INTRODUCTION
Finance is one of the foundations of all kinds of economic activities. It is the master
key, which provides access to all the sources for being employed in manufacturing and
merchandising,. Hence it is rightly said that finance is the lifeblood of any enterprise, besides
being the scarcest elements, it is also the most indispensable requirement. Without finance
neither any business can be started nor successfully run. Provision of a sufficient fund at the
required time is the key to success of concern. As matter of fact finance may be said to be the
circulatory system of economic body, making possible the needed co-operation among units
of the activity.
FINANCIAL MANAGEMENT:
Financial Management emerged as a distinct field of study at the turn of this century.
Many eminent persons defined it in the following ways.
DEFINITION:
According to GUT HMANN AND DOUGHAL:” Business finance can broadly be
defined as the activity concerned with planning, rising, controlling and administering of used
in the business”.
FINANCIAL FUNCTION:
The finance functions of rising funds, investing them in assets and distributing returns
earned from assets to shareholders are respectively known as financing, investment and
dividend decision. While performing these functions, a firm attempts to balance cash inflows
and outflows.
Investment Decision:
Investment or capital budgeting involves the decision of allocation of cash or
commitment of funds to long-term assets, which would yield benefits in future. It involves
measurement of future profitability, which involves risk, because of uncertain future-
Investment proposal should therefore be evaluated in terms of both expected return and risk.
Other major aspect of investment decision is the measurement of standard of hurdle rate
against which the expected return of new investment can be compared.
Financing Decisions:
Financing decision is the important function to be performed by the fir. Broadly, he
must decide when, where, and how to acquire funds to meet the firm investment needs. He
has to determine the proportion of debt and equity. This mix of debt and equity is known as
the firm ‘capital structure.’ The financial manager must strive to obtain the lest financing mix
or the ‘optimum capital structure’ where the market value of share is maximized.
Dividend Decision:
It is the third major financial decision. The financial manager decides whether the firm
should distribute all profits, or return them or distribute a portion and return the balance. The
optimum dividend policy should be determined where is maximize the market value of the
share.
Liquidity Decision:
Current assets management, which affects firm’s liquidity, is yet another finance
function in addition to the management of long-term assets. Current assets should be
managed effectively safeguarding the firm against the dangers of liquidity and insolvency.
Investment in current assets affects the profitability, liquidity, and risk. A conflict exists
between profitability and liquidity while managing current assets. If the firm doesn’t vest
sufficient funds in current assets it may. Become illiquid. But it could loose profitability, as
idle CA would not earn anything. Thus a proper takeoff must be achieved between
profitability and liquidity, In order to ensure that neither insufficient nor unnecessary funds
are invested in current assets.
Maximize the value of the firm to its equity shareholders. This means that the goal of
the firm should be to maximize the market value of its equity shares
(Which represent the value of the firm to its equity shareholders)
Maximization of profit.
Maximization of earning per share.
Maximization of return on equity (defined as equity earning/net worth).
Maintenance of liquid assets in the firm.
Ensuring maximum operation efficiency through planning, directing and
controlling of the utilization of the funds i.e., through the effective employment of
funds.
Enforcing financial discipline in the use financial resources through the
coordination of the operation of the various divisions in the organization.
Building up of adequate reserves for financing growth and expansion.
Ensuring a fair to the shareholders on the investment.
The key challenges for the finance manager in India appear to be in the following
areas:
Investment planning
Financial structure
Treasure operations
Foreign Exchange
Investor Communication
Management control
INDUSTRIAL PROFILE
Additionally, mango is a preferred fresh fruit within the Indian domestic market, as
well as globally. Mango is in strong demand within the worldwide retail sector. The total
market value of Indian mango and mango pulp represents 25% of the value of agricultural
and processed food products exported by India. Moreover, the consumption growth for
mangos in the United States and Europe has average 10–15% per year during the last 5
years. Collectively, these factors indicate a strong opportunity to position Indian mango
and mango products to meet a growing international demand. India is the world’s largest
supplier of mangos, having an annual production of 10.5 million metric tons in 2003.
