Vimal Dairy Mba

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A

PROJECT REPORT

ONRATIO ANALYSIS

OF

VIMAL DAIRY LTD,

PALAVASANA

SUBMITTED BY:- GUIDEDBY :

PATEL DHAVAL RMr.Jignesh pandya

MBA-II

ROLL NO - 12

SUBMITTED TO:-

SWAMI VIVEKANAND MBACOLLEGE,

VEDA

AFFILIATED TO:-

GUJARAT TECHNOLOGY UNIVERCITY,

AHMEDABAD

Academic year-2010-11


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PREFACE

In this era of globalization where every moment the world is moving

one step ahead, so for a management student M.B.A program has

become a key to success. This course cultivates skills and knowledge in

students so that they have to ability to think differently to be a successful

manager so that they compete this global market.

Now a days, Management course are provide managerial knowledge

in which they provide theoretical knowledge and other is practical

knowledge. A classroom teaching gives the theoretical knowledge while

industrial training gives an opportunity to take knowledge of practical

aspects.

I am studying in M.B.A SEM II., in which we are required to prepare

grand project report. It was wonderful experience during the industrial

training and I have come to know that there is big gape between

theoretical and practical knowledge that I learnt in practically.

I have selected VIMAL DAIRY LTD MEHSANA for practical

company all over. It is very beneficial to the many company and dairy. It

was a good experience to know the practical site ofVIMAL DAIRY LTD

MEHSANA industries. I have tried my almost efforts to present this

report. If I had made any mistake or written any wrong information which

has been unclosed in this report, I ask your pardon.


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I have prepared the report of VIMAL DAIRY LTD

MEHSANA on my belief, idea, understanding and observation.

I have tried to comprise all the important information in presenting report.

ACKNOWLEDGEMENT

I am over whelmed while expressing my sense of gratitude towards

all those who helped and guided me during the course of this project

report.

Personally I am thankful to SWAMI VIVEKANAND MBA COLLEGE

that I had the opportunity be involved in such industrial training

experience ofVIMAL DAIRY LTD. MEHSANA. I am sure this report and

work behind it would be appreciated by all concern.

I am really thankful to VIMAL DAIRY LTD MEHSANA forproviding co-operation and giving me a fundamental information about

project. I am also thankful to managing director who gave me the

permission for training in the company. I am also thankful to mayur sir

who providing information regarding company.

I am very thankful to our Head of department Mr.APOORVA

RAVAL and my project guide MR.JIGNESH PANDYA for providing their

better co-operation and assistance in preparing my dream project report.

Last but not the least I would like to think those who helped me

directly or indirectly in this academic endeavor.


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PATEL

DHAVAL R

EXECUTIVE SUMMARY

I visited Vimal Dairy ltd. I am my great experience to get

knowledge what happened in real life of business. In production

department, I can know the products, production process, and quality

policy of the Vimal Dairy ltd. I can also know that which kind of facilities

provided to the workers by the Vimal Dairy ltd. In marketing department I

can know the marketing, marketing structure, export of the company

product and pricing policy.

The dairy has not increased its authorized capital during the year.

But in this year dairy can change its authorized capital of Rs 77699697. The

subscription of share capital is increased capital is increased during the

year and stood at 25 lakhs as on 31/3/2009.Thus the union is going to reach

at the fully subscription of authorized capital. The union is also prepares a

new plant with newly adopted technology.

In finance department, I can know that the finance and finance

structure of the company. In this report the make the different types of


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the ratios which show the good or bad position of the business.

And we find the many types of the ratio in which included the

liquidity ratio, leverage ratio, coverage ratio. This all the ratio the liquidity

ratio helps to know the company is able to their liquidity or not.

During the year 2008-2009 the dairy has made less growth

compare year 2007-2008, the net profit is increased to Rs 5188123 at

2009 form 6300501 at 2008 during the year. The purchasing expenses in

2009 are higher than previous year but the operating expenses are

decreased which, helps to generate more revenue.

The profitability ratio shows the profitability of the firm as well as

the leverage ratio is also helps to the firms return in their business. After

the entire ratio analyzed we know the firms financial position is quit good.

For preparing the project report we use the annual report as well as

the book of financial management and also use the book of company

account and I also used the web site of the company.


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CONTENT

Sr.no. Particular Page no.

1 General information

1.1 History & development

1.2 Introduction of company

1.3 Existing managing body


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1.4 Organization chart

1.5 Plant lay-out chart

2 Finance department

2.1 Introduction

2.2 Capital structure

2.3 Financial position

2.4 Loan chart

2.5 Reserve & surpluse

2.6 Profit chart

3 Ratio analysis

3.1 Meaning & significance

3.2 Study on ratio analysis

3.2.1 Balance sheet ratio

-Current ratio

-Liquid ratio

-Proprietary ratio

-Cash ratio

-Networking capital ratio

3.2.2 Revenue statement ratio

-Gross profit ratio

-Net profit ratio

-Stock turnover ratio

-Expenses ratio

3.2.3 Composite ratio

-Return on capital employed ratio

-Return o shareholder funds ratio

-Debtors ratio

-Total asset turnover ratio


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HISTORY & DEVELOPMENT

Vimal Dairy Ltd. Comes in to existence on 30th June 1995. under the

name of Vimal Dairy there are many other companies besides Vimal Dairy Ltd. And jointly

they are well known as Vimal group. The main founder of Vimal group of companies is Mr.

