SUMMER TRAINING

PROJECT REPORT
(Comparative Study of CCL and MCL using the
technique Ratio Analysis)

CENTRAL COALFIELDS LIMITED

CCL DARBHANGA HOUSE, RANCHI

1
 A

Summer Training Project Report

On

Comparative Study of CCL and MCL using the technique

Ratio Analysis

Submitted for partial fulfillment of requirement for the award of

degree.

Of

Master of Business Administration

SESSION (2022-2024)

Supervision By Submitted By

Name of the Guide- Dr. Harmeet Kaur Name – Sweety Kumari

Designation- Head of department Enrolment No: - MB/22/087
Department - Management Semester- MBA(Sem-III)

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 DECLARATION
I the undersigned solemnly declare that the report of the project work entitled “A comparative
study of CCL and MCL using the technique ratio analysis” at CCL Ranchi is based on my own work
carried out during the course of my study under the supervision of Dr. Harmeet Kaur.
I assert that the statements made, and conclusions drawn are an outcome of the project work. I
further declare that to the best of my knowledge and belief that the project report does not contain any
work which has been submitted for the award of any other degree/diploma/certificate in this
University or any other university.

(signature of the candidate)

Name- Sweety Kumari
Roll no. - MB/22/087.
MBA (Sem-III)

3
4
5
CERTIFICATE BY INTERNAL FACULTY SUPERVISOR

6
 CERTIFICATE BY GUIDE (Internal Faculty of University)

On the basis of Project Report submitted by Sweety Kumari, student of Master

of Business Administration, I hereby certify that the Project Report
Comparative study of CCL and MCL using the technique ratio analysis.
Which is submitted to the Department of Management, Jharkhand Rai
University in partial fulfillment of requirement for the award of the degree of
Master of Business Administration is an original contribution with existing
knowledge and faithful record of work carried out by him/her under my guidance
and supervision.
To the best of my knowledge this work has not been submitted in part or full
for any Degree or Diploma to this University or elsewhere.

Date: Signature of guide

Name:
Designation:
Department: Management

7
 CERTIFICATE BY APPROVAL

I hereby approve this project report titled “A Study on Comparative Study of CCL and
MCL using the technique ratio analysis.” submitted in partial fulfilment for the award
of “Master of Business Administration” degree of Jharkhand Rai University, Ranchi.

Date:

Internal Examiner(s) External Examiner(s) Head of the

(signature) (signature) Department
Name; Name: (signature)
Designation: Designation: Name:
Designation:

8
 ACKNOWLEDGEMENT

Through this acknowledgement I express my sincere gratitude towards all

those people who helped me in this project, which has been a learning
experience. This space wouldn’t be enough to extend my warm gratitude
towards my project guide ‘’K. K. BISWAS” For efforts in coordinating
with my work and guiding in right direction. I escalate a heartfelt regard
to our Head of Department “Dr. Harmeet Kaur” for giving me this
opportunity to undertake this project. I also wish to express my
indebtedness to my parents as well as my family member whose blessings
and support always helped me to face the challenges head.
At the end I would like to express my sincere thanks to all my friends and
others who helped me directly or indirectly during this project work.

Place: Ranchi (Signature of Student)

Date: Student Name: Sweety Kumari
Enrolment No: MB/22/087

9
 PREFACE
IT is evidence that work experience that work experience is in
indispensable part of every professional course. In the Same Manner
Practical traning in any organization is a must for each and every
individual management course. This training gives more Knowledge
about the present corporate World. It is also helping individual to
improve your skill to extent and assess his personality in corporate life.
Classroom study is not doubt quite important for gaining theoretical
Knowledge, but practice is equally for Who want to provide himself with
the real working environment of any field of study. Thus, true of
Management Study well.
We generally get the theoretical knowledge of management. But this
knowledge does not prove to adequate. In future management students
have to work in an organization. By merely Knowing theoretical what
management is, we are not capable of applying it. Finance is concerned
with creativity, planning, decision criteria and finance policies and
strategies necessary to manage Funds and create enhanced the value of
the firm. Being a management student. I also undergo 45 days of
internship. I undertook training at CENTRAL COALFIELDS LTD.
This project is based on COMPARATIVE STUDY OF CCL AND
MCL USING THE TECHNIQUES RATIO ANALYSIS, which is
related to financial analysis& ratio analysis of the two company, the
expertise in this study belongs to those listed above any errors are
mine.
10
 TABLE OF CONTENTS Page no.