This accounts for 41% of the estimated worldwide mango production of 25.56
million metric tons in 2003. Despite this large mango production, India is a minor exporter
of mango and mango products at this time. During the five–year period from 1998–2002,
exports of fresh mangos from India averaged approximately 42.4 thousand metric tons, or
only about 0.4% of mango production during this time frame. Data on exports of Indian
mango pulp and juice products are more limited. Data from 1995 indicated that India
exported 37.7 thousand metric tons of mango pulp.
Data from 2001 indicated that India exported 3.2 thousand metric tons of mango
juice, but also imported 2.2 thousand metric tons of mango juice. Collectively, these
observations indicate that, despite being by far the world’s largest mango producer, India
exports less than 1% of its mango crop as fresh mangos or processed mango products.
These observations with mango are consistent with aggregate data available on Indian fruit
and vegetable exports.
A recent report from the Indian Ministry of Food Processing Industries further
details the overly complex supply chain and its contribution to costs and post–harvest
losses. This report concludes that it is imperative to streamline the mango supply chain in
order to reduce wastage and raw material costs. (Sources: India Ministry of Food
Processing Industries and Rambo bank Report).
Education and training in Good Agricultural Practices and other sanitary standards,
as well as employment of certification systems, will lead to better yields, pesticide use in
accordance with regulations, and a more efficient supply chain. PFID—F&V partnerships
will also help identify and facilitate resources necessary for enhancing the mango supply
chain such as cold storage facilities, improved packing and grading facilities, testing
facilities, and logistics management. Furthermore,
A further approach will target reduction of waste in the fresh mango chain by
developing high–value mango products and enhancing processing capacity for the
domestic market. Ultimately, these steps will help stabilize prices, increase farmer
incomes, and development the farmer base at commercial and social levels.
Farmers are not getting fair price, even if there is a rise in prices in global market
PFID-F&V India has continued to forge and strengthen public and private
partnerships to the point that, now, just over one year from project start-up, notable results
are beginning to show in the form on increasing contributions from partnership members.
During this visit, both the Maharashtra State Horticulture Mission and the National
Horticulture Missions’ approvals were secured to begin the critical selection of 100 GAP
demonstration farms, identification of trainers to participate in train-the-trainer courses
and program implementation, as well as the initial survey and audits of the nucleus
demonstration farms in Maharashtra.
To support controlled atmosphere trials of mango for both domestic and export
market purposes
To support training of extension agents from four key mango growing states in
India to replicate mango demonstration model farms in these states
The India team is also engaged in discussion with ITC to cosponsor a packaging
conference on innovations for both fresh and processed mango industries. The goals of
this packaging conference are to expose domestic producers, processors and retailers to
modern food packaging solutions, and to strength market linkages among mango
producers and processors with India-based supermarkets as well as key players in the
export market.
Other opportunities to explore with groups like ITC, ShopRite and similar partners
are establishment of a direct contract program which would include promotion, direct
shipment from packing houses to stores, proper packaging, and early contracting.
Currently, only 1% of the total mango production in India is exported. One reason
contributing to this poor export performance is that overseas buyers have stricter standards
than are currently accepted within the Indian domestic market. PFID—F&V will facilitate
the development and implementation of quality and safety standards which will meet the
demands of the export market.
FOOD PROCESSING
In the year 1982, the food development fund was set up with a view to avail loans for
modernization of the industry.
The food production in the states largely depends upon monsoon. From 1998-03 good
monsoon resulted a larger production of food in the country.
Problems
Food is the second largest agro-based industry in India. The industry provides
employment to about two million skilled and semi-skilled workers besides those who are
employed in ancillary activities, mostly from rural areas. Though the industry contributes a
lot to the socioeconomic development of the nation, it is plagued with a number of problems
such as cyclical fluctuations, high support prices payable to farmers, lack of adequate
working capital, partial decontrol and the uncertain export outlook. Despite the problems, the
industry has good growth potential due to steady increase in food consumption, retail boom
and diversification into areas such as power generation and production of ethanol. In addition
twthis, strong possibilities exist for counter trade, if the Government designs and develops
food industry-oriented policies.
