Meneta (Project) Final

SUMMER TRAINING PROJECT REPORT
ON
“STUDY OF FINANCIAL POSTION”
AT
“MENETA AUTOMOTIVE COMPONENT PVT.

LTD.”
Submitted for the

Partial Fulfillment of Requirement for the
Award of
Bachelor of Business Administration Degree
(2010-2013)
Under The Guidance Of: Submitted By:

Miss. HEMA PRIYANSHI
Class: BBA (5th Sem.)
E n ro l l m e n t N o . -
13221501710
"Chandra Prabhu Jain College Of Higher Studies"

MENETA AUTOMOTIVE COMPONENT PVT. LTD
(Narela Delhi-110040)
STUDENT UNDERTAKING
T h i s i s t o c e r t i f y t h a t I h a v e c o m p l e t e d t h e S u m m e r Tr a i n i n g
P r o j e c t t i t l e d “ F i n a n c i a l A n a l y s i s ” i n “ M E N E TA A U TO M O T I V E
C O M P O N E N T P V T. LT D . ” u n d e r t h e g u i d a n c e o f “ M i s s . H E M A ”
in the partial fulfillment of the requirement for the award of
degree of Bachelor of Business Administration at Chandra
Prabhu Jain College Of Higher Studies , Delhi. This is an
original piece of work & I have not submitted it earlier
elsewhere.
PRIYANSHI
Name of the student
2
CERTIFICATE
T h i s i s t o c e r t i f y t h a t t h e S u m m e r Tr a i n i n g P r o j e c t t i t l e d
“ F i n a n c i a l A n a l y s i s ” i s a n a c a d e m i c w o r k d o n e b y “ P R I YA N S H I ”
submitted in the partial fulfillment of the requirement for the
award of the degree of Bachelor Of Business Administration from
Chandra Prabhu Jain College Of Higher Studies , Delhi, under
t h e g u i d a n c e & d i r e c t i o n . To t h e b e s t o f m y k n o w l e d g e a n d b e l i e f
the data is presented by him/her in the project has not been
s u b m i t t e d e a r l i e r.
Miss. HEMA
Name of the Project Guide
3
EXECUTIVE SUMMARY
The highly dynamic world of business today demands much
m o r e t h a n t h e o r e t i c a l k n o w l e d g e a n d t o a c h i e v e e ff e c t i v e r e s u l t s , t h e
c l a s s r o o m l e a r n i n g n e e d s t o b e e ff e c t i v e l y w e d d e d t o t h e r e a l i t i e s
of practical situation.
T h e r e f o r e , I o p t e d t o d o a p r o j e c t i n f i n a n c e . T h e p r o j e c t i s “ To
study Financial Position of M E N E TA A U TO M O T I V E
C O M P O N E N T P V T. LT D ” I w a s p l a c e d u n d e r t h e s u p r e m e g u i d a n c e
of Mr. PARVEEN GARG (Deputy General Manager in Finance
D e p a r t m e n t ) o f M E N E TA A U TO M O T I V E C O M P O N E N T P V T. LT D
After a detailed interaction, I was made to understand the
functioning of the department and also various systems utilized.
To p r e p a r e t h i s r e p o r t , I t o o k a s s i s t a n c e f r o m v a r i o u s r e c o r d s
w i t h i n t h e c o m p a n y f o r t h e p e r i o d f r o m 5 t h J u n e , 2 0 1 2 t o 3 1 t h J U LY,
2012.
Tr e n d i n o p e r a t i n g c y c l e h a s b e e n u s e d t o e s t i m a t e t h e
r e q u i r e m e n t o f Wo r k i n g C a p i t a l .
L a s t l y, performance evaluation was done to know how

e ff e c t i v e l y a n d e ff i c i e n t l y f u n d s , w o r k i n g c a p i t a l a n d c u r r e n t a s s e t s
have been managed and controlled.
4
TABLE OF CONTENTS
CHAPTER PAGE
No. PA RT I C U L A R S No.
CHAPTER-1 I n t ro d u c t i o n a n d O b j e c t i v e s
CHAPTER-2 L i t e r a t u re R e v i e w
CHAPTER-3 C o m p a n y P ro f i l e
 Name Of The Company
 Location & Address
 Ty p e O f I n d u s t r y
 Original Setup
 Product & Services
 A n n u a l Tu r n o v e r
 No. Of Employees
 M a n a g e m e n t Te a m
 Subsidiaries Companies
CHAPTER-4 R e s e a rc h M e t h o d o l o g y
 Objective of Study
 Research
 Research Problem.
 Research Design
5
 Ty p e s o f R e s e a r c h D e s i g n .
 Ty p e s o f D a t a C o l l e c t i o n
 Conceptualization

Focus of problem
CHAPTER PAGE
No. PA RT I C U L A R S No.
CHAPTER-5 Findings and Analysis
CHAPTER-6 Limitations
CHAPTER-7 Conclusion and Suggestions
Bibliography
6
CHAPTER-1
INTRODUCTION
AND
OBJECTIVES
Introduction To Automobile Industry
7
Automobile Industry History : In the year 1769, a French engineer by the name
of Nicolas J. Cugnot invented the first automobile to run on roads. This
automobile, in fact, was a self-powered, three-wheeled, military tractor . The range
of the automobile, however, was very brief and at the most, it could only run at a
stretch for fifteen minutes. In addition, these automobiles were not fit for the roads
as the steam engines made them very heavy and large, and required ample starting
time. Oliver Evans was the first to design a steam driven automobile in the U.S.
A Scotsman, Robert Anderson, was the first to invent an electric carriage between
1832 and 1839. However, Thomas Davenport of the U.S.A. and Scotsman Robert
Davidson were amongst the first to invent more applicable automobiles, making
use of non-rechargeable electric batteries in 1842. Development of roads made
traveling comfortable and as a result, the short ranged, electric battery driven were
no more the best option for traveling over longer distances. The Automobile
Industry finally came of age with Henry Ford in 1914 for the bulk production of
cars. This lead to the development of the industry and it first begun in the of his
car factory. The several methods adopted by Ford, made the new invention (that is,
the car) popular amongst the rich as well as the masses.
According the History of Automobile Industry US, dominated the automobile

markets around the globe with no notable competitors. However, after the end of
the Second World War in 1945, the Automobile Industry of other technologically
advanced nations such as Japan and certain European nations gained momentum
and within a very short period, beginning in the early 1980s, the U.S was flooded
with foreign automobile companies, especially those of Japan and Germany.
The current trends of the Global Automobile Industry reveal that in the developed
countries the Automobile Industries are stagnating as a result of the drooping ,
whereas the Automobile Industry in the developing nations, such as, India and
Brazil, have been consistently registering higher growth rates every passing year
for their flourishing domestic automobile markets.credit for the first ever 'designed'
automobile is shared. But, careful consideration of the records enables a realization
that surpasses the names and designs. The sheer genius of the involvement is
fabulous. In 1769, Nicolas-Joseph Cugnot built the first self-propelled vehicle that
was mechanized. The idea rooted, witnessed a number of subsequent efforts made
towards taking the unstable three-wheeler a step further. Ferdinand Verbiest
designed the first vehicle that was steam-powered, in 1672. However, this toy for
the Chinese Emperor was in fact the first auto (self propelled) mobile (vehicle)!
Richard Trevithick is credited with the first road worthy locomotive, designed in
the year 1801.
8
The shortcomings of the steam-powered vehicle paved the way for contemporaries
and successors to back up the body with a motor that could sustain the required
steam pressure and be put to more practical use, than a way to spotlight an
expensive indulgence. In the 1780s, in Russia, Ivan Kulibin came up with a
pedaled carriage having, at that time, modern features like a gear box and brake-
system. In 1806, François Isaac de Rivaz of Switzerland designed the first
automobile fitted with an engine that worked on internal combustion. The fuel was
a mix of hydrogen and Immediately after that, in what can be described as an
automobile design boom, inventors like Samuel Brown and Etienne Lenoir came
up with similarly propelled answers to the carriages and carts.
In the year 1881, Gustave Trouvé of France, developed and exhibited a three-
wheeled automobile that was powered by man's greatest discovery then. The
exhibition at the International Exhibition of Electricity in Paris resulted in many
like minded innovators designing and experimenting with self-propelled vehicles.
German engineers applied full gusto dealing with the issues related to design or
working of the vehicles. While the likes of Gottlieb Daimler and Maybach battled
design and road-worthiness, Karl Benz came up with the ancestor of our modern
day automobile.
In 1886, Karl Benz was granted a patent for his automobile designed to work on a
four-stroke cycle engine driven by gasoline. He founded Benz & Cie. in 1883 and
subsequently kept adding to components and technological add-ons. The vehicles
hit the market in 1888 and found a number of patrons. The inventions and
glamorizing of the vehicles resulted in the need for large-scale production. Line
manufacturing or production was adopted first in 1902, by Ransom Olds. The idea
flourished under the supervision of ambitious . What started with one car in every
12 and a half hours, reached the zenith with a 15 minute production line!
Today, the cars we use and race are aptly fitted with intricate safety procedures and
state-of-the-art automotive technology. The designs have come a long way and
have adapted to environmental changes, when and as, accommodating even, to
raise and maintain the standard of living and quality of personal transportation
9
CHAPTER-2
LITERATURE REVIEW
10
REVIEW OF EXISTING LITERATURE
SOURCE: DEVICES USED BY FINANCIAL

