Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
1
1.1 INTRODUCTION
known institution placed in the A+ category by the KVIC along with fifteen other
institutions all over India. Main activity of the Association is Khadi production and
marketing. And hence, the financial prospects of the institution vary from year to
year. The study conducted has taken into consideration financial statements of the
statements has been carried out that helps the project portray the institution’s
Profit and Loss account and other operative data. It is thus an attempt to dissect the
and creditworthiness of the institution. Various tools of analysis are used to study
value, credit rating and efficiency of operations. These tools of analysis are
3
1.3 SIGNIFICANCE OF THE STUDY
diagnosis of the profitability and financial position of the firm concerned. The
meaning of the financial statement data so that forecast may be made of the future
earnings, ability to pay interest and debt maturities etc. And hence, the project
conducted during the period dated November 18th to January 18th is based on the
financial statement of the institution that covers a period of last 5 years has been
taken into consideration. A comparison of the financial statements has been carried
out that helps the project in portraying the institution’s financial performance and
1.4 METHODOLOGY
4
Research methodology refers to the various sequential steps to be adopted by
DATA COLLECTION
The data can be collected through various methods. Primary and secondary
methods of data collection are available for concerned data collection. The
classification of data is based on the source of data. Primary data means first hand
information collected for the first time and, secondary data means second hand
time.
The study and analysis conducted for this project is based on the secondary
data received. It’s based on the relevant information available through the
institution’s Annual Reports, accounting records etc., which covers a period of last
5 years. Various statistical tools and Excel, Word etc., are used for presentation,
5
Analysis of financial statements is a powerful mechanism to ascertain
However, it suffers from certain limitations. Some of the major limitations are as
under:
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CHAPTER 2
7
2.1INDUSTRY PROFILE
KHADI - AN OVERVIEW:
movement and has become virtually symbolic to the struggle for freedom. It was at
the time of the Nagpur session (1920) that the Indian National Congress decided to
freedom”. In fact Khadi was introduced in 1920 as a political weapon and as the
best instrument for giving concrete expression to the Swadeshi spirit to boycott
foreign goods.
Khadi means any cloth woven on handlooms in Kerala from cotton, silk or
woolen yarn handspun in India or from a mixture of any two or all such yarns.
produces any goods or renders any service with or without the use of power in
which the fixed capital investment per head of an artisan or a worker doesn’t
exceed one lakh rupees or such other sum as may, by notification in the Official
INDUSTRIAL SCENARIO:
The Khadi market stands today is medium and it is growing. As a result, the
globalization of the fabrics trade has opened up highly demanding and evolving
8
requirement for outsourcing in Khadi industry. During the last 10 years the Khadi
market and Mill made fabric available in global market entered with low cost.
NATIONAL SCENARIO:
of the country. Apart from providing one of the basic necessities of life, Khadi
industry also plays a pivotal role through its contribution to industrial output,
employment generation and the export earning of the Country. It provides direct
and indirect employment to the people and largest it’s the largest employment
sector after agricultural sector. Thus, the growth and all round development of
CURRENT SCENARIO:
Khadi industry faces stiff competition from power loom and hand loom
sector. Cost of Khadi depends on the human involvement in both the spinning and
weaving stages of Khadi production. As such the cost of Khadi cloth is a bit higher
Khadi industry in Kerala assumes a vital role in the State’s economy. Khadi
industry has been implemented in Kerala by KVIC and KKVIB through its directly
southern Districts of the State namely Trivandrum in the South and Kannur in the
institutions.
Kerala during the year 2000 was nearly 42 lakh of which 55 percentage were
women. Khadi Sector is unable to attract enough workers to operate even their
existing charkas and looms. In a State like Kerala where the physical qualities of
life are comparable to that of any developed countries of the world, people prefer
weaving activities are run as shed based programme with scheduled working hours
A majority of Khadi workers are women below the age of 30 who consider
and 84 percent of the workers are women. Male ascendancy is witnessed only in
the sales are made in semi-urban and urban areas through the 160 outlets run by the
Board. Nearly 74 to 88 percentages of the annual sales are made during special
rebate seasons (Onam, Bakreed, and Christmas and Gandhi Jayanthi weeks).
percentages of sales in the state is constituted of muslin and silk items. The huge
pile of stock with the Board includes yarn and cloth made of cotton.