Executive Summary In an era where there is a need for inclusive growth, the
food industry is amongst the few industries that have successfully contributed to the rural
economy. It has done so by commercially utilizing the rural resources to meet the large
domestic demand for food and by generating surplus energy to meet the increasing energy
needs of India. In addition to this, the industry has become the mainstay of the alcohol
industry. The sector supports over 50 million farmers and their families, and delivers value
addition at the farm side1 . In general, food price accounts for approximately 70 percent of
the ex-mill food price2. The sector also has a significant standing in the global food space.
The Indian domestic food market is one of the largest markets in the world, in volume terms.
India is also the second largest food producing geography.
India remains a key growth driver for world food, growing above the Asian
and world consumption growth average. Globally, in most of the key geographies like Brazil
and Thailand, regulations have a significant influence on the food sector. Perishable nature of
cane, small farm landholdings and the need to influence domestic prices; all have been the
drivers for regulations. In India, too, food is highly regulated. Since 1993, the regulatory
environment has considerably eased, but food still continues to be an essential commodity
under the Essential Commodity Act.
There are regulations across the entire value chain land demarcation, food
price, food procurement, food production and sale of food by mills in domestic and
international markets. However, fundamental changes in the consumer profile and the
demonstrated ability of the sector to continuously ensure availability of food for domestic
consumption has diluted the need for food to be considered as an essential commodity.
According to a recently conducted nation wide survey, nearly 75 percent of the total non-levy
food is...
Food
Food has long been an essential crop of the Caribbean countries and the news
of reform has left the islands scrambling to maintain a viable economy. In order to understand
how the islands economies became so dependent on food, it must be made clear how food
became so important, the extent of the Caribbean's dependency on preferential pricing and
how the preferences have been reformed. The food industry has been a part of the Caribbean
since shortly after being discovered and colonized by people of the western world. Its
importance can be seen through significant historical changes such as slavery, indentured
servitude and finally through independence. The food industry creates a significant amount of
jobs for the uneducated residents of the Caribbean. According to McDonald (2003) it was
estimated in two thousand and three that the industry employed approximately one hundred
and twenty-five thousand workers in both direct and indirect employment that otherwise may
be unemployed.
Most importantly, food exported to the member countries of the European Union
generated significant revenues. The European Union (EU) food program as it was original
implemented in nineteen sixty-eight, served to facilitate competitiveness by compensating
intuitional price cuts for food with direct income payments. The program consisted of a
mixture of price arrangements along with production quotas made possible by the
implementation of the following management tools, fixed pricing, tariffs and quotas. The
Caribbean Community's (CARICOM's) dependency on the preferential pricing of food stems
from the declining price of food on the world market. Since the enactment of the food
Protocol in nineteen seventy-five, the world price of food has fallen steadily, causing an
increasing dependency on the preferences.
COMPANY PROFILE
The division combines people with vast experience in agric-trading with the
FOODS AND INNS Ltd Group’s credibility to justify its premier standing in the trading
arena. The division was set up in 1967 and since then has handled a wide range of
products - such as Sesame Seeds, Processed Fruits, Food grains, Aqua etc.
FOODS AND INNS Ltd began its fruit processing operations in early 70s.However
fruit processing operations have been given a special thrust since the last season with an
emphasis on developing strategic partnerships across the value chain especially fruit
procurement and processing. FOODS AND INNS (P) Ltd has established it's presence as
a reliable and competitive exporter to Coca Cola, USA, Western Europe, Far East, Middle
East etc.
Situated at Chittoor in Andhra Pradesh, the mango belt in India, FOOD AND
INNS Ltd (FIL) is a 100% Export Oriented Unit (EOU) processing Tropical Fruit Purees,
Concentrates and Fresh Fruits FOOD AND INNS Ltd was started keeping in mind the
local farming community wealth. The farming community is an integral part and forms the
backbone of the organization. In its effort to be a forerunner in the chosen areas of
business in terms of best practices in quality and technology, FIL plans to benefit armors,
the industry and the nation in a phased manner.
