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Financial Performance Analysis at KSRTC

Chapter 1: Theoretical Background of the Study


1.1: General Introduction Project title:
AStudy on Financial Performance analysis with special reference to KSRTC 1.2: Statement of Problem
Since KSRTC is a State Government Undertaking and is a monopoly in the state road transport not much concern is shown towards its financial performance review. Financial analysis is very essential for the any company. In long run it is very important for the company to know its financial position. This will help the managers to take important decisions in order to achieve the organizations goal. Therefore the appraise study would help to explore an opportunity to evaluate of financial performance of KSRTC.

1.3: Objectives of Study


To understand the financial position of KSRTC. To analyze the financial performance. To analyze liquidity position, solvency position, profitability and management efficiency. To study the changes in the assets and liabilities structure of the company for period of 3 years.

1.4: Scope of Study


By Financial Performance Analysis of KSRTC, it would be possible to get a fair picture of the financial position of KSRTC. By showing the financial performance to various lenders and creditors it is possible to get credit is easy terms if good financial condition is maintained in the company with assets outweighing the liabilities. This project provides a room for understanding the various financing activities of KSRTC.

Financial Performance Analysis at KSRTC 1.5: Research Methodology


Research methodology is a way to solve the research problem systematically. It can be understood as a science of studying how research is done scientifically therefore the research methodology not only talks about the research methods but also considers the logic behind the method used in the context of the research study. Descriptive research method is used to determine financial performance.

SOURCE OF DATA COLLECTION


Collections of data are of two types, primary data and secondary data. Here only secondary data is used to achieve the set objective. Secondary data consists of different literature like books which are published, articles, company's annual audit report, the company manuals & journals and website of companywww.ksrtc.in

1.6: Limitation of Study


This study is limited to past 3 years financial statements only. The scope of the study is limited as only secondary data is used which may be effected by some biasness. This study is limited to KSRTC, Bangalore.

ANALYSIS OF FINANCIAL PERFORMANCE Analysis and the interpretation of financial performance refers to the process of determining the financial strengths and weakness of a concern by establishing strategic relationship between the items of the balance sheets, profits and loss account and other operative data. Acc. to MYERS financial statements analysis IS largely a study of relationship among the various financial factors in a business as disclosed by a single set of statements, and a study of the trend of these factors as shown in a series of statements.

Financial Performance Analysis at KSRTC


TYPES OF FINANCIAL ANALYSIS A classification is based on the basis of the material used for the analysis or the person interested in the analysis. External analysis: External analysis is done by outsiders who do not have analysis to the internal accounting records of the business firm. These outsiders include internal records of the business firm. These outsiders include investors and creditors, both existing and potential as well as government analysis, credit agencies, and the general public. The external parties depend upon almost entirely on the published financial statements. External analysis thus serves only limited purposes. Internal analysis: The analysis conducted by persons who have access to the internal accounting records of a business firm is known as internal analysis such an analysis can therefore by performed by the executives and employees of the organization as well as government agencies which have statutory powers vested in them. But, generally the personnel of the finance and accounting department and the executives for management purposes do internal analysis.

Classification on the basis of the modus operandi Vertical analysis or structural analysis: When an single set of financial statements relating to just one accounting year are analysed the analysis is known as vertical analysis, In the vertical analysis, the figures of the financial statements are analysed column wise i.e. a figure from one years financial statements is compared with a base figure selected from the same years financial statements Horizontal Analysis or Trend analysis: When the financial statement of a number of years is analysed, the analysis is called horizontal analysis. In other word horizontal l analysis is a type of analysis in which there is comparison of the trend of each item in the financial statements over a number of years

Financial Performance Analysis at KSRTC


STEPS INVOLED IN FINANCIAL STATEMENT ANALYSIS From a study of the meaning of financial statements, it clear that the work of analysis financial statements of analysis of financial statements involves three steps or processes they are Analysis: Analysis of financial statements means splitting up or regrouping of financial statements into the desired homogenous and comparable component parts. In other words, It means methodical classification of the data five in the financial statements into homogeneous and comparable parts. Comparison: Mere splitting up or regrouping of the figures found in the financial statements into the desired components parts is not sufficient for judging the profitability and the financial status of an enterprise. After the values contained in the financial statement are dissected or split into the required comparable component parts, the comparable component parts must be compared with each other, and relative magnitudes must be measured. So a comparison is the process of ascertainment of the relative magnitudes of parts of the study of the extent of relationship of the component parts. Interpretation: After the financial are analyzed or dissected into comparable parts the relative magnitudes of the comparable parts and the relative magnitudes of the comparable component parts is measured through comparison, the results must be interpreted. Interpretation of results means the formation of rational judgment and the drawing of proper conclusions about the progress, financial positions and the future prospects of the business through careful study of the relationship of components parts obtained through analysis and comparison, in short, interpretation covers even the work of presenting the findings the finding in reports form.

