CONTENTS

Chapter Particular Page No.

1 2 3 4 5 6 7 8 9

INTRODUCTION PROFILE OF THE ORGANISATION RESEARCH METHODOLOGY DATA PRESENTATION DATA ANALYSIS& INTERPRETATION APPENDIX CONCLUSION SUGGESTIONS BIBLIOGRAPHY

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CHAPTER 1.

INTRODUCTION

1.1 Need of the Project

The project forms a very vital aspect during the curriculum of MBA. At the end of the first year students are required to undergo a summer training program of 60 days. This training is an integral part of MBA course and its importance lies in the fact that it gives the students their first exposure to an organization. The training undertaken in Soma Textiles & Industries Ltd is with few objectives They are 1. To get an opportunity and real business experience. 2. To be able to apply theoretical knowledge obtained at the institute practically in actual business environment . 3. To have comprehensive understanding of the organization . 4. To acquainted with real organizational problems, perceptions and challenges.

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1.2 Selection of Topic

The topic selected for the project is Ratio Analysis why? Any business organization have to prepare the financial statement i.e. Balance sheet, Trading and Profit & loss a/c at the end of financial year . Through these statements we can calculate the various ratios. And these ratios shows the actual position of the business organization. Thus, I thought the ratio analysis is a very important part of organization. So, I selected this important topic.

Soma Textiles & Industries Ltd provide me the opportunity to undertake the study.

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1.3 Objective of the study

The main objectives of the study are ;

1. To study the organizational structure of the Soma Textiles & Industries Ltd. 2. To Study the concept of Financial Ratio Analysis 3. To Study the various types of ratios 4. To evaluate companys performance through Ratio analysis. 5. To interact with the organization for the practical knowledge .

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1.4 Methodology of the study

Project methodology includes various steps. There should be a systematic way of collecting data and presentation of project report. Methodology is a systematic way of solving a problem. It includes the research methods and logics behind these methods. Collecting data analyzing the same conducted the main study. A research design was prepared as under: The study is done on the subject financial ratio analysis by using ratio analysis technique. The analysis is done in the firm STIL The analysis is done with the help for primary and secondary data. The purpose of the project is to study the various financial ratios.

Primary Source of Data: The primary source of data has been collected from the finance departments through formal discussions with Accountants of STIL, CA and other officials of the company.

Secondary Source of Data: Secondary data means that the data is already analyzed by someone else. It is also called as indirect data. The secondary source of data includes the information collected from the annual reports of the company for relevant periods. All the financial data of STIL has been taken from the various statements of the company such as Balance Sheet, Profit and Loss account. Thus this report is based on the information provided by the concerned authorities & by referring books named Financial management

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1.5 Scope and Limitations of the Study

1. The project was conducted in a short span of 2 months which itself acts as constraint. Moreover it also puts pressure for data collection and analysis of the data 2. In this project only four years financial data is being considered i.e. 2006-2007, 2007-2008,
2008-2009 and 2009-2010.

3. The financial data is being taken from companys record only & ratios are calculated on that
basis. 4. As per the company policy there are restrictions on disclosing some information data. 5. The MIS system is very confidential and hence all the company records were not fully accessible.

1.6 Rational of the study

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Utility of the Study

The major benefit was that I got to work and got some practical experience at Soma Textiles & Industries Ltd. It also helped me to complete part of my syllabus for MBA curriculum.

1) To interact with the manager of the company and gain knowledge through their experiences. 2) To gain the knowledge about the ratio analysis. 3) Practical knowledge about the ratio analysis.

Utility to company:-

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CHAPTER 2. COMPANY PROFILE

2.1 NAME & ADDRESS OF THE COMPANY

ADRESSES OF COMPANY:Head office & unit no. 1:Address: Soma Textiles & Industries Ltd, Rakhial Road, Ahmadabad- 380023. Gujarat( India ) Phone: Fax: +91-79-22743285-88 +91-79-22745653

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Unit no. 2 Address: Soma Textiles & Industries Ltd, D-49, MIDC, Baramati-413133 Dist.- Pune Maharashtra ( India) Phone: Fax: +91-2112-243716,243856 +91-2112-243717

Corporate Office: Address: Vaswani Mansion , Dinshaw, Wachha Road, Back by Reclamation, Mumbai, 40020. (India). Phone: Fax: +91-22-22836519/20,2826076/77 +91-22-22851173

Investors Redressed E-mail ID- investors@somatextiles.com

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2.1 HISTORY OF THE ORGANISATION

SOMA TEXTILES & INDUSTRIES LTD. was established as a public limited company in the year 1945. The company entered the textile business with the purchase of unit no.2 of New Commercial Mill Company Ltd, Ahmadabad, and renamed as Soma Textiles & Industries Ltd, in 1969 and further commissioned new cotton spinning textiles unit at Baramati in 1994. The company owes its existence to Shri. S.K.Somany (chairman-promoter) and is being managed by Shri A.K.Somany (Managing chairman-promoter). The process of economic liberalization begun in the last decade has made the industry globally competitive not only in term of price, but also quality. Modernization has not been restricted to the installation of sophisticated machinery but also to innovations,

value additions, new product developments as well as adaptation of quality system and culture. Right from its inception, the company's emphasis has been on quality and technology up gradation. It is hence, worth mentioning that SOMA was one of the first to initiate and introduce Denim manufacturing in India. Our corporate philosophy is "Produce the best; Give the Right Material to the customer at the Right Price". Our success in business is mainly dedicated to our values, our vision, commitment and trust which we share with our colleagues, customers, suppliers, shareholders and society. . Our endeavor is to excel in Quality, improve productivity, conserve energy and reduce wastes thus sustaining market challenges on an ongoing basis. We, Soma Textiles &

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Industries Limited, are a US$40 Million Textile company with integrated manufacturing facilities for all our product groups. We are 36 year old company head-quarter in Ahmadabad, India having factories in Ahmadabad, Baramati, & Solapur. Soma Textiles & Industries Ltd are manufacturing & marketing of following product: 100% Cotton Yarn- exclusively for export ( from our Baramati plant) High value shirting fabrics- 100% cotton & pc blended Bottom wear fabric 100% cotton & poly-cotton Denim fabric. Hosiery Yarn

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2.3 LOCATION-

The company was started in 1994. Owner of the company is R. K. Somany. The organization has three branches main branch in Ahmadabad & other branch is Solapur & Baramati. Company are produced the product of Yarn. It include different type of yarnscarded, combed warp, knitting ,single, doubled & also included 40, 30, 26, count.

Located in Baramati near Bombay in Maharashtra State, India Soma textiles the quality standards followed are indeed world-class. The total production of 40% product is export in Germany, Australia, America, Hongkong

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Currently the overall management of company is with Soma Textiles & Industries Ltd ensured the quality standards followed are indeed world class. The technology is absolutely state of the art with most of the equipment served from the best in the world. The company have good place in Indian market but company have also target to getting top place in world market .by maintaining following things. 1. 2. 3. 4. Increase production Waste control Safety at work place Fulfill the promises given to the customer.