BORD OF DIRECTORS
4 Mr.C.M.Maniar Solicitor
Mr. Utsav Dhupelia , a Chartered Accountant from U.K., looking after the routine
affairs of the company, is the brain and brawl for taking the company’s turnover from Rs.5
crores (USD1.1 MIO) to Rs.70 Crores (USD 16 MIO) giving the status of government
recognized EXPORT HOUSE.
With the back up of technical and managerial support staff, the state of art
technology implementation, innovative R & D and Lab facilities, the doyen guidance of
Mr.Utsav coupled with the contribution of other directors, the company is poised for a
steady and continuous growth graph moving upwards in all Para meters.
PRODUCTS
1) PRODUCTS OF FRUITS
2) PRODUCTS OF VEGETABLES
FRUIT SEASONS
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Mango
Papaya
Guava
Market Presence
V.C.R INSTITUTE OF COMPUTER SCIENCES 15
FINANCIAL ANALYSIS
European Union
United States of America
Canada
Australia
Middle East including Iran & North Africa
Japan & South Korea
FACILITY
FOODS AND INNS Ltd processing facility is located in Chittoor, spread over an
area of 15 acres. This place has been earmarked to host Integrated Food Complex of
International standards. The facility currently has a tropical fruit Puree / Concentrate
processing plant and the pack house for preparing the Fresh Fruits & Vegetables.
FOODS AND INNS (P) Ltd plant is equipped with state-of-the-art fruit puree
processing aseptic filling line of SIG- Mizzen, Italy to produce natural fruit pulps &
concentrates. The plant has one of the India's single largest fruit processing lines -10 TPH
ripen fruit processing with Aseptic Packaging.
PLC operated equipments for better control over monitoring and operations with
supervisory units.
Two stage washing of fruits to ensure HACCP quality requirement.
Two-stage sterilization to retain the natural flavor and aroma.
High speed advanced Mono block aseptic filling machine supplied by SIG
Mizzen. Integrated Enterprise Resources Planning system is in place to automate
business processes and provide data for analysis and reporting, allowing a closer
control on quality and operations.
FOOD AND INNS (P) Ltd is backed with strong support and service from its
team of highly qualified technical personnel and domain experts with perceptive
knowledge and skill. Powered by priceless hands-on experience these professionals are
upgrading themselves continuously to identify and introduce improved and innovative
product offerings that would delight customers worldwide and comply with the leading
global quality standards.
The fruit processing aseptic line is from SIG-Mazzini of Italy. The line has a
capacity to process 10 metric tones per hour ripened fruits. The processing line is fully
integrated and controlled by PLC.
PACK HOUSE
FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable processing
facility from Grief, Spain. Fresh fruits including mangoes, bananas are processed along
with tropical vegetables like Okra, Egg plant, Lemon, Bitter gourd etc. The facility also
holds ripening chambers, pre cooling chambers and cold storage to handle fresh fruits and
vegetables.
To enable Fresh Mango exports to countries like Japan and Korea, FOOD AND
INNS (P) Ltd has commissioned the VHT facility. This ensures irradiation of the fruit
flies in the fresh fruit. FOOD AND INNS (P) Ltd is the first private organization to set up
this facility in the country.
WATER MANAGEMENT
Water is an essential & precious natural resource. It is a nature’s gift. Without water
there is no life on the earth. It is as important to the fruit processing industry as to the living
being. But, water is becoming scarce year by year due to increase n its consumption in
industries & agriculture sectors & indiscriminate use /wastage by human beings, therefore, it
needs a integrated& scientific approach for its management to use it so that undesirable
wastage is avoided which helps us to save water for right utilization .
