A Study on

FINANCIAL PERFORMANCE
with reference to
ITC PAPER BOARD LIMITED, BHADRACHALAM

A Project Report Submitted to

Jawaharlal Nehru Technological University, Kakinada in partial
fulfillment of the requirements for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by

CH. MOHAN DURGA PRASAD

(Reg. No. 21K61E0015)

Under the Guidance of

Mr. N. VENKAT
Assistant Professor

Department of Management Science

2023
 DECLARATION

I hereby declare that the project entitled “A Study on FINANCIAL

PERFORMANCE” with reference to ITC PAPER BOARD LIMITED,

BHADRACHALAM, is an original and independent work done by me and

has been submitted to the Department of Management Science, SASI
INSTITUTE OF TECHNOLOGY & ENGINEERING affiliated to
Jawaharlal Nehru Technological University, Kakinada in partial fulfillment
for the award of degree of “MASTER OF BUSINESS
ADMINISTRATION.”

I also declare that this project is the result of my own effort and is not
submitted to any other University for the award of any Degree or Diploma.

Place: TADEPALLIGUDEM CH.MOHAN DURGA PRASAD

Date: Reg. No. 21K61E0015
 DEPARTMENT OF MANAGEMENT SCIENCE

CERTIFICATE

This is to certify that the project work entitled, A Study on

FINANCIAL PERFORMANCE” With reference to ITC PAPER BOARD

LIMITED, BHADRACHALAM, submitted by CH. MOHAN DURGA PRASAD,

Reg. No. 20K61E0015, examined and adjudged sufficient as partial

fulfillment for the award of the Master of Business Administration, by
Jawaharlal Nehru Technological University, Kakinada from SASI
INSTITUTE OF TECHNOLOGY& ENGINEERING, Tadepalligudem.

INTERNAL GUIDE HEAD OF THE DEPARTMENT

EXTERNAL EXAMINER
 ACKNOWLEDGMENT

I take this opportunity to acknowledge, all the people who rendered their valuable
advice in bringing the project to function.

As a part of the curriculum at SASI INSTITUTE OF TECHNOLOGY AND

ENGINEERING, affiliated to JNTU-Kakinada the project enables us to enhance our
skills, expand our knowledge by applying various theories, concepts and laws to real life
scenario which would further prepare us to face the extremely „Competitive Corporate
World‟ in the near future.

I express my sincere thanks to Mr. M. Narendra Krishna, Vice-Chairman,

SASI INSTITUTE OF TECHONOLOGY AND ENGINEERING, Tadepalligudem,
for giving me an opportunity to undertake this project work.

I express my gratitude to Prof. Mohammad Ismail, Principal, SASI

INSTITUTE OF TECHONOLOGY AND ENGINEERING, Tadepalligudem, for his
valuable support in pursuing my project work.

I owe a deep sense of gratitude to Dr. P. Rama Krishna, HOD -Department of

Management Science, SASI INSTITUTE OF TECHNOLOGY AND ENGINEERING
(AUTONOMOUS), Tadepalligudem, and my guide Mr. N. Venkat, Assistant
Professor, for their cooperation at each and every stage of my work and for their patience and
immense support in completing this project.

Finally, I wish to express my thanks to all the members of the faculty of

department of management science for their valuable suggestions in bringing out my
project in most successful manner.

CH. MOHAN DURGA PRASAD

 INDEX
S.no Particulars Page. No
CHAPTER –I

1 INTRODUCTION 1-7

2 NEED FOR THE STUDY 8

3 SCOPE OF THE STUDY 9

4 OBJECTIVES OF THE STUDY 10

5 METHODOLOGY OF THE STUDY 11

6 LIMITATIONS OF THE STUDY 12

CHAPTER- II

7 REVIEW OF LITERATURE 13-23

CHAPTER –III

INDUSTRY PROFILE
8 24-33

CHAPTER –IV

COMPANY PROFILE
9 34-41

CHAPTER –V

10 DATA ANALYSIS & INTERPRETATION 42-58

CHAPTER VI

11 FINDINGS 59
12 SUGGESTIONS 60
13 CONCLUSION 61
62
14 BIBLIOGRAPHY
 LIST OF TABLES

S.no TITLE Page.no

5.0 TREND ANALYSIS 42
5.1 GROSS PROFIT RATIO 44
5.2 NET PROFIT RATIO 46
5.3 CURRENT RATIO 47

5.4 ABSOLUTE LIQUIDITY RATIO 49

5.5 QUICK RATIO 51
5.6 DEBTORS TURNOVER RATIO 53

5.7 TOTAL ASSETS TURNOVER 55

RATIO

5.8 FIXED ASSETS TURNOVER 57

RATIO
 LIST OF GRAPHS

S. n o
TITLE Page.no
5.0.1 TREND ANALYSIS 42
5.1.1 GROSS PROFIT RATIO 44

5.2.1 NET PROFIT RATIO 46

5.3.1 CURRENT RATIO 47

5.4.1 ABSOLUTE LIQUIDITY RATIO 49

5.5.1 QUICK RATIO 51

5.6.1 DEBTORS TURNOVER RATIO 53

5.7.1 TOTAL ASSETS TURNOVER 55

RATIO

5.8.1 FIXED ASSETS TURNOVER 57

RATIO
 CHAPTER - I
INTRODUCTION
Business concern needs account to meet their necessities in its operations. Any sort of
business movement relies upon the finance related; henceforth it is called as the backbone of
business association. Independent of the measure of the business concern, they need money
to satisfy their business practices.
Meaning of Finance

The account might be characterized as the workmanship and study of overseeing cash.
The account has likewise alluded as the arrangement of cash when it is required.
Furthermore, money work incorporates acquirement of assets and their successful usage in
business concerns.
The account is a part of financial matters till the 1890s. Financial aspects are
characterized as an investigation of the effective utilization of rare assets. The choices made
by business firms underway, advertising, money, and staff the board from the topic of
financial matters. The account is the procedure of change of gathered assets to gainful use.
In straightforward term, the account is characterized as the movement worried about
arranging, raising, controlling and administrating of assets utilized in the business.

Definition of Finance

“Finance is the art and science of managing money”.-Khan and Jain

Finance is defined as that administrative area or set of administrative in an

organization which relate to the arrangement of cash and credit. So that the organization may
have to means carry out its objectives as satisfactory as possible.- Howard & uptron
Meaning and Concept of Finance Function
There are for the most part four operational territories of each business association
that creation, showcasing, account and HR out of which money are a vital region since all
different business exercises are relying on assets. Those assets are procured from general
society by a money supervisor and dispensed assets in a legitimate way in an association and
gets with well-known information about those territories by a chief. The choice with respect
to the assets may make or pulverize the association.

1
 Definition of Finance
The finance function is the process of acquiring utilizing the funds of a business.
- RC Osborn
Financing consists of rising, providing, and managing of all the money, capital, or
funds of any kind to be used in connection with the business.
- Deway
Financial Management

Money related administration is that administrative movement which is worried about

the arranging and controlling of an association's assets. Money related administration is the
indispensable piece of generally the board. It is worried about the obligations of the money
related supervisor in the business firm. Just monetary administration can be characterized as
Procurement of assets and their successful use in the business.
Definitions of Financial Management
Howard and Upton: financial management as an application of general managerial
principles to the area of financial decision making

Weston and Brigham: financial management is an area of financial decision-making

harmonizing individual motives and enterprise goals.
The financial management is concerned with

⮚ Estimation of fixed and working capital requirements

⮚ Formulation of capital and structure

⮚ Procurement of fixed and working capital

⮚ Management of earnings

Objectives of Financial Management

Effective procurement and efficient use of finance lead to proper utilization of the

Finance by the business concern. It is the essential part of the financial manager. Hence, the

financial manager must determine the basic objectives of the financial management. The
objectives of Financial Management may be broadly divided into two parts such as:

1. Profit maximization

2. Wealth maximization.

2
 The Finance Manager needs to make considerable progress by moving its
concentration from the customary way to deal with the present-day approach. By
concentrating on riches augmentation instead of benefit amplification. A nearsighted
individual or businessperson worries about momentary advantages. A transient's beginning
can full fill goal of acquiring a benefit, however, may not help in making riches. It is on the
grounds that riches creation needs a long haul's birthplace.
Offering need to esteem creation supervisors have now moved from the conventional
way to deal with the cutting-edge approach of monetary administration by concentrating on
riches expansion.

Introduction to Financial Statements

Budget reports involve salary proclamations, monetary record and different
articulations that uncover the money related position of a firm. These announcements are set
up from the bookkeeping records kept up by the firm. They are the finished results of the
money related bookkeeping process. The main budget reports distributed for data of pariahs
are the asset report, the salary proclamation, late reports, for example, explanations of held
profit, sources and utilized of assets, capital overflow, investors' value articulations, reserves
stream, income articulations subterranean insect eh like are treated like a piece of the fiscal
summary.
Fiscal reports are arranged basically for basic leadership. They assume a prevailing job in
setting the structure of administrative choices.
The budgetary examination is the way toward distinguishing the monetary quality and
shortcoming of the firm by legitimately building up between the things on the accounting
report and explanation of benefit and misfortune. There are different strategies or methods
utilized in the investigation, budget summaries, for example, near proclamations, pattern
examination, basic size articulations, calendar of changes in working capital, reserves stream
and income investigation – Cost Volume Profit Analysis and Ratio Analysis.

3
Meaning & Concept of Financial Statement Analysis
The fiscal summary investigation is to a great extent an investigation of connections
among the different budgetary factors in business as unveiled by a solitary arrangement of
articulations and an investigation of the pattern of these aspects as appeared in a progression
of proclamation. The reason for money related examination is to analyze the data contained
in fiscal summaries in order to pass judgment on the productivity and monetary soundness of
the firm.
 The term financial statement analysis includes both analysis and interpretation.

 The term analysis is used to mean the simplification of financial data by methodical
classification of the data give in the financial statement
Significance of the Financial Analysis
Examining a company's financial reports entails evaluating its past, current, and future
conditions. The objective is to identify a company's flaws alongside its strengths. In the
unlikely event that flaws are found, the company can come up with a solution to deal with or
overcome them. On the other hand, the company can make use of these attributes to enhance
its success. In this way, the company's overall financial situation will likely get better in the
future.
1. Holding of Share
The owners of the company are the investors. They may frequently have to decide
whether they should keep the items the organization offered or sell them. The financial
summary study is crucial because it provides investors with crucial information for making
these decisions.
2. Decisions and Plans
The organization's management is in charge of making decisions and formulating future
plans and strategies. To grasp the organization's earlier goal, they consistently need to
evaluate the execution and feasibility of their activity. The fiscal summary assessment is
crucial to the management of the organization as a result.
3. Expansion of Credit
The providers of loan funds to the organization are the lenders. They may then have to
decide whether to extend their credits to the organization and interest in exchange for
increased loan fees. The financial summary analysis provides them with crucial information
for their motivation.