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2.4 VISION AND MISSION OF THE ORGANISATION

Vision:Soma textiles & industries ltd the vision is to become Indias leading sustainable textiles company by producing quality product and observing highest social, economic and environmental standards. Our aim is to deliver the highest quality product and prompt services to our customers. Our objective is to provide good value through a competitive atmosphere of defined system and processes. Our vision of three-fold Lead the textiles industries in India. Observe highest social, economic and environmental standards.

Maintain a committed and satisfied clientele. Mission:STILS mission is to create conditions and infrastructure for sustainable procurement and production of textiles product. We wish to We will meet and exceed our customers' expectations of service through timely communications and quality information. To achieve tangible benefits by promoting efficiencies, productivity and professionalism. Provide competitive prices and genuine products to our clients. Creating a climate for voluntary compliance by providing guidance and building mutual trust. Manufacture high quality yarn to withstand high levels of competitiveness. Serving and supporting the society in which we work.
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Uniflock

Production Line
Uniclean

Unimix

Flexi clean

Vetal Scan

Card

Draw frame

Unilap

Comber

Finisher D/F

Speed frame

Ring frame

Winding

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2.5 PRODUCT PROFILE

We are engaged in producing a qualitative range of cotton yarns, which are widely acknowledged, by clients. Owing to our manufacturing facility that is fully equipped with the latest 4th generation machines such as Crosrol chute feed cards imported from England, auto leveled draw frames from Reiter, to name a few. This aids us in producing 100% Ring Spun Cotton Yarn.The mill is specialized in the count range of NE 20s to 36s with a capacity of 2,000 MT of Warp / Hosiery yarn per annum. Further, it has 100% Doubling capacity with an array of Ring Doubling machines and two-for-one (TFO) twisters for producing multi-ply yarns. The Major Counts are as follows NE 16s to 24s Carded Yarn on Ring Spinning Cottons. NE 16s to 36s Combed Yarn made with Indian / US

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Compact Single Twist Yarn

Our range of Compact Single Twist Yarn but Yarn is precisely twisted and suitable for various knitting and weaving applications. These are manufactured with 100% cotton material that ensures optimum tenacity and high strength. Leveraging on our sophisticated spinning facility, we are able to process Eli twist yarn in count range from Ne 6s to 120s.

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Compact Double Twist Yarn

We offer cotton yarn in carded or combed in double play, multified, bleached, mercerized, gassed, dyed, yarn, as per specific requirement. Blended yarn, double play, blended with cotton, as per specific requirement.

Cotton Yarn

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Catering to the requirements of domestic and international customers, we export 40% cotton yarn

Hosiery Yarn

We are a leading supplier of hosiery yarns that are perfect for knitting and procured.

Cotton Blended Yarn

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We have associates who have facilities to make high class cotton blended yarn made up of quality cotton and blended yarn of various counts.

2.6 FUTURE PLANS OF ORGANISATION

To be a world class organization- one that becomes a benchmark for the organization, its sources for new ideas, information, professional development and quality standards. One that impresses its customers the first time. To attain highest level of efficiency with integrity and honesty.

2.8 QUALITY POLICY

We at soma textiles & industries limited, a spinning unit, pledge for customer satisfaction by supplying superior quality yarn as per customer requirement. All of us are committed to put our sincere effort for continual improvement & effectiveness of our quality management system to retain leadership in international & domestic market.

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2.9 ENVIRONMENTAL POLICY

Soma textiles & industries ltd. Unit II, Baramati manufacturing yarn is committed to Compliance with applicable environmental legal & other requirement. Prevention of pollution & protection of environment byConservation of natural resource i.e. Water, Energy & Oil. Management of waste such as used oil, cotton dust sludge & filter containing oil. Sound management practices. Developing greenery. Continual improvement in our environmental performance by setting & reviewing objective & targets.

EMPLOYEE STRENGTH
The population of Soma Textiles & Industries Ltd, Baramati is total employees is 500. In this Company Officers22, Supervisor29 & Labors449.

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DATA PRESENTATION, ANALYSIS & INTERPRETATION Financial Statements

Financial Statements are those statements, which show both the performance and the financial position. They include balance sheet, income statements, funds statements or any supporting statements or other presentation of financial data derived from accounting records. Balance sheet has been defined as a statements which shows financial position of any economic unit disclosing as a part given moment of time its assets, at cost, depreciated cost, or other indicated value, its liabilities and its ownership equities. It shows current assents, current liabilities, fixed investments, deferred charges, long term liabilities, properties, funds, etc.(In brief it includes figures in summery form of various assets held by the company and also its liabilities towards outsiders including owners at the end of the day of accounting year). Income statement or P&L account is a statement which shows, in summary form the revenues & expenses of business equity for an accounting year. It shows sales revenues, cost of sales, gross profit, operating expenses, operating profit non-trading incomes and expenses, net income or loss, appropriations, tax liability etc. (In brief, the P&L account presents information about the result or outcome or business operations during an accounting year by matching the expenses incurred during an accounting year against the revenues earned in that year)These two basic financial statements are supported by a number of schedules, annexure, supplementary statements, footnotes etc. Supplementing the data contained in the balance sheet and the income statements. Therefore, all these, in addition to the P&L account & balance sheet, fall within the scope of financial statements. Financial statements provide an overview of a business or person's financial condition in both short and long term. All the relevant financial information of a business enterprise, presented in a structured manner and in a form easy to understand, is called the financial statements. There are four basic financial statements Balance sheet: also referred to as statement of financial position or condition, reports on a company's assets, liabilities, and net equity as of a given point in time. Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time. Profit & Loss account
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provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period. Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities. For large corporations, these statements are often complex and may include an extensive set of notes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail.

Purpose of financial statements "The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions." Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization's financial position. Reported income and expenses are directly related to an organization's financial performance. Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently." Financial statements may be used by users for different purposes:

Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis is then performed on these statements to provide management with a more detailed understanding of the figures. These statements are also used as part of management's annual report to the stockholders.
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Employees also need these reports in making collective bargaining agreements (CBA) with the management, in the case of labor unions or for individuals in discussing their compensation, promotion and rankings.

Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and are prepared by professionals (financial analysts), thus providing them with the basis for making investment decisions.

Financial institutions (banks and other lending companies) use them to decide whether to grant a company with fresh working capital or extend debt securities (such as a long-term bank loan or debentures) to finance expansion and other significant expenditures.

Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company.

Vendors who extend credit to a business require financial statements to assess the creditworthiness of the business.

