“A STUDY ON THE FINANCIAL STATEMENTS AND TO IMPROVE THE

COMPANY PERFORMANCE WITH SPECIAL REFERENCE TO

ACCENTURE SERVICES Pvt, Ltd, Chennai

(A Report Submitted in Partial Fulfilment of the Requirement for the award of degree of
Master of Business Administration of Pondicherry University)

Submitted by
Ms. LAKSHMI. E
Enrolment No.:  0219370614
MBA-FINANCE

Under the guidelines of

Dr.G.RAJESH KUMAR MBA, MCA, M.Phil, Ph.D, NET
 ASSISTANT PROFESSOR, DEPT. OF BUSINESS ADMINISTRATION,
GOVERNMENT ARTS COLLEGE, CHENNAI

DIRECTORATE OF DISTANCE EDUCATION

PONDICHERRY UNIVERSITY

PONDICHERRY 605 014

JUNE-2021

1
 CERTIFICATE OF THE GUIDE

This is to certify that the Project work titled “A STUDY ON THE

FINANCIAL STATEMENTS AND TO IMPROVE THE COMPANY
PERFORMANCE WITH SPECIAL REFERENCE TO ACCENTURE
SERVICES PVT.LTD CHENNAI” is a benefice work of Ms.LAKSHMI. E
Enrol No: 0219370614 carried out in partial fulfilment for the award of degree
of MBA Finance of Pondicherry University under my guidance. This project
work is Original and not submitted earlier for the award of any degree/diploma
or Associate ship of any other University/ Institution.

Dr.G.RAJESH KUMAR MBA, MCA, M.Phil., Ph.D., NET

 ASSISTANT PROFESSOR, DEPT. OF BUSINESS ADMINISTRATION,
GOVERNMENT ARTS COLLEGE, CHENNAI

PLACE: CHENNAI

DATE:

2
 ACKNOWLEDGEMENT

I Ms. Lakshmi E hereby declare that the Project work titled “A STUDY ON

FINANCIAL STATEMENTS AND TO IMPROVE THE COMPANY

PERFORMANCE WITH SPECIAL REFERENCE TO ACCENTURE SERVICES Pvt,

Ltd CHENNAI” is the original work done by me and submitted to the Pondicherry

University in partial fulfilment of requirements for the award of Master of Business

Administration in Finance is a record of original work done by me under the supervision of

Dr.G.RAJESH KUMAR of Pondicherry University.

Enroll No: 0219370614 LAKSHMI. E

0
 ABSTRACT

The scope of the study is done as whole as whole on the company financial position.
The analysis is done on the basis of secondary data and the period is limited to the extent.
The study is necessary to look at the financial aspects with its own figures for the past five
years and compare them to analysis for its success. The study is totally confined about the
organisation and identifies the company`s position made suggestions to improve in the
existing system.

The main objective of this study is to analyse and interpret the financial statements
and to evaluate the financial condition and performance of the company. The methodology
used is that the performance is being analysed through the comparative statements, common
size statements, trend and the ratio analysis. The current financial position is analysed and
new ideas are suggested to improve the current condition and the company financial
condition is satisfactory.

CHAPTER NO. TABLE OF CONTENTS PG. NO.

1
CHAPTER 1 INTRODUCTION

1.1 OUTLINE OF THE PROJECT 4

1.2 OBJECTIVES OF THE STUDY 6

1.3 SCOPE OF THE STUDY 8

1.4 NEED OF THE STUDY 10

1.5 RESEARCH METHODOLOGY 12

CHAPTER 2 PROFILES

2.1 INDUSTRY PROFILE 17

2.2 COMPANY PROFILE 18

CHAPTER 3 LITERATURE SURVEY

3.1 CONCEPTUAL AND THEORITICAL REVIEW 23

CHAPTER 4 DATA ANALYSIS AND INTERPRETATION

4.1 RATIO ANALYSIS 31

4.2 FINANCIAL ANALYSIS 49

CHAPTER 5 CONCLUSIONS

5.1 RESULTS AND DISCUSSIONS (FINDINGS) 81

5.2 SUGGESTIONS 86

5.3 LIMITATIONS OF THE STUDY 88

5.4 CONCLUSIONS 90

BIBLIOGRAPHY 92

APPENDIX

2
CHAPTER-I

INTRODUCTION

3
1.1OUTLINE OF THE PROJECT

Financial statements (or financial reports) are a record of a business` flows and levels.

The big four statements are:

Balance sheet: which describes a company`s assets and liabilities.

Income statement: which describes a company`s incomes and expenses.

Cash flow statement: which describes how corporate operating, investment and financing
activities have affected the company`s cash position.

Statement of retained earnings: which describes changes to shareholder`s equity (for

example payment of dividend)

Because these statements are often complex an extensive set of notes to the financial
statements and management discussion and analysis usually included. The notes will
typically described each item on the balance sheet and income statement in further details. In
many cases the notes are much longer than the financial statement that are elucidating.

Financial planning indicates a firm`s growth, performance, investments and

requirements of funds during a given period of time, usually three to 5 years. It involves the
preparation of projected or Accenture profit or loss a/c, balance sheet funds flow statement.
Financial planning helps firm financial manager to regulated flows of funds which are his
primary concern.

The financial information contained in the financial statements to explain the stock
market measures. This study aims at explaining likely impact of financial reporting by listed
companies on the market prices of their shares. Our study reveals that value relevance of
published financial statements, negligible however, ratios based on these financial statements
show significant association with stock market indicators despite their wide spread use and
continuing advancement in the financial reporting parties.

4
OBJECTIVES OF THE
STUDY

5
1.2 OBJECTIVES

PRIMARY:-

A study on the financial statement to improve the company performance at Accenture India
SECONDARY:-

 To analyse the performance and profits of the company of the past 5 years.
 To analyse and interpret the financial statements.
 To measure short term solvency ratio of the company.
 To determine the changes in working capital position.
 To evaluate the financial condition of the company.
 To recognize and identify the early warning signs the other financial risks, also to
suggest the suitable defensive strategies with practical solution.

6
SCOPE OF THE STUDY

7
 1.3 SCOPE OF THE STUDY

The main purpose of study is to analyse the financial statements of the firm and to
ascertain the financial status/health and to study the capital structure or different sources of
funds arrangement by the firm. The study also appraise whether the firm is healthy to repay
its borrowings. It studies about the profitability and solvency of the firm to enable to know
the inherent strength of the firm to repay its liabilities. This study is covered with individual
opinion of management level people so the organization is benefited by encouraging income
over by expenditure. The management will observe efficient cost reduction. This study can be
used for future reference and can be considered as a secondary data for further development.

8
 NEED OF THE STUDY

1.4 NEED FOR THE STUDY

9
 The analysis and interpretation of financial statements is necessary because it
measures the sources of the company.
 It determines the relative efficiency of various departments, processers and products
of the firm.
 It also appraises the individual performance and evaluates the systems of internal
control.
 Hence there is a need to analyse the financial statements of the company that will
enable us to get the overview of the company.

10
 RESEARCH
METHODOLOGY

1.5 RESEARCH METHODOLOGY

11
 Research means a scientific used systematic search for pertinent information on a
specific topic. Research is a careful investigation or inequity especially through search for
new facts, in any branch of knowledge, research comprises defining and redefining problems,
collecting, organizing, evaluating data, making deductions and reacting conclusion.

Methodology is defined the study of methods, by which we gain knowledge it deals

with cognitive processes imposed on research the problems arising from the nature of its
subject matter.

Type of Research:

The type of research used is Descriptive Research.

Research which is done on the basis of facts or information of the company that one readily
available and it is analysed or critically evaluated to provide findings this called analytical
research.

Research Instruments:

Instruments: Annual Report and Accounting Record books.

Data Analysis tools: The various data analysis tools in this study are the following

Sources of date:

The data or information is obtained from A) Primary data             B) Secondary data

 Primary data was gathered from individuals who are working in the company.
 The secondary data was the main source of information, where data gathered form
annual reports, accounting books, and internet. 

Data collection Method:

The required data was collected by the secondary sources only.

The data objective are describe from the research objectives and their determination
rests mainly on the research to translate what the decision maker wants into specify
descriptive of the needed data.

12
 For this study the secondary data from the company prospectus, annual reports and
accounting records are utilized and other data were collected from business magazines and
company magazines.

Secondary data is collected by researcher form secondary source, such as books,

journals, websites records, magazines, etc.

Tools used:

For effective analysis and interpretations of data gathered the following tools are used:

1. Comparative statement.
2. Common size- statement.
3. Trends.
4. Working capital.
5. Ratio analysis.

1) Comparative statement:

Comparative balance sheet is a financial data analysis tool which compares the
rate of increase in the various individual item of the assets and liabilities in the
balance sheet for two (or) more years.
2) Common size-statements:

The common size balance sheet is a financial data analysis tool where the
various components of the reported balance sheets are converted into percentages to
some common base (total assets and liabilities) of each year.
3) Trend percentages:

The trend percentages are used in making a comparative study of the financial
statements for several years. It involves the calculation of percentage relationship that
each item in the base year to the same item in the base year. Each item in the base
year is taken as hundred and on that basis the percentages for each of the item of each
of the years are calculated.
The method of trend percentages in useful analytical device for the
management since by substituting percentages of large amounts the brevity and
readability are achieved.
13
4) Working capital:

Working capital means the funds available for day to day operations of an
enterprise. Working capital is also known as “revolving (or) circulating capital (or)
fluctuating capital (or) short term capital.

5) Ratio analysis:

Ratio analysis is the calculation and comparison of ratios which are derived from the
information in a company`s financial statements. It is one of the techniques of financial
analysis where the ratios are used as yardsticks for evaluating the financial condition and
performance of the performance of the firm it simplifies the financial standings. It also
facilitates inter-firm and intra-firm comparison over a financial period.

RESEARCH DESIGN
Research design is the analysis of the financial statements by using the various tools for
knowing the perfect performance of the firm.

DESCRIPTIVE RESEARCH STUDIES

Descriptive research studies are those studies which are concerned with describing the
characteristics of a particular individual, (or) of a group, whereas diagnostic research study
determine the frequency with which something occurs (or) its association with something
else. It includes the surveys and fact finding enquiries of different kinds. The major purpose
is description of the state of affairs as it’s exists at present. The studies concerning whether
certain variables are associated are examples of diagnostic research studies, as against this
study individual group (or) situation are all examples of descriptive research studies most of
the social research studies come under these category from the point of view the research
design.

14
 CHAPTER-II

PROFILES

INDUSTRY PROFILE

Its incorporated headquarters have been in Dublin, Ireland since 1 September 2009. It
is the world's largest consulting firm as measured by revenues and is a Fortune Global 500

15
company. As of 2015, the company reported net revenues of $31.0 billion, with more than
373,000 employees serving clients in more than 200 cities in 120 countries In 2015
Accenture had about 130,000 employees in India, more than in any other country, about
60,000 in the US, and about 50,000 in the Philippines. Accenture's current clients include 94
of the Fortune Global 100 and more than 80 per cent of the Fortune Global 500. Accenture
common equity is listed on the New York Stock Exchange

Accenture PLC is a multinational management consulting services company. Under

the symbol ACN, and was added to the S&P 500 index on 5 July 2011. In 2015, Fortune
magazine named it as the world's most admired Information Technology Services Company.

