A Study on

FINANCIAL STATEMENT ANALYSIS

At
KESORAM CEMENT INDUSTRIES LIMITED
Project submitted in partia !u"ment !or t#e
a$ard o! t#e De%ree o!
MASTER OF BUSINESS ADMINISTRATION
By
K.ANUSHA
Reg.No. 11EH1E0019
Under the esteemed guidance of
Mr. M. Dowlath Ahammad MBA, M.Phil, Ph.!"
Department of Business Management
KOTTAM CO!"! O#
!N"$N!!%$N"
&Appro'ed () A$CT! and Affiliated to *NTU Anantapur+
Chinnate,uru &-+. Kallur &M+. Kurnool Dist
/011 2 /013
1
KOTTAM COLLEGE OF ENGINEERING
A##ro$ed %& A'()E and Affiliated to *N)UA, Ananta#ur"
(hinnate+uru,", -allurM", -urnool!ist" . /10110
Dept. of Business Management
CERTI&ICATE
This is to certify that the Project Report titled A STUDY ON
FINANCIAL STATEMENT ANALYSIS was carried out by K.ANUSHA of
Regd.No11EH1E0019 This is submitted in partial fulfillment for the award
of the Degree of Master of Busiess A!"iistratio #MBA$ of Jawaharlal
Nehru Technological Uniersity! "nantapur during the academic year #$%% &
#$%'.
(ignature of the (uperisor (ignature of the )*D
Head of the Department
Dept. of Business anagement
Kottam College Of !ngineering
Chinnate,uru.
2ignature of E3ternal E3aminer
Date:
Pa!e:C"innate#u$u
1
DECLARATION
I hereby declare that this Project Report titled A
STUDY ON FINANCIAL STATEMENT ANALYSIS
submitted by me to the Department of Business
Management, Kottam College of Engineering, is a
bonade !or" underta"en by me and it is not submitted
to any other #ni$ersity or Institution for the a!ard of any
degree%diploma%certicate or published any time before&
Name and Address of the Student
Signature of the Student
K.ANUSHA
D4O K.%AM!S5A %A %!DD6
H.NO7/710/
BAA8ANU%
KU%NOO
Date:
4
CERTI&ICATE
This is to certify that the Project Report titled A STUDY ON
FINANCIAL STATEMENT ANALYSIS submitted in partial fulfillment for
the award of the Degree of Master of Busiess A!"iistratio #MBA$ was
carried out by K.ANUSHA under my guidance. This has not been submitted to
any other Uniersity or +nstitution for the award of any
degree,diploma,certificate.
(ignature of the (uperisor
Mr.M. DO5ATH AHAMMAD

ASSOC$AT!8%O#!SSO%9H!AD
Department of MBA
Kottam College Of ngineering
Chinnate,uru.
Date:
Pa!e:C"innate#u$u.

5
ABST%ACT
)he stud& a%out the #$NANC$A STAT!M!NT ANA6S$S of
K!SO%AM C!M!NT $NDUST%6 TD, made to understand the financial
#erformance of the com#an&. )he com#arati$e anal&sis has done 6hile com#aring the
financial statement li+e Profit and 7oss Account and Balance 2heet.
8inancial management is Planning, 9rgani:ing, !irecting, and controlling
$arious financial acti$ities of the organi:ation. 'n order to #erform all the managerial
functions effecti$e and efficienc&, sufficient #ast and #resent information a%out the
firm and its o#erations should %e e;ui##ed along 6ith this changes o$ertime and this
financial information can %e deri$ed from the %asic financial statement.
8inall& to conclude ' made measurements for inter#retations and %etter
solutions, 6hich ma& hel#s the com#an& for im#ro$ing the #erformance. )his ma&
also hel#s to financial e3#erts outsiders of the com#anies li+e stoc+ holders, 'n$estors
and other researchers.
/
ACKNO5!D!M!NT
', the researcher 6ould li+e to e3#ress m& than+s to all those 6ho hel#ed
me directl& or indirectl& to com#lete this #ro<ect.
8irst, ' ta+e o##ortunit& to e3#ress m& sincere than+s to our 8%$NC$8A
S%$ T.-.S.A%UN MU%TH6 and the college management for #ro$iding
an o##ortunit& and facilit& in successful com#letion of m& #ro<ect.
' also than+ Mr. M. DO5ATH AHAMMAD , #ro<ect =uide,
KOTTAM CO!"! O# !N"$N!!%$N", -urnool for his constant
guidance and $alua%le ad$ice
' am e3tremel& than+ful to K!SO%AM C!M!NT $NDUST%$!S
$M$T!D for gi$ing me an o##ortunit& to do #ro<ect in this
organi:ation.
M& heart full than+s to the Dr. B."U%U BH!!MA CHA%$ 6ho
sho6ed infinite interest and hel#ed me at all times 6ith $alua%le
suggestion and +ind co>o#eration 6ithout ' could not dra6 multifarious
s+etch for m& Pro<ect ?or+.
8inall&, ' am than+ful to m& #arents @%rothers 6ho hel#ed me directl& in
m& #hase of com#letion of this #ro<ect 6or+.
.

K.ANUSHA

A
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#$NANC$A STAT!M!NT ANA6S$S
$NT%ODUCT$ON
8inancial statements are #rimaril& #re#ared for decision>ma+ing. 8inancial
anal&sis is a #rocess of identif&ing the financial strength and 6ea+nesses of the firm
%& #ro#erl& esta%lishing relationshi# %et6een the items of %alance sheet and #rofit
and loss account.
)he term financial anal&sis includes %oth anal&sis and inter#retation of financial
statements. )he term anal&sis is used t mean the sim#lification of financial data %&
methodical classification of data gi$en in financial statements. )he term inter#retation
means e3#laining the meaning and significance of the data so sim#lified. Both terms
are interrelated and com#lementar&.
Accounting is the #rocess of identif&ing, measuring and communicating
economic information to #ermit informed <udgments and decisions %& users of the
information. 't in$ol$es recording, classif&ing and summari:ing $arious %usiness
transactions. )he end #roducts of %usiness transactions are the financial statements
com#rising #rimaril& the #osition statement or the %alance sheet and income
statement or the #rofit and loss account. )hese statements are the out come of
summari:ing #rocess of accounting and are there fore the source of information on the
%asis of 6hich conclusions are dra6n a%out the #rofita%ilit& and the financial #osition
of a concern. 8inancial statements are the %asis for decision ma+ing %& the
management as 6ell as all otter outsiders 6ho are interested in the affairs of the firm
such as in$estors, creditors, customers, su##liers, financial institutions, em#lo&ees,
#otential in$estors, go$ernment and the general #u%lic. )he anal&sis and inter#retation
of financial statements de#end u# on the nature and t&#e of information a$aila%le in
these statements.
8inancial statements are also called financial re#orts, are account %alance arra&ed
in effecti$e and mining full order so that the facts and conce#ts the& #ortra& ma& %e
readil& inter#reted and used as %asis for decisions %& all #eo#le 6ho are interested in
the affairs of %usiness.

9
M!AN$N" O# #$NANC$A STAT!M!NTS?
A 8inancial 2tatement is a collection of data organi:ed according to logical
and consistent accounting #rocedures. 'ts #ur#ose is to con$e& an understanding of
some financial as#ects of a %usiness firm. 't ma& sho6 a #osition at moment in time,
as in the case of %alance sheet, or ma& re$eal a series of acti$ities o$er a gi$en #eriod
of time, as in the case of an income statement. )hus the term C8inancial 2tatementsD
generall& refers to the t6o statements
i" )he #osition statement or the Balance 2heetE and
ii" )he 'ncome 2tatement or the Profit and 7oss account. )hese statements
are used to con$e& to management and other interested outsiders the #rofita%ilit& and
financial #osition of a firm.
8inancial statements are the outcome of summari:ing #rocess of accounting.
'n the 6ords of *ohn N.M&er, F)he 8inancial 2tatements #ro$ide a summar& of the
accounts of a %usiness enter#rise, the %alance sheet reflecting the assets, lia%ilities and
ca#ital as on a certain date and the income statement sho6ing the results of o#erations
during a certain #eriodG. 8inancial 2tatements are #re#ared as an end result of
financial accounting and are the ma<or sources of financial information of an
enter#rise.
2mith and As%urne define financial statements as, Fthe end #roduct of
financial accounting in a set of financial statements #re#ared %& the accountant of a
%usiness enter#rise>that #ur#ort to re$eal the financial #osition of the enter#rise, the
result of its resent acti$ities, and an anal&sis of 6hat as %een don 6ith earnings.G
8inancial statements are also called financial re#orts, are account %alance
arra&ed in effecti$e and mining full order so that the facts and conce#ts the& #ortra&
ma& %e readil& inter#reted and used as %asis for decisions %& all #eo#le 6ho are
interested in the affairs of %usiness.
Management accounting collects and #ro$ides accounting cost accounting,
economic and statistical information to the men at $arious managerial le$els to assist
them in the #erformance of managerial functions and their e$aluations. 't is the
de$elo#ment and a##lication of $arious techni;ues of recording, anal&sis,
inter#retation and #resentation, ma+ing the financial, costing and other data acti$e and
effecti$e in the #erformance of managerial functions, $i:, #lanning, decision>ma+ing
and control.
10
Management accounting ma+es use of not onl& accounting techni;ues %ut also
of statistical and mathematical techni;ues. Management accounting is for6ard
loo+ing and should, there fore %e also a%le to treat economic information and dated to
ma+e it suita%le for use %& the management.
$NT!%8%!TAT$ON O# #$NANC$A STAT!M!NTS
)he term financial statementE as used in modern %usiness refers t6o statement
the %alance sheet or statement of financial #osition reflecting the assets, lia%ilities and
ca#ital as on a #articular date and income statement or #rofit and loss statement. More
o$er, the #ac+age of financial statement as it is some times referred to, also includes
such schedules, as those relating to land, %uildings, e;ui#ment, in$entories, long term
in$estments, accrued lia%ilities long>term de%t, cost of goods manufacture, selling and
administrati$e and general e3#enses. 9$er and a%o$e these the statement of changes
in net 6or+ing ca#ital, 6hich is an im#ortant statement from the #oint of $ie6 of
anal&sis, is %eing included in the C#ac+ageD %& some cor#orate enter#rises through it is
not currentl& in general use.
OB*!CT$-!S O# #$NANC$A STAT!M!NTS
8inancial statements are the sources of 'nformation on the %asis of 6hich
conclusions are dra6n a%out the #rofita%ilit& and financial #osition of a concern. )he&
are the ma<or means em#lo&ed %& firms to #resent their financial situation of o6ners,
creditors and the general #u%lic. )he #rimar& o%<ecti$e of financial statements is to
assist in decisions ma+ing. )he accounting #rinci#les Board of America APB" state
the follo6ing o%<ecti$es of financial statements.
