CHAPTER-1

INTRODUCTION

Meaning of Financial Analysis

The first task of financial analysis is to select the information relevant to the decision

under consideration to the total information contained in the financial statement. The second step

is to arrange the information in a way to highlight significant relationship. The final step is

interpretation and drawing of inference and conclusions. Financial statement is the process of

selection, relation and evaluation.

Features of Financial Analysis

To present a complex data contained in the financial statement in simple and

understandable form.

To classify the items contained in the financial statement inconvenient and rational

groups.

To make comparison between various groups to draw various conclusions.

Purpose of Analysis of financial statements

To know the earning capacity or profitability.

To know the solvency.

To know the financial strengths.

To know the capability of payment of interest & dividends.

To make comparative study with other firms.

To know the trend of business.

To know the efficiency of management.

To provide useful information to management.

Procedure of Financial Statement Analysis

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The following procedure is adopted for the analysis and interpretation of financial

Statements:-

The analyst should acquaint himself with principles and postulated of accounting. He

should know the plans and policies of the managements that he may be able to find out

whether these plans are properly executed or not.

The extent of analysis should be determined so that the sphere of work may be decided.

If the aim is find out. Earning capacity of the enterprise then analysis of income

statement will be undertaken. On the other hand, if financial position is to be studied

then balance sheet analysis will be necessary.

The financial data be given in statement should be recognized and rearranged. It will

involve the grouping similar data under same heads. Breaking down of individual

components of statement according to nature. The data is reduced to a standard form. A

relationship is established among financial statements with the help of tools &

techniques of analysis such as ratios, trends, common size, fund flow etc.

The information is interpreted in a simple and understandable way. The significance and

utility of financial data is explained for help indecision making.

The conclusions drawn from interpretation are presented to the management in the form

of reports.

Analyzing financial statements involves evaluating three characteristics of a company: its

liquidity, its profitability, and its insolvency. A short-term creditor, such as a bank, is primarily

interested in the ability of the borrower to pay obligations when they come due. The liquidity of

the borrower is extremely important in evaluating the safety of a loan. A long-term creditor, such

as a bondholder, however, looks to profitability and solvency measures that indicate the

company’s ability to survive over a long period of time. Long-term creditors consider such

measures as the amount of debt in the company’s capital structure and its ability to meet interest

payments. Similarly, stockholders are interested in the profitability and solvency of the company.

They want to assess the likelihood of dividends and the growth potential of the stock.

COMPANY PROFILE

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Chennai Port, the third oldest port among the 12 major ports, is an emerging hub port in

the East Coast of India. This gateway port for all cargo has completed 128 years of glorious

service to the nation’s maritime trade.

Maritime trade started way back in 1639 on the sea shore Chennai. It was an open road -

stead and exposed sandy coast till 1815. The initial piers were built in 1861,  but the storms of

1868 and 1872 made them inoperative. So an artificial harbour was built and the operations were

started in 1881.The cargo operations were carried out on the northern pier, located on the

northeastern side of Fort St. George in Chennai. In the first couple of years the port registered

traffic of 3 lakh tonnes of cargo handling 600 ships.

Being an artificial harbour, the port was vulnerable to the cyclones, accretion of sand

inside the basin due to underwater currents, which reduced the draft. Sir Francis Spring a

visionary skillfully drew a long-term plan to charter the course of the port in a scientific manner,

overcoming both man-made and natural challenges. The shifting of the entrance of the port from

eastern side to the North Eastern side  protected the port to a large extent from the natural

vulnerabilities. By the end of 1920 the port was equipped with a dock consisting of four berths in

the West Quays, one each in the East & South Quay along with the transit sheds, warehouses and

a marshalling yard to facilitate the transfer of cargo from land to sea and vice versa. Additional

berths were added with a berth at South Quay and another between WQ2 & WQ3 in the forties.

India’s Independence saw the port gathering development, momentum. The topography

of the Port changed in 1964 when the Jawahar dock with capacity to berth 6 vessels to handle

Dry Bulk cargoes such as Coal, Iron ore, Fertilizer and non hazardous liquid cargoes was carved

out on the southern side.

In tune with the international maritime developments, the port developed the Outer

Harbour, named Bharathi Dock for handling Petroleum in 1972 and for mechanized handling of

Iron Ore in 1974. The Iron ore terminal is equipped with Mechanized ore handling plant, one of

the three such facility in the country, with a capacity of handling 8 million tonnes. The Chennai

port’s share of Iron ore export from India is 12%. The dedicated facility for oil led to the

development of oil refinery in the hinterland. This oil terminal is capable of handling Suezmax

vessels.

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In 1983, the port heralded the country’s first dedicated container terminal facility

commissioned by the then prime minister Smt.Indira Gandhi on 18th December 1983. The Port

privatized this terminal and is operated by Chennai Container Terminal Private Limited. Having

the capability of handling fourth generation vessels, the terminal is ranked in the top 100

container ports in the world. Witnessing a phenomenal growth in container handling year after

year the port is added with the Second Container Terminal with a capacity to handle 1.5 M TEUs

to meet the demand. To cater to the latest generation of vessels and to exploit the steep increase

in containerized cargo the port is planning to welcome the future with a Mega Container

Terminal, capable of handling 5 Million TEUs expected to be operational from 2013.

The Chennai port is one among the major ports having Terminal Shunting Yard and

running their own Railway operations inside the harbor on the East Coast. The port is having

railway lines running up to 68 kms and handles 25% of the total volume of the cargo, 4360 rakes

(239412 wagons) during 2009-10.

The port with three Docks, 24 berths and draft ranging from 12m to 16.5m has become a

hub port for Containers, Cars and Project Cargo in the East Coast. The port has handled an all

time high of 61.06 Million tons of cargo registering an increase of 6.2% over previous year. An

increase of 10.14% in handling of cars from 273917 Units in the year 2009-10 when compared

with 248697 Units in the year 2008-09 and an increase of 6.39% in handling of containers from

1143373 TEUs in the year 2008-09 to 1216438 TEUs in the year 2009-10. The long term plan

for Chennai Port envisages that the Port will mainly handle 4C’s i.e. Containers, Cars, Cruise

and Clean Cargo.

Future Plans

Master plan for Port Railway, Realigning Rail and Road network.

Dedicated Elevated Expressway from Chennai Port to Maduravoyalupto NH4 has been

approved by the Government to enhance the hinterland connectivity.

Development of Ro-Ro Terminal and a Multi-level car parking facility with a capacity

of 5000 cars.

