Summer Training Project Report

On
Intra firm Ratio Analysis of Financial Statements of
Bharti Realty Holdings Ltd.

Submitted in partial fulfillment of the requirements

For the award of the degree of
Bachelor of Commerce (H) programme
Submitted By:
Archita Mishra
BCOM (H) 5thSem
Roll No.: 00196788815
Batch (2015-2018)
External Guide: Internal Guide:
Mr. Sachin Sahdev Mr. Varun Batra

Kamal Institute of Higher Education and Advance Technology

K-1 Extension, Mohan Garden, New Delhi 110059
(Affiliated to GGSIPU, Delhi)
 DECLARATION

This is to certify that I have completed the Summer Training Project titled Intra firm
Ratio Analysis of Financial Statements of Bharti Realty Holdings Ltd. Under the
guidelines of Mr. Sachin Sahdev in partial fulfillment of the requirement for the
award of degree of Bachelor of Commerce (h) at Kamal Institute of Higher Education
And Advanced Technology, Delhi. This is an original piece of work & I have not
submitted it earlier elsewhere.

Archita Mishra
00196788815

i
 ACKNOWLEDGEMENT
I would like to express my deep sense of gratitude to Bharti Realty Holdings Ltd.
who gave me this opportunity to work with this prestigious organization as a summer
trainee. They motivated me to perform well and helped me to understand my role and
responsibilities. I feel grateful to them for being my mentor. It has been pleasant and
immensely valuable learning experience for me.

I would also like to thank my faculty guide whose support and suggestion has helped
me to complete this project successfully. This project would not have started and
much less completed without the encouragement and support of my faculty guide Mr.
Varun Batra without whose valuable insights the project would not have seen
daylight.

Finally, I would also like to thank all my dear friends for their kind cooperation,
advice and encouragement during the long and arduous task of preparing this report
and carrying out the project. At last but not the least, I would like to acknowledge my
dear family members whose blessings, inspiration and encouragement have resulted
in the successful completion of the project

Archita Mishra Mr. Varun Batra

00196788815
B.com (H)
5thsem

ii
 TABLE OF CONTENTS

S.No. Topics Page No.

1 Chapter 1 INTRODUCTION
1.1 Industry Profile 1

1.2 Company Profile 5

1.3 Members of Top Management 6

1.4 Milestones of the company 7

2 Chapter 2 RESEARCH METHODOLOGY

2.1 Data collection 12

2.2 Methodology used 13

2.3 Objectives of the Study 14

2.4 Scope of the Study 15

3 Chapter 3 DATA ANALYSIS & FINDINGS

3.1 Data Analysis and Interpretation 23

3.2 Findings of the Study 28

4 Chapter 4 CONCLUSION
4.1 Conclusion 29

4.2 Limitations of the Study 30

4.3 Recommendations 32

5 BIBLIOGRAPHY 33

6 ANNEXURE

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 LIST OF FIGURES

CHAPTER NO FIGURE NO PAGE NO

3 3.1

3 3.2

3 3.3

3 3.4

3 3.5

3 3.6

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 INDUSTRY PROFILE
Real Estate Industry
Introduction
The real estate sector is one of the most globally recognised sectors. In India, real
estate is the second largest employer after agriculture and is slated to grow at 30 per
cent over the next decade. The real estate sector comprises four sub sectors - housing,
retail, hospitality, and commercial. The growth of this sector is well complemented by
the growth of the corporate environment and the demand for office space as well as
urban and semi-urban accommodations. The construction industry ranks third among
the 14 major sectors in terms of direct, indirect and induced effects in all sectors of
the economy.
It is also expected that this sector will incur more non-resident Indian (NRI)
investments in both the short term and the long term. Bengaluru is expected to be the
most favoured property investment destination for NRIs, followed by Ahmedabad,
Pune, Chennai, Goa, Delhi and Dehradun.

Market Size
The Indian real estate market is expected to touch US$ 180 billion by 2020. The
housing sector alone contributes 5-6 per cent to the country's Gross Domestic Product
(GDP).
In the period FY2008-2020, the market size of this sector is expected to increase at a
Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality and
commercial real estate are also growing significantly, providing the much-needed
infrastructure for India's growing needs.
The private equity investments in real estate increased 26 per cent to a nine-year high
of nearly Rs 40,000 crore (US$ 6.01 billion) in 2016.
Sectors such as IT and ITeS, retail, consulting and e-commerce have registered high
demand for office space in recent times. The office space absorption in 2016 across
the top eight cities amounted to 34 million square feet (msf) with Bengaluru recording
the highest net absorption during the year. Information Technology and Business
Process Management sector led the total leasing table with 52 per cent of total space
uptake in 2016. Mumbai is the best city in India for commercial real estate

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investment, with returns of 12-19 per cent likely in the next five years, followed by
Bengaluru and Delhi-National Capital Region (NCR).