1. )o #ro$ide relia%le financial information a%out economic resources and
o%ligations of a %usiness firm.
1. )o #ro$ide other needed information a%out changes in such economic
resources and o%ligations.
4. )o #ro$ide relia%le information a%out changes in net resources arising out
of %usiness acti$ities.
5. )o #ro$ide financial information that assists in estimating the earning
#otentials of %usiness.
/. )o disclose, to the e3tent #ossi%le, other information related to the
financial statements that is rele$ant to the needs of the users of these
2tatements.
11
US!S AND $M8O%TANC! O# #$NANC$A STAT!M!NTS
)he 8inancial 2tatements are mirror, 6hich reflects the financial
#osition and o#erating strength or 6ea+ness of the concern. )hese statements are
useful to the management, in$estors, creditors, %an+ers, 6or+ers, =o$ernment and
#u%lic at large.
1. As a %asis for the granting of credit.
1. As information for #ros#ecti$e in$estors in an enter#rise.
4. As an aid to =o$ernment su#er$ision.
5. As a %asis for #rice or" rate regulation.
/. As a %asis for ta3ation
)he utilit& of financial statements to different #arties is discussed in detail as
follo6sH
Management?
)he 8inancial 2tatements are useful for assessing the efficienc& for
different cost centers. )he efficient and inefficient s#ots are %rought to the notice to
the management. Management is a%le to decide the course of action to %e ado#ted in
future.
Creditors?
)he creditors are to %e #aid in a short #eriod. )his a%ilit& is met out of
current assets. )he creditors 6ill %e interested in current sol$enc& of the concern, %&
using the current ratio li;uid ratio.
Ban,ers?
)he %an+ers is interested to see that the loan amount is secure and the
customer is a%le concern and #rofit@ loss account 6ill also %e studied to find out the
earning #osition.
$n'estors?
)he in$estors include %oth short>term and long>term in$estorsE the& are
interested in the securit& of the #rinci#al amount of lone and regular interest #a&ments
%& the concern. )he in$estors 6ill stud& the long>term sol$enc& of the concern 6ith
the hel# of financial statements.
11
"o'ernment?
)he financial statements are used to assess ta3 lia%ilit& of %usiness
enter#rises. )he =o$ernment studies economic situations of the countr& from these
statements. )hese statements ena%le the go$ernment to find out 6hether %usiness is
follo6ing $arious rules and regulations or not. )hese statements also %ecome a %ase
for framing and amending $arious la6s for the regulation of %usiness.
Trade Asso@iations H
)hese associations #ro$ide ser$ices and #rotection to the mem%ers. )he& ma&
anal&ses the financial statements for the #ur#ose of #ro$iding facilities to these
mem%ers. )he& ma& de$elo# standard ratios and design uniform s&stem of accounts.
Sto@, !A@hange H
)he stoc+ e3change deals in #urchase and sale of securities of different
com#anies. )he financial statements ena%le the %ro+ers to <udge the financial #osition
of different concerns. )he fi3ation of #rices for securities. EtcE is also %ased on these
statements.
)he fallo6ing is the list of $arious techni;ues that are a$aila%le to the #resent
da& management accountH
1. (ash flo6 anal&sis
1. 8unds flo6 anal&sis
4. Ratio anal&sis
5. Anal&sis of financial statement
/. (a#ital %udgeting and in$estment a##raisal
1. Cash #low Anal)sis
't is a $er& useful tool for li;uidit& #lanning. 't ena%les the
management to #lan the ac;uisition and utili:ation of cash so that a sound financial
#osition consistent 6ith ma3imum #rofita%ilit& can %e maintained.
/. #unds #low Anal)sis
8unds flo6 anal&sis hel#s in <udging the financial strateg& of a
%usiness %& #ro$iding a summar& to 6hich such funds ha$e %een #ut. 't is useful in
long term #lanning 6here #ro<ections of a$aila%le li;uid resources are to %e made.
14
3.%atio Anal)sis
Ratios are relationshi#, e3#ressed in arithmeticall& terms, %et6een
figures, 6hich ha$e a cause and effect relationshi# or 6hich or connected 6ith each
other in some other manner. 't re$eals the #rofita%ilit&, sol$enc& as 6ell as the o$erall
financial #osition of the enter#rises.
:. Capital Budgeting And $n'estment De@isions
)he term ca#ital %udgeting refers to long term #lanning for #ro#osed ca#ital
outla&s and their financing. 't includes %oth rising of long term funds as 6ell as there
utili:ation current funds are e3changed for future %enefits. )he father de$elo#ment of
a firm hinges on the ca#ital e3#enditure decisions. (a#ital %udgeting decisions are
$er& im#ortant in financial decisions as the& long term im#lications.
;. Anal)sis Of #inan@ial Statements
Pu%lished financial statements %& themsel$es donDt re$eal the
significance meaning and relationshi# of the information contained therein financial
statements anal&sis is largel& a stud& of relationshi# among the $arious financial
factors in %usiness as disclosed %& a single set of statements and a stud& of the trend
as sho6n in a series of statements.
NATURE OF FINANCIAL STATEMENTS
)he financial statements are #re#ared on the %asis of record facts concerning
the %usiness transactions, con$entions ado#ted to facilitate the accounting techni;ues,
#ostulates or assum#tions and #ersonal <udgment in the a##lication con$entions and
#ostulate.
According to the American 'nstitute of Accountants, 8inancial 2tatements
reflects a com%ination of
1. Recorded facts
1. Accounting con$entions
4. Postulates or assum#tions made to im#lement congenital
Procedures
5. Personal <udgments used in the a##lication of con$entions and
#ostulates.
15
1. %!CO%D!D #ACTS
Recorded facts are included all the transactions recorded or maintained on the
%asis of actual cost data. )he items a##earing $arious accounts in the ledger such as
cash in hand, cash at %an+, %ills recei$a%le, and #a&a%le, de%tors and creditors, cost of
su##lies and fi3ed assets. 2ales during the #eriod ca#ital stoc+ and so forth. Are ta+en
as #er the figures entered in the accounting %oo+s.
/. ACCOUNT$N" CON-!NT$ON
Accounting con$entions ha$e reference to certain fundamental
accounting #rinci#les, the a##lication of 6hich has %een sanctified %& long usage.
)hese #rinci#les are matching of costs and re$enuesE the in$entor& $aluations and the
allocation of e3#enditure %et6een ca#ital and re$enue for the #ur#ose of assets
$aluation.
3. 8OSTUAT!S
An accountant ma+e $arious assum#tions for the con$entions of ado#ted one
of these assum#tions or #ostulates is to the effect that the enter#rise 6ill continue in
%usiness %e&ond the #eriod 6hich is cornered %& the financial statements i.e. %usiness
is A gro6ing concern. and the $alue of mone& 6ill remain the same in different
#eriods. )hough there is a drastic change in #urchasing #o6er of mone&. )he re$enue
is treated as
M!THODS O# #$NANC$A ANA6S$S
)he 8ollo6ing Methods 8inancial Anal&sis are generall& used
1.Comparati'e Statements
)he& refer to com#arison of financial statements #ertaining to t6o
different #eriods #utting them side %& side and finding out the changes 6ith res#ect to
each item of the statements o$erall changes in a%solute and relati$e terms. )he
elements of financial #osition are sho6n in a com#arati$e from to gi$e an idea of
financial #osition at t6o or more #eriods. A statement #re#ared in a com#arati$e form
com#ares the figures of the t6o #eriods and also esta%lishers a relationshi# %et6een
%alance sheet and income statement ena%ling an in de#th stud& on financial #osition.
)his 6ill indicate trend and direction of financial #osition and o#erating results.
1/
)he financial statements data 6ill %e com#arati$e onl& 6hen same accounting
#rinci#les are used in the #re#aring these statements. 'n case of an& de$iations in the
use of accounting #rinci#les, it is to %e mentioned at the foot of financial statement
and the anal&st should %e careful in using the statements.
/.Trend Anal)sis
'n 8inancial anal&sis in the direction of changes o$er a #eriod of &ears is
of crucial im#ortance. )ime>series or trend anal&sis of ratios indicates the direction of
change. )his +ind of anal&sis is #articular a##lica%le to the items of #rofit and loss
account. )he trends of sales and net income ma& %e studied in the light of t6o factors.
)he rate of fi3ed e3#ansion are secular trend in the gro6th of %usiness and general
#rice le$el.
't 6as found that a num%er of firms sho6 a #ersistent gro6th o$er a #eriod
of &ears. But a true trend of gro6th the sales figures should %e ad<usted %& suita%le
inde3 of general #rices. 'n other 6ords sales figure can %e deflated for raising #rice
le$el. ?hen the resulting figures are sho6n on a gra#h, 6e 6ill get trend of gro6th
de$oid of #rice changes.
3. Common SiBe Statement
)he common si:e statements are common si:e %alance sheet and common
si:e income statement, 6hich are sho6n in anal&tical #ercentages the figures are
sho6n as #ercentages of total assets, total lia%ilities and total sales. )he total assets
are ta+en as 100 and different assets are e3#ressed as a #ercentage of the total.
2imilarl& $arious lia%ilities are ta+en as #art of total lia%ilities. )hese statements are
also +no6n as com#onent #ercentages. )hese statements co$er the short comings the
com#arati$e statements and trend #ercentages. )hese statements can %e #re#ared in
the follo6ing 6a&H
)he )otal assets or lia%ilities are ta+en as 100.
)he 'ndi$idual assets are e3#ressed as a #ercentage of total assets i.e., 100 and
different lia%ilities are calculated in relation to total lia%ilities.
1A
:. #unds #low Statements
't is a statement, 6hich sho6s the mo$ement of funds and is a re#ort of
the financial o#erations of the %usiness. 't is a statement of sources and a##lications of
funds .)he term F879?G means mo$ement and includes %oth inflo6 and outflo6.
)he term flo6 of funds means transfer of economic $alues from one asset of e;uit& to
another. )he flo6 of funds occurs 6hen a transactions changes from a non current
account to a current account and $ice>$ersa.
'n sim#le, funds mo$e 6hen a transactions affects
1. A (urrent asset and a fi3ed asset
1. A 8i3ed asset and a current lia%ilit&
4. A (urrent asset and a fi3ed lia%ilit&
5. A fi3ed asset and a current lia%ilit&
8unds do not mo$e 6hen the transaction affects fi3ed asset and fi3ed
lia%ilit& or current asset and current lia%ilit&.
US!S
't hel#s in anal&sis of financial o#erations
't hel#s in formation of realistic di$idend #olic&
't hel#s in #ro#er allocation of resources
't hel#s in a##raising the use of 6or+ing ca#ital
;. Cash #low Statements
(ash #la&s a $er& im#ortant role in the entire economic life of a %usiness.
't is $er& essential for a %usiness to maintain an ade;uate %alance of cash. )his is
%ecause
'. Although huge #rofits ha$e %een earned, cash ma& not ha$e %een recei$ed.
