DECLARATION

I, Hitesh Gurav, a bonafide student of MMS (Full Time) Program at Anjuman-I-Islams Allana
Institute of Management Studies, Mumbai, hereby declare that I have undergone the Summer
Training at NP Steels Pvt. Ltd. on and from 3rd May 2014 (Date of Joining the Organization) to
28th June 2014 (Date of Completion).
I also declare that the present project report is based on the above summer training and is my
original work. The content of this project report has not been submitted to any other university or
institute either in part or in full for the award of any degree, diploma or fellowship.
Further, I assign the right to the university, subject to the permission from the organization
concerned, use the information and contents of this project to develop cases, case-lets, and
papers for publication and/or for use in teaching.

Place: Mumbai
Date:

Hitesh Gurav
Roll No.2 Fin

Amjad Kadri
Project Mentor

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Dr. Lukman Patel

Director

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ACKNOWLEDGEMENT
I take immense pleasure in completing this project and submitting the final project report. It has
been full of learning and sense of contribution towards the theory and practical knowledge. I
would like to thank my project guide Prof. Amjad Kadri (core faculty at AIAIMS) & also
thanks to Mr. N. Prajapati, for giving me an opportunity of learning and contributing through
this project.
I also take this opportunity to thank all those people who have made this experience a memorable
one. A successful project can never be prepared by the single effort of the person to whom the
project is assigned, but it also demands the help and guardianship of some scholarly people, who
helped the undersigned actively.
I would like to thank our Director Dr. Lukman Patel and all the faculties of AIAIMS for their
valuable guidance, keen interest, co-operation, inspiration & moral support for completing my
course.

Date:
Place: Mumbai

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Index
NO.

Name

Page No.

1.

Company profile N.P Steel

3-8

2.

Literature Review

9-10

3.

Scope of Accounting

11-12

4.

Financial Statement Analysis

13-14

5.

Objective of Project

15

6.

Purpose of Financial Statement

16-17

7.

P & L / Balncesheet of Tata steel

8.

Ratio analysis of Tata steel

18-30

9.

conclusions

31

Bibliography

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32

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INTRODUCTION

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N.P. STEEL - YOU IMAGINE WE FIX IT

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Manufacturers Of: ALL KINDS OF METAL FURTINURE & FABRICATION

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------N.P. Steels offer an unmatched range of versatile shelving systems, storage shelves, shelving
racks, clothing racks, wall shelves, display racks. N.P. Steels also deal in Single Slot System,
Hypermarket Gondolas, Double Slot System and Pole Systems & Center Concepts. The firm has
gained immense expertise in manufacturing and supplying a variety of products that includes
Gondolas, Wall units, Ends units, Heavy duty Gondolas, Wall channels, Brackets and hanging
accessories.
The entire range of systems is adjustable that makes the maximum utilization of the space
available. These are highly appreciated by our clients for their combination of wooden, glass,
wire and metal shelves that offers an elegant look and aesthetic appeal. In addition, these are
easy to install and requires low maintenance. Managed by a group of highly qualified, young and
dynamic professionals, N.P. Steels are committed to make this company of global fame and
repute.
N.P. Steel has extensive knowledge and experience of stainless steel, Aluminums and metal
molded components etc.
They are designing and building retail environment, catching the clients loyalty and increasing
clients performance and competitiveness. All of their projects develop through strategy, design
architectures, manufacturing and interactive.

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N.P. Steels very much takes care of their clients, fostering relationship based on trust and mutual
respect, because they believe that customer satisfaction is the most important factor to drive
growth. N.P. Steels believe in long term partnerships. N.P. Steels are committed to provide a
quality product and to improve our systems all the time.
N.P. Steel manufactures/use world class quality steel products competitive prices with efficient
delivery schedules. They are well known for our product rage, quality and reliability of services.
The products are procured from various clients across varied business sectors such as malls, flats
and jewellery shops etc.
NP Steel is a complete Manufacturing Company & Export House established in Mumbai since
1991. The company has gained sufficient expertise in providing better designed metal products
through past two decades. Ramesh Prajapati is the founder and owner of the N.P. Steel in
Mumbai.
N.P. Steel is complete manufacturing firm sated with fabrication of stainless steel.
As the time went the company turned into the specialized retail fixtures firm.
Companys easy working with large variety of metals like Stainless Steel, Mild Steel (M.S.)
Aluminum, brass, Copper, Composite Panels, etc. serving the customer in such a wide range of
materials has developed our facility not only in conventional way but in automatic too. N.P.
Steel has extensive knowledge and experience of stainless steel, Aluminums and metal molded
components etc.

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Client Details
The firm with an experience of more than 300 projects all over India which consists of retails
fixtures, railings, signage, customization etc. Below is the list of few clients that N.P. Steels deals
with:
MR SHOPPING MALLS / CHANDANA BROTHERS
M N M SHOPPING MALLS

R.S.BROTHERS
ALUKKAS JEWELLARY

RAYMONDS PVT.LTD.

BEING HUMAN

MANYA SHOPPING MALLS

BOY LONDON LUCKY RETAIL

STORES

MANGALYA SHOPPING MALLS

TWILLS CLOTHING LTD

KILLER / K-LOUNGE

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SPYKER

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Some of the client details of N.P. Steels

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Product details

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LITERATURE REVIEW
Accounting involves the creation of financial records of business transactions, flows of finance,
the process of creating wealth in an organisation, and the financial position of a business at a
particular moment in time.
Financial accounting is concerned at one level with book-keeping i.e. recording daily financial
activities, and at a more advanced level with preparation of the final accounts e.g. the profit and
loss account and balance sheet.
Management accounting is concerned with providing managers with management information
such as information about costs, and forecasts of future costs and revenues. Financial
information can be fed to those who require such information for decision-making and recordkeeping purposes.
For example, managers need information in order to manage the business efficiently and
constantly to improve their decision-making capabilities.
This is especially true when analyzing accounts using ratios. Shareholders need to assess the
performance of managers and need to know how much profit of income they can take from the
business. Suppliers need to know about the company's ability to pay its debts and customers wish
to ensure that their supplies are secure. Any provider of finance of the business (e.g. bank) will
need to know about the company's ability to make repayments. The Inland Revenue needs
information about profitability in order to make an accurate tax assessment. Employees have a
right to know how well a company is performing and how secure their futures are. This helps
towards the employer - employee relations.
The project is about to understand how company manages to integrate the functions of various
departments. It explains specifically how finance department works in the company and what
major role it plays in the functioning of the company. Further it describes how company manages
to reduce its cost of borrowings by availing different products available with banks. It also

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describes in detail how company implements and introduces various checks and controls for
controlling its major operating costs.
This project also helps me understand the accounting procedures adopted by the company. This
will help in gaining knowledge about the surviving strategy that a company may use in todays
cut throat competition and cost cuttings across the board. This project enhances my skill of
analyzing the financial position of the company, by making comparative analysis of the various
expenses incurred and income earned by the company in the two consecutive financial years.
This helps me in understanding the working capital requirements of the company with the help
of ratio analysis. It explains how company manages its working capital cycle, what its aspects
are and what the approaches to the working capital handling are. Also it describes the various
factors that affect the working capital decisions to be taken in the company and the various
sources of financing working capital requirements. Also it includes the ratio analysis of the
company with the help of the comparative analysis of the two consecutive years.
This project further helps me in understanding the inventory management, cash management,
and debtors/ receivable management of the company and how effectively they work on it. In
total, the project was a great learning experience about how a steel industries concern deals with
all its finances and system.

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SCOPE OF ACCOUNTING
Accounting is concerned with presentation of accounting information in the most useful way for
the management. Its scope is, therefore, quite vast and includes within its fold almost all aspects
of business operations.
However, the following areas can rightly be identified as falling within the ambit of management
accounting.
(i) Financial Accounting: Accounting is mainly concerned with the rearrangement of the
information provided by financial accounting. Hence, management cannot obtain full control and
coordination of operations without a properly designed financial accounting system.
(ii) Cost Accounting: Standard costing, marginal costing, opportunity cost analysis, differential
costing and other cost techniques play a useful role in operation and control of the business
undertaking.
(iii) Revaluation Accounting: This is concerned with ensuring that capital is maintained intact
in real terms and profit is calculated with this fact in mind.
(iv) Budgetary Control: This includes framing of budgets, comparison of actual performance
with the budgeted performance, computation of variances, finding of their causes, etc.
(v) Inventory Control: It includes control over inventory from the time it is acquired till its final
disposal.
(vi) Statistical Methods: Graphs, charts, pictorial presentation, index numbers and other
statistical methods make the information more impressive and intelligible.
(vii) Interim Reporting: This includes preparation of monthly, quarterly, half-yearly income
statements and the related reports, cash flow and funds flow statements, scrap reports, etc.

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(viii) Taxation: This includes computation of income in accordance with the tax laws, filing of
returns and making tax payments.
(ix) Office Services: This includes maintenance of proper data processing and other office
management services, reporting on best use of mechanical and electronic devices.
(x) Internal Audit: Development of a suitable internal audit system for internal control.

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FINANCIAL STATEMENT ANALYSIS

Financial Statements Analysis (FSA) refers to the process of the critical examination of the
financial information contained in the financial statements in order to understand and make
decisions regarding the operations of the firm.
The FSA is basically a study of the relationship among various financial facts and figures is
given in a set of financial statements. The basic financial statements i.e. the Balance Sheet and
the Income Statement, already discussed in the preceding lesson contain a whole lot of historical
data. The complex figures as given in these financial statements are broken up into simple and
valuables elements and significant relationships are established between the elements of the same
statement or different financial statements. This process of dissection, establishing relationships
and interpretation thereof to understand the working and financial position of a firm is called the
FSA.
Thus, FSA is the process of establishing and identifying the financial weaknesses and strength of
the firm. It is indicative of two aspects of a firm i.e. the profitability and the financial position.

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Objectives of the FSA:

Broadly, the objective of the FSA is to understand the information contained in financial
statements with a view to know the weaknesses and strength of the firm and to make a forecast
about the future prospects of the firm and thereby enabling the financial analyst to take different
decisions regarding the operations of the firm. The objectives of the FSA can be identified as:

To assess the present profitability and operating efficiency of the firm as a whole as well
as for its different departments and segments.

To find out the relative importance of different components of the financial position of
the firm.

To identify the reasons for change in the profitability/financial position of the firm, and

To assess the short term as well as the long term liquidity position of the firm.

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OBJECTIVE OF THE PROJECT

The objective of the project is to understand and learn the work process of finance and
accounts department and to enhance my knowledge with a detailed study.

To understand the major functions of finance & accounts department.

To know the flow of work process through which these functions are carried out
efficiently.

To understand the basics of finance & internal controls.

To understand the accounting procedures & implementing various checks & controls
for operating costs.

To study the fundamental analysis.

The focus has been on working capital management, inventory management, and
receivable management.

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PURPOSE OF FINANCIAL STATEMENT

The objective of financial statements is to provide information about the financial position,
performance and changes in financial position of an enterprise that is useful to a wide range of
users in making economic decisions.
Financial Statements provide useful information to a wide range of users:
Managers require Financial Statements to manage the affairs of the company by assessing its
financial performance and position and taking important business decisions.
Shareholders use Financial Statements to assess the risk and return of their investment in the
company and take investment decisions based on their analysis.
Prospective Investors need Financial Statements to assess the viability of investing in a
company. Investors may predict future dividends based on the profits disclosed in the Financial
Statements. Furthermore, risks associated with the investment may be gauged from the Financial
Statements. For instance, fluctuating profits indicate higher risk. Therefore, Financial Statements
provide a basis for the investment decisions of potential investors.
Financial Institutions (e.g. banks) use Financial Statements to decide whether to grant a loan or
credit to a business. Financial institutions assess the financial health of a business to determine
the probability of a bad loan. Any decision to lend must be supported by a sufficient asset base
and liquidity.
Suppliers need Financial Statements to assess the credit worthiness of a business and ascertain
whether to supply goods on credit. Suppliers need to know if they will be repaid. Terms of credit
are set according to the assessment of their customers' financial health.
Customers use Financial Statements to assess whether a supplier has the resources to ensure the
steady supply of goods in the future. This is especially vital where a customer is dependent on a
supplier for a specialized component.
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Employees use Financial Statements for assessing the company's profitability and its
consequence on their future remuneration and job security.
Competitors compare their performance with rival companies to learn and develop strategies to
improve their competitiveness.
General Public may be interested in the effects of a company on the economy, environment and
the local community.
Governments require Financial Statements to determine the correctness of tax declared in the
tax returns. Government also keeps track of economic progress through analysis of Financial
Statements of businesses from different sectors of the economy.

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RATIO ANALYSIS OF TATA STEEL

FROM 2012-2014

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INTRODUCTION TO RATIO ANALYSIS

The Ratio Analysis has emerged as the principal technique of the FSA. A ratio is a relationship
expressed in mathematical terms between two individual and groups of figures connected with
each other in some logical manner. The Ratio Analysis is based on the premise that a single
accounting figure by itself may not communicate any meaningful information but when
expressed as a relative to some other figure, it may definitely give some significant information.
The relationship between two or more accounting figures/groups is called a financial ratio. A
financial ratio helps to summarize a large mass of financial data into a concise form and to make
meaningful interpretations and conclusions about the performance and positions of a firm.
For example, a firm having Net Sales of Rs.5, 00,000 is making a gross profit of Rs.1, 00,000. It
means that the ratio of the Gross Profit to Net Sales is 20% i.e. (Rs.1, 00,000/Rs.5, 00,000) x
100.
Following Ratios been calculated:
Liquidity Ratio
Leverage Ratio
Profitability Ratio

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 Liquidity Ratio

Current Ratio
Quick Ratio

Current Ratio= Current Asset /Current Liability

Year
2011-12
2012-13
2013-14

Current Asset
12864.50
11530.60
11564.60

Current Liablity
16903.64
16488.65
18881.78

Total
0.761
0.699
0.612

Current Ratio
2011-12

2012-13

30%

2013-14

37%

34%

The ratio is mainly used to give an idea of the companys ability to pay back its short-term
liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher
the current ratio, the more capable the company is of paying its obligations. The percentage of
current ratio shows that it has been decrease in last 3 consecutive year.

Year
[Type
text] Current Asset
2011-12
2012-13
2013-14

12864.50
11530.60
11564.60

Inventories
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4858.99
5257.94
6007.81

Current
Liability
16903.64
16488.65
18881.78

Total
0.47
0.38
0.29

 Quick Ratio= (Current Asset Inventories) / Current Liability

Quick Ratio
2011-12

2012-13

25%

2013-14

41%

33%

The quick ratio measures the dollar amount of liquid assets available for each dollar of current
liabilities. Thus, a quick ratio of 1.5 means that a company has $1.50 of liquid assets available to
cover each $1 of current liabilities. The higher the quick ratio, the better the company's liquidity
position. The quick ratio is also decrease by last 3 years.

Leverage Ratio

Total Debt Ratio

Debt Equity Ratio
Capital Equity Ratio
Interest Coverage

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 Total Debt Ratio= Total debt / Capital Employed

Year
2011-12
2012-13
2013-14

Total Debt
21418.82
23636.51
23851.78

Capital Employed
79287.42
85388.28
92158.63

Total
0.27
0.28
0.26

Total Debt Ratio

2011-12

2012-13

32%

2013-14

33%
35%

A measure of a companys total debt to its total assets. A ratio less than one means that a
company has more assets than debt, while a ratio of more than one means the opposite.
A debt ratio is a measure of how risky it would be for a bank to extend a loan to
a company, with a higher ratio indicating great risk. And From last 3 Consecutive in year 201213 it has increased by 0.1but still below 1.which has good sign for company.

Debt Equity Ratio: Net Worth/ Total Debt

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Year
2011-12
2012-13
2013-14

Net worth
52621.36
55209.68
61147.99

Total Debt
21418.82
23636.51
23851.78

Total
2.46
2.34
2.56

Debt Equity Ratio

2011-12

2012-13

2013-14

33%

35%
32%

The greater a companys leverage, the higher the ratio. Generally companies with

higher

ratios are thought to be more risky because they have more liabilities and less equity. The
last 3 years it decreased in 2012-13 by 0.12 and then it increased in 2012-13 by 0.22.

Capital- Equity ratio: Capital Employed / Net Worth

Year
2011-12
2012-13
2013-14
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Capital Employed
79287.42
85388.28
92158.63
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Net worth
52621.36
55209.68
61147.99

Total
1.51
1.55
1.51

Capital Equity Ratio

2011-12

2012-13

33%

2013-14

33%
34%

A computation that indicates the financial strength of a company. The ratio is equal to
the fixed

assets of

company

divided

by

its equity

capital.

Equity capital is

the amount of money invested in a company by its shareholders. If the ratio is greater than 1,
some of the company's assets have been financed by debt. The ratio is greater than 1 & it
shows assets is financed by debt and it slightly increased by 0.4 in year 2012-13.

Interest Coverage: EBIDTA / Interest

Year
2011-12
2012-13
2013-14

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EBIDTA
9857.35
7836.60
9713.50

Interest
863.83
330.62
348.46

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Total
11.41
23.70
27.88

Total
2011-12

2012-13

2013-14

18%
44%
38%

A ratio of a company's EBIT to its total expenses from interest payments. The
interest coverage ratio measures the company's abilityto make interest payments,
Such as in its debt.
A ratio above one indicates that the company is able to pay its interest, while ratio below
one means that its interest payments exceed its earnings. The company is in better
condition to make their payments. In last three consecutive year it increased.

Profitability Ratio

Gross Margin
Net Margin
PAT Ratio
Return on Equity
EPS
Price Earning Ratio

Gross Margin: Gross Profit / Sales

Year
2011-12
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Gross Profit
9857.35

Sales
37005.71
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Total
0.27

Year
2012-13
2011-12
2013-14
2012-13
2013-14

PAT
7836.60
6696.42
9713.50
5062.97
6412.19

Sales
42317.24
37005.71
46309.34
42317.24
46309.34

Total
0.19
0.18
0.21
0.12
0.14

Gross Margin
2011-12

2012-13

31%

2013-14

40%

28%

A measure of how well a company controls its costs. It is calculated by dividing a

companys profit by its revenues and expressing theresult as a percentage. The higher the gross pr
ofit margin is, the better the company is thought to control costs.
Investors use thegross profit margin to compare companies in the same industry well as in differe
nt industries to determine what are the most profitable. There was decreased in 2012-13.But after
than in 2013-14 it increased again.

Net Margin: PAT / Sales

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Net Margin
2011-12

2012-13

32%

2013-14

41%
27%

A company's net margin typically expressed as a percentage is its net profit

divided by its net sales. Net profit and net salesare the amounts the company has
left after subtracting relevant expenses from gross profits and gross sales.Thehigher the percenta
ge the more profitable the company is. Fundamental analystsuse net margin sometimes called net
profit margin, asa way to assess how effective the company is in converting income to profit.In g
eneral, a higher netmargin is the result of an appropriate pricing structure and effective cost contr
ols. The Net Margin is decreased by the year.

PAT to EBIT Ratio: PAT / EBIT

Year
2011-12
2012-13
2013-14
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PAT
6696.42
5062.97
6412.19

EBIT
9346.34
8511.13
9855.26
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Total
0.72
0.59
0.65

PAT/EBIT RATIO
2011-12

2012-13

33%

2013-14

37%
30%

A ratio of a company's EBIT to its total expenses from interest payments. The
interest coverage ratio measures the company's abilityto make interest payments, such as
in its debtservice.
A ratio above one indicates that the company is able to pay its interest, while a
ratio below one means that its interest payments exceed its earnings. The company is in
better condition to make their payments. In last three consecutive year it decreased.

Return Equity: PAT / Net Worth

Year
2011-12
2012-13
2013-14
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PAT
6696.42
5062.97
6412.19

Net worth
52621.36
55209.68
61147.99
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Total
0.13
0.09
0.10

Return on Equity
2011-12

2012-13

31%

2013-14

41%
28%

Return on equity measures how efficiently a firm can use the money from shareholders to
generate profits and grow the company. Unlike other return on investment ratios, ROE is a
profitability ratio from the investor's point of viewnot the company. The Return on equity is
decreased in last year by year.

EPS : PAT / No. of Shares

Year
2011-12
2012-13
2013-14
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PAT
6696.42
5062.97
6412.19

No.of Shares
971.41
971.41
971.41
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Total
6.89
5.21
6.60

EPS
2011-12

2012-13

35%

2013-14

37%
28%

The portion of a company's profit allocated to each outstanding share of common stock. Earnings
per share serves as an indicator of a company's profitability. The Earning Per share has
increasing the year which give sign of good Earnings.

CONCLUSION
The Following are the conclusion
Accounting Factors help to maintain the structure of the company in one book.

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It shows all the analysis which helps to take decision both manager as well as

shareholders.
Accounting makes to understand the transaction and banking day to day expenses.
Ratio Analysis also plays an important role in taking decision for manager, investors,

customer etc.
Accounting makes the clear picture of the firm.
I have learn the basic as well as internal work of accounting and banking.

BIBLOGRAPHY

http://www.rbi.org.in/scripts/FAQView.aspx?Id=60
http://www.rbi.org.in/scripts/FAQView.aspx?Id=65
Management Accounting: Nature And Scope
Author: Dr. N. S. Malik
Financial Management Author Dr. Suresh Mittal

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http://www.readyratios.com/reference/analysis/balance_sheet_analysis.html
http://www.investopedia.com/articles/04/031004.asp

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