A SUMMER TRAINING REPORT ON TO STUDY THE FINANCIAL POSITION OF AMBUJA CEMENT LTD.

Submitted in partial fulfillment for the award of the degree Master of Business Administration Chhattisgarh Swami Vivekanand Technical University, Bhilai

Guided By, Mr. B. S. Thakur T & D (HOD) MBA Semester III Session: 2012 2013

Submitted By, Sandeep kumar yadav Roll No. 5373611097

ShriShankaracharya Group of Institutions

Faculty of Management Studies

(Managed by ShriGangajali Education Society, Bhilai) JUNWANI, BHILAI-490020 (CHHATTISGARH), INDIA

DECLARATION

I, Sandeep kumar yadav , a student of MBA IIIrd Semester 2012-13, at Shri Shankaracharya Group Of Institution hereby declare that this project report under the title To Study The Financial Position of Ambuja Cement Ltd. is the record of my original work under the guidance of Mr. B.S. Thakur.

This report has never been submitted to anywhere else for award of any degree/diploma.

Place: Bhilai Date: 1st Aug 2012

Devendra Kumar Pal MBA 3rd Sem.

CERTIFICATE

This is to certify that the project To Study The financial position of Ambuja Cement Ltd submitted to Shri Shankaracharya Group Of Institution, Bhilai in partial fulfillment of the requirement for the award of Master of Business Administration (MBA) is a bona fide work carried out by sandeep kumar yadav , a student of MBA 3rd Semester, under my supervision and guidance.

I wish him best of Luck for a bright future.

Date: Place: - Bhilai

B. S. Thakur (HOD, T & D)

ACKNOWLEDGEMENT

It gives me great pleasure to this report, a written testimony the most fruitful survey. I sincerely acknowledge that whatever little achievements I have made through this report would not have been possible without co-operation. I would like to take this opportunity to thank all the people without whom this project would not have been successfully completed. I offered my profound gratitude to my project guide Mr. B. S. Thakur for giving me the opportunity of amalgamating my theoretical knowledge with practical experience according to interest. This training will tenure cherish as memorial experience throughout my career, as it was my first opportunity to apply my academics knowledge.

Place: Bhilai Date:

Sandeep kumar yadav MBA Semester III

PREFACE

The practical study through, conducting the survey and doing project work has significant value, the theoretical knowledge gained in classroom is not faithful and complete unless and until it is supplemented by the practical work done in the field. It always boosts up our knowledge in pursuing the post graduate course in management. It is the internal part of our curriculum to conduct survey and project work which not only arguments the managerial skills in us but also boarders our partial prospective. In view of above the survey on To Study The Financial Position of Ambuja Cements Ltd.

CONTENTS

i. ii. iii. iv.

DECLARA CERTIFICATE ACKNOWLEDGEMENT PREFACE

Page No.2 Page No.3 Page No.4 Page No.5 Page No. 7-17 Page No. 18-19 Page No. 20-21 Page No. 22-35 Page No. 36-37 Page No. 38-39 Page No. 40-41 Page No. 42

1. COMPANYS PROFILE 2. LITERATURE REVIEW 3. RESEARCH METHODOLOGY 4. DATA ANALYSIS AND RESULTS 5. RECOMMENDATION 6. CONCLUSION 7. LIMITATIONS 8. BIBLIOGRAPHY

Companys Profile

HISTORY
Ambuja Cements was set up in 1986. In the last decade the company has grown tenfold. The total cement capacity of the company is 18.5 million tones.

Its plants are some of the most efficient in the world. With environment protection measures that are on par with the finest in the developed world.

The company's most distinctive attribute, however, is its approach to the business. Ambuja follows a unique homegrown philosophy of giving people the authority to set their own targets, and the freedom to achieve their goals. This simple vision has created an environment where there are no limits to excellence, no limits to efficiency and has proved to be a powerful engine of growth for the company.

As a result, Ambuja is the most profitable cement company in India, and one of the lowest cost producers of cement in the world.