Chapter1: Introduction (11-28)

1.1 Overview of Industry (CCL and MCL)

1.2 Company profile (CCL and MCL)
1.3 Introduction of the study

Chapter 2: Literature Review

(29-31)

Chapter 3: Research Methodology (32-42)

3.1 Importance of the study

3.2 Statement of the problem
3.3 Objective of the Study
3.4 Scope of the study
3.5 Limitations of the study
3.6 Research Design
3.7 Data collection method
Chapter 4: Data Analysis
(43-54)
4.1 Method & techniques of data analysis
4.1.1 Data analysis concept
4.1.2 Data analysis process
4.2 Deta analysis & interpretation

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Chapter 5: Findings, Conclusion (55-57)
& Recommendations Findings
5.1 Findings

5.2 Conclusion
5.3 Recommendations.

Appendix & Bibliography (58-60)

Bibliography
Synopsis

12
 Chapter – 1

INTRODUCTION

13
 1.1 Overview of Industry (CCL):-

INTRODUCTION OF CENTERAL COALFIELD LIMITED:

C.C. L is a subsidiary of coal India limited under ministry of coal and

mines govt.of India C.C.L is one of the 8 coal production subsidiaries is
governed by a board of directors. Full time directors are responsible for
specific functions of operation, project &planning, finance, and
personnel, India is third largestcountry in the production of coal. C.C.L
means Central Coalfields Limited.

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HIGHLIGHTS OF CENTRAL COALFIELD LIMITED: -

Central Coalfield Limited has been on the coal map of the country as a
public sector on October, 1956, under different names. In the beginning
it was known as National Coal Development Corporation, then Central
Division of Coal mines Authority, and finally under its present
nomenclatures at Ranchi, Jharkhand. The Central Coalfield Limited is
one of the subsidiaries of coal India Limited registered under the
company’s Act 1956 in the year 1975. The mining and extraction of
coal is entrusted to a public sector organization Coal India Limited. The
Company is divided into eight subsidiaries and Central Coalfield
Limited is one of them. The

15
company presently known as CCL has a history of more than three
decades. Pursuant to the Industrial Policy Resolution of 1956, a
company was formed by the names of M/S Hindustan Collieries Private
Limited, on 5 september , 1956. The name was changed to the National
Coal Development Corporation. The NCDC was formed on 01.10.1956
with 11 state railway collieries in Orissa and Madhya Pradesh. Like
other industries and organization, the sffair of CCL too is not settled by
its owner (govt. of india ). Rather the professional team of management
called Board of Directors (BOD) is appointed by the Govt. of the india
to manage the affair of CCL. IT consists of chairman-cum-Managing,
Director, four functional Directors in change of operations, personnel,
finance and projects & planning. Besides part –time Directors as may
be appointed by the Govt. form to time. At present CCL has 67
collieries and 7 washeries under revenue production. Some of the state
collieries are very old, at least one of which that in Giridih has crossed
century in the year 1961. It also has seven coal washeries, a coal oven
plant, besides workshop and handling plants spread over in Hazaribagh,
Palamu, Dhanbad, Ranchi
,Bokaro,Gieidih, and Chatra district. CCL’s other important activities
are beneficiation of medium ciking coal for steel plants through its
chain of coal washeries and manufacture of

16
soft coke for domestic kitchen. Most of the production (88%) comes
from surface mines. The productivity of underground mines and many of
the surface mines is low, but because of high priced of coking coal, the
company has been making marginal profit and losses with the recent
deregulation of coking coal price the profitability of the company is
expected to improve.
The command area of CCL companies 10 coalfields namely Giridih,
East Bokaro, West Bokaro, piparwar , Ramgarh –kaitha , North
Karanpura.

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HISTORICAL BACKGROUND OF CCL: -

1. Coal Mining first started in India in the year 1815. The private
Railway Companies Started mining activities in the year 1850. The
Railway Board Nationalized the coal mining in 1925. The Railway
collieries were transferred to the coal board in the year 1944.In 1774
Warren Hastings initiates commercial coal mining at Raniganj, (west
Bengal) in1815-1820 First Shaft Mine opened at Raniganj 1835carr,
Tangore & company takes over the.