4
4. Investment Decision
Future financial experts are those with extra income on hand who are willing to invest it
in worthwhile initiatives. As a result, they frequently have to decide whether to invest their
money in the company's offer. They like the financial summary analysis since it allows them
to get important information for their basic leadership and speculative goals.

Objectives of Financial Statement Analysis are as follows

1. Assessment of Past Performance
Past performance is a reliable indicator of future performance. Financial experts or
loan managers pay close attention to prior transaction patterns, Cost of Goods Sold, labour
costs, overall compensation, revenue sources, and profitability levels. These patterns provide
a mechanism for judging the administration's previous performance and may serve as
indicators of its future performance.
2. Assessment of Current Position
Fiscal report investigation demonstrates the present position of the firm as far as the
sorts of Assets claimed by a business firm and the distinctive liabilities due to the venture.

3. Prediction of Profitability and Growth Prospects

Budget summary investigation helps in evaluating and foreseeing the gaining prospects
and development rates in income which are utilized by speculators while looking at venture
options and different clients in making a decision about the winning capability of business
endeavor.

4. Prediction of Bankruptcy and Failure

The fiscal summary investigation is a critical device in surveying and anticipating
liquidation and likelihood of business disappointment.

5. Assessment of the Operational Efficiency

An organization's administrative performance is assessed through a financial summary
study. The divergence from any of the predetermined principles and actual performance can
be used as a gauge of the management's skill. The real performance of the company, as
revealed in the financial reports, can be compared to a few models established before.

5
 Gatherings in Financial Statement Analysis
A budget report investigation is the process of examining financial data from the
organization's benefit and loss record and accounting report using an appropriate system.
Various groups can use the budget summary analysis to obtain the necessary information
about the organization. The following are the meetings held to examine the budget report.
1. Investors
Investors are interested in the financial summary investigation to learn about the
organization's productivity. Gainfulness shows the likelihood of an association developing
and the security of investors' investments.
2. Financial Specialists and Lenders
Banks and financial experts are curious to learn an organization's position about its
capacity to dissolve. They look into the budget summary position to consider the safety of
their bets, their ability to make premium payments, and their ability to make the principal
repayment by the deadline.

3. Banks
Banks are interested in analyzing the financial summaries to learn about an
association's short-term liquidity situation. Banks examine the budget summary to see
whether the association has the authority to pay the amount of short-term commitments on
time.

4. The executives
The budget report's breakdown intrigues the executives, who want to assess the
sustainability of its choices and arrangements. It dissects the budget summaries to determine
the business's productivity, liquidity situation, and rate of return over the short and long
terms.
5. Government
The administration is intrigued to investigate the monetary position in deciding the
measure of expense obligation. It additionally helps in planning successful plans and
arrangements for monetary development.
Methods of Financial Statement Analysis
The apparatuses of fiscal summary investigation help me set up critical connections and changes the

6
most regularly utilized systematic procedures are under the use of these methods is delineated utilizing
the budget reports of ITC Paper Boards Ltd.
1. Horizontal Analysis
Financial summaries from various years are audited and analyzed in this type of study.
The current year's data are compared to those from the base year. The majority of the time,
the examination announcement includes data going back at least two years, and progressions
are often shown as percentages starting with the base year. This type of study is also known
as "Dynamic Analysis" because it uses information from year to year rather than current data.
2. Vertical Analysis
If such an assessment were to take place, the quantitative relationships between
various items in the fiscal report for a certain date would be looked into. This inquiry relies
on data from a single time period, which is unhelpful for a thorough analysis of the financial
situation of the organization. It is also known as a "static examination" since it is frequently
used to refer to proportion created on a single day or for a single accounting period.
3. Ratio Analysis
In order to find significant trends from the provided data, trend analysis includes
gathering data from several time periods and visualizing the data on a horizontal line. Both
technical stock research and accounting in finance use trend analysis.
4.Trend analysis
Trend analysis requires compiling data from various time periods and visualizing the data
on a horizontal line in order to identify relevant trends from the given information. Finance
uses trend analysis for both accounting and technical stock research.
5.Cost-Volume-Profit Analysis
Cost-volume-profit (CVP) analysis is a method for analyzing how changes in variable
and fixed costs affect a company's profit. Companies can use CVP to calculate the number of

units they must sell to break even (cover all costs) or reach a certain minimum profit margin.

7
 NEED FOR THE STUDY
Interpretation of financial statements through the use of trend analysis and ratio analysis is
very important for understanding the financial health of the organization. ITC paper boards
limited is a very successful company in paper board industry. A study of such a flourishing
organization shall provide insights about bench marks to lead any in that direction. There is
always a room for improvement. That means even for a successful company still there may
be a chance to make it much better.

8
 SCOPE OF THE STUDY

 This study attempt to know the financial position of the firm by applying trend
analysis and ratio analysis.
 This study discusses the various financial and non – financial matrix of the firm. It
includes financial analysis and results for the last 5 years. i.e., from FY 2017-18 to
2021 – 2022 of the firm.
 It is discussed the present paper industry updates in Indian perspective.
 This study covers 360 degrees of financial information of the firm. It includes
various findings and appropriate suggestions by the researcher.
 This study discussed various theoretical prospects of proposed title of the study.

9
 OBJECTIVES OF THE STUDY

 The major objective of the study is to know about the financial performance of the ITC
paper mills Ltd, Bhadrachalam through financial statement analysis.
 To get practical insights about the use of financial statements analysis.
 To identify the major changes in during study period i.e., from FY 2017-18 to FY 2021-22
 To know the financial operating performance by applying Trend and Ratio analysis.
 To evaluate the liquidity and profitability positions of the firm
 To offer required recommendations for based on the study of ITC paperboards limited.

10
 METHODOLOGY OF THE STUDY

Methodology refers to the method by which the objectives are achieved through the
collection of data. The data can be collected either from primary sources or secondary
sources. The information is collected through secondary sources during the project and
utilized for calculating financial performance and based on those, the interpretations were
made.
Primary Data
The data which is collected directly from the direct observation or by interacting with
different people is called primary data and the information is collected from the discussions
from various officials in the finance departments and from other concern departments.
Secondary Data
The information is collected from the financial statements and its information
brochures of the organization. The data collected from various years books published articles
and published annual reports of ‗ITC Paper Boards Ltd‘ and from other materials.
Methods of data collection
The data collected from the company files, financial statements, balance sheet and
other books and other articles and from the company website etc.

11
 LIMITATIONS OF THE STUDY

1. This study is limited to the ITC Paper Boards Ltd only. It does not relate to any other
similar Paper Board manufacturing Company.

2. The analysis is made based only on the annual reports of the company.

3. The ratios are generally calculated from the past financial statements and there are no
indicators of the future.

4. The limited-time 2 months allotted for the study is not sufficient to analyses the
related aspects of the study and hence only a brief idea of the industry could be given.

5. The scope of study is limited to the last four years' balance sheets.

12
 CHAPTER – II
REVIEW OF LITERATURE
Introduction
The review of literature is a crucial part of making plans for a study's remark. To justify
the precept of making sure exam is the fundamental purpose of the assessment of the
literature. It offers a top-level view of historical attitude, improvement, deviators, and new
departures or studies in that place and additionally suggests techniques of research suitable to
the hassle beneath investigation.

Below are a number of the perspectives of various authors on monetary assertion

assessment:

Akash Dixit (2007) in his examine on " The State Bank of India's Financial Results Analysis.
found that the cautioned Credit Deposit Ratio in SBI modified to seventy-six.184%. This
well-known shows that the Bank had created more mortgaged property from its deposits. The
part of interest prices in total prices extra in SBI (59.99 %) and also the part of hobby income
to common income grows to be more in case of SBI (84.49%), which shows that humans
would possibly opt for SBI to make investments their economic financial savings and to take
loans & advances. The ratio of different profits to popular income is 15.22 %, the Net Profit
Margin is 10.99 %, the improved fee of net earnings is 73.97%. This indicates that SBI had
finished properly. The implied rate of the whole earnings is Rs. 87,598.58, The net worth
ratio is 14.11%, which indicates that SBI has applied its resources more effectively.

Chandarana and Harish M (2008), completed a look at ―Performance Evaluation of LIC

of India‖ from 1996-ninety-seven to 2005-06. They have noticed that the proportion of
universal outgo to basic earnings modified into a whole lot less than 50%, throughout the
check duration well-known belongings have prolonged 6 instances. It has advised LIC that it
has to get rid of the management charges and make investments extra price range in
infrastructure and need to pay attention greater on international markets.

S. Sangeetha and Dr. S. T. Surulivel conducted ― A have a look at on Financial

Performance the usage of Ratio Analysis of BHEL, TRICHY. This paper is to enlighten
(Bharat Heavy Electricals Ltd). After analyzing all ratios, it is clear that the decrease in
profits for the organization is due to the lowering profitability at a few levels within the
period of 5 years. Increasing costs and lowering earnings have resulted in the decline of gross
earnings and internet income. Therefore, the employer needs to try and boom the profits
13
quantity by way of lowering the costs to increase the earnings and decorate profitability.

Arindam Barman(2010) in his take a look at of ‗Financial evaluation of Reliance Industries

Limited, conveyed that ‗The Company‘s regular position is at a great signal. The
corporation achieves correct enough earnings in beyond four years. The prolonged-
time period solvency feature of the corporation is a superb sign. The organization maintained
low liquidity to advantage immoderate profitability. The enterprise problems dividends every
12 months to its shareholders. The profits of the organization have been given decreased
within the very last 12 months because of preserving the incredibly immoderate liquidity.
The networking capital of the organization was maximum within the ultimate year suggests
the most liquidity.

GAURAV NARANG‟(2010) in his examine on Financial Analysis almost about ICICI

Bank submitted to H.P University, Shimla, by means of the usage of utilizing remarkable
strategies to the economic evaluation of ICICI Bank he arrived at a cease that the general
universal performance and financial role of the financial institution are first-class. Though the
profits of the financial institution are expanded over the duration, but not on the same
charge as of charges. Yet the monetary institution has succeeded in keeping a suitable
profitability role.