Capacity built up from 0.7 Mio t in 1986 to 18.0 Mio t as of today at CAGR of 18%

Organic growth and growth through acquisitions

INTRODUCTION

Ambuja Cements Limited was earlier known as Gujarat Ambuja Cements Limited (GACL). The company was set up in 1986. In this short span Ambuja Cements has achieved massive growth and presently, the total cement capacity of the company is 16 million tonnes. The company has three subsidiaries, viz, Ambuja Cement Rajasthan Limited (ACRL), Ambuja Cement Eastern Limited (ACEL) and Ambuja Cement India Limited (ACIL). Ambuja also has a strategic investment in ACC through its subsidiary (ACIL).

Ambuja Cements is the most profitable cement company in India, and the lowest cost producer of cement in the world. One of the major reasons that Ambuja Cements is the lowest cost producer of cement in the world is its emphasis on efficiency. Power consists over 40% of the production cost of cement. The company improved efficiency of its kilns to get more output for less power. Thereafter Ambuja Cements set up a captive power plant at a substantially lower cost than the national grid. The company sourced a cheaper and higher quality coal from South Africa, and better furnace oil from the Middle East. As a result, today, the company is in a position to sell its excess power to the local state government.

Ambuja cement is the first company to introduce the concept of bulk cement movement by sea in India. This resulted in speedier transportation and brought many coastal markets within easy reach. Ambuja Cements has a port terminal at Muldwarka, Gujarat. It is an all weather port that handles ships with 40,000 DWT. The port has a fleet of seven ships with a capacity of 20500 DWT to ferry bulk cement to the packaging units. The company has bulk cement terminals at Surat, Panvel, and Galle. The Surat terminal has a storage capacity of 15,000 tonnes and Panvel terminal has a storage capacity of 17,500 tones. Both the terminals have bulk cement unloading facility. The port at Galle, 120 km from Colombo, Sri Lanka, handles million tones of cement annually.

Vision: To be Indias Most Admired Company.

Mission: Delighted Customers Inspired Employees Empowered Partners Energized Society

Philosophy: Give a man orders, And he will do the task reasonably well. But let him set his own targets, Give him freedom and authority And his task becomes

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Major Achievements of Ambuja Cement

Most profitable cement company in India. Lowest cost producer of cement in the world. Its environment protection measures are at par with the best in the world. The pollution levels at all its cement plants are lower than the rigorous Swiss standards of 100 mg/NM3.

The only cement company to be awarded with the National Quality Award. First cement company to first to receive the ISO 9002 quality certification. Received ISO 14000 Certification for environmental systems. India's largest exporter of cement. Received Best Award for highest exports by CAPEXIL. First company to introduce the concept of bulk cement movement by sea in India.

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Key person of management

Chairman Director Vice Chairman Director

N S Sekhsaria Bernard Fontana Paul Hugentobler M L Bhakta Nasser Munjee Rajendra P Chitale Shailesh Haribhakti Omkar Goswami

Company Secretary Director Managing Director

Rajiv Gandhi Naresh Chandra Onne Van Der Weijde

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AMBUJA LOCATION IN INDIA

5 Cement Plants
6 Grinding Stations Darlaghat Rabriyawas Ambujanagar Bhatapara Maratha

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Ropar Bhatinda Sankrail Uttaranchal Farakka Surat

2 Bulk Cement Terminals 7 Regional Sales Offices 45 Branches 120 Dumps 28 Yards

AQUISITION Ambuja cement limited was earlier known as modi cement limited,was a public limited, registered on 17th june 1982 under the company act 1956. On 9 th December 1997 its board constituted and m/s gujrat ambuja cement limited was introduced as the company promoter of the company. It took over the sick units of modi cement ltd. On 3rd march 1998 and incorporate as ambuja cement eastern limited.

