Kishan Finance Report

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A

Project report on

ASHOK LEYLAND PVT. LTD.

PROJECT GUIDE:

PROF.

PROF.

SUBMITTED BY:

NAME: BHALODIYA KISHAN R.

ROLL.NO:13

CLASS: SYBBA

DIV: A

SUBMITTED TO:

L.J. INSTITUTE OF BUSINESS ADMINISTRATION

VASTRAPUR, AHMEDABAD 380015

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CERTIFICATE

This is to certify that Mr. KISHAN R. BHALODIYAof L.J Institute

of Business Administration has submitted his Financial Project titled,ASHOK LEYLANDfor the year 2011-12 in partial fulfillment ofGujrat University requirement for the award of the degree of bachelor of

Business Administration.

For, L.J. INSTITUTE OF BUSINESS

DIRECTOR PROJECT GUIDE EXTERNAL EVALUATOR

Place:AHMEDABAD

DATE:

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ACKNOWLEDGEMENT

The successful completion of this report would not have beenpossible without the coopration and support of my teachers,friends and my

institute.

I also forward my thanks my prof. for imparting

valuable guidance and co-operation in making of this finance report.

I also extend my gratitude to respected director of the institute

for arranging this kind of practical studies on finance report.

I am also forwarding my gratitude to the company which helped

me when we called them to sort out doubts. Also I am thankful to Gujrat

University for introducing this kind of practical study on finance report BBA

program without which we would have had no practical experience of real

finance management.

Your sincerely

Class:S.Y.B.B.A.

Div:A

Roll No:13

Place:Ahmedabad

Date:

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PREFACE

This practical training of B.B.A. program develops a feeling aboutdifficulties and challenges in the business world. Only theory knowledge

does not impart complete education, practical experience must accompany

Theoretical knowledge to add meaning to education.

We need to know the practical application of or other theoretical

knowledge. So I have prepared a financial report ASHOK LEYLAND

And have tried to analysis each and every report of three

successive years.

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COMPANY PROFILE

(A) NAME OF THE COMPANY: ASHOK LEYLANDLIMITED

(B) REGISTERED OFFICE: NO.1,Sardar Patel Road,

Guindy, Chennai 600032.

Tel,+91 44 2220 6000,

Fax: +91 44 2220 6001

(C) PRODUCTION PLANT: Chennai(Ennore & Ambattur)

And Hosur (Tamil nadu)

Bhandara (Maharastra);

Alwar(Rajasthan)

Pantnagar (Uttarakhand)

(D) COMPANY E-MAIL ID : [email protected]

(E) WEB SITE: www.ashokleyland.com

(F) TYPE OF BUSINESS:

(G) PUNCHLINE: ENGINEERING YOUR TOMMORROWS

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mailto:[email protected]://www.ashokleyland.com/mailto:[email protected]://www.ashokleyland.com/


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TABLE OF CONTENTS

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LISTING OF ITEMS INCLUDED

IN FINANCIAL STATEMENT

Board of directors

Directors report

Balance sheet

Profit and loss Account

Auditors report

Cash flow statement

Notice

Consolidated financial statement

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HIERARCH OF ORGANIZATIONAL

STRUCTURE

The organizational structure of the ASHOK LEYLAND PVTLTD

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ABOUT COMPANY

(A) NAME OF THE COMPANY: ASHOK LEYLAND PVT

LTD

(B) NAME OF THE DIRECTORS: R J Shahaney

D G Hinduja

A K Das

D J Balaji Rao

(C) NAME OF AUDITORS: M S Krishnaswami&Rajan

Deloitte Haskins&sell

Geeyes &co.

(D) NAME OF BANKERS: Bank of Baroda

Citi bank N.A.

Bank of America

SBI bank

(D) NAME OF SECRETORY: A R Chandrasekharan

(E) NAME OF THE SHARE TRANSFER AGENT :

K Sridharan

Geeyes &co.