Chandubhai .I .Patel

The name of these companies as on their generation is :

Vimal Cables Ltd. Vimal Pumps Pvt. Ltd.

Vimal Paints Ltd.

Vimal Oil & Food Ltd.


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Vimal Dairy Ltd.

Vimal Microns Ltd.

Mr. Chandubhai Patel has started Vimal electric company as partnership firm in

1978. This firm was manufacturing Capacitor, boosters and transformers. The ancillary item

of submersible pump i.e. PVC winding wires and three core flat cable , power control cables

were introduces in market by formatting a private limited company, under the name of Vimal

cables ltd.

They introduced submersible pump in the market under the brand name of Vimal pumps by

forming a private Itd. Company Vimal pumps Pvt. Ltd.

In 1989, they started Vimal paint to manufacture different parts of industries and

decorative paints. In North Gujarat , rapeseeds are available in bulk and consumption of

edible oil is mire in Gujarat. Looking to the heavy demand of refined oil , they introduced

cottonseeds and reposed oil under the name of Vimal oil & food ltd.

INTRODUCTION TO COMPANY

In company profile, I have some general information about history of the

company mission and goal of the company, auditors and bankers of the

company. I also learn the managerial function of the entire department.

In finance department I have information of financial planning, capital

structure and capitalization of the company. I also have the information

regarding the depreciation policy and credit policy of the company

VIMAL Dairy can meet with future challenges to collect the entire milk

production in district, processing and manufacturer quality milk products to


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satisfy customers. Altogether Banas-I and Banas-II Dairy plant (6.5

lacks liters processing capacity) Chilling Center (Khimana, Dhanera

,Tharad, Radhanpur and Danta) Banas dairy able to process 21 lacks liters of

milk per day

THE NAME OF THIS COMPANIES AS ON THEIR GENERATION IS

:

VIMAL DAIRY LTD.

VIMAL PAINTS.

VIMAL MICRONS LTD.

VIMAL OIL & FOOD LTD.

VIMAL PUMPS PVT LTD

VIMAL CABLE LTD

PRODUCT NAME:

MILK

GHEE

BUTTER

BUTTER MILK

MILK POWDER CHEESE


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COMPITITORS

Doodh Sagar dairy

Mother dairy

Saradar dairy

Amul

COLLECT THE MILK PER DAY AS UNDER

Tharad 40,000 ltr

Patan 45,000 ltr.

Disha 30,000 ltr.

TOTAL 1, 15,000 ltr.


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.

REGISTERED OFFICE:

"Vimal House"

4th floor ERITAGE

Nr Grand Bhagwati,

S.G. Highway,Ahmedabad

CORPORATE OFFICE:

1, National Chambers 1st floor

Opp, Mangal Murti Complex,

Ashram Road, Ahmedabad 380009

PLANT:

Nr. Palavasana , Rly crossing,

Highway, Mehsana - 384002

EXISTING MANAGING BODY

Chairman : Shri Chandubhai I. Patel


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Whole time Director : Shri Jayeshbhai C Patel

Technical director : Shri C.V.Patel

Chief Accountant : Shri Mahendrabhai Patel

Marketing Manager : Shri Dashrathbhai Patel

Company secretary : Shri Jigneshbhai Maniyar

General manager : Shri Dilipbhai J.Patel

Manager (procurement) : Ashokbhai Patel

Production manager : Shri Dineshbhai Pandya

Manager (R&D,D.C) : Shri D.B.Patel

ORGANIZATION CHART


15/81PLANT LAYOUT CHART


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.

LOANS :

Vimal Dairy gets loans from well known banks by mortgage their assets &

personal guarantee.

LIST OF BANKS :

1. Bank of India (cash credit)

2. Dena Bank (cash credit)

3. Meh.. Dist. Co.op.Bank Ltd.

4. Mehsana Urban Bank Term Loan A/c.


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FINANCE

DEPARTMENT


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INTRODUCTION

Finance is the most important thinking, which is concerned with the planning

and controlling of the firms financial sources. As a separate activity, it is recent origin. It is

the lifeblood of any business. Without capital nothing can take place. At every stapes of

business and manufacturing process or selling of finished goods finance is most required.

Money is the lifeblood of modern business. Money is required purchase

expansive machinery and also for day-to-day expanses on raw material and operational and

administrative need business. Execution of expansion planned and modernization

programmed are not possible without adequate finance. The manager performed by the

finance personnel directly influences the efficiency or production and marketing co-operation.

Finance management parish states in modern money using economy finance

may be defined as the provision of money at the time it wanted.

Vimal Dairy ltd. has given due attention and importance to finance and so that it

has a setup own separate finance department. Which is performing the function of

procurement of funds and allocation of these funds in to purchase of fixed assets as well as

for meeting day-to-day requirement? It also transaction of receipt and payment and also

prepares annual report.


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CAPITAL STRUCTURE

Capital structure refers to the mix of long term sources of funds, such as debenture,

long term debt preference share capital and equity share capital including reserve & surplus.