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Chennai Mega Container Terminal with a continuous quay length of 2 km with 18-22m

side along draft. Capable of handling ultra large container ships carrying over 15000

TEU’s.

The break water extension from existing outer arm will be utilized to develop deep draft

oil berth for handling VLCCs.

 PORT DETAILS:

Geographical Location

Latitude  - 13° 06’ N

Longitude  - 80° 18’ E

Climate  - Tropical

Time  - +5 Hrs. 30 Minutes

Temperature  -30° C Max. 18° C Min.

Annual Rainfall  - About 125 Cms.

Spring Tides  - 1.2 Metres

Water Area -420.00 acres (169.97 hectares)

Land Area - 586.96 acres (237.54 hectares)

Navigation Channel:

Entrance Channel

Soil - Predominantly sandy and silt

Length of Channel  - About 7 kilometres

Depth of Inner Channel  - 18.6m at chart datum

Depth of Outer Channel  - 19.2m at chart datum

Depth of Outer Channel  - 19.2m at chart datum

Swell Allowance  - 3.00 Metres.

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Width of Channel  - The width of channel gradually increases from

244m to 410m at the bent portion, then

maintains a constant width of 305m

Total Length of Breakwater:

Inner Harbour

Eastern Breakwater - 1325 m

Northern Breakwater  - 575 m

Outer Harbour

Eastern Breakwater  - 590 m

Northern Breakwater  - 460 m

Outer Arm  - 1000 m

Upper Pitch Revetment  - 950 m

Port Entrances:

Entrance in Bharathi Dock - 350 m

Entrance in Dr. Ambedkar Dock  - 125 m

Storage Facilities:

Transit Shed/over flow shed - 7 Nos. - 30,693 sq.mts 

Warehouse - 5 Nos. - 30,138 sq.mts

Container Freight Station - 3 Nos. - 40,644 sq.mts

Open space - 3,84,611 sq.mts

Container parking Yard  - 2,50,600 sq.mts

Mission & Vision

Mission:

Achieve excellence in Port operations with State-of-the-Art technologies.

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Enhance competence and enthuse workforce to maximize customer satisfaction.

Anticipate and adapt to the changing global scenario.

Act as a catalyst for sustained development of the Region.

Vision:

To be recognized as a futuristic Port with foresight.

Quality Policy:

Provide efficient, prompt, safe and timely services at optimum cost

Ensure quick turn round of vessels by providing facilities for efficient handling of cargo

Maintain total transparency in all our transaction of the and

Continually improve our services to meet the expectations of the port users, employees

and the society

INDUSTRY PROFILE

A port is a location on a coast or shore containing one or more harbors where ships can

dock and transfer people or cargo to or from land. Port locations are selected to optimize access

to land and navigable water, for commercial demand, and for shelter from wind and waves. Ports

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with deeper water are rarer, but can handle larger, more economical ships. Since ports

throughout history handled every kind of traffic, support and storage facilities vary widely, may

extend for miles, and dominate the local economy. Some ports have an important military role.

Distribution

Ports often have cargo-handling equipment, such as cranes (operated by longshoremen)

and forklifts for use in loading ships, which may be provided by private interests or public

bodies. Often, canneries or other processing facilities will be located nearby. Some ports

feature canals, which allow ships further movement inland. Access to intermodal transportation,

such as trains and trucks, are critical to a port, so that passengers and cargo can also move further

inland beyond the port area. Ports with international traffic have customs facilities. Harbour

pilots and tugboats may maneuver large ships in tight quarters when near docks.

Types

The terms "port" and "seaport" are used for different types of port facilities that handle

ocean-going vessels, and river port is used for river traffic, such as barges and other shallow-

draft vessels. Some ports on a lake, river (fluvial port), or canal have access to a sea or ocean,

and are sometimes called "inland ports".

A fishing port is a port or harbour for landing and distributing fish. It may be a

recreational facility, but it is usually commercial. A fishing port is the only port that depends on

an ocean product, and depletion of fish may cause a fishing port to be uneconomical. In recent

decades, regulations to save fishing stock may limit the use of a fishing port, perhaps effectively

closing it.

A "dry port" is a term sometimes used to describe a yard used to place containers or

conventional bulk cargo, usually connected to a seaport by rail or road.

A warm water port is one where the water does not freeze in winter time. Because they

are available year-round, warm water ports can be of great geopolitical or economic interest.

Such settlements as VostochnyPort, Murmansk and Petropavlovsk-Kamchatsky in

Russia, Odessa in Ukraine,Kushiro in Japan and Valdez at the terminus of the Alaska

Pipeline owe their very existence to being ice-free ports.

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A seaport is further categorized as a "cruise port" or a "cargo port". Additionally, "cruise

ports" are also known as a "home port" or a "port of call". The "cargo port" is also further

categorized into a "bulk" or "break bulk port" or as a "container port".

A cruise home port is the port where cruise-ship passengers board (or embark) to start

their cruise and disembark the cruise ship at the end of their cruise. It is also where the cruise

ship's supplies are loaded for the cruise, which includes everything from fresh water and fuel to

fruits, vegetable, champagne, and any other supplies needed for the cruise. "Cruise home ports"

are a very busy place during the day the cruise ship is in port, because off-going passengers

debark their baggage and on-coming passengers board the ship in addition to all the supplies

being loaded. Currently, the Cruise Capital of the World is the Port of Miami, Florida, closely

followed behind by Port Everglades, Florida and the Port of San Juan, Puerto Rico.

A port of call is an intermediate stop for a ship on its sailing itinerary, which may

include up to half a dozen ports. At these ports, a cargo ship may take on supplies or fuel, as well

as unloading and loading cargo. But for a cruise ship, it is their premier stop where the cruise

lines take on passengers to enjoy their vacation.

Cargo ports, on the other hand, are quite different from cruise ports, because each

handles very different cargo, which has to be loaded and unloaded by very different mechanical

means. The port may handle one particular type of cargo or it may handle numerous cargoes,

such as grains, liquid fuels, liquid chemicals, wood, automobiles, etc. Such ports are known as

the "bulk" or "break bulk ports". Those ports that handle containerized cargo are known as

container ports. Most cargo ports handle all sorts of cargo, but some ports are very specific as to

what cargo they handle. Additionally, the individual cargo ports are divided into different

operating terminals which handle the different cargoes, and are operated by different companies,

also known as terminal operators or stevedores.

Milestones in the Indian Port Sector

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1870 - Calcutta (Kolkata) Port is commissioned. The port which ranks among India’s oldest and

only riverine port is situated 232 kilometres upstream from Sandheads, the longest pilotage

distance in the world.

