Financial Statement Analysis

FINANCIAL STATEMENT ANALYSIS
INTRODUCTION:
Monetary Statements are records that give an indication of the affiliation's cash related
status. It quantitatively depicts the cash related prosperity of the association. It helps in the
appraisal of the association's prospects and perils to settle on business decisions. The
objective of the cash related decrees is to give information about the budgetary position,
execution and changes in fiscal position of a wander that is useful to a broad assortment of
customers in settling on monetary decisions.
Budgetary clarifications should be reasonable, critical, tried and true and for all intents and
purposes indistinguishable. They give a correct photograph of an association's condition and
working results in a combined casing. Uncovered assets, liabilities and esteem are straight
forwardly related to an affiliation's budgetary position.While announced pay and costs are
straight forwardly identified with an association's budgetary execution. Investigation and
elucidation of the money related proclamations helps in deciding the liquidity position, long
haul dissolvability, budgetary reasonability, benefit and soundness of a firm. There are four
fundamental kinds of the budgetary articulations: Balance sheets, wage explanations, income
proclamations and articulations of held profit.
The examination of budgetary clarification is a technique of surveying the association

between section parts of cash related announcement to obtain an unrevealed cognizance of
firm financial position. These declarations fuse the compensation decree, financial record,
clarification of cash streams, and a declaration of changes in esteem. Fiscal verbalization
examination is a methodology or process including specific techniques for surveying risks,
execution, budgetary prosperity, and future prospects of an affiliation.
Investigation is a procedure of basically analysing the bookkeeping data given money related
proclamations. Budgetary articulation examination is an imperative piece of general
monetary investigation, in light of the announcements which are the finished results of
bookkeeping framework, viz., Balance Sheet and Profit and Loss Account. Monetary
proclamation investigation includes the examination of both the connections among money
related explanation numbers and the patterns in those numbers after some time.
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OBJECTIVES OF THE STUDY
 To break down the Over-all money related position of the association.

 Assessment of the Operational effectiveness of the organization.
 To decide the long haul liquidity and Solvency position of NSIC.
 To break down the productivity and viability with which association deals
with its assets and resources.
 To look at the execution of the organization for various periods.
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NEED FOR THE STUDY
 To comprehend the importance, noteworthiness and restriction of the Financial

Statement examination.
 To figure liquidity, dissolvability, benefit and movement proportions of the
association.
 To make a relative report and give answers for the authoritative change.
 To survey the general money related quality.
SCOPE OF THE STUDY
 The money related examination causes us to break down the monetary foundation
and use of the salary earned through the association procedure.
 The data acquired from auxiliary information is restricted to the NSIC.
 This consider doubtlessly describes the cash related status of the stress in the midst
of the working time period.
 The mull over report being made here draws out the cash related structure and the
circumstance of the NSIC differentiating from different years
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METHODOLOGY OF THE STUDY
The venture assesses the money related execution one of the organization with help of the
most fitting instrument of budgetary investigation like proportion examination and near
accounting report. Subsequently, it is basically truth discovering study.
Primary Data:
Essential information is the direct data that is gathered amid the time of research.
Essential information has been gathered through dialogs held with the staffs in the records
office. A few kinds of data were accumulated through oral discussions with the clerk.
Secondary Data:
Auxiliary information thinks about entire organization records and friends' asset
report in which the venture work has been finished. What's more, various reference books,
diaries and report were additionally used to plan the hypothetical model for the investigation.
Furthermore, some data was likewise drawn from the sites.
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LIMITATIONS OF THE STUDY
 The money related subtle elements of the organization are gathered for a long time
as it were
 NSIC is a legislature of India venture, can't be contemplated in 3months so time is
considered as primary limitation.
 Most of the data has been kept private and all things considered isn't passed on as
 Some portion of strategy of the organization.
 In this examination, just chose proportions are ascertained.
 It is affected by the value level changes
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MICRO, SMALL AND MEDIUM ENTERPRISES (MSME’s)
INTRODUCTION:
Micro, Small and Medium Enterprises (MSME) area has risen as a profoundly lively and
dynamic division of the Indian economy throughout the most recent 5 decades. MSMEs not
just assume urgent part in giving extensive business openings at relatively bring down capital
cost than expansive ventures yet additionally help in industrialization of country and in
reverse zones, in this manner, decreasing provincial lopsided characteristics, guaranteeing
more impartial circulation of national wage and riches. MSMEs are integral to substantial
ventures as auxiliary enterprises and this area gives gigantically to the financial advancement
of the nation.
Khadi is the pleased inheritance of our national flexibility development and the father of the
country.KVI are two national legacies of India. A standout amongst the most huge parts of KVI
in Indian economy is that it makes work at a low for each capita venture. It not only serves
the essential needs of handled merchandise of the huge provincial segment of the nation, yet
additionally gives reasonable work to country craftsman. KVI today speak to an impeccable,
legacy item, which is 'ethnic' and additionally moral. It has a possibly solid customer base
among the centre and higher classes of the general public.
Coir Industry is an agro-based customary group, which started in the territory of Kerala and
multiplied to the next coconut delivering states like Tamil Nadu, Karnataka, Andhra Pradesh,
Orissa, West Bengal, Maharashtra, Assam, Tripura, and so on. It is a fare arranged industry
and enables the capacity to upgrade sends out by esteem expansion through innovative
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mediations and broadened items like Coir Geotextiles and so forth. The adequacy of Coir
items has expanded quickly because of its 'condition inviting' picture.
The Service of MSME imagine a lively MSME area by advancing development and
advancement of the MSME Sector, including Khadi, Village and Coir Industries, in
collaboration with concerned Ministries/Departments, State Governments and different
Stakeholders, through offering help to existing ventures and empowering making of new
undertakings.
The MSMED Act was told in 2006 to address strategy issues influencing MSMEs and in
addition the scope and venture roof of the area. The Act looks to encourage the advancement
of these undertakings as likewise improve their aggressiveness. It gives the main ever
legitimate structure for acknowledgment of the idea of "big business" which involves both
assembling and administration substances. It characterizes medium undertakings out of the
blue and looks to incorporate the three levels of these endeavours, in particular, miniaturized
scale, little and medium. The Act additionally accommodates a statutory consultative
component at the national level with adjusted portrayal of all areas of partners, especially the
three classes of undertakings; and with an extensive variety of warning capacities.
Identification of particular assets for the advancement, improvement and upgrading

