Description
This is a list of furniture types. Furniture includes objects such as tables, chairs, beds, desks, dressers, or cupboards. These objects are usually kept in a house or other building to make it suitable or comfortable for living or working in.
INTRODUCTION
Definition: “Financial statement are interpreted as those statement which show both the performance and the financial position. They include balance sheet, income statement, fund statement, or any supporting statements or other presentation of financial data derived from accounting records.” Functions: Finance is the lifeblood of business. The Financial Management study about the process of procuring and judicious (effective and optimum) use of financial resources with a view to maximizing the value of the firm and by the value o the owner’s i.e. equity shareholder’s wealth. In brief it includes the figures in summary form of various assets held by the company and also its liabilities towards outsides including the owner at the end of the last day of an accounting year. Income statement or P & L account is a statement which shows in summary form, the revenue and expenses of a business entity for an accounting year. It shows the sales revenue, cost of sales, gross profit, operating expenses, operating profit, non-trading income and expenses, net income or loss, tax liabilities, etc. Importance: The scope of financial management i.e. the views about finance functions only of raising Finance for business and consequently the discussion centered round different documents etc. Since last 30-35 years however an effective utilization of finance has also been considered as an important function of financial Management. Finance does not stop at procuring the required finance. It has also to see that it is effectively utilized in business. It is concerned with maintaining adequate fund to meet the expenses of both are revenue and capital nature.
Organization structure of finance dept
Mr. Govindbhai Patel (Department Head)
Finance Manager
Accounting Operation
Chief Accountant
Staff
Production Dept.
Marketing Dept.
HR Dept.
CAPITAL BUDGETING Capital budgeting is the most important and complicated problem of managerial decision. Because it is concerned with designing and carrying out through a systematic investment programmes. It involves the planning of such expenditures, which provides yields over a number of years. The firm’s investment decision would generally include expansion, acquisition, modernization and replacement of the long-term assets. There are two types of methods for evaluating a project: ? Discounted Method: I. Pay Back Period II. Average Rate Return ?Non-discounted Method: I. Net present Value II. Profitability Index III. Internal Rate of Return
Capital budgeting decision pertaining to fixed and long term assets which by definition refer to assets which are in operation and yield a return over a period of time , usually exceeding one year . They therefore, involve a current outlay of cash resources in return for anticipated flow of future benefits. In other words ,the system of capital budgeting is employed to evaluate expenditure decision which involve current outlays but are likely to produce benefits over a period of time longer then one year . These benefits may be either in the form of revenue or reduced cost. Capital expenditure management therefore includes addition, disposition, modification, and replacement of fixed assets. In short, the capital budgeting decisions means a decision as to whether or not money should be invested in long term projects. Such projects may include the setting up of a factory or machinery or certain creating additional capacities to manufacturing part which at present may be purchased from out side. It includes a financial analysis of the various proposals regarding capital expenditure to evaluate their impact on the financial condition of the company for the proposal to choose the best out of the various alternatives.
Cost Structure JALARAM STEL FURNITURE PVT LTD. produce high quality steel furniture and so that every activities of the organization lead to cost. Cost is very important in every organization because it decides the profitability of the organization, according to the Finance Manger of the company.
Cost structure of the company is a very confidential matter so they have not provided me actual cost structure but here we are trying to represent under the idea given by them. The actual figure will be different than this. Estimation of cost structure of steel furniture of various products is given below.
Description Cost of Raw material Less: Wastages & spoilage Total useful raw material Manufacturing & other expenses
Cost (in Rs.) ……………… ……………… ………………
(It includes cutting, bending , notching, shearing and assembly, pre coating, putty work, primary coating ,alkyd amino paint coating, ……………… powder coating, oven baking, accessory fitting) Trading Expenses Administration expenses Total cost ……………… ……………… ……………….