2. Raniganj Coal mines 1843 Bengal coal company takes over Raniganj
coal mines and others; is first Joint Stock Coal company in India.
. Up to 1900 Minimal development; river transportation used to
transport coal to Calcutta railway lines at Calcutta leads to expansion of
Coal production in Early 1900s, Capacity at
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6 million tonnes. In 1955-56 Focus on coal industry; capacity up to
38.4milliontons In 1956 National Coal Development Corporation
(NCDC) formed to explore and expand coal mining in public sector.
In 1972 coking coal Industry Nationalized, Bharat coking coal
Limited Formed to manage operations of all coking coalmines in
Jharia Coalfield. In 1973 Non-coking Coal was nationalized; coal
Mine Authority Limited set up to manage these mines; NCDC
operations bought under the ambit of CMAL.
In1975 coal India Limited formed as holding company with 5subsidiaries: -
1. Bharat coking coal Limited (BCCL) , Dhanbad.
2. Central coalfields Limited (CCL) , Ranchi.
3. Western coalfields Limited (WCL), Ranchi.
4. Eastern Coalfields Limited (ECL) , Sanatoria near Asansol.
5. Central Mine Planning and Design Institute Limited
(CMPDIL)in 1985, Ranchi.
6. Northen Coalfields Limited (NCL), Singrauli.
7. Southeastern Coalfields Limited (SECL)1992, Nagpur.
8. Mahanadi Coalfields Limited (MCL), Sambalpur.
In 2007 Coal India& Five of its Subsidiaries, Viz, NCL, SECL, MCL,
WCL, CCL was accorded coveted “Mini Ratna” Status.

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OBJECTIVES OF CCL: -

1. TO optimize generation of internal resources by improving

productivity of resources, prevent Wastage and to mobilize adequate
external resources to meet investment need.
2. To maintain high standards of Safety and strive for accident- free
mining of coal.
3. To lay emphasis on afforestation, protection of
Environment and control of pollution.
4. To undertake detailed exploration and plan for new
projects to meet the future Coal demand.
5. To modernize existing Mines.

6. To Develop technical know-how and organizational

capability of coal mining as well coal beneficiation and
undertake, wherever necessary, applied research and

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 development work related to Scientific exploration for greater extraction of
Coal.
7. To improve the quality of life of employees and to discharge the
corporate obligations to Society at large and thecommunity around the
coalfields in particular.
8. To provide adequate number of skilled manpower to run the
operations and impart technical and managerial training forup gradation
of skill.
9. To improve consumer satisfaction.

10. To enhance the CSR activities specifically in the field of

Health, Sanitation and Drinking Water in the Surrounding Villages.

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MISSION AND VISION (CCL):-

MISSION:-

The Mission of Central Coalfields Limited (CCL) is to produce and

market the planned quantityof Coal and Coal products efficiently and
economically in Eco-Friendly manner, with due regard to safety,
Conservation and Quality.
VISION:-

To emerge as a National player in the Primary Energy Sector,Committed

to provide energy security to the Country, by attaining environmentally
and Socially Sustainable Growth, through best practices from Mine to
Market.

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1.1 COMPANY PROFILE(CCL): -

CHAIRMAN-CUM- MANAGING DIRECTOR

Shri P. M. Prasad

Dear Shareholders,

On behalf of the Board of Directors of Central Coalfields

Limited (CCL), with immense pleasure, I welcome you to the 66th
Annual General Meeting of the Company. The Annual Report of
our company for the Financial Year 2021-22, comprising
Audited Financial Statements, Statutory Auditor’s Report along
with Management’s reply, Comments of Comptroller and
Auditor General of India and Director’s Report is already with
you.

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Central Coalfields Limited (CCL), presently operates: -

➢ 52 Operative Mines: 11 Underground & 41 Opencast Mines.

➢ 5 Washeries: 4 Coking Coal Washeries (Kathara, Rajrappa,

Kedla & Sawang), 1 Non- Coking Coal Washeries (Piparwar);

➢ 1 Central Workshop (ISO 9001) at Bark Akana, 5 Regional

Repair/Workshops (3 W/s are ISO 9001) at Jarandih, Tapin North,
Dakra, Giridih & Bhurkunda;

➢ 6 Coalfields (East Bokaro, West Bokaro, North Karanpura,

South Karanpura, Ramgarh & Giridih).

