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Internal Supervision of :
Mr. TUSHAR KUMAR
(Faculty, MBA Deptt.)
MOHSIN KHAN
MBA-III SEM
ROLL NO.1431170026
STUDENT DECLARATION
I am MOSHIN KHAN student MBA- III SEM here by declared that the
research
report
entitled
ANALYSIS
THE
FINANCIAL
The imperial finding in this report is based on the data collected by me. I
have not submitted this Summer Training report to submitted to DR. APJ
ABDUL KALAM TECHNICAL UNIVERSITY, LUCKNOW or not any
other University for the purpose of compliance of any requirement of any
examination or degree.
MOHSIN KHAN
MBA-III SEM
ROLL NO.1431170026
PLACE:
ACKNOWLEDGEMENT
Behind every study their stands a myriad of people whose help and
contribution make it successful. Since such a list will be a
prohibitively long, I may be excused for important omissions.
The
guidance,
help
and
co-operation
of
my
supervisor
PREFACE
This project has been undertaken in the partial fulfillment of our summer
training requirement during the pursuance of MBA (finance) from
DEWAN VS. INSTITUTE OF ENGINEERING & TECHNOLOGY
Practical training is an essential part of every professional program. It is very
helpful in proving knowledge for the practical aspects of academic studies. It
is also helpful to go through the actual procedures at the work place.
In the project, title Analysis the Financial Performance through Ratio
Analysis, the area covered includes tools and techniques for analysis and
interpretation of financial statements like common size statements,
comparative analysis and ratio analysis.
It has been my endeavor to bring out the procedure regarding efficient
collection of information, its presentation and also the decision making
process arising theyre from.
CONTENTS
8
7-9
10-25
26-54
55-93
Research methodology
93-94
Data analysis
Limitation
Suggestion
Conclusion
Bibliography
95-119
120
121
122
123
2. Data Analysis
(i)
Current Ratio
(ii)
Quick Ratio
(iii)
(iv)
(v)
(vi)
Creditors Turnover
(x)
(xi)
INTRODUCTION
As my project in Bajaj Allianz, I worked on the analysis of the financial
position of the company. For this the main tool, which is used, is Ratio
Analysis. Financial analysis is the process of identifying the financial
strengths and weaknesses of the firm by properly establishing relationship
between the items of the balance sheet and profit and loss account.
The science of financial analysis. Says Navin Chandra Joshi is
assuming art increasingly important role for appraising the real worth of a
going concern.
An analysis of several financial tools provides all-important basis for
valuing securities and appraising managerial programs. Financial analysis
is a vital apparatus for the interpretation of financial statement.
Financial statements of a company include Trading and Profit and Loss
account, profit and Loss Appropriation and Balance sheet.
COMPANY
PROFILE
10
COMPANY PROFILE
Bajaj Allianz Life Insurance Company Limited
Bajaj Allianz Life Insurance Co. Ltd. is a joint venture between two leading
conglomerates- , Bajaj Auto, one of the biggest 2 and 3 wheeler
manufacturers in the world and Allianz AG, one of the world's largest
insurance companies.
Vision
To be the first choice insurer for customers
12
Mission
As a responsible, customer focused market leader, we will strive to
understand the insurance needs of the consumers and translate it into
affordable products that deliver value for money.
Allianz Group
Allianz Group is one of the world's leading insurers and financial services
providers.
Founded in 1890 in Berlin, Allianz is now present in over 70 countries with
almost 174,000 employees. At the top of the international group is the
holding company, Allianz AG, with its head office in Munich.
Allianz Group provides its more than 60 million customers worldwide with a
comprehensive range of services in the areas of:
Property and Casualty Insurance,
Life and Health Insurance,
Asset Management and Banking.
Easy access and reach across the country
13
Bajaj Allianz Life has offices now in over 510 towns across the country
enabling customer to buy our products and get quality efficient service
almost anywhere across the country
Bajaj Group
Bajaj Auto Ltd, the flagship company of the Rs. 8000 crore Bajaj group is
the largest manufacturer of two-wheelers and three-wheelers in India and
one of the largest in the world.
A household name in India, Bajaj Auto has a strong brand image & brand
loyalty synonymous with quality & customer focus.
14
Bajaj Auto finance one of the largest auto finance cos. in India
It has joined hands with Allianz to provide the Indian consumers with a
distinct option in terms of life insurance products.
As a promoter of Bajaj Allianz Life Insurance Co. Ltd., Bajaj Auto has
the following to offer -
A strong brand-equity.
has
fallen
to
71.04
from
78.07%
in
2004-05.
The Bajaj Allianz Life Insurance with a market share of 26.5 % in the
private sector life insurance segment has emerged as the No 1 private
sector life insurance company in 2005 -06 as per IRDA results, leading
by Rs 78 crore in the new business. The total new premium of the Bajaj
Allianz
Life
Insurance
is
estimated
at
Rs
2715
crore.