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Interpretation & Role of financial statement

Interpretation of Ratios The ratios calculated on the basis of grouping and regrouping of the figures appearing on either profitability statement or Balance Sheet or both, may not all by themselves mean anything, unless they can be compared with some yardstick. The yardstick with which the ratios can be compared may be in the following three forms: 1) The ratios of one organization may be compared with the ratios of the same organization for the various years, either the previous years or the future years. This may be in the form of intra-firm comparison 2) The ratios of one organization may be compared with the ratios of other organizations in the same industry and such comparison will be meaningful as the various organizations in the same industry may be facing similar kinds of financial problems. This may be in the form of inter-firm comparison. 3) The ratios of an organization may be compared with some standards which may be thumb rules for the evaluation of the performance. For example, if comparison of current assets and current liabilities of an organization is to be made, the result of 2:1 i.e., two rupees of current assets for one rupee of current liabilities is supposed to be ideal. The position as reflected by the actual current assets and actual current liabilities may be compared with this standard to evaluate the performance of the organization.

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Role of Ratio Analysis

It is true that the technique of Ratio Analysis is not a creative technique in the sense that it uses the same figures and information which are already appearing in the financial statements. At the same time, it is also true that what can be achieved by the technique of Ratio Analysis cannot be achieved by the mere preparation of financial statements. Ratio Analysis helps to appraise the firms in terms of their profitability and efficiency of performance, either individually or in relation to those of other firms in the same industry. The process of this appraisal is not complete until the ratios so computed can be compared with something, as the ratios by themselves do not mean anything. This comparison may be an intra-firm comparison, inter-firm comparison or comparison with standard ratios. Thus, proper comparison of ratios may reveal where a firm is placed as compared with earlier periods or in comparison with other firms in the same industry. Ratio Analysis is one of the best possible techniques available to the management to impart the basic functions like planning and control. As the future is closely related to the immediate past, ratios calculated on the basis of historical financial statements may be of good assistance to predict the future. For example, on the basis of inventory turnover ratio or debtors turnover ratio in the past, the level of inventory and debtors can easily be ascertained for any given amount of sales. Similarly, the ratio analysis may be able to locate and point out the various areas which need the managements attention in order to improve the situation. For example, current ratio which shows a constant declining trend may indicate the need for further introduction of long term finance in order to improve the liquidity position. It should be remembered that a few specific ratios indicate certain specific aspects of the conduct of business. As such, the importance of various ratios may vary for different category of persons as well. For example, the commercial bankers, trade creditors and lenders of short term credit are basically interested in the liquidity position of the organization and as such the ratios like current ratio, acid test ratio, inventory turnover ratio and average collection period are more important. On the other hand, the financial institutions and lenders of long-term finance are basically interested in the solvency and profitability position of the
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organization and as such the ratios like debt equity ratio, debt service coverage ratio, interest coverage ratio and return on investment are more important. As the ratio analysis is concerned with all the aspects of a firms financial analysis (liquidity, solvency, activity, profitability and overall performance), it enables the interested persons to know the financial and operational characteristics of an organization and take the suitable decisions.

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Types of financial Ratio

I] LIQUIDITY RATIOS: The liquidity ratio measures the firms liquidity and its ability to meet its maturing short term obligations. It is defined as the ability to realize value in money, the most liquid of assets. It refers to the ability to pay in cash, the obligations that are due. The quantitative aspects includes the quantum, structure and Utilizations of liquid assets and in the qualitative aspect, it is the ability to meet all present and potential demands on cash from any source in a manner that minimizes cost and maximizes the value of the firm. 1) Current ratio: Current ratio indicates how the expected current claims are covered by current assets. A very high current ratio may not indicate a very favorable position because it means that excessive investments in current assets are made. The current ratio 2:1 shows highly solvent position. Current ratio = Current assets Current liabilities 2) Liquid / Quick / Acid test ratio: It is the ratio between liquid assets and liquid liabilities. From the B/S liquid assets are calculated by deducting inventories and pre paid expenses from current assets. The quick ratio of 1:1 shows highly solvent position. Liquid ratio = Liquid current assets Liquid liabilities

3) Cash Ratio This ratio considers only the absolute liquidity available with the firm. The cash & bank balance are the most liquid assets. The marketable securities are also considered as highly liquid asset. The ideal cash ratio is taken as 1:2. It is calculated as follows Cash ratio= Cash in hand & at bank + Marketable Securities Current liabilities
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II] TURNOVER RATIOS: Assets management ratio measures how efficiently the firm employs its resources. These ratios are also called activity or turnover ratios which involve comparison between the level of sales and investment in various accounts. They are used to measure speed with which various accounts are converted into sales or cash. 4) Inventory turnover ratio:

It establishes relationship between cost of goods sold during a given period and the average amount of inventory held during that period. It indicates the number of times finished stock is turned over during a given accounting period. High ratio shows rapid turnover & low ratio shows slow moving stock. Inventory turnover ratio = Cost of goods sold OR sales Average inventory 5) Debtors turnover ratio: This ratio indicates the credit policy followed by a business firm. The higher the ratio lower is the collection period while low ratio indicates higher collection period. An average collection period, which is shorter, needs to be analyzed carefully. Debtors turnover ratio = Credit sales Average debtors

6) Creditors turnover ratio: This ratio indicated the credit period allowed by the creditors. A high turnover ratio indicates that payment to creditors is quite prompt but it also implies the full advantage of credit allowed by creditors is not taken. A low ratio indicates that payment to creditors is not quite prompt and it needs to be improved. Creditors turnover ratio = Credit purchases Average Creditors
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7) Fixed assets turnover ratio: This ratio indicates the number of times fixed assets are being turned over during a particular period. It is one of the indications of efficiency of using fixed assets in the business. A high ratio indicates that fixed assets are contributing quite substantially in making sales, while low ratio indicates that fixed assets are not being used efficiently. Fixed assets turnover ratio = Net Sales Fixed assets 8) Total assets turnover ratio: This ratio indicates the number of times total assets are being turned in a year. The higher the ratio indicates overtrading of total assets while a low ratio indicates idle capacity. Total assets turnover ratio = Sales Total assets

9) Working capital turnover ratio: This ratio compares the net sales with net working capital. The indication given by this ratio is the number of times working capital is turned around in a particular period. The higher the ratio the better the utilization of working capital and lower is the investment in working capital. However, a very high working capital turnover ratio is a sign of overtrading and a firm may face shortage of working capital. Working capital turnover ratio = Net sales Working Capital

10) Capital employed turnover ratio: This ratio shows efficiency of capital employed in the business by computing how many times capital employed is turned over in a given period. Capital turnover ratio = Net Sales Capital employed