WORKING CAPITAL MANAGEMENT
Generally, the term Working capital refers to that part of capital which is not tied up in fixed assets but is used to meet the day-to-day requirements of business. It is invested in current assets like cash, stock, bills receivable, debtors, etc.this type of capital is used to make payments for purchase of raw material, Wages and to meet other expenses till goods are sold and money is collected against it. The socks are to be maintained continuously to meet demand for the product and some money is tied up in the credit sales. Capital used for this purpose is called Working Capital. In other words, working capital is that which is held to meet day-to-day requirements of business, which changes from day-to-day, and which is converted in to cash continuously. The risk element is low in it. Working capital I is also known as current capital, circulating capital and floating capital. Some people call it variable capital also. There are two concept of working capital. According to one school of thought, working capital means total of all current assets. Authorities like Meade and Montgomery have accepted this Interpretation. According to the other interpretation, working capital is the excess of current assets over current liabilities. Lincoln Stevens and Saliers are in favor of this interpretation.
Factors Determining Working Capital:? Factor determining working capital requirements are as under: 1. Nature of business: Jalaram steel furniture pvt ltd. is a trading concern so that they have to keep larger funds for buying and storing inventories. They also manufacture goods in its own factory, so in that task also working capital requirement is high. 2. Length of manufacturing cycle: Jalaram steel furniture pvt ltd. is manufacturing high quality steel furniture and manufacturing cycle of producing steel furniture is also very lengthy .so it requires high amount of working capital.
3. Volume of Business: Jalaram steel furniture pvt ltd’s running with greater volume of business so it requires high amount of working capital requirement because the wage bill, stocks of raw material, etc. 4. Collection policy or credit policy: Jalaram steel furniture pvt ltd. has wide distributor network all over India. They give credit to their dealers and distributors. Then how long does it take to collect the money, is an important consideration. So the money gets blocked in to credit so it requires high amount of working capital requirement. 5. Business Fluctuation: When business is prosperous and prices are rising, the management likes to maintain the stocks. So that benefit of higher prices can be reaped later on. So, it requires larger amount of working capital. 6. Seasonal demand: Jalaram steel furniture pvt ltd. gets high demand of household furniture in market while marriage season. So at that time working capital requirement become high. It is also noted that if transportation of any firm is less developed its working capital requirement is high. 7. Size of the firm: Size of the firm also decides working capital requirement. If size of the firm is big then it requires high amount of working capital and vice-versa
Internal Audit Policies
Financial manager is checking financial report, which is related to, the Company after 15days or 1 month company auctioning its all financial report or all transaction related to the company checking by the auditor after completed its financial year. Financial manager preparing all plan related to company financial matter all decision taken by the financial manager.
? The internal audit and financial policy are as under:
? Financial year started on 1st April ? Method of accounting is “mercantile system” ? Methods of prepare stock register is “FIFO” (first come first out) ? Methods of depreciation is “Written down value method” ? Valuation of closing stock is valued at cost or market price whichever less is. ? Book maintains in computer are cash book, bank book, ledger, sales register, purchase register, journal, stock register.
BALANCESHEET
Particular SOURCES OF FUNDS Share holder funds: Share capital Reserves & surplus Loan funds: Secured loans Un secured loans Total APPLICATION OF FUNDS: Fixed assets: Gross block Less depreciation Net block Capital work in progress Investment Deferred Tax Asset Current Assets: Inventories Sundry Debtors Cash & Bank balances Loans & Advances Less: Current liabilities: Current liabilities Provisions Net current Assets Profit & Loss Account Total 8497.65 227.55 8725.20 7294.93 728.14 50807.87 5867.45 184.72 6052.17 10372.31 54198.52 AS AT (Rs. in lacs) AS AT (Rs. in lacs)
5815.80 22719.34 28535.14 19842.94 2426.79 22272.73 50807.87
5815.80 24718.29 30534.09 21234.61 2429.49 23664.43 54198.52
70334.42 33444.83 36889.59 874.56 37764.15 1.63 50019.02 8820.53 3918.38 47.09 3234.13 16020.13
70081.52 30018.38 40063.14 886.73 40949.87 1.63 2874.71 8165.66 4779.64 37.27 3441.91 16424.18
PROFIT AND LOSS ACCOUNT
Particular Income Sales: Domestic Exports Less: Excise Duty For the year 2009 For the year 2010
35580.81 67.56 35648.37 71.64 35576.73 365.50 35942.23 19862.46 9062.15 28924.64 7017.62 3402.47 (3615.16) 3433.40 (181.76) 20.05 55.11 106.59 1892.36 (1998.95) (0.18)
34,146.39 82.06 34,228.45 6.42 34222.03 452.88 34674.91 22523.97 99949.94 32473.91 2201.00 3620.12 (1419.12) 3435.28 (4854.40) 17.00 (2144.31) 2727.09 1998.95 (728.14) (4.69)
Other Income EXPEDITURE : Material Cost Manufacturing and other Expenses Profit before Interest & Depreciation Interest and Lease rent Profit /(Loss) before Depreciation & Tax Depreciation Profit /(Loss) before Tax Fringe Benefit Tax Deferred Tax/ ( Credit) Profit /(loss) after Tax Brought Forward surplus Surplus/ (Deficit) Carried Over to balance Sheet Basic/ Diluted Earnings per share (Rs.)