aggressiveness of these ventures, notice of plans/programs for this reason, dynamic credit
arrangements and practices, inclination in Government acquisitions to items and
administrations of the miniaturized scale and little undertakings, more successful instruments
for moderating the issues of postponed installments to smaller scale and little endeavours On
9 May 2007, ensuing to a revision of the GOI (Allocation of Business) Rules, 1961, erestwhile
Ministry of Small Scale Industries and the Ministry of Agro and Provincial Industries were
converged to frame the Ministry of Micro, Small and Medium Enterprises (M/o MSME). This
Ministry now plans approaches and advances/encourages projects, ventures and plans and
screens their usage with a view to helping MSMEs and help them to scale up.
SCHEMES& PROGRAMMES:
The programs embraced by the Ministry look to encourage:
 adequate stream of credit from budgetary organizations/banks;
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 support for innovation upgradation and modernization;
 integrated infrastructural offices;
 modern testing offices and quality accreditation;
 access to present day administration hones;
 entrepreneurship improvement and ability upgradation through fitting preparing
offices;
 support for item
 improvement, plan intercession and bundling;
 welfare of craftsmans and specialists;
 assistance for better access to local and fare markets and
Organisational Setup:
The M/o MSME is having two Divisions called Small and Medium Enterprises (SME) Division
and Agro and Rural Industry (ARI) Division. The SME Division is apportioned the work,
between alia, of organization, watchfulness and managerial supervision of the NSIC Ltd., an
open area endeavour and the three self-governing national level enterprise
advancement/preparing beginnings. The Division is likewise in charge of execution of the
plans identifying with Performance and Credit Rating and Assistance to Training Institution,
among others. The ARI Division cares for the organization of two statutory bodies viz. the
Khadi and Village Industries Commission (KVIC), Coir Board and a recently made association
called Mahatma Gandhi Institute for Rural Industrialization (MGIRI). It additionally oversees
the usage of the PMEGP.
The Implementation of arrangements and different projects plans for giving framework and
bolster administrations to MSME's is embraced through its appended office, in particular
 National Small Industries Corporation (NSIC),
 Khadi and Village Industries Commission (KVIC); the Coir Board, and
 Three preparing foundations viz., National Institute for Entrepreneurship and Small
Business Development (NIESBUD),
 MGIRI, vardh general public enrolled under Societies Registration Act, 1860.
The National Board for Micro, Small and Medium Enterprises (NBMSME) was set up by the
Government under the Micro, Small and Medium Enterprises Development Act, 2006 and
Rules made thereunder. It analyses the components influencing advancement and
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improvement of MSME, audits existing strategies and projects and make suggestions to the
Government in planning the arrangements and projects for the development of MSME.
National Small Industries Corporation Limited (NSIC)
NSIC has been built up in the year 1955, is going by Chairman-cum-Managing Director and
oversaw by a BOD.The fundamental capacity of the Corporation is to advance, guide and
cultivate the development of miniaturized scale and little ventures in the nation, for the most
part on business premise. NSIC gives an assortment of help administrations to smaller scale
and little ventures taking into account their diverse necessities in the regions of crude
material obtainment; item promoting; FICO assessment; procurement of advances;
appropriation of present day administration rehearses, and so on.
Khadi & Village Industries Commission
It was built under the act of khadi and village industries commission 1956 & it is a statutory
organisation occupied with advancing and creating khadi and town ventures for giving
business openings in country regions, along these lines reinforcing the rustic economy. The
Commission is maintaining one chairmen & 10 committee members. It has been recognized
as one of the significant associations in the decentralized segment for producing supportable
rustic non-cultivate work openings at a low for each capita venture. This likewise helps in
checking relocation of rustic populace to urban zones looking for the business openings. The
fundamental elements of the KVIC are to design, advance, arrange and aid usage of the
projects/ventures/plans for age of business openings through improvement of khadi and
town enterprises. Towards this end, it embraces exercises like expertise change, exchange of
innovation, examine and improvement, promoting, and so forth.
Coir Board
It is a statutory body set up under the Coir Board Industry Act, 1953 for advancing general
advancement of the coir business and enhancing the living states of the labour occupied with
this customary industry. The exercises of the Board for improvement of coir businesses,
between alia incorporate endeavour logical, mechanical and monetary innovative work
exercises; gathering measurements identifying with sends out and inward utilization of coir
and coir items; growing new items and outlines; sorting out exposure for advancement of
fares and inner deals; showcasing of coir and coir items
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NATIONAL SMALL INDUSTRIES CORPORATION (NSIC)
INTRODUCTION:
National Small Industries Corporation (NSIC), is an ISO 9001-2008 affirmed Government of
India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME). NSIC has
been attempting to advance, guide and encourage the development of smaller scale, little
and medium endeavours in the nation. NSIC works through countrywide system of
workplaces and Technical Centres in the Country. To oversee activities in African nations, NSIC
works from its office in Johannesburg, South Africa. What's more, NSIC has set up Training
cum Incubation Centre oversaw by proficient labour.
MISSION: “To advance and bolster MSME’s Sector by giving incorporated help
administrations including Marketing, Technology, Finance and different administrations”.
VISION: “To be a chief Organization cultivating the development of Micro, Small and
Medium Enterprises (MSMEs) Sector”.
Quality Policy
 We should try to give viable and provoke benefit in order to accomplish add up to
consumer loyalty consistently. We might persistently redesign our administration
quality, Communication offices and the ranges of abilities to meet client prerequisites
proficiently.
 We should continually adjust, improve and refine our procedures in accordance with
worldwide business patterns to keep up believability and initiative in our field.
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 We submit ourselves for reasonable play, straightforwardness and earnest
undertaking for the advancement and development of Micro, little and Medium
Enterprises.
 We might endeavour to accomplish operational effectiveness by achieving better
efficiency and gainfulness. We might maintain statutory and lawful directions while
doing our exercises.
Quality Objective
 To improve reach of the Corporation bringing about development in its business

 To accomplish operational proficiency and self-sustenance by achieving better
efficiency and benefit.
 To overhaul the expert abilities of all representatives keeping in pace with business
needs.
 To give sheltered, perfect, clean and friendly workplace for viable commitment by
each worker.
 Additional NTSC/NTSECs Objectives are as beneath:
 To give preparing to expertise upgradation of learners prompting open doors for their
business/independent work.
 To give basic office administrations to businesses for improving their aggressiveness
and quality.
Schemes of NSIC
NSIC encourages MSME with an arrangement that uniquely custom-made plan to upgrade
their aggressiveness. NSIC gives incorporated help benefits under Marketing, Technology,
Finance and other Support benefit.
1) Marketing Support
Showcasing had been distinguished as a standout amongst the most critical apparatus for
business advancement. The basic development and survival of MSMEs in the present strongly
focused market. NSIC goes about as a facilitator and has contrived various plans to help
endeavours in their showcasing endeavours, both residential and outside business sectors.
These plans are quickly depicted as under:
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a) Consortia and Tender Marketing
Little units in their individual limit confront issues to get and execute huge requests, which
leave them a level playing field vis-a'- vis huge ventures. It frames consortia of MSME
fabricating a similar item, in this way pool their ability. It applies the tenders in the interest of
single MSE& Consortia of MSMEs for securing orders . These requests are circulated among
MSEs tuned in to their generation limit.
b) Single point Registration for Government Purchase
The company’s (units) enrolled under SPR for government purchase of NSIC are qualified to
get the advantages under "Open Procurement Policy for (MSEs) Order 2012" as advised by
the Government of India, Ministry of MSME.
 Issue of the Tender Sets free of cost;

 Exemption from installment of Earnest Money Deposit (EMD),
 In delicate taking part MSEs citing cost inside value band of L1+15 per penny should
likewise be permitted to supply a segment below 20% of prerequisite by cutting below
their cost from L1 Price where L1 is non in the MSEs.
c) MSME Global Mart B2B Web Portal for MSMEs
With increment in rivalry and dissolving without end of worldwide limits, the interest for data
is achieving new statures. NSIC, understanding the requirements of MSMEs, is putting forth
Infomediary Services was and is an one-stop, one-window bundle of helps that will give data
on business and innovation and furthermore show the centre capability of Indian MSMEs.
B2B Webportal is putting forth following advantages to the individuals from Informediary
Services.
• Interactive database of MSMEs
• Self web improvement instrument
• National Tenders on email
• Centralized mail framework
• Popular Products Section
• Unlimited worldwide Trade
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d) Marketing Intelligence
Gather and scatter both residential and in addition universal showcasing knowledge for the
advantage of MSMEs. This phone, notwithstanding spreading mindfulness about different
projects/plans for MSMEs, will particularly keep up database and scatter data.
2) Credit Support
It encourages credit prerequisites of little undertakings in the accompanying zones:
a) Financing for acquisition of Raw Material (Short term)
This Scheme goes for helping Small units by technique for financing the purchase of Raw stock
(both indigenous and imported). The noteworthy features are:
1. Financial Assistance for obtainment of Raw Materials till 90 days.
2. lot buy of essential crude materials at aggressive prices.
3. It encourages import of panics crude inventory.
b) Financing for Marketing Activities (Short term)
It encourages financing for advertising actives, for example, Internal Marketing, Exports and
Bill Discounting
c) Finance through syndication with Banks
Keeping in mind the end goal to guarantee smooth credit stream to little endeavours, NSIC is
going into key organizations together with business banks to encourage long haul financing
of the little undertakings the nation over. The plan visualizes sending of advance uses of the
intrigued little undertakings by NSIC to the banks and sharing the preparing expense.
3) Performance and Credit Rating Scheme assistance for small scale industries
Need of a Performance and Credit Rating Mechanism for MSE was featured in Union Budget'
04-05. A plan for Micro and Small Enterprises has been defined in meeting with Indian Banks'
Association (IBA) and Rating Agencies. NSIC has been designated the nodal office for usage of
this plan through empanelled organizations.
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Advantages of Performance and Credit Rating
 An free, trusted outsider sentiment on capacities and credit-value of MSME

 Getting of credit at appealing interest
 Getting accessible in worldwide exchange
 True assents of Credit from Banks and Financial Institutions
3) Technology Support
Innovation is the way to improving an organization's upper hand in the present dynamic data
age. Little undertakings need to create and execute an innovation procedure notwithstanding
monetary, advertising and operational systems and embrace the one that incorporates their
activities with their condition, clients & providers.
NSIC offers little undertakings the accompanying help benefits through its Technical and
extension centres:
 Advise on utilization of new strategies

 Material testing offices through licensed research facilities
 Product outline including CAD
 Common office bolster in machining, EDM, CNC, and so forth.
 Energy and condition administrations at chose focuses
NSIC Technical Services Centres are situated at the accompanying spots:
Centre name Area

Chennai Leather & Foot product
Howrah General Engineering
Hyderabad Electronics & P.C Application
New Delhi Machine Tools & related exercises
Rajkot Energy Audit & Energy preservations
exercises
Aligarh Lock cluster & die and Tool making
Neemka(Haryana) Machine Tools & related activities
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International Consultancy Services
Throughout the previous five decades, NSIC has gained different ranges of abilities in the
improvement procedure of little ventures. The innate abilities are being organized to offer
consultancy administrations for other creating nations. The regions of consultancy are as
recorded beneath:
 Capacity Building
 Policy and Institutional Framework
 Entrepreneurship Development
 Business Development Services
Software Technology Cum Business Parks
At New Delhi and Chennai, it has set up software technology cum business parks for giving
the space to little and medium endeavours in programming advancement and to
IT/ITES/MSME units not regd. with STPI or the units that are falling under the general meaning
of MSME according to the rules of Ministry of MSME’s. Units other than MSME, for example,
PSUs, corporate area and so on would likewise be considered for assignment on a case-to-
case on justify with the endorsement of Competent Authority. NSIC Software Technology cum
Business Parks, New Delhi is situated in a prime area at Okhla Industrial Area contiguous NSIC
Bhavan with an aggregate developed region of approx.53000 sq.ft.
Incubation of unemployed youth for setting up of New Micro & Small

enterprises
This program encourages setting up of new ventures everywhere throughout the nation by
making independent work open doors for the jobless people. The target of this plan is to
encourage foundation of new little endeavours by method for giving coordinated
administrations in the regions of preparing for entrepreneurial ability improvement, choice
of little ventures, arrangement of undertaking profiles/reports, recognizable proof &sourcing
of plant, apparatus and supplies, encouraging assent of credit office and giving other help
benefits keeping in mind the end goal to support the advancement of little endeavours in
assembling and administrations divisions.
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International Cooperation
NSIC encourages maintainable worldwide associations. The accentuation is reasonable

business relations instead of on one-way exchanges. Since its initiation, NSIC has added to
reinforcing endeavour to-big business participation, south collaboration and offering best
practices and encounters to other creating nations, particularly those in the African, Asian
and Pacific areas. The highlights of the plan are:
 Exchange of Business/Technology missions with different nations.

 Facilitating unit to enterprise participation, JVs, Technology Transfer and other type
of supportable cooperation.
 Innovating new markets and zones of collaboration
 Identification of new fare showcases by taking part in division particular
presentations everywhere throughout the world.
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THEORETICAL FRAMEWORK OF THE STUDY
MEANING OF FINANCIAL STATEMENT ANALYSIS:
Financial Analysis is the way toward distinguishing the budgetary qualities and shortcomings
of the organization by legitimately setting up connections between the things of the asset
report and the benefit and misfortune account. Money related examination can be embraced
by administration of the firm, or by parties outside the firm, viz. proprietors, Creditors‟,
financial specialists and others. The idea of investigation will contrast contingent upon the
motivation behind examiner. Money related proportions are apparatuses for deciphering
monetary proclamations to give a premise to esteeming securities and assessing budgetary
and administration execution.
Data distributed in budgetary explanations may not be adequate frame the view purpose of
various gatherings. Distinctive gatherings or investors are keen on touching base at
conclusions for their own particular goals in light of data contained in money related
explanations. For such conclusions, the data may not be promptly accessible from money
related explanations. For instance, position of the organization from the perspective of 1)
liquidity, 2) productivity or 3) dissolvability may not be known straightforwardly from the
substance of monetary articulations. For this reason, data contained in budgetary
articulations isn't be investigated in light of the figures of monetary explanations and other
related supplementary data. Such conclusions can't be drawn straight from the number
appeared in budgetary explanations.
With the end goal of examination diverse data and figures must be looked at and such data
can be acquired as rate or rate of turnover. Along these lines, conclusions drawn in light of
various monetary numbers given in the money related articulations is known as investigation
and the suppositions surrounded in view of such conclusion is known as translation
DEFINITION:
As indicated by Myers " Budgetary Statement Analysis is, as it were, an examination of

relationship among various money related factors in business as uncovered by a single course
of action of verbalization and an examination of example of these components as showed up
in a movement of declarations."
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OBJECTIVES OF FINANCIAL STATEMENTS
The bookkeeping standards leading body of America specifies the targets of budgetary
explanation as takes after:
 To give solid money related data about financial assets and commitments at a business
venture
 To Provide solid information about in net assets at on big business that outcomes
shape its enacts
 To give budgetary data that help with assessing the gaining possibilities at a business.
 To give others required data about changers in monetary assets of commitment
 To unveil, to the degree conceivable, others data identified with the money related
articulations that is important to the requirements at the clients at these
announcements.
The above goals and to suit the requirements at the shifted clients, the bookkeeper depended
with the errand of aggregating and introducing money related proclamations must take after
a set at rules to guarantee consistency, fulfillment and decency of the announcements. This
rule is called explanation. These rules utilize called "sound accounting guidelines" without
these' proper accounting rules The announcement arranged might be un-reasonable and
deluding for the different gatherings at clients.
IMPORTANCE OF FINANCIAL STATEMENTS ANALYSIS:
The significance and handiness at money related explanations, from the perspective at
different invested individuals, are as per the following
Management: Financial proclamations are at much welcomed here to administration in

understanding the advance, position and prospects at business. Utilizing similarity one might
say that monetary proclamations serve the business administration as gouger and contract
serve the architect. Budgetary proclamation, administration can either design nor satisfy
effortlessly the elements of task and control.
Investors: Financial explanations are salsa critical for speculator both present and
forthcoming the financial specialist look to the budgetary position at business worry from an
alternate edge. Speculators are occupied with two things initially; they can't to put resources
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into such circumstance where the vibe the niacin structure at an organization is sound.
Besides, the need to put just in such concern whose future is brilliant. Financial specialist gives
first regard for the benefits after assessments in the privet and misfortune accounts.
Bankers: A brokers is fundamentally cone tear with the capacity at paying current obligations
distraught the Current task comes about he needs not honorably the installment at progress
but rather he likewise needs that such progress ought to be reimbursed at legitimate time
too.
Government: Central and state Governments and neighbourhood specialists are additionally
inspired by distributed money related articulations to evaluate their incomes through
different charges to direct capital issue and open utility likens.
Trade Creditors: The money related proclamations go about as enchantment eye featuring
the credit value, i.e., affirmation more white the organization will respect commitments as
and when thy nature.
Public: Financial articulations are additionally important to the general population who are
occupied with prospects at a worry, in one why or the other it is the sureties at the
undertaking alone that are purchased and sold on stock trades and the general population is
intrigued, for the most part in their money related standing.
Research Scholars: The monetary investigators and research labourers are keen on
distributed money related articulations for controlling administration or for setting up specific
standards and administration and offer helpful.
NEED AND AIMS OF FINANCIAL STATEMENTS
Investigation at monetary proclamations is a push to discover answers to a varsity at useful

and critical inquiries, for example, prospects for future income, capacity to pay premium,
obligation developments both present and also long haul and gainfulness at a sound profit
pokey, and so forth. The principle significance at the qualities and shortcoming at a business
undertaking at budgetary articulation i.e., Balance sheet and benefit and misfortune account
Need for management:
 Measuring the achievement or the disappointment at the activity all in all,

 Making cool headed choices seating to all the stage at activities.
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 Controlling tasks and,
 Efficiency at divisions and process.
Need for outside parties:
 Creditors utilize investigation as a reason for conceding credit.

 Investors utilize it is gone to a choice at purchasing, offering or holding partakes in an
organization and
 Government utilizes it for purposes at controls and organization.
Aims:
The Main goes for monetary examination are recorded as takes after:
 To judge the money related wellbeing at the endeavour or administration, loan bosses
and financiers.
 To judge the income execution at the organization and office with which profits can
be paid from out at earned benefits.
 In case at institutional interstaters the investigation is conveyed cover a long stretch
with a view to recognizing organizations making development potential and a sound
monetary base.
 To judge the capacity at the organization to away the central and intrigue, game plans
for amortization at obligation and the security accessible for the advances broadened
 To judge the dissolvability at the endeavour, the exchange loan bosses are for the
most part inspired by surveying the liquidity position
USERS OF FINANCIAL STATEMENT ANALYSIS:
The users of financial statement helps them to know the liquidity and profitability position of the
company in order to have a better decision making.
 Share holders
 Debenture holders
 Creditors.
 Important customers
 Employees and Trade unions
 Government Departments
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 SEBI and Stock Exchange
 Financial institutions and commercial Banks
LIMITATIONS OF FINANCIAL STATEMENTS
The nature at figures which are sent out and the any in which they are accounted for tend to
give the impression to the Spades that budgetary proclamations are exact east and last.
Monetary explanations are not from restrictions.
 Balance sheet uncovers the facial position at a firm an a particulars day typically toward
the end at bookkeeping year.
 Financial explanations mirror the favoured statistical data points these are not valuable
for control reason.
 Valuation at inventories, technique deterioration, treatment at consume as capital or
income and so forth., depend on individual sidemen.
 These contain some assessed and, for example, arrangement for dicey obligations act
 By following cash estimations idea non-money related occasions are not uncovered
 By following cost idea. Hardest esteems settled resources are not appeared. Settled
resources are appeared at taken a toll dregs deterioration.
 The money related proclamations don't keep pace with changing value levels.
 Balance sheet demonstrates the deeded costs, for example, preparatory costs. These
are not so much resources. .
TYPES OF FINANCIAL ANALYSIS:
On the basis of
a) material used
b) modus operandi
a) Material Used:
There are two types of analysis on this basis.
a) External Analysis: this examination is finished by outcast's who don't approach the
nitty gritty inside bookkeeping records of the business firm. These untouchables
incorporate speculators, leasers, credit organizations, government offices and overall
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population. For money related investigation hence spare just a restricted reason,
however the current changes in the administration controls requiring business firms
to make accessible more nitty gritty data to people in general through reviewed
distributed records.
b) Internal Analysis: : This examination is finished by people who approach the definite
inside bookkeeping records of the business firm is referred to as inward investigation,
for example, examination can consequently be performed by administrators and
workers of the association and in addition government offices which have special
forces vested in them money related examination for administrative purposes.
b) Modus operandi:
There are two types of analysis on this basis
a) Horizontal analysis: It implies the relationship of cash related data of an association

for a significant extended period of time. The figures of this sort of examination are
introduced on a level plane over various segments. This examination makes it
conceivable to concentrate consideration on things that have changed essentially
amid the period under survey. It is likewise called as Dynamic Analysis.
b) Vertical Analysis: It alludes to the investigation of relationship of the different things
in the money related articulations of one bookkeeping period. In this kind of
investigation the figures from budgetary articulations of a year are contrasted and a
base year chose from that year's announcement. It is likewise called as Static Analysis
TOOLS AND TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS
Various techniques or gadgets are utilized to contemplate the connection between various
articulations.
1) RATIO ANALYSIS
Extent Analysis is a champion among the most proficient instruments of budgetary Analysis.
It is used as a device to separate and interpret the cash related quality of the wander. Extents
are considered as on the supportive aides open to the Management in looking over the
position and achieving inductions as for viability and cash related status of a business concern.
22
ADVANTAGES OF RATIO ANALYSIS:
 Helps in basic leadership.

 Helps in money related determining and arranging.
 Helps in conveying money related qualities and shortcoming and
 Helps in co-appointment and control
 Helpful in near examination of the execution.
LIMITATIONS OF RATIO ANALYSIS:
 Qualitative elements are disregarded.

 Effect of window dressing.
 Absence of standard college acknowledged wording.
 Effect of value level changes
TYPES OF RATIOS:
They are categorized according to the financial activity they evaluate. There are 4 important
categories. They are
 Liquidity
 Turnover
 Profitability
 Leverage
1. LIQUIDITY:
It measures the capacity of the firm to fulfil its present commitments. It builds up the
connection amongst money and other related advantages for current commitments and
provides a measure liquidity position to the administration of the firm.
a) Current ratio:
It measures the organisation's transient dissolvability. It demonstrates the availability of

current assets in rupees for every one rupee of current commitment. The present proportion
is ascertained by partitioning the present resources by current liabilities. The perfect current
proportion is 2:1
23
Current assets
Current ratio = -----------------------------
Current liabilities
b)Acid test ratio:
It builds the connection among fast or fluid resources advertisement obligations. A benefit is
fluid on the off chance that it can be changed over into money promptly or sensibly soon
without lost esteem. Brisk resources incorporates account holders, charges receivables and
attractive securities. The perfect brisk proportion is 1:1
Quick assets
Quick ratio = --------------------------
Current liabilities
2) TURNOVER RATIOS
Turnover proportions are utilized to assess the proficiency with which the firm oversees and
uses its advantages. These turnover proportions since they show the speed with which
resources are being changed over or transformed over into deals. These are additionally
called as Activity proportion.
a)Fixed assets turnover ratio:
This proportion demonstrates the company's capacity in using the settled resources
of the company. The capacity of the company in producing wage from the settled resources
can be known by figuring this proportion
Net sales
Fixed Assets Turnover ratio = --------------------------
Net fixed Assets
24
B)Working Capital Turnover Ratio
The working capital turnover extent is similarly implied as net arrangements to working
capital. It shows an association's ampleness in using its working capital. The working capital
turnover proportion is figured as takes after: net yearly deals partitioned by the normal
measure of working capital amid a similar year time frame.
Net sales
Working Capital Turnover Ratio = ------------------------------
Working capital
3) Profitability Ratio:
The productivity proportions of a business concern can be estimated by the benefit

proportions. These proportions feature the final product of business exercises by which alone
the general effectiveness of a specialty unit can be judged.
a)Return on Capital Employed:
Benefit for capital used or ROCE is a profitability extent that measures how viably an
association can make profits by its capital used by standing out net working advantage from
capital used. This is the reason ROCE is a more accommodating extent than return on an
incentive to evaluate the life expectancy of an association.
Operating profit
Return on Capital Employed = ----------------------------- *100
Capital employed
b)Return on Equity:
It is figured as Net advantage after slant benefits/Equity where financial specialists esteem is
registered by subtracting complete liabilities from indicate assets. This extent measures how
the association is using the financial specialist's save and higher the extent the better the
degree theorists are concerned.
25
Profit after tax
Return on equity = ---------------------------- *100
Equity
3)Leverage ratios:
Use proportions are additionally called long haul dissolvability proportions or capital structure
proportions. The term 'dissolvability' infers the capacity of an organization to meet the
installments related with its long haul obligations. In this way dissolvability proportions are
the measure of the organization's capacity to meet its long haul commitments. By and large,
use proportions are communicated in extents.
a)Debt-Equity Ratio:
Obligation value proportion is computed to determine the soundness of the organization's

long haul money related position. Obligation value proportion demonstrates the reach out to
which it relies on obtained stores for its reality.
Debt
Debt-Equity Ratio = -------------------------------------
Equity shareholder’s fund
b) Debt To Total Fund Ratio
Obligation to add up to capital proportion demonstrates the connection between long haul
obligation and aggregate capital utilized by the organization. Add up to capital incorporates
long haul liabilities in addition to investors' value. Add up to capital is likewise viewed as
perpetual capital or capital utilized or long haul finance.
Debt
Debt to Total Funds ratio = -----------------------
Total Funds
26
2) COMPARATIVE FINANCIAL STATEMENTS:
The relative budgetary articulations are proclamations of the money related position at
various timeframes. The components of money related position are appeared in a similar
frame in order to give a thought of budgetary position at least two periods.
From reasonable perspective, by and large, two monetary proclamations (accounting report
and wage explanation) are set up in similar frame for budgetary investigation purposes. Not
just the examination of the figures of two periods yet in addition be connection between asset
report and salary proclamation empowers a top to bottom investigation of money related
position and agent comes about.
a)Comparative Balance Sheet:
The close bookkeeping report examination is the examination of the example of comparative
things, social occasion of things and figured things in no less than two money related records
of a comparable business wander on different dates. The movements in discontinuous money
related record things reflect the lead of a business.
b) Comparative Income Statement:

The Income articulation gives the consequences of activities of a business. The near salary
articulation gives a thought of the advance of a business over some stretch of time. The
adjustments in outright information in cash esteems and rates can be resolved to dissect the
productivity of the business.
3) COMMON – SIZE STATEMENTS:
These announcements are set up to know level of every one of resources for add up to
resources and level of every component of cost as level of aggregate deals. Such articulations
are otherwise called hundred rate proclamation.
Regular size proclamations are additionally helpful in looking at budgetary position of two
organizations. While investigating monetary record, every advantage as a level of aggregate
resources and every risk as a level of aggregate liabilities is ascertained. Likewise, in dissecting
benefit and misfortune account, every thing cost and wage is ascertained as level of aggregate
deals.
27
4) TREND ANALYSIS:
It shows of proportion demonstrates the bearing of changes. The pattern examination is

pushed to be contemplated in light of the accompanying two components. Any expansion
deals articulation might be a direct result of two reasons, one might be the expansion in
volume of business and another is the variety in costs of the products/administrations. For
incline investigation, the utilization of list number is for the most part pushed. The technique
took after is to dole out the number 100 to the things of each base year and to ascertain rate
changes in every thing of alternate a very long time in connection to the base year. This is
known as "Pattern Percentage Method".
5) FUNDS FLOW ANALYSIS:
Resources stream examination has transformed into a fundamental gadget in the

investigative pack at budgetary examination, credit giving associations and money related
executives. This is in light of the fact that the bookkeeping report at a business reveals its
fiscal status at a particular point at time. In any case, a cash related master must know the
purpose behind which the progress and utilized and the source from which it was obtained.
This will help him in enhancing a measure the association budgetary position and courses of
action. Resources stream examination reveals.
6) CASH FLOW STATEMENT:
Income examination is basically utilized as an apparatus to assess the sources and

employments of funds. Cash stream investigation gives bits of knowledge into how an
organization is acquiring its financing and conveying its assets. It additionally is utilized as a
part of income anticipating and as a component of liquidity examination. The income
proclamation was already known as the stream of Cash articulation. The income articulation
mirrors an association's liquidity. The monetary record is a preview of an association's
budgetary assets and commitments at a solitary point in time.
28
7) STATEMENT OF CHANGES IN WORKING CAPITAL
In cash related organization, two basic decisions are uncommonly key and basic. They are
decision concerning settled assets/settled capital and decision with respect to working
capital/current assets. Both are basic and a firm reliably examinations their effect to definitive
impact upon profitability and peril. Here current assets are those preferences, which can be
changed over into cash inside a short time period and the cash got is get put into these
assets.Thus, it is continually getting or circumnavigating. Along these lines, working capital is
generally called coursing capital or drifting capital
29
LIQUIDTY RATIOS
1) CURRENT RATIO:
It measures the company's fleeting dissolvability. It shows the accessibility of current
resources in rupees for each one rupee of current obligation. The perfect current proportion
is 2:1
Formula:
Current Assets
Current Ratio = -----------------------------
Current Liabilities
CURRENT ASSETS CURRENT CURRENT RATIO

YEAR LIABILTIES
2012-2013 211195.76 166769.7 1.2664
2013-2014 252723.39 193598.75 1.3054

2014-2015 305919.42 244398.38 1.2517
2015-2016 330813.58 267888.7 1.2349

2016-2017 324931.7 258987.15 1.2546
CURRENT RATIO
1.32
1.3
1.28
1.26
1.24
1.22
1.2
1.18
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Ideal ratio of Current ratio is 2:1. When compared to 5 years the current ratio is high in
the year 2013-2014 i.e,1.3054. It has been decreased in the year 2016-2017 i.e, 1.2546.
Therefore, the liquidity position of the organization isn't great.
30
2) QUICK RATIO:
Speedy proportion builds up the connection between snappy or fluid resources and
liabilities. A benefit is fluid on the off chance that it can be changed over into money
instantly or sensibly soon without lost esteem. The perfect proportion is 1:1
Formula:
Quick Assets
Quick Ratio = ---------------------------
Current Liabilities
YEAR QUICK ASSETS CURRENT QUICK RATIO

LIABILTIES
2012-2013 211125.29 166769.7 1.266
2013-2014 252679.58 193598.75 1.3052

2014-2015 305856.51 244398.38 1.2515
2015-2016 330727.2 267888.7 1.2346

2016-2017 324242.18 258987.15 1.252
QUICK RATIO
1.32
1.3
1.28
1.26
1.24
1.22
1.2
1.18
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Ideal ratio of Quick ratio is 1:1. In all the 5 Years, the organisation is maintaining the Quick
ratio more than 1. It is high in the year 2013-2014 i.e, 1.3052. Therefore, company is efficiently
able to meet its current or Liquid Liabilities
31
PROFITABILITY RATIOS
1)RETURN ON EQUITY:
This proportion measures how the organization is utilizing the investor's store and higher the
proportion the better it is the extent that speculators are concerned. It is computed as Net
benefit after inclination profits/Equity
Formula:
Net profit after Tax
Return On Equity= --------------------------------------
Equity
YEAR NET PROFIT EQUITY RETURN ON

AFTER TAX EQUITY
2012-2013 6235.5 45213.71 0.1379
2013-2014 7593.8 50964.68 0.149

2014-2015 8859.97 69086.6 0.1282
2015-2016 10146.44 75907.34 0.1337

2016-2017 10639.84 82911.36 0.1283
RETURN ON EQUITY
0.155
0.15
0.145
0.14
0.135
0.13
0.125
0.12
0.115
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Return on Equity is high in the year 2013-2014 i.e, 0.149 when compared to other years.
The ROE has been decreased from the year 2015-2016 to 2016-2017 by 0.54. Therefore, the
investors are able to gain by investing in the company.
32
2) RETURN ON CAPITAL EMPLOYED:
ROCE is a gainfulness proportion that measures how proficiently an organization can create
benefits from its capital utilized by contrasting net working benefit with capital utilized.
Formula:
EBIT
Return On Capital Employed= ------------------------------
Capital Employed
YEAR EBIT CAPITAL RETURN ON

EMPLOYED CAPITAL
EMPLOYED
2012-2013 22312.00 55021.09 0.4055
2013-2014 27705.62 64176.57 0.4317

2014-2015 33038.63 80547.83 0.4102
2015-2016 37231.25 87430.67 0.4258

2016-2017 36212.02 94280.38 0.3841
RETURN ON CAPITAL EMPLOYED

0.44
0.43
0.42
0.41
0.4
0.39
0.38
0.37
0.36
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The company is having high return on capital employed in the year2013-2014 when compared
to other years but it is decreased in the year 2016-2017. Therefore, the company has to use
efficiently its capital employed.
33
3) NET PROFIT RATIO:
Net benefit proportion (NP proportion) communicates the connection between net benefit
after charges and deals. This proportion is a measure of the general benefit net benefit is
touched base at in the wake of considering both the working and non-working things of
earnings and costs.
Formula:
Net Profit
Net profit ratio= ------------------------------*100

Net Sales
YEAR NET PROFIT NET SALES NET PROFIT

RATIO
2012-2013 6235.5 148140.61 4.2091
2013-2014 7593.8 209670.12 3.6217

2014-2015 8859.97 250697.55 3.5341
2015-2016 10146.44 262863 3.8599

2016-2017 10639.84 231187.2 4.6022
NET PROFIT RATIO

5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Net profit ratio is high in the year 2016-2017 i.e 4.6022% when compared to other
years. As the expenses during that year are less when compared to remaining years.
34
SOLVENCY RATIO/ LEVERAGE RATIOS
1)DEBT-EQUITY RATIO:
It is computed to determine the soundness of the organization's long haul money related
position. Obligation value proportion demonstrates the reach out to which it relies on
acquired assets for its reality.
Formula:
Debt
Debt-Equity Ratio = -----------------
Equity
YEAR DEBT EQUITY DEBT EQUITY

RATIO
2012-2013 176577.08 45213.71 3.9054
2013-2014 206810.64 50964.68 4.0579

2014-2015 255859.61 69086.6 3.7035
2015-2016 279412.03 75907.34 3.681

2016-2017 270356.17 82911.36 3.2608
DEBT- EQUITY RATIO

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The Ideal ratio of Debt-Equity ratio is 2:1. In all the 5 years, the Debt-Equity ratio is more than
2:1. Therefore, the organisation has long haul money related position.
35
2) DEBT-TOTAL ASSETS RATIO:
The obligation to add up to resources proportion is a marker of money related use. It discloses
to you the level of aggregate resources that were financed by bank, liabilities, obligation.
Formula:
Debt
Debt To Total Assets Ratio = ---------------------------
Total Assets
YEAR DEBT TOTAL ASSETS DEBT TO TOTAL

ASSETS RATIO
2012-2013 176577.08 221790.79 0.7961
2013-2014 206810.64 264775.32 0.7811

2014-2015 255859.61 324946.21 0.7874
2015-2016 279412.03 355319.37 0.7864

2016-2017 270356.17 353267.53 0.7653
DEBT- TOTAL ASSETS RATIO

0.8
0.795
0.79
0.785
0.78
0.775
0.77
0.765
0.76
0.755
0.75
0.745
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
In all the 5 years, the company is maintaining debt to total assets less than 1, it indicates that
the organisation could pay off its debts its by selling assets. Therefore, it is less risky.
36
TURNOVER RATIOS
1)WORKING CAPITAL TURNOVER RATIO
This proportion is likewise alluded to as net deals to working capital. It demonstrates an

organization's viability in utilizing its working capital.
Formula:
Net Sales
Working Capital Turnover Ratio = -------------------------------
Working Capital
YEAR NET SALES WORKING WORKING

CAPITAL CAPITAL
TURNOVER RATIO
2012-2013 148140.61 44426.06 3.3345
2013-2014 209670.12 59124.64 3.5462
2014-2015 250697.55 61521.04 4.075
2015-2016 262863 62924.88 4.1774
2016-2017 231187.2 65944.55 3.5058
WORKING CAPITAL TURNOVER RATIO

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The turnover ratio is high in the year 2015-2016 i.e 4.1774 when compared to other years
and it again decreased in the year 2016-2017 i.e 3.5058.Therefore, the company has to
efficiently utilise its short term assets and liabilities.
37
2) FIXED ASSETS TURNOVER RATIO
This ratio reveals that firm’s ability in utilising the long term assets of the company. The ability
of the company in generating income from the fixed assets can be known by calculating this
ratio.
Formula:
Net Sales
Fixed Assets Turnover Ratio= -------------------
Fixed Assets
YEAR NET SALES FIXED ASSETS FIXED ASSETS

TURNOVER RATIO
2012-2013 148140.61 8986.51 16.4848
2013-2014 209670.12 10569.81 19.8367

2014-2015 250697.55 12154.69 20.6256
2015-2016 262863 17173.7 15.3061

2016-2017 231187.2 20351.81 11.3595
FIXED ASSETS TURNOVER RATIO

25
20
15
10
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
INTERPRETATION:
The company is having high turnover ratio in the year 2013,2014&2015 i.e, 16.48, 19.83 &
20.62.Therefore, the company is utilising there fixed assets to a full extent. This ratio is less in
year 2016-2017 when compared to other years.
38
COMPARATIVE BALANCESHEET 2016-2017
PARTICULARS MAR-2016 MAR-2017 INCREASE(+) OR PERCENTAGE OF
DECREASE(-) CHANGE (%)
ASSETS
CURRENT ASSETS:
Cash and other Bank 4512.4 9512.77 5000.37 110.814
balances
Trade Receivables 11886.22 12273.42 387.2 3.2576
Short Term Loans& 314128.76 302284.04 -11844.72 3.7707
Advances
Current Investment 0 0 0 0
Inventories 86.38 689.52 603.14 698.24
Other Current Assets 199.82 171.95 -27.87 13.94
Total Current Assets 330813.58 324931.7 -5881.88 -1.788
NON-CURRENT ASSETS
FIXED ASSETS:
Tangible Assets 6964.68 7597.56 632.88 9.087
Intangible Assets 162.99 148.11 -14.88 9.129
Capital work-in-progress 10046.03 12606.14 2560.11 25.483
Non-Current Investments 7.78 7.55 -0.23 -2.95
Deferred Tax Assets(net) 5228.48 5447.73 219.25 4.19
Long term loans & 1995.73 2457.66 461.93 23.14
Advances
Other Non-Current Assets 100.1 71.08 -29.02 28.99
TOTAL NON-CURRENT 24505.79 28335.83 669.96 22.5
ASSETS
TOTAL ASSETS 355319.37 353267.53 -2051.84 -0.57
LIABILITIES AND CAPITAL:
CURRENT LIABILTIES
Short Term Borrowings 235708.71 221221.88 -14486.83 -6.14
Trade payables 11796.59 13000.82 1204.23 10.20
Other Current Liabilities 15322 19337.18 4015.18 26.20
Short Term Provisions 5061.4 5427.27 365.87 7.22
TOTAL CURRENT LIABILTY 267888.7 258987.15 -8901.55 -3.32
NON-CURRENT
LIABILITIES
Long Term Borrowings 5566.42 4926.51 -639.91 -11.49
Other Long Term Liabilities 410.02 580.61 170.59 41.60
Long Term Provisions 5546.89 5861.9 315.01 5.67
TOTAL LIABILITIES 279412.03 270356.17 -9055.86 -3.24
SHARE-HOLDER’S EQUITY
Share Capital 53298.8 53298.8 - -
Reserves& Surplus 22608.54 29612.56 7004.02 30.97
TOTAL LIABILTIES& 355319.37 353267.53 -2051.84 -0.57
SHARE-HOLDERS EQUITY
39
Interpretation:
1. The Comparative Balance sheet of the organization uncovers that the settled resources are
less in the year 2015-2016 when contrasted with 2016-2017, because of lessening in the
estimation of the settled resources by Rs13994.78.
2. The Share Holders store of the organization has been expanded by 30.9795 because of the
expansion in the save support by 30.9795. In the year 2015-2016, the organization has used
stores and surplus for the installment of profits to investors either in real money or by method
for reward.
3. The level of pariah's store is not as much as that of the time of investors subsidize in the
year 2015-2016 which implies the organization utilizes long haul obligation to buy settled
resources.
4. The rate of change in current resources is more than rate change in current liabilities which
demonstrate current resources is more than current liabilities. This additionally affirms that
the organization has utilized long haul funds notwithstanding for the present resources
coming about into a change in the liquidity position of the organization.
40
ASSETS
CURRENT ASSETS:
Cash and other Bank 5529.69 4512.4 -1017.29 -18.3969
balances
Short Term Loans& 293166.58 314128.76 20962.18 7.15
Advances
Inventories 62.91 86.38 23.47 37.30
Other Current Assets 424.78 199.82 -224.96 -52.95
Total Current Assets 305919.42 330813.58 24894.16 8.13
NON-CURRENT ASSETS
FIXED ASSETS:
Tangible Assets 5861.39 6964.68 1103.29 18.82
Intangible Assets 108.34 162.99 54.65 50.44
Non-Current Investments 7.78 7.78 - -
Deferred Tax Assets(net) 4765.43 5228.48 463.05 9.71
Long term loans & 1976.05 1995.73 19.60 0.99
Advances
Other Non-Current Assets 122.84 100.1 -22.74 -18.51
TOTAL NON-CURRENT 19026.79 24505.79 5479 28.79
ASSETS
TOTAL ASSETS 324946.21 355319.37 30373.16 9.34
CURRENT LIABILTIES
Short Term Borrowings 219252.14 235708.71 16456.57 7.50
Trade payables 6822.66 11796.59 4973.93 72.90
Other Current Liabilities 14642.15 15322 679.85 4.64
Short Term Provisions 3681.43 5061.4 1379.97 37.48
TOTAL CURRENT LIABILITY 244398.38 267888.7 23490.32 9.61
NON-CURRENT
LIABILITIES
Long Term Borrowings 5260.9 5546.89 285.99 5.43
Other Long Term Liabilities 760.15 410.02 -350.13 46.06
TOTAL LIABILITIES 255859.61 279412.03 23552.42 9.20
Share Capital 53298.8 53298.8 - -
TOTAL LIABILTIES& 324946.21 355319.37 30373.16 9.34
41
Interpretation:
estimation of the settled resources by Rs5019.01
2. The Share Holders store of the organization has been expanded by 43.2026 because of the
expansion in the save support by 43.2026. In the year 2014-2015, the organization has used
stores and surplus for the installment of profits to investors either in real money or by method
for reward.
3. The level of outcast's reserve is not as much as that of the time of investors finance in the
year 2015-2016 which implies the organization utilizes long haul obligation to buy settled
resources.
4. The rate change in current resources is not as much as rate change in current liabilities
which demonstrate current resources is not as much as present liabilities. This further affirms
the organization has not legitimately utilizing the present resources coming about into a
required change in the liquidity position of the organization.
42
ASSETS
CURRENT ASSETS:
Cash and other Bank 2934.16 5529.69 2595.53 88.45
balances
Short Term Loans& 243886.37 293166.58 49280.21 20.20
Advances
Inventories 43.80 62.91 19.11 43.63
Other Current Assets 182.01 424.78 242.77 133.38
NON-CURRENT ASSETS
FIXED ASSETS:
Tangible Assets 6003.96 5861.39 -142.57 -2.37
Non-Current Investments 7.78 7.78 0 0
Deferred Tax Assets(net) 0 4765.43 4765.43 100
Long term loans & 1327.33 1976.05 648.72 48.87
Advances
ASSETS
TOTAL ASSETS 264774.75 324946.21 60171.46 22.72
CURRENT LIABILTIES
Trade payables 4698.41 6822.66 2124.25 45.21
Other Current Liabilities 10931.89 14642.15 3710.26 33.93
Short Term Provisions 5346.90 3681.43 -1665.47 -31.14
TOTAL CURRENT LIABILITY 195798.38 244398.38 48600 24.82
NON-CURRENT
LIABILITIES
Long Term Borrowings 7605.75 5260.9 -2344.85 -30.83
Share Capital 46298.80 53298.8 7000 15.11
43
Interpretation:
1. The Comparative Balance sheet of the company reveals that the fixed assets are less
in the year 2013-2014 when compared to 2014-2015, due to increase in the value of
the fixed assets by Rs 1584.88.
2. The percentage of total debts is negative during the year 2013-2014 due to decrease
in the value of secured and unsecured loan. Their shows that the outsider fund is less
in the year 2013 in compare to 2014.
3. The Share Holders fund of the company has been increased by 26.05 due to the
increase in the reserve fund and capital. In the year 2013-2014, the company has
utilised reserves and surplus for the payment of dividends to shareholders either in
cash or by way of bonus.
4. The percentage of outsider’s fund is less than that of the year of shareholders fund in
the year 2013-2014 which means the company uses long term debt to purchase fixed
assets.
5. The percentage change in current assets is more than percentage change in current
liabilities which show current assets is more than current liabilities. This further
confirms that the company has used long-term finances even for the current assets
resulting into an improvement in the solvency position of the company.
44
ASSETS
CURRENT ASSETS:
balances
Short Term Loans& 194154.01 243886.37 49732.36 25.61
Advances
Inventories 70.46 43.8 -26.6 -37.83
Other Current Assets 406.48 182.01 -224.47 -55.22
NON-CURRENT ASSETS
FIXED ASSETS:
Tangible Assets 5896.36 6003.96 107.6 1.82
Deferred Tax Assets(net) 0 0 0 0
Long term loans & 1897.33 1327.33 -570 -30.04
Advances
ASSETS
TOTAL ASSETS 216336.65 264774.75 48438.1 22.39
CURRENT LIABILTIES
Trade payables 4108.60 4698.41 589.81 14.35
Other Current Liabilities 12383.24 10931.89 -1451.35 -11.72
TOTAL CURRENT LIABILITY 161316.14 193598.75 3228261 20.01
NON-CURRENT
LIABILITIES
Share Capital 46298.08 46298.8 0 0
Reserves& Surplus -1085.09 4665.88 5750.97 530
45
Interpretation:
less in the year 2012-2013 when contrasted with 2013-2014, because of decline in the
estimation of the settled resources by Rs1583.30 which indicates interest in settled resources
is down in the year 2012-2013.
2. The Share Holders store of the organization has been expanded by 530 because of the
expansion in the save finance by 530. In the year 2012-2013, the organization has used stores
and surplus for the installment of profits to investors either in real money or by method for
reward.
3. The level of untouchable's store is not as much as that of the time of investors subsidize in
the year 2015-2016 which implies the organization utilizes long haul obligation to buy settled
resources.
4. The rate change in current resources is more than rate change in current liabilities which
indicate current resources is more than current obligations. This further affirms the
organization has utilized long haul funds notwithstanding for the present resources coming
about into a change in the solvency position of the organization
46
ASSETS
CURRENT ASSETS:
balances
Short Term Loans& 148380.33 194154.01 45773.68 30.8489
Advances
Inventories 100.72 70.46 -30.26 30.0437
Other Current Assets 399.88 406.48 6.600 1.6505
NON-CURRENT ASSETS
FIXED ASSETS:
Tangible Assets 5833.36 5896.36 63 1.08
Deferred Tax Assets(net) 0 0 0 0
Long term loans & 978.64 1897.33 918.69 93.87
Advances
ASSETS
TOTAL ASSETS 176917.83 216336.65 39418.82 22.28
CURRENT LIABILTIES
Short Term Borrowings 111773 139651.91 27878.91 24.94
Trade payables 3687.19 4108.6 421.41 11.42
Other Current Liabilities 13175.00 12383.24 -791.76 -6.00
TOTAL CURRENT LIABILTY 135191.54 161316.14 26124.6 19.32
NON-CURRENT
LIABILITIES
Share Capital 38798.80 46298.8 7500 19.33
Reserves& Surplus -5827.85 -1085.09 -4742.76 81.38
47
Interpretation:
estimation of the settled resources by Rs1124.99 which demonstrates interest in settled
resources is down in the year 2011-2012.
2. The Share Holders store of the organization has been expanded by 100.7115271 because
of the expansion in the save support by 81.3810 and increment in share capital by 19.3305.
In the year 2012-2013, the organization has used stores and surplus for the installment of
profits to investors either in real money or by method for reward.
3. The level of untouchable's reserve is not as much as that of the time of investors finance in
the year 2011-2012 which implies the organization utilizes long haul obligation to buy settled
resources.
4. The rate change in current resources is more than rate change in current liabilities which
indicate current resources is more than current liabilities. This further affirms the organization
has utilized long haul funds notwithstanding for the present resources coming about into a
change in the solvency position of the organization.
48
FINDINGS
 The Return on Equity has decreased continuously from 2014-2015 to 2016-2017 but it has
increased in the year 2013-2014. The decrease in the ratio indicates there is no better
investment.
 There has been a gradual decrease in the debt-equity ratio of the company from 2014-2015 to
2016-2017 and then there has been a sudden increase in the ratio in the year 2013-2014. This
declining trends indicating deteriorating capital structure position and long-term
solvency of the company.
 The return on capital employed has decreased from 2014-2015 to 2016-2017 but it has
increased in the years 2013-2014. A higher return on capital employed shows effective use of
capital.
 The debt to total funds ratio is fluctuating in the past four financial years. Companies that has
fluctuating trend of ratio may have unpredictable business environments as they can’t afford
financial commitments.
 The current ratio in the year 2013-2014 and then decreases from the year 2014-2015
to 2016-2017 The table shows the current ratio is less than 2 in all the years. This
shows that company is not enjoying the credit worthiness.
 The liquidity ratio during the study period is higher than the standard (i.e.)1:1. It was
increased in the year 2013-2014 and then reduced from 2014-2015 to 2016-2017.
Hence the company is not controlling its stock position.
 The fixed assets turnover ratio has an increasing trend from 2012-2013 to 2014-2015
and has a decreasing trend in the year 2015-2016 and 2016-2017. This results that the
company is not efficiently not utilising its fixed assets.
 The working capital turnover ratio has been increasing from 2012-2013 to 2015-2016
and it has been decreased in the year 2016-2017 as the net sales has been decreased
in the year 2016-2017 and the company is maintaining more working capital than
required.
49
SUGGESTIONS
 Company should try to increase the return on capital employed, to make use of the capital
efficiently
 The organisation should increase the ratio of return on equity for better investment
 The company to use its debt more efficiently in financing the assets.
 The company has to use the assets ideally in order to attain better optimum position.
 The current ratio of the oraganisation is not better in all the 5 years. So that the company
has to maintain proper current assets to pay off the current liabilities.
50
CONCLUSION
On the off chance that appropriately dissected and deciphered, budgetary articulations can
give profitable knowledge into association's execution. Investigation of budgetary
proclamations is important to banks (here and now and long haul) speculators, security
experts, chiefs and others. Budgetary explanation investigation might be improved the
situation assortment of reason, which may extend from a straightforward examination of the
fleeting liquidity position of the firm to a complete evaluation of quality and shortcoming of
the firm in different territories. It is useful in evaluating corporate brilliance, judging credit
value, anticipating security appraisals, foreseeing the insolvency and surveying market
chance.
I have considered the connected Balance sheet and Profit and Loss Account of NSIC at 31st
walk 2017. The money related articulations are the obligation of the organization's
administration the examination and understanding of budgetary explanations is basic to draw
out the riddle behind the figure in monetary proclamations. Appropriate books of records
require by law have been stayed with by the in so far as it shows up.
51

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FINANCIAL STATEMENT ANALYSIS

The examination of budgetary clarification is a technique of surveying the association

 To break down the Over-all money related position of the association.

 To comprehend the importance, noteworthiness and restriction of the Financial

SCOPE OF THE STUDY

Identification of particular assets for the advancement, improvement and upgrading

The programs embraced by the Ministry look to encourage:

 adequate stream of credit from budgetary organizations/banks;

 To improve reach of the Corporation bringing about development in its business

b) Single point Registration for Government Purchase

 Issue of the Tender Sets free of cost;

c) MSME Global Mart B2B Web Portal for MSMEs

• Interactive database of MSMEs

• Self web improvement instrument

• National Tenders on email

• Centralized mail framework

• Popular Products Section

• Unlimited worldwide Trade

It encourages credit prerequisites of little undertakings in the accompanying zones:

a) Financing for acquisition of Raw Material (Short term)

1. Financial Assistance for obtainment of Raw Materials till 90 days.

2. lot buy of essential crude materials at aggressive prices.

3. It encourages import of panics crude inventory.

b) Financing for Marketing Activities (Short term)

c) Finance through syndication with Banks

 An free, trusted outsider sentiment on capacities and credit-value of MSME

 Advise on utilization of new strategies

NSIC Technical Services Centres are situated at the accompanying spots:

Centre name Area

Software Technology Cum Business Parks

Incubation of unemployed youth for setting up of New Micro & Small

NSIC encourages maintainable worldwide associations. The accentuation is reasonable

 Exchange of Business/Technology missions with different nations.

MEANING OF FINANCIAL STATEMENT ANALYSIS:

As indicated by Myers " Budgetary Statement Analysis is, as it were, an examination of

IMPORTANCE OF FINANCIAL STATEMENTS ANALYSIS:

Management: Financial proclamations are at much welcomed here to administration in

NEED AND AIMS OF FINANCIAL STATEMENTS

Investigation at monetary proclamations is a push to discover answers to a varsity at useful

 Measuring the achievement or the disappointment at the activity all in all,

Need for outside parties:

 Creditors utilize investigation as a reason for conceding credit.

USERS OF FINANCIAL STATEMENT ANALYSIS:

LIMITATIONS OF FINANCIAL STATEMENTS

TYPES OF FINANCIAL ANALYSIS:

There are two types of analysis on this basis.

There are two types of analysis on this basis

a) Horizontal analysis: It implies the relationship of cash related data of an association

TOOLS AND TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS

 Helps in basic leadership.

LIMITATIONS OF RATIO ANALYSIS:

 Qualitative elements are disregarded.

It measures the organisation's transient dissolvability. It demonstrates the availability of

Current ratio = -----------------------------

b)Acid test ratio:

Quick ratio = --------------------------

a)Fixed assets turnover ratio:

Fixed Assets Turnover ratio = --------------------------

Net fixed Assets

Working Capital Turnover Ratio = ------------------------------

The productivity proportions of a business concern can be estimated by the benefit

a)Return on Capital Employed:

Return on Capital Employed = ----------------------------- *100