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 REPORT

ON

Analysis of Balance Sheet of 2007 and

2008

By
Saurabh Jain

R.K.

MARBLE PRIVATE LIMITED

KISHANGARH, DIST. AJMER

A
 REPORT

ON

Analysis of Balance Sheet of 2007 and

2008

By
Saurabh Jain

A Report submitted in partial fulfillment of

The requirements of
MBA Program of
Government Engineering College, Ajmer
R.K. MARBLE PRIVATE LIMITED
KISHANGARH, DIST. AJMER
Government Engineering College, Ajmer
(An Autonomous Institution of Government of Rajasthan)

Preface;-
 Engineering College Aimer was established in the year 1997
under the aegis of Govt. of Rajasthan whose faculty
members have had consummate experience in the fields of
education, Industry, Engineering and Technology over the years.

The College is affiliated to the RAJASTHAN TEHNICAL

UNIVERSITY, KOTA and is approved by the All India Council
of Technical Education, New Delhi.

The College is located at Makhupura, 5 Kilometers from

Ajmer on the National Highway no 14, providing the right
industrial ambience for the budding engineers.

No Stone is left unturned to maintain exalted standards in

imparting academic and practical skills to the students, so that
they become well-rounded engineers with professional expertise
and personal integrity when they complete their courses.

Engineering College Ajmer has been established with the noble

intention of imparting quality technical and management
education to the aspiring youth of today, also extending its
support to the students of financially challenged background. The
Institution will provide opportunity to its students to develop into
disciplined and knowledgeable citizens of tomorrow.

ACKNOWLEDGMENTS
I acknowledge with thanks the valuable advice and immense
guidance rendered to me by my company guide, Mr. Subhash C.
Agarwal, Vice President (Fin. & Tax.) of R.K. Marble Private
Limited. In spite of his busy schedule, he spared and spent time to
help me execute this project. An authority in finance matters and
company affairs, his wholehearted help would always remain an
unfading light in my thoughts and actions. Mr. Devendra Sharma,
Company Secretary of R.K. Marble Private Limited, provided me
various information and data in compiling this project, to whom I
express my grateful thanks.

My grateful thanks are also due to the staff members of R.K. Marble
Pvt. Ltd. sincere, cordial and unstinted guidance and support
throughout the course of this project. “Analysis of Balance Sheet of 2007
and 2008 ”.

Saurabh Jain
MBA Part – 2
Government Engineering College,
Ajmer

TABLE OF CONTENTS

1. ABSTRACT
2. INTRODUCTION OF THE ORGANISATION

3. FINANCIAL PERFORMANCE

4. INTRODUCTION OF PROJECT

5.FINANCIAL STATEMENTS

6BALANCE SHEET OF 2007 AND 2008

7.FACTS AND FINDINGS

8.REFERENCES

9.APPENDICES

1. ABSTRACT:

The SIP Project is being conducted at R.K. Marble Private Limited. The
project concentrates on the last two years financial statement analysis of the
organization.
The project is all about analysis of the company’s last two years financial
statements. The project demands for a thorough study of various tools and
techniques involved in analysis of financial statements, understanding of
the various financial statements. The project also includes interpretation of
the financial results to derive meaningful information from the statements.
The project involves some secondary activities such as being a part of the
Internal Audit team to understand the working process of the audit team. The
other activity included a short assignment on BIFR (Board of Industrial and
Financial Reconstruction).

As per the schedule mentioned in the project proposal the report will contain
following stages:

Stage 1: Collection of the company’s last two years financial statements.

Stage 2: Understanding the Financial statements.

Stage 3: Understanding the various tools and techniques used in analysis of

financial statements.

Stage 4: Analysis of Balance Sheet

2. Introduction of the Company

R. K. Marble Group was established in 1989 by Patni group to help serve
increasing national and international demand for Indian marble. Since then we
have enjoyed exponential growth and export to many markets worldwide. The
Company dedicated to bringing the finest marble to the world. For over twenty
years, the name is synonymous with grandeur, finesse and quality that can only
be expected from the most superior class of marble. An ISO 9001:2000 certified
company, R.K. Marble has set benchmarks in the mining, processing and
finishing of marble. An annual production of over 1.5 Million Tones (equivalent to
more than 60,000 sq. meters per day) has earned the company a place in the
Guinness Book of World Records as the largest producer of marble in the world,
the group is now geared up to scale newer heights and achieve the impossible.