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AMBUJA CEMENT Ltd., BHATAPARA UNIT

It was set up as MODI CEMENTS LIMITED in 17.06.1982. Commercial production started in Jan 1987. After that it suffered great loss, the plant was inoperative for 6 months. Workers were not paid bonus and statutory dues and about 1600 employees of plant suffered from idling, pessimism and low productivity. A union of 70 security guards filed a case against plant. Then Ambuja Cement Eastern Limited took over the plant in 1997, When Ambuja Cement Eastern Limited took over the plant the biggest problem was that there is neither equipment nor location. Then, it was referred to BIFR(Board for Industrial Financial Re-construction). The BIFR thoroughly examined the issue and had two alternatives: a) To wind up the unit. b) To seek a co-promoter having expertise and capability to revive the ailing unit. BIFR selected Gujarat Ambuja Cement Limited as co-promoter and appointed IDBI as monitoring agency. As a result of revival process: a) Electricity connection was re-established. b) The cleaning of plant and maintenance of work was taken up and finally production was started. Then name of the company was changed to Ambuja Cement Eastern Limited on 01.03.1988. For employee motivation the 1 BHK flat was converted to 2 BHK by adding one more room and VRS facility for employees was introduced.

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The company started making progress in all spheres of activities since 2000. ACEL amalgamated into GACL on 01.01.2006. And, finally GACL has been changed to AMBUJA CEMENT LIMITED on 05.04.2007. BHATAPARAS PERFORMANCE IN 2007: Ranked 1st in overall performance among all ACL units. Ranked 3rd in overall performance of ACL and ACC units. Ranked 23rd among all Holcim companies.

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HISTORY OF HOLCIM COMPANY

Construction materials production and sale of cement (produced and imported), aggregates and concrete Company. The history of Holcim (Italy) begins in 1928 with the establishment of the first cement production unit at Merone. In 1996 after progressive acquisitions and participations the company came under control of the Swiss Holderbank Group (since 2001 Holcim, now a world leader in construction materials). Holcim was founded in 1912 in a Swiss village called Holderbank.

Holcim works in more than 70 countries & Employs more than 90,000 Employees.

In a span of 96 years Holcim has marked its presence in North America, South

America, Asia Pacific & Europe.

Holcim entered into a strategic alliance with ACC & Ambuja in 2005.

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Introduction and Literature Review

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INTRODUCTION
Finance is one of the most primary requisites of a business and the m o d e r n management obviously depends largely on the efficient management of the finance. Financial statements are prepared primarily for decision making. They play a dominant role in setting the frame work of managerial decisions. The finance manager h a s t o a d h e r e t o t h e f i v e R s w i t h r e g a r d t o m o n e y . T h i s r i g h t q u a n t i t y o f m o n e y f o r liquidity consideration of right quality. Whether owned or borrowed funds. At the right time to preserve solvency from the right sources and at the right cost of capital. T h e t e r m f i n a n c i a l a n a l y s i s i s a l s o k n o w n a s a n a l y s i s a n d i n t e r p r e t a t i o n o f financial statements refers to the process of determining financial strength and weakness of the firm by establishing strategic relationship between the items of the Balance Sheet, Profit and Loss account and other operative data.

LITERATURE REVIEW
Financial Analysis: Financial analysis is certain procedures and methods applied to
determine the past, present and also the future status and performance of business with the aim to compare how the business performed in the past, how it performs now and use such data for forecasting purposes, making decisions about the business performance, manage it and control.

Balance Sheet: A balance sheet is the basic financial statement. It presents data on
companys financial conditions on a particular date, based on conventions and generally accepted principles of accounting. The amount shown in the statements on the balances, at the time it was prepared in the various accounts listed in the companys accounting records, is considered to be a fundamental accounting statements. The balance sheet is a statement of assets, liabilities capital on specified date. It is therefore a static statement, indicating resources and the allocation of these resources to various categories of asset. It is so to say financial photography finance. Liabilities show the claims against its assets.

Ratio Analysis:

Ratio Analysis is considered as a powerful tool among the various tools of financial statement analysis. It facilitates a company in ascertaining its financial health i.e., its financial performance whether it is gaining profits or suffering losses. A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. So, the research methodology not only talks about the research methods but also considers the logic behind the method used in the context of the research study.

