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CHAPTER-IV DATA ANALYSIS AND INTERPRETATION TABLE NO:4.1.

1 SCHEDULE OF CHANGES IN WORKING CAPITAL 2005-2006 Particular Current Asset Inventores Debtors Cash&Bank balance Advances 149.79 288.11 20.14 58.87 165.72 206.35 91.91 61.92 15.93 81.76 71.77 3.05 2005 2006 Rs in Crores Increase Decrease

Current Liabilities Current Liabilities


Net decrease capital in working

302.49

325.92

23.43

14.44

14.44

TOTAL

214.42

214.42

105.19

105.19

INTERPRETETION The working capital shows a decrease in working capital at Rs 14.44 (in Crores) For the year 2005-2006. The main contribution is Debtors, Stock,Current Liability are increasing in trend ,and cash& bank balance are decreased in trend.

TABLE NO:4.1.2 SCHEDULE OF CHANGES IN WORKING CAPITAL 2006-2007 Rs in Crores Particular Current Asset Inventores Debtors Cash&Bank balance Advances Current Liabilities Current Liabilities
Net Increase in working capital

2006 165.72 206.35 91.91 61.92

2007 205.8 277.23 17.25 83.2

Increase 40.08 70.88

Decrease

74.66 21.28

325.92
43.82

339.68

13.76
43.82

TOTAL

243.8

243.8

132.24

132.24

INTERPRETETION The working capital shows a increase in working capital at Rs.43.82 (in crores) for the year 2006-2007 .The main contributions are inventories ,cash& bank balances,are increasing in trend,Debtors are decreased in trend.

TABLE NO:4.1.3 SCHEDULE OF CHANGES IN WORKING CAPITAL 2007-2008 Rs in Crores Particular Current Asset Inventores Debtors Cash&Bank balance Advances Current Liabilities Current Liabilities 2007 205.8 277.23 17.25 83.2 2008 277.04 287.94 18.02 105.16 Increase 71.24 10.71 0.77 21.96 decrease

339.68

385.79

46.11

Net Increase in working capital

58.57

58.57

TOTAL

302.37

302.37

104.68

104.68

INTERPRETETION The working capital shows a increase in working capital at Rs.58.57 (in crores) for the year 2007-2008 .The main contributions are inventories ,cash& bank balances,are increasing in trend,Debtors are decreased in trend.

TABLE NO:4.1.4 SCHEDULE OF CHANGES IN WORKING CAPITAL 2008-2009 Rs in Crores Particular Current Asset Inventores Debtors Cash&Bank balance Advances Current Liabilities Current Liabilities
Net Decrease capital in working

2008 277.04 287.94 18.02 105.16 385.79

2009 233.81 243.97 12.07 90.01 395.56

Increase

decrease 43.23 43.97 5.95 15.15 9.77

118.07

118.07

TOTAL

302.37

302.37

118.07

118.07

INTERPRETETION The working capital shows a decrease in working capital at Rs118.07 (in Crores) For the year 2008-2009. The main contribution is Debtors, Stock,Current Liability are increasing in trend ,and cash& bank balance are decreased in trend.

TABLE NO:4.1.5

SCHEDULE OF CHANGES IN WORKING CAPITAL 2009-2010 Rs in Crores decrease

Particular Current Asset Inventores Debtors Cash&Bank balance Advances Current Liabilities Current Liabilities
Net Increase in working capital

2009 233.81 243.97 12.07 90.01 395.56


59.73

2010 294.39 325.78 8.62 99.36 484.12

Increase 60.58 81.81

3.45 9.35 88.56


59.73

TOTAL

244.03

244.03

151.74

151.74

INTERPRETETION The working capital shows a increase in working capital at Rs.59.73 (in crores) for the year 2009-2010 .The main contributions are inventories ,cash& bank balances,are increasing in trend,Debtors are decreased in trend.

