Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
KOLKATA
DECLARATION
We hereby declare that this project is entitled ANALYSIS OF FINANCIAL STATEMENTS is an original piece of research work carried out by us.We state that no portion of this project report is published or submitted to any other organization. This study is the work of our own, for the fulfillment of our Summer Training Program. We hereby acknowledge that the information is genuine to the best of our knowledge.
Certificate of Guide
This is to certify that Avik Sarkar and Arunabha Sarkar students of USHA MARTIN ACADEMY, KOLKATA.They have successfully carried out their summer project titled, ANALYSIS OF FINANCIAL STATEMENTS at Usha Martin Ltd. Tatisilwai, Ranchi in the partial fulfillment of MBA course of University of PTU.Under my guidance and supervision. Under the Finance Coordination Department of USHA MARTIN LIMITED. During their association with the project We found them to be sincere, hardworking and loyal. We wish them a successful professional career.
FINANCE DEPARTMENT
ACKNOWLEDGEMENT
There are times when one feels a sense of accomplishment combined with a sense of gratitude. Writing the acknowledgement page in this project is one among them. This project would have been a distant dream without the grace of almighty. So, first and foremost, we, profusely thank god for his blessings and grace, without which my project would not have seen the light of the day. We would like thank HRD Manager, Mr. Arvind Kumar who provided us a golden chance for training and our especial thanks to Mr. Rajeev Singh for his guidance and appreciative support in spite of busy schedule at Usha Martin Limited. We wish to express our sincere thanks to our Prof. Partho Sarathi Roy for providing us valuable guidance and inputes which helped us to complete this project in true sense. We also extend to all the staff of finance department of Usha Martin Ltd. for their support, which helped us a lot in completing the project.
PREFACE
Summer Training is essential to get the practical orientation of theoretical knowledge and analysis of the business realities at the corporate level. This 8 weeks training procedure made us understand the working culture of the business organization.
The summer training in this reputed Company had been a challenging and exciting experience which brought us closer to the business organization.
Our Project topic is ANALYSIS OF FINANCIAL STATEMENTS (Wire Ropes and Speciality Product Division) in Finance department of USHA MARTIN LIMITED,TATISILWAI,RANCHI (JHARKHAND).
CONTENTS
EXECUTIVE SUMMARY OBJECTIVE & SCOPE OF THE INTERNSHIP STUDY COMPANY PROFILE RESEARCH METHODOLOGY THEORETICAL BACKGROUND FINANCIAL OVERVIEW OF USHA MARTIN LTD. DATA ANALYSIS & INTERPRETATION COMPERATIVE BALANCE SHEET COMPERATIVE INCOME STATEMENT TREND ANALYSIS FINDINGS CONCLUSION SUGGESTIONS LIMITATIONS OF THE STUDY BIBLIOGRAPHY 70 71
EXECUTIVE SUMMARY
This project named ANALYSIS OF FINANCIAL STATEMENTS was carried out at Usha Martin Ltd. to analyze and understand financial feasibility of the company in terms of liquidity, turnover, solvency, profitability etc. by using Ratio Analysis Technique. We chose to do this project at Usha Martin Ltd because it is a leading manufacturer of steel wires, wire ropes and other related product.The company formed in India in the early 1960s with the establishment of Usha Martin Industries Ltd. The Ratio Analysis Technique is the process of identifying the financial strength and weakness of the firm by properly establishing relationship between the items of the balance sheet and the profit & loss account because the figures recorded in the financial statements are absolutely incapable of revealing the soundness or otherwise of a companys financial position or performance. Thus the technique of Ratio Analysis has been used which is supposed to be powerful tool for financial statements. In Ratio Analysis Technique a ratio is used as a benchmark for evaluating the financial position and the performance of the firm.
This study confines itself to the analysis of Usha Martin Ltd. On the basis of comparative, common size and ratio analysis and the analysis covered a period of six years from 2005-06 to 2010-2011.
The data used in this analysis has been obtained from the annual reports i.e., Balance sheets and profit & loss Account.
COMPANY PROFILE
BACKGROUND COMPANY AND INCEPTION OF THE
Usha Martin Limited was started in 1961 in Ranchi (Jharkhand) as a wire rope manufacturing company. Today the Usha Martin Group is a Rs.3000 core conglomerate with a global presence. The products are, wire rods, bright bars, steel wires, specialty wires, wire ropes, strand, conveyor cord, wire drawing and cable machinery. Incorporated in 1960 Mr. B.K. Jhawar, the present chairman, pioneered it. It was promoted to manufacture steel and wires ropes in a collaboration with Martin Black of Scotland as a joint Indo-British venture. From 1st October 1997, this company has been merged with Usha Beltron Ltd which has been renamed as wire and wire ropes division, within which six companies are included.
Chairman Director Director Director Director Director Director Director Managing Director Jt. Managing Director
Mr. Prashant Jhawar Mr.Brij K Jhawar Mr. N. J. Jhaveri Mr. U.V. Rao Mr. A. K. Chaudhuri Mr. Suresh Neotia Mr. Ashok Basu Mr. Salil Singhal Mr. Rajeev Jhawar Dr. P. Bhattacharya
Board of director
Quality policy: Providing product & services that meet customer expectation . Continual improvement to our quality management system and process. Fostering the professional development of our employee. Our suppliers and customers are our partner in progress.
Competitors information
Tisco, Jamshedpur Musco, Mumbai Rinl, Vizag Facor, Nagpur
INFRASTRUCTURAL FACILITIES
Accommodation for employees at lower rates Officers and Workers association Medical, Fooding & Transportation facility etc. One guest house
Strengthening of exports with an emphasis on consolidating Usha Martin presence in existing market while tapping new regions for export of value added products. Cost control efforts including better logistics, higher operating efficiencies and improved working capital management.
STRENGTH: 1.Satisfied and loyal customers 2.Brand name 3.Strong technology 4.Research & development wing
WEAKNESS: 1.High overheads and fixed cost 2.Adverse age mix of workers and high average wage 3.Being a private sector, emphasis is more on welfare measures rather than productivity THREATS: 1.Competition 2.Upgraded technology used by other manufacturer helps in supplying the rates which could it the market share
OPPORTUNITY: 1.Growing in iron and steel market 2.Cost advantage with the adoption of sophisticated technology
RESEARCH METHODOLOGY
Data Collection Methods Sources of data can be classified into two types they are: Primary data Secondary data Primary data: Primary data may be described as those data that has been observed by the researchers for the first time. The primary data was obtained through personal interaction with company officials during the internship period.
Secondary data: Secondary data are those data that have been complied already before conducting the research. Secondary data may be internal data as well as external data. Internal data are collected from the companys records. External data are collected from outside the company. The various sources of secondary data are, Annual reports and financial statements of the company like (balance sheet and profit and loss account) Company websites Sampling Size Sample size used in this project study relates to the financial figures, covering the period from 2005-06 to 2010-11. Each data was already checked and verified by the charted accountant; hence the data is straightaway taken for analysis. The data is collected from the final account statements. Comparatively covers the study purpose, no samples are required for the study as it is
Theoretical background
Analysis of Financial Statement: Financial statements analysis is A process of evaluating financial and profitable position of an organization by comparing two or more homogeneous figures and interpreting thereof. According to this definition, analysis of financial statement is a process by which management will make an effort to draw conclusion on financial and profit position of an organization. In order to do this process, one has to make
comparison of homogeneous figures provides certain information with which inference or conclusion can be drawn. Objective of Analysis of Financial Statement: To estimate the earning capacity and to decide the future prospective of the firm To determine the debt capacity of the firm and the long terms liquidity of the funds as well as solvency To gouge the financial position and financial performance of the firm Basic of Financial Statements: Balance Sheet Income Statement Cash Flow Statement
Tools or Methods of Financial Analysis: Comparative financial statement analysis Common size financial statement analysis Comparative trend percentage Ratio analysis Fund flow analysis Cash flow analysis
Financial Analysis
On the basis of concerned parties basis of time period of study I Internal Analysis Analysis External Analysis Vertical Analysis
On the
Horizontal
Ratio analysis
A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years. Advantages of ratio analysis: It simplifies the comprehension of financial statements.Ratios tell the whole story of changes in the financial condition of the business. It provides data for inter-firm comparison. It helps in planning and forecasting.Ratios can assist management, in its basic functions of forecasting, planning, control and communication. Proper ratio analysis can give signal of corporate sickness in advance. Limitations of Ratio analysis: Ratios are generally computed from past financial statements and are not true indicators of the future. Ratios are only meanse of financial analysis and not an end in itself.Ratios have to interpret and different people may interpret the same ratio in different way. The ratios of other organization may not be readily available. Ratio analysis often gives misleading picture. Interpretation of ratios: Interpretation of ratios can be made in following ways Intra firm comparison: Here the ratios of one organization may be compared with the ratios of the same organization for the various years either the previous years or the future years. Iner firm comparison: The ratios of one organization may be compared with the ratios of other organization in the same industry and such comparison will
be meaningful as the various organization, in the same industry may be facing similar kinds of financial problems. The ratios of an organization may be compared with some standards, which may be supposed to be the thum-rule for the evaluation of the perpormance.
