A PROJECT REPORT ON

“A Study of Ratio Analysis at Fly Star Engineering.”

Submitted By-
Chetan Walave

Roll no- 221253

Under guidance
Dr. Rakesh Bhati

Submitted to

SAVITRIBAI PHULE PUNE UNIVERSITY

IN PARTIAL FULFILLMENT OF MASTER OF BUSINESS

ADMINISTRATION (MBA)
Batch 2023 to 2025

Submitted through

Audyogik Shikshan Mandal – Institute Of Business Management And

Research, Block ‘C’ Chinchwad, Pune, Maharashtra, 411019.
1
COMPANY CERTIFICATE

2
 DECLARATION

Mr. Chetn Bhanudas Walave here by declare that, the project reportentitled

“A Study of Ratio Analysis At Fly Star Engineering ’’ is original and has been carried out by
me as a student of M.B.A research work carried out by the guidance and supervision of DR.
RAKESH BHATI` Theinformation has been collected from genuine & authentic sources. The
work has beenin partial fulfilment of the requirement of MBA to Pune University.

Place: - Signature
Date:

3
 ACKNOWLEDGEMENT

I am extremely grateful to AUDOYIK SHIKSHAN MANDAL INSTITUTE OF BUSINESS

MANAGEMENT, PUNE for having prescribed this internship and project work to me as a part of
the academic requirement in the MBA course. Thecompletion of this project work has enabled me to
gain invaluable knowledge.
I am using this opportunity to express my gratitude to everyone who supported me throughout the course
of this report. I wish to express my sincere gratitude to my company guide Mr.ANIL WALAVE ,
Manager for allowing me to undertake my internship under him and for his keen interest and
encouragement at various stages ofmy training period.

I also like to thank Dr. Asha Pachpande (Director of ASM IBMR), Dr. Sandeep Pachpande
(Chairman of ASM Institutes) and, Dr.Rakesh Bhati who provided me with the facilities being
required and conductive decisions regarding my report. At this juncture, I also wish to appreciate the
management and staff of FLY STAR ENGINEERS for providing the entire state of the art
infrastructurwe and resources, toenable me to complete and enrich my project.

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 INDEX

Chapter No Content PG.NO.

1 Executive Summary 6-7

2 Introduction 8-11

3 Company Profile 12-19

4 Objective Of tha Project 20-21

5 Research Methodology 22-23

6 Data Analysis And Interpretation 24-41

7 Analysis &Finding 42-43

8 Recommendation & Suggestion 44

9 Limitation 45-46

10 Conclusion 47-48

5
EXECUTIVE SUMMARY

6
I am .Chetan.B.Walave.,MBA Student of ASM IBMR, Chinchwad I, have Done My internship at Fly
Star Engineers Company. It is During my two-month internship at Fly Star, a fantastic platform for
internships, I actively participated in the finance department, specifically in the purchasing department,
stock maintenance, and worker payment section. My main responsibilities included assisting with
procurement activities, ensuring optimal stock levels, and managing worker compensation. This hands-on
experience allowed me to gain valuable insights into financial operations and develop practical skills in
finance management.
I am fortunate to have the opportunity to work under the guidance of my senior finance manager,
Mr.Anil Walave. He has not only imparted valuable knowledge and skills but also shared his vast
experiences on how to conduct oneself in the company and effectively communicate with others. With his
guidance, I have honed my proficiency in using Excel and Tally software, enabling me to accurately record
and track various expenses, such as worker expenses and travel expenses, on a daily basis. Furthermore, I
have been entrusted with the responsibility of generating comprehensive stock reports. By diligently
collecting and analyzing data, I have been able to prepare precise and informative financial statements.
This experience has been invaluable in enhancing my professional growth and contributing to the overall
success of the company.
This project focuses on ratio analysis, demonstrating how ratios can be effectively utilized to drive
financial growth within a company. It aims to highlight the importance of ratios in assessing a company's
financial position and evaluating its performance. By employing various ratios, such as liquidity ratios,
profitability ratios, and solvency ratios, this project aims to identify areas of growth and potential losses
for the company. Through a systematic analysis of these ratios, it becomes possible to gain insights into
the company's financial health, identify areas of improvement, and make informed decisions to drive the
company's overall financial growth. The project emphasizes the significance of ratio analysis as a valuable
tool for financial evaluation and decision-making, ultimately contributing to the company's long-term
success and sustainability.