2021-22 was yet another challenging year for all ofus. In the beginning,
we witnessed the devastatingCOVID-19 second wave bring into focus,
the significant humanitarian, and economic challenges of the country.
Then, the country witnessed unprecedented volatility in the business
environment & international geopolitical scenario with an ever-
increasing quest for energy and eventually the demand of coal kept
peaking withminordown surges during Covid peaks.

Amidst this tumultuous phase, society continued to look up to businesses

to help build a sustainable, equitable and fair future. Notwithstanding such
exigencies, our organization has time and again demonstrated resilience &
agility inresponding with precise interventions, to rise and chart newpaths of
excellence for meetingthe expectations of society.

24
1.1 Overview of Industry (MCL):-

INTRODUCTION OF MAHANADI COALFIELDS LIMITED: -

MCL is a public sector Undertaking engaged in mining of coaland allied

activities.

It

25
26
MISSION AND VISION (MCL): -

MISSION: -

The Mission of MCL is to Provide quality Products and services to the

public through effective intervention in the market.

VISION: -

The Company has a Vision to help in building a better habitable Kerala by

providing best solutions in the field of construction.

27
1.1 COMPANY PROFILE(MCL):-

The Fiscal year 2022-23 has been yet another challengingyear for MCL.
Despite of all odds, MCL has emerged as theflagship company of CIL
through its best practices and operational excellence. MCL scaled a new
peak in coal production by producing 193.26 MT surpassing its previous
peak coal production of 168.17 MT in FY 2021-22, with a growth of
over 25 MT i.e. 15% over last year. It is pertinentto mention here that the
growth in coal production in FY 2021-22 was over 21 MT i.e. MCL has
achieved a staggering growth of over 45 MT in the two consecutive
Financial years. MCL achieved highest ever OBR of 245.975 M.Cum.
during the current financial yearwith a growth of 19% overlast year. Your
Company has also despatched highest evercoal to the tune of 192.75 MT
in this fiscal registering a growth of 9% over last year. MCL has recorded
highest off-
28
take through environment friendly modes namely Rail & MGR (129.8
MT, which is about 67% of total. I am pleasedto highlight that MCL has
earned highest ever Profit After Tax (PAT) ` 13,475.21 Crore amongst
all the subsidiaries of CIL.

PERFORMANCE OVERVIEW: -

During the financial year 2022-23 your Company has become the
No.1 Coal producing Company in the country by producing
193.26 MT (15% growth) out of the total CIL’s production of
703.2 MT, which was 27.48% of CIL’s production. The
company has recorded highest ever coal off-take of 192.75 MT.
registering a growth of 9% as compared to last year. Your
Company has achieved highest ever OB removal of 245.97
M.cum, registering a growth of 39 M.cum (19%) w.r.t. last year
and highest ever CAPEX of ` 3929.84 Crore registering a growth
of ` 1.17% (45.54 Cr.) Crore over last year.

During the year, your Company has achieved highest ever gross
sales, net sales, PBT and PAT. The gross

29
sales for the year was `41,918.77 Crore, net sales was 27,824.55
Crore, PBT was `18,493.02 Crore (61.34%
growth) and PAT was ` 13,475.21 Crore (58.90% growth).
During the year, ` 7400/- Crore was declared as interim dividend
and final dividend of ` 1500 Crore has been recommended for
your approval in AGM. Your Company is also the highest
contributor to the Govt. Exchequers. MCL has paid ` 18,546.58
Crore. towards Royalty, Cess, Goods and Service Tax, GST
Compensation cess, NMET, DMF and other levies

30
 Chapter-2

LITERATURE REVIEW

31
LITERATURE REVIEW: -

1. Kakani et al. (2001) examined the determinants of firm performance

for 566 Indian firms. They tool ROA, ROCE, cash flow ratio, sales to
asset, gross profit margin, return on net worthiest. as dependent
variable and size, age, leverage, working capital ratio, business group
affiliation etc. as determinants of firm performance and found that
size, market expenditure and international diversification had a
positive relation with market valuation for firms. A firms ownership
composition, particularly the level of equity ownership by
shareholders, and the leverage of the firm were important factors
affecting its financial performance.

2. Bala Ramaswamy, Darry long and Mattew C.H. Yeung (2005) has
found empirical evidence that firm size and the firm ownership are
important determinants of financial performance in the
Malaysian. Palm oil sector- findings lend support to industry analysts
who have highlighted that profitability is higher in privately owned
firms.

3. Myung ko and Carlos Dorantes (2006) investigates the impact of

information security breaches on firm performance. To evaluate the
financial impact of security breaches related to confidential
information, the ‘’matched sample comparison.

