CHAPTER I

1.1INTRODUCTION AND DESIGN OF THE STUDY

This study was about AN ORGANISATIONAL STUDY AND STUDY ON
FINANCIAL STATEMENT ANALYSIS WITH SPECIAL REFERENCE TO SAKTHI
GANESH TEXTILES (P) LTD ERODE. The main objective of study is to find the
financial strength of sakthi Ganesh.
An organization wishing to understand, and measure how satisfied their customers are
with the product and service they receive from it. The summer project report aims to create
awareness of about the external and internal environment of business organization among the
students. The summer project report contains all the functional areas at the organization and its
functions.
The company mainly concentrates on the satisfaction of the customers. The company
also assumes to endow our clients with utmost satisfaction by offering them quality products.
The firm essentially frames its production, purchase, marketing, finance and human resource
plans around the concepts of management and thus supplying the products to their customers.
Customer satisfaction is an integrated process through which companies build strong relationship
with their customers and create value for their customers and for themselves.
Another interesting sociological factor that is worthy of note is that as soon as people in
Coimbatore started textile mills, they sent their sons or nephews to great Britais to study
technology. There young men returned and replaced the highly paid managers, while mills in
other centers were perhaps more efficient form a commercial point of view, Coimbatore mills
have attached greater importance to technological efficiency.
MEANING OF FINANCIAL STATEMENT:
A financial statement (or financial report) is a formal record of the financial activities
of a business, person, or other entity.

Relevant financial information is presented in a structured manner and in a form easy to

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

Owners and managers require financial statements to make important business decisions
that affect its continued operations. Financial analysis is then performed on these
statements to provide management with a more detailed understanding of the figures.
These statements are also used as part of management's annual report to the stockholders.

Employees also need these reports in making collective bargaining agreements (CBA)
with the management, in the case of labor unions or for individuals in discussing their
compensation, promotion and rankings.

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

Financial institutions (banks and other lending companies) use them to decide whether to
grant a company with fresh working capital or extend debt securities (such as a long-term
bank loan or debentures) to finance expansion and other significant expenditures.
2

DEFINITION AND TYPES OF FINANCIAL STATEMENT:

Financial Statements represent a formal record of the financial activities of an entity.
These are written reports that quantify the financial strength, performance and liquidity of a
company. Financial Statements reflect the financial effects of business transactions and events on
the entity.
TYPES OF SINANCIAL STATEMENTS:
1. Statement of Financial Position:
Statement of Financial Position, also known as the Balance Sheet, presents the financial position
of an entity at a given date. It is comprised of the following three elements

Assets: Something a business owns or controls (e.g. cash, inventory, plant and machinery,
etc.)

Liabilities: Something a business owes to someone (e.g. creditors, bank loans, etc.)

Equity: What the business owes to its owners. This represents the amount of capital that
remains in the business after its assets are used to pay off its outstanding liabilities.
Equity therefore represents the difference between the assets and liabilities.

2. Income Statement:
Income Statement, also known as the Profit and Loss Statement, reports the company's financial
performance in terms of net profit or loss over a specified period. Income Statement is composed
of the following two elements:

Income: What the business has earned over a period (e.g. sales revenue, dividend income,
etc.)

Expense: The cost incurred by the business over a period (e.g. salaries and wages,
depreciation, rental charges, etc.)
3

Net profit or loss is arrived by deducting expenses from income.

3. Cash Flow Statement:
Cash Flow Statement presents the movement in cash and bank balances over a period. The
movement in cash flows is classified into the following segments:

Operating Activities: Represents the cash flow from primary activities of a business.

Investing Activities: Represents cash flow from the purchase and sale of assets other than
inventories (e.g. purchase of a factory plant)

Financing Activities: Represents cash flow generated or spent on raising and repaying
share capital and debt together with the payments of interest and dividends.

4. Statement of Changes in Equity:

Statement of Changes in Equity, also known as the Statement of Retained Earnings, details the
movement in owners' equity over a period. The movement in owners' equity is derived from the
following components:

Net Profit or loss during the period as reported in the income statement

Share capital issued or repaid during the period

Dividend payments

Gains or losses recognized directly in equity (e.g. revaluation surpluses)

Effects of a change in accounting policy or correction of accounting error

1.2ABOUT THE INDUSTRY

Indian Apparel and Textile Industry
Introduction
The apparel and textile industry occupies a unique and important place in India. One of
the earliest industries to come into existence in the country, the sector accounts for 14% of the
total Industrial production, conduces to about 30% of the total exports and is the second largest
employment creator after agriculture.
The apparel and textile industry caters to one of the most basic requirements of people
and holds importance; maintaining the prolonged growth for improved quality of life. The sector
has a unique position as a self-reliant industry, from the production of raw materials to the
delivery of end products, with considerable value-addition at every stage of processing. Over the
years, the sector has proved to be a major contributor to the nations' economy.
Its immense potential for generation of employment opportunities in the industrial,
agricultural, organized and decentralized sectors & rural and urban areas, especially for women
and the disadvantaged is noteworthy.

ABOVE FIGURE SHOWS SEGMENTS IN INDIAN APPERRAL INDUSTRY

PROCESS OF THE TEXTILE INDUSTRY:

The present Status of Apparels In The world:

The Indian apparel industry is estimated to be worth Rs. 1,876 billion in FY11 and is
expected to grow at a CAGR of 8.7 per cent till FY16. The growth would primarily be driven by
the surge in demand for readymade apparels in rural areas, rising income levels and youth
population and increasing preference for branded apparels.

Global Apparel Trade : India vis--vis competitors in 2007

Trade in US$ Bn

Avg Growth rate

% Share

World
345

12

100

10.6

10

2.9

9.7

2.8

29

2.1

Bangladesh
India
Vietnam
7.2
Indian apparel industry is highly

fragmented in nature. Due to the low entry

barriers, numerous players have entered the

industry

Indias apparel exports grew at a

CAGR of 6 per cent from INR 382 billion in

FY06 to INR 511 billion in FY11. The growth

in exports can be attributed to shifting of the

apparel

the

developed countries like the US and the EU to

the low cost countries like China, Vietnam,

India, Bangladesh and many others. Multi

Fiber Agreement phase-out at the end of 2004

also helped India to increase its exports.