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INTRODUCTION

8
Ratio Analysis:

Rais analysis is a power full tool of financial analysis based on ratio. A ratio is defined "the indicate quotient
up to mathematical expression." In financial analysis ratio is used as a benchmark evaluing the financial
position and performance of a firm. The absolute accounting figure reported in the financial statements do
not provide as mining full understanding of the financial position of a firm, but well expressed in terms of
related figure. k yields significant inference. Ratio analyses reflect a quantitative relationship that helps to
form qualitative judgment.

Definition:

Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational
efficiency, and profitability by studying its financial statements such as the balance sheet and income
statement. Ratio analysis is a cornerstone of fundamental equity analysis.

Ratio analysis involves three steps that are as follows:

1. Selection of data, which is relevant to the objective of analysis and calculation of the appropriate ratio.

2. Comparison of the past and present ratio of the same firm and/or with the industry standard.

3. Evaluation and drawing inferences.

9
 The study of ratio analysis of Fly Star Engineering aims to analyze the financial performance
and investment potential of the company. Ratio analysis involves the examination and interpretation
of financial ratios derived from the company's financial statements. These ratios provide insights into
the company's liquidity, profitability, efficiency, and solvency.

Investment analysis focuses on evaluating the investment potential of Fly Star Engineering .This
analysis involves assessing the company's financial health, growth prospects, competitive position,
and industry trends. It aims to provide investors with valuable information to make informed
investment decisions.

This study will delve into various financial ratios such as liquidity ratios, solvency ratios, profitability
ratios, & efficiency market ratios. and to assess the company's financial performance. It will also
analyzekey financial indicators such as revenue growth, net income, return on investment, and cash
flow generation. Furthermore, the investment analysis will evaluate the company's competitive
positionwithin the industry, its market share, and its ability to capitalize on growth opportunities. It
will consider factors such as technological advancements, customer demand, and regulatory
environment to assess thecompany's future prospects..

10
Company Profile

11
Fly Star Engineers:

An emerging pioneer in the industry. They cover annual maintenance, shutdown, project execution,
fabrication and erection of structural and piping jobs, civil projects, mechanical works, industrial manpower
supplier, in the industries like Oil and Gas, Petrochemical, Power Plants, etc.

Overview of the Company

Name: - Fly Star Engineers.

Industry- Civil Engineering

Type- Privately Held

Head Quarter- Navi Mumbai.

Founder&Chairman- Mr. Thulasidharan B.

Website- FlystarEnginners,com.

Email: flystarengineers@gmail.com

GST No- 27 AJJPB3,168J1Z4

Address: L3, Great Eastern Galleria, 606, Karmvir Bhau Rao Patil Marg, Vinu Veena CHS, Sector
4, Nerul, Navi Mumbai, Maharashtra 400706.

MISSION:-
To be a leading provider of construction and engineering services to prestigious clients while
developing and maintaining our expertise and excellent reputation in the refinery
and petrochemical sectors

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 VISION:-

To become a market leader by providing premium quality services with the greatest consistency,
regardless of circumstances or contingencies, and achieving 100% client satisfaction

About Company

Established in 2001, FLY STAR ENGIEERS is a seasoned player in the mechanical and civil
construction industry. With over 25 years of experience, we have successfully executed a wide
range of projects across various sectors. Our dedicated team of 342+ staff members and a workforce
exceeding 3700 ensures that every project is completed with precision ,efficiency and safety.

Trust yourself. You

can do this.

