FINAL Mahanthesh

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.
= INTRODUCTION
MEANING OF FINANCE:In simple words, Arrangement of funds is called finance. All organizations need finance for operating its different activities. So, we can say finance is just like blood for survival the business in changing economic environment. Fund, money, saving, cash, reserves and assets are the basics of finance. Finance word is very deep and in modern age, this word is also known Business Finance. To create equilibrium in business finance, we used different tools like financial analysis, financial planning, ratio analysis, cash flow analysis, fund flow analysis and working capital management analysis.
DEFINITIONS:That business activity which is concerned with the acquision and conservation of capital funds in meeting the financial needs of the business enterprise. -Wheeler Business finance can be broadly defined as the activity concerned with the planning rising,controlling and administering the funds in the business. -Guthmann and Doughall
Historical Background of Finance:-
If we unlock its historical background, we find many facts that finance and financial activities are inter-connected. Main aim of finance to get high margin on loan, in beginning Banks started the transactions of depositing money at very low rate of interest and then banks sell this money to the person who needs money immediately at high rate of interest. Slowly, these banks developed both capital and money markets. Now,other professional companies and organizations have started finance business. If we take the example of Dubai financial market, it has traded shares more than $380 bn in last year.
AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 1
INTRODUCTION FINANCIAL PLANNING Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against that plan.. The process of determining a person's or firm's financial needs or goals for the future and the means to achieve them. Financial planning involves deciding what investments and activities would be most appropriate under both personal and broader economic circumstances. All things being equal, short-term financial planning involves less uncertainty than long-term financial planning because, generally speaking, market trends are more easily predictable in the short term. Likewise, shortterm financial plans are more easily amendable in case something goes wrong as a result of the short time frame. Financial Plan-Introduction What is Financial Plan? In simple words, a financial plan is a path to help you achieve your lifes financial goals. It is the process of making learned money management decisions in order to safeguard your future. A financial plan helps you to fulfill financial goals and meet personal priorities. It takes into consideration your available resources, responsibilities, lifestyle and risk appetite. Allocating your savings across various asset classes to achieve an appropriate risk-reward balance and ensuring long-term financial security are the basics of financial plan. You need to ask yourself some questions before making a financial plan, like: What is your current financial situation? What is your vision of your future financial situation? How do you plan to achieve your vision? You need to analyze what your financial needs and goals are. Then, you measure the resources you need to meet those goals in money terms. Specify the time period during which you want to achieve these goals. Then you write an action plan to fulfill your goals, like, what products to buy and what types of savings to make. You can of course make your financial plan yourself, but a financial planning expert can offer the right financial skills and tools to help you realize your financial plan. The basics of financial plan may include some of the following questions: Will your family be financially secure, whatever happens to you? Are your finances taxes efficient? Are you getting the best return in a rising or a falling stock market on your investments? Is your childs education financially secure? How about for their wedding?
Do you have enough money for your retirement? You should feel comfortable if your answers are yes to all the above questions. But even a single no means that you should feel uncomfortable. You need a good financial plan. See a financial planning expert to chart out the best recommendations for you. Your introduction to financial plan starts right here.
THE FINANCIAL PLANNING PROCESS
Most people want to handle their finances so that they get full satisfaction from each available dollar. Typical financial goals include such things as a new car, a larger home, advanced career training, extended travel, and selfsufficiency during working and retirement years. To achieve these and other goals, people need to identify and set priorities. Financial and personal satisfaction are the result of an organized process that is commonly referred to as personal money management or personal financial planning. Personal financial planning is the process of managing your money to achieve personal economic satisfaction. This planning process allows you to control your financial situation. Every person, family, or household has a unique financial position, and any financial activity therefore must also be carefully planned to meet specific needs and goals. A comprehensive financial plan can enhance the quality of your life and increase your satisfaction by reducing uncertainty about your future needs and resources. The specific advantages of personal financial planning include Increased effectiveness in obtaining, using, and protecting your financial resources throughout your lifetime. Increased control of your financial affairs by avoiding excessive debt, bankruptcy, and dependence on others for economic security. Improved personal relationships resulting from well-planned and effectively communicated financial decisions. A sense of freedom from financial worries obtained by looking to the future, anticipating expenses, and achieving your personal economic goals.
all make hundreds of decisions each day. Most of these decisions are quite simple and have few consequences. Some are complex and have long-term effects on our personal and financial situations. The financial planning process is a logical, sixstep procedure: (1) determining your current financial situation (2) developing financial goals (3) identifying alternative courses of action (4) evaluating alternatives (5) creating and implementing a financial action plan, and (6) Reevaluating and revising the plan.
Step 1: Determine Your Current Financial Situation
In this first step of the financial planning process, you will determine your current financial situation with regard to income, savings, living expenses, and debts. Preparing a list of current asset and debt balances and amounts spent for various items gives you a foundation for financial planning activities.
Step 2: Develop Financial Goals
You should periodically analyze your financial values and goals. This involves identifying how you feel about money and why you feel that way. The purpose of this analysis is to differentiate your needs from your wants. Specific financial goals are vital to financial planning. Others can suggest financial goals for you; however, you must decide which goals to pursue. Your financial goals can range from spending all of your current income to developing an extensive savings and investment program for your future financial security.
Step 3: Identify Alternative Courses of Action
Developing alternatives is crucial for making good decisions. Although many factors will influence the available alternatives, possible courses of action usually fall into these categories: Continue the same course of action. Expand the current situation. Change the current situation. Take a new course of action. Not all of these categories will apply to every decision situation; however, they do represent possible courses of action. Creativity in decision making is vital to effective choices. Considering all of the possible alternatives will help you make more effective and satisfying decisions.
Step 4: Evaluate Alternatives

