A PROJECT REPORT

ON
RATIO ANALYSIS
FOR
SHREE WARANA SAHAKARI DUDH UTPADAK PRAKRIYA
SANGH LTD.

UNDER THE GUIDENCE OF

TRUSHNA KANDELAKR
PREPARED BY
MISS RUPALI WAGHULDE
SEAT NO:-

IN PARTIAL FULFILLMENT OF BACHELOR OF

BUSINESS ADMINISTRATION
(BBA)
SUBMITED TO UNIVERSITY OF PUNE
THROUGH
DNYANSAGAR ARTS AND COMMERCE COLLEGE
BALEWADI, PUNE-45
YEAR-2015-16

ACKNOWLEDGMENT
This project report is the part of study of Bachelor
Degree in Business Administration.

I would like to thank my project guide Mrs. Trushna

Khandelkar under whose guidance, I have been able to complete
this project report.

Then I would like to thank principal of DACC Prof.

Dr. sajid alvi to give this opportunity to do the project report.

I take this opportunity to convey my thanks to for

giving me an opportunity to do this project from the company and
for providing me all the necessary support. I am deeply grateful to
the at off of Pune and company for their for valuable guidance
and co-operation to the preparation of this project report.

I would like to thank to all who have given me all

necessary information during my study.

Rupali G. Waghulde

DECLARATION

I WAGHULDE RUPALI GANESH, do hereby declare and confirm that the

project entitled RATIO ANALYSIS OF SHREE WARANA SAHAKARI
DUDH UTPADAK PRAKRIYA SANGH LTD submitted in the partial
fulfillment of the Bachelor of Business Administration, at DYNASAGAR ATRS
AND COMMERCE COLLEGE PUNE 45 is my original work and not submitted
for the award of any other degree, diploma, fellowship, or any other similar
title or prizes.

Place :- Pune
Date :-

RUPALI WAGHULDE

T.Y.BBA

INDEX

CHAPT
PARTICULARS
ER NO.
1.
RESEARCH METHODOLOGY

PAGE
NO.
01

2.

CONCEPTUAL BACKGROUND

05

3.

ORGANIZATION PROFILE

19

4.

DATA INTERPRETATION

34

5.

FINDINGS AND SUGGESTIONS

53

6.

BIBLIOGRAPHY

57

INTRODUCTION

All the manufacturing organizations use different types

of the financial concepts for the purpose of understanding the
financial position of the firm. RATIO ANALYSIS is one of the
popular tools used to evaluate the financial position of any
organization. With the help of Ratio analysis we can simply
identify the financial strengths as well as weaknesses of the
organization. In such case there will be need of establishing
relationship between balance sheet and the profit and Loss
account. The financial analysis can be done by management
of the firm or by outside parties i.e. Owner, creditors,
investors, and other.

Thus the nature of analysis will differ depending on the

purpose of analysis. The use of ratio analysis is not confined
to

financial

manager

only.

There

are

different

parties

interested in the ratio analysis for knowing the financial

position of a firm for different purpose. In view of various
users of ratios, there are many types of ratios which can be
calculated

from

the

information

give

in

the

financial

statements. The particular purpose of the user determines.

Ratio analysis is much help in financial forecasting and
planning is looking ahead and the ration calculated for a
number of years work as a guide for the future. Meaningful

conclusions can be drawn for future from these ratios. Thus

ratio analysis helps in forecasting and planning.

OBJECTIVES

OF

THE

STUDY

The study is undertaken to achieve the following

objectives.
1. To understand concepts of RATIO ANALYSIS in detail.

2. To analyze and interpret the data pertaining to RATIO

ANALYSIS of the unit under study.

3. To calculate the ratios and find the financial position,

financial strengths as well as weaknesses of the
organization.

4. To suggest the meaningful and constructive measures

based on data analysis and interpretation.

5. To find out solvency condition of the company.

METHODOLOGY OF THE STUDY

The following methodology is adopted for the collection of required.

Data The data for the above study is collected through primary as well as
secondary sources.

1. Primary Source:
The data for the above study is collected by having discussion
with the concern officers and accountants of the company.

2. Secondary sources:
The data collected through The Secondary sources are.
a] Office Record:

The data collected from the office records for study

from the companys various books of Accounts, and Annual
Reports of the organization for five years.
b] Published literature:

The data was also collected through the Published

literature company like Annual Reports, Annual Diaries and
profile of the company.

SCOPE AND LIMITATIONS

SCOPE OF THE STUDY

This report is related with the study of current asset management and
covers the data pertaining to the past five years financial performance of the
Warana Dudh Sangh. Financial performance includes financial statements
analysis. In this the researcher has to study the past performance of the
company.
1) Period Covered :
The study is based on the previous five years data (2009-10 to 2014-15).

2) Contents :
The study contains the Ratio Analysis with respect to Warana Sahakari
Dudh Utpadak Prakriya Sangh.

LIMITATIONS
Limitations for the study are as follows.

1. As

the

certain

documents

were

confidential, it was not possible to

collect all the information necessary
for the deep study.

2. The study is limited to 60 days. It is

difficult to collect all the data with the
short period of time.

3. A financial technique itself is a very

wide

subject,

which

particularly

motivates to evaluate its financial

analysis with ordinary measures for
capital organization.

4. The study is concerned only to The

Warana

Sahakari

Dudh

Utpadak

Prakriya Sangh.

5. It may be difficult to find out basis for

comparisons.

CHAPTER II

CONCEPTUAL
BACKGROUND

RATIO ANALYSIS
INTRODUCTION:
Financial statement are prepared primary for decision
making. They play a dominant for decision-making. They play
a dominant role in setting the framework of managerial
decision. But the information provided in the financial
statements is not as end in itself as no meaningful
conclusions can be drawn from these statements alone.
However, the information added in the financial statements is
of immense use in making decisions through analysis and
interpretation of financial statements. Financial analysis is the
process identifying the financial strengths and weaknesses of
the firm by properly establishing relationship between the
items of the balance sheet and the profit and loss account.
There are various methods or techniques used in analyzing
financial

statements,

such

as

comparative

statements,

schedule of changes in working capital, common size

percentages, funds analysis, trend analysis and ratio analysis.

