CHAPTER 1

INTRODUCTION

INTRODUCTION TO ORGANISATION
Verka is a Co-Operative Company and is former oriented organization based on Co-Operative pattern. It is the king of Punjab Region as far as Milk Procurement is concerned. Its daily Milk production is around 2.00 lacs liters per day on an average and that is why huge amount of Milk production has become its core competency. It produces many daily products. "MILKFED" is a group of Milk Union established under operation flood program as the implementing agency by the government of Ropar and metropolis Chandigarh. The Ropar district co-operative milk produces union was established in the year of 1980. Milkfed , Punjab The Punjab State Cooperative Milk Producers Federation Limited popularly known as MILKFED Punjab, came into existence in 1973 with a twin objective of providing remunerative milk market to the Milk Producers in the State by value addition and marketing of produce on one hand and to provide technical inputs to the milk producers for enhancement of milk production on the other hand. Although the federation was registered much earlier, but it came to real self in the year 1983 when all the milk plants of the erstwhile Punjab Dairy Development Corporation Limited were handed over to Cooperative sector and the entire State was covered under Operation Flood to give the farmers a better deal and our valued customers better products. Today, when we look back, we think we have fulfilled the promise to some extent. The setup of the organization is a three tier system, Milk Producers Cooperative Societies at the village level, Milk Unions at District level and Federation as an Apex Body at State level. MILKFED Punjab has continuously advanced towards its coveted objectives well defined in its byelaws.

The main objectives for its establishment were: 1. To create an organized factor to develop and command a major share of urban milk market of Chandigarh.

2. To provide year around remuneration price to the small rural Milk producers organized into co-operative. 3. To provide quality milk and milk products to the consumers. 4. The milk plant carries out activities conductive to the economic

development to agriculturist by organizing effective production, process and marketing of commodities.The milk plant has installed capacity of process 1,00,000 litres of milk per day and it is registered handling capacity of 2,00,000 liters by the year 2008-09. The milk plant is managed by qualified professionals in the dairy field. The production facility are backed up by quality assurance, marketing training, financial management, data processing and other required services, providing a vibrant work environment to its personnel in pursuit of excellence. The milk plant is committed to supply quality and safe milk and milk products to its esteem customers at the right time. The milk plant has introduced ISO 9001:2000. Management system and Indian standard of hazard analysis and critical points (HACCP)/IS: 15000-1998 to ensure highest quality products with built in safety to consumers. Recently, the Verka Milk Plant Mohali of Milkfed Punjab have bagged prestigious National Productivity Council Award at National level Competition in the field of dairy processing industries conducted by National Productivity Council of India, New Delhi.

1.1 HISTORY AND PRESENT POSITION OF VERKA

A. HISTORY OF VERKA There is a very long history behind this popularity. In 1959, in a village named 'Verka' near Amritsar, Chief Minister of Punjab Sardar Partap Singh Kairon established a Dairy Development Corporation for safeguards of farmers and increase dairy business. After some time four more Milk Plants were established i.e. in Chandigarh, Mohali, Ludhiana and Bathinda. Thereafter it progressed and the number of Milk Plants roses to 8 Plants up to 1980. Before 1981 it is fully under the control of Punjab Govt. But after it in 1981 the Govt. has developed its name from Punjab State Co-operative Milk Producers Union Ltd. into MILKFED Punjab. All the plants were controlled by Head Office which is established at Chandigarh. Only one balance sheet was preparplants in Punjab and Profit & Loss for all the plants was prepared collectively. But in 1981 all plants started to make their own Balance Sheet and calculate Profit & Loss for their own plant. The fully Co-operative Society System was adopted and presently is in continue. The company has been well known by its brand name "VERKA" especially In Punjab and Haryana. Chandigarh Milk Plant was set up in year 1961-1962 to meet the milk initially. But it was not able to fulfill the growing requirements of Chandigarh City. Due to this reason another plant set up in September 1980 at Mohali (Punjab), which is adjoining to Chandigarh. MILK PLANT MOHALI "The Ropar Distt. Co-op Producer Union" It is one of the "MILKFED" group located at S.A.S Nagar, Mohali (Punjab). It is registered on 05.07.1978 under Punjab Cooperative Societies Act, 1961. It started its activities on September 1980. B. PRESENT POSITION OF VERKA Presently it has 856 Societies and around 46000 members are supplying milk and making their contribution to the Mohali (Punjab) Plant as follows:1. In Ropar District 520 Village Societies.

2. 3. 4. 5.

In S.A.S Nagar, Mohali 164 Societies. In Fatehgarh District 109 Societies. In Patiala District 60 Societies. In UT 3 Societies.

In Ropar District three chilling centers are situated namely Morinda, Jhinjri and Nurpur. The Milk Plant Mohali produces 2 Lakhs to 2.25 Lakhs liters of Milk per day during winter season and 1.50 Lakhs liters per day in summer season. About 2.00 Lakhs liters pasteurized liquid milk is being supplied to the citizen of urban area per day. The plant runs throughout 24 hours in three shifts at about 200% of its installed capacity manner with 500 employees.The plant is supplying milk mainly to the cities Chandigarh, Mohali and Panchkula also covering some adjoining cities of Himachal Pradesh and Haryana.It also produces PANEER, GHEE, LASSI, BIOYOGURT, GULAB JAMUN, KHEER, CURD, FLAVOURED MILK etc. All these products are marketed at the plant under the name "The Punjab State Coperation Milk Producers Federation Ltd" under the Brand name of 'Verka Milk Plant". 1.2 ORGANISATION NETWORK For the smooth running of plant, various sections are managed by the management. Each and every activity is delegated to particular section. It is impossible for top management to take decision on every problem, so various tasks are delegated to various sections. These sections are interrelated to have frequent contacts with one another and it is easy to share the information. These integrated tasks teams handle their problems and make the supervision easy. The following are the sections in the Verka Organisation: 1. 2. 3. 4. 5. Procurement Section Production Section Quality Control Section Marketing Section Accounts Section

6. 7. 8. 9. 10. 11.