Classification of ratios Liquidity Ratio Leverage Ratio / Solvency Ratio Profitability Ratio Efficiency Ratio / Turnover Ratio
Liquidity Ratio: Liquidity ratio measures the firms ability to meet itscurrentobligations i.e. ability to pay its obligations and when they become due. Commonly used ratios are: Current Ratio: Current ratio is the ratio, which express relationship between current asset and current liabilities. Current asset are those which can be convertedinto cash within a short period of time, normally not exceeding one year. Thecurrent liabilities which are short- term maturing to be met. It is calculated by following formulaCurrent Ratio = Current Assets / Current Liabilities
Acid Test Ratio / Quick Ratio: The acid test ratio is a measure of liquidity esigned overcome the Defect of current ratio. It is often referred to quick ratio because it is a measurement of firms ability convert its current assets quicklyinto cash in order to meet current liabilities. It is calculated by following formulato as to its
Leverage or Solvency ratio: Leverage or solvency ratios are the ratios, which indicate the relative interest of the owners and the creditors in an enterprise. These ratios indicate the funds provided by the long-term creditors and owners. To judge the long term financial position of the firm following ratios are applied. Debt Equity Ratio: Debt-equity ratio which expresses the relationship between debt andequityThis ratio explains how far owned funds are sufficient to pay outside liabilities. It is calculated by following formulaDebt- Equity Ratio= Debt / Equity OR Long Term Loans / Shareholders Fund
Total Assets to Debt Ratio: This ratio is a variation of the debt-equity ratio and gives the same indication as the debt-equity ratio. In this ratio, total assets are expressed in relation to long term debts . It is calculated by following formulaTotal Assets to Debt Ratio= Total Assets/Debt or Long Term Loans
Proprietary Ratio: This ratio indicates the proportion of total assets funded by owners or shareholders. It is calculated by following formulaProprietary Ratio= Equity(Shareholders Fund) / Total Assets
Reserve to Capital Ratio: This ratio indicates the relationship between reserves and capital. More reserve shows financial soundness of the firm, because it will be able to meet future losses, if any out of reserves. It is calculated by following formulaReserve to capital ratio = Reserve/Capital
Debtors Turnover Ratio: Ratio of net credit sales to average trade debtors is called debtors turnover ratio. It is also known as receivables turnover ratio. This ratio is expressed in times. It is calculated by following formula-
Debtors Turnover Ratio = Net credit sales/Average debtors Average debtors = (opening debtor + closing debtor)/2
Working Capital Turnover Ratio: This ratio measures the relationship between working capital sales. This ratio shows the number of times the working capital result in sales. It is calculated by following formulaWorking Capital = Current assets Current Liabilities Working Capital Turnover Ratio = Net Sales/ Working Capital
Inventory Turnover Ratio or Stock Turnover Ratio: Inventory turnover ratio or Stock turnover ratio indicates the velocity with which stock of finished goods is sold i.e. replaced. Generally it is expressed as number of times the average stock has been "turned over" or rotate of during the year. It is calculated by following formulaInventory Turnover ratio= Net Sales/Average Stock Cost of Goods Sold/ Average Stock Average Stock = Opening Stock + Closing Stock/2 or
Average Collection Period: The average collection period ratio represents the average number of days for which a firm has to wait before its debtors are converted into cash. It is calculated by following formulaAverage collection period = (average debtors/credit sales)365
Fixed Assets Turnover Ratio: Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit earning capacity of the concern.Higher the ratio, greater is the intensive utilization of fixed assets. Lower ratio means underutilization of fixed assets. It is calculated by following formulaFixed Assets Turnover Ratio=Cost of Goods or Net Sales/Net Fixed Assets
Current Assets Turnover Ratio: It indicates the capability of the organization to achieve maximum sales with the maximum investment in current assets. It indicates that the current assets are turned over the form of sales more number of times. It is calculated by following formulaCurrent Assets Turnover Ratio= net sales/current assets Payable Turnover Ratio/Creditors Turnover Ratio: It is a ratio of net credit purchases to average trade creditors. Creditors turnover ratio is also known as payables turnover ratio. It is calculated by following formulaPayable Turnover Ratio= Net Credit Annual Shift/ Average trade Creditors Profitability Ratio: Gross Profit Ratio: This is the ratio of gross profit to net sales and is expressed if percentage. It is calculated by following formulaGross profit Ratio = (gross profit/net sales)*100 Net Profit Ratio: This is the ratio of net profit to sales and is usually expressed in percentage. It is calculated by following formulaNet profit ratio = Net profit/Net sales 100
This is the ratio of operating profit to sales and is expressed in percentage. It is calculated by following formulaOperating Profit Ratio= Operating Profit /Net Sale * 100
Return On Investment(ROI): Return on shareholders investment, popularly known as ROI or return on share holder/proprietors funds is the relationship between net profit(after interest & tax) and the proprietors funds. It is calculated by following formulaReturn On Investment = Profit Interest/Shareholders Fund*100 Return on Equity Capital(ROE): The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. It is calculated by following formulaROE= Net Profit After Tax, Interest Dividend/Equity Share Capital*100 Earning Per Share: E.P.S is a small variation of return on equity capital and is calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares. It is calculated by following formulaEarning Per Share= Net profit after tax preference dividend/no of share equity. & Preference Before Tax &
Dividend Per Share: Net profit after taxes belongs to shareholders out of which dividend is declared. The dividend per share is the earnings distribution to equity shareholders dividend by the number of equity shares. It is calculated by following formulaDividend Per Share= dividend paid equity shareholders/number of equity share
SOURC ES OF FUNDS Sharehol ders Funds Capital 221,92 0 Equity 88,740 240,04 5 33,278 250,92 0 334,95 250,92 0 305,42 0 305,42 0
Warrants Reserve s & Surplus 5,605, 048 5,915, 708 6,936, 730 7,210, 053
0 8,404, 090 8,989, 960 9,911, 836 10,162 ,756 14,691 ,498 14,996, 918 15,265 ,132 15,570 ,552
Loan Funds Secured Loans Unsecur ed Loans Net Deferred Tax Liability 14,126 ,887 APPLIC ATION OF FUNDS Fixed Assets Gross Block Less: Dep. Impairm ent Loss Net 14,914 ,639 5,879, 443 188,02 4 8,847, 15,739 ,283 6,551, 753 187,45 1 9,000, 16,807 ,170 7,209, 382 140,83 5 9,456, 19,383 ,467 8,018, 284 140,83 5 11,224 31,707 ,230 9,074, 962 140,83 5 22,491 38,442 ,328 10,826 ,337 140,83 5 27,475 16,138 ,122 19,889 ,690 26,045 ,312 25,089, 119 33,811 ,362 1,335, 064 1,434, 331 1,467, 708 1,221, 053 1,691,0 17 2,148, 748 6,717, 748 158,36 7 6,876, 115 7,441, 398 52,340 7,493, 738 8,670, 608 761,41 4 9,432, 022 14,661 ,503 _____ _____ 14,661 ,503 8,401,1 84 16,092 ,062 -
Block Capital WIP Investme nts Currents Assets, Loans & Adv. Inventori es Sundry Debtors Cash & Bank Balances Other Current Assets Loans & Advance s
225,64 0
260,94 2
340,48 6
239,62 1
338,62 0
371,29 6
1,648, 665
2,119, 931
4,024, 216
2,780, 155
2,505, 980
2,537, 283
6,995, 953 Less: Current Liabilities & Prov. Liabilities 3,769, 487 Provision 210,10
8,411, 333
12,715 ,995
11,050 ,106
11,343 ,561
16,500 ,015
9 3,979, 596
Net Current Assets Miscella neous Expendit ure Deferred Revenue Exp.