manufacturing

To

remain

base

competitive

from

in

the

international market, Indian apparel industry

needs to build up a strong weaving and processing link so as to provide support to the apparel
manufacturers and also set up large units for reaping the benefits of economies of scale.
Apparel industrys profitability is mainly influenced by the raw material and input prices.
Domestic players enjoy better margins as against the exporters. The raw material prices for

apparel players have been on rise in the recent past due to the soaring cotton and crude oil prices.
The government has announced various schemes to encourage the investments in the textile
Industry like National Textile Policy (NTP), Scheme for Integrated Textile Parks (SITP),
Technology Up gradation Fund Scheme (TUFS), Export Promotion Capital Goods (EPCG), Duty
Entitlement Pass Book Scheme (DEPB) etc. The government has also allowed 100% FDI in the
textile sector through automatic route and up to 51% FDI in the retail trade of single brand
products (with prior government approval)
TEXTILE INDUSTRY IN INDIA
The Textile industry in India traditionally, after agriculture, is the only industry that has
generated huge employment for both skilled and unskilled labor in textiles. The textile industry
continues to be the second largest employment generating sector in India. It offers direct
employment to over 35 million in the country. The share of textiles in total exports was 11.04%
during AprilJuly 2010, as per the Ministry of Textiles. During 2009-2010, Indian textiles
industry was pegged at US$55 billion, 64% of which services domestic demand. In 2010, there
were 2,500 textile weaving factories and 4,135 textile finishing factories in all of India.
HISTORY OF TEXTILE INDUSTRY
The archaeological surveys and studies have found that the people of Harappan
civilization knew weaving and the spinning of cotton four thousand years ago. Reference to
weaving and spinning materials is found in the Vedic Literature also.
There was textile trade in India during the early centuries. A block printed and resist-dyed
fabrics, whose origin is from Gujarat is found in tombs of Foster, Egypt. This proves that Indian
export of cotton textiles to the Egypt or the Nile Civilization in medieval times were to a large
extent. Large quantity of north Indian silk were traded through the silk route in China to the
western countries. The Indian silk was often exchanged with the western countries for their
spices in the barter system. During the late 17th and 18th century there were large export of the
Indian cotton to the western countries to meet the need of the European industries during
industrial revolution. Consequently there was development of nationalist movement like the
famous Swadeshi movement which was headed by the Aurobindo Ghosh.

There was also export of Indian silk, Muslin cloth of Bengal, Bihar and Orissa to other countries
by the East Indian Company. Bhilwara is known as textile city.
PRODUCTION PROCESS
India is the second largest producer of fiber in the world and the major fiber produced is
cotton. Other fibers produced in India include silk, jute, wool, and man-made fibers. 60% of the
Indian

textile

Industry

is

cotton

based.

The strong domestic demand and the revival of the Economic markets by 2009 have led to huge
growth of the Indian textile industry. In December 2010, the domestic cotton price was up by
50% as compared to the December 2009 prices. The causes behind high cotton price are due to
the floods in Pakistan and China. India projected a high production of textile (325 lakh bales for
2010 -11).[5] There has been increase in India's share of global textile trading to seven percent in
five years.[5] The rising prices are the major concern of the domestic producers of the country.

Man Made Fibers: These include manufacturing of clothes using fiber or filament
synthetic yarns. It is produced in the large power loom factories. They account for the
largest sector of the textile production in India. This sector has a share of 62% of the
India's total production and provides employment to about 4.8 million people.[6]

The Cotton Sector: It is the second most developed sector in the Indian Textile industries.
It provides employment to huge amount of people but its productions and employment is
seasonal depending upon the seasonal nature of the production.

The Handloom Sector: It is well developed and is mainly dependent on the SHGs for
their funds. Its market share is 13%.[6]Of the total cloth produced in India.

The Woolen Sector: India is the 7th largest producer.[6]Of the wool in the world. India
also produces 1.8% of the world's total wool.

The Jute Sector: The jute or the golden fiber in India is mainly produced in the Eastern
states of India like Assam and West Bengal. India is the largest producer of jute in the
world.
9

The Sericulture and Silk Sector: India is the 2nd largest producer of silk in the world.
India produces 18% of the world's total silk. Mulberry, Eri, Tasar, and Muga are the main
types of silk produced in the country. It is a labor-intensive sector.

IMPORTS AND EXPORTS

Export
In economics, an export is any good or commodity, transported from one country to another
country in a legitimate fashion, typically for use in trade. Export is an important part of
international

trade.

Its

counterpart

is

import.

Export goods or services are provided to foreign consumers by domestic producers. Export of
commercial quantities of goods normally requires involvement of the Customs authorities in both
the

country

of

export

and

the

country

of

import.

The advent of small trades over the internet such as through Amazon, e-Bay and the like, have
largely by-passed the involvement of Customs in many countries due to the low individual
values of these trades. Nonetheless these small exports are still subject to legal restrictions
applied by the country of export, particularly in respect of strategic export limitations.
Import
In economics, an import is any good or commodity, brought into one country from another
country in a legitimate fashion, typically for use in trade. Import goods or services are provided
to domestic consumers by foreign producers. Import of commercial quantities of goods normally
requires involvement of the Customs authorities in both the country of import and the country of
export.
The Textile industry is a term used for industries primarily concerned with the design or
manufacture of clothing as well as the distribution and use of textiles .The textile industry
10

occupies a unique place in our country. One of the earliest to come into existence in India, it
accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports
and

is

the

second

largest

employment

generator

after

agriculture.

The textile industry fulfills a pivotal role in the Indian economy. It is a major foreign exchange
earner and, after agriculture, it is the largest employer with a total workforce of 35 mn. In 2005
textiles and garments accounted for about 14 per cent of industrial production and 16 per cent of
export earnings. The industry covers a wide range of activities. These include the production of
natural raw materials such as cotton, jute, silk and wool, as well as synthetic filament and spun
yarn. In addition, an extensive range of finished products are also made. The Indian textile
industry accounts for about 23 per cent of the worlds spindle capacity, making it the second
highest after China, and around six per cent of global rotor capacity. Also, it has the highest loom
capacityincluding hand loomswith a 61 per cent share. India accounts for about 12 per cent
of the worlds production of textile fibers and yarns. This includes jute, of which it is the largest
producer.
The Vision
Although low growth scenario of 6% annual growth rate is likely for the next 2 years, C
vision is based on sustained growth of top five apparel suppliers. Based on the past export trends
of India and feasibility study and assuming that the world apparel market grows moderately at
8%, AEPC fixed the target for apparel export
1.3 ABOUT COMPANY PFOFILE
SAKTHI GANESH are an Export House of Knitted Garments, Exporting
Garments for the last 15 years, located in erode the cluster of Knitted
Garment Industry. The company is a partnership firm established on 1993.
The company sets the own standards par with the best companies in India
on.
The company exports knit wears include T-shirt, Polos, Sweat shirts,
Woven shirts , leggings, Pajamas, Bath Line & Bath Ropes products to Babies,
Kids, Ladies