 MEANING AND NATURE OF RATIO

ANALYSIS:
Ratio

analysis

is

technique

of

analysis

and

interpretation of financial statement it is the process of

establishing and interpreting various ratios for helping in
making certain decisions.

1. Selection of relevant data from the financial

statement depending upon the objective of
the analysis.

2. Calculation of appropriate ratios from the

above data.

3. Comparison of the calculated ratios with the

ration of the some firm in the past or the ratios
developed from projected financial statements
or the ratios of some other firms or the
comparison with the ratios of the ratios of the
industry to which the firm belongs.

4. Interpretation of the ratios.

IMPORTANT MANAGERIAL USES OF RATIO

ANALYSIS:

1) Help in decision-making :Financial statements are prepared for decision-making.

But the information provides in financial statements is not an
end in itself and no meaningful conclusion can be drawn from
these statements alone. Ratio analysis helps in making
decision from the information provided in these financial
statements.

2) Helps the financial forecasting and planning: Ratio analysis is much help in financial forecasting and
planning is looking ahead and the ration calculated for a
number of years work as a guide for the future. Meaningful
conclusions can be drawn for future from these ratios. Thus
ratio analysis helps in forecasting and planning
3)

Help in communicating:The

financial

strength

and

weakness

of

firm

are

communicated in a more easy and understandable manner by

the use of ratios. The information conveyed in a meaningful
manner to the one for whom it is meant. Thus, ratios help in
communication and enhance the value of the financial
statements.

4)

Help in co-ordination:Ratio even helps in co-ordination which is of utmost

importance

in

effective

business

management.

Better

communication of the efficiency and weaknesses of an

enterprise results in better co-ordination in the enterprise.
5)

Help in control:Ratio analysis also helps in making effective control of

the business, standard ratios can be based upon perform

financial statements and variances or deviations, if any can

be found by comparing the actual with the standard so as to

take a corrective action at the standard so as to take a
corrective action

at the eight time. The weakness or

otherwise if any, come to the knowledge of the management

which helps in effective control of the business.
6)

Other Uses:There are so many other uses of the Ratio analysis. It is

an essential part of the budgetary control and standard

costing. Ratios are of an immense importance in the analysis
and interpretation of

LIMITATIONS OF RATIOS ANALYSIS :

The Ratio analysis is one of the most powerful tools of
financial management. Through ratios are simple to calculate
and easy to understand, they suffer from some serious
limitations.
1)

Limited use of a single Ratio :-

A single ratio usually does not convey much of a sense.

To better interpretation a number of ratios have to be
calculated which is likely to confuse the analyst than help him
in making any meaningful conclusion.
2)

Lack Of Adequate Standards:There are no well-accepted standards or rules of thumb

for all ratios, which can be accepted as norms. It renders

interpretation of the ratios difficult.
3) Inherent Limitations of Accounting:Like financial statements ratios also suffer from the
inherent weakness of accounting records such as their
historical nature. Ratios of the past are not necessarily true
indicators of the future.

4)

Change in Accounting Procedure:-

Change in accounting procedure by a firm often making

ratio analysis misleading, e.g. a change in the valuation of
methods of inventories from and FIFO to LIFO increases the
cost of sales and reduces considerable the value of closing
stock which makes stock turnover ratio to be lucrative and a
unfavorable gross profit ratio.

5)

Window Dressing:-

Financial statements can easily window dressed to

present a picture of its financial and profititability position to
outsiders. Hence, one has to be very careful in making a
decision

from

ratios

calculated

from

such

financial

statements. But it may be very difficult for an outsider to

know about the window dressing made by a firm.

6)

Personal Bias:Ratios are only means of financial analysis and not a end

in itself. Ratios have to be interpreted and different people

may interpret the same ratio in different ways.

7)

Uncomparable:-

Not only industries differ in their nature but also the firms of the similar business
widely differ in there size and accounting procedures, etc. It makes comparison of ratios
difficult and misleading. Moreover, comparisons are made difficult due to difference of
various financial terms used in the ratio analysis.

8)

Absolute figures Distortive:Ratios devoid of absolute figures may prove Distortive,

as ratio analysis is primary a quantitative analysis and a

qualitative analysis.

9)

Price level changes:While making ratio analysis, no consideration is made to

the change in price levels and this makes the interpretation of

ratios invalid.

10)

Ratios no substitutes:Ratios analysis is merely a tool of financial statements.

Hence ratios become unless if separated from the statements

from which they were computed.

CLASSIFICATION OF RATIOS:

The use of ratio analysis is not confined to financial

manager only. There are different parties interested in the
ratio analysis for knowing the financial position of a firm for
different purpose. In view of various users of ratios, there are
many types of ratios which can be calculated from the
information give in the financial statements. The particular
purpose of the user determines.

1) CURRENT RATIO: Current ratio may be defined as

the relationship between currents assets and current
liabilities. This ratio, also known as working capital ratio, is
measure of general liquidity and is most widely used to make
the analysis of a short-term financial position or liquidity of a
firm. It is calculated by dividing the total of current assets by
total of the current liabilities.
Formula:

Current assets
Current ratio =
Current liabilities

The two basic components of this ratio are: current

assets and current liabilities. Current assets include cash and
those assets which can be easily converted into cash within a
short period of time generally, one year. And current liabilities
are those obligations which are payable within a short period
of generally one year.
Components of Current Ratio

CURRENT ASSETS
1. Cash in hand
2. Cash at Bank
3.

Marketable

Securities

1.Outstanding

Expenses

or Accrued Expenses
2. Bills payable
3. Sundry Creditors

( Short-term )
4.

CURRENT LIABILITIES

Short-term

Investments
5. Bills Receivable

4. Short-term Advances
5. Income tax payable
6. Dividends payable
7. Bank Overdraft

6. Sundry Debtors
7. Inventories
8. Work-in-process
9. Prepaid Expenses

A relatively high current ratio is indication that the firm is

liquid and has the ability to pay current obligations in time as
and they become due. On the other hand, a relatively low
current ratio represents that the liquidity position of the firm
is not good and the firm difficulties. An increase in the current
ratio represents improvement in the liquidity position of a firm
while a decrease in the current ratio indicates that there has

been deterioration in the liquidity position of the firm. As a

convention the minimum of 2:1 is referred to a bankers rule
of thumb of arbitrary standard of liquidity.