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FINANCIAL RESULT OF THE COMPANY

AT A GLANCE FOR LAST 3 YEARS

(RS Lakhs)

PARTICULAR 2008-09 2009-10 2010-2011Profit before tax 20844.63 54477.48 80179.93

Less: provision for taxation 1845.00 12110.00 17050.00

Profit after tax 18999.63 42367.48 63129.93

Excess provision written

back

Dividend 22.05 -corporate dividend tax 3.75 -Balance profit from last

year

50227.38 48230.19 57744.98

Transfer from/(to):

Debenture redemptionreserve

2958.33 416.67 5666

General reserve 2500.00 10000.00 (10000)

Profit available for

appropriation

63794.48 81014.34 106041.57

Appropriation:

proposed dividend 13303.38 19955.07 26606.77Corporate dividend taxthereon

2260.91 3314.29 431628

Balance profit carried to

balance sheet

48230.19 57744.98 75118.52

Earning per share (face

value Re.1/-)

Basic (in Rs.)

1.4

3 3.18 4.75

ABSTRACT BALANCE SHEET

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FOR THE LAST 2 YEARS

(Rs. Lakhs)

PARTICULAR 2008-09 2009-10 2010-11

Sources of fundsShareholders funds

Capital 13303.42 13303.42 13303.42

Reserve and surplus 334086.48 353572.39 382992.79

Loan funds

Secured loans 30441.33 71156.68 118229.75

Unsecured loans 165373.06 149232.50 138596.73

Deferred tax liability 26343.69 38453.69 44388.69

Foreign currency

monetary item

translation difference

384.11 1245.01 _

TOTAL 569932.09 632128.52 706504.05

Application of fundFixed asset

Gross block 495327.22 601863.37 669188.87

Less Depreciation 155415.59 176907.45 205809.69

Net block 339911.63 424955.92 463379.18

Capital work-in-progress 99828.94 56146.97 35796.61

Investments 26355.71 32615.49 122999.68

Current assets, loans& advancesinventories 133001.44 163824.37 220890.34

Sundry debtors 95797.42 102206.15 118521.33

Cash & bank balances 8808.36 51892.05 17952.72

Loans & advances 78954.35 96046.23 79360.14

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Less Current liabilities &

provisions

Liabilities 186886.41 259206.57 303794.77

Provision 26808.17 36869.15 49032.63

Net current assets 102866.99 117892.71 83897.13

Miscellaneous

expenditure

968.82 517.43 431.45

TOAL 569932.09 632128.52 706504.05

ABSTRACT OF PROFIT&LOSS A/C

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FOR LAST 2 YEARS

(RS IN Lakhs)

PARTICULAR 31-3-09 31-3-10 31-3-2011INCOME

Sales and services 6,66,664.01 7,87,259.74 12,09,360.68

Less: Excise duty 68,556.64 62,788.69 97,589.78

OTHER INCOME 4,962.28 7,044.54 1,533.43

TOTAL 6,03,069.65 7,31,515.59 11,13,304.33

EXPENDITURE

Manufacturing and other

expenses

5,51,163.86 6,48,187.13 9,90,015.16

Depreciation, amortizationAnd impairment 17,841.42 20,410.79 26,743.10

Financial expenses 11,870.87 8,113.04 16,366.14

PROFIT BEFORE

EXCEPTIONAL ITEM

22,193.50 54,804.63 80,189.93

EXCEPTIONAL ITEM

Voluntary retirement scheme

Compensation amortised

1,348.87 327.15 -

PROFIT BEFORE TAX 20,844.63 54,477.48 80,189.93

provision for taxation

current tax - - 11,115.00

Deferred tax 1,245.00 12,110.00 5,935.00

Fringe benefit tax 600.00 - -

PROFIT AFTER TAX 18,999.63 42,367.48 63,129.93

Excess provision written back

Dividend 22.05 - -

Corporate dividend tax 3.75 - -

Balance profit from last year 50,227.38 48,230.19 57,744.98Transfer from:

Debenture redemption

Reserve

(2,958.33) 416.67 (5666.66)

General reserve (2,500.00) (10,000.00) (10,000.00)

TOTAL 63,794.48 81,014.34 1,06,041.57

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Proposed dividend 13,303.38 19,955.07 26,606.77

Corporate dividend tax thereon 2,260.91 3,314.29 4,316.28

Balance profit carried to B/S 48,230,19 57,744.98 75,118.52

Earning per share 1.43 3.18 4.75

BASIC ACCOUNTING POLICIES

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&

NOTES TO ACCOUNT

Basic Accounting Policies

The financial statement have been prepared to comply in all material

respects with the notified accounting standard by companies accounting

standard rules, 2006 and the relevant provision of the companies act, 156.

