A

Summer Training Project

on
RATIO ANALYSIS OF AJMER DAIRY

Submitted in partial fulfuilment for the Award of

Masters of Buiness Administration
DS Part II Session 2014-15

Submitted to
Center for Entrepreneurship and Small Business Management

UNDER THE GUIDENCE

MAAM GAZAL SHARMA

SUBMITTEDBY:REENA VERMA

MAHARSHI DAYANAND SARASWATI UNIVERSITY, AJMER

Declaration
I hereby certify that the summer training report on RATIO ANALYSIS OF AJMER DAIRY,
submitted in partial fulfillment for the award of Master of Business Administration (Dual
Specialization) at Center for Entrepreneurship and Small Business Management,
Maharshi Dayanand Saraswati University, Ajmer is an authentic record of work carried
out by me. The matter embodied in this summer training report has not been submitted
for the award of any other degree or diploma.

Date:10-02-2015

REENA VERMA
(Name of the Student)

ACKNOWLEDGEMENT

No assignment can be completed without the help of many individuals. Hence; thanks
and gratitude are owed, to all of
them for help in various ways in completion of this assignment. I am grateful to Mr.
VINOD KANOONGA for his valuable guidance supervision and support under whose
guidelines and instruction I am able to complete this project. No words can express my
feelings of heartfelt gratitude and reference for Mrs. GAZAL MAAM whose ready
assistance, time and knowledge were always there for me whenever the need arose for
it. They were very supportive to me in me in providing the right and needful
information.

REENA VERMA

PREFACE
In second year of MBA (DS) this training is a chance to expose oneself to
real business world to give one theoretical knowledge practical aspects, a
training of this sort is of great help.
I choose Ajmer dairy as a platform to apply my skills. I opted for a finance
project, as the financial power is the most important for a firm to produce.
My project is to study and analysis RATIO ANALYSIS.

EXECUTIVE SUMMARY

RATIO ANALYSIS has become a very important for a company to

measure the profitability of the organization by calculating the ratio of
present data.
The project RATIO ANALYSIS was conducted at AJMER ZILA
DUGDH UTPADAK SAHAKARI SANG LTD. AJMER. The main
objective of this project is find out different ratios to know the current
financial position of ZILA DUGDH UTPADAK SAHAKARI SANG
LTD. AJMER.

TABLE OF CONTENTS
I.
II.
III.

DECLARATION
ACKNOWLEDGMENT
EXECUTIVE SUMMARY

Introduction

II

Company Profile:History
Vision, mission
Structure
Products
Process of milk production

III

Introduction of the topic

IV

Advantages, objectives and limitation of the study

Analysis of the Study

VI

Recommendation and Conclusion

VIII

References

INTRODUCTION OF THE ORGANISATION

AJMER ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. AJMER
(AZDUSS LTD, AJMER) is a cooperative organization registered under
cooperative act with registered of cooperative, government Rajasthan. Ajmer dairy
was established in the year 1972 as a subsidiary unit of Rajasthan state dairy
development corporation. In 1975 the (RSDDC) Rajasthan state dairy development
corporation introduced great changes in the way of doing business and divided in
two parts:1. District dugdh utpadak sahakari sangh (this organization was operating
in milk procurement and its allied activities).
2. Rajasthan cooperative dairy federation Ltd(this organization was
involved in progressing of the milk, manufacturing the milk products and
marketing of milk and milk products).
3. AZDUSS receives direction and assistance from central government ,
state government , RCDF Ltd Jaipur and national dairy development
board ,anand from time to time.

Presently the dairy plant has a capacity to process 1.50 lakh liter milk;
prepare milk powder, ghee, Chaach, Lassi, Dahi, Shrikhand, Paneer and
other milk products. The plant also has a capacity to pack 2.50 lakh liter
milk per day.
The ajmer plant of saras has been certified under internationally accepted
quality and food safety management system in accordance with ISO 90012000 with HACCP. The organization also helps in improvement of animal
breed, providing animal health services, insurance of animal, woman dairy
project and providing manure to the cattle rearers. The organization also
provides cattle feed which is purchased from nadabai and marketed in
ajmer.
Presently, Ajmer dairy has a liquid milk handling capacity of more than
1lakh liter per day. It has a raw material capacity of 30000 liter per day and
pasteurized milk storage capacity of 105000 liter per day. Its ghee making
capacity is 5 ton per day which gives an annual production of 300 ton per
annum.
Ajmer dairys organization structure comprise of managing director at the
apex. The second level of the organizational hierarchy comprise of
manager (procurement and input), manager (plant), manager (MIS),
purchase manager, stores manager, HR manager and marketing manager,
financial department manager.
The manager (procurement and inputs), is further assisted by project
officer, field staff , production manager, quality manager, and engineering
manager. The marketing department is assisted by manager and field staff
under him. Financial department is also assisted by managers and field
staff under him.

