56802507 YUVA Main Project MBA

7/30/2019 56802507 YUVA Main Project MBA

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CHAPTER-I ABSTRACT

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ABSTRACT

Financial performance study is to analysis about overall financial activities ofthe Company. Finance plays a key role in a companys success, gives accurate andreliable

Information on financial parameters and helps for the decision making process ofthe Corporate management.

The required datas are collected from finance department. It is divided ion to two Categories, which are primary data and secondary data. Primary data is collected from Finance department by querying them. Secondary data already exists data,like company Balance sheet and other finance documents.

The major objectives of this project is to analysis the financial position of the Company, identify the problem and provide suggestion for the improvement, a Comparative study of the company balance sheet and sales & profit trends of the Company.

Different methods are used to analysis financial performance of the company, Such as comparative financial statement, common-size statements, trend analysis, and ratio analysis.

Financial statement may not be realistic since they are prepared by following Ce

rtain basic concepts and conventions. Financial disclose only monetary facts. Those Transactions, which cannot be measured by monetary terms, are not reflectedin these Statements. A highly efficient concern may conceal its real profitability by disclosing loss Or minimum profit whereas an inefficient concern may declare dividend by wrongly Showing profit in the books.

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CHAPTER-II INTRODUCTION

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CHAPTER- II 1.1 Introduction

Financial performance study is to analysis about overall financial activities orthe Company.

Any successful organization needs information both internally and externally. Accurate And reliable information form the foundation for good decision-making. Finance plays a key role. In a companys success. This is the moving force within the organization. Accurate and reliable Information on financial parameters speedsup the decision making process of the corporate Management.

Financial performance analysis is prepared for the purpose of presenting a periodical Review and deal with the state of investment in business and result achieved during the period under review. They reflect a combination of recorded facts.Financial statements are prepared at the end of accounting period so that various parties may take decisions of their future actions in Respect of the relationship with the business.

1.2 Importance

Financial statements provide information to owners regarding the funds investedin the Business. Bankers and other lenders of money want to know the financial position of a concern before giving loans. Prospective investors who want to invest money in the firm would like to make an analysis of the financial statements

of that firm to know how safe proposed investment would be.

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The financial statements being a mirror of the financial position of the firms are of immense value to the research scholar who wants to make a study into financial operations of a Particular firm.

1.3 Analysis and Interpretation of Financial Statement

Analysis and interpretation of financial statements, therefore, refers to such atreatment of the information contained in the income statement and the balancesheet so as to afford full Diagnosis of the profitability and financial soundness of the business.

A distinction here can be made between the two terms Analysis and Interpretation. The Term analysis means methodical classification of the data given in the financial statement. The Figures given in the financial statements will not help one unless they are put in a simplified Form. For example, all items relating to current assets are put at one place while all items relating To current liabilities are put at another place. The term Interpretation means explaining the Meaning and significance of the data so simplified.

Both analysis and interpretation are complementary to each other interpretationrequires Analysis, while analysis is useless without interpretation. Most of theauthors have used the term Analysis only to cover the meanings of both analysisand interpretation, since analysis involves Interpretation. 1.4 TYPES OF FINANCIAL ANALYSIS

a) According to Nature

(i) External analysis 5


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Those who are outsiders for the business do this analysis. The term outsiders include Investors, credit agencies, government agencies and other creditors who have no access to the Internal records of the company. These persons mainly dependupon the published financial Statements. Their analysis serves only a limited purpose. The position of these analysts has Improved in recent times on account of increase governmental control over companies and Governmental regulations requiring more detailed disclosure of information by the companies in Their financial statements.

(ii) Internal analysis

This analysis is done by persons who have access to the books of account and other Information related to the business. Executives and employees of the organization or by officers Appointed for this purpose by the government or the court under powers vested in them can Therefore, do such analysis. This analysis is donedepending upon the objective to be achieved Through this analysis.

(b) According to Objectives (i) Long-term analysis

This analysis is made in order to study the long term financial stability, solvency and Liquidity as well as profitability and earning capacity of a business concern. The purpose of Making such type of analysis is to know whether in the long run the concern will be able to earn A minimum amount which will be sufficientto maintain a reasonable rate of return on the 6


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Investment so as to provide the funds required for growth and development of business and to Meet its cost of capital.

(ii) Short-term analysis

This is made to determine the short-term solvency stability and liquidity as well as Earning capacity of the business. The purpose of the analysis is to know whether in the short run A business concern will have adequate funds really available to meet its short-term requirements And sufficient borrowing capacity to meet contingencies in the near future.

( c ) According to Mode

(i) Horizontal analysis

This analysis is made to review and analyze financial statements of a number ofyears And therefore based on financial date taken from several years. This is very useful for long-term Trend analysis. (ii) Vertical analysis

This analysis is made to review and analyze the financial statements of one particular Year only. Ratio analysis of the financial year relating to a particularaccounting year is an Example of this type of analysis.

1.5 Tools of Financial Performance Analysis

Comparative Financial Statements 7


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Common Size Statements Trend Analysis Ratio Analysis

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1.6 OBJECTIVES

Primay Objectives

To analyze the financial performance of the company through the relevant financial ratios & other method.

To study the financial position of the company.

Secondary Objectives

To have a comparative study of the company balance sheet and profit & loss account Between various years.

To find the liquidity position of the company.

To find profitability position of the company and analysis of sales.

To identify the problem and provide suggestion for the improvement.

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1.7 DATA COLLECTION

The datas are obtained from the two methods

1. Primary data 2. Secondary data

Primary data

Primary data comprises information obtained by during discussions with the officials.

Secondary data

The secondary data comprises of information obtained from annual reports, balance sheet And other financial statements, files and some other documents maintained by Organization. In the study maximum part of the data obtained is from secondary data i.e., the annual Reports etc and the rest is form primary data.

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1.8 LIMITATIONS

The study covers only a period of three years.

The study is based only on secondary data.

There may be basis in the published data. But this deficiency could be over comeby the Adoption of scientific evaluator methods.

The study will be only a provisional one based on the data collected from the report and Accounts during the period and its subject to refinement.

The economic and government policies etc. may affect the industry after the study, which Is not taken into consideration.

The studies on ratios of the company are not compared with some benchmark ratios(industry averages) due to lack of the information regarding it.

Due to lack of constraints in time and source of information approach has not been Fulfilled successfully.

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CHAPTER-III INDUSTRY PROFILE

Chapter-3.I.NDUSTRY PROFILE12


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The first manufacturing unit set up by our founders, in Chennai, Tamilnadu, in 1963, to produce various grades of Ultramarine Blue for Laundry as well as Industrial purposes, in partnership with Bayer AG. Today it is one of the largest Pigment and Surfactant manufacturing companies in the world servicing prominent Polymer, Personal Care, Specialties, and Cosmetic companies worldwide.

Lapiz Divisions set up by Ultramarine & Pigments Limited in 1999 offers BusinessProcess Outsourcing facility for US and UK markets. TCL, with its extensive experience for over three decades in applied research, laboratory-scale synthesis,and development of effective manufacturing process, set up TCL Research in 2005.