You need to evaluate possible courses of action, taking into consideration your life situation, personal values, and current economic conditions. Consequences of Choices. Every decision closes off alternatives. For example, a decision to invest in stock may mean you cannot take a vacation. A decision to go to school full time may mean you cannot work full time. Opportunity cost is what you give up by making a choice. This cost, commonly referred to as the trade-off of a decision, cannot always be measured in dollars.
Decision making will be an ongoing part of your personal and financial situation. Thus, you will need to consider the lost opportunities that will result from your decisions.
Uncertainty is a part of every decision. Selecting a college major and choosing a career field involve risk. What if you dont like working in this field or cannot obtain employment in it? Other decisions involve a very low degree of risk, such as putting money in a savings account or purchasing items that cost only a few dollars. Your chances of losing something of great value are low in these situations. In many financial decisions, identifying and evaluating risk is difficult. The best way to consider risk is to gather information based on your experience and the experiences of others and to use financial planning information sources.
Financial Planning Information Sources
Relevant information is required at each stage of the decision-making process. Changing personal, social, and economic conditions will require that you continually supplement and update your knowledge.
Step 5: Create and Implement a Financial Action Plan
In this step of the financial planning process, you develop an action plan. This requires choosing ways to achieve your goals. As you achieve your immediate or short-term goals, the goals next in priority will come into focus. To implement your financial action plan, you may need assistance from others. For example, you may use the services of an insurance agent to purchase property insurance or the services of an investment broker to purchase stocks, bonds, or mutual funds.
Step 6: Reevaluate and Revise Your Plan
Financial planning is a dynamic process that does not end when you take a particular action. You need to regularly assess your financial decisions. Changing personal, social, and economic factors may require more frequent assessments. When life events affect your financial needs, this financial planning process will provide a vehicle for adapting to those changes. Regularly reviewing this decision-making process will help you make priority adjustments that will bring your financial goals and activities in line with your current life situation.
Tools & Techniques of Financial Planning Find practical financial advisor tools and resources to support your practice and enhance your client communication and relationships, developed by FPA and dedicated association members.
PARTIES INTERESTED Analysis of financial statements has become very significant due to widespread interest of various parties in the financial results of a business unit. The various parties interested in the analysis of financial statements are :
(i) Investors : Shareholders or proprietors of the business are interested in the well being of the business. They like to know the earning capacity of the business and its prospects of future growth.
(ii) Management : The management is interested in the financial position and performance of the enterprise as a whole and of its various divisions. It helps them in preparing budgets and assessing the performance of various departmental heads.
(iii) Trade unions : They are interested in financial statements for negotiating the wages or salaries or bonus agreement with the management.
(iv) Lenders : Lenders to the business like debenture holders, suppliers of loans and lease are interested to know short term as well as long term solvency position of the entity.
(v) Suppliers and trade creditors : The suppliers and other creditors are interested to know about the solvency of the business i.e. the ability of the company to meet the debts as and when they fall due.
(vi) Tax authorities : Tax authorities are interested in financial statements for determining the tax liability.
(vii) Researchers : They are interested in financial statements in undertaking research work in business affairs and practices.
(viii) Employees : They are interested to know the growth of profit. As a result of which they can demand better remuneration and congenial working environment.
(ix) Government and their agencies : Government and their agencies need financial information to regulate the activities of the enterprises/industries and determine taxation policy. They suggest measures to formulate policies and regulations.
(x) Stock exchange : The stock exchange members take interest in financial statements for the purpose of analysis because they provide useful financial information about companies. Thus, we find that different parties have interest in financial statements for different reasons.
Financial statement: A financial statement is an organized collection of data according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. It may show a position at a moment of time as in the case of a balance sheet, or may reveal a series of activities over a given period of time, as in the case of an income statement. Thus, the term financial statement generally refers to the basis statements; i) The income statement
ii) iii) iv) statement.
The balance sheet A statement of retained earnings A statement of charge in financial position in addition to the above two
Financial statement analysis: It is the process of identifying the financial strength and weakness of a firm from the available accounting data and financial statement. The analysis is done by properly establishing the relationship between the items of balance sheet and profit and loss account the first task of financial analyst is to determine the information relevant to the decision under consideration from the total information contained in the financial statement. The second step is to arrange information in a way to highlight significant relationship. The final step is interpretation and drawing of inferences and conclusion. Thus financial analysis is the process of selection relating and evaluation of the accounting data/information. This studying contain following analysis: 1) 2) 3) 4) comparative analysis statement common-size analysis statement Ratio analysis Trend analysis.
1) Comparative financial statement: Comparative financial statement is those statements which have been designed in a way so as to provide time perspective to the consideration of various elements of financial position embodied in such statements. In these statements, figures for two or more periods are placed side by side to facilitate comparison. But the income statement and balance sheet can be prepared in the form of comparative financial statement.
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i) Comparative income statement: The income statement discloses net profit or net loss on account of operations. A comparative income statement will show the absolute figures for two or more periods. The absolute change from one period to another and if desired. The change in terms of percentages. Since, the figures for two or more periods are shown side by side; the reader can quickly ascertain whether sales have increased or decreased, whether cost of sales has increased or decreased etc. ii) Comparative balance sheet: Comparative balance sheet as on two or more different dates can be used for comparing assets and liabilities and finding out any increase or decrease in those items. Thus, while in a single balance sheet the emphasis is on present position, it is on change in the comparative balance sheet. Such a balance sheet is very useful in studying the trends in an enterprise. 2) common-size financial statement: Common-size financial statement are those in which figures reported are converted into percentages to some common base in the income statement the sales figure is assumed to be 100 and all figures are expressed as a percentage of sales. Similarly, in the balance sheet, the total of assets or liabilities is taken as 100 and all the figures are expressed as a percentage of this total. 3) Ratio analysis: Ratio analysis is a widely used tool of financial analysis. The term ratio in it refers to the relationship expressed in mathematical terms between two individual figures or group of figures connected with each other in some logical manner and are selected from financial statements of the concern. The ratio analysis is based on the fact that a single accounting figure by it self may not communicate any meaningful information but when expressed as a relative to some other figure, it may definitely provide some significant information the relationship between two or more accounting figure/groups is called a financial ratio helps to express the relationship between two
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accounting figures in such a way that users can draw conclusions about the performance, strengths and weakness of a firm.
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INDUSTRY PROFILE
Transport means conveyance or movement of goods and persons from one place to another. Without proper means of transport, it is not possible for a person to get from one place to another. Over the years, more and more people have moved from the traditional systems of transport to the mechanized ones, i.e. car, scooter, bus, truck, etc. INDIAN TRANSPORT SYSTEM In India Road Transport services are operated both by public and private sectors. But rapid increase introspect of passenger traffic has lead to keen competition among the private agencies and people were unable to copy up with the prices changed by them. Another reason for the establishment of public transportation system was growing population, which was beyond the control of private agencies. And as a result Bangalore Corporation undertaking emerged and B.M.T.C is one of them.
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HISTORY OF TRANSPORATION IN INDIA Transportation system is an important part of the every nation's economy. As India has an area of 3,287,240 km2 and an estimated population of 1,028,737,436, so in India Transport is both necessity as well as a convenience. Today India has many sources of transportation by land, water and air. But due to low GDP of India access to these sources of transport has not been uniform. Public transport still remains the primary mode of transport for most of the population, and India's public transport systems are among the most heavily utilized in the world. In India public has their owned vehicle such as scooter, car, motorcycle etc. . The other main transportation sources in local are: Bicycle : Bicycle is the Indias most economical and common source of transport in local area. Even in world, India is the second largest producer of bicycles. More than 50% of India households owned bicycle. Cycle Rickshaw : In India, It was introduced in 1940. It is a tricycle on which two people can seat comfortably and a person pedals from the front. But now, in large cities these are banned for causing traffic congestion. Trams : It is the advent of the British, introduced in many cities of India. But still now it is used only in Kolkata. The national Calcutta tramways Company processes to upgrade tramway network.
Short distance public transportation Buses : In India more than 85% of public travel in buses to move in short distances areas like one
city to another. In India most of the buses are run by government owned state transport corporation. It is a cheap and convenient source of transportation. Auto Rickshaws : An auto rickshaw is a three wheeler vehicle. It has a small cabin, for the deriver in the front and a seat for passenger in the rear. It is generally used by public if there is no bus service to go at specific location in local area. Taxi : In India mostly traditional taxicabs in India are Premier Padmini or Ambassador Cars. But now cars such as Tavera, Esteem, Mahindra Logan, Toyota Innova, Tata Indigo etc. used as taxi operator. This is costly source of transportation in local area. Rail : In present the suburban railways services are in metro cities like Mumbai, Kolkata, Chennai and Delhi. In Delhi, presently three metro lines are operational and more under operation. Metro system is also under construction in Hyderabad, Chennai, Ahmadabad and Mumbai. Long distance public transportation:Railway : In India rail services introduced in 1853. More than 18 million passengers have used railway transportation. The rail network covers 6,909 stations over a total route length of around 63,465 km. The railway department of India provides more than 1.4 million employments in India. Due to so much economical and convenient source of traveling, most of Indias population travel for long distance by train. Road : Road transportation is an economic backbone of country. India is the second largest country in the world for consisting of large road transportation system. It has road network of 3,300,000 km, in which expressways is of 200km, national highways of 66,590km, state highway of 131,899 km, major district roads of 467,763km and rural area roads of 2,650,000km.
Sea Transport : In India, a government-owned company manages offshore and other marine transport infrastructure. It owns and operates about 35% of Indian tonnage and operates in practically all areas of shipping business servicing both national and international trades. It has a fleet of 79 ships of 27 lakh GT (48 lakh DWT) and also manages 53 research, survey and support vessels of 1.2 Lakh GT (0.6 Lakh DWT) on behalf of various government departments and other organizations. Personnel are trained at the Maritime Training Institute in Mumbai, a branch of the World Maritime University, which was set up in 1987. The Corporation also operates in Malta and Iran through joint ventures. COMPANY PROFILE
Bangalore Metropolitan Transport Corporation (BMTC) was formed, as an independent corporation with effect from 15-08-1997 after bifurcation from Karnataka State Road Transport Corporation, Vide Go No. HTD/127/TRA/96 dated 7-8-1997, in which it consisted of two divisions headed by director (BTS) since 1993. Prior to that since from 1961 it was under MSRTC/KSRTC.
Cosequent upon the formation of BMTC, the organization was structured to function under at two-tier system-viz., depots and the corporate office-with a view to have closer liaison and better control besides reducing the avoidable intermediary posts without
BMTC has its origin in a private company called Bangalore Transport Company Limited founded in 1940 providing transport service to the entire city with just 98 buses. In 1956 by an act it was undertaken by then government of Mysore and called as Mysore State Road Transport Corporation (MSRTC) and the city service as Bangalore Transport Service (BTS). BTS ran buses up to 10 miles radius in the city.
In 1961, the company was renamed as Karnataka State Road Transport Corporation (KSRTC) as the State Mysore was renamed as Karnataka. In 1993, BTS got recognition as a unit under a Director to function as two division-BTS (North) and BTS (South) In 1997, on August 15th, Government of Karnataka separated the two divisions-BTS (North) and BTS (South) from the mother concern KSRTC and formed BMTC as a separate entity.
Bangalore Metropolitan Transport Corporation (BMTC) is the biggest public transport corporation in India. It is the renowned public sector transport undertaking owned by the Government of Karnataka and governed by the Board of Directors, appointed by the state. BMTC is providing the most affordable and dependable transport service from decades to the people in and around Bangalore city. With its effective plans and efficient team effort, it is able to meet the growing needs of the increasing number of commuters and expanding city boundary limits. Transportation is the important factor in the advancement of civilization and is the lifeblood of commerce.
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Bangalore Metropolitan Transport Corporation It was once upon a time a loss making public sector organization. Today it is the only public sector transport corporation making profits. It is prospering by recognizing and adapting itself to the changes in technologies, needs, tastes and preferences and serving to the best. The prime objective of BMTC is to provide affordable, economic, efficient and commuter friendly service to the citizens of Bangalore. It has initiated many developmental programmes for the welfare of employees and the society. With the support of government of Karnataka and government of India under the Jawaharlal Nehru National Urban Renewal mission (Jn-NURM) it has come out with a vision plan 2005-2010 for the development of urban transport infrastructure, service levels and strengthening human resources. Major Bus Stations in 4 Prime Locations: Subashnagar (Kempe Gowda Bus Station Popularly known as Majestic Bus Stand) Shivajinagar (renovated and built as an ultra modern bus station with all amenities, subways, revenue yielding office spaces, parking lots, etc.,) City Market (Kalasipalyam) Shanthinagar (Built as an ultra modern bus station with all amenities, subways, revenue yielding office spaces, parking lots, etc) Wayside bus shelters: 2200 in city and sub-urban areas. Artistically built, spacious shelter are coming up in various prime localities providing comfortable seating facilities for the waiting passengers.
Central Workshop: Centrally located at Shanthinagar where bus body building, vehicles renovation for FC renewals and reconditioning of assemblies are the prime activities
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Vision: To provide world-class transport services to the citizens of Bangalore Metropolitan Area The Bangalore Metropolitan Transport Corporation came into existence in 1997 with the sole aim of providing public transportation to the city and sub-urban areas of Bangalore. The mission of the organization is to provide safe, reliable, clean and affordable travel to everyone. BMTC leads by example in being the only Bus Corporation within the city of Bangalore to ferry more than 4.2 million commuters. The organization comprises a fleet of over 6092 buses covering an area encompassed with a radius of 36 kilometers from the city centre. In a day BMTC operates on 583 city and 1785 sub urban routes, running 13 lakhs kilometers and making 79445 trips. BMTC has a 32000 strong labour force to carry out different aspects of BMTC bus operations. BMTC services the transport needs of the urban and sub-urban population in and around Bangalore. And, despite the differentiated base of the commuting population, BMTC reaches far and wide, in every nook and corner of the city making public transport an attractive travel choice for everyone. BMTC's strong hold in the area of public transportation in Bangalore is a testimony to its adoption of sound Management, HR, Quality and Environmental policies. The corporation also strives to bring about increased passenger comfort by integrating Intelligent Transport Systems (ITS) and Passenger Information system (PIS) in its daily operations. This helps to monitor its services better and provide quality services. Public feedback is also an important input in BMTC operations; a state of the art control centre is envisioned for the near future which will be a one point contact for addressing customer queries and feedback. sacrificing output or efficiency.
Mission: To provide safe, affordable, eco friendly efficient bus services through:

Benchmarking & improving management efficiency Enhancing its Technical & Operational efficiency Developing, testing and adopting new processes to achieve efficiency in bus services
Fostering skill development and attitudinal changes among its employees Valuing public feedback as an important input in improving operations to serve the commuters better
Discharging it social responsibilities by:
OBJECTIVE OF BMTC
1. Connecting all villages around the City with red board buses 2. Plying services to the city core to ease congestion with black board buses 3. Running limited stop buses to save time of the commuters 4. Providing comfortable & fast moving 'Pushpak' buses 5. Chartering services to various industries, schools and colleges 6. Offering subsidized travel to the deserving sections of the society 7. Issuing passes to various segments of the society
8. Providing Eco-friendly Parisara Vahini buses 9. Running Vestibule buses to carry more passengers 10. Plying Mini buses to provide transport to remote sub urban areas 11. Upgrading Transport services by operating High End Volvo buses in the city 12. Operating Vayu Vajra services to BIAL for airport commuting 13. Providing City sight seeing Curitiba buses 14. Special services to cater to the needs of ladies, and sick people
Operational Performance for the period from 2006-07 to 2011-12 (upto November-2011-Provisional)
Physical Performance: Parameter Depot 1.Schedules Added
200607 28 585 -216(P) =369
200708 30 585 -138(P) =447
200809 30 603 -23(P) =580
200910 33 417 -3(P) =414
201011 35 91 +0(P) =91
Nov10 35 96 +0(P) =96
Nov11 36 49 15(P) =34
2.Schedules Operated
4116 +210(P) =4326
4701 +72(P) =4773
5304 +40(P) =5344
5721 +37(P) =5758
5812 +37(P) =5849
5817 +37(P) =5854
5861 +22 =5883
3.New Vehicles added
794 -216(P) =578 208 4396 +210(P) =4606 3.0 9.14 200.13 231.7 94.0 4.55 2813 0.09
623 -138(P) =485 232 4819 +72(P) =4891 2.8 10.29 218.99 227.2 93.6 4.45 2952 0.08
949 -23(P) =926 294 5502 +40(P) =5542 2.8 11.13 248.63 227.9 94.5 4.37 2761 0.07
1218 -3(P) =1215 664* 6056 +37(P) =6093 2.4 12.10 277.34 225.6 93.7 4.11 2204 0.05
58 +0(P) =58 40** 6074 +37(P) =6111 2.5 12.55 339.78 222.1 92.3 4.01 1865 0.04
58 +0(P) =58 29** 6085 +37(p) =6122 2.4 12.47 340.14 221.6 92.0 4.01 1191 0.04
28 -15(p) 13 21 6078 +22(p) 6100 2.9 12.76 386.52 224.7 93.2 3.98 1541 0.05
4.Vehicles Scrapped 5.Vehicles Held
6.%age Cancellation 7. Effective Kms. per day(Lakhs) 8.Traffic Revenue Per day (lakhs) 9.Veh. Utilisation (Kms.) 10.Fleet Utilisation (%age) 11.K.M.P.L (HSD) 12.No.of Breakdowns 13.Rate of Breakdowns/ 10,000 Kms. 14.No. of Accidents 15.Rate of Accidents/ Lakh Kms. 16.Staff Position
446 0.14 20582
578 0.15 25542
637 0.15 27648
565 0.12 30996
556 0.11 32953
383 0.12 32544
370 0.11 32885
(P) Private. Vehicles * Including 180 Amanath vehicles & 139 Vehicles transferred to NWKRTC
** Including 10 vehicles transferred to NWKRTC & 8 Volvo Vehicles transferred to KSRTC. .
Management: The amended RTC Act 1982 provides for the management of the corporation by Board of Directors. The board of the Bangalore Metropolitan Transport Corporation as on 31st march 2009 consisted of 12 official Directors. The government of Karnataka appoints the official Directors representing the state government.
Administrative Setup: The corporation is functioning with two-tier system of administration with corporate office & depots. There were 30 Depots & two central workshops under its jurisdiction as on 31-03-2009.
Growth during 2008-09: BMTC is catering to the transport services in city & suburban areas of Bangalore in a radius of about 40.4 kms & the area of operation is expanded from 3527 sq. kms to 5130 sq. kms in view of greater Bangalore. The operation have improved during the year by adding 580 schedules. The fleet strength was increased from 4891 to 5542, 977 vehicles ( 949 new vehicles & 28 private vehicles taken over by BMTC ) were added, 23 private hired vehicles were curtailed & 294 aged vehicles were scrapped from fleet during the year.
AWARDS CONFERRED ON BMTC:The corporation has been conferred with the following awards during the year 2008-2009. Transport minister trophy for the state road transport undertakings with lowest accident rate for the year 2005-06 (winner-urban category) Transport Minister trophy for the state road transport undertakings with lowest accident rate for the year 2006-07 ( winner-urban category) Winner of minimum operational cost award for 2006-07 by ASRTU.
INNOVATIVE TECHNOLOGY FOR EFFECTIVE TRANSPORT MANAGEMENT INITIATIVES: Information on BMTC website www.bmtcinfo.com Bus route information and query on website. Payment of salary to employees through electronic clearance system. Online vehicles tracking and monitoring system using GPS-GIS technology on 500 vehicles. Online registration of complaints for 12 hours in a day through call center facilities for commuters through outsourced agencies. Issue of passenger tickets through electronic ticket vending machines in 1489 buses on pilot buses. Electronic LED based destination board in buses on pilot basis. Online passenger information systems in Volvo buses.
EMPLOYEE WELFARE SCHEMES: Hosa Belaku scheme- scheme of providing financial assistance to employees suffering from major illness and chronic diseases. Uniform has been issued to administrative staff to maintain dress code. Peer group initiative. Entering into MOU with selected list of 39 hospitals for medical treatment for employees and their dependants. Voluntary Retirement scheme and welfare fund (VRS & WF) for distressed employees. Janatha group insurance scheme for accidental benefits to the employees, for Rs 1.00 lakh for loss of life.
BMTC BOARD OF DIRECTORS
SL. NO.
NAME
DESIGNATION
1.
Sri. R. Ashok Honble Transport Miniter, Govt. of Karnataka.
Chairman
2.
Sri. Syed Zameer pasha, IAS Managing director, BMTC.
Official director
Sri D. Venkateswara Rao, IAS 3. Principal secretary to Govt. Public sector enterprises, M.S.Building, Bangalore Official director
4.
Sri siddaiah, IAS Commissioner, BDA, Bangalore
Official director
Sri M.K. Shankerlingegowda, 5. IAS Secretary to Govt, Transport Department, M.S. Building, Bangalore Official director
6.
Sri. Anilkumar Jha,IAS Secretary to Govt. Finance(expenditure), Bangalore.
Official director
Sri. P. S Sandhu I.P.S., Director ( S, V & E ), 7. BMTC, Bangalore.
Official director
Sri. G.M Hayath, IPS Director ( P & E ) 8. KSRTC, Bangalore.
Official director
9.
Sri. Padam kumar Garg, IPS Director ( Project ), BMTC, Bangalore.
Official director
10.
Sri. Gaurav Gupta, IAS Managing Director, KSRTC, Gulbarga.
Official director
11. Ssri. Shankar Patil, KAS (Sr.Scale) Managing Director, NEKRTC, Gulbarga. Official director
12.
Sri. A.S. Patil, KAS (Senior Scale) Managing director, NWKRTC, Hubli.
Official director
RESEARCH METHODOLOGY DEFINITION: Research refers to a search for knowledge. It can be defined as a scientific and systematic search for pertinent information on a specific topic. Research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deduction and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis Clifford Wood. RESEARCH METHODOLOGY It is a way to systematically solve the research problem. It may be understood as science of studying how research is done scientifically. In it we study the various steps that are generally adopted by the researcher in studying his research problem along with the logic behind them. In general methodology is an optional framework within which the facts are placed so that the meaning may be seen more clearly. The sources of data shown that designing of a research plan calls for decision on the data sources are research approaches (primary and secondary data) research instruments (observation survey experiment) sampling plan and contact methods (personal interviews). RESEARCH DESIGN A research design is the determination and statement of the general research approach or strategy adopted for the particular project. It is the heart of the planning. If the design adheres to the research objectives, it will ensure that the client need will be served. 26 Research design is a plan structured and strategies of investigation. It is the arrangement of condition and analysis of data in a manner to combine
relevance to the research purpose with economy in procedure. jective it was necessary to talk to the customers and public to draws the conclusions regarding the objective. information; a questionnaire has to be designed. The questionnaire was designed in such a manner to achieve the objective of the research.
TYPE OF RESEARCH In this project Descriptive Research has been used. Descriptive Research: This is kind of research structure which is concerned with describing the characteristics of the problem. In this way the main purpose of such a research design is to present a descriptive picture about the marketing problem on the basis of actual facts. For this it is important to obtain the complete and actual information about the subjects. Research Objective: The Financial Planning is vast in nature. It is intended to provide a birdseye view of the clients assets. The Financial planner has to have bottomless knowledge of markets, funds etc. Considering this fact, the scope of the study is defined to satisfy following objectives: cial planning process, and certain factors like time horizon, risk tolerance etc. This project consist of Quantitative as well as Qualitative data as data collect for preparing plan is both the types Gathering Data There are two types of data to gather from the client - Quantitative
- Qualitative. Quantitative Data Quantitative data provides specific information concerning a client along with numerical details Concerning his/her financial status. It also provides the basis for the many financial analyses that the financial Planner needs to perform. Examples of quantitative data include the following:
-owned business information
Qualitative Data Qualitative information provides general information concerning a client's goals, lifestyle, health status, risk tolerance level, employment status, hobbies, attitudes, and fears. Knowing a client's specific goals, such as planning to move when retiring at age fifty-five, funding a child's college education and expenses, starting an expensive hobby just before retirement, or traveling extensively during retirement, 28 is important to the success of any financial plan. Examples of qualitative data include the following: lient and family members
Data Sources: SECONDARY DATA: which includes Kotak Mahindra Bank, Books, Business Newspapers, Websites, etc LIMITATIONS: 1. The project work is mainly based on the above mentioned sources of information. 2. Limitation of client in investing in particular kind of asset based on his age. 3. Time limitation A research design is a logical and systematic plan prepared for directing an research study. It constitutes the blue print for the collection, measurement and analysis of data. It provides a systematic plan of procedure for the research to follow.
1.Introduction: It is a well known fact that one cannot arrive at the definite conclusion about the financial health of an enterprise simply studying and scanning of the absolute figures contained in the conventional form of financial statements namely revenue statement and balance sheet.
2. Title of the project: A STUDY ON FINANCIAL STATEMENT AND ANALYSIS AT BMTC BANGALORE.
3. Statement of the problem: The BMTC has been in truth, emerged as an important segment of transport industry. BMTC has occupied a momentous role in the economy in the terms of meeting the requirements of the people related to transport industry. The profitability position of the BMTC is adversely impacted. 4. Scope of the study: Personal Financial Planners are not just for wealthy people. Every individual can benefit from objective help to create, grow, accumulate and utilize wealth to fulfil ones personal goals, family goals and other lifestyle objectives systematically without any anxiety. Financial planners can guide individuals to achieve their ultimate aim of spending retired life peacefully without compromising living standards. A Qualified financial planner will provide advice on.
lanning
Financial Planning is a profession for people with good communication skills combined with knowledge of how financial service industry works. As a Financial Planner one could work for a bank, insurance company, a brokerage house or have own practice. Most important is to understand that the suitability of products you are guiding people to purchase is based on their Risk Appetite, Age and
Time Frame of Goals and Objectives. Financial Planners need to update themselves constantly on new products, services and tax laws that might be good for their clients. This is a field that requires a life time of continuing education. A Trusted Financial Planner can play an important role in peoples lives helping them to achieve dreams such as owning a home, seeing their childrens education and enjoy an active retirement. The study is conducted in BMTC central office, Bangalore. It is confined only to the finance and accounts department of BMTC and further study has been restricted to financial analysis through the financial ratios.
5. Literature review: This project was undertaken to know what exactly is the Financial Planning, How it is carried out ,Who carries it out, Why it is carried out, When it is carried out ,and the most important What is the benefit of carrying it out. Below my question were answered. Basically Financial Planning is the process of meeting life goals through the proper management of your finances. There is a need for financial planning because the financial situation in the country has changed in the last few years, this has changed in such a manner that it will be difficult for one to maintain a decent standard of living with the current means this requires financial planning and in addition there are also several individual specific factor that has to be fulfilled. Financial planning provides direction and meaning to ones financial decisions. The process involves gathering relevant financial information, setting life goals, examining customer current financial status and then coming up with a plan for customer on how he can meet with his goals. The process that is followed by the Kotak bank is the planner first discuss the general recommendations with the client informally, this allows the clients to indicate their preferences and opinions on the options that have been designed. Once the planner and the client agree on the recommendations, a concise written proposal is prepared along these lines:
implications of financial plan.
plan, supported by financial statements. -by-step implementation and monitoring plan. The dissertation report titled A STUDY ON FINANCIAL STATEMENT AND ANALYSIS AT BMTC, BANGALORE. Is authentic and original work has not been submitted to Bangalore university or any other university before.
6. Objectives of the study: 1. 2. To examine the overall financial performance of the selected unit. To predict the financial health and viability of the unit in the years to come with an objective to improve its operational efficiency
and effectiveness, productivity and profitability. 3. To understand the current approaches and methods of analyzing financial statements. 4. To study the financial analysis. 5. To make overall financial performance of the BMTC. 6. To impact the practical knowledge on methods. 7. To offer recommendations.
7. Sources of data:PRIMARY DATA:Primary data is a data collected through gathering the information from
different department managers and officers of the company to get information about the company and its activities. Having face to face discussion with the company officials. By taking guidance from company guide and staff members.
SECONDARY DATA: Secondary data are those types of data, which have already been collected by some other persons for their purpose and published secondary data are usually in the shape of finished statements. Collection of secondary data have the advantages of being less expensive and time consuming . for the present report following used. Broachers Previous year balance sheets Website Annual reports
8. Limitations of the study: All the possible care has been taken to collect the information and make the study as authentic as possible. However it is subject to certain limitation. They are as under. The time constraint limited the scope of the study. Based on limited information it is not possible to arrive at a proper conclusion.
THEORITICAL BACKGROUND
Definition:Financial Planning is the process of identifying a persons financial goals, evaluating existing resources and designing the financial strategies that help the person to achieve those goals. Process of Financial Planning:Financial planning is a highly personalized service. It is not a product. It is a cyclical service that constantly repeats as client needs change over time. Preparation and implementation of the financial plan is a long-term relationship and not a one-off exercise. For the success of the financial planning exercise, it is essential that the prospective client should have complete confidence in the financial planners capabilities. Confidence is built when the planner can demonstrate adequate knowledge, technical depth and complete dependability. Also remember that financial planning is a two-way interaction between the client and the planner. It is not and should not be treated as a one-way prescription which is to be given by the planner to the client. Both the planner and the client have certain responsibilities to make the exercise a success. The Planning Process:The preparation of the financial plan is a multi-dimensional process. It requires the planner to collect as much information as possible about the current resources, assets and liabilities of the client. The planner needs to analyze the collected information from a number of different aspects to develop an optimal financial plan. To prepare and implement a comprehensive and effective financial plan, the Financial Planning Standards Board recommends the following 6-step process:Let us look at the above steps in more detail. 1. Establish the Client-Planner Relationship Before approaching a client, it is important for the financial planner to clearly understand his own role. The role of the financial planner is not to suggest get-rich-quick schemes. Rather, it is to evaluate and study the clients' needs, gather and analyze data and prepare a financial plan for now and for the future. Preparation and implementation of the financial plan is a long-term relationship and not a one-off exercise. A financial planner has to prepare a plan that helps his clients:-
To achieve this, the planner needs to answer the following questions:
-term needs? situation?
goals? teacher, or director?
Evaluate Qualitative Factors Qualitative factors have a significant bearing on the financial plan for a client. The client's tolerance towards risk, investment preferences, current health status etc. need to be kept in mind while evaluating alternative Strategies. 4. Develop appropriate strategies and present the financial plan A financial planner needs to develop appropriate strategies for the client in the following areas:
Cash flow management Cash flow management is the means for funding clients goals in other planning areas, therefore; generally it is the starting point of the planning process. Once the cash flow management plan is in place, the inflows have to be channeled in one of the three areas - expenses, reserves for emergencies and capital accumulation. 34 Income Cash Flow Management Daily Expenses Emergency Funds Capital Accumulated Once your clients have planned to maximize income and minimize spending, they need the planner's help to plan for their insurance, investment, education, income tax, retirement, and their estate. The Benefits of Financial Planning Financial Planning helps you give direction and meaning to your clients financial decisions. It allows him to understand how each financial decision affects other areas of finance. For example, buying a particular investment product may help your client to pay off his mortgage faster or may delay his retirement significantly. By viewing each financial decision as a part of a whole, you may help your client consider the long term and the short term effects on his life goals. You will help them feel more secure. 35 Assessing your current wealth Net worth: - Your assets are the things that you own. You probably own assets that have many different forms, including cash, investments, personal property, real estate etc. Definition:Your net worth is the difference between the totals of your assets and liabilities. In other words, if you sold all your assets for the values stated and paid off all your debts, the amount left over would be your net worth. The net worth of a person is a measure of a persons financial position as of the date of the personal balance sheet. This relationship is shown below: Items of Value - Amounts Owed = Net Worth 36
CHAPTERISATION
Chapter:-1
INTRODUCTION
Chapter:-2
INDUSTRY PROFILE
Chapter:-3
COMPANY PROFILE
Chapter:-4
RESEARCH METHODOLOGY
Chapter:-5 INTERPRETATION
DATA ANALYSIS AND
Chapter:-6 CONCLUSIONS
FINDINGS,SUGGESTIONS AND
ANNEXURE
BIBLIOGRAPHY
DATA ANALYISI AND INTERPRETATION
MEANING OF DATA ANALYSIS The analysis of data is the most skilled task in the research process. It calls for the researchers own judgment and skill. Analysis means a critical examination of the assembled and grouped data for studying the characteristics of the object under study and for determining the patterns of relationships among the variables relating to it.
MEANING OF INTERPRETATION The interpretation of data is a very difficult task and requires a high degree of skill, care, judgment and objectively. The drawing of validly authentic inferences from the scientifically analysed data and presenting these inferences unbiasly, is known as interpretation of data.
CHAPTER 4 ANALYSIS AND INTERPRETATIONS COMPARITIVE BALANCE SHEET FOR THE YEAR 2003-04 AND 2004-05
TABLE NO-4.1 Note: Secured loan include Loan from state government .Principal amount Rs 72.10 and accrued interest Rs 57.32 CAPITAL AND LIABILITIES Particulars Equity Capital Equity Shares - State Government Capital Contribution Karnataka Government Cap[ital Reserves and funds Reserve Depreciation Reserve Loans Secured loan Term Loan from Commercial Banks K.U.I.D.F.C Liabilities Current liabilities and provisions Provision for Bad and doubtful debts/advances Deposits Total Current liabilities Total liabilities Net Profit (net profit and accumulated profit) GRAND TOTAL PROPERTY AND ASSETS Fixed Assets Fixed Assets Capital Work in progress Investments Insurance and Accident Reserve Fund Current assets Inventories Sundry debtors Advances Interest earned on investment but not received Stock adjustment account Deposit by the Corporation Pre-paid expenses Cash in hand Rs thousand Year 2003-04 Rs thousand Year 2004-05
Differenc e 0 0 16,53,66 28,52,65
64,59,48 12,25 8,63,28 124,00,06
64,59,48 12,25 25,16,94 152,52,71
0 0 191.56 23.00
21,41,98 13,54,90 42,78,29 ----15,20,96 58,56,57 92,96,13 92,05,90 383,66,52
16,09,12 12,84,30 49,16,08 ----14,85,48 64,01,56 92,94,98 172,07,23 507,43,59
-5,32,86 -70,60 6,37,79 -----35,48 6,02,31 -1.15 80,01,33 123,77,07
-24.88 -5.21 15.00 -----2.33 10.39 87.00 32.26
276,88,32 33,49,23 3 8,23,85 10,62,31 13,43,91 3,47 6,27,22 2,70,75 2,93,68
379,66,72 27,01,44 3 9,25,60 5,89,96 7,13,38 3,47 5,99,74 21,63 2,43,95
102,78,40 -6,47,79 0 1,01,75 -4,72,35 -6,30,53 0 -27,48 -2,49,12 -49,73
37.12 -19.34 0 12.35 -44.46 -46.92 0 -4.38 -9.02 -16.93