COMPANY PROFILE
Ajmer dairy was established in the year 1972 as a subsidiary unit of
Rajasthan state dairy development corporation. The cooperative
management in the milk sector has made considerable progress since
inspection in making increased quality of milk producers in the country.
The cooperative sector based on the Anand pattern.
District dugdh utpadak sahakari sangh and rajasthan cooperative dairy
federation limited are two organization were reported to RCDF, jaipur and
their working was totally independent.
Ajmer dairy milk union is supplying its product in the local market and
nearby cities like nasirabad, bijaynagar, makrana, kuchaman, beawer,
kekari. Skim milk and white milk powder is mainly supplied to defence
different dairies in rajesthan and areas.
With industrialization and urbanization the supply of milk become a
commercial industry, with specialized breeds of cattle being developed for
dairy, as district from beef or draught animals.
MISSION
1. to provide good quality of milk to consumers at reasonable rates.
2. availability of good quality of milk to consumers.
3. to provide reasonable price of milk to milk producers.
4. to contribute in country development.
5. to maintain the top position in the milk market.
6. to provide maximum satisfaction to the consumers.

OBJECTIVES
To carry out activities for prompting production, procurement,
processing and marketing of milk and milk products for the economic
development and development of animal/farming community.
Development and expansion of such other activities as may be
conductive for promotion of industry, improvement and protection of
milk production.
Organize and provide technical inputs.
Impart training and orientation to dairy cooperative member.

PRODUCT PROFILE
Ajmer milk union is supplying following types of milk in the local
market and near cities like Nasirabad, Bijaynagar, Makrana and
Kuchaman.
saras shakti ( fat 4.5% and Snf 8.5%).
saras gold ( fat 6.0% and Snf 9.0%).
saras smart ( fat 1.5% and Snf 9.0%).
saras taza ( fat 3.0% and Snf 8.5%).
saras light ( fat 0.5% and Snf 8.7%).

MILK PRODUCTS PROFILE

MILK - SELF PRODUCTION

GHEE - SELF PRODUCTION
CURD - SELF PRODUCTION
LASSI - SELF PRODUCTION
BUTTER MILK - SELF PRODUCTION
PANEER - SELF PRODUCTION
YOGHURT - SELF PRODUCTION
CATTLEFEED - SELF PRODUCTION
BUTTER JAIPUR DAIRY
FLAVOURED MILK - JAIPUR DAIRY
TETRA PACK MILK - JAIPUR DAIRY
MAWA - JAIPUR DAIRY
ICECREAM BIAKNER DAIRY
RASGULLA - BIAKNER DAIRY
GULABJAMUN - BIAKNER DAIRY
CHACH - SELF PRODUCTION

PROCESS OF MILK PRODUCTION

Milk is collected from various societies in steel container and brought to the
diary through transport and unloaded on the dock. Then simple are taken
from each container and tasted through taste meter which shows the
ADULTRARION (WATER, MILK procured by machine) and fats (because
payment is made on the basis of fat).
Then total milk collected in a machine and certain chemical are
added to remove any kind of germs and bacteria and then milk pasteurized
on the basis of predetermined quality standard. Milk is packed into plastic
film of various sizes through machine automatically

PASTURIZATION OF MILK:It is a process through which milk is boiled at 110c and then milk is again
cooled down at 0degree centigrade temperature with 5 seconds so that
bacteria present in the milk are destroyed and milk remain hygienic for a
longer period of time.

Introduction of ratio analysis

A ratio is an arithmetical expression of relationship between two related
and interdependent items. Ratios when, calculated on the basis of
accounting information are called accounting ratio is thus, an arithmetical
relationship between two accounting variables. But they assumed
significance if these variables have cause and effect relationship. In brief
accounting ratio provides a quantitative relationship which the analyst may
use to make a quantitative judgment about various aspects of financial
position and performance of an enterprise.

Calculation and comparison of main indicators

Methods of calculation and interpreting financial ratios.
Objective of ratio analysis is the comparative measurement of
financial data
It is a investment, credit and managerial decision.

Expression of ratio:Accounting ratios express the relationship between two financial

variables of the financial statements. They are the expressed in any
one of the following forms,
Pure: - It is expressed as a quotient = 2:1
Current ratio =
current assets
Current liabilities

Percentage: - It is expressed in percentage, gross profit ratio

which relates profit to net sales.

gross profit ratio = (gross profit100)net sales

Time: - It is expressed in a number of times a particular figure is
compare to another figure.
Stock turnover = (cost of goods sold)average stock

fraction: - It is expressed in fraction

ex., ratio of fixed assets to share capital

Advantage of ratios:There are various groups of people who are interested in analysis of
financial position of a company. Ratio analysis helps the various
groups in the following manner.
To work out the profitability:-Accounting ratio helps to
measure the profitability of the business by calculating the
various profitability ratio. It helps the management to know
about the profitability ratios show the actual performance of the
business.
To work out the solvency:-with the help of solvency ratio,
solvency of the company can be measured. These ratio shows
the relationship between the liabilities and assets.
Helpful in analyzing financial statements:-ratio analysis
helps the outsiders just like creditors, shareholders, debentureholders, bankers to know about the profitability and ability of the
company to pay them interest and dividend etc. helpful in
comparative analysis of the performance. To simplify the
accounting information; accounting ratio are very useful as they

briefly summaries the result of detail and complicated

computations.
To work out the operating efficiency:-ratio analyses helps to
work out the oprating efficiency of the company with the help of
various turnover ratio. All turnover ratio are work out to evaluate
the performance of the business in utilizing the resources.

