or liquid liabilities in time and on the other hand a low quick ratio represent that the
firm's liquidity position is not good.
LONG TERM SOLVENCY RATIO
The solvency ratio is a key metric used to measure an enterprise's ability to meet its debt
obligations and is used often by prospective business lenders. The solvency ratio indicates
whether a company's cash flow is sufficient to meet its short-and long-term liabilities.
3) DEBT EQUITY RATIO
The debt-equity ratio is a measure of the relative contribution of the creditors and shareholders or
owners in the capital employed in business.

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Debt equity ratio = Total liabilities
Shareholders' equity
Ideal ratio: 1:2
It means for every two there is one Debt. If the debt. Is less than 2 times the equity, it means the
creditors are relatively less and the financial structure is a sound. If the debt is more than two
times the equity, the states of long-term creditors is more and indicate weak financial structure.
PROFITABILITY RATIOS
Profitability ratios are a class of financial metrics that are used to assess a business's ability to
generate earnings relative to its revenue, operating costs, balance sheet assets, and shareholders'
equity.
4) GROSS PROFIT RATIO
It Expresses the relationship of gross profit to net sales and is expressed in terms of
percentage. This ratio is the tool that indicates the degree to which selling price of goods per unit
may decline without resulting in losses.
Gross profit ratio = Gross profit x 100
Net sales
5) NET PROFIT RATIO
It expresses the relationship between net profits after taxes to sales. Measure of overall
profitability useful to proprietors, as it gives an ideal of the efficiency as well as profitability of
the business to a limited extent.

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Net profit ratio = Net profit ×100
Sales
6) OPERATING RATIO
This ratio established a relationship between cost of goods sold plus other operating expenses
and net sales. This ratio is calculated mainly to ascertain the operational efficiency of the
management in their business operations.
Operating ratio = Cost of goods sold + operating expenses
Net sales
7) RETURN ON ASSETS RATIO
Return on assets is a financial ratio that shows the percentage of profit a company earns in
relation to its overall resources.
Return on assets ratio = Net profit × 100
Total assets
8) RETURN ON SHAREHOLDERS' EQUITY RATIO
The return on shareholders' equity ratio shows how much money is returned to the owners as a
percentage of the money they have invested or retained in the company.
Return on shareholders' equity ratio = Net profit ×100

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9) EARNINGS PER SHARE RATIO
Earnings per share ratio measures how many dollars of net income have been earned by each
share of common stock during a certain time period.
Earnings per share ratio = Net profit × 100
Number of equity shares
10) BOOK VALUE PER SHARE
Book value per share is a ratio compares the net assets value of a company, minus preferred
equity to the total number of common shares available on the market.
Book value per share = Shareholders' equity
ACTIVITY RATIOS
An activity ratio is a type of financial metric that indicates how efficiently a company is
leveraging the assets on its balance sheet, to generate revenues and cash.
11) FIXED ASSET TURNOVER RATIO

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Fixed asset turnover is the ratio of sales to the value of fixed assets. It indicates how well the
business is using its fixed assets to generate sales.
Fixed asset turnover ratio = Net sales
Fixed assets
12) WORKING CAPITAL TURNOVER RATIO
The working capital turnover ratio measures the efficiency with which the working capital is
being used by a firm.
Working capital turnover ratio = Net sales
Working capital
13) PROPRIETARY RATIO
This ratio relates the shareholders fund to total assets. Proprietary ratio indicates the long term
for future solvency position of the business.
Proprietary ratio = Shareholders' funds
Total assets
14) DEBTORS ASSET TURNOVER RATIO
This ratio explains the relationship of total sales of a firm to its book debt indicating the rate at
which cash is generated by turnover of receivables or debtors.

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Debtors turnover ratio =Total sales
Debtors
15) DEBTORS COLLECTION PERIOD:
Debtors collection period is the time required to collect the outstanding amount from the
customers.
Debtors collection period = Number of days in a year
Debtor's turnover ratio

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CHAPTER-03
PROFILE OF VRL LOGISTICS LIMITED

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LOGO OF VRL LOGISTICS LIMITED
DR. VIJAY SANKESHWAR CHAIRMAN OF VRL LOGISTICS LIMITED

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INDUSTRY PROFILE:
Logistics is the management of the flow of goods between the point of origin and the point of
destination in order to meet the requirements of customer, or corporations. Logistics involves the
integration of information, transportation, inventory, warehousing, material handling and
packaging and often security. Logistics is a channel of the supply chain which adds the value of
time and place utility.
Logistic is one of the main functions within a company. The main target of logistics can be
divided into performance related and cost related. They are high due date reliability short
delivery times low inventory level and high capacity utilization but when decision need to be
made there is always the trade-off between those targets.
Given the service performed by logistics, one can distinguish the main fields of it has it follows:
 Procurement logistics
 Production logistics
 Distribution logistics
 After sales logistics
 Disposal logistics
Transportation like all Industries is largely influenced by Information and Communication

Technology with the focus being on knowledge of customers' needs and value added services.
India is one of the countries of the world having the largest road network.
Today the India customers standard and the level of expectation have a gone up. Dramatically
they have become world class customer service which is going to give the competitive edge to
any two industries in the future.
With the changing scenario factors such as globalization of the market international economic
and removal of barriers to business and trade and increased competition have enhanced the need
of transportation. It is one of the most important infrastructure requirements which is essential
for the expansion of opportunities and plays an important role in making or breaking competitive
positioning.