& Gents. For details visit our Gallery Page. The

Capability to cater the needs of esteemed Buyers, the infrastructure is filled

11

with all modern machineries and equipment to give high degree of accuracy
and the capacity to produce 1.5 Lakes to 2 Lakes garments depends upon
styles and shades.
A portion of the Fabric also being exported to the garment manufacture in
Bangladesh, Egypt & srilanka.
QUALITY POLICY
The company is more conscious about its quality certified by OEKO
TEX and our efficient and well equipped QC team is our back bone. It follows
all the stringent procedures and test applicable for all international
standards. The centralized QC team with team of highly efficient and follow
the standards right from yarn to packing, to see nothing is missed.
The company follows Systemized approach of con con and JIT and
all

TQM

policies

make

the

QC

team

MD

is

decidedly

professional.

The quality programmed starts right from yarn to packing .On every
step of production the company concentrates on quality, to make sure all the

FINANCE

MERCHANDISING

parameters are followed. The QC team is managed by the QC manager,

under his strict guidance to follow all the methods to fulfill international

GENERAL MANAGER

standards.
PRODUCTS

MANAGER

The company manufactures Knit wears include

T-shirt
Polos
Sweat Shirts
Woven Shirts

PRODUCTION
MANAGER

QUALITY
CONTROL
MANAGER

WAREHOUSE
MANAGER

HR
MANAGER

SAMPLING

INFRASTRUCTURE
modern processing
Machineries
to prepare our
follow-upsand equipmentsACCOUNTANT
productionThe
unit1firm has
qualityallcontroller
self to meet the changes. Well trained work force efficient staffs with

MANAGER

determined and analytical skills to give the best services. Its fabric and
knitting dept,. Have all latest Machineries imported from Germany, Italy, and

production unit2

12

CASHIER

Japan

to

produce

right

quality

fabrics

for

our

production.

It work on 100% cotton and blended fabrics and our knitting division
and Blended fabrics and we knit Jerseys, Interlocks, Engg., stripes, Ribs,
Fleece, Pique, Pointelle, Mini / Full jacquards, Micro thermals, Ottomans,
French terry, etc, and if needed we import fabrics.
It have fully fledged knitting printing embroidery garmenting
production centers and the soft flow dyeing m/aces supported by range of
other m/ace. And fabrics are processed with Balloon paddlers and Imported
relax

dryers

to

remove

moisture

in

softest

way.

The factories are covered with all gorgeous greenery grass and trees to
preserve nature and ecological balance, which is been appreciated by our
esteemed buyers andthe production capacity is to produce garments 1.5
lakes

to

lakes

pieces

per

month.

The Garmenting divisions have all latest machineries and are well
equipped to produce any bountiful quantity of orders in time with the help of
our committed work force guided by the production managers. They adopt
one to one approach for each order using right persons for the required finish
and quality is achieved with the guidance of QC team.
CLIENTS
1.
2.
3.
4.

Next
Wall Mart
Basic London
Home Basic

EMPLOYEES
Part time employees
Seasonal employees
Production employees

50
20
30
13

TOTAL

100

SWOT ANALYSIS
Strength
Experienced management
Efficient payables management
Diversified customer base

Weakness
Cut throat competition
Inconsistency in collection days
Low short term solvency ratios
Opportunities
Growing fashion consciousness globally will drive the demand for subjects products
Mass market : extending availability of products to broad market

14

1.4 NEED FOR THE STUDY

There some questions, which arise from the study of financial statements. These could be
is companys profitability adequate? Why is a profit low in spite of increased sales? Why is
there liquidity problem though profitability is good? Why no reason for changes in assets,
liabilities and equity between two dates? Why no dividends are paid though there are good
profits? From where have come cash flows and how they are applied? these and many other
questions need answers, which can be possible when the financial statements are suitably
analyzed
The financial statement analysis deals with meaningful interpretation of financial data
available in financial statements to serve specific purpose of organizations of such data for their
decision making this involves identifying the purpose and selecting suitable means of analysis.
Financial statement analysis is essentially purposive.

15

1.5 OBJECTIVES OF THE STUDY

Primary Objective:

To analyze the working capital management of the company and to know about the
profitability of the firm.

Secondary Objective:

To study the various sources and application of funds of the company.

To study the organizational function of the company.

To evaluate the performance of Inventory, receivables and cash management of the

company.

To examine the liquidity position of the company.

16

1.6 SCOPE OF THE STUDY:

In order to find the working capital analysis for different period and its trend of sakthi
Ganesh from the annual report has been considered. The study given a clear cut picture regarding
working capital of the company.

The present study attempts to obtain a general view of the working capital analysis of
the company.

The main attempts are made to know the financial position and strength of the
company.

The company to understand its own position over time.

17

1.7 LIMITATION OF THE STUDY:

The study covers only five accounting year started from 2008 to 2013.

The working capital analysis is based on the published balance sheet of the company.

The limitations of ratios and comparative balance sheet are in maid.

The study time duration is not enough.

Since this analysis is based on the annual reports, the manipulations in it will affect the
study.

18

CHAPTER II
REVIEW OF LITERATURE
DuPont analysis, a common form of financial statement analysis, decomposes
return on net operating assets into two multiplicative components: profit margin and asset
turnover. These two accounting ratios measure different constructs and, accordingly, have
different properties. Prior research has found that a change in asset turnover is positively related
to future changes in earnings. This paper comprehensively explores the DuPont components and
contributes to the literature along three dimensions. First, the paper contributes to the financial
statement analysis literature and finds that the information in the accounting signal is in fact
incremental to accounting signals studied in prior research in predicting future information by
examining immediate and future earnings. Second, it contributes to literature on the stock
markets use of accounting by investors. Finally, it adds to the literature on analysts processing
of accounting information by again testing immediate and delayed response of analysts through
contemporaneous forecast revisions as well as future forecast errors.
Discounted cash flow, method of comparable, and fundamental analysis typically
yield discrepant valuation estimates. Moreover, the valuation estimates typically disagree with
market price. Can one form a superior valuation estimates by averaging over the individual
estimates, including market price? This article suggests a Bayesian frame work justifies the
common practice of averaging over several estimates to arrive at a final point estimate.