''. E$en if cash has %een recei$ed it ma& ha$e drained out for some other
#ur#oses.
A 2tatement of changes in the financial #osition of a firm on cash
%asis called cash flo6 statement. 2uch a statement enumerates net effects of the
$arious %usiness transactions on cash and ta+es into account recei#ts and
dis%ursement of cash.
1B
>. %atio Anal)sis
't is one of the most #o6erful tools of financial anal&sis. 't is the #rocess
of esta%lishing and inter#reting $arious ratios, 6hich hel#s in effecti$e decision>
ma+ing. 'ts strengths and 6ea+ness of a firm as 6ell as its historical and current
#erformance can %e determined. A 8inancial ratio is the relationshi# %et6een t6o
accounting figures e3#ressed mathematicall&.
)he follo6ing four ste#s are in ratio anal&sis.
'. 2election of rele$ant data from the financial statements de#ending u#on
the o%<ecti$es of the %usiness.
''. (alculation of a##ro#riate ratios
'''. (om#arison of the calculated ratios 6ith the ratios of the same firm in the
#ast the ratios de$elo#ed from #ro<ected financial statements or the ratios
of the some other firms or the com#arison 6ith ratios of the industr& to
6hich the firms %elongs.
C.C-8 Anal)sis
)his is a techni;ue used for stud&ing the relationshi# %et6een cost,
$olume and #rofit. Profits de#end u#on man& im#ortant factors li+e manufacturing
cost, $olume of sales and selling #rice #roducts. 't is an im#ortant tool used for the
#rofit #lanning of a %usiness. )he three factors of (,P anal&sis i.e., cost,
$olume and #rofits are interconnected and de#endent on one another. 8or e.g. #rofit
de#ends on salesEsellinmg #rice is a large e3tent de#ends on the cost and cost
de#ends on $olume of #roduction as it is onl& the $aria%le cost that $aries directl&
6ith #roduction. (,P Anal&sis attem#ts to anal&:e the relationshi# %et6een
$ariations in cost 6ith in $ariations in $olume. )his assists management in #rofit
#lanning, cost control and decision>ma+ing.
(,P Anal&sis ans6ers the follo6ing ;uestionsH
o 2ales re;uired to earn a desired #rofitI
o ?hat 6ill %e the effect of changes in #rices, cost and $olumes on
#rofitsI
o ?hich #roduct or #roduct mi3 is most #rofita%le.
10
N!!D #O% TH! STUD6?
)o understand the e3isting #osition of the com#an& relating to its financial
#osition and to +no6 6hat are the factors that result an organi:ation &ield Profit
J7oss.
)he anal&sis of financial statements relating to -E29RAM (EMEN)
'N!U2)R'E2 7td, -urnool is carried out %& the common si:e anal&sis these
statements are $er& useful to inter#reting the data %& re#resenting each item in the
statements.
)he anal&sis of financial statements through common si:e anal&sis statements
gi$es a true #icture a%out the financial #osition of MJs -E29RAM (EMEN)
'N!U2)R'E2 7td,. 't is the techni;ue 6hich is commonl& used as a &ardstic+ to
e$aluate the financial condition and #erformance of a concern. Past data #ro$ide the
%ase for %udgeting. )he& are ad<usted in the light of future changes
19
OB*!CT$-!S O# TH! STUD6
Broadl& the o%<ecti$e of the Anal&sis of 8inancial statement is to
understand the information contained in the financial statement 6ith a
$ie6 to the 6ea+ness and strengths of the firm and to ma+e forecast
a%out the future #ros#ects of the firm and their %& ena%ling the
financial anal&st to ta+e different decision regarding the o#eration of the
firm. )he o%<ecti$es of the anal&sis can %e identified asH
a. )o assess the #resent #rofita%ilit& and o#erating efficienc& of the firm as a 6hole as
6ell as for its different de#artments
%. )o find out the relati$e im#ortance of different com#onents of the financial
#osition.
c. )o identif& the reasons for change in the #rofita%ilit&Kfinancial #osition of the firm.
d. )o assess the short>term as 6ell as the long>term li;uidit& #osition of the firm.
e. )o e3amine the sol$enc& of the firm.
f. )o find out the a%ilit& of the firm to meet its current o%ligations.
10
SCO8! O# TH! STUD6
Anal&sis of financial statement can %e underta+en %& different #ersons and for
different #ur#oses, therefore, the sco#e of the A82 ma& %e $ar&ing from one
situation to another.
Ho6e$er, the follo6ing are some the techni;ues of the A82H
(om#arati$e financial statements.
(ommon>si:e financial statements.
11
%!S!A%CH M!THODOO"6
)o anal&:e the financial anal&sis trends for the #ur#ose of ratio anal&sis has to
carried out financial anal&sis is the anal&sis and inter#retation of financial statements
and a #ro#er financial anal&sis can %e gi$e the user %etter insight a%out financial
strengths and 6ea+ness of the firm. 8inancial anal&sis is the starting #oint for ma+ing
#lans %efore using an& so#histicated forecasting and #lanning #rocedures.
8or the #ur#ose, first the re;uired information has to get collected li+e ratio
anal&sis, ?or+ing (a#ital and management anal&sis, income statement, trading and
#rofit and loss, etc. are to %e collected then, the data in statements is to #ro#erl&
organi:ed and arranged and then relationshi# is to %e esta%lished %et6een financial
statements and finall& conclusions are to %e dra6n from the inter#reted information
and #resented form of re#ort.
Research in$ol$es getting tools, ideas from te3ts, <ournals, %oo+s, records, and
6e%sites. )he collection of data is an im#ortant as#ect of Research. )he sources of
information fall under t6o categories.
11
Sour@es of Data
)he sources of information fall under t6o categories
$nternal Sour@es
E$er& com#an& +ee#s certain records such as accounts, records, re#orts, etcE
these records #ro$ide sim#le information for research.
!Aternal Sour@es
?hen internal records are insufficient and re;uired information is not a$aila%le,
then the organi:ation de#ends on e3ternal sources. )he e3ternal sources of data are
1.Primar& !ata
1.2econdar& !ata
8rimar) Data
)he data collected for the #ur#ose in original and for the first time is +no6n as
FPrimar& dataG. )he researcher he to stud& a #articular #ro%lem collects the data.
)he #rimar& of the stud& is collected through interaction and discussion 6ith the
officials and staff at -E29RAM 'N!U2)R'E2 7'M')E!, HL!.
Se@ondar) Data
)he data collected from the #u%lished sources i.e. not for the first time is called
F2econdar& !ataG. )he secondar& data for the stud& is collected from
Annual Re#orts of the com#an& from the &ear 1000>1011
Accounting <ournals and manuals.
Register of (om#anies R 9 (" ?e%sites.
$mportan@e of #inan@ial statements
14
)he financial statements are mirror 6hich reflects the financial #osition and o#erating
strength or 6ea+ness of the concern. )he utilit& of financial statements to different
#arties is discussed in detail as follo6sH
Management
Creditors
Ban,ers
$n'estors
"o'ernment
Trade Asso@iation
Sto@, !A@hange
8inancial anal&sis is a #o6erful mechanism of determining financial strengths and
6ea+ness of a firm. But the anal&sis is %ased on the information a$aila%le in the
financial statements. )hus the financial anal&sis suffers from serious inherent at
limitation of the financial statements.
15
imitations of #inan@ial Statements?
't is onl& a stud& of interim re#orts.
!ifferent #eo#le ma& inter#ret the same anal&sis in different 6a&s.
't does not consider the changes in #rices le$el.
(hanges in accounting #rocedure %& firm ma& often ma+e financial
anal&sis misleading.
1/
CHA8T!%7/
%!-$!5 O# $T!%ATU%!
1A
%!-$!5 O# $T!%ATU%!
CONC!8T O# #$NANC$A STAT!M!NT ANA6S$S
$. $NT%ODUCT$ON
8inancial 2tatements are #re#ared #rimaril& for decision>ma+ing. )he& #la& a
dominant role in the setting the frame6or+ of management decision. But the
information is #ro$ided in the financial statements is not an end in itself as no
meaningful conclusions can %e dra6n from these statements alone. 8inancial anal&sis
is the #rocess of identif&ing the financial strengths and 6ea+nesses of the firm %&
#ro#erl& esta%lishing relationshi#s %et6een the items of the %alance sheet and the
#rofit and loss account.
$$. M!AN$N" O# #$NANC$A ANA6S$S
't is also +no6n as anal&sis and inter#retation of financial statements. According to
Metcalf and )itard, F8inancial anal&sis is #rocess of e$aluating the relationshi#
%et6een com#onent #arts of financial statements to o%tain %etter understanding of
firms financial #osition and #erformance. 't hel#s in.
1.8orecasting the future earnings.
1.A%ilit& to #a& interest and de%t maturities
4.#rofita%ilit& of a sound di$idend #olic&.
)he term financial anal&sis includes %oth anal&sis and inter#retation. )he term
anal&sis is used to mean sim#lification financial data %& methodical classification of
data gi$en in financial statements. 'nter#retation means e3#laining the meaning and
significance of the sim#lified data.
1B
$$$. T68!S O# #$NANC$A ANA6S$S?
1.ON TH! BAS$S O# MAT!%$AS US!D? According to materials used,
financial anal&sis can %e of t6o t&#esH
A.!DT!%NA ANA6S$S? 't ser$es onl& a limited #ur#ose. 9utsiders 6ho
do not ha$e access to the detail internal accounting records of the %usiness do this
anal&sis. )hese outsiders include in$estors, creditors, go$t agencies, credit agencies
and the #u%lic. But the recent changes in go$t regulations com#elled %usiness firms to
disclose more detailed information to #u%lic through audited re#orts.
B. $NT!%NA ANA6S$S? Persons 6ho ha$e access to the internal
accounting records of %usiness firm conduct it. 2uch n anal&sis can %e #erformed %&
the em#lo&ees of the organi:ation an d go$t agencies, 6hich ha$e statutor& #o6ers to
do so.
/. ON TH! BAS$S O# MOD!S O8!%AT$ON?
According to the method of o#eration follo6ed in the anal&sis, financial
anal&sis can %e t6o t&#esH
A. HO%$EONTA ANA6S$S? 't refers to the com#arison of financial
statements of a com#an& for se$eral &ears. )his ma+es it #ossi%le to focus attention on
items that ha$e changed significantl& during the #eriod under re$ie6. (om#arati$e
statements and trend #ercentages are the tools em#lo&ed in hori:ontal anal&sis.