TABLE NO:4.1.6 CASHFLOW STATEMENT FOR THE YEAR 2005-2006

Particulars A.Cash Elow from Operating Activities Net Profit Before Tax Adjustment for: Depreciation Interest and finance charges Profit on Sale of Assets profit on Sale of Investment Provision For Doubtful Debt &advances Interest received Dividend income Operating profit before working capital changes Adjustment for: Increase in inventories Decrease in sundry debtors Increase in loans & Advances Decrease incurrent liabilities Direct Tax paid Net cash flow from operating activities B.Cash Floe from investing Activiting: Capital Expenditure Sale of fixed Assets Investment in subsidiary Investment in joint ventures Purchase of other investments Sale of investment in Associates Sale of other investment Dividend received Interest received Net Cash flow from investing activities C.Cash floe from financing activiting: Borrowings Repayments on brrowings Dividends paid Interest paid Net Cash flow from financing activities Net Increase/(decrease) in cash

Rs in Crores 2005-2006 Rs 245.63 48.56 13.18 -21.21 -89.06 2.18 -0.24 -12.84 186.2 -15.93 79.58 -2.78 -46.56 -54.18 146.35 -131.77 27.25 -26.3 -3.49 -50 101.63 21.07 12.84 0.24 -48.53 66.52 -50.34 -29.32 -12.91 -26.05 71.77

INTERPRETATION

In this above

table the cashflow statement shows that the opening cash

balance isRs.20.14.(in crores) closed balance is increased.Rs91.91(incrores). also our net cash also increased this year only most higher net cash will be hold . the borrowing amount increased. That is one of the reason. paid,and interst paid so increase the financial activity. Repayment ,dividend

CASHFLOW STATEMENT FOR THE YEAR 2006-2007

Particulars A.Cash Elow from Operating Activities Net Profit Before Tax Adjustment for: Depreciation Interest and finance charges Profit on Sale of Assets profit on Sale of Investment Provision For Doubtful Debt &advances Interest received Dividend income Operating profit before working capital changes Adjustment for: Increase in inventories Increase in sundry debtors Increase in loans & Advances Increase incurrent liabilities Direct Tax paid Net cash flow from operating activities B.Cash Floe from investing Activiting: Capital Expenditure Sale of fixed Assets Investment in subsidiary Investment in joint ventures Purchase of other investments Sale of investment in Associates Sale of other investment Dividend recevied Interest received Net Cash flow from investing activities C.Cash floe from financing activiting: Borrowings Repayments on brrowings Dividends paid Interest paid Net Cash flow from financing activities Net increase/(Decrease) in cash

Rs in Crores 2006-2007 Rs 195.31 50.39 11.29 -0.55 -71.41 0.73 -0.48 -10.28 175 -40.08 -74.2 -8.28 86.77 -59.91 79.3 -139.68 2.12 -12.54

129.26 0.48 4.77 10.28 -5.31 27.91 -65.76 -12.24 -98.56 -148.65 -74.66

INTERPRETATION

In this above table the cash flow statement shows that the opening cash balance is Rs91.91.(in crores)and closing balance is Rs.17.25 (in crores).The net cash is the decreased cash will more utilize for operatin activities . the company has to increase their cash position to meet their requirement and the company has to increase the investing activities in the securities and it has to borrow the loan from others.

CASHFLOW STATEMENT FOR THE YEAR 2007-2008 Rs in Crores Particulars 2007-2008

Rs A.Cash Elow from Operating Activities Net Profit Before Tax Adjustment for: Depreciation Interest and finance charges Profit on Sale of Assets profit on Sale of Investment Provision For Doubtful Debt &advances provision For contingencies Interest received Dividend income Operating profit before working capital changes Adjustment for: Increase in inventories Increase in sundry debtors Increase in loans & Advances Increase incurrent liabilities Direct Tax paid Net cash flow from operating activities B.Cash Floe from investing Activiting: Capital Expenditure Sale of fixed Assets Investment in subsidiary Investment in joint ventures Purchase of other investments Sale of investment in Associates Sale of other investment Dividend received Interest received Net Cash flow from investing activities C.Cash floe from financing activiting: Borrowings Repayments on brrowings Dividends paid Interest paid Net Cash flow from financing activities Net increase/(Decrease) in cash 83.44 53.15 18.15 -5.21 -1.25 2.15 0.7 -1.3 -6.5 143.33 -21.24 -12.86 -9.18 52.29 -5.85 146.49 -108.83 11.88 -18.99 -61.63 -50.01 1.3 1.3 1.52 6.5 -216.96 159.21 -38.16 -17.46 -32.35 71.24 0.77

INTERPRETATION

This accountintng year will be net cash is increase in Rs.0.77( in crores) it was borrowing cash source banks or others and our company capital expenditure increase . At the same time amount will borrowing so cash will be increased.