Investments
The Indian real estate sector has witnessed high growth in recent times with the rise in
demand for office as well as residential spaces. The real estate sector in India is
expected to attract investments worth US$ 7 billion in 2017, which will rise further to
US$ 10 billion by 2020. India has been ranked fourth in developing Asia for FDI
inflows as per the World Investment Report 2016 by the United Nations Conference
for Trade and Development. According to data released by Department of Industrial
Policy and Promotion (DIPP), the construction development sector in India has
received Foreign Direct Investment (FDI) equity inflows to the tune of US$ 24.29
billion in the period April 2000-March 2017.
Some of the major investments in this sector are as follows:

International Finance Corporation (IFC) will invest US$ 200 million in

Housing Development Finance Corporation Ltd (HDFC) via five-year non-
convertible debentures (NCDs) or masala bonds which will be used by HDFC
to provide loans for affordable housing projects across India.
Ascendas-Singbridge Group, a property development company based in
Singapore, has purchased six warehouses from Arshiya Limited for a
consideration of Rs 534 crore (US$ 83 million), of which Rs 434 crore (US$
67 million) would be paid on signing the definitive agreement, and the balance
over four years on the attainment of certain targets.
Godrej Properties Ltd has tied up with Taj Palaces Resorts Safaris for
developing its mixed-use project called 'The Trees', spread across 9.2 acres,
that will include a 150-room Taj Hotel, a luxury residential property called
'Godrej Origins' as well as a high-street retail court.
MotilalOswal Real Estate, a real estate-focused investment subsidiary of
MotilalOswal Private Equity Advisors Pvt Ltd, is planning to invest Rs 800
crore (US$ 124 million) in FY 2017-18 in mid-income residential projects as
well as commercial office projects.
Xander, a Private Equity Group, has signed two major property deals, which
includes a special economic zone worth Rs 2,290 crore (US$ 354.95 million)

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 in Chennai and a 2 million sqft mall in Chandigarh for Rs 700 crore (US$
108.5 million).
Canada Pension Plan Investment Board (CPPIB), the Canadian pension asset
manager, has entered into a non-binding agreement with Island Star Mall
Developers (ISML), a subsidiary of Phoenix Mills, to acquire up to 49 per cent
in ISML in the next three years.
Altico Capital, a non-banking finance company (NBFC), has teamed up with
American private equity firm KKR & Co LP to invest Rs 435 crore (US$
65.25 million) in a 66-acre residential township, being developed by SARE
Homes in Gurgaon.
Gurgaon-based property search aggregator Square Yards Consulting Pvt Ltd
has raised US$ 12 million from the private equity arm of Reliance Group for
strengthening its team and expanding its presence to more than 25 countries.
Rising Straits Capital plans to raise US$ 100 million to capitalize its real
estate-focused non-banking financial company (NBFC), Rising Straits Finance
Co. Pvt. Ltd.
A joint venture between Dutch asset manager APG Asset Management and
real estate asset platform Virtuous Retail, has acquired a portfolio of three
shopping malls for US$ 300 million, and has committed an additional US$
150 million as equity capital to expand the portfolio.

Government Initiatives
The Government of India along with the governments of the respective states has
taken several initiatives to encourage the development in the sector. The Smart City
Project, where there is a plan to build 100 smart cities, is a prime opportunity for the
real estate companies. Below are some of the other major Government Initiatives:

The Delhi Government has declared 89 out of 95 villages in Delhi as urban

areas which will ease the operationalizing of the land pooling policy, thereby
giving a boost to affordable housing in Delhi.
The Reserve Bank of India (RBI) has proposed to allow banks to invest in real
estate investment trusts (REITs) and infrastructure investment trusts (InvITs)
which is expected to benefit both real estate and banking sector in diversifying
investor base and investment avenues respectively.

3
 The Ministry of Housing and Urban Poverty Alleviation has sanctioned the
construction of 84,460 more affordable houses for urban poor in five states,
namely West Bengal, Jharkhand, Punjab, Kerala and Manipur under the
Pradhan Mantri Awas Yojana (Urban) scheme with a total investment of Rs
3,073 crore (US$ 460 million).