1875 - The first wet dock in India - Sasson Dock is constructed on the Bombay harbour and is

followed by the Prince’s and Victoria Dock in 1880 and 1888 respectively, setting off the

development of Bombay (Mumbai) port.

1881 - Madras (Chennai) port is commissioned, six years after the construction of the port was

proposed by the Madras Chamber of Commerce and after the foundation stone was laid in 1875

by the Prince of Wales King Edward II.

1908 - The Indian Ports Act 1908 - the first-ever comprehensive Indian port law to be enacted

for governing the administration of all ports in India.

1925 - Carriage of Goods By Sea Act was passed, which led adoption of uniform rules declaring

minimum rights, liabilities and immunities of a common carrier to be attached to bills of lading.

1933 -Visakhapatnam (Vizag) Port is commissioned as a commodity port for export of

manganese ore. The first major port to be set up along the coastline of Andhra Pradesh.

1948 - Dock Workers (Regulation of Employment) Act 1948 was enacted and laid the basis for

creation of Dock Labour Boards at various major ports like Mumbai, Kolkata, Chennai and

Visakhapatnam.

1955 - Kandla port is commissioned. The port located on the Gujarat coast was established to

substitute the Karachi port, which became part of Pakistan following the partition of India.

1958 - Merchant Shipping Act 1958 is passed to regulate the Indian shipping industry and define

provide measure of protection to coastal shipping.

1963 -Major Ports Trust Act 1963 passed by the Indian Parliament. The Major Port Trusts Act

lays the basis for an institutional framework for creation of a port trusts for each major port.

Goa, liberated from Portuguese rule becomes an integral part of India. The Mormugao (Goa)

port, on the West Coast is declared a major port.

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1966 - Paradip port incorporated as India’s Eighth Major Port.Indian Railways launch first-ever

Container Service” providing an integrated inter-modal door-to-door service

1971 - Cochin (Kochi) port received containers for the first time from a conventional general

cargo vessel of the American President Lines (APL)

1974 - New Mangalore port is incorporate as ninth major port on India’s West Coast. The State

of Karnataka gets its first major port. Tuticorin Port is incorporated as the 10th major port,

second major port in Tamil Nadu.

1976 - Dredging Corporation of India is set up by Government of India to undertake dredging

operation.

1977 - Calcutta Port Trust commissions Haldia Dock Complex as a satellite port. The port is 104

kilometres downstream of Calcutta.

1978 -Vadinar, a satellite port of Kandla located in Jamnagar district of Gujarat, is

commissioned.

1982 - India’s first-ever State-level maritime board – Gujarat Maritime Board (GMB) is formed

to undertake comprehensive development of minor and other intermediate ports of Gujarat.

1986 - Inland Waterway Authority of India (IWAI) is constituted under the IWAI Act, entrusted

with the responsibility of developing inland waterways in India.

1989 - India’s youngest and most modern major port – Jawaharlal Nehru Port (NhavaSheva Port)

at NhavaSheva, near Mumbai is commissioned in May, 1989

1991- Coastal Regulation Zone Act passed leading to creation of Coastal Regulatory Zone

Authority requiring compliance of all Greenfield port projects.

1993 - Multimodal Transportation of Goods Act is passed with a view to rationalize customs

documentation procedures as applicable to goods being moved through multiple modes of

transportation, involving road, rail, coastal movement etc.

1995 - The Government of Tamil Nadu converts the Tamil Nadu Port Department into Tamil

Nadu Maritime Board (TMB). The Board is entrusted with the responsibility for development of

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minor ports in the state. World Bank comes out with India Port Sector - Strategy Report in

March 1995 coming out with detailed recommendatory proposals on modalities of infrastructure

financing and port reforms roadmap.

1996 - Government announces path-breaking policy guidelines for the first time opening up port

sector for both overseas and domestic private sector investors. The Maharashtra Maritime Board

(MMB) is constituted in November 1996.

1997 - Port (Laws) Amendment Act was introduced to give teeth to the new policy guidelines on

private sector participation in port sector and a Tariff Authority for Major Ports (TAMP)

established to regulate tariffs for major ports

1999 - Gujarat Infrastructure Development Act passed by Gujarat government paving way for

privatization of port sector in the State. The first-ever BOT project involving private sector port

developer P&O Ports (Australia) - NhavaSheva International Container Terminal (NSICT)

becomes operational.

2000 - The Ministry of Shipping (holding charge for ports) is formed through bifurcation

erstwhile Ministry of Surface Transport. PSA Corporation, Singapore and SICAL jointly

establish India’s second private sector Container Terminal at Tuticorin Port

2002 - India’s first-ever corporatisedEnnore Port, near Chennai becomes operational. Global

tender invited for Vallarpadam International Container Terminal, Cochin; Offshore Container

Terminal, Mumbai Port, and conversion of dry bulk terminal into a container terminal,

Jawaharlal Nehru Port Trust (JNPT). JM Baxi Group & Dubai Port Authority (DPA) consortia

signs BOT agreement (VPT) to build Container Terminal in the outer harbor of Visakhapatnam

Port.

Ports in India:

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India has been rightly called a country of sub-continental proportions. This statement is

true not only in terms of the vast geographic expanse of the country but also its maritime trade,

which serves a vast land-locked hinterland that extends into Jammu & Kashmir in the North to

landlocked countries like Bhutan, Nepal and Tibet (China) and North Eastern regions. The

vastness of India’s Northern Gangetic plains, which encompass large agriculturally prosperous

states like Madhya Pradesh, Uttar Pradesh, Rajasthan, Punjab, and Haryana coupled with long

peninsular coastline of over 6,000 kilometres – shared by nine littoral states of Gujarat,

Maharashtra, Goa, Kerala, Tamil Nadu, Andhra Pradesh, Orissa and West Bengal – form part of

a formidable natural endowment, impregnated with the possibilities of economic growth that can

push up India as a significant global maritime trading nation.

Quite remarkably, some of India’s states, given the length of their coastline and many

natural deep harbours have a maritime economic potential, which is comparable to some of the

most favoured maritime nations of the world. The latent potential however, needs to be largely

tapped in terms of building extensive coastal shipping networks, inland waterway linkages to

hinterlands, coastal ferry services, cruise industry and other marine and offshore- based

industries. As borne out by the experience of maritime development being witnessed in case of

states like Gujarat, with about a dozen bustling ports and rapidly growing cargo traffic volumes,

the potential for development of several under-developed ports along the coastline are immense,

though some of the coastal states have been not very aggressive in pushing the development of

their coastline port industry and trade. Often major ports in the state have tended to dominate

market share of trade cargo originating from the regional hinterland,leaving little market space

for the smaller regional ports. Despite significant growth of several captive minor ports, the gap

between the inherent potential for development and actual performance of regional ports still

remains to be bridged as one reviews the performance of the various major and minor ports.