For the past five years, the financial institution has succeeded in elevating its share capital by
50%. The essential shareholders are the Individuals. The fundamental achievement of the
monetary institution and additionally the primary goal is the pinnacle-notch increase in its
deposits. Fixed and current deposits also are proven a developing style.

Equity shareholders also are taking component in an excessive go back on capital. Though
the present- day assets and liabilities of the monetary group aren't on top of factors, over the
years the economic organization has succeeded in retaining a solid solvency position. Based
on the ratio of outdoor and inner equity the bank is the usage of the greater amount of
outside equity. Bank's investments are also displaying a

14
developing trend. The principal delivery of profits for the financial institution is the interest
received thru the bank on the advances.

„Verdi Ali‟ (2010) in his study 'TATA Motors' identifies whether or not this agency has
sturdy monetary fundamentals and whether or not the investment within the commercial
enterprise organization might be of a long-term nature. Its monetary statements were
analyzed sooner or later of five-12 months period (2004-2008). Financial assessment has
been measured by using the use of diverse ratios. The survey concluded that the prevailing-
day ratio has been declining in the closing 4 years. However, its miles nonetheless well above
the enterprise degree, and it continues a superb degree of liquidity.

Maryam Mohammad, Afagh Malek (2012), also finished an empirical survey of the
financial usual performance assessment of a Malaysian production enterprise for a three-one
year period from 2009 to 2011. This exam probes the financial functioning of an investment
enterprise in Malaysia. This observation used the quantitative research technique. To examine
the relationships amongst numerous facts on b/s and profits statements, financial ratios have
been measured and evaluated during the studied length. Different ratios are calculated and
analyzed, subsequently that the economic supervisor can come to comprehend the current-
day monetary usual performance and compare them with other industries within the equal
region. According to resultant checks, it is able to be interpreted that during the yr 2011, the
commercial enterprise agency did not characteristic nicely, and regular firm's performance in
phrases of profitability, liquidity, and credit score high quality declined due to impairment
inside the company‘s running environment.

Dr. O.P Gupta, Sandeep Vyas (2013) of their journal-discover "A Financial Analysis of
IDBI Bank", found that the financial institution has a sturdy economic characteristic. After
the liberalization length in 1991, IDBI Bank after transforming itself from a DFI
to a bank in 2005, has faced the troubles of raising finance. Over the years, IDBI has been
elevating its funds by way of issuing bonds within the Indian debt market. This is
essentially due to a sustained stage of profitability and decreases stage of NPA's because of
better credit rating chance control thru the economic institution.

Raphael Nisha (2013) tries to research the financial standard overall performance of the
Indian tire business enterprise. The take a look at having become executed for the

15
period between2003 and 2012 to analyze the overall performance with the aid of manner
of the usage of earnings tendencies, monetary signs, manufacturing trends, export tendencies,
and many others. The cease end result concludes that the important thing to success within
the industry is to enhance difficult paintings' productiveness and flexibility and capital
performance.

Idhayajothi, Retal (2014) the number one idea at the back of this have a look at is to look
at the economic average performance of Ashoka Leyland Ltd. At Chennai. The outcome
suggests that economic overall performance is right and moreover suggested decreasing
numerous charges in case you need to beautify financial ordinary overall performance.

Harshadeep Chilukuri, Stephy Thankam Varghese (2016) performed a observe on

―Financial Statement Analysis of Ashok Leyland Limited, India‖. The enterprise money
owed for 7.1 percentage of the united states' Gross Domestic Product (GDP). Ashok
Leyland has proven a declining fashion inside the well-known earnings throughout August
2016 by 6 percent due to as lower increase within the Medium and Heavy Vehicle segment.
Medium & Heavy commercial automobile sales at some stage in the month declined
eight percentage to 8201 gadgets at the same time as slight commercial vehicle income
grew by using manner of 2 percentage to 2696 devices on each 12 months foundation.
So In this test, studying the monetary statements of Ashok Leyland and concluded that
the enterprise has to beautify the liquidity role. And also the corporation has to take
essential steps to lessen the debt capital percentage.

Dr. Ashok Kumar Path (2016) published ―A study on Financial Statement Analysis of
Tata Steel Odisha Project, Kalinga Nagar‖. This has a look is used to become privy to the
economic strengths and weaknesses with the assist of diverse monetary assertion
evaluation gadget and techniques. Tata Steel is growing its manufacturing capability by using
enforcing Several Greenfield Steel Projects, which include one on the Kalinga Nagar
Industrial Complex at Dubai in Jaipur District with an expenditure of Rs.21,2 hundred Cr.
For this technique drift, documentation of import of device is needed, so that the companies
have readability of responsibility. Internal manipulate helps higher and well-timed statutory
meet and document sanctity.

16
Dr. M. Ravichandran & M. Venkata Subramanian (2016) the principle concept in the
back of this look at is to evaluate the viability, balance, and profitability of Force cars Ltd. By
the use of numerous economic tools consisting of solvency ratio,
profitability ratio, comparative statement& graphs, and plenty of others the Operating
position of the company is calculated. This study concludes that employer has had been given
enough charge variety to meet its money owed & liabilities. In order to enhance monetary
typical performance further, the enterprise has to minimizing the government, promoting &
running charges.

Dr. P. Ganapati, M. Kulandaivelu, P.Keerthana (2018) made ― A Study on Financial

Statement Analysis of Tamil Nādu News Print and Paper Limited (TNPL), Karur District‖.
This evaluation is used to assess the overall over all performance of the
enterprise. TNPL Ltd has been incurring losses for the duration of the have a examine. So the
business enterprise has to awareness of getting earnings inside the coming years by way of
searching after inner similarly to outdoor elements. And with reference to sources, the
company is making utilization of the belongings properly. And the employer has to maintain
low inventory.

Ganga Bhavani from her research on ―Financial Statements Analysis on Tesla

(2018)‖ defined that one of the maximum distinguished and nicely engineered in vehicles
production groups inside the international is Tesla Incorporation. This business
enterprise continuously sufferings with losses. This look at is tried to discover a few possible
reasons primarily based on secondary facts i.e. Posted Financial Statements via Tesla Inc. For
the period of 2015 to 2017. This observes discovered that the enterprise has made suitable
Gross profits in absolute determine however even as in comparison as a percent of sales it
famous that Gross Profit has been reduced from 23% in2015 & 2016 to 19% in 2017. Higher
fees of Maintenance, Research and Development, Selling, General and Administrative fees
have induced the net profits to margin down.

17
 Theoretical Framework
Trend Analysis
Trend analysis is an important and useful technique of financial analysis. It involves
computation of index numbers of the moments of the various financial items in the financial
statements for a number of periods. It enables to know the changes in the financial position
and the operational efficiency between the period chosen. Through trend analysis, the
analysis can give his opinion as to whether favorable or unfavorable tendencies are reflected
by the accounting date.
The comparative and common size balance sheets suffer from a major limitation i.e., the
absence of basic standard to indicate whether the proportion of an item is normal or analysis
values are calculated for each item in isolation but conclusions are to be drawn by
studying the related items also.
Trend analysis can be analysis in the following ways:

❖ By calculating trend ratio (or) percentage.

❖ By plotting on graph paper (or) charge.

Trend Ratio (or) Percentage

It involves the ascertainment of arithmetical relationship which each item of several

year to the same item of base year. Any year maybe as the base year, it is usually the earliest
year.

Procedure for Calculating Trend Ratio

The following procedure maybe adopted for calculating trend ratio.

❖ Select any year as base year the selected year should be normal year for the base year the
trend value is taken as 100.
Trend percentage of each item should be calculated with the help of following formula.

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑦𝑒𝑎𝑟 𝑣𝑎𝑙𝑢𝑒

𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟 × 100

𝑣𝑎𝑙𝑢𝑒

18
RATIO ANALYSIS

Although there are other equally important tools for such analysis, ratios are used to a very
large extent in financial analysis. Therefore, comparing two related items directly can be
somewhat illuminating, but expressing the relationship as a ratio makes the comparison much
easier. Ratio analysis is used to evaluate business organizations to determine their ability to
handle upcoming financial obligations or expectations. In order to predict future
performance, current and historical data are examined, and any necessary extrapolations are
performed. Alexander Walt presented an intricate system of ratio analysis in 1919 after
criticizing bankers for basing their decisions solely on current ratios when granting credit.

One of the most effective methods for financial analysis is the ratio analysis. The process
of creating and evaluating different ratios (the mathematical relationship between data)
allows for a clearer examination of financial statements and the taking of decisions based on
that analysis.

One of the most well-known and frequently used instruments for financial analysis is the
ratio. Formally speaking, a ratio is described as "the indicated quotient of two mathematical
expressions." The link between two financial variables is a functional definition of a financial
ratio.

Definitions
According to the Accountant‘s Handbook by Wixon, Kelly, and Bedford, a ratio ―is an
expression of the quantitative relationship between two numbers

According to Kohler, a ratio ―is the relation, of the amount; a, to another, b expressed as the
ratio of a to b; a:b (a is to b); or as a simple fraction, integer, decimal fraction or percentage.

Nature of Ratio Analysis

An approach for analyzing and interpreting financial statements is ratio analysis. It is

the process of creating and analyzing multiple ratios to support a particular judgement. Ratio
analysis, however, is not a goal in and of itself. It solely serves as a tool for comprehending a
firm's financial strengths and limitations. There are several ratios that may be calculated using
the data in the financial statements, but the analysis must choose the proper data and compute
only a few suitable ratios using that data while keeping in mind the study's goal.

19
The significance of Ratio Analysis
A potent technique for financial analysis is ratio analysis. "The relationship
between two or more things" is the definition of a ratio. A ratio is used as a benchmark in
financial analysis to assess a company's financial situation and performance. A financial ratio
is a mathematical expression of the connection between two accounting statistics. A
qualitative assessment of the firm's financial status can be made by using ratio to summarize
vast amounts of financial data. It serves as a tool for assessing and deciphering the
enterprise's financial health.

Uses of Ratio Analysis

Helps in Decision Making

Ratio analysis aids in decision-making based on the data shown in these financial
statements.

Helps in Financial Forecasting and Planning

Ratio analysis is very beneficial for financial planning and forecasting. Planning entails
thinking ahead, and the ratios that have been determined for a number of years serve as a
roadmap for the future. These ratios allow us to make meaningful predictions for the future.
Ratio analysis, then, aids in planning and forecasting.