TCL Research offers research services to Pharma, Cosmetic and Intermediates Companies in Europe and the USA, in Custom Synthesis, Product Development, Process Development, Scaleup and small volume manufacturing.

Since 1982, TCL operates a large, multi-product Liquid Storage Terminal at Chennai Port, to receive petrochemicals directly from ships at 3 Berths, store and load the material into railway tankers to transport it to the final destination. It is rated among one of the best operated petrochemical terminals in India.

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CHAPTER-IVCOMPANY PROFILE

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COMPANY PROFILE

Ultramarine & Pigments Ltd., endeavor to serve the customers with range of pigments and surfactants and in the process, be the most preferred supplier. To achieve this, we constantly study and understand the needs and expectations of our customers by offering quality products and services with an uncompromising sense of responsibility and a firm commitment to the society.

Ultramarine & Pigments Ltd is one of the largest Pigment and Surfactant manufacturing company of Indian origin, having two factories in South India. It specializes in the manufacture of Inorganic Pigments and Organic Surfactants with international Quality standard. Today the company produces diverse range of products.ULTRAMARINE BLUE is a very safe, non-hazardous blue pigment with a variety of applications worldwide. Its synthetic manufacturing process and possibility for close control over its physical, chemical, and colour characteristics enable the production of several types of this blue pigment, which are readily accepted by plastic, printing ink, paint, cosmetic and many other industries due to advantages over other organic pigments and dyes. Besides, Ultramarine blue is an environment friendly pigment available to the industry today. LINEAR ALKYL BENZENE SULPHONIC ACID LINEAR ALKYL BENZENE SULPHONIC ACID (LABSA) is produced in the most sophisticated "Falling Film Reactor", with Italian technology. The process is automated fully with most modern computer aided process equipment to produce high quality products with consistency. LABSA is an anionic surfactant widely used in the formulations of all ranges of domestic detergents and dishwash liquids. It is

specially suited for the manufacture of all types of detergent

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powders and cakes. Due to its high active matter, quick miscibility with water and low salt content, it easily finds its way in to variety of liquid formulations. QUALITY ASSURANCE

Ultramarine & Pigments Ltd., is equipped with an excellent infrastructural setupwhich includes most modern production equipments, process and Quality control instruments, continuously updated technical know-how, Quality management and assurance systems. The Quality assurance system ensures that every batch of productsconforms to the grade specification in all aspects.

Technically superior approach to analysis and measurements are constantly identified and implemented. Besides, the organization has implemented ISO 9002 Qualitysystem management standard and ISO 14001 Environment system management standard. We always strive to meet the customer demand with all aspects of Quality, delivery, and technical services.To meet the needs and expectations of the customer,the company makes efforts to implement important tasks of training, utilizing qualified and skilled people in solving application oriented problems of the customer. The company provides free technical service to industrial customers irrespective of the size, and the technical service department maintains close link with industry, visiting customers to understand their requirements, to provide solutions to customers who are encountering difficulties. The technical service laboratory explores the possibility of widening the application horizon to serve the industry better. Ultramarine & Pigments Ltd., creates Customer relationship management with every customer, through service and communication to enhance long-

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CHAPTER-V REVIEW OF LITERATURE

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4.1COMPARATIVE FINANCIAL STATEMENTS

Comparative financial statements are those statements, which have been designedin a Way so as to provide time perspective to the consideration of various elements of financial Position embodied in such statements. In these statements figures for two or more periods are placed side by side to facilitate comparison. Thepreparation of comparative financial and operating statement is an important device of horizontal financial analysis.

The American Institute of Certified Public Accountants has explained

The presentation of comparative financial statements in annual and other reportsEnhances the usefulness of such reports and brings out more clearly the nature and trend of Current changes affecting the enterprise. Such presentation emphasizes the fact that statement for A series of periods is far more significant thanthose of a single period and that the accounts of One period are but an installment of what is essentially a continuous history. In any one year, it is Ordinarily desired that the Balance sheet, the Income statement and the surplus statement be Given for one or more preceding years as well as for the current year

It is divided into two categories

Comparative Income Statement Comparative Balance sheet

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Comparative Income Statement

The income statement discloses Net profit or Net loss on account of operations.A Comparative income statement will show the absolute figures for two or more periods, the Absolute change from one period to another and, if desired, the change in terms of percentages. Since the figures for two or more periods are shown side by side, the reader can quickly ascertain Whether sales have increased, whether cost of sales has increased or decreased, whether cost of Sales has increased or decreases, etc.

Comparative Balance Sheet

Comparative Balance sheet as on two or more different dates can be used for comparing Assets and liabilities and finding out any increase or decrease in those items. Thus, while in a Single Balance sheet the emphasis is on present position,it is on change in the comparative Balance sheet.

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4.2COMMON-SIZE FINANCIAL STATEMENT

Common-size financial statements are those in which figures reported are converted into Percentages to some common base.

Comparative Common-Size Financial Statement

The comparative common-size financial statements show the percentage of each item to the total in each period but not variations in respective items from periodto period.

It is divided into two categories Common-size balance sheet Comparative common-size balance sheet

Common-Size Balance Sheet

Common-size Balance sheet means, the whole Balance sheet is converted into percentage Form.

Comparative Common-Size Balance Sheet

When Balance sheets of the same concern for several years or when Balance sheetof two Or more than two concerns for the same year are converted into percentageform and presented as Such, they known as Comparative common-size Balance sheet

s.

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4.3TREND ANALYSIS

Comparing the past data over a period of time with a base year is called trend analysis. The method of calculating trend percentages involves the calculation ofpercentage relationship That each item bears to the same item in the base year.Any year may be taken as the base year. It Is usually the earliest year. Any intervening year may also be taken as the base year. Each item of Base year is taken as 100 on that basis the percentages for each of the items of each of the years Are calculated. These percentages can also be taken as Index Numbers showingrelative changes In the financial data resulting with the passage of time.

The method of trend percentages is a useful analytical device for the managementsince By substituting percentages for large amounts; the brevity and readability are achieved. However, Trend percentages are not calculated for all of the items in the financial statements. They are Usually calculated only for major itemssince the purpose is to highlight important changes.

It is mainly used for

Sales trend analysis Profit trend analysis

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4.4RATIO ANALYSIS Ratio

The term ratio refers to the numerical or quantitative relationship between twofigures. A Ratio is the relationship between two figures, and obtained by dividing the former by the latter. Ratios are designed to show how one number is related to another. It is worked out by dividing One number by another.

Ratio can be expressed in two ways Times Percentage Times

When another divides one value, the unit used to express the quotient is termedas Times.

Percentage

If 100 multiply the quotient obtained, the unit of expression is termed as percentage.

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1) CURRENT RATIO

Current Ratio is expresses relationship between current assets and current liabilities. It is The most common ratio for measuring liquidity. Being related to working capital analysis, it is Also called the working capital ratio. The currentratio is the ratio of total current assets to current Liabilities.