To work out the short term financial position:-ratio analysis

helps to workout the short term financial position of the
company with the help of liquidity ratios.

Helpful for forecasting purposes:-accounting ratios indicate

the trend of the business. The trend is useful for estimating
future. With the help of previous years ratio estimating for future
can be made.
Useful in inter-firm and intra firm comparison:- a firm
would like to compare its performance with that of other firms
and of the industry in general. The comparison is called interfirm comparison, I the performance of different units belonging
to same firm is to be compared, it is called intra firm
comparison.

Objectives of ratios:Ratios are regarded as a true test of earning capacity, financial soundness
and operating efficiency of business organization. some objectives of the
ratio analysis are as follow:
o
o
o
o
o
o
o
o
o
o
o

To measure profitability
To have knowledge of liquidity
To portray solvency
To ascertain operational efficiency
To facilitate comparison
To measure industrial sickness
To reflect productivity
Useful to know the economic condition of a business
It helps in cost controlling
A single ideal ratio cannot be applied for all type of business.
Helpful for managers in planning, forecasting, coordination,
communication, controlling.

Limitations of ratio analysis:There are certain limitations of the ratio analysis techniques and they
should be kept in mind while using them in interpreting financial
statements.

Limited comparability:-different firms apply dffernt accounting

policy. Therefore the ratio of one firm cannot always be compared
with ratio of other firm. Some firms may value the closing stock on lifo
basis while some other firms may value on fifo basis. Similarity there
may be difference in providing depreciation of fixed assets or certain
of provision for doubtful debts each.
False result:-accounting ratio are based on data drawn form
accounting records. In case that data is correct then only the ratio will
be correct. The data therefore must be absolutely correct.

Effect of price level changes:-price level chances often make the

comparison of figures difficult over a period of time. Changes the
price effect the cost of production, sale and also the value of assets.

 Effect of window dressing:-in order to cover up their bad financial

position some compnies resort to window dressing. They may record
the acconting data according to conviniance to show the financial
position of the company in a better way.
Misleading results:- in the absence of absolute data . the result may
be misleading.
Different meaning are put on different terms:-elements and sub
elements of financial statement are not uniquely define.a firm may
work out ratios on the basis of profit after interest and tax, onother
firm may consider profit after interest but before tax.
Difficult to forecast future on the basis of past facts:- accounting
ratio are worked out on the basis of past facts and figures. Thus the
ratio cannot reflect corrent condition. Thus ratios would be significant
only if the throw lights on the probale happinings in future.

Stages of ratio analysis:The ratio analysis is a process consisting of a number of steps starting
right from assessing the fund requirement to the step of auditing by the
bank and the auditors. A firm can get the financing done from a single bank
or a consortium of bank as per the need of the firm.
1. Collection of the companys financial statements.
2. Understanding the financial statement for ratio analysis.
3. Understanding the various tools and techniques use in
analysis of the financial statements for computing ratio analysis
4. Calculation of ratios and interpretations.

COLLECTION OF THE COMPANYS LAST TWO YEARS FINANCIAL

STATEMENT

The first stage involves collection the companys last two years financial
statement, which is presents in the forms of annual reports printed by the
company.

UNDERSTANDING THE FINANCIAL STATEMENT FOR RATIO ANALYSIS

The second stage involves a study of various financial statement available
in the companys report .Well, thats why financial statement do. They show
you the money . They show you where a companys money came from,
where it went, and where it is now. The various financial statements
available are BALANCE SHEET , INCOME STATEMENT OR PROFIT AND
LOSS ACCOUNTS.
1.BALANCE SHEET- A balance sheet is often described as a
SNAPSHOT of the companys financial condition. Balance sheet also
referred to as statement of financial condition ,report on a companys
assets, liabilities and net equity as of a given point in time.
ASSETS are things that company owns and can either be sold or used by
company to make products and provide services. Assets include physical
property, such as plants, trucks,equipments and inventory.
.LIABILITIES- are accounts of money that a company owes to others. This
can include all kindsof obligation, like money borrowed from a bank,rent for
use of a building, money owned to suppliers for a material etc.
SHAREHOLDERS EQUITY is part of the companys liabilities; they are
funds owing to shareholders. In other words, it is the money that would be
left if a company sold all its assests and paid off all of its liabilities This
leftover money belongs to the shareholders, or the owners, of the
company.
INCOME STATEMENT OR PROFIT AND LOSS ACCOUNTS- An income
statement is a report that shows how much revenue a company earned
over a specific time period. The literal bottom line of the statement usually
shows the companys net earnings or losses.

UNDERSTANDING THE VARIOUS TOOLS AND TECHNIQUES USED IN

ANALYSIS OF FINANCIAL STATEMENT FOR COMPUTING RATIO
ANALYSIS
A financial statements analysis consists of the application of analytical tols
and techniques to the data in financial statement in order to drive from
them measurement and relationship that are significant and useful for
decision making. The process of financial statement analysis can be
described in various ways, depending on the objectives to be obtained.
Financial analysis can be used as preliminary screening tool in the
selection of stocks in the secondary market. It can be used as a forecasting
tool of future financial ciondition and results.
It may be used as a process of evaluation and diagnosis of mamagerial,
operating, or other problem areas. Financial analysis does not lessen the
need for judgement but rather establishes a sound and systematic basis for
its rational judgement. In analysis of financial statement, the ananlysts
make use of ratio analysis.
CALCULATION OF RATIOS AND INTETRPRETATION OF IT
The fourth stages involves calculating ratios and interpreting of it. It
facilitates understanding of companys profitability and operating efficiency.

