abhishreshthaa
Abhijeet S
FINDINGS OF CHIT FUND
1. The overall profitability ratio indicates the firm’s ability to generate profit per rupee of capital employed. The ideal overall profitability ratio is about 15%.
Higher the ratio, more efficient is the management and high productivity of capital employed and on the other hand it is vice-versa. From the data analysis we can find out that the overall profitability ratio was high in the year 2001-02 and low in the year 2002-03. This tells us that the productivity of capital employed was high in the year 2001-02 and low in the year 2002-03.
2. We can observed from the data analysis chart that the Return on Total Assets was high in the year 2001-02 and low in the year 2002-03. This ratio also indicates the firm’s ability to generate per rupee of total assets. Higher the ratio more efficient the management and utilization of total assets and on the other hand it is the vice-versa. Finally we could find out that the firm’s utilisation of total assets was high in the year 2001-02 and low in the year 2002-03.
3. The EPS helps in determining the market price of equity shares of the firm. Higher the EPS indicates the rise in market price of the share. After the analysis we could find out that the EPS was low in the year 2002-03 when compared to 2003-04 which had the highest EPS value in the last 3 years. This shows that the market price of the shares of the firm was high in the year 2003-04.
4. We can also find out from the data analysis chart that the Price Earning Ratio was highest in the year 2002-03 and lowest in the year 2003-04. High P.E.R indicates the better chances of appreciation in the market price of the shares of the company.
5. The Net Profit Ratio was highest in 2003-04 and lowest in the year 2002-03. This indicates that the profitability of the firm had improved in 2003-04 when compared with last 3 years profit.
6. The capital turnover ratio was highest in the year 2001-02 and low in the year 2003-04. High ratio in 2001-02 indicates that the capital employed had been utilized effectively compared to other 2 years.
7. We could find out that the fixed assets turnover ratio was highest in the year 2001-02 and lowest in the year 2002-03 when compared with 3 years ratio. This indicates that the fixed assets were utilized effectively in 2001-02.
8. We can find out that Total Assets Turnover Ratio was highest in the year 2001-02 and lowest in the year 2003-04. This ratio indicates that the total assets were utilized effectively in 2001-02 compared to other years.
9. We can find out that the current ratio was highest in the year 2003-04 and lowest in the year 2001-02 when compared to last 3 years. The ideal current ratio is 2:1. When the current ratio is compared with the standard ratio, the ratio is less than the standard ratio. This indicates that the firm is not liquid in nature.
10. The standard quick ratio is 1:1. From the data analysis chart we can find out that the highest ratio was in the year 2003-04 and lowest in 2002-03 when compared with last 3 years ratio. As the ratio is less than the standard ratio it can be concluded that the firm is not liquid in nature.
11. From the data analysis chart we can find that the cash ratio was highest in 2002-03 and low in 2001-02. The ideal cash ratio is 1:2. Compared to this ratio, the cash ratio of the firm is low, which implies that the concern is not liquid.
12. We can find that the equity ratio was same in 2 years 2001-02 and 2003-04 and low in the year 2002-03. Equity ratio indicates the relative risks of the owners and creditors of the enterprise. Higher the ratio, stronger is the financial position of the firm and on the other hand it the opposite. The standard equity ratio is 5:1. It is also found that the firm’s ratio is less than the standard ratio though it has maintained its cash level position.
13. We can find out that the company had maintained its fixed assets ratio constantly for the above three years. The ideal fixed assets ratio should not be more than 1. As the firm’s ratio doesn’t exceed more than 1, it indicates that a portion of fixed assets have been financed by the shareholders fund.
14. From the comparative balance sheet we can find out that the current assets of 2003-04 have increased when compared to previous year. This has to be decreased as it may block the funds of the company. The fixed assets of the company have decreased in 2003-04 when compared to previous year. The fixed assets of the company have to be increased. There is also an increase in the current liabilities in the year 2003-04 when compared to the previous year. This has to be slightly controlled and should be decreased in order to be in a secured position.
15. The trend of reserves and surplus of 3years i.e. 2001-02, 2002-03 and 2003-04 is calculated. 2003-04 has the highest trend value. This means that the trend of reserves and surplus shows an upward trend.
16. From the trend of fixed assets chart we can find out that the trend was highest in the year 2003-04. From the chart we can also find out that the trend of fixed assets showed an upward trend.
17. From the trend of current assets chart we can find out that, there was a gradual increase in the trend of current assets employed by the firm. But the trend was highest in the year 2003-04. Finally we can infer that there was an upward trend in the current assets.
18. From the trend of current liabilities chart we can find out that the trend of the current liabilities had increased every year and that the trend was highest in the year 2003-04. Finally we can conclude that the current liabilities show an upward trend.
19. From the trend of debtors chart we can find out that the trend was highest in the year 2003-04 and lowest in the year 2001-02. This shows that there was an upward trend i.e. there was an increase in debtors.
20. From the trend of investment chart we can find that the investments trend showed an upward trend.
21. From the trend of profits chart we can find out that. From this chart we can know that in the 2001-02 there was a high profit.