The financial statements have been prepared under the historical cost

convention on an accrual basis. The accounting policies have been

consistently applied by the company and are consistent with those used in

previous year

(1) ACCOUNTING CONVENTION:-

The financial statements are prepared under the historical cost

convention, on an accrual basis and in accordance with the applicable

accounting standard.

(2)FIXED ASSETS:-

Fixed assets are stated cost. Cost comprises of the purchase pride and

all other attributable costs for bringing the assets to its working condition for

its intended use.

(3)DEPRECIATION:-

Depreciation on fixed assets other than intangible assets is provided

on written down value method in accordance with the rates, prescribed in

schedule XIV to the companies Act, 1956.Individual assets acquired for less

than RS.9895/- are entirely depreciated in the year of acquisition.

Depreciation on fixed assets added/disposed off during rear has been

provided on pro-rata basis.

Lease premium and related costs are amortized over the lease period.

(4)EXPENDITURE DURING CONSTRUCTION PERIOD:-

Expenditure during construction period are include under capital

work-in-progress and the same are allocated to the respective fixed assets on

the completion of construction

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(5)FOREIGN CURRENCY TRANSACTION:-

Monetary assets and liabilities related to foreign currency transactions

remaining un settled at the end of the year, are restated at the closing

rate/forward rates as applicable.

(6)INVENTORIES:-

Inventories are valued of cost and estimated net realizable value

(a) Raw materials, Packing materials, Stores and Spares are valued at

weighted average cost method.

(b) The cost of finished goods and work-in-progress includes cost of

conversion and other costs incurred in bringing the inventories to their

present location and condition.

(7)INVENSTMENT:-Long-term investments are stated at cost after deducting provision, if

any, for permanent diminution in the value of investment Current

investments are stated at lower of cost and market.

NOTES TO ACCOUNTS

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Notes to Accounts

1. Share Capital

2. Fixed Assets

3. Loans and Advances include

4. Manufacturing and Other Expenses

5. Contracts on Capital Account

6. Contingent Liabilities

7. Earning in Foreign Exchange

8. Earnings Per Share

9. Deferred Taxes

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POINTS RELATED TO FINANCE AND ACCOUNT

FROM DIRECTORS AND AUDITORS REPORT

Point related to Finance and Account from Directors

Report

Financial and operational performance

Dividend

Transfer to General Reserves

Transfer to investor Education and protection fund

Management discussion and analysis

Directors

Particulars of Employees

Corporate Governance

Auditor

Conservation of Energy, Technology Absorption, ForeignExchange Earning and outgo

Environmental Protection and Occupational Health and

Safety Policy

Directors responsibility Statement

Acknowledgement

Point related to Finance and Account from Auditor

Report

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In their opinion, proper books of account required by

law have been kept by the company so far as appear from

their examination of such books.

The Balance Sheet, the Profit and Loss Account and

the Cash Flow Statement dealt with by this report are in

the agreement with the books of the account.

In their opinion, the Balance Sheet, the Profit and

Loss Account and the Cash Flow Statement dealt with by

this report comply with the accounting standard referred

to in sub-section (3C) of section 211 of the Companies

Act, 1956.

MARKET VALUE OF EQUITY AS ON THE DATE

The market value of Equity share of FAG Bearing India

Limited as on date 18th January, 2011 is as under:

Bombay Stock Exchange (BSE)

Price: 23.90

Changes: -0.40 (-1.66%)

High Price: 24.00

Low Price: 23.40

National Stock Exchange (NSE)

Price: 23.65

Changes: -0.40 (-1.66%)

High Price: 24.00

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Low Price: 23.40

MEANING OF RATIO ANALYSIS

Ratio is financial form should the comparison between two financial

terms".

It relationship between various related items in these financial

statements is established, they can provide useful clues to judge accurately

the financial health and ability of business to maximize the profit. This

relationship between related items of financial is thus, one number expressed

in form of return on paid up capital the net profit of the business is dividend

by the paid up share capital. The figure so obtain is the ratio. It the same is

multiplied by 100 a percentage rate of return on paid up capital is obtained

EXPRETION:-

1. In the form of percentage

2. In the form of proportion of the value

3. In the form of number of times

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IMPORTANCE OF RATIO ANALYSIS:-

In application to studying the rupee amount shown in the financial

statements, relationships between different items may be established by

computing various ratios. The relation between two related items of financialstatement is known as Ratio. A ratio is thus, one number expressed in terms

of other Ratios are particularly useful in comparing one years performance

with other years, as well as one companys performance with anothers. In

many cases the average ratios relating to companies in particular industries

are available, and an individual companys ratio may be compared with such

an average.