Administrative Section Engineering Section Purchase Section Store Section MIS Section Security Section

1.3 NETWORK
Verka is having an apex body at the state land known as "MILKFED" Punjab, Chandigarh. To start with functions in various fields of different unions in different Districts and to operate with Dairying and Dairy Fields that is the operation flood with assistance of National Dairy Cooperation (NDC) Delhi and later on is launched to operate flood second who is affiliated to Punjab Milk Fed. It helps to its affiliated Districts Milk Co-operations in 11 Districts. These Districts Union are:1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. ROPAR PATIALA LUDHIANA FARIDKOT FEROZPUR SANGRUR BATHINDA GURDASPUR HOSHIARPUR JALANDHAR AMRITSAR

These unions in eleven districts of the state carry out smooth functioning of marketing, procurement, cattle breeding program though district co-operative unions. 1.4 PLANT AT A GLANCE Establishment 1980 : The Ropar District Co-operative Milk Producers Union Milk Plant, Mohali. Brand Name Installed Capacity Production Status Head Office Plant : : : : : : Verka 1, 00,000 Liters of Milk Per Day 2,00,000 Liters of Milk per Day Co-operative Society Milkfed , Punjab, Sector 34, Chandigarh The Ropar District Co-operative Milk Producers Union Ltd. Milk Plant, S.A.S Nagar, Mohali

Abbreviations used:DM ASSTT SUP INC. SEC Deputy Manager Assistant Supervisor Incharge Security S.R" JDC S.K F.S.R Sale Representative Junior Dairy Chemist Store Keeper Sales Representative

RATIO ANALYSIS
The RATIO ANALYSIS is one of the most powerful tools of financial analysis. It is one of the techniques of the financial analysis where ratios are used as yardsticks for evaluating the financial condition and performance of the firm. It is with the help of ratios that the financial statements can be analyzed more clearly and decisions made from such analysis. Analysis and interpretation of gives a better understanding of the financial conditions of the firm than what could have obtained only through the perusal of financial statements.

NATURE OF RATIO ANALYSIS It is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain decisions however ratio analysis is not an end in itself. It is only the means of better understanding of financial strength and weaknesses of firm. Calculation of mere ratios does not serve any purpose unless appropriate ratios are analyzed and interpreted .The ratios may be used as a symptom like blood pressure, pulse rate, or the body temperature and their interpretation depends on the caliber and the competence of analyst. Ratios help to summarize large quantities of financial data and to make qualitative judgments about the firm financial performance. For example current ratio, calculating by dividing the current asset by current liabilities indicates a qualitative relationship quantified relation between the current asset and current liabilities .This relationship is and index of yardstick, which permits a qualitative judgement to be formed about the firm ability to meet its current obligations. It measures the firm liquidity .The greater the ratio the greater is the firms liquidity and vice versa. The point to note is that the ratio reflecting a quantative relationship helps to form a qualitative judgement such is the nature of all financial ratios

MEANING OF RATIO

Ratios are the most frequently used in practice to access the financial performance and condition. The absolute accounting figure reported in financial statement does not provide any meaningful understanding unless it is related to some other relevant information ego Rs 500 crore net profits may look impressive, but firms performance can be said good or bad only when it is related with investments. The relationship between two accounting figures, expressed mathematically, is known as a financial ratio. For a layman ratio means %age of one in terms of other e.g. raw material in terms of sales. A ratio can be defined as "indicated quotient of two mathematical expressions" and as "title relationship between two and more numbers" According to accountants Handbook by Wixon, Kell and Bedford, a ratio is an expression of the quantitative relation between two numbers. According to Kohler a ratio is the relation of amount a to b expressed as a:b. Ratios can be expressed in two ways:Times:- When another divides one value, the unit used to express the quotient is termed as times Percentage:- If 100 is multiplied to the quotient obtained, the unit of expression is termed as percentage.

CLASSIFICATION OF RATIOS
Numerous ratios can be computed from a single set of financial statements; however only a selected few may be useful in given situation. In general, ratios may be classified on the following basis:1. Classification according to statement from which ratio is derived: The ratio may be classified on the basis of source of information for computing them. Balance sheet Ratios: These ratios establish a relation between two items of balance sheet. For example the ratio of current asset to current liabilities; fixed asset to share holders fund etc. Income Statement Ratios: The information for computing these ratios is taken from income statement. These ratios focus on relationship between two items or group of items, all of which are derived from the income statement; e.g Gross profit ratio, Net profit ratio etc. Inter statement ratios or combined ratios; The ratios present the relationship between two items, one is taken from balance sheet and the other from income statement; debtor turnover, asset turnover etc. 2. Classification according to importance -.Another way of classifying ratio is classification according to classification of each ratio. Some ratio are more important than other. Primary Ratios: The Primary ratio is one, which is of primary importance to the concern. For e.g. Return on Capital employed. Secondary Ratios: This classification is done to facilitate inter firm comparison and to focus on some factors of combinations of factors responsible for the success or failure of the organization. When such factors are isolated by means of other ratios, they are called secondary ratios. 3. Functional Classification: According to functional classification ratios are classified according to the test satisfied by each ratio. The commodity used financial ratios can be grouped into four categories as follows:

 Liquidity Ratios: Liquidity refers to the ability of the firm to discharge its short term financial obligations as they become due. The liquidity of firm depends upon its ability to arrange cash in case of need. The liquidity ratio portray the capacity of the business to meet its short term obligations out of its short term resources.

Leverage Ratios/Solvency Ratios: These ratios measures the owners stake in the business Vis a Vis that of outsiders. These ratios through light on long term solvency of the business as reflected in its ability to assure long term creditors as regard, payment of interest whenever it falls due and return of principal on maturity.

Profitability Ratios: The profitability ratios highlight the end result of business and throw light on efficiency in operation. Profitability ratios are computed either comparing profits with investments or profits with sales.

Activity Ratios: These ratios throw light on the efficiency with which the resources of the business are managed.

INTERPRETATION OF RATIOS
Ratios by themselves do not convey very much .To be of use in decision making ratios require interpretation based upon logical reasoning and analysis. Broadly, speaking there are six different ways in which ratios are interpreted. 1. Rules of thumb: A single individual ratio may not be helpful in drawing conclusion about the financial health of the business. But there are certain rules of thumb based upon well proven conventions, which can be used for making current comparisons of individual ratios. For example a ratio of 2:1 of current assets to current liabilities is considered reasonably good. However it may be mentioned that these rules of thumb are at best only approximations and therefore may not lead to correct conclusions.

2. Group of Related ratios: A group of related may be used for the purpose of interpretation. A single ratio may not lead to correct conclusion. In such cases single ratios supported by additional ratios become more meaningful. For example ratio of net profit to sales may be supported by operating expenses to sales ratio, non operating income to sales ratio etc. to draw more logical conclusions.

3. Temporal analysis: The behaviour of ratios may be studied over time to draw conclusions about the trend in the performance of a firm. This analysis depict the direction of change and reflects, whenever the financial position of the firm has improved, deteriorated or remain constant over time. However while making this analysis it must be ensured that the accounting policies of the firm remain unchanged.

4. lnter firm comparison: For the purpose of making inter firm comparisons to know the relative position of the different firms the ratio of one firm can be compared with the ratios of some other selected firms. However while doing analysis two things must be kept in mind , firstly the firms must be similar(should be of same size and in same industry) and the secondly the accounting policies and methods used by the firms being compared should not be sufficient.