MANAGING DIRECTOR

Mr. Thulasidharan B, the visionary behind Fly Star

Engineers, having a vast experience in the service field of
Infrastructure development started the company in 2002,
which focused on Fabrication, Erection and Commissioning
of Mechanical Structural Piping, Equipment’s and Civil
works. 21+ Years of rich experience, company has grown to
be the preferred
contractor for many clients. FLYSTAR ENGINEERS
believe that strategic Engineering works and infrastructure
is the backbone of modern societies, and successful execution of large infrastructure projects
requires breaking new ground in planning, construction and management The company is catering
Civil, Mechanical, Instrumentation and Insulation services to major sectors like Refineries,
Petrochemicals, Fertilizers, Power Plants,Steel,Plants.
13
14
Major Clients:

15
Corporate Social Responsibility:

16
CSR Activity

17
Corporate Social Responsibility of Fly Star Engineers
Fly Star Engineers' CSR activities for children's education may include initiatives aimed at
improving access to quality education, supporting educational infrastructure, and promoting skill
development among children. Some specific CSR activities in this area could include:

1. Education Infrastructure Development: Fly Star Engineers may invest in the construction or
renovation of schools, classrooms, libraries, or other educational facilities to enhance the learning
environment for children.

2. Scholarships and Sponsorships: The company may provide scholarships or sponsorship programs
to financially support deserving students, enabling them to pursue their education and access better
opportunities.

3. Teacher Training and Capacity Building: Fly Star Engineers may organize training programs and
workshops for teachers to enhance their skills and teaching methodologies, ultimately improving
the quality of education imparted to children.

4. Digital Literacy Programs: The company might support initiatives that promote digital literacy
among children, providing them with access to technology and digital learning resources.

5. School Adoption Programs: Fly Star Engineers may adopt schools in underprivileged areas,
providing resources, infrastructure, and educational support to uplift the overall educational
standards and outcomes for the children.

6. Vocational Training and Skill Development: The company might collaborate with educational
institutions or vocational training centers to provide skill development programs for children,
equipping them with practical skills for future employment.

These are just a few examples of potential CSR activities that Fly Star Engineers could undertake
to support children's education. For accurate and detailed information about their specific CSR
initiatives in this area, I recommend referring to their official CSR reports or reaching out to the
company directly.

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OBJECTIVE OF THE STUDY

19
OBJECTIVE OF THE STUDY:

1)To Compare the previous 2 years performance of the company.

2)To help the Management in having Effective control over the Activitys of different department.
3) To evaluate operational Efficiency, liquidity, Solvency of the firm.
4)To give Suggestion and Recommendation based on study.

20
Research Methodology

21
Data Collection:-

Data collection is the process of gathering information or data from various sources for the purpose of
analysis, research, or decision-making.Tha method of data collection is two types of dada vis Primary and
secondary.

Primary Data Collection:-

Primary data collection is the process of gathering original data directly from the source through methods
such as surveys, interviews, observations, experiments, or focus groups. I used interview method for tha
collecting primary data.

Secondary Data Collection:-

Secondary data collection involves gathering data that has already been collected and analyzed by someone
else for a different purpose, such as through published reports, databases, or existing research studies. Sally
publish data are available in

 Annual Reports book

 Balance sheet
 Website of company :- www. flystarEnginners.com.

22
DATA & ANALYSIS AND DATA INTERPRETATION

23
 A) Current Ratio / Working Capital Ratio :

The current ratio is a financial ratio that measures a company's ability to pay off its short-term
liabilities with its short-term assets It is used to be done by matching the total current asset of the
company with its current liabilities. The ideal ratio is 2:1.

Formula - Current Assets

Current Liabilities

NUMERATOR :- Current Assets = Inventory + Debtors + Marketable security +Cash

+Bill
Receivable
DENOMINTOR: - Current Liabilities = Trade creditors + Bills Payable + Outstanding Expenses +
Bank Overdraft + Provision for tax .

₹ in Lakhs
2021-2022 2022-2023

= 61,229.31 = 73,800.61
47,092.74 53,941.81

= 1.30 = 1.37

24
 Chart No:1

Financial Year Current Assets Current Liability Current Ratio

2020-2021 61,229 47,092 1.30

2022-2023 73,800 52,941 1.39

Total
1,35,029 1,00,033 1.30

current Ratio
80,000 73,800
70,000
61,229
60,000 52,941
47,092
50,000
40,000
30,000
20,000
10,000
1.30 1.39
0
Current Assets Current Liability Current Ratio

2020-2021 2022-2023

Figure No:1Bar Graph

Interpretation & Analysis :-

Comparing the current ratio of the previous year (PY) to the current year (AY), we can see
that the current ratio has increased from 1.30 to 1.36. Generally, a current ratio above 1 is
considered favorable, as it suggests that the company has sufficient current assets to cover its
short-term obligations.