2] QUICK OR ACID TEST RATIO: Quick ratio also known

as Acid test ratio of Liquid is a more rigorous test of liquidity
than the current ratio. The term liquidity refers to the ability
of a firm to pay its Short-term obligations and when they
become due. The two determinants of current ratio, as a
measure of liquidity, are current assets and current liabilities.
Current assets include inventories and prepaid expenses
which are not easily convertible in to cash within a short
period. Quick ratio may be defined as the relationship
between quick assets and current or liquid liabilities.

An asset is said to be liquid if it can be converted in to

cash within a short period without loss of value.

Formula:
Current Assets Inventories
Acid Test ratio =
Current liabilities

3] DEBT TO EQUITY RATIO: Debt to Equity Ratio, also

known as External-Internal Equity Ratio is calculated to
measure the relative claims of outsiders and the owners
against the firms assets. This radio indicates the relationship
between the external equities or the outsiders funds and the
internal equities the shareholders funds
Formula:
Outsiders funds
Debt to Equity Ratio=
Shareholders funds

The two basic components of the ratio are outsiders funds,

i.e. external equities and shareholders funds i.e. internal
equities. The outsiders funds include all debts/ liabilities to
outsiders, whether long term or whether in the from of
debentures bonds mortgages or bills. the shareholders funds
consists of equity share capital, preference share capital,
capital reserves, revenue reserves and reserves representing
accumulated

profits

and

surpluses

like

reserves

for

contingencies, sinking fund etc. The accumulated losses and

deferred expenses, if any should be deducted form the total
to find out shareholders funds.

4] PROPRIETARY RATIO OR EQUITY RATIO: A variant

to debt equity ratio is proprietary ratio which is also known as
Equity Ratio or shareholders to total Equities Ratio or Net
worth to total assets Ratio. This ratio establishes the
relationship between shareholders to funds to total assets of
the firm. The ratio of proprietors funds to total funds is an
important ratio for determining long term solvency of a firm.
The components of this ratio are shareholders funds or
proprietors funds and total assets. These shareholders funds
are

Equity

Share

Capital,

Preference

Share

Capital,

undistributed profits, reserves and surpluses. Out of this

amount, accumulated losses should be deduced. The total
Assets on the other hand denote total resources of concern.
Formula:
Shareholders funds
Proprietary Ratio =

100
Total Assets

As Proprietary Ratio represent the relationship of owners fund to total assets, higher the
ratio or the share of the shareholders in the total capital of the company, better is the long
term solvency position of the company. The ratio indicates the extent to which the assets of
the company can be lost without affecting the interest of creditors of company.

5]

SOLVENCY RATIO:

This ratio is a small variant of equity ratio and can be

simply calculated as 100 - equity ratio, i.e. , the ratio
indicates the relationship between the total liabilities to
outsiders to total assets of a firm and can be calculated as
follows:
Formula :
Total Outsiders Liabilities
Solvency Ratio =

X 100
Total Assets

Generally lower the ratio of total outsiders liabilities to total

assets, more satisfactory or stable is the long term solvency
position of firm.

6] EARNINGS PER SHARE RATIO (E.P.S.):

Earnings per share are a small variation of return equity
capital and are calculated by dividing the net profit after taxes
and preference dividend by the total number of equal shares.

Formula:
Not Profit after tax

Preference

Dividend
E.P.S. =
No. of Equity Share

The earning per share is a good measure of profitability and

when compared with E.P.S. of similar other companies, it
gives a view of the comparative earning or earnings power of
a firm E.P.S. calculated for a number of years indicates
whether or not earning power of company has increased .

7]

GROSS PROFIT RATIO :

Gross profit ratio measure the relationship of gross profit

to net sales and is usually represented as a percentage. Thus,

it is calculated by dividing the gross profit by sales:
Formula :
Gross Profit
Gross Profit Ratio =

X 100

Net Sales

The gross profit ratio indicates the extent to which selling

price of goods per unit may decline without resulting in losses
on operations of firm. Higher the ratio better to the company.

8]

NET PROFIT RATIO :

Net profit ratio establishes a relationship between net profit and sales and indicates
the efficiency of the management in manufacturing, selling, administrative and other
activities of the firm. This ratio is overall measure of firms profitability and is calculated
as:

Formula :
Net Profit after tax
Net Profit Ratio =

100
Net Sales
.
9] AVERAGE COLLECECTION PERIOD RATIO :

The average collection period represents the average

number of days for which a firm has to wall before its
receivables are converted into cash. The ratio can be
calculated as follows:

Formula :
Average Trade Debtors
i) Average collection period =
X No. of working days
Net Sales

Average Trade Debtors

(Including B.R.)
ii) Average collection period =
Sales
per day

The average collection period ratio represents the

average number numbers of days for which a firm has ratio
wait before its receivable are converted into cash. It measures
the quality of debtors. Generally, the shorter the average
collection period the better is the quality of debtors as a short
collection period implies quick payment by debtors. Similarly,
a higher collection period implies as inefficient collection
performance which in turn adversely affects the liquidity or
short-term paying capacity of a firm out of its current

liabilities. Moreover, longer the average collection periods,

larger are the chances of bad debts.

10] CREDITORS / PAYABLES TURNOVER RATIO :

In the course business operations, a firm has to make
credit purchases and incur short-term liabilities. A supplier of
goods, i.e. creditor, is naturally interested in finding out how
much time the firm is likely to take in repaying its trade
creditors. The analysis for creditors turnover is basically the
same as of debtors turnover ratio except that in place of trade
debtors the trade creditors are taken as one of the
components of the ratio and in place of average daily sales,
average daily purchases are taken as the other component of
the ratio.

Average Credit
Annual Purchases
Creditors Turnover Ratio =
Average
Trade Creditors

If

information

about

credit

purchases

is

not

available, the figure of total purchases may be taken as the

number and the trade creditors include sundry creditors and
bills payables.