RESEARCH DESIGN: Descriptive research is used in this study because it will ensure the minimization of bias and maximization of reliability of data collected. The researcher had to use fact and information already available through financial statements of earlier years and analyze these to make critical evaluation of the available material. Hence by making the type of the research conducted to be both Descriptive and Analytical in nature.

DATA COLLECTION The required data for the study are basically secondary in nature and the data are collected from the audited reports of the company.

SOURCES OF DATA The sources of data are from the Balance Sheet and annual reports of the company from the year 2008 to 2011.

ANALYTICAL TOOLS APPLIED 1) Ratio Analysis 2) Financial Statement (Balance Sheet)

OBJECTIVES OF THE STUDY 1) To study the financial position of the company. 2) To analyze and interpret the trends as revealed by various ratios of the company.

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Data Analysis

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RATIO ANALYSIS 1) Liquidity Ratio

Liquidity ratios are a set of ratios or figures that measure a companys ability to pay off its short term debt obligations. This is done by measuring a companys liquid assets (including those that might easily be converted into cash) against its short-term liabilities. Liquidity ratios provide a measure of a companys ability to generate cash to meet its immediate needs. Commonly used liquidity ratios are: i) Current ratio :The current ratio is the ratio of current assets to current liabilities; Indicates a company's ability to satisfy its current liabilities with its current assets: Current ratio =Current assets / Current liabilities =3200.82 / 2990.55 = 1.07:1 Current Assets 2008-09 2009-2010 2010-2011 2008.77 3200.82 3911.08 Current Liabilities 2256.36 2990.55 3420.60

(cr.)

Current Ratio .89:1 1.07:1 1.14:1

current ratio
1.2

0.8

0.6

current ratio

0.4

0.2

0 2008 2009 2010

Interpretation: The standard ratio is consider 2:1 but in context in Ambuja cement the cureent ratio is not achieving the standard however it increase year to year.

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2) Quick ratio: Indicates a company's ability to satisfy current liabilities with its most liquid assets. Liquid ratio is also known as quick or Acid test ratio. Liquid assets refer to assets which are quickly convertible into cash.

Quick Ratio = Quick Assets / Current Liability

= 3854.08 / 3420.60 = 1.12 (Quick Assets = Current Assets Inventory) = 3911.08 57 = 3854.08 (cr.) Year 2008-09 2009-10 2010-11 Quick Assets 1959.33 3146.54 3854.08 Current Liabilities 2556.36 2990.55 3420.60 Quick Ratio .766 1.05 1.12

Quick assets
1.2 1 0.8 0.6 0.4 0.2 0 2008 2009 2010

Quick assets

Interpretation: As a quick ratio of 1:1 is considerd satisfactory as a firm can easily meet all current claims. But the liquid ratio of the concern is increasing year to year it reveals satisfactory position because the ratio is not below the standard ratio 1:1.

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2) Profitability Analysis Ratios Profitability ratios (also referred to as profit margin ratios) compare components of income with sales. They give us an idea of what makes up a company's income and are usually expressed as a portion of each dollar of sales. The profit margin ratios we discuss here differ only by the numerator. It's in the numerator that we reflect and thus evaluate performance for different aspects of the business: i) Gross profit ratio: shows the margin of profit. A high gross profit ratio is a great satisfaction to the management. A high gross profit margin indicates that the company can make a reasonable profit, as long as it keeps the overhead cost in control. A low margin indicates that the business is unable to control its production cost.

Gross Profit Ratio = Gross Profit / Net Sales * 100

=2100.29 / 7181.48 *100 = 29% (cr.) Year 2008-09 2009-10 2010-11 Gross profit 2100.29 2022.53 2172.27 Net sales 7181.48 7517.55 8602.89 Gross Profit Ratio 29% 26% 25%

Gross profit ratio

30% 29% 28% 27% 26% 25% 24% 23% 2008 2009 2010 Gross profit ratio

Interpretation: The concern having good gross profit ratio which shows a good profit earning capacity of the business with refrence to its sales. Therefore the gross profit ratio for the three years reveals a satisfactory condition of the business.