Our main source of water is bore wells. The water is potable. Water from all bore
wells is collected in a sump. From there it is pumped to over head tank to supply to various
locations of use. To manage appropriately & conserve the water, we are taking following
steps at various locations of its use:
FRUIT WASHING
STEAM GENERATION
Water for boiler feeding is treated in water softener to reduce the hardness. The
steam condensate of evaporator is recycled to boiler to save water & energy as
condensate will have high temperature.
Steam condensate from other heating equipments & Vapour condensate from pulp
concentration is collected in a tank to use in crate & floor cleaning.
Floor & equipments are cleaned by compressed water jet to conserve the water.
Treated effluent is used for civil construction & gardening.
Flow meters are installed at location of major use to have control over water
utilization.
WASTE MANAGEMENT
Our factory is equipped with aerobic effluent treatment plant of 250 kl capacity.
Effluent from all locations of water use is collected through inter connected drains in ET
plant. It is aerated here & transferred to settlement tank for sedimentation of solid particles.
The treated effluent is sent to oxidation pond. From pond, water is used for gardening & civil
construction. The sludge is transferred to drying bed. The dried sludge is used as manure in
our garden. The main feature of our company is that no effluent treated or untreated is
released in public drains & therefore, does not pose any danger to surrounding environment
& public.
Seeds of fruits
Stem ends & skin/peel of fruits & vegetables
Pumice-consists of fibbers & embedded pulp.
Spoiled fruits & vegetables
The seeds & peels of good fruits are passed second time through a pulped to remove
the remaining pulpy portion. The pulp extracted so & pumice are mixed & given an
enzymatic treatment & centrifuge to remove the extraneous materials so that pulp can be used
for making concentrate. This helps in improving the recovery out of fruits.
Financial management is that managerial activity which is concerned with the planning
and controlling of the firms financial resources. The three most important activities of any
business firm are production, marketing and finance.
A firm secures what ever capital it needs and employees it finance activity in activities
which generates returns on invested capital production and marketing activities.
The vital importance of the financial decision to a firm makes it imperative to set up a
sound and efficient organization fro the finance functions for this purpose the financial
statements are analyzed.
A firm communicates financial information to the users through financial statements and
reports financial statements contain summarized information of the firms financial affairs,
organized systematically.
Two basic financial statements prepared for the purpose of external reporting to owners,
investors and creditors are
Balance sheet (or) Statement of financial position
Profit and Loss account (or) Income statement.
Financial statements comprising the balance sheet and the profit and loss account is
that they do not give all the information related to the financial operations of a firm.
Nevertheless, they provide some extremely useful information to the extent that the balance
sheet mirrors the financial position on a particular date in terms of the structure of assets,
liabilities and owners’ equity, and so on and the profit and loss account shows the results of
operations during a certain period of time in terms of the revenues obtained and the cost
incurred during the year.
Thus, the financial statements provide summarized view of the financial position and
operations of a firm. Therefore, much can be learnt about a firm from a careful examination
of its financial statements as invaluable documents/performance reports. The analysis of
financial statements is, thus, an important aid to financial analysis.
The focus of financial analysis is on key figures in the financial statements and the
significant relationship that exists between them. The analysis of financial statements is a
process of evaluating the relationship between component parts of financial statements to
obtain a better understanding of the firm’s position and operations of a firm.
The first task of the financial analyst is to select the information relevant to the
decision under consideration from the total information contained in the financial statements.
The second step is interpretation and drawing of inferences and conclusions. In brief,
financial analysis is the process of selection, relation and evaluation.
To make inter and intra firm comparison of the firm and to highlight the trends in
performance efficiency of firm for a period of six years from 1-4-2006 to
31-3-2010.
To measure the profitability, turnover and solvency position of firm (or) debt
equity position of a firm.
To forecast factors like sales, net profit, earnings per share, current assets, current
liabilities, fixed assets and net worth.
To make decisions and to suggest improvements in the existing systems to
improve the overall efficiency of the company.