Road Ahead
The Securities and Exchange Board of India (SEBI) has given its approval for the
Real Estate Investment Trust (REIT) platform which will help in allowing all kinds of
investors to invest in the Indian real estate market. It would create an opportunity
worth Rs 1.25 trillion (US$) in the Indian market over the years. Responding to an
increasingly well-informed consumer base and, bearing in mind the aspect of
globalisation, Indian real estate developers have shifted gears and accepted fresh
challenges. The most marked change has been the shift from family owned businesses
to that of professionally managed ones. Real estate developers, in meeting the
growing need for managing multiple projects across cities, are also investing in
centralised processes to source material and organise manpower and hiring qualified
professionals in areas like project management, architecture and engineering.
The growing flow of FDI into Indian real estate is encouraging increased
transparency. Developers, in order to attract funding, have revamped their accounting
and management systems to meet due diligence standards.

4
 COMPANY PROFILE
Bharti Realty Holdings Ltd.
BHARTI REALTY HOLDINGS LIMITED is an unlisted public company
incorporated on 08 December, 2003. The registered office of the company is at 3rd
Floor, World mark 2, Asset 8, Aeorcity, NH-8, New Delhi, South West Delhi, Delhi.

Bharti Realty Limited is the young and vibrant real estate arm of Bharti Enterprises, a
leading business group with interests in telecom, agri business, financial services and
manufacturing.
Bharti Realty has demonstrated proficiency in developing and managing over 5
million sq. ft. of Grade-A commercial real estate space. Some of our award-winning
developments like Bharti Crescent, New Delhi; Airtel Centre, Gurgaon and World
mark, New Delhi are already advancing the industry standard. Following this
impressive track record, Bharti Realty is currently developing another 6 million sq. ft.
of residential and commercial real estate space across prominent cities in the country.
The total paid-up capital is INR 25.18 cr. The company also has secured loans in the
amount of 12.07 lac.
The last reported AGM (Annual General Meeting) of the company, per our records,
was held on 30 September, 2016. Also, as per our records, its last balance sheet was
prepared for the period ending on 31 March, 2016.
The company has 8 directors/key management personnel.
Bharti Realty has been affirmed as a leader in the real estate sector at both national
and international forums. Prestigious awards like India's Most Admired Brand,
FIABCI Prix d excellence award, CNBC Awaaz CRISIL CREDAI and Zee Business
RICS Real Estate Award have bolstered the brands market value and set it apart
from competitors.
As a responsible community member, Bharti Realty recognizes the positive impact
that design can have towards preserving the environment. The company aims to
continue its impeccable journey by obtaining the Leadership in Energy and
Environmental Design (LEED) Standards certification for all forthcoming projects.

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 Vision
The company envisions to become the most admired real estate developer.
The guiding principles of company are:

Have the most engaged and empowered workforce

Attain the highest degree of customer trust

Pursue incessant innovation

Champion green developments

Key Market Sectors

Bharti Realty is the in-house real estate arm for Bharti Group and facilitates by extending
support to the Group Companies for identifying, developing and maintaining real estate.

Company majorly work in leasing & financing, buys land and start there new projects.

Board of Directors

Name Designation
BASHIRALI ABDULLA CURRIMJEE Director

RAKESH BHARTI MITTAL Managing director

RAVINDER ARORA CFO

RAJAN BHARTI MITTAL Managing director

RAVI KUMAR KAUSHAL Director

HARJEET SINGH KOHLI Director

RAJIV KUMAR CHAUDHRI Director

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Milestones of the company
Bharti Realty has been recognized time and again as India's leading real estate
developer at national and international fora. These awards have confirmed our
position as a leader amongst the country's top real estate companies.

ZEE BUSINESS - RICS REAL ESTATE AWARD 2011

Bharti Realty has been awarded the Zee Business RICS Real Estate Award 2011 as
Best Office Project (National) Self Occupied for Airtel Centre. The prestigious
award was received from the Honorable Minister for Urban Development.

ANNUAL ESTATE AWARDS 2014

World mark has been awarded as the "Commercial Property of The Year (National)"
and "Environment Friendly Project of The Year (National)" at the 7th Annual Estate
Awards 2014.

IMAGES SHOPPING CENTRE AWARD 2015

Pavilion, Ludhiana has been honored with the Most Admired Shopping Centre
Launch Award (North India) at Shopping Centre Awards ceremony for the launch and
marketing campaign conducted by the mall during the financial year 2014-15.