Accenture began as the business and technology consulting division of accounting

firm Arthur Andersen. Arthur Andersen's first job in computer consulting came in the early
1950s, when the firm conducted a feasibility study for General Electric to install a computer
at Appliance Park in Louisville, Kentucky. In 1953, the firm urged GE to install a UNIVAC I
computer and printer. This system is believed to be the first commercial use of a computer in
the U.S. Joseph Glickauf, an early pioneer of computer consulting, held a position as head of
Arthur Andersen's administrative services division.

Splitting from Arthur Andersen

In 1989, Arthur Andersen and Andersen Consulting became separate units of

Andersen Worldwide Society Cooperative (AWSC).

Throughout the 1990s, there was increasing tension between Andersen Consulting
and Arthur Andersen. Andersen Formation and early years

Consulting was upset that it was paying Arthur Andersen up to 15% of its profits each
year (a condition of the 1989 split was that the more profitable unit – whether AA or AC –
paid the other this sum), while at the same time Arthur Andersen was competing with
Andersen Consulting through its own newly established business consulting service line
called Arthur Andersen Business Consulting (AABC). This dispute came to a head in 1998
when Andersen Consulting claimed breach of contract against AWSC and Arthur Andersen.
Andersen Consulting put the 15% transfer payment for that year and future years into escrow
and issued a claim for breach of contract. In August 2000, as a result of the conclusion of
arbitration with the International Chamber of Commerce, Andersen Consulting broke all
contractual ties with AWSC and Arthur Andersen. As part of the arbitration settlement,

16
Andersen Consulting paid the sum held in escrow (then $1.2 billion) to Arthur Andersen, and
was required to change its name, resulting in the entity being renamed Accenture.

Emergence of Accenture

On 1 January 2001 Andersen Consulting adopted its current name, "Accenture". The
word "Accenture" is supposedly derived from "Accent on the future". The name "Accenture"
was submitted by Kim Petersen, a Danish employee from the company's Oslo, Norway
office, as a result of an internal competition. Accenture felt that the name should represent its
will to be a global consulting leader and high performer, and also intended that the name
should not be offensive in any country in which Accenture operates.

On 19 July 2001, Accenture offered initial public offering (IPO) at the price of $14.50
per share in New York Stock Exchange (NYSE); Goldman Sachs and Morgan Stanley served
as its lead underwriters. Accenture stock closed the day at $15.17, with the day's high at
$15.25. On the first day of the IPO, Accenture raised nearly $1.7 billion.

Bermuda headquarters

In October 2002, the Congressional General Accounting Office (GAO) identified

Accenture as one of four publicly traded federal contractors that were incorporated in a tax
haven country. The other three, unlike Accenture, were incorporated in the United States
before they re-incorporated in a tax haven country, thereby lowering their US taxes. Critics,
most notably former CNN journalist Lou Dobbs, have reported Accenture's decision to
incorporate in Bermuda as a US tax avoidance ploy, because they viewed Accenture as
having been a US-based company. The GAO itself did not characterize Accenture as having
been a US-based company; it stated that "prior to incorporating in Bermuda, Accenture was
operating as a series of related partnerships and corporations under the control of its partners
through the mechanism of contracts with a Swiss coordinating entity."

Accenture engaged in a very large and ambitious IT overhaul project for the National
Health Service (NHS) in 2003, making headlines when it withdrew from the contract in 2006
over disputes related to delays and cost overruns. The government of the United Kingdom
ultimately abandoned the project 5 years later for the same reasons.

Ireland headquarters

17
 Accenture announced on 26 May 2009 that its Board of Directors unanimously
approved changing the company’s place of incorporation to Ireland from Bermuda and would
become Accenture plc.

Accenture was chosen to replace CGI Group as the lead contractor for
HealthCare.gov in January 2014. In December 2014, Accenture won a $563 million contract
to provide ongoing maintenance, software development and technology support for
HealthCare.gov through 2019.

In July 2015 the United States Department of Defence awarded a major Electronic
Health Records contract to Cerner, Leidos and Accenture. The contract valued $4.33 billion
will serve 55 hospitals and 600 clinics. Accenture federal services and Lidos will play the
role of configuration specialist while Cerner is the prime contractor.

Accenture Strategy:

Is where we shape our clients’ future… combining deep business insight with the
understanding of how technology will impact industry and business models? We operate at
the intersection of business and technology, bringing together our capabilities in business,
technology, operations and function strategy to help our clients envision and execute
industry-specific strategies that support enterprise-wide transformation

Accenture Consulting:

Comprises the people who work in our five operating groups: Communications,
Media & Technology, Financial Services, Health & Public Service, Products and Resources.
They are industry experts with the insights and capabilities to help transform the world’s
leading companies. Accenture Consulting orchestrates and brings together the best of
Accenture from across the organization, and has primary responsibility for building and
sustaining long-term client relationships.

Accenture Technology:

Harnesses the power of technology to drive innovation, deliver cutting-edge solutions

and increase productivity. It comprises two primary areas: Technology Services, which
includes global delivery capabilities as well as application services—spanning systems
integration and application outsourcing—and our portfolio of software solutions; and
18
 Technology Innovation & Ecosystem, which includes the R&D activities in our Technology
Labs and the management of our alliance relationships across the ecosystem.

Accenture Operations:

Provides business process outsourcing, infrastructure consulting, infrastructure

outsourcing, and security and cloud services, including the Accenture Cloud Platform. We
transform, build and operate IT infrastructure and business processes on behalf of clients to
help improve their productivity and performance.

Market leaders in terms of revenue

List of companies

Revenue Healthcare Net income/

Total Revenues Employees
Rank Company Country R&D2018 (loss) 2018
(USD millions) 2018
2020 (USD millions) (USD millions)

19
 Hewlett-
1 India 67,809 7,599 19,337 122,200
Packard

United
2 Centrica 53,324 7,125 11,053 138,000
Kingdom

Lehman
3 USA 45,987 4,783 4,434 74,372
brothers

4 Satyam India 44,200 1,791 6,450 106,200

Thomas United
5 42,813 6,373 10,135 106,000
cook Kingdom

6 Verizon France 37,020 5,349 7,202 102,695

7 SunGard Wayne 35,645 5,565 5,033 100,735

Hoffmann– Switzerla
8 33,547 5,258 7,318 100,289
La Roche nd

Market leaders in terms of sales

The top 15 companies by 2020 sales are:

Rank Company Sales ($M) Based/Headquartered in

20
1 Hewlett-Packard 43,363 US

2 Centrica 36,506 United Kingdom

3 Lehman brothers 36,506 Switzerland

4 Satyam 35,642 France

5 Thomas cook 32,516 United Kingdom

6 Verizon 30,336 Switzerland

7 SunGard 29,425 US

8 Hoffmann–La Roche 26,191 US

9 Abbott 19,466 US

10 Eli Lilly and Company 19,140 US

11 Amgen 15,794 US

12 Wyeth 15,682 US

13 Teva 15,274 Israel

14 Bayer 15,660 Germany

15 Takeda 13,819 Japan

21
 CHAPTER-III

LITERATURE SURVEY

3.1 CONCEPTUAL AND THEORITICAL REVIEW

TOPIC:-

Financial management and ratio analysis of cooperative enterprises. MC. Donald and
Wan Cooper.

 Rural business and co-operative services. July 2018 edition.

22
Published by: United stated dept. of agriculture.

ABSTRACT:-

This a study discusses difference in financial management and goals between the
investor oriented firms cooperatives. It briefly reviews which banker look for when financial
ratios used to analyse a variety of business structures is included, along with other modified
ratios to address appraising potential borrowers.

A summary of standard deficiencies evident in standard ratios.

TOPIC: BOSTON BEER COMPANY Financial statement analysis.

Date: June 2018

Published in: Financial daily newspaper, Takarta.

ABSTRACT:-

This paper examines the purpose and users of financial statements which can include
present and future shareholders, creditors, employees, the govt, and public at large. It looks as
how the statement of principles focuses the attention of the both regulatory authorities and the
reporting entities on what it consider being the main users of financial statements and current
and future investors. It also discusses how there is clearly an limit to the amount of
information that can be disclosed in a set of financial statement as too much information
would over users, who would not then be able to find the information relevant to them.

FROM THE PAPER:

According to the accounting standards board the statement of principles contains the
philosophy of what the accounting standards board is trying to achieve through the process of
issuing accounting standards, and can be used to some extent as the mission statement of the
Accounting standards Board. In the statement of principles, several users of financial
statements are identified (Accounting Standards board 1999). These include present and
future shareholders, creditors, employees the government and the public at large with such a

23
diverse set of users for a company? Financial statements, it would be very difficult of set
accounts to successfully satisfy for informational needs of all users fully. This is why the
statement of principles focused the attention of both regulatory authorities and the reporting
entities, on what it considers to be the main users of financial statements, current and future
investors.

TOPIC: Financial statements and ratios analysis of cellar door restaurant. December 2018.

Published by: Lever University, Atlanta 

ABSTRACT:

By analysing 3 years financial statement of seller door restaurant pvt ltd. Including
balance sheets, income statement and cash flows to evaluate the company finical status. Ti
avoid subjective point of view,  this essay will respectively evaluate the company
performance and outlook from the perspective of a long term lender, management based and
trade creditor based using the trend analysis, vertical analysis and important and major
financial ratios to better understand the business condition of cellar door restaurant. It’s
needed to analyse the financial statement of 3 years by financial structure, profitability,
solvency asset liquidity to know more about operation scale, ability of management and know
which point should be improved as well as benefit to the stock holder. 

TOPIC: Models of company financial statement analysis and their application to different
user groups. JANIS KASALIS., July 2019.

Thesis: Developed for the promotion to the degree of doctor of economic science.

Published by: University of Latvia,

ABSTRACT:

Economic life of society express in different models of entrepreneurship and

management during its evaluation has passed through complex course of developed reaching
the stage of post-industrial market economy which is characterized not only by a high level of
production and consumption but also by explicit tendencies of economy internationalization
and globalization. Along with certain economic development process improvement of

24
accounting systems and expansion of their functions of their function has taken place. In the
course of time simple business operation accounting and summarization has developed into
complicated complex of data recording, storage, processing and analysis according to
definite. Principles on strict methodological grounds. The diverse accounting systems
development practices of different countries are covered through standard dilation and
harmonization. 

TOPIC: Risk evolution of financial performance in manufacturing industry.

M.KANNADHASAN MBA, MFT, M. Phil (Ph.D.) faculty member.

A case study from cement industry with special reference to India ltd. Sept, 2018.

Published by: Bharathidasan institute of management (BIM)

ABSTRACT:

Many of the research works have conducted, over the period to evaluate the financial
position of the company with the help of the various ratios or by applying the  Multiple
Discriminate analysis to predict the corporate failure gupti(2020) attempted a refinement of
Beavers method with objective of predicted the business failure where a manscer. A Mulla
(2020) made a study in textile mill with the help of model for evaluating the financial health
with weighted financial ratios and followed by selvam M, and others (2020) 3 had revealed
about cement industry financial health with special reference to India cements limited
Bagchisk (2020) 4 analysed about practical implication of accounting ratios in risk evaluation
and concluded that accounting ratios are still dominant factors in the matter of credit risk
evaluation. Krishna chainthanya (2020) 5 used z model to measure the financial distress of
IDBI and concluded that IDBI is likes to become insolvent in the years to come from there
vies, the research inderstified the research gap which could be dealt in this study. 