32
group ‘’method is used. The researcher used ratios and two cost related
ratios and percentage of change in sales and operating income to see if
these measures are better indicators for identifying differences in
performance considering the context of this study. Profit ratios have
been the most commonly used as performance measures.

4. Neumann and Roberts (2008) argued that financial measures are

given more value over non-financial measures and ROI is the single
performance measures to which managers give more weightage.

5. Mahdi Salehi Alipour and Morteza Ramazani (2010), the objective

of the article is to establish the extent to which just- in-time may
affect to Iranian company’s financial performance. The researcher
used regression analysis as a statistical tool. Eventually the
researcher concludes that the application of the JIT system in Iran
increases the financial and non-financial performance of the
companies. Because of the weakness in performing the JIT, they
cannot benefit from it. There are searchers strongly suggest that the
barriers of performing the JIT System must be identified and
removed as soon as possible, so that the Iranian companies increase
their financial performances.

6. Krishna prasad Upadhyay (2004) used different types of financial

ratios to check up the financial performance of the selected finance
companies. Basically in this study he used solvency ratio, liquidity
ratio, efficiency ratio, profitability ratio and valuation ratio .different

33
 measures like return on investment , return on equity , return on
assets , earning per share, dividend per share, and asset utilization
ratio are used to assess the profitability of the companies. He
concluded his study stating that the solvency position of both
companies is not sound and credit creation capacity is good in both
the companies in aggregate.
7. Woo Gon Kim, Bakar Ayoun (2005) the study attempts to
investigate the technique applied in this industry. Hospitability –
related industry segments may comprise hotels, restaurants, airlines,
and other amusement and recreational services. The objective of the
study is to provide information to a variety of entities that might be.
interested in comparing major financial characteristics of companies.
on its different segments. The researcher used financial ratios, time.
series and Multivariate analysis of variances’ test as statistical tools.
The study concludes that increased volatility of hospitability industry.
due to unpredictable external environment for the past four to five
years. More volatile trends are depicted for the other three segments.
over the time period of this study.
8. Jose M. Moneva, Juana M. Rivera- Lirio, (2007) Maria J. Munoz-
Torres analyses the mission statements and the sustainability reports,
of a sample of 52 Spanish listed firms. Some traditional financial and
economic- indicators are used to analyze the company’s financial.
performance. Results show a not very high level of the stakeholder.
approach in Spanish companies a high level of publication and quality
34
 of sustainability reports and, finally, a positive and not significant
relationship between these variables and a positive financial performance.
9. Efendioglu. M (2010) explores the impact of strategic planning on
financial performance of major industrial enterprises of Turkey. This
paper is one of the few studies to examine the
strategic planning process in a sample of firms from a transitional econo
my. It can be considered alongitudinal study because it examines a set of
institutions to identify changes in their performance overtime, as they
incorporate the use of strategic tools in a dynamic competitive
environment. The research sample was drawn from the Turkish chamber
of industry database which listed the top500 manufacturing firms in
2006. The findings of this study provide a contribution to our
understanding of the nature and practice of strategic planning in Turkish
companies and possibilities of correlations between their efforts and
performance.
10. Hassan Mobeen Alam, Ali Raza and Muhammad Akram (2011)
examine financial performance of leasing companies since 2008 to 2010.
Ratio analysis technique has been used to evaluate financial performance
of leasing companies. All data has been retrieved from securities
&Exchange commission of Pakistan, Asian financial service association,
Leasing Association of Pakistan, State Bank of Pakistan, and leasing
company’s websites. Nine companies are selected for analysis out of
fifteen and this study covers three year period ((2008,2009 and 2010) .
The researcher used ratios as statistical tools. This study concludes that
35
 in 2010 the financial ratios are showing the positive change but there is a
decline in financial performance of leasing companies in 2009 when
compared to 2008.
11. Dhulia Hiren Kumar Kantilal (2012) conducted a study to analyze
thefinancialpositionofselected pharmaceutical companies in India. The st
udy was based on the secondary data which wereobtained from the
annual reports of the selected companies and related journals. After the
data collection processed and analyzed according to the outline
hypothesis (‘F’ test) formulated and proved with the use of statistical
tools to arrive at certain conclusion. He concluded his study that the
gross profit ratio of different companies in different years is not same.
12. Shalini H.S, Preethi V.S (2012) examines the effectiveness of
economic value-added method over the other traditional methods which
were used to analyze the financial position of an enterprise. For the
study, primary data is of little relevance, data availability is quite easy
and the quality of available data is very reliable because the data are
from the published information such as annual reports of the company,
primary data is collected for this purpose, standard literature was
abundant for the study. Secondary data has been collected from the
annual reports over the period of five years, from 2006 to 2010, which
acts as a sample for the purpose of financial dialectics.