The variance between the PY 2021-22 Current Ratio and AY 2022-2023 Current Ratio is
approximately5.38%. This indicates a 5.38% increase in the current ratio in the current year
compared to the previous year.

The positive variance suggests an improvement in the company's short-term liquidity position.

25
B) Quick / Acid Test/Liquid Ratio:-

It used to short term solvency of the company. The quick ratio measures the ability to meet
its current obligations. The generally ideal quick ratio is 1:1

Formula - Quick Assets

Quick Liabilities

NUMERATOR :- Quick Assets = Current Assets - Stock - Prepaid Expenses

DENOMINTOR: - Quick Liabilities = Current Liabilities – Bank Overdraft +Cash Credit .

₹ in Lakhs
2021-2022 2022-2023

= 61,229.31 – (26,099.78) = 73,800.61 – (28,907.83)

47,092.74 53,941.81

= 0.74 = 0.83

26
 Chart No:2

Financial Year Current Assets Current Liability Quick Ratio

2020-2021 35,130 47,092 0.75

2022-2023 44,893 53,941 0.83
Total 80,023 1,01,033 0.75

QUICK RATIO

2020-2021 2022-2023

53,941
47,092
44,893
35,130

0.75

0.83
CURRENT ASSETS CURRENT LIABILITY QUICK RATIO

Figure No:2Bar Graph

Interpretation & Analysis :-

 The quick ratio measures a company's ability to cover short-term liabilities using its most liquid
assets. A quick ratio of 0.74 in PY 2021-22 indicates that the company had ₹0.74 of liquid assets
available for every rupees of current liabilities. & The quick ratio of 0.83 in AY 2022-2023
indicates an improvement in the company's ability to cover short-term liabilities. This suggests
a slight increase in liquidity and a better ability to meet short-term obligations.

 The variance between the PY 2021-22 Current Ratio and AY 2022-2023 Current Ratio is
approximately 12.16%. This indicates a 12.26% increase in the current ratio in the current year
compared to the previous year.
.

27
Solvency/ Leverage Ratios :-

These ratios deal with long-term solvency position of the company.

A) Proprietary Ratio :-

The proprietary ratio, also known as the equity ratio or net worth ratio, measures the
proportion ofa company's total assets that are financed by its shareholders' equity. It indicates the
extent to which the company relies on equity financing to fund its operations and investments.

Formula - Proprietary Funds

Total Assets

₹ in Lakhs
2021-2022 2022-2023

38,458.54 = 46,599.25
= 88,003.35 1,01,032.82

= 0.43 = 0.46

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 Chart No:4
Proprietary Proprietary Fund
Financial Year Total Assets
Fund Ratio
2021-2022 38,458 88,003 0.44
2022-2023 46,599 1,01,032 0.46
Total 85,057 1,89,035 0.90

CHART TITLE
2021-2022 2022-2023

1,01,032
88,003
46,599
38,458

0.44

0.46
PROPRIETARY FUND TOTAL ASSETS PROPRIETARY FUND
RATIO

Figure No:4Bar Graph

Interpretation & Analysis :-

A proprietary ratio of 0.43 in PY 2021-22 indicates that 43% of the company's total assets were
funded by shareholders' equity, while the remaining 57% was financed by other sources such as
debtor liabilities. & The proprietary ratio of 0.46 in AY 2022-2023 indicates a slight increase in
the proportion of equity financing relative to total assets. It means that 46% of the company's total
assetsare expected to be funded by shareholders' equity, while the remaining 54% will be financed
by other sources.

The variance of 6.98% indicates a slight increase in the proprietary ratio from PY to AY. This
means that the company's reliance on equity financing is expected to increase by approximately
6.98%. It suggests that the company is relying more on shareholders' equity to fund its assets.