The current ratio of a firm measures its short-term solvency. It is ability to meet shortTerm obligations. As a measure of short-term current financial liquidity, it indicates the rupees of Current assets available for each rupees of current liability/obligation. The higher the current Ratio, the larger the amount of rupees available per rupee of current liability, the more the firms Ability to meet current obligations and the greater the safety of funds of short-term creditors.

Formula

Current Assets Current Ratio = -------------------------Current Liabilities

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Current Assets

Which assets are easy to converted cash or which assets are easy to realized within one Year, is called current assets. The current assets of a firm represent those assets, which can be in The ordinary course of business converted into cashwithin a period not exceeding one year.

2) QUICK RATIO

Quick ratio is also known as liquid ratio or acid test ratio or near money ratio. It is the Ratio between quick or liquid assets and quick liabilities. It indicates the relation between strictly Liquid assets whose value is almost certain on the one hand, and strictly liquid liabilities on the Other.

Formula

Liquid Assets Liquid Ratio = --------------------------Liquid Liabilities LiquidAssets

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Liquid Assets = Current Assets (Stock and Prepaid Expenses)

Liquid Liabilities

Liquid liabilities mean liabilities which are payable within a short period.

Liquid liabilities = Current Liabilities Bank Overdraft

3) STOCK TURNOVER RATIO

Stock Turnover Ratio is also known as Stock Velocity. This ratio is calculated to consider The adequacy of the quantum of capital and its justification for investing in inventory. A firm Must have reasonable stock in comparison to sales. Itis the ratio cost of sales and average Inventory. This ratio helps the financial manager to evaluate inventory policy. This ratio reveals The number of times finished stock is turned over during a given accounting period. This ratio is Used for measuring the profitability.

This ratio indicates whether investment in inventory is efficiently used or not.It, Therefore, explains whether investment in inventories is within proper limits or not. The quantum Of stock should be sufficient to meet the demands of thebusiness but it should not be too large to Indicate unnecessary lock-up of capital in stock and danger of stock items obsolete and getting it Wasted by passingof time.

The inventory turnover ratio measures how quickly inventory is sold. It is a test of 26


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Efficient inventory management. To judge whether the ratio of a firm is satisfactory or not, it should be compared over a time on the basis of trend analysis.

Formula Net Sales Stock Turnover Ratio = ----------------------------------Average Inventory at Cost

Opening Stock + Closing Stock Average Stock = ------------------------------------------2 4) DEBTORS TURNOVER RAIO

This is also called Debtor Velocity or Receivable Turnover. A firm sells goods on Cedit and cash basis. When the firm extends credits to its customers, book debts(Debtors or Account Receivable) are created in the firms account: debtors expected to be converted into Cash over short period and thus included in current assets. A debtor includes the amount of Bills Receivables and Book Debts at the end of accounting period. It is most essential that a b

Reasonable quantitative relationship between Outstanding Receivables and Sales should always be maintained. If the firm has not been able to collect its debtorswithin a reasonable time its Funds are unnecessarily locked up in Receivables.In such case short-term loans have to be arranged for paying off its current liabilities. The liquidity position of the firm depends on the Quality of debtors to a great extent.

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The purpose of this ratio is to measure the liquidity of the Receivables or to find out the Period over which Receivables remain uncollected.

Financial analysts to judge the liquidity of a firm use two ratios. They are

Debtors turnover ratio Debt collection period ratio Formula Total Sales Debtor turnover ratio = -------------------------------------------Average Account Receivables

Account Receivables = Debtors + Bills Receivable

Opening Balance + Closing Balance Average Account Receivable = --------------------------------------------------2 5) DEBT COLLECTION PERIOD

The ratio indicates the extent to which the debts have been collected in time. It gives the Average debt collection period. The ratio is very helpful to the lenders because it explains to them Whether their borrowers are collection money within a reasonable time. An increase in the period Will result in greater blockage of funds in debtors.

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Formula Months or Days in a year Debt collection period = -------------------------------------Debtors Turnover

6) CREDITOR TURNOVER RATIO

This is also known as Account payable or Creditors Velocity. A business firm usually Purchase on credit goods, raw materials and services from other firms. Theamount of total Payables of a business concern depends upon the purchases policyof the concern, the quantity of Purchases and suppliers credit policy. Longer the period of outstanding payable is, lesser is the Problem of working capital ofthe firm. But when the firm does not pay of its creditors within Time, it may have adverse effect on the business.

Credit turnover indicates the speed with which the payments for credit purchasesare made to the creditors. It signifies the credit period enjoyed by the firm paying creditors. Formula: Total Purchases Creditor Turnover Ratio = ----------------------------------Average Account Payable

Account Payable = Creditors + Bills Payable

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Opening Balance + Closing Balance Average Account Payable = -----------------------------------------2

7) FIXED ASSETS TURNOVER RATIO

The ratio gives the average credit period enjoyed from the creditors.

Formula

Months or Days in a year Debt payment period = --------------------------------------Creditor Turnover


This ratio indicates the extent to which the investments in fixed assets contribute towards Sales. If compared with a previous period, it indicates whether theinvestment in fixed assets has been judicious or not.

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Formula

Net Sales Fixed assets turnover ratio = -------------------------------Net FixedAssets

Net Sales = Sales- Sales Return Excise Duty

Net Fixed Assets = Fixed Assets Depreciation

9) WORKING CAOPITAL TURNOVER RATIO

This is also known as Working Capital Leverage Ratio. This ratio indicates whether or Not working capital has been effectively utilized in making sales. In casea company can achieve Higher volume of sales with relatively small amount of working capital, it is an indication of the Operation efficiency of the company.

Formula

Net Sales Working capital turnover ratio = -----------------------Working Capital

10) PROPRIETARY RATIO

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Proprietary Ratio relates the shareholders funds to total assets. It is a variant of the debt Equity ratio. This ratio shows the long term or future solvency ofthe business.

Formula

Shareholders Fund Proprietary ratio = -----------------------------Total tangibleAssets

11) DEBT EQUITY RATIO

The debt-equity ratio is determined to ascertain the soundness of the long-termfinancial Policies of the company. It is also known as External-Internal equity ratio.

The term external equities refer to total outside liabilities and the term internal equities refer to shareholders funds or the tangible net worth. In case the ratio is (outsiders funds are Equal to shareholders funds) it is considered to be quite satisfactory

Formula

Total long-term debt Debt-Equity Ratio = -----------------------------32


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Shareholders funds

12) SOLVENCY RATIO

It is also know as Debt ratio. It is difference of 100 and proprietary ratio. This ratio is found out between total assets and external liabilities of the company. External liabilities mean all long period and short period liabilities. Solvency generally refers to the capacity or ability of the business to meet its short-term and long-term obligations. If a company is in a position to pay its long-term liabilities easily, it is said to possess long-term solvency. If a companysfinancial position is strong to pay current Liabilities, it is regarded as short-term solvency. There are circumstances arising to find out Solvency of the company for very short period for immediate solvency. Examples

Liquidity Ratio Absolute Liquid Ratio

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13) OPERATING RATIO

This ratio established the relationship between total operation expenses and sales. Total Operation expenses include cost of goods, administrative expenses, financial expenses and selling Expenses. Cost of goods sold is also known as directoperation expenses and the rest are known As other operating expenses. Operation ratios are generally expressed in percentages.

