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CHAPTER-1
INTRODUCTION
CHAPTER-2
INDUSTRY PROFILE
COMPANY PROFILE
CHAPTER-3
THEORETICAL FRAME Work
CHAPTER-4
DATA ANALYSIS & INTERPRETATION
CHAPTER-5
SUMMARY
SUGGESTION
`
FINDINGS
CONCLUSION
BIBLIOGRAPHY
ANNEXURES
CHAPTER - 1
INTRODUCTION
Finance is one of the basic foundations of all kinds of economic activities. Financial
management is one integral part of overall management, it is not a totally independent area. It
is concerned with the acquisition, financing and management of assets with some overall goal
in mind. Financial management is important because it has an impact on all the activities of
financial management. The basic objective of financial management is to maintain the liquid
assets and maximization of the profitability of the firm, efficient management if every business
enterprise is closely linked with efficient management of the finance. Maintenance of liquid
assets means that the firm has adequate cash in hand to meet its obligations at all times. A
business firm is a profit seeking organization. Profit maximization is also well consideration to
be an important objective of financial management.
Financial management is mainly concerned with the proper management of finance function
risk. Cost and control considerations are properly balanced in a given situation and there is
optimum utilization of funds. Financial management emerged as a distinct field of study at the
turn of 20th century. Finance management as an integral part of overall management and is not a
totally independent area. It draws heavily on related disciplines and field of study such as
economics, accounting, marketing, production and quantitative methods. It helps in profit
planning, capital spending, measuring costs,
Controlling inventories, accounts receivable etc. it is essentially helps in optimizing the financial
from a given input of funds.
NEED OF STUDY
OBJECTIVES OF STUDY
The present study working capital management of M/S. chodavaram cooperative sugars ltd, govada is intended to analyze the practice in working
capital management in chodavaram co-operative sugars ltd, govada. The
METHODOLOGY OF STUDY
The methodology of collection of data is important part of the study the sources
of data are of two parts
1. Primary sources
2. Secondary sources
CHAPTER - II
INDUSTRY PROFILE
India is one of the sugar producing and consuming countries in the world
the sugar industry plays vital role in rural development areas and provides
direct and indirect employment in the country India emerged as the largest
producer of white sugar in the world
The central government has already de-licensed the sugar production, the
propose to decontrol the release mechanism by introducing forward and future
trading in sugar. The decontrol is possibility of reduce in sugar price
The sugar industry has a unique place in Indian economy and rural
development because of employment and provisions of raw materials to other
industrial this industry has been providing substances to 5.5 lakhs workers and
sustaining about 4.50 corers agriculturists its total capital investment amounts
to 1560 corers
The sugar industry has a unique place in Indian economy and rural
development because of its multiple contributions in terms of employment and
provisions of raw materials to other industries the sugar industry as the second
largest agro based processing industry thus occupies a viral role among the
consumer industries in the country and ranks next only to cotton textile
industry in terms of contribution to the next value added by manufactures it
takes the third place among the four major sugar producing counties in the
world the three being U.S.S.R (C.I.S) RRAZIL and CUBA/ the sugar industry
in the recent years had started to export sugar these by earning valuable
foreign exchange.
Further its offers tremendous potential to make the company selfsufficient in its requirement of paper and new prints there are now 435 sugar
factories in the country 69 in the public sector and 122 in the private sector and
244 in cooperative sector
CF or the smooth running of the industry government has appointed a
committed called GYAN PRAKASH committee and improvements there are
organization like
ISMA (Indian sugar mill association)
NFCSF (national federation of cooperative sugar factories)
ISGIEIC (Indian sugar general export Import Company)
from sugar other traditional sugar cane sweetness khanda sari and gur also produced for the
rural markets taking all sweetness sugar khanda sari and gur india is worlds largest producer of
sugar followed by the brazil in the second place there are 493 sugar mills operating in India with
in an aggregate installed capacity of 16.2 million tomes of these 152 are in the private sector 21
in the cooperative sector and 70 in the public sector
the sugar industry had been totally regulated and controlled for the past 50 years sugar
declared on essential commodity under the essential commodity act 1955 and plethora of
legislations and control orders regulate almost every aspects of the industry with the objective of
increasing production and also making available sugar at affordable process to the consumer
controls included licensing administrated price for sugar cane reservation of cane areas control
over the process of sugar and restriction of sale movement of the bye product molasses were
controlled for long time
Under the sugar cane control order statutory minimum price for cane very of commission
on agricultural cost industry the crushing seasons ranges between depending on the location
PRE - 1995 ERA
Until 1995 the industry was totally regulated and totally regulated and to certain extent
protected sugar was scheduled industry and for setting up new units for expanding existing unit
license was required under act
a review of industry's growth since 1950 reveals hat not withstanding and controls and
regulations the industry did grow substantially while the number of factories rose from 139 in
1950 to 423 in 2002 -03 the installed capacity increased tenfold from 1.67 million tons to 16.5