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2.2 COMPANY PROFILE
INTRODUCTION:
The Kerala Khadi and village Industries Association was registered under
the Cochin Literary Scientific and Charitable Societies Act as No.1 of 1955.The
Head Office is at Avanissery of Thrissur district. The Association started with 150
Traditional charka spinners and 6 staff members. Only Khadi work was done in the
beginning.
dye house and printing section is working at Avinisserry Head Quarters. Apart
from Khadi, the institution is engaged in village oil industry with 4 power Ghanies
(oil extraction unit-wooden chakku), washing soap making unit and honey
charkas, approved by the Khadi & Village Industries Commission and acclaimed
The Association has the privilege of organizing four All India Khadi &
Village Industries Exhibitions in 1956, 1957, 1960 and 1980. Kuppadam weaving
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is an art of Kerala Khadi weaving. KVI’s have such 3 weaving centers and the
women artisans. There are 31 production centers and 15 showrooms cum retail
outlets spread over the district of Malapuram, Palakkad, Thrissur and Ernakulam.
The affairs of the Association are managed by 112 administrative staff including
SALIENT FEATURES
The Association is one of the major institutions directly aided by Khadi and
muslin Khadi. One of the 10 muslin pilot centers started through out India in 1970-
71 was at Aryannur near Guruvayur, which topped the list of all the centers in
Industries Commission along with 15 other institutions all over India. Main activity
clothes of 30 meters per day only and is not able to meet the huge demand. The
Association is the only place in Thrissur District where Khadi bleaching and
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In 2006-07, institution had a production of Khadi worth 257.20 crores. The
total sale during the year was 380.98 lakh. There are 110 regular employees and
1158 rural artisans. Mostly woman are getting regular employment opportunity
through these activities. The Association has earned all India reputation in the
spindle charkas. The other activities are silk Khadi production, carpentry and
blacksmith, agmarked honey production, Ghani oil, Cane Furniture etc. There are
31 production centers and 15 sales centers under the Institution spread over the
district of Malapuram, Palakkad, Thrissur and Ernakulam. The Institution has its
own land and building worth Rs.5.78 crores located in 31 places in 24 Panchayath.
buildings and all other movable and immovable property which the Association
for the purpose there off may from time to time think proper to acquire.
lease sublet, mortgage dispose of, turned to account or otherwise deal with all
underlying the various items of the constructive program as laid down in the
teaching of Gandhi.
Association any building or buildings for the purpose of the Association and to
Association, upon such terms and in such a manner and on such securities as
KGB Chalakudy
KGB Kodungallur
KGB Nattika
KGB Ottupara
KGB Thripunithura
PC Choorakattukara
PC Erumapetty
PC Kadavallur
PC Kodakara
PC Mayannur
PC Peringottukara
PC Trichur
PC Trikkur
Central Vastralaya
Central Store
Soap Unit
Oil Unit
Honey Unit
Cane Unit
Sliver Unit
Saranjan Karyalaya
Readymade Unit
Dye House
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SUPPLY CHAIN
The supply of cotton to this institution is mainly from the Cotton Growers
cotton is processed at KVIC’s Central Sliver Plant at Kuttoor and sliver rovings are
Avanissery sliver unit. Association is also purchasing slivers from KVIC Kuttoor
directly. Slivers are converted into yarn by the spinners of the Association.
Major issues, constraints and problems faced by the KK&VIA and other
work place, irregular supply of raw material etc., which are summarized below:
Work sheds are very old and in rainy season it becomes very
weaving.