ESTATE AVENUE AWARDS 2015

Bharti Realty won three awards at the annual Estate Avenue Awards ceremony:
Most Promising Upcoming Project of The Year Bharti Realty for World mark, New
Delhi Top Real Estate Professional of The Year Mr. SK Sayal (MD and CEO,
Bharti Realty)Best Sustainable Environment-Friendly Commercial Project of The
Year - Bharti Realty for World mark, New Delhi

ANNUAL ESTATE AWARDS 2015

Pavilion has been awarded the "Retail Property of The Year (North)" while Bharti
Realty has been awarded "Developer of The Year - Mixed Use (National)" at the 8th
Annual Estate Awards 2015.

7
World Leadership Federation 2016
Bharti Realty Limited has been recognized as the Employer of the Year by World
Leadership Federation at their India Leadership Awards 2016 ceremony held on 30th
November 2016 at The Leela, Mumbai. The award recognizes the excellence shown
in Bharti Realtys people practices and HR frameworks which drive employee
engagement, high performance environment, training & development, rewards and
recognitions culture and other initiatives that foster talent management and capability
building in the organization.

Most Admired Brand 2016-17

Bharti Realty has been awarded the 'Most Admired Brand 2016-17' Award in the Real
Estate Category.

Dream Companies to Work for 2016-17

Bharti Realty Holdings Ltd. was recognized as one of the Top 100 Dream Companies
to Work For (2016-17), by World HRD Congress, in association with Times Ascent.
The company was especially recognized for its innovative and robust HR practices
across talent management, employee, training & development and rewards &
recognition.

11th CNBC AWAAZ Real Estate Awards 2016-17

World mark, aero city has won the 'Best Commercial Project' award at the 11th
CNBC AWAAZ Real Estate Awards 2016-17. A multi-phase and multi-city survey
was conducted to identify India's most preferred projects and World mark emerged as
the winner. The prestigious awards ceremony was marked by the presence of Shri
Nitin Gadkari, Minister of Shipping, Road Transport and Highways.

Great Place to Work-Certified 2017

Bharti Realty has successfully accomplished the milestone of building a high-trust,
high-performance culture and is now Great Place to Work-Certified

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 INTRODUCTION
Finance Department is the part of an organization that manages its money. The
business functions of a finance department typically include planning, organizing,
auditing, accounting for and controlling its company's finances. The finance
department also usually produces the company's financial statements.

Corporate finance consists of the financial activities related to running a corporation,

usually with a division or department set up to oversee the financial activities.
Corporate finance is primarily concerned with maximizing shareholder value through
long-term and short-term financial planning and the implementation of various
strategies. Everything from capital investment decisions to investment banking falls
under the domain of corporate finance.

Among the financial activities with which a corporate finance department is involved
are capital investment decisions. Should a proposed investment be made? How should
the company pay for it with equity or with debt, or a combination of both? Should
shareholders be offered dividends on their investments in the company? These are just
some of the questions a corporate financial officer attempts to answer on a consistent
basis. Short-term issues include the management of current assets and current
liabilities, inventory control, investments and other short-term financial issues. Long-
term issues include new capital purchases and investments.

The finance department manages and regulates the state economy and finances
through taxation, financial legislation, financial institutions, capital markets, center
and state finances, and the State Budget.

Major functions of the Finance Department include the following

1. Framing of rules regulating the pay, leave and pension of persons in the
service of the Government and rules regulating the number, gradings or cadre
and emoluments of posts under the Government and also be responsible for
seeing that these rules are properly applied.
2. Finance Department is responsible for all matters relative to financial
procedure and the application of the principles of sound finance.

9
 3. Advise on the financial aspect of all transactions relating to loans granted by
the Government.
4. Department shall be in charge of all matters relating to the service of loans or
the discharge of guarantees.
5. Ensure that proper financial rules are framed for the guidance of other
departments and that suitable accounts, including commercial accounts,
whatever necessary, are maintained by other departments and establishments
subordinate to them.
6. Prepare an estimate of the total receipts and disbursements of the State in each
year and watching the state of the Government's balances and for their ways
and means operations.
7. Preparation of Budgets and supplementary estimates.
8. Advise departments responsible for the collection of revenue regarding the
progress of collection and methods of collection employed