A N A LY S T
Thus various techniques, which are used by financial

analyst for doing analysis, work. Thus, he sees various trends,
making comparative statements, and comparative income
statement so as to draw information.
 SOURCE: IMPORTANCE OF HAVING
K N O W L E D G E F O R P R O S P E C T I V E I N V E S TO R
Thus, the information of finance is of very much importance
for investor & various other parties as well. For an investor
w h a t t h i n g s r e a l l y m a t t e r s i s t h e c o m p a n y ’s f i n a n c i a l p o s i t i o n ,
credit worthiness in the market , dividend distribution policy &
various other disclosures which are necessary to take decisions
for subscription of shares of Company .
11
 S O U R C E : STUDY OF FINANCE FOR DECISION

MAKING
Study of financial statements is useful for decision making
for management as well as common man because a lot of
decisions regarding future plans depends on the figures of profit
& loss a/c & balance sheet etc. moreover the decisions of
investors too depend on these statements.
M r. PA RV E E N G A R G ( D G M F i n a n c e ) w o r k e d o v e r t h e f i n a l
accounts of Meneta Automotive Component Pvt. Ltd.
Accounts of Meneta Automotive Components Pvt. Ltd. are
audited by Haribhakti & co. of Chartered Accountants.
12
CHAPTER-3
COMPANY PROFILE
13
COMPANY PROFILE
Name Of The Company - M E N E TA A U T O M O T I V E C O M P O N E N T P V T.

LT D .
Location & Address – village Hasambad,
P. O . B a h a l g a r h , D i s t r i c t S o n i p a t
(Haryana)
Ty p e O f I n d u s t r y - Manufacturing
Original Setup - Meneta A/S
Kirkegyden 52
DK-5270 Odense N
Denmark
Products & services- Backing Plates/Shims
A n n u a l Tu r n o v e r - Rs. 12,000,000
No. Of Employees - 650
Future Plans - Setting up new unit in Kundli,
Haryana
14
About MENETA AUTOMOTIVE COMPONENT

PVT. LTD
1. Meneta A/S was established in 1953, and is today a

manufacturer of damping shim materials and backing plates
from plants in Denmark and India. Meneta has specialized in
development, test and production of anti-noise shims and
backing plates for manufacturers of disc brake linings for the
automotive industry – both for OE and the aftermarket. Our
customers consider us a highly qualified manufacturer and
p a r t n e r. P r o f e s s i o n a l c o n s u l t i n g o n t h e r i g h t c h o i c e o f p r o d u c t s
f o r m a n e s s e n t i a l p a r t o f t h e c o m p a n y ’s t o t a l s e r v i c e s t o
c u s t o m e r s . M e n e t a ' s m o s t i m p o r t a n t r e s o u r c e i s i t s s t a ff , t h e i r
k n o w - h o w, m o t i v a t i o n a n d c o m m i t m e n t w h i c h c o n t r i b u t e s t o
promoting the development and production of new products
with a high utility value and in a high quality - all being of
great benefit to our customers. Meneta focus consistently on
15
optimizing our products to meet the manufacturers’ demands on

e ff i c i e n c y, r e l i a b i l i t y, a n d i n n o v a t i o n . T h e q u a l i t y i s a p r i m a r y
issue why we are constantly focusing on design, choice of
materials and methods of production. Meneta is a worldwide
o rg a n i z a t i o n with production and sales departments in
countries such as India, China, the US, Germany and Denmark.
M e n e t a ’s p r o d u c t s a r e m a n u f a c t u r e d b a s e d o n m a n y y e a r s o f
development and testing. Anti-noise shims are produced in a
high quality damping material which meets individual
r e q u i r e m e n t s f o r i n s u l a t i o n , c o m p r e s s i b i l i t y, a n d c o l d n o i s e
d a m p i n g a b i l i t y. B a c k i n g p l a t e s – m a n u f a c t u r e d i n s t e e l –
comply with the stringent requirements for the OEM and OES
market. Wi t h top technology and equipment and modern
p r o d u c t i o n f a c i l i t i e s w e o ff e r p u n c h e d b a c k i n g p l a t e s a n d s h i m s
with a pressure of up to 630 tons. Fine blanking is a specially
developed production method within punching.
Production equipment from competitor
Meneta has bought the production equipment from an English

competitor – the main part of which shall be moved to our
f a c t o r y i n O d e n s e i n D e n m a r k . We p l a n t h u s t o e x p a n d o u r
production of back plates till a capacity of about 100 mio. back
plates.
16
Second subsidiary in India

Meneta celebrated the Grand Opening of its second subsidiary, Meneta
Automotive Components Private Limited, in Delhi, India. The company produces
back plates and shims to be sold locally in India and to the US market. We expect
to reach a capacity of about 50 mio. back plates and 100 mio. shims at the end of
this year. The automotive industry in Asia is in strong growth why we consider it of
great importance to set up a company in just this area. Meneta expects much from
its Indian subsidiary. Staff is being educated and production is run in. The company
employs today approx. 500 persons, most of them locals.
MENETA was established in Odense in 1953. In 2003, the company became
part of the M.A.T. Group. MENETA INDIA is a 100% E.O.U. having a
manufacturing plant with its own Design and Tool Room facility located at
Sonepat Haryana. The company manufactures sheet-metal parts.
MENETA INDIA ,a member of the M.A.T. Group, has specialized in advanced
shims technology systems for use in disc brake systems as well as manufacture of
steel backing plates for disc brake linings. Our products are supplied to all
important manufacturers of disc brake systems. For its plant at Sonepat we require
following specialized personnel-
Contact Details
Company Name: Meneta Automotive components pvt. Ltd.
Website: http://www.menetaindia.com
Executive Name: Mr. Rakesh Sinha
Address: Meneta Automotive components pvt. Ltd.
Village Hasamabad P.O Bahalgarh
India
Email: Address:rsinha@menetaindia.com
Telephone:91-00-9215889616
17
PRODUCTS FROM M E N E TA A U TO M O T I V E COMPONENT

P V T. LT D
Backing plates Small
Backing Plates
18
Shims
Shims
19
Heads Of Different Departments & contact details
Area Name Phone E-mail

Managing Mr. Shachindra +91 8053559999 shachindra.tiwari@matholdingsinc.co
Director Tiwari m
Sr. General Mr. Sandeep Sharma +91 8053889999 sandeepsharma@matholdingsinc.com
Manager
Finance & Mr. Praveen Garg +91 8053927777 praveen.garg@matholdingsinc.com
Accounts
Production Mr. Sanjay Yadav +91 8053926666 sanjay.yadav@matholdingsinc.com
Purchase & Mr. Sanjay Goyal +91 8053923333 sanjay.goyal@matholdingsinc.com
Logistics
Tool Room Mr. Rajender Singh +91 8053921111 rajender.singh@matholdingsinc.com
Designing Mr. Mahendra Singh +91 8053915514 mahendra.singh@matholdingsinc.com
Quality Mr. Sukhdeep Mor +91 8053912507 sukhdeep.mor@matholdingsinc.com
Assurance
HR Mr. Rakesh Sinha +91 8053912504 rakesh.sinha@matholdingsinc.com
IT Mr. Jitender Thakur +91 8053912575 jitender.thakur@matholdingsinc.com
20
Management Team Of Meneta Group Of Industries
Management
Managing Director of Meneta