Formula

Cost of goods sold + Operating Expenses Operating Ratio = -------------------------------------------------------Net Sales

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CHAPTER-VI ANALYSIS AND INTERPRETATION35


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COMPARATIVE STATEMENT

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Table No:5.1 ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT FOR THEYEAR ENDED 31ST MARCH 2005 & 2006

% Absolute particulars 2005 2006 increase or decrease 2006 Sales Less: selling &32,48,62,648 8,19,04,800 37,43,47,830 12,39,10,600 4,94,85,182 4,20,05,800 15.2351.29 36,37,26,667 46,30,90,690 99,36,40,23

increase or decrease 200627.31

administrative express operating income

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Add: other income Total income Less: interests Profit before tax Provision for tax Net profit for the yearInterpretation

44,92,565 40,68,06,105 1,61,15,267 2,67,73,785 ------1,47,03,555

39,37,268 49,84,96,558 1,22,58,400 7,35,04,710 41,94,777 5,80,90,883

-5,55,297 91,69,04,533 -3,85,68,67 4,67,30,925 -41,94,777 4,33,87,278

- 12.36 22.54 - 23.93 174.54 ------295.08

The sale of the company during 2005 was 36,37,26,667. In 2006 the sale was 6,30,90,690. It shows that the company net sale 99,36,40,23 was increased during he period.

The operating income of the company during 2005 was increase.

In 2005 it was

8,19,04,800 but in 2006 it was 12,39,10,600.The increased amount is 4,20,05,800.

The Other income is increase during the year 2005. In 2005 it was 44, 92,565, but in 2006 it was 39,37,268. The decrease amount is -5, 55,297, and the increase

percentage is -12.23.

The income statement finally shows that, the company profit was increased by 295.08%.

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Table no:5.2 ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENTFOR THEYEAR ENDED 31ST MARCH 2005 & 2006

Absolute

%

increase or increase decrease Sch A Particulars Source Of funds Shareholders funds Share capital Reserves and surplus Loan Funds Secured Unsecured Total 2005 45,45,12,880 13,28,556 6,95,62,711 7,15,00,000 59,69,04,147 2006 45,45,12,88 0 13,28,556 12,36,97,65 3 7,25,00,000 65,20,39,08 9 39 2006 0 0 5,41,34,942 10,00,0005,51,34,942 decrease 2006 0 0 -77.82 13.99 9.24

B C


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D

Application of funds Fixed Assets Gross block Less: depreciation

68,11,09,760 27,48,62,752 40,62,47,008

71,52,23,46 4 31,28,79,91 4 40,23,43,55 0 18,86,67,80 5 10,86,124

3,41,13,704 3,80,17,162 -39,03,458 1,15,630

5.01 13.83 -0.96 158.32

E

Capital work-in-progress

7,30,37,701

F

Deferred tax assets 1,12,62,492 Current assets, loans & advances Accrued incomeInventories Sundry debtors Cash and bank balance Loans and advances 59,046 11,25,74,217 1,81,40,354 1,77,72,110 77,88,893 15,63,34,620

-1,01,76,368 -90.36

2,13,853 12,63,30,81 7 2,20,36,659 1,46,20,968 97,27,489 17,29,29,78 6 12,86,46,51 7 4,42,83,269 1,56,58,341 65,20,39,08 9

1,54,807 1,37,56,600 38,96,305 -31,51,142 19,38,596 1,65,95,166 51,49,546 1,14,45,620 5,78,60,956 5,51,34,942

262.18 12.22 21.48 -17.73 24.89 10.62 4.17 34.86 78.70 92.37

G

Less:

current

liabilities 12,34,96,971 3,28,37,649 7,35,19,297 59,69,04,147

and provisions Net Current Assets (F-G) Profit and loss account Total

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Interpretation

The current assets were increase during the year 2005. In 2005 the cost was 15,63,34,623, but in 2006 the cost was 17,29,29,786. The decreased amount is 1,65,95,166 and the increase percentage is 10.62.

The current liabilities sufficiently increased during the year 2005. In 2005 thecost was 12,34,96,971, but in 2006 the cost 12,86,46,517. The increased amountis 51,49,546, and the increased percentage is 4.76.

All fixed assets have decrease during 2005. In 2005 the cost was 40,62,47,008, but in 2006 the cost was 40,23,43,550. The decrease amount is -39,03,458.

The reserve was same at 13,28,556 by 2006 compare with previous year.

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Table no:5.3 ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT FOR THEYEAR ENDED 31ST MARCH 2006 & 2007

% Absolute increase decrease particulars Sales Less: selling administrative express operating income Add: other income Total income Less: interests Profit before tax Provision for tax Net profit for the year 200646,30,90,690

increase or or decrease 200616.45

200753,92,93,728

20067,62,03,038

&37,43,47,830 1,23,91,000 39,37,268 49,84,96,558 1,22,58,400 7,35,04,710 41,94,777 5,80,90,883 4300,47,853 1,20,87,000 1,19,46,451 55,12,40,451 1,45,77,140 6,36,66,606 71,63,854 3,91,18,336 5,57,00,023 -30,40,000 80,09,455 5,27,43,893 23,18,746 -98,38,104 29,69,077 -1,89,72,547 14.88 -102.51 2.14 10.58 18.92 -13.38 70.78 -32.66

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Interpretation

The sale of the company during 2006 was 46,30,90,690 .

In 2007 the sale was

53,92,93,728. It shows that the company net sale 7,62,03,038 was increased during the period.

The operating income of the company during 2006 was increased. 28972387 but in 2004 it was 37137615. percentage of increase was 28.18.

In 2003 it was

The increased amount is 8165228, and the

The Other income is increase during the year 2004. In 2003 it was 2538085, but in 2004 it was 3691123. The increase amount is 1153038, and the increase percentage was 45.43.

The income statement finally shows that, the company profit was increase by 24.79%.

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Table no:5.4 ULTRAMARINE & PIGMENTS LIMITED COMPARATIVE INCOME STATEMENT FOR THEYEAR ENDED 31ST MARCH 2006 & 2007 Absolute increase decrease Sc h A ParticularsSource Of funds Shareholders funds Share capital Reserves and surplus Loan FundsSecured Unsecured Total Application of funds Fixed Assets Gross block Less: depreciation Capital Work-in-progress Deferred tax assets Current assets, loans & advances Accrued income Inventories Sundry debtors Cash and bank balance Loans and advances F Less: current 2,13,853 12,63,30,817 2,20,36,659 1,46,20,968 97,27,489 17,29,29,786 liabilities 12,86,46,517 -13,91,96,849 4,02,25,572 1,85,53,538 2,61,88,027 22,41,63,986 10,35,45,734 -12866032 18188913 3932578 16460538 51234200 -25100783 -78.78 82.54 26.89 169.22 29.63 -19.51 2006 2007 2007 % or increasedecrease 2007

45,45,12,880 13,28,556 12,36,97,653 7,25,00,000 65,20,39,089 71,52,23,464 31,28,79,914 40,23,43,550 18,86,67,805 10,86,124

45,45,12,880 2,98,91,848 21,44,02,377 7,62,80,250 79,74,42,083 94,55,34,607 35,57,46,560 58,97,88,047 8,70,35,784 13,91,96,849

0 28563292 9,07,04,724 37,80,250 145402994 230311143 42866646 187444497 -101632021 138110725

0 2149.95 73.33 5.21 22.29 32.20 13.71 46.59 -53.87 12715.93

B

C

D E

and provisions Net Current Assets(F-G) Profit and loss account Total 4,42,83,2691,56,58,341 65,20,39,089 12,06,18,252 -79,74,42,083 76334983 -172.83 --22.30 44


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14,54,02,994

Interpretation

The Borrowing was increased during the year 2004. In 2003 it was 119776792 and in 2004 it was 206492425. The increased amount was 86715633.