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(ii) Net profit ratio: A ratio of net profit to sales is called Net profit ratio. It indicates sales margin on sales. This is expressed as a percentage. The main objective of calculating this ratio is to determine the overall profitability. Net profit ratio determines overall efficiency of the business. It indicates the extent to which management has been effective in reducing the operational expenses. Higher the net profit ratio, better it is for the business. The ratio is calculated as: Net profit ratio = Net profit / Net sales * 100 = 1218.37 / 7181.48 * 100 = 17% (cr.) Year 2008-09 2009-10 2010-11 Net Profit 1218.37 1263.61 1228.86 Net Sales 7181.48 7517.55 8602.89 Net Profit Ratio 17% 16% 14%

Net profit ratio

18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2008 2009 2010 Net profit ratio

Interpretation: The net profit ratio is decreasing year to year in from past three years and its
indicates for doing improvement in the operational efficiency in the business.

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(iv) Return on investment ratio (ROI): ROI is the basic profitability ratio. This ratio establishes relationship between net profit (before interest, tax and dividend) and capital employed. It is expressed as a percentage on investment. The term investment here refers to long-term funds invested in business. This investment is called capital employed.ROI ratio judges the overall performance of the concern. It measures how efficiently the sources of the business are being used. In other words, it tells what is the earning capacity of the net assets of the business. Higher the ratio the more efficient is the management and utilization of capital employed Return on Investment = Net profit BI & T / capital employed * 100 =1971.49/304.98 * 100 = 6.46 (cr.) Year 2008-09 2009-10 2010-11 Net Profit BI & T 1971.49 1950.96 1994.45 Capital Employed 304.98 307.31 338.99 Return on Investment 6.46 6.34 5.88

Return on investment
6.6 6.5 6.4 6.3 6.2 6.1 6 5.9 5.8 5.7 5.6 5.5 2008 2009 2010

Return on investment

Interpretation: ROI decreases year to year which indicates the capital employed is returned in the form of net profit. In the same manner return from capital employed for the succeeding years are good.

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2) Activity Analysis Ratio Activity ratios are measures of how well assets are used. Activity ratios -- which are, for the most important part, turnover ratios -- can be used to evaluate the benefits produced by specific assets, such as inventory or accounts receivable. Or they can be use to evaluate the benefits produced by all acompany's assets collectively. These measures help us gauge how effectively the company is at putting its investment to work. A company will invest in assets e.g., inventory or plant and equipment and then use these assets to generate revenues. The greater the turnover, the more effectively the company is at producing a benefit from its investment in assets.

The most common turnover ratios are the following:

(i)

Debtors Turnover ratio: Debtors turnover ratio measures the efficiency with which the debtors are converted into cash. This ratio indicates both the quality of debtors and the collection efforts of the business enterprise. The higher the value of debtors turnover the more efficient is the management of debtors or more liquid the debtors are. Similarly, low debtors turnover ratio implies inefficient management of debtors or less liquid debtors.

This ratio is calculated as follows: Debtors Turnover ratio = Net credit annual sales / Average debtors = 7181.48 / 1094.19 = 6.56 (Average debtors = Opening Debtors + Closing Debtors / 2) = 2188.38 / 2 = 1094.19 Year 2008-09 2009-10 2010-11 Net Credit Annual Sale 7181.48 7517.55 8602.89 (cr.)

Average Debtors Debtor Turnover Ratio(In Times) 1094.19 1302.39 1778.75 6.56 5.77 4.84

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7 6 5 4 3 2 1 0 2008

Debtor turnover ratio

Debtor turnover ratio

2009

2010

Interpretation: There has been decrease in the in the turnover ratio year to year. Which indicate
the efficient management of the debtors has not taken place.

