Summer Project:

Analysis of Key Financial Indicators of VNR Seeds Pvt. Ltd.

How the company is performing in this non-famous but important industry.

Analyze the financial strength. Analyze the current trend in seed industry. Study some key ratios of VNR. Finding out the key areas of improvements.

Objective of the Study

Primary Data CollectionCollected through direct interactions with executives and managers of finance department of the VNR Seeds Pvt. Ltd.

Secondary Data CollectionData collected through internet, books, newspapers and literatures

Research Methodology

Established in 1993 by a farmer Dr. Narayanbhai Chawda,

It is one of the leading and most trustworthy seeds company in central India,

VNR offers fellow farmers a wide range of quality product seeds that are not only disease resistant but also give high yield.

Introduction to the VNR Seeds Pvt. Ltd.

We envisage a knowledgeable and prosperous farming community where we can act as a major contributor by sharing the best in research technology and quality seeds that ensure optimal yield and also by sharing our own experience as fellow farmers.

Vision

Our mission is to give fellow farmers the best seeds that ensure maximum profit through optimum yield. Kisano ke hith mein (in the interest of farmers) is our mantra.

Mission

Vegetables

Cereals

Fruits

Products

Indian Seeds Industry is organized. There are superior genetics and

technologies from the ‘State of the Art’ R & D establishments in the industry.

With an estimated turnover exceeding Rs. 70 billion (USD 1.5 billion), India ranks fifth in the world seed trade.

The organized seed industry of the country is just forty years old.

India is one of the few countries where the seed sector is already reasonably advanced.

Indian Seeds Industry

The National Seed Corporation was established in 1963.

The Government of India enacted the Seeds Act in 1966 to regulate the growing seed industry.

During Sixties introduction of high-yielding cereals took place.

Also the enactment of Seeds Act, 1966 and formation of National Commission on Agriculture took place.

Historical perspective

Since then the country witnessed a continuous growth so far and expected to remain for the future.

Contd…

Both private and public sector companies/corporations are involved with the production of seed.

The public sector component comprises two central corporations, viz. National Seed Corporation (NSC) and State Farm Corporation of India (SFCI) and 13 State Seed Corporations.

Current Status of the Seed Industry

The private sector comprises around 150 seed companies, which include national and multinational companies and other seed producing/selling companies.

Contd…

Scope of the study:

◦ The study covers a period from 2007 to 2008 due to limitation of time and accessibility to data base.

◦ The authenticity of the suggestions and recommendations depend upon the rationality of the data provided to me.

The Study

Measurement of solvency Helps in decision making Evaluates the financial health of the

organization Facilitates to sales force by projection,

budget, and allocate funds Ensures overall growth Helps in getting Ratings from agencies Identifies the area of improvements in

terms of financial strength of the organization

Importance of Financial Analysis

The Analysis

I used some key financial numbers and ratios for evaluating the financial condition of the Company. Based on the data provided of 2 to 3 years, I found some areas where the Company is strong and where the improvements require.

Key numbers of the company are as follow:

Criterion Used for Analysis

Sales Turnover (In Rs. Lacs)

2007 2008 20090

200

400

600

800

1000

1200

1400

Sales (In Rs. Lacs)

Sales (In Lacs)

Net Profit

2007 2008 20090

5

10

15

20

25

30

Net Profit (in Rs. Lacs)

Net Profit (in ` Lacs)

Net Profit Ratio

2007 2008 20090

0.5

1

1.5

2

2.5

NP Ratio (in %)

NP Ratio (in %)

Current Assets

2007 20080

200

400

600

800

1000

1200

1400

1600

Total Current Assets (In Rs. lacs)

Total Current Assets (In Rs. lacs)

Current Ratio (CA ÷ CL)

2007 20080

0.5

1

1.5

2

2.5

3

Current Ratio

Current Ratio

Debtor Turnover Ratio

2007 20080

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Debtor Turnover Ratio

Debtor Turnover Ratio

Fixed Assets (in Rs. Lacs)

2007 2008 20090

20

40

60

80

100

120

140

160

180

200

Fixed Assets

Fixed Assets (in Rs. Lacs)

Sales and net profit growth are impressive but net profit ratio is quite lower.

Current Ratio is nearly satisfactory level. Cash & Bank to current assets is very low. Liquidity of the company is not sound

enough. Debtor Turnover Ratio is efficient. Creditor Turnover Ratio was also good. Company has increased its Net Block over

the years.

Findings

Current ratio can be more correct so management can concern over the matter.

Fluctuations in creditor turnover ratio should be checked.

Net Profit ratio could be a worry for the company, and needed to improve.

Suggestions

Thank You!