A STUDY ON RATIO ANALYSIS MEASURES IN CHENNAI PORTS (P)LTD AT CHENNAI

INTRODUCTION

Single most important technique of financial analysis in which quantities are converted into ratios for meaningful comparisons, with past ratios and ratios of other firms in the same or different industries. Ratio analysis determines trends and exposes strengths or weaknesses of a firm.

SCOPE OF THE STUDY

This research helps the Chennai Port Trust to understand the financial trend as well as the draft to crises. This study is also beneficial to top management of the company by providing relevant information regarding important aspects like liquidity, leverage, activity and profitability. From this the Management can know the financial strength and weakness of the firm, The study could help Chennai Port Trust to measure the degree of the investors who are interest in the investing the company s share will also get benefited by going through the study and can easily take a decision whether to invest or not in the company shares, the study is also beneficial to employees and offers motivation by sharing how they are contributing for the company growth. This study is an indicator of financial performance of the Chennai Port Trust.

OBJECTIVES OF THE STUDY

To study the growth and development of Chennai Port Trust. To find the financial position and financial performance of the company. To calculate and estimate the important financial ratios as a part of financial analysis in Chennai Port Trust. To analyzes the important inter- relationship in financial statements To study the financial strengths and weaknesses of the firm.

RESEARCH METHODOLOGY
Research is a systematised effort to gain new knowledge The search for knowledge through objective and systematic method to finding a proper and feasible solution to a problem, is popularly known as research.

Research design A research design is the logical and systematic planning and directing a piece of research . -v.young

SOURCES OF DATA COLLECTION The required data collected was secondary in nature. The data are collected from the company s ANNUAL REPORTS, BALANCE SHEET, and INCOME STATMENT of Chennai port trust.

Data Collection Tool : The study was based on both primary data and secondary data for the purpose of the survey. Primary data: Primary data was collected through personal visit with the help of structured of questionnaire. Secondary data: Secondary data was collected through information from profile of company, previous research report website and owner manual book.

SHORT TERM CURRENT RATIO

(In lakhs)

Year

Current Asset

Current Liability

Ratio

2005-2006

142124

145110

0.98

2006-2007

168099

153487

1.10

2007-2008

205675

167379

1.23

2008-2009

240565

177740

1.35

2009-2010

279277

193850

1.44

Interpretation:
The above table 4.1.2 shows that the current ratio of was 0.98 in the year 2006, from year 2005 and 2010 the ratio of the company were in increasing order. In the year 2009-2010 the ratio is 1.44.

CASH POSITION RATIO (In lakhs) Source: Annual Report

Year Cash Current Liabilities Ratio

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

879125 1179025 1497376 1784395 1931047

145110 153487 167379 177740 193850

0.61 0.77 0.89 1.00 1.00

Interpretation
The above table 4.1.4 shows that the cash position ratio from the year 2005 to 2010 is in increasing order. In the year 2008-2009 and 20092010 i.e. (1.00) the company maintained adequate cash balance.

WORKING CAPITAL TRUNOVER RATIO (In lakhs)

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

Stores Inventory 1438 1392 1220 1338 1307

Working Capital 8739 3841 1208 5715 7047

Ratio 0.16 0.36 1.01 0.23 0.19

Interpretation: The above table 4.1.18 shows that the year 2007-08 Working Capital Turnover ratio is increased to 1.01, while comparing with previous years ratio 0.36. In the year 2009-10 Working capital Turnover ratio is decreased 0.19.

FINDINGS
Though the Solvency ratio for the financial year 2008 and 2010 was increased but in the other years the ratio was decreased, so its found that unfavorable solvency position of Total liabilities to outsiders and Total Assets. Though the liquidity ratio for the 2006 and 2007 years was low it has been increased considerably in the subsequent year. So, it is found that sufficient liquidity cash balance is maintain. The cash position ratio is decreased during from the year 2005 to 2008 and it was increased in next 2009 and 2010.The cash position ratio of the company is maintaining sufficient cash balance. The Debt-Equity ratio has been continuously decreased from the 2005 to 2010. Because long term funds and shareholders fund is decreased. Low ratio is generally viewed as favorable from long term creditors point of view.

SUGGESTIONS
The liquidity position of the Chennai port trust can be strengthened by reducing the current liability. The debt equity ratio should be improved. Investment policies can be improved and proper investment should be carried out to get better return on the investment. Though their frequent fluctuation in the fixed asset ratio, the company should concentrate more on stability of fixed assets. The company should improve the policies to get better working pital turn over which will help the organization to increase the profitability. The activity ratios had shown that the Chennai Port Trust is having efficient credit management system. The company is able to convert its receivables into cash. The activity ratios of Chennai Port Trust have also shown that the collection period is satisfactory.

CONCLUSION
The study on Ratio Analysis of Chennai Port Trust for the period of 5years (2005 to 2010) revels that the financial performance in general is satisfactory. It could be concluded that the port must increase the performance level of the organization. The study revel the financial position of the company for five years. the study will enable the company to plan for future financial analysis establishes relationship between different items in the balance sheet and helps to analyzing the firms profitability over times, its ability to generate cash to be able to pay interest and repay principle .It is the responsibility of the financial manager to see that the source of funds are used in an effectively and efficiently.