If opening and closing balances of creditors

are not known, the balance of creditors given may be taken to

find out ratio. The ratio indicates the velocity with which the
creditors velocity better it is or otherwise lower the creditors
velocity, less favorable are the results.

CHAPTER III

ORGANIZATION
PROFILE

 WARANA GROUP INFORMATION

1]

INTRODUCTION

1.1] About Warananagar : The Warana Co-operative Complex has become

famous as one of the forerunner

of

successful

integrated

rural

development resulting from Co-operative movement. The Warana Cooperative Sugar factory registered in 1955, has led this movement resulting
in formation of over 25 successful co-operative societies today, listed
below :1) Warana

Co-operative

Sugar

Factory Ltd.
2)

Warana Co-operative Milk

Produce Processing Society Ltd.

3) Warana Co-operative Bank

4) Warana

region

Co-operative

Grahak Mandal
5) Warana

Poultry

Co-operative

Society
6) Sahyadri

Co-operative

Poultry

Society
7) Vishwanath Co-operative Poultry
Society
8) Warana Worker Vividh Working
Co-operative Society
9) Warana Agriculture Goods and
Processing Society
10) Warana Cooperative Industrial
Colony

11)Warana

Women

Cooperative

Credit Society
12) Savitri

Women

Co-operative

Industrial Society
13) Amrit

Sevak

Co-operative

Society
14) Satyavathi Co-operative House
Construction Society
15) Nivritti Co-operative Housing
Society
16) Educational Institute
Warana Vibhag Shikshan Mandal
Tatyasaheb

Kore

Institute

of

Engineering and

Technology
Yashwantrao Chavan Warana University
Tatyasaheb Kore Industrial Training Centre
Tatyasaheb Kore Training and Production Centre
Warana School
Warana Vidyamandir
Warana Nursery School
Warana Satkarya Savanrdak Mandal
17)

Warana Foods Private Ltd.

18)

Mahatma Gandhi Medical Trust

19)

Warana Bhagini Mandal

20)

Lijjat Pappad Centre

21)

Warana Sugar Worker's Society

For Purchase
For

For Labour Marker

22)

Warana Exercise Centre

Total turnover of all these societies exceeds Rs. 600 Crores. Most of
these societies are distributed within 4Km. radius with clear line of site. This is
in addition to the P&T lines provided by DOT. However this Exchange is not
connected to the P&T lines. Some of the important societys e.g. sugar and dairy
already have computer hardware installed at their premises and few application
software running for their routine requirements. These include payroll, billing,
Sales Dept.
Staff
MIS. The applications have been developed by local
privateStaff
agencies.
Assist
Organization
StaffChart.
Engineer
Staff
Staff

Staff

Staff

Fn
Engineer
charger
Store
ChiefKeep
Ac

Following are the important business centers at Warananagar 1.1.1] Warana Sugar Administrative Building
Situated in the heart of Warananagar is the 2 storied
housing the administrative staff of the Sugar,

building

Distillery and Paper

Factory. The sugar factory is located at a distance of around 500 mtrs from
this building. Sugar Cane which is the raw material for the factory is obtained
from 70 odd villages located in the districts of Kolhapur and Sangli. The
Distillery is located at a distance of 200mtrs from the sugar factory and the
paper mill is at a distance of 200 mtrs from the distillery. A motor able road
separates the distillery and the Paper Mill. The administrative building
has a flat roof from where most of the factories and Institutes fall within the
line of sight. It is covered by a wide expanse of lush green trees forming a
canopy around the building. The roof top, however is clear and is ideal for
installation of both the VSAT and Mast for omni directional antenna of the
wireless LAN. Milk at the Warana dairy is collected from 78 major villages
located in 2 districts, vis Kolhapur and Sangali. Some of the villages produce
both sugarcane and milk. The Administrative Office has around 25 stand
alone Computers in various sections which may be connected in a LAN using
structured cabling techniques. Presently data is collected from the factories on
floppy or in hard copy form, and is updated on these computers and

reports generated for use by the Management. The Managing Director and
Chairman of the Company have offices in this building.

1.1.2] Warana Grahak Mandal (Warana Bazaar) :

This is the largest bazaar in Warana with an annual

turnover of Rs

31 Corers. This has 2 departmental stores in Warananagar and Wagon. This

Bazaar has 29 retail outlets in the 78 villages spread across Kolhapur and
Sangli. The main departmental store is located

opposite the

Sugar

administrative building at a distance of 30mtrs. A motor able road bifurcates

these two buildings. The administrative office of the Grahak Mandal (Warana
Ba Warana Sahakari Dudh Utpadak Prakriya Sangh zaar) is
located in this departmental store. The management procures the goods
directly from various factories and desires to have strong communication
network so that

orders and follow up could be made through E-mail. Daily

statistics from each of these retail outlets is obtained by the Management by

either calling the official concerned from the outlet or by visiting these
outlets.
1.1.3] Mahatma Gandhi Medical Trust
A multifarious hospital with state-of-the-art technology
capacity of more than 200 beds catering to the
common farmers, is located at a
Administrative building.
and latest

having a

requirements of the

distance of 10 Kms from the Sugar

The hospital has been equipped with modern

facilities available in medical field. The unidirectional antenna

for wireless LAN can be installed on the roof of the hospital and services like
Medlars would be highly beneficial to the Doctors.

1.1.4] Warana Bhagini Mandal

This Mandal is set up by the women folk and produce items like Lijjat
Pappad etc. The factory and office is located at a distance of 200 mtrs
from the main sugar administrative building. Warana Women Co-operative
credit society, Savitri Women Co-operative Industrial Society, Lijjat Pappad
Kendra are the organisation under its umbrella. Some of the factories
are also located at a distance of 1 km from the main sugar administrative
building. The unidirectional antenna for the wireless LAN may be installed
on the rooftop of the main building of the mandal.
1.1.5] Warana Co-operative Bank
The main branch of the bank is a two storied building
distance of about 1 Km. from the Main Sugar

located at a

Administrative Building.