Johnny +45 63188910
& MAST jha@meneta.dk
Haakonsson +45 40189509
Chairman of Meneta India
Assistant Managing +45 63188914

Jens Fredskov jfr@meneta.dk
Director of Meneta +45 61209758
Assistant Managing Director +45 63188936

Finn Blomstrøm fbl@meneta.dk
of MAST +45 21642389
+91 1306 4520

Managing Director of Meneta Shachindra 13 stiwari@menetai
India Tiwari +91 9810 1227 ndia.com
56
+45 63188943
Finance Director Ole Thanning oth@meneta.dk
+45 23286231
21
Proj +45 63188929

Ole Magaard oma@meneta.dk
ct Manager India China +45 20329919
Technical Sales Office
+1 847 383
8442
Project Manager, US Dan Zylstra dzy@meneta.dk
+1 574 309
0384
+49 2651 5013

Technical Account 54
Bernhard Holl bho@meneta.dk
Manager, EU +49 1737 275
836
+45 63188917
Sales Development
Lun Bao +86 138 1660 lba@meneta.dk
Manager, China
6477
Meneta Backing Plates
+45 63188916
Sales Department Paul Bengtsson pbe@meneta.dk
+45 40860036
+45 63188920
Purchase Karsten Stentved ksr@meneta.dk
+45 40813093
+45 63188928
Quality Assurance Carsten Pedersen cfp@meneta.dk
+45 21222128
22
Klaus Back +45 63188931

Production Manager kbp@meneta.dk
Pedersen +45 40870100
Head of Customer
Rikke Holm Pedersen +45 63188944 rhp@meneta.dk
Service
Production Planner
+45 63188952
Meneta Michael Damgaard mgd@meneta.dk
+45 61225745
Customer Service
Meneta Advanced Shims Technology
+45 63188954
Sales Manager Christian Broe Skov cbs@meneta.dk
+45 25362661
Sales Department Jan Dirksen +45 63188919 jmd@meneta.dk
+45 63188951
R & D Manager Jens Thuesen jtu@meneta.dk
+45 22620193
+45 63188935
Production Manager Erik Pedersen epe@meneta.dk
+45 61225791
Subsidiaries Of Meneta Group Of Co.
23
Roulunds Braking
America/GRI Engine
625 Barclay Boulevard
Lincolnshire, Illinois 60069
USA
p: 1 847 821 9630
e: info@roulunds-braking.com
Meneta A/S
Kirkegyden 52
DK-5270 Odense N
Denmark
p: +45 66 18 89 34
f: +45 66 18 78 05
e: men@meneta.dk
Affinia MAT India Braking Pv t . Ltd

Works :-
Village : Rewli , P.O. Murthal
Sonepat ,Haryana-131027
INDIA
Telephone : +91- 0130 -4004901
24
European Market Company:

Roulunds Braking ApS
Hestehaven 55
5260 Odense S
Denmark
Tlf.: +45 63 134700
Fax: +45 63 134701
e: rbdk@roulunds-braking.dk
Roulunds Braking (France) SA

B.P. 28, Z.I. D'Angean
60240 Chaumont-en Vexin
France
Tel.: +33 3 4449 4700
Fax: +33 3 4449 4780
e: rbf@roulunds-braking.fr
Roulunds Braking (India) PVT LTD

Livaspur, P.O. Bahalgarh
Sonepat
Haryana – 131021
India
Tel.: +91 (130) 2381163
Fax: +91 (130) 2381193
e: roulundsbraking@vsnl.net
25
Roulunds Braking (Shanghai) Co. Ltd.

No. 305, Gongyue Road
Baoshan District
Shanghai
China
Tel.: +86 21 56391600
Fax: +86 21 56391603
Products from Roulunds Braking (India) PVT LTD
Brake Pads
With a production of around 100 million pieces per year, ROULUNDS BRAKING cover most
of the vehicle applications in Europe. With supplies to OEM, OES and AM, ROULUNDS
BRAKING guarantee you the highest level of quality and delivery performance.
Constant research and development from our R&D department has resulted in over 20 different
frictions materials being tailored across its range of brake pads.
All ROULUNDS BRAKING pads are designed to be compatible with the performance levels of
original equipment parts. Our commitment is to maintain the highest standards of braking
performance.
ROULUNDS BRAKING brake pad range is now over 1000 references, which gives an
excellent coverage of the European vehicle park. This range is constantly being expanded.
ROULUNDS BRAKING brake pads are all asbestos free, lead free and Cr6+ free, and for the
OE and OES, ROULUNDS BRAKING also offer a wide range of antimony, lead and cadmium
free materials.
All ROULUNDS BRAKING pads meet all official regulations for quality and safety, and the
product range complies with European Regulation 90 or ABE, where legally required.
ROULUNDS BRAKING pads are produced with an underlayer material. It is designed to
dampen vibrations which can cause noise, help prevent heat transfer to the brake fluid, and
ensure a higher bonding strength with the back plate.
26
SS
Brake Shoes
With a production of around 8 million pieces per year, ROULUNDS BRAKING cover most of
the vehicle applications in Europe. With supplies to OEM, OES and AM, ROULUNDS
BRAKING guarantee you the highest level of quality and delivery performance.
Constant research and development from our R&D department has resulted in several different
frictions materials tailored across its range of brake shoes.
All ROULUNDS BRAKING shoes are designed to be compatible with the performance levels
of original equipment parts. Our commitment is to maintain the highest standards of braking
performance.
ROULUNDS BRAKING brake shoe range is now covering over 500 references, this gives an
excellent coverage of the European vehicle park. The range is constantly being expanded.
ROULUNDS BRAKING brake shoes are all asbestos free, antimony, lead free and Cr6+ free.
All ROULUNDS BRAKING shoes meet all official regulations for quality and safety, and the
product range complies with European Regulation 90 or ABE, where legally required.
27
Brake Discs
ROULUNDS BRAKING brake discs are designed to satisfy the requirements of original
equipment (OE) parts.
ROULUNDS BRAKING brake discs are produced using a CNC manufacturing process, which
ensures adherence to extremely tight tolerances and guarantees parallelism and run out.
ROULUNDS BRAKING brake discs are under constant control throughout the production
process, and together with the design specifications these products match OE quality and
performance.
Brake Kits
ROULUNDS BRAKING has a range of over 400 classic brake kits, and the range is constantly
being expanded.
The advantage of using ROULUNDS BRAKING brake kits are that you get all the parts pre-
assembled, which enables a quick and easy low cost repair, saving on expensive garage costs.
28
ROULUNDS BRAKING brake kits are extensively tested to insure long life and minimum
maintenance.
All ROULUNDS BRAKING brake kits meet all official regulations for quality and safety, and
the product range complies with European Regulation 90 where legally required.
Brake Linings
ROULUNDS BRAKING flexible state of the art brake linings are designed and developed to
have an excellent braking performance, and this coupled with the extreme flexibility to bond to
every shoe diameter that is necessary means we can supply all our customers needs.
ROULUNDS BRAKING flexible brake linings are produced using CNC manufacturing
processes which ensure adherence to tight tolerances.
ROULUNDS BRAKING flexible brake linings are under constant control within the production
processes and this combined with the high quality specifications of the lining, produces a
constant and excellent performing material.
Constant research and development from our R&D department has resulted in several flexible
brake linings materials tailored across its range of brake shoes.
ROULUNDS BRAKING flexible brake linings are all asbestos free, lead free and Cr6+ free,
with the added benefit of being free of antimony, lead and cadmium.
All ROULUNDS BRAKING flexible brake linings meet all official regulations for quality and
safety, and our product range complies with European Regulation 90 or ABE where legally
required.
29
R&D
ROULUNDS BRAKING R & D department has the target of developing excellent friction
materials to satisfy our customers’ needs. We achieve this by constantly researching, developing
and testing new friction material formula's.
FORMULATION
All new raw materials used in ROULUNDS BRAKING friction material formula's are analyzed
in our own fully equipped quality laboratory with for example, an atomic absorption device.
After being analyzed in the laboratory the raw materials are combined in our Pilot Plant, where
we have several mixing methods and several pressing methods to optimize the formulation.
TESTING
ROULUNDS BRAKING are using various test methods for development. ROULUNDS
BRAKING has 5 dynamo-meters for friction testing and through our sister company MENETA
we have 3 noise test rigs. After dynotesting our friction materials are mounted on a vehicle.
Testing is carried out in various locations and several test tracks in Europe and North America,
including the Stelvio, Grossglockner and Mojacar. After our rigorous testing program is
completed, the friction materials are released and approved by the customer, ready for
production.
30
CHAPTER-4
RESEARCH
METHODOLOGY
31
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY is a way to systematically