10
T)pes of #inan@ial Anal)sis
On The Basis Of
Material Used
On The Basis Of
Modes Oprations
E3ternal
Anal&sis
'nternal
Anal&sis
Hori:ontal
Anal&sis
,ertical
Anal&sis
B.-!%T$CA ANA6S$S? 't refers to the stud& relationshi# of the $arious
items in the financial statements of one accounting #eriod. 'n this t&#e of anal&sis, the
figures from financial statements are com#ared 6ith a %ase selected from the same
&ear statements. 't is also +no6n as static anal&sis. (ommon si:e financial statements
and financial ratios are the t6o tools em#lo&ed in $ertical anal&sis.
$-. 8%OC!DU%! #O% #$NANC$A ANA6S$S?
)he follo6ing #rocedure is ado#ted for anal&sis and inter#retation of
financial statements.
1. )he Anal&st should ac;uaint him self 6ith the #rinci#les and #ostulates of
accounting.
1. )he e3tent of anal&sis should %e determined so that %eli$e in s#here of
6or+ ma& %e decided. 'f the aim is to find earning, then income statement
is anal&:ed.
4. )he 8inancial data is re>arranged %& grou#ing of similar data under same
heads, %rea+ing do6n of indi$idual com#onents according to their nature.
5. A Relationshi#s esta%lished 6ith the hel# of tools and techni;ues of
anal&sis such as ratios, trends, common si:e, funds flo6 etc..
/. )he 'nformation is inter#reted in a sim#le and understanda%le 6a&, 6hich
hel#s in decision ma+ing.
A. )he conclusions are #resented as re#orts to the management.
19
CHA8T!%73
$NDUST%6 9 COM8AN6
8%O#$!
40
$NDUST%6 8%O#$!
K!SO%AM $NDUST%$!S $M$T!D
Cement is a %inder, a su%stance 6hich sets and hardens inde#endentl&, and
can %ind other materials together. )he 6ord McementM traces to the Romans, 6ho used
the term Mo#us caementiciumM to descri%e masonr& 6hich resem%led concrete and 6as
made from crushed roc+ 6ith %urnt lime as %inder. )he $olcanic ash and #ul$eri:ed
%ric+ additi$es 6hich 6ere added to the %urnt lime to o%tain a h&draulic %inder 6ere
later referred to as cement, c&matium, comment and cement. (ements used in
construction are characteri:ed as h)drauli@ or non7h)drauli@.
)he most im#ortant use of cement is the #roduction of mortar and concreteN
the %onding of natural or artificial aggregates to form a strong %uilding material 6hich
is dura%le in the face of normal en$ironmental effects.
(oncrete should not %e confused 6ith cement %ecause the term cement refers
onl& to the dr& #o6der su%stance used to %ind the aggregate materials of concrete.
U#on the addition of 6ater andJor additi$es the cement mi3ture is referred to as
concrete, es#eciall& if aggregates ha$e %een added.
Histor) of the origin of @ement
!arl) uses
't is uncertain 6here it 6as first disco$ered that a com%ination of h&drated
non>h&draulic lime and a #u::le #roduces a h&draulic mi3ture see alsoH Po::olanic
reaction", %ut concrete made from such mi3tures 6as first used on a large scale %&
Roman engineers. )he& used %oth natural #u::les tress or #umice" and artificial
#u::les ground %ric+ or #otter&" in these concretes. Man& e3cellent e3am#les of
structures made from these concretes are still standing, nota%l& the huge monolithic
dome of the Pantheon in Rome and the massi$e Baths of (aracalla. )he $ast s&stem
of Roman a;ueducts also made e3tensi$e use of h&draulic cement. )he use of
structural concrete disa##eared in medie$al Euro#e, although 6ea+ #o::olanic
concretes continued to %e used as a core fill in stone 6alls and columns.
41
Modern @ement
Modern h&draulic cements %egan to %e de$elo#ed from the start of the 'ndustrial
Re$olution around 1000", dri$en %& three main needsH
H&draulic renders for finishing %ric+ %uildings in 6et climates
H&draulic mortars for masonr& construction of har%or 6or+s etc, in contact
6ith sea 6ater.
!e$elo#ment of strong concretes.
'n Britain #articularl&, good ;ualit& %uilding stone %ecame e$er more e3#ensi$e
during a #eriod of ra#id gro6th, and it %ecame a common #ractice to construct
#restige %uildings from the ne6 industrial %ric+s, and to finish them 6ith a stucco to
imitate stone. H&draulic limes 6ere fa$ored for this, %ut the need for a fast set time
encouraged the de$elo#ment of ne6 cements. Most famous 6as Par+erOs MRoman
cement.M )his 6as de$elo#ed %& *ames Par+er in the 1B00s, and finall& #atented in
1B9A. 't 6as, in fact, nothing li+e an& material used %& the Romans, %ut 6as a
MNatural cementM made %& %urning sectarian > nodules that are found in certain cla&
de#osits, and that contain %oth cla& minerals and calcium car%onate. )he %urnt
nodules 6ere ground to a fine #o6der. )his #roduct, made into a mortar 6ith sand, set
in /.1/ minutes. )he success of MRoman (ementM led other manufacturers to de$elo#
ri$al #roducts %& %urning artificial mi3tures of cla& and chal+.
*ohn 2eaton made an im#ortant contri%ution to the de$elo#ment of cements 6hen
he 6as #lanning the construction of the third Edd& stone 7ighthouse 1B//>9" in the
English (hannel. He needed a h&draulic mortar that 6ould set and de$elo# some
strength in the t6el$e hour #eriod %et6een successi$e high tides. He #erformed an
e3hausti$e mar+et research on the a$aila%le h&draulic lines, $isiting their #roduction
sites, and noted that the Mh&draulicM of the lime 6as directl& related to the cla& content
of the limestone from 6hich it 6as made. 2eaton 6as a ci$il engineer %& #rofession,
and too+ the idea no further. A##arentl& una6are of 2eatonDs 6or+, the same #rinci#le
6as identified %& 7ouis ,acate in the first decade of the nineteenth centur&. ,acate
6ent on to de$ise a method of com%ining chal+ and cla& into an intimate mi3ture,
41
and, %urning this, #roduced an Martificial cementM in 101B. *ames 8rost, 6or+ing in
Britain, #roduced 6hat he called MBritish cementM in a similar manner around the
same time, %ut did not o%tain a #atent until 1011. 'n 1015, *ose#h A2P din #atented a
similar material, 6hich he called Portland cement, %ecause the render made from it
6as in color similar to the #restigious Portland stone
All the a%o$e #roducts could not com#ete 6ith limeJ#u::le concretes %ecause
of fast>setting gi$ing insufficient time for #lacement" and lo6 earl& strengths
re;uiring a dela& of man& 6ee+s %efore form6or+ could %e remo$ed". H&draulic
lines, MnaturalM cements and MartificialM cements all rel& u#on their %elated content for
strength de$elo#ment. Belated de$elo#s strength slo6l&. Because the& 6ere %urned at
tem#eratures %elo6 11/0 P(, the& contained no alight, 6hich is res#onsi%le for earl&
strength in modern cements. )he first cement to consistentl& contain alight 6as made
%& *ose#h A2P dinDs son ?illiam in the earl& 1050s. )his 6as 6hat 6e call toda&
MmodernM Portland cement. Because of the air of m&ster& 6ith 6hich ?illiam A2P din
surrounded his #roduct, others e.g. ,acate and ' ( *ohnson" ha$e claimed #recedence
in this in$ention, %ut recent anal&sis
Q
of %oth his concrete and ra6 cement ha$e sho6n
that ?illiam A2P dinDs #roduct made at North fleet, -ent 6as a true alight>%ased
cement. Ho6e$er, A2P dinDs methods 6ere Mrule>of>thum%MH ,acate is res#onsi%le for
esta%lishing the chemical %asis of these cements, and *ohnson esta%lished the
im#ortance of sintering the mi3 in the +iln. ?illiam A2P dinDs inno$ation 6as
counter>intuiti$e for manufacturers of Martificial cementsM, %ecause the& re;uired
more lime in the mi3 a #ro%lem for his father", %ecause the& re;uired a much higher
+iln tem#erature and therefore more fuel" and %ecause the resulting clin+er 6as $er&
hard and ra#idl& 6ore do6n the millstones 6hich 6ere the onl& a$aila%le grinding
technolog& of the time. Manufacturing costs 6ere therefore considera%l& higher, %ut
the #roduct set reasona%l& slo6l& and de$elo#ed strength ;uic+l&, thus o#ening u# a
mar+et for use in concrete. )he use of concrete in construction gre6 ra#idl& from
10/0 on6ards, and 6as soon the dominant use for cements. )hus Portland cement
%egan its #redominant role. it is made from 6ater and sand .

COM8AN6 8%O#$!
44
ABOUT TH! K!SO%AM
K!SO%AM $NDUST%$!S $M$T!D is one of the leading manufacturers cement
in 'ndia, incor#orated %& the #romoters of Birla "roup Compan). 't is a dr& #rocess
cement #lant. )he plant @apa@it) is <./> la,h tones per annumE it is located at
Basanthnagar in Karimnagar Dist. Of Andhra 8radesh whi@h is < ,m awa) from
the %amagundam %ailwa) Station. lin,ing Chennai to New Delhi.
)he com#an&Ds first unit Basanthnagar 6ith a ca#acit& of 1.1la+h tones #er annum.
Hum%les sus#ension #reheated s&stem 6as commissioned during the &ear 19A9. )he
second unit 6as set u# in the &ear 19B1 6ith a ca#acit& 1.1la+h tones #er annum and
the third unit 6ith a ca#acit& of 1./la+h tones #er annum 6ent on stream in the &ear
19B0. )he coal for this com#an& is %eing su##lied %& 2#ingarn (ollieries and the
#o6er is o%tained forms AP2EB. )he #o6er demand for the factor& is a%out installed
in the &ear 190B.
-esoram (ement has set u# a 1/ M? ca#acit& #o6er #lant to facilitate for
uninterru#ted #o6er su##l& for manufacturing of cement, 6hich starts on 15
th
August,
199B.
-esoram 'ndustr& distinguished itself all the cement factories in 'ndia %& %agging the
National Producti$it& A6ard (onsecuti$el& for t6o &ears i.e., for the &ear 190/>0A
and 190A>0B.
)he 8ederation of Andhra Pradesh (ham%er of (ommerce and 'ndustries 8AP(('"
also conferred on -esoram (ement, an A6ard for Best 'ndustrial #romotion J
e3#ansion efforts in the state for the &ear 1905. -esoram also %agged 8AP((' a6ard
for FBest #amil) 8lanning !ffort in the StateG for the &ear 190B>00
9ne among the industrial giants in the countr& toda&, ser$ing the nation on industrial
front, -esoram 'ndustries 7td., has a che;uered and e$entful histor& dating %ac+ to
the t6enties 6hen the 'ndustrial House of Birla ac;uired it. ?ith onl& a )e3tile Mill
under is %anner in 1915, it gre6 form strength and s#read its acti$ities to ne6er fields
Ra&on, 2#un Pi#es )rans#arent #a#er, Pul#, )ires, Refectories and other #roducts.