41,988
30,427
16,139
7,302
______ _____
_____ _____
14,126 ,887
16,138 ,122
19,889 ,690
26,045 ,312
25,089, 119
33,811 ,362
INCOME Turnover (Gross) Less: Excise Duty Turnover (Net) Other Income 13,771,836 1,453,958 12,317,878 94,846 12,412,724 15,737,419 1,651,372 14,086,047 143,261 14,229,308 18,527,701 1,968,714 16,558,987 156,401 16,715,388 23,072,056 1,799,803 21,272,253 135,315 21,407,568 19,600,263 1,096,408 18,503,855 201,639 18,705,494 27,422,354 2,155,334 25,267,020 272,785 25,539,805
EXPENDITURE Purchase Of General Merchandise Raw Materials Consumed (Increase)/Decre ase in stock in trade Manufacturing, Selling & Adm. Exp. Depreciation Interest Adjustment for Items Capitalized & Departmental Orders for Own Consumption -42,136 11,405,339 -24,268 12,845,348 -93,642 14,708,261 -129,843 19,267,156 -164,597 17,313,459 -30,271 24,086,811 9,616 15,302 19,899 35,489 59,486 37,559
5,250,697
5,816,061
7,478,097
9,336,337
8,204,052
10,681,517
-155,097
-238,579
-295,476
-208,849
-809,038
-1,356,533
4,850,660
5,801,012
6,036,422
8,150,137
7,820,703
11,247,331
760,996 730,603
762,804 713,016
759,209 803,752
850,402 1,233,483
1,072,517 1,130,336
1,764,869 1,742,339
PROFIT BEFORE TAXATION Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax
1,007,385
1,383,960
2,007,127
2,140,412
1,392,035
1,452,994
469,964
457,731
85,000 12,200
258,600 11,333
510,300 11,800
910,000 11,500
260,544
99,267
36,700
-246,655
_______________ _ 922,071
______________ _ 995,263
PROFIT AFTER TAXATION Debenture Redemption Reserve Written Back Profit brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATIONS APPROPRIATIONS Transfer to General Reserve Proposed Div. on Equity Shares Prov. For Div. Tax Balance Carried to Balance Sheet
649,641
1,014,760
1,448,327
1,465,567
806,050
403,112
414,004
209,186
420,792
343,588
411,209
1,052,753
1,428,764
2,463,563
1,886,359
1,265,659
1,406,472
500,000
1,000,000
1,750,000
1,250,000
500,000
500,000
121,683
187,681
250,242
250,242
304,742
304,742
17,066
31,897
42,529
42,529
49,708
47,319
414,004
209,186
420,792
343,588
411,209
554,411
1,052,753
1,428,764
2,463,563
1,886,359
1,265,659
1,406,472
Current Assets Inventories 26,21,66 7 19,82,49 2 5,17,489 2,25,640 33,90,55 1 22,69,10 4 3,70,805 2,60,942 53,24,18 1 25,63,50 5 4,63,607 3,40,486 40,37,100 6,721,045 9,626,573
Sundry debtors
32,28,548
1,764,942
2,834,779
7,64,682 2,39,621
102,974 338,620
1,130,084 371,296
16,48,66 5 69,95,95 3
21,19,93 1 84,11,33 3
40,24,21 6 1,27,15,9 95
27,80,155
2,505,980
2,537,283
1,10,50,1 06
11,343,56 1
16,500,01 5
Current Liabilities Liabilities 37,69,48 7 2,10,109 39,79,59 6 46,12,54 3 2,62,565 48,75,10 8 86,09,57 6 3,81,723 89,91,29 9 98,12,920 16,257,55 0 441,785 16,699,33 5 15,445,85 9 412,272 15,858,13 1
3,73,392 1,01,86,3 12
Ratio = A/B
1.76:1
1.73:1
1.41:1
1.08:1
0.68:1
1.04:1
Comments: The current ratio of UML is 1.76:1, 1.73:1, 1.41:1, 1.08:1, 0.68:1, 1.04:1 in the financial year 2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011.We know that the standard current ratio applicable to the Indian Industry is 1.33:1.Here the current ratio of UML is very satisfactory in 2005-2006, 2006-2007 and 2007-2008.The current assets are on an increased in this three years and firm has got sufficient assets to pay short term liabilities. But in the year 2008-2009, 2009-2010 and 2010-2011 the current assets has been declined to 1.08:1, 0.68:1 and 1.04:1 because of decrease in current assets and increase in current liabilities. The current assets has been declined because the major fluctuate components of current assets i.e. Inventories decreased to 40,37,100 in the year 2008-2009, Cash & Bank decreased to 1,02,974 in the year 2009-2010 and loan & advance has also decreased to 25,37,283 in the year 2010-2011.
Acid Test Ratio / Quick Ratio: Acid Test Ratio= Liquid Assets / Current Liabilities Format 2 ( Rs. In Thousand)
PARTICULARS 20052006 20062007 20072008 2008-2009 20092010 20102011
Current assets
6995953
84,11,333
1,10,50,10 6 40,37,100
Less:-stock
2621667
33,90,551
Liquid assets(A)
4374286
50,20,782
70,13,006
Current liabilities(B)
3979596
48,75,108
89,91,29 9
1,01,86,31 2
16,699,3 35
15,858,1 31
Ratio = A/B
1.10:1
1.03:1
0.82:1
0.69:1
0.28:1
0.43:1
Comments: The quick ratio of 1:1 is considered to be ideal and standared.Here above table and format shows that the quick ratio of UML is very satisfactory in 2005-06 & 2006-07 because it is more than 1:1.As UML has shown the quick ratio of 1.10:1 & 1.03:1 in the year 2005-2006 & 2006-2007 it is indicating the availability of sufficient quick assets to manage the current liabilities. But in 2007-08,2008-09,2009-2010 & 2010-2011 it has been declined to 0.82:1,0.69:1,0.28:1 & 0.43:1 respectively, because of increase in current liabilities.
Leverage or Solvency ratio: Debt- Equity Ratio: Debt- Equity Ratio= Debt / Equity OR Long Term Loans / Shareholders Fund Format 3 ( Rs. In Thousand)
PARTICULARS 2005-2006 20062007 20072008 2008-2009 20092010 20102011
Debt Secured Loan 67,17,748 74,41,398 86,70,60 8 7,61,414 14,67,70 8 1,08,99,7 30 2,50,920 1,46,61,50 3 12,21,053 1,691,01 7 10,092,2 01 305,420 2,148,748 8,401,18 4 16,092,06 2
1,58,367 13,35,064
52340 14,34,331
82,11,179
89,28,069
1,58,82,55 6 2,50,920
18,240,81 0 305,420
2,21,920
2,40,045
56,05,048
69,36,730
99,11,836
58,26,968
71,76,775
1,01,62,75 6 1.56:1
Ratio = A/B
1.41:1
1.24:1
Comments: The above table and format shows that the debt equity ratio of UML is 1.41:1 in year 2005-06 which has been declined to
1.24:1 in year 2006-07. In 2007-08 & 2008-09 it has increased to 1.26:1 & 1.56:1. The reasons being continuous increase in secured loans and reserves & surplus and decrease in unsecured loans. But in the year 2009-2010 & 2010-2011 again it has been declined to 0.67 & 1.17 respectively. Because in
2009-2010 secured loans has decreased and 2010-2011 deferred tax liability has decreased. Total Assets to Debt Ratio: Total Assets to Debt Ratio= Total Assets/Debt or Long Term Loans Format 4 ( Rs. In Thousand)
PARTICULARS 20052006 20062007 20072008 20082009 20092010 20102011
Assets Current Assets 69,95,953 84,11,33 3 1,09,70,6 65 1,93,81,9 98 1,27,15,9 95 1,44,90,8 41 2,72,06,8 36 1,10,50,1 06 2,33,10,7 00 3,43,60,8 06 11,343,5 61 28,575,3 80 3,99,18,9 41 16,500,0 15 31,299,9 65 4,77,99,9 80
Fixed Assets
95,42,787
Total Assets(A)
1,65,38,7 40
Debt Secured Loan 67,17,748 74,41,39 8 52340 14,34,33 1 89,28,06 9 86,70,60 8 7,61,414 14,67,70 8 1,08,99,7 30 1,46,61,5 03 12,21,05 3 1,58,82,5 56 1,691,01 7 10,092,2 01 2,148,74 8 18,240,8 10 8,401,18 4 16,092,0 62
1,58,367 13,35,064
82,11,179
Ratio = A/B
2.01:1
2.17:1
2.50:1
2.16:1
3.96:1
2.62:1
Comments: The above table and format shows that the total assets to debt ratio is increasing from 2.01:1 to 2.50:1 in the year 2005-06 to 2007-08 & Once again increased to 3.96:1 in the year 20092010.Because the fixed assets are on an increasing trend throughout the six years. But decreased to 2.16:1 & 2.62:1 in the year 2008-09 & 2010-2011.Because the current assets decreased in 2008-2009 and deferred tax liability decreased in 2010-2011.Secured loans are on an increasing trend and
unsecured loans are on an decreasing trend throughout the six years. Proprietary Ratio: Proprietary Ratio= Equity(Shareholders Fund) / Total Assets Format 5 ( Rs. In Thousand)
PARTICULARS 20052006 20062007 20072008 20082009 20092010 20102011
Shareholders Funds Capital Equity warrants Reserve and Surplus 2,21,920 88740 56,05,04 8 2,40,045 33278 69,36,73 0 2,50,920 3,34,950 84,04,09 0 2,50,920 99,11,83 6 14,691,4 98 15,265,1 32 305,420 305,420
Total(A)
Current Assets
Fixed Assets
Total Assets(B)
Ratio = A/B
0.36:1
0.37:1
0.33:1
0.30:1
0.38:1
0.33:1
Comments: The above table and format shows that the proprietary ratio of UML increased from 0.36:1 to 0.37:1 from year 2005-06 to 2006-07 and once again increase 0.38:1 in 2009-2010 & decrease to 0.33:1, 0.30:1 & 0.33:1 in 2007-08, 2008-09 & 2010-2011.The share capital increased in first three years then it was stable again it was increased in 2009-2010 then it was stable. The reserve increased in all six years. The current assets increased in five years except it decreased in 2008-
2009. The fixed asset shows an increasing trend from 2005-06 to 2010-11. Reserve to Capital Ratio: Reserve to capital ratio = Reserve/Capital Format 6 ( Rs. In Thousand)
PARTICULA RS 20052006 20062007 20072008 2008-2009 20092010 20102011
Reserve(A)
56,05,048
69,36,730
84,04,090
99,11,836
14,691,49 8 305,420
15,265,13 2 305,420
Capital(B)
2,21,920
2,40,045
2,50,920
2,50,920
Ratio = A/B
25.26:1
28.90:1
33.49:1
39.50:1
48.1:1
49.98:1
Comments: The above table and format shows that the reverse to capital ratio of UML increased from 25.26:1 to 49.98:1 from the year 2005-2006 to 2010-2011.It is showing increasing trend in the reserve to capital ratio.