CASHFLOW STATEMENT FOR THE YEAR 2008-2009 Rs in Crores 2008-2009 Particulars Rs A.Cash Elow from Operating Activities

Net Profit Before Tax Adjustment for: Depreciation Interest and finance charges Profit on Sale of Assets Profit on Sale of Investment Provision For Doubtful Debt &advances Bad debts written off provision For contingencies Interest received Dividend income Operating profit before working capital changes Adjustment for: Increase in inventories Decrease in sundry debtors Increase in loans & Advances Decrease incurrent liabilities Direct Tax paid Net cash flow from operating activities B.Cash Floe from investing Activiting: Capital Expenditure Sale of fixed Assets Investment in subsidiary Investment in joint ventures proceeds from sale of own shares heldd through trust Sale of investment in Associates Dividend received Interest received Net Cash flow from investing activities C.Cash floe from financing activiting: Borrowings Repayments on brrowings Dividends paid Interest paid Net Cash flow from investing activities Net increase/(Decrease) in cash

83.02 59.12 28.19 -0.25 -46.76 -2.66 3.21 4.83 -3.08 -11.25 114.88 -6.77 43.48 -0.44 -23.65 -17.92 109.58 -86.91 3 -3.4 -191.82 32.93 104.61 11.25 3.52 -126.82 98.94 -38.33 -27.73 21.59 11.29 -5.95

INTERPRETATION

In this above table the cash flow statement shows that the opening cash balance is Rs.18.02 (in crores).and its closing balance is Rs.12.07 (in crores). The cash from operation also increases and the company has to increase their cash postion to meet their requirements and the company has to investment in the securities and it has to borrow the loan from others.

CASHFLOW STATEMENT FOR THE YEAR 2009-2010 Rs in Crores 2009-2010 Particulars Rs A.Cash Elow from Operating Activities

Net Profit Before Tax Adjustment for: Depreciation Interest and finance charges Profit on Sale of Assets Provision For Doubtful Debt &advances Bad debts written off Provision For Doubtful advances Provision for diminution in value of investment Unrealised losses on foreign currency borrowing Interest received Dividend income Operating profit before working capital changes Adjustment for: Increase in inventories Decrease in sundry debtors Increase in loans & Advances Decrease incurrent liabilities Direct Tax paid Net cash flow from operating activities B.Cash Floe from investing Activiting: Capital Expenditure Sale of fixed Assets Investment in subsidiary Purchase of other investments Sale of investment in Associates Dividend recevied Interest received Net Cash flow from investing activities C.Cash floe from financing activiting: Borrowings Repayments on brrowings Dividends paid Interest paid Net Cash flow from investing activities Net increase/(Decrease) in cash

129.5 66.81 28.76 1.36 -4.18 4.03 5.18 34.77 0.74 -1.55 -1.37 264.05 -60.58 -81.68 -23.21 106.9 53.98 151.5 -96.38 1.48 -137.94 191.98 0.08 1.99 1.37 -421.38 367.79 -52.43 -27.37 -21.56 266.43 -3.45

INTERPRETATION In this above table the cash flow statement shows that the opening cash balance is Rs.12.07 (in crores).and its closing balance is Rs.8.62 (in crores). The cash

from operation also increases and the company has to increase their cash postion to meet their requirements and the company has to investment in the securities and it has to borrow the loan from others.

OVER ALL CASHFLOW STATEMENT

S.NO 1 2 3

PARTICULARS Net cash flow from operating activities 146.35 Net Cash flow from investing activities -48.53 Net Cash flow from Financing activities -26.05 Net Increase/decrease in cash Opening cash balance Closeing cash balance
71.77 20.14 91.91

200506 Rs

200607 Rs
79.3 -5.31 148.65 -74.66 91.91 17.25

Rs in Crores 2007- 2008- 200908 09 10 Rs Rs Rs


146.49 216.96 71.24 0.77 17.25 18.02 109.58 126.82 11.29 -5.95 18.02 12.07 151.5 421.38 266.43 -3.45 12.07 8.62

INTERPRETATION

From the above table its understood that the study unit has a positive cash flow during 2005-2006 . A year of 2008-2009 also fund from investing activity. Last year closeing cash balance is vary low.but that year should be involve in financing activity..

RATIO ANALYSIS

CURRENT ASSET RATIO Current ratio may be defined as the relationship between current asset and current liability. This ratio is know as working capital ratio. Is a measure of general liquidity and is most position. widely used to make the analysis of short term financial

Current asset CURRENT ASSET RATIO = ----------------------Current liability

TABLE SHOWS CURRENT ASSET RATIO Rs in crores Year


2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Current Asset (Rs)


525.9 596.62 638.03 579.86 728.15

Current Liability (Rs)


325.92 352.82 385.66 395.56 484.12

Current Ratio
1.61 1.70 1.65 1.46 1.50

INTERPRETATION From the above table the current asset ratio is below the norms 2:1 the study states that the current asset is below the standard level.