36
 Chapter-3

RESEARCH METHODOLOGY

37
3.1 Importance of the study: -

➢ The importance of comparative study of CCL and MCL using the

technique ratio analysis is to gain insights into their financial performance
and determine their relative strengths and weaknesses.

➢ Ratio analysis involves evaluating various financial ratios calculated from

the company’s financial statements, such as the income statement, balance
sheet and cash flow statements.

➢ Learn the steps taken by the investors, competitors and financial analysts
for the decision-making purposes and understand how a company is
performing.

➢ The comparative study of CCL and MCL, using the technique ratio
analysis by comparing the financial ratios of CCL and MCL. I can assess
their profitability, liquidity solvency, efficiency, and overall financial
health.

3.2 Statement of the problem: -

➢ To understand, analyze through tabulation and graphical

presentation the variance in key performance factors of both the
companies.

38
3.3 Objective of the Study: -

➢ To Analyze the financial status of the company.

➢ To Compare the financial performance of CCL

and MCL for the past two years.
➢ To Analyze the Strengths and Weaknesses of the Selected
Companies.

3.4 Scope of the Study: -

1. We could have taken the data of 2020-21 for comparison. this would
reveal some new facts as well as improvements in the company over the
last year.
2. While comparing with other subsidiary we could compare the financial
results of surface mines and underground mines separately, as there is a
large difference in their productivity as well as operations. But obtaining
data for each mine separately would have been very difficult and almost
impossible to obtain data for its subsidiary company.

39
 3. We Could have reached to the place of actual production i.e. mines and
collieries and done the analysis. This would have thrown light on some
new prospects of the company.

4. We could take into account all the subsidiaries and calculate the industry
average and compare the performance of the company.
3.5 Limitations of the study: -

3.5.1 Current Data: As the annual reports for the year ending March 2010
is not out for the company. This study is limited to the study of,
Compare the financial performance of CCL and MCL for the past two
years.
3.5.2 Limitation of Compare the financial performance of CCL and MCL:
Ratios are based only on the information which has been recorded in the
financial statements. Financial Statements themselves are subject to
several limitations. Thus ratios derived , there from , are also subject to
those limitations.
3.5.3 Problems of price level changes: A change in price level can affect the
validity of Ratios calculated for different time periods. In such a case the
ratio analysis may not clearly indicate the trend in solvency and
profitability of the company.

40
3.6 Research Design: -

1. Research Design used in this Project: -

Research Design chosen for this study is Descriptive Research Design.

Descriptive study is based on some previous understanding of the topic.
Research has got a very specific objective and clear-cut
data requirements.

3.7 Data collection Method: -

The process of data collection begins after a research problem has been
defined and research design has been chalked out. 1.Secondary data.

41
Chapter-4
Data Analysis

42
 4.1 Data Analysis and interpretation: -

RATIO ANALYSIS IN THE CONTEXT OF CROSS –

SECTIONAL STUDY OF
CENTRAL COALFIELDS LIMITED & MAHANADICOALFIELDS LIMITED
BLOCK- I : MEASUREMENT OF PROFITABILITY

(A) CROSS MARGIN RATIO: -

It is given by GRP = [ Gross Margin (PBDIT)/ Net Sales ] X 100

Description CCL 2020-21 MCL 2020-21

Gross Margin 2,551.01 12,508.83
Net Sales 10,774.32 14,474.08
GPR 23.68% 86.42%

GM Vs Net sales
16,000.00
14,000.00 14,474.08
12,508.83
12,000.00
10,774.32
10,000.00
8,000.00

6,000.00
2,551.01
4,000.00

2,000.00
-
CCL 2020-21 MCL 2020-21

Gross Margin Net Sales

43
Interpretation: -
It is evident that MCL has its GPM 5 times higher than CCL, but the NetSales
1.4 times higher than that of CCL. This induces that the operating expenses is very
much lower that that of CCL, Keep this analysis open for further analysis in the
ExpensesRatio Analysis.