Efficiency ratio or turnover ratio: Debtors Turnover Ratio: Debtors Turnover Ratio = Net credit sales/Average debtors Format 7 In Thousand)
PARTICULARS 20052006 20062007 20072008 20082009 20092010
( Rs.
20102011
Credit sales(A)
1,23,17,8 78
1,40,86,0 47
1,65,58,9 87
2,12,72,2 53
18,503,85 5
25,267,02 0
Opening debtor
25,13,970
3,228,548
1,674,942
Add:-closing debtor
19,82,492
1,674,942
2,834,779
Total debtor(B)
44,96,462
4,903,490
4,509,721
22,48,231
21,25,79 8
24,16,30 5
2896027
2,451,745
2,254,860 .50
Ratio = A/C
5.48 times
6.63 times
6.85 times
7.35 times
7.55 times
11.2 times
Comments: The above table and format shows the increasing trend of debtors turnover ratio of UML. Debtors turnover ratio which measures whether the company has been efficient in
converting debtors into cash. Higher the ratio, better the position. This shows that money is being quickly recovered from the debtors. The ratio in case of UML is very high i.e. the company is in very good position and it has resulted from efficient credit management system.
Working Capital Turnover Ratio: Working Capital Turnover Ratio = Net Sales/ Working Capital Format 8 In Thousand)
PARTICULARS 20052006 2006-2007 2007-2008 2008-2009 2009-2010
( Rs.
2010-2011
Gross sales
Current Assets
69,95,953
84,11,333
1,27,15,99 5 89,91,299
39,79,596
48,75,108
30,16,357
35,36,225
37,24,696
Ratio = A/B
4.08 times
3.98 times
4.45 times
24.63 times
(3.45 times)
39.4 times
Comments:
The above table and format shows that the working capital turnover ratio is 4.08 times in the year 2005-06 which has been decreased to 3.98 times in the year 2006-07. The ratio increased to 4.45 times & 24.63 times in the year 2007-08 & 2008-09 respectively.But in 2009-2010 it has been decreased to (3.45) times and then in 2010-2011 it has been increased to 39.4 times.The financial year 2005-2006,2007-2008,2008-2010 & 20102011 show excellent ratio as the company was abale to achive maximum sales with less investment in working capital which shows better working
to maitain the past records due to increased in current liabilities and fall in sales respectively.
Inventory Turnover Ratio or Stock Turnover Ratio: Inventory Turnover ratio= Net Sales/Average Stock Cost of Goods Sold/ Average Stock Format 9 Thousand)
PARTICULA RS 20052006 2006-2007 20072008 2008-2009 2009-2010
or
( Rs. In
2010-2011
Net sales(A)
1,23,17,8 78
1,40,86,04 7
1,65,58,9 87
2,12,72,25 3
18,503,85 5
25,267,02 0
28,40,534
26,21,667
33,90,551
53,24,181
6,721,045
67,21,045
26,21,667
33,90,551
53,24,181
40,37,100
4,037,100
96,26,573
54,62,201
60,12,218
87,14,732
93,61,281
10,758,14 5
16,347,61 8
27,31,101
30,06,109
43,57,366
46,80,641
5,379,073
81,73,809
Ratio = A/C
4.51 times
4.69 times
3.80 times
4.54 times
3.44 times
3.09 times
Comments: The above table and format shows that the inventory turnover ratio is 4.51 times in the year 2005-06 which has been increased to 4.69 times in the year 2006-07. In the year 200708 inventory turnover ratio decreased to 3.80 times and which has been increased to 4.54 times in the year 2008-09.Again in the year 2009-2010 & 2010-2011 which has been decreased to 3.44 times & 3.09 times respectively. This ratio indicates how fast the inventory is converted into sales. Here high ratio implies good inventory management. In the year 2005-06, 2006-07 & 2008-2009 the inventory management is good. But it decreased in the year 2007-08, 2009-2010 & 2010-2011 it the sign of inefficient inventory management.
Average Collection Period: Average collection period = (average debtors/credit sales)365 Format 10 Thousand)
PARTICULARS 20052006 20062007 20072008 20082009 20092010
( Rs. In
20102011
Opening debtor
25,13,97 0 19,82,49
19,82,49 2 22,69,10
22,69,10 4 25,63,50
25,63,50 5 32,28,54
1,674,94 2 3,228,54
16,74,94 2 28,34,77
Add:-closing
2 44,96,46 2
4 42,51,59 6
5 48,32,60 9
8 57,92,05 3
8 49,03,49 0
9 45,09,72 1
22,48,23 1
21,25,79 8
24,16,30 5
2896027
24,51,74 5
22,54,86 0.5
Credit sales(C)
1,23,17,8 78
1,40,86, 047
1,65,58,9 87
2,12,72,2 53
18,503,8 55
25,267,0 20
ACP = (B/C)365
66 days
55 days
55 days
51 days
49.00 days
33.00 days
Comments: As a standard, debtor days. Debtor collection study period because control managers. It collection period is not more than 90 period of UML is satisfactory during the efficient collection work from credit fluctuates widely due to change in
economic condition. The overall the average period during the study period is below 90 days which shows consistent position.
Fixed Assets Turnover Ratio: Fixed Assets Turnover Ratio=Cost of Goods or Net Sales/Net Fixed Assets Format 11 Thousand)
PARTICULARS 20052006 12317878 20062007 14229308 20072008 1655898 7 20082009 2127225 3 20092010 18,503,85 5
( Rs. In
20102011 25,267,02 0
Net Sales
Fixed Assets Gross Block 14914639 15739283 1680717 0 7209382 1938346 7 8018284 31,707,23 0 9,074,962 38,442,32 8 10,826,33 7 140,835 27,475,15 6 3,824,809
(-)Depreciation
5879443
6551753
188024 8847172
187451 9000079
140835 9456953
695615
1970586
5033888
95442787
10970665
1449084 1 1.14
28,575,38 0 0.65
31,299,96 5 0.81
Ratio(A/B)
1.29
1.29
Comments: The fixed assets turnover ratio from the year 2005-2006 to 2010-2011 have decreased from 1.29 to 0.81 which is not good for the company but we hope that in future company will overcome this situation.
Current Assets Turnover Ratio: Current Assets Turnover Ratio= net sales/current assets Format 12 Thousand)
PARTICULARS 2005-2006 20062007 1408604 7 8411333 20072008 1655898 7 1271599 5 1.3 20082009 2127225 3 1105010 6 1.92 20092010 18,503,8 55 11,343,5 61 1.63
( Rs. In
20102011 25,267,0 20 16,500,0 15 1.53
Net Sales(A)
12317878
6995953
1.76
1.67
Comments: The current assets turnover ratio from 2005-2006 to 20102011 the ratio is to 1.76 to 1.53 due to the increase and decrease in the net sales or turnover of UML because of market condition and usha martin policies.