solve the research problem. In it, systematic methods are
followed to solve a particular problem. It may be understood as a
s c i e n c e o f s t u d y i n g h o w r e s e a r c h i s d o n e s y s t e m a t i c a l l y. I n f a c t ,
research is an art of scientific investigation .
The procedure adopted for conducting the research requires

a l o t o f a t t e n t i o n a s i t h a s d i r e c t b e a r i n g o n a c c u r a c y, r e l i a b i l i t y
and adequacy of results obtained. It is due to this reason that
r e s e a r c h m e t h o d o l o g y, w h i c h w e u s e d a t t h e t i m e o f c o n d u c t i n g
the research, needs to be elaborated upon Research methodology
is a way to systematically study and solve the research
problems. .
R e s e a rc h M e t h o d o l o g y i n c l u d e s :
 Research
 Research Problem.
 Research Design.
 Ty p e s o f R e s e a r c h D e s i g n
 Ty p e s o f D a t a C o l l e c t i o n
 Review of Existing Literature
 Conceptualization
 Objective of the Study
 Focus of Problem
32
RESEARCH
“Research is Search for Knowledge”

OR
“Research is Systematic Efforts to Gain Knowledge.”
RESEARCH PROBLEM
The first step while conducting research is careful definition

of Research Problem as a very good saying is there, “A well
d e f i n e d p ro b l e m i s h a l f s o l v e d ” T h e p r e s e n t p r o j e c t h a s b e e n
undertaken to do is the Analysis and Interpretation of Financial
Statements at Meneta Automotive Component Pvt. Ltd.
RESEARCH DESIGN
“A Research Design is the framework or plan for a study which is

used as a guide in collecting and analyzing the data collected.”
I t i s t h e b l u e p r i n t t h a t i s f o l l o w e d i n c o m p l e t i n g t h e s t u d y.
The basic objective of research cannot be attained without a
proper research design. It specifies the methods and procedures
for acquiring the information needed to conduct the research
e ff e c t i v e l y. I t i s t h e o v e r a l l o p e r a t i o n a l p a t t e r n o f t h e p r o j e c t
that stipulates what information needs to be collected from
which sources and by what methods.
33
TYPES OF RESEARCH DESIGN
TYPES OF RESEARCH
DESIGN
EXPLORATORY DESCRIPTIVE
RESEARCH DESIGN RESEARCH DESIGN
DIAGNOSTIC EXPERIMENTAL
RESEARCH DESIGN RESEARCH DESIGN
 Exploratory:
In it, the problem is formulated for precise investigation and
working hypothesis is developed .
 Diagnostic:
I n t h i s , t h o s e f r e q u e n c i e s a r e d e t e r m i n e d w i t h which s o m e t h i n g
occurs or its association with something else.
 Experimental:
In it, casual relationships between variables are tested. It is
a l s o k n o w n a s H y p o t h e s i s Te s t i n g R e s e a r c h D e s i g n .
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 Descriptive:
In this, those studies are taken which are concerned with
describing the characteristics of particular individual or a
group.
The present project is Descriptive in nature.
The purpose of descriptive research design is in descriptive

state. The main characteristic is that the research has no control
over the variables; he can only report what has happened or what is
happening.
T Y P E S O F D ATA C O L L E C T I O N
The success of research depends up to some extent upon the

method of data collection used. As the data collected is to the base
of what we plan to find out, the relevant care should be taken that
the errors in methods of collection of data involvement come to
a ff e c t t h e r e l i a b i l i t y o f d a t a c o l l e c t e d .
It includes both primary data and secondary data.
 P R I M A RY D ATA :
T h e p r i m a r y s o u r c e s i n c l u d e t h e s u r v e y, q u e s t i o n n a i r e m e t h o d ,
telephonic interviews as well as the personal interview of the
data collection.
I n t h i s p r o j e c t I h a v e u s e d I n t e r v i e w w i t h t h e o ff i c i a l s o f t h e
company and Discussion was also done with the authorities.
35
 S E C O N D A RY D ATA :
The secondary data include books, the internet, company
brouchers etc.
I n t h i s p r o j e c t I h a v e u s e d c o m p a n y ’s t r a n s a c t i o n s , j o u r n a l s ,
l e d g e r, annual reports, website of Meneta Automotive
Component Pvt. Ltd. and study of other relevant journals.
Other secondary data used are:
 Books
 Articles in journals
 Magazine
OBJECTIVE OF THE STUDY
The objective of this project is to get a practical knowledge of

t h e w o r k i n g C a p i t a l M a n a g e m e n t a n d v a r i o u s Wo r k i n g C a p i t a l
p r a c t i c e s l i k e R e q u i r e m e n t , F i n a n c i n g a n d C o n t r o l l i n g a t M E N E TA
A U T O M O T I V E C O M P O N E N T P V T. L T D
This training enabled me to get an insight into the practical

w o r k i n g o n c o m p u t e r s i n d e p e n d e n t l y.
Objective of my project is to how working capital is managed,

how records are added, deleted and modified.
 To a s s e s s t h e c h a n g e s i n w o r k i n g c a p i t a l n e e d s o v e r t h e y e a r s .
 To know about the accounting treatment of d i ff e r e n t
transactions of f u n d s t h i s t a k e s p l a c e a t c o r p o r a t e o ff i c e .
 To p r e p a r e r e p o r t o n s t u d y t h u s c o n d u c t e d .
36
 To f i n d o u t t h e e ff e c t i v e n e s s o f Wo r k i n g C a p i t a l M a n a g e m e n t .
 To a n a l y z e t h e c r e d i t p o l i c y o f t h e c o m p a n y.
 To s t u d y t h e p e r f o r m a n c e o f M e n e t a A u t o m o t i v e C o m p o n e n t
Pvt. Ltd.
 To examine profitability and liquidity position of the
management.
 To m a k e s u g g e s t i o n s f o r f u r t h e r i m p r o v e m e n t .
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FOCUS OF THE PROBLEM
H o w e v e r, e v e r y e ff o r t i s p u t i n t o m a k e t h i s r e p o r t a u t h e n t i c i n
every sense, yet there were few factors, which might have their
influence on the final report.
 Focus of the problem is to find out financial ratios for

e v a l u a t i n g t h e f i n a n c i a l p o s i t i o n a n d t h e p e r f o r m a n c e o f t h e c o m p a n y.
This study is mainly focus on the impact of analysis of the

f i n a n c i a l p o s i t i o n o f M E N E TA A U T O M O T I V E C O M P O N E N T P V T. L T D
38
CHAPTER-4
FINANACIAL
POSITION
ANALYSIS
39
STANDARDS OF COMPARISON
The ratio analysis involves comparison for a useful

interpretation of the financial statement. A single ratio is it self
does not indicate favorable or unfavorable condition. It should be
compared with some standard.
Standard of comparison may consist of:
 PA S T R AT I O i . e . r a t i o s c a l c u l a t e d f r o m t h e f a s t f i n a n c i a l
statement of the some firm. This is known as time series
analysis.
 C O M P E T I T O R ’ S R AT I O i . e . r a t i o s o f s o m e s e l e c t e d
firms, especially the most progressive & successful
c o m p e t i t o r, a t t h e s a m e p o i n t o f t i m e . T h i s i s k n o w n a s c r o s s
sectional analysis.
 I N D U S T RY R AT I O i . e . r a t i o o f t h e i n d u s t r y t o w h i c h t h e
firm belongs. This known as industry analysis.
 P R O J E C T E D R AT I O i . e . r a t i o d e v e l o p e d u s i n g t h e
projected Performa financial statement of the same firm. This
is known as Performa analysis.
40
C A P I TA L R AT I O A N A LY S I S
The tools and techniques of financial ratio are employed for the
analysis and interpretation of financial and operational data
connected with working capital management.
The following ratios have been used:

1) C u r r e n t r a t i o :
This ratio explains the relationship between current assets and
current liabilities of a business.
Current Ratio =Current Assets / Current Liability
T h i s r a t i o i s u s e d t o a c c e s s t h e f i r m ’s a b i l i t y t o m e e t t o i t s s h o r t
term liability on time. According to Accounting Principle, a current
ratio is 2:1 is supposed to be an ideal ratio . It mean that current
a s s e t s o f a b u s i n e s s s h o u l d a t l e a s t , b e t w i c e o f i t s c u r r e n t l i a b i l i t y.
If the current ratio is less 2:1 it indicates lack of liquidity and
shortage of working capital. A much higher ratio then 2:1 may
indicate the poor investment policy of the management.
Current Assets = Cash in hand + Bank Balance + Bills Receivable +

Short term investment + Debtors + Inventory + Prepaid expenses
Current Liability = Bank Overdraft + Bills payable + Creditors +

Provision for taxation + Unbalanced Dividend +Proposed Dividend +
Outstanding Expenses
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2) L i q u i d R a t i o :
Liquid ratio indicates that the firm is in a position to pay is current
l i a b i l i t y w i t h i n a m o n t h o r i m m e d i a t e l y.
Liquid Ratio= Liquid Assets / Current Liability
All current assets except inventory and prepaid expenses are

including in the liquid assets.
An
b e t t e r. T h e i d e a l i s t h a t f o r e v e r y R u p e e o f c u r r e n t l i a b i l i t y t h e r e
should be 1 rupee of liquid assets. This ratio is a better touched of
s h o r t t e r m f i n a n c i n g p o s i t i o n o f t h e c o m p a n y. S t o c k i s n o t i n c l u d i n g
in liquid assets as it may take a lot of time before it is converted into
cash. A much higher ratio then 1:1 may indicates that the poor
r e c e i v a b l e p o l i c y o f t h e c o m p a n y. T h i s s h o w s t h a t t h e r e i s m o r e
working capital is required.
3) I n v e n t o r y Tu r n o v e r R a t i o :
This Ratio indicates the relationship between the cost of Good sold
d u r i n g t h e y e a r a n d s t o c k k e p t d u r i n g t h e y e a r.
I n v e n t o r y Tu r n o v e r R a t i o = C o s t o f G o o d S o l d / I n v e n t o r y
T h i s r a t i o i n d i c a t e s w h e t h e r s t o c k h a s b e e n e ff i c i e n t l y u s e d o r
not. It shows the speed with which stock is rotated into sales for the
n u m b e r o f t i m e s t h e s t o c k i s t u r n i n t o s a l e d u r i n g t h e y e a r. T h e
higher the ratio, better it is, since it is indicates that stock is selling
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q u i c k l y.
A low stock turnover ratio indicates that stock does not sell
quickly and remains lying in the godown for quite a long time. This
result in increasing storage cost, blocking of funds and losses on
account of good becoming absolute and unsaleable. By comparing
the stock turnover ratio of current year with the previous year the
m a n a g e m e n t c a n a c c e s s e d w h e t h e r s t o c k h a s b e e n m o r e e ff i c i e n t l y
used or not.
4 ) D e b t o r s Tu r n o v e r R a t i o :
This ratio indicates the relationship between credit sale and debtors
d u r i n g t h e y e a r.
D e b t o r s Tu r n o v e r R a t i o = S a l e / D e b t o r s
This ratio indicates the speed with which the amount is collected
from debtors. The higher the ratio, the better it is, since it indicates
that amount from debtors is being collected more quickly and the less
the risk from bad debts.
A l o w e r d e b t o r t u r n o v e r r a t i o i n d i c a t e s t h e i n e ff i c i e n t c r e d i t s a l e
p o l i c y o f t h e m a n a g e m e n t . I t i s d i ff i c u l t t o s e t u p a s t a n d a r d f o r t h i s
ratio. By comparing the debtors turnover ratio of the current year
with previous it may be accessed whether the sales policy of
m a n a g e m e n t i s e ff i c i e n t o r n o t .
43
5) C a s h Tu r n o v e r R a t i o :
This ratio indicates the relationship between the net sale during the
y e a r a n d c a s h a n d b a n k b a l a n c e d u r i n g t h e y e a r.
C a s h Tu r n o v e r R a t i o = N e t S a l e / C a s h a n d B a n k B a l a n c e
T h i s r a t i o i n d i c a t e s w h e t h e r c a s h h a s b e e n e ff i c i e n t l y u s e d o r
not. It shows the speed with which the cash is rotating the sale. The
higher the ratio the better it is, since it indicates that cash is used
e ff i c i e n t l y.
I f t h e r e i s c a s h i s u s e d e ff i c i e n t l y s h o w t h a t t h e r e i s n e e d
o f w o r k i n g c a p i t a l f o r d e a l i n g w i t h d a i l y o p e r a t i o n o f t h e c o m p a n y.
By comparing cash turnover ratio of current year with previous years
t h e m a n a g e m e n t c a n a c c e s s e d w h e t h e r c a s h h a s b e e n m o r e e ff i c i e n t l y
used or not.
6) C a s h t o C u r r e n t A s s e t s :
This ratio indicates the relationship between the cash and bank
b a l a n c e d u r i n g t h e y e a r w i t h t h e c u r r e n t a s s e t s d u r i n g a y e a r.
Cash to Current Assets =Cash & Bank Balance/Current

Assets
This ratio indicates whether cash has been the important and
major part of current assets or not. Higher the ratio the cash is
important part of current assets it results into less working capital is
required.
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If the ratio is low then cash is not important part of current

assets so there is more working capital is needed to dealing with
d a i l y o p e r a t i o n s o f c o m p a n y.
7) C a s h t o C u r r e n t L i a b i l i t y :
This ratio indicates the relationship between the cash and bank
balance and current liability during the year .
Cash to Current Liability =Cash & Bank Balance / CurrentLiability

This ratio indicates whether company is able to pay current
o b l i g a t i o n h i g h e r t h e r a t i o s h o w s t h a t i n e ff i c i e n t u s e o f c a s h
r e s o u r c e s a n d i n e ff i c i e n c y o f m a n a g e m e n t l o w e r t h e r a t i o s h o w s t h a t
there is better control on the cash resources and management works
e ff i c i e n t l y a n d e ff e c t i v e l y. S o t h e r e i s m o r e w o r k i n g c a p i t a l i s
n e e d e d t o d e a l i n g w i t h d a y t o d a y o p e r a t i o n s o f t h e c o m p a n y.
8) Wo r k i n g C a p i t a l Tu r n o v e r R a t i o :
This ratio indicates the relationship between the net sales during
t h e y e a r a n d n e t w o r k i n g c a p i t a l d u r i n g a y e a r.
Wo r k i n g C a p i t a l Tu r n o v e r R a t i o = N e t S a l e s / N e t
Wo r k i n g C a p i t a l
T h i s r a t i o r e v e a l s h o w e ff i c i e n t l y w o r k i n g c a p i t a l h a s b e e n
u t i l i z e d o r n o t a h i g h e r w o r k i n g c a p i t a l t u r n o v e r r a t i o s h o w s e ff i c i e n t
use of working capital. A very high turnover ratio is also very
dangerous, as it is a sign of over trading i.e. doing business with too
little working capital. It is an indicator of shortage of working capital
45
on the other hand a very low turnover ratio of working capital may be
a sign of under training in composition of working capital.
CHAPTER-5
ANALYSIS
AND
FINDINGS
46
A. FINANCIAL RATIOS
CURRENT RATIO
Current Ratio = Current Assets / Current Liability
Ideal Ratio = 2:1
YEAR CURRENT CURRENT CURRENT