Due to the low wages skilled manpower is not available for taking
CHAPTER 3
17
CONCEPT OF FINANCIAL
STATEMENT ANALYSIS
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3.1 CONCEPT OF FINANCIAL STATEMENTS
Financial statements also called financial reports are the end products
sheet and the income statement or the profit and loss account. These statements are
the outcome of summarizing process of accounting and are; therefore the sources of
information on the basis of which conclusions are drawn about the profitability and
the financial position of a concern. Financial statements are the basis for decision
making by the management as well as all other outsiders who are interested in the
logical and consistent accounting procedures. In the words of john m Myer,” financial
sheet reflecting the assets, liabilities and the capital as on a certain date and the
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NATURE OF FINANCIAL STATEMENTS
periodical review or report by the management and deals with the state of investment
in business and result achieved during the period under review. It reflects a
judgments.
recorded facts, which are not based on replacement costs, do not show current
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OBJECTIVES
conclusions are drawn about the profitability and financial position of a concern. The
statements:
business activities.
business.
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USES & SIGNIFICANCE
The financial statements are mirror which reflects the financial position and
and public at large. The major uses of financial statements can be point out as follows:
As a report stewardship;
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3.2 ANATOMY OF FINANCIAL STATEMENTS
These statements are the record of operating performance with its impact on financial
1. Balance sheet:
The balance sheet also called statement of financial position depicts the
financial strength of the concern. Its purpose is to show the resources that the
company has, i.e., its assets, and from where those resources come from, i.e., its
liabilities and investments by owners and outsiders. Thus the balance sheet delineates
relationship between assets and liabilities. The assets are shown on the right hand
side, while the sources of the assets on the left hand side. Total of both sides will
always tally.
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Financial position is not based absolutely on facts but to some extent
Balance sheet provides useful information about the firm’s resources and
2. Income statements:
Income statement, also called profit and loss account, is a performance report
which records changes in income, expenses profits and losses as a result of business
operations during the year between the two balance sheet dates. This statement
measures the progress of a business in carrying out the function of delivering services
and products to its customers for which the enterprise was set up.
Appropriation section
particular period of time since it reflects the results of operations for a period of time.
Income statement also portrays the repaying capacity of the company and can also
measure the profitability of the company. On the basis of this statement the
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management can evaluate the effectiveness of its past policies and decisions. They
can also take decisions with respect to present production capacity, change in
advertisement policies, and change in sale price, diversification, merger plan etc; on
LIMITATIONS:
Financial statements do not depict the exact position and are essentially
interim reports.
These statements do not give a real and correct report about the worth of the
assets and their loss of value as these are shown on historical cost basis.
These statements are drawn after the real happening of the events.
managerial decisions. But the information provided in the financial statements is not
weaknesses of the firm by establishing strategic relationship between the items of the
balance sheet, profit and loss account and other operative data. Financial analysis is
an attempt to determine the significance and meaning of the financial statement data
so that forecast may be made of the future earnings, ability to pay interest and debt
While the term ‘analysis’ is used to mean the simplification of financial data,
OBJECTIVES
of a concern. This is done through comparison by ratios for the same concern over a
period of years; or for one concern against the industry as a whole; or for one concern
against the predetermined standards; or for one department of a concern against other
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In short, the main objectives of analysis of financial statement are to assess:
The operational efficiency of the concern as a whole and of its various parts or
departments,
The short term and long term solvency of the concern for the benefits of the
The comparative study in regard to one firm with another firm or one
department,
preparing budgets,
depending upon;
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Types of financial analysis
used by him:
On this basis, the financial analysis can be external and internal analysis.
a) External analysis:
It is made by those persons who are not concerned with the enterprise.
They are outsiders who do not have access to the enterprise. They do not have
access to the detailed internal accounting records of the company and have to
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b) Internal analysis:
which have statutory powers vested in them. Financial analysis for managerial
purposes is the internal type of analysis that can be affected depending upon
the purpose to be achieved. The internal analyst can give more reliable result
than the external analyst because every type of information is at his disposal.
On this basis the analysis can be long term analysis and short term analysis.