Payable Turnover Ratio/Creditors Turnover Ratio: Payable Turnover Ratio= Net Credit Annual Shift/ Average trade Creditors Format 13 Thousand)
PARTICULARS 20052006 20062007 20072008 20082009 20092010
( Rs. In
20102011
Net credit purchase(A) Pur. of gen. Merchandise (+)purchase 9616 15302 19899 35489 59,486 37,559
5146539
6175534
8996556
8085302
9.503,24 9 9562735
11,484,66 7 11522226
5156155
6190836
9016455
8120791
1701248 3563390
2449171 4389299
3177594 8352740
2743248 9476334
2701510 14674375
3868203
3976344. 5
6371019. 5
Ratio = A/B
1.33 times
1.56 times
1.42 times
0.78 times
Comments: The creditors turnover ratio of UML is 1.33 times,1.56 times, 1.42 times ,0.91 times,0.76 times & 0.78 times in financial year 2005-06,2006-07,2007-08,2008-09,2009-2010 & 2010-2011 respectively. The analysis for creditors turnover is basically the same as of debtors turnover ratio expect that in place of average daily sales.
( Rs. In
20092010 20102011
Gross Profit (A) Net Profit (+)selling & Distribution exps. (+)Interest (-)Income Total (A) 649641 4850660 1014760 5801012 1448327 6036422 1465567 8150137 922071 7820703 995263 1124733 1 1742339 272785 1371214 8 2526702 0 54.3
NET sales(B)
1231787 8 49.81
1408604 7 52.43
1655898 7 49.11
1850385 5 52.3
Comments: G/P ratio is one of the very important ratio for measuring profitability of a firm low gross profit ratio ,generally indicates high cost of goods sold due to lesser sales, lower selling prices, excessive competition, over- investment in plant and machinery. Here G/P ratio of UML increasing order in the year 2005-2006, 2006-2007,2008-2009,2009-2010 & 2010-2011 but decreased in 2007-2008 due to increased in expenditure.
Net profit(A)
6,49,641
10,14,760
14,48,327
14,65,567
922,071
9,95,263
Net sales(B)
1,23,17,87 8
1,40,86,0 47
1,65,58,9 87
2,12,72,25 3
18,503,85 5
25,267,02 0
Ratio = A/B100
5%
7%
9%
7%
5%
4%
Comments:
The above table and format shows that the net profit ratio is in the increasing order in the year 2005-06, 2006-07 & 2007-08. But it decreased to 7%,5% & 4% in the year 2008-09,20092010 & 2010-2011 due to the increase in the expenditure.
Operating Profit Ratio: Operating Profit Ratio= Operating Profit /Net Sale * 100 Format 16 Thousand)
PARTICULARS 20052006 20062007 20072008 20082009
( Rs. In
20092010 20102011
Operating Profit (A) Gross Profit 6136058 7385527 8132100 1071387 2 8150137 1371214 8 7820703 9671471
4850660
5801012
6036422
1850768 1850385 5 10
Comments: The above table and format shows that the operating profit ratio of UML is showing increasing trend from 2005-2006 to 2008-2009.But in 2009-2010 & 2010-2011 which has been decreased to 10 & 9.8 respectively due to in 2009-2010 net
sales has been decreased and 2010-2011 gross profit has been decreased.
Before
Tax ( Rs. In
&
PBT (+) Interest PBIT(A) Shareholders fund(B) Capital Equity Warrent Reserve and surplus Total(B)
5915708
7210053
8989960
10162756
Ratio(A/B)*100
29.38
29.08
31.26
33.2
16.8
20.5
Comments: As we know that ROI is one of the most important ratios to measures the overall efficiency of a firm. The above table and
format shows that the ROI of UML is showing increasing trend from 2005-2006 to 2008-2009.But in 2009-2010 & 2010-2011 which has been decreased to 16.8 & 20.5 respectively due to PBIT & Capital has been decreased.
Return on Equity Capital(ROE): ROE= Net Profit After Tax, Interest Dividend/Equity Share Capital*100 Format 18 Thousand)
PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009
&
Preference ( Rs. In
2009-2010
20102011 995,263
Net Profit After Tax(A) Net Worth(B) Capital Reserve & Surplus Total(B)
649,641
1,014,760
1,448,327
1,465,567
922,071
2,21,920 56,05,048
2,40,045 69,36,730
2,50,920 84,04,090
2,50,920 99,11,836
58,26,968
71,76,775
86,55,010
1,01,62,75 6
Ratio=A/B*100
11.1
14.1
16.7
14.4
6.1
6.4
Comments: This ratio indicates what percentage of profit earned by the equity shareholders.ROE helps to determine the market price
of equity shares of the company while comparing with the ratios of other companies. The above table and format shows that the ROE of UML is showing increasing trend from 20052006 to 2007-2008. But in 2008-2009, 2009-2010 & 2010-2011 which has been decreased due to net profit after tax has been decreased and in 2008-2009 capital was stable and again capital has increased in 2009-2010 and then once again it was stable in 2010-2011.
Earning Per Share: Earning Per Share= Net profit after tax preference dividend/no of share equity.
Format 19 Thousand)
PARTICULARS 20052006 649641 4787335 6 20062007 1014760 4787335 6 20072008 1448327 2502417 80 20082009 1465567 2502417 80
( Rs. In
20092010 922071 3047417 80 20102011 995263 3047417 80
Ratio = (A/B)*100 (in times) 1.36 2.12 0.58 0.59 0.3 0.33
Comments: E.P.S play a vital role to know about the net earning power of the company. If the E.P.S of the company increased, net earning power of the company also increased. From the above calculation we can says that during 2005-2006 E.P.S was 1.36 but in 2006-2007 E.P.S was 2.12.So compare to 2005-2006 and 2006-2007,it can be seen that net earning power of the company has increased in 2006-2007.Again in 2007-2008, E.P.S was decrease up to 0.58 and in the year 2008-09 it again increase to 0.59.Again in 2009-2010, E.P.S was decreased up to 0.3 & in the year 2010-2011 it again increased to 0.33.By seeing the past record we can say that after the year 20062007 E.P.S of UML is not good.
Format 20 Thousand)
PARTICULARS 20052006 20062007 20072008 20082009
( Rs. In
20092010 20102011
Dividend paid to equity shareholders(A) Number of equity shares(B) 121683 187681 250242 250242 304742 304742
47873356
4787335 6
25024178 0
2502417 80
3047417 80
3047417 80
Comments: In the year 2005-2006 the DPS was 2.54 and in year 2006-2007 it was 3.92, but in the years 2007-2008,2008-2009,2009-2010 & 2010-2011 it decreased to Re.1 .The reason behind this is Usha Martin issuing its shares at Rs. 5/share. But from 2007-08 Usha Martin issuing its share into Re.1/share.
Particulars
31-03-2011
31-03-2010
ABSOLUTE CHANGES
CHANGES In %
SOURCE OF FUNDS Shareholders Funds Capital Equity warrants Reserve and Surplus 305,420 15,265,132 305,420 14,691,498 5,73,634 3.90
Loan Funds: Secured Loans Unsecured Loans Net Deferred Tax Liabilities Total APPLICATION OF FUNDS Fixed Assets: Gross Block Less: Depreciation Impairment Loss Net block Capital Work In Progress Investment Current assets, Loans and advances: Inventories Sundry Debtors Cash and Bank Balance Other Current Assets Loans and Advances Total current assets 9,626,573 2,834,779 1,130,084 371,296 2,537,283 16,500,015 6,721,045 1,674,942 102,974 338,620 2,505,980 11,343,561 29,05,528 11,59,837 10,27,110 32,676 31,303 51,56,454 43.23 69.25 997.45 9.65 1.25 45.46 38,442,328 10,826,337 140,835 27,475,156 3,824,809 1,869,513 31,707,230 9,074,962 140,835 22,491,433 6,083,947 1,869,513 67,35,098 17,513,75 49,83,723 -22,59,138 21.24 19.30 22.16 -37.13 16,092,062 2,148,748 33,811,362 8,401,184 1,691,017 25,089,119 7,690,878 4,57,731 87,22,243 91.55 27.07 34.77
INTERPRETATION
I Sources of funds
There is no change in share capital. Equity warrants has been decreased by 100% in the year 2011 compared to year2010. And the reserve & surplus has been increased by 3.90% in the year 2011 when compared to year 2010. There has been increased by 91.55% in secured loans and decreased by 100% in unsecured loans and deferred tax liabilities has been also increased by 27.07% in the year 2011 when compared to the year 2010.
II application of fund
The fixed asset has been increased by 22.16% in the year 2011 when compared to the last year. Capital work in progress has been also decreased by 37.13% in the year 2011 when compared to the year 2010. There is no change in Investment in the year 2011 when compared to the year 2010. The net current asset has been decreased by 111.98% in the year 2011 when compared to the year 2010. There is no change in Deferred revenue expenditure in the year 2011 when compared to the year 2010.