"The seagull who sees farther, flies higher" living up to the immortal words of
Johan than Swift, Mr. Ashok Patni established the first processing unit at
Rajasthan (with an installed capacity of one lakh cu. ft. marble slabs Per Annum)
and never looked back. The company now has 14 Gang saw machines. In
November 1993 was the time, when state government took a step forward to allot
a virgin marble mine on lease to R. K. Marble at Morwad, Distt. Rajsamand in
Rajasthan. By the touch of sheer hard work, guts, burning inner desire to reach
unprecedented heights and fulfilling their dreams "the trio" converted these
marble mines to gold mines. Morwad from which the stone takes its name is a
remote village in the eastern part of Rajasthan, India.
Today the name Morwad Marble from R. K. Marble group has become almost
generic for a whole range of white and semi-white types of marble, which are
extracted from these locations.

The popularity of this range of marble continues to grow at an astonishing rate

and it is marketed in large quantities. The white background with light gray veins
corresponds with nearly everyone's perception of the most beautiful marble and
architects for many of the India's important buildings suggest it.

Zoom into the corner stone of Majoli, In Madhya Pradesh , India to scale the
magnetic fascination of an ISO 9001 : 2000 adorned Guinness Record Holder,
engaged as the largest producer of marble in the world. Bedecked with most
sought after gadgets, the exotic Majoli mine is the most coveted breeding ground
of world's choicest Wonder Marble that's wondrous and splendid in myriad hues.

Wonder Marble's colour panorama and innate design makes it the right choice for
flamboyant users. Our fascinating range can be floored to encompass living
rooms, drawing arrangements, dining spaces, hotel lobby's, pool sites, wall
claddings, special lounges and many more. Among its endless usages left for
creative imagination, some could be - artifacts and decorative objects

Products
Dealing in Products like Marble, Flooring Patterns, Marble Stone , Marble Stone
Figure, White marble, Marble Flooring, Marble Tiles.
Wonder Marble
The WONDER MARBLE produced at the R.K. Majoli mines comes to you in
heart warming shades of deep and dark red, brown to rose patches in creamy
base coupled with abrasion resistant fine grained form, lustre and reflective gloss
which makes it truly a masterpiece for a lifetime.

Wonder Marble is available in 4 exotic colours:

· Milky Opal: Creamy base: Shades of beige & mauve

· Pink Pearl: Ecstatic pink & brown tones

· Garnet Rush: Reddish

· Jasper Jazz: Chocolate, red & brown

White Marble
Famous from antiquity, for the high quality the incomparable clearness and
resistance, the Morwad Marble from R. K. Marble Private Limited have
constituted the base of many big monuments and works of art in India. R.K.
Milky Coral is a captivating splendor with generous splashes of green and grey
on milky white marble, giving it an exotic look.

Marble Patterns & Fixing

R K Marble Private Limited offers decorative flooring patterns, stone inlaid
borders and marble inlaid items. The most popular choice with architects and
interior designers for flooring and wall cladding.

Mines
World famous Morwad Mines of R.K.Marble Private Limited are situated 15km
from Rajnagar on Udaipur – Rajnagar - Ajmer National Highway No.8. connected
by well-maintained by metalled road from Rajnagar.The nearest Airport at Dabok
which is 68 Kms. from mines and 19 Kms from udaipur. Nearest Railway station
at Kankroli, is 20 Kms. from mines.Electrical power line of 11KV from State
Viduyat Nigam is extended up to mines. Captive Power generation to the tune of
2500 KVA is stand by.

Four Captive Diesel Dispensing pumps with 120 KL storage capacity and
Explosive magazine with 500 kg storage capacity are maintained at mines.

An over head tank of 1.5 lac liters capacity along with a filter plant is maintained
for meeting the requirement of drinking water and domestic use. The quality of
water is potable.

Requirement of water for industrial use is met with the help of water tanks filled
from tube wells from the nearby areas.