It has 20 branches in Kolhapur and Sangali districts. Most of these are within
30 Km radius from the main branch. Annual turnover of this bank is nearly
Rs. 28 corers. The roof top of the Main branch can be used for installation of
the unidirectional antenna for wireless LAN

1.1.6] Warana Co-op Milk Produce Society

The factory for processing Milk related products is situated at a

distance of approx 3 Kms from the Sugar administrative building. The
administrative office of the Milk Dairy is located at a distance of approx.
500mtrs from the Factory. This office has stand alone computers for its own
data processing. (Some of the important milk products are Pasteurized Milk,
Milk powder, Ghee, Butter, Shrikhand etc. Approximately 2 MT of
Shrikhand is sold in Mumbai alone daily. The factory processes about 2 lakhs
liters of milk per day collected from surrounding 176 villages in the
districts of Sangli, Satara and Kolhapur). The factory management has
shown keen interest in Computerization and networking, but has also stressed
on necessary training for the staff. This society has a branch office in
Mumbai from where daily information is required to be obtained. It is
recommended to have a Wireless LAN setup installed which could
communicate with the central VSAT installed on the Sugar Administrative
office. The Management has indicated that they have started processing for
Leased Line connectivity between the Sugar Administrative Office and the
Dairy Office. This may not be necessary once the Radio LAN is set-up.
With the sole intention of supplementing the income of zealous farmers
a great idea of dairy farming was put forth in the minds of enthusiastic team.
This resulted in the birth of the Warana Dairy, in 1968. This white revolution
has spread to all other 78 surrounding villages and added revenue of Rs. 150
cores per annum.

The dairy plant has a capacity to handle more than

300,000 liters of milk of which 100,000 liters can be
converted

into

milk

products.

clean

and

efficient

management of dairy brought the proud products of Warana

like Warana pasteurized Milk, Milk Powder, Ghee, Butter,

Shrikhand, Amrakhand, Lassi, Cheese, and Strawberry

Desert etc. These products once tasted chase the taster. The
dairy has made its strides all the way. The turnover for the
year 1997-98 was Rs. 138 corers. By selling 2035 tones of
Shrikhand in the year 1998, Warana reached a new record of
maximum selling of Shrikhand in India. For its qualitative and
quantitative excellent performance dairy has acquired an ISO
9002 Certification in record time of three months. M/S.
Cadbury India Ltd. has joined hands with Warana Dairy and
started production of Bournvita, Drinking chocolate and Cocoa
Powder. "Warana Stymena" - a malted milk product has
bagged a mammoth order of 550 metric tones from the Indian
Army. Even the 60% of total production of the Cadbury India
Ltd.'s Bournvita is produced from Warana Dairy. This simply
reflects the quality and efficiency of the dairy. Warana Dairy
has won many awards for its quality products and efficiency.
The dairy, in future, has ambitious plans to venture into
products like branded cheese, pasteurised butter, beverages
and ice creams. This will surely bring many credentials and
laurels to Warana.

Warana Cattle-feed division is producing the quality

cattle feed, which is supplied to the farmers for their cows
and buffaloes, at subsidized prices.
2] History

WARANA is eminently, a unique name that stands as

forerunner in the co-operative movement in India. The name
WARANA sounds suitable wherever there is a mention of cooperative movement. The uninitiated may be amazed by the
way barren land has been converted into a green valley. The
green valley with its smiling face welcomes the whole nation
for its exemplary services. "Love at first Sight" can be rightly
applied to this land of integrated rural development. The
beauty of this land makes music which can penetrate and lilt
the most inaudible ears and a riot of natural colors to the
most unaccustomed eyes and it can even make even the
unlettered to construct the duets. The activities in this valley
can enliven the most passive.

There is no name parallel to WARANA except perhaps the

WARANA RIVER, which flows parallel to WARANA. Warana
culture has set an example and is making wonders today.

WARANA- A successful name in the cooperative movement;

A successful name in the operation flood;

A successful name in the agricultural field;

A successful name in the sugar lobby;

A successful name in the education field;

A successful name in the banking field;

A successful name in the consumer services; industries; and

A successful name by itself!

All this did not happen by chance or through any sort of

magic. An incredible man set on an arduous mission with a

singular dream of achieving all these incredible things. The

man who sacrificed his joys, happiness and stood bold, to do
the best. This man like a sprint achieved the success in all the
fields. His words were Godly words to his followers. With an
undaunted strong belief along with his team when he struck,
the whole barren valley that was filled with dacoits and turned
it into a prosperous and polite land.

Who was this incredible man? Who was this motivator?

Who was this sprint? He was Late Vishwanath V. Kore alias
Tatyasaheb Kore.

Tatyasaheb Kore who did a magnificent miracle in the

land of Warana, born on 17th October 1914, he was the son of
a farmer in a small village Kodoli. Young Vishwanath Kore had
to overcome several hurdles due to the poverty of his family.
Besides poverty the sad demise of his parents might have
crunched him a great deal. But young Vishwanath did not
flinch an inch. Being the eldest in his family he took all the
responsibilities on his shoulder and through his hard work he
brought up the whole family through difficult times. By
entering the local village co-operative society in 1935 he
started his social service. He actively participated in Quit
India Movement of 1942. He was actively associated with
underground movement of Late "Y.B. Chavan - 1st Former Dy.

Prime Minister of India. Due to his social services he was

unanimously elected as President of Kodoli Municipality in
1940.

He plunged into a severe action when an unprecedented

depression in 1951 literally ruined the farmers of this area
and they had to burn out their sugar canes rather than
making jaggery and face the prospect of selling it at throw
away prices. This shocking incident made him to set up a
modern co-operative sugar factory in the barren land
WARANA situated next to Kodoli village. The success of this
sugar factory doubled his enthusiasm and lead to the overall
development of Warana Complex. Today Warananagar is a
place of many facets and fragrances and its success story
started unfolding with every sunrise. Warana is making
stupendous growth and is expected to make miracles in the
days to come.