Particulars
31-03-2010
31-03-2009
ABSOLUTE CHANGES
CHANGES In %
SOURCE OF FUNDS Shareholders Funds Capital Equity warrants Reserve and Surplus 305,420 14,691,498 2,50,920 99,11,836 4779662 48.22 54,500 21.72
Loan Funds: Secured Loans Unsecured Loans Net Deferred Tax Liabilities Total APPLICATION OF FUNDS Fixed Assets: Gross Block Less: Depreciation Impairment Loss Net block Capital Work In Progress Investment Current assets, Loans and advances: Inventories Sundry Debtors Cash and Bank Balance Other Current Assets Loans and Advances Total current assets 6,721,045 1,674,942 102,974 338,620 2,505,980 11,343,561 40,37,100 32,28,548 7,64,682 2,39,621 27,80,155 1,10,50,106 2683945 -1553606 -661708 98999 -274175 293455 66.48 -48.12 -86.53 41.31 -9.86 2.66 31,707,230 9,074,962 140,835 22,491,433 6,083,947 1,869,513 1,93,83,467 80,18,284 1,40,835 1,12,24,348 1,20,86,352 18,63,513 12323763 1056678 11267085 -6002405 6000 63.58 13.18 100.38 -49.66 0.32 8,401,184 1,691,017 25,089,119 1,46,61,503 12,21,053 2,60,45,312 469964 -956193 38.49 -3.67 -6260319 -42.70
INTERPRETATION
I Sources of funds
There has been increased by 21.72 in share capital. Equity warrants has been decreased by 100% in the year 2010 compared to year2009. And the reserve & surplus has been increased by 48.22% in the year 2010 when compared to year 2009. There has been decreased by 42.70% in secured loans and decreased by 100% in unsecured loans and deferred tax liabilities has been also increased by 38.49% in the year 2010 when compared to the year 2009.
II application of fund
The fixed asset has been increased by 100.38% in the year 2010 when compared to the last year. Capital work in progress has been also decreased by 49.66% in the year 2010 when compared to the year 2009. The Investment has been increased by 0.32% in the year 2010 when compared to the year 2009. The net current asset has been decreased by 720.03% in the year 2010 when compared to the year 2009. The deferred revenue expenditure has been decreased by 100% in the year 2010 when compared to the year 2009.
Particulars
31-03-2009
31-03-2008
ABSOLUTE CHANGES
CHANGES In %
SOURCE OF FUNDS Shareholders Funds Capital Equity warrants Reserve and Surplus 2,50,920 99,11,836 2,50,920 3,34,950 84,04,090 -3,34,950 15,07,746 -100 17.94
Loan Funds: Secured Loans Unsecured Loans Net Deferred Tax Liabilities Total APPLICATION OF FUNDS Fixed Assets: Gross Block Less: Depreciation Impairment Loss Net block Capital Work In Progress Investment Current assets, Loans and advances: Inventories Sundry Debtors Cash and Bank Balance Other Current Assets Loans and Advances Total current assets 40,37,100 32,28,548 7,64,682 2,39,621 27,80,155 1,10,50,106 53,24,181 25,63,505 4,63,607 3,40,486 40,24,216 1,27,15,995 -12,87,081 6,65,043 2,71,075 -1,00,865 -12,44,061 -16,65,889 -24.17 25.94 58.47 -29.62 -30.91 -13.10 1,93,83,467 80,18,284 1,40,835 1,12,24,348 1,20,86,352 18,63,513 1,68,07,170 72,09,382 1,40,835 94,56,953 50,33,888 16,58,014 25,76,297 8,08,902 17,67,395 70,52,464 2,05,499 15.33 11.22 18.68 140.09 12.39 1,46,61,503 12,21,053 2,60,45,312 86,70,608 7,61,414 14,67,708 1,98,89,690 59,90,895 -7,61,414 -2,46,655 61,55,622 69.09 -100 -16.81 30.95
INTERPRETATION
I Sources of funds
There is no change in share capital. Equity warrants has been decreased by 100% in the year 2009 compared to year2008. And the reserve & surplus has been increased by 17.94% in the year 2009 when compared to year 2008 There has been increased by 69.09% in secured loans and decreased by 100% in unsecured loans and deferred tax liabilities has been also decreased by 16.81% in the year 2009 when compared to the year 2008.
II application of fund
The fixed asset has been increased by 18.68% in the year 2009 when compared to the last year. Capital work in progress has been also increased by 140.09% in the year 2009 when compared to the year 2008. Investment has been increased by 12.39% in the year 2009 when compared to the year 2008. The net current asset has been decreased by 76.81% in the year 2009 when compared to the year 2008. Deferred revenue expenditure has also been decreased by 54.74% in the year 2009 when compared to the year 2008.
Particulars
31-03-2008
31-03-2007
ABSOLUTE CHANGES
CHANGES In %
SOURCE OF FUNDS Shareholders Funds Capital Equity warrants Reserve and Surplus 2,50,920 3,34,950 84,04,090 2,40,045 33,278 69,36,730 10,875 3,01,672 14,67,360 4.53 906.52 21.15
Loan Funds: Secured Loans Unsecured Loans Net Deferred Tax Liabilities Total APPLICATION OF FUNDS Fixed Assets: Gross Block Less: Depreciation Impairment Loss Net block Capital Work In Progress Investment Current assets, Loans and advances: Inventories Sundry Debtors Cash and Bank Balance Other Current Assets Loans and Advances Total current assets 53,24,181 25,63,505 4,63,607 3,40,486 40,24,216 1,27,15,995 33,90,551 22,69,104 3,70,805 2,60,942 21,19,931 84,11,333 19,33,630 2,94,401 92,802 79,544 19,04,285 43,04,662 57.03 12.97 25.02 30.48 89.83 51.17 1,68,07,170 72,09,382 1,40,835 94,56,953 50,33,888 16,58,014 1,57,39,283 65,51,753 1,87,451 90,00,079 19,70,586 16,00,805 10,67,887 6,57,629 -46,616 4,56,874 30,63,302 57,209 6.78 10.04 -24.86 5.07 155.45 3.57 86,70,608 7,61,414 14,67,708 1,98,89,690 74,41,398 52,340 14,34,331 1,61,38,122 12,29,210 7,09,074 33,377 37,51,568 16.52 1,354.75 2.33 23.25
INTERPRETATION
I Sources of funds
Share capital has been increased by 4.53% in the year2008 compare to 2007. Equity warrants has been increased by 906.52% in the year 2008 compared to year2007. And the reserve & surplus has been increased by 21.15% in the year 2008 when compared to year 2007 There has been increased by 16.52% in secured loans and also increased in unsecured loans by 1354.75% and Net deferred tax liabilities has been increased by 2.33% in the year 2008 when compared to the year 2007.
II application of fund
The fixed assets have been increased by 5.07% in the year 2008 when compared to the last year. Capital work in progress has been also increased by 155.45% in the year 2008 when compared to the year 2007. Investment has been increased by 3.57% in the year 2008 when compared to the year 2007. The net current asset has been increased by 5.33% in the year 2008 when compared to the year 2007.
Deferred revenue expenditure has been decreased by 46.95% in the year 2008 when compared to the year 2007.
Particulars
31-03-2007
31-03-2006
ABSOLUTE CHANGES
CHANGES In %
SOURCE OF FUNDS Shareholders Funds Capital Equity warrants Reserve and Surplus 2,40,045 33,278 69,36,730 2,21,920 88,740 56,05,048 18,125 -55,462 13,31,682 8.17 -62.50 23.76
Loan Funds: Secured Loans Unsecured Loans Net Deferred Tax Liabilities Total APPLICATION OF FUNDS Fixed Assets: Gross Block Less: Depreciation Impairment Loss Net block Capital Work In Progress Investment Current assets, Loans and advances: Inventories Sundry Debtors Cash and Bank Balance Other Current Assets Loans and Advances Total current assets 33,90,551 22,69,104 3,70,805 2,60,942 21,19,931 84,11,333 26,21,667 19,82,492 5,17,489 2,25,640 16,48,665 69,95,953 7,68,884 2,86,610 -1,46,684 35,302 4,71,266 14,15,380 29.33 14.45 -28.34 15.64 28.58 20.23 1,57,39,283 65,51,753 1,87,451 90,00,079 19,70,586 16,00,805 1,49,14,639 58,79,443 1,88,024 88,47,172 6,95,615 15,25,755 8,24,644 6,72,310 -573 1,52,907 12,74,971 75,050 5.53 11.43 -0.3 1.73 183.29 4.92 74,41,398 52,340 14,34,331 1,61,38,122 67,17,748 1,58,367 13,35,064 1,41,26,887 7,23,650 1,06,027 99,267 20,11,235 10.77 66.95 74.35 14.24
INTERPRETATION
I Sources of funds
Share capital has been increased by 8.17% in the year2007 compare to 2006. Equity warrants has been decreased by 62.50% in the year 2007 compared to year2006. And the reserve & surplus has been increased by 23.76% in the year 2007 when compared to year 2006 There has been increased by 10.77% in secured loans and also increased in unsecured loans by 66.95% and Net deferred tax liabilities has been increased by 74.35% in the year 2007 when compared to the year 2006.