RATIO ANALYSIS
1. Gross profit ratio = Gross profit × 100 Sales 2009 = 7017.60 × 100 35648.37 = 2010 = 19.69% 2201 × 100 34228.45 = 6.43%
GROSS PROFIT RATIO
20 15 10 5 0 2009-10 2010-11 19.69 2009-10 2010-11 6.43
? This ratio indicates how much money taken by company for paying its operating expenses. Here gross profit ratios are respectively 19.69% and 6.43% which is good for the company.
2.
Net profit ratio
=
Net profit (after tax) × 100 Sales
2009
=
106.59 × 100 35648.37
= 2010 =
0.30% 2727.09 × 100 34228.45
=
7.97%
NET PROFIT RATIO
8 7 6 5 4 3 2 1 0
7.97 0.3
2009-10 2010-11
2009-10
2010-11
? This ratio indicates what amount left what amount left with owner after paying all the expenses. Higher ratio indicates its good for the company. Here net profit ratios are respectively 0.30% and 7.97%. company has improve its ratio in 2009 which is good for the company.
3.
Current ratio
=
Current assets Current Liability
2009
=
11948.55 6052.17
= 2010 =
1.97 : 1 11861 .51 8725.20
=
1.36 : 1
CURRENT RATIO
2 1.5 1 0.5 0 2009-10 2010-11 1.97 1.36 2009-10 2010-11
? This ratio indicates liquid position or the working capital position of the business. Here current ratios are respectively 1.97 : 1 and 1.36 : 1. in 2009 current ratio is decreased which is not so good for the company.
4.
Liquidity ratio
=
Current assets – Closing Stock Current Liability – BOD
2009
=
10523.05 8725.20
= 2010 =
1.21 : 1 8467.04 6052.17
=
1.40 : 1
LIQUIDITY RATIO
1.4 1.35 1.3 1.25 1.2 1.15 1.1 2009-10 2010-11 1.21 1.4 2009-10 2010-11
? This ratio indicates to have a better idea of the liquid position of the business. Here company’s liquid ratios are respectively 1.21:1 and 1.40:1.lower ratio indicates poor management of the company. In 2009 liquid ratio is increased, which is good for the company.
5.
Stock turn over ratio=
Cost of Goods Sales Avg. stock
2009
=
20894.12 2410.49
= 2010 =
867 times 16526.86 2044.73
=
808 times
STOCK TURN OVER RATIO
880 860 840 820 800 780 760 2009-10 2010-11 867 808 2009-10 2010-11
? This ratio indicates how easily stock move out of the business and increase the sales which results in increase the profit. Here stock turn over ratios are respectively 867 times and 808 times.
6.
Debtor ratio
=
Debtor + bills receivable Credit sales
2009
=
4779.64 × 365 35648.37
= 2010 =
48.93 = 49 Days 3918.38 34228.45 × 365
=
41.78 = 42 Days
DEBTOR RATIO
50 48 46 44 42 40 38 2009-10 2010-11 42 49 2009-10 2010-11
? This ratio indicates how many days are required to collect credit amount credit amount liability policy. Here in 2008 debtor ratio is 49 days which is decreased in 2009 indicates efficient management of the company.
7. Creditors ratio
=
creditors + bills payable × 365 Credit purchase
2009
= = =
4457.02 × 365 18751.07 87 Days 3080.89 × 365 19400.43
2010
=
=
58 Days
CREDITORS RATIO
100 80 60 87 40 20 0 2009-10 2010-11 58 2009-10 2010-11
? Here creditor ratio in 2008 is 87 days which is decreased in 2009, that is 58 days. It means company have to pay payment as quick as possible.