This analysis is made in order to study the long term financial stability,
making such type of analysis is to know whether in the long run the concern
for modernization, growth and development of the concern and to meet its
The purpose of this analysis is to know whether in the short run a business
concern will have adequate funds readily available to meet the short term
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requirements and sufficient borrowing capacity to meet contingencies in the
nearer future. This analysis is made with reference to items of current assets
and current liabilities to have fairly sufficient knowledge about the company’s
current position which may helpful for short term financial planning.
On this basis the analysis may be horizontal analysis and vertical analysis.
of years and, therefore, based on financial data taken from several years. This
is very useful for long term trend analysis and planning. Comparative
This analysis is made to review and analyze the financial statement of one
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are used to study the relationship between different statements. The following
I. Comparative statements;
V. Ratio analysis;
VII. Cost-volume-profit-analysis.
I. Comparative statements:
such statements. This is done to make the financial data more meaningful. The
statement of two or more years are prepared to show absolute data two or more years,
Comparative statements can be prepared for both income statements and position
statement.
This statement discloses the net profit or net loss resulting from the business
accounting periods so that changes in absolute data from one period to another
This statement, prepared in two or more different dates, can be used for
comparing assets and liabilities and to find out any increase or decrease in
these items. This facilitates the comparison of figures of two or more periods
concern.
Comparative statements can also be used to compare the position of the firm
with the average performance of the industry or with other firms. Such a
situation.
Disadvantages:
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Inter-firm comparison may be misleading if the firms are not of the same
depreciation, valuation of stock etc. and do not cater to the same market.
Common size financial statements are those in which figures reported are
converted to some common base. Items in the financial statements are presented as
percentages or ratios to total of these items and a common base for comparison is
provided. Here vertical analysis becomes the relation of individual items to its
respective total. Common size statements may be used for balance sheet as well as
income statement.
A statement in which balance sheet items are expressed as the ratio of each
asset to total assets and the ratio of each liability as the ratio of total liabilities is
the relation of each item to sales. Common size income statement for different
The fund flow statement is a financial statement which reveals the methods by
which the business has been financed and how it has used its funds between the
opening and closing balance sheet dates. This statement is known by different titles
financial position, where came in and where gone out statement, where got where one
In the words of Anthony, “the fund flow statement describes the sources from
which additional funds were derived and uses to which these funds were put.” Thus
the analysis of such statements over periods of time clearly shows the sources from
which past activities have been financed and brings to highlight the uses to which
Objectives:
To help to understand the changes in assets and asset sources which are not
To inform as to how the loans to the business have been used; and
growth, improving the rate of income on assets, planning the temporary investment of
idle funds etc. the uses of fund flow statement can be listed as under.
Disadvantages:
The fund flow statement has a number of uses; however, it has certain limitations
working capital.
financial statements.
It is historic in nature and projected funds flow statement can not be prepared
Changes in cash are more relevant for financial management than the working
capital.
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IV. Cash flow statement:
cash inflows and outflows. Cash flow statement is one important tool of cash
period.
as a statement which summarizes sources of cash inflows and uses of cash outflows of
a firm during a particular period of time, say a month or a year. Such a statement can
be prepared from the data made available from comparative balance sheet, profit and
Cash flow statement is very useful to the management for short term planning
It predicts future cash flows on the basis of what happened in the past.
It shows the relationship of net income to the changes in the business cash.
It provides cash flow information to investors and creditors which help them
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It enhances the comparability of the reporting of operating performance by
Limitations:
Despite a number of uses, cash flow statement suffers from the following
limitations.
It excludes near cash items from cash obscures the true reporting of the firm’s
liquidity position.
V. Ratio analysis:
Handbook by Wixon, Kell and Bedford, a ratio is “an expression of the quantitative
Ratio analysis provides clues to the financial position of a concern. These are
out whether the condition is strong, questionable or poor. The conclusions can be
The ratio analysis is one of the most powerful tools of financial analysis. It is
used as a device to analyze and interpret the financial health of enterprise. It is with
the help of ratios that the financial statements can be analyzed more clearly and
There are different parties interested in the ratio analysis for knowing the
financial position of a firm for different purposes. These are discussed below:
Helps in decision-making
Helps in communicating
Helps in co-ordination
Helps in control
b) Utility to shareholders\investors:
c) Utility to creditors:
specified time
Helps in knowing about the current financial position through current and
acid-test ratios.
d) Utility to employees:
Helps to know the firm’s financial position which in turn will affect their
fringe benefits.