Major Port Profiles

Kandla Port

JNPT, NhavaSheva

Mumbai Port

Mormugao Port

New Mangalore Port

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Cochin Port

Tuticorin Port Trust

Chennai Port

Visakhapatnam Port

Paradip Port

Kolkata

Haldia

Minor Ports in Tamil Nadu

Tamil Nadu with a coastline of 992 kilometres has three major ports of TuticorinEnnore

and Chennai and two intermediate ports of Cuddalore and Nagapattinam and seven other minor

ports, which include the ports of Rameshwaram, Pamban, Kolachal, Kanyakumari and

Valinokkam. The State is known for high level of investment under implementation in various

industrial andinfrastructure projects, which signify good prospects for port development in the

coming years. The Tamil Nadu Maritime Board (TNMB) constituted in 1995 is responsible for

development and regulation of the ports sector in the state. The TNMB is conducting a detailed

study for formulating a master plan for port development in the State.

Total traffic handled at all the minor ports in Tamil Nadu grew from 0.2 million tonnes in

1990-91 to 0.5 million tonnes in 2001-02, representing an annualised growth rate of 11%. Two

of the liquid bulk handling SBM jetties of Thirukkadaiyar and PY-3 oil fields has handled

significant cargo volumes. Currently, around 0.35 million tonnes of crude oil, produced at the

PY-3 oil fields, are loaded for coastal exports to Chennai Port for Chennai Oil Refinery, while

Thirukkadaiyar handles naphtha imports for a captive power plant.

New Port Projects

The port of Thiruchopuram was to be developed for handling of 6.5 million tonnes of

annual crude imports and 2.8 million tonnes of products exports. The project was tied to the 6.0

mtpa refinery project of Nagarjuna Oil Corporation. However, given the current glut in refining

capacity in the country, the project is unlikely to come up in the near future.

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There are some proposals for setting up of captive facilities at few locations, such as the

proposal of Chennai Petroleum Corporation Limited (CPCL) to set up a permanent jetty facility

at Nagapattinam for receiving crude oil for its Cauvery basin refinery.

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Objective of the study

Primary Objective:

To study the segment wise financial performance of Chennai Port Trust.

Secondary objectives:

To analyze and identify the trend of future income.

To study the liquidity position through various working capital related ratio.

To analyze the asset position.

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NEED OF THE STUDY

The study is conducted with the help of finance department of Chennai Port Trust which

is located at Chennai.

The scope of the study is entitled towards analyzing the current status in management of

payables using recent financial statements of the company.

One of the most fundamental facts about business is that the financial analysis of the firm

shapes its financial structure. Planning and control are the two most important ingredients to a

Successful Business. A Business plan takes most of the guess work out of Business Strategy and

Control through solid financial analysis. Financial Data provides a way to gauge where you are

in your Strategic plan, telling you where changes in your plan are necessary. Because of this,

Financial data Analysis and Management are Vitally important to running a successful business.

Therefore in order to obtain a favorable financial structure, it is necessary to study the efficiency

of the firm.

Efficiency measurements imply prior knowledge of the input’s of an organization. To

increase the level of output for a company to study the operating efficiency of the firm. The main

problem in business that of making correct estimates for the future which cannot done unless

data representing changes over a period are systematically and scientifically analyzed.

The main purpose of the study is to identify the financial strength and weakness of the firm

by properly establishing relationship between the items of the Balance Sheet, Profit and Loss

account and Budget Estimate of the company.

The Vital need for this study is to obtain the present performance of the company. The

financial performance calculated is based on each and every activity of the company.

The study helps in improving the operation efficiency of the company and also helps in

finding the future expected income of the company. It also helps thereby preventing any loss due

to wasteful activities.

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CHAPTER-2

REVIEW OF LITERATURE

Financial Performance Analysis of Selected Software Companies

HAMSALAKSHMI, M.MANICHAM, Finance India Vol. XIX No,3, September 2005

The study has been undertaken to examine and understand the management of finance

playing a crucial role in growth. It is concerned with examining the structure of liquidity

position, leverage position and profitability position of selected thirty four software companies in

India quoted at BSEfora period of five years (1997-98 to 2001-2002). The study reveals that the

liquidity position and working capital were favorable during the period of study. Regarding

turnover ratios, the efficiency in management of fixed assets and total assets must be increased.

With respect to debt financing. Return on Investment and Return On Equity proved that the

overall profitability position of selected software companies had been increasing at a moderate

rate. The developments will create large domestic demand over the next few years.

A Study on Financial Performance of The Select SarvodayaSanghams in Tamil Nadu

N.MURUGA, Finance India Vol.XXIV NO.3,September 2010

Small-Scale and cottage industries plays significant role in the development of the rural

economy. Their role in integrating the rural economy with the urban economy in an agro- based

country like India is indispensable for the overall economic development of the country. These

industries by promoting rural entrepreneurship contribute significantly to the social and

economic development through labourabsorption , income distribution, poverty eradication, and

removal of regional economic imbalances. Khadi and Village Industries, constituent of cottage

industrial sector, playa very vital role in the rural economy by accommodating the surplus labour

force in the rural areas.Khadi and village industries activities are promoted and carried out by

various institutions such as co-operative institutions, public and private charitable trusts,

individual proprietors, small-scale and cottage industrial units etc. Khadi craft,

Khadigramodyogbhavans,andSarvodayaSanghams with eight decades of dedicated service stand

out among them.

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Short-term Solvency Position

The Current ratio of all the sanghams under study are well above the conventional

standard of 2:1 indicating high liquidity. This situation is very comfortable for the creditors. But

then, it indicates that the sanghams have locked up their funds in the current assets. The quick

ratio of the sanghams were much higher than the standard except KOSS. The sanghams have

locked-up their funds in current assets, especially in inventory, which is likely to have adverse

impact on their profitability. The structure of inventory revealed that there was a huge volume of

finisheds goods indicating problem of poor demand in the market.

The absolute liquidity ratio of the sanghams shows that the cash position of these

sanghams was weak and inadequate to meet the short-term obligations. A substantial portion of

the current assets has been in: the form of trade debtors and receivables affecting the turnover of

working capital A very high degree of liquidity is bad, as idle assets earn nothing and affect

profitability.