The current assets were increased during the year 2004. In 2003 the cost was 168560352, but in 2004 the cost was 173792236. The increased amount is 5231884 andthe increased percentage is 3.10.

The current liabilities increased during the year 2004. In 2003 the cost was 77959588, but in 2004 the cost was 100915372. The increased amount is 22955784, andthe increased percentage is 29.45.

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COMMON-SIZE Fixed assets have increased during 2004. In 2003 the cost was 171339877, but in2004 the cost was 287779800. The increased amount is 116439923, and the percentage of increase is 67.96. The reserve was increased during the year 2004. The increased amount is 12000390.

STATEMENT46


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particulars Sales Less: selling administrative express operating income Add: other income Total income Less: interests Profit before tax Provision for tax Net profit for the year

200536,37,26,667

%100.01

200646,30,90,690

%100.00 80.84

&32,48,62,648 81,90,48,600 44,92,565 40,68,06,105 1,61,15,267 2,67,73,785 ------1,47,03,555 89.32 225.18 1.24 111.84 4.43 7.36 -------4.04 37,43,47,830 1,23,91,000 39,37,268 49,84,96,558 1,22,58,400 7,35,04,710 41,94,777 5,80,90,883

2.68 0.85 107.65 2.65 15.87 0.91 12.54

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particulars Sales Less: selling administrative

200646,30,90,690

%100.00 80.84

200753,92,93,728

%100.00 79.74

&37,43,47,830

4300,47,853

express operating income Add: other income Total income Less: interests Profit before tax Provision for tax Net profit for the year

1,23,91,000 39,37,268 49,84,96,558 1,22,58,400 7,35,04,710 41,94,777 5,80,90,883

2.68 0.85 107.65 2.65 15.87 0.91 12.54

1,20,87,000 1,19,46,451 55,12,40,451 1,45,77,140 6,36,66,606 71,63,854 3,91,18,336

2.24 2.22 102.22 2.70 11.81 1.33 7.25

Interpretation

Net Profits were fluctuating during the study period. In 2002 the sales was 5.90

%, in 2003 it was 5.59%, in 2004 it was 5.30%, in 2005 it was 3.99%, and in2006was 5.06. Companys Gross profit was decreased in during the study period. During2002 it was 19.51, in 2006 it was 18.19%. 48


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During 2002 to 2006 the cost of sales were gradually declined. This decline maydue to fall in raw materials prices and efficiency of the purchasing departments.

During 2002 to 2006 other income was increased. During 2002 other income was 0.64, in 2006 it was 0.85%.

During 2002 to 2006 total income was decreased. during 2002 total income was 10.96%, in 200 it was 10.70%.

during 2002 to 2006 the interests were increased. During 2002 it was 2.49%, in 2006 it was 3.89%.

Table no:5.6 ULTRAMARINE & PIGMENTS LIMITED COMMON-SIZE BALANCESHEET AS ON 31STMARCH 2005 & 2006

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Sch A

Particulars Source Of funds Shareholders funds Share capital Reserves and surplusLoan Funds Secured Unsecured Total

2005 45,45,12,880 13,28,556 6,95,62,711 7,15,00,000 59,69,04,147

% 124.96 0.37 19.13 19.68 164.11

2006 45,45,12,88 0 13,28,556 12,36,97,65 3 7,25,00,000 65,20,39,08 9

% 98.15 0.39 26.71 15.76 140.81

B C

D


68,11,09,760 27,48,62,752 40,62,47,008

187.26 75.57 111.71 20.11 3.11

71,52,23,46 4 31,28,79,91 4 40,23,43,55 0 18,86,67,80 5 10,86,124

154.44 67.66 86.98 40.74 0.37

E

Capital work-in-progress Deferred tax assets

7,30,37,701 1,12,62,492

F

Current assets, loans & advances Accrued income Inventories Sundry debtors Cashand bank balance Loans and advances 59,046 11,25,74,217 1,81,40,354 1,77,72,110

77,88,893 15,63,34,620 0.02 31.10 5.01 4.99 2.14 42.99 2,13,853 12,63,30,81 7 2,20,36,659 1,46,20,968 97,27,489 17,29,29,78 0.12 27.28 4.76 3.16 2.10 37.34 50


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G

Less: current liabilities 12,34,96,971 and provisions Net Current Assets (F-G) Profit and loss account Total 3,28,37,649 7,35,19,297 59,69,04,147

33.96 9.03 20.21 164.11

6 12,86,46,51 7 4,42,83,269 1,56,58,341 65,20,39,08 9

27.87 9.66 3.28 140.80

Table no :5.7ULTRAMARINE & PIGMENTS LIMITED COMMON-SIZE BALANCESHEET AS ON 31ST MARCH 2006 &2007

Sch A

Particulars Source Of funds Shareholders funds Share capital Reserves and surplus

2006 45,45,12,880 13,28,556

% 98.15 0.39

2007 45,45,12,88 0 2,98,91,848

% 84.28 5.54

B

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C

Loan Funds Secured Unsecured Total

12,36,97,653 7,25,00,000 65,20,39,089

26.71 15.76 140.81

21,44,02,37 7 7,62,80,250 79,74,42,08 3

39.86 14.14 147.87

D


71,52,23,464 31,28,79,914 40,23,43,550

154.44 67.66 86.98 40.74 0.37

94,55,34,60 7 35,57,46,56 0 58,97,88,04 7 8,70,35,784 --------

175.33 65.97 109.36 16.14 ------

E F

Capital work-in-progress Deferred tax assets Current assets, loans & advances Inventories Sundry debtors Cash and bank balance Loans and advances

18,86,67,805 10,86,124

12,63,30,817 2,20,36,659 1,46,20,968 99,41,.342 17,29,29,786

27.28 4.76 3.16 2.10 37.34

13,91,96,84 9 4,02,25,572 1,85,53,538 2,61,88,027 22,41,63,98 6

25.81 7.56 3.44 4.96 41.97

G

Less: current liabilities and provisions Net Current Assets (F-G) Profit and loss account 12,86,46,517 4,42,83,269 1,56,58,341 27.87 9.66 3.28 10,35,45,73 4 12,06,18,25 2 --

. 19.20 22.37 -----52


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Total

65,20,39,089

140.80

79,74,42,08 3

147.87

Interpretation

Current assets and total current liabilities have considerably increased duringhe period. At the end of 2006, the firms current assets are sufficiently more than its current liabilities. As such, the firms solvency position appears to be satisfactory.

during 2002 to 2006 the current assets were 59.74%, 49.59%, 37.652%, 33.99% and32.766%. During 2002 to 2006 the current liabilities were 20.45%, 22.93%, 21.86%, 18.82% and 18.64%. This information show that the company is in solvency position.