II application of fund
The fixed assets have been increased by 1.73% in the year 2007 when compared to the last year. Capital work in progress has been also increased by 183.29% in the year 2007 when compared to the year 2006. Investment has been increased by 4.29% in the year 2007 when compared to the year 2006. The net current assets have been increased by 17.23% in the year 2007 when compared to the year 2006. Deferred revenue expenditure has been decreased by 27.53% in the year 2007 when compared to the year 2006.
COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31st March 2009-2010 & 2010-2011
(Rs. in thousand)
Particulars
31-03-2011
31-03-2010
Increase/ Decrease
CHANGES In %
INCOME Turnover(Gross) Less: Excise Duty Turnover(Net) Other Income Total EXENDITURE Purchase of General Merchandise Raw Material Consumed (increase)/ Decrease in Stock-inTrade Manufacturing, Selling and Administrative Exp. Depreciation Interest Adjustment for items Capitalized and Departmental orders for own Consumption Total 37,559 10,681,517 -1,356,533 11,247,331 1,764,869 1,742,339 -30,271 59,486 8,204,052 -809,038 7,820,703 1,072,517 1,130,336 -164,597 -21,927 24,77,465 -5,47,495 34,26,628 6,92,352 6,12,003 -1,34,326 -36.86 30.20 67.67 43.81 64.55 54.14 81.61 27,422,354 2,155,334 25,267,020 272,785 25,539,805 19,600,263 1,096,408 18,503,855 201,639 18,705,494 78,22,091 10,58,926 67,63,165 71,146 68,34,311 39.91 56.58 36.55 35.28 36.54
24,086,811
17,313,459
67,73,352
39.12
PROFIT BEFORE TAXATION Provision for Taxation Current Tax Fringe benefit tax Deferred Tax
1,452,994 457,731 -
1,392,035 469,964 -
60,959 12,233
4.38 -2.60 -
995,263 -
922,071 -
73,192
7.94 -
Profit brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION
411,209 1,406,472
343,588 1,265,659
67,621 1,40,813
19.68 11.13
APPROPRIATION Transfer to General Reserve Proposed Dividend on Equity Shares Provision for Dividend Tax Balance carried to Balance Sheet 500,000 304,742 47,319 554,411 500,000 304,742 49,708 411,209 -2,389 1,43,202 -4.81 34.83
INTERPRETATION
I Income
The income of the company has been increased by 36.54% in the year 2011 compared to the year 2010. It shows that the raise in income.
II Expenditure
The expenditure of the company has been increased by 39.12% in the year 2011 compared to the year 2010. It shows that the company increase more expenditure cost in the year 2011 when compared to 2010.
The profit after tax has been increased by 7.94% in the year 2011 when compared to 2010. It shows that the company earns good profit by using all the resources optimally.
COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31st March 2008-09 & 2009-10
(Rs. in thousand)
Particulars 31-03-2010 31-03-2009 Increase/ Decrease INCOME Turnover(Gross) Less: Excise Duty Turnover(Net) Other Income Total EXENDITURE Purchase of General Merchandise Raw Material Consumed (increase)/ Decrease in Stock-inTrade Manufacturing, Selling and Administrative Exp. Depreciation Interest Adjustment for items Capitalized and Departmental orders for own Consumption Total 59,486 8,204,052 -809,038 7,820,703 1,072,517 1,130,336 -164,597 35,489 93,36,337 (2,08,849) 81,50,137 8,50,402 12,33,483 (1,29,843) 23997 (1132285) (1010887) (329434) 222115 (103147) (294440) 67.62 (12.13) 487.38 (4.04) 26.12 (8.36) 226.77 19,600,263 1,096,408 18,503,855 201,639 18,705,494 2,30,72,056 17,99,803 2,12,72,253 1,35,315 2,14,07,568 (3471793) (703395) (2768398) 66324 (2702074) (15.05) (39.08) (13.01) 49.01 (12.62) CHANGES In %
17,313,459
1,92,67,156
(1953697)
(10.14)
1,392,035 469,964 -
Deferred Tax
(2,46,655)
2,46,655
100
PROFIT AFTER TAX Debenture redemption reserve written back ,Profit brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATION Transfer to General Reserve Proposed Dividend on Equity Shares 500,000 12,50,000 2,50,242 249758 99.81
304,742 49,708
42,529 3,43,588
262213 (293880)
616.55 (85.53)
INTERPRETATION
I Income
The income of the company has been decreased by 12.62% in the year 2010 compared to the year 2009. It shows that the decreased in income.
II Expenditure
The expenditure of the company has been decreased by 10.14% in the year 2010 compared to the year 2009. It shows that the company decrease expenditure cost in the year 2010 when compared to 2009.
The profit after tax has been decreased by 37.80% in the year 2010 when compared to 2009. It shows that the company did not earn good profit by using all the resources optimally.
COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31st March 2007-08 & 2008-09
(Rs. in thousand)
Particulars 31-03-2009 31-03-2008 Increase/ Decrease INCOME Turnover(Gross) Less: Excise Duty Turnover(Net) Other Income Total EXENDITURE Purchase of General Merchandise Raw Material Consumed (increase)/ Decrease in Stock-inTrade Manufacturing, Selling and Administrative Exp. Depreciation Interest Adjustment for items Capitalized and Departmental orders for own Consumption Total 35,489 93,36,337 (2,08,849) 81,50,137 8,50,402 12,33,483 (1,29,843) 19,899 74,78,097 (2,95,476) 60,36,422 7,59,209 8,03,752 (93,642) 15,590 18,58,240 -86,627 21,13,715 91,193 4,29,731 36,201 78.34 24.85 -29.32 35.02 12.01 53.46 38.66 2,30,72,056 17,99,803 2,12,72,253 1,35,315 2,14,07,568 1,85,27,701 19,68,714 1,65,58,987 1,56,401 1,67,15,388 45,44,355 -1,68,911 47,13,266 -21,086 46,92,180 24.53 -8.58 28.46 -13.48 28.07 CHANGES In %
1,92,67,156
1,47,08,261
45,58,895
30.99
Deferred Tax
(2,46,655)
36,700
-2,83,355
-772.08
PROFIT AFTER TAX Debenture redemption reserve written back Profit brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATION Transfer to General Reserve Proposed Dividend on Equity Shares 12,50,000 2,50,242 17,50,000 2,50,242 -5,00,000 -28.57 -
42,529 3,43,588
42,529 4,20,792
-77,204
-18.35
INTERPRETATION
I Income
The income of the company has been increased by 28.07% in the year 2009 compared to the year 2008. It shows that the raise in income.
II Expenditure
The expenditure of the company has been increased by 30.99% in the year 2009 compared to the year 2008. It shows that the company increase more expenditure cost in the year 2009 when compared to 2008.
COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31st March 2006-07 & 2007-08
(Rs. in thousand)
Particulars 31-03-2008 31-03-2007 Increase/ Decrease INCOME Turnover(Gross) Less: Excise Duty Turnover(Net) Other Income Total EXENDITURE Purchase of General Merchandise Raw Material Consumed (increase)/ Decrease in Stock-inTrade Manufacturing, Selling and Administrative Exp. Depreciation Interest Adjustment for items Capitalized and Departmental orders for own Consumption Total 19,899 74,78,097 (2,95,476) 60,36,422 7,59,209 8,03,752 (93,642) 15,302 58,16,061 (2,38,579) 58,01,012 7,62,804 7,13,016 (24,268) 4,597 16,62,036 56,897 2,35,410 -3,595 90,736 69,374 30.04 28.58 23.85 4.06 -0.47 12.72 285.87 1,85,27,701 19,68,714 1,65,58,987 1,56,401 1,67,15,388 1,57,37,419 16,51,372 1,40,86,047 1,43,261 1,42,29,308 27,90,282 3,17,342 24,72,940 13,140 24,86,080 17.73 19.22 17.56 9.17 17.47 CHANGES In %
1,47,08,261
1,28,45,348
18,62,913
14.50
20,07,127 5,10,300
13,83,960 2,58,600
6,23,167 2,51,700
45.03 97.33
Fringe benefit tax Deferred Tax PROFIT AFTER TAX Debenture redemption reserve written back Profit brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATION Transfer to General Reserve Proposed Dividend on Equity Shares 17,50,000 2,50,242 10,00,000 1,87,681 7,50,000 62,561 75.00 33.33
42,529 4,20,792
31,897 2,09,186
10,632 2,11,606
33.33 101.16
INTERPRETATION
I Income
The income of the company has been increased by 17.47% in the year 2008 compared to the year 2007. It shows that the raise in income.
