FINANCIAL PERFORMANCE

THROUGH THE RATIO ANALYSIS

OF
KRISHNA MILK UNION LTD VIJAYAWADA

PRESENTED BY
CH.VIJAYA BABU
08481E0053
 Objective of the study
• Primary objective:
 

To know the financial performance of the firm between 2004-2009 through

calculation of various ratios.

• Secondary objectives:
To find out the liquidity position of the firm.

To find out the solvency position of the firm.

To find out ability of firm in utilise the assets.

Industry Profile
 India has the worlds largest cattle and buffalo
population adapted to tropical eliminate and pure
nutrition and environment.

 Milk production gives employment to 70 million

dairy farmers.

 According to live stock census 1982, Indians

bovine population was 191 million cattle and 69
million buffalos.
 The surplus milk after meeting requirement of
the liquid milk is being converted into
products like food, milk powder, ghee, butter,
sterilized milk, doodhpeda, etc.

 APDDCF was firmed in October 1981.

 APDDCF involve in procurement , production,

processing and marketing.
 APDDCF has got 6 product manufacturing
units in the AP, namely;

Hyderabad.
Chittor.
Nandyala. (Kurnool).
Proddutoor.
Vaddlamudi.
Vijayawada.
ORGANIZATION OF A DAIRY FIRM
o Housing

o Feeding

o Breeding

o Disease control
Krishna milk union is a district “co-operative
came into existing in July 1983, registered
KRISHNA DISTRICT MILK PRODUCERS
MUTUALLY AIDED CO-OPERATIVE
UNION LTD”.

Krishna milk union currently 515 functional

dairy co-operations in villages and introduced
from various chilling centers and district
routes.
It is located in 27.3 acres.

The Krishna District Milk Products authorized

capital Rs.5,00,000, at the time of started.

Paid up share capital is Rs.3,02,000.

It is also handled surplus milk received from

district of VISAKHAPATNAM,EAST AND
WEST GODAVARI,PRAKASAM AND
NELLORE .
 MISSION&VISSION
Mission:
“Farmers’ prosperity
Mission:
through technical
“Farmers’ prosperity through technical
innovations andand
innovations customer orientation
customer orientation with with
specific focus on quality and cost”.
specific focus
Vision: on quality and cost”.
“Dairying in the district to be the major
Vision: instrument of strengthening rural economy
“Dairying inand making available safe milk and milk
products”.district to be the major
the
instrument of strengthening rural economy
and making available safe milk and milk
products”.
RATIO ANALYSIS
 DEFINITION
• Ratio analysis is defined as the systematic use of
the ratio to interpret the financial statements.

• To know the company strengths and

weaknesses.

• Ratio reflects a quantitative relationship helps to

form a quantitative judgment.
 TOOLS OF FINANCIAL ANALYSIS
• Comparative financial statements.
• Common size financial statements.
• Trend Analysis.
• Ratio Analysis.
• Cash Flow Statement.
• Funds Flow Statement.
 CLASSIFICATIONS OF RATIOS
There are mainly classified into three types of
Ratios
• Traditional Classification:
These ratios deals with the following
types.
1) Balance sheet (or) position statement ratio
2) Profit & loss account (or) revenue statement
ratios
3) Composite (or) inter statement ratios
• Functional Classification:
These ratios help the to know the firm
position. These are classified into the
following.
1. Liquidity ratio
2. Leverage ratio
3. Activity ratio
4. Profitability ratio
DATA ANALYSIS
CURRENT RATIO
QUICK RATIO
NET PROFIT RATIO
OPERATING PROFIT RATIO
INVENTORY TURNOVER RATIO
NET WORKING CAPITAL RATIO
DEBTORS TURNOVER RATIO
 FINDINGS
• The return on investment of KRISHNA MILK UNION is also
quite small satisfactory. Because the return on investment
of KRISHNA MILK UNION is just at 0.10 (on an average).

• The debtors’ turnover ratio is also completely

dissatisfaction for all the 5 years. It reveals that the
debtors’ turnover ratio of KRISHNA MILK UNION for the
past 5 years is at 17% (on an average).

• The fixed assets turnover ratio is not encouraged for all the
5 years. Since it is just two limes (approximately) for the
first two years and it is with 0.75 for the rest of three years.

• There was no long term debts for the company.

 SUGGESITIONS
• The current ratio, quick ratio and absolute
liquid ratio of KRISHNA MILK UNION are below
the standard 2:1, 1:1 and 0.5:1 respectively.

• The profitability position of KRISHNA MILK

UNION is quite dissatisfactory since it is with
minimum percentages.

• The Return On investment of KRISHNA MILK

UNION for the past 5 years is not
encouraged.