Reserve funds were fluctuating during the study period. In 2002 it was37.01%, in2003 it was 35.07%, in 2004 it was 28.43%, in 2005 it was 21.96%, and in 2006 w

as 19.80%. This show that the companys profits retain percentage is decreasing year by year.

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Borrowings were fluctuating during the study period. In 2002 it was34.84%, in 2003 it was 35.23%, in 2004 it was 44.73%, in 2005 it was 50.03%, and in 2006 48.32%. It shows the companys burden is increasing.

Fixed assets were considerably increasing during the study period. In 2002 it was 69.2%, in 2003 it was 79.52%, in 2004 it was 87.21%, in 2005 it was 82.03%, and in 2006 77.84%, hence it seems that the company is investing its borrowing money in buying fixed assets.

CHAPTER VI54


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Trend percentage 160 140 120 100 80 60 40 20 0

36,37,26,667

46,30,90,690

2005

2006

2007

ANALYSIS

6.1 SALES TREND ANALYSIS

TABLE 6.1

Year 2005 2006 2007

Sales 36,37,26,667 46,30,90,690 53,92,93,728

53,92,93,728

TREND

Trend percentage

Chapter :vi

Trend percentage 100 127.31 148.27

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6.2PROFIT AND LOSS ANALYSIS

TABLE6.2 Year 2005 2006 2007 Net profit 1,47,03,555 5,80,90,883 3,91,18,336 Trend percentage 100 395.08 266.05

PROFIT TREND 56


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Trend percentage Trend percentage 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

1,47,03,555 2005

5,80,90,883 2006

3,91,18,336 2007

Table no 6.3

TREND ANALYSIS AS ON 31ST MARCH 2005-2007

Sch A

ParticularsSource Of funds Shareholders funds Share capital Reserves surplus Loan Funds Secured Unsecured Total Application funds of

31st march 2005

2006

2007

Trend % base year 2002 % % %

B

45,45,12,880 and 13,28,556

45,45,12,880 13,28,556

45,45,12,880 2,98,91,848

100.00 100.00

100.00 100.00

100.00 2250.0 1

C

6,95,62,711 7,15,00,000 59,69,04,147

12,36,97,653 7,25,00,000 65,20,39,089

21,44,02,377 7,62,80,250 79,74,42,083

100.00 100.00 100.00

177.82 101.21 109.24

308.22 106.71 133.61

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D

Fixed Assets Gross block Less: depreciation Capital progress Deferred tax assetswork-in-

68,11,09,760 27,48,62,752 40,62,47,008 7,30,37,701 1,12,62,492

71,52,23,464 31,28,79,914 40,23,43,550 18,86,67,805 10,86,124

94,55,34,607 35,57,46,560 58,97,88,047 8,70,35,784 --------

100.00 100.00 100.00 100.00 100.00

105.01 113.83 99.04 258.32 9.65

E

138.82 129.43 145.18 119.17 1236.9 3

F

Current

assets,

loans & advances Accrued income Inventories Sundry debtors Cash and bank balanceLoans advances

59,046 11,25,74,217 1,81,40,354 1,77,72,110

2,13,853 12,63,30,817 2,20,36,659 1,46,20,968 97,27,489 17,29,29,786 12,86,46,517 4,42,83,269 1,56,58,341 65,20,39,089

-------13,91,96,849 4,02,25,572 1,85,53,538 2,61,88,027 22,41,63,986 10,35,45,734 12,06,18,252 ------79,74,42,083

100.00 100.00 100.00 100.00 100.00 100.00 100.00

362.18 112.22 121.48 82.27 124.48 110.62 104.17

----123.65 221.75 104.21 336.22 143.49 83.85

and 77,88,893

15,63,34,620 GLess: liabilities current and 12,34,96,971

provisions Net Current Assets 3,28,37,649 (F-G) Profit account Total and loss 7,35,19,297

100.00 100.00 100.00

134.91 21.31 109.24

367.32 ---133.61

59,69,04,147

Interpretation


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From the trend analysis as on 31st March 2005 to 2007, it is observed that the reserve funds trend percentage in base year 2005 is 100%, in 2006 was 100.00, in2007 was 2250.90. It shows that the reserve fund is sufficiently increased compare with every previous year.

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From the trend analysts it is observed that the application of funds in fixed assets and current assets drastically changes during the study period. Fixed assetsthe cost for the base year is 100% in 2005 but in 2006 percentage was 100.00, in 2007 percentage was 145.18 these trends show that the fixed assets costs wereincreased year by year as well as the accumulated depreciation increase year byyear in base year 2005 it is 100%, in 2006 is 113.83, in 2007 is 129.43.

During 2005 to 2007 the current liabilities were, the percentage in the base year 2005 was 100%, in 2006 were 104.17, and in 2007 were 83.85.

The applications of funds such as inventories, cash and bank balance and loans &advances have a different trend analysis. It finally the entire trend shows that there is upward result in during the study period.

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CHAPTER VIIRATIO ANALYSIS

Chapter : VII 7.1 RATIO ANALYSIS

1) 7.1CURRENT RATIO

(i) Significance 60


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Current ratio provides a margin of safety to the creditors. In a sound business,a current Ratio of 2:1 is considered an ideal one. The ratio of 2 is consideredas a safe margin of solvency due to the fact that it the current assets are reduced to half, I instead of 2, then also the creditors will be able to get theirpayment in full. (ii) Table-7.2

YEAR 2005 2006 2007

CURRENT ASSETS 3,28,37,649 4,45,82,565 12,05,65,607

CURRENT LIABILITES 12,34,96,971 12,79,05,710 10,32,26,334

RATIO 0.26 0.34 1.16

(iii) Interpretation

From the above table it is clearly observed that, the current ratios for the 2005 and 2006were matched with the ideal ratio. During 2006 to 2007 the ratios showthat the company was sufficiently able to repay its debts.

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Chart 7.3

RATIO 1.4 1.2 1 0.8 0.6 0.4 0.2 0 12,34,96,971 3,28,37,649 2005 12,79,05,710 4,45,82,565 2006 10,32,26,334 12,05,65,607 2007 RATIO

CURRENT RATIO

2) QUICK RATIO

(i) Significance

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An acid test ratio of 1:1 is considered satisfactory as a firm can easily meet all current Claims. If the ratio is less than 1:1, that is, liquid assets are less than current liabilities, the Financial position of the concern shall be deemed to be unsound.