Financial statement is an organized collection of data to logical and consistent accounting procedures. The purpose is to convey and understand some financial aspects of business or a firm. It may show a position at a moment of times as in the case of balance sheet, or may reveal a series of activities over a given period of time, as in the case of income statements.

Financial Performance Analysis at KSRTC


The financial statements are indicators of 2 significant factors. Profitability Financial soundness Analysis and interpretation refers to such a treatment of the information contained in the income statement and balance sheet so as to afford full diagnosis of the profitability soundness of the business.

RATIO ANALYSIS
Ratio analysis is a widely-used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two item/variables. This relationship can be expressed as (a) Percentages (b) Fraction. These alternative methods of expressing items which are related to each other are for the purposes of financial analysis, referred to as ratio analysis.

DEFINITION According to James C.VanHarne, Ratio is a yardstick used to evaluate the financial condition and performance of a firm, relating to two pieces of financial data to each other. Ratio is a relationship between two figures or factors or variables. Th e relationship between them helps to analyze and interpret the financial condition and performance when applied to the financial data. The accounting ratios indicate a quantitative relationship, which can be used for analysis and decision-making. A ratio is quotient of two numbers and the relation expressed between two accounting figures is known as accounting ratio

Financial Performance Analysis at KSRTC


Steps in ratio analysis 1. Selection of relevant data from the financial statements depending upon the objective of the analysis. 2. Calculation of appropriate ratios from the above data. 3. Comparison of the calculated ratios with the ratios of the same company in the past, or the ratios developed from the projected financial statements or ratios of some other firms or comparison with ratios of the industry to which the company belongs. 4. Finally interpretation of the ratios.

IMPORTANCE OF RATIO ANALYSIS The major benefits arising from ratio analysis are as follows: 1.Ratio analysis is a very powerful analytical tool used for measuring performance of an organization. 2.Ratio analysis concentrates on the inter-relationship among the figures appearing in the financial statements. 3.Ratios make comparison easy. The ratio is compared with the standard ratio and this shows the degree of efficiency utilization of assets, etc. 4.The results of two companies engaged in the same business can be easily compared (interfirm comparison) with the help of ratio analysis. 5.Short-term liquidity position and long-term solvency position can be easily ascertained with the help of ratio analysis. 6.Ratio analysis helps the management to analyze the past performance of the firm and to make further projections. 7.Ratio analysis allows interested parties like shareholders, investors, creditors, government and analysts to make an evaluation of certain aspects of firms performance. 8.The appraisal of the ratios will make proper analysis about the strength and weaknesses of the firms operations.

Financial Performance Analysis at KSRTC

Chapter 2: DATA ANALYSIS AND INTERPRETATION


CURRENT RATIO In order to measure the short term liquidity or solvency of a concern, comparison Current assets and Current liabilities is inevitable. The current ratio is the indicator of the firms commitment to meet its short-term liabilities and also an index of the financial stability of the concern. It indicates the liability of current asset in rupee for every 1 rupee of current liability.

Current Ratio = Current assetsCurrent liabilities

TABLE 1 Current Liabilities 19206.58 26578.71 28885.67

(Rs in lakhs)

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12

Current Asset 15197.15 14824.6 14927.44

Current Ratio 0.791 0.558 0.517

(Source: secondary data companys financial statement)

Analysis:
The above table reveals that the current ratio was 0.791: 1 in the year 2009-10, 0.558: 1 in the year 2010-11 and 0.517: 1 in the year 2011-12. There is a decreasing trend in the ratio from past two years.

Financial Performance Analysis at KSRTC


GRAPH 1: CURRENT RATIO

(Source: Table 1) Interpretation: The graph clearly indicates the current ratio in 2011and 2012 has decreased. The company is relatively having low current ratio which is not equal to 2:1. Hence from this we can say that the company is not in a satisfactory position to meet its current ratio obligations. Because of increase in current liabilities and decrease in current assets company has decrease in its current ratio.