19

The financial statement analysis skills of internal auditors. The author argues that
in order to formulate important business decisions, manager increasingly turn to internal auditor
for information. Financial statement analysis, he claims, is a major tool for delivering such
information because it provides an assessment of the firms viability, stability, and profitability.
He suggests that internal auditors should develop or update their financial statement analysis and
fuse these skills into their engagements.
We provides evidence that, conditional on users performing the analysis necessary
to transform the financial statements to appear as if disclosed information had been recognized,
that information may affect users judgments more than it would have if it had been recognized
initially. Our experiments are set in the context of constructive capitalized of operating leases.
The first experiment manipulates three variables that we hypothesize will
contribute to this effect: choice to use transformed financial statements, effort spends on the
transformation process, reconciliation of pre- and post- transformation number. We provide
evidence that, in the constructive-capitalization setting we operationalize, information has a
greater effect on judgments when effort was expended to obtain the information and the
information is displayed in a reconciled format. The second experiment focuses on the effort
effect and replicated it with additional controls. These results have implications for standardsetters users who transform financial statements as part of their analysis. This combination if
found to improve the default prediction compared with financial statements alone.
Albrecht, W. S. and C. C. Albrecht (2003)

In financial statement, analysis are

accumulated by departments, operations, or processes. The work performed on each unit is

standardized, or uniform where a continuous mass production or assembly operation is involved.
For example, process costing is used by companies that produce appliances, alcoholic beverages,
tires, sugar, breakfast cereals, leather, paint, coal, textiles, lumber, candy, coke, plastics, rubber,
cigarettes, shoes, typewriters, cement, gasoline, steel, baby foods, flour, glass, men's suits,
pharmaceuticals and automobiles. Process costing is also used in meat packing and for public
utility services such as water, gas and electricity. Chapter 5 illustrates a cost accounting system
that includes normal historical costing as the basic cost system, full absorption costing as the
inventory valuation method and process costing as the cost accumulation method.
E harris (2008) This book covers the more complex areas of the costing of processes and
operations. It explains how to determine the average cost per unit in process costing in a simple
20

step-by-step approach, starting with normal losses with no scrap value and working through the
treatment of scrap values, abnormal losses and gains and the sometimes confusing areas of
opening and closing work in progress. The topic of joint product costing is explained covering
both the different methods which can be used to value stock for determining the profit for the
period, and the type of information which is required for a further processing decision. The book
also covers the distinction between joint products and by products and the accounting treatment
required by these types of products.
Randika Lalith Abeysinghe (2009) Process costing / continuous operational costing is
defined in as "The costing method applicable where goods or services result from a sequence of
continuous or repetitive operations or process. Costs are averaged over the units produced during
the period."It is used where it is not possible to identify separate units of production, or jobs,
usually because of the continuous nature of the production processes involved.
The features of process costing which make it different from specific order costing
methods such as job costing or batch costing are as follows.

The output of one process is the input to subsequent process unit a completed

product is produced.

The continuous nature of production in may processes means that there will

usually be closing work in progress which must be valued. In process costing it is not possible to
build up cost records of the cost of each individual unit of output because production in progress
is an indistinguishable homogeneous mass.

There is often a loss in process due to spoilage, wastage, evaporation and so on.

Output from production may be a single product, but there may also be a byproduct (or by
products) and joint products.
The overhead expenses are generally expended over all the processes involved in
production. These are to be apportioned over the various processes in an amicable manner.

21

CHAPTER III
RESEARCH METHODLOGY
3.1 RESEARCH
Research is defined as a systematized effort to gain knowledge. Research comprises
defining and redefining problems, formulating hypothesis or suggest solutions, collecting,
organizing and evaluating data , making determine whether they fit the formulating hypothesis,
collection the fact the data, analyzing the facts the reaching certain generalization for some
theoretical formulation.
A research methodology forms the frame work of the entire research process. This
includes the necessary information about materials, techniques for the collection of data
appropriate to particular problem, statistics, questionnaires and controlled experimentation and in
recording evidence sorting it out and interpreting it.

3.2 RESEARCH DESIGN

Descriptive research studies are those studies which are concerned with describing the
characteristics of a particular individual, or of a group. We use descriptive research method for
our research work.
3.3 SAMPLE DESIGN
22

Sample design refers to the technique or the procedure the research would adopt in
selecting for the sample.
3.4 COLLECTION OF DATA
The study based on both primary data and secondary data. Primary data is collected from
account officers. Secondary data is obtained from annual report and other published documents
of the company.
Secondary data

3.5TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS

RATIO ANALYSIS

Current ratio
Quick ratio
Cash position ratio
Solvency ratio
Inventory turnover ratio
Debtor turnover ratio
Debtor collection period
Creditor turnover ratio
Creditor collection period
Working capital analysis
Sales to net working capital ratio
Current liabilities to net worth
Net profit ratio
COMPARATIVE STATEMENT
3.6 DATA COLLECTION METHOD

Annual report
23

Internal report

3.7 Period of the Study

2008 to 2013

CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
FINANCIAL ANALYSIS:
Financial analysis is the analysis of the statement of the company to assess its financial
health and soundness of its management. Financial statement analysis involves a study of the
financial statement of a company to ascertain its prevailing state of affair and the reason thereof.
Such a study would enable the public and the investors to ascertain whether one company is
more profitability then the other and also to state the causes and factors that are probably
responsible.

Analytical Designs:o
o
o
o
o

Ratio Analysis
Mean
Standard deviation
Coefficient variation
Comparative balance sheet

RATIO ANALYSIS:
Ratio analysis is a technique of analysis and interpretation of financial statements. It is
the process of establishing and interpreting various ratios for helping in making certain decisions
in these ratios.

24

A ratio indicates a quantitative relationship, which can be in term used to make a

judgment.
Current ratio
Quick ratio
Cash position ratio
Solvency ratio
Inventory turnover ratio
Debtor turnover ratio
Debtor collection period
Creditor turnover ratio
Creditor collection period
Working capital analysis
Sales to net working capital ratio
Current liabilities to net worth
Net profit ratio
Comparative balance sheet
MEANING OF MEAN:
In statistics, the mean is the mathematical average of a set of numbers. The average is
calculated by adding up two or more scores and dividing the total by the number of scores.

Mean = X
N
MEANING OF STANDARD DEVIATION:Standard deviation is a number that tells you approximately how far the values in a data
set deviate from the mean (the average). The larger the standard deviation, the larger the
deviation. The smaller the standard deviation, the smaller the deviation. If all of the values are
equal, the standard deviation is equal to zero.