5. Comparison with Industry Average: The industry averages of the ratios can be used for comparing the ratios of the firms comprising that industry. The comparison of the firm with the industry average depict whenever the performance of the firm is below average of above average.

6. Projected Ratios: Projected ratios can be computed from the data taken from projected financial statements. These projected ratios are used as standards of performance. The ratios computed from the actual financial statements are compared with the projected ratios. The analysis helps in evaluating the performance of a firm in relation to its plans.

GUIDELINES FOR THE USE OF RATIOS

Following guidelines should be kept in mind while interpreting the various ratios: 1. Accuracy of financial statements: The ratios are calculated from the data available in financial statements. The reliability of the ratios is linked to the accuracy of the information in the statements. Before calculating the ratios one should see whether the proper concepts and conventions have been used for preparing the financial statements or not. The competent auditors should properly audit these statements. The precautions will establish the reliability of the data given in the financial statement.

2. Objective of the analysis: The type of ratios calculated will depend on the purpose for which they are required. If the purpose is to study current financial position, then the ratios relating to current assets and liabilities will be studied. The purpose of the user is also important for the analysis of ratios. A creditor ,a banker, a shareholder, all has different objects for studying the ratios.

3. Selection of ratios: Another precautions to taken is the proper selection of the appropriate ratios. The ratio should match the purpose for which they are required. Calculations for large number of ratios without determining their need in present context may confuse the things instead of solving them. Only those ratios be selected which can through proper light on the matter to be discussed.

4. Use of standards: The ratios will given an indication of financial position only when they are discussed with reference to some standards. Unless otherwise these ratios are compared with the certain standards one will not be able to reach any conclusion. These standards may be rule of thumb as in case of current ratio (2:l) or acid test ratio(l:l) , past , industry and projected ratios etc.

5. Caliber of the analyst: The ratios are only the tools of analysis and their interpretation will depend upon the caliber of the analyst. He should be familiar with the various financial statements and the significance of the changes etc. A wrong interpretation my create havoc for the concern since wrong conclusion may lead to wrong decision. The utility of the ratios are linked with the expertise of the analyst.

6. Ratios provide only a base: The ratios are only the guidelines for the analyst he should not base his decision entirely on them. He should study any other relevant information, situation in the concern, general economic environment etc before reaching final conclusions. A businessman will not afford the single wrong decision because it may have far reaching impact.

SIGNIFICANCE OF RATIO ANALYSIS

1. Helps in decision making: Financial statements are prepared primarily for decision making. But the information provided in the financial statement is not an end in itself and no meaningful conclusions can be drawn from these statements alone. Ratios analysis helps in making decision from information provided in the financial statement.

2. Helps in financial forecasting and planning: Over a period of time a firm or industry develops certain norms that may indicate future success or failure. If there is relationship in firms data over time period, the ratios may provide clues on the trend or the future problem.

3. Helps in communicating: The financial strength and weakness of the firm are communicated in more easy and understandable way by use of ratios the information contained in these statements is conveyed in more meaningful manner to one for whom it is meant. Thus ratios help in communication and enhancing the value of the financial statement.

4. Helps in coordination: Ratio helps in even coordination which of utmost importance in the business management. Better communication of efficiency weakness of enterprise results in coordination in enterprise.

5. Helps in control: Ratio analyst helps in making effective control of the business. Standard ratios based on the pro forma financial statements help in calculating variance or derivations, if any, which can be compared with the standards so as to take corrective actions at the right time. The weakness, if any, comes to the knowledge of the management, which helps in effective control of the business.

6. Shareholders: An investor in the company will like to assess the financial position of the concern where is going to invest. His first interest will be of his security of his investment and then the return in the form of dividend against them. The investor will feel satisfied only if the concern has sufficient amount of assets. Long term solvency ratios will help them in assessing the financial position of the firm. Profitability ratios on the other hand will help them in knowing the profitability position.

7. Creditors: The creditors or the supplier extend short term credit to the concern. They are interested to know whether the financial position warrant their of the current assets. If current assets are quiet sufficient to meet the current liabilities the creditor will not hesitate in extending credit facilities. Current and acid test ratios will help them in giving an idea about the current financial position of the firm.

8. Employees: The employees are also interested in the financial position of the firm especially profitability. Their wages increase and the amount of fringe benefits are directly related to the volume of the profits earned by the firm. The employees make use of the information in the financial statement. Various profitability ratios like gross profit, operating profit, net profit enable the employee to put forward their views for the increase in the wages and benefits.

9. Government: Government is interested in the overall strength of the industry. Various financial statements published by the industrial units are used to calculate ratios for determine the short term, long term and overall financial position of the concern. Profitability index is also prepared with the help of the ratios. Government may base their future policies on the basis of the industrial information available from various units. The ratio may be used as the indicator of overall financial strength of public as well as private sector. In the absence of the reliable economic information, government policies may not prove successful.

10. Tax audit Requirement: Section 44AB was interested in the income tax act by the finance act 1984.Under this section every concern engaged in any business and having the turnover or gross profit exceeding Rs 40 lacs is required to get the accounts audited by the chartered accountant and submit the tax audit report before the due date of filing the return of income under section 139(1). In case the professional a similar report is required if the gross receipt exceed Rs 10 lacs. Clause 32 of IT act required that the following accounting ratios be given such as Gross profit turnover/ Net profit turnover, stock in trade, material consumed, finished goods produced etc.

LIMITATIONS OF THE RATIO ANALYSIS

The ratio analysis is widely used as the technique to evaluate the financial position of the company. The following are the limitations of the ratio analysis. 1. Standards for comparison: Ratio of the company have meaning, only when they are compared with some standard. It is difficult to find out proper basis of comparison. Usually it is recommended that the ratios are compared industry averages, but they are not easily available.

2.

Company Differences: Not only the industry differs in their nature situations of two similar companies also differs in their size, accounting procedures and policies. Similarly, the factors influencing the performance of company in one year may change in another year. Thus the comparison of the ratios of two companies become difficult and meaning less , when they are operating two different situations.

3.

Price level Changes: The interpretation and comparisons of the ratios are also invalid by the changing value of money. The accounting figures presented in the financial statements, are expressed in monetary terms , which is assumed to be remain constant. In fact ,prices change over year, which affects the accounting earnings. At least three effects of inflation can be identified:-

I.

The nominal Value of inventory increases on account of rising prices, which result into inventory profit.

II.

Assets are stated at original cost in the book of account, because of inflation, their current value or replacement cost will be much higher than book value. Thus the depreciation calculated on the book value will be very low.

III.

Inflation affects the accounting profits of the firm, which borrow. If the interest rate is fixed, the shareholders gain at the cost of lenders. The inflation and the accounting profits do not recognize the profits arising from the borrowing reduce the real value of lenders obligations.

4.