There was also an unstable position in regard to liquidity. Hence, it is concluded that the

liquidity management in these Sarvodayasanghams was poor.

Long-term Solvency Position

All the samples sanghams have used considerable proportion of debt in their total capital

funds. The proportion varied from 65 percent to 87 percent. The proportion of debt to the total

assets has, however, declined gradually and remained around one third in the total assets (35 per

cent in KOSS and 30 Per cent in PSS). The average proportion of reserves to total capital fund

varied between 61 per cent and 74 percent. The sanghams are not capital intensive. Yet have

employed higher amount of debt capital in their business which is mostly used as operation

capital. The higher proportion of debt capital affect the profitability of the sanghams. As it has to

service the debt. Reserves constitute a higher proportion in the total capital fund. The reason is

obvious, i.e. the sanghams being trust with service motive plough back the surplus.

All the sanghams are having better interest coverage capacity (26.67 times to 13.58

times),which is much higher than the standard of six to seven times. This could be attributed to

the decreasing trend in borrowing. Thus, there is no immediate threat to the long-term solvency

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of the sanghams. The ability of the sanghams to honour the long –term obligations of the

creditors was sufficient in terms of capital funds, total assets and surplus funds. The debt service

capacity of the sanghams was also good in terms of interest coverage ratio.

Profitability Position

The gross-profit ratio of the sample sanghams has increased from 5.04 per cent to 14.00

per cent with notable fluctuations in one or two years. The operating profit ratio of the sanghams

has also- increased during the study period (from 95.78 per cent to 99.59 per cent) Similarly, the

operating expenses ratio of the sanghams reveals an increasing trend from 2.51 percent to 12.38

percent with notable fluctuations in one or two years. All these that factory and administrative

expenses are not effectively managed by the sangham there has been a considerable increase in

the operating and administrative expenses all the three sanghams during the period under review.

The gross profit ratio while remained almost constant, the net profit ratio has shown a

fluctuating trend from 1.07 per cent to 0.17 per cent, especially in the later years under study.

This indicates that the management of the sangham has largely failed to bring down or control

the operational expenses especially administrative expenses. Therefore, it can be stated that the

high cost of production, inadequate demand for K & VI products and managerial competence

are the major reasons for the low net profit ratio in all the sample sanghams.

Profitability of the sanghams in terms of return on capital employed, return on capital

fund and return on total assets has shown a fluctuating but decling trend, especially in the last

four to five years. The results of these ratios imply that these sanghams are over capitalized. In

other words, the capital and other resources are not effectively and profitability utilized. This is

mainly due to the fact that the capital employed and the total assets were in the form of

permanent assets, which are not fully utilized the manufacturing process. The slow and declining

rates of inventory and debtors turnover also added to this problem. Hence, the profitability of the

sanghams is not in proportion to quantum of capital employed and the total assets used.

20

Predication of Financial Soundness

The technique score was used to predict the financial soundness of the sanghams. As per

the norm, the firm is considered as failing when score is below 1.21 and it is considered as

healthy when it is above 2.90. The financial health of the sanghams was not sound in almost all

the years under study. The values of score were between 1.23 and 2.90 in all the sanghams under

review indicating a critical and poor financial soundness. The score turned very worse especially

in the later years and it fell far below the standard prescribed, pointing the impending failure of

the sanghams. Out of the three sanghams under review, KASS has already gone in to the state of

bankruptcy, whereas the other two sanghams KOSS and PSS are likely to become bankrupt

within another two to three years if the same trend continues.

Liner programming- Product Profitability- Use of LPP

Liner programming is applied to find out the optllnum model pertaining to product IX. Four

different models are constructed to arrive at the required model, separately for textile and non-

textile products for the sample sanghams VIZ.,KASS,KOSS and PSS, which results in maximum

profit (more then the existing profit) from the existing level of operation. The models were run

with the following assumptions:\

The number of units produced and sold is same; as such there is no closing or opening

stock

The fast moving, slow moving and non-moving status of products can be identified based

on the average stock position.

The product mix can be changed by suitably modifying the proportion of product

combination

There is no possibility for bringing change in the levels of efficiency

The models run include:

Model:1 – Without introduction additional demand for products

Model:2- Dropping of non-moving and reducing the quantum of slow- moving products

Model:3- Modifying the product mix based on the customer base of product and

21

Model:4 – A variant of the third model with altered proportion of product mix.

From the results of linear programming models it is found that in the case of KASS the

model 4 for textile-products and model 3 for non-textile products are profitable . Model 3 for

both textile products and non-textile products are suitable in the case of KOSS. Model 4 both

in case of textile-products and non-textile products are profitable to the PSS. Therefore, the

models may be considered for implementation as these product mixes yield better results.

Chien Ho and Song Zhu, 2004

Investigated the effectiveness of Greek banks according to their asset size. They used in their

study if multi criteria methodology to classify Greek banks according to the return and

operating factors and shown the difference of the bank’s profitability and efficiency between

small and large banks.

Elizabeth Duncan and Elliot,2004

Showed in their study that most previous studies considering company performance

evaluation focus merely on operational efficiency and operational effectiveness which might

directly influence the survival of the company. By using an innovative two stage data

enveloped analysis model in their study, the empirical result of this study is that a company

with better efficiency does not allows mean that it has better effectiveness. A proper in the

difference of efficiency, customer service, a financial performance among Australian

financial institution.

English M and Talaring, 1992

Showed that all financial performance measures an interest margin, Return on asset and

capital adequacy all positively correlated with customer service quality score.

Generally the concept of efficiency can be regarded as the relationship between output of

system and the corresponding input used in their production. Within the financial efficiency

literature, efficiency is traded as a relative measure which deflects the derivation from

maximum attainable output for a given level of input.

22

CHAPTER-3

RESEARCH METHODOLOGY

Research methods

It denotes methods or techniques which are used by the researcher while performing the

research operations.

Research methods can be put in three groups:

1. Collection of data

2. Application of statistical techniques.

3. Evaluating the accuracy of the result obtained

Research methodology

Research methodology is the way to systematically solve the research problem. Research

methodology has many dimensions and research methods constitute a part of that.

Definition:

According to Clifford Woody, “Research comprises defining and redefining problems,

formulating hypothesis or suggested solutions calculating organizing and evaluating data,

making deductions and reaching conclusions and at last, testing the conclusions to determine

whether they fit the formulating hypothesis”

Research design for this study Analytical Research Design

Analytical research is the type of research where the research has to use facts or

information’s already available and analyzes these to make a critical evaluation of materials .