Ratios help to make qualitative judgments depending upon the

calculations made which are quantitative judgments. The ratio analysis

involves comparison for a useful interpretation of the financial statements. A

single ratio in itself does not indicate favorable or unfavorable condition. It

should be compare with some standard. Standard of comparison may

decided by the company or firm itself.

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It is helpful for another party as under.

Creditors

Bankers

Financial statement

Investors

Share holders and management

UTILITY OF RATIO ANALYSIS:-

1) PROFITABILITY:-

Useful information about the trend of profitability is available

from profitability ratios. The gross profit ratio, net profit ratio of return on

investment give a good idea of the profitability of business. On the basis of

these ratios, investors get an idea about the overall efficiency of business,

the management gets an idea about the efficiency of managers and bank as

well as other creditors draws useful conclusions about repaying capacity of

the borrowers.

2) LIQUIDITY:-

In fact, the use of ratios was made initially to ascertain the

liquidity of business. The current ratio, liquid ratio and acid test ratio will

tell whether the business will be able to meet its current liabilities as and

when they mature. Banks and other leaders will be able to conclude from

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these ratios whether the firm will be able to pay regularly the interest & loan

installments.

3) EFFICIENCY:-

The turnover ratios are excellent guides to measure the efficiency

of managers. e.g. the stock turnover will indicate how efficiently the sale is

being made, the debtors turnover will indicate the efficiency of collection

department and assets turnover shows the efficiency with which the assets

are used in business. All such ratios related to sales present a good picture of

the success or otherwise of the business.

4) INTER FIRM COMPARISON:-

The absolute ratios of a firm are not of much use, unless they are

compared with similar ratios of other firms belonging to the same industry.

This is inter-firm comparison, which shows the strength and weakness of the

firm as compared to other firms and will indicate corrective measures.

5) INDICATE TREND:-

The ratios of the last three to five years will indicate the trend in

the respective fields. For example, the current ratios of a firm are lower than

the industry average, but if the ratios of last five years show an improving

trend, it is an encouraging trend. Reverse may also be true. A particular ratio

of a company for one year may compare favorably with industry average

but, of its trend shows a deteriorating position, if is not desirable. Only ratioanalysis will provide this information.

6) USEFUL FOR BUDGETORY CONTROL:-

Regular budgetary reports are prepared in a business where the

system of budgetary control is in use. If various ratios are presented in these

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reports, if will give a fairly good idea about various aspect of financial

position.

7) USE FOR DECISION MAKING:-

Ratio guide the management in making some of the importationshow an unsatisfactory position, the management may decide to get

additional liquid funds. Even for capital expenditure decisions, the ratio of

return on investment will guide the management can be judged on the basis

and efficiency of each department can thus be determined.

CALCULATION OF RATIO ANALYSIS

(A) PROFITABILITY RATIO:

(1)Gross Profit Ratio: It is the basic measure of Profitability

of business. It expresses relationship between gross profits

earned to net sales.

Gross Profit Ratio= x 100

Years Gross Profit

(RS in laces)

Sales

(RS in laces)

Gross Profit Ratio

(In %)

2008-09 129751.64 598107.37 21.69 %

2009-10 160210.63 724471.05 22.11 %

2010-11 253234.17 1111770.90 22.78 %

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0

200000

400000

600000

800000

1000000

1200000

2008-2009 2009-2010 2010-2011

SALES

GP

Interpretation: This ratio shows the relationship between G.P and Sales.This ratio shows profitability of the company from pure trading activity. The

ratio is increase every day, so we can say. Company financial positions are

good.

2)Net Profit Ratio:

The net profit is obtained after charging operating Expenses,

interest, depreciation and taxes to gross profit.

Net Profit Ratio= x 100

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Years Net Profit

(RS in laces)

Sales

(RS in laces)

Net Profit Ratio

(In %)

2008-2009 18999.63 598107.37 3.18

2009-2010 42367.48 724471.05 5.85

2010-2011 63129.93 1111770.90 5.68

Interpretation: The net profit ratio is considering loss than previousyear. It implies that proportion of administrative and selling expenses have

rise considerably. This is not good for the company.

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3)Operating Ratio:

It is a ratio that shows relationship between cost of goods sold plus

operating expenses to sales. Operating expenses include

administration, selling and distribution expenses.

