Financial statement analysis of Srinivasa Auto Components pvt.ltd.

By U.Leo Under the guidance of Shri.Vishalakshi Mam

Introduction to Topic
Financial statements refer to formal and original statements prepared by a business concern to disclose its financial information. According to AICPA (American Institute of Certified Public Accountants), Financial statements are prepared for the purpose of presenting a periodical review or report on the progress by the management and deal with (i) the status of investment in the business and (ii) the results achieved during the period under review.

History
Srinivasa group of companies was founded by MR.R.Ravichandran. srinivasa group of companies
SRINIVASA FASHIONS PVT.LTD. SRINIVASA AUTO COMPONENTS SAC (HOSUR) SAC (CHENGALPET) SAC (CHENNAI) SAC (PONDICHERRY)

Mr.R.Ravichandrans son Mr.R.Varun started Srinivasa Auto Components in the year of 1996 at various parts of Tamilnadu. Srinivasa Auto Components Private Limited is an ISO 9001-2000 and SA 8000 certified company. SAC is the manufacturer of various fastening materials. They supply these materials only to TVS Sundaram fasteners pvt.ltd. Because Sundaram fastener is the main customer of SAC. SACs work force crosses 2000.

Organizational Chart
MR.R.RAVICHANRAN (FOUNDER & CEO) MR.R.VARUN (MD) MR.MANAIVANNAN (UNIT HEAD - PONDY)

MR.MOHAN (CHIET ACCOUNTANT)

MR.PRABHU
(QUALITY HEAD) INSPECTION DEPT.

MR.SRINIVASAN (PRODUCTION HEAD)

MR.ANTONY RAJ (HR EXECUTIVE) OFFICE ASSISTANT

LINE DEPT.

TRAINER

SORTING OUT DEPARTMENT

MACHINING DEPARTMENT

SORTING OUT INCHARGE

SUPERVISOR

OPERATORS

OPERATORS

Review of literature
(1). According to Wild, Subramanyam & Halsey (2007), financial statements are the major source of information used by its users to have an understanding about a company. There are five components of financial statements that are available to the users, which are balance sheet, income statement, owners equity statement, cash flow statement and notes to financial statements. The preparation of financial statements is required to provide information to its users regarding the financial condition, performance and future prospects of a company (Alfredson, Leo, Picker, Pacter, and Radford, 2005). Alfredson et al., (2005) identify that each financial statement has its own objectives. Balance sheet is prepared to provide information about a companys financial condition, while income statement is used to provide information about a companys financial performances. The owners equity statement is used to assess the full performance of a company. Moreover, the statement of owners equity acts as a connection between the balance sheet and income statement. Cash flow statement is prepared to support users with the information about the movement of cash (inflows and outflows) in the company. the last statement which is the notes to financial statements contains additional information to improve the understanding of the other four statements mentioned above.

(2).Financial Performance of S.Kumar Nationwide Ltd. & Gokaldas Export Ltd (2009): Abstract: Financial Statements are summaries of monetary data about an enterprise. Hence Financial Statement Analysis will help one to assess the Viability, Stability, Profitability and Liquidity of an enterprise. In this Assignment, an attempt, to analyze the financial performance of two companies in Textile Industry (S.Kumar Nationwide Ltd. & Gokaldas Export Ltd.) has been made. As the result of this assignment researcher found the performances of S.Kumar Nationwide Ltd. is better than Gokaldas Export Ltd. Methodology: This assignment is specially based on the secondary data. The required financial data were extracted from the financial statements of the selected companies. The qualitative information was collected from website www.indiainfoline.com. This assignment covers the time horizon of the financial year 2007, 2008 & 2009. Tools Used: Common Size Balance Sheet & Income Statement A company balance sheet, that displays all items as percentages of a common base figure is referred to Common Size Balance Sheet & Income Statement.

(3).April 23, 2011 (Shibu Sam) Financial statements help businesses/organizations to review its operations over a specific period of time and determine its worth. When financial statements are provided to outside sources they should be in a specific format and following specific accounting guidelines. Basic financial statements consist of an income statement, balance sheet, and cash flow statement. The income statement shows the organizations profit and loss over a specific period of time. The balance sheet is a summary of assets, liabilities and equity. The cash flow statement summarizes receipts and disbursements of cash. This helps business management to see where cash is actually being spent. Financial statements are a useful tool; but it has two limitations. These limitations are the comparability of financial date between companies and the need to look beyond ratios (www.accountingformanagement.com). Differences in accounting methods between different companies can make it difficult to compare financial date. Most analysts know to keep this in mind and will follow other avenues of investigation. An experienced analyst will know that ratios are not sufficient as a basis for judgment about an organizations future financial health. Ratios are a starting point in any financial statement review. Most analysts will look at industry trends, changes in technology and consumer tastes, changes in economic issues and also changes within the company itself.

Objectives of the study

To study the financial condition of Srinivasa Auto Components. To measure the efficiency of performance between various periods. To analyze the profitability position of Srinivasa Auto Components for different periods.

RESEARCH METHODOLOGY
The main objective of the study is to determine and analyze the financial position Srinivasa auto components pvt. Ltd. For this purpose, the information was collected through Secondary sources provided by company and through companys website. www.srinivasamachinesworks.com The other analytical information was collected from annual reports of SAC. Balance sheet & Profit and Loss account statements. Tools and Techniques for the analyses are; Comparative statement Common size statement Ratio analyses Trend analyses