Page 43
AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE.
Cash at bank Total Current assets Deferred revenue expenditure GRAND TOTAL Administrative Management College
28,27,29 72,52,48 76,46 383,66,52
69,33,74 100,31,47 43,93 507,43,59
41,06,45 27,78,99 -32.53 123,77,07 25
145.24 38.32 -42.55 32.26
Page 44
Bangalore Metropolitan Transport Corporation Graph No-4.1 Graph showing increase in the source of funds in the year 2004 -05
Source of fund
180 160 140 120 100 80 60 Souce Fund s
40 20 0 2003-04 Year 2004-05
Source of Funds: includes equity and contribution from the state government, Reserves and funds Interpretation Comparative Balance sheet of the BMTC reveals that there has been an increase in the fixed assets of the company during 2005 of Rs 102,78,40 {in thousand}i.e. 37.12%While the long term loans from commercial banks and K.U.I.D.F.C decreased by Rs 5,32,86 & 70,60 which has resulted in un favorable growth. The current assets have increased by Rs 27,78,99 i.e. 38.32% and cash has increased by 41,06,45 i.e. 145.24% while current liabilities also increased by only 10.39%.This confirms that liquidity position of the company is improves. There is a significant increase in reserves; the
overall financial position of the company is favorable.
COMPARITIVE BALANCE SHEET FOR THE YEAR 2004-05 AND 2005-06 TABLE NO 4.2
Administrative Management College
26
Page
Bangalore Metropolitan Transport Corporation
CAPITAL AND LIABILITIES Particulars Equity Capital Equity Shares - State Government Capital Contribution Karnataka Government Cap[ital Reserves and funds Reserve Depreciation Reserve Loans Secured loan Term Loan from Commercial Banks K.U.I.D.F.C Liabilities Current liabilities and provisions Provision for Bad and doubtful debts/advances Deposits Total Current Liabilities Total liabilities Net Profit(net profit & accumulated profit) GRAND TOTAL PROPERTY AND ASSETS Fixed Assets Fixed Assets Capital Work in progress Investments Insurance and Accident Reserve Fund Current assets Inventories Sundry debtors Advances Interest earned on but not received Stock adjustment account Deposit by the Corporation Pre-paid expenses
Rs thousand Year 2004-05
Rs thousand Year2005-06 Differenc e 64,59,48 28,12,25 37,42,87 194,72,63 0 28,00,00 12,25,93 42,19,92
64,59,48 12,25 25,16,94 152,52,71
0 22957.14 48.71 27.67
16,09,12 12,84,30 49,16,08 -----14,85,48 64,01,56 92,94,98 172,07,23 507,43,59
11,61,42 14,80,38 32,04,67 -----17,05,43 49,10,10
-4,47,70 1,96,08 -17,11,41 ----2,19,95 14,91,46
-27.82 15.27 34.81 ----14.81 23.30 18,75 51.76 30.37
75,51,90 17,43,08 261,13,08 89,05,85 661,52,21 154,08,62
379,66,72 27,01,44 3 9,25,60 5,89,96 7,13,38 0 3,47 5,99,74 21,63
433,51,92 55,86,10
53,85,20 28,44,66 3
14.18 106.78 0 4.08 7.58 27.10 0 ----37.10 16.46