Financial Performance Analysis at KSRTC


QUICK RATIO: Quick Ratio is an indicator of a company's short-term liquidity. It measures a company's ability to meet its short-term obligations with its most liquid assets. Higher quick ratio means the company is in better position. Any company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities.

Quick Ratio=

Liquid asset Current liabilities

Liquid Assets = Current AssetsInventories prepaid expenses

TABLE 2

(Rs in lakhs)

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12

Liquid Asset 12262.7 11641.69 11995.5

Current Liabilities Quick Ratio 19206.58 26578.71 28885.67 0.638 0.438 0.415

(Source: secondary data companys financial statement)

Analysis: The above table reveals that the quick ratio was 0.638: 1 in 2009-10, 0.438: 1 in 2010-11 and 0.415: 1 in 2011-12. Standard quick ratio is 1:1

Financial Performance Analysis at KSRTC


GRAPH 2: QUICK RATIO

(Source: Table 2)

Interpretation: The company has to be conscious with regard to quick ratio. From the analysis the companys quick ratio was decreased from 0.638 to 0.438 in 2010-11 to further to 0.415 in the year ending 2011-12. This is mainly because of low realization of sundry debtors and an increase in current liabilities and comparative decrease in cash and bank balance. Hence, the concern is not in a position to pay its short term liabilities. KSRTC has to increase its current assets to have a better position.

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Financial Performance Analysis at KSRTC


CASH RATIO Cash ratio is the ratio of cash and cash equivalents of a company to its current liabilities. This ratio is an extreme liquidity ratio since only cash and cash equivalents are compared with the current liabilities. Cash Ratio measures the ability of a business to repay its current liabilities by only using its cash and cash equivalents and nothing else.

It is calculated using the formula

Cash Ratio =Cash + Cash EquivalentsCurrent Liabilities TABLE 3 Cash and cash equivalents 3013.69 2866.84 4311.83 (Rs in lakhs)

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12

Current Liabilities 19206.58 26578.71 28885.67

Cash Ratio 0.16 0.11 0.15

(Source: secondary data companys financial statement)

Analysis: The above table reveals that the Cash Ratio was 0.16 in the year 2009-10, there is increase by 0.05 in the year 2010-11 i.e. 0.11 and for the year ending 2012 it was 0.15.

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Financial Performance Analysis at KSRTC


GRAPH 3: CASH RATIO

(Source: Table 3)

Interpretation: A cash ratio of 1.00 and above means that the business will be able to pay all its current liabilities in immediate short term. But businesses usually do not plan to keep their cash and cash equivalent at level with their current liabilities because they can use a portion of idle cash to generate profits, which means that a normal value of cash ratio is somewhere below 1.00.

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Financial Performance Analysis at KSRTC


OPERATING EXPENSES RATIO Operating expenses are costs associated with running a business's core operations on a day to day basis. Thus, the lower a company's operating expenses are, company earns more profits. Changes in the OER indicate whether the company can increase sales without increasing operating expenses proportionately.

It is computed as follows

Operating expenses Ratio = Operating expenses Net sales or Revenue

TABLE 4

(Rs in lakhs)

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12

Operating expenses 162851.97 194772.21 222189.99

Net sales 151506.05 176899.01 211350.43

OER 1.07 1.10 1.05

(Source: secondary data companys financial statement)

Analysis: The operating expenses ratio is 1.07 in the year 2009-10; it has increased in the year 2010-11 i.e. 1.10 and in the year 2011-12 it is decreased to 1.05.

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Financial Performance Analysis at KSRTC


GRAPH 4: OPERATING EXPENSE RATIO

(Source: Table 4)

Interpretation: Operating ratio shows the operational efficiency of the company. The lower operating ratio shows higher operating profit and vice versa. An operating ratio ranging between 75% and 80% is generally considered as standard. Here the above graph shows that the ratio is higher than the standards, hence the operating profits are very less in KSRTC.