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BRIEF HISTORY OF VRL LOGISTICS LIMITED
Vijayanand Roadlines Limited a company registered under the provision of Companies

Act, 1956 has with its symbol of service. The VRL has built and maintained goodwill in the
minds of public, at large in the country in general and in Karnataka in particular.
The Chairman and Managing Director Mr. Vijay Sankeshwara started as an individual
transport company in January 1976 without any background or experience. Initially for the first
two years it suffered heavy loss. Then by the end of 1977 it started as local transport between
Hubli and Gadag. Due to effective service, business picks up and he purchased one more lorry in
1978. During this work he observed activities of other well-known transport company and started
first parcel service from Bangalore to Hubli and Belgaum with only two Lorries. Gradually the
business picks up. Later the above sole proprietorship was converted into private limited
company. The company came into existence in the year March 31st 1983 VRL company initially
in the transportation of goods and service subsequently it concerned the business of courier
service in the year 1996. It acquired passenger buses initially Vijayanand Travels operating in
the state of Karnataka and Maharashtra.
Over the years VRL Company has pioneered in providing a safe and reliable delivery network in
the field of parcel service. It has spread its operations to courier service, priority Cargo and
transportation by air to meet the growing demands of its burgeoning customer base.
The largest goods transportation network in India, VRL parcel services is indispensable for a
large number of corporate houses. This network spans the length and breadth of the country and
it supported by strategically located transshipment hubs. We operate through a network of 931
branches and franchisees to cater our valuable customers and we are now in the process of
expanding our service to reach even the remotest locations of the country.

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CURRENT POSITION:
The company has the largest network of branches currently has growth having achieved a
turnover exceeding 1762.92cr for the year ending March 2010-21. among all transport
companies in South India with over 931 branches in Karnataka ,Tamil Nadu, Andhra Pradesh
and Kerala. The company is the largest parcel courier that has a network spanning across the
country. From the humble beginning VRL has grown into a nationally renowned logistics and
transport company which is currently the largest fleet owner in India with the fleet of 4866
vehicles (including 291 Passenger Transport Vehicles and 4575 Goods Transport Vehicles) as of
2020-2021.
The company is one of the most efficient transport operators in India with its operating margins
higher than other players in the organized transport industry. The company is known for its
reliable, quality service, during its operation for the last two decades VRL Logistic Limited is an
established brand name and this enables the company to charge premium rates than competitors
to its customer.

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PROFILE OF VRL LOGISTICS LIMITED
Established : 1976
Name of the Organization : VRL Logistics Limited
Owner : Vijay Sankeshwar
Location : NH4 Bangalore road near varur Hubli
Company : Limited company
Head office : VRL logistics Limited Road at Varur Hubli. 581207.
Employees : Above 5000
Area covered by VRL : 43 acres
Brand name : VRL

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VISION
To become the premier company that cuts across various segments and emerges as the
torchbearer of each segment that it ventures into.
MISSION
To provide the highest quality service to our customers by continuously increasing cost
efficiency and maintaining delivery deadlines. To encourage our workforce to continuously
strive for quality and excellence in everything they do. To promote team work and create work
environment that encourages talent and brings out the best in our employees.
QUALITY POLICY
We are committed to provide quality logistics services consistently at reasonable price and to
continually improve the same to achieve customers delight on a sustainable basis.
OBJECTIVES OF THE COMPANY
 Quick and safe service

 Customer satisfaction
 Competitive price
 Attain market leadership
 To carry on the business of the public.
 To take over all assets and liabilities of VRL which is an existing proprietorship concern
 Double drive for safe journey.
 Onward and return tickets facility.
 Wide network of booking office.
 Wide network of branches.
COMPANY VALUES
"Punctuality, Integrity, Honesty, Loyalty and Credibility.

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BOARD OF DIRECTORS OF VRL LOGISTICS LIMITED
S.No NAME DESIGNATION
1 Dr. Vijay Sankeshwar Chairman & Managing Director
2 Mr. Ananda Sankeshwar Managing Director
3 Mr. K.N Umesh Executive Director & whole time director
4 Mr. L R Bhat Executive director & whole time director
5 Dr. Prabhakar kore Independent Director
6 Mr. Gurudas Narekull Independent Director
7 Mrs. Medha Pawar Independent Director
8 Mrs. Smriti Bellad Independent Director
9 Dr. Ananda Pandurangi Independent Director
10 Mr. Shankarasa Ladwa Independent Director
11 Dr. Raghottam Akamanchi Non executive director
12 Dr. Ashok Shettar Non executive director

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ORGANIZATION STRUCTURE

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COMPANY PHILOSOPHY
They immensely follow "Time is gold"
COMPANY ACHIEVEMENTS
 The company started with one lorry and today it has a fleet of thousands of Lorries.
 The turnover of the company is increasing year by year.
 The company is recommended by the Indian Bank Association Mumbai.
 Vijay Karnataka newspaper and another subsidiary of VRL is being awarded with
“Audit bureaus of circulation” Certification for highest circulation.
 Ananda printers and publishers fixed and recurring deposits scheme.
 Vijay Ananda Road Lines fixed deposit scheme.
COMPANY AWARDS
 Udyogratana
 Sarigeratana
 Inspiration leader of news India
 Karnataka Rajyotsava Award
 PADMASHRI by the central government
COMPANY PRODUCT AND SERVICE:
CARGO AND COURIER
A subsidiary of VRL Group, VRL General Cargo started its business service as transportation between
Hubballi and Gadag, and later has spread across Bangalore and Belagavi. It has extended into courier
services and express cargo, which are now operative in 23 states, handling over 216 million cargos/year,
being one of the large networks in the country. Its courier services are operative for parcels ranging from
small to large size. Karavandajam, a food diet, marketed by VRL Group via its courier services.