Page 47
9,63,39 5,45,26 9,06,64 4,38,38 3,47 8,22,27 18,07
37,79 -44,70 1,93,26 4,38,38 ----2,22,53 -3,56
Cash in hand Cash at bank Total Current assets Deferred revenue expenditure GRAND TOTAL Administrative Management College
2,43,95 69,33,74 100,31,47 43,93 507,43,59
2,54,19 10,24 132,43,71 63,09,97 171,95,38 71,63,91 18,80 -25.13 661,52,21 154,08,62 27
4.20 91.00 71,41 57.20 30.37
Page 48
Bangalore Metropolitan Transport Corporation Graph No-4.2 Graph showing increase in the source of funds in the year 2005-06
250 200 Sourse of 150 funds 100 50 0 2004-05 Year 2005-06
Source of Funds
Source of Funds: includes equity and contribution from the state government, Reserves and funds Interpretation Comparative balance sheet reveals that during the year 2006 there is a drastic increase in the items of the balance sheet like Reserve and depreciation reserve by 48.71%and 27.67% respectively and there is increase in the fixed assets of the firm by 14.18% and capital work in progress increased by 106.78% .Current assets has increased by 71.41% while current liabilities decreased by 23.30% which shows that there is increase in the current financial position of the firm which has resulted in favorable growth.
Page
28
Bangalore Metropolitan Transport Corporation COMPARITIVE BALANCE SHEET FOR THE YEAR 2005-06 AND 2006-07 TABLE NO 4.3 Graph No-4.3 CAPITAL AND LIABILITIES Particulars Equity Capital Equity Shares - State Government Capital Contribution Karnataka Government Cap[ital Reserves and funds Reserve Depreciation Reserve Loans Secured loan Term Loan from Commercial Banks K.U.I.D.F.C Liabilities Current liabilities and provisions Provision for Bad and doubtful debts/advances Deposits Total Current liabilities Total liabilities Net Profit(net profit and accumulated profit) GRAND TOTAL PROPERTY AND ASSETS Fixed Assets Fixed Assets Capital Work in progress Investments Insurance and Accident Reserve Fund Investment against funds Current assets Inventories Sundry debtors Advances Interest earned on investment but not received Stock adjustment account Deposit by the Corporation Rs thousand Year 2005-06 Rs thousand Year 2006-07 Differenc e 104,59,48 53,56,72 65,23,00 236,57,91 40,00,00 25,44,47 27,80,13 41,85,28
64,59,48 28,12,25 37,42,87 194,72,63
61.92 90.48 74.28 21.49
11,61,42 14,80,38 32,04,67 ----17,05,43 49,10,10 75,51,90 261,13,08 661,52,21
6,65,76 16,99,16 39,44,64 17,32 21,74,94 61,19,58 85,01,82 460,12,07 1004,11,00
-4,95,66 -42.68 2,18,78 14.78 7,39,97 17,32 4,69,51 12,09,48 9,49,92 198,98,99 342,58,79 23.10 --27.53 24.63 12.53 76.21 51.79
433,51,92 55,86,10 --------9,63,39 5,45,26 9,06,64 4,38,38 3,47 8,22,27
582,42,69 91,56,50 20,00 193,82,00 16,44,28 4,45,78 12,04,58 7,64,47 ---8,93,72
148,90,77 35,70,40 20,00 193,82,00
34.35 63.92 -------
6,80,89 70.68 -99,48 -18.24 2,97,94 32.86 3,26,09 74.39 -------71,45 8.69
Page 51
Pre-paid expenses Cash in hand Cash at bank Total Current assets Deferred revenue expenditure GRAND TOTAL Administrative Management College
18,07 2,54,19 132,43,71 171.95 18,80 661,52,21
7,30,65 7,12,58 4,98,13 2,43,94 95.97 73,90,63 -58,53,08 -44.20 135.72 -36.23 -21.07 37,57 18,77 99.84 1004,11,00 342,58,79 51.79 29
Page 52
Bangalore Metropolitan Transport Corporation Graph showing increase in source of funds for the year 2006 and 2007
500 450 400 350 300 Source of funds 250 200 S 150 o 100 50 0 2005-06 Year 2006-07
Source of Funds: includes equity and contribution from the state government, Reserves and funds Interpretation Comparative Balance sheet during the year 2007 reveals that there has been increase in the fixed assets of Rs 148,90,77 i.e. 34.35% . While Long term liabilities from K.U.I.D.F.C decreased by Rs 2,16,78 i.e. by 42.08% and term loan from commercial bank decreased by 40 crore i.e 61.92% .The policy of the company is to purchase the fixed assets from the equity capital made by the Karnataka state government there by not affecting the working capital. The current liabilities have decreased by Rs 36.23 i.e 21.02% while the current liabilities increased by 12,09,48.But the amount of current assets compared to current liabilities is
more that reflects that any variation in current liability is not affecting the liquidity position of the firm.
COMPARITIVE BALANCE SHEET FOR THE YEAR 2006-07 AND 2007- 08
30
Page
Bangalore Metropolitan Transport Corporation TABLE NO 4.4
CAPITAL AND LIABILITIES Particulars Equity Capital Equity Shares - State Government Capital Contribution Karnataka Government Cap[ital Reserves and funds Reserve Depreciation Reserve Loans Secured loan Term Loan from Commercial Banks K.U.I.D.F.C Liabilities Current liabilities and provisions Provision for Bad and doubtful debts/advances Deposits Total Current liabilities Total liabilities Net Profit(net profit and accumulated profit) GRAND TOTAL PROPERTY AND ASSETS Fixed Assets Fixed Assets Capital Work in progress Investments Insurance and Accident Reserve Fund Investment against funds Current assets Inventories Sundry debtors Advances Interest earned on investment but not received Deposit by the Corporation Pre-paid expenses Cash in hand Cash at bank
Rs thousand Year 2006-07
Rs thousand Year 2007-08 Differenc e 104,59,48 68,93,88 77,38,48 287,46,19 ----15,37,16 12,15,48 50,88,28
104,59,48 53,56,72 65,23,00 236,57,91
----28.70 18.63 21.51
6,65,76 16,99,16 39,44,64 17,32 21,74,94 61,19,58 85,01,82 460,12,07 1004,11,00
1,82,42 12,62,82 31,37,03 21,37 41,92,42 73,29,45 87,96,06 560,01,52 1186,35,61
-4,83,34 -4,36,34 -8,07,61 4,05 20,17,48
-72.60 -25.68 -20.47 23.38 92.76
99,89,45 21.71 182,24,61 18.15
582,42,69 91,56,50 20,00 193,82,00 16,44,28 4,45,78 12,04,58 7,64,47 8,93,72 7,30,65 4,98,13 73,90,63
699,93,27 161,06,52 20,00 193,82,00 22,99,68 10,39,77 10,91,02 7,41,88 9,72,74 6,67,03 4,15,58 58,92,56
117,50,58 69,50,02 --------6,55,40 5,93,99 -1,13,56 -22,59 79,02 -63,62 -82,55 -14,98,07
20.18 75.90 0 0 39.86 133.25 -9.43 2.95 8.84 -8.71 -16.57 20.27
Page 55
Total Current assets Deferred revenue expenditure GRAND TOTAL
135,72,00 37,57 1004,11,00
131,19,00 4,53,00 13,56 -24,01 -63.91 1186,35,61 182,24,61 18.15
31
Page 56
Graph No-4.4 Graph showing increase in source of funds for the year 2007-08
source of funds
450 400 350 300 250 200 Souce of f 150 100 50 0 2006-07 Year 2007-08
Source of Funds: includes equity and contribution from the state government, Reserves and funds Interpretation Comparative Balance sheet for the year 2008 reveals that there is increase in fixed assets by 117,50,58 i.e. 20.18%and the long term securities from K.U.I.D.F.C and term loan from commercial bank decreased by Rs 4,83,34 and 4,36,34 respectively and equity capital increased by 15,37,16 i.e 28.70%.This shows that the company is increasing its equity capital and reducing its long term external loan. The variations in current liabilities are not affecting the liquidity position of the firm.
TABLE NO-4.5: COMMON SIZE STATEMENT
32
Page
Bangalore Metropolitan Transport Corporation Graph No-4.5 LIABILITIES Particulars Equity Capital State Govt Capital Contribution State Govt Reserves and funds Reserve Depreciation Reserve Loans Secured loan Term Loans K.U.I.D.F.C Liabilities Current liabilities & Provisions Provision for Bad &doubtful debts/ Deposits Net Profit Grand Total ASSETS Fixed Assets Fixed Assets Capital Work in progress 16.8 64,59,48 4 0.03 2 2.25 64,59,48 12.73 64,59,48 9.76 2004 Amount % 2005 Amount % 2006 Amount % 2007 Amount % 104,5 9,48 10.4 2008 Amount % 104, 59,48 8.82
12,25 8,63,28
12,25
0.02
28,12,25 4.25 37,42,87 5.66
53,56,72 5.3 65,23,00 6.5
68,93,88 5.81 77,38 ,48 6.52
25,16,94 4.96
124,00,0 32.3 6 2 21,41,98 5.58 13,54,90 3.53
152,52,7 194,72,6 236,57,9 1 30.06 3 29.44 1 23.5 16,09,12 3.17 12,84,30 2.53 11,61,42 1.76 14,80,38 2.24 6,65,76 0.7 16,99,16 1.7
287,46,1 9 24.23 1,82,42 0.15 12,62,82 6.78
31,37, 11.1 42,78,29 5 49,16,08 9.69 32,04,67 4.84 39,44,64 3.9 03 21, 17,32 21,74,94 460,12,0 7 1004,11, 0 0.02 2.17 45.8 100 37 41,92,42 560,01,5 2 1186,35, 6 699,93, 27 58.99 0.02 3.53 47.20 100 2.64
15,20,96 3.96 23.9 92,05,90 9 383,66,5 2 100
14,85,48 2.93 172,07,2 3 33.91 507,43,5 9 100
17,05,43 2.58 261,13,0 8 39.47 661,52,2 1 100
276,88,3 72.1 2 7 33,49,23 8.73
582,4 379,66,7 433,51,9 2 74.82 2 65.53 2,69 58 27,01,44 5.32 55,86,10 8.44 91,56,50 9.1
161,06,5 2 13.58
Page 59
Investments Insurance Accident Reserve Fund Investment against funds Current assets Inventories Sundry debtors Advances Interest earned but not received Stock adjustment account Deposit by Corporation Pre-paid expenses Cash in hand Cash at bank Deferred revenue exp
20,00
0.02
20,00
0.02
193,82,0 193,82,0 0 19.30 0 16.34 8,23,85 2.15 10,62,31 2.77 13,43,91 3.50 9,25,60 5,89,96 7,13,38 1.82 1.16 1.41 9,63,39 5,45,26 9,06,64 4,38,38 1.46 0.82 1.37 0.66 16,44,28 1.64 4,45,78 0.44 12,04,58 1.20 7,64,47 0.76 22,99,68 10,39,77 10,91,02 7,41, 88 1.94 0.88 0.92 0.63
3,47 6,27,22 2,70,75 2,93,68
0.90 1.63 0.71 0.77
3,47 5,99,74 21,63 5,43,95
0.68 1.18 4.26 0.48
3,47 8,22,27
0.01 1.24 8,93,72 0.89 9,72,74 6,67,03 4,15,58 0.82 0.56 0.35
28,27,29 7.37 76,46 0.20
18,07 0.03 7,30,65 0.73 2,54,19 0.38 4,98,13 0.50 132,43,7 69,33,74 13.36 1 20.02 73,90,63 7.36 43,93 0.09 18,80 0.03 37,57 0.04
58,92,56 4.97 13,56 0.01
383,66,5 Grand Total 2 100
507,43,5 9 100
661,52,2 1 100
1004,11, 0 100
1186,35, 6 100
33
Page 60
Bangalore Metropolitan Transport Corporation Graph showing fluctuations in the current assets From 2003-04 to 2007-08
30 25 20 Net Current Assets