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Financial Performance Analysis at KSRTC


ADMINISTRATION EXPENSE RATIO This ratio measures how well the company is keeping its administrative costs under control for its current sales level. Administrative Expense Ratio = Administrative Expense Net Sales X 100

TABLE 5 Sl. No. 1 2 3 Year 2009-10 2010-11 2011-12 Administrative Expenses 8676.5 9334.1 10895.27 Net Sales 151506.05 176899.01 211350.43

(Rs in lakhs) Administrative Expense Ratio 5.73 5.28 5.16

(Source: secondary data companys financial statement)

Analysis:The Administrative Expense Ratio was 5.73 in the year 2009-10 which was highest in these 3 years, it was decreased to 5.28 in 2010-11 and at the year ending 2012 it was 5.16.

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Financial Performance Analysis at KSRTC GRAPH 5: ADMINISTARTIVE EXPENSE RATIO

(Source: Table 5)

Interpretation: Increasing Administrative Expense Ratio is a generally of positive sign, but here in case of KSRTC it is decreasing, so this is a good sign. The rate of decreasing is low.

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Financial Performance Analysis at KSRTC


RETURN ON CAPITAL EMPLOYED Return on capital employed (ROCE) is the most important ratio of all. It is the percentage of returns on fund invested in the business by its owners. It establishes the relationship between the profit and the capital employed.This helps to measures the profitability of a company by expressing its operating profit as a percentage of its capital employed. Capital employed is the sum of stockholders' equity and long-term finance.

Formula to compute R O C E is as follows

ROCE= Return Capital Employed (Return= Net profit+ Financial Cost+ Provision Interest/Dividend from Non-trade Investments Capital Employed= Equity Share Capital+ Reserves+ Debenture and long term liabilities Misc. Expenditure)

TABLE 6 Capital Employed 69673.71 74483.02 82198.6

(Rs in lakhs) Return On Capital Employed 10.62% 10.92% 4.73%

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12 7400

Return

8134.11 3885.05

(Source: secondary data companys financial statement)

Analysis: The percentage of ROCE was 10.62% in the year 2009-10, it was increased to 10.92% in 201011 but for the year ending 2012 it is decreased to 4.73%.

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Financial Performance Analysis at KSRTC


GRAPH 6: RETURN ON CAPITAL EMPLOYED

(Source: Table 6)

Interpretation: The ROCE percentage had increased in the year 2010-11 to 10.92% from 10.62% in the year 2009-10. But in the year ending 2012 it is4.73%, since the net profit is very less during the year, the rate of return is very low.

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Financial Performance Analysis at KSRTC


RETURN ON EQUITY Return on Equity ratio establishes the relationship between net profit available to equity shareholders and the amount of capital invested by them. This ratio is used to compare the performance of company's equity capital with those of other companies, and it helps the investor in choosing a company with higher return on equity capital.

Return On Equity= Net Profit Equity Capital

TABLE 7 Sl. No. 1 2 3 Year 2009-10 2010-11 2011-12 Net profit 4884.68 6205.26 1951.68 Equity Capital 29088.7 29088.7 29088.7

(Rs in lakhs) Return On Equity 16.79% 21.33% 6.71%

(Source: secondary data companys financial statement) Analysis: The above table reveals that the rate of return on equity was 16.79% in the year 200910, increased to 21.33% in the year 2010-11 and at the year ending 2012 it was decreased to 6.71%.

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Financial Performance Analysis at KSRTC


GRAPH 7: RETURN ON EQUITY

(Source: Table 7)

Interpretation: Above graph shows in KSRTC Return on Equity was highest in year 2010-11 in these 3 years i.e. 21.33%, since in that year net profits was highest among the 3years. The Equity Capital of the remains the same for these three years, so the variation in the rate is only due to the increase and decrease in net profits of the company.

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Financial Performance Analysis at KSRTC


GROSS PROFIT RATIO:

It expresses the relationship of gross profit to net sales and is expressed in terms of percentage. Gross profit ratio is a tool that indicates the degree to which sales/revenue may decline without resulting in losses. It is calculated by following formula:

Gross profit Ratio = Gross profit Net Sales or Revenue X 100

TABLE 8

(Rs in lakhs)

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12

Gross Profit 5224.5 9082.7 19371

Net sales 151506.05 176899.01 211350.43

Gross Profit Ratio 3.45% 5.13% 9.17%

(Source: secondary data companys financial statement)

Analysis: The above table reveals that the Gross Profit ratio was 3.45% in the year 2009-10. The ratio was increased to 5.13% in the year 2010-11 and increased to 9.17% in 2011-12.