million tones sugarcane production from 69.2 million tones to300 million tons in 2001 - 02 sugar
production swelled from 1.1 tons to 18.6 million tons during the same period
Imports of sugar were not generally permitted and when imports were necessary the
government was the sold importer and availability of foreign exchange was a constraint exports
were canalize and were affected in years of surplus stocks
POST - 1995 SCENARIO
Even while repining partial control and dual pricing the government has been initiating in
since 1995 a number of measures as part of the process of liberalization to UN least the potential
of the industry of significant initiatives are
The molasses control under which the process movement and distribution of molasses
were all controlled was rescinded enabling the industry to realize the full value of molasses and
setup molasses based from down steam industries
Sugar was de licensed and creation of new capacity as well as expansion of existing
capacity was freed from licensing the only constraint was availability of sugar cane
The export promotion act was replaced and exports of sugar were decimalized enabling
mills to undertake exports on their own and completer directly in international market
The government has progressively reduced the levy obligation imposed a producers from
as high as 65% in early 80's to 10% of effective march 2003
Plan period
2.03
2.54
3.56
4.70
5.7
7.64
10.20
year
Area under
sugarcane
(thousand
hectors)
Production of
sugar cane
(000 Tones)
2003-04
1641
58710
Production
(000 tones)
1077
Factories
(numbers)
135
2004-05
1707
69220
1101
138
2005-06
2560
110544
3028
173
2006-07
2615
126368
3740
216
2007-08
2667
154228
5147
314
2008-09
3686
241046
12046
385
2009-10
3844
256995
13404
392
2010-11
3618
228000
10609
393
2011-12
NA
227000
9800
NA
2013-13
NA
245600
12200
417
2013-14
NA
256500
12500
436
TABLE SOURCE
Indian institute of public opinion monthly commentary of Indian economic condition due
2004 so and the economic survey 2004-05
IMPORTS & EXPORTS OF SUGAR
in view of cost of cane and sugar production in India it could not complete with other
favorable countries and to honor commitments and maintain international standard quality the
sugar exports begin in the year 1958 under the sugar export promotions act up to middle of 1961
government did not subsidize losses on exports and sugar factories got prorate payment however
the view of substantial quality of sugar in later year's government stopped subsidizing these
losses the export policy has been largely influenced by the need of earning foreign exchange
During shortages of fall in the production of sugar government registered
Companies like:
1) STC (state trading corporation)
2) M.M.T.C. (minerals and metals trading corporation are the saying agencies for our country)
OBSOLESCENCE
Most of the factories in the private sector were setup tie to 6 decades ago
their machinery had by now dilapidated the cost of production of such units is
unduly high owing to less mechanical efficiency and more down time it will
require money for modernization of such factories
TECHNONOGY
The level of technology in the India sugar industry is quite high and a
number of developing counties have borrowed Indian sugar technologies
unfortunately however may of Indian factories had been up in early 30s and have
become absolute for these the need of the hour is modernization rehabilitation
and expanding also attention needs to be paid to cane development
1000MTVR
1000MTVR
1000MTVR
Brazil
19871
17036
20390
India
19840
20109
7420
China
9240
6739
7240
U.S.A
7015
7651
7910
Thailand
6487
5304
5833
Mexico
5140
5226
4985
Australia
4860
4382
5630
Germany
4050
4764
4783
France
4007
4601
4915
Cuba
3728
3628
4120
Other
50836
50539
50469
total
135066
123999
136238
2009-10
2010-11
2011-12
2012-13
2013-14
A.P
859
772
782
1113
1182
Gujarat
1130
967
890
1025
1142
Karnataka
1263
871
959
1372
1577
Maharashtra
5394
3445
3847
5337
6503
UP(east)
1777
1632
1600
1552
1843
UP (west)
1043
1058
881
783
1210
UP (central)
1559
1393
1441
1394
1503
Tamilnadu
1671
1083
1266
1774
1768
Others
1755
1684
1189
1184
1473
In india
16451
12905
12855
15539
18200
No of units
Average
capacity(TDC)
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
320
321
326
339
342
354
357
365
377
385
392
393
394
408
416
412
400
427
423
436
434
453
1712
1779
1779
1834
1865
1862
1888
1925
2036
2088
2167
2325
2388
2483
2531
2656
2863
2855
3049
3203
3285
3343
Western
Europe
Eastern
Europe
Africa
N & C America
South America
Asia
Oceania
total
2009-10
21266
2010-11
18596
2011-12
21242
2012-13
22301
2013-14
23460
7344
7077
7081
7172
7197
9931
19577
31825
53293
5675
148845
9508
20932
29764
47197
5467
138541
70083
21411
25042
42739
5024
132012
9381
21955
25155
42581
5481
134026
10457
22499
25307
42750
5838
137508
World
population
111681
116126
125871
124104
128929
134641
124026
132012
138541
World
Ending stock Stock % of
consumption
consumption
112637
38035
33.77
115167
38589
33.51
117953
46221
30.19
121063
47018
38.84
123300
50748
41.16
125561
57289
45.63
128309
61638
48.04
121426
61853
47.06
135924
62385
45.90
Season
Change
2008-09
2009-10
Percentage
143.784
Million
tons
(+)2.292
Production
146.076
Consumption
147.982
144.859
(+)3.033
2.09
Surplus/deficit
(-)1.816
(-) 1.076
(-)0.741
68.90
Import
demand
Export
availability
Stock /
consumption
ratio
42.882
40.758
(+)2.124
5.20
43.643
41.607
(+)2.036
4.90
41%
44%
1.60
MUDDY JUCE
VAC. FILTERS
SYRUP
FLTRATATE JUCE TAKEN BACK
FILTER CAKE SOLD AS MANEURE
SYRUP SULPHITOR
(TREATED WITH SO 2 GAS)
COMPANY PROFILE
HISTORICAL BACK GROUND & AREA OF OPERATION
The chodavaram cooperative sugars ltd was in corporate in the year 1955
With an object of establishing a sugar factory of 1000 TDC at govada village in
Corporative sector at the cost of 150 lakhs the factory started its commercial
Production in the year 1962-63 initial loss were sustained completely were
Wiped out by 1972 -73 and the factory made profit till 1976 in the year 1976
Expansion of the crushing capacity of the plant was taken up at a total cost of Rs.
