Академический Документы
Профессиональный Документы
Культура Документы
EXECUTIVE SUMMARY
VRL Logistics is one of the leading road transportation companies in India, with operation in parcel transportation, passenger express cargo, and aviation and courier segments. For the purpose of calculating the various ratios, the financial statement or Annual reports of recent three years is taken and analyzed. The objectives of this study are also to find out liquidity position, profitability, efficiency of VRL Logistics limited Varur, Hubli. The project consists of financial performance on the basis of different ratio. The study will reveal the financial performance of the firm which enables the management to know their financial strengths of the firm to make their best use. Ratio analysis is 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, other companies, the industry, or even the economy to judge the performance of the company. Financial statement provides summarized view of the financial position and operation of the company. Many parties are interested in financial statement analysis to know about the financial position of the firm. They include investors, creditors, lenders, suppliers etc. Ratio analysis is the widely used tool of financial analysis. It is the systematic use of ratio to interpret the financial statement so that strengths and weaknesses of a firm are determined. Values used in calculating financial ratios are taken from the balance sheet, income statement, statement of cash flows or (sometimes) the statement of retained earnings. These comprise the firm's "accounting statements" or financial statements. The statements' data is based on the accounting method and accounting standards used by the organization.
KLES COLLEGE OF BUSINESS ADMINISTRATION
transportation,
Procurement Logistics Production Logistics Distribution Logistics After sales Logistics Disposal Logistics In business, logistics may have either internal focus (inbound logistics),
or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies.
HUBLI-581207 KARNATAKA Corporate Office : Giriraj Annexe, Circuit House Road, HUBLI-580029 KARNATAKA Year of Establishment Communication Facility Turnover per Year Accounting Year Weekly Holiday Ownership Pattern Product : 31st march 1983 : Telephone, Fax, Internet : 6506620(in RS. Thousands) : April to March : Sunday : Proprietorship : Transportation (Passenger & Goods) Bankers : KSFC, Other Nationalized & Co-operative Banks Factory Area : 43 acre 5
VISION:
To become the premier company that cuts across various segments and emerges as the torchbearer of each segment that the Group ventures into.
Quick and safe service Customer satisfaction and employee satisfaction Competitive price Attain market leadership
10
Employees strength
There is a strong employer and employee relationship in VRL Logistics Ltd. Company such as provident funds, gratuity scheme, medical reimbursement, pension scheme, educational benefits, and maturity benefits etc, are provided by the company. The company introduced various novel schemes like payment to drivers based on mileage driven by them, even the hamals and drivers of the organization are extended by the benefit of ESI/PF etc. It is estimated that at least 30000 people are benefited by way of direct or indirect employment from company.
KLES COLLEGE OF BUSINESS ADMINISTRATION
11
Managing director looking after the general administrator, verification of accounts, bills and payments,
Logistics
12
Personnel Department
This Department manages the most skilled resource in the organization i.e. human resources of VRL Company. The Personnel Department looks after the following area. Recruitment staff Training the staff Allocation of work
13
Inspection department
This department look into official examination of different branches or departments to check whether the flow is continues or not. It involves following work process. Visiting & inspecting the branches Creating the inspection reports on branches Issuing reports to the administration department for correction or taking measures.
14
Marketing Department
This department is heart of the organization, which plans and decides about new marketing strategy to be introduced it also involves some activities such as: It takes customer feedback Follow up the customers feedback Form tariff rates Offers discounts in non peak times Formulates the promotional tools Identify the necessity of expansion of new branches, geographically Generates the reports an operation of new branches Plans for introducing way of generating funds and the passengers More offer and facilities
15
VRL COURIER SERVICE "On Time Every Time" Capitalizing on the synergy of our transport network that connects all over Karnataka, we are into Courier Services focusing on delivering documents and small parcels in a time bound manner. Storing & dedicated Operating Team Time Bound Delivery With An Emphasis "On Time Every Time" Delivery Schedules Ranging From 24/48/72/96 hours Dedicated Route Vehicles
16
17
18
19
20
21
22
organization records and information provided by the organization and its various department. Lack of adequate standards: There are no well-accepted standards or rules for all ratios, which can be accepted as norms. It renders interpretation of the ratios difficult. Limitation of time period: Not the limitation of study was the time constraint. It was not possible to make an extensive study so that the coverage confines to the period of past three financial year only.