8. Creditors turn over ratio =
365
Creditors ratio 2009 = 365 87 Days = 2010 = = = 4.20 Times 365 58 Days 6.29 Times
DEBTORS TURN OVER RATIO
9 8.5 8 7.5 7 6.5 2009-10 2010-11 7.46 2009-10 8.74 2010-11
? Here in 2008 creditor turn over ratio is 4.20 times which is increased in 2009 that is 6.29 times. it is not good for the company.
9. Debtor turn over ratio
=
365
Debtor ratio 2009 = 365
= 49 Days = 7.46 Times 2010 = = = 365 42 Days 8.74 Times
DEBTORS TURN OVER RATIO
9 8.5 8 7.5 7 6.5 2009-10 2010-11 7.46 2009-10 8.74 2010-11
? Here in 2008 creditor turn over ratio is 7.46 which is increased in 2009 that is 8.74 times. This is also not good for the company.
10. Proprietary ratio =
Proprietary fund × 100 Total assets
2009
=
30534.09 × 100 52984.55
= 2010 =
57.63 % 28535.14 × 100 51924.65
=
54.95 %
PROPRIETARY RATIO
58 57 56 55 54 53 2009-10 2010-11 54.95 2009-10 57.63 2010-11
? Here in 2008 company’s proprietary ratio is 57.63% which is decreased in 2008 that is 54.95%. higher ratio suggest company has no liability.
11. Debt to equity ratio =
Long term liability × 100 Share holders fund
2009
=
23664.13 × 100 30534.09
= 2010 =
77.50 % 22272.73 × 100 28535.14
=
78.05 %
DEBTOR TO EQUITY RATIO
78.2 78 77.8 78.05 77.6 77.4 77.2 2009-10 2010-11 77.5 2009-10 2010-11
?
Here in 2008 company’s ratio is 77.50% which is increased in 2009 that is
78.50%.So, it is not so good for the company.
doc_312701107.docx
This is a list of furniture types. Furniture includes objects such as tables, chairs, beds, desks, dressers, or cupboards. These objects are usually kept in a house or other building to make it suitable or comfortable for living or working in.
INTRODUCTION
Definition: “Financial statement are interpreted as those statement which show both the performance and the financial position. They include balance sheet, income statement, fund statement, or any supporting statements or other presentation of financial data derived from accounting records.” Functions: Finance is the lifeblood of business. The Financial Management study about the process of procuring and judicious (effective and optimum) use of financial resources with a view to maximizing the value of the firm and by the value o the owner’s i.e. equity shareholder’s wealth. In brief it includes the figures in summary form of various assets held by the company and also its liabilities towards outsides including the owner at the end of the last day of an accounting year. Income statement or P & L account is a statement which shows in summary form, the revenue and expenses of a business entity for an accounting year. It shows the sales revenue, cost of sales, gross profit, operating expenses, operating profit, non-trading income and expenses, net income or loss, tax liabilities, etc. Importance: The scope of financial management i.e. the views about finance functions only of raising Finance for business and consequently the discussion centered round different documents etc. Since last 30-35 years however an effective utilization of finance has also been considered as an important function of financial Management. Finance does not stop at procuring the required finance. It has also to see that it is effectively utilized in business. It is concerned with maintaining adequate fund to meet the expenses of both are revenue and capital nature.
Organization structure of finance dept
Mr. Govindbhai Patel (Department Head)
Finance Manager
Accounting Operation
Chief Accountant
Staff
Production Dept.
Marketing Dept.
HR Dept.