25

(X- X) 2
MEANING OF COFFICIENT VARIATION:A statistical measure of the dispersion of data points in a data series around the mean.

The coefficient of variation represents the ratio of the standard deviation to the mean, and
it is a useful statistic for comparing the degree of variation from one data series to another, even
if the means are drastically different from each other

4.1 CURRENT RATIO

The ratio of current assets to current liabilities is called current ratio. In order to
measure the short term liquidity or solvency of the concern, comparison of current assets and
current liabilities is inevitable. Current ratio in the case liability of a concern to meet its current
obligations as and well they are due for payment
Current Ratio = Current asset / Current liabilities
TABLE NO 4.1 SHOWING CURRENT RATIO
Current Asset

Current Liability

Current Ratio

(in Rs)

(in Rs)

(In Rs)

2007-08

18,67,000

15,88,000

1.17

2009-10

36,40,000

19,95,000

1.82

2010-11

31,75,000

28,88,000

1.09

2011-12

51,94,500

43,79,000

1.18

2012-13

95,79,500

79,00,000

1.21

YEAR

26

MEAN
1.29
Source: Secondary data

SD
0.4

CV
0.12

Interpretation:Generally current ratio should be 2:1 but as per our calculation in 2009-10 it was 1.826, it
meanscompany has 1.826 rupees current assets against current liability on rupees 1. Company
hasfewer current assets than current claims against them. In 2012 13 companys current ratio
is1.215 which is not satisfactory. Its short-term solvency is threatened.

CURRENT RATIO
2
1.8
1.6
1.4
1.2

Current Ratio

1
0.8
0.6
0.4
0.2
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.1 SHOWING CURRENT RATIO

27

4.2 QUICK RATIO

The term quick assets refers to current assets which can be converted into cash
immediatelyor at a short notice without diminution of value. Included in this category of current
assets are(1) cash and bank balance; (2) short term marketable securities and (3)
debtors/receivables.Thus, the current assets which are excluded are: prepaid expenses and
inventory.
Quick Ratio = Liquid Assets / Liquid Liabilities
Liquid Assert = Current Assert - Stock - Prepaid Expenses
TABLE NO 4.2SHOWING QUICK RATIO
YEARS

QUICK ASSERT
(In Rs)

CURRENT

QUICK ASSERT

ASSERT

RATIO
(In Rs)
0.85

2007-08

15,97,000

(In Rs)
18,67,000

2009-10

15,97,000

36,40,000

0.43

2010-11

15,97,000

31,75,000

0.50

2011-12

15,97,000

51,94,500

0.30

2012-13

15,97,000

95,79,500

0.16

28

MEAN

SD

CV

2.24

16.30

0.80

Source: Secondary data

INTERPRETATION:Generally quick ratio of 1:1 represents a satisfactory current financial condition. But we
haveseen in table that not evens a single year it has achieved. In all five years liquid ratios are
lessthan 1.It indicates that firm has found difficult to meet its obligations because its quick
assetsare lesser than current liabilities. Similarly both years 2009-10 the companyhas good
finance position but later stages it dropped to 0.4 and then to last to 0.1. Companys current
financial condition is not satisfactory because liquid assets are less thanLiabilities.

QUICK ASSET RATIO

0.9
0.8
0.7
0.6
QUICK ASSET RATIO

0.5
0.4
0.3
0.2
0.1
0
2006-07

2007-08

2008-09

2009-10

2010-11

FIGURE NO 4.2SHOWING QUICK RATIO

29

4.3 CASH POSITION RATIO

It may be defined as therelationship between the available cash both at bank and in hand
and current liabilities. A ratio of 1.1 is considered to be a good ratio but a rate of 0.75:1 is also
good. Such a ratio would imply that the firm has enough cash on hand to meet all the current
liabilities.
Cash position ratio = cash / current liabilities
TABLE NO 4.4 SHOWING CASH POSITION RATIO
CURRENT

YEARS

CASH

2007-08

300000

15,88,000

0.18

2009-10

850000

19,95,000

0.42

2010-11

412000

28,88,000

0.14

2011-12

1246000

43,79,000

0.28

2012-13

1188000

79,00,000

0.15

LIABILITIES

30

RATIO

MEAN

SD

CV

1.17

4.43

0.42

Source: Secondary data

INTERPRETATION:The bank cash balance to current liabilities recorded is 0.18, 0.42, 0.14, 0.28 and 0.15 in
the year 2008, 2009, 2010, 2011, 2012 and 2013 respectively. In the year 2010, the highest ratio
was recorded.

CASH POSITION RATIO

0.45
0.4
0.35
0.3
CASH POSITION RATIO

0.25
0.2
0.15
0.1
0.05
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.3SHOWING CASH POSITION RATIO

31

4.4 SOLVENCY RATIO

It can be define as the relationship between total liabilities and total assets
Solvency ratio = total liabilities / total assets*100
Generally lower the solvency ratio, more satisfactory or stable is the long-term solvency
position of a firm.
TABLE NO 4.4SHOWING SOLVENCY RATIO
Solvency Ratio

YEAR

Total Liabilities

Total Assets

2007-08

1588000

1867000

85.05

2009-10

1995000

3640000

54.80

2010-11

2888000

3175000

90.96

32

2011-12

4379000

5194500

84.30

2012-13

7900000

9579500

82.46

MEAN

SD

CV

397.5

506.36

4.5

Source: Secondary data

INTERPRETATION:The above ratio shows90.96% in the year 2011. It has also remained the same in the year
2008. In the year 2012, it was 84.30% and the year 2013 was decreases to 82.46. we can notice
from the ratios calculated above that they have remain almost the same in the five consecutive
years.

Solvency Ratio
100
90
80
70
60

Solvency Ratio

50
40
30
20
10
0
YEAR

2007-08

2009-10

2010-11

2011-12

FIGURE NO 4.4SHOWING SOLVENCY RATIO

33

2012-13

4.5 INVENTORY TURNOVER RATIO

This ratio measures the stock in relation to turnover in order to determine how often the
stockturns over in the business.
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Cost of Goods Sold=Sales-Gross Profit
TABLE NO 4.5SHOWING INVENTORY TURNOVER RATIO
COST OF GOODS

AVERAGE

INVENTORY

SOLD

INVENTORY

TURNOVER RATIO

(In Rs)

(In Rs)

(In Times)

2007-08

19,21,000

3,81,000

5.04

2009-10

33,81,000

4,43,000

7.63

2010-11

37,24,000

4,01,000

9.28

2011-12

50,24,000

4,37,000

11.49

YEARS

34

2012-13

46,40,000

5,14,000

9.02

MEAN

SD

CV

42.46

5791.65

15.22

Source: Secondary data

INTERPRETATION:
The company inventor turnover ratio of 2007-08 5.04 times and 2011 -12 it increase to 11.49
times which indicates company efficiently manage in inventory it shows that company take effort
to efficient inventory management.