The Safety Management is given utmost importance pit Safety Committee

meetings are organized regularly for tacking stock of safety preparation, accident
analysis, and suggestions for remedial measures for achieving ZERO accident
status. The personal protective equipment and safety gadgets are provided to
employees and all out efforts are made to inculcate the habit of their regular use.
Facilities of Modern store and well equipped workshops for repair and
maintenance of HEMM and other field machinery are available at mines.

Technology, the core aspect at R. K. Marble Private Limited can be seen at

mining campus where all means of communication are available which hooks this
remote site to the rest of the world and make them feel a part of larger
community of R. K. Group.Eight telephone connections, with a fax connection
and two hot line between Mines to Udaipur and Kishnagarh office are available at
mines site. Base mobile and walki-talki sets are well maintained for smooth
communications amongst the staff/workers/officers.

A four-bed hospital with para medical staff and Doctor along with an ambulance
is available at mines.

A well-equipped Group Vocational Training Center is established at site to

provide initial training to new entrants and refresher and special training to
existing employees OEMS and other service agencies, training programmes
were conducted periodically.

Factory
Our factory is located about 26 KM from the holy city of Ajmer and about 107 KM
from Jaipur, the state capital of Rajasthan, along the famous Makarana road. We
have exclusively used our own marble in combination with other stone to give a
fascinating look at our factory site. Our managing director Mr. Suresh Patni looks
after the factory and is known for his motto, "Customer Satisfaction".

The RK Marble Processing Centre houses 14 Gangsaw machines. Two Resin

treatment plants, an edge-cutting unit and 18 head-polishing unit from Breton. It
has the most modern layout with completely automatic plant to recycle water for
marble cutting.

Latest gadgets like wireless, hotlines, modems, computerised MIS and costing
systems are being used in order to accelerate quality control and production,
hence contributing to cost effectivity.

Quality Assurance
R. K. Marble Group has always stood for quality without compromise. It believes
in long-term business relations and works hand to hand with the customers to
ensure that it gets the best value of money. Stringent in-house quality control
measures are in place and yet it is always willing for third party quality checks.
The Company has adopted quality policy to standardize its systems, procedures
and processes with adequate documentation. R. K. Marble Private Limited is an
ISO 9001 : 2000 certification for its various activities at mines and factory and
ISO 14001 certification for Environment Management System.

People
Highly motivated team of professionals is dedicated to work. The team created
the records of completing large projects before given time frame. Needless to
say, the growth of R. K. Marble Group has been spurred by the spirit of the
individuals who work at various levels to keep ahead of the rest and constantly
rise to the challenges that beckon them at the frontiers of technology.

Strengths
The endeavor of the company is to provide quality products by imbibing the latest
international mining technology. This can be gauged from the fact that the entire
mine operations are carried out with the help of latest equipment for marble
extraction. Sophisticated software developed internally on RDBMS platform
tracks and evaluates all possible functions, cost areas and productivity of the
mining operations. It is also the first marble mining company, which has very high
level of mechanization with highly skilled and trained workmen.

The company has made an extensive use of wireless communication to

synergies all activities from drilling to loading of the end product. The optimum
utilization of the country's natural resources can be seen here. Due to the latest
technologies used, the recovery ratio of marble blocks is amongst the highest.
The records of "The Director of Mines & Geology, Udaipur", reveal that the yield
from company's mines is the highest per hectare amongst all marble mines.
 Awards:

AWARD NAME AWARDED BY YEAR

1998,
Guinness World Records Guinness World Records
2000, 2001
Appeared in Guinness World Record Books Guinness World Records 2003
ISO 9001 : 2000 BVQI, USA 2003
ISO 14001 BVQI, USA 2003
Entry in Limca Books of World Records Limca Books of World Records 1998, 1999
Federation of Indian Mineral
Model Marble Quarry award - Best Mechanised
Industry (FIMI) & All India Granite 2003
Quarry- First Prize
& Stone Association (AIGSA)
Centre for Development of Stones
The Best Stall for Stone & Stone Products (Outdoor) 2003
(CDOS)
Institute of trade and Industrial
Udyog Patra Award 2001
Development, New Delhi
State Level Bhamashah Award Education Deptt., Bikaner 2001