29
B) Interest Coverage Ratio/ Debt-service Ratio :-

This ratio establishes a relationship between interest on long term debt & net profit before
interest& taxes. It is useful for determining the capability of a business in meeting its fixed interest
obligationsfor its long-term loans.

Formula - Net Profit Before Interest & Taxes

Interest on Long –Term Debt

₹ in Lakhs
2021-2022 2022-2023

= 6459.35 = 10959.24
528.81 652.92

= 12.28 = 16.78

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 Chart No:5
Net Profit Interest on Loan-
Financial Year Debt service Ratio
Before Interest Term Debt
2021-2022 6459 528 12.28
2022-2023 10959 652 16.78
Total 17,418 1,180 29.06

DEBT SERVICE RATIO

2021-2022 2022-2023
10959
6459

652

16.78
12.28
528

NET PROFIT BEFORE INTEREST ON LOAN-TERM DEBT SERVICE RATIO

INTEREST DEBT

Figure No:5Bar Graph

Interpretation & Analysis:-

 In the previous year (PY) 2021-22, the interest coverage ratio was 12.28. This means that the
company's operating income was 12.28 times higher than its interest expenses. This indicates a
good ability to cover interest costs. & in this year (AY) 2022-2023, the interest coverage ratio is
projected to be 16.78. This shows a significant improvement in the company's ability to cover
interest expenses compared to the previous year.

 The variance between the two ratios is 4.5, indicating a substantial increase in the interest coverage
ratio from PY to AY. This suggests that the company's financial health has improved, as its
operating income has increased relative to its interest expenses.

31
Profitability Ratio:-

Profitability ratios are financial metrics that assess a company’s. These ratios help investors
evaluate a company's financial performance and make informed investment decisions. The
profitability is also important to determine the impact of various decisions such as increase in seeing
prices & change in tax structure on the efficiency of the business.

A) Gross profit Ratio / Trading Margin Ratio:-

Gross profit ratio is helpful for determining the ability of the business to
meet itsoperations expenses. It also show shareholders share after meeting operating
expenses.

Formula - Gross profit

Net sales

NUMERATOR:- Gross profit = (Revenue from operations - Cost of raw materials and
components consumed)
DENOMINTOR :- Net sales = Revenue from operations

₹ in Lakh
2021-2022 2022-2023

= 14,572.74 = 34658.30
104,789.66 140,370.26

= 13.90 % = 24.70 %

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 Chart No:6

Financial Year Gross Profit Net Sales Gross Profit Ratio

2021-2022 14,572 1,04,789 13.91
2022-2023 34,658 1,40,370 24.69
Total 49,230 2,45,159 38.60

GROSS PROFIT

1,40,370
2021-2022 2022-2023

1,04,789
34,658
14,572

13.91

24.69
GROSS PROFIT NET SALES GROSS PROFIT RATIO

Figure No:6Bar Graph

Interpretation & Analysis :-

 The gross profit ratio has increased from 13.90% in PY 2021-22 to 24.70% in CY 2022-23. This
indicates a significant improvement in the company's profitability from its core operations.

 The positive variance between the two ratios 10.80% suggests an increase in the gross profit ratio.
This implies that Fly star Engineers has experienced a substantial improvement in its profitability
from its core operations in the current year compared to the previous year.

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B) Net profit Ratio :-

Formula - Net Profit *100

Net sales
DENOMINTOR :- Net sales = Total – Sales Return

₹ in Lakhs
2021-2022 2022-2023

= 3,061.21 = 8,140.51
1,04,879.6 1,40,595.9
9 8

= 2.92 % = 5.80 %

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 Chart No:7
Net Profit
Financial Year Net Sales Net Profit Ratio
Before Tax
2021-2022 3,061 1,04,879 2.92
2022-2023 8,140 1,40,595 5.79
Total 11,201 2,45,474 8.71

NET PROFIT RATIO

1,40,595
2021-2022 2022-2023

1,04,879
8,140
3,061

2.92

5.79
NET PROFIT BEFORE NET SALES NET PROFIT RATIO
TAX

Figure No:7Bar Graph

Interpretation & Analysis :-

 In this case, the net profit ratio has increased from 2.92% in PY 2021-22 to 5.80% in
CY2022-23. This signifies a significant improvement in the company's ability to generate profits
after all expenses are deducted.