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III] LEVERAGE RATIOS: Leverage ratios lay emphasis on long term financial prospects. In order to assess the long term financial soundness it is necessary to find out whether the organization is able to meet its long term financial commitments whenever they become due and whether the organization is able to maintain or increase the market value of its shares. The long term financial stability of the firm may be considered as dependent upon its ability to meet all its liabilities, including those not currently payable. The ratios which are important in measuring the financial leverage of the company are as follows: 11) Debt equity ratio: This ratio is calculated to measure the comparative proportions of outsiders funds and shareholders funds invested in the company. It indicates how many rupees have come from borrowing from every rupee of shareholders funds. A low ratio indicates that the management of the firm is following conservative policy, which is quite satisfactory from creditors angle, but not for shareholders. Debt equity ratio = Long term debts Equity

12) Shareholders equity ratio: It is assumed that larger the proportion of the shareholders equity, the stronger is the financial position of the firm. This ratio will supplement the debt equity ratio. In this ratio the relationship is established between shareholders funds and the total assets. Shareholders funds represent equity and preference capital plus reserves and surplus less accumulated losses. Shareholders equity ratio = Shareholders equity Total assets

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13) Interest coverage ratio: This ratio compares the net profit before interest and tax with the interest payments and long-term liabilities. This ratio indicates whether adequate coverage of net profit is available for the payments of interest or not. If this ratio is very high it means the margin for creditors and lenders is very high if the ratio is just one it will indicate that the profits are just equal to interest which is not at all satisfactory. Interest coverage ratio = Net profit before interest and tax Interest 14) Proprietary ratio: It is the ratio between proprietors fund and total assets. It indicates the strength of the funding of the company. A high ratio will definitely indicate high financial strength but a very high ratio will indicate inadequate utilization of external equities.

Proprietary ratio = Proprietors funds Total assets

IV] PROFITABILITY RATIOS: With a very few exceptions the entire corporate sector aims at maximizing the amount of profits. Some of the public sector undertakings are also aiming at earning reasonable amount and rate of profits. Even a few services oriented organizations are working on a no-profit, no-loss basis. Profit maximization is therefore one of the primary objectives of business enterprise. Profit should not be confused with profitability because profit is one of the determinants of profitability. Profit represents the absolute quantum of profit whereas profitability (profit + ability) refers to the ability of the firm to earn profit.

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15) Gross profit ratio: This ratio shows the margin left after meeting the manufacturing costs. It measures the efficiency of production as well as pricing. A high gross profit ratio means high margin for covering other expenses, other than the costs of goods sold. A high GP ratio achieved by an organization indicated the organizations successful attempts to produce the product at relatively lower costs. Gross profit ratio = Gross profit x 100 Net sales 16) Net profit ratio: This ratio indicates the earnings left for shareholders (equity & preference) as a percentage of net sales. It measures the overall efficiency of all the functions of a business firm like production, administration, selling, financing, pricing, tax management etc. This ratio proves to be very useful for prospective investors because it reveals the overall profitability of the concern. Higher the ratio better it is because it gives idea of improved efficiency. Net profit ratio = Net profit before interest & tax x 100 Sales 17) Return on total assets: This ratio is also known as profit to assets ratio and it establishes the relationship between net profit and assets. As net profit and assets have a number of meanings there are a number of approaches to compute the return on assets ratio. Return on total assets = Net profit after tax x 100 Total assets 18) Return on Shareholders fund or return on net worth: It shows the percentage of net profit available for equity shareholders to equity shareholders funds. This ratio indicates the productivity of the ownership capital employed in the firm. However, in judging the profitability of the firm it should not be overlooked that during inflationary periods the ratio may show upward trend because the

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numerator of the ratio represents current values whereas the denominator represents historical values. RONW = Net profit after interest and tax x 100 Net worth

19) Return on capital employed: This ratio indicates the percentage of net profits before interest and tax to total capital employed. Capital employed refers to long-term funds supplied by the lenders and owners of the firm. It is calculated as equity capital + preference capital + reserves and surplus+ long-term debts fictitious assets. A comparison of these ratios with similar firms with the industry average and overtime would provide sufficient insight into how efficiently the long-term funds of lenders and owners are being used. Higher the ratio the more efficient is the use of capital employed.

ROCP= Net profit before interest and tax x 100 Capital employed

V] MARKET BASED RATIOS: The market based ratios relates the firms stock price to its earnings and book value per share. These ratios give management an indication of what investors think of the companys past performance and future prospects. If firms profitability, solvency and turnover ratios are good, then the market based ratios will be high and its share price is also expected to be high. 20) Earnings per share: This ratio indicates the amount of net profit available per equity share of a business firm. EPS is one of the criteria of measuring the performance of a company. If EPS increases, the possibility of a higher dividend payable by the company increases. The market price of the share of the company may also be affected by this ratio. EPS of different
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companies may vary due to the following of different practices regarding stock in trade, depreciation etc. EPS = Net profit after interest, tax and preference dividend Number of equity shares

21) Cash earnings per share: Cash earnings per share are more reliable yardstick for measurement of performance of companies, especially for highly capital intensive industries where provision for depreciation is substantial. This measures the cash earnings per share and is also a relevant factor for determining the price for the company shares. CEPS = Net profit after tax + depreciation No. of equity shares

22) Dividend payout ratio: This ratio indicates the percentage of profit distributed as dividends to the shareholders. A higher ratio indicates that the company follows a liberal dividend policy while a lower ratio implies a conservative dividend policy.

Dividend payout ratio = Dividend per share x 100 Earning per share

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A] LIQUIDITY RATIO

Current assets 1) Current Ratio = ----------------------Current liabilities Particular Current Asset Current Liability 2006-2007(in Rs.) 202,733,393 27,989,998 2007-2008(in Rs.) 1,244,810,256 40,258,807 2008-2009(in Rs.) 95,254,931 26,663,631 2009-2010(in Rs.) 179,383,350 183,712,046

Years Calculation

2006-2007 202,733,393 ------------------27,989,998 7.24

2007-2008 1,244,810,256 ------------------40,258,807 3.90

2008-2009 95,254,931 -------------------26,663,631 3.58

2009-2010 179,383,350 -------------------183,712,046 0.98

Current Ratio

Current Ratio
8 6 RATIO 4 2 0 2006-2007 2007-2008 YEAR 2008-2009 2009-2010 7.24 3.9 3.58 0.98 Current Ratio

Interpretation: Though the current assets & current liabilities are increasing some year but the current ratios is showing decreasing some year trend. The current ratio for the year 2006-07 has increased as a result of a larger decrease in current liabilities in proportion to current assets. In the year 2009-2010 the assets & liabilities are shows the nearest figures. The current ratios of company is decreasing, it shows lower margin of safety. Generally current ratio of 2:1 is considered ideal for the firm

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Current Assets-Stock 2) Liquid Ratio = ------------------------------Current liabilities Particular [A]Current Asset [B]Stock [A]-[B] Current liabilities 2006-2007(in Rs.) 202,733,393 116,167,443 86,565,950 27,989,998 2007-2008(in Rs.) 1,244,810,256 63,532,707 60,877,549 40,258,807 2008-2009(in Rs.) 95,254,931 30,948,481 95,254,931 26,663,631 2009-2010(in Rs.) 179,383,350 103,832,436 75,550,914 183,712,046