130.57 lakhs the crane crushing with the expanded capacity of 16000 T.C.D
Started from the year 1978 keeping in view the availability of cane the factory of
Taken up expansion of its crushing capacity to 1500 TDC in the year 1988 with an
Out lay of rs 8.5 cores and expansion was completed by March - 1991
The society covers vast area of 2658 villages in 14 manual of
Visakhapatnam district out of whom 80% are small and marginal formers the
Total average in the area of operation of factory is 30,000 acres out of which cane
Grown in about 20,000 acres is agreement to the factory as the members are
Limited to that extent 60% of the factory zone is under fain fed conditions
Basically the factory is and agro based seasonal industry the raw material of the factory
for the production is sugar cane there are growers from 265 villages which are supplying cane to
the factory it starts its operation most probably during the first week of December and ends with
April/May depending upon the availability of sugar cane for crushing
Best technical efficiency awarded to for the session of 2005-06 presents by the national
federation of cooperative sugar factory ltd. New Delhi
a.
In chodavaram cooperative sugars the following products
manufacturing
b.
sever
c.
sprit
d.
bio earths
e.
bio gas
f.
co generation of power
In season production process of sugar will be alone and unseasonal the production
process of sugar will not be done the company main product is sugar and the substitute product
is molasses from which spirit and extra neutral alcohol are obtained
According to the byelaws the society is meant for the upliftment of the cane
grower's members in factory zone the ideology behind setting up cooperative sugar
factory is to rais the living standard of farmers and production from idle men
private sugar factory owners and promoting their well being
ideally at cooperative society should be organized on the principal of
voluntary service and it should provide maximum participation to its membership
in decision making in benefit and evolution of performance a popular definition of
the term cooperative is that is associations of persons are house hold usually of a
limited means who have agreed to work together on a continuous basis which is
jointly control and whose cost risk and benefits are equally among the members
equality social justice and self-helped of the major concerns of the co operative
2. A) to raise share capital and borrow funds either on the security of the property
MANAGING DIRECTOR
The managing director is the chief executive of the sugar factory he looks
after each thing that is going on the factory he is the key of the organization his
responsibilities are tremendous millions of vc may be made or lost by this decisions
the m.d. formulates the factory policy in cane procurement manufacturing factory
operation purchases and sales for the consideration of board of direction and when
approved ensures their executive through directors of departmental needs he
values and comments of schemes and suggestions coming from department head
for guidance to board of directors he shall be fully informed about the factory
overall activities and must instructed and guide departmental needs in their work
he is accountable to chairman and board of directors
DEPARTMENTS
The organization has 5 departments
1) Engineering department
2) Manufacturing department
3) Cane department
4) Administrative department
5) Accounts department
ENGINEERING DEPARTMENT
this department is headed by the chief engineer the plant and machinery of
the factory or under the control of chief engineering he formulates the techniques
of current and economic crushing of sugar cane shunting to machinery and
equipment correlated with the variety of cane quality he is responsibility for
keeping day to day check on milling boiler and power house performance steel ad
power consumption and various sections of the factory personally direct repairs
over handling and erections of major equipments he periodically reviews
engineering store stock position and furnishes indents for purchase for his
departments civil section boilers millhouse electrical and main parts of the
engineering section such as rehabilitation modernization layout and replacement
labor and staff policy to management and ensure that all factory regulations
MANUFACTURING DEPARTMENT
this department is held by chief chemist he is responsible for overall
operations of sugar manufacturing side of factory from juice to final bagging of
sugar the department is to see the food quality of sugar production he has to
coordinate the work of manufacturing department with that of the engineering
and cane department the department is consists
1. Chief chemist
2. Dy. Chief chemist
3. Manufacturing chemists
4. Lab in charge
SL NO
permanent
seasonal
total
Deputy cadre
02
--
02
Supervisory a
03
--
03
Supervisory b
07
--
07
Supervisory - c
08
--
Highly skilled
04
--
04
Skilled a
33
03
36
Skilled b
07
05
12
Semi-skilled
22
17
40
Un skilled
14
17
31
10
Clerical grade ii
03
--
03
11
13
--
13
12
Clerical grade - iv
39
--
39
total
155
42
197
CANE DEPARTMENT
The chief agricultural officer holds this the duties of the chief agricultural
officer can be divided into
1.
2.
3.
4.