The real estate sector in India assumed greater prominence with the liberalisation of
the economy, as the consequent increase in business opportunities and labour
migration led to rising demand for commercial and housing space. At present, the real
estate and construction sectors are playing a crucial role in the overall development of
Indias core infrastructure. The real estate industrys growth is linked to developments
in the retail, hospitality and entertainment (hotels, resorts, cinema theatres) industries,
economic services (hospitals, schools) and information technology (IT)- enabled
services (like call centres) etc. and vice versa.
The Indian real estate sector has traditionally been dominated by a number of small
regional players with relatively low levels of expertise and/or financial resources.
Historically, the sector has not benefited from institutional capital; instead, it has
traditionally tapped high net-worth individuals and other informal sources of
financing, which has led to low levels of transparency. This scenario underwent a
change with in line with the sectors growth, and as of today, the real estate industrys
dynamics reflect consumers expectations of higher quality with Indias increasing
integration with the global economy.
Bharti Realty Limited is the young and vibrant real estate arm of Bharti Enterprises.
Bharti Realty has demonstrated proficiency in developing and managing over 5
million sq. ft. of Grade-A commercial real estate space. Some of our award-winning

10
developments like Bharti Crescent, New Delhi; Airtel Centre, Gurgaon and World
mark, New Delhi are already advancing the industry standard.
Ratio analysis is a useful management tool that will improve the understanding of
financial results and trends over time, and provide key indicators of organizational
performance. Managers will use ratio analysis to pinpoint strengths and weaknesses
from which strategies and initiatives can be formed. Funders may use ratio analysis to
measure the results against other organizations or make judgments concerning
management effectiveness and mission impact.

For ratios to be useful and meaningful, they must be:

Calculated using reliable, accurate financial information.
Calculated consistently from period to period.
Used in comparison to internal benchmarks and goals.
Used in comparison to other companies in the industry.
Viewed both at a single point in time and as an indication of broad trends and
issues over time.
Carefully interpreted in the proper context, considering there are many other
important factors and indicators involved in assessing performance.

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 RESEARCH METHODOLOGY
Data
Data is a set of values of qualitative or quantitative variables; restated, pieces of
data are individual pieces of information. Data is measured, collected and reported,
and analyzed, whereupon it can be visualized using graphs or images. Data as a
general concept refers to existing information or knowledge is represented or
coded in some form suitable for better usage or processing.

Data Collection
A. Primary data
Primary research consists of a collection of original primary data collected by the
researcher. It is often undertaken after the researcher has gained some insight into the
issue by reviewing secondary research or by analyzing previously collected primary
data. It can be accomplished through various methods, including questionnaires and
telephone interviews in market research, or experiments and direct observations in
the physical sciences, amongst others.

B. Secondary data

Secondary data is data collected by someone other than the user. Common sources
of secondary data for social science include censuses, organizational records
and data collected through qualitative methodologies or qualitative research. Secondary
data analysis saves time that would otherwise be spent collecting data and, particularly in
the case of quantitative data, provides larger and higher-quality databases that would be
unfeasible for any individual researcher to collect on their own. In addition, analysts of
social and economic change consider secondary data essential, since it is impossible to
conduct a new survey that can adequately capture past change and/or developments.

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Methodology Used
The methodology followed by the researcher, during the data analysis of the project
was collected through secondary sources. When an investigator uses the data that has
been already collected by others, is called secondary data. The secondary data could
be collected from journals, reports, and various publications. The advantages of the
secondary data can be it is economical, both in terms of money and time spent.

The data for this study was collected entirely through secondary sources, i.e. from the
financial statements (Profit and Loss Account and Balance Sheet) of the Bharti Realty
Holdings Ltd. for the financial year 2015-16 and it has been compared with its past
financial statement for the financial year 2014-15 to find out the percentage increase
in the current position of the company with its past position using ratio analysis.

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 OBJECTIVES OF THE STUDY
The primary objective was to study the intra firm comparison of financial statements
of the company with special reference to ratio analysis.
The secondary objectives of this study were to identify:
To analysis the financial position of the company using ratio analysis.
To find out how company use its financial resources.
To analyzing the ratios of company.
To analyzing the profitability of the company from its past year profits.
To analyzing the turnover of company with its past financial statements.
To analyze the liquidity of the company using financial statements.
To analyze the solvency of the company using past financial statements.

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 SCOPE OF THE STUDY
The scope of the research is based on the steel industry and it throws light on the intra
firm comparison of financial statements of Bharti Realty Holdings Ltd. with special
reference to ratio analysis.