Analytical research attempts to explain why and how. It usually concerns itself with

cause-effect relationships among variables. The researcher attempts to analyze the situation and

make critical evaluation.

23

Source of information

There are numerous possible sources of data.The selection of the source of data for a particular

study is important. It depends on the research objectives. Generally the source of data is

classified into two categories

Primary data

Secondary data

The data used for this study were secondary in nature

Secondary data

Secondary data consists of information that already exists. The data collected from the

purpose of this analysis is secondary. There was no need for collecting primary data as the study

involves analysis of data available. The data has been collected through the annual report and

statement available with the company. The study has been conducted for a period of four years

starting from 2006 to 2010.

Balance sheet

Profit and loss account

Other financial statements

Tools used for data analysis

Variance analysis

Linear Regression

Overhead variance analysis

24

VARIANCE ANALYSIS:

A variance is defined as the difference between the actual amounts and the standard

amounts. Variance can be calculated for both costs and revenues. Variance analysis in

managerial accounting is basically associated with the outcome of the planned and actual results

and the effects of their differences among the routine performance of a company.

LINEAR REGRESSION:

Linear regression analyzes the relationship between two variables, X and Y. For each

subject (or experimental unit), know both X and Y. And we want to find the best straight line

through the data. In some situations, the slope and/or intercept have a scientific meaning. In other

cases, we use the linear regression line as a standard curve to find new values of X from Y, or Y

from X.

In general, the goal of linear regression is to find the line that best predicts Y from X.

linear regression does this by finding the line that minimizes the sum of the squares of the

vertical distances of the points from the line.

Note that linear regression does not test whether our data are linear. It assumes that our

data are linear, finds the slope and intercept that make a straight line best fit our data.

The trend equation is Y=a+b(x)

Where a=∑ Y/N

b=∑XY/∑X2

25

CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

4.1 Table Statement showing Operating Income for the year 2007-08(Rs. In lakhs)

Particulars 2007-08

Actual Revised Estimates

Variance Percentage Remark

Cargo handling &

Storage charges 28644.43 25769.00 2875.43 11.15 Favourable

Port & Dock 14695.87 15070.70 -744.92 -4.92 unfavourable

Railway earnings 5073.98 4575.00 498.98 10.90 Favourable

Estate rentals 2471.15 2530.00 - 58.85 -2.32 unfavourable

Container handling 11924.02 9617.43 2306.59 23.98 Favourable

Total Operating Income 62809.45 57472.13 4877.23 38.78

Source: Secondary data

4.1.1 Chart showing Operating Income for the year 2007-08

cargo handling & storage charges

Port & Dock Railway earnings Estate rentals Container handling-1000

-5000

50010001500200025003000

2875.43

-744.92

498.979999999999

-58.85

2306.59Variance

Variance

Interpretation:

With reference to the above table it indicates that the budget variance for Operating Income for cargo handling storage charges and container handling and Railway earnings are favourable and others is unfavourable. Container handling are highest variance is Rs.2875.43 and port and dock is lowest variance Rs.744.92.

26

4.2 Table Statement showing Operating Income for the year 2008-09(Rs. In lakhs)

Particulars 2008-09

Actual Revised Estimates

Variance Percentage Remark

Cargo handling & storage

charges

31891.93 29422.00 1869.93 6.35 favourable

Port & Dock 16951.27 15430.00 1521.27 9.85 Favourable

Railway earnings 4834.60 5205.00 -371.00 -7.67 Unfavourable

Estate rentals 1862.85 2537.30 -674.45 -36.20 Unfavourable

Container handling 11608.73 13631.70 -2022.97 -17.42 Unfavourable

Total Operating Income 67149.38 66226.00 322.78 -45.09

Source: Secondary data

4.2.1Chart showing Operating Income for the year 2008-09

Cargo han

dling &

storag

e charg

es

Port & Dock

Railway

earn

ings

Estate

rental

s

Container

handlin

g

-2500-2000-1500-1000

-5000

500100015002000

1869.93 1521.27

-371-674.45

-2022.97

variance

Variance

Interpretation:

With reference to the above table it indicates that the budget variance for Operating Income for cargo handling storage charges and port and dock are favourable and others is unfavourable. Cargo handling storage charges are Rs.1869.93 is highest variance and container handling is lowest variance is Rs.-2022.97

27

4.3. Table Statement showing Operating Income for the year 2009-10(Rs. In lakhs)

Particulars 2009-10

Actual Revised

Estimates

Variance Percentage Remark

Cargo handling & storage

charges

32830.75 33743.00 -912.25 -2.77 Unfavourable

Port & Dock 19597.93 17655.38 1942.55 11.00 Favourable

Railway earnings 4271.93 4962.20 -371.00 -8.68 Unfavourable

Estate rentals 1668.15 1352.18 188.35 13.92 Favourable

Container handling 13467.15 12682.24 784.91 6.18 Favourable

Total Operating Income 71835.05 76300.00 1632.66 19.71

Source: Secondary data

4.3.1 Chart showing Operating Income for the year 2009-10

-1000-500

0500

100015002000

-912.25

1942.55

-371188.35000000

0001784.91

Variance

Variance

Interpretation:

With reference to the above table it indicates that the budget variance for Operating Income for port and dock ,estate rental and container handling are favourable and others is unfavourable. Port and dock are highest is Rs.1942.55 and cargo handling are lowest variance is Rs.-912.25.

4.4 Table Statement showing Operating Income for the year 2010-11

28

(Rs. In lakhs)Particulars 2010-11

Actual Revised

Estimates

Variance Percentage Remark

Cargo handling & storage

charges

27934.17 35698.20 -7764.03 -27.78 unfavourable

Port & Dock 19110.63 20567.50 -1456.87 -7.63 Unfavourable

Railway earnings 2867.79 4282.00 -1414.21 -49.31 unfavourable

Estate rentals 1880.97 1856.50 24.47 1.30 Favourable

Container handling 16597.57 14095.80 2501.77 15.07 Favourable

Total Operating Income 68391.131 76500.00 -8108.86 -68.35

Source: Secondary data

4.4.1 Chart showing Operating Income for the year 2010-11

cargo handling,&storage

charges

Port & Dock Railway earnings Estate rentals Container handling

-8000

-6000

-4000

-2000

0

2000

4000

-7764.03

-1456.87 -1414.21

24.47

2501.77

variance

Interpretation

With reference to the above table it indicates that the budget variance for Operating Income for estate rental and container handling are favourable and others is unfavourable. Container handling are highest is Rs.2501.77 and cargo handling are lowest variance is Rs.-7764.03.