FINANCIAL STATEMENTS:AJMER ZILA DUGDH UTPADAK SAHAKARI SNAGH LIMITED, AJMER

PROFIT & LOSS A/C FOR THE YEAR ENDED 31-3-2014

PARTICULARS

PERIOD
31.3.2013

PERIOD
31.3.2014

PARTICULARS

PERIOD
31.3.2013

PERIOD
31.3.2014

SALES ACCOUNT

OPENING STOCK
STOCK(CHEMICAL)

377212.88

828910.41

SALES OF BUTTER

1224917.13

1344971.05

STOCK(BUTTER)

118272

112574

SALES OF CHEM.

435027.89

1202529.06

STOCK(F.O.)

1867231

2876082.99

SALES OF DHAI

11336908.50

14874017.99

STOCK(GHEE)

188794652

247112613.7

SALES OF EQUIP.

3777200.46

468676.26

STOCK(MILK)

7832395

8903240

SALES OF PANEER

6969813.72

8254330.25

STOCK(CHACH&OTHER)

135994.50

127243.3

SALES OF FEED

292620008.28

300445703.62

STOCK(PKG.MATERIAL)

7513460

9006476.79

SALES OF

STOCK(SEED)

78

46084.75

FEMINEFEED

STOCK(SMP)

146614728

122477150

SALES OF MILK PRO.

2103942.35

90905208.44

STOCK(SPARES&OTHERS)

11179111.80

116528975.65

SALES OF GHEE

450962520.08

2247245.53

SALES OF MILK

1633651512.26

944801910.42

PURCHASE ACCOUNTS
OVERHEAD TO DCS

51117825.13

83485200.86

SALES OF MILK(NMG)

5609239

1882538707.7

MILK FROM DCS

1699437333.6

2782731930.0

SALES OF CHACH

18256762.54

317391519

OPERATIONAL OVERHEAD

SALES OF SCRAP MAT.

MILK FROM OTHER UNITS

15466468.22

22861689.37

SALES OF SEED

2570789.34

BUTTER GHEE &SMP

2022692

SALES OF SMP

4484703

2012740.73

PACKING MATERIAL

1100894

1250697

SALES OF STATIO.

47175450

314197

OTHER MILK PRODUCT

62689516

73631463

SALES OF CANS&LIDS

14814

126995290

RAW MATERIAL

364056

193825.42

SALES OF

286334

26458

CATTEL FEED

962407

1148582

AMCU/BMCU

22765814.45

FURNANCE OIL

286894455

294667102

SALES OF MEDICINE

1875360.96

SEED

72103174

73088422

SALES OF SMP CS1

966905.35

AMCU/BMCU

8678135

516000

SALES OF SEMAN

598052.60

2225600.38

MEDICINE/EQUIPMENTDCS

3788890

2991245

CLOSING STOCK

37189.51

FAMINE FEED

1949583

161577

STOCK (BUTTER)

168785000

EXPENSES DIRECT

88580996

STOCK(CHEMICAL)

1266843

CHEMICALS AND LAB EXP

STOCK(F.O.)

112574

1026400.20

ELECTRICITY & POWDER

3234756

2667517

STOCK(GHEE)

828910.41

FREIGHT AND CARTAGE EXP

19426376

21045138

STOCK(MILK)

2876082.99

145262.6

GENERATOR EXP

240985

168692.24

STOCK(PKG.MATE.)

247112613.70

211204.44

FUEL & OIL

379128

332557

STOCK(SEED)

8903240

340173

LABOUR EXPENSES

828494

4525987

STOCK(SMP)

9006476.79

130610715

REP.& MAINT OF MILKOTESTER

33590059

41895810

STOCK(SPARES &

46084.75

11737804

REP.& MAINT OF PLANTS

1151146

780021.67

ALL)

122477150

7767204.43

REP.& MAINT OF TANKERS

5415914

6795613

STOCK(CHACH &ALL)

22065

TANKER HIRING EXP.

719835

1403220

STOCK(MEDICINE)

81977500

TRANS. ON MILK

546010

11451526

STOCK(DCS)

TRANS. CH .ON FEED

37027807.30

42793028

TRANS. CH . ON FAMINE FEED

5407810.13

5920808

TRANS.ON FURNANCE OIL

1559270

69934.55

WATER EXPENSES

218050

111091

28575.03

CONVERSION CHARGES

2014483

1843496

819594.40

NATIONAL MPS S P DAIRY DEV

462636

1129680

GROSS PROFIT C/D

1000000

0.00

207444173.41

162124338.63

2888063535.0

4137022488.8

G.TOTAL

G.TOTAL

11652897.65

2888063535.0

13362103.13

4137022488.84

AJMER ZILA UTPADAK SAHAKARI SANGH LIMITED, AJMER

PARTICULARS

PERIOD
31.3.2013

PERIOD
31.3.2014

EXPENSES(INDIRECT)

PARTICULARS

PERIOD
31.3.2013

PERIOD
31.3.2013

GROSS PROFIT B/D

207444173.41

162124338.63

616895

733535

A.G.M/BOARD MEETING EXP

803778

1467390

INCOME REVENUE

A.H.A;TRAINING EXP.