With the unplanned capital structure a company cannot succeed. Therefore its being

increasingly released that a company should plan its capital structure to maximize the use of

funds and to be able to adapt more easily to changing conditions.

The financial manager should plan optimum capital structure for his company.

Should develop an appropriate capital structure for its company, the financial manager shouldaim at maximizing the long-term market price per source.

CAPITAL STRUCTURE GRAPH

YEAR 2007-08 2008-09 2009-10

Share Capital 26,050,000 28,550,000 28,550,000

Reserve & Surplus 36,011,348 43,886,190 49,149,697

Secured Loan 112,250,207 142,643,786 166,557,299

Unsecured Loan 40,230,185 96,973,772 69,254,926


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0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

2007-08 2008-09 2009-10

Share Capital

Reserve &

SurplusSecured Loan

Unsecured Loan

FINANCIAL POSITION


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LOAN CHART

PARTICULARS AMOUNT

(Rs.)

AMOUNT

(Rs.)

AMOUNT

(Rs.)

2007-2008 2008-2009 2009-10

Owned capital 26,050,000 28,550,000 28,550,000

Reserve and surplus 36,011,348 43,886,190 49,149,697

Unsecured loan 40,230,185 96,973,772 69,254,926Secured loan 112,250,207 142,643,786 166,557,299

Sales 473,587,743 594,646,535 765,445,123

Fixed assets 54,655,119 66,055,080 69,449,166

Inventories 159,106,315 226,472,904 221,342,966

Investment 1,503,100 14,231,077 14,231,077

Debtors 21,562,764 26,083,598 27,620,336

Loans and advances 12,175,282 12,375,477 19,359,725

Cash and bank 10,334,318 18,644,550 4,930,348

Current liabilities 38,043,398 44,441,402 37,308,551

Working capital 110,996,223 119,373,462 149,592,430

Wages and salaries 4,466,510 5,839,318 8,262,976

Marketing selling &

advertisement expenses

15,726,230 16,947,999 18,974,140

Profit before tax 6,822,251 5,188,123 6,300,501

Profit after tax 3,610,422 3,149,905 5,538,572


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YEAR 2007-08

(Rs.)

2008-09

(Rs.)

2009-

10

(Rs.)

SECURED LOAN 112,250,207 142,643,786 166,557,299

UNSECURED LOAN 40,230,185 96,973,772 69,254,926

0

20000000

40000000

60000000

80000000

100000000

120000000

140000000

160000000

180000000

2007-

08

2008-

09

2009-

10

SECURED

LOAN

UNSECURED

LOAN

RESERVE & SURPLUS CHART

YEAR 2007-08

(Rs.)

2008-09

(Rs.)

2009-10

(Rs.)

RESERVE & SURPLUS 36,011,348 43,886,190 49,149,697


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0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

50000000

2007-08 2008-09 2009-10

RESERVE

&

SURPLUS

PROFIT CHART


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YEAR 2007-08

(Rs.)

2008-09

(Rs.)

2009-10

(Rs.)

PROFIT AFTER TAX 3,610,422 3,149,905 5,538,572

PROFIT BEFORE TAX 6,822,251 5,188,123 6,300,501


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MEANING OF RATIO ANALYSIS

Ratio analysis among the most popular and widely used tools of

financial analysis. Ratios are tools providing us with clues and symptoms of underlying

conditions. Analysis of a ratio reveals important relations and bases of comparison in

uncovering conditions and trends difficult to detect by inspecting individual components

comprising the ratio.

SIGNIFICANCE OF RATIO ANALYSIS

The accounting ratios offer the following advantages:

Help in financial statements analysis: -

It is easy to understand the financial position of a business enterprise in respect of

short term solvency, capital structure position etc., with the help of various ratios. The users

can also gain by knowing the profitability ratios of the firm.

Help in simplifying accounting figures: -

The single figures in terms of absolute amounts such Rs. 10 lakhs income, Rs. 50

lakhs sales etc., are not much use. But they become important when relationships are

established, say for example, between gross profit and sales or net profits and capital

employed and so on.


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Help in calculating the operating efficiency of the business

enterprise: -

Ratios enable the users of financial information to determine operating

efficiency of a business firm by relating the profit figure to the capital employed for a given

period.

Help in locating weak points of the firm:

Ratio analysis would pin point the deficiency of various departments, or

branches of a business unit even though the overall performance is satisfactory.

Help in inter-firm and inter-period comparisons: -

A firm can compare its results not only with other firms in the

same industry but also its own performance over a period of time with the

help of ratio analysis.

Help in forecasting: -

Accounting ratio calculated and tabulated for a number of

years enable the users of financial information to determine the future

results on the ba


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STUDY ON RATIO ANALYSIS

BALANCE SHEET RATIO: -

When two items or groups of items

appearing in the balance sheet are compared the ratio so, obtained is a balance sheet ratio.

E.g. ratio establishing relationship between current assets and current liabilities is a

balance sheet ratio.