It is also the no 1 private sector life insurance co. for individual life
business (retail) as per IRDA results leading by Rs 339 cr. in the new
16
business. The company has grown by 216 % for the FY 05- 06.
The former no 1 private sector life insurance company ICICI Prudential
has a market share of 25.7% in the private sector life insurance sector.
The total new premium of the company is at Rs 2637 crore.
The gross premium income of HDFC Standard Life Insurance Company
Limited (HDFC-SL) for the year ended March 31, 2006 was Rs. 1,570
crores as compared to Rs. 687 crores in the previous year a growth of
129%. New business premium income amounted to Rs. 1,026 crores as
compared to Rs. 486 crores last year. The cumulative sum assured stood
at
Rs.
47,730
crores.
For the year ended March 31, 2006 reported a profit after tax of Rs. 4.41
crores as against a loss of Rs. 7.98 crores in the previous year.
The gross written premium for the year stood at Rs 206 crores as
compared to Rs 184 crores in the previous year. The total new premium
of Reliance Life Insurance which bought over the business of AMP
Sanmar is estimated at Rs 193 crore. The Bajaj Allianz General Insurance
with a total new premium of around Rs 1500 crore is reported to have
made a profit of Rs 50 crore in 2006-07.
The ICICI Lombard with a new premium of over Rs 1500 crore in 200607.The private sector life insurance industry has recorded a growth of 84
% in 2006-07.The Tata Aig has posted a total new premium of Rs 463
17
crore while SBI Life has grown by Rs 828 crore during the year. Aviva
Life has increased its premium by Rs 407 crore while Birla Sunlife has
grown its premium by Rs 678 crore in 2006-07
Why Bajaj Allianz?
Claims Philosophy
The Bajaj Allianz team follows a service that aims at taking the anxiety out of claims
processing. We pride ourselves on a friendly and open approach. We are focused towards
providing you a hassle free and speedy claims processing.
Our claims philosophy is to :
Be flexible and settle fast
Ensure no claim file to be seen by more than 3 people
Check processes regularly against the global Allianz OPEX (Operational Excellence)
methodology
Sold over 1 million since inception.
Customer Orientation
At Bajaj Allianz, our guiding principles are customer service and client satisfaction. All our
efforts are directed towards understanding the culture, social environment and individual
insurance requirements - so that we can cater to all your varied needs.
Experienced and Expert Servicing Team
We are driven by a team of experienced people who understand Indian risks and
are supported by the necessary international expertise required to analyse and
assess them.
Superior Technology
In order to ensure speedy and accurate processing of your needs, we have established
world class technology, with renowned insurance software, which networks all our
19
Using the Web, policies can be issued from any office across the country for retail
products
Unique, user friendly software developed to make the process of issue of policies
and claims settlement simpler (e.g. online insurance of marine policy certificate)
Film insurance
Risk retention
20
Agency Channel
Bancassurance
Branches
Standard Chartered
Bank
Satellite
Satellite
Syndicate Bank
Satellite
Group Employee
Benefit
Corporate Agency
Franchisee
Centurion Bank
Brokers
Cosmos Bank
Jankalyan Sahakari Bank
Jijamata Sahakari
Co-op Bank
21
Hana Bank
Grand
Commercial
Mala
ysia
Thail
and
Eu
ro
pe
Ge
rm
an
y
Union Bank
Alliance
Bank
Bank of
Ayudhya
Fr
an
ce
Ital
y
Bradesco
Banco Bice
BanCrecer
Sout
h
Amer
ica
Brasil
Sp
ain
Po
rtu
gal
22
Dresdner Bank
Hypo Vereins bank
Raiffeisen bank
Credit Lyonnais
Unicredito Italiano
Rolo Banca
Casa di Risparmio
Banco di Scicilia
Banco Antoniana
Popolare
Banco Regionale
Europea
Banco Popular
BPI-SGPS
Bawag
Ergo Bank
Bank of Piraeus
Zagre backa Bank
Bulbank
Pekao S.A.
TOOLS OF ANALYSIS
Trading and profit and loss account, balance sheet and various schedules
prepared at the end of the year do not always convey to the reader the real
significance of operating results financial health of the business. And
rarely can satisfactory diagnosis be reached on the basis of such
information alone.
The analysis of the facts and related data was considered to be important
and a number of techniques were developed and the most important
techniques are given below:
I) RATIO ANALYSIS:
An analysis of financial statements on the basis of ratio is known as ratio
analysis. A ratio is a mathematical relationship between two or more
related items taken from financial statements. Ratio analysis is very
helpful to outsiders as well as to the management.
23
24
RATIO ANALYSIS
An analysis of the financial statements with the help of ratio may be
termed as Ratio Analysis. It involves the process of computing,
determine and presenting the relationship of items of financial
statements and comparison and interpretation of these ratios and uses
them for future projections.