4.5 Table statement showing Operating Income for the year 2011-12

29

(Rs. In lakhs)Particulars 2011-12

Departments Actual Revised

Estimates

Variance Percentage Remark

Cargo handling, & storage

charges

22963.15 22652.00 311.15 1.37 Favourable

Port & Dock 17518.72 17900.00 -381.28 -2.17 Unfavourable

Railway earnings 2219.83 1594.00 625.83 39.26 Favourable

Estate rentals 1711.74 1930.00 -218.26 -12.75 Unfavourable

Container handling 18297.20 18132.00 165.20 0.91 Favourable

Total Operating Income 62710.64 62181.00 529.64 26.64

Source: Secondary data

4.5.1 Chart showing Operating Income for the year 2011-12

-4000

400800

311.15

-381.28

625.83

-218.26

165.2

Variance

Variance

Interpretation

With reference to the above table it indicates that the budget variance for Operating Income for cargo handling, Railway earning and container handling are favourable and others is unfavourable. Railway earning are highest is Rs.625.83 and Port and dock are lowest variance is Rs.-381.28

30

4.6 Table showing Comparative Budget Deviation Analysis for Operating Income

Department Deviation (in %)

2007-08 2008-09 2009-10 2010-11 2011-12

Cargo handling, & storage

charges

11.15 6.35 -2.77 -27.78 1.37

Port & Dock -4.92 9.85 11.00 -7.63 -2.17

Railway earnings 10.90 -7.67 -8.68 -49.31 39.26

Estate rentals -2.32 -36.20 13.92 1.30 -12.75

Container handling 23.98 -17.42 6.18 15.07 0.91

Total Operating Income 38.78 -45.09 19.71 -68.35 26.62

Source: Secondary data

4.6.1 Chart Showing Comparative Budget Deviation Analysis for Operating Income

2007-08 2008-09 2009-10 2010-11 2011-12

-50

-40

-30

-20

-10

0

10

20

30

40

cargo handling, & storage charges Port & DockRailway earningsEstate rentalsContainer handling

Interpretation

With reference to the above chart is indicates that the budget Deviation for Operating Income for during the year 2007-08 , 2009-10 and 2011-12 are favourable and others is unfavourable. 2007-08 are highest deviation 38.78% and 2010-11 are lowest deviation is Rs. -68.35.

31

LINEAR REGRESSION

To find out the future of the company

The trend equation is Y=a + b(x) …………… 1

Where a= ∑Y /N ………….…2

b= ∑ XY∑ X 2

……….……3

Table showing the Linear regression

Year Income X XY X^2

2006 43169.4 -2 -86339 4

2007 53497.2 -1 -53497 1

2008 62809.4 0 0 0

2009 67149.4 1 67149.4 1

2010 71835 2 143670 4

2011 68391.1 3 205173 9

TOTAL 366852 3 276157 19

Substitute the values of ∑X2, ∑Y, ∑XY in equation “2” & “3”

We get,

a = 366852

6

a = 61142

b = 276157

19

b = 14534.58

Equation “1” becomes,

Y= 61142 + 14534.58(X)

32

2006 2007 2008 2009 2010 2011 2012 2013 20140

20000

40000

60000

80000

100000

120000

140000

160000

Linear Regression

Income

YEAR

INC

OM

E

Charting showing the future income of the company

From the above table, income of the company for six year is taken as “Y”.

In order to project the future income of the company we can use the statistical formula for trend

equation which is given below:

Y= a+ b (X)

Here a = 61142 & b = 14534.58Finding the income for the year 2012 we can take X= 4

Y= 61142 + 14534.58(X)

Y=119280.2

Finding the income for the year 2013 we can take X= 5

Y= 61142 + 14534.58(X)

Y=133814.8

Finding the income for the year 2014 we can take X= 6

Y= 61142 + 14534.58(X)

Y=148349.4

INFERENCE

It can be inferred that the company income is estimated to 119280.2 in the year 2012 and

113814.8 in the year 2013 and 148349.4 in the year 2014.

33

OVER HEAD VARIANCEANALYSIS

Variance is defined as the difference between actual and the standard amounts.

Total expenditure variance

Fixed cost overhead variance

Variable cost overhead variance

Semi variable cost overhead variance

Total expenditure variance

Formula:

Total expenditure variance = Revised total overhead – Actual total overhead

Fixed cost overhead variance

Formula:

Fixed cost overhead variance = Budgeted fixed overhead – Actual fixed overhead

Variable cost overhead variance

Formula:

Variable cost overhead variance = Budgeted variable overhead – Actual variable overhead

Semi variable cost overhead variance

Formula:

Semi variable cost overhead variance = Budgeted semi variable overhead – Actual semi variable

overhead

34

Civil Engineering Department

Table showing the Civil Engineering Department

Year Total Expenditure

Variance

Fixed Expenditure

Variance

Variable Expenditure

Variance

Semi Variable Expenditure

Variance2006-2007 4914-3620.73

=1293.272908.2-2687.04

=221.161257.35-721.04

=536.31635.45-218.29

=417.162007-2008 5611-4628.14=

982.862996.32-3406.44=

(416.12)1344.58-1013.68

= 330.9276.1-207.53=

68.572008-2009 7610-5381.36=

2228.642965.88-4047.69=

(1081.76)1445.97-1061.87

= 384.1290.95-254.97=

35.982009-2010 6031-4771.01=

1259.994444.72-1806.18=

2638.541714.58-100.3=

1614.2825.35-11.88=

13.47

Inference

From the above table it is inferred that the total expenditure variance is good for the year 2007-

2008 (i.e) 982.86 and the fixed expenditure variance is adverse for the year 2008-2009 with

(1081.76) and the variable expenditure variance is adverse for the year 2008-2009 with (384.1)

and semi variable is good for the year 2009-2010 (i.e) 13.47.