CAPITAL BUDGETING Capital budgeting is the most important and complicated problem of managerial decision. Because it is concerned with designing and carrying out through a systematic investment programmes. It involves the planning of such expenditures, which provides yields over a number of years. The firm’s investment decision would generally include expansion, acquisition, modernization and replacement of the long-term assets. There are two types of methods for evaluating a project: ? Discounted Method: I. Pay Back Period II. Average Rate Return ?Non-discounted Method: I. Net present Value II. Profitability Index III. Internal Rate of Return
Capital budgeting decision pertaining to fixed and long term assets which by definition refer to assets which are in operation and yield a return over a period of time , usually exceeding one year . They therefore, involve a current outlay of cash resources in return for anticipated flow of future benefits. In other words ,the system of capital budgeting is employed to evaluate expenditure decision which involve current outlays but are likely to produce benefits over a period of time longer then one year . These benefits may be either in the form of revenue or reduced cost. Capital expenditure management therefore includes addition, disposition, modification, and replacement of fixed assets. In short, the capital budgeting decisions means a decision as to whether or not money should be invested in long term projects. Such projects may include the setting up of a factory or machinery or certain creating additional capacities to manufacturing part which at present may be purchased from out side. It includes a financial analysis of the various proposals regarding capital expenditure to evaluate their impact on the financial condition of the company for the proposal to choose the best out of the various alternatives.
Cost Structure JALARAM STEL FURNITURE PVT LTD. produce high quality steel furniture and so that every activities of the organization lead to cost. Cost is very important in every organization because it decides the profitability of the organization, according to the Finance Manger of the company.
Cost structure of the company is a very confidential matter so they have not provided me actual cost structure but here we are trying to represent under the idea given by them. The actual figure will be different than this. Estimation of cost structure of steel furniture of various products is given below.
Description Cost of Raw material Less: Wastages & spoilage Total useful raw material Manufacturing & other expenses
Cost (in Rs.) ……………… ……………… ………………
(It includes cutting, bending , notching, shearing and assembly, pre coating, putty work, primary coating ,alkyd amino paint coating, ……………… powder coating, oven baking, accessory fitting) Trading Expenses Administration expenses Total cost ……………… ……………… ……………….
WORKING CAPITAL MANAGEMENT
Generally, the term Working capital refers to that part of capital which is not tied up in fixed assets but is used to meet the day-to-day requirements of business. It is invested in current assets like cash, stock, bills receivable, debtors, etc.this type of capital is used to make payments for purchase of raw material, Wages and to meet other expenses till goods are sold and money is collected against it. The socks are to be maintained continuously to meet demand for the product and some money is tied up in the credit sales. Capital used for this purpose is called Working Capital. In other words, working capital is that which is held to meet day-to-day requirements of business, which changes from day-to-day, and which is converted in to cash continuously. The risk element is low in it. Working capital I is also known as current capital, circulating capital and floating capital. Some people call it variable capital also. There are two concept of working capital. According to one school of thought, working capital means total of all current assets. Authorities like Meade and Montgomery have accepted this Interpretation. According to the other interpretation, working capital is the excess of current assets over current liabilities. Lincoln Stevens and Saliers are in favor of this interpretation.
Factors Determining Working Capital:? Factor determining working capital requirements are as under: 1. Nature of business: Jalaram steel furniture pvt ltd. is a trading concern so that they have to keep larger funds for buying and storing inventories. They also manufacture goods in its own factory, so in that task also working capital requirement is high. 2. Length of manufacturing cycle: Jalaram steel furniture pvt ltd. is manufacturing high quality steel furniture and manufacturing cycle of producing steel furniture is also very lengthy .so it requires high amount of working capital.
3. Volume of Business: Jalaram steel furniture pvt ltd’s running with greater volume of business so it requires high amount of working capital requirement because the wage bill, stocks of raw material, etc. 4. Collection policy or credit policy: Jalaram steel furniture pvt ltd. has wide distributor network all over India. They give credit to their dealers and distributors. Then how long does it take to collect the money, is an important consideration. So the money gets blocked in to credit so it requires high amount of working capital requirement. 5. Business Fluctuation: When business is prosperous and prices are rising, the management likes to maintain the stocks. So that benefit of higher prices can be reaped later on. So, it requires larger amount of working capital. 6. Seasonal demand: Jalaram steel furniture pvt ltd. gets high demand of household furniture in market while marriage season. So at that time working capital requirement become high. It is also noted that if transportation of any firm is less developed its working capital requirement is high. 7. Size of the firm: Size of the firm also decides working capital requirement. If size of the firm is big then it requires high amount of working capital and vice-versa
Internal Audit Policies
Financial manager is checking financial report, which is related to, the Company after 15days or 1 month company auctioning its all financial report or all transaction related to the company checking by the auditor after completed its financial year. Financial manager preparing all plan related to company financial matter all decision taken by the financial manager.