Current ratio

Liquid ratio

Proprietary ratio

Cash ratio

Net working capital ratio

CURRENT RATIO: -

SWAMI VIVEKANAND MBA COLLEGE, VEDA


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The current ratio measures the ability of

the firm to meets its current liabilities current assets get converted into cash

in the operating cycle of the firm and provide the funds needed to pay current liabilities.

Apparently, the higher the ratio, the greater the short term solvency.

CURRENT RATIO: - CURRENT ASSETS

CURRENT LIABILITIES

YEAR 2007-08 2008-09 2009-10

Current Assets 203,178,679 283,576,529 273,253,375

Current Liabilities 38,043,398 44,441,402 37,308,551

Ratio 5.34 : 1 6.38 : 1 7.32 : 1



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0

1

2

3

4

5

6

78

2007-08 2008-09 2009-10

Current Ratio

INTERPRETATION: -

Here, the current ratio for the year 2007-08 is 5.34, for the year

2008-09 is 6.38 and for the year 2009-10 is 7.32. The current ratio of the year 2009-10 is

higher than the years 2007-08 &2008-09 and so, we can say that the current ratio of the

year 2009-10 is effective ratio than 07-08 & 08-09, because of the standard ratio is

7.32:1. So position of the company in the market is good in the year 2009-10.



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LIQUIDITY RATIO: -

Liquidity refers to the ability of a firm to meet its obligations

in short run, usually one year. Liquidity ratios are generally based on the relationship

between current assets (the sources for meeting short term obligations) and current

liabilities.

LIQUIDITY RATIO: - LIQUID ASSETS

LIQUID LIABILITIES

YEAR 2007-08 2008-09 2009-10

Liquid Assets 203,178,679 283,576,529 273,253,375

Liquid Liabilities 38,043,398 44,441,402 37,308,551

Ratio 5.34:1 6.38:1 7.32:1



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0

1

2

3

4

5

6

7

8

2007-08 2008-09 2009-10

Liquidity Ratio

INTERPRETATION: -

Here, the liquid ratio indicates for the year 2007-08 is 5.34, for

the year 2008-09 is 6.38 & for the year 2009-10 is 7.32. The liquid ratio of the year 2009-

10 is higher than the years 2007-08 & 2008-09, which indicates that the firm had

sufficient cash to meet the immediate payments. So, it is better position than past few

years.



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PROPRIETARY RATIO: -

The proprietary ratio is calculated by dividing the

proprietors fund by the total assets of the firm with multiplying by hundred. Where as

the proprietors fund is the sum of share capital and reserve & surplus. The total assets

are the sum of net assets, investment and net current assets of the firm.

PROPRIETARY RATIO: - PROPRIETORS FUND x 100

TOTAL ASSETS

YEAR 2007-08 2008-09 2009-10

Proprietors

Fund

62,061,348 72,436,190 77,699,697

Total Assets 221,328,907 319,421,284 319,625,067

Ratio 28.04 % 22.68 % 24.31 %



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0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2007-08 2008-09 2009-10

Proprietary

Ratio

INTERPRETATION: -

The ratio shown for the year 2007-08 is 28.04%, for the

year 2008-09 is 22.68% & for the year 2009-10 is 24.31%. As per the above chart we can

say that the ratio of the year 2008-09 is lower than the year 2007-08 & 2009-10.If the

high ratio, the stronger the financial position. A very high ratio is therefore not desirable,

because it means that insufficient use is being made of out side funds. According to study

under taken by RBI, this ratio use between 36% to 38% most of the Indian companies.

But our company had not very high ratio.



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CASH RATIO: -

The cash is most liquid asset, a financial analyst may examine

cash ratio and its equivalent to current liabilities. Trade investment or marketable

securities are equivalent of cash; therefore, they may be included in the computation of

cash ratio.

CASH RATIO: - CASH & BANK BALANCE

CURRENT LIABILITY

YEAR 2007-08 2008-09 2009-10

Cash & Bank 10,334,318 18,644,550 4,930,348

Current Liabilities 33,829,653 39,683,240 32,197,087

Ratio 0.31 : 1 0.47 : 1 0.15 : 1



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0

0.1

0.2

0.3

0.4

0.5

2007-08 2008-09 2009-10

Cash Ratio

INTERPRETATION: -

Here, from the above chart the ratio shown for the year

2007-08 is 0.31, for the year 2008-09 is 0.47 & for the year 2009-10 is 0.15. As per the

higher of this ratio is good for the company. Because its increase the borrowing power of

company from to consist with liability or any thing else.

In this company the cash ratio of 0.31 means 31% in the year 2007-08. It

is lower then 0.47 means 47% in the year 2008-09. But it is good performance ofcompany because in the year 2009-10 the ratio is 0.15 means 15%. So, the company is

performed good & modified its old bad performance. And it is good for the company to

maintain & increase its performance.



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NET WORKING CAPITAL RATIO: -

Net working

capital means the different between current assets & current liabilities: excluding short

term bank borrowing is called net working capital or are as firms liquidity.

NET WORKING CAPITAL RATIO: - NET WORKING CAPITAL

NET ASSETS

YEAR 2007-08 2009-08 2009-10

Net Working Capital 110,996,223 119,373,462 149,592,430

Net Assets 165,135,281 239,135,127 235,944,824

Ratio 0.67 0.50 0.63



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0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2007-08 2008-09 2009-10

Net Working

Capital Ratio

INTERPRETATION: -

The ratio shows that the higher 0.67 in the year 2007-

08,than the other year. And it is lower 0.50 in the year 2008-09 then 2007-08 & 2009-10.