23
valued and under- valued firms. 4. Make inter firm comparison: Ratio analysis makes possible comparison of the Performances of the different division of firm. The ratio is helpful in deciding about their efficiency or otherwise in the past and likely
24
current ratio, liquid ratio , debt equity ratio and net profit ratio etc, such an evaluation enables the management to judge the operating efficiency of the various aspects of business.
the business only when they are compared with past results
of the business or with result of a similar business. However, such comparison only provides a glimpse of the past performance and forecasting for may not be correct since several other factors market conditions, policies, etc may affect the future operation. 2. Limitation of financial statement: Ratio are based only on the management
information which has been recorded in the financial statement and they suffer from number of limitation, the ratios derived there from, therefore, are also subject to those limitation, For example non financial changes though important for the business are statement. The comparison of one not revealed by financial
ratio analysis without taking into account the fact of companies having different accounting policies, will be misleading and meaningless. 3. Ratio alone is not adequate: Ratio is only indicator; they cannot be taken as final regarding good or bad financial position of the business. Other things have also to be seen .The value of ratio should not be regarded as good or bad.
KLES COLLEGE OF BUSINESS ADMINISTRATION
25
Standard of comparison:
The ratio analysis involves comparison interpretation of the financial statement. A single ratio in itself does not indicate favorable or unfavorable condition. Standards of comparison of may consist of: 1. Time series analysis: when financial ratio over a period of time is compared, it is known as time series analysis. 2. Cross- section analysis: another way of comparison is to compare ratio of one firm with some selected firms in the industry at the same pint in time. This kind of comparison is known as cross-section analysis. 3. Industrial analysis: To determine the financial conditions and
Performance of a firm, its ratio may compare with average ratio of the Industry which the firm is a member. This sort of analysis is known as industrial analysis. 4. Performa Analysis: Sometime future ratio is used as standards of comparison. Future ratios can be developed from the projected or Performa, financial statement.
26
Classification of Ratio:
Ratio can be classified into different categories depending upon the basis of classification. The traditional classification has been on the basis of the financial statement to which the determinants of a ratio belong. On the basis the ratio could be classified as, Profit and loss account Ratio Balance sheet Ratio Composite Ratio However the above basis of classification has been found to be crude and Unsuitable because analysis of balance sheet and Income statement cannot be done in isolation. They have to be studied together in order to determine the profitability and solvency of the business. They are now classified as: 1.Financial ratio :Financial ratio indicates about the financial position of the company. A company is deemed to be financially sound, if it is in position to carry on its business smoothly and meet all its obligation both long- term as well as short -term without strain. Thus, company financial position has to be judged in two ways long term as well as shortterm.
27
28
29
30
0 2009-10
0 2010-11
0 2011-12
Interpretation:
The trend is showing increment i.e. Net Asset turnover ratio in 2011-12 is 1.92 times comparing to 1.42 times in 2010-11. Therefore it indicates that the company producing 1.95 times of sales for one rupee of capital employed in net assets.
KLES COLLEGE OF BUSINESS ADMINISTRATION
31
690.85*100/738.58
95.53
47.73*100/2862.14
6034
2187.81*100/2909.87
75.18
991.8*100/5097.68
19.45
Interpretation From the year 2007-09 the profit is 95.53 for every 100 and it decreased to 6034 for every 100 and gradually increased from year 2009-11 to 75.18 for every 100 and in 2012 it is stabilized at 19.45 for ever hundred. Profit is stabilized from the year 2011-12
32
Year
Sales
Total assets
33
1.04
1.15
1.2
1.21
0 Year
0 2008-09
0 2009-10
0 2010-11
0 2011-12
Interpretation: The total assets ratio is increasing i.e. from 1.20 & 1.21 in the year 10-11 & 11-12 respectively. The higher ratio indicates that the assets are utilized properly by the company.