II Expenditure
The expenditure of the company has been increased by 14.50% in the year 2008 compared to the year 2007. It shows that the company increase more expenditure cost in the year 2008 when compared to 2007.
COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31st March 2005-06 & 2006-07
(Rs. in thousand)
Particulars 31-03-2007 31-03-2006 Increase/ Decrease INCOME Turnover(Gross) Less: Excise Duty Turnover(Net) Other Income Total EXENDITURE Purchase of General Merchandise Raw Material Consumed (increase)/ Decrease in Stock-inTrade Manufacturing, Selling and Administrative Exp. Depreciation Interest Adjustment for items Capitalized and Departmental orders for own Consumption Total 15,302 58,16,061 (2,38,579) 58,01,012 7,62,804 7,13,016 (24,268) 9,616 52,50,697 (1,55,097) 48,50,660 7,60,996 7,30,603 (42,136) 5,686 5,65,364 83,482 9,50,352 1,808 -17,587 -17,868 59.13 10.77 53.82 19.59 0.24 -2.41 -42.41 1,57,37,419 16,51,372 1,40,86,047 1,43,261 1,42,29,308 1,37,71,836 14,53,958 1,23,17,878 94,846 1,24,12,724 19,65,583 1,97,414 17,68,169 48,415 18,16,584 14.27 13.58 14.35 51.04 14.63 CHANGES In %
1,28,45,348
1,14,05,339
14,40,009
12.63
13,83,960 2,58,600
10,07,385 85,000
3,76,575 1,73,600
37.38 204.23
Fringe benefit tax Deferred Tax PROFIT AFTER TAX Debenture redemption reserve written back Profit brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION
10,892 3,76,011
2.70 35.72
Proposed Dividend on Equity Shares Provision for Dividend Tax Balance carried to Balance Sheet
INTERPRETATION
I Income
The income of the company has been increased by 14.63% in the year 2007 compared to the year 2006. It shows that the raise in income.
II Expenditure
The expenditure of the company has been increased by 12.63% in the year 2007 compared to the year 2006. It shows that the company increase more expenditure cost in the year 2007 when compared to 2006.
Trend analysis
(Rs. in thousand)
Particular s Sharehold ers Funds Capital 305,42 0 137. 63 305,4 20 137. 63 2,50,9 20 113. 07 2,50,9 20 3,34,9 50 176. 84 84,04, 090 113. 07 377. 45 149. 94 2,40,0 45 33,278 108. 17 37.5 2,21,9 20 88,74 0 56,05, 048 10 0 10 0 10 0 201011 % 200910 % 200809 % 200708 % 200607 % 200506 %
15,265 ,132
272. 35
14,69 1,498
262. 11
99,11, 836
69,36, 730
123. 76
Loan Funds: Secured Loans Unsecure d Loans Net Deferred Tax Liabilities Total 16,092 ,062 239. 55 8,401, 184 125. 06 1,46,6 1,503 218. 25 86,70, 608 7,61,4 14 91.4 6 14,67, 708 129. 07 480. 79 109. 94 74,41, 398 52,340 110. 77 33.0 5 107. 43 67,17, 748 1,58,3 67 13,35, 064 10 0 10 0 10 0
2,148, 748
160. 95
1,691, 017
126. 66
12,21, 053
14,34, 331
33,811 ,362
239. 34
25,08 9,119
177. 6
2,60,4 5,312
184. 37
1,98,8 9,690
140. 79
1,61,3 8,122
114. 23
1,41,2 6,887
10 0
APPLICATI ON OF FUNDS Fixed Assets: Gross Block Less: Depreciati on Impairme nt Loss Net block 38,442 ,328 10,826 ,337 257. 75 184. 13 31,70 7,230 9,074, 962 212. 59 154. 35 1,93,8 3,467 80,18, 284 129. 96 136. 38 1,68,0 7,170 72,09, 382 112. 69 122. 62 1,57,3 9,283 65,51, 753 105. 53 111. 43 1,49,1 4,639 58,79, 443 10 0 10 0
140,83 5 27,475
74.9
140,8 35 22,49
74.9
1,40,8 35 1,12,2
74.9
1,40,8 35 94,56,
74,9 0 106.
1,87,4 51 90,00,
99.6 9 101.
1,88,0 24 88,47,
10 0 10
310.
254.
126.
,156 Capital Work In Progress Investme nt Current assets, Loans & adv.: Inventorie s Sundry Debtors Cash and Bank Balance Other Current Assets 9,626, 573 2,834, 779 1,130, 084 3,824, 809 1,869, 513
55 549. 9 122. 53
22 874. 7 122. 53
89 723. 66 108. 67
73 283. 29 104. 92
0 10 0 10 0
110. 83 58.5
10 0 10 0 10 0
198. 48
371,29 6
164. 55
32,67 6
14.4 8
2,39,6 21
106. 19
3,40,4 86
150. 89
2,60,9 42
115. 65
2,25,6 40
10 0
Loans and Advances Total current assets Less: Current Liabilities & Prov. Net Current Assets Miscellan eous Expenditu re: Deferred Revenue Expenditu re Total
153. 9 235. 85
1.9
168. 63 157. 95
244. 09 181. 76
128. 58 120. 23
10 0 10 0
73.7 1
15,858 ,131
398. 49
8,41,2 04
21.1 4
1,01,8 6,312
255. 96
89,91, 299
225. 93
48,75, 108
122. 5
39,79, 596
10 0
641,88 4
21.2 8
59,97, 658
28.6 4
8,63,7 94
28.6 4
37,24, 696
123. 48
35,36, 225
117. 23
30,16, 357
10 0
7,305
17.3 9
16,139
38.4 4
30,427
72.4 6
41,98 8
10 0
33,811 ,362
239. 34
87,22, 243
61.7 4
2,60,4 5,312
184. 37
1,98,8 9,690
140. 79
1,61,3 8,122
114. 24
1,41,2 6,887
10 0
FINDINGS
The liquidity ratio i.e. current ratio and quick ratio of UML are quite healthy. The company is placed comfortable to fulfill its current obligations. Reserve to capital ratio of UML has increased from 25.26:1 to 49.98:1 from 2005-06 to 2010-11 which ensure that UML has sufficient reserves which it can use at any point of crises in future time period. The debtor turnover ratio of UML is also very satisfactory as it is said that higher the ratio, the better it is for the company as it insures quick collection of money from the debtors. It was 5.48 times in the year 2005-06 and increased to 11.2 times in the year 2010-11. The average collection period of the company should not be more than 90 days. The period was 66 days in 2005-06 then it decreased to 33 days in 2010-11 which is healthy sign for a credit sale making company. It insure that UML is able to collect its debt on time. The working capital turnover ratio of UML was 4.08 in 2005-06 which increased to 39.4 in 2010-11 which is quite highi.This shows UML is utilizing their working capital efficiently which result increase in the net turnover. The profitability ratio is also satisfactory. The net profit ratio increased in first three years from 5% to 9% and decreased to 7% in 2008-09 the but 2009-10 it has been increased to 4.98% then in 2010-11 it decreased to 3.94% but the company will recover it in the future. From the comparative analysis, it was found that the test of overall profitability holds good. From the comparative financial statement (balance sheet and profit and loss account), the increases or decreases in various assets and liabilities.
CONCLUSION
Usha martin limited is the only leading company in India and the 2nd largest company in the world which deals in wire and wire ropes.
The overall financial position of the company is quite healthy during the last six years. The credit for this improvement goes to efficient management, Long-term vision of the management, Team spirit among the employees of the company.
UML is very successful in managing its finance, it has managed all its financial resources to the optimum level.
It is expected that UML will gain a lot, its financial ratio will improve further and so the financial strength of the company.
Today UML is the powerful brand in the market and moving towards becoming the market leader.
SUGGESTIONS
UML should focus on the advertisement department. UML should develop proper warehouse. UML should increase the number of employees in finance department. The company has to focus on the reducing cost by reducing the unproductive expenses. UML tools and machines have become old and obsolete.
This report is based upon the data provided by the officers of the company and financial reports of the company.
Since some facts and business secrets need to be maintained strictly, it is not possible to collect all the information related to the financial matters of the company.
As it is an external study, conclusion and suggestions are not ultimate and are based on our personal judgment.
BIBLIOGRAPHY
Books Referred:
Websites Referred:
www.ushamartin.com Google search
THANK YOU