ASSETS LIABILITIES RATIO
31.12.09 423,152,837.00 413,427,460.00 1.01:1
31.12.08 169,484,716.00 224,701,127.00 0.75:1
Interpretation:
The graph shows the low short term liquidity in the form of current
assets. This means that lots of funds have been used. The current
ratio is an index of the concern financial stability since it shows the
extent of the working capital which is the amount by which the
current assets exceed the current liabilities. It shows that the
47
business is trading beyond its resources.
LIQUID RATIO
Liquid Ratio = Liquid Assets / Current Liabilities
Ideal Ratio = 1:1
YEAR LIQUID CURRENT LIQUIDITYRA

ASSETS LIABILITIES TIO
31.12.08 116,283,360.00 224,701,127.00 0.51:1
31.12.09 267,692,561.00 413,427,460.00 0.64:1
Interpretation:
The graph shows that there is continuous increase in the ratio from
l a s t y e a r. T h i s i n d i c a t e s t h e b l o c k a g e o f f u n d s i n t h e f o r m o f d e b t o r s
so there is need of more working capital to deal in daily operations
48
o f c o m p a n y. B u t l i q u i d i t y r a t i o i s s t i l l l o w. A n i d e a l r a t i o s h o u l d b e
1:1. Liquidity should be increased for short-term solvency of the
c o m p a n y.
FIXED ASSETS RATIO

Fixed assets Ratio = Fixed Assets/Long Term Funds
LONG TERM FIXED ASSETS

YEAR FIXED ASSETS
FUNDS RATIO
31.12.08 336,555,894.00 318,625,362.00 1.06:1
31.12.09 398,103,698.00 320,639,765.00 1.24:1
Interpretation:
l a s t y e a r. T h e r a t i o s h o u l d n o t b e m o r e t h a n 1 . I f i t i s l e s s t h a n 1 , i t
shows that a part of working capital has been financed through long-
term funds. This is desirable to some extent because a part of
working capital termed as "core working capital” is more or less of a
49
fixed nature. The ideal ratio is 0.67.
DEBT EQUITY RATIO

Debt Equity Ratio = External Equities/Internal Equities
EXTERNAL INTERNAL DEBT EQUITY

YEAR
EQUITIES EQUITIES RATIO
31.12.08 318,019,282.00 120,000,000.00 2.65:1

31.12.09 318,364,584.00 185,000,000.00 1.72:1
Interpretation:
The graph shows that there is continuous decrease in the ratio from
l a s t y e a r. T h e r a t i o i n d i c a t e s t h e p r o p o r t i o n o f o w n e r ' s s t a k e i n t h e
b u s i n e s s . E x c e s s i v e l i a b i l i t i e s t e n d t o s o l v e n c y. T h e r a t i o i n d i c a t e s
the extent to which the firm depends upon outsiders for its existence.
T h e r a t i o p r o v i d e s a m a rg i n o f s a f e t y t o t h e c r e d i t o r s . I t t e l l s t h e
50
owners the extent to which they can gain the benefit of maintaining
control with a limited investment.
PROPRIETARY RATIO
Proprietary Ratio = Shareholder's Funds/Total Tangible assets
SHAREHOLDER'S TOTALTANGIBLE PROPRIETARY

YEAR
FUND ASSETS RATIO
31.12.08 120,000,000.00 311,165,462.00 0.39:1
31.12.09 185,000,000.00 377,330,645.00 0.49:1
Interpretation:
l a s t y e a r. T h i s r a t i o f o c u s e s t h e a t t e n t i o n o n t h e g e n e r a l f i n a n c i a l
strength of the business enterprise. The ratio is of particular
importance to the creditors who can find out the proportion of
shareholder's funds in the total asset employed in the business. A
high proprietary ratio will indicate a relatively little danger to
51
c r e d i t o r s , e t c . , i n t h e e v e n t o f f o r c e d r e o rg a n i z a t i o n o r w e n d i n g u p
o f t h e c o m p a n y. A l o w p r o p r i e t a r y r a t i o i n d i c a t e s g r e a t r i s k t o t h e
creditors since in the event of losses a part of their money may be
lost to the proprietors of the business. The higher the ratio, the
better it is. A ratio below 50 percent may be alarming for the
creditors since they may have to lose heavily in the event of
company's liquidation on account of heavy losses.
B. TURNOVER RATIOS
WORKING CAPITAL TURNOVER RATIO
Working Capital Turnover Ratio = Net Sales / Net Working Capital
NET WORKING WORKING CAPITAL

YEAR NET SALES
CAPITAL TURNOVER RATIO
31.12.08 171,405,195.00 (55,216,411.00) (3.10:1)
31.12.09 628,272,600.00 9,725,377.00 64.60:1
Interpretation:
T h e a b o v e g r a p h s h o w s t h a t t h e c o m p a n y i s a n e ff i c i e n t u s e r o f
w o r k i n g c a p i t a l i n g e n e r a t i n g s a l e s . Wo r k i n g c a p i t a l t u r n o v e r r a t i o
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h a s b e e n i n c r e a s e d w h i c h s h o w s t h e m o r e e ff i c i e n t u s e o f w o r k i n g
capital.
FIXED ASSETS TURNOVER RATIO

Fixed assets Turnover Ratio = Net Sales / Net Fixed assets
NET FIXED FIXED ASSETS

YEAR NET SALES
ASSETS TURNOVER RATIO
31.12.08 171,405,195.00 312,392,737.00 0.55:1
31.12.09 628,272,600.00 379,261,074.00 1.66:1
Interpretation:
T h e a b o v e g r a p h s h o w s t h a t t h e c o m p a n y i s a n e ff i c i e n t u s e r o f f i x e d
assets in generating sales. This ratio indicates the extent to which
the investment in the fixed assets contributed towards sales. If
compared with a previous period, it indicates whether the investment
in fixed assets has been judicious or not.
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STOCK TURNOVER RATIO

Stock Turnover Ratio = Cost Of Goods Sold / Average Stock
COST OF AVERAGE STOCK TURNOVER

YEAR
GOODS SOLD STOCK RATIO
31.12.08 134,704,504.00 17,852,280.50 7.55:1
31.12.09 389,651,498.00 31,911,030.00 12.21:1
Interpretation:
l a s t y e a r. T h i s r a t i o f o c u s e s t h e a t t e n t i o n o n t h e i n v e n t o r y t u r n o v e r.
T h e i n v e n t o r y t u r n o v e r r a t i o s i g n i f i e s t h e l i q u i d i t y o f t h e i n v e n t o r y. A
high inventory turnover ratio indicates brisk sales. The ratio is,
therefore, a measure to discover the possible trouble in the form of
overstocking or overvaluation. The stock is known as the graveyard of
the balance sheet. If the sales are quick such a position would not
arise unless the stock consist of unsalable item. A low inventory ratio
results in blocking in funds in inventory which may ultimately result
54
in heavy losses due to inventory becoming obsolete or deteriorating

i n q u a n t i t y.
C. PROFITABILITY RATIOS
OVERALL PROFITABILITY RATIO
Overall Profitability Ratio = (Net Profit After Interest & Tax / Shareholder's fund)*100
OVERALL
OPERATING CAPITAL
YEAR PROFITABILITY
PROFIT EMPLOYED
RATIO (%)
31.12.08 (96,998,826.00) 506,040,610.00 (19.17)
31.12.09 83,967,312.00 821,256,535.00 10.22
Interpretation: The graph shows that there is continuous increase

i n t h e r a t i o f r o m l a s t y e a r. I n t h e f i n a n c i a l y e a r 2 0 0 7 - 0 8 o v e r a l l
profitability ratio is (-19.17%) which represents the loss in the
business. Where as, in the financial year 2009-09, overall profitability
ratio is 10.22% which represents the profit in the business. If we
compare the overall profitability ratio of both the financial years 2007-
08 & 2009-09 overall profitability ratio has been increased from (-
19.17%) to 10.22%. This shows more efficient use of capital employed
in the business. Overall profitability ratio represents the efficient use
of capital employed in the business. Overall profitability ratio is also
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known as "Return On Investment" (ROI). It indicates the percentage of

return on the total capital employed in the business.
RETURN ON SHAREHOLDER'S FUNDS RATIO