Operating Ratio: x 100

Years Sales

(RS in laces)

COGS

(Rs in laces)

Operating Exp

(RS in laces)

Operating

Ratio (in %)2008-2009 598107.37 462770.4 104022.49 94.76%

2009-2010 724471.05 559526.32 120250.87 93.83%

2010-2011 1111770.90 851623.4 169979.39 91.89%

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Interpretation: This ratio measures the proportion of an enterprise cost of

sales and operating expenses in comparison to its sales lower is the better for

the company

4) Expenses Ratio:

For the purpose of the ascertaining relationship between operating

expenses and net sales, expense ratios are computed. For example proportion

of selling expense or administration expenses or finance expenses in relation

to net sales is an expenses ratio.

Operating ExpensesExpense Ratio = ------------------------ x 100

Sales

Years Sales

(RS in lakhs)

Operating

expenses(RS in

lakhs)

Expenses ratio

(In %)

2008-2009 598107.37 91226.28 15.25%

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2009-2010 724471.05 111105.51 15.34%

2010-2011 1111770.90 152435.98 13.71%

Interpretation: Expenses ratio in 2011is decrease compare to the year

2009, 2010. So it is good for company because expenses ratio are very

important for analysis the profitability of the firm.

5)Return on Capital Employed

Perhaps the most widely used ratio for measuring the profitability

of any enterprise is return on Capital Employed. Profit is consider

in relation to capital employed.

Net Profit (EBIT)

Return on Capital Employed= ------------------------------- x 100

Capital Employed

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Years EBIT

(RS in lakhs)

Capital Employed

(RS in lakhs)

ROCE

(In %)

2008-2009 20844.63 301419.27 6.92%

2009-2010 38505 542235.47 7.10%

2010-2011 97892.85 652691.24 15%

Interpretation:Profit of company increase in second year but it is less in third year

which may be because of less stock turnover ratio in third year. As a

result the company cannot get higher return on capital provider.

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6)Return on Shareholder FundProfit is earned in business for ownersand so they are naturally interested in return they get on their money

invested in companys business.

Return on Shareholder Fund: x 100

Years Net Profit

(RS in lakhs)

Owner Fund

(RS in lakhs)

Return on Shareholder

Fund (In %)

2008-2009 18999.63 347389.9 5.47 %

2009-2010 42367.48 366875.8 11.55 %

2010-2011 63129.93 396296.21 15.93%

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Interpretation:It shows the overall profitability of funds supplied by long term share

holder taken together. It shows how much money left for sh.holder.

7) Return on equity share holder fund:-

It shows what percentage of profit is earned in the capital invested by

ordinary shares holder the ratio is ordinary share holders.

Return on equity share capital= P.A.T. - Pre. Dividend X 100

Equity share holder fund

Years PAT-PREF.DIV

(RS in lakhs)

Shareholder fund

(RS in lakhs)

Return on eq.sh/h

fund ratio

(in %)

2008-2009 18999.63 347389.9 5.47%2009-2010 42367.48 366875.81 11.55%

2010-2011 63129.93 396296.21 15.93%

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Interpretation: It shows how much money left for company ownered. It is

very important for the company

8) Earnings per Share: This ratio measures the profit available toequity shareholder on per share basis. It is not the Actual amount paid to

shareholder as dividend but is maximum.

Earnings per Share (EPS): profit available for eq.sh/h 100

No. of eq.share

Years Profit

available for

eq.sh/h

(RS in lakhs)

No. of Equity Share

(Rs in lakhs)

EPS

(In RS)

2008-2009 18999.63 13303.42 1.43 RS

2009-2010 42367.48 13303.42 3.18RS

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2010-2011 63129.93 13303.42 4.75RS

Interpretation: It shows comparison between loans fund. It low thatis suggest loan safe stable no advantages of trading on equity. It high

suggests that loan fund is very high.

9) DIVIDEND PER SHARE:-

It shows the dividend per share which shareholders of the company get

on their investment by the company declaration

DPS: Proposed dividend 100

No. of eq.share

Years Proposed No. of share DPS ratio

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divi.

(RS in lakhs)

(Rs in lakhs) (in RS)

2008-2009 13303.42 13303.42 1 RS

2009-2010 19955.07 13303.42 1.50RS

2010-2011 26606.77 13303.42 2 RS

Interpretation: It is increases in every year. It shows that better for the

company and also better for the share holder.