ACCOUNT DEPARMENT
Chief accounts officer heads the account department he is
responsible for the following departments
1. General accounts
2. Stores accounts
3. Cane accounts
His duty involves preparation of balance sheets and
correspondence with their investors merchants banks
financial institutions etc., he is to maintain up to date all
account books of the factory and balance sheet cost reports
periodical budgets cash flow statements and all income tax
returns and formalities he has to attend all work relating to
money transaction advice management through the
managing director and the financial implications of any of
scheme of expenditure
ADMINISRATION DEPARTMENT
This department consists of
Administrative
officer
Labor welfare
officer
Medical
officer
Office
manager
Store keeper
ORGANIASTIONAL STRUCTURE
PERSON IN CHARGE
MANAGING DIRECTOR
ENGINEERING
DEPARTMENT
MANUFACTURING
DEPARTMENT
CANE
DEPARTMENT
CHIEF
ENGINEERING
CHIEF
CHEMIST
CHIEF
AGRICULTURAL
OFFICER
DEPUTY CHIEF
ENGINEERING
(BOILING )
ASST ENGINEER
(WORK SHOP)
ASST ENGINEER
CIVIL
SUPERVISOR
DEPUTY CHIEF
CHEMIST
Mft
CHEMIST
LAB IN
CHARGE
DEPUTY CHIEF
AGRICULTURAL
OFFICER
AGRICULTURAL
OFFICER
FIELD MAN
ADMINISTRATION
DEPARTMENT
ADMINISTRATION
OFFICER
SALES &
PURCHASE
MANAGER
LABOUR
WELFARE
OFFICER
ACCOUNTS
DEPARTMENT
CHIEF
ACCOUNTS
OFFIER
OFFICE
MANAGER
GENERAL
ACCOUNTAN
T
MATERIAL
ACCOUNTENT
STORE
KEEPER
CANE
ACCOUNTNAT
VISION
to emerge as leading sugar manufacturing unit in the state and sustain
A.V.V.R sugars ltd. position as are of the most valued corporation achieving world
class performance creating growing value for Indians economy and company's
stake holders
MISSION
1. To achieve international standards of excellence in all aspects of sugar
manufacture and diversified business with focus on customer
2. To maximize creation of wealth value and satisfaction for the stake holders
3. To attain leadership in developing adopting and assimilating state of the
art technology for competitive advantage
4. To cultivate high standards of business ethics and total quality
management for a strong corporate identity and brand equity
OBJECTIVES
Agricultural production and the benefits large scale industries and for the
said purpose it shall be competent to the society
1. to purchase from members or non-members sugarcane and or other raw
materials and also to undertake cultivation of sugarcane
2. To construct or take on rent go downs at the place of manufacture as well
as outside for storage and sale of the products
3. To do all other things incidental to or necessary for the establishment and
running of the factory
4. To process and sell sugar molasses and other by-products produced to the
best advantage
5. To undertake measures for the development of sugarcane including supply
of seed fertilizer agricultural implements irrigation facilities and other production
CHAPTER - III
INTRODUCTION
finance plays an important role in any organization the dictionary meaning of
finance is money affairs or the art of managing or administrating the public money
hence the name financial management could be referred to as money management
the function of finance is not arranging funds for the business organization but also
it includes planning forecasting of cash flow both receipts and payments raising the
funds allocations of funds and financial control
FINANCIAL FUNCITIONS
the functions of any business organization include finance marketing
personal and production these four functions are interlinked and cumulatively they
lay greater stress on management for this successful endeavor among the four
"financial function" has a dominant role through the ages it has been said that
finance is the life blood of business it is the most primary function that starts laying
its influences from the very beginning of the entrepreneurial ideal its presence is
felt in very bit of organizational functioning
FINANCIAL MANAGEMENT
financial management involves the management of finance function it is
concerned with the planning organizing directing and controlling the financial
activities of an enterprise it deals mainly with raising funds in the most economic
and suitable manner using these funds as profitably as possible planning future
operations and controlling current performance and further developments through
financial accounting cost accounting budgeting statistics and other means it is
continuously with achieving an adequate rate of return on investment as this is
necessary for survival and the attracting of new capital
Definitions
According to john n.myer "the financial statements provide a summary of the
accounts of a business enterprises the balance sheet reflecting the assets liabilities
and capital as on a certain date and the income statement showing the results of
operations during a certain period".
The term financial statement generally refers to following basic statements
1.
2.
3.
4.