In India of plenty human and nature resources are available but the capital
resources are highly restricted. A understanding of financial management
practices. Is necessary to utilize limited capital resources efficiently and
effectively in order to norms, for sound financial management in various
organization it is necessary to study the financial management practices in auto
parts industry particular reference to FOODS AND INNS Ltd. CHITTOOR.
It is useful for the owners who are interested in the Return on investment earnings
per share by comparing the details for different periods to assess the period of the
firm.
It is useful for the employees and consumers in their own field of interest.
It is useful for the students like me, to make an analysis for enhancing our
knowledge and skills in the filed of financial management.
This study is carried in the months of may-June. The data for the study are
collected from the balance sheet, profit and loss account and various schedules relating to it
for six years from
This study covers analysis like ratio analysis; funds flow statement, comparative financial
statements, common size financial statements and Trend analysis and also include SWOT
analysis.
It covers the various activities in the organization and measures the profitability, solvency
and efficiency for six successive years of he firm. Based on the analysis a trend is to be drawn
for a further period of three years.
It is based on past data, which may not be appropriate due to the continuous
changes undergone in the business environment.
Financial statement analysis cannot be substitute for judgment or conclusion.
Ratio analysis
Common size income statement
Common size balance sheet
Comparative income statement
Comparative balance sheet
Funds flow statement
Regression analysis
REVIEW OF LITERATURE
Definition:-
“Financial statement is largely a study of relationship among the various financial
factors in a business as disclosed by a single set of statements.”
-Myers
Preparation of the financial statements is the responsibility of management. As
investors and financial analysts examine the firms performance in order to make investment
decisions use these statements, they should be prepared very carefully and contain as much
information as possible.
Two basic financial statements prepared for the purpose of external reporting
to owners, investors and creditors are
Balance sheet
a) Recorded facts
The term recorded facts means facts which have been recorded in the
accounting books. Facts which have not been recorded in the financial books are not depicted
in the financial statements, however, material they might be.
Example: Fixed assets are shown at cost irrespective of their market or replacement price.
Since, such price is not recorded in the books.
b) Accounting Conventions:-
Accounting Conventions imply certain fundamental accounting principles, which have been
satisfied by long usage.
Example: An Account of the Convention of conservatism provision is made for expected
losses but expected profit is ignored.
This means that the real financial position of the business may be much better than
what has been shown by the financial statements.
c) Postulates:-
Business transactions are recorded as certain assumptions such as” Going concern”, “Profit
Accrual”, etc, these Postulates or assumptions are related in the financial statements.
d) Personal Judgments:-
(1) Owners:-
The Owners provide funds for the operations of business and they want to know
whether the funds are being properly utilized or not. The financial statements prepared
from time to time satisfy the curiosity.
(2) Creditors:
Creditors want to know the financial position of concern before giving loans or
granting credit. The financial statements help them in judging such position.
(3) Investors:-
Prospective investors, who want to invest money in a firm, would like to make an
analysis of the financial statements of that firm to know safe proposed investment will
be.
(4) Employees:-
Employees are interested in the financial position of a concern they serve, particularly
an payment of bonus depends upon the size of the profits earned. They correct so,
they become invested in the preparation of correct profit and loss accounts.
(5) Government:-
Central and State Governments are invested in the financial statements because they
reflect the earning for a particular periods for purpose of taxation. Moreover, these
financial statements are used for compiling statistics concerning business which
intern, helping compiling national accounts.
(6) Consumers:-
Consumers are interested in the establishment of goods accounting controls. So, that
cost of production may be reduced with the resultant reduction of the prices of goods
they buy.
(7) Managers:-
Management is the art of getting things done through others. This requires that the
subordinates are doing work properly. Financial statements are aid in this respect
because they serve the manager is apprising the performance of the subordinate.
Many items shown in profit and loss account are not real but estimated
figures.
interpretations.
The balance sheet and profit and loss accounts are to be interpreted to convey
meaningful message to the layman who is still the typical shareholder in the company.
Interpretation is considered to be the most important functions of the management accountant
because it needs the relevant data and information to conduct its functions efficiently.
Objectives:-
To interpret the profitability of various business activities with the help of
profit and loss account.