45
(ement, 6hich #la&s an im#ortant role in Nation Building acti$it&, the =o$ernment of
'ndia, had de>licensed the cement industr& in the &ear 19AA 6ith a $ie6 to attract
#ri$ate entre#reneurs to argument the cement #roduction. )hen -esoram decided to
set u# a fe6 (ement Plants in the (ountr&.
Birla su#reme is #o#ular %rand of -esoram (ement from its #restigious #lant of
Basanthnagar, in A.P., 6hich has outstanding trac+ record in #erformance and
#roducti$it&, ser$ing the nation for the last t6o and half decades. 't has #ro$ed its
distinction %& %agging se$eral national a6ards and state a6ards. 't also has the
distinction of achie$ing o#timum ca#acit& utili:ation.
-esoram offers a choice of to# ;ualit& Portland cement for light, hea$& constructions
and allied a##lications. Rualit& is %uilt to e$er& fact of the o#erations. As is the
#reference for ;ualit&, so is the demand for the #roduct.
)he limestone is rich in calcium car%onate, a +e& factor that influences the ;ualit& of
the final #roduct. )he dr& #rocess technolog& used in the late com#uteri:ed
monitoring o$erseas the manufacturing #rocess. 2am#les are sent regularl& to the
%ureau of 'ndian 2tandards, National (ouncil of (onstruction and Building Material
for certification of deri$ed ;ualit& norms.
)he com#an& has acti$el& underta+en #romotional measures for #romoting their
#roduct through different media, 6hich includes the use of hoardings, (om#liments,
Ne6s#a#ers etc.,
-esoram (ement is underta+ing the mar+eting acti$ities e3tensi$el& in the states of
Andhra Pradesh, -arnata+a, and )amilnadu, -erala, Maharashtra and =u<arat. 'n
Andhra Pradesh sales de#ots are located in different areas li+e -arimnagar, ?arangal,
Na:ia%ad, ,i<a&a6ada and Nellore. 'n other estates it has o#ened around 10 de#ots.
)he mar+et share of -esoram (ement in the all 'ndia (ement mar+et is 1.19S in A.P.,
it is a B.0/S.
A5A%DS?
4/
-esoram (ement ca#tured $arious a6ards including national a6ards for #roducti$it&
technolog& conser$ation and se$eral state a6ards.
8or the &ear 1909, -esoram %agged FBest 8amil& Planning Effort in the 2tateG %& the
8ederation of A.P., (ham%ers of (ommerce @ 'ndustr& and National A6ards for
FMines 2afet&G for t6o successi$e &ears 190/>0A @ 190A>0B. 't also %agged the
FNational A6ard for Energ& Efficienc&G for the &ear 1909>90 for the %est #erformance
among all cement #lants in 'ndia. )his a6ard installed %& National (ouncil for
(ement and Building and Material N(BM" in association 6ith the de#artment of
#o6er, ministr& of energ&, =o$ernment of 'ndia.
-esoram %agged the #restigious FA.P. 2ate Producti$it& A6ardG in 190B>09, also
announced the state a6ard for industrial Management in the state and F,a:aman&
Rattan and Best Efforts on an 'ndustrial UnitG in the state to de$elo#ed FRural
Econom&G 6as %agged for its contri%ution to6ards the social res#onsi%ilit& and rural
and communit& de$elo#ment #rogrammers for the &ear 1991. 't %agged FMa& !a&
A6ardG of the go$ernment of A.P. FBest ManagementG and the Pundit *a6aharlal
Nehru F2il$er Rolling )ro#h& for the 'ndustrial Producti$it& effort in the 2tate of A.P.,
%& 8AP(('G. )he 'ndira =andhi Memorial National A6ard for e3cellence in industr&.
FBest Management A6ardG of the go$ernment of A.P., for the &ear 1994, and it got the
#restigious a6ard F'29>9001G a6ard for its ;ualit&.
4A
T)pes of modern @ement
8ortland @ement
(ement is made %& heating limestone calcium car%onate", 6ith small ;uantities of
other materials such as cla&" to 15/0P( in a +iln, in a #rocess +no6n as calcinations,
6here%& a molecule of car%on dio3ide is li%erated from the calcium car%onate to form
calcium o3ide, or lime, 6hich is then %lended 6ith the other materials that ha$e %een
included in the mi3 . )he resulting hard su%stance, called Oclin+erO, is then ground 6ith
a small amount of g&#sum into a #o6der to ma+e O9rdinar& Portland (ementO, the
most commonl& used t&#e of cement often referred to as 9P(".
Portland cement is a %asic ingredient of concrete, mortar and most non>s#ecialt&
grout. )he most common use for Portland cement is in the #roduction of concrete.
(oncrete is a com#osite material consisting of aggregate gra$el and sand", cement,
and 6ater. As a construction material, concrete can %e cast in almost an& sha#e
desired, and once hardened, can %ecome a structural load %earing" element. Portland
cement ma& %e gra& or 6hite.
8ortland @ement (lends
)hese are often a$aila%le as inter>ground mi3tures from cement manufacturers, %ut
similar formulations are often also mi3ed from the ground com#onents at the concrete
mi3ing #lant.
8ortland (last furna@e @ement contains u# to B0S ground granulated %last furnace
slag, 6ith the rest Portland clin+er and a little g&#sum. All com#ositions #roduce high
ultimate strength, %ut as slag content is increased, earl& strength is reduced, 6hile
sulfate resistance increases and heat e$olution diminishes. Used as an economic
alternati$e to Portland sulfate>resisting and lo6>heat cements.
8ortland flash @ement contains u# to 40S fl& ash. )he fl& ash is #o::olanic, so that
ultimate strength is maintained. Because fl& ash addition allo6s lo6er concrete 6ater
content, earl& strength can also %e maintained. ?here good ;ualit& chea# fl& ash is
a$aila%le, this can %e an economic alternati$e to ordinar& Portland cement
4B
8ortland puBBle @ement includes fl& ash cement, since fl& ash is a #u::le, %ut also
includes cements made from other natural or artificial #u::les. 'n countries 6here
$olcanic ashes are a$aila%le e.g. 'tal&, (hile, Me3ico, and the Phili##ines" these
cements are often the most common form in use.
8ortland sili@a fumes @ement. Addition of silica fume can &ield e3ce#tionall& high
strengths, and cements containing />10S silica fume are occasionall& #roduced.
Ho6e$er, silica fume is more usuall& added to Portland cement at the concrete mi3er.
Masonr) @ements are used for #re#aring %ric+la&ing mortars and stuccos, and must
not %e used in concrete. )he& are usuall& com#le3 #ro#rietar& formulations containing
Portland clin+er and a num%er of other ingredients that ma& include limestone,
h&drated lime, air entertainers, retarders, 6ater roofers and coloring agents. )he& are
formulated to &ield 6or+a%le mortars that allo6 ra#id and consistent masonr& 6or+.
2u%tle $ariations of Masonr& cement in the U2 are Plastic (ements and 2tucco
(ements. )hese are designed to #roduce controlled %ond 6ith masonr& %loc+s.
!Apansi'e @ements contain, in addition to Portland clin+er, e3#ansi$e clin+ers
usuall& sulfoaluminate clin+ers", and are designed to offset the effects of dr&ing
shrin+age that is normall& encountered 6ith h&draulic cements. )his allo6s large
floor sla%s u# to A0 m s;uare" to %e #re#ared 6ithout contraction <oints.
5hite (lended @ements ma& %e made using 6hite clin+er and 6hite su##lementar&
materials such as high>#urit& met +aolin.
Colored @ements are used for decorati$e #ur#oses. 'n some standards, the addition of
#igments to #roduce Mcolored Portland cementM is allo6ed. 'n other standards e.g.
A2)M", #igments are not allo6ed constituents of Portland cement, and colored
cements are sold as M%lended h&draulic cementsM.
40
-er) finel) ground @ements are made from mi3tures of cement 6ith sand or 6ith
slag or other #u::le t&#e minerals 6hich are e3tremel& finel& ground together. 2uch
cements can ha$e the same #h&sical characteristics as normal cement %ut 6ith /0S
less cement #articularl& due to their increased surface area for the chemical reaction.
E$en 6ith intensi$e grinding the& can use u# to /0S less energ& to fa%ricate than
ordinar& Portland cements.
Non78ortland h)drauli@ @ements
8oBBolan7lime @ements. Mi3tures of ground #u::le and lime are the cements used %&
the Romans, and are to %e found in Roman structures still standing e.g. the Pantheon
in Rome". )he& de$elo# strength slo6l&, %ut their ultimate strength can %e $er& high.
)he h&dration #roducts that #roduce strength are essentiall& the same as those
#roduced %& Portland cement.
Slag7lime @ements. =round granulated %last furnace slag is not h&draulic on its o6n,
%ut is Macti$atedM %& addition of al+alis, most economicall& using lime. )he& are
similar to #u::le lime cements in their #ro#erties. 9nl& granulated slag i.e. 6ater>
;uenched, glass& slag" is effecti$e as a cement com#onent.
Super sulfated @ements. )hese contain a%out 00S ground granulated %last furnace
slag, 1/S g&#sum or anh&drite and a little Portland clin+er or lime as an acti$ator.
)he& #roduce strength %& formation of stringier, 6ith strength gro6th similar to a
slo6 Portland cement. )he& e3hi%it good resistance to aggressi$e agents, including
sulfate.
Cal@ium aluminates @ements are h&draulic cements made #rimaril& from limestone
and %au3ite. )he acti$e ingredients are monocalcium aluminates (aAl
1
9
5
(a9 T
Al
1
9
4
or (A in (ement chemist notation, ((N" and ma&enite (a
11
Al
15
9
44
11 (a9 T B
Al
1
9
4
, or (
11
A
B
in ((N". 2trength forms %& h&dration to calcium aluminates h&drates.
)he& are 6ell>ada#ted for use in refractor& high>tem#erature resistant" concretes, e.g.
for furnace linings.
49
Cal@ium sulfoaluminate @ements are made from clin+ers that include &eOelimite (a
5
Al9
1
"
A
29
5
or (
5
A
4
in (ement chemistOs notation" as a #rimar& #hase. )he& are
used in e3#ansi$e cements, in ultra>high earl& strength cements, and in Mlo6>energ&M
cements. H&dration #roduces stringier, and s#eciali:ed #h&sical #ro#erties such as
e3#ansion or ra#id reaction" are o%tained %& ad<ustment of the a$aila%ilit& of calcium
and sulfate ions. )heir use as a lo6>energ& alternati$e to Portland cement has %een
#ioneered in (hina, 6here se$eral million tones #er &ear are #roduced. Energ&
re;uirements are lo6er %ecause of the lo6er +iln tem#eratures re;uired for reaction,
and the lo6er amount of limestone 6hich must %e endothermic all& decar%oni:es" in
the mi3. 'n addition, the lo6er limestone content and lo6er fuel consum#tion leads to
a (9
1
emission around half that associated 6ith Portland clin+er. Ho6e$er, 29
1
emissions are usuall& significantl& higher.