(ii)

Debt Collection Period: Debt Collection Period ratio, is the year's sales which were
outstanding at the balance sheet date, expressed in days. A rough measure of the days of credit that a firm's offers to its suppliers/clients. The formula is as follows: Debt Collection Period =Ave.Debtor / Turnover *365

(cr.) Year 2008-09 2009-10 2010-11 Ave.Debtor 1094.19 1302.39 1778.75 Turnover 7181.48 7517.55 8602.89 Debt Collection Period 55 days 63 days 75 days

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Debt collection period

80 70 60 50 40 30 20 10 0 2008 2009 2010 Debt collection period

Interpretation: Debtors collection period measures the quality of debtors since it measures the rapidity
or slowness with which money is collected from them. Here, there has been increasing trend in the debt collection period which is unfavorable for the company. Because, the quicker the collection period the better is the quality of debtors as a short collection period implies quick payment by debtors and vice versa.

ii) Creditors Turnover Ratio: It is on the pattern of debtors turnover ratio. It indicates the speed with which the payments are made to the trade creditors. Creditors Turnover Ratio (also known as Accounts Payable Turnover Ratio) is calculated by taking the total purchases made and dividing it by the average accounts payable during the period. It is used to measure the rate at which a firm pays off its suppliers. It establishes relationship between net credit annual purchases and average accounts payables.

Creditors turnover ratio = Net credit purchases / Average creditors = 596 / 35.29 = 16.8 (Average creditors = Creditors in the beginning + Creditors at the end / 2)

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Year 2008-09 2009-10 2010-11

Net Credit Purchase 225.75 596.28 577.38

Average Creditors 27.3 35.29 38.27

(cr.) Creditor Turnover Ratio 8.27 16.8 15.08

Creditor turnover ratio

18 16 14 12 10 8 6 4 2 0 2008 2009 2010 Creditor turnover ratio

Interpretation: There is an increase ratio in credit turnover ratio which is good sign for the organization.

iii) Working Capital Turnover Ratio: Working capital refers to investment in current assets. Higher the ratio better it is. So, the working capital can be defined either as a gross working capital, which include funds invested in all current assets, or as net working capital, which denotes the difference between the current assets current liabilities of an organization. This ratio represents the number of times the working capital is turned over in the course of year and is calculated as follows:

Working Capital Turnover Ratio = Net Sales / Net Working Capital = 7517.55 / 210.27 = 35.75

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(Working capital = Current Assets Current Liabilities) = 3200.82 2990.55 = 210.27

( cr. ) Year 2008-09 2009-10 2010-11 Net Sales 7181.48 7517.55 8602.89 Net Working Capital 247.59 210.27 490.48 Working Capital Turnover Ratio 29 35.75 17.53

Working capital turnover ratio

40 35 30 25 20 15 10 5 0 2008 2009 2010 Working capital turnover ratio

Interpretation:
The Working Capital ratio shows a increasing trend on 2009 - 2010 and then slope downwards due to holding high current assets in the form of cash, bank balances and receivables in the year 2009-10 .

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iv) Turnover Ratio: Inventory turnover ratio measures the velocity of conversion of stock into sales. Usually a high inventory turnover/stock velocity indicates efficient management of inventory because more frequently the stocks are sold; the lesser amount of money is required to finance the inventory.A low inventory turnover implies over-investment in inventories, dull business, poor quality of goods, stock accumulation, accumulation of obsolete and slow moving goods and low profits as compared to total investment.