Various profitability ratios relating to operating profit, net profit etc enables
e) Utility to Government:
Classification of ratios
In view of various users of ratios, there are different types of ratios which can
be calculated from the information given in the financial statements. The particular
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purpose of the user determines the particular ratios that might be used for financial
analysis
Ratios
Or Or Or
to test importance
40
Traditional classification or statement ratios
Balance Sheet ratios Profit and Loss account ratios Composite ratios
9) Working Capital
turnover ratio
test:
41
Functional Classification or Classification according to Tests
Leverage Ratios
2) Return on
Capital
3) Return on Total
Resources
5) Price-Earning Ratio
42
(B) Classification according to Significance or
Importance:
firm comparison. For inter firm comparison the ratios may be classified as
primary and secondary ratios. The other ratios which support or explain the
primary ratios are called secondary ratios, e.g., the relationship of sales to total
Limitations:
The ratio analysis is one of the most powerful tools of financial management.
Though ratios are simple to calculate and easy to understand, they suffer from
historical nature.
43
Change of accounting procedure by a firm often makes ratio analysis
misleading.
Ratios have to be interpreted and different people may interpret the same
statements of several years. Under this method trend percentages are calculated for
each item of the financial statements taking the figures of the base year as 100. The
trend percentages show the relationship of each item with its preceding year’s
percentages. This will exhibit the upward or downward trend to which the concern
is proceeding. These trend ratios may be compared with the industry in order to
Limitations:
practices reflected in accounts have not been consistently followed year after
year.
44
A change in price level makes comparisons out of tune.
between cost, volume and profit. In the words of Herman C. Heiser, “the most
The three factors of CVP analysis are interconnected and dependent on one
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CHAPTER 4
DATA ANALYSIS
AND
INTERPRETATION
46
4.1 FINANCIAL HIGHLIGHTS
CURRENT ASSETS
2005 590.00
2006 692.21
2007 730.93
2008 675.21
2009 721.88
Source: Annual Report
800
600
400
200
0
2005 2006 2007 2008 2009
YEAR
CURRENT ASSETS
Inference:
Current Asset shows an increasing trend during the period 2003-05 and a slight fall
CURRENT LIABILITIES
47
YEAR Rs (in lakh)
2005 286.25
2006 409.73
2007 460.18
2008 408.89
2009 464.73
Source: Annual Report
500
400
300
200
100
0
2005 2006 2007 2008 2009
YEAR
current liabilities
Inference:
Current liabilities show a constant increase till the year 2005 and a slight fall in the
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NET SALES
2005 481.52
2006 496.77
2007 512.84
2008 631.65
2009 635.53
700
600
500
400
300
200
100
0
2005 2006 2007 2008 2009
YEAR
sales
Inference:
The amount of sales shows an increasing trend till the year 2009.
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4.2 RATIO ANALYSIS
The ratio analysis is one of the most powerful tools of financial management.
or deteriorating.
1. Profitability ratio:
Net profit ratio establishes a relationship between net profit and sales and
Net Sales
goods per unit may decline without resulting in losses on operations of a firm.
Net Sales
3. Operating Ratio:
sold and other operating expenses on the one and sales on the other. The two
basic elements of this ratio are operating cost and net sales.
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Operating Ratio = Operating Cost *100
Net Sales
4. Current Ratio:
and current liabilities. This ratio, is a measure of general liquidity and is most
widely used to make the analysis of a short-term financial position and liquidity
of a firm.
Current liabilities
Stock Turnover ratio also known as stock velocity, indicates the number
of times the stock has been turned over during the period and evaluate the
efficiency with which a firm is able to manage its inventory. The purpose is to
see whether only the required minimum funds have been locked up in inventory.
Average Inventory
simple words it indicates the number of times average debtors are turned over
during a year.