15
Net current 10 Assets 5 0 2004 2005 2006 2007 2008 Year
Interpretation Common size statement revealed that there is a greater fluctuation in the net current assets position against the total of balance sheet by 18.9%, 19.78%, 26%, 13.52%, and 11.06% respectively in the year starting from 2004 to 2008 due to increase and decrease of current liabilities position and provisions.
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34
Bangalore Metropolitan Transport Corporation TABLE NO 4.6- TREND ANALYSES LIABILITIES Particulars 2004 Amount % 2005 Amount % 2006 Amount % 2007 Amount % 2008 Amount %
Equity Capital State Govt 64,59,48 100 Capital Contribution State Govt 12,25 100 Reserves and funds Reserve 8,63,28 100 Depreciation 124,00,0 Reserve 6 100 Loans Secured loan Term Loans 21,41,98 100 K.U.I.D.F.C 13,54,90 100 Liabilities Current liabilities & Provisions 42,78,29 100 Provision for Bad &doubtful debts/ Deposits 15,20,96 100 77,40,00 100 Net Profit Grand Total ASSETS Fixed Assets Fixed Assets Capital Work in progress Investments 383,66,5 2 100
64,59,48 100
64,59,48 100
104,5 104, 9,48 161.9 59,48 161.9
12,25
28,12,25 2295 53,56,72 4372 68,93,88 5627 7 8 6 77,38 25,16,94 291.5 37,42,87 433.7 65,23,00 755.6 ,48 896.4 152,52,7 1 123 194,72,6 236,57,9 287,46,1 3 157.0 1 190.8 9 231.8 4
100
16,09,12 75.12 11,61,42 54.22 6,65,76 31.08 1,82,42 8.52 12,84,30 94.79 14,80,38 109.5 16,99,16 125.4 12,62,82 93.20 31,37, 49,16,08 114.9 32,04,67 74.91 39,44,64 92.20 03 21, 17,32 37 14,85,48 97.67 17,05,43 112.1 21,74,94 145 41,92,42 275.6 80,01,00 103.4 114.88 148.4 224.32 289.8 140.23 181.2 507,43,5 661,52,2 1004,11, 1186,35, 9 132.3 1 172.4 0 261.7 6 309.2 582,4 699,93, 210.4 27 252.6 73.32
276,88,3 2 100 33,49,23 100
379,66,7 433,51,9 2 137.1 2 156.6 2,69
161,06,5 27,01,44 80.66 55,86,10 166.8 91,56,50 273.4 2 480.9
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Insurance Accident Reserve Fund Investment against funds Current assets Inventories Sundry debtors Advances Interest earned but not received Stock adjustment account Deposit by Corporation Pre-paid expenses Cash in hand Cash at bank Deferred rev exp
100
20,00 193,82,0 0
20,00 193,82,0 0
8,23,85 100 10,62,31 100 13,43,91 100
9,25,60 5,89,96 7,13,38
112.3 9,63,39 55.54 5,45,26 53.68 9,06,64 4,38,38
116.9 16,44,28 199.6 22,99,68 279.1 51.33 4,45,78 41.97 10,39,77 97.88 67.46 12,04,58 89.63 10,91,02 81.18 7,41, 7,64,47 88
3,47 6,27,22 2,70,75 2,93,68
100 100 100 100
3,47 5,99,74 21,63 5,43,95
100
3,47 131.1 8,93,72 142.5 9,72,74 155.1
95.62 8,22,27
28,27,29 100 76,46 100
18,07 6.67 7,30,65 269.8 6,67,03 246.3 83.07 2,54,19 86.55 4,98,13 169.6 4,15,58 141.5 132,43,7 69,33,74 245.2 1 468.4 73,90,63 261.4 58,92,56 208. 43,93 57.45 18,80 24.59 37,57 49.13 13,56 17.73
383,66,5 Grand Total 2 100
507,43,5 661,52,2 1004,11, 1186,35, 9 132.3 1 172.4 0 261.7 6 309.2
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Bangalore Metropolitan Transport Corporation Note: Net profit excluding accumulated profit. Interpretation The trend analysis of all the 5 years has been done by taking the year 2003-04 as a base year. The study reveals that there is increase in the source of funds like equity capital and capital contribution from the state government in a greater percentages. The reserves and funds also increased for every year by 291.5%, 433.7%,755.6% and 896.4% respectively The secured loans are decreasing and it is fluctuating every year. Term loan from the commercial bank was decreased to 8.52 for the year 2007-08 which was 100 percent in 2003-04.The current liabilities are fluctuating. It was 100%, 109.3%, 83.85%, 104.5%, 125.2%, 109.32% from 2003-4 to 2007-08 respectively. Investment in the fixed assets is increasing in a greater extent. In the year 2003-04 it was 276,88,32 Rs in the year 2007-08 it was increased to 669,93,27 Rs , i.e. it has increased by 252%. The current assets are fluctuating in every year, in the year 2004-05 it was 138.32%, in 2006 it increased to 237.1%, in 2007 it decreased to 187.12% andin 2007-08 it decreased to 180.9% which shows that companys short term financial position is not improving but the company is operating good in long run.
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Bangalore Metropolitan Transport Corporation RATIO ANALYSIS
LIQUIDITY RATIOS TABLE NO 4.7 TABLE SHOWING CURRENT RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Current assets
131.20
135.72
171.95
100.32
72.52
Current 73.51 liabilities 61.36 49.10 64.02 58.56
Current Ratio
1.785
2.212
3.502
1.567
1.238
The current ratio of the company is fluctuating in 2003-04 it was 1.24, in the year 200405 it was 1.57, in the year 2005-06 it was 3.5, in the year 2006-07 it was 2.21and in the year 2007-08 it is 1.78. The current ratio is ascertained with the help of relevant financial figures. It has to be compared with the standard ratio of 2:1. From 2003 04 to 2007 2008 the current assets
are more than current liabilities The ratio is very near to the ideal ratio and in 2005 and 2006 current assets are double to the current liabilities hence the hence the liquidity position of the company is good and satisfactory.
GRAPH -4.6 Administrative Management College 37
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Bangalore Metropolitan Transport Corporation GRAPH SHOWING CURRENT RATIO FROM 2003 2004 TO 2007 2008
Current Ratio 4 3.502 3.5 3 2.5 2.212 1.785 Rati o Current Ratio 2 1.567 1.5 1.238 1 0.5 0 2006-07 2005-06 2004-05 20032007-08 04 Year
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TABLE NO 4.8
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Bangalore Metropolitan Transport Corporation TABLE SHOWING LIQUID OR QUICK RATIO OF THE COMPANY (Rs. In crore
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Quick assets
101.54
111.97
162.14
90.84
61.58
Quick/Current 73.51 liabilities 61.36 49.10 64.02 58.56
Quick ratio
1.38
1.82
3.30
1.42
1.05
The Quick Ratio of the company is fluctuating. In 2003 04 it was 1.38, in the year 2004-05 it was 1.82, in the year 2005-06 it was 3.30, in the year 2006-07 it was 1.42, in the year 2007-08 it was 1.05 The actual quick ratio has to be compared with the ideal quick ratio is 1:1. The quick ratio of the company is more than the ideal ratio of 1:1, so the companys liquidity position is satisfied.
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GRAPH -4.7 GRAPH SHOWING QUICK RATIO FROM 2003 2004 TO 2007 2008
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Liquid Ratio 3.5 3 2.5 2 Ratio 1.42 1.38 1.5 Liquid Ratio 1.05 1 0.5 0 2007-08 2006-07 2005-06 2004-05 2003-04 Year 1.82 3.3
40
TABLE NO 4.9 TABLE SHOWING ABSOLUTE LIQUID RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Absolute 63.08 liquid assets 78.89 134.98 71.78 31.21
Current 73.51 liabilities Absolute 0.86 liquid ratio