Significance of the study:

Significance to the industry: My study will help the steel industry to know the current
scenario of Bharti Realty Holdings Ltd. with respect to intra firm comparison of
financial statements of the company using ratio analysis.
Significance for the researcher:
Wide exposure to the real estate industry.
Studying about the intra firm comparison of financial statements of the
company using ratio analysis.

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 INTRODUCTION TO RATIO ANALYSIS

Ratio analysis is a study of relationship among various financial factors in a business.

Ratio analysis is a process of determining and interpreting relationships between the
items of financial statement to provide a meaningful understanding of the
performance and financial position of an enterprise.

Advantages of ratio analysis

It is useful in analysis of financial statement
It is useful in simplifying accounting data.
It is useful in locating the weak area s of operations

Disadvantages of ratio analysis

In ratio analysis, qualitative factors are ignored.
It has lack of standard ratio.
It does not take into account effect of price level changes
Window dressing distorts the effectiveness of ratio analysis.

Types of Ratios
Liquidity Ratios
Solvency Ratios
Activity or Turnover Ratios
Profitability Ratios

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 1. LIQUIDITY RATIOS
Liquidity ratios are those ratios which are computed to evaluate the capacity of the
entity to meet its short term liabilities. These are short term ratios. Liquidity ratios are
of two types:
A. Current Ratio
Current ratio is a relationship of current assets and current liabilities and is computed to assets
the short - term financial position of enterprise. It means current ratio is an indicator of the
enterprise liability to meet its short -term financial obligations. The ideal current ratio is 2:1.
In case it is very high, it shows the idleness of funds.
Computation: Current assets / current liabilities
Current Assets: Current Investments + Inventories (excluding stores and spares and
loose tools) + Trade Receivables (net of provision for doubtful debts) + cash and cash
equivalents + short term loan and advances + other current assets.
Current Liabilities: short - term borrowings + trade payables + other current
liabilities +short-term provisions.

B. Quick Ratio
Quick ratio is a relationship of liquid assets with current liabilities and is computed to
assess the short -term liquidity of the enterprise. Quick ratio is a fairly stringent
measure of liquidity. It is based on those current assets which are highly liquid can be
converted into cash and cash equivalents quickly. Quick ratio of 1:1 is considered as
ideal . Higher the quick ratio, better the short - term financial position
Computation: quick assets / current liabilities
Quick Assets: current assets - inventoriesprepaid expenses.

2. SOLVENCY RATIOS
Solvency ratios are the ratios which show ability of the enterprise to meet its long -
term liabilities. Solvency ratios are of four types:

A. Debt to Equity Ratio

Debt to equity ratio is computed to assets long-term financial soundness of the
enterprise. The ratio expresses the relationship between external equities external
debts and internal equities of the enterprise. In general lower the debt to equity ratio

17
higher the degree of protect ion enjoyed by the lenders.
Computation: Debt / Shareholders Fund
Debt: long -term borrowing + long -term provision
Shareholders Funds: share capital + reserves and surplus

B. Total Assets to Debt Ratio

Total assets to debt ratio establish relationship between total assets and total long -
term debts of the enterprise. This ratio measures the safety margin available to lenders
of long -term debts. It measures the extent to which debt is being covered by assets.
Computation: total assets / Debts
Total Assets: Non - current assets + non - current investments + long - term loans and
advances + current investment + trade receivables + cash and cash equivalents .
Debts: long -term borrowings + long - term provisions.

C. Proprietary Ratio
Proprietary ratio established the relationship between proprietors funds and total
assets. This ratio shows the extent to which total assets have been financed by the
proprietor. Higher the ratio, higher the satisfaction of lenders and creditors.

Computation: Shareholders fund / Total Asset

D. Interest Coverage Ratio

The ratio establishes the relationship between net profit before interest and tax and
interest on long -term debts. This ratio shows how many times the interest charges are
covered by the profits available to pay interest. Higher the ratio, more secure the
lender is in respect of payment of interest regularly.
Computation: Profit before Interest & Tax / Interest on Long Term Debts
Profit before Interest and Ta x: profit after tax + tax + interest

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 3. ACTIVITY OR TURNOVER RATIOS
Activity ratios also termed as performance or turnover ratios measures how well the
resources have been used by the enterprise. In other words, ratios measure the
effectiveness with which the enterprise uses its available recourses. Activity ratios are
of four types:

A. Inventory Turnover Ratio

Inventory turnover ratio established relationship between costs of revenue from
operations or cost of goods sold and average inventory between the periods. This ratio
measures how fast inventory is moving and generating sales. Higher the ratio, more
efficient management of inventories and vice versa.
Computation: Cost of Goods Sold / Average Stock
Average Stock: Opening Stock + Closing Stock / 2

B. Debtors Turnover Ratio

This ratio shows efficiency in the collect ion of amount due from trade receivables.
Higher the ratio, better it is since it indicates that debts are being collected more
quickly. Trade receivables means debtors plus bills receivables, provisions for
doubtful debts are not deducted.
Computation: Net Credit Sales / Average Receivables
Average Receivables: Opening Debtors + Opening bill receivables + closing debtors
+ closing bill receivables

C. Creditors Turnover Ratio

It shows the number of times the creditors are turned over in relation to purchases. A
higher turnover ratio or shorter payment period shows the availability of less credit or
yearly payments. Trade payables mean creditors plus bills payables
Computation: Net Credit Purchase / Average Payables
Average Payables: Opening creditors + opening bill payables + closing creditors +
closing bill payables / 2.

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 D. Working Capital Turnover Ratio
This ratio shows the number of times working capital has been employed in the
process of carrying on business. Higher the ratio, better the efficiency in the
utilization of working capital.
Computation: Sales / Working Capital

4. PROFITABILITY RATIOS
Efficiency in business is measured by profitability. Accounting ratios measuring the
profitability are known as profitability ratio. Profitability ratios are of five types:
A. Gross Profit Ratio
This ratio indicates the relationship between gross profit and net sale s. Higher the
ratio , lower the cost of goods sold.
Computation: Gross Profit * 100 / sales
Gross Profit: revenue from operationscost of revenue from operations.
Cost of Revenue from Operations: opening inventory (excluding stores and shapes
loose tools) + net purchases + direct expenses closing inventory (excluding stores
and shapes and loose tools).

B. Operating Ratios
This ratio calculated to assess the operational efficiency of the business. A decline in
the operating ratio is better because it means higher margin, and thus, more profit.

Computation: Cost of revenue from operations + operating expenses / Revenue from

operation * 100
Operating Profit Ratio
The objective of computing this ratio is to determine the operational efficiency of
management.
Computation: Operating profit / Revenue from operations
Operating Profit: net profit (before tax) + non-operating expensesnon-operating
Income.

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 C. Net Profit Ratio
It indicates overall efficiency of the business. Higher the net profit ratio, better the
business Computation: Net profit after tax / Revenue from Operations.
Net Profit after Tax: gross profit + other incomeindirect expensestax.

D. Return on Investment or Return on Capital Employed

It assesses the overall performance of the enterprise. It measures, how efficiently the
resources entrusted to the business are used.

Capital Employed: share capital + reserve and surplus + long term borrowings +
long-term provision (assume that all non current investments are trade investment.
Interest on non-trade investments should be deducted from profit before interest, tax,
and dividend).
Computation: Profit before Interest, Tax and Dividends / Capital Employed

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 DATA ANALYSIS
1. LIQUIDITY RATIOS

A. Current Ratio
Computation: Current assets / current liabilities

Particulars 2014-15 (Amount in 2015-16 (Amount in

rupees) rupees)

Current Assets 103889996 216638141

Current Liabilities 178051810 210762466

Current Ratio 0.58:1 1.02:1

250000000

200000000

150000000
2015
100000000
2016
50000000 2016
0
2015
current assets
current
liabilities

Figure 3.1 current ratio

Interpretation: Company C/R has been increased which show that current solvency
Situation has not been in under stress.

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 B. Quick Ratio

Computation: quick assets / current liabilities

Particulars 2014-15 (Amount in 2015-16 (Amount in

rupees) rupees)

Quick Assets 102191828 215235587

Current Liabilities 178051810 210762466

Quick Ratio 0.57:1 1.02:1

250000000

200000000

150000000
2015
100000000
2016
50000000 2016
0
2015
quick assets
current
liabilities

Figure 3.2 quick ratio

Interpretation: Company Q/R has been increased which show that current solvency situation
has not been under stress as compare to last year that is 2014-15.