Years Calculation

2006-2007 86,565,950 -------------27,989,998 3.09

2007-2008 60,877,549 --------------40,258,807 1.52

2008-2009 95,254,931 --------------26,663,631 2.41

2009-2010 75,550,914 ----------------183,712,046 0.41

Liquid Ratio

Liquid Ratio
3.5 3 2.5 2 1.5 1 0.5 0 3.09 2.41 1.52 Liquid Ratio 0.41

RATIO

2006-2007

2007-2008 YEAR

2008-2009

2009-2010

Interpretation: The liquid ratio is changed per year. In year 2006-2007, it was 3.09; in year 2007-2008 it was 1.52 ; increased up to 2.41 in 2008-2009 & decreasing in year 2009-2010 i.e. 0.41. The ratio of year 2007-2008 is best because it is closed to ideal ratio of 1:1. Generally quick ratio of 1:1 represents a satisfactory current financial condition. In three years liquid ratios are more than 1. It indicates that firm has not found difficult to meet its obligations because its quick assets are more than current liabilities. But in 20092010 the ratio was below the 1 i.e. unsatisfied financial condition.
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Cash in hand& at bank + Marketable Securities 3) Cash Ratio = ---------------------------------------------------------Total Current liabilities 2006-2007(in Rs.) 21,512,512 27,989,998 2007-2008(in Rs.) 7,146,275 40,258,807 2008-2009(in Rs.) 4,666,896 26,663,631 2009-2010(in Rs.) 13,546,729 183,712,046

Particular Cash & bank balance Total Current liabilities

Years Calculation

2006-2007 21,512,512 --------------27,989,998 0.77

2007-2008 7,146,275 --------------40,258,807 0.78

2008-2009 4,666,896 --------------26,663,631 0.18

2009-2010 13,546,729 --------------183,712,046 0.07

Cash Ratio

0.9 0.8 0.7 0.6 0.5 RATIO 0.4 0.3 0.2 0.1 0 2006-2007 0.77

Cash Ratio
0.78

0.18 0.07 2007-2008 YEAR 2008-2009 2009-2010

Cash Ratio

Interpretation: The cash ratio of 2006-2007 as compared to year 2007-2008 was near the same but the year 2008-2009 & 2009-2010 cash ratio was fall down. The total current liabilities of the four years was more than cash balances thats why the cash ratio was fall down from the year 2007 to 2010. In the year 2009-2010 total current liabilities are more than other years.
- 37 -

B] TURNOVER RATIO Cost of goods sold 4) Inventory turnover Ratio= ---------------------------------------Average Inventory Cost of goods sold = Sale Gross Profit = Sale [Profit before interest & Tax + Administrative expenses] 2006-2007(in Rs.) 645,057,254 572,990,284 72,066,970 116167443 2006-2007 72,066,970 ----------------116,167,443 0.62 2007-2008(in Rs.) 600,889,091 599,381,898 1,507,193 63,532,707 2007-2008 1,507,193 ---------------63,532,707 0.02 2008-2009(in Rs.) 422,137,997 484,024,791 -61,886,794 30,948,481 2008-2009 -61,886,794 ---------------30,948,481 -1.99 2009-2010(in Rs.) 552,839,754 540,088,768 12,750,986 30,948,481 2009-2010 12,750,986 ----------------30,948,481 0.41

Particulars A] Sales B]Gross profit C] Cost of goods sold [(A-B)=C] D] Average inventory Years

Calculation Inventory turnover Ratio

Inventory turnover Ratio

14% 20% 1% 2006-2007 2007-2008 2008-2009 -65% 2009-2010

Interpretation: From the year 2006-2007 to 2008-2009 inventory turnover ratios shows the decreasing trend. The year 2008-2009 the ratio was negative because this year the sale was very low. Inventory turnover ratio was higher in year 2006-2007 i.e., 0.62.
- 38 -

Sale 5) Capital employed turnover ratio= -------------------------------------Capital Employed Capital Employed = Shareholders Fund + Loan funds Shareholders Fund = Share Capital + Reserve & Surplus Loan funds = Secured loans +Unsecured loans Particulars 2006-2007(in 2007-2008(in 2008-2009(in Rs.) Rs.) Rs.) A]Sales 645,057,254 600,889,091 422,137,997 B]Share Capital 479,385,818 402,372,616 443,639,721 C]Secured loans 198,832,517 160,578,780 137,862,078 D]Unsecured 100,000,000 103,430,428 4,339,759 loans E] Loan 298,832,517 264,009,208 142,201,837 funds[C+D] F]Capital 778,218,335 666,381,824 585,841,558 Employed[B+E] Years 2006-2007 645,057,254 ----------------778,218,335 0.82 2007-2008 600,889,091 ------------------666,381,824 0.90 2008-2009 422,137,997 ---------------585,841,558 0.72

2009-2010(in Rs.) 552,839,754 310,166,499 139,263,604 4,339,760 143,603,364 453,769,863

2009-2010 552,839,754 -----------------453,769,863 1.22

Calculation

[C.E.T.R]

[C.E.T.R]
22% 2006-2007 2007-2008 25% 20% 2008-2009 2009-2010

33%

Interpretation: Capital employed turnover ratio is decreased in 2008-2009 because the sales were decreased due to Global Recession. Capital employed turnover ratio increasing per year except 2008-2009.
- 39 -

Net sales 6) Working capital turnover ratio = ---------------------------------------------Net Working Capital Particular Sales Net Working Capital 2006-2007(in Rs.) 645,057,254 171,486,224 2007-2008(in Rs.) 600,889,091 81,427,673 2008-2009(in Rs.) 422,137,997 66,081,802 2009-2010(in Rs.) 552,839,754 -6,425,699

Years

2006-2007 645,057,254 ----------------171,486,224 3.76

2007-2008 600,889,091 ----------------81,427,673 7.37

2008-2009 422,137,997 ----------------66,081,802 6.38

2009-2010 552,839,754 ------------------6,425,699 -86.03

Calculation

(W C T R)

(W C T R)
3.76 7.37 6.38 2006-2007 -86.03 2007-2008 2008-2009 2009-2010

Interpretation: The Working capital turnover ratio in year 2006-2007 was 3.76; in 2007-2008 it was increased up to 7.37 & in year 2008-2009 up to 6.38. But in year 2009-2010 working capital is decreased but in proportionate to these sales also decreased so it is again decreased. In year 2009-2010 Net Working Capital -6,425,699 shown negativity condition that why working capital turnover ratio negative.