MEANING OF RATIO:
A ratio is a mathematical relation ship between two related items
expressed in quantitative firm. This quantitative relationship may be
expressed in either of the following ways:
25
OBJECTIVE:
The objective of ratio analysis is to help management in analyzing
and interpreting the financial statement, to get adequate information
useful for the performance of various function like planning
coordination, control, communication and forecasting etc. Some
general utility of ratio analysis is given below:
a) Trends in cost, sales, profit and other facts are related by the past
ratios and the future events can be forecasted on the basis of such
trends.
b) Ideal ratios may be constructed and the relation found between
strategic ratios may be used for achieving desired coordination.
c) Ratios may be used as instrument of management control
particularly in the areas of sales and costs.
d) Ratios are also facilitating the function of communication.
e) Ratios also may be used as a measure of efficiency.
f) It helps to make profitable investments.
26
STANDARD OF COMPARSION:
The ratio involved comparison for a useful interpretation of the
financial statements. A single ratio in itself does not indicate
favorable or unfavorable condition. It should be compared with
some standard. Standards of comparison ma consists of:
28
a) Past ratios, i.e., ratios calculated from the past financial statement
of the same firm;
b) Competitors ratios, i.e., ratios of some selected firms, especially
the most progressive and successful competitor , at the same
point in time;
c) Industry ratios , i.e., ratio of the industry to which the firm
belongs;
And
d) Projected ratios, i.e., ratios developed using the projected, or
Performa, financial statements of the same firm.
29
30
32
be
considered
with
accounting
document
for
interpretation.
g) Non financial data ratios based on financial data of firm should
be considered with non- financial data to supplement the
financial ratios and give better interpretation.
33
TYPES OF RATIOS
Ratio can be classified for the purpose of exposition into four broad
groups:
Liquidity ratio
Leverage ratio
Profitability ratio
Activity ratio
LIQUIDITYRATIO:
Liquidity ratio s measures the short term solvency or the short
term financial soundness of the business. It is extremely essential for
a firm to be able to meet its obligations they become due.
Liquidity Ratios measure the ratio ability of the firm to meet his
current obligation, this ratio is also an effective source to ascertain
whether the working capital has been effectively utilizes.
Liquidity in the ratio means ability to repays loans. In fact analysis of
liquidity needs the preparation of cash budget and cash and fund
flow statements but Liquidity ratio by establishing a relation ship
between cash and other current assets to current obligation, provide a
quick measure of liquidity.
The failure of company to meet its obligation, due to lack sufficient
liquidity, will result in bad credit image; loss of creditors
34
CURRENT RATIO
QUICK RATIO
CASH RATIO
NET WORKING CAPITAL RATIO
LEVERAGE RATIOS
A firm should have a short-term as well as long term financial
position. To judge the long term financial leverage or capital
structure. In other word, it can be said that this financial ratios
through light on the long-term solvency of a firm as reflected in its
ability to assure the long-term creditors with regard to:
(a) Periodic payment of interest during the period of the loan.
(b) Repayment of principal on maturity.
35
38
PROFITABILITY RATIOS:
It is fact that sufficient profit must be earned to sustain the operations
of the business to be able to obtain funds from investors for
expansion and growth and to contribute towards the social overheads
for the welfare of the society.
Profit is the difference between revenue and expenses over a period
of times.
Profit is the ultimate output of the company; it will have no, future if
it fails to make sufficient profit.
Therefore the profit ability ratios are calculated to measure the
operating efficiency of the company.
Generally, the major types of profitability ratios are:
Profitability in relation to sales
Profitability in relation to investment
A company should be able to produce adequate profit on each rupee
of sales .The profitability of the company should also be evaluated in
term of firms investment in assets and in term of capital contribution
b creditors and owners.
If the company profit has to be examined from the point of view of
all investors. He appropriate measure of profit is operating profit.
Operating profit is equivalent of earning before interest and tax.
39
40
LIQUIDITY RATIOS
CURRENT RATIO:
41
CURRENT RATIO =
CURRENT ASSETS
CURRENTLIABILITIES
Where,
Year
2013
2014
(lacs)
A)
2015
(lacs)
(lacs)
Current assets:
Inventories
348.86
275.38
297.10
Sundry Debtors
397.44
362.49
369.20
129.19
98.62
156.47
0.44
0.54
0.46
65.39
59.09
65.76
Total (A)
941.32
796.12
227.03
249.60
311.88
52.88
26.56
31.10
B)
888.99
Current Liabilities:
Sundry Creditors
Other Liabilities
42
73.33
84.26
93.44
353.24
360.42
436.42
2.66
2.21
2.03
A relatively high current ratio is an indication that the firm is liquid and has
the ability to pay its current obligation in time as when they become due,
vise versa. As a convention the minimum two to one ratio e.g. 2:1 is referred
as a banks rule of thumb.