Different definitions of the variable: In practice, the difference exit in the meaning of different terms. Diversity of the views exits in what should be included in the net worth, current assets or current liabilities or in the capital employed. Similarly profits means different to different people.

5.

Changing Situations: The ratios do not have much use if they are not analyzed over years. The ratio at a moment of time suffers from temporary changes. This problem can be resolved by analyzing the trend of ratios over time but still the analysis is static to certain extent.

6.

Historical data: The basis to calculate the ratios is historical financial statements. The financial analyst is interested in what happens in the future, while the ratios indicate what happened in past.

CHAPTER-2 REVIEW OF LITERATURE

Review of literature is the most useful and simple method of formulating the research problem. The researches done by previous researchers are reviewed and their usefulness is evaluated to serve as basis for further research. Thus researcher reviews builds upon the work of others. The reviews that are collected by the researcher should give an insight into the field under study. The reviews must explain the need and scope of the study under consideration. It is not necessary that the reviews are to be in accordance with the objectives. Ria Goel (2007): Ratio Analysis Caffe Nero, Ratio Analysis is a tool used to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry to judge the performance of the company. Caff Nero Group plc, the leading

independent UK coffee house operator of 282stores, which has been voted the top rated brand by consumers for the last six consecutive years. It had another year of solid progress, again achieving revenue and profit growth. Its revenue gone up by 29% to 90.7 million where as in year 2005 it was 70.1 million. Earnings before interest, tax , depreciation and amortization has increased by 38% to 15.6 million whereas it as 11.3million in year 2005. Operating profit (before prior year goodwill write off) improved by 38% to 8.2 million where as in year 2005 it was 6.0 million). Overall Operating profit improved by 74% to 8.2m from 4.7million in 2005.

CHAPTER-3 SCOPE AND OBJECTIVES OF THE STUDY

SCOPE OF THE STUDY

The scope of this study to analyze the two years financial reports of the Verka Milk Plant Mohali. And find out the ratios from balance sheets, profits and loss accounts, and from other financial papers, after the calculations of ratios compare them with the previous figures . The second main purpose of this study to give the yearly report to its shareholders, outsiders and to the management to make the good, sound and essential decision to run the organization in a smooth and good manner. This project will also helpful to everyone to tell about the financial condition of the verka milk plant ,mohali . all the study has conducted on the verka milk plant, mohali. In this study calculated ratios also tells about the performance the plant in the years , from 01-04-2009 to 31-03-2011. This analysis also provides indicators of past performance in terms of critical success factors of a business. This assistance in decision making reduces reliance on guesswork and intuition and establishes a basis for a sound judgment. In the project financial techniques are used to calculate the ratio and do analysis , and do the interpretation of the calculated results.

OBJECTIVE OF THE STUDY

1. To Analysis Financial Statements: To acquire enough knowledge about the profitability and financial health of the business. In the light of the knowledge so acquired by us, we can take necessary decisions about their relationships with the concern. 2. To Simplify Accounting Data: To simplifies and summaries a long array of accounting data and makes them understandable. Also to disclose the relationship between two such figures have a cause and effect relationship with each other. 3. To Locate the Weak Spots of the Business: We have calculated two years ratios and compared with each other so that weak spots will be located and remedial measures will be taken. 4. For Effective Control of the Enterprise: To disclose the liquidity,solvency and profitability of the enterprise. Such information enables management to assess the changes that have taken place over a period of time in the financial activities of the business. 5. To Study the Financial Soundness: To disclose the position of business with different viewpoints. With the help of we can draw conclusions regarding the financial health of the business enterprise. such a study

CHAPTER-4

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done systematically. According to D. Slesinger and M. Stephenson Research may be defined as the manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that Knowledge aids in the construction of theory or in the practice of an art. Thus it is an original contribution to the existing stock of knowledge of making for its advancement.

RESEARCH Research is the systematic process of collecting and analyzing information to increase our understanding of the phenomenon under study. It is the function of the researcher to contribute to the understanding of the phenomenon and to communicate that understanding to others.

RESEARCH DESIGN Research design is known as framework within which the whole activity of research and methods or procedures is clearly mentioned under which the research is to conduct.

Type of Research Exploratory & Descriptive research design is used for the study. Sampling technique Convenience sampling technique is used for the survey.

DATA COLLECTION Secondary data is used for the study.

SECONDARY SOURCES: 1. 2. 3. Balance Sheet of the Verka Milk Plant. Books for financial statement analysis. Other financial Accounts.

CHAPTER 5 ANALYSIS AND INTERPRETATION

ANALYSIS OF DATA
After data have been collected, the researcher turns to the task of analyzing them. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through tabulation and drawing statically inferences. The term analysis refers to the computation of certain measure along with searching for patterns of relationship that exist among data groups. Thus, in the process of analysis, relationships or differences, supporting or conflicting with original or new data. After analyzing the data, the researcher should have to explain the findings on the basis of some theory. It is known as interpretation. That made possible counting of classified data easy. From the master table various summery tables were prepared. They have been presented along with their interpretation in this manner. And we have used many arithmetic methods to test the data in the manner of ratios.

ANALYSIS OF SHORT-TERM FINACIAL POSITION OR TEST OF LIQUIDITY

The short-term creditors of a company like suppliers of goods of credit providing short-term loans are primarily interested in knowing the company's ability to meet its current or short-term obligation as and when these become due. Two types of ratios can be calculated for measuring short-term financial position or short-term solvency of a firm. 1. Liquidity Ratios 2. Current Assets Movement or Efficiency Ratios.

1.

Liquidity Ratios: It refers to the ability of a firm to meet its short-term financial obligations when and as they fall due. In fact, analysis of liquidity needs the preparations of cash budgets and cash and fund flow statements; but liquidity ratios by establishing a relationship between cash and other current assets to current obligations, provide a quick measure of liquidity. The main concern of liquidity ratio is to measure the ability of the firm to meet their short-term maturing obligations. Failure to do this will result in total failure of the business, as it would be forced into liquidation. To measure the liquidity of a firm, the following ratios can be calculated: I. II. Current Ratio Quick or Acid Test or Liquid Ratio

I. Current Ratio: This ratio explains the relationship between Current Assets and Current Liabilities of a business. The formula for calculating the ratio is:Current Ratio= Current Assets/ Current Liabilities 'Current Assets' includes those Assets which can be converted into cash within a YEAR'S time like Cash in Hand, Cash at Bank, B/R, Short-term Investments, Debtors, Stock, and Inventories etc. 'Current Liabilities' include those liabilities which are repayable in a YEAR'S time like Bank O/D, B/P, Creditors, Provision for Taxation, Proposed Dividends, Outstanding Expense and Loans payable with in a year etc.