(5) The data is to be analyzed for making comparative statements for computation
of ratios and for ascertaining averages and for estimating trends.
(6) Facts gathered from analysis are to be interpreted by considering the general
state of the market and economy as well.
(7) The interpreted data and information has to be presented in suitable form.
The financial data will be comparative only when same accounting principles are used
I preparing these statements. The tow comparative statements are
Balance sheet
Income statement
c) The increase or decrease in let profit will give an idea about the overall profitability of
the concern. Non operating expenses such as interest paid, loss for, sales of assets,
writing of deferred expenses, payment of tax, etc., decrease the figure of operating
profit. When all non operating expenses are deducted from the operational profit, we
get a figure of net profit. Some non operating incomes may also be there which
increase in net profit will give us an idea about the progress of concern.
COMMON-SIZE STATEMENT:
The common-size statements, balance sheet and income statements are shown
in analytical percentages. The figures are shown as percentages of total assets, total liabilities
and total sales. The total assets are taken as 100 and different assets are expressed as
percentages of the total.
COMMON- SIZE INCOME STATEMENT:
The items in income statement can be shown as percentages of sales to how the
relation of each item of income statement and volume of sales. The increase in sake will
certainly increase selling expenses and not administrative or financial expenses.
RESEARCH METHODOLOGY
SOURCES OF DATA
PRIMARY SOURCE
Informal interview of the employees of the company.
SECONDARY SOURCE
Annual report of FOODS AND INNS LTD
Company website
journals
INCOME (OR)
INCOME Year 2006 Year 2007 %
RECOVERY
INCOME (OR)
EXPENDITURE Year 2006 Year 2007 %
RECOVERY
Increase/
LIABILITIES Year 2006 Year 2007 %
Decrease
Increase/
ASSETS Year 2006 Year 2007 %
Decrease
Fixed assets
INCOME (OR)
INCOME Year 2007 Year 2008 %
RECOVERY
Other income
INCOME (OR)
EXPENDITURE Year 2007 Year 2008 %
RECOVERY
Increase/
Liabilities Year 2007 Year 2008 %
Decrease
Share capital 274407700 274407700 0 0
Reserve & surplus - - - -
Secured loan 253408846 365142945 111734099 44.09
Un secured loans 105914487 68289487 -37625000 35.52
Current liabilities 362236043 467143647 104907604 28.96
Differed tax liability - -
Total = 995967076 1174983779 179016703 117.97
Increase/
Assets Year 2007 Year 2008 %
Decrease
Fixed Assets
Gross block 562808479 580496620 17688141 10.32
Less: Dpreciation 27878419 303241696 275363277 10.82
534930060 277254924 -257675136 51.83
284024280 277254924 -6769356 2.38
Capital work in progress 12520913 4309183 -8211730 65.58
Assets, Loans & Advances
Inventories 30238111 375676892 72438781 23.58
Bills 8256619 8416762 160143 1.93
Cash & Bank 2907579 5067311 2159732 74.77
Loan & advances 89584621 150964503 61379882 68.51
Tax assets - - - -
Miscellanious expenditure 367278 244852 122426 33.33
Profit & Loss A/c 20659974 78641650 57981676 280.64
Suspend A/c 274407700 274407700 - 0
Total = 995967076 1174983779 179016703 117.97
INCOME (OR)
INCOME Year 2008 Year 2009 %
RECOVERY
INCOME (OR)
EXPENDITURE Year 2008 Year 2009 %
RECOVERY
INCOME (OR)
Liabilities Year 2008 Year 2009 %
RECOVERY
Share capital 274407700 274407700 0 0
Reserve & surplus - - - -
Secured loan 365142945 292838366 72304579 19.8
Un secured loans 68289487 110248323 41958836 61.44
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COMPARATIVE BALANCE SHEET OF FOODS AND INNS t
a
Increase/
x
Liabilities Year 2009 Year 2010 %
Decrease
l
Share capital 274407700 274407700 0 0 i