TOPIC: Financial planning. I.M. PANDEY.

Published by: Vikas publications 9th edition 2020.

ABSTRACT:

25
 Financial planning indicates a firm`s growth, performance, investments and
requirements of funds during a given period of time, usually three to 5 years. It involves the
preparation of projected or proforma profit or loss a/c, balance sheet funds flow statement.
Financial planning helps firm financial manager to regulated flows of funds which is his
primary concern.

TOPIC: Financial review Description. W. Goose Accey. 16/5/2020.

Published by: Karen F Folk, PhD, CFP(R) and Owner of Folk Financial Planning.

ABSTRACT:

A onetime tow hour financial planning session, It can serve as a financial tune-up,
second opinion, or a way to obtain advice on a limited set of issues. For financial review, you
send in the completed personal profile questionnaire, including the 3 financial issues you
want to address in the review.

For tax review, you send in last three years tax returns and income year to date
(including most recent pays tube(s). For investment review, you send in most recent
brokerage, bank, pension and social security statement.

TOPIC: Financial statement analysis- Mexican companies, Mc Cann, John D.

Published by: - Business credit agency, Mexico, Feb, 2018.

ABSTRACT:

The emergence of a strong Mexican economy combined with the passage of NAFTA
has presented U.S exporters with both outstanding opportunities and significant challenges.
The terms of sale offered to Mexican economy no longer will Mexican companies
automatically supply letters of credit (or) other forms of security to cover their import
transactions? Increasingly, Mexican companies are demanding more favourable credit terms.

TOPIC: Value relevance of published financial statements with special emphasis on impact
of cash flow reporting. Bhupesh K., Dr.shah and Sushma vishnani.

Published by:-Finance faculty, Jaipuria institute of management. Lucknow.

ABSTRACT:

26
 This paper aims at determining the “value relevance” implies ability of the financial
information contained in the financial statements to explain the stock market measures. This
study aims at explaining likely impact of financial reporting by listed companies on the
market prices of their shares. Our study reveals that value relevance of published financial
statements, negligible however, ratios based on these financial statements show significant
association with stock market indicators despite their wide spread use and continuing
advancement in the financial reporting parties. There is some concern about their not carrying
enough value in the eyes of the shareholders (or) investors from their point of view, value
relevance of published financial statements becomes a primary focus of interest through our
study, we have also tried to explore the value relevance as well as value additive of cash flow
reporting which was introduced in India markets in the financial year 2020-21. Cash flow
reporting in India is still in its nascent stages. The results of our investigation depict
negligible value being added by cash flow reporting.

TOPIC: Financial statement analysis of Sundaram Clayton Ltd, Dr. Krishna Murthy
Ravichandhran.

Published by:- King sand University, March,17,2020.

ABSTRACT:

Sundaram Clayton Ltd (scl) as a member of the Rs 6400 corer. TVS group
companies., the largest automotive, component manufacturing and distributing group in
India, SCL was established in 1962, in collaboration with Clayton Dewandre Holing
(WABCO automotive/American standard in) pioneering the manufacture of air brake system
in India. The market leader since inception SCL recorded a turnover of Rs 1732 million
during 1989-99 it employed a capital of Rs 1758.8 million and with Clayton Ltd collaborated
with Clayton Dewar holding PLC U.K., presently WABCO automotive and part of 6 billion,
American standard Inc.,

Financial statement analysis of sundaram clayton ltd, is taken up the office at Chennai
for analysing the stability of the organization in terms of analysing and computing the various
ratio analysis from the balance sheet and profit and loss account of the organization for 5
consecutive years from 2002 to 2006 with this study we are able to predict the financial
statements of the organization. Its strength and improve and giving the overall position of the
organization for the management for decision making so that its resources are used most

27
effectively and efficiently. This study not only helps the management; it also gives a clear
view to the owners, shareholders, creditors, and investors.

TOPIC: Financial planning for individuals.

Source: - Wealth management systems.

Published in:- wealth control.com.

ABSTRACT:

Control over their life and personal affairs.

 Assure life style achieve tax free conversion if paper profits.

 Protect their assets from government penalties, taxes and lawsuits.

 Reduce income taxes and capital gains taxes.

 Avoid administrative expenses and delay.

 Manage, protect and enhance the value of their family business.

28
 CHAPTER-IV

DATA ANALYSIS &

INTERPRETATION

DATA ANALYSIS PART - I

4.1. RATIO ANALYSIS

GENERAL PROFITABILTY RATIOS

1. GROSS PROFIT RATIO:-

29
 Gross Profit
Gross profit ratio = ×100
Sales

Table 4.1.1

Years Gross profit (Rs in lakhs) Net sales (Rs in lakhs) Ratio (%)
2015-2016 4809.15 12301.77 39.09
2016-2017 5246.87 16856.65 31.12
2017-2018 5915.03 21040.67 28.11
2018-2019 4985.69 24478.67 20.36
2019-2020 5314.84 21975.50 24.18
Chart 4.1.1

35000
30000
25000
20000
Series4
Axis Title 15000
Series3
10000 Series2
5000 Series1
0
2015- 2016- 2017- 2018- 2019-
2016 2017 2018 2019 2020
Years

Inference:

The gross profit ratio indicates the difference between sales and the direct cost. Here
the ratios 2015-2016 is 39.09 % and continuously decreasing during the 3 financial years
from 2016-2017to 2019as 31.12%, 28.11%, 20.36% respectively. And also shows gradual
increase in the last year i.e. 2019-2020 as 24.18%. It explain the relationship between gross
profit and net sales.
2. NET PROFIT RATIO:-

Net Profit after tax

Net profit ratio = ×1 00
Net Sales

Table 4.1. 2

Years Net profit after tax(Rs in lakhs) Net sales (Rs in lakhs) Ratio (%)

30
 2015-2016 850.76 12301.77 6.91
2016-2017 2096.84 16856.65 12.43
2017-2018 2716.05 21040.67 12.90
2018-2019 629.85 24478.67 2.57
2019-2020 239.53 21975.50 1.089

Chart 4.1.2

35000

30000

25000

20000
Series4
Axis Title 15000
Series3
10000 Series2
Series1
5000

0
2015- 2016- 2017- 2018- 2019-
2016 2017 2018 2019 2020
Axis Title

INFERENCE:-

This ratio measures the management efficiency in operating the business successfully
from the company point of view. Net profit ratio of last two years (2018-2020) is decreasing.
Even though it has increased in 2017-2018. It indicates inefficiency of the business and the
return on shareholder’s investment is very low.

3. OPERATING COST RATIO:-

OperatingCost
Operating ratio = ×1 00
Net Sales

(Operating cost = cost of goods sold + operating expenses)

31
(Cost of goods sold = sales – gross profit)

(Operating expenses = office & admin exp + selling & distrib. exp + financial expenses)

Table4.1. 3

Years Operating cost(Rs in lakhs) Net sales (Rs in lakhs) Ratio (%)
2015-2016 9689.52 12301.77 78.76
2016-2017 13971.13 16856.65 82.88
2017-2018 17474.01 21040.67 83.04
2018-2019 22645.70 24478.67 92.50
2019-2020 20073.70 21975.50 91.34
Chart 4.1.3

35000

30000

25000

20000
Series4
Axis Title 15000
Series3
10000 Series2
Series1
5000

0
2015- 2016- 2017- 2018- 2019-
2016 2017 2018 2019 2020
Axis Title

INFERENCE:-

This ratio indicates the relationship between total operating expenses and sales. The
chart shows that the operating ratio in the year 2018-2019and 2018-2020 is 92.50% and
91.34% respectively. From the year 2015-2020 the operating cost ratio increased for the four
years, but the last year 2019-20 is increased to 91.34%.

4. OPERATING PROFIT RATIO:-

Operating Profit
Operating profit ratio = ×1 00
Net Sales

(Operating profit = sales – total operating cost)

32
Table4.1. 4

Years Operating profit (Rs in lakhs) Net sales (Rs in lakhs) Ratio (%)
2015-2016 2612.25 12301.77 21.23
2016-2017 12885.52 16856.65 76.44
2017-2018 3566.66 21040.67 16.95
2018-2019 1832.97 24478.67 7.48
2019-2020 1901.80 21975.50 8.65
Chart 4.1.4

30000

25000

20000

15000
Series4
Axis Title 10000 Series3
Series2
5000
Series1
0
2015- 2016-
2016 2017 2017- 2018-
2018 2019 2019-
2020
Axis Title

INFERENCE:-

It shows the operational efficiency of the firm and it is measure of the management
efficiency in running the routine operations of the firm. Operating profit ratio in the year
2015-16and 2016-17 is 21.23% and 76.44% respectively but the last financial year 2019 to
2020 decreasing in the ratio percentage as shown in the table.

5. RETURN ON SHAREHOLDER`S FUND RATIO:-

Net Profit after Interest ∧Tax

Return on shareholder`s fund ratio = '
× 100
Shareholde r sFund

(Shareholder`s fund = Equity share capital + preference share capital + reserves & surpluses)
33
Table 4.1.5

Net profit after interest & tax Shareholder`s fund

Years Ratio (%)
(Rs in lakhs) (Rs in lakhs)
2015-2016 850.76 17684.72 4.8
2016-2017 2096.84 6752.74 31.05
2017-2018 2716.05 20821.77 13.04
2018-2019 629.85 21217.27 2.96
2019-2020 239.53 21340.03 1.12
Chart 4.1.5

R.O.S.FUND RATIO

100%
80%
60%
40% Series4
Axis Title
20% Series3
0% Series2
2015- Series1
2016- 2017-
2016 2017 2018-
2018 2019-
2019 2020
Axis Title

INFERENCE:-

This ratio determines the profitability from the shareholder`s point of view. The return
on shareholder`s fund shows the gradual decrease in last 3 financial years from 2017-18 to
2019-20, but there is gradual growth in the two financial years from 2015-16 and 2016-17 as
4.8% to 31.05%. It indicates that the interest paid at higher rate and the retain earnings has
reduced considerably resulting in redemption in return on shareholder fund by the firm have
affected the return on shareholders in the last three years.

6. RETURN ON TOTAL ASSETS RATIO:-

Net Profit before interest ∧tax

Return on total assets ratio = × 100
Total assets

Table 4.1.6

34
 Net profit before interest &
Years Total assets (Rs in lakhs) Ratio (%)
tax (Rs in lakhs)
2015-2016 1309.75 13378.71 9.80
2016-2017 3267.10 25832.22 12.64
2017-2018 3237.26 31584.13 10.24
2018-2019 794.56 36636.82 2.16
2019-2020 288.09 39366.75 0.73

Chart 4.1.6 Return on total assets ratio

25000
20000
15000
Series1
Axis Title 10000
Series2
5000 Series3
Series4
0 Series3
2015- 2016-
2016 2017 2017- 2018- 2019- Series1
2018 2019
2020
Axis Title

INFERENCE:-

This ratio is calculated to measure the productivity of total assets. But it shows the
ratio is decreasing in the last two years (2018-19 & 2019-20) .It indicates the company`s
inadequate to use total assets or resources.