? The internal audit and financial policy are as under:
? Financial year started on 1st April ? Method of accounting is “mercantile system” ? Methods of prepare stock register is “FIFO” (first come first out) ? Methods of depreciation is “Written down value method” ? Valuation of closing stock is valued at cost or market price whichever less is. ? Book maintains in computer are cash book, bank book, ledger, sales register, purchase register, journal, stock register.
BALANCESHEET
Particular SOURCES OF FUNDS Share holder funds: Share capital Reserves & surplus Loan funds: Secured loans Un secured loans Total APPLICATION OF FUNDS: Fixed assets: Gross block Less depreciation Net block Capital work in progress Investment Deferred Tax Asset Current Assets: Inventories Sundry Debtors Cash & Bank balances Loans & Advances Less: Current liabilities: Current liabilities Provisions Net current Assets Profit & Loss Account Total 8497.65 227.55 8725.20 7294.93 728.14 50807.87 5867.45 184.72 6052.17 10372.31 54198.52 AS AT (Rs. in lacs) AS AT (Rs. in lacs)
5815.80 22719.34 28535.14 19842.94 2426.79 22272.73 50807.87
5815.80 24718.29 30534.09 21234.61 2429.49 23664.43 54198.52
70334.42 33444.83 36889.59 874.56 37764.15 1.63 50019.02 8820.53 3918.38 47.09 3234.13 16020.13
70081.52 30018.38 40063.14 886.73 40949.87 1.63 2874.71 8165.66 4779.64 37.27 3441.91 16424.18
PROFIT AND LOSS ACCOUNT
Particular Income Sales: Domestic Exports Less: Excise Duty For the year 2009 For the year 2010
35580.81 67.56 35648.37 71.64 35576.73 365.50 35942.23 19862.46 9062.15 28924.64 7017.62 3402.47 (3615.16) 3433.40 (181.76) 20.05 55.11 106.59 1892.36 (1998.95) (0.18)
34,146.39 82.06 34,228.45 6.42 34222.03 452.88 34674.91 22523.97 99949.94 32473.91 2201.00 3620.12 (1419.12) 3435.28 (4854.40) 17.00 (2144.31) 2727.09 1998.95 (728.14) (4.69)
Other Income EXPEDITURE : Material Cost Manufacturing and other Expenses Profit before Interest & Depreciation Interest and Lease rent Profit /(Loss) before Depreciation & Tax Depreciation Profit /(Loss) before Tax Fringe Benefit Tax Deferred Tax/ ( Credit) Profit /(loss) after Tax Brought Forward surplus Surplus/ (Deficit) Carried Over to balance Sheet Basic/ Diluted Earnings per share (Rs.)
RATIO ANALYSIS
1. Gross profit ratio = Gross profit × 100 Sales 2009 = 7017.60 × 100 35648.37 = 2010 = 19.69% 2201 × 100 34228.45 = 6.43%
GROSS PROFIT RATIO
20 15 10 5 0 2009-10 2010-11 19.69 2009-10 2010-11 6.43
? This ratio indicates how much money taken by company for paying its operating expenses. Here gross profit ratios are respectively 19.69% and 6.43% which is good for the company.
2.
Net profit ratio
=
Net profit (after tax) × 100 Sales
2009
=
106.59 × 100 35648.37
= 2010 =
0.30% 2727.09 × 100 34228.45
=
7.97%
NET PROFIT RATIO
8 7 6 5 4 3 2 1 0
7.97 0.3
2009-10 2010-11
2009-10
2010-11
? This ratio indicates what amount left what amount left with owner after paying all the expenses. Higher ratio indicates its good for the company. Here net profit ratios are respectively 0.30% and 7.97%. company has improve its ratio in 2009 which is good for the company.
3.
Current ratio
=
Current assets Current Liability
2009
=
11948.55 6052.17
= 2010 =
1.97 : 1 11861 .51 8725.20
=
1.36 : 1
CURRENT RATIO
2 1.5 1 0.5 0 2009-10 2010-11 1.97 1.36 2009-10 2010-11
? This ratio indicates liquid position or the working capital position of the business. Here current ratios are respectively 1.97 : 1 and 1.36 : 1. in 2009 current ratio is decreased which is not so good for the company.