Highest Income tax payer Award (Individually to

Syt. Ashok Patni, Syt. Suresh Patni, Syt.Vimal Income Tax Deptt., Ajmer 2000
Patni)

Best Annual Report Award for Rajasthan Based Institute of Chartered Accountants
2001
Companies of India, Jaipur

Indira Priyadarshini Award National Publication, New Delhi 2001

Samman Patra Income Tax Deptt., Udaipur 1998

Shree Digamber Jain Atishaya

Padm Divakar 1999
Kshetra, Padampura, Jaipur

Social Welfare & Development Lions Club, Udaipur 2001

 All India Digamber Jain Samaj,
Jain Gaurav 1998
Sikar

Rajasthan Chamber of Commerce

Corporate Governance Award 2004
& Industry

3. FINANCIAL PERFORMANCE IN THE YEAR 2007-08

March 2007 March 2008
PARTICULARS
Net Sales 171689838 1908959105
5
Exports 0 0
PBT 345849010 604901946
PBT/Net Sales(%) 20.15 31.68
PAT 223702429 389872858

Table 1. Sales and Profits

Net Sales of the Company during the year 2007-08 were Rs. 1908959105
crores compared to Rs. 1716898385 crores in 2006-07 due to higher volumes
as well as realization. This is mainly due to favorable market conditions in view
of emphasis on infrastructure and housing resulting into good demand of
marble.

As may be observed, there is a continuous increase in profitability (PBDT) which

has been analyzed and explained in the table below:
 Particulars 2007 2008

(Rs. In crores)
Profit after Tax 223702429 389872858
Add: provision for tax
Wealth Tax 306000 350000
Fringe Benefit Tax 3500000 3500000
Deferred tax 17159419 43220912
Less: Income Tax 135500000 255000000

Profit before tax 345849010 604901946

Add: Depreciation 163834840 116704749
PBDT 509683850 721606695

In the year 2007-08, PAT has increased from Rs. 223702429 crores to Rs.
389872858 crores Profit for the year is higher by the same amount. Therefore we
see PBDT has increased in 2007-08 as compared to 2006-07 by 41.57%.

INTRODUCTION OF THE PROJECT:

Objective and Scope of the Study

Main aim of the project is to study and analysis the complete process of Ratio
Analysis. The objective of the present study is limited to mere understanding of
the procedure of Balance Sheet and does not extend to evaluate the efficiency
of the process followed at R.K. Marble Private Limited or in any way
commenting on them.
SCOPE :

At R.K. Marble Private Limited the entire exercise of Ratio Analysis either for
getting any new sanction or reviewing the existing borrowing limits is carried out
during the start of the financial year. With this project I was able to get a first
hand experience of all the documentation and fulfillment of other formalities laid
under the bank norms for getting the funds sanctioned.

In my study of the process of anlaysing the balance sheet of R.K. Marble

Private Limited, the following things have been covered:

Complete Analysis of the two year(2007 and 2008) performance and critical
review of the fixed assets ,current assets , debtors, creditors and other important
factors that are covered in the balance sheets.

o Analysis of balance sheet and requirements for year 2007 and 2008 and
analysis of increase or decrease in their magnitude .

o Preparing CMA and other supporting documents,

o Application to Consortium of Banks,

o Clearance of any objections raised by the member Banks, and

o Creation of Security.
Financial statements :-
There are four basic financial statements:

1. Balance Sheet - also referred to as statement of financial

condition, reports on a company’s assets, liabilities and net equity as of a given
point in time.

2. Income Statement - also referred to as Profit or loss statement,

reports on a company’s results of operations over a period of time.
3. Cash Flow Statement - reports on a company’s cash flow
activities, particularly its operating, investing and financing activities.

4. Statement of Retained Earnings - explains the changes in a

company’s retained earnings over the reporting period.

Because these statements are often complex, an extensive set of Notes to the
Financial Statements and management discussion and analysis is usually
included. The notes will typically describe each item on the Balance sheet,
Income Statement and Cash Flow Statement in further details. Notes to
Financial Statements are considered an integral part of the Financial
Statements.