FINANCIAL STATEMENT
INCOME
STATEMENT
BALANCE
SHEET
STATEMENT OF
RETAINED
EARNING
STATEMENT OF
CHANGES IN
FINANCIAL POSITION
Income statement
the income statement (also termed as profit and loss account) is
generally considered to be the most useful of all financial statements .it
explains what has happened to a balance sheet dates the nature of the
income which is the focus of the income statement can be well
understood if a business is taken as an organization that uses inputs to
produce output
Balance sheet
it is a statement of financial position of a business at a specified
moment of time it represents all assets owned by the business at a
particular moment of time and the claims of the owners and outsiders
against those assets at that time the important distinction between as
income statement is for a period while balance sheet is on a particular
date
1. Recorded facts : the term recorded facts refers to the data taken
out from the accounting records the records are maintained on the
basis of actual cost data the figures of various accounts such as
cash in hand cash at bank bills receivables Sunday debtors fixed
assets are taken as per the figure recorded in the accounting books
as the recorded facts are not based on replacement costs the
financial statements do not show current financial conditions of the
concern
1. Management:
The financial statements are useful for assessing the
efficiency of different cost centers the management is able to
decide the course of action to be adopted in future
2. Creditors:
The trade creditors are to be paid in a short period the creditors will be
interested in current solvency of the concerns the calculations of current
ratio and liquid ratio will enable the creditors to assess the current financial
position of the concerns in relation to their debts
3. Investors:
The investors include both short term and long term investors they are
interested in the security of the principal amounts of loan and regular
payments by the concern the investors will not only analyze the parent
financial position but will also study the future prospectus and expansion
plans of the concern
4. Government
The financial statements are used assess tax liability of business
enterprises the government studies economic situation of the country from
these statements these statements enable the government to find out
whether business is following various rules and regulations or not
2. Historical cost:
The statements are prepared on the basis of historical cost the values
of fixed assets are at their original cost less depreciation the balance sheet
value are not shown the value of assets may be sold more over they do not
reflect the market value which is as important factor in determining the
solvency of an enterprise
3. Personal judgment:
In preparing financial statements certain items are left to the personal
judgment of the accountant if any accountant is not following accounting
principles correctly his judgment will give wrong picture
4. Convention of conservation:
Due to convention of conservation the income statement may not
disclose true income of the business this is due to ignorance of probable
incomes and accounting probable losses
FINACIAL ANALYSIS:
Financial analysis is the process of identifying the financial strength
and weakness of the firm by properly establishing between the items of the
balance sheet and profit and loss account there are various methods or
techniques used in analysis financial statements such as comparative
statements trend analysis common size statements schedule of changes in
working capital funds flow and cash flow analysis cost volume profit analysis
and ratio analysis
TYPES OF
FINANCIAL
ON THE BASIC
OF MATERIAL
INTERNAL
EXTERNAL
ON THE BASIC
OF MODULES
HORIZONTAL
External analysis
VERTICAL
This analysis is done by those who are outsiders for the business these
persons mainly depend up on the published financial statements their analysis
serves only a limited purpose
Internal analysis
This analysis is done by persons who have access to the books of account and
at other information related to the business such as analysis can be done by
executives and employees of the organization the analysis is done depending up on
the objective to be achieved through this analysis
Horizontal analysis
In case of this type of analysis financial statements for a number of years are
reviewed and analysis the current years figures are compared with the standard or
base year the analysis statement usually contains figures for two or more year and
percentage since this type of analysis based on the data from year to year rather
than on date it is also termed as dynamic analysis
Vertical analysis
In case of this type of analysis a study is made of the quantitative relationship
of various items in the financial statement on a particular date since this analysis
depends on the data for one period this is not very conductive to a proper analysis
of
Financial
analysis
Comparative
financial
Common
size
trend
Ratio
C.V.P.
Ratio
Cash flow
Funds
flow
two years the third and fourth column use to show increase or decrease in figures
in absolute adopted in preparing comparative balance sheet
1. In first step find out the changes in absolute figures i.e. increase or
decrease should be calculated
2. In second step percentage of change should be calculated with the help of
following formula
Change in amount
Percentage of change =
x 100
base year amount
v. The opinion should be formed the profitability of the business concern and
it should be given at the end
establish standard norms for various assets the trends of year to year may not be
studied and even they may not give proper results
3. TREND ANALYSIS
Trend analysis is an important and useful technique of financial analysis it
involves computation of index numbers of the moments of the various financial
items in the financial statements for a number of periods it enables to know the
changes in the financial position and the operational efficiency between the
periods chosen
Through trend analysis the analysis can give his opinion as to whether
favorable or unfavorable tendencies are reflected by the accounting date
the comparative and common size balance sheets suffer from a major
limitation i.e. absence of basic standard to indicate whether the proportion of an
item is normal or analysis values are calculated for each item in isolation but
conclusions are to be drawn by studying he related items also
Trend analysis can be analysis in the following ways
I. by calculating trend ratio (or) percentage
ii. By plotting on graph paper (or) charge
6. RATIO ANALYSIS
Financial analysis depends to very large extents of the use of ratios through
there are other equality important tools of such analysis thus a direct examination
of the magnitude of two released items is somewhat enlightening but the
comparison is greatly facilitated by expressing the relationship as a ratio
ratio analysis of business enterprises enters on efforts to derive quantitative
measures or guides concerning the expected capacity of the firm to meet its future
financial obligation or expectations present and past data are used for the purpose
and whatever extrapolations appear necessary they are made to provide no
indication of feature performance alexander wait who criticized the bankers for its
lap sided development owing to their decisions regarding the grant of credit on
current ratios a lone made the presentation of an elaborate system of ratio analysis
in 1919
Ratio:
Ratio is an expression of the quantitative relationship that exists between the
two numbers the ratio is defined as "the indicated quotient of two mathematical
expressions" the ratio should be determined between related accounting variables
to be meaningful and effect.
CHAPTER - IV
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expanses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
TOTAL CUDRRINT
LIABILITIES (4)
LONG TERM
LIABILITES
DIPOSITS
TOTAL LONG TERM
LIABILITIES (5)
CAPITAL
SHARE CAPITAL
RESERVE FUND
AND OTHER FUNDS
SPECIFIC RESERVES
UNDISBURSED
PROFITS
TOTAL CAPITAL (6)
TOTAL LIABILITES
(4+5+6)
INTERPRETATION
From the above table no 4.2 it is under stood that the current
assets are 2011-2012 in the year (2012) 702592884 in the year (2013)
629890773 when compared to 2012 the current assets are decreased by
10.34% during the year 2013 in this year the prepaid expenses are
increased but other current assets are decreased
The current liabilities are in the year (2012) 60659581 in the year
(2013) 442904345 when compared 2006 the current liabilities have
decreased by 26.98%.