Reserve & surplus - - - - a
b
Secured loan 292838366 299428725 6590359 02.25 i
Un secured loans 110248323 111248323 1000000 00.90 l
Current liabilities 257973323 202512606 -55460717 7.85 i
t
Differed tax liability - - y --
935467712 887597354 -47870358 94.88 T
Total =
o
t
a
INCOME (OR) l
Assets Year 2009 Year 2010 %
RECOVERY = 19-
1. Fixed Assets
A
Gross block 615531243 616421505 s
s
Less:
V.C.R Dpreciation
INSTITUTE 328924963
OF COMPUTER SCIENCES 353969816 44
944456206 262451689 -682004517 2.77
Capital work in progress 5027508 22103565 177076057 43.9
Inventories 156306246 136429420 -19876826 8.7
Debtors 7348982 8062874 713892 10.9
Cash & Bank balances 8755706 3903005 -48852701 4.45
FINANCIAL ANALYSIS 145766518 145443323
Loan & advances -323195 9.97
3. Differred tax liability - -
4. Miscelanious expenditure 122426 0 -122426 0
5. Profit & Loss A/c 51120343 34795778 -16324565 6.80
6. Suspend A/c 274407700 274407700 - 0
Total = 935461712 887597354 -47864358 94.88
Consumption of raw
materials 254504145 112.49 3031641832 94.42 391436510 87.68
Manufacturing
expenses 19303448 8.53 40364585 12.57 57824840 12.95
Loss for the year 13861958 6.12 20659974 6.43 78641650 17.61
2974361
Total = 189025381 49.63 69 97.59
5. Profit & Loss a/c 78641652 6.69 51120343 5.46 34795778 3.92
30.9
6. Suspend a/c 274407700 23.35 274407700 29.33 274407700 1
CURRENT RATIO
It measures the short term solvency of firm that is its ability to meet short term
obligations.
CURRENT ASSETS
CR = _______________________________
CURRENT LIABILITIES
GRAPH:
Year
INFERENCE
The ratio is an index of financial stability. Here the ideal ratio is 2, but a ratio of 1 is
just enough to pay the creditors without leaving any balance or surplus. Here in this company
the ratio is on a decreasing which is a draw back during the short term. It is because the
LIQUIDITY RATIO
liabilities.
LIQUID ASSETS
LR = ________________________________
CURRENT LIABILITIES
GRAPH:
Year
INFERENCE
The liquidity ratio shows the solvency of the company in a more rigorous manner than
the current ratio. The liquidity ratio is on decreasing terms that shows a low liquidity position
in the short run. In comparing with the current ratio it shows that there are lots of stocks held
up with the company without being used or sold. The decreasing ratio is mainly due to the
decrease in cash and bank balances of the company. This affects liquidity in the short run.
liabilities.
ALR = ________________________________________________
CURRENT LIABILITES
GRAPH:
Year
INFERENCE
.This is a more rigorous measure of the firm’s liquidity. The ratio has been drastically
decreasing. There are very low in proportion to the current liabilities. The liquid ratio
balance as it is decreasing makes an unsafe space to stay in. In case of emergency the
This ratio explains adequacy of the long term funds with respect of fixed assets of the
firm. Ideal ratio is 0.73; if is necessary this ratio must be grater than one.
NET SALES
FAR = ____________________________
FIXED ASSETS
GRAPH :
Year
INFERENCE
It is calculated to ascertain the proportion of long term funds invested in fixed assets.
Here the ratio has been decreasing because of the continuous expansion process undertaken
by the company. However the ratio has not only been used to purchase fixed assets, but also
The proportion of Net Sales and its relationship with equity funds in long term source
NET SALES
CATR = _______________________________
CURRENT ASSETS
GRAPH :
V.C.R INSTITUTE OF COMPUTER SCIENCES 56
FINANCIAL ANALYSIS
Year
INFERENCE
assets. Here the ratio has been decreasing because of the continuous expansion process
undertaken by the company. However the ratio has not only been used to net sales, but also