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 2. SOLVENCY RATIOS

A. Debt to Equity Ratio

Computation: Debt / Shareholders Fund

Particulars 2014-15 (Amount in 2015-16 (Amount in

rupees) rupees)

Debt 119351388 195847591

Shareholders funds 10536180115 10447621700

Debt to equity ratio 0.011:1 0.018:1

1.2E+10

1E+10

8E+09
shareholders fund
6E+09 debt
4E+09

2E+09

0
2015 2016

Figure 3.3 debt equity ratio

Interpretation: Company is utilizing more of long term debts rather than the
Shareholders funds. Lower the debt-equity ratio higher the degree of protection enjoyed by
the lenders.

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 B. Total Assets to Debt Ratio

Computation: total assets / Debts

Particulars 2014-15 (Amount in 2015-16 (Amount in

rupees) rupees)

Total Assets 10809906561 10770528946

Debts 119351388 195847591

Total Assets to Debt 90.57:1 55:1

Ratio

1.2E+10

1E+10

8E+09
total assets
6E+09 debt

4E+09

2E+09

0
2015 2016

Figure 3.4 total asset to debt ratio

Interpretation: as the total asset to debt ratio is decreasing which shows low investment by
the proprietors

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 C. Proprietary Ratio

Computation: Shareholders fund / Total assets

Particulars 2014-15 (Amount in 2015-16 (Amount in

rupees) rupees)

Shareholders fund 10536180115 1044721700

Total Assets 10809906361 10770528946

Proprietory 0.974 0.970

Ratio

1.2E+10
1E+10
8E+09
6E+09 2015

4E+09 2016
2E+09 2016
0
2015
shareholders fund
total assets

Figure 3.5 proprietary ratio

Interpretation: Proprietary ratio is decreasing with a slight fall. Reducing the satisfaction
level of lenders & creditors.

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 3. Activity/ turnover ratio

A. Working Capital ratio:

Computation: Sales / Working Capital

Particulars 2014-15 (Amount in 2015-16 (Amount in

rupees) rupees)

Sales 608970053 639328391

Working Capital 74161814 5875675

Working Capital 8.21:1 108.8:1

Turnover Ratio

100%
98%
96%
94%
working capital
92%
90% sales
88%
86%
84%
82%
2015 2016

Figure 3.6 working capital ratio

Interpretation: Working capital turnover ratio is increasing so efficiency in the

Utilization of working capital is better.

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 FNDINGS OF THE STUDY
Company C/R has been increased which show that current solvency situation
has not been under stress .
Company Q/R has been increased which show that current solvency situation
has not been under stress as compare to last year that is 2014-15.
Lower the debt-equity ratio higher the degree of protection enjoyed by the
lenders. Ratio has increased from the last year.
total asset to debt ratio is decreasing which shows low investment by the
proprietors
Proprietary ratio is decreasing with a slight fall. Reducing the satisfaction level
of lenders & creditors
the company was in losses in both the financial year i.e. 2014-15 & 2015-16
so the profitability ratios & interest coverage ratio was not calculated.
The companys business doesnt involve inventories as mentiotioned in their
financial statements.

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CONCLUSION

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 LIMITATIONS OF THE STUDY
Lack of time and resource constraints.
The scope of the project is limited to the only Bharti Realty Holdings Limited
only.
This study used only secondary data.
Secondary data used from websites and financial statements which may not be
correct or manipulate/distort by someone.
This study is very time consuming and no reliability is there.
It was hard convincing the company to share there financial statements with
me , as its a private company.

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 RECOMMENDATIONS
The company should try to increase its quick assets by increasing its cash and
bank balances, so that it can increase its quick ratio by stabling its current
assets.
Company should utilize its long term debts rather than shareholders fund
because of its fixed expense on the profit and loss account and balance sheet.
The company should work on its operations effectively and efficiently so that
it can earn more profit so as to pay its fixed interest expenses easily.
The company should try to decrease its gross loss either by increasing its sales
or by decreasing its direct expenses or cost of goods sold.
The company should try to increase its operational efficiency, so that its
management efficiency can increase in a positive way.
The company should utilize the funds in a proper and in a profitable manner,
so that it can provide better return to its shareholders and investors.

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 BIBLIOGRAPHY

BOOKS/ JOURNALS
TS Gerewals analysis of financial statements
JR Monga
Girish Ahuja
Business Today
Economic times

WEBSITES
http://www.bhartirealty.com/awards
http://www.bhartirealty.com/company/overview
http://www.investopedia.com/terms/c/corporatefinance.asp
http://www.businessdictionary.com/definition/finance-department.html
https://www.saplingfinancial.com/blog/company_finance_department/
https://communitymedicine4asses.wordpress.com/2013/01/07/types-of-data-
primary-and-secondary-data/

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