Helps in Communication
The person for whom the financial statements are intended receives the information in a
meaningful way. Ratios facilitate communication and raise the financial statements' worth.

Helps in Co-ordination
Ratios even help in coordination which is of utmost importance in effective business
management. Better communications of efficiency and weakness of enterprise results in
better coordination in the enterprise.

Helps in Control
Even developing effective company controls is aided by ratio analysis. Standard ratios
can be based on the accurate financial accounts, and any deviations or variations can be
discovered by contrasting the actual results with the standard in order to act remedially
when necessary.

20
 LIMITATIONS OF RATIO ANALYSIS

Difficulty in Comparison

The challenge of comparing ratios across firms to draw conclusions is a significant

constraint of ratio analysis. However, these analyses compare various practices used by
various firms (based on inventory valuation, depreciation methods, the useful life of assets,
etc.).

Pricing Level Changes

In India and the majority of other countries, financial accounting as it is now applied,
does not take price level changes into consideration. As a result, balance sheet numbers are
ruined and earnings are calculated incorrectly. As a result, financial statement analysis can be
seriously compromised.

Window Dressing
Companies may use financial projections to their advantage. A company might
construct its balance sheet, for instance, at a time when its inventory level is extremely low.
As a result, it can seem as though the company has a high inventory turnover rate and a very
comfortable cash position.

Classifications of Ratios
Ratio analysis is used to examine the company's financial status, operational
effectiveness, identify its weak points, and compare performance. These are some general
categories into which ratios can be divided.

⮚ Liquidity Ratios
⮚ Long-Term Solvency Ratios
⮚ Activity Ratios
⮚ Profitability Ratios

Liquidity Ratios

The short-term solvency status of a corporation is measured by liquidity ratios. These

ratios are calculated to provide insight into a company's ability to pay its short-term
obligations.

The liquidity ratios are

Current Ratios
21
 The link between current assets and current liabilities is known as the current
ratio. This ratio is used to analyze a company's short-term financial position and measures
general liquidity. It is computed by dividing total current assets by current liabilities.

Current Ratio = Current Assets - Current Liabilities

Quick Ratio

The quick ratio, commonly referred to as the "acid test ratio," is a stricter liquidity
test than the current ratio. The link between current obligations and quick assets is known as
the quick ratio. Total fast assets divided by current liabilities yields the quick ratio.

Quick Ratio= Quick assets Current Liabilities Absolute Liquidity Ratio

Super Quick Ratio and Cash Position Ratio are other names for this ratio.
Absolute liquid assets and current liabilities are the two elements of this ratio, and their
relationships are established by the following. Absolute liquid assets include cash on hand,
marketable securities, and bank balances.

Current liabilities.

Absolute Liquidity Ratio= Absolute liquid assets Current Liabilities

This ratio is intended to assess the firm's absolute liquid position. If this ratio is
75:1, the business has adequate cash on hand to pay its debtors. Additionally, it
demonstrates that the company is not paying attention to credit purchases and avoids using
bank short-term loans.

Profitability Ratios

To exist and expand over time, a business needs to turn a profit. While
maximizing profits is important, it would be incorrect to assume that all management-
initiated actions, regardless of their impact on society, are morally correct. These are used to
gauge how effectively the business operates.

Gross profit Ratio

It expresses the percentage-based connection between gross profit and net sales. The
difference between net sales and the cost of products sold is known as gross profit.

This ratio measures the overall profitability of the company and serves as a tool for
determining how much of a drop in selling price of the items per unit can occur without the
company suffering operational losses.

22
Gross profit ratio=Gross Profit Sales*100 Net Profit Ratio
It describes the link between net sales and net profits after taxes.

This ratio is frequently used as an indicator of total profitability and is particularly helpful to
business owners because it provides a limited picture of both a company's efficiency and
profitability.

Net profit ratio=NET PROFITNET SALES*100 Operating Profit

The link between sales and other operating expenses, on the one hand, and the
cost of goods sold, on the other, is established by the operational profit ratio. However, for a
manufacturing undertaking, a good ratio might be between 75 and 85%. By dividing
operating profit by sales, one can determine the operating profit ratio.

23
 CHAPTER – III
PROFILE OF PAPER INDUSTRY

One of the main businesses is paper, which serves fundamental human needs. Paper is
a pre-requisite for education and proficiency, and its use is a record of advancement in these
two areas as well as the general well-being of the general public.
Of all the businesses based in the woods, this one is the most crucial. Due to the way it
is assembled and the specific synthetic materials that are used, some people classify it as a
compound industry.
Given that some of the horticultural products and residuals are used as raw materials,
some other people include it in the group of Agra-based businesses. Since a significant
portion of the essential raw materials are obtained from the forest, it would seem appropriate
to categorize this sector of the economy as being based in the woods.
History
According to an archaic tale, a eunuch in the court of the Chinese emperor Ho Ti
produced the first paper. It‘s believed that he made use of mulberry tree bark. Around the
year 150 A.D, the most punctual paper known to have been produced using clothing. The
process for making paper first appeared in Japan, then spread to Central Asia, with China
serving as its primary manufacturing hub. Paper was not invented by the Egyptians until 900
A.D. In Spain, a paper factory was operating around the year 1150, and the art of
papermaking quickly spread throughout all of Europe. 200 years after this paper was first
produced in America, the English built their first factory in 1495
In Germantown, Pennsylvania, the first paper factory in the American colonies was
constructed in 1690. William Rittenhouse, a papermaker trained in Germany and one among
the first Germans to go to the New World, founded it on the banks of the Monoshone Creek.
His goal was to turn the basic fabric of clothing into fine, white paper. Paper for handouts and
papers was provided by the Rittenhouse factory during the American Revolution (1775–
1783). The paper was also used to create the gun wadding and ammunition that was
employed during the conflict.
Paper mills erupted to meet the demands of a burgeoning industry. New plants that were
close to cities and towns and had an abundant supply of clothing for the basic raw material
flourished. Another job title emerged for persons looking for employment in the paper
industry. In the absence of a more sophisticated nomenclature, the term ―ragpicker‖

24
was

25
coined to describe people who hurried through cities collecting clothing for papermakers. By
1810, there were approximately 185 paper processes in the country. Due to a shortage of the
raw resources necessary to create paper, papermakers began looking for substitutes. The
Boston Weekly Journal became the first American newspaper to be printed on ground-up
paper on January 14, 1863.
The paper industry expanded together with the size of the United States. Innovation
was conscious of the need for rapid production. Nicholas Louis Robert, a Frenchman, created
the most practical papermaking machine in 1798. In 1803, Henry and Sealy Fourdrinier,
British twins, produced a more advanced machine. Thomas Gilpin invented the first machine
that produced paper in a persistent sheet at Wilmington, Delaware, in 1817. Machine speeds
were greatly increased, and basic materials like straw and wood were being used. The paper
was currently being produced in larger and longer dimensions
The world‘s largest producers of paper, pulp, and paper goods by the late 1990s were the
US and Canada. One percent or so of American national pay went to the paper industry. The
United States employed 750,000 professionals in the paper industry alone throughout the
1990s.
Preservationists began to become concerned about the impact that paper production was
having on the environment towards the end of the 20th century. Paper plants had an alarming
tendency to contaminate the water supply and wipe off wild species. Before the end of the
twentieth century, the company set a goal to recover 50% of all used paper through reuse.
By 1999, it appeared that this barometer was underwhelming because twice as much
paper was recovered for reuse as was disposed of in landfills. The promise of a "paperless"
world by those who believed that trade and innovation would alter every element of society
had an additional financial and social impact on the paper industry as the new century began.
Paper industry in India
The paper industry in India ranks as the fifteenth largest in the world. It gives the
government a financial contribution of Rs25 billion and employs about 1.5 million people.
According to the administration, the paper industry is one of the 35 high need enterprises in
the nation.
The production of paper is primarily dependent on the raw resources found in rural areas.
In the year 1812, the primary paper industry in India was established in Sreerampur, West
Bengal. It used jute and grasses as its primary raw materials. Midway through 1905, India
saw the introduction of large-scale mechanical innovation in papermaking. From that point

26
on, the A variety of changes were made to the raw materials utilized in the paper industry
over time, and new, non-conventional raw materials besides wood and bamboo were
developed for use in the papermaking process. The paper and pulp industry in India has
expanded tremendously recently. The paper industry is currently split into three groups:
Agra-based, rural-based, and others (waste paper, optional fiber, bast fibers, and market
mash).
In 1951, India had 17 paper mills; currently, there are about 515 facilities making paper,
paperboards, and newsprint. There are large-scale and small-scale operations in India's paper
and pulp industries. Large scale firms are defined as those with a cap of more than 24,000
tons per year in the paper industry. The vast bulk of paper and paperboard products are
produced exclusively in India. Only specific papers with a reputational claim are permitted
for import. To meet some of its raw material requirements, the company must import waste
paper and wood
The industries (Development and Regulation) Act, 1951 de-authorized the Indian paper
sector with effect commencing on July 17, 1997. Interested business visionaries must
currently submit an Industrial Entrepreneurs‘ Memorandum (IEM) to the Secretariat for
Industrial Assistance (SIA) in order to start a new paper unit or significantly expand an
existing unit in a suitable location. All exercises on the planned course may have up to 100%
distant direct investment (FDI), with the exception of those needing mechanical licenses,
which call for an earlier administrative endorsement.
The astronomical cost of manufacturing, which is a result of inadequate accessibility,
the outrageous cost of raw materials, control costs, and the concentration of manufacturers in
one specific area, has driven India‘s paper industry to evolve. The administration has taken a
variety of aggressive measures to eliminate the barriers preventing the advancement of
foundations and the availability of raw materials. To fight the paucity of raw materials, for
example, the need for mash, waste paper, and wood logs/chips has been minimized.
Growth and Development
Since the tenth century, the traditional skilled workers known as axis have operated a
small bungalow industry in India that produces paper. They used ropes, cloths, gunny sacks,
and other materials to make paper. This industry suffered a severe fall as a result of the rise of
machine-made paper. Whatever the case, a portion of it has managed to persist, and even
now, a sizable number of little units are supplying the handmade paper.