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Financial Performance Analysis at KSRTC


GRAPH 8: GROSS PROFIT RATIO

(Source: Table 8)

Interpretation: Above graphs shows that for the year ending 2012, KSRTC has greater gross profit ratio i.e. 9.17% because during this period company had earned more revenue and operating expenses was less. Gross profit ratio was very low in the year 2009-10 i.e. 3.45% of thesethree years.

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Financial Performance Analysis at KSRTC


NET PROFIT RATIO: Net Profit Ratio indicates that portion of the sales which is left out with the owners after considering all types of expenses and costs either operating or non operating or normal or abnormal. NPR is used to measure the overall profitability and hence it is very useful proprietors. This also indicates the firms capacity to face adverse economic conditions such as low demand, price competition etc. It is computed as

Net Profit ratio = Net ProfitNet Sales*100

TABLE 9

(Rs in lakhs) Net Profit Ratio 3.22 3.51 0.93

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12

Net profit 4884.68 6205.26 1951.68

Net sales 151506.05 176899.01 211350.43

(Source: secondary data companys financial statement)

Analysis: The above table reveals that the NPR was 3.22 in the year 2009-10, 3.51 in the year 2010-11 and 0.93 for the year ending 2011-12.

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Financial Performance Analysis at KSRTC


GRAPH 9: NET PROFIT RATIO

(Source: Table 9)

Interpretation: The comparison of NPR year to year, there is an increase and decrease during the study period. The ratio was 3.22 in the year 2009-10, later in the year 2010-11 it was increased to 3.51, it was because of increase in operating efficiency, good management and greater sale during the year. Whereas for the year ending 2011-12 the NPR was decreased to 0.93, it was due to additional expenditure incurred during the year and the sales growth percentage remained the same.

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Financial Performance Analysis at KSRTC


DEBT EQUITY RATIO Debt to Equity Ratio is a measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. This ratio indicates what proportion of equity and debt the company is using to finance its assets.

Debt Equity ratio = Long Term Debt Total Equity

TABLE 10

(Rs in lakhs) Debt equity ratio 0.29 0.23 0.23

Sl. No 1 2 3

Year 2009-10 2010-11 2011-12

Total Debt 28499.55 23378.09 24689.62

Total Equity 98906.6 102893.56 106880.52

(Source: secondary data companys financial statement)

Analysis: The above table reveals that the debt equity ratio was 0.29 in the year 2009-10 and is decreased to 0.23 in year 2010-11 and it continued with same ratio for the year 2011-12.

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Financial Performance Analysis at KSRTC


GRAPH 10: DEBT EQUITY RATIO

(Source: Table 10)

Interpretation: Above graph clears that KSRTC has relatively sound and less risk of long term debts in its financial structure. Because of increase in reserves and internal resources and repayment of long term debt, the company achieved favourable debt equity ratio.

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Financial Performance Analysis at KSRTC DEBT RATIO


Debt ratio shows the long-term solvency of a firm and gives an idea of interest bearing debt.This ratio indicates what proportion of debt a company has relative to its assets.

Debt Ratio= Total Debt Capital Employed

TABLE 11

(Rs in lakhs)

Sl. No. 1 2 3

Year 2009-10 2010-11 2011-12

Total Debt 28499.55 23378.09 24689.62

Capital Employed 69673.71 74483.02 82198.6

Debt Ratio 0.41 0.31 0.30

(Source: secondary data companys financial statement) Analysis:The above table shows that in the year 2009-10 debt ratio was 0.41, it was 0.31 in the year 2010-11 and 0.30 in the year ending 2012

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Financial Performance Analysis at KSRTC GRAPH 11: DEBT RATIO

(Source: Table 11)

Interpretation: The Debt Ratio less than 1 indicates that the company has more asset than debt. In the above 3 years the Debt Ratio is less than 1; hence the companys risk level is low.

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Financial Performance Analysis at KSRTC


FIXED ASSET TO NET WORTH RATIO

Fixed assets to Net worth ratio is a ratio measuring the solvency of a company.It indicates the extent to which the owners' cash is frozen in the form of fixed assets, such as land, building, machinery, plant and equipment to the extent which funds are available for the company's operations.