4.
Liquidity ratio
=
Current assets – Closing Stock Current Liability – BOD
2009
=
10523.05 8725.20
= 2010 =
1.21 : 1 8467.04 6052.17
=
1.40 : 1
LIQUIDITY RATIO
1.4 1.35 1.3 1.25 1.2 1.15 1.1 2009-10 2010-11 1.21 1.4 2009-10 2010-11
? This ratio indicates to have a better idea of the liquid position of the business. Here company’s liquid ratios are respectively 1.21:1 and 1.40:1.lower ratio indicates poor management of the company. In 2009 liquid ratio is increased, which is good for the company.
5.
Stock turn over ratio=
Cost of Goods Sales Avg. stock
2009
=
20894.12 2410.49
= 2010 =
867 times 16526.86 2044.73
=
808 times
STOCK TURN OVER RATIO
880 860 840 820 800 780 760 2009-10 2010-11 867 808 2009-10 2010-11
? This ratio indicates how easily stock move out of the business and increase the sales which results in increase the profit. Here stock turn over ratios are respectively 867 times and 808 times.
6.
Debtor ratio
=
Debtor + bills receivable Credit sales
2009
=
4779.64 × 365 35648.37
= 2010 =
48.93 = 49 Days 3918.38 34228.45 × 365
=
41.78 = 42 Days
DEBTOR RATIO
50 48 46 44 42 40 38 2009-10 2010-11 42 49 2009-10 2010-11
? This ratio indicates how many days are required to collect credit amount credit amount liability policy. Here in 2008 debtor ratio is 49 days which is decreased in 2009 indicates efficient management of the company.
7. Creditors ratio
=
creditors + bills payable × 365 Credit purchase
2009
= = =
4457.02 × 365 18751.07 87 Days 3080.89 × 365 19400.43
2010
=
=
58 Days
CREDITORS RATIO
100 80 60 87 40 20 0 2009-10 2010-11 58 2009-10 2010-11
? Here creditor ratio in 2008 is 87 days which is decreased in 2009, that is 58 days. It means company have to pay payment as quick as possible.
8. Creditors turn over ratio =
365
Creditors ratio 2009 = 365 87 Days = 2010 = = = 4.20 Times 365 58 Days 6.29 Times
DEBTORS TURN OVER RATIO
9 8.5 8 7.5 7 6.5 2009-10 2010-11 7.46 2009-10 8.74 2010-11
? Here in 2008 creditor turn over ratio is 4.20 times which is increased in 2009 that is 6.29 times. it is not good for the company.
9. Debtor turn over ratio
=
365
Debtor ratio 2009 = 365
= 49 Days = 7.46 Times 2010 = = = 365 42 Days 8.74 Times
DEBTORS TURN OVER RATIO
9 8.5 8 7.5 7 6.5 2009-10 2010-11 7.46 2009-10 8.74 2010-11
? Here in 2008 creditor turn over ratio is 7.46 which is increased in 2009 that is 8.74 times. This is also not good for the company.
10. Proprietary ratio =
Proprietary fund × 100 Total assets
2009
=
30534.09 × 100 52984.55
= 2010 =
57.63 % 28535.14 × 100 51924.65
=
54.95 %
PROPRIETARY RATIO
58 57 56 55 54 53 2009-10 2010-11 54.95 2009-10 57.63 2010-11
? Here in 2008 company’s proprietary ratio is 57.63% which is decreased in 2008 that is 54.95%. higher ratio suggest company has no liability.
11. Debt to equity ratio =
Long term liability × 100 Share holders fund
2009
=
23664.13 × 100 30534.09
= 2010 =
77.50 % 22272.73 × 100 28535.14
=
78.05 %
DEBTOR TO EQUITY RATIO
78.2 78 77.8 78.05 77.6 77.4 77.2 2009-10 2010-11 77.5 2009-10 2010-11
?
Here in 2008 company’s ratio is 77.50% which is increased in 2009 that is
78.50%.So, it is not so good for the company.
doc_312701107.docx