- 40 -

Sales 7) Total asset turnover ratio = --------------------------------Total asset Particulars A]Sales B]Fixed asset C]Current assets D]Total Assets[B+C] 2006-2007(in Rs.) 645,057,254 602,037,387 202,733,393 804,770,780 2007-2008(in Rs.) 600,889,091 580,445,311 124,410,256 704,855,567 2008-2009(in Rs.) 422,137,997 515,250,916 95,254,931 610,505,847 2009-2010(in Rs.) 552,839,754 460,195,562 179,383,350 639,578,912

Years

2006-2007 645,057,254 -------------------804,770,780 0.80

2007-2008 600,889,091 -----------------704,855,567 8.53

2008-2009 422,137,997 ------------------610,505,847 0.69

2009-2010 552,839,754 -----------------639,578,912 0.86

Calculation Total asset turnover ratio

(T.A.T.R)
6% 8% 7% 2006-2007 2007-2008 2008-2009 79% 2009-2010

Interpretation: Sales generated by using total assets were more in year 2007-2008 i.e.8.53 than year 2006-2007 i.e. 0.80 while in year 2008-2009, it decreased up to 0.69 & again in year 2009-2010 increased
- 41 -

8) Fixed asset turnover ratio =

Sales ----------------------------Fixed asset 2007-2008(in Rs.) 600,889,091 580,445,311 2007-2008 600,889,091 -----------------580,445,311 1.04 2008-2009(in Rs.) 422,137,997 515,250,916 2008-2009 422,137,997 ------------------515,250,916 0.82 2009-2010(in Rs.) 552,839,754 460,195,562 2009-2010 552,839,754 ------------------460,195,562 1.20

Particulars Sales Fixed asset

2006-2007(in Rs.) 645,057,254 602,037,387 2006-2007 645,057,254 -----------------602,037,387 1.07

Years

Calculation

(F. A. T. R)

(F .A. T. R)

1.2

1.07

2006-2007 2007-2008 2008-2009 2009-2010

0.82

1.04

Interpretation: In above data sales was maximum as compared to fixed assets but for the year 2008-2009 sales was low because of Global Recession. Than For the year 2009-2010 sales were increased than fixed assets turnover ratio was stabile.

- 42 -

Credit sales 9) Debtors turnover ratio = ----------------------------Average debtors

Particulars Sales Debtors

2006-2007(in Rs.) 645,057,254 34,413,938

2007-2008(in Rs.) 600,889,091 14,413,938

2008-2009(in Rs.) 422,137,997 21,064,406

2009-2010(in Rs.) 552,839,754 134,15,725

Years

2006-2007

2007-2008 600,889,091 ------------------14,413,938 42.42

2008-2009 422,137,997 ------------------21,064,406 20.04

2009-2010 552,839,754 --------------------13,415,725 41.21

645,057,254 Calculation --------------------34,413,938 Debtors turnover ratio 18.74

Debtors turnover ratio

18.74 41.21 2006-2007 2007-2008 2008-2009 42.42 20.04 2009-2010

Interpretation: The higher the ratio lower is the collection period while low ratio indicates higher collection period. Thats why lower ratio was best to organization above year 2006-2007 was best. In year 2006-2007 the ratio was 18.74.It was very low it is best for the organization. In year 2007-2008 the ratio was 42.42.It was very high it is lower collection period for the organization.
- 43 -

Credit Purchase 10) Creditors turnover ratio = --------------------------------Average account payable Particulars Credit Purchase Account payable 2006-2007(in Rs.) 361,959,352.11 21,749,963 2007-2008(in Rs.) 390,845,457.34 32,178,140 2008-2009(in Rs.) 326,808,448.0 0 21,364,846 2009-2010(in Rs.) 462,020,245.68 175,035,859

Years Calculation

2006-2007 361,959,352.11 --------------------21,749,963

2007-2008 390,845,457.34 -----------------32,178,140

2008-2009 326,808,448.0 0 ------------------21,364,846 15.29

2009-2010 462,020,245.68 -------------------175,035,859

Creditors turnover ratio

16.64

12.14

2.63

Creditors turnover ratio

2.63 15.29 12.14 16.64 2006-2007 2007-2008 2008-2009 2009-2010

Interpretation:This ratio indicated the credit period allowed by the creditors. A high turnover ratio indicates that payment to creditors is quite prompt. In year 2006-2007 the ratio was 16.64 & it was quite prompt it is best for the organization. In year 2009-2010 the ratio was 2.63.It was very low it is lower collection period for the organization.

- 44 -

C] LEVERAGE RATIO Debt 11) Debt to equity ratio = --------------------Equity Debt = Secured loans + Loans from directors & shareholders Equity = Share Capital + Reserve & surplus Particulars 2006-2007(in 2007-2008(in 2008-2009(in Rs.) Rs.) Rs.) Debt 298,832,517 160,578,780 142,201,837 Equity 479,385,818 402,372,616 443,639,721 2006-2007 198,832,517 -------------------479,385,818 0.41 2007-2008 160,578,780 ------------------402,372,616 0.40 2008-2009 137,862,078 -------------------443,639,721 0.31

2009-2010(in Rs.) 143,603,364 310,166,499 2009-2010 139,263,604 -------------------310,166,499 0.44

Years Calculation

Debt to equity ratio

Debt to equity ratio

0.5 0.4 RATIO 0.3 0.2 0.1 0 2006-2007 2007-2008 2008-2009 2009-2010 YEAR Debt to equity ratio 0.41 0.4 0.31 0.44

Interpretation: As shown in above graph the ratio is decreased to 0.31 in year 2008-2009 while the ratios of previous years were 0.41(2006-2007), 0.40(2007-2008) & year 2009-2010 it is increase up to 0.44 .A low ratio indicates that the management of the firm is following conservative policy, which is quite satisfactory from creditors angle, but not for shareholders.
- 45 -

Proprietors Fund 12) Proprietary ratio = -----------------------------------Total assets Proprietors Fund = Share Capital + Reserve & surplus Total Assets = Fixed Assets + Current assets Particulars 2006-2007(in 2007-2008(in 2008-2009(in Rs.) Rs.) Rs.) Proprietors 479,385,818 402,372,616 443,639,721 Fund Total assets 804,770,780 7,048,555,667 610,505,847 Years Calculation 2006-2007 479,385,818 -----------------804,770,780 0.60

2009-2010(in Rs.) 310,166,499 639,578,912

2007-2008 2008-2009 2009-2010 402,372,616 443,639,721 310,166,499 -------------------- -------------------- --------------------7,048,555,667 610,505,847 639,578,912 0.57 0.73 0.49

Proprietary ratio

Proprietary ratio
0.8 0.6 RATIO 0.4 0.2 0 2006-2007 2007-2008 YEAR 2008-2009 2009-2010 0.6 0.57 0.73 0.49 Proprietary ratio

Interpretation: This shows that 0.49 of the total assets were being financed through total assets in year 2009-2010. Likewise in 2008-2009 0.73 of total assets were financed through Equity which is good for firm.