C urre nt A s s e t R a tio
1.7 1 .6 5 1.6 1 .5 5 C u rre n t R a tio 1.5 1 .4 5 1.4 1 .3 5 2 0 0 5-2 0 0 6 0 0 6 -2 0 0 7 0 0 7 -2 0 0 8 0 08 -2 0 0 9 0 0 9 -2 0 1 0 2 2 2 2 Y e a rs

C u rre n t R a t io

QUICK RATIO. Quick ratio also know as acid test or liquid ratio established a relationship between quick(or)liquid liabilities . An asset is said to be liquid if it can be converted into within a short period without loss of value. The other liquid asset are bills receivables,such debtors,marketable securities and temporary investment.

Current asset-(stock) QUICK RATIO=---------------------------Current liabilities-(bod) TABLE SHOWS QUICK RATIO Rs in crores Year
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Quick Assets (Rs)


360.18 444.02 410.99 396.06 628.47

Current Liability (Rs)


325.92 352.82 385.66 395.56 484.12

Quick Ratio
1.10 1.26 1.07 1 1.29

INTERPRETATION From the above table the quick ratio stisfy the norms 1.5:1. In 2008-2009 The quick ratio is not satsfy the norms 1.5:1. the investment in quick asset is less during that year.

Quick Asset Ratio


1.2 1 0.8 Quick Ratio 0.6 Quick Ratio 0.4 0.2 0 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Ye ar

CASH POSITION RATIO When liquidity is highly restricted in terms of cash and cash equivalents, This ratio should be calculated, liquidity ratio measures the relationship between cash and near cash items on one hand ,and immediately maturing obligations on the other .The inventory and the debtors are excluded from current asset ,to calculate this ratio.

Cash + marketable securities Cash position= ----------------------------------Current liability TABLE SHOWS CASH POSITION RATIO Rs in crores Year
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Cash&Marketable securities Rs
149.28 74.62 71.22 62.08 203.33

Current Liability Rs
325.92 352.82 385.66 395.56 484.12

Cash position
0.46 0.21 0.18 0.16 0.42

INTERPRETATION Generally ,0.75:1 ratio is recommended to ensure liquidity. But our company maintain in the year of 2005-2006 is 0.46:1 this is only a top most liquidity position. And lowest liquidity position is in the year of 2008-2009 is 0.16:1.

Cash position Ratio

0.5 0.45 0.4 0.35 0.3 Cash position 0.25 0.2 0.15 0.1 0.05 0 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Years Cash position

NET PROFIT RATIO This ratio is used to measure the over all profitability and hence it is very useful to proprietors. It is also called Net profit to sales ratio (=profit ratio). Net profit Net profit ratio = --------------100 Net sales TABLE SHOWS NET PROFIT RATIO Rs in crores Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Net Rs 182.93 155.78 56.5 72.18 81.21 Profit Net sales Rs 1460.94 1615.04 1762.33 2061.09 2345.64 Profit margin 0.13 0.1 0.03 0.04 0.03 Margin % 13 10 3 4 3 in

INTERPRETATION This Net profit ratio is very high fluctuating trend. The top most value of the net profit ratio in the year of 2005-2006 is 13%and lowest net profit is 2007-2008 and 2009-2010 is 3% .

N e t P ro fit M a rg in
14 12 10 8 P ro fit M a rg i n i n p e rce n ta g e 6 4 2 0 2 00 5 -2 00 6 0 0 6-20 0 7 0 7 -2 00 8 0 08 -20 0 9 0 9-201 0 2 20 2 20 Ye a rs

M arg in in %

OPERATING RATIO This ratio establishes the relationship between total operating expense and sales .Total operating expenses include cost of goods ,administrative ,financial expenses and selling expenses.cost of goods sold are also know as direct operating expenses and the rest are know as other operating expenses.operating ratio are generally expressed in percentages. Operating Ratio= cost of good sold+operating expenses ----------------------------------------------100 Net sales TABLE SHOWS OPERATING RATIO Rs in crores Year
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Cost of good sold& Operating Net Sales exp (Rs) (Rs)


1196.52 1309.46 1460.18 1781.7 1800.83 1460.94 1615.04 1762.33 2061.09 2345.64

Operating Ratio in %
81.90 81.07 82.85 86.44 76.77

INTERPRETATION The operating ratio is fluctuating trend . The top most value of the operating ratio in the year 2008-2009 is 86.85% and lowest operating ratio in the year 20092010 is 76.77%.