SIGNIFICANCE:This ratio is used to assess the firm's ability to meet its short term liabilities on time. According to accounting principals, a current ratio of 2:1 is supposed to be an IDEAL RATIO. It means that Current Assets of a business should, at least, be twice of its Current Liabilities. The higher the ratio, the better it is, because the firm will be able to pay its Current Liabilities more easily. The reason of assuming 2:1 as the Ideal Ratio is that the Current Assets includes such Assets as Stock, Debtors etc. from which full amount cannot be realized in case of need, hence even if half the amount is realized from the Current Assets on time, the firm can still meet its Current liabilities. If the Current Ratio is less than 2:1, it indicates lack of liquidity and shortage of working capital. But a much higher ratio, even though it is beneficial to' the short term creditors, is not necessarily good for the company. A much higher ratio than 2:1 may indicate the poor investment policies of the management. While calculating Current Ratio, we have taken Loans & Advances as Debtors in the Current Assets. In Current Liabilities, we included the Provisions to calculate Total Current Liabilities.

RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS CURRENT RATIO (in times):(Figures in rupees)
Particulars Cash in Hand Cash at Bank
Short term Securities

2009-10 73309 162457956

0

2010-11 158191.37 184842721.20

0

Short term Investment Bill Receivable Debtors Closing stock (Raw Material) Closing stock (Milk Products) Inventories Loans & Advances Total Current

12508666 4606562

10219882.37 7430239.32

159543257

207136418.75

10731382 4606563

19839137.61 7430239.32

395976115

503551937.4

Assets Current Liabilities Provisions Total Current Liabilities Current Ratio 1.66 1.49 9913434
239020506

229107072

324365864.69

12028333
336394197.69

1.7

1.65

1.6

1.55

current ratio

1.5

1.45

1.4 2009-10 2010-11

ANALYSIS OR INTERPRETATION:
In 2009-10: The Current Ratio is 1.66 times, it shows current assets more than current liabilities are considered to be satisfactory. In 2010-11: The current ratio is 1.49 times, it has been decreased from last year,again the current assets are more than current liabilities which signifies good condition of the company.

II

QUICK OR ACID TEST OR LIQUID RATIO:

Quick Ratio indicates whether the firm is in a position to pay its current liabilities within a month or immediately. As such the quick ratio is included by dividing liquid assets (Quick Assets) by current Liabilities:Quick Ratio or Acid Test Ratio = Liquid Assets/Current Liabilities 'Liquid Assets' means those assets which will yield cash very shortly. All current assets except stock and prepaid expenses are included in liquid assets. Stock is excluded from liquid assets because it has to be sold before it can be converted into cash. Prepaid expenses too are excluded from the list of liquid assets because they are not expected to be converted into cash. Liquid assets thus include cash, debtors, bill receivable and short term securities.

SIGNIFICANCE: An ideal quick ratio is said to be 1:1. if it is more, it is considered to be better. The idea is that for every rupee of current liabilities, there should be at least one rupee of liquid assets. This ratio is better test of short-term financial position of the company than the current ratio, as it considers only those assets which can be easily converted into cash. Stock is not included in liquid assets as it may take a lot of time before it is converted into cash. Quick ratio thus is more rigorous test of liquidity than the current ratio and when used together with current ratio, it gives a better picture of the short term financial position of the firm. While calculating Quick Assets, we have deducting Inventories assuming as a stock -from Current Assets so that Quick Assets are obtained.

RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS Quick Ratio (in times):
Particulars Current Assets Closing stock (Raw Material) Closing stock (Milk Products)

(Figures in rupees)
2009-10 395976115 (4606562) (159543257) 2010-11 502551937.4 (7430239.32) (207136418.75)

Inventories Total Quick Assets

(10731382) 221094914 239020506 0.93

(19839137.61) 268146141.72 336394197.69 0.79

Total Current Liabilities Quick Ratio

quick ratio
0.95

0.9

0.85 quick ratio 0.8

0.75

0.7 2009-10 2010-11

ANALYSIS OR INTERPRETATION:

In 2009-10: The quick ratio is .93 times. It is not as per standard ratio of 1:1. In 2010-11: The quick ratio is .79 times. Current liabilities has decreased but still there are no assets to cover these liabilities .

2. CURRENT ASSETS MOVEMENT OR EFFICIENCY/ ACTIVITY RATIOS:

Funds are invested in various assets in business to make sales and earn profits. The efficiency with which assets are managed directly affects the volume of sales. The better the management of assets, the larger is the amount of sales and profits. Activity ratios measure the efficiency or effectiveness with which a firm manages its resources or assets. These ratios are also called turnover ratios because they indicate the speed with which assets are converted or turned over into sales. For example: Inventory turnover ratio indicates the rate at which the funds invested in inventories are converted into sales. Depending upon the purpose, a number of turn over ratios can be calculated, as Debtors or Receivable Turnover, Average Collection Period, Stock/ Inventory Turnover, Creditors/Payable Turn over, Average Payment Period, Working Capital Turnover Ratio. I. Inventory/Stock Turnover Ratio:

This ratio indicates the relationship between the cost of goods sold during the year and average stock kept during that year.
Stock Turnover Ratio= COGS/Average Stock Cost of Goods Sold= Opening Stock + Purchases + Carriage + wages + other direct charges - Closing Stock OR Net Sales - Gross profit. Average Stock= (Opening Stock + Closing Stock)/ 2 SIGNIFICANCE: This ratio indicates whether stock has been efficiently used or not. It shows the speed with which the stock is rotated into sales or the number of times the stock is turned into sales during the year. The higher the ratio the better it is. Since it indicates that the stock is selling quickly. In a business, where stock turnover ratio is high, goods can be sold at a lower margin of profit and even the profitability may be quite high. A low stock turnover ratio indicates that stock does not

sell quickly and remains lying in the godown for a long time. This results in increased storage cost, blocking of funds and losses on account of goods becoming obsolete. This ratio can be compared with the previous year, the management can access whether the stock has been more efficiently used or not.

RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS STOCK TURNOVER RATIO (in times): (Amount in figures)
Particulars 2009-10 2750292468 2010-11 3501358726.1

Cost of Goods Sold Opening Stock Raw Material Milk Products Closing Stock Raw Material Milk Products Total Stock Average Stock
Stock Turn Over Ratio

2602243 141409710

4606563 159543258

4606562 159543257 308161772 154080886

7430239 207136419 378716479 189358240

17.84

18.49

STOCK TURNOVER RATIOS

18.6 18.4 18.2 18 17.8 17.6 17.4 2009-10 2010-11

STOCK TURNOVER RATIOS

ANALYSIS OR INTERPRETATION:
In 2009-10: The Stock Turnover Ratio is 17.84 times more than its average stock. It means how efficiently stock is being utilized in the company to convert into COGS or sales. The higher the ratio the better it is. So it indicates that stock is selling quickly, it is a good indicator for company that stock is being efficiently used in the company. In 2010-11: The Stock Turnover Ratio is 18.49 times more than its average stock, it has been increased from previous year. This shows that company is now utilizing their stock into sales. High turnover suggests efficient inventory control, sound sales policies reputation in the market, better competitive capacity.