- 46 -

Profit before interest, tax & depreciation 13) Interest coverage ratio = -------------------------------------------------------------Interest Particulars 2006-2007(in 2007-2008(in 2008-2009(in 2009-2010(in Rs.) Rs.) Rs.) Rs.) 599,381,898 484,024,791 540,088,768 (P.B.I,I & D) 572,990,284 20,389,333 20,045,980 28,225,260 23,031,182 Interest Years 2006-2007 572,990,284 ------------------20,389,333 28.10 2007-2008 599,381,898 -------------------20,045,980 29.90 2008-2009 484,024,791 ----------------28,225,260 17.15 2009-2010 540,088,768 ------------------23,031,182 23.45

Calculation

Interest coverage ratio

Interest coverage ratio

24%

29%

2006-2007 2007-2008 2008-2009

17% 30%

2009-2010

Interpretation: The ratio is increased in year 2007-2008 i.e. 29.9 as compared to ratio of year 2006-2007 which was 28.1. In year 2008-2009 the ratio was 17.15 which were decreased & 20092010 it is again rose up to 23.45.

- 47 -

D] PROFITABILITY RATIO: Gross profit 14) Gross profit ratio = -------------------- *100 Net sales Gross profit = Profit before interest & tax + Administrative expenses Particulars Gross profit Net Sales 2006-2007(in Rs.) 572,990,284 645,057,254 2006-2007 572,990,284 --------------*100 645,057,254 88.83% 2007-2008(in Rs.) 599,381,898 600,889,091 2007-2008 599,381,898 --------------*100 600,889,091 99.75% 2008-2009(in Rs.) 484,024,791 422,137,997 2008-2009 484,024,791 --------------*100 422,137,997 114.66% 2009-2010(in Rs.) 540,088,768 552,839,754 2009-2010 540,088,768 --------------*100 552,839,754 97.69%

Years

Calculation

Gross profit ratio

Gross profit ratio

140.00% 120.00% 100.00% RATIO 80.00% 60.00% 40.00% 20.00% 0.00% 2006-2007 2007-2008 2008-2009 2009-2010 YEAR Gross profit ratio 88.83% 114.66% 99.75% 97.69%

Interpretation:

- 48 -

The Gross profit margin was 88.83% in year 2006-2007.After that Gross profit margin increase to 99.75% in year 2007-2008. Again it is increased to 114.66% in 2008-2009 & then the ratio was reduced up to 97.69%. Net profit/Loss 15) Net profit ratio = ---------------------- *100 Net Sales Particular 2006-2007(in 2007-2008(in Rs.) Rs.) Net profit Net Sales 14,971,925 645,057,254 -45,374,539 600,889,091

2008-2009(in Rs.) -119,207,749 422,137,997

20092010(in Rs.) 50,854,022 552,839,75 4

Years

2006-2007 14,971,925 ------------*100 645,057,254 2.3%

2007-2008 -45,374,539 --------------*100 600,889,091 -7.6%

2008-2009 -119,207,749 --------------*100 422,137,997 -28.23%

Calculation

2009-2010 -50,854,022 ---------------*100 552,839,754

Net profit ratio

-9.2%

Net profit ratio

5.00% 0.00% -5.00% RATIO -10.00% -15.00% -20.00% -25.00% -30.00% YEAR -28.23% 2006-2007 2007-2008 -7.60% 2008-2009 2009-2010 -9.20% 2.30%

Net profit ratio

Interpretation:

- 49 -

The above graph indicates only one year net profit i.e.2006-2007 it was 2.30%. After that the net profit ratio fall down in year 2007-2008 it was -7.60%, 2008-2009 -28.23% & 2009-2010 -9.20%. This ratio proves to be very useful for prospective investors because it reveals the overall profitability of the concern. Higher the ratio better it is because it gives idea of improved efficiency

Net profit/Loss after tax 16) Return on assets =----------------------------------- *100 Total asset Particular Net profit after tax Total asset 2006-2007(in Rs.) 14,971,925 804,770,780 2006-2007 14,971,925 --------------*100 804,770,780 1.87% 2007-2008(in Rs.) -45,374,539 7,048,555,667 2007-2008 -45,374,539 --------------*100 7,048,555,667 -6.44% 2008-2009(in Rs.) -119,207,749 610,505,847 2008-2009 -119,207,749 --------------*100 610,505,847 -19.53% 2009-2010(in Rs.) -50,854,022 639,578,912 2009-2010 -50,854,022 -------------*100 639,578,912 -7.95%

Years

Calculation

Return on assets

Return on assets
5.00% 0.00% 2006-2007 -5.00% RATIO -10.00% -15.00% -20.00% -25.00% YEAR -19.53% -6.44% -7.95% Return on assets 2007-2008 2008-2009 2009-2010 1.87%

- 50 -

Interpretation: The return on total asset was 1.87% in year 2006-2007 & it decrease up to -6.44% in year 2007-2008 ,-19.53% in year 2008-2009 & in year 2009-2010 it improved up to -7.95% which is mainly due to decrease in net profit after tax. Net profit after tax 17) Return on equity = -----------------------------*100 Equity Equity = Share Capital + Reserve & surplus Particular Net profit after tax Equity 2006-2007(in Rs.) 14,971,925 479,385,818 2006-2007 14,971,925 --------------*100 479,385,818 2007-2008(in Rs.) -45,374,539 402,372,616 2007-2008 -45,374,539 ---------------*100 402,372,616 2008-2009(in Rs.) -119,207,749 443,639,721 2008-2009 -119,207,749 --------------*100 443,639,721 2009-2010(in Rs.) -50,854,022 310,166,499 2009-2010 -50,854,022 ---------------*100 310,166,499

Years

Calculation

Return on equity

3.12%

-11.28%

-26.88%

-16.39%

- 51 -

[R.0.E]
30.00% 20.00% 10.00% RATIO 0.00% -10.00% -20.00% -30.00% -20.34% YEAR 2006-2007 2007-2008 -6.81% 2008-2009 2009-2010 -11.21% [R.C.E] 19.24%

Interpretation: The return on equity in year 2006-2007 was 3.12% & it had decreased in year 2007-2008 up to -11.28%. In year 2008-2009 the return on equity again decreased up to -26.88% & in year 2009-2010 it was Net profit 18) Return on Capital employed =-------------------------------- *100 Capital employed Capital Employed = Shareholders Fund + Loan funds Shareholders Fund= Share Capital + Reserve & Surplus Loan funds = Secured loans +Unsecured loans Particular 2006-2007(in 2007-2008(in 2008-2009(in Rs.) Rs.) Rs.) Net profit 14,971,925 -45,374,539 -119,207,749 A]Shareholders Fund 479,385,818 402,372,616 443,639,721 B]Secured loans 198,832,517 160,578,780 137,862,078 C]Unsecured loans 100,000,000 103,430,428 4,339,759 D]Loan funds[B+C] 298,832,517 264,009,208 142,201,837 E]Capital 778,218,335 666,381,824 585,841,558 Employed[A+D] 2006-2007 2007-2008 2008-2009 -119,207,749 ---------------*100 585,841,558 -20.34%