 The variance between the two ratios is 98.63%. This positive variance suggests that Kingfa
Science & Technology (India) Ltd has experienced a substantial improvement in its net
profitabilitycompared to the previous year.

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 Turnover / Activity / Asset management ratios:-

This ratios measure how efficiently the assets are employed by a company. These ratios are based
onthe relationship between the level of activity, represented by sales or cost of goods sold, levels of
various assets. The important turnover ratios are: inventory turnover, average collection period,
receivables turnover, fixed assets turnover, and total assets turnover.

1) Inventory Turnover: -

The inventory turnover, or stock turnover, measures how fast the inventory is moving through
thefirm and generating sales.

Formula - Cost of goods sold

Average Inventory

NUMERATO:- Cost of goods sold = Inventory in the beginning + Net Purchases +

Wages +Carriage inwards – Inventory at the end.

DENOMINTOR :- Average inventory = (Inventory in the beginning + Inventory at the end) / 2

₹ in Lakh
2021-2022 2022-2023

= 90216.92 = 105711.96
13271 27503.55

= 6.79 = 3.84

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 Chart No:11
Cost of goods Average
Inventory Turnover
Financial Year sold Inventory
2021-2022 90217 13,271 6.79
2022-2023 105712 27503 3.84
Total 1,95,983 40774 10.63

INVENTORY TURNOVER RATIO

Financial Year 2021-2022 2022-2023
105712
90217

27503
13,271

6.79

3.84
COST OF GOODS SOLD AVERAGE INVENTORY INVENTORY TURNOVER

Figure No:11Bar Graph

Interpretation & Analysis :-

 In this case, the PY 2021-22 inventory turnover ratio of 6.79 times suggests that, on average, the
company sold and replaced its inventory 6.79 times during that period. This indicates a relatively
efficient management of inventory. And the current year 2022-2023 inventory turnover ratio
of
3.84 times suggests a slight decrease in the efficiency of inventory management compared to the
previous year. This decrease could be due to various factors such as changes in demand,
production issues, or changes in inventory management practices.

 The negative variance of (-4.92%) suggests a decrease in the inventory turnover ratio from PY
toCY. This indicates a slight decline in the efficiency of inventory management, with the company
taking slightly longer to sell and replace its inventory.

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3) Assets Turnover Ratio:-

This ratio measures a company's efficiency in generating sales from its total assets. It shows
howwell a company utilizes its assets to generate revenue.

Formula - Net Sales

Average Total Assets

₹ in Lakh
2021-2022 2022-2023

= 1,04,789.66 = 1,40,370.26
54,381.19 58,756.54

= 1.93 = 2.39

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 Chart No:13
Average Total
Financial Year Net Sales Assets Turnover Ratio
Assets
2021-2022 1,04,879 24,735 4.24
2022-2023 1,40,595 32,099 4.38
Total 2,45,474 56,834 8.62

ASSETS TURNOVER RATIO

1,40,595 2021-2022 2022-2023
1,04,879

32,099
24,735

4.24

4.38
NET SALES AVERAGE TOTAL ASSETS ASSETS TURNOVER RATIO

Figure No:13Bar Graph

Interpretation & Analysis :-

 In this case, the PY 2021-22 assets turnover ratio of 1.93 times suggests that, on average, the
company generated sales 1.93 times its total assets during that period. This indicates a
moderate level of asset utilization. & the AY 2022-2023 assets turnover ratio of 2.39 times
indicates an improvement in asset utilization and productivity compared to the previous year.
This improvementcould be due to factors such as increased sales, more efficient operations, or
better utilization of assets.

 The positive variance of 23.83% suggests a significant increase in the assets turnover ratio from
PYto AY. This indicates a notable improvement in the company's ability to generate sales from
its assets, reflecting enhanced operational efficiency and productivity.

39
4). Working Capital Turnover Ratio:-

The working capital turnover ratio indicates the number of times the company's working
capitalis being turned over or used to generate sales in a given period.