Average Debtors
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7. Creditors Turnover Ratio:
purchases and incur short term liabilities. The analysis for creditor’s turnover
Average Creditors
utilization of net working capital. Avery high working capital turnover ratio is
not a good situation for any firm and hence care must be taken while
Average Working
Capital
52
1. Profitability Ratio:
Rs (in lakh)
YEAR NET SALES RATIO
PROFIT
2.5
2
Value
1.5
1
0.5
0
2005 2006 2007 2008 2009
Year
RATIO
Inference:
During the period 2006-07 the profitability position of this institution was high.
Then it faced a sudden fall in the year 2009. By implementing new production
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2. Gross profit ratio:
Rs (in lakh)
YEAR GROSS NET RATIO
PROFIT SALES
20
15
10
5
0
2005 2006 2007 2008 2009
Year
RATIO
Inference:
marketing strategies the institution is now efficient in producing its products. The
gross profit is sufficient to cover operating charges and to provide for fixed
charges.
54
3. Operating ratio:
Rs (in lakh)
YEAR OPERATING NET SALES RATIO
COST
96
94
92
90
88
2005 2006 2007 2008 2009
Year
RATIO
Inference:
Operating ratio shows an increasing trend till the year 2007 and then it declines
55
4. Current ratio:
Rs (in lakh)
YEAR CURRENT CURRENT RATIO
ASSETS LIABILITIES
2005 590.00 286.25 2.06
2006 692.21 409.73 1.68
2007 730.93 460.18 1.59
2008 675.21 408.89 1.65
2009 721.88 464.73 1.55
Source: Annual Report
2.5
Value
1.5
0.5
0
2005 2006 2007 2008 2009
Year
RATIO
Inference:
During the year 2005, the current ratio of the institution is relatively high which
indicates good liquidity position. It shows a declining trend and there is a slight
increase in the year 2008 and again decline in the year 2009.
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5. Stock Turnover ratio:
Rs (in lakh)
YEAR COST OF AVERAGE RATIO
SALES STOCK
0.8
0.6
0.4
0.2
0
2005 2006 2007 2008 2009
Year
RATIO
Inference:
Stock Turnover ratio shows a fluctuating trend. It decline till the year
2007 and increase in 2008 and again decline in the year 2009.
57
6. Debtors Turnover ratio:
Rs (in lakh)
YEAR NET TRADE RATIO
SALES DEBTORS
15
Value
10
0
2005 2006 2007 2008 2009
Year
RATIO
Inference:
Debtors’ turnover ratio is low in the year 2005. It increases in the year
2006 and again a slight fall can be seen in 2007. It shows a sudden increase in
58
7. Creditor’s Turnover ratio:
Rs (in lakh)
YEAR NET TREDE RATIO
PURCHASE CREDITORS
Year
RATIO
Inference:
During the year 2009 creditors’ turnover ratio is very low, indicating
59
8. Working Capital Turnover Ratio:
Rs (in lakh)
YEAR COST OF WORKING RATIO
SALES CAPITAL
1.5
Value
0.5
0
2005 2006 2007 2008 2009
Year
RATIO
Inference:
Working capital turnover ratio is increasing till the year 2008, and a
slight fall is there in the year 2009. it indicates the efficient utilization of
working capital.
60
9. Fixed Asset Turnover Ratio:
Rs (in lakh)
YEAR SALES NET RATIO
FIXED
ASSETS
2005 481.52 186.16 2.58
2006 496.76 210.86 0.86
2007 512.84 235.38 2.17
2008 631.65 734.47 2.36
2009 635.53 749.96 2.58
Source: Annual Report
3
2.5
Value
2
1.5
1
0.5
0
2005 2006 2007 2008 2009
Year
RATIO
Inference:
depreciation a sudden fall occurred in the next year. Then it shows a constant
61
4.3 TREND ANALYSIS
the financial data from year to year and enables the analyst to study horizontal
data.