35

Accounts Department

Table showing the Accounts Department

Year Total Expenditure

Variance

Fixed Expenditure

Variance

Variable Expenditure

Variance

Semi Variable Expenditure

Variance2006-2007 4080-3963.9=

116.11190.65-

1131.6=59.054.95-32.19=

(27.24)10.85-8.11= 2.74

2007-2008 4177-4254.8= (77.8)

1239.85-1416.15= (176.7)

64.5-68.45= (3.95)

12.35-10.03= 2.32

2008-2009 456-668.29=(105.71)

1221.2-1536.56= (315.36)

87.2-153.21= 66.01

10.03-9.59=.44

2009-2010 4972-4771.01= 200.99

1507.60-1783.63 = (276.03)

106.3-100.3= 6 12.05-11.88=017

Inference

From the above table it is inferred that the total expenditure variance is adverse for the year

2008-2009 (i.e) 105.29 and the fixed expenditure variance is adverse for the year 2008-2009 with

(315.36) and the variable expenditure variance is adverse for the year 2008-2009 with (66.01)

and semi variable is good for the year 2007-2008 (i.e) 2.32.

36

Mechanical and Electrical Department

Table showing the Mechanical and Electrical Department

Year Total Expenditure

Variance

Fixed Expenditure

Variance

Variable Expenditure

Variance

Semi Variable Expenditure

Variance2006-2007 12250-12267.63

=(11.63)6451.85-9835.04

=(3383.19)1645.8-2025.5

=(379.7) 320.45-401.07

=(80.62)2007-2008 13296-13817.98

= (521.98)9703.82-11278.25

=(1574.43)2152.13-2090.5

=(61.63)418.95-449.23

=(30.28)

2008-2009 16743-15664.35 =1078.65

10262.99-12575.63 =(2312.64)

3596.75-2673.58 =923.17

60.26-414.33 =(354.07)

2009-2010 17038-16271.49 =766.51

1101.85-13607.86 = (2506.01)

3619.2-2650.61 =(968.59)

408.35-13.02 =395.33

Inference

From the above table it is inferred that the total expenditure variance is adverse for the year

2007-2008 (i.e) 521.98 and the fixed expenditure variance is adverse for the year 2006-2007 with

(3383.19) and the variable expenditure variance is adverse for the year 2009-2010 with (968.59)

and semi variable is adverse for the year 2007-2008 (i.e) 354.07.

37

Traffic Department

Table showing the Traffic Department

Year Total Expenditure

Variance

Fixed Expenditure

Variance

Variable Expenditure

Variance

Semi Variable Expenditure

Variance2006-2007 6630.00-

6538.66=91.346210.3-6287.46

=(77.16)19.95-41.99

=(22.04)92.2-208.97 =(116.77)

2007-2008 6838-7872.22 =(1034.22)

6885.3-7639.08 =(753.78)

97.7-50.82 =46.88

95-168.75 =(73.75)

2008-2009 7914-8256.76 =(342.76)

6930.78-8093.14 =(1162.36)

97.37-40.96 =56.41

95.25-123.15 =(27.9)

2009-2010 8720-10112.23 =(1392.23)

7937.3-9763.27 =(1825.97)

116-72.57 =43.43

221.67-110.55 =111.12

Inference

From the above table it is inferred that the total expenditure variance is adverse for the year

2009-2010 (i.e) 1392.23 and the fixed expenditure variance is adverse for the year 2009-2010

with (1825.97) and the variable expenditure variance is adverse for the year 2006-2007 with

(22.04) and semi variable is adverse for the year 2007-2008 (i.e) 116.77.

38

Marine Department

Table showing the Marine Department

Year Total Expenditure Variance

Fixed Expenditure

Variance

Variable Expenditure

Variance

Semi Variable

Expenditure Variance

2006-2007 3126-2755.46 =370.54

1730.35-1691.53 =38.82

385.3-6.53 =378.77

8-3.48 =4.52

2007-2008 3709-3431.28 =277.2

1760.52-2129.08 =(368.56)

1442.03-1794.03 =(352.8)

10-10.56 =(.56)

2008-2009 4469-3939.76 =529.44

1789.15-2483.38 =(694.2)

2024.75-1409.56 =615.19

17.1-10.43 =6.67

2009-2010 8139.6661.23 =1477.77

3530.44-4768.71 =(1238.27)

2800.95-1875.3 =925.65

31.11-17.22 =13.89

Inference

From the above table it is inferred that the total expenditure variance is adverse for the year

2009-2010 (i.e) 1392.23 and the fixed expenditure variance is adverse for the year 2009-2010

with (1825.97) and the variable expenditure variance is adverse for the year 2006-2007 with

(22.04) and semi variable is adverse for the year 2007-2008 (i.e) 116.77.

39

CHAPTER-5

FINDINGS

By using the linear regression it is projected that the expected company income is

estimated to 119280.2 in the year 2012, 133814.8 in the year 2013 and 148349.4 in the

year 2014.

From the budget variance table of Operating Income for cargo handling storage charges

and container handling and Railway earnings are favourable and others is unfavourable.

Container handling are highest variance is Rs.2875.43 and port and dock is lowest

variance Rs.744.92 in the year 2007-2008

From the budget variance table of Operating Income for port and dock ,estate rental and

container handling are favourable and others is unfavourable. Port and dock are highest

is Rs.1942.55 and cargo handling are lowest variance is Rs.-912.25 in the year 2009-

2010.

From the budget variance table of Operating Income for estate rental and container

handling are favourable and others is unfavourable. Container handling are highest is

Rs.2501.77 and cargo handling are lowest variance is Rs.-7764.03 in the year 2010-2011.

From the budget Deviation table of Operating Income for during the year 2007-08 , 2009-

10 and 2011-12 are favourable and others is unfavourable. 2007-08 are highest deviation

38.78% and 2010-11 are lowest deviation is Rs. -68.35.

The total expenditure variance is good for the year 2007-2008 (i.e) 982.86 and the fixed

expenditure variance is adverse for the year 2008-2009 with (1081.76) and the variable

expenditure variance is adverse for the year 2008-2009 with (384.1) and semi variable is

good for the year 2009-2010 (i.e) 13.47 in the Civil Engineering department

40

SUGGESTIONS:

The company should have to concentrate more on diversified investment.

The company should have to concentrate in reducing the expenses in all aspects

When comparing to the last year the cash position of the company is higher so the

company should maintain the same to meet its liabilities.

When comparing to the last five years the current financial position of the company is

low so the company should improve the financial status.

The company can reinvest its retained earnings in its core business to increase its profit

and its asset position.

41

CONCLUSION

The overall position of the company when compared to the previous year is weak. The profit of

the company decreased in the current year. The liquidity position of the company is average. The

net cash and cash equivalent of the company is decreased in the current year. When compared to

the last five years the company has continuously increased the profit randomly but the current

year profit is less when compared to the previous years.

42

BIBLIOGRAPHY

Reference books:

Financial management by M.Y.KHAN & P.K.JAIN

Annual reports of the Chennai Port Trust:

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

43