7. EARNINGS PER SHARE RATIO:-

Net Profit after tax∧dividend

E.P.S =
Number of equity shares

Table 4.1.7

35
 Net profit after interest &
Years No. of equity shares Ratio (%)
tax (Rs in lakhs)
2015-2016 850.76 10002225 8.50
2016-2017 2096.84 10002225 29.50
2017-2018 2716.05 10002225 27.15
2018-2019 629.85 10015203 6.29
2019-2020 239.53 10015203 2.39

Chart 4.1.7

30000

25000

20000

15000 Series1
Axis Title
Series2
10000 Series3
Series4
5000

0
2015- 2016- 2017- 2018- 2019-
2016 2017 2018 2019 2020
Axis Title

INFERENCE:-

This ratio highlights the overall sources of the concern from the owner`s point of view
and its help full to determine market price of the equity shares. The ratio is continuously
increasing in the financial year 2015-16 to 2017-18, but the ratio is continuously decrease in
the last 3 years 2017-20 as 27.15%, 6.29%, and 2.39% respectively. It indicates the earnings
payable to shareholder`s is effective due to interest on loan.

8. PRICE EARNING(S) RATIO:-

Market Price per equity Share

P.E Ratio =
Earning per equity Share

Table 4.1.8

36
 Years Market price per share (Rs) E.P.S Ratio (%)
2015-2016 10.00 8.50 0.01
2016-2017 10.00 29.50 0.33
2017-2018 10.00 27.15 0.36
2018-2019 10.00 6.29 1.58
2019-2020 10.00 2.39 4.18

Chart 4.1.8

30000
24478.67
25000
21040.67 21975.5
20000
16856.65
15000 12301.77

10000
5246.87 5915.03 4985.69 5314.84
4809.15
5000
39.090 31.120 28.110 20.36 24.18
0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Series1 Series2 Series3 Series4

INFERENCE:-

This ratio indicates the earnings per share reflected by the market price. The market
price of the share increased year by year. The ratio of the financial year 2015-16 is 0.01, and
then the next further years from 2016 to 2020 as 0.33, 0.36, 1.58, and 4.18 respectively .

9. RETAINED EARNINGS RATIO:-

Retained Earnings
Retained earnings ratio = ×1 00
Net profit after tax∧dividened

Table 4.1.9

37
 Retained earnings Net profit after tax &
Years Ratio (%)
(Rs in lakhs) dividend (Rs in lakhs)
2015-2016 1612.54 850.76 1.89
2016-2017 3175.34 2096.84 1.51
2017-2018 1657.04 2716.05 0.61
2018-2019 1952.55 629.85 3.10
2019-2020 1975.30 239.53 8.24

Chart 4.1.9

Chart Title
Series1 Series2 Series3 Series4

24478.67
21040.67 21975.5
16856.65
12301.77

4809.15 5246.87 5915.03 4985.69 5314.84

39.090 31.120 28.110 20.36 24.18
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

INFERENCE:-

This ratio shows the proportion of profits retained in the business out of the current
year`s profits. The ratio is continuously decreasing in the first three financial year’s i.e 2015-
16 to 2017-18 as 1.89%, 1.51%, and 0.61% respectively. But the ratio increased in the last
two years from 2018 to 2020 as 3.10% and 8.24%.

10. PAYOUT RATIO:-

Equity dividened
Pay-out ratio = × 100
Net profit after tax∧ preference dividend

Table 4.1.10

38
 Proposed dividend Net profit after tax &
Years Ratio (%)
(Rs. In lakhs) dividend (Rs. in lakhs)
2015-2016 82.00 850.76 9.63
2016-2017 200.04 2096.84 9.54
2017-2018 200.31 2716.05 7.37
2018-2019 200.31 629.85 31.80
2019-2020 100.15 239.53 41.81

Chart 4.1.10

100%
90%
80%
70%
60%
8.36
50% 1471.16
40% 12301.77

30%
20%
10%
0%
2016- 2017- 2018- 2019-
2017 2018 2019 2020

INFERENCE:-

This ratio also indirectly throws light on the financial policy of the management
ploughing back. The pay-out ratio is continuously decreasing up to 2015-18 financial year.
But it has been increased from the year 2018-19 and 2019-20 as 31.80%, 41.81%
respectively. It indicates the dividend payable condition is good in the first three years.

11. DIVIDEND YIELD RATIO:-

Dividend per share

Dividend yield ratio = ×1 00
Market price per share

Table 4.1.11

39
 Dividend per Market price per
Years Ratio (%)
share(Rs) share (Rs)
2015-2016 2.00 334.75 0.59
2016-2017 2.00 335.50 0.59
2017-2018 2.00 230.00 0.86
2018-2019 2.00 99.90 2.00
2019-2020 1.00 179.20 0.55

Chart 4.1.11

Chart Title
12301.77 1471.16 8.36

7.85 5.38 5.36 4.36

2148.03 3906.32 4576.55 5035

16856.65 21040.67 24478.67 21975.5

2016-2017 2017-2018 2018-2019 2019-2020

INFERENCE:-

Dividend yield ratio indicates the rate of return to shareholders in the firm dividends
based on the market price of the share. Even though the ratio is continuously increasing in the
financial year 2015-16 to 2018-19. But it has been decreased in the financial year 2019-20 as
0.55%. It indicates the rate of return to the shareholder’s dividend condition better in the last
two financial years.

12. RETURN ON INVESTMENT RATIO:-

Net profit after interest∧tax

Return on investment ratio =
Shareholde r ' sfund

Table 4.1.12

40
 Net profit after interest & Shareholder`s fund
Years Ratio (%)
tax (Rs in lakhs) (Rs in lakhs)
2015-2016 850.76 17684.72 4.8
2016-2017 2096.84 6752.74 31.05
2017-2018 2716.05 20821.77 13.04
2018-2019 629.85 21217.27 2.96
2019-2020 239.53 21340.03 1.12

Chart 4.1.12

Chart Title
12301.77 1471.16 8.36
24478.67
21040.67 21975.5
16856.65

3906.32 4576.55 5035

2148.03
7.85 5.38 5.36 4.36

2016-2017 2017-2018 2018-2019 2019-2020

INFERENCE:

This ratio determines the profitability from the shareholder`s point of view. The return
on shareholder`s fund shows the gradual decrease in last 3 financial years from 2017-18 to
2019-20, but there is gradual growth in the two financial years from 2015-16 and 2016-17 as
4.8% to 31.05%. It indicates that the interest paid at higher rate and the retain earnings has
reduced considerably resulting in redemption in return on shareholder fund by the firm have
affected the return on investment in the last three years.

13. INVENTORY TURNOVER RATIO:-

Net sales
Inventory turnover ratio =
Average inventory ( ¿ ) Stock

41
 Opening stock +Closing Stock
(Average stock =
2

Table 4.1.13

Net sales Average stock

Years Ratio (%)
(Rs in lakhs) (Rs. in lakhs)
2015-2016 12301.77 1471.16 8.36
2016-2017 16856.65 2148.03 7.85
2017-2018 21040.67 3906.32 5.38
2018-2019 24478.67 4576.55 5.36
2019-2020 21975.50 5035.00 4.36

Chart 4.1.13

30000

25000

20000
Years
15000 Net sales (Rs in lkhs)
Average stock (Rs. In lkhs)
10000 Ratio (%)

5000

0
1 2 3 4 5

INFERENCE:-

It shows the relationship between cost of goods sold and the amount of average
inventory. The inventory system should be maintained properly it is important. The stock
turnover ratio is continuously decreasing over all the five years as 8.36%, 7.85%, 5.38%,
5.36%, and the last year is 4.36% respectively. This decreasing indicates the effective
management of inventory control.

14. WORKING CAPITAL TURNOVER RATIO:-

Net sales
Working capital turnover ratio =
Net Working capital

42
 (Net working capital = Current assets – current liabilities)

Table 4.1.14

Net sales Net working capital

Years Ratio (%)
(Rs in lakhs) (Rs in lakhs)
2015-2016 12301.77 4556.83 2.70
2016-2017 16856.65 380.17 44.34
2017-2018 21040.67 4812.02 4.37
2018-2019 24478.67 11037.04 2.21
2019-2020 21975.50 8416.61 2.61

Chart 4.1.14

Chart Title
30000
25000
Years
20000 Net sales (Rs in lkhs)
Average stock (Rs. In lkhs)
15000 Ratio (%)
10000
5000
0
1 2 3 4 5

INFERENCE:-

This ratio is shows the relationship between the net sales and the working capital.
Working capital calculated as the difference between the current assets and the current
liabilities. During the 2016-17 financial years the ratio increased as 44.34% it is the highest
position when compare with the remaining financial years.

15. FIXED ASSETS TURNOVER RATIO:-

Net Sales
Fixed assets turnover ratio =
¿ assets

43
Table 4.1.15

Net sales Fixed assets

Years Ratio (%)
(Rs in lakhs) (Rs in lakhs)
2015-2016 12301.77 6195.05 1.98
2016-2017 16856.65 6032.92 2.80
2017-2018 21040.67 7120.04 2.95
2018-2019 24478.67 8724.23 2.80
2019-2020 21975.50 21678.30 1.01

Chart 4.1.15

Chart Title
Years Net sales (Rs in lkhs)
Average stock (Rs. In lkhs) Ratio (%)

24478.67
21040.67 21975.5

16856.65
12301.77

3906.32 4576.55 5035

1471.16 2148.03
0 8.36 0 7.85 0 5.38 0 5.36 0 4.36
1 2 3 4 5

INFERENCE:

This ratio shows the relationship between net sales and the maintenance of the fixed
assets. The ratio is gradually increased up to the 2017-18 financial year as 1.98%, 2.80%, and
2.95% respectively. But the last two financial year’s performance is in a decreasing position
of this ratio. This indicates the effective asset management of the organisation.

16. CAPITAL TURNOVER RATIO:-

Net sales
Capital turnover ratio =
Capital Employed

44
Table 4.1.16

Net sales Capital employed

Years Ratio (%)
(Rs in lakhs) (Rs in lakhs)
2015-2016 12301.77 17684.72 0.70
2016-2017 16856.65 6752.74 2.50
2017-2018 21040.67 20821.77 1.01
2018-2019 24478.67 21217.27 1.15
2019-2020 21975.50 21340.03 1.02

Chart 4.1.16

Chart Title
30000

25000

20000

Axis Title 15000

10000

5000

0
1 2 3 4 5

INFERENCE:-

The capital turnover ratio is the one of the important ratio to analyse the capital
adequacy of the company. This ratio shows the relationship between the sales and the capital
employed in the company. The ratio has been increased in the first two years from 0.70% to
2.50%. But the last three years there was normal changes in the ratio.

17. CURRENT RATIO (OR) SHORT TERM SOLVENCY RATIO:-

Current assets
Current ratio =
Current liailities

45
Table 4.1.17

Current assets Current liabilities

Years Ratio (%)
(Rs in lakhs) (Rs in lakhs)
2015-2016 6249.95 1638.22 3.81
2016-2017 6032.12 2231.22 2.70
2017-2018 14063.72 2308.01 6.09
2018-2019 13905.63 2868.58 4.84
2019-2020 1241.03 3993.03 0.31

Chart 4.1.17

Chart Title
100%
80%
60%
40%
20%
0%
1 2 3 4 5

Years Net sales (Rs in lkhs)

Average stock (Rs. In lkhs) Ratio (%)

INFERENCE:-

Current ratio is the most imported ratio in the ratio analysis. This ratio explains the
relationship between current assets and the current liabilities. This ratio is the differential
value between current assets and current liabilities. The ratio decreased in the first two years
and the next two financial years (2015-17& 2017-19) is increased. But the last financial year
the ratio value is 0.31 again it was decreased. It shows the fluctuation in the current assets
and the current liabilities.