Stock Turnover Ratio = Cost of goods sold / Average stock = 5160.64 / 412.39 = 12.51 (Cost of goods sold = Sales Gross Profit = 8602.89 - 2172 = 6430.89 (Average Stock = Opening stock + Closing stock / 2)

( cr.) Year 2008-09 2009-10 2010-11 Cost of Goods Sold 5160.64 5514.67 6530.48 Average Stock 412.39 408.59 588.19 Stock Turnover Ratio 12.51 13.50 11.10

Turnover ratio
16 14 12 10 8 6 4 2 0 2008 2009 2010 Turnover ratio

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Interpretation: A higher Stock turnover Ratio is always beneficial for the concern. There is fluctuation in the Turnover ratio but having a high I.T.R reveals a good inventory policy of the company. 2) Leverage / Capital Structure / Long term solvency Ratio

This ratio conveys a firms ability to meet the interest cost repayment sch edules of its longterm obligations and show the proportions of debt in financing of the firm.

i)

Debt to Assets Ratio: This also shows the companys reliance on external sources for financing its assets. In general, with either of the above ratios, the lower the ratio, the more conservative (and probably safer) the company is. However, if a company is not using debt, it may be foregoing investment and growth opportunities.

Debt to Total Funds Ratio = Total Debt/Total Assets Total Debt(Liabilities, current liab. & Capital) = Total Debt = 65.7 (cr.)

Total Asset = 3192.45 Year 2008-09 2009-10 2010-11 Total Debt 65.7 65.03 49.36 Total Asset 3192.45 5838.02 6676.65 Debt to Total Assets Ratio .02:1 .011:1 .007:1

Debt assets ratio

0.025 0.02 0.015 Debt assets ratio 0.01 0.005 0 2008 2009 2010

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Interpretation: - the debt to assets ratio is decreasing year to year as interpreted from the
above comparative ratio of the concern and indicates a satisfactory position of the debt on assets.

ii) Fixed Assets Ratio: This ratio indicates as to what extent fixed assets are financed out of long-term funds. It is well established that fixed assets should be financed only out of long-term funds. This ratio workout the proportion of investment of funds from the point of view of long-term financial soundness. Fixed Assets Ratio = Long-term Funds/Net Fixed Assets Where Long-term Funds = Share Capital (Equity + Preference) + Reserves and Surplus + Long- term Loans Fictitious Assets = 7181.48 / 5907.10 = 1:21 Year 2008-09 2009-10 2010-11 Long Term Fund 7181.48 7517.55 8602.89 Net Fixed Asset 5907.10 4533.89 3316.39 Fixed Asset Ratio 1.21 1:65 2.59 (cr.)

Fixed assets ratio

3 2.5 2 1.5 1 0.5 0 2008 2009 2010 Fixed assets ratio

Interpretation: The fixed assets are increasing year to year. The higher ratio indicates that the
concern is consistently utilizing its assets.

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SUGGESTION AND RECOMMANDATIONS

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SUGGESTION AND RECOMMENDATION

1. The liquidity position of the company should be improved for achieving efficiency. 2. Company should always try to maintain an adequate quantum of net current assets in relation of current liabilities as to keep a good amount of liquidity throughout the year. 3. Efforts should be taken to increase the debtor turnover ratio. Concern need to make better policy in terms for tighten its debtor.

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CONCLUSION

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CONCLUSION

The study is made on the topic financial performance using ratio analysis with three years data in Ambuja cement. The current and liquid ratio indicates the short term financial position of Ambuja whereas debt equity shows the long term financial position. Similarly, activity ratios and profitability ratios are helpful in evaluating the efficiency of performance in Ambuja cement. The financial performance of the company for the three years is analyzed and it is proved that the company is financially sound.

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LIMITATION

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LIMITATIONS

1) As the study is based on secondary data, the inherent limitation of the secondary data would have affected the study. 2) This study need to be interpreted carefully. They can provide clues to the companys performance or financial situation. But on their own, they cannot show whether performance is good or bad. It requires some quantitative information for an informed analysis to be made. 3 Certain Ratios to be found out.

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Bibliography

The above report has been prepared from the following sources of data and information.

Books
1) Chandra, Prasanna., Investment Analysis and Portfolio Management, Tata McGraw-Hill Publishing Company Limited, New Delhi, 2002.

Internet Web Sites

1) www.scribd.com 2) http://www.tutorhelpdesk.com 3) http://www.investopedia.com

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