10)Price earning ratio: It shows the relationship between the market

price of the share and the earnings per share

P/E ratio: Market price of share

EPS

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Years Market price of

share

EPS P/E ratio

(in proportion)

2008-2009 25.2 1.43 17.62:1

2009-2010 40.93 3.18 12.87:12010-2011 64.65 4.75 13.61:1

Interpretation: the year 2008-2009 ratio is 17.62:1,which is dealing in

2009-2010 to 12.87:1 then after it is increase in 2010-2011 to 13.61:1 but,it

is not good for the company.

B)LIQUIDITY RATIO:

(11) CURRENT RATIO:-This is the most widely used ratio shows the proportion of Current Assets

to Current Liabilities. It is also known as Working Capital Ratio. This is a

measure of Short Term financial strength of the business and shows

whether the business will be able to meet its Current Liabilities as and when

they mature

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Current Ratio:

Years Current assets

(RS in lakhs)

Current liability

(RS in lakhs)

Current ratio

(in proportion)

2008-2009 316561.57 213694.58 1.48:1

2009-2010 413968.43 296075.72 1.40:1

2010-2011 436724.53 353827.40 1.24:1

Interpretation:the ideal ratio is 2:1.current ratio is lower than ideal ratio.

From 2008-2009 to 2010-2011 it is continuously decreasing.

12)Liquid Ratio

To remove the defect of the current ratio, Liquid ratio is used. It

variant of current which is designed to show the amount of funds

available to meet payment.

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Liquid Ratio:

Years Liquid Assets

(RS in lakhs)

Liquid Liabilities

(RS in lakhs)

Liquid Ratio

(in Proportion)

2008-2009 183560.13 213694.58 0.86:1

2009-2010 250144.43 296075.72 0.85:1

2010-2011 215834.19 352827.40 0.61:1

Interpretation:

Ideally current ratio is 1:1 in this current ratio in the year2008 is

very good and in the year of 2009 and 2010 is good but not best.

13)ACID TEST RATIO:-

The measure of absolute liquidity may be obtained by comparing onlycash and bank as well as readily marketable securities with Liquid

Liabilities. It is computed by dividing the value of Quick Assets by Liquid

liabilities

Quick Assets

ACID TEST RATIO= ------------------------ Liquid Liabilities

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Years Quick assets

(Rs in lakhs)

Liquid liab.

(Rs in lakhs)

Acid test ratio

(in proportion)

2008-2009 8808.36 213694.58 0.04:1

2009-2010 51892.05 296075.72 0.18:1

2010-2011 17952.72 352827.40 0.05:1

Interpretation:

In the ratio companys Cash, Bank and Investment is decreases in

every year but the liquid liabilities is increase every year so that the position

of the company is not good.

14)Proprietary Ratio

The Ratio shows the proportion of proprietors funds to total assets

employed in the business. The proprietors funds or shareholder

equity consist of share capital of share capital and reserve.

Proprietary Ratio:

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Years Owner Funds

(Rs in lakhs)

Total Assets

(Rs in lakhs)

Proprietary Ratio

(in %)

2008-2009 347389.90 782657.85 44.39 %

2009-2010 36675.81 927686.51 39.55%

2010-2011 396296.21 1058900 37.43%

Interpretation:

In all the three years the ratio is very slowly increasing, so theburden of loan to trade on equity, but at same time Owners Funds are

not utilized to purchased Total Assets.

15)DEBT EQUITY RATIO:-

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This ratio is only another form of proprietary ratio establishes

relationship between the outside long term liabilities and Owners

Funds. It shows the proportion of long term Eternal Equities & Internal

Equities i.e. proportion of funds by long term creditors and that provides

by shareholder or proprietors

Debt eq.ratio: long term debt 100

sh.h/fund

Years Long term debt

(Rs in lakhs)

Sh.h/fund

(Rs in lakhs)

Debt eq.ratio

(in %)

2008-2009 30441.33 347389.90 8.76%

2009-2010 71156.68 366875.81 19.4%

2010-2011 118229.75 396296.21 29.83%

Interpretation: This ratio is continuously increases it shows the

business is not stable & the companies have advantages of trading on

equity.

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16) Capital gearing ratio: This ratio expresses the proportion of

preference capital debenture and ordinary capital. In other words, it isratio of fixed interest and dividend bearing capital to ordinary capital.