Net working capital is sometimes used as a measure of a firms liquidity. Net working



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capital has the greater ability to meet its current obligations. Net working

capital measures the firms potential reservoir of funds. It can be related to net

assets.

REVENUE STATEMENT RATIO: -

These are the ratio are

computed on the basis of items taken from revenue statement i.e.

profit and loss account. E.g. Net profit ratio is computed by dividing net

profit and loss account.

Gross profit ratio

Net profit ratio

Stock turn over ratio



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Expanses ratio

GROSS PROFIT RATIO: -

The gross profit reflects the

efficiency with which management produces each unit of product. This

ratio indicates the average spread between the cost of goods sold and

the sales revenue.

GROSS PROFIT RATIO: - GROSS PROFIT x 100

SALES

YEAR 2007-08 2008-09 2009-10

Gross Profit 21,997,813 25,608,235 28,758,140



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Sales 473,587,743 594,646,535765,445,123

Ratio 4.64 % 4.31 % 3.76 %

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2007-08 2008-09 2009-10

Gross Profit

Ratio

INTERPRETATION: -

The ratio shows increasing order in

the year 2007-08 & 2008-09. But in the year 2009-10 some portion is

lower due to increasing operating expanses. As per this ratio the

company should required to reduce operating expanses. In this



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industry, there is more or less recognized gross profit ratio and

business should strive to maintain this standard.

If the ratio is low, it indicates that the cost of sales is

high or that the purchasing is inefficient. Alternatively, it may also

mean that due to depression, the selling price is reduced but theremay be no corresponding reduction in cost of sales. In such a case, the

management must investigate the causes and try to bring up this ratio.

NET PROFIT RATIO: -

Net profit ratio establishes the

relationship between net profit and sales. It indicates the efficiency of

the management in manufacturing, selling, administrative and other

activities of the concern.



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NET PROFIT RATIO: - NET PROFIT x 100

SALES

YEAR 2007-08 2008-09 2009-10

Net Profit 3,610,422 3,149,905 5,538,572

Sales 473,587,743 594,646,535 765,445,123

Ratio 0.76 0.53 0.72

00.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2007-08 2008-09 2009-10

Net Profit

Ratio

INTERPRETATION: -

The net profit ratio from above chart

respectively for the year 2007-08 is 0.76%, for the year 2008-09 is



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0.53% and for the year 2009-10 is 0.72%.It is good position for

the company. The higher of this ratio is shows the better

profitability of the company.

In this company the gross profit ratio is continuously

increasing order. But in the year 2008-09 it is some portion decreasedue to increasing administrative expanses. So, that effects the net

profit ratio may be some portion decrease.

STOCK TURN OVER RATIO: -

This ratio measures

how fast the inventory is moving through the firm and generating

sales. Consistency in valuation requires the use of cost of goods sold in



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the numerator because, like inventories, it is reported at cost.

Sales in contrast, include a profit margin. The inventory

turnover reflects the efficiency of inventory

management. The higher the ratio, the more efficient the management

of inventories and vice versa.

STOCK TURN OVER RATIO: - COST OF GOOD SOLD

AVERAGE STOCK

YEAR 2007-08 2008-09 2009-10

Cost Of Good Sold 451,589,930 569,038,300 736,686,983

Average Stock 68,670,657 69,415,745 69,419,235

Ratio 6.58 Times 8.2 Times 10.61 Times

0

2

4

6

8

10

12

2007-08 2008-09 2009-10

Stock Turn

Over Ratio



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INTERPRETATION: -

Stock turn over ratio shows the number of

times the average stock is turned over during the year. Here the ratio

signifies that the average stock is turned over 10.61 times in the year

2009-10, 8.2 times in the year 2008-09 and 6.58 times in the year

2007-08. The ratio is very important in judging the ability of the

management with which it can move the stock. The stock turn over

ratio is shows in decreasing way it is not good for company. As per the

study of stock turn over ratio is in decrease continuously. So, company

should increase the time in stock turn over.

EXPENSE RATIO: -

It is the relationship of various expenses to

net sales. It is calculated by dividing each item of expenses or groups

of expenses with the net sales to analyze the cause of variation of the

operating ratio.

EXPENSE RATIO: - TOTAL EXPENSE x 100

SALE

YEAR 2007-08 2008-09 2009-10

Total Expenses 15,726,230 16,947,999 18,974,140

Sales 473,587,743 594,646,535 765,445,123



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Ratio 3.32 % 2.85 % 2.48 %

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

2007-08 2008-09 2009-10

Expenses Ratio

INTERPRETATION: -

The ratio shown for the year 2007-08 is

3.32%, for the year 2008-09 is 2.85% & for the year 2009-10 is 2.48%.

As per the above chart we can say that the ratio of the year 2009-10 is

lower than the year 2007-08 & 2008-09.

If the smaller the ratio, the higher is the profitability; and

the greater the ratio, the lower is the profitability. From the above data

we can say that expanses ratio of the company would be lower in year



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by year, so the company decreasing of the administrative

expanses.