[A] NET PROFIT RATIO: -

It is given by NPR = [ Net Profit after Tax (PAT)/ Net Sales] X 100

Description CCL 2020-21 MCL 2020-21

PAT 1,221.28 6,872.35

Net Sales 10,774.32 14,474.08

NPR 11.34% 47.48%

Tax 691.9 2444.44

PBT 1,913.18 9,316.79

Tax Rate 36.16% 26.24%

44
 OPERATING EFEICIENCY
CCL 2020-21 MCL 2020-21

14,474.08
10,774.32

9,316.79
6,872.35

2444.44

1,913.18
1,221.28

691.9
11.34%

47.48%

36.16%

26.24%
PAT NE T SA LE S NP R TAX PBT T A X RAT E

Interpretation: -

Even though the Net Sales of MCL is 1.4 times higher than CCL the
PBT is 4-fold higher, this indicates that DIT component of MCL is much
lower than that of CCL. It is clear that the Depreciation component is
not playing the pivot role in MCL, which in turn shows that Sales /
Production is not directly to Asset. This is basically achieved by the
MCL through Lesser Tax Rate of 26.24% than that of 36.16 % (CCL).

[B] EXPENSES RATIO:-

It is given by EXR = [ Respective Exp./ Net Sales] X 100

45
Description CCL 2020- MCL 2020-
21 21
Material 730.39 705.87
Consumed
OBR 365.87 -1,059.17
Employee 5,272.13 3,218.73
Benefit
Conct Exp 1638.11 3370.67
Dep. 553.59 572.65
Net Sales 10,774.32 14,474.08
Material 6.78% 4.88%
Consumed
OBR 3.40% -7.32%
Employee 48.93% 22.24%
Benefit
Conct Exp 15.20% 23.29%
Dep. 5.14% 3.96%

46
 EXPENSE CONTRIBUTIONS
CCL 2020-21 MCL 2020-21

14,474.08

10,774.32

5,272.13
3,218.73 3370.67
1638.11
730.39705.87 365.87 553.59572.65

Material O(B1R,.17) Employee Conct Exp Dep. Net Sales

Consumed Benefit

Interpretation: -

The Material consumed in MCL is more or less at same level with that
of CCL even though it manage to achieve 1.4 times more growth in
Sales , the reason behind this is Contractual Expenses which is 2 times
that of CCL , but this increase has been compensated by its low
manpower cost which is 2000 Cr less than that of CCL , and beingfixed
in nature the contribution is much higher.

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BLOCK-II : EVALUATION OF OPERATIONAL EFFECIENCY
(A) TURNOVER RATIO (CAPITAL)
It is given by (Net Sales / Capital Employed Excluding CWIP) X 100
Description CCL 2020-21 MCL 2020-21
Capital Employed 8,067.79 17,731.04
Net Sales 10,774.32 14,474.08
GPR 1.34 0.82

CCL Vs MCL Capital Employed

CCL 2020-21 MCL 2020-21

100%

90%

80% GPR

70% Net Sales

Capital Employed
60%

50%

40%

30% GPR

20% Net Sales

Capital Employed
10%

0%
Capital Employed Net Sales GPR

Interpretation: -
It is evident that CCL Managed to get higher capital turnover ratio in
comparison to MCL thereby GPR shows a good health for CCL.
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[A] EFFICIENCY RATIO:-

Categories as Inventory Turnover Ratio, Asset Turnover Ratio &

Receivables Turnover Ratio:

Description CCL 2020-21 MCL 2020-21

Inventory 1,288.67 1,103.52
Asset 7,838.14 10,455.18
Receivables 3402.53 1292.63
Turnover 15,900.51 23,619.94

Inventory% 8.10% 4.67%

Asset% 49.29% 44.26%
Receivables% 21.40% 5.47%

Curernt Asset Vs TurnOver

40,000.00
35,000.00
30,000.00
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
-
Inventory Asset Receivables Trunover

CCL 2020-21 MCL 2020-21

49
Interpretation: -
Inventory maintains a steady level for both the Company CCL as well
MCL, but MCL is well managed as the Ratio is 4.67 % in comparison to
8.10 % of CCL, & this is due to the fact that CCL is having more
inventory carrying cost than MCL. Asset Turnover show higher value in
MCL as the Current Asset is Morein comparison to CCL. Receivables in
CCL is more than MCL which may be a reason of concern.