61.36
49.10
64.02
58.56
1.29
2.75
1.12
0.53
The absolute liquid ratio of the corporation reveals that the absolute liquid assets i.e. cash in hand and at bank and or temporary investments are adequate to pay the current liabilities. The acceptable norm form for this ratio 50%i.e. Re 1 absolute liquid assets are adequate to pay Re 2 worth current liability. The absolute liquid
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Bangalore Metropolitan Transport Corporation ratio is more than its acceptable norm which indicates that the corporation is more liquid to pay its current liabilities. The corporation is maintains more cash balance in the current assets of the corporation. Which is more liquid asset and the corporation is sufficient to pay its liabilities .hence the liquidity position is strong.
GRAPH - 4.8 GRAPH SHOWING ABSOLUTE LIQUID FROM 2003 2004 TO 2007 2008
ABSOLUTE LIQUID RATIO 3 2.75 2.5 2 Ratio 1.5 1.29 1.12 0.86 1 0.53 0.5 0 2007-08 2006-07 2005-06 2004-05 2003-04
years
Absolute liquid Ratio
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LONG TERM SOLVENCY RATIOS TABLE NO 4.10 TABLE SHOWING DEBT-EQUITY RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Debt or Outside fund
87.96
84.01
75.52
92.95
94.25
equity
810.93
683.51
391.28
261.96
168.15
Debt-Equity ratio
0.108
0.122
0.193
0.354
56.05
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The Debt-equity ratio from the year 2003-04 to 2007-08 shows that the corporation is using maximum of state government capital as equity. As this is the government owned undertaking maximum amount of capital is contributed by the state
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Bangalore Metropolitan Transport Corporation government. The state government is having the maximum stake in the assets the corporation; while the outsiders claims are low. The debt-Equity ratio normally depends upon the financial policy of the firm and firms nature of business. The ideal debt equity ratio is 2:1 as such, if the debt is less than two times of equity, the logical conclusion is that the financial structure of the firm is sound and the stake of long-term creditors is relatively less.
GRAPH - 4.9 GRAPH SHOWING DEBT-EQUITY RATIO FROM 2003 2004 TO 2007 2008 DEBT-EQUITY RATIO
0.6 0.56 0.5 0.4 0.354 Ratio 0.3 Debt Equity 0.193 Ratio 0.2 0.122 0.108 0.1 0 2007-08 2006-07 2005-06 2004-05 2003-04
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Year
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TABLE NO 4.11 TABLE SHOWING PROPRIETORY RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Proprietary 810.93 fund 683.51 391.28 261.96 168.15
Total assets
898.89
767.52
466.80
354.91
262.40
Proprietary 0.901 ratio 0.891 0.838 0.738 0.641
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The ratio of proprietory fund from the year 2003-04 to 2007-08 reveals that the amount of proprietors fund invested is increasing from year to year .in 2003-04 65% of the capital investment is from the state government, which increased to 90% in the year 2007-08 which indicates that the state government is having majority of the sake in the Corporation. The outsiders liability is very low which is decreasing from year to year. Thus the state government is having the major portion in the profit of the firm
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Bangalore Metropolitan Transport Corporation As equity ratio represents the relationship of owners funds to total assets, higher the ratio or the share in the total capital better is the long term solvency position of the corporation.
GRAPH - 4.10 GRAPH SHOWING PROPRIETORY RATIO FROM 2003 2004 TO 2007 2008
PROPRIETORY RATIO 1 0.901 0.891 0.9 0.838 0.8 0.738 0.7 0.641 0.6 Ratio 0.5 0.4 RATIO 0.3 0.2 0.1 0 2006-07 2007-08 2005-06 200405 2003-04 PROPRIETO RY
Year
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TABLE NO 4.12 TABLE SHOWING SOLVENCY RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Total liabilities 87.96 to outsiders 84.01 75.52 92.95 94.25
Total assets
898.89
767.52
466.80
354.91
262.40
Solvency ratio
0.097
0.109
0.162
0.262
0.359
The solvency ratio of the corporation from the year 2003-04 to 2007-08 reveals the ratio of total liabilities to outsiders to total assets. The total liability to outsiders is
A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE. very low for the 5 years which indicates that the companys liability to the outsiders is very low .And the liability to outsiders is decreasing from year to year. In the year 2003-04 outsiders are having 35% claims in the total assets of the company which is decreased to 9% in the year 2007-08.
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Bangalore Metropolitan Transport Corporation Generally lower the ratio of total liabilities to total assets, more satisfactory or stable in the long term solvency of the firm This ratio is the small variant of the proprietory ratio and can be simply calculated as 100- proprietory ratio.
GRAPH 4.11 GRAPH SHOWING SOLVENCY RATIO FROM 2003 2004 TO 2007 2008
Solvency Ratio 0.4 0.359 0.35 0.3 0.262 0.25 Rati o 0.2 0.162 0.15 0.109 0.097 0.1 0.05 0 2007-08 2006-07 2005-06 2004-05 200304 Year
Solvency Ratio
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TABLE NO 4.13 TABLE SHOWING FIXED ASSETS TO NET WORTH RATIO (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Net Fixed assets
412.47
345.84
238.8
227.12
155.71
Net Worth
810.80
683.14
391.09
261.52
167.39
Fixed Assets Net worth ratio 0.509 0.506 0.611 0.869 0.930
The fixed assets to net worth ratio for the years 2003-04 to 2007-08 reveals that the ratio is below 100 and the ratio is decreasing year by year .In the year 2003-04 it was 93% and
it is decreased to 51% in the year2007-08. The ratio of fixed assets to net worth indicates the extent to which shareholders or owners fund are sunk into the fixed assets. If the ratio is less
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Bangalore Metropolitan Transport Corporation than 100%, it implies that owners funds are more than total fixed assets and apart of the working capital is provided by the shareholders. This ratio shows that the owners fund is more than the fixed assets and a part of working capital is provided by the owners.
GRAPH 4.12 GRAPH SHOWING FIXED ASSETS TO NET WORTH RATIO FROM 2003 2004 TO 2007 2008
FIXED ASSETS TO NET WORTH RATIO 1 0.93 0.9 0.8 0.7 0.611 0.6 0.509 Ratio 0.5 0.4 Ratio 0.3 0.2 0.1 0 2007-08 2006-07 Year
0.869
0.506
2005-06
2004-05
200304
50
TABLE NO 4.14 TABLE SHOWING CURRENT ASSETS TO NET WORTH RATIO (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Current assets
131.19
135.72
171.95
100.32
72.52
Net worth
810.80
683.14
391.09
261.52
167.39
Current Asset to Net worth Ratio 0.162 0.199 0.439 0.384 0.433
Interpretation This ratio indicates the extent to which proprietors funds are invested in current assets.
The ratio is fluctuating from year to year ,in the year 2003-04 it was 0.433, in the year 2004-05 it was 0.384, in the year 2005-06 it was 0.439, in the year 2006-07 it was 0.199, in the year 2007-08 it was 0.162.
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Bangalore Metropolitan Transport Corporation There is no rule of thumb for this ratio and depending upon the nature of business there may be different ratios for different firms.
GRAPH 4.13 GRAPH SHOWING CURRENT ASSETS TO NET WORTH RATIO FROM 2003 2004 TO 2007 2008
CURRENT ASSETS TO NET WORTH RATIO 0.45 0.4 0.35 0.3 Ratio 0.25 0.199 0.2 0.162 0.15 0.1 0.05 0 2007-08 2006-07 2005-06 2004-05 200304 Year Rati o 0.439 0.433 0.384
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TABLE NO 4.15 TABLE SHOWING CURRENT LIABILITIES TO NET WORTH RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Current 73.29 Liabilities 61.20 49.10 64.00 58.56
Net Worth
810.80
683.14
391.09
261.52
167.39
Current Liabilities To 0.09 Net Worth Ratio