4434451.96

3809311.08

CONTRACTOR RECOVERY

AUDIT FEES

194936

214871

INTEREST FROM BANK

2282702

9691923.61

BANK CHARGES

30324

24740.27

INT. FROM EMPLOYEE

902086

869743

BONUS/PRODUCTIVITY INC.

1311723

823878

MISC RECIPTS

975636

488017

COMPUTER EXP.

178168

218934

RENT RECOVERED FROM STAFF

230434

290912

DEPRICIATION

10635239

12604574

MILK CONVERSION CHARGES

11949903.56

1242157

INPUT EXPENSES(SPARSH)

1051152.03

SALE OF LAND(ACQUISITION)

1980841

ENTERTAINMENT EXP.

626271

688498

NATIONAL MPPPSSP DAIRY DEV

1000000

E.S.I CONTRIBUTION

75305.05

39437

FUEL & OIL

293563

265733

FUEL & OIL

264710

172239

GRAVITY/LEAVE ENC.

59158251

22335046

GROUP INSURANCE

270962

321000

INSURANCE

725492

1111650

INTEREST EXP

1109694.94

6453522

LEGAL EXP

2919146

62780

STAFF WELFARE

1407452.88

1178776

MEDICAL EXP

1319091

1931464

N.I.T EXP

525486

854630

OFFICE EXPENSES

204161

213433

P.F CONSTRIBUTION

8373793

7797918

POSTAGE&STAMPS

39788

38942

PRINTING & STATIONARY

635565

890624

RCDF CESS

15866739

8167844

RENT RATES & TAXES EXP

2727647

2552686

REPAIR & MAINT. OF BLDG.

437405

1183233

REPAIR & MAINT. OF VEHI.

185039

92456

REPAIR & MAINT OF VEHI.

95179

251292

SALES PROMOTION EXP.

1442017.09

1194311.27

SECURITY CHARGES

5297871

6664142

LEVY FOR REHABILITATION

1222367

847510

TELEPHONE EXP.

408992

439889

TELEPHONE EXP.

41895

41074

(CHAIRMAN)

825987

960041

PROPULTION EXP.(TRADE)

437188

491031

PROPULTION EXP.(MD)

72032633.15

72111327

SALARY

239110

192075

T.A & OTHER EXP.CHAIR.

881247

660528

TRAVELLING & CONV. EXP

1088180

360292

T&A OTHER EXP DIRECTOR

660059.27

891312

TRANS.ON CITY SUPPLY

15820192.72

4500000

4500000

11332181.6

11320192.72

226310240.9
7

176440626.7
4

NET PROFIT BEF. TAX PROV

INCOME TAX PROVISION
NET PROFIT AFTER IN.TAX

TOTAL

TOTAL

BALANCE SHEET
AJMER ZILA DUGDH UTAPADAK SAHAKARI SANGH LTD.AJMER

LIABILITIES

ASSETS

226310240.9
7

176440626.7
4

SHARE CAPITAL

FIXED ASSETS

141789362

169865000.9

DAIRY SOCIETIES

96278115.03

142912661

INVESTMENTS

71177760

GOVT OF RAJ

4335612

3980524

CASH IN HAND

261606

130165323

ADMISSION/MEMBERS

11861

12216

FEES

233676
BANK ACCOUNTS

7968031.06

RESERVES&SURPLUS

75273627.64

67230510.64

LOANS&ADVANCES

CAPITAL RESERVES

14358691.56

19400578.62

SECURITY DEPOSITS

2537999.10

RESERVE FUND

320470

320470

ADVANCE INCOME TAX

5048408

2815157.10

CO-OP PRACHAR FUND

436384

637896

PARTIES

3027226.95

11079619

CO-OP EDUCATION FUND

1116876

1721413

RCDF& UNIONS

928185.26

100853589.6

CO-OP RENEWAL FUND

744583

1147608

SOCIETIES

977715.29

STREANTHENING FUND

128188

128188

CREDIT INSTITUTION

4468234.05

9475673.14

DIVIDING EQU. FUND

640940

640940

ACCRUED INTEREST

294070

834104.94

KALYAN FUND

192282

192282

ADVANCE TO STAFF

6588288.84

DEVELOPMENT FUND

41018431.64

STOCKS

1401000

LOAN& ADVANCES

269446975.76

150000000

MILK & MILK PROD.

378732820.7

WORKING CAPITAL

4987600

2840700

OTHERS

I.C.D.P LOAN

34399800

24410452.89

RCDF LOAN(BMC)

569944
225572014.9
9

CURRENT LIABILITIES

2742848.42

6076385.74

DUTIES & TAXES

4500000

9000000

PROVISION(INC. TAX)

27323873

6119754

SUNDRY CREDITOR

5198879.99

9984672.58

SOCIETIES

182547

16277391.97

RCDF&UNIONS

8880661

79585522.31

OUTSTANDING LIABILITIES

12518161.35

38222342.01

PARTIES

24127279.43

26475379.3

OTHER LIABILITIES

29498664.09

32066391.09

SECURITY&EARNEST MONY

41225510

61298125.44

20151241.03

11320192.72

644621871.30

721991944.4

21520121.24

PROVISION(EXP)

RETAINTION
PROFIT
CURRENT YEAR

TOTAL

TOTAL

644621871.3

721991944.4

Classification of ratio:
The classification
depends on objective and available data

Based on the
amount in profit and loss account, balance sheet
or in both

Work out on the

basis of figures contained in the financial
statement.