QUICK RATIO:
Quick ratio establishes a relationship between quick assets or liquid assets
and current liabilities.
An asset is liquid if it can be converted into cash immediately or reasonably
soon without a loss of value.
Cash is considered most liquid assets.
OBJECTIVE AND SIGNIFICANCE:
This ratio is also an indicator of short term solvency of the firm .It is used to
test the short-term liquidity of the firm in its correct form.
This is calculated as by dividing of liquid assets by current liabilities.
QUICK RATIO =
INVENTORIES
CURRENT ASSETS
43
CURRENT LIABILITIES
Where,
Year
2013
2014
(lacs)
A)
2015
(lacs)
(lacs)
Current assets:
Inventories
348.86
275.38
297.10
Sundry Debtors
397.44
362.49
369.20
129.19
Accrued Interest
0.44
98.62
0.54
65.39
0.46
59.09
941.32
156.47
65.76
796.12
888.99
227.03
249.60
311.88
52.88
26.56
31.10
73.33
84.26
93.44
353.24
360.42
436.42
1.68
1.44
1.36
B) Current Liabilities:
Sundry Creditors
Other Liabilities
Pro. for Leave
Encashment
Total (B)
Then ratio is:
Remarks:
44
Usually high quick ratio is an indication that the firm is liquid and has the
ability to meet its current liabilities in time .As a rule of thumb or as a
convention quick ratio of one to one i.e., 1: 1 is considered satisfactory.
CASH RATIO:
Since cash is the most liquid assets be examined cash ratio and its equivalent
to current liabilities.
CASH RATIO
SECURITIES
CASH + MARKETABLE
CURRENT LIABILITIES
Year
2013
2014
(lacs)
(lacs)
2015
(lacs)
45
Net Working Capital measures the firms potential reserveror of funds. It can
be related to net assets or capital employed.
NET WORKINGCAPITAL
NET ASSETS
2013
2014
(lacs)
2015
(lacs)
(lacs)
Current assets
Less :current
941.32
796.12
liabilities
353.24
888.99
360.42
436.42
588.08
452.57
NET ASSETS:
46
435.70
Year
2013
2014
2015
(lacs)
(lacs)
(lacs)
FIXED ASSETS
(LESS DEPRICATION)
114.25
115.53
113.03
588.08
435.70
702.33
0.80
Remarks:
Higher the ratio higher the liquidity.
47
452.57
551.23
565.60
0.79
0.80
Table 1)
LIQUIDITY RATIOS
2013
2014
2015
YEAR
2.66
2.21
2.03
1.68
1.44
1.36
0.36
0.27
0.36
0.80
0.79
0.80
CURRENTRATIO
QUICK RATIO
CASH RATIO
WORKING CAPITAL
RATIO
48
COMMENT:
In the above calculation of liquidity ratio, the entire ratios are good but
above the standard ratio limit of the liquidity except the cash ratio.
In the current ratio of the company in year the 2006, 2007, 2008 the ratio is
2.66, 2.21, and 2.03 respectively.
These ratios of liquidity indicate the over capitalization of current assets.
In quick ratio, the ratios shows the company enjoy the high liquidity
position, it is good however too much liquidity is not beneficial for the
company future and the quick ratios is also more than the standard ratio.
The cash ratio of the company, the ratios is well below the standard, it means
that the company does not keep sufficient cash.
Working capital ratio shows the liquidity position of the company is good.
So overall liquidity position of the company is satisfactory except the cash
poor performance and the Current ratio and Quick ratio shows over the
standard ratio.
49
LEVERAGE RATIO:
Bajaj allianz is one of the units of the Gangol Sahakari Dugdh Utpadak
Sangh limited.
So it is hard to calculate the Leverage Ratio as a separately because its shares
are jointly issued and in-group the debts are taken.
So calculation is separately not possible because separate datas are not
available.
50
ACTIVITY RATIO
Capital turnover ratio establishes the relationship between sales and capital
employed.
The objective of working out this ratio is to determine how efficiently the
capital employed is being used and this in turn shows the promises of
profitability and efficiency of management.
It is calculated as Capital Turnover Ratio.
NET SALES
CAPITAL EMPLOYED:
51
114.25
115.53
113.03
Add. WORKING
CAPITAL
TOTAL
588.08
435.70
702.33
452.57
551.23
565.60
WORKING CAPITAL:
YEAR
CURRENT ASSETS
2006
2007
2008
(lacs)
(lacs)
(lacs)
941.32
796.12
888.99
360.42
436.42
435.70
452.57
Less. CURRENT
LIABILITIES
TOTAL
353.24
588.08
52
YEAR
SALES
2013
2014
1914.66
2142.51
2.72
3.89
2015
2699.31
4.77
Remarks:
Higher the ratio the better it is. However too high a ratio may indicate over
trading resulting in paucity of funds.
Working Capital turnover ratio indicates the velocity of the Utilization of net
working capital. This ratio indicates the number of times the working capital
is turn over in the course of a year.
53
SALES
WORKING CAPITAL
Where,
Year
2013
2014
(lacs)
Sales
1914.66
2015
(lacs)
(lacs)
2142.51
2699.31
941.32
796.12
888.99
353.24
360.42
436.42
Working Capital:
Current assets
Less:Current
Liabilities
Total
588.08
435.70
3.26
4.92
Remarks:
A higher the ratio indicates efficient utilization of working capital.
54
452.57
5.96
NET SALES
FIXED ASSETS
Where,
Year
Sales
2006
2007
2008
(lacs)
(lacs)
(lacs)
1914.66
2142.51
2699.31
114.25
115.53
113.03
16.76
18.55
23.88
Remarks:
55
Higher the ratio is it better of the business. An increasing trend shows that
financial Assets are utilized efficiently to achieve higher sales.
This ratio indicates the efficiency with which debts are collected .It will be in
the interest of business, if the ratio is higher which will indicate the debts are
collected quickly.
This ratio is calculated as by the following formula:
TOTAL SALES
ACCOUNT RECEIVABLE
56
YEAR
2013
2014
2015
(lacs)
(lacs)
(lacs)
1914.66
2142.51
2699.31
TOTAL DEBTOR
458.24
410.57
422.48
4.18
5.22
6.39
TOTAL SALES
Remarks:
E)
Creditors turnover ratio indicates the velocity with which the payment for
credit purchase is made to creditors.
OBJECTIVE AND SIGNIFICANCE:
Creditors turnover ratio is the debt payment enjoyed with indicates whether
the firm is enjoying actually the credit premised by suppliers.
TOTAL PURCHASE
ACCOUNT PAYABLE
YEAR
TOTALPURCHASES
TOTAL PAYABLE
2013
2014
(lacs)
(lacs)
(lacs)
634.31
797.74
1140.73
227.03
249.60
2.79
3.20
2015
311.88
3.66
Remarks:
Higher creditors turnover ratio indicates that company ii increasing trend
prompt in paying its creditor which enhance its creditworthiness but it also
signify that company is taking full advantages of credit facilities provide by
creditors period is beneficial for the company.
58
Table2)
ACTIVITY RATIOS
YEAR
TOTALCAPITAL
2.61
3.89
4.77
3.26
4.92
5.96
16.76
18.55
23.88
4.18
5.22
6.39
2 .79
3.20
3.66
TURNOVER
WORKING CAPITAL
TURNOVER
FIXEDASSESTS
TURNOVER
DEBTORSTURNOVER
CREDITORS TURNOVER
COMMENT:
59
In the above calculation of turnover ratio of the company, the ratio of these
shows that the performance of business is better and all the available
resources are well utilized.
The total capital turnover ratio shows good sign of increasing trend. Which
indicate the efficient used of the employed capital in sales.
The working capital ratio, it shows the better utilization of the working
capital incurred in the operation.
The above fixed assets turnover ratio shows a good sign and indicates that
company utilized its fixed assets in good manner in conversion of its net
assets to the sales.
The debtors turnover ratio shows of increases trend year by year that means
the company provide its credit payment period to its customers, which
indicate the liberal debt collection policy of the company.
The calculated creditors turnover ratio indicates the company enjoys good
credit payment period from its creditors.
60
So, overall the turnover ratio of the company is good except the debtors
turnover ratio, which shows the liberal collection policy, and more credit
collection period given to its customers, which is not beneficial of company
growth.
PROFITABILITY RATIOS
61
A)
Gross profit equal the difference between net sales revenue and the cost of
goods sold.
The gross profit margin reflects the efficiency with which management
produces the each unit of product.
This ratio indicates the average speed between the cost of goods sold and the
sales revenue.
OBJCTIVEAND SIGNIFICANCE:
Gross profit ratio is a reliable guide to the adequacy of selling prices and
efficiency of stock control.
62
GROSS PROFIT
100
NET SALES
OR
Sales cost of goods sold
100
Net sales
Where,
Year
GROSS PROFIT:
NET SALES:
2013
2014
2015
(lacs)
(lacs)
(lacs)
770.00
825.41
1957.38
1914.66
2142.51
40%
39%
Remarks:
Higher the ratio better is the result.
63
2699.31
72%
This ratio establishes a relationship between net profit and sales and
indicates management efficiency in manufacturing, administrating, and
selling the product.
This ratio is the overall measure of the firms ability to turn each rupee sales
into net profit.
If the net margin is inadequate firm will fail to achieve the satisfactory return
on owners equity.
OBJECTIVE AND SIGNIFICANCE:
Net profit ratio helps in determining the efficiency of the business.
Objective of working net profit ratio is to determine whether operating cost
is with in the desired parameters or not.
This ratio of Bajaj allianz is calculated from the following formula:
NET PROFIT
NET SALES
64
100
Year
2013
2014
(lacs)
Net profit:
Net sales
(lacs)
49.99
71.68
1914.66
2142.51
3%
3%
2015
(lacs)
130.88
2699.31
5%
Remarks:
A)
EXPENSES RATIOS:
Expense ratios are calculated to ascertain the relationship that exists between
operating expenses and volume of sales.
These ratios are calculated by dividing the sales into each individual
operating expenses.
65
OBJECTIVEAND SIGNIFICANCE:
These ratios are valuable in comparing various firms in the same industry of
operating data from year to year for the same firm.
a)
RAW-MATERIAL USED =
MATERIAL COST
100
NET SALES
YEAR
2013
2014
(lacs)
RAW- MATERIAL
NET SALES
Then the ratio is
(lacs)
673.10
812.20
2015
(lacs)
1113.95
1914.66
2142.51
2699.31
35%
38%
41%
66
100
NET SALES
YEAR
2013
2014
(lacs)
DIRECT LABOUR
NET SALES
(lacs)
66.78
(lacs)
70.82
1914.66
2015
140.74
2142.51
2699.31
3%
5%
3%
FACTORY EXPENCES
100
NET SALES
Where,
YEAR
2013
(lacs)
2014
(lacs)
FACTORY EXP.
169.49
NET SALES
1914.66
2142.51
9%
9%
183.59
2015
(lacs)
246.74
2699.31
9%
OFFICE EXPENSES
100
NET SALES
Where,
YEAR
2013
2014
(Lacs)
OFFICE EXPENSES
NET SALES
Then the ratio is:
2015
(Lacs)
142.43
(Lacs)
120.70
1914.66
2142.51
7%
6%
135.68
2699.31
5%
100
NET SALES
YEAR
2013
2014
(Lacs)
(Lacs)
265.93
296.26
2015
(Lacs)
68
348.31
NET SALES
1914.66
14%
2142.51
2699.31
14%
13%
NET SALES
69
YEAR
2013
2014
2015
(Lacs)
(Lacs)
(Lacs)
1144.65
1317.10
741.93
COST OF GOODS
SOLD
Add.OPERATING
EXPENSES
TOTAL:
690.75
757.13
869.09
1835.40
2074.23
1611.02
97%
60%
96%
Remarks:
Lower the ratio of the net operating expenses is beneficial for the company.
RETURN ON INYESTMENT:
70
The term investment may refer to total assets or net assets. The funds
employed in the net assets are known as capital employed.
Return on Investment =
EBIT
100
Net assets
Where,
Year
EBIT
2013
2014
2015
(lacs)
(lacs)
(lacs)
45.25
68.74
127.86
CAPITAL EMPLOYED
71
FIXED ASSETS
114.25
115.53
113.03
Add. WORKING
CAPITAL
588.08
435.70
452.57
TOTAL
702.33
551.23
6%
565.60
12%
23%
Remarks:
Higher the ratio better is the results.
Table 3)
PROFITABILITY RATIOS
YEAR
2013
(%)
40
2014
(%)
39
2015
(%)
72
3
35
3
9
7
3
38
3
9
6
5
41
5
9
5
EXPENSES
SELLIND& DISTRIBUTION
14
14
13
EXPENSES
OPERATING EXPENSES
RETURN ON INVESTMENT
96
6
97
12
60
23
COMMENT:
In the above-calculated ratio of the profitability ratio of the company, the
entire ratio shows a good sign of except the increases in the expense ratio.
The gross profit ratio indicates the good sign but not satisfactory in the year
2006, 2007 the ratio is 40%, 39% respectively. But in year 2008 it shows
good sign which is 72%. Which indicates the efficiency in stock control and
an adequence of the selling price.
The Net Profit ratio shows good and increasing trend sign, which indicate
the operation expenses, is in desired parameters.
The factory expenses ratio, administration ratio, selling and distribution ratio
indicates in under controlled.
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Material and labor cost shows slightly increase, it is due to increase in sale
and high cost of raw material.
The operating ratio of this year is too much high in comparison to other
years.
Return on investment ratio is good and satisfactory in year 2008the ratio is
23%.
Which indicate the better performance of the company.
So, over all profitability position of the company is good except the
increasing percentages in the operating expense and expenses ratio.
74
RESEARCH METHODOLOGY
Marketing Research is a key to evaluation of successful marketing strategy
and programmes. It is an important tool to study buyer behavior, changes in
consumer life style and consumption patterns brand loyalty and analysis the
competitors products positioning M.R. is also useful to help create and
enhance equity.
RESEARCH OBJECTIVE
What to researcher want to achieve is objective.
Objectives of research are
75
RESEARCH DESIGN
A specific frame work used for data collection of scientifically6 conducted
project is known research design. There are three types of research design.
A.
Exploratory
B.
Descriptive
C.
Causative
EXPLORATORY RESEARCH :
Exploratory research is done to know why & how certain phenomenon
occurs, how consumer evaluate quality, tangible features, replacement policy
warranty.
DESCRIPTIVE RESEARCH :
Descriptive research is carried out to describe a market characteristics Exp.
To understand the consumer buyer behavior.
CAUSATIVE :
Causative research is done to establish cause and effect relationship. Exp.
The influence of income and life style on purchase decision.
76
SOURCES OF DATA
Usually, the information needed to solve the problem can not be found in
internal of published external records. The research must be depend on
primary data. Which are collected scientifically for the study.
Data are mainly types :Primary Data :Primary sources refers to data collected directly from the market place like
customer, traders & suppliers. They are often reliable data sources & help in
overcoming limitations of secondary data.
Primary data is again mainly of two types
-
Census &
Sample
Census :
Refers to collecting of data from the entire population. The most common
from of census is the Indian population census or compilation of voters list in
an area. It takes along time & hence is not suitable for market researcher.
The primary data is colleted from Annual balance sheet of Bajaj allianz
Dairy.
77
SECONDARY DATA
Secondary data means data that are already available i.e., they refer the data,
which have already been collected and analyzed by someone else. When the
researcher utilizes secondary data, then he has to look into various sources
from where he can obtain them, IN this case he is certainly not confronted
with the problems that are usually associated with the collection of original
data. Secondary data may either be published data or unpublished data.
Usually published data are available in:
1 Various publications of the central, state and local governments;
2 Various publications of foreign government or of international bodies and
their subsidiary organization;
3 Technical and trade journals:
4 Books, magazines and newspapers;
Reports and publications of various associations connected with business
and industry, banks, stock, exchanges etc.;
Reports prepared by research scholars, universities, economists etc.
In
79
SWOT ANALYSIS
STRENGTHS
dairy products.
Insurance market and currently has a very wide range to offer for all price
points.
frozen desserts and Bajaj allianz has a wide portfolio in the dairy Insurance
segment.
Bajaj allianzs main rival, has 8% market share, the second largest
share in the organized sector now is trying to extend its cold chain in many
cities and towns Whereas Bajaj allianz has presence in almost all towns
because of its already existing butter lines.
80
generations of consumers have placed their trust. This can be used to its
advantage while introduction of Insurances.
81
WEAKNESS
Bajaj allianzs Advertising has low profile. Mother dairy and amul on
A major entry barrier with Bajaj allianz are their some non flexible
policies. If bajaj allianz makes their policies bit flexible than this will be
beneficial for them.
would be willing to make further investments only for that brand which
offers replacement facilities. Bajaj allianz has no replacement policy.
This is especially true of those retailers who already stock one or the other
Insurance brands. But bajaj allianz gives the deep freezer at lump sum
amount.
82
OPPORTUNITIES
significant number of retailers who are currently stocking more than two
brands. This is in Bajaj allianzs favour, as earlier it had to overcome this
problem in the Mumbai market.
categories where consumers presently are dissatisfied with the quantity being
provided vis a vis the price being charged.
Bajaj allianz has the opportunity to capture the more evolved young
adults and children who are open to new products provided they meet their
expectations.
83
THREATS
Bajaj allianz might face threat from the local manufacturers in the low
by the consumers and Mother Dairy is also pushing up its advertising pitch.
84
DATA ANALYSIS
CURRENT RATIO
Inference:
The above diagram shows that in the year 2006-07 is 2.66%, in
year 2007-08 is 2.21and in year 2008-09 is 2.03, These ratios of liquidity
indicate the over capitalization of current assets.
85
QUICK RATIO
Inference:
The above data shows the quick ratio of the company in year
2006-07, 2007-08 and 2008-09 is 1.68%, 1.44% and 1.36% respectfully.
The ratios show the company enjoys the high liquidity position; it is good
however too much liquidity is not beneficial for the company
CASH RATIO
86
Inference:
In the above data it shows that the cash ratio of company is in 2006,
2007 and 2008 is 0.36, 0.27 and 0.36 respectfully .It is below the standard
and it is not good for company.
WORKING CAPITAL
RATIO
87
Inference:
In the above data it shows that the Working capital ratio of company
is in 2006, 2007 and 2008 is 0.80, 0.79 and 0.80 respectfully. Ratio shows
the liquidity position of the company is good.
TOTAL CAPITAL
TURNOVER
Inferences:
In the above graph it shows that the Gross Profit ratio of company is
in 2006, 2007 and 2008 is 2.73, 3.89 and 4.77 times respectfully .It shows
that the performance of business is better and all the available resources are
well utilized.