0.089
0.126
0.245
0.350
The current liabilities to net worth ratio are fluctuating. In the year 2004 it was 0.09, in the year 2005 it was 0.089, in the year 2006 it was 0.126, in the year 2007 it was 0.245, in the year 2008 it was 0.350
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The desirable level set for this ratio is 0.33 or 33.1/3%. So if the actual ratio were very high it would mean that the liability base of the concern would not provide an adequate cover for long-term creditors. That means it would be difficult for the concern to obtain long-term funds.
GRAPH 4.14 GRAPH SHOWING CURRENT LIABILITIES TO NET WORTH RATIO FROM 2003 2004 TO 2007 2008 Current liabilities to net worth ratio 0.35 0.35 0.3 0.245 0.25 0.2 Ratio 0.15 0.126 0.1 0.05 0 2007-08 2006-07 2005-06 2004-05 2003-04 Year 0.09 0.089 Current liabilities to net worth ratio
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TABLE NO 4.16 TABLE SHOWING FIXED ASSETS RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Net fixed 412.47 Assets 345.84 238.80 227.12 155.71
Total Long 825.38 Term Funds Fixed Assets 0.50 Ratio 0.490 0.572 0.781 0.764 706.16 417.70 290.89 203.84
Fixed ratio also known as fixed assets to total long term funds ratio of the company indicates the extent to which the total of fixed assets are financed by long term long term
funds of the firm. This ratio is decreasing from year to year, in the year 2003-04 it was 0.76, in the year 2004-05 it was 0.781, in the year 2005-06 it was 0.572, in the year 2006-07 it was 0.490 and in the year 2007-08 it was 0.50 which indicates that the companys total long term funds are more than total fixed assets, it means that a part of the working capital requirements is met out of the long term funds of the firm.
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GRAPH 4.15 GRAPH SHOWING FIXED ASSETS RATIO FROM 2003 2004 TO 2007 2008
FIXED ASSETS RATIO 0.781 0.8 0.764 0.7 0.6 0.572 0.5 0.49 0.5 0.4 Ratio 0.3 0.2 0.1 0 2007-08 2006-07 2005-06 2004-05 2003-04 Fixed Aeest Ratio Year
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TURNOVER RATIOS TABLE NO 4.17 TABLE SHOWING FIXED ASSETS TURNOVER RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Net Fixed 412.47 Assets 345.84 238.80 227.12 155.71
Net sales
801.49
707.44
623.34
506.19
441.16
Fixed Assets Turnover Ratio 0.515 0.489 0.383 0.449 0.353
The fixed assets turnover ratio of the company is increasing. In the year 2003-04 it was 0.353, in the year 2004-05 it was 0.449, in the year 2005-06 it was0.383, in the year 2006-07 it was 0.489, in the year 2007-08 it was 0.515. The standard or ideal fixed assets turnover ratio is 5 times. So, fixed assets turnover ratio
of 5 times or more indicates better utilization of fixed assets. On the other hand a fixed assets turnover ratio of less than 5 times is an indication of under utilization of fixed assets. The fixed assets turnover ratio is showing an increasing trend which indicates the efficient utilization of fixed assets of the company.
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GRAPH 4.16 GRAPH SHOWING FIXED ASSETS TURNOVER RATIO FROM 2003 2004 TO 2007 2008
Fixec Aset to Net worth Ratio 0.6 0.515 0.489 0.5 0.449 0.4 Ratio 0.3 0.2 0.1 0 2007-08 2006-07 2005-06 2004-05 2003-04 Year 0.383 0.353 Fixec Aset to Net worth Ratio
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TABLE NO 4.18 TABLE SHOWING WORKING CAPITAL TURNOVER RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Net working 57.90 Capital 74.52 122.85 36.32 13.96
Net sales
801.49
707.44
623.34
506.19
441.16
Working capitalTurnover ratio 0.072 0.105 0.197 0.072 0.032
The working capital turnover ratio is fluctuating. In the year 2003-04 it was 0.072, in the year 2004-05 it was 0.105, in the year 2005-06 it was 0.197, in the year 2006-07 it was 0.072, in the year 2007-08 it was 0.032 Though there is no ideal working capital turnover ratio one can say that a high working capital turn over ratio indicates the efficiency and a lower working capital turnover ratio indicates the inefficient of the management in utilization of working capital. In the case of Bangalore Metropolitan Transport Corporation (BMTC), is ratio is not
very high or not too low, but it is satisfactorily indicates the efficiency of the organization.
GRAPH 4.17 Administrative Management College 59
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Bangalore Metropolitan Transport Corporation GRAPH SHOWING WORKING CAPITAL TURNOVER RATIO FROM 2003 2004 TO 2007 2008
Working capital turnover ratio 0.197 0.2 0.18 0.16 0.14 0.12 0.105 Ratio 0.1 0.08 0.06 0.04 0.02 0 0.072 0.072 0.032 Working capital turnover ratio
2007-08 2006-07 2005-06 2004-05 2003-04 Year
PROFITABILITY RATIOS TABLE NO 3.19
60
Bangalore Metropolitan Transport Corporation TABLE SHOWING GROSS PROFIT RATIO OF THE COMPANY (Rs. In crore)
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Gross Profit
18.64
57.90
43.10
26.67
44.10
Net sales
801.49
707.44
623.34
506.19
441.16
Gross profit 2.33% Ratio 8.19% 6.92% 5.27% 9.99%
The gross profit ratio of the company is fluctuating from the year 2003-04 to 2007-08 .In the year 2003-04 it was 9.99%, in the year 2004-05 it was 5.27%, in the year 2005-06 it was 6.92%, in the year 2006-07 it was 8.19% and in the year 2007-08 it was decreased to 2.33% which shows that the company gross profit decreased and which is not good for the company growth. The actual gross profit ratio is compared with the gross profit ratio of the previous years and those of other concerns carrying on similar business. If the actual grass profit ratio is high, it is an indication of good result; on the other hand if the actual gross profit ratio is low it is an indication of poor results.
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GRAPH 4.18 GRAPH SHOWING GROSS PROFIT RATIO FROM 2003 2004 TO 2007 2008
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GROSS PROFIT RATIO 9.99% 10.00% 9.00% 8.19% 8.00% 6.92% 7.00% 6.00% Rati o 5.00% 4.00% 3.00% 2.33% 2.00% 1.00% 0.00%2007-08 2006-07 2005-06 2004-05 200304 Years 5.27% Gross Profit Ratio
TABLE NO 4.20 TABLE SHOWING NET PROFIT RATIO OF THE COMPANY (Rs. In crore)
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Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Net profit after Tax
140.24
224.33
114.88
80.82
77.40
Net Sales
801.49
707.44
623.34
506.19
441.16
Net profit ratio
17.50%
31.71%
18.43%
15.81%
17.55%
The net profit ratio of the company is fluctuating from the year 2003-04 to 2007-08 .In the year 2003-04 it was 17.55%, in the year 2004-05 it was 15.81%, in the year 2005-06 it was 18.43%, in the year 2006-07 it was 31.71% and in the year 2007-08 it was decreased to 17.50% There is no ideal net profit ratio, higher the net profit indicates that profitability of a concern is good and vice versa. In the year 2007-08 the Net profit has decreased to 17.50% which is not a good sign for the company performance.
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GRAPH 4.19 GRAPH SHOWING NET PROFIT RATIO FROM 2003 2004 TO 2007 2008
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Net Profit Ratio 35.00% 30.00% 25.00% 20.00% 18.43% Rati o 15.00% NET PROFIT RATIO 10.00% 5.00% 0.00% 2007-08 2005-06 2004-05 20032006-07 04 Year 17.50% 15.81% 17.55% 31.71 %
TABLE NO 4.21 TABLE SHOWING OPERATING RATIO OF THE COMPANY (Rs. In crore)
64
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Operating Cost
782.85
649.54
580.24
479.52
397.06
Net Sales
801.49
707.44
623.34
506.19
441.16
Operating 97.68% Ratio 91.82% 93.09% 94.74% 90.01%
Operating ratio of the corporation is fluctuating from year to year .in the year 2003-04 it was 90% but in the year 2007-08 it was increased to 97.68 which shows that the company has incurred huge operating cost which is not good for the company growth. Operating ratio indicates the percentage of net sales that is consumed by operating cost. Higher the operating ratio less favorable it is, because the company would have small margin to cover interest, income tax, dividend and reserve.
GRAPH 4.20 GRAPH SHOWING OPERATING RATIO FROM 2003 2004 TO 2007 2008
65
Operating Ratio 98.00% 97.68% 96.00% 94.74% 94.00% 93.09% Ratio 92.00% 91.82% Operatin g Ratio 88.00% 86.00% 2007-08 2006-07 2005-06 2004-05 200304 Year
90.01% 90.00%
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TABLE NO 4.22 TABLE SHOWING NET PROFIT TO NET WORTH RATIO OF THE COMPANY (Rs. In crore)
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Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
Net profit after tax
140.24
224.33
114.88
80.82
77.40
Net Worth
810.80
683.14
391.09
261.52
167.39
Net Profit to 17.30% net worth ratio 32.84% 29.38% 30.60% 46.24%
Net profit to net worth ratio of the company is fluctuating. in the year 2003-04 it was 46.24%but in year 2007-08 it was 17.32. There was huge fall in the net profit to net worth of the company which is not favorable for the company. The ideal net profit to net worth ratio is about 13% as such if the actual net profit to net worth ratio is 13% or more it is an indication of good return on the shareholders funds. On the other hand if the actual ratio is less than 13% the conclusion as to be that the return on the shareholders funds is not adequate.
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GRAPH 4.21 GRAPH SHOWING NET PROFIT TO NET WORTH RATIO FROM 2003 2004 TO 2007 2008
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Net Profit To Net worth Ratio 50 46.24 45 40 35 32.84 30.6 29.38 30 Ratio 25 Net Profit To 20 17.3 Net worth 15 Ratio 10 5 0 2007-08 2006-07 2005-06 2004-05 200304 Year
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CHAPTER - 5 SUMMARY OF FINDINGS After the detailed analysis of financial statements of Bangalore Metropolitan Transport Corporation (BMTC) for the period of five years from 2003-04 to 2007-08 it is found that
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balance sheet and in trend analysis of all 5 years that There is increase in the source of fund i.e. equity capital and reserves and funds and proportionate increase in the investments in fixed assets which shows that long term position of the company is favorable , There is a drastic decrease in the current assets while the current liabilities are increasing which is not favorable for the company in the short term position. It is evident through financial analysis that the current ratio of the company is decreasing from the last two years, it is not favorable for the company. The investment in fixed asset has shown the increasing trend from 2003-04 to 2005. The companys long term funds from outsiders are decreasing every year which shows that company is depending on its own funds rather than outsiders Greater amount of current asset are maintained in the form of cash in hand which is increasing every year, but the current assets are in decreasing trend. Even the current assets are decreasing; it is greater than the current liabilities to pay its short term liabilities. The Debt-Equity ratio reveals that the company is using more equity. As BMTC is government undertaking its source of fund include greater amount of government equity. The net profit ratio of the company indicates that the company is performing well from lost five years. Its net profit was increasing up to 2006-07 but in the year 2007-08 it was decreased. Which shows that companys financial position is not satisfactory in the year 2007-08. The Operating cost of the company is increasing in proportionate to its operating sales. It was 97.63% of its net sales or operating revenue in the year 2007-08. The current liabilities of company are less than the current assets but it is
increasing which is not satisfactory. Equity capital of the corporation is wholly owned by the state Government of Karnataka. The Government has not fixed the volume of capital to term it has Authorized share capital, nor decided the value of each share. Administrative Management College 69
Director of Income Tax. Motor Vehicle Tax has been calculated and provided , at 5% on the revenue realized on City and Sub-Urban buses. Depreciation on Passenger Vehicles excluding Volvo is calculated on actual KM basis assuming the life of vehicle as 5.60 KM.For Volvo the life of the vehicles are 10.00 lakh KM subject to a minimum of 1.00 lakh KM p.a. Depreciation on other assets is provided on Straight Line Method at the following rates Buildings 20% Heavy Duty Plant and Machinery Light Duty Plant and Machinery 2.5% 10% 20% Computer Hardware Medical equipment Furniture, Fixture and 10%. Others 20% 20%
BMTC has started earning profit from 1998.The financial performance of the company is good. But the companys financial position in the year 2007-08 was not satisfactory. Its net profit was decreased by 50% of lost years profit.
SUGGESTIONS
A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE. By the analysis and interpretation of financial statements of Bangalore Metropolitan Transport Corporation (BMTC), the following suggestions can be put forth:
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Bangalore Metropolitan Transport Corporation The operating expenses should be minimized to the possible extent with efficient budgetary control. The investment in current assets should be managed at optimum level of its operations. Surplus current assets can be deployed as long-term investment to have continuous profit growth. The current liability position should be maintained to cope with efficient management of the outside liabilities. The Company should utilize the funds in such a way that profit is maximized and its operating cost is minimized. There is an excess of outflow of funds in the purchase of fixed assets, the company has to control its cash flow in the fixed assets in a proper way and should maintain proper cash balance. Companys financial position is improving from year to year, but in the year 2007-08 there is a decreasing trend in the financial performance, hence the company has to utilize and invest its funds efficiently to increase profits.
CONCLUSION
Various Techniques are used in analysis of the financial data to emphasis the comparative and relative importances of the data presented and evaluate the position of company. The
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Bangalore Metropolitan Transport Corporation Techniques of financial analysis are intended to show the performance analysis of the Bangalore Metropolitan Transport Corporation (BMTC), The company is increasing its investment in fixed assets from year to year and its current assets trend is also fluctuating from time to time, hence the company should make efficient investment in both the fixed assets and current assets and monitor them effectively to ensure the good and favorable increase in the returns. As the company Traffic revenue or Sales are increasing tremendously the company has to take all the necessary steps to maintain its increasing sales by adapting the sales strategy, proper advertisement, services to customers and satisfying varying needs of the customers. Company is maintaining the assets in a proper way leading to the decrease in the amount of depreciation, which is a positive sign for the progress in the asset management of the company. The company has to increase its efficiency in the maintenance and the proper usage
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A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

Historical Background of Finance:-

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

THE FINANCIAL PLANNING PROCESS

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 3

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 4

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

Step 1: Determine Your Current Financial Situation

Step 2: Develop Financial Goals

Step 3: Identify Alternative Courses of Action

Step 4: Evaluate Alternatives

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 5

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

Financial Planning Information Sources

Step 5: Create and Implement a Financial Action Plan

Step 6: Reevaluate and Revise Your Plan

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 6

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 7

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 8

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 9

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

ii) iii) iv) statement.

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. 11

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. 12

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. 13

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. 17

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. 19

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 20

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

Discharging it social responsibilities by:

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

Physical Performance: Parameter Depot 1.Schedules Added

200607 28 585 -216(P) =369

200708 30 585 -138(P) =447

200809 30 603 -23(P) =580

200910 33 417 -3(P) =414

201011 35 91 +0(P) =91

Nov10 35 96 +0(P) =96

Nov11 36 49 15(P) =34

AISHWARYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, BANGALORE. Page 22

A STUDY ON FIANANCIAL PLANNING and PRFORMANCE OF BMTC BANGALORE.

4116 +210(P) =4326

4701 +72(P) =4773