Return On Shareholder's fund Ratio = (Net Profit After Interest & Tax / Shareholder's
fund)*100
RETURN ON
NET PROFIT SHAREHOLDE
YEAR SHAREHOLDER'S
AFTER TAX R'S FUND
FUND RATIO(%)
31.12.08 (139,090,149.00) 120,000,000.00 (115.91)
31.12.09 61,144,290.00 185,000,000.00 33.05
Interpretation:
l a s t y e a r. I n t h e f i n a n c i a l y e a r 2 0 0 7 - 0 8 , r e t u r n o n s h a r e h o l d e r ' s f u n d
r a t i o i s ( - 11 5 . 9 1 ) . I n t h e f i n a n c i a l y e a r 2 0 0 9 - 0 9 , r e t u r n o n s h a r e
holder's fund is 33.5. If we compare both the ratio of financial years,
r e t u r n o n s h a r e h o l d e r ' s f u n d h a s b e e n i n c r e a s e d f r o m ( - 11 5 . 9 1 ) t o
56
3 3 . 5 . W h i c h i s s h o w i n g t h e e ff i c i e n t u s e o f f u n d s ? W h i c h m e a n s m o r e
dividends to shareholders .In case it is desired to work out the
p r o f i t a b i l i t y o f t h e c o m p a n y f r o m t h e s h a r e h o l d e r ’s p o i n t o f v i e w ?
RETURN ON TOTAL ASSETS RATIO

Return On Total Assets Ratio = (Net Profit After Interest & Tax / Total assets)*100
RETURN ON
NET PROFIT
YEAR TOTAL ASSETS INVESTMENT
AFTER TAX
RATIO(%)
31.12.08 (139,090,149.00) 353,504,370.00 (16.94)
31.12.09 61,144,290.00 821,256,535.00 7.45
Interpretation:
l a s t y e a r. I n t h e f i n a n c i a l y e a r 2 0 0 7 - 0 8 , r e t u r n o n t o t a l a s s e t s r a t i o i s
(-16.94). In the financial year 2009-09, return on total assets is 7.45.
If we compare both the ratio of financial year 2007-08 & 2009-09, it
has been increased from (-16.94) to 7.45. Which is showing the
e ff i c i e n t u s e o f f u n d s i n t h e f i x e d a s s e t s ? I t s h o w s t h e r e t u r n o n
57
investment in the fixed assets of business.
EARNING PER SHARE

Earning Per Share = Net Profit After Tax & pref. shares / No. Of Equity Shares
NET PROFIT NO. OF EQUITY EARNING PER
YEAR
AFTER TAX SHARE SHARE RATIO
31.12.08 (139,090,149.00) 1,200,000 (75.18)
31.12.09 61,144,290.00 1,850,000 33.05
Interpretation:
The graph shows that there is continuous increase in the ratio from last
y e a r. I n t h e f i n a n c i a l y e a r 2 0 0 7 - 0 8 , e a r n i n g p e r s h a r e i s ( - 7 5 . 1 8 ) . I n t h e
financial year 2009-09, earning per share is 33.05. If we compare both
the ratio of financial year 2007-08 & 2009-09, it has been increased
from (-75.18) to 33.05. Which is showing the more dividend to the
equity shareholders. The profitability from the point of view of the
equity shareholders will be judged after taking into account the amount
of dividend payable to the preference shareholders. The earning per
share helps in determining the market price of the equity share of the
c o m p a n y. A c o m p a r i s o n o f e a r n i n g p e r s h a r e o f t h e c o m p a n y w i t h
58
another will also help in deciding whether the equity share capital is
being efficiently used or not. It also helps in estimating the company's
capacity to pay dividend to its equity shareholders.
GROSS PROFIT RATIO

Gross Profit Ratio = (Gross Profit / Net Sales)*100
YEAR GROSS PROFIT NET SALES GROSS PROFIT RATIO(%)

31.12.08 36,700,691.00 171,405,195.00 0.21
31.12.09 238,620,786.00 628,272,600.00 0.38
Interpretation:
l a s t y e a r. I n t h e f i n a n c i a l y e a r 2 0 0 7 - 0 8 , g r o s s p r o f i t r a t i o i s 0 . 2 1 . I n
the financial year 2009-09, gross profit ratio is 0.38. If we compare
both the ratio of financial year 2007-08 & 2009-09, it has been
increased from 0.21 to 0.38. Which is showing the rapidly increase in
the gross profit. The ratio indicates the degree to which the selling
price of goods per unit may decline without resulting in losses from
operations to the firm. It also helps in ascertaining whether the
59
average percentage of mark up on the goods is maintained
NET PROFIT RATIO

Net Profit Ratio = (Net Profit / Net Sales)*100
NET OPERATING NET PROFIT
YEAR NET SALES
PROFIT RATIO(%)
31.12.08 (37,308,668.00) 171,405,195.00 (0.22)
31.12.09 231,395,360.00 628,272,600.00 0.37
Interpretation:
l a s t y e a r. I n t h e f i n a n c i a l y e a r 2 0 0 7 - 0 8 , n e t p r o f i t r a t i o i s ( - 0 . 2 2 ) . I n
the financial year 2009-09, net profit ratio is 0.37. If we compare
both the ratio of financial year 2007-08 & 2009-09, it has been
increased from (-0.22) to 0.37. Which is showing the improvement in
the operational activities of business? Net profit ratio indicates net
m a rg i n e a r n e d o n a s a l e o f R s . 1 0 0 . T h e r a t i o h e l p s i n d e t e r m i n i n g t h e
60
e ff i c i e n c y w i t h w h i c h a ff a i r s o f t h e b u s i n e s s a r e b e i n g m a n a g e d . A n
increase in the ratio over the previous period indicates improvement
i n t h e o p e r a t i o n a l e ff i c i e n c y o f t h e b u s i n e s s p r o v i d e d t h e g r o s s p r o f i t
r a t i o i s c o n s t a n t . T h e r a t i o t h u s a n e ff e c t i v e m e a s u r e t o c h e c k t h e
profitability of the business.
Current Assets at MENETA AUTOMOTIVE PVT. LTD. has been classified

into following categories:
PARTICULARS\YEAR 31.12.08 31.12.09
INVENTORIES 112,093,611.00 243,229,838.00
DEBTORS 33,798,468.00 124,546,873.00
CASH BALANCE 4,189,749.00 24,462,723.00
OTHER CURRENT ASSETS 20,816.00 97,759.00
LOANS & ADVANCES 19,382,072.00 30,815,644.00

TOTAL CURRENT ASSETS 169,484,716.00 423,152,837.00
Interpretation:
T h e c o m p a n y h a s a f o r m a l p o l i c y o n Wo r k i n g C a p i t a l M a n a g e m e n t .
Wo r k i n g C a p i t a l M a n a g e m e n t i s h a n d l e d b y D G M ( F i n a n c e ) . N o
61
Profit No Loss has been prior objective of the working capital

p o l i c y o f t h e c o m p a n y. E s t i m a t e d r e q u i r e m e n t o f w o r k i n g c a p i t a l i s
determined with the help of Budgets Method. Review statement of
working capital position prepared on monthly basis with the help on
Fund Flow Statement.
ACCOUNTS RECEIVABLE TO SALES RATIO
Account receivable to sales ratio = Account receivables / Net sale
YEAR RECEIVABLE SALES ACC. RECIEVABLE TO

SALE RATIO
31.12.08 33,798,468.00 171,405,195.00 0.2
31.12.09 124,546,873.00 628,272,600.00 0.2
Interpretation:
The above graph shows that a decreasing trend indicates receivable
a r e e ff i c i e n t l y c o n t r o l s o t h a t t h e r e i s n e e d o f l e s s w o r k i n g c a p i t a l t o
dealing with daily operations.
62
Table Showing Percentage to Inventory to Total Current Assets.
YEAR INVENTORY CURRENT ASSETS INVENTORY TO

CURRENT ASSETS
31.12.08 112,093,611.00 169,484,716.00 0.66
31.12.09 243,229,838.00 423,152,837.00 0.57
Interpretation:
Av e r a g e i n v e n t o r y o f t h e r e v i e w p e r i o d l e s s t h a n t h e h a l f i n t h e
c o m p a n y.
63
There is a separate Inventory Management Department in the

company named as Storage Department. The storage manager
formulates all the policies regarding purchase and inventory control.
The company determines minimum level of inventory and maximum
l e v e l i s d e t e r m i n e d o n t h e b a s i s o f s t o r a g e s p a c e a v a i l a b i l i t y.
As per rules and regulation Meneta Automotive Component Pvt.