88
WORKING CAPITAL
TURNOVER
Inferences:
89
FIXED ASSETS
TURNOVER
Inferences:
90
DEBATORS TURNOVER
Inferences:
In the above graph it shows that the Debtors Turnover of company is
in 2006, 2007 and 2008 is 4.18, 5.22 and 6.39 times respectfully. It shows
that the collection policy of the company is too liberal.
91
Interfaces:
In the above graph it shows that the Gross Profit ratio of company is
in 2006, 2007 and 2008 is 40%, 39% and 72% respectfully. It shows good
sign, which is 72%. This indicates the efficiency in stock control and an
adequacy of the selling price.
92
CREDITORS
TURNOVER
Inferences:
In the above graph it shows that the Gross Profit ratio of company is
in 2006, 2007 and 2008 is 2.79, 3.20 and 3.60 respectfully. It shows good
sign, which is in increasing trend, which shows that the company enjoys
good credit in market.
93
Inferences:
In the above graph it shows that the Gross Profit ratio of company is
in 2006, 2007 and 2008 is 3%, 3% and 5% respectfully .It is the increasing
in trend the operation expenses, is in desired parameters.
94
Inferences:
In the above graph it shows that the Gross Profit ratio of company is
in 2006, 2007 and 2008 is 3%, 3% and 5% respectfully .It is the increasing
in trend, which is not good for the company future.
95
ADMINISTRATION
EXPENSES RATIO
Inferences:
96
FACTORY EXPENSES
RATIO
Inferences:
In the above graph it shows that the Gross Profit ratio of company is
in 2006, 2007 and 2008 is 9%, 9% and 9% respectfully .It is the constant in
all the year, it shows that all the factory expenses is in the control and there
is no additional factory expenses bear in any of the year by the company
irrespective of their change in production.
97
OPERATING EXPENSES
Inferences:
In the above graph it shows that the operating expenses ratio of
company is in 2006, 2007 and 2008 is 96%, 97% and 60% respectfully. It is
the decreased in trend that shows less expenses is incurred in the operation
which is in uncontrolled manner and it is not good for the company future
if it is continuously decreased like this.
98
SELLING AND
DISTRIBUTION RATIO
Inferences:
In the above graph it shows that the selling and distribution expenses
of company is in 2006, 2007 and 2008 is 14%, 14% and 13% respectfully
.It shows the decreasing in trend, ratio indicates in under controlled.
99
RETURN AND
INVESTMENT
Inferences:
In the above graph it shows that the Return on investment of
company is in 2006, 2007 and 2008 is 6%, 12% and 23% respectfully .It is
the increasing in trend that shows better performance of the company.
100
LIMITATION
The study is limited to three years only.
No comparison made with other firms ratio while during the study period and
making conclusion time.
The readjusted and regroup figure slightly affects the ratio figures.
The data is used in the project have been taken from annual report only. Hence,
grouping and sub grouping and annuliasation of data may slightly affect the results.
101
SUGGESTION
Although BAJAJ ALLIANZ, PARTAPUR, MEERUT has satisfied the ratios. The
following are the suggestion being made out by me as observed during study of the
performance through ratio analysis:
Company should increase its sales of all the production units with increase in the sales
of the company that can be able to increase its financial position.
Company should decrease the operating expenses to increase its operating profit.
Maximize the production capacity.
Maintain the amount of current sales level and try to increase it.
Maximize the utilization of fixed assets and working capital.
All other management, personal and administrative suggestion to be incorporated.
To follow the strict credit collection policy.
Reduce the current assets and quick assets ratio to maintain the standard ratio.
Cash ratio performance is poor. So make policies to improve it.
Return on investment is in satisfactory position and they try to maintain it in future.
Try to start those companies, which are closed due to non-availability of funds.
Try to best utilization of the available resources.
Try to maintain the standard ratio in the financial ratios.
102
CONCLUSION
If these ratios are properly followed the capital investment in the current assets is above
the standard ratio and the cash position of the company would substantially improve.
The Turnover Ratio give good sign of the success but in the debtors turnover ratio
shows that company provided more credit period of payment to its customer, which is
not beneficial for it.
The Profitability Ratio all indicates good sign but increase in the operating and financial
expenses of the company, which is not good sign for the company future.
Return on Investment ratio is satisfactory, it indicate the overall performance of the
company is good and they enjoy a good position of profitability
103
BIBLOGRAPHY
M.Y.KHAN AND P.K. JAIN FINANCIAL MANAGEMENT
(Tata McGraw- Hill Publishing Company Limited, NEW DELHI)
LK NARANG AND SP JAIN FINANCIAL MANAGEMENT
(KALYANI PUBLISHERS,NEW DELHI),2000.
C.R. Kothari, Research methodlogy.
Web sites:
www.Bajajallianz.com
www.google.com
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