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TRAVEL
VRL's public tour business is operated by its division Vijayanand Travels. With having more than80
branches, and operated by 1000+ agents, it is the largest in tour business services in Karnataka and
Maharashtra. It owns 1550 buses (incl. 742 Volvo buses of 9400 XL and 9400PXmulti-axle models)
covering six states, moving across 350 routes in the country.
AVIATION LOGISTICS
VRL Logistics Ltd. in 2008, started working in Indian Air Chartering Industry, operating under the Indian
Air Operator permit (for passenger charter). In the first phase of its business, it owned a Beech craft
Premier I, an aircraft, manufactured by Hawker Beech craft Inc, USA, while in 2013 it purchased another.
It offers Jet aircraft charters to sectors like corporate, leisure and tourism, special missions, event
management, advertisement agencies and for flights (VIP category).
MEDIA
VRL Group's flagship entity, Vijayavani was started on 1 April 2011, which is now the largest
circulated newspaper in Karnataka. VRL Group's subsidiary company VRL Media Ltd., prints
Vijayavani and is published in 9 cities of the state. (181Vijayavani 'slead editor of its editorial
division is Chenne gowder and Subhash hoogar. Karnataka's second largest circulated news
paper Vijaya Karnataka, was started by Vijay Sankeshwar (of VRL Group) in October
2000, and was sold to the Times group on June 16, 2006.In April 2017, VRL Media Ltd. started
Digvijaya News 24x7, a Kannada television news channel.
WIND POWER GENERATION BUSINESS
A wind farm, when installed on agricultural land, has one of the lowest environmental impacts of
all energy sources. Wind power occupies less land area per kilowatt-hour of electricity generated
than any other energy conversion system, apart from rooftop solar energy, and is compatible with
grazing and crops. It generates the energy used in its construction in just 3 months of operation,
yet its operational lifetime is 20-25 years.

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AIR CHARTER BUSINESS
We entered the air charter business in 2008 to provide services to individuals and corporate
clients. We purchased a new Premier 1A aircraft from Hawker Beech craft Inc., USA. The
Premier 1A aircraft is a twin engine sophisticated aircraft with space for 2 pilots and 6
passengers. This aircraft has a Non Scheduled Operator Permit issued by the Director General of
Civil Aviation (DGCA), Government of India..
The Company has also acquired a second hand Premier 1 aircraft from Force Motors, Pune in the
year 2013. The acquisition of this aircraft is expected to strengthen the capacity to garner more
chartering business owing to better aircraft availability for routine long term charters.
SWOT ANALYSIS
STRENGTH:
 VRL well established brand in the country when it comes to surface transportation and
the industry leader in the parcel transportation space. It is also leading name in the
private bus operations industry and one of the biggest private sector operators in this
space.
 The two major advantages that VRL Company enjoys over its competition are its well
established wide network of branches and franchisees and its owned fleet of commercial
vehicles with dedicated in house vehicle body designing and vehicle maintenance
facilities to cater to the parcel transportation.
 The company presently operates across 23 states and 4 union territories in India and its
reach is unmatched for the offering of LTL goods transportation services.
 VRL Company is also one of the largest fleet owner of commercial vehicles in the
country and the same enables the company to set unparalleled standards in the movement
of LIC cargo in India in terms of service levels and safety of consignments
 The police at VRL is to own its vehicles for offering LTL service as also own significant
infrastructure facilities comprising of warehouse and maintenance facilities.

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 VRL Company also benefits from in house research and development with a capacity to
try its findings and experiment with newer products and technologies on its owned
vehicles.
 VRL Company also has a very well diversified customer base. During financial year
2020-2021 the company's largest customer and the top 10 customer's put together
contributed only 1% and 5% of the revenues of the goods transport business respectively.
WEAKNESSES:
 The surface transport industry suffers from an acute driver shortage issues and the said
problem also affects the company.
 Lack of owned infrastructure at key centers is another present day weaknesses in the
management's opinion.
OPPORTUNITY:
 The implementation of GST has been on the back burner for several years now and the
same is expected to be boon for the entire logistics industry.
 GST would also provide a big boost for the movement of LTL cargo and VRL, being the
industry leader in the LTL space is expected to benefit from GST implementation.
 The VRL Company also has successfully implemented processes within the operations to
ensure full compliance with the GST and e way bill requirements.
 The VRL company also has successfully obtained the requisite approvals from their
respective RTO's and is now well poised to reap the benefits under the recent revision in
safe axle weights for goods transport vehicles by transport division of ministry of road
transport and high ways which permits the carrying of higher weight on goods transport
vehicles.
THREATS:
 Fluctuations in fuel prices resulting from diesel de regulations lorry hire changes payable
to third party vehicles and input costs especially those related to tolls as also others like
rent salary etc.

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 Government regulations.
 New technology: company need to stay in touch with upgrading technology world.

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CHAPTER-04
DATA ANALYSIS AND INTERPRETATION

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To examine the liquidity position of VRL Logistics limited. By calculating current assets
and current liabilities are as shown in the following ratios as below.
(1) Current ratio = Current asset
Current liabilities
TABLE 4.1
CURRENT RATIO
year Current Assets(Rs. in Current Liabilities Rs. Current Ratio

Crores) in Crores)
2017-18 171.42 159.87 1.07
2018-19 171.62 123.88 1.38
2019-20 173.23 252.49 0.67
2020-21 176.21 258.57 0.68
Source; Annual Report VRL Limited
4.1 Current Ratio

1.6
1.4 1.38
1.2 1.07
1
Current Ratio
0.8 0.67000000000 0.68000000000
0001 0001
0.6
0.4
0.2
0
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 40
INTERPRETATION:
The table 4.1 shows the current ratio of the company. The standard for current ratio is 2:1. It can
be observed that the current ratio of VRL Logistics Ltd has registered a decline from 2019-20.
The current ratio for the year 2020-21 is 0.68.
(2) Quick ratio = Quick assets
Current liabilities
TABLE 4.2
QUICK RATIO
Year Current Assets( Rs. in Current Liabilities Quick Ratio

Crores) (Rs. in Corers)
2017-18 147.29 159.87 0.92
2018-19 141.87 123.88 1.14
2019-20 143.96 252.49 0.57
2020-21 136.7 258.57 0.52
Source: Annual Report of VRL Ltd
4.2 Quick Ratio

1.14
1.2
0.92
1
0.8 0.57 Quick Ratio
0.52
0.6
0.4
0.2
0
2017-18 2018-19 2019-20 2020-21
INTERPRETATION:

DHARWAD Page 41
The table 4.2 reveals the quick ratio of the company over a period of 4 years. The standard for
quick ratio is 1:1 but the same for the company was less than 1 in the years 2017-18(0.92), 2019-
20(0.57). This ratio was above the standard in the year 2018-19 only i.e., 1.14
To analyze the of solvency position of VRL Logistics Limited, the following ratios have
been computed.
(3) Debt equity ratio = Total liabilities
TABLE 4.3
DEBT-EQUITY RATIO
Year Total Liabilities (Rs. Shareholder’s Equity Debt-Equity Ratio

In Crores) (Rs. In Crores)
2017-18 862.26 593.22 1.45
2018-19 977.82 645.94 1.51
2019-20 1225.21 616.87 1.98
2020-21 1198.58 597.14 2.06
4.3 Debt-Equity atio

2.5
1.98 2.06
2
1.5 1.45 1.51 Debt -Equity Ratio
1
0.5
0
2017-18 2018-19 2019-20 2020-21
INTERPRETATION:

DHARWAD Page 42
Table 4.3 indicates the debt-equity ratio of the company. The standard proportion for the debt
and equity of a firm should be 2:1. The above table indicates that the debt-equity proportion of
the company was less than the standard over the 4 years except for the year 2020-21(2.06).
To determine the profitability and operating efficiency of VRL Logistics Limited. The
following analyses are done.
(4) Gross profit ratio = Gross profit x 100
Net sales
TABLE 4.4
GROSS PROFIT RATIO
Year Gross Profit(Rs. In Net Sales(Rs. In Gross Profit

Crores) crores) Ratio
2017-18 237.02 1922.32 12.32
2018-19 241.06 2109.54 11.42
2019-20 271.85 2118.54 12.83
2020-21 223.53 1762.92 12.67
4.4 Gross Profit Ratio

13 12.83
12.67
12.5 12.32
12 Gross Profit Ratio
11.5 11.42
11
10.5
2017-18 2018-19 2019-20 2020-21
INTERPRETATION:

DHARWAD Page 43
The table 4.4 indicates that the gross profit ratio of the company during the study period. The
company seems to generally follow an increasing trend of gross profit. However, in the year
2018-19 the gross profit ratio of the company had declined to 11.42.
(5) Net profit ratio = Net profit ×100
Sales
TABLE 4.5
NET PROFIT RATIO
Year Net Profit(Rs. In Net Sales( Rs. In crores) Net Profit

crores) Ratio
2017-18 925.64 1922.32 48.15
2018-19 919.16 2109.54 43.57
2019-20 901.15 2118.54 42.53
2020-21 450.68 1762.92 25.56
4.5 Net Profit Ratio

60 48.15
43.57 42.53
50
40 Net Profit Ratio
25.56
30
20
10
0
2017-18 2018-19 2019-20 2020-21
INTERPRETATION:

DHARWAD Page 44
The table 4.5 reveals the net profit ratio of the company. It can be observed that the net profit
ratio of the company is following a downside movement. The net profit ratio of the company has
decreased from 48.15 in 2017-18 to 25.56 in 2020-21.
To determine the operating efficiency of VRL Logistics Limited, the following ratios have been
calculated:
(6) Operating ratio = Cost of goods sold + operating expenses
Net sales
TABLE 4.6
OPERATING RATIO
Year Cost of goods sold and Sales (Rs. In Operating ratio

operating expenses (Rs. In Cr) Cr)
2017-18 3060.15 1922.32 159.19
2018-19 3110.02 2109.54 147.42
2019-20 3398.14 2118.54 160.40
2020-21 3688.14 1762.92 209.20
4.6 Operating ratio

250
209.2
200
159.19 147.42 160.4
150 Operating ratio
100
50
0
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 45
INTERPRETATION:
The table 4.6 indicates that the operating ratio of the company. The company seems to generally
follow an upside movement in case of operating ratio. However, in the year 2018-19, the
operating ratio of the company decreased from 159.19 to 147.42
(7) Return on assets ratio = Net profit × 100
Total assets
TABLE 4.7
RETURN ON ASSETS RATIO
Year Net Profit (Rs. In Crores) Total Assets (Rs. In Return on Assets Ratio
Crores)
2017-18 925.64 862.26 107.35
2018-19 919.16 977.82 94.00
2019-20 901.15 1216.89 74.05
2020-21 450.68 1198.58 37.60
4.7 Return on Assets Ratio

120 107.35
94
100
74.05
80 Return on assets ratio
60
37.6
40
20
0
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 46
INTERPRETATION:
The table 4.7 presents Return on Assets ratio of the company during the study period. This ratio
has been consistently declining. In 2017-18 the ratio was 107.35 and the same declined to 37.6 in
2020-21
(8)Return on shareholders' equity ratio = Net profit ×100
TABLE 4.8
RETURN ON SHAREHOLDER’S EQUITY RATIO
Year Net Profit Shareholder’s Return on Shareholder’s Equity

(Rs. In Equity (Rs. In Ratio
Crores) Crores)
2017-18 925.64 593.22 156.03
2018-19 919.16 645.94 142.29
2019-20 901.15 616.87 146.08
2020-21 4560.68 597.14 75.47
4.8 Return on Shareholders

Equity Ratio
200
156.03 142.29 146.08 return on share-
150 holders equity ratio
100 75.47
50
0
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 47
INTERPRETATION:
The table 4.8 reveals the Return on Shareholders’ Equity ratio. This ratio has been fluctuating
over the period of 4 years. However, in the year 2020-21 the ROE ratio has registered a steep
decline as it is 75.47 which is the least of all the years.
(9) Earnings per share ratio = Net profit × 100
TABLE 4.9
EARNING PER SHARE
Year Net profit (Rs in Crores) No. of equity Earnings per share
shares(Rs 100 each)
2017-18 92.56 9.03 10.25
2018-19 91.92 9.03 10.17
2019-20 90.15 9.03 9.98
2020-21 45.06 8.83 5.10
4.9 Earnings Per Share

12
10 10.25 10.17 9.98
8 Earning per share
6 5.1
4
2
0
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 48
INTERPRETATION:
Table 4.9 shows the Earnings Per Share (EPS) of the shareholders. It can be observed that the
earnings of the shareholders have been exhibiting a decreasing trend over the study period. In the
financial year 2020-21, the EPS has dropped down to Rs 5.1
(10) Book value per share = Shareholders' equity
TABLE 4.10
BOOK VALUE PER SHARE
Year Shareholder’s No of Equity Book value per

Equity(Rs in Crores) Shares(Rs 100 each) share
2017-18 593.22 9.03 65.69
2018-19 645.94 9.03 71.53
2019-20 616.87 9.03 68.31
2020-21 597.14 8.83 67.62
4.10 Book Value Per Share

74 71.53
72
70 68.31
67.62 Book value per share
68 65.69
66
64
62
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 49
INTERPRETATION:
Table 4.10 shows the Book Value Per Share of VRL Ltd. The Book Value Per Share (BPS) of
the company seems to be fluctuating over the study period. The Book Value Per Share registered
the highest value in 2018-19 i.e., Rs 71.53 However, it decreased to Rs 67.62 in 2020-21
(11) Fixed asset turnover ratio = Net sales
Fixed assets
TABLE 4.11
FIXED ASSETS TURNOVER RATIO
Year Net Sales(Rs in Fixed Assets(Rs in Fixed Assets Ratio

Crores) Crores)
2017-18 1922.32 632.60 3.03
2018-19 2109.54 746.70 2.82
2019-20 2118.54 765.12 2.76
2020-21 1762.92 694.95 2.53
4.11 Fixed Assets Turnover Ratio

3.1 3.03
3
2.82
2.9 2.76
2.8 Fixed Assets Turnover
2.7 Ratio
2.6 2.53
2.5
2.4
2.3
2.2
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 50
INTERPRETATION:
Table 4.11 indicates the Fixed Assets Turnover ratio of VRL Ltd. The Fixed Assets turnover
ratio of the company is continuously decreasing over the study period.
(12)Proprietary ratio = Shareholders' funds
Total assets
TABLE 4.12
PROPRIETARY RATIO
Year Shareholder’s Funds(Rs in Total Assets(Rs in Proprietary ratio

Crores) Crores)
2017-18 593.22 862.26 0.68
2018-19 645.94 977.82 0.66
2019-20 616.87 1216.89 0.50
2020-21 597.14 1198.58 0.49
4.12 Proprietary Ratio

0.8 0.68 0.660000000
0.7 000001
0.6 0.5 0.49
0.5 Proprietary ratio
0.4
0.3
0.2
0.1
0
2017-18 2018-19 2019-20 2020-21

DHARWAD Page 51
INTERPRETATION:
Table 4.12 exhibits Proprietary ratio of VRL Ltd. The Proprietary ratio seems to be consistently
decreasing. The lowest value of the ratio is found in 2020-21 i.e., 0.49.
(13) Debtors turnover ratio =Total sales
Debtors
TABLE 4.13
DEBTORS TURNOVER RATIO
Year Sales Debtors Debtors Turnover ratio
2017-18 1922.32 80.75 23.80
2018-19 2109.54 79.53 26.52
2019-20 2118.54 82.34 25.72
2020-21 1762.92 63.94 27.57
4.13 Debtors Turnover Ratio

27.57
28
26.52
27 25.72
26
Debtors turnover ratio
25 23.8
24
23
22
21
2017-18 2018-19 2019-20 2020-21
INTERPRETATION:
Table 4.13 indicates the Debtors Turnover Ratio. The Debtors Turnover ratio seems to be
fluctuating over the period of five years. The above said ratio has assumed the highest value in
the year 2020-21 i.e., 27.57

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Debtors collection period = Number of days in a year
Debtor's turnover ratio
TABLE 4.14
DEBTORS COLLECTION PERIOD
Year No of days in a Debtors turnover ratio debtors collection

year period
2017-18 365 23.80 15.33
2018-19 365 26.52 13.76
2019-20 365 25.72 14.19
2020-21 365 27.57 13.23
4.14 Debtors Collection Period

15.33
15.5
15
14.5 14.19
14 13.76 debtors collection period
13.23
13.5
13
12.5
12
2017-18 2018-19 2019-20 2020-21
INTERPRETATION:
Table 4.14 indicates the Debtors Collection Period. The analysis points out that the debtors
collection period is following a downside movement over the study period. It has reduced from
15.33 days to 13.23 days over the study period.

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Working capital turnover ratio = Net Sales
Working capital
TABLE 4.15
WORKING CAPITAL TURNOVER RATIO
Year Net sales Working capital Working capital turnover ratio
2017-18 1922.34 11.55 166.43
2018-19 2109.54 47.79 44.14
2019-20 2118.54 -79.26 -26.72
2020-21 1762.92 -82.36 -21.40
4.15 Working Capital Turnover Ratio

200
166.43
150
Working capital turnover
100 ratio
44.14
50
0
2017-18 2018-19 2019-20 2020-21
-50 -21.4
-26.72

DHARWAD Page 54
INTERPRETATION:
Table 4.15 indicates the working capital turnover ratio of VRL Ltd. The figures point out that the
company is registering a negative value over consecutive 2 years. However, the value of
Working Capital Turnover ratio was the least in 2019-20 i.e., (26.72).
To analyses the financial position of VRL Logistics Limited. The following analysis is done.
TABLE 4.16
COMPARATIVE BALANCE SHEET AS ON 31/03/2018 AND 31/03/2017
3-31-2018 3-31-2017 increase/decrease %increase/decrease

EQUITIES AND
LIABILITIES
SHARE HOLDERS FUNDS
Equity share capital 90.34 91.24 -0.9 -0.986
Total share capital 90.34 91.24 -0.9 -0.986
Reserved and surplus 502.88 449.99 52.89 11.753
Total reserves and surplus 502.88 449.99 52.89 11.753
Total share holders’ funds 593.22 541.23 51.99 9.605
NON CURRENT
LIABILITIES
Long term borrowings 4.94 59.55 -54.61 -91.704
deferred tax liability [net] 80.79 89.61 -8.82 -9.842
Other long term liabilities 14.51 14.15 0.36 2.544
long term provisions 8.92 5.03 3.89 77.335
Total noncurrent liabilities 108.17 168.34 -60.17 -35.743
CURRENT LIABILITIES
short term borrowings 63.91 63.15 0.76 1.203
Trade payables 6.84 4.43 2.41 54.401
Other current liabilities 77.75 115.02 -37.27 -32.403

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short term provisions 11.38 4.51 6.87 152.328

Total current liabilities 159.87 187.11 -27.24 -14.558
Total capital and liabilities 862.26 896.68 -34.42 -3.838
ASSETS
NON CURRENT ASSETS
Tangible assets 621.7 690.08 -68.38 -9.908
Intangible assets 0.72 1.2 -0.48 -40
capital work in progress 7.64 1.77 5.87 331.638
Other assets 2.54 2.59 -0.05 -1.930
Fixed assets 632.6 695.65 -63.05 -9.063
Noncurrent investment 0.06 0.06 0 0
Deferred tax assets [net] 0 0 0 0
Long term loans and advances 0 0 0 0
Other noncurrent assets 58.18 50.99 7.19 14.100
Total noncurrent assets 690.85 746.7 -55.85 -7.479
CURRENT ASSETS
Current investments 0 0 0 0
Inventories 24.13 18.32 5.81 31.713
Trade receivables 80.75 75.42 5.33 7.067
cash and cash equivalents 19.35 12.25 7.1 57.95918367
short term loans and advances 0 0 0 0
Other current assets 47.18 43.99 3.19 7.251648102
Total current assets 171.42 149.98 21.44 14.29523937
Total assets 862.26 896.68 -34.42 -3.83860463
INTERPRETATION:
From the table 4.16, it can be understood that the overall corporate total assets and total equity
and liabilities was Rs. 862.26cr in the year 2018 and Rs.896.68cr in the year 2017. There is a

DHARWAD Page 56
decrease of Rs. 34.42cr i.e., 0.0383% in the year 2018. Comparative records reveal that reserves
and surplus was Rs.502.88cr in the year 2018 and Rs.449.99cr in the year 2017. There is a rise of
Rs 52.89 crores in the year 2018.
TABLE 4.17

EQUITIES AND
LIABILITIES
SHARE HOLDERS
FUNDS
Equity share capital 90.34 90.34 0 0
Total share capital 90.34 90.34 0 0
Reserved and surplus 555.59 502.88 52.71 10.48162584
Total reserves and surplus 555.59 502.88 52.71 10.48162584
Total share holders’ funds 645.94 593.22 52.72 8.887090793
NON CURRENT
LIABILITIES
Long term borrowings 103.36 4.94 98.42 1992.307692
Other long term liabilities 14.43 14.51 -0.08 -0.551343901
Total noncurrent liabilities 208.88 109.17 99.71 91.33461574
CURRENT LIABILITIES
short term borrowings 27.36 63.91 -36.55 -57.18979815
Trade payables 6.11 6.83 -0.72 -10.54172767
Other current liabilities 80.44 77.75 2.69 3.459807074
short term provisions 9.98 11.38 -1.4 -12.30228471
Total current liabilities 123.88 159.87 -35.99 -22.51204103
Total capital and liabilities 977.82 862.26 115.56 13.40199012

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ASSETS
NON CURRENT ASSETS
Tangible assets 701.32 621.7 79.62 12.80682001
Intangible assets 1.25 0.72 0.53 73.61111111
capital work in progress 41.64 7.64 34 445.026178
Other assets 2.49 2.54 -0.05 -1.968503937
Fixed assets 746.7 632.6 114.1 18.03667404
Long term loans and 0 0
advances 0 0
Total noncurrent assets 806.15 690.85 115.3 16.68958529
CURRENT ASSETS
Inventories 29.8 24.13 5.67 23.49772068
Trade receivables 79.53 80.75 -1.22 -1.510835913
cash and cash equivalents 13.14 19.35 -6.21 -32.09302326
short term loans and 0 0
advances 0 0
Total assets 977.82 862.26 115.56 13.401
INTERPRETATION:
Table 4.17 exhibits the comparative picture of the balance sheet of 2017-18 and 2018-19. The overall
assets and liabilities position of the company has increased from Rs 862.26 crores to Rs 977.82 crores.

DHARWAD Page 58
TABLE 4.18

EQUITIES AND
LIABILITIES
SHARE HOLDERS
FUNDS
Equity share capital 90.34 90.34 0 0
Total share capital 90.34 90.34 0 0
Reserved and surplus 526.53 555.59 -29.06 -5.230
Total reserves and surplus 526.53 555.59 -29.06 -5.230
Total share holders’ funds 616.87 645.94 -29.07 -4.500
NON CURRENT
LIABILITIES
Total noncurrent liabilities 355.45 208.88 146.57 70.169
CURRENT LIABILITIES
short term borrowings 70.66 27.36 43.3 158.260
Trade payables 3.46 6.11 -2.65 -43.371
short term provisions 13.93 9.98 3.95 39.579
Total current liabilities 252.89 123.88 129.01 104.141
Total capital and liabilities 1225.21 977.82 247.39 25.300
ASSETS
NON CURRENT ASSETS

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Tangible assets 987.12 701.32 285.8 40.751

Intangible assets 0.76 1.25 -0.49 -39.2
capital work in progress 4.39 41.64 -37.25 -89.457
Other assets 2.44 2.49 -0.05 -2.008
Fixed assets 997.71 746.7 251.01 33.615
Long term loans and
advances 0 0 0 0
Other noncurrent assets 48.9 59.39 -10.49 -17.662
Total noncurrent assets 1043.66 806.15 237.51 29.462
CURRENT ASSETS
Inventories 29.27 29.8 -0.53 -1.778
Trade receivables 85.63 79.53 6.1 7.670
short term loans and advances 0 0 0 0
Total assets 1225.21 977.82 247.39 25.300
INTERPRETATION:
Table 4.18 indicates the comparative analysis of balance sheet of VRL Ltd for the years 2018-19 and
2019-20. It can be observed that the assets and liabilities both have been increasing.

DHARWAD Page 60
TABLE 4.19
31/03/2021 31-03-2020 increase/decrease %increase/decrease

EQUITIES AND
LIABILITIES
SHARE HOLDERS
FUNDS
Equity share capital 88.34 90.34 -2 -2.213
Total share capital 88.34 90.34 -2 -2.213
Reserved and surplus 508.8 526.53 -17.73 -3.367
Total reserves and surplus 508.8 526.53 -17.73 -3.367
Total share holders’ funds 597.14 616.87 -19.73 -3.198
NON CURRENT
LIABILITIES
long term provisions 20.7 20.79 -0.09 -0.432
Total noncurrent liabilities 342.87 355.45 -12.58 -3.539
CURRENT LIABILITIES
short term borrowings 64.23 70.66 -6.43 -9.099
Trade payables 13.55 3.46 10.09 291.618
short term provisions 12.5 13.93 -1.43 -10.265
Total current liabilities 258.57 252.89 5.68 2.246
Total capital and liabilities 1198.58 1225.21 -26.63 -2.173
ASSETS
NON CURRENT ASSETS

DHARWAD Page 61
Tangible assets 951.33 987.12 -35.79 -3.625

Intangible assets 0.64 0.76 -0.12 -15.789
capital work in progress 6.08 4.39 1.69 38.496
Other assets 2.39 2.44 -0.05 -2.049
Fixed assets 960.43 997.71 -37.28 -3.736
Noncurrent investment 0.05 0.06 -0.01 -16.667
Long term loans and 0
advances 0 0 0
Total noncurrent assets 1022.37 1043.66 -21.29 -2.039
CURRENT ASSETS
Inventories 39.51 29.27 10.24 34.984
Trade receivables 63.94 85.63 -21.69 -25.329
short term loans and 0
advances 0 0 0
Total current assets 176.21 181.54 -5.33 -2.935
Total assets 1198.58 1225.21 -26.63 -2.173
INTERPRETATION: From the table 4.19, it can be understood that the overall company total assets
and total liabilities was Rs. 1225.21cr in the year 2020 and 1198.58cr in the year 2021. There is decrease
in the year 2021(2.173%) compare to previous year 2020.

DHARWAD Page 62
CHAPTER -05
FINDINGS AND SUGGESTIONS

DHARWAD Page 63
FINDINGS
 Current ratio of VRL Ltd is less than the standard set i.e., 2:1. This indicates that the
current liabilities are more than the company’s current assets. However, this isn’t a
healthy indicator for the company’s liquidity.
 The company’s quick ratio is less than the standard ratio of 1:1. Decreasing trend of the
quick ratio indicates that the company is unable to use its near cash or quick assets
effectively to extinguish its current liabilities immediately.
 The debt equity ratio of the company is exhibiting increasing trend. The standard
proportion for the debt and equity ratio is 1.. Generally, the debt-equity ratio is used to
evaluate a company’s financial leverage and the increase in its value means that the
company is raising more funds through debt which usually means that the company is
taking more risks.
 The gross profit ratio of the company is decreasing modestly over the study period. This
indicates that the gross profit earned by the company is getting slender year by year
which points out the need for improvement.
 The net profit of the company is decreasing over the period of four years which is
inappreciable. There is decrease in the company’s net profits as a result of increase in the
operating expenses.
 The operating ratio of the company shows an increasing trend from the year 2017-18 to
2020-21. This indicates that the operating expenses have been increasing. However, the
sales value doesn’t seem to be increasing proportionately.
 The return on asset ratio of the company exhibits decreasing trend over the study period.
It indicates that the utilization of assets isn’t efficient.
 The return on shareholders' equity ratio exhibits fluctuating trend. This indicates that the
company wasn’t able to maximize shareholders’ wealth efficiently.

DHARWAD Page 64
 As the return on shareholders’ equity is dropping, relative effect can be observed in

Earnings Per Share (EPS). As the company couldn’t earn satisfactory returns when
compared to the previous years, the value of Earnings Per Share is also falling.
 The Book Value Per Share has been decreasing as the company is unable to generate
better results in comparison to the previous years. Hence the book value of the shares is
also following a decreasing trend.
 The fixed asset turnover ratio reveals how efficient a company is at generating sales from
its existing fixed assets. A decreasing trend in the fixed assets turnover ratio indicates that
the company is not satisfactorily employing the fixed assets in order to generate sales.
 Debtors turnover ratio is also referred to as efficiency ratio as this indicates the number
of times average debtors have been converted into cash during a year. As this ratio seems
to be increasing, the company can be termed as improving its efficiency in terms of
converting debtors into cash.
 The working capital turnover ratio indicates negative trend over the period of study. This
ratio helps to determine how efficiently the company is using its working capital. The
data analysis shows that the company was not able to generate any sales through its
working capital as there are negative values of Working Capital turnover ratio.

DHARWAD Page 65
SUGGESTIONS
 Management must achieve the targets by utilizing the current assets and reducing the
current liabilities.
 The company may increase its liquidity position through investing in readily marketable
securities there by maintaining sufficient working capital.
 Management should give more importance towards the raise in investments in fixed
assets by way of acquiring from the available excessive cash and bank balance and other
working capital assets.
 Suitable steps should be initiated to keep the operating expenses of the company under
control.
 Return on Assets of the company was in fluctuating trend. So the company should take
appropriate action to effectively utilize the assets of the company.
 Working capital needs to be used effectively and efficiently in order to generate more
sales revenue.
 The company should take appropriate measures to increase the gross profit and net profit
by reducing the variable expenses.

DHARWAD Page 66
CONCLUSION:
“Finance is the life blood of every industry, organization, company and as well as
economic activities”.
“Profit- it is a condition of survival. It is cost of survival. It is the cost of staying in

business.
VRL logistics Limited financial analysis involved day to day working in various
department accounts and finance to procure more information regarding to working
capital management. This study include 4 years financial statements i.e. Balance Sheet
and Profit and Loss account have been taken for calculating Ratio analysis and
comparative balance sheet to check the liquidity position, profitability, and financial
position of VRL Logistics Limited.
The overall financial position of the company is not satisfactory due to shortage of funds
for long term assets and excessive investment in working capital assets and decreasing
profits.

DHARWAD Page 67
BIBLIOGRAPHY
REFERENCE BOOKS:
 M.K. KHAN AND P.K JAIN (2015) - Financial management – McGraw hill publishing
company limited New Delhi.
 PRASANNA CHANDRA (2016) – Financial management -– McGraw hill publishing

company limited New Delhi.
 PANDAY I M (1995) – Financial Management – 6th edition, Vikas Publishing House

Private Ltd. New Delhi.
ARTICLES:
 DR. Nabil M. AI- Nasser – The Impact of Analysis in Maximizing the Firm’s Value “ A
Case Study on the Jordanian Industrial Companies”. (International Journal of Managerial
Studies and Research Volume 2, Issue6, July 2014).
 Dr. Donthi Ravinder, muskula anitha – Financial Analysis, volume 2. Issue 3(Nov.- Dec.
2013).
REPORTS:
VRL Company Annual report 2017-18 to 2010-2021
WEBSITES:
www.vrllogistics.in
www.vrlgroup.in
www.moneycontrol.in

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A STUDY ON FINANCIAL ANALYSIS OF VRL LOGISTICS LIMITED

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

NEED FOR THE STUDY

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

OBJECTIVES OF THE STUDY

1) To examine the liquidity position of VRL Logistics limited.

2) To analyze the solvency position of VRL Logistics Limited

3) To determine the profitability and operating efficiency of VRL logistics Limited

4) To analyze the financial position of VRL Logistics Limited.

SCOPE OF THE STUDY

 This project considers financial data analyzed for four years.

LIMITATIONS OF THE STUDY

1) This study is restricted to data relating to a period of previous 4 years.

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

CHAPTER -01- INTRODUCTION

CHAPTER-02- CONCEPTUAL FRAME WORK OF FINANCIAL ANALYSIS

CHAPTER-03- PROFILE OF VRL LOGISTICS LIMITED

CHAPTER -04- DATA ANALYSIS AND INTERPRETATION

CHAPTER -05 – FINDINGS, SUGGESTIONS AND CONCLUSION

This chapter includes findings, suggestions, conclusion of the study.

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

CONCEPTUAL FRAMEWORK OF FINANCIAL ANALYSIS

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

INTRODUCTION TO FINANCIAL ANALYSIS

Financial analysis is the process of examining company's performance in the context of

MEANING AND CONCEPT OF FINANCIAL ANALYSIS

The purpose of financial analysis is to diagnose information contained in financial

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

OBJECTIVE AND IMPORTANCE OF FINANCIAL STATEMENT ANALYSIS

1) To assess the earning capacity or profitability of the firm.

2) To assess the operational efficiency and managerial effectiveness.

5) To make inter firm comparisons.

6) To forecast the future prospects for the firm.

7) To assess the progress of the firm over a period of time.

8) To help in decision making and control.

9) To guide on determining the dividend action.

10) To prove important information for granting credit.

TYPES OF FINANCIAL ANALYSIS

1) On the Basis of Material Used

According to material used, financial analysis can be of two types:

(a) External analysis,

(b) Internal analysis

(a) External analysis

(b) Internal analysis

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

2) On the Basis of Entities Involved

a) Cross sectional or inter-firm analysis, and

b) Time series or intra-firm analysis.

a) Cross Sectional or Inter-firm Analysis

b) Time Series or Intra-firm Analysis

3) On the Basis of Time Horizon or Objective of Analysis

(a) Short-term analysis, and

(b) Long-term analysis.

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

PROCEDURE OF FINANCIAL ANALYSIS

K.L.E.’S SHRI MRITYUNJAYA COLLEGE OF ARTS, COMMERCE AND PG STUDIED IN COMMERCE

5) The information is interpreted in a simple and understandable way.

METHODS OR DEVICES OF FINANCIAL ANALYSIS