For further analysis we took the Ratios as under:

INVENTORY%
CCL 2020-21 MCL 2020-21

37%

63% 37%

50
 Receivables%

20%
CCL 2020-21
80% 20%
MCL 2020-21

51
 BLOCK-III : LIQUIDITY RATIOS

[A] CURRENT RATIO & QUICK RATIO

Description CCL 2020- MCL

21 2020-21
Current 1.39 2.59
Ratio
Quick 1.19 2.44
Ratio

CR & QR
Current Ratio Quick Ratio

3.00

2.50

2.00

1.50

1.00

0.50

-
CCL 2020-21 55 MCL 2020-21
It has been observed that CR & QR shows a general trend the subject Gap is
Proportional. Thus, it has been observed that MCL is having Higher Ratios due to
factor other than Inventory. The liquidity position of MCL is better than CCL.

BLOCK-IV: STRUCTURAL RATIO

The Company’s Capital Structure consist of Equity Share Capital and

Reserve &Surplus, there is no funding through debt’s as such companies
capital investment is fulfilled by its own resources as such concept of
gearing is not applicable.

Description CCL 2020-21 MCL 2020-21

Share Capital 940.00 661.84
Reserve & Surplus 2,246.09 4,871.20
Retain Earnings 3,205.44 -
Description CCL 2020-21 MCL 2020-21
Other Equity as % of SC 580% 736%
Description CCL 2020-21 MCL 2020-21
Profit for the Year 1,221.28 6,872.35

56
 Absolute Equity
6,000.00

5,000.00

4,000.00

3,000.00

2,000.00

1,000.00

-
Share Capital Reserve & Surplus Retain Earnings

CCL 2020-21 MCL 2020-21

MCL having lower Share Capital and Higher RS, thus return on equity
is much better.
To get better return CCL may opt for Buy Back of Shares to improve its
EPS &Return on Equity.

57
. Chapter- 5
Conclusion and Suggestions

58
Conclusion: -

The Company is a PSU, functioning in a monopolistic market, having reach in

resources, a well-managed organization having sustainable growth, with a clear
vision to attain by its mission for upliftment of base of the society in a Macro
scale.

BUT: -

• As the GPM is low in CCL thus further analysis of operating

expenses is required and curbing of avoidable expenses should be
taken care of all the operating expenses.
• CCL is required to assess its tax management through differed tax
concept and allow a component which does not bear an impact of
tax by way of time difference / permanent difference to achieve
lesser rate in the line of MCL.
• CCL is required to assess its manpower cost policy and insure that
the manpower cost of the company is reduced to match the
industrial norms.
• As the current and quick ratio of both CCL and MCL is compared
it is concluded that CCL is not able to pay the short term debt on

59
 time. It has been observed that the liquidity position of mcl is
better than CCL due to factors other than inventory. CCL needs to
ensure that the liquidity ratio of the company needs to meet the
ideal ratio of 2:1 to pay its short-term debts on time.
• As the reserve and surplus of CCL is lower than MCL & its share
capital is higher than MCL, to increase the EPS and return of
equity of CCL, the company is advised to buy back its shares.

Analysis of financial Statement through Ratio Analysis revels: -

Revenue Generation could not be directly co-related with its CAPEX.

• Refer to analysis Point [ A] of Block -II.

Contractual Expenses shows increasing trends as a % to Net Sales

every year i.e. the reliance on production by contractual means is
getting its roots in the operation. In this way the investment in
assets except land should be discourage.

• Refer to analysis Point [C] OF Block -II.

OBR Expenses Ratio analysis shows a zig zag pattern even

though the revenue is at optimal level the Net Profit dip down or
60
 goes up due to this factor, this may be looked into to reduce the
non-cash expenditure charged to P/L account.

• Refer to analysis Point [C] OF Block -II.

Distribution of Profit if made out of current year’s profit then the impact
is low and benefit of market sentiment may be obtained, thus company
should avoid Dividend out of accumulated Retain Earnings.

61
Bibliography: -

➢ Reference: -
1. Financial management -1. M. Pandey
2. Annual report CCL (2020-2021)
3. Annual report MCL (2020-2021).

➢ Web Reference: -
1. www.ccl.gov.in
2. www.coalindia.in
3. www.mahanadicoal.in
4. www.moneycontrol.com
5. www.ncl.nic.in

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THANK YOU!

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