 Users of Financial Statements:

Financial statements are used by a diverse group of parties, both inside and
outside a business. Generally, these users are:

1. Internal Users: are owners, managers, employees and other parties who
are directly connected with a company.
• Owners and managers require financial statements to make
important business decisions that affect its continued operations. Financial
analysis are then performed on these statements to provide management with a
more detailed understanding of the figures.These statements are also used as
part of management’s report to its stockholders, as it form part of its Annual
Report.
2. External Users: are potential investors, banks, government agencies
and other parties who are outside the business but need financial information
about the business for a diverse number of reasons.
• Prospective investors make use of financial statements to assess the
viability of investing in a business. Financial analysis are often used by investors
and is prepared by professionals (Financial Analysts), thus providing them with
the basis in making investment decisions.
• Financial institutions (banks and other lending companies) use them to
decide whether to grant a company with fresh working capital or extend debt
securities to finance expansion and other significant expenditures.
• Government entities (Tax Authorities) need financial statements to
ascertain the propriety and accuracy of taxes and other duties declared and paid
by a company.
• Media and the general public are also interested in financial statements
for a variety of reasons.

 Limitations of Financial Statement:

• Certain assets and liabilities are not discussed in the balance sheet such
as management people, their quality and high degree of skill, the most tangible
asset.
• Balance sheet pertains to a point of time relating to past, and thus may
not be very helpful for the investors concerned about the present and future
analysis.
• Provision for depreciation, stock valuation and amounts to be set aside
for bad debts are based on personal judgments and, therefore, are not free from
bias.
• Financial Statements do not record and reveal any fact, which cannot be
expressed in terms of money. General health conditions of the chairman,
working conditions, sales policy, quality of the product, etc., cannot be included
in financial statements.
• Financial Statements are based on accounting policies, which vary from
enterprise to enterprise both within a single country and among countries. Thus
the users of financial statements cannot make reliable judgments unless the
accounting policies are not disclosed.
• Balance sheet does not disclose information relating to change in
management, loss of markets, and cessation of agreements, which have a vital
bearing on the earning of the company.

Understanding the Various tools and techniques used in

analysis of Financial Statements:

A financial statement analysis consists of the application of analytical

tools and techniques to the data in financial statements in order to derive
from them measurements and relationships that are significant and useful
for decision making. The process of financial statement analysis can be
described in various ways, depending on the objectives to be obtained. Financial
analysis can be used as preliminary screening tool in the selection of stocks in
the secondary market. It can be used as a forecasting tool of future financial
conditions and results.
It may be used as a process of evaluation and diagnosis of managerial,
operating, or other problem areas. Above all, financial analysis reduces reliance
on intuition, guesses and thus narrows the areas of uncertainty that is present in
all decision-making processes. Financial analysis does not lessen the need for
judgment but rather establishes a sound and systematic basis for its rational
judgment. In analysis of company’s financial position , we can do the
interpretation of the assets, loans , advancea and capital as shown by the
balance sheet of the two years under comparison .

Balance Sheet:

A balance sheet is often described as a “snapshot” of the company’s

financial condition on a given date. It does not show the flows into and out of
the accounts during the period. A balance sheet provides detailed information
about a company’s assets, liabilities and shareholders’ equity.

Assets are things that a company owns and can either be sold or used by the
company to make products or provide services. Assets include physical
property, such as plants, trucks, equipment and inventory; things that can’t be
touched, such as trademarks and patents. And cash itself is an asset. So are
investments a company makes.

Liabilities are amounts of money that a company owes to others. This can
include all kinds of obligations, like money borrowed from a bank, rent for use of
a building, money owed to suppliers for materials, payroll a company owes to its
employees, environmental cleanup costs, or taxes owed to the government.
Liabilities also include obligations to provide goods or services to customers in
the future.

Shareholders’ equity is part of the company’s liabilities: they are funds

“owing” to shareholders (after payment of all other liabilities). In other
words, it is the money that would be left if a company sold all of its assets and
paid off all of its liabilities. This leftover money belongs to the shareholders, or
the owners, of the company.

The following formula summarizes what a balance sheet shows:

ASSETS = LIABILITIES + SHAREHOLDERS’ EQUITY

A company’s assets have to equal, or “balance,” the sum of its liabilities and
shareholders’ equity.