Ratio as tools for

establishing true profitability and financial
positions of a company may be classified as: LIQUIDITY RATIOS
SOLVENCY RATIOS
ACTIVITY RATIOS
PROFITABILITY RATIOS

I.

LIQUIDITY RATIOS:- this ratios measures the short

term solvency. This are analysed by looking at the
amounts of current assets and current liabilities in the
balance sheet. These ratios play a key role in the analyzing the
short-term financial position of a business. Liquidity refers to a
firm's ability to meet its current financial obligations as they arise.
Commercial banks and other short-term creditors i.e. suppliers of
goods and services are generally interested in such ratios. Some of
the principal liquidity ratios are described below :

1.CURRENT RATIO
2.LIQUID RATIO
II.

SOLVENCY RATIOS:- the term solvency implies ability

of an enterprise to meet its long term indebtedness
and thus ratios convey an enterprises ability to meet
its long term . Leverage or capital structure ratios are calculated
to judge the long - term solvency ratios. Capital structure or leverage
ratio may be defined as financial ratios which highlight on the long-

term solvency of a firm as reflected in its ability to assure the longterm creditors with regards to periodic payment of interest during the
period of the loan and repayment of principal on maturity or in predetermined installments at due dates.

1.DEBT EQUITY RATIO

2.TOTAL ASSETS TO DEBT RATIO
3.PROPRIETARY RATIO
III.

ACTIVITY RATIO:-profit depends on the rate of

turnover and the net margin .activity ratio also termed
as performance or turnover ratio, judge how well the
facilities at the disposal of the enterprise are being
utilized. : The funds of creditors and owners are invested in
various assets to generate sales and profits. The better the
management of these assets , the larger the amount of sales.
Activity ratios enable the firm to know how efficiently these assets
are employed by it. These ratios indicate the speed with which
assets are being converted or turned over into sales. Hence these
ratios are also known as turnover ratios or assets management
ratios.

I. STOCK TURNOVER RATIO

II. DEBTOR TURNOVER RATIO
III. CREDITOR TURNOVER RATIO

IV. PROFITABILITY RATIO:- Efficiency in

business is measured by profitability . profit
as compare to the capital employed
indicates profitability of the enterprises. The
main objective of every business firm is to earn profit . It
is possible only when resources of the firm are
effectively utilized. The firm's ability to earn maximum
profit by the best utilization of its resources is called
profitability . Profit refers to the absolute quantity of
profit, whereas profitability refers to the ability to earn
profit .

1.RETURN ON CAPITAL EMPLOYED

2.RETURN ON SHAREHOLDERS FUND
3.FIXED ASSETS RATIO
4.CAPITAL TURNOVER RATIO
5.RETURN ON TOTAL ASSETS
6.FIXED ASSETS TURNOVER RATIO
7.CURRENT ASSETS TURNOVER RATIO
8.TOTAL ASSETS TURNOVER RATI

Analysis of study:-

1. Current

ratio: - It is a relationship between current

assets and current liabilities. It is also known as a
working capital ratio or 2:1 ratio. Current assets of a
firm represent those assets which can be, in the
ordinary course of business, converted into cash
within a period not exceeding one year. Current
liabilities means those obligations which are to be
paid within a period not exceeding one year.

Current ratio = {current assets current liabilities}

Years
Calculations

Ratios

2012-13

429116750.2
156198424.28

2.75

2013-14

419146463.42
28150964.44

1.47

Current assets=cash in hand +bank account +advance income tax

+parties RCDF&unions + societies +credit institution+ accrued interest
+stock.
Current liabilities=duties and taxes +provisions (I.TAX) +provisions
(exp) +sundry creditor.
Conclusion :- In first year the current ratio of the company is nearly to
the ideal ratio, but in second year the company having less ratio than in
comparison of fist ratio this signifies that cash blocked in current assets
is much less in second year . Therefore cash available in company in
much less and it creates problem in the operation of the company.
Quick ratio or liquid ratio: - This ratio establishes the relationship
between quick/liquid current assets and current liabilities. Ideal ratio is
1:1 Liquid or quick assets refer to all the current assets
except inventory and prepaid expenses. The exclusion of
inventory is based on the fact that it cannot be easily and
readily converted into cash .

Quick ratio or liquid ratio =

Current assets- (stock + prepaid exp) current

liabilities. Liquidity Ratio is the measure of the instant
debt paying ability of the business enterprise , hence it is
also called' quick ratio' or 'acid test ratio'. This ratio
establishes the relationship between quick / liquid current
assets and current liabilities. The formula used is

years

Calculations

ratios

2012-13 20925068.61156198424.28

1.34

2013-14 160974708.19285105964.44

0.565

Current assets=cash in hand +bank account +parties rcdf

&unions + societies +credit institution+ accrued interest.
Current liabilities = duties and taxes provisions (I.TAX)
+provisions (exp) +sundry creditor.
Liquid or quick assets refer to all the current assets
except inventory and prepaid expenses. The exclusion of
inventory is based on the fact that it cannot be easily and
readily converted into cash .