India's largest dairy products, milk products selling

Organization. We have an ISO 9001-2000 & HACCP certified
organisation manufacturer & exporter of milk, milk products &
fruit poducts. Our plant situated 30 KMS from Kolhapur of
Maharashtra state in India. Warana is a Co-operative milk
union. We also undertake job work contracts of Multinational
Companies like Cadbuary, Novarties, Heinz India & Glaxo etc

3] Dairy Products:-

Warana Co-operative milk union offers best

quality milk products, India's leading dairy having capacity 5
lakhs/day.

1 Lassi : "Warana Lassi" The all season drinks its most

popular drink from warana.

2 Shrikhand : We have largest manufacturer & seller of

shrikhand in four flavors Badam, Pista, Keshar mango &
Elachi.

3 Ghee: Ghee is a quality products from warana available

in different packing sizes.

4 Cheese: Our product Mozzarella cheese, processed

cheese, pistta.

5 Butter: Solted butter, white butter & yellow butter are

our best products.

6 Milk : Milk & milk products from India like milk powder,
cheese, paneer, ghee, butter, lassi

7 Fruit :- Exporter of fruit pulp/puree like mango, guava,

banana etc.

8 Mango :- Alphonso mango pulp, Totapuri mango in

215kg drum pack & 3.1 k, 850gm tin pack.

9 Pulp :- We sale mango pulp, banana pulp, guava pulp.

10.

Baby Food :- We export baby food

(Infant formula)
11.

Banana :- Banana puree/pulp.

12.

Guava

:-

We

export

white

guava

pulp/puree.
13.

Jam :- Warana mixed and most delicious

fruit jam.
14.

Puree :- We offer Alphonso mango puree,

Totapuri mango puree, Banana puree, White

guava puree in natural flavour.

15.

Cream :- Skimmed milk powder, full

cream

milk

powder,

0%,26%

fat

quality

products from Warana.

16.

Malted :- Malted milk food, we are

planning to manufacture products like stamina

etc.
17.

Curd :- Warana co-operative milk union

products. Curd, butter, cheese, milk powder,

lassi, shrikhand, paneer etc.
18.

Butter :- Solted butter, white butter &

yellow butter.
19.

Paneer :- Malai paneer is our favorite

paneer products.
20.

Dudh

:-

Skimmed

milk

powder,

full

cream / whole milk powder from warana

4] Achievement

Vasantrao Naik Pratishthan Puraskar for our Dairy Unit

(First Prize) for the work of our Founder late Tatyasaheb
Kore for development of Cooperative Industry and
Education.

 Fie Foundation Puraskar to our Founder late Tatyasaheb

Kore for the work in Co-operative and social services.

" Sahakar Bhushan" Puraskar to our Founder late

Tatyasaheb Kore from Wai Urban Co-operative Bank for
the year 1993.

Awards (Puraskars) to Mr. Vinay Kore, President of

Warana Co-operative Group of Industries and Educational
Institutions for his work in Co-operative and Social
Services Fie Foundation Puraskar, 1997. "Sahakar Shree"
Puraskar, 1997.

First Prize from United Western Bank Ltd. to the

Managing Director, Shri. V. S. Chavan for his work in
Warana Co-operative Group of Industries and Educational
Institutions.

"Management

Excellence

Award"

for

our

Children's

Orchestra from Institute of Marketing and Management,

Pune.

 Award from Institute of Marketing & Management - First

Prize to our Warana Co-operative Group as the "Best Cooperative Group in India".

ISO-9002 Certification: ISO-9002 Certification from M/s:

TUV Bayern, Germany in the year 1999.

"Vanashri" Puraskar from Government of Maharashtra in

1999.

CHAPTER IV

DATA
INTERPRETATION

Interpretation

RATIO ANALYSIS
1) Current Ratio
Current assets
Current Ratio=

___________________
Current liabilities

Table 4.1
(figures in lakhs )

Years

2011-12

2012-

2013-

2014-

2015-

13

14

15

16

Current
Assets

4587.28

4122.75

4746.58

5617.86

6561.79

3768.15

4035.82

7035.03

8075.6

8215.59

1.21

1.02

0.67

0.69

0.79

Current
Liabilities
Ratios

Chart 4.1

RATIOS

CURRENT RATIO
1.4
1.2
1
0.8
0.6
0.4
0.2
0

Series1
1.21
1.02

2011-12

2012-13

0.67

0.69

2013-14

2014-15

YEARS

0.79

2015-16

Interpretation
Generally accepted ratio is 2:1. In
Warana Sahakari Dudh Utpadak Sangh it was very excellent in
year 2012-13 to 2013-14. But in year 2014-15 to 2015-16 it
was not satisfactory. It is below 1 which signifies danger in
future. The ratio lies between 0.67 to 1.21.

2) Quick Ratio Current assets - inventory

Quick Ratio = ________________________

Current Liabilities

Table 4.2
(figures in lakhs)

Years

2011-12

201213

201314

201415

201516

Quick
Assets

2787.2
8

2119.61

3160.2
6

Current
Liabilities

3768.1
5

4035.8
2

0.73

0.53

Ratios

2491.2
9

3864.0
9

7035.0
3

8075.6

8215.5
9

0.44

0.3

0.47

Chart 4.2

RATIOS

QUICK RATIO
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

Series1

0.73
0.53

0.47

0.44
0.3

2011-12

2012-13

2013-14
YEARS

2014-15

2015-16

Interpretation
From the above table & graph it is
interpreted that quick ratios are 0.73, 0.53, 0.44, 0.30 & 0.47
respectively. Generally accepted ratio is 1:1.But here in case
of Warana Sahakari Dudh Utpadak Sangh it seems to be not
satisfactory and trend of ratio is not constant. It shows
inadequacy of working capital.

3) Debt to Equity Ratio Outsiders Fund

Debt to Equity Ratio = ___________________

Shareholders Fund

Table 4.3
(Figures in lakhs)

Years
Outsiders

2011-

2012-

2013-

2014-

2015-

12

13

14

15

16

8393.3

7714.4

8171.5

7891.4

11804

Fund

1435.0

1481.5

1677.8

1983.1

2567.6

s Fund

Ratios

5.85

5.21

4.87

3.98

4.59

Shareholder

Chart 4.3

Interpretation

Generally low debt-Equity ratio is

favorable to for the creditors of the company. The standard
ratio is 1:1, but in case of Warana Sahakari Dudh Utpadak
Sangh debt-equity ratios are as 5.85, 5.21, 4.87, 3.98 and
4.59 respectively. Which are more than the specified standard
& dangerous for company in future.