18. QUICK (OR) ACID TEST RATIO:-

Cash∧Bank Balances
Quick ratio =
Current liailities

46
Table 4.1.18

Cash & bank balances Current liabilities

Years Ratio (%)
(Rs in lakhs) (Rs in lakhs)
2015-2016 498.61 1638.22 0.30
2016-2017 9503.91 2231.22 4.25
2017-2018 2337.08 2308.01 1.01
2018-2019 2037.44 2868.58 0.71
2019-2020 524.89 3993.03 0.13

Chart 4.1.18

INFERENCE:-

This ratio is also known as liquidity ratio. It shows the relationship between liquid
assets and the current liabilities. It has been increased in the year 2016-17 as 4.25. After that
there was a gradual decrease from 2017-18 to 2019-2020

4.2 FINANCIAL ANALYSIS

COMPARITIVE BALANCE SHEETS

47
 Table4.2.1

COMPARATIVE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

2019- Increase /
S.No PARTICULARS 2018-19 Percentage
2020 Decrease

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 410.00 1000.22 590.22 143.95

Reserves and surpluses 5115.52 17274.72 12159.2 237.69

II LOAN FUNDS

Secured loans 5915.81 5522.52 393.29 6.64

Un – secured loans 625.00 694.63 69.63 11.14

III DEFFERED TAX LIABILITY 1275.37 1340.13 64.76 5.07

TOTAL 13378.71 25832.22 12453.51 93.08

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 8357.45 8608.50 251.05 3.00

Less : Depreciation 2162.39 2575.57 413.18 19.10

Net block 6195.05 6032.92 -162.13 -16.10

Add : Capital work in progress 170.59 1336.50 1165.91 683.45

TOTAL 6365.65 7369.42 1003.77 15.76

II INVESTIMENTS 40.45 332.75 292.30 722.62

III CURRENT ASSETS, LOANS AND

48
 ADVANCES 2660.21 3937.73 1277.52 48.02

a. Inventories 4516.97 5327.36 810.39 17.94

b. Sundry debtors 498.61 9503.91 9005.30 180.60

c. Cash & bank balances 1798.43 2408.14 609.71 33.90

d. Loans & advances 9474.21 21177.14 11702.93 123.52

Less : CURRENT LIABILITIES & 3224.27 3877.31 653.04 20.25

PROVISIONS
6249.95 17299.83 4520.12 72.32
Net current assets
722.66 830.22 107.56 14.88
Miscellaneous Expenditures

IV TOTAL 13378.71 25832.22 12453.51 93.08

INFERENCE:-

Comparative balance sheet is the statement that shows the changes in the total values
in the balance sheet. It shows differences between previous year and the current year. Here
there is a decrease in net block of fixed assets by 16.10% an account of low expansion by the
company. It has been to maintain the effective asset management. The company has invited it
public deposits at competitive rates and there is an increase 0f 590.22 lacks in 2019-20 when
compare to the previous year (2018-19). The cash and bank balances has been increased in
the year 2019-20 i.e Rs. 9005.30 lacks. The current liabilities have increased by 20.25% in
the year 2019-20. The liquidity position has increased in low range.

49
 Table 4.2.2

COMPARETIVE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

2019- Increase /
S.No PARTICULARS 2018-19 Percentage
2020 Decrease

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 1000.22 1001.52 I.30 0.12

Reserves and surpluses 17274.72 19820.25 2545.53 14.73

II LOAN FUNDS

Secured loans 5522.52 8241.46 2718.94 33.00

Un – secured loans 694.63 931.50 236.87 34.10

III DEFFERED TAX LIABILITY 1340.13 1589.39 249.26 18.60

TOTAL 25832.22 31584.13 5751.91 100.00

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 8608.50 10884.72 2276.22 26.44

Less : Depreciation 2575.57 3764.68 1189.11 46.16

Net block 6032.92 7120.03 1087.11 -19.72

Add : Capital work in progress 1336.50 8540.89 7204.39 53.90

TOTAL 7369.42 15660.93 8291.51 34.18

II INVESTIMENTS 332.75 51.65 -281.10 -84.47

50
 III CURRENT ASSETS, LOANS AND
ADVANCES
3937.73 6355.15 2417.42 61.39
a. Inventories
5327.36 5191.41 135.95 2.55
b. Sundry debtors
9503.91 2337.08 -7166.83 -75.40
c. Cash & bank balances
2408.14 3618.69 1210.55 50.26
d. Loans & advances

Less : CURRENT LIABILITIES &

21177.14 17502.34 -3684.01 -45.67
PROVISIONS
3877.31 3438.62 438.69 11.31

Net current assets

17299.83 14063.71 -3236.12 -14.36
Miscellaneous Expenditures
830.22 1807.82 977.50 117.73

IV TOTAL 25832.22 31584.13 5751.91 100.30

INFERENCE:-

Here there is a decrease in net block of fixed assets by 19.72% an account of low
expansion by the company. It has been to maintain the effective asset management. The
company has invited it public deposits at competitive rates and there is an increase of Rs.
1.30 lacks in 2019-20 when compare to the previous year (2018-19). The cash and bank
balances has been decreased in the year 2019-20 Rs. 7166.83 lakhs. The current liabilities
have increased by 438.69% in the year 2019-20 and the investments percentage also
decreased by 84.47% the liquidity position has increased in low range.

51
 Table 4.2.3

COMPARETIVE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

2019- Increase /
S.No PARTICULARS 2018-19 Percentage
2020 Decrease

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 1001.52 1001.52 0.00 0.00

Reserves and surpluses 19820.25 20215.75 395.50 2.00

II LOAN FUNDS

Secured loans 8241.46 12988.09 4746.63 57.59

Un – secured loans 931.50 736.44 -195.06 20.94

III DEFFERED TAX LIABILITY 1589.39 1695.01 105.62 19.66

TOTAL 31584.13 36636.82 5052.69 100.00

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 10884.72 13103.44 2218.72 0.20

Less : Depreciation 3764.68 4379.20 614.52 16.32

Net block 7120.03 8724.23 1604.20 22.53

Add : Capital work in progress 8540.89 12043.96 3503.07 41.01

TOTAL 15660.93 20768.19 51072.26 32.61

II INVESTIMENTS 51.65 51.65 0.00 0.00

III CURRENT ASSETS, LOANS AND

52
 ADVANCES 6355.15 7192.64 837.49 13.17

e. Inventories 5191.41 4912.58 278.83 15.37

2337.08 2037.44 -299.64 -12.82

f. Sundry debtors
3618.69 2963.88 -654.81 -18.09
g. Cash & bank balances
17502.34 17106.56 -395.78 -2.26
h. Loans & advances
3438.62 3200.93 237.69 6.91

14063.71 13905.62 -158.09 -1.12

Less : CURRENT LIABILITIES &
PROVISIONS 1807.82 1911.34 103.52 13.72

Net current assets 31584.13 36636.82 5052.69 100.00

IV Miscellaneous Expenditures

TOTAL

INFERENCE:

Here there is an increase in net block of fixed assets by 22.53% an account of high
expansion by the company. It has been to improve the fixed asset utilisation. The company
has invited it public deposits at competitive rates and there is an increase of Rs. 1.30 lakhs in
2019-20 same as the previous year (2018-19). The cash and bank balance has been decreased
in the year 2019-20 .Rs. 299.64 lacks. The current liabilities have decreased by 158.09% in
the year 2019-20. And in the investments percentage there is no change in the 2019-2020
financial year.

53
 Table 4.2.4

COMPARETIVE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

2019- Increase /
S.No PARTICULARS 2018-19 Percentage
2020 Decrease

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 1001.52 1001.52 0.00 0.00

Reserves and surpluses 20215.75 20338.51 122.76 0.60

II LOAN FUNDS

Secured loans 12988.09 15595.27 2607.18 20.07

Un – secured loans 736.44 736.44 0.00 0.00

III DEFFERED TAX LIABILITY 1695.01 1695.01 0.00 0.00

TOTAL 36636.82 39366.75 2729.93 7.45

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 13103.44 26893.24 13789.80 105.23

Less : Depreciation 4379.20 5214.95 835.75 19.08

Net block 8724.23 21678.29 12954.05 86.15

Add : Capital work in progress 12043.96 3697.90 -8346.06 -69.29

TOTAL 20768.19 25376.20 4608.01 22.18

II INVESTIMENTS 51.65 51.65 0.00 0.00

III CURRENT ASSETS, LOANS AND

54
 ADVANCES 7192.64 7577.03 384.39 5.34

a. Inventories 4912.58 4831.61 -80.97 1.64

b. Sundry debtors 2037.44 524.89 -1512.55 -74.23

c. Cash & bank balances 2963.88 3637.26 673.38 22.71

d. Loans & advances 17106.56 16570.79 535.77 -3.13

3200.93 4160.48 959.55 29.97

Less : CURRENT LIABILITIES &
13905.62 12410.31 -1495.31 -10.75
PROVISIONS
1911.34 1528.58 -382.76 -20.02
Net current assets

Miscellaneous Expenditure

IV TOTAL 36636.82 39366.75 2729.93 7.45

INFERENCE:-

Here there is an increase in net block of fixed assets by 86.15% an account of high
expansion by the company. It has been to improve the fixed asset utilisation. The company
has invited it public deposits at competitive rates and there is an increase of Rs. 1.30 lakhs in
2019-20 same as the previous year (2018-2019). The cash and bank balances has been
decreased in the year 2019-20 Rs. 1512 lacks. The current liabilities have increased by
29.97% in the year 2019-20. And there is no change in investments, secured as well as
unsecured loans in the 2019-20 when compare to the previous financial year 2018-2019.

55
 Table 4.2.5 COMMON SIZE BALANCE SHEETS

COMMON SIZE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

S.No PARTICULARS 2018-19 Percentage 2019-2020 Percentage

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 410.00 3.06 1000.22 3.90

Reserves and surpluses 5115.52 38.23 17274.72 66.87

II LOAN FUNDS

Secured loans 5915.81 44.21 5522.52 21.37

Un – secured loans 625.00 4.67 694.63 2.68

III DEFFERED TAX LIABILITY 1275.37 9.53 1340.13 5.18

TOTAL 13378.71 100.00 25832.22 100.00

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 8357.45 62.46 8608.50 33.32

Less : Depreciation 2162.39 16.16 2575.57 9.97

Net block 6195.05 46.30 6032.92 23.35

Add : Capital work in progress 170.59 1.27 1336.50 5.17

TOTAL 6365.65 47.57 7369.42 28.52

II INVESTIMENTS 40.45 0.30 332.75 1.28

56
 III CURRENT ASSETS, LOANS AND
ADVANCES
2660.21 19.88 3937.73 15.24
e. Inventories
4516.97 33.79 5327.36 20.62
f. Sundry debtors
498.61 3.72 9503.91 36.81
g. Cash & bank balances
1798.43 13.44 2408.14 9.32
h. Loans & advances
9474.21 71.10 21177.14 83.26

3224.27 24.10 3877.31 15.00

Less : CURRENT LIABILITIES &
PROVISIONS
6249.95 47.00 17299.83 68.26
Net current assets
722.66 5.40 830.22 3.21
Miscellaneous Expenditures

IV
TOTAL 13378.71 100.00 25832.22 100.00

INFERENCE:-

Out of total assets majority of the funds have been invested in fixed assets 47.57%
and also noted that cash margin is very less with 3.72 % funds has been raised through long
and short term loans. It’s the shareholders fund that has slowly increased so the company
needs to reduce, the loan fund is need to raise the shareholders fund.