1. Debt equity ratios:-Reveals the relationship between

internal and external sources of funds of a firm. Ideal
ratio is 1:1.
Debt equity ratios:-long term debts
Equity shareholders funds
Years
Calculations
ratios
2012-13

274434575.76193837630.23

1.4158

2013-14

187240500238325287.26

0.78565

Long term debts:-working capital +I.C.D.P loan + RCDF

loan.
Equity shareholders funds:-share capital+ reserves
&surplus.
This ratio is also known as External-Internal Equity Ratio
Expressed as a formula :
External equities refer to the total outside liabilities, like working
capital, loans from bank in outside liabilities is that these shortterm loans are renewed from year to year (barring exceptional
circumstances ) more or less permanently. Moreover , a fixed
amount of loan, by and large , is always in use and available
with the enterprise on a long-term basis. Apart from this shortterm loans are also not cost free.

2. Total assets to debt ratio:- It establish a relationship

between total assets and long term debts.
Total assets to debt ratio
= Total assets long term debts
Years

calculations

ratios

2012-13

644621871.30274434575.76

2.35

2013-14

721991944.42187240500

3.86

long term debts:-working capital + i.c.d.p loan + rcdf

loan.
Total assets:- fixed assets+ investments+ cash in
hand +bank accounts+ loans and advances+stocks.
This ratio measures the proportion of the total assets
provided by creditors (long - term as well as short - term) of
the firm i.e. what part of asset is being financed from loans .

Stock turnover ratio: - It Establish a relationship between cost of

sales and average inventory. There exists direct relationship
between inventory and profit in business. Therefore, a firm

must have reasonable stock in comparison to sales . The

quantity of stock should be sufficient to meet the demand of
the business, but it should not be to large to indicate
unnecessary locking-up of capital in stock, danger of stockitems becoming obsolete and resulting in waste of passing
time.

3.
Stock turnover ratio
=cost of goods sold average inventory
years

Calculations

2012-13

2277476088.05383773204.385

Ratio
s
5.934

2013-14

3727806013.98325117704.91

11.46

cost of goods sold=opening stock +purchases+direct exp.closing stock.

Average stock= opening stock +closing stock
2

4. Debtor turnover ratios:- It establish a relationship

between net credit sales and average receivables of the
year.
=net credit sales average receivables.
years
Calculations
Ratios
2012-13

2484920261.4613238665045 .188

2013-14

3889930352.6165076509.05

5.98

Note : all sales are treated credit sales.

Average a/c receivable=opening debtors+closing debtors/2

5. Creditor turnover ratio: - It establishes relationship

between net credit purchase for the year and total
payable.
= net credit purchase total and average payable.
years
2012-13
2013-14

Calculations
2204552737.03119049259.26
5
3427331421.71192770763.78

Ratios
18.51
17.78

Note: all purchase is treated credit purchase.

Average payables = opening creditors+ closing creditors/2

8. Total assets to debt ratio:-the ratio expresses the

relationship between cost of goods sold or net sales and
total assets of a firm.
Total assets to debt ratio=
cost of goods soldtotal assets
YEAR

CALCULATION

RATIO

2012-13

2277476088.05644621871.3
0
3727806013.98721991944.4
2

3.53

2013-14

5.16

cost of goods sold=opening stock +purchases+direct exp.closing stock.

Total assets:- fixed assets+ investments+ cash in
hand +bank accounts+ loans and advances+stocks.

9. Total assets to debt ratio:-the ratio expresses the

relationship between fixed assets and cost of goods sold.
Total assets to debt ratio=
cost of goods soldfixed assets
YEAR

CALCULATION

RATIO

2012-13

2277476088.05141789362

.16

2013-14

3727806013.98169865000.9
0

21.9

cost of goods sold=opening stock +purchases+direct exp.closing stock.

10 .Current assets turnover ratio:-this ratio expresses the

relationship between current assets and cost of goods sold. It is
calculated using the following formula:

Current assets turnover ratio:cost of goods soldcurrent assets

YEAR

CALCULATION

RATIO

2012-13

2277476088.05429116750.
2

5.30

2013-14

3727806013.9841914646.4
2

88.92

cost of goods sold=opening stock +purchases+direct exp.closing stock.

Current assets=cash in hand +bank account +parties

rcdf &unions + societies +credit institution+ accrued
interest.

This ratio reflects the efficiency and capacity of working capital.

It is a very useful technique for non-facturing units or those
manufacturing units requiring lesser working capital. On the
basis of this ratio, efficiency or inefficiency of current assets and
over or under in the firm is examined.