4) Fixed Asset Turnover Ratio -

Sales
Fixed Asset Turnover Ratio = _________________

Net Fixed Asset

Table 4.4
(figures in lakhs)
2012-

2013-

2014-

2015-

13

14

15

16

Years

2011-12

Sales

17867

18394.7

18155.7

18514.5

19429

3115.33

3382.12

3432.12

3436.17

3754

5.74

5.44

5.29

5.39

5.17

Net Fixed
Asset
Ratios

Chart 4.4

Fixed Asset Turnover Ratio

Ratios

5.8

Series1

5.74

5.6

5.44

5.4

5.29

5.39
5.17

5.2
5
4.8
2011-12

2012-13

2013-14

2014-15

2015-16

Years

Interpretation
This ratio indicate the efficiency
with which firm utilizes its fixed assets. Here ratios are as
5.74, 5.44, 5.29, 5.39 and 5.17 respectively. High ratio is
beneficial for company, which shows how effectively firm
utilizes its investments.

It is relationship between sales and net assets.

The ratios are constant in each year. Sales and Net assets
increases proportional to each other.

5) Earning Per Share Net Profit

Earning Per Share = __________________

Number of Shares
Table 4.5
(figures in lakhs)

200

201

201

201

201

Years

8-09

2-13

3-14

4-15

5-16

Net Profit

3.01

3.71

2.55

1.72

3.72

No. Of

600

600

600

600

600

Shares

Ratios

0.00

0.00

0.00

0.00

0.00

Chart 4.5

Earning Per Share

Ratios

Series1
0.007
0.006
0.005
0.004
0.003
0.002
0.001
0

0.006

0.006

0.005
0.004
0.002

2011-12

2012-13

2013-14

2014-15

2015-16

Years

Interpretation
EPS is small variant of return on
equity capital. It gives a view of comparative earnings of firm.

High ratio is favorable to the shareholders of company. In case

of Warana Sahakari Dudh Utpadak Sangh it is very poor.
EPS in Warana Sahakari Dudh Utpadak Sangh is
not favorable to the shareholders.

6) Return on Shareholders Fund Net

Profit
Return on Shareholders Investment =
__________________

100

Shareholders Fund

Years
Net Profit

2011-12
3.01

2012-

2013-

2014-

2015-

13

14

15

16

3.71

2.55

1.72

3.72

Shareholders
Fund
Ratios
Table 4.6
(figures in lakhs)

Chart 4.6

1435.01

1481.53

1677.89

1983.13

2567.66

0.20%

0.25%

0.15%

0.08%

0.14%

Return on Shareholders Investment

Series1
Ratios

0.30%
0.25%
0.20%

0.25%
0.20%
0.15%

0.15%

0.14%
0.08%

0.10%
0.05%
0.00%
2011-12

2012-13

2013-14

2014-15

2015-16

Years

Interpretation
In Warana Sahakari Dudh Utpadak
Sangh return on Shareholders Investment is not constant.
There is more fluctuation in this ratio because of increase and

decrease in Net profit of the firm. The ratio lies between

(0.08) to (0.25). It also predicts the returns on investment.
In year 2005-06 net profit of company is very
poor (0.08) and it affects the returns of the shareholders. But
in year 2006-07 it again increases.

7) Return on Equity Capital -

Net Profit
Return on Equity Capital = ________________

Paid up
Capital
Table 4.7
(figures in lakhs)

Years
Net Profit

2011-

2012-

2013-

2014-

2015-

12

13

14

15

16

3.01

Paid up

3.71

2.55

1.72

3.72

231.4

Capital

230.36

232

235.77

258.41

Ratios

0.013

0.016

0.011

0.007

0.014

Table 4.7

Ratios

Return on Equity Capital

0.018
0.016
0.014
0.012
0.01
0.008
0.006
0.004
0.002
0

0.016
0.014

0.013
0.011
0.007

2011-12

2012-13

2013-14
Years

Interpretation

2014-15

2015-16

Return on Equity Capital which

relationship between profits of company and equity capital. It
is more constant in all the years but in year 2014-15 (0.007) it
decrease suddenly, because of the decrease in net profit of
the company. Again in year 2015-16(0.014) it is in increasing
phase which is good for company and its shareholders.
It is not favorable condition for the company
and its shareholders. The returns are very poor.

8) Gross Profit Ratio -

Gross Profit
Gross Profit Ratio = ________________X 100

Net Sales

Table 4.8
(figures in lakhs)

Years

2011-

2012-

2013-

2014-

2015-

12

13

14

15

16

815.5
Gross Profit

208.5

140.83

213.39

614

Net sales

19638

20558.2

22641.6

27920

30236.6

Ratios

1.05%

0.68%

0.94%

2.92%

2.03%

Table 4.8

Gross Profit Ratio

3.50%

2.92%

Ratios

3.00%
2.50%

2.03%

2.00%
1.50%

1.05%

1.00%

0.68%

0.94%

0.50%
0.00%
2011-12

2012-13

2013-14

2014-15

2015-16

Years

Interpretation
The above analysis shows that the
gross profit is 1.05%, 0.68%, 0.94%, 2.92%, and 2.03%
respectively. Higher the ratio better for the company and
good sign. But in Warana Sahakari Dudh Utpadak Sangh it is
not constant and not good enough.

9) Net Profit Ratio -

Net profit
Net profit Ratio = ____________ X 100

Net Sales

Table 4.8
( figures in lakhs )

Years
Net Profit

2011-

2012-

2013-

2014-

2015-

12

13

14

15

16

3.01

3.71

2.55

1.72

3.72

20558.
Net sales

19638

22641.6

27920

30236.6

Ratios

0.02%

0.02%

0.01%

0.01%

0.01%

Table 4.9

Net Profit Ratio

Series1

ratios

0.03%
0.02%

0.02%

0.02%

0.02%
0.01%

0.01%

0.01%

0.01%

2013-14

2014-15

2015-16

0.01%
0.00%
2011-12

2012-13

years

Interpretation
The above analysis shows that the
Net profit is as 0.02%, 0.02%, 0.01%, 0.01%and 0.01%
respectively. This is below the standard and also not
satisfactory to the company.. Higher the ratio better for the
company.