ANALYSIS OF LONG-TERM FINANCIAL POSITION OR TEST OF SOLVENCY

These ratios are calculated to assess the ability of the firm to meet its long term liabilities as and when they become due. Long term creditors including debentures holders are primarily interested to know whether the company has ability to pay regularly interest due to them and to repay the principle amount when it become due. Solvency ratios disclose the firm's ability to meet the interest cost regularly and long term indebtedness at maturity. Solvency ratios include the following ratios: 1. Debt-Equity Ratio 2. Solvency Ratio 3. Capital gearing ratio

1.

Debt-Equity Ratio:

This ratio expresses the relationship between long term debt and shareholders funds. It indicates the proportion of the funds which are acquired by long term borrowings in comparison to shareholders funds. This ratio is calculated to ascertain the soundness of the long term financial policies of the firm. The Debt-Equity can be calculated are as follows: Debt-Equity= Outsiders Funds/ Shareholders Funds OR External Equities/ Internal Equities Outsiders Funds: These refer to long term liabilities which mature after one year. These include debentures, mortgage loans, public deposits etc.

Shareholder's funds: These include equity share capital, preference capital, share premium, general reserve and other reserves and credit balance of profit and loss account. However accumulated losses and fictitious assets remaining to be written off like preliminary expenses, underwriting commission, share issue expenses should be deducted.

SIGNIFICANCE: This ratio is calculated to assess the ability of the firm to meet its long term liabilities. Generally Debt-Equity Ratio is of 2:1 is considered safe, if this is more than that it shows a rather risky financial position from the long term point of view as it indicates that more and more funds are invested in the business; are provided by long term lenders. The lower this ratio the better it is for long term lenders because they are more secure in that case. Lower than 2:1 Debt-Equity Ratio provides sufficient protection to long term lenders. A high Debt-Equity Ratio which that the claims of Creditors are greater than those of owners, may not be considered by the time of liquidation of the firm.

Current liabilities:
These are taken as an Outsider's Funds. As Current Liabilities which mature after one year so Current Liabilities are treated as Outsider's Funds. In order to calculate Shareholder's Funds, we include Share Capital and Reserves & Surplus. We deduct Depreciation Reserve Fund as it is included in Reserve and Surplus.

RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS DEBT-EQUITY RATIO (in times):

(amount in rupees) Particulars

2009-10 2010-11

Current Liabilities (outsiders) 239020506.84

336394197.68

Share Capital Reserve & Surplus

38364500 251300481.54 103720892.39

50141600 270401123.54 112722830.18

Depreciation Reserve Fund

Shareholder's Funds
Debt-Equity Ratio

185944089 1.29

207819892.36 1.62

DEBT EQUITY RATIOS

1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2009-10 2010-11 DEBT EQUITY RATIOS

ANALYSIS OR INTERPRETATION:
In 2009-10: The Debt-Equity Ratio is 1.29 times. It shows risky-financial position from the long term point of view as it indicates that more and more funds invested in the business are provided by long term lenders. In 2010-11: The debt equity ratio is 1.62 times. Good for company as debt is being maintained as in the previous years.

2.

SOLVENCY RATIO OR THE RATIO OF TOTAL ASSETS:

This ratio indicates the relationship between the total liabilities to outsiders to total assets of a firm and can be calculated as follows: Solvency Ratio= Total Liabilities to Outsiders/ Total Assets SIGNIFICANCE: As this ratio represents the relationship between the total liabilities to outsiders to total assets, more satisfactory of stable is the long-term solvency position of firm. Total liabilities to outsiders are assumed as current Liabilities.

RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS SOLVENCY RATIO (in times):

(Amount in rupees)

Particulars Current Liabilities (Outsiders) Total Assets SOLVENCY RATIO (in times):

2009-10 239020506 496217457.71 0.48

2010-11 336394197.69 616920122.78 0.54

solvency ratios

94.02 94.01 94 93.99 93.98 93.97 2009-10 2010-11 solvency ratios solvency ratios

ANALYSIS OR INTERPRETATION:
In 2009-10: The Solvency Ratio is 0.48 times more than its total assets. In 2010-11: The Solvency Ratio is 0.54 times more than its total assets. It is also increasing from the last year and we can say that it is not a healthier signal. It indicates that the company has to pay more liabilities compared to last year.

3. CAPITAL GEARING RATIO:

This ratio establishes the relationship between equity share capital including reserve and surpluses to preference share capital and other fixed interest bearing loans. This ratio is calculated as follows: Capital Gearing Ratio= Fixed Income Bearing Funds/Long term Debt Bearing Fixed Interest SIGNIFICANCE: Capital Gearing ratio is very important leverage ratio Gearing Should be kept in such a. way that the company is able to maintain a steady rate of dividend. High Gearing ratio is not good for a new company or a company in which future earnings are uncertain. There is no preference capital so we have not included in it. We have also taken long-term debt bearing fixed interest as secured loans (long-term Loans).

(RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS) CAPITAL GEARING RATIO (in times):
Particulars Equity Share Capital Reserve & Surplus 2009-10 38364500 251300481.54 289664981.54 2010-11 50141600 270401122.54 320542722.54

Fixed Income Bearing Funds

Secured loans Loans)

(long term

7703910

1200000

CAPITAL GEARING RATIO (in times):

37.6

267.11

RATIOS
300 250

200

150

RATIOS

100

50

0 2009-10 2010-11

ANALYSIS OR INTERPRETATION:
In 2009-10: The Capital Gearing Ratio is 37.6 times. In 2010-11: The Capital Gearing Ratio is 267.11 times. High Gearing ratio is not good for the company or a company in which future earnings are uncertain. It has been increasing from last year. It shows that company has no good signal about its profitability and its financial position.

ANALYSIS OF PROFITABILITY OR PROFITABILITY RATIOS

The main object of all the business concerns is to earn profit. Profit is the measurement of the efficiency of the business. Equity shareholders of the company are mainly interested in the profitability of the company. Profitability Ratios measure the various aspects of the profitability of a company such as

1. 2.

What is the rate of the profit on sales? Whether the profits are increasing or decreasing? And if decreasing, then it helps in finding out the cause of their decrease.

3.

Whether an adequate return is being obtained on capital employed?