HNaturalH Cements corres#ond to certain cements of the #re>Portland era, #roduced
%& %urning argillaceous lime stones at moderate tem#eratures. )he le$el of cla&
com#onents in the limestone around 40>4/S" is such that large amounts of %elated
the lo6>earl& strength, high>late strength mineral in Portland cement" are formed
6ithout the formation of e3cessi$e amounts of free lime. As 6ith an& natural material,
such cements ha$e highl& $aria%le #ro#erties.
"eopol)mer @ements are made from mi3tures of 6ater>solu%le al+ali metal silicates
and aluminosilicate mineral #o6ders such as fl& ash and met +aolin.
50
K!SO%AM "%OU8 O# $NDUST%$!S
a" )e3tiles H -esoram 'ndustries 7td.,
51, =arden Reach Road,
(alcutta . B00 015.
%" Ra&on H -esoram Ra&on )riennia #o",
!ist. Hooghl&,
?est Bengal.
c" 2#un Pi#es H -esoram 2#un Pi#e @ 8oundries,
Bans Beria #o", !ist. Hooghl&,
?est Bengal.
d" (ement H -esoram (ement,
Basanthnagar . /0/ 10B,
!ist. -arimnagar,
A.P.
e" (ement H ,asa$adatta (ement,
2edum . /0/ 111,
!istH =ul%arga,
-arnata+a.
f" )&ers H Birla )&res,
2hi$a (ham%ers,
/4, 2&ed amid Ali A$enue,
(alcutta>B00019.
51
CHA8!%7:
DATANA6S$S 9
$NT!%8%!TAT$ON
51
DATANA6S$S 9$NT!%8%!TAT$ON
#inan@ial Statement Anal)sis
)he term Cfinancial anal&sis also +no6n as anal&sis and inter#retation of
financial statementsD , refers to the #rocess of determining financial strength and
6ea+nesses of the firm %& esta%lishing strategic relationshi# %et6een the items of the
%alance sheet , #rofit and loss account and other o#erati$e data.
FAnal&:ing financial statementsG %& Met@alf and Titard
F8inancial anal&sis is a #rocess of e$aluating the relationshi# %et6een
com#onent #arts of a financial statement to o%tain a %etter understanding of a firms
#osition and #erformanceG %& M)ers
)he #ur#ose of financial anal&sis is to diagnose the information contained in
financial statements so as to *ude the #rofita%ilit& and financial soundness of the firm.
*ust li+e a doctor e3amines his #atient %& recording his %od& tem#erature, %lood
#ressure, E(). Before ma+ing his conclusion regarding the illness and %efore gi$ing
his treatment, a financial anal&st anal&sis the financial statements 6ith $arious tools
of anal&sis %efore commenting u#on the financial health or 6ea+nesses of an
enter#rise.
)he anal&sis and inter#retation of financial statements is essential to %ring out
the m&ster& %ehind the figures in financial statements. 8inancial statements anal&sis is
an attem#t to determine the significance and meaning of the financial statement data
so that forecast ma& %e made of the future earnings, a%ilit& to #a& interest and de%t
maturities %oth current and long term" and #rofita%ilit& of a sound di$ided #olic&.
54
T)pes of finan@ial anal)sisH>
8inancial anal&sis into different categories de#ending u#on
1" )he material used and
1" )he method of o#eration follo6ed in the anal&sis or the modus o#erandi of
anal&sis
T)pes of finan@ial anal)sis?7
1" 9n the %asis of material used 1" on the %asis of mode o#eration
a" E3ternal %" 'nternal a" Hori:ontal %" ,ertical
Anal&sis Anal&sis Anal&sis Anal&sis
1. On the (asis of material used? 7
According to material used, financial anal&sis can %e of t6o t&#es
E3ternal anal&sis
'nternal anal&sis
a+ !Aternal anal)sis? 7
)his anal&sis is done %& outsiders 6ho do not ha$e access to the
detailed internal outsiders include in$estors, #otential in$estors, (reditors,
Potential (reditors, =o$ernment Agencies, (redit Agencies and =eneral
Pu%lic. 8or financial anal&sis, these e3ternal #arties to the firm de#end almost
entirel& on the #u%lished financial statements.
(+ $nternal anal)sis?7
)he anal&sis conducted %& #ersons 6ho ha$e access to the internal accounting
records of a %usiness firm is +no6n as internal anal&sis.
55
/. On the (asis of mode operation? 7
According to the modus o#erandi financial anal&sis can also %e of t6o t&#es
a. Hori:ontal anal&sis
0%. ,ertical anal&sis
a+ HoriBontal anal)sis?7
Hori:ontal anal&sis refers to the com#arison of financial data of a com#an& for
se$eral &ears. )he figures for this t&#e of anal&sis are #resented hori:ontall& o$er a
num%er of columns. )he figures of the $arious &ears are com#ared 6ith standard or
%ase &ear. A %ase &ear is &ear chosen as %eginning #oint. )his t&#e of anal&sis is also
called Cd&namic anal&sisD as it is %ased on the data from &ear to &ear rather than on
data of an& one &ear. )he hori:ontal anal&sis ma+es it #ossi%le to focus attention on
items that ha$e changed significantl& during the #eriod under $ie6
(+ -erti@al anal)sisH >
,ertical anal&sis refers to the stud& of relationshi# of the $arious items in the
financial statements of one accounting #eriod. in this t&#es of anal&sis the figures
from financial statement of a &ear are com#ared 6ith a %ase selected from the same
&ears statement
Methods of finan@ial anal)sis
)he follo6ing methods of anal&sis are generall& usedH>
1. (om#arati$e 2tatements.
1. )rend Anal&sis.
4. (ommon>2i:e 2tatements.
5. 8unds flo6 Anal&sis.
/. (ash Anal&sis
A. Ratio Anal&sis
B. (ost>$olume>Profit Anal&sis
1. Comparati'e statement
)he com#arati$e financial statements are statements of the financial #osition
at different #eriods of time .(om#arati$e 2tatement #ro$ides an idea of financial
#osition at t6o or more #eriods. =enerall& t6o financial statements %alance sheet and
income statement" are #re#ared in com#arati$e form for financial anal&sis.
5/
TH! COM8A%AT$-! STAT!M!NT MA6 SHO5
1. A%solute figures ru#ee amounts"
1. (hanges in a%solute figures i.e. increase or decrease in a%solute figures.
4. A%solute data in terms of #ercentages.
5. 'ncrease or decrease in terms of #ercentages.
TH! T5O COM8A%AT$-! STAT!M!NTS A%!
1. (om#arati$e %alance sheet, and
1. (om#arati$e 'ncome statement.
&1+ Comparati'e (alan@e sheet?7
)he com#arati$e %alance sheet anal&sis is the stud& of the trend of the
same items, grou# of items and com#uted items in t6o or more %alance sheets
of the same %usiness enter#rise on different dates. )he change in #eriodic
%alance sheet items reflect the conduct of a %usiness the change can %e
o%ser$ed %& com#arison of the %alance sheet at the %eginning and at the end of
a #eriod and these changes can hel# in forming an o#inion a%out the #rogress
of an enter#rise.
=U'!E 7'NE2 89R 'N)ERPRE)A)'9N 98 (9MPARA)',E BA7AN(E
2HEE)
?hile inter#reting com#arati$e %alance sheet the inter#reter is e3#ected to
stud& the follo6ing as#ectsH>
1. (urrent financial #osition and li;uidit& #osition
1. 7ong>term financial #osition
4. Profita%ilit& of the concern.
5A
/. COMMON S$E! STAT!M!NTH>
)he common>si:e statements, %alance sheet and income statement are sho6 in
anal&tical #ercentages. )he figures are sho6n as #ercentages of total assets, total
lia%ilities and total sales. )he total assets are ta+en as 100 and different assets are
e3#ressed as a #ercentage of the total similarl&, $arious lia%ilities are ta+en as a #art of
total lia%ilities.
COMMON S$E! BAANC! SH!!T?7
A statement in 6hich %alance sheet items are e3#ressed as the ratio of each
asset to total assets and the ratio of each lia%ilit& is e3#ressed as a ratio of total
lia%ilities is called common si:e %alance. )he common si:e %alance sheet can %e used
to com#are com#anies of differing si:e. )he com#arison of figures in different #eriods
is not useful %ecause total figures ma& %e affected %& a num%er of factors. 't is not
#ossi%le to esta%lish standard norms for $arious assets. )he trends of figures from
&ear to &ear ma& not %e studied and e$en the& ma& not gi$e #ro#er results.
5B
COM8A%AT$-! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /00<70=
% 'n 7a+hs"
8A%T$CUA%S /00< /00= $n@rease4De@re
ase Amount
$n@rease4De@reas
e per@entage
A" A22E)2
8i3ed Asset 1005.15 1005.4/ B10.11 AA.51
(a#ital 6or+ in #rogress A45./9 0A5.0/ 140.1A 4A.10
TOTA 1B10.04 1AA9.1 9/0.4B //.19
B" (URREN) A22E)2
'n$estments 5B.04 A1.B0 14.9/ 19.1A
'n$entories 551.1B /09.0A 15A.09 44.11
2undr& de%tors 1B4.0B 400.1B 10B.1 49.11
(ash and %an+ %alance 50.4A /A./B 1A.11 50.1A
7oans and ad$ances 5/1.09 //5.A1 101.B4 11.5A
8i3ed de#osits 0.10 0.10 0.1 //.//
TOTA CU%%!NT
ASS!TS
11/A./ 1A51.50 40/.90 /B.04
TOTA ASS!TS 19B/.44 5411.A9 144A.4A 55.91
7'AB'7')'E2
E;uit& 2hare (a#tial 5/.B5 5/.B5 0 0
(a#ital reser$es 940.0/ 1100.15 459.49 4B./4
Re$aluation Reser$es /.44 5.11 >1.11 >11.B0
secured 7oans 9B1.0A 1/4A.1B /A/.11 /0.10
Un 2ecured 7oans 111.19 545.1A 411.0B 1/B.9/
(urrent 7ia%ilities @
Pro$isions
901.0A 1011.1A 110.1 11.1
TOTA 901.0A 1011.1A 110.1 11.1
TOTA$AB$$T$!S 19B/.44 5411.A9 144A.4A 55.91
50
/00< /00= A(solute @hange I @hange
Total Current
Assets
11/A./ 1A51.50 40/.90 /B.04
Total Current
ia(ilities
901.0A 1011.1A 110.1 11.1
#iAed Assets 1005.15 1005.4/ B10.11 AA.51
59
$NT!%8%!TAT$ON?
)he (om#arati$e Balance 2heet com#aring (urrent Assets and (urrent 7ia%ilities.