(ii) Table 7.4

YEAR 2005 2006 2007

LIQUID ASSETS 15,63,34,620 17,24,88,275 22,37,91,941

CURRENT LIABILITES 12,34,96,971 12,79,05,710 10,32,26,334

RATIO 1.26 1.34 2.76


From the above table it is clearly observed that, the current ratio during the three year Matched with the in 2005 and 2006. During 2005 to 2007 the ratios Showthat every one rupee of companys current liabilities it has 1.26, 1.34, & 2.76 ofLiquid assets. Hence, its liquidity position is satisfactory.

RATIO 3 2.5 2 1.5 1 0.5 0

12,34,96,971

12,79,05,710

10,32,26,334

Chart 7.5

RATIO

15,63,34,620 22,37,91,941 17,24,88,275 2005 2006 2007

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3.STOCK TURN OVERRATIO (i) Significance

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A high inventory turnover ratio indicates brisk sales. A high ratio implies goodinventory management and an indication of under-investment. It will adversely affect the ability of a firm to meet customers demand. At the same time, a higherratio reflects efficient business activities

A low inventory turnover ratio is dangerous. It is an indication of excessive inventory and over investment in inventory. A low ratio may be result of inferiorquality goods, stock of Unsaleable and absolute goods. A lower ratio reflects dull business and suggests that some steps should be taken to push up sales.

(ii) Table 7.6 YEAR 2005 2006 2007 SALES 36,37,26,667 46,30,90,690 53,92,93,728AVERAGE INVENTORY 11,25,74,210 12,63,30,817 13,91,96,849 RATIO 3.23 3.66 3.87


From the above table it is clearly observed that, the inventory turnover ratio shows that 3.23 times in 2005, 3.66 in 2006, 3.87 in 2007, It shows that the stock turnover of the company is satisfactory.

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Chart7.7

RATIO

RATIO

11,25,74,210 36,37,26,667 2005

12,63,30,817 46,30,90,690 2006

13,91,96,849 53,92,93,728 2007

4) DEBTORS TURNOVER RATIO (i) Significance

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It indicates the efficiency of the staff entrusted with collection of book debts. The higher the ratio, the better it is, since it would indicate that debts arebeing collected more promptly. For measuring the efficiency, it is necessary toset up a standard figure; a ratio lower than the standard will indicate inefficiency.

(ii) Table 7.8 YEAR 2005 2006 2007 SALES 36,37,26,667 46,30,90,690 53,92,93,728AVERAGE DEBTRES 1,81,40,354 2,20,36,659 4,02,25,572 RATIO 20.05 21.01 13.41


From the above table it is clearly observed that, the company was able to turnover its Debtors 20.05 times in 2005, 21.01 times in 2006, 13.41 times in 2007. companys debtors turnover was decreasing which is not satisfactory. It shows that the

RATIO 25 20 15

Chart 7.9

10 5 0 1,81,40,354 2,20,36,659 4,02,25,572 36,37,26,66746,30,90,69053,92,93,7282005 2006 21.01 2007 13.41

RATIO

20.05

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5) DEBT COLLECTION PERIOD

(i) Significance 68


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Debtors collection period measures the quality of debtors since it measures therapidity or slowness with which money is collected from them a shorter collection period implies prompt payment by debtors. It reduces the chances of bed debts.A longer collection period implies too liberal and inefficient credit collection performance. The amount of receivables should not exceed 90-120 days credit sales.

(ii) Table 7.10 YEAR 2005 2006 2007 DAYS IN A YEAR 360 360 360 DEBTER RATIO 20.05 21.01 13.41 DAYS 18.00 17.13 26.85


From the above table it is clearly observed that, the company was able to collect money Form its debtors, 79 days in 2005, 130 days in 2006 and 150 Days in 2007. It has been showing increasing situation from 2005 to 2007 as it may due to Change in economic conditions and/or laxity in managing receivables

Chart 7.11

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DAYS

30 20 10 0 DAYS 20.05 360 2005 DAYS 18 21.01 360 2006 17.13 13.41 360 2007 26.85

6) PROPRIETARY RATIO

(i) Significance

The acceptable norm of the ratio is 1:3. The ratio shows the general strength ofthe company. If is very important to creditors as it helps them to find out theproportion of 70


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shareholders funds in the total assets used in the business. Higher ratio indicates a secured position to creditors and a low ratio indicates greater risk to creditors. A ratio below 50% may be alarming for the creditors since they may haveto lose heavily in the event of companys liquidation on account of heavy losses.

(ii) Table 7.12

YEAR 2005 2006 2007 (iii) Interpretation

SHAREHOLDERS FUND 45,45,12,880 45,45,12,880 45,45,12,880

TOTAL

TANGIBLE RATIO 3.06 2.80 2.30

ASSETS 14,84,86,681 16,25,79,477 19,77,39,690

From the above table it is clearly observed that, the proprietary ratio during the three-year is not matching the ideal proprietary ratio. During 2005 to 2007 the ratios were 3.06, 2.80, and 2.30. This shows that there is no secured position to creditors.

Chart 7.133.5 3 2.5 2 1.5 1 0.5 0 YEAR 0 0 0 2005 0 0 3.06 2006 0 0 2.8 2007 0 0 2.3

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7) DEBT-EQUITY RATIO

(i) Significance

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As acceptable norms for this ratio is considered to be 2:1 a higher debt-equityratio allowed in the case of capital-investment industries. A norm of 4:1 is used for fertilizer and cement units and a norm of 6:1 is used for shipping units.

(ii) Table 7.14 TOTAL LONGTURN SHREHOLDERS YEAR 2005 2006 2007 (iii) Interpretation From the observation it is clear that the total debt ratio that the companyslenders have Contributed more than owners; lenders contribution was 0.04 times ofowners contribution in the year of 2005, 0.05 times in 2006, and 0.09 times in 2007. DEBT 1,81,40,354 2,20,36,659 4,02,25,572 FUND 45,45,12,880 45,45,12,880 45,45,12,880 RATIO 0.04 0.05 0.09

Chart 7.15

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0.1 0.08 0.06 0.04 0.02 0

45,45,12,880 45,45,12,880 45,45,12,880 1,81,40,354 2005 0.04 2,20,36,659 2006 0.05 4,02,25,572 2007 0.09

Series1

8) OPERATING RATIO

(i) Table 7.16 YEAR 2005 2006 2007 OPERATING EXPENSES 32,48,62,648 46,30,90,69053,92,93,728 SALES 36,37,26,667 46,30,90,690 53,92,93,728 RATIO 0.87 0.80 0.79

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(ii) Interpretation

From the above table it is clearly observed that, the operating ratio has been fluctuating form 2005 to 2007. This has resulted in fluctuation of the profit.

Chart 7.17

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0.88 0.86 0.84 0.82 0.8 0.78 0.76 0.74 36,37,26,6676,30,90,690 4 53,92,93,728 32,48,62,6486,30,90,690 4 53,92,93,728 2005 Series1 0.87 2006 0.8 2007 0.79

9) TOTAL ASSETS TURNOVER RATIO

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(i) Significance

This ratio shows the firms ability in generating sales from all financial resources committed to total assets.