Formula - Net Sales

Working Capital

₹ in Lakhs
2021-2022 2022-2023

= 1,04,889.69 = 1,40,595.98
14,136.57 19,858.80

= 7.41 = 7.07

40
 Chart No:14
Working Capital
Financial Year Net Sales Working Capital
Turnover ratio
2021-2022 1,04,879 24,735 4.24
2022-2023 1,40,595 32,099 4.38
Total 2,45,474 56,834 8.62

WO RK I NG CA PI TA L T URNOVE R RAT I O

2021-2022 2022-2023
1,40,595
1,04,879

32,099
24,735

4.24

4.38
NET SALES WORKING CAPITAL WORKING CAPITAL
TURNOVER RATIO

Figure No:14Bar Graph

Interpretation & Analysis :-

 A higher ratio indicates better utilization of working capital, while a lower ratio suggests
inefficiency or underutilization. In this case, the working capital turnover ratio has decreased
from
7.41 in PY 2021-22 to 7.07 in CY 2022-23. This indicates a slight decrease in the company's
efficiency in utilizing its working capital to generate sales.

 The negative variance between the two ratios (-4.59) suggests a decrease in the working
capital turnover ratio. This implies that Kingfa Science & Technology (India) Ltd has
experienced a slightdecline in its ability to efficiently utilize its working capital to generate
sales in the current year compared to the previous year.
 Receivableand implement measures to improve the collection process.
 Enhance cash flow management: Implement effective cash flow forecasting and
monitoringsystems to ensure that cash is managed efficiently.

41
Growth Ratios:

These ratios measure a company's growth potential and its ability to increase its revenue and
earningsover time.

A) Revenue Growth Rate:-

The revenue growth rate is a financial metric that measures the percentage increase or decrease
in a company's revenue over a specific period of time. It is used to assess a company's ability to
generate sales growth and is often considered a key indicator of its financial health and performance.
Formula - Revenue
Previous Year Revenue

NUMERATOR:- Revenue = (Current Year Revenue - Previous Year Revenue)

DENOMINTOR :- Previous Year Revenue

₹ in Lakh
2021-2022 2022-2023

= 41,563.22 = 35,716.29
63,316.48 1,04,879.69

= 65.65 % = 34.05 %

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 Chart No:15
Previous Year
Financial Year Revenue Revenue Growth Rate
Revenue
2021-2022 41,563 63,316 65.64
2022-2023 35,716 1,04,879 34.05
Total 77,279 1,68,195 99.70

RE VE NUE G ROW T H RAT E RAT I O

2021-2022 2022-2023

1,04,879
63,316
41,563

35,716

65.64

34.05
REVENUE PREVIOUS YEAR REVENUE REVENUE GROWTH RATE

Figure No:15Bar Graph

Interpretation & Analysis :-

 PY 2021-22 revenue growth rate of 65.65% indicates a significant increase in revenue during
that period. This suggests robust growth and positive performance for the company. However, the
CY 2022- 2023 revenue growth rate of 34.05% indicates a decrease in revenue growth compared
to the previous year. This suggests a slowdown in revenue growth or potentially a decline in
revenue.

 The negative variance of -31.6% indicates a significant decrease in revenue growth from PY to
CY. This suggests a decline in the rate of revenue expansion or potentially a contraction in revenue
for the company.

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 TREND ANALYSIS OF FLY STAR ENGINEERING

Trend analysis is a method used to analyze and identify patterns or trends in a company's
financial performance over a certain period of time. It involves comparing financial data from multiple
periods to identify any consistent upward or downward trends. To conduct a trend analysis for Fly
Star Engineering, you would typically review key financial statements such as the income statement,
balance sheet, and cash flow statement over a specific period, such as the last few years.

Revenue Growth:

Analyzing the Fly Star Engineering revenue growth over time can indicate its ability to
generate sales and expand its customer base.

Profitability Trends:

Examining the company's profitability ratios, such as gross profit margin, operating profit margin,
andnet profit margin, can provide insights into its ability to generate profits from its operations.