57
 Table 4.2.6

COMMONSIZE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

S.No PARTICULARS 2018-19 Percentage 2019-2020 Percentage

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 1000.22 3.90 1001.52 3.17

Reserves and surpluses 17274.72 66.87 19820.25 62.75

II LOAN FUNDS

Secured loans 5522.52 21.37 8241.46 26.09

Un – secured loans 694.63 2.68 931.50 2.94

III DEFFERED TAX LIABILITY 1340.13 5.18 1589.39 5.05

TOTAL 25832.22 100.00 31584.13 100.00

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 8608.50 33.32 10884.72 34.46

Less : Depreciation 2575.57 9.97 3764.68 11.91

Net block 6032.92 23.35 7120.03 22.25

Add : Capital work in progress 1336.50 5.17 8540.89 27.05

TOTAL 7369.42 28.52 15660.93 49.30

II INVESTIMENTS 332.75 1.28 51.65 0.16

58
 III CURRENT ASSETS, LOANS
AND ADVANCES
3937.73 15.24 6355.15 20.19
i. Inventories
5327.36 20.62 5191.41 16.46
j. Sundry debtors
9503.91 36.81 2337.08 7.60
k. Cash & bank balances
2408.14 9.32 3618.69 11.45
l. Loans & advances
21177.14 83.26 17502.34 55.86

3877.31 15.00 3438.62 10.88

Less : CURRENT LIABILITIES &
PROVISIONS 17299.83 68.26 14063.71 44.98

Net current assets 830.22 3.21 1807.82 5.72

IV Miscellaneous Expenditures

TOTAL 25832.22 100.00 31584.13 100

INFERENCE:-

Out of total assets majority of the funds have been invested in fixed assets 49.30%
and also noted that cash margin is increased compared to the previous year with 7.60% funds
has been raised through long and short term loans. It’s the shareholders fund that has slowly
increased so the company needs to reduce, the loan fund is need to raise the shareholders
fund.

59
 Table 4.2.7

COMMON SIZE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

S.No PARTICULARS 2018-2019 Percentage 2019-2020 Percentage

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 1001.52 3.17 1001.52 2.73

Reserves and surpluses 19820.25 62.75 20215.75 55.17

II LOAN FUNDS

Secured loans 8241.46 26.09 12988.09 35.45

Un – secured loans 931.50 2.94 736.44 2.03

III DEFFERED TAX LIABILITY 1589.39 5.05 1695.01 4.62

TOTAL 31584.13 100.00 36636.82 100.00

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 10884.72 34.46 13103.44 35.76

Less : Depreciation 3764.68 11.91 4379.20 11.95

Net block 7120.03 22.25 8724.23 23.81

Add : Capital work in progress 8540.89 27.05 12043.96 32.87

TOTAL 15660.93 49.30 20768.19 56.68

II INVESTIMENTS 51.65 0.16 51.65 0.14

III CURRENT ASSETS, LOANS

60
 AND ADVANCES 6355.15 20.19 7192.64 19.63

a. Inventories 5191.41 16.46 4912.58 13.40

b. Sundry debtors 2337.08 7.60 2037.44 5.56

c. Cash & bank balances 3618.69 11.45 2963.88 8.08

d. Loans & advances 17502.34 55.86 17106.56 46.81

3438.62 10.88 3200.93 8.73

Less : CURRENT LIABILITIES &
14063.71 44.98 13905.62 38.08
PROVISIONS
1807.82 5.72 1911.34 5.24
Net current assets
IV 31584.13 100 36636.82 100.00
Miscellaneous Expenditures

TOTAL

INFERENCE:-

Out of total assets majority of the funds have been invested in fixed assets 56.68%
and also noted that cash margin decreased to 5.56% compared to the previous year and funds
has been raised through long and short term loans. It’s the shareholders fund that has slowly
increased so the company needs to reduce, the loan fund is need to raise the shareholders
fund.

61
 Table 4.2.8

COMPARATIVE BALANCE SHEET FOR THE YEAR ENDED 2019-2020 (Rs. In lakhs)

S.No PARTICULARS 2018-19 Percentage 2019-2020 Percentage

SOURCES OF FUNDS

I SHARE HOLDERS FUNDS

Share capital 1001.52 2.73 1001.52 2.54

Reserves and surpluses 20215.75 55.17 20338.51 51.66

II LOAN FUNDS

Secured loans 12988.09 35.45 15595.27 39.61

Un – secured loans 736.44 2.03 736.44 1.89

III DEFFERED TAX LIABILITY 1695.01 4.62 1695.01 4.30

TOTAL 36636.82 100.00 39366.75 100.00

APPLICATION OF FUNDS

I FIXED ASSETS

Gross block 13103.44 35.76 26893.24 68.31

Less : Depreciation 4379.20 11.95 5214.95 13.24

Net block 8724.23 23.81 21678.29 55.07

Add : Capital work in progress 12043.96 32.87 3697.90 9.40

TOTAL 20768.19 56.68 25376.20 64.47

II INVESTIMENTS 51.65 0.14 51.65 0.13

62
 III CURRENT ASSETS, LOANS
AND ADVANCES
7192.64 19.63 7577.03 19.24
e. Inventories
4912.58 13.40 4831.61 12.27
f. Sundry debtors
2037.44 5.56 524.89 1.34
g. Cash & bank balances
2963.88 8.08 3637.26 9.23
h. Loans & advances
17106.56 46.81 16570.79 42.21

3200.93 8.73 4160.48 10.56

Less : CURRENT LIABILITIES &
PROVISIONS

13905.62 38.08 12410.31 31.65

Net current assets 1911.34 5.24 1528.58 3.88

Miscellaneous Expenditures

IV TOTAL 36636.82 100.00 39366.75 100.00

INFERENCE:-

Out of total assets majority of the funds have been invested in fixed assets 64.47%
and also noted that cash margin decreased to1.34% compared to the previous year and funds
has been raised through long and short term loans. It’s the shareholders fund that has slowly
increased so the company needs to reduce, the loan fund is need to raise the shareholders
fund.

63
 Table 4.2.9

COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020

(Rs. In lakhs)

PARTICULARS 2018-19 2019-2020 Increase / Percentage

decrease

INCOME
43.27
Gross Sales 18,487.34 12,903.20 5584.14
95.02
Less: Excise Duty 1,172.93 601.43 571.50
17,314.41 12,301.77 5012.64 40.74
Net of Excise Duty 293.53 43.10 250.43 58.10
Other Income 952.40 401.36 551.04 137.23
Increase/(Decrease ) in Stocks
4
TOTAL : (A) 18,560.33 12,746.22 5841.11 5.61

EXPENDITURE 46.
Raw materials consumed 10,807.07 7,371.23 3435.84 61
Manufacturing expenses 1,330.72 1,157.01 173.71 15.04
Personnel expenses 489.94 439.11 50.83 11.57
Admin. & selling expenses 1,158.42 1,093.84 64.58 0.88
Financial charges 712.99 663.95 5.90 5.29
Depreciation 416.71 440.01 -23.30
39.09
Misc. expenditure written off 377.38 271.32 106.06
33
TOTAL : (B) 15,293.23 11,436.47 3856.76 .72

149.
Profit before tax (A) – (B) 3,267.10 1,309.75 1957.35 44
Provision for :

64
 Income tax 1,100.00 450.00 650.00 144.45
FBT 5.50 4.55 0.95 20.87
Deferred tax 64.76 4.44 60.32 135.85

146
Profit after tax 2,096.8 850.76 1246.08 .46
4
52.8
0
Balance in profit and loss A/C 1,055.28 557.26
brought forward 1,612.54
Profit available for proportions 3,709.38 1,906.04 1803.94 94.64
Less : APPROPRIATIONS 200.04 82.00 118.04
143.95
Proposed dividend 34.00 11.50 22.50
195.60
Dividend distribution tax 300.00 200.00 100.00
50.00
Transfer to general reserve

Balance carried to balance sheet 3,175.34 1,612.54 1562.80 100.00

INFERENCE :-

The comparative income statement is the statement which relates to the profit and
loss a/c for the current year and previous year here the current year is 2019-20 and the previous
year is 2018-19 The above statement shows the changes in incomes and expenditures for the
2019-20 financial year. It indicates that the net profit increased by 94.64% in 2019-20 compare
to 2018-19. Operating profit percentage has increased and equal to the operating expenses. The
net profit is increased by 94.64% in 2019-20.

Table 4.2.10

65
 COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020

2019-2020
2018-2019 Increase /
PARTICULARS (Rs.in Percentage
(Rs.in lakhs) decrease
lakhs)

I INCOME
18,487.34 28.42
Gross Sales 23742.85 5255.51
1,172.93 130.27
Less: Excise Duty 2702.18 1529.25
21040.67 17,314.41 3726.26 21.52
Net of Excise Duty 505.46 293.53 211.93 72.20
Other Income 932.97 952.40 -19.43 -2.04
Increase/(Decrease ) in Stocks
2
TOTAL : (A) 22479.10 18,560.33 3918.77 1.11

II EXPENDITURE 31.
Raw materials consumed 14240.37 10,807.07 3433.30 76
Manufacturing expenses 1479.13 1,330.72 148.41 11.15
Personnel expenses 799.02 489.94 309.08 63.08
Admin. & other expenses 381.85 1,158.42 776.57 -67.03
Selling expenses 480.96 447.88 33.08 7.38
Financial charges 686.54 712.99 -26.45 -3.70
Depreciation 517.95 416.71 101.24 24.29
Misc. expenditure written off 655.98 377.38 278.60 73.82

2
TOTAL : (B) 19241.83 15,293.23 3948.60 0.81

III PROFIT
Profit before tax (A) – (B) 3237.26 3,267.10 -29.84 -0.91
Provision for taxation 521.21 1170.26 -649.05 -55.46
Profit after tax 2716.05 2096.84 619.21 29.53
profit brought forward 3175.33 1,612.54 1562.79 96.91

66
 Profit available for 5891.39 3709.38 2182.01 58.82
appropriations 0.12
IV APPROPRIATIONS 200.30 200.04 0.26 0.14
Proposed dividend 34.04 33.99 0.05 123.34
Dividend distribution tax 4000.00 300.00 3700.00 47.81
Transfer to general reserve 1657.04 3175.33 -1518.29
Profit carried to balance sheet
58.
TOTAL (C) 5891.39 3,709.38 2182.01 82

TOTAL (A)+(B)+(C) 47612.32 37562.94 10049.38 100.74

INFERENCE:-

The above statement shows the changes in incomes and expenditures for the 2019-20
financial year. It indicates that the net profit increased by 96.91% in 2019-2020 compare to
2018-19. Operating profit percentage has increased and equal to the operating expenses. The
net profit increased by 96.91% in 2019-2020.