INVENTORY TURNOVER RATIO

12
10
8
INVENTORY TURNOVER RATIO
6
4
2
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.5SHOWING INVENTORY TURNOVER RATIO

35

4.6 DEBTOR TURNOVER RATIO

It is determined by dividing the net credit sales by average debtors outstanding during
theyear. The analysis of the debtors turnover ratio supplements the information regarding
theliquidity of one item of current assets of the firm. The ratio measures how rapidly
receivablesare collected.
Debtors Turnover Ratio = Net credit sales / Average Debtors
TABLE NO 4.6 SHOWING DEBTOR TURNOVER RATIO
NET CREDIT

AVERAGE

DEBTOR TURN

SALES

DEBTOR

OVER RATIO

(In Rs)

(In Rs)

( in Times)

2007-08

16,68,660

5,06,050

3.30

2009-10

27,24,090

4,37,030

6.23

YEARS

36

2010-11

39,90,050

5,47,340

7.28

2011-12

63,20,800

7,97,160

7.92

2012-13

56,81,090

8,50,070

6.68

MEAN

SD

CV

31.14

3102

11.13

Source: Secondary data

INTREPRETATION
The companys debtors turnover ratio of 2007-08 3.30 times, in 2011-12 7.93 times in a
yearwhich indicates company collects its receivable rapidly. We can say year to year the shorter
Time lag between credits sells and collection.

DEBTOR TURNOVER RATIO

8
7
6
5

DEBTOR TURN OVER RATIO

4
3
2
1
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.6SHOWING DEBTOR TURNOVER RATIO

37

4.7 DEBTOR COLLECTION PERIOD

Debtors Collection Period is calculated from following formula:
Debtors Collection Period = 360 days / Debtors Turnover Ratio

DEBTOR
YEARS

DAYS IN YEAR

TURNOVER RATIO
(In Times)

DEBTOR
COLLECTION
PERIOD
(in days)

2007-08

360

3.30

109

2009-10

360

6.23

58

2010-11

360

7.28

49

38

2011-12

360

7.92

45

2012-13

360

6.68

54

MEAN

SD

CV

315

320262

113.18

TABLE NO 4.7 TABLE SHOWING DEBTOR COLLECTION PERIOD

Source: Secondary data
INTREPRETATION
According to debtor collection period from above table, Company was following liberal
Credit policy as its collection period of 2007-08 was 109 days. But on account of
negativeWorking it has changed its credit policy and reduced its collection period in 2012-13 by
54 days

39

DEBTOR COLLECTION PERIOD

120

100

80
DEBTOR COLLECTION PERIOD
60

40

20

0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.7SHOWING DEBTOR COLLECTION PERIOD RATIO

40

4.8 CREDITORS TURNOVER RATIO

Creditors Turnover Ratio = Net Credit Purchase / Average Creditors
TABLE 4.8 SHOWING CREDITOR TURNOVER RATIO
NET CREDIT

AVERAGE

CREDITOR

PURCHASE

CREDITOR

TURNOVER RATIO

(Rs)

(In Rs)

(Times Per Year)

2007-08

20,58,057

7,86,059

2.61

2009-10

32,94,400

10,20,590

3.22

2010-11

33,54,500

11,21,190

2.99

2011-12

52,05,670

17,17,900

3.03

2012-13

46,50,700

19,73,300

2.35

MEAN

SD

CV

14.2

645.72

5.08

YEARS

Source: Secondary data

INTERPRETATION:Above stated graph indicates that in Mar06 Company has settled its creditors accounts
2.61Times in a year. In Mar07 it had increased by 3.22 which show that company had settled its
account rapidly. From Mar08 to Mar10 it has paid its creditors account average of 3 times. If
creditors Turnover ratio is high, companys requirements of working capital will increase and
vice versa.

41

CREDITOR TURNOVER RATIO

3.5
3
2.5
CREDITOR TURNOVER RATIO

2
1.5
1
0.5
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE 4.8 SHOWING CREDITOR TURNOVER RATIOS

42

4.9.CREDITORS COLLECTION PERIOD

Creditors Payment Period = 360 / Creditors Turnover Ratio
TABLE NO 4.9. SHOWING CREDITOR COLLECTION PERIOD
YEARS

DAYS IN YEAR

CREDOTORS

CREDITORS

TURNOVER RATIO

COLLECTION

(Times Per Year)

PERIOD (In Days)

2007-08

360

2.61

137

2009-10

360

3.22

111

2010-11

360

2.99

120

2011-12

360

3.03

123

2012-13

360

2.35

153

MEAN

SD

CV

644

1328236

230.49

Source: Secondary data

INTERPRETATION:
According to creditor collection period from above table, Company was following
liberalCredit policy as its collection period of 2007-08 was 137 days. But on account of
negativeWorking it has changed its credit policy and reduced its collection period in 2010-11 by
120days.Later on collection period was gradually increased to 153 days in the year 2012-13.

43

CREDITORS COLLECTION PERIOD

160
140
120
100

CREDITORS COLLECTION PERIOD

80
60
40
20
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE 4.9 SHOWINGCREDITOR COLLECTION PERIOD

44

4.10WORKING CAPITAL ANALYSIS

The working capital is calculated from current assets and current liability. It indicate the
total sum of money need for carried out day to day expenses in business
Working Capital = Current Assets Current Liabilities
TABLE NO-4.10 SHOWING WOKING CAPITAL FOR YEARENDED
(In Rs)

Year

Current Assets

Current Liabilities

Working Capital

2007-08

18,67,000

15,88,000

2,79,000

2009-10

36,40,000

19,95,000

16,45,000

2010-11

31,75,000

28,88,000

2,87,000

2011-12

51,94,500

43,79,000

8,15,500

2012-13

95,79,500

79,00,000

16,79,500

MEAN

SD

CV

4706000

19598239

885.4

Source: Secondary data

Interpretation:From 2007- 08 companys working capital is negative which indicates companies
operating efficiency during this period goes down and company is facing difficulties in meeting
its day to day obligations. In 2009 and 2013 its working capital is positive, which intimates
improvement in operating efficiencies.