O p e ra tin g R a tio
88 86 84 82 8 O p e r a tin g R a tio0 in % 78 76 74 72 70 20052006 20062007 20072008 Y e ars 20082009 20092010 O p e ra tin g R a tio in %

TREND ANALYSIS INVENTORIES Yc=a+bx Where a=y/n

b=xy/x2
Rs in crores

Year
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

X
-2 -1 0 1 2 5

X2
4 1 0 1 4 10

Inventories in Rs Y XY
165.72 205.8 227.04 233.81 294.39 1126.76 -331.44 -205.8 0 233.81 588.78 285.35

Trend Value
168.29 196.82 225.35 253.89 282.42

TOTAL

(source: Annual report)

A = 1126.76/5 =225.35 B =285.35/10 =28.53 Trend Value =310.94 INTERPRETATION: From the table inventories value during the study period this is noted. Hence it is found that the inventories value in 2010-2011 is found to be Rs.310.94(in crores).

INVENTORIES 350 300 Value In Rs 250 200 150 100 50 0 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Years Inventories Trend Value

CASH / BANK Rs in Crores Trend XY(Rs) value


-183.82 -17.25 0 12.07 17.24 -171.76 4.77 12.4 29.57 46.74 63.91

Year
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

X
-2 -1 0 1 2 5

X
4 1 0 1 4

Cash/Bank (Rs)Y
91.91 17.25 18.02 12.07 8.62 147.87

TOTAL

10

(source: Annual report)

A = 147.87/5 =29.57 B =171.76/10 =17.17 Trend Value =81.08 INTERPRETATION: From the table cash/bank balance trend during the study period this is noted. Hence it is found that the cash and bank value in 2010-2011 is found to be Rs.81.08(in crores).

CASH/BANK 100 90 80 70 60 50 40 30 20 10 0 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Years

Cash/Bank (Rs)Y Trend value

CURRENT LIABILITIES Rs in Crores Year


2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

X
-2 -1 0 1 2 5

X2
4 1 0 1 4 10

Current Liabilities (Rs) XY Y (Rs)


325.92 339.68 385.66 395.56 484.12 1930.94 -651.84 -339.68 0 395.56 968.24 372.28

Trend Value
311.73 348.96 386.19 423.42 460.65

TOTAL

A = 1930.94/5 =386.19 B =372.28/10 =37.23 Trend Value =497.88 INTERPRETATION: From the above current liabilities trend during the study period this is noted. Hence it is found that the current liabilities value in 2010-2011 is found to be Rs.497.88(in crores).

C U R R E N T L IAB IL IT IE S
600 500 400 Values in Rs 300 200 100 0 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Ye a rs Current Liabilities (Rs )Y Trend V alue

CASH CONVERSION CYCLE CASH CONVERSION CYCLE = Inventory conversion period+ Receivable Collection period - Payment deferral period Particulars A.inventory conversion period B.receivable collection period A+B C.payment deferral period 20052006 5.53 11.06 16.59 11.26 5.33 20062007 5.04 11 16.04 11.59 4.45 20072008 5.01 10.96 15.97 12.04 3.93 20082009 5.78 11.16 16.94 10.68 6.26 20092010 4.92 11.48 16.4 14.44 1.96

CASH BUDET

Rs in crores Particulars a. OPENING WORK IN PROGRESS


b.Receipts c.payments

20052006 25.25
1595.01 1349.35

20062007 33.08
1707.78 1512.47

20072008 36.31
1788.29 1704.85

20082009 39.32
2136.94 2052.08

20092010 51.55
2361.92 2192.47

d.Net cash flow (b-c)


f(a+e) g.Minimum cash balance Requirement

245.66 195.31
182.93 20 155.78 20

83.44
56.5 20

84.86 169.45
72.18 20 81.21 20

SURPLUS RELATION TO THE MINIMUM CASHBALANCE REQUIREMENT(F-G)

162.93

135.78

36.5

52.18

61.21

SURPLUS RELATION TO THE MINIMUM CASHBALANCE REQUIREMENT(F-G)


180 160 140 120 100 CASH REQUIREMENT 80 60 40 20 0 20052006 20062007 20072008 YEAR 20082009 20092010

SURPLUS RELATION TO THE MINIMUM CASHBALANCE REQUIREMENT(F-G)