Table 4.2.11
COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020

67
 (Rs.in lakhs)
Increase /
PARTICULARS 2018-2019 2019-2020 Percentage
decrease

I INCOME
15.43
Gross Sales 27406.94 23742.85 3664.09
Less: Excise Duty 2928.27 2702.18 226.09 8.36

24478.67 21040.67 3438.00 16.33

Net of Excise Duty
40.52 505.46 -464.94
Other Income -91.98
407.49 932.97 -524.88
Increase/(Decrease ) in Stocks
-56.25

10
TOTAL : (A) 24926.69 22479.10 2447.59 .88

II EXPENDITURE 27.2
Raw materials consumed 18127.97 14240.37 3887.60 9
Manufacturing expenses 1467.20 1479.13 -11.93 -0.80
Personnel expenses 1013.03 799.02 214.01
26.78
Admin. & other expenses 602.98 381.85 221.13
57.91
Selling expenses 577.66 484.96 92.70
19.11
Financial charges 959.04 686.54 272.50
39.69
Depreciation 627.91 517.95 109.96
Misc. expenditure written off 756.30 655.98 100.32 21.22

15.29

25.
TOTAL : (B) 24132.12 19241.83 4890.29 41

III PROFIT
Profit before tax (A) – (B) 794.56 3237.26 -2442.70 -75.45
Income tax for current year 90.00 380.00 -290.00 -76.31
For earlier years 38.90 79.47 -40.57 -51.05
F.B.T 8.00 7.07 0.93 00.13
93.21

68
 Deferred tax 105.61 54.66 50.95 -76.81
-47.81
Profit after tax 629.85 2716.05 -2086.20 -61.18
profit brought forward 1657.04 3175.33 -1518.29
Profit available for 2286.90 5891.39 -3604.49
appropriations 0.00
IV APPROPRIATIONS
0.00
Proposed dividend 200.30 200.30 0.00
Dividend distribution tax 34.04 34.04 0.00 -97.50
Transfer to general 100.00 4000.00 -3900.00 17.83
reserve 1952.55 1657.04 295.51
Profit carried to balance sheet

TOTAL (C) 2286.90 5891.39 -3604.49 61.20

TOTAL (A)+(B)+(C) 51345.71 47612.32 3733.39 100.00

INFERENCE:-

The above statement shows the changes in incomes and expenditures for the 2019-2020
financial year. It indicates that the net profit decreased by 61.18% in 2019-2020 compare to
2018-2019. Operating profit percentage has increased and equal to the operating expenses.

Table 4.2.12

69
 COMPARETIVE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020
2018-19 2019-
Increase /
PARTICULARS (Rs.in 2020 (Rs. Percentage
decrease
lakhs) in lakhs)

I INCOME
-12.88
Gross Sales 23876.77 27406.94 -3530.17
-35.07
Less: Excise Duty 1901.26 2928.27 -1027.01
21975.50 24478.67 -2503.17 -10.11
Net of Excise Duty 243.61 40.52 203.09 50.12
Other Income 509.38 407.49 101.89 0.46
Increase/(Decrease ) in Stocks

TOTAL : (A) 22728.50 24926.69 -2198.19 -8.81

II EXPENDITURE
Raw materials consumed 15527.45 18127.97 2600.52 -14.34
Manufacturing expenses 1902.93 1467.20 435.73 29.69
Personnel expenses 992.79 1013.03 -20.24 -1.99
Admin. & other expenses 430.32 602.98 -172.66 -28.63
Selling expenses 634.08 577.66 56.42 9.76
Financial charges 1355.85 959.04 396.81 47.37
Depreciation 836.47 627.91 208.56 33.21
Misc expenditure written off 760.49 756.30 4.19 0.55

TOTAL : (B) 22440.41 24132.12 -1691.71 -7.01

III PROFIT
Profit before tax (A) – (B) 288.08 794.56 -506.48 -63.74
Less : prov. Income tax for current 50.00 90.00 -40.00 -44.45
year 1.45 38.90 -37.45 -96.27
Excess IT provision - 8.00 -8.00 00.00

70
 written back - 105.61 -105.61
F.B.T 48.54 164.71 -116.17 -70.53
Deferred tax
61
239.53 629.85 -390.32 .97
Provision for taxation
1952.55 1657.04 295.51 0.17
2192.09 2286.90 -94.81 -4.14

Profit after tax

profit brought forward
-0.64
Profit available for appropriations
100.00 200.30 -1.30 -51.14
IV APPROPRIATIONS
16.63 34.04 -17.41 0.00
Proposed dividend
100.00 100.00 0.00 1.16
Dividend distribution tax
1975.30 1952.55 22.75
Transfer to general reserve
Profit carried to balance sheet

TOTAL (C) 2192.09 2286.90 -94.81 -4.14

TOTAL (A)+(B)+(C) 47361.00 51345.71 3733.39 100.00

INFERENCE:-

The comparative income statement is the statement which relates to the profit and loss
a/c for the current year and previous year here the current year is 2019-20 and the previous
year is 2018-2019.The above statement shows the changes in incomes and expenditures for
the 2019-20 financial year. It indicates that the net profit increased by 94.64% in 2019-20
compare to 2018-2019. Operating profit percentage has increased and equal to the operating
expenses.

71
 Table 4.2.13

COMMON SIZE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020

PARTICULARS 2018-19 % 2019-2020 %

INCOME
18,487.34 12,903.20 104.90
Gross Sales 109.67
1,172.93 601.43 4.89
Less: Excise Duty 6.95
17,314.41 102.72 12,301.77 100.01
Net of Excise Duty 293.53 1.74 43.10 0.35
Other Income 952.40 5.64 401.36 3.26
Increase/(Decrease ) in Stocks
1
TOTAL : (A) 18,560.33 110.10 12,746.22 03.61

EXPENDITURE 59.92
Raw materials consumed 10,807.07 64.11 7,371.23 9.40
Manufacturing expenses 1,330.72 7.89 1,157.01 0.03
Personnel expenses 489.94 2.90 439.11 8.98
Admin. & selling expenses 1,158.42 6.87 1,093.84 5.39
Financial charges 712.99 4.22 663.95 3.57
Depreciation 416.71 2.47 440.01 2.20
Misc. expenditure written off 377.38 2.23 271.32

TOTAL : (B) 15,293.23 90.70 11,436.47 90.00

1
Profit before tax (A) – (B) 3,267.10 19.40 1,309.75 1.61
Less : Provision for : 3.65
Income tax 1,100.00 6.52 450.00 0.04
FBT 5.50 0.03 4.55 0.03

72
 Deferred tax 64.76 0.38 4.44

Profit after tax 2,096.8 12.47 850.76 7.90

4

8.57
Balance in profit and loss A/C 9.56 1,055.28
brought forward 1,612.54
1
Profit available for proportions 3,709.38 22.03 1,906.04 6.47
Less : APPROPRIATIONS 0.67
Proposed dividend 200.04 1.18 82.00 0.09
Dividend distribution tax 34.00 0.20 11.50 1.62
Transfer to general reserve 300.00 1.77 200.00

TOTAL (C) Balance carried to 3,175.34 18.88 1,612.54 14.09

balance sheet
1
TOTAL (A) = (B) + (C) 18560.57 110.10 13049.01 03.09

Individual Value
Common size percentage = × 100
Net Sales

INFERENCE:-

The above statement indicates that net profit slightly increased in the year
2019-20 because the cost of goods sold increased in this year. And the expenditure
percentage is same for the both years as 90%.

73
 Table 4.2.14

COMMONSIZE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020

(Rs.in lakhs)

PARTICULARS 2018-19 % 2019-2020 %

I INCOME
18,487.34
Gross Sales 23742.85 112.84 109.67
1,172.93
Less: Excise Duty 2702.18 12.84 6.95
Net of Excise Duty 21040.67 100.00 17,314.41 102.72
Other Income 505.46 2.40 293.53 1.74
Increase/(Decrease ) in Stocks 932.97 4.43 952.40 5.64

TOTAL : (A) 22479.10 106.83 18,560.33 110.10

II EXPENDITURE
Raw materials consumed 14240.37 67.68 10,807.07 62.11
Manufacturing expenses 1479.13 7.02 1,330.72 7.89
Personnel expenses 799.02 3.79 489.94 2.90
Admin. & other expenses 381.85 1.81 1,158.42 6.87
Selling expenses 480.96 2.28 447.88 2.65
Financial charges 686.54 3.26 712.99 4.22
Depreciation 517.95 2.46 416.71 2.47
Misc expenditure written off 655.98 3.11 377.38 2.23

TOTAL : (B) 19241.83 91.45 15,293.23 91.34

III PROFIT
Profit before tax (A) – (B) 3237.26 15.38 3,267.10 19.40
Less : Provision for taxation 521.21 2.47 1170.26 6.94

74
 Profit after tax 2716.05 12.91 2096.84 12.46
profit brought forward 3175.33 15.09 1,612.54 9.56

Profit available for appropriations 5891.39 28.00 3709.38 22.02

IV APPROPRIATIONS
Proposed dividend 200.30 0.95 200.04 1.18
Dividend distribution tax 34.04 0.16 33.99 0.20
Transfer to general reserve 4000.00 19.01 300.00 1.78

TOTAL (C) Profit carried to 1657.04 7.87 3175.33 18.83

balance sheet
TOTAL =(B)+(C)= (A) 22898.87 100.00 18468.56 110.17

INFERENCE:-

The above statement indicates that net profit slightly increased in the year 2019-2020
because the cost of goods sold increased in this year. And the expenditure percentage is same
for the both years as 91.34%.

(Net sales: 2019-2020 = 21040.67;2018-19 = 16856.65)

75
 Table 4.2.15

COMMONSIZE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020

(Rs.in lakhs)

PARTICULARS 2018-2019 Percentage 2019-2020 %

I INCOME
Gross Sales 27406.94 111.96 23742.85 112.84
Less: Excise Duty 2928.27 11.96 2702.18 12.84
Net of Excise Duty 24478.67 100 21040.67 100.00
Other Income 40.52 0.16 505.46 2.40
Increase/(Decrease ) in Stocks 407.49 1.66 932.97 4.43

TOTAL : (A) 24926.69 101.83 22479.10 106.83

II EXPENDITURE
Raw materials consumed 18127.97 70.05 14240.37 69.68
Manufacturing expenses 1467.20 4.99 1479.13 7.02
Personnel expenses 1013.03 4.13 799.02 5.79
Admin. & other expenses 602.98 2.46 381.85 1.81
Selling expenses 577.66 2.35 484.96 2.28
Financial charges 959.04 3.91 686.54 3.26
Depreciation 627.91 2.56 517.95 2.46
Misc expenditure written off 756.30 3.08 655.98 3.11

TOTAL : (B) 24132.12 93.58 19241.83 94.45

III PROFIT
Profit before tax (A) – (B) 794.56 3.24 3237.26 15.38
Less : Income tax for current year 90.00 0.36 380.00 1.80
For earlier years 38.90 0.15 79.47 0.38
F.B.T 8.00 0.03 7.07 0.33
Deferred tax 105.61 0.43 54.66 0.26

76
 Profit after tax 629.85 2.57 2716.05 12.90
profit brought forward 1657.04 6.76 3175.33 15.09

2286.90 9.34 5891.39 28.00

Profit available for appropriations
IV APPROPRIATIONS 200.30 0.81 200.30 0.95
Proposed dividend 34.04 0.13 34.04 0.16
Dividend distribution tax 100.00 0.40 4000.00 19.01
Transfer to general reserve

TOTAL (C) Profit carried to 1952.55 7.97 1657.04 7.87

balance sheet
TOTAL =(B)+(C)=(A) 26084.67 101.55 20898.87 102.32

INFERENCE:-

The above statement indicates that net profit slightly increased in the year 2019-2020
because the cost of goods sold increased in this year. And the expenditure percentage is same
for the both years as 94.45%.