Capital gearing ratio: fixed interest bearing capital

Ordinary capital

Years Fixed

int.bearing.capital

(Rs in lakhs)

Ordinary

capital

(Rs in lakhs

Capital

gearing

ratio

(in times)

2008-2009 30441.33 13303.42 2.29

2009-2010 71156.68 13303.42 5.35

2010-2011 118229.75 13303.42 8.89

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Interpretation: This ratio establishes a relationship between equity

capital including all reserves and undistributed profit & fixed cost

bearing capital.

C)Turnover ratio:

17) Debtors turnover ratio: The ratio showers the number of days

taken to collect the dues of credit sales. It shows the efficiency and

otherwise of the collection policy of the enterprise.

Debtors turnover ratio = Debtors +Bills payable X 360

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Credit sales

Years Debtor

(Rs in

lakhs)

Bills

payable

(Rs in

lakhs)

Credit sales

(Rs in

lakhs)

Ratio

(in days)

2008-2009 95797.42 40706.5

2

598107.37 82.16

2009-2010 102206.1

5

50476.6 724471.05 75.87

2010-2011 118521.3

3

56853.3

7

1111770.9

0

56.79

Interpretation: Debtors continuosly increasing since last three

years. It suggest no.of time within. Which company pay payment.

This ratio is good for the company

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18) CREDITORS RATIO:-

The Creditors Ratio gives us the number of days within which the

amount due for credit Purchase is payment. Similarly the number of days

within which we payment to our creditors for Credit Purchase is obtainedfrom Creditors Velocity

Creditors + B\P

Creditors Ratio = ------------------------------- x 360

credit Purchase

Years Creditors

(Rs inlakhs)

B/P

(Rs inlakhs)

Credit

purchase

(Rs in

lakhs)

Ratio

(in days)

2008-2009 111004.2 66124.93 468355.73 136.15

2009-2010 156175.2 76912.59 564260.42 148.71

2010-2011 212838.98 57901.55 858536.73 113.53

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Interpretation: It suggests no. of days within which company makes

payment. This ratio is 2009-2010 is 148.71 days and in 2010-2011 is

113.53 days. It is goods for the company

19)Total Asset Turnover Ratio:

The funds used in business are employed in both Fixed Assets and

Current Assets and Profit is earned with the help of both. Hence it

would be useful to known the proportion of Total Assets to Sales.

Total Assets Turnover Ratio:

Years Sales

(Rs in lakhs)

Total assets

(Rs in lakhs)

Ratio

(in times)

2008-2009 598107.73 782657.85 0.76

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2009-2010 724471.05 927686.51 0.78

2010-2011 1111770.90 1058900 1.05

Interpretation: This ratio is higher better for the business. The ratioof these company is continuously increasing. It is good for thecompany

20)Book Value Per Share

Book Value per Share:

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This ratio measures the profit available to equity

shareholder on per share basis. It is not the Actual amount

paid to shareholder as dividend but is maximum.

Earning per Share (EPS): Net worth

No of eq.share

Years Net worth

(Rs in lakhs)

No. of Equity Share

(Rs in lakhs)

EPS

(In Rs)

2008-2009 347389.90 13303.42 26.11

2009-2010 366875.81 13303.42 27.58

2010-2011 396296.21 13303.42 29.79

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Interpretation: it shows that value per share this ratio is compare with

market value of share if market value is lower the company safe.

LIMITATION OF RATIO ANALYSIS

1) Single year ratio have limited utility:

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The utility of ratio computed from the financial statement of one

year only is obviously limited.

2) Other factor must be considered:

While comparing ratio of different firms, it must be remember that

different firms follow different accountancy plans and policies.

3) Lack of Standard Ratio:

There is practically no standard ratio against which the actual

performance can be compared.

4) Other factors Important:

Financial result of business depend upon a number of factor such

as general economic condition and competition, local factor andthe policy adopted by management.

5) Ratio of two irrelevant Figures:

Ratio must be established between related matters. It is of no use if

ratios are found between two figures.

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COMMON SIZE OF BALANCE SHEET

particular 2008-

2009

% 2009-

2010

% 2010-

2011

source of funds

share

holder/fund

Capital 13303.42 2.33 13303.42 2.10 13303.42

Reserve &

surplus

334086.4

8

58.62 353572.39 55.93 382992.79

loans fund

Secure loan 30441.33 5.34 71156.68 11.26 118229.75

Unsecure loan 165373.0

6

29.02 149232.50 23.71 138596.73

deferred tax

liabi.