Fixed Assets to Net Worth = Fixed Assets Net Worth

TABLE 12 Sl. No. 1 2 3 Year 2009-10 2010-11 2011-12 Fixed asset 134027.63 160374.32 182026.09 Net worth 98906.6 102893.56 106880.52

(Rs in lakhs) Fixed Asset to Net worth ratio 1.36 1.56 1.70

(Source: secondary data companys financial statement)

Analysis: The above table reveals that the fixed asset to net worth ratio was 1.5 in 2009-10, increased by 0.16 in the year 2010-11 i.e. to 1.66 and at the year ending it is increased to 1.76.

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Financial Performance Analysis at KSRTC


GRAPH 12: FIXED ASSET TO NET WORTH RATIO

(Source: Table 12)

Interpretation: As above graph showing that fixed asset to net worth ratio is increasing every year, KSRTC as a government company should invest more on fixed assets to improve its solvency position.

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Financial Performance Analysis at KSRTC Chapter 3: FINDINGS


1. There is an increase in profit over loss of previous years which shows the satisfactory performance. 2. The current ratio is not up to the standard ratio of 2:1 and it is decreasing year by year and it is clear that the liquidity position of the company is not satisfactory 3. The fixed asset ratio indicates that the firm has made more investments in the fixed asset from the year 2009. 4. The Cash ratio indicateslowlevel of liquidity. 5. There is a new launch of vehicles every year depend upon the preferences and demand of the passengers. 6. Corporation has got the Jn-NURM Scheme for the development and up gradation of its services. 7. KSRTC is introducing more and more eco friendly buses which are good for environment. 8. Reserve funds are showing raising trend from 2009-10 to 2010-11 it is clear that company having huge reserves and it can be used in productive operations of the organization, later decreased in the year 2011-12. 9. The Non-operating expense of the company has increased during the year which results in decrease of net profits.

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Financial Performance Analysis at KSRTC Chapter 4: SUGGESTIONS


1. As liquidity position is not good, the company has to make use of reserves and surplus money for its working capital requirements. 2. The organization should make use of excessive investment. The fixed asset for the purpose of arrangement of bus facility to far and interior areas where facilities are not proper. 3. Expansion of computerization through wide area network for the financial management in the organization. 4. The corporation should offer services on the basis of contract which attract new customers for its development. 5. KSRTC has to improve its operating profit by controlling all the operating and non operating expenses through proper identification i. Operating expenses like repairs and maintenance costs and employee cost has to be controlled. ii. KSRTCs biggest assets their bus that has a life of 5-8 years has to be replaced without giving much depreciation effect. iii. KSRTC should employ its own maintenance experts rather than hiring services of outsiders where their services charged are high. Therefore by controlling repairs and maintenance costs and employee cost (reducing allowance) it can bring down operating expenses by 10-20%. 6. The company must strike a balance between current assets and current liabilities to improve the solvency position 7. The company should take more environment friendly actions through its operations to attract more number of passengers. 8. KSRTC should improve its working capital position by improving the status of current assets in the company i. Liquid assets such as cash at hand, bank and marketable securities has to be maintained sufficiently to meet its immediate obligations

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Financial Performance Analysis at KSRTC


ii. KSRTC has to recover its receivables, thereby it reduce the sundry debtors. iii. For KSRTC there is an urgent need to modernize and improve the system in divisions to increase its profitability. 9. The company should concentrate more on rural areas to get greater competitive advantage over private companies.

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Financial Performance Analysis at KSRTC Chapter 5:CONCLUSION


KSRTC is the oldest and well established public limited company which has made a sufficient name and fame in the minds of public for its services offered. KSRTC has a very good reputation for its brand name and also for quality service. Based on the evaluation method the project may be concluded that the ratio analysis has helped in analyzing its performance by using various financial tools. It provides an easy way to compare present performance with the past and to make future projections. As we went about doing these ratios it has helped to understand the rationale performance of the organization and immense help in judging strengths and weakness, where there is proper arrangement of buses and other facilities. So KSRTC can make the same in all the places of Karnataka. From the study it is clear that the organization has not being maintained good liquidity position, as its current liabilities are more than the current asset and it is a sign of negative working capital. The company has future scope to improve its operational efficiency and profitability. The expenses should be decreased and controlled so that the profits for company the will be more. Even though it is public sector and the most probably all transaction will be held in cash, it is advisable for the corporation to maintain the good working capital position in order to induce growth and profitability.

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