)he financial &ear 1000 and 1009, the (urrent Assets are increased %& /B.04S in
the &ear 1009. At the same time the (urrent lia%ilities are increased %& 11.1S in the
&ear 1009. And 8i3ed Assets are increased %& AA.51S in the &ear 1009. )he o$erall
#osition of the com#an& is satisfactor&.
/0
COM8A%AT$-! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /00=710
% 'n 7a+hs"
8A%T$CUA%S /00= /010 $n@rease4De@rease
Amount
$n@rease4De@rease
per@entage
A" A22E)2
8i3ed Asset 1005.4/ 4541.01 1A1B.5B 90.19
(a#ital 6or+ in
#rogress
0A5.0/ 511.04 >5/1.01 >/1.1A
TOTA 1AA9.1 4055.A/ 11B/.5/ 55.04
B" (URREN)
A22E)2
'n$estments A1.B0 /1.54 >10.4/ >1A.B/
'n$entories /09.0A 91A.19 41B.14 //./4
2undr& de%tors 400.1B /51.09 1A1.B1 51.00
(ash and %an+
%alance
/A./B 00.15 14./B 51.AA
7oans and
ad$ances
//5.A1 AA/.0A 110.55 19.91
8i3ed de#osits 0.10 0.41 0.04 10.B1
TOTA
CU%%!NT
ASS!TS
1A51.50 11/A.01 A14./5 4B.4/
TOTA ASS!TS 5411.A9 A100.A0 1B00.99 51.59
7'AB'7')'E2
E;uit& 2hare
(a#tial
5/.B5 5/.B5 0 0
(a#ital reser$es 1100.15 1591.11 110.0B 1A.5B
Re$aluation
Reser$es
5.11 4.49 >0.B4 >1B.B1
2ecured 7oans 1/4A.1B 10A4.B1 41B.5/ 11.41
Un 2ecured 7oans 545.1A 11A1./0 010.45 A/.A1
(urrent 7ia%ilities
@ Pro$isions
1011.1A 1545.11 514.0A 51.04
TOTA 1011.1A 1545.11 514.0A 51.04
TOTA
$AB$$T$!S
5411.A9 A100.A0 1B00.99 51.59
/1
/00= /010 A(solute @hange I @hange
Total Current
Assets
1A51.50 11/A.01 A14./5 4B.4/
Total Current
ia(ilities
1011.1A 1545.11 514.0A 51.04
#iAed Assets 1005.4/ 4541.01 1A1B.5B 90.19
/1
$NT!%8%!TAT$ON?
)he (om#arati$e Balance 2heet com#aring (urrent Assets and (urrent 7ia%ilities.
)he financial &ear 1009 and 1010, the (urrent Assets are increased %& 4B.4/S in
the &ear 1010. At the same time the (urrent lia%ilities are increased %& 51.04S in the
&ear 1010. And 8i3ed Assets are increased %& 90.19S in the &ear 1010. )he o$erall
#osition of the com#an& is satisfactor&.
/4
COM8A%AT$-! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /010711
% 'n 7a+hs"
8A%T$CUA%S /010 /011 $n@rease4De@rease
Amount
$n@rease4De@rease
per@entage
A" A22E)2
8i3ed Asset 4541.01 4A91.B1 1/9.9 B./B
(a#ital 6or+ in
#rogress
511.04 54B.01 15.90 A.0/
TOTA 4055.A/ 5119./4 105.00 B.50
B" (URREN)
A22E)2
'n$estments /1.54 A/.01 15.49 1B.9B
'n$entories 91A.19 1110.// 101.4A 11.00
2undr& de%tors /51.09 A41.45 00.9/ 1A.40
(ash and %an+
%alance
00.15 B1.00 >0.1A >10.40
7oans and
ad$ances
AA/.0A 545.A0 >140.5A >45.A/
8i3ed de#osits 0.41 1.BA 1.5/ 5.AB
TOTA
CU%%!NT
ASS!TS
11/A.01 1414.9/ AB.94 4.01
TOTA ASS!TS A100.A0 A5/4.50 4/1.0 /.B0
7'AB'7')'E2
E;uit& 2hare
(a#tial
5/.B5 5/.B5 0 0
(a#ital reser$es 1591.11 11/1.A1 >149.59 >1A.0A
Re$aluation
Reser$es
4.49 1.09 >0./ >15.B5
2ecured 7oans 10A4.B1 14B1.04 /00.11 1B.1A
Un 2ecured 7oans 11A1./0 1A1B.55 4A5.95 10.90
(urrent 7ia%ilities
@ Pro$isions
1545.11 11/4.9A >100.1A >19./5
TOTA 1545.11 11/4.9A >100.1A >19./5
TOTA
$AB$$T$!S
A100.A0 A5/4.50 4/1.0 /.B0
/5
/010 /011 A(solute @hange I @hange
Total Current
Assets
11/A.01 1414.9/ AB.94 4.01
Total Current
ia(ilities
1545.11 11/4.9A >100.1A >19./5
#iAed Assets 4541.01 4A91.B1 1/9.9 B./B
//
$NT!%8%!TAT$ON?
)he (om#arati$e Balance 2heet com#aring (urrent Assets and (urrent 7ia%ilities.
)he financial &ear 1010 and 1011, the (urrent Assets are increased %& 4.01S in
the &ear 1011. At the same time the (urrent lia%ilities are decreased %& >19./5S in the
&ear 1011. And 8i3ed Assets are increased %& B./BS in the &ear 1011. )he o$erall
#osition of the com#an& is moderate
COM8A%AT$-! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /01171/
% 'n 7a+hs"
8A%T$CUA%S /011 /01/ $n@rease4De@rease
Amount
$n@rease4De@rease
per@entage
A" A22E)2
8i3ed Asset 4A91.B1 4/0B.11 >105./1 >1.04
(a#ital 6or+ in
#rogress
54B.01 A00.A/ 151.05 //.5A
TOTA 5119./4 51AB.0A 140.44 4.45
B" (URREN)
A22E)2
'n$estments
A/.01
AA.4A 0./5 0.01
'n$entories 1110.// 99/.1A >114.49 >11.04
/A
2undr& de%tors A41.45 AB4./0 51.15 A.A9
(ash and %an+
%alance
B1.00 A9./9 >1.19 >4.10
7oans and
ad$ances
545.A0 11/5.09 B19.59 1A/.//
8i3ed de#osits 1.BA 1.0B >0.A9 >49.10
TOTA
CU%%!NT
ASS!TS
1414.9/ 19/9.0/ A4/.9 1A0.44
TOTA ASS!TS A5/4.50 B11B.B1 BB5.14 11.99
7'AB'7')'E2
E;uit& 2hare
(a#tial
5/.B5 5/.B5 0 0
(a#ital reser$es 11/1.A1 0AA./B >40/.0/ >40.BA
Re$aluation
Reser$es
1.09 1.B0 >0.19 >A./B
2ecured 7oans 14B1.04 41BB.91 00A.09 44.90
Un 2ecured 7oans 1A1B.55 91B.51 >B00.01 >54.01
(urrent 7ia%ilities
@ Pro$isions
11/4.9A 110B.4A 10/4.5 91.10
TOTA 11/4.9A 110B.4A 10/4.5 91.10
TOTA
$AB$$T$!S
A5/4.50 B11B.B1 BB5.14 11.99
/011 /01/ A(solute @hange I @hange
Total Current
Assets
1414.9/ 19/9.0/ A4/.9 1A0.44
Total Current
ia(ilities
11/4.9A 110B.4A 10/4.5 91.10
#iAed Assets 4A91.B1 4/0B.11 >105./1 >1.04
/B
/0
$NT!%8%!TAT$ON?
)he (om#arati$e Balance 2heet com#aring (urrent Assets and (urrent 7ia%ilities.
)he financial &ear 1011 and 1011, the (urrent Assets are increased %& 1A0.44S in
the &ear 1011. At the same time the (urrent lia%ilities are increased %& 91.10S in the
&ear 1011. And 8i3ed Assets are decreased %& >1.04S in the &ear 1011. )he o$erall
#osition of the com#an& is satisfactor&.
COMMON S$E! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /00<70=
% In 7a+hs"
8A%T$CUA%S /00< I /00= I
A" A22E)2
8i3ed Asset 1005.15 4A.55 1005.4/ 51.05
(a#ital 6or+ in
#rogress
A45./9 11.41 0A5.0/ 10.0/
TOTA 1B10.04 /B.BA 1AA9.1 A1.09
B" (URREN)
A22E)2
'n$estments 5B.04 1.A0 A1.B0 1.54
'n$entories 551.1B 15.0A /09.0A 14.AA
7oans @
Ad$ances
5/1.09 1/.11 //5.A1 11.0A
2undr& de%tors 1B4.0B 9.1B 400.1B 0.01
(ash and %an+
%alance
50.4A 1.4/ /A./B 1.41
/9
8i3ed de#osits 0.10 0.00A 0.10 0.00A
TOTA
CU%%!NT
ASS!TS
11/A./ 51.15 1A51.50 40.09
TOTA ASS!TS 19B/.44 100 5411.A9 100
7'AB'7')'E2
E;uit& 2hare
(a#tial
5/.B5 1./4 5/.B5 1.0A
(a#ital Reser$es 940.0/ 41.10 1100.15 19.A9
Re$aluation
Reser$es
/.44 0.1B 5.11 0.09
2ecured 7oans 9B1.0A 41.A4 1/4A.1B 4/.A4
Un 2ecured 7oans 111.19 5.0B 545.1A 10.0A
TOTA 10B5.1B A9.A0 4400./4 BA./4
(urrent 7ia%ilities
@ Pro$isions
901.0A 40.10 1011.1A 14.5/
TOTA 901.0A 40.10 1011.1A 14.5/
TOTA
$AB$$T$!S
19B/.44 100 5411.A9 100
/00< I /00= I
Total Current
Assets
11/A./ 51.15 1A51.50 40.09
Total Current
ia(ilities
901.0A 40.10 1011.1A 14.5/
#iAed Assets 1005.15 4A.55 1005.4/ 51.05
A0
$NT!%8%!TAT$ON?
A1
)he current assets are 51.15S in 1000 and decrease to 40.09S in 1009 i.eE5.1/S"
decrease. At the same time 8i3ed Assets are 4A.55S in 1000 and increase to 51.05S
in 1009 i.eE /.5S" increase. )he (urrent 7ia%ilities are 40.10S in the &ear 1000 and
decrease to 14.5/S i.e, A.04S" decrease.