1. The overall profitability ratio indicates the firm’s ability to generate profit per rupee of capital employed. The ideal overall profitability ratio is about 15%.
Higher the ratio, more efficient is the management and high productivity of capital employed and on the other hand it is vice-versa. From the data analysis we can find out that the overall profitability ratio was high in the year 2001-02 and low in the year 2002-03. This tells us that the productivity of capital employed was high in the year 2001-02 and low in the year 2002-03.
2. We can observed from the data analysis chart that the Return on Total Assets was high in the year 2001-02 and low in the year 2002-03. This ratio also indicates the firm’s ability to generate per rupee of total assets. Higher the ratio more efficient the management and utilization of total assets and on the other hand it is the vice-versa. Finally we could find out that the firm’s utilisation of total assets was high in the year 2001-02 and low in the year 2002-03.
3. The EPS helps in determining the market price of equity shares of the firm. Higher the EPS indicates the rise in market price of the share. After the analysis we could find out that the EPS was low in the year 2002-03 when compared to 2003-04 which had the highest EPS value in the last 3 years. This shows that the market price of the shares of the firm was high in the year 2003-04.
4. We can also find out from the data analysis chart that the Price Earning Ratio was highest in the year 2002-03 and lowest in the year 2003-04. High P.E.R indicates the better chances of appreciation in the market price of the shares of the company.
5. The Net Profit Ratio was highest in 2003-04 and lowest in the year 2002-03. This indicates that the profitability of the firm had improved in 2003-04 when compared with last 3 years profit.
6. The capital turnover ratio was highest in the year 2001-02 and low in the year 2003-04. High ratio in 2001-02 indicates that the capital employed had been utilized effectively compared to other 2 years.
7. We could find out that the fixed assets turnover ratio was highest in the year 2001-02 and lowest in the year 2002-03 when compared with 3 years ratio. This indicates that the fixed assets were utilized effectively in 2001-02.
8. We can find out that Total Assets Turnover Ratio was highest in the year 2001-02 and lowest in the year 2003-04. This ratio indicates that the total assets were utilized effectively in 2001-02 compared to other years.
9. We can find out that the current ratio was highest in the year 2003-04 and lowest in the year 2001-02 when compared to last 3 years. The ideal current ratio is 2:1. When the current ratio is compared with the standard ratio, the ratio is less than the standard ratio. This indicates that the firm is not liquid in nature.
10. The standard quick ratio is 1:1. From the data analysis chart we can find out that the highest ratio was in the year 2003-04 and lowest in 2002-03 when compared with last 3 years ratio. As the ratio is less than the standard ratio it can be concluded that the firm is not liquid in nature.
11. From the data analysis chart we can find that the cash ratio was highest in 2002-03 and low in 2001-02. The ideal cash ratio is 1:2. Compared to this ratio, the cash ratio of the firm is low, which implies that the concern is not liquid.
12. We can find that the equity ratio was same in 2 years 2001-02 and 2003-04 and low in the year 2002-03. Equity ratio indicates the relative risks of the owners and creditors of the enterprise. Higher the ratio, stronger is the financial position of the firm and on the other hand it the opposite. The standard equity ratio is 5:1. It is also found that the firm’s ratio is less than the standard ratio though it has maintained its cash level position.
13. We can find out that the company had maintained its fixed assets ratio constantly for the above three years. The ideal fixed assets ratio should not be more than 1. As the firm’s ratio doesn’t exceed more than 1, it indicates that a portion of fixed assets have been financed by the shareholders fund.
14. From the comparative balance sheet we can find out that the current assets of 2003-04 have increased when compared to previous year. This has to be decreased as it may block the funds of the company. The fixed assets of the company have decreased in 2003-04 when compared to previous year. The fixed assets of the company have to be increased. There is also an increase in the current liabilities in the year 2003-04 when compared to the previous year. This has to be slightly controlled and should be decreased in order to be in a secured position.
15. The trend of reserves and surplus of 3years i.e. 2001-02, 2002-03 and 2003-04 is calculated. 2003-04 has the highest trend value. This means that the trend of reserves and surplus shows an upward trend.
16. From the trend of fixed assets chart we can find out that the trend was highest in the year 2003-04. From the chart we can also find out that the trend of fixed assets showed an upward trend.
17. From the trend of current assets chart we can find out that, there was a gradual increase in the trend of current assets employed by the firm. But the trend was highest in the year 2003-04. Finally we can infer that there was an upward trend in the current assets.
18. From the trend of current liabilities chart we can find out that the trend of the current liabilities had increased every year and that the trend was highest in the year 2003-04. Finally we can conclude that the current liabilities show an upward trend.
19. From the trend of debtors chart we can find out that the trend was highest in the year 2003-04 and lowest in the year 2001-02. This shows that there was an upward trend i.e. there was an increase in debtors.
20. From the trend of investment chart we can find that the investments trend showed an upward trend.
21. From the trend of profits chart we can find out that. From this chart we can know that in the 2001-02 there was a high profit.