The following ratios are known as profitability ratios: I. II. III. IV. V. Gross Profit Ratio Operating Ratio Operating Profit Ratio Expenses Ratio Net Profit Ratio

I. Gross Profit Ratio:

This ratio shows the relationship between gross profit and sales. Gross Profit Ratio= Gross Profit/Net Sales*100 Net Sales= Sales- Sales Return

SIGNIFICANCE:
This ratio measures the margin of profits available on sales. The higher the ratio, the better it is. The ratio should be adequate enough not only to cover the operating expenses but also to provide for the depreciation, interest on loans, dividends and reserves. The ratio is compared with earlier ratio and important conclusion is drawn from such comparison for instances if there is a decline in gross profit ratio in comparison to previous year it may be concluded that: I. Price of material purchased, freight, wages and direct changes may have gone up but selling price may not have gone up in proportion to increase in the cost. II. The selling price may have fallen but the price of the materials, freight, wages and other direct charges may have not fallen relatively. III. There is a fall in sales of more profitable variety of goods.

RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS GROSS PROFIT RATIO (in %):

(Amount in Rupees)
Particulars Gross Profit Net Sales GROSS PROFIT RATIO (in %): 2009-10 174840479 2925132950 5.98 2010-11 223873759.55 3725232485.65 6

6.005 6 5.995 Axis Title 5.99 5.985 5.98 5.975 5.97 2009-10 Axis Title 2010-11 GP ratio

ANALYSIS OR INTERPRETATION:
In 2009-10: The Gross Profit Ratio is 5.98%. In 2010-11: The Gross Profit Ratio is 6 %. Gross profit must be sufficient to provide for operating expenses, interest on loans, depreciation and dividends otherwise company will not operate in this environment. It must generate sufficient profits. Higher the ratio better it is.

II.

OPERATING RATIO:

It establishes the relationship between cost of goods and other operating expenses on the one hand and the sales on the other hand. It measures the cost of operations by dividing operating costs with the net sales. Operating Ratio= Operating Cost/Net sales*100 Operating Cost= COGS+ Operating expenses

SIGNIFICANCE:
This ratio indicates the percentage of net sales that is consumed by operating cost. Obviously, higher the operating ratio, the less favorable it is, because it would have margin (operating profit) to cover interest, income-tax dividend and reserves. There is no rule of thumb for this ratio as it may differ from to firm depending upon the nature of its business and its capital structure. RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS OPERATING RATIO (in %): (Amount in Rupees) Particulars Cost of Goods Sold Operating Expenses:Administrative Exp. Store Exp. Distribution Exp. Operating Cost Net Sales OPERATING RATIO (in %): 43822922.39 19740308.84 22110411.69 2835966110.9 2925132950 96.95 69379777.21 30153398.61 29799704.65 3657691606.58 3725232485.65 98.18 2009-10 2750292468 2010-11 3501358726.11

98.4 98.2 98 97.8 97.6

Axis Title

97.4 97.2 97 96.8 96.6 96.4 96.2 2009-10 Axis Title 2010-11 operating ratio

ANALYSIS OR INTERPRETATION:
In 2009-10: In 2010-11: Operating Ratio of the company is 96.95 %. Operating Ratio of the company is 98.18%.

In 2009-10 GP ratio is lower than 2010-11,so in 2009-10 companys position is better than 201011.because lower the operating ratio, better is the position because greater is the profitability and management efficiency of the concern.

III. OPERATING PROFIT RATIO:

This ratio is calculated by dividing operating profit by sales. This ratio is calculated are as follows: Operating profit ratio = Operating profit x 100 Sales Operating Profit = Net sales - Operating Cost Operating Cost = Cost of goods sold + Administrative and office expenses + selling and distributive expenses. OPERATING PROFIT RATIO (OF VERKA MILK PLANT FOR THE LAST TWO YEARS) (amount in Rupees) Particulars Sales Operating Cost Operating Profit Net Sales 2009-10 2925132950 2835966110.9 89166840 2925132950 2010-11 3725232485.65 3657691606.58 67540879.09 3725232485.65 1.81

COST OF GOODS SOLD 3.05 RATIO (in %):

RATIOS

2010-11

RATIOS

2009-10

0.5

1.5

2.5

3.5

ANALYSIS OR INTERPRETATION:
In 2009-10: The operating profit ration is 3.05% In 2010-11:The operating profit ration is 1.81%

(IV) EXPENSES RATIOS:

Expenses ratios indicate the relationship of various expenses to net sales. Expenses ratios are calculated by dividing each item of expenses with the net sales to analyse the cause of several of the operating ratio. The ratio can be calculated for each individual item of expenses like cost of sales ratio, administrative expenses ratio, selling expenses ratio, material consumed ratio, etc.

SIGNIFICANCE:This ratio indicates the relationship of various expenses to net sales. The lower the ratio, the greated is the profitability and higher the ratio, lower is the profitability. While interpreting the ratio, it must be remembered that for a fixed expenses like rent, the ratio will fall if sales increase and for a variable expense, the ratio in proportion to sales shall remain nearly the same.

EXPENSES RATIO MAY BE CALCULATED AS: Cost of goods sold ratio: Cost of goods sold/ Sales COST OF GOODS SOLD RATIO (OF VERKA MILK PLANT FOR THE LAST TWO YEARS) (amount in Rupees)

Particulars
Cost of goods sold Net Sales
COST OF GOODS SOLD

2009-10 2750292468 2925132950 94.02

2010-11 3501358726.11 3725232485.65 93.99

RATIO (in %):

RATIOS

2010-11

RATIOS

2009-10

93.97

93.98

93.99

94

94.01

94.02

94.03

ANALYSIS AND INTERPRETATION:

(I)

Cost of goods sold ratio:

The cost of goods sold ratio of the company in 2009-10 is 94.02% ,2010-11 is 93.99% . This shows that company has decreased their ratio because lower the ratio, better it is for the company.

2. OTHER PROFITABILITY RATIOS:

Profits are the measures of overall efficiency of a business. The Higher the profits, the more efficient are the business considered. Following are the important overall profitability ratios or measures of Return on Investments: I II Return on Shareholder's Investment Capital Turnover Ratio

1.

Return on Shareholder's Investment or Net Worth:

This ratio establishes the relationship between net profits (after interest and taxes) and the proprietor's funds. Thus ROI= Net profits(after interest and taxes)/ Shareholder's funds

SIGNIFICANCE:
This ratio reveals how well the resources of a firm are being used, higher the ratio, better are the results. This ratio is calculated as a percentage by multiplying with 100.

RETURN ON SHAREHOLDER'S INVESTMENT OR NET WORTH (OF VERKA MILK PLANT FOR THE LAST TWO YEARS)

Particulars

2009-10 50918638.7 185944089 27.38

2010-11 56402944.73 207819892.36 27.14

Net Profit after Tax Shareholder's Funds

RETURN ON

SHAREHOLDER'S INVESTMENTS (in%):

RATIOS

2010-11

RATIOS

2009-10

27

27.05

27.1

27.15

27.2

27.25

27.3

27.35

27.4

ANALYSIS OR INTERPRETATION:
In 2009-10: The Company's ROI ratio is 27.38 %. In 2010-11: The Company's ROI ratio is 27.14%. This ratio reflects the over-all profitability of the business. It has been reduced from the previous year which shows that it has been reduced on total capital employed.