(Net sales: 2019-2020 = 24478; 2018-2019 = 21040.67)

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 Table 4.2.16

COMMONSIZE INCOME STATEMENT FOR THE YEAR ENDED 2019-2020

(Rs .In lakhs)

PARTICULARS 2018-19 Percentage 2019-2020 Percentage

I INCOME
Gross Sales 23876.77 108.65 27406.94 111.96
Less: Excise Duty 1901.26 8.65 2928.27 11.96
Net of Excise Duty 21975.50 99.99 24478.67 100
Other Income 243.61 1.10 40.52 0.16
Increase/(Decrease ) in Stocks 509.38 2.31 407.49 1.66

TOTAL : (A) 22728.50 103.42 24926.69 101.83

II EXPENDITURE
Raw materials consumed 15527.45 80.65 18127.97 70.05
Manufacturing expenses 1902.93 6.65 1467.20 4.99
Personnel expenses 992.79 4.51 1013.03 4.13
Admin. & other expenses 430.32 1.95 602.98 2.46
Selling expenses 634.08 2.88 577.66 2.35
Financial charges 1355.85 4.16 959.04 3.91
Depreciation 836.47 3.80 627.91 2.56
Misc expenditure written off 760.49 0.46 756.30 3.08

TOTAL : (B) 22440.41 100.11 24132.12 93.58

III PROFIT
Profit before tax (A) – (B) 288.08 1.31 794.56 3.24
Less : prov. Income tax for current year 50.00 0.22 90.00 0.36
Excess IT provision written back 1.45 6.59 38.90 0.15
F.B.T - 8.00 0.03
Deferred tax - 105.61 0.43

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 Provision for taxation 48.54 0.22 164.71 0.67

Profit after tax 239.53 1.08 629.85 2.57

profit brought forward 1952.55 8.88 1657.04 6.76

Profit available for appropriations 2192.09 9.97 2286.90 9.34

IV APPROPRIATIONS
Proposed dividend 100.00 0.45 200.30 0.81

Dividend distribution tax 16.63 0.07 34.04 0.13

Transfer to general reserve 100.00 0.45 100.00 0.40

TOTAL (C) Profit carried to balance 1975.30 8.98 1952.55 7.97

sheet
TOTAL =(B)+(C) = (A)% 24415.71 108.32 26084.67 101.15

INFERENCE:-

The above statement indicates that net profit slightly decreased in the year 2019-20
because the cost of goods sold decreased in this year. And the expenditure percentage is same
for the both years as 93.58%.

(Net sales: 2019-20 = 21975.50 2019-2020 = 24478 )

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 CHAPTER-V

CONCLUSIONS

5.1 FINDINGS

 The gross profit ratio increased in the last two years (2018-2019 to 2019-2020) from
20.36% to 24.18% respectively. It explains the relationship between the gross profit
and the net sales.

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 Net profit ratio of last two years (2018-2020) is decreasing. Even though it has
increased in 2015-2018. It indicates inefficiency of the business and the return on
shareholder’s investment is very low.

 The operating ratio in the year 2018-2019 and 2019-2020 is 92.50% and 91.34%
respectively. From the year 2015-16 to 2018-2019 the operating cost ratio increased
for the four years but the last year 2019-2020 decreased to 91.34%.

 Operating profit ratio in the year 2015-16 and 2016-2017 is 21.23% and 76.44%
respectively but the next financial years 2017-18 to 2019-2020 decreasing in the ratio
percentage as shown in the table

 The return on shareholder`s fund shows the gradual decrease in last 3 financial years
from 2017-2018 to 2019-2020, but there is gradual growth in the two financial years
from 2015-16 and 2016-17 as 4.8% to 31.05%.

 The return on total assets ratio is decreasing in the last two years (2018-2019 & 2019-
2020) it indicates the company`s inadequate to use total assets or resources.

 The earnings per ratio is continuously increasing in the financial year 2015-16 to
2016-17, but the ratio is continuously decrease in the last 3 years 2017-2018 to 2019-
2020 as 27.15%, 6.29%, and 2.39% respectively. It indicates the earnings payable to
shareholder`s is effective due to interest on loan.

 The price earnings ratio reflected by the market price. The market price of the share
increased year by year. The ratio of the financial year 2015-16 is 0.01 % and then the
next further years from 2016-18 to 2019-2020 as 0.33%, 0.36%, 1.58%, and 4.18%
respectively.

 The retainer earnings ratio is continuously decreasing in the first three financial year’s
2015-16 to 2017-2018 as 1.89%, 1.51%, and 0.61% respectively. But the ratio
increased in the last two years from 2018-19 to 2019-2020 as 3.10% and 8.24%.

 The dividend payout ratio also indirectly throws light on the financial policy of the
management plugging back. The payout ratio is continuously decreasing up to 2015-
16 to 2017-18 financial year. But it has been increased from the year 2018-19 and
2019-2020 as 31.80%, 41.81% respectively. It indicates the dividend payable
condition is good in the first three years.

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 Dividend yield ratio indicates the rate of return to shareholders in the firm dividends
based on the market price of the share. Even though the ratio is continuously
increasing in the financial year 2015-16 to 2018-2019. But it has been decreased in
the financial year 2019-2020 to 0.55%. It indicates the rate of return to the
shareholder’s dividend condition better in the last two financial years.

 The return on shareholder`s fund shows the gradual decrease in last 3 financial years
from 2017-2018 to 2019-2020, but there is gradual growth in the two financial years
from 2015-16 and 2016-17 as 4.8% to 31.05%. it indicates that the interest paid at
higher rate and the retain earnings has reduced considerably resulting in redemption in
return on shareholder fund by the firm have affected the return on investment in the
last three years.

 The inventory system should be maintained properly it is important. The stock

turnover ratio is continuously decreasing over all the five years as 8.36%, 7.85%,
5.38%, 5.36%, and the last year is 4.36% respectively. This decreasing indicates the
effective management of inventory control.

 The working capital ratio during the 2016-17 financial year the ratio increased as
44.34% it is the highest position when compare with the remaining financial years.

 The fixed assets turnover ratio is gradually increased up to 2015-16 to 2017-18

financial year as 1.98%, 2.80%, and 2.95% respectively. But the last two financial
year’s performance is in a decreasing position of this ratio. This indicates the effective
asset management of the organization.

 The capital turnover ratio is the one of the important ratio to analyze the capital
adequacy of the company. This ratio shows the relationship between the sales and the
capital employed in the company. The ratio has been increased in the first two years
from 0.70% to 2.50%. But the last three years there was normal changes in the ratio.

 The current ratio decreased in the first two years (2015-16 &2016-17) and the next
two financial years (2017-18 &2018-19) is increased. But the last financial year the
ratio value is 0.31 again it was decreased. It shows the fluctuation in the current assets
and the current liabilities.

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 The liquidity ratio has been increased in the year 2016-17 as 4.25. After that there was
a gradual decrease from 2017-18 to 2019-2020.

 Comparative balance sheet shows that there is a fluctuation in fixed assets. It shows a
continuous increasing trend in case of both current assets and current liabilities which
results in the improvement of the liquidity position.

 It has found that common size balance sheet the percentage current assets to total
assets were increasing from 2015 to 2020. Thus the percentage proportion of current
assets increased by a higher percentage as compared to lesser decrease in the
proportion of the current liabilities. This will improve the working capital of the
company.

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 SUGGESTIONS

5.2 SUGGESTIONS AND RECOMMENDATIONS

84
1) The current asset position is good in the company but the percentage increase of current
assets is very low. Therefore the company can take necessary steps to control this situation.

2) Current liabilities are increasing gradually in all years the company can have a control over
the liability.

3) Due to increase in the operating expenses the net loss is also increasing (i.e...) the company
have to take necessary steps to limit the net loss.

4) Utilization of cash can be perfect and monitories.

5) Proper planning is necessary to maintain profitability and liquidity position of the

company.

6) Since there is a disproportionate increase in operating expenses.

7) Company should focus on liquidity position, in order to do that the company has to
improve the creditor turnover and short term solvency position.

8) Effective utilisation of fixed assets is needed.

9) The management should take necessary steps regarding efficient management of

inventory.

10) The company must adopt new tools and technologies to increase the sales there by it can
increase the profitability of the firm.

85
LIMITATIONS

86
5.3 LIMITATIONS OF THE STUDY

 Financial statements are analysis of report they are not final because that exact

financial position can be known only when the business in closed.

 Time available for the study is short only limited information is collected and

analyzed.

 Some data are concealed, as they are confidential.

 There are many financial tools to analyze the company, so we cannot come to

conclusion by any certain financial tool only.

 Time is constant because duration of project is too short

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CONCLUSION

88
5.4 CONCLUSION

This study shows that the financial conditions and company performance of

Accenture is satisfactory. The sales increased year by year along with this the cost of goods

sold also increased. The working capital shows on increase in the current asset for the year

2015-16 to 2016-17 but decrease in the last three financial years (i.e.) 2017-18,2018-19 and

2019-2020. Therefore it can be concluded that the financial conditions and company

performance of the organisation is comparatively doing well, but for the last two financial

years, the growth is low.

The recommendations and suggestions given, if adopt will improve the position

of the company. Substantially and optimal profitability coupled with better service and

satisfactory for customer may be achieved.

89
BIBLIOGRAPHY

90
BIBLIOGRAPHY

1. C.R. KOTHARI., RESEARCH METHODOLOGY, Methods and Techniques, second

edition, new age international publishers.
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edition, Tata McGraw hill publishing company ltd.
3. P.Y.KULKARNI, B.G.SATHYA PRASAD, FINANCIAL MANAGEMENT, Fourth
edition, Himalaya publishers.
4. R.S.N.PILLAI, BHAGAVATHI, MANAGEMENT ACCOUNTING, S.Chand
publications.
5. T.S.REDDY, Y.HARI PRASAD REDDY, FINANCIAL AND MANAGEMENT
ACCOUNTING, Second edition 2002, Margham publications.
6. John J. Murphy, Study Guide to Technical Analysis of the Financial Markets
(New York Institute of Finance S) 
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04Xpg03.html#income-statement-single-step
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gross_profit_margin.asp#axzz1ukMcMM9q

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19.http://www.investopedia.com/terms/o/operatingmargin.asp

Reference websites

1). Corporate financial statements analysis.

2). Financial statements and problem solving analysis.

3). https://www.accenture.com/in-en

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