COMPOSITE RATIO: -

A ratio showing the relationship between

one item taken from balance sheet and other taken from profit and

loss account is a composite ratio known as balance sheet and revenue

statement ratios. A return on capital employed and it is a composite

ratio.

Return on capital employed ratio

Return on shareholders funds ratio



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Debtors ratio

Current assets turn over ratio

Total assets turn over ratio

Debtor turn over ratio

Working capital turn over ratio

RETURN ON CAPITAL EMPLOYED: -

It is an index of profitability of

business and is obtained by comparing net profit with capital

employed. The ratio is normally expressed in the percentage. The term

capital employed includes share capital. Reserves and long term loans

such as debentures.

RETURN ON CAPITAL EMPLOYED: - NET PROFIT x100

S CAPITAL

EMPLOYED



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YEAR 2007-08 2008-09 2009-

10

Net Profit 6,822,251 5,188,123 6,300,501

Capital Employed 214,541,740 312,053,748 313,511,922

Ratio 3.18 % 1.66 % 2 %

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

2007-08 2008-09 2009-10

Return On

Capital

Employed

INTERPRETATION: -

The above chart shows the return on capital

employed. It shows respectively for 2007-08 is 3.18%, for 2008-09 is



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1..66% and for 2009-10 is 2.00%. The return on capital

employed shows the earning capacity of the firm in year 2008,

2009 and 2010 but the earning capacity of the year 2007-08 is more

than the year 2008-09 & 2009-10.

The return on capital employed reveals the rate of the earningcapacity of the concern. It also indicates whether the proprietors funds

have been used properly or not. The higher the ratio, the greater will

be the return for the owners and the better the profitability. As per

above chart we can say that earning capacity is good.

RETURN ON SHARE HOLDERS FUNDS: -

Return

on shareholders investment is known as ROI or return on

shareholders/Proprietors funds. This ratio establishes the relationship

between net profits (after tax and interest) and proprietors funds.

RETURN ON SHF: - NET PROFIT (PAT) x 100

SHARE HOLDERS FUNDS



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YEAR 2007-08 2008-09

2009-10

Net Profit 3,610,422 3,149,905 5,538,572

Share Holders

Funds

62,061,348 72,436,190 77,699,697

Ratio 5.82 % 4.35 % 7.13%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2007-08 2008-09 2009-10

Return On

Share Holder's

Fund's

INTERPRETATION: -



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As per this ratio the shareholders gets less benefit 4.35% in

the year 2008-09, as compare to the year 2007-08 & 2009-10.

But company paid good return in the year 2009-10 to its investors as

per the year 2007-08 and the year 2008-09, it is higher than the year

2009-10. This ratio is used to measure the overall efficiency of a

concern. The higher the ratio the better the results will be as this ratio

reveals how well the resources of a concern are being used. The

shareholder get good benefits from the company as per the trend of

recession.

DEBTORS RATIO: -

The ratio shows the number of days taken to

collect the dues of credit sales. It shows the efficiency or otherwise of

the collection policy of the enterprise. The ratio is computed by

dividing the amount of debtors and bills receivable by the credit sales.



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DEBTORS RATIO: - DEBTORS x 365

CREDIT SALES

YEAR 2007-08 2008-09 2009-10

Debtors 21,562,764 26,083,598 27,620,336

Credit Sales 473,587,743 594,646,535 765,445,123

Ratio 17 Days 16 Days 13 Days

0

2

4

6

8

10

12

14

16

18

2007-08 2008-09 2009-10

Debtors Ratio

INTERPRETATION: -

Here, the debtors ratio indicates for the year 2007-08 is 17 days, for

the year 2008-09 is 16 days & for the year 2009-10 is 13 days. The

ratio of the year 2009-10 is lower than the year 2007-08 & 2008-09.

So, the more satisfactory position is shows. It suggests that the credit



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and collection policy is strong. This would result in to

satisfactory state of working capital and good liquid position.

TOTAL ASSETS TURN OVER RATIO: -

Total assets turn over

ratio is computed on the total assets turn over in addition to or instead

of assets turn over. This ratio shows the firms ability in generation

sales from all financial resources committed total assets.

TOTAL ASSETS TURN OVER RATIO: - SALES

TOTAL ASSETS



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YEAR 2007-08 2008-09 2009-

10

Sales 473,587,743 594,646,535 765,445,123

Total Assets 221,328,907 319,421,284 319,625,067

Ratio 2.14 1.86 2.39

0

0.5

1

1.5

2

2.5

2007-08 2008-09 2009-10

Total Assets

Turn Over

Ratio

INTERPRETATION: -

The amount was invested in the business,

are investing in all assets jointly and sales are affected through them

to earn profit so, in order to find out relation between total assets to

sales. The higher the ratio, it shows that with less amount of



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investment in total assets, the business has a capacity to sell

more and as such its profitability is also more. The above

shows that, the ratio of 2007-08 and 2009-10 are more than 2008-09.

DEBTORS TURN OVER RATIO: -

Debtors turnover

ratio measures the efficacy of a companys credit and collection policy.