The trend percentage enables the analyst to inter prêt growth pattern
and to determine the pattern of change from year to year. Trend calculations as
62
Rs (in lakh)
YEAR SALES PROFIT CURREN WORKING FUND
T ASSET CAPITAL FROM
OPERATIO
N
sales, profit, current asset, working capital and fund from operation are taken
into consideration for carrying out a trend analysis of the past 5 years, starting
from 2005-2009.
63
YEAR SALES TREND
Rs (in lakh) RATIO
800
600
SALES
400 TR(S)
200
0
2005 2006 2007 2008 2009
YEAR
Inference:
an increasing trend.
64
YEAR PROFIT TREND
(Rs. In lakh) RATIO
2005 3.01 100
2006 2.07 68.77
2007 3.21 106.64
2008 4.57 151.82
2009 100.56 3340.7
Source: Annual Report
VALUE (in lakh)
4000
3000
PROFIT
2000
TR(P)
1000
0
20052006200720082009
YEAR
Inference:
The profit trend is low in the year 2005. By the adoption of new
profit trend.
65
YEAR CURRENT ASSET TREND
Rs (in lakh) RATIO
800
600
400 CURRENT
ASSET
200 TR(CA)
0
2005 2006 2007 2008 2009
YEAR
Inference:
66
YEAR WORKING TREND
CAPITAL RATIO
Rs (in lakh)
400
350
300
WORKING
250
CAPITAL
200
TR(WC)
150
100
50
0
2005 2006 2007 2008 2009
YEAR
Inference:
67
YEAR FUND FROM TREND
OPERATION RATIO
Rs (in lakh)
2006 92.91 87
700
600
500 FUND FROM
400 OPERATION
300 TR
200
100
0
2005 2006 2007 2008 2009
YEAR
Inference:
constant level till 2007 and a sudden increase can be seen till 2009.
68
4.4 COMMON SIZE BALANCE SHEET
Inference:
The common size percentage of fixed assets is almost constant till the
year 2007 and then it increases. Common size percentage of current assets is
69
2. Common Size percentages of capital & reserves, fixed
CAPITAL&RESERVES,FIXED,CURRENT
LIABILITIES
100%
80% COMMON SIZE
PERCENTAGE OF
60% CURRENT LIABILITIES
40% COMMON SIZE
PERCENTAGE OF
20%
FIXED LIABILITIES
0% COMMON SIZE
2005 2006 2007 2008 2009 PERCENTAGE OF
CAPITAL &RESERVES
YEAR
Inference:
The common size percentages of capital & reserves are almost constant
till the year 2007 and then it increases till 2009. Fixed liabilities increase
during the period 2008-09 followed by a fall till 2009. A common size
70
CHAPTER 5
FINDINGS
SUGGESTIONS
&
CONCLUSION
71
5.1 FINDINGS
1) The increasing trend of profits can be seen from the trend analysis of
Khadi institution.
2) From the fixed asset turnover ratio it can be seen that the acquisition
rate of fixed assets is low. The machineries used are few; the work is
3) Khadi products make no compromise with the quality. KK& VIA has
They still have ready market and demand for their products.
4) From the common size percentage, it can be seen that the level of
6) Creditors’ turnover ratio is decreasing year after year and reaches 2.67
in the year 2007. The number of days they take to pay off the creditors
institution.
stored in their own store rooms. Non availability of these items in the
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5.2 SUGGESTIONS AND PERCEPTIONS
Provision for new charkas and looms will enable to increase the
enhance the production of hanks to 36 from the present level of 18-20 per
day.
weaving etc.will increase skill and efficiency of the spinners and weavers
and exposure visits to other units will bring in the weavers\spinners more
Common facility centre for ready made warp units for supply
activities.
than 20 years old and are in a very bad condition due to leakage, poor
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Organizing regular health medical camps for artisans and
products.
opening of few new outlets in strategic places. This will ensure marketing of
introducing new products into the market would achieve faster market,
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5.3 CONCLUSION
institution that covers a period of last five years. The objective of the project
study was to analyze and evaluate the overall performance of Kerala Khadi &
image. This study reveals that the management is efficient in tackling with the
satisfactory position.
the practical implication of the theoretical aspects. The study also helped to
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