(ii) Table 4.44 YEAR 2005 2006 2007 SALES 36,37,26,667 46,30,90,690 53,92,93,728TOTAL ASSETS 15,63,34,620 17,24,88,275 22,37,91,941 RATIO 2.33 2.68 24.09


The total assets turnover of 2.33 times in 2005, 2.68 times in 2006, 24.09 timesin 2004, which implies that the company generates a sale of Rs.2.33 in 2005, 2.68 in 2006, 24.09in 2007, against one rupee investment infixed and current assets together.

(iv) Chart 4.11

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25 20 15 10 5 0 15,63,34,620 17,24,88,275 22,37,91,941 36,37,26,667 46,30,90,69053,92,93,728 2005 Series1 2.33 2006 2.68 2007 24.09


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(i) Table 7.18 YEAR 2005 2006 2007 SALES 36,37,26,667 46,30,90,690 53,92,93,728NET FIXEDASSETS 40,62,47,008 40,22,69,816 58,97,44,071 RATIO 0.89 1.15 0.91

(ii) Interpretation

From the above table it is clearly observed that the companys fixed assets turnover ratios were decreasing during 2005 to 2007 which show that the company did not use its fixed assets promptly.

(iii) Chart 7.19

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1.2 1 0.8 0.6 0.4 0.2 0 40,62,47,008 40,22,69,816 58,97,44,071 36,37,26,667 46,30,90,690 53,92,93,728 2005 Series1 0.89 2006 1.15 2007 0.91

11) CURRENT ASSETS TURNOVER RATIO

(i) Table 7.20

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YEAR 2005 2006 2007

SALES 36,37,26,667 46,30,90,690 53,92,93,728

CURRENT ASSETS 3,28,37,649 4,45,82,565 12,05,65,607

RATIO 11.08 10.39 4.47

(ii) Interpretation

From the above table it is clearly observed that, during 2005 to 2007 current assets were sufficiently used.

(iii) Chart 7.21 81


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12 10 8 6 4 2 0 3,28,37,649 4,45,82,565 12,05,65,607 36,37,26,667 46,30,90,690 53,92,93,728 2005 Series1 11.08 2006 10.39 2007 4.47

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CHAPTER-V FINDINGS

FINDINGS

The company net sales were increased during the three years.

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The cost of sales was increased due to production increased.

The operating expenses were increased during the three years.

The operating income was increased during the study period.

The depreciation was increased due to fixed assets were increased and used.

Company profits were increased year by year due to increase of sales and efficient management. Company raised borrowings year by year.

Fixed assets were increased during the study period.

Net working capital was increased during the last two years.

Current & liquidity ratios during the five years matching ideal ratio so companyssolvency and liquidly positions were good. Inventory turnover ratio shows normal fluctuations during 2002 to 2006 due to product is moving in market. Debtors enjoying credit facility more than 150 days.

Proprietary ratios during the three years were not satisfactory.

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Debt equity ratio shows that the lenders have contributed more than owners.

During 2005 to 2007 fixed assets were not properly used.

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SUGGESTION

SUGGESTION

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During the five years study low inventory turnover ratio is found due to production was not matching with the demand. So create the demand for the product. Debtshould be collected in right time and rectify debt collection department.

Apply budget and budgetary control system for each and every item of operating expenses Push sales and reduce expenses in order to retain its current positions.Product is not familiar to market so make advertisement in appropriate media. Motivate sales representatives through various promotional activities.

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CONCLUSION

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CONCLUSION

During the project study period it was observed that the companys financial position as steadily increasing, sales were increasing, and assets were effectively utilized.

The companys borrowings were increasing compare with every previous year hence which should be considered so as to avoid high burden.

The project period gave an opportunity to interact with the experienced people and gains acquire knowledge about various financial activities.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

S.NO

AUTHOR NAME

BOOK NAME

1 Dr.S.N. MAHESHWARI

Management Accounting . Edition Published by Sultan Chand & Sons.

2 I.M.PANDEY

Financial Management , Vikas Publishing House Private Limited.

3 R.S.N. PILLAI BAGAVATHI

Management Accounting . Edition Published by Sultan Chand Company Limited.

4

R.PRASANNA CHANDRA

Financial Management, Himalaya Publication Limited, Delhi.

Reference sites

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http://www.moneycontrol.com/financials/ultramarinepigments/balance-sheet/UP02 http://www.ultramarinepigments.net/ http://money.rediff.com/money/jsp/company.jsp?companyCode=16090012 http://economictimes.indiatimes.com/ultramarine-&-pigments-ltd/stocks/companyid-12880.cms http://www.thirumalaichemicals.com/upl.html

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ANNEXURE

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PROFIT AND LOSS A/C94


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ULTRAMARINE & PIGMENTS PROFIT AND LOSS A/c

particulars Sales Less: selling & administrative express operating income Add: other income Total income Less: interests Profit before tax Provision for tax Netprofit for the year

200536,37,26,667

200646,30,90,690

200753,92,93,728

32,48,62,648 8,19,04,800 44,92,565 40,68,06,105 1,61,15,267 2,67,73,785 ------1,47,03,555

37,43,47,830 12,39,10,600 39,37,268 49,84,96,558 1,22,58,400 7,35,04,710 41,94,777 5,80,90,883

4300,47,853 1,20,87,000 1,19,46,451 55,12,40,451 1,45,77,140 6,36,66,606 71,63,854 3,91,18,336

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BALANCE SHEETULTRAMARINE & PIGMENTS BALANCE SHEET

S.no

Particulars

2005

2006

2007 96


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A B C

Source Of funds Shareholders funds Share capital Reserves and surplus Loan FundsSecured Unsecured Total Application of funds Fixed Assets Gross block Less: depreciation Capital work-in-progress Deferred tax assets Current assets, loans & advances Accrued income Inventories Sundry debtors Cash and bank balance Loans andadvances

45,45,12,880 13,28,556 6,95,62,711 7,15,00,000 59,69,04,147

45,45,12,880 13,28,556 12,36,97,653 7,25,00,000 65,20,39,089

45,45,12,880 2,98,91,848 21,44,02,377 7,62,80,250 79,74,42,083

D

E F

68,11,09,760 27,48,62,752 40,62,47,008 7,30,37,701 1,12,62,492

71,52,23,464 31,28,79,914 40,23,43,550 18,86,67,805 10,86,124

94,55,34,607 35,57,46,560 58,97,88,047 8,70,35,784 --------

59,046 11,25,74,217 1,81,40,354 1,77,72,110 77,88,893 15,63,34,620 12,34,96,9713,28,37,649 7,35,19,297 59,69,04,147

2,13,853 12,63,30,817 2,20,36,659 1,46,20,968 97,27,489 17,29,29,786 12,86,46,517 4,42,83,269 1,56,58,341 65,20,39,089

-----13,91,96,849 4,02,25,572 1,85,53,538 2,61,88,027 22,41,63,986

G

Less: current liabilities and provisions Net Current Assets (F-G) Profit and loss account Total

10,35,45,734 12,06,18,252 -79,74,42,083

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