26343.69 4.62 38453.69 6.08 44388.69

foreigncurrenc

y monetary item

384.11 0.07 1245.01 0.2 -

TOTAL 569932.0 100 632128.52 100 706504.05

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9

application of

fund

fixed assets

Gross block 495327.2

2

86.91 61863.37 95.21 669188.87

less depreciation 155415.5

9

27.27 176907.45 27.98 205809.69

Net block 339911.6

3

39.64 424955.92 67.23 463379

Capital workin

Progress

99828.94 17.52 56146.97 8.88 35796.61

investment 26355.71 4.62 32615.49 5.16 122999.68

CA.loans

&advances

Investment 13301.44 23.34 163824.37 25.92 220890.34

Sundry debtors 95797.42 16.81 102206.15 16.17 118521.33

Cash & bank 8808.36 1.55 51892.05 8.21 17952.72

Loans&advance

s

78954.35 13.85 96046.23 15.19 791360.14

less CL &

provision

Current liability 186886.41

32.79 259206.57 41.01 303794.77

Provision 26808.17 4.7 36869.15 5.83 49032.63

Net current

assets

102866.9

9

18.05 117892.71 18.65 83897.13

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miss.expenditure 968.83 0.17 517.43 0.08 431.45

TOTAL 569932.0

9

100 632128.52 100 706504.05

COMMON SIZE OF PROFIT & LOSS A/CParticular 2008-2009 % 2009-2010 % 2010-2011 %

Sales 598107.37 100 704471.05 100 1111770.90 100

less COGS 462770.4 77.37 559526.22 77.23 8516234 76.60

Gross

profit

135336.97 22.63 164944.83 22.47 260147.5 23.40

lesss&d

exp.

31527.3 5.27 41299.04 5.7 51489.33 4.63

less

admi/exp.

59698.98 9.98 69806.47 9.64 100940.65 9.08

less

finan.exp.12795.51 2.14 9145.56 1.26 17543.41 1.58

Net profit 25729.85 4.3 39959.56 5.52 31765.45 2.86

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KEY RATIOS AND ITS COMPARISION WITH

INDUSTRIESName of the ratio 2008-2009 2009-2010 2010-2011

Gross profit 21.69% 22.11% 22.78%

Net profit 3.18% 5.85% 5.68%

Operating ratio 94.70% 93.83% 91.89%

Expenses ratio 15.25% 15.34% 13.71%

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Return on capital

employed

6.92% 7.10% 15%

Return on sh/h/fund 5.47% 11.55% 15.93%

Return on eq.fund 5.47% 11.55% 15.93%

Earning per share 1.43 rs 3.18 rs 4.75 rsDividend per share 1 rs 1.50 rs 2 rs

Price earning 17.62:1 12.87:1 13.61:1

Current ratio 1.48:1 1.40:1 1.24:1

Liquidity ratio 0.86:1 0.85:1 0.61:1

Acid test ratio 0.04:1 0.18:1 0.05:1

Proprietory ratio 44.39% 39.55% 37.43%

Debt eq.ratio 8.76% 19.4% 29.83%

Capital gearing 2.29:1 5.35:1 8.89:1

Debtors ratio 82.16 days 75.87 days 56.79 days

Creditors ratio 136.15 days 148.71 days 113.53 days

Total assets ratio 0.76 times 0.78 times 1.05 times

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CONCLUSION

As per this finance report I conclude that the company is doingexcellent work, I am very thankful to get a project of ASHOK LEYLAND

PVT LTD. And definitely prove benefits this project.

The financial position of the company is very good. And companys

social responsibility is very good. The company is making profit since many

years. And company is good for the share holder because company is to give

good dividend.

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BIBLOGRAPHY

three years of balance sheet

WWW.ASHOKLEYLAND.COM

Website:WWW.MONEY.CONTROL.COM

times of India

economic times

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annual report

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DECLARATION

I hereby declare that the grand project title ASHOK LEYLAND

PVT LTD is original to the best of our knowledge and has not been

published elsewhere. This is for the purpose of partial fulfillment of GujaratUniversity requirements for the awards of the degree of the Bachelor of

Business Administration.

Signature:

BHALODIYA KISHAN R.

Roll no.:- 13Class: - S.Y. B.B.A.

Division: - A

Documents

Kishan Finance Report