45

1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2008-09

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.10 SHOWING WOKING CAPITAL FOR YEARENDED

46

4.11SALES TO NET WORKING CAPITAL RATIO

Sales to Net Working Capital Ratio = Sales / Net Working Capital
TABLE NO 4.11 SHOWING NET WORKING CAPITAL RATIO
NET CREDIT

NET WORKING

NET WORKING

SALES

CAPITAL

CAPITAL RATIO

(In Rs)

(In Rs)

(In Rs)

2007-08

1668660

2,79,000

5.98086

2009-10

2724090

16,45,000

1.655982

2010-11

3990050

2,87,000

13.90261

2011-12

6320800

8,15,500

7.750828

2012-13

5681090

16,79,500

3.382608

MEAN

SD

CV

32.4

3920.04

12.52

YEARS

Source: Secondary data

INTERPRETATION
The sales to net working capital ratio holds good. There is step increase in the year 201011 because of the increase in the liability of the firm. The working capital of the firm is
decreasing after 2012-13 due to delay in collection period.

47

NET WORKING CAPITAL RATIO

14
12
10
NET WORKING CAPITAL RATIO

8
6
4
2
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.11 SHOWING NET WORKING CAPITAL RATIO

48

4.12 CURRENT LIABILITIES TO NET WORTH

Current Liability to Net Worth = Current Liability / Net Worth
TABLE NO 4.12 SHOWING CURRENT LIABILITIES TO NET WORTH
YEARS

CURRENT

CURRENT

NET WORTH

LIABILITY

LIABILITY TO
NET WORTH (%)

2007-08

15,88,000

10,94,000

145.1554

2009-10

19,95,000

17,30,000

115.3179

26,64,000

108.4084

43,79,000

100

79,00,000

100

MEAN

SD

CV

568.8

1036789

203.64

2010-11
2011-12
2012-13

28,88,000
43,79,000
79,00,000

Source: Secondary data

INTERPRETATION:
The current liability to net worth ratio shows the ability of the firm to meet its liability.
The above analysis shows that the company has less net worth to meet the liabilities. If this
continues the company may face a huge problem. The company should increase its net worth by
increasing its capital and it should reduce the liabilities especially the loans secured.

49

CURRENT LIABILITY TO NET WORTH

160
140
120
100

CURRENT LIABILITY TO NET

WORTH

80
60
40
20
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.12 SHOWING CURRENT LIABILITIES TO NET WORTH

50

4.13 NET PROFIT RATIO

This ratio determines the overall efficiency of the business. The
relationship of net profit
To sales is known as net profit ratio. It also called as sales margin ratio (or)
profit margin ratio.
Net Profit Ratio = Net Profit / Sales*100
TABLE NO 4.13 SHOWING CURRENT LIABILITIES TO NET WORTH
SALES

NET PROFIT

(In Rs)

(In Rs)

2007-08

1668660

2,79,000

16.72

2009-10

2724090

16,45,000

60.38

2010-11

3990050

2,87,000

7.19

2011-12

6320800

8,15,500

12.90

2012-13

5681090

16,79,500

29.56

MEAN

SD

CV

126.75

53213.6

46.13

YEARS

NET PROFIT RATIO

Source: Secondary data

INTERPRETATION:
The above table financial analysis of the net working capital ratio of the company is good
financial performance of the statement. In the year 2009-12 most increase in 60.38 and another
year decrease from the period.

51

NET PROFIT RATIO

70
60
50
NET PROFIT RATIO

40
30
20
10
0
2007-08

2009-10

2010-11

2011-12

2012-13

FIGURE NO 4.12 SHOWING NET WORKING CAPITAL TO NET WORTH

52

4.12 COMPARATIVE BALANCE SHEET

The Comparative balance sheet analysis is the study of the trend of the same items, group
of items and computed items in two or more balance sheets of the same business enterprise on
different dates.
The changes in periodic balance sheet items reflect the conduct of a business. The
changes can be observed by comparison of the balance sheet at the beginning and at the end of a
period and these changes can help in forming an option about the progress of an enterprise.
The comparative balance sheet has two columns for the data of original balance sheets. A
third column is used to show increase in figures. The fourth column may be added for giving
percentages of increases or decreases

53

TABLE NO 4.12.1 COMPARATIVE BALANCE SHEET FOR 2009 TO 2010

Comparative 2009

Increase or

and 2010

Decrease in

(In Rs)

percentage (%)

3,52,000

98,000

16.1

17,30,000

26,64,000

9,34,000

21.2

19,95,000

28,88,000

8,93,000

18.2

1,37,90,000
16,90,00,000

2,31,20,000
28,41,00,000

93,30,000
11,51,00,000

25.2
25.4

3,51,000

13,28,000

9,77,000

58.1

10,28,000

2,47,000

-7,81,000

-61.2

8,50,000

4,12,000

-4,38,000

-34.7

30,79,000

24,23,000

-6,56,000

-11.9

36,40,000
Assert
Source: Secondary data

31,75,000

-4,65,000

-6.8

2009

2010

(In Rs)

(In Rs)

Capital

2,54,000

Net worth

Years

Total
Liabilities
Reserves
Net Block
Investment
s
Sundry
Debtors
Cash and
bank
balance
Net Current
assert
Current

INTREPR.ETATION
As per the table 2oo9 Kodiss apparels total liability was increased to 18.2 % as compare
with 2010. The asset was decreased to -6.8%. So company should increase their asset and
reduce liability over all financial performances is little lower when compare to 2009.the
company should take necessary steps to overcome.

54

Comparative Balance sheet for 2009 to 2010 in %

100
80
60
40
20
Increasing-->
0
-20
-40
-60
-80
Decreasing -->

55

TABLE NO 4.13.1 SHOWING COMPARATIVE BALANCE SHEET FOR 2010TO 2011

Comparative
Balance
Years

2010

2011

Sheet Of
2010 and
2011

Comparative
Balance Sheet Of
2010 and 2011 in
(%)

Capital

7,05,000

70,00,000

62,95,000

81.70

Net worth

43,79,000

79,00,000

35,21,000

28.67

Reserves

3,67,60,000

7,19,50,000

3,51,90,000

32.37

Net Block

2,92,40,000

2,82,50,000

-9,90,000

-1.72

Inventories

3,66,000

50,90,000

47,24,000

86.58

Sundry Debtors

18,47,000

7,48,000

-10,99,000

-42.35

12,46,000

11,88,000

-58,000

-2.38

38,15,500

83,28,700

45,13,200

37.16

Fixed deposit

3,69,000

9,84,100

6,15,100

45.45

Current Assert

51,94,500

95,79,500

43,85,000

29.68

Cash and bank

balance
Net Current
assert

Source: Secondary data

INTREPR.ETATION
As per the table 2o11 company sundry debtor was decreased to 42.2 % as compared with
2010. O company follow strict collection policy in order to get receivables the company was
inventory increased nearly 80%. so company should decreased the inventory by reduce the
stocks. Over all financial performances is good when compare to 2011.the Company should take
necessary steps to overcome.