The requirement of company’s last two year Balance Sheet As follows:

R.K. MARBLE PREVATE LIMITED

BALANCE SHEET AS AT 31ST MARCH, 2008

PARTICULARS 2008 2007
Rs. Rs.
(A) SOURCES OF FUNDS:
Shareholder’s Fund:
a. Share Capital 63,15,57,000 21,05,19,000
b. Reserves & Surplus (including profit) 72,62,18,351 75,71,78,319
1,35,77,75,351 96,76,97,319
Loan Funds:
a. Secured Loans 46,52,86,672 17,77,34,222
b. Unsecured Loans Nil 10,05,846
46,52,86,672 17,87,40,068
Current Liabilities & Provisions:
a. Current Liabilities 2,03,30,416 4,03,70,679
b. Provisions 40,99,44,575 23,25,27,392
43,02,74,991 27,28,98,071
TOTAL 2,25,33,37,014 1,41,93,35,458
APPLICATION OF FUNDS :
Fixed Assets:-
Gross Block 1,28,88,19,047 1,51,53,17,426
Less : Depreciation (83,99,19,465) (92,12,24,640)
Net Block 44,88,99,582 59,40,92,786
Capital work In Progress 62,12,633 67,73,177
Investments 6,31,17,050 3,27,43,750
Current Assets, Loans & Advances:
a. Inventories 5,95,25,304 8,00,72,275
b. Sundry Debtors 12,89,15,638 16,08,08,613
c. Cash & Bank Balance 8,89,99,018 7,10,41,834
d. Other Current Assets 16,80,502 9,50,825
e. Loans & Advances 1,40,37,02,208 46,37,88,031
Deferred Tax Assets 5,22,85,079 90,64,167
TOTAL 2,25,33,37,014 1,41,93,35,458
Facts and findings :-

When people form a company, they decide whether to limit the members' liability
by shares. The memorandum of association (a document required in the
company’s formation) must state:

• the amount of share capital the company will have; and

• the division of the share capital into shares of a fixed amount.

On registration of the company at Companies House, members of the company

(the ‘shareholders’) must agree to take some, or all, of the shares. The
memorandum of association must show the names of the people who have
agreed to take shares and the number of shares each will take. These people are
the subscribers
Funds raised by issuing shares in return for cash or other considerations. The
amount of share capital a company has can change over time because each time
a business sells new shares to the public in exchange for cash, the amount of
share capital will increase. Share capital can be composed of both common and
preferred shares.
Also known as "equity financing".

Share Capital is created when a company is formed. The people forming the
company decide whether its member’s liability will be limited by shares. Decided
then is the amount of share capital the company will have and the division of it
into shares of a fixed amount. This is stated in the memorandum of association
and An increase of the share capital may be effected by cash payment as well as
in other ways. The increase may be effected without regard to the pre-emption
rights granted to existing shareholders provided that the shares are offered for
subscription at market price or as consideration for the Company’s takeover of an
existing undertaking or certain assets at a value corresponding to the value of the
shares issued. In all cases other than those set out in the previous sentence, the
Company’s existing shareholders shall be entitled to subscribe for the new
shares on a pro rata basis in proportion to their shareholding.

Equity which cannot otherwise be classified as capital stock or retained earnings.

It's usually created from a stock issued at a premium over par value.
The balance sheet suggests a decrease in reserve and surplus so the situation is
good ..

A company's debts or obligations that are due within one year. Current liabilities
appear on the company's balance sheet and include short term debt, accounts
payable, accrued liabilities and other debts. Normally, companies withdraw or
cash current assets in order to pay their current liabilities. The decrease in the
balace sheet suggests that the company has cleared its liabilities in 2008 ., so
the net amout of current liabilities has gone down .

Inventories include raw materials, component parts, work in process, finished

goods, packing and packaging materials, and general supplies. The control of
inventories, vital to the financial strength of a firm, in general involves deciding at
what points in the production system stocks shall be held and what their form and
size are to be. As some unit costs increase with inventory size—including
storage, obsolescence, deterioration, insurance, investment—and other unit
costs decrease with inventory size—including setup or preparation costs, delays
because of shortages, and so forth—a good part of inventory management
consists of determining optimal purchase or production lot sizes and base stock
levels that will balance the opposing cost influences. Decrease in the general
inventory decides the levels (reorder points) at which orders for replenishment of
inventories are to be initiated.
So there is a urgent need to replenish it .