2011
2012
INC/DEC
INTERPRETATION:
From the above table no 4.11 it is understood that when compared to 2011
the year 2012 sales are increased by 4.18% but gross profit is decreased by 57.71%
because the cost of selling goods are increased by 23.38%
The total expenses are decreased by 41.97% at the same time the total
incomes are decreased by 94.70% the firm got loss by 18.40% during the year 2012
2011
2012
INC/DEC
INTERPRETATION:
From the above table no 4.11 it is understood that when compared to 2011
the year 2012 sales are increased by 4.18% but gross profit is decreased by 57.71%
because the cost of selling goods are increased by 23.38%
The total expenses are decreased by 41.97% at the same time the total
incomes are decreased by 94.70% the firm got loss by 18.40% during the year 2012
2011
2012
INC/DEC
INTERPRETATION:
From the above table no 4.11 it is understood that when compared to 2011
the year 2012 sales are increased by 4.18% but gross profit is decreased by 57.71%
because the cost of selling goods are increased by 23.38%
The total expenses are decreased by 41.97% at the same time the total
incomes are decreased by 94.70% the firm got loss by 18.40% during the year 2012
2011
2012
INC/DEC
INTERPRETATION:
From the above table no 4.11 it is understood that when compared to 2011
the year 2012 sales are increased by 4.18% but gross profit is decreased by 57.71%
because the cost of selling goods are increased by 23.38%
The total expenses are decreased by 41.97% at the same time the total
incomes are decreased by 94.70% the firm got loss by 18.40% during the year 2012
CHATPER - V
SUMMARY
Financial assessment of an organization is moving so as to decide and compliment
the future course of action to achieve the objectives of the organization
The following methods or techniques are used in studying the financial
assessment of an enterprise
1.
2.
3.
Ratio analysis
RATIO ANALYSIS
Ratio analysis is one of the popular flows of financial statement analysis in
simple words ratio is the quotient formed when one magnitude is divided by
another measured in the some unit a ration is defined as the indicated quotient
of two mathematical expressions and the relationship between two or more
things
SUGGESTIONS
1) Funds flow analysis an important aspect in financial management of every
organization funds flow analysis is required on fund based activities of the
organization
2)the chodavaram co-operative sugars limited also requires working capital for
charring on its activities like any organization the accounts offices of the
organization maintain this
3) The firm pledge its goods to the Visakhapatnam district co-operative central
bank and gets cash credit limit for getting its working capital funded
4) The management has to see the dispose the stock which is present in books for
quite a long time since three years
5) The company should clearly define and established suitable credit policies in
respect of both sales and members
6) It is suggested the company adopts the suitable system of vast budgeting
receivables management and inventory management
7) The company is advised have the concept of working capital management
8) It is suggested the company should established responsible basis for estimating
the further working capital requirements
9) The company identified its inventory as a show moving items fast moving items
or long moving items to their after management may consider steps that are
necessary for the disposal of nonmoving items at the earliest
FINDINGS
The firm was the working capital for lending to the farmers sanctioning fertilizers
loans and other loans for carrying on the production of sugarcane it also invest in
some other current assets in invest in stock as it should get order from the
government selling in sugar
1) It needs working capital for paying its current liabilities like interest overdue
sugarcane payments etc...
2) the firm working capital management policy is very optimum as it need not keep
any cash in advance for making payments or need not keep any surplus cash
available ideally as it can draw or deposit cash whenever required from the bank
3) N it pays interest for the amount utilization in a particular period of time the
cash credit policy is the appropriate one for financing working capital requirements
and is more flexible for the barrower
4) stock in trade is very high so it is better to depose the stock immediately stock
accumulation result were housing cost risk of damage /obsolescence of stock etc.,
besides blocking up to working capital
5) cash in hand and bank is very high which does not carry any interest resulting in
opportunity cost of interest lost for having not been invested somewhere else it is
suggested that the money at the disposal of the company should be sufficient to
meet the requirements exactly at the right time only it should not be
unproductively maintained on hand or bank for too long a period in advance of the
date of requirement.
CONCLUSION
Thought it is observed that during the year ending 2014 there seems to
be an improvement the improvement is only marginal she has to
follows more promotional activities to creates market for itself and
become more competitive
The recommendations and suggestions five if adopted will improve the
position of the company sustained and optimal profitability coupled
with better service and satisfaction for investor may be achieved
BIBLIOGHRAPHY
1) Financial management
R.P.Rustagi
2) Financial management
Ravi M. Kishore
3) Financial management
L.M. Pandey
4) Project (preparation,
appraisal, implementation)
Prasanna chandra
M.Shaghil &
M.Musterque
6) www.coutal@eusgariandia.com
ANNEXURES
LIABILITIES
Particulars
1. Share capital
2. Borrowings
3. Deposits
4. Adjusting heads due by
5. Reserve fund and other
funds
6. Specific reserves
7. Undisbursed profits
8. Undistributed profits
9. Establishment and
contingents charges due
10.Interest payable
11.Other liabilities
Total liabilities
Difference between
Assets & Liabilities
Total assets
such
1
2
3
4
5
6
7
8
9
10
11
At the beginning
of the year 1-42012
ASSETS
Particulars
CASH:
c) on hand
d) at banks
INVESTMENTS:e) shares in co-op institutions
f) deposits
g) securities
h) deposits with government
loans and advances
adjusting heads due to
PROPERTIES:f) land
g) plant & machinery
h) plant & machinery (expansion)
i) buildings storage godowns and
tanks
j) others
stock in trade
pre-paid expenses
Total
loss
Interest
sc amoun s.n
profit
sc Amoun
h
t
o
h
t
10
1 Gross profit(as
per trading
account)
Interest
2
Establishmen 9c
t and
contingent
charges
debitable of
profit and
loss account
depreciation
Establishmen 9c
t and
contingent
charges
creditable to
profit and
loss account
Total
Total
loss
Opening stock
sch amoun s.
t
no
6
1
profit
sch
Closing stock
PURCHASES
a. Cost of cane
b. Incentive cane
price from
purchase tax
c. Incentive cane
price(bonus)
d. Additional cane
price
e. Cane transport
subsidy
f. General stores
Establishment and
contingent charges
debitable to
manufacturing
account
9a
depreciation
Total
Consumption
of store
material
Establishment
and contingent
charges
creditable of
mfg account
Cost of
production
Transferred to
trading
A\C :Sugar
1218678871.11
Molasses
21370372
Power
55128640.00
Filter mud
133855.00
Total
Amount
1
2
loss
Opening stock
sch
6
Cost of production
transferred from
manufacturing
account
amount
Sno
1
profit
Closing stock
sch
6
Sales
Establishment
and
contingent
charges
creditable to
Trading
account
9b
Sugar:1218678871.11
Molasses: 21370372
Power : 55128640.00
Filter mud:
133855.00
3
4
Purchases
Gross profit
Establishment and
contingent charges
debitable to
trading account
Total
6
9b
Total
amount
LIABILITIES
Particulars
1. Share capital
2. Borrowings
3. Deposits
4. Adjusting heads due by
5. Reserve fund and other
funds
6. Specific reserves
7. Undisbursed profits
8. Undistributed profits
9. Establishment and
contingents charges due
10.Interest payable
11.Other liabilities
Total liabilities
Total assets
sch
1
2
3
4
5
6
7
8
9
10
11
At the beginning
of the year 1-42012
ASSETS
Particulars
CASH:
c) on hand
d) at banks
INVESTMENTS:e) shares in co-op institutions
f) deposits
g) securities
h) deposits with government
loans and advances
adjusting heads due to
PROPERTIES:f) land
g) plant & machinery
h) plant & machinery (expansion)
i) buildings storage godowns and
tanks
j) others
stock in trade
pre-paid expenses
Total
loss
Interest
sc amoun s.n
profit
sc Amoun
h
t
o
h
t
10
1 Gross profit(as
per trading
account)
Interest
2
Establishmen 9c
t and
contingent
charges
debitable of
profit and
loss account
depreciation
Establishmen 9c
t and
contingent
charges
creditable to
profit and
loss account
Total
Total
loss
Opening stock
sch amoun s.
t
no
6
1
profit
sch
Closing stock
PURCHASES
a. Cost of cane
b. Incentive cane
price from
purchase tax
c. Incentive cane
price(bonus)
d. Additional cane
price
e. Cane transport
subsidy
f. General stores
Establishment and
contingent charges
debitable to
manufacturing
account
9a
depreciation
Total
Consumption
of store
material
Establishment
and contingent
charges
creditable of
mfg account
Cost of
production
Transferred to
trading
A\C :Sugar
1218678871.11
Molasses
21370372
Power
55128640.00
Filter mud
133855.00
Total
Amount
1
2
loss
Opening stock
sch
6
Cost of production
transferred from
manufacturing
account
amount
Sno
1
profit
Closing stock
sch
6
Sales
Establishment
and
contingent
charges
creditable to
Trading
account
9b
Sugar:1218678871.11
Molasses: 21370372
Power : 55128640.00
Filter mud:
133855.00
3
4
Purchases
Gross profit
Establishment and
contingent charges
debitable to
trading account
Total
6
9b
Total
amount
LIABILITIES
Particulars
1. Share capital
2. Borrowings
3. Deposits
4. Adjusting heads due by
5. Reserve fund and other
funds
6. Specific reserves
7. Undisbursed profits
8. Undistributed profits
9. Establishment and
contingents charges due
10.Interest payable
11.Other liabilities
Total liabilities
Total assets
sch
1
2
3
4
5
6
7
8
9
10
11
At the beginning
of the year 1-42012
ASSETS
Particulars
CASH:
1a
c) on hand
d) at banks
INVESTMENTS:e) shares in co-op institutions
f) deposits
g) securities
h) deposits with government
loans and advances
adjusting heads due to
PROPERTIES:f) land
g) plant & machinery
h) plant & machinery (expansion)
i) buildings storage godowns and
tanks
j) others
stock in trade
pre-paid expenses
Total
2184948.03
loss
Interest
sc Amoun s.n
profit
sc Amoun
h
t
o
h
t
10
1 Gross profit(as
per trading
account)
Interest
2
Establishme
nt and
contingent
charges
debitable of
profit and
loss account
9c
depreciation
Establishme 9c
nt and
contingent
charges
creditable to
profit and
loss account
Total
Total
loss
Opening stock
sch amoun s.
t
no
6
1
profit
sch
Closing stock
PURCHASES
a. Cost of cane
b. Incentive cane
price from
purchase tax
c. Incentive cane
price(bonus)
d. Additional cane
price
e. Cane transport
subsidy
f. General stores
Establishment and
contingent charges
debitable to
manufacturing
account
9a
depreciation
Total
Consumption
of store
material
Establishment
and contingent
charges
creditable of
mfg account
Cost of
production
Transferred to
trading
A\C :Sugar
1218678871.11
Molasses
21370372
Power
55128640.00
Filter mud
133855.00
Total
Amount
1
2
loss
Opening stock
sch
6
Cost of production
transferred from
manufacturing
account
amount
Sno
1
profit
Closing stock
sch
6
Sales
Establishment
and
contingent
charges
creditable to
Trading
account
9b
Sugar:1218678871.11
Molasses: 21370372
Power : 55128640.00
Filter mud:
133855.00
3
4
Purchases
Gross profit
Establishment and
contingent charges
debitable to
trading account
Total
6
9b
Total
amount
LIABILITIES
Particulars
1. Share capital
2. Borrowings
3. Deposits
4. Adjusting heads due by
5. Reserve fund and other
funds
6. Specific reserves
7. Undisbursed profits
8. Undistributed profits
9. Establishment and
contingents charges due
10.Interest payable
11.Other liabilities
Total liabilities
Total assets
sch
1
2
3
4
5
6
7
8
9
10
11
At the beginning
of the year 1-42012
ASSETS
Particulars
CASH:
c) on hand
d) at banks
INVESTMENTS:e) shares in co-op institutions
f) deposits
g) securities
h) deposits with government
loans and advances
adjusting heads due to
PROPERTIES:f) land
g) plant & machinery
h) plant & machinery (expansion)
i) buildings storage godowns and
tanks
j) others
stock in trade
pre-paid expenses
Total
loss
Interest
sc Amoun s.n
profit
sc Amoun
h
t
o
h
t
10
1 Gross profit(as
per trading
account)
Interest
2
Establishme
nt and
contingent
charges
debitable of
profit and
loss account
9c
depreciation
Establishme 9c
nt and
contingent
charges
creditable to
profit and
loss account
Total
Total
loss
Opening stock
sch amoun s.
t
no
6
1
profit
sch
Closing stock
PURCHASES
a. Cost of cane
b. Incentive cane
price from
purchase tax
c. Incentive cane
price(bonus)
d. Additional cane
price
e. Cane transport
subsidy
f. General stores
Establishment and
contingent charges
debitable to
manufacturing
account
9a
depreciation
Total
Consumption
of store
material
Establishment
and contingent
charges
creditable of
mfg account
Cost of
production
Transferred to
trading
A\C :Sugar
1218678871.11
Molasses
21370372
Power
55128640.00
Filter mud
133855.00
Total
Amount
1
2
loss
Opening stock
sch
6
Cost of production
transferred from
manufacturing
account
amount
Sno
1
profit
Closing stock
sch
6
Sales
Establishment
and
contingent
charges
creditable to
Trading
account
9b
Sugar:1218678871.11
Molasses: 21370372
Power : 55128640.00
Filter mud:
133855.00
3
4
Purchases
Gross profit
Establishment and
contingent charges
debitable to
trading account
Total
6
9b
Total
amount
LIABILITIES
Particulars
1. Share capital
2. Borrowings
3. Deposits
4. Adjusting heads due by
5. Reserve fund and other
funds
6. Specific reserves
7. Undisbursed profits
8. Undistributed profits
9. Establishment and
contingents charges due
10.Interest payable
11.Other liabilities
Total liabilities
Total assets
sch
1
2
3
4
5
6
7
8
9
10
11
At the beginning
of the year 1-42012
ASSETS
Particulars
CASH:
c) on hand
d) at banks
INVESTMENTS:e) shares in co-op institutions
f) deposits
g) securities
h) deposits with government
loans and advances
adjusting heads due to
PROPERTIES:f) land
g) plant & machinery
h) plant & machinery (expansion)
i) buildings storage godowns and
tanks
j) others
stock in trade
pre-paid expenses
Total
loss
Interest
sc Amoun s.n
profit
sc Amoun
h
t
o
h
t
10
1 Gross profit(as
per trading
account)
Interest
2
Establishme
nt and
contingent
charges
debitable of
profit and
loss account
9c
depreciation
Establishme 9c
nt and
contingent
charges
creditable to
profit and
loss account
Total
Total
loss
Opening stock
sch amoun s.
t
no
6
1
profit
sch
Closing stock
PURCHASES
a. Cost of cane
b. Incentive cane
price from
purchase tax
c. Incentive cane
price(bonus)
d. Additional cane
price
e. Cane transport
subsidy
f. General stores
Establishment and
contingent charges
debitable to
manufacturing
account
9a
depreciation
Total
Consumption
of store
material
Establishment
and contingent
charges
creditable of
mfg account
Cost of
production
Transferred to
trading
A\C :Sugar
1218678871.11
Molasses
21370372
Power
55128640.00
Filter mud
133855.00
Total
Amount
1
2
loss
Opening stock
sch
6
Cost of production
transferred from
manufacturing
account
amount
Sno
1
profit
Closing stock
sch
6
Sales
Establishment
and
contingent
charges
creditable to
Trading
account
9b
Sugar:1218678871.11
Molasses: 21370372
Power : 55128640.00
Filter mud:
133855.00
3
4
Purchases
Gross profit
Establishment and
contingent charges
debitable to
trading account
Total
6
9b
Total
amount