56

Comparative Balance Sheet for 2010 to 2011 in (%)

100

80

60

40

20

-20

-40

-60

57

CHAPTERV
5.1 FINDINGS

The current ratio of the company is not up to the mark. 1.82

Liquid ratio is keep reduced from 0.8 to 0.16

The collection period is high from 3 times to 6 times

Sales are keeping reduced due to week of industry.

The net worth of the company is less. Is 100%

The current asset of the company is low as the return on sales is delayed

The inventory of the company is less as the dresses are manufactured according to the
order.

The liability of the firm is high as the company has to more interest on loans obtained.

The total liability to net worth ratio doesnt holds good as the net worth of the company
tends to be low.

The working capital of the company is weakening year by year as the collection period
increases.

58

5.2 SUGGESTIONS
Keeping in view the stated observation relating to the project study, the following are the
measurers and terms of suggestions are founded out which the SAKTHI GANESH TEXTILES
(P) LTD should follow to improve the performance of the company.

The company locked large amount of current assets. So the company should try to control

the cost among the inventories and other current assets.

The management of SAKTHI GANESH TEXTILES (P) LTD should adopt the practical of
periodical intercompany comparison. This comparative study will help to pin point the

area of weakness and strength the management to take timely corrective action.
Problem of surplus investment in inventory and receivables in SAKTHI GANESH
TEXTILES (P) LTDcan largely be tackled through improved co-ordination in functioning

of some strategic departments such as purchase, production, marketing and finance,

strengthening up of management information system in SAKTHI GANESH TEXTILES (P)
LTD.

59

5.3 RECOMMENDATIONS

The company has to reduce the collection period.

The company should get into an agreement with the debtors in order to collect the
money back.

The company should try to pay back the loans obtained so that the liability of the
company is brought down.

Net profit of the company can also be increased by increasing the sales and other
incomes simultaneously reducing the cost of goods sold, operating and other expenses.

The amount of working capital of the company has reduced in 2006 to 07.so company
may increase asset by increasing cash and bank balance through efficiently.

The company may take steps to see that time allotted for the debtor to repay.

To have the efficient working capital management, the short term funds should be used
efficiently in the operations of the business. In the management capital investment in
current assets must be systematically planned. It is advice able to follow a studied and
credit policy it improve the standard of liquidity

Cash and bank balance was very low. It is suggested that cash and bank balance should
be increased, so as to meet working capital needs and current liabilities.

60

5.4CONCLUSION

The project entitled AN ORGANISATIONAL STUDY AND STUDY ON

WORKING CAPITAL ANALYSIS WITH SPECIAL REFERENCE TO SAKTHI
GANESH TEXTILES (P) LTD ERODE is undertaken with the objective

of examining the working capital analysis and to measure the

profitability.
From the study the current ratio and quick ratio is not up to the
standard norms 2:1 and 1:1; Gross profit and Net profit position of the
company is not good; Liquidity position of the company is good; Longterm solvency position of the company is also good from the analysis;
Return on total assets quite good; Growth in sales is good; The
company should increase its sales and to decrease its expenses.

61

5.5BIBILIOGRAPHY

Management Accounting - R.K. Sharma and Shashi Gupta, 2001 ( New Delhi)
Financial Management

- I.M. Pandy Vikas Publishing House Private Ltd 2009-09-07

Management Accounting M.K. Khan and P.K Jain Tata Mcgraw-Hill publishing house
P.Mohana Rao and Alok L.Pramanik, working capital management-Deep & Deep Publications
Ltd,
New Delhi
WEB SOURCE
www.Google.com
www.fincialthoughtsinindia.co.in

62

BALANCE SHEET AS ON YEAR ENDED

Balance Sheet of AN ORGANISATIONAL STUDY AND STUDY ON WORKING

CAPITAL ANALYSIS WITH SPECIAL REFERENCE TO SAKTHI GANESH TEXTILES (P)
LTDERODE
Years
2008-09
2009-10
2010-11
2011-12
2012-13
Source Of Funds
Capital

2,54,000

2,54,000

3,52,000

7,05,000

70,50,000

Net worth

10,94,000

17,30,000

26,64,000

43,79,000

79,00,000

Total Dept

4,94,000

2,65,000

2,24,000

Total Liabilities

15,88,000

19,95,000

28,88,000

43,79,000

79,00,000

Total Share Capital

25,40,000

25,40,000

35,20,000

70,50,000

70,50,000

Reserves

84,00,000

1,37,90,000

Secured Loans

11,50,000

4,10,000

40,000

Unsecured Loans

37,90,000

22,40,000

22,10,000

2,31,20,000 3,67,60,000

7,19,50,000

Application Of
funds
Gross Block

3,04,10,000 40,53,00,000 5,35,00,000 5,59,50,000

56,60,00,000

Less Depreciation

1,55,50,000 23,63,00,000 2,50,90,000 2,67,10,000

28,35,00,000

Net Block
Working Capital In
Progress
Investments

1,48,60,000 16,90,00,000 2,84,10,000 2,92,40,000

28,25,00,000

3,20,000

3,64,000

6,00,000

3,51,000

13,28,000

3,56,500

9,38,700

Inventories

3,13,000

8,50,000

4,36,000

3,66,000

50,90,000

Sundry Debtors

3,84,000

10,28,000

2,47,000

18,47,000

7,48,000

Cash and bank balance

3,00,000

8,50,000

4,12,000

12,46,000

11,88,000

Net Current assert

15,97,000

30,79,000

24,23,000

38,15,500

83,28,700

Loan And Advance

2,61,000

5,48,000

5,61,000

10,10,000

2,66,700

Fixed deposit

9,000

13,000

1,91,000

3,69,000

9,84,100

Current Assert

18,67,000

36,40,000

63

31,75,000 51,94,500

95,79,500

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