L t d . h a s t o k e e p b u ff e r s t o c k a s d e s c r i b e d b y i t s c u s t o m e r s v a r y i n g
from situation to overcome following things:
 Natural calamity
 Economic crises in over country and abroad
 To f a c e w a r t i m e c r i s e s o r
 Any other type of circumstances
A m o u n t o f b u ff e r s t o c k i s e q u a l t o o n e t h i r d o f t h e t o t a l
c o n s u m p t i o n o f t h e y e a r.
T h e i n v e n t o r y l e v e l i s a ff e c t e d b y t h e l e a d t i m e . C o m p a n y h a s
been followed the economic order quantity system for ordering.
There is monthly review the levels of inventories.
Consumption rate of materials fluctuate and forecasting is

d i ff i c u l t s o c o m p a n y m a i n t a i n s a f e t y s t o c k a s a c u s h i o n t o m e e t
unanticipated increased in consumption. If there is undue delay in
e ff e c t i v e s u p p l y j u s t a r e m i n d e r i s s e n t w i t h o u t i n c l u d i n g i n t h e
legal action. For identifying the scrap items the company adapts
d e g s a t i a t i o n o f s t o c k s . C o m p a n y p r e p a r e s i n v e n t o r y r e p o r t m o n t h l y.
64
SWOT ANALYSIS
S - STRENGTH
 Excellent R& D center
 Highly modern production facilities.
 Established customers & vender base.
 Tr a c k r e c o r d o f g r o w t h i n t u r n o v e r p r o f i t s .
 Strong brand quality will label.
 Innovation.
 Successful launch of every brand.
W - WEAKNESSES
 Faults in distribution channels.
 P o o r c l a i m p o l i c y.
O - OPPORTUNITIES
 Quicker response to customer need.
 Entrepreneurial drive of a start up.
 High brand recalls in almost in whole world.
T - THREATS
 High cost of operation.
 C o m p e t i t o r s w i t h s t r o n g b r a n d e q u i t y.
 Heavy completion in premium segment.
65
CHAPTER-6
LIMITATIONS
66
Every coin has two sides and in the same way while during our project analysis,
we came across such things that created problem for us.
These are as below:-

 Ti m e : T h e t i m e o f a r o u n d t w o m o n t h s w a s t o o s h o r t t o s t u d y
as wide subject like “Financial Analysis”.
 Confidential information: The executives were hesitant

reveal complete information since it was confidential.
 Busy schedule of concerned executives : The concerned

executives were busy because of which they were reluctant to
give appointment.
 U n a w a re n e s s : E x e c u t i v e s w e r e u n a w a r e o f m a n y t e r m s
related to financial analysis while asking to them.
67
CHAPTER-7
CONCLUSION
&
SUGGESTIONS
68
Meneta Automotive Component Pvt. Ltd. is a manufacturing concern.

It was my great pleasure during my training period taken at
Meneta Automotive Component Pvt. Ltd. I got all suitable
i n f o r m a t i o n f r o m a l l o ff i c e r s a n d s t a ff m e m b e r s i n t h i s c o m p a n y.
 T h e c o m p a n y h a s l a rg e o p e r a t i n g a n d c a s h c y c l e l e a d i n g t o
l a rg e b l o c k a g e o f f u n d s . H e n c e , i t s h o u l d a d o p t s t r i c t s t r a t e g i e s
a t d i ff e r e n t s t a g e s t o f a s t e n i t s o p e r a t i n g c y c l e .
 A w e l l d e f i n e c o l l e c t i o n m u s t b e d e v e l o p e d b y t h e c o m p a n y.
 C r e d i t l i m i t s h o u l d b e l a i d d o w n b y t h e c o m p a n y.
 Meneta Automotive Component Pvt. Ltd. should increase the

amount of cash in hand so that amount of cash credit is
decreased.
 M e n e t a A u t o m o t i v e C o m p o n e n t P v t . L t d . s h o u l d t a rg e t t h e
i n d i a n d o m e s t i c m a r k e t a l s o m o r e e ff e c t i v e l y.
 Meneta Automotive Component Pvt. Ltd. should not adopt too

l i b e r a l c r e d i t p o l i c y.
Policy should be exists in between the range of liberal and
strict.
 The company should give attention on open market sale.
Thus, we can say that the Meneta Automotive Component

P v t . L t d . i s a s o u n d o rg a n i z a t i o n p r o d u c i n g q u a l i t y p r o d u c t s a t
competitive prices, attaining its motto of customer service .
69
BIBLIOGRAPHY
70
BOOKS AUTHOR’S NAME PUBLISHER’S NAME
FINANCIAL KHAN, M.Y & P.K Tata Mac Graw Hill

MANAGEMENT publishing company ltd
FINANCIAL PANDEY, I.M PRIYANSHI publishing

MANAGEMENT house
MANAGEMENT GUPTA, SHASHI.K& M/S Kalyani Publishers

ACCOUNTING SHARMA.R.K
FINANCIAL & GOEL, D.K PRIYANSHI publishing

RATIO ANALYSIS house
 Annual Reports & Accounts, Meneta Automotive Component

Pvt. Ltd. (31.12.08 & 31.12.09)
 INTERNET SITES
 http://www.menetaindia.com
 http://www.menetA/S.com
 http://www.roulundsbraking.com
 http://www.affiniamet.com
71

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SUMMER TRAINING PROJECT REPORT

“STUDY OF FINANCIAL POSTION”

“MENETA AUTOMOTIVE COMPONENT PVT.

Submitted for the

Under The Guidance Of: Submitted By:

"Chandra Prabhu Jain College Of Higher Studies"

of Mr. PARVEEN GARG (Deputy General Manager in Finance

L a s t l y, performance evaluation was done to know how

Introduction To Automobile Industry

According the History of Automobile Industry US, dominated the automobile

REVIEW OF EXISTING LITERATURE

SOURCE: DEVICES USED BY FINANCIAL

Thus various techniques, which are used by financial

 SOURCE: IMPORTANCE OF HAVING

 S O U R C E : STUDY OF FINANCE FOR DECISION

Name Of The Company - M E N E TA A U T O M O T I V E C O M P O N E N T P V T.

About MENETA AUTOMOTIVE COMPONENT

1. Meneta A/S was established in 1953, and is today a

optimizing our products to meet the manufacturers’ demands on

Production equipment from competitor

Meneta has bought the production equipment from an English

Second subsidiary in India

PRODUCTS FROM M E N E TA A U TO M O T I V E COMPONENT

Heads Of Different Departments & contact details

Area Name Phone E-mail

Management Team Of Meneta Group Of Industries

Managing Director of Meneta

Assistant Managing +45 63188914

Assistant Managing Director +45 63188936

+91 1306 4520

Proj +45 63188929

Technical Sales Office

+49 2651 5013

Meneta Backing Plates

Klaus Back +45 63188931

Meneta Advanced Shims Technology

Sales Department Jan Dirksen +45 63188919 jmd@meneta.dk

Subsidiaries Of Meneta Group Of Co.

Affinia MAT India Braking Pv t . Ltd

European Market Company:

Roulunds Braking (France) SA

Roulunds Braking (India) PVT LTD

Roulunds Braking (Shanghai) Co. Ltd.

Products from Roulunds Braking (India) PVT LTD

RESEARCH METHODOLOGY is a way to systematically

The procedure adopted for conducting the research requires

“Research is Search for Knowledge”

The first step while conducting research is careful definition

“A Research Design is the framework or plan for a study which is

TYPES OF RESEARCH DESIGN

The present project is Descriptive in nature.

The purpose of descriptive research design is in descriptive

The success of research depends up to some extent upon the

It includes both primary data and secondary data.

OBJECTIVE OF THE STUDY

The objective of this project is to get a practical knowledge of

This training enabled me to get an insight into the practical

Objective of my project is to how working capital is managed,

FOCUS OF THE PROBLEM

 Focus of the problem is to find out financial ratios for

This study is mainly focus on the impact of analysis of the

The ratio analysis involves comparison for a useful

Standard of comparison may consist of: