CENTRE POINT COLLEGE

INTRODUCTION

Analysis of financial statements is a study of a relationship among various financial facts

and figure as set out in the financial statement i.e. Balance sheet and profit and loss
Account.

According to Myer, “Financial statement analysis is largely a study of relationship among

the various financial factors in a business, as disclosed by a single set of statement, and a
study of trends of these factors as shown in a series of statements.”

Financial statement analysis is important to boards, managers, payer, lenders and other
who make judgments about the financial health of the organization. One widely accepted
method of assessing financial statements is the ratio analysis, which uses data from
Balance Sheet and Profit and Loss Account to produce values that have easily interpreted
financial meaning. Most of the organization or companies routinely evaluate financial
condition by calculating ratios and comparing the values to these, looking for difference
that could indicate weaknesses or opportunities for improvement.

The basic requirement to start a new business are 7Ms- Man, Machine, Material ,Market
Method, Money and Management .But the most important factor is money because with
the help of money we can arrange the other six factor. So the basic needs start with
money and arrange it, every project has to undergo a process of project financing.

A “Ratio” is an arithmetical expression of relation between two related or interdependent

items. When ratios are calculated on the basis of accounting information they are called
“Accounting Ratios”
According to J.Betty. “The term accounting ratio is used to describe significant
relationship which exist between figures shown in a Balance Sheet, in a Profit and Loss
Account, in a budgetary control system or in any part of the accounting ratio.”

Ratios are highly important profit tools in financial analysis that help financial analysts
implement plan that improve profitability, liquidity, financial structure, leverage and

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turnover. Although ratios report mostly on performances, they can be predictive too, and
provide lead indication of potential problem areas.

Ratio Analysis is a technique of analysis of the financial statement and refers to analysis
of financial statement by computation of ratios.

According to Myers, ratio analysis is a “study of relationship among various financial

factors in a business.”

Ratio analysis of can be used to compare the risk and return relationship of the firm.
Ratio analysis is a widely used tool of financial analysis. It is the systematic use of ratio
to interpret the financial statement so that the strength and weakness of the firm as well as
its historical and current financial condition can be determined.

PROJECT APPRAISAL
The appraisal of the project covers marketing, technical, financial, economical and
managerial aspect. Financial institutions appraise a project from these angles. Based on
that, a decision is taken whether the project will be accepted or not.

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IMPORTANCE AND SIGNIFICANCE OF THE STUDY

• The study will enable us to know progressive growth of the company in all its
avenues. Along with maintaining its high standards “SINCE 1925”
• It will show us the impact of different brands on the financial balance sheet.
.
Financial statement analysis is important to boards, managers, payer, share
holders, lenders and other who make judgments about the financial health of the
organization. One widely accepted method of assessing financial statements is the ratio
analysis, which uses data from Balance Sheet and Profit and Loss Account to produce
values that have easy interpretation financial meaning. Most of the organization or
companies routinely evaluate financial condition by calculating ratios and comparing the
values to these, looking for difference that could indicate weakness opportunities for
improvement

A “Ratio” is an arithmetical expression of relation between two related or

interdependent items. When ratios are calculated on the basis of accounting information
they are called “Accounting Ratios”

This study will enable manufacturers of Raymond to have clear idea on certain
areas like the buyer behaviours, the factors which will enhance their buying behaviour,
the attributes that consumers are looking forward in Raymond and in case they have
complaints or suggestions with regard to improvement of the product.

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INTRODUCTION OF THE COMPANY

Around the time the Singhania family was building, consolidating and expanding
its various businesses in Kanpur, one Mr. Wadia, was in a similar manner engaged in
fulfilling his dream: he set up a small woolen mill in the area around Thane creek, 40 kms
away from Bombay. This mill was soon acquired by the Sassoons, a well-known
industrialist family of Bombay, who renamed it as The Raymond Woolen Mills.
The vision and foresight of Mr. Kailashpat Singhania helped greatly in
establishing the J.K. Group’s presence in the western region.
Under his able stewardship, Raymond embarked upon a gradual phase of
technological up gradation and modernization producing woolen fabrics of a far superior
quality.
Under Mr. Gopalakrishna Singhania, the mill became a world-class factory and the
Raymond brand became synonymous with fine quality woolen fabrics. At Raymond,
quality did not rest on its laurels. When Dr. Vijayapat Singhania took over the reins
of the company in 1980, he injected fresh vigor into Raymond, transforming it into a
modern, industrial conglomerate. His son Mr. Gautam Hari Singhania, the present
chairman and managing director has been instrumental in restructuring the Group.
With the divestment of the Synthetics, Steel and Cement divisions he initiated, the
Group has emerged stronger with a better bottom line, more focused approach,
become market oriented and achieved a consolidated position.
Today, the woolen mill by the creek has turned into a Rs. 1400 crores conglomerate and
is India’s leading producer of worsted suiting fabric with 60% market share. It is also the
largest exporter of worsted fabrics and readymade garments to 54 countries including
Australia, Canada, USA, the European Union and Japan. The Raymond group is also the
leader among readymades in India with a turnover of Rs. 2000 million with its three
brands – Park Avenue, Parx and Manzoni.
In its pursuit of excellence Raymond continues to achieve enhanced customer satisfaction
through ongoing innovation. And happily the growth graph continues to rise higher…and
higher.

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Objective of the study

1) To study various relevant ratio required to understand the profitability and liquidity
position of the company.

2) To apply quantitative methods to derive the trend analysis of the formal and casual
wear.

3) To provide necessary recommendation and suggestions based on the findings.

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HYPOTHESIS

The hypothesis taken under consideration for the study is:

1)The financial statement provide a relevant information for

projecting future.

2)Quantitative methods provide substantial tool for understanding the trend of the
market.

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RESEARCH METHOLOGY

Methodology is a way or the manner in the project was carried down. To

achieve the objective of the study the tool of Market Research was used.

Research is considered as an endeavor to arrive at answer to intellectual and

practical problem through application of scientific methods to the knowable universe. It
is the moment from the knows to the unknown research can be defined.

In this project the activities that go by the name of research involve mainly a
observation research method that is activities undertaken to refer to the critical and
exhaustive investigation of financial statement of the company.

For investigation various data is required so that it could be analyzed and

interpreted and conclusion could be drawn.

The study of “ANALYTICAL SYUDY OF FINANCIAL STATEMENT OF RAYMOND

WITH SPECIAL REFERENCE TO FORMAL AND CASUAL WEAR AT NAGPUR REGION”
will be done through various resources.

Source of Data:
Collection of data is gathering of information for the subject matter under study of the
enquiry to be taken, and the method to be decided generally depends on the nature,
feasibility and the purpose of the study as well as the availability of resource and time.

a)Primary Data:

A survey i.e field work will be conducted in which a small size was taken.

1. Interview

2. Questionnaire

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b) SECONDARY SOURCES
1. Secondary data is such numerical information, which have been already collected by
some agency for specific purpose and subsequently complied from that source for
application in different collection.

2. The study requires secondary source of data for the study purpose. Hence secondary
source of data is taken under consideration for research.

3. The secondary data required for study includes:

• Information gathered through surfing the internet.

• Private circulations from consultants

4. The source of secondary data has been from the 2007-10, balance sheet and profit &
loss account of Raymond with respect to Nagpur Region.

The sources of secondary data include:-

i) Books iv) Reliability of Data

ii) Websites v) Analysis of Data
iii) Company records vi) Reporting

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EXPECTED CONTRIBUTION

• Research would help to provide information regarding the financial position pertaining
to various categories of products and the pattern of consumer purchasing trend.
.
•Research would also help to understand the weaknesses in the premium products and
recommend suggestion to aid in improving the current financial position .

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CHAPTERIZATION

1. Introduction

2. Company Profile

3. Research study

a. Problem Definition

b. Theoretical prospective

c. Objectives of the study

d. Limitations of the study (Research boundaries)

4. Research Methodology

5. Data collection

6. Data analysis and Interpretation

7. Conclusion

8. Recommendations and Suggestions

9. Limitations of the study

10. References

11. Bibliography

12.Annexure

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