27
 The establishment of a processing plant close to Chennai in 1816 marked the beginning
of the modern paper industry. This effort served no useful purpose. In Serampore, West
Bengal, on the Hugli River‘s bank, another paper factory was established in 1832. This effort
too failed, and the Royal Bengal Paper Factory at Ballyganj, near to Kolkata, were
established in 1870 as the main successful effort.
Even today, this is where the paper industry is headquartered. Successful efforts were
conducted at Raniganj in 1892, Kaukinra in 1892, Raniganj in 1879, Titagarh in 1882, Pune
in 1887, Naihati in 1918, and Raniganj in 1892. The unique treatment and security levy
contributed to addressing this industry‘s fundamental problems.
Second World War gave this sector even more vitality. However, until Independence,
progress was a little sluggish, and it has only been during the arrangement period that the
company has made significant headway. There were 17 factories with a total introduced limit
of 1.37 lakh tons in the years 1950–1951.
In 1977–1978, there were 77 plants and 14.40 lakh tonnes produced. In 1995–1996 there
were 379 factories and 37.78 lakh tonnes produced. India currently has a quota of 6.2 million
tonnes for paper and paperboard introduced in full. For paper and paperboard, the total
announced 2010 limit must reach 8.3 million tonnes. Likewise, production of paper and
paperboard increased steadily but unbrokenly, rising from a negligible 116 thousand tonnes
in 1950–1951 to 3,684 thousand tonnes in 2003–2004.
The company is listed among the top 15 paper enterprises in the world. It has a turnover
of about Rs 16,000 crore and employs roughly 3 lakh people directly and 10 lakh people
indirectly. India still uses 5.5 kilograms of paper per person year, whichever underneath the
worldwide normal of about 50 kg.
Paper Demand in India
India's interest in paper is expected to increase 53 percent over the next six years despite
the continued emphasis on digitization, largely as a result of a significant rise in the number
of school-going children in rural areas.
Table 2.1 Per capita paper consumption
Per Capita
Country
Consumption
India 9 Kgs
Indonesia 22 Kgs
Malaysia 25 Kgs

28
 China 42 Kgs
Global Average 58 Kgs

Localization of the Industry

Production of paper and paperboard uses coarse, worn-out, and weight-losing crude
materials and looks for locations with access to those materials. The amount of synthetic
substances needed in this business is little, and they may be effectively delivered over great
distances between their sources and their destinations.
Large tracts of forest are frequently found close to paper plants in the Western Ghats, the
Eastern Ghats, central India, and the Tarai-Bhabar region at the base of the Himalayas. large
regions of mild timberlands in the Himalayan region can generate a large amount of soft
woods.
The paper industry can benefit from great cellulose material from these delicate woods.
Due to the challenging terrain and limited transportation choices, these locations are closed
off, making it unlikely that these delicate woods will be removed or supplied for use in the
nearby regions' paper-processing.
Furthermore, bamboo backwoods are ready in just two to three years, as opposed to
the 50 to 60 years it takes for wood mash woodlands to recover. There hasn't yet been a paper
factory built in the Himalayan region. More eucalyptus and other quickly growing types of
wood trees are being planted in order to meet the paper industry's demand for cellulosic raw
materials. Near the market, where shoddy work is also available, are some of the paper
factories.
Challenges of developing paper industry in India
Western countries‘ paper industries have experienced unremarkable growth over the
past ten years, and it is expected that this trend will continue even if their economies grow.
Leading manufacturers in the sector are preparing their considerations to overcome these
challenges to gain a decisive edge by concentrating their development on eastern nations. In
2012, the United arrangements‘ share of the Asian paper market increased from 25% to
almost 30%.
This is an evident indication that western industry intends to capture the market in developing
countries. Among the countries being targeted, India is the actual one, with 75% of
acquisitions occurring there, particularly in APPM (Andhra Pradesh Paper Mills). Here, we
study the Indian paper sector with a focus on its evolving trends and prospective future.

29
 The majority of Indian plants are private, while just a small number are operational
under Indian management. Players in such industries, which resemble Ballarpur and West
Coast Tamil Nadu, expanded to their maximum extent due to CAGR (Continuous Annual
Growth Rate). By 2015–16, it is predicted that roughly 15 million tonnes of paper will be
used.
With increased interest, new opportunities, and appreciation for international companies,
the paper industry in India is growing quickly. 10 million tonnes of Indian paper are expected
to be purchased, with P&W papers receiving 33% of this demand. Despite the fact that India
is home to 15% of the world‘s population, only 3 to 5% of paper is still used globally. These
three factors—neediness, competence, and corporate spending—are what cause this low
dimension utilisation. The leading global paper producers are generally growing by almost
5%, and it is still at 8% in Asia. In any event, it is 12% or higher for the Indian market, which
sounds incredibly profitable for the country‘s paper business.
The printing paper sector in India, which is significant, ought to be affected, but
unexpectedly, there isn‘t much of one. India has a very modest impact on the rate of
computerized spending compared to other countries, and there are significant differences. If
we consider the advertising sector as a whole, printing consumes 25% of the market, while
internet advertising costs 2% in India. That, too, is a mechanical estimate for 2015 and is
anything but a more reliable measurement.
The main challenges to be overcome are weak economic conditions, outdated innovation,
a lack of capacity to carry out economic scale, and a lack of competent work. Enabling a
broad administration and comprehensive adjustment that can combine a higher standard for
the productivity of the hierarchical structure.
TABLE 2.2 INDIAN PULP AND PAPER INDUSTRY - PRODUCTION

Sl.no Company Production (MT)

1 Ballarpur Industries Limited 834050
2 ITC Limited- PSPD 590000
3 Tamil Nādu Newsprint & papers limited 371637
4 The west coast paper mills limited 317808
5 JK Paper Limited 292582
6 The Andhra Pradesh Paper Mills Limited 258201
7 Centure Pulp and Paper 242906
8 NR Agarwal Industries Limited 173072

30
 9 Seshasayee Paper & Boards Limited 169438
10 Trident Limited 152719
How paper is made
Crude Materials
Different types of unprocessed materials can be used to make paper and paperboard.
Crude materials account for 45–50% of the total cost of production and play a significant role
in the construction of paper and paperboard. Agra-based crude materials account for 28% of
the absolute new limit, while woodland-based crude materials account for 43% of it. The
remaining 29% of the limit is made up of other materials, including waste paper.
Bamboo
Typically, 2.3 to 2.4 enormous amounts of bamboo are needed to produce one ton of paper.
Bamboo is used in the paper industry to the extent of 60 to 70 percent of the essential
requirements of cellulosic raw materials. The advantages of bamboo are its long fiber, dense
stands, and quick recovery.
It grows in two to three years and generates an endless stream of environmentally friendly
raw materials. In any case, there is a chance that this source of essential crude material will
run out if the rate of overuse exceeds the rate of recovery. Between 20 and 30 lakh tonnes of
bamboo are expected to be produced annually at the current rate. Assam, Orissa, Andhra
Pradesh, Madhya Pradesh, Tamil Nadu, Karnataka, and Maharashtra are significant states
that produce bamboo.
Sabai Grass .
This is yet another important raw element for making paper. Before bamboo was introduced
as a significant crude material, it was the only raw material; however, since then, its use has
significantly decreased. It currently makes up between 7 and 9 percent of the nation‘s total
cellulosic crude material.
Despite having a long fiber and requiring little compound, Sabai grass grows in tufts
mixed in with other vegetation, making it difficult to separate it from polluting influences
most of the time. Its benefits are also far lower than those of bamboo. Together with other
affiliated grasses, Sabai grass has an annual supply of about one million tonnes. Shiwaliks
and Tarai zone sub-Himalayan tracts are where it primarily develops.

31
 Bagasse
After sucrose is separated from the sugar stick by smashing it, the sugarcane stalk— mostly from sugar plants—
becomes a sinewy buildup. Huge quantities of packs are produced in the country on a regular basis, with half of
them going towards making paper.
Different Materials

In addition to the previously mentioned components, other materials are also used to
make paper. These materials include used paper, clothing, rice and wheat straw, jute sticks,
and softwood from eucalyptus, pine, wattle, and mulberry trees.
Synthetic substances
As well as the previously mentioned cellulosic raw materials, some synthetics are also
utilized in the production of mash, paper, and paperboard. Burning soft drinks, flaming
leftovers from soft drinks, sodium sulphate, chlorine, Sulphur, lime, ferric alumina,
ammonium sulphate, gum, and mud are among the most important artificial mixtures.
Additionally, a variety of sizes and shading experts are used. Coal also makes a
significant contribution to the paper industry. One tons of paper typically requires 3.5 to 4.1
enormous amounts of coal. In addition, a substantial amount of delicate water is needed.
Issues and Prospects
The Indian paper industry is plagued by a number of significant problems, and the future
outlook is not particularly promising. The scarcity of raw materials is the industry‘s most
pressing problem. The majority of the resources used to create paper come from the wooded
areas. The paper industry is facing a severe crude material problem due to the rapid depletion
of woodland-based raw materials like bamboo and the deteriorating state of the world‘s
forests.
The abuse of wood-based raw materials has reached a point where it effectively
precludes any liberal limit development in the near future, which has put a stop to the growth
of the company. The industry should look for unconventional crude materials if it wants to
survive and develop. A developing country like India won‘t be able to meet this need without
fresh cutting-edge technologies.
Another option that will lessen the need for the typical raw materials is expanding the
use of waste paper. This will also lower the price of the energy and other data sources used.
Recycled material only makes up 15% of the total yield of paper and paperboard, which is
less than the 30-35 percent global average. As a result, the paper industry has a huge potential
for using recycled materials .

32
33
 Huge quantities of packs are still exclusively used as fuel by the sugar industry; the
paper industry is not given access to them. If sugar mills are encouraged to use coal-
terminated boilers rather than those reliant on the false, this priceless raw material could in a
sense be the solution to the paper industry's problems.
The accessibility of raw materials to this sector is being further reduced by the growing
awareness for woodland protection, support of natural balance, and biodiversity during the
last couple of years. Because the paper plants discharge effluents into open canals, rivulets,
and streams, contaminating the environment, environmentalists are also against this industry.
A significant number of the paper factories run the prospect of financial ruin and even
closure unless innovation to address the profusion issue is advanced and realized with barely
any additional effort.
India has a significant gap in the free market for paper, notwithstanding its low rate of
usage. India currently has more than 16% of the world‘s population but only uses 1% of the
paper and paperboard produced globally. Interest in the paper will definitely grow as
knowledge and skill spread, and after ten years, interest must be double what it is now. These
will force India to either build impressive indigenous creations or turn to large-scale imports.
Paper facilities typically produce less than 10,000 tonnes per year, compared to 50,000
tonnes in Southeast Asia and 85,000 tonnes in the Asia Pacific. The small size of the
assembling units renders them unprofitable, prevents the recruitment of new innovation,
requires greater capital contributions than the previous generation, and increases the cost of
tasks. .
A few tiny plants are using outdated technology and broken equipment and severely fall
short on an aggressive quality. Due to the rising costs of imported wood mash and waste
paper combined with an unreimbursed selling cost of the finished paper, many paper
processes have become unprofitable and have been forced to close. Recently, the Department
of Industrial Policy and Promotion commissioned an evaluation of the "Worldwide
Competitiveness" of the Indian Paper business by an office of international renown in order
to better understand various concerns relating to the paper and newsprint business.
The inquiry had shown, among other things, that the paper industry was restricted by a
lack of readily available good quality cellulosic raw material and outdated technology.
. The paper industry must address these two other notable difficulties if it wants to become
competitive overall: the startling cost of vital information sources and environmental
concerns. In any event, the Indian paper sector has trained labour that may be profitably
leveraged to embrace modern innovation for assembling paper and paperboard of the

34
universal standard at generally lower labour cost inputs. This is one empowering aspect. The
country has a vast supply of unemployed labour that can be used to improve raw materials.
Consequently, we can overcome some of the issues that have plagued the paper industry for a
long time.

35
 CHAPTER - IV
PROFILE OF ITC PAPER BOARDS LTD
ITC Limited, sometimes known as ITC, is an Indian corporation with its main office
in Kolkata, West Bengal. Five divisions make up its expanded business: Information
Technology, Paperboards and Packaging, Agri-Business, Hotels, and Fast-Moving Consumer
Goods (FMCG).
When ITC was founded on August 24, 1910, it was initially named as Imperial Tobacco
Company of India Limited. The company's name was altered in 1970 from Imperial Tobacco
Company of India Limited to India Tobacco Company Limited and finally to I.T.C. Due to
the Company's continued ownership of Indianite, it was restricted in 1974. On September 18,
2001, the full stops in the corporate name Fast Moving Consumer Goods were dropped,
forcing the company to change its name to Consumer Goods involving Foods, Personal Care,
Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks
and Safety Matches, Hotels, Paperboards and Specialty Papers, Packaging, Agribusiness and
Information Technology in recognition of the company's diverse business portfolio, which
includes a variety of organizations. The business is now referred to as "ITC Limited," where
"ITC" is neither an abbreviation nor a recognized name.
History of ITC Paper Boards Ltd
1925: Packaging and Printing: Backward Integration
ITC's Packaging and Printing Business was founded in 1925 as a crucial in reverse joining
for ITC's Cigarettes business, despite the fact that the first six years of the Company's
existence were primarily devoted to the development and solidification of the Cigarettes and
Leaf Tobacco organizations. It is currently the most upscale bundling house in India.
1975: Entry into the Hospitality Sector - An 'appreciated' Move
Beginning in the 1970s, a business change that would drastically impact the Company's
course began. The company began operating in the hotel industry when it acquired the ITC-
Welcomgroup Hotel Chola in Chennai, which is currently called as My Fortune, Chennai.
ITC entered the accommodation industry with the intention of helping the nation.
1979: Paperboards and Specialty Papers - Development of a Backward Area
In order to enter the paperboards market, ITC gave the ITC Bhadrachalam Paperboards
Limited a loan in 1979. On March 13, 2002, Bhadrachalam Paperboards successfully merged
with the business, becoming a part of it as the Bhadrachalam Paperboards Division. In

36
November 2002, this division merged with the Tribeni Tissues Division of the business to
create the Paperboards & Specialty Papers Division. ITC's paperboards are almost identical in
terms of innovation, profitability, quality, and assembly methods to those of the best in the
world.
In addition, it has worked hard to improve Sarapaka, an economically struggling area of
Andhra Pradesh. It has a direct bearing on environmental protection, network growth, and
education. In 2004, ITC purchased the paperboard production facility of BILT Industrial
Packaging Co. Ltd. (BIPCO), which was situated close to Coimbatore, Tamil Nadu. ITC can
improve customer management thanks to the Kovai Unit's shorter lead time and longer item
run.
1990: Paperboards and Specialty Papers - Consolidation and Expansion
ITC acquired Tribeni Tissues Limited in 1990, which produced specialized papers and
provided tissue paper to the tobacco industry. The Tribeni Tissues Division (TTD) was given
to the combined component. In November 2002, TTD and the Bhadrachalam Paperboards
Division amalgamated to form the Paperboards and Specialty Papers Division, which aims to
establish important and useful partnerships.
1990: Agri-Business - Strengthening Farmer Linkages
Similar to this, in 1990 ITC established the Agri-Business Division to utilize its
sourcing knowledge in order to suit the needs of Agri-items. Currently, The Division ranks
among India's top exporters. Before beginning its groundbreaking and now well-known e-
Choupal project in 2000, ITC started collaborating with soy farmers in Madhya Pradesh.
Over 4 million ranchers are currently covered across 10 states.
2002: Education and Stationery Products - Offering the Greenest items
ITC introduced the Paper kraft brand of high-end scratch pads in 2002. In an effort to
diversify its product line and appeal to a larger student population, the Classmate line of
notepads was introduced in 2003. Over time, Schoolmate expanded its portfolio to include a
more prominent offer of the school pack and developed into the largest notepad brand in
India. really long Between 2007 and 2009, practical books, sketchbooks, geometry boxes,
pens, and pencils were shipped under the "Cohort" brand. In 2008, ITC reorganized the
business as the Education and Stationery Products Business and introduced the first premium
eco-friendly business paper in India under the 'Paper kraft' Brand. . "Paper kraft" has a special
selection in its top-notch official stationery and office supply section. A fresh line of business
stationery called Colour Crew was unveiled in 2010.

37
2000: Information Technology - Business Friendly Solutions
In order to more aggressively pursue rising open doors in the industries of Banking, Financial
Services and Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing,
Engineering Services, Media and Entertainment, Travel, Hospitality, Life Sciences, and
Transportation and Logistics, ITC spun off its data innovation business into a fully claimed
subsidiary, ITC Infotech India Limited, in 2000.
2001: Branded Packaged Foods - Delighting Millions of Households
In 2001, ITC released the ready-to-eat gourmet Indian recipes under the Kitchens of India
brand. These recipes are created and distributed all over the world, first in jars, then in answer
bundles, and more recently online and at events.
2002: By breaking into the ice cream shop and stapling pieces, ITC acquired the
Bhadrachalam Paperboards Division and the security matches company WIMCO
Limited.
Personal Care Products: Expert Advice for Knowledgeable Consumers,
2005 Expanding the Tobacco Portfolio in 2010
In 2010, ITC released the hand-moved Armenteros stogie to the Indian market.
The business started conducting business online in 2014. ITC is currently the top
organization in the world for recycling heavy waste, being water positive, and being carbon
positive.
Nearly 40% of the energy used in the ITC is derived from green energy.

Profile of ITC Paper Boards Ltd Bhadrachalam

The largest, most advanced in terms of innovation, and most environmentally
friendly paper and paperboards company in India is ITC‘s Paperboards and Specialty Papers
Division. The company considers a variety of packaging, realistic, correspondence, writing,
printing, and claim to fame paper requirements through its four top-notch manufacturing
facilities, eight sales offices, and system of more than 60 merchants in India, along with a
robust global exchange system of wholesalers/operators and six completing tasks close to the
market for quicker support of the customers.
ITC‘s Paperboards and Specialty Papers division enjoys considerable authority in the highly
valued paperboard segment and also has a significant share of the Indian fine paper market as
a result of having led various claim to fame applications. It is India‘s top exporter of covered
sheets.
ITC Paperboards and Specialty Papers Division (ITC-PSPD) is one of the most well-
known companies in the industry globally. Our creative solutions to various cross-segment
38
bundling and correspondence needs have assisted us in carving out a unique specialty for
ourselves. With a focus on leading-edge innovation, we have become South Asia‘s largest
maker of packaging and graphic boards.
Our selection of goods and services has steadily grown over the years as we strive to
move up the value chain. Today, perceiving clients in India and around the world are highly
interested in our products and library of knowledge-based services for boosting and
enhancing their competitiveness.
Vision and Mission

Vision Mission
● To be a respected participant in the global Enhancing the enterprise's ability to
pulp, paper, and paperboard industry by generate profit in a globalizing world
demonstrating leadership in quality for its while providing outstanding and
processes, people, products, and services. long-lasting stakeholder value
● Consistently enhancing value for all
stakeholders and adhering to higher
sustainability ideals

Unit in Bhadrachalam
India's largest coordinated pulping and paperboard manufacturing facility is located in
Bhadrachalam. It boasts of hardware for paper machines, web recognition and examination
frameworks, completing and pressing lines, pulping forms, and paper machines given by
internationally renowned manufacturers. The unit currently provides premium virgin and
recycled board for bundling, as well as creative applications and fine printing sheets. The
light ECF technique, an ozone fading method, is used by the Bhadrachalam facility to create
and utilize mash. A significant amount of toxins is completely reduced when ozone
technology is used, giving customers access to a product that is more attractive, more
durable, and naturally aware of BOD (Biochemical Oxygen on Interest) and COD (Chemical
Oxygen on Interest) levels that are below the National Standards Limits. PM 4 and PM 5 at
Unit Bhadrachalam have grade sheets for maintenance that are BRC-IOP guaranteed.
• 7 machines that can produce up to 140,000 TPA of paper and 405,000 TPA of paperboard
each.
• ISO 9001, ISO 14001 and OHSAS 18001 certified.

39
• Forest Stewardship Council - Chain of Custody guaranteed.
• BRC-IOP guaranteed for nourishment grade sheets.
The product range includes packaging boards

A wide range of customers who demand high quality graphics, fidelity, print appeal, and
trouble-free operation on high-speed printing and conversion lines can be served by modern
equipment and solutions.

Recycled

o Folding Box Boards

o Solid Bleached Boards
o Coated Duplex Greyback
o Coated High Burst Liner
o Coated Duplex Whiteback
o A range boards tailor-made to meet the requirements of specific industrial and graphic needs of
customers.
o Liquid packaging
o Food grade packaging board
o Cup stock
o Barrier coated carton board
o Bio degradable barrier boards

Papers
o Wood free fine papers
o Absorbent Kraft
o Thin printing
o Decor Surface, Printing &barrier papers
o unbleached craft space
o Cigarette tissues
o Electrical insulation papers
o Oil & grease resistant papers

40
Graphic
o Art boards
o Playing card boards
o Ivory boards
Some of ITC's prominent brands are,
package design and Graphic boards include Art Maestro, Carte Persona, and Digi art
Specialty papers. Biodegradable barrier boards include Omegabev and Omega Barr. graphic
design
Coated virgin boards include Carte Lumina, Cyber Propac, Cyber Premium, Opus Card, and
Vivaa Liner. Coated recycled boards include Eco Natura, Eco Blanca, and Neo White Bliss
Specialty boards.
Poly coated boards include Indobev and Indobarr.
Premium papers: Perma White, Alfa Plus, Hi Brite, and Alfa Zap.
Papers for thin printing: Superfine Printing, Pharma Print, and Bible Development of
the Clones
Along with seeds from native sources, ITC Bhadrachalam's tree breeders also used
seeds from USAID, Hawaii, and the CSIRO in Australia to introduce new germplasm for
selection and improvement.
• Additionally, trees with the best desirable characteristics were chosen from the
nation's plantations. The selection and cloning of more than 1,000 Candidate Plus Trees of
Eucalyptus, 240 Casuarina, and 241 Leucaena took place.
• In Andhra Pradesh, 159 multi-locational clonal trials involving selected plus trees
were conducted under various ago-climatic conditions.
• For bulk multiplication and planting, 107 potential eucalyptus clones, 15 for
casuarina, and 12 for subabul were shortlisted. Research on clonal technology led to
stunning successes that could be seen.

• Clonal plantations' productivity increased from 20 to 58 tonnes per hectare per year,
which is 3–6 times greater than seed route plants‘ 6–10 tonnes per hectare per year.
• In contrast to standard seed route plantations, where the survival rate ranges from 40
to 60%, clonal plantations have a survival rate of more than 95%.

41
• The harvesting time has been shortened from seven years to four or three. Comparing
traditional polyethylene bag nurseries to those using root trainer technology, lower handling
and transportation costs were guaranteed. Extensive field testing across numerous sites was
necessary to choose clones that would develop quickly and be disease resistant. Site-specific
clones (clones for locations with black, red, or alkaline soils) were discovered and made
available to farmers for planting for the first time in Indian forestry.

36 ha of clonal testing sites, 30 ha of clonal multiplication areas, and 24 ha of clonal

demonstration plots make up the infrastructure for growing clonal plants. Also established
was a 3 hectare Clonal Seed Orchard with high yielding clones. An entirely new, cutting-edge
clone production facility with a 15 million plant capacity was recently built. The creation of
10 million eucalyptus production capacities was made possible by the construction of 120
mist chambers over a 12000 square meter area, a 5000 square meter hardening area and a
100,000 square meter open nursery. and 5 million subabul clonal plants, respectively. A
better set of procedures, including land development, wider spacing, ploughing,
intercropping, the use of mychorrhiza, irrigation and fertilization, and the control of pests and
diseases, results in to increase the farmers' chances of survival, growth, and bumper harvests.

ITC Managers offer growers efficient extension services and knowledgeable technical
direction from planting through harvest. Farmers in need are given laboratory and research
support. To address the issues the farmers encounter, regular meetings are held. Farmers are
pleased that they have a guaranteed market with ITC, which offers to buy back plantation
wood at going rates in the market.
One more aspect of the ITC‘s aim is to green up waste areas. By planting ―ITC
Bhadrachalam‖ clones, hilly, rocky, boulder-filled, wet, river islands, and reflective waste
sites have been put to good use.
Over the course of more than two decades, the skyline has changed due to the expansion of
clonal plantations of Eucalyptus, Casuarina, and Subabul that span an area of more than
1,93,000 hectares. As a result of the innovative efforts, farmers, forest agencies, forest
development organizations, and other paper mills all over India have adopted "ITC
Bhadrachalam" clones. The productivity and profitability of pulp wood plantation species
have changed as a result of the widespread adoption and use of clones.

42
Integrated Management System
This organization has integrated the following management systems:

● BRC/IOP Issue3:2008 Global Standard for Packaging and Packaging Products.

● BS OHSAS18001:2007 Occupational Health and Safety Management System
● ISO9001:2008 Quality Management System.
● ISO14001:2004 Environmental Management System.
● 8 Elements of the TPM Methodology

43
 CHAPTER –V
DATA ANALYSIS AND INTERPRETATION

TREND ANALYSIS

TABLE 5.0: Trend Analysis of ITC Paper Boards Limited, Bhadrachalam

(Rs. In Crs.)

Year 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Current Assets 14463.05 17591.47 20928.73 23955.03 24134.74

Trends 100 121.630431 144.7048168 165.629172 166.8717179

Current Liabilities 9126.21 10330.73 11504.32 11681.91 14587.86

Trends 100 113.198469 126.0580241 128.003958 159.8457629

Net Working Capital 5336.84 7260.74 9424.41 12273.12 9546.88

Trends 100 136.049423 176.5915785 229.969795 178.8863822

Source of Data: Annual reports of ITC PAPER BOARDS LTD.

Graph 5.0.1: Trend Analysis of ITC Paper Boards Limited

600

500

400 229.96 178.88

176.59
300 136.04
100 159.84
128
200 126.05
113.19
100
100 165.62 166.87
121.63 144.7
100
0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

current assets current liabilites net working capital

Sources: 5.0
44
Interpretation

In ITC PAPER BOARDS LTD the pace of growth in the indices of current Assets
greater than that of the current liabilities throughout the study period from 2017-2022 under
the observation. The net working capital of the company was decreased in the year 2021-
2022. But the company net working capital had fluctuated very intensively. Overall, the ITC
PAPER BOARDS LTD net working capital condition was not satisfactory in the year 2021-
2022 in the study period.

45
 RATIO ANALYSIS
Table 5.1: Profitability Ratios
Gross Profit Ratio of ITC Paper Boards Limited

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜fi𝑡
Gross profit ratio= × 100
𝑆𝑎𝑙𝑒𝑠

(Rs. in crs.)
Year Gross Profit Sales Ratio
2017-18 16366.63 25999.16 62.95
2018-19 18774.19 30839.97 60.88
2019-20 21189.4 34345.74 61.69
2020-21 23378.57 38050.53 61.44
2021-22 24938.13 38641.13 64.54
Source: Annual Reports of ITC Paper Boards Ltd

Graph No: 5.1.1

Ratio
65

64

63

62

61

60

59
2017-18 2018-19 2019-20 2020-21 2021-22

Sources : Table No: 5.1

46
Interpretation
The gross profit ratio for the year 2017-18 is 62.95 but it was decreased in the year
2018-19 to 60.88 and in the year 2021-22 the ratio was increased to 64.54 from 61.44 in the
year 2020-21. The fluctuations are due to increase in units sold increase in Cost of Goods
Sold. It is observed that gross profit ratio was almost stable in the study period.So the gross
profit ratio is satisfactory.

47
Table – 5.2
Net Profit Ratio of ITC Paper Boards Limited

𝑁𝑒𝑡 𝑃𝑟𝑜fi𝑡
Net profit ratio= × 100
𝑆𝑎𝑙𝑒𝑠

(Rs. In Crs.)
Year Net Profit Sales Ratio
2017-18 6162.37 25999.16 23.70

2018-19 7418.39 30839.97 24.05

2019-20 8785.21 34345.74 25.58

2020-21 9607.73 38050.53 25.25

2021-22 9844.71 38641.13 25.48

Source: Annual Reports of ITC Paper Boards Ltd

Graph: 5.2.1

Ratio

25.58 25.48
26 25.25

25 24.05
23.7
24
23
Ratio
22
2017-18 2018-19 2019-20 2020-21 2021-22

Ratio

Sources: Table No: 5.2

Interpretation

The Net profit ratio for the year 2017-18 is 23.70 and in the year 2021-2022 it is
recorded as 25.48, in the study period it is observed that the firm always met the standard
norm. The minimum net profit ratio is 15 to 20% so the net profit of the firm is not
satisfactory.

48
LIQUIDITY RATIOS

Current Ratio of ITC Paper Boards Limited

Liquidity ratios measure the short-term solvency position of a company.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
Current Ratio = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿i𝑎𝑏i𝑙i𝑡i𝑒𝑠

Table 5.3
(Rs. Crs)

Year Current Assets Current Assets Ratio

2017-18 14443.57 14444.57 1.00

2018-19 17591.47 10330.73 1.70

2019-20 20928.73 11504.32 1.82

2020-21 23955.03 11681.91 2.05

2021-22 24134.74 14587.86 1.65

Source: Annual Reports of ITC Paper Boards Ltd

Graph: 5.3.1

Ratio
2.5

1.5

1 2.05
1.7 1.82
1.65

0.5 1

0
2017-18 2018-19 2019-20 2020-21 2021-22

Sources: Table No: 5.3

49
Interpretation
The current ratio of selected ITC PAPER BOARDS LTD firm show in the above
table. The current ratio showed 2.05 in the year 2020-21 and 1.00 in 2017-18, and showed a
diminishing trend in the year 2017-18.The average of the ratio is 1.64. The ideal current ratio
is 2:1 from the above observation, ITC PAPER BOARDS LTD firm was the norm
satisfactory position in the first 2yearsi.e, 2019-20, and it was not reached the standard norm
in the years I.e.2017-18, 2018-19, 2019-20 & 2021-22.

50
ABSOLUTE LIQUIDITY RATIOOF ITC PAPER BOARDS LIMITED
𝐴𝑏𝑠𝑜𝑙𝑢𝑡𝑒 𝑙i𝑞𝑢i𝑑 𝐴𝑠𝑠𝑒𝑡𝑠
Absolute Liquidity Ratio=
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿i𝑎𝑏i𝑙i𝑡i𝑒𝑠

Table 5.4

(Rs. in crs)

absolute liquid
Year Current liabilities Ratio
Assets

2017-18 2818.93 9101.83 0.31

2018-19 3615 10330.73 0.35

2019-20 3289.37 11504.32 0.29

2020-21 7588.61 11681.91 0.65

2021-22 6563.95 14587.86 0.45

Source: Annual Reports of ITC Paper Boards Ltd

Graph: 5.4.1

Ratio
0.7 0.65

0.6

0.5 0.45

0.4 0.35
0.31 0.29
0.3

0.2

0.1

0
2017-18 2018-19 2019-20 2020-21 2021-22

Sources: Table No: 5.4

51
Interpretation
The absolute ratio of ITC PAPER BOARDS LTD firm shows in the above table. The
absolute liquid ratio showed 0.65 in the year 2020-21, 0.31 in 2012-13, and showed a
diminishing trend in the year 2018-19 and 2019-20 having ratio 0.35 and 0.29 the ratio was
on an average of 0.41.The ideal absolute liquid ratio is 0.75:1 from the above observation; the
ITC PAPER BOARDS LTD firm was nearly reached the norm in the year 2020-2021.And the
firm was not reached the standard norm in the years i.e. 2017-18and 2018-19,2019-20 and
2021-22.