Debtors in American parlance are referred to as accounts receivable and they

show the amount of money owed to the firm at the accounting date by people
who have purchased the products or services of the firm but have yet to pay. In
this case there are £80 outstanding because of sales made by the firm on credit.
As this hypothetical balance sheet is based on a retailer selling mainly for cash,
this debtors figure is relatively low.
The firm would expect to be paid by the people or organisations represented
by this debtors figure at the appointed time in the future. The figures for debtors
should not contain those debts which have become too doubtful for repayment to
be reasonably expected. These should be written off and the debtors figure
correspondingly reduced. As this writing off will reduce assets, the liability side of
the balance sheet has to be reduced by the same amount in order to maintain
the required equality. As it is the shareholders of the company that will have to
face the loss of selling to people who did not pay, the reduction will made in the
equity section. An increase in debtors is not good from companys point of view
because the money stands still and cannot be included in taking investment
decisions.
This figure total assets less current liabilitie also shows the size of the firm's
assets which have been financed by long-term funds, that is all money obtained
by the firm other than the short-term current liabilities. The larger this number the
safer the firm, all other things being equal.So the position of this firm is good from
this point of view .

The capital and reserves section of the balance sheet gives the breakdown of the
shareholders' funds. Shareholders are, of course, the owners of the firm and as
such are entitled to any of the money which the firm earns after the various
creditors have been paid. Shareholders elect the directors of the firm.. the
decrease in capital and reserves is beneficial from shareholders point of view .

The cash and bank balance of this firm has increased from 2007to 2008 . this
condition suggests that the firm would be able to make more future investiments
and is on the safer side .

The increase in value of fixed assets because of revaluation of fixed assets is

credited to ‘Revaluation Reserve’, and is not available for distribution as dividend.
Revaluation Reserve is treated as a Capital Reserve

The increase in depreciation arising out of revaluation of fixed assets is debited

to depreciation expense. Fixed assets are held by an enterprise for the purpose
of producing goods or rendering services, as opposed to being held for resale in
the normal course of business. For example, machines, buildings, patents or
licences can be fixed assets of a business.there is a decrease in fixed assets that
is not satisfactory from companys point of view .

Secured Loans -Many types of loans are available in the Us for

companies and small businesses. For instance companies can avail of
secured loans, that is, against a collateral such as real estate or fixed
deposits. Secured loans have two advantages over unsecured ones.
Firstly, secured loans are easier to obtain as the lender is exposed to
less risk. Secured loans are also cheaper than unsecured loans, that is,
they charge a lower rate of interest. This increase is very good from
the company point of view and so increases its goodwill

Unsecured loans can be obtained based on the credit history of the

company as well as its balance sheet. Such loans are, however, costly
compared to secured loans and are available only to those companies .
that already have a strong credit history. To build a credit history first,
the company must first go in for a secured loan. Nill balance in 2008
for this company suggests that company has cleared all its risk of
loans . moreover these are more costly and their clearance is essential
. the firm has done so

Capital work in progress, sometimes at the end of the financial

year, there is some construction or installation going on in the
company, which is not complete, such installation is recorded in the
books as capital work in progress because it is asset for the business.
This is usually recorded as an asset on the balance sheet. Work in progress
indicates any good that is not considered to be a final product, but must still be
accounted for because funds have been invested toward its production. An
increase in wip is good from the management point of view because these are
assets and these will contribute to in increase in working capital .
 REFERENCES:
o Guidance from faculty and corporate guide.

o Reference to company’s financial statements.

o Reference to R.K. Marble Private limited website.

o Reference to various websites like;

o www.google.com

o www.indiainfoline.com

o www.wikepedia.com

o www.cmaindia.org

Reference to various magazines

o Books (Financial Management and Management Accounting)

 Appendices:

o Appendix- A: Balance Sheets for R.K. Marble Private Limited (2006-

07 to 2007- 08)
o Appendix- B: Profit & Loss Accounts for R.K. Marble Private Limited
(2006-07 to 2007-08)