It decreases continuously in each year, which may

create problem for the company in future. The financial
position of the company is poor.

10) Operating Ratio Operating Cost

Operating Ratio =________________X 100

Net Sales

Table 4.10
( Figures in lakhs )

Years

2008-

2009-

09

10

20122010-11

2011-12

13

Operating
Profit

1372.74

1465.05

1494.05

1524.23

1993

Net sales

19638

20558.2

22641.6

27920

30236.6

Ratios

6.99%

7.12%

6.60%

5.45%

6.59%

Table 4.10

Operating Profit Ratio

Ratios

8.00%
7.00%

6.99%

7.12%

6.60%

6.59%
5.45%

6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2011-12

2012-13

2013-14
Years

2014-15

2015-16

Interpretation

Generally operating ratio

represented as percentage. The above table shows that the
operating ratio is as 6.99, 7.12, 6.60, 5.45 and 6.59
respectively. In above case we can see the fluctuations in the
operating ratio.
Generally very high ratio is not satisfactory to the
company. It is not good sign for the company. Operating cost
is increases very frequently in each year.

11) Cost of Goods Sold -

Cost of Goods Sold

Cost of Goods Sold = __________________X 100
Net Sales

Table 4.11

(Figures in lakhs)

Years
Cost Of

2011-

2012-

2013-

2014-

2015-

12

13

14

15

16

17867.

18394.

18155.

18514.

20558.

22641.

19638

27920

90.99%

89.47%

80.18%

66.31%

64.25%

Sales

Net sales
Ratios

Table 4.11

19429
30236.

Ratios

Cost of Goods Sold Ratio

100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%

90.99%

2011-12

89.47%

2012-13

80.18%

2013-14

66.31%

64.25%

2014-15

2015-16

Years

Interpretation
The above table shows the cost of
goods sold ratio is as 90.99, 89.47, 80.18, 66.31 and 64.25
respectively. This decreases continuously year after year. It is
good sign for the company. It also shows profitability of the

company. Lower is the ratio greater is the profitability of the

company.
In above case the net sale of the company
increases very steadily year after year.

12) Proprietary Ratio

Shareholders
Fund
Proprietary Ratio = ___________________X
100
Total Asset

Table 4.12
(Figures in lakhs)
Years

2011-12

2012-

2013-

2014-

2015-

13

14

15

16

Shareholders
Fund

1435.01

1481.53

1677.89

1983.13

2567.66

Total Asset

9828.28

9195.98

9849.46

9874.55

9886.3

Ratios

14.60%

16.11%

17.04%

20.08%

25.97%

Table 4.12

Proprietary Ratio Ratio

30.00%

25.97%

Ratios

25.00%

20.08%

20.00%
15.00%

14.60%

16.11%

17.04%

2012-13

2013-14

10.00%
5.00%
0.00%
2011-12

Years

2014-15

2015-16

Interpretation
Higher the proprietary ratio better
for the company. In case of Warana Sahakari Dudh Utpadak
Sangh proprietary ratio is favorable to the company. It shows
the solvency position of the firm. Here the ratio is in
increasing trend. It is as 14.60, 16.11, 17.09, 20.08 and 25.97
respectively. It shows good working conditions.

CHAPTER V

FINDINGS AND
SUGGESTIONS

Findings of Ratio Analysis

1) The Warana Sahakari Dudh Utpadak

Prakriya Sangh has its current ratio as 1.21,
1.02, 0.67, 0.69& 0.79 respectively. Here all
the ratios are below the rule of thumb
(2:1).The Firm may not able to pay its
liabilities as they falls due.

2) The acid test ratio of Warana Sahakari Dudh

Utpadak Prakriya Sangh is as 0.73, 0.53,
0.44, 0.30 and 0.47 respectively. Which is
below the rule 1:1.It shows The Firm is not
able to meet its current liabilities.

3) In company Debt-Equity ratio is satisfactory

and favorable. Generally Debt-Equity ratio

1:1 is satisfactory. But here all the ratios are

above the rule.

4) Fixed Asset Turnover ratios indicate the

efficiency at which Firm utilizes its fixed
Asset. Here the ratios are as 5.74, 5.44,
5.29, 5.39 and 5.17 respectively. Its ratios
are higher and favorable to the company.

5) In case of operating ratio each year

operating cost increases. It is not
satisfactory to the company.

6) The gross profit ratio is favorable in Warana

Sahakari Dudh Utpadak Prakriya Sangh. It is
in increasing trend since 2015-16.

7) The net profit ratio, each year net profit

ratio is decreases as 0.015, 0.018, 0.011,
0.006 and 0.012 respectively.

8) The solvency condition of the Warana

Sahakari Dudh Utpadak Prakriya Sangh is
good, while considering the proprietary
ratio.
9) Overall efficiency of the Firm is good by
considering return on Investment Ratio.

Suggestions -

1) The current ratio of the Warana Sahakari Dudh Utpadak

Prakriya Sangh is below the rule of thumb 2:1. So it is
suggested that to maintain the standard.

2) The Debt-Equity Ratio of the Warana Sahakari Dudh

Utpadak Prakriya Sangh is also dangerous. So they
should try to reduce it.

3) The Net Profit of the company is in decreasing trend. So

it is advised to the company that they should increase
their sales and reduce operating expenses.

4) The Quick Ratio of the Warana Sahakari Dudh Utpadak

Prakriya Sangh is also below the rule of thumb 1:1. So it
is advised to maintain it properly.

5) Warana Sahakari Dudh Utpadak Prakriya Sangh must

appoint special staff for collection of the sundry
debtors.

Bibliography

1. Sharma & Gupta, (1987), Management Accounting

Principals and practice, Kalyani Published, New Delhi.

2. Web-site - www.warana.org.com.

3. Annual reports of Warana Sahakari Dudh Utpadak

Prakriya Sangh.