52
QUICK RATIO OF ITC PAPER BOARDS LIMITED
Quick ratio is also known as Acid test ratio, is more rigorous test of liquidity than the
Q𝑢i𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠
current ratio. Quick Ratio=
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿i𝑎𝑏i𝑙i𝑡i𝑒𝑠

Table 5.5
Quick Ratio of ITC Paper Boards Limited
(Rs. in crs)

Year Quick Assets Current liabilities Ratio

2017-18 8805.74 9101.83 0.97

2018-19 10991.27 10330.73 1.06
2019-20 13569.19 11504.32 1.18
2020-21 16118.27 11681.91 1.38
2021-22 15614.92 14587.86 1.07
Source: Annual Reports of ITC Paper Boards Ltd

Graph: 5.5.1
Quick Ratio of ITC Paper Boards Limited

Ratio
1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2017-18 2018-19 2019-20 2020-21 2021-22

Sources: Table No: 5.5

53
Interpretation
The quick ratio of selected ITC PAPER BOARDS LTD company Ltd show in the
above table. The liquid ratio showed 1.38in the year 2020-21.0.97 in 2017-18, and showed a
diminishing trend in the year 2020-21 and 2021-22 having ratio 1.38and 1.07.The ideal
current ratio is 1:1 from the above observation, ITC PAPER BOARDS LTD firm waste norm
satisfied position in last 4 years study period. The firm was unable to reach the standard norm
in the year 2017-2018.

54
DEBTORS TURNOVER RATIO OF ITC PAPER BOARDS LIMITED
𝑆𝐴𝐿𝐸𝑆
Debtors turnover ratio=
𝐷𝐸𝐵𝑇0𝑅𝑆
Table – 5.6
Debtors Turnover Ratio of ITC Paper Boards Limited
(Rs. In Crs.)
Year Sales Debtors Ratio

2017-18 25999.16 982.37 26.47

2018-19 30839.97 1163.34 26.51

2019-20 34345.74 2165.36 15.86

2020-21 38050.53 1722.4 22.09

2021-22 38641.13 1686.35 22.91

Source: Annual Reports of ITC Paper Boards Ltd

Graph 5.6.1
Debtors Turnover Ratio of ITC Paper Boards Limited

Ratio
30
26.47 26.51
25 22.91
22.09

20
15.86
15

10

0
2017-18 2018-19 2019-20 2020-21 2021-22

Sources: Table No : 5.6

55
Interpretation
This turnover ratio indicates the efficiency of firm‘s credit collection and efficiency of
credit policy. This ratio was measures the quality of receivables that is debtors. It enables a
firm to judge the adequacy of the liquidity position of a concern. This ratio highlights the
probability of bad debts lurking in the trade debtors. The above table 5.27 shows the debtors
turnover ratio of ITC PAPER BOARDS LTD from 2017-18 to 2021-22. The trend of the ratio
of the above said company was fluctuating during the study period. The highest value of the
ratio was26.51 in the years of 2018-19 and the lowest value of the ratio was 15.86 % in the
year 2019-20. In that Debtors turnover ratio was not satisfactory because of the Dr‘s turnover
ratio ideal is 5 times

56
Total Assets Turnover Ratio of ITC Paper Boards Limited

𝑆𝐴𝐿𝐸𝑆
Total Assets turnover ratio =
𝑇0𝑇𝐴𝐿𝐴𝑆𝑆𝐸𝑇𝑆

Table 5.7
Total Assets Turnover Ratio of ITC Paper Boards Limited
(Rs. In Crs.)

Year Sales Total Assets Ratio

2017-18 25999.16 28988.2 0.90

2018-19 30839.97 34017.43 0.91

2019-20 34345.74 39229.39 0.88

2020-21 38050.53 44195.66 0.86

2021-22 38641.13 49518.43 0.78

Source: Annual Reports of ITC Paper Boards Ltd

Graph: 5.7.1
Total Assets Turnover Ratio of ITC Paper Boards Limited

Ratio
0.95

0.9

0.85

0.8

0.75

0.7
2017-18 2018-19 2019-20 2020-21 2021-22

Sources: Table No: 5.7

57
Interpretation
The Total Assets turnover ratio for the year 2017-18 is 0.90 but it was increased in
the year 2018-19 is 0.91 and in the year 2019-20 the ratio is decreased 0.88 in the year 2021-
22 the ratio is decreased from 0.86 to 0.78,It can be concluded that the management is
inefficient in converting the Assets in to cash. The ideal ratio is total Assets turnover ratio of
5 from the above observation. The ITC PAPER BOARDS LTD firm was not fulfilling the
standard norm in year overall study period.

58
FIXED ASSETS TURNOVER RATIO OF ITC PAPER BOARDS LIMITED
𝑆𝐴𝐿𝐸𝑆
Fixed Assets turnover ratio =
𝐹𝐼K𝐸𝐷𝐴𝑆𝑆𝐸𝑇𝑆

Table 5.8
Fixed Assets Turnover Ratio of ITC Paper Boards Limited
( Rs . In Crs)
Year Sales Fixed Assets Ratio

2017-18 2.29
25999.16 11375.94
2018-19 30839.97 2.43
12697.13
2019-20 2.40
34345.74 14308.47
2020-21 2.34
38050.53 16292.63
2021-22 16705.36 2.31
38641.13
Source: Annual Reports of ITC Paper Boards Ltd

Graph: 5.8.1
Fixed Assets Turnover Ratio of ITC Paper Boards Limited

Ratio
2.45

2.4

2.35

2.3

2.25

2.2
2017-18 2018-19 2019-20 2020-21 2021-22

Sources: Table No: 5.8

59
Interpretation
It may be observed from the table 5.29 that the fixed assets turnover ratio of ITC Paper
Boards Limited had fluctuated through the period of study from 2017-18 to 2019-20. The
highest ratio was 2.43 showed in the year 2018-2019 and the lowest ratio was 2.29 in 2017-
18. There was a fluctuating trend throughout the study period. It is held at stabled position.

60
 CHAPTER – VI
FINDINGS
● During the study period the sales performance shows the good sign in ITC
Paperboards Ltd
● It is observed that short term borrowings are slightly reduced in the financial year
2017-2018
● Tangible fixed assets have increased during the year 2017-2018, and intangible assets
are decreased slightly during the financial year 2017-2018
● Profit after tax records 20 percent growth during the year 2018-2019
● During financial year 2018-2019 profit after tax raise by 18%
● Financial expenditure is reduced by 83.52% during the financial year 2018-2019
● Total fixed assets are increased to 14308.47 during financial year 2019-2020
● Cost of goods sold shows a negative change during the financial year 2021-2022

61
 SUGGESTIONS

● It is advised that the company should take some necessary steps for increasing the
sales performance of the company
● Company‘s fixed assets, especially intangible assets show decreasing trend the
company should concentrate on the intangible assets decrease
● It is suggested to postpone the capital expenditure which are not urgent
● To improve cash management with proper planning to know inflows and outflows
with more certainty for better decision making.
● To increase sales revenues by adopting better methods of price negotiations
● The company management should take some necessary steps for meeting absolute
liquidity ratio
● The gross profit ratio should be increased through reducing the manufacturing
expenses.
● It can be suggested to take remedial measures to increase the net profit ratio such that
it leads in increasing the company’s performance.

62
 CONCLUSION

I have done my project in ―ITC PAPER BOARDS LTD, BHADRACHALAM‖ I have

made an analysis of the overall financial position of the company. My focus of attention was
in the areas of financial performance, and analysis of receivables and cash management.
Through the analysis, I observed some findings and for which I have made a few suggestions
which will help the company for the maintenance of adequate financial position in the
company to make progress in its activities and thus reach its goal.

63
 BIBLIOGRAPHY

● G. SudershanReddy - Financial Management – Himalaya Publishing House.

● I.M. Panday – Financial Management – Vikas Publication
● S.P. Jain & K.L. Narang –Financial Accounting – Kalyani Publishers
● Prasanna Chandra - Financial Management – Tata McGraw Hill
● M.Y.Khan & P.K. Jain – Financial Management - Tata McGill‘s Publication
● Technical Analysis of the Financial Markets –JHON.J.MURPHY
● Annual Report of ITC PAPER BOARDS LTD

WEBSITES :
www.google.com
www.wikipedia.com
http://www.itcportal.com/default.aspx
http://www.itcportal.com/about-itc/shareholder-value/report-and-accounts.aspx

64
 Programme Outcomes – MBA Programme

S.No. Programme Outcomes Project

Apply knowledge of management theories and practices to solve business
1
Problems 

2 Foster Analytical and critical thinking abilities for data-based decision making. -

3 Ability to develop Value based Leadership ability -

Ability to understand, analyze and communicate global, economic, legal, and
4
ethical aspects of business. 
Ability to lead themselves and others in the achievement of
5 
organizational goals, contributing effectively to a team environment.

Ability to develop strong foundation in functional areas like

6 
Finance, Marketing, HR, Operations, Systems & Quantitative
Techniques
7 An ability to communicate effectively both verbal and non-verbal 
An ability to keep abreast the latest developments in the management
8 education principles and practices for sustained vitality of the Industry -
and enhance Entrepreneurial spirit skills.
Mohan
ORIGINALITY REPORT

22 %
SIMILARITY INDEX
17%
INTERNET SOURCES
1%
PUBLICATIONS
15%
STUDENT PAPERS

PRIMARY SOURCES

1
www.slideshare.net
Internet Source 2%
2
pdfcoffee.com
Internet Source 1%
3
www.itcgreenpapers.com
Internet Source 1%
4
Submitted to Intercollege
Student Paper 1%
5
www.coursehero.com
Internet Source 1%
6
Submitted to Indian Institute of Foreign Trade
Student Paper 1%
7
iosrjournals.org
Internet Source 1%
8
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