The ratio shows the number of times each year a companys debtors

turn into cash. The ratio provides some indication of the quality of both

the debtors and the companys collection efforts. A high debtor

turnover ratio indicates that the debtors were converted frequently

into cash and the quality of the companys portfolio of debtors can be

considered good.



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DEBTORS TURN OVER RATIO: - CREDIT SALES

AVERAGE DEBTORS

YEAR 2007-08 2008-09 2009-10

Sales 473,587,743 594,646,535 765,445,123

Average

Debtors

21,562,764 26,083,598 27,620,336




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0

5

10

15

20

25

30

2007-08 2008-09 2009-10

Debtors Turn

Over Ratio

INTERPRETATION: -

The ratio for the year 2007-08 is 21.96times, for the year 2008-09 is 22.80 times and for the year 2009-10 is

27.71 times. It indicates the information regarding the liquidity of one

item of current assets of the firm. The ratio measure how rapidly debt

is collected. A high ratio indicates the shorter time lag between sales

and cash collection. A low ratio indicates the debts are not being

collected rapidly. According to debtor turn over ratio is increasing

order. So, higher of this ratio is better forthe company.



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WORKING CAPITAL TURN OVER RATIO: -

This ratio indicates the demand made on

working capital in supporting the sales revenues of a business

enterprise. It shows the effectiveness or utilization of working capital.

WORKING CAPITAL TURN OVER RATIO: - COST OF GOODSOLD

WORKING CAPITAL

YEAR 2007-08 2008-09 2009-10

Cost Of Good Sold 451,589,930 569,038,300 736,686,983

Working Capital 110,996,223 119,373,462 149,592,430




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0

1

2

3

4

5

2007-08 2008-09 2009-10

Working

Capital Turn

Over Ratio

INTERPRETATION: -

The ratio shows that the

requirement of working capital 4.92 times in the year 2009-10, If more

as compare to the year 2007-08 & 2008-09. Its reduced working

capital 4.07 times in the year 2007-08 as compared to the year 2008-

09.

It is good for the company to maintain & reduce this

stage of working capital & to collect quick payment from the debtor.



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PART 3

SUGGESTIONS

Vimal dairy needs to make its marketing team strong and also it

should increase marketing activities such as promotional

campaigns.

Vimal dairy should educate the investments organizing classes,

corporate presentations, taking part in consumer fairs, organizing

events.



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Company should show the benefits of sales of the products

Vimal dairy can also use Newspapers and Local New Channels as a

medium of advertising.

Vimal dairy may also use its helpline number for giving Problem on

market.

Company may appoint special team for giving Problem & attracting

people towards in market.

Over all the companys position is good in terms of quick ratio.

CONCLUSION

After doing financial terms inventory management. I would like to give

following suggestion



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the higher portion of amount is blocks in inventory is

higher . so the company should try to invest necessary

amount in inventory.

It can be concluded that unit has a high potential.

Companys future is very bright because of good

management , good department, some of skilled & educated

workers, and good experienced persons . In my opinion, VIMAL

DAIRY LIMITED. Has wide scope of growing its business. This

company has good management who has provide me best useful

information , which is very necessary for preparing the project

report.

BIBLIOGRAPHY

Books:



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I M Pandey (2005), Financial Management - 9th EditionPublished by VIKAS PUBLISHING HOUSH PVT LTD

M.Y. Khan and P.K. Jain, Financial management Vikas Publishing

house ltd., New Delhi.

K.V. Smith- management of Working Capital- Mc-Grow Hill New York

Satish Inamdar- Principles of Financial Management-Everest Publishing

House

Annual Reports:

Year: 2007-08, 2008-09 .2009-10

Websites:

www.vimaldairy.co.in

http://www.vimaldairy.co.in/http://www.vimaldairy.co.in/


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ANNEXURE

ANNAXURE-1

BALANCE SHEET AS AT 31ST MARCH, 2010

SR

NO

LIABILITIES / ASSETS

31ST MARCH ,2010

AMOUNT[ RS]

A SOURCES OF FUNDS



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1 SHAREHOLDERS` FUNDS

(A) CAPITAL

28550000

(B) RESERVE & SURPLUS

49149697

77699697

2 DEFERRED TAX LIABILITY

6113145

3 LOAN FUNDS

(A) SECURED LOANS

166557299

(B) UNSECURED LOANS

69254926

TOTAL 319625067

B APPLICATION OF FUNDS

1 FIXED ASSETS

(A) GROSS BLOCK

139453645

(B) LESS DEPRECIATION FUND 70004479

(C) NET BLOCK

69449166

2 INVESTMENTS

14231077

3 CURRENT ASSETS

(A) INVENTORIES

221342966

(B) SUNDRY DEBTORS

27620336

(C) CASH & BANK BALANCES

4930348



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(D) LOANS & ADVANCES

19359725

TOTAL : A

273253375

LESS : CURRENT LIABILITIES

(A) LIABILITIES

32197087

(B) PROVISIONS

5111464

TOTAL : B

37308551

NET CURRENT ASSETS

2359448244 MISCELLANEOUS EXPENDITURE

0

TOTAL 319625067

PROFIT AND LOSS ACCONNT

FOR THE YEAR ENDED ON 31ST MARCH 2010

SR

NO

INCOMES / EXPENDITURE AMOUNTS

A INCOMES

SALES & OPERATING INCOME



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765445123

OTHER INCOME

919058INCREASE / DECREASE IN FINISHED GOODS

&STOCK

(-

5864486)