COMMON S$E! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /00=710
% 'n 7a+hs"
8A%T$CUA%S /00= I /010 I
A" A22E)2
8i3ed Asset 1005.4/ 51.05 4541.01 /A.1/
(a#ital 6or+ in
#rogress
0A5.0/ 10.1/ 511.04 A.BA
TOTA 1AA9.1 A1.09 4055.A/ A4.01
B" (URREN)
A22E)2
'n$estments A1.B0 1.54 /1.54 0.05
'n$entories /09.0A 14.AA 91A.19 1/.01
7oans @
Ad$ances
//5.A1 11.0A AA/.0A 10.90
2undr& de%tors 400.1B 0.04 /51.09 0.09
(ash and %an+
%alance
/A./B 1.41 00.15 1.41
A1
8i3ed de#osits 0.10 0.00A 0.41 0.00/
TOTA
CU%%!NT
ASS!TS
1A51.50 40.09 11/A.01 4A.9/
TOTA ASS!TS 5411.A9 100 A100.A0 100
7'AB'7')'E2
E;uit& 2hare
(a#tial
5/.B5 1.0A 5/.B5 0.B5
(a#ital Reser$es 1100.15 19.A9 1591.11 15.55
Re$aluation
Reser$es
5.11 0.09 4.49 0.0/
2ecured 7oans 1/4A.1B 4/.A4 10A4.B1 40./5
Un 2ecured 7oans 545.1A 10.0A 11A1./0 10.A9
TOTA 4400./4 BA.// 5AAA.5A BA.5A
(urrent 7ia%ilities
@ Pro$isions
1011.1A 14.5/ 1545.11 14./0
TOTA 1011.1A 14.5/ 1545.11 14./0
TOTA
$AB$$T$!S
5411.A9 100 A100.A0 100
/00= I /010 I
Total Current
Assets
1A51.50 40.09 11/A.01 4A.9/
Total Current
ia(ilities
1011.1A 14.5/ 1545.11 14./0
#iAed Assets 1005.4/ 51.05 4541.01 /A.1/
A4
$NT!%8%!TAT$ON?
)he current assets are 40.09S in 1009 and decrease to 4A.9/S in 1010 i.eE1.15S"
decrease. At the same time 8i3ed Assets are 51.05S in 1009 and increase to /A.1/S
in 1010 i.eE 15.51S" increase. )he (urrent 7ia%ilities are 14.5/S in the &ear 1009
and increase to 14./0S i.e, 0.0/S" increase.
A5
COMMON S$E! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /010711
% 'n 7a+hs"
8A%T$CUA%S /010 I /011 I
A" A22E)2
8i3ed Asset 4541.01 /A.1/ 4A91.B1 /B.10
(a#ital 6or+ in
#rogress
511.04 A.BA 54B.01 A.B0
TOTA 4055.A/ A4.01 5119./4 A4.90
B" (URREN)
A22E)2
'n$estments /1.54 0.0A A/.01 1.01
'n$entories 91A.19 1/.01 1110.// 1B.44
7oans @
Ad$ances
AA/.0A 10.90 545.A0 A.B4
2undr& de%tors /51.09 0.09 A41.45 9.B0
(ash and %an+
%alance
00.15 1.41 B1.00 1.11
8i3ed de#osits 0.41 0.00/ 1.BA 0.01
TOTA
CU%%!NT
ASS!TS
11/A.01 4A.90 1414.9/ 4/.90
TOTA ASS!TS 1545.11 14./0 11/4.9A 1B.00
7'AB'7')'E2
E;uit& 2hare
(a#tial
5/.B5 0.B5 5/.B5 0.B0
(a#ital Reser$es 1591.11 15.55 11/1.A1 19.49
Re$aluation
Reser$es
4.49 0.0/ 1.09 0.05
2ecured 7oans 10A4.B1 40./5 14B1.04 4A.B/
Un 2ecured 7oans 11A1./0 10.A9 1A1B.55 1/.11
TOTA 5AAA.5A BA.5A /199./1 01.09
(urrent 7ia%ilities 1545.11 14./0 11/4.9A 1B.00
A/
@ Pro$isions
TOTA 1545.11 14./0 11/4.9A 1B.00
TOTA
$AB$$T$!S
A100.A0 100 A5/4.50 100
/010 I /011 I
Total Current
Assets
11/A.01 4A.90 1414.9/ 4/.90
Total Current
ia(ilities
1545.11 14./0 11/4.9A 1B.00
#iAed Assets 4541.01 /A.1/ 4A91.B1 /B.10
AA
$NT!%8%!TAT$ON?
)he current assets are 4A.90S in 1010 and decrease to 4/.90S in 1011 i.eE1S"
decrease. At the same time 8i3ed Assets are /A.1/S in 1010 and decrease to /B.10S
in 1011 i.eE 0.9/S" decrease. )he (urrent 7ia%ilities are 14./0S in the &ear 1010 and
decrease to 1B.00S i.e, /.A1S" decrease.
AB
COMMON S$E! BAANC! SH!!T STAT!M!NT #O% TH! 6!A% /01171/
% 'n 7a+hs"
8A%T$CUA%S /011 I /01/ I
A" A22E)2
8i3ed Asset 4A91.B1 /B.10 4/0B.11 59.A4
(a#ital 6or+ in
#rogress
54B.01 A.B0 A00.A/ 9.51
TOTA 5119./4 A4.90 51AB.0A /9.05
B" (URREN)
A22E)2
'n$estments A/.01 1.01 AA.4A 0.91
'n$entories 1110.// 1B.44 99/.1A 14.BA
7oans @
Ad$ances
545.A0 A.B4 11/5.09 1/.9A
2undr& de%tors A41.45 9.B0 AB4./0 9.41
(ash and %an+
%alance
B1.00 1.11 A9./9 0.9A
8i3ed de#osits 1.BA 0.01 1.0B 0.01
TOTA
CU%%!NT
ASS!TS
1414.9/ 4/.90 19/9.0/ 50.9/
TOTA ASS!TS A5/4.50 100 B11B.B1 100
7'AB'7')'E2
E;uit& 2hare
(a#tial
5/.B5 0.B0 5/.B5 0.A4
(a#ital Reser$es 11/1.A1 19.49 0AA./B 11.90
Re$aluation
Reser$es
1.09 0.05 1.B0 0.04
2ecured 7oans 14B1.04 4A.B/ 41BB.91 54.9A
Un 2ecured 7oans 1A1B.55 1/.11 91B.51 11.04
TOTA /199./1 01.09 /010.4/ A9.54
(urrent 7ia%ilities
@ Pro$isions
11/4.9A 1B.00 110B.4A 40./5
TOTA 11/4.9A 1B.00 110B.4A 40./5
A0
TOTA
$AB$$T$!S
A5/4.50 100 B11B.B1 100
/011 I /01/ I
Total Current
Assets
1414.9/ 4/.90 19/9.0/ 50.9/
Total Current
ia(ilities
11/4.9A 1B.00 110B.4A 40./5
#iAed Assets 4A91.B1 /B.10 4/0B.11 59.A4
A9
$NT!%8%!TAT$O$N?
)he current assets are 4/.90S in 1011 and increase to 50.9/S in 1011 i.eE5.9BS"
increase. At the same time 8i3ed Assets are /B.10S in 1011 and decrease to 59.A4S
in 1011 i.eE B./BS" decrease. )he (urrent 7ia%ilities are 1B.00S in the &ear 1011 and
increase to 40./5S i.e, 11.AAS" increase.

B0
CHA8T!%7;
#$ND$N"S. SU""!ST$ONS 9
CONCUS$ON
B1
#$ND$N"S
'n com#arati$e %alance sheet the current assets are increased in all the
&ears 6hereas in common si:e the current assets are increased in 4
&ears e3ce#t the last &ear that is decreased.
)he (urrent 7ia%ilities are also increased in all the &ears in
com#arati$e %alance sheet e3ce#t in 1010>1011 the current lia%ilities
are decreased.
'n common si:e the current lia%ilities are increased in 1 &ears and
decreased in 1 &ears.
)he fi3ed assets are increased in all the &ears from100B>1011 in
com#arati$e %alance sheet 6hereas in common si:e e3ce#t in 1000 >09
it is increased in the remaining &ears.
7oans @ Ad$ances are increased in the &ear 100A>1010. E3ce#t in the
&ear 1011 decrease. At the same time common si:e also increase in the
&ear 100A>1010. E3ce#t 1011 decrease.
)he secured loans are decrease in all the &ears.
)he un secured loans are increase in all &ears. 'n common si:e the un
secured loans are also increased. E3ce#t 1009 is decrease.


B1
SU""!ST$ONS
)o ma+e the current financial #osition of the com#an& is more effecti$e.
)he current assets are im#ro$e in ne3t financial &ear.
)he com#an& should concentrate in the current lia%ilities to maintain a #ro#er
se;uence in the ne3t financial &ear.
)he fi3ed assets are $er& #oor in the financial re#orts to im#ro$e the fi3ed
assets in ne3t financial &ear.
7oans @ Ad$ances are normal decrease %ut the com#an& should %e increase
on the %asis of the #ast financial re#ort.
)he secured loans 6ill %e im#ro$e in the ne3t financial &ear. And also the un
secure loans also im#ro$e.
CONCUS$ON
't should al6a&s %e %orne in mind that the success or failure of a (om#an&
de#ends u#on the amount of shareholdersO $alue that a (om#an& generates. 8inancial
B4
(ontrol is a measure that reflects the a%solute amount of shareholdersO $alue created
or destro&ed during each &ear. (ontrol has no steering failures li+e Return on
'n$estment R9'" and Earning #er 2hare EP2". 'n the case of R9' and EP2,
ma3imi:ing these measures might not lead to o#timal outcome or ma3imum
shareholder $alue.
)hus, ' strongl& %elie$e that the im#lementation of 8inancial (ontrol hel#s the
(om#an& in the follo6ing 6a&sH
Reduction in cost of ca#ital and increase in the net o#erating #rofit after ta3 %&
%etter 6or+ing ca#ital management and %& +ee#ing o#timum %alance of de%t and
e;uit& in the ca#ital structure.
(ost control and cost reduction in the area of controlla%le e3#enses.
Reduction in ca#ital em#lo&ed 6ith s#ecific targeted reductions in %oo+ de%ts,
in$entories etc.
Effecti$e utili:ation of fi3ed assets to deri$e the #romised return from
'n$estments.
)o ma3imi:e shareholders $alue.
)o im#ro$e ca#ital efficienc& and o$er>all %usiness #erformance.
)o encourage greater %e>o6ner and entre#reneurial %eha$iors among
em#lo&ees.
)o guide in decision ma+ing.
B5
CHA8T!%7>
B'B'79=RAPHL
B/
B$B$O"%A8H6
BOOKS. *OU%NAS AND MA"AE$N!S?
1. BU2'NE22 )9!AL, 8EBRUARL, 1000
1. 8'NAN('A7 MANA=EMEN) BL $.M. 8AND!6
4. 8UN!AMEN)A72 98 8'NAN('A7 MAN=EMEN) BL (.,AN HPRNE
5!BS$T!S?
1. 666.google.com
1. 666.6i+i#edia.com
4. 666.%usiness.com
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