34
(Amt in lacks) Year 2008-09 2009-10 2010-11 2011-12 Sales 64202.81 70598.93 88196.68 112112.34 Net Fixed Assets 49130.56 47094.16 51153.37 69457.18 Fixed asset turnover ratio 1.30 1.49 1.72 1.61
35
1.3
1.49
1.72
1.61
0 2008-09
0 2009-10
0 2010-11
0 2011-12
Interpretation:
The ratio for 2011-12 reveals 1.61 of net fixed assets to sales, compare to 10-11 & 2009-10, therefore the trend indicates the assets are used not so efficiently in the year 11-12.
36
Note: Due to change in classification of current assets and current liabilites as per requirement of Revised Schedule VI, NWC Ratio is differing significantly in the current year as compared to previous years.
KLES COLLEGE OF BUSINESS ADMINISTRATION
37
6.99 0 2008-09
8.91 0 2009-10
Interpretation:
In 2008-09 net working capital ratio is 6.99 and it is increased to 8.91 and it decreased to 8.09 in the year 2009-10 & 2010-11 respectively. It indicates that working capital is not properly used in making sales in the year 2010-11.
38
39
(Amt in lacks) Gross profit Year Gross profit Sales Ratio (%) 2008-09 2009-10 2010-11 2011-12 20678.15 24708.45 28955.46 34415.97 64202.81 70598.93 88196.68 112112.34 32.20 34.99 32.83 30.69
32.2
34.99
32.83
30.69
2008-09
2009-10
2010-11
2011-12
Interpretation:
Gross profit decrease in 2010-11 32.83% to 2009-10 34.99% and it decreases in 2011-12 30.69%
40
efficiency
manufacturing, administering and selling the products. This ratio is the overall measure of the firms ability to turn each rupee sales into net profit.
Net Profit (Profit after tax) Net Profit Ratio = ---------------------------------------- x100 Net Sales (Amt in lacks) Year 2008-09 2009-10 2010-11 2011-12 Profit after Tax 47.73 2922.55 5097.68 4105.88 Sales 64202.81 70598.93 88196.68 112112.34 Net Profit Ratio (%) 0.074 4.13 5.77 3.66
41
0.074 2008-09
2009-10
2010-11
2011-12
Interpretation:
In the year 2011-12 the NPR ratio is 3.66% has reduced compared to the last year 2010-11 & also in the year 2009-10 i.e. 4.13% & 5.77% respectively. The decrease was due to deferred taxes in the year 2011-12.
42
overhead and salaries to employee by sales. Operating expenses Operative Cost/ overhead= ----------------------------------- X 100 Net Sales (Amt in lacks) Year 2008-09 2009-10 2010-11 2011-12 Operating expenses 44388.05 46759.02 60336.08 72457.56 Sales 64202.81 70598.93 88196.68 112112.34 Ratio in percentage 69.13 66.23 68.41 64.63
43
69.13
66.23
68.41
64.63
2008-09
2009-10
2010-11
2011-12
Interpretation:
The Higher operating expenses ratio is unfavorable since it will leave a small amount of operating income to meet interest, dividends etc. The temporary variations on ratio are due to change in administration & selling expenses. The lower percentage of ratio is favorable to the company.
44
(Amt in lacks) Year Adm & Selling Sales Expenses 2008-09 2009-10 2010-11 2011-12 1207.67 1475.20 1425.35 1731.77 64202.81 70598.93 88196.68 112112.34 Ratio percentage 1.88 2.08 1.61 1.54 in
45
1.88
2008-09
2009-10
2010-11
2011-12
Interpretation: The Administrative Expense ratio has decreased to 1.61% in 2010-11, and again decreased to 1.54 which indicates that the firm is cutting down its administrative cost which is a good sign.
46
47
48
49
50
short term securities that will improve their liquidity position and profitability. The company should utilized fixed asset optimally in generating the sales. As the huge funds are blocked in fixed assets, instead investing in current assets facilitates in meeting out the short term liability. Since the VRL Logistics Ltd is earning the profit, this will attracts many investors. Hence the company should concentrate on the expansion of the business and also they should contribute towards the overhead for the welfare of the society. Company of depending more on external funds, It can also study the feasibility of internal source, so it can still expand its capacity considering the demand. Work environment should be improved and good working condition should be provided. The company should utilize assets efficiently. The company has to utilizes fixed assets properly which means they have to get renovate the machineries, vehicles
51
52
53
54
Annexure
55