2009-2010(in Rs.) -50,854,022 310,166,499 139,263,604 4,339,760 143,603,364 453,769,863

Years

2009-2010 -50,854,022 ---------------*100 453,769,863 -11.21%

Calculation [R.C.E]

14,971,925 -45,374,539 ---------------*100 ---------------*100 778,218,335 666,381,824 19.24% -6.81%

- 52 -

[R.C.E]
30.00% 20.00% 10.00% RATIO 0.00% -10.00% -20.00% -30.00% 2006-2007 2007-2008 -6.81% -20.34% YEAR 2008-2009 2009-2010 -11.21% [R.C.E] 19.24%

Interpretation: The return on capital employed rose in year 2006-2007 up to 19.24% as compared to its next years RCE i.e. 2007-2008-6.81%. In year 2008-2009 RCE decreased up to -20.34% & in year 2009-2010 the ratio improved up to -11.21%.

APPENDIX
SOMA TEXTILES & INDUSTRIES LIMITED BARAMATI UNIT BALANCE SHEET AS AT 31ST MARCH 2008
Schedule SOURCES OF FUNDS Head office a/c Reserves & surplus ---------402,372,616 --------LOAN FUNDS Secured loans Unsecured loans 2 3
- 53 -

2007-2008 (Rs)

2006-2007(Rs)

402,372,616 _

479,385,818 _

----------------------------------------------------------479,385,818

-------------------------------------------------------------

160,578,780 103,430,428

198,832,517 100,000,000

--------------------------------------------------------------------264,009,208 298,832,517

----------------------------------------------------------------TOTAL 666,381,824 778,218,335

=======================================

APLICATION OF FUNDS FIXED ASSETS Gross Block Accumulated Depreciation 4 1,183,345,110 (602,899,800) 1,153,408,246 (551,482,144)

------------------------------------------------------------------Net Block 580,445,311 601,926,102

CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash & Bank Balances
Loans, Advances & other current assets

5 6 7 8

63,532,707 14,165,505 7,146,275 39,566,224

116,167,443 34,413,938 21,512,512 30,639,500

--------------------------------------------------------------------124,410,256 LESS: CURRENT LIABILITIES AND PROVISTIONS Liabilities 9

- 54 -

202,733,393

40,258,807

27,989,998

Provisions

10

2,723,776

3,257,171

--------------------------------------------------------------------42,982,583 Net current assets MISCELLANEOUS EXPENDITURE Written off 4,508,841 4,694,724 81,427,673 31,247,169 171,486,224

--------------------------------------------------------------------TOTAL 666,381,825 778,218,335

SOMA TEXTILES & INDUSTRIES LIMITED BARAMATI UNIT PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2008
Schedule A] INCOME Sales Interest Received Other income TOTAL 12 13 600,889,091 819,827 31,185,373 632,894,291 645,057,254 854,857 20,556,217 666,468,328 2007-2008 (Rs) 2006-2007 (Rs)

=============================================================== B] EXPENDITURE Manufacturing & other Expenses 14 Interest Paid Depreciation 12 4 599,381,888 20,045,980 58,662,015 572,990,284 20,389,333 57,919,822

----------------------------------------------------------------------------------------------------------- 55 -

TOTAL

678,089,892

651,299,439

=============================================================== PROFIT PERIOD TAX Fringe Benefit tax (45,195,592) 178,947 15,168,889 196,964

-----------------------------------------------------------------------------------------------------------------PROFIT/ (LOSS) FOR THE YEAR

PROFIT/ (LOSS) TRANSFERRED TO HADE OFFICE

(45,374,539) (45,374,539)

14,971,925 14,971,925

===============================================================

SOMA TEXTILES & INDUSTRIES LIMITED BARAMATI UNIT BALANCE SHEET AS AT 31ST MARCH 2010
Schedule SOURCES OF FUNDS Head office a/c Reserves & surplus ---------310,166,499 ---------LOAN FUNDS Secured loans Unsecured loans 2 3 139,263,604 4,339,760 137,862,078 4,339,759 443,639,721 1 310,166,499 _ 443,639,721 _ 2009-2010(Rs) 2008-2009 (Rs)

-----------------------------------------------------------

------------------------------------------------------------

------ --------------------------------------------------------------------- 56 -

143,603,364

142,201,837

--------------------------------------------------------------------------TOTAL 453,769,562 585,841,558

===============================================

APLICATION OF FUNDS FIXED ASSETS Gross Block Accumulated Depreciation 4 1,144,016,467 (683,820,905) 1,411,741,007 (626,490,091)

------------------------------------------------------------------Net Block 460,195,562 515,250,916

CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash & Bank Balances
Loans, Advances & other current assets

5 6 7 8

103,832,436 13,415,725 13,546,729 48,588,461

30,948,481 21,064,406 4,666,896 38,575,148

---------------------------------------------------------------------179,383,350 LESS: CURRENT LIABILITIES AND PROVISTIONS Liabilities 9

- 57 -

95,254,931

183,712,046

26,633,631

Provisions

10

2,097,003

2,539,498

---------------------------------------------------------------------185,809,049 Net current assets MISCELLANEOUS EXPENDITURE Written off _ 4,508,841 (6,425,699) 29,173,129 66,081,802

------------------------------------------------------------------------TOTAL 453,769,562 585,841,558

===============================================

SOMA TEXTILES & INDUSTRIES LIMITED BARAMATI UNIT PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010
Schedule A] INCOME Sales Interest Received Other income TOTAL 12 13 552,839,754 1,319,223 15,437,766 569,596,743 422,137,997 588,866 27,994,389 450,721,252 2009-2010 (Rs) 2008-2009 (Rs)

======================================================================== ====== B] EXPENDITURE Manufacturing & other Expenses 14 Interest Paid Deffred Revenue Exp.W/off
- 58 -

536,760,529 23,031,182 4,508,841

484,024,791 28,225,260 __

12

Depreciation TOTAL

57,330,816 621,631,368

57,590,951 569,841,002

=============================================================== PROFIT PERIOD ITEMS 1,180,602 --- __

620,450,766 PROFIT BEFORE TAX Fringe Benefit tax PROFIT/ (LOSS) FOR THE YEAR (50,854,022) ----

569,841,002 (119,119,749) 88,000

(50,854,022) (119,119,749) PROFIT/ (LOSS) TRANSFERRED TO HADE OFFIC (50,854,022) (119,119,749) ===============================================================

FINDINGS AND CONCLUSION

- 59 -

SUGGESTIONS

- 60 -

BIBLIOGRAPHY Books:

Financial management Dr.N.M.Vechalekar

Websites:
www.google.com

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