TOTAL

760499694

B EXPENDITURE

RAW MATERIAL CONSUMED

622673408

PURCHASE FOR RESALE

2164276

MANUFACTURING EXPENSES

76963126

ADMINISTRATIVE EXPENSES

6233268

SELLING & DISTRIBUTION EXPENSES

18974140

INTEREST & FINANCIAL CHARGES

18243316

DEPRECIATION

8782211

AUDITORS REMUNERATION

165450

PRELIMINARY &PRE-OPERATIVE EXPS WRITTEN

OFF

0

TOTAL

754199194

C PROFIT BEFORE TAX



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6300501

D PROVISION FOR FRINGE BENEFIT TAX

90000

E PROVISION FOR TAXTION2300000

F SHORT PROVISION OF INCOME TAX (-

373680)

G DIFFERED TAX ASSET / (LIABILITY) (-

1254391)

H PROFIT AFTER TAX

5538572

I SHORT / EXCESS PROVISION FOR PREVIOUS

YEAR

0

J BALANCE CARRIED TO BALANCE SHEET

5538572

K EARNING PER EQUITY SHARE 1.94



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ANNEXURE-2

BALANCE SHEET AS AT 31ST MARCH, 2009

SR

NO


31ST MARCH ,2009

AMOUNT[ RS]

A SOURCES OF FUNDS


(A) CAPITAL

28550000


43886190

72436190


7367536

3 LOAN FUNDS

(A) SECURED LOANS

142643786

(B) UNSECURED LOANS

96973772

TOTAL

319421284


1 FIXED ASSETS

(A) GROSS BLOCK

127326731

(B) LESS DEPRECIATION FUND

61271651



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(C) NET BLOCK

66055080

2 INVESTMENTS

14231077

3 CURRENT ASSETS

(A) INVENTORIES

226472904

(B) SUNDRY DEBTORS

26083598


18644550


12375477

TOTAL : A

283576529


(A) LIABILITIES

39683240

(B) PROVISIONS

4758162

TOTAL : B

44441402

NET CURRENT ASSETS

239135127


0

TOTAL 319421284



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PROFIT AND LOSS ACCONNT


SR

NO


A INCOMES


594646535

OTHER INCOME

1314387

INCREASE / DECREASE IN FINISHED GOODS

&STOCK

69415745

TOTAL

665376667

B EXPENDITURE


540395005

PURCHASE FOR RESALE



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5049786


67245465

ADMINISTRATIVE EXPENSES6376285


16947999


16582391

DEPRECIATION

7387846


168360


OFF

35407

TOTAL

660188544

C PROFIT BEFORE TAX5188123


65000

E PROVISION FOR TAXTION

1670000

F SHORT PROVISION OF INCOME TAX (-

277151)

G DIFFERED TAX ASSET / (LIABILITY)

580369

H PROFIT AFTER TAX

3149905

I SHORT / EXCESS PROVISION FOR PREVIOUS YEAR



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0

J BALANCE CARRIED TO BALANCE SHEET 3149905


ANNEXURE-3

BALANCE SHEET AS AT 31ST MARCH,

2008

SR

NO


31ST MARCH ,2008

AMOUNT[ RS]

A SOURCES OF FUNDS




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(A) CAPITAL

26050000


36011348

62061348


6787167

3 LOAN FUNDS

(A) SECURED LOANS

112250207

(B) UNSECURED LOANS

40230185

TOTAL

221328907


1 FIXED ASSETS

(A) GROSS BLOCK

109867936

(B) LESS DEPRECIATION FUND

55212817(C) NET BLOCK

54655119

2 INVESTMENTS

1503100

3 CURRENT ASSETS

(A) INVENTORIES

159106315

(B) SUNDRY DEBTORS

21562764


10334318



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12175282

TOTAL : A

203178679


(A) LIABILITIES

33829653

(B) PROVISIONS

4213745

TOTAL : B

38043398

NET CURRENT ASSETS


35407

TOTAL 221328907



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PROFIT AND LOSS ACCOUNT


SR

NO


A INCOMES


473587743

OTHER INCOME

535187

INCREASE / DECREASE IN FINISHED GOODS&STOCK

68670657

TOTAL

542793587

B EXPENDITURE


435811198PURCHASE FOR RESALE

9430877


56688427

ADMINISTRATIVE EXPENSES

4315225


15726230


6920721

DEPRECIATION

6853523



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168360


OFF

56775

TOTAL535971336

C PROFIT BEFORE TAX

6822251


78710E PROVISION FOR TAXTION

4000000

F SHORT PROVISION OF INCOME TAX

483438

G DIFFERED TAX ASSET / (LIABILITY) (-

1350319)

H PROFIT AFTER TAX

3610422

I SHORT / EXCESS PROVISION FOR PREVIOUS YEAR

0

J BALANCE CARRIED TO BALANCE SHEET

3610422


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Vimal Dairy Mba