2. Capital Turnover Ratio:

This ratio establishes the relationship between cost of goods sold and the capital employed. This ratio is calculated to measure the efficiency of effectiveness with which a firm utilizes its resources or the capital employed. As capital is invested in a business to make sales and earn profits, this ratio is a good indicator of overall profitability of a concern. Capital Turnover Ratio= COGS/Capital Employed CAPITAL TURNOVER RATIO RATIO ANALYSIS OF VERKA PLANT FOR THE LAST TWO YEARS

(Amount in Rupees)

Particulars COGS

2009-10 2750292468

2010-11 3501358726.11 280525925.09 12.48

Net Capital Employed 257196969.71

CAPITAL TURNOVER 10.69 RATIO (in

RATIOS

2010-11

RATIOS

2009-10

9.5

10

10.5

11

11.5

12

12.5

13

ANALYSIS OR INTERPRETATION:
In 2007-08: The Company's- Capital Gearing Ratio has been increased with than last year. This shows that how much times the capital is turned over into sales.

FINDINGS AND SUGGESTIONS

FINDINGS:
1. The company's short term financial positions is sound and satisfactory because its current as well as quick ratio is double than its current liabilities of the company each year, which means company's creditors secured each year.

2.

From the point of view of long term financial position of the company Debt Equity ratio, debts are always less than equity in two years. It means company is less dependent on outside loans.

3.

Proprietory ratio is high, increased and decreased, higher ratio indicates better long term solvency position of the company.

4.

Gross profit ratio decreased in 2009-10 but again increased to 6%.Higher ratio shows the firms good profit earning capacity.

SUGGESTIONS:

1.

The company's capital turnover ratio has been decreasing each year. It must be improved. If the capital turnover ratio is low , it will indicate that capital is lying ideal. Now this time it is decreasing otherwise company will suffer.

2.

The company's gross profit ratio is decreased. But now the ratio is increased because of reduce in direct expenses. It must be reduced otherwise profits will not increased in future.

BIBLIOGRAPHY

BALANCE SHEET OF FIVE YEARS OF VERKA MILK PLANT, MOHALI. Balance sheet from 01-04-2006 to 31-03-2007, Balance sheet from 01-04-2007 to 31-03-2008, Balance sheet from 01-04-2008 to 31-03-2009, Balance sheet from 01-04-2009 to 31-03-2010, Balance sheet from 01-04-2010 to 31-03-2011

Kothari, C.R., Research Methodology: Method and Techniques, Wishwa Prakashan, 1990, New Delhi. I.M.Pandey, Financial management Vikas Publishing House, 2004. Khan and Jain, Financial management Himalaya Publishing House, 1999, Mumbai. MY Khan , P.K Jain Management accounting Tata Mc Graw Hills ,2001,Noida. I.M Pandey, Finance, a guide for managing company funds and profits, prentice hall of India, 2005. ShashiK.Gupta and R.K.Sharma,Financial management, Kalyani New Delhi. publishers, 2009,

PROJECT REPORT ON RATIO ANALYSIS OF VERKA MILK PLANT, MOHALI

Submitted by: Deepinder Kaur Univ. Roll No.1174391

In partial fulfillment of the Degree of Master of Business Administration IN FINANCE

SUBMITTED TO: LUDHIANA GROUP OF COLLEGES (Affiliated To Punjab Technical University)

2011-13

ACKNOWLEDGEMENT
Heartily thanks to all those who supported me Acknowledging any one in mere words is a very difficult job. I would like to pay my sincere thanks to all those people who helped me during this project work with their guidance and invaluable advice.

The process of preparing this report on RATIO ANALYSIS OF VERKA MILK PLANT, LUDHIANA was a learning experience for me. During the course of my preparation of this report I had to delve deeply into many details and thus was able to enlighten myself. Foremost of all, I express my sincere in debtness to the Almighty for bestowing me with favorable circumstances and keeping me in the high spirits. This project is the end product of valuable contribution of the many persons to whom, I remain indebted. I am Thankful to Dr. Leenu Narang (HOD) & Ms. Gauri Dhir (project guide), and for their support and encouragement throughout the completion of my project. I am thankful for their active co-operation and his keen involvement in my project. I am indebted to their for understanding and appreciating my problems, which emerged during the course of my project. I am highly privileged to all the people, related directly or indirectly and the respondents for being cooperative and sparing a few moments from their busy schedule; without their help this project wouldnt have proven meaningful.

Deepinder Kaur

PREFACE

This report is at Verka Milk Plant, Mohali. Final project is an integral part of MBA course and efficient utilization of material, time and resources are very much important for successful completion of any task. Above to this, coordination is must, which determines the degree of success. In order to competent, the entire student is required to take a real time project work. This exposure to project work will help them to know that how academic knowledge is applied in actual business situation. Keeping all this in view, the project given to me was to "Evaluate the Financial position of verka milk plant and to find out various ratios." The all rounded encouraging support by many persons towards this report has created confidence in me regarding the approval for the subject matter. Actually this report is a result of an assignment, to improve myself and gain confidence. In this, I have done my best to make it genuine study. But as well all know a maxim" TO ERR IS HUMAN." Therefore there is a chance for few mistakes. Also a critical appraisal by anyone will be heartily welcomed.

DECLARATION

I, hereby declare that the project entitled to me RATIO ANALYSIS OF VERKA MILK PLANT, LUDHIANA has been carried out submitted to Punjab technical university impartial fulfillment of the requirement for the award of the degree Master of Business Administration under the guidance of honorable Dr. Leenu Narang (HOD) & Ms. Gauri Dhir.

This report is original & based on data collected through Annual Reports of the company.

Dated

Deepinder Kaur

CERTIFICATE
This is to certify that Project report on RATIO ANALYSIS OF VERKA MILK PLANT, MOHALI has been submitted for the partial fulfillment of the degree of Masters of Business Administration of Punjab Technical University. This research is a bonafied work carried out by Deepinder Kaur under my supervision. She has shown keen interest and put her best efforts to make this project a success.

Date

Major Advisor Asst Prof. Gauri (Management Dept.) LGC LUDHIANA

CONTENTS
Chapter No. 1. 2. 3. 4. 5. 6. 7. INTRODUCTION REVIEW OF LITERATURE OBJECTIVES RESEARCH METHODOLOGY ANALYSIS AND INTERPRETATION FINDINGS AND SUGGESTIONS BIBLIOGRAPHY ANNEXURE Topics Page No. 1-21 22 23-25 26-28 29-66 67-69 70-71