11. Capital turnover ratio:- its establishes the relationship

between cost of goods sold and capital employed.
Capital turnover ratio=
Cost of goods sold capital employed
:- This ratio establishes the relationship between net sales or
cost of goods sold and capital employed. Capital employed is
calculated either by deducting current liabilities from total
assets or by adding long term loans in shareholders' funds
( share capital + reserves and surplus ). Fictitious and nontrading assets are excluded from assets. IT is calculated using
the following formulae:
The Efficiency and effectiveness of the operations are judged
by comparing the sales or cost of sales with the amount of
capital employed in the business and not with assets held in
the business. Therefore , this ratio is a better measurement of
efficient use of capital employed .
A higher ratio indicates the quicker rotation of capital to
generate higher sales which leads to higher profititability. On

the contrary a lower ratio will indicate that either the capital is
lying idle or the capital is not being used infinity to generate
enough sales.

YEAR

CALCULATION

RATIO

2012-13

2277476088.05468272205.99

4.86

2013-14

3727806013.98425565787.26

8.76

cost of goods sold=opening stock +purchases+direct exp.closing stock.

Capital employed= share capital+reserve and surplus+long
term debt

12 .Return on shareholders funds:-the ratio expresses the

percentage relationship between net profit(after interest and
tax )and shareholders funds.
Return on shareholders funds:- This ratio expresses the
percentage relationship between net profit (after interest
and tax ) and net worth or shareholders funds. This is also
known as return on proprietors funds ' . It is used to
ascertain the rate of return on resources provided by the
shareholders. The ratio is calculated by using the following
formulae :

net profit shareholders funds100

YEAR

CALCULATION

RATIO

2012-13

11332181.60193837630.2310
0
11320192.72238325287.2610
0

5.84

2013-14

4.74

Equity share holders funds :-share capital+ reserves &surplus

Net Worth or shareholders funds include preference share
capital as well as equity shareholder fund which in turn
comprises equity share capital , share premium and reserves
and surplus after accumulated losses and fictitious assets ).

13. Return on capital employed:-this ratio expresses the relationship

between profit and capital employed. The primary objective of
making investment in any business is to obtain adequate
return on capital invested . Therefore , to measure the overall
profitability of the firm , it is essential to compare profit with
capital employed.
It measures how efficiently the capital employed in the
business is being used . In other words , it is also a measure
of the earning power of the net assets of the business is
being used . Even the performance of two dissimilar firms
may be compared with the help of this ratio . Furthermore,
the ratio can be used to judge the borrowing policy of the
enterprise.

Return on capital employed:Net profitcapital employed100

YEAR

CALCULATION

RATIO

2012-13

15820192.72 100
425565787.26

36.94

2013-14

15832181.60
468272205.99100

3.38

Capital employed= share capital+reserve and surplus+long

term debt

14.Return on total assets:-its establishes the relationship between

net profit and total asssets. Profitability can also be measured by
establishing relationship between net profit and total assets.
The ratio is computed by dividing the net profit after tax by
total funds invested or total assets . Total assets means all
fixed assets , current assets and non-trading investments .

Return on total assets=

Net profit after tax total assets100

YEAR

CALCULATION

RATIO

2012-13

11332181.60100
644621871.30
11320192.72100
721991944.42

1.75

2013-14

1.56

Total assets:- fixed assets+ investments+ cash in

hand +bank accounts+ loans and advances+stocks.

15.Fixed assets ratio:-it expresses the relationship between

fixed assets and capital employed of the firm.
Fixed assets ratio=
Fixed assets capital employed

YEAR

CALCULATION

RATIO

2012-13

141789362
468272205.99

.30

2013-14

169865000.90
425565787.26

.399

Capital employed= share capital+reserve and surplus+long

term deb

CONCLUSION

(Financial position of Saras Dairy)

Financial analysis is a process of identifying strength and
weaknesses of the firm by properly establishing relationship

between the items of the balance sheet and profit and loss
accounts.
Management creditors, investors and others to make judgment
about the operating performance and financial position of the
use the firm use the information contained in these statements.
The Ajmer Zila Dugdh Utpadak Sahkari Sangh LTD. Ajmer
is an ISO:9001-2000 and HACCP: 15000 certified
organization established in 1972. It is a cooperative sector
industry holding its
Members throughout the Ajmer district. Dairy Cooperative
societies (DCS) collect milk from milk producers at village
level. The milk collected at DCS is then transported to the
Diary plants where it is processed and converted to various
products as per market demand. The average milk collection
by the Sangh is approximately 1,23,000 liters per day per day.
It is a seasonal industry having Flush season(peak
collection)and lean season (down collection). The surplus
milk, if any, is converted to milk powder and stored which is
used during lea time. The Sangh has adopted Quality & Food
Safety Policy narrated as below.

Swot analysis
Strengths: The product are very pure.
The product are very hygienic.
The plant is ISO 9001:2000 and HACCP certificate

Weaknesses: law availability of raw milk.

Dependency on farmers.
Reduced milk supply in summers.
Opportunities: milk is an essential commodity which everybody uses
there is no packed in alvar.
Threats: milk can be produced not manufactured.
There is always a possibility of a compitator entering
the market.
Competition in milk procuremet.
After consulting all these things we can conclude that all the
system have some sequences and this sequences shold be
followed. It shold be remember that if there is any type
ofdeviation in any system, it will effect on whole organization.

BIBLIOGRAPHY
REFERANCE:-

 Guidance from faculty and

corporate guide.
Reference to companies
financial statement.
Reference to AZDUSS
LTD.website
Books M.R Aggarval
Reference to various magazines