Liquidity and Solvency:

Assessing the company's liquidity ratios and debt levels can help determine its ability to meet
short-term obligations and its financial health in the long run.

Efficiency Ratios:

Analyzing efficiency ratios, such as asset turnover and inventory turnover, can provide
insights into how effectively the company is utilizing its assets to generate sales.

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 Analysis &Finding

The study of ratio analysis and investment analysis of Fly Star Engineering yielded the
following key findings at the end of the project:

 Financial Performance:
- Fly Star Engineering has exhibited consistent growth in revenue and profitability over the
study period. This indicates the company's ability to generate strong financial results.
- The company has maintained healthy liquidity levels, as evidenced by favorable current and
quick ratios. This suggests its ability to meet short-term obligations.

 Profitability:
- Fly Star Engineering has demonstrated effective cost management and pricing strategies,
as reflected in its stable and competitive gross profit margin.
- The company's operating profit margin indicates its ability to generate profits from its core
operations, highlighting its operational efficiency.
- The net profit margin reflects the overall profitability of the company after considering all
expenses and taxes.

 Debt Management:
- The company has maintained a favorable debt-to-equity ratio, indicating a balanced capital
structure and lower financial risk.
- The interest coverage ratio suggests that Fly Star Engineering has the ability to meet its
interest payment obligations, signifying good debt-servicing capability.

 Investment Outlook:
- Based on the company's historical financial performance, industry position, and competitive
advantage, Fly Star Engineering appears to be an attractive investment opportunity.
- The company's research and development capabilities, along with its growth prospects and
expansion plans, further enhance its investment attractiveness

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 Recommendation & Suggestion

 Implement a Robust Credit Evaluation Process:

- Develop a comprehensive credit evaluation process to assess the creditworthiness of
customersbefore extending credit terms.

 Monitor and Track Receivables:

- Implement a system to track and follow up on outstanding invoices to ensure timely collections.

 Establish Effective Collection Procedures:

- Develop a systematic approach to follow up on overdue payments, including sending
reminders,making phone calls, or initiating legal action if necessary.
- Assign dedicated personnel or utilize collection agencies to handle collection activities
professionally and efficiently.

 Escrow Accounts or Trust Funds:

- Consider utilizing escrow accounts or trust funds to hold open advance payments until
thevendor fulfills their obligations.
- This can provide an added layer of protection and ensure that payment is released
only uponsatisfactory delivery or completion of services.

 Implement Cash Flow Forecasting:

- Develop a cash flow forecasting system to anticipate cash inflows and outflows accurately.
- Regularly review and update the forecast to make informed decisions regarding cash
flowmanagement.

 Optimize Inventory Management:

- Maintain an optimal level of inventory to avoid tying up excessive working capital.
- Implement just-in-time inventory management practices to reduce holding costs and
improve cash flow.
.
 Leverage Technology:
- Utilize customer relationship management (CRM) systems to automate and streamline the
accounts receivable and cash flow management processes.
- Implement electronic invoicing and online payment portals to expedite the collection process.

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LIMITATION

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 Limitations

 It is very hard to get the permission for conducting the study regarding the
finance subject in the industry.
 Due to confidentiality some of the information, which was important for the
project, could not be collected. There were restrictions in disclosing such
information or data.
 It is very hard to past five years financial statements of the company based on
which are doing our research on ratio analysis.
 Maximum secondary data used.

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Conclusion

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 Conclusion:
In conclusion, the ratio analysis of Fly Star Engineering Company provides valuable insights into its
financial performance. The liquidity ratios indicate that the company has a strong ability to meet its short-
term obligations, with a current ratio above industry standards. The profitability ratios demonstrate
consistent profitability and efficiency in generating profits. The solvency ratios reveal that the company
has a healthy level of long-term debt and is capable of meeting its long-term obligations. However, the
declining trend in the gross profit margin and return on assets ratios warrants further investigation into
the company's cost management and asset utilization. Overall, the ratio analysis suggests that Fly Star
Engineering Company is in a stable financial position, but should focus on improving profitability and
maximizing asset efficiency to drive growth in the future.

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Fly Star Engineering

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